§ 54.318   High-cost support; limitations on high-cost support.

   (a) Beginning July 1, 2012, each carrier receiving high-cost support in a
   study area under this subpart will receive the full amount of high-cost
   support  it  otherwise  would  be entitled to receive if its rates for
   residential local service plus state regulated fees as defined in paragraph
   (e)  of  this section exceed a local urban rate floor representing the
   national average of local urban rates plus state regulated fees under the
   schedule specified in paragraph (f) of this section.

   (b) Carriers whose rates for residential local service plus state regulated
   fees offered for voice service are below the specified local urban rate
   floor  under  the  schedule below plus state regulated fees shall have
   high-cost support reduced by an amount equal to the extent to which its
   rates for residential local service plus state regulated fees are below the
   local urban rate floor, multiplied by the number of lines for which it is
   receiving support.

   (c) This rule will apply only to rate-of-return carriers as defined in § 54.5
   and carriers subject to price cap regulation as that term is defined in
   § 61.3 of this chapter.

   (d)  For purposes of this section, high-cost support is defined as the
   support available pursuant to § 54.1310 and frozen high-cost support provided
   to  price cap carriers to the extent it is based on support previously
   provided pursuant to § 54.1310 or former high-cost proxy model support.

   (e) State regulated fees. (1) Beginning on July 1, 2012, for purposes of
   calculating limitations on high-cost support under this section, state
   regulated fees shall be limited to state subscriber line charges, state
   universal service fees and mandatory extended area service charges, which
   shall be determined as part of a local rate survey, the results of which
   shall be published annually.

   (2) Federal subscriber line charges shall not be included in calculating
   limitations on high-cost support under this section.

   (f)  Schedule.  High-cost  support  will be limited where the rate for
   residential local service plus state regulated fees are below the local
   urban rate floor representing the national average of local urban rates plus
   state regulated fees under the schedule specified in this paragraph. To the
   extent end user rates plus state regulated fees are below local urban rate
   floors  plus state regulated fees, appropriate reductions in high-cost
   support will be made by the Universal Service Administrative Company.

   (g) Any reductions in high-cost support under this section will not be
   redistributed to other carriers that receive support pursuant to § 54.1310.

   (h) If, due to changes in local service rates, a local exchange carrier
   makes an updated rate filing pursuant to section 54.313(h)(2), the Universal
   Service Administrative Company will update the support reduction applied
   pursuant to paragraphs (b) and (f) of this section.

   (i) For the purposes of this section and the reporting of rates pursuant to
   paragraph 313(h), rates for residential local service provided pursuant to
   measured or message rate plans or as part of a bundle of services should be
   calculated as follows:

   (1) Rates for measured or message service shall be calculated by adding the
   basic  rate for local service plus the additional charges incurred for
   measured service, using the mean number of minutes or message units for all
   customers subscribing to that rate plan multiplied by the applicable rate
   per minute or message unit. The local service rate includes additional
   charges for measured service only to the extent that the average number of
   units used by subscribers to that rate plan exceeds the number of units that
   are included in the plan. Where measured service plans have multiple rates
   for additional units, such as peak and off-peak rates, the calculation
   should reflect the average number of units that subscribers to the rate plan
   pay at each rate.

   (2) For bundled service, the residential local service rate is the local
   service rate as tariffed, if applicable, or as itemized on end-user bills.
   If a carrier neither tariffs nor itemizes the local voice service rate on
   bills for bundled services, the local service rate is the rate of a similar
   stand-alone local voice service that it offers to consumers in that study
   area.

   [ 76 FR 73876 , Nov. 29, 2011, as amended at  77 FR 14302 , Mar. 9, 2012;  77 FR 30914 , May 24, 2012;  79 FR 39190 , July 9, 2014]

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