§ 54.1304   Calculation of safety net additive.

   (a) Safety net additive support. Only those local exchange carriers
   that qualified for safety net additive based on 2011 or prior year
   costs shall be eligible to receive safety net additive pursuant to
   paragraph (c) of this section. A local exchange carrier shall not
   receive safety net additive unless the carrier's realized total growth
   in Telecommunications Plant in Service (TPIS) was more than 14 percent
   in 2011 or earlier, pursuant to paragraph (c) of this section.

   (b) Calculation of safety net additive support for companies that
   qualified based on 2011 or prior year costs. Safety net additive
   support is equal to the amount of capped support calculated pursuant to
   this subpart M in the qualifying year minus the amount of support in
   the year prior to qualifying for support subtracted from the difference
   between the uncapped expense adjustment for the study area in the
   qualifying year minus the uncapped expense adjustment in the year prior
   to qualifying for support as shown in the following equation: Safety
   net additive support = (Uncapped support in the qualifying
   year−Uncapped support in the base year)−(Capped support in the
   qualifying year−Amount of support received in the base year).

   (c) Operation of safety net additive support for companies that
   qualified based on 2011 or prior year costs. (1) In any year in which
   the total carrier loop cost expense adjustment is limited by the
   provisions of § 54.1302, a rate-of-return incumbent local exchange
   carrier shall receive safety net additive support as calculated in
   paragraph (b) of this section, if in any study area, the rural
   incumbent local exchange carrier realizes growth in end of period TPIS,
   as prescribed in § 32.2001, on a per loop basis, of at least 14 percent
   more than the study area's TPIS per loop investment at the end of the
   prior period.

   (2) If paragraph (c)(1) of this section is met, the rural incumbent
   local exchange carrier must notify the Administrator; failure to
   properly notify the Administrator of eligibility shall result in
   disqualification of that study area for safety net additive, requiring
   the rural incumbent local exchange carrier to again meet the
   eligibility requirements in paragraph (c)(1) of this section for that
   study area in a subsequent period.

   (3) Upon completion of verification by the Administrator that the study
   area meets the stated criterion in paragraphs (a), (b), or (c) of this
   section, the Administrator shall:

   (i) Pay to any qualifying rural telephone company safety net additive
   support for the qualifying study area in accordance with the
   calculation set forth in paragraph (b) of this section; and

   (ii) Continue to pay safety net additive support in any of the four
   succeeding years in which the total carrier loop expense adjustment is
   limited by the provisions of § 54.1302. Safety net additive support in
   the succeeding four years shall be the lesser of:

   (A) The sum of capped support and the safety net additive support
   received in the qualifying year; or

   (B) The rural telephone company's uncapped support.

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