E-Rate Program Amortization Requirement, Modernizing the E-Rate Program for Schools and Libraries, 4035-4039 [2019-02292]

Download as PDF Federal Register / Vol. 84, No. 31 / Thursday, February 14, 2019 / Proposed Rules environment and Alternative S–4 was deemed not cost-effective. EPA selected Alternative S–3, excavation and off-site disposal at an approved facility, for the soil remedy in the September 26, 1989, ROD. A cleanup level of 200 milligram per kilogram (mg/kg) lead was selected based on human health risk modeling. The remedial action objective was to prevent direct contact with, and inhalation of, lead-contaminated soil. EPA determined that this remedial action would allow for unrestricted access and use of the plant property. EPA also selected a cleanup remedy for groundwater; the remedy for VOCs in groundwater was extraction, treatment, and discharge of cleaned water. EPA issued a ROD Amendment in 2005 changing the groundwater remedy to monitored natural attenuation. Soil Response Actions and Cleanup Levels In March 1990 Beckman conducted the soil remedial action, excavating approximately 18 cubic feet of leadcontaminated soil, which was transported to Kettleman Hills Landfill, a CERCLA-approved facility in Kettleman City, California. In 2013, EPA issued the Fourth FiveYear Review Report which assessed the protectiveness of the remedy. In this report EPA noted that in 2009 the California residential lead screening level (SL) was revised to 80 mg/kg, based on 1 mg/deciliter benchmark for source-specific incremental change in blood lead levels for children. EPA determined that the 1990 soil cleanup was protective for commercial/ industrial use of the property but not residential use. Based on the finding in the Fourth Five-Year Review Report, EPA asked BCI to re-evaluate the postexcavation lead concentrations and determine if the new residential lead screening level of 80 mg/kg had been attained during the 1990 soil excavation. From 2015 to 2017, BCI, with EPA oversight, conducted several investigations and excavations. Soil samples were collected from the 1990 excavation area and several samples had lead above 80 mg/kg. In 2017 BCI did a more thorough investigation and by October 2017 had excavated approximately 270 additional cubic yards of soil, which were transported to Kettleman Hills Landfill. Confirmation sampling and analysis indicated that 50 samples were below the California residential screening level of 80 mg/kg and four samples were just above this concentration. The average concentration of the remaining soil is well below 80 mg/kg; a statistical VerDate Sep<11>2014 17:17 Feb 13, 2019 Jkt 247001 analysis for the remaining soil calculated a conservative estimate of a mean concentration of 24 mg/kg. EPA determined that the Site soil had been cleaned to a level that allows for unlimited use and unrestricted exposure. Monitoring and Institutional Controls Because the soil is now clean enough to allow for any future use, no maintenance and monitoring of the soils remedy is required and no institutional controls are needed to restrict future property use. 2018 Five-Year Review EPA conducts reviews every five years to determine if remedies are functioning as intended and if they continue to be protective of human health and the environment. EPA issued the Fifth Five-Year Review Report on August 23, 2018, and concluded that the soil remediation is complete and the remedy at the Beckman Instruments Site is protective of human health and the environment. There were no issues or recommendations. The next five-year review, scheduled for 2023, will evaluate the groundwater remedy only. Community Involvement EPA prepared a Community Involvement Plan in 1987 and updated it in 1994. EPA held numerous community meetings before and during the Site cleanup and issued fact sheets, most of which focused on groundwater. EPA released two Proposed Plans, one for the ROD and one for the ROD Amendment. EPA released a fact sheet shortly before publication of this Notice informing the community of the proposal to delete the soil portion of the Site from the NPL and how to submit comments. Determination That the Criteria for Deletion Have Been Met EPA has followed all procedures required by 40 CFR 300.425(e), Deletion from the NPL. EPA consulted with the State of California prior to developing this Notice. EPA determined that the responsible party has implemented all appropriate response actions required and that no further response action for the soil portion of the Site is appropriate. EPA is publishing a notice in a major local newspaper, The Porterville Recorder, of its intent to partially delete the Site and how to submit comments. EPA placed copies of documents supporting the proposed partial deletion in the Site information repositories; these documents are available for public inspection and copying. PO 00000 Frm 00034 Fmt 4702 Sfmt 4702 4035 The implemented soil remedy achieved the degree of cleanup and protection specified in the ROD for the soil portion of the Site. The selected remedial action objectives and associated cleanup levels for the soil are consistent with agency policy and guidance. Based on information currently available to EPA, no further Superfund response in the area proposed for deletion is needed to protect human health and the environment. List of Subjects in 40 CFR Part 300 Environmental protection, Air pollution control, Chemicals, Hazardous waste, Hazardous substances, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements, Superfund, Water pollution control, Water supply. Authority: 33 U.S.C. 1321(d); 42 U.S.C. 9601–9657; E.O. 13626, 77 FR 56749, 3 CFR, 2013 Comp., p.306; E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., p.351; E.O. 12580, 52 FR 2923, 3 CFR, 1987 Comp., p. 193. Dated: January 22, 2019. Michael B. Stoker, Regional Administrator, Region 9. [FR Doc. 2019–02348 Filed 2–13–19; 8:45 am] BILLING CODE 6560–50–P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 1 [WC Docket Nos. 19–2 and 13–184; FCC 19–5] E-Rate Program Amortization Requirement, Modernizing the E-Rate Program for Schools and Libraries Federal Communications Commission. ACTION: Proposed rule. AGENCY: In this document, the Federal Communications Commission (Commission) proposes to eliminate the E-Rate amortization requirement, which requires E-Rate applicants to amortize over three years upfront, non-recurring category one charges of $500,000 or more. Through this measure, the Commission seeks to further the Commission’s goal of closing the digital divide by facilitating and promoting increased broadband infrastructure deployment to our nation’s schools and libraries. DATES: Comments are due on or before March 18, 2019 and reply comments are due on or before April 1, 2019. If you anticipate that you will be submitting comments, but find it difficult to do so SUMMARY: E:\FR\FM\14FEP1.SGM 14FEP1 4036 Federal Register / Vol. 84, No. 31 / Thursday, February 14, 2019 / Proposed Rules within the period of time allowed by this document, you should advise the contact listed below as soon as possible. ADDRESSES: You may submit comments, identified by WC Docket Nos. 19–2 and 13–184, by any of the following methods: • Federal Communications Commission’s Website: https:// apps.fcc.gov/ecfs//. Follow the instructions for submitting comments. • People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202–418–0530 or TTY: 888– 835–5322. For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document. FOR FURTHER INFORMATION CONTACT: Bryan P. Boyle, Wireline Competition Bureau, (202) 418–7924 or TTY: (202) 418–0484. SUPPLEMENTARY INFORMATION: This is a summary of the Commission’s Notice of Proposed Rulemaking (NPRM) in WC Docket Nos. 19–2 and 13–184; FCC 19– 5, adopted on January 29, 2019 and released on January 31, 2019. 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:// docs.fcc.gov/public/attachments/FCC19-5A1.pdf. I. Introduction 1. Schools and libraries rely on the Commission’s E-Rate program to ensure that they can receive affordable, highspeed broadband so they can connect today’s students with next-generation learning opportunities. A Commission decision in 2000 limited E-Rate’s use for this purpose by requiring schools and libraries to amortize over three years upfront, non-recurring category one charges of $500,000 or more, which includes charges for special construction projects. This amortization requirement increased costs for E-Rate supported builds and created uncertainty for applicants about the availability of E-Rate funding for the second and third years of the amortization cycle. In 2014, the Commission suspended the requirement through funding year 2018 in order to lower these barriers to broadband infrastructure investment. Our experience over the past few years suggests that allowing the amortization VerDate Sep<11>2014 17:17 Feb 13, 2019 Jkt 247001 requirement to be restored would decrease broadband investment while increasing administrative burdens, and that eliminating the requirement would not create a drain on E-Rate funding. Therefore, the Commission now proposes to eliminate the amortization requirement. Through these measures, the Commission seeks to further its goals of closing the digital divide by facilitating and promoting increased broadband infrastructure deployment to our nation’s schools and libraries. II. Notice of Proposed Rulemaking 2. To promote the buildout and deployment of high-speed networks and connections on a permanent basis to unserved and underserved schools and libraries, including those in rural areas, the Commission proposes to eliminate the amortization requirement for nonrecurring category one funding requests over $500,000, including for special construction, from the E-Rate program. As discussed below, our experience indicates that the suspension of the amortization requirement has encouraged the deployment of highspeed, low-cost broadband networks by eliminating administrative barriers and making E-Rate funding more predictable. 3. Based on the information before us, it appears that suspending the amortization requirement has: (1) Decreased administrative burdens associated with applying for E-Rate support; (2) allowed applicants and service providers to receive disbursements for the full E-Rate supported portion of projects sooner; and (3) reduced uncertainty regarding the availability of funding. Under the suspension, rather than filing funding requests in each year of the amortization cycle, applicants have had to file only a single funding request to receive ERate support for a project, thereby reducing the administrative effort and costs associated with filing funding requests. Moreover, during the suspension, service providers have recouped their buildout costs in one funding year rather than over the threeyear amortization cycle, which, in turn, has likely made special construction a more attractive option for service providers. Additionally, applicants have enjoyed more certainty about funding for their special construction projects, receiving commitments for projects upfront, rather than in a piecemeal fashion over three years. As a result, the suspension of the amortization requirement has provided applicants and service providers with increased certainty and predictability that E-Rate funding will be available for large, PO 00000 Frm 00035 Fmt 4702 Sfmt 4702 special construction funding requests, which has likely incentivized efficient investment in infrastructure, including the deployment of fiber. 4. The Commission invites comment on, and evidence regarding, whether the amortization suspension has encouraged the deployment of high-speed, low-cost connections. The Commission also seeks comment on the effect of the amortization suspension on applicants and on USF expenditures. Has permitting service providers to recoup costs up front allowed applicants and the USF to pay less over time because service providers have not otherwise recouped capital costs over time through higher recurring charges? Would permanently eliminating the amortization requirement allow applicants and the USF to pay less over time for the same reason? 5. If the amortization requirement were to be restored, the Commission expects that the increased administrative burden, delayed funding commitments for special construction projects due to the three-year amortization cycle, and uncertainty around receiving funding commitments in the second and third years of the cycle would deter applicants from seeking funding for special construction. The Commission seeks comment on this view. The Commission also seeks comment on the effect of restoring the amortization requirement on applicants and on USF expenditures. Would applicants, particularly those in underserved and rural areas, be discouraged from requesting funding for special construction if the amortization requirement were to be restored? Would these applicants simply not request funding for any services at all? Would they be forced to seek funding for more costly service options, such as funding for services provided over more expensive legacy networks, thereby resulting in an increase in USF expenditures? Or would they still seek special construction funding for new networks, but with all buildout costs rolled into monthly recurring charges? What effect would this have on USF expenditures in the long term? Specifically, would rolling buildout charges into higher monthly recurring charges ultimately cause applicants and the USF to pay more over time? Does paying buildout charges upfront increase USF expenditures in the short term but decrease USF expenditures in the long term because it reduces monthly recurring charges? The Commission also seeks comment on whether an amortization requirement would conflict with the economic realities of special construction projects. E:\FR\FM\14FEP1.SGM 14FEP1 Federal Register / Vol. 84, No. 31 / Thursday, February 14, 2019 / Proposed Rules Would requiring service providers to wait several years to recover their investments for high sunk cost, low marginal cost undertakings such as special construction make them less likely to build out to unserved areas? If applicants were forced to amortize certain special construction projects, would service providers have to seek financing for part of the project, and would that increase the overall cost of the project? 6. Further, over the four funding years of the suspension, it appears the concern that one-time charges would create a drain on the Fund has not materialized. To the contrary, funding requests from funding years 2015 through 2017 that would have been amortized if the requirement had been in place represented less than 5% of all E-Rate funding commitments during that period. Going forward, the Commission does not expect that allowing all funding associated with a special construction project to be paid out in one funding year, rather than over the course of three funding years, would divert funding from other services, as demand for E-Rate funding was typically under the cap from funding years 2015 through 2018, and there is no indication that there will be a significant increase in demand for future funding years. 7. Are commenters nevertheless concerned that large special construction funding requests could deplete all E-Rate funds available under the cap and leave insufficient funding available for category two services? If so, the Commission seeks data to support commenters’ concerns. And to the extent that commenters believe that large special construction funding requests could create a drain on E-Rate funding, how would requiring amortization of such requests alleviate this concern? In particular, even if demand were to approach the E-Rate funding cap, the Commission does not believe that requiring amortization for large, upfront category one funding requests would necessarily alleviate this problem because requiring amortization would not reduce the amount of funding requested—it would simply spread out the amount of funding provided over a minimum of three years. While this approach could mitigate the impact of a one-year surge in demand for special construction, it would not mitigate problems that a consistent increase in demand would create. Are there better ways to mitigate any drain on E-Rate funding caused by large, upfront requests for category one funding other than requiring amortization? VerDate Sep<11>2014 17:17 Feb 13, 2019 Jkt 247001 8. To the extent that commenters disagree with our proposal to permanently eliminate the amortization requirement, they should explain why and provide supporting data. What are the benefits, if any, of reinstating the amortization requirement for funding year 2020 and beyond, and how do those benefits outweigh the costs of the amortization requirement? Are there problems that resulted from the amortization suspension that the Commission has not identified? III. Procedural Matters 9. Paperwork Reduction Act. The NPRM may result in revised information collection requirements. If the Commission adopts any revised information collection requirement, the Commission will publish a notice in the Federal Register inviting the public to comment on the requirement, as required by the Paperwork Reduction Act of 1995, Public Law 104–13 (44 U.S.C. 3501–3520). In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107–198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it might ‘‘further reduce the information collection burden for small business concerns with fewer than 25 employees.’’ 10. Initial Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this 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 this Notice of Proposed Rulemaking (NPRM). Written comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register. 11. 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. 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. Specifically, under the schools and libraries universal service support mechanism, also known as the E-Rate PO 00000 Frm 00036 Fmt 4702 Sfmt 4702 4037 program, eligible schools, libraries, and consortia that include eligible schools and libraries may receive discounts for eligible telecommunications services, internet access, and internal connections. 12. The rule the Commission proposes in this NPRM is directed at streamlining the administration of the E-Rate program for applicants, service providers, and the Universal Service Administrative Company. The rule that the Commission proposes would eliminate burdens associated with requesting funding for special construction. 13. The legal basis for the NPRM is contained in sections 1 through 4, 201– 205, 254, 303(r), and 403 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, 47 U.S.C. 151 through 154, 201 through 205, 254, 303(r), and 403. 14. 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). 15. Small Businesses, Small Organizations, Small Governmental Jurisdictions. The Commission’s actions, over time, may affect small entities that are not easily categorized at present. The Commission therefore describes here, at the outset, three broad groups of small entities that could be directly affected herein. First, while there are industry specific size standards for small businesses that are used in the regulatory flexibility analysis, according to data from the SBA’s Office of Advocacy, in general a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States which translates to 28.8 million businesses. 16. Next, the type of small entity described as a ‘‘small organization’’ is generally ‘‘any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.’’ Nationwide, as of August 2016, there were approximately 356,494 small organizations based on registration and E:\FR\FM\14FEP1.SGM 14FEP1 4038 Federal Register / Vol. 84, No. 31 / Thursday, February 14, 2019 / Proposed Rules tax data filed by nonprofits with the Internal Revenue Service (IRS). 17. Finally, the small entity described as a ‘‘small governmental jurisdiction’’ is defined generally as ‘‘governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.’’ U.S. Census Bureau data from the 2012 Census of Governments indicate that there were 90,056 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 37,132 General purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,184 Special purpose governments (independent school districts and special districts) with populations of less than 50,000. The 2012 U.S. Census Bureau data for most types of governments in the local government category show that the majority of these governments have populations of less than 50,000. Based on this data the Commission estimates that at least 49,316 local government jurisdictions fall in the category of ‘‘small governmental jurisdictions.’’ 18. The proposal under consideration in the NPRM may, if adopted, result in recordkeeping requirements for both large and small entities, but they should be equal to or less than existing requirements. 19. Eliminating Amortization Requirement. The Commission proposes to permanently eliminate the amortization requirement from the ERate program to provide applicants and service providers with increased certainty that E-Rate funding will be available for large, special construction funding requests, thereby likely incentivizing efficient investment in infrastructure, including deployment of fiber. The Commission seeks comment on whether eliminating the amortization requirement would increase administrative burdens for small entities. 20. 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 VerDate Sep<11>2014 17:17 Feb 13, 2019 Jkt 247001 design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.’’ 21. In this NPRM, the Commission seeks comment on a reform to the E-Rate program. The Commission seeks to streamline the program rules and administration for applicants and service providers planning their E-Rate participation in future funding years. The Commission recognizes that its proposed rule would impact small entities. The rule the Commission proposes would lessen reporting burdens on small entities. 22. Eliminating amortization requirement. By eliminating the amortization requirement, applicants may file a single application for a special construction project, rather than multiple applications over multiple years for the same special construction project. 23. Compliance burdens. Implementing our proposed rule would impose some burden on small entities by requiring them to become familiar with the new rule to comply with it. 24. Ex Parte Rules. This proceeding shall be treated as a ‘‘permit-butdisclose’’ proceeding in accordance with the Commission’s ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter’s written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex PO 00000 Frm 00037 Fmt 4702 Sfmt 4702 parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission’s ex parte rules. 25. Pursuant to §§ 1.415 and 1.419 of the Commission’s rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated in the DATES section of this document. Comments and reply comments may be filed using the Commission’s Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998). • Electronic Filers: Comments may be filed electronically using the internet by accessing the ECFS: https://apps.fcc.gov/ ecfs/. • Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary, Office of the Secretary, Federal Communications Commission. • All hand-delivered or messengerdelivered paper filings for the Commission’s Secretary must be delivered to FCC Headquarters at 445 12th St. SW, Room TW–A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building. • Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701. • U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW, Washington, DC 20554. 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 E:\FR\FM\14FEP1.SGM 14FEP1 Federal Register / Vol. 84, No. 31 / Thursday, February 14, 2019 / Proposed Rules Bureau at 202–418–0530 (voice), 202– 418–0432 (tty). IV. Ordering Clauses 26. Accordingly, it is ordered that, pursuant to the authority found in sections 1 through 4, 201–205, 254, 303(r) and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151 through 154, 201 through 205, 254, 303(r), and 403, and § 1.3 of the Commission’s rules, 47 CFR 1.3, this Notice of Proposed Rulemaking is adopted. Federal Communications Commission. Marlene Dortch, Secretary. [FR Doc. 2019–02292 Filed 2–13–19; 8:45 am] BILLING CODE 6712–01–P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 76 [DA 19–25] Electronic Delivery of MVPD Communications; Modernization of Media Regulation Initiative Federal Communications Commission. ACTION: Proposed rule. AGENCY: In this document, the Media Bureau of the Federal Communications Commission (FCC or Commission) extends the deadlines for comment on an industry proposal to revise the carriage election notice process. DATES: Submit comments on or before March 18, 2019; reply comments on or before March 26, 2019. ADDRESSES: You may submit comments, identified by MB Docket Nos. 17–105 and 17–317, by any of the following methods: • Federal Communications Commission’s Website: https:// apps.fcc.gov/ecfs//. Follow the instructions for submitting comments. • People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202–418–0530 or TTY: 888– 835–5322. For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document. FOR FURTHER INFORMATION CONTACT: For additional information on this proceeding, contact Varsha Mangal, of the Media Bureau, Video Division, (202) SUMMARY: VerDate Sep<11>2014 17:17 Feb 13, 2019 Jkt 247001 418–0073 or varsha.mangal@fcc.gov, or Lyle Elder of the Media Bureau, Policy Division, (202) 418–2365 or lyle.elder@ fcc.gov. Direct press inquiries to Janice Wise (202) 418–8165; janice.wise@ fcc.gov. SUPPLEMENTARY INFORMATION: This is a summary of the Commission’s DA 19– 25, adopted and released on January 29, 2019. The full text of this document is available electronically via the FCC’s Electronic Document Management System (EDOCS) website at https:// fjallfoss.fcc.gov/edocs_public/ or via the FCC’s Electronic Comment Filing System (ECFS) website at https:// fjallfoss.fcc.gov/ecfs2/. (Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat.) This document is also available for public inspection and copying during regular business hours in the FCC Reference Information Center, which is located in Room CY–A257 at FCC Headquarters, 445 12th Street SW, Washington, DC 20554. The Reference Information Center is open to the public Monday through Thursday from 8:00 a.m. to 4:30 p.m. and Friday from 8:00 a.m. to 11:30 a.m. The complete text may be purchased from the Commission’s copy contractor, 445 12th Street SW, Room CY–B402, Washington, DC 20554. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to fcc504@fcc.gov or calling the Commission’s Consumer and Governmental Affairs Bureau at (202) 418–0530 (voice), (202) 418–0432 (TTY). Synopsis On December 13, 2018, the Media Bureau released a PN (December PN) seeking comment on the proposal that was submitted by the National Association of Broadcasters (NAB) and NCTA—The internet and Television Association (NCTA) on December 7, 2018 in docket number 17–317 (Joint Proposal, available online at https:// ecfsapi.fcc.gov/file/1207161565486/ Ex%20Parte%20Carriage%20Elections %20Notice%20%20NCTA-NAB%20127-18.pdf).1 The Joint Proposal responds to the Electronic Delivery of MVPD Subscriber Notification Rules Notice of Proposed Rulemaking (NPRM) that sought comment, in part, on updating the requirement that broadcast televisions stations send carriage election notices via certified mail. In 1 Media Bureau Seeks Comment on Industry Proposal for Carriage Election Notice Modernization, MB Docket No. 17–317, PN, DA 18– 1250 (MB December 13, 2018). PO 00000 Frm 00038 Fmt 4702 Sfmt 4702 4039 response to the NPRM, several parties proposed ways to reduce the burden and costs involved in the carriage election process. Currently, sections 76.64(h) and 76.66(d) of our rules direct each television broadcast station to provide notice every three years, via certified mail, to each cable system or Direct Broadcast Satellite carrier serving its market regarding whether it is electing to demand carriage (‘‘must carry’’ or ‘‘mandatory carriage’’), or to withhold carriage pending negotiation (‘‘retransmission consent’’). The NPRM sought comment on revising this requirement to permit broadcast stations to use alternative means of notice. Under the Joint Proposal, a commercial broadcast TV station would be required to send notice of its must carry or retransmission consent election to a cable operator only if the station changed its election status from its previous election. In those cases, the broadcaster would send its notice to an email address listed in the cable operator’s online public file or in the FCC’s Cable Operations and Licensing System (COALS) database, for cable operators that do not have an online public file. NAB and NCTA claim that this approach ‘‘would alleviate the burdens associated with the current notification process and meet the needs of both broadcasters and cable operators.’’ The comment and reply deadlines established by the December PN, as well as the planned publication of that PN, fell during a lapse in funding. By operation of the General Counsel’s January 28, 2019 Public Notice, the deadlines for both would have been extended to the same day—January 30, 2019.2 In light of these unique circumstances, the Media Bureau, on its own motion, further extends the deadlines. We will publish this PN in the Federal Register and announce the final comment dates once they are established. We invite the public to comment on the recommended approach in the Joint Proposal. In particular, we seek comment on whether, and to what extent, the Commission should adopt these recommendations or any alternative modifications to the carriage election rules. The Commission will consider the Joint Proposal and the comments filed in response to this PN together with the comments and ex partes previously filed in response to the NPRM in determining what action to take in this proceeding. Ex Parte Rules.—Permit-But-Disclose. The proceeding shall be treated as a 2 Suspension of Filing Deadlines, Public Notice, DA 19–20 (OGC January 28, 2019). E:\FR\FM\14FEP1.SGM 14FEP1

Agencies

[Federal Register Volume 84, Number 31 (Thursday, February 14, 2019)]
[Proposed Rules]
[Pages 4035-4039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02292]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WC Docket Nos. 19-2 and 13-184; FCC 19-5]


E-Rate Program Amortization Requirement, Modernizing the E-Rate 
Program for Schools and Libraries

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: In this document, the Federal Communications Commission 
(Commission) proposes to eliminate the E-Rate amortization requirement, 
which requires E-Rate applicants to amortize over three years upfront, 
non-recurring category one charges of $500,000 or more. Through this 
measure, the Commission seeks to further the Commission's goal of 
closing the digital divide by facilitating and promoting increased 
broadband infrastructure deployment to our nation's schools and 
libraries.

DATES: Comments are due on or before March 18, 2019 and reply comments 
are due on or before April 1, 2019. If you anticipate that you will be 
submitting comments, but find it difficult to do so

[[Page 4036]]

within the period of time allowed by this document, you should advise 
the contact listed below as soon as possible.

ADDRESSES: You may submit comments, identified by WC Docket Nos. 19-2 
and 13-184, by any of the following methods:
     Federal Communications Commission's Website: https://apps.fcc.gov/ecfs//. Follow the instructions for submitting comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 888-835-5322.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Bryan P. Boyle, Wireline Competition 
Bureau, (202) 418-7924 or TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) in WC Docket Nos. 19-2 and 13-184; FCC 
19-5, adopted on January 29, 2019 and released on January 31, 2019. 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://docs.fcc.gov/public/attachments/FCC-19-5A1.pdf.

I. Introduction

    1. Schools and libraries rely on the Commission's E-Rate program to 
ensure that they can receive affordable, high-speed broadband so they 
can connect today's students with next-generation learning 
opportunities. A Commission decision in 2000 limited E-Rate's use for 
this purpose by requiring schools and libraries to amortize over three 
years upfront, non-recurring category one charges of $500,000 or more, 
which includes charges for special construction projects. This 
amortization requirement increased costs for E-Rate supported builds 
and created uncertainty for applicants about the availability of E-Rate 
funding for the second and third years of the amortization cycle. In 
2014, the Commission suspended the requirement through funding year 
2018 in order to lower these barriers to broadband infrastructure 
investment. Our experience over the past few years suggests that 
allowing the amortization requirement to be restored would decrease 
broadband investment while increasing administrative burdens, and that 
eliminating the requirement would not create a drain on E-Rate funding. 
Therefore, the Commission now proposes to eliminate the amortization 
requirement. Through these measures, the Commission seeks to further 
its goals of closing the digital divide by facilitating and promoting 
increased broadband infrastructure deployment to our nation's schools 
and libraries.

II. Notice of Proposed Rulemaking

    2. To promote the buildout and deployment of high-speed networks 
and connections on a permanent basis to unserved and underserved 
schools and libraries, including those in rural areas, the Commission 
proposes to eliminate the amortization requirement for non-recurring 
category one funding requests over $500,000, including for special 
construction, from the E-Rate program. As discussed below, our 
experience indicates that the suspension of the amortization 
requirement has encouraged the deployment of high-speed, low-cost 
broadband networks by eliminating administrative barriers and making E-
Rate funding more predictable.
    3. Based on the information before us, it appears that suspending 
the amortization requirement has: (1) Decreased administrative burdens 
associated with applying for E-Rate support; (2) allowed applicants and 
service providers to receive disbursements for the full E-Rate 
supported portion of projects sooner; and (3) reduced uncertainty 
regarding the availability of funding. Under the suspension, rather 
than filing funding requests in each year of the amortization cycle, 
applicants have had to file only a single funding request to receive E-
Rate support for a project, thereby reducing the administrative effort 
and costs associated with filing funding requests. Moreover, during the 
suspension, service providers have recouped their buildout costs in one 
funding year rather than over the three-year amortization cycle, which, 
in turn, has likely made special construction a more attractive option 
for service providers. Additionally, applicants have enjoyed more 
certainty about funding for their special construction projects, 
receiving commitments for projects upfront, rather than in a piecemeal 
fashion over three years. As a result, the suspension of the 
amortization requirement has provided applicants and service providers 
with increased certainty and predictability that E-Rate funding will be 
available for large, special construction funding requests, which has 
likely incentivized efficient investment in infrastructure, including 
the deployment of fiber.
    4. The Commission invites comment on, and evidence regarding, 
whether the amortization suspension has encouraged the deployment of 
high-speed, low-cost connections. The Commission also seeks comment on 
the effect of the amortization suspension on applicants and on USF 
expenditures. Has permitting service providers to recoup costs up front 
allowed applicants and the USF to pay less over time because service 
providers have not otherwise recouped capital costs over time through 
higher recurring charges? Would permanently eliminating the 
amortization requirement allow applicants and the USF to pay less over 
time for the same reason?
    5. If the amortization requirement were to be restored, the 
Commission expects that the increased administrative burden, delayed 
funding commitments for special construction projects due to the three-
year amortization cycle, and uncertainty around receiving funding 
commitments in the second and third years of the cycle would deter 
applicants from seeking funding for special construction. The 
Commission seeks comment on this view. The Commission also seeks 
comment on the effect of restoring the amortization requirement on 
applicants and on USF expenditures. Would applicants, particularly 
those in underserved and rural areas, be discouraged from requesting 
funding for special construction if the amortization requirement were 
to be restored? Would these applicants simply not request funding for 
any services at all? Would they be forced to seek funding for more 
costly service options, such as funding for services provided over more 
expensive legacy networks, thereby resulting in an increase in USF 
expenditures? Or would they still seek special construction funding for 
new networks, but with all buildout costs rolled into monthly recurring 
charges? What effect would this have on USF expenditures in the long 
term? Specifically, would rolling buildout charges into higher monthly 
recurring charges ultimately cause applicants and the USF to pay more 
over time? Does paying buildout charges upfront increase USF 
expenditures in the short term but decrease USF expenditures in the 
long term because it reduces monthly recurring charges? The Commission 
also seeks comment on whether an amortization requirement would 
conflict with the economic realities of special construction projects.

[[Page 4037]]

Would requiring service providers to wait several years to recover 
their investments for high sunk cost, low marginal cost undertakings 
such as special construction make them less likely to build out to 
unserved areas? If applicants were forced to amortize certain special 
construction projects, would service providers have to seek financing 
for part of the project, and would that increase the overall cost of 
the project?
    6. Further, over the four funding years of the suspension, it 
appears the concern that one-time charges would create a drain on the 
Fund has not materialized. To the contrary, funding requests from 
funding years 2015 through 2017 that would have been amortized if the 
requirement had been in place represented less than 5% of all E-Rate 
funding commitments during that period. Going forward, the Commission 
does not expect that allowing all funding associated with a special 
construction project to be paid out in one funding year, rather than 
over the course of three funding years, would divert funding from other 
services, as demand for E-Rate funding was typically under the cap from 
funding years 2015 through 2018, and there is no indication that there 
will be a significant increase in demand for future funding years.
    7. Are commenters nevertheless concerned that large special 
construction funding requests could deplete all E-Rate funds available 
under the cap and leave insufficient funding available for category two 
services? If so, the Commission seeks data to support commenters' 
concerns. And to the extent that commenters believe that large special 
construction funding requests could create a drain on E-Rate funding, 
how would requiring amortization of such requests alleviate this 
concern? In particular, even if demand were to approach the E-Rate 
funding cap, the Commission does not believe that requiring 
amortization for large, upfront category one funding requests would 
necessarily alleviate this problem because requiring amortization would 
not reduce the amount of funding requested--it would simply spread out 
the amount of funding provided over a minimum of three years. While 
this approach could mitigate the impact of a one-year surge in demand 
for special construction, it would not mitigate problems that a 
consistent increase in demand would create. Are there better ways to 
mitigate any drain on E-Rate funding caused by large, upfront requests 
for category one funding other than requiring amortization?
    8. To the extent that commenters disagree with our proposal to 
permanently eliminate the amortization requirement, they should explain 
why and provide supporting data. What are the benefits, if any, of 
reinstating the amortization requirement for funding year 2020 and 
beyond, and how do those benefits outweigh the costs of the 
amortization requirement? Are there problems that resulted from the 
amortization suspension that the Commission has not identified?

III. Procedural Matters

    9. Paperwork Reduction Act. The NPRM may result in revised 
information collection requirements. If the Commission adopts any 
revised information collection requirement, the Commission will publish 
a notice in the Federal Register inviting the public to comment on the 
requirement, as required by the Paperwork Reduction Act of 1995, Public 
Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the Small 
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), the Commission seeks specific comment on how it 
might ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.''
    10. Initial Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act of 1980, as amended (RFA), the Commission 
has prepared this 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 this Notice of Proposed 
Rulemaking (NPRM). Written comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the NPRM. The Commission will send a 
copy of the NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (SBA). In addition, the 
NPRM and IRFA (or summaries thereof) will be published in the Federal 
Register.
    11. 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. 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. Specifically, under the schools and 
libraries universal service support mechanism, also known as the E-Rate 
program, eligible schools, libraries, and consortia that include 
eligible schools and libraries may receive discounts for eligible 
telecommunications services, internet access, and internal connections.
    12. The rule the Commission proposes in this NPRM is directed at 
streamlining the administration of the E-Rate program for applicants, 
service providers, and the Universal Service Administrative Company. 
The rule that the Commission proposes would eliminate burdens 
associated with requesting funding for special construction.
    13. The legal basis for the NPRM is contained in sections 1 through 
4, 201-205, 254, 303(r), and 403 of the Communications Act of 1934, as 
amended by the Telecommunications Act of 1996, 47 U.S.C. 151 through 
154, 201 through 205, 254, 303(r), and 403.
    14. 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).
    15. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes here, at the outset, three broad groups of small 
entities that could be directly affected herein. First, while there are 
industry specific size standards for small businesses that are used in 
the regulatory flexibility analysis, according to data from the SBA's 
Office of Advocacy, in general a small business is an independent 
business having fewer than 500 employees. These types of small 
businesses represent 99.9% of all businesses in the United States which 
translates to 28.8 million businesses.
    16. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
Nationwide, as of August 2016, there were approximately 356,494 small 
organizations based on registration and

[[Page 4038]]

tax data filed by nonprofits with the Internal Revenue Service (IRS).
    17. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2012 Census of Governments indicate that there 
were 90,056 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 37,132 General purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,184 Special purpose governments (independent school 
districts and special districts) with populations of less than 50,000. 
The 2012 U.S. Census Bureau data for most types of governments in the 
local government category show that the majority of these governments 
have populations of less than 50,000. Based on this data the Commission 
estimates that at least 49,316 local government jurisdictions fall in 
the category of ``small governmental jurisdictions.''
    18. The proposal under consideration in the NPRM may, if adopted, 
result in recordkeeping requirements for both large and small entities, 
but they should be equal to or less than existing requirements.
    19. Eliminating Amortization Requirement. The Commission proposes 
to permanently eliminate the amortization requirement from the E-Rate 
program to provide applicants and service providers with increased 
certainty that E-Rate funding will be available for large, special 
construction funding requests, thereby likely incentivizing efficient 
investment in infrastructure, including deployment of fiber. The 
Commission seeks comment on whether eliminating the amortization 
requirement would increase administrative burdens for small entities.
    20. 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.''
    21. In this NPRM, the Commission seeks comment on a reform to the 
E-Rate program. The Commission seeks to streamline the program rules 
and administration for applicants and service providers planning their 
E-Rate participation in future funding years. The Commission recognizes 
that its proposed rule would impact small entities. The rule the 
Commission proposes would lessen reporting burdens on small entities.
    22. Eliminating amortization requirement. By eliminating the 
amortization requirement, applicants may file a single application for 
a special construction project, rather than multiple applications over 
multiple years for the same special construction project.
    23. Compliance burdens. Implementing our proposed rule would impose 
some burden on small entities by requiring them to become familiar with 
the new rule to comply with it.
    24. Ex Parte Rules. This proceeding shall be treated as a ``permit-
but-disclose'' proceeding in accordance with the Commission's ex parte 
rules. Persons making ex parte presentations must file a copy of any 
written presentation or a memorandum summarizing any oral presentation 
within two business days after the presentation (unless a different 
deadline applicable to the Sunshine period applies). Persons making 
oral ex parte presentations are reminded that memoranda summarizing the 
presentation must (1) list all persons attending or otherwise 
participating in the meeting at which the ex parte presentation was 
made, and (2) summarize all data presented and arguments made during 
the presentation. If the presentation consisted in whole or in part of 
the presentation of data or arguments already reflected in the 
presenter's written comments, memoranda, or other filings in the 
proceeding, the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with rule 1.1206(b). In proceedings governed by 
rule 1.49(f) or for which the Commission has made available a method of 
electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.
    25. Pursuant to Sec. Sec.  1.415 and 1.419 of the Commission's 
rules, 47 CFR 1.415, 1.419, interested parties may file comments and 
reply comments on or before the dates indicated in the DATES section of 
this document. Comments and reply comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS). See Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: https://apps.fcc.gov/ecfs/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours 
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes and boxes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street SW, Washington, DC 20554.
    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

[[Page 4039]]

Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

IV. Ordering Clauses

    26. Accordingly, it is ordered that, pursuant to the authority 
found in sections 1 through 4, 201-205, 254, 303(r) and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151 through 154, 201 
through 205, 254, 303(r), and 403, and Sec.  1.3 of the Commission's 
rules, 47 CFR 1.3, this Notice of Proposed Rulemaking is adopted.

Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2019-02292 Filed 2-13-19; 8:45 am]
 BILLING CODE 6712-01-P
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