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Connect America Fund, High-Cost Universal Service Support

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Released: November 28, 2012

Federal Communications Commission

DA 12-1907

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Connect America Fund
)
WC Docket No. 10-90
)
High-Cost Universal Service Support
)
WC Docket No. 05-337

ORDER

Adopted: November 28, 2012

Released: November 28, 2012

By the Chief, Wireline Competition Bureau:
1. In this Order, we grant the request of Arctic Slope Telephone Association Cooperative, Inc.
(ASTAC) for expedited waiver to correct the road miles and road crossings (road information) and the
number of exchanges in the study area that were used in the regression analysis that established
“benchmarks” for high-cost loop support (HCLS).1 In the HCLS Benchmarks Implementation Order,2 the
Wireline Competition Bureau (Bureau) adopted the methodology for establishing limits on reimbursable
capital costs and operating expenses (capex and opex, respectively) to implement the benchmarking rule
that the Commission adopted in the USF/ICC Transformation Order.3
2. The HCLS benchmarking methodology uses quantile regression analyses to generate a capex
limit and an opex limit for each rate-of-return cost company study area. The geographic independent
variables used in the regressions were rolled up to the study area using Tele Atlas wire center boundaries,
which is a widely-used commercially available comprehensive source for this information.4 The HCLS
Benchmarks Implementation Order
recognized that there were concerns remain regarding inaccuracies in
these data.5 In response, the Bureau created a streamlined, expedited waiver process for carriers affected
by the benchmarks to correct any errors in their study area boundaries by providing accurate information
in a manner and format that Bureau staff can readily evaluate and process to determine whether there are
special circumstances supporting a waiver.6 Although the relief ASTAC seeks is to correct the road


1 See Letter from Jeffrey H. Smith, Vice-President and GVNW Consulting General Manager Western Region and
Chairman of the Board of Directors, on behalf of Arctic Slope Telephone Association Cooperative, Inc. (ASTAC),
to Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-90 (filed Sept. 25, 2012) (Waiver Request).
2 Connect America Fund, High-Cost Universal Service Support, WC Docket Nos. 10-90, 05-337, Order, 27 FCC
Rcd 4235 (Wireline Comp. Bur. 2012) (HCLS Benchmarks Implementation Order).
3 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, 17741-47, paras. 210-26 (2011) (USF/ICC Transformation Order); pets. for review
pending sub nom.
In re: FCC 11-161, No. 11-9900 (10th Cir. filed Dec. 8, 2011).
4 TomTom Telecommunications Suite 2011.09 (formerly Tele Atlas North America), Wire Center Premium, for
wire center boundary and central office location information.
5 HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4246, para. 27.
6 See HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4246-47, paras. 27, 29. Generally, the
Commission’s rules may be waived if good cause is shown. 47 C.F.R. § 1.3. The Commission may exercise its
discretion to waive a rule where the particular facts make strict compliance inconsistent with the public interest.
Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (Northeast Cellular). In addition,
(continued....)

Federal Communications Commission

DA 12-1907

information and number of exchanges rather than the study area boundaries, the expedited waiver process
was created to address concerns regarding data “inaccuracies,”7 and we therefore conclude that use of an
expedited waiver process is warranted for correction of these data variables.
3. On July 13 and October 12, 2012, ASTAC provided the Bureau detailed road information and
the number of exchanges within its study area, including certifications by an officer of the company under
penalty of perjury that the filed information is accurate.8 ASTAC explained that the data relied upon by
the Bureau overstated the number of road miles and crossings in ASTAC’s service area in large part
because the data included caribou migration, foot, jeep, tractor, winter trails as well as roads across tundra
that are inaccessible by most vehicles.9 In addition, ASTAC explained that the data incorrectly included
the Barrow exchange in ASTAC’s service area.10
4. Pursuant to section 1.3 of the Commission’s rules, we find that good cause has been shown
and special circumstances warrant waiver of the Commission’s rules to revise the capex and opex
benchmarks for ASTAC that were listed in Appendix B of the HCLS Benchmarks Implementation
Order
.11 Using the corrected road and exchange information, the Bureau staff modified the relevant
variables and calculated revised capex and opex benchmarks for ASTAC. We direct the National
Exchange Carrier Association (NECA) to use the following revised benchmarks in place of the original
benchmarks for calculating HCLS for ASTAC from July 1, 2012 through December 31, 2012. Using the
revised road and exchange information, ASTAC’s capex and opex benchmarks increased. Because
ASTAC remains limited by the 90th percentile benchmarks for its opex costs during this period, it is not
eligible for redistributed HCLS. We also instruct the Universal Service Administrative Company
(USAC) to make any necessary support amount adjustments consistent with the corrected information.


(...continued from previous page)
the Commission may take into account considerations of hardship, equity, or more effective implementation of
overall policy on an individual basis. WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir. 1969); Northeast
Cellular
, 897 F.2d at 1166. Waiver of the Commission’s rules is appropriate only if both (i) special circumstances
warrant a deviation from the general rule, and (ii) such deviation will serve the public interest. NetworkIP, LLC v.
FCC
, 548 F.3d 116, 125-128 (D.C. Cir. 2008); Northeast Cellular, 897 F.2d at 1166.
7 HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4246, para 27.
8 Waiver Request, QRA Road Mile and Road Crossings Certification Attachment at 1-3; Letter from Jeffrey H.
Smith, on behalf of ASTAC, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-90 at 1-2 (filed Oct. 12,
2012). We note that the Waiver Request also asks for changes for other variables included in the benchmark
calculations. Waiver Request, Attachment—Ex Parte Filed on July 13 at 1-3. This Order does not prejudge the
resolution of these other requests.
9 Waiver Request, QRA Road Mile and Road Crossings Certification Attachment at 1-3.
10 Id. at 3. Because the Barrow exchange was acquired by ASTAC from GTE, it has been accounted for separately
from ASTAC’s other exchanges. Id.
11 47 C.F.R. § 1.3; HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4299, App. B.
2

Federal Communications Commission

DA 12-1907

ASTAC

90% Capex

Capex

90% Opex

Opex CPL13

Capped?

CPL Estimate

CPL12

CPL
Estimate

Original
$341.29
$341.29
$876.50
$1076.08
Yes (opex)
Revised
$375.40
$341.29
$992.42
$1076.08
Yes (opex)
5. Accordingly, IT IS ORDERED, pursuant to the authority contained in sections 1, 2, 4(i), 201-
206, 214, 218-220, 251, 254, and 303(r), and of the Communications Act of 1934, as amended, and
section 706 of the Telecommunications Act of 1996, 47 U.S.C. §§ 151, 152, 154(i), 201-206, 214, 218-
220, 251, 254, 303(r), 1302, and pursuant to sections 0.91, 0.131,0.201(d), 0.291, 0.331, 1.3, and 1.427 of
the Commission’s rules, 47 C.F.R. §§ 0.91, 0.131, 0.201(d), 0.291, 0.331, 1.3, 1.427 and pursuant to the
delegations of authority in paragraphs 210, 217, 226 and 1404 of the USF/ICC Transformation Order, 26
FCC Rcd 17663 (2011), that the petition for expedited waiver to correct its road and exchange data filed
by Arctic Slope Telephone Association Cooperative, Inc. IS GRANTED, as described herein.
6. IT IS FURTHER ORDERED, pursuant to authority delegated under sections 0.91, 0.291 and
1.102 of the Commission’s rules, 47 C.F.R. §§ 0.91, 0.291, 1.102, that this Order SHALL BE
EFFECTIVE upon release.
FEDERAL COMMUNICATIONS COMMISSION
Julie A. Veach
Chief
Wireline Competition Bureau


12 The capex and opex cost per loop (CPL) amounts are the same as those published in Appendix B of the HCLS
Benchmarks Implementation Order
, which were based on the annual cost data NECA filed in 2011. NECA recently
filed a schedule of HCLS for all carriers for the six-month period of July 1, 2012 to December 31, 2012, which
reflects voluntary quarterly updates carriers filed pursuant to section 36.612 of the Commission’s rules. See 47
C.F.R. § 36.612; Wireline Competition Bureau Announces Access to High-Cost Loop Support Data Submitted by
NECA
, WC Docket Nos. 10-90, 05-337, Public Notice, 27 FCC Rcd 7135 (Wireline Comp. Bur. 2012).
13 See supra note 12.
3

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