DA 99-2374
Before the
Federal Communications Commission 
Washington, B.C. 20554
In the Matter of
GTE Telephone Operating Companies
Transmittal Nos. 1225 and 1226 
FCC Tariff Nos. 1 and 2
GTE System Telephone Companies 
Transmittal No 296 
FCC Tariff No. 1
CC Docket No. 99-323
Transmittal Nos. 1225, 1226
Suspension Order
Adopted: October 29, 1999 Released: October 29, 1999
By the Chief, Competitive Pricing Division, Common Carrier Bureau:
1. On July 30, 1999, a three-judge panel of the United States Court of Appeals 
for the Fifth Circuit issued a decision1 affirming in part, remanding in part, and reversing in 
part the Commission's May 8, 1997 Universal Service Order 2 Several of the court's rulings 
in that decision affect the assessment and recovery of universal service contributions, as well 
as the Commission's Lifeline program for low-income consumers. On September 9, 1999, 
the Commission filed a motion to stay the court's mandate, which had been scheduled to take 
effect on September 20, 1999.3 On September 10, 1999, the Commission released proposed 
fourth quarter 1999 contribution factors, which the Universal Service Administrative 
Company (USAC) used to bill contributors for their October 1999 contributions.4 Consistent 
with the Commission's rules in effect on that date, one of these contribution factors was 
calculated based on contributors' intrastate, interstate, and international end-user 
telecommunications revenues for the July 1998 through December 1998 period, as reported 
by contributors on the March 1999 Universal Service Worksheet (FCC Form 457). On
1 Texas Office of Public Utility Counsel v. FCC. 183 F.3d 393 (5th Cir. 1999).
: Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order. 12 FCC Red 8776 
(1997), as corrected by Federal-State Joint Board on Universal Service, CC Docket 96-45, Erratum, FCC 97-157 
(rel. June 4, 1997), affd in part, rev 'd in part, remanded in part sub nom. Texas Office of Public Utility Counsel 
v. FCC, 183 F.3d 393 (5th Cir. 1999), motion for slay granted in part, (Sept. 28, 1999), petitions for rehearing and 
rehearing en bane denied, (Sept. 28, 1999) (Universal Service Order).
3 FCC Petition for Panel Rehearing (filed Sept. 13, 1999); FCC Petition for Rehearing En Bane (filed Sept. 13, 
1999).
4 Proposed Fourth Quarter 1999 Universal Service Contribution Factors, CC Docket 96-45, Public Notice, DA 99- 
1857 (rel. Sept 10, 1999) (Proposed Fourth Quarter Contribution Factors).
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Federal Communications Commission DA 99-2374
September 28, 1999, the court granted, in part, the Commission's motion for stay and 
ordered its July 30, 1999 mandate to take effect on November 1, 1999.5 In order to comply 
with the Fifth Circuit's decision, on October 8, 1999, the Commission eliminated intrastate 
revenues from the contribution base. The elimination of intrastate revenues from the 
contribution base reduces the contributions of incumbent local exchange carriers (LECs) to 
the universal service support mechanisms. To the extent an incumbent LEG recovers its 
universal service contributions in interstate access charges, an incumbent LEC is required to 
file tariffs reducing its access charges, correspondingly.
2. On October 25, 1999, GTE Telephone Operating Company (GTOC) and GTE 
System Telephone Companies (GSTC) (GTE, collectively) filed transmittais (GTE's transmittals, 
collectively) in accordance with the Commission's Fifth Circuit Implementation Order. 9 On 
October 28, 1999, AT&T and MCI filed petitions to suspend and investigate. Among other 
things, AT&T and MCI argue that GTE computed its USF obligation incorrectly because it 
computed its November and December obligation using the new contribution factor, but failed to 
annualize the contribution level for November and December. 10
3 We find that this issue raised by AT&T and MCI in support of their petitions to 
suspend and investigate the transmittals filed by GTE raises substantial questions of lawfulness 
that warrant investigation of these tariffs. Accordingly, the transmittals filed by GTE Telephone 
Operating Companies and GTE System Telephone Companies are suspended for one day, 
following the effective date. We will identify specific issues for this investigation and establish a 
pleading cycle in a future designation order. In addition, GTE's transmittals are subject to 
accounting orders to facilitate any refunds that may later prove to be necessary.
4. Pursuant to Sections 1.200 and 1.1206 of the Commission's Rules, 47 C.F.R. §§
5 Texas Office of Public Utility Counsel v. FCC, No. 97-60421 (Sept. 28, 1999) (order granting, in part, 
Commission's motion for stay).
6 Federal-State Joint Board on Universal Service, Sixteenth Order on Reconsideration in CC Docket 96-45, Eighth 
Report and Order in CC Docket 96-45, Sixth Report and Order in CC Docket 96-262, (Rel. October 8. 1999) ffi[15- 
18. (Fifth Circuit Implementation Order).
1 Id.
8 See GTE System Telephone Companies, Transmittal No. 296, FCC Tariff No. 1; GTE Telephone Operating 
Companies Transmittal No. 1225, FCC Tariff Nos. 1 & 2; GTE Telephone Operating Companies Transmittal No. 
1226, FCC Tariff FCC No. 1.
9 Fifth Circuit Implementation Order at 15-18.
10 AT&T Petition to Suspend and Investigate at 8-9; MCI Petition to Suspend and Investigate at 3.
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1.200 and 1.1206, this proceeding will be conducted as a permit- but-disclose proceeding in 
which ex parte communications are permitted subject to disclosure. Persons making oral ex parte 
presentations are reminded that memoranda summarizing the presentations must contain 
summaries of the substance of the presentations and not merely a listing of the subject discussed. 
More than a one or two sentence description of the views and arguments presented is generally 
required. See 47 C.F.R. § 1.1206(b). Other rules pertaining to oral and written ex parte 
presentations in permit-but-disclose proceedings are set forth in 47 C.F.R. § 1.1206(b).
5. Accordingly, IT IS ORDERED that, pursuant to Section 204(a) of the 
Communications Act of 1934, as amended, 47 U.S.C. § 204(a), and through the authority 
delegated pursuant to Sections 0.91 and 0.291 of the Commission's Rules, 4.7 C.F.R. §§ 0.91, 
0.291, the tariff revisions contained in the transmittals filed by GTE Telephone Operating 
Companies and GTE System Telephone Companies ARE SUSPENDED for one day and an 
investigation IS INSTITUTED.
6. IT IS FURTHER ORDERED that, pursuant to Section 204(a) and 4(i) of the 
Communications Act of 1934, as amended, 47 U.S.C. § 204(a), 154(1) and through the authority 
delegated pursuant to Sections 0.91 and 0.291 of the Commission's Rules, 47 C.F.R. §§ 0.91, 
0.291, GTE Telephone Operating Companies and GTE System Telephone Companies SHALL 
KEEP ACCURATE ACCOUNT of all amounts received that are associated with the rates that 
are subject of to this investigation.
7. IT IS FURTHER ORDERED that GTE Telephone Operating Companies and 
GTE System Telephone Companies SHALL FILE a supplement within five business days of the 
release date of this Order reflecting the one day suspension. GTE Telephone Operating 
Companies and GTE System Telephone Companies should cite the "DA" number of this Order as 
the authority for this filing.
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Federal Communications Commission DA 99-2374
8. IT IS FURTHER ORDERED that the petitions to suspend and investigate or to 
reject GTE System Telephone Companies and GTE Telephone Operating Companies Universal 
Service Fund Implementation Tariff Filings ARE GRANTED to the extent indicated herein and 
otherwise ARE DENIED.
FEDERAL COMMUNICATIONS COMMISION
E. Jackson 
Chief
Competitive Pricing Division 
Common Carrier Bureau
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