[Federal Register Volume 65, Number 151 (Friday, August 4, 2000)]
[Rules and Regulations]
[Pages 47883-47906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19611]



[[Page 47883]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[CC Docket No. 96-45; FCC 00-208]


Federal-State Joint Board on Universal Service: Promoting 
Deployment and Subscribership in Unserved and Underserved Areas, 
Including Tribal and Insular Areas

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission adopts measures to promote 
telecommunications subscribership and infrastructure deployment within 
American Indian and Alaska Native tribal communities; to establish a 
framework for the resolution of eligible telecommunications carrier 
designation requests under section 214(e)(6) of the Telecom Act; and to 
apply the framework to pending petitions for designation as eligible 
telecommunications carriers.

DATES: Effective September 5, 2000 except for Secs. 54.401(d), 
54.403(a)(2), 54.403(a)(3), 54.403(a)(4)(ii), 54.405(b), 54.409(c), 
54.411(d), and 54.415(c), which contain information collection 
requirements that have not been approved by the Office of Management 
and Budget (OMB). The Commission will publish a document in the Federal 
Register announcing the effective date of those sections.

FOR FURTHER INFORMATION CONTACT: Gene Fullano, Attorney, Common Carrier 
Bureau, Accounting Policy Division, (202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Twelfth Report and Order and Memorandum Opinion and Order in CC Docket 
No. 96-45 released on June 30, 2000. The full text of this document is 
available for public inspection during regular business hours in the 
FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., 
Washington, DC 20554.

I. Introduction

    1. In this Order, we adopt measures to: (1) Promote 
telecommunications subscribership and infrastructure deployment within 
American Indian and Alaska Native tribal communities; (2) establish a 
framework for the resolution of eligible telecommunications carrier 
designation requests under section 214(e)(6) of the Telecom Act; and 
(3) apply the framework to pending petitions for designation as 
eligible telecommunications carriers filed by Cellco Partnership d/b/a 
Bell Atlantic Mobile, Inc., Western Wireless Corporation, Smith Bagley, 
Inc., and the Cheyenne River Sioux Tribe Telephone Authority.
    2. An important goal of the Telecommunications Act of 1996 is to 
preserve and advance universal service. The 1996 Act provides that 
``[c]onsumers in all regions of the Nation, including low-income 
consumers and those in rural, insular, and high[-]cost areas, should 
have access to telecommunications and information services. * * *'' In 
the Further Notice of Proposed Rulemaking (FNPRM), 64 FR 52738 
(September 30, 1999), of this proceeding, we sought to identify the 
impediments to increased telecommunications deployment and 
subscribership in unserved and underserved regions of our Nation, 
including tribal lands and insular areas, and proposed particular 
changes to our universal service rules to overcome these impediments. 
Although approximately 94 percent of all households in the United 
States have telephone service today, penetration levels among 
particular areas and populations are significantly below the national 
average. For example, only 76.7 percent of rural households earning 
less than $5,000 have a telephone, and only 47 percent of Indian tribal 
households on reservations and other tribal lands have a telephone. 
These statistics demonstrate, most notably, that existing universal 
service support mechanisms are not adequate to sustain telephone 
subscribership on tribal lands.
    3. Central to the issues addressed in the FNPRM, is the notion that 
basic telecommunications services are a fundamental necessity in modern 
society. As our society increasingly relies on telecommunications 
technology for employment and access to public services, such 
telecommunications services have become a practical necessity. The 
absence of telecommunications services within a home places its 
occupants at a disadvantage when seeking to contact, or be contacted 
by, employers and potential employers. The inability to contact police, 
fire departments, and medical service providers in an emergency 
situation may have, and in some areas routinely does have, life-
threatening consequences. In geographically remote areas, access to 
telecommunications services can minimize health and safety risks 
associated with geographic isolation by providing people access to 
critical information and services they may need. Basic 
telecommunications services also may provide a source of access to more 
advanced services. For example, voice telephone is currently the most 
common means of household access to the Internet, and the same copper 
loop used to provide ordinary voice telephone service also may be used 
for broadband services. Thus, as use of advanced services among the 
general population increases, those without basic telecommunications 
services may find themselves falling further behind in a number of 
ways. In its Falling Through the Net report, the U.S. Department of 
Commerce's National Telecommunications and Information Administration 
(NTIA) found that, while ``[o]verall * * * the number of Americans 
connected to the nation's information infrastructure is soaring,'' the 
benefits of even basic telecommunications services have not reached 
certain segments of our population.
    4. This Order represents the culmination of an ongoing examination 
of the issues involved in providing access to telephone service for 
Indians on reservations. This process began when the Commission 
convened two meetings in April and July of 1998, which brought Indian 
tribal leaders and senior representatives from other federal agencies 
to the Commission to meet with FCC Commissioners and Commission staff. 
The Commission then organized formal field hearings in January 1999 at 
the Indian Pueblo Cultural Center in Albuquerque, New Mexico, and in 
March 1999 at the Gila River Indian Community in Chandler, Arizona, at 
which Indian tribal leaders, telecommunications service providers, 
local public officials, and consumer advocates testified on numerous 
issues, including subscribership levels and the cost of delivering 
telecommunications services to Indians on tribal lands, as well as 
jurisdictional and sovereignty issues associated with the provision of 
telecommunications services on tribal lands. Based on information and 
analysis provided during these proceedings, the Commission initiated 
two rulemakings: one proposing changes to our universal service rules 
to promote deployment of telecommunications infrastructure and 
subscribership on tribal lands, and the other proposing changes to our 
wireless service rules to encourage the deployment of wireless service 
on tribal lands.
    5. In this Order, we take the first in a series of steps to address 
the causes of low subscribership within certain segments of our 
population. The extent to which telephone penetration levels

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fall below the national average on tribal lands underscores the need 
for immediate Commission action to promote the deployment of 
telecommunications facilities in tribal areas and to provide the 
support necessary to increase subscribership in these areas. We adopt 
measures at this time to promote telecommunications deployment and 
subscribership for the benefit of those living on federally-recognized 
American Indian and Alaska Native tribal lands, based on the fact that 
American Indian and Alaska Native communities, on average, have the 
lowest reported telephone subscribership levels in the country. Toward 
this end, we adopt amendments to our universal service rules and 
provide additional, targeted support under the Commission's low-income 
programs to create financial incentives for eligible telecommunications 
carriers to serve, and deploy telecommunications facilities in, areas 
that previously may have been regarded as high risk and unprofitable. 
By enhancing tribal communities' access to telecommunications services, 
the measures we adopt are consistent with our obligations under the 
historic federal trust relationship between the federal government and 
federally-recognized Indian tribes to encourage tribal sovereignty and 
self-governance. Specifically, by enhancing tribal communities' access 
to telecommunications, including access to interexchange services, 
advanced telecommunications, and information services, we increase 
their access to education, commerce, government, and public services. 
Furthermore, by helping to bridge the physical distances between low-
income consumers on tribal lands and the emergency, medical, 
employment, and other services that they may need, our actions ensure a 
standard of livability for tribal communities. To ensure their 
effectiveness in addressing the low subscribership levels on tribal 
lands, we intend to monitor the impact of the enhanced federal support 
measures and to adjust the measures as appropriate.
    6. In response to the requests of Indian tribal leaders, we have 
adopted a statement of policy that recognizes the principles of tribal 
sovereignty and self-government inherent in the relationships between 
federally-recognized Indian tribes and the federal government. In 
conjunction with our efforts to adopt policies that further tribal 
sovereignty and tribal self-determination, we note the Commission's 
upcoming Indian Telecom Training Initiative, in which the Commission 
will bring together experts on telecommunications law and technologies 
to provide information to tribal leaders and other interested parties 
to promote telecommunications deployment and subscribership on tribal 
lands.
    7. In this Order, we also offer guidance on those circumstances in 
which the Commission will exercise its authority to designate eligible 
telecommunications carriers under section 214(e)(6) of the Telecom Act. 
We conclude that, consistent with the Act and the legislative history 
of section 214(e) of the Telecom Act, state commissions have the 
primary responsibility for the designation of eligible 
telecommunications carriers under section 214(e)(2) of the Telecom Act. 
We direct carriers seeking designation as an eligible 
telecommunications carrier for service provided on non-tribal lands to 
first consult with the state commission, even if the carrier asserts 
that the state commission lacks jurisdiction. We will act on a section 
214(e)(6) of the Telecom Act designation request from a carrier 
providing service on non-tribal lands only in those situations where 
the carrier can provide the Commission with an affirmative statement 
from the state commission or a court of competent jurisdiction that the 
carrier is not subject to the state commission's jurisdiction.
    8. We recognize, however, that a determination as to whether a 
state commission lacks jurisdiction over carriers serving tribal lands 
involves a legally complex and fact-specific inquiry, informed by 
principles of tribal sovereignty, treaties, federal Indian law, and 
state law. Such jurisdictional ambiguities may unnecessarily delay the 
designation of carriers on tribal lands. In light of the unique federal 
trust relationship between the federal government and Indian tribes and 
the low subscribership levels on tribal lands, we establish a framework 
designed to streamline the eligibility designation of carriers 
providing service on tribal lands. Under this framework, carriers 
seeking a designation of eligibility for service provided on tribal 
lands may petition the Commission for designation under section 
214(e)(6) of the Telecom Act. The Commission will proceed to a 
determination on the merits of such a petition if the Commission 
determines that the carrier is not subject to the jurisdiction of a 
state commission. We apply the framework adopted in this Order to 
several pending requests for eligible telecommunications carrier 
designation on tribal and non-tribal lands.
    9. We also recognize that excessive delay in the designation of 
competing providers may hinder the development of competition and the 
availability of service in many high-cost areas. We therefore commit to 
resolve requests for designation for the provision of service on non-
tribal lands that are properly before us pursuant to section 214(e)(6) 
of the Telecom Act within six months of the date of filing. Similarly, 
we commit to resolve the merits of a request for designation for the 
provision of service on tribal lands within six months of our 
determination that the carrier is not subject to the jurisdiction of a 
state commission. We encourage state commissions to act accordingly, 
and resolve designation requests filed pursuant to section 214(e)(2) of 
the Telecom Act within six months.

II. Low-Income Initiatives To Improve Access to Telecommunications 
Services and Subscribership on Tribal Lands

A. Definitions of ``Indian Tribe'' and ``Tribal Lands''

    10. For purposes of this Order, we define the terms ``Indian 
tribe,'' ``reservation,'' and ``near reservation'' as those terms are 
defined in Subpart A of the regulations promulgated by the United 
States Department of the Interior's Bureau of Indian Affairs (BIA). In 
light of our decision to adopt rules to benefit low-income individuals 
living on Indian tribal lands, we use, for purposes of this Order, the 
definition of ``Indian tribe'' contained in section 20.1(p) of the BIA 
regulations. That definition includes ``any Indian tribe, band, nation, 
rancheria, pueblo, colony, or community, including any Alaska Native 
village or regional or village corporation as defined in or established 
pursuant to the Alaska Native Claims Settlement Act (85 Stat. 688) 
which is federally recognized as eligible by the U.S. Government for 
the special programs and services provided by the Secretary [of the 
Interior] to Indians because of their status as Indians.'' Although 
there are minor variations between this definition and the statutory 
definition of ``Indian tribe'' in section 479a(2) and cited in the 
FNPRM, the characteristic common to both definitions that is relevant 
for our purposes is that both refer to the list of entities compiled 
and published by the Secretary of the Interior.
    11. For purposes of identifying the geographic areas within which 
the rule amendments set forth will apply, we define the term ``tribal 
lands'' to include the BIA definitions of ``reservation'' and ``near 
reservation'' contained in sections 20.1(v) and 20.1(r) of the BIA

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regulations, respectively. The term ``reservation'' means ``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.'' ``Near reservation'' means those 
areas or communities adjacent or contiguous to reservations that are 
designated as such by the Department of Interior's Commissioner of 
Indian Affairs, and whose designations are published in the Federal 
Register.
    12. We define the term ``tribal lands'' to include the BIA 
definitions of ``reservation'' and ``near reservation'' because these 
definitions appear to encompass the geographic areas in which the 
Commission may adopt, consistent with principles of Indian sovereignty 
and the special trust relationship, rule changes to benefit members of 
federally-recognized Indian tribes. In particular, we agree with 
commenters who argue that Alaska Native Statistical Areas and other 
lands conveyed pursuant to the Alaska Native Claims Settlement Act, 
although not Indian reservations, should be included within the 
definition of tribal lands insofar as these lands are federally-
recognized lands that are inhabited by Alaska Native tribes. The BIA 
definition of ``near reservation'' includes lands adjacent or 
contiguous to reservations that generally have been considered tribal 
lands for purposes of other federal programs targeted to federally-
recognized Indian tribes. Again, we conclude that such lands properly 
should be included within our definition insofar as they are Indian 
lands on which principles of Indian sovereignty and the special trust 
relationship apply. To exclude the ``near reservation'' lands 
designated by the Department of the Interior or lands on which tribal 
members in Alaska live, in our view, would unfairly penalize tribal 
members who live in tribal communities, but for historic or other 
reasons, do not live on an Indian reservation.
    13. We believe that using the BIA regulations to define and 
identify the geographic areas to which our rule amendments will apply 
offers significant advantages in the ease of its administration. 
Specifically, the BIA definitions of ``reservation'' and ``near 
reservation'' provide a widely used and readily verifiable standard by 
which tribes may establish and carriers may verify the eligibility of 
individuals who qualify for the targeted assistance made available by 
this Order. We note that the classification ``on or near a 
reservation'' is used by BIA in administration of its financial 
assistance and social services programs for Indian tribes. If BIA or 
Congress should modify these definitions in the future, we intend such 
modifications to apply in equal measure to the classifications adopted 
in this Order without further action on our part. We believe that this 
action is consistent with our goal of using a widely used and readily 
verifiable standard for defining these terms.

B. Bases for Commission Action To Increase Subscribership on Tribal 
Lands

(1) Authority To Take Action To Improve Access to Telecommunications 
Services and Subscribership on Tribal Lands
    14. Section 254(b) of the Telecom Act sets forth the principles 
that guide the Commission in establishing policies for the preservation 
and advancement of universal service. Included among these is the 
principle that ``quality services should be available at just, 
reasonable, and affordable rates.'' Our authority to take action to 
remedy the disproportionately lower levels of infrastructure deployment 
and subscribership prevalent among tribal communities derives from 
sections 1, 4(i), 201, 205, as well as 254 of the Telecom Act. As 
discussed, the record before us suggests that the disproportionately 
lower-than-average subscribership levels on tribal lands are largely 
due to the lack of access to and/or affordability of telecommunications 
services in these areas (as compared with cultural or individual 
preferences that cause individuals to choose not to subscribe). Along 
with depressed economic conditions and low per capita incomes, 
commenters have identified the following factors as the primary 
impediments to subscribership on tribal lands: (1) The cost of basic 
service in certain areas (as high as $38 per month in some areas); (2) 
the cost of intrastate toll service (limited local calling areas); (3) 
inadequate telecommunications infrastructure and the cost of line 
extensions and facilities deployment in remote, sparsely populated 
areas; and (4) the lack of competitive service providers offering 
alternative technologies. We note that no tribal representative in this 
proceeding has suggested that cultural or personal preference accounts 
for low subscribership levels within or among particular tribes. Based 
on the substantial Indian tribal participation in this proceeding and 
in the Commission's proceedings in WT Docket No. 99-266 and BO Docket 
No. 99-11, we do not have any evidence to conclude that cultural or 
personal factors generally explain low subscribership levels on tribal 
lands.
    15. We conclude that the unavailability or unaffordability of 
telecommunications service on tribal lands is at odds with our 
statutory goal of ensuring access to such services to ``[c]onsumers in 
all regions of the Nation, including low-income consumers.'' In 
addition, the lack of access to affordable telecommunications services 
on tribal lands is inconsistent with our statutory directive ``to make 
available, so far as possible, to all the people of the United States, 
without discrimination on the basis of race, color, religion, national 
origin, or sex, a rapid, efficient Nationwide * * * wire and radio 
communication service, with adequate facilities at reasonable 
charges.'' In the Universal Service Order, 62 FR 32862 (June 17, 1997) 
the Commission stated that, where ``necessary and appropriate,'' the 
Commission, working with an affected state or U.S. territory or 
possession, will open an inquiry to address instances of low or 
declining subscribership levels and take such action as is necessary to 
fulfill the requirements of section 254 of the Telecom Act.
    16. Our authority to alter our rules in ways targeted to benefit 
tribal communities also must be informed by the principles of federal 
Indian law that arise from the unique trust relationship between the 
federal government and Indian tribes. That relationship has been 
characterized as ``unlike that of any other two people in existence,'' 
and ``marked by peculiar and cardinal distinctions which exist no where 
else.'' The Supreme Court has repeatedly ``recognized the distinctive 
obligation of trust incumbent upon the [Federal] Government'' in its 
dealings with Indian tribes. Moreover, Congress and the courts have 
recognized the federal government's responsibility to promote self-
government among tribal communities as an important facet of the 
federal trust relationship. In Morton v. Mancari, for example, the 
Supreme Court upheld a federal regulation establishing a hiring 
preference for members of Indian tribes as consistent with the goal of 
promoting Indian self-government. In that case, the Court noted that 
``literally every piece of legislation dealing with Indian tribes and 
reservations * * * singles out for special treatment a constituency of 
tribal Indians living on or near reservations.''
    17. By enhancing tribal communities' access to telecommunications 
services, the measures we adopt today are consistent with our federal 
trust

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responsibility to encourage tribal sovereignty and self-governance. 
Specifically, by enhancing tribal communities' access to 
telecommunications, including access to interexchange services, 
advanced telecommunications, and information services, we increase 
tribal communities' access to education, commerce, government, and 
public services. Furthermore, by helping to bridge physical distances 
between low-income individuals living on tribal lands and the 
emergency, medical, employment, and other services that they may need, 
our actions further our federal trust responsibility to ensure a 
standard of livability for members of Indian tribes on tribal lands.
(2) Subscribership Levels on Tribal Lands
    18. Section 254(i) of the Telecom Act requires that the Commission 
and the states ensure that universal service is available at rates that 
are just, reasonable, and affordable. In the Universal Service Order, 
the Commission adopted the finding of the Joint Board that 
subscribership levels provide relevant information regarding whether 
consumers have the means to subscribe to universal service and, thus, 
represent an important tool in evaluating the affordability of rates. 
The Commission found that subscribership levels alone, however, do not 
reveal whether consumers are spending a disproportionate amount of 
income on telecommunications services or whether paying the rates 
charged for services imposes a hardship for those who subscribe. The 
Commission concurred in the recommendation of the Joint Board that a 
determination of affordability take into consideration both rate levels 
and non-rate factors, such as consumer income levels, that can be used 
to assess the financial burden subscribing to universal service places 
on consumers. The Commission also adopted the Joint Board's finding 
that the scope of a local calling area ``directly and significantly 
impacts affordability'' of universal service.
    19. Consistent with our statutory goal of preserving and advancing 
universal service and of ensuring that consumers in all regions of the 
Nation have access to the services supported by federal universal 
service support mechanisms, we modify our universal service rules, as 
set forth, to increase telecommunications infrastructure deployment and 
subscribership on tribal lands. We take action at this time primarily 
for the benefit of low-income individuals living on tribal lands, as 
that term is defined, because of the critically low telephone 
subscribership levels that are reported in these areas. Specifically, 
statistics demonstrate that, although approximately 94 percent of all 
Americans have a telephone, only 47 percent of Indians on reservations 
and other tribal lands have a telephone. Similarly, an analysis of 1990 
Census data found that Indians represent 89 percent of the Nation's 
population in the one hundred zip codes with the lowest subscribership 
levels. More recent studies of subscribership levels for individual 
tribes suggest that subscribership levels for many tribes remain 
significantly below the national average.
    20. Consistent with recent research that demonstrates that 
telephone penetration correlates directly with income, federal 
statistics reveal that tribal communities are among the poorest 
populations in the United States. For example, according to 1990 data 
published by the Bureau of the Census, the per capita income of Native 
Americans living on tribal lands was only $4,478, as compared with the 
$14,420 per capita income in the United States as a whole. At the time 
of the 1990 Census data collection, almost 51 percent of American 
Indians residing on reservations and trust lands had incomes below the 
poverty level, compared to 13 percent of United States residents 
nationwide with incomes below this level. Unemployment levels for a 
sample of 48 tribes averaged 42 percent as compared to the national 
unemployment figure of 4.5 percent. The record before us suggests that 
there is a correlation between low subscribership levels and low 
incomes on tribal lands. Indeed, the majority of commenters identify 
low incomes or impoverishment as the key reason for low subscribership 
levels on tribal lands.
    21. Based on our review of these statistics and the record before 
us, and consistent with the unique trust relationship between the 
federal government and members of Indian tribes, we conclude that 
specific action is needed to address the impediments to subscribership 
on tribal lands and to ensure affordable access to telecommunications 
services in these areas. Specifically, the significantly lower-than-
average incomes and subscribership levels of members of federally-
recognized Indian tribes warrant our immediate action to increase 
subscribership and improve access to telecommunications on tribal 
lands.
    22. We conclude that the potential benefits to tribal members will 
only increase by extending to non-Indians living on tribal lands, as 
well as Indians, the measures we adopt Of this Order. First, we believe 
that, by increasing the total number of individuals, both Indian and 
non-Indian, who are connected to the network within a tribal community 
the value of the network for tribal members in that community is 
greatly enhanced. Implicit in our decision to extend the availability 
of enhanced federal support to all low-income individuals living on 
tribal lands, is our recognition of the likelihood that non-Indian, 
low-income households on tribal lands may face the same or similar 
economic and geographic barriers as those faced by low-income Indian 
households.
    23. Second, we believe that increasing the total number of 
individuals, both Indian and non-Indian, who are connected to the 
network within a tribal community will result in greater incentives for 
eligible telecommunications carriers to serve in those areas. We 
anticipate that the availability of enhanced federal support for all 
low-income individuals living on tribal lands will maximize the number 
of subscribers in such a community who can afford service and, 
therefore, make it a more attractive community for carrier investment 
and deployment of telecommunications infrastructure. As the number of 
potential subscribers grows in tribal communities, carriers may achieve 
greater economies of scale and scope when deploying facilities and 
providing service within a particular community.
    24. Finally, we believe that, by extending the availability of 
enhanced federal support to all low-income individuals residing on 
tribal lands, carriers will avoid the administrative burden associated 
with distinguishing between low-income individuals who are members of 
federally-recognized tribes living on tribal lands and all other low-
income individuals living on tribal lands. By reducing the possible 
administrative burdens associated with implementation of the enhanced 
federal support, we intend to eliminate a potential disincentive to 
providing service on tribal lands.
    25. At this time, we do not adopt commenters' suggestions to apply 
the actions taken in this Order more generally to all high-cost areas 
and all insular areas. Although the record demonstrates that 
subscribership levels are below the national average in low-income, 
rural areas and in certain insular areas, the significant degree to 
which subscribership levels fall below the national average among 
tribal communities underscores the need for immediate Commission 
intervention for

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the benefit of this population. The record before us does not permit a 
determination that the factors causing low subscribership on tribal 
lands are the same factors causing low subscribership among other 
populations. Indeed, the presence of certain additional factors on 
tribal lands that may not be present in non-tribal areas, and which 
appear to create disincentives for carriers to provide service in these 
areas, suggests that the identical strategy adopted in this Order to 
boost subscribership levels on tribal lands may not be appropriate for 
increasing subscribership in other areas. Specifically, the following 
combination of factors may increase the cost of entry and reduce the 
profitability of providing service on tribal lands: (1) The lack of 
basic infrastructure in many tribal communities; (2) a high 
concentration of low-income individuals with few business subscribers; 
(3) cultural and language barriers where carriers serving a tribal 
community may lack familiarity with the Native language and customs of 
that community; (4) the process of obtaining access to rights-of-way on 
tribal lands where tribal authorities control such access; and (5) 
jurisdictional issues that may arise where there are questions 
concerning whether a state may assert jurisdiction over the provision 
of telecommunications services on tribal lands.
    26. We are concerned that to devise a remedy addressing all low 
subscribership issues for all unserved or underserved populations 
simultaneously might unnecessarily delay action on behalf of those who 
are least served, i.e., tribal communities. We do not believe that we 
should delay action to benefit those who, based on national statistics 
and the record before us, comprise the most underserved segment of our 
population. We will, however, continue to examine and address the 
causes of low subscribership in other areas and among other populations 
within the United States and, in conjunction with the release of the 
2000 Census data, we will take action as appropriate at that time to 
address low subscribership among such other populations.
    27. Several incumbent local exchange carriers serving tribal 
communities indicate that subscribership levels among tribal 
communities within their service territories are higher than the 
nationwide average penetration rate for Indians on reservations and 
other tribal lands. These comments do not lead us to alter our 
conclusion that Commission action is warranted to improve 
subscribership levels for low-income individuals on tribal lands. As an 
initial matter, we recognize that penetration levels for particular 
tribal communities may exceed the 47 percent national average for 
Indians on tribal lands, just as certain tribes may be below the 
national average of 47 percent. This fact, however, is not inconsistent 
with our decision to adopt measures to benefit tribal communities 
generally because we are targeting our actions to low-income 
individuals on tribal lands, who we anticipate will have the lowest 
subscribership levels in these areas. Specifically, because research 
indicates that there is a correlation between income and subscribership 
levels, we anticipate that our actions will benefit tribal communities 
whose subscribership levels, as a function of low average per capita 
incomes, are closer to, or less than, the 47 percent national average 
for Indians on reservations.
    28. Although we recognize the achievements of rural carriers 
serving tribal lands in improving subscribership levels in these areas, 
the fact that carriers employ various methodologies when measuring 
subscribership levels within their service territories limits the 
utility of particular statistics beyond the specific service 
territories. For example, statistics that measure the number or 
percentage of homes passed within a carrier's total service territory 
on a reservation do not reveal the number or percentage of households 
that, notwithstanding the fact that facilities are present, do not 
subscribe because they cannot afford telephone service. Even where 
subscribership statistics measure the number or percentage of 
households within a carrier's territory that have telephone service, 
those statistics provide no measure of reservation households outside 
of the carrier's service territory that have access to facilities or 
take service. Therefore, we conclude that nationwide and regional 
statistics that measure actual subscribership throughout tribal areas 
provide a more complete picture than do statistics that measure only 
the number of homes passed within particular service territories.

C. Enhanced Federal Lifeline and Expanded Link Up Support for 
Qualifying Low-Income Consumers Living on Tribal Lands

a. Enhanced Lifeline Support for Qualifying Low-Income Consumers Living 
on Tribal Lands
    29. In this Order, we create a fourth tier of federal Lifeline 
support available to eligible telecommunications carriers serving 
qualifying low-income individuals living on tribal lands. This fourth 
tier of federal Lifeline support will consist of up to an additional 
$25 per month, per primary residential connection for each qualifying 
low-income individual living on tribal lands. This amount, in 
conjunction with the first-tier baseline (ranging from $3.50 to $4.35 
after July 1, 2000) and $1.75 second-tier ``non-matching'' federal 
support amounts, will entitle each qualifying low-income consumer on 
tribal lands to a reduction in its basic local service bill of up to 
$31.10 per month. In taking this action, we follow the example of 
states such as New York and require all qualifying low-income 
individuals on tribal lands to pay a minimum monthly Lifeline rate of 
$1. As explained further, this enhanced Lifeline support should 
substantially reduce the Lifeline rate (i.e., the monthly basic service 
rate) for all qualifying low-income consumers on tribal lands.
    30. Consistent with the requirement of Sec. 54.403(a) of our rules, 
we condition the receipt of this increased federal Lifeline support on 
carriers passing through the entire fourth-tier support amount to each 
qualifying low-income individual living on tribal lands by an 
equivalent reduction in the subscriber's monthly bill for local 
service. Specifically, we require each eligible telecommunications 
carrier to certify that it (1) will pass through the fourth-tier 
federal support amount to its qualifying low-income subscribers, and 
(2) has received the necessary approval of any non-federal regulatory 
authority authorized to regulate such carrier's rates that may be 
required to implement the required rate reduction. As discussed, an 
eligible telecommunications carrier seeking to receive reimbursement 
during the calendar year 2000 for enhanced Lifeline and Link Up 
services provided during the fourth quarter 2000 must make these 
certifications in a letter filed with the universal service fund 
Administrator, the Universal Service Administrative Company (USAC), by 
September 1, 2000. All carriers seeking reimbursement for enhanced 
Lifeline or Link Up services must make these certifications in the FCC 
Form 497 (as revised).
    31. Our primary goal, in taking this action, is to reduce the 
monthly cost of telecommunications services for qualifying low-income 
individuals on tribal lands, so as to encourage those without service 
to initiate service and better enable those currently subscribed to 
maintain service. In view of (1) the extraordinarily low average per 
capita and household incomes in tribal areas,

[[Page 47888]]

(2) the excessive toll charges that many subscribers incur as a result 
of limited local calling areas on tribal lands, (3) the 
disproportionately low subscribership levels in tribal areas, and (4) 
the apparent limited awareness of, and participation in, the existing 
Lifeline program, we conclude that a substantial additional amount of 
support is needed to have an impact on subscribership. Our conclusion 
to provide up to an additional $25 for all qualifying low-income 
individuals living on tribal lands is consistent with the actions of 
state commissions that have instituted substantial rate reductions for 
their low-income residents. In each of these cases, substantial 
additional state funds have been made available to promote 
subscribership among qualifying low-income consumers in those 
jurisdictions. Our determination is informed by the experience of these 
jurisdictions and the increased subscribership levels achieved 
following their implementation of substantial Lifeline rate reductions. 
For example, in the four years (1992-1996) immediately following the 
District of Columbia Public Service Commission's (D.C. Commission) 
adoption of a $1 Lifeline rate for low-income residents 65 years of age 
and older and a $3 Lifeline rate for low-income residents under 65 
years of age, the District of Columbia's overall subscribership levels 
increased by more than 4 percent, as compared with a nationwide 
increase of only 0.1 percent for the same time period. Similarly, while 
only 8,850 low-income individuals previously lacking telephone service 
initiated service in New York in the three years preceding the New York 
Public State Service Commission's adoption of a $1 Lifeline rate, 
171,536 low-income individuals initiated service in the three years 
following adoption of the $1 Lifeline rate, an increase in new Lifeline 
subscribers of almost 2000 percent.
    32. In adopting its $1 Lifeline program for low-income citizens in 
the District of Columbia, the D.C. Commission determined that a 
substantial rate reduction, along with the removal of other regulatory 
restrictions, was needed to stimulate interest among the low-income 
population generally, given its history of low subscription and in 
light of the potential importance of phone service, particularly to 
elderly residents, as a ``Lifeline.'' Subscribership levels on tribal 
lands, the multitude of obstacles to increasing subscribership on 
tribal lands, and the critical health and safety function of a 
telephone to persons in extremely remote locations suggest that tribal 
populations represent a similarly ``at risk'' population. Just as the 
D.C. Commission determined that an aggressive regulatory approach was 
needed to raise the visibility of Lifeline and stimulate interest on 
the part of residents there, we believe that a similarly aggressive, 
multi-faceted approach is needed to address the problem of low 
subscribership on tribal lands.
    33. In combination with the ``non-matching'' federal first-tier 
Lifeline support of up to $4.35 and second-tier support of $1.75 per 
month per Lifeline customer, the additional $25 in enhanced federal 
Lifeline support for qualifying low-income individuals living on tribal 
lands would reduce the cost of the most expensive basic service rates 
presented on the record (e.g., $38 per month in areas of Alaska and $35 
per month on the Wind River Reservation), to less than $10 per month. 
The record before us indicates that basic local service rates for 
subscribers living on or near reservations range from $5 to $38 per 
month, with most subscribers receiving rates of less than $20 per 
month. Thus, with the enhanced Lifeline support, low-income individuals 
on tribal lands whose local service rates are $32.10 or less per month 
would pay a monthly local service rate of $1. The enhanced support also 
would apply to any monthly mileage or zonal charges imposed as a 
condition for receiving basic local service. The enhanced support would 
not apply to state or federal taxes, state or federal universal service 
fees, or surcharges for 911 service that may appear as line items on a 
subscriber's bill for local service. By substantially reducing the 
monthly service costs for all qualifying low-income individuals on 
tribal lands, we find that the additional targeted Lifeline support 
provided here should eliminate or diminish the effect of 
unaffordability for those low-income individuals for whom it may be 
difficult to maintain telephone service even where facilities are 
present.
    34. By creating this enhanced Lifeline support, we have attempted 
to reduce to $1 per month the basic service rate for the majority of 
income-eligible individuals residing on tribal lands. There are, 
however, some isolated instances where local telephone rates are high 
enough that, even with the enhanced Lifeline support, monthly service 
rates will be greater than $1. In addition, there are a myriad of 
charges, which vary from state to state, that also affect customers' 
bills, such as taxes, surcharges, and mileage charges. So, while we 
have taken significant steps toward reducing the monthly local service 
rates for low-income individuals on tribal lands with this program, we 
cannot assure each eligible customer that his or her local service bill 
will be $1 per month.
    35. We have ample evidence that customer confusion and lack of 
awareness of Lifeline discounts have contributed to low subscribership 
levels on tribal lands. We encourage states to consider ways in which 
local charges may be simplified, particularly for low-income customers 
eligible to receive this enhanced Lifeline support, so as to make the 
Lifeline discounts easier to promote and explain to qualifying 
customers. We encourage the Joint Board to consider this issue in its 
review of Lifeline service for all low-income consumers.
    36. In determining the appropriate level of enhanced Lifeline 
support for qualifying low-income individuals on tribal lands, we 
recognize that low-income individuals on tribal lands may spend a 
significantly greater percentage of their household income on local and 
toll services than do most other Americans as a result of the 
substantial toll charges they incur to place calls within their 
communities of interest. Based on data compiled by the Bureau of Labor 
Statistics, we observe that expenditures for residential local and toll 
telephone services comprise approximately two percent of the average 
U.S. household's annual expenditures. Assuming average local service 
charges of approximately $20 per month and toll charges of as much as 
$126 per month, a tribal member may spend as much as $1,752 per year on 
local and long distance telephone service. Assuming an average 
household income of $12,459 per year, a tribal household could spend 
approximately 14 percent of its annual income on telephone service. 
Given that an annual household income of $12,459 is unlikely to result 
in any savings, we assume that all or most of this amount is dedicated 
to household expenditures.
    37. Even if we were to use the lowest local service charge on the 
record of $5 per month and assume intrastate toll charges of only $42 
per month (or one-third of the $126 toll charge figure cited), total 
telephone services, excluding taxes and other charges, would cost $47 
per month, or $564 per year. A tribal household earning $12,459 per 
year would spend, in this example, approximately 5 percent of its 
annual income on telephone service. Thus, in comparison to the two 
percent of household expenditures dedicated to telecommunications 
services in the average U.S. household, it appears that

[[Page 47889]]

tribal members on average commit a substantially greater percentage of 
household resources to pay for the same services.
    38. Finally, we are mindful that a low-income individual currently 
receiving and paying for service without enhanced support will, upon 
adoption of these rules, receive a discounted rate for the same 
service, when that individual arguably could continue to pay the 
current rate without any enhancement. Nonetheless, we believe that our 
decision is consistent with our responsibility to ensure that our 
actions do not expand the federal universal service support mechanisms 
beyond that required to achieve our statutory mandate to preserve and 
advance universal service. As we noted in the Universal Service Order, 
however, the fact that an individual is connected to the network does 
not, in itself, reveal whether that individual is spending a 
disproportionate amount of income on telecommunications services. We 
have carefully examined the facts before us and structured the enhanced 
Lifeline support in a manner that is precisely targeted to provide 
qualifying low-income individuals with access to telecommunications 
services and to increase subscribership on tribal lands. Given that: 
(1) tribal members appear to spend a significantly higher proportion of 
their incomes on telecommunications services than do other Americans; 
(2) low-income tribal members' services may be more likely to be 
disconnected; (3) beneficiaries of enhanced support must be income 
eligible; and (4) qualifying individuals can use only as much support 
as is needed to cover the cost of the individuals' basic service rate 
less $1, we are persuaded that the level of support provided here does 
not exceed that required to preserve and advance universal service.
    39. We also believe that our adoption of enhanced Lifeline support 
will encourage: (1) Eligible telecommunications carriers to construct 
telecommunications facilities on tribal lands that currently lack such 
facilities; (2) new entrants offering alternative technologies to seek 
eligible telecommunications carrier status to serve tribal lands; and 
(3) tribes, eligible telecommunications carriers, and states to address 
impediments to increased penetration that are caused by limited local 
calling areas. We discuss each of these in greater detail.
    40. Infrastructure Development. By providing carriers with a 
predictable and secure revenue source, the enhanced Lifeline support 
just discussed, in conjunction with the expanded support that we 
provide under the Link Up program, is designed to create incentives for 
eligible telecommunications carriers to deploy telecommunications 
facilities in areas that previously may have been regarded as high risk 
and unprofitable. We note that, unlike in urban areas where there may 
be a greater concentration of both residential and business customers, 
carriers may need additional incentives to serve tribal lands that, due 
to their extreme geographic remoteness, are sparsely populated and have 
few businesses. In addition, given that the financial resources 
available to many tribal communities may be insufficient to support the 
development of telecommunications infrastructure, we anticipate that 
the enhanced Lifeline and expanded Link Up support will encourage such 
development by carriers. In particular, the additional support may 
enhance the ability of eligible telecommunications carriers to attract 
financing to support facilities construction in unserved tribal areas. 
Similarly, it may encourage the deployment of such infrastructure by 
helping carriers to achieve economies of scale by aggregating demand 
for, and use of, a common telecommunications infrastructure by 
qualifying low-income individuals living on tribal lands.
    41. The enhanced Lifeline and Link Up support adopted here also may 
help to foster principles of tribal sovereignty and tribal self-
determination in two respects. First, the availability of enhanced 
federal support may provide additional incentives for tribes that wish 
to establish tribally-owned carriers to do so by diminishing the 
financial risk associated with providing service to low-income 
customers on tribal lands. Second, to the extent that tribal leaders 
can aggregate service requests of large numbers of qualifying 
individuals eligible for enhanced support, they may have more control 
in choosing the carriers serving their communities and increased 
bargaining power in their negotiations with carriers seeking to provide 
universal service on tribal lands.
    42. To the extent that the cost to extend facilities, due to the 
geographic remoteness of a location or other geographic 
characteristics, is extraordinarily high, we recognize that the level 
of support provided here, in combination with existing levels of 
universal service high-cost support, may not always be sufficient to 
attract the necessary facilities investment. Accordingly, although we 
anticipate that the measures adopted in this Order will address a 
significant number of the obstacles to subscribership on tribal lands 
identified on the record before us, we anticipate that additional 
regulatory steps may be necessary to encourage the deployment of 
facilities in areas where the cost of deployment is extraordinarily 
high. We will address these issues, in consultation with the Joint 
Board, when we consider reform of the rural high cost mechanism, and 
implementation of section 214(e)(3) of the Telecom Act. For this 
reason, we do not adopt additional measures at this time to address the 
problem of inadequate facilities deployment in the most geographically 
remote tribal areas.
    43. Competitive Service Providers. By providing additional federal 
support targeted to low-income individuals on tribal lands, without 
regard to the specific technology used to provide the supported 
telecommunications services, we recognize that different technologies 
may offer solutions to address low subscribership levels on tribal 
lands. For example, commenters have suggested that wireless service may 
represent a cost-effective alternative to wireline service in sparsely 
populated, remote locations where the cost of line extensions is 
prohibitively expensive. Moreover, as we discuss further, a wireless 
eligible telecommunications carrier service offering that features an 
expanded local calling area along with a predetermined number of calls 
or minutes of calling within a tribal member's community of interest, 
may represent a solution to the problem of limited local calling areas 
and excessive toll charges in tribal areas. The enhanced Lifeline 
support adopted in this Order is competitively neutral because any 
carrier, including a wireless carrier, that receives designation as an 
eligible telecommunications carrier and is permitted by tribal 
authorities to serve on tribal lands may provide enhanced Lifeline 
service to qualifying low-income individuals on tribal lands.
    44. Limited Local Calling Areas. As noted, because the boundaries 
of local calling areas for wireline carriers are established by the 
states, we recognize that we do not have the authority to address the 
problem of limited local calling areas directly. We find, however, that 
the enhanced Lifeline support may help to alleviate the financial 
burden of the excessive toll charges that low-income individuals on 
tribal lands incur when their local calling area does not encompass 
their community of interest. First, the availability of enhanced 
Lifeline support, by reducing local service rates by as much as $25 per 
month, effectively ``frees up'' money formerly dedicated to local 
service charges that a subscriber now may apply to the subscriber's 
toll charges. Second, the enhanced Lifeline support may spur

[[Page 47890]]

competitive entry by non-wireline carriers whose calling plans offer an 
expanded local calling area. Finally, our decision to increase the 
level of Lifeline support to reduce basic local service rates for 
qualified, low-income individuals on tribal lands may encourage states 
to expand local calling areas for subscribers whose local calling area 
does not encompass their community of interest. Specifically, in 
instances where the entire federal Lifeline support amount (up to 
$31.10 where no state matching funds are provided) is not needed to 
offset a subscriber's local service rate because the rate is less than 
this amount, the additional remaining support may provide states with 
incentives to examine and, where appropriate, expand local calling 
areas on tribal lands. By reducing the financial burden associated with 
excessive toll charges and by reducing the number of calls subject to 
toll charges, we conclude that the actions we take today will help low-
income individuals on tribal lands to maintain their access to 
telephone service.
    45. We decline at this time to adopt other proposals included in 
the FNPRM for offsetting the cost of intrastate toll service, based on 
our expectation that the measures adopted in this Order, although not 
providing support directly for intrastate toll charges, nevertheless 
will help to alleviate some of the burden associated with high 
intrastate toll charges on tribal lands. Because we find that the 
provision of federal support to offset the cost of intrastate toll 
service would expand upon the definition of supported services in 
section 254(c) of the Telecom Act, and would raise issues of 
competitive neutrality to the extent that interexchange carriers would 
not be eligible to receive such enhanced Lifeline support, we do not 
adopt our proposal to support intrastate toll service. We ask the Joint 
Board, in connection with its upcoming review of the definition of 
supported services, to issue a recommendation as to whether the 
Commission should include intrastate or interstate toll services or 
expanded area service within the list of supported services on tribal 
lands or in other areas. Finally, in recognition of the states' 
traditional jurisdiction and expertise in determining the appropriate 
size and scope of local calling areas, we concur in the view expressed 
by NTIA and other parties that counsel against our direct involvement 
in this area.
b. Expanded Link Up
    46. In this Order, we provide up to $100 of federal support under 
the Link Up program to reduce the initial connection charges and line 
extension charges of qualifying low-income individuals on tribal lands. 
Thus, in addition to the currently available Link Up support amount, 
i.e., half of the first $60 of a qualifying subscriber's initial 
connection charges up to a maximum of $30, we will provide up to an 
additional $70 of federal Link Up support to cover 100 percent of the 
remaining charges associated with initiating service between $60 and 
$130, for a total maximum support amount of $100 per qualifying low-
income subscriber. Adoption of this measure will provide up to $100 in 
federal Link Up support to qualifying low-income individuals on tribal 
lands with initial connection or line extension costs of $130 or more. 
Based on information and comment on the record pertaining to the costs 
associated with initiating service in many tribal areas, we conclude 
that the existing $30 maximum level of Link Up support is, in many 
cases, far short of the support amount needed to offset such charges. A 
recent study of American Indian and Alaska Native tribal communities on 
tribal lands found that average household telephone installation 
charges for responding tribes was $78. We note that all parties who 
commented on the appropriate amount by which to increase the level of 
Link Up support recommend an increase in the maximum level of support 
to $100 and that no party opposes this amount or proposes an 
alternative amount.
    47. As proposed in the FNPRM, we also expand the types of charges 
covered by the Link Up program to include any standard charges imposed 
on qualifying low-income individuals on tribal lands as a condition of 
initiating service, including both line extension and initial 
connection charges, up to the $100 maximum. Although the Link Up 
program traditionally has operated only to reduce qualifying consumers' 
initial connection or initial installation charges (e.g., switch 
activation fees), we conclude that the expanded Link Up support also 
should apply to reduce facilities-based charges associated with the 
extension of lines or construction of facilities needed to initiate 
service to a qualifying low-income individual on tribal lands. We take 
this action in recognition of the fact that many low-income individuals 
on tribal lands face as a result of their remote locations certain 
supplementary charges for the installation of new lines and the 
initiation of service, in addition to the typical switch activation 
fees. For example, on Pueblo Picuris, in New Mexico, qualifying low-
income consumers are charged an initial connection charge of 
approximately $130 per consumer and other consumers are charged 
approximately $160 per consumer, $113 of which represents a zonal 
charge to cover the cost of expanding the capacity of existing 
facilities located near that community. To the extent that parties have 
identified line extension and construction costs as obstacles to 
subscribership on tribal lands, this measure is designed to increase 
subscribership among qualifying low-income individuals by minimizing 
certain of these up-front costs. In addition, we conclude that several 
of the justifications supporting our adoption of enhanced Lifeline 
support also support our adoption of expanded Link Up support. 
Specifically, by adopting the expanded Link Up support, we intend to 
create incentives for (1) eligible telecommunications carriers to 
construct telecommunications facilities on tribal lands that currently 
lack such facilities; and (2) new entrants offering alternative 
technologies to seek eligible telecommunications carrier status to 
serve tribal lands.
    48. We note that the expanded Link Up support for qualifying low-
income individuals living on tribal lands is competitively neutral in 
that it will apply to any eligible telecommunications carrier's 
standard charges for initiating service to qualifying consumers on 
tribal lands. For example, the expanded Link Up support may be used to 
offset the charge associated with ``activating service'' for an 
eligible telecommunications carrier that offers satellite telephone 
service. We further note, however, that the expanded Link Up support 
cannot be applied to customer premises equipment, i.e., equipment that 
falls on the customer side of the network interface device boundary 
between customer and network facilities. We adopt this limitation in 
light of the fact that the federal universal service support mechanisms 
generally support only the cost of facilities falling on the network 
side of the demarcation point and because the Commission's definition 
of supported services does not include customer premises equipment or 
inside wiring. Expanded Link Up support would be available for 
qualifying consumers on tribal lands to offset charges for facilities 
that are necessary to enable a non-wireline eligible telecommunications 
carrier to provide service to the demarcation point. For example, if 
the provision of

[[Page 47891]]

a fixed wireless or satellite service required the installation of a 
receiver on the roof of a subscriber's premises to bring service to a 
demarcation point, i.e., a network interface device, expanded Link Up 
support could be used to offset the cost of installing such facilities. 
To the extent that a non-wireline carrier can isolate costs associated 
with the portion of a handset that receives wireless signals, we 
conclude that those costs would be covered as costs on the network side 
of the network interface device.
    49. With respect to GTE's concern that the use of expanded Link Up 
support to cover line extension costs may not provide sufficient 
funding, we note that, as discussed, where the cost to extend 
facilities to a low-income individual's residence is extraordinarily 
high, additional regulatory action may be necessary to encourage the 
deployment of facilities in such areas. To the extent that 
extraordinarily high costs pose a barrier to service in certain tribal 
areas, we will examine those issues in a future order implementing 
section 214(e)(3) of the Telecom Act and in connection with our 
consideration of the Joint Board's recommendations regarding high-cost 
universal service reform for rural carriers. We likewise are not 
dissuaded by GTE's concern that the expanded Link Up support will 
encourage inefficient investment in telecommunications infrastructure. 
We do not anticipate that the expanded Link Up support will encourage 
inefficient investment in telecommunications infrastructure because: 
(1) Support for line extension or other construction costs is capped at 
$100 per qualifying low-income individual on tribal lands; (2) the line 
extension or other construction costs in many tribal areas will exceed 
the maximum amount covered under the expanded Link Up support; and (3) 
carriers therefore may have to absorb certain costs in excess of the 
maximum expanded Link Up support amount in order to induce low-income 
individuals to initiate service,. Moreover, to the extent that a 
competitive eligible telecommunications carrier offering an alternative 
to wireline technology can extend service to a remote tribal area at a 
substantially lower cost than a wireline carrier, we believe that it is 
a more economically efficient use of federal universal service funds to 
create incentives, in the first instance, for the lower-cost provider 
to provide the service.
    50. Our decision to apply the expanded Link Up support exclusively 
to low-income individuals living on tribal lands at this time and 
further examine whether to extend this approach to other unserved 
populations, is consistent with Bell Atlantic's suggestion that we 
adopt a means-tested approach to funding line extensions and, before 
adopting such an approach, resolve whether it should be applied to 
other unserved areas. With respect to Bell Atlantic's further 
suggestion that we resolve, prior to taking action, how much of an 
increase in expanded Link Up support is needed to have a significant 
impact on penetration, we note that the actions we take are necessarily 
based on our best estimates of how much support is needed to impact 
subscribership levels. We intend that the measures we adopt in this 
Order and their impact on subscribership levels will be subject to 
ongoing examination and possible refinement as may be appropriate.
c. Implementation Issues Associated With Rule Changes To Provide 
Enhanced Lifeline Support and Expanded Link Up Support to Low-Income 
Consumers on Tribal Lands
    51. We anticipate that carriers may require additional time, beyond 
the effective date of this Order, to implement the tariff and billing 
system changes that may be necessary for eligible telecommunications 
carriers to offer the enhanced Lifeline and expanded Link Up services 
we adopt in this Order. Accordingly, we have determined to extend until 
October 1, 2000 the date by which eligible telecommunications carriers 
must comply with the new rule Sec. 54.403(a)(4) and Sec. 54.411(a)(3) 
adopted in this Order. An eligible telecommunications carrier serving 
tribal lands must make available, upon request by a qualifying low-
income individual living on tribal lands, the enhanced Lifeline and 
Link Up services adopted in this Order by no later than October 1, 
2000. Although we encourage eligible telecommunications carriers to 
implement the necessary changes and offer the expanded Lifeline and 
Link Up services prior to this date where possible, we believe that 
this date gives carriers sufficient time to comply with these rule 
amendments. Because we find significant public interest in not delaying 
the benefits of these rules beyond that required to enable carriers to 
comply with them without undue burden, we decline to extend the 
deadline for their implementation beyond October 1, 2000.
    52. In order to receive reimbursement during the calendar year 2000 
for enhanced Lifeline and expanded Link Up services provided during the 
fourth quarter 2000, an eligible telecommunications carrier must submit 
to USAC by no later than September 1, 2000, a letter from a corporate 
officer of the carrier containing the following information and 
certifications: (1) An estimate of (a) the number of eligible low-
income subscribers in each of the carrier's study areas that the 
carrier projects will receive non-enhanced federal Lifeline or Link Up 
discounts in the fourth quarter of 2000 (i.e., number of eligible 
subscribers on non-tribal lands), and (b) the number of eligible low-
income subscribers in each of the carrier's study areas that the 
carrier projects will receive enhanced Lifeline or expanded Link Up 
discounts in the fourth quarter of 2000 as a result of actions taken in 
this Order (i.e., number of eligible subscribers on tribal lands); (2) 
a statement of the corporate officer that the estimates provided are 
based on the good-faith estimate of the corporate officer; (3) the 
carrier's monthly undiscounted service rates for subscribers eligible 
to receive enhanced Lifeline support; (4) the monthly amount of 
additional support for each low-income subscriber who the carrier 
projects will be eligible for enhanced Lifeline support; (5) the number 
of low-income individuals on tribal lands for whom the carrier expects 
to initiate service in the fourth quarter of 2000 and the number of 
other low-income individuals for whom the carrier expects to initiate 
service in the fourth quarter of 2000; (6) the amount charged to 
initiate service for low-income subscribers on tribal lands and the 
amount charged to initiate service for other low-income subscribers; 
(7) an estimate of total federal Lifeline and Link Up support that the 
carrier anticipates it will require in the fourth quarter of 2000; (8) 
a certification that the carrier will pass through all federal Lifeline 
support amounts to its qualifying low-income subscribers; (9) a 
certification that the carrier has received the necessary approval of 
any non-federal regulatory authority (e.g., a state commission or 
tribal regulatory authority) that is authorized to regulate such 
carrier's rates that may be necessary to implement the required rate 
reduction; and (10) a certification that the carrier is publicizing the 
availability of Lifeline and Link Up services in a manner reasonably 
designed to reach those likely to qualify for these services.
    53. We emphasize that all eligible telecommunications carriers, 
including those that do not submit to USAC by September 1, 2000 the 
letter described, are required to make available the Lifeline and Link 
Up discounts adopted in this Order to all qualifying low-

[[Page 47892]]

income consumers not later than October 1, 2000. We also remind all 
eligible telecommunications carriers that, as a condition for receiving 
federal Lifeline or Link Up support payments from USAC, they must 
submit to USAC at regular intervals an FCC Form 497. We direct the 
Common Carrier Bureau and USAC to revise the FCC Form 497 Lifeline 
Worksheet as necessary to implement the decisions and rule changes 
adopted in this Order. We delegate to the Common Carrier Bureau the 
authority to modify the FCC Form 497, along with any other forms that 
may be required to implement the decisions in this Order.
d. Expanded Lifeline and Link Up Qualification Criteria for Low-Income 
Consumers on Tribal Lands
    54. We amend Sec. 54.409(b) of our rules to enable qualifying low-
income individuals living on tribal lands within a state that does not 
provide intrastate matching funds under the Lifeline program (either 
for the benefit of the state's population generally or tribal members 
specifically), to qualify for Lifeline and Linkup support by certifying 
their participation in certain alternative means-tested assistance 
programs. Specifically, we expand the federal default qualification 
criteria for eligibility for Lifeline and Link Up assistance, as set 
forth in Sec. 54.409(b), to permit low-income individuals living on 
tribal lands to establish their income eligibility by certifying their 
participation in one of the following federal assistance programs: (1) 
BIA general assistance; (2) Temporary Assistance for Needy Families 
(TANF) tribally-administered block grant program; (3) Head Start 
Programs (under income qualifying eligibility provision only); or (4) 
National School Lunch Program (free meals program only). Given that the 
household income thresholds for these newly added programs range from 
100-130 percent of the federal poverty level or incorporate state-
determined poverty thresholds, we conclude these income thresholds are 
consistent with those associated with the programs included in our 
current federal default list.
    55. We take this action based on evidence on the record before us 
that the existing federal qualification criteria governing eligibility 
under the Commission's Lifeline and Link Up programs, to the extent 
that these criteria do not include low-income programs specifically 
targeted to Indians, serve as a barrier to participation in the 
Lifeline and Link Up programs by low-income members of Indian tribes. A 
low-income tribal member effectively may be excluded from participation 
in Lifeline and Link Up in instances where that individual receives 
assistance or benefits under a program other than one of the programs 
listed in Sec. 54.409(b) of our rules. For example, a low-income tribal 
member who receives cash assistance benefits under the BIA general 
assistance program, but receives no assistance or benefits under any of 
the means-tested programs listed in Sec. 54.409(b) of the Commission's 
rules, would not be eligible today to receive Lifeline and Link Up 
support by virtue of the individual's non-participation in any of the 
low-income programs listed under Sec. 54.409(b). Accordingly, we have 
expanded the list of programs contained in Sec. 54.409 to include 
means-tested programs in which, according to commenters, low-income 
tribal members are more likely to participate and, therefore, represent 
more suitable income proxies for low-income tribal members.
    56. We also make available the expanded eligibility criteria 
enumerated to all low-income individuals living on tribal lands. This 
action is consistent with our rationale discussed for extending the 
benefits of the enhanced Lifeline and expanded Link Up support to all 
qualifying low-income individuals on tribal lands, as opposed to 
limiting these benefits solely to qualifying low-income tribal members 
on tribal lands. We believe that, by increasing the total number of 
individuals, both Indian and non-Indian, who are connected to the 
network within a tribal community the value of the network for tribal 
members in that community is greatly enhanced. We also anticipate that 
reducing barriers to participation in the Commission's Lifeline and 
Link Up programs for all low-income individuals residing on tribal 
lands will help to increase the number of subscribers in a tribal 
community who can afford service and, thereby, provide greater 
incentive for carriers to invest and deploy telecommunications 
infrastructure on tribal lands. In addition, making the identical set 
of eligibility criteria available to all low-income individuals on 
tribal lands should make it administratively less burdensome for an 
eligible telecommunications carrier serving tribal lands to provide 
Lifeline and Link Up services in those areas. In particular, we believe 
that it will be less burdensome for a carrier to verify the income 
eligibility of all potential Lifeline and Link Up subscribers in a 
tribal area using the same set of eligibility criteria.
    57. We decline to expand our federal default qualification criteria 
to include participation in services provided by the Indian Health 
Service of the U.S. Department of Health and Human Services given that 
such services are available to Indian tribal members generally, rather 
than exclusively to low-income tribal members, and therefore are 
inappropriate qualification criteria for our purposes. In addition to 
proposing the addition of certain of the means-tested programs that we 
adopt here, one commenter suggests that we include the Low Income Home 
Energy Assistance Program (LIHEAP), Aid to Families with Dependent 
Children (AFDC), and Tribal Work Experience Program (TWEP). We note 
that LIHEAP is included currently in the federal default qualification 
criteria listed in Sec. 54.409(b) of our rules. In light of our 
understanding that TANF has superseded the AFDC program, we do not 
include the AFDC program, but we do include the tribally-administered 
TANF block grant program. In addition, we do not include TWEP insofar 
as it appears that participation in BIA general assistance is a 
prerequisite to participation in TWEP and, given that our expanded 
default qualification criteria now include participation in the BIA 
general assistance program, TWEP participants need only certify their 
participation in the BIA general assistance program.
    58. At this time, we also do not adopt a qualification procedure by 
which low-income individuals on tribal lands could establish their 
income eligibility by self-certifying that their income is below a 
particular level, such as that set by the Federal Poverty Guidelines, 
as one commenter has suggested. Because we believe, however, that this 
approach may reach more low-income consumers, including low-income 
tribal members, than the current method of conditioning eligibility on 
participation in particular low-income assistance programs, we will 
further examine, in consultation with the Joint Board, possible 
revisions to Sec. 54.409 of the Commission's rules to provide for self-
certification based solely on income level.
    59. For qualifying low-income individuals who live on tribal lands 
in states that do provide intrastate matching funds under the Lifeline 
program and therefore are subject to state-created eligibility 
criteria, we adopt the suggestion of the Wisconsin Public Service 
Commission and revise our eligibility guidelines under Sec. 54.409(a). 
Specifically, in addition to establishing qualification criteria under 
Sec. 54.409(a) that are based ``solely on income or factors directly 
related to income,'' we conclude that a state containing any tribal 
lands also must

[[Page 47893]]

ensure that its qualification criteria are reasonably designed to apply 
to low-income tribal populations within that state. We conclude that 
this modification to Sec. 54.409(a) is preferable to an alternative 
approach under which we would require states to adopt the identical 
expanded qualification criteria as those adopted for purposes of the 
federal default qualification criteria. Our decision today will give a 
state whose eligibility criteria inadvertently exclude low-income 
tribal populations impetus to take corrective action, while giving the 
state flexibility to adopt eligibility criteria best-suited to the 
tribal populations within that state. Consistent with the Joint Board's 
goal of increasing low-income subscribership and ensuring that the 
availability of Lifeline and Link Up is not limited to particular 
populations, we conclude that this approach will help to ensure that 
all qualifying residents on tribal lands will receive the intended 
benefits of the federal Lifeline and Link Up programs.
    60. We will permit, however, a low-income individual who lives on 
tribal lands and who is excluded from participation in the Lifeline and 
Link Up programs because the individual is not enrolled in any of the 
programs listed in a state's qualification criteria to qualify for 
federal Lifeline and Link Up support by certifying his or her 
eligibility under one of the means-tested programs listed in 
Sec. 54.409, as revised herein. We conclude that this action is 
necessary to hasten the process of bringing telecommunications services 
to unserved and underserved tribal lands and in recognition of the time 
needed for states to revise their qualification criteria where those 
criteria limit participation in Lifeline and Link Up to individuals who 
receive benefits under one or more low-income assistance programs in 
which low-income tribal members typically do not participate. For 
example, in a state where Lifeline and Link Up eligibility hinges on 
enrollment in the Medicaid program, a low-income tribal member who 
receives health services through the Indian Health Services and does 
not participate in Medicaid would not be eligible for Lifeline and Link 
Up support (state or federal) in that state by virtue of that state's 
qualification criteria. This measure recognizes the unique barriers 
facing low-income tribal members living on tribal lands who may have 
been excluded inadvertently from participation in Lifeline and Link Up 
as a result of a state's qualification criteria. This action is 
consistent with the Commission's statement in the Universal Service 
Order that, where a state provides matching funds under the Lifeline 
program, the state's qualification criteria should apply. Conversely, 
if a low-income individual living on tribal lands is excluded from 
participation in the Lifeline and Link Up programs because that 
individual participates in none of the programs used as income proxies 
in a state's qualification criteria and such individual agrees to forgo 
state matching funds, then we find that the justification for applying 
state qualification criteria in that circumstance no longer applies.

D. Requiring Eligible Telecommunications Carriers To Publicize the 
Availability of Lifeline and Link Up Support

    61. In codifying section 214(e)(1)(B) of the Telecom Act, Congress 
recognized that merely providing a service is not enough to ensure that 
the needed support is received. Rather, it imposed an obligation to 
advertise the availability of the supported services and the charges 
for those services. There is evidence in the record that the lack of 
information concerning the availability of Lifeline and Link Up 
services contributes to low penetration rates. We are concerned that 
eligible telecommunications carriers are not advertising the 
availability of Lifeline and Link Up services or, if they are, that 
such efforts are not reasonably designed to reach those likely to 
qualify for the service. Based on the apparent lack of awareness of the 
availability of Lifeline and Link Up services in many rural, low-income 
communities and to remove any confusion concerning eligible 
telecommunications carriers' obligation to publicize the availability 
of these services, we conclude that this obligation should be codified 
in our rules.
    62. We recognize, as pointed out by United Utilities, Inc. (UUI), 
the limitations of traditional advertising media in promoting awareness 
of low-income support mechanisms within particular low-income 
populations. Specifically, UUI, a Native-owned eligible 
telecommunications carrier serving ``predominantly Alaskan native 
villages,'' describes how it achieved significant increases in both 
penetration rates and Lifeline subscribership through an intensive 
outreach effort in 26 native villages. As part of its outreach effort, 
UUI waived ``service order and hook-up fees,'' identified and contacted 
each household that did not have service, and often spoke in its 
customers' Native language to inform them of the Lifeline program and 
toll blocking. According to UUI, as a result of this effort, the 
household penetration level in these 26 villages increased by 4.9 
percent, and Lifeline subscribership increased from 395 to 1,263 
subscribers. In its comments, UUI states that:

    [R]egional advertising media generate very limited results, as 
does the placing locally of posters. Placing ads in regional 
publications and placing posters can be ineffective when carriers do 
not make special efforts, as did UUI, to contact low income 
households in person, to speak to them in their own language, and to 
adequately explain the Lifeline program and toll blocking options. 
UUI would take the position that a lack of information does * * * 
contribute to the significantly low penetration rates on tribal 
lands.

We commend these efforts and encourage other carriers to undertake 
similar efforts to comply with the rule amendments that we adopt in 
this Order.
    63. We amend Sec. 54.405 and Sec. 54.411 of our rules to require 
eligible telecommunications carriers to publicize the availability of 
Lifeline and Link Up services in a manner reasonably designed to reach 
those likely to qualify for those services. We emphasize that these 
rule amendments shall apply to all eligible telecommunications carriers 
and not merely to those serving tribal lands. We take this action based 
on evidence in the record that the lack of awareness of the Lifeline 
and Link Up programs contributes to low penetration rates and to 
eliminate any confusion concerning eligible telecommunications 
carriers' obligation to publicize the availability of these services.
    64. We recognize that a method that is reasonably designed to reach 
qualifying low-income subscribers in one location may not be effective 
in reaching qualifying low-income subscribers in another location. For 
that reason, we do not prescribe in this Order specific, uniform 
methods by which eligible telecommunications carriers must publicize 
the availability of Lifeline and Link Up support. We do, however, 
require an eligible telecommunications carrier to identify communities 
with the lowest subscribership levels within its service territory and 
make appropriate efforts to reach qualifying individuals within those 
communities. For example, we would expect a carrier to take into 
consideration the cultural and linguistic characteristics of low-income 
communities within its service territory as well as the efficacy of 
particular methods in reaching the greatest number of qualifying low-
income individuals within those communities. In addition, we require an 
eligible telecommunications carrier to provide

[[Page 47894]]

to qualifying low-income individuals, through whatever public awareness 
method it selects, consumer information on the availability of toll 
blocking and toll limitation services for the purpose of enabling the 
subscriber to control the amount of toll charges that he or she may 
incur.
    65. If we determine that eligible telecommunications carriers are 
not adopting methods reasonably designed to reach qualifying low-income 
individuals, additional action may be needed to increase public 
awareness among such individuals. To that end, we may address in a 
Further Notice of Proposed Rulemaking more specific methods by which 
eligible telecommunications carriers must publicize the availability of 
Lifeline and Link Up services. Finally, we note that the Commission's 
upcoming Indian telecommunications training initiative will be devoted, 
in part, to familiarizing carriers and tribal representatives with the 
Lifeline and Link Up programs generally, and the changes made to those 
programs by this Order, in particular.

E. Lifeline Jurisdictional Issues

    66. State Approval Requirement for Second-Tier Support. We modify 
Sec. 54.403(a) of our rules to make second-tier federal Lifeline 
support available to an eligible telecommunications carrier that is not 
subject to state rate regulation on the condition that the carrier 
certifies that it: (1) Will pass through the second-tier $1.75 federal 
support amount to its qualifying low-income subscribers, and (2) has 
received the necessary approval of any non-federal regulatory authority 
that is authorized to regulate such carrier's rates that may be 
required to implement the required rate reduction (e.g., a tribal 
regulatory authority). To the extent that an eligible 
telecommunications carrier is not subject to rate regulation by any 
non-federal regulatory authority, then the carrier need only certify 
for this purpose that it: (1) will pass through the second-tier $1.75 
federal support amount to its qualifying low-income subscribers, and 
(2) is not subject to rate regulation by any non-federal regulatory 
authority. As discussed, an eligible telecommunications carrier seeking 
to receive reimbursement during the calendar year 2000 for enhanced 
Lifeline and Link Up services provided during the fourth quarter 2000 
must make these certifications in a letter filed with USAC by September 
1, 2000. All carriers seeking reimbursement for enhanced Lifeline or 
Link Up services must make these certifications in the FCC Form 497 (as 
revised).
    67. By eliminating the need for eligible telecommunications 
carriers not subject to state rate regulation to obtain state action or 
seek a Commission waiver in order to receive second-tier federal 
Lifeline support, this revision to Sec. 54.403(a) of our rules ensures 
that no category of carriers is subjected to more burdensome 
administrative requirements than are imposed on all other eligible 
telecommunications carriers seeking second-tier federal Lifeline 
support. We conclude that this amendment maintains appropriate 
deference to tribal regulatory authorities because second-tier support 
will not be disbursed where a tribal regulatory authority that 
regulates the rates of an eligible telecommunications carrier does not 
permit an equivalent reduction in consumers' bills. In addition, by 
requiring eligible telecommunications carriers to certify that they are 
not subject to state rate regulation before we make available second-
tier federal Lifeline support, this result is consistent with our 
overall deference to the states in areas of traditional state 
ratemaking.
    68. Third-Tier Lifeline Support. In light of our determination to 
provide enhanced federal Lifeline support of up to $25 for low-income 
individuals living on tribal lands through the creation of a fourth 
tier of the Lifeline program, we do not adopt our proposal in the FNPRM 
to provide the third tier of federal Lifeline support to carriers 
serving tribal lands where no intrastate matching funds are provided. 
In granting a temporary waiver of the matching requirement for third-
tier federal Lifeline support in the Gila River Order, the Bureau was 
aware that, absent a waiver, a tribal carrier not subject to the 
jurisdiction of a state commission, such as Gila River 
Telecommunications, Inc., could receive only first-tier Lifeline 
support in the amount of $3.50 per qualifying low-income subscriber. 
Central to the Bureau's determination to grant a temporary waiver of 
the second-tier state approval requirement and the third-tier state 
matching requirement, was the recognition that, in light of the ``low 
penetration and income levels on reservations,'' providing tribal 
carriers with only $3.50 per qualifying low-income subscriber was 
inconsistent with the ``Commission's policy of fostering access to the 
public telephone network for those most in need.''
    69. We note that, because we modify the state approval requirement 
of Sec. 54.403(a) for the provision of second-tier Lifeline support and 
adopt enhanced Lifeline support for qualifying low-income individuals, 
eligible telecommunications carriers will be entitled to receive 
nonmatching federal support of up to $31.10 per month, per qualifying 
low-income subscriber. We conclude that it is not necessary to waive 
the third-tier state matching requirement because we anticipate the 
enhanced Lifeline amount of $31.10 per month per qualifying low income 
subscriber will constitute a sufficient level of support, even on 
tribal lands where no intrastate support is generated. We further 
believe that the enhanced Lifeline will increase qualifying low-income 
individuals' access to the public telephone network more effectively 
than would our proposal in the FNPRM to waive the third-tier matching 
requirement, which would yield a maximum additional level of support of 
only $1.75 per qualifying subscriber. Given that all parties who 
commented on this issue supported our proposal to waive the third-tier 
state matching requirement in Sec. 54.403(a) as a means to direct 
additional federal Lifeline support to low-income individuals on tribal 
lands, we conclude that our decision to accomplish this result through 
the creation of a fourth tier of the Lifeline program, in lieu of 
waiving the third-tier state matching requirement, is not inconsistent 
with the comments addressing this issue.
    70. We revise Sec. 54.403(a), however, to permit a carrier that is 
not subject to state rate regulation to satisfy the third-tier 
intrastate matching requirement of Sec. 54.403(a) by generating its own 
matching funds, independently of the actions of the state in which it 
operates. Although we recognize that many tribes and tribal carriers 
may not have adequate resources to generate the matching funds 
necessary to receive third-tier federal support, we find that the level 
of nonmatching federal Lifeline support that will be available for 
qualifying low-income individuals on tribal lands provides an adequate 
level of support. If a tribe or a carrier, including a wireless 
carrier, that is not subject to state rate regulation nevertheless 
wishes to provide matching funds in order to receive third-tier federal 
Lifeline support and reduce local rates further, we do not want to 
preclude such a result. Accordingly, we modify Sec. 54.403(a) of our 
rules to provide third-tier federal Lifeline support, up to a maximum 
of $1.75 per qualifying low-income customer as calculated in 
Sec. 54.403(a), to an eligible telecommunications carrier that 
certifies that it: (1) Is not subject to state rate regulation, and (2) 
will pass through the total amount of third-tier support (intrastate 
and federal) to its qualifying low-income subscribers by an

[[Page 47895]]

equivalent reduction in those subscribers' monthly bill for local 
telephone service. As discussed, an eligible telecommunications carrier 
seeking to receive reimbursement during the calendar year 2000 for 
enhanced Lifeline and Link Up services provided during the fourth 
quarter 2000 must make these certifications in a letter filed with USAC 
by September 1, 2000. All carriers seeking reimbursement for enhanced 
Lifeline or Link Up services must make these certifications in the FCC 
Form 497 (as revised).
    71. By maintaining the matching requirement of Sec. 54.403(a) as a 
condition for receiving third-tier federal Lifeline support, we leave 
undisturbed a primary goal underlying the Commission's adoption of 
third-tier support, namely, the creation of an incentive for states (or 
tribal authorities, tribal carriers, or wireless carriers, as the case 
may be) to reduce local rates even further. In the Universal Service 
Order, the Commission determined that $5.25 represented a sufficient 
level of baseline federal Lifeline support. The Commission established 
the additional third tier of federal Lifeline support, which entitles 
an eligible telecommunications carrier to receive up to $1.75 of 
federal Lifeline support per qualifying low-income consumer in a state 
that generates support from the intrastate jurisdiction, in order to 
preserve states' incentive to reduce local rates beyond that achieved 
under the first and second tiers of Lifeline support, as deemed 
appropriate by the state. Accordingly, a carrier that is not subject to 
state rate regulation, but that certifies that it will pass through to 
its qualifying low-income subscribers a rate reduction equivalent to 
both the intrastate and federal third-tier support amounts, will be 
entitled to receive third-tier federal Lifeline support. For the 
foregoing reasons, however, we maintain the matching requirement of 
Sec. 54.403(a) as a condition for receiving third-tier federal Lifeline 
support.
    72. Filing of Federal Lifeline Plan. Finally, we observe that 
Sec. 54.401(d) of the Commission's rules currently does not apply to an 
eligible telecommunications carrier that is not subject to the rate 
regulatory authority of a state commission. That section directs a 
state commission to file, or requires a state commission to direct an 
eligible telecommunications carrier to file, with USAC information 
demonstrating that the carrier's Lifeline plan meets the requirements 
of Subpart E of the Commission's rules. We amend Sec. 54.401(d) to 
require eligible telecommunications carriers not subject to the rate 
regulatory authority of a state commission to file with USAC 
information demonstrating that the carrier's Lifeline plan meets the 
requirements of Subpart E of the Commission's rules.

III. Designating Eligible Telecommunications Carriers Pursuant to 
Section 214(e)(6) of The Telecom Act

A. Discussion

(1) Scope of Section 214(e)(6) of the Telecom Act
    73. State Commission Designation of Eligible Telecommunications 
Carriers. In light of the statutory framework and legislative history, 
we conclude that Congress, in enacting section 214(e)(6) of the Telecom 
Act, did not intend to alter the basic framework of section 214(e) of 
the Telecom Act, which gives the state commissions the principal role 
in designating eligible telecommunications carriers under section 
214(e)(2) of the Telecom Act. This interpretation of section 214(e) of 
the Telecom Act is consistent with the legislative history, which 
indicates that section 214(e)(6) of the Telecom Act is not intended to 
``restrict or expand the existing jurisdiction of State commissions 
over any common carrier,'' but is intended to provide a means for the 
designation of a carrier over which a state commission lacks 
jurisdiction.
    74. We conclude that section 214(e)(6) of the Telecom Act requires 
the Commission to conduct a designation proceeding in instances where 
the relevant state commission lacks, for whatever reason, the authority 
to perform the designation. We are guided by the statutory framework, 
legislative history, and the record before us, to conclude that the 
threshold question in determining whether the Commission may exercise 
its authority under section 214(e)(6) of the Telecom Act is whether the 
state commission lacks jurisdiction over the carrier, for any reason. 
We agree with commenters who suggest that the inquiry should include, 
but not be limited to, whether a state commission lacks jurisdiction 
over the particular service or geographic area. The determination as to 
whether a state commission lacks jurisdiction over a particular carrier 
is a fact-specific inquiry that may depend on interpretations of 
federal, state, and tribal law where appropriate.
    75. Jurisdiction Over Carriers Serving Tribal Lands. We are not 
persuaded by claims that the exercise of our authority under section 
214(e)(6) of the Telecom Act is limited to designations of eligibility 
sought by tribally-owned carriers serving tribal lands. We conclude 
that neither the language of section 214(e)(6) of the Telecom Act nor 
its legislative history provides any indication that it applies only to 
tribally-owned carriers serving tribal lands. Section 214(e)(6) of the 
Telecom Act applies to any carrier ``not subject to the jurisdiction of 
a state commission.'' Moreover, the legislative history supports this 
interpretation. In sum, we agree with those commenters who contend that 
the legislative history of section 214(e)(6) of the Telecom Act makes 
clear that, although the class of carriers to be covered by section 
214(e)(6) of the Telecom Act was dominated by tribally-owned carriers, 
it was not restricted to them.
    76. Nor do we find persuasive claims that the Commission generally 
has authority to make all eligible telecommunications carrier 
determinations over carriers providing telecommunications service on 
tribal lands. We do not believe that Congress intended the Commission 
to use section 214(e)(6) of the Telecom Act to usurp the role of a 
state commission that has jurisdiction over a carrier providing service 
on tribal lands. On the contrary, in adopting section 214(e)(6) of the 
Telecom Act, Congress recognized that some state commissions had 
asserted jurisdiction over tribal lands. Congress also acknowledged 
pending jurisdictional disputes between states and tribes and made 
clear that the adoption of section 214(e)(6) of the Telecom Act was not 
``intended to impact litigation regarding jurisdiction between State 
and federally-recognized tribal entities.''
    77. As discussed, the Commission's authority under section 
214(e)(6) of the Telecom Act applies only when a carrier is not subject 
to the jurisdiction of a state commission. The determination as to 
whether a carrier providing service on tribal lands is subject to the 
jurisdiction of a state commission is a complicated and intensely fact-
specific legal inquiry informed by principles of tribal sovereignty and 
requiring the interpretation of treaties, and federal Indian law and 
state law. Such determinations usually consider whether state 
regulation is preempted by federal regulation, whether state regulation 
is consistent with tribal sovereignty and self-determination, and 
whether the tribe has consented to state jurisdiction, either in 
treaties or otherwise. The inquiry as to whether a state commission has 
authority to regulate the provision of telecommunications service on 
tribal lands is a particularized one, and thus specific to each state 
and the facts and circumstances surrounding the provision of the 
service. As the U.S.

[[Page 47896]]

Supreme Court has stated, ``there is no rigid rule by which to resolve 
the question whether a particular state law may be applied to an Indian 
reservation or to tribal members.''
    78. Jurisdiction Over Particular Services. We further conclude that 
the technology used to provide the telecommunications service does not 
per se determine whether the state commission or this Commission has 
jurisdiction over the carrier for purposes of designating the carrier 
as eligible to receive federal universal service support. Specifically, 
we conclude that the provision of service by terrestrial wireless or 
satellite carrier does not per se place the carrier outside the 
parameters of the state commission designation authority under section 
214(e)(2) of the Telecom Act. We believe that if Congress had intended 
to exempt particular services from the state commission designation 
process, it would have expressly done so in section 214(e) of the 
Telecom Act. We therefore agree with NTIA that there is nothing in the 
statute or the legislative history to support the notion that, by 
enacting section 214(e)(6) of the Telecom Act, Congress intended to 
remove from the state commissions the primary responsibility for 
designating wireless or satellite carriers as eligible 
telecommunications carriers.
    79. We further conclude that state commission designation of a 
Commercial Mobile Radio Service (CMRS) provider pursuant to section 
214(e)(2) of the Telecom Act does not constitute entry regulation in 
violation of section 332(c)(3) of the Telecom Act. Section 332(c)(3) of 
the Telecom Act bars state and local rate and entry regulation of CMRS 
providers, but allows the states to regulate ``other terms and 
conditions of service.'' Section 332(c)(3) of the Telecom Act prohibits 
direct state regulation of entry by CMRS providers (e.g., a regulation 
that requires the CMRS provider to obtain a certificate of public 
convenience and necessity from the state prior to providing service), 
but a regulation does not necessarily run afoul of section 332(c)(3) of 
the Telecom Act solely because it may make it more difficult for some 
carriers to offer service. We conclude that the prohibition on 
``entry'' regulation in section 332(c)(3) of the Telecom Act does not 
prohibit states from designating CMRS providers as eligible 
telecommunications carriers because such designation relates to a 
carrier's right to receive federal universal service support, rather 
than a carrier's legal right to do business in a state. We need not 
decide for present purposes whether, or under what conditions, a 
particular state's eligible telecommunications carrier designation 
process as applied to a CMRS provider might constitute impermissible 
entry regulation, rather than permissible regulation of terms and 
conditions of service. Moreover, this conclusion does not affect our 
ability to determine whether a state commission's designation process 
or denial of eligibility may constitute a barrier to entry under 
section 253 of the Telecom Act.
    80. We note that several states have already issued orders 
addressing designation requests from wireless carriers. We encourage 
states to move forward expeditiously to resolve pending requests in a 
pro-competitive manner designed to preserve and advance universal 
service.
(2) Section 214(e)(6) of the Telecom Act Designation Process for 
Carriers Serving Non-Tribal Lands
    81. As discussed, the threshold question for determining whether 
the Commission may exercise its authority to designate a carrier as an 
eligible telecommunications carrier under section 214(e)(6) of the 
Telecom Act is whether the state commission lacks jurisdiction over the 
carrier, for any reason. Section 214(e) of the Telecom Act does not, 
however, define the circumstances under which a state commission may 
lack jurisdiction, nor does it address whether such jurisdictional 
determinations should be made by the state commission or this 
Commission. We conclude that carriers seeking designation from this 
Commission under section 214(e)(6) of the Telecom Act for service 
provided on non-tribal lands must first consult with the relevant state 
regulatory commission on the issue of whether the state commission has 
jurisdiction to designate the carrier, even if the carrier asserts that 
the state commission lacks jurisdiction over the carrier. In so doing, 
we note that jurisdictional challenges relating to the authority of the 
state commission to designate certain carriers or classes of carriers 
on non-tribal lands derive almost exclusively from interpretations of 
state law.
    82. While a carrier may believe state law to preclude the state 
commission from exercising jurisdiction over the carrier for purposes 
of designation under section 214(e)(2) of the Telecom Act, we conclude, 
as a matter of federal-state comity, that the carrier should first 
consult with the state commission to give the state commission an 
opportunity to interpret state law. We conclude that state commissions 
should be allowed a specific opportunity to address and resolve issues 
involving a state commission's authority under state law to regulate 
certain carriers or classes of carriers. Only in those instances where 
a carrier provides the Commission with an affirmative statement from a 
court of competent jurisdiction or the state commission that it lacks 
jurisdiction to perform the designation will we consider section 
214(e)(6) of the Telecom Act designation requests from carriers serving 
non-tribal lands. We conclude that an ``affirmative statement'' of the 
state commission may consist of any duly authorized letter, comment, or 
state commission order indicating that it lacks jurisdiction to perform 
designations over a particular carrier. Each carrier should consult 
with the state commission to receive such a notification, rather than 
relying on notifications that may have been provided to similarly 
situated carriers.
    83. We are concerned, however, that excessive delay in the 
designation of competing providers may hinder the development of 
competition and the availability of service in many high-cost areas. We 
believe it is unreasonable to expect prospective entrants to enter a 
high-cost market and provide service in competition with an incumbent 
carrier that is receiving support, without knowing whether they are 
eligible to receive support. If new entrants do not have the same 
opportunity to receive universal service support as the incumbent, such 
carriers may be unable to provide service and compete with the 
incumbent in high-cost areas. As the Commission has previously 
concluded, competitively neutral access to such support is critical to 
ensuring that all Americans, including those that live in high-cost 
areas, have access to affordable telecommunications services. We are 
therefore concerned that indefinite delays in the designation process 
will thwart the intent of Congress, in section 254 of the Telecom Act, 
to promote competition and universal service to high-cost areas. 
Accordingly, we commit to resolve, within six months of the date filed 
at the Commission, all designation requests for non-tribal lands that 
are properly before us pursuant to section 214(e)(6) of the Telecom 
Act. We also strongly encourage state commissions to resolve 
designation requests filed under section 214(e)(2) of the Telecom Act 
in the same time frame.
(3) Section 214(e)(6) of the Telecom Act Designation Process for 
Carriers Serving Tribal Lands
    84. In this section, we establish a framework designed to 
streamline the

[[Page 47897]]

process for eligibility designation of carriers providing service on 
tribal lands. As discussed in greater detail, we conclude that carriers 
seeking eligibility designations for service provided on tribal lands 
may petition this Commission under section 214(e)(6) of the Telecom Act 
for a determination of whether the carrier is subject to the state 
commission's jurisdiction and, in instances where the state lacks 
jurisdiction, a decision on the merits of the designation request. 
Under this framework, a carrier seeking an eligibility designation for 
service provided on tribal lands will avoid any costs and delays 
associated with resolving the threshold jurisdictional determination in 
a state designation proceeding and possible court appeal of that state 
jurisdictional decision. Moreover, this framework will provide a safe 
harbor for carriers unwilling to have the jurisdictional question 
resolved by a state commission. This streamlined designation process 
for carriers serving tribal lands is intended to facilitate the 
expeditious resolution of such requests so as to increase the 
availability of affordable telecommunications services to tribal lands, 
while preserving the state commissions' jurisdiction consistent with 
federal, tribal, and state law. We believe that this process will 
balance carefully the principles of tribal sovereignty and the 
demonstrated need for access to affordable telecommunications services 
on tribal lands, against the appropriate exercise of state jurisdiction 
over carriers operating on such lands.
    85. As discussed, we conclude that section 214(e)(6) of the Telecom 
Act directs the Commission to perform the eligibility designation in 
instances where the carrier is not subject to the jurisdiction of a 
state commission. Neither section 214(e)(2) of the Telecom Act nor 
section 214(e)(6) of the Telecom Act, however, address how such 
jurisdictional determinations should be made or by which commission. In 
the absence of specific guidance in the statute as to how such 
jurisdictional determinations should be made, we conclude that this 
Commission may resolve the threshold question of whether a carrier 
seeking eligibility designation for service provided on tribal lands is 
subject to the jurisdiction of the state commission. This conclusion is 
consistent with the execution of our duty to preserve and advance 
universal service under section 254 of the Telecom Act, principles of 
tribal sovereignty, and the unique federal trust relationship between 
Indians tribes and the federal government.
    86. We recognize that a determination as to whether a state 
commission lacks jurisdiction over a carrier providing service on 
tribal lands is a legally complex inquiry extending beyond 
interpretations of state law to principles of tribal sovereignty, 
federal Indian law, and treaties. Evaluating the extent to which a 
state commission has jurisdiction over activities conducted on tribal 
lands, whether by members or non-members of a tribe, will involve 
questions of whether state regulation is preempted by federal 
regulation, whether state regulation is consistent with tribal 
sovereignty and self-determination, and whether a tribe has consented 
to state jurisdiction in treaties or otherwise. Thus, we find that such 
jurisdictional determinations, which will involve an analysis of 
principles of tribal sovereignty, federal Indian law, treaties, and 
state law, may be appropriately performed by this Commission.
    87. The jurisdictional ambiguities associated with the question of 
whether a state may designate a carrier serving tribal lands may 
unnecessarily delay the provision of affordable services in high-cost 
areas. We intend this framework to facilitate the designation of 
carriers eligible to receive federal universal service support for 
service provided on tribal lands by permitting such carriers to seek 
resolution of the jurisdictional issue directly from this Commission. 
Absent this framework, the designation of such carriers as eligible to 
receive federal universal service support may be otherwise 
unnecessarily delayed pending resolution of the jurisdictional 
question, or potentially prevented entirely in those instances where 
the tribal authority will not support the carrier's submission to state 
commission jurisdiction.
    88. Moreover, in establishing this framework for the designation of 
eligible telecommunications carriers serving tribal lands, we are 
guided by our recognition of, and respect for, principles of tribal 
sovereignty and self-determination. As described in the Commission's 
Indian Policy Statement, we acknowledge the principles of tribal 
sovereignty and self-government and the unique trust relationship 
between the Indian tribes and the federal government. We are mindful 
that the federal trust doctrine imposes on federal agencies a fiduciary 
duty to conduct their authority in matters affecting Indian tribes in a 
manner that protects the interest of the tribes. We are also mindful 
that federal rules and policies should therefore be interpreted in a 
manner that comports with tribal sovereignty and the federal policy of 
empowering tribal independence.
    89. In light of our obligation to preserve and advance universal 
service under section 254 of the Telecom Act, principles of tribal 
sovereignty and self-determination, and our unique federal trust 
responsibility, we adopt the following framework for resolution of 
designation requests under section 214(e)(6) of the Telecom Act for 
carriers serving tribal lands. We conclude that a carrier seeking a 
designation of eligibility to receive federal universal service support 
for telecommunications service provided on tribal lands may petition 
the Commission for designation under section 214(e)(6) of the Telecom 
Act, without first seeking designation from the appropriate state 
commission. The petitioner must set forth in its petition the basis for 
its assertion that it is not subject to the state commission's 
jurisdiction, and bears the burden of proving that assertion. The 
petitioner must provide copies of its petition to the appropriate state 
commission at the time of filing with the Commission. The Commission 
will release, and publish in the Federal Register, a public notice 
establishing a pleading cycle for comments on the petition. The 
Commission will also send the public notice announcing the comment and 
reply dates to the affected state commission by overnight express mail 
to ensure that the state commission is notified of the notice and 
comment period.
    90. Based on the evidence presented in the record, the Commission 
shall make a determination as to whether the carrier has sufficiently 
demonstrated that it is not subject to the state commission's 
jurisdiction. In the event the Commission determines that the state 
commission lacks jurisdiction to make the designation and the petition 
is properly before the Commission under section 214(e)(6) of the 
Telecom Act, the Commission will decide the merits of the request 
within six months of release of an order resolving the jurisdictional 
issue. If the carrier fails to meet its burden of proof that it is not 
subject to the state commission's jurisdiction, the Commission will 
dismiss the request and direct the carrier to seek designation from the 
appropriate state commission. In such cases, we urge state commissions 
to act within a similar time frame (i.e., six months) to resolve such 
requests as expeditiously as possible.
    91. We emphasize that a carrier seeking a section 214(e)(6) of the 
Telecom Act designation for service provided on tribal lands must bear 
the

[[Page 47898]]

burden of demonstrating that it is not subject to the state 
commission's jurisdiction. As discussed, we reject the contention that 
section 214(e)(6) of the Telecom Act provides the Commission with the 
blanket authority to make all eligible telecommunications carrier 
designations over carriers providing service on tribal lands. In so 
doing, we recognize that the issue of whether a state commission may 
exercise jurisdiction over a carrier providing service on tribal lands 
is a particularized inquiry guided by principles of tribal sovereignty, 
federal Indian law, and treaties, as well as state law. Therefore, 
carriers seeking an eligibility designation from this Commission for 
the provision of service on tribal lands should provide fact-specific 
support demonstrating that the carrier is not subject to the state 
commission's jurisdiction for the provision of service on tribal lands. 
Such support should include any relevant case law, statutes, and 
treaties. We emphasize that this is a strict burden and that 
generalized assertions regarding the state commission's lack of 
jurisdiction will not suffice to confer jurisdiction on this Commission 
under section 214(e)(6) of the Telecom Act. We would also find 
informative any statements and analyses the tribal authority might 
provide regarding the petitioner's request for designation and the 
state commission's exercise of jurisdiction. For example, carriers may 
include with their petitions a letter from the appropriate tribal 
authority addressing the jurisdictional question or the merits of the 
designation request.
    92. We decline to place on the affected state commission the burden 
of proving that it has jurisdiction over a particular carrier. To do so 
would suggest that state commission bear the burden of overcoming a 
general presumption that states do not have jurisdiction over carriers 
providing service on tribal lands. Such a presumption is inconsistent 
with our determination that the issue of whether a state commission 
lacks jurisdiction over a carrier providing service on tribal lands is 
a particularized inquiry, and thus specific to each state and the facts 
and circumstances surrounding the provision of the service.
    93. We strongly encourage the participation of the affected state 
commissions and tribal authorities in this process. The determination 
of whether a particular carrier is subject to the state commission's 
jurisdiction for service provided on tribal lands is one that will be 
greatly informed by the participation of the tribes and state 
commission or other state officials. Based on our experience to date 
with section 214(e)(6) of the Telecom Act, we believe that there will 
be some state commissions that will not object to the Commission's 
designation of carriers serving tribal lands as eligible to receive 
federal universal service support. We look forward to working with the 
state commissions, tribal authorities, and members of industry to 
resolve these jurisdictional questions, and ultimately the designation 
requests, in an expeditious manner. To that end, we seek comment in a 
Further Notice of Proposed Rulemaking on additional measures that may 
be implemented to further facilitate the designation process for the 
provision of service on tribal lands.
    94. We emphasize, however, that this process is limited in several 
respects. First, a carrier may avail itself of this process only to 
seek a designation of eligibility to receive federal universal service 
support for service provided on tribal lands. Petitioners seeking an 
eligibility designation under section 214(e)(6) of the Telecom Act for 
service provided on tribal lands must accurately describe the specific 
geographic areas they wish to serve, and must demonstrate that such 
areas satisfy the definition of tribal lands we adopt in this Order. As 
discussed, the federal government has a unique trust responsibility 
with respect to members of federally-recognized tribes. In addition, 
the determination of jurisdiction over a carrier serving tribal lands 
is an inquiry that will extend beyond questions of state law, and will 
be informed by principles of tribal sovereignty, federal law, and 
treaties. Thus, it is appropriate and reasonable that the Commission, 
in executing its statutory obligation to preserve and advance universal 
service, should determine whether a carrier seeking an eligibility 
designation for services provided on tribal lands is subject to the 
state commission's jurisdiction.
    95. Second, a carrier may only avail itself of this process when it 
has not initiated a designation proceeding before the affected state 
commission. In order to avoid the potential for ``forum-shopping'' and 
the costs and confusion caused by a duplication of efforts between this 
Commission and state commissions, we will not make a jurisdictional 
determination under section 214(e)(6) of the Telecom Act if the 
affected state commission has initiated a proceeding in response to a 
designation request under section 214(e)(2) of the Telecom Act. Nothing 
we adopt today affects the ability of a state commission to make an 
eligible telecommunications carrier designation for a carrier serving 
tribal lands, where jurisdiction may otherwise be in dispute among the 
parties.
    96. Finally, any determination made by this Commission pursuant to 
section 214(e)(6) of the Telecom Act relates only to a carrier's 
eligibility to receive federal universal service support for the 
provision of service on tribal lands. We emphasize that the 
Commission's determination of whether a particular carrier is subject 
to the state commission's jurisdiction for service provided on tribal 
lands is limited to the state commission's ability to designate the 
carrier as eligible to receive federal universal service support.

B. Pending Requests for Designation Pursuant to Section 214(e)(6) of 
the Telecom Act

(1) Cellco Petition for Designation as an Eligible Telecommunications 
Carrier for Maryland and Delaware
    97. Discussion. Consistent with the Maryland Commission's request 
and our conclusions concerning the role state commissions play in the 
designation of carriers under section 214(e) of the Telecom Act, we 
dismiss without prejudice Cellco's request for designation of eligible 
telecommunications carrier status for service provided in Maryland. 
Although we do not reach the merits of the Cellco request for 
designation in Delaware in this Order, we conclude that the Delaware 
Commission's comments in this proceeding provide a sufficient basis for 
the exercise of our jurisdiction to consider the merits of the request 
for designation under section 214(e)(6) of the Telecom Act. We will 
discuss each of the requests in greater detail.
    98. Maryland Request. At the request of the Maryland Commission, we 
dismiss Cellco's request for designation as an eligible 
telecommunications carrier in Maryland. In a letter to the Commission 
on April 18, 2000, the Maryland Commission stated its intent to assert 
jurisdiction over CMRS providers, including Cellco, for purposes of 
making eligible telecommunications carrier designations in Maryland. We 
are not persuaded by Cellco's statement that it has ``informally 
confirmed with the professional staffs of the Maryland and Delaware 
commissions that these statutory exclusions are complete exclusions 
from the commissions' jurisdiction.'' We emphasize that carriers 
seeking a designation from this Commission for service provided on non-
tribal lands must provide to us an affirmative statement from the state 
commission or a court of competent

[[Page 47899]]

jurisdiction that the carrier is not subject to the state commission's 
jurisdiction for purposes of eligible carrier designation.
    99. We decline Cellco's invitation that we should interpret the 
relevant state law to conclude that it is not subject to the state 
commission's jurisdiction. We note that, while Cellco has cited 
provisions of applicable state law in both Delaware and Maryland to 
support its contention that the state regulatory commission has no 
designation authority over wireless carriers, we believe that, as a 
matter of federal-state comity, such interpretations are better 
performed by the affected state commissions. As this case demonstrates, 
in the absence of explicit state guidance in the form of an affirmative 
statement from the state commission or a court of competent 
jurisdiction regarding the interpretation of its state law, premature 
intervention by the Commission may lead to confusion and duplication of 
efforts with the state commission, and an improper exercise of our 
jurisdiction under section 214(e)(6) of the Telecom Act.
    100. Should Cellco challenge the Maryland Commission's exercise of 
authority under section 214(e)(2) of the Telecom Act, resolution of the 
jurisdictional issue may be obtained either through the state 
commission proceeding or in a judicial proceeding. Should the state 
commission or courts ultimately determine that Cellco is not subject to 
the state commission's jurisdiction for purposes of the eligibility 
designation, the Commission will assume the designation responsibility 
under section 214(e)(6) of the Telecom Act upon request. We reiterate 
our expectation that state commissions will act as expeditiously as 
possible on requests for designation. Should Cellco submit to the 
Maryland Commission a request for designation under section 214(e)(2) 
of the Telecom Act, we strongly encourage the Maryland Commission to 
resolve this request within six months of the filing date.
    101. Delaware Request. With regard to Cellco's request for 
designation as an eligible telecommunications carrier for service 
provided in Delaware, we conclude that the statements contained in 
comments filed by the Delaware Commission are sufficient to warrant our 
assertion of jurisdiction under section 214(e)(6) of the Telecom Act. 
In its comments, the Delaware Commission confirms that the Delaware 
General Assembly has, for almost two decades, withheld from the 
Delaware Commission jurisdiction over cellular service or other mobile 
radio services. Specifically, the Delaware Commission cites to Delaware 
law stating that it ``shall have no jurisdiction over the operation of 
telephone service provided by cellular technology or by domestic public 
land mobile radio service or over the rates to be charged for such 
service or over property, property rights, equipment or facilities 
employed in such service.'' According to the Delaware Commission, it 
has consistently taken the position that it has not been granted 
regulatory jurisdiction over any aspect of telephone service provided 
by mobile, and now fixed, cellular wireless technology. The Delaware 
Commission states that it does not currently exercise any form of 
supervisory jurisdiction over wireless CMRS providers, including 
Cellco, and acknowledges that this Commission, not the Delaware 
Commission, ``must be the entity to * * * supervise and enforce the 
proper application of such support by Cellco.''
    102. Consistent with the framework adopted in this Order, we 
conclude that we have jurisdiction to consider Cellco's request for 
designation as an eligible telecommunications carrier for services 
provided in Delaware. As a result, we will address Cellco's Delaware 
request for designation as an eligible telecommunications carrier 
within six months from the release date of this Order.
(2) Western Wireless Petition for Designation as an Eligible 
Telecommunications Carrier for Wyoming
    103. Discussion. Consistent with the framework adopted in this 
Order, we conclude that we have the authority under section 214(e)(6) 
of the Telecom Act to consider this petition. We commend the Wyoming 
Commission for its resolution of the threshold jurisdictional question, 
and encourage other state commissions to resolve such issues as 
expeditiously as possible. As with the Cellco Delaware request, we will 
promptly decide the merits of Western Wireless' request for designation 
in Wyoming within six months from the release date of this Order.
(3) Western Wireless Petition To Be Designated as an Eligible 
Telecommunications Carrier for the Crow Reservation in Montana
    104. Discussion. Consistent with the framework we adopt in this 
Order, we will resolve the threshold question of whether Western 
Wireless is subject to the jurisdiction of the Montana Commission for 
purposes of determining eligibility for federal support for services 
provided on the Crow Reservation. As discussed, we have concluded that 
section 214(e)(6) of the Telecom Act does not provide the Commission 
with the per se authority to designate carriers based solely on the 
provision of service on tribal lands. As noted, determinations as to 
whether a state commission lacks jurisdiction over carriers serving 
tribal lands involves a fact-specific inquiry informed by principles of 
tribal sovereignty, treaties, state law, and federal Indian law. 
Consistent with the discussion, we conclude that Western Wireless 
should bear the burden of demonstrating that it is not subject to the 
jurisdiction of the Montana Commission for purposes of an eligibility 
designation for services provided on the Crow Reservation.
    105. Consistent with the framework we establish and to permit 
Western Wireless a full and fair opportunity to present a case 
consistent with the guidance we give in this Order, we will reopen the 
record in this proceeding to allow Western Wireless an opportunity to 
supplement its claim that the Montana Commission lacks jurisdiction to 
make the designation for service provided on the Crow Reservation. 
Western Wireless shall notify the Commission in writing within 15 days 
of release of this Order whether it wishes to supplement the record 
consistent with the determinations in this Order. If Western Wireless 
chooses to supplement the record, it shall do so within 30 days of the 
date it notifies the Commission of its intent to do so. It shall also 
provide copies of the supplemental filing to the Montana Commission at 
the time of its filing with the Commission. In any event, the 
Commission will release, and publish in the Federal Register, a public 
notice announcing that the Montana Commission, and any other interested 
party, shall have 30 days to respond to Western Wireless' original 
petition and/or supplemental filing. To ensure that the Montana 
Commission receives prompt notification of the 30-day period, the 
Commission shall also send to the Montana Commission, by overnight 
express mail, the public notice announcing the comment cycle deadline. 
Should the Commission determine, on the basis of the record developed, 
that the Montana Commission does not have authority to perform the 
eligibility designation for Western Wireless' service provided on the 
Crow Reservation, the Commission will exercise its authority under 
section 214(e)(6) of the Telecom Act to decide the merits of the 
request within six

[[Page 47900]]

months after release of an order resolving the jurisdictional issue.
(4) Smith Bagley Petition To Be Designated as an Eligible 
Telecommunications Carrier in Arizona and New Mexico
    106. Discussion. Consistent with the framework we adopt in this 
Order for the designation of carriers serving tribal lands, we dismiss 
without prejudice Smith Bagley's section 214(e)(6) of the Telecom Act 
request for designation as an eligible telecommunications carrier for 
tribal lands in Arizona and New Mexico. Both the Arizona and New Mexico 
Commissions are currently considering section 214(e)(2) of the Telecom 
Act requests for designation filed by Smith Bagley prior to the date of 
their filing with this Commission. As we concluded, in order to avoid 
the possibility of forum-shopping and the costs and confusion caused by 
a duplication of efforts between this Commission and state commissions, 
we decline to address a designation request under section 214(e)(6) of 
the Telecom Act if a request for eligible telecommunications carrier 
designation is pending at the state commission.
    107. Accordingly, we dismiss without prejudice Smith Bagley's 
request for designation under section 214(e)(6) of the Telecom Act to 
permit the Arizona and New Mexico Commissions to complete their 
proceedings on the merits of Smith Bagley's pending requests. We 
request, however, that both state commissions act expeditiously in 
consideration of Smith Bagley's designation requests. We note that 
those requests have now been pending for over one year. As we have 
discussed, we are concerned that unreasonable delays in acting upon 
designation requests will hinder the availability of affordable 
telecommunications services in high-cost areas. We therefore strongly 
encourage the Arizona and New Mexico Commissions to resolve Smith 
Bagley's pending requests for designation as soon as possible.
(5) Cheyenne River Sioux Tribe Telephone Authority Petition for 
Designation as an Eligible Telecommunications Carrier
    108. Discussion. In accordance with our conclusion that section 
214(e)(6) of the Telecom Act requires the Commission to designate an 
eligible telecommunications carrier only when the state lacks 
jurisdiction under section 214(e)(2) of the Telecom Act, we dismiss 
Cheyenne Telephone Authority's petition without prejudice. We find no 
reason before us to disturb the South Dakota Commission's designation 
of the Cheyenne Telephone Authority as an eligible telecommunications 
carrier. In addition, we note that this conclusion is consistent with 
our prior statement that, ``[a]ny carrier that is able to be or has 
already been designated as an eligible telecommunications carrier by a 
state commission is not required to receive such designation from the 
Commission.''
    109. In reaching this conclusion we note that, as with the case of 
the Cheyenne Telephone Authority, many tribes may have ongoing 
jurisdictional disputes with state commissions. We are hopeful that our 
decision not to disturb the finding of the state commission in this 
instance will encourage state commissions and tribes to move forward 
with the designation process for determining eligibility for federal 
universal service support despite disagreements relating to the state's 
exercise of jurisdiction over carriers providing service on tribal 
lands. We believe that to disturb a state commission's prior 
determination that a particular carrier is eligible for federal 
universal service support would have the unintended effect of forcing 
the tribal authority to choose between delaying its designation request 
pending a lengthy resolution of disputed jurisdictional issues or 
conceding jurisdiction to the state commission for other purposes in 
order to be eligible for federal universal service support.

IV. Procedural Matters

A. Paperwork Reduction Act

    110. The action contained herein has been analyzed with respect to 
the Paperwork Reduction Act of 1995 (PRA) and found to impose new or 
modified reporting and/or recordkeeping requirements or burdens on the 
public. Implementation of these new or modified reporting and/or 
recordkeeping requirements will be subject to approval by the Office of 
Management and Budget (OMB) as prescribed by the PRA, and will go into 
effect upon announcement in the Federal Register of OMB approval.

B. Final Regulatory Flexibility Analysis

    111. As required by the Regulatory Flexibility Act (RFA), an 
Initial Regulatory Flexibility Analysis (IRFA) was incorporated into 
the FNPRM. The Commission sought written public comment on the 
proposals in the FNPRM, including comment on the IRFA. This present 
Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
(1) Need for and Objectives of this Report and Order and the Rules 
Adopted Herein
    112. The Commission issues this Twelfth Report and Order (Order) as 
a part of its implementation of the Act's mandate that ``[c]onsumers in 
all regions of the Nation * * * have access to telecommunications and 
information services * * *.'' This Order implements that mandate by 
enhancing Lifeline and LinkUp support for low-income individuals living 
on tribal lands, as defined herein. This Order also outlines the 
process the Commission will follow in designating telecommunications 
carriers as eligible telecommunications carriers under section 214(e) 
of the Telecom Act for the purposes of receiving universal service 
support under section 254(e) of the Telecom Act. Our objective is to 
fulfill section 254 of the Telecom Act's mandate that ``all regions of 
the Nation * * * have access to telecommunications'' with respect to 
tribal lands, which have the lowest reported subscribership levels for 
telecommunications in the Nation.
(2) Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA
    113. We received no comments directly in response to the IRFA in 
this proceeding. Some comments generally addressed small business 
issues, but these issues are not a part of this present Order.
(3) Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply
    114. 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 new rules. The RFA generally defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction.'' In 
addition, the term ``small business'' has the same meaning as the term 
``small business concern'' under the Small Business Act. A small 
business concern is one that: (1) Is independently owned and operated; 
(2) is not dominant in its field of operation; and (3) satisfies any 
additional criteria established by the Small Business Administration 
(SBA). 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 1992, there were 
approximately 275,801 small organizations. And finally, ``small 
governmental jurisdiction'' generally

[[Page 47901]]

means ``governments of cities, counties, towns, townships, villages, 
school districts, or special districts, with a population of less than 
50,000.'' As of 1992, there were approximately 85,006 such 
jurisdictions in the United States. This number includes 38,978 
counties, cities, and towns; of these, 37,566, or 96 percent, have 
populations of fewer than 50,000. The Census Bureau estimates that this 
ratio is approximately accurate for all governmental entities. Thus, of 
the 85,006 governmental entities, we estimate that 81,600 (91 percent) 
are small entities. In this Order, the Commission stated that the new 
rules will affect all providers of interstate telecommunications and 
interstate telecommunications services. We further describe and 
estimate the number of small business concerns that may be affected by 
the rules adopted in this Order.
    115. The SBA has defined a small business for Standard Industrial 
Classification (SIC) categories 4812 (Radiotelephone Communications) 
and 4813 (Telephone Communications, Except Radiotelephone) to be small 
entities when they have no more than 1,500 employees. We first discuss 
the number of small telephone companies falling within these SIC 
categories, then attempt to refine further those estimates to 
correspond with the categories of telecommunications companies that are 
commonly used under our rules.
    116. The most reliable source of information regarding the total 
numbers of common carriers and related providers nationwide, including 
the numbers of commercial wireless entities, appears to be data the 
Commission publishes annually in its Carrier Locator report, derived 
from filings made in connection with the Telecommunications Relay 
Service (TRS). According to data in the most recent report, there are 
4,144 interstate carriers. These carriers include, inter alia, 
incumbent local exchange carriers, competitive local exchange carriers, 
competitive access providers, interexchange carriers, other wireline 
carriers and service providers (including shared-tenant service 
providers and private carriers), operator service providers, pay 
telephone operators, providers of telephone toll service, wireless 
carriers and services providers, and resellers.
    117. We have included small incumbent LECs in this present RFA 
analysis. As noted, a ``small business'' under the RFA is one that, 
inter alia, meets the pertinent small business size standard (e.g., a 
telephone communications business having 1,500 or fewer employees), and 
``is not dominant in its field of operation.'' The SBA's Office of 
Advocacy contends that, for RFA purposes, small incumbent LECs are not 
dominant in their field of operation because any such dominance is not 
``national'' in scope. We have therefore included small incumbent LECs 
in this RFA analysis, although we emphasize that this RFA action has no 
effect on Commission analyses and determinations in other, non-RFA 
contexts.
    118. Total Number of Telephone Companies Affected. The United 
States Bureau of the Census (``the Census Bureau'') reports that, at 
the end of 1992, there were 3,497 firms engaged in providing telephone 
services, as defined therein, for at least one year. This number 
contains a variety of different categories of carriers, including local 
exchange carriers, interexchange carriers, competitive access 
providers, cellular carriers, mobile service carriers, operator service 
providers, pay telephone operators, PCS providers, covered SMR 
providers, and resellers. It seems certain that some of those 3,497 
telephone service firms may not qualify as small entities or small 
incumbent LECs because they are not ``independently owned and 
operated.'' For example, a PCS provider that is affiliated with an 
interexchange carrier having more than 1,500 employees would not meet 
the definition of a small business. It seems reasonable to conclude, 
therefore, that fewer than 3,497 telephone service firms are small 
entity telephone service firms or small incumbent LECs that may be 
affected by the decisions and rules in this Order.
    119. Wireline Carriers and Service Providers. SBA has developed a 
definition of small entities for telephone communications companies 
other than radiotelephone companies. The Census Bureau reports that, 
there were 2,321 such telephone companies in operation for at least one 
year at the end of 1992. According to SBA's definition, a small 
business telephone company other than a radiotelephone company is one 
employing no more than 1,500 persons. All but 26 of the 2,321 non-
radiotelephone companies listed by the Census Bureau were reported to 
have fewer than 1,000 employees. Thus, even if all 26 of those 
companies had more than 1,500 employees, there would still be 2,295 
non-radiotelephone companies that might qualify as small entities or 
small incumbent LECs. Although it seems certain that some of these 
carriers are not independently owned and operated, we are unable at 
this time to estimate with greater precision the number of wireline 
carriers and service providers that would qualify as small business 
concerns under SBA's definition. Consequently, we estimate that there 
are fewer than 2,295 small entity telephone communications companies 
other than radiotelephone companies that may be affected by the 
decisions and rules in this Order.
    120. Local Exchange Carriers, Interexchange Carriers, Competitive 
Access Providers, Operator Service Providers, and Resellers. Neither 
the Commission nor SBA has developed a definition particular to small 
local exchange carriers (LECs), interexchange carriers (IXCs), 
competitive access providers (CAPs), operator service providers (OSPs), 
or resellers. The closest applicable definition for these carrier-types 
under SBA rules is for telephone communications companies other than 
radiotelephone (wireless) companies. The most reliable source of 
information regarding the number of these carriers nationwide of which 
we are aware appears to be the data that we collect annually in 
connection with the Telecommunications Relay Service (TRS). According 
to our most recent data, there are 1,348 incumbent LECs, 212 CAPs and 
competitive LECs, 171 IXCs, 24 OSPs, 388 toll resellers, and 54 local 
resellers. Although it seems certain that some of these carriers are 
not independently owned and operated, or have more than 1,500 
employees, we are unable at this time to estimate with greater 
precision the number of these carriers that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are fewer than 1,348 incumbent LECs, 212 CAPs and 
competitive LECs, 171 IXCs, 24 OSPs, 388 toll resellers, and 54 local 
resellers that may be affected by the decisions and rule changes 
adopted in this Order.
    121. Wireless (Radiotelephone) Carriers. SBA has developed a 
definition of small entities for radiotelephone (wireless) companies. 
The Census Bureau reports that there were 1,176 such companies in 
operation for at least one year at the end of 1992. According to SBA's 
definition, a small business radiotelephone company is one employing no 
more than 1,500 persons. The Census Bureau also reported that 1,164 of 
those radiotelephone companies had fewer than 1,000 employees. Thus, 
even if all of the remaining 12 companies had more than 1,500 
employees, there would still be 1,164 radiotelephone companies that 
might qualify as small entities if they are independently owned and 
operated. Although it seems certain that some of these carriers are not 
independently owned and operated, we are unable at this time to 
estimate with greater

[[Page 47902]]

precision the number of radiotelephone carriers and service providers 
that would qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 1,164 small entity 
radiotelephone companies that may be affected by the decisions and 
rules in this Order.
    122. Cellular, PCS, SMR and Other Mobile Service Providers. In an 
effort to further refine our calculation of the number of 
radiotelephone companies that may be affected by the rules adopted 
herein, we consider the data that we collect annually in connection 
with the TRS for the subcategories Wireless Telephony (which includes 
Cellular, PCS, and SMR) and Other Mobile Service Providers. Neither the 
Commission nor the SBA has developed a definition of small entities 
specifically applicable to these broad subcategories, so we will 
utilize the closest applicable definition under SBA rules--which, for 
both categories, is for telephone companies other than radiotelephone 
(wireless) companies. To the extent that the Commission has adopted 
definitions for small entities providing PCS and SMR services, we 
discuss those definitions. According to our most recent TRS data, 808 
companies reported that they are engaged in the provision of Wireless 
Telephony services and 23 companies reported that they are engaged in 
the provision of Other Mobile Services. Although it seems certain that 
some of these carriers are not independently owned and operated, or 
have more than 1,500 employees, we are unable at this time to estimate 
with greater precision the number of Wireless Telephony Providers and 
Other Mobile Service Providers, except as described, that would qualify 
as small business concerns under SBA's definition. Consequently, we 
estimate that there are fewer than 808 small entity Wireless Telephony 
Providers and fewer than 23 small entity Other Mobile Service Providers 
that might be affected by the decisions and rules adopted in this 
Order.
    123. Broadband PCS Licensees. The broadband PCS spectrum is divided 
into six frequency blocks designated A through F, and the Commission 
has held auctions for each block. The Commission defined ``small 
entity'' for Blocks C and F as an entity that has average gross 
revenues of less than $40 million in the three previous calendar years. 
For Block F, an additional classification for ``very small business'' 
was added, and is defined as an entity that, together with its 
affiliates, has average gross revenues of not more than $15 million for 
the preceding three calendar years. These regulations defining ``small 
entity'' in the context of broadband PCS auctions have been approved by 
SBA. No small businesses within the SBA-approved definition bid 
successfully for licenses in Blocks A and B. There were 90 winning 
bidders that qualified as small entities in the Block C auctions. A 
total of 93 small and very small business bidders won approximately 40 
percent of the 1,479 licenses for Blocks D, E, and F. However, licenses 
for Blocks C through F have not been awarded fully, therefore there are 
few, if any, small businesses currently providing PCS services. Based 
on this information, we estimate that the number of small broadband PCS 
licenses will include the 90 winning C Block bidders and the 93 
qualifying bidders in the D, E, and F blocks, for a total of 183 small 
PCS providers as defined by SBA and the Commissioner's auction rules.
    124. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission 
has defined ``small entity'' in auctions for geographic area 800 MHz 
and 900 MHz SMR licenses as a firm that had average annual gross 
revenues of less than $15 million in the three previous calendar years. 
The definition of a ``small entity'' in the context of 800 MHz SMR has 
been approved by the SBA, and approval for the 900 MHz SMR definition 
has been sought. The rules may apply to SMR providers in the 800 MHz 
and 900 MHz bands that either hold geographic area licenses or have 
obtained extended implementation authorizations. We do not know how 
many firms provide 800 MHz or 900 MHz geographic area SMR service 
pursuant to extended implementation authorizations, nor how many of 
these providers have annual revenues of less than $15 million. 
Consequently, we estimate, for purposes of this IRFA, that all of the 
extended implementation authorizations may be held by small entities, 
some of which may be affected by the decisions and rules in this Order.
    125. The Commission recently held auctions for geographic area 
licenses in the 900 MHz SMR band. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. Based on this 
information, we estimate that the number of geographic area SMR 
licensees that may be affected by the decisions and rules in the order 
and order on reconsideration includes these 60 small entities. No 
auctions have been held for 800 MHz geographic area SMR licenses. 
Therefore, no small entities currently hold these licenses. A total of 
525 licenses will be awarded for the upper 200 channels in the 800 MHz 
geographic area SMR auction. The Commission, however, has not yet 
determined how many licenses will be awarded for the lower 230 channels 
in the 800 MHz geographic area SMR auction. There is no basis, 
moreover, on which to estimate how many small entities will win these 
licenses. Given that nearly all radiotelephone companies have fewer 
than 1,000 employees and that no reliable estimate of the number of 
prospective 800 MHz licensees can be made, we estimate, for purposes of 
this IRFA, that all of the licenses may be awarded to small entities, 
some of which may be affected by the decisions and rules in this Order.
    126. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. There are approximately 1,515 
such non-nationwide licensees and four nationwide licensees currently 
authorized to operate in the 220 MHz band. The Commission has not 
developed a definition of small entities specifically applicable to 
such incumbent 220 MHz Phase I licensees. To estimate the number of 
such licensees that are small businesses, we apply the definition under 
the SBA rules applicable to Radiotelephone Communications companies. 
According to the Bureau of the Census, only 12 radiotelephone firms out 
of a total of 1,178 such firms which operated during 1992 had 1,000 or 
more employees. Therefore, if this general ratio continues to 1999 in 
the context of Phase I 220 MHz licensees, we estimate that nearly all 
such licensees are small businesses under the SBA's definition.
    127. 220 MHz Radio Service--Phase II Licensees. The Phase II 220 
MHz service is a new service, and is subject to spectrum auctions. In 
the 220 MHz Third Report and Order, 62 FR 1004 (April 3, 1997), we 
adopted criteria for defining small businesses and very small 
businesses for purposes of determining their eligibility for special 
provisions such as bidding credits and installment payments. We have 
defined a small business as an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $15 million for the preceding three years. Additionally, a 
very small business is defined as an entity that, together with its 
affiliates and controlling principals, has average gross revenues that 
are not more than $3 million for the preceding three years. An auction 
of Phase II licenses commenced on September 15, 1998, and closed on 
October 22, 1998. 908 licenses were auctioned in 3 different-sized 
geographic areas: three nationwide licenses, 30 Regional Economic Area

[[Page 47903]]

Group Licenses, and 875 Economic Area (EA) Licenses. Of the 908 
licenses auctioned, 693 were sold. Companies claiming small business 
status won: one of the Nationwide licenses, 67 percent of the Regional 
licenses, and 54 percent of the EA licenses. As of January 22, 1999, 
the Commission announced that it was prepared to grant 654 of the Phase 
II licenses won at auction. A reauction of the remaining, unsold 
licenses was completed on June 30, 1999, with 16 bidders winning 222 of 
the Phase II licenses. As a result, we estimate that 16 or fewer of 
these final winning bidders are small or very small businesses.
    128. Narrowband PCS. The Commission has auctioned nationwide and 
regional licenses for narrowband PCS. There are 11 nationwide and 30 
regional licensees for narrowband PCS. The Commission does not have 
sufficient information to determine whether any of these licensees are 
small businesses within the SBA-approved definition for radiotelephone 
companies. At present, there have been no auctions held for the major 
trading area (MTA) and basic trading area (BTA) narrowband PCS 
licenses. The Commission anticipates a total of 561 MTA licenses and 
2,958 BTA licenses will be awarded by auction. Such auctions have not 
yet been scheduled, however. Given that nearly all radiotelephone 
companies have no more than 1,500 employees and that no reliable 
estimate of the number of prospective MTA and BTA narrowband licensees 
can be made, we assume, for purposes of this FRFA, that all of the 
licenses will be awarded to small entities, as that term is defined by 
the SBA.
    129. Rural Radiotelephone Service. The Commission has not adopted a 
definition of small entity specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio Systems (BETRS). We will use the 
SBA's definition applicable to radiotelephone companies, i.e., an 
entity employing no more than 1,500 persons. There are approximately 
1,000 licensees in the Rural Radiotelephone Service, and we estimate 
that almost all of them qualify as small entities under the SBA's 
definition.
    130. Air-Ground Radiotelephone Service. The Commission has not 
adopted a definition of small entity specific to the Air-Ground 
Radiotelephone Service. Accordingly, we will use the SBA's definition 
applicable to radiotelephone companies, i.e., an entity employing no 
more than 1,500 persons. There are approximately 100 licensees in the 
Air-Ground Radiotelephone Service, and we estimate that almost all of 
them qualify as small entities under the SBA definition.
    131. Fixed Microwave Services. Microwave services include common 
carrier, private-operational fixed, and broadcast auxiliary radio 
services. At present, there are approximately 22,015 common carrier 
fixed licensees in the microwave services. The Commission has not yet 
defined a small business with respect to microwave services. For 
purposes of this IRFA, we will utilize the SBA's definition applicable 
to radiotelephone companies--i.e., an entity with no more than 1,500 
persons. We estimate, for this purpose, that all of the Fixed Microwave 
licensees (excluding broadcast auxiliary licensees) would qualify as 
small entities under the SBA definition for radiotelephone companies.
    132. Wireless Communications Services. This service can be used for 
fixed, mobile, radio location and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The Commission auctioned 
geographic area licenses in the WCS service. In the auction, there were 
seven winning bidders that qualified as very small business entities, 
and one that qualified as a small business entity. We conclude that the 
number of geographic area WCS licensees that may be affected by the 
decisions and rules in this Order includes these eight entities.
    133. Multipoint Distribution Systems (MDS). The Commission has 
defined ``small entity'' for the auction of MDS as an entity that, 
together with its affiliates, has average gross annual revenues that 
are not more than $40 million for the preceding three calendar years. 
This definition of a small entity in the context of MDS auctions has 
been approved by the SBA. The Commission completed its MDS auction in 
March 1996 for authorizations in 493 basic trading areas (BTAs). Of 67 
winning bidders, 61 qualified as small entities.
    134. MDS is also heavily encumbered with licensees of stations 
authorized prior to the auction. The SBA has developed a definition of 
small entities for pay television services, which includes all such 
companies generating $11 million or less in annual receipts. This 
definition includes multipoint distribution systems, and thus applies 
to MDS licensees and wireless cable operators which did not participate 
in the MDS auction. Information available to us indicates that there 
are 832 of these licensees and operators that do not generate revenue 
in excess of $11 million annually. Therefore, for purposes of this 
FRFA, we find there are approximately 892 small MDS providers as 
defined by the SBA and the Commission's auction rules, some which may 
be affected by the decisions and rules in this Order.
(4) Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    135. In this Order, we adopt revisions to Part 54 that enhance 
universal service support for low-income individuals living on tribal 
lands, that remove certain administrative burdens that have prevented 
carriers not subject to state rate regulation, such as many tribal 
carriers, from providing certain tiers of Lifeline service to 
qualifying low-income consumers, and that clarify how the Commission 
will proceed under section 214(e) of the Telecom Act in the designation 
of eligible telecommunications carriers.
    136. With respect to our rules enhancing Lifeline and Link-Up 
assistance on tribal lands, carriers will be required to ascertain 
applicant eligibility for these forms of low-income universal service 
support. Ascertainment of applicant eligibility will entail determining 
whether a particular applicant is (1) a low-income applicant, under the 
criteria for income eligibility set forth; and (2) living on or near a 
reservation. This Order also clarifies and elaborates on carrier 
obligations to publicize the availability of Lifeline and Link-Up 
assistance, although no new carrier obligations are imposed. 
Furthermore, this Order changes the requirements placed upon carriers 
for the provision of second-tier and third-tier Lifeline support. A 
carrier not subject to state rate regulation may now obtain second-tier 
Lifeline support provided it certifies to the Administrator that it 
will pass through the full amount of any second-tier support it 
receives to qualifying low income subscribers, and that it has received 
any non-federal regulatory approvals necessary to implement the 
required rate reduction. Such a carrier also may now obtain third-tier 
Lifeline support provided that the carrier or a tribe provides the 
local matching funds necessary to receive third-tier federal Lifeline 
support. Finally, because carriers are required to make low-income 
assistance available to qualifying customers, the rules and

[[Page 47904]]

decisions in this Order expanding the level and types of support 
available to any carrier's customers will require that carrier to make 
such expanded support available to its qualifying customers.
    137. Our clarification of how the Commission will proceed under 
section 214(e) of the Telecom Act in the designation of eligible 
telecommunications carriers will impose no additional reporting, 
recordkeeping, or other compliance requirements on carriers seeking 
eligible telecommunications carrier designation for the provision of 
service on tribal lands, but instead should diminish some carriers' 
legal costs by setting forth guidelines for carriers seeking such 
designation from the Commission. A state government, however, seeking 
to preserve a claim of its jurisdiction over any carrier seeking such 
designation from the Commission, will have to indicate to the 
Commission its jurisdictional claim in order for the Commission to 
refrain from entertaining such a designation proceeding until the state 
makes a final determination on its jurisdiction over that carrier.
(5) Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    138. With respect to our rules enhancing Lifeline and LinkUp 
assistance on tribal lands, we emphasize that most of the information 
carriers will be required to examine in order to determine applicant 
eligibility are already collected pursuant to other federal programs 
for Indians and for low-income individuals, and are readily available. 
For example, BIA maintains and regularly publishes in the Federal 
Register lists of those areas in the Nation which fall under BIA's 
definition of ``reservation'' or are considered ``near reservation.'' 
Moreover, carriers are already required to determine applicants' income 
eligibility under the existing Lifeline and LinkUp support mechanisms; 
this Order modifies those eligibility criteria merely by providing 
certain additional means-tested programs that low-income individuals 
living on tribal lands may use to establish their income eligibility. 
In order to apply these new eligibility criteria, carriers will not be 
required to make de novo evaluations of subscriber eligibility. Rather, 
carriers will only need to consult the decisions regarding particular 
applicants' low-income status already made by other government 
entities. Thus, the inquiry carriers will have to make to determine 
whether an applicant for the low-income support adopted in this Order 
meets the income eligibility requirement should not be substantially 
different from the inquiry carriers must already make for the 
Commission's existing low-income support mechanisms. Furthermore, our 
clarification of carrier obligations to publicize the availability of 
Lifeline and Link-Up assistance does not expand existing obligations or 
create additional ones; rather, this Order clarifies existing 
obligations under section 214(e) of the Telecom Act and our previous 
Orders. Additionally, the certifications required by our new rules for 
second and third tier Lifeline support impose at most a minimal burden 
on carriers seeking to obtain such support. Finally, to the extent the 
rules and decisions adopted in this Order require carriers to change 
their operations in order to deliver expanded support to qualifying 
customers, for example by changing their billing systems, we have some 
indication that the costs of making such modifications, if any, are 
minimal. Furthermore, to the extent the rules and decisions adopted in 
this Order entail any such costs, they also provide substantial 
financial benefits, by providing carriers with guaranteed revenue 
streams in place of billings subject to the risks of non-collection. We 
conclude that, in general, the compliance requirements entailed by the 
low-income support mechanisms adopted in this Order are not of a scope 
or magnitude substantially different from the compliance requirements 
entailed by our existing low-income support mechanisms.
    139. With respect to our clarification of how the Commission will 
proceed under section 214(e) of the Telecom Act in the designation of 
eligible telecommunications carriers we conclude that the cost to a 
state government of filing with the Commission a statement asserting 
jurisdiction over any carrier seeking such designation for the 
provision of service to tribal lands, in order for the Commission to 
refrain from acting on the designation petition until the state makes a 
final determination regarding its jurisdiction over that carrier, will 
be minimal. Furthermore, because such filings would be made by the 
authorized state government body, rather than a local governing 
authority, it is doubtful that any government authority making such a 
filing with the Commission would be considered a small entity.
(6) Report to Congress
    140. The Commission will send a copy of this Order, including this 
FRFA, in a report to be sent to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996, see 5 U.S.C. 801(a)(1)(A). 
In addition, the Commission will send a copy of the Order, including 
FRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the Order and FRFA (or summaries thereof) 
will also be published in the Federal Register. See 5 U.S.C. 604(b).

C. Effective Date of Final Rules

    141. Pursuant to 5 U.S.C. 553(d), the rules and rule changes 
adopted herein shall take effect thirty (30) days after their 
publication in the Federal Register.

V. Ordering Clauses

    142. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1-4, 201-205, 218-220, 254, 303(r), and 403 of 
the Communications Act of 1934, as amended, this Report and Order, 
Memorandum Opinion and Order is adopted. The collections of information 
contained within this Order are contingent upon approval by the Office 
of Management and Budget. The Commission will publish a notice 
announcing the effective date of the collections of information.
    143. It is further ordered that part 54 of the Commission's rules, 
is amended, effective thirty (30) days after the publication of this 
Report and Order, Memorandum Opinion and Order in the Federal Register.
    144. It is further ordered that Cellco's Petition for Designation 
as an Eligible Telecommunications Carrier is dismissed without 
prejudice to the extent that it seeks designation for service in 
Maryland.
    145. It is further ordered that Smith Bagley's Petition for 
Designation as an Eligible Telecommunications Carrier is dismissed 
without prejudice.
    146. It is further ordered that the record in Western Wireless' 
Petition for Designation as an Eligible Telecommunications Carrier on 
the Crow Reservation shall be reopened as discussed herein.
    147. It is further ordered that Cheyenne River Sioux Tribe 
Telephone Authority's Petition for Designation as an Eligible 
Telecommunications Carrier is dismissed without prejudice.
    148. It is further ordered that authority is delagated to the Chief 
of the Common Carrier Bureau pursuant to Sec. 0.291 of the Commission 
rules, to modify, or require the filing of, any forms that are 
necessary to implement the decisions and rules adopted in this Order.
    149. It is further ordered that the Commission's Consumer 
Information Bureau, Reference Information Center, shall send a copy of 
this Order, including the Final Regulatory

[[Page 47905]]

Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

List of Subjects in 47 CFR Part 54

    Reporting and recordkeeping requirements, Telecommunications, 
Telephone.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

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

    Authority: 47 U.S.C. 1, 4(i), 201, 205, 214, and 254 unless 
otherwise noted.


    2. Amend Sec. 54.400 by revising paragraph (a) and adding paragraph 
(e) to read as follows:


Sec. 54.400  Terms and definitions.

* * * * *
    (a) Qualifying low-income consumer. A ``qualifying low-income 
consumer'' is a consumer who meets the qualifications for Lifeline, as 
specified in Sec. 54.409.
* * * * *
    (e) Eligible resident of Tribal lands. An ``eligible resident of 
Tribal lands'' is a ``qualifying low-income consumer,'' as defined in 
paragraph (a) of this section, living on or near a reservation, as 
defined in 25 CFR 20.1(r) and 20.1(v).

    3. Amend Sec. 54.401 by revising paragraph (d) to read as follows:


Sec. 54.401  Lifeline defined.

* * * * *
    (d) The state commission shall file or require the eligible 
telecommunications carrier to file information with the Administrator 
demonstrating that the carrier's Lifeline plan meets the criteria set 
forth in this subpart and stating the number of qualifying low-income 
consumers and the amount of state assistance. Eligible 
telecommunications carriers not subject to state commission 
jurisdiction also shall make such a filing with the Administrator. 
Lifeline assistance shall be made available to qualifying low-income 
consumers as soon as the Administrator certifies that the carrier's 
Lifeline plan satisfies the criteria set out in this subpart.

    4. Amend Sec. 54.403 by revising paragraphs (a)(2) and (a)(3), 
adding a new paragraph (a)(4), and revising paragraph (b) to read as 
follows:


Sec. 54.403  Lifeline support amount.

    (a) The federal Lifeline support amount for all eligible 
telecommunications carriers shall equal:
* * * * *
    (2) Tier Two. Additional federal Lifeline support in the amount of 
$1.75 per month will be made available to the eligible 
telecommunications carrier providing Lifeline service to the qualifying 
low-income consumer, if that carrier certifies to the Administrator 
that it will pass through the full amount of Tier-Two support to its 
qualifying, low-income consumers and that it has received any non-
federal regulatory approvals necessary to implement the required rate 
reduction.
    (3) Tier Three. Additional federal Lifeline support in an amount 
equal to one-half the amount of any state-mandated Lifeline support or 
Lifeline support otherwise provided by the carrier, up to a maximum of 
$1.75 per month in federal support, will be made available to the 
carrier providing Lifeline service to a qualifying low-income consumer 
if the carrier certifies to the Administrator that it will pass through 
the full amount of Tier-Three support to its qualifying low-income 
consumers and that it has received any non-federal regulatory approvals 
necessary to implement the required rate reduction.
    (4) Tier Four. Additional federal Lifeline support of up to $25 per 
month will be made available to a eligible telecommunications carrier 
providing Lifeline service to an eligible resident of Tribal lands, as 
defined in Sec. 54.400(e), to the extent that:
    (i) This amount does not bring the basic local residential rate 
(including any mileage, zonal, or other non-discretionary charges 
associated with basic residential service) below $1 per month per 
qualifying low-income subscribers; and
    (ii) The eligible telecommunications carrier certifies to the 
Administrator that it will pass through the full Tier-Four amount to 
qualifying eligible residents of Tribal lands and that it has received 
any non-federal regulatory approvals necessary to implement the 
required rate reduction.
    (b) For a qualifying low-income consumer who is not an eligible 
resident of Tribal lands, as defined in Sec. 54.400(e), the federal 
Lifeline support amount shall not exceed $3.50 plus the tariffed rate 
in effect for the primary residential End User Common Line charge of 
the incumbent local exchange carrier serving the area in which the 
qualifying low-income consumer receives service, as determined in 
accordance with Sec. 69.104 or Sec. 69.152(d) and (q) of this chapter, 
whichever is applicable. For an eligible resident of Tribal lands, the 
federal Lifeline support amount shall not exceed $28.50 plus that same 
End User Common Line charge. Eligible telecommunications carriers that 
charge federal End User Common Line charges or equivalent federal 
charges shall apply Tier-One federal Lifeline support to waive the 
federal End-User Common Line charges for Lifeline consumers. Such 
carriers shall apply any additional federal support amount to a 
qualifying low-income consumer's intrastate rate, if the carrier has 
received the non-federal regulatory approvals necessary to implement 
the required rate reduction. Other eligible telecommunications carriers 
shall apply the Tier-One federal Lifeline support amount, plus any 
additional support amount, to reduce their lowest tariffed (or 
otherwise generally available) residential rate for the services 
enumerated in Sec. 54.101(a)(1) through (a)(9), and charge Lifeline 
consumers the resulting amount.

    5. Revise Sec. 54.405 to read as follows:


Sec. 54.405  Carrier obligation to offer Lifeline.

    All eligible telecommunications carriers shall:
    (a) Make available Lifeline service, as defined in Sec. 54.401, to 
qualifying low-income consumers, and
    (b) Publicize the availability of Lifeline service in a manner 
reasonably designed to reach those likely to qualify for the service.

    6. Amend Sec. 54.409 by revising paragraphs (a) and (b) and adding 
a new paragraph (c) to read as follows:


Sec. 54.409  Consumer qualification for Lifeline.

    (a) To qualify to receive Lifeline service in a state that mandates 
state Lifeline support, a consumer must meet the eligibility criteria 
established by the state commission for such support. The state 
commission shall establish narrowly targeted qualification criteria 
that are based solely on income or factors directly related to income. 
A state containing geographic areas included in the definition of 
``reservation'' and ``near reservation,'' as defined in 25 CFR 20.1(r) 
and 20.1(v), must ensure that its qualification criteria are reasonably 
designed to apply to low-income individuals living in such areas.
    (b) To qualify to receive Lifeline service in a state that does not 
mandate state Lifeline support, a consumer must participate in one of 
the following federal assistance programs: Medicaid;

[[Page 47906]]

food stamps; Supplemental Security Income; federal public housing 
assistance; and Low-Income Home Energy Assistance Program. In a state 
that does not mandate state Lifeline support, each eligible 
telecommunications carrier providing Lifeline service to a qualifying, 
low-income consumer must obtain that consumer's signature on a document 
certifying under penalty of perjury that the consumer receives benefits 
from one of the programs listed in this paragraph and identifying the 
program or programs from which that consumer receives benefits. On the 
same document, a qualifying low-income consumer also must agree to 
notify the carrier if that consumer ceases to participate in the 
program or programs.
    (c) Notwithstanding paragraphs (a) and (b) of this section, an 
individual living on a reservation or near a reservation, as defined in 
25 CFR 20.1(r) and 20.1(v), shall qualify to receive Tiers One, Two, 
and Four Lifeline service if the individual participates in one of the 
following federal assistance programs: Bureau of Indian Affairs general 
assistance; Tribally administered Temporary Assistance for Needy 
Families; Head Start (only those meeting its income qualifying 
standard); or National School Lunch Program's free lunch program. Such 
qualifying low-income consumer shall also qualify for Tier-Three 
Lifeline support, if the carrier offering the Lifeline service is not 
subject to the regulation of the state and provides carrier-matching 
funds, as described in Sec. 54.403(a)(3). To receive Lifeline support 
under this paragraph for the eligible resident of Tribal lands, the 
eligible telecommunications carrier offering the Lifeline service to 
such consumer must obtain the consumer's signature on a document 
certifying under penalty of perjury that the consumer receives benefits 
from at least one of the programs mentioned in this paragraph or 
paragraph (b) of this section, and lives on or near a reservation, as 
defined in 25 CFR 20.1(r)and 20.1(v). In addition to identifying in 
that document the program or programs from which that consumer receives 
benefits, an eligible resident of Tribal lands also must agree to 
notify the carrier if that consumer ceases to participate in the 
program or programs.

    7. Amend Sec. 54.411 by adding new paragraphs (a)(3) and (d) and 
revising paragraph (b) to read as follows:


Sec. 54.411  Link Up program defined.

    (a) * * *
    (3) For an eligible resident of Tribal lands, a reduction of up to 
$70, in addition to the reduction in paragraph (a)(1) of this section, 
to cover 100 percent of the charges between $60 and $130 assessed for 
commencing telecommunications service at the principal place of 
residence of the eligible resident of Tribal lands. For purposes of 
this paragraph, charges assessed for commencing telecommunications 
services shall include any charges that the carrier customarily 
assesses to connect subscribers to the network, including facilities-
based charges associated with the extension of lines or construction of 
facilities needed to initiate service. The reduction shall not apply to 
charges assessed for facilities or equipment that fall on the customer 
side of demarcation point, as defined in Sec. 68.3 of this chapter.
    (b) A qualifying low-income consumer may choose one or both of the 
programs set forth in paragraphs (a)(1) and (a)(2) of this section. An 
eligible resident of Tribal lands may participate in paragraphs (a)(1), 
(a)(2), and (a)(3) of this section.
* * * * *
    (d) An eligible telecommunications carrier shall publicize the 
availability of Link Up support in a manner reasonably designed to 
reach those likely to qualify for the support.

    8. Revise Sec. 54.415 to read as follows:


Sec. 54.415  Consumer qualification for Link Up.

    (a) In a state that mandates state Lifeline support, the consumer 
qualification criteria for Link Up shall be the same as the criteria 
that the state established for Lifeline qualification in accord with 
Sec. 54.409(a).
    (b) In a state that does not mandate state Lifeline support, the 
consumer qualification criteria for Link Up shall be the criteria set 
forth in Sec. 54.409(b).
    (c) Notwithstanding paragraphs (a) and (b) of this section, an 
eligible resident of Tribal lands, as defined in Sec. 54.400(e), shall 
qualify to receive Link Up support.


Sec. 54.417  [Removed]

    9. Remove Sec. 54.417.

[FR Doc. 00-19611 Filed 8-2-00; 8:45 am]
BILLING CODE 6712-01-P