NEWSReport No. DC 95-122   ACTION IN DOCKET CASE            October 4, 1995

       FCC PROPOSES A SIX-MONTH EXTENSION OF THE INTERIM INDEXED CAP
                       OF THE UNIVERSAL SERVICE FUND
                          (CC Docket No. 80-286)

     The FCC proposed a six-month extension of the interim indexed cap of the Universal
Service Fund (USF).  The cap was intended to be effective as an interim measure moderating
the growth of the USF during the pendency of a broader rulemaking that revises the Part 36
jurisdictional separations rules, which govern the USF.  The  interim cap expires on January
1, 1996.  The extension would maintain the interim cap while the rulemaking is completed.

     The Commission adopted the two-year indexed cap for the purpose of moderating
growth in the USF during the pendency of a rulemaking that addresses possible permanent
changes to the Part 36 jurisdictional separations rules.  Previous changes to the rules had
involved lengthy phase-in periods to ease the transition for affected carriers.  By moderating
the growth in the USF and consequently individual carriers' draw from that fund, the interim
cap was intended to enable the Commission to implement new rules in a timely manner.  The
two-year period was selected in the belief that the rulemaking would be completed within that
time.

     On August 30, 1994, the Commission released an initial Notice of Inquiry requesting
comment on several policy questions relating to the goals and effects of high-cost assistance
and on two alternative approaches to the high-cost assistance mechanisms of Part 36.  On
July 13, 1995, the Commission subsequently released a Notice of Proposed Rulemaking and
Notice of Inquiry inviting comment on proposals for revising the Part 36 jurisdictional
separations rules.  On August 31, 1995, in response to requests from interested parties,
including the Alaska Public Utilities Commission, the deadlines for comments and reply
comments on the issues raised in the July Notice of Proposed Rulemaking and Notice of
Inquiry were extended four additional weeks, to October 10, 1995 and November 9, 1995,
respectively.  In granting the extension, the FCC explained that the four-week delay would
serve the public interest by facilitating more detailed analysis and more valuable comments
by interested parties, both of which should prove helpful to the ultimate resolution of the
complex issues presented in the July Notice of Proposed Rulemaking and Notice of Inquiry.




                                 - over -



                                   - 2 -

     Action by the Commission October 2, 1995 by NPRM (FCC 95-416).  Chairman
Hundt, Commissioners Quello, Barrett, Ness and Chong.

                                  - FCC -

News Media contact: Susan Lewis Sallet at (202) 418-1500.
Common Carrier Bureau contacts: Deborah A. Dupont at (202) 418-0873 and Clara Kuehn at
(202) 418-0844.