§ 54.1304   Calculation of safety net additive.

   (a) Safety net additive support. Only those local exchange carriers that
   qualified for safety net additive based on 2011 or prior year costs shall be
   eligible to receive safety net additive pursuant to paragraph (c) of this
   section. A local exchange carrier shall not receive safety net additive
   unless the carrier's realized total growth in Telecommunications Plant in
   Service (TPIS) was more than 14 percent in 2011 or earlier, pursuant to
   paragraph (c) of this section.

   (b) Calculation of safety net additive support for companies that qualified
   based on 2011 or prior year costs. Safety net additive support is equal to
   the amount of capped support calculated pursuant to this subpart M in the
   qualifying year minus the amount of support in the year prior to qualifying
   for support subtracted from the difference between the uncapped expense
   adjustment for the study area in the qualifying year minus the uncapped
   expense adjustment in the year prior to qualifying for support as shown in
   the following equation: Safety net additive support = (Uncapped support in
   the qualifying year−Uncapped support in the base year)−(Capped support in
   the qualifying year−Amount of support received in the base year).

   (c) Operation of safety net additive support for companies that qualified
   based  on 2011 or prior year costs. (1) In any year in which the total
   carrier  loop  cost expense adjustment is limited by the provisions of
   § 54.1302, a rate-of-return incumbent local exchange carrier shall receive
   safety net additive support as calculated in paragraph (b) of this section,
   if in any study area, the rural incumbent local exchange carrier realizes
   growth in end of period TPIS, as prescribed in § 32.2001, on a per loop
   basis, of at least 14 percent more than the study area's TPIS per loop
   investment at the end of the prior period.

   (2) If paragraph (c)(1) of this section is met, the rural incumbent local
   exchange carrier must notify the Administrator; failure to properly notify
   the Administrator of eligibility shall result in disqualification of that
   study area for safety net additive, requiring the rural incumbent local
   exchange carrier to again meet the eligibility requirements in paragraph
   (c)(1) of this section for that study area in a subsequent period.

   (3) Upon completion of verification by the Administrator that the study area
   meets the stated criterion in paragraphs (a), (b), or (c) of this section,
   the Administrator shall:

   (i)  Pay to any qualifying rural telephone company safety net additive
   support for the qualifying study area in accordance with the calculation set
   forth in paragraph (b) of this section; and

   (ii)  Continue  to  pay safety net additive support in any of the four
   succeeding years in which the total carrier loop expense adjustment is
   limited by the provisions of § 54.1302. Safety net additive support in the
   succeeding four years shall be the lesser of:

   (A) The sum of capped support and the safety net additive support received
   in the qualifying year; or

   (B) The rural telephone company's uncapped support.

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