[Federal Register Volume 75, Number 218 (Friday, November 12, 2010)]
[Proposed Rules]
[Pages 69374-69395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28535]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 0, 1, and 54
[WT Docket No. 10-208; FCC 10-182]
Supplement to Universal Service Reform Mobility Fund
AGENCY: Federal Communications Commission.
ACTION: Supplemental notice of proposed rulemaking.
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SUMMARY: This document is a supplement to the Universal Service Reform
Mobility Fund, published November 1, 2010. In this document, the
Federal Communication Commission proposes the creation of a new
Mobility Fund to make available one-time support to significantly
improve coverage of current-generation
[[Page 69375]]
or better mobile voice and Internet service for consumers in areas
where such coverage is currently missing. The Commission seeks comment
on creating the Mobility Fund using reserves accumulated in the
Universal Service Fund and on the use of a reverse auction to make one-
time support available to service providers to cost-effectively extend
mobile coverage in specified unserved areas.
DATES: Comments are due on or before December 16, 2010; and reply
comments are due on or before January 18, 2011.
ADDRESSES: You may submit comments, identified by WT Docket No. 10-208,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. Filings can be sent by
hand or messenger delivery, by commercial overnight courier, or by
first-class or overnight U.S. Postal Service mail. All filings must be
addressed to the Commission's Secretary, Office of the Secretary,
Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand
deliveries must be held together with rubber bands or fasteners. Any
envelopes must be disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or telephone: 202-
418-0530 or TTY: 202-418-0432.
In addition to filing comments with the Secretary, a copy
of any PRA comments on the proposed collection requirements contained
herein should be submitted to the Federal Communications Commission via
e-mail to [email protected] and to Nicholas A. Fraser, Office of Management
and Budget, via e-mail to [email protected] or fax at 202-395-5167.
FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,
Auctions and Spectrum Access Division: Scott Mackoul at (202) 418-0660.
For additional information concerning the information collection
requirements contained in this document, send and e-mail to [email protected]
or contact Judith B. Herman at 202-418-0214.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Mobility Fund Notice of Proposed Rulemaking in WT Docket No. 10-208,
adopted October 14, 2010, and released on October 14, 2010. The
complete text of the Mobility Fund Notice of Proposed Rulemaking is
available for public inspection and copying from 8 a.m. to 4:30 p.m. ET
Monday through Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays in
the FCC Reference Information Center, 445 12th Street, SW., Room CY-
A257, Washington, DC 20554. The Mobility Fund Notice of Proposed
Rulemaking may be purchased from the Commission's duplicating
contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street, SW.,
Room CY-B402, Washington, DC 20554, telephone 202-488-5300, fax 202-
488-5563, or you may contact BCPI at its Web site: http://www.BCPIWEB.com. When ordering documents from BCPI, please provide the
appropriate FCC document number, for example, FCC 10-182. The Mobility
Fund Notice of Proposed Rulemaking is also available on the Internet at
the Commission's Web site or by using the search function for WT Docket
No. 10-208 on the ECFS web page at http://www.fcc.gov/cgb/ecfs/.
Initial Paperwork Reduction Act of 1995 Analysis
This document contains proposed information collection
requirements. The Commission, as part of its continuing effort to
reduce paperwork burdens, invites the general public and the Office of
Management and Budget to comment on the information collection
requirements contained in the document, as required by the Paperwork
Reduction Act of 1995, Public Law 104-13. Comments should address: (a)
Whether the proposed collection of information is necessary for the
proper performance of the functions of the Commission, including
whether the information shall have practical utility; (b) the accuracy
of the Commission's burden estimates; (c) ways to enhance the quality,
utility and clarity of the information collected, and (d) ways to
minimize the burden of the collection of information on the
respondents, including the use of automated collection techniques or
other forms of information technology. In addition, pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198, 44
U.S.C. 3506(c)(4), the Commission seeks specific comment on how the
Commission might further reduce the information collection burden for
small business concerns with fewer than 25 employees.
I. Notice of Proposed Rulemaking
A. Introduction
1. Millions of Americans live in communities where current-
generation mobile service is unavailable, and millions more work in or
travel through such areas. To accelerate the Commission's nation's
ongoing effort to close this mobility gap in a fiscally responsible
manner, the Mobility Fund Notice of Proposed Rulemaking seeks comment
on using reserves accumulated in the Universal Service Fund (USF) to
create a new Mobility Fund. The purpose of the Mobility Fund is to
significantly improve coverage of current-generation or better mobile
voice and Internet service for consumers in areas where such coverage
is currently missing, and to do so by supporting private investment.
The Mobility Fund would use market mechanisms--specifically, a reverse
auction--to make one-time support available to service providers to
cost-effectively extend mobile coverage in specified unserved areas.
2. In the three decades since the Commission issued the first
cellular telephone licenses, the wireless industry has continually
expanded and upgraded its networks to the point where third generation
(called advanced or 3G) mobile wireless services are now widely
available. Despite these advances, mobility gaps remain a problem for
residents, public safety first responders, businesses, public
institutions, and travelers, particularly in rural areas. Such gaps
impose significant disadvantages on those who live, work, and travel in
these areas. Moreover, without existing modern wireless infrastructure,
they are at risk of much-delayed access to the coming generations of
high-speed wireless broadband services. For this reason, the National
Broadband Plan recommended providing universal service support to
promote the national build-out of 3G services as part of a
comprehensive set of recommendations to reform the universal service
program. See Federal Communications Commission, Connecting America: The
National Broadband Plan, 146-48 (rel. Mar. 16, 2010) (National
Broadband Plan). The proposals in the Mobility Fund Notice of
[[Page 69376]]
Proposed Rulemaking build on that recommendation. In the Mobility Fund
Notice of Proposed Rulemaking, the Commission uses ``current
generation,'' ``3G,'' and ``advanced'' interchangeably to refer to
mobile wireless services that include voice telecommunications service
as well as e-mail and Internet access.
3. The Commission recently undertook steps for fiscally responsible
USF reform when, in the Corr Wireless Order, the Commission provided
instructions for implementing the commitments of both Verizon Wireless
and Sprint Nextel to surrender their high-cost universal service
support over five years. High-Cost Universal Service Support, Federal-
State Joint Board on Universal Service, Request for Review of Decision
of Universal Service Administrator by Corr Wireless Communications,
LLC, WC Docket No. 05-337, CC Docket No. 96-45, Order and Notice of
Proposed Rulemaking, FCC 10-155 (rel. Aug. 31, 2010) (Corr Wireless
Order). The Commission directed that the surrendered support be
reserved as a potential down payment on proposed broadband universal
service reforms as recommended by the National Broadband Plan,
including creation of a Mobility Fund to provide wireless broadband
service in areas that lack coverage. Thus, the Mobility Fund considered
in the Mobility Fund Notice of Proposed Rulemaking is one of a set of
initiatives to promote deployment of broadband and mobile services in
the United States through a financially sensible transformation of USF,
using market-based and incentive mechanisms.
B. Background
4. The National Broadband Plan recommended a Mobility Fund in
connection with broader reforms of the USF. The plan recommended
providing targeted, one-time support for deployment of 3G
infrastructure in order to bring all states to a minimum level of
mobile service availability, without increasing the size of the USF.
The National Broadband Plan observed that supporting 3G build-out in
states with 3G coverage lagging the national average would enable those
states to catch up with the rest of the nation and improve the business
case for 4G rollout in harder-to-serve areas.
C. Overall Design of the Mobility Fund
5. Drawing on some of the USF support voluntarily relinquished by
Verizon Wireless and Sprint Nextel and reserved by the Commission, the
Mobility Fund would make available non-recurring support to providers
to deploy 3G or better networks where these services are not currently
available. In order to maximize the reach of available funds, the
Commission proposes to provide Mobility Fund support to at most one
provider in any given unserved area. The Commission proposes to utilize
a reverse auction mechanism to compare all offers to provide service
across the unserved areas eligible for participation in the Mobility
Fund program, which should give providers incentives to seek the least
support needed and enable identification of the providers that will
achieve the greatest additional coverage with the limited funding
available. The Commission proposes to specify unserved areas eligible
for support on a census block basis, using industry data compiled by
American Roamer, and to conduct competitive bidding to offer support in
unserved census blocks grouped by census tracts. The Commission noted
that, because American Roamer reports advertised coverage as reported
by many carriers who all use different definitions of coverage, the
data from American Roamer may overstate the coverage actually
experienced by consumers.
6. The Commission also seeks comment in the Mobility Fund Notice of
Proposed Rulemaking on a number of alternative methods the Commission
could use to distribute Mobility Fund support, including distributing
support to any of the identified census tracts nationwide or targeting
it to those identified census tracts in any county nationwide or in
states where 3G deployment most significantly lags behind the
percentage of nationwide population with 3G access. The Commission
proposes to support only wireless networks performing as well as or
better than 3G networks currently operating in the United States, for
example networks using HSPA or EV-DO. The Commission proposes that
parties receiving support be required to demonstrate the deployment and
offering of service in previously uncovered areas within a specified
period of time. The Commission seeks comment on ways to structure the
program so that it directs funding to those places where deployment of
advanced mobile wireless service is otherwise not likely to happen.
1. Legal Authority
7. The Commission proposes to distribute Mobility Fund support
through the universal service program. Accordingly, the Commission's
legal authority to create the Mobility Fund is based upon and delimited
by its legal authority to distribute universal service funds. The
Commission has authority to use universal service funds to support an
evolving level of telecommunications services, taking into account
advances in telecommunications and information technologies and
services. See 47 U.S.C. 254(c). In addition, various statutory and
regulatory requirements apply to the use of these funds. See 47 U.S.C.
214, 254; 47 CFR 54.101. The Commission requests comment on its
authority to implement the proposals contained in the Mobility Fund
Notice of Proposed Rulemaking. The Commission also seeks comment on
whether these proposals require any revisions to its existing
regulations or to its existing authority. The Commission further asks
that commenters address, to whatever extent necessary, whether any
alternative proposals that they suggest are within its current legal
authority or require any expansion of that authority.
2. Size of the Mobility Fund
8. The Commission proposes to use $100 million to $300 million in
USF high-cost universal service support to fund, on a one-time basis,
the expansion of current-generation mobile wireless services through a
new Mobility Fund. Prior voluntary agreements by Verizon Wireless and
Sprint Nextel to surrender USF high-cost support will likely make
several hundred million dollars available annually that can be used for
other USF purposes without increasing the overall size of the high-cost
fund. The National Broadband Plan recommended using these foregone
funds to implement its recommendations, including the creation of the
Mobility Fund, and subsequently the Commission adopted the Corr
Wireless Order implementing the voluntary commitments.
9. The ultimate impact of any amount of support would depend upon a
variety of factors, including the extent to which non-recurring funding
makes it possible to offer service profitably in areas previously
uneconomic to serve, what percentage of the support must fund new
facilities as opposed to upgrades to pre-existing facilities, the
percentage of total capital costs that support must provide, and the
extent to which new customers adopt services newly made available. The
Commission seeks comment on the level of support to be provided through
the Mobility Fund. Specifically, the Commission asks commenters to
consider whether there is an optimal size for the Mobility Fund. For
instance, is there an amount that would exceed what is needed to target
those areas where non-recurring support could be used most effectively
to expand coverage within a relatively
[[Page 69377]]
short timeframe? What amount would be too small to effectively jump-
start deployment so as to provide service in the places where it might
not otherwise become available?
3. One Provider Per Area
10. Given the Commission's objective of using the Mobility Fund to
support the provision of expanded advanced mobile wireless services to
as much of the currently unserved population in identified areas as
possible, the Commission proposes that only one entity in a given
geographic area receive Mobility Fund support. The Commission
recognizes that mobile wireless providers have expressed competitive
concerns, especially given that 3G services may use either CDMA or GSM
technology, about the possibility of limiting support to one provider.
In light of these concerns, the Commission proposes certain terms and
conditions of support to encourage possibilities for competition. The
Commission seeks comment on its proposal to make Mobility Fund support
available to only one provider per area.
4. Auction To Determine Awards of Support
11. The Commission proposes to use a competitive bidding mechanism
to determine the entities that will receive support under the Mobility
Fund and the amount of support they will receive--that is, the
Commission proposes to award support based on the lowest bid amounts
submitted in a reverse auction. Such a mechanism should allow the
market to reveal the costs of providing expanded access to advanced
mobile services in unserved areas. This should allow the Commission to
select the providers that require the least support without requiring
onerous cost showings by applicants and without guaranteeing that
support payments will cover all, or any specific percentage of, the
providers' actual costs.
12. In this reverse auction, which the Commission proposes to
conduct using a single round of bidding, applicants formulating their
bids would have to evaluate carefully the amount of support they need
to provide the required services. In general, bidders would not want to
overstate the support they require since they would be competing
against other providers for limited support funds and a higher bid
would reduce their chances of winning. At the same time, they would not
want to understate the support they require, since they might be
awarded such support based on a bid amount that does not cover their
costs and then be expected to provide services to meet the performance
requirements. As a result, the submitted bids should present a good
estimate of the actual costs to the bidders of providing advanced
mobile services in the areas on which they bid to expand service. The
Commission seeks comment generally on the use of a competitive bidding
mechanism to determine recipients of Mobility Fund support and support
amounts, and particularly, on the use of a single round reverse auction
format.
13. More specifically, the Commission proposes to determine winning
bidders for Mobility Fund support based on the lowest per-unit bids,
using the population of unserved areas (and perhaps other
characteristics, such as road miles) as units and taking into account
the requirement that there be no more than one Mobility Fund recipient
in any particular area. The auction mechanism would compare all per-
unit bids across all areas (that is, compare all bids against all other
bids, rather than compare all bids for a single area), and order all
the submitted bids from lowest per-unit amount to highest. The bidder
making the lowest per-unit bid would first be assigned support in an
amount equal to the amount needed to cover the population (or units
based on other characteristics) deemed unserved in the specific area at
the per-unit rate that was bid. For example, if the lowest per-unit bid
were $100 per person, the bidder placing that bid would be awarded
support in the amount of $100 times the population of the area on which
it bid. Support would continue to be assigned to the bidders with the
next lowest per-unit bids in turn, as long as support had not already
been assigned for that geographic area, until the running sum of
support funds requested by the winning bidders was such that no further
winning bids could be financed by the money available in the Mobility
Fund.
14. By awarding support to those bidders that are able to cover
units in unserved areas at the least cost to the Mobility Fund, the
greatest amount of population in the identified unserved areas can be
covered with the available funds. The Commission seeks comment on this
method of determining recipients of Mobility Fund support. The
Commission also seeks comment on determining payment amounts as
proposed--by multiplying the winning per-unit bid amounts by the units
deemed unserved.
5. Identifying Unserved Areas Eligible for Support
15. The Commission proposes to identify unserved areas on a census
block basis and, because individual census blocks are so small, the
Commission proposes to conduct bidding to offer Mobility Fund support
in unserved census blocks grouped by census tracts. The Commission
further seeks comment on alternative ways to distribute support to
these unserved areas.
a. Identifying Unserved Areas by Census Block
16. As a first step in identifying those areas for which applicants
can bid for Mobility Fund support, the Commission proposes to determine
the availability of service at the census block level, using a widely
available dataset. Census blocks are the smallest geographic unit for
which the Census Bureau collects and tabulates decennial census data,
so determining coverage by census block should provide a detailed
picture of the availability of 3G mobile services. By the end of the
first quarter of 2011, census data from the 2010 decennial census
should be available on a census block level. The Commission proposes to
use that data when it becomes available and seeks comment on the
proposal. Until that data becomes available, the Commission will use in
its discussion the projected census block data from Geolytics Block
Estimates and Block Estimates Professional databases (2009).
17. Specifically, the Commission proposes to use American Roamer
data identifying the geographic coverage of networks using EV-DO, EV-DO
Rev A, and UMTS/HSPA as a measure of availability of current-generation
mobile wireless services. For each census block, the Commission would
observe whether the data indicates that the geometric center of the
block--referred to as the centroid--is covered by such mobile wireless
services. If the data indicates that the centroid is not covered by
such services, the Commission proposes to consider that census block as
unserved. Alternatively, the Commission could use the data to obtain
the geographic proportion of the block that is uncovered--the
proportional method. The Commission could then consider unserved any
census block where the data indicates that more than 50 percent of the
area is unserved. Or, the Commission could consider unserved that
fraction of the census block's population (or other units).
18. The Commission seeks comment on its proposed use of American
Roamer data to determine areas unserved by current-generation mobile
wireless services. Are there distinctions in the way carriers report
coverage to American Roamer that the Commission
[[Page 69378]]
should consider when using the data? Are there alternative available
datasets the Commission can use instead of, or in addition to, American
Roamer data that would be more reliable or better suited for
identifying unserved areas? The Commission seeks comment also on the
proposed centroid method of determining unserved census blocks and on
the proportional coverage alternative. Is the centroid method likely to
identify areas that are good candidates for support consistent with the
objectives of the Mobility Fund? Are there other transparent and
workable methods for using the available data to define unserved areas?
In addition, the Commission seeks comment on the extent to which the
availability in unserved census blocks of other supported services
using non-mobile wireless technologies should be a factor in
determining whether those census blocks should be eligible for Mobility
Fund support.
19. The Commission recognizes that data on mobile services coverage
may change over a relatively short timeframe. Therefore, the Commission
proposes to delegate to the Wireless Telecommunications Bureau
(Wireless Bureau) the authority to identify unserved census blocks
prior to announcing a Mobility Fund auction, using the method the
Commission adopts and the most recent data available for that purpose.
b. Offering Support by Census Tract
20. While proposing to identify unserved areas at the census block
level, the Commission proposes to group unserved census blocks by
larger areas--census tracts--as a basis for competitive bidding, since
individual census blocks may be too small to serve as a viable basis
for providing support. More specifically, the Commission proposes to
accept bids for support to expand coverage to all the unserved census
blocks within a particular census tract.
21. The Commission seeks comment on whether census tracts are the
most appropriate basic geographic unit for providing support to expand
coverage. Are there other geographic units by which the Commission
might group unserved census blocks that might better balance the need
to identify discrete unserved areas for which the Commission proposes
to require coverage under the Mobility Fund with business plan
requirements of wireless providers?
c. Establishing Unserved Units
22. The Commission proposes at a minimum to establish the number of
units in each unserved census block based on population. The Commission
also seeks comment on whether it should take into account
characteristics such as road miles, traffic density, and/or community
anchor institutions in determining the number of units in each unserved
census block to be used for assigning support under the Mobility Fund.
For example, should the Commission utilize data compiled by the
Department of Transportation (such as Traffic Analysis Zones) or data
on community anchor institutions to establish the number of units in
the census block that will be considered unserved? A traffic analysis
zone (TAZ) is a special area delineated by state and/or local
transportation officials for tabulating traffic-related data,
especially journey-to-work and place-of-work statistics. Using such
additional factors in determining the units in each unserved area may
better represent the public benefits of providing new access to mobile
services. Are there other factors that the Commission should take into
account when assessing coverage of unserved areas, such as work or
recreation sites; anchor institutions such as schools, libraries, and
hospitals; or accessibility to a road system? The Commission asks that
commenters address how it should measure the factors on which it seeks
comment as well as any other factors they advocate, and how coverage
for one type of unit, such as a work site, should compare with coverage
for other units, such as resident population, or whether such
comparisons would be appropriate.
d. Distributing Mobility Fund Support Among Unserved Areas
23. The National Broadband Plan recommended creation of a Mobility
Fund as a means of bringing all states to a minimum level of 3G (or
better) mobile service availability. Here, the Commission seeks comment
on various methods it could use to distribute Mobility Fund support
among unserved areas, including ways to target support to places that
significantly lag behind the level of 3G coverage generally available
nationwide.
24. The Commission could make eligible for Mobility Fund support
any area nationwide that the Commission deems to be unserved, including
territories. Thus, the Commission seeks comment on whether, if it were
to adopt its proposal for identifying census tracts with at least one
unserved census block, the Commission should make available for bids
all such identified census tracts across the country.
25. The Commission also seeks comment on alternative ways of
limiting Mobility Fund support to places that lag significantly behind
the level of 3G coverage nationwide. Based on May 2010 American Roamer
data and November 2009 population estimates, 98.5 percent of the
population nationwide resides in areas with access to 3G services. The
Commission notes that, as proposed, it would be using updated coverage
and population data to determine areas unserved by 3G prior to any
Mobility Fund auction, so it is possible that the level of nationwide
coverage could change. Therefore, the Commission seeks comment on
various ways to identify places that lag significantly behind that
level of coverage based on more updated data.
26. For instance, the Commission seeks comment on making Mobility
Fund support available for unserved census blocks in census tracts in
any county nationwide where the countywide percentage of population
with access to 3G services is more than three percentage points below
the level of 3G deployment nationwide, as determined prior to an
auction based on updated data. The Commission also seeks comment on
targeting Mobility Fund support to unserved blocks in census tracts in
those states where the statewide percentage of population with access
to 3G services is more than three percentage points less than the
percentage of the national population with such access. Alternatively,
the Commission seeks comment on whether the it should target an
expanded list of counties or states, for example, those with 3G
coverage levels that are more than two percentage points below the
nationwide level. The Commission also invites suggestions of other
means for identifying the counties or states that the Mobility Fund
should target.
27. The Commission invites comment on all of the alternatives--
distributing support among unserved areas nationwide and various
methods for targeting support to a subset of unserved areas. The
Commission seeks comment on the relative merits and drawbacks of these
alternative approaches. In particular, the Commission welcomes any
insights commenters can provide regarding which of these alternatives
would most effectively utilize Mobility Fund support to benefit
consumers through expanded 3G coverage. The Commission also seeks
commenters' views on which of these ways of distributing Mobility Fund
support would best help ensure that places with the lowest levels of 3G
coverage will not fall even farther behind as the industry begins to
deploy the next generation of 4G mobile broadband service. Finally, the
Commission notes that some areas
[[Page 69379]]
that it identifies as lacking 3G coverage will have some level of
mobile voice service, while other identified areas will have no mobile
wireless service at all. The Commission seeks comment on whether and
how the Commission might prioritize support toward unserved areas that
currently lack any mobile wireless service.
e. Targeting Tribal Areas
28. The Commission seeks comment on whether the Commission should
reserve funds for developing a Mobility Fund support program targeted
separately to Tribal lands that trail national 3G coverage rates. For
these purposes, Tribal lands are defined as any federally recognized
Indian tribes reservation, pueblo or colony, including former
reservations in Oklahoma, Alaska Native regions established pursuant to
the Alaska Native Claims Settlements Act (85 Stat. 688), and Indian
Allotments. 47 CFR 54.400(e). Communities on Tribal lands have
historically had less access to telecommunications services than any
other segment of the population. Available data illustrates that less
than ten percent of residents on Tribal lands have access to broadband.
Also, Tribal lands are often in rural, high-cost areas, and present
distinct connectivity challenges. The National Broadband Plan observed
that many Tribal communities face significant obstacles to the
deployment of broadband infrastructure, including high build-out costs,
limited financial resources that deter investment by commercial
providers and a shortage of technically trained members who can
undertake deployment and adoption planning. As a result, the National
Broadband Plan noted that Tribes need substantially greater financial
support than is presently available to them, and accelerating Tribal
broadband will require increased funding. The Commission has recognized
that Tribes are inherently sovereign governments that enjoy a unique
relationship with the federal government. In turn, the Commission has
reaffirmed its policy to promote a government-to-government
relationship between the FCC and federally-recognized Indian tribes.
Because this relationship warrants a tailored approach that takes into
consideration the unique characteristics of Tribal lands, the
Commission believes addressing Mobility Fund support for Tribal lands
on a separate track will be beneficial in providing adequate time to
coordinate with American Indian Tribes and Alaska Native Village
governments and seeks their input.
6. Performance Requirements
a. Coverage Requirement
29. The Commission proposes to establish a coverage requirement
that will ensure that Mobility Fund support is put to the purpose for
which it is intended--to expand coverage in unserved areas. The
Commission seeks comment on the percentage of resident population in
the census blocks deemed unserved the Commission should require be
covered by any party receiving support for a particular census tract.
Should the Commission require 100 percent coverage? Or would it be
appropriate to require a level of coverage of between 95 and 100
percent of the resident population of census blocks deemed unserved in
order to balance its goal of expanding service with concern that
excessively high costs to serve a few residents in an area might deter
providers from bidding to cover areas otherwise well suited for
Mobility Fund support? The Commission notes that should it decide to
require less than 100 percent coverage, recipients would receive
support based on the percentage of coverage actually achieved, provided
that they cover at least the required percentage.
30. Is a performance requirement appropriate, given the
Commission's proposed method of determining unserved areas, its
proposed use of per-unit bids to determine the set of winning bidders,
and its proposal that the Commission will determine support amounts
based on the units deemed unserved in the census blocks within the
tract? The Commission asks commenters to consider how it should monitor
compliance with any coverage requirement, and to address the ways in
which monitoring may create incentives for support recipients to
further the goals of the Mobility Fund program. The Commission invites
commenters describing any alternatives to its proposal to explain with
specificity why such alternatives would be preferable. To ensure that
the Mobility Fund supports service where it is actually needed, should
the Commission require winning bidders to actively market their service
in the area(s) for which they bid, and/or to provide service to a
specified number or percentage of consumers in such areas by certain
milestone dates?
31. The Commission also makes proposals to encourage possibilities
for competition in the market for 3G or better services in the
geographic areas in which it provides support. First, the Commission
proposes that any new tower constructed to satisfy Mobility Fund
performance obligations provide the opportunity for collocation. The
Commission seeks comment on this proposal. Should the Commission
require any minimum number of spaces for collocation on any new towers
and/or specify terms for collocation? In addition, the Commission
proposes that the use of Mobility Fund support be conditioned on
providing data roaming on reasonable and not unreasonably
discriminatory terms and conditions on 3G and subsequent generations of
mobile broadband networks that are built through Mobility Fund support.
The Commission seeks comment on this proposal and asks that commenters
provide specific information on the impact and/or the importance of
such requirements in promoting the availability of advanced mobile
services.
b. Service Quality and Rates
32. The Commission proposes that Mobility Fund support be used to
expand the availability of advanced mobile communications services
comparable or superior to those provided by networks using HSPA or EV-
DO, which are commonly available 3G technologies. Universal service
support may be provided for services based on widely available current
generation technologies--or superior next generation technologies
available at the same or lower costs--even though supported services
could be based on earlier technologies. Technologies used to provide
the services supported by universal service funds need not be
technologies that are strictly limited to providing the particular
services designated for support. As detailed in connection with proof
of deployment requirements, supported networks would demonstrate their
quality of service by proving that they have achieved particular data
rates under particular conditions. The Commission proposes that these
data rates be comparable to those provided by networks using the basic
functionality of HSPA or EV-DO. The Commission would not, however,
require that supported parties use any particular technology to provide
service. Instead, the Commission proposes to use widely deployed
technologies to define a baseline of performance that any supported
network must meet or exceed. The Commission seeks comment on this
proposal. Should supported networks be required to provide data rates
comparable to 4G networks? Alternatively, should supported networks be
required to present a path to 4G service?
33. The Commission also seeks comment on how to implement, in the
context of the Mobility Fund, the statutory principle that supported
[[Page 69380]]
services should be made available to consumers in rural, insular, and
high-cost areas at rates that are reasonably comparable to rates
charged for similar services in urban areas. Given the absence of
affirmative regulation of rates charged for commercial mobile services,
as well as the rate practices and structures used by providers of such
services, how can parties demonstrate that the rates they charge in
areas where they receive support are reasonably comparable to rates
charged in urban areas? What should the Commission use as a standard
for reasonably comparable and urban areas in this context? What should
be the consequence of failing to make the required showing?
c. Deployment Schedule
34. The Commission proposes that recipients be required to meet
certain milestones for the provision of service in each unserved census
block in a tract in order to remain qualified for the full amount of
any Mobility Fund award. For example, the Commission could require that
recipients achieve fifty percent of the coverage requirement within one
year after qualifying for support. The Commission seeks comment on this
proposal and on appropriate coverage percentages and time periods for
such a milestone. Are there critical factors that should be taken into
account in establishing timetables for rollout in different areas, such
as weather conditions or limited construction seasons? The Commission
notes that service providers will have to comply with the Commission's
rules implementing the National Environmental Policy Act and other
federal environmental statutes, as well as all local requirements for
construction. Are there areas where those requirements would make it
appropriate to adopt alternative schedules?
d. Proof of Deployment
35. Parties supported by the Mobility Fund must provide 3G or
better mobile coverage in specific areas previously deemed unserved by
3G. The Commission proposes that parties satisfy their performance
requirement by proving that they have deployed a network covering the
relevant area and capable of meeting certain minimum standards. The
Commission proposes that data from the drive tests conducted after
construction and optimization of the network be used to determine
whether these requirements have been met. By drive tests, the
Commission refers to tests service providers normally conduct to
analyze network coverage for mobile services in a particular area, that
is, measurements taken from vehicles traveling on roads in the area.
More specifically, the Commission proposes that recipients of Mobility
Fund support would provide data from their drive tests showing mobile
transmissions to and from the network meeting or exceeding the
following minimum standards: Outdoor minimum of 200 kbps uplink and 768
kbps downlink to handheld mobile devices at vehicle speeds up to 70
MPH. These data rates should be achieved with 90 percent coverage area
probability at a sector loading of 70 percent. The transmissions would
be required to support mobile voice and data. The Commission proposes
that the drive test would be conducted over all Interstate, US, and
State routes in the area, as well as any other roads that the
applicable State Agency regulating the provision of telecommunications
services deems essential to service. The Commission proposes that drive
test data satisfying the foregoing requirements should be submitted
within two months of a site providing service or two years of the date
support is first provided, whichever comes earlier. The Commission
seeks comment on these proposals.
36. The Commission's proposal would not require that providers
employ any particular type of technology in expanding coverage.
Nevertheless, the Commission seeks comment on whether there are reasons
to adopt technology-specific minimum standards. Is there any risk that
providers will deploy particular technologies in inefficient ways or
ways that limit their capacity for future growth in order to meet the
minimum standards? Or should the Commission require superior
performance from certain technologies that are capable of far exceeding
the minimum requirements? For example, should the Commission require
that 4G technologies deployed with support satisfy minimum standards
greater than 3G technologies deployed with support?
37. The Commission seeks comment on how to determine the roads that
must be included in any drive tests subject to review. Would it be
sufficient to cover Interstates, US Routes, and State Routes? Do
circumstances vary sufficiently from state to state or region to region
such that different approaches should be adopted for different States?
What parties are likely to have the best available information
regarding what roads are most important for mobile coverage? Should
those parties be involved in the process of determining the roads that
must be included in the drive tests?
38. To demonstrate coverage of the population within an unserved
area, the Commission proposes that bidders submit in electronic
Shapefiles site coverage plots from a standard RF prediction tool that
utilizes high resolution terrain data and has been calibrated to match
the results of drive tests to the extent possible. The Environmental
Systems Research Institute (ESRI) Shapefile format is a commonly used
GIS (Geographic Information System) file format representing vector
data. These plots would be submitted along with the drive test data,
preferably on the same plot, and each will display the same coverage
threshold parameter, with adjustments to account for drive test
configuration specified as necessary. The coverage threshold selected
would be one that is (a) sufficient to initiate and hold a voice call,
and (b) is mathematically capable using standard link budget
calculations of supporting the minimum data rate requirements. These
link budget calculations showing derivation of the threshold would also
be provided. The scale of the plots would be at least 1:240,000 such
that reasonable coverage resolution is evident. In addition, the plots
would be accompanied by all relevant site data, including site
coordinates, antenna type(s), radiation centers (AGL), Effective
Isotropic Radiated Powers (EIRPs), antenna azimuths, and antenna tilts.
These plots would also include major roadways, census tract boundaries,
and county (or its equivalent) and state boundaries, as well as the
boundaries between served and unserved census blocks, as previously
determined by the Commission, so that the site's coverage can easily be
compared to areas previously deemed unserved. The specific census
blocks may be identified on the plot or listed in accompanying data.
Lastly, the plots would show the population previously deemed unserved
of each block and the percentage of these that are now served.
39. The Commission proposes that parties receiving support be
required to file annual reports with the Commission demonstrating the
coverage provided with support from the Mobility Fund for five years
after qualifying for support. The Commission proposes that the reports
include maps illustrating the scope of the area reached by new
services, the population residing in those areas (based on Census
Bureau data and estimates), and information regarding efforts to market
the service to promote adoption among the population in those areas. In
addition, the
[[Page 69381]]
Commission proposes that each party receiving support be required to
include in its annual reports all drive test data that the party
receives or makes use of, whether the tests were conducted pursuant to
Commission requirements or any other reason. The Commission seeks
comment on this proposal and discussion of any alternatives regarding
the collection of information about supported services newly offered in
previously unserved areas.
D. Mobility Fund Eligibility Requirements
40. In compliance with statutory requirements and to help ensure
the commitment of applicants, the Commission proposes certain minimum
requirements for those entities wishing to receive support from the
Mobility Fund. Specifically, the Commission proposes that a provider be
required to (1) Be designated (or have applied for designation) as a
wireless Eligible Telecommunications Carrier (ETC) pursuant to 47
U.S.C. 214(e), by the state public utilities commission (PUC) (or the
Commission, where the state PUC does not designate ETCs) in any area
that it seeks to serve; (2) have access to spectrum capable of 3G or
better service in the geographic area to be served; and (3) certify
that it is financially and technically capable of providing service
within the specified timeframe. The Commission proposes to require
that, subject to these requirements, applicants be eligible to submit
bids seeking support to deploy service in multiple unserved areas. The
Commission seeks comment on these minimum requirements, inquires
whether other minimum standards are desirable, and solicits comment on
other provider eligibility issues.
41. The Commission proposes a two-stage application process similar
to the one it uses in spectrum license auctions. Based on the
eligibility requirements for Mobility Fund support, the Commission
would require a pre-auction short-form application to establish
eligibility to participate in the auction, relying primarily on
disclosures as to identity and ownership and applicant certifications,
and perform a more extensive, post-auction review of the winning
bidders' qualifications based on required long-form applications. Such
an approach should provide an appropriate screen to ensure serious
participation without being unduly burdensome. This would allow the
Commission to move forward quickly with the auction, which would speed
the distribution of funding and ultimately the provision of advanced
mobile wireless services to currently unserved areas. The Commission
seeks comment on the use of this application process to ensure
compliance with its eligibility requirements.
1. ETC Designation
42. All USF recipients must be designated as ETCs by the relevant
state (or by the Commission in cases of states that have determined
they have no jurisdiction over a wireless ETC designation request)
before receiving high-cost support pursuant to 47 U.S.C. 214 and 254.
Therefore, the Commission proposes to require that applicants for
Mobility Fund support be designated as wireless ETCs covering the
relevant geographic area prior to participating in a Mobility Fund
auction. The Commission seeks comment on the proposal.
43. Alternatively, the Commission seeks comment on allowing
entities that have applied for designation as ETCs in the relevant area
to participate in a Mobility Fund auction. Pursuant to 47 U.S.C.
214(e)(1) and 47 CFR 54.101(b), an ETC is obligated to provide all of
the supported services defined in 47 CFR 54.101(a) throughout the area
for which it has been designated an ETC. Therefore, an ETC must be
designated (or have applied for designation) with respect to an area
that includes area(s) on which it wishes to receive Mobility Fund
support. Moreover, a recipient of Mobility Fund support will remain
obligated to provide supported services throughout the area for which
it is designated an ETC if that area is larger than the areas for which
it receives Mobility Fund support. Commenting parties should discuss
whether the potential gain by allowing a larger pool of applicants
offsets any potential abuse and delay that could result if a non-ETC
were to bid and win the auction, but then be deemed ineligible for
support.
44. In addition, the Commission seeks comment on the ETC
designation requirements of 47 U.S.C. 214(e). For example, ETCs must
offer supported services throughout the service area for which the
designation is received. The statute also provides that when states
handle the ETC designation, the states also designate the service
areas. Section 214 permits this Commission, with respect to interstate
services, to designate ETCs and service areas if no common carrier will
provide the services that are supported by Federal universal service
support mechanisms under 47 U.S.C. 254(c) to an unserved community or
any portion thereof that requests such service. The statute also
provides that in states where the state commission lacks jurisdiction
over the carrier seeking ETC status, which is sometimes the case for
wireless carriers, this Commission designates the ETC and the service
area. How can the Commission best interpret these and all the
interrelated requirements of 47 U.S.C. 214(e) to achieve the purposes
of the Mobility Fund?
2. Access to Spectrum To Provide Required Services
45. In order to participate in a Mobility Fund auction and receive
support, the Commission proposes that an entity be required to hold, or
otherwise have access to, a Commission authorization to provide service
in a frequency band that can support 3G or better services. The
Commission seeks comment on both the access to, and the type of,
spectrum required for Mobility Fund eligibility.
46. As an initial matter, the Commission proposes that entities
currently licensed to operate in identified unserved blocks should be
deemed to meet this requirement. The Commission also seeks comment on
whether entities other than current licensees should be eligible to
participate if they have either applied for a Commission license or
have entered into an agreement to acquire a license through an
assignment or transfer of control. Therefore, the Commission seeks
comment on whether a binding agreement to acquire the necessary
authorization to use spectrum should be sufficient for Mobility Fund
eligibility.
47. The Commission also seeks comment on using leased spectrum to
provide the service that would meet the parameters of the Mobility
Fund. Commenters supporting Mobility Fund eligibility for entities
using leased spectrum should indicate whether the Commission should
impose requirements regarding the terms of spectrum leasing
arrangements that will confer eligibility, such as the minimum duration
of the arrangement, the amount of spectrum, etc. Moreover, the
Commission asks whether the entity must currently be leasing the
spectrum at the time of the Mobility Fund's short-form or long-form
application deadline or whether a signed agreement is sufficient.
48. The Commission proposes further that entities seeking to
receive support from the Mobility Fund have access to spectrum (and
sufficient bandwidth) capable of supporting the required services, such
as spectrum for use in Advanced Wireless Services, the 700 MHz Band,
Broadband Radio Services, broadband PCS or cellular bands. Should the
Commission limit eligibility
[[Page 69382]]
based on access to specific spectrum suitable for providing the
required services? If so, what spectrum should the Commission consider
appropriate? Do the technical rules and configuration for Specialized
Mobile Radio frequencies permit 3G service? The Commission also seeks
comment on whether, with or without regard to requiring access to
particular frequencies, the Commission should require that parties
seeking support have access to a minimum amount of bandwidth and
whether only paired blocks of bandwidth should be deemed sufficient.
3. Certification of Financial and Technical Capability
49. The Commission also proposes that each party seeking to receive
support from the Mobility Fund be required to certify that it is
financially and technically capable of providing 3G or better service
within the specified timeframe in the geographic areas for which it
seeks support. The Commission seeks comment on how best to determine if
an entity has sufficient resources to satisfy the Mobility Fund
obligations. The Commission likewise seeks comment on certification
regarding an entity's technical capacity. Does the Commission need to
be specific as to the minimum showing required to make the
certification? Or can the Commission rely on its post-auction review
and performance requirements?
4. Other Qualifications
50. In addition to the three minimum qualifications (ETC
designation, access to spectrum for 3G or better services, and
certifications regarding financial and technical capabilities), the
Commission seeks comment on other eligibility requirements for entities
seeking to receive support from the Mobility Fund. Parties providing
suggestions should be specific and explain how the eligibility
requirements would serve the ultimate goals of the Mobility Fund. At
the same time that the Commission establishes minimum qualifications
consistent with the goals of the Mobility Fund, are there ways the
Commission can encourage participation by the widest possible range of
qualified parties? For example, are there any steps the Commission
should take to encourage smaller eligible parties to participate in the
bidding for support?
E. Reverse Auction Mechanism
51. At this stage in the development of the Mobility Fund, the
Commission proposes rules for and seeks comment on certain auction
design elements that will establish a general framework for the
proposed reverse auction mechanism. Accordingly, as detailed in
Appendix A of the Mobility Fund Notice of Proposed Rulemaking, the
Commission proposes rules that will provide the Commission, the
Wireless Bureau, and the Wireline Competition Bureau (Wireline Bureau)
with some flexibility to choose among various methods of conducting the
bidding and procedures to use during the bidding. These rules are
generally modeled on the Commission rules that govern the design and
conduct of its spectrum license auctions.
52. While the rules the Commission proposes establish the framework
for conducting a Mobility Fund auction, they do not necessarily by
themselves establish the specific detailed procedures that will govern
any auction process. The Commission envisions that it will develop and
provide notice to potential bidders of detailed auction procedures
prior to conducting a Mobility Fund auction. This will promote the use
of specific procedures for an auction that take into account the
particular program requirements and auction rules established in this
proceeding. Specifically, the Commission proposes that, after
establishing program and auction rules for the Mobility Fund in this
proceeding, it will release a Public Notice announcing an auction date,
identifying areas eligible for support through the auction, and seeking
comment on specific detailed auction procedures to be used, consistent
with those rules. The Commission further proposes that it will release
a subsequent Public Notice specifying the auction procedures, including
dates, deadlines, and other details of the application and bidding
process. Consistent with the Commission's existing practice for
spectrum auctions, the Commission delegates authority jointly to the
Wireless and Wireline Bureaus to establish as outlined here, through
public notices, the necessary detailed auction procedures prior to a
Mobility Fund auction, and to take all other actions needed to conduct
any such auction. The Commission seeks comment on this proposal.
1. Basic Auction Design
53. A reverse auction, in which potential providers or sellers of a
defined service or other benefit compete to provide it at the lowest
price, can be a relatively quick, simple, and transparent method of
selecting parties that will provide a benefit at the lowest price and
of setting the price those parties should be paid. Here, the Commission
proposes general rules for a Mobility Fund reverse auction including
some other aspects of the auction design and process that must be
considered before actually conducting an auction. As a threshold
matter, although there are a number of formats that could be used for
reverse auctions, including both multiple-round and single-round
formats, the Commission proposes to use a single-round reverse auction
to award Mobility Fund support. The Commission proposes a single-round
auction because it is simple and because the Commission expects bidders
for Mobility Fund support to be well acquainted with the costs
associated with providing access to advanced mobile wireless services
in the areas they proposes to cover, and to bid accordingly.
2. Application Process
54. The Commission proposes to use a two-stage application process
similar to the one the Commission uses in spectrum license auctions.
Under this proposal, the Commission would require a pre-auction short-
form application from entities interested in participating in a
Mobility Fund auction. After the auction, the Commission would conduct
a more extensive review of the winning bidders' qualifications through
long-form applications. The Commission envisions that both applications
would be filed electronically, in a process similar to that used for
spectrum license auctions.
55. The Commission proposes that, in the short-form application,
potential bidders provide basic ownership information and certify as to
their compliance with the eligibility requirements for obtaining
Mobility Fund support. Specifically, the Commission proposes that an
applicant would need to provide information about its ownership similar
to the Part 1 competitive bidding ownership rule for spectrum auctions,
47 CFR 1.2112. This information will establish the identity of
applicants and provide information that will aid in ensuring compliance
with and enforcement of Mobility Fund auction and program rules. Also,
a potential bidder would need to certify its qualifications to receive
Mobility Fund support, including providing its ETC designation status
and information regarding its access to adequate and appropriate
spectrum. Finally, the Commission proposes that applicants be required
to certify that they have and will comply with all rules for Mobility
Fund competitive bidding. The Commission
[[Page 69383]]
seeks comment on these proposed short-form application requirements.
56. In addition, the Commission seeks comment on whether the
Commission should require applicants to identify in their short-form
applications the specific census tracts with unserved blocks on which
they may wish to bid and provide service. As in the Commission's
spectrum auctions, the Commission would not necessarily require a bid
on each census tract selected in an applicant's short-form application.
However, the availability of this information could be helpful in
ensuring compliance with the Commission's auction rules. The Commission
seeks comment on this and on any other information that the Commission
should require of applicants in the pre-auction stage that would help
ensure a quick and reliable application process.
57. The Commission proposes that applications to participate in a
Mobility Fund auction should be subject to review for completeness and
compliance with its rules, and envisions a process similar to that used
in spectrum license auctions. Specifically, after the application
deadline, Commission staff would review the short-form applications,
and once review is complete, the Commission would release a public
notice indicating which short-form applications are deemed acceptable
and which are deemed incomplete. Applicants whose short-form
applications were deemed incomplete would be given a limited
opportunity to cure defects and to resubmit correct applications. As
with spectrum license auctions, applicants would only be able to make
minor modifications to their short-form applications. Major amendments
would make the applicant ineligible to bid. Once the Commission staff
reviews the resubmitted applications, the Commission would release a
second public notice designating the applicants that have qualified to
participate in the Mobility Fund auction. The Commission seeks comment
on adopting this application process in order to qualify entities to
participate in a Mobility Fund auction.
3. Bidding Process
58. The Commission proposes to conduct a single-round reverse
auction to identify those applicants that will receive Mobility Fund
support and the amount of support they will receive, subject to post-
auction processing requirements applicable to winning bidders. The
Commission seeks comment on aspects of the bidding process for any
Mobility Fund auction, so that potential bidders will understand how
bids may be submitted, what bids will be acceptable, and how the
auction mechanism will determine winning bidders.
59. Based on the Commission's proposal to award support to bidders
that will deploy service in unserved census blocks at the least per-
unit cost to the Mobility Fund, the Commission proposes that bids for
Mobility Fund support would state the dollar amount of support sought
per each unit associated with the unserved area(s) in those census
tracts covered by the specific bid submitted. In addition, based on its
proposal to award support to only one provider per area, the Commission
proposes that a Mobility Fund auction would select at most one winning
bidder per census tract. The Commission proposes that after bidding
closes, in order to select winning bidders, the auction mechanism will
rank bids based on the per-unit bids from lowest to highest and
calculate the running sum represented by those bids and the number of
units in the unserved areas covered by those bids. The Commission also
proposes that if there are any identical bids--in the same per-unit
amounts to cover the same tract or tracts, submitted by different
bidders--that only one such bid, chosen randomly, be considered in the
ranking.
60. Under these proposals, the auction would identify winning
bidders starting with the bidder making the lowest per-unit bid and
continue to the bidders with the next lowest per-unit bids in turn,
provided that support had not already been assigned for that census
tract, so long as the running sum based on the units in the identified
unserved areas covered by the bids does not exceed the available
monies.
61. Maximum bids and reserve prices. The Commission proposes a rule
to provide the Commission with discretion to establish maximum
acceptable per-unit bid amounts for a Mobility Fund auction. The
Commission also proposes that it may, prior to the auction, establish
reserve amounts, separate and apart from any maximum opening bids, and
may elect whether or not to disclose those reserves.
62. Aggregating service areas and package bidding. The Commission
proposes a rule to provide generally that the Commission shall have
discretion to establish bidding procedures for any Mobility Fund
auction that permit bidders to submit bids on packages of tracts, so
that their bids may take into account scale and other essential
efficiencies that tract-by-tract bidding may not permit. If a bidder
were awarded support based on a package bid, it would still be required
to meet the performance requirements for each census tract in the
package.
63. The Commission seeks comment generally on the use of package
bidding. The Commission proposes that specific procedures for package
bidding be among those determined as part of the process of
establishing the detailed procedures for a Mobility Fund auction. The
Commission expects that proposals for such procedures would consider
how to implement package bidding consistent with its proposal to award
support to at most one provider in a census tract, without allowing
geographic overlaps among packages to disqualify desirable bids. For
this purpose, proposals might include limited package bidding, e.g.,
permitting only predefined non-overlapping packages, permitting bidders
to submit package bids on geographically adjacent census tracts, and/or
the possibility of requiring that bidders submitting package bids also
submit separate bids on the component tracts.
64. Refinements to the selection mechanism to address limited
available funds. The auction would identify winning bidders so long as
the running sum of support represented by the winning bids does not
exceed the monies to be made available in a Mobility Fund auction.
However, there would likely be monies remaining after identifying the
last lowest per-unit bid that does not exceed the funds available. The
Commission proposes that the Commission's rules should provide it with
discretion to establish procedures in the pre-auction process by which
to identify winning bidder(s) for such remaining funds, e.g., by
continuing to consider bids in order of per-unit bid amount while
skipping bids that would require more support than is available, or by
not identifying winning bidder(s) for the remaining funds and offering
such funds in a subsequent auction. In exercising this discretion, the
Commission must balance the advantages of assigning Mobility Fund
support quickly and transparently with any disadvantages from
supporting less cost-effective per-unit bids.
65. The Commission also proposes that, in the pre-auction process,
it will determine procedures to address a situation where there are two
or more bids for the same per-unit amount but for different areas (tied
bids) and remaining funds are insufficient to satisfy all of the tied
bids. Specifically, the Commission proposes a rule that would give it
the discretion to identify winning bidders among such tied bids by
awarding support to that combination of tied bids that would
[[Page 69384]]
most nearly exhaust the available funds, by ranking the tied bids to
establish an order in which they would be awarded based on remaining
available funds, or by declining to select winning bidder(s) for the
remaining funds and offering such funds in a subsequent auction.
66. The Commission seeks comment on these proposals for developing
procedures to address the possibility that funds will remain after the
auction has identified the last lowest per-unit bid that does not
exceed the funds available through the auction. The Commission asks
commenters to address the relative advantages of any suggested
approaches and on other options that may later be considered when the
Commission develops specific auction procedures for a Mobility Fund
auction.
67. Withdrawn bids. The Commission has discretion, in developing
procedures for its spectrum license auctions, to provide bidders
limited ability to withdraw provisionally winning bids before the close
of an auction. While here the Commission proposes that the Wireless and
Wireline Bureaus be delegated authority to determine any such
procedures in the pre-auction process, the Commission would not expect
that the Bureaus would consider permitting any bids to be withdrawn or
removed from consideration after the close of bidding in a single-round
Mobility Fund auction.
68. In spectrum license auctions, the Commission permits bid
withdrawals in certain circumstances so that bidders can better manage
their license aggregation strategies. The Commission does not believe
that aggregation issues are of comparable importance under the Mobility
Fund, which targets support to particular hard-to-reach areas. Further,
the Commission believes that permitting bids to be withdrawn after the
mechanism has selected winning bidders would unduly disrupt the prompt
and smooth distribution of support.
69. The Commission expects that bidders will consider carefully
expected costs and the characteristics of the geographic areas they
propose to serve if offered Mobility Fund support and bid accordingly,
so that if offered support, they can proceed expeditiously to file
their long form applications and comply with post-auction procedures.
4. Information and Competition
70. In the interests of fairness and maximizing competition in the
auction process, the Commission proposes to prohibit applicants
competing for support in the auction from communicating with one
another regarding the substance of their bids or bidding strategies.
Information available in short-form applications or in the auction
process itself might also be used to attempt to reduce competition.
Accordingly, for spectrum auctions, the Commission adopted rules
providing it with discretion to limit public disclosure of auction-
related information, for example by keeping non-public during the
auction process certain information from applications and/or the
bidding. The Commission proposes to adopt similar rules for a Mobility
Fund reverse auction and seeks comment on this proposal.
5. Auction Cancellation
71. As with the Commission's spectrum license auctions, the
Commission proposes that the Commission's rules provide it with the
discretion to delay, suspend, or cancel bidding before or after a
reverse auction begins under a variety of circumstances, including
natural disasters, technical failures, administrative necessity, or any
other reason that affects the fair and efficient conduct of the
bidding. The Commission seeks comment on this proposal.
F. Post-Auction Process, Administration, Management, and Oversight of
the Mobility Fund
1. Administration of the Mobility Fund
72. The Universal Service Administrative Company (USAC), a
subsidiary of the National Exchange Carrier Association (NECA), is the
private not-for-profit corporation created to serve as the
Administrator of the USF under the Commission's direction. The
Commission appointed USAC the permanent Administrator of all of the
federal universal service support mechanisms. USAC is responsible for
performing numerous functions including, but not limited to, billing
USF contributors, collecting USF contributions, disbursing funds,
recovering improperly disbursed funds, processing appeals of funding
decisions, submitting periodic reports to the Commission, maintaining
accounting records, conducting audits of contributors and
beneficiaries, and providing outreach to interested parties. See 47 CFR
54.702(b) through (m), 54.711, 54.715. USAC administers the USF in
accordance with the Commission's rules and orders. The Commission
provides USAC with oral and written guidance, as well as regulation
through its rulemaking process. Because the Mobility Fund will be a
part of the USF high cost support program, the Commission proposes to
direct USAC to administer the Mobility Fund in accordance with the
applicable terms of its current appointment as administrator, and
subject to all existing Commission rules and orders applicable to the
USF Administrator. The Commission seeks comment on whether there are
any specific rules or orders currently applicable to USAC's
administration of the USF that should not apply specifically to USAC's
administration of the Mobility Fund, and whether there are new or
different requirements the Commission should apply to USAC's
administration of the Mobility Fund.
73. In 2008, the Commission entered into a Memorandum of
Understanding (MOU) with USAC to facilitate efficient management and
oversight of the Commission's federal universal service program. If the
Commission establishes a Mobility Fund, the Commission anticipates that
Commission staff would work with USAC outside the context of this
rulemaking proceeding to revise the MOU as necessary for efficient
administration of the Mobility Fund. The Commission nevertheless
solicits input from interested parties on whether there are specific
aspects of the MOU that the Commission should consider revising based
on the specific purpose and goals of the Mobility Fund. For example,
under the MOU, the Commission's Wireline Bureau is the USF
Administrator's primary point of contact regarding USF policy
questions, including without limitation, questions regarding the
applicability of the Commission's USF rules, orders, and directives,
unless otherwise specified in such requirements. Because the Mobility
Fund would be established to distribute support for the deployment of
terrestrial mobile wireless networks providing 3G service, the
Commission seeks comment on whether it would be appropriate to add the
Wireless Bureau as a point of contact for the USF Administrator for
policy questions pertaining to the Mobility Fund.
2. Post-Auction Application Process
74. The Commission proposes a two-stage application process. An
applicant for Mobility Fund support would file a short-form application
to participate in bidding, and the information on that application
would be reviewed as part of the Commission's initial screening process
to determine the applicant's eligibility for support based on its ETC
status and its other qualifications under the Mobility Fund auction
rules. After the conclusion of the auction, winning bidders would file
long-form applications to qualify for and receive
[[Page 69385]]
Mobility Fund support. Those applications would be subject to an in-
depth review of the applicants' eligibility and qualifications to
receive USF support. The Commission seeks comment on each step of the
post-auction application process. To the extent a commenter disagrees
with a particular aspect of the proposed process, the Commission asks
them to identify that with specificity and propose an alternative.
a. Post-Auction Application
75. The Commission proposes that, after bidding has ended, the
Commission will identify and notify the winning bidders and declare the
bidding closed. Unless otherwise specified by public notice, within 10
business days after being notified that it is a winning bidder for
Mobility Fund support, a winning bidder would be required to submit a
long-form application pursuant to the program requirements governing
the Mobility Fund. The Commission seeks comment on the specific
information and showings that should be required of winning bidders on
the long-form application before they can be certified to receive
support from the Mobility Fund and before actual disbursements from the
Mobility Fund can be made to them. The Commission proposes that a
winning bidder would be required to provide detailed information
showing that it is legally, technically and financially qualified to
receive support from the Mobility Fund. The Commission also proposes
that, if the Commission were to adopt a rule allowing an applicant to
participate in the auction while its ETC designation status is pending,
the applicant would be required in its long-form application to
demonstrate its ETC status by, for example, providing a copy of its ETC
designation order from the relevant state PUC. The Commission seeks
comment on these proposals and on the specific information that winning
bidders should be required to provide to make the required showings.
76. The Commission also seeks comment on the procedures that it
should apply to a winning bidder that fails to submit a long-form
application by the established deadline. Imposition of some deterrent
measure, in addition to dismissal of the late-filed application, could
deter auction participants from submitting insincere bids and serve as
an incentive for winning bidders to timely submit their long-form
applications, enabling prompt application review and allowing
expeditious distribution of support. With respect to the disposition of
the Mobility Fund support for which a winning bidder does not timely
file a long-form application, the Commission proposes that the funds
that would have been provided to such an applicant be offered in a
subsequent auction. The Commission seeks comment on this proposal.
b. Ownership Disclosure
77. The Commission discusses a proposed requirement for auction
participants to disclose certain ownership information as an aid to
bidders by providing them with information about their auction
competitors and alerting them to the entities that are subject to its
rules concerning prohibited communications. The Commission proposes
that in the post-auction application phase, an applicant would also be
required to provide additional detailed information about its ownership
and control. The Commission seeks comment on what ownership information
should be required of applicants for Mobility Fund support. Given that
wireless providers often create subsidiaries or related entities for
specific licenses or other purposes, detailed ownership information may
be necessary to ensure that applicants claiming ETC status in fact
qualify for such status. In addition to providing information on an
applicant's officers and directors, should the Commission require
disclosure of an applicant's controlling interests that is, those
individuals and entities with either de jure or de facto control of the
applicant? Applicants for authorizations to provide wireless services
are required to disclose ownership interests in the applicant of ten
percent or more. What threshold level of ownership interest in an
applicant for Mobility Fund support should be required to be reported
on the applicant's long-form application?
78. The Commission also seeks comment on the extent to which the
Commission can minimize the reporting burden on winning bidders by
allowing them to use ownership information stored in existing
Commission databases and either update the ownership information in the
database or certify that there have been no changes in the ownership
information since it was last submitted to the Commission.
c. Project Construction
79. The Commission seeks comment on the level of information an
applicant for Mobility Fund support should be required to provide
regarding the network it will deploy with that support. The Commission
proposes that an applicant be required to include in its long-form
application a detailed project description that describes the network,
identifies the proposed technology, demonstrates that the project is
technically feasible, and describes each specific development phase of
the project (e.g., network design phase, construction period,
deployment and maintenance period). To ensure that projects proceed to
completion, the Commission proposes that a participant be required to
submit a project schedule that identifies the following project
milestones: start and end date for network design; start and end date
for drafting and posting requests for proposal (RFPs); start and end
date for selecting vendors and negotiating contracts; start date for
commencing construction and end date for completing construction. The
Commission also proposes that a participant's project schedule identify
the dates by which it will meet applicable requirements to receive the
installments of Mobility Fund support for which it subsequently
qualifies.
d. Guarantee of Performance
80. The Commission also seeks comment on whether a winning bidder
should be required to post financial security as a condition to
receiving Mobility Fund support to ensure that it has committed
sufficient financial resources to meeting the program obligations
associated with such support under the Commission's rules. In
particular, the Commission seeks comment on whether all winning bidders
should be required to obtain an irrevocable standby letter of credit
(LOC) no later than the date on which their long-form applications are
submitted to the Commission. The Commission also seeks comment on
whether alternatively, only certain applicants that do not meet
specified criteria should be subject to this requirement, and if so,
what those criteria should be. For example, should the Commission
establish criteria, based on bond rating, market capitalization, or
debt/equity ratios (combined with minimum levels of available capital)
that, if not met, would make an LOC necessary? Would such a requirement
unnecessarily preclude providers that otherwise might be able to
satisfy the obligations of the Mobility Fund from seeking to
participate?
81. The Commission seeks comment on how to determine the amount of
the LOC necessary to ensure uninterrupted construction of a network, as
well as the length of time that the LOC should remain in place. For
example, the amount of the LOC could be determined on the basis of an
estimated annual
[[Page 69386]]
budget that could accompany the build-out schedule required as part of
the long-form applications, or the Commission could simply require a
specific dollar figure for the LOC in an amount that would ensure that
construction could proceed for a given amount of time. Should the
amount of an initial LOC, or a subsequent LOC, also ensure the
continuing maintenance and operation of the network? Under what
circumstances should the participant be required to replenish the LOC?
82. The Commission also seeks comment on what events would
constitute a default by the recipient of Mobility Fund support that
would allow a draw on the entire remaining amount of the LOC. Further,
in the event of bankruptcy, the LOC should be insulated from claims
other than the draws authorized for the construction and operation of
the network. The Commission seeks comment on provisions it might adopt
to provide safeguards to this effect. For example, the Commission could
require as a condition of receiving Mobility Fund support, that a
winning bidder first provide the Commission with a legal opinion letter
that would state, subject only to customary assumptions, limitations
and qualifications, that in a proceeding under Title 11 of the United
States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code), in which the
winning bidder is the debtor, the bankruptcy court would not treat the
LOC or proceeds of the LOC as property of the winning bidder's
bankruptcy estate (or the bankruptcy estate of any other bidder-related
entity requesting the issuance of the LOC) under 11 U.S.C. 541.
83. As an alternative to an LOC, the Commission seeks comment on
whether the Commission should require a winning bidder to guarantee
completion of construction by obtaining a performance bond covering the
cost of network construction and operation. Such a requirement would be
similar to that which the Commission has imposed as a condition on
satellite licenses. The Commission also seeks comment on the types of
requirements that bond issuers might impose and whether such
requirements would be so unduly burdensome as to restrict the number of
carriers that might be able to bid for Mobility Fund support. The
Commission also seeks comment on the relative merits of performance
bonds and LOCs and the extent to which performance bonds, in the event
of the bankruptcy of the recipient of Mobility Fund support, might
frustrate the Commission's goal of ensuring timely build-out of the
network. The Commission also seeks comment on whether there are other
protections that the Commission should reasonably seek to ascertain the
financial viability of the winning bidder, and ensure construction of
the network and its subsequent operation. For instance, are there ways
that the Commission can facilitate timely build-out of the network in
areas where recipients of Mobility Fund support enter bankruptcy before
completing construction? Are there steps the Commission could take to
facilitate completion of the network by another service provider?
e. Other Funding Restrictions
84. The Commission seeks comment on whether participants who
receive support from the Mobility Fund should be barred from receiving
funds for the same activity under any other federal program, including,
for example, federal grants, awards, or loans.
f. Certifications
85. Finally, the Commission seeks comment on the certifications
that should be required of a winning bidder to receive Mobility Fund
support. The Commission proposes that prior to receiving Mobility Fund
support, an applicant be required to certify to the availability of
funds for all project costs that exceed the amount of support to be
received from the Mobility Fund and certify that they will comply with
all program requirements. Should the Commission also require
certifications regarding the provision of service at rates reasonably
comparable to those offered in urban areas? The Commission has sought
comment on the definition of these terms for these purposes in its
discussion of performance requirements.
3. Disbursing Support
a. Support Payments
86. The Commission seeks comment on the following proposal to
provide Mobility Fund support in installments, and on whether this
proposal strikes the appropriate balance between advancing funds to
expand service and assuring that service is expanded.
87. The Commission proposes that Mobility Fund support be provided
in three installments. Each party receiving support would be eligible
for \1/3\ of the amount of support associated with any specific census
tract once its application for support is granted. A party would
receive the second third of its total support when it files a report
demonstrating coverage of 50 percent of the population associated with
the census block(s) deemed unserved that are within that census tract.
A party would receive the final third of the support upon filing a
report that demonstrates coverage of 100 percent of the resident
population in the unserved census block(s) within the census tract.
Alternatively, if the Commission establishes a coverage requirement of
less than 100 percent, the Commission proposes that a party may file a
report that certifies that, although less than 100 percent of the
originally unserved resident population is now covered, at least the
required percent of that population is covered and no further coverage
expansion is intended. In that case, the party's final payment would be
the difference between the total amount of support based on the
population of unserved census blocks actually covered, i.e., a figure
between the required percentage and 100 percent of the resident
population, and any support previously received. The Commission seeks
comment on this proposal.
88. 47 U.S.C. 254(e) requires that a carrier shall use support only
for the provision, maintenance, and upgrading of facilities and
services for which the support is intended. How should the Commission
ensure that support from the Mobility Fund is used for the purposes in
which it was intended as required by 47 U.S.C. 254(e)? The Commission
seeks comment on requiring additional information from the recipients
concerning how the funds were used and specifically what information
should be submitted.
b. Support Liabilities
89. The Commission seeks comment on the extent to which parties
qualifying to receive support should be liable in the event that they
are unable to expand service pursuant to the goals of the Mobility
Fund. The Commission proposes that applicants qualifying for support be
able to receive initial payments in advance of providing service in
order to finance the expansion of service. Parties receiving such
support should be liable to repay the support if they fail to provide
the intended service. Should they be subject to additional liabilities
and/or security requirements (such as letters of credit or performance
bonds) in order to provide them with proper incentives to perform and
to protect the Mobility Fund in case they fail to perform as required?
Should the Commission require affiliates, such as parent corporations
or entities within the same larger enterprise, to be responsible if the
recipient fails to meet its obligations? Is there a level of service
short of the full service sought that ought to offset the supported
parties'
[[Page 69387]]
liabilities? Are any special provisions needed in the Commission's
rules to address the possibility that a party qualifying for support
from the Mobility Fund might enter bankruptcy prior to providing all
the coverage necessary to receive support? Are there measures the
Commission can take to limit the possibility that Mobility Fund support
becomes an asset in such party's bankruptcy estate for an extended
period of time instead of being used promptly to further the goals of
the Mobility Fund? The Commission seeks comment on these issues.
4. Audits and Record Retention
90. The Commission seeks comment on the rules that the Commission
should establish to impose certain internal control requirements on
program participants to facilitate program oversight. The Commission
has taken action in previous proceedings to detect and deter waste,
fraud, and abuse of the USF.
a. Audits
91. Audits are an important tool for the Commission and the USF
Administrator to ensure program integrity and to detect and deter
waste, fraud, and abuse. Commission rules authorize the Administrator
to conduct audits of contributors to the universal service support
mechanisms. The 2008 FCC-USAC MOU requires the USF Administrator to
conduct audits, including audits of USF beneficiaries, in accordance
with generally accepted government auditing standards, as required by
47 CFR 54.702(n). USAC's audit program consists of audits by USAC's
internal audit division staff as well as audits by independent auditors
under contract with USAC.
92. The Commission proposes that Mobility Fund beneficiaries, like
beneficiaries of other USF programs, be subject to assessments as
required under the Improper Payments Information Act of 2002 and random
compliance audits to ensure compliance with program rules and orders.
The Commission seeks comment on whether random compliance audits of
Mobility Fund beneficiaries would provide adequate audit oversight of
that program. Are there other or additional oversight measures,
including scheduled compliance audits that would be appropriate and
effective in detecting and deterring waste, fraud, and abuse?
b. Record Retention
93. The Commission adopted rules establishing rigorous document
retention requirements for USF program participants. The rules create
additional penalties for bad actors--specifically, the Commission can
now debar from continued participation in all USF programs, any party
that defrauds any of the four USF disbursement programs. Consistent
with the rules governing the Commission's existing high-cost support
program, the Commission proposes to require recipients of Mobility Fund
support to retain all records that they may require to demonstrate to
auditors that the support they received was consistent with the Act and
the Commission's rules.
94. The Commission seeks comment on what records should at a
minimum be included in this requirement. As an initial matter, the
Commission proposes that the record retention requirements apply to all
agents of the recipient, and any documentation prepared for or in
connection with the recipient's Mobility Fund support. The Commission
further proposes that beneficiaries be required to make all such
documents and records that pertain to them, contractors, and
consultants working on behalf of the beneficiaries, available to the
Commission's Office of Managing Director, Wireless Bureau, Wireline
Bureau, Office of Inspector General, and the USF Administrator, and
their auditors.
95. The Commission proposes that a five-year period for record
retention, consistent with the rules the Commission adopted for those
receiving other universal service high cost support, is a reasonable
standard that will serve the public interest. To the extent other rules
or any other law require or necessitate documents be kept for longer
periods of time, the Commission does not alter, amend, or supplant such
rule or law. High cost program recipients would be required to keep
documents for such longer periods of time as required or necessary
under such other rules or law and make such documents available to the
Commission and USAC. The Commission seeks comment on this proposal.
5. Delegation of Authority
96. In order to implement the various requirements the Commission
adopts for applicants for and recipients of Mobility Fund support, the
Commission proposes to delegate jointly to the Wireless Bureau and
Wireline Bureau the authority to determine the method and procedures
for applicants and recipients to submit the appropriate and relevant
documents and information. This delegation of authority to both bureaus
would authorize modification, as necessary, of existing FCC forms and
the creation, if necessary, of new FCC forms to implement the rules the
Commission adopt in this proceeding.
II. Procedural Matters
A. Filing Requirements
97. Ex Parte Rules. The Mobility Fund Notice of Proposed Rulemaking
will be treated as a permit-but-disclose proceeding subject to the
permit-but-disclose requirements under 47 CFR 1.1206(b). Ex parte
presentations are permissible if disclosed in accordance with
Commission rules, except during the Sunshine Agenda period when
presentations, ex parte or otherwise, are generally prohibited. Persons
making oral ex parte presentations are reminded that a memorandum
summarizing a presentation must contain a summary of the substance of
the presentation and not merely a listing of the subjects discussed.
More than a one- or two-sentence description of the views and arguments
presented is generally required. Additional rules pertaining to oral
and written presentations are set forth in 47 CFR 1.1206(b).
B. Initial Regulatory Flexibility Analysis
98. As required by the Regulatory Flexibility Act (RFA), the
Commission has prepared this Initial Regulatory Flexibility Analysis
(IRFA) of the possible significant economic impact on small entities of
the policies and rules proposed in the Mobility Fund Notice of Proposed
Rulemaking. Written public comments are requested on this IRFA.
Comments must be identified as responses to the IRFA and must be filed
by the deadlines for comments set forth in this Federal Register
summary--that is, the same dates as the comment and reply deadlines for
the Mobility Fund Notice of Proposed Rulemaking. The Commission will
send a copy of the Mobility Fund Notice of Proposed Rulemaking,
including the IRFA to the Chief Counsel for Advocacy of the Small
Business Administration.
1. Need for, and Objectives of, the Proposed Rules
99. The Mobility Fund Notice of Proposed Rulemaking seeks comment
on creation of a new Mobility Fund within the high-cost mechanism of
the federal universal service program. The purpose of this Mobility
Fund is to significantly improve coverage of current-generation or
better mobile voice and Internet service for consumers in areas where
such coverage is currently missing, and to do so by supporting private
investment.
100. The Mobility Fund is one of a set of initiatives to promote
deployment of broadband and mobile services in the
[[Page 69388]]
United States. In the Mobility Fund Notice of Proposed Rulemaking, the
Commission seeks comment on the creation of the Mobility Fund to
provide an initial infusion of funds toward solving persistent gaps in
mobile services through targeted, one-time support for the build-out of
current- and next-generation wireless infrastructure in areas where
these services are unavailable. This proposal represents a critical
step in modernizing the USF.
2. Legal Basis
101. The legal basis for the proposed rules and the Mobility Fund
Notice of Proposed Rulemaking is contained in 47 U.S.C. 154(i), 301,
303(c), 303(f), 303(r), 303(y), and 310, and 47 CFR 1.411.
3. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
102. 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 proposed rules, if adopted. 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 which: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the SBA.
103. Small Businesses. Nationwide, there are a total of
approximately 29.6 million small businesses, according to the SBA.
104. Small Organizations. Nationwide, as of 2002, there are
approximately 1.6 million small organizations. A ``small organization''
is generally ``any not-for-profit enterprise which is independently
owned and operated and is not dominant in its field.''
105. Small Governmental Jurisdictions. The term ``small
governmental jurisdiction'' is defined generally as ``governments of
cities, towns, townships, villages, school districts, or special
districts, with a population of less than fifty thousand.'' Census
Bureau data for 2002 indicate that there were 87,525 local governmental
jurisdictions in the United States. The Commission estimates that, of
this total, 84,377 entities were ``small governmental jurisdictions.''
Thus, the Commission estimates that most governmental jurisdictions are
small.
106. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category. Prior to that time, such firms were
within the now-superseded categories of ``Paging'' and ``Cellular and
Other Wireless Telecommunications.'' Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees. Because Census Bureau data are not yet
available for the new category, the Commission will estimate small
business prevalence using the prior categories and associated data. For
the category of Paging, data for 2002 show that there were 807 firms
that operated for the entire year. Of this total, 804 firms had
employment of 999 or fewer employees, and three firms had employment of
1,000 employees or more. For the category of Cellular and Other
Wireless Telecommunications, data for 2002 show that there were 1,397
firms that operated for the entire year. Of this total, 1,378 firms had
employment of 999 or fewer employees, and 19 firms had employment of
1,000 employees or more. Thus, the Commission estimates that the
majority of wireless firms are small.
107. Auctions. Initially, the Commission notes that, as a general
matter, the number of winning bidders that qualify as small businesses
at the close of an auction does not necessarily represent the number of
small businesses currently in service. Also, the Commission does not
generally track subsequent business size unless, in the context of
assignments or transfers, unjust enrichment issues are implicated.
108. 2.3 GHz Wireless Communications Services. This service can be
used for fixed, mobile, radiolocation, 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 SBA
has approved these definitions. The Commission auctioned geographic
area licenses in the WCS service. In the auction, which was conducted
in 1997, there were seven bidders that won 31 licenses that qualified
as very small business entities, and one bidder that won one license
that qualified as a small business entity.
109. 1670-1675 MHz Band. An auction for one license in the 1670-
1675 MHz band was conducted in 2003. The Commission defined a ``small
business'' as an entity with attributable average annual gross revenues
of not more than $40 million for the preceding three years and thus
would be eligible for a 15 percent discount on its winning bid for the
1670-1675 MHz band license. Further, the Commission defined a ``very
small business'' as an entity with attributable average annual gross
revenues of not more than $15 million for the preceding three years and
thus would be eligible to receive a 25 percent discount on its winning
bid for the 1670-1675 MHz band license. One license was awarded. The
winning bidder was not a small entity.
110. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. As noted, the SBA has developed a small business
size standard for Wireless Telecommunications Carriers (except
Satellite). Under the SBA small business size standard, a business is
small if it has 1,500 or fewer employees. According to Trends in
Telephone Service data, 434 carriers reported that they were engaged in
wireless telephony. Of these, an estimated 222 have 1,500 or fewer
employees and 212 have more than 1,500 employees. The Commission has
estimated that 222 of these are small under the SBA small business size
standard.
111. Broadband Personal Communications Services. The broadband
personal communications services (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission has created a small business
size standard for the C and F Blocks as an entity that has average
gross revenues of less than $40 million in the three previous calendar
years. For the F Block, an additional small business size standard 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 small
business size standards, in the context of broadband PCS auctions, have
been approved by the SBA. No small businesses within the SBA-approved
small business size standards bid successfully for licenses in the A
and B Blocks. There were 90 winning bidders that qualified as small
entities in the C Block auctions. A total of 93 ``small'' and ``very
small'' business bidders won approximately 40 percent of the 1,479
licenses for the D, E, and F Blocks. In 1999, the Commission
reauctioned 155
[[Page 69389]]
C, D, E, and F Block licenses; there were 113 small business winning
bidders.
112. In 2001, the Commission completed the auction of 422 C and F
Block broadband PCS licenses in Auction 35. Of the 35 winning bidders
in this auction, 29 qualified as ``small'' or ``very small''
businesses. Subsequent events, concerning Auction 35, including
judicial and agency determinations, resulted in a total of 163 C and F
Block licenses being available for grant. In 2005, the Commission
completed an auction of 188 C Block licenses and 21 F Block licenses in
Auction 58. There were 24 winning bidders for 217 licenses. Of the 24
winning bidders, 16 claimed small business status and won 156 licenses.
In 2007, the Commission completed an auction of 33 licenses in the A,
C, and F Blocks in Auction 71. Of the 14 winning bidders, six were
designated entities. In 2008, the Commission completed an auction of 20
broadband PCS licenses in the C, D, E and F Block licenses in Auction
78.
113. Narrowband Personal Communications Services. In 1994, the
Commission conducted an auction for narrowband PCS licenses. A second
auction was also conducted later in 1994. For purposes of the first two
narrowband PCS auctions, ``small businesses'' were entities with
average gross revenues for the prior three calendar years of $40
million or less. Through these auctions, the Commission awarded a total
of 41 licenses, 11 of which were obtained by four small businesses. To
ensure meaningful participation by small business entities in future
auctions, the Commission adopted a two-tiered small business size
standard. A ``small business'' is an entity that, together with
affiliates and controlling interests, has average gross revenues for
the three preceding years of not more than $40 million. A ``very small
business'' is an entity that, together with affiliates and controlling
interests, has average gross revenues for the three preceding years of
not more than $15 million. The SBA has approved these small business
size standards. A third auction was conducted in 2001, with five
bidders winning 317 (Metropolitan Trading Areas and nationwide)
licenses. Three of these bidders claimed status as a small or very
small entity and won a total of 311 licenses.
114. Advanced Wireless Services. In 2006, the Commission conducted
its first auction of Advanced Wireless Services licenses in the 1710-
1755 MHz and 2110-2155 MHz bands (AWS-1), designated as Auction 66. The
Commission defined ``small business'' as an entity with attributed
average annual gross revenues that exceeded $15 million and did not
exceed $40 million for the preceding three years. A small business
received a 15 percent discount on its winning bid. A ``very small
business is defined as an entity with attributed average annual gross
revenues that did not exceed $15 million for the preceding three years.
A very small business received a 25 percent discount on its winning
bid. In Auction 66, thirty-one winning bidders identified themselves as
very small businesses and won 142 licenses. Twenty-six of the winning
bidders identified themselves as small businesses and won 73 licenses.
In 2008, the Commission conducted an auction of AWS-1 licenses,
designated as Auction 78, in which it offered 35 AWS-1 licenses for
which there were no winning bids in Auction 66. Four winning bidders
that identified themselves as very small businesses won 17 AWS-1
licenses; three of the winning bidders that identified themselves as a
small business won five AWS-1 licenses.
115. 700 MHz Band Licenses. The Commission previously adopted
criteria for defining three groups of small businesses for purposes of
determining their eligibility for special provisions such as bidding
credits. The Commission defined a ``small business'' as an entity that,
together with its affiliates and controlling principals, has average
gross revenues not exceeding $40 million for the preceding three years.
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 $15 million for the preceding three years.
Additionally, the Lower 700 MHz Band had a third category of small
business status for Metropolitan/Rural Service Area (MSA/RSA) licenses,
identified as ``entrepreneur'' and 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. The SBA approved these small size standards. The Commission
conducted an auction in 2002 of 740 Lower 700 MHz Band licenses (one
license in each of the 734 MSAs/RSAs and one license in each of the six
Economic Area Groupings (EAGs)). Of the 740 licenses available for
auction, 484 licenses were sold to 102 winning bidders. Seventy-two of
the winning bidders claimed small business, very small business or
entrepreneur status and won a total of 329 licenses. The Commission
conducted a second Lower 700 MHz Band auction in 2003 that included 256
licenses: 5 EAG licenses and 476 Cellular Market Area licenses.
Seventeen winning bidders claimed small or very small business status
and won 60 licenses, and nine winning bidders claimed entrepreneur
status and won 154 licenses. In 2005, the Commission completed an
auction of 5 licenses in the Lower 700 MHz Band, designated Auction 60.
There were three winning bidders for five licenses. All three winning
bidders claimed small business status.
116. In 2007, the Commission revised the band plan for the
commercial (including Guard Band) and public safety 700 MHz Band
spectrum, adopted services rules, including stringent build-out
requirements, an open platform requirement on the C Block, and a
requirement on the D Block licensee to construct and operate a
nationwide, interoperable wireless broadband network for public safety
users. In 2008, the Commission conducted Auction 73 which offered all
available, commercial 700 MHz Band licenses (1,099 licenses) for
bidding using the Commission's standard simultaneous multiple-round
(SMR) auction format for the A, B, D, and E Block licenses and an SMR
auction design with hierarchical package bidding (HPB) for the C Block
licenses. For Auction 73, a bidder with attributed average annual gross
revenues that did not exceed $15 million for the preceding three years
(very small business) qualified for a 25 percent discount on its
winning bids. A bidder with attributed average annual gross revenues
that exceeded $15 million, but did not exceed $40 million for the
preceding three years, qualified for a 15 percent discount on its
winning bids. At the conclusion of Auction 73, 36 winning bidders
identifying themselves as very small businesses won 330 of the 1,090
licenses, and 20 winning bidders identifying themselves as a small
business won 49 of the 1,090 licenses. The provisionally winning bids
for the A, B, C, and E Block licenses exceeded the aggregate reserve
prices for those blocks. However, the provisionally winning bid for the
D Block license did not meet the applicable reserve price and thus did
not become a winning bid.
117. 700 MHz Guard Band Licenses. For 700 MHz Guard Band licenses,
the Commission adopted size standards for ``small businesses'' and
``very small businesses'' for purposes of determining their eligibility
for special provisions such as bidding credits and installment
payments. A small business in this service is an entity that, together
with its affiliates and controlling principals, has average gross
revenues not exceeding $40 million for the preceding
[[Page 69390]]
three years. Additionally, a very small business is an entity that,
together with its affiliates and controlling principals, has average
gross revenues that are not more than $15 million for the preceding
three years. SBA approval of these definitions is not required. In
2000, the Commission conducted an auction of 52 Major Economic Area
(MEA) 700 MHz Guard Band licenses. Of the 104 licenses auctioned, 96
licenses were sold to nine bidders, of which five identified themselves
as small businesses and won a total of 26 licenses. A second auction of
eight 700 MHz Guard Band licenses commenced and closed in 2001. Of
three bidders, one was a small business that won two of the eight
licenses.
118. Specialized Mobile Radio. The Commission awards small business
bidding credits in auctions for Specialized Mobile Radio (SMR)
geographic area licenses in the 800 MHz and 900 MHz bands to entities
that had revenues of no more than $15 million in each of the three
previous calendar years. The Commission awards very small business
bidding credits to entities that had revenues of no more than $3
million in each of the three previous calendar years. The SBA has
approved these small business size standards for the 800 MHz and 900
MHz SMR Services. The Commission has held auctions for geographic area
licenses in the 800 MHz and 900 MHz bands. The 900 MHz SMR auction was
completed in 1996. Sixty bidders claiming that they qualified as small
businesses under the $15 million size standard won 263 geographic area
licenses in the 900 MHz SMR band. The 800 MHz SMR auction for the upper
200 channels was conducted in 1997. Ten bidders claiming that they
qualified as small businesses under the $15 million size standard won
38 geographic area licenses for the upper 200 channels in the 800 MHz
SMR band. A second auction for the 800 MHz band was conducted in 2002
and included 23 BEA licenses. One bidder claiming small business status
won five licenses.
119. The auction of the 1,053 800 MHz SMR geographic area licenses
for the General Category channels was conducted in 2000. Eleven bidders
won 108 geographic area licenses for the General Category channels in
the 800 MHz SMR band qualified as small businesses under the $15
million size standard. In an auction completed in 2000, a total of
2,800 Economic Area licenses in the lower 80 channels of the 800 MHz
SMR service were awarded. Of the 22 winning bidders, 19 claimed small
business status and won 129 licenses. Thus, combining all three
auctions, 40 winning bidders for geographic licenses in the 800 MHz SMR
band claimed status as small business.
120. In addition, there are numerous incumbent site-by-site SMR
licensees and licensees with extended implementation authorizations in
the 800 and 900 MHz bands. The Commission does not know how many firms
provide 800 MHz or 900 MHz geographic area SMR pursuant to extended
implementation authorizations, nor how many of these providers have
annual revenues of no more than $15 million. One firm has over $15
million in revenues. In addition, the Commission does not know how many
of these firms have 1500 or fewer employees. The Commission assumes,
for purposes of this analysis, that all of the remaining existing
extended implementation authorizations are held by small entities, as
that small business size standard is approved by the SBA.
121. Cellular Radiotelephone Service. Auction 77 was held to
resolve one group of mutually exclusive applications for Cellular
Radiotelephone Service licenses for unserved areas in New Mexico.
Bidding credits for designated entities were not available in Auction
77. In 2008, the Commission completed the closed auction of one
unserved service area in the Cellular Radiotelephone Service,
designated as Auction 77. Auction 77 concluded with one provisionally
winning bid for the unserved area totaling $25,002.
122. Private Land Mobile Radio (PLMR). PLMR systems serve an
essential role in a range of industrial, business, land transportation,
and public safety activities. These radios are used by companies of all
sizes operating in all U.S. business categories, and are often used in
support of the licensee's primary (non-telecommunications) business
operations. For the purpose of determining whether a licensee of a PLMR
system is a small business as defined by the SBA, the Commission uses
the broad census category, Wireless Telecommunications Carriers (except
Satellite). This definition provides that a small entity is any such
entity employing no more than 1,500 persons. The Commission does not
require PLMR licensees to disclose information about number of
employees, so the Commission does not have information that could be
used to determine how many PLMR licensees constitute small entities
under this definition. The Commission notes that PLMR licensees
generally use the licensed facilities in support of other business
activities, and therefore, it would also be helpful to assess PLMR
licensees under the standards applied to the particular industry
subsector to which the licensee belongs.
123. As of March 2010, there were 424,162 PLMR licensees operating
921,909 transmitters in the PLMR bands below 512 MHz. The Commission
notes that any entity engaged in a commercial activity is eligible to
hold a PLMR license, and that any revised rules in this context could
therefore potentially impact small entities covering a great variety of
industries.
124. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small businesses specific to the Rural Radiotelephone
Service. A significant subset of the Rural Radiotelephone Service is
the Basic Exchange Telephone Radio System (BETRS). In the present
context, the Commission will use the SBA's small business size standard
applicable to Wireless Telecommunications Carriers (except Satellite),
i.e., an entity employing no more than 1,500 persons. There are
approximately 1,000 licensees in the Rural Radiotelephone Service, and
the Commission estimates that there are 1,000 or fewer small entity
licensees in the Rural Radiotelephone Service that may be affected by
the rules and policies proposed herein.
125. Broadband Radio Service and Educational Broadband Service.
Broadband Radio Service systems, previously referred to as Multipoint
Distribution Service (MDS) and Multichannel Multipoint Distribution
Service (MMDS) systems, and ``wireless cable,'' transmit video
programming to subscribers and provide two-way high speed data
operations using the microwave frequencies of the Broadband Radio
Service (BRS) and Educational Broadband Service (EBS) (previously
referred to as the Instructional Television Fixed Service (ITFS)). In
connection with the 1996 BRS auction, the Commission established a
small business size standard as an entity that had annual average gross
revenues of no more than $40 million in the previous three calendar
years. The BRS auctions resulted in 67 successful bidders obtaining
licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67
auction winners, 61 met the definition of a small business. BRS also
includes licensees of stations authorized prior to the auction. At this
time, the Commission estimates that of the 61 small business BRS
auction winners, 48 remain small business licensees. In addition to the
48 small businesses that hold BTA authorizations, there are
approximately 392 incumbent BRS
[[Page 69391]]
licensees that are considered small entities. After adding the number
of small business auction licensees to the number of incumbent
licensees not already counted, the Commission finds that there are
currently approximately 440 BRS licensees that are defined as small
businesses under either the SBA or the Commission's rules. The
Commission has adopted three levels of bidding credits for BRS: (i) A
bidder with attributed average annual gross revenues that exceed $15
million and do not exceed $40 million for the preceding three years
(small business) is eligible to receive a 15 percent discount on its
winning bid; (ii) a bidder with attributed average annual gross
revenues that exceed $3 million and do not exceed $15 million for the
preceding three years (very small business) is eligible to receive a 25
percent discount on its winning bid; and (iii) a bidder with attributed
average annual gross revenues that do not exceed $3 million for the
preceding three years (entrepreneur) is eligible to receive a 35
percent discount on its winning bid. In 2009, the Commission conducted
Auction 86, which offered 78 BRS licenses. Auction 86 concluded with
ten bidders winning 61 licenses. Of the ten, two bidders claimed small
business status and won 4 licenses; one bidder claimed very small
business status and won three licenses; and two bidders claimed
entrepreneur status and won six licenses.
126. In addition, the SBA's Cable Television Distribution Services
small business size standard is applicable to EBS. There are presently
2,032 EBS licensees. All but 100 of these licenses are held by
educational institutions. Educational institutions are included in this
analysis as small entities. Thus, the Commission estimates that at
least 1,932 licensees are small businesses. Since 2007, Cable
Television Distribution Services have been defined within the broad
economic census category of Wired Telecommunications Carriers; that
category is defined as follows: ``This industry comprises
establishments primarily engaged in operating and/or providing access
to transmission facilities and infrastructure that they own and/or
lease for the transmission of voice, data, text, sound, and video using
wired telecommunications networks. Transmission facilities may be based
on a single technology or a combination of technologies.'' The SBA
defines a small business size standard for this category as any such
firms having 1,500 or fewer employees. To gauge small business
prevalence for these cable services the Commission must, however, use
current census data that are based on the previous category of Cable
and Other Program Distribution and its associated size standard; that
size standard was: all such firms having $13.5 million or less in
annual receipts. According to Census Bureau data for 2002, there were a
total of 1,191 firms in this previous category that operated for the
entire year. Of this total, 1,087 firms had annual receipts of under
$10 million, and 43 firms had receipts of $10 million or more but less
than $25 million. Thus, the majority of these firms can be considered
small.
127. Internet Service Providers (ISPs). The 2007 Economic Census
places ISPs, whose services might include voice over Internet protocol
(VoIP), in either of two categories, depending on whether the service
is provided over the provider's own telecommunications connections
(e.g., cable and DSL ISPs), or over client-supplied telecommunications
connections (e.g., dial-up ISPs). The former are within the category of
Wired Telecommunications Carriers, which has an SBA small business size
standard of 1,500 or fewer employees. The latter are within the
category of All Other Telecommunications, which has a size standard of
annual receipts of $25 million or less. The most current Census Bureau
data for all such firms, however, are the 2002 data for the previous
census category called Internet Service Providers. That category had a
small business size standard of $21 million or less in annual receipts,
which was revised in late 2005 to $23 million. The 2002 data show that
there were 2,529 such firms that operated for the entire year. Of
those, 2,437 firms had annual receipts of under $10 million, and an
additional 47 firms had receipts of between $10 million and
$24,999,999. Consequently, the Commission estimates that the majority
of ISP firms are small entities.
128. The ISP industry has changed dramatically since 2002. The 2002
data cited above may therefore include entities that no longer provide
Internet access service and may exclude entities that now provide such
service. To ensure that this IRFA describes the universe of small
entities that our action might affect, the Commission discusses in turn
several different types of entities that might be providing Internet
access service.
129. The Commission notes that, although the Commission has no
specific information on the number of small entities that provide
Internet access service over unlicensed spectrum, it includes these
entities in the IRFA.
4. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
130. The Mobility Fund Notice of Proposed Rulemaking seeks public
comment on creation of a new Mobility Fund within the high-cost
mechanism of the federal universal service program. The Mobility fund
would make available non-recurring support to providers to deploy 3G or
better networks where these services are not currently available. The
proposed Mobility Fund would use market mechanisms--specifically, a
reverse-auction--to compare all offers to provide service across the
unserved areas eligible for participation in the Mobility Fund program.
131. In proposing the Mobility Fund, the Commission seeks comment
on various reporting, record-keeping, and other compliance requirements
for the parties that will be applying for and receiving support from
the Mobility Fund. The Mobility Fund Notice of Proposed Rulemaking
proposes, for example, that parties interested in participating in a
Mobility Fund auction must disclose certain information, such as their
ownership, before participating the auction. The Mobility Fund Notice
of Proposed Rulemaking proposes that auction winners be required to
provide more detailed information, including project descriptions and
timetables. The parties receiving support would be subject to certain
reporting requirements demonstrating a certain level of network quality
of service and reasonably comparable rates, and would need to provide,
in annual reports, data from drive tests showing mobile transmissions
to and from the network meeting or exceeding certain minimum standards.
The Mobility Fund Notice of Proposed Rulemaking also proposes a five-
year record retention period, consistent with the record retention
period for other universal service high-cost support.
132. Because the overall design and scope of the Mobility Fund have
not been finalized, the Commission does not have a more specific
estimate of potential reporting, recordkeeping, and compliance burdens
on small businesses. The Commission anticipates that commenters will
address the reporting, record-keeping, and other compliance proposals
made in the Mobility Fund Notice of Proposed Rulemaking, and will
provide reliable information on any costs and burdens on small
businesses for inclusion in the record of this proceeding.
[[Page 69392]]
5. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
133. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.
134. The reporting, recordkeeping, and other compliance
requirements in this Mobility Fund Notice of Proposed Rulemaking could
have an impact on both small and large entities. However, even though
the impact may be more financially burdensome for smaller entities, the
Commission believes the impact of such requirements is outweighed by
the benefit of providing the additional USF support necessary to make
advanced wireless services available to areas of the nation that are
currently unserved. Further, these requirements are necessary to ensure
that the statutory goals of 47 U.S.C. 254 are met without waste, fraud,
or abuse.
135. The Commission expects to consider the economic impact on
small entities, as identified in comments filed in response to the
Mobility Fund Notice of Proposed Rulemaking, in reaching its final
conclusions and taking action in this proceeding.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
136. None.
List of Subjects in 47 CFR Parts 0, 1 and 54
Administrative practice and procedure, Competitive bidding,
Telecommunications, Reporting and recordkeeping requirements.
Federal Communications Commission.
Bulah P. Wheeler,
Deputy Manager.
Proposed Rules
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR parts 0, 1 and 54 to
read as follows:
PART 0--COMMISSION ORGANIZATION
1. The authority citation for part 0 continues to read as follows:
Authority: Sec. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155,
225, unless otherwise noted.
2. Amend Sec. 0.131 by adding subparagraph (r) to read as follows:
Sec. 0.131 Functions of the Bureau
* * * * *
(r) Serves as the Commission's principal policy and administrative
staff resource with respect to competitive bidding to distribute
universal service support for wireless telecommunications and related
services through the Mobility Fund. Develops, recommends and
administers policies, programs, rules and procedures concerning
competitive bidding to distribute universal service support for
wireless telecommunications and related services through the Mobility
Fund.
PART 1--PRACTICE AND PROCEDURE
3. The authority citation for part 1 continues to read as follows:
Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(j), 160,
201, 225, 303, and 309.
4. Add Subpart AA to read as follows:
Subpart AA--Competitive Bidding for Universal Service Support
Available through the Mobility Fund
Sec.
1.21000 Purpose.
1.21001 Participation in competitive bidding to apply for mobility
fund support.
1.21002 Communications prohibited during the competitive bidding
process.
1.21003 Competitive bidding process.
1.21004 Applying for mobility fund support.
Sec. 1.21000 Purpose.
This subpart sets forth procedures for competitive bidding to
determine the recipients of universal service support available through
the Mobility Fund and the amount(s) of support that they may receive,
subject to post-auction procedures established by the Commission.
Sec. 1.21001 Participation in competitive bidding to apply for
mobility fund support.
(a) Public notice of the application process. When conducting
competitive bidding pursuant to this subpart, the Commission shall by
Public Notice announce the dates and procedures for submitting
applications to participate in related competitive bidding.
(b) Application contents. All parties submitting applications to
participate in competitive bidding pursuant to this subpart must
provide the following information in their application in a form
acceptable to the Commission.
(1) The identity of the applicant, i.e., the party seeking Mobility
Fund support, including any information that the Commission may require
regarding parties that have an ownership or other interest in the
applicant.
(2) The identities of up to three individuals designated to bid on
behalf of the applicant.
(3) The identities of all real parties in interest to any
agreements relating to the participation of the applicant in the
competitive bidding.
(4) Certification that the application discloses all real parties
in interest to any agreements involving the applicant's participation
in the competitive bidding.
(5) Certification that the applicant, any party capable of
controlling the applicant, and any related party with information
regarding the applicant's planned or actual participation in the
competitive bidding will not communicate any information regarding the
applicant's planned or actual participation in the competitive bidding
to any other party with an interest in any other applicant until after
the post-auction deadline for winning bidders to submit long-form
applications for Mobility Fund support, unless the Commission by Public
Notice announces a different deadline.
(6) Certification that the applicant is in compliance with any and
all statutory or regulatory requirements for receiving universal
service support from the Mobility Fund. The Commission may elect to
accept as sufficient the applicant's demonstration in its application
that the applicant will be in compliance at a point in time designated
by the Commission.
(7) Such additional information as the Commission may require.
(c) Demonstration of financial qualification. The Commission may
require as a prerequisite to participating in competitive bidding
pursuant to this subpart that applicants demonstrate their financial
qualifications or commitment to provide supported services by
depositing funds, posting performance bonds, or any other means the
Commission considers appropriate.
(d) Application processing. (1) Commission staff shall review any
application submitted during the period for submission and before the
deadline for submission for completeness and compliance with the
Commission's rules. No applications submitted at any
[[Page 69393]]
other time shall be reviewed or considered.
(2) The Commission shall not permit any applicant to participate in
competitive bidding pursuant to this subpart to do so if, as of the
deadline for submitting applications, the application does not
adequately identify the applicant or does not include required
certifications.
(3) The Commission shall not permit any applicant to participate in
competitive bidding pursuant to this subpart to do so if, as of the
applicable deadline, the applicant has not provided any required
demonstration of financial qualifications that the Commission has
required.
(4) The Commission shall not permit applicants to make any major
modifications to their applications after the deadline for submitting
applications. The Commission shall not permit applicants to participate
in the competitive bidding if their applications require major
modifications to be made after deadline for submitting applications.
Major modifications include but are not limited to any changes to the
identity of the applicant or to the certifications required in the
application.
(5) The Commission may permit applicants to make minor
modifications to their applications after the deadline for submitting
applications. The Commission may establish deadlines for making some or
all permissible modifications to applications and may permit some or
all permissible modifications to be made at any time. Minor
modifications include correcting typographical errors in the
application and supplying non-material information that was
inadvertently omitted or was not available at the time the application
was submitted.
(6) After receipt and review of the applications, the Commission
shall by Public Notice identify all applicants that may participate in
an auction conducted pursuant to this subpart.
Sec. 1.21002 Communications prohibited during the competitive bidding
process.
(a) Prohibited communications. Each applicant, each party capable
of controlling an applicant, and each party related to an applicant
with information regarding an applicant's planned or actual
participation in the competitive bidding is prohibited from
communicating any information regarding the applicant's planned or
actual participation in the competitive bidding to any other party with
an interest in any other applicant to participate in the competitive
bidding from the deadline for submitting applications to participate in
the competitive bidding until after the post-auction deadline for
winning bidders to submit long-form applications for Mobility Fund
support, unless the Commission by Public Notice announces a different
deadline.
(b) Duty to report potentially prohibited communications. Any
applicant or related party receiving communications that may be
prohibited under this rule shall report the receipt of such
communications to the Commission.
(c) Procedures for reporting potentially prohibited communications.
The Commission may by Public Notice establish procedures for parties to
report the receipt of communications that may be prohibited under this
rule.
Sec. 1.21003 Competitive bidding process.
(a) Public notice of competitive bidding procedures. The Commission
shall by Public Notice establish detailed competitive bidding
procedures any time it conducts competitive bidding pursuant to this
subpart.
(b) Competitive bidding procedures. The Commission may conduct
competitive bidding pursuant to this subpart using any of the
procedures described below.
(1) The Commission may establish procedures for limiting the public
availability of information regarding applicants, applications, and
bids during a period of time covering the competitive bidding process.
The Commission may by Public Notice establish procedures for parties to
report the receipt of non-public information regarding applicants,
applications, and bids during any time the Commission has limited the
public availability of the information during the competitive bidding
process.
(2) The Commission may sequence or group multiple items subject to
bidding, such as multiple geographic areas eligible for Mobility Fund
support, and may conduct bidding either sequentially or simultaneously.
(3) The Commission may establish procedures for bidding on
individual items and/or for combinations or packages of items.
(4) The Commission may establish reserve prices, either for
discrete items or combinations or packages of items, which may be made
public or kept non-public during a period of time covering the
competitive bidding process.
(5) The Commission may prescribe the form and time for submitting
bids and may require that bids be submitted remotely, by telephonic or
electronic transmission, or in person.
(6) The Commission may prescribe the number of rounds during which
bids may be submitted, whether one or more, and may establish
procedures for determining when no more bids will be accepted.
(7) The Commission may require a minimum level of bidding activity.
(8) The Commission may establish acceptable bid amounts at the
opening of and over the course of bidding.
(9) The Commission may establish procedures for comparing and
ranking bids and determining the winning bidders that may become
recipients of universal service support available through the Mobility
Fund and the amount(s) of support that they may receive, subject to
post-auction procedures established by the Commission.
(10) The Commission may permit bidders to withdraw bids and, if so,
establish procedures for doing so.
(11) The Commission may delay, suspend or cancel bidding before or
after bidding begins for any reason that affects the fair and efficient
conduct of the bidding, including natural disasters, technical
failures, administrative necessity or any other reason.
(c) Apportioning package bids. If the Commission elects to accept
bids for combinations or packages of items, the Commission may provide
a methodology for apportioning such bids to discrete items within the
combination or package when a discrete bid on an item is required to
implement any Commission rule.
(d) Public notice of competitive bidding results. After the
conclusion of competitive bidding, the Commission shall by Public
Notice identify the winning bidders that may become recipients of
universal service support available through the Mobility Fund and the
amount(s) of support that they may receive, subject to post-auction
procedures established by the Commission.
Sec. 1.21004 Applying for mobility fund support.
Winning bidders that fail to substantially comply with the
requirements for filing the post-auction long-form application by the
applicable deadline shall be in default on their bids and subject to
such measures as the Commission may provide, including but not limited
to disqualification from future competitive bidding pursuant to this
subpart.
PART 54--UNIVERSAL SERVICE
5. The authority citation for Part 54 continues to read as follows:
[[Page 69394]]
Authority: 47 U.S.C. 151, 154(i), 201, 205, 254 unless
otherwise noted.
6. Add Subpart L to read as follows:
Subpart L--Mobility Fund
Sec.
54.1001 Mobility Fund.
54.1002 Geographic areas eligible for support.
54.1003 Provider eligibility.
54.1004 Application process.
54.1005 Performance requirements.
54.1006 Mobility Fund disbursements.
54.1007 Audits.
Sec. 54.1001 Mobility Fund.
The Commission may designate reserves accumulated in the Universal
Service Fund to be made available through the Mobility Fund. The
Commission may use competitive bidding, as provided in Part 1, Subpart
AA, to determine the recipients of support available through the
Mobility Fund and the amount(s) of support that they may receive for
specific geographic areas, subject to post-auction procedures
established by the Commission.
Sec. 54.1002 Geographic areas eligible for support.
(a) Mobility Fund support may be made available for specific
geographic areas identified by the Commission.
(b) The Commission may assign relative coverage units to each
identified geographic area in connection with conducting competitive
bidding and disbursing support.
Sec. 54.1003 Provider eligibility.
(a) A party applying for Mobility Fund support must be designated
an Eligible Telecommunications Carrier for an area that includes
geographic area(s) with respect to which it applies for Mobility Fund
support.
(b) A party applying for Mobility Fund support must, in a form
specified by the Commission, hold or otherwise have access to a
Commission authorization to provide spectrum-based services such that
it is capable of satisfying performance requirements in the geographic
area with respect to which it applies.
(c) A party applying for Mobility Fund support must certify that is
financially, technically, and legally qualified to provide the
supported mobile services.
Sec. 54.1004 Application process.
(a) Application deadline. Unless otherwise provided by Public
Notice, winning bidders for Mobility Fund support must file a long-form
application for Mobility Fund support within 10 business days of the
Public Notice identifying them as eligible to apply.
(b) Application contents. (1) Identification of the party seeking
the support.
(2) Information the Commission may require to demonstrate that the
applicant is legally, technically and financially qualified to receive
support from the Mobility Fund, including but not limited to proof of
its designation as an Eligible Telecommunications Carrier for an area
that includes the area with respect to which support is requested and
identification of its authorization to provide spectrum-based services
in the area with respect to which support is requested.
(3) Disclosure of all parties with a controlling interest in the
applicant and any party with a greater than ten percent ownership
interest in the applicant, whether held directly or indirectly.
(4) A detailed project description that describes the network,
identifies the proposed technology, demonstrates that the project is
technically feasible, and describes each specific development phase of
the project, e.g., network design phase, construction period,
deployment and maintenance period.
(5) Certifications that the applicant has available funds for all
project costs that exceed the amount of support to be received from the
Mobility Fund and that the applicant will comply with all program
requirements.
(6) Any guarantee of performance that the Commission may require by
Public Notice or other proceedings, including but not limited to,
letters of credit, performance bonds, or demonstration of financial
resources.
(c) Application processing. (1) No application will be considered
unless it has been submitted during the period specified by Public
Notice. No applications submitted or demonstrations made at any other
time shall be accepted or considered.
(2) The Commission shall deny any application that, as of the
submission deadline, either does not adequately identify the party
seeking support or does not include required certifications.
(3) After reviewing applications submitted, the Commission may
afford an opportunity for parties to make minor modifications to amend
applications or correct defects noted by the applicant, the Commission,
or other parties. Minor modifications include correcting typographical
errors in the application and supplying non-material information that
was inadvertently omitted or was not available at the time the
application was submitted.
(4) The Commission shall deny all applications to which major
modifications are made after the deadline for submitting applications.
Major modifications include any changes to the identity of the
applicant or to the certifications required in the application.
(5) After receipt and review of the applications, the Commission
shall release a Public Notice identifying all applications that have
been granted and the parties that are eligible to receive Mobility Fund
support.
Sec. 54.1005 Performance requirements.
(a) Parties receiving Mobility Fund support shall submit to the
Commission annual reports for ten years after they qualify for support.
The annual reports shall include:
(1) Electronic Shapefiles site coverage plots illustrating the area
reached by new services at a minimum scale of 1:240,000;
(2) A list of relevant census blocks previously deemed unserved,
with total resident population and resident population residing in
areas reached by new services (based on Census Bureau data and
estimates);
(3) A report regarding the services advertised to the population in
those areas;
(4) Data received or used from drive tests analyzing network
coverage for mobile services in the area for which support was
received.
(b) No later than two months after a site begins providing service
or two years after receiving Mobility Fund support, parties receiving
the support shall submit to the Commission data from drive tests
covering the area for which support was received demonstrating mobile
transmissions supporting voice and data to and from the network meeting
or exceeding the following:
(1) Outdoor minimum of 200 kbps uplink and 768 kbps downlink at
vehicle speeds up to 70 MPH;
(2) Achieved with 90% coverage area probability at a sector loading
of 70%.
(c) Drive tests submitted in compliance with this section shall
cover all Interstate, U.S. routes, and State routes in the area for
which support was received and any other roads deemed essential for
mobile service by the State Agency regulating the provision of
telecommunications services in that area.
Sec. 54.1006 Mobility Fund disbursements.
(a) Mobility Fund support shall be disbursed to recipients in three
stages, as follows:
(1) One-third of the total possible support, if coverage were to be
extended to 100 percent of the units deemed
[[Page 69395]]
unserved in the geographic area, when a recipient's long-form
application for support with respect to a geographic area is deemed
approved.
(2) One-third of the total possible support with respect to a
specific geographic area when a recipient files a report demonstrating
coverage of 50 percent of the units in that area previously deemed
unserved.
(3) The remainder of the total possible support when a recipient
files a report demonstrating coverage of 100 percent of the units in
that area previously deemed unserved.
(b) If the Commission concludes for any reason that coverage of 100
percent of the units in the geographic area previously deemed unserved
will not be achieved, the Commission instead may provide support based
on the final total units covered in that area. In such circumstances,
the final disbursement will be the difference between the total amount
of support based on the final units covered in that area and any
support previously received with respect to that area. Parties
accepting a final disbursement for a specific geographic area based on
coverage of less than 100 percent of the units in the area previously
deemed unserved waive any claim for the remainder of support for which
they previously were eligible with respect to that area.
Sec. 54.1007 Audits.
(a) Parties receiving Mobility Fund support are subject to random
compliance audits and other investigations to ensure compliance with
program rules and orders.
(b) Parties receiving Mobility Fund support and their agents are
required to retain any documentation prepared for or in connection with
the recipient's Mobility Fund support for a period of not less than 5
years. All such documents shall be made available upon request to the
Commission's Office of Managing Director, Wireless Telecommunications
Bureau, Wireline Competition Bureau, Office of Inspector General, and
the Universal Service Fund Administrator, and their auditors.
[FR Doc. 2010-28535 Filed 11-10-10; 8:45 am]
BILLING CODE 6712-01-P