The Uniendo a Puerto Rico Fund and the Connect America USVI Fund, Connect America Fund, ETC Annual Reports and Certifications
| Published date | 07 November 2019 |
| Citation | 84 FR 59937 |
| Record Number | 2019-22842 |
| Section | Rules and Regulations |
| Court | Federal Communications Commission |
Federal Register, Volume 84 Issue 216 (Thursday, November 7, 2019)
[Federal Register Volume 84, Number 216 (Thursday, November 7, 2019)]
[Rules and Regulations]
[Pages 59937-59968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22842]
[[Page 59937]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket Nos. 18-143, 10-90, 14-58; FCC 19-95]
The Uniendo a Puerto Rico Fund and the Connect America USVI Fund,
Connect America Fund, ETC Annual Reports and Certifications
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) takes major steps to promote the deployment of advanced,
hardened networks in the Territories by allocating nearly a billion
dollars in Federal universal service support in Puerto Rico and the
U.S. Virgin Islands.
DATES: Effective December 9, 2019, except for Sec. Sec. 54.313,
54.316, 54.1503, 54.1505, 54.1508, and 54.1513 through 54.1515. The
Commission will publish a document in the Federal Register announcing
the effective date of those rules.
FOR FURTHER INFORMATION CONTACT: Alexander Minard, Wireline Competition
Bureau, (202) 418-7400 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order (Order) and Order on Reconsideration in WC Docket Nos. 18-
143, 10-90, 14-58; FCC 19-95, adopted on September 26, 2019 and
released on September 30, 2019. The full text of this document is
available for public inspection during regular business hours in the
FCC Reference Center, Room CY-A257, 445 12th Street SW, Washington, DC
20554 or at the following internet address: https://docs.fcc.gov/public/attachments/FCC-19-95A1.pdf.
I. Introduction
1. In the span of a few short weeks in September 2017, Hurricane
Irma and then Hurricane Maria caused widespread devastation to Puerto
Rico and the U.S. Virgin Islands (together the Territories). The storms
produced extensive damage to infrastructure throughout the Territories,
damaging or destroying communications networks, and leaving residents
without essential lines of communication during and after these
dangerous storms. The recovery of communications networks in the
Territories has been especially challenging due to their remoteness
from the mainland United States and the higher costs of deployment
providers face there. The Commission to date has provided carriers with
approximately $130 million in funding from the Universal Service Fund
(USF or Fund) to assist with network restoration, bringing the total
high-cost universal service support invested in the Territories since
the 2017 hurricanes to more than $382.4 million.
2. Most carriers now report that service has been completely or
substantially restored. But the Commission's work is not done; it knows
that hurricanes will hit Puerto Rico and the U.S. Virgin Islands again.
So, looking to the future, the Commission must improve and expand
broadband networks in the Territories. The Commission's long-term goal
is to facilitate the deployment of fast, resilient, and reliable
networks to all parts of the islands that will stand the test of time
and provide digital opportunity to all Americans living in Puerto Rico
and the U.S. Virgin Islands.
3. The Commission therefore takes major steps to promote the
deployment of advanced, hardened networks in the Territories by
allocating nearly a billion dollars in Federal universal service
support in Puerto Rico and the U.S. Virgin Islands. For Stage 2 of the
Uniendo a Puerto Rico Fund, the Commission allocates more than $500
million over ten years in fixed broadband support and more than $250
million over three years in mobile broadband support. The Commission
likewise allocates more than $180 million over ten years and $4 million
over three years for Stage 2 Connect USVI Fund fixed and mobile
support, respectively. These funds will facilitate the improvement and
expansion of existing fixed and mobile networks in the Territories, and
provide for the deployment of new broadband networks, so that those
living in Puerto Rico and the U.S. Virgin Islands will have access to
and benefit from the same high-speed broadband services that residents
of the mainland United States enjoy. Indeed, some of the funds that the
Commission authorizes are specifically allocated to facilitate the
deployment of 5G, the next generation of wireless connectivity, in the
Territories. In short, the steps the Commission takes in the Order, in
addition to the private investment made by providers, will help ensure
that broadband is deployed on a reasonable and timely basis to the
residents of the Territories and that it remains deployed following
future storms.
II. Report and Order
4. To ensure the continued expansion and improvement of fixed voice
and broadband service in the Territories, the Commission adopts a
single-round competitive proposal process for Stage 2 fixed support for
the Uniendo a Puerto Rico Fund and Connect USVI Fund. The Commission
divides Puerto Rico into 78 geographic areas--one per municipio--and it
divides the U.S. Virgin Islands into two geographic areas. The
Commission will consider all valid applications for each geographic
area and select a winner for each area by applying the same objective
scoring criteria for price, network performance, and network resilience
and redundancy to each proposal received. The Commission establishes a
ten-year support term and make any existing provider of fixed broadband
in each Territory, as of June 2018 FCC Form 477 data, eligible to
participate in the support mechanism for the respective Territory they
serve. Winning applicants will have specific deployment obligations and
the Commission adopts two processes for reassessing deployment data to
ensure support is spent efficiently. The Commission directs Stage 2
fixed support toward providing quality service throughout the
Territories, rather than simply toward restoration of pre-storm
networks, to promote efficient deployment of advanced, reliable
services to all locations. The Commission also establishes thorough
oversight and accountability measures similar to those the Commission
has implemented in other recent high-cost proceedings.
5. Single-Round Competitive Proposal Process. The Commission adopts
a single-round competitive proposal process in which it will consider
all applications simultaneously and select applicants based on the
lowest score for a series of weighted objective criteria. The
Commission establishes performance tiers that applicants must meet, and
it gives greater preference to proposals based on how much they exceed
the minimum thresholds. The Commission finds several clear benefits to
a competitive proposals approach, and it believes this approach is
better-suited to Puerto Rico and the U.S. Virgin Islands than
alternative mechanisms such as an auction, a multi-round competitive
proposal process, or a negotiated approach. The competitive proposal
process the Commission adopts is preferable to an auction under the
circumstances because of the relatively small pool of possible
applicants. At the same time, the Commission finds the single-round
[[Page 59938]]
proposal process retains many of the competitive benefits of an auction
but can facilitate more prompt funding and deployment as compared with
a multi-round proposal or negotiated approach process. Finally, the
approach the Commission adopts relies on objective criteria that are
preferable to a more subjective competitive proposal process or
negotiated approach because it better implements its policy goals of
promoting efficiency, certainty, transparency, and impartiality, and
allows the Commission to compare applications using different network
technologies and offering differing performance. The Commission's
competitive process is comparable to the Connect America Fund (CAF) II
auction in that the Commission will award support competitively based
on application of objective criteria. The Commission adapts the CAF II
auction framework to the particular circumstances of the Territories by
adding resiliency and redundancy as criteria to account for the risks
the Territories face and by employing a single-round proposal process
rather than a multi-round auction in light of the smaller geographic
scale and number of participants. Based on the foregoing analysis, the
Commission declines to adopt the multi-round or negotiated competitive
proposal processes favored by several commenters. The Commission
recognizes that it is forgoing the opportunity to negotiate or
influence supplementary-round proposals. Nevertheless, this approach
will encourage parties to put forward their best commitments in the
first instance and promote competition for support. It also will avoid
significant delay and limit subjectivity.
6. Selection Criteria. Consistent with the Commission's policy
goals for Stage 2 fixed support, it will consider applications based on
both cost and proposed performance capabilities. Evaluating cost is an
essential part of the Commission's determination. As with all USF
decisions, the Commission seeks to promote access to quality services
in the most cost-effective and efficient manner possible. The
Commission must be responsible stewards of the Fund to fulfill its
commitment to fiscal responsibility and to ensure that funds are
targeted efficiently. For example, in the USF/ICC Transformation Order,
76 FR 73830, November 29, 2011, the Commission proposed to design a
competitive bidding mechanism for price cap areas where the incumbent
Eligible Telecommunications Carrier (ETC) declined to make a state-
level commitment, so as to distribute support in a way that ``maximizes
the extent of robust, scalable broadband service subject to the
budget.'' This competitive bidding mechanism resulted in important
efficiency gains. The eligible locations awarded in the resulting CAF
II auction had an initial reserve price of $5 billion over the next
decade; the final price tag to cover these locations, however, is now
only $1.488 billion--saving the Fund over $3.5 billion. While the
competitive process the Commission adopts in the Order differs from the
CAF II auction, it expects that allowing multiple providers--including
those that have not traditionally received high-cost support--to
compete for funding will increase the efficiencies of bringing advanced
services to consumers in Puerto Rico and the U.S. Virgin Islands.
7. Accordingly, the Commission will weigh three factors in
selecting winning applicants: (1) Price per location; (2) network
performance, including speed, latency, and usage allowance; and (3)
network resilience and redundancy. Although commenters differ on how to
weigh these factors relative to each other and some suggest additional
factors, several commenters support the inclusion of these three key
factors. The Commission finds it appropriate to give price per location
the greatest weight. While the Commission's goal in this process is to
award funding to the carrier that can provide the highest performing
and most resilient network possible, the Commission must do so in a
fiscally responsible manner. As stewards of the Fund, responsible
spending must be the Commission's primary concern. Although the
destruction from the hurricanes contributed to the challenge of
accurately determining location counts, the processes the Commission
establishes herein provides opportunities to remedy any inaccuracies,
and the Commission must make every effort to ensure cost-effective
spending. At the same time, the Commission must carefully account for
the other important criteria it has identified. Therefore, while the
Commission allocates price the greatest individual weight, combined
weights for network performance and resilience/redundancy can outweigh
price, to encourage applicants to deploy high-performing, storm-
hardened networks. The Commission notes that in contrast to the CAF II
auction, where it considered speed, usage allowance, and latency but no
other network-specific factors, here the Commission will award points
based on resilience and redundancy to account for the unique challenges
the Territories face due to the risk of disasters and their insularity.
The Commission gives network performance the second most points because
performance will always matter to customers, while resilience and
redundancy benefit users only in the event of a natural disaster or
other disruption to the network.
8. Overall Scoring. Consistent with the factors the Commission has
identified, it adopts a 270-point scale, allocated as follows: 100
points for price per location, 90 points for network performance, and
80 points for network resilience and redundancy. For each geographic
area for which it seeks support, an applicant will be assigned a
specific point value in each category and the applicant with the lowest
combined score will win support in that area. This overall scoring
table shows how the points will total across all categories. The
Commission also adopts the tables in the following for each
subcategory, which show how the points will be assigned within each
subcategory.
Table 1--Overall Scoring
------------------------------------------------------------------------
Overall scoring Points
------------------------------------------------------------------------
Price Per Location........................................... 100
Network Performance.......................................... 90
Network Resilience and Redundancy............................ 80
----------
Total.................................................... 270
------------------------------------------------------------------------
9. The Commission declines to use deployment timing or status of
restoration as weighted factors in scoring proposals in this process.
The Commission agrees with commenters that deployment timing is
important--indeed all winning providers must complete buildout and
service obligations within six years, with interim deployment
milestones after three years. And while faster deployment is in the
public interest, the Commission concludes that the benefits of
accelerating deployment schedules by 1 or 2 years--which cannot be
verified at the time support is awarded--in this case does not warrant
being awarded a competitive preference in scoring when weighed against
the importance of ensuring cost-effective, high-quality, and resilient
networks. In particular, network performance, resilience, and hardening
provide long-term benefits, in contrast to the shorter-term benefits of
an accelerated schedule. Further, the Commission expects that all
carriers are independently motivated to build faster
[[Page 59939]]
as it will mean receiving revenue more quickly. The Commission also
finds that there is reduced risk of failure in establishing a
reasonable schedule that all applicants can commit to meet rather than
providing an up-front benefit for a shorter timeline that would require
withholding support if the carrier did not adhere to the schedule. The
Commission specifically rejects Viya's suggestion that it requires a
minimum baseline of 25/3 Mbps deployment to 95 percent of locations in
the U.S. Virgin Islands within two years. That timeline deviates
sharply from the deployment milestones in CAF II, and Viya has not
identified a reason why the Commission should depart from its
precedent. Further, that timeline could limit the number of applicants,
precluding the U.S. Virgin Islands from receiving the benefits of
potential additional competition.
10. Likewise, while the Commission agrees that it is important for
carriers to restore their networks quickly following a natural
disaster, it finds that assigning preference based on an applicant's
commitment to restore within a certain period following a future
disaster--or demonstrated history of swift restoration following a
disaster--is unhelpful for deciding how to award support in this
instance. Past restoration performance does not necessarily predict
future restoration performance, particularly when the nature of a
provider's network will likely change following this process and given
that the Commission cannot control for the size and scope of any future
disaster. Evaluating how fast or completely a carrier restored its
network would also be extremely challenging and is dependent on factors
outside of the Commission's control (e.g., the nature and scope of the
disaster, personnel, availability, access, etc.). Having said that, the
Commission expects recipients of Stage 2 support, as with all USF
support, to be diligent and efficient in restoring their networks
following any future natural disaster or outage. To that end, the
Commission adopts measures to ensure all applicants have written
Disaster Preparation and Response Plans in place to establish processes
that can help ensure effective and timely restoration following a
disaster.
11. Price Per Location. The Commission adopts the scoring for price
per location shown in Table 2 as an incentive for participants to
achieve the most economical solution possible, without sacrificing
quality or resilience. The reserve price is the maximum amount that a
proposal may commit to accept, and a commitment to accept the reserve
price will receive the most points for price per location. To encourage
applicants to provide the best price possible, the Commission starts
with a total of 100 points (for a commitment at the reserve price) and
subtract one point for each percentage point below the reserve price to
which an applicant commits. Because the Commission calculates the
reserve price with reference to the cost to serve the geographic area,
this weighting system takes into account the relative cost to serve
different municipios or islands. Although Hughes suggested a cap at 40%
or greater below reserve, the Commission's allocation method encourages
applicants to reveal their actual price by rewarding a carrier for each
point below the reserve price. As such, the Commission does not adopt a
cap or otherwise limit how far below the reserve price an applicant can
commit. That being said, in the CAF II auction a significant portion of
bidders dropped out of the bidding when faced with prices more than 30%
below the reserve price, and the Commission would expect similar final
prices here to avoid compromising quality or coverage across the entire
geographic area.
Table 2--Price per Location Scoring
------------------------------------------------------------------------
Price Assigned points
------------------------------------------------------------------------
Reserve Price............................. 100
1%-100% Below Reserve Price............... -1 point for each percentage
below reserve.
------------------------------------------------------------------------
12. Reserve Price. The Commission adopts, with one slight
modification, the three-step process to determine the reserve price
that the Commission proposed in the PR-USVI Fund Notice of Proposed
Rulemaking (PR-USVI Fund NPRM), 83 FR 27528, June 13, 2018, to allocate
the budget. First, the Commission will employ the Connect America Model
(CAM) to calculate the average cost per location for all locations in a
census block. Second, the Commission will apply the full budgets for
Puerto Rico and for the U.S. Virgin Islands, thereby creating
territory-specific high-cost thresholds to ensure the full amount of
the budget available to each territory over the 10-year period is
available for disbursement. Third, the Commission will establish a
reserve price for each geographic area in proportion to the support
amounts calculated for each census block within that area. That is, the
Commission will use the CAM to allocate a portion of the budget to each
geographic area based on the relative cost of providing service across
all eligible areas. Although the Commission proposed using the
extremely high-cost threshold to establish a per-location, per-month
cap of $198.60, as it has previously done, it will not apply a cap in
this context. The total number of locations above the cap is relatively
small, the reserve price for each geographic area will cover a larger
geography, and the Commission expects competition to lower overall
support amounts. The Commission directs the Wireline Competition Bureau
(Bureau) to apply the modified three-step process it describes and
release the reserve price for each geographic area and number of
locations for all eligible areas by Public Notice.
13. The CAM is the best current objective data the Commission has
combining cost and locations. The Bureau never formally adopted the CAM
as it applies to either Puerto Rico or the U.S. Virgin Islands, but
rather excluded those two territories (and Alaska) prior to calculating
the offer of CAF II model-based support for price caps based on
opposition in the record from the price caps serving those areas.
However, the Commission uses the CAM for Stage 2 not to calculate the
exact amount of support necessary for each eligible area--the
applicants will provide this--but rather as an estimate of relative
cost within each geographic area, to be used as an allocator of the
budget. In other words, unlike for the offer of model-based support,
the Commission will not use the CAM to establish specific final support
amounts but to determine the relative costs of each area within the
budget and the maximum amount of support available for each eligible
geographic area. In the CAF II auction, most applicants were awarded
support at less than 80% of the CAM-established reserve price,
suggesting that the actual support amounts required to serve were often
lower than model-calculated support figures, and the Commission
believes it is likely that the same pattern will emerge through the
competitive process here.
14. Because the CAM is the best objective mechanism the Commission
has available to it and commenters did not suggest a specific
alternative for setting reserve prices, the Commission declines to
adopt a different approach based on commenters' arguments that the CAM
underestimates costs of providing service in Puerto Rico and the U.S.
Virgin Islands and does not account for the costs of ``storm
hardening'' a network. Given the limited role that the CAM will play as
a budget allocator, coupled with the Commission's desire to provide
support to the Territories as quickly as possible, it would not be
efficient to initiate a
[[Page 59940]]
process to update the CAM before the competitive application process;
re-running the model to make adjustments to the locations currently
within CAM prior to calculating the reserve price would require
significant time and resources. Liberty suggested that, to accurately
determine how many locations currently exist, it and other carriers
undertake a physical walk of the existing locations in a sample of
census blocks or geographic areas and then use those numbers to
extrapolate the number of locations in similarly situated or adjacent
blocks or areas. Reliance on a physical walk, or other new carrier-
submitted data, would introduce substantial delays to implementing
Stage 2, and invite potentially intractable disputes if carriers
disagree regarding the number of locations, contrary to the
Commission's goal of facilitating prompt deployment of resilient
service throughout the Territories. Further, even a walk of a network
could be inaccurate or outdated if buildout is happening concurrently,
or if, as suggested, the walkout is only used as a method of projection
across similarly situated areas. The Commission finds that its reliance
on CAM will provide a reasonably accurate baseline by which to allocate
the budget, and that conducting this process expeditiously outweighs
any benefits that might result from conducting a time-consuming data
collection before beginning the competitive application process.
Moreover, given the benefits of a competitive process in allowing each
applicant to request support at a level that reflects its understanding
of the costs of deployment and in potentially lowering support below
the reserve price, the Commission finds it is not necessary to
incorporate specific network costs related to storm hardening. The
Commission believes the additional support it provides during the 10-
year term addresses these concerns and will allow carriers to do the
work necessary to increase resilience of their networks.
15. Network Performance. To ensure that the Commission spends USF
dollars wisely, it must consider both the cost (in terms of price per
location) and benefits of each proposal. To evaluate the benefits, the
Commission first assigns points based on proposed network performance
to ensure that end users will receive quality service. Evaluating
network performance is consistent with Commission high-cost support
precedent.
16. The Commission establishes three tiers for network speed and
usage allowances, and two tiers for network latency, and allocate
points for each. The Commission will accept applications at each of the
different performance tiers, informed by its experience with the CAF II
auction and prior Commission orders setting performance obligations.
While the Commission aims to provide funding to all supported locations
as cost-effectively as possible within its finite budget, the
Commission also values higher speeds over lower speeds, higher usage
allowances over lower usage allowances, and lower latency over higher
latency. Therefore, for example, the Commission will consider proposals
where the costs to serve are higher, if higher-performance services
will be available. The Commission sees the value to consumers of having
access during the 10-year term of support to service that exceeds its
minimum requirements, and the Commission must take steps to ensure that
the networks it invests scarce universal service support to build will
stand the test of time. For a proposal to qualify for any tier, the
applicant must commit to deploying a network that is fully capable of
delivering speeds and usage allowances that meet or exceed--and latency
that meets or falls below--the relevant standards to all locations
within the geographic area. Applicants must also commit to offer this
level of service throughout the 10-year term to ensure that all users
can take advantage of the network services being funded. The Commission
declines to expand the performance criteria to include scoring for
customer service as WorldNet suggests. The Commission expects carriers
will have adequate business incentives to use the high-quality networks
they deploy with Stage 2 support to provide reliable service, and it
declines to dictate specific business practices or provisions of
customer agreements. Moreover, WorldNet failed to articulate how the
Commission could adjust its scoring to accommodate customer service
performance, what specific factors it should require, what metric it
might use to evaluate those factors, or how it could assign a score
based on a collection of individualized customer agreements.
17. The Commission requires support recipients to deploy a network
capable of providing service at 25/3 Mbps as its minimum speed
requirement. Although the PR-USVI Fund NPRM proposed 10/1 Mbps, fixed
providers are now generally providing at least 25/3 Mbps and in many
cases much faster speeds in both Territories as well as elsewhere in
the United States. Additionally, alternative technologies like
satellite are increasingly able to offer higher speeds. As commenters
note, a 25/3 Mbps minimum speed requirement is consistent with recent
Commission action and helps to ensure that customers and service
providers in the Territories are not subject to a lesser standard of
service than other parts of the country. The Commission therefore
declines the suggestion of AT&T and PRTC that it should adopt 10/1 Mbps
as the minimum speed requirement. The Commission's recent experience
with the CAF II Auction, in which winning bidders committed to making
25 Mbps/3 Mbps or better service to more than 99.7% of the locations in
the areas won, affirms its conclusion that a higher standard of service
is achievable, and the Commission does not want Puerto Rico and the
U.S. Virgin Islands to be left behind. Indeed, the governments of the
Territories themselves would prefer to see even higher-speed deployment
to the Territories. While the Commission applauds these goals of the
Territories, it declines to adopt an even higher speed (e.g., 100 Mbps)
as its minimum requirement, as Governor Mapp suggested, as the data do
not yet support this speed for all areas.
18. Additionally, the Commission adopts a minimum monthly usage
allowance of 200 gigabytes (GB) or a usage allowance that reflects the
average usage of a majority of fixed broadband customers, using
Measuring Broadband America data or a similar data source, whichever is
higher. In the PR-USVI Fund NPRM, the Commission proposed a 170 GB
minimum usage requirement. As with the speed requirement, however,
while some commenters suggested lower usage allowances, the Commission
believes the current market supports higher usage requirements based on
recent usage announced in the Bureau's 2019 Urban Rate Survey PN.
19. The Commission will reward higher combinations of speed and
usage allowances by allocating them fewer points as shown in Table 3.
The Commission will assign 50 points to providers that commit to deploy
the minimum speed requirement of 25/3 Mbps and a minimum usage
allowance of greater or equal to 200 GB or the U.S. Median, whichever
is higher. The Commission will assign 25 points to providers that
commit to deploy networks offering 100/20 Mbps and a minimum usage
allowance of 2TB per month. The Commission recognizes that Puerto Rico
has a goal of Gigabit speed throughout 70% of the island by 2020 and
U.S. Virgin Islands leadership seeks high-speed last-mile connections.
To facilitate deployment of high-speed service in the Territories, the
[[Page 59941]]
Commission will assign no points for 1 Gbps/500 Mbps with 2TB or
greater monthly usage allowance. In the CAF II auction, the Commission
adopted tiers of 100 Mbps/20 Mbps and 1 Gbps/500 Mbps, each with a 2 TB
usage allowance, and it sees no reason to deviate from that decision.
In addition, the Commission declines the Fiber Broadband Association's
proposal to assign 70 points for the deployment of the minimum speed
requirement tier because such a change would result in the points
available for network performance, in the aggregate, outweighing price
per location, contrary to the Commission's determination to prioritize
price per location first.
Table 3--Network Performance Scoring (1 of 2)--Speed/Usage
------------------------------------------------------------------------
Assigned
Speed Monthly usage allowance points
------------------------------------------------------------------------
>=25/3 Mbps......................... >=200 GB or U.S. 50
median, whichever is
higher.
>=100/20 Mbps....................... >=2 TB................. 25
1 Gbps/500 Mbps..................... >=2 TB................. 0
------------------------------------------------------------------------
20. Latency. The Commission adopts a maximum roundtrip broadband
and voice latency of [email protected] that it considers the relative financial
struggle of the carriers in support decisions because the Commission's
allocating fixed support on a competitive basis and it does not want to
reward possible inefficiency.
66. The Commission adopts thorough oversight and accountability
measures like those that it has implemented in other recent high-cost
support proceedings. Together, these measures fulfill the Commission's
obligation to ensure that providers receive support ``only for the
provision, maintenance, and upgrading of facilities and service for
which the support is intended'' as required by section 254(e) of the
Act. The Commission agrees with several commenters that careful
oversight is necessary for it to ensure that recipients use support
from the Uniendo a Puerto Rico Fund and Connect VI Fund efficiently and
for its intended purposes.
67. Reporting and Certification. The Commission requires fixed
support recipients to satisfy all reporting and certification
obligations of providers receiving CAF II auction support, as the
Commission proposed in the PR-USVI Fund NPRM. Accordingly, each support
recipient must, among other things, certify that it is able to function
in emergency situations, and submit information regarding anchor
institutions served. The Commission aligns annual deployment reporting
obligations with those adopted in the March 2016 Rate-of-Return Order,
81 FR 24282, April 25, 2016, as the Commission proposed in the PR-USVI
Fund NPRM. Accordingly, each support recipient must annually submit a
certification and data demonstrating locations where it is prepared to
offer
[[Page 59950]]
voice and broadband service meeting the requisite performance
standards. Failure to timely file geolocation data and associated
deployment certifications may result in a reduction in support. The
Commission also requires awarded providers to measure and report the
speed and latency performance of their broadband service in accordance
with the requirements previously adopted, consistent with the proposal
in the PR-USVI Fund NPRM. The Commission requires fixed support
recipients to annually certify their progress toward (or, beginning
after the sixth year, completion of) deployment in accordance with the
resilience and redundancy commitments in their application and in
accordance with the detailed network plan they submitted to the Bureau
thereafter. In the certification, applicants must quantify their
progress toward the resilience and redundancy targets specified in
their applications (e.g., number of fiber miles buried and/or deployed
aerially, miles of fixed wireless last-mile connections and/or
microwave backhaul, miles with a backup network or path diversity for
terrestrial networks, locations reached with a backup network or path
diversity for satellite). If, after the sixth year, the support
recipient falls short of its resilience or redundancy commitment in a
manner that would have resulted in a higher point total, such failure
will result in the withholding of support equal to a day of support for
every mile by which the applicant fell short (or equal to a day of
support for every end user location by which the applicant fell short,
in the case of satellite). This support reduction is appropriate and
reasonably scaled given the commitment an applicant makes to the
Commission in its proposal and the opportunities it provides winning
applicants to adjust those commitments and seek reassessment during the
deployment process. Collectively, these requirements will ensure that
the PRTRB, U.S. Virgin Islands PSC, USAC, and the Commission possess
sufficient information to fulfill its oversight obligations.
68. The Commission subjects awarded providers to the same
compliance standards as other high-cost support recipients with defined
obligations, consistent with the Commission's proposal in the PR-USVI
Fund NPRM. Pursuant to these standards, a provider that fails to meet
its milestones may have its support reduced until it can meet its
obligations or face recovery actions. Several commenters support this
proposal, and the Commission agrees that adopting clearly-defined
consequences for non-compliance modeled on other defined obligation
high-cost support mechanisms is necessary to ensure compliance.
69. The Commission declines to adopt new recordkeeping requirements
regarding expenditures. The Commission finds the general recordkeeping
obligation of ETCs is sufficient to facilitate oversight. The
Commission's rules already require support recipients to maintain
documentation for ten years, sufficient to justify deployment and
spending, and recipients are subject to random audits to defend their
expenditures. The Commission finds that additional requirements to
maintain more detailed recordkeeping would be duplicative and overly
burdensome and are, therefore, unnecessary for this process.
70. Letters of Credit. The Commission requires winning applicants
to obtain a letter of credit, consistent with the requirements
applicable to winning bidders in the CAF II Auction and other
competitive bidding processes, including the same eligibility criteria
for the issuing bank. The Commission agrees with Viya that it should
expressly adopt the same letter of credit requirements that the
Commission put in place for the CAF II Auction. The Commission finds
that requiring an irrevocable letter of credit from a reliable
financial institution is necessary to protect the Fund, and is an
effective means of securing its financial commitment to provide Connect
America support. Letters of credit permit the Commission to protect the
integrity of universal service funds that have been disbursed and to
reclaim support that has been provided in the event that the recipient
is not using those funds in accordance with the Commission's rules and
requirements to further the objectives of universal service. Moreover,
letters of credit have the added advantage of minimizing the
possibility that the support becomes property of a recipient's
bankruptcy estate, thereby preventing the funds from being used
promptly to accomplish the Commission's goals. Merely requiring a
performance bond would not provide the same level of protection and
would require the involvement of a third party to adjudicate any
disputes that arise, which would complicate the Commission's process
and unnecessarily limit the authority of the Commission to allocate
funds. Experience shows that a competitive support program can obtain
broad participation with a letter of credit requirement in place--the
CAF II Auction received applications from 220 qualified applicants and
awarded $1.488 billion in support to 103 winning applicants. The
Commission therefore rejects arguments that it should allow use of a
surety or performance bond in lieu of a letter of credit.
71. As explained in the Order, if an entity fails to meet the terms
and conditions after it begins receiving support, including the build-
out milestones and performance obligations the Commission adopts in the
Order, and fails to cure within the requisite time period, the Bureau
will issue a letter evidencing the failure and declaring a default,
which letter, when attached by USAC to a letter of credit draw
certificate, shall be sufficient for a draw on the letter of credit to
recover all support that has been disbursed to the entity.
72. Letter of Credit Opinion Letter. Successful applicants must
also submit with their letter(s) of credit an opinion letter from legal
counsel. That opinion letter must clearly state, subject only to
customary assumptions, limitations, and qualifications, that in a
proceeding under the Bankruptcy Code, the bankruptcy court would not
treat the letter of credit or proceeds of the letter of credit as
property of the account party's bankruptcy estate, or the bankruptcy
estate of any other Stage 2 competitive application process recipient-
related entity requesting issuance of the letter of credit under
section 541 of the Bankruptcy Code.
73. Value of Letter of Credit. When a winning applicant first
obtains a letter of credit, it must be at least equal to the amount of
the first year of authorized support. Before the winning applicant can
receive its next year's support, it must modify, renew, or obtain a new
letter of credit to ensure that it is valued at a minimum at the total
amount of money that has already been disbursed plus the amount of
money that is going to be provided in the next year. As in CAF II, the
Commission concludes that requiring recipients to obtain a letter of
credit on at least an annual basis will help minimize administrative
costs for USAC and the recipient rather than having to negotiate a new
letter of credit for each monthly disbursement.
74. Recognizing that the risk of a default will lessen as a
recipient makes progress towards building its network, as in CAF II the
Commission finds that it is appropriate to modestly reduce the value of
the letter of credit in an effort to reduce the cost of maintaining a
letter of credit as the recipient meets certain service milestones.
Specifically, once an entity meets the 60 percent service milestone
that entity may obtain a new letter of credit or renew its existing
letter of credit so that it is valued at 90
[[Page 59951]]
percent of the total support amount already disbursed plus the amount
that will be disbursed the next year. Once the entity meets the 80
percent service milestone that entity may obtain a new letter of credit
valued at 80 percent of the total support amount already disbursed plus
the amount that will be disbursed the next year. As in CAF II, the
Commission concludes that the benefit to recipients of potentially
decreasing the cost of the letter of credit as it becomes less likely
that a recipient will default outweighs the potential risk that if a
recipient does default and is unable to cure, the Commission will be
unable to recover a modest amount of support. The letter of credit must
remain open until the recipient has certified it has deployed broadband
and voice service meeting the Commission's requirements to 100% of the
required number of locations, and USAC has verified that the entity has
fully deployed.
75. Defaults. Consistent with the CAF II Auction, the Commission
concludes that any entity that files an application to participate in
the Stage 2 competitive process will be subject to a forfeiture in the
event of a default before it is authorized to begin receiving support.
The Commission will propose a forfeiture in lieu of a default payment.
In the CAF II Auction, the Commission adopted a base forfeiture of
$3,000 per census block group for any entity that failed to meet the
document submission deadlines or was found ineligible or unqualified to
receive support by the Bureaus on delegated authority, or otherwise
defaulted on its bid or was disqualified for any reason prior to the
authorization. The Commission adopts here the same base forfeiture of
$3,000 per census block group within the geographic area at issue,
subject to adjustment based on the criteria set forth in the
Commission's forfeiture guidelines, for a default by an applicant
before it is authorized to begin receiving support. Applying the same
base forfeiture that the Commission adopted in the CAF II Auction is
warranted here because, in both proceedings, the party's failure risks
undermining the competitive process that the Commission has
established.
76. An entity will be considered in default and will be subject to
forfeiture if it fails to meet the document submission deadlines for
competitive proposals or is found ineligible or unqualified to receive
Stage 2 support by the Bureau on delegated authority, or otherwise
defaults on its winning proposal or is disqualified for any reason
prior to the authorization of support. A winning applicant will be
subject to the base forfeiture for each separate violation of the
Commission's rules. For purposes of the Stage 2 competitive process,
the Commission defines a violation as any form of default with respect
to the geographic area eligible for proposals. In other words, there
shall be separate violations for each geographic area subject to a
proposal, with the base forfeiture determined by the number of census
block groups within the geographic area at issue. That will ensure that
each violation has a relationship to the number of consumers affected
by the default and is not unduly punitive. Such an approach will also
ensure that the total forfeiture for a default is generally
proportionate to the overall scope of the winning applicant's proposal.
Consistent with past Commission proceedings, to ensure that the amount
of the base forfeiture is not disproportionate to the amount of an
applicant's proposal, the Commission also limits the total base
forfeiture to five percent of the total support amount contained in the
applicant's proposal for the term.
77. The Commission finds that by adopting such a forfeiture, it
impresses upon recipients the importance of being prepared to meet all
of the Commission's requirements for the post-selection review process
and emphasize the requirement that they conduct a due diligence review
to ensure that they are qualified to participate in the Stage 2
competitive proposal process and meet its terms and conditions.
78. The Commission directs the Bureau to establish a process to
enable the selection of next-in-line applicants for fixed Stage 2
support in the event any of the provisionally winning applicants
defaults. Doing so will enable Bureau staff to quickly identify
otherwise qualified applicants in the event any of the initially
selected applicants defaults prior to authorization. As the Commission
does not contemplate a future competitive process for these areas and
instead require Stage 2 support recipients to deploy to all locations
in the Territories, expediting selection of a next-in-line applicant is
especially important in this context. Based on the next-in-line process
the Commission establishes, along with other safeguards it put in place
in the Order, the Commission rejects Viya's arguments against a
competitive approach predicated on the risk that the new awardee may
fail to perform.
79. Audits and Oversight. The Commission subjects awarded providers
to ongoing oversight by them and USAC to ensure program integrity and
prevent waste, fraud, and abuse. The Commission reminds providers that
high-cost support recipients ``are subject to random compliance audits
and other investigations to ensure compliance with program rules and
orders.'' The Commission directs USAC to review and revise its audit
procedures to take into account the changes adopted in the Order and to
initiate audits of Stage 2 fixed disbursements throughout Stage 2 fixed
support years. The Commission agrees with Liberty that random
application of this long-standing, continually updated audit program is
essential to ensuring program integrity. Because the Commission sees no
reason to vary from its overall approach to auditing high-cost support
recipients, it declines to adopt Free Press's suggestion that it
requires USAC to audit every Stage 2 support recipient. To address Free
Press's concern about possible ``double-dipping'' from insurance and
USF support, in addition to requiring random audits, the Commission
directs USAC to audit any Stage 2 support recipient for which it has
substantial evidence of noncompliance. The Commission finds it
preferable to allow USAC flexibility to deploy its auditing resources
for maximum efficiency. Adopting Free Press's suggestion to audit all
support recipients could lead to wastefully expensive audits relative
to the amount of support at issue. Moreover, the deployed locations
that recipients report will also be subject to verification, as USAC
currently does for all HUBB filers. Recipients must retain sufficient
evidence to demonstrate that they have built out to all of their
reported locations and be prepared to produce that evidence to USAC in
the course of a compliance review.
80. As with all recipients of Federal high-cost universal service
support, the Commission may initiate an inquiry on its own motion to
examine any ETC's records and documentation to ensure that the
universal service support the ETC receives is being used ``only for the
provision, maintenance, and upgrading of facilities and services'' in
the areas in which it is designated as an ETC. ETCs must provide such
records and documentation to the Commission and USAC upon request. The
Commission also may assess forfeitures for violations of Commission
rules and orders.
81. The Fund currently directs approximately $36.3 million in
frozen support each year to fixed services in Puerto Rico and $16
million in frozen support each year to fixed services in the U.S.
Virgin Islands. None of this support is tied to specific build-out
targets for which the support recipients must be accountable, however.
As
[[Page 59952]]
proposed in the PR-USVI Fund NPRM, as the Commission ramps up the
competitive process it adopts, it will phase down frozen support, which
will no longer be necessary. For the first 12 months following
authorization of a winning applicant, the carrier will receive \2/3\ of
its frozen support; in the second 12-month period, the carriers will
receive \1/3\ of its frozen support; thereafter, the carrier will only
receive whatever, if anything, has been awarded through the competitive
application process. The Commission recognizes that winning applicants
for different geographic areas may be authorized at different times, so
for each geographic area for which a winning applicant is authorized,
the phase-down will begin the month following the authorization of the
winning applicant for that geographic unit. In order to allocate frozen
support to each geographic unit across the Territories during the
phase-down process, the Commission will base phased down support on the
percentage of fixed Stage 2 support the model allocates to that unit.
The Commission adopts this method because it ties remaining frozen
support to an estimate of the relative cost of serving different
geographic areas. In the event either price cap carrier is awarded
support in an eligible area in its respective territory, however, the
new support would completely replace legacy support upon authorization
with no transition. Given the carrier's explicit endorsement of the
support amount in its application, the Commission sees no need for
additional support to ease the transition.
82. The Commission finds that eliminating frozen support will allow
for greater competition and transparency and promote more cost-
effective use of the Fund. A phase-down will ensure there is a
reasonable transition from current support amounts, consistent with
Commission's overall USF goals and preference to avoid flash cuts in
support, and will allow PRTC and Viya to plan accordingly. Consistent
with the Commission's decision not to grant incumbent LECs either a
right of first refusal or an absolute right to support, it declines
PRTC's and Viya's requests to maintain frozen support indefinitely.
Contrary to PRTC's claim, elimination of frozen support is not
punishment for being hit by a hurricane--rather, the hurricanes present
changed circumstances that warrant reevaluation of the Commission's
approach to funding service in Puerto Rico and the U.S. Virgin Islands.
By shifting to a competitive approach that accounts for cost, quality,
and resilience, the Commission reduces the likelihood that broadband
deployment supported by the Fund will be lost due to a future disaster
compared to simply maintaining frozen support. The Commission also
expects the competitive process it designs, with defined deadlines
along with quality and resilience obligations, will lead to faster,
higher-quality deployment to all parts of the Territories compared to
maintaining frozen support. Further, the Commission accounts for the
unique challenges of insular carriers in the Territories in numerous
ways in Stage 2, including by accounting for disaster preparation,
resilience, and redundancy; limiting participation to those with
experience serving the Territories; and increasing available support
relative to the prior frozen support amount.
83. The Commission also rejects PRTC's and Viya's argument that
their claimed reliance interests in frozen support justify maintaining
such support on an ongoing basis. First, the Commission does not
believe either company had a reasonable expectation of ongoing frozen
support. Through its work on the Connect America Fund, the Commission
has demonstrated a preference for competition and defined obligations.
While the Commission in 2014 indicated that it would adopt tailored
service obligations for non-contiguous carriers that elect frozen
support, it has not done so, which would indicate to a reasonable
carrier that the Commission does not view as-is frozen support as a
long-term solution. The 2017 hurricanes represent a changed
circumstance that, by largely eliminating deployment gains from CAF
funding in Puerto Rico and leading to extensive destruction of Viya's
network in the U.S. Virgin Islands, should have put PRTC and Viya on
notice that the Commission would be likely to revisit its policies. And
the PR-USVI Fund NPRM proposed to adopt a competitive mechanism to
replace frozen support. Putting all of this together, PRTC and Viya
should have been on notice that they were unlikely to be able to rely
on ongoing frozen support. Second, even if PRTC and Viya had reasonable
reliance interests, the Commission finds the public policy benefits of
shifting to a competitive approach outweigh any private reliance
interests. The Commission has devised Stage 2 fixed support to select
the carriers able to commit to the best mix of cost-effective, quality,
and storm hardened service. In contrast, PRTC and Viya do not have any
defined service obligations in exchange for frozen support, and
adopting defined obligations for frozen support at this point would be
superfluous to the Stage 2 fixed obligations the Commission adopts.
Therefore, maintaining frozen support on top of Stage 2 support, beyond
a necessary phase-down period, would be wasteful and fail to serve the
limited purposes for universal service support set forth in section
254.
84. Because the Commission has increased the budget for fixed Stage
2 relative to previous support for the territories and expect to award
support for all locations in the Territories through the competitive
process it adopts, the Commission rejects Viya's argument that
eliminating its frozen support is a threat to universal, affordable
service in the U.S. Virgin Islands. By its own account, Viya is in a
strong position to make use of support to efficiently expand and
improve service, and the Commission draws confidence from these
assertions that whether the winning applicant in each of the two U.S.
Virgin Islands geographic areas is Viya or another provider that is
able to make an even better proposal, the U.S. Virgin Islands will
receive high-quality service. The Commission notes further that 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, and it expects Viya to comply with
its legal obligations and to continue to work to maximize its return
from its network. Moreover, the support the Commission has already
provided and the phasedown it adopts should reduce the risk of
disruption if a new recipient is awarded support. The Commission does
not find it prudent to assume it is necessary to adopt an extended
period of overlapping support for the incumbent and the winning
applicant in response to a hypothetical risk of disruption.
85. Similarly, while PRTC quotes the conclusion in the PR-USVI Fund
Order, 83 FR 27515, June 13, 2018, that ``disrupting the existing flow
of frozen support is likely to harm restoration efforts, especially in
more rural areas where those receiving historical support are more
likely to serve,'' circumstances have since changed in two important
ways, warranting a new approach. First, carriers have made much more
progress toward successful restoration of fixed networks. Second, the
Commission has devised a new, long-term Stage 2 that appropriately
shifts the focus of its support from restoration of the pre-hurricane
status quo to high-quality,
[[Page 59953]]
resilient deployment to all locations in the Territories.
86. Commenters presented several other suggestions as potential
solutions to creating resilient networks in the territories. Although
the Commission appreciates the forward-thinking and creative
suggestions, it is limited by its legal authority and by the
Commission's desire to create a technology neutral competitive process
for establishing high-cost support to the Territories going forward.
The Commission also does not want to use conditions on support as a
vehicle to achieve policy goals beyond those it has set forth for Stage
2 support. Accordingly, the Commission declines to condition support on
building out last-mile connections to the federally funded high-speed
open access middle mile in the U.S. Virgin Islands. Likewise, the
Commission declines to condition support on adopting a reciprocal
access requirement for entities outside of the Commission's
jurisdiction. Indeed, the former Governor of the U.S. Virgin Islands
opposed this suggestion, noting that imposing such a requirement would
be outside of the Commission's authority. The Commission does not think
it would be appropriate to leverage Stage 2 funding for the express
purpose of reaching beyond its jurisdiction, and it does not believe it
would have sufficient notice to adopt such a requirement.
87. The Commission encourages Puerto Rico and the U.S. Virgin
Islands to consider approving one-time territory-wide permits for Stage
2 support recipients to bury fiber. The Commission believes such an
approach may facilitate efficient deployment in the Territories. At the
same time, the Commission does not want to intrude upon Territory
decision-making and defer to local authorities on this topic. The
Commission strongly encourages cooperation between carriers and local
authorities to facilitate the restoration, improvement, and expansion
of telecommunication networks for the benefit of all consumers in
Puerto Rico and the U.S. Virgin Islands.
88. The Commission declines Tier 1's suggestion that it negotiates
directly with Tier 1, Level 3/CenturyLink, viNGN and the Bureau of
Information Technology (BIT) to adopt their combined solution for U.S.
Virgin Islands. The Commission applauds Tier 1 and its business
partners for working toward a creative solution together and encourage
continued open inter-industry communication on how to best provide
critical and advanced communications service in the U.S. Virgin
Islands. The competitive process the Commission adopts in the Order
will give all qualified applicants the opportunity to present their
solutions to be selected in a more neutral way than negotiating only
with a few carriers. And these carriers will have the same opportunity
as all other participants to demonstrate the objective qualifications
of their proposals.
89. The Commission declines to adopt the CPR Community anchor model
because the Act mandates access to telecommunications and information
services for all consumers in all regions of the United States, not to
a limited number of facilities, even for altruistic purposes. The
Commission does not see a ready means to incorporate the CPR Community
anchor model into an approach that would lead to deployment to all
locations in the Territories, and CPR did not explain how its proposal
would lead to such deployment.
90. The Commission agrees with AT&T that the budget it adopts for
Stage 2, as well as its prior Stage 1 and advance support, adequately
address the needs identified in the emergency requests for support that
the Commission received closely following the hurricanes. The
Commission finds that many of the requests for relief sought in these
petitions were adequately addressed by the Commission's quick response
following the hurricanes to advance support, by its subsequent decision
not to offset that support against future support, and by the
disbursement of Stage 1 support. It was reasonable and more efficient
for the Commission to act comprehensively determine the appropriate
budget, timing, and scope of support for the Uniendo a Puerto Rico Fund
and the Connect USVI Fund, rather than acting piecemeal on a range of
requests. It is the Commission's expectation that the budgets it
establishes, based on the current state of networks in the Territories,
are sufficient to promote access to quality telecommunications and
information services in Puerto Rico and the U.S. Virgin Islands.
Additionally, the Commission notes that it is now well past the time in
which granting emergency or immediate short-term post-hurricane relief
would make sense. Therefore, the Commission declines to adopt any
additional emergency, advanced, or other short-term support for Puerto
Rico or the U.S. Virgin Islands, and they dismiss the emergency
petitions filed by PRTC, Viya, Vitelcom, and PRWireless, which seek
additional support beyond the adopted overall budget. As to the
PRWireless Petition, which is framed as a request for a waiver, the
Commission further concludes that granting a waiver at this point in
time would not serve the public interest because, two years after the
hurricanes, it is unlikely that PRWireless faces the same immediate
post-storm challenges that it set forth as the basis for granting a
waiver in its petition, which it filed only weeks after the storms.
91. Last, the Commission rejects various arguments from Tri-County
Telephone Association (TCT) that the Commission lacks the authority to
create, and should not create, the Uniendo a Puerto Rico Fund and the
Connect USVI Fund. Stage 2 support addresses the principle that
``[a]ccess to advanced telecommunications and information services
should be provided in all regions of the Nation.'' Further, the
principle in section 254(b)(1) requiring the Commission to develop
policies that make available ``quality'' services permits it to support
hardening of facilities in storm prone areas. Stage 2 support will
``advance[]'' universal service in the Territories by ensuring that
more Americans have access to quality services that are reasonably
comparable to services provided in urban areas, for instance with
respect to network reliability. And the Commission's obligation to
``preserv[e]'' universal service permits it to fund network hardening,
as well as any remaining restoration in the context of Stage 2 mobile
support.
92. While TCT argues that the introduction of the RESTORED Act
shows that Congress thinks the Commission currently lacks authority to
fund service restoration, that bill only had one sponsor and never
proceeded past introduction and reference to the relevant House
committee and subcommittee, so the Commission cannot infer from this
bill a sense of Congress's view as a whole. The Commission finds the
more reasonable view is that it possesses the requisite authority to
adopt Stage 2 support as set forth herein, and it rejects TCT's
argument that the bill's introduction weighs against that conclusion.
93. The Commission also disagrees with TCT's contention that
because ``the high-cost program is based upon Sec. 254(b)(3),'' the
Commission must offer ``evidence that consumers in Puerto Rico and the
USVI have experienced higher rates for service than other parts of the
country as a result of Hurricanes Maria and Irma'' to act. This
argument would incorrectly lead the Commission to ignore all of section
254 other than the ``reasonably comparable rates'' clause of section
254(b)(3), contrary to the Commission's duty to account for all
statutory direction and contrary to
[[Page 59954]]
longstanding Commission precedent. In the USF/ICC Transformation Order,
the Commission ``address[ed] [its] statutory authority to implement
Congress's goal of promoting ubiquitous deployment of, and consumer
access to, both traditional voice calling capabilities and modern
broadband services over fixed and mobile networks,'' and in doing so
specifically cited and relied on sections 254(b), (c), and (e). As set
forth in the Order, the Commission has ample authority under section
254 to adopt Stage 2, and it rejects TCT's unduly constricted view.
94. The Commission also rejects TCT's various policy-based
objections to Stage 2. TCT's argument that ``[w]ere the Commission to
dip into USF programs each time communications networks were damaged by
a natural disaster, it would cripple the USF'' relies on speculation
about unknown future events, and is belied by the Commission's
consistent efforts to manage the Fund responsibly, including its
efforts to prioritize cost effectiveness in the Order. While TCT
contends that other sources of funding (such as the Department of
Homeland Security, Federal Emergency Management Agency (FEMA) or
philanthropy) would be more apt for recovery efforts than USF, the Fund
is directed specifically at deployment of communications networks, and
the Commission is the expert agency on communications and have been
charged by Congress with ``mak[ing] available, so far as possible, to
all the people of the United States . . . a rapid, efficient, Nation-
wide, and world-wide wire and radio communication service with adequate
facilities at reasonable charges.'' The Commission welcomes and
encourages other support efforts, but it has a role to play here
consistent with its expertise and statutory responsibilities. Finally,
the Commission rejects TCT's argument that it should not proceed
because ``the Commission's willingness to act as an effective insurer
of last resort sends a strong signal to carriers . . . that they can
skimp on private insurance coverage.'' The impact of Hurricane Maria
and Irma on the Territories have presented extraordinary circumstances,
and carriers should not assume that the Commission would provide
support under different circumstances--the Commission is not and will
not be an insurer of last resort.
95. The Commission is committed to ensuring that Americans in
Puerto Rico and the U.S. Virgin Islands have access to advanced mobile
telecommunications networks that provide the same high-speed broadband
services that residents of the mainland United States enjoy, including
high-speed 4G LTE and, increasingly, next generation wireless services
known as 5G. The Commission recognizes that carriers seeking to deploy
advanced mobile services in Puerto Rico and the U.S. Virgin Islands
face similar Territory-specific challenges as fixed service providers
from economic conditions, insularity, and risk of natural disaster. To
facilitate the deployment of modern, high-speed, and storm-hardened
advanced telecommunications mobile networks, the Commission adopts a
three-year funding period for Stage 2 mobile support that allows
facilities-based mobile providers a one-time election of support based
on their number of subscribers.
96. For that three-year term, the Commission allocates budgets of
$254.4 million to the Uniendo a Puerto Rico Fund and $4.4 million to
the Connect USVI Fund. More specifically, providers will make
concurrent elections for two parts of the budgeted support. First,
providers may elect receive up to 75% of the support for which they are
eligible in exchange for a commitment to restore, harden, and expand
networks using 4G LTE or better technology capable of providing
services at speeds of at least 10/1 Mbps. Second, given the power of 5G
network capabilities to unleash a new wave of entrepreneurship,
innovation, and economic opportunity for communities across the
country, providers may also elect to receive up to 25% of the support
for which they are eligible in exchange for a commitment to
specifically deploy 5G mobile network technology, capable of delivering
speeds of at least 35/3 Mbps. By the conclusion of Stage 2, the
Commission expects to establish and adopt a competitive funding
mechanism for the long-term expansion of advanced telecommunications
access and next generation wireless services for the Territories that
builds on its experience from its provision of Stage 2 mobile support,
the competitive mechanism the Commission adopts here for fixed service,
and other competitive mechanisms adopted by them.
97. The Commission adopts its proposal in the PR-USVI Fund NPRM to
make available and allocate Stage 2 mobile support to facilities-based
mobile providers that provided services in Puerto Rico or the U.S.
Virgin Islands prior to the hurricanes. For eligible mobile providers
that elect to participate in Stage 2, the Commission will allocate
Stage 2 mobile support in each territory based on the number of mobile
subscribers according to their June 2017 FCC Form 477 data, consistent
with its approach to Stage 1.
98. Any eligible facilities-based mobile provider may elect to
participate in this opportunity for support over the three-year period
the Commission adopts for Stage 2. Providers that are eligible for
Stage 2 mobile support under either the Uniendo a Puerto Rico Fund or
the Connect USVI Fund will have a one-time opportunity to elect to
participate in Stage 2 support. Each provider will make two
simultaneous elections. First, it may elect to receive up to 75% of the
support for which it is eligible in exchange for a commitment to
restore, harden, and expand networks capable of providing 4G LTE or
better services. Second, it may elect to receive 25% or more of the
support for which it is eligible in exchange for a commitment to
specifically spend that support toward deployment of networks capable
of providing 5G mobile network technology based-services.
99. Eligible mobile providers may elect to receive Stage 2 support
from their respective fund through an election process similar to that
used in Stage 1. To participate, a facilities-based mobile provider
must, within 30 days of the publication of the Order in the Federal
Register, either (1) renew the certification it provided to the
Commission as part of Stage 1 of the Uniendo a Puerto Rico Fund and the
Connect USVI Fund specifying the number of subscribers (voice or
broadband internet access service) it served in the Territory as of
June 30, 2017 (before the hurricanes); or (2) for any mobile provider
that did not submit an election to receive Stage 1 support, submit to
the Commission a certification specifying the number of subscribers
(voice or broadband internet access service) it served in the Territory
as of June 30, 2017 (before the hurricanes), along with accompanying
evidence. Providers also must file a copy of the certification and
accompanying evidence (if applicable) through the Commission's
Electronic Comment Filing System (ECFS) as well as email a copy to
[email protected]. The Commission will then verify eligibility
using various data sources, including FCC Form 477 data. The Commission
directs the Bureau to then allocate these amounts among qualifying
providers of each territory according to the number of subscribers
(voice or broadband internet access service) each served as of June 30,
2017. The Bureau shall make public these allocations via a Public
Notice as soon as practicable.
100. Nearly all commenters support Stage 2 support for facilities-
based mobile providers that provided service to Puerto Rico and the
U.S. Virgin Islands prior to the hurricanes based on
[[Page 59955]]
their June 2017 FCC Form 477 subscriber data. The Commission agrees
with commenters that the allocation of Stage 2 mobile support for the
restoration, hardening, and expansion of mobile network infrastructure
will be best accomplished by relying on subscriber data on the 2017 FCC
Form 477. By making pre-hurricane facilities-based mobile providers
eligible for Stage 2 support, the Commission will be able to quickly
restore, harden, and expand service. This necessary and targeted high-
cost mobile support will help rebuild damaged networks, harden against
future natural disasters, and improve and expand mobile services
through the installation of 4G LTE or better technology in Puerto Rico
and the U.S. Virgin Islands in a timely and cost-effective manner.
101. Although the Commission uses 2018 FCC Form 477 data for fixed
support, it uses pre-hurricane subscriber data from 2017 FCC Form 477
to allocate mobile support as a means to account for its goals to
restore and harden mobile networks damaged by the hurricanes. In this
regard, pre-hurricane subscriber data, as reflected in the June 2017
FCC Form 477 data, provides an objective measure of available data to
approximate relative networks to achieve the Commission's goals. The
Commission further notes that its review and analysis of the record
does not reflect the entrance of new mobile service providers in Puerto
Rico and the U.S. Virgin Islands, so the Commission does not need to
deviate from the use of 2017 FCC Form 477 subscriber data to allocate
mobile support. The Commission concludes that limiting provider
eligibility to facilities-based providers that provided mobile services
prior to the hurricanes best facilitates its goals for the full
restoration and hardening mobile service networks that were devastated
by the hurricanes, and more readily facilitates the rapid, efficient
deployment of 4G LTE and 5G networks in the Territories.
102. The Commission declines to adopt Viya's proposal to allocate
mobile support based on the geographic area of a provider's network.
Specifically, Viya proposed that ``Stage 2 mobile funding should be
awarded pro rata to each eligible mobile carrier based on the relative
number of square miles that the carrier served prior to the hurricanes,
as shown in the June 2017 Form 477 shapefiles filed by the carriers.''
However, providers in Puerto Rico and the U.S. Virgin Islands do not
currently employ an industry-wide standard methodology to calculate and
report network coverage as part of their Form 477 filings.
Consequently, the Commission does not have consistent, reliable, and
precise geographic data needed to allocate mobile support to providers
in the Territories. Rather than using network area reporting that
varies among providers, the Commission concludes that allocating mobile
support using subscriber data allows it to reach as many consumers as
possible and as quickly as possible in the Territories with its limited
budget and thus serves the best interest of the residents of Puerto
Rico and the U.S. Virgin Islands in Stage 2.
103. Support Amounts. Each eligible mobile provider that elects to
participate in Stage 2 of the Uniendo a Puerto Rico Fund or the USVI
Connect Fund will receive monthly installments of its pro rata share of
mobile support amortized over the three-year support period adopted in
the Order. Each recipient's pro rata share will be adjusted according
to its election to receive or decline support for 4G LTE and/or 5G
deployment.
104. Because the Commission adopts Stage 2 of the Uniendo a Puerto
Rico Fund and the Connect USVI Fund for mobile providers as
comprehensive substitute mechanisms for mobile high-cost support,
providing certainty and stability in those areas for the next three
years, carriers that elect not to participate in Stage 2 will receive
only transitional legacy mobile support. The Commission sets
transitional support amounts only for existing recipients of high-cost
support that do not elect to participate in Stage 2. Any such providers
will receive one-half of their legacy mobile support, excluding prior
emergency and Stage 1 support to mobile providers, amortized for the
first 12-month period following the public notice announcing the start
of the Stage 2, and no legacy support for mobile services thereafter.
The Commission believes that an expeditious phase-down of legacy
support is warranted since it is not conducting a competitive process
for mobile high-cost support, and all carriers will have the
opportunity to participate in this substitute mechanism. Moreover, this
phase-down will give a predictable glidepath as the Commission
transitions from one support mechanism to another while preserving its
finite universal service funds to begin funding mobile service under
the terms of Stage 2.
105. The Commission adopts the proposed total budget over a three-
year period of $258.8 million in mobile support for the Uniendo a
Puerto Rico Fund and the Connect U.S. Virgin Islands Fund in light of
the unique challenges mobile providers face following Irma and Maria
and to provide access to advanced telecommunication services, including
5G wireless services. Given that two years have passed since Maria and
Irma and based on the progress carriers have made in restoring their
networks, the Commission makes clear that Stage 2 mobile support is not
simply to restore mobile network coverage to prior service levels. The
Commission intends for Stage 2 to foster greater access to advanced
telecommunications for the Territories, including access to both 4G LTE
and 5G technologies.
106. Current high-cost support directs approximately $78.9 million
each year to mobile services in Puerto Rico and over $67,000 each year
to mobile services in the U.S. Virgin Islands. The Commission's budget
increases the amount of support to the Territories by $7 million per
year over three years to ensure that providers have sufficient funds to
restore, harden, and expand voice and broadband-capable networks. The
Commission therefore establishes Stage 2 of the Uniendo a Puerto Rico
Fund for mobile networks at up to $254.4 million over a three-year
period and establish the Connect USVI Fund Stage 2 budget for mobile
networks at up to $4.4 million over a three-year period. This budget
reflects an increase of approximately $17.7 million over three years in
Puerto Rico and approximately $4.2 million over three years in the U.S.
Virgin Islands compared to pre-existing frozen support.
107. The Commission declines requests for additional mobile support
beyond the budget. In reaching the Commission's decision in the Order,
it believes that the Stage 2 mobile support they allocate--in addition
to the $71.74 million in extra mobile support previously provided--will
be sufficient to allow facilities-based mobile service providers to
restore any lingering damaged or destroyed network facilities and make
meaningful progress to harden their networks and expand the
availability of voice services and modern, high-speed broadband
services. In several instances, carriers have reported complete or
near-complete restoration of their mobile networks following the
hurricanes, suggesting that directing Stage 2 support only to
restoration would be too limited a goal. For instance, PRTC informed
the Commission that it has fully restored prior service levels and, in
fact, added to its mobile network facilities. Additionally, AT&T
reports that despite significant challenges, it has restored much of
its network. The support amount the Commission dedicates thus reflects
its priorities to complete any
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remaining rebuilding and promote the deployment and hardening of
modern, high-speed mobile networks in a fiscally responsible manner
over a three-year term.
108. Based on the record and the restoration that mobile providers
have achieved following Hurricanes Irma and Maria, the Commission
directs that 75% of Stage 2 mobile support be allocated for the
restoration, hardening, and expansion of 4G LTE or better mobile
networks, and it directs that the remaining 25% of Stage 2 mobile
support be allocated specifically for the deployment of 5G technology
in the Territories. Commenters broadly support the deployment of 4G
LTE, and the Commission finds that requiring 4G LTE as its minimum
standard for the majority of support for funded deployments ensures
that finite universal service funds are used efficiently to provide
consumers access to robust mobile broadband service in the near and
long term that is comparable to 4G LTE network-based service being
offered in urban areas. The Commission further specifically direct a
portion of Stage 2 mobile support to the deployment of 5G to ensure
that Puerto Rico and the U.S. Virgin Islands are not left behind as
carriers increasingly invest in deploying 5G mobile network technology.
By supporting the deployment of 5G networks, the Commission encourages
the deployment of the types of facilities that will best achieve the
principles set forth in section 254(b) of the Act, including the
availability of quality services, the deployment of advanced services,
and access by consumers in insular areas and low-income consumers to
reasonably comparable services. In addition to furthering the universal
service principles of 254(b), the Commission believes that encouraging
the transition towards 5G infrastructure deployment will help unleash
entrepreneurship, innovation, and economic opportunity for the
Territories.
109. Consistent with the Commission's prior round of support in
Stage 1, it retains the pre-existing mobile support allocations and
allocate about 80% of the proposed additional support for mobile
services to Puerto Rico and about 20% to the U.S. Virgin Islands in
light of the changed circumstances resulting from the destruction to
networks caused by the 2017 hurricane season. Several commenters
support this decision. The Commission expects that the amount of
support available will enable eligible mobile carriers to restore,
harden, and expand mobile networks over the next three years, to at
least pre-hurricane network performance levels if not better, at which
point it will revisit the amount of support necessary to further expand
and/or harden mobile service available in the Territories.
110. In reaching this conclusion, the Commission finds its
allocation between fixed and mobile services to be appropriate. Except
for the Commission's increase in fixed support to Puerto Rico, this
relative allocation is the same that it used in Stage 1, and the
allocation similarly reflects the greater costs of deploying fixed
services and its expectation that improvements to fixed network
backhaul will facilitate improved mobile services. The Commission notes
that the budget it adopts increases annual mobile support to the U.S.
Virgin Islands by almost twenty-two times the prior level--this large
relative increase reflects its view that the existing, very modest
level of mobile support for the U.S. Virgin Islands would be
insufficient to support meaningful progress toward restoration,
hardening, and expansion of 4G LTE and 5G mobile technology-based
services during Stage 2 in light of the challenges of serving the
Territory.
111. Term of Support. Consistent with the PR-USVI Fund NPRM, the
Commission concludes that a three-year period is appropriate for Stage
2 support. The Commission first notes that providers did not submit
specific comments proposing a different time period for Stage 2 mobile
support, and only BBVI explicitly supported the proposed three-year
period. The Commission expects the three-year period to benefit it by
allowing time for it to develop further procedures and standards for
mobile voice and broadband service that may be applied to a future
long-term Stage 3 process to allocate support for mobile services in
the Territories. The Commission anticipates issuing a further notice of
proposed rulemaking to seek input on when and how to implement a long-
term Stage 3 mobile support process. The Commission's ultimate goal for
mobile support is to adopt a Stage 3 mobile support mechanism to
facilitate the deployment and maintenance of high-speed mobile
broadband networks throughout Puerto Rico and the U.S. Virgin Islands.
Although the Commission shifts to a competitive mechanism now for fixed
Stage 2 support, the Commission believes it would be premature to adopt
a long-term process for mobile support for several reasons. In
developing a Stage 3 mobile support mechanism, the Commission will
benefit from evaluating competitive models, including the fixed Stage 2
competitive allocation mechanism in this proceeding, as possible models
upon which to build. The Commission will also benefit from evaluating
initial progress in deployment of high-speed 5G and 4G LTE networks in
the Territories during Stage 2, and it will benefit from evaluating
ongoing development of the 5G standard. While the Commission seeks to
avoid delay, these factors--which do not apply to fixed support--
warrant a more incremental approach to mobile at this time. The
Commission therefore agrees with AT&T that in the context of mobile
support, it should divide Stage 2 of the Uniendo a Puerto Rico Fund and
Connect USVI Fund into two stages.
112. Eligible Areas. The Commission concludes that all areas of
Puerto Rico and the U.S. Virgin Islands will be eligible for mobile
high-cost support. Consistent with section 254(e) of the Act and the
Commission's rules, the Commission believes making all areas eligible
allows support to be used anywhere it is necessary for any remaining
restoration efforts as well as new deployments, network upgrades, and
storm hardening and resilience, thereby supporting the return of
service and competition in each territory. Some mobile carriers in the
Territories continue to work toward full restoration, and all face
challenges in expanding and hardening their communication networks. For
example, AT&T states that during the proposed Stage 2 period, it will
continue ``backhaul restoration efforts includ[ing] maximizing the
population served by buried infrastructure, hardening above-surface
infrastructure where possible, diversifying key fiber routes, and
expanding backup microwave backhaul capabilities.'' Viya states that
Stage 2 mobile ``funding is vital both to complete the restoration of
wireless telecommunications networks in the USVI and for the hardening
of mobile networks against damage caused by the annual hurricane
seasons in future years.'' Likewise, PRTC states that support ``will be
critical to . . . make [its network] more resilient to future natural
disasters.'' Facilitating network hardening is also appropriate in
light of the heightened risk of damage due to disasters faced by and
insular nature of the Territories, and the Commission thus finds it
prudent and in the public interest to account for the heightened
possibility of damaging future natural disasters in the Territories. In
addition, the heightened economic challenges faced by the Territories,
which were amplified by Irma and Maria, justify
[[Page 59957]]
ongoing support with respect to expanding deployment of high-speed
mobile networks, since availability of quality, affordable mobile
services promotes economic development. The Commission therefore gives
support recipients certain flexibility in their businesses to determine
where hardening and/or expansion will be most impactful, including by
taking into account post-hurricane population shifts, subject to the
limitation that support must be used for high-speed 4G LTE or 5G
networks, as specified. After the three-year Stage 2 period, the
Commission expects to reevaluate whether conditions in the Territories
have recovered such that it can focus support in areas where market
forces alone cannot support the provision of mobile services.
113. Remaining Restoration. The Commission directs Stage 2 support
principally toward new and improved deployment of hardened and high-
speed mobile networks, and many commenters state that their network
coverage restoration to prior service levels exceeds the restoration
benchmarks it adopts in the Order. Nevertheless, the Commission
recognizes that some restoration of network coverage area to pre-
hurricane levels may still be necessary. Therefore, at a minimum, the
Commission requires Stage 2 support recipients to commit to a full
restoration of their pre-hurricane network coverage areas as reported
on their June 2017 FCC Form 477 and at reasonably comparable levels to
those services and rates available in urban areas. The Commission
agrees with commenters that it should require recipients to fully
restore service to the pre-hurricane coverage area levels because of
the critical role telecommunications networks play in the recovery and
economic growth and prosperity of Puerto Rico and the U.S. Virgin
Islands. In geographic areas where continued restoration is needed, the
Commission requires recipients to restore the network coverage area
using 4G LTE or better technologies that meet the minimum service
requirements in the Order. In cases where a Stage 2 support recipient
has completed the restoration of its network to its pre-hurricane
coverage area prior to the receipt of Stage 2 support, the Commission
requires support to be used solely for hardening, upgrading, or
expanding 4G LTE and 5G networks that meet the minimum service
standards specified in the Order.
114. The Commission concludes the full restoration of mobile
networks is integral to rebuilding communities, serving the public
safety needs of the islands, and providing access to telecommunication
and information services to consumers available prior to the
hurricanes. Moreover, the Commission notes that the full restoration of
network service coverage pre-hurricane serves is an essential baseline
for determining unserved areas of Puerto Rico and the U.S. Virgin
Islands as the Commission moves forward and make voice and broadband
service universally available to all consumers. The Commission will use
the mobile network coverage area to determine how best to structure a
future stage to allocate long-term mobile support in a tailored and
cost-effective manner.
115. Appropriate Use of Support. The Commission reaffirms that
universal service support should be targeted towards 4G LTE and better
technologies in order to provide the Territories with high-quality
mobile service. The Commission has observed that consumers increasingly
rely on greater performing mobile networks, including 4G LTE, in order
to take advantage of the significantly better performance
characteristics of these networks, including faster data transfer
speeds while using the web or web-based applications. And, as noted in
the Order, carriers are rapidly investing in 5G deployment across the
country. Directing support in Stage 2 towards 4G LTE and 5G
technologies will ensure that consumers in Puerto Rico and the U.S.
Virgin Islands are not relegated to substandard mobile service in the
near and long-terms. To help achieve the Commission's goal to advance
4G LTE and 5G technologies, it emphasizes that Stage 2 mobile support
may not be used towards restoration, hardening, and expansion of 3G or
lower mobile technologies. The Commission thus concludes the use of
Stage 2 mobile support for 4G LTE and 5G technologies will serve the
public interest to ensure universal service for all residents of Puerto
Rico and the U.S. Virgin Islands. To promote the efficient use of
support and encourage high-speed deployment, the Commission directs
that carriers use authorized support to deploy, harden, or expand
networks consistent with the 4G LTE and 5G parameters in the Order.
116. Minimum Service Requirements for 4G LTE Support. For the
portion of support directed to restore, harden, or expand networks
capable of providing 4G LTE or better service (i.e., the allocation of
up to 75% of the provider's eligible support amount), the Commission
adopts minimum service requirements that define the baseline 4G LTE
performance standard for Stage 2 mobile support recipients in Puerto
Rico and the U.S. Virgin Islands. The Commission agrees with Viya that
it should adopt minimum service requirements for speed, latency, and
usage consistent with its advancement of 4G LTE technology or better.
The Commission therefore requires support recipients to meet minimum
baseline performance requirements for data speeds, data latency, and
data allowances for at least one plan that carriers offer where
carriers have deployed 4G LTE, or will deploy or upgrade to 4G LTE
networks or better using Stage 2 support as critically important to
benefit the Territories' recovery. The data speed of the network for
areas in which the recipient used Stage 2 support must be at least 10
Mbps download speed or greater and 1 Mbps upload speed or greater by
the end of the three-year support term. For latency, the required
measurement must have a data latency of 100 milliseconds or less round
trip by the end of the three-year support term. In addition, support
recipients must offer at least one service plan that includes a data
allowance of at least 5 GB. A support recipient's service plan with the
required data allowance must be offered to consumers at a rate that is
reasonably comparable to similar service plans offered by mobile
wireless providers in urban areas.
117. In adopting minimum performance standards, the Commission
declines to adopt AT&T's proposal to implement 4G LTE service without
minimum speed and latency requirements or, at most, requiring minimum
speed and latency only for a small portion of the network in each
territory. First, the record reflects that certain carriers currently
operate 4G LTE mobile wireless networks that cover large geographic
areas. Moreover, targeting support to measurable performance
requirements will ensure that the Commission does not relegate the
Territories to substandard service that is not comparable to advanced
mobile services. The Commission therefore concludes that requiring
minimum performance standards for the use of Stage 2 support for new or
upgraded 4G LTE facilities or better will best serve the goals of
universal service for consumers living outside urban areas of Puerto
Rico and the U.S. Virgin Islands.
118. Minimum Service Requirements for 5G Support. Consistent with
the Commission's approach in the Order, for the portion of support
directed to the deployment of 5G networks (i.e., the allocation of up
to 25% of the provider's eligible support amount), it adopts minimum
service requirements that
[[Page 59958]]
define the baseline 5G performance standard for Stage 2 mobile support
recipients in Puerto Rico and the U.S. Virgin Islands. Specifically, as
the Commission stated in the Order, it establishes as a minimum the 5G-
NR technology standards specified by Release 15 and require providers
to meet these specifications as part of the optional deployment of 5G
technology. This is consistent with the Commission's approach in the
Digital Opportunity Data Collection, 84 FR 43705, August 22, 2019. In
addition, deployments of 5G technologies made with Stage 2 support must
provide a data speed of at least 35/3 Mbps. The Commission finds it
reasonable to require at least 35 Mbps as a downlink speed because the
minimum performance requirements of 5G technology, using a typical 10
MHz channel bandwidth, including other system efficiencies such as
Multiple Input Multiple Output (MIMO) should permit service providers
to meet this speed requirement. Further, the provider must offer a plan
with rates that must be reasonably comparable to similar service plans
offered by mobile wireless providers in urban areas. The Commission
declines to adopt further specifications at this time because it
recognizes that 5G is a new and developing technology.
119. Return of Support. The Commission will hold mobile providers
to their specific deployment commitments in exchange for their election
and receipt of all Stage 2 mobile support. A mobile provider that fails
to use Stage 2 high-cost support towards its commitment for networks
capable of providing 4G LTE or better services as specified herein and/
or towards its specific deployment of 5G mobile network technology-
based services as specified herein shall return the unused support to
the Administrator within 30 days following the end of the three-year
support period. The amount of support that must be returned shall be an
amount equal to the difference between the amount spent on eligible
expenses towards its commitment and the full amount of its elected
commitment of up to 75% or 25%. For example, a mobile provider that
fails to meet its commitment to use 25% of the Stage 2 mobile support
for which it is eligible for 5G deployment shall return that amount or
the difference between the amount spent on 5G deployment and 25% of the
Stage 2 mobile support for which it is eligible. In addition, a mobile
provider that elects to receive 75% of its eligible support in exchange
for its commitment to provide networks capable of providing 4G LTE or
better services and fails to use the support towards eligible expenses
to meet its commitment must return any unspent amount of support to the
Administrator.
120. The Commission adopts annual reporting requirements that will
enable it and USAC to ensure compliance with section 254 of the Act and
to monitor the ongoing progress and performance of the Uniendo a Puerto
Rico Fund and Connect USVI Fund recipients by interpreting Sec. Sec.
54.313 and 54.320 of the Commission's rules to apply to Stage 2 mobile
support.
121. Consistent with the Commission's approach in other
proceedings, it adopts reporting of an interim and final benchmarks for
the full restoration of mobile network coverage and service
requirements detailed in the Order, which will enable the Commission
and USAC to monitor the ongoing progress and performance of all mobile
support recipients. Specifically, to monitor the progress of
restoration, the Commission declines to adopt the PR-USVI Fund NPRM's
proposal for submission of biannual coverage maps and instead will
require submission and certification from support recipients of one
annual network coverage map at the conclusion of the second and third
year of the support period. The Commission requires that each recipient
demonstrate and certify to at least 66% of its pre-hurricane network
coverage by the end of year two of the Stage 2 support period, and at
least 100% of its pre-hurricane coverage, if not more, by the end of
the three-year support period.
122. The Commission will determine the restoration of a provider's
network coverage area based on FCC Form 477 network coverage data
reported by mobile providers. The Commission believes that Form 477
network coverage data, including each support recipient's shape files,
will provide the best comparison for determining whether mobile
providers have met their network coverage area milestones. The
Commission expects each support recipient to determine its network
coverage data using the same methodology it used for the June 2017 FCC
Form 477 so the Commission will be able to conduct an ``apples to
apples'' comparison when analyzing whether the provider has in fact met
its Stage 2 milestones. The Commission also requires recipients to
submit evidence of network coverage areas, including electronic
shapefiles site coverage plots illustrating the area reached by mobile
services; a list of census blocks reached by mobile services; and
results of the provider's drive, drone, and/or scattered site tests.
The Commission directs the Bureau to define more precisely the content
and format of the information required to be submitted by recipients.
123. The Commission also adopts a reporting requirement to monitor
the ongoing progress for network hardening by providers. Specifically,
the Commission adopts AT&T's suggestion that it should require
recipients of Stage 2 mobile support to identify on a map where they
have undertaken hardening activities in the past year. To facilitate
the Commission's evaluation of the information that the map contains,
it also requires each support recipient to provide, 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.
124. Like other high-cost recipients that are required to meet
milestones, the Commission will require each recipient of Stage 2
mobile support through the Uniendo a Puerto Rico Fund and the Connect
USVI Fund to file certifications that it has met its milestones,
including a certification of the minimum service requirements as
provided in the Order at the end of the third year of the support
period. As provided in the Order, a provider may demonstrate the target
network coverage based on current FCC Form 477 standards; however, the
Commission will require that network coverage reporting requirements
conform to any other generally applicable mobile wireless mapping
standards that it subsequently adopts. The Commission also requires
each provider to submit test results verifying coverage along with
their certification. The Commission will require that the certification
of the minimum service requirements and the test results in verifying
coverage, obtained via a methodology selected by the carrier and
approved by the Bureau, demonstrate network speed and latency that meet
or exceed the minimum service requirements the Commission adopts. The
Commission directs the Bureau to define more precisely the content and
format of the information required to be submitted by recipients, and
it directs USAC to verify the representations in the submissions.
125. The Commission further requires an annual certification for
mobile providers that elect to receive up to 25% of their available
support for the deployment of 5G technology. Each participant must
specifically certify its use of Stage 2 support related to the
deployment of 5G technology to ensure compliance with its commitment.
As part of its certification, the Commission
[[Page 59959]]
requires each provider, no later than 30 days after the end of each 12-
month period of Stage 2 support, to (1) report the total costs incurred
and total amount of Stage 2 support spent related to the deployment of
5G technology during the preceding 12-month period; and (2) describe in
detail how it used the support for deployment of 5G technology.
126. Finally, as with all ETCs, high-cost recipients of Stage 2
mobile support from the Uniendo a Puerto Rico Fund and the Connect USVI
Fund will be subject to ongoing oversight to ensure program integrity
and to deter and detect waste, fraud, and abuse. All ETCs that receive
high-cost support are further subject to compliance audits and other
investigations to ensure compliance with program rules and orders. The
Commission concludes that all mobile support recipients will be subject
generally to the same audit requirements as recipients of Connect
America Fund Phase II support, fixed Stage 2 support in this
proceeding, and all other high-cost support. Moreover, the Commission's
decision in the Order does not limit its ability to recover funds or
take other steps in the event of waste, fraud, abuse, or
misrepresentations.
127. In addition to the criteria the Commission adopts in the
Order, it also adopts the following requirements for any winning
applicants seeking Stage 2 fixed support for voice and broadband
service and mobile providers electing to receive Stage 2 support. The
Disaster Preparation and Response Plan and Disaster Information
Reporting System (DIRS) requirements set forth in the Order apply to
all Stage 2 fixed and mobile support recipients.
128. Disaster Preparation and Response Plan. Helping to protect
fixed and mobile networks in Puerto Rico and the U.S. Virgin Islands
against future hurricanes and other disasters is of vital importance,
and the Commission cannot account for all forms of disaster preparation
via objective scoring criteria in its fixed competitive proposals
process (nor do the Commission employ such a process for Stage 2 mobile
support). To ensure that Stage 2 support recipients have a holistic
plan to prepare for and respond to possible disasters, the Commission
will require each recipient of Stage 2 fixed and mobile support to
create, maintain, and submit to the Bureau for its review a detailed
written plan (a ``Disaster Preparation and Response Plan'') that
describes and commits to the methods and procedures that it will use,
during the period in which it receives Stage 2 support, to prepare for
and respond to disasters in Puerto Rico and/or the U.S. Virgin Islands.
The Commission specifically requires applicants to describe in the
Disaster Preparation and Response Plan in detail how they will meet
five criteria: (1) Strengthening Infrastructure; (2) Ensuring Network
Diversity; (3) Ensuring Backup Power; (4) Network Monitoring; and (5)
Emergency Preparedness. The Commission explains these criteria in
detail in the Order. The Commission requires applicants to document in
detail in the Disaster Preparation and Response Plan their methods and
processes for achieving each of these goals, identify personnel
responsible for compliance, and conform their actions to their written
documentation.
129. A Stage 2 fixed support applicant must submit its Disaster
Preparation and Response Plan to the Bureau for review and approval
along with the provider's application, and a mobile provider electing
Stage 2 support must submit its Disaster Preparation and Response Plan
for review and approval along with its election of support. The
Commission directs the Bureau to approve the documentation if it is
complete and thoroughly addresses how the carrier will meet each of the
criteria it identifies. If the Bureau identifies deficiencies in the
Disaster Preparation and Response Plan, the Commission directs the
Bureau to provide detailed written notification of the deficiencies to
the carrier and withhold authorization to receive support until the
support recipient has cured the deficiencies. The Commission emphasizes
that support recipients may choose to develop their Disaster
Preparation and Response Plans in a number of ways to meet the flexible
criteria established here. Recipients shall materially comply with the
representations in the Disaster Preparation and Response Plan, once
approved.
130. All Stage 2 support recipients must update their Disaster
Preparation and Response Plan when they make material changes to
internal processes or responsible staff and share the updated Disaster
Preparation and Response Plan with the Bureau within 10 business days.
The Commission also will require support recipients to certify annually
to USAC that they have recently reviewed the Disaster Preparation and
Response Plan and considered whether any changes or revisions were
necessary. The Commission directs the Bureau to provide additional
guidance to applicants regarding the timing, submission, and format of
the required Disaster Preparation and Response Plan.
131. The Commission finds it is appropriate to require and evaluate
Disaster Preparation and Response Plans for Stage 2 support applicants
because, as the Commission has noted, infrastructure in the Territories
is particularly vulnerable to catastrophic failure (e.g., due to
isolation and topography). The Commission allows carriers flexibility
to describe how they address the criteria it specify, rather than adopt
specific mandates, because the Commission recognizes that disaster
preparation and recovery challenges are often unique to each carrier.
Should a disaster similar to Maria and Irma occur, improvements to
disaster preparation and recovery practices could mitigate at least a
portion of the billions of dollars of damage to communications networks
that the Territories experienced as a result of that disaster. The
Commission acknowledges that there are costs associated with hardening
efforts and with obtaining the Bureau's approval. However, even if
those costs are substantial, the benefits of the requirements the
Commission adopts in terms of potential saved lives and avoided
economic devastation are even greater in light of the heightened risks
faced by the Territories and the potential for devastation. The
Commission also believes that the specific measures it will evaluate
are warranted. For instance, the Commission previously found that after
the 2017 hurricane season, ``unlike other affected areas, Puerto Rico
and the U.S. Virgin Islands have struggled to restore electrical
power'' and that there was a ``continued lack of commercial power and
long-term reliance on backup generators''--showing the importance of
ensuring backup power. Similarly, monitoring network performance and
preparing for emergencies with the intent of maintaining continuity of
operations are both common-sense steps to help ensure that networks
will be more likely to withstand harm or be restored quickly after
disasters. Finally, the flexibility the Commission allows will mitigate
the costs of this requirement compared to a more rigid and prescriptive
approach.
132. Mandatory Participation in the DIRS. The Commission also
conditions Stage 2 funding on recipients' agreement to perform
mandatory DIRS reporting. DIRS is an efficient, web-based system that
communications companies, including wireless, wireline, broadcast, and
cable providers, can use to report communications infrastructure status
and situational awareness information during times of crisis. While
DIRS reporting has been
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voluntary, in practice there is strong industry participation. The
Commission determines whether to activate DIRS in conjunction with FEMA
and announce the areas that will be covered to participating providers
via public notice and email. DIRS is and will be a valuable resource
for providing situational awareness of outages to industry and Federal,
state, and local agencies.
133. Following normal Commission protocol, the Commission will
continue to activate DIRS and notify providers of its reporting
schedule, typically in advance of an expected impending disaster event.
Also pursuant to normal Commission protocol, DIRS reporting obligations
will typically begin prior to onset of a disaster event, with reports
due each time a provider's restoration status changes. The only
difference from ordinary Commission protocol is that DIRS reporting
will be mandatory for Stage 2 support recipients for the duration of
the support. Note, however, that the Commission will not impose a
penalty or sanctions if reporting deadline(s) cannot be met for reasons
reasonably beyond a participant's control. In that case, the Commission
requires instead that providers begin and/or resume DIRS reporting
according to the reporting schedule as soon as they are reasonably able
to do so. This approach ensures that participants can dedicate their
resources to addressing network outages and basic communications needs
when it would be unreasonable for them to divert these resources to
DIRS reporting. Stage 2 funding recipients that fail to meet this
mandatory DIRS reporting obligation may be subject to penalties and
sanctions through the withholding of Stage 2 funds and/or
disqualification from participating in future Stage 3 mobile support.
134. Mandatory DIRS reporting for Stage 2 funding recipients will
increase carriers' accountability by allowing the Commission to track
their recovery efforts, which it expects will lead to improved
hardening efforts. Moreover, DIRS reporting during prior natural
disasters has assisted not only this agency, but also the Commission's
Federal, state, and local partners, including during Hurricanes Irma
and Maria, aiding in recovery efforts. While the Commission has not
made DIRS reporting mandatory elsewhere, it believes mandatory
reporting for Stage 2 funding recipients is justified by the
Territories' heightened risk of natural disaster, insularity, and
specific challenges with disaster preparation and recovery. It also is
warranted because ``during Hurricane Maria, the major incumbent local
exchange carrier and cable providers in Puerto Rico and the USVI did
not provide detailed information in DIRS,'' hindering effectiveness.
The Commission does not require daily reporting via DIRS, and instead
it requires only updates on changes in restoration status when they
occur. This approach alleviates concerns some commenters raised related
to administrative burden. Moreover, imposing no penalty or sanction for
a provider's reasonable failure to report, as outlined in this
document, addresses concerns about the infeasibility of reporting. The
Commission finds that the public benefit of mandatory DIRS reporting
for Stage 2 funding recipients overwhelmingly outweighs any concerns
carriers have about the potential burdens of reporting during post-
disaster recovery efforts.
135. Cooperation Regarding Centralized Coordination. In addition to
complying with any local legal mandates regarding information sharing,
the Commission also expects Stage 2 funding recipients to make every
effort to cooperate with local authorities (e.g., PRTRB and the U.S.
Virgin Islands' PSC) in sharing information about proposed and actual
construction projects, both during Stage 2-funded deployment and during
any future post-disaster recovery efforts. Cooperation will allow other
entities an opportunity to request joint access and cooperate on joint
construction thus facilitating efficient use of the Commission's Stage
2 support and expediting restoration.
136. Wireless Resiliency Cooperative Framework. Although the
Wireless Resiliency Cooperative Framework is not mandatory, the
Commission strongly encourages Stage 2 support recipients to continue
to comply voluntarily. The Commission expects that compliance with the
Framework would carry many benefits and commenters were in consensus
that the flexibility of the Framework allowed wireless carriers to
quickly and effectively tailor response efforts to individual
communities without undue administrative delays. As the Commission
considers longer-term Stage 3 support for mobile providers, it expects
the Commission will evaluate again whether to require support
recipients to commit to compliance with the Framework.
137. Reasonably Comparable Rates. Stage 2 recipients must meet the
same reasonably comparable rates standard for recipients as the
Commission requires of all high-cost recipients, consistent with its
proposal in the PR-USVI Fund NPRM. The Commission considers rates
reasonably comparable if they are ``at or below the applicable
benchmark to be announced annually by public notice issued by the
Wireline Competition Bureau.'' Although PRTC and Viya argue that
additional funds are needed to cover their costs to rebuild, neither
carrier provided evidence that rates in Puerto Rico and the U.S. Virgin
Islands are substantially higher than in the contiguous United States.
TCT states that there is little if any evidence of higher rates in the
Territories. The evidence the Commission has from the Urban Rate Survey
suggests that urban voice rates in Puerto Rico may be lower than the
mainland urban average and that the urban broadband rates in Puerto
Rico may be higher than on the mainland, but still within the
comparability benchmarks. Accordingly, the Commission finds no reason
to deviate from the typical rates standard.
138. No Double Recovery. The Commission adopts the same protections
against double recovery as it did with Stage 1 support. The Commission
agrees with Free Press that support recipients should not be entitled
to support for the same losses reimbursed by insurance funds.
Therefore, to protect against duplicative recovery and guard against
waste, fraud, and abuse, Stage 2 support recipients may not use their
support for costs that are (or will be) reimbursed by other sources,
including Federal or local government aid or insurance reimbursements.
Further, carriers are prohibited from using Stage 2 support for other
purposes, such as the retirement of company debt unrelated to eligible
expenditures, or other expenses not directly related to fulfilling the
obligations for support recipients set forth in the Order.
139. Other Disaster Preparation and Response Requirements. At this
time, the Commission declines to adopt additional specific obligations
as a condition of receiving Stage 2 support, such as requiring
compliance with TIA-222-H standards or any other industry standards or
best practices promulgated by the FCC's Communications Security,
Reliability and Interoperability Council. The Commission does not want
to be unduly prescriptive in how carriers manage their networks or
operations. The Commission also declines to adopt proposals outside the
scope of the Commission's authority and expertise, such as a
Commission-created local building or manufacturing industry in Puerto
Rico or a comprehensive island-wide disaster recovery and contingency
plan to be supervised by the Commission. While the Commission
[[Page 59961]]
appreciates the role of first-responders and emergency services,
hospitals, and local organizations, particularly in the aftermath of a
natural disaster, it declines to require specified entities to receive
priority access to communications networks in the context of this
proceeding. The Commission can more uniformly and effectively address
any such issues in proceedings regarding priority communications
nationwide.
III. Order on Reconsideration
140. The Commission also takes this opportunity to dispose of two
petitions related to Uniendo a Puerto Rico Fund and Connect USVI Fund
advance support and Stage 1 support.
141. The Commission denies WorldNet's request to obtain support
equal to the amount of advance support it declined. The Commission
recognizes that WorldNet acted with incomplete information, because it
declined the advance support at a time when the Commission had stated
that the advance support would be offset by future support, but the
Commission later decided to treat the advance support as a one-time
payment that would not be offset. The Commission must be responsible
stewards of the Fund, however, and will not award funding meant for
immediate post-hurricane relief after the immediate period has ended.
142. Discussion. The Commission denies WorldNet's petition. First,
to the extent WorldNet seeks clarification of the 2018 PR-USVI Fund
Order, 83 FR 27515, June 13, 2018, the Commission notes that the Order
stated that WorldNet would continue to receive its monthly frozen
support and did not make any other specific mention of WorldNet, so it
is clear the Commission did not confer any additional benefit on
WorldNet.
143. As to WorldNet's reconsideration request, the Commission's
statutory obligation is to act as responsible stewards of the Fund.
Therefore, the Commission must provide support only for specific and
statutorily permissible purposes. In the 2017 Hurricane Funding Order,
the Commission provided advance support for the express purpose of
injecting additional resources into immediate restoration after the
hurricanes. The Commission measured this period of immediate need as
seven months, ending with the April 2018 payments. Payment to WorldNet
following the conclusion of that immediate need period would not serve
the time-sensitive purpose of the support. It was WorldNet's own
determination not to accept the accelerated financial assistance for
large repairs and immediate restoration of its essential
communications. WorldNet does not dispute that its petition was filed
in June 2018, following the immediate need period and only after the
Commission had decided not to offset the support. Further, in that
petition, WorldNet made no showing that it was still in the process of
restoring its network other than to aver that the lack of support is an
``undue disadvantage'' to WorldNet and its customers. WorldNet now
provides information that it claims supports its entitlement to the
advanced funding, specifically that it has not recovered all of its
costs to restore and repair its network and that it anticipates
significant additional costs to further harden its network against
future disasters. While the Commission understands the financial
hardship that continued restoration and hardening presents for
WorldNet, those challenges are shared by other carriers in the
Territories, and the fact that work still remains does not justify the
provision of time-restricted support after that period has passed.
Moreover, WorldNet received over $1.3 million in Stage 1 support for
restoration of its network in August 2018. Therefore, the Commission
finds that WorldNet was aware of its options for obtaining high-cost
support after the hurricanes and, while it may not have covered all
costs, received significant support for restoring its facilities and
service.
144. Last, despite its argument, WorldNet is not being
distinguished or disqualified from receiving any benefit offered to the
providers in Puerto Rico by the 2017 Hurricane Funding Order. WorldNet
had the same opportunity as every other eligible carrier to elect
support; it simply elected not to receive the advance funds within the
timeframe identified in the 2017 Hurricane Funding Order. The
Commission determined that the pace of restoring critical
communications networks would have only been further delayed by
offsetting advance support. The Commission's decision to change course
and decline to offset the support against future disbursements is
entirely within its authority, and such decisions do not result in any
obligation by the Commission to retroactively cure the consequences of
its decision. When WorldNet declined to take advance funds, that
support was repurposed by the Fund, and is no longer available for
disbursement. Although the Commission understands WorldNet lost out on
an opportunity for additional restoration support, it fails to
articulate compelling grounds for reconsideration, and its
responsibility to use the Fund efficiently outweighs the fairness-based
justification that WorldNet sets forth.
145. The Commission denies the petition for reconsideration of Tri-
County Telephone Association, Inc. (TCT) requesting the Commission
revisit several of its decisions in the 2018 PR-USVI Fund Order. The
Commission finds the petition fails on the merits, and the Commission
affirms its decision to issue Stage 1 support immediately.
146. Discussion. The Commission finds it was not required to
undertake notice and comment for Stage 1 support and provided
acceptable justification for doing so. Specifically, the 2018 PR-USVI
Fund Order stated that using notice and comment procedures for the
interim and one-time relief would delay its effectiveness, would be
impracticable and contrary to the public interest. It further reasoned
that due to the emergency situation and the devastation to
communications networks caused by the hurricanes, the sooner providers
received additional funds, the sooner service could be restored to the
people of Puerto Rico and the U.S. Virgin Islands. Accordingly, it
invoked the good cause exception of the Administrative Procedure Act
(APA), which ``excuses notice and comment in emergency situations, or
where delay could result in serious harm.'' TCT uses the Sorenson case
to support its argument that the Commission was required to undergo
notice and comment; however, that case is clearly distinguishable. In
that case, the court rejected ``the threat of impending fiscal peril''
to a Commission program as an emergency within the meaning of the APA.
Here, the Commission was responding to two back-to-back natural
disasters that already occurred and created widespread damage that
posed an acute and ongoing threat to public safety and the economy,
compounded by the fact that the 2018 hurricane season was impending.
Therefore, unlike in Sorenson, evidence of an emergency sufficient to
forego notice and comment is clear rather than merely speculative.
Indeed, many commenters later noted the benefits of receiving Stage 1
support quickly to their recovery efforts.
147. The Commission also finds it adequately sized support for
Stage 1. TCT argues the amount is ``pulled out of thin air'' and that
the Commission made no attempt to explain how the figures were
determined. But that is not true. As TCT itself concedes, the amount of
high-cost support provided in Stage 1 was about equal to the amount
provided in advance funds to the
[[Page 59962]]
carriers in the Territories. The Commission based the amount of
advanced funds previously provided on what the carriers already
received under the high-cost program, although the Commission was
careful to explain how the allocation in Stage 1 differed from that of
frozen support. The Commission provided advance funds for a period of
about seven months. Likewise, the Commission provided that Stage 1
support was for short-term expenditures through June 30, 2019, about
seven to ten months from the time of disbursement. The Commission
stated that it provided Stage 1 funds based on the determination that
restoration was still incomplete. The Commission finds it was clear in
how it determined the size and allocation of Stage 1 support. The
Commission also finds it was reasonable for it to establish another
stage of support, roughly equal to the previous disbursement in both
amount and timeframe, to support similar restoration activities. The
Commission notes that TCT has not provided any evidence or data to
support its argument that the amount of Stage 1 funding was
inappropriate.
148. TCT also argues that the Commission's reasoning behind the
allocation of Stage 1 support between Puerto Rico and USVI is
unexplained. The Commission's allocation between territories was based
on ``differences in landmass, geography, topography, and population,''
as TCT concedes. The Commission also stated that the difference was
based on ``the significant financial and operational challenges faced
by carriers in both areas, and the past and current availability of
high-cost support to carriers.'' The Commission finds this
justification to be sufficient and again note that TCT fails to offer
an alternative or any data to show why the Commission's approach was
improper. Further, even if the Commission were to accept TCT's
contribution-based standing argument, it is unclear how the specific
allocation of funds between Puerto Rico and the U.S. Virgin Islands (as
opposed to the overall amount of funds) could have caused it any
injury.
149. Additionally, TCT argues the Commission should have outlined
the acceptable uses for Stage 1 and that the Commission did not provide
USAC enough direction on how to audit recipients. The Commission
disagrees. Even TCT acknowledges that the Commission specified limited
purposes for Stage 1 support. The Commission went further, however,
stating that the support was to be used ``to help restore and improve
coverage and service quality to pre-hurricane levels and to help
safeguard their equipment against future natural disasters.'' The
Commission specifically identified appropriate uses for support,
including ``repairing, removing, reinforcing or relocating network
elements damaged during the hurricanes; repairing or restoring customer
premise equipment; replacing, rebuilding, and reinforcing the physical
outside plant (poles, fiber, nodes, coaxial cables, and the like);
hardening networks against future disasters; and increasing network
resilience to power outages or other potential service interruptions
due to natural disasters.'' The Commission also articulated purposes
for which the support may not be used. Moreover, all recipients of
Stage 1 were required to be or become ETCs to receive support, and all
ETCs have specific high-cost record-keeping and reporting obligations,
which can be used for auditing. The Commission directed USAC
specifically to audit Stage 1 recipients based on all of this
direction. USAC has a great deal of experience and effective procedures
in place for auditing recipients of the Fund for compliance with the
Act and the Commission's rules, so contrary to TCT's argument, the
Commission finds that USAC has more than sufficient information to
complete the directed audits.
150. The Commission also finds that it did not unlawfully expand
the scope of the high-cost fund in contravention of congressional
intent by establishing Stage 1 support. Congress recognized that
universal service is ever evolving and requires the Commission to
consider a variety of factors in determining what services are
supported by the Fund, including public health and safety. The
Commission found that Stage 1 support was necessary as an immediate,
one-time distribution of funds to existing carriers to continue the
repair and restoration required to allow existing consumers to use the
essential communications networks of the Territories in the aftermath
of enormous destruction from multiple natural disasters. In the 2017
Hurricane Funding Order, the Commission determined that, based on the
circumstances and lack of access to services comparable to urban areas
on the mainland, the entirety of Puerto Rico and USVI were
presumptively high-cost. Further, the Commission had already provided
many recipients of Stage 1 support significant amounts of USF support
for years to deploy and maintain those networks, and if a provider was
not already an ETC, it was required to become one in order to receive
Stage 1 support. To become an ETC, a provider must satisfy several
Commission requirements. Just as the Commission previously found it may
condition receipt of high-cost support on offering minimum levels of
broadband service, it affirms that it can provide support for
maintenance of ETC networks in the Territories, thereby facilitating
the ability of the ETCs receiving support to provide access to advanced
telecommunications and information services for all consumers.
IV. Procedural Matters
A. Paperwork Reduction Act
151. This document contains new information collection requirements
subject to the PRA. It will be submitted to the Office of Management
and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the
general public, and other Federal agencies will be invited to comment
on the new information collection requirements contained in this
proceeding. In addition, the Commission notes that pursuant to the
Small Business Paperwork Relief Act of 2002, the Commission previously
sought specific comment on how it might further reduce the information
collection burden for small business concerns with fewer than 25
employees. In the Report and Order, the Commission adopts new rules
relating to the Uniendo a Puerto Rico Fund and the Connect USVI Fund.
The Commission has assessed the effects of the new rules on small
business concerns. The Commission finds that the rules and procedures
adopted here will minimize the information collection burden on
affected entities, including small businesses.
B. Congressional Review Act
152. The Commission has determined, and the Administrator of the
Office of Information and Regulatory Affairs, OMB, 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 and Order on
Reconsideration to Congress and the Government Accountability Office
pursuant to 5 U.S.C. 801(a)(1)(A).
153. 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,''
[[Page 59963]]
``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.
154. The Order adopts annual support to rebuild, improve, and
expand fixed and mobile services in Puerto Rico and the U.S. Virgin
Islands. The Order makes support available to any eligible fixed or
mobile provider that obtains an ETC designation, using a competitive
and subscriber-based process, respectively. Fifteen fixed and mobile
carriers in Puerto Rico and the U.S. Virgin Islands currently receive
high-cost support.
155. Although impossible to predict, even assuming other carriers
will obtain an ETC designation to receive the additional support
provided in the Order, the Commission does not anticipate the proposed
rule to affect more than 25 providers out of the 737 providers
currently receiving high-cost support. Accordingly, the Commission
anticipates that the Order will not affect a substantial number of
carriers, and so the Commission does not anticipate that it will affect
a substantial number of small entities.
156. Therefore, the Commission certifies that the requirements of
the Order will not have a significant economic impact on a substantial
number of small entities.
V. Ordering Clauses
157. Accordingly, it is ordered, pursuant to the authority
contained in sections 1, 2, 4(i), 214, 254, 303(r), 403, and 405 of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i),
214, 254, 303(r), 403, and 405, Sec. Sec. 1.1, 1.3, 1.425 and 1.429 of
the Commission's rules, 47 CFR 1.1, 1.3, 1.425 and 1.429, that the
Report and Order on Reconsideration is adopted. The Report and Order
and Order on Reconsideration shall be effective 30 days after
publication in the Federal Register, except for portions containing
information collection requirements in Sec. Sec. 54.313, 54.316,
54.1503, 54.1505, 54.1508, and 54.1513 through 54.1515 that have not
been approved by OMB. The Federal Communications Commission will
publish a document in the Federal Register announcing the effective
date of these provisions.
158. It is further ordered that part 54 of the Commission's rules
is amended as set forth in the Order, and that any such rule amendments
that contain new or modified information collection requirements that
require approval by the OMB under the Paperwork Reduction Act shall be
effective after announcement in the Federal Register of OMB approval of
the rules, and on the effective date announced therein.
159. It is further ordered that, pursuant to the authority
contained in sections 1, 2, 4(i), 254, and 303(r) of the Communications
Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 254, 303(r),
Sec. Sec. 1.1 and 1.425 of the Commission's rules, 47 CFR 1.1, 1.425,
that the Petition for Reconsideration filed by Tri-County Telephone
Association, Inc. on July 13, 2018 is denied.
160. It is further ordered that, pursuant to the authority
contained in in sections 1, 2, 4(i), 254, and 303(r) of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i),
254, 303(r), Sec. Sec. 1.1 and 1.425 of the Commission's rules, 47 CFR
1.1, 1.425, that the Petition for Clarification Or, In The Alternative,
Reconsideration filed by WorldNet Telecommunications, Inc. on June 28,
2018 is denied.
161. It is further ordered that, pursuant to the authority
contained in 1, 2, 4(i), 254, and 303(r) of the Communications Act of
1934, as amended, 47 U.S.C. 151, 152, 154(i), 254, 303(r), Sec. Sec.
1.1, 1.3, and 1.425 of the Commission's rules, 47 CFR 1.1, 1.3, 1.425,
that the Petition of Puerto Rico Telephone Company, Inc. for the
Creation of an Emergency Universal Service Fund filed on Jan. 19, 2018,
the Emergency Petition of Virgin Islands Telephone Corp. dba Viya for
Wireline Hurricane Restoration Support filed on Dec. 6, 2017, the
Vitelcom Cellular, Inc. Emergency Petition filed on Oct. 5, 2017, and
the PRWireless, Inc. dba Open Mobile Emergency Petition for Waiver and
Other Relief filed on Oct. 4, 2017 are dismissed.
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.
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 (e) introductory text and
(e)(2) introductory text and adding paragraphs (n) and (o) to read as
follows:
Sec. 54.313 Annual reporting requirements for high-cost recipients.
* * * * *
(e) In addition to the information and certifications in paragraph
(a) of this section, the requirements in paragraphs (e)(1) and (2) of
this section apply to recipients of Phase II, Remote Areas Fund,
Uniendo a Puerto Rico Fund Stage 2 fixed support, and Connect USVI Fund
Stage 2 fixed support:
* * * * *
(2) Any recipient of Phase II, Remote Areas Fund, Uniendo a Puerto
Rico Fund Stage 2 fixed, or Connect USVI Fund Stage 2 fixed support
awarded through a competitive bidding or application process shall
provide:
* * * * *
(n) Recipients of Uniendo a Puerto Rico Fund Stage 2 fixed and
mobile support and Connect USVI Fund Stage 2 fixed and mobile support
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 fixed and mobile support from Stage 2
of the Uniendo a Puerto Rico Fund and the Connect USVI Fund shall
certify that they have conducted an annual review of the documentation
required by Sec. 54.1515(a) through (c) to determine the need for and
to implement changes or revisions to disaster preparation and recovery
documentation.
(o) Recipients of Uniendo a Puerto Rico Fund or Connect USVI Fund
Stage 2 mobile support shall certify that they are in compliance with
all requirements in this part for receipt of such support to continue
receiving Stage 2 mobile disbursements.
[[Page 59964]]
0
3. Amend Sec. 54.316 by adding paragraphs (a)(7) and (b)(7) to read as
follows:
Sec. 54.316 Broadband deployment reporting and certification
requirements for high-cost recipients.
(a) * * *
(7) Recipients subject to the requirements of Sec. 54.1506 shall
report the number of locations for Puerto Rico and the U.S. Virgin
Islands and locational information, including geocodes, where they are
offering service at the requisite speeds. Recipients shall also report
the technologies they use to serve those locations.
(b) * * *
(7) Recipients of Uniendo a Puerto Rico Fund Stage 2 fixed and
Connect USVI Fund fixed Stage 2 fixed support shall provide: On an
annual basis by the last business day of the second calendar month
following each service milestone in Sec. 54.1506, a certification that
by the end of the prior support year, it was offering broadband meeting
the requisite public interest obligations specified in Sec. 54.1507 to
the required percentage of its supported locations in Puerto Rico and
the U.S. Virgin Islands as set forth in Sec. 54.5406. The annual
certification shall quantify the carrier's progress toward or, as
applicable, completion of deployment in accordance with the resilience
and redundancy commitments in its application and in accordance with
the detailed network plan it submitted to the Wireline Competition
Bureau.
0
4. Add subpart O to read as follows:
Subpart O--Uniendo a Puerto Rico Fund and Connect USVI Fund
Sec.
54.1501 Uniendo a Puerto Rico Fund and Connect USVI Fund--Stage 2
for service to fixed locations.
54.1502 Geographic areas eligible for Stage 2 fixed support.
54.1503 Geographic area and locations to be served by Stage 2 fixed
support recipients.
54.1504 Term of Stage 2 fixed support and phase-down of legacy fixed
support.
54.1505 Stage 2 fixed support application process.
54.1506 Stage 2 fixed support deployment milestones.
54.1507 Stage 2 public interest obligations for service to fixed
locations.
54.1508 Letter of credit for Stage 2 fixed support recipients.
54.1509 Uniendo a Puerto Rico Fund and the Connect USVI Fund--Stage
2 for mobile service.
54.1510 Stage 2 mobile carrier eligibility.
54.1511 Appropriate uses of Stage 2 mobile support.
54.1512 Geographic area eligible for Stage 2 mobile support.
54.1513 Provision of Stage 2 mobile support.
54.1514 Stage 2 mobile additional annual reporting.
54.1515 Disaster preparation and response measures.
Sec. 54.1501 Uniendo a Puerto Rico Fund and Connect USVI Fund--Stage
2 for service to fixed locations.
The Commission will use a competitive application process to
determine the recipients of high-cost universal service support for
offering voice and broadband service to fixed locations, and the amount
of support that they may receive from Stage 2 of the fixed Uniendo a
Puerto Rico Fund and of the fixed Connect USVI Fund for specific
geographic areas in Puerto Rico and the U.S. Virgin Islands,
respectively, subject to applicable procedures following the selection
of competitive applications.
Sec. 54.1502 Geographic areas eligible for Stage 2 fixed support.
High-cost universal service support may be made available for Stage
2 of the fixed Uniendo a Puerto Rico Fund and the fixed Connect USVI
Fund for all areas of Puerto Rico and the U.S. Virgin Islands,
respectively, as announced by public notice.
Sec. 54.1503 Geographic area and locations to be served by Stage 2
fixed support recipients.
(a) For Stage 2 of the fixed Uniendo a Puerto Rico Fund, proposals
will be accepted for each municipio in Puerto Rico.
(b) For Stage 2 of the fixed Connect USVI Fund, proposals will be
accepted for one geographic area composed of St. John and St. Thomas
islands together, and a second geographic area of St. Croix island.
(c) For both Funds, all locations must be served within each
defined geographic area by the deployment milestone as defined in Sec.
54.1506. The number of supported locations will be identified for each
geographic area in the territories by public notice.
Sec. 54.1504 Term of Stage 2 fixed support and phase-down of legacy
fixed support.
(a) Term of support. Support awarded through Stage 2 of the fixed
Uniendo a Puerto Rico Fund and of the fixed Connect USVI Fund shall be
provided for ten years.
(b) Phase-down of legacy support. Stage 2 of the fixed Uniendo a
Puerto Rico 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;
\1/3\ frozen fixed support amortized over the second 12-month period;
and zero frozen support thereafter.
Sec. 54.1505 Stage 2 fixed support application process.
(a) Provider eligibility. A provider shall be eligible to submit an
application for support from Stage 2 of the fixed Uniendo a Puerto Rico
Fund or of the fixed Connect USVI Fund if it had its own fixed network
and provided broadband service in Puerto Rico or the U.S. Virgin
Islands, respectively, according to its June 2018 FCC Form 477 data. A
provider must obtain eligible telecommunications carrier designation no
later than sixty (60) days after public notice of selection to receive
fixed support. Any entity that is awarded support but fails to obtain
ETC designation within sixty (60) days shall be considered in default
and will not be eligible to receive high-cost funding.
(b) Application processing. No application will be considered
unless it has been submitted in an acceptable form during the period
specified by public notice. No applications submitted or demonstrations
made at any other time shall be accepted or considered.
(c) Application format. All applications must be substantially in
the format as specified and announced by the Wireline Competition
Bureau.
(1) Any application that, as of the submission deadline, either
does not identify the applicant seeking support as specified in the
public notice announcing application procedures or does not include
required certifications shall be denied.
(2) An applicant may be afforded an opportunity to make minor
modifications to amend its application or correct defects noted by the
applicant, the Commission, the Administrator, or other parties. Minor
modifications include correcting typographical errors in the
application and supplying non-material information that was
inadvertently omitted or was not available at the time the application
was submitted.
(3) Applications to which major modifications are made after the
deadline for submitting proposals shall be denied. Major modifications
may include, but are not limited to, any changes in the ownership of
the applicant that constitute an assignment or change of control, or
the identity of
[[Page 59965]]
the applicant, or the certifications required in the application.
(d) Application contents. In addition to providing information
required by the Wireline Competition Bureau, any applicant for support
from Stage 2 of the fixed Uniendo a Puerto Rico Fund or of the fixed
Connect USVI Fund shall:
(1) Include ownership information as set forth in Sec. 1.2112(a)
of this chapter;
(2) Submit a detailed network plan and documents evidencing
adequate financing for the project;
(3) Disclose its status as an eligible telecommunications carrier
to the extent applicable and certify that it acknowledges that it must
be designated as an eligible telecommunications carrier for the area in
which it will receive support prior to being authorized to receive
support;
(4) Describe the technology or technologies that will be used to
provide service for each application; and
(5) To the extent that an applicant plans to use spectrum to offer
its voice and broadband services, demonstrate it has the proper
authorizations, if applicable, and access to operate on the spectrum it
intends to use, and that the spectrum resources will be sufficient to
cover peak network usage and deliver the minimum performance
requirements to serve all of the fixed locations in eligible areas, and
certify that it will retain its access to the spectrum for the term of
support; and
(6) Provide a letter from a bank meeting the eligibility
requirements outlined in Sec. 54.1508 committing to issue an
irrevocable stand-by letter of credit, in the required form, to the
winning applicant. The letter shall at a minimum provide the dollar
amount of the letter of credit and the issuing bank's agreement to
follow the terms and conditions of the Commission's model letter of
credit.
(e) Identification of winning applicant. After receipt and review
of the proposals, a public notice shall identify each winning applicant
that may be authorized to receive support from Stage 2 of the fixed
Uniendo a Puerto Rico Fund and the fixed Connect USVI Fund support
after the winning applicant submits a letter of credit and an
accompanying opinion letter, as described in this section, in a form
acceptable to the Commission. Each such winning applicant shall submit
a letter of credit and accompanying opinion letter in a form acceptable
to the Commission no later than the number of days provided by public
notice.
(f) Authorization to receive support. After receipt of all
necessary information, a public notice will identify each winning
applicant that is authorized to receive Uniendo a Puerto Rico Fund and
the Connect USVI Fund Stage 2 fixed support.
Sec. 54.1506 Stage 2 fixed support deployment milestones.
Recipients of support from Stage 2 of the fixed Uniendo a Puerto
Rico Fund and the fixed Connect USVI Fund must complete deployment to
at least 40 percent of supported locations at the end of the third year
of support, at least 60 percent at the end of the fourth year, at least
80 percent at the end of the fifth year, and 100 percent by the end of
the sixth year. Compliance with the percentage of completion shall be
determined based on the total number of supported locations in each
geographic area. Recipients will be subject to the notification and
default rules in Sec. 54.320(d).
Sec. 54.1507 Stage 2 public interest obligations for service to fixed
locations.
(a) Recipients of Stage 2 Uniendo a Puerto Rico and the Connect
USVI Fund fixed support are required to offer broadband service with
latency suitable for real-time applications, including Voice over
internet Protocol, and usage capacity that is reasonably comparable to
comparable offerings in urban areas, at rates that are reasonably
comparable to rates for comparable offerings in urban areas.
(1) For purposes of determining reasonable comparable usage
capacity, recipients are presumed to meet this requirement if they meet
or exceed the usage level announced by public notice issued by the
Wireline Competition Bureau.
(2) For purposes of determining reasonable comparability of rates,
recipients are presumed to meet this requirement if they offer rates at
or below the applicable benchmark to be announced annually by public
notice issued by the Wireline Competition Bureau, or at or below the
non-promotional prices charged for a comparable fixed wireline service
in urban areas in the state or U.S. Territory where the eligible
telecommunications carrier receives support.
(b) Support recipients are required to offer broadband service
meeting the performance standards as proposed in their selected
applications, as follows:
(1) Actual speeds of at least 25 Mbps downstream and 3 Mbps
upstream, and a minimum usage allowance of 200 GB per month or an
amount that reflects the average usage of a majority of fixed broadband
customers, using Measuring Broadband America data or a similar data
source, whichever is higher, and announced annually by public notice
issued by the Wireline Competition Bureau over the 10-year term.
(2) Actual speeds of at least 100 Mbps downstream and 20 Mbps
upstream and at least 2 terabytes of monthly usage.
(3) Actual speeds of at least 1 Gigabit per second downstream and
500 Mbps upstream and at least 2 terabytes of monthly usage.
(c) For each of the tiers in paragraphs (b)(1) through (3) of this
section, support recipients are required to meet one of two latency
performance levels:
(1) Low latency recipients will be required to meet 95 percent or
more of all peak period measurements of network round trip latency at
or below 100 milliseconds; and
(2) High latency recipients will be required to meet 95 percent or
more of all peak period measurements of network round trip latency at
or below 750 ms and, with respect to voice performance, and to
demonstrate a score of four or higher using the Mean Opinion Score
(MOS).
Sec. 54.1508 Letter of credit for stage 2 fixed support recipients.
(a) Letter of credit. Before being authorized to receive support
from Stage 2 of the fixed Uniendo a Puerto Rico Fund or the fixed
Connect USVI Fund, a winning applicant shall obtain an irrevocable
standby letter of credit which shall be acceptable in all respects to
the Commission. No later than the number of days provided by public
notice, the applicant shall submit a letter from a bank meeting the
eligibility requirements outlined in this section committing to issue
an irrevocable stand-by letter of credit, in the required form, to the
winning applicant. The letter shall at a minimum provide the dollar
amount of the letter of credit and the issuing bank's agreement to
follow the terms and conditions of the Commission's model letter of
credit. The letter of credit must remain open until the recipient has
certified it has deployed broadband and voice service meeting the
requirements in this subpart to 100% of the required number of
locations, and Universal Service Administrative Company (USAC) has
verified that the entity has fully deployed.
(b) Value. Each recipient authorized to receive the Uniendo a
Puerto Rico Fund and the Connect USVI Fund Stage 2 fixed support shall
maintain the standby letter of credit or multiple standby letters of
credit in an amount equal to at a minimum the amount of fixed support
that has been disbursed and that will be disbursed in the coming
[[Page 59966]]
year, until the USAC has verified that the recipient met the final
service milestone.
(1) Once the recipient has met its 60 percent service milestone, it
may obtain a new letter of credit or renew its existing letter of
credit so that it is valued at a minimum at 90 percent of the total
support amount already disbursed plus the amount that will be disbursed
in the coming year.
(2) Once the recipient has met its 80 percent service milestone, it
may obtain a new letter of credit or renew its existing letter of
credit so that it is valued at a minimum at 80 percent of the total
support that has been disbursed plus the amount that will be disbursed
in the coming year.
(c) Acceptable bank issuing letter of credit. The bank issuing the
letter of credit shall be acceptable to the Commission. A bank that is
acceptable to the Commission is:
(1) Any United States bank:
(i) That is insured by the Federal Deposit Insurance Corporation;
and
(ii) That has a bank safety rating issued by Weiss of B- or better;
or
(2) CoBank, so long as it maintains assets that place it among the
100 largest United States Banks, determined on basis of total assets as
of the calendar year immediately preceding the issuance of the letter
of credit and it has a long-term unsecured credit rating issued by
Standard & Poor's of BBB- or better (or an equivalent rating from
another nationally recognized credit rating agency); or
(3) The National Rural Utilities Cooperative Finance Corporation,
so long as it maintains assets that place it among the 100 largest
United States Banks, determined on basis of total assets as of the
calendar year immediately preceding the issuance of the letter of
credit and it has a long-term unsecured credit rating issued by
Standard & Poor's of BBB- or better (or an equivalent rating from
another nationally recognized credit rating agency); or
(4) Any non-United States bank:
(i) That is among the 100 largest non-U.S. banks in the world,
determined on the basis of total assets as of the end of the calendar
year immediately preceding the issuance of the letter of credit
(determined on a U.S. dollar equivalent basis as of such date);
(ii) Has a branch office in the District of Columbia or such other
branch office agreed to by the Commission;
(iii) Has a long-term unsecured credit rating issued by a widely-
recognized credit rating agency that is equivalent to a BBB- or better
rating by Standard & Poor's; and
(iv) Issues the letter of credit payable in United States dollars
(d) Bankruptcy opinion letter. A winning applicant of the Uniendo a
Puerto Rico Fund and the Connect USVI Fund Stage 2 fixed support shall
provide with its letter of credit an opinion letter from its legal
counsel clearly stating, subject only to customary assumptions,
limitations, and qualifications, that in a proceeding under Title 11 of
the United States Code, 11 U.S.C. 101 et seq. (the ``Bankruptcy
Code''), the bankruptcy court would not treat the letter of credit or
proceeds of the letter of credit as property of the winning bidder's
bankruptcy estate under section 541 of the Bankruptcy Code.
(e) Authorization for Stage 2 support. Authorization to receive the
Uniendo a Puerto Rico Fund and the Connect USVI Fund Stage 2 fixed
support is conditioned upon full and timely performance of all of the
requirements set forth in this section, and any additional terms and
conditions upon which the support was granted.
(1) Failure by a Uniendo a Puerto Rico Fund and the Connect USVI
Fund Stage 2 fixed support recipient to meet its service milestones as
required by Sec. 54.1506 will trigger reporting obligations and the
withholding of support as described in Sec. 54.320(c). Failure to come
into full compliance within 12 months will trigger a recovery action by
the USAC. If the Uniendo a Puerto Rico Fund or Connect USVI Fund Stage
2 fixed support recipient does not repay the requisite amount of
support within six months, the USAC will be entitled to draw the entire
amount of the letter of credit and may disqualify the Uniendo a Puerto
Rico Fund or Connect USVI Fund Stage 2 fixed support recipient from the
receipt of any or all universal service support.
(2) A default will be evidenced by a letter issued by the Chief of
the Wireline Competition Bureau, or the Chief's designee, which letter,
attached to a standby letter of credit draw certificate, shall be
sufficient for a draw on the standby letter of credit for the entire
amount of the standby letter of credit.
Sec. 54.1509 Uniendo a Puerto Rico Fund and the Connect USVI Fund--
Stage 2 for mobile service.
(a) Term of support. Uniendo a Puerto Rico Fund or the Connect USVI
Fund Stage 2 mobile support shall be provided to eligible mobile
carriers that elect to make a commitment to its eligible service area
for a three-year term to begin on a date determined by the Wireline
Competition Bureau.
(b) Election of support. Eligible mobile carriers as provided in
Sec. 54.1510 shall have a one-time option to elect to participate in
Stage 2 of the mobile Uniendo a Puerto Rico Fund and the mobile Connect
USVI Fund for the eligible service area. An eligible mobile carrier may
elect to receive all or a subset of the Stage 2 support for which it is
eligible. FCC will publish the order adopting Stage 2 of the Uniendo a
Puerto Rico Fund and the Connect USVI Fund in the Federal Register. To
participate, an eligible provider must submit an election to
participate within 30 days following that publication. Each provider
must provide to the Commission through the Commission's Electronic
Comment Filing System as well as by emailing a copy to
[email protected] either a renewal of its Stage 1 certification
specifying the number of subscribers (voice or broadband internet
access service) it served in the territory as of June 30, 2017; or a
new certification specifying the number of subscribers (voice or
broadband internet access service) it served in the territory as of
June 30, 2017, along with accompanying evidence. Each provider will
make two simultaneous elections. First, each provider may elect to
receive Stage 2 support for which it is eligible to restore, harden,
and expand networks capable of providing 4G LTE or better services.
Second, each provider may elect to receive Stage 2 support for which it
is eligible to deploy networks capable of providing 5G service.
(c) Support amounts. A carrier exercising the election of support
specified in paragraph (b) of this section shall receive a pro rata
share of the available mobile support based on the number of
subscribers reported in its June 2017 FCC Form 477. Each carrier may
receive up to 75% of its eligible pro rata support amount to restore,
harden, and expand networks capable of provider 4G LTE or better
services meeting the minimum service requirements provided in Sec.
54.1514(b). Each carrier may also elect to receive up to 25% of its
eligible pro rata support amount to deploy networks capable of
providing 5G service.
(d) Support payments. Each eligible mobile provider that elects to
participate in Stage 2 of the Uniendo a Puerto Rico Fund or the USVI
Connect Fund will receive monthly installments of its pro rata share of
mobile support amortized over the three-year support period provided in
paragraph (a) of this section. Each recipient's pro rata share will be
adjusted according to its election to receive or decline support for 4G
LTE or 5G deployment. A mobile provider
[[Page 59967]]
that fails to meet its commitment to use its eligible support for 4G
LTE or 5G deployment shall return an amount equal the unused amount of
Stage 2 support to the Administrator within 30 days following the end
of the three-year support period.
(e) Phase-down of legacy support. An eligible mobile carrier may
elect or decline to participate in Stage 2 of the mobile Uniendo a
Puerto Rico and/or the mobile Connect USVI Fund. Beginning on a date to
be determined by the Bureau and announced by public notice, an eligible
mobile carrier that declines to participate in Stage 2 will receive
one-half of its prior frozen fixed support amortized for a 12-month
period and zero fixed support thereafter.
Sec. 54.1510 Stage 2 mobile carrier eligibility.
Facilities-based mobile carriers that provided mobile wireless
services to consumers in the Territories as reported by their June 2017
FCC Form 477 shall be eligible to participate in Stage 2 of the mobile
Uniendo a Puerto Rico Fund and the mobile Connect USVI Fund,
respectively.
Sec. 54.1511 Appropriate uses of Stage 2 mobile support.
Recipients of Uniendo a Puerto Rico and Connect USVI Stage 2 mobile
support shall use the support solely for:
(a) Deployment, replacement, and upgrade at 4G LTE or better
technological network level, as specified in this part; and
(b) Hardening of 4G LTE or better network facilities to help
prevent future damage from natural disasters.
Sec. 54.1512 Geographic area eligible for Stage 2 mobile support.
Uniendo a Puerto Rico Fund and Connect USVI Fund Stage 2 mobile
support may be used for all geographic areas of Puerto Rico or of the
U.S. Virgin Islands within a recipient's designated eligible
telecommunications carrier service area consistent with the parameters
of Stage 2 of the Uniendo a Puerto Rico Fund and the Connect USVI Fund.
Sec. 54.1513 Provision of Stage 2 mobile support.
(a) A recipient of Stage 2 mobile support shall commit to, at a
minimum, the full restoration of its pre-hurricane network coverage
area, as determined by FCC Form 477 reporting standards, at a level of
service that meets or exceeds pre-hurricane network levels and at
reasonably comparable levels to those services and rates available in
urban areas.
(b) Each recipient of Stage 2 mobile support shall demonstrate
mobile network coverage that is equal to or greater than 66 percent of
its pre-hurricane coverage by the end of year two of the Stage 2 term
of support, and that is equal to or greater than 100 percent of its
pre-hurricane coverage by the end of year three of the Stage 2 term of
support.
Sec. 54.1514 Stage 2 mobile additional annual reporting.
(a) Each recipient of Stage 2 mobile support shall submit no later
than 30 days following the end of the calendar year reports
demonstrating and certifying to the fact that its mobile network
coverage is equal to or greater than 66 percent of its pre-hurricane
coverage by the end of year two of the Stage 2 term of support and 100
percent of its pre-hurricane coverage by the end of year three of the
Stage 2 term of support.
(1) A recipient of Stage 2 mobile support shall submit with the
report required by this section the documentation in paragraphs
(a)(1)(i) through (iii) of this section in support of its milestone
obligations:
(i) Electronic shapefiles site coverage plots illustrating the area
reached by mobile services;
(ii) A list of all census blocks in the Territories reached by
mobile services; and
(iii) Data received or used from drive, drone, and/or scattered
site tests, analyzing network coverage for mobile services.
(2) [Reserved]
(b) Each recipient of Stage 2 mobile support shall report and
certify, no later than thirty (30) days following the end of the third
year of the Stage 2 term of support for all eligible areas where a
provider used Stage 2 support, 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 reasonable 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 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.
(c) Each recipient of Stage 2 mobile support shall submit no later
than thirty (30) days after the end of the third year of the Stage 2
term of support a certification that it has met the requisite public
interest obligations in paragraphs (a) and (b) of this section.
(d) Each recipient of Stage 2 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.
(e) Each recipient that elects to receive Stage 2 mobile support
for the deployment of 5G technological networks shall submit an annual
certification no later than thirty (30) days after the end of each 12-
month period the use of Stage 2 support for the deployment of 5G
technology to ensure compliance with its commitment. Each recipient
must report the total cost incurred and total amount of Stage 2 support
spent related to the deployment of 5G technology during the preceding
12-month period. Each recipient must describe in detail how it used the
support for deployment of 5G technology.
(f) Each report shall be submitted to the Office of the Secretary
of the Commission, 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.
(g) Recipients of Stage 2 mobile support have a continuing
obligation to maintain the accuracy and completeness of the information
provided in their milestone reports. All recipients of Stage 2 mobile
support shall provide information about any substantial change that may
be of decisional significance regarding their eligibility for Stage 2
support and compliance with Uniendo a Puerto Rico Fund and the Connect
USVI Fund requirements in this section as an update to their milestone
report submitted to the entities listed in paragraph (f) 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 Stage 2 requirements in this part, shall be
submitted within ten (10) business days after the reportable event
occurs.
(h) In order for a recipient of Stage 2 mobile support to continue
to receive mobile support for the following calendar year, it must
submit the milestone reports required by this
[[Page 59968]]
section by the deadlines set forth in paragraphs (a) through (g) of
this section.
Sec. 54.1515 Disaster preparation and response measures.
(a) Each recipient of fixed and mobile support from Stage 2 of the
Uniendo a Puerto Rico Fund and the Connect USVI Fund shall create,
maintain, and submit to the Wireline Competition Bureau for its review
and approval a detailed Disaster Preparation and Response Plan document
that describes and commits to the methods and procedures that it will
use, during the period in which it receives Stage 2 support, 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.
(b) Each Stage 2 support recipient shall submit the Disaster
Preparation and Response Plan to the Bureau for its review and approval
prior to receiving Stage 2 support. The Bureau shall approve submitted
Disaster Preparation and Response Plans that are complete and
thoroughly address the criteria enumerated in paragraph (a) of this
section. The Bureau shall notify the support recipient of deficiencies
identified in the Disaster Preparation and Response Plan and withhold
authorization to receive funding until the support recipient has cured
the deficiencies. Recipients shall materially comply with the
representations in the document, once approved.
(c) Recipients 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).
(d) Stage 2 support recipients shall use the Disaster Information
Reporting System for mandatory reporting. (See www.fcc.gov/general/disaster-information-reporting-system-dirs-0 for more information.)
[FR Doc. 2019-22842 Filed 11-6-19; 8:45 am]
BILLING CODE 6712-01-P
