Connect America Fund, 19874-19877 [2019-09241]
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19874
Federal Register / Vol. 84, No. 88 / Tuesday, May 7, 2019 / Rules and Regulations
review the remand, and if the remand is
not authorized by this section, vacate
the remand order. The determination on
a request to review a remand order is
binding and not subject to further
review. The review of remand
procedures provided for in this
paragraph (g) are not available for and
do not apply to remands that are issued
in paragraph (d)(1) of this section.
■ 45. Section 423.2100 is amended by
revising paragraph (a) to read as follows:
§ 423.2100 Medicare Appeals Council
review: general.
(a) An enrollee who is dissatisfied
with an ALJ’s or attorney adjudicator’s
decision or dismissal may request that
the Council review the ALJ’s or attorney
adjudicator’s decision or dismissal.
*
*
*
*
*
■ 46. Section 423.2110 is amended—
■ a. In paragraph (a) introductory text by
removing the phrase ‘‘after the date’’
and adding the phrase ‘‘of receipt’’ in its
place;
■ b. In paragraph (b)(2) introductory text
by removing the term ‘‘issued’’ and
adding the term ‘‘received’’ in its place;
and
■ c. Adding paragraph (e).
The addition reads as follows.
§ 423.2110
motion.
Council review on its own
*
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*
(e) Referral timeframe. For purposes
of this section, the date of receipt of the
ALJ’s or attorney adjudicator’s decision
or dismissal is presumed to be 5
calendar days after the date of the notice
of the decision or dismissal, unless
there is evidence to the contrary.
[Amended]
47. Section 423.2112 is amended in
paragraph (a)(4)—
■ a. By removing the phrase ‘‘health
insurance claim’’; and
■ b. By removing the phrase ‘‘and
signature’’.
■ 48. Section 423.2136 is amended by
revising paragraphs (a) and (b)(1) to read
as follows.
■
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§ 423.2136
Judicial review.
(a) General rule—(1) Review of
Council decision. To the extent
authorized by sections 1876(c)(5)(B) and
1860D–4(h) of the Act, an enrollee may
obtain a court review of a Council
decision if—
(i) It is a final decision of the
Secretary; and
(ii) The amount in controversy meets
the threshold requirements of
§ 423.2006.
(2) Review of ALJ’s or attorney
adjudicator’s decision. To the extent
VerDate Sep<11>2014
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
Federal Communications Commission.
Marlene Dortch,
Secretary, Office of the Secretary.
[FR Doc. 2019–09114 Filed 5–3–19; 11:15 am]
[FR Doc. 2019–09242 Filed 5–6–19; 8:45 am]
BILLING CODE 4120–01–P
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Parts 52 and 64
47 CFR Part 54
[CG Docket No. 17–59; Report No. 3125]
*
§ 423.2112
Dated: March 19, 2019.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: April 2, 2019.
copying at the FCC Reference
Information Center, 445 12th Street SW,
Room CY–A257, Washington, DC 20554.
They also may be accessed online via
the Commission’s Electronic Comment
Filing System at: https://apps.fcc.gov/
ecfs/. The Commission will not send a
Congressional Review Act (CRA)
submission to Congress or the
Government Accountability Office
pursuant to the CRA, 5.U.S.C. because
no rules are being adopted by the
Commission.
Subject: Advanced Methods to Target
and Eliminate Unlawful Robocalls, FCC
18–177, published at 84 FR 11226,
March 26, 2019, in CG Docket No. 17–
59. This document is being published
pursuant to 47 CFR 1.429(e). See also 47
CFR 1.4(b)(1) and 1.429(f), (g).
Number of Petitions Filed: 2.
authorized by sections 1876(c)(5)(B) and
1860D–4(h) of the Act, the enrollee may
request judicial review of an ALJ’s or
attorney adjudicator’s decision if—
(i) The Council denied the enrollee’s
request for review; and
(ii) The amount in controversy meets
the threshold requirements of
§ 423.2006.
(b) * * *
(1) Any civil action described in
paragraph (a) of this section must be
filed in the District Court of the United
States for the judicial district in which
the enrollee resides.
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15:50 May 06, 2019
Jkt 247001
Petitions for Reconsideration of Action
in Rulemaking Proceeding
[WC Docket No. 10–90; FCC 19–32]
Connect America Fund
Federal Communications
Commission.
Federal Communications
Commission.
ACTION: Petitions for reconsideration.
AGENCY:
Petitions for Reconsideration
(Petitions) have been filed in the
Commission’s rulemaking proceeding
by Michele A. Shuster, on behalf of
Professional Association for Customer
Engagement, and Alexi Maltas, on
behalf of Competitive Carriers
Association, CTIA and USTelecom—
The Broadband Association.
DATES: Oppositions to the Petitions
must be filed on or before May 22, 2019.
Replies to an opposition must be filed
on or before June 3, 2019.
ADDRESSES: Federal Communications
Commission, 445 12th Street SW,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Josh
Zeldis, Consumer Policy Division,
Consumer and Governmental Affairs
Bureau (CGB), at (202) 418–0715, email:
Josh.Zeldis@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s
document, Report No. 3125, released
April 29, 2019. The full text of the
Petitions is available for viewing and
SUMMARY:
AGENCY:
SUMMARY:
PO 00000
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ACTION:
Final rule.
In this document, the Federal
Communications Commission
(Commission) eliminates the rate floor
and, following a one-year period of
monitoring residential retail rates,
eliminates the accompanying reporting
obligations after July 1, 2020.
DATES:
Effective June 6, 2019.
FOR FURTHER INFORMATION CONTACT:
Suzanne Yelen, Wireline Competition
Bureau, (202) 418–7400 or TTY: (202)
418–0484.
This is a
summary of the Commission’s Report
and Order in WC Docket No. 10–90;
FCC 19–32, adopted on April 12, 2019
and released on April 15, 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/FCC19-32A1.pdf.
SUPPLEMENTARY INFORMATION:
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Federal Register / Vol. 84, No. 88 / Tuesday, May 7, 2019 / Rules and Regulations
I. Introduction
1. In 2011, the Commission adopted a
rule aimed at limiting universal service
support received by rural carriers whose
rates are below a set minimum rate. This
requirement is known as the ‘‘rate
floor.’’ If a carrier chooses to charge its
customers less than the rate floor
amount for voice service, the difference
between the amount charged and the
rate floor is deducted from the amount
of support that carrier receives through
the Universal Service Fund (Fund).
Intended to guard against artificial
subsidization of rural end user rates
significantly below the national urban
average, the practical effect of this rule
has been to increase the telephone rates
of rural subscribers, who are often older
Americans on fixed incomes, lowerincome Americans, and individuals
living on Tribal lands. These Americans
are some of those least able to afford the
needless rate increases caused by the
rate floor. In 2017, after several years of
experience with it, the Commission
froze increases in the rate floor for two
years to give us an opportunity to
‘‘revisit it to ensure our policies
continue to further our statutory
obligation to ensure ‘[q]uality services
. . . available at just, reasonable, and
affordable rates.’ ’’
2. After a thorough review of the
record evidence, the Commission now
eliminates the rate floor and, following
a one-year period of monitoring
residential retail rates, eliminates the
accompanying reporting obligations
after July 1, 2020. Doing so ends the de
facto federal mandate to needlessly
increase telephone service rates for
many rural Americans above those
carriers would otherwise assess, and
avoids a further increase from $18 to
$26.98 on July 1, 2019—an increase that
would have reduced the affordability of
telephone service for rural Americans,
including the elderly, low-income
individuals, veterans, and their families.
As a result, the Commission ensures
that rural consumers continue to receive
quality services at just, reasonable, and
affordable rates, while also ensuring that
rural carriers continue to receive the
predictable and sufficient universal
service support needed to serve highcost areas.
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II. Discussion
3. The Commission finds that the rate
floor, which leverages the Commission’s
universal service support to penalize
lower prices for rural Americans who
may least be able to afford such
increases, is not justified as a matter of
policy. To the extent the rate floor ever
served a public purpose, the
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Commission finds that purpose long
since carried out. The Commission
agrees with the diverse coalition
including stakeholders like the AARP,
the National Consumer Law Center, the
National Tribal Telecommunications
Association, and small, medium, and
large rural telephone companies that the
rate floor is inconsistent with the
direction of the Communications Act to
advance universal service while
ensuring that rates are just, reasonable,
and affordable. Accordingly, and based
on an extensive and near-unanimous
record, the Commission eliminates the
rate floor.
4. First, the Commission finds that the
rate floor creates a perverse incentive for
carriers to raise local rates, harming
consumers in rural areas and making
telephone service less affordable. No
one disputes that the rate floor has
increased rates for voice service in rural
areas, despite the Commission’s goal to
‘‘preserve and advance universal
availability of voice service.’’ These
price increases negatively affect rural
consumers and ‘‘could lead to some
customers losing affordable access to
basic service entirely.’’ The Commission
finds the rate floor raises rates for—and
has a particularly deleterious effect on—
older Americans on fixed incomes,
subscribers in Tribal areas, low-income
consumers, and seasonal customers
making traditional voice service less
affordable, often for consumers who
need the service most. Indeed, the
record suggests that low rates often
served ‘‘legitimate purposes [with]
substantial public interest and safety
benefits’’ at stake, for example,
emergency phones, seasonal lines, or
basic service for elderly or low-income
consumers. Low rates for such service
ensure that phone service and access to
911 service is available in the event of
an emergency for customers that may
not be able to afford telephone service
at higher rates. There may be other
reasons that market rates in rural areas
could be below the national average
urban rate. For example, prices may be
higher for local urban rates because
‘‘urban customers have access to much
more populous local calling areas than
rural customers.’’ In addition, local
urban rates are not uniform, so many
urban consumers are paying rates below
the national urban rate average.
5. Second, the Commission finds that
the rate floor places unnecessary
regulatory burdens on state
commissions and rural telephone
companies. For example, rural carriers
must ‘‘expend limited internal resources
to notify customers of impending rate
increases and . . . seek permission from
their state commission for such
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19875
increases.’’ Moreover, a rate floor
requires burdensome proceedings for
rural incumbent LECs and state
commissions related to rate increases
and other compliance measures such as
customer notifications and reporting
obligations. The record reflects that rate
increases caused by the rate floor
burden both carriers and state
commissions ‘‘where rate cases or other
notices or applications are required to
be prepared, filed and litigated,’’ often
on an expedited basis ‘‘where urban rate
survey completion and results are
delayed . . . .’’ In other words, the rate
floor creates needless state and federal
regulatory compliance costs—wasting
resources that could be better put to
improving quality of service and closing
the digital divide.
6. Third, the Commission finds that
the rate floor is a particularly ineffective
means of conserving scarce federal
funds. Unlike other mechanisms to
control expenditures, such as the cost
model for A–CAM carriers (which
targets higher spending to higher-cost
areas and limits spending available in
lower cost areas) or the budget control
mechanism for rate-of-return carriers
(which limits total spending and creates
incentives for carriers to control costs),
the rate floor neither targets spending in
an efficient manner nor creates
incentives for carriers to control costs.
Instead, it simply rewards carriers that
artificially inflate prices, regardless of
whether they invest efficiently or
control their costs. And any purported
savings from the rate floor have
dissipated in recent years with the
advent of the rate-of-return budget
control mechanism—that’s because
savings from the rate floor are
redistributed to other rate-of-return
carriers through increased headroom in
the budget, with no overall savings to
the Fund.
7. Fourth, to the extent that the rate
floor was trying to solve the problem of
‘‘artificially low’’ rates, the Commission
finds that it has outlived its usefulness.
As a preliminary matter, the record does
not support the notion that rates for
voice service are artificially low. But in
any case, as a result of the rate floor, the
monthly recurring rate has risen and is
now $18 in many rural areas, and
‘‘ultra-low voice service rates are
becoming relatively rare.’’ What is more,
these rates are substantially higher than
the Commission expected in 2011. At
the time, the Commission anticipated
that by July 2014 the rate floor would be
‘‘close to the sum of $15.62 plus state
regulated fees’’—or $16.80 in inflation
adjusted terms.
8. Fifth, changes to the Fund’s support
mechanisms for rural carriers since the
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Federal Register / Vol. 84, No. 88 / Tuesday, May 7, 2019 / Rules and Regulations
rate floor’s adoption have largely
eliminated any potential impact rates
would have on the universal service
support mechanisms. For example, the
Commission has imposed concrete
broadband buildout obligations on all
legacy carriers, eliminated the support
disparity between voice-only and
broadband-only lines, and created
incentives for legacy carriers to move
from rate-of-return regulation to
incentive regulation. Each of these
changes reorients the Commission’s
high-cost system from one tied to
carriers’ historic costs and revenues
from telephone services toward one
where funding is tied to the fulfillment
of certain broadband deployment
obligations. And it is accordingly no
surprise that the number of carriers
potentially subject to the rate floor has
rapidly diminished: Of the 940 study
areas that were once potentially subject
to the rate floor, only 654 are still
subject to it.
9. In short, the Commission finds that
the costs of either increased rates or
reduced support (and therefore reduced
deployment) ultimately borne by rural
consumers outweigh any putative
benefits to the Fund. The record in this
proceeding overwhelmingly supports
elimination of the rate floor rule;
commenters agree that the rule imposes
significant costs with little benefit. And
the Commission agrees with one
commenter that, in essence, ‘‘the rate
floor penalizes rural customers without
any real benefit to the overall size of the
fund.’’ Accordingly, the Commission
eliminates the rate floor rule and its
accompanying reporting obligation.
10. The Commission disagrees with
the only commenter that supports
maintaining the rate floor. Although
NCTA argues that eliminating the rate
floor would skew competition and
increase subsidies at the expense of
consumers, the Commission finds the
opposite to be true. Rural carriers
receiving high-cost loop support can
only recover their operating costs and
investments where they face high perline costs of providing service.
Commission rules already require
carriers to use subsidies to offset
demonstrated high costs—not to
subsidize below-market rates. Rather,
the rate floor itself skews competition
by artificially inflating the prices that
certain carriers may charge—requiring a
carrier to charge above-market rates in a
town, for example, for fear of losing its
support in the surrounding countryside.
Without the rate floor, prices in
competitive areas can freely adjust to
competitive levels. And the rate floor is
a double penalty for consumers since
carriers can maintain their subsidies so
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long as they also charge consumers
higher rates.
11. Finally, the Commission
eliminates the reporting obligations
associated with the rate floor after July
1, 2020, thereafter relieving carriers of
the obligation to report residential local
service rates. Although the Commission
does not expect that carriers will begin
charging artificially low rates as a result
of the elimination of the rate floor,
maintaining this reporting obligation for
one year will allow the Commission to
monitor any unexpected and significant
changes in residential local services
rates reported by carriers in their July 1,
2019 and 2020 annual filings.
III. Procedural Matters
A. Paperwork Reduction Act
12. This document eliminates a
reporting requirement and contains no
new information collection
requirements subject to the Paperwork
Reduction Act of 1995 (PRA), Public
Law 104–13. In addition, the
Commission notes that pursuant to the
Small Business Paperwork Relief Act of
2002, Public Law 107–198, see 44 U.S.C.
3506(c)(4), it previously sought specific
comment on how the Commission might
further reduce the information
collection burden for small business
concerns with fewer than 25 employees.
The document, by eliminating a
reporting requirement, reduces any
burdens on small entities.
13. The Commission will send a copy
of this Report and Order to Congress
and the Government Accountability
Office pursuant to the Congressional
Review Act, see 5 U.S.C. 801(a)(1)(A).
14. Regulatory Flexibility Act.—The
Regulatory Flexibility Act of 1980 (RFA)
requires that an agency prepare a
regulatory flexibility analysis for notice
and comment rulemakings, unless the
agency certifies that ‘‘the rule will not,
if promulgated, have a significant
economic impact on a substantial
number of small entities.’’ In the Report
and Order, the Commission is
eliminating a rule and its accompanying
reporting obligation. Accordingly, the
Commission certifies that the rule
changes adopted herein will not have a
significant economic impact on a
substantial number of small entities.
The Commission will send a copy of the
Report and Order in a report to be sent
to Congress and the Government
Accountability Office pursuant to the
Small Business Regulatory Enforcement
Fairness Act of 1996. In addition, the
Commission will send a copy of the
Report and Order to the Chief Counsel
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IV. Ordering Clauses
15. Accordingly, it is ordered,
pursuant to the authority contained in
sections 201, 219, 220 and 254 of the
Communications Act of 1934, as
amended, 47 U.S.C. 201, 219, 220, 254,
this Report and Order is adopted.
16. It is furthered ordered that Part 54,
of the Commission’s rules, 47 CFR parts
54, is amended as set forth in the
following.
17. It is further ordered that the rules
adopted in this document will become
effective 30 days after the date of
publication in the Federal Register.
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.
Marlene Dortch,
Secretary.
Final Rules
For the reasons discussed in the
preamble, the Federal Communications
Commission amends 47 CFR part 54 as
follows:
PART 54—UNIVERSAL SERVICE
B. Congressional Review Act
PO 00000
for Advocacy of the Small Business
Administration. A copy of the Report
and Order (or summaries thereof) will
also be published in the Federal
Register.
1. The authority citation for part 54 is
revised to read as follows:
■
Authority: 47 U.S.C. 151, 154(i), 155, 201,
205, 214, 219, 220, 254, 303(r), 403, and
1302, unless otherwise noted.
2. Amend § 54.313 by revising
paragraph (h) to read as follows:
■
§ 54.313 Annual reporting requirements
for high-cost recipients.
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(h) In their annual reporting due by
July 1, 2019 and July 1, 2020, all
incumbent local exchange carrier
recipients of high-cost support must
report all of their rates for residential
local service for all portions of their
service area, as well as state regulated
fees, to the extent the sum of those rates
and fees are below $18, and the number
of lines for each rate specified. Carriers
shall report lines and rates in effect as
of June 1. For purposes of this
subsection, state regulated fees shall be
limited to state subscriber line charges,
state universal service fees and
mandatory extended area service
charges.
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Federal Register / Vol. 84, No. 88 / Tuesday, May 7, 2019 / Rules and Regulations
§ 54.318
■
[Removed and Reserved].
3. Remove and reserve § 54.318.
[FR Doc. 2019–09241 Filed 5–6–19; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Part 17
Docket No. FWS–HQ–ES–2015–0008;
4500030113]
RIN 1018–BA81
Endangered and Threatened Wildlife
and Plants; Removing Textual
Descriptions of Critical Habitat
Boundaries for Mammals, Birds,
Amphibians, Fishes, Clams, Snails,
Arachnids, Crustaceans, and Insects;
Correction
Fish and Wildlife Service,
Interior.
ACTION: Correcting amendment.
AGENCY:
We, the U.S. Fish and
Wildlife Service, published a final rule
in the Federal Register on April 27,
2018, to remove the textual descriptions
of critical habitat boundaries from those
designations for mammals, birds,
amphibians, fishes, clams, snails,
arachnids, crustaceans, and insects for
which the maps have been determined
to be sufficient to stand as the official
delineation of critical habitat. Where we
determined that the maps were not
sufficient to stand as the official
delineation of critical habitat, we
revised the textual descriptions to
include the following statement: ‘‘The
map provided is for informational
purposes only.’’ Inadvertently, we
removed, rather than revised, a map
note in the critical habitat designation
for the Waccamaw silverside (Menidia
extensa). The map note is necessary to
clarify that the map in that entry is for
informational purposes only. This
document makes the necessary
correction to the critical habitat
designation for the Waccamaw
silverside.
SUMMARY:
This correction is effective May
7, 2019.
FOR FURTHER INFORMATION CONTACT:
Carey Galst, U.S. Fish and Wildlife
Service, MS: ES, 5275 Leesburg Pike,
Falls Church, VA 22041–3803;
telephone 703–358–1954. If you use a
telecommunications device for the deaf
(TDD), call the Federal Relay Service at
800–877–8339.
SUPPLEMENTARY INFORMATION: On May 1,
2012, we published in the Federal
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DATES:
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Register (77 FR 25611) a final rule
revising our regulations related to
publishing textual descriptions of
proposed and final critical habitat
boundaries for codification in the Code
of Federal Regulations (CFR) (2012
rule). Specifically, for critical habitat
designations published after the
effective date of the rule, the map(s), as
clarified or refined by any textual
language within the rule, constitutes the
definition of the boundaries of a critical
habitat. Each critical habitat area is
shown on a map, with more-detailed
information discussed in the preamble
of the rulemaking documents published
in the Federal Register. The map
published in the CFR is generated from
the coordinates and/or plot points
corresponding to the location of the
boundaries. These coordinates and/or
plot points are included in the
administrative record for the
designation and are available to the
public either online or at the Service
field office responsible for the
designation or both. In addition, if the
Service concludes that additional tools
or supporting information are
appropriate and would help the public
understand the official boundary map,
we make the additional tools and
supporting information available on our
internet site and at the Service field
office responsible for the critical habitat
designation.
The preamble to the 2012 rule
explained that, for critical habitat that
had already been designated before the
effective date of that rule, ‘‘we also
intend to remove the textual
descriptions of final critical habitat
boundaries set forth in the CFR in order
to save the annual reprinting cost, but
we must do so in separate rulemakings
to ensure that removing the textual
descriptions does not change the
existing boundaries of those
designations’’ (77 FR 25618). We have
now begun applying this approach by
publishing a series of separate
rulemakings that remove textual
descriptions for any critical habitat
designations promulgated prior to the
effective date of the 2012 final rule if the
maps are sufficient to stand as the
official delineation of the boundaries.
On April 27, 2018, we published the
second such rulemaking—a final rule to
remove the textual descriptions of
critical habitat boundaries from those
designations for mammals, birds,
amphibians, fishes, clams, snails,
arachnids, crustaceans, and insects for
which the maps have been determined
to be sufficient to stand as the official
delineation of critical habitat (83 FR
18698) (2018 rule). That rule, which is
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19877
codified at 50 CFR 17.94(b), set forth the
conditions under which a map
appearing in a critical habitat entry for
any of those species is or is not
considered the definition of the
boundaries of a critical habitat. It did
not alter the locations of any critical
habitat boundaries.
In the 2018 rule, we mistakenly
removed, rather than revised, a map
note in the critical habitat designation
for the Waccamaw silverside at 50 CFR
17.95(e). Under 50 CFR 17.94(b), the
omission of the map note in the critical
habitat designation for the Waccamaw
silverside could mislead readers into
thinking that the map in that entry
stands as the official delineation of
critical habitat, but it does not. Adding
the revised map note to the Waccamaw
silverside designation is necessary to
clarify that the map in that entry is for
informational purposes only. This
document makes the necessary
correction to the critical habitat
designation for the Waccamaw
silverside.
Administrative Procedure
As explained in the 2018 Rule and in
the discussion above, neither the 2018
rule nor this amendment alters the
locations of any critical habitat
boundaries. However, there was an error
in the 2018 Rule that could be perceived
as altering the critical habitat boundary
for the Waccamaw silverside, and this
document is therefore necessary to
correct that error and ensure that there
is no change to that critical habitat
boundary. Under these circumstances,
we have determined, pursuant to 5
U.S.C. 551(4) and 553(b)(3)(B), that prior
notice and opportunity for public
comment are impractical and
unnecessary. Public comment could not
inform this process in any meaningful
way. We have further determined that,
under 5 U.S.C. 553(d)(3), the agency has
good cause to make this correction
effective upon publication, which is to
comply with our regulations as soon as
practicable.
List of Subjects in 50 CFR Part 17
Endangered and threatened species,
Exports, Imports, Reporting and
recordkeeping requirements,
Transportation.
For the reasons given in the preamble,
we amend part 17, subchapter B of
chapter I, title 50 of the Code of Federal
Regulations, with the following
correcting amendment:
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]]>Agencies
[Federal Register Volume 84, Number 88 (Tuesday, May 7, 2019)]
[Rules and Regulations]
[Pages 19874-19877]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09241]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket No. 10-90; FCC 19-32]
Connect America Fund
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) eliminates the rate floor and, following a one-year period
of monitoring residential retail rates, eliminates the accompanying
reporting obligations after July 1, 2020.
DATES: Effective June 6, 2019.
FOR FURTHER INFORMATION CONTACT: Suzanne Yelen, Wireline Competition
Bureau, (202) 418-7400 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order in WC Docket No. 10-90; FCC 19-32, adopted on April 12, 2019
and released on April 15, 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-19-32A1.pdf.
[[Page 19875]]
I. Introduction
1. In 2011, the Commission adopted a rule aimed at limiting
universal service support received by rural carriers whose rates are
below a set minimum rate. This requirement is known as the ``rate
floor.'' If a carrier chooses to charge its customers less than the
rate floor amount for voice service, the difference between the amount
charged and the rate floor is deducted from the amount of support that
carrier receives through the Universal Service Fund (Fund). Intended to
guard against artificial subsidization of rural end user rates
significantly below the national urban average, the practical effect of
this rule has been to increase the telephone rates of rural
subscribers, who are often older Americans on fixed incomes, lower-
income Americans, and individuals living on Tribal lands. These
Americans are some of those least able to afford the needless rate
increases caused by the rate floor. In 2017, after several years of
experience with it, the Commission froze increases in the rate floor
for two years to give us an opportunity to ``revisit it to ensure our
policies continue to further our statutory obligation to ensure
`[q]uality services . . . available at just, reasonable, and affordable
rates.' ''
2. After a thorough review of the record evidence, the Commission
now eliminates the rate floor and, following a one-year period of
monitoring residential retail rates, eliminates the accompanying
reporting obligations after July 1, 2020. Doing so ends the de facto
federal mandate to needlessly increase telephone service rates for many
rural Americans above those carriers would otherwise assess, and avoids
a further increase from $18 to $26.98 on July 1, 2019--an increase that
would have reduced the affordability of telephone service for rural
Americans, including the elderly, low-income individuals, veterans, and
their families. As a result, the Commission ensures that rural
consumers continue to receive quality services at just, reasonable, and
affordable rates, while also ensuring that rural carriers continue to
receive the predictable and sufficient universal service support needed
to serve high-cost areas.
II. Discussion
3. The Commission finds that the rate floor, which leverages the
Commission's universal service support to penalize lower prices for
rural Americans who may least be able to afford such increases, is not
justified as a matter of policy. To the extent the rate floor ever
served a public purpose, the Commission finds that purpose long since
carried out. The Commission agrees with the diverse coalition including
stakeholders like the AARP, the National Consumer Law Center, the
National Tribal Telecommunications Association, and small, medium, and
large rural telephone companies that the rate floor is inconsistent
with the direction of the Communications Act to advance universal
service while ensuring that rates are just, reasonable, and affordable.
Accordingly, and based on an extensive and near-unanimous record, the
Commission eliminates the rate floor.
4. First, the Commission finds that the rate floor creates a
perverse incentive for carriers to raise local rates, harming consumers
in rural areas and making telephone service less affordable. No one
disputes that the rate floor has increased rates for voice service in
rural areas, despite the Commission's goal to ``preserve and advance
universal availability of voice service.'' These price increases
negatively affect rural consumers and ``could lead to some customers
losing affordable access to basic service entirely.'' The Commission
finds the rate floor raises rates for--and has a particularly
deleterious effect on--older Americans on fixed incomes, subscribers in
Tribal areas, low-income consumers, and seasonal customers making
traditional voice service less affordable, often for consumers who need
the service most. Indeed, the record suggests that low rates often
served ``legitimate purposes [with] substantial public interest and
safety benefits'' at stake, for example, emergency phones, seasonal
lines, or basic service for elderly or low-income consumers. Low rates
for such service ensure that phone service and access to 911 service is
available in the event of an emergency for customers that may not be
able to afford telephone service at higher rates. There may be other
reasons that market rates in rural areas could be below the national
average urban rate. For example, prices may be higher for local urban
rates because ``urban customers have access to much more populous local
calling areas than rural customers.'' In addition, local urban rates
are not uniform, so many urban consumers are paying rates below the
national urban rate average.
5. Second, the Commission finds that the rate floor places
unnecessary regulatory burdens on state commissions and rural telephone
companies. For example, rural carriers must ``expend limited internal
resources to notify customers of impending rate increases and . . .
seek permission from their state commission for such increases.''
Moreover, a rate floor requires burdensome proceedings for rural
incumbent LECs and state commissions related to rate increases and
other compliance measures such as customer notifications and reporting
obligations. The record reflects that rate increases caused by the rate
floor burden both carriers and state commissions ``where rate cases or
other notices or applications are required to be prepared, filed and
litigated,'' often on an expedited basis ``where urban rate survey
completion and results are delayed . . . .'' In other words, the rate
floor creates needless state and federal regulatory compliance costs--
wasting resources that could be better put to improving quality of
service and closing the digital divide.
6. Third, the Commission finds that the rate floor is a
particularly ineffective means of conserving scarce federal funds.
Unlike other mechanisms to control expenditures, such as the cost model
for A-CAM carriers (which targets higher spending to higher-cost areas
and limits spending available in lower cost areas) or the budget
control mechanism for rate-of-return carriers (which limits total
spending and creates incentives for carriers to control costs), the
rate floor neither targets spending in an efficient manner nor creates
incentives for carriers to control costs. Instead, it simply rewards
carriers that artificially inflate prices, regardless of whether they
invest efficiently or control their costs. And any purported savings
from the rate floor have dissipated in recent years with the advent of
the rate-of-return budget control mechanism--that's because savings
from the rate floor are redistributed to other rate-of-return carriers
through increased headroom in the budget, with no overall savings to
the Fund.
7. Fourth, to the extent that the rate floor was trying to solve
the problem of ``artificially low'' rates, the Commission finds that it
has outlived its usefulness. As a preliminary matter, the record does
not support the notion that rates for voice service are artificially
low. But in any case, as a result of the rate floor, the monthly
recurring rate has risen and is now $18 in many rural areas, and
``ultra-low voice service rates are becoming relatively rare.'' What is
more, these rates are substantially higher than the Commission expected
in 2011. At the time, the Commission anticipated that by July 2014 the
rate floor would be ``close to the sum of $15.62 plus state regulated
fees''--or $16.80 in inflation adjusted terms.
8. Fifth, changes to the Fund's support mechanisms for rural
carriers since the
[[Page 19876]]
rate floor's adoption have largely eliminated any potential impact
rates would have on the universal service support mechanisms. For
example, the Commission has imposed concrete broadband buildout
obligations on all legacy carriers, eliminated the support disparity
between voice-only and broadband-only lines, and created incentives for
legacy carriers to move from rate-of-return regulation to incentive
regulation. Each of these changes reorients the Commission's high-cost
system from one tied to carriers' historic costs and revenues from
telephone services toward one where funding is tied to the fulfillment
of certain broadband deployment obligations. And it is accordingly no
surprise that the number of carriers potentially subject to the rate
floor has rapidly diminished: Of the 940 study areas that were once
potentially subject to the rate floor, only 654 are still subject to
it.
9. In short, the Commission finds that the costs of either
increased rates or reduced support (and therefore reduced deployment)
ultimately borne by rural consumers outweigh any putative benefits to
the Fund. The record in this proceeding overwhelmingly supports
elimination of the rate floor rule; commenters agree that the rule
imposes significant costs with little benefit. And the Commission
agrees with one commenter that, in essence, ``the rate floor penalizes
rural customers without any real benefit to the overall size of the
fund.'' Accordingly, the Commission eliminates the rate floor rule and
its accompanying reporting obligation.
10. The Commission disagrees with the only commenter that supports
maintaining the rate floor. Although NCTA argues that eliminating the
rate floor would skew competition and increase subsidies at the expense
of consumers, the Commission finds the opposite to be true. Rural
carriers receiving high-cost loop support can only recover their
operating costs and investments where they face high per-line costs of
providing service. Commission rules already require carriers to use
subsidies to offset demonstrated high costs--not to subsidize below-
market rates. Rather, the rate floor itself skews competition by
artificially inflating the prices that certain carriers may charge--
requiring a carrier to charge above-market rates in a town, for
example, for fear of losing its support in the surrounding countryside.
Without the rate floor, prices in competitive areas can freely adjust
to competitive levels. And the rate floor is a double penalty for
consumers since carriers can maintain their subsidies so long as they
also charge consumers higher rates.
11. Finally, the Commission eliminates the reporting obligations
associated with the rate floor after July 1, 2020, thereafter relieving
carriers of the obligation to report residential local service rates.
Although the Commission does not expect that carriers will begin
charging artificially low rates as a result of the elimination of the
rate floor, maintaining this reporting obligation for one year will
allow the Commission to monitor any unexpected and significant changes
in residential local services rates reported by carriers in their July
1, 2019 and 2020 annual filings.
III. Procedural Matters
A. Paperwork Reduction Act
12. This document eliminates a reporting requirement and contains
no new information collection requirements subject to the Paperwork
Reduction Act of 1995 (PRA), Public Law 104-13. In addition, the
Commission notes that pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), it
previously sought specific comment on how the Commission might further
reduce the information collection burden for small business concerns
with fewer than 25 employees. The document, by eliminating a reporting
requirement, reduces any burdens on small entities.
B. Congressional Review Act
13. The Commission will send a copy of this Report and Order to
Congress and the Government Accountability Office pursuant to the
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
14. Regulatory Flexibility Act.--The Regulatory Flexibility Act of
1980 (RFA) requires that an agency prepare a regulatory flexibility
analysis for notice and comment rulemakings, unless the agency
certifies that ``the rule will not, if promulgated, have a significant
economic impact on a substantial number of small entities.'' In the
Report and Order, the Commission is eliminating a rule and its
accompanying reporting obligation. Accordingly, the Commission
certifies that the rule changes adopted herein will not have a
significant economic impact on a substantial number of small entities.
The Commission will send a copy of the Report and Order in a report to
be sent to Congress and the Government Accountability Office pursuant
to the Small Business Regulatory Enforcement Fairness Act of 1996. In
addition, the Commission will send a copy of the Report and Order to
the Chief Counsel for Advocacy of the Small Business Administration. A
copy of the Report and Order (or summaries thereof) will also be
published in the Federal Register.
IV. Ordering Clauses
15. Accordingly, it is ordered, pursuant to the authority contained
in sections 201, 219, 220 and 254 of the Communications Act of 1934, as
amended, 47 U.S.C. 201, 219, 220, 254, this Report and Order is
adopted.
16. It is furthered ordered that Part 54, of the Commission's
rules, 47 CFR parts 54, is amended as set forth in the following.
17. It is further ordered that the rules adopted in this document
will become effective 30 days after the date of publication in the
Federal Register.
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.
Marlene Dortch,
Secretary.
Final Rules
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 54 as follows:
PART 54--UNIVERSAL SERVICE
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1. The authority citation for part 54 is revised to read as follows:
Authority: 47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220,
254, 303(r), 403, and 1302, unless otherwise noted.
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2. Amend Sec. 54.313 by revising paragraph (h) to read as follows:
Sec. 54.313 Annual reporting requirements for high-cost recipients.
* * * * *
(h) In their annual reporting due by July 1, 2019 and July 1, 2020,
all incumbent local exchange carrier recipients of high-cost support
must report all of their rates for residential local service for all
portions of their service area, as well as state regulated fees, to the
extent the sum of those rates and fees are below $18, and the number of
lines for each rate specified. Carriers shall report lines and rates in
effect as of June 1. For purposes of this subsection, state regulated
fees shall be limited to state subscriber line charges, state universal
service fees and mandatory extended area service charges.
* * * * *
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Sec. 54.318 [Removed and Reserved].
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3. Remove and reserve Sec. 54.318.
[FR Doc. 2019-09241 Filed 5-6-19; 8:45 am]
BILLING CODE 6712-01-P
