[Federal Register Volume 77, Number 238 (Tuesday, December 11, 2012)]
[Proposed Rules]
[Pages 73586-73589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-29879]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[WC Docket No. 10-90; WT Docket No. 10-208; DA 12-1853]
Further Inquiry Into Issues Related to Mobility Fund Phase II
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: The Wireless Telecommunications Bureau and Wireline
Competition Bureau (collectively, the Bureaus) seek further comment on
specific issues relating to the implementation of Phase II of the
Mobility Fund. The Bureaus also seek to develop a more comprehensive
record on certain issues relating to the award of ongoing support for
advanced mobile services.
DATES: Comments are due on or before December 21, 2012, and reply
comments are due on or before January 7, 2013.
ADDRESSES: All filings in response to this public notice must refer to
Docket Numbers 10-90 and 10-208. The Bureaus strongly encourage
interested parties to file comments electronically. Comments may be
submitted by any of the following methods:
[ssquf] Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
[ssquf] Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
[ssquf] 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, Attn: WTB/ASAD, Office of the
Secretary, Federal Communications Commission.
[ssquf] All hand-delivered or messenger-delivered paper filings for
the Commission's Secretary must be delivered to FCC Headquarters at 445
12th Street 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.
[ssquf] 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.
[ssquf] People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
FOR FURTHER INFORMATION CONTACT: Sue McNeil, Auctions and Spectrum
Access Division, Wireless Telecommunications Bureau at (202) 418-0660.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Further Inquiry Into Issues Related to Mobility Fund Phase II (Mobility
Fund Phase II Public Notice) released on November 27, 2012. The
complete text of the Mobility Fund Phase II Public Notice, as well as
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 Mobility Fund Phase II Public Notice 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,
DA 12-1853.
I. Introduction
1. The Bureaus seek further comment on a limited number of specific
issues relating to the implementation of Phase II of the Mobility Fund.
As established in the USF/ICC Transformation Order and FNPRM, 76 FC
78383, December 16, 2011, in Mobility Fund Phase II the Commission will
award $500 million annually to ensure the availability of mobile
broadband and high quality voice services in certain areas. Building on
the comments previously filed in response to the USF/ICC Transformation
Order and FNPRM and the Bureaus' experience in implementing a reverse
auction to award one-time Phase I support, the Bureaus seek to develop
a more comprehensive record on certain issues related to the award of
ongoing support for advanced mobile services. In considering the issues
related to Mobility Fund Phase II, the Bureaus ask commenters keep in
mind that Phase II support is not one-time support, but is ongoing
support aimed at expanding and sustaining mobile services.
II. Background
2. In the USF/ICC Transformation Order and FNPRM, the Commission
comprehensively reformed and modernized the universal service high-cost
program. Among other things, for the first time, the Commission
explicitly recognized the important benefits of and demand for mobile
services through the creation of a two-phase Mobility Fund within the
high-cost program.
3. For Phase I, the Commission allocated $300 million in one-time
[[Page 73587]]
support to expand the availability of advanced mobile services, plus an
additional $50 million dedicated to Tribal lands. For Phase II of the
Mobility Fund, the Commission dedicated $500 million annually
(including up to $100 million dedicated to Tribal lands) and proposed
to make awards through a reverse auction to support providers of voice
and mobile broadband service in areas where such services cannot be
sustained or extended without ongoing support. The Commission further
proposed to award support on the same terms and conditions as it
adopted for Phase I, but sought comment on whether any modifications
were needed to reflect the ongoing nature of support in Phase II.
4. Under the Commission's proposal, a Mobility Fund Phase II
reverse auction would assign support to maximize coverage of unserved
road miles (or other units) within the budget. To implement an auction,
the Commission proposed a basic framework of auction rules that would
give the Bureaus flexibility under delegated authority to establish
specific procedures for a Mobility Fund Phase II auction.
III. Overall Design
A. Identifying Areas Eligible for Support
5. In the USF/ICC Transformation Order and FNPRM, the Commission
sought comment on various issues associated with identifying the
geographic areas that would be eligible for Phase II support. In light
of experience with Mobility Fund Phase I and Auction 901, the Bureaus
seek further comment on certain of these issues.
6. Identifying Areas Eligible for Support. To target Phase II
support to only those areas where it is needed, the Commission proposed
to use Mosaik Solutions (Mosaik) data to exclude all census blocks
where an unsubsidized carrier is providing 3G or better service. For
purposes of determining areas with unsubsidized service, the Commission
proposed in the USF/ICC Transformation Order and FNPRM that areas
receiving one-time Mobility Fund Phase I support would still be
eligible to receive Mobility Fund Phase II support.
7. Some commenters express concern about the accuracy of the Mosaik
database. The Bureaus now seek further comment based on the use of
Mosaik data as a factor in determining eligible areas for Phase I
support. To the extent that parties assert that Mosaik data
inaccurately reflects the availability of service, the Bureaus seek
comment on whether there are any other data sources that the Commission
could use to better identify eligible areas. The Bureaus request that
commenters provide specific information on what makes these alternate
sources superior and how they could be used instead of, or in
combination with, the Mosaik database. The Bureaus also seek comment on
whether there are other factors the Commission should consider in
addition to the availability of unsubsidized service. For instance, how
should providers' planned expansion of unsubsidized service affect the
identification of areas eligible for support? For example, in Mobility
Fund Phase I, the Commission excluded areas from auction where a
provider has made a regulatory commitment to provide 3G or better
wireless service, or has received a funding commitment from a federal
executive department or agency in response to the carrier's commitment
to provide 3G or better service. In addition, the Commission required
applicants for Mobility Fund Phase I support to certify that they were
not seeking support for any areas in which they had made a public
commitment to deploy 3G or better wireless service by December 31,
2012.
8. Use of the Centroid Method. In the USF/ICC Transformation Order
and FNPRM, the Commission proposed to determine the eligibility of a
particular census block for Phase II support based on the absence of
unsubsidized 3G or better service at the centroid, which refers to the
internal point latitude/longitude of a census block polygon. Some
commenters expressed concern that the centroid method is an ineffective
measure to determine whether large areas are unserved. The Bureaus ask
commenters for feedback on the centroid method in light of their
experience in Phase I. Should the Commission consider alternatives,
such as the proportional method? For instance, should it consider
unserved any census block if the data indicates more than 50 percent of
the area is unserved?
B. Prioritizing Areas Eligible for Support
9. In the USF/ICC Transformation Order and FNPRM, the Commission
sought comment on whether to target Phase II support to particular
areas, such as those that lack any mobile service or ones that lack
current generation (3G) service. Some commenters suggest prioritizing
support to rural carriers or carriers with 2G or less capacity; another
opposed prioritization of funding to areas with no service at all.
Others suggested that the Commission should take into account
additional factors, such as poverty level or whether an area is served
by the National Highway System, instead of, or in addition to, coverage
level. Despite this discussion in the record, the Commission received
little input on implementation and specific measures for prioritizing
eligible areas.
10. The Bureaus seek additional comment on whether and how the
Commission might implement priorities for support among eligible areas.
The Bureaus ask commenters to address whether the Commission should
prioritize ongoing support to areas that lack coverage, a designated
level of coverage, or whether there are other measurable factors that
should be taken into account. The Bureaus observe that, in the USF/ICC
Transformation Order and FNPRM, the Commission suggested that targeted
areas could be prioritized by making a bidding credit available. The
Bureaus seek additional specific comment on how the Commission might
set an appropriate level(s) of bidding credit(s) to prioritize areas
based on the existing level of coverage in a particular area. The
Bureaus seek comment on whether and how the Commission might assure
that support goes to areas that would lose service absent the receipt
of ongoing support. In this regard, commenters are invited to discuss
how, if at all, the availability of Remote Areas Fund support for the
highest cost areas should affect the areas targeted for Mobility Fund
Phase II.
C. Establishing Bidding and Coverage Units
11. In the USF/ICC Transformation Order and FNPRM, under its
auction proposal, the Commission proposed to establish bidding units in
each eligible census block for purposes of comparing bids and assessing
performance, and to base the number of bidding units on the number of
road miles in each eligible area. Road miles directly reflect the
Mobility Fund's goals of supporting mobile services, and indirectly
reflect many other important factors, such as business locations,
recreation areas and work sites, since roads are used to access those
areas. Several commenters recommend that the Commission consider other
alternatives, including population, terrain, workplaces, annual
revenues, and straight-line miles or traditional river miles, instead
of, or in combination with, road miles. Some commenters also suggest
that the Commission revisit the issue of bidding and coverage units
after the Phase I auction before deciding on whether to use road miles
as the sole bidding unit.
12. Given the results of the Mobility Fund Phase I auction, the
Bureaus seek further comment on the use of road
[[Page 73588]]
miles to determine bidding units and corresponding coverage
requirements. The Bureaus note that the Commission concluded that, for
Phase I of the Tribal Mobility Funds, it would base bidding units on
population rather than road miles. The Bureaus also invite additional
comment on how specifically the Commission might measure or factor
various suggested alternatives, such as terrain or topography, into its
determination of bidding units and ask for input on the benefits or
drawbacks of any particular approach.
D. Public Interest Obligations
13. In the USF/ICC Transformation Order and FNPRM, the Commission
proposed that recipients of Mobility Fund Phase II support would be
required to provide mobile voice and data services that meet or exceed
a minimum bandwidth or data rate of 768 kbps downstream and 200 kbps
upstream, consistent with the capabilities offered by representative 4G
technologies. The Commission proposed that these data rates should be
achievable in both fixed and mobile conditions throughout the cell
area, including at the cell edge, at a high probability, and with
substantial sector loading. The Commission further noted that the
proposed measurement conditions may enable users to receive much better
service when accessing the network from a fixed location or close to a
base station. The Commission sought comment on whether, and in what
ways, these metrics should be modified during the proposed 10-year term
of support to reflect anticipated advances in technology. The
Commission also proposed that the performance characteristics expected
of Mobility Fund Phase II recipients be required to evolve over time,
to keep pace with mobile broadband service in urban areas. Commenters
generally recommend periodic review and modification of these
requirements through a rulemaking proceeding. The Bureaus now seek to
further develop the record on how often, and through what process, the
Commission should modify the performance metrics applicable to Phase II
support recipients. Commenters should address the threshold question of
whether an evolving standard is appropriate given the proposed term of
support and anticipated advances in technology. For example, should the
Commission require that broadband networks built with support be
capable of meeting increasing consumer demand for capacity and over a
specified time period? If so, should the Commission mandate any
specific network attributes?
E. Term of Support
14. In the USF/ICC Transformation Order and FNPRM, the Commission
proposed a fixed term of support of 10 years and sought comment on a
shorter term. In seeking comment on an optimal term for ongoing
support, the Commission noted that it sought to balance the need to
provide certainty to carriers to attract private investment and deploy
services, while taking into account changing circumstances. Commenters
generally agreed that a 10-year term was appropriate, noting that the
term reflects the economic realities of network building, and need for
financial assurance to upgrade or extend networks. The Bureaus seek
additional comment on establishing an appropriate term of support, in
light of the timeframes for deployment and private investment and the
pace of new technology and marketplace developments. Further, the
Bureaus request comment on the tradeoffs between using a 10-year term
versus one or more shorter terms and which approach would provide the
best structure for dealing with dynamic changes in the industry.
IV. Provider Eligibility
15. In the USF/ICC Transformation Order and FNPRM, the Commission
proposed to require that parties seeking Mobility Fund Phase II support
satisfy the same eligibility requirements that were adopted with
respect to Phase I. Commenters generally support the Commission's
proposal, though some advocate size-based and other restrictions. The
Bureaus seek further comment on certain of these issues.
16. Interplay with other universal service mechanisms. The Bureaus
seek comment on the inter-relationship between eligibility for Mobility
Fund Phase II support and other universal service support mechanisms.
The Commission noted that a party may be eligible to participate in
both Connect America Phase II and Mobility Fund Phase II, but noted
that carriers would not be allowed to receive redundant support for the
same service in the same areas. The Bureaus seek additional comment on
how to implement this principle so as to provide advance information to
potential participants in a Mobility Fund Phase II auction. In
particular, the Bureaus ask commenters to provide input on how the
deployment of mobile service under Mobility Fund Phase II could be
supplemented or modified for purposes of meeting the public interest
obligations of Connect America Phase II. The Bureaus also seek comment
on any interrelationship between eligibility for Mobility Fund Phase II
support and the Remote Areas Fund that is to provide support in the
highest cost areas.
17. Small business participation. In the USF/ICC Transformation
Order and FNPRM, the Commission sought comment on whether small
businesses should be eligible for a bidding preference in a Mobility
Fund Phase II auction. The Commission noted that in a spectrum auction
context, the Commission typically awards small business bidding credits
ranging from 15 to 35 percent, depending on varying small business size
standards. Commenters were asked to address the effectiveness of a
preference to help smaller carriers compete at auction and whether the
Commission should adopt a preference even if the bidding credit would
result in less coverage than would occur without the bidding credit.
The Commission also sought comment on how to define small businesses
and what size bidding credit may be appropriate. Specifically, the
Commission sought comment on whether a small business should be defined
as an entity with average gross revenues not exceeding $40 million for
the preceding three years, or whether it should use a larger size
definition, such as average gross revenues not exceeding $125 million
for the preceding three years. Several commenters supported the use of
bidding credits to increase the competitiveness of small and rural
carriers. The Bureaus now seek to develop the record in light of
commenters' experience in Phase I, where bidding preferences were not
available, except for Tribally-owned or controlled providers. Would the
entities that were successful bidders in Auction 901 qualify as small
businesses under the definitions the Commission asked about? To what
extent do commenters continue to believe that a bidding credit is
important to smaller carriers' ability to effectively compete at
auction for support and how does that weigh against other Commission
objectives?
V. Accountability and Oversight
18. In the USF/ICC Transformation Order and FNPRM, the Commission
proposed to generally apply to Mobility Fund Phase II the same rules
for accountability and oversight that will apply to all recipients of
Connect America Fund (CAF) support. Among other things, the CAF
accountability and oversight proposals are intended to create a process
for the reasonable and prudent disbursement of universal service
support. In Mobility Fund Phase I, the Commission authorized
disbursement of funds in three equal
[[Page 73589]]
installments, linked to completion of certain milestones. The Bureaus
seek comment on how to structure ongoing support payments over the term
of support in a way that achieves the Commission's goals of providing
sufficient and predictable support throughout the term of the Mobility
Fund Phase II, while ensuring compliance with the Anti-Deficiency Act.
Should support be tied to completion of certain milestones, disbursed
on a regular recurring basis, or some combination of both?
VI. Tribal Priority Units
19. In the USF/ICC Transformation Order and FNPRM, the Commission
proposed and sought comment on a number of provisions targeted at the
specific connectivity challenges on Tribal lands. Among other things,
the Commission sought comment on a possible mechanism that would
allocate a specified number of ``priority units'' to Tribal governments
to afford Tribes an opportunity to identify their own priorities. As
discussed in the USF/ICC Transformation Order and FNPRM, priority units
for each Tribe could be based upon a percentage, in the range of 20 to
30 percent, of the total population in unserved blocks located within
Tribal boundaries. Tribal governments would have the flexibility to
allocate these units in whatever manner they choose. Tribal governments
could elect to allocate all of their priority units to one geographic
area that is particularly important to them, or to divide the total
number of priority units among multiple geographic units according to
their relative priority. The Commission requested comment on whether
this approach should apply to both the general and Tribal Mobility Fund
Phase II, and how such priority units should be awarded in Alaska and
Hawaii given the unique conditions in those states. The Commission also
sought comment on how this mechanism, if adopted, would interact with
the proposed 25 percent Tribal bidding credit.
20. Few parties offered comments addressing the priority units
mechanism for Tribal governments, and those that did generally focused
on issues unique to Alaska. In light of the relatively light record the
Commission received on this issue and the results of Mobility Fund
Phase I, the Bureaus seek additional comment on the Tribal priority
units proposal. In particular, the Bureaus seek further comment on
whether this approach should apply to Tribal governments participating
in both the general and Tribal Mobility Fund Phase II, and, if so, how
such priority units should be awarded in Alaska and Hawaii. Would the
25 percent Tribal bidding credit and the Tribal engagement obligation
proposed in the USF/ICC Transformation Order and FNPRM be sufficient to
ensure that Tribal priorities are met with respect to ongoing support
under Phase II?
VII. Regulatory Flexibility Analysis
21. The USF/ICC Transformation Order and FNPRM included an Initial
Regulatory Flexibility Analysis (IRFA) pursuant to 5 U.S.C. 603,
exploring the potential impact on small entities of the Commission's
proposal. The Bureaus invite parties to file comments on the IRFA in
light of this additional notice.
VIII. Procedural Matters
22. This matter shall be treated as a permit-but-disclose
proceeding in accordance with the ex parte rules. Persons making oral
ex parte presentations are reminded that memoranda summarizing the
presentations must contain summaries of the substance of the
presentations and not merely a listing of the subjects discussed. More
than a one- or two-sentence description of the views and arguments
presented generally is required. Other requirements pertaining to oral
and written presentations are set forth in 47 CFR 1.1206(b).
Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2012-29879 Filed 12-10-12; 8:45 am]
BILLING CODE 6712-01-P