Sec.  36.601   General.

   (a) The term Universal Service Fund in this subpart refers only to the
   support for loop-related costs included in  Sec. 36.621. The term Universal
   Service in part 54 of this chapter refers to the comprehensive discussion of
   the Commission's rules implementing section 254 of the Communications Act of
   1934, as amended, 47 U.S.C. 254, which addresses universal service support
   for rural, insular, and high cost areas, low-income consumers, schools and
   libraries, and heath care providers. The expense adjustment calculated
   pursuant  to  this subpart F shall be added to interstate expenses and
   deducted from state expenses after expenses and taxes have been apportioned
   pursuant to subpart D of this part. Beginning January 1, 1998, the expense
   adjustment calculated pursuant to this subpart will be administered and
   funded through the new universal service system discussed in part 54 of this
   chapter.

   (b) The expense adjustment will be computed on the basis of data for a
   preceding calendar year which may be updated at the option of the carrier
   pursuant to  Sec. 36.612(a).

   (c) Until June 30, 2001, the annual amount of the total nationwide expense
   adjustment shall consist of the amounts calculated pursuant to  Sec. 54.309 of
   this chapter and the amounts calculated pursuant to this subpart F. The
   annual  amount  of  the  total nationwide loop cost expense adjustment
   calculated pursuant to this subpart F shall not exceed the amount of the
   total loop cost expense adjustment for the immediately preceding calendar
   year, increased by a rate equal to the rate of increase in the total number
   of working loops during the calendar year preceding the July 31st filing.
   The  total loop cost expense adjustment shall consist of the loop cost
   expense adjustments, including amounts calculated pursuant to  Sec. 36.612(a) and
    Sec. 36.631. The rate of increase in total working loops shall be based upon the
   difference between the number of total working loops on December 31 of the
   calendar year preceding the July 31st filing and the number of total working
   loops on December 31 of the second calendar year preceding that filing, both
   determined by the company's submissions pursuant to  Sec. 36.611. Beginning
   January 1, 2000, non-rural incumbent local exchange carriers and, eligible
   telecommunications carriers serving lines in the service area of non-rural
   incumbent local exchange carriers, shall only receive support pursuant to
   this subpart F to the extent that they qualify pursuant to  Sec. 54.311 of this
   chapter  for interim hold-harmless support. Support amounts calculated
   pursuant to this subpart F but not received due to the phase down of interim
   hold-harmless support or the receipt of forward-looking support pursuant to
    Sec. 54.311 of this chapter shall not be redistributed to other carriers.

   [ 52 FR 17229 , May 6, 1987, as amended at  56 FR 27422 , June 14, 1991;  58 FR 69242 , Dec. 30, 1993;  61 FR 34376 , July 2, 1996;  62 FR 32947 , June 17, 1997;
    62 FR 40748 , July 30, 1997;  63 FR 2124 , Jan. 13, 1998;  64 FR 30924 , June 9,
   1999;  64 FR 67430 , Dec. 1, 1999;  65 FR 78992 , Dec. 18, 2000;  66 FR 30085 ,
   June 5, 2001]