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                                                           Before the
               Federal Communications Commission
                     Washington, DC  20554

In the Matter of                )
                                )       
Federal-State Joint Board on    )       CC Docket No.  96-45
Universal Service               )

                             Order

Adopted:  March 2, 2000                 Released: March 7, 2000

By the Commission:

1.     The Universal Service Administrative Company (USAC) has requested waivers of the
Commission's rules setting forth quarterly caps on the rural health care support mechanism and
the schools and libraries support mechanism.  In this Order, we grant USAC's request and waive
the quarterly cap on collections and disbursements under the rural health care support mechanism
for the first and second quarters of 2000.  We also waive the quarterly cap on disbursements
under the schools and libraries support mechanism for the second quarter of 2000.  These waivers
will ensure that lags between the collection and disbursement of funds in these support
mechanisms will not delay the disbursement of support to applicants in the first and second
quarters of 2000.  We emphasize, however, that these waivers do not affect the annual collection
and disbursement caps, which shall remain in effect for the rural health care support mechanism
and the schools and libraries support mechanism.
2.     The Rural Health Care Support Mechanism.  The Commission adopted a funding cap
of $12 million for the Year 2 funding cycle for its rural health care support mechanism, requiring
that no more than $3 million be collected or disbursed in each of the first two quarters of 2000. 
USAC estimates that approximately $8,250,839 will be needed to fund Year 2 applicants under
the rural health care support mechanism, an amount lower than the Year 2 annual funding cap. 
USAC projects, however, that $4,128,000 will need to be disbursed during the first quarter of
2000, and that $4,506,225 will need to be disbursed during the second quarter of 2000.  This is
due to the lag between collection of funds for Year 1 and Year 2 and their ultimate disbursement. 
Given that total Year 2 funding will be at or less than the annual cap and that disbursements have
lagged behind commitments, we waive section 54.623(a) of the Commission's rules to enable
USAC to collect funds and make disbursements in excess of $3 million for the rural health care
support mechanism in each of the first and second quarters of 2000.
3.     The Schools and Libraries Support Mechanism.  The Commission adopted an annual
funding cap of $2.25 billion for its schools and libraries universal service support mechanism. 
The Commission also required that no more than $562.5 million be collected or disbursed in each
of the first two quarters of 2000.  For Year 2 of the schools and libraries support mechanism,
USAC has not committed more than the $2.25 billion annual cap, and the actual annual funding
disbursed will be less than the cap.  USAC estimates, however, that more than $562.5 million
may need to be disbursed in the second quarter of 2000 due to the lag between the collection of
funds and their ultimate disbursement during Year 2.  Given that total funding will be at or
below the annual cap and that disbursements have lagged behind commitments for Year 2, we
waive section 54.507(a) of the Commission's rules to enable USAC to make disbursements in
excess of $562.5 million for the schools and libraries support mechanism in the second quarter of
2000.
4.     It is therefore ORDERED, pursuant to section 4(i) of the Communications Act of
1934, as amended, 47 U.S.C.  154(i), and section 1.3 of the Commission's rules, 47 C.F.R. 
1.3, that the Universal Service Administrative Company's request for waiver is GRANTED, and
that sections 54.623(a) and 54.507(a) of the Commission's rules, 47 C.F.R.  54.623(a) and
54.507(a), are WAIVED to the extent indicated herein.
                              FEDERAL COMMUNICATIONS COMMISSION



     Magalie Roman Salas
     Secretary