Federal Communications Commission DA 19-354 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Petitions for Designation as an Eligible Telecommunications Carrier in the State of New York Telecommunications Carriers Eligible for Universal Service Support Connect America Fund ) ) ) ) ) ) ) ) ) ) ) WC Docket No. 09-197 WC Docket No. 10-90 ORDER Adopted: April 30, 2019 Released: April 30, 2019 By the Chief, Wireline Competition Bureau: I. INTRODUCTION 1. In this Order, the Wireline Competition Bureau (Bureau) designates each of four petitioners (identified in the Attachment to this Order) as an eligible telecommunications carrier (ETC) in eligible high-cost areas, conditioned upon and limited to petitioners’ authorization to receive Connect America Phase II support awarded in coordination with New York’s New NY Broadband Program (New York Program). See Wireline Competition Bureau Announces FCC Deadlines for New York Broadband Program Winning Bidders, WC Docket No. 10-90, Public Notice, 33 FCC Rcd 4922, 4923, App. A (2018) (New York Long-Form Public Notice); Phase 3 Awards, https://nysbroadband.ny.gov/new-ny-broadband-program/phase-3-awards (announcing carriers selected to receive support pursuant to the New York Program in areas eligible for Connect America Fund support); see also Connect America Fund, et al., Order, 32 FCC Rcd 968 (2017) (New York Auction Waiver Order). In making these designations, we find that each of these petitioners meets the eligibility requirements set forth in section 214(e)(6) of the Communications Act of 1934, as amended (Act), and related Commission’s rules, to be designated as an ETC in the relevant areas of New York. 47 U.S.C. § 214(e)(6); 47 CFR § 54.202. The Bureau will release separate public notices regarding Auction 903 funding authorizations. II. BACKGROUND A. CAF Support Awarded in Coordination with the New York Program 2. The Connect America Fund (CAF) Phase II auction (Auction 903) is one part of a multi-step process to comprehensively reform and modernize the high-cost component of the Universal Service Fund (USF). Connect America Fund et al., WC Docket Nos. 10-90 et al., Report and Order and Further Notice of Proposed Rulemaking, 26 FCC Rcd 17663, 17725, para. 156 (2011), aff’d sub nom., In re: FCC 11-161, 753 F.3d 1015 (10th Cir. 2014). In 2017, New York sought waiver of certain Auction 903 rules and requirements so that, through its New York Program, it could allocate certain CAF support (that otherwise would have been included in Auction 903) to CAF-eligible areas. See New York Auction Waiver Order, 32 FCC Rcd at 970-71, para. 9. Specifically, New York sought to distribute the $170.4 million in model-based support previously declined by Verizon in New York. See id. at 969, 970-71, paras. 3, 9. The Commission granted this waiver request conditional upon the participants’ compliance with certain terms and conditions consistent with those imposed on Auction 903 winning bidders. Id. at 990, para. 60. See 47 CFR § 54.315. The Commission also emphasized that like all high-cost support recipients, New York Program participants selected to receive CAF support would only be eligible to receive CAF support if designated an ETC in their CAF-eligible areas, and required winning participants to submit proof of such designation within 180 days of the announcement of their support awards. New York Auction Waiver Order, 32 FCC Rcd at 990, para. 59. On May 18, 2018, the Commission released a public notice acknowledging New York’s allocation of CAF support to certain participants. New York Long-Form Public Notice, 33 FCC Rcd at 4922. B. Requirements for FCC ETC Designation 3. Section 254(e) of the Act provides that “only an eligible telecommunications carrier designated under section 214(e) shall be eligible to receive specific federal universal service support.” 47 U.S.C. § 254(e). Congress gives primary authority for ETC designations to state commissions. Id. § 214(e)(2). The FCC has authority only when “a common carrier [is] providing telephone exchange service and exchange access that is not subject to the jurisdiction of a State commission.” Id. § 214(e)(6). The petitioning carrier must demonstrate that the FCC has jurisdiction and may do so by submitting an “affirmative statement from the state commission or a court of competent jurisdiction that the carrier is not subject to the state commission’s jurisdiction.” See Federal-State Joint Board on Universal Service et al., CC Docket No. 96-45, Twelfth Report and Order, Memorandum Opinion and Order, and Further Notice of Proposed Rulemaking, 15 FCC Rcd 12208, 12267, para. 120 (2000) (2000 Tribal Order); 47 U.S.C. § 214(e)(6). To the extent that the petition covers Tribal Lands, and the petitioner has not taken any action at the state-level to initiate ETC proceedings, the petitioner may make an affirmative showing of FCC jurisdiction under relevant law. 2000 Tribal Order, 15 FCC Rcd at 12214, 12268-69, paras. 7, 126; see also id. at 12218-19, paras. 17-18 (defining Tribal lands to include “reservation” and “near reservation,” as those terms are defined under BIA’s regulations); 25 CFR § 20.1(r), (v). The Commission has delegated authority to the Bureau to consider appropriate ETC designation requests. See Procedures for FCC Designation of Eligible Telecommunications Carriers Pursuant to Section 214(e)(6) of the Communications Act, CC Docket No. 96-45, Public Notice, 12 FCC Rcd 22947, 22948 (1997). 4. A petition for ETC designation by the FCC must include: (1) a certification that the petitioner offers or intends to offer all services designated for support by the Commission pursuant to section 254(c) of the Act; (2) a certification that the petitioner offers or intends to offer the supported services either using its own facilities or a combination of its own facilities and resale of another carrier’s services; 47 U.S.C. § 214(e)(1); 47 CFR § 54.201(d)(1). (3) a description of how the petitioner advertises the availability of the supported services and the charges therefor using media of general distribution; 47 U.S.C. § 214(e)(1); 47 CFR § 54.201(d)(2). (4) a detailed description of the geographic service area for which the petitioner requests to be designated as an ETC; An ETC’s “service area” is set by the designating authority and is the geographic area within which an ETC has universal service obligations and may receive universal service support. 47 U.S.C. § 214(e)(5); 47 CFR § 54.207(a). Although section 214(e)(5) of the Act, 47 U.S.C. § 214(e)(5), requires conformance of a competitive ETC’s service area and an incumbent rural telephone company’s service area, the Commission forbore from imposing such requirements on participants in the New York Program. New York Auction Waiver Order, 32 FCC Rcd at 990, para. 59. and (5) a certification that neither the petitioner, nor any party to the application, is subject to a denial of federal benefits pursuant to the Anti-Drug Abuse Act of 1988. 21 U.S.C. § 862; 47 CFR § 1.2002(a)–(b). 5. In addition, petitioners must demonstrate their ability to meet certain service standards. A petitioner seeking an ETC designation for purposes of becoming eligible to receive high-cost support must: (1) certify that it will comply with the service requirements applicable to the support that it receives; (2) submit a five-year service plan (applicable only to high cost areas); (3) demonstrate its ability to remain functional in emergency situations; and (4) demonstrate its ability to satisfy applicable consumer protection and service quality standards. See 47 CFR § 54.202(a). 6. For petitioners seeking ETC designation for the purpose of becoming authorized to receive Auction 903 support, the Bureau waived the requirements that the petitioners submit a five-year service plan and proof of compliance with consumer protection and service quality standards, finding that the need for such requirements is obviated by specific service quality standards applicable to Auction 903 support recipients and specific reporting obligations relating to such standards. WCB Reminds Connect America Fund Phase II Auction Applicants of the Process for Obtaining a Federal Designation as an Eligible Telecommunications Carrier, WC Docket Nos. 09-197 and 10-90, Public Notice, 33 FCC Rcd 6696, 6699-6700 (WCB 2019). Because the authorization of CAF support for participants in the New York program is conditioned on meeting terms and conditions consistent with those applicable to Auction 903 winning bidders, New York Auction Waiver Order, 32 FCC Rcd at 990, para. 60. we interpret this waiver as equally applicable to New York Program participants. 7. In addition, prior to designating a carrier as an ETC pursuant to section 214(e)(6) of the Act, the Commission must determine whether such designation is in the public interest. 47 U.S.C. § 214(e)(6); 47 CFR § 54.202(b). When making a public interest determination, the Commission historically has considered the benefits of increased consumer choice and the unique advantages and disadvantages of the applicant’s service offering. See, e.g., Virgin Mobile ETC Designation Order in the States of Alabama, Connecticut, Delaware, New Hampshire and the District of Columbia, WC Docket 09-197, Order, 25 FCC Rcd 17797, 17799, para. 6 (WCB 2010). C. Petitions for ETC Designation 8. The petitioners that are the subject of this Order seek ETC designation to become eligible to receive CAF support awarded in coordination with the New York Program, as described in the Attachment to this Order. The Bureau released a public notice soliciting comment on each of their petitions. Wireline Competition Bureau Seeks Comment on Two Petitions for Designation as Eligible Telecommunications Carriers, Separately Submitted by OEConnect, LLC and Hughes Network Systems, LLC, Docket No. 09-197, Public Notice, 33 FCC Rcd 6014 (WCB 2018); Wireline Competition Bureau Seeks Comment on Three Petitions for Designation as an Eligible Telecommunications Carrier in the State of New York, Separately Submitted by DTC Cable, Inc., Heart of the Catskills Communications, Inc. d/b/a MTC Cable, and Mohawk Networks, LLC, Docket No. 09-197, Public Notice, 33 FCC Rcd 6781 (WCB 2018); Wireline Competition Bureau Seeks Comment on the Petition for Designation as an Eligible Telecommunications Carrier in the State of New York Submitted by Haefele TV, Inc., Docket No. 09-197, Public Notice, 33 FCC Rcd 8578 (WCB 2018). No third party filed comments in response to any of the petitions that are the subject of this order. III. DISCUSSION 9. We find that each of these petitioners satisfies the Commission’s requirements for ETC designation. We therefore designate the petitioners as high-cost ETCs in New York, conditioned upon and limited to the high-cost areas where they are authorized to receive Connect America Phase II support and effective only upon such authorization. In these areas, petitioners must meet Connect America Phase II requirements, Lifeline requirements, and other service obligations attendant to their high-cost designations, as specified in the Act and the Commission’s rules. 47 CFR § 54.202(a)(1)(i); id. § 54.101(d); Lifeline and Link Up Reform and Modernization et al., WC Docket No. 11-42 et al., Third Report and Order, Further Report and Order, and Order on Reconsideration, 31 FCC Rcd 3962, 3974, 4074-75, paras. 35, 311-12 (2016) (requiring all high-cost recipients to meet Lifeline obligations in all areas where they deploy a network pursuant to a broadband service obligation and are commercially offering qualifying service). A. Commission Authority 10. Each petitioner demonstrates that the Commission has the requisite authority to designate it as an ETC pursuant to section 214(e)(6) of the Act. The four petitioners separately submitted letters from the New York State Public Service Commission declining ETC designation jurisdiction based on the petitioners’ representations that they offered only broadband and Voice over Internet Protocol (VoIP) service. DTC Petition at Attach. A; Haefele Petition at Attach. A; MTC Petition at Attach. A; OEConnect Petition at Ex. B. We thus find that these petitioners have demonstrated FCC authority to decide these petitions. B. Eligibility Requirements 11. Designated Service Area. Each petitioner describes a designated service area based on all CAF-eligible census blocks covered by its Connect America Phase II award (as listed in Attachment B to this Order). DTC Petition at Ex. 1; Haefele Petition at Ex.1; MTC Petition at Ex. 1; OEConnect Petition at Ex. A; 47 U.S.C. §214(e); 47 CFR § 54.201(d). 12. Offering the Services Supported by the Universal Service Support Mechanisms. We find that each of the petitioners establishes through the required certifications and related filings that it will offer the services supported by the federal universal service support mechanisms. DTC Petition at 4-7; Haefele Petition at 4; MTC Petition at 4-6; OEConnect Petition at 4-8; 47 U.S.C. § 214(e)(1)(A); 47 CFR § 54.201(d)(1). 13. Compliance with the Service Requirements Applicable to Connect America Phase II Support Awarded through the New York Program. We find that each of the petitioners establishes its ability to comply with service requirements applicable to the support that it receives. DTC Petition at 4-7; Haefele Petition at 4; MTC Petition at 4-6; OEConnect Petition at 4-8; 47 CFR §§ 54.101(d), 54.202(a)(1)(i). This determination takes into account that the petitioners must demonstrate, as part of their FCC applications, the technical and financial ability to provide voice and broadband services meeting or exceeding Connect America Phase II standards and comply with all relevant public interest obligations. New York Auction Waiver Order, 33 FCC Rcd at 991, para. 62. Moreover, once authorized, the petitioners must satisfy certain reporting obligations to ensure that the support received is being used efficiently and appropriately and that service requirements are being met. 47 CFR §§ 54.313(a),(e), 54.316(a)(4); New York Auction Waiver Order, 33 FCC Rcd at 993, paras. 68-70. 14. Compliance with Service Requirements Applicable to Lifeline Services. Each petitioner commits to offering Lifeline discounts to qualifying low-income consumers, consistent with the Commission’s rules, in all high-cost areas where it is authorized to receive support. DTC Petition at 5; Haefele Petition at 3-4; MTC Petition at 5; OEConnect Petition at 5. 15. Offering the Supported Services Using a Carrier’s Own Facilities. Each petitioner certifies that it is a facilities-based provider of broadband and voice services. DTC Petition at 5; Haefele Petition at 4; MTC Petition at 5; OEConnect Petition at 5; 47 U.S.C. § 214(e)(1)(A); 47 CFR § 54.201(d)(1). 16. Advertising Supported Services. Each petitioner commits to advertising the availability of the supported services and related charges using media of general distribution. DTC Petition at 7; Haefele Petition at 5; MTC Petition at 6; OEConnect Petition at 6; 47 U.S.C. § 214(e)(1)(B); 47 CFR § 54.201(d)(2). We emphasize that, as part of this commitment, an ETC must advertise the availability of its services and charges in a manner reasonably designed to reach Lifeline-eligible consumers. 47 CFR § 54.405. 17. Ability to Remain Functional in Emergency Situations. Each petitioner states that it can remain functional in emergency situations. Each petitioner states that it has sufficient back-up power to ensure functionality in the designated service area without an external power source, can re-route traffic around damaged facilities, and can manage traffic spikes resulting from emergency situations. DTC Petition at 6-7; Haefele Petition at 5-6; MTC Petition at 7; OEConnect Petition at 7; 47 CFR § 54.202(a)(2). 18. Anti-Drug Abuse Act Certification. Each petitioner submits a certification that satisfies the requirements of the Anti-Drug Abuse Act of 1988, as codified in sections 1.2001-1.2003 of the Commission’s rules. DTC Petition at 8; Haefele Petition at 7, Ex. 2; MTC Petition at 8; OEConnect Petition at 8; 47 CFR § 1.2002. C. Public Interest Analysis 19. We conclude that the petitioners’ participation in universal service programs would be in the public interest and would provide numerous benefits to consumers. Through participation in the New York Program and completion of the Commission’s subsequent application process, the petitioners demonstrate that they can offer voice and broadband service in high-cost areas efficiently and at a price and quality comparable to the service offerings in more competitive areas. See New York Auction Waiver Order, 33 FCC Rcd at 991, paras. 61-62. Moreover, granting these petitions will serve the interests of low-income consumers by ensuring the availability of new, facilities-based Lifeline services at competitive prices in these areas. Given these commitments and associated representations, granting the ETC designations will help ensure increased consumer choice, affordability, and improved quality of service. 20. Accordingly, based on the information, representations, and certifications in their petitions, we find that the petitioners have met all applicable conditions and prerequisites for ETC designation and that conditionally granting these petitions serves the public interest. D. Regulatory Oversight 21. Under section 254(e) of the Act, each of these petitioners must use universal service support “only for the provision, maintenance, and upgrading of facilities and services for which the support is intended.” 47 U.S.C. § 254(e). Under section 214(e), each of the petitioners must provide supported services throughout their service area. Id. § 214(e). To help ensure compliance with these requirements, the Commission requires these petitioners to file an annual certification that all federal high-cost support received was used in the preceding calendar year and will be used in the coming calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support is intended. 47 CFR § 54.314(b). The Commission conditions future support awarded through the high-cost program on the filing of such certification. Id. In addition, petitioners must file annual reports detailing their ongoing compliance with service standards, must annually report location deployment data, and must certify by specific deadlines deployment to a specific number of locations. Id. §§ 54.313(a), (e), 54.316(a)(4); New York Auction Waiver Order, 33 FCC Rcd at 993, paras. 68-70. 22. We find that reliance on petitioners’ commitments to meet these and other regulatory requirements, as well as representations and commitments made in their petitions, is reasonable and consistent with the public interest and the Act. We conclude that fulfillment of these additional reporting requirements will further the Commission's goal of ensuring that petitioners satisfy their obligation under section 214(e) of the Act to provide supported services throughout their respective designated service areas. 23. 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. 47 U.S.C. §§ 220, 403. Petitioners must provide such records and documentation to the Commission and USAC upon request. 47 CFR § 54.417. If a petitioner fails to fulfill the requirements of the Act, the Commission’s rules, and the terms of this Order after it begins receiving universal service support, the Commission has authority to revoke the petitioner’s ETC designation. Id. § 54.320(c); Federal-State Joint Board on Universal Service; Western Wireless Corp. Petition for Preemption of an Order of the South Dakota Public Utilities Commission, CC Docket No. 96-45, Declaratory Ruling, 15 FCC Rcd 15168, 15174, para. 15 (2000). The Commission also may assess forfeitures for violations of Commission rules and orders. See 47 U.S.C. § 503(b). E. Waiver of Deadline for Submitting Proof of ETC Designation 24. The Commission required participants in the New York Program to submit the requisite proof of ETC designation to the Commission no later than November 14, 2018. New York Long-Form Public Notice, 33 FCC Rcd at 4922. The Bureau finds, on its own motion, good cause to waive this deadline for the petitioners that are the subject of this Order. 47 CFR §§ 0.91(p) (functions of the Wireline Competition Bureau), 0.291 (delegation of authority to the Wireline Competition Bureau). The Commission may waive its policies or rules upon a showing of good cause and may take into account, on an individual basis, considerations of hardship, equity, or more effective implementation of overall policy. See WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir. 1969); see also NE Cellular Tel. Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990). Waiver of the Commission’s policies or rules is appropriate only if both: (i) special circumstances warrant a deviation from the general rule; and (ii) such deviation will serve the public interest. See Network IP, LLC v. FCC, 548 F.3d 116, 127 (D.C. Cir. 2008). Deadlines can only be waived under “unusual or compelling circumstances.” Id. at 126 (citation omitted). The Commission has routinely waived similar deadlines when the ETC designation proceeding is not yet complete despite the good faith efforts of the petitioner. See, e.g., Connect America Fund et al., Report and Order and Further Notice of Proposed Rulemaking, 31 FCC Rcd 5949, 6002, para. 152 (2016); Wireline Competition Bureau Announces Rural Broadband Experiment Support for 13 Provisionally Selected Bids is Ready to be Authorized, Public Notice, 30 FCC Rcd 9978, 9980-81 (WCB 2015). These petitioners filed their petitions for ETC designation well in advance of the November deadline, and none of the petitions raise unique factual or legal concerns nor were they challenged. Accordingly, because the delay in issuing this Order is unrelated to the filing date of these petitions, waiver of the deadline is appropriate. IV. ORDERING CLAUSES 25. Accordingly, IT IS ORDERED, pursuant to the authority contained in section 214(e)(6) of the Communications Act of 1934, as amended, 47 U.S.C. § 214(e)(6), and the authority delegated in sections 0.91 and 0.291 of the Commission’s rules, 47 CFR §§ 0.91, 0.291, that EACH OF THE PETITIONERS SPECIFIED IN THE ATTACHMENT TO THIS ORDER ARE CONDITIONALLY DESIGNATED AN ELIGIBLE TELECOMMUNICATIONS CARRIER IN THE CENSUS BLOCKS SPECIFIED IN ATTACHMENT B. These designations are contingent upon the petitioners becoming authorized to receive such support, is limited to those areas where support is authorized and is effective only upon authorization. 26. IT IS FURTHER ORDERED that pursuant to section 1.3 of the Commission’s rules, 47 CFR § 1.3, and pursuant to the authority delegated under sections 0.91, and 0.291 of the Commission’s rules, 47 CFR §§ 0.91, 0.291, the deadline specified in the New York Auction Waiver Order for submitting proof of ETC designation IS WAIVED to the extent described above. 27. IT IS FURTHER ORDERED that a copy of this order SHALL BE transmitted by the Office of the Secretary to the New York Public Utilities Commission and to the Universal Service Administrative Company; and 28. IT IS FURTHER ORDERED that, pursuant to section 1.102(b)(1) of the Commission’s rules, 47 CFR § 1.102(b)(1), this order SHALL BE effective upon release. FEDERAL COMMUNICATIONS COMMISSION Kris Anne Monteith Chief Wireline Competition Bureau 14 ATTACHMENT A Petitioner Date Petition Filed Census Blocks Covered by Selected Bid Locations Covered by Selected Bid Total Estimated CAF Award DTC Cable Inc. (DTC) DTC Cable, Inc., Petition for Eligible Telecommunications Carrier Designation, WC Docket No. 09-197 (filed July 2, 2018), https://www.fcc.gov/ecfs/filing/10702031317423, errata, https://www.fcc.gov/ecfs/filin g/1071141030872 (filed July 11, 2018), errata, https://www.fcc.gov/ecfs/filing/10711218101092 (filed July 11, 2018) (DTC Petition). 7/2/2018 118 712 $2,103,935 Haefele TV Inc. (Haefele) Petition for Eligible Telecommunications Designation, WC Docket No. 09-197 (filed Aug. 17, 2018) (Haefele Petition). 8/17/2018 97 667 $1,257,581 MTC Cable (MTC) Heart of the Catskills Communications, Inc. d/b/a MTC Cable, Petition for Eligible Telecommunications Carrier Designation, WC Docket No. 09-197 (filed June 29, 2018), https://www.fcc.gov/ecfs/filing/10629141204899 (MTC Petition). 6/29/2018 177 1,659 $4,276,982 OEConnect, LLC (OEConnect) OEConnect requests designation as an ETC in all areas where its parent company, Otsego Electric Cooperative, has been awarded CAF support pursuant to the New York Program. OEConnect, LLC, Petition for Eligible Telecommunications Carrier Status, WC Docket No. 09-197, 1 (filed May 9, 2018), https://www.fcc.gov/ecfs/filing/1050920563131, amended, https://www.fcc.gov/ecfs/filing/1060835101842 (filed June 8, 2018) (OEConnect Petition). 5/9/2018 282 1,146 $4,298,623 ATTACHMENT B Census Blocks Covered by Selected Bid DTC Cable, Inc. 360179709001091 360259701001000 360259701001005 360259701001007 360259701001008 360259701001009 360259701001013 360259701001014 360259701001015 360259701001016 360259701001017 360259701001019 360259701001023 360259701001025 360259701001026 360259701001027 360259701001034 360259701001036 360259701001037 360259701001040 360259701001045 360259701001074 360259701001075 360259701001078 360259701001086 360259701002002 360259701002008 360259701003000 360259701003012 360259701003088 360259701003092 360259701003104 360259701003105 360259701003107 360259701003109 360259701003110 360259701003112 360259701003115 360259701003116 360259701003121 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361019615002095 361019615002097 361019615002101 361070206001007 361070206001008 361070206001027 361070206003014 361070206003017 361070206004003 361070206004004 361070206004005 361070206004006 361070206004007 361070206004008 361070206004009 361070206004010 361070206004014 361070206004016 361070206004017 361070206004018 361070206004021 361070206004032 361070206004033 361070206004064 361070207021064 361070207021069 361070207021078 361070207021080 361070207021082 361070207021083 361070207021086 361070207021088 361070207021141 361070207022000 361070207022001 361070207022002 361070207022004 361070207022006 361070207022007 361070207022009 361070207022010 361070207022011 361070207022013 361070207022021 361070207022030 361070207022049 361070207022079 361070207023026 361070207023036 361070207023037 361090018001071 361090018003056 Heart of the Catskills Communications, Inc. d/b/a MTC Cable 360259701002000 360259701002001 360259701002007 360259701002009 360259701002010 360259701002016 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