[Federal Register Volume 78, Number 106 (Monday, June 3, 2013)]
[Rules and Regulations]
[Pages 32991-32995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-12985]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket Nos. 10-90; DA 13-1113]
Connect America Fund
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) adopts a framework for the challenge process that will be
used to finalize the list of areas that will be eligible for Connect
America Phase II model-based support and adopts the procedures for a
price cap carrier to elect to make a state-level commitment to serve
the eligible areas.
DATES: Effective July 3, 2013, except for those rules and requirements
involving Paperwork Reduction Act burdens, which shall become effective
immediately upon announcement in the Federal Register of OMB approval.
FOR FURTHER INFORMATION CONTACT: Ryan Yates, Wireline Competition
Bureau, (202) 418-0886 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order in WC Docket No. 10-90; DA 13-1113, adopted on May 16, 2013,
and released on May 16, 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: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-13-1113A1.pdf.
I. Introduction
1. In the USF/ICC Transformation Order, 76 FR 73830, November 29,
2011, the Commission comprehensively reformed and modernized the
universal service and intercarrier compensation systems to maintain
voice service and extend broadband-capable infrastructure to millions
of Americans. As part of the reform, the Commission adopted a framework
for providing support to areas served by price cap carriers known as
the Connect America Fund through ``a combination of competitive bidding
and a new forward-looking model of the cost of constructing modern
multi-purpose networks.'' In particular, the Commission will offer each
price cap carrier monthly model-based support for a period of five
years in exchange for a state-level commitment to serve specified areas
that are not served by an unsubsidized competitor, and if that offer is
not accepted, will determine support through a competitive process.
2. In this Report and Order (Order), the Wireline Competition
Bureau (Bureau) adopts a framework for the challenge process that will
be used to finalize the list of areas that will be eligible for Connect
America Phase II model-based support and adopts the procedures for a
price cap carrier to elect to make a state-level commitment
[[Page 32992]]
to serve the eligible areas. We particularly encourage state public
utility commissions and broadband mapping authorities to participate in
the challenge process and provide any information they believe to be
relevant to our consideration of which census blocks should be eligible
for the offer of Phase II model-based support.
II. Discussion
A. Phase II Footprint Challenge Process
3. The Phase II footprint challenge process will allow interested
parties to provide input on the preliminary list of what areas should
be deemed unserved by an unsubsidized competitor, and therefore
eligible for Phase II model-based support. Section 54.5 of the
Commission's rules defines an unsubsidized competitor as ``a
facilities-based provider of residential terrestrial fixed voice and
broadband service that does not receive high-cost support.'' In this
order, we set forth the basic framework regarding the use of
presumptions, evidentiary showing, and timing of the challenge process
for census blocks where Phase II funding will be offered to price cap
carriers.
4. Consistent with the framework established in the USF/ICC
Transformation Order, an unsubsidized competitor in areas where the
price cap carrier will be offered model-based support must meet the
speed criteria established by the Commission for fixed broadband
service (i.e., a provider that offers 4 Mbps downstream/1 Mbps upstream
service (4 Mbps/1 Mbps)), as well as non-speed broadband criteria
(i.e., latency, capacity, and price) and provide voice service. In
order to conduct the challenge process efficiently, we will develop the
initial list of eligible census blocks based on coverage shown on the
National Broadband Map, and the reporting of voice subscriptions on FCC
Form 477, and then will conduct a challenge process that will provide
an opportunity for parties to challenge that preliminary determination.
5. Broadband Service. Under the Commission's rules, an unsubsidized
competitor must offer fixed broadband with speeds of at least 4 Mbps/1
Mbps. We will presume that the National Broadband Map is accurate with
regard to the speed of services being offered by broadband providers,
with that presumption subject to rebuttal. Because the National
Broadband Map does not contain data specifically for the 4 Mbps/1 Mbps
benchmark, we will use the National Broadband Map's 3 Mbps downstream
and 768 kbps upstream (3 Mbps/768 kbps) advertised speed as a proxy for
4 Mbps/1 Mbps. After consideration of the record, we see no reason to
depart, for purposes of Phase II implementation, from the 3 Mbps/768
kbps proxy generally recognized by Commission. Therefore, any
terrestrial, fixed provider shown on the National Broadband Map as
offering broadband with speeds of 3 Mbps/768 kbps will be presumed to
provide broadband service meeting the speed requirement of 4 Mbps/1
Mbps.
6. While the National Broadband Map provides valuable information
regarding the availability of broadband service meeting specified speed
tiers, it does not address the other criteria that the Commission has
indicated are relevant to determining whether an entity should be
deemed an unsubsidized competitor. There is no alternative suitable
national-level source that we can rely upon to make this determination.
There is ample evidence in the record, however, that providers that
meet the speed requirement generally meet our other performance
criteria. For administrative ease, therefore, we conclude that it is
reasonable to presume that providers that provide broadband of the
required speed also meet the non-speed broadband criteria, with that
presumption subject to rebuttal in particular instances.
7. It serves the public interest to presume existing providers that
meet the speed criteria also meet the non-speed criteria for broadband
service. This presumption places price cap carriers in the position of
contesting a preliminary decision to not provide funding to a
particular census block, rather than requiring unsubsidized competitors
to contest a decision to fund a census block. This is both equitable
and efficient. First, requiring price cap carriers to file a challenge
likely will reduce the overall burden on respondents and the Commission
while placing the burden on the party potentially receiving funds.
Second, we conclude this presumption is generally accurate in the
majority of cases. The preliminary classification of a block as served
will serve to err on the side of not providing funding, while still
giving the opportunity for the price cap carrier to demonstrate that a
block should be funded.
8. Voice Service. Under the Commission's rules, an entity must
provide ``residential terrestrial fixed voice and broadband service''
in order to be deemed an unsubsidized competitor. We conclude that the
ability of the consumer to obtain voice service from a third party is
not sufficient for that broadband provider to be deemed an unsubsidized
competitor for purposes of Phase II implementation because that
broadband provider would not be offering a voice service. Such an
interpretation would effectively read the requirement that the
unsubsidized competitor be a ``provider'' of ``voice'' out of the
Commission's adopted definition, as all broadband connections offer the
capability to receive an ``over the top'' voice over Internet protocol
(VoIP) service from a third party. Therefore, we interpret the
Commission's definition as requiring the provider itself to provide
voice service, in addition to broadband, in order to be designated an
unsubsidized competitor.
9. We conclude, based on our FCC Form 477 data, that it would be
unreasonable to presume that all broadband providers shown on the
National Broadband Map are also providing voice service. We therefore
will utilize both Form 477 data and the National Broadband Map when
developing the initial list of blocks that will be eligible for
funding. A provider will be presumed to be offering voice if it reports
voice subscribers for the relevant state on its Form 477 filing, with
that presumption subject to rebuttal. Supplementing the National
Broadband Map with the FCC's Form 477 data will enable challenges to
the initial list of census blocks eligible for funding to be more
narrowly focused, thereby reducing burdens on both interested parties
and Commission staff.
10. Given the above presumptions and requirements, a provider will
initially be presumed an unsubsidized competitor if (1) it is shown on
the National Broadband Map as offering at least 3 Mbps/768 kbps and (2)
it is reporting voice subscriptions in the relevant state on Form 477.
11. Challenges and Evidentiary Showings. Based on the above
presumptions, the Bureau will publish a list of census blocks that are
presumptively unserved by an unsubsidized competitor. The challenge
process will focus on whether an area is served by an unsubsidized
competitor. Parties may challenge this list in two ways. They may argue
that the list is underinclusive--that a census block not included on
the list is not served by an unsubsidized competitor and therefore
should be on the list of blocks eligible for funding--or they may argue
that the list is overinclusive--that a census block on the list is in
fact served by an unsubsidized competitor and therefore should be
excluded from the list.
12. We conclude that it is useful, given the number of census
blocks potentially at issue in Phase II, to provide some advance
guidance
[[Page 32993]]
regarding what sorts of evidentiary showings will be persuasive, and to
define standards so that parties, including small businesses, seeking
to challenge or rebut the eligibility of a census block for funding can
participate in this process without unnecessary burden or expense. Our
objective is to implement the Commission's requirement that funding not
flow to an area where there is an unsubsidized competitor, while at the
same time ensuring that census blocks are not unnecessarily excluded
from funding.
13. To facilitate efficient and swift review of any challenges,
parties must submit challenges in the format specified by the Bureau.
Challengers will be required to provide the 15 digit Federal
Information Processing Standard (FIPS) code and the state of the block
in question; the name of the entity or entities putatively providing
disqualifying service to that block according to the National Broadband
Map, if applicable; the service criteria at issue; the type of
supporting evidence submitted as an attachment; and a certification
under penalty of perjury that the challenger has engaged in due
diligence to verify statements in the challenge and that such
statements are accurate to the best knowledge of the filer.
Furthermore, because the Electronic Comment Filing System (ECFS)
converts all files to .pdf format, in addition to posting on ECFS, we
will also require parties to submit a copy of any challenge in a native
format to the Commission, either by email to a designated Commission
staff member or by delivery of storage media to a designated Commission
staff member or the Commission Secretary. A proposed form for filing
challenge is available at http://fjallfoss.fcc.gov/edocs_public/attachmatch/DA-13-1113A1.docx.
14. We require parties submitting challenges to include specific
evidence as an attachment to the challenge in support of their claims.
For each challenged block, parties must provide evidence specifying the
reason for the challenge. A price cap carrier contending that a
particular census block is unserved by an unsubsidized competitor need
only show that any one of the criteria (speed, latency, capacity,
price, or voice) is not met. Given the difficulty in proving a negative
(i.e., that service meeting defined criteria does not exist in a
particular block), we will consider a variety of evidence in
determining whether the price cap carrier has submitted sufficient
evidence to warrant placing the challenge on public notice to solicit a
response from interested parties. For example, a price cap carrier's
evidence could consist of a signed certification that an employee of
the company attempted to obtain service in a particular block, but was
unable to do so, or that following a good faith search of a provider's
advertising materials, it was unable to find any offering matching the
Commission's Phase II service requirements. We would also consider a
signed certification from an officer of the price cap carrier under
penalty of perjury, that it has not ported a telephone number within
the last year (or a longer period of time) to the purported
unsubsidized competitor, as relevant to whether that provider is
providing voice service. While we recognize that some customers may
drop their landline service altogether, it would be unusual for a
competitor offering voice service in the marketplace to have no voice
customers at all.
15. In those instances where a potential unsubsidized competitor
files a challenge contending that it does serve the area,
notwithstanding evidence establishing a presumption that the block is
unserved, evidence that it actually is providing voice and broadband
service to customers in the relevant area is likely to be the most
persuasive evidence. Thus, certifications relating to the number of
customers, revenues received from customers, or customer lists (with
customer identifying information redacted to preserve customer privacy)
are likely to be more persuasive than propagation maps, advertisements
of service offerings, or officer certifications, standing alone, that
service is actually and immediately available--although we will
consider each of the latter forms of evidence. We recognize that
producing evidence demonstrating the existence of actual customers may
be more difficult for potential competitors that have only recently
begun to serve an area, but also seek some assurance that a provider is
not merely advertising temporary or hypothetical service as a means of
precluding Phase II funding for the price cap carrier.
16. Likewise, parties opposing challenges must provide, for each
challenged census block they wish to contest, concrete and verifiable
evidence supporting their claims that the challenge should not be
granted. A corresponding evidentiary burden applies: respondents
attempting to show that a block is served must show that all of the
Commission's criteria are met, while respondents attempting to show
that a block is unserved need only show that any one of the criteria is
not met. We will consider an officer certification that a provider
serves a particular census block with service meeting all of the
Commission's criteria as some evidence that service exists; however,
such a certification would be more persuasive if supported by other
evidence, such as advertising materials, certifications relating to the
number of customers and/or revenues received from customers, or
customer lists (with customer identifying information redacted to
preserve customer privacy). We also require that an officer of the
company making or opposing a challenge certify to the accuracy of the
information provided, subject to the penalties for false statements
imposed under 18 U.S.C. 1001. Challenges and responses that do not meet
these criteria will not be considered by the Bureau.
17. We conclude this process will provide the Bureau with an
adequate evidentiary basis for making a determination that a particular
census block is or is not served by an unsubsidized competitor, without
unduly delaying implementation of Phase II. We are not persuaded by
USTelecom's proposal that state mapping authorities contact all
broadband providers to determine whether they meet each element of the
Commission's service obligation. Simply put, that suggestion would
potentially delay completion of the challenge process, and more
importantly, would impose an unanticipated, unfunded burden on the
state mapping authorities.
18. We will require parties to make a good faith effort to serve
notice of challenges on interested parties. For a challenge that a
listed census block is in fact served, the interested party is the
price cap carrier in whose territory the block falls. For a challenge
that a block not on the list is unserved, the interested party is any
and all entities that are shown on the National Broadband Map as
providing service to that census block. This notice will assist
challenged parties who may not routinely monitor the Commission's daily
digest for public notices. However, we recognize that in some
circumstances it may prove impossible or exceedingly difficult to
identify and locate the particular person that should be given service
for a provider; therefore, we stop short of requiring service of actual
notice. A challenger must include a certification along with its
challenge that it has made a good faith attempt at providing notice to
the interested party.
19. Once the challenges have been filed in ECFS, the Bureau will
review all submissions to verify that evidence has been submitted to
make a prima facie case and then issue a Public Notice
[[Page 32994]]
specifying those blocks for which rebuttals may be submitted. This
Public Notice will be the official notice of all challenges, and will
specify the date by which responses must be submitted.
20. Challengers will have 45 days from the date of the public
notice announcing the initial eligible census blocks to submit their
challenges. Respondents will have 45 days from the date of the public
notice announcing the list of census blocks that warrant a response to
submit replies to the challenges. This time period should give parties
a sufficient opportunity to formulate their challenges and responses.
This time period is consistent with that generally requested by
commenters. After the close of the reply period, the Bureau will
consider the challenges and responses. Where the Bureau concludes that
the evidence shows it is more likely than not that the status of a
census block should be changed, the Bureau will make the appropriate
adjustment to the list of eligible census blocks, which will be
published in a subsequent public notice setting forth the finalized
list of eligible census blocks.
21. Finally, we conclude that we will not permit challenges below
the census block level, such as a challenge that a particular location
or group of homes within a census block is unserved. Any partially
served census block will be treated as served. There are more than 6
million census blocks in price cap service territories. Conducting a
sub-block challenge process on millions of blocks would pose
significant burdens on both potential unsubsidized competitors as well
as Bureau staff. We conclude that the administrative burden of
constructing and carrying out a sub-census block challenge process far
outweighs any marginal benefit from such a process.
B. Process for Electing To Make a State-level Commitment
22. We also sought comment in the Phase II Challenge Process Public
Notice, 78 FR 4100, January 18, 2013, regarding the procedures for a
carrier to elect to make a state-level commitment in Phase II of
Connect America. In this Order, we announce the procedures that a
carrier must follow to make such an election.
23. After completion of the challenge process described above, the
Bureau will release a public notice announcing Connect America Cost
Model-determined support amounts for each incumbent price cap carrier's
funded census blocks within a given state. After the release of that
public notice, incumbent price cap carriers will be given 120 days to
accept or decline that support on a state-by-state basis for each state
they serve. While some commenters argued that a longer election period
is necessary, we conclude that 120 days strikes a balance by providing
sufficient time for consideration and ensuring that transition into
Phase II is completed within a reasonable timetable.
24. To elect to accept the support amount for a state, a carrier
must submit a letter signed by an officer of the company declaring that
the carrier accepts the support amount and commits to satisfy the
service obligations for Phase II. In its acceptance letter, a carrier
accepting funding must also acknowledge that if it fails to meet its
service obligations, it will be subject to the penalties and/or
enforcement actions, as specified by the Commission. If a letter of
credit or some other form of security is required to ensure compliance
with these obligations, such security must be submitted along with the
letter accepting Phase II support.
25. We are persuaded that requiring elections to be publicly
disclosed, after a brief period of Bureau review to confirm facial
completeness, will serve the public interest by enabling consumers,
state regulators, other providers in the area, and other interested
parties to know that a particular area will be served through Phase II.
The Bureau will specify in a public notice the specific procedures for
submitting acceptances to a designated Commission staff member. This
will give the Bureau an opportunity to review the acceptances before
elections are publicly announced. Once this review is complete, the
finalized elections will not be afforded confidentiality.
26. We sought comment as to what information we should require
carriers to submit when making their elections. After further
consideration, we conclude that it would not be productive to require
carriers to specify at the time the election is made the specific
locations where they intend to provide 6 Mbps downstream/1.5 Mbps
upstream service, or where specifically they anticipate meeting their
third year 85 percent buildout milestones. Deployment plans may change
over the course of the five-year Phase II buildout period, and
requiring carriers to declare this information up front would impose a
significant burden on carriers accepting funding, while providing only
limited benefit to the Commission and the public. Furthermore, by not
requiring this additional information, carriers should be better able
to make their elections within the 120-day window provided.
27. A carrier may elect to decline funding for a given state by
submitting a letter signed by an officer of the company noting it does
not accept Phase II support for that state. Alternatively, if a carrier
fails to submit any election letter by the close of the 120-day
election period, it will be deemed to have declined support.
28. Carriers are bound by their election decisions. After the close
of the election period, a carrier may not retract its election, nor may
it return support in exchange for being relieved of its obligations
under Phase II. Such actions will have no effect. Thus, in the case of
a carrier that accepted funding, the carrier will still be obligated to
meet its deployment obligations and will face the same penalties as any
carrier that fails to satisfy its obligations. This restriction is
necessary not only to ensure the integrity of the state-level
commitment process, but also to efficiently conduct the planning and
implementation of auctions for areas in which carriers declined to make
state-level commitments.
III. Procedural Matters
A. Paperwork Reduction Act
29. This document contains new information collection requirements
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. It will be submitted to the Office of Management and Budget (OMB)
for review under section 3507(d) of the PRA. OMB, the general public,
and other Federal agencies are invited to comment on the new
information collection requirements contained in this proceeding. In
addition, we note that pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we
previously sought specific comment on how the Commission might further
reduce the information collection burden for small business concerns
with fewer than 25 employees.
30. In this present document, we have assessed the effects of the
procedures for electing to make a statewide commitment under Phase II
and find that no businesses with fewer than 25 employees will be
directly affected. We have structured the challenge process to minimize
burdens on businesses with fewer than 25 employees. Unsubsidized
competitors, many of which are small businesses, will face reduced
burden due to the use of presumptions that a provider meeting the speed
requirement also meets the other non-speed criteria. Furthermore,
specifying the format and
[[Page 32995]]
probative evidence for the challenge process in advance will likely
provide certainty to small businesses in filing any challenges and
reduce the burden on such parties.
B. Final Regulatory Flexibility Act Certification
31. The Regulatory Flexibility Act of 1980, as amended (RFA)
requires that a regulatory flexibility analysis be prepared for
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).
32. This Order implements the rules adopted by the Commission in
the USF/ICC Transformation Order. These clarifications do not create
any burdens, benefits, or requirements that were not addressed by the
Final Regulatory Flexibility Analysis attached to the USF/ICC
Transformation Order. Therefore, we certify that the requirements of
this order will not have a significant economic impact on a substantial
number of small entities. The Commission will send a copy of the order
including a copy of this final certification, in a report to Congress
pursuant to SBREFA. In addition, the order and this certification will
be sent to the Chief Counsel for Advocacy of the Small Business
Administration, and will be published in the Federal Register.
C. Congressional Review Act
33. The Commission will send a copy of this order to Congress and
the Government Accountability Office pursuant to the Congressional
Review Act.
IV. Ordering Clauses
Accordingly, it is ordered that, pursuant to sections 1, 4(i), 201-
206, 214, 218-220, 254, 303(r), and 403 of the Communications Act of
1934, as amended, and section 706 of the Telecommunications Act of
1996, 47 U.S.C. 151, 154(i), 201-206, 214, 218-220, 254, 303(r), 403,
1302, sections 0.91 and 0.291 of the Commission's rules, 47 CFR 0.91,
0.291, and the delegations of authority in paragraphs 103, 170, and 171
of the USF/ICC Transformation Order, FCC 11-161, this Report and Order
is adopted, effective July 3, 2013, except for those rules and
requirements involving Paperwork Reduction Act burdens, which shall
become effective immediately upon announcement in the Federal Register
of OMB approval.
Federal Comunications Commission.
Julie Veach,
Chief, Wireline Competition Bureau.
[FR Doc. 2013-12985 Filed 5-31-13; 8:45 am]
BILLING CODE 6712-01-P