PUBLIC NOTICE FEDERAL COMMUNICATIONS COMMISSION 445 12th STREET, S.W. WASHINGTON, D.C. 20554 DA 00-2764 News media information 202/418-0500 Fax-On-Demand 202/418-2830 Internet: http://www.fcc.gov ftp.fcc.gov Released: December 8, 2000 Proposed First Quarter 2001 Universal Service Contribution Factor CC Docket No. 96-45 In this Public Notice, the Common Carrier Bureau announces the proposed universal service contribution factor for the first quarter of 2001. Rules for Calculating the Contribution Factor Contributions to the federal universal service support mechanisms are determined using a quarterly contribution factor calculated by the Commission. Under section 54.709 of the Commission's rules, the Commission shall calculate the quarterly contribution factor based on the ratio of total projected quarterly costs of the universal service support mechanisms to total end-user interstate and international telecommunications revenues. USAC Projections of Demand and Administrative Expenses Pursuant to section 54.709(a)(3) of the Commission's rules, the Universal Service Administrative Company (USAC) submitted the following projections of demand and administrative expenses for the first quarter of 2001: ($ millions) Program Projected Program Support Admin. Expenses Application Of Interest Income Application of Periodic True- Ups Total Program Collection Schools and Libraries 553.229 9.271 (23.848) (11.917) 526.735 Rural Health Care 2.425 0.706 (0.029) (1.287) 1.815 High-Cost 667.223 1.488 (1.400) (6.431) 660.880 Low Income 168.607 0.361 (0.800) (3.803) 164.365 TOTAL 1391.484 11.826 (26.077) (23.438) 1353.795 USAC reports that, based on current data, it does not believe that it will need to disburse the full amount of funds that it was authorized to collect for the first year of the schools and libraries program and second year of the rural health care program. Specifically, USAC estimates that the schools and libraries program will have an unused balance of approximately $0.620 million. In addition, USAC estimates that the rural health care program will have an unused balance of approximately $1.2 million. Unused funds from prior periods that are applied to reduce the collection requirement are reflected in the "Application of Periodic True-Ups" column of the above chart. We direct USAC to apply all of the estimated unused balance of Year 1 funds to reduce the collection requirement for the schools and libraries program in the first quarter of 2001. In addition, we direct USAC to apply all of the estimated unused balance of Year 2 of the rural health care program to the collection requirement for the rural health care program in the first quarter of 2001. This action is consistent with Commission rules and precedent directing that unused contributions be credited back to contributors. USAC Projections of Industry Revenues USAC submitted estimated end-user telecommunications revenues for January through June 2000 based on information contained in the September 2000 Telecommunications Reporting Worksheet (FCC Form 499-S). The amount is as follows: Total Interstate and International End-User Telecommunications Revenues from January 1, 2000 June 30, 2000: $40.925433 billion Contribution Base To determine the quarterly contribution base, we first divide the six-month estimate of interstate and international end-user telecommunications revenues by two. Then, we decrease the revenue estimate by one percent to account for uncollectible contributions. Accordingly, the quarterly contribution base for the first quarter of 2001 is as follows: Quarterly Contribution Base for Universal Service Support Mechanisms (Six Month Interstate and International Revenues / 2) - Uncollectibles ($40.925433 billion / 2) - 1% $20.258089 billion Proposed Contribution Factor Using this quarterly contribution base, and the total program collection requirement from the table above, the proposed contribution factor for the first quarter of 2001 is as follows: Contribution Factor for Universal Service Support Mechanisms Total Program Collection / Quarterly Contribution Base $1.353795 billion / $20.258089 billion 0.066827 If the Commission takes no action regarding the proposed contribution factor within the 14-day period following release of this Public Notice, the contribution factor shall be deemed approved by the Commission. USAC shall then use the contribution factor to calculate universal service contributions for the first quarter of 2001. For further information, contact Richard D. Smith or Anita Cheng, Accounting Policy Division, Common Carrier Bureau, at (202) 418-7400, TTY (202) 418-0484.