Goto Section: 54.302 | 54.304 | Table of Contents
Revised as of April 23, 2019
Goto Year:2018 |
§ 54.303 Eligible Capital Investment and Operating Expenses.
(a) Eligible Operating Expenses. Each study area's eligible operating
expenses for purposes of calculating universal service support pursuant
to subparts K and M of this part shall be adjusted as follows:
(1) Total eligible annual operating expenses per location shall be
limited as follows: Calculate Exp(Ŷ + 1.5 * mean square error of the
Ŷ = α̂ + β̂1X1 + β̂2X2 + β̂3X3
α̂, β̂1, β̂2, and β̂3 are the coefficients from the regression,
X1 is the natural log of the number of housing units in the study area,
X2 is the natural log of the number of density (number of housing units
per square mile), and
X3 is the square of the natural log of the density
(2) Eligible operating expenses are the sum of Cable and Wire
Facilities Expense, Central Office Equipment Expense, Network Support
and General Expense, Network Operations Expense, Limited Corporate
Operations Expense, Information Origination/Termination Expense, Other
Property Plant and Equipment Expenses, Customer Operations Expense:
Marketing, and Customer Operations Expense: Services.
(3) For purposes of this section, the number of housing units will be
determined per the most recently available U.S Census data for each
census block in that study area. If a census block is partially within
a study area, the number of housing units in that portion of the census
block will be determined based upon the percentage geographic area of
the census block within the study area.
(4) Notwithstanding the provisions of paragraph (a) of this section,
total eligible annual operating expenses for 2016 will be limited to
the total eligible annual operating expenses as defined in this section
plus one half of the amount of total eligible annual expense as
calculated prior to the application of this section.
(5) For any study area subject to the limitation described in this
paragraph, a required percentage reduction will be calculated for that
study area's total eligible annual operating expenses. Each category or
account used to determine that study area's total eligible annual
operating expenses will then be reduced by this required percentage
(6) For a period of five years following the implementation of
paragraph (a) of this section, the total eligible annual operating
expenses per location in paragraph (a) shall be adjusted annually to
account for changes to the Department of Commerce's Gross Domestic
Product Chain-type Price Index (GDP-CPI).
(7) For those study areas where a majority of the housing units are on
Tribal lands, as determined by the Wireline Competition Bureau, and
meet the following conditions, total eligible annual operating expenses
per location shall be limited by calculating Exp (Ŷ + 2.5 * mean square
error of the regression): The carrier serving the study area has not
deployed broadband service of 10 Mbps download/1 Mbps upload to 90
percent or more of the housing units on the Tribal lands in its study
area and unsubsidized competitors have not deployed broadband service
of 10 Mbps download/1 Mbps upload to 85 percent or more of the housing
units on the Tribal lands in its study area.
[ 81 FR 24337 , Apr. 25, 2016, as amended at 82 FR 14339 , Mar. 20, 2017;
82 FR 16127 , Apr. 3, 2017; 82 FR 22903 , May 19, 2017; 83 FR 18964 , May
1, 2018 ; 83 FR 30884 , July 2, 2018; 84 FR 4730 , Feb. 19, 2019]
Effective Date Note: At 81 FR 24337 . Apr. 25, 2016, § 54.303 was added.
Paragraph (b) contains information collection and recordkeeping
requirements and will not become effective until approval has been
given by the Office of Management and Budget.
Editorial Note: At 83 FR 18950 , 18964, May 1, 2018, § 54.303 was amended
by adding paragraph (a)(6), however, the agency provided two different
(a)(6)'s and we were not sure which one to add correctly, so the
amendment could not be incorporated due to inaccurate amendatory
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Goto Section: 54.302 | 54.304
Goto Year: 2018 |
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