[Federal Register Volume 77, Number 128 (Tuesday, July 3, 2012)]
[Rules and Regulations]
[Pages 39435-39439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-16279]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket Nos. 10-90, 07-135, 05-337, 03-109; GN Docket No. 09-51; CC
Docket Nos. 01-92, 96-45; WT Docket No. 10-208; FCC 12-70]
Connect America Fund, A National Broadband Plan for Our Future,
Universal Service Reform--Mobility Fund
AGENCY: Federal Communications Commission.
ACTION: Final rule: limited forbearance.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) adopts a limited forbearance from requiring that the
service area of an eligible telecommunications carrier (ETC) conform to
the service area of any rural telephone company serving the same area
for the Mobility Fund Phase I auction 901. This forbearance applies
only with respect to conditional ETC designations for participating in
Auction 901.
DATES: Effective July 3, 2012.
FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,
Auctions and Spectrum Access Division: call Sayuri Rajapakse, Scott
Mackoul or Stephen Johnson at (202) 418-0660.
SUPPLEMENTARY INFORMATION: This is a summary of the CAF/ICC Second
Report and Order released on June 27, 2012. The CAF/ICC Second Report
and Order and related Commission documents may be purchased from the
Commission's duplicating contractor, Best Copy and Printing, Inc.
(BCPI), 445 12th Street SW., Room CY-B402, Washington, DC 20554,
telephone 202-488-5300, fax 202-488-5563, or you may contact BCPI at
its Web site: http://www.BCPIWEB.com. When ordering documents from
BCPI, please provide the appropriate FCC document number, for example,
FCC 12-70. The CAF/ICC Second Report and Order and related documents
also are available on the Internet at the Commission's Web site: http://wireless.fcc.gov or by using the search function for WT Docket No. 10-
208 on the Commission's Electronic Comment Filing System (ECFS) Web
page at http://www.fcc.gov/cgb/ecfs/.
I. Introduction
1. The Commission adopts a limited forbearance pursuant to section
10 of the Communications Act of 1934, as amended (the Act), 47 U.S.C.
160, from requiring that the service area of an eligible
telecommunications carrier (ETC) conform to the service area of any
rural telephone company serving the same area, pursuant to 47 U.S.C.
214(e)(5) and 47 CFR 54.207(b). In particular, this forbearance applies
only with respect to conditional ETC designations for participating in
the Mobility Fund Phase I auction, ETC designations conditioned on
receipt of Mobility Fund Phase I support. Such conditional ETC
designations, and thus this forbearance, are also limited to the
specific areas in which such an ETC becomes authorized to receive
Mobility Fund Phase I support.
2. The Commission concludes that forbearance in these limited
circumstances furthers the public interest, advancing the Act's and the
Commission's goals of promoting access to mobile service over current
and next generation wireless networks in areas currently without such
service by reducing barriers to participation in Phase I of the
Mobility Fund. The Commission finds that application of the service
area conformance requirements set forth in 47 U.S.C. 214(e)(5) and 47
CFR 54.207(b) in these limited circumstances is not necessary to ensure
that rates remain just and reasonable or to protect consumers. The
Commission emphasizes that the forbearance it is granting is limited to
petitioners seeking conditional designation as ETCs in areas eligible
for Mobility Fund Phase I support in order to participate in the
Mobility Fund Phase I auction and receive support. Parties petitioning
for designation as an ETC for this purpose must satisfy all of the
other statutory requirements applicable to ETCs under the Act. The
forbearance order does not apply with respect to petitions for
designation as an ETC for other purposes. In light of the requirement
that, with one exception for Tribal entities, an applicant for the
Mobility Fund Phase I auction, Auction 901, must be designated as an
ETC in every geographic area on which it wishes to bid by the time it
applies to participate and in light of the short time remaining before
the July 11, 2012 deadline for filing Auction 901 applications, the
Commission finds that case-by-case forbearance is not feasible and
grant blanket forbearance for this limited purpose.
II. Background
3. In the recent USF/ICC Transformation Order, 76 FR 73830,
November 29, 2011 and 76 FR 81562, December 28, 2011, the Commission
comprehensively reformed and modernized the universal service system to
ensure that robust, affordable voice and broadband service, both fixed
[[Page 39436]]
and mobile, are available to Americans throughout the nation. As part
of this comprehensive reform effort, the Commission adopted the goal of
ensuring universal availability of modern networks capable of providing
advanced mobile voice and broadband service. To further achievement of
that goal, the Commission created the Mobility Fund to ensure
availability of mobile broadband networks in areas where a private-
sector business case for those networks is lacking. In particular, the
Commission provided that in Phase I of the Mobility Fund, it would
award by reverse auction up to $300 million in one-time support to
immediately accelerate deployment of current and next generation
networks providing mobile voice and broadband services in areas not
presently covered by such networks.
4. Auction 901 is scheduled to take place on September 27, 2012,
and those wishing to participate must file an auction application by
July 11, 2012. The Wireless Telecommunications and the Wireline
Competition Bureaus (Bureaus) have identified, pursuant to the
Commission's criteria, particular census blocks that are eligible for
Mobility Fund Phase I support in Auction 901. In Auction 901,
applicants will bid for the amount of support they need to meet the
Mobility Fund Phase I service and other public interest obligations in
the eligible census blocks covered by the geographic area on which they
bid. Applicants, except for Tribally-owned and controlled entities,
must be designated as ETCs in the areas on which they wish to bid prior
to filing their auction applications. The designation may be
conditional subject to the receipt of Mobility Fund Phase I support.
The Commission currently has pending three petitions for conditional
designation as an ETC for purposes of participating in Auction 901.
5. Congress directed the Commission to establish policies to help
ensure that quality services are available at just, reasonable, and
affordable rates and access to advanced telecommunications and
information services are provided in all regions of the Nation. The
Commission's Mobility Fund Phase I will help achieve this goal by
providing support for the expansion of current and next generation
wireless networks in areas currently unserved by such networks. 47
U.S.C. 254(e) provides that only an entity designated as an eligible
telecommunications carrier shall be eligible for universal service
high-cost and low-income support. To become an ETC, a carrier must
offer and advertise the services supported by the federal universal
service support mechanisms throughout its designated service area.
6. The Act and the Commission's rules define the term service area
and how it is established for each ETC. An ETC's service area is a
geographic area within which an ETC has universal service obligations
and may receive universal service support. A carrier seeking to become
an ETC typically requests designation in a specific service area, but
it is the commission designating that carrier that establishes the
ETC's service area. When a competitive carrier seeks to serve an area
already served by a rural telephone company, 47 U.S.C. 214(e)(5)
requires that the competitive ETC's service area must conform to the
rural telephone company's service area. Accordingly, if a commission
wishes to designate a competitive ETC for an area that differs from a
rural telephone company's existing service area, that rural service
area must first be redefined under the process set forth under the Act.
7. The Act defines the service area of each rural telephone
company's to be that company's study area unless and until the
Commission and the States, after taking into account recommendations of
a Federal-State Joint Board establish a different definition of service
area for such company. The Commission has interpreted this language to
mean that neither the Commission nor the states may act alone to alter
the definition of service areas served by rural carriers. In reviewing
a potential redefinition of a rural service area in evaluating a
request for ETC designation, the Commission and the states have
traditionally taken into account the three factors recommended by the
Federal-State Joint Board on Universal Service: Cream skimming, the
Act's special treatment of rural telephone companies, and the
administrative burdens of redefinition. The Commission's rules set
forth the procedures for considering redefinition petitions and allow
either the state commission or the Commission to propose to redefine a
rural telephone company's service area. A proposed redefinition,
however, does not take effect until the Commission and the appropriate
state commission agrees upon a new definition.
8. In the Mobility Fund NPRM, 75 FR 67060, November 1, 2010, the
Commission sought comment generally on the ETC designation requirements
of 47 U.S.C. 214(e) and on how best to interpret the provisions of that
section so as to achieve the objectives of the Mobility Fund. A
commenter suggested that the Commission should forbear altogether from
the requirements of 47 U.S.C. 214(e) for purposes of participating in
the Mobility Fund. The same commenter also noted that the service area
conformance requirement of 47 U.S.C. 214(e)(5) could create uncertainty
for potential Mobility Fund applicants and discourage participation,
and suggested that the Commission take steps to prevent this from
happening. Another commenter suggested that the Commission streamline
the process of ETC designation to facilitate participation in the
Mobility Fund, making the ETC designation process part of the
application for Mobility Fund support, such that designation would
occur upon award of support by the Commission. That commenter filed a
petition for reconsideration of the USF/ICC Transformation Order that
proposed, for those seeking Mobility Fund Phase I support, blanket
forbearance from the requirement that a competitive ETC's service area
conform to any underlying rural telephone carrier's study area.
III. Discussion
9. The Act allows the Commission to forbear from applying any
requirement of the Act or of its regulations to a telecommunications
carrier if the Commission determines that: (1) Enforcement of the
requirement is not necessary to ensure that the charges, practices,
classifications, or regulations by, for, or in connection with that
telecommunications carrier are just and reasonable and are not unjustly
or unreasonably discriminatory; (2) enforcement of that requirement is
not necessary for the protection of consumers; and (3) forbearance from
applying that requirement is consistent with the public interest.
10. The Commission considers whether it should forbear from
applying 47 U.S.C. 214(e)(5) service area conformance requirement to
parties petitioning for ETC conditional designation in areas eligible
for Mobility Fund Phase I support in order to participate in the
Mobility Fund Phase I auction and receive such support. The Commission
concludes that forbearance is appropriate and in the public interest
under these limited circumstances. Accordingly, for the limited purpose
of conditional designation as an ETC in areas eligible for Mobility
Fund Phase I support in order to participate in the Mobility Fund Phase
I auction, the Commission forbears from applying 47 U.S.C. 214(e)(5)
and 47 CFR 54.207(b) insofar as those sections require that the service
area of such an ETC conform to the service area of any rural telephone
company. The Commission notes that forbearing from the conformance
[[Page 39437]]
requirements eliminates the need for redefinition of any rural
telephone company service areas in the context of Mobility Fund Phase
I. The Commission emphasizes that this decision does not change the
requirements that apply if a party petitions to be an ETC for other
purposes in part of a service area served by a rural telephone company.
11. The Commission concludes that blanket forbearance from the
service area conformance requirement is warranted in these limited
circumstances. The Mobility Fund Phase I rules require that most
applicants must be designated as ETCs in every geographic area on which
they wish to bid for support, prior to filing an Auction 901
application. Those rules also provide that a conditional designation is
sufficient to meet the requirement, i.e., a designation effective only
for the areas, if any, in which the ETC becomes authorized to receive
Mobility Fund Phase I support. The Commission finds that case-by-case
forbearance is not feasible in the short time available before the
filing deadline.
12. The Commission takes this action after considering the record
it received in response to the Mobility Fund NPRM, where the Commission
sought comment on how to assure that the provisions of 47 U.S.C. 214(e)
would align with the objectives of this new mechanism for providing
high-cost universal service support. The record identified the
possibility that the service area provisions of 47 U.S.C. 214(e),
including the service area conformance requirement of that section
could discourage participation in the Mobility Fund Phase I auction. By
granting blanket forbearance of the conformance requirement for the
limited purpose of petitions for conditional designation to participate
in the auction, the Commission seeks to prevent that requirement from
creating an obstacle to participation by any carrier considering it.
Removing such disincentives to participation may increase competition
in the auction resulting in lower bids for support and enabling greater
coverage within the Mobility Fund Phase I budget. The Commission notes
that by granting forbearance in these limited circumstances, it is
allowing new ETCs, and those existing ETCs that wish to conditionally
expand their service areas for Auction 901, to match their specific new
and additional service areas to the geographic area for which they will
incur obligations under Mobility Fund Phase I. The Commission does not
address relinquishment or redefinition with respect to the service
areas of existing ETCs with respect to new targeted support mechanisms
other than Mobility Fund Phase I. To the extent that an existing ETC
seeks Mobility Fund Phase I support for areas within its existing
service area, the new obligations will apply only to the portion of
their existing service area for which they win such support and will
not have any impact on pre-existing obligations and support mechanisms
with respect to the existing service area.
13. Just and Reasonable. 47 U.S.C. 10(a)(1) requires that the
Commission consider whether enforcement of the provisions from which
forbearance is sought is necessary to ensure that the charges,
practices, classifications, or regulations are just and reasonable and
not unjustly or unreasonably discriminatory. The Commission concludes
that compliance with the service area conformance requirement of 47
U.S.C. 214(e)(5) and 47 CFR 54.207(b) is not necessary to ensure that
the charges, practices, and classifications of carriers conditionally
designated as ETCs in areas eligible for Mobility Fund Phase I support
for purposes of participation in Mobility Fund Phase I auction and
receiving such support are just and reasonable and not unjustly or
unreasonably discriminatory. The Commission finds that the three
factors traditionally taken into account by the Commission and the
states when reviewing a potential redefinition of a rural service area
pursuant to 47 U.S.C. 214(e)(5) no longer apply in the context of
conditionally designating ETCs in areas eligible for Mobility Fund
Phase I support for purposes of participation in the Mobility Fund
Phase I auction. Forbearance from the service area conformance
requirement would not prevent the Commission from enforcing 47 U.S.C.
201 or 202, which require all carriers to charge just, reasonable, and
non-discriminatory rates. Moreover, all ETCs--whether rural ETCs or
carriers designated as ETCs in areas eligible for Mobility Fund Phase I
support for purposes of participation in Mobility Fund Phase I auction
and receiving such support--will continue to be subject to the
requirements of the Act and of the Commission's rules that consumers
have access to reasonably comparable services at reasonably comparable
rates. In fact, the expansion of current and next generation wireless
networks supported by Mobility Fund Phase I will expand the choice of
telecommunications services for consumers in the relevant area. The
resulting competition is likely to help ensure just, reasonable, and
nondiscriminatory offerings of services. For these reasons, the
Commission finds that the first prong of 47 U.S.C. 10(a) is met.
14. Consumer Protection. 47 U.S.C. 10(a)(2) requires that the
Commission consider whether applying the service area conformance
requirement to a mobile wireless voice service provider that seeks a
conditional ETC designation in areas eligible for Mobility Fund Phase I
support is necessary for the protection of consumers. Forbearance from
the conformance requirement in these limited circumstances will not
harm consumers currently served by the rural telephone companies in the
relevant service areas. To the contrary, these consumers will benefit
from the use of Mobility Fund Phase I support to expand current and
next generation mobile services. Indeed, as the Commission has noted,
the national goal of ubiquitous mobile broadband depends in part on
offering targeted and efficient support for mobile services through the
Mobility Fund. Finally, every ETC, including any party receiving
Mobility Fund Phase I support, must certify that it will satisfy
applicable consumer protection and service quality standards in its
service area. For these reasons, the Commission finds that the second
prong of 47 U.S.C. 10(a) is met.
15. Public Interest. 47 U.S.C. 10(a)(3) requires that the
Commission consider whether applying the service area conformance
requirement to a facilities-based mobile wireless carrier that seeks
conditional ETC designation in areas eligible for Mobility Fund Phase I
support in order to participate in Mobility Fund Phase I and receive
such support is in the public interest. Absent forbearance, the
Commission finds that parties seeking support may be required to take
on unsupported ETC obligations in portions of rural carriers' study
areas--areas that may not be eligible for support or for which they may
not win support--and that this is likely to discourage participation in
Mobility Fund Phase I. Geographic eligibility for Mobility Fund Phase I
support is based on whether specific census blocks are presently served
by current or next generation wireless networks, a definition that is
unrelated to the boundaries of rural carrier service areas. Moreover,
the Commission's current rules to redefine service areas require
concurring decisions by both the Commission and the related state
commission, a process not likely to be completed before parties seeking
Mobility Fund Phase I support will have to apply to participate in
Auction 901. Hence, the Commission finds that forbearing from the
conformance requirement will encourage
[[Page 39438]]
participation by assuring that obligations of new ETCs will not extend
to portions of rural service areas for which a new ETC may not receive
support. By providing this assurance, the Commission reduces the cost
of auction participation, encourage lower bids, and improve auction
outcomes.
16. Enabling new ETC service areas to be defined in a more targeted
manner for Mobility Fund Phase I is consistent with the Commission's
approach of targeting support to areas with a specific need for the
support, helps preserve those efficiencies, and thus serves the public
interest. As set out in the USF/ICC Transformation Order, Mobility Fund
Phase I support will be determined by a competitive bidding process in
which ETCs will bid for the support they need to serve a specific area,
rather than any larger area such as an underlying rural telephone
company study area. This targeted and efficient provision of support is
critical to furthering the public interest goal of ubiquitous mobile
service in a fiscally responsible manner. To require Mobility Fund
Phase I support recipients to serve a wider area runs counter to the
Commission's recent and ongoing efforts to serve the public interest by
focusing USF resources on defined areas of need.
17. The public interest benefits go beyond efficiently expanding
current and next generation wireless networks to expanding access to
such services by consumers. An ETC with a conditional designation will
have the obligations of any other ETC receiving Mobility Fund Phase I
support for the areas in which the condition is satisfied, including an
obligation to make available Lifeline service to eligible for low
income consumers. Thus, an ETC expanding advanced wireless networks to
new areas as part of the Mobility Fund Phase I also will be making
their networks available to low-income consumers who may qualify to
receive reduced charges for these next generation services.
18. In addition, the Commission finds that in these limited
circumstances requiring conformance is not essential to protect the
ability of rural telephone companies to continue to provide service.
Past concerns that an ETC serving only a relatively low cost portion of
a rural carrier's service area might cream skim by receiving per line
support based on the rural carrier's costs of serving the entire area
do not apply to Mobility Fund Phase I support. Unlike the legacy
identical support rule, under which a competitive ETC received the same
per-line support as an incumbent calculated based on the incumbent's
cost of serving its entire service area, the amount of Mobility Fund
Phase I support is not linked to the support received by an overlapping
rural carrier but is determined by the results of competitive bidding
for support. Consequently, cream skimming concerns that arose under the
identical support rule are not relevant in considering the conditional
designation of an ETC for purposes of seeking Mobility Fund Phase I
support. Moreover, the Commission notes that it decided in the USF/ICC
Transformation Order that universal service would support both mobile
and fixed services in a given area. Consequently, the Commission sees
no inherent conflict between a mobile provider receiving support to
offer previously unavailable service in a portion of a rural telephone
company's study area and the rural telephone company continuing to
provide its pre-existing service.
19. For similar reasons, the Commission concludes that forbearance
in these circumstances will not harm competitive market conditions. The
Commission expects forbearance to enhance competition by introducing
new service providers and not to eliminate any existing market
participants or to introduce concerns about cream skimming.
20. The Commission further notes that forbearance from the
conformance requirement and redefinition process for these limited
purposes should not affect rural carriers' abilities to serve the
entire rural service territories. Moreover, the Act contains safeguards
to address any such potential concerns. The Act already requires
designating commissions to affirmatively determine that designating a
carrier as an ETC within a rural service area is in the public
interest, and this is not affected by this grant of forbearance.
21. Finally, forbearance in these limited circumstances preserves
the role of states in ETC designation. State commissions are still
required to consider the public interest, convenience and necessity of
designating an ETC in a rural area already served by a rural telephone
company. The Commission action does not disturb the roles of state
commissions and of the Commission in the ETC designation process or in
the redefinition process in other circumstances when redefinition is
required.
IV. Procedural Matters
A. Paperwork Reduction Act
22. The CAF/ICC Second Report and Order does not contain new or
modified information collection(s) subject to the Paperwork Reduction
Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does
not contain any new or modified information collection burden for small
business concerns with fewer than 25 employees, pursuant to the Small
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4).
B. Final Regulatory Flexibility Act Certification
23. The Regulatory Flexibility Act (RFA) requires that agencies
prepare a regulatory flexibility analysis for notice-and-comment
rulemaking proceedings, unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities. The RFA generally defines small entity as having the same
meaning as the terms small business, small organization, and small
governmental jurisdiction. In addition, the term small business has the
same meaning as the term small business concern under the Small
Business Act. A small business concern is one which: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
Small Business Administration (SBA).
24. The Commission certifies that forbearance decision in the CAF/
ICC Second Report and Order will not have a significant economic impact
on a substantial number of small entities. In the CAF/ICC Second Report
and Order, the Commission eases the regulatory compliance burden on
ETCs by forbearing from the requirement that the service area of an ETC
conform to the service area of any rural telephone company serving the
same area. The CAF/ICC Second Report and Order does not modify any of
the Commission's reporting requirements. The Commission will send a
copy of the CAF/ICC Second Report and Order, including the
certification, to the Chief Counsel for Advocacy of the Small Business
Administration.
C. Congressional Review Act
25. The Commission will send a copy of the CAF/ICC Second Report
and Order to Congress and the Government Accountability Office pursuant
to the Congressional Review Act.
D. Effective Date
26. The Commission concludes that good cause exists to make the
forbearance adopted in the CAF/ICC Second Report and Order effective
immediately upon publication in the Federal Register pursuant to 47
U.S.C. 553(d)(3) of the Administrative Procedure Act and 47 CFR
1.103(a) and
[[Page 39439]]
1.427(b). The grant of forbearance applies only to those seeking
conditional ETC designation for areas eligible for Mobility Fund Phase
I support in order to participate in the Mobility Fund Phase I auction,
and, given the short time remaining before the July 11, 2012, deadline
for filing an auction application, may promote wider participation and
generate more competitive bids. In turn, this increases the chances
that the Mobility Fund Phase I budget will provide greater benefits in
the form of expanded coverage of mobile voice and broadband service.
The Commission finds there is good cause to make the changes it
implements with the CAF/ICC Second Report and Order effective upon
Federal Register publication, without the usual 30-day period.
V. Ordering Clause
27. Accordingly, it is ordered that, pursuant to the authority
contained in 47 U.S.C. 4(i), 4(j), 10, 214, and 254 as well as 47
U.S.C. 154(i), 154(j), 160, 214, 254, the Commission forbears from
applying the conformance requirement of 47 U.S.C. 214(e)(5) and 47 CFR
54.207(b) to petitions for conditional designation as an eligible
telecommunications carrier in areas eligible for Mobility Fund Phase I
support in order to participate in the Mobility Fund Phase I auction
and receive such support to the extent discussed herein.
28. It is further ordered that, pursuant to 5 U.S.C. 553(d) and 47
CFR 1.103(a) and 1.427(b) the order shall be effective upon publication
in the Federal Register.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2012-16279 Filed 7-2-12; 8:45 am]
BILLING CODE 6712-01-P