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Federal Communications Commission

FCC 13-27

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
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Universal Service Contribution Methodology
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WC Docket No. 06-122
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Federal-State Joint Board on Universal Service
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CC Docket No. 96-45
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1998 Biennial Regulatory Review-Streamlined 
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CC Docket No. 98-171
Contributor Reporting Requirements Associated 
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with Administration of Telecommunications Relay  )
Service, North American Numbering Plan, Local 
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Number Portability, and Universal Service Support  )
Mechanisms
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Telecommunications Services for Individuals with  )
CC Docket No. 90-571
Hearing and Speech Disabilities, and the Americans  )
with Disabilities Act of 1990
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Administration of the North American Numbering  )
CC Docket No. 92-237 
Plan and North American Numbering Plan Cost Recover 
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NSD File No. L-00-72
Contribution Factor and Fund Size
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Number Resource Optimization
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CC Docket No. 99-200 
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Telephone Number Portability
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CC Docket No. 95-116
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Truth-in-Billing and Billing Format
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CC Docket No. 98-170
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American Public Communications Counsel Petition for 
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for Reconsideration
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Petition for Clarification 
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Or, in the Alternative Reconsideration, 
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filed by Central Atlantic Pennsylvania Payphone 
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Association
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MEMORANDUM OPINION AND ORDER

Adopted:  February 26, 2013

Released:   February 27, 2013

By the Commission:

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Federal Communications Commission

FCC 13-27

I.

INTRODUCTION 

1.
In this order, we address a petition filed by the Central Atlantic Pennsylvania Payphone 
Association (CAPA) seeking clarification, or in the alternative reconsideration, of the Commission’s 2008 
Centrex Waiver Reconsideration Order.1 In that order, the Commission granted a request seeking 
modification of that portion of the Commission’s 2003 Centrex Waiver Order that provided an interim 
waiver of section 54.712 of the Commission’s rules,2 to permit local exchange carriers (LECs) to recover 
certain contribution costs associated with Centrex customers on a per-line basis from multi-line business 
customers through a federal universal service line item, to the extent that the interim waiver was applied 
to independent payphone service providers (PSPs).3 CAPA requests that we clarify that the 2008 Centrex 
Waiver Reconsideration Order requires LECs to refund to PSPs any above-cost universal service charges 
LECs collected from PSPs before the Commission modified the interim waiver in the 2008 Centrex 
Waiver Reconsideration Order.4 For the reasons discussed below, we deny CAPA’s request.  We find 
that both the 2003 Centrex Waiver Order and the 2008 Centrex Waiver Reconsideration Order were 
changes in Commission policy that applied prospectively and, insofar as the LECs’ imposed charges were 
tariffed pursuant to the 2003 waiver and deemed lawful, those charges are not subject to refunds.

II.

BACKGROUND

2.
In 2002, the Commission adopted section 54.712, which allows carriers to recover federal 
universal service fund (USF or Fund) contributions amounts from their customers as a separate line item 
on the customer’s bill, but limits such recovery amount to the interstate portion of the bill times the 
relevant USF contribution factor.5 Subsequently, the Commission released the 2003 Centrex Waiver 
Order granting, in relevant part, an interim waiver of section 54.712 to permit LECs to continue 
 
 
1 Petition for Clarification or, in the Alternative Reconsideration, by Central Atlantic Pennsylvania Payphone 
Association, CC Docket No. 96-45 et al. (filed Mar. 14, 2008) (CAPA Petition); Federal-State Joint Board on 
Universal Service et al., CC Docket No. 96-45 et al., Order on Reconsideration, 23 FCC Rcd 2567 (2008) (2008 
Centrex Waiver Reconsideration Order).
2 See Federal-State Joint Board on Universal Service et al., CC Docket No. 96-45 et al., Order and Second Order on 
Reconsideration, 18 FCC Rcd 4818 (2003) (2003 Centrex Waiver Order); 47 C.F.R. § 54.712.
3 Sections 69.131, 69.153(e), and 69.158 of our rules give local exchange carriers the option of recovering their 
contribution costs from Centrex customers through a universal service line item, that uses the equivalency ratios 
established for Centrex lines under our rules governing the presubscribed interexchange carrier charge (PICC).  47 
C.F.R. §§ 69.131, 69.153(e), 69.158.  In 1997, the Commission adopted, for purposes of the PICC, a ratio of up to 
nine Centrex lines to one private branch exchange (PBX) trunk.  See Access Charge Reform; Price Cap 
Performance Review for Local Exchange Carriers; Transport Rate Structure, CC Docket Nos. 96-262, 94-1, 91-
213, Second Order on Reconsideration and Memorandum Opinion and Order, 12 FCC Rcd 16606, 16616-18, paras. 
33-38 (1997).  The Commission subsequently granted local exchange carriers the option of applying this 
equivalency ratio to the recovery of universal service contribution costs from Centrex customers.  See Access 
Charge Reform, Price Cap Performance Review for Local Exchange Carriers, CC Docket Nos. 96-262 and 94-1, 
Sixth Report and Order; Low-Volume Long-Distance Users, CC Docket No. 99-249, Report and Order; Federal-
State Joint Board on Universal Service, CC Docket No. 96-45, Eleventh Report and Order, 15 FCC Rcd 12962 
(2000), aff’d in part, rev’d in part and remanded in part, Texas Office of Public Util. Counsel v. FCC, 265 F.3d 313
(5th Cir. 2001).  See also 2003 Centrex Waiver Order.  
4 CAPA Petition at 1-2, 4-6.
5 See Federal-State Joint Board on Universal Service et al., CC Docket No. 96-45 et al., Report and Order and 
Second Further Notice of Proposed Rulemaking, 17 FCC Rcd 24952, 24974-83, paras. 40-63 (2002); 47 C.F.R. § 
54.712 (“the amount of the federal universal service line-item charge may not exceed the interstate 
telecommunications portion of that customer’s bill times the relevant contribution factor”).
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Federal Communications Commission

FCC 13-27

recovering from multi-line business customers federal universal service contribution costs through 
universal service line-items using the equivalency ratios established for Centrex lines under the 
Commission’s rules governing the presubscribed interexchange carrier charge.6  The 2003 Centrex 
Waiver Order became effective on April 1, 2003.
3.
The American Public Communications Council (APCC) filed a petition seeking 
modification of the interim waiver granted in the 2003 Centrex Waiver Order to the extent it permitted 
LECs to use equivalency ratios to assess USF charges on its multi-line business customers that were 
PSPs.7 In the 2008 Centrex Waiver Reconsideration Order, the Commission granted APCC’s petition for 
reconsideration and modified the interim waiver to prohibit LECs from charging additional USF line-item 
amounts related to the Centrex adjustments to PSPs.8 The Commission concluded that allowing for an 
upward adjustment of the universal service line-item to compensate for the Commission’s treatment of 
Centrex services results in charges associated with payphone lines that are not cost-based, and that the 
application of the Centrex-adjusted portion of the universal service line item to PSPs is inconsistent with 
Commission decisions promoting the goals of section 276 of the Communications Act of 1934, as 
amended (Act).9 The Commission directed PSPs to identify themselves to their respective underlying 
LECs within 30 days and provided LECs with 90 days after the effective date of the 2008 Centrex Waiver 
Reconsideration Order to comply with the decisions contained in the order.10
4.
CAPA Petition. CAPA is an industry trade organization whose members are independent 
payphone providers that own and operate payphones in Pennsylvania.11 CAPA filed a petition for 
clarification, or in the alternative, reconsideration of the Commission’s 2008 Centrex Waiver 
Reconsideration Order.12 CAPA argues that because application of the interim waiver of section 54.712 
to PSPs resulted in charges that were not cost-based and that imposition of such charges was inconsistent 
with section 276 of the Act, the Commission should clarify its order and direct LECs to refund the 
amount of any non-cost-based charges assessed on payphone providers pursuant to the 2003 Centrex 
Waiver Order.13 CAPA also argues that LECs should refund those amounts as a matter of fairness and 
equity.14  
 
 
6 See supra note 3. 
7 American Public Communications Council, Petition for Reconsideration, CC Docket No. 96-45 et al. (filed Apr. 
30, 2003).
8 2008 Centrex Waiver Reconsideration Order, 23 FCC Rcd at 2567, 2570, paras. 1, 8.
9 Id. at 2569-70, paras. 7-8.  Congress enacted section 276 of the Act to “promote competition among payphone 
service providers and promote the widespread deployment of payphone service to the benefit of the general 
public[.]”  47 U.S.C. § 276(b).
10 2008 Centrex Waiver Reconsideration Order, 23 FCC Rcd at 2570, para. 9.
11 See CAPA Petition at 2.
12 See generally id.
13 Id. at 4.
14 Id. at 4-6.
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Federal Communications Commission

FCC 13-27

5.
Several commenters, all LECs, filed oppositions to CAPA’s petition.15 The commenters 
argue that LECs properly relied on the 2003 Centrex Waiver Order to recover a portion of USF 
contributions due on Centrex revenues from all their multi-line business customers, including PSPs.16  
They argue that the prohibition against retroactive rulemaking prevents the Commission from applying 
the 2008 Centrex Waiver Reconsideration Order on a retroactive basis and from requiring refunds of 
amounts charged based on the waiver.17 In response, CAPA argues that the 2008 Centrex Waiver 
Reconsideration Order did not create a new rule, but rather clarified an existing Commission policy that 
PSPs should not pay above-cost rates for universal service.18

III.

DISCUSSION

6.
We deny the relief sought by CAPA.  We find that the 2003 Centrex Waiver Order
allowed LECs to assess averaged USF charges on their multi-line business customers, including PSPs, 
and that the waiver was in effect until it was modified prospectively by the 2008 Centrex Waiver 
Reconsideration Order.  Accordingly, PSPs are not entitled to refunds for USF charges collected by the 
LECs prior to the effective date of the 2008 Centrex Waiver Reconsideration Order.  In addition, CAPA 
has not provided any evidence or legal argument that would warrant reconsideration of that order.
7.
We find no merit in CAPA’s argument that the absence of a specific reference to PSPs in 
the 2003 Centrex Waiver Order indicates that the Commission did not intend for the waiver to apply to 
those providers.  CAPA makes an unsupported statement that there is a “long line of separate cases and 
proceedings addressing issues specific to [PSPs] apart from the larger class of ‘multi-line business 
customers,’” and that the absence of a specific reference to PSPs in the 2003 Centrex Waiver Order leads 
to the conclusion that it was unreasonable for the LECs to apply the interim waiver to PSPs.19 We 
disagree.  The fact that the Commission addressed certain issues specific to PSPs in unrelated separate 
proceedings does not lead to a conclusion that the Commission intended the 2003 Centrex Waiver Order 
to exclude PSPs from the relevant determination or that it was unreasonable for LECs to interpret the 
order as including PSPs as a subset of their multi-line business customers.20 By its terms, the 2003 
Centrex Waiver Order applied to all multi-line business customers without exception, and LECs were not 
obligated to read an unwritten exception into that order.
8.
We next decline to grant CAPA’s request that the Commission order post hoc refunds.  
LECs that assessed USF charges consistent with the waiver before the 2008 Centrex Waiver 
Reconsideration Order took effect were in compliance with the applicable law at the time.  Moreover, in 
 
 
15 See Opposition of Verizon, CC Docket Nos. 96-45 et al. (filed May 14, 2008) (Verizon Opposition); Comments of 
Qwest Communications International, Inc. in Opposition to Central Atlantic Pennsylvania Payphone Association 
Petition, CC Docket Nos. 96-45 et al. (filed May 14, 2008) (Qwest Comments); Reply Comments of AT&T in 
Support of Oppositions of Verizon and Qwest, CC Docket Nos. 96-45 et al. (filed May 29, 2008) (AT&T Reply 
Comments).
16 Verizon Opposition at 2.
17 AT&T Reply Comments at 3; Qwest Comments at 4-6; Verizon Opposition at 4-7.
18 Reply Comments of the Central Atlantic Pennsylvania Payphone Association, CC Docket Nos. 96-45 et al. (filed 
May 29, 2008) (CAPA Reply Comments).
19 Id. at 4.
20 See, e.g., Revision of ARMIS Annual Summary Report (FCC Report 43-01) et al., CC Docket No. 86-182, Order, 
20 FCC Rcd 19377, 19379, para. 8 (Wireline Comp. Bur. 2005) (modifying the Automated Reporting Management 
Information System (ARMIS) Report 43-08 “to clarify that Payphone Lines are a subset of Multiline Business 
Switched Access Lines”). 
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Federal Communications Commission

FCC 13-27

granting the PSPs request for modification, the 2008 Centrex Waiver Reconsideration Order did not hold 
that the waiver granted in 2003 was inconsistent with the Act.21 Rather, the 2008 Centrex Waiver 
Reconsideration Order changed Commission policy and thus was properly applied prospectively.22 The 
prospective nature of the 2008 Centrex Waiver Reconsideration Order is underscored by the fact that the 
Commission explicitly modified the 2003 waiver, and established a 90-day grace period for LECs to 
come into compliance with the new policy.23  
9.
We also reject CAPA’s argument that, as a matter of equity and fairness, the Commission 
should direct LECs to refund universal service pass-through charges collected from PSPs.24 Indeed, we 
find no support for CAPA’s argument that the LECs “will reap the financial benefits of the PSP 
overpayments made” between the effective dates of the 2003 Centrex Waiver Order and the 2008 Centrex 
Waiver Reconsideration Order.25 The amounts in dispute were USF pass-through charges to recover 
amounts that LECs were obligated to contribute to the Fund, and nothing in the record before us suggests 
that these amounts were not paid into the Fund.  Therefore, the tariffed charges were not funds with which 
the LECs unjustly enriched themselves.26 We also agree with Verizon that, insofar as the charges were 
tariffed pursuant to the 2003 waiver and deemed lawful, those charges are not subject to refunds.27
10.
We also deny CAPA’s request to reconsider the 2008 Centrex Waiver Reconsideration 
Order.28 Reconsideration of a Commission’s decision may be appropriate when the petitioner cites error 
of fact or law, or represents new facts or changed circumstances which raise substantial or material 
questions of fact which otherwise warrant Commission review of its prior action.29 CAPA has provided 
no basis for reconsideration under the framework set forth in section 1.429 of our rules.  
 
 
21 See 2008 Centrex Waiver Reconsideration Order, 23 FCC Rcd at 2569, para. 7 (explaining that applying the 
waiver to PSPs “contravenes our goal to advance the pro-competitive statutory aims of section 276”).
22 We need not decide whether the 2003 Centrex Waiver Order and the 2008 Centrex Waiver Reconsideration Order
were rulemaking or adjudicatory orders.  Either way, we find that the 2008 Centrex Waiver Reconsideration Order
does not apply retroactively.  See Williams Natural Gas Co. v. FERC, 3 F.3d 1544, 1554 (D.C. Cir. 1993) (when an 
adjudicatory order substitutes new law for old law that was reasonably clear, “it may be necessary to deny 
retroactive effect to a rule announced in an agency adjudication in order to protect the settled expectations of those 
who had relied on the preexisting rule”); see also Bowen v. Georgetown University Hospital, 488 U.S. 204, 208 
(1988); id. at 216-221 (Scalia, J., concurring) (explaining that rules “have legal consequences only for the future”).
23 2008 Centrex Waiver Reconsideration Order, 23 FCC at 2570, para. 9.  We are not persuaded by CAPA’s 
argument that the 90-day compliance period established the timeframe in which LECs were required to provide 
refunds to PSPs.
24 CAPA Petition at 5-6; CAPA Reply Comments at 9-11.
25 CAPA Petition at 6.
26 47 C.F.R. § 54.712.
27 See 47 U.S.C. § 204(a)(3) (providing that tariffs are deemed lawful unless the Commission takes action before a 
tariff becomes effective); ACS of Anchorage v. FCC, 290 F.3d 403, 411 (D.C. Cir. 2002) (stating that, if a rate is 
lawful, “refunds are thereafter impermissible as a form of retroactive ratemaking”); Verizon Opposition at 6-7.
28 Although CAPA filed its petition pursuant to section 1.429(a) of our rules, it noted that it is not seeking 
modification of the order, but rather a clarification.  CAPA Petition at 1 n.1.
29 47 C.F.R. § 1.429. 
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FCC 13-27

IV.

ORDERING CLAUSES

11.
Accordingly, IT IS ORDERED, pursuant to sections 1, 2, 4(i)-(j), 254, 276, and 405 of 
the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 152, 154(i)-(j), 254, 276, 405, and 
section 1.429 of the Commission’s rules, 47 C.F.R. § 1.429, that the petition for clarification or, in the 
alternative reconsideration, filed by the Central Atlantic Pennsylvania Payphone Association is hereby 
DENIED.
12.
IT IS FURTHER ORDERED that, pursuant to section 1.103 of the Commission’s rules, 
47 C.F.R. § 1.103, this Order SHALL BE EFFECTIVE upon release.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
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