[Federal Register Volume 78, Number 51 (Friday, March 15, 2013)]
[Proposed Rules]
[Pages 16456-16460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-06047]



47 CFR Part 54

[WC Docket No. 10-90; DA 13-284]

Service Obligations for Connect America Phase II and Determining 
Who Is an Unsubsidized Competitor

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.


SUMMARY: In this document, the Federal Communications Commission seeks 
comment on how it will determine which census blocks are served by an 
unsubsidized competitor, how price cap carriers will demonstrate they 
are meeting the Commission's requirements for reasonable comparability, 
and what other providers will need to demonstrate to be deemed 
unsubsidized competitors.

DATES: Comments are due on or before March 28, 2013 and reply comments 
are due on or before April 12, 2013. If you anticipate that you will be 
submitting comments, but find it difficult to do so within the period 
of time allowed by this notice, you should advise the contact listed 
below as soon as possible.

ADDRESSES: You may submit comments, identified by WC Docket No. 10-90, 
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 
     People With Disabilities: Contact the FCC to request 

[[Page 16457]]

accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: [email protected] or phone: (202) 418-
0530 or TTY: (202) 418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Ryan Yates, Wireline Competition 
Bureau, (202) 418-0886 or TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Wireline 
Competition Bureau's Public Notice in WC Docket No. 10-90, and DA 13-
284, released February 26, 2013. The complete text of this document is 
available for inspection and copying during normal business hours in 
the FCC Reference Information Center, Portals II, 445 12th Street SW., 
Room CY-A257, Washington, DC 20554. These documents may also 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 (800) 378-3160 or (202) 863-2893, facsimile (202) 
863-2898, or via the Internet at http://www.bcpiweb.com. It is also 
available on the Commission's Web site at http://www.fcc.gov.

I. Introduction

    1. In this Public Notice, the Wireline Competition Bureau (Bureau) 
seeks to further develop the record on a number of issues relating to 
implementation of Connect America Phase II support. Specifically, the 
Bureau seeks comment on how it will determine which census blocks are 
served by an unsubsidized competitor, how price cap carriers will 
demonstrate they are meeting the Commission's requirements for 
reasonable comparability, and what other providers will need to 
demonstrate to be deemed unsubsidized competitors.

II. Discussion

    2. Unserved Areas. The Commission directed the Bureau to determine 
what areas the forward looking cost model should treat as unserved by 
an unsubsidized competitor ``as of a specified future date as close as 
possible to the completion of the model.'' To that end, the next 
version of the Connect America Cost Model will incorporate June 2012 
State Broadband Initiative (SBI) data to assist in determining what 
areas have access to broadband-capable infrastructure meeting specified 
speed thresholds. We recognize that in some particular instances, it is 
possible that providers have completed network expansion into unserved 
areas since submitting the June 2012 SBI data, but it is necessary now 
to incorporate an existing nationwide data set into the next version of 
the model, which currently is under development.
    3. The Bureau seeks to further develop the record on what speed 
threshold in the June 2012 SBI data should be utilized as a proxy for 4 
Mbps/1 Mbps when the Bureau identifies those census blocks that are 
served by an unsubsidized competitor meeting the specified speed 
requirement in the model. In the Phase I context, several commenters 
argue that using 3 Mbps/768 kbps as a proxy for 4 Mbps/1Mbps excludes 
some areas from support even though those areas in fact lack 4 Mbps/1 
Mbps service. For purposes of Phase II, should the model treat an area 
as unserved if it is shown on the National Broadband Map as lacking 
broadband with speeds of at least 6 Mbps/1.5 Mbps, instead of using 3 
Mbps/768 kbps as a proxy? That would presumably result in a greater 
number of census blocks becoming eligible for funding under Phase II 
than a 3 Mbps/768 kbps threshold. Commenters are encouraged to address 
the implications of using the National Broadband Map data regarding 
availability of broadband providing at least a 6 Mbps/1.5 Mbps speed to 
identify census blocks that would be deemed served by an unsubsidized 
competitor under Phase II. If we were to determine the presence of an 
unsubsidized competitor based on a 6 Mbps/1.5 Mbps threshold, to create 
parity between unsubsidized competitors and Phase II buildout 
requirements, should we also require that Phase II support recipients 
be required to provide broadband with speeds of 6 Mbps/1.5 Mbps to all 
supported locations? This would prevent a scenario in which a carrier 
could use Phase II funds to overbuild an existing 4 Mbps/1 Mbps network 
with its own 4 Mbps/1 Mbps network.
    4. To the extent any interested parties wish to bring to our 
attention any information they believe should supplement the reported 
June SBI 2012 data, they are invited to submit comments by the deadline 
specified for this Public Notice. We particularly encourage input from 
state SBI grantees and other state authorities that may have relevant 
    5. For ease of administration, the Bureau proposes to exclude from 
support calculations in the adopted model any Census block that is 
served by a cable broadband provider that provides service meeting the 
defined speed threshold, with that rebuttable presumption subject to 
challenge in a challenge process. Given the wide variance in service 
offerings from fixed wireless providers, we do not propose to establish 
a similar presumption for fixed wireless providers. Instead, we propose 
to address whether a fixed wireless provider meets the requirements to 
be an unsubsidized competitor in a challenge process. A fixed wireless 
provider could demonstrate it is an unsubsidized competitor by making 
an affirmative showing that it meets the necessary speed, latency, 
capacity, and price criteria. That affirmative showing would be subject 
to rebuttal by other parties. We seek comment on this proposal. Should 
mobile providers also be allowed to participate in the challenge 
process, giving them the opportunity to qualify as unsubsidized 
competitors and exclude areas from support if they are able to meet the 
performance and pricing requirements?
    6. We seek comment on whether determinations in the challenge 
process of whether an unsubsidized competitor meets the specified 
service requirements (speed, latency, usage, price) should be based on 
a company's offerings as of June 30, 2012, or some later date. 
Alternatives could include the date on which we release an order 
adopting the forward looking model, or 30 days prior to that release. 
We seek comment on these alternatives.
    7. Pricing and Usage Allowances. We need to specify pricing and 
associated minimum usage allowances that will apply to price cap 
carriers that make a statewide commitment to offer voice and extend 
broadband in exchange for model-determined support for a period of five 
years. We also need to specify what is required for another provider to 
be deemed an unsubsidized competitor that would preclude an area from 
receiving any support.
    8. With respect to pricing, we seek to further develop the record 
on a proposal to presume that ``a broadband provider that offers 
national pricing for its broadband service offerings is offering those 
services in rural and urban areas at reasonably comparable rates.'' 
Should a Phase II recipient be allowed to demonstrate that its rates 
are reasonably comparable between urban and rural areas by showing that 
it offers the same rates, terms, and conditions on a nationwide basis? 
Would such a presumption be a reasonable way to implement the statutory 
goal of reasonably comparable rates, while implementing Phase II 
quickly? Should we specify a level at which a provider's rate is too 
high to be considered

[[Page 16458]]

reasonable, even if the provider offers the same rate in both urban and 
rural areas?
    9. Should the presumption apply if a carrier offered different 
pricing plans in different regions of the country, so long as its rates 
are uniform within a region across both rural and urban areas? Should 
such a presumption apply for carriers that operate only in one state? 
In the latter case, would it be sufficient if the provider offered 
uniform pricing within its footprint, so long as that included urban 
areas? If we were to take such an approach, consistent with our 
proposal for the urban rate survey, we propose to define ``urban'' as 
all 2010 Census urban areas and urban clusters that sit within a 
Metropolitan Statistical Area. We seek comment on this proposal.
    10. The Bureau has proposed an urban rate survey instrument to 
gather data relating to fixed voice and fixed broadband prices and 
associated usage allowances, if any, in the urban areas, but we do not 
anticipate those data will be available by the time the Bureau 
implements Phase II in the months ahead. In the absence of data from a 
rate survey, should we establish an interim reasonable comparability 
benchmark that a competitive provider would need to meet in order to be 
deemed an unsubsidized competitor? The Bureau recently sought comment 
on potential benchmarks that could be used for the Remote Areas Fund, 
at least on an interim basis until rate survey data become available. 
We now seek comment on benchmarks to use for determining who is an 
unsubsidized competitor in the near term for Phase II implementation in 
areas that will not be served by the Remote Areas Fund.
    11. In particular, the Commission's prior reasonable comparability 
benchmark for voice service for non-rural carriers was $36.52. Would it 
be reasonable to presume any provider offering voice service at or 
below $37 meets the reasonable comparability requirement for voice 
service, at least for purposes of determining whether a particular 
Census block should be excluded from the state-level offer of support?
    12. We note that several large fixed terrestrial providers offer 
broadband at speeds close to the Commission's 4 Mbps downstream/1 Mbps 
upstream benchmark at prices ranging from $45 to $49.95 per month. 
Would setting a reasonable comparability benchmark for broadband 
service at a somewhat higher level, such as $60, be a reasonable 
approach for determining who is an unsubsidized competitor when 
identifying Census blocks that would be excluded from the state-level 
offer of support in Phase II? Should that figure be lower or higher?
    13. With respect to the Commission's usage requirement, we propose 
to set a uniform minimum usage allowance that would apply both to price 
cap carriers that make a statewide commitment as well as to 
unsubsidized competitors that would preclude a Census block from being 
funded. We seek comment on this proposal.
    14. We propose to adopt a minimum usage allowance for purposes of 
finalizing the locations that will receive support to be offered to 
price cap carriers in Connect America Phase II. This minimum usage 
allowance would be associated with the rate established for the 
reasonable comparability benchmark for broadband service; consumers in 
supported areas would be free to purchase additional gigabytes of data 
above the required minimum usage allowance. We seek comment on this 
    15. One way to set a minimum usage allowance would be to estimate 
the amount of data needed to accomplish various user activities that 
the Connect America Fund will advance. A similar approach was used to 
set the minimum broadband speed requirements for Connect America. Chart 
1 below provides estimates of what activities are possible under 
varying data allowances, taking into account potential activities 
relating to education, health, employment, e-commerce, and civic 
engagement. Chart 1 shows the cumulative illustrative activities a 
household could undertake under various data allowances. We seek 
comment on this analysis.

                                                     Chart 1
                                                                               Data allowance
      Critical use category               Activity        ------------------------------------------------------
                                                             20 GB      40 GB      60 GB      80 GB      100 GB
Online College Coursework.......  Hours per week of                3          6          9         12         15
                                   interactive video
                                  Web sites loaded per            45         90        135        180        225
                                   day for course work.
                                  Emails per day for              20         40         60         80        100
Secondary Schooling.............  Hours per week of                6         12         18         24         30
                                   educational video.
                                  Websites loaded per day         30         60         90        120        150
                                   for homework or
                                   learning management
                                  Emails per day.........         20         40         60         80        100
Household's Other Critical Uses.  Online medical                   1          2          3          4          5
                                   consultations (30
                                   min.) every two months.
                                  Web sites loaded per            55        110        165        220        275
                                   day for job searching,
                                   government services,
                                   news or banking.
                                  Emails per adult per            20         40         60         80        100

    16. Given the calculations in Chart 1, would 100 GB be a reasonable 
upper bound for a minimum usage allowance? Using a higher figure, such 
as 100 GB, would account for the growth in video usage for education 
and communication purposes over the next five years. It would also 
allow for other new and unanticipated uses that Chart 1 does not 
account for. Alternatively, should we instead adopt a lower value, such 
as 60 GB, but increase that requirement over time to reflect growing 
average data consumption, as discussed below?
    17. As an alternative to setting the minimum usage allowance based 
on a set of potential user activities, we could set the minimum usage 
allowance based on current average usage. We note that according to one 
source, during the second half of 2012, the median monthly data 
consumption for fixed services in North America was 16.8 GB per 
subscriber. According to the most recent Commission speed testing data 
released in February 2013, the median weighted consumption of 
volunteers participating in the Measuring Broadband America (MBA) 
program for all fixed terrestrial technologies was 32.3 GB per month, 
with approximately 90 percent of surveyed digital subscriber line (DSL) 
subscribers in September

[[Page 16459]]

2012 using less than 100 GB per month. Should we set the Phase II 
minimum usage allowance based on such data? Given that the vast 
majority of DSL users in the MBA program today use less capacity than 
100 GB per month, would that be an appropriate usage allowance 
requirement for carriers electing to make a statewide commitment in 
Phase II and for other providers to be deemed an unsubsidized 
competitor? Is such data representative of typical users, and if not, 
is there an alternative data source we should consider? What would be 
the implications of setting the minimum usage allowance higher or 
lower? In particular, what are the technical constraints that limit the 
capacity providers are able to offer, and what are the factors that 
would raise or lower deployment costs if we raise or lower the minimum 
usage allowance requirement? We assume some percentage of an average 
household's data is consumed in entertainment purposes. Should that be 
factored into our calculations? To the extent commenters believe the 
required minimum usage allowance should be higher or lower, they should 
provide specific data and analyses in support of their positions.
    18. Should we set an initial usage allowance that would be required 
for the first year of Phase II implementation, but require that usage 
allowance to grow in future years, consistent with the growth in 
consumer usage observed in the marketplace? We note that Cisco projects 
that North American consumer usage will grow by 14 percent in 2014, 21 
percent in 2015, and 25 percent in 2016. The model developed by 
Commission staff for the Broadband Plan assumed that customer usage of 
fixed broadband would grow by approximately 30 percent annually. How 
could such a requirement be structured to provide sufficient clarity to 
providers at the time they make a statewide commitment of how their 
obligations would evolve over time? What objective metric or external 
data source should determine the growth in usage allowances over time? 
If we were to adopt such an approach, should the usage level be 
adjusted annually, bi-annually, or on some other schedule?
    19. Latency. The USF/ICC Transformation Order, 76 FR 73830, 
November 29, 2011, requires ETCs to provide latency sufficient for real 
time applications, such as VoIP. In adopting this requirement, the 
Commission noted that broadband testing results showed most terrestrial 
wireline technologies can reliably provide round trip latency of less 
than 100 milliseconds (ms). The June 2012 testing results show that the 
average peak period round trip UDP latency for all wireline terrestrial 
technologies is less than 60 ms.
    20. To implement the Commission's latency requirement when offering 
support to price cap carriers in Phase II and determining who is an 
unsubsidized competitor in Phase II, should we establish a specific 
numerical latency standard? Because performance during peak usage is 
important to ensuring the consumers have adequate service, we believe a 
testing under load standard would be appropriate, if we adopt a 
specific standard. For instance, would it meet the Commission's 
requirements if an average of 95 percent of all measurements of network 
round trip latency under load during peak period (defined as weeknights 
between 7:00 p.m. to 11:00 p.m. local time) between the customer 
premises (or as close to the customer premises as technically possible) 
to the provider's transit or peering interconnection point (often 
referred to as an Internet exchange point) were at or below 60 ms? 
Should that number be set lower or higher, and if so, why? To provide a 
factual basis for a price cap carrier or potential unsubsidized carrier 
to establish it is meeting the Commission's requirements, should a 
latency test be conducted over a minimum of two consecutive weeks 
during peak hours for at least 50 randomly-selected customer premises 
using existing network management systems, ping tests, or other 
commonly available network measurement tools? Should the testing period 
be longer or shorter? Should the number of customer premise be higher 
or lower? We seek comment on whether this approach would provide 
sufficient clarity to potential support recipients and unsubsidized 
providers regarding their service obligations.

III. Procedural Matters

A. Initial Regulatory Flexibility Act Analysis

    21. The USF/ICC Transformation Order 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. We 
invite parties to file comments on the IRFA in light of this additional 

B. Initial Paperwork Reduction Act of 1995 Analysis

    22. This document seeks comment on a potential new or revised 
information collection requirement. If the Commission adopts any new or 
revised information collection requirement, the Commission will publish 
a separate notice in the Federal Register inviting the public to 
comment on the requirement, as required by the Paperwork Reduction Act 
of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant 
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how 
it might ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.''

C. Filing Requirements

    23. Interested parties may file comments and reply comments on or 
before the dates indicated on the first page of this document. Comments 
are to reference WC Docket No. 10-90 and DA 13-284 and may be filed 
using the Commission's Electronic Comment Filing System (ECFS). See 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121, 
May 1, 1998.
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy 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.
    [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. The filing hours 
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes and boxes 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] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington, DC 20554.
    24. People with Disabilities. To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to [email protected]v or call the 
Consumer & Governmental

[[Page 16460]]

Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
    In addition, we request that one copy of each pleading be sent to 
each of the following:

(1) Ryan Yates, Telecommunications Access Policy Division, Wireline 
Competition Bureau, 445 12th Street SW., Room 6-B-441A, Washington, DC 
20554; email: [email protected];
(2) Charles Tyler, Telecommunications Access Policy Division, Wireline 
Competition Bureau, 445 12th Street SW., Room 5-A452, Washington, DC 
20554; email: [email protected].
    25. This matter shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making ex parte presentations must file a copy of any written 
presentation or a memorandum summarizing any oral presentation within 
two business days after the presentation (unless a different deadline 
applicable to the Sunshine period applies). Persons making oral ex 
parte presentations are reminded that memoranda summarizing the 
presentation must (1) list all persons attending or otherwise 
participating in the meeting at which the ex parte presentation was 
made, and (2) summarize all data presented and arguments made during 
the presentation. If the presentation consisted in whole or in part of 
the presentation of data or arguments already reflected in the 
presenter's written comments, memoranda or other filings in the 
proceeding, the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with rule 1.1206(b). In proceedings governed by 
rule 1.49(f) or for which the Commission has made available a method of 
electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

Federal Communications Commission.
Kimberly A. Scardino,
Acting Division Chief, Telecommunications Access Policy Division, 
Wireline Competition Bureau.
[FR Doc. 2013-06047 Filed 3-14-13; 8:45 am]