83_FR_19032 83 FR 18948 - Connect America Fund

83 FR 18948 - Connect America Fund

FEDERAL COMMUNICATIONS COMMISSION

Federal Register Volume 83, Issue 84 (May 1, 2018)

Page Range18948-18950
FR Document2018-09066

In this document, the Federal Communications Commission (Commission) for the period beginning January 1, 2017, increases the amount of operating costs that carriers that predominantly serve Tribal lands can recover from the universal service fund (USF) in recognition that they are likely to have higher costs than carriers not serving Tribal lands. This action will provide additional funding to these carriers to provide both voice and broadband services to their customers.

Federal Register, Volume 83 Issue 84 (Tuesday, May 1, 2018)
[Federal Register Volume 83, Number 84 (Tuesday, May 1, 2018)]
[Rules and Regulations]
[Pages 18948-18950]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-09066]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket Nos. 10-90; FCC 18-37]


Connect America Fund

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In this document, the Federal Communications Commission 
(Commission) for the period beginning January 1, 2017, increases the 
amount of operating costs that carriers that predominantly serve Tribal 
lands can recover from the universal service fund (USF) in recognition 
that they are likely to have higher costs than carriers not serving 
Tribal lands. This action will provide additional funding to these 
carriers to provide both voice and broadband services to their 
customers.

DATES: Effective May 31, 2018.

FOR FURTHER INFORMATION CONTACT: Suzanne Yelen, Wireline Competition 
Bureau, (202) 418-7400 or TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in WC Docket Nos. 10-90; FCC 18-37, adopted on March 27, 2018 
and released on April 5, 2018. The full text of this document is 
available for public inspection during regular business hours in the 
FCC Reference Center, Room CY-A257, 445 12th Street SW, Washington, DC 
20554 or at the following internet address: https://transition.fcc.gov/Daily_Releases/Daily_Business/2018/db0405/FCC-18-37A1.pdf.

Synopsis

I. Introduction

    1. In this Report and Order (Order), for the period beginning 
January 1, 2017, the Commission increases the amount of operating costs 
that carriers that predominantly serve Tribal lands can recover from 
the universal service fund (USF) in recognition that they are likely to 
have higher costs than carriers not serving Tribal lands. This action 
will provide additional funding to these carriers to provide both voice 
and broadband services to their customers.
    2. In March 2016, the Commission adopted the Rate-of-Return Reform 
Order and FNPRM establishing a new mechanism for the distribution of 
Connect America Fund support in rate-of-return areas. In the March 2016 
Rate-of-Return Reform Order and Further Notice of Proposed Rulemaking 
(FNPRM), 81 FR 24282, April 25, 2016

[[Page 18949]]

and 81 FR 21511, April 12, 2016, the Commission adopted a limitation on 
the amount of operating expenses (opex) for which rate-of-return 
carriers may receive high-cost support, such that each carrier's opex 
eligible for high-cost support is limited to a regression model-
generated opex per location plus 1.5 standard deviations. In the FNPRM, 
the Commission asked whether the opex limitations should be modified 
for carriers serving Tribal lands.
    3. The Commission is persuaded based on the record before us that 
there is good reason to increase the opex limitation for carriers 
receiving legacy high-cost support that primarily serve Tribal lands 
because of the increased costs of providing service on Tribal lands. 
Both the National Tribal Telecommunications Association (NTTA) and Gila 
River Telecommunications, Inc. (GRTI) cite a number of unique costs 
faced by carriers serving Tribal lands. They explain that carriers 
generally must invest significant time and financial resources in 
securing rights-of-way and easements to install new broadband 
facilities on Tribal lands due to the number of permissions that must 
be obtained. Such permissions include the consent of multiple owners of 
allotted lands, as well as the consent of Tribal authorities, the 
Bureau of Indian Affairs (BIA), and other administrators and managers 
of Native trust lands. In some cases, letters of support from Tribal 
villages in or near the construction areas are also required. NTTA and 
GRTI represent that the process of obtaining Tribal cultural 
clearances, as well as the cost of compliance with the Archeological 
Resources Protection Act of 1979 and the National Historic Preservation 
Act of 1966, and coordination of National Environmental Protection Act 
compliance with BIA, are often significant. Commenters also point out 
that Tribal sovereignty issues require additional negotiation and legal 
review, that many Tribes require that qualified members of the Tribe be 
given preference in hiring and promotion, and that some Tribal 
authorities require construction observation by a Tribal member. In 
sum, the Commission is persuaded based on the record before us that 
there are unique costs associated with serving Tribal lands that 
warrant revisiting the opex limit adopted by us for this subset of 
carriers. Therefore, the Commission relaxes the opex limit for those 
study areas most in need where a majority of the housing units are on 
Tribal lands, as determined by the Bureau using U.S. Census data.
    4. The Commission declines at this time to remove the opex 
limitation altogether and instead raise the limitation to 2.5 standard 
deviations above the regression-determined amount for those carriers 
that qualify subject to the criteria set out below. All carriers, 
including those that predominantly serve Tribal lands, should have 
incentives to prudently manage their operating expenditures. Although 
the Commission finds that carriers serving Tribal lands have expenses 
that are significantly greater than those serving non-Tribal lands, 
commenters have failed to show in this circumstance that there is no 
need for any opex limitation. Taking into account that factor, and 
mindful of the generally higher costs of serving Tribal lands, the 
Commission therefore decides that carriers whose opex limit will be 
relaxed will have their opex limitation raised to 2.5 standard 
deviations above the regression-determined amount. For example, as 
shown below, a carrier with $20,000 in opex costs and 58 percent of its 
opex eligible for support will now have 89 percent of its opex eligible 
for support. Moreover, when other carrier costs, such as taxes and 
capital expenses are considered, the opex limitation has a small effect 
on a carrier's revenue requirement.

----------------------------------------------------------------------------------------------------------------
                                                                   Allowed opex
                                                     OPEX cost     costs  (opex
                                    Opex costs        percent         costs *      Other carrier      Revenue
                                                   eligible for      eligible          costs        requirement
                                                      support        percent)
----------------------------------------------------------------------------------------------------------------
No Opex Limitation..............         $20,000             100         $20,000         $15,000         $35,000
1.5 Standard Deviations.........          20,000              58          11,600          15,000          26,600
2.5 Standard Deviations.........          20,000              89          17,712          15,000          32,712
----------------------------------------------------------------------------------------------------------------

    5. In addition, the Commission limits this relief to those carriers 
meeting the following conditions. First, the carrier has not deployed 
broadband service of 10 Mbps download/1 Mbps upload to 90 percent or 
more of the housing units on the Tribal lands in its study area. 
Second, unsubsidized competitors have not deployed broadband service of 
10 Mbps download/1 Mbps upload to 85 percent or more of the housing 
units on the Tribal lands in its study area. The Commission believes 
that these conditions will limit this relief to those carriers with the 
greatest need to accelerate broadband deployment.
    6. All universal service support must be necessary and reasonable 
for the provision, maintenance, and upgrading of facilities and 
services for which the support is intended. The Commission understands 
that some carriers serving Tribal lands may have significant sources of 
telecommunications-associated revenue which is passed through to a 
tribe or may have particular costs imposed by a tribe. The Commission 
expects Tribal carriers to be able to demonstrate in the event such 
revenue or costs are questioned that in fact the revenues or cost are 
necessary and reasonable for the provision, maintenance, and upgrading 
of facilities and services for which the support is intended.
    7. Bureau staff estimates in 2017 and/or 2018 that five carriers 
that have been affected by the opex cap are eligible for the relief. 
The Commission concludes that a 2.5 standard deviation limit will still 
provide an incentive for eligible carriers to avoid imprudent or 
unnecessary expenses, while recognizing the higher costs associated 
with providing service on Tribal lands. Because we determine that an 
opex limit of 2.5 standard deviations is appropriate for those study 
areas where a majority of the housing units are on Tribal lands and 
that meet our other conditions, we direct the Universal Service 
Administrative Company (USAC) to use the 2.5 standard deviation metric 
for these study areas for support calculations for the period beginning 
January 1, 2017, when the opex limitation was implemented.

II. Procedural Matters

A. Paperwork Reduction Act

    8. This document does not contain new information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. In addition, therefore, it does not contain any new 
or information collection burden for small business concerns with fewer 
than 25 employees, pursuant to the Small

[[Page 18950]]

Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4).

B. Congressional Review Act

    9. The Commission will send a copy of this Report and Order to 
Congress and the Government Accountability Office pursuant to the 
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
    10. As required by the Regulatory Flexibility Act of 1980 (RFA), as 
amended, an Initial Regulatory Flexibility Analyses (IRFA) was 
incorporated in the Rate-of-Return Reform Order and/or FNPRM. The 
Commission sought written public comment on the proposals in the Rate-
of-Return Reform FNPRM, including comment on the IRFA. The Commission 
did not receive any relevant comments in response to this IRFA. This 
Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
    11. The Report and Order increases the amount of operating expenses 
that rate-of-return carriers predominantly serving Tribal lands can 
recover from the universal service fund (USF). This increase recognizes 
that carriers serving Tribal lands are likely to have higher operating 
costs than carriers serving non-Tribal areas.
    12. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small-business concern'' under the Small Business 
Act. A small-business concern'' is one which: (1) Is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the Small Business 
Administration (SBA).
    13. There are three comprehensive, statutory small entity size 
standards. First, nationwide, there are a total of approximately 28.2 
million small businesses, according to the SBA, which represents 99.7% 
of all businesses in the United States. In addition, a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
Nationwide, as of 2007, there were approximately 1,621,215 small 
organizations. Finally, the term ``small governmental jurisdiction'' is 
defined generally as ``governments of cities, towns, townships, 
villages, school districts, or special districts, with a population of 
less than fifty thousand.'' Census Bureau data for 2011 indicate that 
there were 90,056 local governmental jurisdictions in the United 
States. The Commission estimates that, of this total, as many as 89,327 
entities may qualify as ``small governmental jurisdictions.''
    14. The action taken in this Report and Order would affect a 
maximum of approximately 50 small entities and will likely only affect 
approximately seven or eight entities per year.
    15. No additional reporting, recordkeeping, or other compliance 
requirements are required by this Report and Order.
    16. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include (among others) the following four alternatives: (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities. The Commission has considered all of these factors subsequent 
to receiving substantive comments from the public and potentially 
affected entities. The Commission has considered the economic impact on 
small entities, as identified in comments filed in response to the 
Rate-of-Return Reform FNPRM and its IRFA, in reaching its final 
conclusions and taking action in this proceeding.
    17. The Commission has, at the request of the carriers, increased 
the amount of operating expenses that rate-of-return carriers 
predominantly serving Tribal lands can recover from the universal 
service fund (USF). By raising this limitation, we recognize the higher 
costs of these small carriers in serving Tribal areas. The higher 
operating expense limit does not involve additional reporting or 
recordkeeping requirements.

III. Ordering Clauses

    18. Accordingly, it is ordered, pursuant to the authority contained 
in sections 1, 2, 4(i), 5, 201-206, 214, 218-220, 251, 252, 254, 256, 
303(r), 332, 403, and 405 of the Communications Act of 1934, as 
amended, and section 706 of the Telecommunications Act of 1996, 47 
U.S.C. 151, 152, 154(i), 155, 201-206, 214, 218-220, 251, 252, 254, 
256, 303(r), 332, 403, and 1302 that this Report and Order is adopted.
    19. It is further ordered that part 54, of the Commission's rules, 
47 CFR part 54, is amended as set forth in the following.
    20. It is further ordered that the rules adopted herein will become 
effective May 31, 2018.
    21. It is further ordered that USAC implement the rule adopted 
herein for support calculations beginning January 1, 2017.

List of Subjects in 47 CFR Part 54

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

Federal Communications Commission.
Marlene Dortch,
Secretary, Office of the Secretary.

Final Rules

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

PART 54--UNIVERSAL SERVICE

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

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


0
2. Amend Sec.  54.303 by adding paragraph (a)(6) to read as follows:


Sec.  54.303  Eligible Capital Investment and Operating Expenses.

    (a) * * *
    (6) For those study areas where a majority of the housing units are 
on Tribal lands, as determined by the Wireline Competition Bureau, and 
meet the following conditions, total eligible annual operating expenses 
per location shall be limited by calculating Exp ([Ycirc] + 2.5 * mean 
square error of the regression): The carrier serving the study area has 
not deployed broadband service of 10 Mbps download/1 Mbps upload to 90 
percent or more of the housing units on the Tribal lands in its study 
area and unsubsidized competitors have not deployed broadband service 
of 10 Mbps download/1 Mbps upload to 85 percent or more of the housing 
units on the Tribal lands in its study area.
* * * * *
[FR Doc. 2018-09066 Filed 4-30-18; 8:45 am]
BILLING CODE 6712-01-P



                                           18948                Federal Register / Vol. 83, No. 84 / Tuesday, May 1, 2018 / Rules and Regulations

                                           L60(a) of Appendix A, Table 1 of DHS                    hours prior to any scheduled period of                FEDERAL COMMUNICATIONS
                                           Instruction Manual 023–01–001–01,                       enforcement or as soon as practicable in              COMMISSION
                                           Rev. 01. A Record of Environmental                      response to an emergency.
                                           Consideration supporting this                                                                                 47 CFR Part 54
                                                                                                      (c) Definitions. The following
                                           determination will be available in the                  definitions apply to this section:                    [WC Docket Nos. 10–90; FCC 18–37]
                                           docket where indicated under
                                           ADDRESSES.                                                 (1) A ‘‘designated representative’’ is             Connect America Fund
                                                                                                   any Coast Guard commissioned, warrant
                                           G. Protest Activities                                   or petty officer of the U.S. Coast Guard              AGENCY:  Federal Communications
                                             The Coast Guard respects the First                    who has been designated by the Captain                Commission.
                                           Amendment rights of protesters.                         of the Port Long Island Sound (COTP),                 ACTION: Final rule.
                                           Protesters are asked to contact the                     to act on his or her behalf. The
                                           person listed in the FOR FURTHER                                                                              SUMMARY:    In this document, the Federal
                                                                                                   designated representative may be on an
                                           INFORMATION CONTACT section to                                                                                Communications Commission
                                                                                                   official patrol vessel or may be on shore
                                           coordinate protest activities so that your                                                                    (Commission) for the period beginning
                                                                                                   and will communicate with vessels via                 January 1, 2017, increases the amount of
                                           message can be received without                         VHF–FM radio or loudhailer.
                                           jeopardizing the safety or security of                                                                        operating costs that carriers that
                                           people, places, or vessels.                                (2) An ‘‘Official patrol vessel’’ may be           predominantly serve Tribal lands can
                                                                                                   any Coast Guard, Coast Guard Auxiliary,               recover from the universal service fund
                                           List of Subjects in 33 CFR Part 165                     state, or local law enforcement vessels               (USF) in recognition that they are likely
                                             Harbors, Marine safety, Navigation                    assigned or approved by the COTP Long                 to have higher costs than carriers not
                                           (water), Reporting and record keeping                   Island Sound. In addition, members of                 serving Tribal lands. This action will
                                           requirements, Security measures, and                    the Coast Guard Auxiliary may be                      provide additional funding to these
                                           Waterways.                                              present to inform vessel operators of                 carriers to provide both voice and
                                             For the reasons discussed in the                      this regulation.                                      broadband services to their customers.
                                           preamble, the Coast Guard amends 33                                                                           DATES: Effective May 31, 2018.
                                                                                                      (d) Regulations. (1) Under the general
                                           CFR part 165 as follows:                                safety zone regulations in subpart C of               FOR FURTHER INFORMATION CONTACT:
                                                                                                   this part, you may not enter or remain                Suzanne Yelen, Wireline Competition
                                           PART 165—REGULATED NAVIGATION                                                                                 Bureau, (202) 418–7400 or TTY: (202)
                                           AREAS AND LIMITED ACCESS AREAS                          in the safety zone described in
                                                                                                   paragraph (a) of this section unless                  418–0484.
                                           ■ 1. The authority citation for part 165                authorized by the COTP or one of the                  SUPPLEMENTARY INFORMATION: This is a
                                           continues to read as follows:                           COTP’s designated representatives.                    summary of the Commission’s Report
                                                                                                                                                         and Order in WC Docket Nos. 10–90;
                                             Authority: 33 U.S.C. 1231; 50 U.S.C. 191;                (2) Any vessel that is granted                     FCC 18–37, adopted on March 27, 2018
                                           33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5;               permission by the COTP or a designated
                                           Department of Homeland Security Delegation
                                                                                                                                                         and released on April 5, 2018. The full
                                                                                                   representative must proceed through the               text of this document is available for
                                           No. 0170.1.
                                                                                                   area with caution and operate at a speed              public inspection during regular
                                           ■ 2. Add § 165.T01–0304 to read as                      no faster than necessary to maintain a                business hours in the FCC Reference
                                           follows:                                                safe course, unless otherwise required                Center, Room CY–A257, 445 12th Street
                                           § 165.T01–0304 Safety Zone; Housatonic                  by the Navigation Rules.                              SW, Washington, DC 20554 or at the
                                           River, Milford and Stratford, CT.                          (3) Any person or vessel permitted to              following internet address: https://
                                             (a) Location. The following area is a                 enter the safety zone shall comply with               transition.fcc.gov/Daily_Releases/Daily_
                                           safety zone: All navigable waters of the                the directions and orders of the COTP                 Business/2018/db0405/FCC-18-
                                           Housatonic River near Milford and                       or a designated representative. Upon                  37A1.pdf.
                                           Stratford, CT contained within the                      being hailed by a U.S. Coast Guard                    Synopsis
                                           following area: Beginning at a point on                 vessel by siren, radio, flashing lights, or
                                           land in position at 41°12′14.5″ N,                                                                            I. Introduction
                                                                                                   other means, the operator of a vessel
                                           073°06′40.8″ W south of the Governor                    within the zone shall proceed as                         1. In this Report and Order (Order),
                                           John Davis Lodge Turnpike (I–95)                        directed. Any person or vessel within                 for the period beginning January 1,
                                           Bridge; then northeast across the                       the safety zone shall exit the zone when              2017, the Commission increases the
                                           Housatonic River to a point on land in                  directed by the COTP or a designated                  amount of operating costs that carriers
                                           position at 41°12′17.7″ N, 073°06′29.1″                 representative.                                       that predominantly serve Tribal lands
                                           W south of the Governor John Davis                                                                            can recover from the universal service
                                           Lodge Turnpike (I–95) Bridge; then                         (4) To seek permission to enter or                 fund (USF) in recognition that they are
                                           northwest along the shoreline to a point                remain in the safety zone, individuals                likely to have higher costs than carriers
                                           on land in position at 41°12′25″ N,                     may reach the COTP or a designated                    not serving Tribal lands. This action
                                           073°06′31″ W; then southwest across the                 representative via Channel 16 (VHF–                   will provide additional funding to these
                                           Housatonic River to a point on land in                  FM) or at 203–468–4401 (Sector Long                   carriers to provide both voice and
                                           position at 41°12′22″ N, 073°06′43″ W;                  Island Sound command center).                         broadband services to their customers.
                                           then southeast along the shoreline back                   Dated: April 4, 2018.                                  2. In March 2016, the Commission
                                           to point of origin (NAD 83). All                                                                              adopted the Rate-of-Return Reform
                                                                                                   K.B. Reed,
                                           positions are approximate.                                                                                    Order and FNPRM establishing a new
amozie on DSK30RV082PROD with RULES




                                             (b) Effective and Enforcement period.                 Commander, U.S. Coast Guard, Acting                   mechanism for the distribution of
                                           This rule is effective from 6:00 a.m. on                Captain of the Port Long Island Sound.                Connect America Fund support in rate-
                                           April 5, 2018 to 6:00 p.m. on May 15,                   [FR Doc. 2018–09186 Filed 4–30–18; 8:45 am]           of-return areas. In the March 2016 Rate-
                                           2018. The Coast Guard will issue a                      BILLING CODE 9110–04–P                                of-Return Reform Order and Further
                                           Broadcast Notice to Mariners via VHF–                                                                         Notice of Proposed Rulemaking
                                           FM marine channel 16 twenty-four (24)                                                                         (FNPRM), 81 FR 24282, April 25, 2016


                                      VerDate Sep<11>2014   16:12 Apr 30, 2018   Jkt 244001   PO 00000   Frm 00036   Fmt 4700   Sfmt 4700   E:\FR\FM\01MYR1.SGM   01MYR1


                                                                     Federal Register / Vol. 83, No. 84 / Tuesday, May 1, 2018 / Rules and Regulations                                                     18949

                                           and 81 FR 21511, April 12, 2016, the                               Indian Affairs (BIA), and other                           4. The Commission declines at this
                                           Commission adopted a limitation on the                             administrators and managers of Native                  time to remove the opex limitation
                                           amount of operating expenses (opex) for                            trust lands. In some cases, letters of                 altogether and instead raise the
                                           which rate-of-return carriers may                                  support from Tribal villages in or near                limitation to 2.5 standard deviations
                                           receive high-cost support, such that                               the construction areas are also required.              above the regression-determined
                                           each carrier’s opex eligible for high-cost                         NTTA and GRTI represent that the                       amount for those carriers that qualify
                                           support is limited to a regression model-                          process of obtaining Tribal cultural                   subject to the criteria set out below. All
                                           generated opex per location plus 1.5                               clearances, as well as the cost of                     carriers, including those that
                                           standard deviations. In the FNPRM, the                             compliance with the Archeological                      predominantly serve Tribal lands,
                                           Commission asked whether the opex                                  Resources Protection Act of 1979 and                   should have incentives to prudently
                                           limitations should be modified for                                 the National Historic Preservation Act of              manage their operating expenditures.
                                           carriers serving Tribal lands.                                     1966, and coordination of National                     Although the Commission finds that
                                              3. The Commission is persuaded                                  Environmental Protection Act                           carriers serving Tribal lands have
                                           based on the record before us that there                           compliance with BIA, are often                         expenses that are significantly greater
                                           is good reason to increase the opex                                                                                       than those serving non-Tribal lands,
                                                                                                              significant. Commenters also point out
                                           limitation for carriers receiving legacy                                                                                  commenters have failed to show in this
                                                                                                              that Tribal sovereignty issues require
                                           high-cost support that primarily serve                                                                                    circumstance that there is no need for
                                                                                                              additional negotiation and legal review,
                                           Tribal lands because of the increased                                                                                     any opex limitation. Taking into
                                                                                                              that many Tribes require that qualified                account that factor, and mindful of the
                                           costs of providing service on Tribal
                                           lands. Both the National Tribal                                    members of the Tribe be given                          generally higher costs of serving Tribal
                                           Telecommunications Association                                     preference in hiring and promotion, and                lands, the Commission therefore decides
                                           (NTTA) and Gila River                                              that some Tribal authorities require                   that carriers whose opex limit will be
                                           Telecommunications, Inc. (GRTI) cite a                             construction observation by a Tribal                   relaxed will have their opex limitation
                                           number of unique costs faced by carriers                           member. In sum, the Commission is                      raised to 2.5 standard deviations above
                                           serving Tribal lands. They explain that                            persuaded based on the record before us                the regression-determined amount. For
                                           carriers generally must invest significant                         that there are unique costs associated                 example, as shown below, a carrier with
                                           time and financial resources in securing                           with serving Tribal lands that warrant                 $20,000 in opex costs and 58 percent of
                                           rights-of-way and easements to install                             revisiting the opex limit adopted by us                its opex eligible for support will now
                                           new broadband facilities on Tribal lands                           for this subset of carriers. Therefore, the            have 89 percent of its opex eligible for
                                           due to the number of permissions that                              Commission relaxes the opex limit for                  support. Moreover, when other carrier
                                           must be obtained. Such permissions                                 those study areas most in need where a                 costs, such as taxes and capital expenses
                                           include the consent of multiple owners                             majority of the housing units are on                   are considered, the opex limitation has
                                           of allotted lands, as well as the consent                          Tribal lands, as determined by the                     a small effect on a carrier’s revenue
                                           of Tribal authorities, the Bureau of                               Bureau using U.S. Census data.                         requirement.

                                                                                                                                                                   Allowed opex
                                                                                                                                                   OPEX cost            costs
                                                                                                                                                    percent                            Other carrier     Revenue
                                                                                                                                Opex costs                         (opex costs *
                                                                                                                                                   eligible for                           costs        requirement
                                                                                                                                                                       eligible
                                                                                                                                                    support           percent)

                                           No Opex Limitation ..............................................................        $20,000                  100         $20,000            $15,000         $35,000
                                           1.5 Standard Deviations ....................................................              20,000                   58          11,600             15,000          26,600
                                           2.5 Standard Deviations ....................................................              20,000                   89          17,712             15,000          32,712



                                             5. In addition, the Commission limits                            sources of telecommunications-                         limit of 2.5 standard deviations is
                                           this relief to those carriers meeting the                          associated revenue which is passed                     appropriate for those study areas where
                                           following conditions. First, the carrier                           through to a tribe or may have particular              a majority of the housing units are on
                                           has not deployed broadband service of                              costs imposed by a tribe. The                          Tribal lands and that meet our other
                                           10 Mbps download/1 Mbps upload to 90                               Commission expects Tribal carriers to                  conditions, we direct the Universal
                                           percent or more of the housing units on                            be able to demonstrate in the event such               Service Administrative Company
                                           the Tribal lands in its study area.                                revenue or costs are questioned that in                (USAC) to use the 2.5 standard
                                           Second, unsubsidized competitors have                              fact the revenues or cost are necessary                deviation metric for these study areas
                                           not deployed broadband service of 10                               and reasonable for the provision,                      for support calculations for the period
                                           Mbps download/1 Mbps upload to 85                                  maintenance, and upgrading of facilities               beginning January 1, 2017, when the
                                           percent or more of the housing units on                            and services for which the support is                  opex limitation was implemented.
                                           the Tribal lands in its study area. The                            intended.
                                                                                                                                                                     II. Procedural Matters
                                           Commission believes that these                                        7. Bureau staff estimates in 2017 and/
                                           conditions will limit this relief to those                         or 2018 that five carriers that have been              A. Paperwork Reduction Act
                                           carriers with the greatest need to                                 affected by the opex cap are eligible for                8. This document does not contain
                                           accelerate broadband deployment.                                   the relief. The Commission concludes                   new information collection
                                             6. All universal service support must                            that a 2.5 standard deviation limit will               requirements subject to the Paperwork
amozie on DSK30RV082PROD with RULES




                                           be necessary and reasonable for the                                still provide an incentive for eligible                Reduction Act of 1995 (PRA), Public
                                           provision, maintenance, and upgrading                              carriers to avoid imprudent or                         Law 104–13. In addition, therefore, it
                                           of facilities and services for which the                           unnecessary expenses, while                            does not contain any new or
                                           support is intended. The Commission                                recognizing the higher costs associated                information collection burden for small
                                           understands that some carriers serving                             with providing service on Tribal lands.                business concerns with fewer than 25
                                           Tribal lands may have significant                                  Because we determine that an opex                      employees, pursuant to the Small


                                      VerDate Sep<11>2014       16:12 Apr 30, 2018      Jkt 244001    PO 00000      Frm 00037    Fmt 4700   Sfmt 4700   E:\FR\FM\01MYR1.SGM   01MYR1


                                           18950                Federal Register / Vol. 83, No. 84 / Tuesday, May 1, 2018 / Rules and Regulations

                                           Business Paperwork Relief Act of 2002,                  special districts, with a population of               332, 403, and 1302 that this Report and
                                           Public Law 107–198, see 44 U.S.C.                       less than fifty thousand.’’ Census                    Order is adopted.
                                           3506(c)(4).                                             Bureau data for 2011 indicate that there                 19. It is further ordered that part 54,
                                                                                                   were 90,056 local governmental                        of the Commission’s rules, 47 CFR part
                                           B. Congressional Review Act
                                                                                                   jurisdictions in the United States. The               54, is amended as set forth in the
                                              9. The Commission will send a copy                   Commission estimates that, of this total,             following.
                                           of this Report and Order to Congress                    as many as 89,327 entities may qualify
                                           and the Government Accountability                       as ‘‘small governmental jurisdictions.’’                 20. It is further ordered that the rules
                                           Office pursuant to the Congressional                       14. The action taken in this Report                adopted herein will become effective
                                           Review Act, see 5 U.S.C. 801(a)(1)(A).                  and Order would affect a maximum of                   May 31, 2018.
                                              10. As required by the Regulatory                    approximately 50 small entities and will                 21. It is further ordered that USAC
                                           Flexibility Act of 1980 (RFA), as                       likely only affect approximately seven                implement the rule adopted herein for
                                           amended, an Initial Regulatory                          or eight entities per year.                           support calculations beginning January
                                           Flexibility Analyses (IRFA) was                                                                               1, 2017.
                                                                                                      15. No additional reporting,
                                           incorporated in the Rate-of-Return
                                                                                                   recordkeeping, or other compliance                    List of Subjects in 47 CFR Part 54
                                           Reform Order and/or FNPRM. The
                                                                                                   requirements are required by this Report
                                           Commission sought written public
                                                                                                   and Order.                                              Communications common carriers,
                                           comment on the proposals in the Rate-
                                           of-Return Reform FNPRM, including                          16. The RFA requires an agency to                  Health facilities, Infants and children,
                                           comment on the IRFA. The Commission                     describe any significant alternatives that            internet, Libraries, Reporting and
                                           did not receive any relevant comments                   it has considered in reaching its                     recordkeeping requirements, Schools,
                                           in response to this IRFA. This Final                    proposed approach, which may include                  Telecommunications, Telephone.
                                           Regulatory Flexibility Analysis (FRFA)                  (among others) the following four                     Federal Communications Commission.
                                           conforms to the RFA.                                    alternatives: (1) The establishment of                Marlene Dortch,
                                              11. The Report and Order increases                   differing compliance or reporting
                                                                                                                                                         Secretary, Office of the Secretary.
                                           the amount of operating expenses that                   requirements or timetables that take into
                                           rate-of-return carriers predominantly                   account the resources available to small              Final Rules
                                           serving Tribal lands can recover from                   entities; (2) the clarification,
                                                                                                   consolidation, or simplification of                     For the reasons discussed in the
                                           the universal service fund (USF). This
                                                                                                   compliance or reporting requirements                  preamble, the Federal Communications
                                           increase recognizes that carriers serving
                                                                                                   under the rule for small entities; (3) the            Commission amends 47 CFR part 54 as
                                           Tribal lands are likely to have higher
                                                                                                   use of performance, rather than design,               follows:
                                           operating costs than carriers serving
                                           non-Tribal areas.                                       standards; and (4) an exemption from
                                                                                                                                                         PART 54—UNIVERSAL SERVICE
                                              12. The RFA directs agencies to                      coverage of the rule, or any part thereof,
                                           provide a description of, and where                     for small entities. The Commission has
                                           feasible, an estimate of the number of                  considered all of these factors                       ■ 1. The authority citation for part 54
                                           small entities that may be affected by                  subsequent to receiving substantive                   continues to read as follows:
                                           the proposed rules, if adopted. The RFA                 comments from the public and                            Authority: 47 U.S.C. 151, 154(i), 155, 201,
                                           generally defines the term ‘‘small                      potentially affected entities. The                    205, 214, 219, 220, 254, 303(r), 403, and 1302
                                           entity’’ as having the same meaning as                  Commission has considered the                         unless otherwise noted.
                                           the terms ‘‘small business,’’ ‘‘small                   economic impact on small entities, as
                                                                                                                                                         ■ 2. Amend § 54.303 by adding
                                           organization,’’ and ‘‘small governmental                identified in comments filed in response
                                                                                                                                                         paragraph (a)(6) to read as follows:
                                           jurisdiction.’’ In addition, the term                   to the Rate-of-Return Reform FNPRM
                                           ‘‘small business’’ has the same meaning                 and its IRFA, in reaching its final                   § 54.303 Eligible Capital Investment and
                                           as the term ‘‘small-business concern’’                  conclusions and taking action in this                 Operating Expenses.
                                           under the Small Business Act. A small-                  proceeding.
                                                                                                                                                           (a) * * *
                                           business concern’’ is one which: (1) Is                    17. The Commission has, at the
                                           independently owned and operated; (2)                   request of the carriers, increased the                  (6) For those study areas where a
                                           is not dominant in its field of operation;              amount of operating expenses that rate-               majority of the housing units are on
                                           and (3) satisfies any additional criteria               of-return carriers predominantly serving              Tribal lands, as determined by the
                                           established by the Small Business                       Tribal lands can recover from the                     Wireline Competition Bureau, and meet
                                           Administration (SBA).                                   universal service fund (USF). By raising              the following conditions, total eligible
                                              13. There are three comprehensive,                   this limitation, we recognize the higher              annual operating expenses per location
                                           statutory small entity size standards.                  costs of these small carriers in serving              shall be limited by calculating Exp (Ŷ +
                                           First, nationwide, there are a total of                 Tribal areas. The higher operating                    2.5 * mean square error of the
                                           approximately 28.2 million small                        expense limit does not involve                        regression): The carrier serving the
                                           businesses, according to the SBA, which                 additional reporting or recordkeeping                 study area has not deployed broadband
                                           represents 99.7% of all businesses in the               requirements.                                         service of 10 Mbps download/1 Mbps
                                           United States. In addition, a ‘‘small                                                                         upload to 90 percent or more of the
                                                                                                   III. Ordering Clauses                                 housing units on the Tribal lands in its
                                           organization’’ is generally ‘‘any not-for-
                                           profit enterprise which is independently                  18. Accordingly, it is ordered,                     study area and unsubsidized
                                           owned and operated and is not                           pursuant to the authority contained in                competitors have not deployed
                                           dominant in its field.’’ Nationwide, as of              sections 1, 2, 4(i), 5, 201–206, 214, 218–            broadband service of 10 Mbps
amozie on DSK30RV082PROD with RULES




                                           2007, there were approximately                          220, 251, 252, 254, 256, 303(r), 332, 403,            download/1 Mbps upload to 85 percent
                                           1,621,215 small organizations. Finally,                 and 405 of the Communications Act of                  or more of the housing units on the
                                           the term ‘‘small governmental                           1934, as amended, and section 706 of                  Tribal lands in its study area.
                                           jurisdiction’’ is defined generally as                  the Telecommunications Act of 1996, 47                *     *     *     *     *
                                           ‘‘governments of cities, towns,                         U.S.C. 151, 152, 154(i), 155, 201–206,                [FR Doc. 2018–09066 Filed 4–30–18; 8:45 am]
                                           townships, villages, school districts, or               214, 218–220, 251, 252, 254, 256, 303(r),             BILLING CODE 6712–01–P




                                      VerDate Sep<11>2014   16:12 Apr 30, 2018   Jkt 244001   PO 00000   Frm 00038   Fmt 4700   Sfmt 4700   E:\FR\FM\01MYR1.SGM   01MYR1



Document Created: 2018-05-01 00:23:58
Document Modified: 2018-05-01 00:23:58
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective May 31, 2018.
ContactSuzanne Yelen, Wireline Competition Bureau, (202) 418-7400 or TTY: (202) 418-0484.
FR Citation83 FR 18948 
CFR AssociatedCommunications Common Carriers; Health Facilities; Infants and Children; Internet; Libraries; Reporting and Recordkeeping Requirements; Schools; Telecommunications and Telephone

2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR