Federal Communications Commission DA 20-1011 DA 20-1011 Released: September 2, 2020 CONNECT AMERICA FUND PHASE II AUCTION SUPPORT AUTHORIZED FOR 1 WINNING BID AU Docket No. 17-182 WC Docket No. 10-90 By this Public Notice, the Wireline Competition Bureau (WCB), in conjunction with the Rural Broadband Auctions Task Force and the Office of Economics and Analytics, authorize Connect America Fund Phase II (Auction 903) support for the winning bid identified in Attachment A of this Public Notice. For each of the winning bids identified in Attachment A, we have reviewed the long-form application information, including the letter(s) of credit and Bankruptcy Code opinion letter(s) from the long-form applicant’s legal counsel. Based on the representations and certifications in the relevant long-form application, we authorize support for the winning bid listed in Attachment A. We will also soon post a state-level summary under the “Data” tab on the Auction 903 webpage at https://www.fcc.gov/auction/903. The summary will provide for each long-form applicant included in this Public Notice: 1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, 2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and 3) the eligible census blocks included in the winning bids that are being authorized in each state. An Auction 903 recipient that participates in the location discrepancy process may have its total number of locations and total support reduced. See Connect America Fund, et al., Order on Reconsideration, 33 FCC Rcd 1380, 1389-90, paras. 23-26 (2018); Wireline Competition Bureau Seeks Comment on Procedures to Identify and Resolve Location Discrepancies in Eligible Census Blocks within Winning Bid Areas, Public Notice, 33 FCC Rcd 8620 (WCB 2018); Connect America Fund, Order, 34 FCC Rcd 10395 (WCB 2019). Upon issuance of this Public Notice, the Universal Service Administrative Company (USAC) is directed and authorized to obligate and disburse from the Universal Service Fund the amounts identified in Attachment A to the long-form applicant associated with each study area specified in Attachment A. USAC will make disbursement payments to the account on file for the 498 ID associated with the study area code (SAC). The support will be disbursed in 120 monthly payments, which will begin at the end of this month. Below, we provide a summary of the various obligations of authorized Auction 903 support recipients. We apply the Commission’s recent CAF II Auction Recipients’ Deployment and Reporting Deadlines Aligned Order (Order) establishing uniform deadlines for all recipients of CAF Phase II auction funding, aligning program deadlines related to deployment and reporting obligations thereby “reduc[ing] confusion and ensur[ing] continued compliance with these obligations and requirements.” See Connect America Fund et al., WC Docket 10-90, AU Docket 17-182, Order, DA 20-108 (WCB Jan. 27, 2020) (Alignment Order). The list below is not a comprehensive list; thus, each support recipient is still responsible for conducting the due diligence required to comply with universal service fund requirements and the Commission’s rules. Summary of Obligations and Relevant Dates. All CAF Phase II authorized long-form applicants are subject to the following deadlines: CAF II Auction Recipients’ Deployment and Reporting Deadlines Aligned Order at 5, n.21 (stating “[l]ong form applicants that have not yet been authorized by the Bureau to begin receiving support at the time of this waiver will be subject to the same deadlines, and we do not expect the adjusted deadlines to affect their ability to meet their milestones”). · Annual reporting of location information. Auction 903 support recipients are required to file location information with USAC through the High-Cost Universal Broadband (HUBB) portal. 47 CFR § 54.316(a)(4); Connect America Fund et al., Report and Order and Further Notice of Proposed Rulemaking, 31 FCC Rcd 5949, 6010-11, para. 172 (2016) (Phase II Auction Order). This information includes geolocation data for each qualifying location to which they are offering the requisite service and the technology the Auction 903 support recipient is using to offer the requisite service to the qualifying locations. The requisite service is: at least one standalone voice plan and one service plan that provides broadband at the relevant performance tier and latency requirements at rates that are reasonably comparable to rates offered in urban areas. 47 CFR § 54.316(a)(4); Phase II Auction Order, 31 FCC Rcd at 6010-11, paras. 172-73. See also Wireline Competition Bureau Announces Results of 2019 Urban Rate Survey for Fixed Voice and Broadband Services, Posting of Survey Data and Explanatory Notes, and Required Minimum Usage Allowance for Eligible Telecommunications Carriers, Public Notice, 33 FCC Rcd 12316 (WCB 2018). The locations must be in the eligible census blocks covered by the long-form applicant’s winning bids. See also Wireline Competition Bureau Provides Guidance to Carriers Receiving Connect America Fund Support Regarding their Broadband Location Reporting Obligations, Public Notice, 31 FCC Rcd 12900 (WCB 2016) (Location Guidance Public Notice). The Commission has consistently encouraged carriers subject to defined deployment obligations and HUBB reporting obligations to report location data on a rolling basis and has adopted a best practice of filing this information within 30 days after the initial offering of service. Phase II Auction Order, 31 FCC Rcd at 6011, para. 173. While reporting on a rolling basis is encouraged, the first deadline for all authorized long-form applicants to submit their location data is March 1, 2021. 47 CFR § 54.316(c)(1). All support recipients must continue to report this information by March 1 in each year thereafter Alignment Order at 5. until all build-out requirements are satisfied. For more information about the HUBB portal and reporting location data, visit https://www.usac.org/high-cost/annual-requirements/submit-data-in-the-hubb/. · Service milestones. As a result of the recent Order, January 1, 2020 is the commencement of the deployment timeline for all CAF Phase II support recipients, rather than the release date of the Bureau’s authorization public notice. Carriers will still get 120 equal monthly payments from the date of authorization. Thus, the service milestones for all CAF Phase II auction support recipients will be as follows: Alignment Order at 4. Percentage of Locations in a State Service Milestone Deadline 40 December 31, 2022 60 December 31, 2023 80 December 31, 2024 100 December 31, 2025 Next, the Order waived the related deadline imposed by section 54.316(b)(4) of the Commission’s rules. Id. As we stated above, all support recipients that are being authorized for CAF Phase II support must file their certifications in the HUBB by March 1 following each service milestone. If an ETC is unable to meet a service milestone, it must notify the Commission, USAC, and the relevant state, U.S. Territory, or Tribal government as appropriate, no later than ten business days after the applicable deadline. 47 CFR § 54.320(d). If the ETC is unable to meet the required deployment obligations due to circumstances beyond its control, it may also seek waiver of the service milestones. Connect America Fund et al., Report and Order, 29 FCC Rcd 15644, 15700, para. 154 (2014) (December 2014 Connect America Order). The Commission has repeatedly warned Phase II support recipients, however, that it does not expect to routinely grant such waiver requests, emphasizing the difficulty of demonstrating good cause under circumstances where carriers fail to plan for contingencies that would prevent compliance with defined deployment obligations. See Connect America Fund et al., Order on Reconsideration, 33 FCC Rcd 1380, 1394, para. 35 (2018) (explaining that “it would be difficult for a recipient to meet its burden of demonstrating good cause to grant a waiver of the deployment obligations if it did not plan to build to 100 percent of funded locations at the outset of its support term”); id. at 1394, para. 33 & n.88 (explaining that “the Commission has cautioned that it does not expect such waiver requests will be granted routinely, and a failure to plan for some contingencies would make it difficult to establish that there is good cause to warrant waiver”) (citing December 2014 Connect America Order, 29 FCC Rcd at 15660, para. 40 & n.93). · Annual section 54.313 report. Long-form applicants authorized in this Public Notice will be required to file their first annual section 54.313 report by July 1, 2021 and each subsequent year until the year after their support terms have ended. 47 CFR 54.313; Phase II Auction Order, 31 FCC Rcd at 6011-13, paras. 176-79. Long-form applicants being authorized by this Public Notice that have also been designated as Lifeline only ETCs in census blocks that are not eligible for Auction 903 support must comply with all relevant reporting requirements for the Lifeline program in sections 54.416 and 54.422 of the Lifeline rules, including completing and submitting FCC Form 481 on USAC’s website, if applicable. Annual reports are filed with USAC. Connect America Fund; ETC Annual Reports and Certifications, Report and Order, 32 FCC Rcd 5944, 5948, para. 15 (2017) (determining that the Commission “will no longer require ETCs to file duplicate copies of Form 481 with the FCC and with states, U.S. Territories, and/or Tribal governments beginning in 2018”); 47 CFR § 54.313. Support recipients must complete the FCC Form 481 on USAC’s website. See Universal Service Administrative Company, File FCC Form 481, https://www.usac.org/high-cost/annual-requirements/file-fcc-form-481/. They must also test and certify compliance with relevant performance requirements in section 54.309 of the Commission’s rules. 47 CFR § 54.309. WCB, the Wireless Telecommunications Bureau, and the Office of Engineering and Technology have adopted a uniform framework to measure and report on the performance of ETCs’ service. Performance Measures for Connect America High-Cost Universal Service Support Recipients, Order, 33 FCC Rcd 6509 (WCB/WTB/OET 2018) (CAF Performance Measures Order); 47 CFR § 54.313(a)(6). Further modifications were made to the performance measures requirements in subsequent reconsideration orders.  See Connect America Fund, Order on Reconsideration, 34 FCC Rcd 8081 (WCB/WTB/OET 2019); Connect America Fund, Order on Reconsideration, 34 FCC Rcd 10109 (2019). · Annual section 54.314 certification. The first annual section 54.314 certification is due for the long-form applicants that are being authorized by this Public Notice by October 1, 2021. 47 CFR § 54.314. Pursuant to section 54.314 of the Commission’s rules, if a support recipient was designated by a state, that state must certify on the support recipient’s behalf “that all federal high-cost support provided . . . within that State was used in the preceding calendar year and will be used in the coming calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support is intended.” 47 CFR § 54.314(a). If a support recipient was designated an ETC by the Federal Communications Commission, it must self-certify by filing a sworn affidavit executed by a corporate officer attesting to the relevant facts. 47 CFR § 54.314(b). Certifications must be filed with both the Commission and USAC. ETCs may submit their certifications to USAC via its online filing system or by sending the appropriate certification sample letter (provided on USAC’s website) via email or U.S. mail. See Universal Service Administrative Company, Certify Data with 54.314, https://www.usac.org/high-cost/annual-requirements/certify-data-with-54-314/ (last visited Feb. 12, 2020). Certifications must also be submitted to the Commission’s Office of the Secretary on or before October 1st. The submission should clearly reference WC Docket No. 14–58, ETC Annual Reports and Certifications. We conclude there is good cause to waive on our own motion the general high-cost support program requirement that the relevant states (or the ETCs, if applicable) file a section 54.314 certification by October 1, 2020 with respect to the use of Auction 903 support for the applicants authorized in this Public Notice. Generally, the Commission’s rules may be waived for good cause shown. 47 C.F.R. § 1.3. Waiver of the Commission’s rules is appropriate only if both: (1) special circumstances warrant a deviation from the general rule, and (2) such deviation will serve the public interest. See Northeast Cellular Tel. Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (citing WAIT Radio v. FCC, 418 F.2d 1153, 1157-59 (D.C. Cir. 1969), cert. denied, 93 S.Ct. 461 (1972)). We previously waived the October 1, 2019 section 54.314 certification for Auction 903 long-form applicants that were authorized in 2019. Connect America Fund Phase II Auction Support Authorized for 459 Winning Bids, Public Notice, 34 FCC Rcd 3142, 3145-46 (WCB 2019). When the Commission adopted the certification requirement, it made clear that it expected the states and federally designated ETCs to undertake a rigorous examination of the factual information provided in the annual reports required pursuant to section 54.313 prior to issuance of the annual certification. Connect America Fund et al.; Report and Order and Further Notice of Proposed Rulemaking, 26 FCC Rcd 17663, 17861, para. 612 (2011) aff’d sub nom., In re: FCC 11-161, 753 F.3d 1015 (10th Cir. 2014). In this instance, the Auction 903 applicants being authorized today did not receive Auction 903 support in 2019 and will not file an annual report with respect to those supported areas on July 1, 2020. Therefore, the state commissions and federally designated ETCs will not have the annual reporting information before them to provide an evidentiary basis for certifying that support will be used for its intended purposes in 2021 as required by the prospective section 54.314 certification due by October 1, 2020. State commissions (or the ETCs, if applicable) will be required to certify support received in 2020 was used for its intended purposes when the section 54.314 certification is filed by October 1, 2021 and will be required to certify that support received in 2021 was used for its intended purposes when the section 54.314 certification is filed by October 1, 2022. Accordingly, we conclude that the Commission, USAC, and the states will have assurance that Auction 903 support that is disbursed in 2020 and 2021 is used for its intended purposes even if the relevant states or federally designated ETCs do not file the section 54.314 certification on October 1, 2020. All post-designation ETC-related filings must be submitted in good faith and include a certification that, to the best of the ETC’s knowledge and belief, the information is complete and accurate. See, e.g., FCC Form 481 Officer Certification (requiring an officer of a petitioning entity to certify that he/she is “an officer of the reporting carrier; my responsibilities include ensuring the accuracy of the annual reporting requirements for universal service support recipients; and, to the best of my knowledge, the information reported on this form and in any attachments is accurate”); see also 47 CFR § 1.17(a)(2) (stating that no person may provide, in any written statement of fact “material factual information that is incorrect or omit material information that is necessary to prevent any material factual statement that is made from being incorrect or misleading without a reasonable basis for believing that any such material factual statement is correct and not misleading”). In addition, ETCs have an on-going duty to correct or amend information if they have reason to believe, either through their own investigation or upon notice from USAC, that the data are inaccurate, incomplete, or contain errors or anomalies. See Location Guidance Public Notice, 31 FCC Rcd at 12910. The failure to timely file information may result in penalties in the form of a reduction in support. 47 CFR §§ 54.313(j), 54.314(d), 54.316(c), 54.320. National Security Supply Chain Proceeding. We remind winning bidders that all Auction 903 support recipients will be subject to the Commission’s National Security Supply Chain proceeding, including the rule that “no universal service support may be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by any company posing a national security threat to the integrity of communications networks or the communications supply chain.” 47 CFR § 54.9(a). The prohibition on using universal service funds applies “to upgrades and maintenance of existing equipment and services.” Protecting Against National Security Threats to the Communication Supply Chain through FCC Programs et al., Report and Order et al., 34 FCC Rcd 11423, 11453, para. 77 (2019).   Document Retention and Compliance Audits. Under section 54.320 of the Commission’s rules, recipients of high-cost support must retain, for at least ten years, all records necessary to demonstrate to auditors that the support received was consistent with universal service high-cost program rules and to make these documents available upon request to the Commission (and any of its Bureaus or Offices) and to USAC, and to their respective auditors. 47 CFR § 54.320(b). In addition, all ETCs that receive high-cost support are subject to random compliance audits and other investigations to ensure compliance with program rules and orders, including verification of actual deployment to reported locations. Id. § 54.320(a). Consequences for Non-Compliance. A support recipient is subject to non-compliance measures once it becomes a support recipient if it fails or is unable to meet its minimum coverage requirement or other service requirements, or fails to fulfill any other term or condition of Phase II support. 47 CFR §§ 54.315(c)(4), 54.320; Phase II Auction Order, 31 FCC Rcd at 6016-18, paras. 189-94; December 2014 Connect America Order, 29 FCC Rcd at 15694-700, paras. 142-54; CAF Performance Measures Order, 33 FCC Rcd at 6531-33, paras. 60-67. These measures scale with the extent of non-compliance and include additional reporting, withholding of support, and support recovery. 47 CFR §§ 54.315(c)(4), 54.320; Phase II Auction Order, 31 FCC Rcd at 6016-18, paras. 189-94; December 2014 Connect America Order, 29 FCC Rcd at 15694-701, paras. 142-57; CAF Performance Measures Order, 33 FCC Rcd at 6531-33, paras. 60-67. A defaulting support recipient may also be subject to sanctions, including, but not limited to, potential revocation of ETC designations and suspension or debarment. 47 CFR § 54.320; Phase II Auction Order, 31 FCC Rcd at 6018, para. 194. ETC Obligations. All Auction 903 support recipients were required to obtain a high-cost ETC designation prior to being authorized for Auction 903 support, and thus should be familiar with ETC requirements. For example, all high-cost ETCs commit to serving the entire area covered by an ETC designation and must offer Lifeline voice and broadband service throughout such area to qualifying low-income consumers pursuant to the Lifeline program rules. See 47 CFR §§ 54.101(d), 54.405(a); 47 CFR Subpart E. While an Auction 903 support recipient was not required to obtain an ETC designation that was limited only to the eligible census blocks covered by its winning bids, it may only use its Auction 903 support to offer the required voice and broadband services to locations in eligible census blocks. If an Auction 903 support recipient has obtained an ETC designation that covers more area than the eligible census blocks in its winning bids, that support recipient has the obligation to provide Lifeline services throughout its designated service area, including in areas where it cannot use its Auction 903 support. For example, some Auction 903 support recipients may have obtained an ETC designation for an entire census block group(s) that was covered by its winning bid(s) but may only use its Auction 903 support to offer service to locations in the eligible census blocks within the census block group(s). A high-cost ETC may also be subject to state-specific requirements imposed by the state that designated it as an ETC. Discontinuance of Service and/or Relinquishment of Support. It is a violation of Commission rules to receive universal service support if that support is not used to provide, maintain, and upgrade voice and/or broadband facilities and services in eligible areas or if the recipient is no longer offering supported services. A carrier that cannot appropriately use universal service support must relinquish its ETC designation pursuant to section 214(a) of the Act and section 54.205 of the Commission’s rules. 47 U.S.C. § 214(a); 47 CFR § 54.205. The ETC must file a notice of relinquishment in WC Docket No. 09-197, Telecommunications Carriers Eligible for Universal Service Support, using the Commission’s Electronic Comment Filing System (ECFS). WCB will release an order approving the relinquishment if the relinquishing ETC demonstrates that the affected area will continue to be served by at least one ETC. 47 U.S.C. § 214(e)(4). The ETC must then send a copy of its relinquishment notice and a copy of the relinquishment order (within one week of its release) to USAC at hcorders@usac.org. A carrier that intends to discontinue service must first seek authorization to discontinue service under section 63.71 of the Commission’s rules. 47 CFR § 63.71. Transfers of Control. ETCs seeking to transfer control of their domestic authorizations to operate pursuant to section 214 of the Communications Act of 1934, as amended, or to engage in the sale of assets under section 214 must first receive approval from the Commission in accordance with sections 63.03 and 63.04 of the Commission’s rules governing the procedures for domestic transfer of control/asset applications. 47 U.S.C. § 214; 47 CFR §§ 63.03, 63.04. Transfers of control and assignments of international section 214 authorizations are separately subject to section 63.24 of the Commission’s rules. 47 CFR § 63.24. More information is available on the Commission’s website at http://www.fcc.gov/general/transfer-control. Price Cap Carrier Obligations. Price cap carriers that serve the census blocks where an Auction 903 long-form applicant that is not the incumbent price cap carrier has been authorized to receive support will no longer have a federal high-cost ETC obligation to continue to offer voice service in those census blocks pursuant to the forbearance granted in the December 2014 Connect America Order. In the first month that support is disbursed to an authorized Auction 903 support recipient that is not the incumbent price cap carrier, the incumbent price cap carrier will be immediately relieved of its federal high-cost ETC obligation to offer voice telephony in those specific census blocks. December 2014 Connect America Fund Order, 29 FCC Rcd at 15663–71, paras. 50–70; see also 47 CFR § 54.201(d)(3). We will remove these census blocks from the list of census blocks where price cap carriers continue to have the federal high-cost ETC obligation to provide voice service. The “List of Census Blocks Subject to Federal High-Cost Voice Obligations” is available at https://www.fcc.gov/encyclopedia/price-cap-resources. Transitioning Legacy Support. WCB will soon update the list of census blocks where incumbent price cap carriers will continue to receive legacy support by removing the eligible census blocks that are covered by the winning bids in Attachment A. Incumbent price cap carriers were also given the option of declining legacy support in each state that they serve. See Wireline Competition Bureau Announces Universal Service Support Amounts Offered to Price Cap Carriers and Fixed Competitive Eligible Telecommunications Carriers after Authorization of Connect America Phase II Auction Support, Public Notice, 34 FCC Rcd 1296 (WCB 2019). Incumbent price cap carriers will no longer receive legacy support in the eligible census blocks covered by the winning bids in Attachment A beginning on the first day of the next month. Connect America Fund, WC Docket No. 10-90, Report and Order, FCC 19-8, at 5-6, paras. 14-15 (Feb. 15, 2019) (stating that price cap carriers will no longer receive legacy support for the census blocks where Auction 903 support is authorized beginning on the first day of the month after the Auction 903 support is authorized for those census blocks). Further Information Contact: Press Information (202) 418-0500 General Universal Service Information Wireline Competition Bureau, Telecommunications Access Policy Division Alexander Minard Lauren Garry Katie King Heidi Lankau (202) 418-7400 Universal Service Administrative Company Stephen Snowman (202) 263-1600 Auction 903 Information General Auction Information, Process, and Procedures Post-Auction Rules, Policies, and Regulations Office of Economics and Analytics, Auctions Division (717) 338-2868 Rural Broadband Auctions Task Force Michael Janson, (202) 418-0627 Kirk Burgee, (202) 418-1599 Jonathan McCormack, (202) 418-1065 Audra Hale-Maddox, (202) 418-0794 Office of Economics and Analytics, Auctions Division (202) 418-0660 Small Businesses Additional information for small and disadvantaged businesses Office of Communications Business Opportunities (202) 418-0990 http://www.fcc.gov/ocbo/ Accessible Formats Braille, large print, electronic files, or audio format for people with disabilities Consumer and Governmental Affairs Bureau (202) 418-0530 or (202) 418-0432 (TTY) fcc504@fcc.gov FCC Internet Sites http://www.fcc.gov www.fcc.gov/auction/903 This Public Notice contains the following Attachment: Attachment A: Authorized Long-Form Applicants and Winning Bids -FCC- 2