Connect America Fund; High-Cost Universal Service Support, 16808-16816 [2013-06322]
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16808
Federal Register / Vol. 78, No. 53 / Tuesday, March 19, 2013 / Rules and Regulations
§ 10.270 Subscribers’ right to terminate
subscription.
If a CMS provider that has elected to
provide WEA Alert Messages in whole
or in part thereafter chooses to cease
providing such alerts, either in whole or
in part, its subscribers may terminate
their subscription without penalty or
early termination fee.
■ 14. Section 10.280 is amended by
revising the section heading to read as
follows:
§ 10.280 Subscribers’ right to opt out of
WEA notifications.
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15. Section 10.320 is amended by
revising paragraphs (c) and (f)(1) to read
as follows:
■
§ 10.320 Provider alert gateway
requirements.
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(c) Security. The CMS provider
gateway must support standardized IPbased security mechanisms such as a
firewall, and support the defined WEA
‘‘C’’ interface and associated protocols
between the Federal alert gateway and
the CMS provider gateway.
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(f) * * *
(1) The information must be provided
30 days in advance of the date when the
CMS provider begins to transmit WEA
alerts.
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■ 16. Section 10.340 is revised to read
as follows:
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§ 10.340 Digital television transmission
towers retransmission capability.
Licensees and permittees of
noncommercial educational broadcast
television stations (NCE) or public
broadcast television stations (to the
extent such stations fall within the
scope of those terms as defined in
section 397(6) of the Communications
Act of 1934 (47 U.S.C. 397(6))) are
required to install on, or as part of, any
broadcast television digital signal
transmitter, equipment to enable the
distribution of geographically targeted
alerts by commercial mobile service
providers that have elected to transmit
WEA alerts. Such equipment and
technologies must have the capability of
allowing licensees and permittees of
NCE and public broadcast television
stations to receive WEA alerts from the
Alert Gateway over an alternate, secure
interface and then to transmit such
WEA alerts to CMS Provider Gateways
of participating CMS providers. This
equipment must be installed no later
than eighteen months from the date of
receipt of funding permitted under
section 606(b) of the WARN Act or 18
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months from the effective date of these
rules, whichever is later.
■ 17. Section 10.350 is amended by
revising the section heading,
introductory text, and paragraphs (a)
introductory text, (a)(2), (a)(4) and (a)(5)
to read as follows:
§ 10.350
WEA Testing requirements.
This section specifies the testing that
will be required, no later than the date
of deployment of the WEA, of WEA
components.
(a) Required monthly tests. Testing of
the WEA from the Federal Alert
Gateway to each Participating CMS
Provider’s infrastructure shall be
conducted monthly.
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(2) Participating CMS Providers shall
schedule the distribution of the RMT to
their WEA coverage area over a 24 hour
period commencing upon receipt of the
RMT at the CMS Provider Gateway.
Participating CMS Providers shall
determine the method to distribute the
RMTs, and may schedule over the 24
hour period the delivery of RMTs over
geographic subsets of their coverage area
to manage traffic loads and to
accommodate maintenance windows.
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(4) The RMT shall be initiated only by
the Federal Alert Gateway
Administrator using a defined test
message. Real event codes or alert
messages shall not be used for the WEA
RMT message.
(5) A Participating CMS Provider shall
distribute an RMT within its WEA
coverage area within 24 hours of receipt
by the CMS Provider Gateway unless
pre-empted by actual alert traffic or
unable due to an unforeseen condition.
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■ 18. Section 10.420 is revised to read
as follows:
§ 10.420
Character limit.
A WEA Alert Message processed by a
Participating CMS Provider must not
exceed 90 characters of alphanumeric
text.
■ 20. Section 10.440 is revised to read
as follows:
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Embedded reference prohibition.
A WEA Alert Message processed by a
Participating CMS Provider must not
include an embedded Uniform Resource
Locator (URL), which is a reference (an
address) to a resource on the Internet, or
an embedded telephone number. This
prohibition does not apply to
Presidential Alerts.
■ 21. Section 10.470 is revised to read
as follows:
§ 10.470
Roaming.
When, pursuant to a roaming
agreement (see § 20.12 of this chapter),
a subscriber receives services from a
roamed-upon network of a Participating
CMS Provider, the Participating CMS
Provider must support WEA alerts to the
roaming subscriber to the extent the
subscriber’s mobile device is configured
for and technically capable of receiving
WEA alerts.
■ 22. Section 10.500 is amended by
revising the introductory text to read as
follows:
§ 10.500
General requirements.
WEA mobile device functionality is
dependent on the capabilities of a
Participating CMS Provider’s delivery
technologies. Mobile devices are
required to perform the following
functions:
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[FR Doc. 2013–06296 Filed 3–18–13; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 54
[WC Docket Nos. 10–90, 05–337; FCC 13–
16]
Connect America Fund; High-Cost
Universal Service Support
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
Message elements.
A WEA Alert Message processed by a
Participating CMS Provider shall
include five mandatory CAP elements—
Event Type; Area Affected;
Recommended Action; Expiration Time
(with time zone); and Sending Agency.
This requirement does not apply to
Presidential Alerts.
■ 19. Section 10.430 is revised to read
as follows:
§ 10.430
§ 10.440
In this document, the Federal
Communications Commission
(Commission) addresses several issues
related to changes made to high-cost
universal service support for rate-ofreturn carriers in the USF/ICC
Transformation Order, including
granting in part requests to modify the
high cost loop support (HCLS)
benchmarks.
SUMMARY:
DATES:
Effective March 19, 2013.
FOR FURTHER INFORMATION CONTACT:
Heidi Lankau, Wireline Competition
Bureau, (202) 418–2876 or TTY: (202)
418–0484.
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Federal Register / Vol. 78, No. 53 / Tuesday, March 19, 2013 / Rules and Regulations
This is a
summary of the Commission’s Sixth
Order on Reconsideration and
Memorandum Opinion and Order in
WC Docket Nos. 10–90, 05–337; FCC
13–16, adopted on January 31, 2013 and
released on February 27, 2013. The full
text of this document is available for
public inspection during regular
business hours in the FCC Reference
Center, Room CY–A257, 445 12th Street
SW., Washington, DC 20554. Or at the
following Internet address: https://
transition.fcc.gov/Daily_Releases/
Daily_Business/2013/db0227/FCC-1316A1.pdf
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SUPPLEMENTARY INFORMATION:
I. Introduction
1. In the USF/ICC Transformation
Order, 76 FR 73830, November 29, 2011,
the Commission comprehensively
reformed universal service and
intercarrier compensation, adopting
fiscally responsible, incentive-based
policies to preserve and advance voiceand broadband-capable networks while
requiring accountability from
companies receiving support and
ensuring fairness for consumers who
pay into the universal service fund.
Modernizing these systems, the
Commission concluded, was critical to
meet the universal service challenge of
our time: ensuring consumers have
access to high-speed Internet access as
well as voice service. As part of this
undertaking, the Commission reformed
legacy high-cost universal service
support mechanisms for rate-of-return
carriers. Rate-of-return carriers serve
fewer than five percent of U.S. access
lines, but operate in many of the
country’s most difficult areas to serve.
Total universal service support for such
carriers was approaching $2 billion
annually—more than 40 percent of the
Commission’s $4.5 billion overall
budget for the reformed high-cost
program. The Commission’s reforms for
rate-of-return carriers begin the
transition toward a more incentivebased form of regulation to encourage
efficient operation and to support the
widest possible availability of
broadband.
2. In this Order, we address several
issues related to the changes made to
high-cost universal service support for
rate-of-return carriers in the USF/ICC
Transformation Order. First, we address
a number of issues raised in petitions
for reconsideration or clarification of the
benchmarking rule adopted in the USF/
ICC Transformation Order. That rule
establishes reasonable limits on capital
and operating expenditures eligible for
high-cost universal service support for
rate-of-return carriers, providing better
incentives for carriers to invest
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prudently and operate efficiently than
the prior support mechanism, while
providing additional support for carriers
below their caps to extend broadband to
rural consumers. (Rate-of-return carriers
previously faced no limits on their
overall spending, and received 100
percent reimbursement of loop costs
above a certain level, creating a ‘‘raceto-the-top’’ in spending). We reconsider
one aspect of the benchmark rule, but
decline to reconsider adoption of the
rule in general. We then consider a
number of applications for review of the
Wireline Competition Bureau’s
(Bureau’s) HCLS Benchmarks
Implementation Order, 77 FR 30411,
May 23, 2012, which implemented the
benchmarking rule for purposes of
calculating high-cost loop support
(HCLS), and modify certain aspects of
the Bureau’s order. In addition, we
decline requests to reconsider the
monthly per-line cap of $250 in total
high-cost federal universal service
support for all telephone companies,
and we reaffirm the extension of the
corporate operations expense cap to
interstate common line support (ICLS).
Finally, we take the opportunity to
address requests from certain rate-ofreturn carriers that the Commission
slow our implementation of other
aspects of the USF/ICC Transformation
Order, emphasizing the importance of
continuing with the implementation of
reform, but reiterating our commitment
to a data-driven process.
3. As we have previously noted, 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. We observe that,
under Commission rules, if a petition
for reconsideration simply repeats
arguments that were previously fully
considered and rejected in the
proceeding, it will not likely warrant
reconsideration. This standard informs
our analysis below.
II. Benchmarking Rule
1. Petitions for Reconsideration
4. We begin by addressing petitions
for reconsideration of the benchmarking
rule. For the reasons set forth below, we
reconsider the Commission’s original
rule insofar as it requires the Bureau to
rerun the benchmark regression
annually and direct the Bureau to
consider whether running the regression
analyses less frequently will better serve
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the purposes advanced by the
benchmarking rule. We deny, however,
petitions for reconsideration filed by the
National Exchange Carrier Association,
Inc. (NECA), Organization for the
Promotion and Advancement of Small
Telecommunications Companies
(OPASTCO), and Western
Telecommunications Alliance (WTA),
(jointly, the Rural Associations) and
Accipiter Communications Inc.
(Accipiter) to the extent they request
that the Commission reconsider its
benchmarking rule. We also clarify how
support will be redistributed under that
rule.
a. Rural Associations’ Petition
5. The Rural Associations ask the
Commission to reconsider several
aspects of its limitations on
reimbursable capital and operating
expenses. We address certain of these
arguments here.
6. First, the Rural Associations argue
that the Commission’s decision to use
regression analyses to limit
reimbursable capital costs and operating
expenses in the USF/ICC
Transformation Order was ‘‘premature
and improper,’’ and that the
Commission should instead have stated
that it would ‘‘examine a regression
analysis approach * * * subject to
adequate notice and comment.’’ They
claim that the Commission’s decision to
use regression analyses to develop the
benchmarks ‘‘leaves no room to argue
that other approaches might be used in
whole or in part as a substitute to
achieve the kinds of constraints sought
by the Commission,’’ such as limiting
new investment based on depreciation
of existing plant, as the Associations
previously proposed.
7. Contrary to the Rural Associations’
allegations, the Commission provided
ample opportunities for parties to
comment ‘‘on specific methods to be
utilized’’ to limit carriers expenses. In
its February 2011 Notice of Proposed
Rulemaking, 76 FR 11632, March 2,
2011, the Commission explained that
under then-existing rules, rate-of-return
carriers with high loop costs could have
100 percent of their marginal loop costs
above a certain threshold reimbursed
through the federal universal service
fund while other carriers that took
measures to control expenses could find
themselves losing support to carriers
that increased costs. Those effects, the
Commission explained, meant that the
rules did not create appropriate
incentives to control costs and invest
rationally. The Commission proposed to
address these concerns by using
regression analyses to estimate
appropriate levels of capital and
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operating expenses, sought comment on
this proposal, and adopted its
benchmarking rule after considering the
comments received, including those
filed by the Rural Associations. The
Commission found that the approach it
adopted is a ‘‘reasonable way to place
limits on recovery of loop costs’’ and
specifically rejected the Rural
Associations’ proposed alternative
because it ‘‘would do little to limit
support for capital expenses if past
investments for a particular company
were high enough to be more than
sufficient to provide supported services,
and would do nothing to limit support
for operating expenses, which are on
average more than half of total loop
costs.’’ The Associations raise no new
arguments to change this conclusion,
and therefore we reject their petition to
reconsider the adoption of benchmarks
or the regression approach generally.
8. Second, the Rural Associations ask
the Commission to reconsider its
decision to change the caps annually
based on a ‘‘refreshed’’ run of the
regression analyses, arguing that the
Commission should instead leave any
caps in place for at least seven years.
They argue that if the regressions are
updated each year, carriers could be
encouraged to invest less to avoid being
affected by the caps because ‘‘it appears
that a carrier could actually reduce or
maintain existing investment and
expense levels during a given year but
still suffer unexpected reductions in its
HCLS * * * if its ‘peer group’ has
changed or if its existing peers have
reduced their costs faster.’’
9. Since filing their petition, the Rural
Associations have modified this request
for relief. They no longer request that
the Commission freeze any regressionbased caps for at least seven years.
Pending further updating and analysis
of the regression methodology, they urge
the Commission to ‘‘hold the caps
constant for a period of several years
starting in 2014,’’ and then analyze the
regression methodology ‘‘to determine
whether there are more optimal
methods than such a default rule to
address concerns with respect to
predictability in the longer-term.’’
10. We note, as an initial matter, that
the Bureau chose to use the same
regression coefficients in 2013 as those
calculated for 2012 during the phase-in
of the initial benchmarks (i.e., it ‘‘froze’’
the 2012 coeffecients for 2013).
Accordingly, carriers have been able to
determine their benchmarks, and
estimate their support, throughout the
phase-in period. In effect, during the
phase-in, the Bureau’s approach is
consistent with the Rural Associations’
request. In addition, as discussed in
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more detail below, we direct the Bureau
to revise the benchmark methodology to
generate a single cap for each study
area; these updated benchmarks will
apply beginning in 2014. The issue
before us now, therefore, is how
frequently the new benchmarks should
be updated beginning 2015.
11. As the Rural Associations
recognize, the decision whether and if
so, how to freeze the expense
benchmarks involves a number of
tradeoffs. On the one hand, as the Rural
Associations point out, more frequent
updates create the possibility of changes
in carriers’ support levels. If carriers
cannot estimate likely future support
levels with a reasonable degree of
certainty, frequent updates may deter
even efficient investment. On the other
hand, in practice, annual updates may
produce only small changes for all or
nearly all carriers. In fact, a comparison
of the 2012 benchmarks with 2013
benchmarks, calculated as if the Bureau
had not frozen the 2012 coefficients,
shows that the ratio of an individual
carrier’s costs to its caps in 2012 is
strongly predictive of whether the
carrier would have been capped in
2013. Moreover, if the benchmarks are
updated less frequently, over time they
may fail to reflect industry-wide cost
trends and cap carrier spending at levels
that are either too high or too low. And
if the benchmarks are updated
infrequently, each update could cause
larger and more sudden changes in
support levels, at least for a subset of
carriers. Updating the benchmarks less
frequently also risks treating similarly
situated carriers differently based on the
timing of their investments. For
example, a study area that has higher
costs due to investment would not have
those investments reflected in its
benchmark if its benchmark cap were
frozen. A freeze could therefore also
distort carriers’ investment decisions by
encouraging them to time their
investments to maximize their
benchmarks rather than to invest
efficiently. In addition, while there are
many potential means to limit the
volatility of the benchmarks from year
to year, each potential approach would
have, necessarily, a different ultimate
effect on each study area’s benchmarks,
and thus its own costs and benefits.
12. In light of these considerations,
we reconsider the Commission’s
decision to the extent it requires the
Bureau to update the regressions
annually. We direct the Bureau, as it
updates the benchmarks for 2014, to
consider whether these benchmarks
should be held constant for multiple
years, and, if so, which mechanism
would best advance our objectives to
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preserve and advance the deployment of
voice- and broadband-capable networks
while providing better incentives for
carriers to invest prudently and operate
efficiently. In doing so, the Bureau
should carefully consider the extent to
which annual updates are likely to
cause significant year-over-year changes
in support levels. We expect the Bureau
to adopt an approach that will provide
carriers sufficient certainty regarding
future years’ benchmarks to encourage
efficient investment while maintaining
the balance struck in the Commission’s
reforms to encourage efficient spending
by HCLS recipients.
13. Finally, the Rural Associations ask
the Commission to reconsider its
decision regarding the reductions
resulting from the HCLS benchmarks
and ‘‘find instead that the entirety of
those reductions will be redistributed to
other [rural carriers]—including those
impacted by new caps—within the
overall capped HCLS mechanism.’’
They argue that not redistributing
reductions to capped carriers results in
a ‘‘double cap’’ on HCLS.
14. We decline to reconsider the
Commission’s decision to redistribute
HCLS only to those carriers whose loop
costs are not capped by the benchmarks.
We find that providing additional
support to carriers with the highest
costs relative to their peers is contrary
to the purposes of the benchmarking
rule. Moreover, by providing
redistributed support only to carriers
that are below their benchmarks, the
rule provides an additional incentive for
carriers to operate efficiently and keep
costs below their caps. In addition, we
note that the Rural Associations appear
to assume that by allowing carriers
capped by the benchmarks to receive
redistributed support, they would have
the chance to recover ‘‘more but still not
all’’ of their high loop costs. To the
contrary, the Rural Associations’
proposal could permit some carriers
limited by the benchmarks to receive
more in redistributed support than they
would lose through the benchmark
reductions.
15. While we disagree with the Rural
Associations’ proposal to redistribute
HCLS to carriers whose support is
capped by the benchmarks, we take this
opportunity to clarify that there is no
‘‘double cap’’ on HCLS. That is, we
clarify that all HCLS reductions will be
redistributed, though only to carriers
whose loop costs are not limited by the
benchmarks. In discussing the proposed
methodology for creating benchmarks
the Commission estimated that only
approximately half of the HCLS
reductions experienced by carriers
limited by the benchmarks would be
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redistributed. Other language in the
USF/ICC Transformation Order made
clear, however, that the Commission
was not mandating partial
redistribution. Specifically, the
Commission said ‘‘we will place limits
on the HCLS provided to carriers whose
costs are significantly higher than other
companies that are similarly situated,
and support will be redistributed to
those carriers whose unseparated loop
cost is not limited by operation of the
benchmark methodology.’’ We note that
under the phase-in adopted by the
Bureau, all HCLS reductions were
redistributed in 2012. And now we
clarify that all reductions will be
redistributed in future years as well.
b. Accipiter Petition
16. Accipiter argues that the
Commission’s decision to adopt cost
benchmarks is flawed because such
benchmarks cannot distinguish between
carriers that ‘‘may legitimately be
outliers due to particular
considerations, including population
density, terrain, and operating
environment,’’ and carriers that ‘‘are
outliers due to waste, fraud or abuse, or
other inefficiencies.’’ Accipiter claims
the failure to make this distinction is
‘‘irrational’’ and reflects a failure to
consider the specific challenges facing
Accipiter and other carriers.
17. We disagree. The Commission’s
benchmarking approach is designed
precisely to compare each individual
carrier’s costs to those of similarly
situated carriers, accounting for the
most significant drivers of cost such as
‘‘density, terrain, and operating
environment.’’ It is reasonable for the
Commission to adopt a general rule to
identify carriers with costs that are
significantly higher than most of their
similarly situated peers instead of
relying on more costly and
administratively burdensome
alternatives such as audits. Carriers that
believe that the benchmarks do not
adequately address unique
circumstances that they face can seek a
waiver of the Commission’s rules.
Accipiter’s petition for reconsideration
reads more like a petition for waiver,
and in fact, Accipiter sought, and the
Bureau granted, a temporary waiver of
the benchmarking rule and other new
rules that would limit its support.
18. In its petition for reconsideration,
Accipiter makes a variety of other
arguments that relate not to the
Commission’s rule as adopted, but
rather to the benchmarking
methodology proposed in the USF/ICC
Transformation FNPRM, 76 FR 78384,
December 16, 2011. But those
complaints are not relevant to our
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reconsideration of the Commission’s
benchmarking rule. The Commission
delegated to the Bureau the authority to
adopt and implement a final
methodology, which the Bureau did in
its April 2012 HCLS Benchmarks
Implementation Order. Several parties,
including Accipiter, filed separate
applications for review of the Bureau’s
HCLS Benchmarks Implementation
Order. We turn to that order now.
2. Applications for Review
19. We next address a number of
arguments raised in the context of
applications for review of the Bureau’s
HCLS Benchmarks Implementation
Order, and we modify the Bureau’s
order in three respects. Specifically, (1)
we direct the Bureau to develop a
regression methodology that will
generate a single total loop cost cap for
each study area beginning in 2014; (2)
as an interim measure toward a single
cost cap, for purposes of calculating
HCLS support in 2013, we sum capex
and opex caps generated by the Bureau’s
current methodology; and (3) we modify
the phase-in of the benchmarks for
2013. We do not otherwise modify the
Bureau’s HCLS Benchmarks
Implementation Order at this time. In
taking these actions, we address certain
of the arguments raised in the
applications for review, and we defer
consideration of the other issues raised
in those applications for review.
20. Single Total Cost Cap. Consistent
with the Commission’s direction, the
Bureau’s HCLS Benchmarks
Implementation Order generated limits
on reimbursable capital expenses and
operating expenses for purposes of
determining HCLS; compared
companies’ costs to those of similarly
situated companies; and used statistical
techniques to determine which
companies shall be deemed similarly
situated. Consistent with the
Commission’s delegation of authority,
the Bureau also considered and tested
additional variables and made further
improvements to the methodology based
on the comments from two peer
reviewers and interested parties, and its
own analysis. The most significant
change in the methodology that the
Bureau made was using two regressions
to generate only two caps for each
company—a capex limit and an opex
limit—rather than generating eleven
caps as originally proposed in Appendix
H of the USF/ICC Transformation
FNPRM.
21. We agree with the Bureau’s
decision to use fewer regressions than
proposed in the USF/ICC
Transformation FNPRM. The Bureau
explained that doing so ‘‘enables
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carriers to account for the needs of
individual networks and recognizes the
fact that carriers may have higher costs
in one category that may be offset by
lower costs in others.’’ The Bureau
adopted two regressions even though
‘‘[u]sing a greater number of regressions
makes it possible to identify outliers at
a granular level.’’ Although one peer
reviewer and some commenters
recommended using a single regression
to limit total cost, the Bureau decided
that approach ‘‘would provide fewer
safeguards against overspending.’’
Because ‘‘[c]apital and operating
expenditures reflect fundamentally
different measures of business
performance,’’ the Bureau reasoned that
‘‘[u]sing two regressions instead of one
provides carriers flexibility to manage
their operations, while still enabling the
Commission to identify more instances
where carriers spend markedly more in
either category than their similarlysituated peers.’’
22. We agree with commenters that
the Bureau’s methodology was an
improvement over the proposed
methodology that used eleven
regressions, and we recognize that there
are trade-offs in choosing the number of
regressions. On balance, we conclude
that going forward, it would be better to
use one regression to generate a single
cap on total loop costs for each study
area. A single cap will provide carriers
with greater flexibility to account for the
specific needs of their locales and
networks. This approach recognizes that
carriers often consider the trade-offs
between capital costs and operating
expenses when making investment
decisions. For example, in its
Application for Review, Central Texas
argues that it ‘‘balanced the costs of
using aerial cables against the costs of
burying cable and determined that it
costs less overall to bury cable, rather
than constantly maintain and replace
aerial cable in the windy, tough,
varmint-ridden Texas terrain. By
keeping its cable maintenance costs low,
Central Texas receives no credit from
the regression model for doing so even
though it has much lower operational
expenditures.’’
23. The record before the Bureau
when it adopted two regressions instead
of eleven regressions also contained
support for using a single regression.
For example, as noted above, one of the
peer reviewers of the benchmark
methodology, Paroma Sanyal, stated
that ‘‘individual cost capping [i.e.
capping individual types of costs rather
than total costs] ignores any
complementar[it]y or substitutability
between the various cost components,’’
which may discourage overall cost-
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minimization and fails to recognize that
carriers face different trade-offs between
types of expenses. Sanyal suggested that
‘‘[a] more flexible approach may be to
estimate the 90th percentile over the
total cost,’’ which ‘‘would be more in
line with theoretical cost-minimization
approaches where * * * expenditure
caps can enhance efficiency under a
rate-of-return regulation.’’ Similarly,
Roger Koenker, one of the economists
who developed quantile regression
analysis, opined that his ‘‘primary
criticism of the proposed FCC
methodology [in Appendix H] lies in the
way that cost estimates for individual
cost components are aggregated. * * *
A preferable, and simpler, approach
would be to develop one conditional
quantile model for aggregate costs.’’
Koenker concluded that the proposed
aggregation of cost categories ‘‘yields
cost limits that may be unduly stringent
in some cases, and unduly lenient in
others.’’
24. For these reasons, we are
persuaded that using a single total loop
cost benchmark would be preferable to
using separate capex and opex caps.
Accordingly, we direct the Bureau to
develop a regression methodology that
will generate a single cap for each study
area. We note that the Bureau also will
be incorporating into its analysis revised
study area boundaries, which will be
obtained through an upcoming data
collection. We direct the Bureau to
analyze the impact of various
approaches prior to adopting its new
methodology, which we anticipate will
be implemented for distribution of
HCLS beginning in 2014.
25. Summing Capex and Opex Caps
for 2013. We recognize that the Bureau
needs time to develop and seek
comment on a new methodology, and
therefore, absent some interim measure,
carriers would continue to operate
under two separate caps until 2014. We
therefore conclude it is appropriate to
combine or ‘‘sum’’ the existing caps as
an interim measure. As a result, for
purposes of providing HCLS, starting
the first full month after the effective
date of this Order and for the rest of
2013, we will account for the trade-offs
carriers make between capital
expenditures and operating expenses by
summing the capex and opex caps as an
interim measure. That is, we will add
each study area’s capex and opex
benchmarks together to establish a new
limit on total unseparated loop costs for
purposes of determining HCLS. In the
short term, summing the capex and
opex benchmarks together will provide
an administratively feasible means to
recognize the trade-offs between capital
and operating expenses that carriers
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have made over time, while the Bureau
works to develop a new single-equation
regression. We note that external parties
and one peer reviewer have expressed
concern about summing benchmarks
based on quantiles. As a matter of
statistics, the sum of the quantiles is not
the quantile of the sums, which is to say
that summing two 90th percentile
benchmark caps does not produce the
same result as would setting a cap based
on the 90th percentile of total costs.
Although summing is imperfect as an
estimate of the 90th percentile of overall
costs, we find that as an interim
measure it provides a reasonable way to
recognize that there are tradeoffs
between capital and operating
expenditures. For example, to the extent
a carrier’s costs are over the capex
benchmark but under the opex
benchmark because it has made large
investments to lower its operating costs
and overall costs, summing the
benchmarks will provide additional
allowances for these expenditures.
26. Phase-In. We also slightly modify
the phase-in of the HCLS benchmarks
adopted by the Bureau. Applications for
review of the HCLS Benchmarks
Implementation Order ask us to either
set it aside or delay the implementation
of the HCLS benchmarks until the
Commission addresses various
concerns. Although we deny requests to
delay the implementation, we modify
the phase-in to limit the amount by
which any one carrier’s support may be
reduced in 2013. In 2012, HCLS was
reduced by twenty-five percent of the
difference between the support
calculated using the study area’s
reported cost per loop and the support
as limited by the benchmarks, unless
that reduction would exceed ten percent
of the study area’s support as otherwise
would be calculated based on NECA
cost data. The Bureau’s phase-in for
2013, as adopted in HCLS Benchmarks
Implementation Order, will reduce
support by fifty percent of the difference
between the support calculated using
the study area’s reported cost per loop
and the support as limited by the
benchmarks in effect for 2013, but
remove the limit on the total impact on
individual carriers. We maintain the
Bureau’s fifty percent phase-in for 2013.
However, starting the first full month
after the effective date of this Order and
for the rest of 2013, we will limit the
amount of the reduction to no more than
fifteen percent of the study area’s
support as otherwise would be
calculated based on NECA cost data,
absent implementation of the
benchmark rule. We conclude that this
strikes a reasonable balance between
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continuing the phase-in of the
benchmark rule, while giving those
carriers most heavily impacted
additional time to adjust, particularly as
the Bureau updates the benchmarks for
2014.
27. Other Issues. In this section we
address a number of other issues raised
in the applications for review; we defer
consideration of the remaining issues to
a future order.
28. Predictability. Several parties
argue that the Bureau’s benchmark
methodology results in support amounts
that are unpredictable in violation of
section 254(b)(5) of the Communications
Act of 1934, as amended (the Act).
Central Texas, for example, claims that
the dynamic, annually changing nature
of the regression caps does not allow
carriers to predict future HCLS based on
current and near-future expenditures.
And Accipiter argues that the results are
so unpredictable that the Bureau’s
methodology ‘‘effectively prohibits
companies from making reasonable and
rational investment decisions.’’ We
disagree.
29. As the United States Court of
Appeals for the Fifth Circuit explained
in Alenco, the Commission can satisfy
the statute by adopting predictable rules
that govern distribution of subsidies; its
rules need not provide precisely
predictable funding amounts. Yet what
these parties seek is precisely the
predictable funding amounts the statute
does not require. In any event, as noted
above, the Bureau provided that same
regression coefficients would be used in
2013 as those calculated for 2012 in
order to ensure that carriers would be
able to calculate their benchmark caps
for the phase-in period well in advance.
Accordingly, at least with respect 2012
and 2013, the carriers were, in fact,
provided with the certainty they
request. And, as discussed above, for
2014 and beyond, we direct the Bureau
to revise its methodology to set a single
total cost benchmark for each study area
and to consider how frequently that
regression should be updated. We do so
with the expectation that the Bureau
will adopt an approach that will provide
carriers sufficient certainty regarding
future years’ benchmarks to encourage
efficient investment while maintaining
the balance struck in the Commission’s
reforms to encourage efficient spending
by HCLS recipients. For these reasons,
we reject the claim that the Bureau’s
order violates the Act because it
provides insufficient predictability.
30. Similarly-Situated Companies. We
also disagree with the Rural
Associations’ claim that the ‘‘Bureau’s
methodology does not rely on statistical
analysis of ‘similarly situated’
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companies, as the Commission’s USF/
ICC Transformation Order directed. In
fact, the actual formulas do not establish
any comparator groups.’’ They argue
that the benchmark ‘‘formulas impose
limitations on companies without regard
to whether their per-unit costs are
excessive or relatively high compared to
‘peers.’’’ On the contrary, we find that
the Bureau’s regression analysis was
consistent with Commission’s direction.
We note that the Rural Associations
never explain how they would propose
to define ‘‘similarly situated’’
companies. We conclude that the
Bureau took a reasonable approach,
taking into account all the significant
variables in determining the caps, in
effect comparing each company to all
other companies to the degree to which
the companies are similar in regard to
the variables found to be significant
(i.e., the degree to which they are
similarly situated).
31. Trigger. We also reject the
argument made by several parties in
their applications for review that ‘‘a
regression model should be used only to
trigger a harder look to determine
whether a carrier’s costs were truly
‘inefficient.’’’ The Commission did not
provide the Bureau with the discretion
to use the regression methodology in
that manner. Moreover, as explained
above in the context of the petitions for
reconsideration, we conclude that it was
reasonable for the Commission to adopt
a general rule to identify carriers with
costs that are significantly higher than
their peers instead of relying on more
costly and burdensome approaches like
audits, as would be required if the
regression methodology were used
merely as a trigger.
32. Finally, while we have, in this
Order, addressed a number of
significant issues raised in the
applications for review, we recognize
that a number of issues remain pending.
We otherwise defer consideration of
issues not addressed herein.
III. Limits on Total Per-Line High-Cost
Support
33. We deny both petitions for
reconsideration. In the USF/ICC
Transformation Order, the Commission
concluded that a $250 cap would be
reasonable after finding that ‘‘support
drawn from limited public funds in
excess of $250 per-line monthly * * *
should not be provided without further
justification.’’ The Commission also
noted that ‘‘virtually all (99 percent) of
incumbent LEC study areas currently
receiving [universal service] support are
under the $250 per-line monthly limit.’’
Even so, to provide affected carriers a
measured transition, the Commission
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delayed the implementation of the $250
cap for six months to ‘‘provide an
opportunity for companies to make
operational changes, engage in
discussions with their current lenders,
and bring any unique circumstances to
the Commission’s attention through the
waiver process.’’ Moreover, after the sixmonth delay, the Commission phased-in
the $250 cap ‘‘to ease the potential
impact of this transition.’’ As a result,
effective July 1, 2012, carriers subject to
the $250 cap received support of no
more than $250 per-line plus two-thirds
the difference between their uncapped
per-line amount and $250, and effective
July 1, 2013, carriers will receive no
more than $250 per-line plus one-third
the difference between their uncapped
per-line amount and $250 through June
30, 2014.
34. Petitioners have not presented any
new evidence or arguments that
persuade us to reconsider adoption of
the $250 per-line per month cap. And,
we disagree with the Rural Associations’
claims that the Commission failed to
adequately explain the basis for
adopting the $250 cap. The Commission
provided a thorough, reasoned analysis
of the basis for adopting the $250 cap.
By phasing-in the $250 cap, the
Commission also provided carriers time
to adjust, while promoting the
Commission’s goal of fiscal
responsibility. Moreover, the USF/ICC
Transformation Order acknowledged
that if there are unique circumstances,
carriers should utilize the waiver
process. We recently modified and
clarified the Commission’s guidance for
the waiver process in our Fifth Order on
Reconsideration, 78 FR 3837, January
17, 2013.
35. We note that, in 2011, there were
26 incumbent study areas that received
$250 per month or more in per-line
support. Of those 26 study areas, the
Commission has received nine waiver
petitions arguing that waiver of the cap
is necessary for the company to
continue to serve its community; one of
those petitions subsequently was
withdrawn. That the carriers serving the
remaining study areas have not filed for
waivers suggests that the measured
transition adopted by the Commission
provides an appropriate amount of time
for affected companies to adjust their
operations without disrupting service to
consumers.
36. We deny the requests of Accipiter
and the Rural Associations that the
Commission apply the $250 cap ‘‘on a
prospective basis only.’’ The
Commission decided, after fully
considering the record, that the
immediate adoption of the $250 cap
would advance its goal of imposing
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responsible fiscal limits on universal
service support. Accipiter claims that
applying the cap ‘‘to previouslyincurred expenses is in no way
consistent with the Congressional
directive that support be ‘predictable,’
and would punish carriers for
reasonable investment decisions that
cannot be reversed to account for the
Commission’s new rules.’’ The
Commission fully considered and
rejected such arguments in the USF/ICC
Transformation Order, explaining that
section 254 of the Act ‘‘does not create
any entitlement or expectation that
ETCs will receive any particular level of
support or even any support at all.’’ In
fact, ‘‘there is no statutory provision or
Commission rule that provides
companies with a vested right to
continued receipt of support at current
levels, and [the Commission is] not
aware of any other, independent source
of law that gives particular companies
an entitlement to ongoing USF
support.’’ In addition, the Commission
upheld the principle that universal
service mechanisms be predictable by
adopting a measured transition to the
implementation of the $250 cap for all
carriers that made clear how much
support carriers could expect to receive
as the cap was phased in. As discussed
above, rather than ‘‘punish’’ carriers for
previously incurred expenses, the
Commission made efforts to ‘‘ease the
potential impact’’ of the transition on all
carriers by delaying the implementation
of the cap for six months, phasing in the
cap over a period of three years, and
providing a waiver process for those
carriers that face unique circumstances.
IV. ICLS Corporate Operations Expense
Cap
37. Accipiter and the Rural
Associations provide no new evidence
and introduce no new arguments that
persuade us to reverse or otherwise
modify this approach, and therefore we
deny these petitions for reconsideration.
Accipiter claims that any immediate
extension of the corporate operations
expense cap to ICLS will have
‘‘devastating financial implications’’ on
carriers that are in the process of
growing their operations to serve rural
areas. Accipiter notes that ‘‘[c]orporate
operations expenses must be incurred
before a carrier can add its first line,’’
while acknowledging that ‘‘per-line
corporate operations costs are quickly
averaged down as new subscribers are
added.’’ But the Commission has
already made accommodations for
carriers with limited subscribership.
The Commission retained the rule that
permits carriers with 6,000 or fewer
working loops to recover a minimum
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amount per working loop if they would
receive less than that minimum under
the application of the ICLS corporate
operations expense cap formula (i.e.,
$42.337—(.00328 × number of total
working loops)). Specifically, such
carriers can recover monthly for each
working loop: $63,000 divided by their
total number of working loops.
Moreover, if carriers believe that due to
their unique characteristics, they need
to recover more corporate operations
expenses through ICLS than allowed for
under the cap, they remain free to
petition for a waiver of the cap pursuant
to the Commission’s waiver process.
38. The Rural Associations request
that the Commission delay the
implementation of the ICLS corporate
operations expense cap ‘‘until no sooner
than January 1, 2013.’’ They argue that
the Commission should not implement
the corporate operations expense cap
before carriers ‘‘have adequate
opportunity to adjust their operations
for compliance’’ with the new operating
expense caps that the Commission
proposed to develop through regression
analysis in the FNPRM. The Rural
Associations have not provided any
evidence, however, demonstrating why
extending the HCLS corporate
operations expense limit to ICLS was
inappropriate or why it would be
necessary to delay a critical reform that
advances the Commission’s goals of
improving fiscal discipline and
accountability.
39. We also deny Accipiter’s claim
that the Commission violated 47 U.S.C.
254(b)(5) by applying the ICLS corporate
operations expense cap to support for
2012, which is determined with
reference to 2010 expenses. The
company argues that it ‘‘reasonably and
rationally made decisions about 2010
investments and expenses based on the
rules that were in place in 2010.’’ But
as we discussed above and addressed
repeatedly in the USF/ICC
Transformation Order, section 254 does
not entitle carriers to recover USF
support simply because they expected
to receive that support. Accipiter does
not cite any additional legal authority
that persuades us otherwise.
40. Finally, we are not persuaded by
Accipiter’s argument that a ‘‘one size
fits all rule,’’—i.e., using a nationwide
formula to cap ICLS—is ‘‘inappropriate
and inflexible’’ due to the variability in
corporate operations expenses between
different regions in the country.
Accipiter has not provided any evidence
to explain why a nationwide formula is
unreasonable. Indeed, the Commission
has used a nationwide formula to limit
the recovery of corporate operations
expenses for HCLS ever since it adopted
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that corporate operations expense cap in
1997. Accipiter has failed to explain
how ICLS differs from HCLS in such a
way that it would be unreasonable for
the Commission to extend the HCLS
nationwide formula to ICLS.
V. Implementation of Further Reforms
for Rate-of-Return Carriers
41. Finally, we take this opportunity
to address some general arguments
made by a number of rate-of-return
carrier associations that the Commission
should undertake ‘‘a careful data-driven
process that takes measure of * * *
reforms just now being implemented,’’
including those reforms described
above, ‘‘in lieu of racing forward with
additional changes.’’ Although we
disagree with these carriers insofar as
they suggest we stop our
implementation of the Commission’s
USF/ICC Transformation Order, we
agree that a careful data-driven process
is consistent with—and indeed critical
to—that implementation. We emphasize
our continued commitment to such a
process, and we direct the Bureau, as it
implements the modifications described
above and proceeds with other reforms
adopted in the USF/ICC Transformation
Order, to continue taking all appropriate
steps to seek input from affected
stakeholders, and gather relevant data
on the effect of reforms as they proceed.
As an additional measure, we direct the
Bureau to report to the Commission,
within two years of release of the USF/
ICC Transformation Order, i.e.,
November 18, 2013, on the progress of
implementation, and on the impact of
reforms based on relevant, available
data at that time.
VI. Procedural Matters
A. Paperwork Reduction Act
42. This document does not contain
proposed information collection(s)
subject to the Paperwork Reduction Act
of 1995 (PRA), Public Law 104–13. In
addition, therefore, it does not contain
any new or modified information
collection burden for small business
concerns with fewer than 25 employees,
pursuant to the Small Business
Paperwork Relief Act of 2002, Public
Law 107–198, see 44 U.S.C. 3506(c)(4).
B. Final Regulatory Flexibility Act
Certification
43. 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
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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).
44. This document modifies and
clarifies the benchmarking rule adopted
by the Commission in USF/ICC
Transformation Order, and modifies the
Wireline Competition Bureau’s
implementation of that rule. These
modifications and clarifications do not
create any burdens, benefits, or
requirements that were not addressed by
the Final Regulatory Flexibility Analysis
attached to USF/ICC Transformation
Order. The Commission will send a
copy of the Order including a copy of
this final certification, in a report to
Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of
1996, see 5 U.S.C. 801(a)(1)(A). In
addition, the Order and this certification
will be sent to the Chief Counsel for
Advocacy of the Small Business
Administration, and will be published
in the Federal Register. See 5 U.S.C.
605(b).
C. Congressional Review Act
45. The Commission will send a copy
of this Order to Congress and the
Government Accountability Office
pursuant to the Congressional Review
Act.
D. Effective Date
46. We conclude that good cause
exists to make this Order effective
immediately upon publication in the
Federal Register, pursuant to section
553(d)(3) of the Administrative
Procedure Act. Agencies determining
whether there is good cause to make a
rule revision take effect less than 30
days after Federal Register publication
must balance the necessity for
immediate implementation against
principles of fundamental fairness that
require that all affected persons be
afforded a reasonable time to prepare for
the effective date of a new rule. As we
note above, summing the capex and
opex benchmarks together is an
important interim step to recognize the
trade-offs that carriers have made in
investment, and will therefore mitigate
or eliminate the effect of the existing
benchmarks cap mechanism on carriers
that are capped under one or the other
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benchmark but not both. It will also
reduce the amount of support
redistributed to uncapped carriers by a
corresponding amount. Because many
more carriers receive redistributed
support than are capped under the
existing mechanism, the effect of
summing the caps on any carrier
receiving redistributed support will
generally be much less significant than
the effect on those carriers that are
currently capped. Moreover, we note
that high cost loop support is generally
subject to true-ups over time. Carriers,
accordingly, generally have no certain
expectation of the precise amount of
support they will receive. We conclude
under these circumstances that the
public interest is best served by
immediate implementation of our new
interim rule, and that, on balance
carriers that will experience a minor
reduction in redistributed support do
not require additional time to prepare
for implementation of a rule change that
affects them only modestly.
47. In addition, we modified the
phase-in of the HCLS benchmarks to
limit the amount of reduction of support
to no more than fifteen percent of the
study area’s support absent
implementation of the benchmark rule
to give carriers that are heavily
impacted by the benchmarks more time
to adjust. We find that implementing the
modification to the phase-in as
expeditiously as possible furthers the
Commission’s objective of ensuring that
carriers experience a more gradual
implementation of the benchmarks
overall which obviates the necessity of
providing carriers additional 30 day
notice before implementation.
VII. Ordering Clauses
48. 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 Sixth Order on Reconsideration
is adopted, effective upon publication of
the text or summary thereof in the
Federal Register.
49. 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, that the Petition
for Reconsideration filed by the
National Exchange Carrier Association,
Inc., Organization for the Promotion and
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Advancement of Small
Telecommunications Companies, and
Western Telecommunications Alliance
on December 29, 2011 is granted in part
to the extent described herein, and is
denied in part to the extent described
herein.
50. 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, that the Petition
for Reconsideration filed by Accipiter
Communications Inc. on December 29,
2011 is denied in part to the extent
described herein.
51. It is further ordered that, pursuant
to the authority contained in section
155(c) of the Communications Act of
1934, as amended, 47 U.S.C. 155(c) and
§§ 0.291 and 1.115 of the Commission’s
rules, 47 CFR 0.291 and 1.115, that the
Application for Review filed by Central
Texas Telephone Cooperative, Inc. on
May 25, 2012 is granted in part to the
extent described herein, and is denied
in part to the extent described herein.
52. It is further ordered that, pursuant
to the authority contained in section
155(c) of the Communications Act of
1934, as amended, 47 U.S.C. 155(c) and
§§ 0.291 and 1.115 of the Commission’s
rules, 47 CFR 0.291 and 1.115, that the
Application for Review filed by the
National Exchange Carrier Association,
Inc., National Telecommunications
Cooperative Association, Organization
for the Promotion and Advancement of
Small Telecommunications Companies,
and Western Telecommunications
Alliance on May 25, 2012 is denied in
part to the extent described herein.
53. It is further ordered that, pursuant
to the authority contained in section
155(c) of the Communications Act of
1934, as amended, 47 U.S.C. 155(c) and
§§ 0.291 and 1.115 of the Commission’s
rules, 47 CFR 0.291 and 1.115, that the
Application for Review filed by East
Ascension Telephone Company, LLC on
May 25, 2012 is denied in part to the
extent described herein.
54. It is further ordered that, pursuant
to the authority contained in section
155(c) of the Communications Act of
1934, as amended, 47 U.S.C. 155(c) and
§§ 0.291 and 1.115 of the Commission’s
rules, 47 CFR 0.291 and 1.115, that the
Application for Review filed by Silver
Star Telephone Company, Inc. on May
25, 2012 is granted in part to the extent
described herein, and is denied in part
to the extent described herein.
55. It is further ordered that, pursuant
to the authority contained in section
155(c) of the Communications Act of
1934, as amended, 47 U.S.C. 155(c) and
§§ 0.291 and 1.115 of the Commission’s
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16815
rules, 47 CFR 0.291 and 1.115, that the
Supplement to Application for Review
filed by Silver Star Telephone
Company, Inc. on June 22, 2012 is
granted in part to the extent described
herein, and is denied in part to the
extent described herein.
56. It is further ordered that, pursuant
to the authority contained in section
155(c) of the Communications Act of
1934, as amended, 47 U.S.C. 155(c) and
§§ 0.291 and 1.115 of the Commission’s
rules, 47 CFR 0.291 and 1.115, that the
Application for Review filed by Blue
Valley Telephone Telecommunications,
Inc. on June 22, 2012 is granted in part
to the extent described herein, and is
denied in part to the extent described
herein.
57. It is further ordered that, pursuant
to the authority contained in section
155(c) of the Communications Act of
1934, as amended, 47 U.S.C. 155(c) and
§§ 0.291 and 1.115 of the Commission’s
rules, 47 CFR 0.291 and 1.115, that the
Application for Review filed by
Blooston Rural Broadband Carriers on
May 25, 2012 is granted in part to the
extent described herein, and is denied
in part to the extent described herein.
58. It is further ordered that, pursuant
to the authority contained in section
155(c) of the Communications Act of
1934, as amended, 47 U.S.C. 155(c) and
§§ 0.291 and 1.115 of the Commission’s
rules, 47 CFR 0.291 and 1.115, that the
Application for Review filed by
Accipiter Communications Inc. on May
25, 2012 is granted in part to the extent
described herein, and is denied in part
to the extent described herein.
59. It is further ordered that, pursuant
to the authority contained in section
155(c) of the Communications Act of
1934, as amended, 47 U.S.C. 155(c) and
§§ 0.291 and 1.115 of the Commission’s
rules, 47 CFR 0.291 and 1.115, that the
Application for Review filed by United
States Telecom Association on June 22,
2012 is granted in part to the extent
described herein, and is denied in part
to the extent described herein.
60. 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).
61. It is further ordered, that the
Commission’s Consumer and
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.
E:\FR\FM\19MRR1.SGM
19MRR1
16816
Federal Register / Vol. 78, No. 53 / Tuesday, March 19, 2013 / Rules and Regulations
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2013–06322 Filed 3–18–13; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 73
[MB Docket No. 11–207; RM–11517; RM–
11518; RM–11669; DA 13–228]
Radio Broadcasting Services;
Ehrenberg, First Mesa, Kachina
Village, Munds Park, Wickenburg, and
Williams, Arizona
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
The Media Bureau grants a
Counterproposal filed by Grenax
Broadcasting II, LLC, for a new FM
allotment on Channel 246C2 at Munds
Park, Arizona, over a conflicting
Petition for Rule Making and hybrid
application filed by Univision Radio
License Corporation for an increase in
existing service by Station KHOV–FM,
Wickenburg, Arizona. The Bureau also
dismisses a Petition for Rule Making
filed by Rocket Radio, Inc. for a new
allotment at Williams, Arizona, because
no continuing expression of interest was
filed.
DATES: Effective April 23, 2013.
FOR FURTHER INFORMATION CONTACT:
Andrew J. Rhodes, Media Bureau, (202)
418–2700.
SUPPLEMENTARY INFORMATION: This is a
synopsis of the Commission’s Report
and Order, MB Docket No. 11–207,
adopted February 14, 2013, and released
February 15, 2013. See also Notice of
Proposed Rule Making and Order to
Show Cause, 77 FR 2241, published
January 17, 2012. The full text of this
Commission decision is available for
inspection and copying during normal
business hours in the FCC’s Reference
Information Center at Portals II, CY–
A257, 445 12th Street, SW.,
Washington, DC 20554. This document
may also be purchased from the
Commission’s duplicating contractors,
Best Copy and Printing, Inc., 445 12th
Street, SW., Room CY–B402,
Washington, DC 20554, telephone 1–
800–378–3160 or via email
www.BCPIWEB.com. The Commission
will send a copy of this Report and
Order in a report to be sent to Congress
and the Governmental Accountability
Office, pursuant to the Congressional
Review Act, see 5 U.S.C. 801(a)(1)(A).
tkelley on DSK3SPTVN1PROD with RULES
SUMMARY:
VerDate Mar<15>2010
16:13 Mar 18, 2013
Jkt 229001
This document does not contain
proposed information collection
requirements subject to the Paperwork
Reduction Act of 1995, Public Law 104–
13. In addition, therefore, it does not
contain any proposed information
collection burden ‘‘for small business
concerns with fewer than 25
employees,’’ pursuant to the Small
Business Paperwork Relief Act of 2002,
Public Law 107–198, see 44 U.S.C.
3506(c)(4).
Provisions of the Regulatory
Flexibility Act of 1980 do not apply to
this proceeding.
To accommodate the new allotment at
Munds Park, the Bureau also substitutes
Channel 281C for vacant Channel 247C
at First Mesa, Arizona, at reference
coordinates 35–41–09 NL and 110–21–
43 WL. The reference coordinates for
Channel 246C2 at Munds Park are 34–
58–06 NL and 111–30–29 WL.
In comparing the new allotment at
Munds Park and the proposed increase
in existing service at Wickenburg,
Arizona, the Bureau recognized that the
Wickenburg proposal would provide a
second full-time reception service to
264 persons. However, the Bureau
found that this was de minimis and did
not trigger Priority 2 of the FM
Allotment Priorities. The Munds Park
proposal was preferred over the
Wickenburg proposal under Priority 4,
other public interest matters. Although
the increase in existing service at
Wickenburg would provide third and
fourth reception services to some
underserved populations, the Bureau
determined on balance that they do not
outweigh the need for a second local or
first competitive service at Munds Park.
List of Subjects in 47 CFR Part 73
Radio, Radio broadcasting.
Federal Communications Commission.
Nazifa Sawez,
Assistant Chief, Audio Division, Media
Bureau.
As stated in the preamble, the Federal
Communications Commission amends
47 CFR part 73 as follows:
PART 73—RADIO BROADCAST
SERVICES
1. The authority citation for part 73
continues to read as follows:
■
Authority: 47 U.S.C. 154, 303, 334, 336 and
339.
§ 73.202
[Amended]
2. Section 73.202(b), the Table of FM
Allotments under Arizona, is amended
by removing Channel 247C at First Mesa
and by adding Channel 281C at First
■
PO 00000
Frm 00040
Fmt 4700
Sfmt 4700
Mesa, and by adding Munds Park,
Channel 246C2.
[FR Doc. 2013–06307 Filed 3–18–13; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 73
[MB Docket No. 11–139; RM–11636; DA 13–
258]
Television Broadcasting Services;
Hampton-Norfolk, Virginia; Norfolk,
Virginia-Elizabeth City, North Carolina
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
The Commission has before it
a petition for rulemaking filed by
Hampton Roads Educational
Telecommunications Association’s
(HRETA). HRETA requests the
reallotment of its channel *16 to
Norfolk, Virginia-Elizabeth City, North
Carolina, and to modify its television
station, WHRO–TV’s license to specify
Norfolk, Virginia-Elizabeth City, North
Carolina as its community of license.
Norfolk, Virginia-Elizabeth City, North
Carolina fails to qualify as a community
for allotment purposes, and therefore,
HRETA’s request to modify its
community of license is been denied
and its petition for rulemaking is
dismissed.
SUMMARY:
DATES:
This rule is effective March 19,
2013.
FOR FURTHER INFORMATION CONTACT:
Jeremy Miller, Jeremy.Miller@fcc.gov,
Media Bureau, (202) 418–1600.
SUPPLEMENTARY INFORMATION: This is a
synopsis of the Commission’s Report
and Order, MB Docket No. 11–139,
adopted February 21, 2013, and released
February 22, 2013. The full text of this
document is available for public
inspection and copying during normal
business hours in the FCC’s Reference
Information Center at Portals II, CY–
A257, 445 12th Street SW., Washington,
DC, 20554. This document will also be
available via ECFS (https://
fjallfoss.fcc.gov/ecfs/). This document
may be purchased from the
Commission’s duplicating contractor,
Best Copy and Printing, Inc., 445 12th
Street, SW., Room CY–B402,
Washington, DC 20554, telephone 1–
800–478–3160 or via the company’s
Web site, https://www.bcpiweb.com. To
request materials in accessible formats
for people with disabilities (braille,
large print, electronic files, audio
format), send an email to fcc504@fcc.gov
E:\FR\FM\19MRR1.SGM
19MRR1
Agencies
[Federal Register Volume 78, Number 53 (Tuesday, March 19, 2013)]
[Rules and Regulations]
[Pages 16808-16816]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-06322]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket Nos. 10-90, 05-337; FCC 13-16]
Connect America Fund; High-Cost Universal Service Support
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission
(Commission) addresses several issues related to changes made to high-
cost universal service support for rate-of-return carriers in the USF/
ICC Transformation Order, including granting in part requests to modify
the high cost loop support (HCLS) benchmarks.
DATES: Effective March 19, 2013.
FOR FURTHER INFORMATION CONTACT: Heidi Lankau, Wireline Competition
Bureau, (202) 418-2876 or TTY: (202) 418-0484.
[[Page 16809]]
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Sixth
Order on Reconsideration and Memorandum Opinion and Order in WC Docket
Nos. 10-90, 05-337; FCC 13-16, adopted on January 31, 2013 and released
on February 27, 2013. The full text of this document is available for
public inspection during regular business hours in the FCC Reference
Center, Room CY-A257, 445 12th Street SW., Washington, DC 20554. Or at
the following Internet address: https://transition.fcc.gov/Daily_Releases/Daily_Business/2013/db0227/FCC-13-16A1.pdf
I. Introduction
1. In the USF/ICC Transformation Order, 76 FR 73830, November 29,
2011, the Commission comprehensively reformed universal service and
intercarrier compensation, adopting fiscally responsible, incentive-
based policies to preserve and advance voice- and broadband-capable
networks while requiring accountability from companies receiving
support and ensuring fairness for consumers who pay into the universal
service fund. Modernizing these systems, the Commission concluded, was
critical to meet the universal service challenge of our time: ensuring
consumers have access to high-speed Internet access as well as voice
service. As part of this undertaking, the Commission reformed legacy
high-cost universal service support mechanisms for rate-of-return
carriers. Rate-of-return carriers serve fewer than five percent of U.S.
access lines, but operate in many of the country's most difficult areas
to serve. Total universal service support for such carriers was
approaching $2 billion annually--more than 40 percent of the
Commission's $4.5 billion overall budget for the reformed high-cost
program. The Commission's reforms for rate-of-return carriers begin the
transition toward a more incentive-based form of regulation to
encourage efficient operation and to support the widest possible
availability of broadband.
2. In this Order, we address several issues related to the changes
made to high-cost universal service support for rate-of-return carriers
in the USF/ICC Transformation Order. First, we address a number of
issues raised in petitions for reconsideration or clarification of the
benchmarking rule adopted in the USF/ICC Transformation Order. That
rule establishes reasonable limits on capital and operating
expenditures eligible for high-cost universal service support for rate-
of-return carriers, providing better incentives for carriers to invest
prudently and operate efficiently than the prior support mechanism,
while providing additional support for carriers below their caps to
extend broadband to rural consumers. (Rate-of-return carriers
previously faced no limits on their overall spending, and received 100
percent reimbursement of loop costs above a certain level, creating a
``race-to-the-top'' in spending). We reconsider one aspect of the
benchmark rule, but decline to reconsider adoption of the rule in
general. We then consider a number of applications for review of the
Wireline Competition Bureau's (Bureau's) HCLS Benchmarks Implementation
Order, 77 FR 30411, May 23, 2012, which implemented the benchmarking
rule for purposes of calculating high-cost loop support (HCLS), and
modify certain aspects of the Bureau's order. In addition, we decline
requests to reconsider the monthly per-line cap of $250 in total high-
cost federal universal service support for all telephone companies, and
we reaffirm the extension of the corporate operations expense cap to
interstate common line support (ICLS). Finally, we take the opportunity
to address requests from certain rate-of-return carriers that the
Commission slow our implementation of other aspects of the USF/ICC
Transformation Order, emphasizing the importance of continuing with the
implementation of reform, but reiterating our commitment to a data-
driven process.
3. As we have previously noted, 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. We observe that,
under Commission rules, if a petition for reconsideration simply
repeats arguments that were previously fully considered and rejected in
the proceeding, it will not likely warrant reconsideration. This
standard informs our analysis below.
II. Benchmarking Rule
1. Petitions for Reconsideration
4. We begin by addressing petitions for reconsideration of the
benchmarking rule. For the reasons set forth below, we reconsider the
Commission's original rule insofar as it requires the Bureau to rerun
the benchmark regression annually and direct the Bureau to consider
whether running the regression analyses less frequently will better
serve the purposes advanced by the benchmarking rule. We deny, however,
petitions for reconsideration filed by the National Exchange Carrier
Association, Inc. (NECA), Organization for the Promotion and
Advancement of Small Telecommunications Companies (OPASTCO), and
Western Telecommunications Alliance (WTA), (jointly, the Rural
Associations) and Accipiter Communications Inc. (Accipiter) to the
extent they request that the Commission reconsider its benchmarking
rule. We also clarify how support will be redistributed under that
rule.
a. Rural Associations' Petition
5. The Rural Associations ask the Commission to reconsider several
aspects of its limitations on reimbursable capital and operating
expenses. We address certain of these arguments here.
6. First, the Rural Associations argue that the Commission's
decision to use regression analyses to limit reimbursable capital costs
and operating expenses in the USF/ICC Transformation Order was
``premature and improper,'' and that the Commission should instead have
stated that it would ``examine a regression analysis approach * * *
subject to adequate notice and comment.'' They claim that the
Commission's decision to use regression analyses to develop the
benchmarks ``leaves no room to argue that other approaches might be
used in whole or in part as a substitute to achieve the kinds of
constraints sought by the Commission,'' such as limiting new investment
based on depreciation of existing plant, as the Associations previously
proposed.
7. Contrary to the Rural Associations' allegations, the Commission
provided ample opportunities for parties to comment ``on specific
methods to be utilized'' to limit carriers expenses. In its February
2011 Notice of Proposed Rulemaking, 76 FR 11632, March 2, 2011, the
Commission explained that under then-existing rules, rate-of-return
carriers with high loop costs could have 100 percent of their marginal
loop costs above a certain threshold reimbursed through the federal
universal service fund while other carriers that took measures to
control expenses could find themselves losing support to carriers that
increased costs. Those effects, the Commission explained, meant that
the rules did not create appropriate incentives to control costs and
invest rationally. The Commission proposed to address these concerns by
using regression analyses to estimate appropriate levels of capital and
[[Page 16810]]
operating expenses, sought comment on this proposal, and adopted its
benchmarking rule after considering the comments received, including
those filed by the Rural Associations. The Commission found that the
approach it adopted is a ``reasonable way to place limits on recovery
of loop costs'' and specifically rejected the Rural Associations'
proposed alternative because it ``would do little to limit support for
capital expenses if past investments for a particular company were high
enough to be more than sufficient to provide supported services, and
would do nothing to limit support for operating expenses, which are on
average more than half of total loop costs.'' The Associations raise no
new arguments to change this conclusion, and therefore we reject their
petition to reconsider the adoption of benchmarks or the regression
approach generally.
8. Second, the Rural Associations ask the Commission to reconsider
its decision to change the caps annually based on a ``refreshed'' run
of the regression analyses, arguing that the Commission should instead
leave any caps in place for at least seven years. They argue that if
the regressions are updated each year, carriers could be encouraged to
invest less to avoid being affected by the caps because ``it appears
that a carrier could actually reduce or maintain existing investment
and expense levels during a given year but still suffer unexpected
reductions in its HCLS * * * if its `peer group' has changed or if its
existing peers have reduced their costs faster.''
9. Since filing their petition, the Rural Associations have
modified this request for relief. They no longer request that the
Commission freeze any regression-based caps for at least seven years.
Pending further updating and analysis of the regression methodology,
they urge the Commission to ``hold the caps constant for a period of
several years starting in 2014,'' and then analyze the regression
methodology ``to determine whether there are more optimal methods than
such a default rule to address concerns with respect to predictability
in the longer-term.''
10. We note, as an initial matter, that the Bureau chose to use the
same regression coefficients in 2013 as those calculated for 2012
during the phase-in of the initial benchmarks (i.e., it ``froze'' the
2012 coeffecients for 2013). Accordingly, carriers have been able to
determine their benchmarks, and estimate their support, throughout the
phase-in period. In effect, during the phase-in, the Bureau's approach
is consistent with the Rural Associations' request. In addition, as
discussed in more detail below, we direct the Bureau to revise the
benchmark methodology to generate a single cap for each study area;
these updated benchmarks will apply beginning in 2014. The issue before
us now, therefore, is how frequently the new benchmarks should be
updated beginning 2015.
11. As the Rural Associations recognize, the decision whether and
if so, how to freeze the expense benchmarks involves a number of
tradeoffs. On the one hand, as the Rural Associations point out, more
frequent updates create the possibility of changes in carriers' support
levels. If carriers cannot estimate likely future support levels with a
reasonable degree of certainty, frequent updates may deter even
efficient investment. On the other hand, in practice, annual updates
may produce only small changes for all or nearly all carriers. In fact,
a comparison of the 2012 benchmarks with 2013 benchmarks, calculated as
if the Bureau had not frozen the 2012 coefficients, shows that the
ratio of an individual carrier's costs to its caps in 2012 is strongly
predictive of whether the carrier would have been capped in 2013.
Moreover, if the benchmarks are updated less frequently, over time they
may fail to reflect industry-wide cost trends and cap carrier spending
at levels that are either too high or too low. And if the benchmarks
are updated infrequently, each update could cause larger and more
sudden changes in support levels, at least for a subset of carriers.
Updating the benchmarks less frequently also risks treating similarly
situated carriers differently based on the timing of their investments.
For example, a study area that has higher costs due to investment would
not have those investments reflected in its benchmark if its benchmark
cap were frozen. A freeze could therefore also distort carriers'
investment decisions by encouraging them to time their investments to
maximize their benchmarks rather than to invest efficiently. In
addition, while there are many potential means to limit the volatility
of the benchmarks from year to year, each potential approach would
have, necessarily, a different ultimate effect on each study area's
benchmarks, and thus its own costs and benefits.
12. In light of these considerations, we reconsider the
Commission's decision to the extent it requires the Bureau to update
the regressions annually. We direct the Bureau, as it updates the
benchmarks for 2014, to consider whether these benchmarks should be
held constant for multiple years, and, if so, which mechanism would
best advance our objectives to preserve and advance the deployment of
voice- and broadband-capable networks while providing better incentives
for carriers to invest prudently and operate efficiently. In doing so,
the Bureau should carefully consider the extent to which annual updates
are likely to cause significant year-over-year changes in support
levels. We expect the Bureau to adopt an approach that will provide
carriers sufficient certainty regarding future years' benchmarks to
encourage efficient investment while maintaining the balance struck in
the Commission's reforms to encourage efficient spending by HCLS
recipients.
13. Finally, the Rural Associations ask the Commission to
reconsider its decision regarding the reductions resulting from the
HCLS benchmarks and ``find instead that the entirety of those
reductions will be redistributed to other [rural carriers]--including
those impacted by new caps--within the overall capped HCLS mechanism.''
They argue that not redistributing reductions to capped carriers
results in a ``double cap'' on HCLS.
14. We decline to reconsider the Commission's decision to
redistribute HCLS only to those carriers whose loop costs are not
capped by the benchmarks. We find that providing additional support to
carriers with the highest costs relative to their peers is contrary to
the purposes of the benchmarking rule. Moreover, by providing
redistributed support only to carriers that are below their benchmarks,
the rule provides an additional incentive for carriers to operate
efficiently and keep costs below their caps. In addition, we note that
the Rural Associations appear to assume that by allowing carriers
capped by the benchmarks to receive redistributed support, they would
have the chance to recover ``more but still not all'' of their high
loop costs. To the contrary, the Rural Associations' proposal could
permit some carriers limited by the benchmarks to receive more in
redistributed support than they would lose through the benchmark
reductions.
15. While we disagree with the Rural Associations' proposal to
redistribute HCLS to carriers whose support is capped by the
benchmarks, we take this opportunity to clarify that there is no
``double cap'' on HCLS. That is, we clarify that all HCLS reductions
will be redistributed, though only to carriers whose loop costs are not
limited by the benchmarks. In discussing the proposed methodology for
creating benchmarks the Commission estimated that only approximately
half of the HCLS reductions experienced by carriers limited by the
benchmarks would be
[[Page 16811]]
redistributed. Other language in the USF/ICC Transformation Order made
clear, however, that the Commission was not mandating partial
redistribution. Specifically, the Commission said ``we will place
limits on the HCLS provided to carriers whose costs are significantly
higher than other companies that are similarly situated, and support
will be redistributed to those carriers whose unseparated loop cost is
not limited by operation of the benchmark methodology.'' We note that
under the phase-in adopted by the Bureau, all HCLS reductions were
redistributed in 2012. And now we clarify that all reductions will be
redistributed in future years as well.
b. Accipiter Petition
16. Accipiter argues that the Commission's decision to adopt cost
benchmarks is flawed because such benchmarks cannot distinguish between
carriers that ``may legitimately be outliers due to particular
considerations, including population density, terrain, and operating
environment,'' and carriers that ``are outliers due to waste, fraud or
abuse, or other inefficiencies.'' Accipiter claims the failure to make
this distinction is ``irrational'' and reflects a failure to consider
the specific challenges facing Accipiter and other carriers.
17. We disagree. The Commission's benchmarking approach is designed
precisely to compare each individual carrier's costs to those of
similarly situated carriers, accounting for the most significant
drivers of cost such as ``density, terrain, and operating
environment.'' It is reasonable for the Commission to adopt a general
rule to identify carriers with costs that are significantly higher than
most of their similarly situated peers instead of relying on more
costly and administratively burdensome alternatives such as audits.
Carriers that believe that the benchmarks do not adequately address
unique circumstances that they face can seek a waiver of the
Commission's rules. Accipiter's petition for reconsideration reads more
like a petition for waiver, and in fact, Accipiter sought, and the
Bureau granted, a temporary waiver of the benchmarking rule and other
new rules that would limit its support.
18. In its petition for reconsideration, Accipiter makes a variety
of other arguments that relate not to the Commission's rule as adopted,
but rather to the benchmarking methodology proposed in the USF/ICC
Transformation FNPRM, 76 FR 78384, December 16, 2011. But those
complaints are not relevant to our reconsideration of the Commission's
benchmarking rule. The Commission delegated to the Bureau the authority
to adopt and implement a final methodology, which the Bureau did in its
April 2012 HCLS Benchmarks Implementation Order. Several parties,
including Accipiter, filed separate applications for review of the
Bureau's HCLS Benchmarks Implementation Order. We turn to that order
now.
2. Applications for Review
19. We next address a number of arguments raised in the context of
applications for review of the Bureau's HCLS Benchmarks Implementation
Order, and we modify the Bureau's order in three respects.
Specifically, (1) we direct the Bureau to develop a regression
methodology that will generate a single total loop cost cap for each
study area beginning in 2014; (2) as an interim measure toward a single
cost cap, for purposes of calculating HCLS support in 2013, we sum
capex and opex caps generated by the Bureau's current methodology; and
(3) we modify the phase-in of the benchmarks for 2013. We do not
otherwise modify the Bureau's HCLS Benchmarks Implementation Order at
this time. In taking these actions, we address certain of the arguments
raised in the applications for review, and we defer consideration of
the other issues raised in those applications for review.
20. Single Total Cost Cap. Consistent with the Commission's
direction, the Bureau's HCLS Benchmarks Implementation Order generated
limits on reimbursable capital expenses and operating expenses for
purposes of determining HCLS; compared companies' costs to those of
similarly situated companies; and used statistical techniques to
determine which companies shall be deemed similarly situated.
Consistent with the Commission's delegation of authority, the Bureau
also considered and tested additional variables and made further
improvements to the methodology based on the comments from two peer
reviewers and interested parties, and its own analysis. The most
significant change in the methodology that the Bureau made was using
two regressions to generate only two caps for each company--a capex
limit and an opex limit--rather than generating eleven caps as
originally proposed in Appendix H of the USF/ICC Transformation FNPRM.
21. We agree with the Bureau's decision to use fewer regressions
than proposed in the USF/ICC Transformation FNPRM. The Bureau explained
that doing so ``enables carriers to account for the needs of individual
networks and recognizes the fact that carriers may have higher costs in
one category that may be offset by lower costs in others.'' The Bureau
adopted two regressions even though ``[u]sing a greater number of
regressions makes it possible to identify outliers at a granular
level.'' Although one peer reviewer and some commenters recommended
using a single regression to limit total cost, the Bureau decided that
approach ``would provide fewer safeguards against overspending.''
Because ``[c]apital and operating expenditures reflect fundamentally
different measures of business performance,'' the Bureau reasoned that
``[u]sing two regressions instead of one provides carriers flexibility
to manage their operations, while still enabling the Commission to
identify more instances where carriers spend markedly more in either
category than their similarly-situated peers.''
22. We agree with commenters that the Bureau's methodology was an
improvement over the proposed methodology that used eleven regressions,
and we recognize that there are trade-offs in choosing the number of
regressions. On balance, we conclude that going forward, it would be
better to use one regression to generate a single cap on total loop
costs for each study area. A single cap will provide carriers with
greater flexibility to account for the specific needs of their locales
and networks. This approach recognizes that carriers often consider the
trade-offs between capital costs and operating expenses when making
investment decisions. For example, in its Application for Review,
Central Texas argues that it ``balanced the costs of using aerial
cables against the costs of burying cable and determined that it costs
less overall to bury cable, rather than constantly maintain and replace
aerial cable in the windy, tough, varmint-ridden Texas terrain. By
keeping its cable maintenance costs low, Central Texas receives no
credit from the regression model for doing so even though it has much
lower operational expenditures.''
23. The record before the Bureau when it adopted two regressions
instead of eleven regressions also contained support for using a single
regression. For example, as noted above, one of the peer reviewers of
the benchmark methodology, Paroma Sanyal, stated that ``individual cost
capping [i.e. capping individual types of costs rather than total
costs] ignores any complementar[it]y or substitutability between the
various cost components,'' which may discourage overall cost-
[[Page 16812]]
minimization and fails to recognize that carriers face different trade-
offs between types of expenses. Sanyal suggested that ``[a] more
flexible approach may be to estimate the 90th percentile over the total
cost,'' which ``would be more in line with theoretical cost-
minimization approaches where * * * expenditure caps can enhance
efficiency under a rate-of-return regulation.'' Similarly, Roger
Koenker, one of the economists who developed quantile regression
analysis, opined that his ``primary criticism of the proposed FCC
methodology [in Appendix H] lies in the way that cost estimates for
individual cost components are aggregated. * * * A preferable, and
simpler, approach would be to develop one conditional quantile model
for aggregate costs.'' Koenker concluded that the proposed aggregation
of cost categories ``yields cost limits that may be unduly stringent in
some cases, and unduly lenient in others.''
24. For these reasons, we are persuaded that using a single total
loop cost benchmark would be preferable to using separate capex and
opex caps. Accordingly, we direct the Bureau to develop a regression
methodology that will generate a single cap for each study area. We
note that the Bureau also will be incorporating into its analysis
revised study area boundaries, which will be obtained through an
upcoming data collection. We direct the Bureau to analyze the impact of
various approaches prior to adopting its new methodology, which we
anticipate will be implemented for distribution of HCLS beginning in
2014.
25. Summing Capex and Opex Caps for 2013. We recognize that the
Bureau needs time to develop and seek comment on a new methodology, and
therefore, absent some interim measure, carriers would continue to
operate under two separate caps until 2014. We therefore conclude it is
appropriate to combine or ``sum'' the existing caps as an interim
measure. As a result, for purposes of providing HCLS, starting the
first full month after the effective date of this Order and for the
rest of 2013, we will account for the trade-offs carriers make between
capital expenditures and operating expenses by summing the capex and
opex caps as an interim measure. That is, we will add each study area's
capex and opex benchmarks together to establish a new limit on total
unseparated loop costs for purposes of determining HCLS. In the short
term, summing the capex and opex benchmarks together will provide an
administratively feasible means to recognize the trade-offs between
capital and operating expenses that carriers have made over time, while
the Bureau works to develop a new single-equation regression. We note
that external parties and one peer reviewer have expressed concern
about summing benchmarks based on quantiles. As a matter of statistics,
the sum of the quantiles is not the quantile of the sums, which is to
say that summing two 90th percentile benchmark caps does not produce
the same result as would setting a cap based on the 90th percentile of
total costs. Although summing is imperfect as an estimate of the 90th
percentile of overall costs, we find that as an interim measure it
provides a reasonable way to recognize that there are tradeoffs between
capital and operating expenditures. For example, to the extent a
carrier's costs are over the capex benchmark but under the opex
benchmark because it has made large investments to lower its operating
costs and overall costs, summing the benchmarks will provide additional
allowances for these expenditures.
26. Phase-In. We also slightly modify the phase-in of the HCLS
benchmarks adopted by the Bureau. Applications for review of the HCLS
Benchmarks Implementation Order ask us to either set it aside or delay
the implementation of the HCLS benchmarks until the Commission
addresses various concerns. Although we deny requests to delay the
implementation, we modify the phase-in to limit the amount by which any
one carrier's support may be reduced in 2013. In 2012, HCLS was reduced
by twenty-five percent of the difference between the support calculated
using the study area's reported cost per loop and the support as
limited by the benchmarks, unless that reduction would exceed ten
percent of the study area's support as otherwise would be calculated
based on NECA cost data. The Bureau's phase-in for 2013, as adopted in
HCLS Benchmarks Implementation Order, will reduce support by fifty
percent of the difference between the support calculated using the
study area's reported cost per loop and the support as limited by the
benchmarks in effect for 2013, but remove the limit on the total impact
on individual carriers. We maintain the Bureau's fifty percent phase-in
for 2013. However, starting the first full month after the effective
date of this Order and for the rest of 2013, we will limit the amount
of the reduction to no more than fifteen percent of the study area's
support as otherwise would be calculated based on NECA cost data,
absent implementation of the benchmark rule. We conclude that this
strikes a reasonable balance between continuing the phase-in of the
benchmark rule, while giving those carriers most heavily impacted
additional time to adjust, particularly as the Bureau updates the
benchmarks for 2014.
27. Other Issues. In this section we address a number of other
issues raised in the applications for review; we defer consideration of
the remaining issues to a future order.
28. Predictability. Several parties argue that the Bureau's
benchmark methodology results in support amounts that are unpredictable
in violation of section 254(b)(5) of the Communications Act of 1934, as
amended (the Act). Central Texas, for example, claims that the dynamic,
annually changing nature of the regression caps does not allow carriers
to predict future HCLS based on current and near-future expenditures.
And Accipiter argues that the results are so unpredictable that the
Bureau's methodology ``effectively prohibits companies from making
reasonable and rational investment decisions.'' We disagree.
29. As the United States Court of Appeals for the Fifth Circuit
explained in Alenco, the Commission can satisfy the statute by adopting
predictable rules that govern distribution of subsidies; its rules need
not provide precisely predictable funding amounts. Yet what these
parties seek is precisely the predictable funding amounts the statute
does not require. In any event, as noted above, the Bureau provided
that same regression coefficients would be used in 2013 as those
calculated for 2012 in order to ensure that carriers would be able to
calculate their benchmark caps for the phase-in period well in advance.
Accordingly, at least with respect 2012 and 2013, the carriers were, in
fact, provided with the certainty they request. And, as discussed
above, for 2014 and beyond, we direct the Bureau to revise its
methodology to set a single total cost benchmark for each study area
and to consider how frequently that regression should be updated. We do
so with the expectation that the Bureau will adopt an approach that
will provide carriers sufficient certainty regarding future years'
benchmarks to encourage efficient investment while maintaining the
balance struck in the Commission's reforms to encourage efficient
spending by HCLS recipients. For these reasons, we reject the claim
that the Bureau's order violates the Act because it provides
insufficient predictability.
30. Similarly-Situated Companies. We also disagree with the Rural
Associations' claim that the ``Bureau's methodology does not rely on
statistical analysis of `similarly situated'
[[Page 16813]]
companies, as the Commission's USF/ICC Transformation Order directed.
In fact, the actual formulas do not establish any comparator groups.''
They argue that the benchmark ``formulas impose limitations on
companies without regard to whether their per-unit costs are excessive
or relatively high compared to `peers.''' On the contrary, we find that
the Bureau's regression analysis was consistent with Commission's
direction. We note that the Rural Associations never explain how they
would propose to define ``similarly situated'' companies. We conclude
that the Bureau took a reasonable approach, taking into account all the
significant variables in determining the caps, in effect comparing each
company to all other companies to the degree to which the companies are
similar in regard to the variables found to be significant (i.e., the
degree to which they are similarly situated).
31. Trigger. We also reject the argument made by several parties in
their applications for review that ``a regression model should be used
only to trigger a harder look to determine whether a carrier's costs
were truly `inefficient.''' The Commission did not provide the Bureau
with the discretion to use the regression methodology in that manner.
Moreover, as explained above in the context of the petitions for
reconsideration, we conclude that it was reasonable for the Commission
to adopt a general rule to identify carriers with costs that are
significantly higher than their peers instead of relying on more costly
and burdensome approaches like audits, as would be required if the
regression methodology were used merely as a trigger.
32. Finally, while we have, in this Order, addressed a number of
significant issues raised in the applications for review, we recognize
that a number of issues remain pending. We otherwise defer
consideration of issues not addressed herein.
III. Limits on Total Per-Line High-Cost Support
33. We deny both petitions for reconsideration. In the USF/ICC
Transformation Order, the Commission concluded that a $250 cap would be
reasonable after finding that ``support drawn from limited public funds
in excess of $250 per-line monthly * * * should not be provided without
further justification.'' The Commission also noted that ``virtually all
(99 percent) of incumbent LEC study areas currently receiving
[universal service] support are under the $250 per-line monthly
limit.'' Even so, to provide affected carriers a measured transition,
the Commission delayed the implementation of the $250 cap for six
months to ``provide an opportunity for companies to make operational
changes, engage in discussions with their current lenders, and bring
any unique circumstances to the Commission's attention through the
waiver process.'' Moreover, after the six-month delay, the Commission
phased-in the $250 cap ``to ease the potential impact of this
transition.'' As a result, effective July 1, 2012, carriers subject to
the $250 cap received support of no more than $250 per-line plus two-
thirds the difference between their uncapped per-line amount and $250,
and effective July 1, 2013, carriers will receive no more than $250
per-line plus one-third the difference between their uncapped per-line
amount and $250 through June 30, 2014.
34. Petitioners have not presented any new evidence or arguments
that persuade us to reconsider adoption of the $250 per-line per month
cap. And, we disagree with the Rural Associations' claims that the
Commission failed to adequately explain the basis for adopting the $250
cap. The Commission provided a thorough, reasoned analysis of the basis
for adopting the $250 cap. By phasing-in the $250 cap, the Commission
also provided carriers time to adjust, while promoting the Commission's
goal of fiscal responsibility. Moreover, the USF/ICC Transformation
Order acknowledged that if there are unique circumstances, carriers
should utilize the waiver process. We recently modified and clarified
the Commission's guidance for the waiver process in our Fifth Order on
Reconsideration, 78 FR 3837, January 17, 2013.
35. We note that, in 2011, there were 26 incumbent study areas that
received $250 per month or more in per-line support. Of those 26 study
areas, the Commission has received nine waiver petitions arguing that
waiver of the cap is necessary for the company to continue to serve its
community; one of those petitions subsequently was withdrawn. That the
carriers serving the remaining study areas have not filed for waivers
suggests that the measured transition adopted by the Commission
provides an appropriate amount of time for affected companies to adjust
their operations without disrupting service to consumers.
36. We deny the requests of Accipiter and the Rural Associations
that the Commission apply the $250 cap ``on a prospective basis only.''
The Commission decided, after fully considering the record, that the
immediate adoption of the $250 cap would advance its goal of imposing
responsible fiscal limits on universal service support. Accipiter
claims that applying the cap ``to previously-incurred expenses is in no
way consistent with the Congressional directive that support be
`predictable,' and would punish carriers for reasonable investment
decisions that cannot be reversed to account for the Commission's new
rules.'' The Commission fully considered and rejected such arguments in
the USF/ICC Transformation Order, explaining that section 254 of the
Act ``does not create any entitlement or expectation that ETCs will
receive any particular level of support or even any support at all.''
In fact, ``there is no statutory provision or Commission rule that
provides companies with a vested right to continued receipt of support
at current levels, and [the Commission is] not aware of any other,
independent source of law that gives particular companies an
entitlement to ongoing USF support.'' In addition, the Commission
upheld the principle that universal service mechanisms be predictable
by adopting a measured transition to the implementation of the $250 cap
for all carriers that made clear how much support carriers could expect
to receive as the cap was phased in. As discussed above, rather than
``punish'' carriers for previously incurred expenses, the Commission
made efforts to ``ease the potential impact'' of the transition on all
carriers by delaying the implementation of the cap for six months,
phasing in the cap over a period of three years, and providing a waiver
process for those carriers that face unique circumstances.
IV. ICLS Corporate Operations Expense Cap
37. Accipiter and the Rural Associations provide no new evidence
and introduce no new arguments that persuade us to reverse or otherwise
modify this approach, and therefore we deny these petitions for
reconsideration. Accipiter claims that any immediate extension of the
corporate operations expense cap to ICLS will have ``devastating
financial implications'' on carriers that are in the process of growing
their operations to serve rural areas. Accipiter notes that
``[c]orporate operations expenses must be incurred before a carrier can
add its first line,'' while acknowledging that ``per-line corporate
operations costs are quickly averaged down as new subscribers are
added.'' But the Commission has already made accommodations for
carriers with limited subscribership. The Commission retained the rule
that permits carriers with 6,000 or fewer working loops to recover a
minimum
[[Page 16814]]
amount per working loop if they would receive less than that minimum
under the application of the ICLS corporate operations expense cap
formula (i.e., $42.337--(.00328 x number of total working loops)).
Specifically, such carriers can recover monthly for each working loop:
$63,000 divided by their total number of working loops. Moreover, if
carriers believe that due to their unique characteristics, they need to
recover more corporate operations expenses through ICLS than allowed
for under the cap, they remain free to petition for a waiver of the cap
pursuant to the Commission's waiver process.
38. The Rural Associations request that the Commission delay the
implementation of the ICLS corporate operations expense cap ``until no
sooner than January 1, 2013.'' They argue that the Commission should
not implement the corporate operations expense cap before carriers
``have adequate opportunity to adjust their operations for compliance''
with the new operating expense caps that the Commission proposed to
develop through regression analysis in the FNPRM. The Rural
Associations have not provided any evidence, however, demonstrating why
extending the HCLS corporate operations expense limit to ICLS was
inappropriate or why it would be necessary to delay a critical reform
that advances the Commission's goals of improving fiscal discipline and
accountability.
39. We also deny Accipiter's claim that the Commission violated 47
U.S.C. 254(b)(5) by applying the ICLS corporate operations expense cap
to support for 2012, which is determined with reference to 2010
expenses. The company argues that it ``reasonably and rationally made
decisions about 2010 investments and expenses based on the rules that
were in place in 2010.'' But as we discussed above and addressed
repeatedly in the USF/ICC Transformation Order, section 254 does not
entitle carriers to recover USF support simply because they expected to
receive that support. Accipiter does not cite any additional legal
authority that persuades us otherwise.
40. Finally, we are not persuaded by Accipiter's argument that a
``one size fits all rule,''--i.e., using a nationwide formula to cap
ICLS--is ``inappropriate and inflexible'' due to the variability in
corporate operations expenses between different regions in the country.
Accipiter has not provided any evidence to explain why a nationwide
formula is unreasonable. Indeed, the Commission has used a nationwide
formula to limit the recovery of corporate operations expenses for HCLS
ever since it adopted that corporate operations expense cap in 1997.
Accipiter has failed to explain how ICLS differs from HCLS in such a
way that it would be unreasonable for the Commission to extend the HCLS
nationwide formula to ICLS.
V. Implementation of Further Reforms for Rate-of-Return Carriers
41. Finally, we take this opportunity to address some general
arguments made by a number of rate-of-return carrier associations that
the Commission should undertake ``a careful data-driven process that
takes measure of * * * reforms just now being implemented,'' including
those reforms described above, ``in lieu of racing forward with
additional changes.'' Although we disagree with these carriers insofar
as they suggest we stop our implementation of the Commission's USF/ICC
Transformation Order, we agree that a careful data-driven process is
consistent with--and indeed critical to--that implementation. We
emphasize our continued commitment to such a process, and we direct the
Bureau, as it implements the modifications described above and proceeds
with other reforms adopted in the USF/ICC Transformation Order, to
continue taking all appropriate steps to seek input from affected
stakeholders, and gather relevant data on the effect of reforms as they
proceed. As an additional measure, we direct the Bureau to report to
the Commission, within two years of release of the USF/ICC
Transformation Order, i.e., November 18, 2013, on the progress of
implementation, and on the impact of reforms based on relevant,
available data at that time.
VI. Procedural Matters
A. Paperwork Reduction Act
42. This document does not contain proposed information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. In addition, therefore, it does not contain any new
or modified information collection burden for small business concerns
with fewer than 25 employees, pursuant to the Small Business Paperwork
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).
B. Final Regulatory Flexibility Act Certification
43. 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).
44. This document modifies and clarifies the benchmarking rule
adopted by the Commission in USF/ICC Transformation Order, and modifies
the Wireline Competition Bureau's implementation of that rule. These
modifications and clarifications do not create any burdens, benefits,
or requirements that were not addressed by the Final Regulatory
Flexibility Analysis attached to USF/ICC Transformation Order. The
Commission will send a copy of the Order including a copy of this final
certification, in a report to Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801(a)(1)(A).
In addition, the Order and this certification will be sent to the Chief
Counsel for Advocacy of the Small Business Administration, and will be
published in the Federal Register. See 5 U.S.C. 605(b).
C. Congressional Review Act
45. The Commission will send a copy of this Order to Congress and
the Government Accountability Office pursuant to the Congressional
Review Act.
D. Effective Date
46. We conclude that good cause exists to make this Order effective
immediately upon publication in the Federal Register, pursuant to
section 553(d)(3) of the Administrative Procedure Act. Agencies
determining whether there is good cause to make a rule revision take
effect less than 30 days after Federal Register publication must
balance the necessity for immediate implementation against principles
of fundamental fairness that require that all affected persons be
afforded a reasonable time to prepare for the effective date of a new
rule. As we note above, summing the capex and opex benchmarks together
is an important interim step to recognize the trade-offs that carriers
have made in investment, and will therefore mitigate or eliminate the
effect of the existing benchmarks cap mechanism on carriers that are
capped under one or the other
[[Page 16815]]
benchmark but not both. It will also reduce the amount of support
redistributed to uncapped carriers by a corresponding amount. Because
many more carriers receive redistributed support than are capped under
the existing mechanism, the effect of summing the caps on any carrier
receiving redistributed support will generally be much less significant
than the effect on those carriers that are currently capped. Moreover,
we note that high cost loop support is generally subject to true-ups
over time. Carriers, accordingly, generally have no certain expectation
of the precise amount of support they will receive. We conclude under
these circumstances that the public interest is best served by
immediate implementation of our new interim rule, and that, on balance
carriers that will experience a minor reduction in redistributed
support do not require additional time to prepare for implementation of
a rule change that affects them only modestly.
47. In addition, we modified the phase-in of the HCLS benchmarks to
limit the amount of reduction of support to no more than fifteen
percent of the study area's support absent implementation of the
benchmark rule to give carriers that are heavily impacted by the
benchmarks more time to adjust. We find that implementing the
modification to the phase-in as expeditiously as possible furthers the
Commission's objective of ensuring that carriers experience a more
gradual implementation of the benchmarks overall which obviates the
necessity of providing carriers additional 30 day notice before
implementation.
VII. Ordering Clauses
48. 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 Sixth Order on Reconsideration is adopted,
effective upon publication of the text or summary thereof in the
Federal Register.
49. 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, that the Petition for Reconsideration filed by the
National Exchange Carrier Association, Inc., Organization for the
Promotion and Advancement of Small Telecommunications Companies, and
Western Telecommunications Alliance on December 29, 2011 is granted in
part to the extent described herein, and is denied in part to the
extent described herein.
50. 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, that the Petition for Reconsideration filed by
Accipiter Communications Inc. on December 29, 2011 is denied in part to
the extent described herein.
51. It is further ordered that, pursuant to the authority contained
in section 155(c) of the Communications Act of 1934, as amended, 47
U.S.C. 155(c) and Sec. Sec. 0.291 and 1.115 of the Commission's rules,
47 CFR 0.291 and 1.115, that the Application for Review filed by
Central Texas Telephone Cooperative, Inc. on May 25, 2012 is granted in
part to the extent described herein, and is denied in part to the
extent described herein.
52. It is further ordered that, pursuant to the authority contained
in section 155(c) of the Communications Act of 1934, as amended, 47
U.S.C. 155(c) and Sec. Sec. 0.291 and 1.115 of the Commission's rules,
47 CFR 0.291 and 1.115, that the Application for Review filed by the
National Exchange Carrier Association, Inc., National
Telecommunications Cooperative Association, Organization for the
Promotion and Advancement of Small Telecommunications Companies, and
Western Telecommunications Alliance on May 25, 2012 is denied in part
to the extent described herein.
53. It is further ordered that, pursuant to the authority contained
in section 155(c) of the Communications Act of 1934, as amended, 47
U.S.C. 155(c) and Sec. Sec. 0.291 and 1.115 of the Commission's rules,
47 CFR 0.291 and 1.115, that the Application for Review filed by East
Ascension Telephone Company, LLC on May 25, 2012 is denied in part to
the extent described herein.
54. It is further ordered that, pursuant to the authority contained
in section 155(c) of the Communications Act of 1934, as amended, 47
U.S.C. 155(c) and Sec. Sec. 0.291 and 1.115 of the Commission's rules,
47 CFR 0.291 and 1.115, that the Application for Review filed by Silver
Star Telephone Company, Inc. on May 25, 2012 is granted in part to the
extent described herein, and is denied in part to the extent described
herein.
55. It is further ordered that, pursuant to the authority contained
in section 155(c) of the Communications Act of 1934, as amended, 47
U.S.C. 155(c) and Sec. Sec. 0.291 and 1.115 of the Commission's rules,
47 CFR 0.291 and 1.115, that the Supplement to Application for Review
filed by Silver Star Telephone Company, Inc. on June 22, 2012 is
granted in part to the extent described herein, and is denied in part
to the extent described herein.
56. It is further ordered that, pursuant to the authority contained
in section 155(c) of the Communications Act of 1934, as amended, 47
U.S.C. 155(c) and Sec. Sec. 0.291 and 1.115 of the Commission's rules,
47 CFR 0.291 and 1.115, that the Application for Review filed by Blue
Valley Telephone Telecommunications, Inc. on June 22, 2012 is granted
in part to the extent described herein, and is denied in part to the
extent described herein.
57. It is further ordered that, pursuant to the authority contained
in section 155(c) of the Communications Act of 1934, as amended, 47
U.S.C. 155(c) and Sec. Sec. 0.291 and 1.115 of the Commission's rules,
47 CFR 0.291 and 1.115, that the Application for Review filed by
Blooston Rural Broadband Carriers on May 25, 2012 is granted in part to
the extent described herein, and is denied in part to the extent
described herein.
58. It is further ordered that, pursuant to the authority contained
in section 155(c) of the Communications Act of 1934, as amended, 47
U.S.C. 155(c) and Sec. Sec. 0.291 and 1.115 of the Commission's rules,
47 CFR 0.291 and 1.115, that the Application for Review filed by
Accipiter Communications Inc. on May 25, 2012 is granted in part to the
extent described herein, and is denied in part to the extent described
herein.
59. It is further ordered that, pursuant to the authority contained
in section 155(c) of the Communications Act of 1934, as amended, 47
U.S.C. 155(c) and Sec. Sec. 0.291 and 1.115 of the Commission's rules,
47 CFR 0.291 and 1.115, that the Application for Review filed by United
States Telecom Association on June 22, 2012 is granted in part to the
extent described herein, and is denied in part to the extent described
herein.
60. 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).
61. It is further ordered, that the Commission's Consumer and
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.
[[Page 16816]]
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2013-06322 Filed 3-18-13; 8:45 am]
BILLING CODE 6712-01-P