[Federal Register Volume 78, Number 89 (Wednesday, May 8, 2013)]
[Rules and Regulations]
[Pages 26705-26708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10851]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket Nos. 09-197; 11-42; FCC 13-44]
Telecommunications Carriers Eligible for Support; Lifeline and
Link Up Reform and Several Petitions for Forbearance
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this order, the Federal Communications Commission
(Commission) grants limited forbearance from the requirement of the
Commission's rules that the service area of an eligible
telecommunications carrier (ETC) conform to the service area of any
rural telephone company serving the same area. In particular, this
grant of forbearance applies to any ETC that has been designated by a
state or the Commission, as well as pending and future requests by
telecommunications carriers that seek limited designation, as an ETC to
participate only in the Lifeline program (Lifeline-only ETC). The
Commission concludes that forbearance furthers the Act's and
Commission's goals of ensuring the availability of voice service to
low-income consumers.
DATES: Effective June 7, 2013, except paragraph 19 which is effective
upon release of the Memorandum Opinion and Order.
FOR FURTHER INFORMATION CONTACT: Alexander Minard, Wireline Competition
Bureau, (202) 418-0428 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Memorandum Opinion and Order (Order) in WC Docket Nos. 09-197;11-42;
FCC 13-44, released on April 15, 2013. The full text of this document
is available for public inspection during regular business hours in the
FCC Reference Center, Room CY-A257, 445 12th Street SW., Washington, DC
20554. Or at the following Internet address:
[[Page 26706]]
http://transition.fcc.gov/Daily_Releases/Daily_Business/2013/db0415/FCC-13-44A1.pdf.
I. Introduction
1. In this Order, pursuant to section 10 of the Communications Act
of 1934, as amended (the Act), we grant limited forbearance from the
requirement of section 214(e)(5) of the Act and Sec. 54.207(b) of the
Commission's rules that the service area of an eligible
telecommunications carrier (ETC) conform to the service area of any
rural telephone company serving the same area. In particular, this
grant of forbearance applies to any ETC that has been designated by a
state or the Commission, as well as pending and future requests by
telecommunications carriers that seek limited designation, as an ETC to
participate only in the Lifeline program (Lifeline-only ETC).
2. We conclude that forbearance furthers the Act's and Commission's
goals of ensuring the availability of voice service to low-income
consumers. Moreover, we find that application of the conformance
requirements set forth in section 214(e)(5) of the Act and Sec.
54.207(b) of the Commission's rules is not necessary to ensure that
rates remain just and reasonable or to protect consumers. We emphasize
that the forbearance granted herein is limited to a carrier's
designation as a Lifeline-only ETC. If any carrier petitions to become
an ETC to receive high-cost support, this forbearance order is
inapplicable and such carrier must satisfy all of the statutory
requirements applicable to ETCs under the Act.
II. Discussion
3. We conclude that forbearing from the conformance requirement of
section 214(e)(5) of the Act and Sec. 54.207(b) of the Commission's
rules is appropriate and in the public interest for carriers seeking
designation, or already designated, as Lifeline-only ETCs. For the
reasons explained below, we find that all three prongs of section 10(a)
are satisfied. As a result, if a commission designates a carrier as a
limited, Lifeline-only ETC in part of a rural service area, that
designation will not require redefinition of the rural telephone
company's service area. Because forbearance would apply only to
designations for the purpose of becoming a limited ETC to participate
in the Commission's Lifeline program, we examine the conformance
requirement in light of the statutory goal of providing low-income
consumers with access to telecommunications services as it relates to
the Commission's Lifeline program.
4. Given that designating authorities may have already designated
carriers as Lifeline-only ETCs in partial rural service areas without
seeking redefinition, the Commission will not enforce the conformance
requirement for those previously granted ETC designations. Such ETCs
need not amend their service area and may rely on this forbearance to
continue serving partial rural service areas. If the designating
authority required Lifeline-only ETCs to follow the conformance
requirement in its designation, the ETCs must abide by its designation
order. We emphasize, however, that if any carrier seeks designation to
be an ETC to receive high-cost support in part of a service area served
by a rural telephone company, we do not forbear from the redefinition
process that is required by the Act.
5. Just and Reasonable. Section 10(a)(1) of the Act requires that
we consider whether enforcement of the provisions from which
forbearance is sought is necessary to ensure that the charges,
practices, classifications, or regulations by, for, or in connection
with the carriers or services at issue are just and reasonable and not
unjustly or unreasonably discriminatory. We conclude that compliance
with the conformance requirement of section 214(e)(5) of the Act and
Sec. 54.207(b) of the Commission's rules is not necessary to ensure
that a Lifeline-only carrier's charges, practices, and classifications
are just and reasonable and not unjustly or unreasonably discriminatory
where it is providing Lifeline service only. Lifeline support, designed
to reduce the monthly cost of telecommunications services for eligible
consumers, is distributed on a per-subscriber basis and is directly
reflected in the price that the eligible subscriber pays. As discussed
below, we find that the factors traditionally taken into account by the
Commission and the states when reviewing a potential redefinition of a
rural service area pursuant to section 214(e)(5) of the Act do not
apply in the context of conditionally designating ETCs in areas
eligible for Lifeline support. Furthermore, forbearance from the
service area conformance requirement would not prevent the Commission
from enforcing sections 201 or 202 of the Act, which require all
carriers to charge just, reasonable, and non-discriminatory rates. The
Lifeline offerings of carriers subject to this forbearance will
compete, at a minimum, with the Lifeline offerings of the incumbent
wireline carrier, as well as other wireline and wireless providers, in
any given geographic area. We also expect that this competition will
spur innovation among carriers in their Lifeline offerings, expanding
the choice of Lifeline products for eligible consumers. The resulting
competition is likely to help ensure just, reasonable, and
nondiscriminatory offerings of services. For these reasons, we find
that the first prong of section 10(a) is met.
6. Consumer Protection. Section 10(a)(2) requires that we consider
whether applying the conformance requirement to a voice service
provider that has previously received designation, or will seek a
Lifeline-only ETC designation through a pending designation request or
at some time in the future, is necessary for the protection of
consumers. Carriers designated as Lifeline-only ETCs offer Lifeline-
eligible consumers an additional choice of providers for discounted
telecommunications services. Forbearance from the conformance
requirement for Lifeline-only support may provide additional
competitive choices to many low-income consumers who cannot afford non-
discounted offerings. Moreover, there is no evidence that forbearance
from the conformance requirement for the limited purpose of being a
Lifeline-only ETC would harm consumers currently served by the rural
telephone companies in the relevant service areas. Finally, every ETC,
including any carrier receiving Lifeline-only support, must certify
that it will satisfy applicable consumer protection and service quality
standards in its service area. For these reasons, we find that the
second prong of section 10(a) is met.
7. Public Interest. Section 10(a)(3) requires that we consider
whether forbearing from the conformance requirement to carriers that
have previously received designation, have pending designation requests
or will seek ETC designation for Lifeline support only in the future is
in the public interest. We find that forbearance from the service area
conformance requirement in these limited circumstances will promote
competitive market conditions for the Lifeline program. Requiring
carriers to conform their service areas to those of the rural carriers
in the states they seek to participate only in the Lifeline program
could result in numerous redefinition proceedings, which could delay
their entry into those markets, make it more difficult to market to
potential Lifeline consumers on a statewide basis, and deprive low-
income consumers in areas where the incumbent wireline provider is a
rural telephone company of an additional choice of service provider.
For example, carriers state that the
[[Page 26707]]
redefinition process for Lifeline-only offerings may take years to
resolve and, as such, wastes resources of both carriers and regulators.
Additionally, to avoid disruption of service to low-income consumers
served by existing Lifeline-only ETCs that were previously designated
by state designating authorities or the Commission that defined
carriers' service areas as part of a rural service area in its original
ETC designation, those ETCs need not amend their service areas and may
rely on this forbearance to continue serving partial rural service
areas. We find that applying the conformance requirement to Lifeline-
only ETCs would not be in the public interest when balanced against the
benefits of maintaining or introducing a competitive alternative
Lifeline provider to low-income consumers.
8. We disagree with assertions that granting forbearance from the
conformance requirement for Lifeline-only ETC designation will have a
detrimental effect on rural telephone companies. In response to the Cox
Petition, the Atlas Telephone Company expresses concerns that granting
forbearance from the conformance requirement and redefinition process
could cause a rural telephone company to suffer the same adverse
effects from losing customers to other Lifeline providers, as observed
under traditional creamskimming analysis, specifically arguing that as
a rural telephone company's low-income consumers migrate to other
Lifeline providers, the number of lines served by the rural telephone
company declines, causing its cost per line to increase. As the
Commission previously explained, the amount of Lifeline support is not
tied to the cost of serving an area. Rather, Lifeline support is a
fixed, per-line amount nationwide, and ETCs are required to pass
through the Lifeline support they receive to the benefit of their
subscribers. Any creamskimming concerns in an area of a rural telephone
company are not relevant in considering the designation of a Lifeline-
only ETC. Creamskimming is not a public-interest consideration in the
Lifeline context, whether the competing carrier is offering wireline or
wireless service. We find that the Act contains safeguards to address
any concerns raised by Atlas or any other rural telephone company that
questions whether the designation of a carrier as a Lifeline-only ETC
is in the public interest. 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 that
determination is not affected by this grant of forbearance. As a
result, any concerns raised by a rural telephone company will be
evaluated by the designating authority when considering designating a
limited, Lifeline-only ETC.
9. We also disagree with the argument that granting forbearance
from the conformance requirement will eliminate the role of states in
ETC designations and redefinition. Forbearance in these limited
circumstances merely removes the conformance requirement for previously
designated ETCs receiving Lifeline-only support and carriers with
pending or future ETC designation requests for Lifeline-only support,
so that states, which have jurisdiction over most ETCs, may now
designate Lifeline-only ETCs in a portion of a rural service area
without requiring redefinition of that rural service area. State
commissions are still required to consider the public interest,
convenience and necessity of designating carriers as a competitive ETC
in a rural area already served by a rural telephone company. Our
decision here to grant forbearance for Lifeline-only designations does
not disturb the roles of state commissions and this Commission in the
ETC designation process or in the redefinition process in other
circumstances when redefinition is required.
10. For pending and future Lifeline-only designation requests,
carriers' service area will no longer be required to conform to the
service area of the rural telephone companies serving the same area.
The Commission recognizes all of the important issues raised by
commenters in determining whether a particular carrier has met the
requirements to become an ETC for the limited purpose of receiving
Lifeline support, all of which will be addressed by the designating
authority when a carrier submits an application requesting designation.
Designating authorities will continue to make an independent assessment
as to whether designating a carrier as an ETC within a rural service
area is in the public interest.
11. Our decision here to forbear from the service area conformance
requirement does not affect the findings of any prior ETC designation.
Virgin Mobile, i-wireless, Q Link and Global Connection seek
forbearance with respect to those areas previously designated by state
designating agencies and the Commission. For previously designated
Lifeline-only ETCs serving partial rural areas, the designating
authorities have already determined that designating such carriers as
ETCs is in the public interest. Any carrier that has already been
designated as an ETC must comply with the obligations of their ETC
designation orders.
12. The Commission has made clear its commitment to improve
accountability for providers receiving universal service support in its
continued effort to fight waste, fraud, and abuse. In the Commission's
prior grant of forbearance from the service area conformance
requirement, it conditioned forbearance on the carriers submitting, and
having the Wireline Competition Bureau approve, a plan to comply with
several obligations imposed in that order before it could begin
providing service in accordance with its grant of forbearance. The
Commission has since adopted numerous conditions in the Lifeline Reform
Order, 77 FR 12952, March 2, 2012, to reduce waste, fraud and abuse in
the Lifeline program, and thus, eliminated the need to impose
additional conditions in the context of forbearance from the service
area conformance requirement. Although carriers may now be designated a
Lifeline-only ETC by either a state commission or this Commission in
partial rural service areas, no carrier seeking to avail itself of this
limited forbearance grant may be designated in a part of a rural
service area to receive federal high-cost support without first seeking
redefinition of the underlying rural telephone company's study area.
13. For the reasons stated herein, we find that the statutory
requirements for forbearance pursuant to section 10 of the Act are met
and that granting blanket forbearance from the conformance requirement
for Lifeline-only ETC designations will further the statutory goals of
providing low-income subscribers access to telecommunications and
emergency services and promoting more competitive options for low-
income consumers while protecting the universal service fund against
waste, fraud, and abuse. We also note that state commissions and this
Commission are still required to make an independent assessment as to
whether granting a carrier ETC designation is in the public interest
before including any part of a rural service area in such carrier's
service area. Furthermore, forbearance from the conformance requirement
stated herein does not apply if any carrier seeks ETC designation to
receive high-cost support; in that instance, such carrier must conform
its service area to that of the rural telephone company or else seek
redefinition of the service area pursuant to Sec. 54.207 of the
Commission's rules.
[[Page 26708]]
III. Procedural Matters
A. Paperwork Reduction Act
14. The Memorandum Opinion 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.
B. Final Regulatory Flexibility Act Certification
15. 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).
16. We hereby certify that the forbearance decision in this
Memorandum Opinion and Order will not have a significant economic
impact on a substantial number of small entities. In this Memorandum
Opinion and Order, the Commission eases the regulatory compliance
burden on Lifeline-only ETCs by forbearing from the requirement that
the service area of a Lifeline-only ETC conform to the service area of
any rural telephone company serving the same area. This Memorandum
Opinion and Order does not modify any of our reporting requirements.
The Commission will send a copy of this Memorandum Opinion and Order,
including this certification, to the Chief Counsel for Advocacy of the
SBA. In addition, the Memorandum Opinion and Order (or a summary
thereof) and certification will be published in the Federal Register.
C. Congressional Review Act
17. The Commission will send a copy of this Memorandum Opinion and
Order to Congress and the Government Accountability Office pursuant to
the Congressional Review Act.
IV. Ordering Clauses
18. It is ordered that, pursuant to the authority contained in
sections 4(i), 4(j), 10, 201, 214, and 254 of the Communications Act of
1934, as amended, 47 U.S.C. 154(i), 154(j), 160, 201, 214, 254, we
forbear from applying the conformance requirement of section 214(e)(5)
of the Communications Act of 1934, as amended, 47 U.S.C. 214(e)(5), and
Sec. 54.207(b) of the Commission's rules, 47 CFR 54.207(b), to the
extent discussed herein.
19. It is further ordered that, pursuant to the authority contained
in sections 4(i), 4(j), 10, 201, 214, and 254 of the Communications Act
of 1934, as amended, 47 U.S.C. 154(i), 154(j), 160, 201, 214, 254, the
petitions for forbearance filed by Virgin Mobile USA, L.P., Cox
Communications, Inc., Time Warner Cable, Inc., I-Wireless, LLC, Q Link
Wireless, LLC and Global Connection Inc. of America are granted to the
extent discussed herein, effective upon release.
20. It is further ordered that, except as provided in paragraph 19
above, this Order shall be effective June 7, 2013.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2013-10851 Filed 5-7-13; 8:45 am]
BILLING CODE 6712-01-P