[Federal Register Volume 66, Number 249 (Friday, December 28, 2001)]
[Rules and Regulations]
[Pages 67112-67114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31868]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[CC Docket No. 96-45; FCC 01-350]


Federal-State Joint Board on Universal Service; Petition of the 
State of Alaska for Waiver for the Utilization of Schools and Libraries 
Internet Point-of-Presence in Rural Remote Alaska Villages Where No 
Local Access Exists and Request for Declaratory Ruling

AGENCY: Federal Communications Commission.

ACTION: Final rule; waiver request granted.

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SUMMARY: In this document, the Commission grants the State of Alaska 
(Alaska) a limited waiver, which requires applicants to certify that 
the services requested will be used solely for educational purposes, 
subject to the conditions discussed below. The Commission finds that 
good cause exists to allow members of rural remote communities in 
Alaska, where there is no local or toll-free dial-up Internet access, 
to use excess service obtained through the universal service mechanism 
for schools and libraries when not in use by the schools and libraries 
for educational purposes.

DATES: Effective January 28, 2002.

FOR FURTHER INFORMATION CONTACT: Katherine Tofigh, Attorney, Common 
Carrier Bureau, Accounting Policy Division, (202) 418-1553.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
in CC Docket No. 96-45 adopted on November 29, 2001 and released on 
December 3, 2001. 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, the Commission grants the State of Alaska 
(Alaska) a limited waiver of Sec. 54.504(b)(2)(ii) of the Commission's 
rules, which requires applicants to certify that the services requested 
will be used solely for educational purposes, subject to the conditions 
discussed below. The Commission finds that good cause exists to allow 
members of rural remote communities in Alaska, where there is no local 
or toll-free dial-up Internet access, to use excess service obtained 
through the universal service mechanism for schools and libraries when 
not in use by the schools and libraries for educational purposes.

[[Page 67113]]

II. Discussion

    2. The Commission grants Alaska a limited waiver of 
Sec. 54.504(b)(2)(ii), to permit members of rural remote communities in 
Alaska, where there is no local or toll-free dial-up Internet access, 
to use excess service obtained through the universal service mechanism 
for schools and libraries when the services are not in use by the 
schools and libraries for educational purposes. The Commission grants 
this waiver subject to the following conditions: (1) There is no local 
or toll-free Internet access available in the community; (2) the school 
or library has not requested more services than are necessary for 
educational purposes; (3) no additional costs will be incurred, i.e., 
services subject to a waiver must be purchased on a non-usage sensitive 
basis; (4) any use for noneducational purposes will be limited to hours 
in which the school or library is not open; (5) and the excess services 
are made available to all capable service providers in a neutral manner 
that does not require or take into account any commitments or promises 
from the service providers.
    3. This waiver is dependent on Alaska's implementation of these 
conditions. The Commission believes that these conditions are 
appropriately tailored to narrow the scope of waiver to ensure the 
integrity of the schools and libraries mechanism, yet broad enough to 
provide relief to rural remote communities in Alaska that are 
encountering economic and distance-related challenges to receiving 
telecommunications and advanced services. Maximizing the use of 
services obtained from the schools and libraries program by permitting 
such rural remote communities to use the excess service that is 
available as a result of the non-usage sensitive basis of the service 
and the limited hours that the service is used for educational purposes 
will further the goals of universal service, consistent with the Act. 
If these conditions are satisfied, then the Commission will find that 
special circumstances have been met and that a waiver is in the public 
interest.
    4. As an initial matter, the Commission concludes that there are no 
statutory prohibition against our waiving Sec. 54.504(b)(2)(ii) of the 
Commission's rules. Section 254(h)(1)(B) provides that eligible schools 
and libraries shall receive discounts on certain services for 
educational purposes. Pursuant to the Commission's discretion to 
implement the statute, the Commission narrowly constructed its rule to 
require schools and libraries to certify that they use such discounted 
services solely for educational purposes. This rule supports the 
Commission's efforts to guard against fraud, waste, and abuse. Nothing 
in section 254(h)(1)(B) prohibits the Commission from granting a waiver 
of Sec. 54.504(b)(2)(ii) of its rules to expand the use of such 
services, so long as in the first instance they are used for 
educational purposes.
    5. The Commission's rules, however, may only be waived for good 
cause shown. As noted by the Court of Appeals for the D.C. Circuit, 
agency rules are presumed valid. The Commission may exercise its 
discretion to waive a rule where the particular facts make strict 
compliance inconsistent with the public interest. In addition, the 
Commission may take into account considerations of hardship, equity, or 
more effective implementation of overall policy on an individual basis. 
Waiver of the Commission's rules is therefore appropriate only if 
special circumstances warrant a deviation from the general rule, and 
such a deviation will serve the public interest.
    6. The Commission finds that Alaska's waiver request satisfies the 
above-stated conditions. First, Alaska has adequately demonstrated 
special circumstances. Alaska states that there are approximately 240 
communities in the state that lack local or toll-free dial-up access to 
the Internet. These communities are located in remote areas of the 
state that are isolated by severe terrain and a harsh climate. Most of 
these communities are sparsely populated (population under 250), and 
are reachable only by air or water. As a result, access to information 
services is minimal and generally cost-prohibitive. In fact, Alaska 
asserts that start-up costs for an Internet service provider in a 
village is often more than $20,000, in addition to the monthly cost for 
a satellite link. Of the communities without local or toll-free dial-up 
access to the Internet, 135 have available, non-usage sensitive 
Internet access at local schools or libraries. Given their extreme 
isolation and the lack of access to affordable Internet services, the 
Commission believes it is appropriate to allow rural remote areas in 
Alaska that lack local or toll-free dial up access to the Internet to 
utilize excess service obtained through the universal service mechanism 
under the limited circumstances described above.
    7. The Commission also concludes that granting Alaska's waiver will 
serve the public interest. The Commission believes that it is in the 
public interest to take steps to utilize the excess services obtained 
through the schools and libraries mechanism. Alaska explains that 
nearly 75 percent of rural Alaskan communities do not have Internet 
access via a local dial-up or toll-free connection. In many of these 
communities, however, schools and libraries have access to information 
services because of assistance from the schools and libraries 
mechanism. This waiver will serve the public interest by promoting 
access to available resources and allowing communities to make use of 
the excess service. The Commission finds that the waiver is also in the 
public interest because it is consistent with the Commission's efforts 
to encourage access to advanced telecommunications and information 
services.
    8. In addition, the Commission believes that each of the conditions 
imposed with this waiver promotes the public interest by reducing the 
likelihood of waste, fraud, and abuse, and guarding against additional 
costs from being imposed on the schools and libraries mechanism. These 
conditions are discussed separately below.
    9. The first condition limits application of the waiver to 
communities in Alaska where there is no local or toll-free dial-up 
Internet access. As noted above, many of these communities lack 
affordable access to the Internet due to their remote nature but also 
have available, non-usage sensitive connections to the Internet in 
their schools and libraries. The Commission believes that allowing 
these communities to access services obtained from the schools and 
libraries universal service mechanism will serve the public interest by 
reducing waste and making more efficient use of available resources.
    10. Under the second condition, eligible schools and libraries in 
Alaska are not permitted to request more services than are necessary 
for educational purposes. Alaska will protect against that possibility 
by instructing schools and libraries to maintain information 
documenting the necessity for additional services. This will reduce the 
likelihood of fraud and abuse by enabling the Schools and Libraries 
Division of the Universal Service Administrative Company to efficiently 
assess whether additional requests are associated with educational 
purposes. As noted above, this waiver only allows for the use of excess 
service that is incidental to services provided for educational 
purposes. If there are increases in requests not warranted by 
educational purposes, we believe that it will be appropriate to 
reassess the propriety of this waiver.

[[Page 67114]]

    11. The third condition limits the waiver to communities where the 
services used by the school are purchased on a non-usage sensitive 
basis. By limiting implementation of this waiver to communities that 
pay a flat, non-traffic sensitive rate for services, it reduces wasted 
resources and it protects against abuse by ensuring that the schools 
and libraries program does not incur additional costs based on the 
increased utilization. In addition, the Commission notes that any 
additional equipment related to the provision of Internet service to 
the community will not be eligible for support.
    12. The fourth condition limits local community usage to hours in 
which the school or library is not open. By limiting use for non-
educational purposes to non-operating hours for the schools and 
libraries, the Commission guards against abuse by eliminating the 
possibility that community usage may interfere with usage of services 
for educational purposes in schools and libraries. In accord with this 
condition, Alaska will include terms in agreements with ISPs 
restricting community usage to non-operating hours. Specifically, 
agreements will include an explicit statement that service is 
restricted to non-operating hours of the school or library and will 
designate normal operating hours, along with the anticipated school 
year calendar. The local Internet service provider will also be 
required to demonstrate the effectiveness of how it will restrict 
service to the designated hours.
    13. Pursuant to the fifth condition, excess services must be made 
available to all capable service providers in a neutral manner that 
does not require or take into account any commitments or promises from 
the service providers. This condition is consistent with the Act, which 
prohibits any discounted services or network capacity from ``being 
sold, resold, or transferred by such user in consideration for money or 
any other thing of value.'' We believe that this condition will ensure 
that excess services are not transferred in exchange for any benefit to 
the school, library, or surrounding community, whether the benefit is a 
promise of particular services, prices, or other thing of value. This 
condition will also protect against fraud, waste, and abuse by 
providing that all public, tribal, non-profit, and commercial entities 
will be treated equally. We note that there may be circumstances in 
which demand for the excess services by service providers is greater 
than the available excess services. In such instances, the school or 
library may determine priority based on a set of neutral criteria that 
is consistent with this condition, such as random selection, first-
come-first-served, or any other methodology that does not prioritize 
based on expectations of particular benefits to the institution or 
surrounding community. The Commission also notes that this condition in 
no way prohibits schools and libraries from establishing minimal 
technical requirements to protect the integrity of the institution's 
network, to ensure that selected providers are actually capable of 
providing service, or to ensure that selected providers are prepared to 
offer service.
    14. Therefore, because the Commission finds that this waiver is in 
the public interest and that Alaska has demonstrated special 
circumstances, we find good cause to grant Alaska's waiver request 
subject to the provided conditions. The Commission is confident that 
this waiver will ensure that appropriate steps will be made to ensure 
the integrity of the schools and libraries universal service mechanism.

III. Ordering Clause

    15. Pursuant to sections 1, 4(i), and 254 of the Communications Act 
of 1934, as amended, 47 U.S.C. 151, 154(i), and 254 and 1.3 and 1.925 
of the Commission's rules 47 CFR 1.3 and 1.925, the waiver request 
filed by the State of Alaska on January 29, 2001, is granted, subject 
to the conditions indicated herein.

    Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 01-31868 Filed 12-27-01; 8:45 am]
BILLING CODE 6712-01-P