[Federal Register Volume 88, Number 87 (Friday, May 5, 2023)]
[Rules and Regulations]
[Pages 28993-29002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09089]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket Nos. 18-143, 10-90; FCC 23-32; FR ID 138389]


The Uniendo a Puerto Rico Fund and the Connect USVI Fund, Connect 
America Fund

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission

[[Page 28994]]

(Commission) continues its efforts to bolster mobile and fixed voice 
and broadband services throughout Puerto Rico and the U.S. Virgin 
Islands (the Territories) and takes action to ensure support for 
providers in the Territories to continue strengthening their existing 
networks.

DATES: This rule is effective June 5, 2023.

FOR FURTHER INFORMATION CONTACT: For further information, please 
contact, Nathan Eagan, Telecommunications Access Policy Division, 
Wireline Competition Bureau, at [email protected] or 202-418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in WC Docket Nos. 18-143 and 10-90; FCC 23-32, adopted and 
released on April 19, 2023. 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://docs.fcc.gov/public/attachments/FCC-23-32A1.pdf.

I. Introduction

    1. In the Report and Order, the Commission continues its efforts to 
bolster mobile and fixed voice and broadband services throughout the 
Territories. In the aftermath of Hurricanes Maria and Irma in 2017, the 
Commission committed to ensuring the restoration, hardening, and 
expansion of advanced telecommunications networks in the Territories by 
creating the Bringing Puerto Rico Together Fund (PR Fund) and the 
Connect USVI Fund. As part of these efforts, the Commission adopted a 
plan to support state-of-the-art mobile wireless networks in the 
Territories, including the 5G services being deployed nationwide, and 
adopted a single-round competitive process to award fixed broadband 
support tied to defined broadband deployment obligations. Without 
Commission action, the support that mobile and incumbent fixed 
providers receive through these Funds will end by June 2023. The recent 
devastation caused by Hurricane Fiona in Puerto Rico, however, 
demonstrates the continued need for support to restore, harden, and 
expand critical communications infrastructure in areas prone to 
hurricanes.
    2. The Commission takes action to ensure support for providers in 
the Territories to continue strengthening their existing networks. 
First, the Commission extends the PR Fund and the Connect USVI Fund 
mobile support for up to two years, with support at 50% of its current 
monthly support level in the first year and 25% of its current monthly 
support level in the second year. The Commission also extends phase-
down frozen support for fixed voice and broadband providers until 
December 31, 2025. The Commission's actions enable providers in the 
Territories to strengthen and harden mobile networks and make existing 
fixed networks more resilient and redundant while new networks are 
built.

II. Report and Order

    3. After a careful review of the record, the Commission adopts many 
of its proposals from the Transitional Support FNPRM, 87 FR 67660, 
November 9, 2022. For mobile service, the Commission adopts a 
transitional support period of up to 24 months, which will allow 
support recipients to continue to receive support for hardening their 
networks as the Commission works to develop a long-term funding 
mechanism. For fixed service, the Commission extends the phase-down of 
frozen support at its current monthly amount until December 31, 2025. 
This extension of support will allow those fixed providers to harden 
their networks and ensure continuous service as new, storm-hardened 
networks are deployed throughout the Territories.
    4. The Commission adopts a transitional support period of up to 24 
months for eligible facilities-based mobile carriers currently 
receiving Stage 2 mobile support. In the Transitional Support FNPRM, 
the Commission sought comment on a number of issues relating to the 
provision of mobile support: whether transitional support should be 
provided after the current Stage 2 funding ends; the proper level of 
transitional support until a long-term funding mechanism is 
established; the appropriate length of a transitional support schedule; 
and several other issues.
    5. Transition for Mobile Support. In the Transitional Support 
FNPRM, the Commission proposed a period of transitional support so 
carriers currently receiving Stage 2 mobile support would not see their 
support abruptly end at the conclusion of Stage 2. The Commission also 
sought comment on whether all facilities-based carriers that receive 
Stage 2 mobile support should be eligible to receive transitional 
support.
    6. Commenters unanimously supported the Commission's proposal for 
the provision of transitional support, which it now adopts. The record 
shows that if the Commission does not provide transitional support 
after the conclusion of Stage 2, all mobile wireless carriers receiving 
Stage 2 support would face a sudden, significant loss of support, which 
could harm their ability to provide service to consumers and endanger 
critical communications needs. With heightened risk from hurricanes, 
any lapse in funding, no matter how brief, may undermine progress made 
in increasing the robustness of existing 4G LTE services and 5G-New 
Radio (5G-NR) services. The Commission concludes that it is in the 
public interest to provide transitional support to help carriers 
strengthen and harden their existing networks and make advanced 
telecommunications service more resilient. This support will be for a 
limited period while the Commission develops a long-term funding 
mechanism for mobile support in the Territories.
    7. Eligibility for Transitional Support. The Commission limits 
eligibility for transitional support to the facilities-based providers 
currently receiving Stage 2 mobile support in a given area. While T-
Mobile proposed expanding eligibility to all facilities-based mobile 
carriers, including those that do not currently receive Stage 2 mobile 
support in a given area, if the transitional support amount the 
Commission adopts is lower than existing Stage 2 mobile support, it 
declines to adopt this proposal. The Commission's goal in providing 
transitional support is ensuring that the current recipients are able 
to continue their existing efforts to strengthen their networks until a 
long-term funding mechanism is established. The Commission believes 
that eligibility for other potential support recipients is best 
addressed as part of a long-term funding mechanism. Allowing other 
carriers to receive transitional support would require additional 
resources to administer, which would then delay and thwart the goal of 
this transitional support--to ensure that current support recipients 
can continue serving consumers without interruption.
    8. Transitional Support Schedule. The Commission adopts a 24-month 
transitional support schedule, with support ending before 24 months if 
a long-term funding mechanism is established. In the Transitional 
Support FNPRM, the Commission proposed a support schedule of up to 24 
months--beginning in the month immediately following the conclusion of 
each eligible carrier's current Stage 2 mobile support--in order to 
ensure continuous funding for recipients of Stage 2 mobile support. The 
Commission also proposed ending transitional support once support is 
authorized under a long-term

[[Page 28995]]

funding mechanism, even if such support was authorized before the 24-
month period ended. Finally, the Commission sought comment on extending 
the 24-month schedule if authorizations under a long-term funding 
mechanism have not occurred by that time.
    9. Commenters generally supported the Commission's proposal of 
establishing a 24-month transitional support schedule, and having that 
support end before 24 months if a long-term funding mechanism is 
established. The Commission now adopts that proposal. Transitional 
support will extend for 24 months after the end of the current term for 
Stage 2 mobile support and will end the month after a long-term funding 
mechanism is established, if such mechanism is established before the 
24-month period ends. Specifically, the Commission will deem the long-
term funding mechanism established the month after such support is 
authorized. Furthermore, the Commission emphasizes that no carrier 
shall receive transitional support and long-term support in the same 
month.
    10. Many commenters supported automatically extending the 24-month 
schedule if a long-term funding mechanism has not been established by 
the end of the 24-month schedule. The Commission declines to adopt this 
proposal. The Commission believes that transitional funding is only 
meant to have a limited duration. Although PRTC noted that the 
Commission should act now to permit transitional support to continue 
until there is a long-term mobile funding mechanism in place in order 
to conserve public resources and protect against any potential gap in 
funding, it is not in the public interest to commit to maintaining 
funding beyond 24 months without the Commission first examining its 
effects on network hardening and resiliency, or any other changed 
circumstances in the Territories. The Commission concludes that it will 
be able to better determine the appropriate support amount in the 
future once it has been able to evaluate the effectiveness of 
transitional support, and they therefore decline to extend transitional 
support beyond its scheduled 24-month period.
    11. Transitional Support Amounts. In the Transitional Support 
FNPRM, the Commission proposed providing transitional support to all 
current support recipients in the amount that they currently receive 
for 5G-NR technologies, meaning that carriers would receive 25% of 
their current monthly support amount as transitional support for both 
years of the transitional support period. The Commission tentatively 
concluded that carriers had rebuilt and hardened their existing 4G-
capable networks, and, as a result, less support would be required 
moving forward as it focused on facilitating the deployment of 5G-NR 
service.
    12. Commenters generally opposed the Commission's proposal to 
reduce support to 25% of current monthly levels. Commenters argued that 
the proposed support reduction would leave them unable to sufficiently 
harden their existing networks, which would ultimately harm consumers. 
Other commenters argued that reduced support would impair 5G-NR 
deployment. After careful consideration of the record, the Commission 
adopts a modified version of its proposal, and will provide 
transitional support recipients with 50% of their current monthly 
support level for both 4G LTE and 5G-NR in the first year of 
transitional support, then 25% of their current monthly support in the 
second year of transitional support. The Commission believes that these 
support amounts strike the appropriate balance between managing its 
limited universal service funding resources and providing sufficient 
support to ensure that consumers in the Territories receive the 
benefits of strengthened networks.
    13. The Commission disagrees with some commenters who argue that 
the transitional support amounts should remain the same as the Stage 2 
support amounts. When the Commission announced the three-year funding 
period for Stage 2, it was clear that it would ``revisit the amount of 
support necessary to further expand and/or harden mobile service 
available in the Territories.'' As the Commission noted in the 
Transitional Support FNRPM, it had tentatively found that carriers in 
the Territories will have sufficiently restored and hardened their 
networks to at least pre-hurricane levels by the conclusion of Stage 2, 
so the level of transitional support should be lower than the current 
level of Stage 2 mobile support. While some support recipients argue 
that they have existing network upgrade plans that will cost more than 
the transitional support amounts they would receive, the primary goal 
of Stage 2 mobile support was to help carriers restore their networks 
to at least their pre-hurricane status and to foster greater access to 
advanced telecommunications services in the Territories. The Commission 
finds those goals have been met. The purpose of transitional support, 
in contrast, is to seamlessly provide some support that existing 
support recipients must use to harden mobile wireless networks to 
protect against future natural disasters. As such, the Commission finds 
it appropriate to address additional support for 5G-NR deployment 
through a long-term funding mechanism rather than the transitional 
support considered here. Accordingly, based on the progress that Stage 
2 support recipients have already made, the Commission does not believe 
that transitional support should continue at its current levels, and it 
adopts a reduced level of transitional support that will allow 
recipients to continue to make progress on strengthening and protecting 
their existing networks.
    14. Appropriate Use of Support. In the Transitional Support FNPRM, 
the Commission noted its past conclusion that carriers were rapidly 
investing in 5G-NR service throughout the United States and that mobile 
customers in the Territories should not receive substandard service. 
Based on the Commission's observation that carriers are moving toward 
5G-NR deployment, it proposed limiting transitional support to 
``restoring, hardening, or expanding networks with 5G-NR-capable 
networks, and to end use of this support for 4G LTE.'' The Commission 
alternatively sought comment on allowing support recipients to use 
transitional support to ``restore (as necessary), harden, or expand 
networks with 4G LTE and 5G-NR baseline performance requirements and 
standards set forth in the 2019 PR USVI Order, 84 FR 59937, November 7, 
2019, or any subsequent standard adopted by [the] Commission.''
    15. Some commenters supported requiring transitional support to be 
used on 5G-NR-capable networks; others disagreed, stating that limiting 
support to 5G-NR networks was too restrictive. Additionally, many 
commenters asked us to clarify that transitional support could be used 
on 4G-capable networks if that support would benefit a shared 4G and 
5G-NR network. One commenter also proposed a waiver process that would 
allow transitional support to be used on 4G LTE networks.
    16. The Commission concludes that recipients of transitional 
support must use it to improve the redundancy and resiliency of 
facilities for 4G LTE or better technologies, including the maintenance 
of backup power systems for such networks, to help ensure continuity of 
service by preventing or withstanding damage from natural disasters. 
While long-term 5G-NR network expansion is important, it is paramount, 
as Hurricane Fiona reminded us, that networks remain operational during 
times of natural disaster during this transitional period. To ensure 
that networks remain

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operational, ubiquitous hardening is necessary. Consequently, the 
Commission determines that transitional support must be used for 
redundancy and resiliency for any part of the network with 4G LTE or 
better technologies. Transitional support may be used for either 
current facilities or for newly built facilities, as the Commission 
expects carriers will continue network expansion. Furthermore, 
recognizing the short-term nature of the support but still cognizant of 
recipients' time needed to plan, the Commission requires all 
transitional support to be spent within one year of the conclusion of 
the transitional support period.
    17. While the Commission encourages transitional support recipients 
to use funding for 5G-NR networks, it is also mindful of the short-term 
nature of transitional support and of the importance of hardened, 
resilient, and redundant networks. The Commission also notes that some 
physical infrastructure of 5G-NR-capable networks may be inseparable 
from the infrastructure of 4G LTE-capable networks, such that an 
investment in a carrier's network may benefit both 4G LTE- and 5G-NR-
capable networks. Limiting transitional support to 5G-NR networks could 
ultimately end up harming the residents of the Territories who rely on 
existing 4G LTE and 5G-NR-capable networks. By allowing transitional 
support recipients to use the support for both 4G LTE and 5G-NR-capable 
networks, the Commission believes that it will encourage the deployment 
of 5G-NR service while also ensuring resilient networks.
    18. Eligible Areas. In the Transitional Support FNRPM, the 
Commission sought comment on continuing to allow support to be used 
throughout Puerto Rico and the U.S. Virgin Islands. The Commission also 
sought comment on limiting transitional support to less-populated areas 
of the Territories based on data from the Broadband Data Collection 
(BDC), and on whether alternative geographic or population limitations 
would be appropriate.
    19. Commenters unanimously supported allowing transitional support 
to be used throughout the Territories. The Commission agrees, and does 
not impose a geographic requirement on where transitional support may 
be used within each Fund's respective territory. While the Commission 
is mindful of its obligation to use data from the BDC, it concludes 
that because they intended for carriers to use transitional support to 
strengthen and harden existing networks, it would be more appropriate 
to allow transitional support to be used throughout the Territories. 
The entirety of these Territories are at risk from hurricanes, so 
geographically limiting where carriers can spend transitional support 
could hinder the benefit the Commission aims to achieve. Additionally, 
the Commission emphasizes that this final rule only establishes a 
short-term, transitional funding mechanism. The Commission anticipates 
that the BDC maps will be an integral and fundamental part of a long-
term funding mechanism.
    20. Minimum Service Requirements and Reporting. The Commission 
adopts the Stage 2 performance and reporting requirements for carriers 
receiving transitional support, with a few modifications, consistent 
with its decisions in this final rule. In the Transitional Support 
FNPRM, the Commission proposed that carriers receiving transitional 
support ``continue to be subject to performance and reporting 
requirements during the transitional support period.'' The Commission 
sought comment on the specific requirements to adopt and noted that 
current support recipients must: (1) comply with minimum service 
requirements for 4G LTE and 5G-NR technologies, (2) file reports and 
data regarding the use of support for hardening networks and 5G-NR 
technology deployment, (3) maintain a Disaster Preparation and Response 
Plan, and (4) perform mandatory reporting using the Disaster 
Information Reporting System (DIRS).
    21. Commenters generally supported the Commission's proposals, and 
several commenters stated that the minimum service requirements and 
reporting requirements for transitional support should remain the same 
as the current Stage 2 requirements, to minimize disruption as Stage 2 
ends. The Commission agrees with these commenters and adopt the Stage 2 
performance and reporting requirements for carriers receiving 
transitional support, with a few modifications to reflect its decisions 
in this final rule. The Commission will continue to require support 
recipients to file (1) an annual map reporting the network hardening 
activities undertaken during the prior calendar year; and (2) a 
detailed narrative description of the network hardening activities 
identified and of how it made use of the support to facilitate those 
network hardening activities. Given that the intended use of the 
support is to strengthen and harden rather than expand networks, 
transitional support recipients will not have to file reports detailing 
their 5G-NR technology deployment. Support recipients also must 
maintain a Disaster Preparation and Response Plan and perform mandatory 
DIRS reporting. In addition, carriers will be subject to the same 
minimum service requirements for 4G LTE and 5G-NR service that 
currently exist for Stage 2 mobile support.
    22. Minimum Security Reporting and Requirements. The Commission 
also requires transitional support recipients to submit network 
security reports. In recognition of the importance of network security, 
in the Transitional Support FNPRM, the Commission proposed requiring 
transitional support recipients to ``report and explain the network 
security controls that [they have] implemented and how they are 
commensurate with established best practices or an established risk 
management framework.'' In addition, the Commission sought comment on 
requiring transitional support recipients to ``report and explain to 
the them instances of unauthorized access to their systems and 
services.''
    23. As noted in the Transitional Support FNPRM, the ``provision of 
advanced services necessitates a recognition that such services, in 
order to be effective and available, must be reasonably secure.'' All 
commenters agreed that requiring a report on network security controls 
is appropriate. Accordingly, the Commission requires transitional 
support recipients to submit a network security report by August 31, 
2023, that identifies and explains the network security controls 
implemented, their effectiveness in fending off cyberattacks and how 
those controls are commensurate with established network security best 
practices and standards or an established risk management framework. A 
second report will be due by March 31, 2025, and will cover the time 
period between August 31, 2023 and March 1, 2025. These two reports 
will allow us to monitor changes and developments during the 
transitional support term. The Commission notes that commenters 
disagreed about whether it should require transitional support 
recipients to report and explain unauthorized network access. While 
unauthorized access to systems and services is an important issue for 
networks the Commission supports, it finds the record insufficient to 
make a determination at this time. Accordingly, the Commission will 
require transitional support recipients to submit network security 
reports but not report on unauthorized network access. Due to the 
inherently sensitive nature of information describing network security, 
the Commission will treat these reports as presumptively confidential.

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    24. Election of Transitional Support. In the Transitional Support 
FNPRM, the Commission proposed requiring transitional support 
recipients to affirmatively elect to receive that support. Commenters 
supported this idea, which the Commission now adopts. The Commission 
believes requiring recipients to affirmatively elect to receive 
transitional support will ensure that they understand the specific 
requirements that come with accepting that support. Accordingly, 
eligible mobile carriers may elect to receive transitional support from 
their respective funds through an election process.
    25. Carriers shall submit their election letters through the 
Commission's Electronic Comment Filing System specifically referencing 
the PR Fund and Connect USVI Docket Number 18-143 and to the Bureau at 
[email protected] within 15 days of the publication of this final 
rule in the Federal Register. To elect the transitional mobile support, 
a carrier must submit a letter signed by an officer of the company 
confirming that the carrier elects the transitional mobile support 
described in this document and commits to satisfy the specific service 
obligations and requirements. If a carrier fails to submit any final 
election letter by the deadline, it will be deemed to have declined the 
transitional mobile support offer and will no longer continue to 
receive mobile high-cost support as part of either the PR Fund or the 
Connect USVI Fund. Carriers submitting election letters will receive an 
email confirming that their election letters have been received and 
reviewed for completeness, and should contact the Bureau no later than 
five business days following the deadline if they have not received 
such confirmation.
    26. As discussed in more detail in this document, as part of the 
2019 PR USVI Order, the Commission adopted a comprehensive long-term 
funding mechanism for fixed voice and broadband in the Territories via 
a single-round competitive proposal process (Stage 2 fixed support). 
Proposals were evaluated based on a series of objective criteria. As 
part of that funding mechanism, existing frozen support for fixed 
broadband is being phased down, with frozen support for providers that 
did not win long-term support in an area currently at \1/3\ of their 
legacy support and scheduled to end by May 2023. Providers authorized 
for Stage 2 fixed support have their first mandatory service milestone 
on December 31, 2024.
    27. In light of the 19-month gap between the end of existing frozen 
support for incumbent providers that did not win long-term support in 
an area and the first deployment obligation for the winners of the 
competitive proposal process, as well as the ongoing threat of natural 
disasters, the Commission proposed in the Transitional Support FNPRM to 
freeze the provision of phase-down support at the current \1/3\ support 
level until December 31, 2025, and it sought comment on alternative 
support schedules and appropriate uses of phase-down support.
    28. The Commission adopts its proposal to extend phase-down support 
frozen at \1/3\ of the current support level until December 31, 2025, 
to avoid leaving incumbent providers that did not win support in an 
area with insufficient resources to maintain their existing networks 
until the long-term support recipients have made substantial progress 
deploying their networks. Upon examination of the record, the 
Commission believes that this extension most effectively addresses its 
concerns about the resilience of existing networks while also 
protecting limited universal service resources.
    29. The Commission agrees with commenters who note the potential 
for disruption for residents of the Territories, as the long-term 
support recipients may not be able to broadly provide high-speed 
service until their networks are more fully deployed, and this could 
leave residents of the Territories without service. Moreover, 
consistent storm activity requires that the Territories' networks are 
resilient and capable of providing service to residents in the event of 
natural disasters. As commenters note, while significant progress has 
been made in restoring and hardening the Territories' existing 
networks, more work remains to be done.
    30. The Commission rejects the arguments of legacy providers and 
the PRTRB that frozen support should be extended beyond the 31-month 
period it provides. Viya, which supports an extension of frozen support 
until December 31, 2027, states that when the phase-down ends, it will 
relinquish its Eligible Telecommunications Carrier (ETC) designation, 
and many existing consumers could be left without reliable high-speed 
internet service until Broadband VI fully fulfills its Stage 2 
commitments. PRTC, which supports the same extension, argues that 
terminating frozen support when the competitive support recipient has 
deployed to 60% of the population of a given area would leave the other 
40% of that population at risk of losing access to reliable 
communications services.
    31. The PRTRB argues that extending support is necessary to ensure 
that no areas are left without service during the transition to 
competitive support and asserts that, while it is mindful of the 
Commission's commitment to efficiently target support, the priority 
during this transition period should be on ensuring service for the 
most people. Additionally, the PRTRB argues that even if a competitive 
provider met its deployment obligation before the deadline, phase-down 
support should not be terminated before its scheduled end date, as the 
existing physical infrastructure of the incumbent LEC may not have 
fully depreciated.
    32. The Commission is unpersuaded that these arguments justify an 
extension of phase-down support until December 31, 2027, for several 
reasons. Notably, PRTC has stated that it will continue to offer 
service in the areas where it did not win competitive support even 
after its phase-down support has ended. Viya, which serves 98% of the 
locations in the U.S. Virgin Islands, does not explain why the 
Commission's proposal to provide an additional 31 months of phase-down 
support to harden its existing network would be insufficient to ensure 
long-term network resiliency and redundancy and result in the decision 
to discontinue offering service to existing locations within its 
already-existing network. Indeed, it makes little sense to immediately 
cease providing service on a network which will have been hardened with 
several years of Universal Service Fund (USF) support. While Viya again 
raises the possibility of relinquishing its ETC designation, as the 
Commission previously noted, ``Viya remains subject to section 214 
discontinuance approval obligations and to carrier of last resort 
requirements which collectively guard against an abrupt loss of 
service.'' Given the record before the Commission, it is not convinced 
that customers in Puerto Rico and the U.S. Virgin Islands will face a 
significant risk of losing service once phase-down support ends. 
Because it would make sense for the incumbent carriers to continue 
offering service in the areas where they previously received phase-down 
support and continue to invest in their existing networks, the 
Commission believes that it would also make sense for them to continue 
to ensure that they have a sufficiently resilient network in those same 
areas in order to continue offering voice and broadband service even 
after phase-down support ends.

[[Page 28998]]

    33. The Commission also rejects the arguments of Liberty, which won 
competitive support in both Puerto Rico (as Liberty Communications PR) 
and the U.S. Virgin Islands (as Broadband VI) that phase-down support 
should not be extended at all beyond the current May 2023 deadline. 
Liberty argues that extending phase-down support would be wasteful and 
that it would be unfair to Liberty, which relied upon the scheduled 
phase-out of frozen support when it calculated its competitive bids. 
Liberty also states that extending phase-down support would provide the 
incumbent LECs that did not win support in a given area with 
significant funding without any buildout requirements, which would put 
Liberty at a competitive disadvantage. Additionally, Liberty argues 
that if phase-down support is extended, Liberty should receive support 
in the areas where it provides service but did not win competitive 
support, even though it is not the incumbent and has not previously 
received frozen high-cost support in those areas. Finally, Liberty 
argues that if the Commission does extend phase-down support, that 
support should terminate once the competitive support winner has met 
its 60% deployment obligation, even if that occurs before December 31, 
2025. As discussed in this document, while the Commission agrees that 
extending support beyond a necessary phase-down period would be 
wasteful, its analysis of the record indicates that the necessary 
phase-down period is longer than it originally anticipated in the 2019 
PR USVI Order. Hurricanes and other challenges in these insular areas 
have made it clear that the existing networks in the Territories 
require further support and an assurance that providers have resources 
to make their networks resilient and available during future natural 
disasters while new networks are constructed. Given the Commission's 
rationale here and the record, the current level of Liberty's 
deployment, while noted, is ultimately of limited consequence to the 
Commission's decision to extend the phase-down support for purposes of 
more storm-resistant networks.
    34. Furthermore, to the extent that Liberty relied on its revenue 
projections on phase-down support ending in May 2023, it did so despite 
the Commission's reminder that ``pending and future judicial 
proceedings, as well as certain pending and future proceedings before 
the Commission--including applications, applications for modification, 
notices of proposed rulemaking, notices of inquiry, petitions for 
rulemaking, requests for special temporary authority, waiver requests, 
petitions to deny, petitions for reconsideration, informal objections, 
and applications for review--may relate to or affect licensees or 
applicants for support in the Stage 2 Competition.'' Because the 
Commission put Liberty on notice of the possibility that the phase-down 
support schedule could be modified when it made its proposals, it is 
unpersuaded that an extension of the support schedule causes unfair 
harm.
    35. Liberty also asserts that extending phase-down support would 
result in ``competitive harm'' because it provides the incumbent LECs 
that did not win support with more money than Liberty will receive as 
the competitive support winner. The Commission disagrees. As discussed 
in this document, Liberty was on notice that modification of the phase-
down support schedule was a possibility. Also as detailed in the 
following, the phase-down support may only be used on network 
resiliency and maintenance, and may not be used to deploy service to 
new areas. To the extent this additional high-cost funding would then 
allow incumbent LECs to reallocate resources for deployment, the 
Commission believes that ensuring there are resources for increased 
hardening and resiliency of existing networks during the construction 
of new networks outweighs other concerns.
    36. The Commission also disagrees with Liberty that if it does 
extend phase-down support, it should end before December 31, 2025, if 
the competitive provider meets its 60% deployment obligation before 
that date. The Commission believes that recipients of phase-down 
support have a need for certainty and predictability so they can plan 
how to use that support to harden their existing networks. Ending 
phase-down support once the competitive provider has met its 60% 
deployment obligation, which can occur prior to December 31, 2025, 
could undermine that certainty, as the recipients of phase-down support 
would not reasonably know in advance when their phase-down support 
could end. The Commission distinguishes this from its adoption of the 
rule to end transitional mobile support upon the implementation of a 
long-term mobile support mechanism. Any process for adoption of a long-
term mobile funding mechanism will provide carriers with ample notice 
and transparency for carriers to reasonably plan. Conversely, Liberty's 
proposal to end phase-down support, which is based on the winning 
applicant's meeting its internal buildout plan for geographic areas, 
does not provide the predictability and certainty of a specific end 
date or substantial advance notice.
    37. Appropriate Uses of Phase-Down Support. The Commission adopts 
its proposals to limit the use of phase-down support to resiliency and 
redundancy measures and to require recipients of phase-down support to 
at least maintain their current footprint for voice and broadband 
services. The Commission also adopts its proposal to require recipients 
of additional phase-down support to maintain their Disaster Preparation 
and Preparedness Plan.
    38. Commenters generally supported the Commission's proposal to 
limit phase-down support to resiliency and redundancy measures and to 
require recipients of phase-down support to maintain their current 
footprint for voice and broadband services. Given the importance of 
services during times of natural disaster and the intended use of the 
support, the Commission requires phase-down support recipients to 
maintain a Disaster Preparation and Preparedness Plan and report using 
the Disaster Information Reporting System. The Commission makes clear 
that if an eligible mobile provider or incumbent LEC has not previously 
submitted a Disaster Preparation and Response Plan to the Bureau and 
was approved to receive Stage 2 mobile or fixed support, an eligible 
carrier of transitional mobile support or phase-down support must 
submit such a plan to the Bureau by July 1, 2023. The Commission finds 
it is in the public interest to permit an eligible carrier to receive 
transitional mobile support or phase-down support prior to the Bureau's 
approval of the Disaster Preparation and Response Plan in order to 
facilitate the seamless hardening of advanced telecommunications 
networks. Finally, in response to comments, the Commission clarifies 
that phase-down support may be used on maintenance of existing networks 
as well as backup power to ensure continuity of voice and broadband 
service because maintenance of the network backup power inherently aids 
resiliency.
    39. Oversight and Reporting for Phase-Down Support Recipients. In 
order to provide oversight and prevent waste, fraud, and abuse, the 
Commission adopts its proposal to subject phase-down support recipients 
to ongoing oversight from the Commission and the Universal Service 
Administrative Company (USAC) by adding new requirements. Specifically, 
the Commission requires each phase-down support recipient to ``submit a 
spending plan for its use of phase-down support for redundancy and 
resiliency measures to the Bureau for approval,''

[[Page 28999]]

by July 1, 2023, and, at the end of each calendar year, to provide the 
Commission with a report of how the phase-down support was spent on 
resiliency and redundancy measures consistent with the Bureau-approved 
plan, along with a certification pursuant to Sec.  54.313 of the 
Commission's rules that the support was used only for authorized 
purposes. Commenters supported the Commission's proposal, and it finds 
that a spending plan will provide an important layer of oversight and 
help us ensure that the phase-down support is going to its intended 
purpose. Recognizing the short-term nature of the support but also 
cognizant of the time that recipients need to plan, the Commission 
requires all phase-down support to be spent by December 31, 2026, which 
is one year after the end of the support term. Recipients must submit a 
final spending report by January 31, 2027, and shall return an amount 
equal to the unused (i.e., not spent consistently with the approved 
spending plan) amount of support to USAC within 30 days of December 31, 
2026. In addition, recipients of phase-down support will continue to be 
subject to all current obligations associated with the receipt of high-
cost support and designation as an ETC.

III. Procedural Matters

    40. Paperwork Reduction Act Analysis. As the Commission noted in 
the Transitional Support FNPRM, the rules that it adopts today 
specifically apply only to the four existing recipients of Stage 2 
mobile support and the three existing recipients of phase-down support 
for fixed services in Puerto Rico and the USVI. Therefore the reporting 
and recordkeeping requirements adopted in this final rule are imposed 
on fewer than ten persons and are not subject to the Paperwork 
Reduction Act.
    41. Final Regulatory Flexibility Certification. The Regulatory 
Flexibility Act of 1980, as amended (RFA), requires that a regulatory 
flexibility analysis be prepared for rulemaking proceedings, unless the 
agency certifies that ``the rule will not have a significant economic 
impact on a substantial number of small entities.'' The RFA generally 
defines ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one which: (1) is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA).
    42. This final rule provides transitional support for mobile 
providers in Puerto Rico and the U.S. Virgin Islands, and it extends 
the provision of phase-down support for fixed voice and broadband 
providers in the same areas. This final rule makes transitional mobile 
support available to the mobile providers who already receive Stage 2 
support in the Puerto Rico and the U.S. Virgin Islands, and it extends 
frozen phase-down fixed broadband support to the providers that 
currently receive it. Four mobile carriers and three fixed providers in 
Puerto Rico and the U.S. Virgin Islands currently receive Stage 2 
mobile support and phase-down support for fixed services, respectively.
    43. These rules will not affect more than 7 providers out of the 
1,778 providers currently receiving high-cost support. Accordingly, the 
Commission anticipates that this final rule will not affect a 
substantial number of carriers, and so it does not anticipate that it 
will affect a substantial number of small entities. Therefore, the 
Commission certifies that the requirements of this final rule will not 
have a significant economic impact on a substantial number of small 
entities.
    44. The Commission will send a copy of the Report and Order, 
including a copy of the Final Regulatory Flexibility Certification, in 
a report to Congress pursuant to the Congressional Review Act. In 
addition, the Report and Order and the final certification will be sent 
to the Chief Counsel for Advocacy of the SBA, and will be published in 
the Federal Register.
    45. Congressional Review Act. The Commission has determined, and 
the Administrator of the Office of Information and Regulatory Affairs, 
Office of Management and Budget, concurs, that this rule is non-major 
under the Congressional Review Act, 5 U.S.C. 804(2). The Commission 
will send a copy of the Report and Order to Congress and the Government 
Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

IV. Ordering Clauses

    46. Accordingly, it is ordered, pursuant to the authority contained 
in sections 1, 2, 4(i), 214, 254, 303(r), and 403 of the Communications 
Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 214, 254, 303(r), 
and 403, Sec. Sec.  1.1 and 1.425 of the Commission's rules, 47 CFR 1.1 
and 1.425, that the Report and Order is adopted.
    47. It is further ordered that Part 54 of the Commission's rules is 
amended as set forth in the following, and that any such rule 
amendments shall be effective 30 days after publication in the Federal 
Register.

List of Subjects in 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.

Final Rules

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

PART 54--UNIVERSAL SERVICE

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

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

Subpart D--Universal Service Support for High Cost Areas

0
2. Amend Sec.  54.313 by revising paragraphs (c) introductory text, 
(c)(4), and (o), and adding paragraphs (p) and (q) to read as follows:


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

* * * * *
    (c) In addition to the information and certifications in paragraph 
(a) of this section, price cap carriers that receive frozen high-cost 
support pursuant to Sec.  54.312(a) shall provide:
* * * * *
    (4) By July 1, 2016 and in subsequent years. A certification that 
all frozen-high cost support the company received in the previous year 
was used to build and operate broadband-capable networks used to offer 
the provider's own retail broadband service in areas substantially 
unserved by an unsubsidized competitor. Recipients of frozen high-cost 
support under Sec.  54.1504(b), for annual reports due July 1, 2024, 
2025, and 2026, shall certify that such support received after June 1, 
2023 was used for resiliency and redundancy measures and to maintain 
their network footprint for voice and broadband services as of June 1, 
2023.
* * * * *
    (o) Recipients of Uniendo a Puerto Rico Fund or Connect USVI Fund 
Stage 2 mobile support and recipients of

[[Page 29000]]

transitional support under Sec.  54.1516 shall certify that they are in 
compliance with all requirements in this part for receipt of such 
support to continue.
    (p) [Reserved]
    (q) Recipients of transitional support under Sec.  54.1516, as part 
of either the Uniendo a Puerto Rico Fund or Connect USVI Fund shall 
certify that such support was not used for costs that are (or will be) 
reimbursed by other sources of support, including Federal or local 
government aid or insurance reimbursements; and that support was not 
used for other purposes, such as the retirement of company debt 
unrelated to eligible expenditures, or other expenses not directly 
related to network restoration, hardening, and expansion consistent 
with the framework of the Uniendo a Puerto Rico Fund or Connect USVI 
Fund, respectively. Recipients of transitional support under Sec.  
54.1516 shall certify that they have conducted an annual review of the 
documentation required by Sec.  54.1515(a) through (c) or Sec.  
54.1524, respectively, to determine the need for and to implement 
changes or revisions to disaster preparation and recovery 
documentation.

0
3. Amend Sec.  54.1504 by revising the section heading and paragraph 
(b) to read as follows:


Sec.  54.1504  Term of Stage 2 fixed support, phase-down of legacy 
fixed support, and reporting obligations for phase-down support 
recipient.

* * * * *
    (b) Phase-down of legacy support. Stage 2 of the fixed Uniendo a 
Puerto Rico Fund and of the fixed Connect USVI Fund shall replace the 
legacy frozen high-cost support for the Territories. Beginning on a 
date determined by the Wireline Competition Bureau and announced by 
public notice following authorization of a winning application, frozen 
support recipient carriers will receive \2/3\ frozen fixed support 
amortized for the first 12 months following the date announced by 
public notice; and \1/3\ frozen fixed support amortized over the second 
12-month period. Beginning June 1, 2023, legacy frozen support 
recipient carriers that continue receiving phase-down legacy support 
for use in accordance with applicable rules shall be authorized to 
continue to receive \1/3\ frozen fixed support for the geographic areas 
in which it was not selected as the winning applicant of the Stage 2 
competitive process. The frozen support recipient carriers shall 
receive a monthly support amount equal to the amortized monthly \1/3\ 
frozen fixed support amount until December 31, 2025, and zero frozen 
support thereafter.

0
4. Add Sec. Sec.  54.1516 through 54.1524 to subpart O to read as 
follows:

Subpart O--Uniendo a Puerto Rico Fund and Connect USVI Fund

Sec.
* * * * *
54.1516 Uniendo a Puerto Rico Fund and the Connect USVI Fund--
Transitional support for mobile service.
54.1517 Transitional support mobile carrier eligibility.
54.1518 Appropriate uses of transitional mobile support.
54.1519 Geographic area eligible for transitional mobile support.
54.1520 Provision of transitional mobile support.
54.1521 Transitional mobile support additional annual reporting.
54.1522 Security reporting.
54.1523 Spending Plans for recipients of legacy frozen phase-down 
support.
54.1524 Disaster preparation and response measures; Disaster 
Information Reporting System.


Sec.  54.1516  Uniendo a Puerto Rico Fund and the Connect USVI Fund--
Transitional support for mobile service.

    (a) Term of support. Uniendo a Puerto Rico Fund or the Connect USVI 
Fund transitional mobile support shall be made available to eligible 
mobile carriers that elect to make a commitment to their eligible 
service areas for a term of up to 24 months to begin in the month 
immediately following the end of the carrier's Stage 2 mobile support. 
The term of support shall end the earlier of either 24 months following 
a carrier's authorization to begin receiving transitional support or 
the authorization of support under a long-term funding mechanism 
subsequently adopted by the Commission providing mobile wireless 
support in the carrier's respective territory.
    (b) Election of support. Eligible mobile carriers as provided in 
Sec.  54.1517 shall have a one-time option to elect to receive 
transitional mobile support from the Uniendo a Puerto Rico Fund and the 
Connect USVI Fund for the eligible service area. To participate, an 
eligible carrier must submit an election to participate within 15 days 
following publication in the Federal Register of the order adopting 
transitional mobile support of the Uniendo a Puerto Rico Fund and the 
Connect USVI Fund. Each carrier must submit its election to receive 
transitional support to the Commission through the Commission's 
Electronic Comment Filing System as well as by emailing a copy of its 
election to [email protected].
    (c) Support amounts. An eligible carrier that elects to receive 
transitional support shall receive a pro rata share of its monthly 
Stage 2 mobile support as of May 1, 2023. Each eligible carrier may 
receive 50% of its Stage 2 monthly mobile support amount as of May 1, 
2023 in the first 12-month period (months 1-12) of transitional 
support, and 25% of its current monthly mobile Stage 2 support as if 
May 1, 2023 in the second 12-month period (months 13-24) of 
transitional support. However, the provision of monthly transitional 
support may end prior to the completion of the 24-month term as 
provided in subsection (a).
    (d) Return of unused support. Each eligible mobile carrier that 
elects to receive transitional support from the Uniendo a Puerto Rico 
Fund or the USVI Connect Fund will receive monthly installments of its 
pro rata share of mobile support over the support period provided in 
subsections (a) and (c). A mobile carrier that fails to use all its 
eligible transitional mobile support pursuant to section 54.1517 within 
one year of the end of the support term shall return an amount equal to 
the unused amount of transitional support to the Administrator within 
30 days following the end of the term of support under paragraph (a).


Sec.  54.1517  Transitional support mobile carrier eligibility.

    Facilities-based mobile carriers that are recipients of mobile 
support from Stage 2 as of May 1, 2023 of the Uniendo a Puerto Rico 
Fund or the Connect USVI Fund shall be eligible to elect and receive 
transitional mobile support in the areas where they receive Stage 2 
support.


Sec.  54.1518  Appropriate uses of transitional mobile support.

    Recipients of Uniendo a Puerto Rico and Connect USVI transitional 
mobile support shall use the support to improve the redundancy and 
resiliency of facilities for 4G LTE or better technologies to help 
ensure continuity of service by preventing or withstanding damage from 
disasters, including the maintenance of backup power systems for such 
networks.


Sec.  54.1519  Geographic area eligible for transitional mobile 
support.

    Uniendo a Puerto Rico Fund and Connect USVI Fund transitional 
mobile support may be used for all geographic areas of Puerto Rico or 
of the U.S. Virgin Islands, respectively, within a recipient's 
designated eligible telecommunications carrier service area.

[[Page 29001]]

Sec.  54.1520  Provision of transitional mobile support.

    A recipient of transitional mobile support shall commit to, at a 
minimum, maintaining its network coverage area as of June 30, 2023, or 
100 percent of its network coverage area prior to Hurricanes Maria and 
Irma as specified by Sec.  54.1514(a), whichever is greater. The 
recipient shall also commit to provide a minimum level of service that 
meets or exceeds network levels and at reasonably comparable levels to 
those services and rates available in urban areas as required by Sec.  
54.1521(a).


Sec.  54.1521  Transitional mobile support additional annual reporting.

    (a) Each recipient of transitional mobile support shall report and 
certify, no later than thirty (30) days following the end of the 
calendar year in which it receives such transitional support, that it 
has met the requisite mobile transmissions supporting voice and data to 
and from the network meeting or exceeding the following:
    (1) For 4G LTE service, outdoor data transmission rates of at least 
10 Mbps download/1 Mbps upload, at least one service plan that includes 
a data allowance of at least 5 GB that is offered to consumers at a 
rate that is reasonably comparable to similar service plans offered by 
mobile wireless providers in urban areas, and latency of 100 
milliseconds or less round trip; and
    (2) For 5G-NR service, outdoor data transmission rates of at least 
35 Mbps download/3 Mbps upload and a plan offered to consumers at a 
rate that is reasonably comparable to similar service plans offered by 
mobile wireless providers in urban areas.
    (b) Each recipient of transitional mobile support shall submit no 
later than thirty (30) days following the end of the calendar year an 
annual map reporting the network hardening activities undertaken during 
the prior calendar year. The recipient must submit, along with the map, 
a detailed narrative description of the network hardening activities 
identified and of how it made use of the support to facilitate those 
network hardening activities.
    (c) Each report shall be submitted to the Office of the Secretary 
of the Commission through the Electronic Comment Filing System clearly 
referencing the appropriate docket for the Uniendo a Puerto Rico Fund 
and the Connect USVI Fund; the Administrator; and the authority in the 
U.S. Territory, or Tribal governments, as appropriate. All filings and 
certifications shall also be submitted to the Bureau at 
[email protected].
    (d) Recipients of transitional mobile support have a continuing 
obligation to maintain the accuracy and completeness of the information 
provided in their reports. All recipients of transitional mobile 
support shall provide information about any substantial change that may 
be of decisional significance regarding their eligibility for 
transitional support and compliance with Uniendo a Puerto Rico Fund and 
the Connect USVI Fund requirements as an update to their report 
submitted to the entities listed in paragraph (c) of this section. Such 
notification of a substantial change, including any reduction in the 
network coverage area being served or any failure to comply with any of 
the transitional support requirements, shall be submitted within ten 
(10) business days after the reportable event occurs.
    (e) In order for a recipient of transitional mobile support to 
continue to receive transitional mobile support for the second 12-month 
period, it must submit the reports and certification required by this 
section by the deadlines set forth above.


Sec.  54.1522  Security reporting.

    By August 31, 2023, support recipients under Sec.  54.1516 shall 
file their first network security report that identifies and explains 
the network security controls implemented, their effectiveness in 
fending off cybersecurity attacks, and how those controls are 
commensurate with established network security best practices and 
standards or an established risk management framework. By March 31, 
2025, support recipients under Sec.  54.1516 shall file their second 
network security report, covering the time period between August 31, 
2023, and March 1, 2025, that identifies and explains the network 
security controls implemented, their effectiveness in fending off 
cybersecurity attacks and how those controls are commensurate with 
established network security best practices and standards or an 
established risk management framework.


Sec.  54.1523  Spending plans for recipients of legacy frozen phase-
down support.

    (a) Spending plan submissions for phase-down support recipients. By 
July 1, 2023, recipients of support under Sec.  54.1504(b) shall submit 
a spending plan for its use of that support for redundancy, resiliency, 
and maintenance measures to the Bureau for approval. Phase-down support 
shall be suspended if a recipient fails to submit a spending plan by 
the requisite deadline or fails to receive approval from the Bureau. 
Recipients of support must submit an updated spending plan if the 
details in their spending plan change.
    (b) Annual reporting requirements for phase-down support 
recipients. By January 31, 2024, 2025, and 2026, recipients of support 
under Sec.  54.1504(b) shall file with the Commission a report of how 
they spent phase-down support on resiliency and redundancy measures 
consistent with the approved spending plan approved under paragraph 
(a).
    (c) Recipients of support under Sec.  54.1504(b) that fail to use 
all such support consistent with the approved spending plan approved 
under paragraph (a) by December 31, 2026 shall return an amount equal 
to the unused amount of support to the Administrator within 30 days of 
December 31, 2026.
    (d) By January 31, 2027 recipients of support under Sec.  
54.1504(b) shall file with the Commission a final report of how they 
spent phase-down support on resiliency and redundancy measures 
consistent with the approved spending plan approved under paragraph 
(a).


Sec.  54.1524  Disaster preparation and response measures; Disaster 
Information Reporting System.

    (a) Each recipient of support under Sec.  54.1504(b) or Sec.  
54.1516 shall maintain a Disaster Preparation and Response Plan 
document approved by the Bureau for Stage 2 of the Uniendo a Puerto 
Rico Fund or Connect USVI Fund, as applicable, that describes and 
commits to the methods and procedures that it will use, during the 
period in which it receives support under Sec.  54.1516 or Sec.  
54.1504(b), to prepare for and respond to disasters in the Territories, 
including detailed descriptions of methods and processes to strengthen 
infrastructure; to ensure network diversity; to ensure backup power; to 
monitor its network; and to prepare for emergencies. If an eligible 
recipient has not previously submitted a Disaster Preparation and 
Response Plan that was approved by the Bureau prior to the 
authorization to receive fixed or mobile support, as applicable, the 
eligible recipient must submit a Disaster Preparation and Response Plan 
for Bureau approval by July 1, 2023. Phase-down support shall be 
suspended if a recipient fails to submit a Disaster Preparation and 
Response Plan by the requisite deadline or fails to receive approval 
from the Bureau.
    (b) Each recipient of support under Sec.  54.1504(b) or Sec.  
54.1516 shall maintain the Disaster Preparation and Response Plan 
approved by the Bureau for Stage

[[Page 29002]]

2 of each funding mechanism that completely and thoroughly address the 
criteria enumerated in paragraph (a) of this section. Recipients shall 
materially comply with the representations in the document and shall 
amend their Disaster Preparation and Response Plan following any 
material change(s) to internal processes and responsibilities and 
provide the updated Disaster Preparation and Response Plan to the 
Bureau within 10 business days following the material change(s).
    (c) Each recipient of support under Sec.  54.1504(b) or Sec.  
54.1516 shall perform mandatory Disaster Information Reporting System 
reporting.
    (d) A recipient's failure to comply with the requirements of this 
section may result in the withholding of transitional or phase-down 
support until the support recipient has cured deficiencies identified 
by the Bureau.

[FR Doc. 2023-09089 Filed 5-4-23; 8:45 am]
BILLING CODE 6712-01-P