Connect America Fund; A National Broadband Plan for Our Future; Establishing Just and Reasonable Rates for Local Exchange Carriers; High-Cost Universal Service Support, 3837-3843 [2013-00556]
Download as PDF
Federal Register / Vol. 78, No. 12 / Thursday, January 17, 2013 / Rules and Regulations
The Shark River Railroad Bridge
across the Shark River, mile 0.9, is a
bascule lift Bridge, in Avon Township,
NJ, and has a vertical clearance in the
closed position of 8 feet, above mean
high water.
Because the draw of the Shark River
Bridge operates in unison with the S71
Bridge, mile 0.8 across Shark River at
Avon Township, NJ, the draw of the S71
Bridge will also be restricted under this
deviation. The S71 Bridge is also a
bascule lift bridge and has a vertical
clearance of 13 feet.
The current schedules for both the
Shark River Railroad Bascule Bridge
operating regulations are set out in 33
CFR 117.751. Under normal operating
conditions, the draws of S71 bridge,
mile 0.8 and the railroad bridge, mile
0.9, both at Avon, operate as one unit.
To facilitate machinery replacement,
the above mentioned drawbridges will
be maintained in the closed-tonavigation position from 12:01 a.m.
Monday February 25, 2013, to 12:01
a.m. on Wednesday March 6, 2013. The
bridges normally open several times a
day for transiting vessels. Coordination
with the waterway users has been
completed.
The Coast Guard will inform all users
of the waterway through our Local and
Broadcast Notice to Mariners of the
closure periods for the bridge so that
vessels can arrange their transits to
minimize any impacts caused by the
temporary deviation. Vessels able to
pass under the spans when closed may
transit under the drawbridges while
they are in the closed position. Mariners
are advised to proceed with caution.
There are no alternate routes for vessels
and the bridge will not be able to open
in the event of an emergency.
In accordance with 33 CFR 117.35(e),
the drawbridge must return to its regular
operating schedule immediately at the
end of the effective period of this
temporary deviation. This deviation
from the operating regulations is
authorized under 33 CFR 117.35.
Dated: January 3, 2013.
Waverly W. Gregory, Jr.,
Bridge Program Manager, Fifth Coast Guard
District.
[FR Doc. 2013–00887 Filed 1–16–13; 8:45 am]
pmangrum on DSK3VPTVN1PROD with
BILLING CODE 9110–04–P
VerDate Mar<15>2010
12:47 Jan 16, 2013
Jkt 229001
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 12–137]
Connect America Fund; A National
Broadband Plan for Our Future;
Establishing Just and Reasonable
Rates for Local Exchange Carriers;
High-Cost Universal Service Support
Federal Communications
Commission.
ACTION: Final rule; petition for
reconsideration.
AGENCY:
In this document, the Federal
Communications Commission
(Commission) reconsiders and clarifies
certain aspects of the USF/ICC
Transformation Order, in response to
various petitions for reconsideration
and/or clarification. We grant in part
petitions related to the financial
reporting obligations of eligible
telecommunications carriers (ETCs) that
are privately held rate of return
companies. This Order also provides
additional guidance and clarifications
regarding the standard and process for
requests for waiver of our universal
service reforms.
DATES: Effective February 19, 2013,
except for the amendments made to
§ 54.313(f)(2)(i) through (iii) in this
document, which contain information
collection requirements that are not
effective until approved by the Office of
Management and Budget. The Federal
Communications Commission will
publish a document in the Federal
Register announcing the effective date
for that section.
FOR FURTHER INFORMATION CONTACT:
Alexander Minard, Wireline
Competition Bureau, (202) 418–7400 or
TTY: (202) 418–0484.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Fifth
Order on Reconsideration in 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 12–137, adopted on November 13,
2012 and released on November 16,
2012. 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:
https://transition.fcc.gov/Daily_Releases/
Daily_Business/2012/db0514/FCC-1252A1.pdf.
SUMMARY:
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
3837
I. Introduction
1. In this Order, we reconsider and
clarify certain aspects of the USF/ICC
Transformation Order, 76 FR 73830,
November 29, 2011, in response to
various petitions for reconsideration
and/or clarification. The USF/ICC
Transformation Order represents a
careful balancing of policy goals,
equities, and budgetary constraints. This
balance was required in order to
advance the fundamental goals of
universal service and intercarrier
compensation reform within a defined
budget while simultaneously providing
sufficient transitions for stakeholders to
adapt.
2. As a preliminary matter regarding
our review of a number of the specific
issues discussed below, we observe that,
under Commission rules, if a petition
for reconsideration simply repeats
arguments that were previously
considered and rejected in the
proceeding, it will not likely warrant
reconsideration.
3. With this standard in mind, we take
several limited actions stemming from
reconsideration petitions. Specifically,
this Order grants in part petitions
related to the financial reporting
obligations of eligible
telecommunications carriers (ETCs) that
are privately-held rate-of-return
companies. This Order also provides
additional guidance and clarifications
regarding the standard and process for
requests for waiver of our universal
service reforms.
II. Financial Reporting Requirements
for Privately Held Rate-of-Return
Carriers
4. In the USF/ICC Transformation
Order, the Commission required all
privately-held rate of return carriers to
provide a report on their financial
condition and operations and provided
two options for doing so: (1) File a copy
of the carrier’s audited financial
statement; or (2) file a copy of the
Department of Agriculture’s Rural
Utility Service (RUS) Form 479, a
financial reporting requirement for
carriers that borrow money from RUS.
The USF/ICC Transformation Order
requires this information to be filed
with the Commission, the Universal
Service Administrative Company
(USAC), and the relevant state
commission, relevant authority in a U.S.
Territory, or Tribal governments, as
appropriate. Only one party commented
generally on the NPRM proposal to
require audited financial statements
certified by an independent CPA, and
no privately held carrier opposed the
proposal at that time.
E:\FR\FM\17JAR1.SGM
17JAR1
pmangrum on DSK3VPTVN1PROD with
3838
Federal Register / Vol. 78, No. 12 / Thursday, January 17, 2013 / Rules and Regulations
5. The record on reconsideration
indicates, however, that a number of
rate-of-return carriers do not currently
have audited financial statements.
Several petitioners argue that the
financial reporting requirement is
unduly burdensome. For example,
Comporium urges ‘‘the Commission to
clarify and/or reconsider its decision
and revise its rules by determining that
companies with multiple study areas
under common ownership or control
may submit basic financial schedules
* * * for regulated operations only,
accompanied by an officer affidavit.’’
Another party requests that we replace
the current financial reporting
requirement with a requirement that
‘‘all privately held rate of return carriers
file a form approved by the FCC that is
based on the RUS Form 479.’’ Finally,
several petitioners argue that the
Commission should allow carriers to file
these financial statements
confidentially.
6. After reviewing the Petitions for
Reconsideration, along with comments
filed in the docket, we conclude that
some adjustments in the financial
reporting rule are appropriate for
administrative efficiency and to lessen
the potential burden on companies that
are not audited in the ordinary course
of business. Therefore, we grant in part
the reconsideration requests and hereby
revise new section 54.313(f)(2) of the
Commission’s rules.
7. RUS Borrowers. On
reconsideration, we require that all
privately held rate-of-return carriers that
are RUS borrowers to file their RUS
Operating Report for
Telecommunications Borrowers with
the Commission, USAC, and the
relevant state commission, relevant
authority in a U.S. Territory, or Tribal
governments, as appropriate, as part of
their annual § 54.313 filing. Requiring
these ETCs to submit a copy of an
existing RUS Operating Report for
Telecommunications Borrowers should
impose negligible burden on them,
while helping the Commission monitor
the impact of its reforms on this group
of rate-of-return companies. As one
commenter recognizes, one benefit of
mandating that RUS borrowers submit
information in the RUS format is that it
will provide the Commission with
readily accessible information in a
consistent format. The RUS Operating
Report for Telecommunications
Borrowers is consolidated across all
study areas and includes all operations,
both regulated and non-regulated, of the
borrowing entity. While the RUS Report
itself is not audited, the underlying data
are audited, and the borrower’s auditor
must review the information being
VerDate Mar<15>2010
12:47 Jan 16, 2013
Jkt 229001
reported to RUS. We further require that
the ETC must make the underlying audit
and related workpapers and financial
information available upon request by
the Commission, USAC, or the relevant
state commission, relevant authority in
a U.S. Territory, or Tribal governments,
as appropriate.
8. Non-RUS Borrowers That Are
Audited. For non-RUS borrowers that
are audited in the ordinary course of
business, we provide two options. Such
carriers may either: (1) File their audited
financial statements; or (2) provide their
financial information in a form
consistent with the RUS Operating
Report for Telecommunications
Borrowers and accompanied by a
management letter from their auditors.
For those carriers that already are
audited in the ordinary course of
business—whether as a condition of a
loan from a bank or for other reasons,
producing a copy of that audit report to
the Commission should impose
negligible burden. We agree with those
parties that suggest it would be
beneficial to the Commission to have all
carrier financial reporting information
in a consistent format, but also
recognize that requiring submission of
the information in a form similar to the
RUS format would require additional
effort for companies that are not RUS
borrowers. We therefore provide the
option of submitting the information in
a format comparable to what is required
by RUS for its borrowers, but do not
make that mandatory for such filers. We
further require that the ETC must make
the underlying audit and related
workpapers and financial information
available upon request by the
Commission, USAC, or the relevant
state commission, relevant authority in
a U.S. Territory, or Tribal government,
as appropriate.
9. Carriers That Are Not Audited.
With respect to privately held rate-ofreturn companies that are not audited in
the ordinary course of business, we
balance the relative costs and benefits of
requiring carriers to comply with a
financial reporting requirement that
requires submission of an audited
financial statement. We conclude on
reconsideration that our core objectives
can be met, while lessening regulatory
burden, by revising new section
54.313(f)(2) to provide two options for
privately held rate-of-return carriers that
are not audited in the ordinary course
of business: (1) File a financial
statement that has been subject to
review by a CPA or (2) file financial
information in a format consistent with
the RUS form. In the latter instance, the
underlying information must be subject
to a CPA review, with that review and
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
related workpapers and financial
information to be made available upon
request by the Commission, USAC, or
the relevant state commission, relevant
authority in a U.S. Territory, or Tribal
government, as appropriate. For either
of these two options, the filing must be
accompanied by an officer certification
that: (1) The carrier is not audited in the
ordinary course of business; and (2) the
reported data are accurate.
10. We conclude that requiring the
underlying financial information to be
subject to a CPA review, rather than a
CPA audit, provides sufficient assurance
that we will obtain a reasonable
understanding of the affected
companies’ financial picture. A
financial review requires the auditor to
make inquiries of management and
perform analytical procedures to
determine whether the financial
statements conform with generally
accepted accounting principles. An
audit requires the auditor additionally
to obtain an understanding of the
internal controls environment for the
company, which requires the
development of certain documentation,
such as internal controls procedures,
that would not have been prepared but
for the audit. Typically an audit will
perform more in-depth testing of
individual transactions posted to the
general ledger. Both an audit and a
review require the auditor to determine,
however, whether the financial
statements prepared by management are
consistent with generally accepted
accounting principles.
11. Because a review does not require
the auditor to develop a detailed
understanding of the internal controls
environment, a CPA review generally is
less costly than a full audit. Requiring
a CPA review of the underlying
information and an officer certification
regarding the accuracy of the reported
data still provides the accountability of
an independent review, while
minimizing the economic impact on
these generally small carriers associated
with an audit. In contrast, we are not
persuaded by Comporium’s proposal to
allow privately-held rate-of-return
carriers to provide the Commission with
a financial report that has not been
subject to any form of independent
scrutiny by a CPA. We recognize that
some state commissions allow carriers
to file self-prepared financial reports
only accompanied by an officer
certification. Given our responsibility as
stewards of the USF, however, we
conclude that requiring a CPA review—
which requires the CPA to determine
whether any material modifications are
required in order for the financial
statements to be in conformity with
E:\FR\FM\17JAR1.SGM
17JAR1
pmangrum on DSK3VPTVN1PROD with
Federal Register / Vol. 78, No. 12 / Thursday, January 17, 2013 / Rules and Regulations
generally accepted accounting
principles—is necessary to fulfill our
core objective of ensuring financial
accountability by USF recipients. Based
on the record on reconsideration, we
therefore conclude that a review will be
sufficient to meet our objectives of
providing the Commission with an
accurate picture of the financial
condition of these privately held rate-ofreturn carriers, without imposing undue
burdens on carriers whose financial
statements are not already audited.
12. Fiscal Year 2011 Financial
Statements. Once PRA approval is
received for § 54.313(f)(2) as adopted in
this Order, we require any privately
held rate-of-return carrier to file with
the Commission, USAC, the relevant
state commission, relevant authority in
a U.S. Territory, or Tribal government,
as appropriate, pursuant to this rule
within a reasonable time, as follows:
• If a carrier receives RUS loans, that
carrier must file its 2011 RUS Operating
Report for Telecommunications
Borrowers.
• If a carrier does not receive RUS
loans, but its financial statements for
2011 have been audited, that carrier
must file a copy of the audited 2011
financial statement, or a financial report
in a format comparable to RUS
Operating Report for
Telecommunications Borrowers
accompanied by a copy of a
management letter issued by the
independent certified public accountant
that performed the company’s financial
audit, with the Commission, USAC, the
relevant state commission, relevant
authority in a U.S. Territory, or Tribal
government, as appropriate.
• If a carrier does not receive RUS
loans, but its financial statements for
2011 have been subject to review by an
independent certified public
accountant, that carrier must file a copy
of their reviewed 2011 financial
statement, or a financial report in a
format comparable to RUS Operating
Report for Telecommunications
Borrowers with the underlying
information subjected to a review by an
independent certified public accountant
and accompanied by an officer
certification the carrier was not audited
in the ordinary course of business for
the preceding fiscal year and that the
reported data are accurate.
13. We find that there is not a
significant additional burden for ETCs
to file such information because these
financial statements already exist. We
determine that receiving some 2011
financial statements will assist the
Commission and states with verifying
whether these carriers are efficiently
and appropriately using high-cost
VerDate Mar<15>2010
12:47 Jan 16, 2013
Jkt 229001
support for its intended purposes.
Finally, we expect all privately held
rate-of-return carriers to file on July 1,
2013, pursuant to this rule and subject
to PRA approval, Fiscal Year 2012
financial statements.
14. Submission of Consolidated
Information. We clarify that privately
held rate-of-return carriers are not
required to submit the financial
information on a study area basis. As
pointed out in the record on
reconsideration, audits of RUS
borrowers are not done on a study area
basis, and the RUS Operating Report for
Telecommunications Borrowers is
submitted by the borrowing entity,
which could encompass multiple study
areas. Several petitioners note that many
companies with multiple study areas
under common ownership or control
prepare a consolidated audit report,
which minimizes audit expenses. The
Commission has already concluded that
holding company level information for
RUS borrowers is acceptable, when it
concluded that such borrowers could
submit the RUS Operating Report for
Telecommunications Borrowers to meet
the financial reporting requirement.
Nothing in the codified rule requires
that financial reporting be done on a
study area basis. In fact, imposing a
requirement that privately held rate-ofreturn carriers must be audited on a
study-area basis would have an
unreasonably disparate impact on the
respective burdens associated with this
reporting requirement for those
privately held carriers that are non-RUS
borrowers compared to RUS borrowers.
We clarify that the language in
paragraph 599 of the Order that directs
non-RUS borrowers to submit ‘‘financial
information as kept in accordance with
Part 32’’ was not intended to require
financial reporting by study area, but
rather was focusing on the fact that
companies are already required to
maintain financial information by study
area pursuant to existing Commission
requirements. In response to the
petitions for reconsideration and/or
clarification, we clarify that the
Commission did not intend to require
financial information broken out by
study areas for non-RUS borrowers, and
such companies under common
ownership or control may file financial
reports on a consolidated basis.
15. Requirement That Financial
Disclosures Be Publicly Available. In the
USF/ICC Transformation Order, we
stated that the financial reporting
information required to be filed by
ETCS would be made publicly available.
Some petitioners encourage the
Commission to revisit that requirement.
Upon reconsideration, we conclude that
PO 00000
Frm 00013
Fmt 4700
Sfmt 4700
3839
in some instances there could be a
potential for competitors to use the
submitted financial data of private rural
rate-of-return carriers in an anticompetitive manner, and therefore, as
several commenters suggested, we will
allow privately held ETCs to file the
financial data pursuant to § 54.313(f)(2)
of the Commission’s rules subject to a
Protective Order.
16. As we stated in the USF/ICC
Transformation Order, recipients of
high-cost and/or Connect America
support receive extensive public
funding, and therefore the public has a
legitimate interest in being able to verify
the efficient use of those funds.
Moreover, as we stated, by making this
financial information public, the
Commission will be assisted in its
oversight duties by public interest
watchdogs, consumer advocates, and
others who seek to ensure that
recipients of support receive funding
that is sufficient, but not excessive. On
the other hand, we agree that, for
example, small ETCs serving only one
study area could face competitive harm
if their financial data are made available
to an overlapping or neighboring
competitor. Where an ETC serving a
large geographic area across multiple
states files a consolidated financial
statement, it is not possible to determine
the revenues and, thus, profits
associated with a particular study area.
However, where a small ETC serves
only one study area, all reported
revenues and profits are attributable to
that one study area, thus making it
easier for competitors to craft business
plans that capitalize on their knowledge
of the small ETC’s reported finances.
17. We conclude that the public
interest would best be served by making
the private financial data being
requested from privately-held rate of
return carriers available only subject to
the provisions of the Protective Order,
and we delegate authority to the
Wireline Competition Bureau to adopt
such an order consistent with this
decision. In particular, as specified in
more detail in the Protective Order, we
restrict availability of this material as
follows: (1) In the case of commercial
entities having a competitive or
business relationship with the company
whose confidential information it seeks,
to In-House Counsel not involved in
competitive decision-making, and to
their Outside Counsel of Record, their
Outside Consultants and experts whom
they retain to assist them in this and
related proceedings, and employees of
such Outside Counsel and Outside
Consultants; (2) to employees and
representatives of commercial entities
having no competitive or business
E:\FR\FM\17JAR1.SGM
17JAR1
3840
Federal Register / Vol. 78, No. 12 / Thursday, January 17, 2013 / Rules and Regulations
pmangrum on DSK3VPTVN1PROD with
relationship with the company whose
confidential information it seeks; and
(3) to employees and representatives of
non-commercial entities having no
competitive or business relationship
with the company whose confidential
information it seeks. In sum, we
recognize the need to balance the
public’s legitimate interest in being able
to verify the efficient use of universal
service high-cost support with the
potential competitive harm of such
financial data being publicly available.
We conclude that adopting such
procedures in a Protective Order will
give appropriate access to the interested
members of the public while protecting
especially competitively sensitive
information from improper disclosure,
and that disclosure pursuant to the
Protective Order thereby serves the
public interest.
III. Waiver Standard For USF Reforms
18. The National Exchange Carrier
Association, Inc., the Organization for
the Promotion and Advancement of
Small Telecommunications Companies,
and the Western Telecommunications
Alliance (Rural Associations) seek
reconsideration of the USF waiver
standard articulated in the USF/ICC
Transformation Order and ask that the
Commission ‘‘discard the various
hurdles specified in the Order and
instead simply apply the ‘good cause’
standard applicable to waiver requests
generally under § 1.3 of the rules.’’ The
Rural Associations request that a carrier
continue to receive support pursuant to
the prior, no-longer-in-effect rules while
the carrier’s petition for waiver of any
new rule is pending. They also argue
that the Commission should make the
waiver process ‘‘less burdensome’’ and
‘‘more equitable and attainable’’ for
small companies. In particular, the
Rural Associations ask that the
Commission: (i) Waive the filing fee
applicable to USF-related waivers; (ii)
exclude costs incurred in preparing a
waiver request from corporate
operations expenses counted toward the
caps; (iii) permit carriers to submit
information from intrastate earnings
reviews and rate cases or Universal
Service Administrative Company
(USAC) audits in lieu of the financial
information the Commission identified
in the USF/ICC Transformation Order;
(iv) require carriers to only submit
information that relates to the use of
supported plant; (v) not require carriers
to provide geographic data or data about
end user rate plans to the extent the
Commission already has such
information in its possession; (vi) clarify
that standard protective order
procedures are available for waiver
VerDate Mar<15>2010
12:47 Jan 16, 2013
Jkt 229001
requests; (vii) clarify that carriers are not
required to provide additional
information about unused or spare
capacity as long as they comply with
Parts 32 and 36 of the Commission’s
rules; and (viii) not require carriers to
provide additional information about
corporate operations expenses except in
cases where a carrier seeks a waiver
specifically of the corporate operations
expense cap.
19. We note that the Commission’s
intent in discussing waivers relating to
reductions in USF support was not to
replace the ordinary standard for
granting waivers under § 1.3 of the
Commission’s rules, but rather to
provide guidance in advance to
potential applicants of the
circumstances that would be persuasive
and compelling grounds for grant of a
waiver under that waiver standard to
assist potential applicants in effectively
formulating their waiver petitions.
While we decline to ‘‘discard’’ this
guidance, we modify it in several
respects, and clarify it in others, based
on specific concerns raised by
petitioners.
20. In the USF/ICC Transformation
Order, the Commission stated that ‘‘[w]e
envision granting relief only in those
circumstances in which the petitioner
can demonstrate that the reduction in
existing high-cost support would put
consumers at risk of losing voice
services, with no alternative terrestrial
providers available to provide voice
telephony service using the same or
other technologies that provide the
functionalities required for supported
voice service.’’ This language in the
Order reflected the Commission’s
longstanding historical commitment to
ensuring ubiquitous voice availability
and a recognition that the supported
service today remains voice telephony.
At the same time, we recognize that for
the first time, the Commission has now
established as explicit goals the
preservation and advancement of voice
service and ensuring universal
availability of voice and broadband,
both fixed and mobile, at reasonably
comparable rates to reasonably
comparable services available in urban
areas, while minimizing universal
service contribution burdens on
consumers and businesses. Accordingly,
we now clarify that the Commission
will consider the impact of reforms not
only on voice service alone, but also on
continued operation of a broadbandcapable network and the effect on
consumer rates.
21. Specifically, we envision granting
relief to incumbent telephone
companies only in those circumstances
in which the petitioner can demonstrate
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
that consumers served by such carriers
face a significant risk of losing access to
a broadband-capable network that
provides both voice as well as
broadband today, at reasonably
comparable rates, in areas where there
are no alternative providers of voice or
broadband. To the extent carriers have
already made the investment in such
broadband-capable networks, reductions
in support that would threaten their
ability to continue to maintain and
operate those existing networks offering
service at reasonably comparable rates
in areas where consumers have no
alternatives would be a public policy
concern. A waiver petition claiming that
support reductions are substantial, by
itself, would be insufficient. The
petition must also establish that
consumers will suffer loss of services
with no alternative or that consumers in
the relevant study area would not be
paying reasonably comparable rates to
urban consumers. We emphasize that
support reductions do not necessarily
translate into equivalent rate increases
for consumers. Rather, we expect that
carriers would look for ways to reduce
costs and increase revenues—in
addition to ensuring that consumer rates
are reasonably comparable—in
considering whether to pursue a
petition for waiver.
22. In determining whether to provide
full or partial relief to a waiver
applicant, we also are mindful of the
Commission’s longstanding
commitment to providing support that
is ‘‘sufficient but not excessive.’’ An
important component of the
Commission’s review of whether a
carrier needs additional support is
having an accurate picture of the
financial operations of the waiver
applicant. Information such as financial
statements for the past three fiscal years
and any outstanding loans should be
readily available to any carrier. Such
information is the sort of information
that any company would maintain to
manage its business, and would be part
of any financial showing that a company
would submit as part of any loan
application process. Incumbent carriers
are already required by Commission
rules to comply with the Uniform
System of Accounts specified in part 32,
the affiliate transaction rules specified
in § 32.27, and the cost allocation rules
specified in §§ 64.901 through 64.902,
so providing information regarding
compliance with those rules should not
be burdensome for any such carrier.
Information regarding end user rates
and the services provided to subscribers
likewise should be readily available to
any service provider. In keeping with
E:\FR\FM\17JAR1.SGM
17JAR1
pmangrum on DSK3VPTVN1PROD with
Federal Register / Vol. 78, No. 12 / Thursday, January 17, 2013 / Rules and Regulations
the focus on providing support that is
sufficient but not excessive,
Commission staff have asked for
additional information from waiver
applicants, such as annual
compensation provided to the ten most
highly paid employees, and the size and
nature of payments made to affiliated
companies. Again, this information
should be readily available, and
potential waiver applicants can expedite
review of their requests by including
such information when initially filing
their waiver petitions. Such information
can be relevant to a determination of
whether there are opportunities for
reductions in operating expenses that
would lessen the burden on the Fund,
and also to assessing whether carriers
are complying with our affiliate
transaction rules.
23. We decline the request that
carriers should receive support under
the Commission’s previous rules until
their waiver petitions are resolved. To
the extent immediate or interim relief is
necessary while a waiver petition is
evaluated, such relief can be provided
on a case-by-case basis, and such relief
has been provided in one instance to
date. But we do not typically permit
carriers to excuse themselves from
complying with our rules, even on a
temporary basis, simply by filing a
request for waiver, and we are not
persuaded that such a blanket policy is
warranted in this context when case-bycase relief may be available.
24. Filing Fee and Confidentiality. We
also address the Rural Associations’
specific suggestions regarding the
Commission’s fee for filing a waiver
petition and the confidential treatment
of the waiver process. As an initial
matter, we issue a blanket waiver of the
filing fee for carriers seeking a waiver of
the high-cost loop support (HCLS)
benchmark rule contained in
§ 36.621(a)(5) of our rules. We observe
that § 1.1105 does not currently require
a filing fee in connection with petitions
for waiver of rules contained in part 54
of the Commission’s rules. By codifying
the benchmark rule in part 36 rather
than part 54, the Commission
inadvertently subjected applicants
seeking a waiver of the benchmark rule
to the part 36 filing fee, even though
parties seeking a waiver of other
universal service reforms, such as the
$250 per line cap, are not subject to any
filing fee. We conclude that this
disparity in treatment does not serve the
public interest, and we address the
situation by issuing a blanket waiver of
the fee for parties seeking a waiver of
§ 36.621(a)(5). We also clarify, as the
Rural Associations request, that carriers
filing waiver requests may seek
VerDate Mar<15>2010
12:47 Jan 16, 2013
Jkt 229001
confidential treatment pursuant to the
Commission’s existing rules.
25. Submission of Geographic
Information. Based on our review of the
waiver applications received to date,
and consistent with the Rural
Associations’ request, we reconsider the
language in the USF/ICC
Transformation Order regarding
submission of information regarding the
geographic and other characteristics of
the areas that contribute to its high
costs. Paragraph 542 of the Order stated
that petitions should include, among
other things, the following information:
‘‘Density characteristics of the study
area or other relevant geographic area
including total square miles, subscribers
per square mile, road miles, subscribers
per road mile, mountains, bodies of
water, lack of roads, remoteness,
challenges and costs associated with
transporting fuel, lack of scalability per
community, satellite and backhaul
availability, extreme weather
conditions, challenging topography,
short construction season or any other
characteristics that contribute to the
area’s high costs.’’
26. On reconsideration, we conclude
that this language in paragraph 542
should be viewed as illustrative
examples of factors that could be
relevant in the waiver analysis, to assist
applicants in crafting well formulated
waiver petitions in support of their
requested relief. To the extent
applicants choose to address such
factors in their waiver petitions, we
presume they would be providing
information that is readily available, not
requiring any additional expenditures or
the devotion of substantial staff
resources to compile.
27. Submission of Information
Regarding Spare or Unused Equipment.
On reconsideration, we also modify the
language in paragraph 542 requesting
information regarding spare or unused
equipment. Paragraph 542 of the Order
stated that petitions should include
information regarding accounting for
spare or unused equipment. We observe
that waiver applicants to date have
included a cursory recitation their
waiver requests that they account for
such equipment in accordance with the
Commission’s rules. On reconsideration,
we conclude that it is not necessary for
carriers to reaffirm that they are in
compliance with existing accounting
rules. To the extent there are questions
about such issues, however, the Bureau
still may request such information. At
this time, we cannot conclude that
additional information relating to
unused or spare equipment would be
unnecessary in all instances.
PO 00000
Frm 00015
Fmt 4700
Sfmt 4700
3841
28. Submission of Audits and
Information from State Rate Cases. We
are not persuaded that waiver
applicants should be permitted to file
USAC audits in lieu of their financial
statements. Compliance with the
Commission’s high-cost rules prior to
the USF/ICC Transformation Order is
not likely to be dispositive of whether
there is an ongoing need for more
support than the current rules would
allow. As previously discussed,
financial information is needed to
ensure that support is sufficient, but not
excessive, in granting additional
support through the waiver process. A
USAC audit does not provide such
information and, therefore, is not an
adequate substitute for a carrier’s
financial statements.
29. In contrast, information developed
in intrastate earnings and rate cases is
more likely to be of assistance when
reviewing requests for waiver of support
reductions, and could serve as a
substitute for the submission of
financial statements in some cases,
depending on the specifics of the prior
rate case or earnings review. We
encourage carriers that would like to
rely on such information, rather than
financial statements, to bring it to staff’s
attention when preparing their waiver
requests. We generally encourage staff to
provide, and for potential waiver
applicants to seek, guidance on the
contents of a waiver request, and with
respect to financial reviews by state
commissions, we specifically encourage
applicants to seek staff’s input on the
substitutability of such information for
the company’s financial statements.
30. Information About Corporate
Operations Expenses. We decline to
adopt the suggestion that carriers not
provide information about their
corporate operations expenses unless
they are seeking a waiver specifically
related to the corporate operations
expense cap. As discussed above, a full
understanding of a carrier’s financial
circumstances is necessary when
considering a waiver seeking additional
support in order to ensure that support
overall is sufficient but not excessive.
Corporate operations expenses,
including expenses such as executive
salaries, are relevant to the
determination of overall support levels
in the face of a claim that existing rules
provide inadequate support.
31. Request to Exempt Costs of
Waivers from Calculation of Caps. The
record lacks sufficient detail for us to
evaluate how we would exempt costs
incurred in preparing a waiver request
from the calculation of corporate
operations expenses that would count
toward any caps. Accordingly, we
E:\FR\FM\17JAR1.SGM
17JAR1
3842
Federal Register / Vol. 78, No. 12 / Thursday, January 17, 2013 / Rules and Regulations
decline to allow such exemption at this
time.
32. Grounds for Waiver. Finally, we
also clarify that we will generally not
require a thorough financial review of
carriers that seek a limited waiver of our
rules, such as a temporary waiver of a
deadline for meeting our reporting
requirements or a waiver seeking to
provide broadband that does not meet
our upstream requirements (i.e., 768
kbps upstream instead of 1 Mbps
upstream). In such cases, we would
expect a waiver application would
explain why waiver is warranted under
§ 1.3 of the Commission’s rules.
Likewise, to the extent a carrier seeks a
waiver of the HCLS benchmark rule
based on a showing that there is a
factual error with respect to one or more
input values that results in an
inaccurate calculation of the cap value,
we would not need to conduct a full
review of that carrier’s finances. Rather,
we would undertake a thorough
financial review in those circumstances
where the waiver applicant is not
seeking to correct an error, but is
contending that absent waiver, support
levels would be insufficient for the
carrier to achieve the purposes of
section 254.
IV. Procedural Matters
A. Paperwork Reduction Act
33. This Fifth Order on
Reconsideration contains new
information collection requirements
subject to the Paperwork Reduction Act
of 1995 (PRA), Public Law 104–13. It
has been or 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.
pmangrum on DSK3VPTVN1PROD with
B. Final Regulatory Flexibility Act
Certification
34. 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
VerDate Mar<15>2010
12:47 Jan 16, 2013
Jkt 229001
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).
35. We hereby certify that the rule
revisions in this Fifth Order on
Reconsideration will not have a
significant economic impact on a
substantial number of small entities.
This Order modifies certain of our
reporting requirements. We conclude
that these minor revisions, though they
may possibly have some impact on
some carriers, are not likely to have a
significant economic impact on a
substantial number of small entities.
The Commission will send a copy of
this Order, including this certification,
to the Chief Counsel for Advocacy of the
Small Business Administration. In
addition, the Order (or a summary
thereof) and certification will be
published in the Federal Register.
C. Congressional Review Act
36. The Commission will send a copy
of this Order to Congress and the
Government Accountability Office
pursuant to the Congressional Review
Act.
V. Ordering Clauses
37. Accordingly, it is ordered,
pursuant to the authority contained in
sections 1, 2, 4(i), 201–206, 214, 218–
220, 251, 252, 254, 256, 303(r), 332, and
403 of the Communications Act of 1934,
as amended, and section 706 of the
Telecommunications Act of 1996, 47
U.S.C. 151, 152, 154(i), 201–206, 214,
218–220, 251, 252, 254, 256, 303(r), 332,
403, 1302, and §§ 1.1 and 1.429 of the
Commission’s rules, 47 CFR 1.1, 1.429,
that this Fifth Order on Reconsideration
is adopted, effective February 19, 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.
38. It is further ordered that, pursuant
to the authority contained in section 405
of the Communications Act of 1934, as
amended, 47 U.S.C. 405, and §§ 0.331
and 1.429 of the Commission’s rules, 47
CFR 0.331 and 1.429, that the Petition
for Partial Reconsideration filed by the
Blooston Rural Carriers on December 29,
2011 is denied.
39. It is further ordered that, pursuant
to the authority contained in section 405
of the Communications Act of 1934, as
amended, 47 U.S.C. 405, and §§ 0.331
and 1.429 of the Commission’s rules, 47
CFR 0.331 and 1.429, that the Petition
for Reconsideration filed by NTCH, Inc.
on December 29, 2011 is denied in part
to the extent described herein.
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
40. It is further ordered that, pursuant
to the authority contained in section 405
of the Communications Act of 1934, as
amended, 47 U.S.C. 405, and sections
0.331 and 1.429 of the Commission’s
rules, 47 CFR 0.331 and 47 CFR 1.429,
that the Petition for Reconsideration
filed by General Communications, Inc.
on December 23, 2011 is denied in part
to the extent described herein.
41. It is further ordered that, pursuant
to the authority contained in section 405
of the Communications Act of 1934, as
amended, 47 U.S.C. 405, and §§ 0.331
and 1.429 of the Commission’s rules, 47
CFR 0.331 and 1.429, that the Petition
for Clarification or Partial
Reconsideration filed by Townes
Telecommunications, Inc. on December
29, 2011 is denied.
42. It is further ordered that, pursuant
to the authority contained in section 405
of the Communications Act of 1934, as
amended, 47 U.S.C. 405, and §§ 0.291
and 1.429 of the Commission’s rules, 47
CFR 0.291 and 1.429, the Petition for
Reconsideration of National Exchange
Carrier Association, Inc., Organization
for the Promotion and Advancement of
Small Telecommunications Companies,
and Western Telecommunications
Alliance is granted in part to the extent
described herein, and is denied in part
to the extent described herein.
43. It is further ordered that, pursuant
to the authority contained in section 405
of the Communications Act of 1934, as
amended, 47 U.S.C. 405, and §§ 0.291
and 1.429 of the Commission’s rules, 47
CFR 0.291 and 1.429, the Petition for
Reconsideration of Rock Hill Telephone
Company d/b/a Comporium, Lancaster
Telephone Company d/b/a Comporium,
Fort Mill Telephone Company d/b/a
Comporium, PBT Telecom, Inc. d/b/a
Comporium, and Citizens Telephone
Company d/b/a Comporium is granted
in part to the extent described herein,
and is denied in part to the extent
described herein.
44. It is further ordered that, pursuant
to the authority contained in section 405
of the Communications Act of 1934, as
amended, 47 U.S.C. 405, and §§ 0.291
and 1.429 of the Commission’s rules, 47
CFR 0.291 and 1.429, the Petition for
Reconsideration of United States
Telecom Association is granted in part
to the extent described herein, and is
denied in part to the extent described
herein.
45. It is further ordered that the
Commission shall send a copy of this
Order to Congress and the Government
Accountability Office pursuant to the
Congressional Review Act, see 5 U.S.C.
801(a)(1)(A).
46. It is further ordered, that the
Commission’s Consumer and
E:\FR\FM\17JAR1.SGM
17JAR1
Federal Register / Vol. 78, No. 12 / Thursday, January 17, 2013 / Rules and Regulations
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
this Order, including the Final
Regulatory Flexibility Certification, to
the Chief Counsel for Advocacy of the
Small Business Administration.
List of Subjects in 47 CFR Part 54
Communications common carriers,
reporting and recordkeeping
requirements, telecommunications,
telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Final Rule
For the reasons discussed in the
preamble, the Federal Communications
Commission amends 47 CFR part 54 as
follows:
PART 54—UNIVERSAL SERVICE
1. The authority citation for part 54
continues to read as follows:
■
Authority: Secs. 5, 48 Stat. 1068, as
amended; 47 U.S.C. 155.
Subpart D—Universal Service Support
for High Cost Areas
2. Amend § 54.313 by revising
paragraph (f)(2) to read as follows:
■
audit. A carrier choosing the latter
option must make its audit and related
workpapers and financial information
available upon request by the
Commission, USAC, or the relevant
state commission, relevant authority in
a U.S. Territory, or Tribal government,
as appropriate.
(iii) All other privately held rate-ofreturn carriers must provide either: A
copy of their financial statement which
has been subject to review by an
independent certified public
accountant; or a financial report in a
format comparable to RUS Operating
Report for Telecommunications
Borrowers, with the underlying
information subjected to a review by an
independent certified public accountant
and accompanied by an officer
certification that: The carrier was not
audited in the ordinary course of
business for the preceding fiscal year;
and that the reported data are accurate.
If the carrier elects the second option, it
must make the review and related
workpapers and financial information
available upon request by the
Commission, USAC, or the relevant
state commission, relevant authority in
a U.S. Territory, or Tribal government,
as appropriate.
*
*
*
*
*
[FR Doc. 2013–00556 Filed 1–16–13; 8:45 am]
§ 54.313 Annual reporting requirements
for high-cost recipients.
BILLING CODE 6712–01–P
pmangrum on DSK3VPTVN1PROD with
*
*
*
*
*
(f) * * *
(2) Privately held rate-of-return
carriers only. A full and complete
annual report of the company’s financial
condition and operations as of the end
of the preceding fiscal year.
(i) Recipients of loans from the Rural
Utility Service (RUS) shall provide
copies of their RUS Operating Report for
Telecommunications Borrowers as filed
with the RUS. Such carriers must make
their underlying audit and related
workpapers and financial information
available upon request by the
Commission, USAC, or the relevant
state commission, relevant authority in
a U.S. Territory, or Tribal government,
as appropriate.
(ii) All privately held rate-of-return
carriers that are not recipients of loans
from the RUS and whose financial
statements are audited in the ordinary
course of business must provide either:
A copy of their audited financial
statement; or a financial report in a
format comparable to RUS Operating
Report for Telecommunications
Borrowers, accompanied by a copy of a
management letter issued by the
independent certified public accountant
that performed the company’s financial
VerDate Mar<15>2010
12:47 Jan 16, 2013
Jkt 229001
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
3843
This final rule is effective July
16, 2013. Optional early compliance is
permitted immediately. Petitions for
reconsideration: If you wish to petition
for reconsideration of this rule, your
petition must be received by March 4,
2013.
ADDRESSES: If you submit a petition for
reconsideration of this rule, you should
refer in your petition to the docket
number of this document and submit
your petition to: Administrator,
National Highway Traffic Safety
Administration, 1200 New Jersey
Avenue SE., West Building,
Washington, DC 20590.
The petition will be placed in the
public docket. Anyone is able to search
the electronic form of all documents
received into any of our dockets by the
name of the individual submitting the
document (or signing the document, if
submitted on behalf of an association,
business, labor union, etc.). You may
review DOT’s complete Privacy Act
Statement in the Federal Register
published on April 11, 2000 (Volume
65, Number 70; Pages 19477–78).
FOR FURTHER INFORMATION CONTACT:
Marisol B. Medri, NHTSA Office of
Rulemaking, telephone 202–366–2720,
fax 202–493–2739. For legal issues, you
may call David Jasinski, NHTSA Office
of Chief Counsel, telephone 202–366–
2992, fax 202–366–3820. You may send
mail to these officials at the National
Highway Traffic Safety Administration,
1200 New Jersey Avenue SE., West
Building, Washington, DC 20590.
SUPPLEMENTARY INFORMATION:
DATES:
I. Background
49 CFR Part 571
a. T-Type Spare Tires
[Docket No. NHTSA 2013–0003]
RIN 2127–AK42
Federal Motor Vehicle Safety
Standards; New Pneumatic and Certain
Specialty Tires
National Highway Traffic
Safety Administration (NHTSA),
Department of Transportation (DOT).
ACTION: Final rule.
AGENCY:
This final rule amends
Federal Motor Vehicle Safety Standard
(FMVSS) No. 109, New pneumatic and
certain specialty tires, to change the test
pressure for the physical dimensions
test for T-type tires (temporary use spare
tires) from 52 pounds per square inch
(psi) to 60 psi. This increase in test
pressure for the physical dimensions
test will marginally increase the
stringency of the test and will align
FMVSS No. 109 with international and
voluntary consensus standards.
SUMMARY:
PO 00000
Frm 00017
Fmt 4700
Sfmt 4700
NHTSA regulates ‘‘T-type’’ spare tires
under FMVSS No. 109, New pneumatic
and certain specialty tires. A ‘‘T-type’’
spare tire refers to a type of spare tire
that is manufactured to be used as a
temporary substitute by the consumer
for a conventional tire that failed. For Ttype spare tires, FMVSS No. 109
specifies tire dimensions and laboratory
test requirements for bead unseating
resistance, strength, endurance, and
high speed performance. The standard
also defines tire load ratings and
specifies labeling requirements for the
tires.
NHTSA amended FMVSS No. 109 to
permit the manufacture of T-type (then
known as ‘‘60-psi’’) spare tires in 1977,
describing them as ‘‘differ[ing]
substantially in specification and
construction from conventional tires.
* * * [with] a higher inflation pressure
(60 psi), different dimensions, and a
shorter treadwear life than conventional
E:\FR\FM\17JAR1.SGM
17JAR1
Agencies
[Federal Register Volume 78, Number 12 (Thursday, January 17, 2013)]
[Rules and Regulations]
[Pages 3837-3843]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00556]
=======================================================================
-----------------------------------------------------------------------
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 12-137]
Connect America Fund; A National Broadband Plan for Our Future;
Establishing Just and Reasonable Rates for Local Exchange Carriers;
High-Cost Universal Service Support
AGENCY: Federal Communications Commission.
ACTION: Final rule; petition for reconsideration.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission
(Commission) reconsiders and clarifies certain aspects of the USF/ICC
Transformation Order, in response to various petitions for
reconsideration and/or clarification. We grant in part petitions
related to the financial reporting obligations of eligible
telecommunications carriers (ETCs) that are privately held rate of
return companies. This Order also provides additional guidance and
clarifications regarding the standard and process for requests for
waiver of our universal service reforms.
DATES: Effective February 19, 2013, except for the amendments made to
Sec. 54.313(f)(2)(i) through (iii) in this document, which contain
information collection requirements that are not effective until
approved by the Office of Management and Budget. The Federal
Communications Commission will publish a document in the Federal
Register announcing the effective date for that section.
FOR FURTHER INFORMATION CONTACT: Alexander Minard, Wireline Competition
Bureau, (202) 418-7400 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Fifth
Order on Reconsideration in 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 12-137, adopted on November 13, 2012 and released on
November 16, 2012. 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: https://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0514/FCC-12-52A1.pdf.
I. Introduction
1. In this Order, we reconsider and clarify certain aspects of the
USF/ICC Transformation Order, 76 FR 73830, November 29, 2011, in
response to various petitions for reconsideration and/or clarification.
The USF/ICC Transformation Order represents a careful balancing of
policy goals, equities, and budgetary constraints. This balance was
required in order to advance the fundamental goals of universal service
and intercarrier compensation reform within a defined budget while
simultaneously providing sufficient transitions for stakeholders to
adapt.
2. As a preliminary matter regarding our review of a number of the
specific issues discussed below, we observe that, under Commission
rules, if a petition for reconsideration simply repeats arguments that
were previously considered and rejected in the proceeding, it will not
likely warrant reconsideration.
3. With this standard in mind, we take several limited actions
stemming from reconsideration petitions. Specifically, this Order
grants in part petitions related to the financial reporting obligations
of eligible telecommunications carriers (ETCs) that are privately-held
rate-of-return companies. This Order also provides additional guidance
and clarifications regarding the standard and process for requests for
waiver of our universal service reforms.
II. Financial Reporting Requirements for Privately Held Rate-of-Return
Carriers
4. In the USF/ICC Transformation Order, the Commission required all
privately-held rate of return carriers to provide a report on their
financial condition and operations and provided two options for doing
so: (1) File a copy of the carrier's audited financial statement; or
(2) file a copy of the Department of Agriculture's Rural Utility
Service (RUS) Form 479, a financial reporting requirement for carriers
that borrow money from RUS. The USF/ICC Transformation Order requires
this information to be filed with the Commission, the Universal Service
Administrative Company (USAC), and the relevant state commission,
relevant authority in a U.S. Territory, or Tribal governments, as
appropriate. Only one party commented generally on the NPRM proposal to
require audited financial statements certified by an independent CPA,
and no privately held carrier opposed the proposal at that time.
[[Page 3838]]
5. The record on reconsideration indicates, however, that a number
of rate-of-return carriers do not currently have audited financial
statements. Several petitioners argue that the financial reporting
requirement is unduly burdensome. For example, Comporium urges ``the
Commission to clarify and/or reconsider its decision and revise its
rules by determining that companies with multiple study areas under
common ownership or control may submit basic financial schedules * * *
for regulated operations only, accompanied by an officer affidavit.''
Another party requests that we replace the current financial reporting
requirement with a requirement that ``all privately held rate of return
carriers file a form approved by the FCC that is based on the RUS Form
479.'' Finally, several petitioners argue that the Commission should
allow carriers to file these financial statements confidentially.
6. After reviewing the Petitions for Reconsideration, along with
comments filed in the docket, we conclude that some adjustments in the
financial reporting rule are appropriate for administrative efficiency
and to lessen the potential burden on companies that are not audited in
the ordinary course of business. Therefore, we grant in part the
reconsideration requests and hereby revise new section 54.313(f)(2) of
the Commission's rules.
7. RUS Borrowers. On reconsideration, we require that all privately
held rate-of-return carriers that are RUS borrowers to file their RUS
Operating Report for Telecommunications Borrowers with the Commission,
USAC, and the relevant state commission, relevant authority in a U.S.
Territory, or Tribal governments, as appropriate, as part of their
annual Sec. 54.313 filing. Requiring these ETCs to submit a copy of an
existing RUS Operating Report for Telecommunications Borrowers should
impose negligible burden on them, while helping the Commission monitor
the impact of its reforms on this group of rate-of-return companies. As
one commenter recognizes, one benefit of mandating that RUS borrowers
submit information in the RUS format is that it will provide the
Commission with readily accessible information in a consistent format.
The RUS Operating Report for Telecommunications Borrowers is
consolidated across all study areas and includes all operations, both
regulated and non-regulated, of the borrowing entity. While the RUS
Report itself is not audited, the underlying data are audited, and the
borrower's auditor must review the information being reported to RUS.
We further require that the ETC must make the underlying audit and
related workpapers and financial information available upon request by
the Commission, USAC, or the relevant state commission, relevant
authority in a U.S. Territory, or Tribal governments, as appropriate.
8. Non-RUS Borrowers That Are Audited. For non-RUS borrowers that
are audited in the ordinary course of business, we provide two options.
Such carriers may either: (1) File their audited financial statements;
or (2) provide their financial information in a form consistent with
the RUS Operating Report for Telecommunications Borrowers and
accompanied by a management letter from their auditors. For those
carriers that already are audited in the ordinary course of business--
whether as a condition of a loan from a bank or for other reasons,
producing a copy of that audit report to the Commission should impose
negligible burden. We agree with those parties that suggest it would be
beneficial to the Commission to have all carrier financial reporting
information in a consistent format, but also recognize that requiring
submission of the information in a form similar to the RUS format would
require additional effort for companies that are not RUS borrowers. We
therefore provide the option of submitting the information in a format
comparable to what is required by RUS for its borrowers, but do not
make that mandatory for such filers. We further require that the ETC
must make the underlying audit and related workpapers and financial
information available upon request by the Commission, USAC, or the
relevant state commission, relevant authority in a U.S. Territory, or
Tribal government, as appropriate.
9. Carriers That Are Not Audited. With respect to privately held
rate-of-return companies that are not audited in the ordinary course of
business, we balance the relative costs and benefits of requiring
carriers to comply with a financial reporting requirement that requires
submission of an audited financial statement. We conclude on
reconsideration that our core objectives can be met, while lessening
regulatory burden, by revising new section 54.313(f)(2) to provide two
options for privately held rate-of-return carriers that are not audited
in the ordinary course of business: (1) File a financial statement that
has been subject to review by a CPA or (2) file financial information
in a format consistent with the RUS form. In the latter instance, the
underlying information must be subject to a CPA review, with that
review and related workpapers and financial information to be made
available upon request by the Commission, USAC, or the relevant state
commission, relevant authority in a U.S. Territory, or Tribal
government, as appropriate. For either of these two options, the filing
must be accompanied by an officer certification that: (1) The carrier
is not audited in the ordinary course of business; and (2) the reported
data are accurate.
10. We conclude that requiring the underlying financial information
to be subject to a CPA review, rather than a CPA audit, provides
sufficient assurance that we will obtain a reasonable understanding of
the affected companies' financial picture. A financial review requires
the auditor to make inquiries of management and perform analytical
procedures to determine whether the financial statements conform with
generally accepted accounting principles. An audit requires the auditor
additionally to obtain an understanding of the internal controls
environment for the company, which requires the development of certain
documentation, such as internal controls procedures, that would not
have been prepared but for the audit. Typically an audit will perform
more in-depth testing of individual transactions posted to the general
ledger. Both an audit and a review require the auditor to determine,
however, whether the financial statements prepared by management are
consistent with generally accepted accounting principles.
11. Because a review does not require the auditor to develop a
detailed understanding of the internal controls environment, a CPA
review generally is less costly than a full audit. Requiring a CPA
review of the underlying information and an officer certification
regarding the accuracy of the reported data still provides the
accountability of an independent review, while minimizing the economic
impact on these generally small carriers associated with an audit. In
contrast, we are not persuaded by Comporium's proposal to allow
privately-held rate-of-return carriers to provide the Commission with a
financial report that has not been subject to any form of independent
scrutiny by a CPA. We recognize that some state commissions allow
carriers to file self-prepared financial reports only accompanied by an
officer certification. Given our responsibility as stewards of the USF,
however, we conclude that requiring a CPA review--which requires the
CPA to determine whether any material modifications are required in
order for the financial statements to be in conformity with
[[Page 3839]]
generally accepted accounting principles--is necessary to fulfill our
core objective of ensuring financial accountability by USF recipients.
Based on the record on reconsideration, we therefore conclude that a
review will be sufficient to meet our objectives of providing the
Commission with an accurate picture of the financial condition of these
privately held rate-of-return carriers, without imposing undue burdens
on carriers whose financial statements are not already audited.
12. Fiscal Year 2011 Financial Statements. Once PRA approval is
received for Sec. 54.313(f)(2) as adopted in this Order, we require
any privately held rate-of-return carrier to file with the Commission,
USAC, the relevant state commission, relevant authority in a U.S.
Territory, or Tribal government, as appropriate, pursuant to this rule
within a reasonable time, as follows:
If a carrier receives RUS loans, that carrier must file
its 2011 RUS Operating Report for Telecommunications Borrowers.
If a carrier does not receive RUS loans, but its financial
statements for 2011 have been audited, that carrier must file a copy of
the audited 2011 financial statement, or a financial report in a format
comparable to RUS Operating Report for Telecommunications Borrowers
accompanied by a copy of a management letter issued by the independent
certified public accountant that performed the company's financial
audit, with the Commission, USAC, the relevant state commission,
relevant authority in a U.S. Territory, or Tribal government, as
appropriate.
If a carrier does not receive RUS loans, but its financial
statements for 2011 have been subject to review by an independent
certified public accountant, that carrier must file a copy of their
reviewed 2011 financial statement, or a financial report in a format
comparable to RUS Operating Report for Telecommunications Borrowers
with the underlying information subjected to a review by an independent
certified public accountant and accompanied by an officer certification
the carrier was not audited in the ordinary course of business for the
preceding fiscal year and that the reported data are accurate.
13. We find that there is not a significant additional burden for
ETCs to file such information because these financial statements
already exist. We determine that receiving some 2011 financial
statements will assist the Commission and states with verifying whether
these carriers are efficiently and appropriately using high-cost
support for its intended purposes. Finally, we expect all privately
held rate-of-return carriers to file on July 1, 2013, pursuant to this
rule and subject to PRA approval, Fiscal Year 2012 financial
statements.
14. Submission of Consolidated Information. We clarify that
privately held rate-of-return carriers are not required to submit the
financial information on a study area basis. As pointed out in the
record on reconsideration, audits of RUS borrowers are not done on a
study area basis, and the RUS Operating Report for Telecommunications
Borrowers is submitted by the borrowing entity, which could encompass
multiple study areas. Several petitioners note that many companies with
multiple study areas under common ownership or control prepare a
consolidated audit report, which minimizes audit expenses. The
Commission has already concluded that holding company level information
for RUS borrowers is acceptable, when it concluded that such borrowers
could submit the RUS Operating Report for Telecommunications Borrowers
to meet the financial reporting requirement. Nothing in the codified
rule requires that financial reporting be done on a study area basis.
In fact, imposing a requirement that privately held rate-of-return
carriers must be audited on a study-area basis would have an
unreasonably disparate impact on the respective burdens associated with
this reporting requirement for those privately held carriers that are
non-RUS borrowers compared to RUS borrowers. We clarify that the
language in paragraph 599 of the Order that directs non-RUS borrowers
to submit ``financial information as kept in accordance with Part 32''
was not intended to require financial reporting by study area, but
rather was focusing on the fact that companies are already required to
maintain financial information by study area pursuant to existing
Commission requirements. In response to the petitions for
reconsideration and/or clarification, we clarify that the Commission
did not intend to require financial information broken out by study
areas for non-RUS borrowers, and such companies under common ownership
or control may file financial reports on a consolidated basis.
15. Requirement That Financial Disclosures Be Publicly Available.
In the USF/ICC Transformation Order, we stated that the financial
reporting information required to be filed by ETCS would be made
publicly available. Some petitioners encourage the Commission to
revisit that requirement. Upon reconsideration, we conclude that in
some instances there could be a potential for competitors to use the
submitted financial data of private rural rate-of-return carriers in an
anti-competitive manner, and therefore, as several commenters
suggested, we will allow privately held ETCs to file the financial data
pursuant to Sec. 54.313(f)(2) of the Commission's rules subject to a
Protective Order.
16. As we stated in the USF/ICC Transformation Order, recipients of
high-cost and/or Connect America support receive extensive public
funding, and therefore the public has a legitimate interest in being
able to verify the efficient use of those funds. Moreover, as we
stated, by making this financial information public, the Commission
will be assisted in its oversight duties by public interest watchdogs,
consumer advocates, and others who seek to ensure that recipients of
support receive funding that is sufficient, but not excessive. On the
other hand, we agree that, for example, small ETCs serving only one
study area could face competitive harm if their financial data are made
available to an overlapping or neighboring competitor. Where an ETC
serving a large geographic area across multiple states files a
consolidated financial statement, it is not possible to determine the
revenues and, thus, profits associated with a particular study area.
However, where a small ETC serves only one study area, all reported
revenues and profits are attributable to that one study area, thus
making it easier for competitors to craft business plans that
capitalize on their knowledge of the small ETC's reported finances.
17. We conclude that the public interest would best be served by
making the private financial data being requested from privately-held
rate of return carriers available only subject to the provisions of the
Protective Order, and we delegate authority to the Wireline Competition
Bureau to adopt such an order consistent with this decision. In
particular, as specified in more detail in the Protective Order, we
restrict availability of this material as follows: (1) In the case of
commercial entities having a competitive or business relationship with
the company whose confidential information it seeks, to In-House
Counsel not involved in competitive decision-making, and to their
Outside Counsel of Record, their Outside Consultants and experts whom
they retain to assist them in this and related proceedings, and
employees of such Outside Counsel and Outside Consultants; (2) to
employees and representatives of commercial entities having no
competitive or business
[[Page 3840]]
relationship with the company whose confidential information it seeks;
and (3) to employees and representatives of non-commercial entities
having no competitive or business relationship with the company whose
confidential information it seeks. In sum, we recognize the need to
balance the public's legitimate interest in being able to verify the
efficient use of universal service high-cost support with the potential
competitive harm of such financial data being publicly available. We
conclude that adopting such procedures in a Protective Order will give
appropriate access to the interested members of the public while
protecting especially competitively sensitive information from improper
disclosure, and that disclosure pursuant to the Protective Order
thereby serves the public interest.
III. Waiver Standard For USF Reforms
18. The National Exchange Carrier Association, Inc., the
Organization for the Promotion and Advancement of Small
Telecommunications Companies, and the Western Telecommunications
Alliance (Rural Associations) seek reconsideration of the USF waiver
standard articulated in the USF/ICC Transformation Order and ask that
the Commission ``discard the various hurdles specified in the Order and
instead simply apply the `good cause' standard applicable to waiver
requests generally under Sec. 1.3 of the rules.'' The Rural
Associations request that a carrier continue to receive support
pursuant to the prior, no-longer-in-effect rules while the carrier's
petition for waiver of any new rule is pending. They also argue that
the Commission should make the waiver process ``less burdensome'' and
``more equitable and attainable'' for small companies. In particular,
the Rural Associations ask that the Commission: (i) Waive the filing
fee applicable to USF-related waivers; (ii) exclude costs incurred in
preparing a waiver request from corporate operations expenses counted
toward the caps; (iii) permit carriers to submit information from
intrastate earnings reviews and rate cases or Universal Service
Administrative Company (USAC) audits in lieu of the financial
information the Commission identified in the USF/ICC Transformation
Order; (iv) require carriers to only submit information that relates to
the use of supported plant; (v) not require carriers to provide
geographic data or data about end user rate plans to the extent the
Commission already has such information in its possession; (vi) clarify
that standard protective order procedures are available for waiver
requests; (vii) clarify that carriers are not required to provide
additional information about unused or spare capacity as long as they
comply with Parts 32 and 36 of the Commission's rules; and (viii) not
require carriers to provide additional information about corporate
operations expenses except in cases where a carrier seeks a waiver
specifically of the corporate operations expense cap.
19. We note that the Commission's intent in discussing waivers
relating to reductions in USF support was not to replace the ordinary
standard for granting waivers under Sec. 1.3 of the Commission's
rules, but rather to provide guidance in advance to potential
applicants of the circumstances that would be persuasive and compelling
grounds for grant of a waiver under that waiver standard to assist
potential applicants in effectively formulating their waiver petitions.
While we decline to ``discard'' this guidance, we modify it in several
respects, and clarify it in others, based on specific concerns raised
by petitioners.
20. In the USF/ICC Transformation Order, the Commission stated that
``[w]e envision granting relief only in those circumstances in which
the petitioner can demonstrate that the reduction in existing high-cost
support would put consumers at risk of losing voice services, with no
alternative terrestrial providers available to provide voice telephony
service using the same or other technologies that provide the
functionalities required for supported voice service.'' This language
in the Order reflected the Commission's longstanding historical
commitment to ensuring ubiquitous voice availability and a recognition
that the supported service today remains voice telephony. At the same
time, we recognize that for the first time, the Commission has now
established as explicit goals the preservation and advancement of voice
service and ensuring universal availability of voice and broadband,
both fixed and mobile, at reasonably comparable rates to reasonably
comparable services available in urban areas, while minimizing
universal service contribution burdens on consumers and businesses.
Accordingly, we now clarify that the Commission will consider the
impact of reforms not only on voice service alone, but also on
continued operation of a broadband-capable network and the effect on
consumer rates.
21. Specifically, we envision granting relief to incumbent
telephone companies only in those circumstances in which the petitioner
can demonstrate that consumers served by such carriers face a
significant risk of losing access to a broadband-capable network that
provides both voice as well as broadband today, at reasonably
comparable rates, in areas where there are no alternative providers of
voice or broadband. To the extent carriers have already made the
investment in such broadband-capable networks, reductions in support
that would threaten their ability to continue to maintain and operate
those existing networks offering service at reasonably comparable rates
in areas where consumers have no alternatives would be a public policy
concern. A waiver petition claiming that support reductions are
substantial, by itself, would be insufficient. The petition must also
establish that consumers will suffer loss of services with no
alternative or that consumers in the relevant study area would not be
paying reasonably comparable rates to urban consumers. We emphasize
that support reductions do not necessarily translate into equivalent
rate increases for consumers. Rather, we expect that carriers would
look for ways to reduce costs and increase revenues--in addition to
ensuring that consumer rates are reasonably comparable--in considering
whether to pursue a petition for waiver.
22. In determining whether to provide full or partial relief to a
waiver applicant, we also are mindful of the Commission's longstanding
commitment to providing support that is ``sufficient but not
excessive.'' An important component of the Commission's review of
whether a carrier needs additional support is having an accurate
picture of the financial operations of the waiver applicant.
Information such as financial statements for the past three fiscal
years and any outstanding loans should be readily available to any
carrier. Such information is the sort of information that any company
would maintain to manage its business, and would be part of any
financial showing that a company would submit as part of any loan
application process. Incumbent carriers are already required by
Commission rules to comply with the Uniform System of Accounts
specified in part 32, the affiliate transaction rules specified in
Sec. 32.27, and the cost allocation rules specified in Sec. Sec.
64.901 through 64.902, so providing information regarding compliance
with those rules should not be burdensome for any such carrier.
Information regarding end user rates and the services provided to
subscribers likewise should be readily available to any service
provider. In keeping with
[[Page 3841]]
the focus on providing support that is sufficient but not excessive,
Commission staff have asked for additional information from waiver
applicants, such as annual compensation provided to the ten most highly
paid employees, and the size and nature of payments made to affiliated
companies. Again, this information should be readily available, and
potential waiver applicants can expedite review of their requests by
including such information when initially filing their waiver
petitions. Such information can be relevant to a determination of
whether there are opportunities for reductions in operating expenses
that would lessen the burden on the Fund, and also to assessing whether
carriers are complying with our affiliate transaction rules.
23. We decline the request that carriers should receive support
under the Commission's previous rules until their waiver petitions are
resolved. To the extent immediate or interim relief is necessary while
a waiver petition is evaluated, such relief can be provided on a case-
by-case basis, and such relief has been provided in one instance to
date. But we do not typically permit carriers to excuse themselves from
complying with our rules, even on a temporary basis, simply by filing a
request for waiver, and we are not persuaded that such a blanket policy
is warranted in this context when case-by-case relief may be available.
24. Filing Fee and Confidentiality. We also address the Rural
Associations' specific suggestions regarding the Commission's fee for
filing a waiver petition and the confidential treatment of the waiver
process. As an initial matter, we issue a blanket waiver of the filing
fee for carriers seeking a waiver of the high-cost loop support (HCLS)
benchmark rule contained in Sec. 36.621(a)(5) of our rules. We observe
that Sec. 1.1105 does not currently require a filing fee in connection
with petitions for waiver of rules contained in part 54 of the
Commission's rules. By codifying the benchmark rule in part 36 rather
than part 54, the Commission inadvertently subjected applicants seeking
a waiver of the benchmark rule to the part 36 filing fee, even though
parties seeking a waiver of other universal service reforms, such as
the $250 per line cap, are not subject to any filing fee. We conclude
that this disparity in treatment does not serve the public interest,
and we address the situation by issuing a blanket waiver of the fee for
parties seeking a waiver of Sec. 36.621(a)(5). We also clarify, as the
Rural Associations request, that carriers filing waiver requests may
seek confidential treatment pursuant to the Commission's existing
rules.
25. Submission of Geographic Information. Based on our review of
the waiver applications received to date, and consistent with the Rural
Associations' request, we reconsider the language in the USF/ICC
Transformation Order regarding submission of information regarding the
geographic and other characteristics of the areas that contribute to
its high costs. Paragraph 542 of the Order stated that petitions should
include, among other things, the following information: ``Density
characteristics of the study area or other relevant geographic area
including total square miles, subscribers per square mile, road miles,
subscribers per road mile, mountains, bodies of water, lack of roads,
remoteness, challenges and costs associated with transporting fuel,
lack of scalability per community, satellite and backhaul availability,
extreme weather conditions, challenging topography, short construction
season or any other characteristics that contribute to the area's high
costs.''
26. On reconsideration, we conclude that this language in paragraph
542 should be viewed as illustrative examples of factors that could be
relevant in the waiver analysis, to assist applicants in crafting well
formulated waiver petitions in support of their requested relief. To
the extent applicants choose to address such factors in their waiver
petitions, we presume they would be providing information that is
readily available, not requiring any additional expenditures or the
devotion of substantial staff resources to compile.
27. Submission of Information Regarding Spare or Unused Equipment.
On reconsideration, we also modify the language in paragraph 542
requesting information regarding spare or unused equipment. Paragraph
542 of the Order stated that petitions should include information
regarding accounting for spare or unused equipment. We observe that
waiver applicants to date have included a cursory recitation their
waiver requests that they account for such equipment in accordance with
the Commission's rules. On reconsideration, we conclude that it is not
necessary for carriers to reaffirm that they are in compliance with
existing accounting rules. To the extent there are questions about such
issues, however, the Bureau still may request such information. At this
time, we cannot conclude that additional information relating to unused
or spare equipment would be unnecessary in all instances.
28. Submission of Audits and Information from State Rate Cases. We
are not persuaded that waiver applicants should be permitted to file
USAC audits in lieu of their financial statements. Compliance with the
Commission's high-cost rules prior to the USF/ICC Transformation Order
is not likely to be dispositive of whether there is an ongoing need for
more support than the current rules would allow. As previously
discussed, financial information is needed to ensure that support is
sufficient, but not excessive, in granting additional support through
the waiver process. A USAC audit does not provide such information and,
therefore, is not an adequate substitute for a carrier's financial
statements.
29. In contrast, information developed in intrastate earnings and
rate cases is more likely to be of assistance when reviewing requests
for waiver of support reductions, and could serve as a substitute for
the submission of financial statements in some cases, depending on the
specifics of the prior rate case or earnings review. We encourage
carriers that would like to rely on such information, rather than
financial statements, to bring it to staff's attention when preparing
their waiver requests. We generally encourage staff to provide, and for
potential waiver applicants to seek, guidance on the contents of a
waiver request, and with respect to financial reviews by state
commissions, we specifically encourage applicants to seek staff's input
on the substitutability of such information for the company's financial
statements.
30. Information About Corporate Operations Expenses. We decline to
adopt the suggestion that carriers not provide information about their
corporate operations expenses unless they are seeking a waiver
specifically related to the corporate operations expense cap. As
discussed above, a full understanding of a carrier's financial
circumstances is necessary when considering a waiver seeking additional
support in order to ensure that support overall is sufficient but not
excessive. Corporate operations expenses, including expenses such as
executive salaries, are relevant to the determination of overall
support levels in the face of a claim that existing rules provide
inadequate support.
31. Request to Exempt Costs of Waivers from Calculation of Caps.
The record lacks sufficient detail for us to evaluate how we would
exempt costs incurred in preparing a waiver request from the
calculation of corporate operations expenses that would count toward
any caps. Accordingly, we
[[Page 3842]]
decline to allow such exemption at this time.
32. Grounds for Waiver. Finally, we also clarify that we will
generally not require a thorough financial review of carriers that seek
a limited waiver of our rules, such as a temporary waiver of a deadline
for meeting our reporting requirements or a waiver seeking to provide
broadband that does not meet our upstream requirements (i.e., 768 kbps
upstream instead of 1 Mbps upstream). In such cases, we would expect a
waiver application would explain why waiver is warranted under Sec.
1.3 of the Commission's rules. Likewise, to the extent a carrier seeks
a waiver of the HCLS benchmark rule based on a showing that there is a
factual error with respect to one or more input values that results in
an inaccurate calculation of the cap value, we would not need to
conduct a full review of that carrier's finances. Rather, we would
undertake a thorough financial review in those circumstances where the
waiver applicant is not seeking to correct an error, but is contending
that absent waiver, support levels would be insufficient for the
carrier to achieve the purposes of section 254.
IV. Procedural Matters
A. Paperwork Reduction Act
33. This Fifth Order on Reconsideration contains new information
collection requirements subject to the Paperwork Reduction Act of 1995
(PRA), Public Law 104-13. It has been or 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.
B. Final Regulatory Flexibility Act Certification
34. 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).
35. We hereby certify that the rule revisions in this Fifth Order
on Reconsideration will not have a significant economic impact on a
substantial number of small entities. This Order modifies certain of
our reporting requirements. We conclude that these minor revisions,
though they may possibly have some impact on some carriers, are not
likely to have a significant economic impact on a substantial number of
small entities. The Commission will send a copy of this Order,
including this certification, to the Chief Counsel for Advocacy of the
Small Business Administration. In addition, the Order (or a summary
thereof) and certification will be published in the Federal Register.
C. Congressional Review Act
36. The Commission will send a copy of this Order to Congress and
the Government Accountability Office pursuant to the Congressional
Review Act.
V. Ordering Clauses
37. Accordingly, it is ordered, pursuant to the authority contained
in sections 1, 2, 4(i), 201-206, 214, 218-220, 251, 252, 254, 256,
303(r), 332, and 403 of the Communications Act of 1934, as amended, and
section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151, 152,
154(i), 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403,
1302, and Sec. Sec. 1.1 and 1.429 of the Commission's rules, 47 CFR
1.1, 1.429, that this Fifth Order on Reconsideration is adopted,
effective February 19, 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.
38. It is further ordered that, pursuant to the authority contained
in section 405 of the Communications Act of 1934, as amended, 47 U.S.C.
405, and Sec. Sec. 0.331 and 1.429 of the Commission's rules, 47 CFR
0.331 and 1.429, that the Petition for Partial Reconsideration filed by
the Blooston Rural Carriers on December 29, 2011 is denied.
39. It is further ordered that, pursuant to the authority contained
in section 405 of the Communications Act of 1934, as amended, 47 U.S.C.
405, and Sec. Sec. 0.331 and 1.429 of the Commission's rules, 47 CFR
0.331 and 1.429, that the Petition for Reconsideration filed by NTCH,
Inc. on December 29, 2011 is denied in part to the extent described
herein.
40. It is further ordered that, pursuant to the authority contained
in section 405 of the Communications Act of 1934, as amended, 47 U.S.C.
405, and sections 0.331 and 1.429 of the Commission's rules, 47 CFR
0.331 and 47 CFR 1.429, that the Petition for Reconsideration filed by
General Communications, Inc. on December 23, 2011 is denied in part to
the extent described herein.
41. It is further ordered that, pursuant to the authority contained
in section 405 of the Communications Act of 1934, as amended, 47 U.S.C.
405, and Sec. Sec. 0.331 and 1.429 of the Commission's rules, 47 CFR
0.331 and 1.429, that the Petition for Clarification or Partial
Reconsideration filed by Townes Telecommunications, Inc. on December
29, 2011 is denied.
42. It is further ordered that, pursuant to the authority contained
in section 405 of the Communications Act of 1934, as amended, 47 U.S.C.
405, and Sec. Sec. 0.291 and 1.429 of the Commission's rules, 47 CFR
0.291 and 1.429, the Petition for Reconsideration of National Exchange
Carrier Association, Inc., Organization for the Promotion and
Advancement of Small Telecommunications Companies, and Western
Telecommunications Alliance is granted in part to the extent described
herein, and is denied in part to the extent described herein.
43. It is further ordered that, pursuant to the authority contained
in section 405 of the Communications Act of 1934, as amended, 47 U.S.C.
405, and Sec. Sec. 0.291 and 1.429 of the Commission's rules, 47 CFR
0.291 and 1.429, the Petition for Reconsideration of Rock Hill
Telephone Company d/b/a Comporium, Lancaster Telephone Company d/b/a
Comporium, Fort Mill Telephone Company d/b/a Comporium, PBT Telecom,
Inc. d/b/a Comporium, and Citizens Telephone Company d/b/a Comporium is
granted in part to the extent described herein, and is denied in part
to the extent described herein.
44. It is further ordered that, pursuant to the authority contained
in section 405 of the Communications Act of 1934, as amended, 47 U.S.C.
405, and Sec. Sec. 0.291 and 1.429 of the Commission's rules, 47 CFR
0.291 and 1.429, the Petition for Reconsideration of United States
Telecom Association is granted in part to the extent described herein,
and is denied in part to the extent described herein.
45. It is further ordered that the Commission shall send a copy of
this Order to Congress and the Government Accountability Office
pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
46. It is further ordered, that the Commission's Consumer and
[[Page 3843]]
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Order, including the Final Regulatory Flexibility
Certification, to the Chief Counsel for Advocacy of the Small Business
Administration.
List of Subjects in 47 CFR Part 54
Communications common carriers, reporting and recordkeeping
requirements, telecommunications, telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Final Rule
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 54 as follows:
PART 54--UNIVERSAL SERVICE
0
1. The authority citation for part 54 continues to read as follows:
Authority: Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.
Subpart D--Universal Service Support for High Cost Areas
0
2. Amend Sec. 54.313 by revising paragraph (f)(2) to read as follows:
Sec. 54.313 Annual reporting requirements for high-cost recipients.
* * * * *
(f) * * *
(2) Privately held rate-of-return carriers only. A full and
complete annual report of the company's financial condition and
operations as of the end of the preceding fiscal year.
(i) Recipients of loans from the Rural Utility Service (RUS) shall
provide copies of their RUS Operating Report for Telecommunications
Borrowers as filed with the RUS. Such carriers must make their
underlying audit and related workpapers and financial information
available upon request by the Commission, USAC, or the relevant state
commission, relevant authority in a U.S. Territory, or Tribal
government, as appropriate.
(ii) All privately held rate-of-return carriers that are not
recipients of loans from the RUS and whose financial statements are
audited in the ordinary course of business must provide either: A copy
of their audited financial statement; or a financial report in a format
comparable to RUS Operating Report for Telecommunications Borrowers,
accompanied by a copy of a management letter issued by the independent
certified public accountant that performed the company's financial
audit. A carrier choosing the latter option must make its audit and
related workpapers and financial information available upon request by
the Commission, USAC, or the relevant state commission, relevant
authority in a U.S. Territory, or Tribal government, as appropriate.
(iii) All other privately held rate-of-return carriers must provide
either: A copy of their financial statement which has been subject to
review by an independent certified public accountant; or a financial
report in a format comparable to RUS Operating Report for
Telecommunications Borrowers, with the underlying information subjected
to a review by an independent certified public accountant and
accompanied by an officer certification that: The carrier was not
audited in the ordinary course of business for the preceding fiscal
year; and that the reported data are accurate. If the carrier elects
the second option, it must make the review and related workpapers and
financial information available upon request by the Commission, USAC,
or the relevant state commission, relevant authority in a U.S.
Territory, or Tribal government, as appropriate.
* * * * *
[FR Doc. 2013-00556 Filed 1-16-13; 8:45 am]
BILLING CODE 6712-01-P