[Federal Register Volume 65, Number 29 (Friday, February 11, 2000)]
[Proposed Rules]
[Pages 6922-6924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3040]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 65, No. 29 / Friday, February 11, 2000 / 
Proposed Rules  

[[Page 6922]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1735

RIN 0572-AB53


General Policies, Types of Loans, Loan Requirements--
Telecommunications Program

AGENCY:  Rural Utilities Service, USDA.

ACTION:  Proposed rule.

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

SUMMARY:  The Rural Utilities Service (RUS) is proposing to amend its 
regulations to provide that applicants may seek financial assistance to 
provide mobile telecommunications service without regard to whether the 
applicant is providing basic local exchange service in the territory to 
be served. RUS is also clarifying its regulations with regard to the 
application of nonduplication provisions and state telecommunications 
modernization plans to mobile telecommunications services. In addition, 
RUS has included criteria for determining ``reasonably adequate 
service'' levels for mobile telecommunications service. This proposed 
rule is part of an ongoing RUS project to modernize agency policies in 
order to provide borrowers with the flexibility to continue providing 
reliable, modern telephone service at reasonable costs in rural areas, 
while maintaining the security and feasibility of the Government's 
loans.

DATES:  Written comments on this proposed rule must be received by RUS 
or carry a postmark or equivalent by March 13, 2000.

ADDRESSES:  Written comments on this proposed rule should be addressed 
to Roberta D. Purcell, Assistant Administrator, Telecommunications 
Program, Rural Utilities Service, 1400 Independence Avenue, SW., Room 
4056, STOP 1590, Washington, DC 20250-1590. RUS requires a signed 
original and three copies of all comments (7 CFR part 1700.4). All 
comments received will be available for public inspection in room 4056, 
South Building, U.S. Department of Agriculture, Washington, DC, between 
8:00 a.m. and 4:00 p.m., Monday through Friday (7 CFR part 1.27(b)).

FOR FURTHER INFORMATION CONTACT:  Jonathan P. Claffey, Deputy Assistant 
Administrator, Telecommunications Program, Rural Utilities Service, 
1400 Independence Avenue, SW., Room 4056, STOP 1590, Washington, DC 
20250-1590. Telephone: (202) 720-9556.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule has been determined to be not significant and, 
therefore, has not been reviewed by the Office of Management and Budget 
under Executive Order 12866.

Executive Order 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988, Civil Justice Reform. RUS has determined that this 
proposed rule meets the applicable standards provided in section 3 of 
that Executive Order. In addition, all State and local laws and 
regulations that are in conflict with this rule will be preempted; no 
retroactive effect will be given to this rule; and, in accordance with 
section 212(e) of the Department of Agriculture Reorganization Act of 
1994 (7 U.S.C. 6912(e)), administrative appeal procedures, if any are 
required, must be exhausted prior to initiating litigation against the 
Department or its agencies.

Regulatory Flexibility Act Certification

    RUS has determined that this proposed rule will not have a 
significant economic impact on a substantial number of small entities, 
as defined by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
The RUS telecommunications loan program provides borrowers with loans 
at interest rates and terms that are more favorable than those 
generally available from the private sector. RUS borrowers, as a result 
of obtaining federal financing, receive economic benefits that exceed 
any direct cost associated with complying with RUS regulations and 
requirements.

Information Collection and Recordkeeping Requirements

    This proposed rule contains no new reporting or recordkeeping 
burdens under OMB control number 0572-0079 that would require approval 
under the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).
    Send questions or comments regarding this burden or any other 
aspect of these collections of information, including suggestions for 
reducing the burden to F. Lamont Heppe, Director, Program Development 
and Regulatory Analysis, Rural Utilities Service, 1400 Independence 
Avenue, SW., Room 4034, STOP 1522, Washington, DC 20250-1522.

National Environmental Policy Act Certification

    The Administrator of RUS has determined that this proposed rule 
will not significantly affect the quality of the human environment as 
defined by the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.). Therefore, this action does not require an environmental 
impact statement or assessment.

Catalog of Federal Domestic Assistance

    The program described by this proposed rule is listed in the 
Catalog of Federal Domestic Assistance programs under numbers 10.851, 
Rural Telephone Loans and Loan Guarantees, and 10.852, Rural Telephone 
Bank Loans. This catalog is available on a subscription basis from the 
Superintendent of Documents, the United States Government Printing 
Office, Washington, 20402-9325. Telephone: (202) 512-1800.

Executive Order 12372

    This program is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require consultation with 
State and local officials. See the final rule related notice entitled 
``Department Programs and Activities Excluded from Executive Order 
12372,'' (50 FR 47034).

Unfunded Mandates

    This proposed rule contains no Federal Mandates (under the 
regulatory provisions of title II of the Unfunded Mandates Reform Act 
of 1995) for State, local, and tribal governments or the private 
sector. Thus, this proposed rule

[[Page 6923]]

is not subject to the requirements of sections 202 and 205 of the 
Unfunded Mandates Reform Act of 1995.

Background

    The telecommunications industry is becoming increasingly 
competitive. The Telecommunications Act of 1996 (Public Law 104-104) 
and regulatory actions by the Federal Communications Commission are 
drastically altering the regulatory and business environment of all 
telecommunications systems, including RUS borrowers. At the same time, 
changes in overall business trends and technologies continue to place 
pressure on RUS-financed systems to offer a wider array of services and 
to operate more efficiently.
    RUS regulations currently stipulate that an entity must provide or 
propose to provide the basic local exchange telephone service needs of 
rural areas to be eligible for RUS financing (7 CFR 1735.14, Borrower 
Eligibility) and that loans cannot be made for facilities to serve 
subscribers outside the borrower's local exchange service area (7 CFR 
1735.17, Facilities Financed). The Telecommunications Act of 1996, 
however, made the term ``basic local exchange service'' obsolete. The 
law mandates that universally available and affordable 
telecommunications services, including access to advanced services, be 
made available to all US citizens--whether in rural areas or city 
centers, affluent or poor communities. RUS supports this mandate and 
the goal that, with the assistance of advanced telecommunications 
technology, rural citizens be provided the same economic, educational, 
and health care benefits available in the larger metropolitan areas. 
RUS believes that the most expeditious way to bring the full range of 
telephone services to rural areas is to make certain providers of 
services, in addition to providers of local exchange services, eligible 
for RUS financing. Mobile telecommunications services are included 
among the telephone services financeable under the Rural 
Electrification Act (RE Act) and contemplated in the Telecommunication 
Act of 1996. Mobile telecommunications service is fundamentally 
different from wireline service and RUS believes that, in addition to 
wireline service, mobile telecommunications services should be made 
available in all rural areas. Therefore, RUS is deleting its 
requirement that all borrowers provide local exchange service. Since 
mobile telecommunications services do not and cannot serve the same 
function as contemplated in state telecommunications modernization 
plans (TMPs) for wireline services (see 7 CFR 1751.106), RUS policy is 
to consider a borrower receiving a loan to finance such services to be 
participating in the state's plan so long as the loan funds are not 
used in a manner that, in RUS' opinion, is inconsistent with the 
borrower achieving the goals set forth in the plan. RUS will continue 
to follow this policy regardless of whether the borrower provides any 
local exchange services. In addition, RUS has included criteria for 
determining ``reasonably adequate service'' levels for mobile 
telecommunications service.
    RUS regulations are also utilized by the Governor of the Rural 
Telephone Bank in carrying out the Rural Telephone Bank's (the Bank) 
loan program; therefore, these policy revisions would apply to loans 
made by the Bank, as well.

List of Subjects in 7 CFR Part 1735

    Accounting, Loan programs--communications, Reporting and 
recordkeeping requirements, Rural areas, Telephone.

    For the reasons set forth in the preamble, 7 CFR chapter XVII is 
proposed to be amended as follows:

PART 1735--GENERAL POLICIES, TYPES OF LOANS, LOAN REQUIREMENTS--
TELECOMMUNICATIONS PROGRAM

    The authority citation for part 1735 is revised to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., and 6941 et seq.

    2. In Sec. 1735.2, the following definitions are added in 
alphabetical order to read as follows:


Sec. 1735.2  Definitions.

* * * * *
    Mobile telecommunications service means the transmission of a radio 
communication voice service between mobile and land or fixed stations, 
or between mobile stations.
* * * * *
    Public switched network means any common carrier switched network, 
whether by wire or radio, including local exchange carriers, 
interexchange carriers, and mobile telecommunications service 
providers, that use the North American Numbering Plan in connection 
with the provision of switched services.
    RUS means the Rural Utilities Service, an agency of the United 
States Department of Agriculture, successor to the Rural 
Electrification Administration.
* * * * *
    3. Amend Sec. 1735.10 by:
    A. Revising paragraph (b);
    B. Redesignating paragraphs (c), (d), and (e) as (d), (e), and (f), 
respectively; and
    C. Add a new paragraph (c).
    The revision and addition read as follows:


Sec. 1735.10  General.

* * * * *
    (b) RUS will not make hardship loans, RUS cost-of-money loans, or 
RTB loans for any wireline local exchange service or similar fixed-
station voice service that, in RUS' opinion, is inconsistent with the 
borrower achieving the requirements stated in the State's 
telecommunication modernization plan within the time frame stated in 
the plan (see 7 CFR part 1751, subpart B), unless RUS has determined 
that achieving the requirements as stated in such plan is not 
technically or economically feasible.
    (c) A borrower applying for a loan to finance mobile 
telecommunication services shall be considered to be a participant in 
the State's telecommunication modernization plan so long as the loan 
funds are not used in a manner that, in the opinion of the 
Administrator, is inconsistent with the borrower achieving the goals 
set forth in the plan.
* * * * *
    4. Amend Sec. 1735.12 by:
    A. Revising paragraph (c) introductory text; and
    B. Adding new paragraphs (d) and (e).
    The revision and addition read as follows:


Sec. 1735.12  Nonduplication.

* * * * *
    (c) RUS shall consider the following criteria for any wireline 
local exchange service or similar fixed-station voice service in 
determining whether such service is reasonably adequate:
* * * * *
    (d) RUS shall consider the following criteria for any of mobile 
telecommunications service in determining whether such service is 
reasonably adequate:
    (1) The extent to which area coverage is being provided as 
described in 7 CFR 1735.11.
    (2) Clear and reliable call transmission is provided with 
sufficient channel availability.
    (3) The mobile telecommunications service signal strength is at 
least--85dBm (decibels expressed in miliwatts).
    (4) The mobile telecommunications service is interconnected with 
the public switched network.
    (5) Mobile 911 service is available to all subscribers, when 
requested by the

[[Page 6924]]

local government entity responsible for this service.
    (6) No Federal or State regulatory commission having jurisdiction 
has determined that the quality, availability, or reliability of the 
service provided is inadequate.
    (7) Mobile telecommunications service is not provided at rates 
which render the service unaffordable to a majority of the rural 
persons.
    (8) Any other criteria the Administrator determines to be 
applicable to the particular case.
    (e) RUS does not consider mobile telecommunications service 
facilities a duplication of existing wireline local exchange service or 
similar fixed-station voice facilities. RUS may finance mobile 
telecommunications systems designed to provide eligible services in 
rural areas under the Rural Electrification Act even though the 
services provided by the system may incidentally overlap services of 
existing mobile telecommunications providers.
    5. Amend Sec. 1735.14 by:
    A. Removing paragraph (c)(1);
    B. Redesignating paragraphs (c)(2) and (c)(3) as (c)(1) and (c)(2), 
respectively; and
    C. Adding paragraph (d).
    The addition reads as follows:


Sec. 1735.14  Borrower eligibility.

* * * * *
    (d) Generally, RUS will not make a loan to another entity to 
provide the same telecommunications service in an area served by an 
existing RUS telecommunications borrower providing such service.


Sec. 1735.17  [Amended]

    6. Amend Sec. 1735.17 by:
    A. Removing paragraph (c)(3); and
    B. Redesignating paragraphs (c)(4) and (c)(5) as (c)(3) and (c)(4), 
respectively.

    Dated: February 2, 2000.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 00-3040 Filed 2-10-00; 8:45 am]
BILLING CODE 3410-15-P