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Mixed Merger Information and Requirements

Carriers must notify USAC within 30 days of a merger closing when a company receiving a fixed level of High Cost support (e.g. model-based support) acquires or is acquired by an average schedule company or a company receiving support based on its costs.

On May 11, 2018, the FCC released an order (FCC 18-62 ) approving the purchase of a carrier receiving model-based support by a carrier receiving legacy support. This type of transaction is known as a “mixed merger.” FCC approval was subject to a condition now known as the “Hargray condition,” which caps the operating expense of the carriers of the combined entity that receive cost-based support.  The purpose of this condition is to prevent potential cost shifting.

This condition has been applied to subsequent mixed mergers and requires carriers to:

  1. Notify USAC of the merger within 30 days of the merger closing date.
  2. Submit the latest audited financial statements to USAC, including all notes and consolidating statements, by December 31, annually, for seven years following the merger. This submission should also include a certification that the carrier has complied with the “Hargray condition”.

Carriers should send these submissions to USAC at hcinfo@usac.org.

The condition “sunsets” if any of the cost-based carriers involved in the mixed merger become fixed-support carriers at any point during the seven-year period.

For questions please write to hcinfo@usac.org or call (888) 641 – 8722 and ask for High Cost Operations.