0814_ss_121410

3060-0814

December 2010

SUPPORTING STATEMENT

A. Justification:

1. The Communications Act of 1934, as amended (the Act), requires the Commission to preserve and advance universal service as markets move toward competition. To fulfill that mandate, the Commission has adopted rules to provide universal service support to rural and high-cost areas. One mechanism for providing such support is the local switching support mechanism. Local switching support is provided to carriers with study areas of 50,000 or fewer access lines to help defray the higher switching costs of smaller carriers. To receive local switching support, carriers are required to provide information relating to their switching costs.

The Commission is now seeking OMB approval for an extension (no change in the reporting and/or third party disclosure requirements) of the reporting and third party disclosure requirements described below. There are no changes to the existing information collection requirements as part of this information collection extension request. This extension request only updates the respondent numbers and burden hours reported on the FCC Local Switching Support (LSS) forms for cost companies and average schedule companies as described above.

47 C.F.R. § 54.301 (a) through (e) - Local Switching Support (cost companies) – Each incumbent local exchange carrier that is not a member of the National Exchange Carrier Association, Inc. (NECA) Common Line tariff, that is a cost company, that has been designated an eligible telecommunications carrier, and that serves a study area with 50,000 or fewer access lines shall, for each study area, provide the Administrator with the projected total un-separated dollar amount assigned to each account in Section 54.301(b).

47 C.F.R. § 54.301(f) – Local Switching Support (average schedule companies) – Each incumbent local exchange carrier that is not a member of the NECA Common Line tariff, that is an average schedule company, that has been designated an eligible telecommunications carrier, and that serves a study area with 50,000 or fewer access lines shall, for each study area, provide the Universal Service Administrative Company (USAC or Administrator) with its projected total number of access lines, central offices, and access minutes. This information is necessary so that the universal service Administrator may comply with section 54.301(f) of the Commission’s rules.

Section 54.301(f) also requires that “The Administrator of the universal service fund (third party) shall submit to the Commission and the Wireline Competition Bureau for review and approval a formula that simulates the disbursements that would be received pursuant to this section by a company that is representative of average schedule companies. For each annual period, the Administrator shall submit the formula, any proposed revisions of such formula, or a certification that no revisions to the formula are warranted on or before December 31 of each year.”

The statutory authority for this collection is contained in sections: 1-4, 151, 154, 201-205, 218-220, 214, 254, 303(r), 403, and 410 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 201-205, 218-220, 214, 254, 303(r), 403 and 410.

As noted on the OMB Form 83i, this information collection does not affect individuals or households; thus, there are no impacts under the Privacy Act.

2. This data request is necessary to calculate the average un-separated local switching revenue requirement. This revenue requirement calculation is necessary to calculate the amount of local switching support that carriers will receive. The reporting requirements should not be burdensome since carriers ordinarily retain this type of information to calculate their switching costs consistent with Part 32 of the Commission’s rules.

3. In an effort to reduce any burden created by these information collection requirements, the Commission shall permit all respondents to file responses using automated, electronic, mechanical or other technological collection techniques where feasible. Respondents may respond to this data request electronically directly to the universal service Administrator.

4. There will be no duplication of information. The information sought is unique to each carrier or respondent and similar information is not already available. The Commission is using already established reporting and recordkeeping requirements to satisfy certain statutory directives and eligibility criteria.

5. The collections of information may affect small entities as well as large entities. In this instance, however, the collection was instituted to ensure that all entities continue to receive universal service support consistent with the Congressional directive to make support “explicit.” This information collection is based on information already maintained by carriers.

6. Failing to collect the information, or collecting it less frequently, would prevent the Commission from implementing sections 214 and 254 of the Telecommunications Act of 1996 and would thwart Congress's goals of providing affordable service and access to advanced services nationwide.

7. Not applicable. The collections are not designed in any known manner to be inconsistent with OMB’s guidelines.

8. Pursuant to 5 CFR Section 1320.8(d), the Commission published a 60-day notice in the Federal Register to solicit public comment on October 12, 2010, see 75 FR 62536. The Commission received no comments following publication of this notice.

9. There will be no payments of gifts to respondents.

10. The Commission does not request that respondents submit confidential information to the Commission. If the Commission does request applicants to submit information that the respondents believe is confidential, respondents may request confidential treatment of such information under the Commission’s rules, 47 C.F.R.§ 0.459.

11. There are no questions of a sensitive nature with respect to the information collections described herein.

12. The following represents the hour burden on the collection of information:

a. 47 C.F.R. § 54.301 (a) through (e) – Local Switching Support. Filing by cost companies not members of the NECA tariff:

(1) Number of respondents: Approximately 157 telephone companies would have to obtain and report local switching information; 157 responses.

(2) Frequency of response: Annual and on occasion reporting requirements.

(3) Annual burden per respondent: 24 hours to report all of the local switching information. 157 x 24 hours per response = 3,768 hours.

(4) Total estimate of annualized in-house cost to respondents for the hour burdens for collection of information: $188,400.

(5) Explanation of calculation: We estimate that this obligation will take 157 carriers approximately 24 hours each to compile the required local switching information (157 x 24) = 3,768 hours x $50 per hour (including administrative staff time and overhead) = $188,400.

b. 47 C.F.R. § 54.301(f) – Local Switching Support and fund Administrator submission of the formula that simulates the disbursements. Filing by average schedule companies not members of the NECA tariff.

(1) Number of respondents: The fund Administrator (1 Administrator submission of formula that simulates disbursements) and approximately 17 telephone companies would have to obtain and report local switching information = 18 respondents; 18 responses.

(2) Frequency of response: Annual reporting requirement and third party disclosure requirement.

(3) Annual burden per respondent: 1 hour for the Administrator submission and review of formula, and 18 telephone companies at 0.5 hours to report all of the local switching information. The total annual line reporting burden is:

1 hour x 1 respondent (Fund Administrator) = 1 hour;

17 telephone companies x 0.5 hours = 8.5 hours.

1 hour + 8.5 hours = 9.5 hours (rounded to 10 hours)

(4) Total estimate of annualized cost to respondents for the hour burdens for collection of information: $475.00.

(5) Explanation of calculation: We estimate that this obligation will take the Administrator one hour at $50 per hour (including administrative staff time and overhead) (1 x $50) = $50.00 x 17 telephone companies x 0.5 hours = 8.5 hours (including administrative staff time and overhead) (total annual burden 9.5 x $50.00 hr) = $475.00 to compile the required local switching information.

Total Number of Respondents: 157 + 18 = 175 respondents.

Total Number of Responses Annually: 157 + 18 = 175 responses.

Total Annual Hourly Burden: 3,768 + 10 = 3,778 hours.

Total “In House” Costs: $188,400 + $475.00 = $188,875.00.

13. (1) Total capital start-up costs component annualized over its expected useful life: None.

The collections will not require the purchase of additional equipment.

(2) Total operation and maintenance and purchase of services component: None.

The collections will not result in additional operating or maintenance expenses.

(3) Total annualized cost requested: None.

14. There will be few, if any, costs to the Commission because notice and enforcement requirements are already part of Commission duties. Moreover, there will be minimal cost to the Federal government since an outside party will administer this program.

15. The Commission is reporting an increase adjustment of 810 burden hours from the previous estimated 2,968 hours. The increase is due to an overall increase in the number of respondents from 153 respondents to 175 respondents, as follows:

(a) the number of respondents effected by Section 54.301 has increased from 123 to 157; but

(b) the number of respondents effected by Section 54.301(f) has decreased from 29 to 18.

16. This information may be made public through reports from the universal service Administrator to the Commission although the Commission does not have specific plans for doing so at this time.

17. The Commission requests approval not to display the expiration date for OMB approval of the information collections. Display of the expiration date on the FCC LSS Forms and instructions would not be in the public interest because, after the approval period, we would have to destroy all of the unused forms bearing the edition date. This would constitute waste and would not be cost effective.

18. There are no exceptions to the Certification Statement.

B. Collections of Information Employing Statistical Methods:

The Commission does not anticipate that the collection of information will employ statistical methods.

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