[Federal Register Volume 70, Number 80 (Wednesday, April 27, 2005)]
[Notices]
[Pages 21779-21781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-8339]


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FEDERAL COMMUNICATIONS COMMISSION

[WC Docket Number 03-109; FCC 05-77]


Smith Bagley, Inc., Petition for Waiver of Section 54.400(e) of 
the Commission's Rules

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this document, the Commission grants the petition of Smith 
Bagley, Inc. (SBI) seeking a waiver of section 54.400(e) of the 
Commission's Lifeline and Link-Up eligibility rules to enable eligible 
residents of the Eastern Navajo Agency in the state of New Mexico to 
receive enhanced Lifeline and Link-Up support.

FOR FURTHER INFORMATION CONTACT: Mark Seifert, Assistant Chief, 
Wireline Competition Bureau, Telecommunications Access Policy Division, 
(202) 418-7400, TTY (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Memorandum Opinion and Order in WC Docket No. 03-109 released on March 
30, 2005. The full text of this document is available for public 
inspection during regular business hours in the FCC Reference Center, 
Room CY-A257, 445 12th Street, SW., Washington, DC 20554.

I. Introduction

    1. In this Order, we grant the petition of Smith Bagley, Inc. (SBI) 
seeking a waiver of Sec.  54.400(e) of the Commission's Lifeline and 
Link-Up eligibility rules to enable eligible residents of the Eastern 
Navajo Agency in the state of New Mexico to receive enhanced Lifeline 
and Link-Up support. We find that this waiver is in the public interest 
and warranted by the unique and compelling circumstances of low-income 
consumers residing in the Eastern Navajo Agency.

[[Page 21780]]

II. Discussion

    2. We grant SBI's request for waiver of Sec.  54.400(e) of the 
Commission's rules and find that SBI has demonstrated good cause to 
justify the waiver by demonstrating that special circumstances exist 
and because granting such a waiver, in this instance, is in the public 
interest.
    3. Generally, the Commission's rules may be waived for good cause 
shown. 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 deviation will serve the 
public interest.
    4. We find that SBI has identified special circumstances in the 
Eastern Navajo Agency that warrant a waiver of Sec.  54.400(e) of the 
Commission's rules. In the Twelfth Report and Order, 65 FR 47941, 
August 4, 2000, the Commission identified a number of factors that are 
primary impediments to subscribership on Tribal lands, including the 
lack of access to and/or affordability of telecommunications services, 
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. To address these impediments, the Commission 
adopted measures specifically targeted to increase subscribership and 
infrastructure development on Tribal lands, where unaffordable service 
and low subscribership are most prevalent. Our review of the record 
reveals that the Eastern Navajo Agency has the same impediments to 
subscribership and infrastructure development as those existing on 
Tribal lands.
    5. The Eastern Navajo Agency encompasses lands that do not fall 
within the Commission definition of a ``reservation'' for purposes of 
enhanced Lifeline and Link-Up support. Ninety-two percent of the 37,404 
persons living within its borders are Navajo Nation tribal members. 
Recent data published by the Census Bureau indicate that telephone 
penetration rates and per capita incomes in the Eastern Navajo Agency 
are far below the average existing throughout America. The telephone 
subscribership penetration rates for the United States are 
approximately 94% and per capita income is $21,587. Telephone 
penetration rates and per capita income in the Eastern Navajo Agency 
are far below the average existing on Tribal lands nationwide. Census 
data show that the average telephone penetration rate on Tribal lands 
is approximately 68% and per capita income is $12,452. By comparison, 
telephone penetration in the Eastern Navajo Agency is approximately 33% 
and per capita income is $6,979. Census data also show that nearly 45% 
of the 37,404 Eastern Navajo Agency residents subsist at or below the 
federal poverty level, compared to 23.5% of American Indian residents 
living on Tribal lands. In addition, data show that unemployment in the 
Eastern Navajo Agency stands at 25%, compared to 13.6% of American 
Indian residents on Tribal lands. Finally, approximately 52% of 
households rely on wood for heat and 46% of households lack plumbing. 
It is evident, therefore, that depressed economic conditions exist in 
the Eastern Navajo Agency. The Commission has previously determined 
that this is one of the primary causes of low subscribership levels.
    6. Other factors identified by the Commission as impediments to 
subscribership also exist in the Eastern Navajo Agency. In particular, 
the cost of basic telephone service, $13.50 per month, and the cost of 
intrastate toll service, $0.16 per minute, is high relative to the 
incomes of many families in the Eastern Navajo Agency. Moreover, sparse 
population and distances between existing plant and requesting 
customers in this area make extending wireline telephone facilities 
challenging, if not infeasible. In addition, depressed economic 
conditions of potential subscribers may not justify construction of 
telecommunications facilities because of the consumers' inability to 
pay for service. In fact, there are many areas within the Eastern 
Navajo Agency where no telephone service is available. SBI submits that 
it has been unable to identify another area in the United States of 
similar geographic size or population that suffers from these types of 
conditions.
    7. Based on the statistics discussed above and our review of the 
record, we conclude that specific action is needed to address the 
impediments to subscribership and infrastructure development in the 
Eastern Navajo Agency to ensure affordable access to telecommunications 
services for residents. Although the enhanced Lifeline and Link-Up 
program is limited to low-income consumers living on reservations, most 
of the factors that the Commission found relevant in establishing 
enhanced Lifeline and Link-Up support exist for the Eastern Navajo 
Agency. We therefore conclude that it is appropriate to waive Sec.  
54.400(e) of the Commission's rules and permit ETCs serving the Eastern 
Navajo Agency to offer Tier 4 Lifeline and Link-Up benefits to 
qualified residents.
    8. We find that granting SBI's Waiver Petition will serve the 
public interest by allowing SBI to provide service at rates that will 
likely increase the number of subscribers in the Eastern Navajo Agency 
who can afford basic telephone service. As illustrated in SBI's Waiver 
Petition, household telephone penetration in the other four Navajo 
Nation Agencies significantly increased as a result of ETCs having the 
ability to offer and advertise Tier 4 benefits. In fact, in three 
years, SBI added more than 27,000 new Tier 4-eligible subscribers in 
four other Navajo Nation Agencies. Based on the performance of the 
other four Navajo Agencies, SBI estimates that 20,000 households in the 
Eastern Navajo Agency will be able to initiate telephone service with 
the availability of Tier 4 support. This record persuades us that 
making enhanced Lifeline and Link-Up support available will eliminate 
or diminish the effect of unaffordability for individuals in the 
Eastern Navajo Agency who have never had telephone service and for 
individuals who cannot afford to maintain telephone service. 
Furthermore, making access to telecommunications services more 
affordable also serves the public interest because it enables these 
low-income consumers to have easier access to emergency, medical, 
government and other public services that they may need.
    9. The availability of enhanced federal support in the Eastern 
Navajo Agency will also make this area more attractive for carrier 
investment and deployment of telecommunications infrastructure. As the 
Commission stated in the Twelfth Report and Order, increasing the total 
number of individuals who are connected to the network within a tribal 
community enhances the value of the network in that community and 
results in greater incentives for ETCs to serve those areas. 
Specifically, as the number of potential subscribers grows, carriers 
may achieve greater economies of scale and scope when deploying 
facilities and providing service to those areas. In this way, granting 
this waiver serves the public interest because doing so furthers the 
Commission's goal of increasing the deployment of telecommunications 
facilities in unserved and underserved

[[Page 21781]]

regions of the Nation, especially among Native American populations. We 
emphasize that the action we take here does not affect state 
sovereignty or impinge upon a state's ability to establish universal 
service programs aimed at increasing telephone subscribership within 
its borders.
    10. Verizon opposes a waiver of Sec.  54.400(e) until such time as 
the Commission determines how the term ``near reservation'' should be 
defined. As noted above, however, Smith Bagley no longer requests the 
Commission to designate the Eastern Navajo Agency as ``near 
reservation'' land. Because we do not grant this waiver on the basis of 
defining ``near reservation,'' we reject Verizon's argument.
    11. Further, we are not persuaded by Verizon's argument that SBI's 
Waiver Petition should be denied because states are in a better 
position to address pockets of low subscribership in non-reservation 
areas within their respective state. We agree that, in most instances, 
it is more appropriate for states to implement Lifeline and Link-Up 
programs designed for the specific needs of their state. Nothing in 
this order is intended to prevent state action in this regard. Indeed, 
the state of New Mexico is free to adopt measures to eradicate pockets 
of low subscribership within its borders. We emphasize that, at the 
present time, 67% of occupied housing units in the Eastern Navajo 
Agency do not have telephone service. As we stated in the Twelfth 
Report and Order, ``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.'' Although 
the Eastern Navajo Agency is not entirely comprised of Tribal lands 
under the Commission's definition, the area is almost exclusively 
populated by Native Americans that suffer from the same conditions 
present on other federally-recognized Tribal lands. The availability of 
Tier 4 support program will provide immediate and vital benefits to 
low-income consumers in the Eastern Navajo Agency, consistent with the 
Commission's goal of enhancing telecommunications access among 
consumers on Tribal lands and its responsibility to ensure a standard 
of livability for members of Indian tribes.

III. Ordering Clause

    12. Pursuant to authority contained in sections 1, 4, and 254 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 254, 
and the authority under Sec.  1.3 of the Commission's rules, 47 CFR 
1.3, the Waiver Petition filed by Smith Bagley, Inc., on November 15, 
2004, is granted.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 05-8339 Filed 4-26-05; 8:45 am]
BILLING CODE 6712-01-P