Sec.  54.316   Rate comparability review and certification for areas served by
non-rural carriers.

   (a) Certification. Each state will be required annually to review the
   comparability of residential rates in rural areas of the state served by
   non-rural incumbent local exchange carriers to urban rates nationwide, and
   to certify to the Commission and the Administrator as to whether the rates
   are reasonably comparable, for purposes of section 254(b)(3) of the
   Telecommunications Act of 1996. If a state does not rely on the safe harbor
   described in paragraph (b) of this section, or certifies that the rates are
   not reasonably comparable, the state must fully explain its rate
   comparability analysis and provide data supporting its certification,
   including but not limited to residential rate data for rural areas within
   the state served by non-rural incumbent local exchange carriers. If a state
   certifies that the rates are not reasonably comparable, it must also explain
   why the rates are not reasonably comparable and explain what action it
   intends to take to achieve rate comparability.

   (b) Safe harbor. For the purposes of its certification, a state may presume
   that the residential rates in rural areas served by non-rural incumbent
   local exchange carriers are reasonably comparable to urban rates nationwide
   if the rates are below the nationwide urban rate benchmark. The nationwide
   urban rate benchmark shall equal the most recent average urban rate plus two
   weighted standard deviations. The benchmark shall be calculated using the
   average urban rate and standard deviation shown in the most recent annual
   Reference Book of Rates, Price Indices, and Expenditures for Telephone
   Service published by the Wireline Competition Bureau. To the extent that a
   state relies on the safe harbor, the rates that it compares to the
   nationwide urban rate benchmark shall include the access charges and other
   mandatory monthly rates included in the rate survey published in the most
   recent annual Reference Book of Rates, Price Indices, and Expenditures for
   Telephone Service. The Reference Book of Rates, Price Indices, and
   Expenditures for Telephone Service is available for public inspection at the
   Commission's Reference Center at 445 12th Street, S.W., Washington, D.C.
   20554 and on the Commission Web site at www.fcc.gov/wcb/iatd/lec.html.

   (c) Definition of “rural area.” For the purposes of this section, a “rural
   area” is a non-metropolitan county or county equivalent, as defined in the
   Office of Management and Budget's (OMB) Revised Standards for Defining
   Metropolitan Areas in the 1990s and identifiable from the most recent
   Metropolitan Statistical Area (MSA) list released by OMB. At a state's
   discretion, a “rural area” may also include any wire center designated by
   the state as rural for the purposes of this section. In the event that a
   state designates a wire center as rural, it must provide an explanation
   supporting such designation in its certification pursuant to paragraph (a)
   of this section.

   (d) Schedule for certification. Annual certifications are required on the
   schedule set forth in  Sec. 54.313(d)(3), beginning October 1, 2004.
   Certifications due on October 1 of each year shall pertain to rates as of
   the prior July 1. Certifications filed during the remainder of the schedule
   set forth in  Sec. 54.313(d)(3) shall pertain to the same date as if they had
   been filed on October 1.

   (e) Effect of failure to certify. In the event that a state fails to
   certify, no eligible telecommunications carrier in the state shall receive
   support pursuant to  Sec. 54.309.

   [ 68 FR 69626 , Dec. 15, 2003]

Subpart E—Universal Service Support for Low-Income Consumers