Sec. 54.709  Computations of required contributions to universal service 
          support mechanisms.

    (a) Contributions to the universal service support mechanisms shall 
be based on contributors' end-user telecommunications revenues and 
contribution factors determined quarterly by the Administrator.
    (1) For funding the schools and libraries and rural health care 
programs, the subject revenues will be contributors' interstate, 
intrastate, and international revenues derived from domestic end users 
for telecommunications or telecommunications services. For funding the 
high cost and low-income programs, the subject revenues will be 
contributors' interstate and international revenues derived from 
domestic end users for telecommunications or telecommunications 
services.
    (2) The quarterly universal service contribution factors shall be 
based on the ratio of total projected quarterly expenses of the 
universal service support programs to total end-user telecommunications 
revenues. The Commission shall determine two contribution factors, one 
of which shall be applied to interstate and international end-user 
telecommunications revenues and the other of which shall be applied to 
interstate, intrastate, and international end-user telecommunications 
revenues. The Commission shall approve the Administrator's, the Schools 
and Libraries Corporation's, and the

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Rural Health Care Corporation's quarterly projected costs of universal 
service support programs, taking into account demand for support and 
administrative expenses. The total subject revenues shall be compiled by 
the Administrator based on information contained in the Universal 
Service Worksheets described in Sec. 54.711(a)
    (3) Total projected expenses for universal service support programs 
for each quarter must be approved by the Commission before they are used 
to calculate the quarterly contribution factors and individual 
contributions. For each quarter, the High Cost and Low Income Committee 
or the permanent Administrator once the permanent administrator is 
chosen and the Schools and Libraries and Rural Health Care Corporations 
must submit their projections of demand for the high cost and low-income 
programs, the schools and libraries program, and rural health care 
program, respectively, and the basis for those projections, to the 
Commission and the Common Carrier Bureau at least 60 calendar days prior 
to the start of that quarter. For each quarter, the Administrator and 
the Schools and Libraries and Rural Health Care Corporations must submit 
their projections of administrative expenses for the high cost and low-
income programs, the schools and libraries program and the rural health 
care program, respectively, and the basis for those projections to the 
Commission and the Common Carrier Bureau at least 60 calendar days prior 
to the start of that quarter. The projections of demand and 
administrative expenses and the contribution factors shall be announced 
by the Commission in a Public Notice published in the Federal Register 
and shall be made available on the Commission's website. The Commission 
reserves the right to set projections of demand and administrative 
expenses at amounts that the Commission determines will serve the public 
interest at any time within the 14-day period following publication of 
the Commission's Public Notice. If the Commission takes no action within 
14 days of the date of the Public Notice announcing the projections of 
demand and administrative expenses, the projections of demand and 
administrative expenses, and contribution factors shall be deemed 
approved by the Commission. Once the projections are approved, the 
Administrator shall apply the quarterly contribution factors to 
determine individual contributions.
    (4) The Administrator shall bill contributors and collect 
contributions on a quarterly basis.
    (b) If the contributions received by the Administrator in a quarter 
exceed the amount of universal service support program contributions and 
administrative costs for that quarter, the excess payments will be 
carried forward to the following quarter. The contribution factors for 
the following quarter will take into consideration the projected costs 
of the support mechanisms for that quarter and the excess contributions 
carried over from the previous quarter.
    (c) If the contributions received by the Administrator in a quarter 
are inadequate to meet the amount of universal service support program 
payments and administrative costs for that quarter, the Administrator 
shall request authority from the Commission to borrow funds 
commercially, with such debt secured by future contributions. Subsequent 
contribution factors will take into consideration the projected costs of 
the support mechanisms and the additional costs associated with 
borrowing funds.
    (d) If a contributor fails to file a Universal Service Worksheet by 
the date on which it is due, the Administrator shall bill that 
contributor based on whatever relevant data the Administrator has 
available, including, but not limited to, the number of lines 
presubscribed to the contributor and data from previous years, taking 
into consideration any estimated changes in such data.

[ 62 FR 41305 , Aug. 1, 1997]