§  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 § 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 § 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 § 54.309.

   [ 68 FR 69626 , Dec. 15, 2003]

Subpart E—Universal Service Support for Low-Income Consumers