[Federal Register Volume 87, Number 116 (Thursday, June 16, 2022)]
[Proposed Rules]
[Pages 36283-36304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-12685]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 36, 51, and 54

[WC Docket Nos. 10-90, 14-58, 09-197, 16-271; RM-11868; FCC 22-35; FR 
ID 89579]


Connect America Fund: A National Broadband Plan for Our Future 
High-Cost Universal Service Support, ETC Annual Reports and 
Certifications, Telecommunications Carriers Eligible To Received 
Universal Service Support

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC 
or Commission) seeks comment on a proposal by the ACAM Broadband 
Coalition (Coalition) to achieve widespread deployment of 100/20 Mbps 
broadband service throughout the rural areas served by carriers 
currently receiving Alternative Connect America Model (A-CAM) support.

DATES: Comments are due on or before July 18, 2022, and reply comments 
are due on or before August 1, 2022.
    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 following as soon as 
possible.

ADDRESSES: You may submit comments, identified by WC Docket No. 10-90, 
by any of the following methods:
     Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: www.fcc.gov/ecfs.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing.
     Filings can be sent 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.
     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.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 45 L Street NE, Washington, DC 20554.
     Effective March 19, 2020, and until further notice, the 
Commission no longer accepts any hand or messenger delivered filings. 
This is a temporary measure taken to help protect the health and safety 
of individuals, and to mitigate the transmission of COVID-19. See FCC 
Announces Closure of FCC Headquarters Open Window and Change in Hand-
Delivery Policy, Public Notice, 35 FCC Rcd 2788, 2788-89 (OS 2020).
    Comments and reply comments exceeding ten pages must include a 
short and concise summary of the substantive arguments raised in the 
pleading. Comments and reply comments must also comply with Sec.  1.49 
and all other applicable sections of the Commission's rules. The 
Commission directs all interested parties to include the name of the 
filing party and the date of the filing on each page of their

[[Page 36284]]

comments and reply comments. All parties are encouraged to utilize a 
table of contents, regardless of the length of their submission. The 
Commission also strongly encourages parties to track the organization 
set forth in the Notice of Proposed Rulemaking (NPRM) in order to 
facilitate the Commission's internal review process.
    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: For further information, please 
contact, Theodore Burmeister, Telecommunications Access Policy 
Division, Wireline Competition Bureau, at [email protected] 
or 202-418-7400, or Jesse Jachman, Telecommunications Access Policy 
Division, Wireline Competition Bureau, at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's NPRM 
in WC Docket Nos. 10-90, 14-58,09-197, 16-271 and RM-11868, adopted on 
May 19, 2022 and released on May 20, 2022. Due to the COVID-19 
pandemic, the Commission's headquarters will be closed to the general 
public until further notice. The full text of this document is 
available at the following internet address: https://www.fcc.gov/document/fcc-proposes-higher-speed-goals-small-rural-broadband-providers-0.
    Ex Parte Presentations--Permit-But-Disclose. The proceeding this 
Notice of Proposed Rulemaking initiates 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).
    In light of the Commission's trust relationship with Tribal Nations 
and its commitment to engage in government-to-government consultation 
with them, the Commission finds the public interest requires a limited 
modification of the ex parte rules in this proceeding. Tribal Nations, 
like other interested parties, should file comments, reply comments, 
and ex parte presentations in the record to put facts and arguments 
before the Commission in a manner such that they may be relied upon in 
the decision-making process consistent with the requirements of the 
Administrative Procedure Act. However, at the option of the Tribe, ex 
parte presentations made during consultations by elected and appointed 
leaders and duly appointed representatives of federally recognized 
Indian Tribes and Alaska Native Villages to Commission decision makers 
shall be exempt from disclosure in permit-but-disclose proceedings and 
exempt from the prohibitions during the Sunshine Agenda period. To be 
clear, while the Commission recognizes consultation is critically 
important, it emphasizes that the Commission will rely in its decision-
making only on those presentations that are placed in the public record 
for this proceeding.
    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.

I. Introduction

    1. In the NPRM, the Commission seeks comment on a proposal by the 
Coalition to achieve widespread deployment of 100/20 Mbps broadband 
service throughout the rural areas served by carriers currently 
receiving A-CAM support. The areas served by A-CAM recipients are among 
the costliest to serve in the nation, and by improving access to modern 
communications services, the Commission can help connect individuals 
living in rural areas to high-speed broadband. In seeking comment on 
the Coalition's proposal, the Commission recognizes that the 
Infrastructure Investment and Jobs Act (Infrastructure Act) recently 
created several pathways for federal agencies, in partnership with the 
states, to fund deployment of broadband in unserved and underserved 
areas. Given that A-CAM is already supporting the deployment and 
ongoing provision of some level of broadband service in rural areas 
through 2028 for most A-CAM carriers, enhancements to the A-CAM 
program, as the Coalition has proposed, may be an efficient means of 
funding deployment in a manner complementary to other federal and state 
efforts. If appropriately high-quality broadband can be deployed in a 
cost-effective manner by A-CAM carriers pursuant to the cost model, 
other agencies and the states will be able to target their 
Infrastructure Act funds to achieve more deployment elsewhere.
    2. In this NPRM, the Commission also initiates a targeted inquiry 
into the management and administration of the high-cost program. For 
more than a decade, the Commission has made substantial progress 
reforming and modernizing the various high-cost support mechanisms and 
has gained valuable experience administering and overseeing the 
program. Based on those lessons learned, the Commission proposes 
targeted modifications to its rules to improve the efficiency and 
efficacy of the high-cost program.
    3. In the 2016 Rate-of-Return Reform Order, 81 FR 24282, April 25, 
2016, the Commission provided rate-of-return carriers a voluntary path 
from traditional rate-of-return support to model-based high-cost 
universal service support (A-CAM I), tailored to reflect the specific 
requirements in rate-of-return areas. The A-CAM model was used to 
establish fixed monthly support amounts over a ten-year term in 
exchange for broadband deployment to a pre-determined number of 
eligible locations. The Commission directed the Bureau to calculate 
support as model-estimated costs for eligible census blocks in excess 
of the funding threshold of $52.50 per location per month up to the cap 
of $200. Carriers were obligated to deploy broadband at speeds of at 
least 25/3 Mbps or 10/1 Mbps to a number of locations equal to the 
number of fully funded locations (i.e., locations in eligible census 
blocks which the model determined could be

[[Page 36285]]

served for costs at or below the funding cap), and at least 4/1 Mbps or 
service on reasonable request to a number of locations equal to the 
number of capped locations (i.e., locations in eligible census blocks 
which the model determined could be served for costs above the funding 
cap). Each carrier's specific mix of 25/3 Mbps or 10/1 Mbps 
obligations, and 4/1 Mbps or reasonable request obligations, was based 
on the housing unit density of the eligible areas in the offer. These 
deployment obligations could be met by serving any eligible location, 
whether fully funded or capped. Carriers that elected A-CAM I were 
required to elect for all affiliated study areas in the state.
    4. The Commission excluded from A-CAM eligibility carriers that had 
reported deploying 10/1 Mbps service to more than 90% of eligible 
locations. For those carriers eligible to participate in A-CAM I, the 
Commission concluded that it would not provide support for locations in 
census blocks served by an unsubsidized competitor offering at least 
10/1 Mbps, and locations in census blocks where the incumbent already 
deployed fiber to the premises (FTTP) or was providing 10/1 Mbps or 
better broadband using cable technologies.
    5. To award support, the Bureau announced A-CAM I offer amounts and 
deployment obligations predicated on a monthly funding cap of $200 per 
location. Faced with substantial carrier interest in the offer and 
demand beyond the Commission-approved budget, however, the Commission 
later allocated an additional $50 million annually to the A-CAM I 
budget and adopted other measures to ensure that the model-based 
support stayed within the revised budget, including a reduced funding 
cap below $200 per location for most carriers. In the March 2018 Rate-
of-Return Reform Order and NPRM, 83 FR 18951, May 1, 2018 and 83 FR 
17968, April 25, 2018, the Commission authorized additional support for 
another offer to A-CAM I carriers, pursuant to which the funding cap 
was increased to $146.10 per location for carriers that elected it.
    6. In the December 2018 Rate-of-Return Reform Order, 84 FR 4711, 
February 19, 2019, the Commission adopted another additional offer for 
carriers that had previously elected A-CAM. Pursuant to this Revised A-
CAM I, the funding cap was increased to $200 per location per month for 
all electing carriers, and the term of support was extended by two 
years, through 2028, in exchange for increased 25/3 Mbps deployment 
obligations. The Bureau extended offers to eligible carriers in April 
2019 and authorized Revised A-CAM I support in May 2019.
    7. In the December 2018 Rate-of-Return Reform Order, the Commission 
also adopted a new model offer, A-CAM II, for carriers still receiving 
support pursuant to legacy support mechanisms based on historical 
costs, including carriers not previously eligible for A-CAM I. 
Consistent with Revised A-CAM I, the Commission set the per-location 
cap for A-CAM II at $200. For A-CAM II, the Commission revised the 
model parameters to include as eligible blocks those census blocks 
where the incumbent or its affiliate already provided FTTP or cable 
service. Further, the Commission excluded as ineligible census blocks 
served by unsubsidized competitors only if the unsubsidized competitors 
provided voice and at least 25/3 Mbps service under the then-most 
recently available FCC Form 477 data. Finally, the A-CAM II model 
parameters included a Tribal Broadband Factor, which set the funding 
threshold for locations on Tribal lands at $39.38 while increasing the 
support cap to $213.12. A-CAM II was offered for a ten-year term, 
ending in 2028. Carriers electing A-CAM II were required to deploy at 
least 25/3 Mbps service to a number of locations equal to the number of 
fully funded locations, and at least 4/1 Mbps or on reasonable request 
to a number of locations equal to the number of capped locations. The 
Commission adopted a single-step election process, under which the 
Bureau released a public notice announcing the offers of A-CAM II 
support amounts and deployment obligations, after which each carrier 
had 45 days to make an irrevocable acceptance of the offer. On August 
22, 2019, the Bureau authorized 171 companies to receive A-CAM II 
support.
    8. Currently, 262 companies are authorized to receive A-CAM I, 
including 243 companies that elected Revised A-CAM I, with a term 
ending in 2028, and 19 companies that did not elect Revised A-CAM I, 
whose term ends in 2026. These A-CAM I carriers collectively receive 
$607.6 million per year and have an obligation to deploy at least 25/3 
Mbps service to 451,059 eligible locations, at least 10/1 Mbps to 
170,491 eligible locations, and at least 4/1 Mbps service to 26,868 
eligible locations, with an additional 65,555 locations subject to the 
reasonable request standard. In addition, there are 185 A-CAM II 
companies, with support terms ending in 2028, that collectively receive 
$494.3 million per year. These carriers have an obligation to provide 
at least 25/3 Mbps service to 364,108 eligible locations, at least 4/1 
Mbps to 24,103 eligible locations, and service on reasonable request to 
another 68,034 locations. For the A-CAM I and II areas, there are 
approximately 1,170,000 eligible locations in the model. The total 
support currently provided to A-CAM I and A-CAM II companies is $1.1 
billion per year.
    9. Since 2013, the Commission has collected information on 
broadband deployment across the United States through the FCC Form 477. 
Using Form 477, broadband service providers have annually reported the 
census blocks in which they make service available to end users, as 
well as the maximum speed offered in each census block, distinguishing 
between residential and non-residential services and by the technology 
used to provide service. This reporting format made available a 
nationwide broadband deployment dataset. Over time, however, it became 
clear that more granular and accurate broadband data were needed to 
implement the Commission's Universal Service Fund (USF) programs and to 
support efforts to bridge the digital divide.
    10. On August 1, 2019, the Commission adopted an order setting 
parameters for a new data collection distinct from the Form 477 that 
would collect fixed broadband deployment data in the form of granular 
coverage maps and that would include a process for accepting 
crowdsourced data to challenge the accuracy of the submitted data. The 
Commission stated its intention to establish a uniform national dataset 
of locations where broadband could be deployed and upon which new 
coverage data could be overlaid.
    11. On March 23, 2020, the Broadband DATA Act was signed into law. 
In brief, the Broadband DATA Act requires the Commission to establish a 
semiannual collection of geographically granular broadband coverage 
data (which the Commission has titled the Broadband Data Collection or 
BDC) for use in creating coverage maps and processes for challenges to 
the coverage data and for accepting crowdsourced information, and it 
further directs the Commission to create a comprehensive database of 
broadband serviceable locations--i.e., the Broadband Serviceable 
Location Fabric (Fabric). Further, it requires the Commission to use 
these maps ``to determine the areas in which terrestrial fixed, fixed 
wireless, mobile, and satellite broadband internet access service is 
and is not available,'' and ``when making any new award of funding with 
respect to the deployment of broadband internet access intended for use 
by residential and mobile customers.''

[[Page 36286]]

    12. On November 15, 2021, President Biden signed the Infrastructure 
Act. The Act includes the largest-ever federal broadband investment, 
totaling approximately $65 billion, and directs multiple agencies to 
work towards expanding broadband access. In particular, Section 
60104(c) of the Act instructs the Commission to report on how it may 
``improv[e] its effectiveness in achieving the universal service goals 
for broadband in light of this Act,'' while Section 60104(b) instructs 
the Commission to commence a proceeding ``to evaluate the implications 
of this Act . . . on how the Commission should achieve the universal 
service goals for broadband.''
    13. In accordance with these statutory directives, the Commission 
adopted a Notice of Inquiry initiating a proceeding regarding the 
future of the USF on December 15, 2021. In the Future of USF Notice, 
the Commission invited comment on the effect of the Infrastructure Act 
on existing USF programs and the Commission's ability to reach its 
goals of universal deployment, affordability, adoption, availability, 
and equitable access to broadband throughout the United States. The 
Commission also sought comment on recommended courses of action the 
Commission and Congress might take to further promote those goals.
    14. Other provisions of the Infrastructure Act likewise aim to 
expand broadband access for all Americans. Section 60102 of the Act 
directs the National Telecommunications and Information Administration 
(NTIA) to establish the Broadband Equity, Access, and Deployment 
Program (BEAD Program), through which NTIA will allocate $42.45 billion 
to states for grants ``to bridge the digital divide.'' NTIA will 
provide minimum allocations of $100 million for each state and $100 
million to be divided equally among the U.S. Virgin Islands, Guam, 
American Samoa, and the Commonwealth of the Northern Mariana Islands. 
Remaining funds will be allocated using a formula based on total 
unserved locations in each state. The Act instructs states to award 
funding in a way that gives priority to projects that will provide 
service to unserved locations (defined as those without access to 25/3 
Mbps service), then to underserved locations (defined as those without 
access to 100/20 Mbps service), and next to community anchor 
institutions (defined as those without gigabit connections). Broadband 
networks funded by the BEAD Program must provide download speeds of at 
least 100 Mbps and upload speeds of at least 20 Mbps and ``latency that 
is sufficiently low to allow reasonably foreseeable, real-time, 
interactive applications.'' Grant recipients must provide service to 
every customer that desires broadband service in the project area and 
must offer at least one low-cost service option for eligible 
subscribers.
    15. On January 7, 2022, NTIA announced a Request for Comment 
regarding the BEAD Program and other broadband programs authorized and 
funded by the Infrastructure Act. As explained in the Request for 
Comment, NTIA will first provide BEAD funding to states and territories 
to support planning efforts and coordination with local communities and 
stakeholders. Next, states and territories must collaborate with local 
and regional entities in submitting an initial broadband plan to NTIA. 
After submitting the initial broadband plan, the state or territory 
must conduct a ``transparent, evidence-based, and expeditious challenge 
process under which a unit of local government, nonprofit organization, 
or other broadband service provider can challenge a determination made 
by the [state or territory] in the initial proposal as to whether a 
particular location or community anchor institution . . . is eligible 
for the grant funds, including whether a particular location is 
unserved or underserved.'' When NTIA approves a state's or territory's 
initial plan, the state or territory will then be able to access 
additional funds from its BEAD allocation, and final approval of a plan 
will permit access to the remaining allocated funds. In preparation for 
a Notice of Funding Opportunity (NOFO) with further specifics regarding 
the BEAD Program, NTIA asked commenters to explore how the agency 
``should treat prior buildout commitments that are not reflected in the 
updated FCC maps because the projects themselves are not complete,'' as 
well as ``[w]hat risks should be mitigated in considering these areas 
as `served' in the goal to connect all Americans to reliable, 
affordable, high-speed broadband.''
    16. On May 13, 2022, NTIA released its NOFO detailing the process 
for requesting BEAD Program funding. The NOFO sets a July 18, 2022 
deadline for NTIA to receive initial plans from states and territories, 
as well as an August 15, 2022 deadline for any supplemental 
information. The NOFO also specifies a number of a program 
requirements, including principles that states and territories must 
observe in their subgrantee selection, prioritization, and scoring 
processes. In particular, the NOFO prohibits states and territories 
from ``treat[ing] as `unserved' or `underserved' any location that is 
already subject to an enforceable federal, state, or local commitment 
to deploy qualifying broadband'' at the conclusion of the state's or 
territory's challenge process. States and territories must also ensure 
that subgrantees comply with obligations spelled out in the NOFO 
regarding network capabilities (i.e., speed, latency, and uptime), 
deployment requirements, and service obligations. Finally, the NOFO 
requires states and territories to ensure that prospective subgrantees 
have the managerial and financial capacity to meet the commitments of 
the subgrant and any BEAD Program requirements.
    17. Other federal programs also work to further the goal of 
universal service. For instance, the U.S. Department of Agriculture 
(USDA)'s Rural Utilities Service supports broadband through a number of 
programs, including the Learning, Telemedicine, and Broadband Program, 
for which the Infrastructure Act provided an additional $2 billion. The 
Department of the Treasury also has several programs that may fund 
broadband projects, and other NTIA programs beyond the BEAD Program 
provide funding for broadband deployment, affordability, adoption, 
availability, and equitable access. Pursuant to the Broadband 
Interagency Coordination Act (BICA), the Commission, USDA, and NTIA 
must share information regarding these high-cost universal service 
efforts. Specifically, the BICA required the FCC, USDA, and NTIA to 
enter into an agreement within six months to provide for sharing 
information about existing or planned projects that have received, or 
will receive, funding through the Commission's high-cost programs and 
programs administered by NTIA and the USDA. The BICA also mandates that 
the interagency agreement requires the agencies to ``consider basing 
the distribution of funds for broadband deployment'' under the 
referenced programs ``on standardized data regarding broadband 
coverage.'' On June 25, 2021, the agencies announced that they had 
entered into the agreement, and representatives of the agencies have 
been meeting regularly pursuant to that agreement.
    18. On October 30, 2020, the ACAM Broadband Coalition filed a 
Petition for Rulemaking asking the Commission to initiate a proceeding 
to consider the Coalition's proposal to extend both A-CAM I and A-CAM 
II. Pursuant to this original proposal, the terms of A-CAM I and A-CAM 
II would be extended in exchange for increased obligations to deploy 
25/3 Mbps service. The

[[Page 36287]]

Commission initially sought comment on the Petition for Rulemaking on 
November 4, 2020. In response, several commenters supported the 
Coalition's request that the Commission initiate a rulemaking. One 
commenter objected, but said the Commission ``should consider 
alternatives to the Coalition's recommended approach'' if the 
Commission were to adopt a notice of proposed rulemaking. More 
recently, commenters also discussed the Coalition's proposal in 
response to the aforementioned Future of USF Notice.
    19. On December 15, 2021, the Coalition revised its proposal in 
order to require deployment of at least 100/20 Mbps service to 90% of 
locations, as determined by the Fabric, in eligible census blocks, and 
at least 25/3 Mbps service to the remaining 10%. To fund the increased 
deployment costs, the Coalition proposed increasing monthly support for 
participating A-CAM carriers to the higher of 80% of a company's model-
estimated costs or $300 per location. The Coalition provided additional 
details on its proposal on January 19, 2022. On February 17, 2022, the 
Coalition further proposed support, in exchange for the same revised 
deployment obligations, for locations in census blocks that had been 
excluded from A-CAM I because an unsubsidized competitor reported 
providing at least 10/1 Mbps service.

II. Discussion

    20. The A-CAM programs currently provide support for more than 
350,000 locations that could be considered ``unserved'' pursuant to the 
Infrastructure Act because the A-CAM carriers have commitments to 
provide service only at speeds of 10/1 Mbps or 4/1 Mbps, or on 
reasonable request, and more than 800,000 locations that could be 
considered ``underserved'' under the Infrastructure Act because the 
carriers have commitments to provide service only at 25/3 Mbps. The 
Commission seeks comment on the Enhanced A-CAM proposal and generally 
regarding how to leverage the existing, supported networks of A-CAM 
carriers to swiftly meet current legislative requirements and goals 
while avoiding duplicative support across programs and maximizing the 
efficient use of universal service funds. Furthermore, the Commission 
seeks comment on how to best and most efficiently implement and 
sequence Enhanced A-CAM so that it works in concert with the BEAD 
Program. Throughout, the Commission seeks comment regarding how these 
specific proposals are, or can be, made consistent with Congressional 
intent expressed through the Infrastructure Act and other legislation, 
as well as programs at other agencies.
    21. The Commission notes when it first adopted A-CAM I that it 
expected in year eight of the mechanism (2024) to conduct a proceeding 
to address the determination of support after the end of A-CAM. The 
Commission proposes that the rulemaking initiated by this NPRM will 
satisfy that Commission expectation.
    22. Final Deployment Obligations--The Coalition proposes that 
carriers electing Enhanced A-CAM support deploy to 100% of eligible 
``post-Fabric'' locations. Post-Fabric locations are the locations 
identified in the Fabric that are determined to be in eligible census 
blocks. In some number of census blocks, the number of post-Fabric 
eligible locations may be fewer than the Connect America Model-
estimated number of locations. At the same time, the Coalition proposes 
to expand the set of eligible locations to include locations in census 
blocks that were not eligible in the A-CAM I program because they were 
served by FTTP or cable broadband or were served with at least 10/1 
Mbps broadband service by an unsubsidized competitor.
    23. The Coalition proposes that carriers electing Enhanced A-CAM 
would be required to deploy 100/20 Mbps or faster broadband service to 
90% of the eligible post-Fabric locations. For the remaining 10% of 
eligible post-Fabric locations, carriers would be required to deploy 
25/3 Mbps or faster broadband service. The Commission seeks comment on 
the Coalition's proposal. In contrast to the Coalition proposal, the 
Commission seeks comment on whether carriers should be required to 
deploy at least 100/20 Mbps to all eligible locations or whether 
carriers should be required to deploy to all locations where deployment 
of this level of service is not cost prohibitive. In either scenario, 
should carriers electing Enhanced A-CAM be required to serve 100% of 
unserved locations in their study areas, including unserved or 
underserved locations in currently ineligible census blocks? Should 
carriers with changes in their study area boundaries since the 
development of the model also be required to serve locations in 
eligible census blocks that are newly within their study area 
boundaries?
    24. If Enhanced A-CAM funds 25/3 Mbps broadband service, as the 
Coalition proposes for 10% of a carrier's eligible post-Fabric 
locations, when should those carriers be required to identify which 
specific locations will receive only 25/3 Mbps service? Would some 
obligations result in double support where recipients receive Enhanced 
A-CAM to improve speed to 25/3 Mbps and then could apply for BEAD 
Program funds to deploy 100/20 Mbps broadband to those same locations?
    25. Pursuant to the Broadband DATA Act, the Commission must use its 
new fixed deployment maps ``when making any new award of funding with 
respect to the deployment of broadband internet access service intended 
for use by residential and mobile customers.'' In accord with the 
Broadband DATA Act, the Commission tentatively concludes that it will 
use the new fixed deployment maps when making any new award of funding 
to an A-CAM provider. The Commission seeks comment, specifically, on 
how its new fixed deployment maps should be applied to determine 
eligible areas and deployment obligations for the Enhanced A-CAM 
program.
    26. The Commission also seeks comment on the impact of challenges 
to the Broadband Data Collection map. The Broadband DATA Act requires 
the Commission to accept challenges to both the Fabric and the 
availability maps, and those challenges will occur regularly to help 
improve all subsequent versions of the Fabric and the map. Given the 
importance of challenges to the accuracy of the Fabric and the map, and 
the continuous opportunity for challenges, when for the purposes of the 
Enhanced A-CAM should the Commission establish the post-Fabric 
locations? Should the Commission allow for a period of challenges to 
the fixed deployment reflected in the maps before relying upon them to 
award funding? Challenges to fixed broadband must be resolved within 
the timeframe established by the Commission when establishing the rules 
for the Broadband Data Collection. Can the Commission establish a 
different deadline for resolution of challenges associated with 
Enhanced A-CAM locations? If so, how long should challengers and 
providers have to resolve challenges before the Commission award 
funding? The Commission seeks comment on these questions and any other 
aspect of how it should comply with the requirements of the Broadband 
DATA Act in this program.
    27. Pursuant to current A-CAM rules, as with other high-cost 
support mechanisms, the Universal Service Administrative Company (USAC) 
will recover an amount of support from A-CAM participants that do not 
meet their final deployment obligations. In those situations, Sec.  
54.320(d)(2) of the Commission's rules require that USAC recover ``the 
percentage of support that

[[Page 36288]]

is equal to 1.89 times the average amount of support per location 
received in the state for that carrier over the term of support for the 
relevant number of locations plus 10 percent of the eligible 
telecommunications carrier's total relevant high-cost support over the 
support term for that state.'' The Commission seeks comment on the 
applicability of this general rule to Enhanced A-CAM participants. On 
the other hand, is a stricter penalty more appropriate, given that the 
Fabric and Broadband Data Collection may permit the Enhanced A-CAM 
program to rely on a more accurate location count?
    28. The Coalition proposes that Enhanced A-CAM carriers be 
considered in full compliance with their deployment obligations if they 
deploy to 95% of their required locations. For A-CAM I and A-CAM II 
carriers, the Commission has allowed ``some flexibility in their 
deployment obligations'' and permitted them to deploy to 95% of the 
required locations by the end of the 10-year term. Further, the 
Commission noted that ``to the extent that an electing carrier deploys 
to less than 100 percent of the requisite locations, the remaining 
percent of locations would be subject to the same deployment 
obligations as for the carrier's capped locations.'' Because these 
locations were still subject to deployment obligations, the Commission 
concluded that, unlike the price cap recipients of Connect America 
Phase II model support, it was not necessary for A-CAM recipients to 
refund any support when they took advantage of the 5% flexibility. For 
Enhanced A-CAM carriers, however, as with Rural Digital Opportunity 
Fund (RDOF) recipients, the Commission expects that using the Fabric 
will ensure that the location counts are more accurate than the data 
upon which it developed previous deployment obligations. Moreover, 
under the Enhanced A-CAM proposal, there are no ``capped locations'' or 
associated deployment obligations to apply to locations that are not 
fully funded. Thus, the Commission proposes not to extend the same kind 
of location count flexibility to Enhanced A-CAM carriers and seek 
comment on its proposal. Nonetheless, are there reasons why a buffer of 
this type may be appropriate or necessary under Enhanced A-CAM? Would a 
smaller buffer (i.e., one that considered Enhanced A-CAM carriers to be 
in full compliance if they deployed to 99% of their required locations) 
be sufficient to protect the Commission's interests in full deployment? 
How would this comport with the Commission's goal of creating 
enforceable commitments?
    29. With other agencies' ongoing broadband initiatives, including 
NTIA's BEAD Program, there is the potential for two providers to 
receive funding from different sources to deploy broadband to the same 
locations. The Commission seeks comment on how it may avoid such 
overlap in the Enhanced A-CAM program to maximize broadband deployment 
to unserved and underserved locations. For example, should the 
Commission require Enhanced A-CAM carriers to make binding commitments 
regarding specific locations based on the Fabric after it is created? 
Should any such binding commitments include an obligation to deploy at 
least 100/20 Mbps broadband service for all or some percentage of those 
specific locations? Should the Commission instead require carriers to 
commit to deployment at particular speeds at the census block level? If 
the BEAD Program requires full deployment by the end of a particular 
year, should Enhanced A-CAM likewise require full deployment by the end 
of that same year or even sooner? The Commission also seeks comment on 
the sequencing of Enhanced A-CAM with the BEAD Program. Should the 
Commission proceed with Enhanced A-CAM commitments before BEAD Program 
allocations? Should the Commission instead refrain from acting on the 
Enhanced A-CAM proposal until after the BEAD Program has awarded 
funding? What are the impacts of these options? Finally, should the 
Commission require, as a condition of accepting Enhanced A-CAM support, 
that carriers coordinate with the states in which they are receiving 
support to mitigate the risk of duplicative funding? The Commission 
invites states, in particular, to comment on these issues.
    30. Interim Deployment Milestones--Consistent with other high-cost 
support mechanisms, including the existing A-CAM I and A-CAM II 
mechanisms, the Coalition proposes that Enhanced A-CAM participants 
meet interim deployment milestones before the final milestone of 100% 
of locations. Specifically, the Coalition proposes that Enhanced A-CAM 
carriers deploy 100/20 Mbps broadband service to at least 30% of 
eligible locations by the end of the second year after the program 
begins. Each subsequent year, carriers would be required to deploy to 
an additional 10% of eligible locations until meeting the final 
obligation of deploying 100/20 Mbps service to 90% of eligible 
locations. The Commission seeks comment on whether these particular 
interim deployment milestones would be appropriate if it were to adopt 
the eight-year deployment timeframe the Coalition has proposed, and 
also what interim deployment milestones would be appropriate if the 
Commission were to require deployment in four years, such as in the 
BEAD program, or a different timeframe. Should the Commission require 
deployment to the same number of additional locations each year?
    31. The Commission tentatively concludes that any new interim 
milestones, for carriers that elect Enhanced A-CAM support, would 
supersede those associated with A-CAM I and A-CAM II. Retaining the 
interim milestones associated with the existing programs would 
introduce unnecessary administrative complexity. Moreover, the 
Commission expects that the Enhanced A-CAM milestones will require 
accelerated deployment at higher speeds, rendering previous milestones 
moot. The Commission seeks comment on this tentative conclusion. If the 
Commission were to retain the existing interim milestones for carriers 
electing Enhanced A-CAM support, is there a way to simplify deployment 
milestones in a way that is both fair and ensures regular progress?
    32. Likewise, the Commission seeks comment on the applicability of 
the existing mechanisms for withholding support from A-CAM I and A-CAM 
II participants that do not meet interim deployment milestones, and 
whether a similar mechanism should apply to Enhanced A-CAM. Sec.  
54.320(d)(1) of the Commission's rules specifies different tiers of 
compliance gaps associated with different percentages of withheld 
support, with the goal of encouraging carriers to come into compliance 
and complete deployment in order to recover support. Should Enhanced A-
CAM participants be subject to the same mechanisms for withholding 
support as A-CAM I and A-CAM II participants for failing to meet 
interim deployment milestones?
    33. Coordination of Deployment Obligations with BEAD Program. The 
Coalition proposes that carriers electing Enhanced A-CAM support meet 
the proposed deployment obligations set forth above by the end of the 
eighth year under the enhanced program. The Commission seeks comment on 
the Coalition's proposal and whether the Commission should adopt a 
timeframe aligned closer to the BEAD Program, which generally requires 
buildout in four years after subgrants are made. To minimize 
administrative complexity and prioritize higher-speed broadband 
deployment, the Commission tentatively concludes that any carriers 
electing

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Enhanced A-CAM support would be subject only to the final deployment 
obligations associated with Enhanced A-CAM support, which would 
supersede existing A-CAM I and A-CAM II final deployment obligations. 
The Commission seeks comment on this proposal.
    34. Performance Measures--To ensure that recipients of high-cost 
universal service support deploy networks meeting their performance 
obligations, the Commission requires that those carriers annually test 
and report the speed and latency of a random sample of locations. 
Carriers that fail to meet the required performance standards are 
subject to additional reporting and may have a percentage of universal 
service support withheld based on the level of non-compliance. However, 
those carriers subject to support withholding that later come into 
compliance may have their support restored. A-CAM I carriers have begun 
the required performance testing as of this year, while A-CAM II 
carriers are currently required to conduct pre-testing, under which no 
support reductions are assessed as long as the carrier performs the 
pre-testing and reports the results in a timely manner. The Commission 
invites comment on whether these existing performance testing 
requirements applicable to A-CAM I and A-CAM II carriers should 
continue to apply to Enhanced A-CAM carriers, or whether any 
improvements to the testing requirements should be made.
    35. Affordability--The Commission next considers the issue of 
affordability for customers of Enhanced A-CAM carriers. Promoting 
access to affordable, high-speed broadband is a priority for the 
Commission. And the Commission notes the important role that the 
Affordable Connectivity Program (ACP) is playing to help consumers 
obtain affordable or in many cases no cost internet services. In the 
context of the FCC's high-cost support programs, the Commission notes 
that all recipients of those funds, including A-CAM participants, must 
certify that broadband rates do not exceed the reasonably comparable 
benchmark announced annually by the Wireline Competition Bureau (the 
Bureau). The Commission also notes that, pursuant to the Infrastructure 
Act, subgrantees of the BEAD Program are required to offer at least one 
``low-cost broadband option.'' The Commission seeks comment on the 
extent to which A-CAM providers are participating in the ACP or 
Lifeline programs or otherwise offer affordable internet plans. The 
Commission also seeks comment on whether it should require or 
incentivize Enhanced A-CAM carriers to participate in ACP. If so, 
should there be any minimum performance characteristics for the 
affordable option (e.g., minimum download and upload speeds, usage 
allowances, and maximum latency)? The Commission seeks comment on this 
approach, how to implement this approach, and how it should determine 
the appropriate characteristics. At the same time, the Commission notes 
that it did not require similar minimum performance characteristics for 
plans from providers electing to participate in ACP. What other 
interactions between an affordable option, the Lifeline program, and 
the ACP should the Commission consider?
    36. To achieve these deployment obligations, the Coalition proposes 
to retain the basic framework of A-CAM support but increase the total 
amount paid by increasing the cap on support, increasing the number of 
eligible locations, and extending the term of support. The Coalition 
estimates that, if all eligible carriers elect the Enhanced A-CAM, as 
it is proposed, the impact of increasing the cap and the number of 
eligible locations would be to increase A-CAM support by $389.5 million 
per year from approximately $1.1 billion per year to $1.49 billion per 
year, a 35.4% increase. Further, the proposal adds six years of support 
for most A-CAM I and A-CAM II carriers (eight years of additional 
support in the case of A-CAM I carriers that did not accept Revised A-
CAM I support in 2019).
    37. The Commission seeks comment regarding whether the A-CAM 
framework, and especially the model on which it is based, continues to 
be an appropriate method of calculating support going forward. Given 
the amount of time that has passed and the pace of technological 
developments since the development of the model, it seems likely that 
some model inputs are no longer the most appropriate for estimating the 
cost to provide service. The Commission notes in particular that 
location data and the need for assumptions about the placement of 
locations, which have a significant impact on model cost estimates, 
likely have changed or improved since the development of the model. On 
the other hand, a proceeding to develop an updated model would be time 
consuming and may not yield significantly different or more accurate 
results. What are the costs and benefits associated with relying on the 
existing model? Should the Commission develop a new cost model based 
upon 2020 census geographies and updated inputs?
    38. The Commission also seeks comment on the overall plan and scope 
of the Coalition's support proposal, particularly in context of the 
deployment obligations discussed in this document. The Commission 
recognizes that the Coalition's proposal is intended to match its 
members' estimated long-term revenue requirements with the proposed 
deployment obligations and term of support. Do the proposed deployment 
obligations justify the proposed support increases, both in the 
aggregate and for specific A-CAM recipients? Are there other support 
mechanisms the Commission should explore to increase the efficiency of 
the support amounts in these areas? For example, the Commission has 
recognized the benefits of competitive mechanisms to efficiently 
allocate high-cost universal service support. The Commission seeks 
comment on what mechanism would be appropriate to allocate support most 
efficiently in this instance, given the time-sensitivity of receiving 
binding commitments to provide service at a level of at least 100/20 
Mbps and the ongoing commitments to provide support for 25/3 Mbps 
service to A-CAM I and A-CAM II carriers through 2028. To the extent 
that these general questions have particular bearing on specific 
changes proposed by the Coalition, the Commission seeks comment in the 
following.
    39. Support Calculation--The Commission seeks comment on the 
Coalition's proposal to increase the cap on support. Currently, support 
for most eligible locations is capped at $200 per month. For A-CAM II 
carriers, eligible locations in Tribal areas are capped at $213.12 in 
order to accommodate a lower support threshold. The Coalition proposes 
increasing the cap on support to $300 per location or 80% of model 
costs, whichever is greater. The Coalition's proposal would 
significantly increase the amount of model-based support to A-CAM 
carriers. For the 291 carriers to which the $300 cap would apply, 
Commission staff estimates that the number of locations in currently 
eligible census blocks that would be ``fully funded'' at $300 would 
increase to 719,061 from 682,200. The alternative support calculation 
equal to 80% of model-estimated costs implies a funding cap in excess 
of $300 for 136 companies. While 40 companies would have an implied cap 
of less than $400, pursuant to Commission staff analysis, 29 would have 
an implied cap of more than $1000. To provide the amount of support 
proposed by the Coalition, without the 80% of costs provision, the 
funding cap would need to be set at approximately $500. Is this

[[Page 36290]]

methodology consistent with the model design and framework? What is the 
rationale or justification for providing support as a percentage of 
model costs in some instances, rather than relying on a higher cap? 
Also, because upgrading capacity of existing fiber is less costly than 
installing new fiber, should the Commission offer a lower level of 
support for those areas where the provider has already deployed fiber? 
The Commission invites economic studies that address the efficiency of 
authorizing funding to existing A-CAM providers to build networks 
providing service of at least 100/20 Mbps as compared to maintaining 
the current A-CAM programs. The Commission seeks further comment on how 
to determine the appropriate amount of support recognizing existing 
commitments and funding to build networks in these areas. What are the 
incremental costs of the proposed commitments under the Enhanced A-CAM 
proposal? Would a subsidy that covered those costs be sufficient, and 
if not, what other costs should be covered, such as recovery of costs 
for existing A-CAM locations and why?
    40. Pursuant to A-CAM II, census blocks in Tribal lands have a 
lower support threshold of $38.38 and a funding cap of $213.12, along 
with separately enforceable deployment obligations. The Commission 
seeks comment regarding how this Tribal Broadband Factor should be 
incorporated into Enhanced A-CAM. Do the generally increased support 
amounts and universal deployment obligations relieve the need for a 
separate Tribal Broadband Factor? Further, the Commission seeks comment 
on how to address intergovernmental coordination and eligibility for 
locations on Tribal lands. The Commission notes that, under the BEAD 
Program, a commitment to deploy broadband will not be considered 
enforceable ``unless it includes a legally binding agreement, which 
includes a Tribal Government Resolution, between the Tribal Government 
of the Tribal Lands encompassing that location, or its authorized 
agent, and a service provider offering qualifying broadband service to 
that location.''
    41. Eligible Locations--The Coalition proposes to use eligible 
model locations, rather than eligible post-Fabric locations, to 
calculate support. However, the Broadband DATA Act requires that, after 
the creation of the Fabric and associated maps, the Commission use 
those maps ``when making any new award of funding with respect to the 
deployment of broadband internet access.'' The Commission seeks comment 
on the use of eligible model locations to calculate support, and 
specifically how it can reconcile the difference between model 
locations and Fabric locations, especially in cases where the number of 
model locations significantly exceeds the number of serviceable 
locations in the Fabric. The Commission notes that model costs are 
significantly affected by location density, and if the model were run 
with fewer locations, in many cases the per-location cost of providing 
service would likely increase. For that reason, it may not be 
appropriate to reduce support on a pro rata basis simply because the 
number of actual locations in the Fabric is ultimately fewer than in 
the model. Nonetheless, there may be instances in which the number of 
locations to be served is so greatly overstated by the model that it 
may create an apparent windfall to provide support based on model 
locations. In similar circumstances, the Commission requires a pro rata 
support adjustment when an RDOF support recipient's updated location 
count is less than 65% of the Connect America Cost Model locations 
within the recipient's area in a state. Would such an approach be 
useful for the Enhanced A-CAM plan and comply with the Broadband DATA 
Act?
    42. The Coalition additionally proposes expanding the number of 
eligible locations in two ways. First, the Coalition proposes to add 
census blocks that were ineligible for A-CAM I because they were FTTP-
served by the incumbent or an affiliate. In the 2016 Rate-of-Return 
Reform Order, the Commission excluded from eligibility for A-CAM I 
census blocks that were FTTP-served in order to prioritize model 
support to those areas that were then unserved. In the December 2018 
Rate-of-Return Reform Order, however, the Commission made such census 
blocks eligible for A-CAM II, concluding that their inclusion would 
``promote more and higher speed deployment to location in those census 
blocks that do not currently have 25/3 Mbps or better service'' while 
recognizing that areas with partially or fully deployed fiber to the 
premises may still require high-cost support to maintain existing 
service. The Commission did not, in the same Order, make such census 
blocks eligible for revised A-CAM I offers. Given the Commission's 
recognition that areas with partial or complete fiber deployment may 
still require ongoing support for expenses, it may be reasonable to 
provide some support for these census blocks. Further, doing so could 
harmonize the treatment of A-CAM I and A-CAM II carriers. The 
Commission seeks comment on the Coalition's proposal to make eligible 
for Enhanced A-CAM census blocks excluded from A-CAM I because they 
were FTTP-served.
    43. Nonetheless, the Commission also recognizes that it may not be 
cost-effective to provide support for census blocks where an A-CAM 
carrier is already offering service of at least 100/20 Mbps, and 
therefore seek comment on the Enhanced A-CAM treatment of census blocks 
that are fully served. The Commission notes that A-CAM carriers have 
already reported deployment of 100/20 Mbps or faster service to over 
347,000 eligible locations. Thirty-three A-CAM carriers have deployed 
at least 100/20 Mbps service to at least 90% of the eligible locations 
in their service areas. The Commission therefore seeks comment 
regarding how to use the post-Fabric broadband deployment maps to 
establish eligibility for Enhanced A-CAM of census blocks to which an 
A-CAM carrier has already deployed 100/20 Mbps or faster to service to 
all locations in the block. One possibility would be for the Enhanced 
A-CAM offer to simply exclude locations in fully deployed census 
blocks, which would no longer be eligible for A-CAM support if a 
carrier elected the offer, and support for those locations would cease 
upon authorization of Enhanced A-CAM. However, the Commission 
recognizes that an A-CAM provider reporting 100/20 Mbps or faster 
service for certain locations may require continued support for those 
locations, particularly if the provider relied on loans to fund 
deployment under the terms of the existing A-CAM programs. If continued 
support is required for the fully deployed census blocks, the remaining 
authorized support associated with those census blocks could be 
incorporated into the Enhanced A-CAM support. Another option would be 
for the Enhanced A-CAM offers to include fully deployed census blocks, 
but only at the current A-CAM I or A-CAM II funding levels. The 
Commission seeks comment on these options.
    44. The Coalition's second proposed expansion of eligibility is for 
census blocks that were excluded from A-CAM I because they were served 
by an unsubsidized competitor with at least 10/1 Mbps service. Given 
that locations with 10/1 Mbps service are considered ``unserved'' 
pursuant to the Infrastructure Act, it may be reasonable to expand 
eligibility to include these census blocks. On the other hand, some 
unsubsidized competitors serving these census blocks may now provide at 
least

[[Page 36291]]

100/20 Mbps. The Commission therefore proposes to re-assess the 
eligibility of census blocks under Enhanced A-CAM for all carriers 
based on the provision of service by unsubsidized competitors. The 
Commission seeks comment regarding what test should be applied to 
determine whether census blocks should be ineligible because they are 
served by an unsubsidized competitor. The Commission tentatively 
concludes that locations, rather than census blocks, in which an 
unsubsidized competitor provides at least 100/20 Mbps should be 
ineligible for support because those locations would be considered 
``served'' pursuant to the Infrastructure Act. The Commission seeks 
comment on whether eligibility by served location, rather than census 
block, will be feasible for an Enhanced A-CAM offer.
    45. Under A-CAM II census blocks were ineligible if an unsubsidized 
competitor provided at least 25/3 Mbps service. Should census blocks 
served by an unsubsidized competitor with at least 25/3 Mbps also be 
ineligible for support under Enhanced A-CAM? The Commission notes that 
such census blocks would be considered underserved pursuant to the 
Infrastructure Act. However, the provision of at least 25/3 Mbps 
service by an unsubsidized competitor may be evidence that the A-CAM 
carrier is not the most efficient provider of service in that area and 
that another program, such as BEAD, may be able to more cost 
effectively achieve deployment of 100/20 Mbps or faster service. 
Finally, the Commission notes that in some cases, these may be census 
blocks that were split by a study area boundary and a price cap carrier 
reported providing service in the census block. The Commission seeks 
comment regarding how those census blocks should be tested for 
eligibility. For both A-CAM I and A-CAM II carriers, should competitive 
overlap be re-assessed in all census blocks before making a new offer? 
What criteria should be used?
    46. What other considerations should be made with respect to the 
eligibility of locations under an Enhanced A-CAM offer? The Commission 
proposes to remove from eligibility locations that are already funded 
through another federal/state program at 100/20 Mbps or higher, such as 
the Broadband Infrastructure Program, American Rescue Plan Act 
Coronavirus State and Local Fiscal Recovery Funds, and Tribal Broadband 
Connectivity Program. Is it necessary to independently address the 
funding commitments made by each of these programs, or do any of the 
other eligibility rules proposed above effectively cover the locations 
associated with these commitments? To the extent that locations are 
funded through state mechanisms, rather than federal mechanisms, how 
should the Commission incorporate that into the eligibility 
requirements? How can the Commission collect state funding information 
in an efficient and complete manner? The Commission seeks comment on 
this proposal. On the other hand, are there other unserved or 
underserved locations in census blocks currently ineligible for A-CAM I 
or A-CAM II that can and should be made eligible for support?
    47. Extended Term--The Coalition proposes that the increased 
support take effect immediately, with increased support paid 
retroactively to the beginning of 2022, and extend through 2034. The 
Commission recognizes that a primary purpose of extending the term of 
support is to provide additional time to recover the capital used to 
meet deployment obligations. As a result, the Commission would expect 
the term could be adjusted to coincide with adjustments to support 
amounts or deployment obligations, such as because of reconciliation 
with the Fabric. The Commission seeks comment on the Coalition's 
proposed term. What is the justification to pay increased support 
retroactively and prior to the imposition of the new Enhanced A-CAM 
obligations? How should the term be adjusted, if at all, if changes are 
made to the deployment obligations or annual support amounts?
    48. Glide Path Carriers--Under A-CAM I and A-CAM II, carriers 
receive additional transitional support if their model-based support is 
less than the amount of legacy support they received prior to their 
election of model-based support (glidepath carriers). This transitional 
support declines over time based on the size of each carrier's support 
reduction. The Coalition proposes that glidepath companies that elect 
Enhanced A-CAM would ``either (1) continue to receive support pursuant 
to their current schedule until such time as their total annual support 
is less than that under the Enhancement Plan and, at that time, they 
would convert to the Enhancement Plan funding level; or (2) receive 
support at the level provided for in the Enhancement Plan.'' The 
Commission seeks comment on this proposal. Alternatively, should the 
glidepath carriers' transitional support amounts and schedule be re-
assessed based on their new, Enhanced A-CAM support amounts?
    49. The Coalition proposes that each A-CAM I or A-CAM II 
participant be permitted to elect, on a state-by-state basis, whether 
to participate in the Enhanced A-CAM program. A-CAM participants that 
decline to participate in the enhanced program would continue under the 
terms of the participant's existing A-CAM program, ``with no changes to 
the company's deployment schedule, obligations, term, or support 
level.'' The Commission seeks comment on this proposal and whether 
alternatively, they should be subject to an ``all or nothing'' 
election.
    50. The Commission seeks comment regarding whether all current A-
CAM I and A-CAM II carriers should be eligible to participate in 
Enhanced A-CAM. The Commission notes that some A-CAM carriers already 
have widespread deployment of 100/20 Mbps or faster service. The 
Commission estimates that 75 companies have deployed at least 100/20 
Mbps to 75% or more of their proposed Enhanced A-CAM locations, 
including 33 companies that serve 90 percent of their locations. Of 
these, 20 companies serve all proposed Enhanced A-CAM locations with at 
least 100/20 Mbps. In all, 347,620 A-CAM eligible locations are served 
with 100/20 Mbps or faster service. Given that the stated purpose of 
providing additional support pursuant to Enhanced A-CAM is to permit 
carriers to deploy higher levels of 100/20 Mbps or faster broadband, is 
it an effective use of limited universal service funds to provide 
support to carriers that have already achieved universal or near-
universal deployment of such speeds? Given that such carriers may 
require support for ongoing provision of service in these areas and may 
have obtained financing to deploy networks with these higher speed 
levels, is it reasonable to permit them to elect the extended A-CAM 
term for that purpose?
    51. The Commission seeks comment regarding whether eligibility for 
Enhanced A-CAM should be extended to include rate-of-return carriers 
that currently receive legacy support. The Commission notes that 
including carriers currently receiving legacy support would be 
generally consistent with the Commission's longstanding objective of 
transitioning away from legacy rate-of-return support mechanisms and 
providing high-cost support based on a carrier's forward-looking, 
efficient costs. Would extending Enhanced A-CAM offers otherwise be 
consistent with the Commission's goals? Are there other eligibility 
considerations, at the company or census block levels, that should be 
applied specifically to legacy carriers?

[[Page 36292]]

    52. In the event that the Commission adopts an Enhanced A-CAM 
mechanism, it seeks comment on the procedures for carriers to make this 
election. The Commission anticipates that it would instruct the Bureau 
to follow the same processes for making offers and processing elections 
as were used for A-CAM II. How much time do carriers require to 
evaluate their offers and make an election? In this document, the 
Commission seeks comment regarding whether locations should be re-
assessed for eligibility based on unsubsidized competitors offering at 
least 100/20 Mbps. Assuming data from the Broadband Data Collection 
(BDC) are used to determine exclusion from eligibility, should the BDC 
challenge processes (i.e., challenges to provider availability data and 
to the Fabric data) be used to determine eligible locations for 
Enhanced A-CAM, or is a separate process warranted? If the BDC 
processes are used for this purpose, how much time would be appropriate 
for these processes to run before the Commission makes eligibility 
determinations based on them? Are there any other procedural 
considerations related to the election process that the Commission 
should consider?
    53. The Commission also seeks comment on adopting a minimum carrier 
participation threshold for implementing the Enhanced A-CAM program. If 
participation in any Enhanced A-CAM program is low, increasing 
broadband deployment in A-CAM I and A-CAM II areas may be more 
efficient and effective through another program. If the Commission 
adopts a minimum threshold, what should the parameters be? For example, 
should there be a set percentage of eligible locations in the entire 
program beyond which the program continues, or should the minimum 
threshold be a set percentage of A-CAM I and A-CAM II carriers opting 
into an enhanced program? In the event that the Commission does not 
adopt an Enhanced A-CAM mechanism, it seeks comment on how to use 
support efficiently and effectively in these areas, including where 
broadband deployment funding is provided by another agency to either an 
Eligible Telecommunications Carrier (ETC) high-cost recipient or 
another provider.
    54. As discussed in this document, the Commission seeks to align 
key aspects of the proposed Enhanced A-CAM program with NTIA's BEAD 
Program. To implement a requirement from the Infrastructure Investment 
and Jobs Act, service providers receiving BEAD funding must attest that 
they have a cybersecurity risk management plan and a supply-chain risk 
management plan. The cybersecurity risk management plan must specify 
security and privacy controls and reflect the latest version of the 
NIST Framework for Improving Critical Infrastructure Cybersecurity. The 
supply chain risk management plan must be based on key practices in 
NIST publication NISTIR 8276 and other supply chain risk management 
guidance from NIST that specifies the supply chain risk management 
controls being implemented. Service providers must reevaluate and 
update both plans periodically and as events warrant, and provide the 
plans to NTIA at NTIA's request. The Commission seeks comment on 
whether it should require similar cybersecurity and supply chain risk 
management practices and certifications for A-CAM recipients or, 
alternatively, for all carriers receiving high-cost support.
    55. The Commission notes that providers receiving Connect America 
Fund Broadband Loop Support (CAF BLS) support are subject to mandatory 
deployment obligations to deploy broadband service of at least 25/3 
Mbps to a carrier-specific number of locations by the end of 2023. The 
Commission plans to separately and subsequently consider the deployment 
obligations and funding levels for such providers that will apply 
beginning in 2024. In considering how to update these commitments going 
forward, the Commission anticipates addressing questions regarding the 
level of services to be delivered, identifying eligible locations, and 
the level of support required. The Commission seeks comment now on 
whether and how it should align the deployment obligations and required 
timeframes for deployment for CAF BLS carriers with any Enhanced A-CAM 
plan adopted by the Commission. The Commission notes that such 
alignment would ensure similar deployment in areas served by carriers 
receiving support from an Enhanced A-CAM Plan and those receiving 
support from CAF BLS. In addition, such alignment would ease 
administration of the programs by minimizing the number of interim and 
final milestones in high-cost programs. Accordingly, the Commission 
invites comment generally on any additional benefits and potential 
costs of aligning the high-cost funding programs for rate of return 
areas.
    56. In this NPRM, the Commission also evaluates opportunities to 
improve the administration of the high-cost program to enhance its 
efficiency and efficacy and better safeguard the USF. Specifically, the 
Commission seeks comment on: changes to annual reporting requirements 
and certification obligations; review of mergers between rate-of-return 
local exchange carriers (LECs); support for exchanges acquired by a CAF 
BLS recipient; the process to merge commonly-owned study areas; the 
schedule for CAF BLS recipients to file optional quarterly line counts; 
and the process to relinquish ETC status. The Commission also seeks 
comment on whether stakeholders have any additional recommendations to 
improve the administration of the high-cost program. Many high-cost 
support recipients are small businesses; the Commission therefore seeks 
comment generally on how the proposed rule changes will affect them.
    57. The Commission seeks comment regarding several changes that 
would improve or streamline annual reporting and certification 
requirements.
    58. The Commission has established performance and other 
programmatic reporting obligations to ensure accountability for high-
cost support recipients and monitor compliance. By March 1 annually, 
support recipients that serve fixed locations must report locations 
deployed to in the prior year in satisfaction of build-out obligations 
and certify compliance with deployment milestones, as applicable. By 
July 1 annually, recipients must file certain financial and operations 
information. By October 1 annually, each state or ETC, if the ETC is 
not subject to the jurisdiction of a state, must file a certification 
that support was used during the preceding calendar year and will only 
be used in the coming calendar year for ``the provision, maintenance, 
and upgrading of facilities and services for which support is 
intended.''
    59. First, the Commission seeks comment on modifying Sec.  
54.313(i) of its rules to streamline the process for submitting annual 
high-cost reports by requiring that such filings be made only with the 
universal service program administrator, USAC. In the 2017 Annual 
Report Streamlining Order, the Commission decided it would ``no longer 
require ETCs to file duplicate copies of Form 481 with the FCC and with 
states, U.S. Territories, and/or Tribal governments beginning in 
2018.'' However, because the change was contingent upon USAC completing 
the rollout of an online portal for the annual report, the Commission 
did not modify the rule at that time. That rollout has since been 
completed and the Commission proposes to revise 54.313(i) to clarify 
that annual reports must only be filed with USAC. The Commission finds 
that this modification would

[[Page 36293]]

remove ambiguity and reduce administrative burdens on support 
recipients, while ensuring that governmental entities continue to have 
ready access to the information they need. The Commission seeks comment 
on this proposal.
    60. Second, and along similar lines, current rules require an 
annual certification be filed with both the Office of the Secretary 
(OSEC) of the Commission and USAC stating that support has been and 
will be used only for the intended purposes. To ease administrative 
burdens by eliminating duplication, the Commission proposes to remove 
the requirement to file with the Office of the Secretary and require 
only submission with USAC. Because Commission staff routinely 
coordinates with USAC, the Commission does not expect that the ability 
of the Commission to monitor the annual certification would be 
diminished in any way. The Commission seeks comment on this proposal 
and whether removing the requirement to file with OSEC would inhibit 
the filing becoming ``part of the public record maintained by the 
Commission.'' The Commission invites commenters to identify any other 
opportunities to streamline filing and reporting obligations to improve 
efficiency without compromising the effective oversight of the high-
cost program.
    61. Third, the Commission seeks comment on a proposal to more 
closely link support reductions with failing to certify locations in 
order to minimize confusion and improve carrier accountability. The 
Commission's rules establish deadlines for carriers to file reports and 
certifications, as well as a schedule for reducing support if the 
deadlines are missed. Currently, support reductions do not occur until 
January of the following year, well after the carrier may have come 
into compliance. The Commission proposes to more closely align any 
support reduction with the failure to comply with the reporting 
deadline by reducing support in the month immediately following the 
date of the missed deadline. The Commission believes this change will 
eliminate confusion that has occurred when support decreases 
unexpectedly months after a deadline is missed (and well after a 
carrier may have come into compliance) and facilitate carrier 
accountability. Since support reductions are based on the number of 
days late and payments usually occur mid-month, there may be situations 
where a filing is not received in time for USAC to calculate the 
requisite support reduction for the next month's payment. In those 
instances, the Commission proposes that USAC implement the support 
reduction in the following month as needed. The Commission seeks 
comment on this proposal. Alternatively, should the Commission continue 
to defer support reductions until January 1 of the following year? What 
is the best process to reduce support to ensure carriers comply with 
the reporting and certification deadlines and avoid confusion?
    62. Fourth, the Commission seeks comment on modifying reporting 
requirements for performance testing to require all high-cost support 
recipients serving fixed locations to report on a quarterly basis. 
High-cost support recipients must perform broadband performance testing 
one week out of each quarter. Recipients that are not in compliance 
with speed and latency requirements must report the results of the 
performance tests quarterly, while other recipients must only report 
the results of tests conducted in the preceding calendar year annually 
on July 1. Support reductions are assessed for non-compliant carriers, 
but withheld support is returned once they achieve compliance.
    63. The Commission seeks comment on making the quarterly reporting 
of performance test results mandatory for all recipients and not just 
those that are not in compliance with speed and latency requirements. 
Currently, there can be a lengthy lag between when quarterly 
performance testing is completed and when it is reported to the 
Commission and USAC. For example, under the Commission's current rules, 
a performance test conducted in January 2022 would not have to be 
reported until July 2023. Monitoring network performance to make sure 
consumers in supported areas are receiving service consistent with 
commitments is critical. The Commission's experience with the current 
lag time is that it has inhibited such monitoring. While the Commission 
already monitors non-compliant carriers through quarterly reporting, 
there are benefits to requiring it for all carriers. Quarterly 
reporting would allow the Commission to better track that carriers are 
meeting its requirements and determine if there are significant 
problems with a carrier's network. In addition, quarterly reporting 
would allow the Commission to better monitor trends that may interfere 
with consumer service and testing results, to more quickly adopt any 
necessary changes to its testing mechanism. While quarterly reporting 
could increase the burden on carriers, the Commission does not 
anticipate that any increased burden will be significant given that 
carriers are obligated to conduct tests on a quarterly basis already. 
Furthermore, the Commission believes that any increase in the burden is 
offset by the benefits. The Commission believes that some carriers may 
find additional reporting helpful--given that the performance measures 
can be a large volume of data, it could be helpful to report less of 
the data more often rather than all of it once a year. The Commission 
seeks comment regarding this analysis and its proposal. Also, the 
Commission notes that some carriers have not yet reported locations 
when they are scheduled to begin performance pre-testing or testing. 
The Commission seeks comment on the timeframe for such carriers to 
begin pre-testing or testing once such a carrier reports High Cost 
Universal Broadband locations for the first time.
    64. The Commission also seeks comment on revising the filing 
schedule for quarterly reporting of performance tests. Currently, the 
Commission requires quarterly reporting of carriers' pre-testing data, 
reflecting the results of tests conducted prior to the commencement of 
the official test period. Those results must be reported within one 
week after the end of the quarter in which the tests are conducted, to 
provide insight into carriers' experience with the testing process. The 
Commission proposes that the same schedule be adopted to report other 
carrier testing. Does this provide carriers with sufficient time to 
prepare the results for filing? If not, the Commission seeks comment on 
how much time is required, and what filing deadlines it should require 
instead. The Commission's goal in establishing a specific reporting 
schedule is to provide certainty, promote accountability and conform 
with timelines for other testing protocols to minimize confusion.
    65. Fifth, the Commission seeks comment on whether to relieve 
privately held rate-of-return carriers that receive A-CAM support of 
the requirement to file annually a report of the company's financial 
condition and operations --an issue raised by NTCA--The Rural Broadband 
Association (NTCA) in a petition for rulemaking. The Commission's rules 
require all privately held rate-of-return carriers that obtain high-
cost support to provide ``a full and complete annual report of the 
company's financial condition and operations as of the end of the 
preceding fiscal year.'' The Commission adopted this requirement at a 
time when all rate-of-return support recipients received support 
through cost-based support mechanisms.
    66. The Commission declined to impose such a requirement on price 
cap

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carriers receiving model-based support, concluding that it was not 
``necessary to require the filing of such information by recipients of 
funding determined through a forward-looking cost model . . . even if 
those recipients are privately held.'' The design of the model, the 
Commission expected, would produce a level of support ``sufficient but 
not excessive,'' thereby negating the need for reporting audited 
financial information. Should the Commission apply the same rationale 
to extend similar relief to A-CAM carriers, as NTCA requests? 
Commenters are invited to address NTCA's assertion that granting relief 
to A-CAM carriers will provide regulatory parity. Given that the term 
of support for CAF (Connect America Fund) Phase II model-based carriers 
ended, and A-CAM carriers are the only high-cost recipients remaining 
on model-based support, should the Commission take a fresh look at this 
obligation? The Commission notes, however, that most carriers that 
received CAF Phase II model-based support are publicly traded 
companies, and it can obtain such information directly for Securities 
and Exchange Commission registrants. What are the benefits, if any, in 
retaining the financial reporting requirement for privately held A-CAM 
carriers in enhancing the Commission's ability to assess the efficacy 
of its models? The Commission also seeks comment on other, potentially 
less burdensome, mechanisms that would allow us to monitor as needed. 
For instance, should the Commission collect financial information on a 
less frequent but recurring basis or collecting on an as-needed basis 
instead?
    67. The NTCA Petition for Rulemaking also requests the same relief 
for Alaska Plan recipients. Alaska Plan recipients receive frozen 
support--essentially support set at 2011 cost-based levels. The 
Commission seeks comment on NTCA's request. The Commission notes, 
however, that the frozen support Alaska Plan carriers receive was not 
model-based, and it seeks comment on the benefits and burdens of 
keeping the filing requirement in place for Alaska Plan carriers.
    68. Sixth, the Commission proposes to modify its rules to create a 
consistent one-time grace period for all compliance filings. Currently, 
several rules have a specific date, after the due date, by which 
carriers may file reports without a support reduction if they have not 
previously missed a deadline. For example, filings under Sec.  54.316 
for certain ETCs are due annually March 1 and have a grace period until 
March 5, but that same rule provides a grace period of ``three days'' 
for other ETCs. Filings under Sec.  54.314 are due annually October 1 
and have a grace period until October 5. Filings submitted under Sec.  
54.313 are due annually July 1 and have a grace period until July 5. 
The Commission proposes to modify all grace periods to ``within four 
business days.'' For instance, this change would mean that where a 
filing is due March 1, recipients must file by the end of March 5 or be 
subject to a support reduction. Consistent with the Commission's 
Computation of Time rule, if March 5 falls on a weekend or holiday, the 
filing must be made by the end of the next business day to avoid the 
support reduction. The Commission expects that establishing a uniform 
grace period will reduce confusion, and it seeks comment on its 
proposal.
    69. Seventh, the Commission proposes to codify uniform deployment, 
certification and location reporting deadlines for all CAF Phase II 
auction funding recipients to reduce confusion and facilitate efficient 
program administration. As originally adopted, these deadlines were 
tied to the date that individual funding recipients were authorized to 
receive support, resulting in a patchwork compliance scheme due to the 
rolling nature of the authorizations. Recognizing that the varied 
deadlines could create confusion and unnecessarily burden program 
administration and oversight, the Bureau waived Sec. Sec.  54.310(c), 
54.316(b)(4), and 54.316(c)(2), and instead adopted uniform deadlines 
governing deployment, certification, and location reporting 
obligations. Consistent with the waiver, which will remain in effect 
through the support term, deployment deadlines for all CAF Phase II 
auction support recipients, including New York's New NY Broadband 
Program, fall at the end of the calendar year, and certification and 
location reporting deadlines fall on March 1 annually. The Commission 
proposes to make the waiver permanent by formally modifying the rules 
consistent with the waiver and seek comment on this proposal. Along 
similar lines, and to bring some clarity in the Commission's rules to 
the certification deadlines for the Bringing Puerto Rico Together Fund 
stage 2 fixed program and the Connect USVI Fund stage 2 fixed program, 
the Commission proposes to make explicit the March 1 deadline in the 
respective authorization public notices, which will also align the 
programs' rules with the rules for other high-cost programs. The 
Commission seeks comment on these proposals.
    70. Eighth, the Commission seeks comment on methods to obtain more 
accurate information on the speeds of broadband service provided 
through the high-cost programs. Sec.  54.316(a) requires recipients of 
high-cost support to report the geocoded locations to which they have 
deployed facilities capable of meeting the Commission's requirements. 
The current language directs ETCs to report ``whether they are offering 
service providing speeds of at least 4 Mbps downstream/1 Mbps upstream, 
10 Mbps downstream/1 Mbps upstream, and 25 Mbps downstream/3 Mbps 
upstream,'' consistent with their required minimum deployment 
obligations. While this reporting enables USAC and the Commission to 
determine whether carriers have met their minimum obligations, it does 
not require carriers to provide a complete picture of the maximum 
speeds actually being offered, advertised, or delivered to customers, 
where the carrier is providing speeds higher than the obligated 
minimum. The Commission seeks comment regarding how to get a better 
overall understanding of actual deployment. Should the Commission 
require carriers to report the speeds they would offer a location, in 
addition to the required speeds that the deployment meets? How would 
the Commission define such ``maximum available speeds''? Would it be 
most appropriate to define these maximum speeds in terms of advertised 
speeds or is there some other measure of available speeds that could be 
used? Are there any other methods the Commission can use to ensure that 
it has reliable data regarding available broadband speeds at each 
location? Would it be feasible to extrapolate maximum available speeds 
for locations in an area from the data produced by the performance 
testing?
    71. Ninth, the Commission proposes to amend Sec.  54.316(a)(1) to 
more accurately reflect the current scope of its location reporting 
obligations. This rule directs ``recipients of high-cost support with 
defined broadband deployment obligations'' to ``provide to the 
Administrator on a recurring basis information regarding the locations 
to which the [ETC] is offering broadband service in satisfaction of its 
public interest obligations . . . .'' Given that all filers subject to 
this requirement have an established deadline to submit information, 
the Commission finds some of the qualifying language to be extraneous 
and therefore propose to delete ``on a recurring basis'' from the rule. 
The Commission seeks comment on this proposal.
    72. Tenth, the Commission proposes to modify the voice and 
broadband rate

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certifications to clarify the reporting period. The original 
requirements for the FCC Form 481 were adopted in the USF/ICC 
Transformation Order, 76 FR 73830, November 29, 2011. The Commission's 
discussion makes clear that the reports, which include voice and 
broadband pricing, are annual and would be due April 1, covering the 
prior year. Therefore, for the annual report due in a particular year, 
the relevant time period for the pricing data was originally intended 
to be January 1 to December 31 of the prior year. The Commission then 
moved the date of the annual reports to July 1. As a result of moving 
the date to July 1, the Commission moved the date for the relevant 
voice rates to the rate in place as of June 1 the year the report was 
filed, as opposed to the prior year. This was done to facilitate the 
implementation of the rate floor provision, which was subsequently 
eliminated. However, the Commission did not change the applicable 
reporting period for broadband rates.
    73. Since the rate floor has been eliminated, there is no longer 
the same justification for carving out voice rates so they cover the 
year the report is filed rather than the prior year. Because all other 
reporting in the FCC Form 481 coves the prior calendar year, including 
compliance with the broadband rates, it creates confusion to treat 
voice rates differently. Recipients, not infrequently, have expressed 
confusion as to what year's rate benchmarks they are certifying 
compliance with when completing the FCC Form 481. To address this 
confusion and aid in program administration, the Commission proposes to 
modify the voice and broadband rate certification rules to make 
explicit that recipients are certifying to compliance with pricing 
benchmarks in the prior year. In other words, when certifying the FCC 
Form 481 by July 1, 2022, recipients will be certifying compliance with 
voice and broadband benchmarks for 2021. The Commission seeks comment 
on this proposal, and it also proposes to modify the rules to reflect 
that the Public Notice announcing the benchmarks is issued by the 
Bureau and the Office of Economics and Analytics.
    74. Finally, the Commission proposes a new rule to allow high-cost 
support recipients to report locations that were deployed to during a 
given year, even after the reporting period has ended. The Commission 
requires that recipients with defined deployment obligations annually 
certify all locations deployed to in satisfaction of public interest 
obligations in the prior calendar year. For example, by March 1, 2023, 
recipients must certify all locations deployed to in 2022 where they 
began offering voice and at least one broadband plan that meets or 
exceeds the minimum speed and minimum usage, complies with latency 
requirements, and is offered at or below the applicable benchmark rate.
    75. The Commission's rules set forth an explicit support reduction 
mechanism when recipients fail to certify on time. However, the 
Commission's rules do not allow a recipient that certified locations by 
the deadline to later certify additional locations that were deployed 
to during that reporting year. Since the Commission's rules require 
recipients to certify all locations deployed to in the prior year by 
the deadline, currently recipients must seek a waiver showing good 
cause to certify additional locations after the deadline.
    76. There are sound reasons to prohibit recipients from filing 
deployed to locations after the reporting deadline (untimely reported 
locations) absent good cause. For instance, if the Commission were to 
freely allow recipients to certify additional locations after the 
deadline, recipients would have no incentive to file locations on time 
unless the locations were needed to meet a build-out obligation. 
Accurate and timely location data are critical for the Commission and 
USAC to monitor compliance and for USAC to conduct verifications.
    77. However, the Commission also believes that it is inequitable 
and undesirable to prohibit recipients from certifying untimely 
reported locations under all circumstances. Such prohibition may 
ultimately result in recipients falling short of a deployment milestone 
and then facing support recovery and/or withholding when they have in 
actuality sufficiently and timely met their deployment obligations. 
Moreover, it seems unreasonable that a recipient that, for example, 
misses the March 1st deadline completely and certifies all locations by 
March 21st is permitted to count all those locations towards its 
milestone, but a recipient that certifies the vast majority of its 
locations by March 1st and subsequently seeks to certify additional 
locations by March 18th, for example, could not do so absent good 
cause--resulting in not being able to count those locations towards 
milestones. Furthermore, allowing recipients to certify untimely 
reported locations comports with their duty to correct or amend 
submitted information. Finally, prohibiting recipients from certifying 
untimely reported locations would leave us without a fully accurate 
representation of deployment using high-cost support.
    78. To balance these considerations, the Commission seeks comment 
on whether it should amend its rules to allow recipients to file 
untimely reported locations, but also to apply a corresponding support 
reduction to provide a continued incentive for timely filing. The 
Commission proposes that the amended rule would apply, prospectively, a 
support reduction mechanism where recipients' support will be reduced 
for untimely reported locations based on the percentage of a 
recipient's total locations for the reporting year being reported after 
the deadline and the number of days after the deadline. Such a 
mechanism, which bases the reduction on the number of days late, is 
consistent with the existing mechanism that reduces support for failure 
to complete the annual certification. In addition, factoring in the 
number (percentage) of untimely reported locations for the reporting 
year further helps make the reduction in support proportional to the 
severity of the rule violation.
    79. The Commission seeks comment on this proposal and whether it 
strikes the right balance of allowing untimely report locations to 
count towards deployment but also ensuring timely filing and efficient 
administration of the program. The Commission also seeks comment on any 
alternative proposals and whether there should be a cap on a support 
reduction for untimely reported locations. To further help efficiently 
administer this regime, unlike in the Commission's rule regarding late 
certifications, it does not propose to apply a one-time grace period or 
to reduce support at a minimum a full week given that in these 
situations recipients will have filed some locations by the deadline.
    80. The Commission proposes to amend its rules to provide a simpler 
process for rate-of-return carriers seeking to merge, consolidate, or 
acquire one or more rate-of-return study areas to calculate the new 
entity's Access Recovery Charge; CAF ICC (Connect America Fund 
Intercarrier Compensation) support; and reciprocal compensation and 
switched access rate caps. The Commission anticipates that adopting 
such revisions to its rules would reduce the burden on carriers that 
currently have to seek waivers of the existing rules whenever they seek 
to merge, consolidate or acquire one or more rate-of-return study 
areas. Such rule revisions would also reduce the burden on the 
Commission of acting on these waiver requests and facilitate the 
Commission's goal of encouraging

[[Page 36296]]

carriers to become more efficient and to increase productivity. The 
Commission seeks comment on these proposals and on the costs and 
benefits of adopting these proposals.
    81. In the USF/ICC Transformation Order, the Commission capped 
rate-of-return carriers' reciprocal compensation and interstate 
switched access rates and most intrastate switched access rates at the 
rates in effect on December 29, 2011. At the same time, the Commission 
adopted a multi-year transition for reducing most terminating switched 
access rates to bill-and-keep. As part of these reforms, the Commission 
adopted an Access Recovery Charge that allows rate-of-return carriers 
to recover a portion of the intercarrier compensation revenues lost due 
to the Commission's reforms, up to a defined amount (Eligible Recovery) 
for each year of the transition. If the projected Access Recovery 
Charge revenues are not sufficient to cover the entire Eligible 
Recovery amount, rate-of-return carriers may elect to collect the 
remainder in CAF ICC support.
    82. The calculation of a rate-of-return Local Exchange Carriers 
(LECs) Eligible Recovery begins with its Base Period Revenue. A rate-
of-return carrier's Base Period Revenue is the sum of certain 
intrastate switched access revenues and net reciprocal compensation 
revenues received by March 31, 2012, for services provided during 
Fiscal Year (FY) 2011, and the projected revenue requirement for 
interstate switched access services for the 2011-2012 tariff period. 
The Base Period Revenue for rate-of-return carriers was reduced by 5% 
initially and is reduced by an additional 5% in each year of the 
transition. A rate-of-return carrier's Eligible Recovery is equal to 
the adjusted Base Period Revenue for the year in question, less, for 
the relevant year of the transition, the sum of: (1) projected 
intrastate switched access revenue; (2) projected interstate switched 
access revenue; and (3) projected net reciprocal compensation revenue. 
The adjusted Base Period Revenue is also adjusted to reflect certain 
demand true-ups. A rate-of-return LECs Base Period Revenue is 
calculated only once, but is used during each step of the intercarrier 
compensation recovery mechanism calculations for each year of the 
transition.
    83. The Commission's rules for calculating Eligible Recovery are 
based on study-area-specific data, and do not address what adjustments 
may be necessary when study areas are merged after one company acquires 
all or a portion of another. Because a carrier's Base Period Revenue 
and interstate revenue requirement are study-area-specific, as are a 
carrier's reciprocal compensation and capped switched access rates, 
combining two study areas requires a decision about how best to combine 
two different Base Period Revenues and interstate revenue requirements, 
and--when the study areas do not have the same capped rates--a waiver 
of the Commission's rules to establish the proper rate levels.
    84. Since the Eligible Recovery rules have taken effect, several 
rate-of-return LECs have partially or fully merged study areas or 
acquired new study areas. Because the intercarrier compensation and CAF 
ICC rules adopted in the USF/ICC Transformation Order do not 
contemplate study area changes, these carriers have had to file 
petitions for waiver of portions of Sec. Sec.  51.917 and 51.909 of the 
Commission's rules to reset the applicable Base Period Revenue 
associated with the study areas they have merged or acquired. In this 
line of waiver orders, the Bureau has permitted carriers to add 
together the relevant interstate revenues from FY 2011 of the merging 
study areas and the 2011-2012 interstate revenue requirement of the 
merging study areas. This calculation then creates a combined Base 
Period Revenue which serves as the baseline for calculating the 
Eligible Recovery of the company serving the combined study area going 
forward. To facilitate mergers for entities that participate in the 
National Exchange Carrier Association (NECA) Tariff, the Bureau has 
granted waivers to allow NECA to place the consolidated study area in 
the rate band that most closely approximates the merged entities' cost 
characteristics. The rate for that rate band then becomes the rate cap 
for that rate element in the merged study area.
    85. The waiver process has imposed additional costs on these 
carriers and, in some instances, delayed mergers or acquisitions. The 
Commission's experience in reviewing these waiver requests has shown 
that certain patterns recur with predictable outcomes that can be 
addressed through rule revisions rather than by requiring individual 
waiver requests in the future. Adopting such revisions to the 
Commission's rules would reduce the burden on carriers and on the 
Commission. The Commission, therefore, proposes to revise its rules to 
eliminate the need for a rate-of-return LEC that is involved in a 
merger, consolidation, or acquisition with another rate-of-return 
carrier to obtain a waiver of these intercarrier compensation rules 
when certain conditions apply.
    86. First, the Commission proposes to revise Sec.  51.917 of its 
rules to provide that merging, consolidating, or acquiring rate-of-
return carriers shall combine separate Base Period Revenue and 
interstate revenue requirement factors when two or more entire study 
areas are being merged. This approach is consistent with the 
Commission's precedent and the proposed rule revisions will eliminate 
the need for individual waiver requests in these circumstances. If only 
a portion of a study area is being acquired and merged into another 
study area, the Commission proposes to allow the acquiring entity and 
the remaining entity to allocate the Base Period Revenue and interstate 
revenue requirement levels of the partial study area on the proportion 
of access lines acquired compared to the total access lines in the pre-
merger study area of the remaining entity. This proposal is consistent 
with the approach the Commission has previously taken when dealing with 
transactions affecting only part of a study area.
    87. Similarly, the Commission proposes to revise Sec.  51.909 of 
its rules to establish procedures that will allow us to set new rate 
caps for merging rate-of-return carriers without requiring the merging 
carriers to file a waiver request. The Commission proposes to amend its 
rule to provide that, for merging, acquiring or consolidating carriers 
that will file their own tariffs, the new rate cap for each rate 
element shall be the weighted average of the preexisting rates in each 
of the study areas. For merging carriers that participate in the NECA 
traffic-sensitive tariff and that have to establish a single switched 
access rate for a rate element, the Commission proposes that the new 
consolidated rate, as determined by NECA pursuant to the rate bands in 
its traffic-sensitive tariff, will serve as the new rate cap if the 
merged entity's CAF ICC support will not increase as a result of the 
merger by more than 2% above the amount received by the merging 
entities, using the demand and rate data for the preceding calendar 
year. The Commission invites comment on these proposals. In particular, 
the Commission seeks comment on whether the two percent factor 
represents a reasonable level for determining that a merger should be 
allowed at the rate(s) determined by NECA.
    88. Finally, the Commission proposes to streamline the process by 
which rate-of-return carriers seeking to merge, consolidate, or acquire 
study areas can establish new reciprocal compensation and switched 
access rate caps if the impact of using the weighted average of the 
preexisting rates in the previous

[[Page 36297]]

study areas to establish the rates for the new combined study area 
would result in the new entity's CAF ICC support exceeding the 2 
percent threshold described in this document. Under those 
circumstances, the Commission proposes to require carriers to file a 
petition for waiver, specifying the impact of the merger, acquisition 
or consolidation on the new entity's rates and CAF ICC support, but the 
Commission proposes to adopt a streamlined public notice period after 
which petitions for waiver would be deemed granted after 60 days if 
there is no opposition and the Bureau or Commission has not acted to 
extend the review period. The Commission proposes that the petitions 
for waiver be submitted for consideration via the Commission's ECFS and 
a courtesy copy emailed to the Chief, Pricing Policy Division, Wireline 
Competition Bureau.
    89. The Commission further proposes that carriers filing petitions 
under these revised rules must include: (1) a description of the 
merging study areas, or portions of study areas involved; (2) the 
switched access demand; (3) relevant pre- and post-merger rates for the 
study areas involved, as proposed; (4) the effect on CAF ICC resulting 
from the merger; and (5) a brief statement of the benefits of the 
merger. The Bureau would then release a public notice announcing 
receipt of a petition and a 30-day comment period would begin upon 
release of that public notice. Reply comments would be due 45 days 
after the release of the public notice. If no oppositions are received, 
the petition for waiver will be deemed granted on the 60th day after 
the public notice, unless the Bureau or Commission acts to prevent the 
``automatic'' grant. If an opposition is received during the comment or 
reply comment period, the Commission proposes that the petition would 
be automatically removed from the streamlined grant process. The 
Commission invites parties to comment on this proposal and whether the 
requested information to be included in the petition is sufficient to 
permit interested parties and the Bureau or Commission to determine 
whether the proposed merger is in the public interest. The Commission 
proposes to delegate to the Bureau the authority to review, analyze and 
approve these petitions for waiver.
    90. The Commission seeks comment on amending Sec.  54.902 of its 
rules, which governs the amount of CAF BLS support a rate-of-return 
carrier receives when it acquires exchanges from another incumbent 
local exchange carrier, to better reflect the current state of high-
cost universal service.
    91. Currently, Sec.  54.902(a) describes how CAF BLS support is 
calculated when a rate-of-return carrier acquires exchanges from 
another rate-of-return carrier, while Sec.  54.902(b) specifies that 
when a rate-of-return carrier acquires exchanges from a price cap 
carrier, the acquired exchanges remain subject to the support amounts 
and obligations established by CAF Phases I and II. Since this rule was 
last amended, the Commission has adopted and implemented several new 
high-cost support mechanisms, for areas served by both rate-of-return 
and price cap carriers, as well as non-incumbent LEC's. These new 
mechanisms include auction-based mechanisms and model-based support for 
rate-of-return carriers (A-CAM I and II).
    92. The Commission proposes to modify Sec.  54.902(a) to expressly 
limit its application, so that a carrier would only be eligible to 
receive CAF BLS support for exchanges acquired from existing CAF BLS 
recipients. The Commission further proposes to modify Sec.  54.902(b) 
to include any model-based, auction-based or frozen support. 
Specifically, the Commission proposes that any transferred exchanges 
subject to Sec.  54.902(b) would be subject to the support and 
obligations in place at the time of the exchange. These proposed 
modifications would be consistent generally with the rule as originally 
adopted, when all rate-of-return carriers were subject to the 
Interstate Common Line Support (ICLS) mechanism (which was renamed CAF 
BLS when modernized by the Commission in 2016). Because the Commission 
also created a voluntary pathway to model-based support for rate-of-
return carriers in 2016, it is no longer accurate to assume, as Sec.  
54.902(a) does, that all rate-of-return carriers are subject to CAF 
BLS. Similarly, because the Commission has adopted competitive bidding 
processes to allocate high-cost support in many areas, rate-of-return 
carriers may acquire exchanges from carriers that are not subject to 
rate-of-return or price cap regulation. The proposed rule would clarify 
that only transferred exchanges that are already eligible for CAF BLS 
would be eligible for CAF BLS after their transfers. Though exchanges 
not subject to ICLS (or CAF BLS) would have been eligible for ICLS (or 
CAF BLS) as the rule was originally designed in 2001, today the 
alternatives to CAF BLS are model-based or auction-based support 
mechanisms in which support recipients have agreed to fixed support 
amounts in exchange for defined obligations over specified terms, and 
it would not typically be appropriate for those fixed obligations and 
support amounts to be changed because some exchanges were transferred. 
This includes exchanges served by rate-of-return carriers under the A-
CAM I and A-CAM II mechanisms. The Commission, of course, may address 
unique circumstances justifying a different result through the waiver 
process. The Commission seeks comment on these proposals.
    93. The Commission seeks comment on several proposals to modify the 
study area boundary waiver process. A study area is a geographic 
segment of an incumbent LECs telephone operations and forms the basis 
of the jurisdictional separations of its costs and its cost studies. 
The Commission froze all study area boundaries effective November 15, 
1984 to prevent incumbent LECs from establishing separate study areas 
made up of only high-cost exchanges to maximize their receipt of high-
cost universal service support. The study area freeze also prevents 
incumbent LECs from transferring exchanges among existing study areas 
for the purpose of increasing interstate revenue requirements and 
maximizing universal service compensation. Carriers operating in more 
than one state typically have one study area for each state, and 
carriers operating in a single state typically only have a single study 
area.
    94. In 1996, the then Common Carrier Bureau (now known as the 
Wireline Competition Bureau) issued an order stating that ``carriers 
are not required to seek study area waivers if: (1) a separately 
incorporated company is establishing a study area for a previously 
unserved area; (2) a company is combining previously unserved territory 
with one of its existing study areas in the same state; and (3) a 
holding company is consolidating existing study areas in the same 
state.'' Accordingly, any carrier seeking to merge study areas that 
does not fall into one of those three categories must petition the 
Commission for a waiver. In 2004, the Commission adopted the Skyline 
Order, which stated that ``the Commission has never enunciated an 
exception to its study area waiver requirements for unserved areas 
[and] that treating an area as unserved when it was previously within 
an existing study area would be inconsistent with the purpose of the 
study area freeze.'' It clarified that ``a study area waiver request 
must be filed with the Commission where a company is seeking to create 
a new study area from within one or more existing study areas.'' The 
Skyline Order therefore modified the 1996 Bureau-level order by 
prohibiting the establishment of a new

[[Page 36298]]

study area in previously unserved territory if the unserved area was 
within an existing study area.
    95. In the USF/ICC Transformation Order, the Commission recognized 
the administrative burden the ad hoc approach placed on the Bureau. 
Because most petitions are ``routine in nature,'' the Commission 
adopted a streamlined process to address all study area waiver 
petitions. Under this process, once a carrier submits a petition the 
Bureau will issue a public notice seeking comment and noting whether 
the waiver is appropriate for streamlined treatment. Absent any further 
action by the Bureau, if the waiver is subject to streamlined 
treatment, it is granted on the 60th day after the reply comment due 
date. Alternatively, if the petition requires further analysis and 
review, the public notice will state that the petition is not suitable 
for streamlined treatment.
    96. Since then, the Commission has substantially reformed how 
universal service support is awarded. Incumbent LECs now receive 
support in different ways, including model-based support and auction 
support, in addition to traditional rate-of-return regulation (legacy 
support). Currently, when a carrier that owns multiple study areas 
within a state wants to merge these commonly-owned study areas, the 
carrier is not required to petition the Commission. However, allowing 
carriers to merge study areas that receive support under different 
mechanisms could create opportunities for carriers to manipulate the 
Commission's support. For example, if a carrier sought to merge two 
study areas in a state, one of which receives legacy rate-of-return 
support and another that receives model-based support, it would be 
difficult for the Commission to determine which lines in the new study 
area are entitled to rate-of-return support, which typically increases 
as the number of lines increases. Similarly, such a merger could create 
confusion regarding tracking carrier mandatory build-out obligations by 
changing the areas in which they must deploy broadband. For example, an 
A-CAM carrier receives a fixed amount of support in exchange for 
deploying broadband to a specific number of locations based on costs as 
determined by a model. If the A-CAM carrier merges its study area with 
a legacy rate-of-return study area in the same state owned by the same 
carrier, it would then be harder to track the deployment obligations 
under each program.
    97. In addition, allowing carriers to add unserved areas to their 
study areas, even if those areas are not within an existing study area, 
could undermine the Commission's goal of distributing universal service 
support in the most efficient manner possible. In furtherance of this 
objective, the Commission has encouraged the transition to model-based 
support and auction-awarded support over traditional rate-of-return 
regulation. If rate-of-return carriers can extend their existing study 
area into unserved areas, this could result in the use of legacy 
support in additional areas when such areas could be served with 
broadband more efficiently using model-based or auction-based support.
    98. To avoid the issues created by merging study areas receiving 
different types of support or the expanded use of less efficient 
support methodologies, the Commission seeks comment on requiring 
waivers for all study area boundary changes. Requiring changes in study 
area boundaries to be reviewed by the Bureau would ensure that any 
proposed changes are not approved until the effects on the Fund are 
taken into account. Because the Commission has already established a 
streamlined process for such waivers, those requests that do not 
present any support or other concerns could be swiftly granted, thereby 
minimizing the burden on those carriers proposing mergers that promote 
efficiency and are clearly in the public interest. The Commissions 
seeks comment on this proposal. Are there any alternatives that the 
Commissions should consider that would address these concerns?
    99. The Commission seeks comment on eliminating optional line count 
filings for CAF BLS support recipients reported on FCC Form 507, or, 
alternatively, updating the filing schedule for optional quarterly line 
counts to better align with the mandatory annual filing deadline.
    100. The Commission adopted quarterly filing provisions for rate-
of-return carriers in 2001 in the Multi-Association Group (MAG) Order. 
The filing schedule tracked the existing schedule for reporting line 
counts for high cost loop support, with annual line counts due on July 
31 each year (reporting line counts as of the prior December 31), and 
quarterly updates due on September 30, December 31, and March 31 (each 
reporting lines as of six months earlier). The quarterly line counts 
were mandatory for rate-of-return carriers serving areas in which a 
competitive ETC was operating, and permissive for all other rate-of-
return carriers. In 2012, mandatory quarterly filings were eliminated 
because competitive ETCs no longer received support based on the 
incumbent rate-of-return carriers' per-line support amounts. In the 
December 2018 Rate-of-Return Reform Order, the Commission changed the 
date of the mandatory annual filing from July 31 to March 31 but did 
not address the optional quarterly updates. As a result, the optional 
quarterly update of lines as of September 30 is due on the same day, 
March 31, as the mandatory annual filing of line counts as of December 
31, and other optional line count filings have an unnecessary six-month 
lag.
    101. The Commission seeks comment on whether to eliminate the 
option of submitting quarterly line counts or alternatively to align 
the schedule to conform to the recently revised schedule for annual 
line count filings. The optional line counts are currently used for two 
purposes. First, USAC uses the quarterly line count updates to 
administer the monthly per-line cap on high-cost universal service 
support each quarter. In practice, only 17 carriers filed updated line 
counts on December 31, 2020, and most of those were not subject to the 
per-line cap. The Commission notes that using the quarterly line counts 
to calculate a carrier's per-line support gives carriers that may be 
subject to monthly per-line cap a benefit, in that they can choose to 
file updated line counts only if the change would increase support to 
the carrier. Second, the quarterly line counts are used to determine 
preliminary CAF BLS when a CAF BLS support recipient acquires exchanges 
from another CAF BLS support recipient. This preliminary CAF BLS amount 
is ultimately subject to true-up based on the carrier's actual cost and 
revenue data, including the transferred exchanges. Under either 
scenario, it is possible that the Commission could rely on the 
mandatory annual line counts with minimal loss of utility. Given the 
limited utility of the quarterly line count filings, should the 
Commission eliminate them altogether?
    102. In the event that the Commission decides to retain the 
optional quarterly filings, it seeks comment on revising the filing 
schedule to align with the recently revised schedule for reporting 
annual lines. Consistent with Sec.  54.903(a)(1), carriers must 
annually report lines counts as of December 31 on March 31. The 
Commission proposes to revise Sec.  54.903(a)(2) to permit carriers 
optionally to report updated lines as of March 31 on June 30, lines as 
of June 30 on September 30, and lines as of September 30 on December 
31. This would eliminate confusion and provide a more consistent flow 
of line count data over the course of the year. The Commission seeks 
comment on this proposal.

[[Page 36299]]

    103. The Commission seeks comment on revising the process by which 
a support recipient subject to a state commission's jurisdiction can 
relinquish its ETC designation by requiring the ETC to provide advance 
notice to the Commission prior to seeking relinquishment and within 10 
days after such relinquishment has been granted.
    104. Section 254(e) of the Communications Act of 1934 provides that 
``only an eligible telecommunications carrier . . . shall be eligible 
to receive specific Federal universal service support.'' States have 
primary jurisdiction for designating ETCs; the Commission generally has 
authority only when ``a common carrier [is] providing telephone 
exchange service and exchange access that is not subject to the 
jurisdiction of a State commission.'' An ETC may relinquish its 
designation ``in any area served by more than one'' ETC so long as 
``the remaining [ETCs] ensure that all customers served by the 
relinquishing carrier will continue to be served.'' Once the requesting 
carrier makes the required showing, the state commission or the 
Commission grants the request for relinquishment.
    105. Where states designate ETCs, the Commission currently has no 
oversight over the ETC relinquishment process. As a result, a carrier 
could seek and be granted relinquishment of its ETC designation while 
it still has high-cost support obligations, such as an outstanding debt 
to USAC or unfulfilled deployment commitment.
    106. Section 54.205 of the Commission's rules requires an ETC 
seeking to relinquish its ETC designation granted by a state commission 
to give advance notice to the state commission. The Commission proposes 
to extend that obligation to also require advance notice to them. In 
addition, after the state commission grants its request to relinquish 
its designation, the Commission proposes to require the ETC to notify 
them within 10 days. The Commission believes the proposed notification 
requirements would help deter waste, fraud, and abuse in the management 
of the USF. In that regard, the Commission notes that, while states are 
largely responsible for granting ETC status, ETCs receive universal 
service support from them on the basis of this designation. Moreover, 
such notification would enable the Commission to end support payments 
in a timely fashion and, where applicable, take action where a carrier 
fails to meet its deployment, performance, or other obligations. 
Conversely, when an ETC does not receive any federal USF support, the 
Commission believes such notification is appropriate as it would allow 
to us confirm that in fact, there are not federal USF issues as stake. 
Given the impact of relinquishments on federal USF support, the 
Commission believes it has ample legal authority to adopt the foregoing 
notice requirements, under Section 254 and as reasonably ancillary 
thereto. The Commission also proposes to find that the benefits of 
providing an additional safeguard to protect the integrity of the Fund 
outweighs any modest burden resulting from the proposed notification 
obligation. The Commission seeks comment on these proposals and 
assessments of legal authority and costs and benefits.
    107. The Commission seeks comment on whether it should consider any 
other clarifications, modifications or additions to its rules in this 
proceeding. Are there modifications that would improve administrative 
efficiency or reduce unnecessary burdens in the high-cost program? Are 
there examples where the Commission's rules have not kept pace or are 
otherwise not aligned with Commission orders? Are there any high-cost 
rules that are reflected solely in Commission orders but not in the 
Commission's rules? In considering additional changes, the Commission 
seeks to balance its goals of facilitating the efficient operation of 
the high-cost program for all parties, while ensuring that the 
Commission continues to protect the fund from waste, fraud and abuse. 
Commenters are invited to specifically address how any suggested 
modifications will meet those goals.
    108. The Commission, as part of its continuing effort to advance 
digital equity for all, including people of color, persons with 
disabilities, persons who live in rural or Tribal areas, and others who 
are or have been historically underserved, marginalized, or adversely 
affected by persistent poverty or inequality, invites comment on any 
equity-related considerations and benefits (if any) that may be 
associated with the proposals and issues discussed herein. 
Specifically, the Commission seeks comment on how its proposals may 
promote or inhibit advances in diversity, equity, inclusion, and 
accessibility, as well the scope of the Commission's relevant legal 
authority.

III. Procedural Matters

    109. Paperwork Reduction Act Analysis. This document contains 
proposed new information collection requirements. The Commission as 
part of its continuing effort to reduce paperwork burdens, will be 
inviting the general public and OMB to comment on the information 
collection requirements contained in this document, as required by the 
Paperwork Reduction Act of 1995, Public Law 104-13. 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.
    110. 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 small entities by the policies and rules proposed in this NPRM. The 
Commission requests written public comments on this IRFA. Comments must 
be identified as responses to the IRFA and must be filed by the 
deadlines for comments provided on the first page of the NPRM. The 
Commission will send a copy of the NPRM, including this IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration (SBA). 
In addition, the NPRM and IRFA (or summaries thereof) will be published 
in the Federal Register.
    111. In this proposed rule, the Commission seeks comment on a 
proposal by the Coalition to achieve widespread deployment of 100/20 
Mbps broadband service throughout the areas served by carriers 
currently receiving A-CAM support, and the Commission initiates a 
targeted inquiry into the management and administration of the high-
cost program of the USF. For more than a decade, the Commission has 
made substantial progress in reforming and modernizing the various 
high-cost universal service support mechanisms. This NPRM continues the 
progress by seeking methods to increase efficiency and efficacy of the 
program.
    112. The proposed action is authorized pursuant to sections 4(i), 
214, 254, 303(r), and 403 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 214, 254, 303(r), and 403.
    113. 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 and by the rule revisions on which the 
Notice seeks comment, 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

[[Page 36300]]

SBA. A ``small-business concern'' is one that: (1) is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the SBA.
    114. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes here, at the outset, three broad groups of small 
entities that could be directly affected herein. First, while there are 
industry specific size standards for small businesses that are used in 
the regulatory flexibility analysis, according to data from the SBA's 
Office of Advocacy, in general a small business is an independent 
business having fewer than 500 employees. These types of small 
businesses represent 99.9% of all businesses in the United States, 
which translates to 32.5 million businesses.
    115. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise that is 
independently owned and operated and is not dominant in its field.'' 
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 
or less to delineate its annual electronic filing requirements for 
small exempt organizations. Nationwide, for tax year 2020, there were 
approximately 447,689 small exempt organizations in the U.S. reporting 
revenues of $50,000 or less according to the registration and tax data 
for exempt organizations available from the IRS.
    116. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2017 Census of Governments indicate that there 
were 90,075 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 36,931 general purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,040 special purpose governments--independent school 
districts with enrollment populations of less than 50,000. Accordingly, 
based on the 2017 U.S. Census of Governments data, the Commission 
estimates that at least 48,971 entities fall into the category of 
``small governmental jurisdictions.''
    117. Small entities potentially affected by the proposed 
regulations herein include Wired Telecommunications Carriers, LECs, 
Incumbent LECs, Competitive Local Exchange Carriers, Interexchange 
Carriers, Local Resellers, Toll Resellers, Other Toll Carriers, Prepaid 
Calling Card Providers, Telecommunications Carriers (except Satellite), 
Cable and Other Subscription Programming, Cable Companies and Systems 
(Rate Regulation Cable System Operators (Telecom Act Standard), All 
Other Telecommunications, Radio and Television Broadcasting and 
Wireless Communications Equipment Manufacturing, Semiconductor and 
Related Device Manufacturing, Software Publishers, Wired Broadband 
internet Access Service Providers, Wireless Broadband internet Access 
Service Providers, internet Service Providers (Non-Broadband), and All 
Other Information Services.
    118. In this NPRM the Commission seeks comment on ways to improve 
the management, administration, and oversight of the high-cost program, 
including: streamlining reporting and certification requirements; 
improving review of mergers between rate-of-return local exchange 
carriers; clarifying support for exchanges acquired by a CAF BLS 
recipient; establishing a streamlined process to merge jointly-owned 
study areas; aligning the schedule for CAF BLS recipients to file 
optional quarterly line count updates; improving the process to 
relinquish ETC status; and improving its audit program. At this time 
the Commission cannot quantify the cost of compliance with the 
potential rule changes discussed in this document. However, the 
Commission does not believe that the costs and/or administrative 
burdens associated with any of the proposal rule changes will unduly 
burden small entities. The Commission discusses the new or modified 
obligations that result in this document, and seek comment on these 
matters, including cost and benefit analyses supported by quantitative 
and qualitative data from the parties in the proceeding.
    119. Specifically, the NPRM seeks comment on a proposal by the by 
Coalition for new A-CAM. The NPRM also seeks comment regarding several 
changes that would improve or streamline annual reporting and 
certification requirements. First, the NPRM seeks comment on and 
proposes modifying Sec.  54.313(i) of the Commission's rules from the 
CFR because, pursuant to a previous Commission order, high-cost 
recipients are no longer subject to the requirement to file annual 
reporting and certifications with the Commission, relevant state 
commissions, relevant or authority in a U.S. Territory, or Tribal 
government now that the information is available from USAC. Second, the 
Commission proposes to align more closely support reductions for a 
carrier's actual failure to comply with the reporting and certification 
deadline by directing USAC to reduce support in the month immediately 
following the date of failure. Third, the NPRM seeks comment on 
quarterly reporting requirements for performance testing, on making 
such requirements mandatory for all high-cost support recipients, and 
on the filing schedule. Fourth, the Commission seeks comment on 
relieving privately held A-CAM carriers of the requirement to file 
audited financials annually. Fifth, the NPRM proposes to modify the 
Commission's rules to create a consistent grace period for all 
compliance filings by modifying all grace periods to ``within four 
business days.'' Sixth the NPRM seeks comment on provisions related to 
the location reporting and certification requirements for ETCs 
receiving high-cost USF support. Seventh, the NPRM proposes to codify 
uniform deployment, certification and location reporting deadlines for 
all CAF Phase II auction recipients and clarify deadlines for the 
Bringing Puerto Rico Together and Connect USVI stage 2 fixed funds. 
Eighth, the NPRM seeks comment on methods to obtain more accurate 
information on the actual speeds of broadband service provided through 
the high-cost programs. Ninth, the NPRM proposes amending Sec.  
54.316(a)(1) by deleting extraneous language to more accurately reflect 
the current scope of the Commission's location reporting obligations. 
Tenth, the NPRM proposes to modify the voice and broadband rate 
certifications rules to clarify the reporting period. Finally, the NPRM 
proposes a support reduction scheme for when a carrier reports some 
locations after the deadline for the reporting period.
    120. In addition, the NPRM seeks comment on proposals to eliminate 
the need for a rate-of-return LEC that is involved in a merger, 
consolidation, or acquisition with another rate-of-return carrier to 
obtain a waiver of specified intercarrier compensation rules when 
certain conditions apply. The NPRM also seeks comment on amending Sec.  
54.902, which governs the amount of CAF BLS received by a rate-of-
return carrier when it acquires exchanges from another incumbent local 
exchange carrier. The NPRM proposes to modify Sec.  54.902(a) to 
expressly limit its application, so that a carrier would only

[[Page 36301]]

be eligible for CAF BLS for exchanges acquired from existing CAF BLS 
recipients, and to modify Sec.  54.902(b) to include any model-based, 
auction-based or frozen support. The NPRM also seeks comment on several 
proposals to modify the study area boundary process.
    121. The NPRM also seeks comment on updating the schedule for CAF 
BLS support recipients to file optional quarterly line counts on the 
FCC Form 507 or, alternatively, eliminating optional quarterly line 
counts entirely. Additionally, the NPRM seeks comment on revising the 
process by which a support recipient can relinquish its ETC designation 
by requiring a certification that all outstanding universal service 
issues have been satisfied prior to relinquishment. Taken together, all 
of these proposals will reduce burdens on carriers and the Commission 
and will encourage carriers to become more efficient and productive.
    122. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (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 and reporting requirements under the rules for such 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 
such small entities.
    123. In the NPRM, the Commission seeks comment from all entities, 
including small entities, regarding the impact of these proposed rules 
to improve the efficiency and efficacy of the high-cost program. The 
NRPM proposes changes that would improve or streamline annual reporting 
and certification requirements and proposes to eliminate a codified 
rule that is no longer applicable. These changes will eliminate 
ambiguity and reduce administrative burdens on all recipients, 
including small entities. The NPRM seeks comment on relieving privately 
held carriers receiving A-CAM support, most of which are small 
entities, of the requirement to file audited financial statements 
annually. The NPRM proposes to adopt consistent grace periods of ``four 
business days'' which will eliminate confusion for all entities from 
grace periods falling on a weekend or holiday. The NPRM also proposes 
to eliminate the need for rate-of-return local exchange carriers, most 
of which are small entities, involved in a merger, consolidation, or 
acquisition with another rate-of-return carrier to obtain a waiver of 
certain intercarrier compensation rules. For carriers that do not 
satisfy the criteria identified for transactions when waiver is not 
required, the NPRM proposes to streamline the CAF ICC merger approval 
process. The Commission asks and will consider alternatives to the 
proposals and on alternative ways of implementing the proposals.
    124. More generally, the Commission expects to consider the 
economic impact on small entities, as identified in comments filed in 
response to the Notice and this IRFA, in reaching its final conclusions 
and taking action in this proceeding. The proposals and questions laid 
out in the NPRM are designed to ensure the Commission has a complete 
understanding of the benefits and potential burdens associated with the 
different actions and methods.

IV. Ordering Clauses

    125. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 4(i), 214, 218-220, 254, 303(r), and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 214, 218-220, 
254, 303(r), and 403, and Sec. Sec.  1.1, 1.3, 1.407, 1.411, and 1.412 
of the Commission's rules, 47 CFR 1.1, 1.3, 1.407, 1.411, and 1.412, 
the petition for rulemaking filed by the ACAM Broadband Coalition, RM-
11868, is granted to the extent discussed herein, and this Notice of 
Proposed Rulemaking is adopted.
    126. It is further ordered that this NPRM will be effective upon 
publication in the Federal Register, with comment dates indicated 
therein.

List of Subjects

47 CFR Part 36

    Communications common carriers, Reporting and recordkeeping 
requirements, Telecommunications, Telephone, Uniform System of 
Accounts.

47 CFR Part 51

    Communications, Communications common carriers, Telecommunications, 
Telephone.

47 CFR Part 54

    Communications common carriers, Health facilities, Infants and 
children, internet, Libraries, Puerto Rico, Reporting and recordkeeping 
requirements, Schools, Telecommunications, Telephone, Virgin Islands.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Proposed Regulations

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR parts 36, 51, and 54 
as follows:

PART 36--JURISDICTIONAL SEPARATIONS PROCEDURES; STANDARD PROCEDURES 
FOR SEPARATING TELECOMMUNICATIONS PROPERTY COSTS, REVENUES, 
EXPENSES, TAXES AND RESERVES FOR TELECOMMUNICATIONS COMPANIES

0
1. The authority citation for part 36 continues to read as follows:

    Authority:  47 U.S.C. 151, 152, 154(i) and (j), 201, 205, 220, 
221(c), 254, 303(r), 403, 410, and 1302 unless otherwise noted.

0
2. Amend Sec.  36.4 by adding paragraph (c) to read as follows:


Sec.  36.4  Streamlining procedures for processing petitions for waiver 
of study area boundaries.

* * * * *
    (c) As of 30 days after the effective date of this paragraph, 
incumbent local exchange carrier must seek waiver for study area 
boundary changes notwithstanding any prior exemptions from such waiver 
requests including, but not limited to, when a company is combining 
previously unserved territory with one of its study areas or a holding 
company is consolidating existing study areas within the same state. 
The Wireline Competition Bureau or the Office of Economics and 
Analytics may accept study area boundary corrections without a waiver.

PART 51--INTERCONNECTION

0
3. The authority citation for part 51 continues to read as follows:


    Authority:  47 U.S.C. 151-55, 201-05, 207-09, 218, 225-27, 251-
52, 271, 332, unless otherwise noted.

0
4. Amend Sec.  51.909 by adding paragraph (a)(7) to read as follows:


Sec.  51.909  Transition of rate-of-return carrier access charges.

    (a) * * *
    (7) Rate-of-return carriers subject to Sec.  51.917 that merge 
with, consolidate with, or acquire, other rate-of-return carriers shall 
establish new rate caps as follows:
    (i) If the merged entity will file its own access tariff, the new 
rate cap for each rate element shall be the average of the preexisting 
rates of each study area

[[Page 36302]]

weighted by the number of access lines in each study area; or
    (ii) If the merged entity participates in the Association traffic-
sensitive tariff and has to establish a single switched access rate for 
one or more rate elements, the new consolidated rate reflecting the 
cost characteristics of the merged entity, as determined by the 
Association, will serve as the new rate cap if the merged entity's CAF 
ICC support will not be more than two percent higher than the combined 
amount received by the entities prior to merger, using rate and demand 
levels for the preceding calendar year. A merging entity that does not 
satisfy this requirement may file a streamlined waiver petition that 
will be subject to the following procedure:
    (A) Public notice and review period. The Wireline Competition 
Bureau will issue a public notice seeking comment on a petition for 
waiver of the two-percent threshold established by this rule.
    (B) Comment cycle. Comments on petitions for waiver may be filed 
during the first 30 days following public notice, and reply comments 
may be filed during the first 45 days following public notice, unless 
the public notice specifies a different pleading cycle. All comments on 
petitions for waiver shall be filed electronically, and shall satisfy 
such other filing requirements as may be specified in the public 
notice.
    (C) Effectuating waiver grant. A waiver petition filed pursuant to 
this paragraph will be deemed granted 60 days after the release of the 
public notice seeking comment on the petition, unless opposed or the 
Commission acts to prevent the waiver from taking effect. The 
Association and the petitioner shall coordinate the timing of any 
tariff filing necessary to effectuate this change. The revised rate 
filed by the Association shall be the rate cap for purposes of applying 
Sec.  51.909(a).
* * * * *
0
5. Amend Sec.  51.917 by revising paragraph (c) to read as follows:


Sec.  51.917  Revenue Recovery for Rate-of-Return Carriers.

* * * * *
    (c) Base Period Revenue--(1) Adjustment for Access Stimulation 
activity. 2011 Rate-of-Return Carrier Base Period Revenue shall be 
adjusted to reflect the removal of any increases in revenue requirement 
or revenues resulting from Access Stimulation activity the Rate-of-
Return Carrier engaged in during the relevant measuring period. A Rate-
of-Return Carrier should make this adjustment for its initial July 1, 
2012, tariff filing, but the adjustment may result from a subsequent 
Commission or court ruling.
    (2) Adjustment for Merger, Consolidation or Acquisition. Rate-of-
return carriers subject to this section that merge with, consolidate 
with, or acquire, other rate-of-return carriers shall establish 
combined Base Period Revenue and interstate revenue requirement levels 
as follows:
    (i) If the merger or acquisition is of two or more study areas, the 
Base Period Revenue and interstate revenue requirement levels of the 
study areas shall be added together to establish a new Base Period 
Revenue and interstate revenue requirement for the newly combined 
entity; or
    (ii) If a portion of a study area is being acquired and merged into 
another study area, the Base Period Revenue and interstate revenue 
requirement levels of the partial study area shall be based on the 
proportion of access lines acquired compared to the total access lines 
in the pre-merger study area.
* * * * *

PART 54--UNIVERSAL SERVICE

0
6. 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, 
229, 254, 303(r), 403, 1004, and 1302, 1609, and 1752, unless 
otherwise noted.

0
7. Amend Sec.  54.205 by revising the last sentence of paragraph (a) to 
read as follows:


Sec.  54.205  Relinquishment of universal service.

    (a) * * * An eligible telecommunications carrier that seeks to 
relinquish its eligible telecommunications carrier designation for an 
area served by more than one eligible telecommunications carrier shall 
give advance notice to the State commission and the Commission of such 
relinquishment.
* * * * *
0
8. Amend Sec.  54.310 by revising paragraph (c) introductory text to 
read as follows:


Sec.  54.310  Connect America Fund for Price Cap Territories--Phase II.

* * * * *
    (c) Deployment obligation. Recipients of Connect America Phase II 
model-based support must complete deployment to 40 percent of supported 
locations by December 31, 2017, to 60 percent of supported locations by 
December 31, 2018, to 80 percent of supported locations by December 31, 
2019, and to 100 percent of supported locations by December 31, 2020. 
Recipients of Connect America Phase II awarded through a competitive 
bidding process, including New York's New NY Broadband Program, must 
complete deployment to 40 percent of supported locations by December 
31, 2022, to 60 percent of supported locations December 31, 2023, to 80 
percent of supported locations by December 31, 2024, and to 100 percent 
of supported locations by December 31, 2025. Compliance shall be 
determined based on the total number of supported locations in a state.
* * * * *
0
9. Amend Sec.  54.313 by revising paragraphs (a)(2) and (3) and (i), 
the first sentence of paragraph (j)(1), paragraph (j)(2), and adding 
paragraphs (j)(3) and (4) to read as follows:


Sec.  54.313  Annual reporting requirements for high-cost recipients.

    (a) * * *
    (2) A certification that the pricing of the company's voice 
services during the prior calendar year is no more than two standard 
deviations above the applicable national average urban rate for voice 
service, as specified in the public notice issued by the Wireline 
Competition Bureau and the Office of Economics and Analytics;
    (3) A certification that the pricing of a service that meets the 
Commission's broadband public interest obligations during the prior 
calendar year is no more than the applicable benchmark to be announced 
annually in a public notice issued by the Wireline Competition Bureau 
and the Office of Economics and Analytics, or is no more than the non-
promotional price charged for a comparable fixed wireline service in 
urban areas in the states or U.S. Territories where the eligible 
telecommunications carrier receives support;
* * * * *
    (i) All reports pursuant to this section shall be filed with the 
Administrator.
    (j) * * *
    (1) Annual deadline. In order for a recipient of high-cost support 
to continue to receive support or to retain its eligible 
telecommunications carrier designation, it must submit the annual 
reporting information required by this section annually by July 1 of 
each year. * * *
    (2) Grace period. An eligible telecommunications carrier that 
submits the annual reporting information required by this section after 
July 1, or the quarterly reporting required by subparagraph (j)(3) of 
this section after the required date, but within 4 business days will 
not receive a reduction in support if the eligible

[[Page 36303]]

telecommunications carrier and its holding company, operating 
companies, and affiliates as reported pursuant to paragraph (a)(4) of 
this section have not missed the July 1 deadline in any prior year.
    (3) Performance testing reports. Reports of network performance 
testing results pursuant to subparagraph (a)(6) of this section shall 
be filed quarterly on the first day of the second month following the 
quarter in the tests were conducted, except reports for the first 
quarter of each year may be reported on July 1 in conjunction with the 
annual reports.
    (4) Support reductions. Any support reductions resulting from a 
failure to make required filing pursuant to this section shall be 
applied in the next month following the missed deadline.
* * * * *
0
10. Revise Sec.  54.314 to read as follows:


Sec.  54.314  Certification of support for eligible telecommunications 
carriers.

    (a) Certification. States that desire eligible telecommunications 
carriers to receive support pursuant to the high-cost program must file 
an annual certification with the Administrator stating that all federal 
high-cost support provided to such carriers within that State was used 
in the preceding calendar year and will be used in the coming calendar 
year only for the provision, maintenance, and upgrading of facilities 
and services for which the support is intended.
    (b) Carriers not subject to State jurisdiction. An eligible 
telecommunications carrier not subject to the jurisdiction of a State 
that desires to receive support pursuant to the high-cost program must 
file an annual certification with the Administrator stating that all 
federal high-cost support provided to such carrier was used in the 
preceding calendar year and will be used in the coming calendar year 
only for the provision, maintenance, and upgrading of facilities and 
services for which the support is intended.
    (c) Certification format. (1) A certification pursuant to this 
section may be filed in the form of a letter from the appropriate 
regulatory authority for the State, and must be filed with the 
Administrator of the high-cost universal mechanism, on or before the 
deadlines set forth in paragraph (d) of this section. If provided by 
the appropriate regulatory authority for the State, the annual 
certification must identify which carriers in the State are eligible to 
receive federal support during the applicable 12-month period, and must 
certify that those carriers only used support during the preceding 
calendar year and will only use support in the coming calendar year for 
the provision, maintenance, and upgrading of facilities and services 
for which support is intended. A State may file a supplemental 
certification for carriers not subject to the State's annual 
certification.
    (2) An eligible telecommunications carrier not subject to the 
jurisdiction of a State shall file a sworn affidavit executed by a 
corporate officer attesting that the carrier only used support during 
the preceding calendar year and will only use support in the coming 
calendar year for the provision, maintenance, and upgrading of 
facilities and services for which support is intended. The affidavit 
must be filed with the Administrator of the high-cost universal service 
support mechanism, on or before the deadlines set forth in paragraph 
(d) of this section.
    (d) Filing deadlines--(1) Annual deadline. In order for an eligible 
telecommunications carrier to receive Federal high-cost support, the 
state or the eligible telecommunications carrier, if not subject to the 
jurisdiction of a state, must file an annual certification, as 
described in paragraph (c) of this section, with the Administrator by 
October 1 of each year. If a state or eligible telecommunications 
carrier files the annual certification after the October 1 deadline, 
the carrier subject to the certification shall receive a reduction in 
its support pursuant to the following schedule:
    (i) An eligible telecommunications carrier subject to 
certifications filed after the October 1 deadline, but by October 8, 
will have its support reduced in an amount equivalent to seven days in 
support;
    (ii) An eligible telecommunications carrier subject to 
certifications filed on or after October 9 will have its support 
reduced on a pro-rata daily basis equivalent to the period of non-
compliance, plus the minimum seven-day reduction.
    (iii) Any support reductions resulting from a failure to make 
required filing pursuant to this section shall be applied in the next 
month following the missed deadline.
    (2) Grace period. If an eligible telecommunications carrier or 
state submits the annual certification required by this section after 
October 1 but within 4 business days, the eligible telecommunications 
carrier subject to the certification will not receive a reduction in 
support if the eligible telecommunications carrier and its holding 
company, operating companies, and affiliates as reported pursuant to 
Sec.  54.313(a)(4) have not missed the October 1 deadline in any prior 
year.
0
11. Amend Sec.  54.316 by revising paragraphs (a)(1), (b) introductory 
text, (b)(4) and (7), and (c) to read as follows.


Sec.  54.316  Broadband deployment and certification requirements for 
high-cost recipients.

    (a) * * *
    (1) Recipients of high-cost support with defined broadband 
deployment obligations pursuant to Sec.  54.308(a), 54.308(c), or Sec.  
54.310(c) shall provide to the Administrator information regarding the 
locations to which the eligible telecommunications carrier is offering 
broadband service in satisfaction of its public interest obligations, 
as defined in either Sec.  54.308 or Sec.  54.309.
* * * * *
    (b) Broadband deployment certifications. ETCs that receive support 
to serve fixed locations shall have the following broadband deployment 
certification obligations:
* * * * *
    (4) Recipients of Connect America Phase II auction support, 
including New York's New NY Broadband Program, shall provide: No later 
than March 1, 2023, and every year thereafter ending March 1, 2026 a 
certification that by the end of the prior calendar year, it was 
offering broadband meeting the requisite public interest obligations 
specific in Sec.  54.309 to the required percentage of its supported 
locations in each state as set forth in Sec.  54.310(c).
* * * * *
    (7) Recipients of Uniendo a Puerto Rico Fund Stage 2 fixed and 
Connect USVI Fund fixed Stage 2 fixed support shall provide: No later 
than March 1 following each service milestone in Sec.  54.1506, a 
certification that by the end of the prior support year, it was 
offering broadband meeting the requisite public interest obligations 
specified in Sec.  54.1507 to the required percentage of its supported 
locations in Puerto Rico and the U.S. Virgin Islands as set forth in 
Sec.  54.1506. The annual certification shall quantify the carrier's 
progress toward or, as applicable, completion of deployment in 
accordance with the resilience and redundancy commitments in its 
application and in accordance with the detailed network plan it 
submitted to the Wireline Competition Bureau.
* * * * *
    (c) Filing deadlines. In order for a recipient of high-cost support 
to continue to receive support for the following calendar year, or 
retain its eligible telecommunications carrier designations, it must 
submit the annual

[[Page 36304]]

reporting information by March 1 as described in paragraphs (a) and (b) 
of this section. ETCs that file their reports after the March 1 
deadline shall receive a reduction in support pursuant to the following 
schedule:
    (1) An ETC that certifies after the March 1 deadline, but by March 
8, will have its support reduced in an amount equivalent to seven days 
in support.
    (2) An ETC that certifies on or after March 9 will have its support 
reduced on a pro-rata daily basis equivalent to the period of non-
compliance, plus the minimum seven-day reduction;
    (3) An ETC that certifies the information required by this section 
within 4 business days of March 1 will not receive a reduction in 
support if the ETC and its holding company, operating companies, and 
affiliates as reported pursuant to Sec.  54.313(a)(4) in their report 
due July 1 of the prior year, have not missed the deadline in any prior 
year.
    (4) Any support reductions resulting from a failure to make a 
required filing pursuant to this section shall be applied in the next 
month following the missed deadline.
    (5) An ETC that met the March 1 deadline by reporting locations 
pursuant to paragraph (a)(1), is permitted to report locations after 
the March 1 deadline (untimely reported locations) but shall have 
support reduced based on the percentage of the ETC's total locations 
for the reporting year being reported after March 1 and the number of 
days after March 1. The grace period in paragraph (c)(3) does not apply 
to support reductions for untimely reported locations.
0
12. Revise the heading of subpart K to read as follows:

Subpart K--Connect America Fund Broadband Loop Support

0
13. Amend Sec.  54.902 by revising paragraphs (a) introductory text and 
(b) to read as follows:


Sec.  54.902  Calculation of CAF BLS Support for Transferred Exchanges.

    (a) In the event that a rate-of-return carrier receiving CAF BLS 
acquires exchanges from an entity that also receives CAF BLS, CAF BLS 
for the transferred exchanges shall be distributed as follows:
* * * * *
    (b) In the event that a rate-of-return carrier receiving CAF BLS 
acquires exchanges from an entity receiving frozen support, model-based 
support, or auction-based support, absent further action by the 
Commission, the exchanges shall receive the same amount of support and 
be subject to the same public interest obligations as specified 
pursuant to the frozen, model-based, or auction-based program.
* * * * *
0
14. Amend Sec.  54.903 by revising the first sentence of paragraph 
(a)(2) to read as follows:


 Sec.  54.903   Obligations of rate-of-return carriers and the 
Administrator.

    (a) * * *
    (2) A rate-of-return carrier may submit quarterly updates of the 
information in paragraph (a)(1) of this section, reporting data as of 
the last day of a quarter on the final day of the next quarter. * * *
* * * * *
0
15. Amend Sec.  54.1302 by adding two sentences to the end of paragraph 
(a) to read as follows:


Sec.  54.1302  Calculation of the incumbent local exchange carrier 
portion of the nationwide loop cost expense adjustment for rate-of-
return carriers.

    (a) * * * Beginning January 1, 2021, and each calendar year 
thereafter, the base amount of the nationwide loop cost expense 
adjustment shall be the annualized amount of the final six months of 
the preceding calendar year. The total amount of the incumbent local 
exchange carrier portion of the nationwide loop cost expense adjustment 
for the first six months of the calendar year shall be the base amount 
divided by two and for the second six months of the calendar year shall 
be the base amount divided by two, multiplied times one plus the Rural 
Growth Factor calculated pursuant to Sec.  54.1303.
* * * * *
0
16. Amend Sec.  54.1307 by adding a sentence to the end of paragraph 
(a)(2) to read as follows:


Sec.  54.1307  Submission of Information by the National Exchange 
Carrier Association

    (a) * * *
    (2) * * * The amounts for January 1 to June 30 and for July 1 to 
December 31 shall be shown separately.
* * * * *

[FR Doc. 2022-12685 Filed 6-15-22; 8:45 am]
BILLING CODE 6712-01-P