Connect America Fund, ETC Annual Reports and Certifications, Rural Broadband Experiments, 21272-21275 [2016-07718]
Download as PDF
21272
Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Rules and Regulations
associated with the severe shoaling
occurring in the area. This rule is
categorically excluded from further
review under paragraph 34(g) of Figure
2–1 of the Commandant Instruction. An
environmental analysis checklist
supporting this determination and a
Categorical Exclusion Determination are
available in the docket where indicated
under ADDRESSES. We seek any
comments or information that may lead
to the discovery of a significant
environmental impact from this rule.
List of Subjects in 33 CFR Part 165
Harbors, Marine safety, Navigation
(water), Reporting and recordkeeping
requirements, Security measures, and
Waterways.
For the reasons discussed in the
preamble, the Coast Guard amends 33
CFR part 165 as follows:
PART 165—REGULATED NAVIGATION
AREAS AND LIMITED ACCESS AREAS
1. The authority citation for part 165
continues to read as follows:
■
Authority: 33 U.S.C. 1231; 50 U.S.C. 191;
33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5;
Department of Homeland Security Delegation
No. 0170.1.
2. Add temporary § 165.T11–0194 to
read as follows:
■
jstallworth on DSK7TPTVN1PROD with RULES
§ 165.T11–0194 Safety Zone; Santa Cruz
Harbor Shoaling, Santa Cruz, CA.
(a) Location. This safety zone is
established in the navigable waters of
the Monterey Bay near the Santa Cruz
Harbor Entrance in Santa Cruz, CA as
depicted in National Oceanic and
Atmospheric Administration (NOAA)
Chart 18685. The safety zone applies to
the navigable waters of the entrance of
Santa Cruz Harbor as defined by the
area contained with two borders: A
northern border defined by the line
created by extending the Santa Cruz
Harbor boat launch ramp to the harbor’s
opposite shore and a southern border
defined by the line connecting the end
points of the Santa Cruz Harbor East
Breakwater to Santa Cruz Harbor West
Breakwater as depicted in National
Oceanic and Atmospheric
Administration (NOAA) Chart 18685.
This emergency safety zone will be
effective immediately upon
promulgation until 10 p.m. on May 1,
2016, or until the completion of
emergency dredging. The Coast Guard
will issue a Broadcast Notice to
Mariners upon the completion of
emergency dredging and the
deactivation of the safety zone. This
safety zone is meant for safety of all
vessels transiting the harbor. This
restricted area in the harbor is necessary
VerDate Sep<11>2014
14:13 Apr 08, 2016
Jkt 238001
to protect vessels, and other property
from the hazards associated with severe
shoaling. The Coast Guard has issued
notice to mariners warning of significant
shoaling at the harbor entrance that may
result in breaking surf between jetties.
(b) Enforcement period. The safety
zone described in paragraph (a) of this
section will be enforced immediately
upon promulgation until 10 p.m. on
May 1, 2016, or upon the completion of
emergency dredging. The Coast Guard
will issue a Broadcast Notice to
Mariners upon the completion of
emergency dredging and the
deactivation of the safety zone. The
Captain of the Port San Francisco
(COTP) will notify the maritime
community of periods during which this
zone will be enforced via Broadcast
Notice to Mariners in accordance with
33 CFR 165.7.
(c) Definitions. As used in this
section, ‘‘designated representative’’
means a Coast Guard Patrol
Commander, including a Coast Guard
coxswain, petty officer, or other officer
on a Coast Guard vessel or a Federal,
State, or local officer designated to assist
in the enforcement of the safety zones.
(d) Regulations. (1) Under the general
regulations in 33 CFR part 165, subpart
C, entry into, transiting or anchoring
within this safety zone is prohibited
unless authorized by the COTP or a
designated representative.
(2) The safety zone is closed to all
vessel traffic, except as may be
permitted by the COTP or a designated
representative.
(3) Vessel operators desiring to enter
or operate within the safety zone must
contact the COTP or a designated
representative to obtain permission to
do so. Vessel operators given permission
to enter or operate in the safety zone
must comply with all directions given to
them by the COTP or a designated
representative. Persons and vessels
requesting permission to enter the safety
zone from 9 a.m. to 5 p.m. may contact
the Harbor Master on VHF–9 or via
telephone at (831) 475–6161; or through
the 24-hour Command Center at
telephone (415) 399–3547.
Dated: March 18, 2016.
Gregory G. Stump,
Captain, U.S. Coast Guard, Captain of the
Port San Francisco.
[FR Doc. 2016–08220 Filed 4–8–16; 8:45 am]
BILLING CODE 9110–04–P
PO 00000
Frm 00050
Fmt 4700
Sfmt 4700
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 54
[WC Docket Nos. 10–90, 14–58, 14–259; FCC
16–28]
Connect America Fund, ETC Annual
Reports and Certifications, Rural
Broadband Experiments
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
In this document, the Federal
Communications Commission
(Commission) clarifies that price cap
carriers can use Phase II model-based
support to serve locations in eligible
census blocks where the price cap
carrier has served or intends to serve a
location or locations using Phase I
Round 2 incremental support. The
Commission also makes several
modifications to the letter of credit
requirements for recipients of rural
broadband experiment support.
DATES: Effective May 11, 2016.
FOR FURTHER INFORMATION CONTACT:
Alexander Minard, Wireline
Competition Bureau, (202) 418–7400 or
TTY: (202) 418–0484.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Order in
WC Docket No. 10–90, 14–58 and 14–
259; FCC 16–28, adopted on March 8,
2016 and released on March 9, 2016.
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/2016/db0309/FCC-1628A1.pdf.
SUMMARY:
I. Introduction
1. In this Order the Commission
clarifies that price cap carriers can use
Phase II model-based support to serve
locations in eligible census blocks
where the price cap carrier has served
or intends to serve a location or
locations using Phase I Round 2
incremental support. The Commission
also makes several modifications to the
letter of credit requirements for
recipients of rural broadband
experiment support.
II. Interplay Between Phase I
Incremental Support and Phase II
2. In 2013, the Commission instructed
price cap carriers to meet their Phase I
Round 2 incremental support
obligations by deploying service to
locations outside of the census blocks
E:\FR\FM\11APR1.SGM
11APR1
jstallworth on DSK7TPTVN1PROD with RULES
Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Rules and Regulations
where they will receive Phase II
support. The intent was to take steps to
ensure that Connect America funds are
used ‘‘in the most efficient manner
possible’’ and to ‘‘avoid providing
excess support in an area.’’
Subsequently, in December 2014, the
Commission adopted a requirement that
price cap carriers accepting modelbased support annually submit a list of
the geo-coded locations that are newly
broadband-capable as a result of Phase
II funding.
3. On April 29, 2015, the Wireline
Competition Bureau (Bureau)
announced the final details of the offer
of Phase II model-based support to price
cap carriers, setting an August 27, 2015
deadline to accept or decline the offer.
Ten carriers accepted over $1.5 billion
in annual support to provide broadband
to nearly 7.3 million consumers in 45
states and the Commonwealth of the
Northern Mariana Islands.
4. Discussion. The Commission now
clarifies that in light of the adoption of
the geo-coded location reporting
requirement for recipients of Phase II
model-based support, if a price cap
carrier has served or intends to serve a
location or locations using Phase I
Round 2 incremental support in a
census block where that price cap
carrier accepted Phase II model-based
support, that price cap carrier may use
Phase II model-based support to serve
the remaining eligible locations within
that census block. Because it would be
an inefficient use of Connect America
support to permit a price cap carrier to
receive both Phase I incremental and
Phase II model-based support to serve a
single location, however, the price cap
carrier may not count the locations it
serves using Phase I Round 2
incremental support towards its Phase II
obligation to serve a set number of
locations within the state. Accordingly,
if the price cap carrier is using Phase I
Round 2 funding to upgrade, or has
already upgraded, specific locations in
census blocks that were part of the offer
of model-based support, it will need to
deploy service to other locations in
Phase II eligible census blocks or
extremely high-cost census blocks in the
state to fulfill its Phase II model-based
support obligation to serve a specific
number of locations.
5. The Commission directs the
Universal Service Administrative
Company (USAC) to compare the list of
geocoded locations that price cap
carriers submit for their Phase II
deployment obligation, with the list of
geocoded locations that price cap
carriers must submit to indicate the
locations which they have served or will
serve to satisfy their Phase I Round 2
VerDate Sep<11>2014
14:13 Apr 08, 2016
Jkt 238001
obligation. If USAC determines that a
price cap carrier has included in its list
of Phase II locations any locations that
the price cap carrier indicated it has
deployed to or will deploy to using
Phase I Round 2 incremental support,
that price cap carrier will be deemed to
have not met its Phase II model-based
support build-out obligation and will be
subject to the applicable noncompliance measures.
6. The Commission makes this modest
adjustment to its earlier conclusion that
price cap carriers could not use Phase
I Round 2 support to serve locations in
census blocks where they receive Phase
II support because at the time the
Commission made these statements, it
had not yet adopted the more granular
reporting requirements for price cap
carriers accepting Phase II support to
identify the locations they have served
using Phase II support. The Bureau and
USAC will now have access to geocoded
information for each location that a
price cap carrier serves using Phase I
Round 2 and using Phase II support, and
thus can verify in a more targeted
manner that support is being used
efficiently on a location-by-location
basis rather than on a census block-bycensus block basis.
III. Rural Broadband and Experiments
7. Before a provisionally selected
bidder may be authorized to begin
receiving support, it must obtain a letter
of credit that meets the Commission’s
requirements. Under those existing
requirements, throughout the 10-year
support term, the letter of credit must be
valued at an amount equal to the total
amount of support that has been
disbursed plus the amount of support
the recipient will receive in the next
disbursement. Rural broadband
experiment recipients must maintain an
open and renewed letter of credit until
120 days after the support term has
ended. They must build out to 85
percent of locations with voice and
broadband service meeting the relevant
public interest obligations by year three
and to 100 percent of locations by year
five of their support term. Recipients
receive their rural broadband
experiment support in equal monthly
installments over the 10-year term, but
they were given the opportunity to
request 30 percent of their support
upfront. Recipients that elected this
option are required to build out to at
least 25 percent of the required number
of locations within 15 months of their
first disbursement of support.
8. Discussion. The Commission grants
the Alliance of Rural Broadband
Applicants (ARBA) petition for waiver
in part to the extent the ARBA sought
PO 00000
Frm 00051
Fmt 4700
Sfmt 4700
21273
a reduction in the duration of the letter
of credit requirement and asked that
rural broadband experiment recipients
be released from their letter of credit
obligations upon satisfying their
deployment obligations. In response to
concerns raised about the cost of
maintaining a letter of credit for the
entire support period, the Commission
will require that the letter of credit only
remain open until the recipient has
certified that it has deployed broadband
and voice service meeting the
Commission’s requirements to 100
percent of the required number of
locations, and USAC has validated that
the entity has fully deployed its
network. The Commission concludes
that such an approach will help
alleviate the costs of obtaining a letter
of credit, particularly for entities that
are able to build out their networks
faster than the five-year build-out
period, while still protecting the
Commission’s ability to recover the
funds in the event that the entity is not
building out its network as required.
This approach is consistent with the
approach used for Mobility Fund Phase
I and Tribal Mobility Fund Phase I,
where an entity is required to maintain
a letter of credit valued at the support
that had been disbursed until the
Commission verifies that the build-out
has been completed. As a result,
authorized rural broadband experiment
recipients must only maintain their
letter of credit until it is verified that the
final build-out milestone has been met.
9. Recognizing that the risk of a
default will lessen as a recipient makes
progress towards building its network,
the Commission also finds that it is
appropriate to modestly reduce the
value of the letter of credit in an effort
to reduce the cost of maintaining a letter
of credit as the recipient meets certain
build-out milestones. Once recipients
have met the 85 percent build-out
milestone, the Commission will also
permit those recipients to obtain a new
or renew their existing letters of credit
so that they are valued at 80 percent of
the total support disbursed plus the next
year of support until the 100 percent
build-out milestone has been met and
verified. The Commission concludes
that the benefit to recipients of
potentially decreasing the cost of the
letter of credit as it becomes less likely
that a recipient will default outweighs
the potential risk that if a recipient does
default and is unable to cure, the
Commission will be unable to recover a
modest amount of support.
10. Once a rural broadband
experiment recipient has certified that it
has deployed broadband and voice
service meeting the Commission’s
E:\FR\FM\11APR1.SGM
11APR1
jstallworth on DSK7TPTVN1PROD with RULES
21274
Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Rules and Regulations
requirements to 100 percent of the
required number of locations and
supplied the geocoded data for the final
locations, it must keep the letter of
credit open until the Commission can
verify that the deployment has been
met. The Commission directs USAC to
implement processes to verify in a
timely manner that deployment has
occurred. Once a rural broadband
experiment recipient no longer
maintains a letter of credit, the
Commission will withhold support as
described in the Rural Broadband
Experiments Order, 79 FR 45705,
August 6, 2014, if the Commission finds
that the rural broadband experiment
recipient is not providing voice and
broadband service that meets the
Commission’s requirements to the
funded locations. If after the year cure
period, the rural broadband experiment
recipient is still not providing service
that meets the Commission’s
requirements to all of the required
locations, the Commission will
withhold from the entity a percentage of
support equivalent to the entity’s
compliance gap until it comes into
compliance, rather than recover 100
percent of the support as originally
contemplated when the Commission
expected that the entity would have a
letter of credit in place for the entire
support period. If the entity cures the
default before the 10-year support term
has ended, it will be entitled to the
withheld support and any subsequent
payments.
11. The Commission concludes that it
is not necessary to continue to require
rural broadband experiment recipients
to maintain a letter of credit after the
build-out period to provide an adequate
incentive for rural broadband
experiment recipients to offer service
that meets the Commission’s
requirements. The Commission notes
that rural broadband experiment
recipients remain subject to forfeitures
and other consequences for noncompliance in the event of a default,
including but not limited to, potential
revocation of ETC designation and
disqualification from future competitive
bidding for universal service support.
12. The Commission also grants
ARBA’s petition in part to the extent
that it requests that entities that elected
to receive 30 percent of their payment
upfront be permitted to amend their
applications to propose the standard
deployment time period. The
Commission adopted the requirement
that entities specify whether they would
be interested in receiving 30 percent of
their support upfront in their
applications so that the Commission
could learn about whether there was
VerDate Sep<11>2014
14:13 Apr 08, 2016
Jkt 238001
interest in upfront support for the Phase
II competitive bidding process. To help
reduce the costs of the letter of credit
requirement for entities that have
elected upfront support, the
Commission will permit such entities
that have not already been authorized to
receive rural broadband experiment
support to send a letter to the
Commission electing to receive support
in equal installments throughout the 10year term rather than 30 percent upfront
before they are authorized to begin
receiving support. If they elect this
option before they are authorized, they
will no longer be required to deploy to
25 percent of locations and submit the
required certifications within 15 months
of their first disbursement of support.
To the extent provisionally selected
bidders decide they still want to receive
30 percent of their support upfront they
will need to obtain a letter of credit that
covers this amount.
13. The Commission denies ARBA’s
petition in part to the extent it requests
that the Commission reduce the value of
the letter of credit to 50 percent of
support. Such an approach would
prevent the Commission from
recovering half of the Connect America
support that it will disburse to rural
broadband experiment recipients during
the build-out period in the event that
such support is not used for its intended
purposes. While such an approach may
reduce costs further for recipients, the
Commission is not persuaded that the
public interest will be better served by
protecting only half of the Connect
America support, particularly when the
Commission has adopted other
measures to help reduce the costs of
maintaining a letter of credit for rural
broadband experiment recipients.
IV. Procedural Matters
A. Paperwork Reduction Act Analysis
14. 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. Congressional Review Act
15. The Commission will send a copy
of this Order to Congress and the
Government Accountability Office
pursuant to the Congressional Review
Act.
PO 00000
Frm 00052
Fmt 4700
Sfmt 4700
C. Final Regulatory Flexibility Act
Certification
16. The Regulatory Flexibility Act of
1980, as amended (RFA), requires that a
regulatory flexibility analysis be
prepared for rulemaking proceedings,
unless the agency certifies that ‘‘the rule
will not have a significant economic
impact on a substantial number of small
entities.’’ The RFA generally defines
‘‘small entity’’ as having the same
meaning as the terms ‘‘small business,’’
‘‘small organization,’’ and ‘‘small
governmental jurisdiction.’’ In addition,
the term ‘‘small business’’ has the same
meaning as the term ‘‘small business
concern’’ under the Small Business Act.
A small business concern is one which:
(1) Is independently owned and
operated; (2) is not dominant in its field
of operation; and (3) satisfies any
additional criteria established by the
Small Business Administration (SBA).
17. This Order modifies and clarifies
the rules adopted by the Commission in
the Rural Broadband Experiments
Order, the Phase I Round 2 Order, 78 FR
38227, June 26, 2013 and the USF/ICC
Transformation Order, 76 FR 73830,
November 29, 2011. 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 and the Rural Broadband
Experiments Order. Therefore, the
Commission certifies that the
requirements of this Order will not have
a significant economic impact on a
substantial number of small entities.
The Commission will send a copy of the
Order including a copy of this final
certification in a report to Congress
pursuant to the Small Business
Regulatory Enforcement Fairness Act of
1996. 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.
D. Additional Information
18. People with Disabilities. To
request materials in accessible formats
for people with disabilities (braille,
large print, electronic files, audio
format), send an email to fcc504@fcc.gov
or call the Consumer & Governmental
Affairs Bureau at 202–418–0530 (voice),
202–418–0432 (tty).
19. Additional Information. For
additional information on this
proceeding, contact Alexander Minard
of the Wireline Competition Bureau,
Telecommunications Access Policy
Division, Alexander.Minard@fcc.gov,
(202) 418–7400.
E:\FR\FM\11APR1.SGM
11APR1
Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 / Rules and Regulations
V. Ordering Clauses
jstallworth on DSK7TPTVN1PROD with RULES
20. Accordingly, it is ordered,
pursuant to the authority contained in
sections 1, 2, 4(i), 5, 10, 214, 218–220,
254, 303(r), 403, and 503 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), 155, 160, 214,
218–220, 254, 303(r), 403, 503, 1302,
and sections 1.1, and 1.427 of the
Commission’s rules, 47 CFR 1.1, and
1.427, that this order is adopted,
effective thirty (30) days after
VerDate Sep<11>2014
14:13 Apr 08, 2016
Jkt 238001
publication of the text or summary
thereof in the Federal Register.
21. It is further ordered that, pursuant
to section 1.3 of the Commission’s rules,
47 CFR 1.3, the Petition for Waiver filed
by the Alliance of Rural Broadband
Applicants on January 27, 2015 is
granted in part and denied in part to the
extent described herein.
22. 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).
PO 00000
Frm 00053
Fmt 4700
Sfmt 9990
21275
23. 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 Act Certification,
to the Chief Counsel for Advocacy of the
Small Business Administration.
Federal Comunications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2016–07718 Filed 4–8–16; 8:45 am]
BILLING CODE 6712–01–P
E:\FR\FM\11APR1.SGM
11APR1
Agencies
[Federal Register Volume 81, Number 69 (Monday, April 11, 2016)]
[Rules and Regulations]
[Pages 21272-21275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-07718]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket Nos. 10-90, 14-58, 14-259; FCC 16-28]
Connect America Fund, ETC Annual Reports and Certifications,
Rural Broadband Experiments
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission
(Commission) clarifies that price cap carriers can use Phase II model-
based support to serve locations in eligible census blocks where the
price cap carrier has served or intends to serve a location or
locations using Phase I Round 2 incremental support. The Commission
also makes several modifications to the letter of credit requirements
for recipients of rural broadband experiment support.
DATES: Effective May 11, 2016.
FOR FURTHER INFORMATION CONTACT: Alexander Minard, Wireline Competition
Bureau, (202) 418-7400 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
in WC Docket No. 10-90, 14-58 and 14-259; FCC 16-28, adopted on March
8, 2016 and released on March 9, 2016. 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/2016/db0309/FCC-16-28A1.pdf.
I. Introduction
1. In this Order the Commission clarifies that price cap carriers
can use Phase II model-based support to serve locations in eligible
census blocks where the price cap carrier has served or intends to
serve a location or locations using Phase I Round 2 incremental
support. The Commission also makes several modifications to the letter
of credit requirements for recipients of rural broadband experiment
support.
II. Interplay Between Phase I Incremental Support and Phase II
2. In 2013, the Commission instructed price cap carriers to meet
their Phase I Round 2 incremental support obligations by deploying
service to locations outside of the census blocks
[[Page 21273]]
where they will receive Phase II support. The intent was to take steps
to ensure that Connect America funds are used ``in the most efficient
manner possible'' and to ``avoid providing excess support in an area.''
Subsequently, in December 2014, the Commission adopted a requirement
that price cap carriers accepting model-based support annually submit a
list of the geo-coded locations that are newly broadband-capable as a
result of Phase II funding.
3. On April 29, 2015, the Wireline Competition Bureau (Bureau)
announced the final details of the offer of Phase II model-based
support to price cap carriers, setting an August 27, 2015 deadline to
accept or decline the offer. Ten carriers accepted over $1.5 billion in
annual support to provide broadband to nearly 7.3 million consumers in
45 states and the Commonwealth of the Northern Mariana Islands.
4. Discussion. The Commission now clarifies that in light of the
adoption of the geo-coded location reporting requirement for recipients
of Phase II model-based support, if a price cap carrier has served or
intends to serve a location or locations using Phase I Round 2
incremental support in a census block where that price cap carrier
accepted Phase II model-based support, that price cap carrier may use
Phase II model-based support to serve the remaining eligible locations
within that census block. Because it would be an inefficient use of
Connect America support to permit a price cap carrier to receive both
Phase I incremental and Phase II model-based support to serve a single
location, however, the price cap carrier may not count the locations it
serves using Phase I Round 2 incremental support towards its Phase II
obligation to serve a set number of locations within the state.
Accordingly, if the price cap carrier is using Phase I Round 2 funding
to upgrade, or has already upgraded, specific locations in census
blocks that were part of the offer of model-based support, it will need
to deploy service to other locations in Phase II eligible census blocks
or extremely high-cost census blocks in the state to fulfill its Phase
II model-based support obligation to serve a specific number of
locations.
5. The Commission directs the Universal Service Administrative
Company (USAC) to compare the list of geocoded locations that price cap
carriers submit for their Phase II deployment obligation, with the list
of geocoded locations that price cap carriers must submit to indicate
the locations which they have served or will serve to satisfy their
Phase I Round 2 obligation. If USAC determines that a price cap carrier
has included in its list of Phase II locations any locations that the
price cap carrier indicated it has deployed to or will deploy to using
Phase I Round 2 incremental support, that price cap carrier will be
deemed to have not met its Phase II model-based support build-out
obligation and will be subject to the applicable non-compliance
measures.
6. The Commission makes this modest adjustment to its earlier
conclusion that price cap carriers could not use Phase I Round 2
support to serve locations in census blocks where they receive Phase II
support because at the time the Commission made these statements, it
had not yet adopted the more granular reporting requirements for price
cap carriers accepting Phase II support to identify the locations they
have served using Phase II support. The Bureau and USAC will now have
access to geocoded information for each location that a price cap
carrier serves using Phase I Round 2 and using Phase II support, and
thus can verify in a more targeted manner that support is being used
efficiently on a location-by-location basis rather than on a census
block-by-census block basis.
III. Rural Broadband and Experiments
7. Before a provisionally selected bidder may be authorized to
begin receiving support, it must obtain a letter of credit that meets
the Commission's requirements. Under those existing requirements,
throughout the 10-year support term, the letter of credit must be
valued at an amount equal to the total amount of support that has been
disbursed plus the amount of support the recipient will receive in the
next disbursement. Rural broadband experiment recipients must maintain
an open and renewed letter of credit until 120 days after the support
term has ended. They must build out to 85 percent of locations with
voice and broadband service meeting the relevant public interest
obligations by year three and to 100 percent of locations by year five
of their support term. Recipients receive their rural broadband
experiment support in equal monthly installments over the 10-year term,
but they were given the opportunity to request 30 percent of their
support upfront. Recipients that elected this option are required to
build out to at least 25 percent of the required number of locations
within 15 months of their first disbursement of support.
8. Discussion. The Commission grants the Alliance of Rural
Broadband Applicants (ARBA) petition for waiver in part to the extent
the ARBA sought a reduction in the duration of the letter of credit
requirement and asked that rural broadband experiment recipients be
released from their letter of credit obligations upon satisfying their
deployment obligations. In response to concerns raised about the cost
of maintaining a letter of credit for the entire support period, the
Commission will require that the letter of credit only remain open
until the recipient has certified that it has deployed broadband and
voice service meeting the Commission's requirements to 100 percent of
the required number of locations, and USAC has validated that the
entity has fully deployed its network. The Commission concludes that
such an approach will help alleviate the costs of obtaining a letter of
credit, particularly for entities that are able to build out their
networks faster than the five-year build-out period, while still
protecting the Commission's ability to recover the funds in the event
that the entity is not building out its network as required. This
approach is consistent with the approach used for Mobility Fund Phase I
and Tribal Mobility Fund Phase I, where an entity is required to
maintain a letter of credit valued at the support that had been
disbursed until the Commission verifies that the build-out has been
completed. As a result, authorized rural broadband experiment
recipients must only maintain their letter of credit until it is
verified that the final build-out milestone has been met.
9. Recognizing that the risk of a default will lessen as a
recipient makes progress towards building its network, the Commission
also finds that it is appropriate to modestly reduce the value of the
letter of credit in an effort to reduce the cost of maintaining a
letter of credit as the recipient meets certain build-out milestones.
Once recipients have met the 85 percent build-out milestone, the
Commission will also permit those recipients to obtain a new or renew
their existing letters of credit so that they are valued at 80 percent
of the total support disbursed plus the next year of support until the
100 percent build-out milestone has been met and verified. The
Commission concludes that the benefit to recipients of potentially
decreasing the cost of the letter of credit as it becomes less likely
that a recipient will default outweighs the potential risk that if a
recipient does default and is unable to cure, the Commission will be
unable to recover a modest amount of support.
10. Once a rural broadband experiment recipient has certified that
it has deployed broadband and voice service meeting the Commission's
[[Page 21274]]
requirements to 100 percent of the required number of locations and
supplied the geocoded data for the final locations, it must keep the
letter of credit open until the Commission can verify that the
deployment has been met. The Commission directs USAC to implement
processes to verify in a timely manner that deployment has occurred.
Once a rural broadband experiment recipient no longer maintains a
letter of credit, the Commission will withhold support as described in
the Rural Broadband Experiments Order, 79 FR 45705, August 6, 2014, if
the Commission finds that the rural broadband experiment recipient is
not providing voice and broadband service that meets the Commission's
requirements to the funded locations. If after the year cure period,
the rural broadband experiment recipient is still not providing service
that meets the Commission's requirements to all of the required
locations, the Commission will withhold from the entity a percentage of
support equivalent to the entity's compliance gap until it comes into
compliance, rather than recover 100 percent of the support as
originally contemplated when the Commission expected that the entity
would have a letter of credit in place for the entire support period.
If the entity cures the default before the 10-year support term has
ended, it will be entitled to the withheld support and any subsequent
payments.
11. The Commission concludes that it is not necessary to continue
to require rural broadband experiment recipients to maintain a letter
of credit after the build-out period to provide an adequate incentive
for rural broadband experiment recipients to offer service that meets
the Commission's requirements. The Commission notes that rural
broadband experiment recipients remain subject to forfeitures and other
consequences for non-compliance in the event of a default, including
but not limited to, potential revocation of ETC designation and
disqualification from future competitive bidding for universal service
support.
12. The Commission also grants ARBA's petition in part to the
extent that it requests that entities that elected to receive 30
percent of their payment upfront be permitted to amend their
applications to propose the standard deployment time period. The
Commission adopted the requirement that entities specify whether they
would be interested in receiving 30 percent of their support upfront in
their applications so that the Commission could learn about whether
there was interest in upfront support for the Phase II competitive
bidding process. To help reduce the costs of the letter of credit
requirement for entities that have elected upfront support, the
Commission will permit such entities that have not already been
authorized to receive rural broadband experiment support to send a
letter to the Commission electing to receive support in equal
installments throughout the 10-year term rather than 30 percent upfront
before they are authorized to begin receiving support. If they elect
this option before they are authorized, they will no longer be required
to deploy to 25 percent of locations and submit the required
certifications within 15 months of their first disbursement of support.
To the extent provisionally selected bidders decide they still want to
receive 30 percent of their support upfront they will need to obtain a
letter of credit that covers this amount.
13. The Commission denies ARBA's petition in part to the extent it
requests that the Commission reduce the value of the letter of credit
to 50 percent of support. Such an approach would prevent the Commission
from recovering half of the Connect America support that it will
disburse to rural broadband experiment recipients during the build-out
period in the event that such support is not used for its intended
purposes. While such an approach may reduce costs further for
recipients, the Commission is not persuaded that the public interest
will be better served by protecting only half of the Connect America
support, particularly when the Commission has adopted other measures to
help reduce the costs of maintaining a letter of credit for rural
broadband experiment recipients.
IV. Procedural Matters
A. Paperwork Reduction Act Analysis
14. 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. Congressional Review Act
15. The Commission will send a copy of this Order to Congress and
the Government Accountability Office pursuant to the Congressional
Review Act.
C. Final Regulatory Flexibility Act Certification
16. The Regulatory Flexibility Act of 1980, as amended (RFA),
requires that a regulatory flexibility analysis be prepared for
rulemaking proceedings, unless the agency certifies that ``the rule
will not have a significant economic impact on a substantial number of
small entities.'' The RFA generally defines ``small entity'' as having
the same meaning as the terms ``small business,'' ``small
organization,'' and ``small governmental jurisdiction.'' In addition,
the term ``small business'' has the same meaning as the term ``small
business concern'' under the Small Business Act. A small business
concern is one which: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration
(SBA).
17. This Order modifies and clarifies the rules adopted by the
Commission in the Rural Broadband Experiments Order, the Phase I Round
2 Order, 78 FR 38227, June 26, 2013 and the USF/ICC Transformation
Order, 76 FR 73830, November 29, 2011. 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 and the Rural Broadband
Experiments Order. Therefore, the Commission certifies that the
requirements of this Order will not have a significant economic impact
on a substantial number of small entities. The Commission will send a
copy of the Order including a copy of this final certification in a
report to Congress pursuant to the Small Business Regulatory
Enforcement Fairness Act of 1996. 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.
D. Additional Information
18. People with Disabilities. To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an email to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
19. Additional Information. For additional information on this
proceeding, contact Alexander Minard of the Wireline Competition
Bureau, Telecommunications Access Policy Division,
Alexander.Minard@fcc.gov, (202) 418-7400.
[[Page 21275]]
V. Ordering Clauses
20. Accordingly, it is ordered, pursuant to the authority contained
in sections 1, 2, 4(i), 5, 10, 214, 218-220, 254, 303(r), 403, and 503
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), 155, 160,
214, 218-220, 254, 303(r), 403, 503, 1302, and sections 1.1, and 1.427
of the Commission's rules, 47 CFR 1.1, and 1.427, that this order is
adopted, effective thirty (30) days after publication of the text or
summary thereof in the Federal Register.
21. It is further ordered that, pursuant to section 1.3 of the
Commission's rules, 47 CFR 1.3, the Petition for Waiver filed by the
Alliance of Rural Broadband Applicants on January 27, 2015 is granted
in part and denied in part to the extent described herein.
22. 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).
23. 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 Act
Certification, to the Chief Counsel for Advocacy of the Small Business
Administration.
Federal Comunications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2016-07718 Filed 4-8-16; 8:45 am]
BILLING CODE 6712-01-P