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CETC Support Customer Billing Address Order

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Released: July 28, 2014
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Federal Communications Commission

DA 14-1075

Before the

Federal Communications Commission

Washington, DC 20554

In the Matter of

)

)

Requests and Petitions for Guidance, Declaratory

)

Ruling, or Waiver of 47 C.F.R. § 54.307(b)

)

)

Requests for Review of the Decision of the

)

Universal Service Administrator by ACS Wireless,

)

Inc., AT&T Inc., Cordova Wireless

)

Communications, and PR Wireless, Inc.

)

)

Federal-State Joint Board on Universal Service

)

CC Docket No. 96-45

)

High-Cost Universal Service Support

)

WC Docket No. 05-337

)

Lifeline and Link-Up

)

CC Docket No. 03-109

ORDER

Adopted: July 28, 2014

Released: July 28, 2014

By the Acting Chief, Wireline Competition Bureau:

I.

INTRODUCTION

1.

In this Order, the Wireline Competition Bureau (Bureau) resolves multiple issues related

to the reporting of customer lines under the former identical support rule. Specifically, we resolve

appeals related to the requirement that competitive eligible telecommunications carriers (CETCs)

providing mobile service receive high-cost support in a particular service area based on customer billing

addresses.1 First, we conclude that petitioners have utilized acceptable and workable alternatives to the

use of billing addresses when reporting their line counts, and therefore we grant five appeals.

Second, we

grant a petition for waiver filed by Arctic Slope Telephone Association Cooperative (ASTAC). Lastly,

we grant in part a request to provide guidance to USAC filed by Mobi PCS and Cricket Communications;

the action taken today should provide sufficient clarity to USAC to resolve these outstanding matters.

II.

BACKGROUND

2.

Prior to the USF/ICC Transformation Order, CETCs received universal service funding

based on the identical support rule.2 Following the reforms contained in the USF/ICC Transformation

Order, the identical support rule and the accompanying requirements of section 54.307(b) were

1 See Appendix. In this Order, we use the term “appeals” to refer generically to requests for review of Universal

Service Administrative Company (USAC) decisions, petitions for waivers related to such decisions, and requests for

a declaratory ruling or issuance of guidance to USAC. We will refer to all of these parties as Petitioners.

2 See Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed

Rulemaking, 26 FCC 17663, 17825, para. 498 (2011) (USF/ICC Transformation Order), aff’d 753 F.3d 1015 (10th

Cir. 2014).

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DA 14-1075

eliminated starting in January 2012. Most CETCs stopped reporting line counts at that time.3 While the

identical support rule is no longer in effect, the petitions we resolve herein were all filed prior to 2012 or

are related to claims for funding prior to 2012.

3.

Under the former high-cost rules, a CETC received support for each subscriber line it

served in an incumbent local exchange carrier’s (LEC) service area.4 Under section 54.307(b) of the

rules, in order to receive high-cost support, an ETC providing mobile service was required to report the

customer’s billing address for the purpose of identifying the location where service is provided.5 When

the Commission adopted the use of customer billing address for purposes of calculating universal service

support in section 54.307(b), it did so because a customer’s billing address was a reasonable surrogate for

the customer’s location, and use of customer billing addresses would be administratively convenient for

CETCs, as most CETCs would already maintain such records.6 In adopting the use of customer billing

addresses, however, the Commission expressly recognized that in some circumstances a customer billing

address might be unavailable, and some alternative mechanism would need to be employed.7 The

Commission concluded that those situations would be addressed on a case-by-case basis.8

4.

Eight Petitioners filed various requests related to the customer billing address

requirement contained in section 54.307(b). Petitioners include ACS Wireless, Inc., ASTAC, AT&T,

Inc., Cordova Wireless Communications, LLC (Cordova), Cricket Communications, Inc. (Cricket),

3 See id. at 17663, 17825-30, paras. 498-511. CETC support generally is now frozen on a study area basis and

subject to a phase down, with the exception of support for CETCs serving the remote areas of Alaska. Id. at 17830-

32, paras. 513-19, 47 C.F.R. § 54.307(e)(3). Recently, the Commission proposed to freeze CETC support for

carriers serving the remote areas of Alaska as of December 31, 2014. The Commission also proposed to remove the

requirement for such CETCs to report line count information. Connect America Fund et al., WC Docket No. 10-90

et al., Report and Order et al., FCC 14-54, para. 256 (rel. Jun. 10, 2014) (Connect America Fund Order/FNPRM).

The Commission proposed to eliminate section 54.307(b) and to renumber and revise section 54.307(e) of the

current rules.

4 47 C.F.R. § 54.307(a).

5 47 C.F.R. § 54.307(b).

6 See

http://fjallfoss.fcc.gov/edocs_public/Query.do;jsessionid=QXpDfpHR6f8PnXnhdMcdJbmmfZ3v92lZgpR

00NJQ3PKYBVvlLx3h!-1597281469!-1646612613?numberFld=01-

157&numberFld2=&docket=&dateFld=&docTitleDesc= - 213054#213054Federal-State Joint Board on

Universal Service, Multi-Association Group (MAG) Plan for Regulation of Interstate Services of Non-Price Cap

Incumbent Local Exchange Carriers and Interexchange Carriers, CC Docket Nos. 96-45, 00-256, Fourteenth

Report and Order, Twenty-Second Order on Reconsideration, and Further Notice of Proposed Rulemaking in CC

Docket No. 96-45, and Report and Order in CC Docket No. 00-256, 16 FCC Rcd 11244, 11314-15, para. 181 (2001)

(Joint Board on Universal Service Order).

7 See id. at 11316, para. 184 n.438.

8 The Bureau previously granted a waiver of section 54.307(b) to a CETC in Alaska. In 2006, Bristol Bay Cellular

Partnership filed a petition seeking waiver from the customer billing address requirements of section 54.307(b).

Bristol Bay Cellular Partnership Petition for Waiver, CC Docket No. 96-45 (filed Nov. 13, 2006). Bristol Bay

offered mobile service in rural Alaska. Roughly two-thirds of Bristol Bay’s customers had billing addresses outside

of its ETC designated service area. The Bureau granted Bristol Bay’s request that it be allowed to use the customer

primary place of use rather than the customer billing address for purposes of reporting its line counts to determine

high-cost support. The Bureau recognized that unlike the majority of carriers, Bristol Bay’s customer billing

addresses differed significantly from the place of primary use of the service. Furthermore, the fact that Bristol Bay

did not offer roaming service prevented the company from “gaming the system” by attempting to receive support for

customers it served outside the service area for which it was designated an ETC. Federal-State Joint Board on

Universal Service, Bristol Bay Cellular Partnership Petition for Waiver of the Federal Communications

Commission’s Rules Concerning the Administration of the Universal Service Fund, CC Docket No. 96-45, Order, 22

FCC Rcd 21500, 21501-02, para. 5 (Wireline Comp. Bur. 2007).

2

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DA 14-1075

General Communication, Inc. (GCI), Mobi PCS, Inc., and PR Wireless, Inc. ACS Wireless,9 AT&T,10

Cordova,11 and PR Wireless12 request review of USAC decisions.13 In the alternative, ACS Wireless,14

ASTAC,15 and Cordova16 petition for waiver from the requirements of section 54.307(b). GCI seeks a

declaratory ruling that certain practices are consistent with Commission requirements.17 Cricket and

Mobi PCS have jointly filed a petition requesting that the Commission provide guidance to USAC.18

III.

DISCUSSION

5.

We now address specific factual circumstances to provide clarity as to how CETCs

should report line counts in situations when the customer’s billing address is either unavailable or does

not accurately represent the location of service, which will resolve appeals of outstanding audits. We

grant the relief requested by five of the Petitioners. We also grant a petition for waiver filed by ASTAC.

Finally, we grant in part the petition for guidance to USAC filed by Mobi PCS and Cricket. The

Commission did not intend that customer billing address would be an absolute requirement, to be used

even when doing so runs counter to the underlying goal of properly allocating universal service support to

areas where service is being provided.19

6.

To the extent CETCs still report line counts, they generally should continue to use

customer billing addresses when filing for support. However, the Commission has recognized that there

are circumstances where using customer billing addresses significantly misrepresents actual usage of

mobile service, and a CETC may use an alternate method to assign a customer location to advance the

underlying goal of section 54.307(b): accurately identifying where customers are actually using their

9 ACS Wireless Request for Review and Petition for Waiver, CC Docket No. 96-45, WC Docket No. 05-337 (filed

Jan. 17, 2012).

10 Request for Review by AT&T of Decision of the Universal Service Administrator, CC Docket No. 96-45, WC

Docket No. 05-337 (filed June 22, 2012) (AT&T June 22 Request for Review); Request for Review by AT&T of

Decision of the Universal Service Administrator, CC Docket No. 96-45 et al. (filed Apr. 16, 2013) (AT&T April 16

Request for Review). AT&T requests review on behalf of eight of its subsidiaries: Centennial Beauregard Cellular

LLC, Centennial Caldwell Cellular Corporation, Centennial Cellular Tri-State Operating Partnership, Centennial

Lafayette Communications LLC, Centennial Puerto Rico Operations Corporation, Dobson Cellular Systems, Inc.,

Michiana Metronet, Inc., and New Cingular Wireless PCS, LLC.

11 Request for Review by Cordova Wireless Communications, LLC of a Decision of the Universal Service

Administrator, CC Docket No. 96-45, WC Docket No. 05-337 (filed July 5, 2013) (Cordova Petition).

12 Request for Review by PR Wireless, Inc., of a Decision of the Universal Service Administrator, CC Docket Nos.

96-45, 03-109 (filed Apr. 5, 2010).

13 We review these appeals of USAC decisions de novo. 47 C.F.R. § 54.723(a).

14 ACS Wireless Request for Review and Petition for Waiver.

15 ASTAC Wireless LLC Petition for Waiver of Section 54.307(b) of the Commission’s Rules, CC Docket No. 96-

45 (filed Jan. 31, 2008).

16 Cordova Petition at 7-11.

17 Letter from John T. Nakahata, General Counsel, GCI, to Dana Shaffer, Bureau Chief, Wireline Competition

Bureau, Federal Communications Commission, CC Docket No. 96-45 (filed Jan. 26, 2009) (GCI Petition).

18 Mobi PCS, Inc. and Cricket Communications, Inc. Petition Requesting the Federal Communications Commission

to Provide Guidance to the Universal Service Administrative Company, CC Docket 96-45 (filed May 29, 2009)

(Mobi PCS/Cricket Petition). Subsequent to the filing of this petition, Cricket’s parent company Leap Wireless was

acquired by AT&T.

19 See Joint Board on Universal Service Order, 16 FCC Rcd at 11316, para. 184 n.438.

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DA 14-1075

mobile service.20 We caution those CETCs that still file line counts, however, that we will continue to

remain vigilant for abuses of the system. ETCs that inflate or misrepresent their customer locations in a

way that does not reflect where service is being used can be subject to enforcement action.

7.

ACS Wireless Request for Review and Petition for Waiver. ACS Wireless requests

review of USAC’s decision disallowing support for certain lines that are used locally by end users, but for

which the billing address is outside of ACS Wireless’s service territory.21 In the alternative, ACS

Wireless asks that we grant its petition for waiver in order that these lines be counted.22 We grant ACS

Wireless’s request for review.

8.

According to the petition, ACS Wireless, which offers mobile service in Alaska, provides

a number of wireless connections in Alaska on a wholesale basis to Verizon Wireless.23 Verizon Wireless

then resells those lines to customers in Alaska for use in vehicle safety, security, and connectivity

systems.24 When purchasing a vehicle equipped with such a system, the customer provides a home

address; Verizon Wireless then assigns a mobile wireless number with an NPA-NXX homed to the wire

center for that customer’s address.25 ACS Wireless states that because it is paid by Verizon Wireless and

not by the end users, the customer billing address ACS Wireless uses for line count reports is that of

Verizon Wireless, which is in Alpharetta, Georgia.26 Following a data validation review of ACS’s March

2011 filing, USAC directed ACS Wireless not to count these lines, as the lines were outside the area for

which ACS Wireless is designated as an ETC (i.e., the addresses were in Georgia rather than Alaska).27

ACS Wireless has sought review of USAC’s decision, arguing that the billing addresses of the customers

using the service should be used for universal service support purposes, not the address of Verizon

Wireless.

9.

We agree with ACS Wireless that the end user address, not the intermediate wholesale

billing address, should be used for determining the line counts for high-cost support.28 The Commission

chose to use customer billing addresses for line counts in order to provide support based on where the

service is most likely to be used.29 In the context of commercial resale of service, the billing address of

the wholesale “customer” may have no relation to the location where the service in fact is used. In this

case, Verizon Wireless’s billing address in Alpharetta, Georgia, does not reflect where the service is

20 See Connect America Fund Order/FNPRM at para. 256 n. 470 (“In situations where customer billing addresses

misrepresent actual usage of mobile service, competitive ETCs may use an alternative method to assign a customer

location consistent with the Commission’s objective of identifying where customers are actually using the mobile

service.”). We do not articulate an exhaustive list of every possible alternate method that may be acceptable. Given

that line count reporting only continues to apply for certain carriers in Alaska, and the Commission has proposed to

eliminate even those reports, we do not expect many new situations may arise in the future.

21 ACS Wireless Request for Review and Petition for Waiver at 1.

22 Id.

23 Id. at 4.

24 Id.

25 Id. at 5.

26 Id. at 5-6.

27 Id.; see also id. at Exhibit A.

28 Id. at 6.

29 See

http://fjallfoss.fcc.gov/edocs_public/Query.do;jsessionid=QXpDfpHR6f8PnXnhdMcdJbmmfZ3v92lZgpR

00NJQ3PKYBVvlLx3h!-1597281469!-1646612613?numberFld=01-

157&numberFld2=&docket=&dateFld=&docTitleDesc= - 213054#213054Joint Board on Universal Service

Order, 16 FCC Rcd at 13114-15, para. 180-82.

4

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DA 14-1075

actually being used. Consistent with the Commission’s intent in using billing address as a proxy for

actual use, the location of the actual end user consumer should be used in this situation.

10.

ACS Wireless has suggested two possible methods of determining end user location: (1)

using the end user’s billing address, which is provided when the customer purchases a vehicle equipped

with the communications system,30 or (2) when that billing address is unavailable, using a location as

determined by the assigned NPA-NXX number as a proxy for billing address.31 We find both of these

methods to be reasonable to use. Use of the end user’s billing address would be ideal, but we recognize

that the end user is not a direct customer of ACS Wireless, and thus that information may not be available

to ACS Wireless. If the end user’s billing address is not available to ACS Wireless, the NPA-NXX

number may be used as a proxy for where the customer uses the service.

11.

We instruct USAC to allow ACS Wireless to use end user billing addresses or, if those

are not available, NPA-NXX numbers for lines it has provided at wholesale to Verizon Wireless to

determine the study areas to which lines will be assigned for purposes of receiving high-cost support. As

we have found for ACS Wireless on its request for review, it is unnecessary to consider its petition for

waiver, and the petition for waiver is dismissed as moot.

12.

AT&T Request for Review. AT&T requests review of USAC’s decision to recover high-

cost support following audits of six subsidiary companies and the line count validation of two other

subsidiary companies.32 We grant AT&T’s request for review.

13.

AT&T alleges that its subsidiary companies use mapping software to plot mobile

customer billing addresses.33 When the customer gives a complete street address, that customer would be

plotted to the exact physical address.34 However, if a customer uses a P.O. box, giving the address as the

P.O. box number and ZIP code, the subsidiary companies would plot the customer to the centroid of the

ZIP code.35 USAC concluded that plotting to the centroid is insufficient; instead, the customer location

must be plotted to the street address of the post office (i.e., the physical location of the P.O. box).36

14.

We conclude that AT&T’s method of assigning customers with a P.O. box to a physical

location is reasonable and consistent with the Commission’s objective to require CETCs to report lines

based on where the customer actually uses the service. We are persuaded that requiring carriers to create

or purchase a database of the physical addresses of all post offices in the United States would create a

substantial burden for little actual gain.37 The use of customer billing address as a proxy for customer

30 ACS Wireless Request for Review and Petition for Waiver at 6.

31 Id. at 11.

32 AT&T June 22 Request for Review at 1-2; AT&T April 16 Request for Review at 1-2. The subsidiary companies

that were audited are Centennial Beauregard Cellular LLC, Centennial Caldwell Cellular Corporation, Centennial

Cellular Tri-State Operating Partnership, Centennial Lafayette Communications LLC, Centennial Puerto Rico

Operations Corporation, and Michiana Metronet, Inc. The subsidiary companies that were subject to line count

validations are Dobson Cellular Systems, Inc. and New Cingular Wireless PCS, LLC. Hereinafter, these are

collectively referred to as “the subsidiary companies.” The audits in question related to filings made between 2006

and 2008.

33 AT&T June 22 Request for Review at 5; AT&T April 16 Request for Review at 4.

34 AT&T June 22 Request for Review at 6; AT&T April 16 Request for Review at 4.

35 AT&T June 22 Request for Review at 6; AT&T April 16 Request for Review at 4.

36 AT&T June 22 Request for Review at 6-7; AT&T April 16 Request for Review at 2.

37 See AT&T June 22 Request for Review at 8; AT&T April 16 Request for Review at 7-8. As a practical matter,

most lines would end up assigned to the same ETC study area whether the post office address or the centroid of the

ZIP code is used. Following USAC’s determination, AT&T changed the reported addresses for its P.O. box-based

mobile subscribers for one of its subsidiary companies, manually obtaining the post office street addresses.

According to AT&T, this process resulted in a 0.8% reduction in line counts. See AT&T April 16 Request for

(continued…)

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location was originally adopted because ETCs already had access to customer billing addresses and would

not need to create new databases.38 Requiring AT&T to build or acquire a database of post office

addresses would be antithetical to the Commission’s original intent in adopting the rule. Additionally, no

evidence in the record suggests that using the address of the post office is a substantially more accurate

proxy for where a customer uses the service than the centroid of the ZIP code. Requiring carriers to map

the location of post offices would require significant effort for little practical benefit. Conversely, using

the centroid of the ZIP code provides an administratively convenient and reasonable proxy. Furthermore,

allowing an ETC to use the centroid of a ZIP code rather than the exact street address of the post office is

unlikely to create any significant arbitrage opportunities.

15.

Therefore, we instruct USAC to recalculate the amount of support consistent with

allowing for plotting P.O. boxes to the centroid of the ZIP code.

16.

PR Wireless Request for Review. PR Wireless filed a request for review of a decision by

USAC to recover universal service support following the results of a 2009 audit that revealed that no

billing address information was provided for prepaid wireless customers.39 We grant PR Wireless’s

request for review.

17.

PR Wireless states it was under the mistaken impression prior to the audit that its entire

ETC service area consisted of only one study area: PRTC.40

Thus, PR Wireless reported no addresses for

its prepaid customers because it believed such information would be irrelevant, as all lines would receive

the same level of support as they were all in the same study area.41

However, PR Wireless states that

during the audit, it discovered that its ETC service area also included territory in another study area:

PRTC-Central.42 It then undertook the process of assigning its customers to the PRTC or PRTC-Central

study areas.43 However, according to the petition, as PR Wireless had no address information on its

prepaid customers, it could not provide the required information to USAC.44 USAC sought to recover

high-cost support for these prepaid lines, concluding that the support had been improperly provided.45

(Continued from previous page)

Review at 6-7. Assembling a list of every post office address into a single database would be no small undertaking.

As of 2011, there were over 35,000 post offices in the United States. U.S. POSTAL SERV., 2011 ANNUAL REPORT TO

CONGRESS, 23 (2011).

38

Seehttp://fjallfoss.fcc.gov/edocs_public/Query.do;jsessionid=QXpDfpHR6f8PnXnhdMcdJbmmfZ3v92lZ

gpR00NJQ3PKYBVvlLx3h!-1597281469!-1646612613?numberFld=01-

157&numberFld2=&docket=&dateFld=&docTitleDesc= - 213054#213054 Joint Board on Universal Service

Order, 16 FCC Rcd at 13114-15, para. 181-82.

39 Request for Review by PR Wireless, Inc., of a Decision of the Universal Service Administrator at 2-3.

40 Id. at 2.

41 See id. at 2, 5-6.

42 Id. at 2.

43 Id.

44 While not specifically articulated, PR Wireless’s petition implies that any prepaid customer lacking a billing

address was assigned to the PRTC study area.

45 Request for Review by PR Wireless, Inc., of a Decision of the Universal Service Administrator at 2. It appears

that USAC’s primary ground for withholding funding was not that the prepaid customers were assigned to the wrong

study area, but that no billing address was provided. Id. at 2 (“In the final report issued February 26, 2010, USAC

made a finding that PR Wireless ‘could not provide a corresponding address for prepaid wireless customers included

in reported access line on High Cost filings.’ . . . USAC determined that the entire amount of support paid on those

lines was ‘improper.’”). PR Wireless disputes the recovery of support on the grounds that the support was not

improperly provided. Id. PRTC receives a lower level of support than PRTC-Central. Thus, it argues that any error

(continued…)

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18.

We conclude in this instance that it would be appropriate to provide a limited waiver of

the application of section 54.307(b) for the prepaid lines without billing addresses to the extent those lines

were assigned to the PRTC study area, as utilizing that approach resulted in a lower support amount than

otherwise would be the case. PR Wireless’s failure to collect billing addresses and its practice of

assigning all subscribers to the PRTC study area actually resulted in less funding than if it had collected

addresses and properly assigned subscribers to either the PRTC or PRTC-Central study area. We

conclude this constitutes special circumstances justifying a waiver, and that a limited waiver advances the

public interest.46

We instruct USAC to cease recovery actions for those lines lacking billing addresses.

19.

Cordova Request for Review or Waiver. In 2011, in the course of a routine data

validation of submitted line counts, USAC informed Cordova that a number of lines were ineligible for

high-cost support.47 Cordova had initially reported a number of lines to USAC that had billing addresses

outside of Cordova’s service area, which USAC rejected as ineligible for support.48 Cordova

subsequently provided USAC with local addresses for these lines; however, USAC continued to reject

these lines, noting that Cordova had provided insufficient evidence that the local addresses were “actual

billing addresses.”49 USAC also found that Cordova had requested support for “subscriber lines that had

no activity or evidence of use.”50 USAC said that if the lines were working loops, “Cordova should be

able to provide a year’s worth of usage to show the . . . use of the phone.”51 USAC determined that

Cordova did not provide such sufficient evidence to make a showing of activity on the lines, and therefore

USAC withheld support for the lines in question.52 Cordova requests review of USAC’s decision.53

20.

In its petition, Cordova notes that the customers with non-local billing addresses lines

live or work in Cordova’s service area, use the service exclusively or almost exclusively within that area,

and receive bills at local addresses within that area.54 For various reasons of administrative convenience,

these customers also requested that a copy of their bills be sent to non-local billing addresses.55 Cordova

requests we review USAC’s determination that these reported lines are ineligible for support, or in the

alternative, that we grant a waiver to allow Cordova to receive support on these lines.56 Cordova also

appeals USAC’s determination that a working loop must have activity in order to be eligible for high-cost

support, arguing that no clear requirement for such activity exists in the Commission’s rules.57

(Continued from previous page)

in placing prepaid customers in the PRTC rather than PRTC-Central study area could have only resulted in less

support being paid to PR Wireless than it was due. Id. at 3-4.

46 See Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (Northeast Cellular) (citing

WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir. 1969)).

47 Cordova Petition at 3.

48 Id. at 3-4.

49 Id.

50 USAC Decision on Appeal of the 2010 Competitive Eligible Telecommunications Carriers Line Count Validation

for High Cost Program Beneficiary Cordova Wireless Communications, 2 (May 13, 2013) (provided as Exhibit A to

Cordova Petition).

51 Id. at 3.

52 Cordova Petition at 3-4.

53 Id. at 1.

54 Id. at 4-5.

55 Id. Customers included organizations that wanted copies of bills sent to central billing offices as well as itinerant

residents that requested that copies of bills be sent to their permanent addresses.

56 Id. at 7-11.

57 See id. at 12.

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21.

We grant Cordova’s request for review with respect to the disputed line counts for which

it provided local addresses.58 We conclude that Cordova adequately met the requirements of section

54.307(b) by submitting local addresses for the lines in question. The fact that copies of these bills were

also sent to non-local billing addresses is immaterial. The intent of the Commission in adopting the

billing address requirement was to serve as a proxy for where the service is actually used. Based on

Cordova’s representation that the subscribers in question live or operate in the Cordova service area, use

Cordova wireless service in the area, and receive bills there, we conclude that the intent of the

Commission’s rule is satisfied.59 We therefore instruct USAC to accept Cordova’s reporting of local

addresses to meet the customer billing address requirement, conditioned on Cordova providing an officer

certification that this local address information is accurate to the best of his or her knowledge and that

those local addresses reflect where customers actually use the service provided.60

22.

We do not address at this time Cordova’s request for review of USAC’s decision to

withhold support for certain lines on the ground that the lines had no usage. We caution ETCs that to the

extent there is evidence of waste, fraud, or abuse involving reported line counts, the Commission may

take further action.

23.

We remand this matter to USAC to determine which lines in Cordova’s appeal were

considered ineligible due to lack of local billing addresses, with instructions to calculate support for those

lines consistent with this Order within 90 days of the release of this Order. As we grant Cordova’s

request for review with respect to the line counts for which it provided local addresses, we dismiss that

portion of its petition for waiver as moot.

24.

ASTAC Petition for Waiver. ASTAC petitions for a waiver of the customer billing

address requirement of section 54.307(b), requesting instead to use a primary place of use test.

25.

According to its petition, ASTAC provides mobile service in the North Slope region of

Alaska, primarily in support of oil industry companies and their workers.61 Due to the harsh conditions in

the North Slope region, many of these companies maintain only the personnel absolutely necessary to the

natural resource extraction process in the area, while other functions such administration and accounting

are handled in less costly and more hospitable locations, such as Fairbanks, Anchorage, or even the

contiguous United States. ASTAC claims that while service is provided and used in the North Slope

region, these other administrative offices are used as the billing addresses.62 However, these billing

addresses fall outside of ASTAC’s service area, even though, ASTAC alleges, the subscribers make

almost all their calls within ASTAC’s service area.63

26.

Application of the Commission’s rules may be waived for good cause shown.64 Waiver

is appropriate where special circumstances warrant a deviation from the general rule, and such deviation

will serve the public interest.65

58 In light of this action, we dismiss the relevant portion of Cordova’s petition for waiver as moot.

59 Id. at 4.

60 FCC Form 525, which is used by CETCs to report line count information, already includes a requirement for an

officer of the submitting carrier to certify that the information contained in the report is accurate to the best of his or

her knowledge. Therefore, it should pose only a minimal burden for Cordova to make that certification again in

regards to its supplemental submission of local addresses.

61 ASTAC Wireless LLC Petition for Waiver of Section 54.307(b) of the Commission’s Rules at 1.

62 Id. at 3.

63 Id. at 3-4.

64 47 C.F.R. § 1.3.

65 Northeast Cellular, 897 F.2d at 1166.

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27.

We conclude it is reasonable for ASTAC to use a place of primary use test rather than

relying on customer billing addresses when reporting line counts. Consistent with the Bristol Bay

precedent, we find that ASTAC has demonstrated good cause to waive the billing address requirement in

section 54.307(b) of the Commission’s rules. The common practice of ASTAC customers to have bills

sent to areas outside of where the service is actually used qualifies as special circumstances. We further

conclude that allowing ASTAC to use a primary place of use test in place of customer billing addresses

advances the public interest, as this will result in high-cost funding flowing to areas where the service is

actually used by ASTAC’s customers. Therefore, we grant ASTAC’s petition.

28.

GCI Request for Declaratory Ruling. GCI filed a request for a declaratory ruling

regarding two of its practices related to use of customer billing addresses under section 54.307(b).66 First,

GCI requests a declaratory ruling on its use of billing addresses for prepaid customers.67 Second, GCI

requests a declaratory ruling for its reporting of business customers with multiple service addresses but a

single billing address.68 We grant the request and clarify that GCI’s practices are consistent with section

54.307(b).69

29.

GCI and its subsidiaries provide wireless service in the high-cost areas of Alaska.70

According to GCI, many of its customers are seasonal workers who travel to GCI’s service territory from

other areas.71 These customers frequently purchase prepaid wireless service to use while in the area.72

Because customers prepay for service, there are no bills, and hence no billing addresses. Instead, when a

customer activates the service, GCI requests a local address, which is then submitted as the billing address

for purposes of section 54.307(b).73 If the customer does not provide an address, GCI uses the address for

the point of sale of the prepaid service.74

30.

GCI also provides wireless service to business customers.75 GCI notes that these

business customers often have multiple locations where GCI provides service. While GCI provides an

invoice detailing charges and usage information to each respective service location, the bill for service is

often sent to a separate location, which is sometimes outside of GCI’s service area.76 When submitting

line count information for universal service purposes, GCI uses the addresses of the invoice locations

rather than the single billing address location.77 GCI argues that these invoice locations more closely

reflect the point of service, and thus where high cost support should be targeted, while the official billing

address is often just a billing center or company headquarters that has no correlation to service usage.78

66 GCI Petition at 1.

67 Id. at 3-4.

68 Id. at 5.

69 The Commission may provide a declaratory ruling, either upon petition or on its own motion, to terminate a

controversy or remove uncertainty. 47 C.F.R. § 1.2.

70 GCI Petition at 3.

71 Id.

72 Id.

73 Id.

74 Id. at 4.

75 Id. at 5.

76 Id. at 5. For example, a business customer might receive service from GCI for multiple branch offices it maintains

in Alaska. GCI would send an invoice to each of these branch offices. However, the business customer could have

the bill sent to its central accounting department located in the contiguous United States.

77 Id.

78 Id.

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31.

We clarify that both of the above practices are acceptable under section 54.307(b). GCI’s

practice provides a workable substitute for using billing addresses for prepaid customers. We approve of

GCI’s current methodology.

32.

In a letter supporting GCI’s request for a declaratory ruling, AT&T requested approval

for a third method of locating prepaid wireless customers. Under AT&T’s proposed method, a carrier

could report prepaid wireless customers based on the location of the cell site most frequently used by the

customer during the relevant quarter.79 We find that this method also would provide an accurate

indication of the location where service is received. Thus, in addition to the methods GCI articulated in

its request for a declaratory ruling, a carrier may also meet the requirements of section 54.307(b) by

reporting the location of the cell site most frequently used by the customer during the relevant quarter.

33.

We also approve of GCI’s use of invoice addresses in reporting high-cost support

locations. The purpose of using a billing address was to provide a reasonable surrogate for the actual

location of use for wireless service.80 In the circumstances described by GCI, the invoice address serves

this function. For customers that have multiple service addresses and receive invoices at those addresses,

carriers may report those invoice addresses under section 54.307(b) as the “billing address,” rather than

using the address to which the actual request for payment is sent.

34.

Mobi PCS/Cricket Petition for Guidance.81 Mobi PCS and Cricket request that we

provide guidance to USAC regarding the billing address requirement of section 54.307(b).82 As discussed

in this order, an ETC can use the physical address of the post office and assign all P.O. boxes from that

post office to the proper incumbent LEC. Alternatively, carriers could use the centroid of the ZIP code, a

method we approved of above with regards to AT&T’s petition.

35.

Where more than one incumbent LEC serves a region, petitioners recommend asking

customers to identify their incumbent LEC. While customers may not know who their incumbent LEC

is,83 we conclude that to the extent customers are able to identify their incumbent LEC, this also would be

an acceptable method to assign customers to a particular study area. We note, however, that if an ETC is

going to go through the process of requesting additional information from the customer, it also could

simply request a home address or service address and use that in place of the P.O. box address.

36.

The decisions in this Order should provide sufficient guidance to USAC on how we

interpret current section 54.307 without the need for a separate guidance letter.

IV.

ORDERING CLAUSES

37.

ACCORDINGLY, IT IS ORDERED that, pursuant to the authority contained in sections

1-4 and 254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154 and 254, and

sections 0.91, 0.291, 1.2, 1.3, and 54.722 of the Commission’s rules, 47 C.F.R. §§ 0.91, 0.291, 1.2, 1.3,

79 Letter from Cathy Carpino, AT&T, to Marlene H. Dortch, Secretary, Federal Communications Commission, WC

Docket No. 05-337 (filed Sept. 23, 2009).

80 See Joint Board on Universal Service Order, 16 FCC Rcd at 13114, para. 180.

81 Smith Bagley filed comments to the Mobi/PCS petition, noting that a USAC audit had taken issue with Smith

Bagley’s reporting of customer billing addresses for P.O. boxes, as Smith Bagley used the centroid of the ZIP code

to plot such addresses. See Letter from David A. LaFuria, Smith Bagley, Inc., to Marlene H. Dortch, Secretary,

Federal Communications Commission, CC Docket No. 96-45 et al. (filed March 12, 2010). As Smith Bagley’s

situation is substantially identical to that of AT&T, discussed above, its letter does not raise new issues that would

require separate consideration in this Order.

82 Mobi PCS/Cricket Petition at 1.

83 See Letter from David A. LaFuria, Smith Bagley, Inc., to Marlene H. Dortch, Secretary, Federal Communications

Commission, CC Docket No. 96-45, at 4 (filed Aug. 20, 2009).

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and 54.722, that the Requests for Review, Petitions for Waiver, and Request for Declaratory Ruling by

the Petitioners as listed in the Appendix ARE GRANTED to the extent described above.

38.

IT IS FURTHER ORDERED that, pursuant to the authority contained in sections 1-4 and

254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154 and 254, and section 0.91,

0.291, and 1.3 of the Commission’s rules, 47 C.F.R. § 0.91, 0.291, 1.3, the petitions for waiver filed by

ACS Wireless, Inc. and Cordova Wireless Telecommunications, LLC ARE DISMISSED AS MOOT to

the extent described above.

39.

IT IS FURTHER ORDERED that, pursuant to the authority contained in section 0.91,

0.291, and 54.702 of the Commission’s rules, 47 C.F.R. §§ 0.91, 0.291, 54.702, the petition for guidance

to the Universal Service Administrative Company filed by Mobi PCS, Inc. and Cricket Communications,

Inc. IS GRANTED to the extent described above.

40.

IT IS FURTHER ORDERED that, pursuant to section 1.102(b)(1) of the Commission's

rules, 47 C.F.R. § 1.102(b)(1), this Order SHALL BE EFFECTIVE upon release.

FEDERAL COMMUNICATIONS COMMISSION

Carol E. Mattey

Acting Chief

Wireline Competition Bureau

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APPENDIX

Petitions Granted

Applicant

Audit Number

Type of Appeal

ACS Wireless, Inc.

N/A

Request for Review/Petition

for Waiver

Arctic Slope Telephone Association

N/A

Petition for Waiver

Cooperative

Centennial Caldwell Cellular Corp.

HC-2008-079

Request for Review

(AT&T, Inc.)

Centennial Beauregard Cellular LLC

HC-2008-078

Request for Review

(AT&T, Inc.)

HC-2007-074/HC-FL-014

Centennial Cellular Tri-

State Operating

HC-2008-080

Request for Review

Partnership (AT&T, Inc.)

Centennial Lafayette Communications

HC-2008-081

Request for Review

LLC (AT&T, Inc.)

Centennial Puerto Rico Operations

HC-2008BE082

Request for Review

Corporation (AT&T, Inc.)

Cordova Wireless Communications

N/A

Request for Review

LLC84

Dobson Cellular Systems, Inc.

N/A

Request for Review

(AT&T Inc.)

General Communications, Inc.

N/A

Request for Declaratory

Ruling

Michiana Metronet Inc. (AT&T, Inc.)

HC-2008-095

Request for Review

New Cingular Wireless PCS, LLC

N/A

Request for Review

(AT&T, Inc.)

PR Wireless, Inc.

HC-2008-324

Request for Review

84 Granted in part.

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