Establishing a 5G Fund for Rural America, 31616-31661 [2020-09620]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 85, Number 101 (Tuesday, May 26, 2020)]
[Proposed Rules]
[Pages 31616-31661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09620]



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Vol. 85

Tuesday,

No. 101

May 26, 2020

Part II





 Federal Communications Commission





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47 CFR Parts 1 and 54





 Establishing a 5G Fund for Rural America; Proposed Rule

Federal Register / Vol. 85, No. 101 / Tuesday, May 26, 2020 / 
Proposed Rules

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 54

[GN Docket No. 20-32; FCC 20-52; FRS 16709]


Establishing a 5G Fund for Rural America

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission or FCC) proposes to retarget universal service funding for 
mobile broadband and voice in the high-cost program to support the 
deployment of 5G services by establishing the 5G Fund for rural America 
and seeks comment on the appropriate framework for implementing the 5G 
Fund.

DATES: Comments are due on or before June 25, 2020; reply comments are 
due on or before July 27, 2020.

ADDRESSES: 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 identified by GN Docket No. 20-32 on or before the dates 
indicated on the first page of this document. 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 Commission's Electronic Comment 
Filing System (ECFS) https://www.fcc.gov/ecfs/. Except when the filer 
requests that materials be withheld from public inspection, any 
document may be submitted electronically through the Commission's ECFS. 
Persons that need to submit confidential filings to the Commission 
should follow the instructions provided in the Commission's March 31, 
2020 public notice, DA 20-361, regarding the procedures for submission 
of confidential materials.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. Filings can be sent 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.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Dr., 
Annapolis Junction, MD 20701.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th St. SW, Washington, DC 20554.
     Effective March 19, 2020, and until further 
notice, the Commission no longer accepts any hand or messenger 
delivered filings. This is a temporary measure taken to help protect 
the health and safety of individuals, and to mitigate the transmission 
of COVID-19. See FCC Announces Closure of FCC Headquarters Open Window 
and Change in Hand-Delivery Policy, Public Notice, DA 20-304 (March 19, 
2020). https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy.
     During the time the Commission's building is closed to the 
general public and until further notice, if more than one docket or 
rulemaking number appears in the caption of a proceeding, paper filers 
need not submit two additional copies for each additional docket or 
rulemaking number; an original and one copy are sufficient.
     People With Disabilities: To request materials in 
accessible formats for people with disabilities (braille, large print, 
electronic files, audio format) send an email to [email protected] or call 
the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), 
(202) 418-0432 (tty).

FOR FURTHER INFORMATION CONTACT: Kelly A. Quinn, Office of Economics 
and Analytics, (202) 418-0660.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM) in GN Docket No. 20-32, FCC 20-52, 
adopted on April 23, 2020 and released on April 24, 2020. The full text 
of this document is available for public inspection during regular 
business hours in the FCC Reference Information Center, Room CY-A257, 
445 12th Street SW, Washington, DC 20554, except when Commission 
Headquarters is otherwise closed to visitors. See Public Notice, 
Restrictions on Visitors to FCC Facilities, that appeared on the 
Commission website March 12, 2020, or by using the search function on 
the Commission's ECFS web page at https://www.fcc.gov/ecfs/. It is also 
available on the Commission's website at https://www.fcc.gov/document/fcc-proposes-5g-fund-rural-america-0. The Order that was adopted 
concurrently with this NPRM will be published elsewhere in the Federal 
Register.

Synopsis

I. Introduction

    1. 5G mobile wireless networks promise to be the next leap in 
broadband technology, offering significantly increased speeds, reduced 
latency, and better security than 4G LTE networks can offer. 5G mobile 
wireless broadband service is expected to create as many as three 
million new jobs, generate $275 billion in private investment, and add 
$500 billion in new economic growth. The Commission anticipates that 
the progression to 5G service will be swift. Since late 2018, major 
U.S. mobile wireless carriers have lit up 5G networks covering more 
than 200 million Americans in aggregate. And, as part of its recently 
approved transaction, T-Mobile has committed to deploying 5G service to 
99 percent of Americans within six years, including covering 90 percent 
of those living in rural America within that timeframe. The Commission 
is concerned, however, that even with these significant deployment 
commitments, some rural areas will remain where there is insufficient 
financial incentive for mobile wireless carriers to invest in 5G-
capable networks, and those communities could be excluded from the 
technological and economic benefits of 5G for years to come. During 
this transition to 5G service, the Commission therefore reaffirms its 
commitment to using Universal Service Fund support to close the digital 
divide and to make sure that parts of rural America are not left 
behind.
    2. Given the concerns many stakeholders raised about the accuracy 
of Mobility Fund Phase II 4G LTE coverage data, many of which were 
validated during Commission staff's investigation into carriers' maps, 
and in light of the changes taking place in the marketplace, it no 
longer makes sense to use limited universal service support to deploy 
4G LTE networks. Rather, to ensure that all Americans enjoy the 
benefits of the most modern, advanced communications technologies 
offered in the marketplace no matter where they live, and to maintain 
American leadership in 5G, the Commission proposes to establish a 5G 
Fund for Rural America, which would use multi-round reverse auctions to 
distribute up to $9 billion, in two phases, over the next decade and 
beyond to bring voice and 5G broadband service to rural areas of the 
country that are unlikely to see unsubsidized deployment of 5G-capable 
networks. Phase I of the 5G Fund would target at least $8 billion of 
support to rural areas of the country that would be unlikely to see 
timely deployment of voice and 5G broadband service absent high-cost 
support or as part of T-Mobile's transaction-related commitments. To 
balance the

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Commission's policy goal of efficiently redirecting high-cost support 
to the areas where it is most needed with the Commission's obligation 
to ensure that it has an accurate understanding of the extent of 
nationwide mobile wireless broadband deployment, the Commission seeks 
comment on two options for identifying areas that would be eligible for 
5G Fund support.
    3. One approach for Phase I could take immediate action to define 
eligible areas based on current data sources that identify areas as 
particularly rural, and thus in the greatest need of universal service 
support. In recognition of the particular challenges of ensuring that 
voice and 5G broadband service are deployed to areas that lack any 
mobile broadband service, the Commission would prioritize areas that 
have historically lacked 4G LTE, or even 3G, service. This would ensure 
that the Commission could move quickly to target universal service 
support to those areas least likely to receive service without support, 
such as those with sparse populations, rugged terrain, or other 
factors. Under this approach, the Commission anticipates commencing the 
5G Fund Phase I auction in 2021.
    4. Alternatively, the Commission could delay the 5G Fund Phase I 
auction until after it collects and processes improved mobile broadband 
coverage data through the Commission's Digital Opportunity Data 
Collection proceeding. Collecting these data would allow the Commission 
to identify with greater precision those areas of the country that 
remain unserved by 4G LTE service. While this option would likely 
result in a less expansive and a more targeted list of eligible areas 
and help ensure prioritization of areas that currently lack service, it 
would potentially delay the start of the 5G Fund Phase I auction and 
deployment of 5G-capable networks in those areas.
    5. Phase II of the 5G Fund would follow the completion of Phase I 
and would target universal service support to bring wireless 
connectivity to harder to serve and higher cost areas, such as farms 
and ranches, and make at least $1 billion available specifically aimed 
at deployments that would facilitate precision agriculture. By 
proposing to rely on a two-phased approach, as the Commission did with 
the Connect America Fund and adopted in the Rural Digital Opportunity 
Fund Report and Order, 85 FR 13773 (Mar. 10, 2020), for the Rural 
Digital Opportunity Fund, the Commission can commence a 5G Fund Phase I 
auction while also ensuring that Phase II would cover harder-to-serve 
areas so that such areas are not left behind. Moreover, the proposal to 
implement this two-phased approach would allow the Commission to build 
upon future recommendations from the its Task Force for Reviewing the 
Connectivity and Technology Needs of Precision Agriculture in the 
United States (Precision Agriculture Task Force) to more accurately 
target Phase II support towards services that will meet the growing 
needs of America's farms and ranches.
    6. Full participation in today's society requires that all American 
consumers, not just those living in urban areas, have access to the 
most current and advanced technologies and services available in the 
marketplace. By supporting the build out of 5G mobile broadband 
networks in areas that likely would otherwise go unserved, the 
Commission can help Americans living, working, and travelling in rural 
communities gain access to communication options on par with those 
offered in urban areas.
    7. The Commission's universal service obligations demand that it 
keep pace with changes in the communications marketplace. Similarly, 
the Commission's policy goal must be to use its limited Universal 
Service Fund dollars in rural America to support the deployment of 
service using the most current and advanced technology available 
consistent with what is being offered to urban consumers. The 
Commission's proposals for the 5G Fund recognize that market realities 
have changed since the Commission adopted Mobility Fund Phase II, and 
that supporting the provision of 4G LTE service in unserved and 
underserved areas will not allow the Commission to accomplish this 
goal. By proposing to replace the planned Mobility Fund II with the 5G 
Fund, the Commission seeks to direct universal service funds to support 
networks that are more responsive, more secure, and up to 100 times 
faster than today's 4G LTE networks. The Commission reaffirms its 
commitment to fiscal responsibility and propose concrete performance 
requirements and public interest obligations to ensure that rural 
consumers would be adequately served by the mobile wireless carriers 
receiving universal service support from the 5G Fund. We also propose 
to amend our generally applicable competitive bidding rules for 
universal service support and to codify recent guidance regarding 
letters of credit for universal service competitive bidding mechanisms.

II. Background

    8. In 2011, as part of its comprehensive reform of the universal 
service and intercarrier compensation programs, the Commission froze 
high-cost support and established the Mobility Fund to ensure that 
universal service support for mobile services would be targeted in a 
cost effective manner. The Mobility Fund included two phases. Phase I 
allocated one-time support for mobile carriers to provide 3G or better 
service to eligible areas, including on Tribal lands. To minimize 
shocks to carriers that might result in service disruptions for 
consumers, the USF/ICC Transformation Order and Further Notice, 76 FR 
73830, Nov. 29, 2011, 76 FR 78384, Dec. 16, 2011, provided for a five-
year transition period during which mobile wireless competitive 
eligible telecommunications carriers receiving frozen high-cost support 
would continue to receive support subject to a phase down reduction of 
20 percent per year beginning July 1, 2012. The Commission noted that, 
during the transition period, mobile wireless carriers, including those 
receiving legacy support, would have the opportunity to seek one-time 
support under Mobility Fund Phase I to expand 3G or better service to 
areas where such service was unavailable while also receiving phase-
down legacy support.
    9. The Commission also provided that if Mobility Fund Phase II were 
not operational by July 1, 2014, the phase down of frozen high-cost 
support for legacy support recipients would pause at the 60 percent 
level in effect on that date. The Commission concluded that the phase-
down of legacy support for legacy support recipients serving Tribal 
lands would also pause at that time. The Commission also indicated that 
any pause in the support phase-down would be accompanied by additional 
mobile broadband public interest obligations.
    10. For Mobility Fund Phase I, the Commission provided up to $300 
million, along with an additional $50 million for Tribal Mobility Fund 
Phase I, in one-time support payments awarded through two reverse 
auctions. For Mobility Fund Phase II, the Commission proposed to 
provide ongoing support--including support for Tribal lands--for a 
period of 10 years and sought comment in the USF/ICC Transformation 
Order and Further Notice on the structure and operation of that fund. 
Subsequently, the Wireline Competition Bureau and the Wireless 
Telecommunications Bureau issued a Public Notice seeking additional 
public input on certain issues relating to Mobility Fund Phase II. The 
Wireline Competition Bureau and the Wireless Telecommunications Bureau 
sought to build upon their experience in implementing reverse auctions 
to

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distribute universal service support and the experiences of mobile 
wireless carriers that participated in Mobility Fund Phase I, and 
sought comment for Mobility Fund Phase II on issues pertaining to the 
method for identifying areas eligible for support and establishing the 
geographic unit for bidding and measuring coverage, performance 
obligations, and the term of support. Given that mobile wireless 
carriers had already begun commercial deployment of 4G LTE in many 
parts of the country, the Commission proposed in April 2014 to refocus 
Mobility Fund Phase II to target those areas of the country where it 
was unlikely that 4G LTE service would be made available absent 
support, and those areas where existing mobile voice and broadband 
service would not be preserved without support.
    11. In September 2016, the Wireless Telecommunications Bureau 
released its analysis of mobile wireless carriers' December 2015 FCC 
Form 477 submissions to identify the areas in the country that might 
require support on an ongoing basis in order to ensure adequate 4G LTE 
coverage. In addition to identifying the specific areas of the country 
that were lacking 4G LTE coverage, staff examined the distribution of 
high-cost support to assess the efficacy of that support to determine 
where existing mobile voice and broadband service would require 
continued support. That analysis revealed that as much as 75 percent of 
legacy high-cost support was being distributed to carriers in areas 
where it may not be needed because 4G LTE service was already being 
provided by an unsubsidized carrier. Furthermore, according to the data 
staff reviewed, only approximately 20 percent of the area of the United 
States (excluding Alaska) either lacked 4G LTE service entirely or had 
4G LTE service provided only by a subsidized carrier. In other words, 
mobile wireless carriers were receiving approximately $300 million or 
more each year in subsidies to provide service even though those 
subsidies were unnecessary to ensure the availability of 4G LTE service 
in those areas.
    12. In its 2017 Mobility Fund Phase II Report and Order, 82 FR 
15422, Mar. 28, 2017, the Commission adopted rules to move forward with 
the Mobility Fund Phase II auction to allocate up to $4.53 billion over 
10 years to support the deployment of 4G LTE service to areas that were 
too costly for the private sector to serve without support and to 
preserve such service where it might not otherwise exist absent 
subsidies. In the subsequent Mobility Fund Phase II Challenge Process 
Order, 82 FR 42473, Sept. 8, 2017, the Commission established the 
framework for a challenge process aimed at resolving disputes about 
areas found to be presumptively ineligible for Mobility Fund Phase II 
support. Mobile wireless carriers were required to submit 4G LTE 
coverage maps by January 4, 2018, to be followed by a process in which 
parties could challenge the submitted coverage maps.
    13. Based on evidence submitted into the record that called into 
question the accuracy of the submitted coverage map of at least one 
nationwide provider, shortly after the close of the Mobility Fund Phase 
II challenge process submission window, Commission staff conducted a 
preliminary review of the speed test data that had been submitted to 
the Commission. The staff review of challenger data, in combination 
with the record evidence focusing on specific areas in which coverage 
appeared to be overstated, suggested among other things that some 
carriers' coverage data reported to the Commission did not accurately 
reflect consumer experience in those areas. Based upon this review and 
the carriers' responses to staff inquiries, in December of 2018 the 
Commission launched a formal investigation of the Mobility Fund Phase 
II 4G LTE coverage data submitted by certain carriers. In announcing 
the start of the investigation into potential violations of the data 
collection rules, the Commission suspended the response phase of the 
Mobility Fund Phase II challenge process pending conclusion of the 
investigation. The staff investigation involved collecting additional 
information from certain carriers regarding their generation of 
coverage data, conducting independent drive test data to verify the 
challenger data, and analyzing specific allegations made in the record 
to evaluate the accuracy of the submitted coverage maps.
    14. On December 4, 2019, the Rural Broadband Auctions Task Force 
released a report on the results of that investigation. Over the course 
of the investigation, Commission field agents drove nearly 10,000 miles 
and conducted more than 24,000 speed tests on the mobile networks of 
Verizon, U.S. Cellular, and T-Mobile across six test routes in 12 
states where evidence in the record indicated coverage maps were 
overstated. Staff discovered that the Mobility Fund Phase II coverage 
maps submitted by these carriers likely overstated actual coverage and 
did not reflect on-the-ground performance in many instances, with only 
62 percent of the field agent drive tests achieving the 5 Mbps minimum 
download speed predicted by the maps. In addition to making specific 
recommendations to improve the accuracy of coverage maps in the future, 
the staff report recommended that the Commission terminate the 
challenge process, concluding that the coverage maps were not a 
sufficiently reliable or accurate basis upon which to complete the 
challenge process as designed.
    15. On October 16, 2019, the Commission approved a transaction 
between T-Mobile and Sprint, wherein the parties made certain binding 
commitments as a condition of approval, including substantial 
nationwide and rural deployment of 5G service within six years of the 
merger closing date. Specifically, T-Mobile committed to deploying 5G 
service covering 85 percent of the population in rural areas and 97 
percent of all Americans within three years after closing, with 
coverage rising to 90 percent of the population in rural areas and 99 
percent nationwide within six years. Moreover, the parties committed 
that their deployed 5G service will meet minimum download speed 
performance benchmarks of at least 50 Mbps available to 90 percent of 
the rural population, with two-thirds of rural Americans able to 
receive download speeds of at least 100 Mbps. T-Mobile announced in 
December 2019 that it had switched on its 5G network across the nation 
using low-band spectrum. The other nationwide carriers similarly have 
begun to deploy 5G service in select cities, with widely-available 5G 
service expected in the near future.

III. Discussion

    16. The Commission proposes to retarget universal service funding 
for mobile broadband and voice in the high-cost program to support the 
deployment of 5G services by establishing the 5G Fund for Rural 
America. The Commission believes that supporting the deployment of 5G 
networks is necessary to ensure that rural America can secure the 
economic and technological benefits that come from wireless innovation. 
That is, the Commission's commitment to closing the digital divide 
compels it to ensure that the same services are available in rural 
America as in urban areas. The rapid pace of deployment of 5G networks 
in many parts of the country, combined with T-Mobile's commitment to 
cover 90 percent of rural Americans with its 5G network, suggests that 
it is no longer the time to begin a 10-year support program to deploy 
4G LTE networks. Consequently, the 5G Fund would replace Mobility Fund 
Phase II,

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which would have provided federal support for 4G LTE service in 
unserved areas, as the means by which the Commission completes the 
reform of mobile legacy high-cost support. The Commission seeks comment 
on this proposal.
    17. 5G networks are expected to greatly enhance mobile broadband 
performance by increasing wireless speeds and reducing latency, as well 
as enabling transformative new services such as smart grids, Internet 
of Things, Virtual/Augmented Reality, and a host of other applications 
with the potential to reshape many facets of American life, that will 
all need robust wireless connectivity. Specifically, through 5G 
deployment, applications that are particularly useful in rural areas, 
such as connectivity for remote education and telemedicine, will help 
the Commission to close the digital divide. Rural farmland in 
particular has unique connectivity needs, including the proliferation 
of devices with high data needs, and 5G networks are crucial to 
unlocking the potential of precision agriculture for the American 
farmers and ranchers that feed the world by improving productivity and 
reducing costs. Thus far, the deployment of 5G service has been 
primarily concentrated in more urban areas with larger population 
bases.
    18. Nor does the Commission believe that supporting the deployment 
of 4G LTE service would be adequate for rural communities to fully 
participate in the modern connected economy, given the increased data 
speeds, security, and responsiveness of 5G services. While there remain 
areas of the country that lack even 4G LTE service, the need for 5G 
networks will only increase in the future: By one estimate, 5G 
connections in North America will exceed 4G LTE connections by 2025. 
Further, consumers are using more and more data, on average, and this 
is expected to continue to grow significantly. Targeting support to 
those areas that would otherwise be unlikely to see deployment of 5G 
service would therefore help ensure that the Commission is using its 
limited universal service funds to narrow the digital divide.
    19. More specifically, the Commission proposes that the universal 
service support offered through the 5G Fund should be used to support 
rural-area mobile high-speed 5G networks that meet at least the 5G-NR 
(New Radio) technology standards developed by the 3rd Generation 
Partnership Project (3GPP) with Release 15 (or any successor release 
that may be adopted by the Office of Economics and Analytics and the 
Wireline Competition Bureau after notice and comment). Since 5G 
networks and the associated handset ecosystem have developed at a 
greater pace than many had predicted, if the Commission were to 
continue supporting older technologies, it would risk providing 
subsidies to support outmoded network technologies that may be limited 
in their ability to provide the same level of connectivity, and the 
associated economic benefits, that 5G would likely provide. It is 
crucial that the whole of America experiences the benefits of 5G, and 
not just those living in the more urban areas of the country. The 
Commission seeks comment on this proposal. Should any commenter propose 
an alternative release, the Commission seeks comment on the costs and 
benefits of the 5G Fund supporting such an alternative.

A. Two Approaches to a 5G Fund for Rural America

    20. The Commission's policy goals for the 5G Fund are premised on 
its conclusion that universal service funding for the advancement of 
high-speed robust mobile services to support 5G technology in rural 
areas is an appropriate and necessary use of universal service funds. 
The Commission bases its proposal to implement the 5G Fund on a 
determination that it should target universal service funding to 
support the deployment of the highest level of mobile service widely 
available today--5G. In proposing the implementation of the 5G Fund, 
the Commission reiterates its commitment to minimizing the overall 
burden of universal service contributions on consumers and businesses 
by expending the finite funds available in the most efficient and cost 
effective manner.
    21. The Commission therefore seeks comment on two proposed options 
for the 5G Fund in order to achieve its policy goals and ensure that 
reform of mobile high-cost support helps to close the digital divide. 
On the one hand, the Commission could proceed most quickly to the 5G 
Fund Phase I auction by identifying those areas that would be eligible 
for support based primarily on the degree of rurality of each area, and 
then prioritize support in areas that have historically lacked 3G and 
4G LTE services in order to ensure that all Americans are served by 5G 
networks quickly. The Commission anticipates commencing the Phase I 
auction as early as next year if it pursues this course. On the other 
hand, the Commission could take an alternative tack in which it would 
wait to identify areas eligible for support until it develops improved 
mobile coverage data through the Digital Opportunity Data Collection 
proceeding, but potentially at the cost of delaying the 5G Fund Phase I 
auction and the Commission's reform of the legacy high-cost support 
program.
    22. These two options reflect a fundamental challenge in balancing 
competing concerns. On the one hand, the Commission recognizes the 
pressing need for universal service support in rural areas that are 
sparsely populated, costly to serve, and have historically lacked 
adequate mobile service, and seeks to ensure that those areas do not 
fall further behind. The Commission notes that under the legacy high-
cost support program, in 12 states and territories--including Indiana, 
Ohio, Pennsylvania, and Vermont--mobile carriers receive no high-cost 
support despite such states having extensive rural and/or mountainous 
areas that are likely to lack adequate mobile service. In an additional 
seven states and territories--California, Georgia, New Hampshire, South 
Dakota, Tennessee, Utah, and the Commonwealth of Northern Mariana 
Islands--mobile carriers statewide received less that $1 million per 
year, or less than one-quarter of 1 percent of legacy high-cost support 
disbursements, despite all having extensive rural, mountainous, or 
otherwise hard-to-serve areas. On the other hand, the accuracy of the 
mobile broadband coverage data that carriers submit to the Commission 
has been called into question, and the Commission acknowledges the 
pressing need to reform its mobile coverage data collection to 
understand more precisely where mobile coverage is truly lacking. 
Addressing the problems with mobile coverage data would allow the 
Commission to better target areas in need of support but would delay 
the disbursement of support to many of those same areas.
    23. Binding commitments made by T-Mobile to deploy 5G service to 90 
percent of rural Americans (and 99 percent of the population 
nationwide) within six years will result in extensive 5G coverage 
across many rural and hard-to-serve areas of the nation, and will 
inform the Commission's analysis in several respects. First, these 
commitments are measured by population covered rather than a defined 
geographic area. While the Commission expects that these commitments 
will result in deployment of 5G service to many areas including areas 
that may lack 4G LTE service today, based on staff analysis, they could 
still leave up to approximately 81 percent of the rural land area of 
the United States uncovered. Second, the Commission believes it would 
be

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inappropriate to allow the use of high-cost support to fulfill merger 
conditions, and therefore expect that the support awarded via the 5G 
Fund would be used to deploy 5G service to areas other than where T-
Mobile will deploy. Third, if the Commission does not adequately 
account for T-Mobile's commitments, the Commission risks using finite 
universal service 5G Fund support to overbuild areas where T-Mobile 
already has an enforceable obligation to deploy. The Commission seeks 
comment on these proposals and assumptions, including the costs and 
benefits of either option.
1. Option A: Funding 5G in Rural America in 2021
    24. To implement the Commission's goal of redirecting high-cost 
support to those areas where voice and 5G broadband service would not 
otherwise be deployed absent support, the Commission's proposal under 
Option A would be to determine eligibility for 5G Fund Phase I support 
based on existing data sources. This would enable the Commission to 
move quickly to authorize funding to areas not likely to receive voice 
and 5G broadband services. As the deployment of 5G service has 
primarily been focused on urban environments to date, the Commission 
expects the degree of rurality of an area can provide a reasonable 
estimate of the areas where 5G is unlikely to be deployed absent 
federal support. This approach would obviate the need to collect and 
process new mobile broadband coverage data from carriers and allow for 
a more rapid disbursement of support to unserved rural areas. The 
Commission anticipates that under Option A, it would commence the 5G 
Fund Phase I auction in 2021.
    25. Eligible Areas. Under this approach, the Commission proposes to 
make all areas of the country meeting a certain definition of ``rural'' 
eligible for 5G Fund support. To identify such areas, the Commission 
proposes to include any census tract that is part of U.S. Department of 
Agriculture's Rural-Urban Commuting Area Codes (RUCA) 5-10, except any 
census blocks within those areas that are urban or water-only. Under 
this definition, approximately 67 percent of the country's land area 
would be eligible for support.
    26. More specifically, the Commission proposes to distinguish 
between rural and urban areas based on the most recent decennial U.S. 
Census Bureau definition of such areas, and proposes to exclude all 
urban geographic areas. This definition of rural is how such areas were 
defined for purposes of the T-Mobile-Sprint transaction. The Commission 
seeks comment on this proposal. In the U.S. Census Bureau data, 
Urbanized Areas are defined as areas that contain 50,000 or more 
people, while Urban Clusters are defined as areas that have a 
population of at least 2,500 people and less than 50,000 people. The 
Urban-Rural Classification identifies 486 Urbanized Areas and 3,087 
Urban Clusters nationwide. Collectively, these urban areas include 
approximately 81 percent of the population and approximately 3 percent 
of the land area. The Commission believes both of these areas are 
likely to receive robust 5G service absent a subsidy. The Commission 
seeks comment on this view and on other ways of ensuring that urban or 
other areas already receiving or poised to receive robust 5G service 
without subsidy are excluded from eligibility. Urban Areas and Urban 
Clusters are defined at the census block level, and the Commission 
proposes to consider as rural any census block that is not classified 
within an Urban Area or Urban Cluster to help inform the Commission's 
determination of eligible areas. Water-only blocks are excluded from 
the Commission's analysis, and the Commission has proposed to exclude 
Alaska, Puerto Rico and the U.S. Virgin Islands from 5G Fund support. 
The Commission will include, however, the entirety of American Samoa, 
Guam, and the Northern Mariana Islands as eligible. The Commission also 
seeks comment on whether it would be appropriate to exclude from 
eligibility urban areas that fall within Tribal lands.
    27. This definition of rural, while useful as a starting point, is 
overly broad for determining eligibility for 5G Fund support in and of 
itself. If the Commission were to rely solely on this classification, 
approximately 97 percent of the land area of the U.S. would be eligible 
for 5G Fund support. The Commission therefore proposes to refine this 
set of eligible areas through a ``degree of rurality'' to better target 
funding to where it is needed most.
    28. The Commission proposes basing the degree of rurality of any 
given area on the U.S. Department of Agriculture's Rural-Urban 
Commuting Area (RUCA) Codes that employ the most recent decennial 
census data (2010) and the 2006-10 American Community Survey, and to 
categorize census tracts based on population density, urbanization, and 
daily commuting patterns. The primary RUCA codes (1-10) ``delineate 
metropolitan, micropolitan, small town, and rural commuting areas based 
on the size and direction of the primary (largest) commuting flows.'' 
In addition, the secondary RUCA codes identify other connections among 
rural and urban places based on the size and direction of the 
secondary, or second largest, commuting flow.
    29. The Commission expects that the RUCA codes would be able to 
distinguish those areas of the country that are less likely to receive 
5G service absent subsidies, and note that RUCAs are census-tract 
based, consistent with the geographic areas the Commission proposes to 
use below as the minimum geographic area for bidding in the auction. 
The Commission seeks comment on the costs and benefits associated with 
the use of RUCAs to help determine eligibility. Does the fact that 
RUCAs are based on decennial census data affect their usefulness in 
determining eligibility for support? Which codes should the Commission 
use to classify areas as rural for the purposes of the 5G Fund and why? 
Given the urban-rural delineation described above, the Commission 
proposes to make eligible for support only those areas contained within 
RUCA codes 5 through 10, where code 5 is defined as micropolitan high 
commuting: primary flow 30 percent or more to a large Urban Cluster, 
and code 10 is defined as rural areas: primary flow to a tract outside 
an Urban Area or Urban Cluster. If the Commission were to use RUCA 
codes 5 through 10 to identify eligible areas, approximately 67 percent 
of the land area of the United States (excluding Alaska, Puerto Rico 
and the U.S. Virgin Islands) would be eligible for 5G Fund support. 
Alternatively, should the Commission be more or less expansive in its 
approach, and if so, how?
    30. Are there alternative available datasets, such as the Office of 
Management and Budget's county-based Core-Based Statistical Areas, the 
U.S. Department of Agriculture's Rural-Urban Continuum Codes, the U.S. 
Department of Agriculture-Economic Research Service's Frontier and 
Remote Area Codes, the U.S. Department of Agriculture-Economic Research 
Service's land use dataset, or others, that the Commission should 
consider in determining eligible areas? Commenters supporting 
alternative datasets should address why the supported dataset would be 
preferable and whether it should be used on its own or in conjunction 
with other data.
    31. In addition, the Commission seeks comment on whether using U.S. 
Census Bureau population density data, either on its own or in 
conjunction with the Rural-Urban Commuting Area Codes or alternative 
datasets as set out above, is an appropriate way to proceed. The

[[Page 31621]]

Commission requests that commenters provide information on which 
population density threshold might be the most appropriate and why. For 
example, the Commission could use a 10 or 20 person per square mile 
threshold or higher. The Commission also seeks comment on whether it 
should consider population density at the census block, census block 
group, or census tract level, and why.
    32. Finally, the Commission seeks comment on any other alternative 
methodologies or existing data the Commission could use to help 
identify areas eligible for 5G Fund support that would balance the need 
to ensure the timely deployment of 5G to rural areas with the need to 
allocate funding using the best data currently available to the 
Commission. Apart from determining whether an area is urban or rural 
for purposes of allocating 5G Fund support, are there any other factors 
that could help identify where mobile carriers would have an 
insufficient incentive to build out a 5G network?
    33. Prioritizing Areas that Historically Lack Mobile Service. In 
addition to identifying areas eligible for 5G Fund support on the basis 
of their rurality, the Commission proposes to prioritize among those 
areas those places that have historically lacked 3G or 4G LTE service, 
and seek comment on how to identify them. Using high-cost support to 
deploy voice and 5G broadband service presents different policy 
challenges than a fund designed to fill in gaps in otherwise expansive 
coverage. The Commission recognizes, however, that its proposal to 
define the areas eligible for support without relying on carrier-
reported coverage data may capture both areas where 4G LTE service has 
already been deployed, as well as areas currently lacking any mobile 
broadband service at all. Closing the digital divide requires a 
concerted effort to ensure universal service funds support new 
deployments in previously unserved areas, as well as supporting 
upgrades of existing networks to new technologies. Areas that have 
historically lacked 3G or 4G LTE service may therefore require 
additional focus and higher levels of support in order to ensure that 
5G-capable networks are deployed in a timely manner. The Commission 
seeks comment on this approach.
    34. The Commission seeks comment on currently available sources of 
data that would allow it to best target 5G Fund support to areas that 
have historically lacked mobile service. The Commission does not 
believe it should identify areas eligible for support based on existing 
mobile broadband coverage data because staff has found that these 
coverage data, submitted both as part of FCC Form 477 and in the one-
time Mobility Fund Phase II data collection, do not really reflect 
actual on-the-ground coverage in many instances. However, because FCC 
Form 477 coverage data is filed twice per year, the Commission believes 
it could provide a useful window into which areas were deployed most 
slowly. The Commission seeks comment on this view, and on the best way 
to use FCC Form 477 or other mobile coverage data to identify these 
areas. For example, should the Commission prioritize funding based on 
coverage at a single point in time, or are there better methodologies 
the Commission could consider? The Commission also notes that while 
parties have raised concerns that these data tend to overstate the 
extent of coverage and therefore should not be used to render areas 
ineligible, no parties have asserted the data understate the extent of 
coverage. Are concerns over the accuracy of available coverage data 
lessened when these data are used for purposes of prioritization? The 
Commission seeks comment on these issues and on other potential mobile 
coverage data sources that would help inform which areas should be 
prioritized due to a historic lack of service.
    35. The Commission also seeks comment on how best to prioritize 
such areas in the 5G Fund auction. For the Rural Digital Opportunity 
Fund Phase I auction, the Commission effectively increased the reserve 
price in census blocks lacking even 10/1Mbps service by $10 per 
location over census blocks that lack 25/3 Mbps broadband but already 
have access to 10/1 Mbps service. While the mechanism by which the 
Commission proposes to calculate prices on a per square kilometer basis 
in the 5G Fund Phase I auction differs from the Rural Digital 
Opportunity Fund, the Commission notes that any prioritization could be 
incorporated into the adjustment factor process the Commission proposes 
herein. The Commission seeks comment generally on the mechanics of how 
to prioritize areas that have historically lacked service, as well as 
on what the appropriate level of prioritization would be. Should such 
areas receive an upward adjustment of 25 percent, similar to that 
preference adopted for the Rural Digital Opportunity Fund? Should the 
Commission also consider multiple levels of prioritization depending on 
other factors? The Commission seeks comment on these issues.
    36. The Commission believes that its proposed approach under Option 
A is consistent with the requirements of the recently enacted the 
Broadband Deployment Accuracy and Technological Availability Act 
(Broadband DATA Act), Pub. L. 116-130, 134 Stat. 228 (2020), which 
among other things requires the Commission to collect mobile coverage 
data and release mobile broadband deployment maps based upon collected 
data. The statute requires the Commission to use these maps when 
awarding new funding to deploy broadband service after the maps have 
been created. Given the anticipated timeline of the Commission's 
proposal to define eligibility based upon degree of rurality, the 
Commission expects that the 5G Fund Phase I auction would close before 
the creation of the maps required by the statute, obviating the need to 
use those maps when determining the areas eligible for Phase I. The 
Commission seeks comment on this view. To the extent that the maps are 
created prior to Phase II of the 5G Fund, the Commission seeks comment 
on how to use those maps for any 5G Fund Phase II funding awards.
2. Option B: Collecting New Data Before Funding 5G Rural America in 
2023 or Later
    37. The Commission also seeks comment on an alternative proposal 
under which it would delay the Phase I auction, and any support for 
rural 5G, until the Commission completes work to develop more granular 
mobile broadband coverage maps in the Digital Opportunity Data 
Collection proceeding. Under the Commission's Option B approach, the 
Commission would determine areas eligible for 5G Fund Phase I support 
only after collecting and processing new mobile broadband coverage data 
from carriers. The Commission sought comment on ways to improve the 
accuracy of mobile coverage data submitted by carriers in the Digital 
Opportunity Data Collection Order and Further Notice, 84 FR43705, 
43764, Aug. 22, 2019. Additionally, in light of issues raised about the 
accuracy of the mobile broadband coverage data submitted by carriers 
for the one-time collection of 4G LTE coverage data in the Mobility 
Fund Phase II proceeding, staff made specific recommendations on how to 
improve the collection of mobile coverage data, including by 
standardizing many of the parameters carriers use to generate 
propagation maps. While these issues remain part of an open rulemaking, 
the Commission anticipates that proceeding will allow it to collect 
more accurate mobile broadband coverage data in the future.

[[Page 31622]]

Subsequently, Congress enacted the Broadband DATA Act, largely 
affirming the Commission's approach to broadband mapping in the Digital 
Opportunity Data Collection proceeding, including collecting uniform, 
granular coverage maps from service providers, collecting feedback on 
the maps from members of the public and from state, local, and Tribal 
governments, and developing a database of broadband-addressable 
locations. However, the Commission currently lacks an appropriation 
from Congress to fulfill its obligations under the Broadband DATA Act 
and complete mobile broadband coverage maps. Under this approach, the 
Commission would first collect data and create new mobile broadband 
coverage maps, before using those maps to identify as eligible those 
areas that remain unserved on an unsubsidized basis. This would likely 
result in less expansive and more targeted eligible areas than under 
the Commission's Option A proposal. However, due to the current lack of 
appropriated funding, the expected length of time that would be needed 
to collect, verify, and analyze these data, and to collect and 
adjudicate objections from members of the public and state, local, and 
Tribal governments, this approach would also be likely to significantly 
delay the Phase I auction and disbursement of high-cost support to 
rural areas, including to those areas that do not currently receive 
support.
    38. The Commission anticipates that the earliest it could conduct 
the 5G Fund Phase I auction after collecting new coverage data under 
the Option B approach would be sometime in 2023. Specifically, based on 
the Commission's experience in deploying new, industrywide map-based 
data collections, staff has estimated that completing the new 
statutorily-required rulemaking; developing the IT systems and 
resources necessary to collect and verify submitted mobile coverage 
data and allow for a public-facing challenge process (whether done in-
house or via contract); collecting, verifying, and analyzing the 
coverage data; and collecting and adjudicating any challenges to these 
data would add at least 18-24 months to the auction process, even if 
Congress were to appropriate sufficient funds to implement the 
Broadband DATA Act. The Commission seeks comment on this view and on 
whether there are additional things it should consider that could 
shorten that process.
    39. Areas Eligible for 5G Fund Support. Under this approach, the 
Commission would propose to make eligible for 5G Fund support all areas 
of the country where mobile 5G service would be unlikely to be offered 
in the absence of high-cost support using new carrier-reported mobile 
broadband coverage data. To identify such areas, the Commission 
proposes that any area that updated coverage data show lacks 4G LTE 
service by an unsubsidized carrier would be eligible for 5G Fund 
support. As part of this proposal, the Commission would use legacy 
high-cost support subsidy data from the Universal Service 
Administrative Company (USAC) that define each recipient's subsidized 
service areas to determine whether an area would have service by an 
unsubsidized carrier. The Commission notes that current 5G deployments 
in rural areas are a relatively greenfield state and seeks comment on 
whether it should use 5G deployment data to identify eligible areas 
under this approach. Would basing eligibility on where 4G LTE has yet 
to be deployed without support, nearly 10 years after the technology 
was first deployed, serve as a better indicator of where 5G service 
would similarly not be deployed absent support? The Commission seeks 
comment on this proposal and its assumptions. Should the Commission 
adopt a broader definition to identify areas that should be eligible 
for 5G Fund support, such as areas where coverage data show lack 5G 
service? Or should the Commission also consider historical 4G LTE 
coverage data to include as eligible areas that did not see 4G LTE 
deployment within a shorter duration, such as within five years? If so, 
how would the Commission mitigate issues with the accuracy of 
historical coverage data?
    40. In light of the Commission's proposed definition of eligibility 
for 5G Fund support under this approach, the Commission expects it 
would not be necessary to further prioritize areas that have 
historically lacked 3G or 4G LTE service as these areas would be 
identified in the new carrier-reported mobile coverage data. The 
Commission seeks comment on this conclusion or whether there are other 
metrics by which the Commission should prioritize certain areas under 
Option B, similar to Option A, if the Commission has more expansive 
eligible areas than proposed herein. If so, how should the Commission 
identify such areas? The Commission seeks comment on these issues.

B. Framework for the 5G Fund

    41. The general framework that the Commission proposes for the 5G 
Fund would remain largely the same under either eligibility and auction 
timing proposal. However, where the Commission's two eligibility 
framework proposals differ materially, the Commission discusses the 
implications of each on the proposed auction structure.
1. Term of Support
    42. The Commission proposes a term of support of 10 years for each 
phase of the 5G Fund, with monthly support disbursements. As the 
Commission recently explained in adopting a 10-year support term for 
the Rural Digital Opportunity Fund, a 10-year term of support 
encourages long term investment and was partially responsible for the 
robust participation that occurred in the successful Connect America 
Fund Phase II (CAF Phase II) auction. The Commission expects that the 
same incentives would apply here. The Commission seeks comment on this 
proposal. Does a 10-year term of support for each phase of the 5G Fund 
help encourage more bidders--particularly smaller wireless carriers--to 
participate in a 5G Fund auction? Commenters should specifically 
address whether a 10-year term of support is appropriate for the 5G 
Fund in light of the significant capital and effort needed to deploy 
and upgrade high-speed, mobile broadband networks in rural areas, and 
whether a 10-year term of support is consistent with the timeframe used 
by rural carriers to plan and schedule network buildout. Alternatively, 
commenters should discuss whether a different term of support is 
appropriate and explain the specifics of their proposal.
2. Budget
    43. The Commission proposes a total budget of up to $9 billion for 
the 5G Fund, which would be awarded in two separate phases, with the 
first phase targeting support to eligible rural areas and the second 
phase focusing on harder to serve and higher cost areas, such as farms 
and ranches, specifically targeting deployments that would facilitate 
precision agriculture. Of this budget, the Commission proposes that 
Phase I of the 5G Fund would include up to $8 billion, of which the 
Commission proposes to reserve $680 million for service to Tribal 
lands. The Commission proposes to exclude areas in Alaska, for which 
high-cost support is provided via the Alaska Mobile Plan adopted in the 
Alaska Plan Order, 81 FR 69772, Dec. 7, 2016, as well as areas in 
Puerto Rico and the U.S. Virgin Islands territories, for which high-
cost mobile support is provided as described in PR-USVI Fund Report and 
Order, 84 FR 59937, Nov. 7, 2019, where the Commission is already 
making available

[[Page 31623]]

high-cost support, including for 5G mobile broadband, from the areas 
that would be eligible to receive support from the 5G Fund. The 
Commission seeks comment on these proposals and on alternatives to 
them. To establish how much support would be available in the 5G Fund 
Phase I auction, the Commission also seeks comment on whether it should 
reduce the total budget of Phase I of the 5G Fund by an amount 
equivalent to the amount of funds that would be necessary to cover the 
overall phase down of legacy support. Current legacy high-cost support 
received by mobile carriers is approximately $382 million per year, 
excluding Alaska, Puerto Rico, and the U.S. Virgin Islands. Should the 
Commission deduct the funds necessary to cover the phase down of this 
support from the total amount of support it offers for eligible areas 
in the Phase I 5G Fund auction?
    44. The up to $8 billion budget the Commission proposes for Phase I 
of the 5G Fund is premised, in part, on repurposing the $4.53 billion 
budget adopted for Mobility Fund Phase II, which intended to 
redistribute the amount of legacy support mobile carriers would receive 
over the next decade, outside of Alaska, Puerto Rico, and the U.S. 
Virgin Islands, combined with a recognition that significant additional 
financial resources will be needed to accomplish an undertaking of this 
kind. Although the current level of legacy support of approximately 
$382 million per year has decreased from when the Mobility Fund Phase 
II budget was adopted, the Commission nonetheless proposes to repurpose 
the entire $4.53 billion Mobility Fund Phase II budget, and seeks 
comment regarding how much additional funding may be needed to best 
achieve the Commission's policy objectives. The Commission notes that 
unlike the Mobility Fund Phase II budget, which was designed to fund 
the remaining areas of the country that were not served by 4G LTE 
(estimated at that time to be approximately 19 percent of the land area 
of the U.S.), under Option A, the Commission is proposing to support 5G 
deployment to potentially a significantly larger part of the country 
(approximately 67 percent of the land area of the U.S.) and, 
consequently, budget needs would be higher. While it remains unclear 
how much of the country would be eligible for 5G Fund support under the 
Commission's alternative Option B proposal, given the apparent 
overstatement of existing coverage data, the Commission anticipates 
that the areas unserved by 4G LTE could be substantially larger than 
originally estimated once it collects more accurate mobile broadband 
coverage data.
    45. The Commission notes that its proposals for the 5G Fund budget 
are meant to ensure auction competition and efficient distribution of 
limited universal service support. Considering T-Mobile's extensive 
commitments to deploy 5G services and the proposals, discussed below, 
to remove T-Mobile's planned deployment areas from the auction, the 
Commission seeks comment on whether budgeting $8 billion for Phase I of 
the 5G Fund may reduce the efficiency of the auction and whether a 
smaller budget for Phase I of the 5G Fund would be more appropriate. 
Considering the scope of the areas that would be eligible to compete 
for support, does the budget the Commission proposes for Phase I of the 
5G Fund cost-effectively incentivize carriers to participate in the 
auction in order to deploy 5G consistent with the public interest 
obligations it proposes for the fund?
    46. The Commission's proposal would make at least an additional $1 
billion, as well as any unawarded funds from Phase I of the 5G Fund, 
available for the budget of Phase II of the 5G Fund. Phase II of the 5G 
Fund specifically would seek to target funds support toward the 
deployment of technologically innovative networks that provide 5G 
service and would facilitate precision agriculture. The Commission 
proposes a budget of at least $1 billion for Phase II of the 5G Fund 
because it recognizes that significant resources may be necessary for 
carriers to commit to network buildout in the hardest to serve rural 
areas, like farms and ranches. The Commission anticipates that 
dedicating at least $1 billion to this second phase of funding would 
allow the Commission not only to close the remaining digital divide but 
also direct funds to innovative agricultural solutions, increasing the 
nation's economic efficiency and encouraging economic growth in rural 
areas. Reliable, advanced mobile broadband network deployment capable 
of providing 5G service is crucial to the adoption of smart farm and 
precision agriculture technologies because vast areas of croplands in 
rural areas currently remain unserved. The Commission also anticipates 
that Phase II of the 5G Fund would build off of what is learned from 
the Commission's Precision Agriculture Task Force, a cross-agency 
federal advisory committee comprised of public and private stakeholders 
in the agriculture and technology fields.
    47. The Commission recognizes that achieving its universal service 
objectives is an ongoing process. As technologies and service levels 
evolve, fulfilling the Commission's objective of supporting 5G service 
that is reasonably comparable to service available in urban areas means 
continually assessing the need to support services that compare to the 
ever-improving standard of 5G service provided in urban areas. The 
Commission anticipates reassessing the budget for the 5G Fund Phase II 
auction following the 5G Fund Phase I auction. We seek comment on these 
budget proposals as well as any alternatives, including associated 
methodologies, for how to appropriately size the 5G Fund Phase I and 
Phase II budgets. Commenters offering alternatives to the Commission's 
budget proposals should support their proposals and should address if 
they have accounted for the phase down of legacy support as well as how 
their proposed budget(s) would ensure that the Commission remains a 
responsible steward of finite universal service fund resources.
3. Support for Tribal Lands
    48. Tribal Lands Preference. The Commission recognizes the distinct 
challenges of ensuring that Tribal lands are provided with 5G service. 
To address these difficulties, the Commission seeks comment on a 
proposed approach to incorporating a Tribal lands preference into the 
5G Fund auctions.
    49. Under the Commission's proposed approach for Phase I, up to 
$680 million of the proposed $8 billion Phase I budget would be made 
available to support networks serving eligible areas in Tribal lands. 
This amount would double the amount that the Commission had estimated 
it would reserve to support Tribal lands from the Mobility Fund Phase 
II budget and is in accord with the proposed 5G Fund budget of up to $9 
billion, which is approximately double the total Mobility Fund Phase II 
budget. Only eligible areas on Tribal lands would be assigned support 
under the reserved Tribal lands budget. Bidding for funding under the 
Tribal reserve budget and bidding for support under the unreserved 
portion of the budget would take place simultaneously as part of a 
single auction. Bids would be considered separately for support under 
the Tribal budget and the unreserved budget until the point at which 
total requested support for eligible Tribal lands could be accommodated 
under the Tribal budget, thus determining the areas that would win 
support under the Tribal reserve. Bidding would continue in order to

[[Page 31624]]

determine winners under the unreserved budget. Any unused funds from 
the Tribal reserve would be added to the unreserved budget, and any new 
bids for Tribal areas would then compete with bids for non-Tribal areas 
under the combined overall budget.
    50. The Commission seeks comment on the benefits and potential 
drawbacks of this approach to establishing a separate Tribal reserve 
that would be made available first to Tribal lands, to the extent there 
are successful bidders willing to use these funds to serve Tribal 
lands. Under this proposal, the price at which support to areas 
assigned under the Tribal reserve would likely be higher than the price 
at which support would be assigned under the unreserved budget. The 
extent of the differential price effect would depend on the relative 
levels of competition in Tribal and non-Tribal areas.
    51. The Commission asks commenters to consider whether the proposed 
separate Tribal reserve budget would significantly advance the 
Commission's goal of promoting 5G service to Tribal lands. If a 
commenter believes that another approach would better balance the 
Commission's interest in assigning funds under the 5G Fund in a cost 
effective manner with the Commission's interest in overcoming the 
distinct challenges of expanding 5G service to Tribal lands, the 
Commission asks that the commenter explain in detail the suggested 
alternative and reasons for preferring that approach.
    52. Identifying Tribal Lands. The Commission proposes to identify 
those areas considered to be Tribal lands for high-cost purposes 
broadly in line with the Tribal areas identified in the Lifeline 
program. The high-cost program rules define Tribal lands as ``any 
federally recognized Indian tribe's reservation, pueblo or colony, 
including former reservations in Oklahoma, Alaska Native regions . . . 
as well as Hawaiian Home Lands . . . .'' For the Lifeline program, the 
Commission interpreted these same terms to correspond with geographic 
boundaries of the map of Hawaiian Home Lands maintained by the 
Department of Hawaiian Home Lands, the U.S. Census Bureau's American 
Indians and Alaska Natives Map, the Oklahoma Historical Map (1870-
1890), as amended by the Commission to include the Cherokee Outlet, and 
the Alaska Native regions established pursuant to the Alaska Native 
Claims Settlement Act. The Commission proposes to use these same 
mapping resources in the 5G Fund, to the extent applicable, as it has 
used in the context of the high-cost program.
    53. More specifically, the Commission proposes to use the most 
recent boundary data available for this purpose published by the U.S. 
Census Bureau as the primary source for identifying the boundaries of 
Tribal lands for the 5G Fund. The American Indian, Alaska Native, 
Native Hawaiian (AIANNH) data associate a particular Tribal area with a 
unique Tribe using a four-digit census code identification number and 
also include a flag indicating whether each area is recognized by a 
State or the Federal Government. For purposes of defining Tribal 
boundaries in the 5G Fund, the Commission proposes to only include 
areas that the AIANNH data indicate are federally recognized. In 
addition to using the Census Bureau's AIANNH boundaries, the Commission 
proposes to include the boundaries of all census blocks wholly 
contained within areas identified as Tribal for the enhanced Lifeline 
support areas in Oklahoma (based upon the Oklahoma Historical Map 
(1870-1890)), using the most recent census block boundary data 
available for this purpose. While support to carriers in Alaska is 
proposed to be outside the scope of the 5G Fund, the Commission's 
proposal would define Tribal lands more generally throughout the high-
cost program. The Commission also proposes to include the Census 
Bureau's Alaska Native Regional Corporation boundaries so as to define 
as Tribal land those areas in Alaska that are not part of the AIANNH 
boundaries.
    54. The Commission proposes to modify the definition of Tribal 
lands for the high-cost program to allow for the designation of certain 
non-Tribal lands as Tribal, similar to the rules for the Lifeline 
program. Using this designation process, and consistent with waivers 
previously granted by the Commission to expand the definition of Tribal 
land in the Commission's rules to also include certain areas of a tribe 
that do not otherwise meet the definition, the Commission proposes to 
designate as Tribal land those areas within the study area boundaries 
of the Eastern Navajo Agency and Sacred Wind Communications in New 
Mexico. This approach would allow so-called ``checkerboard'' Tribal and 
non-Tribal land areas in this section of New Mexico to be aggregated as 
Tribal lands for purposes of the high-cost program and the 5G Fund, 
consistent with past Commission waivers. The Commission seeks comment 
on this proposal.
    55. Under the Commission's proposal, all Tribal land with the same 
four-digit census code within the minimum geographic area for bidding 
would be grouped together to allow bidders to bid on Tribal areas 
grouped by Tribe. For Tribal land that is not part of the Census 
Bureau's federally-recognized AIANNH boundaries, the Commission 
proposes to assign such land the census code for the appropriate tribe. 
Specifically, the Commission proposes to identify as part of the Navajo 
Nation the portions of the study area boundaries of the Eastern Navajo 
Agency and Sacred Wind Communications in New Mexico that fall outside 
of any Tribal boundary from the Census Bureau's data. The Commission 
also proposes to identify the portions of census blocks wholly 
contained within the enhanced Lifeline support areas in Oklahoma that 
fall outside of any Tribal boundary identified by the Census Bureau 
with the Cherokee, Iowa, Kickapoo, and Pawnee tribes as appropriate 
based upon the ``former reservations in Oklahoma'' identified in the 
Oklahoma Historical Map (1870-1890). Because there is no individual 
Alaska Native village associated with areas in Alaska that are not part 
of the AIANNH boundary data, the Commission proposes to identify these 
areas with the appropriate Alaska Native Regional Corporation 
identifier. The Commission seeks comment on these proposals and whether 
this process is sufficient to identify Tribal lands for the 5G Fund and 
the high-cost program generally.
4. A Multi-Round, Descending Clock Auction
    56. The Commission proposes to rely on its existing general rules 
regarding competitive bidding for universal service support, with 
specific procedures to be developed through its standard Public Notice 
process. The Commission seeks comment on whether it should consider any 
modifications to this approach for the purposes of a 5G Fund auction.
    57. For Phase I of the 5G Fund, the Commission proposes to use a 
multi-round, descending clock auction to identify which carriers would 
receive support in which areas and the amount of support that each 
winning bidder would be eligible to receive. The Commission proposes 
that this descending clock auction would consist of sequential bidding 
rounds according to an announced schedule providing the start time and 
closing time of each bidding round. The Commission proposes to use 
bidding procedures similar to those used in the auction framework 
adopted for the Rural Digital Opportunity Fund, and adopted in the CAF 
Phase II Auction Order, 81 FR 44413 (Jul. 7, 2016) and used in the CAF 
Phase II auction. The Commission proposes a multi-round auction to

[[Page 31625]]

enable bidders to adjust their bidding strategies over the course of 
the auction so as to create viable aggregations of geographic areas in 
which to construct networks.
    58. The Commission proposes that bids for 5G Fund support would be 
accepted and winning bids would be determined based on a support price 
per adjusted square kilometer. That is, each eligible area would have 
an associated number of adjusted square kilometers reflecting 
particular factors such as difficult terrain and other relevant factors 
affecting the cost of providing service to the area. Support amounts 
for an area would be determined by multiplying an area's associated 
adjusted square kilometers by the relevant price per square kilometer. 
For example, an area with 100 square kilometers and an adjustment 
factor of x would have 100*x adjusted square kilometers. This approach 
would ensure that carriers bidding to serve the hardest-to-serve parts 
of the country can compete efficiently and fairly in the auction.
    59. As is the Commission's usual practice, during the pre-auction 
process, if the Commission adopts its proposal regarding the auction 
objective and design, the Commission would seek comment on and adopt an 
opening price per adjusted square kilometer that is high enough that 
even carriers requiring a very high level of support will be able to 
compete in the auction. The opening clock price, multiplied by an 
area's adjusted square kilometers, would represent the highest support 
amount that a winning bidder could receive in the auction. The same 
opening price, in dollars per adjusted square kilometer, would apply to 
all the eligible areas in the auction. The clock price would be 
decremented in subsequent rounds of the auction, implying lower support 
amounts for each area. Since the opening clock price is intended to 
serve as a starting point for bidding and not an estimate of final 
prices, the Commission anticipates that the opening price that it 
proposes would be based on rough estimates of the cost of providing 
service to hard-to serve areas, taking into account any adjustments 
that are adopted. The Commission invites comment here on the best 
approach to estimating a reasonable starting point for bidding in the 
5G Fund Phase I auction.
    60. If the Commission adopts its proposal to establish a separate 
budget reserved for Tribal lands, it proposes to use an integrated 
bidding process to assign support from both the Tribal lands reserved 
budget and the unreserved 5G Fund Phase I budget, using a single price 
clock that would apply to bids for support under both budgets. Bid 
processing procedures would ensure that the Tribal reserve budget would 
clear at a price per adjusted square kilometer that is not less than 
the price at which the unreserved budget would clear, and as a result, 
winning bids under the Tribal reserve budget would begin to be assigned 
at support prices that were no less, and potentially greater than, the 
prices at which bids under the unreserved budget could be assigned. 
Absent a decision to establish a separate budget for Tribal lands, the 
bidding system would consider all bids on a dollars per adjusted square 
kilometer basis for assignment under the overall budget. As the 
Commission did for CAF Phase II, and as adopted for the Rural Digital 
Opportunity Fund, the Commission proposes to leave the detailed clock 
auction bidding and bid processing procedures to be established in an 
auction procedures public notice after notice and an opportunity for 
comment during the pre-auction process.
    61. The Commission also proposes to include all eligible areas 
nationwide in the 5G Fund Phase I auction, so that bidders compete for 
support across all areas at the same time.
    62. For the 5G Fund Phase II auction, the Commission proposes using 
a similar multi-round, descending clock auction format to identify the 
areas that would be served, the winning bidders, and the support 
amounts they would receive with bids being compared based on a price 
per square kilometer. The Commission further proposes that any bidding 
preferences would be implemented using the approach it addresses here: 
By setting aside a portion of the budget to be assigned based on 
competition across areas qualifying for the preference, as considered 
here for Tribal lands in Phase I of the 5G Fund, or through an 
adjustment to the number of square kilometers (or other units) 
associated with the geographic area.
    63. The Commission seeks comment on all these proposals for the 5G 
Fund Phase I and Phase II auctions. The Commission also seeks comment 
on whether there are any rule changes that it should consider for a 5G 
Fund auction that would lead to greater efficiency or better outcomes 
for the 5G Fund and rural consumers.
5. Minimum Geographic Area for Bidding
    64. The Commission proposes generally to use census tracts 
containing areas eligible for 5G Fund support as the minimum geographic 
area for bidding in an auction. That is, the Commission proposes to 
overlay the eligible areas with U.S. Census Bureau census tracts 
boundaries, and have bidders in a 5G Fund auction bid for support to 
serve the eligible areas within each census tract. The Commission seeks 
comment on this proposal. The Commission also seeks comment on whether 
areas larger than census tracts, such as counties, may be more suitable 
as biddable items for 5G Fund support. Alternatively, would use of a 
different geographic unit, which could provide for more targeted 
bidding, be more appropriate, especially for smaller wireless carriers?
    65. Further, the Commission proposes removing from any 5G Fund 
auction any tracts that have de minimis eligible areas, defined as an 
area of one square kilometer or less within the tract, because the 
Commission believes there would be little or no demand for these areas 
and that the amount of the winning bid associated with such areas would 
likely be too small to pay out. The Commission seeks comment on this 
proposal. Commenters should discuss the costs and benefits associated 
with each approach.
    66. Because the Commission proposes to allocate funds reserved for 
support to Tribal lands from a separate Tribal lands budget, if it 
adopts that approach, the Commission would also need to identify the 
tracts or partial tracts containing eligible areas that coincide with 
the area of a specific Tribal entity. To do this, the Commission 
proposes to overlay the boundaries of Tribal lands for each federally-
recognized Tribal entity, as set forth below, on the eligible areas 
within each census tract if the Commission ultimately adopts a separate 
Tribal lands budget. Thus, under this proposal, the minimum geographic 
area for bidding would be census tracts, split by Tribal land, 
containing areas eligible for 5G Fund support. The Commission seeks 
comment on this proposal.
6. Adjustment Factor
    67. The Commission proposes to incorporate an adjustment factor 
into the 5G Fund auction design and the methodology for disaggregation 
of legacy support that would assign a weight to certain geographic 
areas. Such weighting would reflect, among other things, the relative 
cost of serving areas with differing terrain characteristics as well as 
the potential business case for each area. Given the Commission's wide 
discretion to distribute universal service funding in a way that serves 
the public interest, it proposes to use an adjustment factor to help 
distribute 5G Fund and legacy support to a range of

[[Page 31626]]

areas across the country that are geographically and economically 
diverse.
    68. The Commission does not intend to have an adjustment factor 
capture the full differences between the costs and benefits of 
providing service to different types of geographic areas. The 
Commission proposes to cap the adjustment factor if needed to ensure 
the funding allocation determined by the auction is both equitable and 
efficient. The Commission seeks commenters' views on its proposal to 
adopt an adjustment factor.
    69. In the Order adopted concurrently with this NPRM, the 
Commission directs the Office of Economics and Analytics and the 
Wireline Competition Bureau to propose and seek comment on adjustment 
factor values and the underlying methodologies that could be used to 
develop them. To inform their proposals, the Commission recommends that 
the Office of Economics and Analytics and the Wireline Competition 
Bureau use data from several sources including the U.S. Geological 
Survey, historical coverage and infrastructure deployment data received 
by the Commission, data from the U.S. Census Bureau, spectrum holdings 
information, Mobility Fund Phase I auction data, and other data as 
necessary.
7. Transitioning From Legacy Support to 5G Fund Support
    70. The Commission proposes a general framework for transitioning 
from legacy high-cost support to 5G Fund support that would reform 
mobile high-cost support while minimizing the disruption to carriers 
currently receiving legacy support.
    71. As an initial matter, the Commission tentatively concludes that 
the 5G Fund would constitute a comprehensive mechanism for mobile high-
cost support that serves as an alternative to Mobility Fund Phase II. 
Similar to the Commission's conclusions in the PR-USVI Fund Report and 
Order for the Uniendo a Puerto Rico Fund and the Connect USVI Fund, the 
Commission likewise tentatively concludes that the 5G Fund is 
consistent with statutory restrictions on the Commission's authority to 
modify the rules for legacy high-cost support. We seek comment on these 
tentative conclusions.
    72. Geographic Flexibility for Legacy Support. The Commission seeks 
comment on allowing a mobile competitive eligible telecommunications 
carrier (ETC) receiving legacy high-cost support for a particular 
subsidized service area the flexibility to use such support for the 
provision, maintenance, and upgrading of facilities and services within 
any of the designated service areas for which it receives legacy high-
cost support, regardless of whether those areas span more than one 
state, only during the limited period of time until the Commission 
transitions away from legacy support. While the Commission generally 
limits the scope of where high-cost support received for a particular 
service area can be used, the Commission believes that, in these 
special circumstances, continuing to restrict legacy support recipients 
to using the legacy high-cost support received for a particular service 
area only within that service area may not be in the public interest in 
all cases. More specifically, since the freeze in legacy high-cost 
support in 2012, the amount of legacy support a carrier receives for a 
particular service area no longer has any nexus to the cost of 
providing service in that area. Unlike mobile competitive ETCs 
receiving legacy high-cost support, recipients of the Commission's 
modernized funding mechanisms receive specific, predictable, and 
sufficient support amounts determined either by competitive bidding, a 
cost model, or the carrier's own reported costs to meet the recipients' 
obligation to deploy, provision, and maintain voice and broadband 
services across their designated service areas. Allowing a mobile 
competitive ETC the flexibility to reallocate its use of legacy high-
cost support amongst its subsidized service areas could allow a carrier 
to make more efficient decisions about its use of support considering 
the current costs of providing service in high-cost areas, while still 
satisfying the statutory obligation to use such support for its 
intended purposes. The Commission seeks comment on providing this 
flexibility and on whether it is consistent with the Commission's 
overall universal service goals.
    73. Disaggregation of Legacy Support. Similar to the approach the 
Commission took in the Mobility Fund Phase II Report and Order, the 
Commission proposes to use high-cost disbursement data from USAC that 
define the subsidized service area for each legacy support recipient to 
determine the areas in which legacy support is currently provided. USAC 
tracks the amount of support disbursed for each legacy support 
recipient's subsidized service area (a ``study area'') and the wire 
centers in each study area where the carrier has been designated as an 
ETC. The Commission expects that USAC will prepare and release maps of 
each legacy support recipient's subsidized service areas by combining 
these high-cost data with wire center boundary data. These high-cost 
subsidized service area boundaries would form the basis of our 
disaggregation process. Because high-cost support is disbursed by USAC 
for a carrier's entire subsidized service area, whereas the 
Commission's proposed 5G Fund transition framework would treat legacy 
support differently in different portions of a recipient's service 
area--for example, in eligible and ineligible portions of the area as 
well as in eligible areas where support is won and where there is no 
winner--the Commission must be able to disaggregate legacy support. For 
this purpose, the Commission would overlay the boundaries of eligible 
areas and the minimum geographic area for bidding over each legacy 
support recipient's service area. The Commission would subdivide the 
geographic boundary data for each carrier's subsidized service area 
into the smallest constituent piece for which support must be 
disaggregated and transitioned separately. More specifically, the 
Commission proposes to overlay on each carrier's subsidized service 
area boundary data: (a) The eligible area boundaries; (b) the minimum 
geographic area for bidding, e.g., census tract boundaries; and (c) the 
subsidized service area boundary data for other legacy support 
recipients. The Commission would then calculate the percent area for 
each constituent piece in order to allow us to disaggregate and 
apportion the legacy high-cost support amount for each area. In the 
Order adopted concurrently with this NPRM, the Commission directs the 
Office of Economics and Analytics and the Wireline Competition Bureau 
to propose and seek comment on how to apply an adjustment factor to 
these disaggregation steps to account for the relative costs of 
providing mobile service, as well as whether and how any adjustment 
factor should differ between bidding and the disaggregation process.
    74. Carriers Eligible to Receive Legacy Support. In the interim 
period before legacy support is fully transitioned to 5G Fund support, 
the Commission proposes to clarify that only terrestrial mobile 
wireless carriers may receive mobile high-cost support. Consequently, 
carriers offering non-terrestrial services, such as mobile-satellite 
service, would not be eligible to receive legacy support. Under the 
Commission's proposal, any legacy support recipient that would no 
longer be eligible to receive support would cease to receive legacy 
support after the effective date of an order adopting this requirement. 
This

[[Page 31627]]

proposal would not, however, prevent an affected carrier from bidding 
for, and winning, new 5G Fund support in the auction, provided that it 
is otherwise eligible. The Commission seeks comment on this proposal.
    75. Legacy Support Transition Schedule. As part of the 5G Fund 
framework, the Commission proposes a schedule to transition each legacy 
support recipient's disaggregated legacy support to 5G Fund support 
that is broadly analogous to the schedule adopted in the Mobility Fund 
Phase II Report and Order for Mobility Fund Phase II, with some 
differences. Similar to Mobility Fund Phase II, legacy high-cost 
support would be converted to 5G Fund support, maintained for no more 
than five years to preserve service, or subject to phase down over two 
years depending upon whether the area was eligible for 5G Fund support 
and if eligible, whether there was a winning bidder for the area in the 
auction. For legacy support that is subject to two-year phase down, 
support would be provided at two-thirds of the level of the 
disaggregated legacy support for the first 12 months, and one-third of 
the level of the disaggregated legacy support for the next 12 months. 
All legacy high-cost support in areas subject to phase down would end 
no later than two years after announcement of the conclusion of the 
auction.
    76. Notwithstanding the general transition schedule that the 
Commission proposes, however, it additionally propose that all legacy 
high-cost support to mobile carriers at the frozen identical support 
level would cease no later than five years after the effective date of 
an order adopting this proposal, regardless of when 5G Fund Phase I 
auction is conducted. Specifically, any mobile carrier that continues 
to receive legacy high-cost support not subject to the two-year phase 
down would cease to receive such support no later than the first day of 
the month five years after effective date of an order adopting this 
requirement. In making this proposal, the Commission notes that it 
originally anticipated that the legacy support structure would end in 
2017, but for the pause in phase down and delay in awarding support 
through the Mobility Fund Phase II auction. By setting an absolute date 
on which legacy support to mobile carriers would cease, the Commission 
takes steps to help align the incentives of current legacy support 
recipients with the Commission's goal of transitioning such support to 
5G Fund support using competitive bidding. The Commission seeks comment 
on this proposal and on whether its proposal adequately incentivizes a 
rapid transition away from the inefficient legacy support structure. 
Should the Commission commensurately push back the date on which legacy 
support would cease if it adopts its approach under Option B to collect 
new coverage data before proceeding to the 5G Fund Phase I auction?
    77. Under the transition schedule that the Commission proposes, in 
areas determined not to be eligible for 5G Fund support, legacy support 
would be phased down starting the first day of the month after the 
effective date of an order adopting these requirements and release of 
the final list of areas eligible for 5G Fund support. This proposal 
differs from the transition schedule adopted in the Mobility Fund Phase 
II Report and Order, because, unlike in that proceeding, where the 
final set of eligible areas could not be known until the conclusion of 
the Mobility Fund Phase II challenge process, under Option A the 
proposed areas that would be eligible for 5G Fund support would be 
determined concurrent with adoption of these proposed rules, or under 
Option B would be determined at some point soon after collecting new 
mobile broadband coverage data. Since the Commission expects that 
carriers would not require support in order to deploy 5G service in 
areas ineligible for 5G Fund support, and legacy support recipients 
would not be able to win 5G Fund support in the auction for those 
areas, the Commission tentatively concludes that it would not be in the 
public interest to continue legacy support for ineligible areas. The 
Commission seeks comment on this proposal.
    78. For areas that would be eligible for 5G Fund support, on the 
first day of the month following the release of a public notice 
announcing the close of the 5G Fund Phase I auction, legacy support for 
current recipients would either be maintained, pending authorization of 
the carrier to receive 5G Fund support (for the winning bidder in the 
Phase I auction), maintained in order to preserve service (for one 
legacy support recipient in areas without a winning bidder in the Phase 
I auction), or subject to phase down (for all other legacy support 
recipients). That is, for eligible areas that are not won in the 5G 
Fund Phase I auction, legacy support would begin to phase down over two 
years or be maintained in order to preserve service for no more than 
five years after the Phase I auction closes regardless of whether the 
eligible area may be won in the 5G Fund Phase II auction. In eligible 
areas won in the 5G Fund Phase II auction, legacy support (whether 
subject to phase down or preservation-of-service support) would either 
be maintained, pending authorization of the carrier to receive 5G Fund 
support (for the winning bidder in Phase II), or be subject to phase 
down (for all other legacy support recipients) beginning the first day 
of the month following release of a public notice announcing the close 
of the 5G Fund Phase II auction. Legacy high-cost support subject to 
phase down after the 5G Fund Phase I auction would continue to follow 
the original phase down schedule that commenced after the close of the 
5G Fund Phase I auction for support recipients that were not the 
winning bidder in eligible areas won during the 5G Fund Phase II 
auction. If the carrier receiving maintenance of support in order to 
preserve service is not the winning bidder in the 5G Fund Phase II 
auction for an eligible area won during the 5G Fund Phase II auction, 
that carrier would begin to receive phased down support at this time. 
Under this proposal, legacy high-cost support maintained to preserve 
service after the 5G Fund Phase I auction would continue for eligible 
areas not won during the 5G Fund Phase II auction.
    79. More specifically, for a winning bidder that is receiving 
legacy support in the area of its bid, the Commission proposes that 
legacy support would cease and 5G Fund support would commence on the 
first day of the month following release of a public notice authorizing 
the carrier to receive 5G Fund support. If the winning bidder defaults 
on its bid prior to the authorization of support, or is denied such 
authorization, the Commission would not award 5G Fund support for that 
area. However, to avoid adverse incentives and consistent with our 
proposal to maintain support to preserve service only in areas that 
lack a winning bid, a carrier that currently receives legacy support in 
the area of its winning bid would not receive preservation-of-service 
support and would instead be subject to phase down if the carrier 
defaults on its bid prior to authorization or is denied such 
authorization.
    80. For winning bidders that do not receive legacy high-cost 
support in the areas of their winning bids, 5G Fund support would 
commence on the first day of the month following release of a public 
notice authorizing the winning bidder to receive 5G Fund support. For a 
winning bidder that is not an ETC in an area it won in a 5G Fund 
auction, the Commission would not authorize the winning bidder to 
receive 5G Fund support until it has been designated as an ETC in that 
area. Instead, only after it has been designated as an ETC for that

[[Page 31628]]

area could the winning bidder be authorized to receive 5G Fund support.
    81. In eligible areas where there is no winning bidder in a 5G Fund 
auction, the Commission proposes that the legacy support recipient 
receiving the minimum level of sustainable support would continue to 
receive such support until further Commission action, but for no more 
than five years after the first day of the month following the 
effective date of an order adopting this requirement, in line with the 
Commission's proposal to cease all legacy support within five years. 
The Commission proposes to define the minimum level of sustainable 
support to be the lowest amount of legacy support among carriers that 
have deployed the highest level of mobile technology within the state. 
The Commission seeks comment on this proposal and whether these are the 
best metrics by which to measure deployment in order to ensure service 
continues in eligible areas not won during the auction.
    82. The following chart summarizes the Commission's proposed 
schedule to transition from legacy support for areas in the 5G Fund 
Phase I auction. Consistent with the existing high-cost disbursement 
schedule, all legacy support transition schedule timing would be 
aligned to the first day of the month following a triggering action.

                       Transition Schedule for Legacy High-Cost Support to 5G Fund Support
----------------------------------------------------------------------------------------------------------------
            Eligibility                 Auction result     Bidder or recipient status    Support type & timing
----------------------------------------------------------------------------------------------------------------
Ineligible........................  .....................  ..........................  2-year phase down
                                                                                        commences after
                                                                                        effective date of rules
                                                                                        and release of final
                                                                                        eligible areas.
Eligible..........................  Won in auction.......  Carrier is the winning      5G Fund support commences
                                                            bidder but does not         after auction close and
                                                            receive legacy support      bidder is authorized.
                                                            for the area it won.
Eligible..........................  Won in auction.......  Carrier is the winning      Legacy support ceases and
                                                            bidder and is a legacy      5G Fund support
                                                            support recipient for the   commences after close of
                                                            area it won.                the auction and bidder
                                                                                        is authorized for area.
Eligible..........................  Won in auction.......  Carrier is a legacy         Legacy support ceases and
                                                            support recipient but is    2-year phase down
                                                            not the winning bidder in   commences after auction
                                                            the area for which it       close.
                                                            receives support..
Eligible..........................  Not won in auction...  Carrier is a legacy         Legacy support ceases and
                                                            support recipient but       2-year phase down
                                                            does not receive the        commences after auction
                                                            minimum level of            close.
                                                            sustainable support for
                                                            the area for which it
                                                            receives support.
Eligible..........................  Not won in auction...  Carrier is a legacy         Legacy support continues
                                                            support recipient and       for no more than 5 years
                                                            receives the minimum        after effective date of
                                                            level of sustainable        rules.
                                                            support for the area for
                                                            which it receives support.
----------------------------------------------------------------------------------------------------------------

    83. The Commission seeks comment on this framework generally and 
its proposed schedule to transition from legacy support to 5G Fund 
support. The Commission seeks comment on whether, in order for a legacy 
support recipient to be eligible to have its support maintained under 
the preservation-of-service rule for a particular area, it should 
require the carrier to participate in the 5G Fund Phase I auction and 
place a bid on that area. The Commission also tentatively concludes 
that legacy support recipients should be subject to additional public 
interest obligations and performance requirements to continue to 
receive legacy support in order to make sure that those primarily rural 
areas do not fall behind. The Commission seeks comment on this 
framework and proposed schedule to transition from legacy support to 5G 
Fund support. The Commission also seeks comment on proposed alternative 
frameworks and transition schedules.
8. Public Interest Obligations and Performance Requirements for Legacy 
High-Cost Support Recipients and 5G Fund Support Recipients
    84. The Commission proposes that both legacy high-cost support 
recipients and 5G Fund support recipients would have a public interest 
obligation to provide 5G service alongside the voice service for which 
high-cost support is provided, and to meet measured performance 
requirements as a condition of receiving support. Specifically, the 
Commission proposes to require 5G Fund support recipients to provide 
mobile, terrestrial voice and data services that comply, at a minimum, 
with 5G-NR technology as defined by 3GPP Release 15 (or any successor 
release that the Office of Economics and Analytics and the Wireline 
Competition Bureau may require 5G Fund support recipients to comply 
with after notice and comment). The Commission proposes that mobile 
wireless carriers receiving 5G Fund support must also meet minimum 
baseline performance requirements for data speed, data latency, and 
data allowance. These proposals should ensure that rural areas receive 
service comparable to high-speed, mobile broadband available in urban 
areas. In accord with the USF/ICC Transformation Order and Further 
Notice, the Commission also proposes to require legacy support 
recipients to meet public interest obligations and performance 
requirements that would ensure the deployment of 5G network technology 
in each carrier's subsidized service areas. Specifically, under the 
Commission's proposal, legacy support recipients would be required to 
provide voice and data services that comply with the same 5G-NR 
technology required for 5G Fund support recipients.
    85. Public Interest Obligations, Performance Requirements, and 
Reporting Requirements for Legacy Support Recipients. To ensure that 
the most advanced mobile services are available in all areas where a 
carrier is currently receiving legacy high-cost support, the Commission 
proposes to establish additional public interest obligations, 
performance requirements, and reporting requirements that such 
recipients must meet in order to continue receiving legacy support. In 
the USF/ICC Transformation Order and Further Notice, the Commission 
anticipated that if the phase down of high-cost support were halted at 
any

[[Page 31629]]

point during the transition to a more efficient distribution of 
funding, the Commission would adopt additional mobile broadband public 
interest obligations and performance requirements for continued receipt 
of such support.
    86. The phase down was halted in 2014 and since that time legacy 
support recipients have received approximately $2 billion in high-cost 
support without having to meet any specific broadband deployment 
obligations. The absence of broadband public interest obligations and 
performance requirements does a disservice to rural Americans living in 
areas served by legacy support recipients because the Commission's 
rules require high-cost recipients to use support ``only for the 
provision, maintenance, and upgrading of facilities and services for 
which the support is intended'' and do not specify that such recipients 
must deploy the most current wireless technologies or expand their 
services to meet current standards. Indeed, because support levels were 
frozen at the end of 2011 based on the now-eliminated identical support 
rule and no service obligations are in place, legacy support recipients 
may be incentivized to reduce services to increase profit margins. 
Moreover, these current circumstances can create incentives against the 
reform of legacy, inefficient support and the refocusing of the 
Commission's limited universal service funds on unserved rural areas. 
Accordingly, today the Commission proposes to meet its stated intention 
in the USF/ICC Transformation Order and Further Notice and ensure that 
all Americans living in areas served by legacy support recipients 
receive the most advanced wireless services.
    87. Initial Report of Current Service Offerings. To better 
understand the services current mobile recipients of legacy high-cost 
support are offering in their subsidized areas, the Commission 
tentatively concludes that each legacy support recipient should be 
required to file an initial report describing its current service 
offerings in its subsidized service areas and how the legacy support it 
is receiving is being used. The Commission tentatively concludes that 
this report would be required to be filed no later than three months 
after the Commission receives Paperwork Reduction Act approval for this 
requirement following its adoption.
    88. Adoption of Public Interest Obligations and Performance 
Requirements for Legacy Support Recipients. The Commission tentatively 
concludes that it should adopt additional, broadband-specific public 
interest obligations and performance requirements for all current 
mobile legacy high-cost support recipients and that these obligations 
and requirements, as an interim step before the 5G Fund auction, should 
largely mirror the requirements for 5G Fund support recipients. Such 
action will ensure that rural Americans do not get left behind simply 
because they are served by a mobile legacy high-cost support recipient. 
To ensure that recipients of legacy high-cost support meet their public 
interest obligation to provide 5G service in their subsidized service 
areas, the Commission proposes to adopt interim and final service 
milestones to monitor their progress in meeting the performance 
requirements by the established deadlines, and propose that a legacy 
support recipient meet the same minimum baseline performance 
requirements for data speed, latency, and data allowance ultimately 
adopted for 5G Fund support recipients. The Commission also proposes 
that legacy support recipients have the same public interest 
obligations as it proposes for 5G Fund support recipients to provide 5G 
service at reasonably comparable rates, an allow collocation and voice 
and data roaming.
    89. The Commission proposes requiring that current legacy support 
recipients provide 5G broadband service that meets the established 
performance requirements for legacy support recipients to at least 85 
percent of the square kilometers in their subsidized service areas in 
each state by a final service deployment milestone deadline at the end 
of the fourth full calendar year after the effective date of an order 
adopting this requirement. The Commission notes that the Rural Wireless 
Association, which represents a number of legacy support recipients, 
has indicated that its members have used high-cost support to upgrade 
their networks to 4G LTE and would be willing to deploy 5G service in 
their subsidized service areas if such high-cost support continues. 
Because the infrastructure necessary to provide high speed broadband 
likely exists throughout the subsidized service areas of many legacy 
support recipients, the Commission expects that 5G service could be 
deployed more quickly than for a greenfield buildout. As such, the 
Commission believes that legacy support recipients that continue to 
receive support, including under the preservation-of-service rule, 
should be able to reasonably deploy 5G broadband service throughout 
their subsidized service areas within four years. However, because it 
may not be feasible for a legacy support recipient to deploy 5G service 
in areas where legacy support is being reduced, the Commission proposes 
to exempt from this requirement any portion of a carrier's subsidized 
service area where the legacy support recipient is subject to a two-
year phase down of legacy high-cost support.
    90. The Commission seeks comment on these proposals. If it moves 
forward with our Option A approach, the Commission seeks comment on 
whether these public interest obligations and performance requirements 
should be delayed from taking effect until after release of the final 
list of areas eligible for support in the 5G Fund Phase I auction, in 
light of the Commission's proposal to exempt ineligible portions of a 
legacy support recipient's subsidized service area from these 
obligations. In contrast, the Commission does not anticipate delaying 
these obligations if it moves forward with its Option B approach, given 
that release of the final eligible areas may be delayed by two years or 
more. Would delaying these public interest obligations and performance 
requirements until the Commission has final eligible areas under either 
proposal be consistent with its goal of ensuring that rural areas that 
continue to receive legacy high-cost support do not fall behind?
    91. The Commission also proposes that legacy support recipients 
meet interim service deployment milestones prior to the final service 
milestone. Specifically, a current legacy support recipient must 
provide 5G broadband service that meets the established performance 
requirements for legacy support recipients service to at least 40 
percent of its subsidized service areas by the end of the second full 
calendar year after the effective date of an order adopting this 
requirement, and to at least 60 percent of their subsidized service 
areas by the end of the third full calendar year after the effective 
date of an order adopting this requirement. The Commission proposes to 
require that legacy support recipients certify and demonstrate that 
they have met their service deployment milestones by meeting certain 
requirements as a measurement of performance within their subsidized 
areas using the same process the Commission ultimately adopts for 5G 
Fund support recipients. The Commission tentatively concludes that 
legacy high-cost support will not be provided to legacy support 
recipients that do not meet the established performance requirements by 
the applicable service deployment milestone deadlines. Should the 
Commission instead adopt a tiered non-compliance framework for legacy

[[Page 31630]]

support recipients that fail to meet these proposed performance 
requirements similar to what the Commission proposes for 5G Fund 
support recipients that fail to meet their performance requirements? 
The Commission also seeks comment on whether these obligations should 
be amended or refined to specify different percentages of service to 
Tribal lands within a legacy support recipient's subsidized service 
areas to ensure customers residing on Tribal lands would receive 
service as the preceding obligation and milestones are met.
    92. Annual and Interim Reporting Requirements for Legacy Support 
Recipients. The Commission tentatively concludes that current mobile 
recipients of legacy high-cost support should be required to file 
reports regarding their efforts to provide 5G services throughout their 
subsidized service areas that meet the proposed public interest 
obligations and performance requirements. Specifically, the Commission 
tentatively concludes that for as long as a legacy support recipient 
receives legacy support, it should be required to file an annual report 
by July 1 in each year that includes updated information about the 
legacy support recipient's current service offerings in its subsidized 
service areas and how legacy support is being used to provide 5G 
services in these areas, and a certification that the legacy support 
recipient is in compliance with the public interest obligations and all 
of the terms and conditions associated with the continued receipt of 
legacy support disbursements. These annual reports would be filed with 
USAC via a web portal, and USAC would make all such data available to 
the Commission and state/Tribal governmental agencies. The Commission 
also tentatively concludes that each legacy support recipient should be 
required to file interim milestone reports and a final milestone report 
by March 1 of the calendar year following each applicable service 
milestone demonstrating that it has deployed 5G service that meets the 
performance requirements adopted for legacy support recipients. These 
interim milestone reports would be filed with USAC via a web portal, 
and USAC personnel would be responsible for verifying submitted data to 
determine compliance with the established performance requirements for 
legacy support recipients. The Commission seeks comment on these 
proposed reporting requirements.
    93. Should the Commission exempt legacy support recipients that 
receive a de minimis amount of support from the public interest 
obligations and performance requirements it adopts for legacy support 
recipients, and if so, what level of support would be de minimis? 
Instead of requiring certain 5G broadband service coverage 
requirements, should the Commission require that legacy support 
recipients use an increasing percentage of their support toward 
deployment of 5G service? If so, how should the Commission measure 
compliance? The Commission seeks comment on these approaches and, if 
adopted, would direct the Office of Economics and Analytics and the 
Wireline Competition Bureau to establish, through a separate notice and 
comment process, the procedures used to verify legacy support 
recipients' compliance with these public interest obligations and 
performance requirements.
    94. Ensuring Auction Competitiveness. The Commission recognizes 
that the current legacy high-cost support levels are unrelated to the 
costs of deploying 5G service, and seeks comment generally on ways to 
stimulate robust competition in the 5G Fund auction, especially from 
legacy support recipients in the service areas for which they are 
subsidized. How can the Commission ensure that legacy support 
recipients are incentivized to participate in the 5G Fund auction? 
Should the Commission require that legacy support recipients whose 
subsidized service areas are eligible in the 5G Fund auction bid on 
these areas to be eligible to have such support preserved in case the 
area remains unsold in the auction? The Commission seeks comment on 
these matters.
    95. One party has suggested that the Commission consider an 
alternative mechanism offering current legacy high-cost support 
recipients that have fewer than 500,000 subscribers the option to 
continue to receive such support in return for deploying 5G service. In 
order to properly align the incentives to ensure auction 
competitiveness, should the Commission adopt such an alternative, or a 
similar mechanism by which legacy support recipients have an 
opportunity to accept reduced support, in return for the Commission 
removing from the 5G Fund auction areas that would otherwise be 
eligible for support? If we were to adopt such a process, what would be 
an appropriate subscriber count cutoff to determine which legacy 
support recipients are small carriers? How much of our proposed 5G Fund 
budget should be set aside for this purpose, and would such a mechanism 
ensure that the Commission's limited universal service funds are best 
spent to expand 5G service? What would be the costs and benefits of 
either of these mechanisms? Are there better means by which the 
Commission can encourage a rapid transition to 5G Fund support for 
legacy support recipients that also ensures 5G service deployment in 
areas that do not receive 5G Fund support? Preliminary high-cost 
support data from USAC show that significant portions of the subsidized 
service areas of many legacy support recipients overlap each other, and 
continuing to disburse support to more than one carrier to cover the 
same area would be at odds with the Commission's proposal to award 5G 
Fund support to only a single carrier. Additionally, under the 
Commission's proposed definitions for 5G Fund eligible areas, some 
portion of the subsidized service area of legacy support recipients may 
not be eligible for 5G Fund support. If the Commission were to consider 
offering legacy support recipients the option to continue to receive 
support, it seeks comment on whether to exclude subsidized service 
areas where more than one carrier receives legacy support, as well as 
areas that are not eligible for 5G Fund support. If a legacy support 
recipient were to decline this offer, should that carrier be ineligible 
to continue to receive support under the preservation-of-service rule 
proposed above? The Commission seeks comment on these matters and any 
alternatives to ensure the alignment between its tentative conclusion 
to adopt additional public interest obligations and performance 
requirements for current recipients and ensuring a competitive auction.
    96. Public Interest Obligations and Performance Requirements for 5G 
Fund Support Recipients. To ensure that 5G Fund support recipients meet 
their public interest obligation to provide 5G service in areas where 
they receive support, the Commission proposes to adopt interim and 
final service milestones to monitor their progress in meeting the 
performance requirements by the established deadlines. Specifically, 
the Commission proposes that a support recipient must meet minimum 
baseline performance requirements for data speed, latency, and data 
allowance by the applicable deadlines. In addition, support recipients 
would have a public interest obligation to provide their 5G service at 
reasonably comparable rates and allow collocation and voice and data 
roaming throughout the 10 year support term. The service milestones the 
Commission proposes for the 5G Fund are similar to those adopted for 
the Rural Digital Opportunity Fund, CAF Phase II, and in the Uniendo a 
Puerto Rico Fund and the Connect USVI Fund proceeding.

[[Page 31631]]

    97. For interim service milestones, the Commission proposes that a 
5G Fund support recipient must commercially offer service that meets 
the established 5G performance requirements to at least 40 percent of 
the total square kilometers associated with the eligible areas for 
which it is authorized to receive 5G Fund support in a state by the end 
of the third full calendar year following authorization of support, to 
at least 60 percent of the total square kilometers by the end of the 
fourth full calendar year, and to 80 percent of the total square 
kilometers by the end of the fifth full calendar year. Additionally, in 
accord with the Commission's decision in the Rural Digital Opportunity 
Fund Report and Order to adopt an optional early service milestone for 
the Rural Digital Opportunity Fund, it proposes to adopt an optional 
early service milestone for the 5G Fund, which would allow a support 
recipient to reduce the value of its letter of credit if it offers 
service that meets the established 5G performance requirements to at 
least 20 percent of the total square kilometers in its winning bid 
areas in a state by the end of the second full calendar year following 
funding authorization. The Commission also proposes to align the 
service milestones with those of other high-cost programs to minimize 
the administrative burdens on the Commission, USAC, and support 
recipients. Accordingly, regardless of when a 5G Fund recipient is 
authorized to begin receiving support, the Commission proposes that 
each service milestone would occur on December 31. This proposal is 
consistent with the Wireline Competition Bureau's recent CAF Phase II 
Auction Recipients' Deployment and Reporting Deadlines Aligned Order, 
35 FCC Rcd 109 (2020), that established uniform milestone deadlines for 
CAF Phase II auction support recipients and the Commission's decision 
in the Rural Digital Opportunity Fund Report and Order to adopt 
consistent milestone deadlines for the Rural Digital Opportunity Fund. 
The Commission acknowledges that by proposing to align the 5G Fund 
interim and final service milestones deadlines with those of other 
high-cost programs, some 5G Fund support recipients could possibly have 
more than three years to complete their first interim milestone. The 
Commission seeks comment on these proposals.
    98. The Commission also proposes that a 5G Fund support recipient 
must provide service that meets the established 5G performance 
requirements to at least 85 percent of the total square kilometers 
associated with the eligible areas for which it is authorized to 
receive 5G Fund support in a state by a final service milestone by the 
end of the sixth full calendar year following authorization of support. 
This proposed final service milestone is similar to the final buildout 
requirement adopted in the USF/ICC Transformation Order and Further 
Notice for Mobility Fund Phase I. In addition, the Commission proposes 
that by the final service milestone, a 5G Fund support recipient would 
need to demonstrate that it provides service that meets the established 
5G performance requirements to least 75 percent of the total square 
kilometers within each biddable area (e.g., census block group or 
census tract) for which it is authorized to receive support. The 
Commission seeks comment on these proposals. The Commission also seeks 
comment on whether there are additional measures it could adopt that 
would help ensure that 5G Fund support recipients would meet their 
interim and final service milestones.
    99. Data Speed. The Commission seeks comment on the minimum network 
speeds that 5G Fund support recipients should be required to deliver. 
In the PR-USVI Fund Report and Order, the Commission required support 
recipients to provide speeds of 35/3 Mbps, and the Commission seeks 
comment on whether it should adopt that requirement here. The 
Commission believes that such speeds would be achievable for carriers 
that only have access to low-band spectrum, as may be the case in rural 
areas, and seek comment on this view. Should the Commission adopt a 
higher performance requirement, such as 50/5 Mbps? Would higher speeds 
be feasible for rural areas, given the spectrum available to carriers? 
Do the benefits to rural consumers of requiring higher network speeds 
outweigh the potential costs of meeting those requirements? Should the 
Commission's proposed speed requirement increase over time to account 
for the likely pace of improvements in 5G service to well-served areas? 
The Commission also seeks comment on how to best quantify these speed 
requirements statistically, e.g., if these speeds should be specified 
as median, mean, or another percentile of probability, and how these 
variations can be accounted for over the total extent of the coverage 
area.
    100. Minimum Cell Edge Requirements. In addition to requiring 
deployment of 5G service with download and upload speeds of at least 35 
Mbps and 3 Mbps, the Commission proposes to require that carriers 
deploy service in eligible areas with a minimum cell-edge download 
speed of 7 Mbps and a minimum cell edge upload speed of 1 Mbps, with a 
90 percent coverage probability and a 50 percent cell loading factor. 
The Commission anticipates that these proposed requirements would 
ensure that the desired typical user experience in areas supported by 
the 5G Fund would be realistically attainable over the broad coverage 
area supported by the 5G Fund. The Commission seeks comment on this 
proposal, including the specific cell edge throughput, probability, and 
cell loading values proposed. Are these cell edge values appropriate to 
ensure performance across the cell area that would be adequate to meet 
the Commission's proposed 35 Mbps/3 Mbps data speed requirement?
    101. Alternatively, should the Commission require different cell 
edge coverage probability and cell loading targets, such as 80 percent 
cell-edge coverage probability or 30 percent loading? Should the 
Commission require a lower cell loading value because rural 
environments may experience typical loading levels lower than 50 
percent? Should the Commission require a different cell-edge minimum 
download and upload speed? Should the Commission require a minimum 
spectral efficiency (bps/Hz) metric, and if so, what should it be, and 
should it be considered in addition to, or as an alternative to, the 
download and upload speeds mentioned above? If the Commission adopts a 
minimum spectral efficiency metric, should this metric vary based upon 
the spectrum band used? What higher spectral efficiency (bps/Hz) 
improvements for 5G compared to 4G LTE are possible at the edge of (and 
overall for) rural cell sites? The Commission also seeks comment on 
whether these data speed and minimum cell edge requirements should be 
re-evaluated during the 5G Fund term as technologies continue to 
improve and speeds become faster.
    102. Latency. The Commission proposes to require networks in 
eligible areas supported by the 5G Fund to have a latency of 100 
milliseconds or less per round trip, a latency value referred to in the 
Rural Digital Opportunity Fund Report and Order as ``low latency.'' The 
Commission seeks comment on this metric, including comment on whether 
the deployment of 5G technology should alter the Commission's proposed 
latency requirements. The Commission proposes that measurement of 
latency be implemented using a standalone user device-based application 
which initiates and terminates round trip time measurements between the 
user device

[[Page 31632]]

and specified test servers. The Commission seeks comment on this 
proposal. The Commission also seeks comment on the network reference 
points between which the latency measurement should be conducted, and 
whether to specify the protocol layer, type, length, and number of 
packets. The Commission seeks comment on whether this latency 
requirement should decrease over time to account for the likely pace of 
improvements in 5G service to well-served areas.
    103. Data Allowance. To ensure that rural consumers have access to 
service plans comparable to those offered in urban areas, the 
Commission proposes that 5G Fund support recipients must provide at 
least one service plan in eligible areas that includes a data allowance 
that would correspond to the average United States subscriber data 
usage. The Commission seeks comment on this proposal. The Commission 
also recognizes that industry and consumer practices regarding usage 
levels will evolve over time, especially as consumer internet usage 
continues to be dominated by video consumption. The Commission seeks 
comment on what type of service plan would fulfill this purpose--would 
one equivalent to a mid-level plan offered by a nationwide provider 
suffice? The Commission also seeks comment on when during the support 
term it should set this requirement, and what data allowance proposal 
would be high enough to ensure that rural consumers have access to 
service plans comparable to those offered in urban areas. Should the 
data allowance the Commission adopts increase over time, for instance 
at the interim service milestones it establishes for deployment of 
service? What data, and what data sources, should the Commission use to 
establish the monthly data allowance? Commenters should include current 
industry data to support any proposed standard, and should comment on 
the likely availability of a data source that would continue to be 
updated during the proposed 10-year term of the 5G Fund program.
    104. The Commission also seeks comment on whether to establish a 
cap on the maximum data usage allowance that would be required for the 
final service milestone, and, if so, what industry data should be 
considered and incorporated into the calculation of a cap. If 
commenters disagree with the possibility of an increase of the data 
usage allowance requirement during the 5G Fund support term, they 
should explain why the 5G Fund standard should remain static even if, 
as anticipated, significant increases in average data usage occur in 
the industry over the next 10 years. Commenters supporting the adoption 
of a specific metric for the final service milestone prior to the 
auction should provide details regarding why a specific metric is 
suitable. Finally, if a data usage allowance for the final service 
milestone was to be established prior to the auction, the Commission 
seeks comment on how that allowance metric should be determined, 
including which data sources should be used.
    105. Reasonably Comparable Rates. The Commission proposes, 
consistent with section 254(b)(5) of the Communications Act of 1934, as 
amended (Act), to require that 5G Fund support recipients have a public 
interest obligation to offer their services in eligible rural areas at 
rates that are reasonably comparable to rates they offer in urban 
areas. In the USF/ICC Transformation Order and Further Notice, the 
Commission concluded that, as a condition of receiving federal high-
cost universal service support, all recipients of such support must 
offer broadband service in their supported area that meets certain 
basic performance requirements at rates in rural areas that are 
reasonably comparable to rates offered in urban areas. For both voice 
and broadband services, the Commission considers rural rates to be 
``reasonably comparable'' to urban rates under section 254(b)(3) of the 
Act if rural rates fall within a reasonable range of urban rates for 
reasonably comparable voice and broadband services.
    106. As an initial matter, the Commission proposes to define 
``urban'' for this purpose using the same urban/rural definition as 
used in the initial step for defining eligible areas for the 5G Fund 
auction, which is based on the 2010 U.S. Census Bureau delineation. The 
Commission seeks comment on how it should determine if a carrier's 
rates are reasonably comparable to those it offers in urban areas. For 
instance, should the Commission conclude that if a carrier is offering 
the same rates, terms, and conditions (including usage allowances, if 
any, for a specified rate) to both urban and rural customers, then it 
would fulfill the requirement that its rates are reasonably comparable? 
The Commission also seeks comment on whether a carrier should be able 
to demonstrate it provides reasonably comparable rates if one of its 
stand-alone voice plans and one service plan offering data are 
substantially similar to plans offered in urban areas. In addition, in 
cases where a 5G Fund recipient does not serve urban areas and 
therefore must compare its rates to those of a different mobile 
carrier, the Commission seeks comment on how the 5G Fund recipient 
should identify the carrier and specific rate plans upon which it is 
basing its compliance certification, and what it should submit as 
corroborating evidence of reasonably comparable rates, such as 
information from the urban provider's web page or other marketing 
materials. All ETCs must advertise the availability of their voice 
services through their service areas, and the Commission requires 
support recipients also to advertise the availability of their 
broadband services within their service area. The Commission seeks 
comment on these proposals.
    107. Collocation and Voice and Data Roaming. To ensure that support 
recipients do not use public funds to achieve unfair competitive 
advantage, the Commission proposes to adopt a public interest 
obligation that would require the same general collocation and voice 
and data roaming obligations that the Commission adopted for Mobility 
Fund Phase I, with certain minor changes. The Commission proposes that 
during the 10-year 5G Fund term, support recipients be required to 
allow reasonable collocation by other carriers of services that would 
meet the technological requirements of the 5G Fund on all 5G network 
infrastructure constructed with Universal Service Fund support that it 
owns or manages in the area for which it receives support. In addition, 
during this period, the Commission proposes that the recipient may not 
enter into facilities access arrangements that restrict any party to 
the arrangement from allowing others to collocate on the 5G network 
infrastructure. The Commission reminds participants that during the 10-
year 5G Fund term, support recipients must comply with the Commission's 
voice and data roaming requirements in effect as of the adoption of 5G 
Fund rules on networks that are built through 5G Fund support.
9. Reporting Requirements
    108. Consistent with the requirements adopted for CAF Phase II and 
the Rural Digital Opportunity Fund, the Commission proposes that a 5G 
Fund support recipient must submit an annual report certifying its 
compliance with the public interest obligations, performance 
requirements, and any other terms and conditions associated with 
receipt of 5G Fund support. The Commission further proposes that a 
support recipient must also file interim and final service milestone 
reports demonstrating that it has met the 5G Fund performance 
requirements for

[[Page 31633]]

deployment of service. The Commission also proposes a rule that would 
require a support recipient authorized to receive 5G Fund support and 
its agents to retain any documentation prepared for, or in connection 
with, the award of the 5G Fund support for a period of not less than 10 
years after the date on which the support recipient receives its final 
disbursement of 5G Fund support.
    109. Annual Reports. The Commission proposes that a 5G Fund support 
recipient be required to file an annual report by July 1 of each year 
after each year in which it was authorized to receive 5G Fund support. 
The Commission proposes that a support recipient's annual report would 
cover the preceding calendar year and that the support recipient would 
be required to certify that it has complied with the public interest 
obligations, performance requirements, and any other terms and 
conditions associated with receipt of 5G Fund support in order to 
continue receiving 5G Fund disbursements. The annual report would be 
filed with USAC via a web portal, and USAC would make all such data 
available to the Commission and state and Tribal governmental agencies. 
The Commission seeks comment on this proposal, including the length of 
time the web portal should be open to receive annual certifications 
each year. The Commission retains its authority to look behind 
recipients' annual reports and to take action to address any 
violations.
    110. Interim and Final Milestone Reports. The Commission proposes 
that 5G Fund support recipients must collect and submit speed test data 
in interim and final service milestone reports, in accordance with the 
guidelines outlined below, and as developed further in the Digital 
Opportunity Data Collection proceeding that is considering more broadly 
applicable standards. The service milestone reports would include data 
to demonstrate compliance with the interim and final service milestones 
and the performance requirements for the 5G Fund. The Commission 
proposes that these reports would be submitted to USAC, as adopted for 
CAF Phase II and the Rural Digital Opportunity Fund. USAC personnel 
would be responsible for verifying submitted data to determine 
compliance with 5G Fund requirements. The Commission invites comment on 
proposed guidelines for testing and on alternatives.
    111. The Commission seeks comment on whether it should standardize 
the network performance testing and coverage mapping methodologies used 
by 5G Fund recipients to report on their compliance service milestones. 
As a general matter, the Commission has been taking steps to achieve 
standardization in testing, mapping, and reporting of mobile broadband 
deployment. In its decision to conditionally approve the transaction 
between T-Mobile and Sprint, the Commission made clear that the 
approval of the transaction would be conditioned on the network 
buildout commitments of the licensees to provide 5G service to a large 
portion of the U.S. population, including rural areas, and these 
commitments include the submission of drive test results and coverage 
maps to the Commission at three- and six-year milestones. Further, the 
staff report concerning the investigation of the Mobility Fund Phase II 
4G LTE coverage data submitted by certain carriers revealed significant 
discrepancies between coverage maps generated by carriers whose 
networks were tested and the actual, on-the-ground mobile experience, 
as measured by staff speed tests. Commission staff therefore 
recommended that, for proceedings in which the Commission collects 
mobile broadband deployment data, it should further standardize the 
propagation map parameters and assumptions that carriers use to 
generate their coverage data and require the submission of actual on-
the-ground evidence of performance alongside coverage maps. Similarly, 
the Commission sought comment in its Digital Opportunity Data 
Collection Order and Further Notice on what additional steps the 
Commission should take to obtain more accurate and reliable mobile 
broadband deployment data. The Commission also notes that detailed 
validation processes have been implemented in other recent universal 
service auction proceedings. Consistent with the Commission's past 
efforts to encourage the use of consistent methodologies to verify 
buildout, the Commission proposes particular methods for 5G Fund 
support recipients to demonstrate provision of required performance and 
coverage.
    112. The Commission proposes that a support recipient's interim and 
final service milestone reports would be due by March 1 of the calendar 
year following each applicable December 31 milestone deadline. The 
Commission proposes that failing to timely submit a service milestone 
report that includes the required representative data and certification 
concerning performance and coverage requirements by the established 
deadline would subject support recipients to defined consequences (as 
specified in the non-compliance proposal herein). Consistent the 
requirements adopted for CAF Phase II and the Rural Digital Opportunity 
Fund, the Commission further proposes that if a support recipient has 
not met the established performance requirements by the applicable 
service milestone deadline, it must inform the Commission, USAC, and 
the relevant state, U.S. Territory, or Tribal government, if 
applicable, in writing within 10 business days that it has failed to 
meet an interim or the final service milestone.
10. Demonstrating Compliance With Performance Requirements
    113. The Commission proposes to require that 5G Fund recipients 
certify and demonstrate that they have met service deployment 
milestones by meeting certain requirements as a measurement of 
performance within a 5G Fund support area. More specifically, the 
Commission proposes to require that recipients demonstrate performance 
using a combination of predictive propagation modeling and 
comprehensive on-the-ground measurement testing. The Commission notes 
that comprehensive on-the-ground measurement testing would likely be 
the most accurate measure of performance in a carrier's coverage area; 
however, the scale and cost of relying solely on this method, 
especially to measure performance in particularly difficult terrain, 
may be overly burdensome. Conversely, propagation modeling may offer an 
efficient alternative, with less expense, for predicting performance 
(including download and upload speeds), but such results may not 
accurately reflect coverage and the on-the-ground consumer experience. 
The Commission is mindful that rural areas, which may have few roads 
and difficult terrain, would likely be the most costly areas for a 
carrier to drive test, and such tests still may not reach large areas 
that have coverage but are less accessible for drive tests. The 
Commission's proposal therefore includes a combination of measurement 
testing and carefully defined propagation modeling as a balanced 
approach to achieve reasonable coverage performance verification 
accuracy with reduced costs and logistical burdens. The Commission 
seeks comment on this approach to verifying compliance. The Commission 
notes that Ofcom in the United Kingdom has taken a similar combined 
approach to verifying compliance with coverage performance obligations. 
While Ofcom's specific requirements may be different from those the 
Commission may ultimately adopt, the Commission seeks comment on this 
overall combined approach and

[[Page 31634]]

methodology including coverage prediction of user speeds.
    114. Under the Commission's proposal, 5G Fund support recipients 
would be required to use predictive propagation modeling to generate 
and submit milestone coverage maps showing the areas where 5G service 
has been deployed. While recognizing that carriers' planning 
methodologies may differ somewhat, the Commission proposes to 
standardize many of the propagation model parameters across 5G Fund 
recipients. Specifically, the Commission would require that milestone 
coverage maps must be generated to show cell edge coverage with minimum 
download and upload speeds of 7 Mbps and 1 Mbps, respectively, with 90 
percent probability and 50 percent loading. The Commission also would 
require that milestone maps show where 35 Mbps/3 Mbps or better service 
is available. As part of this proposal, the Commission would also 
require that 5G Fund recipients generate coverage maps that take into 
account terrain and clutter, and use terrain and clutter data with a 
resolution of 100 meters or better. The Commission seeks comment on its 
proposal and these technical specifications. Are there other 
propagation model parameters that would be necessary to standardize for 
5G Fund recipients to show successful deployment or that would improve 
the accuracy of predictive coverage maps? While recipients may use a 
variety of propagation models, including proprietary and non-public 
models, to design and deploy their networks, should the Commission 
require that all support recipients submit coverage maps using a common 
coverage model, such as Irregular Terrain Model (ITM), to validate 
coverage? What are the costs and benefits of such an approach?
    115. The Commission would also require comprehensive on-the-ground 
measurement testing as part of this proposal. Specifically, the 
Commission would require that 5G Fund recipients conduct and submit 
speed test measurement data demonstrating compliance with coverage 
requirements. The Commission proposes to evaluate the sufficiency of 
measurements by first overlaying a uniform grid of one square kilometer 
(1 km by 1 km) grid cells on the carrier's propagation model-based 
coverage maps. The Commission would then require that the measurement 
data include at least three measurements per square kilometer grid cell 
predicted to have coverage to demonstrate compliance with coverage 
requirements. The Commission seeks comment on this testing density, or 
on whether any alternative measurement approach would be better. Under 
the Commission's proposal, each reported speed test would be required 
to include, at a minimum, download speed, upload speed, signal 
strength, latency, and packet loss measurements. Median speeds for 
measured grid cells would be compared to the area for which support was 
awarded. The Commission would require that the median reported speed 
tests show measurements with download and upload speeds of at least 35 
Mbps and 3 Mbps, respectively, in those areas marked as offering such 
service. The Commission would also require that measurements at the 
cell edge show minimum download and upload speeds of 7 Mbps and 1 Mbps, 
respectively, for 90 percent of the cell-edge tests. The Commission 
proposes that at least 96 percent of the speed tests in the cumulative 
speed test data submitted for each construction milestone have a data 
latency of 100 milliseconds or less roundtrip from the device to the 
edge of the service provider network and back. The Commission seeks 
comment on these proposals and the potential burden that may be imposed 
by requiring three measurements per grid cell. To the extent these data 
are burdensome to collect, the Commission seeks comment on the costs 
and benefits of requiring these data, and whether there are 
alternatives to allow the Commission to accurately verify coverage.
    116. The Commission seeks comment on alternative approaches to how 
testing could be performed such that the Commission would have 
confidence that the milestone coverage speeds are met without testing 
every square kilometer of the 5G Fund area. Is it possible to sample 
sufficient drivable or accessible areas and, based on the comparison of 
those results to the coverage map, determine if the Commission can have 
confidence in the full coverage map? What ratio of 1 km by 1 km grid 
cell samples to coverage area would be required to have confidence in 
the predictions of the coverage map? Is it possible, for example, to 
achieve 96 percent or greater confidence in expected user speeds on 
coverage maps, with say 15 percent of the grid cells in a covered area 
with recorded speed test measurements that cover important terrain 
features, and imputed (calculated) median speeds in each of the other 
grid cells in the covered area (85 percent of the area grid cells)? The 
Commission seeks comment on this and alternative measurement methods 
that balance the desire for limiting the cost and complexity of speed 
test measurement campaigns, with the desire for high confidence in the 
resulting maps.
11. Milestone Map Supporting Data
    117. The Commission also proposes to require that 5G Fund 
recipients submit supporting data in addition to their milestone 
coverage maps so that USAC can evaluate and verify compliance with 
coverage performance requirements. The Commission proposes the 
collection of system level data to validate the performance and 
architecture of the funded network. The Commission also proposes to 
require the submission of a complete link budget showing the 
relationship between the coverage map signal strength prediction and 
the required minimum download and upload speeds. Submitted link budgets 
would include all of the parameters necessary to verify the coverage 
map, including signal to noise ratio (SNR) assumptions for downlink and 
uplink per spectrum band. Additionally, the Commission proposes to 
require that 5G Fund recipients submit information on the propagation 
model employed to design the 5G network coverage areas. Would these 
submissions provide sufficient information for milestone report 
validation or should the Commission also require specific network 
information such as information on cell site deployments in the 
coverage areas, including location, antenna height, antenna type, 
antenna gain, antenna orientation, antenna downtilt, antenna multiple-
input and multiple-output (MIMO) configuration, emitted isotropic 
radiated power, operating frequency band(s), channel bandwidth 
(including possible carrier aggregation), Reference Signal Received 
Power (RSRP) signal strength, and any other data required to verify 
coverage maps? If the Commission requires specific cell site deployment 
information, should it also require information on backhaul type, 
backhaul capacity, backhaul oversubscription ratio, and a functional 
network diagram? The Commission further proposes that 5G Fund 
recipients provide a narrative on both cell sites and network 
capacities with traffic engineering assumptions and how the overall 
network, as built, could meet the performance requirements and scale 
for future growth. The Commission seeks comment on these proposals. Are 
these data necessary if the Commission ultimately adopts requirements 
in the Digital Opportunity Data Collection for the same or similar 
information from mobile carriers? How should the Commission align these

[[Page 31635]]

requirements with any future mobile broadband coverage data 
collections?
    118. Alternatively, to avoid transmitting large quantities of 
commercially sensitive service provider proprietary data to USAC, 
should the Commission instead provide 5G Fund recipients a standard 
propagation model (software), e.g., point-to-point Irregular Terrain 
Model (ITM), and user throughput calculation software, so that 5G Fund 
recipients could produce terrain-based coverage maps based on 
parameters that mirror recipients' proprietary software coverage 
predictions without transferring proprietary, site-specific data to 
USAC? The Commission seeks comment on this alternative, including the 
parameters of such modeling and calculation software.
    119. The Commission proposes that these data and maps be submitted 
to USAC by the service milestone reporting deadlines to determine if 
the service milestone has been met. Cumulative data would be used for 
the service milestone determinations in years four, five, and six for 
5G Fund support recipients. For legacy high-cost support recipients, 
cumulative data would be used for the service milestone determinations 
in years two, three, and four. Deployment of service that meets 
established performance requirements may be achieved by a 5G Fund 
support recipient earlier than its interim and final required 
milestones. An area for which successful speed test data has been 
presented at an earlier milestone need not be tested again to show 
continuing compliance with performance requirements; however, the 
Commission proposes that support recipients have an annual obligation 
to certify continuing provision of service meeting the established 
public interest obligations adopted for the 5G Fund. The Commission 
proposes that at least 96 percent of the speed tests in the cumulative 
speed test data submitted for each construction milestone would be 
required to have a download speed of 7 Mbps and 1 Mbps upload speed and 
a latency of no greater than 100 ms roundtrip. The Commission proposes 
that tests must be distributed across all drivable areas of the cell 
coverage area, including both cell center and cell edge where possible. 
The Commission seeks comment on how many measurements, or what 
percentage of total required measurements, must be conducted at the 
cell edge. The Commission proposes requiring that recipients' milestone 
reports include all speed test measurements collected within the 
calendar year ending on the relevant December 31 milestone deadline. 
The Commission seeks comment on these proposals.
12. Coverage Area Measurement Methodology
    120. To verify compliance with milestone deployment, the Commission 
proposes that it would review submitted coverage and speed test data. 
The Commission proposes that speed tests must be conducted using a 
device certified by the 5G Fund recipient as compatible with its 5G 
network. The Commission proposes that each speed test be taken between 
the hours of 6:00 a.m. and 12:00 a.m. (midnight) local time and within 
the calendar year ending on the relevant construction milestone period. 
Should a network load simulator be required to provide sufficient 
comparison to busy hour network congestion? The Commission proposes 
that speed tests must be taken outdoors, and that speed tests would 
only be counted if they fall within the area for which 5G Fund support 
was awarded. While the Commission proposes to require that test data be 
taken outdoors, how should it consider data collected at stationary 
locations versus mobile in-vehicle tests? Because low speed or 
stationary throughput measurements are typically higher than high 
mobility throughput measurements, should the Commission mandate a 
mixture of in-vehicle and stationary measurements? How can the 
Commission ensure that the speed test measurements represent the 
typical user case for the area covered?
    121. The Commission notes that, regardless of the measurement 
methodology employed by a 5G Fund recipient, large areas of the 
recipient's coverage area may not be accessible via road due to the 
rural nature of the target areas. In general, the number of 
measurements across a rural area are likely either to be sparse 
compared to the total area or potentially unduly burdensome to collect. 
Are there methods of testing non-drivable/non-accessible areas, such as 
technological features like minimization of drive testing or 
measurement campaigns conducted via drone, that the Commission should 
consider? What parameters, such as vehicle speed and height above 
ground, should be specified to ensure that the test represents the user 
experience?
13. Testing Measurement Application Development
    122. Speed tests supporting 5G Fund recipients' coverage maps could 
include downlink, uplink, latency, and signal strength measurements and 
be performed using an end-user application that measures performance 
between the mobile device and specified test servers. In support of its 
Measuring Mobile Broadband efforts, the Commission developed and 
released the FCC Speed Test App. This app measures the download and 
upload speed of a given connection in bits-per-second-per-hertz (bps), 
latency, and packet loss by performing data transfer from/to a target 
test node selected from a specified set. The test operates for a fixed 
duration and reports download and upload throughputs and latency 
values. There are many smartphone apps which report signal strength and 
data speeds; however, due to the inherent fluctuations of the RF 
environment, an app that reports instantaneous signal strength or 
download speed does not necessarily represent the overall user 
experience. The Commission seeks comment on specifying apps and 
methodologies that will ensure consistent and comparable measurements. 
Should the Commission consider developing an app to be used to verify 
coverage? Should its use be required, and if so, should there be any 
exceptions to its use, for example if there are features within a 5G 
network that allow for extraction of the performance requirements? The 
Commission seeks comment on these issues.

C. Eligibility Requirements

    123. The Commission proposes requiring parties seeking 5G Fund 
support to satisfy eligibility requirements that are consistent with 
those adopted for Mobility Fund Phase I, CAF Phase II, and the Rural 
Digital Opportunity Fund. The Commission seeks comment on its proposals 
and on any other suggested eligibility requirements. If commenters 
suggest other eligibility requirements, they should be specific and 
explain how those requirements would serve the ultimate goals of the 5G 
Fund. While the Commission proposes eligibility requirements, it also 
seek comment on ways the Commission can encourage participation in 
competitive bidding by the widest possible range of qualified parties.
1. ETC Designations
    124. Only ETCs designated pursuant to section 214(e) of the Act are 
eligible to receive support from the high-cost program. However, 
consistent with the rules adopted for the CAF Phase II auction and the 
Rural Digital Opportunity Fund, the Commission proposes to permit an 
applicant seeking to participate in a 5G Fund auction to be designated 
as an ETC after it is

[[Page 31636]]

announced as a winning bidder for a particular area. For the CAF Phase 
II auction, the Commission did not limit bidding in the auction only to 
ETCs, however, it required all winning bidders to obtain an ETC 
designation that covers all of the areas in which they won support 
prior to being authorized to receive support. The Commission therefore 
proposes that entities applying to bid in a 5G Fund auction would not 
be required to be ETCs at the time of the short-form application filing 
deadline, but that winning bidders would be required, within 180 days 
after the release of the public notice announcing winning bidders, to 
obtain an ETC designation from the relevant state commission, or this 
Commission if the state commission lacks jurisdiction, that covers the 
each of the geographic areas in which they won support. The Commission 
expects that allowing entities that are not ETCs to apply to bid in a 
5G Fund auction may improve competition in the auction by encouraging 
participation from entities that may be hesitant to invest resources in 
applying for an ETC designation without knowing if they would be likely 
to win 5G Fund support.
    125. Similar to the approach taken in the CAF Phase II auction and 
adopted for the Rural Digital Opportunity Fund, the Commission also 
proposes that the Wireline Competition Bureau waive the deadline where 
it determine that a winning bidder has demonstrated good faith efforts 
to obtain its ETC designation(s), but the proceeding has not been 
completed by the deadline. The Commission proposes that good faith 
would be presumed if the winning bidder filed its ETC application with 
the relevant authority within 30 days after the release of the public 
notice announcing winning bidders.
    126. Additionally, the Commission proposes to forbear from the 
statutory requirement that the ETC service area of a 5G Fund winning 
bidder conform to the service area of the rural telephone company 
serving the same area. For Mobility Fund Phase I, the Commission 
forbore from requiring that the service areas of an ETC conform to the 
service area of any rural telephone company serving the same area, 
pursuant to section 214(e)(5) of the Act and Sec.  54.207(b) of the 
Commission's rules. The Commission approved forbearance on the same 
terms for CAF Phase II and the Rural Digital Opportunity Fund. 
Consistent with the approach taken in Mobility Fund Phase I, CAF Phase 
II, and the Rural Digital Opportunity Fund, the Commission proposes 
that for those entities that obtain ETC designations as a result of 
being selected as winning bidders for 5G Fund support, the Commission 
would forbear from applying section 214(e)(5) of the Act and Sec.  
54.207(b) of the Commission's rules. The Commission anticipates that 
forbearing from the service area conformance requirement would 
eliminate the need for redefinition of any rural telephone company 
service areas in the context of a 5G Fund auction.
    127. The Commission seeks comment on its proposals regarding ETC 
designations and forbearance from the service area conformance 
requirement. Commenters should address the three statutory requirements 
for any such forbearance.
2. Spectrum Access
    128. The Commission proposes requiring that an applicant seeking to 
participate in a 5G Fund auction have access to spectrum in an area 
that enables it to satisfy the applicable performance requirements in 
order to receive 5G Fund support for that area. As more fully explained 
in the Commission's proposed pre-auction short-form application 
requirements, the Commission would require an applicant to describe its 
access to spectrum, and to certify that that the description is 
accurate, that it has access to spectrum in the area(s) in which it 
intends to bid, that it has such access to spectrum at the time it 
applies to participate in competitive bidding and at the time it 
applies for support, and that it would retain its access to the 
spectrum through the applicable term of support adopted by the 
Commission for the 5G Fund. The Commission seeks comment on this 
proposal.
3. Financial and Technical Capability
    129. As it has required in other universal service proceedings, the 
Commission proposes requiring an entity to certify that it is 
financially and technically qualified to provide the services supported 
by the 5G Fund within the specified timeframe in the geographic areas 
for which it sought support. Requiring this certification is a 
reasonable protection for the auction process and to safeguard the 
award of universal service funds. As more fully explained in its 
proposed application requirements, the Commission proposes requiring an 
applicant to certify as to its financial and technical qualifications 
in both its pre-auction short-form application and its post-auction 
long-form application. The Commission seeks comment on this proposal.
4. Encouraging Participation
    130. In order to encourage participation in a 5G Fund auction by 
the widest possible range of entities, the Commission proposes to 
permit all qualified applicants to participate in a 5G Fund auction. 
The Commission's commitment to fiscal responsibility requires that it 
distribute the Commission's finite budget to the provider that submits 
the superior, most cost-effective bid in a 5G Fund auction. The 
Commission did not prohibit any particular class of parties from 
participating in Mobility Fund Phase I based on size or other concerns 
or from seeking Mobility Fund Phase I support based solely on a party's 
past decision to relinquish universal service support provided on 
another basis. In order to avoid potentially limiting the Commission's 
ability to close the 5G coverage gap, it proposes to follow the same 
approach here. The Commission expects that its general auction rules 
and procedures would provide the basis for an auction process that 
would promote the Commission's objectives for the 5G Fund and provide a 
fair opportunity for all serious, interested parties to participate. 
The Commission seeks comment on this proposal.
5. Transaction Conditions
    131. With respect to the T-Mobile-Sprint transaction, the 
Commission notes that it required certain commitments as conditions to 
its approval of the transaction. In particular, certain deployment 
commitments were required nationwide, and also in rural areas. 
Specifically, T-Mobile pledged to cover 85 percent of the United 
States' rural population with 5G service within three years of the 
consummation of the transaction, and 90 percent within six years. T-
Mobile further committed that, within three years, two-thirds of the 
rural population would have access to 5G download speeds of at least 50 
Mbps, while over half (55 percent) would have access to 5G download 
speeds of at least 100 Mbps. Within six years of the merger closing 
date, T-Mobile pledged that 5G download speeds of at least 50 Mbps 
would be available to 90 percent of the rural population, while two-
thirds of the rural population would be able to receive 5G service with 
download speeds of at least 100 Mbps.
    132. The Commission tentatively concludes that T-Mobile should not 
be permitted to use any eligible areas for which it might win 5G Fund 
support to fulfill its transaction-specific rural commitments. The 
Commission seeks

[[Page 31637]]

comment on two approaches to implement this tentative conclusion. 
First, because T-Mobile has transaction commitments to cover a certain 
percentage of population rather than specific areas, the Commission 
seeks comment on allowing T-Mobile to make pre-auction binding 
commitments to deploy 5G services in eligible areas within the adopted 
deployment milestones for the 5G Fund without receiving 5G Fund support 
and otherwise prohibiting T-Mobile from participating in the bidding 
process. Would allowing T-Mobile to ``win'' an eligible area before the 
5G Fund auction for $0 align with the Commission's goal of directing 
limited universal service funds to areas that would not otherwise see 
deployment of 5G networks? If the Commission were to allow this, are 
there any restrictions on where T-Mobile should be able to make such 
commitments?
    133. Second, the Commission seeks comment on permitting T-Mobile to 
identify areas before the auction where it intends to deploy 5G service 
and removing these areas from the list of areas eligible to win support 
in the auction. If the Commission were to allow T-Mobile to identify 
such areas, the Commission seeks comment on how to ensure that T-Mobile 
deployed in these areas, including enforcement mechanisms. The 
Commission also seeks comment on whether there should be restrictions 
on which areas T-Mobile may identify, and, if restrictions should be 
adopted, the Commission seeks comment on the specifics of these 
restrictions.
    134. The Commission seeks comment on any other alternatives to 
address the interaction between the T-Mobile merger conditions and the 
Commission's 5G Fund objectives, and asks commenters to provide 
specific implementation ideas to support any alternatives they propose.
    135. Do other carriers have enforceable commitments to deploy 5G? 
If so, what tools does the Commission have to enforce such commitments 
and ensure that they are met? Should these carriers be allowed, similar 
to T-Mobile, to identify these areas to remove them from the auction? 
The Commission seeks comment on these questions and any alternative 
mechanisms to address planned 5G deployment that would ensure that the 
Commission's limited funds are most efficiently targeted to the areas 
most in need of support. Regarding potential future transactions, the 
Commission similarly tentatively concludes that no party may meet any 
5G deployment merger conditions adopted in any other transactions with 
5G Fund support. The Commission seeks comment on using similar 
mechanisms as discussed above for T-Mobile and any alternatives to 
align merger commitments in any potential future transactions with the 
Commission's 5G Fund objectives. The Commission seeks comment on these 
proposals and any alternatives to best take into account existing and 
future transaction conditions in its consideration of awarding 5G Fund 
support.
6. Inter-Relationship With Other Universal Service Mechanisms and 
Obligations
    136. The Commission proposes to allow recipients of other high-cost 
universal service support to participate in a 5G Fund auction. While 
the Commission does not anticipate that it would prohibit applicants 
from participating in a 5G Fund auction merely because they have won 
support through other universal service mechanisms, the Commission 
notes that the goals of 5G Fund are to help ensure the availability of 
mobile voice and broadband services across rural areas of the country. 
The Commission therefore proposes to prohibit a 5G Fund support 
recipient from using 5G Fund support to satisfy any pre-existing high-
cost deployment obligations to fixed locations, to prohibit a recipient 
of other high-cost support from using that support to satisfy its 5G 
Fund deployment obligations. The Commission seeks comment on this 
proposal.

D. Application Process

    137. The Commission proposes to use a two-stage application filing 
process for the 5G Fund, consisting of a pre-auction short-form 
application and a post-auction long-form application. Under this 
proposal, the Commission would require an entity interested in 
participating in a 5G Fund auction to file a short-form application to 
establish its qualifications to participate in the auction, relying 
primarily on the applicant's disclosures as to identity, ownership, and 
agreements, as well as a description of its access to spectrum and 
various applicant certifications. After the short-form application 
deadline, Commission staff would conduct an initial review of the 
short-form applications to determine whether applicants have provided 
the necessary information required at the short-form stage to be 
qualified to participate in the auction. Following this initial review, 
applicants whose short-form applications are deemed incomplete would be 
given a limited opportunity to cure defects and to resubmit corrected 
applications. Only minor modifications to an applicant's short-form 
application would be permitted. Once Commission staff's final review is 
complete, a public notice would be released indicating which applicants 
are deemed qualified to bid in the auction.
    138. After the close of the auction, the Commission would require a 
winning bidder to submit a long-form application with more detailed 
information about its qualifications, funding, and the network it 
intends to use to meet its public interest obligations and performance 
requirements, to allow Commission staff to conduct a more extensive 
review of the winning bidder's qualifications prior to being authorized 
to receive 5G Fund support. As with the short-form application, 
Commission staff would conduct a review of all timely filed long-form 
applications, afford applicants a limited opportunity to make minor 
modifications to amend their applications or cure defects, and to 
resubmit corrected applications. Once Commission staff completes a 
final review of the long-form applications, a public notice would be 
released identifying each winning bidder that may be authorized to 
receive 5G Fund support. The Commission seeks comment on its proposal, 
and on any alternative approaches.
    139. The Commission also seeks comment on the information it 
proposes to collect from each auction applicant in its short-form 
application and from each winning bidder in its long-form application. 
Consistent with its past practices, the Commission proposes requiring 
an applicant to provide basic information in its short-form application 
to enable the Commission to review and assess whether the applicant is 
qualified to participate in the auction. The Commission also proposes 
and seeks comment on requirements for the long-form application process 
pursuant to which winning bidders would demonstrate that they are 
legally, technically and financially qualified to receive support.
1. Short-Form Application Requirements
    140. Part 1, Subpart AA Rules for Competitive Bidding for Universal 
Service Support. The Commission proposes that its existing Part 1, 
Subpart AA universal service competitive bidding rules should apply to 
an applicant seeking to participate in competitive bidding process for 
5G Fund support so that such applicants would be required to: (1) 
Provide information that would establish their identity, including 
disclosing parties

[[Page 31638]]

with ownership interests and any agreements the applicants may have 
relating to the support to be sought through the competitive bidding 
process, (2) identify its authorized bidders, (3) make various 
universal service support specific certifications, (4) provide any 
additional information that may be required by the Commission in order 
to evaluate an applicant's qualifications to participate in the 
competitive bidding process, and (5) comply with the rule prohibiting 
certain communications during the competitive bidding process.
    141. The Commission also proposes the following revisions to its 
Part 1, Subpart AA rules to codify policies and procedures applicable 
to the auction application process that have been adopted for CAF Phase 
II and the Rural Digital Opportunity Fund, better align provisions in 
Part 1, Subpart AA with like provisions in the Commission's Part 1, 
Subpart Q spectrum auction rules, and make other updates for 
consistency, clarification, and other purposes. The Commission seeks 
comment on these proposals.
    142. Ownership Disclosures. Section 1.21001(b)(1) of the 
Commission's rules requires an applicant to disclose in its application 
the identity of the applicant, including information regarding parties 
that have an ownership or other interest in the applicant. For Mobility 
Fund Phase I, CAF Phase II, and the Rural Digital Opportunity Fund, the 
Commission adopted separate rules specifying that the type of ownership 
information to be provided by applicants is the information required by 
Sec.  1.2112(a) of the Commission's rules. To simplify the ownership 
disclosure requirements for applicants, the Commission proposes to 
revise Sec.  1.21001(b)(1) to specify that the type of ownership 
information to be provided by applicants is the information set forth 
in Sec.  1.2112(a).
    143. Authorized Bidders. The Commission's spectrum auction rules 
prohibit the same individual from serving as an authorized bidder for 
more than one applicant in an auction. This prohibition ensures that an 
individual is not in a position to be privy to bidding strategies of 
more than one entity in a spectrum auction, and therefore not a 
conduit--intentional or unintentional--for bidding information between 
auction applicants. The same concerns that prompted the Commission to 
adopt this prohibition in spectrum auctions exist in the universal 
service auction context. Therefore, to align with the Commission's 
spectrum auction rules and help guard against potential violations of 
the prohibited communications rule, the Commission proposes to revise 
Sec.  1.21001(b)(2) of its rules to prohibit the same individual from 
serving as an authorized bidder for more than one applicant in a 
universal service auction.
    144. Agreement Disclosures; Certification Concerning Agreement 
Disclosures. Section 1.21001(b)(3) of the Commission's rules requires 
applicants to identify all real parties in interest to any agreements 
relating to the participation of the applicant in the competitive 
bidding. Section 1.21001(b)(4) of the Commission's rules requires an 
applicant to certify that its application discloses all real parties in 
interest to any agreements involving the applicant's participation in 
the competitive bidding. To better align the agreement disclosure 
requirement and associated certification for universal service auctions 
with the agreement disclosure requirement in the Commission's spectrum 
auction rules and with the procedures adopted for the CAF Phase II 
auction and the Rural Digital Opportunity Fund, the Commission proposes 
to revise Sec.  1.21001(b)(3) to require an applicant to provide a 
brief description of each agreement it discloses and propose to revise 
Sec.  1.21001(b)(4) to require an applicant to certify that it has 
provided in its application a brief description of, and identified each 
party to, any partnerships, joint ventures, consortia or other 
agreements, arrangements or understandings of any kind relating to the 
applicant's participation in the competitive bidding and the support 
being sought.
    145. Certification Concerning Auction Defaults. Section 
1.21001(b)(7) of the Commission's rules requires an applicant to 
certify that it will make any payment that may be required pursuant to 
Sec.  1.21004 in the event of an auction default. To confirm an 
applicant's understanding that it will be deemed in default and thus 
liable for a payment, the Commission proposes to revise Sec.  
1.21001(b)(7) to also require an applicant to acknowledge, as part of 
making this certification and as a condition of participating in the 
auction, that it will be deemed in default and subject to either a 
default payment or a forfeiture in the event of an auction default.
    146. Due Diligence Certification. Consistent with the requirements 
adopted for the CAF Phase II auction and the Rural Digital Opportunity 
Fund, the Commission proposes requiring an applicant to acknowledge 
through a certification that it has sole responsibility for 
investigating and evaluating all technical and marketplace factors that 
may have a bearing on the level of support it submits as a bid, and 
that if the applicant wins support, it will be able to build and 
operate facilities in accordance with the obligations applicable to the 
type of support it wins and the Commission's rules generally. This 
proposed certification will help ensure that each applicant 
acknowledges and accepts responsibility for its bids and any 
forfeitures imposed in the event of an auction default, and that the 
applicant will not attempt to place responsibility for the consequences 
of its bidding activity on either the Commission or third parties.
    147. Limit on Filing Applications. Consistent with the Commission's 
spectrum auction rules prohibiting the filing of more than one 
application by the same entity or by commonly controlled entities in a 
single auction and with the proposals in the Auction 904 Comment Public 
Notice, 85 FR 15092 (Mar. 17, 2020), the Commission proposes 
prohibiting the filing of more than one application by the same entity 
or by commonly controlled entities in a universal service auction under 
any circumstances. The Commission also proposes definitions for the 
terms ``controlling interest,'' ``consortium,'' and ``joint venture,'' 
which would be used to identify commonly controlled entities for 
purposes of this prohibition and for purposes of an applicant making 
any required auction application certifications. As in its spectrum 
auctions, the Commission proposes that in the case of a consortium, 
each member of the consortium would be considered to have a controlling 
interest in the consortium filing an application for an auction and 
thus a consortium member would not be able to separately file its own 
application to participate in that auction. Consistent with its 
spectrum auction rules and with the proposals in the Auction 904 
Comment Public Notice, the Commission proposes revising Sec.  
1.21001(d) of its rules to specify that if an entity submits multiple 
applications in a single auction, or if entities that are commonly 
controlled by the same individual or same set of individuals submit 
more than one application in a single auction, only one of such 
applications may be found to be complete when reviewed for completeness 
and compliance with the Commission's rules. In the Commission's 
experience in the spectrum auction context, this has helped to minimize 
unnecessary burdens on Commission resources by eliminating the need to 
process

[[Page 31639]]

duplicative, repetitious, or conflicting applications.
    148. Certification Concerning Non-Controlling Interests. Although 
the Commission proposes to prohibit the filing of more than one 
application by commonly controlled entities in a single auction, it 
recognizes that in some circumstances, entities may have non-
controlling interests in other entities and both entities may wish to 
bid in an auction. Insofar as there is no overlap between the employees 
in both entities that leads to the sharing of bidding information, such 
an arrangement may not implicate our concerns over joint bidding among 
separate applicants in an auction. However, such an arrangement could 
allow for the non-controlling interest or shared employee to act as a 
conduit for communication of bidding information unless the applicants 
establish internal controls to ensure that bidding information would 
not flow between them. To address this possibility and ensure that such 
arrangements do not serve or appear to be conduits for information, 
consistent with the Commission's spectrum auction rules, the Commission 
proposes requiring an applicant that has a non-controlling interest 
with respect to more than one application in a single auction to 
certify that it is not, and will not be, privy to, or involved in, in 
any way, the bids or bidding strategy of more than one auction 
applicant and that it has established internal control procedures to 
preclude any person acting on behalf of the applicant from possessing 
information about the bids or bidding strategies of more than one 
applicant or communicating such information with respect to either 
applicant to another person acting on behalf of and possessing such 
information regarding another applicant.
    149. Prohibition on Joint Bidding Arrangements; Prohibited 
Communications Rule. In view of the Commission's proposal to prohibit 
commonly controlled entities from filing more than one application in a 
single auction, no pro-competitive basis for permitting joint bidding 
arrangements between or among auction applicants (including any party 
that controls or is controlled by an applicant) is readily apparent. 
Conversely, joint bidding arrangements between or among such entities 
enhance the risk of undesirable strategic bidding during auctions. 
Therefore, consistent with the Commission's practice in spectrum 
auctions and with the proposals in the Auction 904 Comment Public 
Notice, the Commission proposes to revise Sec.  1.21002(b) of its rules 
to prohibit applicants from entering into joint bidding arrangements 
relating to their participation in a universal service auction and 
propose to require each applicant to certify in its auction application 
that it has not entered into any explicit or implicit agreements, 
arrangements, or understandings of any kind related to the support to 
be sought other than those disclosed in its application. In connection 
with its proposal to prohibit joint bidding arrangements, the 
Commission proposes to revise the definition of ``applicant'' in Sec.  
1.21002(a) and to define ``bids or bidding strategies.''
    150. The Commission also proposes other revisions to Sec.  1.21002 
to better align with its spectrum auction rules and the proposals made 
herein. The Commission proposes requiring an applicant that has a non-
controlling interest with respect to more than one application to 
implement internal controls that preclude any person acting on behalf 
of the applicant from possessing information about the bids or bidding 
strategies of more than one applicant or communicating such information 
with respect to either applicant to another person acting on behalf of 
and possessing such information regarding another applicant. The 
Commission also proposes requiring an applicant to modify its 
application for an auction to reflect any changes in ownership or in 
membership of a consortium or a joint venture or agreements or 
understandings related to the support being sought.
    151. Additionally, the Commission proposes clarification and 
accuracy revisions to Sec.  1.21002 concerning the procedure for 
reporting a prohibited communication.
    152. Additional Application Requirements Specific to 5G Fund 
Auction Applicants. In addition to providing the information required 
in Part 1, Subpart AA of the Commission's rules, consistent with the 
short-form requirements for Commission spectrum and universal service 
support auctions, the Commission proposes requiring applicants to also 
provide the following 5G Fund specific information in their short-form 
applications.
    153. Technical and Financial Qualifications Certification. The 
Commission proposes to require a 5G Fund auction applicant to certify 
that it is technically and financially capable of meeting the 5G Fund 
public interest obligations and performance requirements in each area 
for which it seeks support. The Commission required Mobility Fund Phase 
I and CAF Phase II auction applicants to certify in their short-form 
applications that they were technically and financially capable of 
meeting the relevant public interest obligations in each area for which 
they sought support, and has adopted a requirement for Rural Digital 
Opportunity Fund auction applicants to make this same certification. 
The Commission seeks comment on this proposal.
    154. Status as an Eligible Telecommunications Carrier. Although it 
proposes herein not to require an applicant to obtain an ETC 
designation prior to applying to participate in a 5G Fund auction, the 
Commission proposes requiring each applicant to disclose in its short-
form application its status as an ETC in any area for which it will 
seek 5G Fund support or as an entity that will become an ETC in any 
such area after if it is a winning bidder for 5G Fund support, and to 
certify that its disclosure is accurate. The Commission required CAF 
Phase II auction applicants to make the same disclosure and 
certification and adopted a requirement for Rural Digital Opportunity 
Fund auction applicants to do so as well. The Commission also proposes 
to require an applicant to disclose in the short-form application any 
study area codes (SACs) associated with an applicant (or its parent 
company) if the applicant indicates it is currently an ETC. The 
Commission seeks comment on this proposal.
    155. Access to Spectrum. In connection with the Commission's 
proposed eligibility requirements relating to spectrum access, it 
proposes requiring an applicant to describe the spectrum access it 
plans to use to meet its 5G Fund public interest obligations and 
performance requirements in the particular area(s) for which it intends 
to bid, and to certify that the description is accurate and that the 
applicant will retain its access to the spectrum for at least 10 years 
from the date support is authorized. The Commission would require an 
applicant to: (1) Disclose whether it currently holds or leases the 
spectrum, (2) identify the license applicable to the spectrum to be 
accessed, the type of service covered by the license, the particular 
frequency band(s), the call sign, and any necessary renewal expectancy, 
and (3) indicate whether such spectrum access is contingent on 
obtaining support in a 5G Fund auction. Because an applicant must have 
access to spectrum in all areas for which it will bid for support, the 
Commission proposes requiring that, as part of its spectrum access 
certification, an applicant also certify that it has access to spectrum 
in the area(s) in which it intends to bid in each state and/or Tribal 
land area selected in

[[Page 31640]]

its application (i.e., certify that the geographic scope of the 
applicant's access covers the entire area for which the applicant 
intends to bid). Specifically, the Commission proposes requiring an 
applicant to make the following certification in its short-form 
application under penalty of perjury:

    The applicant has access to spectrum in each area in which it 
intends to bid for support within each state and/or Tribal land area 
selected in this application, the applicant will retain such access 
for at least ten (10) years after the date on which it is authorized 
to receive support, and the description of spectrum access in the 
area(s) for which the applicant intends to bid for support provided 
in this application is accurate.

The Commission would also require an applicant to have obtained any 
necessary approvals from the Commission for the required spectrum 
access prior to submitting a 5G Fund auction application for the 
described spectrum access to be considered sufficient. The Commission 
seeks comment on this proposal.
    156. Given that 5G Fund support would be awarded to advance the 
deployment of 5G service, the spectrum an applicant plans to use to 
meet its 5G Fund public interest obligations and performance 
requirements must be capable of supporting 5G service as it is defined 
in the performance requirements the Commission proposes to adopt for 5G 
Fund support. The Commission therefore proposes that entities seeking 
to receive support from the 5G Fund have access to spectrum and 
sufficient bandwidth (at a minimum, 10 megahertz x 10 megahertz using 
frequency division duplex (FDD) or 20 megahertz using time division 
duplex (TDD)) capable of supporting 5G services. The Commission notes 
that 3GPP, Release 16 has finalized various frequency bands for North 
America that appear to be capable of supporting 5G. The Commission 
seeks comment on whether there is other spectrum (licensed or 
unlicensed) that it should also consider appropriate to support 5G 
services. Commenting parties should specifically describe how such 
other spectrum would support reliable, proven, commercially viable 5G 
service--e.g., how the commenting party is currently using that 
spectrum to provide 5G mobile broadband service and/or how that 
spectrum is currently being used in the marketplace to provide 5G based 
mobile broadband service.
    157. Technical and Financial Qualifications. Similar to the 
approach taken for the CAF Phase II auction and adopted for the Rural 
Digital Opportunity Fund, the Commission proposes establishing two 
pathways for an applicant to demonstrate its technical and financial 
qualifications to participate in a 5G Fund auction. The Commission 
would first require an applicant to indicate in its application whether 
it has been providing mobile wireless voice and/or mobile wireless 
broadband service for at least three years prior to the short-form 
application deadline (or that it is a wholly-owned subsidiary of an 
entity that has been providing such service for at least three years) 
to determine which pathway the applicant would need to take.
    158. Applicants That Have Been Providing Mobile Wireless Service 
for at Least Three Years. If an applicant indicates that it has been 
providing mobile wireless voice and/or mobile wireless broadband 
service to end user subscribers for at least three years prior to the 
short-form application deadline (or is a wholly owned subsidiary of an 
entity that has been providing such service for at least three years), 
the Commission would require the applicant to (1) specify the number of 
years it (or its parent company, if it is a wholly owned subsidiary) 
has been providing such service, (2) certify that it (or its parent 
company, if it is a wholly owned subsidiary) has filed FCC Form 477s as 
required during that time period, and (3) provide any FCC Registration 
Numbers (FRNs) that the applicant or its parent company (and in the 
case of a holding company applicant, its operating companies) have used 
to submit mobile wireless voice and/or mobile wireless broadband data 
with FCC Form 477 data for the past three years. Data regarding where a 
service provider offers mobile wireless voice and/or mobile wireless 
broadband service, the number of mobile wireless voice and/or mobile 
wireless broadband subscribers it has, and the mobile wireless 
broadband speeds it offers would provide insight into an applicant's 
experience in providing such service and could help Commission staff 
determine whether an applicant can reasonably be expected to be capable 
of meeting the 5G Fund public interest obligations and performance 
requirements. The Commission expects that it would generally be 
sufficient to review FCC Form 477 data from only the past three years 
because those data would reflect the services that the applicant is 
currently offering or recently offered and would illustrate the extent 
to which an applicant was able to scale its network in the recent past. 
The Commission seeks comment on this proposal. The Commission also 
seeks comment on whether the applicant should be required to submit 
other information to enable the Commission to assess its technical and 
financial qualifications.
    159. Applicants That Have Been Providing Mobile Wireless Service 
for Fewer Than Three Years, or Not At All. If an applicant indicates 
that it has not been providing mobile wireless voice and/or mobile 
wireless broadband service for at least three years prior to the short-
form application deadline (or is not a wholly owned subsidiary of an 
entity that has been providing such service for at least three years), 
the Commission proposes to collect certain high-level operational 
history, technical, and financial information from the applicant to 
enable Commission staff to determine whether the applicant can 
reasonably be expected to be capable of meeting the 5G Fund public 
interest obligations and performance requirements.
    160. The Commission proposes requiring an applicant that has not 
been providing mobile wireless voice and/or mobile wireless broadband 
service to end user subscribers for at least three years to submit 
information concerning its operational history and a preliminary 
project description. The information an applicant would be required to 
provide concerning its operational history would provide an opportunity 
for an applicant that is currently providing mobile wireless voice and/
or mobile wireless broadband service to end user subscribers but for 
fewer than three years to describe its experience. The technical 
information an applicant would provide in a preliminary project 
description would be designed to obtain information about the network 
to be built or upgraded by the applicant and the technologies the 
applicant plans to use to provide mobile wireless broadband service in 
order to confirm that the applicant has developed a preliminary network 
design plan and/or business case for meeting its 5G Fund public 
interest obligations and performance requirements. Because the 
Commission expects that applicants will already have started planning 
to deploy the required mobile wireless voice and mobile wireless 
broadband services upon authorization of 5G Fund support, the 
Commission does not anticipate that it would be unduly burdensome to 
respond to these questions. Consistent with the procedures adopted for 
the CAF Phase II auction, the Commission proposes to treat the 
information submitted by an applicant concerning its operational 
history and its preliminary project description, along

[[Page 31641]]

with any associated supporting information, as confidential, and would 
withhold such information from routine public inspection both during 
and after a 5G Fund auction.
    161. The Commission also proposes to require an applicant that has 
not been providing mobile wireless voice or mobile wireless broadband 
service for at least three years to submit the following financial 
information: (1) A letter of interest from a qualified bank stating 
that the bank would provide a letter of credit to the applicant if the 
applicant becomes a winning bidder for bids of a certain dollar 
magnitude, as well as the maximum dollar amount for which the bank 
would be willing to issue a letter of credit to the applicant, and (2) 
a statement that the bank would be willing to issue a letter of credit 
that is substantially in the same form as set forth in the model letter 
of credit provided in Appendix D to the NPRM. The Commission proposes 
requiring that the bank issuing the letter of interest meet the 
acceptability requirements proposed in the NPRM for banks issuing 
letters of credit to 5G Fund winning bidders. The Commission seeks 
comment on this proposal, and on whether it should provide an 
alternative (e.g., submission of audited financial statements) in the 
event an applicant is unable to obtain a letter of interest.
    162. Requiring a potential bidder to submit evidence in its short-
form application that it can meet the 5G Fund public interest 
obligations and performance requirements in the area(s) for which it 
seeks 5G Fund support will help safeguard consumers from situations 
where bidders unable to meet such obligations divert support from 
bidders that can meet them. The information the Commission proposes to 
collect in the short-form application from an applicant that has been 
providing service for fewer than three years is designed to enable 
Commission staff to assess that applicant's technical and financial 
qualifications to bid for 5G Fund support and to meet the 5G Fund 
public interest obligations and performance requirements, while at the 
same time minimizing the burden on applicants and Commission staff. The 
Commission seeks comment on its proposals, and on whether it should 
consider collecting other information that would enable the Commission 
to assess an applicant's technical and financial qualifications.
    163. The Commission recognizes that if it were to adopt these 
requirements, it would potentially be precluding interested bidders 
that are unable to meet these requirements from participating in an 
auction for 5G Fund support. Commenters proposing alternative 
requirements for demonstrating an applicant's technical and financial 
qualifications to participate in a 5G Fund auction should explain how 
their approach would similarly serve to further the Commission's 
responsibility to implement safeguards to ensure the public's funds are 
being provided to entities that have the requisite operational and 
financial qualifications and to protect consumers in rural and high-
cost areas against being stranded without a service provider in the 
event a winning bidder or long-form applicant defaults.
    164. As in any Commission auction for universal service fund 
support, the Commission seeks to balance the burdens on 5G Fund auction 
applicants of completing a short-form application with the Commission's 
statutory obligation to protect universal service funds, the integrity 
of the auction, and rural consumers. The Commission seeks comment on 
the information it proposes to collect concerning an applicant's 
technical and financial qualifications.
2. Amendments to Red Light Rule for Universal Service Auctions
    165. The Commission adopted rules, including a provision referred 
to as the ``red light rule,'' that implement the Commission's 
obligation under the Debt Collection Improvement Act of 1996, which 
govern the collection of debts owed to the United States, including 
debts owed to the Commission. Under the red light rule, applications 
and other requests for benefits filed by parties that have outstanding 
debts owed to the Commission will not be processed. Applicants seeking 
to participate in a universal service auction are subject to the 
Commission's red light rule. Pursuant to the red light rule, unless 
otherwise expressly provided for, the Commission will withhold action 
on an application by any entity found to be delinquent in its debt to 
the Commission.
    166. Concluding that robust participation would be critical to the 
success of the CAF Phase II auction, the Commission provided a limited 
waiver of the red light rule for any Auction 903 applicant seeking to 
participate in the auction that was red lighted for debt owed to the 
Commission at the time it timely filed its short-form application. The 
limited waiver adopted for the CAF Phase II auction provided a red 
lighted applicant seeking to participate in that auction until the 
close of the application resubmission filing window to pay any debt(s) 
associated with the red light. Under this approach, if an applicant had 
not resolved its red light issue(s) by the close of the initial 
application filing window, its application would be deemed incomplete, 
and if the applicant had not resolved its red light issue(s) by the 
close of the application resubmission window, Commission staff would 
immediately cease all processing of the applicant's short-form 
application, and the applicant would be deemed not qualified to bid in 
the auction.
    167. Because the Commission considers robust participation to be 
critical to the success of any universal service auction, including a 
5G Fund auction, the Commission proposes to amend the Commission's 
rules to codify the relief granted by the CAF Phase II auction limited 
waiver to provide an applicant seeking to participate in any universal 
service auction the opportunity to resolve its red light issue(s) by 
the close of the application resubmission filing window. The Commission 
proposes no further opportunity for an applicant to cure any red light 
issue beyond what it describes here. The amendments the Commission 
proposes would not waive or otherwise affect the Commission's right or 
obligation to collect any debt owed to the Commission by a universal 
service auction applicant by any means available to the Commission, 
including set off, referral of debt to the United States Treasury for 
collection, and/or by red lighting other applications or requests filed 
by the affected auction applicant. The Commission seeks comment on this 
proposal.
3. Long-Form Application Requirements
    168. The Commission proposes that its existing Part 1, Subpart AA 
universal service competitive bidding rules apply to 5G Fund auction 
winning bidders applying for 5G Fund support. Consistent with the post-
auction long-form requirements for the Mobility Fund Phase I and CAF 
Phase II auctions, and with the requirements adopted for the Rural 
Digital Opportunity Fund, The Commission proposes requiring 5G Fund 
auction winning bidders to provide the following categories of 
information in their post-auction long-form applications.
    169. Ownership Disclosures. The Commission proposes requiring a 
winning bidder to disclose in its long-form application ownership 
information as set forth in Sec.  1.2112(a) of the Commission's rules. 
The Commission anticipates that wireless carriers that have 
participated in spectrum license auctions will already be familiar with 
this disclosure requirement. These companies will also have ownership

[[Page 31642]]

disclosure reports (in the short-form application or FCC Form 602) on 
file with the Commission, which may simply need to be updated, 
minimizing the reporting burden on winning bidders. The Commission 
seeks comment on this proposal.
    170. Agreement Disclosures. The Commission proposes requiring a 
winning bidder to provide in its long-form application any updated 
information regarding the agreements, arrangements, or understandings 
related to its 5G Fund support disclosed in its short-form application. 
A winning bidder may also be required to disclose in its long-form 
application the specific terms, conditions, and parties involved in any 
agreement into which it has entered and the agreement itself. The 
Commission seeks comment on this proposal.
    171. ETC Designation. Consistent with the provider eligibility 
requirements proposed for the 5G Fund, the Commission proposes to 
permit a winning bidder to obtain its ETC designation after the close 
of the auction, provided that it submits proof of its ETC designation 
within 180 days after the release of the public notice identifying 
winning bidders. The Commission proposes requiring that a winning 
bidder submit appropriate documentation of its ETC designation in all 
the areas for which it will receive support in its long-form 
application, or certify that it will do so within 180 days of the 
public notice identifying winning bidders. The Commission also proposes 
requiring a winning bidder to demonstrate that it has been designated 
an ETC covering each of the geographic areas for which it seeks to be 
authorized for support and that its ETC designation allows it to fully 
comply with the 5G Fund coverage requirements within the time provided 
to meet this requirement before 5G Fund support is authorized. The 
Commission seeks comment on this proposal.
    172. Financial and Technical Capability Certification. As proposed 
for the short-form application, the Commission proposes that a winning 
bidder also be required to certify in its long-form application that it 
is financially and technically capable of providing the required 
coverage and performance levels within the specified timeframe in the 
geographic areas in which it won support. The Commission seeks comment 
on this proposal.
    173. Project Description. The Commission proposes requiring a 
winning bidder to submit for its winning bids a detailed project 
description that describes the network to be built; identifies the 
proposed technology; demonstrates that the project is technically 
feasible; discloses the complete project budget; discusses each 
specific phase of the project (e.g., network design, construction, 
deployment, and maintenance); and includes a complete project schedule 
with timelines, milestones, and costs. The Commission seeks comment on 
this proposal.
    174. Spectrum Access. As proposed for the short-form application, 
the Commission proposes requiring a winning bidder to provide in its 
long-form application a description of the spectrum access that will be 
used to meet its obligations in areas for which it is the winning 
bidder, including whether it currently holds or leases the spectrum, 
the license applicable to the spectrum to be accessed, the type of 
service covered by the license, the particular frequency band(s), and 
the call sign, and any necessary renewal expectancy. The Commission 
would also require the winning bidder to certify that the description 
is accurate, that it has access to spectrum in the area(s) for which it 
is applying for support, and that it will retain such access for the 
entire 10-year support term. The Commission seeks comment on this 
proposal.
    175. Certifications as to Program Requirements. The Commission 
proposes requiring a winning bidder to make various certifications in 
its long-form application as to program requirements. Specifically, the 
Commission proposes requiring a winning bidder to certify that it has 
the funds available for all project costs that exceed the amount of 
support to be received and that it will comply with all program 
requirements, including the public interest obligations and performance 
requirements adopted for the 5G Fund. The Commission also proposes 
requiring a winning bidder to certify that it will meet the applicable 
deadlines and requirements for demonstrating interim and final 
construction milestones adopted for the 5G Fund, and will comply with 
the data speed, data latency, data allowance, collocation, voice and 
data roaming, and reasonably comparable rate performance requirements 
and public interest obligations adopted for the 5G Fund. The Commission 
seeks comment on these proposed certifications, and on whether there 
are any other program related certifications it should require.
    176. Additional Information. Similar to what the Commission is 
afforded under its Part 1, Subpart AA rules for competitive bidding for 
universal service support for short-form applications, the Commission 
proposes to adopt a rule that would permit the Commission to request 
from winning bidders in connection with its review of long-form 
applications such additional information as the Commission may require 
to determine whether an applicant should be authorized to receive 5G 
Fund support. The Commission seeks comment on this proposal.
4. Support Authorization Requirements and Steps
    177. Submission of letter of Credit, Opinion Letter, and Final ETC 
Designation. The Commission proposes that before being authorized for 
support, a winning bidder must submit (1) an irrevocable standby letter 
of credit issued by a bank that is acceptable to the Commission in 
substantially the same form as set forth in the model letter of credit 
provided in Appendix C of the Rural Digital Opportunity Fund Report and 
Order, and that is otherwise acceptable in all respects to the 
Commission, (2) a legal counsel's opinion letter stating that the funds 
secured by the letter of credit will not be considered to be part of 
the recipient's bankruptcy estate in the event of a bankruptcy 
proceeding under Section 541 of the Bankruptcy Code, and (3) any final 
ETC designation that the winning bidder may still require. These 
safeguards will allow the Commission to use a letter of credit to 
resolve a failure to repay after non-compliance. In addition, to ensure 
uniformity and transparency across the Commission's high-cost universal 
service rules, the Commission also proposes to amend its letter of 
credit rules for other universal service fund programs to expand the 
definition of branch offices of non-United States banks that are 
considered eligible to issue letters of credit. The Commission seeks 
comment on these proposals. Should the Commission also consider any 
other non-United States bank branch office as specifically eligible to 
issue a letter of credit, if the bank's branch office is accessible to 
the USAC and will accept a letter of credit presentation from USAC via 
overnight courier, in addition to in-person presentations?
    178. The Commission recognizes, however, that there may be a need 
for greater flexibility regarding letters of credit for Tribally-owned 
and -controlled winning bidders, and that it may need to provide a 
mechanism for such entities to petition for a waiver of the letter of 
credit requirement if they are unable to obtain a letter of credit, as 
the Commission did for the Rural Broadband Experiments and CAF Phase

[[Page 31643]]

II, and as the Commission has adopted for the Rural Digital Opportunity 
Fund. While the Commission expects to follow the same approach on this 
topic that it adopted for the Rural Digital Opportunity Fund, the 
Commission nonetheless invites comment on potentially providing a 
letter of credit waiver opportunity for Tribally-owned and -controlled 
winning bidders in a 5G Fund auction.
    179. Letters of Credit. The Commission proposes to adopt here the 
same letter of credit rules it adopted for the Rural Digital 
Opportunity Fund, inclusive of guidance provided by the Wireline 
Competition Bureau, in coordination with the Rural Broadband Auctions 
Task Force and the Office of Economics and Analytics, in a recent 
public notice, DA 20-307 (Mar. 20, 2020), regarding the eligibility of 
non-United States banks to issue letters of credit. As the Commission 
has previously explained, requiring all long form applicants to obtain 
a letter of credit is ``an effective means for accomplishing [the 
Commission's] role as stewards of the public's funds'' because they 
``permit the Commission to immediately reclaim support'' from support 
recipients that are not meeting their auction obligations. The letter 
of credit requirements the Commission proposes for the 5G Fund will 
establish a mechanism to recover disbursed funding efficiently in the 
event of non-compliance and fulfill the Commission's responsibility to 
protect program funds, while also reducing the costs for applicants to 
participate in the 5G Fund.
    180. Specifically, the Commission proposes that prior to being 
authorized for support, a 5G Fund long-form applicant must obtain a 
letter of credit equal to one year of the total support it would 
receive. Prior to the beginning of Year Two, the Commission proposes to 
require a 5G Fund support recipient to obtain a letter of credit equal 
to eighteen months of its total support. Prior to the beginning of Year 
Three, the Commission proposes to require that it obtain a letter of 
credit equal to two years of its total support. The Commission further 
proposes to require that a support recipient obtain a letter of credit 
equal to three years of total support until such time as USAC verifies 
that it has met the established performance requirements for deployment 
of service by its initial interim service milestone, i.e., as proposed 
herein, to at least 40 percent of the total square kilometers 
associated with the eligible areas for which it is authorized to 
receive 5G Fund support in a state by the end of the third full 
calendar year following support authorization.
    181. For a support recipient that misses its interim service 
milestone by the end of the third full calendar year following funding 
authorization, the Commission proposes to require it to maintain a 
letter of credit covering a total of three years of support until such 
time as USAC verifies it has met its deployment obligations. Likewise, 
the Commission proposes that any support recipient failing to meet two 
or more service milestones (that is, failing to catch up after missing 
a first service milestone and remaining behind the required percentage 
of square kilometers deployment at the next service milestone deadline) 
will be required to maintain a letter of credit in the amount of three 
years of support and will be subject to additional non-compliance 
penalties as outlined below. The Commission anticipates that these 
letter of credit requirements would both protect federal funds from 
potential non-compliance and serve as an incentive to timely 
deployment.
    182. On the other hand, for a support recipient that meets its Year 
Three Interim Service Milestone, the Commission proposes to allow it to 
reduce the amount of support covered by its letter of credit. 
Specifically, consistent with the rules it adopted for the Rural 
Digital Opportunity Fund, the Commission proposes to allow a 5G Fund 
support recipient to reduce the amount of its letter of credit after it 
meets--and USAC verifies that it has completed--its initial Year Three 
Interim Service Milestone. Upon verification by USAC that the support 
recipient has met the established performance requirements for 
deployment of service by its interim service milestone, i.e., as 
proposed herein to at least 40 percent of the total square kilometers 
associated with the eligible areas for which it is authorized to 
receive 5G Fund support in a state by the end of the third full 
calendar year following authorization of support, the Commission 
proposes to allow the recipient to reduce its letter of credit to an 
amount equal to one year of total support. Once a support recipient 
reduces its letter of credit value to one year of total support, the 
Commission proposes to allow it to maintain its letter of credit at 
that level for the remainder of the service milestones, as long as USAC 
verifies that the support recipient successfully and timely meets its 
remaining service milestone obligations.
    183. Additionally, the Commission proposes to adopt an accelerated 
approach for a 5G Fund support recipient to reduce its letter of credit 
to an amount equal to only one year of total support if it meets, and 
USAC verifies it has met, the Optional Year Two Interim Service 
Milestone of providing service that meets the established 5G Fund 
performance requirements to at least 20 percent of the total square 
kilometers associated with the eligible areas for which it is 
authorized to receive support in a state by the end of the second full 
calendar year following support authorization.
    184. The Commission proposes to require that a 5G Fund support 
recipient maintain a letter of credit until it has certified, and USAC 
has verified, that it has provided service that meets the established 
5G performance requirements to at least 85 percent of the total square 
kilometers associated with the eligible areas for which it is 
authorized to receive support in a state, and at least 75 percent of 
the total square kilometers in each eligible census tract in a state, 
by the Year Six Final Service Milestone at the end of the sixth full 
calendar year following authorization of support. Consistent with the 
approach adopted for CAF Phase II and the Rural Digital Opportunity 
Fund, the Commission also propose that 5G Fund support recipients may 
be subject to other if they do not comply with the public interest 
obligations or any other terms and conditions associated with receiving 
5G Fund support, including but not limited to the Commission's existing 
enforcement procedures and penalties, reductions in support amounts, 
revocation of ETC designations, and suspension or debarment.
    185. In short, the Commission proposes a letter of credit 
trajectory that recognizes that once support recipients have 
demonstrated significant and verifiable steps toward meeting their 
deployment obligations, they should have the opportunity to avoid some 
of the more costly letter of credit requirements. The Commission 
anticipates that accelerated and reduced letter of credit options 
should reduce the costs of procuring letters of credit by 5G support 
recipients. For instance, in keeping with the Commission's proposals, a 
5G Fund support recipient that elects to deploy quickly and meets the 
Optional Year Two Interim Service Milestone would never need to 
maintain a letter of credit that covered more than 18 months' of its 
total support, assuming it continues to meet all of its service 
milestones.
    186. The Commission proposes that a 5G Fund long-form applicant 
obtain an irrevocable stand-by letter of credit that must be issued in 
substantially the same form as set forth in Appendix D to the

[[Page 31644]]

NPRM and that a long-form applicant submit a bankruptcy opinion letter 
from outside legal counsel prior to being authorized to begin receiving 
5G Fund support. The Commission also proposes to require that the 
letter of credit be issued by a bank that meets the same bank 
eligibility requirements adopted for the Rural Digital Opportunity 
Fund.
    187. The Commission seeks comment on these proposals, whether the 
phase-down approach is an appropriate balancing of the costs and 
benefits of the letter of credit requirement, and on whether any 
adjustments should be made to the proposed letter of credit rules for 
the 5G Fund.
    188. The Commission also seeks comment on whether it should make 
any changes to streamline the Commission and USAC's review and 
administration of letters of credit. For example, the Rural Digital 
Opportunity Fund auction rules require a long-form applicant to submit 
a single letter of credit that covers all the winning bids in a state. 
Should 5G Fund long-form applicants be required to submit one letter of 
credit that covers all the winning bids in a state to reduce the number 
of letters of credit that USAC and the Commission must review and track 
throughout the build-out period? The Commission seeks comment on these 
issues and on whether any other adjustments are appropriate, including 
adjustments to timing or the process for submitting letters of credit 
to USAC for review.
    189. Finally, the completion of prior universal service auctions, 
including the Mobility Fund Phase I and the CAF Phase II auctions, 
provide a basis for lessons learned that can inform the letter of 
credit requirements in the 5G Fund. The Commission observed in these 
prior auction processes that companies with existing lending 
relationships often use letters of credit in the normal course of 
operating their businesses and, generally, are able to maintain 
multiple forms of financing for varying purposes. On the other hand, 
the Commission also found that winning bidders complained of the high 
cost of obtaining and maintaining a letter of credit. The Commission 
therefore seeks comment on whether it should decline to require a 
letter of credit for the 5G Fund. Are there viable, less costly 
alternatives that still minimize risk to public funds?
    190. Opinion Letter. Consistent with its requirements for past 
universal service fund auctions, the Commission proposes that a winning 
bidder must also submit with its letter(s) of credit an opinion letter 
from legal counsel. The Commission proposes that the opinion letter 
must clearly state, subject only to customary assumptions, limitations, 
and qualifications, that in a proceeding under the Bankruptcy Code, the 
bankruptcy court would not treat the letter of credit or proceeds of 
the letter of credit as property of the account party's bankruptcy 
estate, or the bankruptcy estate of any other competitive bidding 
process recipient-related entity requesting issuance of the letter of 
credit under section 541 of the Bankruptcy Code. The Commission seeks 
comment on this proposal, including costs and benefits of such an 
opinion letter.
5. Defaults
    191. The Commission proposes that a default on a winning bid before 
the winning bidder has been authorized to receive 5G Fund support would 
be considered an auction default that would subject the 5G Fund winning 
bidder to a forfeiture payment. The Commission further proposes that 
after a winning bidder has been authorized to receive support, a 
failure to comply with the public interest obligations or any other 
terms and conditions associated with receiving 5G Fund support could 
result in a reduction, loss, or repayment of support, and may subject 
the support recipient to further action, as explained herein.
    192. Forfeiture in the Event of an Auction Default. Consistent with 
the approach taken for CAF Phase II and the Rural Digital Opportunity 
Fund, if a winning bidder is not authorized to receive 5G Fund support 
(e.g., the bidder fails to file or prosecute its long-form application 
or its long-form application is dismissed or denied), the Commission 
proposes that the winning bidder be deemed in default and subject to 
forfeitures. Similar to the approach taken in the CAF Phase II auction 
and adopted for the Rural Digital Opportunity Fund, the Commission 
proposes to subject any 5G Fund winning bidder that is liable for an 
auction default to a $3,000 base forfeiture per violation, subject to 
an upward adjustment based on the criteria set forth in the 
Commission's forfeiture guidelines.
    193. The Commission further proposes that a winning bidder would be 
subject to the $3,000 base forfeiture for each separate violation of 
the Commission's rules, which the Commission would define as any form 
of default with respect to each geographic unit subject to a bid in 
order to ensure that each violation has a relationship to the area 
affected by the auction default, but is not unduly punitive. To ensure 
that any upward adjustment of the $3,000 base forfeiture amount is not 
disproportionate to the overall scope of the winning bidder's bid, the 
Commission proposes to limit any upward adjustment such that the total 
forfeiture that could be owed by a winning bidder would not exceed 15 
percent of its total winning bid amount for the entire 10-year support 
term. Under this approach, a winning bidder deemed to be in default 
would be subject to a base forfeiture amount of $3,000, which could be 
adjusted upward to a total forfeiture amount of 15 percent of its total 
winning bid amount for the entire 10-year support term for each 
separate violation. Notwithstanding the Commission's proposal to limit 
any upward adjustment, in instances where the facts of an auction 
default indicate that a winning bidder engaged in anticompetitive 
behavior, the Commission proposes that the total forfeiture that could 
be owed by winning bidder in such circumstances would be up to the 
amount associated with preservation of service in the applicable area.
    194. Auction defaults undermine the stability and predictability of 
the auction process and impose costs on the Commission and higher 
support costs for the Universal Service Fund. They also hinder the 
disbursement of funds that could have gone to another carrier, and 
thereby further delay the deployment of broadband service offerings in 
unserved areas. Adopting a forfeiture for auction defaults and 
requiring auction applicants to acknowledge in their short-form 
applications that they will be subject to a forfeiture in the event of 
an auction default will impress upon entities that apply to participate 
in a 5G Fund auction the importance of being prepared to meet the 
requirements adopted for the post-auction support authorization 
process, and highlight the need to conduct a due diligence review to 
ensure that they are qualified to both participate in the 5G Fund 
competitive bidding process and to meet the terms and conditions for 
being authorized to receive support if they become winning bidders. The 
Commission seeks comment on this proposal.
    195. Dismissal of Long-Form Application for Failure to Prosecute. 
Section 1.21004(a) of the Commission's rules requires a winning bidder 
in any universal service auction to submit a timely and sufficient 
application for universal service support associated with its winning 
bids and provides that a winning bidder that fails to file an 
application for support or that for any other reason is not authorized 
to receive

[[Page 31645]]

support has defaulted on its winning bids. However, this rule does not 
discuss the timing within which a winning bidder with a pending support 
application must respond to Commission staff requests for additional 
information regarding its application and become authorized for support 
before that winning bidder will be considered to have failed to 
prosecute its application. The rule also does not specify the timing or 
circumstances pursuant to which the Commission can take action to 
dismiss an application for the winning bidder's failure to prosecute 
and deem the winning bidder to be in default. To allow the Commission 
to more efficiently and effectively process pending applications for 
universal service support, and considering lessons learned from the 
Mobility Fund Phase I and CAF Phase II post-auction application 
processes, the Commission proposes to amend Sec.  1.21004 of the 
Commission's rules to add a new rule that permits the Commission to 
dismiss any universal service auction winning bidder's long-form 
application with prejudice and deem the winning bidder to be in default 
if the winning bidder fails to prosecute its long-form application, 
fails to respond substantially within a specified time period to 
official correspondence or requests for additional information, or 
otherwise fails to comply with requirements for becoming authorized to 
receive universal service support. This approach will encourage winning 
bidders to timely and diligently prosecute their long-form applications 
and take the steps necessary to become authorized to receive support, 
and will allow the Commission to efficiently dispose of applications 
for a winning bidder's failure to prosecute its application or 
otherwise comply with the requirements for becoming authorized to 
receive support and in turn deem the winning bidder to be in default. 
The Commission seeks comment on this proposal.
    196. Post-Authorization Non-Compliance Measures. The Commission 
proposes post-authorization non-compliance measures for the 5G Fund 
that are similar to the non-compliance measures and framework for 
support reductions applicable to all high-cost ETCs and the process 
adopted by the Commission for drawing on letters of credit for CAF 
Phase II and Rural Digital Opportunity Fund support recipients. 
Specifically, the Commission proposes to rely on the following non-
compliance tiers for failure to meet the 5G Fund performance 
requirements as of the deadline for each service milestone:

                        Non-Compliance Framework
------------------------------------------------------------------------
          Compliance gap                   Non-compliance measure
------------------------------------------------------------------------
Tier 1: 5% to less than 15%         Quarterly reporting.
 required square kilometers
 coverage.
Tier 2: 15% to less than 25%        Quarterly reporting + withhold 15%
 required square kilometers          of monthly support.
 coverage.
Tier 3: 25% to less than 50%        Quarterly reporting + withhold 25%
 required square kilometers          of monthly support.
 coverage.
Tier 4: 50% or more required        Quarterly reporting + withhold 50%
 square kilometers coverage.         of monthly support for six months;
                                     after six months withhold 100% of
                                     monthly support and recover
                                     percentage of support equal to
                                     compliance gap plus 10% of support
                                     disbursed to date.
------------------------------------------------------------------------

    197. Consistent with the non-compliance framework for CAF Phase II 
and the Rural Digital Opportunity Fund, the Commission proposes that a 
5G Fund support recipient would have the opportunity to move tiers as 
it comes into compliance, and it would receive any support that has 
been withheld if it moves from one of the higher tiers (i.e., Tiers 2-
4) to Tier 1 status (or comes into full compliance) during the service 
milestones. Consistent with what it adopted for the Rural Digital 
Opportunity Fund, the Commission proposes that non-compliance of 50 
percent or more at the Year Three Interim Milestone will result in 
default with no additional time permitted to come back into compliance. 
The Commission proposes that if a support recipient misses the Year Six 
Final Service Milestone, it would have 12 months from the date of the 
Year Six Final Service Milestone deadline within which to come into 
full compliance. If the support recipient is not able to come into full 
compliance with the service deployment requirements after this grace 
period, but has deployed service to at least 80 percent but less than 
the required 85 percent of the total eligible square kilometers in a 
state, the Commission proposes that the support recipient be required 
to pay 1.25 times the average support amount per square kilometer that 
it has received in the state times the number of square kilometers 
unserved, up to the 85 percent coverage requirement. If the support 
recipient has deployed service to at least 75 percent but less than 80 
percent of the total eligible square kilometers in a state, the 
Commission proposes that the support recipient be required to pay 1.5 
times the average support per square kilometer that it has received in 
the state times the number of eligible square kilometers unserved, up 
to the 85 percent coverage requirement, plus 5 percent of its total 10-
year support in the state. If the support recipient has deployed 
service to less than 75 percent of the total eligible square kilometers 
in a state, the Commission proposes that the support recipient be 
required to pay 1.75 times the average support per square kilometer 
that is has received in the state times the number of eligible square 
kilometers unserved up to the 85 percent coverage requirement, plus 10 
percent of total 10-year 5G Fund support for the state. The Commission 
also proposes applying the same support reduction if USAC subsequently 
determines in the course of a compliance review that a support 
recipient did not provide evidence to demonstrate that it was offering 
service at the required performance levels to the square kilometers 
required by the Year Six Final Service Milestone. These proposals are 
consistent with those adopted for the Rural Digital Opportunity Fund, 
with adjustments to account for the fact that the Commission is 
proposing that the Year Six Final Service milestone require service to 
at least 85 percent of the total eligible square kilometers in a state.
    198. The Commission additionally proposes a service deployment 
requirement that by the Year Six Final Service Milestone, a 5G Fund 
support recipient must demonstrate that it provides service aligning 
with the adopted 5G performance requirements established by the 
Commission to least 75 percent of the total square kilometers within 
each biddable area (e.g., census

[[Page 31646]]

block group or census tract) for which it is authorized to receive 
support. If the support recipient is not able to come into full 
compliance with this service deployment requirement after the 12 month 
grace period mentioned above, the Commission proposes that USAC will 
recover an amount of support that is equal to 1.5 times the average 
amount of support per square kilometer that the support recipient had 
received in the eligible area times the number of square kilometers 
unserved within that eligible area, up to the 75 percent requirement.
    199. As was adopted for the Rural Digital Opportunity Fund, the 
Commission proposes that USAC would be authorized to draw on the letter 
of credit for its full value to recover the support covered by the 
letter of credit in the event that a support recipient does not meet 
the relevant service milestones, does not come into compliance during 
the Year Six Final Service Milestone grace period, and does not repay 
the Commission the support associated with the non-compliance gap 
within a certain amount of time. If a support recipient is in Tier 4 
status during the build-out period or has missed the final service 
milestone, and USAC has initiated support recovery as described above, 
the support recipient would have six months to pay back the support 
that USAC seeks to recover. The Commission proposes that if the support 
recipient does not repay USAC by the deadline, the Wireline Competition 
Bureau would issue a letter to that effect and USAC would draw on the 
letter of credit to recover all of the support covered by the letter of 
credit, with any remaining balance due being a debt owed to the 
Commission by the support recipient. If the Commission adopts its 
proposal to allow a support recipient to close its letter of credit 
after certification and verification of its compliance with its Year 
Six Final Service milestone obligations (prior to or at the end of Year 
Six of the support term, as it has proposed), the Commission proposes 
that if a support recipient is later determined to have ceased offering 
service at the required performance levels to the required square 
kilometers of eligible area in a state during the 10-year term of 
support, such a support recipient would be subject to additional non-
compliance measures such as withholding of monthly payments and 
enforcement action if it does not repay the Commission within six 
months. The Commission further proposes that, consistent with other 
high-cost universal service support programs, the failure to comply 
with the public interest obligations or any other terms and conditions 
associated with receipt of 5G Fund support may subject the support 
recipient to the Commission's existing enforcement procedures and 
penalties, reductions in support amounts, potential revocation of ETC 
designation, and/or suspension or debarment.
    200. The Commission seeks comment on these proposals. To the extent 
that commenters recommend any changes to the proposed service 
milestones or other rules, they should also comment on whether their 
proposals would require any changes to these proposed non-compliance 
measures. Commenters should also explain how their proposals encourage 
support recipients to comply with the Commission's rules and accomplish 
the Commission's oversight responsibilities, including protecting the 
integrity of the Universal Service Fund.
    201. Given the inherent differences in deploying networks for 
wireline and mobile wireless broadband services, as an alternative to 
employing a tiered non-compliance framework for the 5G Fund, should the 
Commission consider a simpler approach? Should the failure by a 5G Fund 
support recipient to comply with the public interest obligations or any 
other terms or conditions associated with receipt of 5G Fund support 
result in the immediate withholding of a certain percentage of the 
support recipient's monthly support until such time as the support 
recipient has come into compliance? What percentage would be 
appropriate? Should that amount increase over time and, if so, by what 
percentage? Is there a period of time after which the Commission should 
consider withholding of 100 percent of a support recipient's monthly 
support and should it seek to recover a percentage of support 
previously awarded? If so, what period of time and what percentage of 
awarded support recoupment should the Commission consider? Should this 
amount differ depending upon the nature of the public interest 
obligation or other term or condition associated with the receipt of 
support that the 5G Fund support recipient has failed to meet? The 
Commission seeks comment on this alternative or any other non-
compliance framework it should consider for 5G Fund support recipients 
that fail to meet a public interest obligation or other term or 
condition associated with the receipt of 5G Fund support.
6. Competitive Bidding Mechanisms and Procedures
    202. Consistent with its practice for auctions, the Commission 
proposes to adopt high-level auction rules for the 5G Fund and defer to 
the pre-auction process the determination of the final procedures for a 
5G Fund auction. The Commission has found that this two stage approach 
to establishing competitive bidding procedures--by first defining 
important elements of the basic structure while later considering the 
details that will implement those fundamentals--gives it the 
flexibility needed to integrate its auction objectives and high level 
decisions into a workable and consistent auction process. The 
Commission proposes to adopt its existing Part 1, Subpart AA 
competitive bidding process rules for universal service support for the 
5G Fund. These high-level auction rules for the competitive bidding 
process in auctions for universal service support set out a range of 
options and mechanisms that the Commission may use for such purposes. 
The Commission seeks comment on this proposal.

IV. Procedural Matters

    203. Initial Paperwork Reduction Act Analysis. This NPRM contains 
proposed new information collection requirements. The Commission, as 
part of its continuing effort to reduce paperwork burdens, invites the 
general public and the Office of Management and Budget (OMB) to comment 
on the information collection requirement contained in this document, 
as required by the Paperwork Reduction Act of 1995, Public Law 104-13. 
In addition 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.
    204. Initial Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act of 1980, as amended (RFA), the Commission 
has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the 
possible significant economic impact on a substantial number of small 
entities from the policies and rules proposed in the NPRM. The 
Commission requests written public comment on the 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).

[[Page 31647]]

In addition, the NPRM and IRFA (or summaries thereof) will be published 
in the Federal Register.
    205. 5G mobile wireless networks promise to be the next leap in 
broadband technology, offering significantly increased speeds, reduced 
latency, and better security than 4G LTE networks can offer. 5G mobile 
wireless broadband service is expected to create as many as three 
million new jobs, generate $275 billion in private investment, and add 
$500 billion in new economic growth. The Commission anticipates that 
the progression to 5G service will be swift. Since late 2018, major 
U.S. mobile wireless carriers have lit up 5G networks covering more 
than 200 million Americans in aggregate. And, as part of its recently 
approved transaction, T-Mobile has committed to deploying 5G service to 
99 percent of Americans within six years, including covering 90 percent 
of those living in rural America within that timeframe. The Commission 
is concerned, however, that even with these significant deployment 
commitments, some rural areas will remain where there is insufficient 
financial incentive for mobile wireless carriers to invest in 5G-
capable networks, and those communities could be excluded from the 
technological and economic benefits of 5G for years to come. During 
this transition to 5G service, the Commission therefore reaffirms its 
commitment to using Universal Service Fund support to close the digital 
divide and to make sure that parts of rural America are not left 
behind.
    206. Given the concerns many stakeholders raised about the accuracy 
of Mobility Fund Phase II 4G LTE coverage data, many of which were 
validated during Commission staff's investigation into carriers' maps, 
and in light of the changes taking place in the marketplace, it no 
longer makes sense to use limited universal service support to deploy 
4G LTE networks. Rather, to ensure that all Americans enjoy the 
benefits of the most modern, advanced communications technologies 
offered in the marketplace no matter where they live, and to maintain 
American leadership in 5G, the Commission proposes to establish a 5G 
Fund for Rural America, which would use multi-round reverse auctions to 
distribute up to $9 billion, in two phases, over the next decade and 
beyond to bring voice and 5G broadband service to rural areas of our 
country that are unlikely to see unsubsidized deployment of 5G-capable 
networks. Phase I of the 5G Fund would target at least $8 billion of 
support to rural areas of our country that would be unlikely to see 
timely deployment of voice and 5G broadband service absent high-cost 
support or as part of T-Mobile's transaction-related commitments. To 
balance the Commission's policy goal of efficiently redirecting high-
cost support to the areas where it is most needed with our obligation 
to ensure that we have an accurate understanding of the extent of 
nationwide mobile wireless broadband deployment, the Commission seeks 
comment on two options for identifying areas that would be eligible for 
5G Fund support.
    207. One approach for Phase I could take immediate action to define 
eligible areas based on current data sources that identify areas as 
particularly rural, and thus in the greatest need of universal service 
support. In recognition of the particular challenges of ensuring that 
voice and 5G broadband service are deployed to areas that lack any 
mobile broadband service, the Commission would prioritize areas that 
have historically lacked 4G LTE, or even 3G, service. This would ensure 
that the Commission could move quickly to target universal service 
support to those areas least likely to receive service without support, 
such as those with sparse populations, rugged terrain, or other 
factors. Under this approach, the Commission anticipates commencing the 
5G Fund Phase I auction in 2021.
    208. Alternatively, the Commission could delay the 5G Fund Phase I 
auction until after it collects and processes improved mobile broadband 
coverage data through the Commission's Digital Opportunity Data 
Collection proceeding. Collecting these data would allow the Commission 
to identify with greater precision those areas of the country that 
remain unserved by 4G LTE service. While this option would likely 
result in a less expansive and a more targeted list of eligible areas 
and help ensure prioritization of areas that currently lack service, it 
would potentially delay the start of the 5G Fund Phase I auction and 
deployment of 5G-capable networks in those areas.
    209. Phase II of the 5G Fund would follow the completion of Phase I 
and would target universal service support to bring wireless 
connectivity to harder to serve and higher cost areas, such as farms 
and ranches, and make at least $1 billion available specifically aimed 
at deployments that would facilitate precision agriculture. By 
proposing to rely on a two-phased approach, as it did with the Connect 
America Fund and has adopted for the Rural Digital Opportunity Fund, 
the Commission can commence a 5G Fund Phase I auction while also 
ensuring that Phase II would cover harder-to-serve areas so that such 
areas are not left behind. Moreover, the Commission's proposal to 
implement this two-phased approach would allow it to build upon future 
recommendations from the Commission's Task Force for Reviewing the 
Connectivity and Technology Needs of Precision Agriculture in the 
United States (Precision Agriculture Task Force) to more accurately 
target Phase II support towards services that will meet the growing 
needs of America's farms and ranches.
    210. Full participation in today's society requires that all 
American consumers, not just those living in urban areas, have access 
to the most current and advanced technologies and services available in 
the marketplace. By supporting the build out of 5G mobile broadband 
networks in areas that likely would otherwise go unserved, the 
Commission can help Americans living, working, and travelling in rural 
communities gain access to communication options on par with those 
offered in urban areas.
    211. The Commission's universal service obligations demand that it 
keep pace with changes in the communications marketplace. Similarly, 
the Commission's policy goal must be to use its limited Universal 
Service Fund dollars in rural America to support the deployment of 
service using the most current and advanced technology available 
consistent with what is being offered to urban consumers. The 
Commission's proposals for the 5G Fund recognize that market realities 
have changed since it adopted Mobility Fund Phase II, and that 
supporting the provision of 4G LTE service in unserved and underserved 
areas will not allow the Commission to accomplish this goal. By 
proposing to replace the planned Mobility Fund II with the 5G Fund, the 
Commission seeks to direct universal service funds to support networks 
that are more responsive, more secure, and up to 100 times faster than 
today's 4G LTE networks. The Commission reaffirms its commitment to 
fiscal responsibility and propose concrete performance requirements and 
public interest obligations to ensure that rural consumers would be 
adequately served by the mobile wireless carriers receiving universal 
service support from the 5G Fund. The Commission also proposes to amend 
its generally applicable competitive bidding rules for universal 
service support and to codify recent guidance regarding letters of 
credit for universal service competitive bidding mechanisms.
    212. The legal basis for any action that may be taken pursuant to 
the NPRM is authorized pursuant to sections 4(i),

[[Page 31648]]

214, 254, 303(r), and 403 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 214, 254, 303(r), and 403, and Sec. Sec.  
1.1 and 1.412 of the Commission's rules, 47 CFR 1.1 and 1.412.
    213. 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 which: (1) Is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the SBA.
    214. 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 percent of all businesses in the United 
States which translates to 28.8 million businesses.
    215. 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 tax data filed by nonprofits 
with the Internal Revenue Service (IRS).
    216. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand.'' U.S. Census Bureau data 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.''
    217. The small entities that may be affected are Wireless 
Telecommunications Carriers (except Satellite) and internet Service 
Providers.
    218. In the NPRM, the Commission begins the process of seeking 
comment on rules that will apply to a 5G Fund auction. We propose to 
establish additional public interest obligations, performance 
requirements, and reporting requirements that current mobile legacy 
high-cost support recipients must meet in order to continue receiving 
high-cost support, to ensure that the most advanced mobile services are 
available in all areas where a carrier is currently supported by legacy 
high-cost support. The Commission also proposes to adopt public 
interest obligations and performance requirements for 5G Fund support 
recipients, including data speed and latency requirements, usage 
allowances, and collocation and voice and data roaming obligations. 
Like all high-cost ETCs, the Commission proposes that 5G Fund support 
recipients would be required to offer voice and broadband services 
meeting the relevant performance requirements at rates that are 
reasonably comparable to what they offer in urban areas.
    219. The Commission proposes to adopt a 10-year support term for 5G 
Fund support recipients. The Commission also proposes to adopt three 
interim construction milestones and a final construction milestone at 
which a recipient must demonstrate that it provides 5G service that 
aligns with any adopted performance requirements established by the 
Commission, and seeks comment on whether there are additional measures 
it could adopt that would help ensure that 5G Fund support recipients 
will meet their initial coverage milestone (and subsequent milestones).
    220. The Commission proposes adopting certain eligibility 
requirements for entities that are interested in participating in a 5G 
Fund auction, as well as a two-step application process. The Commission 
proposes requiring applicants to submit a pre-auction short-form 
application that includes information about their ownership, any 
agreements relating to the support to be sought through the auction, 
technical and financial qualifications, current status as an ETC, 
access to spectrum, and an acknowledgement of their responsibility to 
conduct due diligence. Commission staff will review the applications to 
determine if applicants are qualified to bid in the auction.
    221. After the auction ends, the Commission proposes requiring 
winning bidders to submit a post-bidding long-form application in which 
they will submit ownership, agreement, and spectrum access information, 
as well as information about their qualifications, funding, and the 
networks they intend to use to meet their obligations. The Commission 
also proposes requiring winning bidders to obtain and submit 
documentation of an ETC designation from the state or the Commission as 
relevant that covers each of the geographic areas in which they won 
support within 180 days after the release of the public notice 
announcing winning bidders. The Commission proposes that prior to being 
authorized to receive support, winning bidders must submit an 
irrevocable stand-by letter of credit that meets the Commission's 
requirements from an eligible bank along with a bankruptcy opinion 
letter. The letter of credit would cover the support that has been 
disbursed and that will be disbursed in the coming year, subject to 
modest adjustments as support recipients substantially build out their 
networks, until the Commission and the Universal Service Administrative 
Company (USAC) verify that the support recipient has met its service 
milestones. Commission staff will review the long-form applications and 
submitted documentation to determine whether winning bidders are 
qualified to be authorized to receive support. The Commission proposes 
subjecting a 5G Fund winning bidder that defaults during the long-form 
application process to forfeiture.
    222. The Commission also proposes requiring a 5G Fund support 
recipient to submit a modified, renewed, or new letter of credit 
annually to receive its next year's support.
    223. To monitor the use of 5G Fund support to ensure that it is 
being used for its intended purposes, the Commission proposes to 
require a 5G Fund support recipient to file annual certification 
reports certifying its compliance with each of the 5G Fund public 
interest obligations and performance requirements, which

[[Page 31649]]

would be filed in USAC's online High Cost Universal Broadband (HUBB) 
portal. The Commission also proposes to require a 5G Fund support 
recipient to file milestone reports demonstrating that it has met its 
interim and final milestones for deployment of 5G service that meets 
established performance requirements, which would be filed in USAC's 
HUBB portal and USAC's Performance Measurement Module data portal, and 
seek comment on the proposed requirements and procedures for 5G Fund 
recipients to certify and demonstrate compliance with the 5G Fund 
interim and final milestones for deployment of service. The Commission 
further proposes that 5G Fund support recipients collect and submit 
speed test data, in accordance with the guidelines outlined in the 
NPRM, and as developed further in the Commission's Digital Opportunity 
Data Collection proceeding that is considering more broadly applicable 
standards, and that support recipients report these data and make 
related certifications in their milestone reports.
    224. As for other high-cost support recipients, 5G Fund support 
recipients would be subject to record retention and audit requirements, 
and to support reductions for untimely filings. The Commission also 
proposes subjecting a 5G Fund support recipient that fails to meet its 
public interest obligations and/or and performance requirements or 
other terms and conditions of receiving 5G Fund support to a reduction, 
or loss, in support, in accordance with the framework for support 
reductions that is applicable to all high-cost ETCs that are required 
to meet defined service milestones and to the process the Commission 
adopted for drawing on letters of credit for the Connect America Fund 
(CAF) Phase II auction. The Commission seeks comment on alternatives to 
this proposal.
    225. The Commission also seeks comment on a proposed approach to 
incorporating a Tribal lands preference into the 5G Fund auction to 
address the distinct challenges of ensuring that Tribal lands are 
provided with 5G service.
    226. 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 (among others) the 
following four alternatives: ``(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 or 
reporting requirements under the rule for 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 small entities.''
    227. The Commission seeks comment on a number of issues to ensure 
that small entities have the opportunity to participate in a 5G Fund 
auction.
    228. The Commission seeks comment on a two-step application process 
that will allow entities interested in bidding to submit a short-form 
application to be qualified in the auction that the Commission found to 
be an appropriate but not burdensome screen to ensure participation by 
qualified providers, including small entities. Submission of a long-
form application, which requires a more fulsome review of an 
applicant's qualifications to be authorized to receive support, would 
only be required if an applicant becomes a winning bidder. The 
Commission proposes establishing two pathways for an applicant to 
demonstrate its technical and financial qualifications to participate 
in a 5G Fund auction based on its experience providing mobile wireless 
voice and/or broadband service. Entities, including small entities, 
that have been providing mobile wireless voice and/or broadband service 
for at least three years would be required to submit information 
concerning the number of years they have been providing service and 
their FCC Form 477 filings for the past three years, but would not be 
required to submit any other technical or financial information, while 
entities that have been providing such service(s) for fewer than three 
years (or not at all) would need to submit information concerning their 
operational history, a preliminary project description, and an 
acceptable letter of interest from an eligible bank. The Commission 
expects that by proposing to require experienced entities to submit 
less information at the short-form application stage to demonstrate 
their technical and financial qualifications, more entities, including 
small entities, would be able to participate in the auction. The 
Commission also seeks comment on whether it should require applicants 
that have been providing mobile wireless voice and/or broadband service 
for at least three years, which may also include small entities, to 
submit other information to enable the Commission to assess its 
technical and financial qualification.
    229. The Commission expects that all entities, including small 
entities, would benefit from its proposal to permit all winning bidders 
to obtain their ETC designations after becoming winning bidders, so 
that they do not have to go through the ETC designation process prior 
to finding out if they have won support through the auction. 
Recognizing that some participants in the Commission's past universal 
service auctions, including small entities, have expressed concerns 
about the costs of obtaining and maintaining a letter of credit, the 
Commission also comments on whether there are viable alternatives that 
will minimize risk to public funds.
    230. The Commission invites comments from all parties, including 
small entities and participants in its past universal service support 
auctions, on the public interest obligations and performance 
requirements, interim and final construction milestones, reporting 
obligations, and non-compliance measures that it proposes for the 5G 
Fund. The Commission seeks to learn from the experience of small 
entities so that it can balance its responsibility to monitor the use 
of universal service funds with minimizing administrative and 
compliance costs and burdens on 5G Fund participants.
    231. Additionally, the Commission seeks comment on its proposal to 
incorporate a Tribal lands preference into the 5G Fund to address the 
distinct challenges of ensuring that Tribal lands are provided with 5G 
service in order to incentivize carriers, including small entities, to 
bid on and serve Tribal lands.
    232. More generally, the proposals and questions outlined in the 
NPRM are designed to ensure the Commission has a complete understanding 
of the costs, benefits, and potential burdens associated with the 
different actions and methods. The Commission expects to consider the 
economic impact on small entities, as identified in comments filed in 
response to the NPRM and this IRFA, in reaching its final conclusions 
and taking action in this proceeding.
    233. There are no federal rules that duplicate, overlap, or 
conflict with the rules proposed herein.
    234. Ex Parte Rules--Permit-But-Disclose. Pursuant to 1.1200(a) of 
the Commission's rules, 47 CFR 1.1200(a), this document 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).
    235. Persons making oral ex parte presentations are reminded that 
memoranda summarizing the

[[Page 31650]]

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.

V. Ordering Clauses

    1. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 4(i), 214, 254, 303(r), and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 214, 254, 
303(r), and 403, and Sec. Sec.  1.1 and 1.412 of the Commission's 
rules, 47 CFR 1.1 and 1.412, this Notice of Proposed Rulemaking is 
adopted, effective thirty (30) days after publication of the text or 
summary thereof in the Federal Register.
    2. It is further ordered that, pursuant to the authority contained 
in sections 4(i), 214, 254, 303(r), and 403 of the Communications Act 
of 1934, as amended, 47 U.S.C. 154(i), 214, 254, 303(r), and 403, and 
Sec. Sec.  1.1 and 1.412 of the Commission's rules, 47 CFR 1.1 and 
1.412, notice is hereby given of the proposals and tentative 
conclusions described in this Notice of Proposed Rulemaking.
    3. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of the NPRM, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects

47 CFR Part 1

    Administrative practice and procedures, Reporting and recordkeeping 
requirements, Telecommunications.

47 CFR Part 54

    Communications common carriers, internet, Reporting and 
recordkeeping requirements, Telecommunications.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR parts 1 and 54 to 
read as follows:

PART 1--PRACTICE AND PROCEDURE

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

    Authority: 47 U.S.C. chs. 2, 5, 9, 13; 28 U.S.C. 2461, unless 
otherwise noted.

0
2. Amend Sec.  1.1902 by revising paragraph (f) to read as follows:


Sec.  1.1902   Exceptions.

* * * * *
    (f) Nothing in this subpart shall supersede or invalidate other 
Commission rules, such as the part 1 general competitive bidding rules 
(47 CFR part 1, subparts Q and AA) or the service specific competitive 
bidding rules, as may be amended, regarding the Commission's rights, 
including but not limited to the Commission's right to cancel a license 
or authorization, obtain judgment, or collect interest, penalties, and 
administrative costs.
0
3. Amend Sec.  1.21001 by:
0
a. Revising paragraph (b);
0
b. Redesignating paragraphs (c) and (d) as paragraphs (e) and (f), 
respectively;
0
c. Adding new paragraphs (c) and (d); and
0
d. Revising newly redesignated paragraph (f).
    The revisions and additions read as follows:


Sec.  1.21001   Participation in competitive bidding for support.

* * * * *
    (b) Application contents. Unless otherwise established by public 
notice, an applicant to participate in competitive bidding pursuant to 
this subpart shall provide the following information in an acceptable 
form:
    (1) The identity of the applicant, i.e., the party that seeks 
support, and the ownership information as set forth in Sec.  1.2112(a);
    (2) The identities of up to three individuals authorized to make or 
withdraw a bid on behalf of the applicant. No person may serve as an 
authorized bidder for more than one auction applicant;
    (3) The identities of all real parties in interest to, and a brief 
description of, any agreements relating to the participation of the 
applicant in the competitive bidding;
    (4) Certification that the applicant has provided in its 
application a brief description of, and identified each party to, any 
partnerships, joint ventures, consortia or other agreements, 
arrangements or understandings of any kind relating to the applicant's 
participation in the competitive bidding and the support being sought, 
including any agreements that address or communicate directly or 
indirectly bids (including specific prices), bidding strategies 
(including the specific areas on which to bid or not to bid), or the 
post-auction market structure, to which the applicant, or any party 
that controls as defined in paragraph (d)(1) of this section or is 
controlled by the applicant, is a party;
    (5) Certification that the applicant (or any party that controls as 
defined in paragraph (d)(1) of this section or is controlled by the 
applicant) has not entered and will not enter into any partnerships, 
joint ventures, consortia or other agreements, arrangements, or 
understandings of any kind relating to the support to be sought that 
address or communicate, directly or indirectly, bidding at auction 
(including specific prices to be bid) or bidding strategies (including 
the specific areas on which to bid or not to bid for support), or post-
auction market structure with any other applicant (or any party that 
controls or is controlled by another applicant);
    (6) Certification that if the applicant has ownership or other 
interest disclosed with respect to more than one application in a given 
auction, it will implement internal controls that preclude any 
individual acting on behalf of the applicant as defined in Sec.  
1.21002(a) from possessing information about the bids or bidding 
strategies (including post-auction market structure), of more than one 
party submitting an application for the auction or communicating such 
information with respect to a party submitting an application for the 
auction to anyone possessing such information regarding another party

[[Page 31651]]

submitting an application for the auction;
    (7) Certification that the applicant has sole responsibility for 
investigating and evaluating all technical and marketplace factors that 
may have a bearing on the level of support it submits as a bid, and 
that if the applicant wins support, it will be able to build and 
operate facilities in accordance with the obligations applicable to the 
type of support it wins and the Commission's rules generally;
    (8) Certification that the applicant and all applicable parties 
have complied with and will continue to comply with Sec.  1.21002;
    (9) Certification that the applicant is in compliance with all 
statutory and regulatory requirements for receiving the universal 
service support that the applicant seeks, or, if expressly allowed by 
the rules specific to a high-cost support mechanism, a certification 
that the applicant acknowledges that it must be in compliance with such 
requirements before being authorized to receive support;
    (10) Certification that the applicant will be subject to a default 
payment or a forfeiture in the event of an auction default and that the 
applicant will make any payment that may be required pursuant to Sec.  
1.21004;
    (11) Certification that the applicant is not delinquent on any debt 
owed to the Commission and that it is not delinquent on any non-tax 
debt owed to any Federal agency as of the deadline for submitting 
applications to participate in competitive bidding pursuant to this 
subpart, or that it will cure any such delinquency prior to the end of 
the application resubmission period established by public notice.
    (12) Certification that the individual submitting the application 
is authorized to do so on behalf of the applicant; and
    (13) Such additional information as may be required.
    (c) Limit on filing applications. In any auction, no individual or 
entity may file more than one application to participate in competitive 
bidding or have a controlling interest (as defined in paragraph (d)(1) 
of this section) in more than one application to participate in 
competitive bidding. In the case of a consortium, each member of the 
consortium shall be considered to have a controlling interest in the 
consortium. In the event that applications for an auction are filed by 
applicants with overlapping controlling interests, pursuant to 
paragraph (f)(3) of this section, both applications will be deemed 
incomplete and only one such applicant may be deemed qualified to bid.
    (d) Definitions. For purposes of the certifications required under 
paragraph (b) of this section and the limit on filing applications in 
paragraph (c) of this section:
    (1) The term controlling interest includes individuals or entities 
with positive or negative de jure or de facto control of the applicant. 
De jure control includes holding 50 percent or more of the voting stock 
of a corporation or holding a general partnership interest in a 
partnership. Ownership interests that are held indirectly by any party 
through one or more intervening corporations may be determined by 
successive multiplication of the ownership percentages for each link in 
the vertical ownership chain and application of the relevant 
attribution benchmark to the resulting product, except that if the 
ownership percentage for an interest in any link in the chain meets or 
exceeds 50 percent or represents actual control, it may be treated as 
if it were a 100 percent interest. De facto control is determined on a 
case-by-case basis. Examples of de facto control include constituting 
or appointing 50 percent or more of the board of directors or 
management committee; having authority to appoint, promote, demote, and 
fire senior executives that control the day-to-day activities of the 
support recipient; or playing an integral role in management decisions. 
In the case of a consortium, each member of the consortium shall be 
considered to have a controlling interest in the consortium.
    (2) The term consortium means an entity formed to apply as a single 
applicant to bid at auction pursuant to an agreement by two or more 
separate and distinct legal entities.
    (3) The term joint venture means a legally cognizable entity formed 
to apply as a single applicant to bid at auction pursuant to an 
agreement by two or more separate and distinct legal entities.
    (e) Financial requirements for participation. As a prerequisite to 
participating in competitive bidding, an applicant may be required to 
post a bond or place funds on deposit with the Commission in an amount 
based on the default payment that may be required pursuant to Sec.  
1.21004. The details of and deadline for posting such a bond or making 
such a deposit will be announced by public notice. No interest will be 
paid on any funds placed on deposit.
    (f) Application processing. (1) Any timely submitted application 
will be reviewed by Commission staff for completeness and compliance 
with the Commission's rules. No untimely applications will be reviewed 
or considered.
    (2) Any application to participate in competitive bidding that does 
not identify the applicant or does not include all of the 
certifications required pursuant to this section is unacceptable for 
filing and cannot be corrected subsequent to the applicable deadline 
for submitting applications. The application will be deemed incomplete 
and the applicant will not be found qualified to bid.
    (3) If an individual or entity submits multiple applications in a 
single auction, or if entities that are commonly controlled by the same 
individual or same set of individuals submit more than one application 
in a single auction, then only one of such applications may be deemed 
complete, and the other such application(s) will be deemed incomplete, 
and such applicants will not be found qualified to bid.
    (4) An applicant will not be permitted to participate in 
competitive bidding if the applicant has not provided any bond or 
deposit of funds required pursuant to Sec.  1.21001(e), as of the 
applicable deadline.
    (5) The Commission will provide applicants a limited opportunity to 
cure defects (except for failure to sign the application and to make 
all required certifications) during a resubmission period established 
by public notice and to resubmit a corrected application. During the 
resubmission period for curing defects, an application may be amended 
or modified to cure defects identified by the Commission or to make 
minor amendments or modifications. After the resubmission period has 
ended, an application may be amended or modified to make minor changes 
or correct minor errors in the application. An applicant may not make 
major modifications to its application after the initial filing 
deadline. An applicant will not be permitted to participate in 
competitive bidding if Commission staff determines that the application 
requires major modifications to be made after that deadline. Major 
modifications include, but are not limited to, any changes in the 
ownership of the applicant that constitute an assignment or transfer of 
control, or any changes in the identity of the applicant, or any 
changes in the required certifications. Minor amendments include, but 
are not limited to, the correction of typographical errors and other 
minor defects not identified as major. Minor modifications may be 
subject to a deadline established by public notice. An application will 
be considered to be newly filed if it is amended by a major

[[Page 31652]]

amendment and may not be resubmitted after applicable filing deadlines.
    (6) An applicant that fails to cure the defects in their 
applications in a timely manner during the resubmission period as 
specified by public notice will have its application dismissed with no 
further opportunity for resubmission.
    (7) An applicant that is found qualified to participate in 
competitive bidding shall be identified in a public notice.
    (8) Applicants shall have a continuing obligation to make any 
amendments or modifications that are necessary to maintain the accuracy 
and completeness of information furnished in pending applications. Such 
amendments or modifications shall be made as promptly as possible, and 
in no case more than five business days after applicants become aware 
of the need to make any amendment or modification, or five business 
days after the reportable event occurs, whichever is later. An 
applicant's obligation to make such amendments or modifications to a 
pending application continues until they are made.
0
4. Revise Sec.  1.21002 to read as follows:


Sec.  1.21002   Prohibition of certain communications during the 
competitive bidding process.

    (a) Definitions. For purposes of this section:
    (1) The term ``applicant'' shall include all controlling interests 
in the entity submitting an application to participate in a given 
auction, as well as all holders of partnership and other ownership 
interests and any stock interest amounting to 10 percent or more of the 
entity, or outstanding stock, or outstanding voting stock of the entity 
submitting the application, and all officers and directors of that 
entity. In the case of a consortium, each member of the consortium 
shall be considered to have a controlling interest in the consortium; 
and
    (2) The term bids or bidding strategies shall include capital calls 
or requests for additional funds in support of bids or bidding 
strategies.
    (b) Certain communications prohibited. After the deadline for 
submitting applications to participate, an applicant is prohibited from 
cooperating or collaborating with any other applicant with respect to 
its own, or one another's, or any other competing applicant's bids or 
bidding strategies, and is prohibited from communicating with any other 
applicant in any manner the substance of its own, or one another's, or 
any other competing applicant's bids or bidding strategies, until after 
the post-auction deadline for winning bidders to submit applications 
for support.
    Example: Company A is an applicant in area 1. Company B and Company 
C each own 10 percent of Company A. Company D is an applicant in area 
1, area 2, and area 3. Company C is an applicant in area 3. Without 
violating the Commission's Rules, Company B can enter into a consortium 
arrangement with Company D or acquire an ownership interest in Company 
D if Company B certifies either:
    (1) That it has communicated with and will communicate neither with 
Company A or anyone else concerning Company A's bids or bidding 
strategy, nor with Company C or anyone else concerning Company C's bids 
or bidding strategy, or
    (2) That it has not communicated with and will not communicate with 
Company D or anyone else concerning Company D's bids or bidding 
strategy.
    (c) Any party submitting an application for a given auction that 
has an ownership or other interest disclosed with respect to more than 
one application for an auction must implement internal controls that 
preclude any individual acting on behalf of the applicant as defined in 
paragraph (a)(1) of this section from possessing information about the 
bids or bidding strategies as defined in paragraph (a)(2) of this 
section of more than one party submitting an application for the 
auction or communicating such information with respect to a party 
submitting an application for the auction to anyone possessing such 
information regarding another party submitting an application for the 
auction. Implementation of such internal controls will not outweigh 
specific evidence that a prohibited communication has occurred, nor 
will it preclude the initiation of an investigation when warranted.
    (d) An applicant must modify its application for an auction to 
reflect any changes in ownership or in membership of a consortium or a 
joint venture or agreements or understandings related to the support 
being sought.
    (e) Duty to report potentially prohibited communications. An 
applicant that makes or receives communications that may be prohibited 
pursuant to paragraph (b) of this section shall report such 
communications to the Commission staff immediately, and in any case no 
later than 5 business days after the communication occurs. An 
applicant's obligation to make such a report continues until the report 
has been made.
    (f) Procedures for reporting potentially prohibited communications. 
Any report required to be filed pursuant to this section shall be filed 
as directed in public notices detailing procedures for the bidding that 
was the subject of the reported communication. If no such public notice 
provides direction, the party making the report shall do so in writing 
to the Chief of the Auctions Division, Office of Economics and 
Analytics, by the most expeditious means available, including 
electronic transmission such as email.
0
5. Amend Sec.  1.21004 by:
0
a. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d), 
respectively;
0
b. Adding new paragraph (b); and
0
c. Revising newly redesignated paragraphs (c) and (d).
    The addition and revisions read as follows:


Sec.  1.21004  Winning bidder's obligation to apply for support.

* * * * *
    (b) Dismissal for failure to prosecute. The Commission may dismiss 
a winning bidder's application with prejudice for failure of the 
winning bidder to prosecute, failure of the winning bidder to respond 
substantially within the time period specified in official 
correspondence or requests for additional information, or failure of 
the winning bidder to comply with requirements for becoming authorized 
to receive support. A winning bidder whose application is dismissed for 
failure to prosecute pursuant to this paragraph has defaulted on its 
bid(s).
    (c) Liability for default payment or forfeiture in the event of 
auction default. A winning bidder that defaults on its bid(s) is liable 
for either a default payment or a forfeiture, which will be calculated 
by a method that will be established as provided in an order or public 
notice prior to competitive bidding. If the default payment is 
determined as a percentage of the defaulted bid amount, the default 
payment will not exceed twenty percent of the amount of the defaulted 
bid amount.
    (d) Additional liabilities. In addition to being liable for a 
default payment or a forfeiture pursuant to paragraph (c) of this 
section, a winning bidder that defaults on its winning bid(s) shall be 
subject to such measures as the Commission may provide, including but 
not limited to disqualification from future competitive bidding 
pursuant to this subpart.

PART 54--UNIVERSAL SERVICE

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


[[Page 31653]]


    Authority:  47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
229, 254, 303(r), 403, 1004, and 1302, unless otherwise noted.

0
7. Amend Sec.  54.5 by:
0
a. Revising the definition of ``High-cost support'';
0
b. Adding, in alphabetical order, a definition for ``Mobile competitive 
eligible telecommunications carrier''; and
0
c. Revising the definition of ``Tribal lands''.
    The revisions and addition read as follows:


Sec.  54.5  Terms and definitions.

* * * * *
    High-cost support. ``High-cost support'' refers to those support 
mechanisms in existence as of October 1, 2011, specifically, high-cost 
loop support, safety net additive and safety valve provided pursuant to 
subpart F of part 36, local switching support pursuant to Sec.  54.301, 
forward-looking support pursuant to Sec.  54.309, interstate access 
support pursuant to Sec. Sec.  54.800 through 54.809, and interstate 
common line support pursuant to Sec. Sec.  54.901 through 54.904, 
support provided pursuant to Sec. Sec.  51.915 and 51.917 of this 
chapter, and Sec.  54.304, support provided to competitive eligible 
telecommunications carriers as set forth in Sec.  54.307(e), Connect 
America Fund support provided pursuant to Sec.  54.312, and Mobility 
Fund and 5G Fund support provided pursuant to subpart L of this part.
* * * * *
    Mobile competitive eligible telecommunications carrier. A ``mobile 
competitive eligible telecommunications carrier'' is a carrier that 
meets the definition of a ``competitive eligible telecommunications 
carrier'' in this section and that provides a terrestrial-based service 
meeting the definition of ``commercial mobile radio service'' in Sec.  
51.5 of this chapter.
* * * * *
    Tribal lands. For the purposes of high-cost support, ``Tribal 
lands'' include any federally recognized Indian tribe's reservation, 
pueblo or colony, including former reservations in Oklahoma, Alaska 
Native regions established pursuant to the Alaska Native Claims 
Settlement Act (85 Stat. 688) and Indian Allotments, see Sec.  
54.400(e), as well as Hawaiian Home Lands--areas held in trust for 
native Hawaiians by the state of Hawaii, pursuant to the Hawaiian Homes 
Commission Act, 1920, July 9, 1921, 42 Stat 108, et seq., as amended; 
and any land designated as such by the Commission.
* * * * *
0
8. Amend Sec.  54.307 by revising paragraphs (e)(5) through (7) to read 
as follows:


Sec.  54.307  Support to a competitive eligible telecommunications 
carrier.

* * * * *
    (e) * * *
    (5) Eligibility for interim support before 5G Fund Phase I auction. 
(i) A competitive eligible telecommunications carrier that receives 
monthly baseline support pursuant to this section and that is not a 
mobile competitive eligible telecommunications carrier, as that term is 
defined in Sec.  54.5, shall no longer receive monthly baseline support 
starting the first day of the month following the effective date of the 
Report and Order, [[FCC XX-XXX]];
    (ii) A mobile competitive eligible telecommunications carrier that 
receives monthly baseline support pursuant to this section for any area 
that is ineligible for 5G Fund Phase I support, as determined by the 
Office of Economics and Analytics and Wireline Competition Bureau, 
shall receive monthly support amounts as follows for that area:
    (A) For 12 months starting the first day of the month following the 
effective date of the Report and Order, [[FCC XX-XXX]], or release by 
the Office of Economics and Analytics and Wireline Competition Bureau 
of a public notice announcing the final set of areas eligible for 5G 
Fund Phase I support, whichever is later, each competitive eligible 
telecommunications carrier shall receive monthly support that is two-
thirds (\2/3\) of the level as described in paragraph (e)(2)(iii) of 
this section for the ineligible area.
    (B) For 12 months starting the month following the period described 
in paragraph (e)(5)(ii)(A) of this section, each competitive eligible 
telecommunications carrier shall receive monthly support that is one-
third (\1/3\) of the level as described in paragraph (e)(2)(iii) of 
this section for the ineligible area.
    (C) Following the period described in paragraph (e)(5)(ii)(B) of 
this section, no competitive eligible telecommunications carrier shall 
receive monthly support for the ineligible area pursuant to this 
section.
    (iii) A mobile competitive eligible telecommunications carrier that 
receives monthly baseline support pursuant to this section for any area 
that is eligible for 5G Fund support, as determined by the Office of 
Economics and Analytics and Wireline Competition Bureau, shall receive 
monthly support for that area at the same level as described in 
paragraph (e)(2)(iii) of this section for no more than 60 months from 
the first day of the month following the effective date of the Report 
and Order, [[FCC XX-XXX]].
    (6) Eligibility for support after 5G Fund Phase I auction. (i) 
Notwithstanding the schedule described in paragraph (e)(5)(iii) of this 
section, a mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(5)(iii) of this 
section and is a winning bidder in the 5G Fund Phase I auction shall 
continue to receive support at the same level it was receiving support 
for such area at the time of the release of a public notice announcing 
the close of the 5G Fund Phase I auction until such time as the Office 
of Economics and Analytics and Wireline Competition Bureau determine 
whether to authorize the carrier to receive 5G Fund Phase I support.
    (A) Upon the Office of Economics and Analytics and Wireline 
Competition Bureau's release of a public notice approving a mobile 
competitive eligible telecommunications carrier's application for 
support submitted pursuant to Sec.  54.1014(b) and authorizing the 
carrier to receive 5G Fund Phase I support, the carrier shall no longer 
receive support at the level of monthly support pursuant to paragraph 
(e)(5)(iii) of this section for such area. Thereafter, the carrier 
shall receive monthly support in the amount of its 5G Fund Phase I 
winning bid pursuant to Sec.  54.1017, provided that USAC shall adjust 
the amount of the carrier's support to the extent necessary to account 
for any difference in support the carrier received during the period 
between the close of the 5G Fund Phase I auction and the release of the 
public notice authorizing the carrier to receive 5G Fund Phase I 
support.
    (B) A mobile competitive eligible telecommunications carrier that 
is a winning bidder in the 5G Fund Phase I auction but is not 
subsequently authorized to receive 5G Fund Phase I support shall 
receive monthly support as set forth in paragraph (e)(6)(iv) of this 
section for such area, as applicable, provided that USAC shall decrease 
such amounts to account for support payments received prior to the 
Office of Economics and Analytics and Wireline Competition Bureau's 
authorization determination that exceed the amount of support for such 
area as set forth in paragraph (e)(6)(iv) of this section, and the 
monthly support in the mobile competitive eligible telecommunications 
carrier's winning 5G Fund Phase I bid, which USAC shall

[[Page 31654]]

treat as the carrier's monthly support for purposes of paragraph 
(e)(6)(iv) of this section to the extent the carrier's winning bid is 
below that amount.
    (ii) A mobile competitive eligible telecommunications carrier that 
does not receive monthly support pursuant to this section and is a 
winning bidder in the 5G Fund Phase I auction shall receive monthly 
support pursuant to Sec.  54.1017.
    (iii) A mobile eligible telecommunications carrier that receives 
monthly support pursuant to paragraph (e)(5)(iii) of this section for 
an eligible area for which support is not won in the 5G Fund Phase I 
auction shall continue to receive support as described in paragraph 
(e)(5)(iii) of this section provided that it is the carrier receiving 
the minimum level of sustainable support for the eligible area. The 
``minimum level of sustainable support'' is the lowest monthly support 
received by a mobile competitive eligible telecommunications carrier 
for the eligible area that has deployed the highest level of technology 
within the state encompassing the eligible area.
    (iv) All other mobile competitive eligible telecommunications 
carriers that receive monthly support pursuant to paragraph (e)(5)(iii) 
of this section shall receive the following monthly support amounts for 
areas that are eligible for 5G Fund Phase I support, as determined by 
the Office of Economics and Analytics and Wireline Competition Bureau:
    (A) For 12 months starting the first day of the month following 
release by the Office of Economics and Analytics and Wireline 
Competition Bureau of a public notice announcing the close of the 5G 
Fund Phase I auction, each mobile competitive eligible 
telecommunications carrier shall receive monthly support that is two-
thirds (\2/3\) of the level as described in paragraph (e)(5)(iii) of 
this section for the eligible area.
    (B) For 12 months starting the month following the period described 
in paragraph (e)(6)(iv)(A) of this section, each mobile competitive 
eligible telecommunications carrier shall receive monthly support that 
is one-third (\1/3\) of the level as described in paragraph (e)(5)(iii) 
of this section for the eligible area.
    (C) Following the period described in paragraph (e)(6)(iv)(B) of 
this section, no mobile competitive eligible telecommunications carrier 
shall receive monthly support for the eligible area pursuant to this 
section.
    (7) Eligibility for support after 5G Fund Phase II auction. (i) 
Notwithstanding the schedule described in paragraphs (e)(6)(iii) or 
(iv) of this section, a mobile competitive eligible telecommunications 
carrier that receives monthly support pursuant to paragraphs 
(e)(6)(iii) or (iv) of this section, as applicable, and is a winning 
bidder in the 5G Fund Phase II auction shall receive support at the 
same level it was receiving support for such area at the time of the 
release of a public notice announcing the close of the 5G Fund Phase II 
auction until such time as the Office of Economics and Analytics and 
Wireline Competition Bureau determine whether to authorize the carrier 
to receive 5G Fund Phase II support.
    (A) Upon the Office of Economics and Analytics and Wireline 
Competition Bureau's release of a public notice approving a mobile 
competitive eligible telecommunications carrier's application for 
support submitted pursuant to Sec.  54.1014(b) and authorizing the 
carrier to receive 5G Fund Phase II support, the carrier shall no 
longer receive support at the level of monthly support pursuant to this 
section for such area. Thereafter, the carrier shall receive monthly 
support in the amount of its 5G Fund Phase II winning bid pursuant to 
Sec.  54.1017, provided that USAC shall adjust the amount of the 
carrier's support to the extent necessary to account for any difference 
in support the carrier received during the period between the close of 
the 5G Fund Phase II auction and the release of the public notice 
authorizing the carrier to receive 5G Fund Phase II support.
    (B) A mobile competitive eligible telecommunications carrier that 
is a winning bidder in the 5G Fund Phase II auction but is not 
subsequently authorized to receive 5G Fund Phase II support shall 
receive monthly support as set forth in paragraphs (e)(7)(iv) and (v) 
of this section for such area, as applicable, provided that USAC shall 
decrease such amounts to account for support payments received prior to 
the Office of Economics and Analytics and Wireline Competition Bureau's 
authorization determination that exceed the amount of support for such 
area as set forth in paragraphs (e)(7)(iv) and (v) of this section, and 
the monthly support in the mobile competitive eligible 
telecommunications carrier's winning 5G Fund bid, which USAC shall 
treat as the carrier's monthly support for purposes of paragraphs 
(e)(7)(iv) and (v) of this section to the extent the carrier's winning 
bid is below that amount.
    (ii) A mobile competitive eligible telecommunications carrier that 
does not receive monthly support pursuant to this section and is a 
winning bidder in the 5G Fund Phase II auction shall receive monthly 
support pursuant to Sec.  54.1017.
    (iii) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(6)(iii) of this 
section for an eligible area for which support is not won in the 5G 
Fund Phase II auction shall continue to receive support for that area 
as described in paragraph (e)(6)(iii) of this section.
    (iv) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(6)(iii) of this 
section for an eligible area for which support is won in the 5G Fund 
Phase II auction and the carrier is not the winning bidder shall 
receive the following monthly support amounts:
    (A) For 12 months starting the first day of the month following 
release by the Office of Economics and Analytics and Wireline 
Competition Bureau of a public notice announcing the close of the 5G 
Fund Phase II auction, the mobile competitive eligible 
telecommunications carrier shall receive monthly support that is two-
thirds (\2/3\) of the level as described in paragraph (e)(6)(iii) of 
this section for the eligible area.
    (B) For 12 months starting the month following the period described 
in paragraph (e)(7)(iv)(A) of this section, the mobile competitive 
eligible telecommunications carrier shall receive monthly support that 
is one-third (\1/3\) of the level as described in paragraph (e)(6)(iii) 
of this section for the eligible area.
    (C) Following the period described in paragraph (e)(7)(iv)(B) of 
this section, the mobile competitive eligible telecommunications 
carrier shall not receive monthly support for the eligible area 
pursuant to this section.
    (v) All other mobile competitive eligible telecommunications 
carriers that receive monthly support pursuant to paragraph (e)(6)(iv) 
of this section shall continue to receive support for the eligible area 
as described in paragraph (e)(6)(iv) of this section.
* * * * *
0
9. Amend Sec.  54.313 by revising paragraph (k) to read as follows:


Sec.  54.313  Annual reporting requirements for high-cost recipients.

* * * * *
    (k) This section does not apply to recipients that solely receive 
support from Phase I of the Mobility Fund.
* * * * *
0
10. Amend Sec.  54.315 by revising paragraph (c)(2)(iv)(B) to read as 
follows:

[[Page 31655]]

Sec.  54.315  Application process for Connect America Fund phase II 
support distributed through competitive bidding.

* * * * *
    (c) * * *
    (2) * * *
    (iv) * * *
    (B) Has a branch office:
    (1) Located in the District of Columbia; or
    (2) Located in New York City, New York, or such other branch office 
agreed to by the Commission, that will accept a letter of credit 
presentation from USAC via overnight courier, in addition to in-person 
presentations;
* * * * *
0
11. Add Sec.  54.322 to read as follows:


Sec.  54.322  Public interest obligations and performance requirements, 
reporting requirements, and non-compliance mechanisms for mobile legacy 
high-cost support recipients.

    (a) General. A mobile competitive eligible telecommunications 
carrier that receives monthly support pursuant to Sec.  
54.307(e)(5)(iii), (e)(6)(iii), or (e)(7)(iii) shall deploy voice and 
data services that meet at least the 5G-NR (New Radio) technology 
standards developed by the 3rd Generation Partnership Project with 
Release 15, or any successor release that may be adopted by the Office 
of Economics and Analytics and the Wireline Competition Bureau after 
notice and comment.
    (b) Service milestones and deadlines. A mobile competitive eligible 
telecommunications carrier that receives monthly support pursuant to 
Sec.  54.307(e)(5)(iii), (e)(6)(iii), or (e)(7)(iii) shall deploy 5G 
service as specified in paragraph (a) of this section as follows:
    (1) Year two service milestone deadline. The carrier shall deploy 
5G service that meets the performance requirements specified in 
paragraph (c) of this section to at least 40 percent of the areas for 
which the carrier receives such monthly support no later than December 
31 of the second full calendar year following adoption of the Report 
and Order, FCC XX-XXX.
    (2) Year three service milestone deadline. The carrier shall deploy 
5G service that meets the performance requirements specified in 
paragraph (c) of this section to at least 60 percent of the areas for 
which the carrier receives such monthly support no later than December 
31 of the third full calendar year following adoption of the Report and 
Order, FCC XX-XXX.
    (3) Year four final service milestone deadline. The carrier shall 
deploy 5G service that meets the performance requirements specified in 
paragraph (c) of this section to at least 85 percent of the areas for 
which the carrier receives such monthly support no later than December 
31 of the fourth full calendar year following adoption of the Report 
and Order, FCC XX-XXX.
    (c) Performance requirements. A mobile competitive eligible 
telecommunications carrier that receives monthly support pursuant to 
Sec.  54.307(e)(5)(iii), (e)(6)(iii), or (e)(7)(iii) shall meet the 
following minimum baseline performance requirements for data speeds, 
data latency, and data allowances in areas that it receives support for 
at least one plan that it offers:
    (1) Outdoor data transmission rates of 3 Mbps upload and 35 Mbps 
download, with at least 90 percent of the required download speed 
measurements not less than a threshold speed as determined by the 
Office of Economics and Analytics and the Wireline Competition Bureau; 
and
    (2) Transmission latency of 100 ms or less round trip for at least 
96 percent of the measurements.
    (3) At least one service plan offered must include a data allowance 
comparable to mid-level service plans offered by nationwide carriers.
    (d) Collocation obligations. A mobile competitive eligible 
telecommunications carrier that receives monthly support pursuant to 
Sec.  54.307(e)(5)(iii), (e)(6)(iii), or (e)(7)(iii) shall allow for 
reasonable collocation by other carriers of services that would meet 
the performance requirements specified in paragraph (b) of this section 
on all network infrastructure constructed with universal service funds 
that it owns or manages in the area for which it receives such monthly 
support. In addition, the mobile competitive eligible 
telecommunications carrier that receives such support may not enter 
into facilities access arrangements that restrict any party to the 
arrangement from allowing others to collocate on the network 
infrastructure.
    (e) Voice and data roaming obligations. A mobile competitive 
eligible telecommunications carrier that receives monthly support 
pursuant to Sec.  54.307(e)(5)(iii), (e)(6)(iii), or (e)(7)(iii) shall 
comply with the Commission's voice and data roaming requirements that 
are currently in effect on networks that are built with legacy high-
cost support.
    (f) Reasonably comparable rates. A mobile competitive eligible 
telecommunications carrier that receives monthly support pursuant to 
Sec.  54.307(e)(5)(iii), (e)(6)(iii), or (e)(7)(iii) shall offer its 
services in the areas for which it is authorized to receive legacy 
high-cost support at rates that are reasonably comparable to those 
rates offered in urban areas.
    (g) Initial report of current service offerings. A mobile 
competitive eligible telecommunications carrier that receives monthly 
support pursuant to Sec.  54.307(e)(5)(iii), (e)(6)(iii), or 
(e)(7)(iii) shall submit an initial report describing its current 
service offerings in its subsidized service areas and how the monthly 
support it is receiving is being used in such areas no later than three 
months after the effective date of this rule. The party submitting the 
report must certify that it has been authorized to do so by the mobile 
competitive eligible telecommunications carrier that receives support.
    (h) Interim and final service milestone reports. (1) A mobile 
competitive eligible telecommunications carrier that receives monthly 
support pursuant to Sec.  54.307(e)(5)(iii), (e)(6)(iii), or 
(e)(7)(iii) shall submit a report on or before March 1 after each of 
the service milestone deadlines established in paragraph (a) of this 
section demonstrating that it has deployed 5G service that meets the 
performance requirements specified in paragraph (c) of this section, 
which shall include the following:
    (i) Electronic shapefiles sufficient to demonstrate that the 
recipient has met the coverage obligations;
    (ii) Representative data covering the area for which support was 
received demonstrating mobile transmissions to and from the network 
that demonstrate coverage and compliance with speed and latency 
requirements;
    (iii) Information to support the accuracy of the shapefiles which 
includes, at a minimum, RF network design document with detailed site 
and sector information along with link budgets;
    (iv) Additional information as required by the Commission in a 
public notice;
    (v) All data submitted in a service milestone report shall be in 
compliance with standards set forth in the applicable public notice and 
shall be certified by a professional engineer.
    (2) All data submitted in service milestone reports shall be 
subject to review and verification by USAC to confirm compliance with 
the performance requirements set forth in paragraph (c) of this 
section.
    (i) Annual reports. (1) A mobile competitive eligible 
telecommunications carrier that receives monthly support pursuant to 
Sec.  54.307(e)(5)(iii), (e)(6)(iii), or (e)(7)(iii) shall submit an 
annual report no later than July 1 in each year. Each such

[[Page 31656]]

report shall include the following information:
    (i) Updated information regarding the carrier's current service 
offerings in its subsidized service areas and how monthly support is 
being used to provide 5G services in these areas, and a certification 
that the carrier is in compliance with the public interest obligations 
and all of the terms and conditions associated with the continued 
receipt of such monthly support disbursements; and
    (ii) Certification that the carrier is in compliance with the 
public interest obligations and all of the terms and conditions 
associated with the continued receipt of monthly support.
    (2) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to Sec.  54.307(e)(5)(iii), 
(e)(6)(iii), or (e)(7)(iii) shall supplement the information provided 
to USAC in any annual report within 10 business days from the onset of 
any reduction in the percentage of areas for which the recipient 
receives support being served after the filing of an initial or annual 
certification report or in the event of any failure to comply with any 
of the requirements for continued receipt of such support.
    (3) The party submitting the annual report must certify that it has 
been authorized to do so by mobile competitive eligible 
telecommunications carrier that receives support.
    (4) Each annual report shall be submitted solely via the USAC 
Administrator's online portal.
    (j) Non-compliance measures for failure to comply with performance 
requirements or public interest obligations. A mobile competitive 
eligible telecommunications carrier that receives monthly support 
pursuant to Sec.  54.307(e)(5)(iii), (e)(6)(iii), or (e)(7)(iii) that 
fails to comply with the public interest obligations set forth in 
paragraphs (d) through (g) of this section or fails to comply with the 
performance requirements set forth in paragraph (c) of this section at 
the prescribed level by the applicable interim deadline or by the final 
deadline established in paragraph (b) of this section must notify the 
Wireline Competition Bureau and USAC within 10 business days of its 
non-compliance. Upon notification, the carrier will be deemed to be in 
default, and for monthly support received pursuant to Sec.  
54.307(e)(5)(iii), (e)(6)(iii), or (e)(7)(iii), will no longer be 
eligible to receive such support, will receive no further support 
disbursements, and will be subject to full recovery of all such support 
disbursed since adoption of the public interest obligations and 
performance requirements specified in this section. The carrier may 
also be subject to further action, including the Commission's existing 
enforcement procedures and penalties, potential revocation of ETC 
designation, and suspension or debarment pursuant to Sec.  54.8.
0
12. Amend Sec.  54.804 by revising paragraph (c)(2)(iv)(B) to read as 
follows:


Sec.  54.804  Rural Digital Opportunity Fund application process.

* * * * *
    (c) * * *
    (2) * * *
    (iv) * * *
    (B) Has a branch office:
    (1) Located in the District of Columbia; or
    (2) Located in New York City, New York, or such other branch office 
agreed to by the Commission, that will accept a letter of credit 
presentation from USAC via overnight courier, in addition to in-person 
presentations;
* * * * *
0
13. Revise the heading for subpart L and Sec. Sec.  54.1011 through 
54.1021 to read as follows:

Subpart L--Mobility Fund and 5G Fund

* * * * *


Sec.  54.1011  5G Fund.

    The Commission will use competitive bidding, as provided in part 1, 
subpart AA, of this chapter, to determine the recipients of support 
available through the 5G Fund and the amount(s) of support that they 
may receive for specific geographic areas, subject to applicable post-
auction procedures.


Sec.  54.1012  Geographic areas eligible for support.

    (a) 5G Fund support may be made available for census tracts 
identified as eligible by public notice.
    (b) Coverage units for purposes of conducting competitive bidding 
and disbursing support based on square kilometers will be identified by 
public notice for each area eligible for support.


Sec.  54.1013  Applicant eligibility.

    (a) An applicant shall be an Eligible Telecommunications Carrier in 
an area in order to receive 5G Fund support for that area. An applicant 
may obtain its designation as an Eligible Telecommunications Carrier 
after the close of a 5G Fund auction, provided that the applicant 
submits proof of its designation within 180 days of the public notice 
identifying the applicant as a winning bidder. An applicant shall not 
receive 5G Fund support prior to the submission of proof of its 
designation as an Eligible Telecommunications Carrier. After such 
submission, the Eligible Telecommunications Carrier shall receive a 
balloon payment that will consist of the carrier's monthly 5G Fund 
payment amount multiplied by the number of whole months between the 
first day of the month after the close of the auction and the issuance 
of the public notice authorizing the carrier to receive 5G Fund 
support.
    (b) An applicant must have access to spectrum in an area that 
enables it to satisfy the performance requirements specified in Sec.  
54.1015 in order to receive 5G Fund support for that area. The 
applicant shall describe its access to spectrum and certify, in a form 
acceptable to the Commission, that it has such access in each area in 
which it intends to bid for support at the time it applies to 
participate in competitive bidding and at the time that it applies for 
support, and that it will retain such access for at least ten (10) 
years after the date on which it is authorized to receive support.
    (c) An applicant shall certify that it is financially and 
technically qualified to provide the services supported by the 5G Fund 
within the specified timeframe in each geographic area for which it 
seeks and is authorized to receive support.


Sec.  54.1014  Application process.

    (a) Application to participate in competitive bidding for 5G Fund 
support. In addition to providing information specified in Sec.  
1.21001(b) of this chapter and any other information required by the 
Commission, an applicant to participate in competitive bidding for 5G 
Fund support shall:
    (1) Certify that the applicant is financially and technically 
capable of meeting the public interest obligations and performance 
requirements in Sec.  54.1015 in each area for which it seeks support;
    (2) Disclose its status as an Eligible Telecommunications Carrier 
in any area for which it will seek support or as an entity that will 
file an application to become an Eligible Telecommunications Carrier in 
any such area after winning support in a 5G Fund auction, and certify 
that the disclosure is accurate;
    (3) Describe the spectrum access that the applicant plans to use to 
meet its public interest obligations and performance requirements in 
areas for which it will bid for support, including whether the 
applicant currently holds or leases the spectrum, including any 
necessary renewal expectancy, and whether such spectrum access is 
contingent upon receiving support in a

[[Page 31657]]

5G Fund auction, and certify that the description is accurate, that the 
applicant has access to spectrum in each area for which it intends to 
bid for support, and that the applicant will retain such access for at 
least ten (10) years after the date on which it is authorized to 
receive 5G Fund support;
    (4) Submit specified operational and financial information;
    (i) Indicate whether the applicant has been providing mobile 
wireless voice and/or mobile wireless broadband service for at least 
three years prior to the short-form application deadline (or is a 
wholly-owned subsidiary of an entity that has been providing such 
service for at least three years);
    (ii) If the applicant has been providing mobile wireless voice and/
or mobile wireless broadband service for at least three years prior to 
the short-form application deadline (or is a wholly-owned subsidiary of 
an entity that has been providing such service for at least three 
years), it must:
    (A) Specify the number of years it (or its parent company, if it is 
a wholly-owned subsidiary) has been providing such service,
    (B) Certify that it (or its parent company, if it is a wholly-owned 
subsidiary) has filed FCC Form 477s as required during that time 
period, and
    (C) Provide each of the FCC Registration Numbers (FRNs) that the 
applicant or its parent company (and in the case of a holding company 
applicant, its operating companies) have used to submit mobile wireless 
voice and/or mobile wireless broadband data with FCC Form 477 data for 
the past three years.
    (iii) If the applicant has been providing mobile wireless voice 
and/or mobile wireless broadband service for fewer than three years 
prior to the application deadline (or is not a wholly owned subsidiary 
of an entity that has been providing such service for at least three 
years), it must:
    (A) Submit information concerning its operational history and a 
preliminary project description as prescribed by the Commission or the 
Office of Economics and Analytics and the Wireline Competition Bureau 
in a Public Notice;
    (B) Submit a letter of interest from a qualified bank that meets 
the qualifications set forth in Sec.  54.1016 stating that the bank 
would provide a letter of credit as described in section to the 
applicant if the applicant becomes a winning bidder for bids of a 
certain dollar magnitude, as well as the maximum dollar amount for 
which the bank would be willing to issue a letter of credit to the 
applicant; and
    (C) Submit a statement that the bank would be willing to issue a 
letter of credit that is substantially in the same form as the 
Commission's model letter of credit.
    (5) Certify that it will be subject to a forfeiture pursuant to 
Sec.  1.21004 of this chapter in the event of an auction default; and
    (6) Certification that the party submitting the application is 
authorized to do so on behalf of the applicant.
    (b) Application by winning bidders for 5G Fund support--(1) 
Deadline. Unless otherwise provided by public notice, winning bidders 
for 5G Fund support shall file an application for 5G Fund support no 
later than ten (10) business days after the public notice identifying 
them as winning bidders.
    (2) Application contents. An application for 5G Fund support must 
contain:
    (i) Identification of the party seeking the support, including 
ownership information as set forth in Sec.  1.2112(a) of this chapter;
    (ii) Updated information regarding the agreements, arrangements, or 
understandings related to 5G Fund support disclosed in the application 
to participate in competitive bidding for 5G Fund support. A winning 
bidder may also be required to disclose in its application for 5G Fund 
support the specific terms, conditions, and parties involved in any 
agreement into which it has entered and the agreement itself;
    (iii) Certification that the applicant is financially and 
technically capable of providing the required coverage and performance 
levels within the specified timeframe in the geographic areas in which 
it won support;
    (iv) Proof of the applicant's status as an Eligible 
Telecommunications Carrier, or a statement that the applicant will 
become an Eligible Telecommunications Carrier in any area for which it 
seeks support within 180 days of the public notice identifying them as 
winning bidders, and certification that the proof is accurate;
    (v) A description of the spectrum access that the applicant plans 
to use to meet its public interest obligations and performance 
requirements in areas for which it is winning bidder for support, 
including whether the applicant currently holds or leases the spectrum, 
along with any necessary renewal expectancy, and certification that the 
description is accurate, that the winning bidder has access to spectrum 
in each area for which it is applying for support, and that the 
applicant will retain such access for the entire ten (10) year 5G Fund 
support term;
    (vi) A detailed project description that describes the network to 
be built, identifies the proposed technology, demonstrates that the 
project is technically feasible, discloses the complete project budget, 
and discusses each specific phase of the project (e.g., network design, 
construction, deployment, and maintenance), as well as a complete 
project schedule, including timelines, milestones, and costs;
    (vii) Certifications that the applicant has available funds for all 
project costs that exceed the amount of support to be received from 5G 
Fund and that the applicant will comply with all program requirements, 
including the public interest obligations and performance requirements 
set forth in Sec.  54.1015;
    (viii) Any guarantee of performance that the Commission may require 
by public notice or other proceedings, including but not limited to the 
letters of credit required in Sec.  54.1016, or a written commitment 
from an acceptable bank, as defined in Sec.  54.1016, to issue such a 
letter of credit;
    (viii) Certification that the applicant will offer services in 
supported areas at rates that are reasonably comparable to the rates 
the applicant charges in urban areas;
    (ix) Certification that the party submitting the application is 
authorized to do so on behalf of the applicant; and
    (x) Such additional information as the Commission may require.
    (3) Application processing. (i) No application will be considered 
unless it has been submitted in an acceptable form during the period 
specified by public notice. No applications submitted or demonstrations 
made at any other time shall be accepted or considered.
    (ii) Any application that, as of the submission deadline, either 
does not identify the applicant seeking support as specified in the 
public notice announcing application procedures, or does not include 
required certifications, shall be denied.
    (iii) An applicant may be afforded an opportunity to make minor 
modifications to amend its application or correct defects noted by the 
applicant, the Commission, the Administrator, or other parties. Minor 
modifications include correcting typographical errors in the 
application and supplying non-material information that was 
inadvertently omitted or was not available at the time the application 
was submitted.
    (iv) Applications to which major modifications are made after the 
deadline for submitting applications shall be denied. Major 
modifications

[[Page 31658]]

include, but are not limited to, any changes in the ownership of the 
applicant that constitute an assignment or change of control, or the 
identity of the applicant, or the certifications required in the 
application.
    (v) After receipt and review of the applications, a public notice 
shall identify each winning bidder that may be authorized to receive 5G 
Fund support, after the winning bidder submits a Letter of Credit and 
an accompanying opinion letter as required by Sec.  54.1016, in a form 
acceptable to the Commission, and any final designation as an Eligible 
Telecommunications Carrier that any applicant may still require. Each 
such winning bidder shall submit a Letter of Credit and an accompanying 
opinion letter as required by Sec.  54.1016, in a form acceptable to 
the Commission, and any required final designation as an Eligible 
Telecommunications Carrier no later than ten (10) business days 
following the release of the public notice.
    (vi) After receipt of all necessary information, a public notice 
will identify each winning bidder that is authorized to receive 5G Fund 
support.


Sec.  54.1015  Public interest obligations and performance requirements 
for 5G Fund support recipients.

    (a) General. A 5G Fund support recipient shall deploy voice and 
data services that meet at least the 5G-NR (New Radio) technology 
standards developed by the 3rd Generation Partnership Project with 
Release 15, or any successor release that may be adopted by the Office 
of Economics and Analytics and the Wireline Competition Bureau after 
notice and comment.
    (b) Interim and final service milestones and deadlines. A 5G Fund 
support recipient shall deploy 5G service as specified in paragraph (a) 
of this section as follows:
    (1) Year three interim service milestone deadline. A support 
recipient shall deploy service that meets the 5G Fund performance 
requirements as specified in paragraph (c) of this section to at least 
40 percent of the total square kilometers associated with the eligible 
areas for which it is authorized to receive 5G Fund support in a state 
no later than December 31 of the third full calendar year following 
authorization of support.
    (2) Year four interim service milestone deadline. A support 
recipient shall deploy service that meets the 5G Fund performance 
requirements as specified in paragraph (c) of this section to at least 
60 percent of the total square kilometers associated with the eligible 
areas for which it is authorized to receive 5G Fund support in a state 
no later than December 31 of the fourth full calendar year following 
authorization of support.
    (3) Year five interim service milestone deadline. A recipient shall 
deploy service that meets the 5G Fund performance requirements as 
specified in paragraph (c) of this section to at least 80 percent of 
the total square kilometers associated with the eligible areas for 
which it is authorized to receive 5G Fund support in a state no later 
than December 31 of the fifth full calendar year following 
authorization of support.
    (4) Year six final service milestone deadline. A support recipient 
shall deploy service that meets the 5G Fund performance requirements as 
specified in paragraph (c) of this section to at least 85 percent of 
the total square kilometers associated with the eligible areas for 
which it is authorized to receive 5G Fund support in a state no later 
than December 31 of the sixth full calendar year following funding 
authorization. In addition, a recipient shall deploy service meeting 
the 5G Fund performance requirements as specified in paragraph (c) of 
this section to at least 75 percent of the total square kilometers 
associated with every census tract or census block group for which it 
was authorized to receive 5G Fund support no later than December 31 of 
the sixth full calendar year following authorization of support.
    (5) Optional year two interim service milestone deadline. A support 
recipient may, at its option, deploy service that meets the 5G Fund 
performance requirements as specified in paragraph (c) of this section 
to at least 20 percent of the total square kilometers associated with 
the eligible areas for which it is authorized to receive 5G Fund 
support in a state no later than December 31 of the second full 
calendar year following funding authorization. Meeting this optional 
interim service milestone would permit the support recipient, after 
confirmation of the service deployment by USAC, to reduce its letter of 
credit so that it is valued at an amount equal to one year of support 
as described in Sec.  54.1016(a)(1)(v).
    (c) Performance requirements. A recipient authorized to receive 5G 
Fund support shall meet the following minimum baseline performance 
requirements for data speeds, data latency, and data allowances in 
areas where it receives support:
    (1) Outdoor data transmission rates of 3 Mbps upload and 35 Mbps 
download, with at least 90 percent of the required download speed 
measurements not less than a certain threshold speed that will be 
defined prior to a 5G Fund auction; and
    (2) Transmission latency of 100 ms or less round trip for at least 
96 percent of the measurements.
    (3) At least one service plan offered must include a data allowance 
comparable to mid-level service plans offered by nationwide carriers.
    (d) Collocation obligations. A recipient authorized to receive 5G 
Fund support shall allow for reasonable collocation by other carriers 
of services that would meet the performance requirements of the 5G Fund 
on all network infrastructure constructed with universal service funds 
that it owns or manages in the area for which it receives 5G Fund 
support. In addition, the recipient may not enter into facilities 
access arrangements that restrict any party to the arrangement from 
allowing others to collocate on the network infrastructure.
    (e) Voice and data roaming obligations. A recipient authorized to 
receive 5G Fund support shall comply with the Commission's voice and 
data roaming requirements that are currently in effect on networks that 
are built with 5G Fund support.
    (f) Reasonably comparable rates. A recipient authorized to receive 
5G Fund support shall offer its services in the areas for which it is 
authorized to receive support at rates that are reasonably comparable 
to those rates offered in urban areas.
    (g) Liability for failure to comply with performance requirements 
and public interest obligations. A support recipient that fails to 
comply with the performance requirements set forth in paragraph (c) of 
this section is subject to the non-compliance measures set forth in 
Sec.  54.1020. A support recipient that fails to comply with the public 
interest obligations or any other terms and conditions associated with 
receiving 5G Fund support may be subject to action, including the 
Commission's existing enforcement procedures and penalties, reductions 
in support amounts, revocation of ETC designation, and suspension or 
debarment pursuant to Sec.  54.8.


Sec.  54.1016  Letter of credit.

    (a) Before being authorized to receive 5G Fund support, a winning 
bidder shall obtain an irrevocable standby letter of credit which shall 
be acceptable in all respects to the Commission.
    (1) Each winning bidder that becomes authorized to receive 5G Fund 
support shall maintain the standby letter of credit in an amount equal 
to, at a minimum, one year of support, until the Universal Service 
Administrative Company has verified that the support recipient serves 
at least 85 percent of

[[Page 31659]]

the eligible square kilometers for which it is authorized to receive 
support in a state, and at least 75 percent of the eligible square 
kilometers in each eligible census tract, by the Year Six Final Service 
Milestone.
    (i) For Year One of a support recipient's support term, it must 
obtain a letter of credit valued at an amount equal to one year of 
support.
    (ii) For Year Two of a support recipient's support term, it must 
obtain a letter of credit valued at an amount equal to eighteen months 
of support.
    (iii) For Year Three of a support recipient's support term, it must 
obtain a letter of credit valued at an amount equal to two years of 
support.
    (iv) For Year Four of a support recipient's support term, and for 
each year thereafter unless the support recipient is allowed to reduce 
it pursuant to Sec.  54.1015(b), it must obtain a letter of credit 
valued at an amount equal to three years of support.
    (v) A support recipient may obtain a new letter of credit or renew 
its existing letter of credit so that it is valued at an amount equal 
to one year of support once it meets either the Optional Year Two 
Interim Service Milestone or the Year Three Interim Service Milestone 
specified in Sec.  54.1015(b). The recipient may obtain or renew this 
letter of credit upon verification by USAC that it has deployed service 
that meets the 5G Fund performance requirements and deadlines as 
specified in Sec.  54.1015(b). The recipient may maintain its letter of 
credit at this level for the remainder of its deployment term, so long 
as USAC verifies that the recipient successfully and timely meets its 
remaining required interim and final service milestones.
    (vi) A support recipient that fails to meet its required interim 
service milestones must obtain a new letter of credit or renew its 
existing letter of credit valued at an amount equal to its existing 
letter of credit, plus an additional year of support, up to a maximum 
of three years of support.
    (vii) A support recipient that fails to meet two or more required 
interim service milestones must maintain a letter of credit valued at 
an amount equal to three years of support and may be subject to 
additional noncompliance penalties as set forth in Sec.  54.1020.
    (2) The bank issuing the letter of credit shall be acceptable to 
the Commission. A bank that is acceptable to the Commission is:
    (i) Any United States bank:
    (A) That is insured by the Federal Deposit Insurance Corporation, 
and
    (B) That has a bank safety rating issued by Weiss of B- or better; 
or
    (ii) CoBank, so long as it maintains assets that place it among the 
100 largest United States Banks, determined on basis of total assets as 
of the calendar year immediately preceding the issuance of the letter 
of credit and it has a long-term unsecured credit rating issued by 
Standard & Poor's of BBB- or better (or an equivalent rating from 
another nationally recognized credit rating agency); or
    (iii) The National Rural Utilities Cooperative Finance Corporation, 
so long as it maintains assets that place it among the 100 largest 
United States Banks, determined on basis of total assets as of the 
calendar year immediately preceding the issuance of the letter of 
credit and it has a long-term unsecured credit rating issued by 
Standard & Poor's of BBB- or better (or an equivalent rating from 
another nationally recognized credit rating agency); or
    (iv) Any non-United States bank:
    (A) That is among the 100 largest non-U.S. banks in the world, 
determined on the basis of total assets as of the end of the calendar 
year immediately preceding the issuance of the letter of credit 
(determined on a U.S. dollar equivalent basis as of such date);
    (B) Has a branch office:
    (1) Located in the District of Columbia; or
    (2) Located in New York City, New York, or such other branch office 
agreed to by the Commission, that will accept a letter of credit 
presentation from USAC via overnight courier, in addition to in-person 
presentations; and
    (C) Has a long-term unsecured credit rating issued by a widely 
recognized credit rating agency that is equivalent to a BBB- or better 
rating by Standard & Poor's; and
    (D) Issues the letter of credit payable in United States dollars.
    (b) A winning bidder for 5G Fund support shall provide with its 
Letter of Credit an opinion letter from legal counsel clearly stating, 
subject only to customary assumptions, limitations, and qualifications, 
that in a proceeding under Title 11 of the United States Code, 11 
U.S.C. 101 et seq. (the ``Bankruptcy Code''), the bankruptcy court 
would not treat the letter of credit or proceeds of the letter of 
credit as property of the winning bidder's bankruptcy estate, or the 
bankruptcy estate of any other bidder-related entity requesting 
issuance of the letter of credit, under section 541 of the Bankruptcy 
Code.
    (c) Authorization to receive 5G Fund support is conditioned upon 
full and timely performance of all of the performance requirements set 
forth in Sec.  54.1015(c), and any additional terms and conditions upon 
which the support was granted.
    (1) Failure by a recipient authorized to receive 5G Fund support to 
comply with any of the performance requirements set forth in Sec.  
54.1015(c) will trigger reporting obligations and the withholding of 
support as described in Sec.  54.1020. Failure to come into full 
compliance during the relevant cure period as described in Sec.  
54.1020(b)(4)(ii) or 54.1020(c) will trigger a recovery action by USAC 
set forth in Sec.  54.1020(b)(4)(ii) or 54.1020(c), as applicable. If 
the recipient authorized to receive 5G Fund support does not repay the 
requisite amount of support within six months, USAC will be entitled to 
draw upon the entire amount of the letter of credit and may disqualify 
the 5G Fund support recipient from the receipt of 5G Fund support or 
additional universal service support.
    (2) The default will be evidenced by a letter issued by the Chief 
of the Wireline Competition Bureau, or its respective designees, which 
letter, describing the performance default and attached to a standby 
letter of credit draw certificate, shall be sufficient for a draw on 
the standby letter of credit for the entire amount of the standby 
letter of credit.


Sec.  54.1017  5G Fund support disbursements.

    (a) A winning bidder of 5G Fund support will be advised by public 
notice whether it has been authorized to receive support.
    (b) 5G Fund support will be disbursed on a monthly basis to a 
recipient for ten (10) years following the date on which it is 
authorized to receive support.
    (c) If a 5G Fund support recipient fails to comply with the 
performance requirements of the 5G Fund, USAC shall reduce, pause, or 
freeze, the monthly payments to the recipient until the recipient cures 
the non-compliance, as provided in Sec.  54.1020. As set forth in Sec.  
54.1015(g), if a support recipient fails to comply with the public 
interest obligations or any other terms and conditions associated with 
receiving 5G Fund support, it may be subject reductions or suspension 
of support amounts.


Sec.  54.1018  Annual reports.

    (a) A 5G Fund support recipient authorized to receive 5G Fund 
support shall submit an annual report to USAC no later than July 1 of 
each year after the year in which it was authorized to receive support. 
Each support recipient shall certify in its annual report that it is in 
compliance with the public interest

[[Page 31660]]

obligations, performance requirements, and all of the terms and 
conditions associated with the receipt of 5G Fund support in order to 
continue receiving 5G Fund support disbursements.
    (b) All support recipients shall supplement the information 
provided in an annual report to USAC within 10 business days from the 
onset of any reduction in the percentage of the total eligible square 
kilometers being served in a state after the filing of an annual 
certification report or in the event of any failure to comply with any 
of the 5G Fund requirements.
    (c) The party submitting the annual report must certify that it has 
been authorized to do so by the 5G Fund support recipient.
    (d) Each annual report shall be submitted solely via the USAC 
Administrator's online portal.


Sec.  54.1019  Interim service and final service milestone reports.

    (a) A recipient authorized to receive 5G Fund support shall submit 
a report to USAC on or before March 1 after the third, fourth, fifth, 
and sixth service milestone deadlines established in Sec.  54.1015(b) 
demonstrating that it has deployed service meeting the 5G Fund 
performance requirements specified in Sec.  54.1015(c), which shall 
include the following:
    (1) Electronic shapefiles sufficient to demonstrate that the 
recipient has met the coverage obligations;
    (2) Representative data covering the area for which support was 
received demonstrating mobile transmissions to and from the network 
that demonstrate coverage and compliance with speed and latency 
requirements;
    (3) Information to support the accuracy of the shapefiles which 
includes, at a minimum, RF network design document with detailed site 
and sector information along with link budgets;
    (4) Additional information as required by the Commission in a 
public notice;
    (5) All data submitted in compliance with a recipient's public 
interest obligations in the milestone report shall be in compliance 
with standards set forth in the applicable public notice and shall be 
certified by a professional engineer.
    (b) Each service milestone report shall be submitted solely via the 
USAC Administrator's online portal.
    (c) All data submitted in service milestone reports shall be 
subject to verification by USAC for compliance with the 5G Fund 
performance requirements specified in Sec.  54.1015(c).


Sec.  54.1020  Non-compliance measures for 5G Fund support recipients.

    (a) General. Any support recipient that has not deployed service 
that meets the 5G Fund performance requirements specified in Sec.  
54.1015(c) to at least 20 percent of the total square kilometers 
associated with the eligible areas for which it is authorized to 
receive support in a state by the Year Three Interim Service Milestone 
deadline must notify the Wireline Competition Bureau and USAC within 10 
business days of its non-compliance. Upon notification, the support 
recipient will be deemed to be in default and will be subject to full 
support recovery. The provisions of paragraph (b) of this section will 
not be applicable to such a support recipient.
    (b) Interim service milestones. A 5G Fund support recipient must 
notify the Commission, USAC, and the relevant state, U.S. Territory, or 
Tribal government, if applicable, within 10 business days of its non-
compliance with any interim milestone. Upon notification that a support 
recipient has defaulted on an interim service milestone, the Wireline 
Competition Bureau shall issue a letter evidencing the default. For 
purposes of determining whether a default has occurred, the support 
recipient must be offering service meeting the performance requirements 
specified in Sec.  54.1015(c). The issuance of this letter shall 
initiate reporting obligations and withholding a percentage of the 5G 
Fund support recipient's total monthly 5G Fund support, if applicable, 
starting the month after issuance of the letter:
    (1) Tier 1. If a support recipient has a compliance gap of at least 
five percent but less than 15 percent of the total square kilometers 
associated with the eligible areas in a state for which it is to have 
deployed service that meets the 5G Fund performance requirements 
specified in Sec.  54.1015(c) by an interim service milestone, the 
Wireline Competition Bureau will issue a letter to that effect. 
Starting three months after the issuance of this letter, a support 
recipient will be required to file a report with USAC every three 
months that identifies the eligible square kilometers to which the 
support recipient has newly deployed facilities capable of delivering 
service that meets the requisite 5G Fund performance requirements in 
the previous quarter. The support recipient must continue to file 
quarterly reports until it has reported, and USAC has verified, that it 
has reduced the compliance gap to less than five percent of the total 
square kilometers associated with the eligible areas for which it is 
authorized to receive support in a state by that interim service 
milestone and the Wireline Competition Bureau issues a letter to that 
effect. A support recipient that files a quarterly report late, but 
within seven days after the due date established by the letter issued 
by the Wireline Competition Bureau for filing the report, will have its 
5G Fund support reduced by an amount equivalent to seven days of 
support. If a support recipient does not file a report within seven 
days after the report's due date, it will have its 5G Fund support 
reduced on a pro-rata daily basis equivalent to the period of non-
compliance, plus the minimum seven-day reduction, until such time as 
the quarterly report is filed.
    (2) Tier 2. If a support recipient has a compliance gap of at least 
15 percent but less than 25 percent of the total square kilometers 
associated with the eligible areas in a state for which it is to have 
deployed service that meets the 5G Fund performance requirements 
specified in Sec.  54.1015(c) by an interim service milestone, USAC 
will withhold 15 percent of the support recipient's monthly support for 
that state and the support recipient will be required to file quarterly 
reports with USAC. Once the support recipient has reported, and USAC 
has verified, that it has reduced the compliance gap to less than 15 
percent of the required eligible square kilometers for that interim 
service milestone for that state, the Wireline Competition Bureau will 
issue a letter to that effect, USAC will stop withholding support, and 
the support recipient will receive all of the support that had been 
withheld. The support recipient will then move to Tier 1 status.
    (3) Tier 3. If a support recipient has a compliance gap of at least 
25 percent but less than 50 percent of the total square kilometers 
associated with the eligible areas in a state for which it is to have 
deployed service that meets the 5G Fund performance requirements 
specified in Sec.  54.1015(c) by an interim service milestone, USAC 
will withhold 25 percent of the support recipient's monthly support for 
that state and the support recipient will be required to file quarterly 
reports with USAC. Once the support recipient has reported, and USAC 
has verified, that it has reduced the compliance gap to less than 25 
percent of the required eligible square kilometers for that interim 
service milestone for that state, the Wireline Competition Bureau will 
issue a letter to that effect, and the support recipient will move to 
Tier 2 or Tier 1 status, as applicable.
    (4) Tier 4. If a support recipient has a compliance gap of 50 
percent or more of the total square kilometers associated with the 
eligible areas in a state for

[[Page 31661]]

which it is to have deployed service that meets the 5G Fund performance 
requirements specified in Sec.  54.1015(c) by an interim service 
milestone:
    (i) USAC will withhold 50 percent of the support recipient's 
monthly support for that state and the support recipient will then be 
required to file quarterly reports with USAC. As with the other tiers, 
as the support recipient reports, and USAC verifies, that it has 
lessened the extent of its non-compliance, and the Wireline Competition 
Bureau issues a letter to that effect, it will move through the tiers 
until it reaches Tier 1 (or no longer is out of compliance with the 
applicable interim service milestone).
    (ii) If after having 50 percent of its support withheld for six 
months, the support recipient has not reported that it is eligible for 
Tier 3 status (or one of the lower tiers), USAC will withhold 100 
percent of the support recipient's forthcoming monthly support for that 
state and will commence a recovery action for a percentage of support 
that is equal to the support recipient's compliance gap plus 10 percent 
of the support recipient's support in that state that has been 
disbursed to that date.
    (5) If at any point prior to the Year Six Final Service Milestone 
the support recipient reports, and USAC verifies, that it is eligible 
for Tier 1 status or that it is no longer out of compliance with the 5G 
Fund performance requirements specified in Sec.  54.1015(c), it will 
have its support fully restored and USAC will repay any funds that were 
recovered or withheld.
    (c) Year six final service milestone. A 5G Fund support recipient 
must notify the Commission, USAC, and the relevant state, U.S. 
Territory, or Tribal government, if applicable, within 10 business days 
of its non-compliance with the final milestone. Upon notification that 
the support recipient has not met the 5G Fund performance requirements 
specified in Sec.  54.1015(c) by the Year Six Final Service Milestone, 
the support recipient will have twelve months from the date of the Year 
Six Final Milestone deadline to come into full compliance with 
performance requirements for Year Six Final Milestone. If the support 
recipient does not report that it has come into full compliance with 
the performance requirements for the Year Six Final Milestone within 
twelve months, as verified by USAC, the Wireline Competition Bureau 
will issue a letter to this effect. Recipients of 5G Fund support shall 
be subject to the following non-compliance measures related to the 
recovery of support after this grace period:
    (1) If a support recipient has deployed service that meets the 5G 
Fund performance requirements specified in Sec.  54.1015(c) to at least 
80 percent of the total eligible square kilometers in a state, but less 
than the required 85 percent of the total eligible square kilometers in 
that state, USAC will recover an amount of support that is equal to 
1.25 times the average amount of support per square kilometer that the 
support recipient has received in the state times the number of square 
kilometers unserved up to the 85 percent requirement;
    (2) If a support recipient has deployed service that meets the 5G 
Fund performance requirements specified in Sec.  54.1015(c) to at least 
75 percent, but less than 80 percent, of the total eligible square 
kilometers in that state, USAC will recover an amount of support that 
is equal to 1.5 times the average amount of support per square 
kilometer that the support recipient has received in the state times 
the number of square kilometers unserved up to the 85 percent 
requirement, plus 5 percent of the support recipient's total 5G Fund 
support for the 10 year support term for that state;
    (3) If a support recipient has deployed service that meets the 5G 
Fund performance requirements specified in Sec.  54.1015(c) to less 
than 75 percent of the total eligible square kilometers in a state, 
USAC will recover an amount of support that is equal to 1.75 times the 
average amount of support per square kilometer that the support 
recipient has received in the state times the number of square 
kilometers unserved up to the 85 percent requirement, plus 10 percent 
of the support recipient's total 5G Fund support for the 10 year 
support term for that state.
    (d) Additional evidence required at year six final service 
milestone deadline. At the Year Six Final Service Milestone deadline, a 
5G Fund support recipient is also required to provide evidence, which 
is subject to verification by USAC, that it has provided service that 
meets the 5G Fund performance requirements specified in Sec.  
54.1015(c) to at least 75 percent of the total square kilometers for 
each census tract or census tract group in which it was authorized to 
receive support. If after the grace period permitted in paragraph (c) 
of this section USAC has not verified based on the evidence provided 
that the support recipient has provided service that meets the 5G Fund 
performance requirements specified in Sec.  54.1015(c) to at least 75 
percent of the total square kilometers for each census tract or census 
tract group in which it was authorized to receive support, USAC will 
recover an amount of support that is equal to 1.5 times the average 
amount of support per square kilometer that the support recipient had 
received in the eligible area times the number of square kilometers 
unserved within that eligible area, up to the 75 percent requirement.
    (e) Compliance reviews. If USAC determines subsequent to the Year 
Six Final Service Milestone that a support recipient does not have 
sufficient evidence to demonstrate that it continues to offer service 
that meets the 5G Fund performance requirements specified in Sec.  
54.1015(c) to all of the eligible square kilometers in the state as 
required by the Year Six Final Service Milestone, USAC shall 
immediately recover a percentage of support from the support recipient 
as specified in paragraphs (c)(1) through(3) and (d) of this section.


Sec.  54.1021  Record retention for the 5G Fund.

    A recipient authorized to receive 5G Fund support and its agents 
are required to retain any documentation prepared for, or in connection 
with, the award of the 5G Fund support for a period of not less than 
ten (10) years after the date on which the recipient receives its final 
disbursement of 5G Fund support.
0
14. Amend Sec.  54.1508 by revising paragraph (c)(4)(ii) to read as 
follows:


Sec.  54.1508  Letter of credit for stage 2 fixed support recipients.

* * * * *
    (c) * * *
    (4) * * *
    (ii) Has a branch office:
    (A) Located in the District of Columbia, or
    (B) Located in New York City, New York, or such other branch office 
agreed to by the Commission, that will accept a letter of credit 
presentation from USAC via overnight courier, in addition to in-person 
presentations;
* * * * *
[FR Doc. 2020-09620 Filed 5-22-20; 8:45 am]
 BILLING CODE 6712-01-P