Federal Communications Commission 
Washington, D.C. 20554
DA 97-1228
June 11, 1997
The Honorable Thomas B. GetzDirector and Executive Secretary
New Hampshire Public Utilities Commission
8 Old Suncook Road
Concord, NH 03301-7319
Re: Request for Clarification of Certain Payphone-Related 
Subsidies; CC Docket No. 96-128
Dear Mr. Getz:
In your letter of May 23, 1997, on behalf of the New 
Hampshire Public Utilities Commission ("NH PUC"), you request 
staff, clarification of a statement in a recent order released by 
the Common Carrier Bureau ("the Bureau"}. 1 More specifically, 
you seek clarification of whether it is appropriate for NH PUC to 
remove a payphone subsidy from the intra-LATA toll service rates 
of a local exchange carrier ("LEG").
By way of background, Section 276 of the Communications Act2 
mandated that the Commission take all actions necessary to:
discontinue the intrastate and interstate carrier 
access charge payphone service elements and payments in 
effect on such date of enactment, and all intrastate 
and interstate payphone subsidies from basic exchange 
and exchange access revenues, in favor of a 
compensation plan... 3
1 See Implementation of the Pay Telephone Reclassification and 
Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 
S6-126, Order, DA 97-678 (Com. Car. Bur., rel. Apr. 4, 1997) at para. 30 
("subsidies be removed from the intrastate local exchange service and access 
service rates") ("Bureau Waiver Order").
2 47 U.S.C. § 276(b)(1)(B).
5 Id.
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In paragraph 186 of the Payphone Reclassification Order, the Commission delegated 
to the states the authority to identify the subsidies 
that must be terminated pursuant to Section 276 and the Commission's 
orders:
States must determine the intrastate rate elements that must be removed 
to eliminate any intrastate subsidies 
within this time frame.5
The Bureau clarifies here, pursuant to your specific 
request, that a state has the authority to determine the subsidies 
that exist for a LEC's payphone operations, regardless of where the subsidies 
may be located, including within intraLATA toll service rates. 
In accordance with Section 276 and the Commission's orders 
in the Payphone Reclassification Proceeding, these subsidies must then be 
terminated.6 The language from Bureau Waiver Order.7 as 
cited in your letter, does not contradict this directive 
by the Commission.
We trust that this clarification responds sufficiently to your letter request.
Sincerely,
John B. Muleta
ChiefEnforcement Division
Common Carrier Bureau
1996) ("Order on Reconsideration"). appeal docketed sub nom. Illinois Public 
Telecommunications Assn. v. FCC and United States, Case No. 96-1394 (D.C. 
Cir., filed Oct. 17, 1996} .
5 Pavphone Reclassification Order at para. 186.
Id. 
7 Bureau Waiver Order at para. 30.
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