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2003 A/Q True Up Calculation Explanation

Relevant information for the 2003 USF A/Q True Up:

3rd quarter 2002 FCC Contribution Factor:	7.2805%
4th quarter 2002 FCC Contribution Factor: Â	7.2805%
1st quarter 2003 FCC Contribution Factor:	7.2805%

 

For the 2003 USF A/Q True Up, the following inputs will be used:

A.	Avg. of 2 highest FCC Contribution Factors	7.2805%
B.	Avg. of 2 lowest FCC Contribution Factors	7.2805%
C.	Avg. of all 4 FCC Contribution Factors	7.2805%
D.	1st quarter 2002 collected interstate & international revenue	Lines 116b & 116c on the May 2002 Form 499Q
E.	2nd quarter 2002 collected interstate & international revenue	Lines 116b & 116c on the August 2002 Form 499Q
F.	3rd quarter 2002 collected interstate & international revenue	Lines 116b & 116c on the November 2002 Form 499Q
G.	4th quarter 2002 collected interstate & international revenue	Lines 116b & 116c on the February 2003 Form 499Q
H.	Year 2002 collected interstate & international revenue	Lines 420d & 420e on the 2003 Form 499A
I.	Estimated FCC Factor (for 4th quarter de minimis calculation only)	7.5%
J.	1st quarter 2002 Support Mechanism Activity
K.	2nd quarter 2002 Support Mechanism Activity

 

1. The first step in the True Up is determining which FCC Factor to use in the True Up calculation. After determining which factor is applicable, it will be used to replace the “Average FCC Contribution Factor*” in steps 2 & 3.

Average of 2 highest FCC Contribution Factors should be used if (H-G) > (D+E+F)

Average of 2 lowest FCC Contribution Factors should be used if (H-G) < (D+E+F)

Average of all 4 FCC Contribution Factors should be used if (H-G) = (D+E+F)

2. The next step is to determine whether or not the company is de minimis for purposes of the A/Q True Up. If the following calculation results in less than $10,000, the carrier is de minimis:

 

(1/2 499A Revenue) x (Average FCC Contribution Factor*) + (Q1 & Q2 2002 Support Mechanism Activity) + (1/2 2002 A/Q True Up Credits/Adjustments)

Should the above calculation result in less than $10,000, the contributor will have their January – December 2002 Support Mechanism charges reversed. If the contributor is found to be not de minimis for purposes of the A/Q True Up, Step 3 is performed.

3. Using the inputs noted above, The A/Q True Up formula for calculating necessary Support Mechanism Credits or Adjustments will be as follows:

 

{(499A Revenue – 4Q Revenue) – (1Q Revenue + 2Q Revenue + 3Q Revenue)} x (FCC Contribution Factor*) = Quarterly Adjustment/Credit

(Quarterly Adj/Credit) / 3 = Monthly Adjustment/Credit