Bridging the Digital Divide for Low-Income Consumers, Lifeline and Link Up Reform and Modernization, Telecommunications Carriers Eligible for Universal Service Support, 2075-2085 [2018-00152]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 83, Number 10 (Tuesday, January 16, 2018)]
[Rules and Regulations]
[Pages 2075-2085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00152]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket Nos. 17-287, 11-42, 09-197; FCC 17-155]


Bridging the Digital Divide for Low-Income Consumers, Lifeline 
and Link Up Reform and Modernization, Telecommunications Carriers 
Eligible for Universal Service Support

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) takes a fresh look at the Commission's Lifeline program 
and makes changes to the Lifeline rules to ensure that the program can 
more effectively and efficiently help close the digital divide for low-
income consumers, while minimizing the contributions burden on 
ratepayers by tackling waste, fraud, and abuse.

DATES: Effective February 15, 2018, except for Sec.  54.411, which will 
become effective March 19, 2018, and Sec. Sec.  54.403(a)(3), 54.413, 
and 54.414 which contain information collection requirements that have 
not been approved by OMB. The Federal Communications Commission will 
publish a document in the Federal Register announcing the effective 
date of those rules awaiting OMB approval.

FOR FURTHER INFORMATION CONTACT: Jodie Griffin, Wireline Competition 
Bureau, (202) 418-7400 or TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Fourth 
Report and Order, Order on Reconsideration, and Memorandum Opinion and 
Order in WC Docket Nos. 17-287, 11-42, 09-197; FCC 17-155, adopted on 
November 16, 2017 and released on December 1, 2017. 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/2017/db1201/FCC-17-155A1.pdf. The Notice of Proposed Rulemaking (NPRM) and Notice 
of Inquiry (NOI) that was adopted concurrently with the Fourth Report 
and Order, Order on Reconsideration, Memorandum Opinion and Order are 
published elsewhere in this issue of the Federal Register.

I. Introduction

    1. This Fourth Report and Order, Order on Reconsideration, and 
Memorandum Opinion and Order takes a series of steps to address ongoing 
areas of concern in the Lifeline program to prevent waste, fraud, and 
abuse. Specifically, the Orders target enhanced Lifeline support to 
residents of rural areas on Tribal lands, establish mapping resources 
to identify rural Tribal lands, require independent certification of 
residency on rural Tribal lands, and direct enhanced support to 
facilities-based providers. In addition, this document makes changes to 
increase Lifeline benefit portability by eliminating the port freezes 
for voice and broadband internet access services. This document also 
clarifies that ``premium Wi-Fi'' and other similar networks of Wi-Fi-
delivered broadband internet access service do not qualify as mobile 
broadband under the Lifeline program rules. Together, the Orders target 
enhanced Lifeline support for Tribal lands to support the deployment of 
modern communications networks, promote consumer choice within the 
program, and remove uncertainty and streamline our rules regarding the 
application of Lifeline support and eligibility for Lifeline 
reimbursement.

II. Fourth Report and Order

    2. In this Fourth Report and Order, the Commission adopts several 
reforms to our Tribal Lifeline policies to increase the availability 
and affordability of high-quality communications services on Tribal 
lands. The Commission first targets enhanced Lifeline support on Tribal 
lands to residents of rural areas on Tribal lands. Since 2000, the 
Lifeline and Link Up programs have provided an enhanced subsidy of up 
to an additional $25 per month for service provided to qualified 
residents of Tribal lands, and a Link Up reduction of up to $100 for 
the cost to initiate supported service for qualifying residents of 
Tribal lands. This targeted support is in recognition of not only the 
low income levels but also the particularly poor connectivity on many 
Tribal lands. When it adopted the enhanced Lifeline Tribal subsidy, the 
Commission noted that the ``unavailability or unaffordability of 
telecommunications service on Tribal lands is at odds with our 
statutory goal of ensuring access to such services to `[c]onsumers in 
all regions of the Nation, including low-income consumers,''' and 
explained that the added Lifeline and Link Up support would help lead 
to the deployment of more robust networks. While the Commission 
provided the enhanced support as a discount on services, that support 
was focused to most efficiently encourage ``investment and deployment'' 
in facilities, especially since all Lifeline providers in the program 
at the time were facilities-based. Because of an overly-broad 
definition of the geographic areas eligible for the enhanced subsidy, 
however, many areas where this enhanced subsidy is currently available 
are not lacking in either voice or broadband networks. To remedy this, 
the Commission refines its approach to target enhanced Lifeline support 
to residents of rural areas on Tribal lands. Focusing the enhanced 
subsidy for Tribal lands on rural areas is consistent with the enhanced 
subsidy's purpose and will ensure that the Fund is better directed 
toward the residents of Tribal lands who typically have the least 
choice for communications services.
    3. The Commission believes that targeting enhanced support toward 
rural, facilities-based providers is consistent with the intent of the 
2000 Tribal Order, 65 FR 47883, August 4, 2000. While the 2000 Tribal 
Order referenced reducing the costs of

[[Page 2076]]

telecommunications services, it specifically premised the support on 
the idea that enhanced support would incentivize providers to ``deploy 
telecommunications facilities in areas that previously may have been 
regarded as high risk and unprofitable.'' The Commission's creation of 
an enhanced Lifeline benefit in the 2000 Tribal Order both reduced 
telecommunications costs and supported the deployment of networks 
because, at the time, all ETCs were facilities-based. (The Commission 
did not forbear from the Act's facilities-based requirements at all 
until 2005.) While the Commission must consider and address appropriate 
distinctions between support for facilities-based and non-facilities-
based providers, the Commission does so in a way that continues to 
follow the principles identified in the 2000 Tribal Order and Sections 
214 and 254 of the Act. (See U.S.C. 214(e) and 254(b)(3).)
    4. To identify rural areas on Tribal lands, the Commission adopts 
the definition of ``rural'' used in the E-rate program rules, which 
define ``urban'' as ``an urbanized area or urban cluster area with a 
population equal to or greater than 25,000.'' The Commission defines 
all other areas as ``rural.'' (47 CFR 54.505(b)(3).) In the 2015 
Lifeline FNPRM, 80 FR 42669, July 17, 2015, the Commission asked for 
comment on ``what level of density'' and at ``what level of geographic 
granularity'' it should define such rural areas. Shortly thereafter, 
the Commission began consultations with Tribal Nations regarding the 
Lifeline proposals that the Commission sought comment on in the 2015 
Lifeline FNPRM. After consideration of the comments, including comments 
by numerous Tribal stakeholders, and evaluation of the practicality of 
implementation, the Commission believes this definition will reasonably 
identify the Tribal areas the Commission intends to benefit from 
additional Lifeline funding. Accordingly, the Commission amends 
Sec. Sec.  54.403(a)(3), 54.413, and 54.414 of the Lifeline program 
rules and directs the Universal Service Administrative Company (USAC) 
to develop a tool that will allow Lifeline service providers to 
determine whether a subscriber residing on Tribal lands resides in a 
rural area according to this definition. USAC shall update this tool 
pursuant to the same update schedule used for the E-rate rurality tool.
    5. Selection of the E-rate program's ``rural'' definition is based 
on consideration of the record and matters of administrative 
efficiency. In the 2015 Lifeline FNPRM, the Commission sought comment 
on focusing enhanced support to those Tribal lands with lower 
population densities. Specifically, the Commission sought comment on 
``focus[ing] enhanced support only on areas of low population density 
that are likely to lack the facilities necessary to serve 
subscribers.'' The Commission also sought comment on the approach taken 
by the United States Department of Agriculture's Food Distribution 
Program on Indian Reservations (FDPIR), which excludes from eligibility 
residents of towns or cities in Oklahoma with populations of 10,000 or 
more, and sought comment on whether the Commission ``should implement a 
similar approach that excludes urban areas on Tribal lands from 
receiving enhanced Tribal support.'' Some commenters expressed concerns 
with a population density approach, but provided alternative density-
based proposals ranging from limiting enhanced support to areas with 
fewer than 10,000 people and a county population density of less than 
125 people per square mile, (Navajo Nation Telecommunications 
Regulatory Commission Comments at 12-13.) or ``only to Tribal lands 
that are located outside of a Metropolitan Statistical Area and that 
have less than 100 persons per square mile.'' (Smith Bagley Inc., 
Comments at 16) These proposals are more restrictive than the E-rate 
program's definition of rural. Other commenters opposed limiting the 
enhanced Tribal subsidy based on population density. The Commission 
disagrees with those commenters because their path would preserve the 
status quo of providing enhanced support to Lifeline subscribers on 
Tribal lands in densely populated areas where service providers already 
have sufficient incentive to deploy broadband facilities as in non-
Tribal areas.
    6. The Commission agrees that focusing enhanced support on less-
dense areas will improve the Tribal support mechanism and better serve 
the goals of enhanced Tribal Lifeline support to incent deployment in 
areas that need it most and to increase the affordability of Lifeline 
services for Tribal lands residents. Based on the record, however, the 
Commission declines to adopt a population-density threshold to identify 
the Tribal areas that are eligible for enhanced Tribal support. 
Instead, the Commission takes an approach similar to the approach used 
by the FDPIR and use the E-rate program definition of ``rural'' to 
identify Tribal areas that are eligible for enhanced Lifeline support. 
This approach provides consistency between the E-rate and Lifeline 
programs. In addition, the Commission's definition of ``rural'' in the 
E-rate program serves the goals of enhanced Tribal Lifeline support by 
focusing enhanced support where communications services are more 
costly. As explained in the 2014 E-rate Order, 80 FR 5961, February 4, 
2015, the Commission adopted the current E-rate program definition of 
``rural'' after numerous parties demonstrated that a narrower 
definition would result in an urban classification for numerous schools 
and libraries in small towns and remote areas where E-rate supported 
services are more costly. Using the E-rate definition of ``rural'' to 
identify Tribal areas that are eligible for enhanced support would 
ensure that the enhanced support is available for Tribal lands in these 
small towns and remote areas where supported services are more costly. 
Further, the E-rate definition of ``rural'' is less restrictive than 
the alternative population density-based methodologies proposed by 
Smith Bagley and the Navajo Nation Telecommunications Regulatory 
Commission.
    7. The Commission also concludes that identifying less-dense areas 
by using the same definition of ``rural'' as the E-rate program (which 
was adopted in December 2014 and implemented for E-rate Funding Year 
2015) will allow for more accurate, efficient administration by USAC. 
The Commission expects that consistency between the two USF programs 
will simplify the urban/rural determinations for carriers and eligible 
households. Specifically, standard program definitions of rurality 
would allow USAC to develop master data sources and simplify the 
development and updating of service provider tools for identifying 
addresses that qualify for enhanced support. The Commission therefore 
declines to adopt commenters' proposals to create an entirely new 
definition of rurality based directly on the number of persons per 
square mile in a particular geographic area. Those proposals would 
create unnecessary administrative difficulties and uncertainty for 
Lifeline providers, which the Commission believes would in turn create 
confusion and fewer choices for eligible low-income consumers.
    8. The Commission also concludes that the provision of enhanced 
support in more densely populated Tribal lands, such as large cities 
(e.g., Tulsa, Oklahoma or Reno, Nevada), is inconsistent with the 
Commission's primary purpose of the enhanced support. (Despite being 
``The Biggest Little City in the World,'' Reno, NV has a population of 
446,154 and, according to Form 477 data, 97.5% percent of the

[[Page 2077]]

population in its county have access to fixed broadband speeds of at 
least 25 Mbps/3 Mbps. Tulsa, OK has a population of 637,215 and 100% 
percent of the population in its county has access to fixed broadband 
speeds of at least 25 Mbps/3 Mbps. See Fixed Broadband Deployment Data, 
Deployment (last visited Oct. 24, 2017), https://www.fcc.gov/maps/fixed-broadband-deployment-data/.) When the Commission first adopted 
enhanced support on Tribal lands, it noted that ``unlike in urban areas 
where there may be a greater concentration of both residential and 
business customers, carriers may need additional incentives to serve 
Tribal lands that, due to their extreme geographic remoteness, are 
sparsely populated and have few businesses.'' That remains too true 
today. Approximately 98 percent of Americans in urban areas already 
have access to fixed broadband internet access service at speeds of 25 
Mbps/3 Mbps, including residents of both Tulsa and Reno. (See Fixed 
Broadband Deployment Data, Deployment (last visited Oct. 24, 2017), 
https://www.fcc.gov/maps/fixed-broadband-deployment-data/.) Directing 
enhanced support to Tribal lands in urban areas is unlikely to 
materially increase the deployment of facilities in such areas and, 
therefore, risks wasting scarce program resources. In contrast, rural 
Americans, particularly those residing on Tribal lands, are much less 
likely to have access to high-speed internet access services, with 
Commission data showing that 63 percent of Americans living on rural, 
Tribal lands lack access to fixed broadband services at speeds of 25 
Mbps/3 Mbps, making enhanced support more likely to incentivize 
deployment to serve low-income, rural residents on Tribal lands. (See 
Fixed Broadband Deployment Data, Deployment (last visited Oct. 24, 
2017), https://www.fcc.gov/maps/fixed-broadband-deployment-data/.) This 
policy supports our view that enhanced Tribal support should be 
targeted to rural areas where the need is greatest.
    9. The Commission next identifies mapping resources that can be 
used to locate ``Tribal lands'' under our rules. These maps can then be 
intersected with the maps delineating rural areas in order to create a 
map showing where enhanced Tribal lands Lifeline support is available. 
The Commission directs USAC to make these mapping resources available 
to providers.
    10. Section 54.400(e) of our rules defines Tribal lands to include 
any federally recognized Indian tribe's reservation, pueblo, or colony 
(including former reservations in Oklahoma); Alaska Native regions 
established pursuant to the Alaska Native Claims Settlement Act; Indian 
allotments; Hawaiian Home Lands held in trust for Native Hawaiians 
pursuant to the Hawaiian Homes Commission Act; and ``. . . any land 
designated as such by the Commission for purposes of this subpart.'' 
Before 2015, the Commission had not established any mapping resources 
to provide ready access to the boundaries of these Tribal lands.
    11. The geographic areas described in Sec.  54.400(e) of the 
Lifeline program rules correspond with the map of Hawaiian Home Lands 
maintained by the Department of Hawaiian Home Lands (DHHL), the U.S. 
Census Bureau's American Indians and Alaska Natives Map, the Oklahoma 
Historical Map 1870-1890, as amended by the Commission to include the 
Cherokee Outlet, and the Alaska Native regions established pursuant to 
the Alaska Native Claims Settlement Act. (See 85 Stat. 688.)
    12. To assist carriers and subscribers, the Commission identifies 
specific maps of these Tribal lands. In the 2015 Lifeline FNPRM, the 
Commission interpreted the term ``former reservations in Oklahoma'' to 
establish boundaries for Tribal lands in the Lifeline program for 
residents in Oklahoma. The Commission and USAC later provided a map and 
shapefile for carriers to use in determining whether their customers 
reside on Tribal lands in Oklahoma. The Commission believes making this 
map available has successfully given clarity to providers and 
subscribers about the boundaries of Tribal lands in Oklahoma. The 
Commission thus believes providing additional maps and data, including 
in shapefile format, is appropriate for the other Tribal lands listed 
in Sec.  54.400(e) of the Commission's rules. By providing carriers the 
information they need to quickly and accurately determine if an 
enrolling customer qualifies for enhanced support under the Lifeline 
rules, these maps and data will help prevent waste, fraud, and abuse in 
the program. These maps and data will also help Lifeline providers 
avoid situations in which the provider improperly requests enhanced 
Tribal support for customers who self-certified their Tribal residence 
but did not actually reside on Tribal lands.
    13. The Hawaiian Homes Commission Act of 1921 (42 Stat. 108.) 
delineated the boundaries of ``Hawaiian Home Lands'' and tasked the 
DHHL with maintaining those boundaries, along with the responsibility 
of promulgating rules under that Act. As part of its responsibilities, 
the DHHL makes available a map and shapefile that precisely defines the 
geographic areas within the state of Hawaii considered ``Hawaiian Home 
Lands.'' Using this map will assist both Lifeline providers and 
consumers. Likewise, the Census Bureau maintains a map of every 
``federally recognized Indian tribe's reservation, pueblo, or colony,'' 
called the American Indian and Alaska Native Areas Map. (See 47 CFR 
54.400(e).) This map, and its accompanying shapefile, comports with the 
data sources the Commission uses regularly and will also provide clear 
guidance for Lifeline providers and consumers.
    14. In light of these identified mapping resources, as well as the 
expected need for a reasonable transition period, the Commission 
directs USAC to prepare a map and the corresponding shapefiles to 
delineate the areas on which subscribers may receive enhanced Lifeline 
support for rural Tribal lands. USAC shall make this map and data 
available at least sixty (60) days before the effective date of this 
Order's rule changes for enhanced Lifeline support on Tribal lands. If, 
in the future, any of the sources identified in this section issue 
updated maps or shapefiles, the Commission directs USAC to make an 
updated map and the underlying data available within a reasonable time 
period but no later than ninety (90) days after the updated map or 
shapefile is issued.
    15. The Commission also directs USAC to incorporate the map 
discussed above in its administration and implementation of the 
National Lifeline Accountability Database (NLAD) and National 
Eligibility Verifier (NV).
    16. In the 2015 Lifeline FNPRM, the Commission sought comment on 
requiring additional evidence of Tribal residency beyond the current 
self-certification requirement and placing the obligation to confirm 
Tribal residency with the Lifeline provider. To see that enhanced 
Lifeline support for rural Tribal lands is actually directed to 
subscribers who verifiably reside on Tribal lands, the Commission now 
establishes that only subscribers whose residential address or location 
is shown to fall within the boundary of the enhanced Tribal Lifeline 
map discussed above may receive enhanced support. Previously, the 
Commission had permitted providers to accept subscribers' self-
certifications that they reside on Tribal lands according to the 
Commission's Lifeline rules, which made the program vulnerable to fraud 
and abuse and resulted in a $2 million settlement with one provider for 
claiming enhanced Tribal support for

[[Page 2078]]

subscribers who did not reside on Tribal lands. The Commission finds 
that the provision of maps delineating the boundaries of areas eligible 
for enhanced Tribal Lifeline support will give consumers and providers 
a more effective and simpler means of determining rural Tribal 
residency, thereby eliminating the need for reliance on self-
certification. Accordingly, going forward, Lifeline providers will be 
required to independently verify and document subscribers' rural Tribal 
residency according to the map and data sources identified above. An 
ETC may seek enhanced reimbursement only for subscribers whose 
residential address is located within the bounds of that map.
    17. In response to the 2015 Lifeline FNPRM, some commenters urged 
the Commission to continue to permit consumers to self-certify their 
residence on Tribal lands. Commenters supporting this approach argue 
that there is no evidence of abuse of the self-certification mechanism, 
and eliminating self-certification would only increase subscriber 
costs. However, the Commission has recently found concrete evidence of 
abuse of the self-certification mechanism, resulting in improper 
payments that had to be reclaimed through an enforcement proceeding. 
(See Blue Jay Wireless, LLC, Order, 31 FCC Rcd 7603 (EB 2016).) In that 
instance, a Lifeline provider relied on subscriber self-certifications 
to improperly enroll several thousand customers as residents of Tribal 
lands, and continued to do so even after being informed that it was 
apparently over-claiming enhanced Tribal support. The Commission also 
finds that providing a map against which providers can verify 
eligibility for enhanced Tribal support provides greater certainty to 
providers and consumers alike, and thus eliminates questions about how 
to handle a consumer's self-certification if that consumer seems to 
reside outside Tribal lands.
    18. The Commission concludes that a process by which providers 
determine enhanced eligibility by comparing the subscriber's 
residential address to data sources delineating rural Tribal lands is a 
more accurate method of verifying that a subscriber is entitled to 
enhanced Tribal reimbursement. If a subscriber does not reside within 
the bounds of the map that the Commission now provides, permitting that 
subscriber to receive reimbursement by simply certifying that she or he 
lives on Tribal lands leaves the program open to improper payments, 
waste, and possibly fraud and abuse.
    19. The Commission is also sensitive to Tribal residences that have 
not been assigned conventional addresses and instead use descriptive 
addresses that are not recognized by the U.S. Postal Service. For those 
residences, a Lifeline subscriber may provide a descriptive address 
when enrolling in the program. A provider enrolling a subscriber with a 
descriptive residential address in a state where the National Verifier 
is not responsible for eligibility determinations must retain records 
documenting compliance with the program rules, including the rules the 
Commission amends in this Order limiting enhanced Lifeline support to 
rural Tribal lands and removing subscriber self-certification of Tribal 
lands residency. Accordingly, the Commission reminds providers that 
they must retain the documentation demonstrating how the provider 
determined that a subscriber with a descriptive address resides on 
rural Tribal lands to claim the enhanced Tribal Lifeline support. For 
example, as providers do today to verify the accuracy of consumers' 
self-certification, providers may note if a subscriber has a ZIP code 
that is entirely located in an area eligible for enhanced support, or 
may record the latitude and longitude of the subscriber's residence to 
compare against a map identifying areas eligible for enhanced support. 
The Commission directs USAC to develop a process for subscribers with 
descriptive addresses who reside on Tribal lands for use in the 
National Verifier, and to make public the steps in that process to 
better inform providers about acceptable methods of determining whether 
such subscribers are eligible for enhanced support.
    20. In the 2015 Lifeline FNPRM, the Commission sought comment on 
limiting enhanced Tribal Lifeline support to facilities-based service 
providers, just as the Commission in 2012 had limited enhanced Tribal 
Link Up support to facilities-based service providers that also 
received high-cost support. The Commission now concludes that such a 
limitation is appropriate. Accordingly, the Commission amends Sec.  
54.403(a)(3) of the Lifeline program rules to effectuate this change.
    21. The Commission finds that last-mile facilities are critical to 
deploying, maintaining, and building voice- and broadband-capable 
networks on Tribal lands and Lifeline funds are more efficiently spent 
when supporting such networks. When the Lifeline discount is applied to 
a consumer's bill for a facilities-based service, those funds go 
directly toward the cost of providing that service, including 
provisioning, maintaining, and upgrading that provider's facilities. 
Since the introduction of enhanced Tribal and Link Up support in 2000, 
facilities-based providers have used that support to construct and 
upgrade networks on Tribal lands.
    22. In contrast, Lifeline funds disbursed to non-facilities-based 
providers will still lower the cost of the consumer's service, but 
cannot directly support the provider's network because the provider 
does not have one. When the Commission eliminated Link Up support for 
non-facilities-based carriers on Tribal lands in 2012, it noted that at 
least one wireless reseller ``has received approximately a million in 
Link Up support for two months in 2011 on Tribal lands in [Oklahoma] 
without building infrastructure''--contravening the purposes of the 
enhanced support. And in the 2015 Lifeline FNPRM, the Commission 
explained, ``Lifeline program data show that two-thirds of enhanced 
Tribal support goes to non-facilities based providers, and it is 
unclear whether the support is being used to deploy facilities in 
Tribal areas''--which contravened the Commission's express ``desire to 
use enhanced support to incent the deployment of facilities on Tribal 
lands.''
    23. For the purposes of the Lifeline program, to enforce our 
revised Sec.  54.403(a)(3), the Commission limits enhanced Tribal 
support to (1) fixed or mobile wireless facilities-based Lifeline 
service provided on Tribal lands with wireless network facilities 
covering all or a portion of the relevant Lifeline ETC's service area 
on Tribal lands; and (2) facilities-based fixed broadband or voice 
telephony service provided through the ETC's ownership or a long-term 
lease of last-mile wireline loop facilities capable of providing 
Lifeline service to all or a portion of the ETC's service area on 
Tribal lands. For purposes of enhanced Lifeline support, a fixed 
wireless provider must, consistent with FCC Form 477 instructions, 
provision or equip a broadband wireless channel to the end-user 
premises over licensed or unlicensed spectrum, while a mobile wireless 
provider must hold usage rights under a spectrum license or a long-term 
spectrum leasing arrangement along with wireless network facilities 
that that can be used to provide wireless voice and broadband services. 
(The Commission considers a long-term spectrum leasing arrangement as 
long-term de facto transfer spectrum leasing arrangements as defined 
and identified in 47 CFR 1.9003 and 1.9030, and long-

[[Page 2079]]

term spectrum manager leasing arrangements as defined and identified in 
47 CFR 1.9003 and 1.9020(e).) For wireline providers, the Commission 
considers a ``long-term lease'' as an indefeasible right of use (IRU) 
of 10 years or more over the last-mile facility in question. The 
Commission has found that IRUs carry many of the same indicia of 
control as full ownership and therefore are considered fully owned 
facilities in other regulatory contexts.
    24. The Commission concludes that, in the Lifeline program, an 
ETC's use of tariffed and un-tariffed special access services, resold 
services offered pursuant to sections 251(b) and (c), commercially 
available resold services, or unbundled network elements (UNEs) does 
not demonstrate that the service is ``facilities-based'' because such 
services do not reflect investment in broadband-capable networks in the 
service area by the ETC. Previously, the Commission found that 
competitors' use of incumbent local exchange carrier (LEC) special 
access services is not relevant to whether there is sufficient 
facilities-based competition in a market to justify forbearance from 
the incumbent LEC's obligation to provide UNEs. Additionally, UNEs 
themselves are only available in those cases where competitors are 
``impaired'' without access--that is, UNEs are available to competitive 
carriers for those network components that a ``reasonably efficient'' 
competitor would not likely be able to construct on its own and without 
which market entry would likely be uneconomic.
    25. If an ETC offers service using its own as well as others' 
facilities in its service area on rural Tribal lands, it may only 
receive enhanced support for the customers it serves using its own 
last-mile facilities. The Commission finds this definition is 
technology-neutral as between fixed and mobile services.
    26. For many of the same reasons the Commission limited Link Up 
support to facilities-based carriers on Tribal lands, the Commission 
finds that limiting enhanced Lifeline support to facilities-based 
service provided to subscribers residing on Tribal lands will focus the 
enhanced support toward those providers directly investing in voice- 
and broadband-capable networks on rural Tribal lands. The Commission 
finds that this result comports with the Act's direction to the 
Commission to base its policies on the principle that ``low-income 
consumers and those in rural, insular, and high cost areas, should have 
access to telecommunications and information services . . . that are 
reasonably comparable to those services provided in urban areas. . . 
.'' (47 U.S.C. 254(b)(3).) Directing enhanced Lifeline funds to 
facilities-based services makes those services more affordable and 
competitive for low-income consumers and also encourages investment 
that will ultimately provide more robust networks and higher quality 
service on rural Tribal lands. Doing so also ensures that the payments 
Lifeline providers receive from the Fund to serve rural Tribal lands 
will be reinvested in the ``provision, maintenance, and upgrading'' of 
facilities in those areas. (47 U.S.C. 254(e).) A number of Tribal 
Nations, Tribally-owned Lifeline providers, and other Lifeline 
providers agree with this decision and favor limiting enhanced support 
to providers with facilities, arguing that it will ensure that the 
enhanced subsidies reach the Tribal lands and residences that have 
never been connected and will support those network facilities already 
constructed.
    27. The Commission disagrees with parties who argue that resellers' 
purchase of wholesale services from carriers that own facilities 
increases the incentive of those carriers to deploy and maintain their 
networks. Resellers offer little evidence beyond their own assertions 
that funneling Lifeline enhanced support funding through middle men 
will spur facilities-based carriers to invest in their rural, Tribal 
networks. Moreover, even if revenue from resellers marginally increases 
the ability and incentive of other providers to deploy or maintain 
facilities, the Commission concludes that this benefit is outweighed by 
our need to prudently manage Fund expenditures. Indeed, these resellers 
cannot explain how passing only a fraction of funds through to 
facilities-based carriers will mean more investment in rural Tribal 
areas than ensuring that facilities-based carriers receive 100 percent 
of the support. The Commission concludes that providing the enhanced 
support to Lifeline providers deploying, building, and maintaining 
critical last mile infrastructure is a more appropriate way to support 
the expansion of voice- and broadband-capable networks on Tribal lands. 
(The Commission reminds all ETCs that they may not discontinue Lifeline 
service to any community they serve without first relinquishing their 
ETC designation after the approval of the designation (state or 
federal) commission. See 47 U.S.C. 214(e)(4).)
    28. To ensure compliance with this requirement and prevent 
potential waste, fraud, and abuse, the Commission directs USAC to take 
appropriate measures to verify that any ETC claiming enhanced rural 
Tribal support satisfies the facilities requirement outlined in this 
section prior to disbursing the enhanced support.
    29. The Commission also clarifies that the ``facilities-based'' 
standard it describes bears only on whether the Lifeline provider is 
eligible to receive enhanced rural Tribal support. Whether a provider 
is ``facilities-based'' under the Act for purposes of seeking a 
Lifeline-only ETC designation and must obtain approval for a compliance 
plan to take advantage of blanket forbearance from the facilities 
requirement is unaffected by this standard and remains the same. (See 
47 U.S.C. 214(e)(1)(A) (requiring ETCs to offer service ``either using 
its own facilities or a combination of its own facilities and resale of 
another carrier's services'').)
    30. To ensure all impacted parties have sufficient time to make the 
necessary changes adopted in this Fourth Report and Order, the 
Commission provides a transition period. The changes made in this 
Fourth Report and Order for enhanced Lifeline support on Tribal lands 
shall be effective 90 days after the Wireline Competition Bureau 
announces that the Commission has received approval from the Office of 
Management and Budget (OMB) for the new information collection 
requirements in this Fourth Report and Order subject to the Paperwork 
Reduction Act of 1995 (PRA), Public Law 104-13, or on August 1, 2018, 
whichever date occurs later. The Commission directs ETCs to notify, in 
writing, any customers who are currently receiving enhanced support who 
will no longer be eligible for enhanced support as a result of the 
changes in this Order. This notice must be sent no more than 30 days 
after the announcement of PRA approval. (Or, if the Commission has not 
received approval from the Office of Management and Budget (OMB) for 
the new information collection requirements in this Order subject to 
the Paperwork Reduction Act of 1995 (PRA), once OMB approval has been 
received.) This notice must inform any impacted customers that they 
will not receive the enhanced Lifeline discount beginning 90 days after 
the announcement of PRA approval or on August 1, 2018, whichever occurs 
later, and that customers residing on rural Tribal lands who are 
currently receiving service from a non-facilities-based provider have 
the option of switching their Lifeline benefit to a facilities-based 
provider to continue receiving enhanced rural Tribal support. The 
notice must also detail the ETC's offerings for Lifeline subscribers 
who are not eligible for enhanced support.

[[Page 2080]]

III. Order on Reconsideration

    31. By this Order, the Commission eliminates the port freeze for 
voice and broadband internet access services found in Sec.  54.411 of 
the Commission's rules. The Commission takes this action in response to 
significant concerns regarding the port freeze raised in Petitions for 
Reconsideration and other recent filings in the docket. In the 2016 
Lifeline Order, 81 FR 33026, May 24, 2016, the Commission codified port 
freezes lasting 12 months for broadband internet access service and 60 
days for voice telephony service. After reconsideration of certain 
findings in the 2016 Lifeline Order, the Commission now eliminates the 
Lifeline port freeze for voice and broadband internet access service.
    32. The Commission established the extended port freeze for 
broadband internet access service ``[t]o facilitate market entry for 
Lifeline-supported BIAS [broadband internet access service] offerings, 
provide additional consumer benefits, and encourage competition'' by 
``allowing broadband providers the security of a longer term 
relationship with subscribers. . . .'' Since the Commission adopted 
these requirements, multiple parties have filed Petitions for 
Reconsideration raising a variety of concerns regarding the port freeze 
rule. Petitioners argue that the port freeze requirements adversely 
impact consumers by restricting consumer choice and the record lacks 
evidence that demonstrates new entrants were or are having difficulty 
entering the Lifeline market. Petitioners also argue that the port 
freeze requirements were imposed without adequate notice, as required 
under the Administrative Procedure Act (APA); and raise concerns 
regarding the challenges ETCs will face from an administrative 
perspective in attempting to comply with the 12-month port freeze 
requirement. Because the Commission grants the petitions for 
reconsideration on other grounds below, it does not address the APA and 
administrative burden arguments here. Additionally, since 
implementation of the port freeze rule, other parties have raised 
concerns regarding the alleged improper invocation of consumer port 
freezes by certain Lifeline providers, which limits consumer choice, 
especially with regard to the 12-month port freeze for broadband 
service.
    33. The Commission agrees with arguments raised by Petitioners and 
others that the disadvantages to consumers of the port freeze rule, in 
practice, outweigh the anticipated advantages; accordingly, the 
Commission eliminates the codified Lifeline benefit port freeze for 
voice and broadband internet access service. (See 47 CFR 54.411.) The 
Commission concludes that restricting the ability of Lifeline consumers 
to transfer their Lifeline benefit between service providers ultimately 
disadvantages Lifeline consumers. Such a restriction limits Lifeline 
consumers' ability to seek more competitive offerings and obtain those 
services that best meet their needs. In addition, restricting 
consumers' ability to transfer their Lifeline benefit will not promote 
competitive service offerings and, in fact, may diminish providers' 
motivation to provide higher quality service after enrolling a 
Lifeline-supported broadband subscriber, because the provider is 
assured a 12-month commitment from the subscriber. The Commission also 
agrees that the record evidence does not clearly support the view that 
a 12-month port freeze is necessary to ease market entry, and indeed 
can discourage new providers from entering the Lifeline market or a new 
geographical area because a significant portion of Lifeline subscribers 
would not be able to transfer their benefit to otherwise compelling new 
services offerings. Nor does the Commission believe that the 60-day 
port freeze for voice services adopted in the 2016 Lifeline Order, 
while leading to these disadvantages, is effective in furthering its 
desired goals.
    34. In general, parties that filed in support of a longer port 
freeze argued that carriers will be willing to make more significant 
investments as a result of longer term customer-carrier relationships 
and that a longer port freeze will discourage consumers from 
``flipping.'' Indeed, several carriers decry ``flipping'' and explain 
how consumer churn makes it harder for carriers to recover their costs, 
including the costs of free phones. But flipping and consumer churn are 
not unique to the Lifeline marketplace, and companies have repeatedly 
turned to voluntary agreements (such as contracts) and alternative 
business models (such as prepaid plans) to address such concerns 
without the federal government artificially limiting consumer choice. 
In addition, the Commission notes that the primary intent of the 
Lifeline program is to provide a discount on service rather than 
devices. To the extent that providing discounted or free devices 
incentivizes consumers to engage in flipping, that outcome primarily 
results from a service provider's own marketing practices. The 
Commission also notes that supporters of the port freeze generally did 
not assert the 12-month port freeze was needed to address impediments 
to entering the market.
    35. The Commission disagrees with those commenters who contend that 
removing the 12-month broadband internet access service port freeze 
will reduce provider participation in the Lifeline program and make it 
``impossible to meet the Commission's minimum service standards and 
handset requirements at a cost that is affordable for low-income 
consumers.'' (Joint Lifeline ETC Respondents' Opposition at 7-8.) The 
Commission adopted minimum service standards after considering the 
record and concluding that minimum service standards are not unduly 
burdensome. Affordability was an important factor in adopting minimum 
service standards, and the standards the Commission adopted struck ``a 
balance between the demands of affordability and reasonable 
comparability.'' While the Commission considered concerns raised by 
some providers that they would not be able to offer services that meet 
the minimum standards, the Commission ultimately concluded that 
allowing the Lifeline benefit to be used on services that do not meet 
minimum service standards would lead to the type of ``second class'' 
service that the minimum service standards are meant to eliminate. 
Furthermore, prior to the 2016 Lifeline Order, the shorter USAC-
administered 60-day benefit port freeze for voice service did not drive 
providers out of the program. Indeed, the Commission is now acting in 
response to requests from Lifeline providers to eliminate or shorten 
the port freeze due to the administrative burdens associated with 
compliance.
    36. The Commission codified the port freeze in part because it 
anticipated that consumers would benefit from greater choice and 
innovative service offerings as a result. In addition, the Commission 
envisioned benefits would accrue to consumers from a longer term 
relationship with their service providers. Since the implementation of 
the port freeze, the Commission has been presented with evidence, 
however, that it has not delivered the consumer benefits the Commission 
envisioned when it codified the requirement, but instead has incented 
certain providers to enroll consumers in offerings that provide little 
meaningful residential broadband access while locking in their Lifeline 
benefit with that provider for the following 12 months. These providers 
have used the port freeze to prevent customer churn, asserting that the 
service falls within the 12-month port freeze timeframe, even when

[[Page 2081]]

offering plans with only 10 MB of guaranteed mobile cellular data. As a 
result, although the port freeze rule has in some instances resulted in 
longer term relationships as anticipated, any benefits have come at the 
expense of consumers who find themselves trapped in low-quality plans 
for a full year. Parties such as Consumer Action and the National 
Consumers League have urged the Commission ``to stop the abuse of the 
so-called `port freeze' rule, which is now being used to limit consumer 
choice and access to true broadband service and broadband-suitable 
devices.'' Because implementation of the port freeze has not, on 
balance, resulted in the anticipated benefits to Lifeline consumers and 
instead appears to have harmed consumers, the Commission now determines 
that this rule should be eliminated. The Commission also finds that 
retaining existing customers' port freezes would hinder consumer choice 
without leading or having led to improved offerings for consumers, and 
so the Commission declines to continue subscribers' existing port 
freezes.
    37. Finally, the Commission clarifies the application of the 
Commission's rolling recertification rule in the absence of the port 
freeze rule and the port freeze exceptions. (47 CFR 54.410(f).) For 
purposes of rolling recertification, the subscriber's service 
initiation date is twelve months from the date of the most recent 
transfer or enrollment with the subscriber's current service provider, 
and recertification will be required every twelve months thereafter.
    38. These changes to Sec.  54.411 of the Commission's rules will 
become effective 60 days after publication of this Order in the Federal 
Register.
    39. To ensure that qualifying low-income Americans receive quality, 
affordable Lifeline-supported broadband service, the Commission revises 
its rules concerning the application of Lifeline support. Section 
54.403(b)(1) of the Commission's rules requires ETCs ``that charge 
federal End User Common Line charges or equivalent federal charges'' to 
apply federal Lifeline support to waive such charges for Lifeline 
subscribers. (47 CFR 54.403(b)(1).) The rule is silent, however, on the 
application of Lifeline support for subscribers receiving the Lifeline 
benefit for broadband internet access service, either in a bundle with 
qualifying voice telephony service or on a standalone basis, which does 
not have an End User Common Line charge. The Commission hereby 
clarifies that Sec.  54.403(b)(1) of the Commission's rules only 
applies to subscribers receiving Lifeline-supported standalone voice 
telephony service or a bundled offering where the ETC is requesting 
reimbursement from the Lifeline program for the voice telephony 
component of the bundle.
    40. USTelecom has filed a petition for reconsideration requesting, 
in relevant part, that the Commission eliminate Sec.  54.403(b) of the 
Commission's rules to resolve the rule's ambiguity with regard to 
Lifeline-supported broadband internet access service. USTelecom argues 
that broadband internet access service does not have a federal End User 
Common Line charge or intrastate service, creating confusion as to how 
ETCs may comply with Sec.  54.403(b) of the Commission's rules when the 
customer is receiving Lifeline-supported broadband internet access 
service. No parties filed in opposition to USTelecom's petition on this 
issue.
    41. The Commission declines to eliminate the rule, as requested by 
USTelecom, so that ETCs seeking reimbursement for Lifeline voice 
telephony service, either on a standalone basis or in a bundle, will 
continue to apply the Lifeline discount to the EUCL. Instead the 
Commission now modifies Sec.  54.403(b)(1) to clarify that this rule 
only applies to subscribers receiving standalone voice telephony 
service or a bundled offering where the ETC is requesting reimbursement 
from the Lifeline program for the voice telephony component of the 
bundle. By not addressing whether and how Sec.  54.403(b)(1) applies to 
Lifeline-supported broadband internet access service, the rule causes 
unnecessary uncertainty for ETCs and may result in less affordable 
offerings for subscribers without any corresponding benefit for 
Lifeline subscribers. This revision of Sec.  54.403(b)(1) also comports 
with the longstanding Commission goal of simplifying administration of 
the Lifeline program and reflecting current marketplace conditions. 
Accordingly, the Commission amends Sec.  54.403(b)(1) to clarify that 
ETCs are only required to apply the Lifeline discount to the End User 
Common Line charge or equivalent federal charges where the ETC is 
receiving Lifeline support for that subscriber's voice telephony 
service.
    42. The 2016 Lifeline Order modified Sec.  54.410(b)(2)(ii), 
(c)(2)(ii), and (e) to require the National Verifier, where it is 
responsible for determining subscriber eligibility or conducting 
recertification, to provide a copy of the subscriber's certification to 
the provider. (47 CFR 54.410(b)(2)(ii), (c)(2)(ii), (e).) The 
Commission now resolves an apparent conflict in our rules and alters 
Sec.  54.410(b)(2)(ii), (c)(2)(ii), and (e) of the Commission's rules 
to eliminate the requirement that the National Verifier provide copies 
of certifications to ETCs where the National Verifier is responsible 
for eligibility determinations.
    43. USTelecom filed a petition for reconsideration requesting, in 
relevant part, modifications to Sec.  54.410(b)(2)(ii), (c)(2)(ii), and 
(e) of the Commission's rules to properly reflect the 2016 Lifeline 
Order's intent with regard to the National Verifier. USTelecom argues 
that the text of the rule is in direct conflict with the 2016 Lifeline 
Order's language and intent. The 2016 Lifeline Order states: ``[t]he 
National Verifier will retain eligibility information collected as a 
result of the eligibility determination process'' and that ``Lifeline 
providers will not be required to retain eligibility documentation for 
subscribers who have been determined eligible by the National 
Verifier.'' However, Sec.  54.410(b)(2)(ii), (c)(2)(ii), and (e) 
require Lifeline providers to retain eligibility documentation and 
certifications even when the National Verifier was responsible for the 
enrollment process. USTelecom adds that the cost and burden to 
providers of maintaining duplicative subscriber eligibility information 
from the National Verifier are unsupported by any ``sound policy 
basis.'' Further, USTelecom argues the rule may actually subvert 
program goals of ``. . . `ensur[ing] that the National Verifier will 
incorporate robust privacy and data security best practices in its 
creation and operation of the National Verifier.' '' No parties filed 
in opposition to USTelecom's petition on this issue.
    44. The Commission now modifies Sec.  54.410(b)(2)(ii), (c)(2)(ii), 
and (e) to clarify that where the National Verifier is responsible for 
the consumer's initial eligibility determination or recertification, 
the National Verifier is not required to deliver copies of those 
certifications to the ETC. The Commission finds that this amendment to 
the rules is consistent with the goals of the National Verifier to ease 
burdens on Lifeline providers while improving privacy and security for 
consumers applying to participate in the program. This amendment also 
brings Sec.  54.410 of the Commission's rules in line with the 
Commission's stated intent in the 2016 Lifeline Order that Lifeline 
providers would not be required to retain eligibility documentation for 
eligibility determinations made by the National Verifier. Additionally, 
the Commission agrees with USTelecom that requiring Lifeline providers 
to maintain duplicative subscriber enrollment documentation presents 
unnecessary

[[Page 2082]]

risk to the privacy and security of subscriber information.

IV. Memorandum Opinion and Order

    45. To fully realize the Commission's objectives of providing 
Lifeline-support for broadband services, the Commission provides 
clarity to ensure that service providers claiming Lifeline support for 
broadband service actually provide Lifeline customers with the level of 
broadband service intended in the 2016 Lifeline Order. In February 
2017, the Wireline Competition Bureau solicited public comment on a 
TracFone Wireless, Inc. (TracFone) request for clarification regarding 
Sec. Sec.  54.408 and 54.411 of the Commission's rules. The Commission 
now removes any uncertainty in the record with respect to whether 
certain Wi-Fi technologies qualify for Lifeline reimbursement by 
clarifying that broadband internet access delivered via Wi-Fi is not 
eligible for reimbursement as mobile broadband under the Lifeline 
program rules, and the Commission reiterates that mobile broadband 
service eligible for Lifeline reimbursement must be provided on a 
network using at least 3G (Third Generation) mobile technologies. The 
Commission also clarifies that a provider does not directly serve a 
customer with fixed broadband service under the Lifeline rules if that 
customer cannot access the services at their residential address and, 
therefore, Wi-Fi offerings like the ``premium Wi-Fi'' service described 
in the record also do not qualify for Lifeline support as fixed 
broadband service offerings.
    46. In its request for clarification, TracFone sought clarification 
regarding the types of service that meet the minimum service standards 
for Lifeline-supported mobile broadband and qualify for the twelve-
month benefit port freeze. In response, several commenters expressed 
concerns that interpreting the minimum service standards for Lifeline-
eligible mobile broadband to allow for Wi-Fi-delivered broadband as 
described in the request would inhibit the Commission's goal of 
supporting quality service to low-income consumers, while others 
supported an interpretation of the Commission's rules that would permit 
Lifeline support for ``premium Wi-Fi'' access offerings.
    47. The Commission clarifies that ``premium Wi-Fi'' and other 
similar networks of Wi-Fi-delivered broadband internet access service 
do not qualify as mobile broadband under the Lifeline program rules. 
(See 47 CFR 54.400 et seq.) In the 2016 Lifeline Order, the Commission 
focused on ``mobile network technologies'' and mobile service offerings 
over different generations of mobile technologies in adopting rules for 
Lifeline-eligible mobile broadband service. (See 47 CFR 
54.408(b)(2)(i).) Against this backdrop, the Commission established 
minimum service standards, including minimum 3G (Third Generation 
mobile network) speeds, to qualify for Lifeline support. There is no 
evidence in the record that Wi-Fi-only technology, as deployed today, 
is a ``mobile technology'' or one of the ``generations'' of mobile 
technologies, as contemplated by the Commission in the 2016 Lifeline 
Order. Further, nothing in the record demonstrates that Wi-Fi, 
including ``premium Wi-Fi,'' as deployed today, should be treated as an 
industry accepted generation of mobile technology.
    48. The Commission also disagrees with Telrite that the use of the 
term ``3G'' in the Sec.  54.408(b)(2)(i) of the Commission's rules was 
only intended as a proxy for a particular minimum network speed 
threshold and not a generation of mobile technology. In the 2016 
Lifeline Order, the Commission's discussion makes it clear that it was 
incorporating industry mobile technology generations, and that 3G was 
not just a proxy for a speed threshold. The Commission, for example, 
stated that ``[f]or the mobile broadband minimum service standard for 
speed, it relies on Form 477 data while also incorporating industry 
mobile technology generation (i.e., 3G, 4G).''
    49. Unlike Wi-Fi, mobile networks provide ubiquitous mobility with 
large service area coverage. Wi-Fi access, however, can be a complement 
to a consumer's primary broadband service. Lifeline-eligible mobile 
broadband requires a mobile service provided through 3G mobile 
broadband technologies or subsequent and superior generations of mobile 
broadband technologies. Accordingly, the rules governing Lifeline 
support for a ``mobile broadband service'' contemplate not just a 
minimum of ``3G'' mobile network threshold speeds, but also a mobile 
network. (47 U.S.C. 153(33) (defining ``mobile service''); 47 CFR 20.3 
(same).) As noted above, mobile networks, unlike current Wi-Fi 
networks, provide ubiquitous mobility within a large service area. Was 
the Commission to interpret the minimum service standard otherwise, an 
ETC could offer any fixed service with an arguably fast-enough speed, 
limit it to serve end users primarily using mobile devices, and claim 
that such a service was in fact ``mobile'' broadband because it offers 
speeds faster than ``3G.'' As a result, the section establishing 
Lifeline minimum service standards for fixed broadband service would 
have no meaningful application, because ETCs could simply offer the 
much lower data allowances permitted under the mobile broadband 
standards, supplement that amount with Wi-Fi-delivered data, and 
receive the same Lifeline support amount. (See 47 CFR 54.408(b)(1).)
    50. The Commission also clarifies that a provider does not directly 
serve a customer with fixed broadband service under the Lifeline rules 
if that customer cannot access the service at their residential 
address. (See 47 CFR 54.407(a) (``Universal service support for 
providing Lifeline shall be provided directly to an eligible 
telecommunications carrier based on the number of actual qualifying 
low-income customers it serves directly as of the first day of the 
month.'')) The 2016 Lifeline Order contemplates Lifeline-supported 
fixed broadband service as a residential service. A service that, for 
example, purports to offer Lifeline-supported fixed broadband service 
but only provides customers with access to hotspots that a qualifying 
low-income subscriber cannot access from their own residence undermines 
the Commission's requirement that carriers directly provide service to 
receive reimbursement. A review of the Wi-Fi service disputed in the 
record before us indicates that the iPass network used to provide the 
premium Wi-Fi service keeps customers connected in ``hotels, airports, 
and other business venues,'' trains, airplanes, and convention centers, 
and in many towns only includes hotspots at establishments with pre-
existing free public Wi-Fi offerings, like McDonald's, Burger King, and 
Walmart. (See The iPass Global Wi-Fi Network, iPass (last visited Oct. 
24, 2017), https://www.ipass.com/mobile-network/. See also, e.g., iPass 
hotspot locations in Indianola, Iowa, and Forrest City, Arkansas, 
https://hotspot-finder.ipass.com/united-states/indianola-iowa, https://hotspot-finder.ipass.com/united-states/forrest-city-arkansas (last 
visited Oct. 24, 2017).) Some commenters indicated that these hot spot 
locations are ``likely to be of little use to most Lifeline customers'' 
because few of the hot spots are located in low-income residential 
areas, and the hot spot locations ``may not be common areas in which 
Lifeline customers would find themselves trying to utilize their 
Lifeline supported [broadband internet access service].'' (TracFone 
Wireless Reply at 7 & n. 12; Public Utility Division of Oklahoma 
Comments at 4.) TracFone also states that based on its sample testing 
for one Florida ZIP

[[Page 2083]]

Code, ``[l]ess than one percent of the 10,223 Lifeline households 
within that ZIP Code reside within areas covered by iPass hotspots'' 
and that nine of the twelve iPass hot spots within that ZIP Code ``are 
located inside business locations (typically, restaurants and hotels, 
and only available to patrons of those businesses).'' Accordingly, 
these types of premium Wi-Fi services would be functionally 
inaccessible to many Lifeline consumers and, thus, offering such 
services does not directly serve a Lifeline customer with fixed 
broadband service as required by Sec.  54.407(a) of the Lifeline rules.

V. Procedural Matters

A. Paperwork Reduction Act

    51. The Fourth Report and Order contains new information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. It will be submitted to the Office of Management and 
Budget (OMB) for review under section 3507(d) of the PRA. OMB, the 
general public, and other federal agencies will be invited to comment 
on the revised information collection requirements contained in this 
proceeding. In addition, the Commission notes that pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, the 
Commission previously sought specific comment on how it might further 
reduce the information collection burden on small business concerns 
with fewer than 25 employees.
    52. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Federal Communications Commission (Commission) 
included an Initial Regulatory Flexibility Analysis (IRFA) of the 
possible significant economic impact on a substantial number of small 
entities by the policies and rules proposed in the 2015 Lifeline FNPRM 
in WC Docket Nos. 11-42, 09-197, 10-90. The Commission sought written 
public comment on the proposals in the 2015 Lifeline FNPRM, including 
comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) 
conforms to the RFA.
    53. The Commission is required by section 254 of the Communications 
Act of 1934, as amended, to promulgate rules to implement the universal 
service provisions of section 254. The Lifeline program was implemented 
in 1985 in the wake of the 1984 divestiture of AT&T. On May 8, 1997, 
the Commission adopted rules to reform its system of universal service 
support mechanisms so that universal service is preserved and advanced 
as markets move toward competition. Since the 2012 Lifeline Reform 
Order, 77 FR 12952, March 2, 2012, the Commission has acted to address 
waste, fraud and abuse in the Lifeline program and improved program 
administration and accountability. In this Fourth Report and Order, 
Order on Reconsideration, and Memorandum Opinion and Order (Order), the 
Commission takes steps to focus Lifeline program support to effectively 
and efficiently bridge the digital divide for low-income consumers 
while minimizing the contributions burden on ratepayers. The Commission 
resolves questions regarding enhanced Lifeline support for Tribal 
lands, which were raised in the 2015 Lifeline Further Notice of 
Proposed Rulemaking but left unaddressed by the 2016 Lifeline Order. 
The Commission resolves Petitions for Reconsideration to improve 
competition and efficiency in the Lifeline program. The Commission 
enables competition and empower Lifeline consumers by increasing their 
ability to switch their Lifeline benefit to a new provider. The 
Commission also clarifies how Lifeline providers should apply the 
Lifeline discount to service offerings that include Lifeline-supported 
broadband internet access service.
    54. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``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 that: (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). Nationwide, there are a total of approximately 
28.2 million small businesses, according to the SBA. A ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.''
    55. Small Entities, Small Organizations, Small Governmental 
Jurisdictions. Our actions, over time, may affect small entities that 
are not easily categorized at present. The Commission therefore 
describes here, at the outset, three comprehensive small entity size 
standards that could be directly affected herein. As of 2016, according 
to the SBA, there were 28.8 million small businesses in the U.S., which 
represented 99.9 percent of all businesses in the United States. 
Additionally, a ``small organization is generally any not-for-profit 
enterprise which is independently owned and operated and not dominant 
in its field.'' Nationwide, as of 2014, there were approximately 
2,131,200 small organizations. Finally, the term ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand''. U.S. Census Bureau data 
published in 2012 indicates that there were 89,476 local governmental 
jurisdictions in the United States. The Commission estimates that, of 
this total, as many as 88,761 entities may qualify as ``small 
governmental jurisdictions.'' Thus, the Commission estimates that most 
governmental jurisdictions are small.
    56. A number of our rule changes will result in additional 
reporting, recordkeeping, or compliance requirements for small 
entities. For all of those rule changes, the Commission has determined 
that the benefit the rule change will bring for the Lifeline program 
outweighs the burden of the increased requirement/s. Other rule changes 
decrease reporting, recordkeeping, or compliance requirements for small 
entities. The Commission has noted the applicable rule changes below 
impacting small entities.
    57. Compliance burdens. All of the rules the Commission implements 
impose some compliance burdens on small entities by requiring them to 
become familiar with the new rules to comply with them. For several of 
the new rules the burden of becoming familiar with the new rule in 
order to comply with it is the only additional burden the rule imposes.
    58. The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): ``(1) the establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for such small entities; (3) the 
use of performance rather than design standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for such small 
entities.''
    59. This rulemaking could impose minimal additional burdens on 
small entities. In this Order, the Commission

[[Page 2084]]

modifies certain Lifeline rules to target funding to areas where it is 
most needed. In developing these rules, the Commission worked to ensure 
the burdens associated with implementing these rules would be minimized 
for all service providers, including small entities. In taking this 
action, the Commission considered potential impacts on service 
providers, including small entities. The Commission considered 
alternatives to the rulemaking changes that increase projected 
reporting, recordkeeping and other compliance requirements for small 
entities, including alternatives on how to define ``rural'' for 
purposes of describing rural Tribal lands and how the Commission and 
USAC could provide mapping resources to help small entities identify 
with certainty areas that are eligible for enhanced support. In 
developing our rules related to Tribal benefits, the Commission 
carefully crafted the requirements to be easier on all service 
providers and determined that a specific carve-out for small businesses 
was not necessary.
    60. No commenters specifically offered alternatives to the changes 
made in this Order. Further, given the narrow and targeted scope of the 
changes being made no alternative readily presents itself to limit the 
burdens on small business or organizations. The identified increase in 
burden is minimal and outweighed by the advantages in combating waste, 
fraud, and abuse in the program.

VII. Ordering Clauses

    61. Accordingly, it is ordered, that pursuant to the authority 
contained in sections 1 through 4, 201 through 205, 254, and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 
254, and 403, and Sec.  1.2 of the Commission's rules, 47 CFR 1.2, this 
Fourth Report and Order, Order on Reconsideration, and Memorandum 
Opinion and Order is adopted effective thirty (30) days after the 
publication of this Fourth Report and Order, Order on Reconsideration, 
and Memorandum Opinion and Order, in the Federal Register, except to 
the extent provided herein and expressly addressed below.
    62. It is further ordered, that pursuant to the authority contained 
in sections 1 through 4, 201 through 205, 254, and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 
254, and 403, part 54 of the Commission's rules, 47 CFR part 54, is 
amended as described in the following Final Rules, and such rule 
amendments to Sec. Sec.  54.403(b) and 54.410 of the Commission's rules 
shall be effective thirty (30) days after the publication of this 
Fourth Report and Order, Order on Reconsideration, and Memorandum 
Opinion and Order in the Federal Register.
    63. It is further ordered, that pursuant to the authority contained 
in sections 1 through 4, 201 through 205, 254, and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 
254, and 403, that the removal and reservation of Sec.  54.411 of the 
Commission's rules shall be effective sixty (60) days after the 
publication of this Fourth Report and Order, Order on Reconsideration, 
and Memorandum Opinion and Order in the Federal Register.
    64. It is further ordered, that pursuant to the authority contained 
in sections 1 through 4, 201 through 205, 254, and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 
254, and 403, part 54 of the Commission's rules, 47 CFR part 54, is 
amended as described in the following Final Rules, and such rule 
amendments to Sec. Sec.  54.403(a)(3), 54.413, and 54.414 of the 
Commission's rules are subject to the PRA and shall be effective ninety 
(90) days after announcement in the Federal Register of OMB approval of 
the subject information collection requirements or on August 1, 2018, 
whichever occurs later.
    65. It is further ordered that, pursuant to the authority contained 
in sections 1-5 and 254 of the Communications Act of 1934, as amended, 
47 U.S.C. 151-155 and 254, and Sec.  1.429 of the Commission's rules, 
47 CFR 1.429, the Petition for Reconsideration filed by United States 
Telecom Association on June 23, 2016 and the Petition for 
Reconsideration/Clarification of NTCA--The Rural Broadband Association 
and WTA--Advocates for Rural Broadband are granted to the extent 
described above.
    66. It is further ordered that the Commission shall send a copy of 
this Fourth Report and Order, Order on Reconsideration, and Memorandum 
Opinion and Order to Congress and to the Government Accountability 
Office pursuant to the Congressional Review Act, see 5 U.S.C. 
801(a)(1)(A).

List of Subjects in 47 CFR Part 54

    Communications common carriers, Health facilities, Infants and 
children, internet, Libraries, Reporting and recordkeeping 
requirements, Schools, Telecommunications, Telephone.

Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer, Office of the Secretary.

Final Rule

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority citation for part 54 continues to read as follows:

    Authority:  47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
254, 303(r), 403, and 1302 unles otherwise noted.

0
2. Amend Sec.  54.403 by revising paragraphs (a)(3) and (b)(1) to read 
as follows:


Sec.  54.403   Lifeline support amount.

* * * * *
    (a) * * *
    (3) Tribal lands support amount. Additional federal Lifeline 
support of up to $25 per month will be made available to a eligible 
telecommunications carrier providing facilities-based Lifeline service 
to an eligible resident of Tribal lands, as defined in Sec.  54.400(e), 
if the subscriber's residential location is rural, as defined in Sec.  
54.505(b)(3)(i) and (ii), and the eligible telecommunications carrier 
certifies to the Administrator that it will pass through the full 
Tribal lands support amount to the qualifying eligible resident of 
Tribal lands and that it has received any non-federal regulatory 
approvals necessary to implement the required rate reduction.
    (b) Application of Lifeline discount amount. (1) Eligible 
telecommunications carriers that charge federal End User Common Line 
charges or equivalent federal charges must apply federal Lifeline 
support to waive the federal End User Common Line charges for Lifeline 
subscribers if the carrier is seeking Lifeline reimbursement for 
eligible voice telephony service provided to those subscribers. Such 
carriers must apply any additional federal support amount to a 
qualifying low-income consumer's intrastate rate, if the carrier has 
received the non-federal regulatory approvals necessary to implement 
the required rate reduction. Other eligible telecommunications carriers 
must apply the federal Lifeline support amount, plus any additional 
support amount, to reduce the cost of any generally available 
residential service plan or package offered by such carriers that 
provides at least one supported service as described in Sec.  
54.101(a), and charge

[[Page 2085]]

Lifeline subscribers the resulting amount.
* * * * *

0
3. Amend Sec.  54.410 by revising paragraphs (b)(2)(ii), (c)(2)(ii), 
and (e) to read as follows:


Sec.  54.410   Subscriber eligibility determination and certification.

* * * * *
    (b) * * *
    (2) * * *
    (ii) If a state Lifeline administrator or other state agency is 
responsible for the initial determination of a subscriber's 
eligibility, a copy of the subscriber's certification that complies 
with the requirements set forth in paragraph (d) of this section.
* * * * *
    (c) * * *
    (2) * * *
    (ii) If a state Lifeline administrator or other state agency is 
responsible for the initial determination of a subscriber's 
eligibility, a copy of the subscriber's certification that complies 
with the requirements set forth in paragraph (d) of this section.
* * * * *
    (e) State Lifeline administrators or other state agencies that are 
responsible for the initial determination of a subscriber's eligibility 
for Lifeline must provide each eligible telecommunications carrier with 
a copy of each of the certification forms collected by the state 
Lifeline administrator or other state agency for that carrier's 
subscribers.
* * * * *


Sec.  54.411   [Removed and Reserved]

0
4. Remove and reserve Sec.  54.411.

0
5. Revise Sec.  54.413 to read as follows:


Sec.  54.413   Link Up for rural Tribal lands.

    (a) For purposes of this subpart, the term ``Tribal Link Up'' means 
an assistance program for eligible residents of Tribal lands, if the 
subscriber's location is rural, as defined in Sec.  54.505(b)(3)(i) and 
(ii), seeking telecommunications service from a telecommunications 
carrier that is receiving high-cost support on rural Tribal lands, 
pursuant to subpart D of this part, that provides:
    (1) A 100 percent reduction, up to $100, of the customary charge 
for commencing telecommunications service for a single 
telecommunications connection at a subscriber's principal place of 
residence imposed by an eligible telecommunications carrier that is 
also receiving high-cost support on rural Tribal lands, pursuant to 
subpart D of this part. For purposes of this subpart, a ``customary 
charge for commencing telecommunications service'' is the ordinary 
charge an eligible telecommunications carrier imposes and collects from 
all subscribers to initiate service with that eligible 
telecommunications carrier. A charge imposed only on qualifying low-
income consumers to initiate service is not a customary charge for 
commencing telecommunications service. Activation charges routinely 
waived, reduced, or eliminated with the purchase of additional 
products, services, or minutes are not customary charges eligible for 
universal service support; and
    (2) A deferred schedule of payments of the customary charge for 
commencing telecommunications service for a single telecommunications 
connection at a subscriber's principal place of residence imposed by an 
eligible telecommunications carrier that is also receiving high-cost 
support on rural Tribal lands, pursuant to subpart D of this part, for 
which the eligible resident of rural Tribal lands does not pay 
interest. The interest charges not assessed to the eligible resident of 
rural Tribal lands shall be for a customary charge for connecting the 
telecommunications service of up to $200 and such interest charges 
shall be deferred for a period not to exceed one year.
    (b) An eligible resident of rural Tribal lands may receive the 
benefit of the Tribal Link Up program for a second or subsequent time 
only for otherwise qualifying commencement of telecommunications 
service at a principal place of residence with an address different 
from the address for which Tribal Link Up assistance was provided 
previously.


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5. Amend Sec.  54.414 by revising paragraph (b) to read as follows:


Sec.  54.414   Reimbursement for Tribal Link Up.

* * * * *
    (b) In order to receive universal support reimbursement for 
providing Tribal Link Up, eligible telecommunications carriers must use 
the maps made available by the Administrator to determine an eligible 
resident of rural Tribal lands' initial eligibility for Tribal Link Up. 
Eligible telecommunications carriers must obtain a certification form 
from each eligible resident of Tribal lands that complies with Sec.  
54.410 prior to enrolling him or her in Tribal Link Up.
* * * * *

[FR Doc. 2018-00152 Filed 1-12-18; 8:45 am]
 BILLING CODE 6712-01-P