[Federal Register Volume 68, Number 136 (Wednesday, July 16, 2003)]
[Rules and Regulations]
[Pages 41936-41942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17567]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[CC Docket No. 96-45; FCC 03-115]


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; petitions for reconsideration.

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

SUMMARY: In this document, the Commission addresses the requests of 
several petitioners to reconsider portions of the Twelfth Report and 
Order and Further Notice of Proposed Rulemaking, adopting rules to 
provide additional, targeted universal service support to low-income 
consumers on tribal lands and establishing a framework for the 
resolution of eligible telecommunications carrier (ETC) designations. 
The Commission also concludes that the definition of ``reservation'' 
for purposes of the universal service programs remains the same as that 
adopted in the Twelfth Report and Order and Further Notice of Proposed 
Rulemaking. The Commission addresses several requests for 
reconsideration relating to the rule amendments to the universal 
service low-income programs adopted in the Twelfth Report and Order and 
Further Notice of Proposed Rulemaking. The Commission also clarifies, 
on its own motion, the Commission's rules regarding the qualification 
criteria for enhanced Lifeline and Link-Up service. In addition, the 
Commission declines to adopt a rule that would require resolution of 
the merits of any request for ETC designation within six months of the 
filing date. The Commission also declines to extend the enhanced low-
income programs to the Northern Mariana Islands.

DATES: Effective August 15, 2003.

FOR FURTHER INFORMATION CONTACT: Shannon Lipp, Attorney, 
Telecommunications Access Policy Division, Wireline Competition Bureau, 
(202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Twenty-Fifth Order on Reconsideration and Report and Order (Order) in 
CC Docket No. 96-45 released on May 21, 2003. This Order was also 
released with a companion Further Notice of Proposed Rulemaking. 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 address the requests of several petitioners to 
reconsider portions of the Twelfth Report and Order and Further Notice 
of Proposed Rulemaking, 65 FR 47941, August 4, 2003, adopting rules to 
provide additional, targeted universal service support to low-income 
consumers on tribal lands and establishing a framework for the 
resolution of Eligible Telecommunications Carrier (ETC) designations 
under section 214(e)(6) of the Communications Act of 1934, as amended 
(the Act). The advancement of universal service on tribal lands remains 
a major policy goal of this Commission. Through our on-going dialogue 
with the tribes, as most recently exemplified by the Commission's 
launch of the Indian Telecommunications Initiatives in Phoenix, Arizona 
on September 19, 2002, the Commission continues in its efforts to 
promote telecommunications subscribership within American Indian and 
Alaskan Native tribal communities.
    2. We affirm that the framework adopted by the Commission for 
resolution of ETC designations on tribal lands provides a reasonable 
means to facilitate the expeditious resolution of such requests, while 
balancing the respective federal, state, and tribal interests. We also 
conclude that the definition of ``reservation'' for purposes of the 
universal service programs remains the same as that adopted in the 
Twelfth Report and Order and Further Notice of Proposed Rulemaking 
despite the Bureau of Indian Affairs' (BIA) subsequent modification of 
that definition for purposes of its direct assistance programs. We 
address several requests for reconsideration relating to the rule 
amendments to the universal service low-income programs adopted in the 
Twelfth Report and Order and

[[Page 41937]]

Further Notice of Proposed Rulemaking. We also clarify, on our own 
motion, the Commission's rules regarding the qualification criteria for 
enhanced Lifeline and Link-Up service. In addition, we decline to adopt 
a rule that would require resolution of the merits of any request for 
ETC designation within six months of the filing date. We also decline 
to extend the enhanced low-income programs to the Northern Mariana 
Islands.

II. Order on Reconsideration

A. Petitions for Reconsideration

    3. In September 2000, petitions for reconsideration were filed in 
response to the Twelfth Report and Order and Further Notice of Proposed 
Rulemaking. Several petitioners request that the Commission reconsider 
the framework to resolve jurisdictional issues under section 214(e)(6) 
for carriers seeking ETC designation on tribal lands. Several 
petitioners also raise issues relating to the amendments to the 
universal service low-income programs adopted in the Twelfth Report and 
Order and Further Notice of Proposed Rulemaking.

B. Discussion

1. ETC Designation Framework for Carriers Serving Tribal Lands
    4. As discussed in greater detail, we deny petitions for 
reconsideration of the framework to resolve requests for ETC 
designations for carriers providing service on tribal lands. We affirm 
the Commission's prior conclusion that this framework facilitates the 
expeditious resolution of such requests, while balancing the relevant 
federal, state, and tribal interests in determining jurisdiction over 
carriers operating on tribal lands. In addition, we note that similar 
arguments were previously considered and rejected by the Commission in 
the Twelfth Report and Order and Further Notice of Proposed Rulemaking. 
We find no basis to now reconsider these issues.
    5. Consistent with the Commission's prior conclusion, we decline to 
adopt the suggestion of those petitioners contending that section 
214(e)(6) provides the Commission with the authority to assume 
jurisdiction over all carriers seeking ETC designation for service on 
tribal lands. These petitioners contend that any exercise of state 
jurisdiction in designating ETCs on tribal lands is inconsistent with 
the federal trust responsibility to tribes and the principle of tribal 
sovereignty. As the Commission concluded in the Twelfth Report and 
Order and Further Notice of Proposed Rulemaking, we do not believe that 
Congress intended the Commission to use section 214(e)(6) to usurp the 
role of a state commission that has jurisdiction over a carrier 
providing service on tribal lands. To the contrary, in adopting section 
214(e)(6), 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) was not ``intended to impact 
litigation regarding jurisdiction between State and federally-
recognized tribal entities.''
    6. We affirm that this framework is consistent with the federal 
trust responsibility to the tribes and the principle of tribal 
sovereignty. In establishing the framework for the designation of 
carriers serving tribal lands, the Commission was guided by the 
recognition of, and respect for, principles of tribal sovereignty and 
self-determination. The designation framework recognizes that the 
principles of tribal sovereignty may lead some carriers and tribes to 
be unwilling to submit jurisdictional questions relating to tribal 
lands to a state commission. The adopted framework therefore provides 
the opportunity for parties to submit this issue directly to the 
Commission for resolution. In addition, the availability of a federal 
forum allows carriers and tribes to avoid the potential costs and 
delays that would arise if they were required to first challenge the 
jurisdictional issue in state proceedings and judicial appeals prior to 
requesting designation from this Commission under section 214(e)(6).
    7. For the reasons discussed, we also decline to grant SDITC's 
request that the Commission require the relevant state commission to 
make the threshold determination as to whether it has jurisdiction over 
a carrier offering service on tribal lands. In addition, we note that 
nothing in the Commission's designation framework affects the ability 
of a carrier to seek designation from a state commission. The 
Commission's framework merely provides carriers with the option to seek 
resolution of the threshold jurisdictional issue on tribal lands from 
this Commission.
    8. We also decline to adopt Western Wireless' suggestion that the 
Commission establish a standard whereby the Commission assumes 
jurisdiction under section 214(e)(6) in those instances in which the 
requesting carrier has obtained an agreement with the tribe and 
proposes to offer universal service that is targeted to the tribal 
land. In so doing, we note the admonition of the United States Supreme 
Court that ``[g]eneralizations on this subject have become * * * 
treacherous.'' Although the existence of a consensual relationship 
between the tribe and carrier regarding the provision of 
telecommunications service to tribal lands may be a significant factor 
in the jurisdictional analysis, we do not believe that it is prudent or 
necessary to establish such a fixed presumption. A careful analysis of 
the specific agreement between the tribe and carrier is necessary to 
determine its relevance to the jurisdictional determination. As noted 
in the Twelfth Report and Order and Further Notice of Proposed 
Rulemaking, the issue of whether a state commission lacks jurisdiction 
over a carrier is a particularized inquiry guided in each case by the 
principles of tribal sovereignty, federal Indian law, and treaties, as 
well as state law. The framework established by the Commission allows 
for the careful balancing of the respective federal, state, and tribal 
interests, including an examination of the relationship between the 
carrier and tribe, to make this determination on a case-by-case basis. 
We therefore decline to adopt Western Wireless' proposal.
2. Definition of ``Tribal Lands''
    9. Consistent with the request of NTCA, we confirm that the 
Commission's definition of ``tribal lands'' for purposes of considering 
requests for ETC designation under section 214(e)(6) is identical to 
the definition of ``tribal lands'' utilized in the context of the 
enhanced Lifeline and Link-Up support programs. In the Twelfth Report 
and Order and Further Notice of Proposed Rulemaking, the Commission 
adopted a definition of ``tribal lands'' that included ``reservation'' 
and ``near reservation'' areas, as defined, at that time, in sections 
20.1(v) and (r) of the BIA regulations. Subsequently, the Commission 
became aware that the term ``near reservation'' included wide 
geographic areas, extending substantially beyond the boundaries of 
reservations, that do not possess the same characteristics that 
warranted the targeting of support to reservations. For example, areas 
such as Phoenix, Arizona and Sacramento, California are considered to 
be ``near reservation areas,'' even though they are not isolated and 
underserved. As a result, the Commission issued an order staying 
implementation of the enhanced Lifeline and Link-Up rules to the extent 
that they apply to qualifying low-income consumers located on ``near 
reservation'' areas.
    10. We agree with NTCA that the Commission's rationale for adopting 
a

[[Page 41938]]

separate designation framework for carriers seeking designation on 
tribal lands does not extend to ``near reservation'' areas, as defined 
by BIA. As defined by BIA, near reservations are designated areas or 
communities that are adjacent or contiguous to reservations where 
financial assistance and social service programs are provided. Because 
these areas often extend substantially beyond the exterior boundaries 
of reservations, we do not believe they invoke the same jurisdictional 
concerns and principles of tribal sovereignty associated with areas 
within the exterior boundaries of reservations. Therefore, pending 
resolution of the issues presented in the Tribal Stay Order, 65 FR 
58721, October 2, 2000, petitions for designation filed under section 
214(e)(6) relating to ``near reservation'' areas will not be considered 
as petitions relating to tribal lands. Petitioners seeking ETC 
designation in such areas must follow the procedures outlined in the 
Twelfth Report and Order for non-tribal lands prior to submitting a 
request for designation to this Commission under section 214(e)(6).
    11. We also take this opportunity to confirm that the definition of 
``reservation'' and ``near reservation'' for purposes of the universal 
service programs remains the same as that adopted in the Twelfth Report 
and Order and Further Notice of Proposed Rulemaking. Therefore, within 
the context of the universal service programs, 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.'' The term ``near reservation'' 
is defined as those areas or communities adjacent or contiguous to 
reservations which are designated by the Department of Interior's 
Commission of Indian Affairs upon recommendation of the local Bureau of 
Indian Affairs Superintendent, which recommendation shall be based upon 
consultation with the tribal governing body of those reservations, as 
locales appropriate for the extension of financial assistance and/or 
social services, on the basis of such general criteria as: (1) Number 
of Indian people native to the reservation residing in the area, (2) a 
written designation by the tribal governing body that members of their 
tribe and family members who are Indian residing in the area, are 
socially, culturally and economically affiliated with their tribe and 
reservation; (3) geographical proximity of the area to the reservation, 
and (4) administrative feasibility of providing an adequate level of 
services to the area.
    12. As noted, the Commission defined the term ``reservation'' in a 
manner consistent with section 20.1(v) of the BIA regulations and 
stated that any future BIA modifications to the definition of 
``reservation'' would also apply to the definitions adopted in the 
Twelfth Report and Order. Following the release of the Twelfth Report 
and Order and Further Notice of Proposed Rulemaking, BIA revised its 
definition of ``reservation'' in such a way as to no longer explicitly 
include ``former reservations in Oklahoma'' or ``Indian allotments.'' 
Residence in a ``service area,'' rather than a ``reservation,'' is the 
new geographic eligibility requirement to receive financial assistance. 
As defined by BIA, ``service area'' means a geographic area, designated 
by the Assistant Secretary of Indian Affairs, where financial 
assistance and social services programs are provided. Such a geographic 
area designation can include a reservation, near reservation, or other 
geographic location. Under this mechanism, tribes may also request 
alternative service area designations. As noted, BIA has also 
eliminated section 20.1(r) defining near reservations and replaced it 
with a similar definition now contained in section 20.100.
    13. To alleviate the potential for ongoing administrative 
uncertainty, we conclude that any future modifications to the 
definition of ``reservation'' or ``near reservation'' will take effect 
in the context of the universal service programs only upon specific 
action by the Commission. In so doing, we decline to incorporate BIA's 
recent revisions to the definition of ``reservation.'' Notwithstanding 
the fact that BIA modifications did not include ``former reservations 
in Oklahoma'' and Indian allotments in its definition of 
``reservation,'' BIA continues to provide financial assistance in these 
areas. Accordingly, we find that maintaining the current definition of 
``reservation'' for universal service purposes will be consistent with 
BIA's action in continuing to provide assistance in these areas, and 
with the Commission's commitment to increase subscribership and improve 
access to telecommunications services. We believe that this will ensure 
that the definition of ``reservation'' will remain consistent with the 
underlying goals of the Commission's enhanced Lifeline and Link-Up 
programs.
3. Universal Service Low-Income Programs
    14. SDITC Petition. We grant SDITC's request to reconsider the 
Commission's finding that non-wireline carriers are eligible to receive 
Link-Up support for that portion of a handset that receives wireless 
signals. Upon reconsideration, we conclude that Link-Up should not 
offset any costs of a wireless handset. The Commission's rules preclude 
Link-Up support for facilities or equipment that fall on the customer 
side of the demarcation point. Although the Commission has never 
defined a demarcation point for wireless service, it has generally 
treated wireless handsets for purposes of bundled marketing of 
equipment and services as Customer Premises Equipment (CPE), which is 
equipment that falls on the customer side of the demarcation point 
between customer and network facilities. At the same time, we recognize 
that some portion of a wireless handset may perform functions analogous 
to the functions on the network side of the demarcation point, which, 
in the wireline context, would be eligible for Link-Up support. 
Nevertheless, under all the circumstances, we find that Link-Up should 
not support any costs of a wireless handset. In reaching this decision, 
we consider the difficulty of defining what portion, if any, of a 
wireless handset is on the network side of the demarcation point, as 
well as the difficulty in isolating the costs of such portion. We note 
that we make this finding regarding wireless handsets solely for 
purposes of determining what charges are eligible for Link-Up 
discounts. We further note that non-wireline carriers remain eligible 
to receive Link-Up support for the ``customary charge for commencing 
telecommunications service,'' as defined in Sec.  54.411 of the 
Commission's rules, including wireless activation fees. Where wireless 
telecommunications service is provided to an eligible resident of 
tribal lands, such charges may also continue to include ``facilities-
based'' charges associated with the construction of facilities needed 
to initiate service, as provided in Sec.  54.411(a)(3).
    15. Florida Commission Petition. We deny the Florida Commission's 
requests for reconsideration. We disagree with the Florida Commission's 
contention that the expansion of the existing Lifeline program may be 
without clear statutory authority and without support in the record. As 
the Commission explained in the Twelfth Report and Order and Further 
Notice of Proposed

[[Page 41939]]

Rulemaking, the authority to provide additional federal Lifeline and 
Link-Up assistance and broaden consumer qualification criteria for low-
income consumers on tribal lands derives from sections 1, 4(i), 201, 
205, and section 254 of the Act. The Commission concluded that the 
unavailability or unaffordability of telecommunications service on 
tribal lands is at odds with its statutory goal of ensuring access to 
such services to ``[c]onsumers in all regions of the Nation, including 
low-income consumers.'' The Commission further concluded that the lack 
of access to affordable telecommunications services on tribal lands is 
inconsistent with its 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.'' The Commission also determined that its actions were 
consistent with its general authority to ``perform any and all acts, 
make such rules and regulations, and issue such orders, not 
inconsistent with this Act, as may be necessary in the execution of its 
functions.''
    16. In addition, the evidence and record before us at the time 
supported the expansion of the Lifeline and Link-Up program and nothing 
on reconsideration persuades us otherwise. In reaching the decision to 
enhance Lifeline and Link-Up assistance, the Commission relied on 
statistical evidence that demonstrated that American Indian and Alaska 
Native communities on average have the lowest reported telephone 
subscribership levels in the country. For example, the Commission noted 
that, according to the most recent census data, although approximately 
94 percent of all Americans have a telephone, only 47 percent of 
Indians on reservations and other tribal lands have a telephone. In 
addition to these statistics, other statistical evidence, as well as 
the majority of comments, demonstrated that low incomes and poverty are 
the key reasons for low subscribership levels on tribal lands. Along 
with these conditions, the record also identified other factors as 
impediments to subscribership. These included: (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. Finally, the record demonstrated 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. After careful consideration of this evidence, the 
Commission concluded that specific and immediate action was needed to 
remedy the disproportionately lower levels of infrastructure deployment 
and subscribership prevalent among tribal communities to ensure 
affordable access to telecommunications services in these areas.
    17. We also reject the Florida Commission's contention that the 
creation of a fourth tier of federal Lifeline support available to 
eligible telecommunications carriers serving qualifying low-income 
individuals living on tribal lands ``may raise issues of 
discrimination.'' Specifically, the Florida Commission ``questions 
whether there is any discriminatory impact by singling out Native 
American and Alaska tribal areas for the benefit of up to an additional 
$25.00 per primary residential line.'' The Florida Commission adds that 
``[i]f the goal is to increase subscribership for these populations, we 
respectfully request first increasing efforts to enroll qualified low-
income Native Americans and Alaskan Natives in the already existing 
Lifeline and Link-Up programs.''
    18. The goal of the Twelfth Report and Order and Further Notice of 
Proposed Rulemaking was not, as the Florida Commission implies, to 
increase subscribership solely among low-income Native American and 
Alaskan Natives. As explained, the Commission recognized that American 
Indian and Alaska Native communities, on average, have the lowest 
reported telephone subscribership levels in the country. In response, 
the Commission adopted amendments to its universal service rules to 
provide additional, targeted support under the low-income programs for 
all qualifying low-income individuals on tribal lands, as opposed to 
limiting these benefits solely to qualifying low-income tribal members 
on tribal lands. In addition, the Commission noted that its efforts in 
the Twelfth Report and Order and Further Notice of Proposed Rulemaking 
represent only the first step in addressing the causes of low 
subscribership within underserved and unserved areas. The Commission 
therefore continues to monitor the causes of low subscribership 
throughout the Nation and will be addressing this important issue on an 
ongoing basis. Accordingly, we do not find that our rules raise issues 
of discrimination.
4. Qualification Criteria for Enhanced Lifeline and Link-Up Service
    19. We also clarify, on our own motion, the Federal default 
qualification criteria for enhanced Lifeline and Link-Up service as set 
forth in Sec.  54.409(c) of the Commission's rules. As discussed, in 
the Twelfth Report and Order and Further Notice of Proposed Rulemaking, 
the Commission modified its universal service rules to increase access 
to telecommunications services among low-income individuals on tribal 
lands. In particular, the Commission created a fourth tier of federal 
Lifeline support to substantially reduce the cost of basic telephone 
service for such individuals. In addition, the Commission revised its 
rules governing the Link-Up program to provide increased federal 
support to reduce the costs of initial connection charges and line 
extension charges. Finally, the Commission broadened the federal 
default qualification criteria to enable low-income individuals living 
on tribal lands to qualify for this enhanced support by certifying 
their participation in certain additional means-tested assistance 
programs. We make this clarification to ensure that those otherwise 
eligible to participate in the enhanced programs will have the full 
opportunity to do so.
    20. We take this opportunity to clarify that a low-income 
individual living on tribal lands in a state that mandates state 
Lifeline support shall be eligible for Tiers One, Two, Three, and Four 
of federal Lifeline support if the consumer meets the eligibility 
criteria established by the state for such support. If the consumer 
does not meet the eligibility criteria established by the state for 
such support, or if the consumer lives in a state that does not mandate 
state Lifeline support, the consumer living on tribal lands may qualify 
for Tiers One, Two, and Four of federal Lifeline support if the 
consumer participates in at least one of the following nine programs: 
Bureau of Indian Affairs General Assistance, Tribally-Administered 
Temporary Assistance for Needy Families, Head Start (only those meeting 
its income qualifying standard), the National School Lunch Program's 
free lunch program, Medicaid, Food Stamps, Supplemental Security 
Income, Federal Public Housing Assistance (Section 8) or the Low-Income 
Home Energy Assistance Program. In addition, such consumer may still be 
eligible to receive Tier Three of federal Lifeline support, as 
described in Sec.  54.403(a)(3) of the Commission's rules, if the ETC

[[Page 41940]]

offering the Lifeline service provides carrier-matching funds. We 
strongly encourage eligible carriers to ensure that customer service 
representatives handling inquiries about the universal service low-
income programs, especially enhanced Lifeline and Link-Up, are trained 
with regard to the operative eligibility criteria as clarified in this 
Order. We also take this opportunity to reiterate that the Commission's 
rules require eligible 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.

III. Report and Order Addressing the Further Notice of Proposed 
Rulemaking in the Twelfth Report and Order

A. Discussion

    21. We decline to adopt a rule at this time that would require 
state commissions to resolve the merits of any request for designation 
under section 214(e) within six months or some shorter period. We 
conclude that such action is unnecessary at this time. In so doing, we 
note that a number of ETC designation requests pending at the time of 
release of the Twelfth Report and Order and Further Notice of Proposed 
Rulemaking have been resolved by state commissions. We commend these 
state commissions for resolving those designation requests. We continue 
to encourage state commissions to act with the appropriate analysis yet 
as expeditiously as possible on all such requests. In addition, we note 
that a state's action on ETC designation requests may be reviewed under 
section 253 as a potential barrier to entry. Although we continue to 
encourage states to address such requests in a timely manner, we find 
no need for further action at this time.
    22. In addition, we disagree with those commenters who suggest that 
the Commission should adopt a rule requiring resolution within six 
months of all ETC designations filed with the Commission, including 
requests for designation on tribal lands. In the Twelfth Report and 
Order and Further Notice of Proposed Rulemaking, the Commission 
committed to resolve the merits of any request for designation on 
tribal lands within six months of release of an order resolving the 
jurisdictional issue. We decline, however, to extend this commitment to 
resolution of the jurisdictional issues presented in tribal ETC 
designation proceedings. As the Commission noted in the Twelfth Report 
and Order and Further Notice of Proposed Rulemaking, the determination 
of whether a state commission lacks jurisdiction over a carrier 
providing service on tribal lands is a legally complex inquiry that may 
require additional time to fully address. The Commission also has 
specifically committed to resolving, within six months from the date 
filed, all designation requests for non-tribal lands that are properly 
before it pursuant to section 214(e)(6). The Commission has acted 
expeditiously on all ETC requests filed since the release of the 
Twelfth Report and Order and Further Notice of Proposed Rulemaking. We 
conclude, therefore, that no further measures beyond those adopted in 
the Twelfth Report and Order and Further Notice of Proposed Rulemaking 
are required at this time to expedite the resolution of ETC designation 
requests filed before this Commission.

IV. Order Addressing the Request of the Commonwealth of Northern 
Mariana Islands

A. Discussion

    23. We decline, at this time, to extend to the Northern Mariana 
Islands the same measures that were adopted to promote subscribership 
on tribal lands. The record is insufficient to establish that the 
Northern Mariana Islands has the same impediments to subscribership and 
infrastructure investment as tribal lands.
    24. The actions taken by the Commission in the Twelfth Report and 
Order and Further Notice of Proposed Rulemaking were designed to 
address impediments to subscribership and infrastructure investment on 
tribal lands, where high cost service and low subscribership are most 
egregious. The Commission identified a number of factors that are 
primary impediments to subscribership on tribal lands, including the 
cost of basic service, the cost of intrastate toll service, inadequate 
telecommunications infrastructure and the cost of line extensions, and 
the lack of competitive service providers offering alternative 
technologies. We find that CNMI has not provided any information that 
would allow us to identify the main impediments to subscribership on 
the Northern Mariana Islands (e.g., geographic isolation, limited local 
calling areas, cost of basic service). CNMI merely asserts that the 
Northern Mariana Islands has low telephone penetration rates, low 
income levels, and a trust relationship with the federal government 
that is similar to that of tribal communities. Given the lack of 
specific information in the record, we cannot conclude that the 
enhanced low-income programs established for tribal lands would be 
effective in addressing the causes of low subscribership rates on the 
Northern Mariana Islands.
    25. We note that the Commission specifically chose not to apply the 
actions taken in the Twelfth Report and Order and Further Notice of 
Proposed Rulemaking more generally to all high-cost areas and all 
insular areas, which would have included the Northern Mariana Islands. 
The Commission found that, although the record demonstrated that 
subscribership levels are below the national average in other low-
income, rural areas and in certain insular areas, it did not permit a 
determination that the factors causing low subscribership on tribal 
lands are the same factors causing low subscribership among other 
populations. We find that CNMI has not provided any evidence that would 
lead us to depart from this determination. Specifically, CNMI has not 
demonstrated that the Northern Mariana Islands has low penetration 
rates and low per capita incomes that are similar to those on tribal 
lands. Although CNMI provides 1995 data suggesting that telephone 
penetration rates and per capita incomes on the Northern Mariana 
Islands are below the national average, even these statistics exceed 
those that exist on tribal lands. In the Twelfth Report and Order and 
Further Notice of Proposed Rulemaking, the Commission noted that 
subscribership on reservations was approximately 47 percent and per 
capita incomes were only $4,478. By comparison, CNMI indicates that the 
subscribership rates in the Northern Mariana Islands is 61 percent and 
per capita income is $6,897. We therefore deny CNMI's request to extend 
to the Northern Mariana Islands the same measures adopted by the 
Commission to boost subscribership levels on tribal lands. As noted, 
however, the Commission continues to monitor the causes of low 
subscribership and develop appropriate measures to address these causes 
as necessary.

V. Procedural Matters

Supplemental Final Regulatory Flexibility Analysis

    26. As required by the Regulatory Flexibility Act (RFA), an Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated in the Tribal 
Stay Order and Further Notice of Proposed Rulemaking. The Commission 
sought written public comment on the proposals in the Further Notice of 
Proposed Rulemaking, including comment on the IRFA. In addition, a 
Final Regulatory Flexibility Analysis (FRFA) and IRFA were included in 
the Twelfth Report and Order and Further

[[Page 41941]]

Notice of Proposed Rulemaking. In compliance with the RFA, this present 
FRFA supplements the FRFA contained in the Twelfth Report and Order and 
Further Notice of Proposed Rulemaking to the extent that changes to 
that Order adopted here on reconsideration require changes in the 
conclusions reached in the FRFA.
1. Need for and Objectives of the Order
    27. The Commission issues this Order to ensure that enhanced 
Lifeline and Link-Up support is targeted to only the most underserved 
segments of our Nation. The Commission takes this action as 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 * * *.'' In this Order, we affirm that the framework adopted 
by the Commission for resolution of ETC designations on tribal lands 
provides a reasonable means to facilitate the expeditious resolution of 
such requests, while balancing the respective federal, state, and 
tribal interests. In addition, we conclude that the definition of 
``reservation'' for purposes of the universal service programs remains 
the same as that adopted in the Twelfth Report and Order and Further 
Notice of Proposed Rulemaking despite the Bureau of Indian Affairs' 
(BIA) subsequent modification of that definition for purposes of its 
direct assistance programs. We also clarify the Commission's rules 
regarding the qualification criteria for enhanced Lifeline and Link-Up 
service.
2. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA
    28. We received no comments directly in response to the IRFA in 
this proceeding. However, we reconsider our conclusion that Link-Up 
support should offset a portion of the costs of a wireless handset. 
Pending resolution of the issues presented in the Tribal Stay Order, we 
also conclude that carriers seeking designation as an ETC on ``near 
reservation'' areas must follow the procedures established for non-
tribal designations in the Twelfth Report and Order and Further Notice 
of Proposed Rulemaking.
3. Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply
    29. In the FRFA at paragraphs 162-178 of the Twelfth Report and 
Order and Further Notice of Proposed Rulemaking, we described and 
estimated the number of small entities that would be affected by the 
new universal service rules and amendments for low-income consumers 
residing on tribal lands. The rule amendments adopted herein apply to 
the same entities affected by the rules adopted in that order. We 
therefore incorporate by reference paragraphs 162-178 of the Twelfth 
Report and Order and Further Notice of Proposed Rulemaking.
4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    30. The actions taken herein will require carriers seeking 
designation as an ETC on near reservation areas to file such requests 
with the relevant state commission. Pending resolution of the issues 
presented in the Tribal Stay Order and Further Notice of Proposed 
Rulemaking, 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) designation 
requests from carriers serving near reservation areas.
5. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    31. In this Order, we confirm that the definition of 
``reservation'' for purposes of the universal service programs remains 
the same as that adopted in the Twelfth Report and Order and Further 
Notice of Proposed Rulemaking. This decision will not result in a 
significant economic impact on small entities. We also conclude that 
Link-Up support should not offset any costs of a wireless handset. 
Given that Link-Up support is a one-time reduction in the eligible 
consumer's connection charge, we do not believe that this decision will 
result in a significant economic impact on any small wireless entities.
6. Report to Congress
    32. The Commission will send a copy of this Order, including this 
FRFA, in a report to be sent to Congress pursuant to the Congressional 
Review Act, see 5 U.S.C. 801(a)(1)(A). In addition, the Commission will 
send a copy of the Order, including the 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).

VI. Ordering Clauses

    33. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1-4, 214(e), and 254 of the Communications Act of 
1934, as amended, and 254, and Sec.  1.429 of the Commission's rules, 
this Order on Reconsideration and Report and Order is adopted.
    34. It is further ordered that the captioned petitions for 
reconsideration of the Twelfth Report and Order and Further Notice of 
Proposed Rulemaking are denied, to the extent discussed herein.
    35. It is further ordered that the petition for reconsideration of 
the National Telephone Cooperative Association, filed on September 5, 
2000, is granted, to the extent discussed herein.
    36. It is further ordered that the petition for reconsideration of 
the South Dakota Independent Telephone Coalition, filed on September 5, 
2000, is granted in part and denied in part, to the extent discussed 
herein.
    37. It is further ordered that part 54 of the Commission's rules, 
is amended as set forth, effective August 15, 2003.
    38. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Order, including the Final Regulatory 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.
Ruth A. Dancey,
Special Assistant to the Secretary.

Final Rules

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority citations continue to read as follows:


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

0
2. Amend Sec.  54.400 by revising paragraph (e) and the note to 
paragraph (e) to read as follows:


Sec.  54.400  Terms and definitions.

* * * * *
    (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. A 
``reservation'' is defined as any federally recognized Indian tribe's 
reservation,

[[Page 41942]]

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'' is defined as those areas or communities adjacent or 
contiguous to reservations which are designated by the Department of 
Interior's Commission of Indian Affairs upon recommendation of the 
local Bureau of Indian Affairs Superintendent, which recommendation 
shall be based upon consultation with the tribal governing body of 
those reservations, as locales appropriate for the extension of 
financial assistance and/or social services, on the basis of such 
general criteria as: Number of Indian people native to the reservation 
residing in the area; a written designation by the tribal governing 
body that members of their tribe and family members who are Indian 
residing in the area, are socially, culturally and economically 
affiliated with their tribe and reservation; geographical proximity of 
the area to the reservation, and administrative feasibility of 
providing an adequate level of services to the area.


    Note to paragraph (e): The Commission stayed implementation of 
paragraph (e) as applied to qualifying low-income consumers living 
``near reservations'' on August 31, 2000 (15 FCC Rcd 17112).


0
3. Amend Sec.  54.409 by revising the third sentence of paragraph (a), 
and the first and third sentence of paragraph (c) to read as follows:


Sec.  54.409  Consumer qualification for Lifeline.

    (a) * * * A state containing geographic areas included in the 
definition of ``reservation'' and ``near reservation,'' as defined in 
Sec.  54.400(e), must ensure that its qualification criteria are 
reasonably designed to apply to low-income individuals living in such 
areas.
* * * * *
    (c) A consumer that lives on a reservation or near a reservation, 
but does not meet the qualifications for Lifeline specified in 
paragraphs (a) and (b) of this section, nonetheless shall be a 
``qualifying low-income consumer'' as defined in Sec.  54.400(a) and 
thus an ``eligible resident of Tribal lands'' as defined in Sec.  
54.400(e) and 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. * * * 
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 Sec.  54.400(e). * * *
[FR Doc. 03-17567 Filed 7-15-03; 8:45 am]
BILLING CODE 6712-01-P