*Pages 1--94 from Microsoft Word - 22336.doc* Federal Communications Commission FCC 02- 292 1 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of ) Implementation of the ) Pay Telephone Reclassification and ) CC Docket No. 96- 128 Compensation Provisions of the ) Telecommunications Act of 1996 ) FIFTH ORDER ON RECONSIDERATION AND ORDER ON REMAND Adopted: October 17, 2002 Released: October 23, 2002 By the Commission: Page I. Introduction.......................................................................................................................... 2 II. Background.......................................................................................................................... 3 III. Discussion............................................................................................................................ 5 A. Rate Reconsiderations.............................................................................................. 7 1. Reconsideration of Number of Calls............................................................ 7 2. 1+ Calls ...................................................................................................... 10 3. Reconsideration of the 24 Cent Rate ......................................................... 11 4. Reconsideration of Interest Component..................................................... 13 5. Revised Compensation Calculation ........................................................... 14 B. Allocation of Per- Phone Compensation Rate ........................................................ 14 1. Allocation Methodology ............................................................................ 14 2. Allocation to Resellers............................................................................... 24 3. Retroactive Ratemaking............................................................................. 25 C. Early and Intermediate Period Issues..................................................................... 26 1. Early Period ............................................................................................... 26 2. Refund of Payments Collected Under the 28.4 Cent Rate......................... 28 D. Payment Mechanisms ............................................................................................ 36 1. Payments Between Carriers and PSPs ....................................................... 36 2. Interest Applied to Late Payments............................................................. 40 3. WorldCom Petition Regarding Inmate Calls ............................................. 41 4. Asset Valuation and Targeted Blocking .................................................... 42 IV. Procedural Matters ............................................................................................................. 44 A. Effective Date ........................................................................................................ 44 B. Final Paperwork Reduction Act Analysis.............................................................. 45 1 Federal Communications Commission FCC 02- 292 2 C. Supplemental Final Regulatory Flexibility Act Analysis on Reconsideration...................................................................................................... 45 V. Ordering Clauses................................................................................................................ 45 APPENDIX A – iNTERIM ALLOCATION LIST APPENDIX B – INTERMEDIATE ALLOCATION LIST APPENDIX C – POST- INTERMEDIATE ALLOCATION LIST APPENDIX D -- NON- CARRIER RECIPIENTS OF PAYPHONE CALLS APPENDIX E – PETITIONS FOR RECONSIDERATION AND CLARIFICATION APPENDIX F – RULES APPENDIX G – SUPPLEMENTAL FINAL REGULATORY FLEXIBILITY ACT ANALYSIS Introduction 1. In the Fourth Order on Reconsideration and Order on Remand 1 in this proceeding, the Commission resolved some of the issues necessary to address the remand of the Commission’s First Report and Order by the United States Court of Appeals for the D. C. Circuit. 2 This order finishes the work we began in the Fourth Reconsideration Order by resolving how monthly per- phone compensation owed to payphone service providers (PSPs) is to be allocated among interexchange carriers (IXCs) and local exchange carriers (LECs). 3 This order also resolves how certain offsets to such payments shall be handled, the valuation of payphone assets transferred by LECs to a separate affiliate or operating division, and other issues raised by parties in petitions for reconsideration of our Third Report and Order 4 and our Fourth Reconsideration Order. By completing its work of responding to the remand by the D. C. 1 Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96- 128, Fourth Order on Reconsideration and Order on Remand, 17 FCC Rcd 2020 (2002) (Fourth Reconsideration Order). 2 Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96- 128, Report and Order, 11 FCC Rcd 20541 (1996) (First Report and Order); Order on Reconsideration, 11 FCC Rcd 21233 (1996) ( First Reconsideration Order), aff'd in part and remanded in part sub nom. Illinois Pub. Telecomm. Ass'n v. FCC, 117 F. 3d 555 (D. C. Cir. 1997) ( Illinois), clarified on reh’g, 123 F. 3d 693 (D. C. Cir. 1997), cert. denied sub nom. Virginia State Corp. Comm’n v. FCC, 523 U. S. 1046 (1998); see also Second Report and Order, 13 FCC Rcd 1778 (1997)( Second Report and Order), aff'd in part and remanded in part sub nom. MCI v. FCC, 143 F. 3d 606 (D. C. Cir. 1998) (MCI). 3 Most of the entities that owe payphone compensation are IXCs. Indeed, in the First Report and Order, the Commission defined the term “IXC” to include LECs to the extent that LECs carried compensable payphone calls. First Report and Order, 11 FCC Rcd at 20584 n. 293. We will generally refer to entities owing compensation as “carriers” in this Order, to avoid any inference that, except as otherwise provided herein, we intend to exclude types of providers other than IXCs. 4 Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96- 128, Third Report and Order and Order on Reconsideration of the Second Report and Order, 14 FCC Rcd 2545 (1999)( Third Report and Order), reconsideration petitions pending, aff'd sub nom. American Pub. Communications Council v. FCC, 215 F. 3d 51 (D. C. Cir. 2000) (American). 2 Federal Communications Commission FCC 02- 292 3 Circuit, the Commission clears the way for PSPs, LECs and IXCs to resolve per- phone compensation owed for periods as far back as 1996. After many Commission orders, reconsideration petitions, and extensive litigation on these issues, the Commission finally closes a long- open chapter in the history of payphone compensation. In this Order, we provide a measure of finality regarding these questions in a way that most reasonably advances the basic policy directives for the provision of payphone services established by Congress under section 276 of the Telecommunications Act of 1996 5 (the “1996 Act”): (1) promoting a competitive payphone market; (2) ensuring the widespread deployment of payphones for the benefit of the general public; and (3) ensuring that PSPs receive fair compensation for every call made using their payphones. Background 2. The foundation of our authority to regulate per- call and per- phone compensation is section 276 of the Act, which significantly altered the landscape for the provision of payphone service. Prior to the enactment of section 276 in 1996, incumbent LECs recovered the cost of providing payphone services, at least in part, through the inclusion of charges for the recovery of such costs in their intrastate and interstate regulated rate structures. Independent providers of payphone service, however, had no such regulated cost recovery mechanism. To redress this imbalance and level the playing field for the provision of payphones, section 276( b)( 1)( B) directed the Commission to prescribe regulations to “discontinue the intrastate and interstate carrier access charge payphone service elements and payments . . . and all intrastate and interstate payphone subsidies from basic and exchange access revenues.” The Commission did so in the First Report and Order. 6 Section 276( b)( 1)( A) of the Act further required the Commission to replace this legacy of cost recovery favoring incumbent LEC providers with a “per- call compensation plan to ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call using their payphone . . . .” 3. The Commission’s task in implementing this latter directive is complicated by the fact that there are several different types of calls that may be placed from a payphone and therefore must result in compensation to the owner of the phone pursuant to section 276. First, a payphone user may place a local call for which he deposits money into the phone. The deposited money provides the per- call compensation for such local coins calls, as explained in the First Report and Order. Users may also call a toll- free number, 7 dial an access code, or use a pre- paid calling card without placing any money into the payphone. These coinless calls present a different, and more difficult, compensation issue. Because no money is deposited by the caller when making access code, subscriber toll- free or calling card calls, the owner of the payphone does not receive direct compensation for the costs associated with the use of its payphone from the end user, and must thus receive compensation from some other source. Although a “caller pays” system could be technically feasible for these types of calls, section 226 of the Act prohibits the Commission from adopting compensation rules for interstate access code calls that would require advance payment by consumers. 8 We have thus held that the Congressional intent 5 Pub. L. No. 104- 104, 110 Stat. 56 (1996) (codified at 47 U. S. C. § 276). The complete text of Section 276 is provided as Appendix A of the First Report and Order, 11 FCC Rcd at 20713- 14. 6 First Report and Order, 11 FCC Rcd at 20632- 34, ¶¶ 180- 87. 7 Also referred to in previous orders as “subscriber 800” calls. See id. at 20549 & n. 35. As dialing prefixes other than “800” are increasingly used for toll- free calls, we will refer to these calls as “toll- free” or “subscriber toll- free” calls in this Order. 8 First Report and Order, 11 FCC Rcd at 20585, ¶85. 3 Federal Communications Commission FCC 02- 292 4 underlying this prohibition, and the express language of section 226, precludes us from implementing section 276 through a “caller pays” system for coinless calls. 9 Accordingly, in the First Report and Order, we decided that the “primary economic beneficiary” of the call, the IXC, would be responsible for paying per- call compensation. 10 4. In that order, we expressed the view that, ultimately, the market should determine the amounts paid for any given call, but recognized that carriers and PSPs did not have equal economic bargaining positions because the Act prohibits PSPs from blocking calls made from their phones. 11 This prohibition obligates the PSP to provide full service to the carrier, but gives the carrier no economic incentive to pay for the service it receives. There have also been technical hurdles to ensuring per- call compensation. At the time section 276 was enacted into law, many telephone companies lacked the necessary hardware and software to track calls in order to determine who owed what money to whom. At this point, the vast majority of payphones now transmit the appropriate coding digits. 12 5. In the First Report and Order and subsequent orders issued over the following six years, we set forth various “default” compensation rates to govern dial around compensation in the absence of an agreed upon rate, acknowledging that, in practice, the default rate is the de facto rate in the industry given the lack of economic incentives for parties to negotiate. Our first two rates were reversed by the D. C. Circuit, and the third one was upheld. 13 The different rates that have prevailed at different times give rise to two separate periods of payphone compensation. 6. We will refer to the first period as the “Interim Period,” which began on the effective date of the First Report and Order, November 7, 1996, and ended on October 6, 1997. Because call tracking did not then exist, the Commission ordered compensation to be paid on a per- phone, rather than a per- call basis. We calculated that 131 calls were placed from the average payphone per- month, and each PSP was entitled to a default rate of 35 cents per- call. This yielded a per- phone compensation of $45.85 per- month, to be paid collectively by the carriers. The Commission determined that all carriers with toll revenue exceeding $100 million would pay a share of the compensation, pro rated by the ratio of their toll revenue to total industry revenue. 7. In Illinois, the D. C. Circuit reversed three critical aspects of that regime. First, it held that the 35 cent compensation rate was arbitrary; second, it held that it was arbitrary to exclude smaller carriers from responsibility for paying compensation; and third, it held that toll 9 Id.; Second Report and Order, 13 FCC Rcd at 1844, § 162; Third Report and Order, 14 FCC Rcd at 2565, ¶ 42 and 2597, ¶¶ 114- 16 (“. . . we find that the statutory language and legislative history indicate Congress’s disapproval of a caller- pays methodology”); see also S. Rep. No. 101- 439 at 20 (1990). 10 First Report and Order, 11 FCC Rcd at 20584, ¶ 83, 20586, ¶ 86. 11 Id. at 20567, ¶ 49. 12 See SBC Request to Extend Limited Waiver of Coding Digit Requirements, CC Docket 96- 128, Order (Dec. 9, 1998); Third Report and Order, 14 FCC Rcd at 2553; see also Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96- 128, Order, 14 FCC Rcd 836 (Network Serv. Div. 1998) (waiver denials). 13 See Illinois, 117 F. 3d at 564; MCI, 143 F. 3d at 609; American, 215 F. 3d at 58. 4 Federal Communications Commission FCC 02- 292 5 revenues were not a rational ground on which to base the pro rata per- company compensation responsibility. 14 Thus, the D. C. Circuit required the Commission to establish an appropriate per-call compensation rate going forward, and also required the Commission to reexamine aspects of its methodology for per- phone compensation during the Interim Period. 8. On remand, the Commission addressed its first charge by establishing a new per-call rate of 28.4 cents. 15 We have referred to the period during which that rate was in effect as the “Intermediate Period,” beginning on October 7, 1997 and ending on April 20, 1999. In MCI, the D. C. Circuit held that the 28.4 cent rate was arbitrary. The court did not vacate the rate, but simply remanded for further proceedings. 16 The 28.4 cent rate was thus in effect, and the Intermediate Period lasted, until a new per -call rate of 24 cents was calculated in the Third Report and Order. The D. C. Circuit upheld this rate in APCC. 17 With regard to the Intermediate Period, the Third Report and Order determined that the per- call compensation rate should have been 23.8 cents per- call, derived by reducing the 24 cent rate by 0.2 cents for the cost of FlexANI technology, which was not payable during the Interim and Intermediate Periods. 18 The Third Report and Order thus required PSPs to refund to carriers the difference between the 28.4 cents actually paid and the proper rate of compensation during the Intermediate Period of 23.8 cents. Several parties have asked for reconsideration of that conclusion. 19 9. As noted above, the Fourth Reconsideration Order resolved certain issues relating to Interim Period compensation. Specifically, the Commission determined that the per-phone per- month compensation rate would be $33.892, calculated by taking the per- call compensation rate of 24 cents set in the Third Report and Order, deducting cost components of 0.2 cents for FlexANI and 0.9 cents for interest payable on account of regularly delayed payments, and then multiplying the resulting 22.9 cent rate by a revised estimate of 148 compensable calls per- phone per- month. 20 The Commission reserved resolution of how payment could be allocated to carriers pending receipt of further information. 21 Parties filed petitions for reconsideration of the decisions reached in the Fourth Reconsideration Order. Discussion 10. Parties have raised a number of questions regarding the calculation and resulting amount of per- phone compensation, as well as the mechanics of rendering payment, in petitions for reconsideration of the Third Report and Order and the Fourth Reconsideration Order. Thus, even if we resolved the issues remanded by the D. C. Circuit, we would be unable to provide any sort of finality to the industry unless we also resolved these other pending issues. By resolving all of these issues in a single comprehensive order, we provide this finality and create the 14 Illinois, 117 F. 3d at 565. 15 Second Report and Order, 13 FCC Rcd at 1830, ¶ 121, 1845, ¶ 165. 16 MCI, 143 F. 3d at 606, 609. 17 American, 215 F. 3d at 58. 18 Third Report and Order, 14 FCC Rcd at 2635. 19 The Colorado Payphone Association Petition for Partial Reconsideration (CPA Petition) at 19- 25 (Apr. 21, 1999); American Public Communications Council (APCC) Comments at 2- 13 (Oct. 20, 2000); Letter from Robert F. Aldrich, Counsel for APCC, to Marlene H. Dortch, Secretary, FCC at 2- 3 (May 23, 2002). 20 Fourth Reconsideration Order, 17 FCC Rcd at 2022- 26, ¶¶ 5- 14. 21 Id. at 2035 ¶ 39. 5 Federal Communications Commission FCC 02- 292 6 preconditions necessary for carriers to render compensation to PSPs that have been underpaid, and for PSP in turn to provide compensation to carriers that have overpaid. 11. First, we dispose of a number of pending petitions for reconsideration of decisions that are directly relevant to establishing a fair per- phone compensation rate. Specifically, we (1) deny those petitions that ask us to change the per- call compensation rate and the average number of subscriber toll- free and access code calls, (2) deny the Regional Bell Operating Company (“ RBOC”) Coalition petition asking us to include 1+ calls as compensable calls, (3) deny the Colorado Payphone Association’s (“ CPA’s”) petition asking us to reconsider the 24 cent per- call compensation rate, (4) reconsider our decision regarding the removal of the interest rate component from the per- call compensation rate for the purpose of calculating compensation owed for the Interim and Intermediate Periods and (5) recalculate the per- call compensation rate for purposes of calculating per- phone compensation for the Interim Period and the Intermediate Period. 12. Second, having disposed of pending questions regarding the underlying compensation rate, we set forth a methodology for allocating per- phone compensation among carriers, and thus complete the work we started in the Fourth Reconsideration Order. In doing so, we also explicitly deny petitions for reconsideration asking us to establish alternative ways of calculating compensation for the Interim and Intermediate Periods. 13. Third, having established a mechanism for allocating fair per- phone compensation, we dispose of issues raised in petitions for reconsideration that complicate the payment of such compensation for the Interim and Intermediate Periods. We affirm that, in the First Report and Order, the Commission terminated its earlier proceedings related to whether compensation should be paid under TOCSIA. 22 Accordingly, as a matter of law, there is no lingering obligation on this Commission to allocate some additional amount of compensation for 1992 to 1996 (the period during which TOCSIA predated section 276). We also affirm our decision in the Third Report and Order that PSPs must refund the difference between payments they received during the Intermediate Period at the 28.4 cent compensation rate and payments recalculated at the 23.8 cent rate. 14. Fourth, we dispose of several issues raised in petitions for reconsideration related to mechanisms for rendering compensation and refunds owed. We reaffirm our decision, made first in the Third Report and Order and affirmed in the Fourth Reconsideration Order, that payments, refunds and any adjustments shall only be made between carriers and PSPs, and we decline to adopt an alternative method proposed by APCC that would require carriers to balance payments against each other. We affirm our decision in the Third Report and Order that refunds for overpayments are payable by PSPs first through an offset against amounts owed for the Interim and Intermediate Periods. We also clarify the process by which such offsets may be made and also the process which may be used, in the absence of any such offset or if such offset proves insufficient, to allow carriers to offset against future payments to PSPs. We also deny petitions for reconsideration of our decision in the Fourth Reconsideration Order to apply the IRS- prescribed interest rate for payments of compensation and refunds for the Interim and Intermediate Periods. Finally, in response to WorldCom’s petition for clarification of certain issues related to compensation for inmate calls, we note that the Fourth Reconsideration Order was sufficiently clear and limited so as to address WorldCom’s apparent concern. 22 First Report and Order, 11 FCC Rcd at 20546, ¶ 9. 6 Federal Communications Commission FCC 02- 292 7 15. Fifth, having disposed of all issues necessary to resolve payment of per- phone compensation for the Interim and Intermediate Periods, 23 we dispose of three remaining issues. As required by the D. C. Circuit’s remand of the First Report and Order, we allow LECs to use net book value when valuing payphone assets transferred by LECs to a separate affiliate or operating division. We also deny the petition for reconsideration by CPA asking us to require carriers to implement targeted call blocking. Finally, we establish that this Order will be effective 30 days after it is published in the Federal Register. Rate Reconsiderations Reconsideration of Number of Calls 16. In the Fourth Reconsideration Order, based on additional data submitted to us by commenters, the Commission altered the calculation of per- phone compensation for the Interim Period by increasing the estimated number of compensable calls (access code and subscriber toll-free calls) placed from the average payphone from 131 to 148. 24 In their reconsideration petitions, Sprint and WorldCom argue that per- phone compensation should be based on the 131 monthly compensable calls estimated by the Commission in 1996. 25 WorldCom further argues that, for periods beyond the Interim Period, we should reduce the monthly estimate by a set factor. 26 We disagree with these arguments and deny the petitions accordingly. 17. As an initial matter, we agree with the RBOC Coalition that retaining the 131 call estimate was evaluated and rejected by the Commission in the Fourth Reconsideration Order. 27 The primary reason we did so was because the Commission had available to it more reliable data 23 We note that APCC, Sprint Corporation, MCI and Frontier Corporation filed petitions for reconsideration and review of a Bureau- level decision and a Division- level decision, each related to per- phone compensation for the Intermediate Period. See Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96- 128, Memorandum Opinion & Order, 13 FCC Rcd 10893 (Com. Car. Bur. 1998); Order, 13 FCC Rcd 7303 (Enf. Div. 1998). These petitions attack various aspects of the waiver process by which per- phone compensation was paid during the Intermediate Period, variously arguing that the formula used to calculate call volumes systematically undercompensated independent PSPs and also that the Bureau could not, consistent with Illinois, limit such compensation to only a few IXCs. To the extent that the Fourth Reconsideration Order and this Order now establish the appropriate methodology for calculating and apportioning per- phone compensation for the Interim and Intermediate Periods, and allocate the responsibility for per- phone compensation to as large a group of carriers as possible, given available data, the questions raised in these petitions are mooted and we dismiss them accordingly. 24 Fourth Reconsideration Order, 17 FCC Rcd at 2024- 25, ¶¶ 11- 13. 25 WorldCom Inc. Petition for Reconsideration at 2- 3; Sprint Corporation Petition for Reconsideration at 9- 11 (April 3, 2002). If the Commission used the lower estimate of 131 calls, together with the 23.8 cent rate adopted in this Order, the per- phone per- month compensation rate would be reduced from the $35.224 (23.8 cents X 148 calls per- month) adopted in this Order to $31.178 (23.8 cents X 131 calls per- month). 26 WorldCom Petition for Reconsideration at 3. 27 RBOC Payphone Coalition Comments on Petition for Reconsideration (RBOC Coalition Comments) at 13 (May 1, 2002). 7 Federal Communications Commission FCC 02- 292 8 than was originally available to the Commission when it first adopted the 131 call estimate in 1996. The 131 call estimate used in the First Report and Order was based on data compiled over a very short time frame (one to three months) during a period prior to the Interim Period. 28 By contrast, the estimates relied upon in the Fourth Reconsideration Order were based on data from time periods of up to one year and reflects actual usage during the Interim Period, the key time frame at issue here. None of the commenters provides us any persuasive reason why, assuming we otherwise use the same methodology as we used in the First Report and Order, it is unreasonable for us to use more reliable data in order to better ensure that PSPs receive fair per-phone compensation. 18. Sprint argues that we should revisit the First Report and Order’s methodology for determining the estimated monthly call volume, as it believes taking a straight average of the data is incorrect and the data needs to be weighted. 29 The Commission is not, however, obligated to now revisit this methodology. While the D. C. Circuit did reverse the First Report and Order’s methodology for allocating per- phone compensation among carriers, and also rejected the Commission’s limit of the obligation to carriers with more than $100 million in toll revenues, 30 it did not disturb the Commission’s methodology for determining the monthly estimate of calls. The Fourth Report and Order does nothing more than apply this same methodology again with benefit of a larger, more reliable dataset. Given that we have now considered and applied this methodology twice, petitioners’ arguments ask us to revisit, a third time, this same methodology, and we decline to do so. 19. Even if we were obligated to entertain Sprint’s arguments, we would affirm that the methodology is reasonable. Although Sprint makes various arguments that the underlying call volumes were unreliable, we agree with APCC and the RBOC Coalition that the call volume data used was “fairly representative of the average payphone” and “the most accurate available indication of average monthly dial- around call volumes at independent payphones.” 31 As we noted above, the data used was certainly more reliable than the data used in the First Report and Order. Moreover, we would emphasize the fact that this was the most accurate available data: while Sprint has been highly critical of estimates supplied by others in this proceeding, it never availed itself of the substantial experience it has providing payphone service through its LEC operations at various locations throughout the country and failed to submit any payphone call estimates of its own in this proceeding. Nor has any other party attempted to provide data that even purports to represent an accurate estimate of monthly call volumes from a broadly representative sample of payphones. 20. Furthermore, we disagree with Sprint that our use of a straight as opposed to weighted average is somehow fatally flawed. The data submitted by commenters represents both independent and RBOC payphones, with the RBOCs submitting data from a substantially larger 28 As reported in the First Report and Order, estimates of 129, 130, 124, 140 and 132 were added, and then divided by 5, to derive a simple average of 131. First Report and Order, 11 FCC Rcd at 20603- 04. 29 See WorldCom Inc. Petition for Reconsideration at 2; Sprint Corporation Petition for Reconsideration at 3. 30 Illinois, 117 F. 3d at 564- 65. 31 See RBOC Coalition Comments at 13; Letter from Robert F. Aldrich, Counsel for APCC, to Magalie Roman Salas, Secretary, FCC, at 1 ( Mar. 26 1998). 8 Federal Communications Commission FCC 02- 292 9 number of payphones. As we explain in further detail below, 32 however, during the periods in question RBOC payphones were predominantly “dumb” payphones deployed in lower volume areas, while independent PSPs were predominantly “smart” payphones deployed in higher volume areas. Thus, to the extent a weighted average would give substantially more weight to the RBOC estimates, it would underestimate the volumes for independent PSPs. 33 Accordingly, it is reasonable for us to continue to use a straight average in order to give equal weight and credence to all of the data submitted. This is particularly the case where, as we noted in the Fourth Reconsideration Order, the data fell within a relatively small range. 21. We note that Sprint’s argument that we now use a weighted average conflicts with its request we use the 131 call estimate. As we explained above, this estimate was also based on a straight average, but Sprint fails to explain why we should reject a more reliable dataset in favor of a less reliable dataset, but use the same methodology anyway. This contradiction in Sprint’s arguments only highlights the fact that while Sprint has explored every argument possible to undermine the Commission’s chosen approach for estimating monthly call volumes, it has failed to provide any more reasonable way of estimating monthly call volumes or otherwise providing for per- phone per- month compensation. 22. We also disagree with WorldCom that we must adopt a factor that would account for a decline in calls for periods beyond the Intermediate Period. We agree with the RBOC Coalition that WorldCom has not provided evidence of any such decline that would allow us to determine some reasonable factor, and the record in this proceeding does show that, at least for the Intermediate Period, per- phone call volumes may have actually increased. 34 Moreover, for both the Intermediate Period and after the Intermediate Period, while it is entirely possible that monthly call volumes per payphone have declined, WorldCom has not provided us with sufficient argument or data to create anything approaching a reasonable factor: in its petition, it simply asks for some “annual percent decline factor,” and provides an example of 10%, then 32 See infra Section III. B. 1. a. 33 We also note separately that additional data provided recently by the RBOCs further supports our use of an estimate of 148 calls. Data provided by the RBOCs for 1997 in response to the Commission’s request, see infra Section III. B. 1. a, shows that RBOC payphones could have averaged over 188 calls per- month, if we assume (as did the RBOCs for the purposes of the submission) that completed calls equaled calls with hold times of 40 seconds or more. This amount of 188 calls per- month is derived by taking the total of all calls reported for the fourth quarter of 1997 by the RBOCs, 782 million, and dividing by the number of RBOC payphones in service at the end of 1997, 1.4 million. See RBOC Coalition Comments, Andersen Report at 10 (filed July 13, 1998). (These numbers exclude call data submitted for GTE, as this data was based on call attempts regardless of call length.) From this calculation, each RBOC payphone would have had 565 calls over the fourth quarter of 1997, or 188 calls per- month. Obviously, this estimate, if used in our methodology or the weighted average advocated by Sprint, would increase the estimated number of calls per- month. We do not rely on this calculation here, as we have not endorsed the use of the 40 second hold time as a proxy for completed calls, the data is over a shorter period of time than the estimates used in our methodology, and we otherwise decline to reconsider our reasonable methodology for determining a monthly per- call estimate. We do, however, draw additional comfort from this analysis that our use of the 148 call volume estimate is reasonable and should not be disturbed in favor of the questionable estimate of 142.6 calls proposed by Sprint. 34 RBOC Coalition Reply at 14- 15. 9 Federal Communications Commission FCC 02- 292 10 subsequently alleges in its comments that the decline is on the order of 2.7% a year. 35 We could not reasonably adopt some sort of decline factor on this record and will not do so at this time. 1+ Calls 23. In its petition for reconsideration of the Fourth Reconsideration Order, the RBOC Coalition asks that the Commission require carriers to compensate PSPs for 1+ calls made during the Interim Period for which the PSPs were “not otherwise compensated.” 36 The RBOC Coalition states that its desired result follows from the Enforcement Bureau’s decision in Illinois Bell v. One Call Communications, and apparently asks us to add some amount of additional compensation to the per- phone compensation we require in this Order. We decline to grant this broad request in this Order. The Fourth Reconsideration Order did not address this matter, and as such it is not properly before us on petition for reconsideration of that order. Aside from these procedural defects, however, the RBOC Coalition’s request, which is made in three brief sentences in an 8- page petition, simply does not provide us with enough detail or data to justify the imposition of a potentially significant additional compensation requirement at this time: it provides us with neither an estimate of the number of calls at issue nor any explanation as to when a PSP can appropriately consider a call “otherwise compensated.” Accordingly, it would be both inappropriate and imprudent to grant the RBOC Coalition’s request for a general increase in the amount of compensation to be paid. 24. We do, however, believe it is necessary to further explain the operation of Illinois Bell. In Illinois Bell, the Enforcement Bureau held that 1+ calls are not exempt from the Commission’s per- call compensation requirements if PSPs do not otherwise receive compensation for these calls. 37 While the carrier owing compensation in the case argued that 1+ calls were not typically compensated through per- call dial around compensation, the Enforcement Bureau reasoned that payphone revenue can derive from a variety of sources, including coins “deposited into the payphone, through commission payments on operator service calls, or from compensation mandated by the FCC or the states.” 38 The Enforcement Bureau noted that this Commission’s orders limit statutorily- mandated, per- call compensation to completed calls that do not produce revenue from other sources, such as access code calls and toll- free number calls, but this limitation did not mean that PSPs were not entitled to per- call compensation for other types of non- revenue- generating calls. Thus, with respect to 1+ calls, the Enforcement Bureau concluded that, because the complainants had not, in fact, received coin revenue for the 1+ calls carried on the carrier’s network, the PSPs were owed compensation for the otherwise uncompensated 1+ calls, given that the Commission’s orders did not purport to 35 WorldCom, Inc. Petition for Reconsideration at 2; WorldCom, Inc. Comments on Petition for Clarification and Reconsideration at 1- 2 (May 15, 2002). 36 RBOC Coalition Comments at 7. “[ A] 1+ call is an interLATA toll call originating at a payphone and carried by an [IXC], where the IXC’s operator or its automated rating system directs that calling party to deposit coins for the call.” Illinois Bell v. One Call Communications, 16 FCC Rcd 16697 (Enf. Bur. 2001) (Illinois Bell). 37 Illinois Bell, 16 FCC Rcd at 16701, § 9. 38 Id. (quoting Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96- 128, Notice of Proposed Rulemaking, 11 FCC Rcd 6716, 6725, ¶ 15 (1996) (Payphone NPRM)). 10 Federal Communications Commission FCC 02- 292 11 supercede the explicit requirements of section 276. 39 25. While we deny the RBOC Coalition’s petition on this issue, we nevertheless affirm that the Enforcement Bureau’s reading of Illinois Bell is an appropriate reading of the requirements of section 276. Accordingly, if a PSP demonstrates specific numbers of uncompensated 1+ calls, application of section 276 may well result in additional compensation. Thus, although we do not grant the RBOC Coalition’s general request to increase the call estimates, we do not preclude PSPs from seeking compensation for uncompensated 1+ calls on a case- by- case basis, consistent with the principles expressed in Illinois Bell and our other orders implementing section 276. Reconsideration of the 24 Cent Rate 26. We deny CPA’s petition for reconsideration of the 24 cent per- call compensation rate established by the Third Report and Order. CPA requests reconsideration of the 23.8 cent rates because it contends that the Commission: (1) inappropriately used a “stripped down” coinless phone model for the purpose of calculating payphone capital costs; (2) inappropriately used 11.25% as the appropriate interest rate; and (3) did not correctly calculate maintenance costs. 40 We deny CPA’s petition with respect to each of these factors. 27. As an initial matter, we note that the conclusions relevant to the first two factors were first raised, discussed, and decided in the Second Report and Order -- we decided that each of these costs could be appropriately considered when reducing the coin rate to obtain a reasonable coinless rate. 41 They were thus not only first decided in 1997, they were subject to petitions for reconsideration and comments filed after remand of that Order. CPA essentially argues that application of these factors in the “bottom up” calculation we established in the Third Report and Order gave CPA its first opportunity to ask for reconsideration of these factors. 42 CPA has not, however, provided us any reason to reverse either of our decisions on these factors, after considering their substance for the third time. CPA’s arguments have already been considered and rejected or they rely entirely on evidence available to it before the release of the Third Report and Order. With regard to the payphone model used for calculating capital costs, CPA only stated that it “disagreed” with our conclusion and reiterated arguments made by the RBOC Coalition that were rejected in the Third Report and Order. 43 28. With regard to using 11.25% as the appropriate interest rate for calculating an appropriate per- call factor, CPA argues that this rate of return drastically understates the cost of capital for a typical PSP, and that the appropriate cost of capital might be as high as 18%. 44 CPA argued in its reply that “[ b] ecause the cost of capital was used to make a subtractive adjustment to the local coin rate [of $0.35 in the Second Report and Order], the use of the cost of capital actually worked in the PSPs’ favor. PSPs cannot be faulted for failing to seek review of a 39 Id. 40 CPA Petition at 3. 41 See Second Report and Order, 13 FCC Rcd at 1790, ¶ 26. 42 See, e. g., CPA Petition at 4- 5. 43 Even the RBOC Coalition and GTE, who support CPA’s petition, note that CPA has made arguments that are substantially the same as arguments already made by the RBOC Coalition. RBOC Coalition Comments at 5; see also Cable & Wireless Reply at 3. 44 CPA Petition at 13- 15. 11 Federal Communications Commission FCC 02- 292 12 determination that did not ‘aggrieve’ them.” Accordingly, “it is only with the adopting of [the cost- of- service] methodology in the Third [Report and Order] that CPA and other PSPs have become ‘aggrieved’ by the Commission’s use of an inadequate rate of return.” 45 CPA may be correct that it was not “aggrieved” when we applied the 11.25% rate in the Second Report and Order, but it fails to provide us any facts that could not also have been submitted while we were considering the Third Report and Order. Indeed, APCC made these very arguments while the Commission was considering the Second Report and Order, and after remand of that order again raised them as the Commission was considering the Third Report and Order. 46 CPA’s arguments thus constitute nothing more than a third attempt to prevail on this argument, and provide us no persuasive reason why we should disturb our earlier reasoning that, for the purpose of calculating an appropriate interest component for the per- call rate, the Commission should use a rate that corresponds to weighted average of debt and equity costs for the vast majority of payphones. 47 29. With regard to maintenance costs, the Third Report and Order took a weighted average cost for RBOC and non- RBOC payphone maintenance costs, and reduced this average by 38% to account for maintenance visits due to coin collection. 48 CPA argues that the exclusion should have been 29% because the data we relied on shows that 9% of the costs were due to combined coin collection and maintenance visits. 49 CPA’s argument rests on the assumption that every combined coin collection and maintenance visit should be included in per- call compensation because every “visit would have been made regardless of whether coins were also collected.” 50 Thus, CPA demands that the entire 9% of combined visits be excluded as a whole. We are not persuaded that we should exclude this entire amount. The 38% exclusion was referenced in the Second Report and Order, 51 and the proper calculation of maintenance costs was again subject to comment and reply after remand of that Order. CPA first raised objections to this exclusion only on reconsideration of the Third Report and Order, and based these objections on an analysis of the data that plainly could have been applied during the pendency of that order. It would thus be inappropriate for us to reconsider our decision based on CPA’s late analysis. Even if it were appropriate for us to consider CPA’s analysis, CPA has not shown that our conclusion was clearly erroneous or an unreasonable way of estimating maintenance costs, or provided us any more reasonable way of doing so. As AT& T and Sprint point out, many of those visits where maintenance was performed, along with coin collections, could have started out as coin collection only visits, and the collector, spotting some minor trouble, performed incidental repairs. 52 We thus decline to reexamine the maintenance factor. 45 Id. at 5- 6. 46 See Second Report and Order, 13 FCC Rcd at 1806, ¶ 60; APCC Reply Comments (Sept. 10, 1997) at 15 (“ rates of 15%- 18% are more realistic”); see also Sprint Corporation Opposition to Petition for Reconsideration at 3- 4. 47 Second Report and Order, 13 FCC Rcd at 1806, ¶ 60. 48 Third Report and Order, 14 FCC Rcd at 2625- 26, ¶¶ 175- 77. 49 CPA Petition at 15- 16. 50 Id. at 7. 51 Second Report and Order, 13 FCC Rcd at 1815, ¶ 83. 52 AT& T Opposition to Petition for Reconsideration (July 7, 1999) at 4; Sprint Opposition to Petition for Reconsideration (July 7, 1999) at 5. Moreover, AT& T and Sprint also argue that even though we reduced maintenance costs to remove coin collection, they should have been 12 Federal Communications Commission FCC 02- 292 13 Reconsideration of Interest Component 30. When the Commission established a per- call compensation rate of 24 cents in the Third Report and Order, it calculated the marginal costs of providing payphone service, and included a cost component of 0.9 cents to quantify the time value of money lost during the typical four- month delay in payment to PSPs. 53 When the Commission established a per- phone per- month compensation rate in the Fourth Reconsideration Order, the Commission calculated the per- month rate by first deducting this cost component of 0.9 cents from the 24 cent rate. 54 In its petition for reconsideration of the Fourth Reconsideration Order, APCC argues that, for purposes of calculating per- phone compensation, we should not have removed the 0.9 cent payment delay cost component from the per- call compensation rate calculated by the Third Report and Order. APCC argues that we should have left the 0.9 cent component in the rate because the Third Report and Order did not specify that this component would be removed. APCC also argues that during the Interim Period and other periods payment was made on a quarterly basis, and removal of the 0.9 cents undercompensates and otherwise results in inequity to PSPs. AT& T and WorldCom oppose APCC’s petition for reconsideration because they allege applying the IRS- prescribed interest rate to late payments, as we required in the Fourth Reconsideration Order, adequately compensates PSPs for any payment delays, including the four- month delay due to the traditional quarterly billing cycle of payphone compensation. 31. Upon reconsideration of this issue, we agree with APCC and restore the 0.9 cent component to compensation paid for the Interim and Intermediate Periods. As an initial matter, the text of the Third Report and Order supports APCC’s interpretation that we intended to address interest because “PSPs [had] not received full compensation for [the Interim] period,” 55 and thus that we intended only to resolve the rate applied to late payments but not reduce the per-call compensation rate for purposes of calculating Interim Period compensation. Furthermore, while the Fourth Reconsideration Order sought to, and did, clarify the interest rate that would be applied to late payments, it was unclear as to the date on which the IRS- prescribed interest rate would begin to accrue. Accordingly, confusion as to when to begin applying this rate led to the disputes in this proceeding – PSPs argued that they are ultimately undercompensated, while carriers argued that PSPs are placed in a favored position. The only way to avoid these types of disputes is to set forth clear rules as to when the IRS- prescribed interest rate will begin to accrue, and adjust the interest component of the per- call, and thus per- phone, compensation rate accordingly. 32. As we explain in further detail below in affirming our decision to use the IRS-prescribed interest rate for late payments, 56 the IRS- prescribed interest rate will accrue when reduced even further as coin payphones are generally more expensive to maintain than coinless payphones. AT& T Opposition at 5; Sprint Opposition at 5- 6. 53 For example, a carrier is usually billed in April for payphone calls originating during January, February and March (the first quarter of the year), and the carrier issues a check to the PSP by July 1 (the first day of the third quarter). 54 This deduction impacts the resulting per- phone per- month compensation rate as follows. If the interest rate component is deducted, the resulting per- phone per- month compensation rate is $33.892, as we held in the Fourth Reconsideration Order (22.9 cents X 148 calls per- month). If the interest rate component is not deducted, the resulting per- phone per- month compensation rate is $35.224, as we calculate below (23. 8 cents X 148 calls per- month). 55 Third Report and Order, 14 FCC Rcd at 2636 n. 427. 56 See infra at III. D. 2. 13 Federal Communications Commission FCC 02- 292 14 payment would have been paid according to the quarterly system established by industry consensus and endorsed by this Commission in the First Report and Order. 57 Accordingly, it is necessary to reinstate the 0.9 cent interest rate component to ensure that the per- call rate, for the purpose of calculating per- phone compensation during the Interim and Intermediate Periods, continues to reflect an assumed average delay in the rendering of payphone compensation. We thus grant APCC’s petition for reconsideration on this issue. 58 Revised Compensation Calculation 33. As we described above, In the Fourth Reconsideration Order, we determined that the per- phone per- month compensation rate would be $33.892, calculated by taking the per- call compensation rate of 24 cents set in the Third Report and Order, deducting cost components of 0.2 cents for FlexANI and 0.9 cents for interest payable on account of regularly delayed payments, and then multiplying the resulting 22.9 cent rate by a revised estimate of 148 compensable calls per- phone per- month. In this Order, however, we have reinstated the 0.9 cent interest rate component in response to APCC’s petition for reconsideration, and otherwise denied petitions for reconsideration that would have impacted the per- call rate or the estimated number of calls per- month. Accordingly, we now calculate a per- phone compensation rate based on an assumed per- call rate of 23.8 cents, which represents the 24 cent rate calculated in the Third Report and Order reduced by $0.002 for the FlexANI amount that was not payable during the Interim and Intermediate Periods. 59 The per- call rate of 23.8 cents multiplied by the 148 calls per- month affirmed above equals a per- phone per- month compensation rate for the Interim and Intermediate Periods of $35.224. The compensation obligations as shown at Appendices A, B and C are calculated using this increased amount. Allocation of Per- Phone Compensation Rate Allocation Methodology Background and Discussion of Alternative Methodologies 34. The First Report and Order established that, during the Interim Period, compensation would not be paid on a per- call basis, but would instead be paid on a per- phone basis. 60 The Commission made IXCs collectively liable for the then applicable per- phone per- 57 First Report and Order, 11 FCC Rcd at 20598- 99. 58 Granting APCC’s Petition for Reconsideration on this issue effectively moots Sprint’s petition that we clarify that the 22.9 cent rate applied to all true- ups for the Intermediate Period, whether a carrier paid on a per- phone or per- call basis. See Sprint Corporation Petition for Reconsideration at 16. It also moots WorldCom Inc. ’s Petition that we clarify that the rate of 22.9 cents per compensable call applies to payments for payphones that do not transmit payphone- specific coding digits, even if the carrier has compensated on a per- call, rather than per- payphone basis for those payphones. See WorldCom Inc. Petition for Reconsideration at 5- 6. As set forth in this Order, the same 23.8 cent rate that applied to per- call compensation during the Intermediate Period applies to determine per- phone compensation, and as set forth supra Section III. D. 2, interest will accrue from the point at which payments normally would have been considered late. 59 See Third Report and Order, 14 FCC Rcd at 2023, ¶¶ 7- 8. 60 First Report and Order, 11 FCC Rcd at 20601- 04, ¶¶ 119- 26. 14 Federal Communications Commission FCC 02- 292 15 month payment, 61 which required some method of allocating the payment burden among the various companies. The Commission also used annual toll revenue as a basis for allocation of payment responsibility between the carriers. Each carrier with toll revenue exceeding $100 million was responsible for its pro- rata share, based on the ratio of its toll revenue to that of the industry as a whole. In Illinois, the D. C. Circuit rejected the Commission’s allocation methodology, finding no logical nexus between a carrier's annual toll revenue and its share of payphone- originated calls. The court also found it arbitrary to require Interim Period compensation only from carriers with annual toll revenue over $100 million. 62 We must now implement a new allocation methodology for per- phone compensation. 35. In addition to the initial Notice of Proposed Rulemaking, 63 two public notices in this proceeding solicited comments on an appropriate methodology. 64 We received numerous proposals, both in response to these notices and also as part of various parties’ petitions for reconsiderations of the Fourth Reconsideration Order. Below, we describe some of these proposed methodologies. 36. AT& T proposes to allocate responsibility for per- phone compensation by using each carrier's proportionate share of the 1997 toll- free services market. Other carriers demonstrate that this approach is infeasible. Sprint, for example, argues that this approach suffers from the very flaw identified in the original methodology by the D. C. Circuit in Illinois: there is no necessary nexus between the toll- free market and the payphone market. AT& T’s proposal also suffers from data availability problems. AT& T claims that data on each carrier's toll- free traffic is available from the industry SMS/ 800 database, but Sprint argues that carriers do not usually report separately toll- free service revenues. Sprint explains that there is no publicly reported carrier revenue data that can serve as a surrogate for the number of toll- free calls handled by each carrier. Moreover, WorldCom asserts that carriers do not report toll- free revenues to the Commission and do not release such revenue information publicly. 65 Significantly, WorldCom states that it lacks the ability to determine billed revenues for its 1997 toll- free service. 66 37. WorldCom proposes that the Commission allocate responsibility for per- phone compensation by subtracting private line revenues reported on the Universal Service Worksheet from reported toll service revenues. 67 We agree with Sprint, however, that not all carriers participate equally in the market for commercial toll- free calls or the market for dial- around operator service calls. 68 Sprint asserts that the Commission's allocation should reflect operational 61 As noted above, the per- phone per- month compensation rate was $45.85, but under this Order has been changed to $35.224. 62 Illinois, 117 F. 3d at 564- 65. 63 See Payphone NPRM, 11 FCC Rcd 6716 (1996). 64 Pleading Cycle Established for Comment on Remand Issues in the Payphone Proceeding, CC Docket No. 96- 128, Public Notice, 13 FCC Rcd 4801 (1997) ( Remand Public Notice); RBOC/ GTE Payphone Coalition Files Proposal, CC Docket No. 96- 128, Public Notice, 15 FCC Rcd 18122 (2000) (2000 Public Notice). 65 See Reply Comments of WorldCom, Inc. at 2 (Oct. 30, 2000). 66 Id. at 3. 67 Id. at 4. 68 See Reply Comments of Sprint Corporation at 4 (Oct. 31, 2000). 15 Federal Communications Commission FCC 02- 292 16 characteristics of particular carriers that heavily market dial- around operator services widely-used from payphones, such as 1- 800- COLLECT. 69 38. MCI Telecommunications Corporation (MCI) proposed an equal allocation for all carriers with annual toll revenues below $100 million, determined by taking their total percentage of toll revenues, applying this percentage to Interim Period compensation owed, and dividing responsibility for paying that amount evenly among all of the carriers. 70 All such toll-revenue based approaches, however, lack the nexus required by the Illinois decision to the number of compensable dial around calls carried. 71 39. MIDCOM Communications suggests that the Commission receive reports from carriers and from PSPs of the total amount of toll- free and access code calls received and originated, and then undertake to itself reconcile this data and determine the amount owed to each PSP. 72 Such an undertaking would not be possible given the sheer size of such a project. We are also persuaded that not all of the requisite data are available. 40. APCC proposes in essence that the Commission not conduct an allocation at all, but that it simply deem all payments that are owed to PSPs to be roughly equal to the payments that may be owed from PSPs and terminate all liabilities simultaneously. 73 Even assuming we had reliable record evidence to allow us to make such a finding, doing so would fail to respond to the D. C. Circuit’s remand in Illinois, which directs us to re- examine how to allocate the responsibility to pay per- phone compensation among carriers. APCC fails to provide us any persuasive reason how we could do so without acting in an arbitrary and capricious fashion, particularly in light of the fact that we have repeatedly held, and hold again in this Order, 74 that payment obligations runs between individual carriers and individual PSPs and does not allow APCC’s industry- wide solutions. We would also note that APCC’s proposal only concerns independent PSPs, and even if we were to somehow be able to distinguish independent PSPs from ILEC- owned PSPs, we would still be left with the need to allocate payment obligations for ILEC- owned payphones. Thus, APCC’s proposal is, at most a partial solution, and one that we cannot reasonably adopt. 69 Id. at 4- 5. 70 MCI Comments at 6- 7 (Aug. 26, 1997). 71 See Comments of Teleleasing Enterprises at 11 (Aug. 26, 1997) (an allocation “based on toll revenues is flawed because the total toll revenues do not appear to bear much relationship to the total number of [payphone] calls being routed to a particular carrier”); Comments of Cable & Wireless, Inc. at 16 (Aug. 26, 1997) (“ Allocating compensation based on total toll revenues without any concomitant review of the specific business objectives of the carrier is simply not rational."); Comments of General Communication at 3- 4 (Aug. 26, 1997) (" Total toll revenues of a carrier does not necessarily correlate to the number of dial around calls at payphones."). 72 Comments of MIDCOM Communications at 10 (Aug. 26, 1997). 73 See Letter from Robert F. Aldrich, counsel for APCC, to Marlene H. Dortch, Secretary, FCC, CC Docket No. 96- 128 (May 23, 2002). 74 See infra Section III. D. 1. a. 16 Federal Communications Commission FCC 02- 292 17 41. Sprint proposed recently to base Interim Period compensation on a self-determination by each IXC owing compensation. 75 Under Sprint’s proposal, each IXC would independently assess its own data to ascertain the number of compensable access code and subscriber toll- free calls originating at payphones that it handled during a 1998 sample period. There would thus be no “allocation” of the per- phone amount, but a series of independent estimates of compensation liability by each IXC. 76 Generally, Sprint argues that this is a better approach than the methodology adopted under the First Report and Order because it is based on what Sprint characterizes as “actual” data. 77 We decline to accept Sprint’s approach for a number of reasons 42. First, Sprint’s proposal does not adequately account for a significant portion of the payphones deployed and would result in undercompensation for those payphones it excludes. As discussed in numerous comments and FlexANI waiver requests in this proceeding, an IXC can identify a call as originating from a payphone only if it receives coding digits from the LEC’s switch that specifically identify the originating line as a payphone line. Payphones that are hardcoded at the LEC’s switch, also known as “dumb payphones,” are capable of passing payphone- specific coding digits to the IXC. At the beginning of the 1998 sample period, however, approximately 40% of all payphones were “smart payphones,” which are not hardcoded at the switch. 78 Thus, these payphones do not pass payphone- specific coding digits to IXCs. While the LEC could correct this by installing a specific software package known as FlexANI on its switch, 79 many LECs had not done so during the sample period proposed by Sprint. Thus, during much of the sample period proposed by Sprint, the IXC’s would lack any “actual” data for smart payphones and would necessarily base their determination of compensation owed entirely on data received from dumb payphones. We could correct this flaw easily if we could assume that the volumes of calls originated from smart payphones were the same as volumes originated from dumb payphones, because we could then apply the same volumes to the per- call compensation amount and provide compensation for both types of payphones. The assumption necessary to make this correction is contradicted by the record. The RBOC Coalition has explained that smart payphones were typically located in high- volume areas, while dumb payphones were typically located in low- volume areas. 80 Therefore, the net result of Sprint’s proposal would be to undercompensate payphones making up 40% of the market. 75 The RBOC Coalition has made a similar proposal to use actual data. See RBOC Coalition Comments at 35. We consider and dispose of this proposal for the same reasons as discussed with regard to the Sprint proposal. 76 Letter of John E. Benedict, Sprint Corporation, to Marlene H. Dortch, Secretary, FCC, of June 25, 2002. 77 Sprint Corporation Comments at 13 (Aug. 26, 1997); Sprint Corporation Petition for Reconsideration at 3 (April 3, 2002). 78 See Bureau Coding Digit Waiver Order, 13 FCC Rcd at 5007. 79 Bureau Coding Digit Waiver Order, 13 FCC Rcd at 5010- 11. 80 See, e. g., RBOC Coalition Reply Comments at 7 (Jul. 15, 1996) (“ In those [RBOC] regions that use a mix of central- office- implemented (i. e., dumb) payphones and smart phones, the dumb phones tend to be placed in lower usage areas and therefore have much lower levels of toll free calls. Smart payphones are placed in high usage areas and have higher levels of 800 calls. The former are not a proper surrogate for the latter and would understate the number of 800 calls upon which per- call compensation must be paid.”). 17 Federal Communications Commission FCC 02- 292 18 43. Second, if, regardless of its flaws, we were to adopt Sprint’s proposal, this methodology would have a disproportionate impact on independent PSPs. Independent PSPs deployed smart payphones exclusively, and few if any were connected to LEC switches where FlexANI had been deployed. 81 Thus, even if Sprint’s methodology would result in some measure of “fair” compensation to the LECs that deployed dumb payphones, the same could not be said with regard to independent PSPs. 44. Third, even if we could somehow overcome the above flaws, evidence provided by Sprint itself shows that it would be virtually impossible to ensure that PSPs received any kind of compensation from resellers who carry payphone- originated calls. Sprint argues in its Petition for Reconsideration of the Fourth Reconsideration Order that the “actual” data Sprint has at its disposal clearly excludes any data that would allow PSPs to discover the identity of resellers that owe them per- phone compensation: “Sprint has no information with which to track resellers’ calls for the past period in question. Sprint took special care to preserve records for its own payphone compensation responsibilities, but it made no effort to gather records applicable to resellers’ obligations and had no reason to believe it ever had to do so.” 82 If we accept that Sprint does not have this data, then we are at a loss to figure out how PSPs might otherwise learn the identities of the resellers and other IXCs to whom Sprint may have handed calls. As discussed below, we grant Sprint’s Petition for Reconsideration of the Fourth Reconsideration Order regarding the obligation of resellers to pay per- phone compensation. Nevertheless, we do not believe it would be fair to adopt a methodology that would virtually assure that it would be impossible for PSPs to obtain the identities of, and thus per- phone compensation from, anyone but a relatively small number of facilities- based providers. 45. Fourth, some IXCs have advised us on the record that they failed to retain the payphone call data Sprint’s proposal would require, even for their own operations. 83 Thus, allowing per- phone compensation to be based on the data that any particular IXC chose to collect and retain would, most likely, again result in undercompensation of independent PSPs even if we could somehow correct for the disparities and gaps we have identified above. 46. Finally, there is no guarantee that the independent estimates of the various carriers will amount to the $35.224 we have found that each PSP is entitled to per- phone, particularly in light of the problems with data retention and obtaining data regarding resellers noted above. Given the economic incentives, carriers estimating their own liability may well underestimate the number of calls they handled. The more payphone call data collected and retained by any carrier would increase its liability and would place it a disadvantage in relation to other carriers that failed to collect or retain this information. In this respect, it is important to note that Sprint’s proposal does not provide any guidance as to how individual carriers would determine whether a call was “completed” and thus compensable. Thus, even if a carrier did have sufficient data to enable it to calculate compensation owed, Sprint’s “honor system” approach would allow carriers to understate calls completed, at worst exacerbating underrecovery by the PSPs and at best simply opening the way to further disputes over compensation for past periods. For all of these reasons, we are not inclined to adopt Sprint’s approach, given that it does not provide a 81 See Second Report and Order, 13 FCC Rcd at 1501- 2, ¶ 53. 82 Sprint Corporation Petition for Reconsideration at 14 (April 3, 2002). 83 ITC^ DeltaCom Petition for Reconsideration at 8- 9; WorldCom Inc. Reply Comments at 4 (Oct. 30, 2000). 18 Federal Communications Commission FCC 02- 292 19 reasonable way of ensuring fair compensation to PSPs, which is our statutory obligation under section 276. 47. Teleleasing Enterprises argues that a “fairer method of allocation would be to allocate the flat- rate Interim Period compensation based on the relative percentage of [payphone] calls.” 84 Cable & Wireless similarly argues that the Commission “must adopt a compensation plan that is apportioned on some factor which related to the number of payphone- originated calls received by the carrier,” 85 While neither company provides a substantive recommendation about how to achieve such a result, this approach would directly address the D. C. Circuit’s remand by establishing a clear nexus between the allocation and carrier responsibility, and would not suffer from the flaws of Sprint’s approach. Discussion 48. As the divergent proposals from interested parties make clear, there is no single answer to the allocation question. The best method would be to gather the actual data that would identify the total number of all compensable payphone calls handled by each carrier, but such data are not available, and given the technological limitations noted above likely never existed in the first place. The “perfect” allocation is thus impossible. We are thus forced to make a determination based on an approximation of the true data. We believe that actual data showing the routing of payphone calls from LEC switches to IXCs in time periods proximate to and consistent with the Interim Period and the Intermediate Period will allow us to construct an allocation that reasonably approximates the “true” allocation and will thus enable us to make a reasonable estimate of each carrier’s liability for payment. We have conducted such an analysis and have set forth the results, showing each carrier’s pro rata share of the per- phone payment, in a Table of Allocation located in Appendices A, B and C. In the succeeding paragraphs, we explain how we obtained and analyzed the data to generate the final result. 49. Commission Data Request. By letters dated December 20, 2001, the Common Carrier Bureau 86 requested that the four RBOCs submit quarterly data on the routing of payphone calls to IXCs or other carriers during 1997, 1998 and October 1, 2000 through September 30, 2001. These periods were selected because payphone compensation is typically paid, and calling data collected, on a quarterly basis, and these data periods closely corresponded with the Interim Period, the Intermediate Period, and the most recent data available for the period after the Intermediate Period. Specifically, the Interim Period began on November 7, 1996, and ended on October 6, 1997. Thus, data from 1997 would provide calling patterns from the first full quarter of the Interim Period through the last quarter of 1997, thus allowing us to take into account an entire year and control for any seasonal variations. The Intermediate Period began on October 7, 1997, included the entire calendar year of 1998, and ended on April 20, 1999. Thus, data from 1998 would provide an adequate sample period for the Intermediate Period because it would cover the majority of the Intermediate Period, and again the twelve- month period would be sufficient to reflect seasonal variations. For the post- Intermediate Period, it would have been necessary to wait until April 1, 2002 to obtain data for the entire calendar year of 2001, reconciled data on payphone calls originating in the fourth quarter of 2001 would only have been 84 Comments of Telaleasing Enterprise, Inc. at 11. 85 Comments of Cable & Wireless, Inc. at ii (Aug. 26, 1997). 86 This Bureau is now designated the Wireline Competition Bureau. 19 Federal Communications Commission FCC 02- 292 20 available on this date. Accordingly, the Bureau asked for the twelve month period beginning October 1, 2000 and ending on September 30, 2001. 50. Each of the RBOCs subsequently provided the Bureau with aggregate call data listing the next destination past the RBOC switch of payphone calls placed from their payphones during the relevant time periods. In other words, we received a list of each destination and the number of payphone calls sent to that destination. Depending on the company and the quarter, some of the destinations were listed by name (i. e., MCI) and some were listed by carrier identification code (“ CIC”), a four digit number that uniquely identifies the destination of the call. 87 51. The RBOC call data account for a total of nearly four billion payphone calls originating at more than 85 percent of the payphones in the United Sates, as of March 31, 1999. 88 Accordingly, we have obtained a statistically relevant sampling that should give an accurate picture of the routing of calls made from payphones. From that data set, we can aggregate the figures to determine the total number of payphone calls received by each carrier in any given quarter covered by the sampling as well as the total number of calls placed. From there, it is a simple exercise to calculate each carrier’s share of the total, and thus the proportion of the per-phone compensation that each carrier should rightfully bear. The resulting apportionment is directly tied to what we believe is a reliable estimate of the percentage of payphone calls received by each carrier. We describe below the methodology used to achieve our results. 52. As noted above, the RBOCs submitted quarterly data listing the number of calls placed to specified destinations. We combined the data from each RBOC as to each destination company. In addition, where the data were listed by CIC, and a destination carrier had multiple CICs, we added all of the numbers together for that particular carrier. As discussed above, we used the 1997 RBOC payphone call data for the Interim Period aggregations, the 1998 RBOC payphone call data for the Intermediate Period aggregations and the 2000- 2001 RBOC payphone call data for the Post- Intermediate Period aggregations. Once the basic aggregation was completed, however, we needed to adjust the data in various ways in order to obtain a reasonable allocation. 53. Non- carriers. Some of the data submitted includes payphone calls routed to destinations that were not IXCs or other carriers. For example, one entity to which calls were routed was the Legal Aid Society of Orange County; another was J. C. Penney. The data set 87 The RBOCs submitted the requested data during the first four months of 2002. Both the data and the Bureau’s letters requesting the data were made a part of the record in this proceeding and parties were given an opportunity to comment on them. SBC and Qwest requested confidential treatment for their submissions, which was granted on March 28, 2002. Implementation of Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96- 128, Protective Order, 17 FCC Rcd 5870 (Pricing Policy Div. 2002); Implementation of Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96- 128, Protective Order, 17 FCC Rcd 5877 (Pricing Policy Div. 2002). Under the terms of the protective orders, other parties could examine the data, subject to restrictions. 88 Because the RBOC data account for such a large percentage of payphones, we did not seek data from the 1300 non- BOC incumbent local exchange carriers. Moreover, the data set has great geographic diversity and includes both rural and urban areas. 20 Federal Communications Commission FCC 02- 292 21 included such data because entities with dedicated private line service may be assigned CICs even though they are not “communications carriers” and thus should not be responsible for payphone compensation. In those circumstances, it was not possible to identify the carrier that should have paid for the call, and we have removed those calls from the data set. We have attempted to weed out such instances, and have included in Appendix D a list of the non- carrier CIC holders. 89 The numbers involved do not have much effect on overall liability, however. We excluded 219,688 (out of nearly a billion) payphone calls in 1997, 284,972 (out of several billion) calls in 1998, and 67,022 (out of more than one billion) calls in 2001. 54. Carrier Classification. In the Fourth Reconsideration Order, we decided that the Commission's Carrier Locator Reports (“ CLRs”) should be used to classify a carrier for purposes of determining its duty to pay. 90 The data make clear, however, that calls are routed to more carriers than are listed in the CLRs. Carriers do not always serve a single role in the telecommunications industry. For example, Sprint is both an ILEC and an IXC; AT& T is an IXC and a CLEC; and Verizon is an ILEC, IXC and toll reseller. We agree with CompTel that "[ i] t is the act of carrying compensable calls, not the label the Commission places on a carrier, that determines whether a carrier owes compensation for payphone calls." 91 Section 276 makes no distinction among providers of telecommunications services for the purpose of providing compensation and neither will we. In light of the data we have received after releasing the Fourth Reconsideration Order, we have accordingly reconsidered our decision to use such reports to distinguish IXCs from resellers and have instead based the allocation without regard to whether a company considers itself to be an IXC, a reseller, or some other type of provider of telecommunications services. 55. LEC Payment Responsibility. In the First Report and Order, we decided that LECs must pay payphone compensation to the extent that they handle compensable payphone calls. 92 For LECs, this can happen in two ways. 93 The first instance is when a LEC terminates a compensable call that is both originated within its own service territory and not routed to another carrier for completion. The second instance is when a LEC also provides interexchange service and carries the call as would any other IXC. We make payment provisions for both types of payphone calls as follows. 89 Because such entities had no notice that they could be responsible for payphone compensation, we will not hold them liable. We will also excuse governmental entities such as, the Internal Revenue Service, and various state governments, that were in the RBOC data. We may not, however, have identified all of them; thus, some entities on the allocation chart may not in fact be carriers. Any entity named in our allocation that then receives a request for per payphone compensation from a PSP or other entity may, within ninety (90) days of receiving such a request, file a waiver request with the Wireline Competition Bureau for exclusion from our allocation, with a demonstration that the entity provides no communications service to others. 90 Fourth Reconsideration Order, 17 FCC Rcd at 2028, ¶ 20. 91 Comments of the Competitive Telecommunications Association at 15 (Aug. 26, 1997). 92 First Report and Order, 11 FCC Rcd at 20584 n. 293; see also Fourth Reconsideration Order, 17 FCC Rcd at 2026- 2027. 93 The Allocation Table reflects compensable calls handled by competitive LECs (CLECs) acting in an IXC capacity by identification of the CLEC by name and specifying the amount of per payphone compensation to be paid by that CLEC. 21 Federal Communications Commission FCC 02- 292 22 56. First, the record in this proceeding indicates that incumbent LECs do, in fact, complete payphone calls that are not routed to other carriers, and the RBOC Coalition has in fact recognized that there is “no principled reason why LECs should be excluded” from the obligation to pay compensation.” 94 The RBOC Coalition has placed into the record of this proceeding compensable call volumes originating from their payphones amounting to 2.19% of all compensable payphone calls. 95 The data has been on the record in this proceeding for over four years, represents 400,000 payphones from a geographically diverse group of RBOCs, 96 and there has been no indication in the record that other incumbent LECs objected to this amount or alleged substantially different call percentages. We also note that this figure was derived from CIC- code based studies that are consistent with the allocation methodology adopted in this Order. 97 We thus conclude that it is appropriate to allocate to both RBOC and non- RBOC incumbent LECs a percentage of the calls (2.19%) originating from payphones within their own service territories. Rather than making each ILEC remit payment to each PSP in the nation, however, we require each incumbent LEC to a PSP only if the PSP operates in the incumbent LEC’s local exchange area. 98 This percentage and the appropriate compensation rate are set forth at Appendices A, B and C. 57. Second, an examination of the RBOC data submitted in response to the Bureau’s request shows that RBOCs themselves sometimes behaved as IXCs. For instance, SBC reported that it routed to Bell Atlantic Communications over 2.5 million payphone call attempts in 1998 so that Bell Atlantic could act as an IXC and transfer the call to the appropriate LEC. Where Bell Atlantic and other RBOCs have routed such calls from one LEC to another LEC, their routing of those calls was very different from their routing of calls that both originated and terminated within their own service territories. Instead of providing true local exchange service, these RBOCs were providing interLATA long distance service out- of- region. Further, there is no indication that the above- referenced 2.19% estimate provided by the RBOC Coalition in 1998 included any out- of- region payphone calls routed by the RBOCs. We therefore conclude that incumbent LECs owe compensation for calls where the incumbent LEC performed the function 94 RBOC Coalition Comments at 34- 35. 95 Letter from Michael K. Kellogg, Counsel to RBOC/ GTE/ SNET Payphone Coalition, to Rose M. Crellin, FCC (March 27, 1998). 96 Id. at 2. 97 Id.; see also Letter from Michael K. Kellogg, Counsel to RBOC/ GTE/ SNET Payphone Coalition, to Rose M. Crellin, FCC (March 24, 1998) at 1- 2. 98 Each incumbent LEC must make the 2.19% payment to PSPs for each payphone located in its service territory, even if the PSP had/ has its payphones connected to a CLEC. Even if a loop or resold service is provided by a CLEC to a PSP, this is irrelevant to a determination of responsibility for per- phone compensation: for the purposes of dial around compensation, it does not matter who provides the local loop; rather, only those carriers that receive calls compensable under our rules are required to provide compensation. The 2.19% applies to incumbent LECs because it accounts for, and only reflects, the fact that an incumbent LEC does receive and carry compensable calls originated within its territory. For example, to the extent this 2.19% includes calls made to subscriber toll- free services provided by the incumbent LEC, the incumbent LEC would owe this compensation regardless of whether the incumbent LEC or a competitive LEC provided the loop to the PSP. We also note that, to the extent many CLECs will be required to pay some portion of per- phone compensation as a result of carrying interexchange and other traffic, as detailed at Appendices A and B, CLECs are not escaping from their obligation to pay a fair allocation of dial around compensation. 22 Federal Communications Commission FCC 02- 292 23 of an IXC, and that this compensation obligation should be allocated in a manner consistent with other payors of per- phone compensation, including IXCs. In other words, to the extent that the RBOC data show calls originating in an RBOC territory and were transferred to another incumbent LEC, that incumbent LEC owes per- phone compensation to all PSPs nationwide. The Allocation Table reflects compensable access code and subscriber toll- free calls routed by incumbent LECs acting in an IXC capacity, and specifies the amount of per- phone compensation to be paid by that incumbent LEC. 58. Affiliation Obligations. In Appendices A, B and C, we identified payors obligated to pay per- phone compensation by the names of payors and carrier identification codes (CICs) provided by the RBOCs in the payphone call data submitted this spring. 99 We hasten to add, however, that given consolidation and change in the telecommunications industry over the last several years, the payor names may fail to accurately identify current per- phone obligations imposed by this Order. Any failure on our part in the name identification in Appendices A, B and C should not be read to excuse full payment by any entity of its compensation obligation. The per- phone obligation ordered herein must be paid by each listed entity, or by its successors in interest, assigns, transferees or their entity legally responsible for the listed entity’s obligations under this Order. 100 99 One exception is KTNT Communications. To facilitate billing and clarify payment obligations for these 39 operator service providers, we have identified KTNT Communications as the company obligated to pay the per- payphone compensation required by this Order. KTNT Communications filed a notice with the Public Utility Commission of Texas on April 18, 1997 that it was the “management company responsibility” for these other operator service providers. Notice of Docketing and Suspension, Kathleen S. Hamilton, Administrative Law Judge, Public Utility Commission of Texas (Apr. 22, 1997); see also Letter of Mitchell F. Brecher, Counsel for Digital Network Services, Inc. to William A. Caton, Acting Secretary, FCC (Apr. 28, 1997) with regard to Southwestern Bell Telephone Company Tariff No. 73, Transmittal No. 2629, Petition of Digital Network Services, Inc. to Reject or Suspend. In addition, KTNT Communications and each of the 38 other operator service providers submitted “concurring carrier” documentation to qualify to use KTNT Communications tariff submissions. The 38 other operator service providers with payphone call data aggregated with data for KTNT Communications are Bay TNT Network, Who Ever, U Speak Long Distance, It Doesn’t Matter, Zimmer Way, I Don’t Care, I Don’t Know, Riverbend Communications, Minh Long Distance, Viva Tel L. D., Bryant Service, Rea Long Distance, Signature Network Service, Brown Service Co., Exco Long Distance, Mustang Operators, Far Point, Knox Service Group, Sandell Operator Service, Christine LD Service, Vera Long Distance, Old Laredo Service, Old Home Operator, Andril Service Group, Any One Is Okay, MCV, Brahms Communications, Forest Pine Telcom, Amadeus, Dvorak, KBTN, Callum Long Distance, Sunrise Operator, Wisteria LD Service, World Window, Hickory Grover Group, Alert Operators, and Friendly Voice Network. While KTNT Communications must pay all of the per- payphone compensation required in this order for itself and each of the 38 entities listed in this footnote, KTNT Communications has a right of recovery from the 38 entities if such recovery does not lead to double recovery by KTNT Communications. 100 We note, however, that this name identification was provided for the convenience of carriers and PSPs alike, and was not intended to impose a modification to otherwise appropriate intracorporate relationships. If an entity listed on Appendices A or B has provided for payment of its payphone compensation allocations through separate subsidiaries or otherwise, it may, 23 Federal Communications Commission FCC 02- 292 24 59. Conclusion. As we have discussed, we recognize that the allocation data we have used do not result in a “perfect” allocation, but must also recognize that a perfect allocation is, and most likely has always been, impossible. 101 We find, however, that the final data set provides an adequate sampling of the most objective payphone routing information available at this time and thus enables us to use the data as a fair proxy for call allocation. For 1997, the usable data account for almost one billion payphone calls, for 1998, more than two and a half billion, and for fiscal year 2001, more than one and a half billion calls. We think that, given the significant problems we identified with the various methodologies proposed by the parties and the lack of other data, our allocation is the best that could reasonably be derived in the circumstances. Allocation to Resellers 60. Sprint requests that the Commission reverse the determination in the Fourth Reconsideration Order that per- phone compensation should be paid to PSPs by IXCs and LECs, but not by resellers (with a right of recovery from resellers). 102 We grant Sprint’s petition to the following extent. As we have discussed above, the call data received from the RBOCs after the release of the Fourth Reconsideration Order lists carriers receiving calls by name and by CIC. Because many resellers have their own CICs, numerous resellers are included on these lists, and hence included on our allocation set forth at Appendices A, B and C. Accordingly, we have addressed at least part of Sprint’s concern by including resellers as well as “first switch” carriers, without regard to the label borne by the carrier, and we explicitly hold that allocating compensation obligations among carriers through the use of this methodology replaces the more general statements we made in the Fourth Reconsideration Order about requiring first facilities-based carriers to bear the entire burden of per- phone compensation. 103 absent some other resolution agreeable to the PSPs to which it owes payment, ask for clarification from the Wireline Competition Bureau, which will promptly provide the appropriate attribution of allocation amounts among subsidiaries or other entities, or otherwise provide clarification of the per- payphone compensation obligation required by this Order. An entity listed on Appendices A or B may not, however, avoid its obligation to pay per- phone compensation by requesting such clarification. 101 In addition to the adjustment noted above, we note that because RBOCs were not required under any of our rules to collect and retain the specific payphone call data solicited, some of the data are unusable, and we have excluded unusable data from the final data set. For example, the data reflects calls routed to destinations that could not be identified. There were 822,723 such calls in 1997, 16,656,053 in 1998, and 3,798,565 in 2001. Nevertheless, those numbers are quite small given the huge amount of usable data, and our conclusions remain sound. 102 Sprint Corporation Reply Comments at 5- 8. 103 We do recognize that it is possible calls routed to facilities- based carriers’ CICs may in fact have been ultimately routed to resellers. Given the inclusion of a significant number of resellers in the allocation methodology, however, the ultimate impact on the compensation paid by other carriers will most likely not be significant. Moreover, as we noted above when discussing Sprint’s proposed alternative method for allocating per- phone compensation, we have no more reasonable alternative – Sprint’s proposal, for example, would effectively exclude all resellers from compensation and thus cannot be considered “fair” compensation to PSPs. Moreover, if a carrier has data that calls allocated to them (i. e., routed to its CIC code) were actually carried by resellers, nothing in this Order prevents carriers from seeking reimbursement of the cost of these 24 Federal Communications Commission FCC 02- 292 25 Retroactive Ratemaking 61. We decline to grant ITC^ Deltacom’s petition to exempt from Interim Period compensation obligations those carriers with revenues below $100 million. 104 The Commission attempted to do so in 1996, and this very approach was rejected by the D. C. Circuit in Illinois. 105 ITC^ Deltacom offers no new argument that would convincingly overcome the court’s holding. 62. ITC^ Deltacom argues that if the Commission expands, on remand, the Interim Period compensation obligation beyond the 24 companies listed in the First Report and Order such an extension would constitute impermissible retroactive rulemaking. 106 This argument fails because the regime of the First Report and Order did not become final due to pending judicial review, and the Illinois decision clearly put all carriers on notice of potential liability. Notice of small carriers’ potential obligation to pay Interim Period compensation was likewise provided in the initial NPRM in this proceeding. Accordingly, nothing we do in this order constitutes impermissible retroactive ratemaking – it merely apportions an existing payment obligation among those entities to which we are required by the D. C. Circuit to apportion it. 107 Moreover, calls from resellers, and we explicitly hold that they may do so. We hasten to add, however, that carriers may in no way delay payment of compensation to PSPs on account of seeking such reimbursement. 104 ITC^ Deltacom Petition for Reconsideration at 7- 8. 105 117 F. 3d at 565. 106 Although ITC^ Deltacom argues on behalf of IXCs with annual toll revenue below $100 million, its legal arguments apply equally to any company not listed in the First Report and Order. For example, if it is impermissible retroactive rulemaking to require a small IXC to pay this compensation because the Commission failed to list small IXCs from the 1996 list, according to ITC^ Deltacom's argument, it is also impermissible retroactive rulemaking to require a reseller to pay this compensation if the Commission failed to list that reseller on the 1996 list. ITC^ Deltacom’s arguments fail in this respect for the same reason they fail as discussed above. 107 This holding is entirely consistent with recent precedent applicable to rulings of this Commission. In Verizon v. FCC, 269 F. 3d 1098, 1110- 11 (D. C. Cir. 2001), the D. C. Circuit approved the Commission’s ruling that LECs had improperly applied EUCL charges to independent PSPs, even though a Commission order allowed them to do so. The court stated that there was no retroactivity problem because “ the agency orders on which the LECs claim to have relied not only have never been judicially confirmed, but were under unceasing challenge before progressively higher legal authorities. Our cases indicate that under such circumstances reliance is typically not reasonable, a conclusion that significantly decreases concerns about retroactive application of the rule eventually announced. See Clark- Cowlitz Joint Operating Agency v. FERC, 826 F. 2d 1074, 1083 n. 7 (D. C. Cir. 1987) (en banc) (“[ A] holding of retroactivity . . . cannot be premised on a single, recent agency decision . . . that is still in the throes of litigation when it is overruled.”). . . . [Moreover,] the agency pronouncements on which the LECs relied were subsequently held by this court to be mistaken as a matter of law. As such, the FCC’s Liability Order was largely an exercise in error correction. We have previously held that administrative agencies have greater discretion to impose their rulings retroactively when they do so in response to judicial review, that is, when the purpose of retroactive application is to rectify legal mistakes identified by a federal court. See Exxon Co., USA v. FERC, 182 F. 3d 30, 49- 50 (D. C. Cir. 1999). . . . [T] he LEC’s argument that the FCC may not reach the same 25 Federal Communications Commission FCC 02- 292 26 the result that ITC^ Deltacom advocates would leave PSPs uncompensated for the eleven- month Interim Period and subsequent periods. If we were to excuse any but the 25 carriers listed in the First Report and Order, yet we could not require those 25 companies to bear more than their fair share, we would unavoidably violate the mandate of section 276 that PSPs be fairly compensated for each and every interstate or intrastate completed call originated from their phones. 63. ITC^ Deltacom further argues that it failed to keep records necessary to verify the compensation for which it is responsible. 108 ITC^ Deltacom’s argument that it should be exempted from the allocation methodology adopted by the Fourth Reconsideration Order because it cannot render traffic records is beside the point. 109 The allocation methodology adopted herein does not depend on such records. We therefore deny ITC^ Deltacom’s petition for reconsideration. Early and Intermediate Period Issues Early Period 64. Before considering whether we should reverse our order that PSPs must refund overcompensation paid to carriers during the Intermediate Period, we must address apparent confusion that has arisen regarding the Commission’s consideration and disposition of payphone compensation for the period from June 1992 to November 1996 (the “Early Period”). During the Early Period, the Commission, pursuant to its authority under section 226 of the Act, required carriers to pay compensation to independent PSPs for access code calls, but concluded that it lacked statutory authority to require carriers to compensate independent PSPs for subscriber toll-free calls, meaning toll- free calls placed to 8XX numbers that are not access codes. 110 In Florida Public Telecommunications Association v. FCC, the D. C. Circuit found that the Commission in fact had such statutory authority and remanded to the Commission for further consideration. 111 As we describe in further detail below, CPA and APCC have argued that, in weighing the equities of ordering the Intermediate Period refund, we must take into account compensation of independent PSPs during the Early Period. This argument has raised some confusion as to how and even whether the Commission disposed of the D. C. Circuit’s Florida remand. 112 We take this opportunity to clarify that the Commission addressed this remand fully in the First Report and Order. 65. In 1995, in accordance with the Florida remand, the Commission issued the Second Further Notice in its payphone compensation docket, CC Docket No. 91- 35, soliciting comment as to whether the Commission should require compensation for access codes calls conclusion now reduces to the assertion that the agency may not retroactively correct its own legal mistakes, even when those missteps have been highlighted by the federal judiciary. But this is not the law.” 108 ITC^ Deltacom Petition for Reconsideration at 8- 9. 109 ITC^ Deltacom Petition for Reconsideration at 8- 9. 110 47 U. S. C. §226; Policies and Rules Concerning Operator Service Access and Pay Telephone Compensation, CC Docket No. 91- 35, Report and Order and Further Notice of Proposed Rulemaking, 6 FCC Rcd 4736 (1991), Second Report and Order, 7 FCC Rcd 3251 (1992). 111 Florida Pub. Telecomms. Ass’n, Inc. v. FCC, 54 F. 3d 857 (D. C. Cir. 1995)(“ Florida”). 112 Letter of Albert H. Kramer, Counsel for APCC, to William F. Caton, Secretary, FCC (Apr. 15, 2002); Letter of Teresa Marrero, AT& T, to Marlene Dortch, Secretary, FCC (July 2, 2002). 26 Federal Communications Commission FCC 02- 292 27 under section 226( e)( 2). 113 While the Commission was considering comments and replies received in response to the Second Further Notice, the 1996 Act became law. Subsequently, on June 4, 1996, the Commission adopted the Notice of Proposed Rulemaking in this docket, 114 which ultimately led to the adoption of the First Report and Order on September 20, 1996. 66. In the First Report and Order, the Commission held that the requirement of section 276 that the Commission ensure fair compensation “for each and every completed intrastate and interstate call” superseded the compensation obligations established and previously considered in CC Docket No. 91- 35. 115 Accordingly, by establishing a compensation mechanism for “each and every intrastate and interstate call,” including access code calls, the Commission squarely addressed and disposed of the issue remanded for its further consideration by the Florida decision. This was made clear by the Commission when it stated that “[ b] ecause the compensation issues raised in the Second Further Notice [in CC Docket No. 91- 35] have been subsumed into this proceeding, we terminate that proceeding.” 116 The Commission was clearly aware of its responsibility to address the Florida remand and decide compensation for access code calls, and discussed the procedural history of its implementation of section 226 when it considered compensation for the Interim Period. 117 Significantly, the Commission declined “to require that per- call compensation [under section 276] be paid retroactive to the date of the release of the Notice,” but instead required compensation during the Interim Period to commence on the “effective date of the rules adopted in this proceeding.” 118 After this clear decision by the Commission to dispose of the Florida remand by establishing compensation mechanisms under section 276, no party petitioned for reconsideration or appealed the decision on the basis that section 226 or the Florida decision instead somehow required the Commission to award compensation retroactively to the date section 226 became effective or the date of the Florida decision. 67. Therefore, because the Commission disposed of the Florida remand in the First Report and Order and is under no obligation to reconsider or reexamine that decision, we confirm that the Commission is not now legally required to award further compensation to PSPs for calls handled during the Early Period. Moreover, as we have noted above with regard to the allocation methodology adopted in this Order, it has been hard enough to obtain data to develop a reasonable picture of compensation obligations to IXCs for 1996 to 1997. Thus, quite aside from the fact that we have settled the legal issue of compensation for the Early Period, it would not be practicable to sort out with any certainty the amount of undercompensation from the Early Period and then determine the specific amounts of money given carriers would be required to reimburse specified PSPs. 113 Policies and Rules Concerning Operator Service Access and Pay Telephone Compensation, Memorandum Opinion and Order on Further Reconsideration and Second Further Notice of Proposed Rulemaking, 10 FCC Rcd 11547 (1995). 114 Implementation of the Pay Telephone Reclassification and Compensation provisions of the Telecommunications Act of 1996, CC Docket No. 96- 128, Notice of Proposed Rulemaking, 11 FCC Rcd 6716 (1996) (“ Notice”). 115 First Report and Order, 11 FCC Rcd at 20601, ¶ 119. 116 Id. at 20546 n. 16 and 20711, ¶ 374 (“ IT IS FURTHER ORDERED that the proceedings . . . in CC Docket 91- 35 . . .ARE TERMINATED.”). 117 See id. at 20601- 602, ¶¶ 119- 121. 118 Id. at 20604, ¶ 126 & n. 430. 27 Federal Communications Commission FCC 02- 292 28 Refund of Payments Collected Under the 28.4 Cent Rate Background and CPA Arguments 68. Although we have provided the procedural history of this docket above, in considering CPA’s Petition for Reconsideration of our decision to order a refund of per- call compensation already paid by carriers during the Intermediate Period, it is useful to briefly recount how the rate for per- call compensation was established. In the First Report and Order, we established 35 cents as the default per- call compensation rate, based on what we believed to be the market price for the services of a payphone. We determined that the costs of subscriber toll- free and access code calls approximated the costs of a coin call, and the market rate for coin calls would therefore serve as a fair proxy for the market rate for coinless call compensation. 119 In Illinois, the D. C. Circuit reversed and remanded, finding that our conclusion was contradicted by record evidence showing that the costs for the various types of calls were not similar. 120 On remand, we calculated the cost differential between coin calls and coinless ones, and subtracted that amount from the 35 cent market rate for coin calls to establish a default market rate for coinless calls of 28.4 cents. Once again, in MCI, the court remanded, finding that it was not rational to derive a market rate for one type of call by subtracting a cost differential from the rate for another type of call. 121 Importantly, however, it did not vacate the rate. On remand, we established the present 23.8 cent rate, which the court upheld in APCC. 122 69. Because the court did not vacate the 28.4 cent rate, PSPs were entitled to collect 28.4 cents per- call for subscriber toll- free and access code calls during the Intermediate Period, even though the court had found that rate to have been the product of arbitrary decisionmaking. In the Third Report and Order, we decided to apply the 23.8 cent default rate retroactively to the Intermediate Period, and to require PSPs to refund the difference between the payments they received during the Intermediate Period at the 28.4 cent compensation rate and payments recalculated at the 23.8 cent rate. 123 CPA requests reconsideration of that decision, contending that in the Third Report and Order the Commission did not perform the required balancing of equities prior to ordering a refund, and that the equities do not support that result. 124 70. CPA, supported by comments from APCC, raises three principal equitable points. First, it contends that in assessing the equity of refunds, the Commission must examine not only the Intermediate Period, but also the Early Period. As we discussed above, during that period, the Commission required carriers to pay compensation to independent PSPs for access code calls pursuant to section 226( e)( 2) of the Act, but did not require compensation for subscriber toll- free 119 First Report and Order, 11 FCC Rcd at 20577, ¶ 70. 120 Illinois, 117 F. 3d at 563- 64. 121 MCI, 143 F. 3d at 608- 09. 122 American, 215 F. 3d at 58. 123 In a footnote in its Petition for Reconsideration, Sprint Corporation states that it did not believe the obligation set forth in the Fourth Reconsideration Order regarding per- phone compensation for the Intermediate Period, “is intended to force carriers that heretofore paid on a per- call basis to now conduct true ups on a per- payphone basis for the Intermediate Period.” Sprint Petition for Reconsideration at 18 n. 28. Sprint is correct on this point. If carriers have already paid per- call compensation on payphones for which they received coding digits in the Interim, Intermediate or any other period, nothing in the Fourth Reconsideration Order or this Order requires carriers to now go back and apply per- phone compensation to these payphones. 124 CPA Petition at 21, 25 (Apr. 21, 1999). 28 Federal Communications Commission FCC 02- 292 29 calls. This decision was subsequently remanded by the D. C. Circuit in Florida, and handled prospectively in the First Report and Order. APCC estimates that, had the Commission prescribed compensation for subscriber toll- free calls, independent PSPs would have received compensation that far exceeds the maximum amount that independent PSPs would refund to carriers for the Intermediate Period. 71. Second, CPA and APCC contend that a refund would bestow a windfall on the carriers. CPA claims that the carriers have fully recovered (indeed, overrecovered) their compensation payments during the Intermediate Period at the 28.4 cent rate by passing them through to end users. 125 APCC states that the Commission has already concluded that this is the case, pointing to the Commission’s statement in the Third Report and Order that “IXCs have recovered from their customers the cost of compensating PSPs at a rate of $. 284 per call.” 126 In addition, CPA and APCC charge that IXCs, specifically AT& T, WorldCom and Sprint, overrecovered the cost of dial around compensation because they justified various general rate increases by reference to dial around compensation requirements and received a substantial reduction in access charge payments because of the removal of access charge subsidies for payphones. 127 Therefore, CPA argues, carriers will reap an unfair windfall if awarded a refund. 72. Third, APCC contends that a refund is inappropriate because independent PSPs did not in fact recover the costs of their “marginal” payphones during the Intermediate Period, even while collecting the higher 28.4 cent rate. 128 According to APCC, independent PSPs failed to recover their costs because the compensation rules at that time created an unworkable payment system, 129 and because LECs failed to timely implement the FlexANI system necessary for IXCs to track compensable calls originating from independent PSPs. 130 Related to this point, APCC also argues that if PSPs were required to refund a portion of per- call compensation paid during the Intermediate Period, WorldCom and Global Crossing would owe PSPs a significant amount of additional compensation, but PSPs would be net payors to AT& T for the Interim Period and 125 See, e. g., Letters from Albert H. Kramer et al., Counsel for APCC, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Sept. 23, 2002) (APCC Sept. 23 Ex Parte Letter) at 10- 12 (discussing Sprint’s end user surcharges). 126 Third Report and Order, 14 FCC Rcd at 2637, § 199; see Letter from Albert H. Kramer et al., Counsel for APCC, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Oct. 4, 2002) (APCC Oct. 4 Overrecovery Ex Parte Letter), Attachment at 1- 2. 127 APCC Sept. 23 Ex Parte Letter at 2- 7, 10- 12. 128 Letter from Albert H. Kramer, et. Al., Counsel for APCC, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Mar. 26, 2001 and Apr. 23, 2001). In the Third Report and Order, we found the 23.8 cent rate to be a cost- based rate because it would enable PSPs to recover the fixed costs of “marginal” payphones, i. e., payphones deployed at “break- even” locations where a PSP’s call revenues just barely recover the costs of maintaining the payphone. Third Report and Order, ¶¶ 139- 41. We estimated that a “marginal payphone” would average 439 calls per- month, including 142 dial- around calls. Id. at n. 302. At the 23.8 cent rate, we determined, the fixed cost of a marginal payphone would be recovered. Id. at ¶ 191. The 23.8 cent rate, we found, would thereby meet the objective of ensuring “widespread deployment of payphone services.” 47 U. S. C. §276( b). 129 Id. 130 Id. 29 Federal Communications Commission FCC 02- 292 30 would also be required to pay refunds to other IXCs for the Intermediate Period. 131 Accordingly, APCC argues, PSPs would be undercompensated because they would be forced to pay certain IXCs but could not recover amounts owed from WorldCom and Global Crossing. APCC also argues that applicable case law requires the Commission to take into account bankruptcies that have occurred since the release of the Third Report and Order. 132 73. Opposing CPA and APCC’s arguments, IXCs claim that the Commission has no choice but to order a refund, because 23.8 cents is the lawful rate and because the court of appeals mandated a refund. 133 Additionally, AT& T, Sprint and WorldCom argue that Early Period undercompensation may not be considered because estimates of this liability are speculative, inflated and otherwise unsupportable 134 and because the decision to prescribe Early Period compensation was discretionary with the Commission. 135 IXCs also contend that the equities have been adequately balanced by postponing the date that refunds must be paid to carriers, and dispute CPA and APCC’s claims that the carriers overrecovered for the compensation payments they paid during the Intermediate Period. 136 Specifically, AT& T, Sprint and WorldCom argue that IXCs, in fact, underrecovered their costs of paying dial around compensation for several reasons: because they did not receive payphone- specific coding digits from a substantial percentage of payphones during the Interim and Intermediate Periods, they could not impose surcharges on calls originated from these phones and thus were unable to recover the cost of per- phone compensation from end users; when they could impose surcharges, they were unable to recover the administrative cost of payphone compensation and the cost of bad debt; to the extent IXCs have enjoyed lower access charges, these reductions have been passed through to end users; and APCC’s arguments regarding general rate increases are speculative, inaccurate, and ignore the fact that IXCs made much broader rate reductions. 137 131 Letters from Albert H. Kramer, et. al., Counsel for APCC, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Sept. 11, 2002) (APCC Sept. 11 Ex Parte Letter) at 2- 6; Letter from Albert H. Kramer et al., Counsel for APCC, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Oct. 4, 2002) (APCC Oct. 4 Bankruptcy Ex Parte Letter), Attachment at 1- 2. 132 APCC Sept. 11 Ex Parte Letter at 7- 9 (citing West Ohio Gas Co. v. Pub. Util. Comm’n of Ohio, 294 U. S. 79 (1935); Moss v. Civil Aeronautics Bd., 521 F. 2d 298 (D. C. Cir. 1975); Summerfield v. Civil Aeronautics Bd., 207 F. 2d 200 (D. C. Cir. 1953); APCC Oct. 4 Bankruptcy Ex Parte Letter at 1- 3. 133 Opposition of Cable & Wireless at 5 (July 7, 1999); AT& T Opposition at 6- 7 (July 7, 1999); Letter from Teresa Marrero et al., on behalf of AT& T, WorldCom and Sprint, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Oct. 1, 2002) (Joint Oct. 1 Ex Parte Letter) at 2- 3. 134 Joint Oct. 1 Ex Parte Letter at 5- 7. 135 Letter from Michael DelCasino, AT& T, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed June 14, 2002). 136 Opposition of MCI WorldCom Inc. at 6 (July 7, 1999); Opposition of Sprint Corporation to Petition of Colorado Payphone Association Petition for Partial Reconsideration (MCI Opposition) at 7- 9 (July 7, 1999). 137 Joint Oct. 1 Ex Parte Letter at 7- 9; Letter from John E. Benedict, Sprint, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Sept. 27, 2002) at 1- 2; Letter from Larry Fenster, WorldCom, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Oct. 1, 2002) at 2; Letter from Larry Fenster, WorldCom, to Marlene H. Dortch, Secretary, Federal Communications 30 Federal Communications Commission FCC 02- 292 31 MCI argued that IXCs were harmed by suppression of demand for dial- around calling caused by the higher compensation rate. 138 74. AT& T, WorldCom and Sprint also dispute APCC’s argument about the impact of recent telecommunications industry bankruptcies, arguing that: APCC’s arguments are irrelevant to IXCs that are not in bankruptcy; APCC’s arguments would have the effect the effect of forcing certain IXCs to pay more to PSPs to make up for amounts bankrupt IXCs cannot pay, effectively making IXCs guarantors of dial around compensation; and PSPs will, in fact, still be able to setoff Interim Period compensation owed by bankruptcy companies against refunds and to the extent Interim Period payments are still owed that some recovery is nevertheless possible. 139 These IXCs respond to APCC’s arguments that the Commission must consider the impact of the bankruptcies by arguing that the Third Report and Order, at the time it was released, did not ignore the relevant facts at the time the refund was ordered, and that in any event any impact of the bankruptcies is based, at most, on “erroneous predictions regarding the possible impact of these recent bankruptcy proceedings.” 140 Discussion 75. Our analysis of this issue begins with the terms of the court’s remand in MCI. The court announced that it would “exercise [its] discretion to remand the [28.4 cent rate] for further explanation without vacating it.” 141 It proceeded to state that: Here, vacating the order would leave payphone service providers all but uncompensated for coinless calls made from their payphones, and disrupt the business plans they have made on the basis of their expectation of compensation. . . . We choose not to vacate the $. 284 rate on the clear understanding that if and when on remand the Commission establishes some different rate of fair compensation for coinless payphone calls, the Commission may order payphone service providers to refund to their customers any excess charges for coinless calls pursuant to the current rate. The Commission itself has acknowledged that it has the authority to adjust the compensation rate retroactively ‘should the equities so dictate. ’ . . . It is clear that the Commission has the authority to order refunds where overcompensation has occurred, on the basis of the statutory provision permitting the Commission to take such actions ‘as may be necessary in the Commission, CC Docket No. 96- 128 (filed Oct. 2, 2002) at 2; Letter from Teresa Marrero, AT& T, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Oct. 3, 2002) at 2- 3. In addition to these arguments, WorldCom also argues that their underrecovery is further exacerbated because the Fourth Reconsideration Order would prevent WorldCom and other carriers from recovering Interim period compensation from their resellers. Letter from Larry Fenster, WorldCom, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Oct. 1, 2002) at 2- 3. As we noted above, we have effectively granted Sprint’s petition for reconsideration on this point, and as such limited the impact of this alleged underrecovery. 138 MCI Opposition at 6 (July 7, 1999). 139 Joint Oct. 1 Ex Parte Letter at 9- 11; Letter from Larry Fenster, WorldCom, to Marlene H. Dortch, Secretary, Federal Communications Commission, CC Docket No. 96- 128 (filed Sept. 18, 2002) at 1- 2. 140 Joint Oct. 1 Ex Parte Letter at 11. 141 MCI, 143 F. 3d at 609. 31 Federal Communications Commission FCC 02- 292 32 execution of its functions. ’ . . . In addition, the [1996 Act] requires the Commission to ‘take all actions necessary (including any reconsideration) ’ to promulgate regulations to ensure fair compensation to payphone service providers. This language authorizes the Commission to order refunds where doing so is necessary to ensure fair compensation. 142 76. In the Third Report and Order, we cited that holding and concluded that “the current default compensation amount should apply . . . retroactively to the period between October 7, 1997 and the effective date of this order [the period now referred to as the Intermediate Period].” 143 CPA and APCC claim that the court intended the Commission to order refunds only if required by the equities. The IXCs largely retort that the court’s remand clearly required the Commission to order refunds in the event that the agency derived a rate lower than 28.4 cents. 77. We believe that the court plainly expected the Commission to order a refund. The court stated its “clear understanding” of that outcome. Although the court stated that the Commission “may,” not “shall,” order refunds, we think that the word is best interpreted as describing the Commission’s power to order the remedy that the court had in mind and not simply as giving the agency an open- ended choice in the matter. The discussion of the Commission’s equitable authority was necessary to the court’s holding because if the agency lacked any power to order refunds, it would not be able to implement the court’s expected remedy. We thus do not read the passage as expressing the view that refunds were to be made only if the Commission found it equitable to do so. Nevertheless, as our power to order refunds is rooted in a measure of equitable discretion, we think it appropriate to examine the equitable arguments raised by the parties. We undertake the inquiry with the understanding that we will enforce the court’s expectation of refunds unless the equities make a compelling case to the contrary. 78. This understanding is informed by and consistent with precedent in this area. Although we are constrained from engaging in retroactive ratemaking by ordering refunds of lawful rates already paid, courts have recognized that it is within the discretion of an agency to order a refund when necessary to correct legal error, and even suggested that the equities weigh in favor of refunds in such a situation. Thus, the D. C. Circuit has concluded that “[ t] here is . . . a strong equitable presumption in favor of retroactivity that would make the parties whole. As [the D. C. Circuit] has stated, ‘when the Commission commits legal error, the proper remedy is one that puts the parties in the position they would have been in had the error not been made. ’” 144 The D. C. Circuit has more recently stated that “administrative agencies have greater discretion to impose their rulings retroactively when they do so in response to judicial review, that is, when the purpose of retroactive application is to rectify legal mistakes identified by a federal court.” 145 While other cases have indicated that a presumption in favor of refunds might only apply in cases of direct conflict with the explicit requirements of a statute, 146 the MCI decision would 142 MCI, 143 F. 3d at 609 (citations omitted, emphasis added). 143 Third Report and Order, 14 FCC Rcd at 2545, ¶¶ 195- 196. 144 Exxon Co. USA v. FERC, 182 F. 3d at 50 (D. C. Cir. 1999) (quoting Public Utilities Comm’n of the State of California v. FERC, 988 F. 2d 154, 168 (D. C. Cir. 1993)). 145 Verizon, 269 F. 3d at 1111. 146 See, e. g., Towns of Concord, Norwood and Wellesley, Massachusetts v. FERC, 955 F. 2d 67, 76 (D. C. Cir. 1992) (“ absent some conflict with the explicit requirements or core purposes of a 32 Federal Communications Commission FCC 02- 292 33 clearly appear to favor a presumption of a refund for reasons consistent with both lines of cases: first, the court did not vacate the rate because it did not want to leave PSPs “all but uncompensated,” but had nevertheless plainly held the rate to be unlawful and took pains to point out the Commission’s authority to order a refund in such circumstances; second, the court cited the basic requirements of the Act in noting that the Commission was authorized to order refunds “where doing so is necessary to ensure fair compensation.” 79. CPA’s principal equitable argument is that the lack of compensation for subscriber toll- free calls during the Early Period justifies overcompensation during the Intermediate Period. The amount of money PSPs did not collect in the Early Period, they assert, far outweighs the amount of refunds to be made for Intermediate Period overpayment. We find that those circumstances do not provide a strong equitable case against refunds for several reasons. First, as discussed above, the PSPs had no clear entitlement to payment for toll- free calls made during the Early Period. Rather, the governing statute at the time required the Commission only to “consider” such payment. With the passage of section 276, the matter became effectively moot and, as noted above, that matter is now final and not subject to further challenge. Thus, we are not inclined to allow PSPs to retain the overcompensation of the Intermediate Period. Second, even if the PSPs had established some right to payment, it is impossible to establish with any specificity who owes what to whom for the Early Period. 147 We do not find it equitable to require the carriers that would be due refunds to foot the bill for an amount of money that has been unspecified and unallocated among parties. Third, to require carriers to forego refunds to which they are otherwise entitled because of possible undercompensation in a prior period (as to which the parties had no notice that they could ultimately be held liable) directly implicates the prohibition on retroactive ratemaking, and as such we can place little equitable weight on this factor. 80. CPA also argues that carriers should not receive a refund because they have already recovered from their customers the full 28.4 cent compensation amount, and a refund would amount to double recovery. APCC also argues that IXCs have in fact overrecovered dial around compensation, taking into account general rate increases and the benefit of lower access charges. CPA and APCC have failed to make a compelling case that the refund should be reversed on the basis of alleged recovery or overrecovery. While CPA claims and the record indicates that at least some IXCs recovered per- call compensation from their customers in the form of increased rates or surcharges, evidence of this recovery is largely limited to allegations regarding a few IXCs and it is not entirely clear that even these IXCs passed through all compensation. We think it unfair to deny an expected recovery to all carriers because of potential, unspecified overrecovery on the part of some. 148 Regardless of the extent of pass- statute, we have refused to constrain agency discretion by imposing a presumption in favor of refunds”). 147 APCC has made industry- wide estimates, and even attempted to break this down among the very largest carriers. See Letter from Robert F. Aldrich, Counsel for APCC, to Marlene Dortch, Secretary, FCC, CC Docket No. 96- 128. (May 23, 2002). We note, however, that these estimates were calculated at a very high level and, even if assumed to be reliable, do not provide us with the level of specificity we would need to overcome known and specific refunds owed to IXCs. 148 As APCC points out and as we noted above, the Third Report and Order stated that IXCs had recovered the cost of compensating PSPs at a rate of 28.4 cents per call. We believe the record in this proceeding creates significant questions as to whether the blanket statement in the Third 33 Federal Communications Commission FCC 02- 292 34 throughs to customers, however, we think that all of the carriers were reasonably entitled to rely on the MCI opinion to form a legitimate expectation that they would receive refunds, and were certainly reasonably entitled to do so after this Commission ordered a refund in the Third Report and Order. In a market with unregulated prices, the carriers were entitled to charge their customers a surcharge for per- call compensation or, indeed, to raise the retail rate to any level they think the market will bear. But the recovery of the surcharge does not undermine the legitimacy of the expectation that the carriers would eventually recover a refund because they paid an unlawful rate during the Intermediate Period. Carriers may have set their base rates or made other business plans in reliance on such an expectation, and we will not disturb those expectations because of the possibility of an appearance of double recovery. Indeed, the concept of double recovery is not particularly meaningful in a market where prices are not regulated. 149 81. With regard to APCC’s arguments about overrecovery as a result of general rate increases and reduction of access charges, we again note that APCC’s evidence in this regard is limited to a few IXCs, and does not purport to represent equitable factors applicable to the large number of carriers responsible for dial around compensation. Moreover, these arguments by APCC, and rejoinders by IXCs, illustrate very well that it is virtually impossible to come up with a reasonable and equitable resolution by conflating the questions in this proceeding with industry- wide cost recovery and rate questions. While APCC argues that the IXCs have overrecovered because of various benefits from dial around compensation, the IXCs respond that they have underrecovered because they have been unable to pass on payphone- specific surcharges, passed on savings from general access charges, and generally lowered other rates. These kind of universal balancing tests of amounts that may or may not have been recovered by IXCs provide very little illumination as to whether it is equitable for any given PSP to retain unlawful compensation paid by any given IXC and ignore our repeated statements that because payphone compensation obligations run from specific carriers to specific PSPs, 150 we are not inclined to adopt industry- wide solutions that would obviate specific payment obligations. At most, the under- and overrecovery arguments, most of which were made late in this proceeding, tend to cancel each other out and thus have no bearing on the equitable analysis we conduct here. 82. Finally, the PSPs’ failure to recover the entire amount to which they were due during the Intermediate Period does not equitably justify allowing the PSPs to keep overpayments made during that time period. The underrecovery may have been due to many reasons: problems in collecting compensation from resellers; delays in implementing FlexANI technology to facilitate per- call compensation; refusal by some carriers to pay compensation during the Intermediate Period; and so on. The underrecovery does not, however, appear to have been the result of non- payment or significant underpayment by those carriers that actually made regular payments of the 28.4 cents per- call. In that circumstance, canceling the refund in order to assure greater compensation to PSPs would effectively penalize the very companies who fulfilled their obligations in the first place. That outcome is neither equitable nor, in light of the holding in Illinois that we may not require one company to bear another one’s expenses, lawful. Section 276 requires us to ensure that per- call compensation is fair, which implies fairness to Report and Order was correct for all carriers that might have paid Intermediate Period per call compensation – the Commission did not cite to any support for this assertion and, regardless of what the Commission said regarding cost recovery, nevertheless ordered a refund. 149 The same reasoning deprives of equitable bearing changes in the types of calls made from payphones from less profitable ones (for the IXCs) to more profitable ones. 150 Which we reaffirm below, infra Section III. D. 1. a. 34 Federal Communications Commission FCC 02- 292 35 both sides. We take note as well of current litigation in which PSPs are currently engaging against various companies (such as resellers) to recover underpayments during the Intermediate Period. 151 Any recovery in such lawsuits would mitigate the financial shortfall, and make it even more unfair to require additional payments from the carriers who have already paid their share. To the degree that the payment shortfall was due to problems with FlexANI installation, PSPs are entitled to recover per- phone compensation for any period in which FlexANI was not installed at the LEC switch, which further mitigates the underpayment. 83. In this regard, we reject APCC’s arguments that recent telecommunications bankruptcies require us to reconsider our earlier decision to require a refund. As a threshold matter, PSPs have been on notice since the Third Report and Order was released in February, 1999, and arguably since the release of the D. C. Circuit’s MCI decision in 1998, that they would be required to pay refunds as soon as Interim Period compensation was decided. Notwithstanding pending reconsiderations of this decision, no action of this Commission has given PSPs any reasonable basis to believe they would not ultimately be responsible for this payment. Accordingly, to the extent we consider APCC’s arguments regarding bankruptcy at all, we give them very little weight given that the bankruptcies in question occurred well after PSPs were on notice that the 28.4 cent rate was unlawful and they would be required to pay a refund. In any event, we do not believe that the bankruptcies justify allowing PSPs to retain overpayments. APCC argues that a shortfall in collection from WorldCom and Global Crossing will necessarily result in actual compensation that falls below the level of compensation the Commission has deemed adequate, which will violate the terms of Section 276. We disagree for several reasons. First, the amount of any shortfall is far from clear and will not be determined until the end of the bankruptcy proceedings. It may turn out that PSPs collect most, if not all, of the money they are owed. It is thus premature for us to allow PSPs to retain overcharges based on the possibility that there might be revenue shortfalls. Second, we agree with the IXCs that reconsidering the refund because of recent bankruptcies, would unfairly shift the burden of paying outstanding Interim Period per- phone compensation to IXCs that paid an unlawful Intermediate Period per- call rate. That outcome would be unfair and inequitable and would violate the principle established in the Illinois case. We decline to replace our current system of individual payment obligations with APCC’s industry- wide solutions. Third, our actions in the various payphone orders have satisfied the requirements of Section 276. The statute requires us to implement a “per call compensation plan” and we have done just that by establishing a per-call rate that has been upheld in court. 84. We are cognizant that the payphone industry has been struggling in light of the pervasiveness of cell phones and that requiring refunds will impose a burden. But we simply cannot say that the burden should be borne instead by carriers (mostly IXCs), who themselves are suffering from a downturn in their industry. Upon a balancing of the equities, we decline to reconsider our earlier finding that PSPs will be required to pay refunds for the Intermediate Period. 151 See APCC Servs., Inc., v. AT& T Corp., No. 99- CV- 696 (D. D. C.); APCC Servs., Inc., v. WorldCom, Inc., No. 01- CV- 638 (D. D. C.); APCC Servs., Inc., v. Qwest Communs. Corp., No. 01- CV- 641 (D. D. C.); APCC Servs., Inc., v. Sprint Communs., Inc., No. 01- CV- 642 (D. D. C.); APCC Servs., Inc., v. Cable & Wireless, Inc., No. 02- CV- 158 (D. D. C.). 35 Federal Communications Commission FCC 02- 292 36 Payment Mechanisms Payments Between Carriers and PSPs 85. APCC’s Petition for Reconsideration of the Fourth Reconsideration Order argues that the Commission must reconsider its decisions to (1) require payments and refunds for the Interim and Intermediate Period to take place between PSPs and carriers and (2) prohibit carriers from exercising self- help remedies by deducting refunds from future payments to PSPs and instead require carriers claiming refunds to bill PSPs. 152 Most of APCC’s arguments regarding mechanisms of payment have already been reviewed and decided by the Commission. Nevertheless, we recognize that PSPs should not be placed at an unfair disadvantage in this process, and that unrestrained claims against future payments to PSPs may have such an effect. Accordingly, while we deny APCC’s petition with regard to both of its arguments, we nevertheless clarify the administration of retroactive payments as set forth below. 86. In the Third Report and Order, the Commission held that “IXCs may recover their overpayments to the PSPs at the same time as the PSPs receive payment from the IXCs for the Interim Period,” and that, if the amount the IXC overpaid is larger than the amount owed to a PSP for the Interim Period, “the IXC may deduct the remaining overpayment from future payments to PSPs.” 153 This “true up” was designed to alleviate the immediate impact on PSPs of refunding carrier overpayments without the immediate resources to do so. After adoption of the Third Report and Order, APCC argued that the Commission should not require PSPs to refund overpayments, but should instead order underpaying carriers to compensate carriers that had overpaid during the Interim and Intermediate Periods. 154 The Fourth Reconsideration Order did not disturb the payment mechanisms established under the Third Report and Order. Instead, it found that APCC’s proposal would further complicate resolution of payment for the Interim Period and concluded that, in the absence of any other arrangement made with the agreement of the PSP, “retroactive adjustments are to be made only between carriers and PSPs.” 87. APCC’s petition for reconsideration of this decision makes two primary arguments. First, APCC argues that it would be unfair to impose a refund obligation on PSPs when they have no assurance of obtaining payments owed for these periods. Thus, APCC argues that it is a relatively simple matter for the Commission to determine the amount by which each IXC has been overpaid or underpaid for the Interim Period. Having made that determination, all the Commission needs to do is allocate to each underpaying IXC a pro rata share of the total owed to each overpaying IXC, and rule that the remaining underpayment should be paid to PSPs. 155 152 See APCC Petition for Reconsideration at 10- 16, 16- 19 (APCC Petition). 153 Third Report and Order at 2636- 37, ¶ 198. 154 APCC Reply to Comments on Petition for Reconsideration (APCC Reply) at 7 (May 13, 2002). 155 APCC Petition at 16. 36 Federal Communications Commission FCC 02- 292 37 AT& T counters that APCC’s proposal exacerbates the problems of determining compensation owed by any given carrier, and Sprint argues that APCC’s proposal would significantly increase the administrative difficulty of resolving payments. 156 88. Second, APCC argues that if the Commission does require resolution of payment between PSPs and carriers, “IXCs should be required to bill PSPs for the amount of the refund [to the IXC] and await payment, just as PSPs must do when collecting retroactive compensation from IXCs,” and further that carriers should be required to verify disputed refund payments. 157 Otherwise, APCC argues, carriers will simply deduct claimed refunds from future payments to PSPs and will have no incentive to resolve erroneous claims. 158 AT& T, WorldCom and Sprint argue that APCC provides no basis for the Commission to reverse its decision, and AT& T in particular argues that deduction of amounts owed from future payments to PSPs is a common business practice in international settlement arrangements and retail businesses. 159 Payments Between Carriers and PSPs 89. With regard to APCC’s proposal to require underpaying carriers to compensate overpaying carriers, it is necessary to first point out that APCC’s arguments amount to little more than disagreement with a decision that has been made and already affirmed. APCC has already had the opportunity to make its arguments during consideration of the Third Report and Order and again during the pendency of the Fourth Reconsideration Order. APCC and other parties have taken advantage of this opportunity, and the Commission has now held twice that payment and refund obligations for the Interim Period run between PSPs and carriers. 90. While we are thus under no obligation to consider or address yet another iteration of APCC’s arguments, we recognize that payment of payphone compensation has a long and complicated history, and in light of APCC’s most recent proposal it is useful to clarify the basis for our decision to require payments and refunds to take place between PSPs and carriers. 91. APCC is correct in pointing out that resolving payments and refunds among as many as 2,000 PSPs and hundreds of carriers is an extraordinarily complex process. 160 A small number of carriers, however, account for the vast majority of per- call and per- phone compensation owed and payphone clearinghouses provide a mechanism for payment from these carriers to PSPs. Thus, the industry has developed mechanisms to handle compensation, despite the fact that there are numerous carriers and numerous PSPs. 92. In light of these facts, even if we were obligated to consider APCC’s proposal, we would reject it. The effect of the Fourth Reconsideration Order and this Order is to determine an amount of per- phone compensation and allocate this amount among carriers obligated to pay it. We then leave it to carriers and PSPs to determine the specific amounts of compensation and 156 AT& T Comments to Petition for Reconsideration (AT& T Comments) at 4 (May 1, 2002); Sprint Corporation on Petition for Reconsideration and Clarification (Sprint Comments) at 9- 10 (May 1, 2002). 157 APCC Petition at 17- 18. 158 Id. at 18. 159 AT& T Comments at 4 (May 1, 2002); WorldCom Inc. Comments on Petition for Clarification and Reconsideration (WorldCom, Inc. Comments) at 8 (May 1, 2002); Sprint Comments at 8- 10 (May 1, 2002). 160 APCC Petition at 13- 14. 37 Federal Communications Commission FCC 02- 292 38 refunds owed. APCC asks us, essentially, to accept its representations that only one or a very few carriers owe a net refund, and then conclude that we should abandon individual resolution of compensation for the Interim and Intermediate Periods in favor of ordering underpaying carriers to make the overpaying carriers whole. APCC’s proposal is superficially simple, but ultimately unworkable. APCC’s proposal would require us to manage the entire process, as we would need to take our allocation, multiply it by the total number of payphones for which compensation is owed, subtract out compensation each carrier may have already paid, and thus obtain net amounts for each carrier. We simply do not have the record or the resources to allow us to make these determinations. We have insufficient data in the record to allow us to obtain a reliable number of total payphones for which compensation is still owed, and insufficient data in the record that would allow us to determine how much most of the carriers listed on Appendix A may have already paid. Even if we did have sufficient data to do so, APCC makes no suggestion as to how we might equitably allocate payment obligations among underpaying carriers, and instead assumes that we can somehow equitably pro rate payment among carriers. 93. In sum, far from being a “relatively simple matter” to calculate and apply these payment obligations, APCC’s proposal would require unprecedented regulatory intervention into the payment process and continuing management of it, is fraught with problems and provides no guarantee whatsoever of finality for the industry. Moreover, PSPs have now been on notice since the release of the Third Report and Order in February, 1999, that they would be required to offset refunds against compensation owed and have had adequate time to prepare for payment or otherwise settle this obligation. It would be irresponsible for us to discard this long- expected mechanism in favor of APCC’s poorly- defined alternative. 94. Therefore, we deny APCC’s petition for reconsideration to the extent it asks us to establish a carrier- to- carrier mechanism for resolving payments and refunds. We affirm the decisions in the Third Report and Order and the Fourth Reconsideration Order that payment of outstanding compensation for the Interim and Intermediate Periods, and payment of refunds, shall be made between carriers and PSPs. We do, however, reiterate our conclusion in the Fourth Reconsideration Order that we do not prohibit alternative arrangements between or among carriers with the agreement of the PSP. Rendering Claims for Compensation and Refunds 95. In making its proposal that carriers should render bills when they claim refunds from PSPs, APCC argues that the Commission should not allow carriers to take advantage of an offset process. 161 APCC believes such a process would allow carriers to use a self- help remedy of withholding future payments from PSPs, and that the carriers would have no incentive to resolve such disputes in a timely manner. 162 In considering this question, we recognize that PSPs are often at a disadvantage in the per- call compensation process. For example, as we noted above, PSPs often do not have sufficient information to determine which carriers ultimately completes a given call, PSPs are prohibited from blocking calls, and carriers have few incentives at the present time to facilitate the move to a market- determined per- call compensation amount. The clearinghouse systems undoubtedly provide efficient resolution of per- call compensation for hundreds of PSPs, but can also exacerbate the PSPs’ disadvantage by facilitating the self- help remedies described by APCC. The carriers commenting in this proceeding are correct that true 161 See APCC Petition at 17. 162 Id. At 18.. 38 Federal Communications Commission FCC 02- 292 39 ups, and other forms of offset, are an established and efficient means of resolving outstanding payment obligations between parties in commercial relationships. While offsets are thus the most efficient way to resolve refunds claimed against PSPs, we remain concerned that, in ordering a resolution of compensation owed for past periods, we may further disadvantage PSPs in obtaining future payments to which they are undoubtedly entitled. While we will not discard offset mechanisms in favor of APCC’s proposed solution, we believe it is necessary to clarify how carriers and PSPs should handle the compensation and refund process. 96. Before doing so, however, we note that, aside from APCC’s proposal, we have only received a few a comments as to how payment mechanisms might work. For example, the National Payphone Clearinghouse argues that handling past period could take as long as nine months, 163 but we have little information in the record as to how PSPs and carriers might otherwise be able to render payment to one another. IXCs have argued that commercially standard practices should apply but apart from arguing for offsets have not provided many details. 164 Thus, we are at something of a disadvantage in establishing enforceable or effective mechanism for rendering payments. Even assuming a large number of payments will be made through clearinghouses, payment mechanisms between specific carriers and PSPs may vary significantly and we have no assurance that exhaustive, and probably unrealistic, regulatory requirements will prove to be more efficient or timely than allowing the industry to manage these payments. 165 Nevertheless, we also note that it appears much of the data necessary to calculate amounts owed – for example, the number of calls handled by specific carriers, and the PSPs originating the calls – has been available to carriers and clearinghouses for some time, and much of the methodology for compensation was settled by our Fourth Reconsideration Order. We thus anticipate that PSPs and carriers will be able resolve these disputes promptly and in the course of business, and note that the continuing obligation to pay interest on amounts owed by PSPs to carriers and vice versa will continue to provide parties with an incentive to render payment in a timely manner. 97. Accordingly, we provide the following guidelines to clarify the requirements of the Third Report and Order. As we establish below, this Order will be effective 30 days after it is published in the Federal Register. After this effective date, PSPs and carriers may render bills to one another or otherwise arrange for payment of outstanding Interim and Intermediate Period compensation obligations or refunds. They may use whatever commercially reasonable payment or dispute resolution processes to handle this process they may currently use in their dealings with one another or to which they may otherwise mutually agree, including clearinghouse processes. In accordance with the Third Report and Order that “IXCs may recover their overpayments to the PSPs at the same time as the PSPs receive payment from the IXCs for the Interim Period” 166 we clarify that this means IXCs (or other carriers rendering payment) shall 163 National Payphone Clearinghouse Comments on Petition for Reconsideration at 3 (May 5, 2002). 164 See, e. g., AT& T Comments at 4. 165 For these reasons, we specifically decline to require payment on compensation to be made within thirty days after release of this order, as the RBOC Coalition has requested. RBOC Coalition Petition for Reconsideration at 2 (April 3, 2002). It would be unrealistic to impose such a short maximum period for payment when it is possible that not all PSPs, or clearinghouses that handle payments, would be able to calculate and render payment in such a short period of time. 166 Third Report and Order, 14 FCC Rcd at 2636, ¶ 198. 39 Federal Communications Commission FCC 02- 292 40 initially claim an offset for refunds of overpayments only against amounts claimed by the PSP for Interim and Intermediate Period compensation. Only after the carrier and the PSP have resolved the offset against this amount, “the IXC may deduct the remaining overpayment from future payments to PSPs.” 167 We further clarify, however, that IXCs (or other carriers claiming refunds) may only withhold undisputed amounts from future payments. Thus, any carrier wishing to deduct a refund out of future payments to PSPs may only do so after providing that specific PSP notice of the refund claimed, and allowing the PSP adequate time to dispute the claim. To the extent a PSP disputes any portion of the refund claimed, the carrier may not deduct that portion from any future payment until it resolves the dispute with the PSP. Again, carriers and PSPs may use existing commercially reasonable processes to handle these disputes and arrange for payment. The only requirement we place on these processes is that if a carrier is able to apply undisputed amounts against future payments, the carriers must allow PSPs to make payments of refunds over a reasonable number of future payments, subject to ongoing accrual of interest, if reasonably requested by the PSP. 98. The above guidelines will help ensure that compensation is fair. We agree with APCC that if we allowed carriers to exercise such a self- help remedy without any restraint, we would place the carriers in a significantly better position in claiming refunds than we have placed PSPs in claiming amounts owed to them since 1996: PSPs will need to claim such amounts from carriers, who will have ample opportunity to dispute amounts owed and apply refunds before making any payment; PSPs would be forced to forego future payments owed for originating calls, and the carrier applying the offset would have little incentive to resolve the dispute in a timely manner. This can hardly be considered fair, and we agree with APCC that the payment process must take account of the possibility and clarify our orders to correct it, while still enabling carriers and PSPs to resolve payments in an efficient manner. Interest Applied to Late Payments 99. In the Fourth Reconsideration Order, we determined that the IRS- prescribed interest rate should apply to payment of Interim and Intermediate Period compensation, as well as to refunds owed by PSPs to carriers. The RBOC Coalition argues that while we could apply the IRS- prescribed interest rate to refunds, the interest rate necessary to compensate PSPs for compensation delay must be set at a rate that reflects the cost of capital of local exchange carriers, 11.25%. 168 WorldCom, Sprint and AT& T all oppose the RBOC Coalition’s argument and argue that the IRS- prescribed interest rate should continue to apply. 169 100. The Commission fully considered and disposed of this issue in the Fourth Reconsideration Order. The RBOC Coalition has provided us with no new information or arguments as to why the rate of return for incumbent local exchange carriers should be applied indiscriminately, when we have clearly acknowledged that payments will flow not only from carriers to LEC- owned PSPs but also from carriers to independent PSPs and all PSPs to carriers. 170 The Commission’s intention by applying the IRS- prescribed interest rate is to 167 Id. at 2636- 37, ¶ 198. 168 RBOC Payphone Coalition’s Reply to Comments on Petitions for Reconsideration of the Fourth Order on Reconsideration and Order on Remand (RBOC Reply) at 4- 5 (May 13, 2002). 169 AT& T Comments at 3; Sprint Corporation Comments at 2; WorldCom Comments at 10. 170 Adopting the RBOC Coalition’s petition could lead to calculation of a rate for each carrier, depending on the cost of capital of the party paying the interest and the cost of capital of the 40 Federal Communications Commission FCC 02- 292 41 reasonably capture the time value of money for all parties owed payment, and not to capture an appropriate rate for return on invested capital. Thus, we deny the RBOC Coalition’s petition for reconsideration. 101. We do, however, clarify that because we have reinstated the 0.9 cent interest rate component as described above, 171 the IRS- prescribed interest rate will only begin to accrue after the date payment normally would have been rendered under the quarterly payment system applicable to payphone compensation. Consistent with our assumptions under prior orders, 172 the IRS- prescribed interest rate for payments that should have been made for the first quarter of the year will begin accruing on July 2 of that same year, for the second quarter of the year on October 2 of that same year, for the third quarter on January 2 of the next year, and for the fourth quarter on April 2 of the next year. WorldCom Petition Regarding Inmate Calls 102. In the Fourth Reconsideration Order, we concluded that PSPs that provided inmate service during the Interim Period are entitled to per- call compensation from their presubscribed IXC, assuming they are not otherwise compensated for such calls. 173 According to WorldCom, in contrast to inmate calls not otherwise compensated, “PSPs were fully entitled to be compensated for all other types of coinless calls, and were therefore able to comply with the Commission’s one- year limit on the submission of compensation claims.” 174 The one- year limit referred to by WorldCom is the guideline set forth by the Commission in the First Report and Order that “[ c] arriers should not refuse payment on timeliness grounds . . . for [claims] submitted by a PSP up to one year after the end of the period in question.” 175 Thus, WorldCom asks us to clarify that, with the exception of these inmate calls, PSPs may not now submit any new claims for any other type of coinless call once the one year deadline for submitting calls for compensation has passed. 176 The only conclusion we made with regard to delayed submission of claims for per- call compensation in the Fourth Reconsideration Order was that PSPs could claim compensation for inmate services rendered during the Interim Period if the PSP was not otherwise compensated. We did not otherwise modify or amend our guidelines that other types of coinless calls should be submitted for compensation within one year. In light of the clear context of our discussion in the Fourth Reconsideration Order, it is not necessary for us to further clarify our holding. party receiving the interest. In this situation, there are a number of PSPs who will pay interest for overpayments received for the Interim Period which have a cost of capital higher than 11.25 percent and there may be IXCs who will pay interest for underpayments for the Interim Period which have a cost of capital lower than 11.25 percent. 171 See supra at III. A. 4. 172 Second Report and Order, 13 FCC Rcd at 1805- 06, ¶ 60; Third Report and Order, 14 FCC Rcd at 2630- 31, ¶¶ 188- 89; Fourth Reconsideration Order, 17 FCC Rcd at 2032, ¶ 31. 173 Fourth Reconsideration Order at 2031, ¶¶ 27- 29. 174 WorldCom Petition for Reconsideration at 4- 5. 175 First Report and Order, 11 FCC Rcd at 20598, ¶ 113. 176 WorldCom Petition for Reconsideration at 4- 5. 41 Federal Communications Commission FCC 02- 292 42 Asset Valuation and Targeted Blocking Asset Valuation 103. In implementing section 276( b)( 1)( B) ’s mandate to remove subsidies from payphone operations, 177 the Commission required the deregulation of payphone assets. 178 Upon deregulation of payphone assets, LECs are allowed either to maintain their payphone assets in their books of account but reclassify the assets as nonregulated, or to transfer the payphone assets to a structurally separate affiliate. 179 In the First Report and Order, the Commission stated that LECs that choose not to transfer their payphone assets to a separate affiliate may maintain these assets on their books at net book value. 180 The Commission further stated that, under its affiliate transaction rules, if a LEC transfers its payphone assets to either a separate affiliate or an operating division that has no joint and common use of assets or resources with the LEC and maintains a separate set of books, the LEC must record the transfer of assets to the separate books at the higher of fair market value or net book value. 181 The Commission concluded that fair market valuation will capture any appreciation in value of those assets, “thus ensuring that any eventual gains would accrue to the benefit of the ratepayers and shareholders.” 182 104. In Illinois, the D. C. Circuit vacated and remanded the Commission’s decision with respect to asset valuation, holding that the Commission’s decision to require fair- market valuation of assets transferred to a separate subsidiary violated the principles of Democratic Central Committee v. Washington Metropolitan Area Transit Commission. 183 Specifically, the court held that the Commission’s requirement of fair market valuation effected a transfer of the value of shareholder assets to ratepayers. Applying Democratic Central, the court held that LEC shareholders were entitled to any increase in value in payphone assets because, under price caps, they had borne the risk of loss associated with them. 184 The D. C. Circuit further held that any transfer of payphone assets to a separate affiliate is a one- time industry reform to which the Commission’s asset transfer rules, which are aimed at “on- going” and “systematic” transfers between affiliates, simply do not apply. 185 105. Three parties filed comments relevant to this issue: the RBOC Coalition; the United States Telephone Association (USTA): and the Competitive Policy Institute (CPI). The RBOC Coalition and USTA support the net book value methodology. In addition to endorsing the court’s conclusions, the RBOC Coalition pointed out that the net book value methodology 177 Section 276( a)( 1) provides that “any Bell operating company that provides payphone service shall not subsidize its payphone service directly or indirectly from its payphone service directly or indirectly from its telephone exchange service operations or its exchange access operations.” 47 U. S. C. § 276 (a) (1). Subsection (b) of § 276 requires the Commission to issue “regulations that… discontinue… all intrastate and interstate payphone subsidies from basic exchange and exchange access revenues.” Id. U. S. C. § 276 (( b)( 1)( B). 178 See First Report and Order, 11 FCC Rcd at 20611- 14, ¶¶ 142- 145. 179 47 C. F. R. § 32.27( b). 180 First Report and Order, 11 FCC Rcd at 20623- 20628, ¶ 163. 181 Id., at 20624, ¶ 164. 182 First Report and Order, 11 FCC Rcd at 20625, ¶ 165. 183 485 F. 2d 786, 806 (D. C. Cir. 1973), cert. denied, 415 U. S. 935 (1974). 184 Illinois, 117 F. 3d at 570. 185 Id. 42 Federal Communications Commission FCC 02- 292 43 has been used consistently by the Commission when detariffing CPE in the past. 186 The RBOC Coalition also maintains that net book value for one time transfers of payphone assets is required by GAAP and endorsed by the courts. 187 CPI contends that the Commission correctly decided that payphone assets that are transferred to a separate affiliate be transferred at the higher of net book value or fair market value. 188 CPI also contends that the court relied on an “imperfect understanding of how price caps function” and thus incorrectly concluded that price caps shift the risk from the ratepayers to the shareholders. 189 CPI lists five attributes of price cap regulation which, in its judgment, undermine the court’s view that the advent of price cap regulation shifts the risk of loss entirely to shareholders. 106. Whatever the merits of CPI’s arguments might be, we are constrained by the currently applicable holding of the D. C. Circuit to apply net book value. The court could not have been clearer that the Commission’s affiliate transaction rules do not apply to the transaction in question, and also could not have been clearer that the potential risk borne by shareholders requires use of net book value under Democratic Central. The court’s holding, however, was set forth in the specific context of the transfers at issue in the First Report and Order. Thus, to avoid confusion as to the reach of our implementation of the court’s decision, we provide clarification as follows. If a LEC chooses to retain payphone assets, reclassification of these assets from regulated to nonregulated status must be consistent with section 32.32 and our Part 64 cost allocation rules. If a LEC chooses to make a one- time transfer of payphone assets to a nonregulated affiliate or operating division, then such a transfer would be recorded at net book value. 190 We expressly limit this treatment to only such transfers as may be made pursuant to our implementation of section 276( b)( 1)( B), as it is only these types of transfers that could reasonably be considered the kind of one time industry reform contemplated by the D. C. Circuit. 191 186 RBOC/ GTE/ SNET Payphone Coalition Comments at 40 (Aug. 26, 1997). 187 Id. 188 Competitive Telecommunications Association Comments at 9 (August 26, 1997). 189 Id. 190 We note that, at this point, this holding may have little practical effect. Historically, payphone assets comprised less than 1 per cent of a LEC’s physical plant. Today, that percentage has continued to shrink due in large part to the dramatic growth of wireless alternatives. SBC Communications, parent of several large phone companies and Qwest Communications, parent of US West, have over the past few years tried to sell their payphone divisions. When no buyers emerged, the companies resorted to hiking the cost a local call to as much as 50 cents, and both are rapidly removing unprofitable phones. Not too long after Bell South Corp. transferred its payphone assets to a separate affiliate, the RBOC announced it was getting out of the payphone business no later than 2003. 191 To the extent a transfer of payphone assets does not meet these requirements, the Commission’s affiliate transaction rules would apply. In this event, we take this opportunity to remind carriers that they should include in fair market valuations of payphone assets the going concern value associated with location contracts supporting the payphone assets. See First Report and Order, 11 FCC Rcd at 20624- 25, ¶ 164; First Reconsideration Order, 11 FCC Rcd at 21315- 317, ¶¶ 181- 87. 43 Federal Communications Commission FCC 02- 292 44 Targeted Blocking 107. As the Commission explained in the Third Report and Order, “targeted call blocking refers to the technological ability of an IXC to not accept (or ‘block’) a dial- around access code call from one payphone while accepting calls from another payphone.” 192 In its Petition for Reconsideration of the Third Report and Order, CPA argues that the Commission erred when it did not require IXCs to implement targeted call blocking. 193 Because CPA raises no new evidence or arguments not already considered, we deny CPA’s petition on this issue. 108. CPA argues that the Commission failed to take a “critical step” towards realizing its goal of a deregulated market for per- call compensation, and should have required IXCs to implement targeted call blocking. 194 CPA argues that even if targeted call blocking would impose huge costs on IXCs, the Commission was nevertheless “required” to order IXCs to implement targeted call blocking because the Commission found the technology “feasible” and “necessary to achieve a market solution,” and “because it is crystal clear that the IXCs lack any incentive to make it happen on their own.” 195 IXCs have responded that targeted call blocking would impose significant costs on the industry, and Sprint argues that such a requirement is beyond the scope of this proceeding. 196 109. As is made clear from the Third Report and Order, CPA raises no new arguments or evidence sufficient to convince us that we should now impose targeted call blocking in response to its petition. The Commission was clearly aware that targeted call blocking existed at the time of the Third Report and Order and discussed the costs, incentives and market dynamics related to this technology and per- call compensation in exhaustive detail. After considering all of these factors, we did not impose any specific obligation to deploy this technology. CPA has not made any novel argument it could not have made during our consideration of the Third Report and Order, nor has CPA presented some new piece of evidence not previously available that would warrant reconsideration. Procedural Matters Effective Date 110. In publishing the Fourth Reconsideration Order in the Federal Register the Commission adopted an effective date of January 1, 2003, although the text pf the Fourth Reconsideration Order omitted this date. Several parties take issue with this effective date and have petitioned for reconsideration or clarification of this date. 197 To the extent that this omission created any confusion, we now clarify that the effective date of the Fourth Reconsideration Order and this Order shall be 30 days after the date that this Order is published in the Federal Register. 111. Accordingly, the requirements of the Fourth Reconsideration Order and this Order, when they take effect, will obligate carriers and PSPs to render compensation and refunds 192 Third Report and Order, 14 FCC Rcd at 2572 n. 103. 193 CPA Petition at 17- 19. 194 CPA Petition at 16- 19. 195 CPA Petition at 7- 8. 196 Sprint Comments at 6- 7; AT& T Comments at 6. 197 RBOC Reply at 6 (requesting that the Commission “revise the effective date of the order” to include compensation “as soon as possible”); Sprint Comments at 5; WorldCom Comments at ii. 44 Federal Communications Commission FCC 02- 292 45 to one another for past periods. We are sensitive to the concerns of carriers that in setting an effective date, the Commission should allow sufficient time to manage the task of determining what amounts are to be paid to each PSP. 198 We are, however, also sensitive to the fact that the compensation questions flowing from this Order have been pending at the Commission for some time. Moreover, there is no reason to prevent a PSP from calculating and rendering a bill for compensation if it is able to do so shortly after this Order is published. Indeed, allowing PSPs to do so will significantly advance the common interest of the Commission and all parties to this proceeding in accelerating resolution of payment for these periods. Furthermore, with the release of the Fourth Reconsideration Order, parties were put on notice that an allocation of financial responsibility would be forthcoming from the Commission. Thus, the obligations established in this Order should not constitute any kind of surprise for affected parties. For these reasons, we decline to defer the effective date of the compensation established in this Order until all Commission and court review is completed. 199 Thus, once any PSP or carrier has performed the tasks necessary to render bills for compensation or refunds in accordance with this Order, the PSP or carrier may render such bills as soon is practicable after the effective date of this Order, provided that they observe the guidelines for resolution of offsets as set forth above. 200 Final Paperwork Reduction Act Analysis 112. This decision has been analyzed with respect to the Paperwork Reduction Act of 1995, Pub. L. 104- 13, and it contains no new or modified information collections subject to Office of Management and Budget review. Supplemental Final Regulatory Flexibility Act Analysis on Reconsideration 113. Pursuant to the Regulatory Flexibility Act of 1980, as amended, see 5 U. S. C. § 604, the Commission's Supplemental Final Regulatory Flexibility Analysis for this order is attached as Appendix G. Ordering Clauses 114. Accordingly, pursuant to the authority contained in 47 U. S. C. §§ 151, 154, 201- 205, 215, 218, 219, 220, 226, 276 and 405, IT IS ORDERED that the policies, rules and requirements set forth herein ARE ADOPTED. 115. IT IS FURTHER ORDERED that the Commission's Consumer Information Bureau, Reference Information Center, SHALL SEND a copy of this Fifth Order on Reconsideration and Order on Remand, including the Supplemental Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. FEDERAL COMMUNICATIONS COMMISSION Marlene H. Dortch Secretary 198 Sprint Comments at 5. 199 APCC Reply at 10. 200 See supra at III. D. 1. b. 45 Federal Communications Commission FCC 02- 292 46 46 Federal Communications Commission FCC 02- 292 APPENDIX A Interim Period Allocation List Name Percentage Amount AT& T Communications 35.6752385% $12.56624601 MCI 27.1012154% $9.54613210 Sprint 11.8235636% $4.16473205 WorldCom 11.7792597% $4.14912643 LCI International 2.5385089% $0.89416436 Frontier Communications Services 2.3634942% $0.83251720 ILEC 2.19% 2.1900000% $0.77140560 Cable & Wireless 0.9357654% $0.32961401 Global Crossing Telecommunications 0.6794139% $0.23931675 Switched Service Communications 0.5008847% $0.17643164 U. S. Long Distance 0.4286315% $0.15098115 Tel America 0.3227813% $0.11369647 WorldCom Technologies 0.2815205% $0.09916277 Qwest 0.2801439% $0.09867788 Long Distance Savers 0.1505964% $0.05304608 Frontier Communications- North Central Region 0.1446970% $0.05096805 Pac- West Telecomm dba AmeriCall 0.1425208% $0.05020151 Frontier Communications Int'l, Inc. 0.1390850% $0.04899130 Telco Communications Group dba Dial & Save 0.1360130% $0.04790920 Bell Atlantic Communications 0.1346397% $0.04742549 Brooks Fiber Communications 0.1134805% $0.03997236 Business Telecom, Inc. (BTI) 0.1101138% $0.03878650 NETECH Comm. (US West) 0.0989391% $0.03485029 One Call Communications 0.0986707% $0.03475578 ATX Telecommunications Services 0.0941000% $0.03314579 McLeodUSA 0.0938146% $0.03304526 WorldXChange 0.0844956% $0.02976272 American Network Exchange (AMNEX) 0.0666730% $0.02348490 Broadwing Communications Services Inc. 0.0551409% $0.01942282 American Telco 0.0534454% $0.01882561 WesTel 0.0517618% $0.01823259 West Coast Telecommunications 0.0513034% $0.01807112 OCI 0.0503072% $0.01772023 Access Long Distance 0.0448941% $0.01581348 Total- Tel USA 0.0442117% $0.01557311 GST Call America 0.0429595% $0.01513205 NYNEX - Corridor 0.0404028% $0.01423148 US Long Distance 0.0384286% $0.01353608 Eastern Telecom International 0.0362242% $0.01275963 Network Operator Services 0.0351831% $0.01239290 GTE Communications Corp. 0.0344361% $0.01212976 Shared Communications Services 0.0329638% $0.01161116 Long Distance/ USA (Sprint) 0.0321199% $0.01131393 DeltaCom L. D. S. 0.0299628% $0.01055411 Tandem Access for Database Query 0.0260948% $0.00919165 47 Federal Communications Commission FCC 02- 292 2 The CommuniGroup Of KC 0.0245338% $0.00864178 Ameritel 0.0244719% $0.00861997 US WATS 0.0237662% $0.00837141 LONG DISTANCE OF MICHIGAN 0.0231463% $0.00815304 Consolidated Network 0.0223181% $0.00786132 Westinghouse Electric Corp. 0.0210979% $0.00743153 ICON Communications 0.0205224% $0.00722881 T- NETIX, Inc. 0.0201631% $0.00710224 Telecom* USA (MCI) 0.0186833% $0.00658099 Teltrust 0.0178732% $0.00629566 EconoPhone 0.0176599% $0.00622051 Switch 2000 0.0158645% $0.00558811 VarTec Telecom 0.0153027% $0.00539021 Chadwick Telephone 0.0149991% $0.00528328 One Star Long Distance 0.0142973% $0.00503608 Capital Telecommunications 0.0142091% $0.00500501 BN1 Telecommunications 0.0141515% $0.00498473 I- Link Communications 0.0138405% $0.00487516 American Telecommunications Enterprises 0.0137892% $0.00485709 Touch America, Inc. 0.0137339% $0.00483762 U. S. Link 0.0134288% $0.00473015 Nationwide Communications 0.0133776% $0.00471211 Deluxe Data Systems 0.0132089% $0.00465272 Long Distance Management 0.0129085% $0.00454690 Intermedia Communications 0.0127663% $0.00449680 XO Communications 0.0127328% $0.00448501 NATIONAL Telecom of Florida 0.0122282% $0.00430726 Feist Long Distance 0.0122252% $0.00430620 Intercontinental Communications Group (ICG) 0.0119296% $0.00420207 American Long Lines 0.0114326% $0.00402701 Call America Business Comm. Corp. 0.0095168% $0.00335218 IBM (Advantis) 0.0091183% $0.00321183 Valu- Line of Kansas 0.0081410% $0.00286759 General Communication 0.0079124% $0.00278708 North American Communications 0.0077779% $0.00273969 Eastern Telephone Systems 0.0077552% $0.00273169 MFS Intelnet 0.0077267% $0.00272166 Fox Communications 0.0076554% $0.00269654 Global Crossing Telemanagement 0.0073930% $0.00260412 ATI Telecom 0.0073558% $0.00259101 Hedges & Associates 0.0073188% $0.00257797 Cincinnati Bell Long Distance 0.0060972% $0.00214766 Telemanagement Consultants Corp. 0.0060399% $0.00212750 US Communications 0.0059806% $0.00210660 Network Plus 0.0057186% $0.00201433 Action Telcom Co. 0.0056086% $0.00197558 GST Telecom 0.0055754% $0.00196386 Ciera Network Systems 0.0053358% $0.00187949 Long Distance Discount 0.0049896% $0.00175754 Frontier Communications of the Great Lakes 0.0049638% $0.00174843 48 Federal Communications Commission FCC 02- 292 3 Electric Lightwave 0.0048339% $0.00170270 Long Distance Wholesale Club (Excel) 0.0047378% $0.00166884 Eclipse Communications 0.0047049% $0.00165727 ConQuest 0.0045662% $0.00160842 CUSTOMER TELECOM NET dba CTN 0.0045581% $0.00160555 POPP Telcom 0.0045046% $0.00158671 Off Campus Telecommunications 0.0043316% $0.00152577 Long Distance Telephone Savers 0.0043164% $0.00152041 PSP Marketing Group 0.0042606% $0.00150076 Telephone Assoc. Long Distance Svcs. 0.0038594% $0.00135945 Broadwing Telecommunications Inc. 0.0038149% $0.00134377 Cooperative Communications 0.0037533% $0.00132206 Cleartel Communications 0.0036203% $0.00127523 Austin Bestline 0.0034801% $0.00122582 KLP, Inc. dba Call- America 0.0033858% $0.00119262 United Communications 0.0032397% $0.00114116 Cherry Communications 0.0032314% $0.00113822 South Carolina Network 0.0031970% $0.00112610 The CommuniGroup 0.0031261% $0.00110112 Digital Network, Inc. 0.0028377% $0.00099956 IDS Long Distance 0.0028330% $0.00099791 Citizens Communications 0.0025995% $0.00091563 TCG 0.0024981% $0.00087993 Arcada Communications 0.0023550% $0.00082953 American Tel Group 0.0022940% $0.00080805 Countdown Communications 0.0022744% $0.00080114 Long Distance USA 0.0022334% $0.00078671 MRC Telecommunications 0.0022097% $0.00077833 TCA Long Distance 0.0021371% $0.00075277 Norlight Telecommunications 0.0020836% $0.00073392 Global Crossing Bandwidth 0.0017834% $0.00062817 Capital Network Systems (AMNEX) 0.0016996% $0.00059868 TransNet 0.0016856% $0.00059372 LCC 0.0016652% $0.00058656 Iowa Communications Network 0.0016243% $0.00057216 Parkway Communications 0.0016207% $0.00057087 TresCom U. S. A. 0.0015496% $0.00054582 Convergent Communications 0.0015135% $0.00053311 NEXTLINK 0.0013910% $0.00048996 Cypress Telecommunications Corp. (Cytel) 0.0013087% $0.00046097 Yavapai Telephone Exchange 0.0012903% $0.00045451 MVP Communications 0.0011185% $0.00039398 C- COM 0.0011021% $0.00038821 United Telephone Co. 0.0010314% $0.00036331 US Comm. dba Southwest L. D. N. 0.0010174% $0.00035838 CTS Telcom of Florida 0.0010157% $0.00035776 Telescan 0.0010114% $0.00035625 Ionex Telecommunications 0.0010013% $0.00035269 Logix Communications 0.0009404% $0.00033124 Phonetel Technologies 0.0009246% $0.00032569 49 Federal Communications Commission FCC 02- 292 4 AT& T Canada Long Distance Services Co. 0.0009223% $0.00032489 Mon- Cre Long Distance 0.0009146% $0.00032217 Connect America Communications 0.0008774% $0.00030905 Concord Telephone Long Distance 0.0008735% $0.00030770 WATS/ 800 0.0008587% $0.00030248 Athena International 0.0008516% $0.00029998 First Financial Management Corp. 0.0008481% $0.00029873 International Telcom, Ltd 0.0008441% $0.00029734 Sunshine Telephone Inc. dba SUNTEL 0.0008324% $0.00029319 Keystone Telecom 0.0008213% $0.00028929 Powercom Corp. 0.0008187% $0.00028838 Midco Communications 0.0007770% $0.00027368 T- One Communications 0.0007631% $0.00026880 Star Tel, Inc. 0.0007553% $0.00026604 Eastern Telecom dba InterQuest 0.0007479% $0.00026343 American Telesource International 0.0007413% $0.00026112 Econo. Call Long Distance Services 0.0007150% $0.00025186 TELUS Communications (Edmonton) 0.0006984% $0.00024599 Telehop Communications 0.0006840% $0.00024092 KTNT Communications 0.0006757% $0.00023802 AT& T EasyLink Services 0.0006601% $0.00023251 Valuline Long Distance 0.0006399% $0.00022538 American Express Travel Related Services 0.0006270% $0.00022086 Interlink Telecommunications 0.0005725% $0.00020165 US Link Long Distance 0.0005406% $0.00019041 Americall Communications 0.0005347% $0.00018836 Intl. 800 Telecom dba Telecall Long Dist. (EGLOBE) 0.0005293% $0.00018645 Union Telephone Co. 0.0004803% $0.00016918 Western Telecom, Inc. 0.0004568% $0.00016092 Uni- Tel of Farmington 0.0004503% $0.00015860 Euronet Communications Corp. 0.0004437% $0.00015629 Show- Me Long Distance 0.0004221% $0.00014869 North American Telephone 0.0004139% $0.00014579 Dial- Net, Inc. 0.0004132% $0.00014553 USLINK 0.0004120% $0.00014512 First Communications 0.0004057% $0.00014292 TelaMarketing Communications 0.0003922% $0.00013815 TXU Communications 0.0003481% $0.00012261 Shoreham Telephone 0.0003353% $0.00011809 U. S. Connect Corp. 0.0003313% $0.00011669 AT& T Global Network Services (AGNS) 0.0003161% $0.00011133 Telephone Communications Corp. 0.0003080% $0.00010850 Alternate Communications Technology 0.0003071% $0.00010817 Baystar Satellite Paging 0.0003000% $0.00010568 JSM Tele- Page 0.0002989% $0.00010527 Systems 1000 0.0002880% $0.00010145 Operator Service Co. 0.0002539% $0.00008944 Autumn Communications 0.0002291% $0.00008070 Call America/ Palm Desert 0.0002226% $0.00007842 NACT 0.0002222% $0.00007827 50 Federal Communications Commission FCC 02- 292 5 ACC Long Distance Corp. 0.0001873% $0.00006597 NTS Communications 0.0001863% $0.00006564 TTI Telecommunications 0.0001830% $0.00006446 Sound Communications West 0.0001828% $0.00006439 National Network Corp. 0.0001826% $0.00006432 ARCADA 0.0001798% $0.00006332 PT- 1 Communications 0.0001798% $0.00006332 LCI 0.0001658% $0.00005840 TresCom U. S. A., Inc./ TresCom Caribbean 0.0001524% $0.00005366 Execulines of Sacramento 0.0001521% $0.00005359 Dancris Comm. 0.0001441% $0.00005076 Midcom of Arizona, Inc 0.0001432% $0.00005043 Digital Technologies 0.0001397% $0.00004922 Connect Americom Corp. 0.0001359% $0.00004786 Communications Options 0.0001329% $0.00004680 KRB Telecom 0.0001301% $0.00004584 Connect America Corp. 0.0001199% $0.00004224 Oncor Communications 0.0001195% $0.00004209 Tele Tech 0.0001177% $0.00004147 ECI Communications 0.0001161% $0.00004088 NTS Communications/ GMW Co. 0.0001116% $0.00003930 Ameritech 0.0001110% $0.00003908 Capsule Communications 0.0001063% $0.00003743 Telenet Comm. Corp. 0.0001055% $0.00003717 American Telecommunications Holding 0.0001038% $0.00003655 Citilink of UT 0.0001035% $0.00003647 NTI 0.0001030% $0.00003629 Business Discount Plan dba LD Discount Plan 0.0001007% $0.00003548 Home Owners L. D. dba HOLD Billing Svcs. 0.0000993% $0.00003497 QCC, Inc. 0.0000964% $0.00003394 Tele- Sys., Inc. 0.0000953% $0.00003357 Telecom Affiliates 0.0000894% $0.00003148 USLink Long Distance 0.0000871% $0.00003067 Americom Communications 0.0000859% $0.00003027 L. D. Services 0.0000839% $0.00002957 Telecommunications Service Center 0.0000824% $0.00002902 SWITCHED SERVICE 0.0000820% $0.00002887 Nuestra Telefonica 0.0000715% $0.00002520 Alternative Long Distance dba Money $avers 0.0000636% $0.00002241 Call Savers 0.0000592% $0.00002086 Excel Telecommunications 0.0000554% $0.00001950 Asia International Services Corp. 0.0000554% $0.00001950 WestCom Inc. (Western Telecom, Inc.) 0.0000501% $0.00001763 ComCentral dba Southnet Services 0.0000467% $0.00001646 ABC Telecom 0.0000465% $0.00001638 Gulf Long Distance 0.0000463% $0.00001631 SouthTel Corp. 0.0000461% $0.00001624 Valu- Line of Amarillo 0.0000456% $0.00001605 TELECOM WEST 0.0000441% $0.00001554 Sound Communication 0.0000439% $0.00001546 51 Federal Communications Commission FCC 02- 292 6 DeltaCom Long Distance Services 0.0000429% $0.00001510 Hi- Rim Communications 0.0000428% $0.00001506 RSL COM U. S. A. 0.0000421% $0.00001484 Olympic Telecommunications 0.0000419% $0.00001477 Communication Cable Laying Co. 0.0000404% $0.00001421 Atlantic Telephone Co. 0.0000393% $0.00001385 Integrated Systems Corp. 0.0000373% $0.00001315 FIRSTEL, INC 0.0000371% $0.00001308 Access Services dba Pacific NW Telecom 0.0000365% $0.00001286 Amerinet Communications 0.0000348% $0.00001227 International Cellular 0.0000348% $0.00001227 NYNEX 0.0000315% $0.00001109 Coast to Coast Telecommunications 0.0000293% $0.00001032 VarTec Telecom dba Clear Choice Communicat 0.0000277% $0.00000977 CCC Communications Corp. (Z- TEL, Inc.) 0.0000267% $0.00000940 International Telephone Corp. 0.0000264% $0.00000929 Light Link Inc dba Taylor Comm. Grp. 0.0000260% $0.00000915 R, D,& J Communications Mgmt. 0.0000254% $0.00000896 Sprint Canada, Inc. 0.0000242% $0.00000852 TEL- SPAN COMMUNICATIONS 0.0000235% $0.00000826 DeltaCom, Inc. 0.0000235% $0.00000826 BMG/ TELEMANAGEMENT SYSTEMS (BMG) 0.0000230% $0.00000812 Long Distance International 0.0000221% $0.00000779 Eclipse Telecommunications 0.0000221% $0.00000779 Telephone Assoc. dba Thief River Falls LD 0.0000217% $0.00000764 Tel Serv 0.0000215% $0.00000757 Roseville Telephone Co. 0.0000210% $0.00000738 Valu- Line of Longview 0.0000208% $0.00000731 Working Assets 0.0000191% $0.00000672 Souris River Telecommunications 0.0000188% $0.00000661 EGLOBE INC dba INTL. 800 TELECOM dba TELECAL 0.0000186% $0.00000654 Call America of Riverside 0.0000184% $0.00000646 Independent Network Services 0.0000173% $0.00000610 TSC Communications 0.0000172% $0.00000606 Fone America 0.0000172% $0.00000606 Primus 0.0000165% $0.00000580 Commonwealth Telecom Services 0.0000164% $0.00000577 WCS Operators 0.0000163% $0.00000573 WinStar 0.0000159% $0.00000558 Hertz Technologies 0.0000156% $0.00000551 Iowa Network Services 0.0000151% $0.00000533 A & N Telecom 0.0000147% $0.00000518 Matrix Telecom 0.0000146% $0.00000514 Fones West Digital Systems 0.0000141% $0.00000496 Data & Electronic Services 0.0000131% $0.00000463 Payline Systems 0.0000119% $0.00000419 MIDCOM Communications 0.0000109% $0.00000386 Nationwide Emergency Telecomm. System 0.0000108% $0.00000382 GST Net 0.0000107% $0.00000378 52 Federal Communications Commission FCC 02- 292 7 Hi- Plains NTS Communications 0.0000103% $0.00000364 North County Communications Corp. 0.0000100% $0.00000353 Intel Communications 0.0000098% $0.00000345 Coast International 0.0000095% $0.00000334 fONOROLA 0.0000093% $0.00000327 ITC Networks 0.0000091% $0.00000320 PDQ Communications Source 0.0000086% $0.00000301 Teleport Communications Group 0.0000084% $0.00000298 Value Tel 0.0000080% $0.00000283 The Furst Group 0.0000078% $0.00000275 NexGen 511 0.0000078% $0.00000275 Telephone Express 0.0000074% $0.00000261 U S West Long Distance 0.0000073% $0.00000257 AUC Communications 0.0000072% $0.00000253 B. R. Communications 0.0000072% $0.00000253 U. S. Fibercom 0.0000066% $0.00000231 MetroLink 0.0000065% $0.00000228 Budget Call Long Distance 0.0000063% $0.00000220 DTG Communications 0.0000059% $0.00000209 American Discount Telecommunications 0.0000057% $0.00000202 U. S. Communications 0.0000057% $0.00000202 CEO Telecommunications 0.0000055% $0.00000195 NET- tel Corp. 0.0000055% $0.00000195 USN Communications 0.0000052% $0.00000184 EMI Communications Corp. 0.0000051% $0.00000180 Pacific Gateway Exchange 0.0000051% $0.00000180 Extelcom dba Express Tel 0.0000050% $0.00000176 Premier Long Distance Svcs. 0.0000049% $0.00000173 National Fibernet, Inc. 0.0000049% $0.00000173 ADDTEL Communications (SA Tel) 0.0000048% $0.00000169 Affiliated Telecom Svcs. 0.0000045% $0.00000158 Comwest Communications 0.0000045% $0.00000158 TTE OF CHARLESTON 0.0000044% $0.00000154 CoreComm 0.0000044% $0.00000154 Priority One Long Distance 0.0000043% $0.00000151 Digital Network Services 0.0000043% $0.00000151 Econ- A- Call Inc. of Hays 0.0000043% $0.00000151 National Telephone Communications 0.0000042% $0.00000147 Manitoba Telephone System 0.0000041% $0.00000143 ALLTEL Communications, Inc. 0.0000039% $0.00000136 AmeriVision Communications 0.0000039% $0.00000136 Interstate Telecom Svcs. 0.0000039% $0.00000136 SBS/ MCI 0.0000038% $0.00000132 Call Technology Corp. of Philadelphia 0.0000035% $0.00000125 METRONET Long Distance Communications 0.0000034% $0.00000121 Tel- One 0.0000026% $0.00000092 Century Telecommunications 0.0000025% $0.00000088 USP Communications 0.0000025% $0.00000088 Fibernet Telecommunications 0.0000024% $0.00000084 TelVue Corp. 0.0000024% $0.00000084 53 Federal Communications Commission FCC 02- 292 8 Public Phone 0.0000023% $0.00000081 Touch 1 Communications 0.0000022% $0.00000077 Trinet 0.0000022% $0.00000077 ILD Telecommunications 0.0000020% $0.00000070 Global Tone Communications 0.0000019% $0.00000066 HOTEL CONNECT 0.0000019% $0.00000066 ONE- 2- ONE Communications 0.0000018% $0.00000062 United Telephone Co. dba TELAMERICA L. D. 0.0000018% $0.00000062 Telco Holdings 0.0000016% $0.00000055 Caribbean Telecommunications Consortium 0.0000016% $0.00000055 Axces 0.0000016% $0.00000055 Fiberline Network Communications 0.0000016% $0.00000055 WorldCom dba Touch One Long Distance 0.0000016% $0.00000055 Tel- Optic, Inc. dba Universal Network Services 0.0000016% $0.00000055 MEANS Telcom 0.0000016% $0.00000055 United Telephone Long Distance 0.0000016% $0.00000055 LA CONEXION FAMILIAR, INC. 0.0000014% $0.00000048 Economy Telephone 0.0000014% $0.00000048 FiberNet Telemanagement 0.0000013% $0.00000044 Telecom One 0.0000011% $0.00000040 National Brands dba Sharenet Communications 0.0000011% $0.00000040 Empire One Telecommunications 0.0000011% $0.00000040 American Long Distance Corp. 0.0000010% $0.00000037 T- NET (Cable & Wireless) 0.0000010% $0.00000037 North American Telephone Network, Inc. 0.0000010% $0.00000037 Advanced Telecommunications Network 0.0000010% $0.00000037 Blue Mountain Cellular dba CellularOne 0.0000010% $0.00000037 American Long Distance Exchange 0.0000010% $0.00000037 SB Communications 0.0000010% $0.00000037 MCI/ 1- 800- COLLECT 0.0000010% $0.00000037 Telec Inc. 0.0000009% $0.00000033 LECNet, Inc. 0.0000009% $0.00000033 L. D. Network, Inc. 0.0000008% $0.00000029 Aliant Systems 0.0000008% $0.00000029 EATELNET 0.0000008% $0.00000029 Trans National Communications 0.0000008% $0.00000029 Preferred Telecom 0.0000008% $0.00000029 Star Tel of Abilene 0.0000008% $0.00000029 First Data Resources, Inc. 0.0000008% $0.00000029 Central Telephone Co. 0.0000007% $0.00000026 INFO- TEL, Inc. 0.0000007% $0.00000026 Commonwealth Telecom, Inc. 0.0000007% $0.00000026 Phoenix Network 0.0000007% $0.00000026 Vista Group International 0.0000006% $0.00000022 VALU- LINE OF ANGLETON 0.0000006% $0.00000022 Standard Long Distance 0.0000006% $0.00000022 EqualNet Corp. 0.0000005% $0.00000018 Farmers Long Distance 0.0000005% $0.00000018 Select Communications 0.0000005% $0.00000018 American Fiber Com 0.0000005% $0.00000018 54 Federal Communications Commission FCC 02- 292 9 REAMS COMMUNICATIONS dba VALULINE 0.0000005% $0.00000018 U. S. Republic Communications 0.0000005% $0.00000018 The Switchboard 0.0000005% $0.00000018 Regency Long Distance 0.0000005% $0.00000018 Future Connect 0.0000005% $0.00000018 Xtracom 0.0000005% $0.00000018 TresCom Puerto Rico 0.0000005% $0.00000018 U. S. Net 0.0000004% $0.00000015 Thrifty Call 0.0000004% $0.00000015 KDD America, Inc. 0.0000004% $0.00000015 ARC Networks 0.0000004% $0.00000015 Interstate Operators 0.0000004% $0.00000015 J B Operators 0.0000004% $0.00000015 Metro One Telecommunications 0.0000004% $0.00000015 Comtel Tech 0.0000004% $0.00000015 Telephone Support Systems 0.0000004% $0.00000015 Century Communications 0.0000004% $0.00000015 Group Long Distance 0.0000004% $0.00000015 Call America 0.0000004% $0.00000015 BC Tel 0.0000004% $0.00000015 The Phone Co. 0.0000003% $0.00000011 Century Long Distance 0.0000003% $0.00000011 STARTEC 0.0000003% $0.00000011 Friendship Long Distance 0.0000003% $0.00000011 National Fiber Com 0.0000003% $0.00000011 Associated Network Partners 0.0000003% $0.00000011 Northern Arizona Communications Corp. 0.0000003% $0.00000011 Northwest Telecom 0.0000003% $0.00000011 Progressive National Telephone Co. 0.0000003% $0.00000011 World Wide Connect 0.0000003% $0.00000011 Digital Communications 0.0000003% $0.00000011 Gala Communications 0.0000003% $0.00000011 TeleHub Communications Corp. 0.0000003% $0.00000011 Fastline Communication Network 0.0000003% $0.00000011 West River Long Distance 0.0000003% $0.00000011 Cable & Wireless (TDX) 0.0000003% $0.00000011 Fibernet, Inc. 0.0000003% $0.00000011 Incomnet Communications Corp. 0.0000002% $0.00000007 Tel- Share 0.0000002% $0.00000007 Coastal Long Distance Services 0.0000002% $0.00000007 Colorado River Communications 0.0000002% $0.00000007 TMC Long Distance dba Cherry Communications 0.0000002% $0.00000007 Nationwide Long Distance 0.0000002% $0.00000007 Heritage Communications 0.0000002% $0.00000007 Savemore Network 0.0000002% $0.00000007 OPTICOM ONE CALL 0.0000002% $0.00000007 Alascom 0.0000002% $0.00000007 BKC Telecommunications 0.0000002% $0.00000007 Network Billing & Collection 0.0000002% $0.00000007 Vortel Communications 0.0000002% $0.00000007 55 Federal Communications Commission FCC 02- 292 10 Rainier Cable 0.0000002% $0.00000007 St. Pierre Communication Network 0.0000002% $0.00000007 PNG Telecomms. dba PowerNet Global Commu 0.0000002% $0.00000007 BellSouth Long Distance 0.0000002% $0.00000007 Americatel 0.0000002% $0.00000007 Basico Group 0.0000002% $0.00000007 United Communications Assn., Inc. 0.0000002% $0.00000007 Telamerica Communications 0.0000001% $0.00000004 Cellnet 0.0000001% $0.00000004 CapRock Telemanagement 0.0000001% $0.00000004 Advanced Telecom, Inc. 0.0000001% $0.00000004 US TeleServices 0.0000001% $0.00000004 Execulines of North Central Region 0.0000001% $0.00000004 National Telephone Exchange (PA) 0.0000001% $0.00000004 SouthWest United Communication 0.0000001% $0.00000004 National Tele- Sav Inc. 0.0000001% $0.00000004 Discount Long Distance of America 0.0000001% $0.00000004 Sprint Local Telecommunications Division 0.0000001% $0.00000004 Sam's Discount Long Distance 0.0000001% $0.00000004 Scherers Communications Group 0.0000001% $0.00000004 BT North America 0.0000001% $0.00000004 Mountainview Communications 0.0000001% $0.00000004 TELCO 0.0000001% $0.00000004 OCOM Long Distance 0.0000001% $0.00000004 STANDARD TELCOM 0.0000001% $0.00000004 OmniCall 0.0000001% $0.00000004 RANGER TELECOMMUNICATIONS 0.0000001% $0.00000004 Long Distance Assistance 0.0000001% $0.00000004 Roanoke & Botetourt Telephone Co. 0.0000001% $0.00000004 Fairview Telecom 0.0000001% $0.00000004 Bluegrass Long Distance 0.0000001% $0.00000004 Valu- Line of St. Joseph 0.0000001% $0.00000004 Telelink 0.0000001% $0.00000004 TeleCable Corp. 0.0000001% $0.00000004 Federal TransTel, Inc. (FTT) 0.0000001% $0.00000004 UI Long Distance 0.0000001% $0.00000004 Texustel 0.0000001% $0.00000004 Continental Long Distance 0.0000001% $0.00000004 Marathon Communications 0.0000001% $0.00000004 Pioneer Telecom 0.0000001% $0.00000004 Starcom International Optics Corp. 0.0000001% $0.00000004 TeleData International 0.0000001% $0.00000004 ZEPTEL 0.0000001% $0.00000004 SouthEast Telephone, LTD. 0.0000001% $0.00000004 TRT Telecommunications Corp. 0.0000001% $0.00000004 Access- Plus 0.0000001% $0.00000004 Apple Communications 0.0000001% $0.00000004 Allgood Taylor Telephone 0.0000001% $0.00000004 Guide Network International 0.0000001% $0.00000004 Xnet, Inc. 0.0000001% $0.00000004 56 Federal Communications Commission FCC 02- 292 11 LDI Solutions 0.0000001% $0.00000004 Teleglobe USA 0.0000001% $0.00000004 Caribsat Telecommunications 0.0000001% $0.00000004 Innovative Telecom 0.0000001% $0.00000004 Bethany Telecom 0.0000001% $0.00000004 Westel Telecommunications, Ltd. 0.0000001% $0.00000004 Cincinnati Bell Telephone 0.0000001% $0.00000004 World Access Communications Corp.( WACC) 0.0000001% $0.00000004 BELL SOUTH BUSINESS SYSTEMS 0.0000001% $0.00000004 57 Federal Communications Commission FCC 02- 292 APPENDIX B Intermediate Period Allocation List Names Percentages Amounts AT& T Communications 35.24391644% $12.41431713 MCI 23.61161155% $8.31695405 WorldCom 12.96694860% $4.56747797 Sprint 12.51899810% $4.40969189 Frontier Communications Services 3.92149599% $1.38130775 LCI International 2.37673530% $0.83718124 ILEC 2.19% 2.19000001% $0.77140560 Cable & Wireless 0.97917273% $0.34490380 Switched Service Communications 0.49097550% $0.17294121 Global Crossing Telecommunications 0.42983911% $0.15140653 U. S. Long Distance 0.42561847% $0.14991985 LCI 0.33335911% $0.11742241 Telco Communications Group dba Dial & Save 0.31307165% $0.11027636 PT- 1 Communications 0.25384298% $0.08941365 Business Telecom, Inc. (BTI) 0.23496687% $0.08276473 Long Distance Savers 0.21586112% $0.07603492 Qwest 0.20372964% $0.07176173 IXC Communication Services 0.19060904% $0.06714013 Teltrust 0.18761125% $0.06608419 One Call Communications 0.14547001% $0.05124036 EconoPhone 0.14188411% $0.04997726 ATX Telecommunications Services 0.12896413% $0.04542633 WorldXChange 0.10813630% $0.03808993 Tel America 0.10673413% $0.03759603 American Network Exchange (AMNEX) 0.10326189% $0.03637297 Bell Atlantic Communications 0.09986097% $0.03517503 American Telco 0.08260508% $0.02909681 US Long Distance 0.08048481% $0.02834997 Total- Tel USA 0.07600848% $0.02677323 Cincinnati Bell Long Distance 0.06237390% $0.02197058 WesTel 0.06191358% $0.02180844 DeltaCom L. D. S. 0.06105990% $0.02150774 Consolidated Network 0.05901859% $0.02078871 OCI 0.05889480% $0.02074511 Broadwing Communications Services Inc. 0.05419353% $0.01908913 Network Operator Services 0.05175470% $0.01823007 NETECH Comm. (US West) 0.05022277% $0.01769047 Pac- West Telecomm dba AmeriCall 0.04830760% $0.01701587 Tandem Access for Database Query 0.04718756% $0.01662135 GTE Communications Corp. 0.04716124% $0.01661208 Frontier Communications of the Great Lakes 0.04687323% $0.01651063 NYNEX - Corridor 0.04680553% $0.01648678 McLeodUSA 0.04342555% $0.01529621 LONG DISTANCE OF MICHIGAN 0.04219019% $0.01486107 The CommuniGroup Of KC 0.04049647% $0.01426448 Telecom* USA (MCI) 0.03835522% $0.01351024 58 Federal Communications Commission FCC 02- 292 2 ACC Long Distance Corp. 0.02988201% $0.01052564 Network Plus 0.02915011% $0.01026784 Brooks Fiber Communications 0.02861186% $0.01007824 U. S. WATS 0.02782831% $0.00980224 American Long Lines 0.02735606% $0.00963590 Access Long Distance 0.02553887% $0.00899581 Eclipse Communications 0.02337135% $0.00823232 VarTec Telecom 0.02292436% $0.00807488 One Star Long Distance 0.02237160% $0.00788017 American Telecommunications Enterprises 0.02223350% $0.00783153 Long Distance/ USA (Sprint) 0.02133906% $0.00751647 T- NETIX, Inc. 0.02082489% $0.00733536 Nationwide Communications 0.02071495% $0.00729663 Intercontinental Communications Group (ICG) 0.02005349% $0.00706364 Westinghouse Electric Corp. 0.01984365% $0.00698973 Capital Telecommunications 0.01917389% $0.00675381 NATIONAL Telecom of Florida 0.01833703% $0.00645903 GST Call America 0.01707555% $0.00601469 Feist Long Distance 0.01695584% $0.00597252 Frontier Communications- North Central Region 0.01678545% $0.00591251 Intermedia Communications 0.01676333% $0.00590472 WorldCom Technologies 0.01625195% $0.00572459 Cooperative Communications 0.01598441% $0.00563035 Chadwick Telephone 0.01517026% $0.00534357 ATI Telecom 0.01515622% $0.00533863 BN1 Telecommunications 0.01429701% $0.00503598 Shared Communications Services 0.01403492% $0.00494366 Long Distance Management 0.01364685% $0.00480697 Valu- Line of Kansas 0.01352852% $0.00476528 ConQuest 0.01224107% $0.00431179 ICON Communications Corp. 0.01171125% $0.00412517 Long Distance International 0.01170991% $0.00412470 South Carolina Network 0.01122426% $0.00395363 Frontier Communications Int'l, Inc. 0.00998360% $0.00351662 Eastern Telephone Systems 0.00966809% $0.00340549 Electric Lightwave 0.00948198% $0.00333993 North American Communications 0.00927736% $0.00326786 Telemanagement Consultants Corp. 0.00921237% $0.00324496 I- Link Communications 0.00892608% $0.00314412 Action Telcom Co. 0.00888023% $0.00312797 Citizens Telecom 0.00857354% $0.00301995 Deluxe Data Systems 0.00841646% $0.00296461 Hedges & Associates 0.00834872% $0.00294075 PSP Marketing Group 0.00826651% $0.00291180 Cleartel Communications 0.00788966% $0.00277905 Telebeam 0.00769037% $0.00270885 Long Distance Discount 0.00734681% $0.00258784 Touch America, Inc. 0.00694462% $0.00244617 Cellnet 0.00654483% $0.00230535 US Link Long Distance 0.00626399% $0.00220643 XO Communications 0.00608506% $0.00214340 59 Federal Communications Commission FCC 02- 292 3 West Coast Telecommunications 0.00578794% $0.00203875 LCC 0.00517270% $0.00182203 The CommuniGroup 0.00471144% $0.00165956 Austin Bestline 0.00470626% $0.00165773 CapRock Telemanagement 0.00465249% $0.00163879 Ameritel 0.00463064% $0.00163110 FOX COMMUNICATIONS CORP. 0.00449544% $0.00158347 IDT Corp. 0.00441009% $0.00155341 Switch 2000 0.00438008% $0.00154284 MRC Telecommunications 0.00423041% $0.00149012 IDS Long Distance 0.00415224% $0.00146258 VarTec Telecom dba Clear Choice Communications 0.00408850% $0.00144013 General Communication 0.00383755% $0.00135174 Global Crossing Telemanagement 0.00370561% $0.00130526 Excel Telecommunications 0.00369988% $0.00130325 Amerinet Communications 0.00360841% $0.00127103 US COMMUNICATIONS, INC. 0.00350306% $0.00123392 GTS Global Link 0.00343038% $0.00120832 US WATS 0.00316367% $0.00111437 Call America Business Comm. Corp. 0.00311844% $0.00109844 Americatel 0.00300132% $0.00105719 Coast to Coast Telecommunications 0.00289923% $0.00102122 Iowa Communications Network 0.00280372% $0.00098758 Capital Network Systems (AMNEX) 0.00277552% $0.00097765 TCG 0.00275516% $0.00097048 Coastal Telephone Co. 0.00274736% $0.00096773 MVP Communications 0.00265973% $0.00093686 Communications Options 0.00250057% $0.00088080 Norlight Telecommunications 0.00243746% $0.00085857 TresCom U. S. A. 0.00232207% $0.00081792 Digital Network, Inc. 0.00223911% $0.00078870 Off Campus Telecommunications 0.00222471% $0.00078363 GST Telecom 0.00218679% $0.00077027 Connect America Communications 0.00217267% $0.00076530 KTNT Communications 0.00203546% $0.00071697 United Telephone Co. 0.00201083% $0.00070830 ATLANTIC CELL 0.00198526% $0.00069929 United Communications 0.00196949% $0.00069373 IBM (Advantis) 0.00194129% $0.00068380 Concord Telephone Long Distance 0.00189395% $0.00066712 PhoneTel Technologies 0.00186928% $0.00065843 Eastern Telecom dba InterQuest 0.00179777% $0.00063325 Ionex Telecommunications 0.00165422% $0.00058268 Cypress Telecommunications Corp. (Cytel) 0.00162880% $0.00057373 KLP, Inc. dba Call- America 0.00161107% $0.00056748 FRESH START COMMUNICATIONS 0.00157899% $0.00055618 Parkway Communications 0.00156769% $0.00055220 SP Telecom 0.00146132% $0.00051474 Mon- Cre Long Distance 0.00144332% $0.00050839 Sunshine Telephone Inc. dba SUNTEL 0.00140869% $0.00049620 TELUS Communications (Edmonton) 0.00137327% $0.00048372 60 Federal Communications Commission FCC 02- 292 4 CCC GlobalCom Corp. 0.00136758% $0.00048172 TGEC Communications 0.00128349% $0.00045210 CTS Telcom of Florida 0.00123434% $0.00043478 POPP Telcom 0.00123242% $0.00043411 Midco Communications 0.00118147% $0.00041616 EMI Communications Corp. 0.00116688% $0.00041102 Coast International 0.00103921% $0.00036605 WATS/ 800 0.00103913% $0.00036602 Valu- Line of Longview 0.00101234% $0.00035659 American Tel Group 0.00100932% $0.00035552 Arcada Communications 0.00099292% $0.00034975 Athena International 0.00095229% $0.00033543 Interlink Telecommunications 0.00092801% $0.00032688 CEO TELECOMM (STAR TELECOMM INC) 0.00090459% $0.00031863 Broadwing Telecommunications Inc. 0.00087624% $0.00030865 T- One Communications 0.00086753% $0.00030558 Fibernet Telecommunications 0.00084713% $0.00029839 First Financial Management Corp. 0.00084148% $0.00029640 U. S. Connect Corp. 0.00081999% $0.00028883 Western Telecom, Inc. 0.00080014% $0.00028184 Connect Americom Corp. 0.00078634% $0.00027698 Telescan 0.00077979% $0.00027467 Digital Technologies 0.00077638% $0.00027347 SouthTel Corp. 0.00077410% $0.00027267 Keystone Telecom 0.00069907% $0.00024624 Euronet Communications Corp. 0.00067698% $0.00023846 WestCom Inc. (Western Telecom, Inc.) 0.00067687% $0.00023842 Americall Communications 0.00066004% $0.00023249 C- COM 0.00064098% $0.00022578 Convergent Communications 0.00063941% $0.00022523 Ameritech 0.00063117% $0.00022232 TRESCOM 0.00060717% $0.00021387 Autumn Communications 0.00059317% $0.00020894 Shoreham Telephone 0.00058603% $0.00020642 TransNet 0.00057438% $0.00020232 AT& T Global Network Services (AGNS) 0.00056967% $0.00020066 Star Tel, Inc. 0.00056830% $0.00020018 U. S. Link 0.00054633% $0.00019244 Dancris Comm. 0.00054320% $0.00019134 ATLANTIC CONNECTIONS 0.00052002% $0.00018317 Kelhorn Comm Inc. 0.00050750% $0.00017876 US Comm. Inc. dba SOUTHWEST L. D. N. 0.00050566% $0.00017811 STAR TELECOM/ ALLSTAR 0.00048154% $0.00016962 Alternate Communications Technology 0.00047511% $0.00016735 Logix Communications 0.00045773% $0.00016123 Long Distance Wholesale Club (Excel) 0.00044612% $0.00015714 Econo. Call Long Distance Services 0.00043271% $0.00015242 Powercom Corp. 0.00042537% $0.00014983 Dial- Net, Inc. 0.00040497% $0.00014265 XTEL 0.00040043% $0.00014105 AT& T EasyLink Services 0.00037344% $0.00013154 61 Federal Communications Commission FCC 02- 292 5 Baystar Satellite Paging 0.00034720% $0.00012230 North American Telephone 0.00033359% $0.00011750 Yavapai Telephone Exchange 0.00032767% $0.00011542 Integrated Systems Corp. 0.00032747% $0.00011535 JSM Tele- Page 0.00032676% $0.00011510 Payline Systems 0.00032351% $0.00011395 TelaMarketing Communications 0.00031512% $0.00011100 Valuline Long Distance 0.00029570% $0.00010416 Midcom of Arizona, Inc 0.00028833% $0.00010156 Citizens Communications 0.00028589% $0.00010070 Operator Service Co. 0.00028366% $0.00009992 Call America 0.00027527% $0.00009696 Uni- Tel of Farmington 0.00025985% $0.00009153 Telco Holdings 0.00025911% $0.00009127 Union Telephone Co. 0.00025279% $0.00008904 First Communications 0.00024095% $0.00008487 Telehop Communications 0.00022149% $0.00007802 Cherry Communications 0.00021977% $0.00007741 Tele- Sys., Inc. 0.00018517% $0.00006522 American Telesource International 0.00017886% $0.00006300 Commonwealth Telecom Services 0.00017156% $0.00006043 Intl. 800 Telecom dba Telecall Long Dist. (EGLOBE) 0.00016776% $0.00005909 R, D,& J Communications Mgmt. 0.00015442% $0.00005439 Telecommunications Service Center 0.00014881% $0.00005242 TEL- SPAN COMMUNICATIONS 0.00014720% $0.00005185 NACT 0.00014709% $0.00005181 American Express Travel Related Services 0.00014661% $0.00005164 Gulf Long Distance 0.00014575% $0.00005134 IntelCom Group 0.00013991% $0.00004928 USLink Long Distance 0.00013391% $0.00004717 ECI Communications 0.00012794% $0.00004507 DeltaCom Long Distance Services 0.00012559% $0.00004424 ComCentral dba Southnet Services 0.00012355% $0.00004352 Brooke Telecom Co- operative 0.00012210% $0.00004301 TresCom U. S. A., Inc./ TresCom Caribbean 0.00012045% $0.00004243 DeltaCom, Inc. 0.00011053% $0.00003893 Telephone Assoc. Long Distance Svcs. 0.00010523% $0.00003707 TSC Communications 0.00010488% $0.00003694 QCC, Inc. 0.00010276% $0.00003620 Independence Telephone Co. 0.00010029% $0.00003533 Citilink of UT 0.00009598% $0.00003381 Home Owners L. D. dba HOLD Billing Svcs. 0.00009225% $0.00003249 Tele Tech 0.00008876% $0.00003127 Systems 1000 0.00008186% $0.00002883 ALLTEL Communications, Inc. 0.00008080% $0.00002846 Oncor Communications 0.00007911% $0.00002787 Americom Communications 0.00007739% $0.00002726 Eclipse Telecommunications 0.00007597% $0.00002676 NTS Communications 0.00007499% $0.00002642 TXU Communications 0.00007323% $0.00002579 L. D. Services 0.00007001% $0.00002466 62 Federal Communications Commission FCC 02- 292 6 PSA, Inc. 0.00006915% $0.00002436 International Cellular 0.00006735% $0.00002372 Capsule Communications 0.00006440% $0.00002269 Execulines of Sacramento 0.00006425% $0.00002263 ARCADA 0.00006366% $0.00002242 Caribbean Telecommunications Consortium 0.00006240% $0.00002198 Olympic Telecommunications 0.00006013% $0.00002118 Global Crossing Bandwidth 0.00005907% $0.00002081 ABC Telecom 0.00005707% $0.00002010 MIDCOM Communications 0.00005570% $0.00001962 Long Distance Telephone Savers 0.00005472% $0.00001927 Business Discount Plan dba LD Discount Plan 0.00005236% $0.00001844 International Telephone Corp. 0.00004773% $0.00001681 NTI 0.00004722% $0.00001663 Iowa Network Services 0.00004648% $0.00001637 TCA Long Distance 0.00004632% $0.00001632 Premier Long Distance Svcs. 0.00004617% $0.00001626 Time Warner 0.00004613% $0.00001625 Communication Cable Laying Co. 0.00004338% $0.00001528 Tel Serv 0.00004283% $0.00001509 Intel Communications 0.00003989% $0.00001405 Axces 0.00003605% $0.00001270 Lucky Dog Phone Co. 0.00003585% $0.00001263 Manitoba Telephone System 0.00003514% $0.00001238 Telephone Communications Corp. 0.00003357% $0.00001183 Atlantic Telephone Co. 0.00003322% $0.00001170 TTI Telecommunications 0.00003267% $0.00001151 Fone America 0.00003020% $0.00001064 Data & Electronic Services 0.00002938% $0.00001035 Light Link Inc dba Taylor Comm. Grp. 0.00002851% $0.00001004 NYNEX 0.00002793% $0.00000984 RCC Network 0.00002632% $0.00000927 NET- tel Corp. 0.00002440% $0.00000859 Incomnet Communications Corp. 0.00002220% $0.00000782 ITC Networks 0.00002208% $0.00000778 GST Net 0.00002185% $0.00000770 AMERICAN TELECOMMUNICATIONS HOLDING 0.00002126% $0.00000749 Matrix Telecom 0.00002020% $0.00000712 Show- Me Long Distance 0.00002008% $0.00000707 Working Assets 0.00001847% $0.00000651 T- NET (Cable & Wireless) 0.00001800% $0.00000634 NTS Communications/ GMW Co. 0.00001765% $0.00000622 Asia International Services Corp. 0.00001757% $0.00000619 Touch 1 Communications 0.00001679% $0.00000591 TELECOM WEST 0.00001632% $0.00000575 Teleport Communications Group 0.00001455% $0.00000513 MetroLink 0.00001432% $0.00000504 fNOROLA 0.00001424% $0.00000502 AUC Communications 0.00001408% $0.00000496 WinStar 0.00001396% $0.00000492 Call America of Riverside 0.00001369% $0.00000482 63 Federal Communications Commission FCC 02- 292 7 Sprint Canada, Inc. 0.00001357% $0.00000478 LA CONEXION FAMILIAR, INC. 0.00001334% $0.00000470 EqualNet Corp. 0.00001294% $0.00000456 BMG/ TELEMANAGEMENT SYSTEMS (BMG) 0.00001294% $0.00000456 MID ATLANTIC TELECOM 0.00001267% $0.00000446 National Network Corp. 0.00001181% $0.00000416 Primus (Primus Telecommunications) 0.00001134% $0.00000399 Hi- Rim Communications 0.00001106% $0.00000390 Independent Network Services 0.00001083% $0.00000381 The Phone Co. 0.00001059% $0.00000373 Century Telecommunications 0.00001059% $0.00000373 Roseville Telephone Co. 0.00001047% $0.00000369 Tel- Share 0.00000992% $0.00000350 AmeriVision Communications 0.00000992% $0.00000350 Call Savers 0.00000988% $0.00000348 Valu- Line of Amarillo 0.00000981% $0.00000345 AT& T Canada Long Distance Services Co. 0.00000969% $0.00000341 TTE OF CHARLESTON 0.00000969% $0.00000341 Telec Inc. 0.00000965% $0.00000340 Coastal Long Distance Services 0.00000957% $0.00000337 A & N Telecom 0.00000906% $0.00000319 PDQ Communications Source 0.00000879% $0.00000309 Hi- Plains NTS Communications 0.00000843% $0.00000297 EGLOBE INC dba INTL. 800 TELECOM dba TELECAL 0.00000843% $0.00000297 ADDTEL Communications (SA Tel) 0.00000765% $0.00000269 DTG Communications 0.00000741% $0.00000261 Access Services dba Pacific NW Telecom 0.00000741% $0.00000261 Uni Dial 0.00000722% $0.00000254 Questar InfoComm 0.00000710% $0.00000250 Century Long Distance 0.00000706% $0.00000249 Southwestern Bell Telephone 0.00000686% $0.00000242 Pacific Bell Interactive Media 0.00000675% $0.00000238 Nationwide Emergency Telecomm. System 0.00000655% $0.00000231 GCI Globalcom 0.00000635% $0.00000224 Priority One Long Distance 0.00000588% $0.00000207 North County Communications Corp. 0.00000577% $0.00000203 Souris River Telecommunications 0.00000577% $0.00000203 National Telephone Communications 0.00000569% $0.00000200 RSL COM U. S. A. 0.00000569% $0.00000200 North American Telephone Network, Inc. 0.00000561% $0.00000198 USN Communications 0.00000549% $0.00000193 Extelcom dba Express Tel 0.00000541% $0.00000191 Telecom Affiliates 0.00000530% $0.00000187 Advanced Telecommunications Network 0.00000530% $0.00000187 Global Tone Communications 0.00000522% $0.00000184 US TeleServices 0.00000510% $0.00000180 CCC Communications Corp. (Z- TEL, Inc.) 0.00000510% $0.00000180 CoreComm 0.00000486% $0.00000171 Westcom Long Distance 0.00000486% $0.00000171 L. D. Network, Inc. 0.00000467% $0.00000164 64 Federal Communications Commission FCC 02- 292 8 FiberNet Telemanagement 0.00000443% $0.00000156 Alternative Long Distance dba Money $avers 0.00000392% $0.00000138 Dial Long Distance Billing Svcs. 0.00000388% $0.00000137 Interstate Telecom Svcs. 0.00000377% $0.00000133 MCI/ 1- 800- COLLECT 0.00000373% $0.00000131 Call Technology Corp. of Philadelphia 0.00000365% $0.00000128 National Fibernet, Inc. 0.00000357% $0.00000126 Nuestra Telefonica 0.00000353% $0.00000124 Fiberline Network Communications 0.00000341% $0.00000120 Affiliated Telecom Svcs. 0.00000341% $0.00000120 WCS Operators 0.00000322% $0.00000113 Microvoice Applications 0.00000322% $0.00000113 WorldCom dba Touch One Long Distance 0.00000318% $0.00000112 B. R. Communications 0.00000310% $0.00000109 Public Phone 0.00000298% $0.00000105 American Discount Telecommunications 0.00000294% $0.00000104 Budget Call Long Distance 0.00000294% $0.00000104 SBS/ MCI 0.00000290% $0.00000102 U. S. Net 0.00000286% $0.00000101 Thrifty Call 0.00000282% $0.00000099 Farmers Long Distance 0.00000278% $0.00000098 KRB Telecom 0.00000275% $0.00000097 Fones West Digital Systems 0.00000267% $0.00000094 Hertz Technologies 0.00000263% $0.00000093 Vista Group International 0.00000255% $0.00000090 Digital Network Services 0.00000255% $0.00000090 U. S. Fibercom 0.00000255% $0.00000090 Aliant Systems 0.00000243% $0.00000086 CellToll Corp. 0.00000239% $0.00000084 METRONET Long Distance Communications 0.00000227% $0.00000080 EATELNET 0.00000204% $0.00000072 United Telephone Long Distance 0.00000196% $0.00000069 Trinet 0.00000192% $0.00000068 ProCom, Inc. 0.00000192% $0.00000068 Tel- One 0.00000188% $0.00000066 Escondido Telephone Co. 0.00000188% $0.00000066 HOTEL CONNECT 0.00000184% $0.00000065 International Telecommunication Corp. 0.00000180% $0.00000064 America One Communications 0.00000165% $0.00000058 Tel- Optic, Inc. dba Universal Network Services 0.00000153% $0.00000054 Pacific Bell Communications 0.00000153% $0.00000054 U. S. Communications 0.00000149% $0.00000053 The Furst Group 0.00000141% $0.00000050 Easton Telecom Services 0.00000133% $0.00000047 NTS/ HI- PLAINS/ MIDCOM AZ 0.00000129% $0.00000046 Telecom One 0.00000126% $0.00000044 U S West Long Distance 0.00000126% $0.00000044 Voice Technology Corp 0.00000122% $0.00000043 Comwest Communications 0.00000110% $0.00000039 Telephone Assoc. dba Thief River Falls LD 0.00000110% $0.00000039 Horry Telephone Long Distance 0.00000110% $0.00000039 65 Federal Communications Commission FCC 02- 292 9 INFO- TEL COMMUNICATIONS 0.00000106% $0.00000037 BC Tel 0.00000102% $0.00000036 ONE- 2- ONE Communications 0.00000102% $0.00000036 Pacific Gateway Exchange 0.00000102% $0.00000036 Long Distance Network 0.00000102% $0.00000036 Motorola Inc. 0.00000102% $0.00000036 Star Telecommunications 0.00000102% $0.00000036 National Telephone Exchange (PA) 0.00000098% $0.00000035 Economy Telephone 0.00000094% $0.00000033 North State Telephone Long Distance Co. 0.00000094% $0.00000033 National Tele- Sav Inc. 0.00000090% $0.00000032 SouthWest United Communication 0.00000090% $0.00000032 Central Telephone Co. 0.00000090% $0.00000032 American Long Distance Corp. 0.00000090% $0.00000032 Phoenix Network 0.00000086% $0.00000030 First Data Resources, Inc. 0.00000086% $0.00000030 Trans National Communications 0.00000082% $0.00000029 United Telephone Co. dba TELAMERICA L. D. 0.00000082% $0.00000029 Telaplex Long Distance 0.00000082% $0.00000029 National Brands dba Sharenet Communications 0.00000078% $0.00000028 People's Telephone 0.00000078% $0.00000028 LECNet, Inc. 0.00000075% $0.00000026 NOS Communications 0.00000075% $0.00000026 Empire One Telecommunications 0.00000067% $0.00000023 United States Cellular 0.00000067% $0.00000023 Associated Telenet 0.00000067% $0.00000023 Innovative Telecom 0.00000063% $0.00000022 RCN Long Distance 0.00000063% $0.00000022 North American Digicom Corp. 0.00000063% $0.00000022 Discount Long Distance of America 0.00000059% $0.00000021 Blue Mountain Cellular dba CellularOne 0.00000059% $0.00000021 ARRIVA Communications 0.00000059% $0.00000021 TMC Long Distance dba Cherry Communications 0.00000055% $0.00000019 American Long Distance Exchange 0.00000055% $0.00000019 TelVue Corp. 0.00000055% $0.00000019 Frontier Communications International 0.00000055% $0.00000019 KDD America, Inc. 0.00000051% $0.00000018 Preferred Telecom 0.00000051% $0.00000018 MEANS Telcom 0.00000051% $0.00000018 HSS Vending Distributors 0.00000051% $0.00000018 Alo- USA Corp. 0.00000051% $0.00000018 Nationwide Long Distance 0.00000047% $0.00000017 U S P & C, Inc. 0.00000047% $0.00000017 Low Country Carrier dba Hargray L. D. Co. 0.00000047% $0.00000017 Call America/ Palm Desert 0.00000043% $0.00000015 Select Communications 0.00000043% $0.00000015 Chautauqua & Erie Communications 0.00000043% $0.00000015 Poka- Lambro Telecommunications 0.00000043% $0.00000015 Telecare 0.00000043% $0.00000015 International Telcom, Ltd 0.00000039% $0.00000014 STARTEC 0.00000039% $0.00000014 66 Federal Communications Commission FCC 02- 292 10 Association Communications 0.00000039% $0.00000014 Ben Lomand Communications 0.00000039% $0.00000014 Sprint Local Telecommunications Division 0.00000035% $0.00000012 American Fiber Com 0.00000035% $0.00000012 INFO- TEL, Inc. 0.00000035% $0.00000012 USP Communications 0.00000035% $0.00000012 PBC Long Distance 0.00000035% $0.00000012 Advanced Telecommunications 0.00000035% $0.00000012 Advanced Telecom, Inc. 0.00000031% $0.00000011 U. S. Republic Communications 0.00000031% $0.00000011 REAMS COMMUNICATIONS dba VALULINE LONG D 0.00000031% $0.00000011 CoServ 0.00000031% $0.00000011 Sam's Discount Long Distance 0.00000027% $0.00000010 ARC Networks 0.00000027% $0.00000010 VALU- LINE OF ANGLETON 0.00000027% $0.00000010 Michigan Independent Network 0.00000027% $0.00000010 Valley Telephone Long Distance 0.00000027% $0.00000010 Scherers Communications Group 0.00000024% $0.00000008 Heritage Communications 0.00000024% $0.00000008 Friendship Long Distance 0.00000024% $0.00000008 Interstate Operators 0.00000024% $0.00000008 TELCO 0.00000020% $0.00000007 Mountainview Communications 0.00000020% $0.00000007 BT North America 0.00000020% $0.00000007 The Basico Group 0.00000020% $0.00000007 Colorado River Communications 0.00000020% $0.00000007 National Fiber Com 0.00000020% $0.00000007 J B Operators 0.00000020% $0.00000007 Westel Telecommunications, Ltd. 0.00000020% $0.00000007 Atlas Communications & Telephone C. D. 0.00000020% $0.00000007 Northern Communications 0.00000020% $0.00000007 Pencor/ Palmerton 0.00000020% $0.00000007 RANGER TELECOMMUNICATIONS 0.00000016% $0.00000006 OMNICALL COMMUNICATIONS CORPORATION 0.00000016% $0.00000006 Standard TelCom 0.00000016% $0.00000006 Alascom 0.00000016% $0.00000006 OPTICOM ONE CALL 0.00000016% $0.00000006 Savemore Network 0.00000016% $0.00000006 Northern Arizona Communications Corp. 0.00000016% $0.00000006 Associated Network Partners 0.00000016% $0.00000006 Standard Long Distance 0.00000016% $0.00000006 ABCO Communications 0.00000016% $0.00000006 Global Com 0.00000016% $0.00000006 Oneonta Telephone Co. 0.00000016% $0.00000006 360 ° Long Distance 0.00000016% $0.00000006 Verizon Select Services 0.00000016% $0.00000006 ITC Networks of Utah 0.00000016% $0.00000006 Southern New England Telephone (SNET) 0.00000016% $0.00000006 NEXTLINK 0.00000012% $0.00000004 Texustel 0.00000012% $0.00000004 67 Federal Communications Commission FCC 02- 292 11 Fairview Telecom 0.00000012% $0.00000004 Long Distance Assistance 0.00000012% $0.00000004 Progressive National Telephone Co. 0.00000012% $0.00000004 Northwest Telecom 0.00000012% $0.00000004 Comtel Tech 0.00000012% $0.00000004 Metro One Telecommunications 0.00000012% $0.00000004 Commonwealth Telecom, Inc. 0.00000012% $0.00000004 Bethany Telecom 0.00000012% $0.00000004 Covista, Inc. 0.00000012% $0.00000004 NetLinx Telecommunications Corp. 0.00000012% $0.00000004 CFW NETWORK 0.00000012% $0.00000004 Nextel Communications 0.00000012% $0.00000004 Mid- Com Communications 0.00000012% $0.00000004 American Fibernet, Inc. 0.00000012% $0.00000004 Williams Communications 0.00000012% $0.00000004 Cellular One 800 & Long Distance Services 0.00000012% $0.00000004 Telephone Systems of Georgia 0.00000012% $0.00000004 TeleCable Corp. 0.00000008% $0.00000003 Telelink 0.00000008% $0.00000003 Valu- Line of St. Joseph 0.00000008% $0.00000003 Bluegrass Long Distance 0.00000008% $0.00000003 OCOM Long Distance 0.00000008% $0.00000003 Vortel Communications 0.00000008% $0.00000003 BKC Telecommunications 0.00000008% $0.00000003 Gala Communications 0.00000008% $0.00000003 Digital Communications 0.00000008% $0.00000003 World Wide Connect 0.00000008% $0.00000003 Telephone Support Systems 0.00000008% $0.00000003 The Switchboard 0.00000008% $0.00000003 Econ- A- Call Inc. of Hays 0.00000008% $0.00000003 Metro Telecomm. Svcs. 0.00000008% $0.00000003 Diamond Communications 0.00000008% $0.00000003 Long Distance by Cellular One 0.00000008% $0.00000003 Econocom Long Distance 0.00000008% $0.00000003 Genesis Communications Int'l 0.00000008% $0.00000003 Infonet Long Distance 0.00000008% $0.00000003 Tel- Central of Jefferson City 0.00000008% $0.00000003 Chibardun Telephone Cooperative 0.00000008% $0.00000003 Guam Telephone Authority 0.00000008% $0.00000003 International Telemedia Associates 0.00000008% $0.00000003 Cominex 0.00000008% $0.00000003 Standard Communications Inc. dba SCI 0.00000008% $0.00000003 Partners Telecom 0.00000008% $0.00000003 Sisk Communications 0.00000008% $0.00000003 Telecommunications Consultants 0.00000008% $0.00000003 Valley Star- Tel 0.00000008% $0.00000003 Western Telenet 0.00000008% $0.00000003 Willamette Valley Telecom 0.00000008% $0.00000003 GTE Telephone Operations 0.00000008% $0.00000003 Communication TeleSystems Intl. (CTS) 0.00000008% $0.00000003 OCOM Corp. 0.00000008% $0.00000003 68 Federal Communications Commission FCC 02- 292 12 UI Long Distance 0.00000004% $0.00000001 Federal TransTel, Inc. (FTT) 0.00000004% $0.00000001 St. Pierre Communication Network 0.00000004% $0.00000001 Rainier Cable 0.00000004% $0.00000001 Network Billing & Collection 0.00000004% $0.00000001 Fastline Communication Network 0.00000004% $0.00000001 TeleHub Communications Corp. 0.00000004% $0.00000001 Future Connect 0.00000004% $0.00000001 Regency Long Distance 0.00000004% $0.00000001 Telephone Express 0.00000004% $0.00000001 Firstel 0.00000004% $0.00000001 Cincinnati Bell Telephone 0.00000004% $0.00000001 HTC Communications 0.00000004% $0.00000001 American Consultants Alliance 0.00000004% $0.00000001 Branson Telephone 0.00000004% $0.00000001 Community Long Distance 0.00000004% $0.00000001 Digi- Cell, Inc. 0.00000004% $0.00000001 DigiTel 0.00000004% $0.00000001 Island Tel, PEI 0.00000004% $0.00000001 London Telecom Network Corp. 0.00000004% $0.00000001 Meridian Telecom 0.00000004% $0.00000001 NETWORK ONE 0.00000004% $0.00000001 Northland Telephone Systems 0.00000004% $0.00000001 PBT Communications 0.00000004% $0.00000001 TCAST Communications, Inc. 0.00000004% $0.00000001 Telecon Communications Corp. 0.00000004% $0.00000001 TELEFONICA LARGA DISTANCIA 0.00000004% $0.00000001 TLD DE PUERTO RICO 0.00000004% $0.00000001 TransWorld Network Corp. 0.00000004% $0.00000001 U. S. Fiberline Communications 0.00000004% $0.00000001 WBC Communications, Inc. 0.00000004% $0.00000001 WORLD- WIDE TELCO 0.00000004% $0.00000001 American Communications Technology 0.00000004% $0.00000001 Western Telephone & Television 0.00000004% $0.00000001 Cimco Communications 0.00000004% $0.00000001 Cellular XL Associates 0.00000004% $0.00000001 CityNet Communications 0.00000004% $0.00000001 Future Telephone Communications 0.00000004% $0.00000001 Network Technologies 0.00000004% $0.00000001 Voyager Networks 0.00000004% $0.00000001 DIGITRAN CORP. 0.00000004% $0.00000001 CP- Tel Network Services, Inc. 0.00000004% $0.00000001 CommNet Cellular 0.00000004% $0.00000001 Carrier Concepts International Corp. 0.00000004% $0.00000001 Intelenet Commission 0.00000004% $0.00000001 METRO TELEPHONE 0.00000004% $0.00000001 U. S. TELE- COMM, INC. 0.00000004% $0.00000001 Citizens Long Distance 0.00000004% $0.00000001 TLD, Inc. 0.00000004% $0.00000001 Ameritech Communications 0.00000004% $0.00000001 BizTel Long Distance Telephone Co. 0.00000004% $0.00000001 69 Federal Communications Commission FCC 02- 292 13 Redwood Long Distance 0.00000004% $0.00000001 Contact America 0.00000004% $0.00000001 MID MCND dba MIDCOM Communications 0.00000004% $0.00000001 Off Campus Communications 0.00000004% $0.00000001 Consolidated Comm. Public Services 0.00000004% $0.00000001 Beehive Telephone Co. 0.00000004% $0.00000001 Hawaiian Telephone Co. (GTE) 0.00000004% $0.00000001 Tel Serve 0.00000004% $0.00000001 Ray- Tel, Inc. 0.00000004% $0.00000001 70 Federal Communications Commission FCC 02- 292 APPENDIX C Post- Intermediate Period Allocation List Name Percentage Amount AT& T Communications 33.69552735% $11.96865132 MCI 17.02639727% $6.04777631 Sprint 11.11485111% $3.94799511 WorldCom 10.23852165% $3.63672289 Global Crossing Telecommunications 7.15106942% $2.54005986 Qwest 7.12891379% $2.53219018 WCOM 3.45572976% $1.22747521 ILEC 2.19% 2.19000000% $0.77788800 Cable & Wireless 0.87472581% $0.31070261 Global Crossing 0.73143840% $0.25980692 Frontier Communications Services 0.67982311% $0.24147317 Broadwing Communications Services Inc. 0.60573560% $0.21515729 Telco Communications Group dba Dial & Save 0.57331218% $0.20364049 Touch America, Inc. 0.52556846% $0.18668192 IDT Corp. 0.46487055% $0.16512202 Business Telecom, Inc. (BTI) 0.41529492% $0.14751276 LCI International 0.38508503% $0.13678220 WorldXChange 0.24004960% $0.08526562 PT- 1 Communications 0.19235182% $0.06832337 McLeodUSA 0.18014775% $0.06398848 One Call Communications 0.16435648% $0.05837942 ATX Telecommunications Services 0.16231652% $0.05765483 Excel Telecommunications 0.11654172% $0.04139562 DeltaCom L. D. S. 0.11205694% $0.03980263 Network Plus 0.09200160% $0.03267897 Long Distance of Michigan (LDMI) 0.09124466% $0.03241010 EconoPhone 0.08965730% $0.03184627 Switched Service Communications 0.08282780% $0.02942043 Intermedia Communications 0.08202164% $0.02913409 VERIZON (not Verizon IntraLATA - LEC) 0.07539638% $0.02678080 Total- Tel USA 0.06460627% $0.02294815 Tel America 0.05266606% $0.01870698 One Star Long Distance 0.05075153% $0.01802694 The CommuniGroup Of KC 0.04547681% $0.01615336 Tandem Access for Database Query 0.04360270% $0.01548768 American Long Lines 0.04159377% $0.01477411 Logix Communications 0.04139743% $0.01470437 Bell Atlantic Communications 0.04136967% $0.01469451 WesTel 0.03890862% $0.01382034 NETECH Comm. (US West) 0.03875592% $0.01376610 US WATS 0.02990079% $0.01062076 Cooperative Communications 0.02482544% $0.00881800 Pac- West Telecomm dba AmeriCall 0.02391389% $0.00849421 Global Crossing Telemanagement 0.02192701% $0.00778847 Capital Telecommunications 0.02078209% $0.00738180 Broadwing Telecommunications Inc. 0.01993413% $0.00708060 South Carolina Network 0.01829131% $0.00649707 71 Federal Communications Commission FCC 02- 292 2 ACC Long Distance Corp. 0.01741376% $0.00618537 Cincinnati Bell Long Distance 0.01660766% $0.00589904 Long Distance Savers 0.01650078% $0.00586108 First Communications 0.01497019% $0.00531741 TXU Communications 0.01421800% $0.00505023 Southwestern Bell Telephone 0.01407712% $0.00500019 TCAST Communications, Inc. 0.01311337% $0.00465787 Shared Communications Services 0.01300293% $0.00461864 ITC DeltaCom Communications 0.01299003% $0.00461406 I- Link Communications 0.01274703% $0.00452774 Birch Telecom 0.01229039% $0.00436555 Williams Communications 0.01197243% $0.00425261 CTS Telcom of Florida 0.01189664% $0.00422569 WinStar 0.01143703% $0.00406243 US Xchange 0.00998448% $0.00354649 SBC 0.00983683% $0.00349404 IDS Long Distance 0.00948736% $0.00336991 Long Distance Management 0.00869285% $0.00308770 Long Distance Telephone Savers 0.00839879% $0.00298325 Long Distance Discount 0.00775520% $0.00275465 Powercom Corp. 0.00755607% $0.00268392 GST Telecom 0.00736841% $0.00261726 Westinghouse Electric Corp. 0.00725440% $0.00257676 EATELNET 0.00683467% $0.00242768 Norlight Telecommunications 0.00667620% $0.00237138 TeleBeam 0.00652307% $0.00231700 Frontier Communications Int'l, Inc. 0.00630040% $0.00223790 Austin Bestline 0.00617985% $0.00219508 Electric Lightwave 0.00601377% $0.00213609 Eastern Telephone Systems 0.00567334% $0.00201517 XTEL 0.00563197% $0.00200047 US Link Long Distance 0.00526181% $0.00186900 Destia 0.00523810% $0.00186057 Williams Local Network 0.00495901% $0.00176144 Southwestern Bell Comms. Svcs. dba Pacific Bell L. D. 0.00484096% $0.00171951 GCI Globalcom 0.00478277% $0.00169884 Atlantic Cell. dba Long Distance by Cellular One 0.00452978% $0.00160898 XO Communications 0.00449589% $0.00159694 Arcada Communications 0.00423173% $0.00150311 C- COM 0.00392073% $0.00139264 RSL COM U. S. A. 0.00379352% $0.00134746 The CommuniGroup 0.00359706% $0.00127768 Chadwick Telephone 0.00354778% $0.00126017 General Communication 0.00352525% $0.00125217 CapRock Telemanagement 0.00350136% $0.00124368 Iowa Communications Network 0.00347936% $0.00123587 FOX COMMUNICATIONS CORP. 0.00305548% $0.00108531 Capsule Communications 0.00294991% $0.00104781 COMMUNICATIONS OPTIONS 0.00294503% $0.00104608 Coast to Coast Telecommunications 0.00279191% $0.00099169 72 Federal Communications Commission FCC 02- 292 3 Cypress Telecommunications Corp. (Cytel) 0.00252727% $0.00089769 GST ACTION TELECOM 0.00240553% $0.00085444 Americall Communications 0.00221222% $0.00078578 KTNT Communications 0.00194140% $0.00068959 VarTec Telecom 0.00192173% $0.00068260 Network One 0.00183167% $0.00065061 QCC, Inc. 0.00173757% $0.00061719 Valuline Long Distance 0.00171546% $0.00060933 Concord Telephone Long Distance 0.00155247% $0.00055144 INFO- TEL COMMUNICATIONS 0.00142883% $0.00050752 ProCom, Inc. 0.00139191% $0.00049441 AT& T EasyLink Services 0.00139090% $0.00049405 RCC Network 0.00136219% $0.00048385 Digital Telecommunications 0.00111140% $0.00039477 Midco Communications 0.00111122% $0.00039471 United Communications 0.00102200% $0.00036301 Off Campus Telecommunications 0.00096565% $0.00034300 WorldCom dba Touch One Long Distance 0.00094597% $0.00033601 BN1 Telecommunications 0.00092659% $0.00032913 Ionex Telecommunications 0.00085419% $0.00030341 TresCom U. S. A. 0.00079612% $0.00028278 American Telco 0.00079392% $0.00028200 Feist Long Distance 0.00076758% $0.00027265 Citizens Communications 0.00075159% $0.00026697 Atlantic Connections 0.00075011% $0.00026644 MichTel 0.00073091% $0.00025962 Sunshine Telephone Inc. dba SUNTEL 0.00068983% $0.00024503 PaeTec Communications 0.00062587% $0.00022231 Consolidated Comm. Public Services 0.00061838% $0.00021965 Voice Technology Corp 0.00055514% $0.00019718 OCI 0.00054735% $0.00019442 Ameritech 0.00054681% $0.00019423 Midcom of Arizona, Inc 0.00053647% $0.00019055 American Telesource International 0.00049450% $0.00017565 Telescan 0.00048125% $0.00017094 Long Distance/ USA (Sprint) 0.00044856% $0.00015933 TCG 0.00039761% $0.00014123 Mon- Cre Long Distance 0.00037193% $0.00013211 Global Crossing Bandwidth 0.00033686% $0.00011965 Uni- Tel of Farmington 0.00030690% $0.00010901 EMI Communications Corp. 0.00030548% $0.00010851 Shoreham Telephone 0.00030209% $0.00010730 First Financial Management Corp. 0.00028842% $0.00010245 Access Point 0.00028663% $0.00010181 Questar InfoComm 0.00025715% $0.00009134 Switch 2000 0.00025204% $0.00008952 Union Telephone Co. 0.00023735% $0.00008431 Florida Digital Network 0.00022707% $0.00008066 Motorola Inc. 0.00020811% $0.00007392 Baystar Satellite Paging 0.00019129% $0.00006795 NTS Communications/ GMW Co. 0.00018778% $0.00006670 73 Federal Communications Commission FCC 02- 292 4 VarTec Telecom dba Clear Choice Communications 0.00018481% $0.00006564 AT& T Global Network Services (AGNS) 0.00017773% $0.00006313 NTS Communications 0.00016888% $0.00005999 Time Warner 0.00016151% $0.00005737 NACT 0.00014742% $0.00005236 Full Service Network 0.00014670% $0.00005211 Primus (Primus Telecommunications) 0.00014445% $0.00005131 Ameritel 0.00014361% $0.00005101 ALLTEL Communications, Inc. 0.00014237% $0.00005057 AT& T Canada Long Distance Services Co. 0.00013880% $0.00004930 GTE Communications Corp. 0.00012691% $0.00004508 TELUS Communications (Edmonton) 0.00011496% $0.00004083 Telecom* USA (MCI) 0.00011449% $0.00004067 Axces 0.00011229% $0.00003988 NATIONAL Telecom of Florida 0.00010581% $0.00003758 POPP Telcom 0.00010373% $0.00003684 BC Tel 0.00009243% $0.00003283 U. S. Long Distance 0.00009231% $0.00003279 Tel Serve 0.00008649% $0.00003072 Oncor Communications 0.00007638% $0.00002713 CEO Telecommunications Star Telecommunica 0.00007145% $0.00002538 Tele- Sys., Inc. 0.00006901% $0.00002451 IPS Telecom 0.00006509% $0.00002312 Teleport Communications Group 0.00006390% $0.00002270 American Express Travel Related Services 0.00005290% $0.00001879 POPP Telecom 0.00005076% $0.00001803 Coastal Long Distance Services 0.00004720% $0.00001676 Fibernet Telecommunications 0.00004702% $0.00001670 Yavapai Telephone Exchange 0.00004345% $0.00001543 Advanced Mkg. Svcs. dba Dial Anywhere 0.00004155% $0.00001476 American Telecommunications Enterprises 0.00004066% $0.00001444 Citizens 0.00004012% $0.00001425 Touch America Services 0.00003864% $0.00001372 Canby Telephone Association 0.00003787% $0.00001345 EASTERNTEL 0.00003323% $0.00001180 STAR TELECOM/ ALLSTAR 0.00003174% $0.00001127 Iowa Network Services 0.00003032% $0.00001077 Alliance Group Services 0.00002592% $0.00000921 SBC Long Distance 0.00002562% $0.00000910 Cleartel Communications 0.00002550% $0.00000906 Interloop, Inc. 0.00002503% $0.00000889 Incomnet Communications Corp. 0.00002342% $0.00000832 PSA, Inc. 0.00002128% $0.00000756 United Telephone Co. 0.00002045% $0.00000726 U. S. Net 0.00002003% $0.00000712 NetLinx Telecommunications Corp. 0.00001902% $0.00000676 Cherry Communications 0.00001807% $0.00000642 Systems 1000 0.00001551% $0.00000551 Sprint Canada, Inc. 0.00001504% $0.00000534 Valu- Line of Longview 0.00001391% $0.00000494 Baltimore- Washington Telephone 0.00001379% $0.00000490 74 Federal Communications Commission FCC 02- 292 5 Parkway Communications 0.00001183% $0.00000420 CellToll Corp. 0.00001022% $0.00000363 MTS Communications 0.00000963% $0.00000342 Matrix Telecom 0.00000915% $0.00000325 Eastern Telecom dba InterQuest 0.00000898% $0.00000319 Century Telecommunications 0.00000886% $0.00000315 Star Tel, Inc. 0.00000862% $0.00000306 Trinet 0.00000814% $0.00000289 Deluxe Data Systems 0.00000761% $0.00000270 Light Link Inc dba Taylor Comm. Grp. 0.00000737% $0.00000262 West Coast Telecommunications 0.00000713% $0.00000253 Pacific Bell Communications 0.00000684% $0.00000243 Horry Telephone Long Distance 0.00000642% $0.00000228 Phoenix Network 0.00000642% $0.00000228 Westcom Long Distance 0.00000630% $0.00000224 Escondido Telephone Co. 0.00000618% $0.00000220 WorldCom Technologies 0.00000565% $0.00000201 Intl. 800 Telecom dba Telecall Long Dist. (EGLOBE) 0.00000565% $0.00000201 NEXTLINK 0.00000499% $0.00000177 Nationwide Communications 0.00000493% $0.00000175 Coastal Telephone Co. 0.00000493% $0.00000175 Access Long Distance 0.00000470% $0.00000167 Tel- Share 0.00000464% $0.00000165 Genesis Communications Int'l 0.00000464% $0.00000165 Gulf Long Distance 0.00000440% $0.00000156 Hi- Plains NTS Communications 0.00000428% $0.00000152 ARRIVA Communications 0.00000422% $0.00000150 Network Operator Services 0.00000404% $0.00000144 American Network Exchange (AMNEX) 0.00000357% $0.00000127 Pilgrim Telephone 0.00000357% $0.00000127 Southern New England Telephone (SNET) 0.00000351% $0.00000125 Long Distance Wholesale Club (Excel) 0.00000345% $0.00000122 Low Country Carrier dba Hargray L. D. Co. 0.00000309% $0.00000110 People's Telephone 0.00000279% $0.00000099 NOS Communications 0.00000273% $0.00000097 North State Telephone Long Distance Co. 0.00000262% $0.00000093 Star Tel Transmission Co. 0.00000256% $0.00000091 Frontier Communications- North Central Region 0.00000250% $0.00000089 Call Savers 0.00000250% $0.00000089 Century Long Distance 0.00000250% $0.00000089 Souris River Telecommunications 0.00000250% $0.00000089 SouthWest United Communication 0.00000250% $0.00000089 Wholesale Telecom Corp. 0.00000250% $0.00000089 Uni Dial 0.00000232% $0.00000082 Texustel 0.00000226% $0.00000080 ITC Networks 0.00000220% $0.00000078 Eclipse Communications 0.00000208% $0.00000074 ConQuest 0.00000190% $0.00000068 EGLOBE INC dba INTL. 800 TELECOM dba TELECAL 0.00000178% $0.00000063 Telergy 0.00000178% $0.00000063 75 Federal Communications Commission FCC 02- 292 6 Long Distance Network 0.00000172% $0.00000061 Dial Long Distance Billing Svcs. 0.00000166% $0.00000059 Fones West Digital Systems 0.00000166% $0.00000059 Home Long Distance 0.00000166% $0.00000059 Call America of Riverside 0.00000160% $0.00000057 Aliant Systems 0.00000160% $0.00000057 USN Communications 0.00000137% $0.00000049 HSS Vending Distributors 0.00000131% $0.00000046 Chautauqua & Erie Communications 0.00000131% $0.00000046 Star Tel Victoria 0.00000131% $0.00000046 fONOROLA 0.00000119% $0.00000042 The Phone Co. 0.00000119% $0.00000042 REAMS COMMUNICATIONS dba VALULINE LONG D 0.00000113% $0.00000040 Apple Communications 0.00000113% $0.00000040 Convergent Communications 0.00000107% $0.00000038 EqualNet Corp. 0.00000107% $0.00000038 Central Telephone Co. 0.00000101% $0.00000036 KRB Telecom 0.00000095% $0.00000034 Ben Lomand Communications 0.00000083% $0.00000030 Valu- Line of Amarillo 0.00000077% $0.00000027 Econo. Call Long Distance Services 0.00000065% $0.00000023 Public Phone 0.00000065% $0.00000023 United States Cellular 0.00000065% $0.00000023 PBC Long Distance 0.00000065% $0.00000023 Alo- USA Corp. 0.00000059% $0.00000021 USLink Long Distance 0.00000053% $0.00000019 Show- Me Long Distance 0.00000053% $0.00000019 Farmers Long Distance 0.00000053% $0.00000019 Interlink Telecommunications 0.00000048% $0.00000017 Fiberline Network Communications 0.00000048% $0.00000017 TelVue Corp. 0.00000048% $0.00000017 Association Communications 0.00000048% $0.00000017 American Tel Enterprises 0.00000048% $0.00000017 Integrated Systems Corp. 0.00000042% $0.00000015 L. D. Services 0.00000042% $0.00000015 United Telephone Co. dba TELAMERICA L. D. 0.00000042% $0.00000015 Colorado River Communications 0.00000042% $0.00000015 Metro One Telecommunications 0.00000042% $0.00000015 Frontier Communications of the Great Lakes 0.00000036% $0.00000013 Working Assets 0.00000036% $0.00000013 Brooks Fiber Communications (WorldCom) 0.00000030% $0.00000011 WATS/ 800 0.00000030% $0.00000011 American Tel Group 0.00000030% $0.00000011 Call America 0.00000030% $0.00000011 Caribbean Telecommunications Consortium 0.00000030% $0.00000011 International Telephone Corp. 0.00000030% $0.00000011 MCI/ 1- 800- COLLECT 0.00000030% $0.00000011 Verizon Select Services 0.00000030% $0.00000011 BizTel Long Distance Telephone Co. 0.00000030% $0.00000011 Cameron Long Distance 0.00000030% $0.00000011 76 Federal Communications Commission FCC 02- 292 7 STARTEC, Inc. 0.00000030% $0.00000011 Athena International 0.00000024% $0.00000008 Telephone Assoc. Long Distance Svcs. 0.00000024% $0.00000008 Home Owners L. D. dba HOLD Billing Svcs. 0.00000024% $0.00000008 Extelcom dba Express Tel 0.00000024% $0.00000008 SBS/ MCI 0.00000024% $0.00000008 Easton Telecom Services 0.00000024% $0.00000008 National Brands dba Sharenet Communications 0.00000024% $0.00000008 Heart of Iowa Communications 0.00000024% $0.00000008 Consolidated Network 0.00000018% $0.00000006 BMG/ TELEMANAGEMENT SYSTEMS (BMG) 0.00000018% $0.00000006 Telecom Affiliates 0.00000018% $0.00000006 Vista Group International 0.00000018% $0.00000006 OCOM Long Distance 0.00000018% $0.00000006 Marietta Fibernet 0.00000018% $0.00000006 NYNEX Long Distance 0.00000018% $0.00000006 Intercontinental Communications Group (ICG) 0.00000012% $0.00000004 Americatel 0.00000012% $0.00000004 U. S. Link 0.00000012% $0.00000004 Tele Tech 0.00000012% $0.00000004 TCA Long Distance 0.00000012% $0.00000004 Intel Communications 0.00000012% $0.00000004 AUC Communications 0.00000012% $0.00000004 AmeriVision Communications 0.00000012% $0.00000004 OPTICOM ONE CALL 0.00000012% $0.00000004 ABCO Communications 0.00000012% $0.00000004 MID SEA dba MIDCOM COMMUNICATIONS 0.00000012% $0.00000004 PBT Communications 0.00000012% $0.00000004 USLINK 0.00000012% $0.00000004 Hotel America 0.00000012% $0.00000004 Lexington Telephone Long Distance 0.00000012% $0.00000004 Worldlink Long Distance 0.00000012% $0.00000004 CTS dba WorldXChange 0.00000012% $0.00000004 AirTouch Cellular 0.00000012% $0.00000004 VTA, Inc. 0.00000012% $0.00000004 US Long Distance 0.00000006% $0.00000002 GST Call America 0.00000006% $0.00000002 Valu- Line of Kansas 0.00000006% $0.00000002 Action Telcom Co. 0.00000006% $0.00000002 Amerinet Communications 0.00000006% $0.00000002 Connect Americom Corp. 0.00000006% $0.00000002 IntelCom Group 0.00000006% $0.00000002 DeltaCom Long Distance Services 0.00000006% $0.00000002 ComCentral dba Southnet Services 0.00000006% $0.00000002 Lucky Dog Phone Co. 0.00000006% $0.00000002 Manitoba Telephone System 0.00000006% $0.00000002 Telephone Communications Corp. 0.00000006% $0.00000002 Asia International Services Corp. 0.00000006% $0.00000002 Touch 1 Communications 0.00000006% $0.00000002 MetroLink 0.00000006% $0.00000002 LA CONEXION FAMILIAR, INC. 0.00000006% $0.00000002 77 Federal Communications Commission FCC 02- 292 8 TTE OF CHARLESTON 0.00000006% $0.00000002 Advanced Telecommunications Network 0.00000006% $0.00000002 American Discount Telecommunications 0.00000006% $0.00000002 METRONET Long Distance Communications 0.00000006% $0.00000002 Tel- Optic, Inc. dba Universal Network Services 0.00000006% $0.00000002 American Long Distance Corp. 0.00000006% $0.00000002 RCN Long Distance 0.00000006% $0.00000002 TMC Long Distance dba Cherry Communications 0.00000006% $0.00000002 KDD America, Inc. 0.00000006% $0.00000002 Startec Global Operating Co. 0.00000006% $0.00000002 Westel Telecommunications, Ltd. 0.00000006% $0.00000002 ITC Networks of Utah 0.00000006% $0.00000002 Nextel Communications 0.00000006% $0.00000002 Telelink 0.00000006% $0.00000002 Communication TeleSystems Intl. 0.00000006% $0.00000002 TLD DE PUERTO RICO 0.00000006% $0.00000002 American Communications Technology 0.00000006% $0.00000002 Hawaiian Telephone Co. (GTE) 0.00000006% $0.00000002 TRT Telecommunications Corp. 0.00000006% $0.00000002 Allcomm Long Distance 0.00000006% $0.00000002 Beauzile Devereux Communications 0.00000006% $0.00000002 CCT (California Catalog and Technology) 0.00000006% $0.00000002 H. G. Telecom 0.00000006% $0.00000002 Long Distance Direct 0.00000006% $0.00000002 O. L. C. Co. 0.00000006% $0.00000002 Plant Long Distance Co. 0.00000006% $0.00000002 Skycomm Technologies 0.00000006% $0.00000002 Tri- Rural Independent Operations 0.00000006% $0.00000002 Quest Telecommunications 0.00000006% $0.00000002 American Lightwave Communications 0.00000006% $0.00000002 Diversified Communications 0.00000006% $0.00000002 Metropolitan Telecommunications 0.00000006% $0.00000002 Monroe Telephone Co. dba Monroe Area Comm 0.00000006% $0.00000002 Plains Cooperative Telephone Association 0.00000006% $0.00000002 VISTA- UNITED TELECOMMUNICATIONS 0.00000006% $0.00000002 World Pass Communications Corp. 0.00000006% $0.00000002 Econ- o- Call, Inc. 0.00000006% $0.00000002 Fiberlink Communications Corp 0.00000006% $0.00000002 Wisconsin Communications Network 0.00000006% $0.00000002 JAS Networks 0.00000006% $0.00000002 LAKES STATES COMM 0.00000006% $0.00000002 NexBell 0.00000006% $0.00000002 Opticall Communications Services 0.00000006% $0.00000002 Bell Canada 0.00000006% $0.00000002 Enhanced Services Billing 0.00000006% $0.00000002 Innovative Communications 0.00000006% $0.00000002 Consolidated Communications Network 0.00000006% $0.00000002 Southwestern Bell Comms. Svcs. dba Ameritech 0.00000006% $0.00000002 Viatel, Inc. 0.00000006% $0.00000002 Nexus Communications 0.00000006% $0.00000002 Net Communications Corp. 0.00000006% $0.00000002 78 Federal Communications Commission FCC 02- 292 9 Communication Services of Colorado 0.00000006% $0.00000002 Frontier Local Services 0.00000006% $0.00000002 Omni Communications 0.00000006% $0.00000002 Total Media Technologies, Inc. 0.00000006% $0.00000002 Centennial De Puerto Rico 0.00000006% $0.00000002 Massena Telephone Co. 0.00000006% $0.00000002 Paradise Communications 0.00000006% $0.00000002 LDC Telecommunications Co. 0.00000006% $0.00000002 79 Federal Communications Commission FCC 02- 292 APPENDIX D Non- Carrier Recipients of Payphone Calls AmVox Arco Paypoint Arthur Anderson & Co. Buypass Corp. California State Lottery Cam- Net Card Establishment Compuserve Contact America Dean Witter Department of Treasury (IRS) Discover & Co. EDS Envoy Corporation ETSC First USA Full Service Computing Harmonic Systems HUB Distributing Idaho State Government JC Penney Business Services Landmark Communications Legal Aid Society of Orange County MAG Card MasterCard International MCSC Access in Canada Merchant Link Mobile Oil Credit Corp. Mogan Stanley National Data Corp. Nexus Communications Paradise Communications PaymentTech Professional Fusion Enterprises PSA, Inc. Public Service Company of New Mexico and Gas Company of New Mexico Resource Technology Southeast Switch State of California Stone & Co. Telemoney Services Transaction Network Services United Refining Vacation Villages of America Visa USA Vital Processing Services 80 Federal Communications Commission FCC 02- 292 2 VoiceCom Systems VTA, Inc. Weeks Communications 81 Federal Communications Commission FCC 02- 292 3 Appendix E Petitions for Reconsideration and Clarification 1. The American Public Communications Council 2. ITC^ DeltaCom Communications, Inc. 3. RBOC Payphone Coalition 4. Sprint Corporation 5. WorldCom, Inc. Comments on Petitions for Reconsideration and Clarification 1. AT& T Corp. 2. Sprint Corporation 3. WorldCom, Inc. 4. National Payphone Clearinghouse 5. RBOC Payphone Coalition 6. Association of Communications Enterprises Replies to Comments on Petitions for Reconsideration and Clarification 1. The American Public Communications Council 2. ITC^ DeltaCom Communications, Inc. 3. RBOC Payphone Coalition 4. Sprint Corporation 5. WorldCom, Inc. 6. Association of Communications Enterprises 82 Federal Communications Commission FCC 02- 292 Appendix F The Federal Communications Commission amends 47 C. F. R. Part 64 as follows: 1. The authority citation for Part 64 continues to read as follows: AUTHORITY: 47 U. S. C. 154, 47 U. S. C. 225, 47 U. S. C. 251( e) (1), 47 U. S. C. 276. 151, 154, 201, 202, 205, 218- 220, 254, 276, 302, 303, and 337 unless otherwise noted. Interpret or apply sections 201, 218, 225, 226, 227, 229, 332, 48 Stat. 1070, as amended. 47 U. S. C. 201- 204, 208, 225, 226, 227, 229, 332, 501 and 503 unless otherwise noted. 2. Revise § 64.1301 to read as follows: § 64.1301 Per- payphone compensation. (a) Interim access code and subscriber 800 calls. In the absence of a negotiated agreement to pay a different amount, each entity listed in Appendix A of the Fifth Order on Reconsideration and Order on Remand in CC Docket No. 96- 128, FCC 02- XX, must pay default compensation to payphone service providers for payphone access code calls and payphone subscriber 800 calls for the period beginning November 7, 1996 and ending October 6, 1997 in the amount listed in Appendix A per payphone per month. (b) Interim payphone compensation for inmate calls. In the absence of a negotiated agreement to pay a different amount, if a payphone service provider providing inmate service was not compensated for calls originating at an inmate telephone during the period starting on November 7, 1996 and ending on October 6, 1997, an interexchange carrier to which the inmate telephone was presubscribed during this same time period must compensate the payphone service provider providing inmate service at the default rate of $0.238 per inmate call originating during the same time period, except that a payphone service provider that is affiliated with a local exchange carrier is not eligible to receive payphone compensation prior to April 16, 1997 or, in the alternative, the first day following both the termination of subsidies and payphone reclassification and transfer, whichever date is latest. (c) Interim compensation for 0+ payphone calls. In the absence of a negotiated agreement to pay a different amount, if a payphone service provider was not compensated for 0+ calls originating during the period starting on November 7, 1996 and ending on October 6, 1997, an interexchange carrier to which the payphone was presubscribed during this same time period must compensate the payphone service provider in the default amount of $4.2747 per payphone per month during the same time period, except that a payphone service provider that is affiliated with a local exchange carrier is not eligible to receive payphone compensation prior to April 16, 1997 or, in the alternative, the first day following both the termination of subsidies and payphone reclassification and transfer, whichever date is latest. (d) Intermediate access code and subscriber 800 calls. In the absence of a negotiated agreement to pay a different amount, each entity listed in Appendix B of the Fifth Order on Reconsideration and Order on Remand in CC Docket No. 96- 128, FCC 02- XX, must pay default compensation to payphone service providers for access code calls and payphone subscriber 800 calls for the period beginning October 7, 1997 and ending April 20, 1999 in the amount listed in 83 Federal Communications Commission FCC 02- 292 2 Appendix B for any payphone for any month during which per- call compensation for that payphone for that month was not paid by the listed entity. (e) Post- intermediate access code and subscriber 800 calls. In the absence of a negotiated agreement to pay a different amount, each entity listed in Appendix C of the Fifth Order on Reconsideration and Order on Remand in CC Docket No. 96- 128, FCC 02- XX, must pay default compensation to payphone service providers for access code calls and payphone subscriber 800 calls for the period beginning April 21, 1999 in the amount listed in Appendix C for any payphone for any month during which per- call compensation for that payphone for that month was or is not paid by the listed entity. 84 Federal Communications Commission FCC 02- 292 APPENDIX G Supplemental Final Regulatory Flexibility Act Analysis 1. As required by the Regulatory Flexibility Act (RFA), 201 an Initial Regulatory Flexibility Analysis (IRFA) was provided in the Payphone NPRM. 202 The Commission sought written public comment on the proposals in the Payphone NPRM, including comment on the IRFA. A Final Regulatory Flexibility Analysis (FRFA) was provided in the First Report and Order, 203 the First Reconsideration Order, 204 the Second Report and Order, 205 the Third Report and Order, 206 and the Fourth Order on Reconsideration. 207 This present FRFA conforms to the RFA, as amended. 208 To the extent that any statement in this FRFA is perceived as creating ambiguity with respect to our rules or statements made in the preceding sections of this order, the rules and statements set forth in those preceding sections are controlling. Need for, and Objectives of, the Rules 2. In adopting Section 276 in 1996, Congress mandated inter alia that the Commission "establish a per- call compensation plan to ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call using their payphone . . ." 209 In this order, the Commission redetermines certain aspects of the per- payphone compensation to be paid to payphone service providers (PSPs) by interexchange carriers (IXCs) and local exchange carriers (LECs) for the Interim period pursuant to the remand by the U. S. Court of Appeals for the District of Columbia Circuit in the Illinois decision. 210 To implement the remand, the Commission has calculated a per- call allocation for each carrier and clarifies the manner in which the true up and offset procedures are to be applied to determine refunds and overpayments. Summary of Significant Issues Raised by the Public Comments in Response to the IRFA 3. We received no comments in direct response to the FRFA in the Fourth Order on Reconsideration. We believe that our rules as adopted in this order minimize the burdens of the per payphone compensation procedure to the benefit of all parties, including small entities. 211 201 See 5 U. S. C. § 603. The RFA, 5 U. S. C. § 601 et seq., has been amended by the Contract with America Advancement Act of 1996, Pub. L. No. 104- 121, 110 Stat. 847 (1996) (CWAA). Title II of the CWAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). 202 Payphone NPRM, 11 FCC Rcd at 6762- 63. 203 First Report and Order, 11 FCC Rcd at 20691- 20709. 204 First Reconsideration Order, 11 FCC Rcd at 21345- 48. 205 Second Report and Order, 12 FCC Rcd at 1835- 45. 206 Third Report and Order, 14 FCC Rcd at 2637- 47. 207 Implementation of the Pay Telephone and Reclassification and Compensation Provisions of the Telecommunications Act of 1966, CC Docket No. 96- 128, Fourth Order on Reconsideration and Order on Remand, 17 FCC Rcd 2020 (2002) (Fourth Reconsideration Order.) 208 See 5 U. S. C. § 604. 209 Pub. L. No. 104- 104, 110 Stat. 56 (1996) (codified at 47 U. S. C. § 276). 210 Illinois, 117 F. 3d. at 555. 211 See "Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered," §§ 25- 26 infra. 85 Federal Communications Commission FCC 02- 292 2 Description and Estimate of the Number of Small Entities to which Rules Will Apply 4. The RFA directs agencies to provide a description of, and an estimate of the number of small entities that may be affected by the rules adopted herein, where feasible. 212 The RFA generally defines "small entity" as having the same meaning as the term "small business," "small organization," and "small governmental jurisdiction." 213 In addition, the term "small business" has the same meaning as the term "small business concern" under the Small Business Act, unless the Commission has developed one or more definitions that are appropriate to its activities. 214 Under the Small Business Act, a "small business concern" is one that: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the SBA. 215 5. We have included small incumbent LECs in this RFA analysis. As noted above, a "small business" under the RFA is one that, inter alia, meets the pertinent small business size standard (e. g., a telephone communications business having 1,500 or fewer employees), and "is not dominant in its field of operation." 216 The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not "national" in scope. 217 We have therefore included small incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on the Commission's analyses and determinations in other, non- RFA contexts. 6. Incumbent Local Exchange Carriers. Neither the Commission nor the SBA has developed a specific definition of small providers of incumbent local exchange services. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 218 According to the most recent Telephone Trends Report data, 1,335 incumbent local exchange carriers reported that they were engaged in the provision of local exchange services. 219 Of these 1,335 carriers, 1,037 reported that they have 1,500 or fewer employees and 298 reported that, 212 5 U. S. C. § 604( a) (3). 213 5 U. S. C. § 601( 6). 214 5 U. S. C. § 601( 3) (incorporating by reference the definition of "small business concern" in 5 U. S. C. § 632). Pursuant to 5 U. S. C. § 601( 3), the statutory definition of a small business applies "unless an agency after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition in the Federal Register." 215 5 U. S. C. § 632. 216 5 U. S. C. § 601( 3). 217 See Letter from Jere W. Glover, Chief Counsel for Advocacy, SBA, to Chairman William E. Kennard, FCC (May 27, 1999). The Small Business Act contains a definition of "small business concern," which the RFA incorporates into its own definition of "small business." See 5 U. S. C. § 632( a) (Small Business Act); 5 U. S. C. 601( 3) (RFA). SBA regulations interpret "small business concern" to include the concept of dominance on a national basis. 13 C. F. R. § 121.102( b). 218 13 C. F. R. § 121.201, NAICS code 513310. 219 Telephone Trends Report, Table 5.3. 86 Federal Communications Commission FCC 02- 292 3 alone or in combination with affiliates, they have more than 1,500 employees. 220 We do not have data specifying the number of these carriers that are either dominant in their field of operations or are not independently owned and operated, and thus are unable at this time to estimate with greater precision the number of incumbent local exchange carriers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that 1,037 or fewer providers of local exchange service are small entitles that may be affected by the rules and policies adopted herein. 7. Competitive Local Exchange Carriers. Neither the Commission nor the SBA has developed a specific definition for small providers of competitive local exchange services. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 221 According to the Commission's Telephone Trends Report data, 349 companies reported that they were engaged in the provision of either competitive access provider services or competitive local exchange carrier services. 222 Of these 349 companies, 297 reported that they have 1,500 or fewer employees and 52 reported that, alone or in combination with affiliates, they have more than 1,500 employees. 223 The Commission does not have data specifying the number of these carriers that are either dominant in their field of operations or are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of competitive local exchange carriers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that fewer than 297 providers of competitive local exchange service are small entities that may be affected by the rules. 8. Competitive Access Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to competitive access providers (CAPS). The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 224 According to the Commission's most recent Telephone Trends Report data, 349 CAPs or competitive local exchange carriers and 60 other local exchange carriers reported that they were engaged in the provision of either competitive access provider services or competitive local exchange carrier services. 225 Of these 349 competitive access providers and competitive local exchange carriers, 297 reported that they have 1,500 or fewer employees and 52 reported that, alone or in combination with affiliates, they have more than 1,500 employees. 226 Of the 60 other local exchange carriers, 56 reported that they have 1,500 or fewer employees and 4 reported that, alone or in combination with affiliates, they have more than 1,500 employees. 227 The Commission does not have data specifying the number of these carriers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of CAPS or other local exchange carriers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that 220 Id. 221 13 C. F. R. § 121.201, NAICS code 513310. 222 Telephone Trends Report, Table 5.3. 223 Id. 224 13 C. F. R. § 121.201, NAICS code 513310. 225 Telephone Trends Report, Table 5.3. 226 Id. 227 Id. 87 Federal Communications Commission FCC 02- 292 4 there are 297 or fewer small entity CAPS and 56 or fewer other local exchange carriers that may be affected by the rules. 9. Local Resellers. The SBA has developed a definition for small businesses within the category of Telecommunications Resellers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 228 According to the Commission's most recent Telephone Trends Report data, 87 companies reported that they were engaged in the provision of local resale services. 229 Of these 87 companies, 86 reported that they have 1,500 or fewer employees and one reported that, alone or in combination with affiliates, it had more than 1,500 employees. 230 The Commission does not have data specifying the number of these local resellers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of local resellers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 86 or fewer local resellers that may be affected by the rules. 10. Toll Resellers. The SBA has developed a definition for small businesses within the category of Telecommunications Resellers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 231 According to the Commission's most recent Telephone Trends Report data, 454 companies reported that they were engaged in the provision of toll resale services. 232 Of these 454 companies, 423 reported that they have 1,500 or fewer employees and 31 reported that, alone or in combination with affiliates, they have more than 1,500 employees. 233 The Commission does not have data specifying the number of these toll resellers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of toll resellers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 423 or fewer toll resellers that may be affected by the rules. 11. Payphone Service Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to payphone service providers (PSPs). The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 234 According to the Commission's most recent Trends in Telephone Service data, 758 PSPs reported that they were engaged in the provision of payphone services. 235 Of these 758 payphone service providers, 755 reported that they have 1,500 or fewer employees and 3 reported that, alone or in combination with affiliates, they have more than 1,500 employees. 236 The Commission does not have data specifying the number of these payphone service providers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of PSPs that would qualify as small business concerns under the SBA's definition. 228 13 C. F. R. § 121.201, NAICS code 513330. 229 Telephone Trends Report, Table 5.3. 230 Id. 231 13 C. F. R. § 121.201, NAICS code 513330. 232 Telephone Trends Report, Table 5.3. 233 Id. 234 13 C. F. R. § 121.201, NAICS code 513310. 235 Telephone Trends Report, Table 5.3. 236 Id. 88 Federal Communications Commission FCC 02- 292 5 Consequently, the Commission estimates that there are 755 or fewer PSPs that may be affected by the rules. 12. Interexchange Carriers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of interexchange services. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 237 According to the most recent Telephone Trends Report data, 204 carriers reported that their primary telecommunications service activity was the provision of interexchange services. 238 Of these 204 carriers, 163 reported that they have 1,500 or fewer employees and 41 reported that, alone or in combination with affiliates, they have more than 1,500 employees. 239 We do not have data specifying the number of these carriers that are not independently owned and operated, and thus are unable at this time to estimate with greater precision the number of IXCs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 163 or fewer small entity IXCs that may be affected by the rules. 13. Operator Service Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to operator service providers. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 240 According to the Commission's most recent Telephone Trends Report data, 21 companies reported that they were engaged in the provision of operator services. 241 Of these 21 companies, 20 reported that they have 1,500 or fewer employees and one reported that, alone or in combination with affiliates, it had more than 1,500 employees. 242 The Commission does not have data specifying the number of these operator service providers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of operator service providers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 20 or fewer local resellers that may be affected by the rules. 14. Prepaid Calling Card Providers. The SBA has developed a definition for small businesses within the category of Telecommunications Resellers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 243 According to the Commission's most recent Telephone Trends Report data, 21 companies reported that they were engaged in the provision of prepaid calling cards. 244 Of these 21 companies, 20 reported that they have 1,500 or fewer employees and one reported that, alone or in combination with affiliates, it had more than 1,500 employees. 245 The Commission does not have data specifying the number of these local resellers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of prepaid calling card providers that would qualify 237 13 C. F. R. § 121.201, NAICS code 513310. 238 Telephone Trends Report, Table 5. 3. 239 Id. 240 13 C. F. R. § 121.201, NAICS code 513310. 241 Telephone Trends Report, Table 5.3. 242 Id. 243 13 C. F. R. § 121.201, NAICS code 513330. 244 Telephone Trends Report, Table 5.3. 245 Id. 89 Federal Communications Commission FCC 02- 292 6 as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 20 or fewer local resellers that may be affected by the rules. 15. Satellite Service Carriers. The SBA has developed a definition for small businesses within the category of Satellite Telecommunications. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 246 According to the Commission's most recent Telephone Trends Report data, 21 carriers reported that they were engaged in the provision of satellite services. 247 Of these 21 carriers, 16 reported that they have 1,500 or fewer employees and five reported that, alone or in combination with affiliates, they have more than 1,500 employees. 248 The Commission does not have data specifying the number of these carriers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of satellite service carriers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 21 or fewer satellite service carriers that may be affected by the rules. 16. Other Toll Carriers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to "Other Toll Carriers." This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 249 According to the Commission's most recent Telephone Trends Report data, 17 carriers reported that they were engaged in the provision of "Other Toll Services." 250 Of these 17 carriers, 15 reported that they have 1,500 or fewer employees and two reported that, alone or in combination with affiliates, they have more than 1,500 employees. 251 The Commission does not have data specifying the number of these other toll carriers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of "Other Toll Carriers" that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 15 or fewer Other Toll Carriers" that may be affected by the rules. 17. Wireless Service Providers. The SBA has developed a definition for small businesses within the two separate categories of Cellular and Other Wireless Telecommunications or Paging. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 252 According to the Commission's most recent Telephone Trends Report data, 1,495 companies reported that they were engaged in the provision of wireless service. 253 Of these 1,495 companies, 989 reported that they have 1,500 or fewer employees and 506 reported that, alone or in combination with affiliates, they have more than 1,500 employees. We do not have data specifying the number of these carriers that are not independently owned and operated, and thus are unable at this time to estimate with greater precision the number of 246 13 C. F. R. § 121.201, NAICS code 513340. 247 Telephone Trends Report, Table 5.3. 248 Id. 249 13 C. F. R. § 121.201, NAICS code 513310. 250 Telephone Trends Report, Table 5.3. 251 Id. 252 13 C. F. R. § 121.201, NAICS code 513322. 253 Telephone Trends Report, Table 5. 3. 90 Federal Communications Commission FCC 02- 292 7 wireless service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 989 or fewer small wireless service providers that may be affected by the rules. 18. Broadband Personal Communications Service. The broadband personal communications service (PCS) spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission defined "small entity" for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar years. 254 For Block F, an additional classification for "very small business" was added and is defined as an entity that, together with their affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. 255 These regulations defining "small entity" in the context of broadband PCS auctions have been approved by the SBA. 256 No small businesses within the SBA- approved definition bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C auctions. A total of 93 small and very small business bidders won approximately 40 percent of the 1,479 licenses for Blocks D, E, and F. 257 Based on this information, we conclude that the number of small broadband PCS licensees will include the 90 winning C Block bidders and the 93 qualifying bidders in the D, E, and F Block auctions, for a total of 183 small entity PCS providers as defined by the SBA and the Commission's auction rules. 19. 800 MHz and 900 MHz Specialized Mobile Radio Licensees. The Commission awards bidding credits in auctions for geographic area 800 MHz and 900 MHz Specialized Mobile Radio (SMR) licenses to firms that had revenues of no more than $15 million in each of the three previous calendar years. 258 In the context of both the 800 MHz and 900 MHz SMR, a definition of "small entity" has been approved by the SBA. These bidding credits apply to SMR providers in the 800 MHz and 900 MHz bands that either hold geographic area licenses or have obtained extended implementation authorizations. We do not know how many firms provide 800 MHz or 900 MHz geographic area SMR service pursuant to extended implementation authorizations, nor how many of these providers have annual revenues of no more than $15 million. 20. Rural Radiotelephone Service. The Commission has not adopted a definition of small entity specific to the Rural Radiotelephone Service. 259 A significant subset of the Rural 254 See Amendment of Parts 20 and 24 of the Commission's Rules - Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap, WT Docket No. 96- 59, Report and Order, 11 FCC Rcd 7824, ¶¶ 57- 60 (1996), 61 Fed. Reg. 33859 (July 1, 1996); see also 47 C. F. R. § 24.720( b). 255 See Amendment of Parts 20 and 24 of the Commission's Rules - Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap, WT Docket No. 96- 59, Report and Order, 11 FCC Rcd 7824, ¶¶ 57- 60 (1996), 61 Fed. Reg. 33859 (July 1, 1996). 256 See, e. g., Implementation of Section 309( j) of the Communications Act -- Competitive Bidding, PP Docket No. 93- 253, Fifth Report and Order, 9 FCC Rcd 5532, 5581- 84, ¶¶ 115- 17 (1994). 257 FCC News, Broadband PCS, D, E and F Block Auction Closes, No. 71744 (rel. Jan. 14, 1997). 258 47 C. F. R. § 90.814( b) (1). 259 The service is defined in § 22.99 of the Commission's Rules. 47 C. F. R. § 22.99. 91 Federal Communications Commission FCC 02- 292 8 Radiotelephone Service is the Basic Exchange Telephone Radio Systems (BETRS). 260 We will use the SBA's definition applicable to wireless companies, i. e., an entity employing no more than 1,500 persons. 261 There are approximately 1,000 licensees in the Rural Radiotelephone Service, and we estimate that almost all of them qualify as small entities under the SBA's definition. 21. Fixed Microwave Services. Microwave services include common carrier, 262 private-operational fixed, 263 and broadcast auxiliary radio services. 264 At present, there are approximately 22,015 common carrier fixed licensees and 61,670 private operational- fixed licensees and broadcast auxiliary radio licensees in the microwave services. The Commission has not defined a small business specifically with respect to microwave services. For purposes of this Supplemental FRFA, we utilize the SBA's definition applicable to wireless companies- - i. e., an entity with no more than 1,500 persons. 265 We do not have data specifying the number of these licensees that have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of fixed microwave service licensees that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 22,015 or fewer small common carrier fixed microwave licensees and 61,670 or fewer small private operational- fixed microwave licensees and small broadcast auxiliary radio licensees in the microwave services that may be affected by the rules. We note, however, that the common carrier microwave fixed licensee category includes some large entities. 22. 39 GHz Licensees. The Commission defined “small entity” for 39 GHz licenses as an entity that has average gross revenues of less than $40 million in the three previous calendar years. 266 An additional classification for “very small business” was added and is defined as an entity that, together with their affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. 267 The SBA approved these regulations defining “small entity” in the context of 39 GHz auctions. 268 The auction of the 2,173 39 GHz licenses began on 260 BETRS is defined in §§ 22.757 and 22.759 of the Commission's Rules. 47 C. F. R. §§ 22.757, 22.759. 261 13 C. F. R. § 121.201, NAICS codes 513321, 513322, and 51333. 262 47 C. F. R. §§ 101, et seq. (formerly Part 21 of the Commission's Rules). 263 Persons eligible under Parts 80 and 90 of the Commission's rules can use Private Operational- Fixed Microwave services. See 47 C. F. R. Parts 80, 90. Stations in this service are called operational- fixed to distinguish them from common carrier and public fixed stations. Only the licensee may use the operational- fixed station, and only for communications related to the licensee's commercial, industrial, or safety operations. 264 Auxiliary Microwave Service is governed by Part 74 of the Commission's rules. See 47 C. F. R. Part 74. The Auxiliary Microwave Service is available to licensees of broadcast stations and to broadcast and cable network entities, broadcast auxiliary microwave stations and are used for relaying broadcast television signals from the studio to the transmitter, or between two points such as a main studio and an auxiliary studio. The service also includes mobile TV pickups, which relay signals from a remote location back to the studio. 265 13 C. F. R. § 121.201, NAICS codes 513321, 513322, and 51333. 266 See Amendment of the Commission’s Rules Regarding the 37.0- 38.6 GHz and 38.6- 40.0 GHz Bands, ET Docket No. 95- 183, Report and Order, 12 FCC Rcd 18600 (1997). 267 Id. 268 See Letter to Kathleen O'Brien Ham, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, SBA (Feb. 4, 1998). 92 Federal Communications Commission FCC 02- 292 9 April 12, 2000 and closed on May 8, 2000. The 18 bidders who claimed small business status won 849 licenses. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements 23. As mandated by the court in the Illinois decision, we established a compensation procedure for resolving monthly payments and refunds between PSPs and carriers for the Interim Period, starting on November 7, 1996 through October 6, 1997, where payphone service providers (PSPs) and IXCs may have been overpaid or underpaid for services. In addition, we are applying our Interim Procedures to cover the subsequent Intermediate Period which commenced October 7, 1997 and ended April 20, 1999. 24. With this exception, this order imposes no new reporting, recordkeeping or other compliance requirements not previously adopted in this or related payphone proceedings. Steps Taken To Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered 25. Although we reject, because of the degree of regulatory intervention it would require, a proposal to establish a carrier- to- carrier payment mechanism for resolving payments and refunds, we specify instead carrier- specific per- call costs that can be used by carriers and PSPs to calculate total over or underpayments. The order also affirms the conclusions reached in the Fourth Order on Reconsideration that alternative payment arrangements can be made between or among carriers provided they are agreed to by affected PSPs. Adoption of this payment scheme will minimize the economic impact and administrative burden for both payors and recipients of payphone compensation, including small entities. 26. This Order also recognizes that small entities such as PSPs would be disadvantaged by the true up and offset mechanisms used in the per- call compensation process. The Order recognizes that such a process would allow carriers to use a self- help remedy of withholding future payments from PSPs, and that carriers would have no incentive to resolve such disputes in a timely manner. The Order, therefore, affirms the conclusion reached in the Third Report and Order that carriers may deduct the remaining overpayments from future payments to PSPs, but clarifies that it may only be done as follows: (1) carriers may only withhold undisputed amounts from future payments; (2) carriers may not withhold any amounts from future payments until PSPs and carriers have had an opportunity to apply the refund against Interim and Intermediate Period compensation claimed by the PSP; and (3) carriers must allow PSPs to make payments of refunds over multiple future payments subject to ongoing accrual interest, if reasonably requested by the PSP. We are satisfied that these procedural safeguards will restore the necessary measures of fairness to the process for small entities. Report to Congress 27. The Commission will send a copy of this Order, including this Supplemental FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act. 269 In addition, the 269 See 5 U. S. C. § 801( a) (1) (A). 93 Federal Communications Commission FCC 02- 292 10 Commission will send a copy of this Order, including this Supplemental FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of this Order and Supplemental FRFA (or summaries thereof) will also be published in the Federal Register. 270 270 See 5 U. S. C. § 604( b). 94