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Connect America Fund, High-Cost Universal Service Support

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Released: May 9, 2013

Federal Communications Commission

DA 13-1013

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: May 9, 2013

Released: May 9, 2013

By the Chief, Wireline Competition Bureau:

I.

INTRODUCTION

1. In this Order, we grant in part and deny in part the requests of Silver Star Telephone
Company, Inc. (Silver Star) for expedited waiver to correct the study area boundary and number of
exchanges for Silver Star’s Idaho study area 472295, and change the density, road miles, and road
crossings (density and road information) for Silver Star’s Idaho and Wyoming study areas that were used
in the regression analysis that established “benchmarks” for high-cost loop support (HCLS).1

II.

BACKGROUND

2.
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 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


1 See Letter from Mary J. Sisak, Counsel for Silver Star, regarding Idaho study area, to Marlene H. Dortch,
Secretary, FCC, WC Docket Nos. 10-90, 05-337 (filed Sept. 27, 2012) (Idaho Waiver Request); Letter from Mary J.
Sisak, Counsel for Silver Star, regarding Wyoming study area, to Marlene H. Dortch, Secretary, FCC, WC Docket
Nos. 10-90, 05-337 (filed Sept. 27, 2012) (Wyoming Waiver Request); Letter from Mary J. Sisak, Counsel for Silver
Star, regarding Idaho study area amendment, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 10-90, 05-337
(filed Jan. 2, 2013) (Idaho Waiver Request Amendment); Letter from Mary J. Sisak, Counsel for Silver Star,
regarding Wyoming study area amendment, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 10-90, 05-337
(filed Jan. 2, 2013) (Wyoming Waiver Request Amendment).
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.

Federal Communications Commission

DA 13-1013

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 To help potential petitioners
file information efficiently, accurately, and in a manner that will permit the Bureau to evaluate and
process the information expeditiously, the Bureau set forth a template for filing study area maps.7

III.

DISCUSSION

A.

Benchmarks Revisions

3. In support of its request to correct the study area boundary and number of exchanges for its
Idaho study area, on September 27, 2012 and January 2, 2013, Silver Star provided the Bureau with wire
center boundaries,8 consistent with the data specifications for submitting boundary information set forth
in Appendix C of the HCLS Benchmarks Implementation Order.9 The information submitted included a
certification by an officer of the company under penalty of perjury that the information provided
accurately portrays Silver Star’s Idaho study 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 Silver Star’s Idaho study area that were listed in Appendix B of the HCLS Benchmarks
Implementation Order
11 and in the 2013 benchmarks Public Notice.12 Using the corrected boundary
information and number of exchanges, the Bureau staff modified the relevant variables and calculated
revised capex and opex benchmarks for Silver Star study area 472295. We direct the National Exchange
Carrier Association (NECA) to use the revised benchmarks in Table 1 in place of the original benchmarks
for calculating HCLS for Silver Star for the period from July 1, 2012 through December 31, 2012, and the
benchmarks in Table 2 for the period from January 1, 2013 through March 31, 2013. For the period
beginning April 1, 2013, the Commission concluded that “it is appropriate to combine or ‘sum’ the


5 HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4246, para. 27.
6 See id. 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, 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. Northeast Cellular, 897 F.2d at 1166.
7 HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4301-02, App. C.
8 Idaho Waiver Request, CD-ROM Exhibit, file name “SilverStar Telephone_472295.zip”; Idaho Waiver Request
Amendment
, CD-ROM Exhibit, file name “SilverStar Telephone_472295.zip.”
9 HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4301-02, App. C.
10 Idaho Waiver Request, CD-ROM Exhibit “readme_472295 Idaho.txt”; Idaho Waiver Request Amendment, CD-
ROM Exhibit, file name “readme_472295 Idaho.txt.”
11 47 C.F.R. § 1.3; HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4299, App. B.
12 Wireline Competition Bureau Releases New High-Cost Loop Support Benchmarks for 2013, WC Docket Nos. 10-
90, 05-337, Public Notice, 28 FCC Rcd 3256 (Wireline Comp. Bur. 2013) (Mar. 26, 2013 Public Notice).
2

Federal Communications Commission

DA 13-1013

existing caps as an interim measure.”13 Therefore, for the period from April 1, 2013 through December
31, 2013, we direct NECA to use the revised summed benchmarks in Table 3. Using the revised
boundary information, Silver Star’s capex and opex benchmarks increased for the first two periods and its
summed benchmark increased for the third period. Because Silver Star remains limited by the
benchmarks during all three periods, it is not eligible for redistributed HCLS for any of the periods. We
also instruct the Universal Service Administrative Company to make any necessary support amount
adjustments consistent with the corrected information.

Table 1 -- July 1, 2012 through December 31, 2012

Silver Star

90% Capex

Capex

90% Opex

Opex CPL15

Capped?

CPL Estimate

CPL14

CPL

Estimate

Original
513.01
670.86
608.80
1077.67
Yes
Revised
528.66
670.86
615.42
1077.67
Yes

Table 2 – January 1, 2013 through March 31, 2013

Silver Star

90% Capex

Capex

90% Opex

Opex CPL17

Capped?

CPL Estimate

CPL16

CPL

Estimate

Original
466.38
649.84
621.84
1,050.08
Yes
Revised
480.60
649.84
628.60
1,050.08
Yes


13 Connect America Fund; High-Cost Universal Service Support, WC Docket Nos. 10-90, 05-337, Sixth Order on
Reconsideration and Memorandum Opinion and Order, 28 FCC Rcd 2572, 2583, para. 29 (2013).
14 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 filed a
schedule of HCLS for all carriers for the six-month period of July 1, 2012 through 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).
15 See supra n.14.
16 The capex and opex CPL amounts are the same as those published by the Commission on March 26, 2013. See
Mar. 26, 2013 Public Notice
.
17 See supra n.16.
3

Federal Communications Commission

DA 13-1013

Table 3 – April 1, 2013 through December 31, 2013

Silver Star

90% Capex
90% Opex

Summed

Total Cost per

Capped?

CPL Estimate

CPL

90% CPL

Loop18

Estimate

Estimate

Original
466.38
621.84
1,088.22
1,699.92
Yes
Revised
480.60
628.60
1,109.21
1,699.92
Yes

B.

Road Information

5. In support of its request that the Bureau change the road information for its Idaho and
Wyoming study areas, on September 27, 2012 and January 2, 2013, Silver Star provided the Bureau with
road information data based on Tiger Line 2010 Census data.19 We deny this request and decline to
change the road information for the reasons explained below.
6. Silver Star argues that the ESRI Street Map data used in the regression analysis are “grossly
inaccurate for Silver Star with respect to road miles and road crossings.”20 Silver Star claims that Tiger
Line 2010 Census data are more accurate than ESRI when compared with county maps and Silver Star’s
own internal information.21 Silver Star also provides an aerial photograph with one example of where
Silver Star claims Tiger Line data are more accurate than the ESRI data.22
7. We decline to change the basis for the road information used in calculating Silver Star’s caps
for 2012 and 2013.23 Silver Star has not demonstrated that the Tiger Line 2010 data are superior to the
ESRI data adopted by the Bureau in the HCLS Benchmarks Implementation Order.24 In its comparisons,
Silver Star used ESRI 2010 Street Map version 9.3,25 whereas the Bureau used the more recent version
10.0. In addition, while the example provided by Silver Star shows that in some cases the ESRI data
missed some roads, the Tiger data appear to be overly inclusive, in some cases including driveways and
intra-property access routes.26 Therefore, we deny Silver Star’s request to change its road information
source to Tiger Line data.27


18 See supra n.16.
19 Idaho Waiver Request at 2; Idaho Waiver Request Amendment at 2; Wyoming Waiver Request at 2, Wyoming
Waiver Request Amendment
at 2.
20 Idaho Waiver Request Amendment at 2; Wyoming Waiver Request Amendment at 2.
21 Id.
22 Idaho Waiver Request Amendment, Map Exhibit; Wyoming Waiver Request Amendment, Map Exhibit. Because
ESRI data for Guam and American Samoa was unavailable when the regression inputs were required, Tiger files for
those two areas were used. HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4263, para. 86 n.53.
23 However, we are evaluating data sources for road information that will be used to determine support for all
carriers starting in 2014.
24 HCLS Benchmarks Implementation Order, 27 FCC Rcd at 4263, para. 86 n.53.
25 Idaho Waiver Request Amendment, Map Exhibit; Wyoming Waiver Request Amendment, Map Exhibit.
26 For example, in the vicinity of Victor, Idaho (bound by the coordinates 111˚ 7’ 16.465” W; 43˚ 36’ 7.688” N and
111˚ 7’ 1.747” W; 43˚ 35’ 52.075” N), Tiger data appear to include a driveway and an intra-property access route
(continued...)
4

Federal Communications Commission

DA 13-1013

IV.

ORDERING CLAUSES

8. 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) 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, sections 0.91, 0.201(d), 0.291, and 1.3 of the Commission’s rules, 47 C.F.R. §§ 0.91,
0.201(d), 0.291, 1.3, and the delegations of authority in paragraphs 210, 217, 226 and 1404 of the
USF/ICC Transformation Order, 26 FCC Rcd 17663 (2011), that the petitions for expedited waiver filed
by Silver Star Telephone Company, Inc. ARE GRANTED with respect to its Idaho study area to correct
its boundary and exchange data to the extent described herein, and ARE DENIED with respect to its
Idaho and Wyoming study areas to change the road information.
9. IT IS FURTHER ORDERED, pursuant to the 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
(Continued from previous page)


that, according to maps, do not constitute actual roads or road crossings, whereas the ESRI data do not include these
(http://binged.it/YltZQW).
27 Arctic Slope Telephone Association Cooperative, Inc. (Arctic Slope) was granted a waiver to correct its road
information in November 2012. Connect America Fund; High-Cost Universal Service Support, Order, WC Docket
Nos. 10-90, 05-337, 27 FCC Rcd 14867 (Wireline Comp. Bur. 2012). However, Arctic Slope identified and
provided evidence that specific roads should be removed from the road miles calculation because these roads
constituted caribou migration, foot, jeep, tractor, and winter trails as well as roads across tundra that are inaccessible
by most vehicles.
5

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