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 Federal  Communications  Commission  DA  01-  2855 
 FEDERAL  COMMUNICATIONS  COMMISSION 
 Washington,  D.  C.  20554 


 December  7,  2001 
 Mr.  Richard  A.  Askoff 
 Deputy  General  Counsel 
 National  Exchange  Carrier  Association,  Inc. 
 80  South  Jefferson  Road 
 Whippany,  New  Jersey  07981 


 Dear  Mr.  Askoff: 
 In  a  letter  dated  October  24,  2001,  NECA  provided  the  Accounting  Safeguards  Division  with  a 
 schedule  of  payments  for  Universal  Service  Fund  (USF)  expense  adjustments  for  average  schedule 
 companies  for  the  period  July  1,  2001  through  December  31,  2001.  1  NECA  submitted  this  schedule  of 
 payments  pursuant  to  our  October  5,  2001  letter  2  permitting  NECA  to  recalculate  average  schedule  USF 
 payments  for  the  second  half  of  2001  to  reflect  the  effect  on  cost-  based  rural  incumbent  LECs  (determined 
 to  be  18.4%)  of  the  Commission’s  Fourteenth  Report  and  Order.  3  To  accomplish  this  NECA  was  directed 
 to  retain  the  current  average  schedule  USF  formula  but  increase  payments  for  the  aforementioned  period  by 
 18.4%. 


 In  its  October  24,  2001  letter  NECA  indicates  that  the  revised  payments  were  calculated  by 
 adjusting  total  current  payments  by  18.4%.  They  also  point  out  that,  due  to  the  lower  nationwide  average 
 cost  per  loop  effective  July  1,  2001,  4  the  revised  payment  schedule  provides  USF  payments  to  a  larger 
 number  of  study  areas  than  previously  reported. 


 Our  review  finds  that  NECA’s  proposed  USF  payment  schedule,  as  attached  to  its  letter  of  October 
 24,  2001,  is  reasonable.  Accordingly,  NECA  is  directed  to  adjust  USF  payments  made  to  average  schedule 
 companies  for  the  period  July  1,  2001  through  December  31,  2001  to  reflect  the  aforementioned  payment 
 schedule. 


 Sincerely, 


 Kenneth  P.  Moran 
 Chief,  Accounting  Safeguards  Division 


 CC:  Gina  Harrison,  Senior  Counsel,  NECA 
 1  See  letter  dated  October  24,  2001,  to  Mr.  Kenneth  P.  Moran,  Accounting  Safeguards  Division  from  Mr.  Richard 
 A.  Askoff,  NECA  (October  24,  2001  Letter).  2 
 See  letter  dated  October  5,  2001,  to  Mr.  James  W.  Frame,  National  Exchange  Carrier  Association  from  Mr. 
 Kenneth  P.  Moran,  ASD,  CCB,  FCC  (October  5,  2001  Letter).  3 
 Federal-  State  Joint  Board  on  Universal  Service,  Multi-  Association  Group  (MAG)  Plan  for  Regulation  of 
 Interstate  Services  of  Non-  Price  Cap  Incumbent  Local  Exchange  Carriers  and  Interexchange  Carriers,  Fourteenth 
 Report  and  Order,  Twenty-  Second  Order  on  Reconsideration,  and  Further  Notice  of  Proposed  Rulemaking  in  CC 
 Docket  No.  96-  45,  and  Report  and  Order  in  CC  Docket  No.  00-  256,  _  FCC  Rcd  _,  (2001)  (Fourteenth  Report  and 
 Order).  4 


 See  Fourteenth  Report  and  Order  at  ¶¶  54-  59. 
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 Federal  Communications  Commission  DA  01-  2855 
 2 
 Irene  Flannery,  Vice  president  USAC 
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