[Federal Register Volume 62, Number 209 (Wednesday, October 29, 1997)]
[Rules and Regulations]
[Pages 56118-56120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28612]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[CC Docket No. 96-45; FCC 97-380]
Universal Service
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this Order, we adopt a filing window period that begins on
the date that the Schools and Libraries Corporation and the Health Care
Corporation begin to receive applications for support. We also conclude
that the administrative corporations will determine the length of the
window and resolve other administrative issues necessary to implement
our decision to adopt a window filing period consistent with our
guidance set forth below. Therefore, we amend our rules to implement
this change. In addition, we delegate authority to the Chief, Common
Carrier Bureau to resolve unanticipated technical and operational
issues relating to the new universal service mechanisms that may arise
in the future.
EFFECTIVE DATE: All policies and rules adopted herein shall be
effective November 28, 1997.
FOR FURTHER INFORMATION CONTACT: Valerie Yates, Legal Counsel, Common
Carrier Bureau, (202) 418-1500, or Sheryl Todd, Common Carrier Bureau,
(202) 418-7400.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third
Report and Order adopted on October 10, 1997 and released on October
14, 1997, including changes made in an erratum released October 15,
1997. The full text of the Third Report and Order is available for
inspection and copying during normal business hours in the FCC
Reference Center (Room 239), 1919 M St., NW., Washington, DC. Pursuant
to the Telecommunications Act of 1996, the Commission released a Notice
of Proposed Rulemaking and Order Establishing Joint Board, Federal-
State Joint Board on Universal Service, CC Docket No. 96-45 on March 8,
1996 (61 FR 10499 (March 14, 1996)), a Recommended Decision on November
8, 1996 (61 FR 63778 (December 2, 1996)), a Public Notice on November
18, 1996 (61 FR 63778 (December 2, 1996)), and a Report and Order that
was adopted on May 7, 1997 and released on May 8, 1997 (62 FR 32862
(June 17, 1997)) implementing rules for Secs. 254 and 214(e) of the Act
relating to universal service. Also pursuant to the Telecommunications
Act of 1996, the Commission released a Report and Order in CC Docket
97-21 on July 18, 1997 (62 FR 41294 (August 1, 1997)). The Common
Carrier Bureau released a Public Notice seeking comment on additional
issues addressed in the Third Report and Order on September 10, 1997
(62 FR 48280 (September 15, 1997)).
Summary of the Third Report and Order
1. On March 8, 1996, as required by the Telecommunications Act of
1996 (1996 Act), the Commission released a Notice of Proposed
Rulemaking and Order Establishing a Joint Board on Universal Service.
As required by the RFA, the NPRM included an Initial Regulatory
Flexibility Analysis (IRFA). At that time, the Commission sought
written public comment on the proposals in the NPRM, including comment
on the IRFA. On May 8, 1997 the Commission released a Report and Order
that included a Final Regulatory Flexibility Analysis (FRFA). On
September 10, 1997, the Common Carrier Bureau issued a Public Notice
seeking comment on several issues with respect to the application
process and the distribution of federal universal service support funds
for schools, libraries, and rural health care providers. This FRFA
supplements the FRFA that was included in the First Report and Order
and incorporates the comments with respect to the proposal to adopt a
filing window that were received in response to the Bureau's September
10 Public Notice. This present FRFA conforms to the RFA.
2. In the Universal Service Order, we concluded that the
Administrator would commit funds to applicants on a first-come first-
served basis. We now conclude, based on the nearly unanimous comments
received in response to the September 10 Public Notice, that all
applications filed during the window will be treated as if
simultaneously received. For the reasons discussed below, we find that
adopting such a window period will best serve the needs of applicants
for universal service discounts, and will assist the administrative
corporations in processing these requests in a timely manner.
3. In response to commenters' requests, we clarify that an
applicant's ``place in line,'' or seniority, with respect to funds will
be determined by the date on which an applicant submits a contract to
the applicable administrative corporation. An applicant's submission of
its initial request for services, which one of the administrative
corporations will post on its website, does not determine the
applicant's seniority for the purposes of allocating funding. We
clarify that the Schools and Libraries Corporation, as administrator,
will allocate funds reasonably and in accordance with the rules of
priority set forth in Sec. 54.507(g) of our rules.
4. In light of our decision to adopt a window filing period, we
also conclude that the administrative corporations should determine the
length of the window and resolve other administrative matters necessary
to implement a window filing period. We conclude that this
responsibility entails ``administering the support mechanisms for
eligible schools and libraries and rural health care providers,'' a
function already within the scope of the corporations' general duties.
We find that the goals of the universal service mechanisms will best be
served if the administrative corporations are responsible for
implementing the window filing periods because they will be performing
the day-to-day functions of the schools, libraries, and rural health
care universal service mechanisms and thus are better able to determine
an appropriate window periods in light of their needs and resources. We
remain committed to the general principle that funds will be allocated
to applicants on a first-come first-served basis. Consistent with this
principle, we direct the corporations to adopt a reasonable window
period that is of sufficient duration to effectuate the administrative
purposes of the window, as set forth
[[Page 56119]]
above, but is short enough to ensure that funds are allocated without
unnecessary delay and to encourage applicants to file requests for
support without undue delay. In addition, to ensure that all applicants
will be informed of the window periods with sufficient time to adjust
their plans accordingly, we direct the administrative corporations to
make a determination with respect to the initial window filing periods
by October 31, 1997 and to publicize that decision promptly using
appropriate media and other avenues that will notify the educational,
library, and rural health care communities. In order to facilitate
notification to the public, we direct the Bureau to issue a public
notice announcing the administrative corporations' decisions.
5. We further find that unanticipated technical and operational
issues may arise that will require prompt attention, but will not
warrant Commission review. To the extent clarification of our rules are
necessary, however, we delegate to the Chief, Common Carrier Bureau the
authority to issue orders interpreting our rules as necessary to ensure
that support for services provided to schools and libraries and rural
health care providers operate to further our universal service goals.
We find that this action is ``necessary to the proper functioning of
the Commission and the prompt and orderly conduct of its business.'' 47
U.S.C. 155(c)(1). Any action taken pursuant to this delegation of
authority ``shall have the same force and effect and shall be made,
evidenced, and enforced in the same manner as actions of the
Commission.'' 47 CFR 0.203; see also 47 U.S.C. 155(c)(3).
Final Federal Regulatory Flexibility Analysis
6. On March 8, 1996, as required by the Telecommunications Act of
1996 (1996 Act), the Commission released a Notice of Proposed
Rulemaking and Order Establishing a Joint Board on Universal Service.
As required by the RFA, the NPRM included an Initial Regulatory
Flexibility Analysis (IRFA). At that time, the Commission sought
written public comment on the proposals in the NPRM, including comment
on the IRFA. On May 8, 1997 the Commission released a Report and Order
that included a Final Regulatory Flexibility Analysis (FRFA). On
September 10, 1997, the Common Carrier Bureau issued a Public Notice
seeking comment on several issues with respect to the application
process and the distribution of federal universal service support funds
for schools, libraries, and rural health care providers. This FRFA
supplements the FRFA that was included in the First Report and Order
and incorporates the comments with respect to the proposal to adopt a
filing window that were received in response to the Bureau's September
10 Public Notice. This present FRFA conforms to the RFA.
7. Need for, and Objectives of, this Third Report and Order. The
Commission is required by sections 254(a)(2) and 410(c) of the Act, as
amended by the 1996 Act, to promulgate these rules to implement
promptly the universal service provisions of section 254. The goal of
this Third Report and Order (Order) is to ease the burden on schools,
libraries, and rural health care providers that will submit requests
for funding to the universal service administrator by adopting a filing
window. All applications filed during the window will be treated as if
simultaneously received.
8. Summary of Significant Issues Raised by Public Comments.
Commenters overwhelmingly recommended adoption of a filing window in
order to ease the administrative burdens on schools, libraries, and
rural health care providers, particularly smaller entities with fewer
administrative resources. Some commenters urged the Commission to
ensure that applicants in all states would receive some opportunity to
receive funding.
9. Description and Estimates of the Number of Small Entities to
Which the Rules Adopted in This Report and Order will Apply. The RFA
generally defines ``small entity'' as having the same meaning as the
terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' In addition, the term ``small business''
has the same meaning as the term ``small business concern'' under the
Small Business Act, 15 U.S.C. 632, unless the Commission has developed
one or more definitions that are appropriate to its activities. Under
the Small Business Act, a ``small business concern'' is one that: (1)
Is independently owned and operated; (2) is not dominant in its field
of operation; and (3) meets any additional criteria established by the
Small Business Administration (SBA). As noted, the RFA also applies to
nonprofit organizations and to governmental organizations such as
governments of cities, counties, towns, townships, villages, school
districts, or special districts with populations of less than 50,000.
As of 1992, the most recent figures available, there were 85,006
governmental entities in the United States.
10. For ``small business'' determinations in this context, the SBA
has established a definition of small elementary and secondary schools
and small libraries as those with under $5 million in annual revenues.
Other entities of this sort may be considered small under the other two
prongs of the RFA. The most reliable source of information regarding
the total number of kindergarten through 12th grade (K-12) schools and
libraries nationwide of which we are aware appears to be data collected
by the United States Department of Education and the National Center
for Educational Statistics. Based on that information, it appears that
there are approximately 86,221 public and 26,093 private K-12 schools
in the United States (SIC 8211). It further appears that there are
approximately 15,904 libraries, including branches, in the United
States (SIC 8231). Although it seems certain that not all of these
schools and libraries would qualify as small entities under the SBA's
determination, we are unable at this time to estimate with greater
precision the number of small schools and libraries that would qualify
as small entities under the definition. Consequently, we estimate that
there are fewer than 86,221 public and 26,093 private schools and fewer
than 15,904 libraries that may be affected by the decisions and rules
adopted in this Order.
11. Neither the Commission nor the SBA has developed a definition
of small, rural health care providers. Section 254(h)(5)(B) defines the
term ``health care provider'' and sets forth the seven categories of
health care providers eligible to receive universal service support. We
estimate that there are: (1) 625 ``post-secondary educational
institutions offering health care instruction, teaching hospitals, and
medical schools,'' including 403 rural community colleges, 124 medical
schools with rural programs, and 98 rural teaching hospitals; (2) 1,200
``community health centers or health centers providing health care to
migrants;'' (3) 3,093 ``local health departments or agencies''
including 1,271 local health departments and 1,822 local boards of
health; (4) 2,000 ``community mental health centers;'' (5) 2,049 ``not-
for-profit hospitals;'' and (6) 3,329 ``rural health clinics.'' We do
not have sufficient information to make an estimate of the number of
consortia of health care providers at this time. The total of these
categorical numbers is 12,296. Consequently, we estimate that there are
fewer than 12,296 health care providers potentially affected by the
rules in this Order. For the purposes of ``small business'' analysis,
we note that
[[Page 56120]]
according to the SBA definition, hospitals must have annual gross
receipts of $5 million or less to qualify as a small business concern.
There are approximately 3,856 hospital firms, of which 294 have gross
annual receipts of $5 million or less. Although some of these small
hospital firms may not qualify as rural health care providers, we are
unable at this time to estimate with greater precision the number of
small hospital firms which may be affected by this Order. Consequently,
we estimate that there are fewer than 294 hospital firms affected by
this Order.
12. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements. This order will impose no additional
reporting, recordkeeping or other compliance requirements on small
entities.
13. Steps Taken to Minimize the Significant Economic Impact on
Small Entities and Significant Alternatives Considered. As explained in
the Order, based on the nearly unanimous comments received in response
to the September 10 Public Notice, the Commission concludes that all
applications filed during the window will be treated as if
simultaneously received. We find that adopting such a window period
will best serve the needs of applicants for universal service
discounts, and will assist the administrative corporations in
processing these requests in a timely manner. The Commission finds that
the window will reduce pressure on applicants to submit their contracts
at the earliest possible moment and, thus, will improve the accuracy
and care with which these contracts are negotiated and the accompanying
forms are completed. By providing additional time to complete contract
negotiations after the four-week competitive bid waiting period, a
window will allow schools to negotiate their contracts with greater
care. Further, this window will reduce disparities between applicants
with substantial administrative resources and applicants with fewer
resources, such as small schools, libraries, and health care providers.
We recognize, as noted by the commenters, that this window will not
eliminate all disparities among applicants. The Commission adopted
annual funding caps, $2.25 billion for schools and libraries and $400
million for health care providers, because it estimated that these
monies would be sufficient for all applicants during the funding year.
We emphasize that we have no reason to revise these estimates and have
no reason to believe that either of the caps will be reached during the
initial filing period, nor at any other point during the funding
period. We are adopting a window primarily to allow applicants
sufficient time to negotiate contracts properly and submit complete
filings.
14. The Commission will send a copy of the Order, including this
FRFA, in a report to be sent to Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of 1996. A copy of the Order and
this FRFA will also be published in the Federal Register and will be
sent to the Chief Counsel for Advocacy of the Small Business
Administration.
List of Subjects in 47 CFR Part 54
Libraries, Schools, Healthcare providers, Telecommunications,
Telephone.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Rule Changes
1. Part 54 of Title 47 of the Code of Federal Regulations (CFR) is
amended as follows:
PART 54--UNIVERSAL SERVICE
2. Section 54.507 is amended by adding the last three sentences to
paragraph (c) to read as follows:
Sec. 54.507 Cap.
* * * * *
(c) Requests. * * * The Schools and Libraries Corporation shall
implement an initial filing period that treats all schools and
libraries filing within that period as if they were simultaneously
received. The initial filing period shall begin on the date that the
Schools and Libraries Corporation begins to receive applications for
support, and shall conclude on a date to be determined by the Schools
and Libraries Corporation. The Schools and Libraries Corporation may
implement such additional filing periods as it deems necessary.
* * * * *
3. Section 54.623 is amended by adding the last three sentences to
paragraph (c) to read as follows:
Sec. 54.623 Cap.
* * * * *
(c) Requests. * * * The Rural Health Care Corporation shall
implement an initial filing period that treats all health care
providers filing within that period as if they were simultaneously
received. The initial filing period shall begin on the date that the
Rural Health Care Corporation begins to receive applications for
support, and shall conclude on a date to be determined by the Rural
Health Care Corporation. The Rural Health Care Corporation may
implement such additional filing periods as it deems necessary.
* * * * *
[FR Doc. 97-28612 Filed 10-28-97; 8:45 am]
BILLING CODE 6712-01-P