[Federal Register Volume 82, Number 96 (Friday, May 19, 2017)]
[Rules and Regulations]
[Pages 22901-22903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10099]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket Nos. 10-90, 14-58, CC Docket No. 01-92; FCC 17-36]


Connect America Fund, ETC Annual Reports and Certifications, 
Developing a Unified Intercarrier Compensation Regime

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) grants the Petition for Reconsideration filed by NTCA--The 
Rural Broadband Association (NTCA) of the Commission's Rate-of-Return 
Reform Order with respect to the average per-location, per-project 
construction limitation on universal service support provided for in 
the Rate-of-Return Reform Order. Amending the rule as described below 
will encourage carriers to plan cost-effective broadband deployment 
projects that include higher-cost locations, while maintaining adequate 
incentives for the efficient use of universal service funds.

DATES: Effective June 19, 2017.

FOR FURTHER INFORMATION CONTACT: Alexander Minard, Wireline Competition 
Bureau, (202) 418-0428 or TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
on Reconsideration in WC Docket Nos. 10-90, 14-58, CC Docket No. 01-92; 
FCC 17-36, adopted on April 20, 2017 and released on April 21, 2017. 
The full text of this document is available for public inspection 
during regular business hours in the FCC Reference Center, Room CY-
A257, 445 12th Street SW., Washington, DC 20554, or at the following 
Internet address: http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0421/FCC-17-36A1.pdf.

I. Order on Reconsideration

    1. By this Order, the Commission grants the Petition for 
Reconsideration filed by NTCA of the Commission's Rate-of-Return Reform 
Order, 81 FR 24282, April 25, 2016, with respect to the average per-
location, per-project construction limitation on universal service 
support provided for in the Rate-

[[Page 22902]]

of-Return Reform Order. The Commission finds that amending the rule as 
described below will encourage carriers to plan cost-effective 
broadband deployment projects that include higher-cost locations, while 
maintaining adequate incentives for the efficient use of universal 
service funds.
    2. In the Rate-of-Return Reform Order, the Commission adopted a 
Capital Investment Allowance to limit universal service reimbursement 
of capital expenses associated with very high-cost locations, with a 
goal of preserving funds for more efficient projects with deployment to 
a greater number of lower-cost locations. As part of the Capital 
Investment Allowance, the Commission adopted a rule precluding carriers 
from seeking universal service support for all capital expenses 
associated with any construction project with average per-location 
costs above a company-specific ``Maximum Average Per-Location 
Construction Project Limitation.''
    3. NTCA seeks reconsideration of how the construction limitation is 
applied. NTCA contends that disallowing all costs associated with a 
construction project will cause carriers to exclude certain locations 
to reduce the average per-location cost of the project, with the 
possible consequence of permanently ``stranding'' some locations 
without broadband-capable service. For example, if a carrier subject to 
a $10,000 average per-location limitation developed a project costing 
$105,000 to serve 10 locations (i.e., with an average cost per-location 
served of $10,500), the cost of the entire project would be disallowed. 
The carrier might instead exclude a handful of the highest cost 
locations to bring the average per-location cost below the threshold. 
Once excluded, however, there may not be a subsequent project that 
deploys service to those locations as efficiently as the first project 
and, as a result, the location may never receive broadband-capable 
service.
    4. NTCA therefore requests that the rule disallow, for the purpose 
of seeking universal service support, only the portion of a project's 
expenses that exceed the average per-location threshold. In the example 
above, where the $10,500 average per-location cost of the project 
exceeds the carrier's $10,000 Maximum Average Per Location Construction 
Project Loop Plant Investment Limitation, the carrier would report 
$100,000 (i.e., $10,000 per location) for universal service support 
purposes and exclude $5,000 (i.e., the amount in excess of $10,000 per 
location). In that case, a carrier might elect to deploy service to the 
highest-cost locations without prejudice to its ability to receive 
universal service support for the project, up to the amount of the 
average per-location cap.
    5. Upon reconsideration, the Commission agrees that wholly 
disallowing costs associated with projects exceeding the construction 
limitation could have the effect of preventing deployment to some 
locations that a carrier might otherwise choose to serve. As the 
Commission noted in adopting the Capital Investment Allowance, 
``[a]lthough it is the Commission's goal to ensure broadband deployment 
throughout all areas, finite universal service resources must be used 
where they are most needed.'' NTCA's proposed solution is to retain the 
average per-location construction limitation as a maximum amount 
includable for universal service support purposes in connection with a 
construction project. The Commission finds that this solution 
adequately preserves two critical Commission interests: First, 
promoting efficient use of universal service funds to maximize the 
number of high-cost locations with broadband-capable facilities, and 
second, enabling some locations to be efficiently included within 
another deployment project (when they might otherwise be denied service 
altogether). The Commission therefore grants NTCA's petition with 
respect to the construction limitation.

II. Procedural Matters

    6. Paperwork Reduction Act. This document 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).
    7. Final Regulatory Flexibility Certification. The Regulatory 
Flexibility Act of 1980 as amended (RFA) requires that a regulatory 
flexibility analysis be prepared for rulemaking proceedings, unless the 
agency certifies that ``the rule will not have a significant economic 
impact on a substantial number of small entities.'' The RFA generally 
defines ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one which: (1) Is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA).
    8. In this Order on Reconsideration, the Commission amends the 
construction project limitation within the Capital Investment Allowance 
to permit carriers to report, for universal service purposes, capital 
expenses per location up to the established per-location per project 
limit, rather than disallowing all capital expenses associated with 
construction projects in excess of the limit. This project-specific 
limitation provides a reasonable upper limit on the amount of per-
location capital expenses associated with a carrier's new construction 
project that the Commission expects will rarely be exceeded. Moreover, 
to the extent that this rule change has a significant economic impact 
on any small carriers, the rule change will provide such carries 
additional flexibility to undertake new construction projects that 
exceed the limit without risk of losing all universal service support 
associated with the project. Because the Commission anticipates that 
this rule will not affect a substantial number of carriers, the 
Commission does not anticipate that it will affect a substantial number 
of small entities. Therefore, the Commission certifies that the 
requirements of this Order on Reconsideration will not have a 
significant economic impact on a substantial number of small entities. 
The Commission will send a copy of the Order on Reconsideration 
including a copy of this final certification to the Chief Counsel for 
Advocacy of the Small Business Administration. See 5 U.S.C. 605(b).
    9. Congressional Review Act. The Commission will send a copy of 
this Order on Reconsideration to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).

III. Ordering Clauses

    10. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1 through 4, 214(e)(6), and 254 of the 
Communications Act of 1934, 47 U.S.C. 151-154, 214(e)(6), 254, and 
pursuant section 1.429 of the Commission's rules, 47 CFR 1.429, the 
Petition for Reconsideration filed by NTCA on January 3, 2017 is 
granted to the extent indicated above and this Order on Reconsideration 
is adopted, effective thirty (30) days after publication of the text or 
summary thereof in the Federal Register.

[[Page 22903]]

    11. It is further ordered that the Commission shall send a copy of 
this Order on Reconsideration to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).
    12. It is further ordered that pursuant to section 1.427 of the 
Commission's rules, 47 CFR 1.427, this Order shall be effective 30 days 
after publication of the text or summary thereof in the Federal 
Register.

List of Subjects in 47 CFR Part 54

    Communications common carriers, Health facilities, Infants and 
children, Internet, Libraries, Reporting and recordkeeping 
requirements, Schools, Telecommunications, Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority citation for part 54 continues to read as follows:

    Authority:  47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
254, 303(r), 403, and 1302 unless otherwise noted.


0
2. Amend Sec.  54.303 by revising paragraph (f) introductory text to 
read as follows:


Sec.  54.303  Eligible Capital Investment and Operating Expenses.

* * * * *
    (f) Construction allowance adjustment. Notwithstanding any other 
provisions of this section, a rate-of-return carrier must exclude from 
the data it submits for the purposes of obtaining high-cost support 
under subpart K or subpart M of this part the amount of Loop Plant 
Investment associated with a new construction project that exceeds the 
Maximum Average Per Location Construction Project Limitation for that 
project as determined by the Administrator according to the following 
formula:
* * * * *
[FR Doc. 2017-10099 Filed 5-18-17; 8:45 am]
 BILLING CODE 6712-01-P