About High Cost:

• Overview of the Program
• Overview of the Process
• USAC FCC Filings
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• HCLI Training Events
• Individual Outreach
• Video Tutorials
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• Filing Appeals
• Red Light Status (FCC site)
• Requesting Confidential Information
• Understanding Audits
• Understanding Disaggregation

High Cost Tools:

• Required Forms
• Filing Requirements and Deadlines
• Form 525 Online
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• Wire Center – UNE Zone Mapping
• IAS Maps
• HCM CLLI Tool
• Disaggregation Maps
• Disaggregation Checklist
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• Disbursement Data Search
• Certification Search
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• Latest News
• Submitting A Complaint
• Program Compliance - Whistleblower Hotline

Step 1: Understand What is Supported

The High Cost Program of the Universal Service Fund, which is administered by the Universal Service Administrative Company (USAC), ensures that consumers in all regions of the Nation have access to and pay rates for telecommunications services that are reasonably comparable to those in urban areas.

Only eligible telecommunications carriers (ETCs) - whether rural or non-rural incumbent local exchange carriers (ILECs) or competitive carriers serving in the areas of ILECs - receive High Cost support.

The High Cost Program consists of five support components:

• High Cost Loop (HCL) support, which includes two sub-components - Safety Net Additive (SNA) support and Safety Valve Support (SVS)
  
  
• High Cost Model (HCM) support
  
  
• Interstate Access Support (IAS)
  
  
• Interstate Common Line Support (ICLS)
  
  
• Local Switching Support (LSS)

Long Term Support (LTS) was merged into ICLS in July 2004. Each of the High Cost components has its own requirements for certification and submission of line count and revenue data as required.

ILECs can be a combination of either rural or non-rural company, and "price cap" or "rate-of-return" company. These categories determine the type of High Cost support for which an ILEC is eligible. The table below provides an overview of which type of High Cost support is available to each category.

 

Type of Support	Rural or Non-Rural?	Price Cap or Rate-of Return Carrier?	Is it capped?	Subject to True-Up Process?	Subject to ILEC Disaggregation Plans?
High Cost Loop Support	Rural	Price Cap and Rate-of-Return	Yes	No	Yes
High Cost Model Support	Non-Rural Only	Mostly Price Cap	No	No	No. Data at wire center level.
Interstate Access Support	Mostly Non-Rural; few Rural	Price Cap Only	No	Yes. Quarterly reconciliation.	No. Data at UNE Zone level.
Interstate Common Line Support	Mostly Rural; few Non-Rural	Rate-of-Return Only	No	Yes	Yes
Local Switching Support	Rural Only	Mostly Rate-of-Return; few Price Cap	No	Yes	Yes
Safety Net Additive Support	Rural	Price Cap and Rate-of-Return	Yes	No	Yes
Safety Valve Support	Rural	Price Cap and Rate-of-Return	Yes	No	Yes

 

Rural or Non-Rural Carrier?

For purposes of High Cost support, a rural carrier is one that serves a relatively small number of telephone lines or a relatively small area. The definition of a "rural telephone company" can be found in section 153(37) of the Communications Act of 1934, as amended (47 U.S.C. § 153(37)), and provides as follows:

The term "rural telephone company" means a local exchange carrier operating entity to the extent such entity -

• provides common carrier service to any local exchange carrier study area that does not include either-
  
  1. any incorporated place of 10,000 inhabitants or more, or any part thereof, based on the most recently available population statistics of the Bureau of the Census; or
  2. any territory, incorporated or unincorporated, included in an urbanized area, as defined by the Bureau of the Census as of August 10, 1993;
• provides telephone exchange service, including exchange access, to fewer than 50,000 access lines;
• provides telephone exchange service to any local exchange carrier study area with fewer than 100,000 access lines; or
• has less than 15 percent of its access lines in communities of more than 50,000 on the date of enactment of the Telecommunications Act of 1996.

Any carrier that does not meet this definition is considered a non-rural carrier.

Price-Cap Carriers

A price-cap carrier is a carrier not subject to rate base/rate-of-return regulation. A price-cap carrier is only able (or is limited in its ability) to raise its rates on the basis of a formula defined by the Federal Communications Commission (FCC). The extent to which a carrier can raise rates depends on its growth in expenses and a productivity growth factor.

Rate-of-Return Carriers

A rate-of-return (ROR) carrier is a carrier that is allowed to recover its revenue requirement by setting rates on its various products and services so that it earns no more than the rate-of-return authorized by the FCC. FCC rules define the rate base (specified plant items) upon which a carrier is allowed to earn a return. ROR carriers must submit revenue data annually as well as line count data and certifications for various High Cost components.