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Grant of Petitions for Waiver of LSS True-Up Data Filing Deadlines

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Released: October 29, 2013

Federal Communications Commission

DA 13-2094

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Petitions for Waiver of Universal Service High-
)
WC Docket No. 08-71
Cost Filing Deadlines
)
)

The Chillicothe Telephone Company (SAC
)
#300597) Petition for Waiver of Section 54.301(e) )
Filing Deadline for Submission of True-Up
)
Adjustment for Local Switching Support for
)
Calendar Year 2010
)
)

Jordan Soldier Valley Telephone Company
)
Petition for Waiver of Section 54.301(e)(1)
)
Submission Date for True-Up 2011 Local
)
Switching Support Data
)
)

Consolidated Communications of Fort Bend
)
Company Petition for a Waiver of Section
)
54.301(e)(1) of the Commission’s Rules
)
)

CenturyLink Petition for Limited Waiver
)
)

FairPoint Communications, Inc. Petition for
)
Waiver of Section 54.301(e)(1) of the
)
Commission’s Rules, 47 C.F.R. § 54.301(e)(1)
)
)

Micronesia Telecommunications Corporation
)
(SAC 653700) Petition for Waiver of Section
)
54.301(e) Submission Date for 2011 Local
)
Switching Support True-Up Data
)

ORDER

Adopted: October 29, 2013

Released: October 29, 2013

By the Chief, Wireline Competition Bureau:

I.

INTRODUCTION

1.
In this Order, we grant six separate requests, filed by: (1) The Chillicothe Telephone
Company (Chillicothe); (2) Jordan Soldier Valley Telephone Company (Jordan Soldier Valley); (3)
Consolidated Communications of Fort Bend Company (Consolidated Fort Bend); (4) CenturyLink; (5)
FairPoint Communications, Inc. (FairPoint); and (6) Micronesia Telecommunications Corporation (MTC)
(collectively, the LSS Petitioners), for waiver of the filing deadline for the submission of true-up data
used to adjust Local Switching Support (LSS), set forth in section 54.301(e)(1) of the Commission’s

Federal Communications Commission

DA 13-2094

rules.1 We find that the LSS Petitioners have demonstrated that good cause exists to grant these waivers
of the deadlines associated with the LSS data and certification filing requirements, that pre-date the
USF/ICC Transformation Order.2

A.

Background

2.
Section 254(e) of the Communications Act of 1934, as amended, provides that “only an
eligible telecommunications carrier [(ETC)] designated under section 214(e) shall be eligible to receive
specific Federal universal service support,”3 and such support shall be used “only for the provision,
maintenance, and upgrading of facilities and services for which the support is intended.”4 To implement
this statutory requirement, the Commission has adopted various certification and data filing requirements.
3.
For example, pursuant to section 54.301 of the Commission's rules, incumbent local
exchange carriers (LECs) that had been designated as ETCs, and served 50,000 or fewer access lines
within a study area, historically were required to file certain data with the Universal Service
Administrative Company (USAC) to be eligible to receive LSS.5 Annually, on or before October 1,
incumbent LECs were required submit to USAC projected data necessary to calculate the carrier’s
projected LSS for the following calendar year.6 No later than twelve months after the end of that calendar
year, incumbent LECs were required to submit historical (i.e., actual) data for that calendar year to
USAC.7 USAC adjusted each carrier’s LSS to account for differences between (i) the LSS received by


1 The Chillicothe Telephone Company (SAC #300597) Petition for Waiver of Section 54.301(e) Filing Deadline for
Submission of True-Up Adjustment for Local Switching Support for Calendar Year 2010, WC Docket No. 08-71,
CC Docket No. 96-45 (filed Mar. 2, 2012) (Chillicothe Petition); Jordan Soldier Valley Telephone Company
Petition for Waiver of Section 54.301(e)(1) Submission Date for True-Up 2011 Local Switching Support Data, CC
Docket No. 96-45 (filed Jan. 7, 2013) (Jordan Soldier Valley Petition); Consolidated Communications of Fort Bend
Company Petition for a Waiver of Section 54.301(e)(1) of the Commission’s Rules, WC Docket No. 08-71 (filed
Jan. 11, 2013) (Consolidated Fort Bend Petition); CenturyLink Petition for Limited Waiver, WC Docket Nos. 10-90,
05-337, CC Docket No. 96-45 (filed Jan. 16, 2013) (CenturyLink Petition) (filing the petition on behalf of
CenturyLink The El Paso County Telephone Company and CenturyLink Qwest Corporation Idaho North); FairPoint
Communications, Inc. Petition for Waiver of Section 54.301(e)(1) of the Commission’s Rules, 47 C.F.R. §
54.301(e)(1), WC Docket Nos. 10-90, 05-337 (filed Jan. 16, 2013) (FairPoint Petition) (filing the petition on behalf
of China Telephone Company, FairPoint Vermont, Inc., Northland Telephone Company of Maine, Inc., Sidney
Telephone Company, Standish Telephone Company, and Maine Telephone Company); Micronesia
Telecommunications Corporation (SAC 653700) Petition for Waiver of Section 54.301(e) Submission Date for 2011
Local Switching Support True-Up Data, CC Docket No. 96-45, WC Docket No. 08-71 (filed Jan. 17, 2013) (MTC
Petition); 47 C.F.R. § 54.301(e).
2 Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed
Rulemaking, 26 FCC Rcd 17663 (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).
3 47 U.S.C. § 254(e).
4 Id.
5 47 C.F.R. § 54.301. LSS had allowed such LECs to allocate a larger percentage of their switching costs (including
related overhead costs) to the interstate jurisdiction and recover those costs through the federal universal service
fund. See 47 C.F.R. § 54.301(a). In the USF/ICC Transformation Order, the Commission eliminated LSS as a
separate universal service support mechanism, effective July 1, 2012. USF/ICC Transformation Order, 26 FCC Rcd
at 17760, para. 257. The USF/ICC Transformation Order adopted several reforms to harmonize and update annual
ETC requirements by establishing a “uniform national framework for accountability” that replaces the various data
and certification filing deadlines that carriers were required to meet previously. Id. at 17850, para. 573.
6 47 C.F.R. § 54.301(b).
7 47 C.F.R. § 54.301(e)(1).
2

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DA 13-2094

the carrier for a calendar year based on the carrier’s projected data, and (ii) the LSS the carrier should
receive based on its historical data (true-up adjustments).8 True-up adjustments were made by USAC no
later than fifteen months after the end of each calendar year.9 The deadline for the submission of true-up
LSS data for the 2010 funding year was January 3, 2012,10 and the deadline for the submission of true-up
LSS data for the 2011 funding year was December 31, 2012.
4.
Because these LSS data submission deadlines were annual deadlines, failure to meet
them resulted in the loss of the entire year of funding to which the LSS data related. Prior to the
implementation of the USF/ICC Transformation Order, the Wireline Competition Bureau waived the LSS
data submission deadlines for certain carriers that missed them, recognizing that loss of an entire year of
LSS could impact service and rates, and result in a “substantial hardship” for consumers.11
5.
The USF/ICC Transformation Order eliminated LSS as a standalone support mechanism
after the 2011 funding year.12 But because the LSS true-up data for 2011 was required to be filed 12
months after the last day of the 2011 funding year, December 31, 2012 was the last true-up deadline for
LSS.13 Thus, carriers that missed that deadline could still lose the entire year of 2011 LSS, absent a
waiver.


8 47 C.F.R. § 54.301(e)(2).
9 Id.
10 The deadline was not December 31, 2011, because this date fell on a Saturday and the following Monday, January
2, 2012, was a holiday. See 47 C.F.R. § 1.4.
11 See, e.g., Petition for Waiver of Universal Service High-Cost Filing Deadlines; Federal-State Joint Board on
Universal Service; Northeast Iowa Telephone Company Petition of Waiver of the Section 54.301(b) Submission
Date for Projected 2008 Local Switching Support Data
, WC Docket No. 08-71, CC Docket No. 96-45, Order, 24
FCC Rcd 4818, 4819-20, paras. 4-5 (Wireline Comp. Bur. 2009); Federal-State Joint Board on Universal Service;
Dixon Telephone Company et al.
, CC Docket No. 96-45, Order, 21 FCC Rcd 1717, 1719-20, paras. 8-9 (Wireline
Comp. Bur. 2006) (Dixon Telephone Company et al. Waiver Order); Federal-State Joint Board on Universal
Service; Alliance Communications Cooperative, Inc. and Hills Telephone Company, Inc. et al.
, CC Docket No. 96-
45, Order, 20 FCC Rcd 18250, 18253, paras. 8-9 (Wireline Comp. Bur. 2005).
12 The Commission made limited recovery of the costs previously covered by LSS available pursuant to its
intercarrier compensation reform. See USF/ICC Transformation Order, 26 FCC Rcd at 17969, para. 872. Rate-of-
return carriers were eligible to receive LSS from January 1, 2012 to June 30, 2012, but such support was frozen at
2011 support levels, and was subject to true-up based on 2011 operating results. Id. at 17760, para. 257; see 47
C.F.R. § 54.301(a)(1). For price cap carriers and their rate-of-return affiliates, the Commission froze all support
under its existing high-cost support mechanisms on a study area basis. See USF/ICC Transformation Order, 26
FCC Rcd at 17715, para. 133. This support includes high-cost loop support, high-cost model support, safety net
additive, safety valve support, LSS, interstate access support, and interstate common line support. Id. at 17712,
para. 128. Frozen support was calculated by USAC on January 31, 2012 based on the amount of support disbursed
to carriers in 2011. Id. at 17715, para. 133, n.212. Thus, any adjustments or true-ups made to 2011 support after
January 31, 2012 do not affect price cap carriers and their rate-of-return affiliates’ frozen high-cost support. See id.
CenturyLink expressed confusion about whether a denial of its instant petition for waiver would impact its frozen
support. CenturyLink Petition at 5. We clarify here that because the Commission directed USAC to make its frozen
support calculations on January 31, 2012, any subsequent action to true up universal service support would not
impact price cap carriers’ frozen support levels.
13 Because 2011 was the last funding year in which carriers received LSS based on actual data, section 54.301(e)(1)
of the Commission’s rules specifies that the last true-up data submission deadline for LSS was December 31, 2012.
3

Federal Communications Commission

DA 13-2094

B.

LSS Petitioners’ Petitions for Waiver

6.
Chillicothe seeks waiver of the January 3, 2012 LSS true-up data filing deadline set forth
in section 54.301(e)(1) of the Commission’s rules in order to receive LSS support for 2010,14 and the five
other petitioners seek waiver of the December 31, 2012 LSS true-up data filing deadline in order to
receive LSS support for 2011.15 Each petitioner ultimately filed LSS true-up data after being notified by
USAC that its data had not been received.16

II.

DISCUSSION

7.
We conclude that the LSS Petitioners have demonstrated that there is good cause to
waive section 54.301(e)(1) of the Commission’s rules.17 Specifically, each of the LSS Petitioners has
demonstrated that the missed deadline was the result of minor ministerial, clerical, or procedural errors
which do not warrant an entire year’s loss of LSS.18 In the past, prior to the adoption of the new
accountability framework in the USF/ICC Transformation Order, the Bureau granted waiver of LSS data
submission deadlines in section 54.301 of the Commission’s rules when such an error caused the
deadlines to be missed,19 and the Bureau found that it would not be in the public interest to deny carriers
an entire year’s LSS.20


14 Chillicothe Petition at 1, 3 (filing its petition on March 2, 2012 after it was notified by USAC that its mailed
submission had not been received, and claiming that it expected to receive $379,189 in LSS for 2010).
15 Jordan Soldier Valley Petition at 1, 4 (filing its petition on January 7, 2013 and claiming that it expected
approximately $76,000 in LSS for 2011); Consolidated Fort Bend Petition at 1, 3 (filing its petition on January 11,
2013 and claiming that it expected approximately $530,000 in LSS for 2011); CenturyLink Petition at 1-2 (filing its
petition on Jan. 16, 2013 after it had neglected to file LSS true-up data for two study areas on behalf of two of its
subsidiaries); FairPoint Petition at 1, 3 (filing its petition on January 16, 2013 on behalf of six of its subsidiaries and
claiming that the six subsidiaries anticipated that they would have to return $1,034,000 in LSS if their petition was
denied); MTC Petition at 1, 3 (filing its petition on January 17, 2013 and claiming that it expected $625,000 in LSS
for 2011); 47 C.F.R. § 54.301(e)(1).
16 Chillicothe Petition at 3 (stating that it re-filed its LSS true-up data via email on February 13, 2012 and re-filed
the accompanying certification on February 14, 2012); Jordan Soldier Valley Petition at 2 (stating that it filed its
LSS true-up data via email on January 4, 2013); Consolidated Fort Bend Petition at 2 (stating that it filed its LSS
true-up data on January 11, 2013); CenturyLink Petition at 2 (stating that it filed LSS true-up data for its two
subsidiaries on January 8, 2013); FairPoint Petition at 2 (stating that it filed LSS true-up data for its six subsidiaries
on January 10, 2013); MTC Petition at 5 (stating that it filed its LSS true-up data on January 3, 2013).
17 47 C.F.R. § 54.301(e)(1). 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. “[D]eadlines can only be waived under ‘unusual or
compelling circumstances.’” NetworkIP, LLC v. FCC, 548 F.3d 116, 126 (D.C. Cir. 2008) (citation omitted).
18 See Chillicothe Petition at 2-3; Jordan Soldier Valley Petition at 2; Consolidated Fort Bend Petition at 1;
CenturyLink Petition at 1; FairPoint Petition at 2; MTC Petition at 2.
19 See, e.g., The Telecommunications Access Policy Division of the Wireline Competition Bureau Grants Petitions
Requesting Waiver of Various High-Cost Universal Service Filing Deadlines
, WC Docket No. 08-71, Public Notice,
27 FCC Rcd 13507 (Telecomm. Access Policy Div. 2012); Petitions for Waiver of Universal Service High-Cost
Filing Deadlines, Flat Rock Telephone Co-Op, Inc. (SAC #341012) Petition for Waiver of Secton 54.301(e)(1)
Filing Deadline for Submission of True-Up Data for Local Switching Support for a Rural Incumbent Local

(continued…)
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8.
Moreover, we find that the waivers are warranted because the LSS Petitioners promptly
remedied their errors by filing the required data shortly after the filing deadlines.21 Under precedent that
pre-dated the adoption of the new framework in the USF/ICC Transformation Order regarding loss of
support for failure to file ETC certifications on a timely basis,22 in instances where carriers filed the
required LSS data shortly after filing deadlines, the Bureau waived the LSS data submission rules.23
9.
To ensure that future filings deadlines are met, most of the LSS Petitioners note that they
have revised their internal procedures.24 These steps are similar to those taken by other carriers who
missed filing deadlines in the past, prior to the USF/ICC Transformation Order, and were granted waivers
of missed deadlines.25 We reiterate that all ETCs should have adequate internal controls and procedures
to ensure that their filings required by the Commission’s revised rules will be accurately and timely
received.26

III.

ORDERING CLAUSES

10.
Accordingly, IT IS ORDERED, pursuant to sections 1, 4(i), 5(c), 214, and 254 of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i), 155(c), 214, and 254, and sections
0.91, 0.291, and 1.3 of the Commission’s rules, 47 C.F.R. §§ 0.91, 0.291, and 1.3, that this Order IS
ADOPTED.
11.
IT IS FURTHER ORDERED that the petition for waiver of section 54.301(e)(1) of the
Commission’s rules, 47 C.F.R. § 54.301(e)(1), filed by The Chillicothe Telephone Company IS
GRANTED.
12.
IT IS FURTHER ORDERED that the petition for waiver of section 54.301(e)(1) of the
Commission’s rules, 47 C.F.R. § 54.301(e)(1), filed by Jordan Soldier Valley Telephone Company IS
GRANTED.
13.
IT IS FURTHER ORDERED that the petition for waiver of section 54.301(e)(1) of the
Commission’s rules, 47 C.F.R. § 54.301(e)(1), filed by Consolidated Communications of Fort Bend
Company IS GRANTED.
14.
IT IS FURTHER ORDERED that the petition for waiver of section 54.301(e)(1) of the
Commission’s rules, 47 C.F.R. § 54.301(e)(1), filed by CenturyLink IS GRANTED.
(Continued from previous page)


Exchange Carrier, et al., WC Docket No. 08-71, Order, 25 FCC Rcd 4637 (Wireline Comp. Bur. 2010) (Flat Rock
et al. Waiver Order
); Dixon Telephone Company et al. Waiver Order.
20 See supra para. 4.
21 See supra note 166.
22 See 47 C.F.R. § 54.314(d).
23 See, e.g., Petition for Waiver of Universal Service High-Cost Filing Deadlines, ETEX Telephone Cooperative
Petition for Waiver of Deadline in 47 C.F.R. 54.301(b)
, WC Docket No. 08-71, Order, 25 FCC Rcd 4698, 4700
para. 6 (Wireline Comp. Bur. 2010); Dixon Telephone Company et al. Waiver Order, 21 FCC Rcd at 1718-19, paras.
3-5.
24 See Chillicothe Petition at 3; Jordan Soldier Valley Petition at 3; Consolidated Fort Bend Petition at 2-3;
CenturyLink Petition at 6; MTC Petition at 2. FairPoint claims that the departure of key personnel before the filing
deadline which caused them to miss their deadline is “not likely to be a problem in the future,” and notes that “this
type of filing no longer will be required.” FairPoint Petition at 4.
25 See, e.g., Flat Rock et al. Waiver Order, 25 FCC Rcd at 4639-41, paras. 4-8 nn.17, 25, 49 (describing such steps
as maintaining a calendar and assigning new staff to be made aware of and takeover the new filings).
26 See, e.g., id. at 4643-44, para. 14.
5

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15.
IT IS FURTHER ORDERED that the petition for waiver of section 54.301(e)(1) of the
Commission’s rules, 47 C.F.R. § 54.301(e)(1), filed by FairPoint Communications, Inc. IS GRANTED.
16.
IT IS FURTHER ORDERED that the petition for waiver of section 54.301(e)(1) of the
Commission’s rules, 47 C.F.R. § 54.301(e)(1), filed by Micronesia Telecommunications Corporation IS
GRANTED.
17.
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
Julie A. Veach
Chief
Wireline Competition Bureau
6

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