[Federal Register Volume 77, Number 157 (Tuesday, August 14, 2012)]
[Rules and Regulations]
[Pages 48453-48459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-19761]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket Nos. 03-109, 05-337, 07-135, 10-90; CC Docket Nos. 96-45, 
01-92; GN Docket No. 09-51; WT Docket No. 10-208; FCC 12-82]


Connect America Fund; High-Cost Universal Service Support; 
Universal Service Reform--Mobility Fund

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for reconsideration.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) reconsiders certain aspects of the USF/ICC Transformation 
Order in response to various petitions for reconsideration and/or 
clarification.

DATES: Effective September 13, 2012.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,

[[Page 48454]]

Auctions and Spectrum Access Division: call Sayuri Rajapakse at (202) 
418-0660.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Fourth 
Order on Reconsideration (USF-ICC Fourth Order on Reconsideration) in 
WC Docket Nos. 10-90, 07-135, 05-337, 03-109; GN Docket No. 09-51; CC 
Docket Nos. 01-92, 96-45; WT Docket No. 10-208; FCC 12-82, released on 
July 18, 2012. The complete text of this document, including an 
attachment and related Commission documents, is available for public 
inspection and copying from 8:00 a.m. to 4:30 p.m. Eastern Time (ET) 
Monday through Thursday or from 8:00 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 USF-ICC Fourth Order on Reconsideration 
and related Commission documents also 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 12-82. The USF-ICC Fourth Order on Reconsideration and related 
documents also are available on the Internet at the Commission's Web 
site: http://wireless.fcc.gov, or by using the search function for 
Dockets: WC 03-109, 05-337, 07-135, 10-90; CC 96-45, 01-92; GN 09-51; 
WT 10-208 on the Commission's Electronic Comment Filing System (ECFS) 
web page at http://www.fcc.gov/cgb/ecfs/.
    1. In the USF-ICC Fourth Order on Reconsideration, the Federal 
Communications Commission (Commission) reconsiders and clarifies 
certain aspects of the USF/ICC Transformation Order 76 FR 73830, 
November 29, 2011 and 76 FR 81562, December 28, 2011, in response to 
various petitions for reconsideration and/or clarification. The USF/ICC 
Transformation Order represents a careful balancing of policy goals, 
equities, and budgetary constraints. This balance was required in order 
to advance the fundamental goals of universal service and intercarrier 
compensation reform within a defined budget while simultaneously 
providing sufficient transitions for stakeholders to adapt. As a 
preliminary matter, the Commission observes that, under its rules, if a 
petition for reconsideration simply repeats arguments that were 
previously considered and rejected in the proceeding, it will not 
likely warrant reconsideration.
    2. With this standard in mind, the Commission takes several limited 
actions stemming from reconsideration petitions. Specifically, the 
Order: (1) Affirms the Commission's adoption of a reverse auction 
mechanism; (2) Denies requests to link funding from Mobility Fund Phase 
I and Phase II and to condition the use of funds by precluding the use 
of Mobility Fund Phase I funding for the construction of middle mile 
facilities in certain cases; (3) Denies requests seeking changes to the 
eligibility requirements for Mobility Fund Phase I, including proposals 
to: (i) restrict or prohibit Tier I carriers from receiving Mobility 
Fund Phase I support, (ii) hold applications for eligible 
telecommunications carrier (ETC) status in abeyance pending completion 
of the auction and then automatically qualify any winning bidder as an 
ETC, (iii) deem an entity designated solely as a Lifeline-only ETC to 
be eligible to participate in the Mobility Fund without first obtaining 
general ETC status, and (iv) clarify that unlicensed spectrum may be 
used to meet the spectrum access requirements for Mobility Fund Phase 
I; (4) Rejects, for purposes of the auction of Mobility Fund Phase I 
support, arguments that the Commission provide for bidding preferences 
to small or rural entities and extend eligibility for the Tribal lands 
bidding credit to entities that are not Tribally-owned or controlled; 
and (5) Declines to adopt a series of performance requirements 
concerning the upgradability of systems, roaming requirements and 
rates, and exclusive handset arrangements and to use this proceeding to 
amend the service rules for Advanced Wireless Service in the 2155-2175 
MHz band.

I. Mobility Fund Phase I

A. Use of Auction To Determine Awards of Support

    3. The Blooston Rural Carriers (Blooston) seek reconsideration of 
the Commission's decision to use a reverse auction format to distribute 
Mobility Fund Phase I support. Blooston reiterates the position it took 
prior to adoption of the USF/ICC Transformation Order, alleging that 
reverse auctions could lead to construction and equipment quality 
short-cuts that ultimately could require larger disbursements of high-
cost support. Instead, Blooston urges the Commission to award support 
based on a qualitative analysis, to ensure that support is awarded to 
carriers that have a legitimate interest in building and maintaining 
high-quality services, such as rural carriers. Blooston contends that 
the USF/ICC Transformation Order did not adequately address concerns 
raised by it and other carriers about the effects of the reverse 
auction format on small rural wireless carriers, and was therefore 
arbitrary and capricious. Blooston argues that the reverse auction 
model is vulnerable to gaming strategies and anti-competitive bidding 
practices that would unfairly benefit larger carriers.
    4. The Commission addressed Blooston's arguments in the USF/ICC 
Transformation Order, and rejected the arguments by those, including 
Blooston, who claimed that a reverse auction format would allow larger 
carriers to bid more competitively than smaller providers. The 
Commission determined that both the auction design and natural 
advantages of carriers with existing investments in networks in rural 
areas should provide opportunities for smaller providers to compete 
effectively at auction. The Commission rejected assertions that reverse 
auctions unduly harm small businesses, finding that the examples cited 
by commenters merely illustrated issues in implementing specific 
reverse auction programs, and did not demonstrate that reverse auctions 
are inherently biased against small businesses.
    5. The Commission is unpersuaded by Blooston's claim that the only 
way to effectively encourage high-quality expansion into unserved areas 
is to ensure that Mobility Fund Phase I support is distributed based on 
a qualitative analysis of prospective carriers. As the Commission 
concluded in the USF/ICC Transformation Order, for purposes of Mobility 
Fund Phase I, the difficulty in appropriately weighting differences in 
services provided outweigh the benefits that might be gained from such 
an approach. The Commission decided that a reverse auction is the best 
available tool for awarding support to eligible areas quickly and 
effectively. A well-designed system of competitive bidding will target 
support to those providers in an area that can meet the program 
requirements most cost-effectively. The bidding process will use 
competition among potential awardees to identify a support amount at 
which the bidder will commit to provide the required services, and 
below which no other competitor is willing to do so, thus minimizing 
the cost to the program. The qualitative proposal advanced by Blooston, 
in contrast, would require a subjective and time-consuming evaluation 
of a variety of factors that could result in delayed broadband

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deployment to unserved communities, would be much less likely to ensure 
that the Commission's limited support funds are disbursed as 
effectively as possible, and would require at least as much enforcement 
to ensure that consumers receive the desired broadband.
    6. In response to Blooston's claim that the reverse auction format 
could lead to short-cuts in construction and equipment quality, the 
Commission emphasized that it would, and in fact did establish clear 
performance standards, and would effectively enforce them. Blooston's 
assertion that no such standards have been adopted is therefore 
incorrect. The Commission in the USF/ICC Transformation Order adopted a 
series of rigorous performance metrics for recipients of Mobility Fund 
Phase I funding, requiring them to provide mobile supported services 
over a 3G or better network that has achieved particular data rates 
under particular conditions and required submission of drive test data 
to demonstrate support recipients' compliance with their public 
interest obligation to provide mobile broadband. The Commission imposed 
a range of additional requirements on Mobility Fund Phase I recipients, 
including collocation and voice and data roaming, and established 
reporting requirements. Moreover, the Commission's requirement that 
support recipients maintain a Letter of Credit, along with traditional 
enforcement tools, helps to protect the government's interests in the 
funds it disburses and to ensure that performance obligations are met. 
In short, Blooston's petition contains no new arguments or data that 
would cause the Commission to reconsider the adoption of the reverse 
auction format for the distribution of Mobility Fund Phase I support. 
Accordingly, the Commission rejects Blooston's claim that adoption of 
the reverse auction format was arbitrary or capricious, and the 
Commission affirms its conclusion that the auction mechanism adopted in 
the USF/ICC Transformation Order, coupled with eligibility and 
performance requirements, best ensures that mobile broadband is 
deployed quickly to unserved areas by well-qualified carriers.

B. Scope and Use of Mobility Fund Support

    7. NTCH, Inc. (NTCH) requests that the Commission link Phase I and 
Phase II funding to plan for the construction and ongoing operating 
costs of providing service in high cost areas. NTCH notes that ongoing 
support may be necessary to sustain service in areas eligible for one-
time assistance and that prospective bidders should know in advance 
whether they will receive Phase II support before competing in Phase I. 
NTCH therefore proposes that applicants be permitted to apply for Phase 
I and Phase II in an integrated way or, alternatively, to consolidate 
funding into a single phase that covers both construction and 
operational financial needs. NTCH concludes that this approach would 
allow the Commission to more meaningfully evaluate the real costs of 
providing service and performance. NTCH also suggests that this 
approach will encourage new entrants who may be able to offer service 
for significantly less than the field of potential bidders who would 
otherwise qualify. No parties commented on this aspect of NTCH's 
petition.
    8. As the Commission noted in the USF/ICC Transformation Order, the 
goal in establishing the Mobility Fund Phase I is to provide the 
necessary ``jump start'' to immediately accelerate service to areas 
where it is cost effective to do so. It is focused on identifying 
recipients that can extend coverage with one time support and is not 
intended to target areas where ongoing support is required, even if 
such areas technically might be eligible to seek Mobility Fund Phase I 
support. By contrast, the Mobility Fund Phase II is intended to expand 
and sustain mobile voice and broadband services in communities in which 
service would be unavailable absent federal support. It contemplates a 
larger budget, payable annually over a multi-year term, to bring 
service to areas that cannot be sustained with one-time support. NTCH's 
petition does not persuade the Commission that it should forgo the 
immediate benefits that could be provided by targeted support under 
Mobility Fund Phase I to integrate or consolidate it with Mobility Fund 
Phase II. In due course, Mobility Fund Phase II will be available for 
those areas that need support over the longer-term.
    9. GCI requests that the Commission preclude use of Mobility Fund 
Phase I funding to construct middle mile facilities where adequate 
facilities are otherwise available. GCI contends that the public 
interest would not be served by allowing support recipients to expend 
support on duplicative middle mile facilities, noting that the areas to 
be served by Mobility Fund Phase I are extremely thin and it is 
therefore important to aggregate demand to the extent possible. No 
parties commented on this aspect of GCI's petition.
    10. Consistent with the Commission's overall market-based approach 
to awarding support it declines to condition Mobility Fund support in 
the manner GCI requests. The Commission notes that, as a general 
matter, the competitive bidding process adopted in the USF/ICC 
Transformation Order was designed to provide qualified recipients with 
an incentive to extend advanced mobile services in an efficient and 
cost effective manner, without prescribing any particular solution or 
limitations. The Commission anticipates that, where middle mile 
facilities are adequate and available at reasonable rates, Mobility 
Fund participants will have a strong economic incentive to use existing 
facilities to offer services, especially given the specific build out 
obligations required in Mobility Fund Phase I.

C. Eligibility for Mobility Fund Phase I Support

i. Eligibility of Tier I Carriers
    11. Blooston asserts that permitting Tier I carriers to participate 
in the Mobility Fund Phase I constitutes corporate welfare, as the 
average annual net income of such carriers purportedly demonstrates 
that they have no need for support. In addition, Blooston notes that 
the Commission previously concluded that a phase-down of the legacy 
Universal Service Fund support received by Verizon and Sprint was in 
the public interest and therefore contends that it would be contrary to 
the public interest for either of these entities to receive any new 
Mobility Fund Phase I support. Finally, Blooston contends that the 
Commission erred when it noted that a party's relinquishment of legacy 
support to meet legacy obligations should not be determinative of 
whether the party should be eligible for new support to meet new 
obligations.
    12. AT&T Inc. (AT&T) and Verizon Wireless (Verizon) both oppose 
Blooston's petition. AT&T contends that the Commission must reject out-
of-hand any requests such as this one for the Commission to use 
universal service funding to discriminate against certain providers. 
Verizon further notes that the Mobility Fund program did not exist at 
the time Verizon and Sprint committed to relinquish high-cost support.
    13. The Commission finds Blooston's arguments unpersuasive. Phase I 
of the Mobility Fund targets one-time support to areas that current 
market-based incentives have left without 3G or better mobile 
networks--even by carriers with substantial resources. Thus, in these 
areas the apparent availability of resources has not, and will not, 
inevitably lead to speedy deployment of universal coverage. As AT&T 
notes in opposition to Blooston's petition, market forces alone are 
insufficient to

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incent private investment by any provider--Tier 1 or otherwise--in 
those areas. The Commission's primary policy concern is with the 
consumers in those unserved areas who have been disadvantaged due to 
the lack of current generation mobile broadband networks. By permitting 
all qualified providers to participate in this reverse auction, the 
Commission expects that its limited USF dollars will be used more 
efficiently and effectively to construct mobile broadband networks to 
cover more unserved areas.
    14. Blooston's assertion that the phase-down commitments of Verizon 
and Sprint should make them ineligible for Mobility Fund Phase I 
support so as not to undo the benefits reaped from their withdrawal is 
also unpersuasive. The Commission concluded that such limitations under 
past mechanisms should not carry over to the newly reformed support 
mechanisms, such as the Mobility Fund, and the Commission will not 
disturb that conclusion. A decision that a party should not continue to 
receive support available under the former identical support rule does 
not lead to a conclusion that the same party cannot be a recipient of 
more efficiently allocated targeted support under new mechanisms with 
additional public interest obligations.
ii. ETC Designation
    15. NTCH states that the Commission should hold in abeyance 
applications for eligible telecommunications carrier (ETC) status 
pending the completion of competitive bidding for Mobility Fund support 
and then automatically qualify any party that receives Mobility Fund 
support as an ETC in the areas for which it applied. NTCH contends that 
such an approach is necessary in order to enable participation in the 
Mobility Fund. Sprint comments favorably on this request, for the most 
part re-iterating NTCH's arguments.
    16. In the USF/ICC Transformation Order, the Commission considered 
suggestions that it circumvent the existing ETC regime for purposes of 
the Mobility Fund and declined to do so. Most importantly, the 
Commission recognized that the existing ETC regime is built upon a 
statutory foundation that gives a significant role to the States as 
well as to the Commission. The Commission concluded that the Mobility 
Fund should operate within the general structure of the Universal 
Service Fund with respect to ETC designation, rather than attempt to 
replace it. The Commission recognized the concern, echoed by NTCH and 
Sprint, that the obligations that accompany ETC status might make 
parties reluctant to become ETCs in advance of learning whether they 
would receive Mobility Fund support. The Commission addressed this 
concern by permitting parties to seek ETC designation on a conditional 
basis, that is subject to their becoming a winning bidder.
    17. NTCH does not persuade the Commission to revise its original 
conclusion. As noted in the USF/ICC Transformation Order, requiring 
that applicants be designated as ETCs prior to a Mobility Fund Phase I 
auction may help ensure that the pool of bidders is serious about 
seeking support and meeting the obligations that receipt of support 
would entail. It may be true, as NTCH contends, that more parties might 
participate in the auction if the Commission simply accepted the 
applicants' asserted willingness to seek ETC status. However, that 
approach risks the possibility that parties might participate and win--
or otherwise affect the outcome of the auction--and then be found 
unqualified to be ETCs. At a minimum, this would delay any use of funds 
that had been set aside for the winning bid. This would undermine the 
Commission's objective to extend mobile broadband networks as quickly 
as possible. Consequently, consumers living, traveling, and working in 
the unserved areas would suffer, contrary to the Commission's 
objectives for Mobility Fund Phase I. NTCH's further suggestion that 
any party qualifying to receive Mobility Fund support automatically 
should be designated as an ETC ignores the role given by statute to the 
states regarding the designation of many ETCs as well as the fact that 
ETC obligations themselves go beyond the requirements for participation 
in the Mobility Fund. The Commission, however, cannot ignore the 
obligations Congress requires for ETC designations, and denies NTCH's 
request for reconsideration.
iii. Forbearance From Service Area Conformance Requirement of Section 
214(e)(5)
    18. NTCH also asks that the Commission forbear from applying the 
service area requirements of 47 U.S.C. 214(e)(5) to applicants seeking 
to become ETCs for purposes of the Mobility Fund. 47 U.S.C. 214(e)(5) 
requires that a party seeking ETC status in a service area overlapping 
a rural telephone company's study area be designated for the entire 
study area, unless the Commission and relevant State jointly redefine 
the underlying study area of the rural telephone company. The 
Commission considered NTCH's request for forbearance in the context of 
a separate Order forbearing from the application of 47 U.S.C. 214(e)(5) 
to petitions for conditional ETC designation for purposes of 
participating in the Mobility Fund Phase I auction. Accordingly, the 
Commission will not address that aspect of NTCH's petition here.
iv. Lifeline-Only ETCs
    19. NTCH seeks clarification that a party designated as a Lifeline-
only ETC can satisfy on that basis the Mobility Fund eligibility 
requirement that a participant be an ETC.
    20. The Commission denies NTCH's request. As an initial matter, 
when this Commission has designated parties as Lifeline-only ETCs, it 
has made clear that the designation is not effective for any other 
purpose. Thus, it is clear, under the terms of those orders, that these 
parties are not to be deemed ETCs for the Mobility Fund on the basis of 
their Lifeline-only designations. Moreover, many carriers designated as 
Lifeline-only ETCs do not offer service over their own facilities, or 
over a combination of their own and a third-party's facilities. It is 
not at all clear that these Lifeline-only ETCs will be in a position to 
undertake the materially different obligations that ETCs must satisfy 
in areas where they receive Mobility Fund Phase I support. The 
Commission does not have a basis in this record to conclude that states 
that have designated Lifeline-only ETCs have evaluated the capability 
of such applicants to meet the obligations associated with the receipt 
of high-cost support. Consequently, the Commission cannot draw a 
blanket conclusion that a party designated as a Lifeline-only ETC would 
be qualified to expand or deploy network facilities to meet a Mobility 
Fund recipient's public interest obligations and thus the Commission 
requires designation as an ETC generally.
v. Spectrum Access With Unlicensed Spectrum
    21. Townes Telecommunications, Inc. (Townes) requests that the 
Commission clarify that the Mobility Fund eligibility requirement of 
spectrum access can be satisfied with unlicensed spectrum used to meet 
or exceed the public interest requirements of the Mobility Fund. More 
specifically, Townes asserts that it has employed the xMax cognitive 
radio technology to provide the type of service that the Mobility Fund 
supports, and provides a link to a Web site describing the xMax 
technology. Townes also notes that the Commission has been supportive 
of the use of unlicensed spectrum in related contexts,

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such as the proposal for the Remote Areas Fund to provide fixed 
wireless service.
    22. Although the Commission supports the use of unlicensed spectrum 
for developing innovative approaches to bring new technologies to 
consumers, the Commission declines the request to clarify its rules 
regarding the use of unlicensed spectrum to meet the spectrum access 
eligibility requirement for Mobility Fund Phase I. The USF/ICC 
Transformation Order required that an applicant have access, through a 
license or lease in effect prior to the auction, to spectrum necessary 
to fulfill all obligations related to support. The Commission concluded 
that a provider's access to spectrum must support mobile broadband 
services meeting its requirements and conditions for the required 
timeframe. The Commission notes that the use of unlicensed spectrum to 
support mobility over large areas is not proven at this time.
    23. Thus, the Commission concludes that the use of unlicensed 
spectrum to meet the spectrum access eligibility requirement for 
Mobility Fund Phase I would entail a significant risk that the mobile 
services deployed on such spectrum will not meet performance 
requirements and other obligations under the rules. This does not close 
the door to the possibility that unlicensed spectrum may play a 
complementary part in the provision of services supported by the 
Mobility Fund Phase I. Nor does it prevent carriers from receiving high 
cost universal service support in other contexts for services provided 
over unlicensed spectrum, e.g., for fixed wireless broadband services 
offered over unlicensed spectrum. However, with respect to the 
Commission's current spectrum access requirement for Mobility Fund 
Phase I, the Commission rejects Townes' request to permit the use of 
unlicensed spectrum to meet this requirement.

D. Bidding Preferences

i. Preferences for Small Businesses and Rural Carriers
    24. Blooston argues that the Commission should have adopted a 
mechanism for Phase I of the Mobility Fund that assures that a 
significant portion of the Mobility Fund is awarded to small rural 
wireless carriers. Blooston suggests that small and rural carriers have 
been successful at auction only when adequate protections were 
implemented, such as substantial bid credits, set asides, and the 
exclusion of large carriers. Blooston notes that the Commission is 
obligated under 47 U.S.C. 309(j) to ensure that small businesses, rural 
telephone companies, and businesses owned by minorities and women are 
given the opportunity to participate in the provision of spectrum-based 
services and argues that the Commission should extend similar 
preferences to small and rural entities in the context of the Mobility 
Fund Phase I auction.
    25. AT&T opposes Blooston's suggestions. AT&T notes that this 
proceeding does not involve a spectrum auction and is not governed by 
the statutory provisions of 47 U.S.C. 309(j). AT&T argues that the 
Blooston proposals are inconsistent with section 254 of the 
Communications Act, which governs the universal service program. AT&T 
contends Blooston's approach would limit competition in the Mobility 
Fund Phase I auction, which could violate 47 U.S.C. 254(b)(1) and 
(b)(5)'s sufficiency and affordability objectives. AT&T disputes 
Blooston's contention that small wireless carriers are better suited to 
meet the needs of local communities because, according to Blooston, all 
winning wireless carrier bidders, large or small, will have the same 
service obligations.
    26. Blooston replies that it is irrelevant that 47 U.S.C. 254 does 
not contain small business auction preference provisions that appear in 
47 U.S.C. 309(j)(3) and (4). Blooston maintains that the Commission's 
intention to draw upon established spectrum auction procedures for the 
Mobility Fund Phase I auction calls for adoption of similar preferences 
here. Blooston cites the Universal Service principle of competitive 
neutrality, which it characterizes as requiring that the Commission 
treat no carrier `unfairly, as authority for the provision of bidding 
credits and other assistance to small carriers. Blooston asserts that 
only rural carriers would encourage the provision of service to rural 
communities not located near highways, claiming that larger carriers 
are primarily interested in providing service to the interstate 
highways and major roads on which their customers travel.
    27. The Commission rejects Blooston's contentions that it failed to 
examine the issues and concerns of small businesses and rural carriers 
as raised in the record in this proceeding. The Commission's decision 
not to establish bidding preferences for small or rural entities in the 
auction of Mobility Fund Phase I support was neither arbitrary nor 
capricious, contrary to Blooston's assertion. The Commission fully 
considered the views of Blooston and other parties responding to 
questions raised in the Mobility Fund Notice of Proposed Rulemaking 
(Mobility Fund NPRM), 75 FR 67060, November 1, 2010, about potential 
ways to encourage the participation of the widest possible range of 
qualified entities, including smaller entities. The Commission 
determined in the USF/ICC Transformation Order that reverse auctions 
are not inherently unfair to smaller carriers and that it was confident 
that the reverse auction format would enable smaller providers to 
compete effectively. Given the limited and targeted purpose of the one-
time Mobility Fund Phase I support, the Commission does not find 
persuasive Blooston's argument that its use of a reverse auction as a 
mechanism for distributing USF support requires the Commission to adopt 
special provisions for small entities, such as the small business 
bidding credits the Commission awards to fulfill the statutory mandate 
in 47 U.S.C. 309(j)(3)(B) to disseminate spectrum licenses among a wide 
variety of applicants.
ii. Expansion of Tribal Lands Bidding Credits
    28. GCI seeks reconsideration of the Commission's decision for the 
Mobility Fund Phase I auction to provide bidding credits to Tribally-
owned or controlled providers seeking support to serve the Tribal lands 
with which they are associated. GCI agrees with the Commission that 
service for Tribal lands should be prioritized, but maintains that 
bidding credits should be extended to all entities serving Tribal 
lands, not just those that are Tribally-owned or controlled. GCI 
maintains that the USF-ICC Transformation Order does not explain why 
the credits should be limited to Tribally-owned or controlled entities. 
It asserts that because many qualifying Tribal lands are not served by 
a Tribally-owned or controlled entity, these lands will be unable to 
benefit from the bidding credits. GCI further asserts that the 
exclusion of other entities from bidding credit eligibility could lead 
to inefficient operations and fragmented service, ultimately impairing 
broadband service.
    29. The Commission is not persuaded that eligibility for the Tribal 
lands bidding credit should be extended to entities that are not 
Tribally-owned or controlled providers. In adopting the Tribal lands 
bidding credit, the Commission sought to facilitate the self-
provisioning of wireless broadband service by Tribes themselves by 
providing a bidding credit to increase the likelihood that Tribally-
owned or controlled entities will receive funding. This is consistent 
with the

[[Page 48458]]

Commission's belief that encouraging Tribal-centric solutions to the 
communications needs of Tribal lands can be particularly advantageous. 
The Commission has previously found that Tribal-centric business 
models, ones that actively engage the Native Nation, its core community 
institutions, and members in deployment and adoption planning--have a 
greater chance of establishing sustainable services on Tribal lands. A 
Tribal-centric approach has enabled a number of Native Nations to 
successfully establish service providers that have deployed critical 
communications infrastructure on Tribal lands. Extending bidding 
credits to all participants in the Mobility Fund Phase I auction would 
dilute the Commission's ability to achieve this objective.

E. Performance Requirements

i. Upgradability of Systems Built With Mobility Fund Support to 4G 
Technology
    30. The Blooston Petition urges the Commission to require that 
Mobility Fund participants choosing to build 3G mobile wireless 
broadband networks, rather than 4G networks, use equipment and 
facilities capable of ready, efficient and economical conversion to 4G 
networks. Blooston argues that, with 4G service currently being rolled 
out in urban areas, it would be unreasonably inefficient and wasteful 
to use Mobility Fund support to deploy facilities and equipment that 
will soon be outmoded and need to be replaced in the immediately 
foreseeable future. Blooston argues that it would be far more efficient 
and less expensive for the Mobility Fund if the Commission required 
facilities and equipment that can be readily and economically converted 
to 4G.
    31. The Commission declines to adopt the Blooston suggestion to 
require carriers who plan to build 3G networks with Mobility Fund 
support to use equipment and facilities that can easily convert to 4G. 
Requiring upgradable 3G equipment and facilities would add an extra 
layer of regulatory review and approval. Carriers choosing to build 3G 
networks with Mobility Fund support likely already face an economic 
incentive to install equipment that can be easily converted to 4G. But 
there may be carriers whose business plans indicate that another path 
is more economical--for example, because they want to deploy the same 
equipment used in its adjacent system--and the Commission believes that 
those carriers will be in the best position to determine what equipment 
to use to meet the goals of the Mobility Fund. Imposing an additional 
regulatory requirement could limit participation in the auction or 
elicit higher bids, thereby interfering with the process the Commission 
chose to determine support, without providing clear benefits, overall, 
relative to the existing approach. Finally, the Commission notes that 
Mobility Fund Phase I recipients that choose to install 4G networks 
have an additional year to meet the performance requirements. This 
should encourage 4G build-out where reasonable. Therefore, the 
Commission finds it unnecessary to add such a requirement limiting the 
type of equipment and facilities used by Mobility Fund Phase I support 
recipients. This conclusion does not prejudge the Commission's 
consideration of similar issues for Mobility Fund Phase II.
ii. Roaming Requirement and Roaming Rates
    32. Blooston petitions the Commission to request an expansion of 
the roaming requirement that the Commission established in the USF/ICC 
Transformation Order, in order to ensure that roaming is available to 
Mobility Fund recipients throughout the United States. Blooston also 
urges adopting measures to ensure that roaming is not only available, 
but also practically affordable for small carriers. Without such a 
mandate, Blooston argues, small carriers will likely suffer losses from 
roaming arrangements since their customers often spend more time 
roaming than in their home network. AT&T opposes Blooston's call for 
additional roaming regulations, noting that the Commission already has 
voice and data roaming rules in place and arguing that further 
regulation would be not only unnecessary but also unrelated to the 
universal service objectives.
    33. NTCH also raises the issue of roaming on reconsideration, 
asking the Commission to adopt measures that will bring roaming rates 
down to rational levels. NTCH argues that, without any action on this 
issue, rural customers' ability to roam outside their home networks may 
be limited and rural carriers will need more support. NTCH asks that 
all wireless carriers should have the right to roam on reasonable 
terms, which it defines as rates that are not 700 or 800% higher than 
the rates offered by large carriers to their own customers, and rates 
that are not thousands of times higher than actual costs. NTCH argues 
that if the Commission took action against unreasonable roaming rates, 
small carriers would spend less on roaming fees and therefore would 
need less support for high cost operations.
    34. The Commission declines to expand the roaming requirements 
beyond those set forth in the USF/ICC Transformation Order. The USF/ICC 
Transformation Order required Mobility Fund recipients to comply with 
the Commission's current voice and data requirements on networks that 
are built through Mobility Fund support, and specifically made 
compliance with those rules a condition of receiving Mobility Fund 
support. To add further measures regarding roaming access and 
affordability would be beyond the scope of the present proceeding. 
Moreover, the Commission engaged in an extensive rulemaking on roaming 
issues six months prior to adopting the USF/ICC Transformation Order 
and adopted specific rules that create a general mandate for data 
roaming. The Commission noted in the USF/ICC Transformation Order that 
the Commission's existing processes would enable any interested party 
to file a formal or informal complaint if it believes that a Mobility 
Fund recipient has violated the roaming requirements. Moreover, as 
described in the roaming proceeding, Accelerated Docket procedures, 
including pre-complaint mediation, are among the various dispute 
resolution procedures available with respect to data roaming disputes. 
Finally, the Commission observed in the USF/ICC Transformation Order 
that it has authority to initiate enforcement actions on its own 
motion. Blooston and NTCH have not persuaded the Commission to revisit 
its deliberations. Therefore, The Commission denies Blooston's and 
NTCH's petitions with regard to their roaming requests.
iii. Mobility Fund Recipients and Exclusive Handset Arrangements
    35. In the Mobility Fund NPRM, the Commission sought comment on 
other eligibility requirements for entities seeking to receive support 
from the Mobility Fund and specifically inquired whether are there any 
steps the Commission should take to encourage smaller eligible parties 
to participate in the bidding for support. In its comments submitted in 
response to the Mobility Fund NPRM, Blooston suggested the Commission 
prohibit any carrier from participating in the Mobility Fund if it 
engages in exclusive arrangements for the design or procurement of 
handsets and other equipment. In the USF/ICC Transformation Order, the 
Commission declined to bar any particular class of parties out of 
concern that they might appear to be better positioned to win Mobility 
Fund support. The Blooston

[[Page 48459]]

Petition argues that the Commission's action was arbitrary and 
capricious in that it failed to specifically address the Blooston 
proposal to limit eligibility based on exclusive handset arrangements. 
Blooston claims exclusivity arrangements for handsets and equipment 
impair the service and competitive options of smaller carriers, deprive 
the customers of such smaller carriers of roaming capabilities and 
service features, and increase the cost of the mobile broadband 
services and equipment available to customers of smaller carriers. AT&T 
opposes the Blooston proposal, arguing that such a prohibition is 
nothing more than a thinly veiled effort to bar larger wireless 
providers from competing for Mobility Fund support.
    36. The rationale behind the Commission's decision not to bar any 
particular class of parties out of concern that they might appear to be 
better positioned to win Mobility Fund support, is that, in the 
Commission's view, such restrictions could impede its primary goals for 
USF reform and the Connect America Fund, generally, or the Mobility 
Fund. Specifically, these goals include the deployment of mobile 
broadband networks in currently unserved areas in as cost effective a 
manner as practicable. Blooston's argument to restrict parties who have 
entered into exclusive handset arrangements could similarly impede 
these goals of USF/ICC reform. Therefore, the Commission denies 
Blooston Petition's request that the Commission prohibit recipients of 
Mobility Fund Phase I support from utilizing exclusive arrangements for 
handsets or other equipment.
iv. Build-Out Requirements for AWS-3 Licensees
    37. In its Petition for Reconsideration of the USF/ICC 
Transformation Order, NTCH urges the Commission to amend the rules for 
Advanced Wireless Service in the 2155-2175 MHz band (AWS-3) to 
explicitly link the use of that spectrum with the build-out of unserved 
areas. As part of this, NTCH proposes barring or severely handicapping 
companies who already own significant spectrum in a given market from 
acquiring even more. NTCH asserts that current spectrum holders have 
spectrum but are not utilizing it, while other carriers cannot get more 
spectrum. Therefore, NTCH urges the Commission to skew the AWS-3 
auction in the direction of competing carriers and condition licensing 
AWS-3 on meeting the goals of Mobility Fund.
    38. CTIA opposes NTCH's proposal for AWS-3. Noting that AWS-3 rules 
are the subject of other Commission proceedings, CTIA argues that any 
modifications of them in the present proceeding would be procedurally 
improper, particularly given the absence of any notice that AWS-3 would 
be considered in the USF docket. In addition to the procedural 
considerations, CTIA finds NTCH's proposal unwise, noting that many 
parties have expressed interest in pairing the AWS-3 spectrum with 1.7 
GHz spectrum, which NTIA is currently considering reallocating from the 
Federal government to commercial use. CTIA contends that such a pairing 
would be ideal for mobile broadband, which it argues would further the 
Commission's goals for the Mobility Fund and broadband generally. Given 
its support for pairing AWS-3 and 1.7 GHz, CTIA therefore opposes what 
it terms NTCH's ``designer allocation'' of the AWS-3 spectrum.
    39. In response, NTCH acknowledges that the parameters of AWS-3 are 
still in flux, but argues that, if the AWS-3 auction would occur in the 
second half of 2013, the six to nine month delay would be ``well worth 
the savings to the public.'' NTCH adds that conditioning AWS-3 licenses 
on meeting the Mobility Fund objectives would also eliminate the post-
Mobility Fund auction application review envisioned in the USF/ICC 
Transformation Order.
    40. The Commission declines to use this proceeding to adopt service 
and auction rules for AWS-3 as NTCH suggests. NTCH's proposal focuses 
on access to spectrum, not on USF reform. The Commission agrees with 
CTIA that such rules are beyond the scope of this proceeding. Moreover, 
the goal of the Mobility Fund is to expand 3G or better service to 
unserved areas, and carriers are able to utilize various frequency 
bands so long as the spectrum will support the required services to 
meet the Mobility Fund performance requirements. Focusing Mobility Fund 
deployment on one frequency band, as NTCH proposes, would likely reduce 
the participation in the program, increase the costs of providing 
service, and therefore, decrease the area and people that will benefit 
from new service. Therefore, the Commission denies NTCH's petition with 
regard to its proposal to condition AWS-3 spectrum on meeting the 
Mobility Fund requirements.

II. Procedural Matters

A. Paperwork Reduction Act

    41. The USF-ICC Fourth Order on Reconsideration does not contain 
new or modified information collection requirements subject to the 
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, 
therefore, it does not contain any new or modified information 
collection burden for small business concerns with fewer than 25 
employees, pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198, see 44 U.S.C. 3506(c)(4).

B. Congressional Review Act

    42. The rules previously adopted in the USF/ICC Transformation 
Order were submitted to Congress and the Government Accountability 
Office pursuant to the Congressional Review Act and remain unchanged by 
this Order.

III. Ordering Clauses

    43. Accordingly, it is ordered, pursuant to the authority contained 
in 47 U.S.C. 151, 152, 154(i), 201-206, 214, 218-220, 251, 252, 254, 
256, 303(r), 332, 403, and 1302, and 47 CFR 1.1 and 1.429 that this 
Fourth Order on Reconsideration is adopted, effective thirty (30) days 
after publication in the Federal Register.
    44. It is further ordered that, pursuant to the authority contained 
in 47 U.S.C. 405 and 47 CFR 0.331 and 1.429, that the Petition for 
Partial Reconsideration filed by the Blooston Rural Carriers on 
December 29, 2011 is denied.
    45. It is further ordered that, pursuant to the authority contained 
in 47 U.S.C. 405, and 47 CFR 0.331 and 1.429, that the Petition for 
Reconsideration filed by NTCH, Inc. on December 29, 2011 is denied in 
part to the extent described herein.
    46. It is further ordered that, pursuant to the authority contained 
in 47 U.S.C. 405, and 47 CFR 0.331 and 1.429, that the Petition for 
Reconsideration filed by General Communications, Inc. on December 23, 
2011 is denied in part to the extent described herein.
    47. It is further ordered that, pursuant to the authority contained 
in 47 U.S.C. 405, and 47 CFR 0.331 and 1.429, that the Petition for 
Clarification or Partial Reconsideration filed by Townes 
Telecommunications, Inc. on December 29, 2011 is denied.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2012-19761 Filed 8-13-12; 8:45 am]
BILLING CODE 6712-01-P