[Federal Register Volume 76, Number 176 (Monday, September 12, 2011)]
[Rules and Regulations]
[Pages 56091-56094]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23152]

Rules and Regulations
                                                Federal Register

This section of the FEDERAL REGISTER contains regulatory documents 
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Federal Register / Vol. 76, No. 176 / Monday, September 12, 2011 / 
Rules and Regulations

[[Page 56091]]


Rural Utilities Service

7 CFR Part 1735

RIN 0572-AC24

Expansion of 911 Access; Telecommunications Loan Program

AGENCY: Rural Utilities Service, USDA.

ACTION: Interim rule with request for comments.


SUMMARY: The Rural Utilities Service (RUS) is amending its regulations 
to implement the Expansion of 911 as authorized by section 6107 of the 
Food, Conservation, and Energy Act of 2008 (2008 Farm Bill). This 
amendment will codify the Secretary's authority to make loans in five 
areas of eligibility to expand or improve 911 access and integrated 
emergency communications systems in rural areas for the 
Telecommunications Loan Program.

DATES: This rule is effective on September 12, 2011. Comments must be 
submitted on or before November 14, 2011.

ADDRESSES: Submit comments by either of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow instructions for submitting comments.
     Postal Mail/Commercial Delivery: Please send your comment 
addressed to Michele Brooks, Director, Program Development and 
Regulatory Analysis, USDA--Rural Utilities Service, 1400 Independence 
Avenue, STOP 1522, Room 5159, Washington, DC 20250-1522.
    Other Information: Additional information about the Agency and its 
programs is available on the Internet at http://www.rurdev.usda.gov/index.html.

Administrator, Telecommunications Program, USDA--Rural Utilities 
Service, 1400 Independence Avenue, SW., STOP 1590, Room 5151-S, 
Washington, DC 20250-1590. Telephone number: (202) 720-9554, Facsimile: 
(202) 720-0810.


Executive Order 12866

    This rule has been determined to be not significant for the 
purposes of Executive Order 12866, and therefore, has not been reviewed 
by the Office of Management and Budget.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance (CFDA) number assigned 
to this program is 10.851, Rural Telephone Loans and Loan Guarantees. 
The Catalog is available on the Internet at http://www.cfda.gov.

Executive Order 12372

    This rule is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require a consultation with 
State and local officials. See the final rule related notice entitled, 
``Department Programs and Activities Excluded from Executive Order 
12372'' (50 FR 47034).

Information Collection and Recordkeeping Requirements

    The information collection and recordkeeping requirements contained 
in this rule are approved under OMB control number 0572-0079. This rule 
contains no additional information collection or recordkeeping 
requirements under OMB control number 0572-0079 that would require 
approval under the Paperwork Reduction Act of 1955 (44 U.S.C. chapter 

National Environmental Policy Act Certification

    The Agency has determined that this rule will not significantly 
affect the quality of the human environment as defined by the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Therefore, 
this action does not require an environmental impact statement or 

Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA) generally 
requires an agency to prepare a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements under the 
Administrative Procedure Act or any other statute unless the Agency 
certifies that the rule will not have an economically significant 
impact on a substantial number of small entities. Small entities 
include small businesses, small organizations, and small governmental 
    In compliance with the RFA, the Agency has determined that this 
action, while mostly affecting small entities, will not have a 
significant economic impact on a substantial number of these small 
entities. The Agency made this determination based on the fact that 
this regulation only impacts those who choose to participate in the 
program. Small entity applicants will not be affected to a greater 
extent than large entity applicants.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The Agency has determined that this rule meets the 
applicable standards provided in Sec.  3 of the Executive Order. In 
addition, all state and local laws and regulations that are in conflict 
with this rule will be preempted, no retroactive effort will be given 
to this rule, and, in accordance with Sec.  212(e) of the Department of 
Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)), 
administrative appeal procedures, if any, must be exhausted before an 
action against the Department or its agencies may be initiated.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and Tribal governments for the private sector. Thus, this 
rule is not subject to the requirements of Sec. Sec.  202 and 205 of 
the Unfunded Mandates Reform Act of 1995.

Executive Order 13132, Federalism

    The policies contained in this rule do not have any substantial 
direct effect on states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on state and local 
governments. Therefore, consultation with the states is not required.

[[Page 56092]]

Executive Order 13175, Consultation and Coordination With Indian Tribal 

    Over the last year, the Agency has conducted extensive Tribal 
consultations related to the implementation of the Substantially 
Underserved Trust Area (SUTA) provisions of the 2008 Farm Bill. During 
those consultations all RUS programs were discussed. Expanded emergency 
communications capabilities were among the issues brought up in the 
consultations. A specific regulation on SUTA is being prepared. Tribal 
entities are fully eligible to apply for financing under this provision 
and nothing under this regulation would affect SUTA eligibility.
    The policies contained in this rule do not impose substantial 
unreimbursed compliance costs on Indian Tribal governments or have 
Tribal implications that preempt Tribal law.

E-Government Act Compliance

    The Agency is committed to the E-Government Act, which requires 
Government agencies in general to provide the public the option of 
submitting information or transacting business electronically to the 
maximum extent possible.

Discussion of Interim Rule

    This interim rule codifies section 6107 of the 2008 Farm Bill. 
Section 6107 amended the Rural Electrification Act of 1936 (7 U.S.C. 
940e) to allow for the financing of facilities to expand emergency 911 
access in rural areas. The statutory language is very prescriptive, 
defining eligible entities, financing purposes, and loan terms and 
security requirements. As such, the amendments to 7 CFR part 1735 
simply incorporate those statutory requirements within the regulatory 
framework prescribing requirements for the telecommunications loan 
programs. Therefore, it is not necessary to issue a proposed rule since 
the codification represents a strict implementation of the statutory 


A. Introduction

    The Agency improves the quality of life in rural America by 
providing investment capital for deployment of rural telecommunications 
infrastructure. Financial assistance is provided to rural utilities; 
municipalities; commercial corporations; limited liability companies; 
public utility districts; Indian Tribes; and cooperative, nonprofit, 
limited-dividend, or mutual associations. In order to achieve the goal 
of increasing economic opportunity in rural America, the Agency 
finances infrastructure that enables access to a seamless, nationwide 
telecommunications network. With access to the same advanced 
telecommunications networks as its urban counterparts, especially 
broadband networks designed to accommodate distance learning, telework, 
and telemedicine, rural America will eventually see improving 
educational opportunities, health care, economies, safety and security, 
and ultimately higher employment. The Agency shares the assessment of 
Congress, State and local officials, industry representatives, and 
rural residents that broadband service is a critical component to the 
future of rural America and modern emergency communications 
capabilities are critical to the safety and security of all Americans. 
The Agency is committed to ensuring that rural America will have access 
to affordable, reliable, telecommunications and broadband services and 
to provide a healthy, safe, and prosperous place to live and work.

B. Regulatory History

    Following the September 11, 2001, attacks on the United States, 
significant Congressional attention was placed on weaknesses in the 
nation's emergency communications capabilities. The ability of rural 
communities, carriers and emergency responders to keep up with changing 
communications technologies was and continues to be a concern of 
emergency response professionals. Interoperability, which is the 
ability of emergency responders from various agencies and jurisdictions 
to communicate with each other, is also a pressing national need.
    In 2002, the Congress gave the RUS statutory authority to ``to 
expand or improve 911 access and integrated emergency communications 
systems in rural areas'' in section 315 of the RE Act (6102 of the 2002 
Farm Security and Rural Investment Act of 2002). No regulations were 
ever proposed to implement that section.
    In 2008, the Congress re-authorized section 315 of the RE Act and 
added language to further define eligible loan purposes. It also 
clarified that projects could be funded from appropriations made to the 
RUS telecommunications program.
    In 2011, the President launched a major initiative to use wireless 
4G technology to create a nation-wide interoperable emergency 
communications network. The plan contemplates using dual-use 4G 
wireless technologies in rural areas to address public safety and 
private sector communications needs.
    Rural areas face significant challenges in deploying emergency 
communications systems. The 911 Program Office housed within the 
National Transportation Safety Administration specifically noted that 
``(r)ural and Tribal 911 centers face special challenges. They 
typically serve areas that are large geographically but less-densely 
populated than urban areas. Because it may take first responders longer 
to reach the scene of an emergency, call-takers in public safety 
answering points (PSAPs) serving rural areas may be required to stay on 
the phone longer with callers or provide more extensive emergency 
instruction to callers until help arrives. And in medical emergencies, 
hospitals are often farther away which results in extended transport 
times, making the ambulance unavailable for other calls in its response 
area in areas that may have very limited coverage. The responder 
resources are typically limited in rural areas which can be quickly 
overwhelmed in disasters or large-scale incidents. The program office 
went on to observe that ``supporting rural PSAPs is vitally important, 
particularly because it may take longer for help to arrive in rural 
areas, and the call-taker may make an even bigger difference in the 
outcome of an emergency situation.'' (see http://www.911.gov/911-issues/challenges.html )
    The sixty-minute period immediately following a traumatic injury, 
like an injury resulting from a car crash is known as the ``golden 
hour.'' The risks of death or permanent injury increase dramatically if 
medical attention is not given within that first hour. In rural 
America, distance and sparse population work against the quick 
discovery and treatment of injuries resulting from an individual or 
mass emergency. In rural areas the ability to reach a person in 
distress can be the difference between life and death or recovery and 
    Congress twice enacted section 315 to give the RUS flexible 
financial tools to help rural communities, service providers and 
governmental entities address their emergency communications needs. By 
giving clear loan authority to the agency, RUS would have the tools to: 
(a) Leverage public and private resources to speed the rural deployment 
of a dual-use public safety/commercial wireless network; (b) address 
homeland security communications needs along America's rural 
international borders; (c) finance enhanced 911 capabilities for 
carriers and communities to precisely locate a

[[Page 56093]]

rural wireless call to 911; and (d) to finance next-generation 911 
upgrades, which would allow citizens to contact 911 via text message or 
send to emergency responders cell phone photos or short videos of a 
crime scene or accident location. The E911 location accuracy 
requirements pose unique challenges for rural wireless carriers. The 
new authority would give the Agency clear authority to finance wireless 
upgrades which relate to public safety and security, even if it does 
not finance the entire wireless communications systems.
    Without this authority, RUS would be very limited in its ability to 
make financing available to address specific rural emergency 
communications needs. Without this authority, the RUS 
telecommunications statute would generally prohibit the Agency from 
financing municipal investments.
    As a loan program which must meet the rigorous financial and 
engineering feasibility requirements, the Agency expects no impact on 
its subsidy rate.
    RUS has conducted extensive Tribal consultations in 2010 and 2011 
related to implementation of new authorities for substantially 
underserved trust areas. Through those consultations, the Agency had 
discussions with Tribal leaders on the entire portfolio of RUS 
programs. This authority could be useful in addressing some of the 
emergency communications needs raised by Tribal leaders in some of 
those discussions. Tribal areas are among the regions of the United 
States with the least connectivity to 911 and other emergency 
communications systems.
    The regulation would simply codify the authority contained in 
section 315 of the RE Act.

C. Rule Changes

    The amendment to 7 CFR Part 1735 implements section 315 of the 
Rural Electrification Act of 1936 (RE Act) as provided in section 6107 
of the Food, Conservation, and Energy Act of 2008 by clarifying that 
the expansion of 911 access & integrated interoperable emergency 
communications systems are eligible purposes of the RE Act.
    Section 6107 of the Food, Conservation, and Energy Act of 2008 
added section 315 of RE Act to clearly authorize the RUS to make loans 
for the following purposes:
    (1) 911 access;
    (2) Integrated interoperable emergency communications, including 
multiuse networks that provide commercial or transportation information 
services in addition to emergency communications services;
    (3) Homeland security communications;
    (4) Transportation safety communications; or
    (5) Location technologies used outside an urbanized area.
    The provision also clarified that the Agency could consider State 
or local 911 fees to be security for a loan under this section and that 
loans may be made in certain circumstances to an emergency 
communication equipment provider to accomplish the purposes of this 
section where a State or municipality may be prohibited from incurring 

List of Subjects in 7 CFR Part 1735

    Loan programs--communications, Reporting and recordkeeping 
requirements, Rural areas, Telephone.

    For reasons set out in the preamble, Chapter XVII, Title 7 of the 
Code of Federal Regulation is amended as follows:


1. The authority citation for part 1735 continues to read as follow:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart B--Loan Purposes and Basic Policies

2. Amend Sec.  1735.10 by revising paragraph (a) and adding paragraph 
(g) to read as follows:

Sec.  1735.10  General.

    (a) Loans made or guaranteed by the Administrator of RUS will be 
made in conformance with the Rural Electrification Act of 1936 (RE 
Act), as amended (7 U.S.C. 901 et seq.), and 7 CFR chapter XVII. RUS 
provides borrowers with specialized and technical accounting, 
engineering, and other managerial assistance in the construction and 
operation of their facilities when necessary to aid in the development 
of rural telephone service and to protect loan security. The Rural 
Utilities Service (RUS) makes loans to:
    (1) Furnish and improve telephone service in rural areas; and
    (2) To finance facilities and equipment which expand, improve or 
    (i) 911 access;
    (ii) Integrated interoperable emergency communications, including 
multiuse networks that provide commercial or transportation information 
services in addition to emergency communications services;
    (iii) Homeland security communications;
    (iv) Transportation safety communications; or
    (v) Location technologies used outside an urbanized area.
* * * * *
    (g) For the purpose of paragraph (a)(2) of this section, rural 
areas means any area, as confirmed by the latest decennial census of 
the Bureau of the Census, which is not located within:
    (1) A city, town, or incorporated area that has a population of 
greater than 20,000 inhabitants; or
    (2) An urbanized area contiguous and adjacent to a city or town 
that has a population of greater than 50,000 inhabitants, for the 
purpose of the definition of rural areas in this section, an urbanized 
area means a densely populated territory as defined in the latest 
decennial census of the U.S. Census Bureau.

3. Amend Sec.  1735.12 by adding paragraph (g) to read as follows:

Sec.  1735.12  Nonduplication.

* * * * *
    (g) RUS shall consider the following criteria for loans made for 
the purposes described in Sec.  1735.10(a)(2):
    (1) In making a preliminary assessment and a credit decision, the 
RUS will take into consideration the extent to which the emergency 
communications capability or emergency communications benefits already 
exist in the affected area and the need expressed by the proposed user 
of the emergency communications technology.
    (2) The RUS will not consider an application to finance an upgrade 
of 911 capabilities or other emergency communications capability by 
different providers serving the same geographic area to be 
automatically duplicative. For example, RUS will generally not consider 
an application from two competing wireless carriers to upgrade their 
E911 capabilities in overlapping geographic territories to be 
duplicative, however the carrier's competitive situation will be a 
relevant consideration in evaluating the ability of a service provider 
to repay their loan.
    (3) Duplication considerations will be reviewed on the basis of the 
emergency communications benefit; the Agency encourages applicants to 
fully embrace interoperability to maximize the impact of RUS financed 
investments. In the case of dual or multi-use technologies, the extent 
to which the proposed non-emergency communications benefits are 
available from other providers within the proposed service area will be

[[Page 56094]]

considered in determining loan feasibility.

4. Amend Sec.  1735.14 by adding paragraph (a)(4) to read as follows:

Sec.  1735.14  Borrower eligibility.

    (a) * * *
    (4) For purposes of Sec.  1735.10(a)(2):
    (i) Any entity eligible to borrow from the RUS;
    (ii) State or local governments;
    (iii) Indian Tribes (as defined in Sec.  4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b); or
    (iv) An emergency communications equipment provider that in the 
sole discretion of RUS offers adequate security for a loan where the 
State or local government that has jurisdiction over the proposed 
project is prohibited by law from acquiring debt.
* * * * *

5. Amend Sec.  1735.22 by redesignating paragraphs (c) through (i) as 
paragraphs (d) through (j), and adding new paragraph (c) to read as 

Sec.  1735.22  Loan security.

* * * * *
    (c) The RUS will consider Government-imposed fees related to 
emergency communications (including State or local 911 fees) which are 
pledged to the repayment of a loan as security.
* * * * *

    Dated: August 26, 2011.
Jessica Zufolo,
Acting Administrator, Rural Utilities Service.
[FR Doc. 2011-23152 Filed 9-9-11; 8:45 am]