Sec.  54.311   Interim hold-harmless support for non-rural carriers.

   (a) Interim hold-harmless support. The total amount of interim hold-harmless
   support provided to a non-rural incumbent local exchange carrier shall equal
   the amount of support calculated for that carrier pursuant to part 36 of
   this chapter. The total amount of interim hold-harmless support provided to
   a non-rural incumbent local exchange carrier shall also include Long Term
   Support provided pursuant to  Sec. 54.303, to the extent that the carrier would
   otherwise be eligible for such support. Beginning on January 1, 2000, in the
   event that a State's statewide average FLEC per line, calculated pursuant to
    Sec. 54.309(a), does not exceed the national cost benchmark, non-rural incumbent
   local exchange carriers in such State shall receive interim hold-harmless
   support calculated pursuant to part 36, and, if applicable,  Sec. 54.303. In the
   event that a State's statewide average FLEC per line, calculated pursuant to
    Sec. 54.309(a), exceeds the national cost benchmark, but the amount of support
   that would be provided to a non-rural incumbent local exchange carrier in
   such State pursuant to  Sec. 54.309(b) is less than the amount that would be
   provided pursuant to part 36 and, if applicable,  Sec. 54.303, the carrier shall
   be eligible for support pursuant to part 36 and, if applicable,  Sec. 54.303. To
   the extent that an eligible telecommunications carrier serves lines in the
   service area of a non-rural incumbent local exchange carrier receiving
   interim hold-harmless support, the eligible telecommunications carrier shall
   also be entitled to interim hold-harmless support in an amount per line
   equal to the amount per line provided to the non-rural incumbent local
   exchange carrier pursuant to paragraph (b) of this section.

   (b) Distribution of Interim Hold-Harmless Support Amounts. Until the third
   quarter of 2000, interim hold-harmless support shall be distributed pursuant
   to part 36 and, if applicable,  Sec. 54.303 of this subpart. Beginning in the
   third quarter of 2000, the total amount of interim hold-harmless support
   provided  to  each non-rural incumbent local exchange carrier within a
   particular State pursuant to paragraph (a) shall be distributed first to the
   carrier's wire center with the highest wire center average FLEC per line
   until that wire center's average FLEC per line, net of support, equals the
   average FLEC per line in the second most high-cost wire center. Support
   shall then be distributed to the carrier's wire center with the highest and
   second highest wire center average FLEC per line until those wire center's
   average FLECs per line, net of support, equal the average FLEC per line in
   the third most high-cost wire center. This process shall continue in a
   cascading fashion until all of the interim hold-harmless support provided to
   the carrier has been exhausted.

   (c) Petition for waiver. Pursuant to section 1.3 of this chapter, a State
   may file a petition for waiver of paragraph (b) of this section, asking the
   Commission to distribute interim hold-harmless support to a geographic area
   different than the wire center. Such petition must contain a description of
   the  particular  geographic  level  to which the State desires interim
   hold-harmless support to be distributed, and an explanation of how waiver of
   paragraph (b) of this section will further the preservation and advancement
   of universal service within the State.

   (d) Phase down of interim hold-harmless support. Beginning January 1, 2001,
   the interim hold-harmless support for which a non-rural incumbent local
   exchange carrier qualifies under paragraph (a) of this section, excluding
   Long Term Support, shall be phased down through annual $1.00 reductions in
   average monthly, per-line support. Applicable annual reductions shall be
   subtracted from the total amount of interim hold-harmless support that a
   non-rural incumbent local exchange carrier otherwise would be eligible to
   receive on an ongoing, quarterly basis. The provisions of paragraph (b) of
   this  section  shall  apply to the total amount of phased-down interim
   hold-harmless support provided to each non-rural incumbent local exchange
   carrier.

   (1) Interim hold-harmless support for a wire center transferred to a carrier
   that does not meet the definition of rural telephone company in  Sec. 51.5 of
   this chapter shall be phased down following the transfer over the same time
   period as the seller's support would have been phased down, by an equal
   percentage for each year of the phase-down period.

   (2) Interim hold-harmless support for a wire center transferred to a carrier
   that  meets the definition of rural telephone company in  Sec. 51.5 of this
   chapter shall remain frozen at the per-line support level as of the sale
   date.

   [ 64 FR 67432 , Dec. 1, 1999, as amended at  64 FR 73428 , Dec. 30, 1999;  65 FR 78992 , Dec. 18, 2000]