[Federal Register Volume 84, Number 114 (Thursday, June 13, 2019)]
[Proposed Rules]
[Pages 27570-27576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12162]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket No. 06-122; FCC 19-46]
Universal Service Contribution Methodology
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) seeks comment on establishing a cap on the Universal
Service Fund (USF or Fund) and ways it could enable the Commission to
evaluate the financial aspects of the four USF programs in a more
holistic way, and thereby better achieve the overarching universal
service principles
[[Page 27571]]
Congress directed the Commission to preserve and advance.
DATES: Comments are due on or before July 15, 2019 and reply comments
are due on or before August 12, 2019.
ADDRESSES: Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's
rules, 47 CFR 1.415, 1.419, interested parties may file comments and
reply comments on or before the dates indicated in the DATES section of
this document. Comments and reply comments may be filed using the
Commission's Electronic Comment Filing System (ECFS). See Electronic
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998). If
you anticipate that you will be submitting comments but find it
difficult to do so within the period of time allowed by this document,
you should advise the contact listed in the FOR FURTHER INFORMATION
CONTACT section as soon as possible.
[ssquf] Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
[ssquf] Paper Filers: Parties who choose to file by paper must file
an original and one copy of each filing. If more than one docket or
rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number. 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 St. 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 9050 Junction Drive,
Annapolis Junction, MD 20701.
[ssquf] U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 445 12th Street SW, Washington, DC 20554.
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] or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
FOR FURTHER INFORMATION CONTACT: Karen Sprung, Wireline Competition
Bureau, (202) 418-7400 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM) in WC Docket No. 06-122; FCC 19-46,
adopted on May 15, 2019 and released on May 31, 2019. 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:
https://www.fcc.gov/ecfs/filing/05310169808865.
I. Introduction
1. In the NPRM, the Commission seeks comments on establishing a cap
on the Universal Service Fund (USF or Fund) and ways it could enable
the Commission to evaluate the financial aspects of the four USF
programs in a more holistic way, and thereby better achieve the
overarching universal service principles Congress directed the
Commission to preserve and advance. While each of the constituent USF
programs are capped or operating under a targeted budget, the
Commission has not examined the programs holistically to determine the
most efficient and responsible use of these federal funds. A cap could
promote meaningful consideration of spending decisions by the
Commission, limit the contribution burden borne by ratepayers, provide
regulatory and financial certainty, and promote efficiency, fairness,
accountability, and sustainability of the USF programs.
2. The Communications Act of 1934 first established the concept of
universal service, and the Telecommunications Act of 1996 formalized
and expanded universal service, paving the way for the programs that
exist today. The Fund provides financial support to recipients through
four major programs: The High-Cost program (also known as the Connect
America Fund), the Lifeline program, the schools and libraries program,
also known as E-Rate, and the Rural Health Care program. Financial
contributions to the Fund are required to be made by providers of
telecommunications and telecommunications services, who are assessed
charges based on their interstate and international revenues. Consumers
ultimately pay these charges, however, either through higher prices or
line-item charges on their bills.
3. The Commission initiates this proceeding mindful of its
obligation to safeguard the USF funds ultimately paid by ratepayers,
and to ensure the funds are spent prudently and in a consistent manner
across all programs. Although the creation of a topline budget will not
eliminate the Commission's ability to increase funding for a particular
program, a cap would require it to expressly consider the consequences
and tradeoffs of spending decisions for the overall fund, and more
carefully evaluate how to efficiently and responsibly use USF financial
resources. The Commission takes this action to preserve and advance
universal service, to increase access to telecommunications services
for all consumers at just, reasonable, and affordable rates, to meet
its obligation to protect against Fund waste, and to ensure that the
universal service programs are funded appropriately.
4. Section 254(b) of the Telecommunications Act of 1996 directs the
Commission to base policies for the preservation and advancement of
universal service on a number of principles. The Commission's statutory
obligation requires that the Commission's policies result in equitable
and nondiscriminatory contributions to the Fund, as well as specific
and predictable support programs. In order to fulfill Congress'
directive, the Commission must balance the need for fiscal
responsibility and predictability with the benefits that comes from
universal service funding. However, as courts and the Commission have
recognized, too much subsidization could negatively affect the
affordability of telecommunications services for those consumers who
ultimately provide the support for universal service. Although the
Commission has taken steps over the last decade to set caps or funding
targets for each of the four programs individually, for the first time
it looks at the Fund and its programs holistically.
5. High-Cost. The High-Cost program provides support for the
deployment of broadband-capable networks in rural areas. It helps make
broadband, both fixed and mobile, available to homes, businesses, and
community anchor institutions in areas that do not, or would not
otherwise have broadband. The USF/ICC Transformation Order, 76 FR
73830, November 29, 2011, comprehensively reformed and modernized the
High-Cost program and established, for the first time, a budget
mechanism for the various Connect America Fund (CAF) programs. For
years 2012-2017, the budget was set at
[[Page 27572]]
no more than $4.5 billion per year, with an automatic review trigger if
the budget was threatened to be exceeded. The Commission did not
include an inflationary adjustment in the $4.5 billion budget adopted
in 2011. The Commission in 2011 also directed the Fund Administrator,
the Universal Service Administrative Company (USAC), to collect $1.125
billion per quarter for High-Cost funding, regardless of the projected
quarterly demand, to avoid dramatic shifts in the contribution factor
while the CAF was implemented. Any excess money collected is kept in
reserve for the CAF initiatives. The CAF, which focused on supporting
different technologies and recipients with different funding amounts,
disbursed $4.692 billion in 2017, of which approximately $480 million
came from the CAF reserves.
6. Schools and Libraries. The schools and libraries universal
service support mechanism provides discounts to schools and libraries
to ensure affordable access to high-speed broadband and
telecommunications necessary for digital learning. Originally capped at
its inception at $2.25 billion in disbursements per funding year, the
Commission began indexing the funding cap to inflation in 2010 to
ensure that E-Rate program funding keeps pace with the changing
broadband and telecommunications needs of schools and libraries. The
Commission then increased the cap in funding year 2015 by $1.5 billion.
In funding year 2018, the E-Rate cap was $4.06 billion and demand for
actual support was $2.77 billion.
7. Rural Health Care. The Rural Health Care (RHC) Program provides
funding to eligible healthcare providers for telecommunications and
broadband services necessary for the provision of health care services.
When the Commission established the RHC Program in 1997, it capped
funding for the program at $400 million per funding year. Beginning in
2012, the Commission expanded the RHC program to include the Healthcare
Connect Fund Program, after which total RHC program demand began to
steadily increase. In June 2018, the Commission raised the RHC program
funding cap to $571 million, beginning in funding year 2017, to address
current and future demand for supported services by health care
providers. The Commission also adjusted the funding cap annually for
inflation using the Gross Domestic Product Chained Price Index (GDP-
CPI), beginning in funding year 2018, raising the funding cap to $581
million. In funding year 2016, RHC demand was approximately $556
million, and the total amount of qualifying funding requests was
approximately $408 million.
8. Lifeline. The Lifeline program provides subsidies for voice and
broadband services to qualifying low-income households. In 2016, the
Commission adopted a budget for the program of $2.25 billion with an
annual inflation adjustment. The Lifeline program budget does not
automatically curtail disbursements, and in the 2017 Lifeline Order and
NPRM, 83 FR 2075, January 16, 2018 and 83 FR 2104, January 16, 2018,
the Commission proposed adopting a self-enforcing budget mechanism for
the Lifeline program. At the same time, recent demand has been
considerably lower than the authorized budget levels. For example, the
Lifeline program disbursed approximately $1.263 billion in calendar
year 2017 and is on track to spend approximately $1.212 billion in
2018, compared to budgets of $2.25 billion and $2.279 billion in the
respective years.
II. Discussion
9. The Commission believes capping the Fund overall will strike the
appropriate balance between ensuring adequate funding for the universal
service programs while minimizing the financial burden on ratepayers
and providing predictability for program participants. Moreover,
setting an overall cap will enable the Commission to take a more
holistic view when considering future changes to the universal service
programs and their impact on overall USF spending. By explicitly
linking the expenditures in multiple USF programs through the overall
cap, the Commission seeks to promote a robust debate on the relative
effectiveness of the programs. The Commission seeks comment on
establishing an annual combined USF cap. For example, should the
Commission set the overall cap at $11.42 billion, which is the sum of
the authorized budgets for the four universal service programs in 2018?
Should the Commission set it at a different amount? The Commission
seeks comment on this proposal, as well as other methods for setting
the appropriate level of an annual overall USF cap.
10. To ensure the overall cap keeps pace with inflation, the
Commission seeks comment on how to adjust the cap over time. The
Commission is currently using the GDP-CPI to adjust the E-Rate and RHC
program caps, as well as the operating expense limitations for rate-of-
return carriers, and has previously found it to be more accurate than
some other measures in estimating price changes over time. The
Commission seeks comment on whether there are other ways to adjust the
overall cap for inflation that would be more appropriate. Should there
be an index specific to each USF program and how should such program-
specific indices apply to an overall USF cap? Would this process make a
significant difference to the caps compared to the use of the GDP-CPI?
How often should the caps be adjusted? Commenters should provide data
to support their conclusions.
11. The Commission next seeks comment on how to implement the cap.
One method is to determine when disbursements are projected to exceed
the overall USF cap and, in that event, to reduce projected universal
service expenditures to stay within the cap. Another method, given the
difference in some programs between the date of commitments and the
date funding is disbursed, is to cap the commitments issued by USAC.
The Commission seeks feedback on the best way to track and make public
universal service demand levels to appropriately anticipate pending USF
demand issues. In the event disbursements are projected to exceed the
overall cap, the Commission also seeks comment on the appropriate way
to reduce expenditures automatically consistent with its universal
service goals and consistent with the legal imperative to remain within
the cap.
12. Tracking USF Demand Transparently. A critical function of an
effective cap mechanism is that the Commission can track projected
demand and to correct potential overspending before the cap is reached.
As part of its administrative duties, USAC projects demand for all four
programs each quarter when it calculates the proposed contribution
factor. The Commission seeks comment on using this existing mechanism
to help USAC and the Commission project future disbursements compared
to the overall cap. In particular, the Commission seeks comment on a
process whereby USAC will notify the Commission staff if the quarterly
demand calculation, either alone or in combination with other data,
suggests the cap will be exceeded by future disbursements. USAC may
base this prediction on the size of the quarterly demand projection
when, for example, the quarterly demand alone exceeds one quarter of
the overall cap, or when the quarterly data in combination with other
information suggests an increase in future demand above the cap. The
Commission seeks comment on this idea. USAC also issues commitments in
[[Page 27573]]
some programs long before the funding is disbursed to recipients.
Should the cap mechanism limit the commitments USAC makes or should it
limit total disbursements? In determining the appropriate period of
time over which to evaluate demand, should the Commission consider the
annual cap exceeded over the course of any 12-month period or should
the Commission evaluate the demand over the course of a calendar year?
What about over the course of a funding year? Given the differences in
administration of the four USF programs, are there issues with the
timing of commitments and disbursements to consider when projecting
demand? Should any administrative rules for any program(s) be modified
to synchronize them and eliminate or mitigate any differences that
would be problematic to measuring demand? What about any timing issues
with respect to the mitigation measures the Commission would take to
correct the projected overspending?
13. The Commission also seeks comment on extending its projections
out further than one year to better anticipate potential spending over
the cap. Limiting the Commission's forecasting to a single year could
be insufficient to assess spending levels in future years, and the
Commission would have a better opportunity to course-correct if it can
evaluate demand over a more extended period of time. Should the
Commission also adopt procedures to establish a five-year forecast for
projected program disbursements? The Commission seeks comment on this
idea. Is a five-year period appropriate or feasible? Should the
Commission consider a different period of time?
14. As a first step towards greater transparency, the Commission
next seeks comment on making these forecasts available to the public.
USAC already makes public the quarterly demand projections and the
Commission believes providing an extended forecast to the public would
assist it in protecting the financial status of the Fund.
Alternatively, the Commission seeks comment on making these forecasts
available to state commissions. Sharing this forecast information would
help to further the Commission's coordination with state commissions
and allow states to continue to create complementary state universal
support mechanisms. The Commission seeks comment on the best process
for making these forecasts available to state commissions or the
public.
15. Additionally, the Commission seeks comment on how to address
forecasting miscalculations and the potential impact on programs. For
example, how would the Commission correct a scenario where projected
demand is expected to exceed the cap, but actual disbursements do not
hit the cap? Or in the alternative, how should the Commission correct a
situation where actual commitments or disbursements exceed the cap,
although the forecast did not anticipate an overage? How would the
Commission handle a temporary or one-time budget increase that hits the
overall cap during a specific period? USAC already has experience
correcting its projections for each of the programs when actual
disbursements differ from its projections. Each quarter, USAC typically
makes a prior period adjustment in one or more of the programs to
account for actual program demand and this adjustment affects the
demand for the next quarter as well as the contribution factor. Would
adopting a similar process work to help correct forecasting errors? How
can the Commission use USAC's prior period adjustment to adjust for
miscalculations? Would more frequent forecasting help to mitigate
potential forecasting errors? What other difficulties should the
Commission anticipate when forecasting demand and disbursements?
16. Reduction Mechanisms. Next, the Commission seeks comment on how
to reduce expenditures if USAC projects that disbursements will exceed
the overall USF cap. First, the Commission notes that the program rules
for each of the four universal service programs will continue to govern
those programs, and therefore existing spending constraints in place
would prevent some, but not all, of the universal service programs from
exceeding their caps. The overall cap could be exceeded due to rising
demand, or a future Commission decision to increase funding for a
program or to institute a new USF program without any corresponding
increase in the overall cap. The Commission seeks comment on ideas to
reduce expenditures as needed under each of these scenarios. Should
these reductions take place when commitments are expected to exceed the
caps or should they only take place when disbursements are projected to
exceed the caps? What criteria should be used in prioritizing
reductions of one program against reduction in another?
17. First, the Commission seeks comment on directing USAC and
Commission staff to make administrative changes to reduce the size or
amount of funding available to the individual program caps in an
upcoming year if demand is projected to exceed the overall cap. For
instance, should the Commission consider limiting some or all of the
automatic inflation increases in the programs? The Commission seeks
comment on this idea and on directing the Wireline Competition Bureau,
which oversees the Fund, or the Office of the Managing Director, which
currently calculates the quarterly contribution factor, to carry it
out. Are there other administrative changes the Commission should
consider that could provide greater flexibility to allow USAC and the
Commission to address this issue, such as using reserve or carry
forward funds to offset potential spending over the cap?
18. Second, the Commission seeks comment on prioritizing the
funding among the four universal service programs and other possible
universal service pilots or programs if still necessary to expenditures
where USAC projects that total disbursements will exceed the overall
cap. Adopting clear prioritization rules and evaluating the tradeoffs
associated with these funding decisions could make disbursements more
specific and predictable. The Commission seeks comment on the best
methods for prioritizing funding when faced with projected
disbursements exceeding the overall cap. How should the Commission
prioritize among the programs? For instance, should the Commission
prioritize based on the cost-effectiveness of each program or the
estimated improper payment rates? Should the Commission instead
prioritize based on the types of services to be funded or by rurality
of the recipient? The Commission also seeks comment on whether to
consider limits to any demand reductions. Any prioritization will
result in less funding available for one of the programs. In this
instance, should there be a maximum amount that a program can be
reduced, either as a percentage of its annual budget or a specific
dollar amount? Should the Commission instead consider reducing each
program's disbursements by the same amount, rather than prioritizing
funding among the programs? Under such an approach, unexpected
increases in demand in one program could affect the funding levels of
other programs that have not experienced similar unexpected increases
in demand. Is this a desirable outcome? Should any funding reduction
mechanism distinguish between increased demand due to natural, and
other, disasters and unexpected increases in demand due to other
factors? How should the Commission account for future universal service
[[Page 27574]]
expenditures that the Commission may create? In past years, the
Commission has established pilot programs designed to test the use of
universal service funding for new purposes and has also dedicated
discrete amounts of funding for emergency purposes. How should those
pilot program or emergency expenditures be prioritized in comparison to
the existing programs for universal service funding? What other factors
should the Commission consider when considering how best to prioritize
funding among the programs?
19. Finally, the Commission seeks comment on how to account for
additional duties or obligations that the Commission might create in
other proceedings that potentially would cause projected expenditures
to exceed the cap within the next five years. For example, if the
Commission proposes to create a new USF program or allocate additional
funding to a program, that action would not occur unless the Commission
either: (a) Cuts spending elsewhere to keep projected spending below
the cap or (b) raises the overall cap. The Commission seeks comment on
this idea.
20. The Commission next seeks comment on possible changes to the
budget structures of the individual universal service programs in order
to establish a maximum level of universal service support that can be
disbursed annually, thus limiting contribution burdens and providing
predictability to contributors and ratepayers. First, the Commission
seeks comment on other changes to any of the universal service program
rules that would assist the Commission in its efforts to achieve a more
holistic and coherent approach to universal service support. For
instance, consistent with previously-proposed rule changes, would self-
enforcing caps on each of the programs provide more predictability to
universal service spending? Are there other changes that would better
align the four programs to reduce duplicative work or simplify the
administration of the overall cap?
21. Additionally, the Commission seeks comment on how best to
balance program needs with the contribution burdens imposed on
ratepayers. In particular, the Commission requests information and data
related to the economic efficiency costs associated with increasing
contributions above current levels. Estimating the benefits of these
programs could allow the Commission to prioritize them by their cost
effectiveness. Are there ways to compare effectiveness across the
programs more holistically in order to measure program efficiency? How
should the Commission balance the benefits of the different programs
with the costs of increased contributions by ratepayers? The Commission
seeks concrete proposals that illustrate how program effectiveness
would be measured and how it would affect the allocation of
contributions between the individual programs. Weighing the costs of
increased contributions against the estimated benefits of the programs
could allow the Commission to better assess whether funds are allocated
efficiently. The Commission seeks comment on this idea and encourages
commenters to include data to support their conclusions.
22. The Commission also seeks comment on combining the E-Rate and
RHC program caps. Schools, libraries, and healthcare facilities
increasingly offer important community resources over their broadband
networks. Combining the program caps may be justifiable given that both
programs promote the use of advanced services to anchor institutions
that have similar needs for high-quality broadband services.
Additionally, many of these institutions often operate through
consortia for the purpose of simplifying applications for program
support and lowering the costs for participating members. In other USF
proceedings, some stakeholders have asked the Commission to reexamine
the rules to better harmonize the USF program rules. It is reasonable,
therefore, to consider combining the caps to create additional
implementation efficiencies and flexibility. However, is administrative
simplicity a sufficient reason to combine the programs under a single
cap? Does combining the caps promote efficient use of limited funds if
the effectiveness of the two programs differ significantly?
23. The Commission seeks comment on the practical effect of
combining the E-rate and Rural Health Care budgets. While the E-rate
program has been substantially under its cap since its budget was
increased to approximately $4 billion per year indexed to inflation in
2014, there has been significant pressure on the Rural Health Care
budget in recent years, and the Commission in 2018 increased the Rural
Health Care budget to $571 million indexed to inflation. Assuming
current trends persist in future years, would a combined budget that
allows support for participants in either program to come from a single
fund improve the efficiency with which these programs could disburse
funding? Would a combined budget effectively increase the budget on
whichever program is closest to their cap?
24. Under this proposal, both the E-Rate and RHC programs would
share a combined total cap of more than $4.64 billion in funding year
2018 and as long as total demand for both programs did not exceed the
combined cap, all funding requests for both programs would be approved.
To ensure that each program has a predictable level of support, the
Commission also proposes that if demand for either programs were to
meet or exceed their individual program funding caps, each program
would continue to be subject to its individual program cap and the
existing program rules would apply. For example, if in funding year
2018 demand for E-Rate support exceeded the E-Rate cap and demand for
RHC support also exceeded that program's existing cap, E-Rate requests
would be prioritized according to current E-rate program rules, up to
$4.062 billion, and RHC requests would be subject to the proration
rules in effect in RHC, up to $581 million. The Commission also
believes that rules pertaining to carrying funds forward, inflationary
adjustments, prioritization, and proration would continue to apply
within each of the individual programs. The Commission seeks comment on
this proposal. Is there any downside to such a proposal? The Commission
also seeks comment on the mechanics of how it would distribute funding
under a combined, prioritization scheme.
III. Procedural Matters
A. Paperwork Reduction Act
25. This document does not contain proposed information collection
requirements subject to the Paperwork Reduction Act of 1995, Public Law
104-13. In addition, therefore, it does not contain any proposed
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).
26. Regulatory Flexibility Analysis. As required by the Regulatory
Flexibility Act of 1980, as amended (RFA), the Commission has prepared
this Initial Regulatory Flexibility Analysis (IRFA) of the possible
significant economic impact on a substantial number of small entities
from the policies and rules proposed in this NPRM. The Commission
requests written public comment on this IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments on the NPRM. The Commission will send a copy of the NPRM,
including this IRFA, to the Chief
[[Page 27575]]
Counsel for Advocacy of the Small Business Administration (SBA).
27. This NPRM seeks comment on a proposal to adopt an overall cap
on the Fund and to combine the caps for the schools and libraries and
Rural Health Care programs in an effort to promote efficiency,
fairness, and sustainability. This action is taken consistent with the
Commission's objective to preserve and advance universal service,
together with its obligation to protect against program waste, fraud,
and abuse, and to ensure that programs are funded appropriately. A cap
will limit the overall contribution burden and will provide regulatory
and financial certainty to both recipients of and contributors to the
Fund, including small businesses.
28. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small-business concern'' under the Small Business
Act. A small-business concern'' is one which: (1) Is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) satisfies any additional criteria established by the Small Business
Administration (SBA).
29. The NPRM proposes changes to the Fund and the four universal
service support mechanisms in order to promote efficiency, fairness,
and sustainability. The proposals in this NPRM are directed at enabling
the Commission to meet its goals and objectives for the Fund, to
preserve and advance universal service, to meet its obligation to
protect against Fund waste, and to ensure that the universal service
programs are funded appropriately. The NPRM seeks comment on some
potential changes that could increase economic burdens on small
entities, as well as some potential changes that would decrease
economic burdens on small entities.
30. Contributions. Universal Service support is funded by
ratepayers and continuing to increase Fund expenditures unchecked risks
an increased burden on consumers, including small businesses. Capping
the Fund at $11.42 billion overall will strike the appropriate balance
between ensuring adequate funding for the universal service programs
while minimizing the burdens placed on ratepayers, including small
businesses, who contribute to the programs.
31. Programmatic Changes. The Commission does not expect that the
proposed changes will result in disruption to the programs or services
provided by the programs. However, it is possible that proposed budget
reduction mechanisms, if necessary, could result in prioritization
schemes or budgetary cuts that could impact program participants,
including small businesses.
32. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include (among others) the following four alternatives: (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities. The Commission expects to consider all of these factors when
it has received substantive comment from the public and potentially
affected entities.
33. Largely, the proposals in the NPRM, if adopted, would have no
impact on or would reduce the economic impact of current regulations on
small entities. Certain proposals in this NPRM could have a positive
economic impact on small entities; for instance, the Commission seeks
comment on some changes to the budget structures of the four universal
service programs in order to establish a maximum level of universal
service support that can be collected. The Commission expects that this
will provide predictability to contributors and ratepayers, including
small entities. In addition to proposing the budget changes to the
individual USF programs, the Commission proposes an overall USF budget
cap as well as reduction mechanisms to correct a scenario when
disbursements exceed or are projected to exceed the proposed overall
USF budget. The Commission expects that an overall cap will help to
reduce the contribution burden for all contributors, including small
businesses. In the NPRM, the Commission seeks comment on the burden
this change would create for carriers and will factor that into its
decision.
34. More generally, the Commission expects to consider the economic
impact on small entities, as identified in comments filed in response
to the NPRM and this IRFA, in reaching its final conclusions and taking
action in this proceeding. The proposals and questions laid out in the
NPRM were designed to ensure the Commission has a complete
understanding of the benefits and potential burdens associated with the
different actions and methods.
35. Ex Parte Presentations. The proceeding 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 Sec. 1.1206(b). In proceedings governed by
Sec. 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.
IV. Ordering Clauses
36. Accordingly, it is ordered that, pursuant to the authority
found in sections 1-5, 201-206, 214, 218-220, 251, 252, 254, 256,
303(r), 332, 403, and 405 of the Communications Act of 1934, as
amended, 47 U.S.C. 151-155, 201-206, 214, 218-220, 251, 252, 254, 256,
[[Page 27576]]
303(r), 403, and 405, this Notice of Proposed Rulemaking is adopted.
Federal Communications Commission.
Katura Jackson,
Federal Register Liaison.
[FR Doc. 2019-12162 Filed 6-12-19; 8:45 am]
BILLING CODE 6712-01-P