Federal Communications Commission DA 21-1216 Before the FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 In the Matter of Connect America Fund ETC Annual Reports and Certifications Establishing Just and Reasonable Rates for Local Exchange Carriers Developing a Unified Intercarrier Compensation Regime ) ) ) ) ) ) ) ) ) ) ) WC Docket No. 10-90 WC Docket No. 14-58 WC Docket No. 07-135 WC Docket No. 01-92 ORDER Adopted: September 28, 2021 Released: September 28, 2021 By the Chief, Wireline Competition Bureau: I. INTRODUCTION 1. In this Order, we resolve, in part, a petition filed by Nucla Naturita Telephone Company (NNTC) seeking a waiver of section 54.316 of the Commission’s rules. Nucla Naturita Telephone Company Request for Waiver of Section 54.316, WC Docket No. 10-90, et. al (filed Feb. 22, 2021), https://ecfsapi.fcc.gov/file/1022254674815/NNTC%20Waiver.FINAL.pdf (NNTC Petition). See also Letter from Salvatore Taillefer, Jr., Counsel, NNTC to Marlene Dortch, Secretary, FCC, WC Docket No. 10-90 (filed May 12, 2021), https://ecfsapi.fcc.gov/file/1051227317364/NNTC.Ex%20Parte.pdf (NNTC May 2021 Ex Parte); Letter from Salvatore Taillefer, Jr., Counsel, NNTC to Marlene Dortch, Secretary, FCC, WC Docket No. 10-90 (filed June 7, 2021), https://ecfsapi.fcc.gov/file/10607751919160/NNTC.Ex%20Parte%206-7.pdf (NNTC June 2021 Ex Parte); Letter from Salvatore Taillefer, Jr., Counsel, NNTC to Marlene Dortch, Secretary, FCC, WC Docket No. 10-90 (filed August 16, 2021), https://ecfsapi.fcc.gov/file/1081536424570/NNTC.Ex%20Parte.3.pdf (August 2021 Ex Parte). See 47 CFR § 54.316. NNTC seeks a waiver to avoid non-compliance with its Connect America Fund (CAF) A-CAM filing obligations resulting from its failure to (a) timely upload certain buildout data into the HUBB and (b) certify certain location data that was properly filed in the HUBB. NNTC Petition at 1, 3; see 47 CFR § 54.316. 2. We find that NNTC has established good cause to waive our rules as to NNTC’s failure to certify location data that was timely filed in the HUBB. Accordingly, as discussed below, we grant, in part, NNTC’s petition for waiver. However, this Order does not address NNTC’s petition for waiver regarding its failure to timely upload location data into the HUBB, and that issue remains pending. II. BACKGROUND 3. In the USF/ICC Transformation Order, the Commission comprehensively reformed and modernized the high-cost component of the Universal Service Fund by, among other things, establishing the CAF to support explicitly broadband-capable networks. Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed Rulemaking, 26 FCC Rcd 17663, 17712, para. 128 (2011), aff’d sub nom., In re: FCC 11-161, 753 F.3d 1015 (10th Cir. 2014) (USF/ICC Transformation Order).  In the 2016 Rate-of-Return Reform Order, the Commission adopted significant reforms to the rules governing the provision of universal service support to rate-of-return carriers. See Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order, Order and Order on Reconsideration and Further Notice of Proposed Rulemaking, 31 FCC Rcd 3087, 3089, para. 1 (2016) (Rate-of-Return Reform Order). The Commission adopted a voluntary path by which rate-of-return carriers may elect model-based support, known as the Alternative Connect America Cost Model (A-CAM), for a term of 10 years in exchange for meeting defined build-out obligations of voice and broadband services. Id. at 3094-117, paras. 17-79. 4. NNTC is a rate-of-return carrier that has received $956,121 in annual A-CAM support to provide telecommunications services in Colorado since 2017. NNTC Petition at 2. See also Wireline Competition Bureau Announces Results of Rate-Of-Return Carriers, 31 FCC Rcd 11966, 11974, Attachment (2016); Wireline Competition Bureau Authorizes 182 Rate-Of-Return Companies to Receive $54 Million Annually in Alternative Connect America Cost Model Support to Expand Rural Broadband, Public Notice, WC Docket No. 10-90, 32 FCC Rcd 842, 845 Attachment (2017). This support is conditioned upon NNTC meeting its deployment milestones: NNTC must deploy to 40% of its total locations by December 31, 2020; to 50% of its total locations by December 31, 2021; to 60% of its total locations by December 31, 2022; to 70% of its total locations by December 31, 2023; to 80% of its total locations by December 31, 2024; to 90% of its total locations by December 31, 2025 and to 100% of its total locations by December 31, 2026. Rate-of-Return Reform Order, 31 FCC Rcd at 3100-01, para. 32; 47 CFR § 54.311(d). The Commission’s rules require A-CAM carriers, including NNTC, to report in the HUBB portal, maintained by the Universal Service Administrative Company (USAC), annually by March 1, the locations to which it deployed in the prior calendar year and certify that “by the end of the calendar year, it was offering broadband meeting the requisite public interest obligations . . . to the required percentage of its supported locations in each state.” 47 CFR § 54.316(b)(1). The Commission allowed recipients to report pre-existing locations in the HUBB to be counted towards the interim and final milestones. Rate-of-Return Reform Order, 31 FCC Rcd at 3165-66, para. 213 (setting March 1, 2019 as the deadline to file geocodes for pre-existing locations). See also Wireline Competition Bureau Provides Guidance to Carriers Receiving Connect America Fund Support Regarding Their Broadband Location Reporting Obligations, WC Docket No. 10-90, Public Notice, 31 FCC Rcd 12900, 12902 (WCB 2016) (HUBB Reporting Public Notice). 5. In February 2021, NNTC submitted a waiver petition stating that it failed to properly certify nearly 300 locations in its March 2019 HUBB filing. See NNTC Petition at 3 Specifically, NNTC uploaded 293 locations in the HUBB. However, only 11 were properly certified and 282 were not certified. Id. NNTC explains that 276 of the uncertified locations were pre-existing locations and 6 of the uncertified locations were newly-deployed locations. NNTC explained that it discovered this error during a 2021 internal review. Id. The failure to properly certify these 282 locations caused NNTC to fail to meet its first interim milestone requirement. The NNTC Petition asks the Commission to allow NNTC to certify and count towards its interim and final milestones the 282 locations that NNTC timely reported but failed to properly certify. Id. at 3-4. NNTC argues that strict compliance with the Commission’s rules is not in the public interest, because NNTC “actually had qualifying service available to a substantial portion of eligible locations, well in advance of the Commission’s milestone requirement,” and that preventing the correction would undermine the purpose of the reporting rules to track progress and determine whether the funds are being used appropriately. Id. at 4. Moreover, NNTC argues that this was simply an administrative error that should be allowed to be corrected pursuant to precedent. Id. at 3 (citing In re WCB Addresses Several Petitions Requesting Waiver of the HUBB Deadline, 34 FCC Rcd 11139 (2019) (High-Cost Waiver Order)). NNTC states there was no way for it to have known this mistake occurred until its recent internal audit, and the company argues the accuracy of the data warrants deviation from strict compliance with the Commission’s rules. Id. at 2-3. 6. In May and June 2021, NNTC met with the Wireline Competition Bureau (Bureau) to provide updated figures on the impact of its error in meeting its interim and final buildout milestones. See NNTC May 2021 Ex Parte; NNTC June 2021 Ex Parte. Specifically, NNTC explained that, if allowed to certify and count the uncertified locations towards its deployment milestones, the company easily meets and exceeds the interim milestone, and would be in compliance with the buildout requirements. See NNTC May 2021 Ex Parte at 1; NNTC June 2021 Ex Parte (stating that allowing the certification of timely-filed locations would make NNTC 154% compliant with the December 2020 milestone requirement). 7. In August 2021, NNTC provided further clarification by providing the specific list of locations it timely uploaded but did not timely certify. See NNTC August 2021 Ex Parte. This list is included in Exhibit A. III. DISCUSSION 8. Generally, the Commission’s rules may be waived for good cause shown. 47 CFR § 1.3. Good cause is shown, and waiver is appropriate, only if special circumstances warrant a deviation from the general rule, and such deviation will serve the public interest. See Standing Rock Telecommunications, Inc., Amended Request for Limited Waiver and Extension of Mobility Fund Phase I Public Interest Obligations, WT Docket No. 10-208, Order, 34 FCC Rcd 9598, 9603-04, para. 11 (WCB/WTB/OEA 2019) (Standing Rock Order); Leaco Rural Telephone Cooperative, Inc. and Pine Belt Cellular, Inc., WT Docket No. 10-208, Order, 31 FCC Rcd 9001, 9006-07, para. 15 (WTB 2016) (Leaco/Pine Belt Order); Ne. 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)); see also NetworkIP, LLC v. FCC, 548 F.3d 116, 125-128 (D.C. Cir. 2008). The Commission may, on an individual basis, take into account considerations of hardship, equity, or more effective implementation of overall policy. WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir. 1969). The Commission has consistently held that requests to waive or extend construction obligations will not be routinely granted. See Skybridge Spectrum Foundation, Order, 33 FCC Rcd 8138, 8145, para. 17 (WTB-MD 2018); Wireless Telecommunications Bureau Reminds Wireless Licensees of Construction Obligations, Public Notice, 32 FCC Rcd 4802, 4802-05 (WTB 2017). Consistent with Commission precedent, support recipients should be aware that employee issues, vendor problems, equipment issues, inclement weather, and last minute delays occur in the regular course of business, and that these circumstances alone will not support waiver of Commission deadlines. See, e.g., 1998 Biennial Regulatory Review--Streamlining of Mass Media Applications, Rules, And Processes et al., Memorandum Opinion and Order, 14 FCC Rcd 17525, 17539, para. 35 (1999) (finding that the effects of delays due to inclement weather on construction timelines are adequately overcome by a three-year construction term making additional time unwarranted); Redwood Wireless Minnesota, LLC, and Redwood Wireless Wisconsin LLC Request for a Waiver and Extension of the Broadband PCS Construction Requirements, Order, 17 FCC Rcd 22416, 22419-20 (WTB 2002) (construction delays resulting from business disputes were exercise of business judgment and were not outside Petitioner’s control); Eldorado Communications LLC Request for a Waiver and Extension of the Broadband PCS Construction Requirements, Order, 17 FCC Rcd 24613, 24616 , para. 7 (WTB 2002) (licensee’s determination to initially deploy TDMA system and subsequently to adopt GSM with months remaining before construction deadline was business decision within its control); Bristol MAS Partners Request for Extension of Time in Which to Construct and Place into Operation Multiple Address System Stations WPJF864 Through WPJF87, Order, 14 FCC Rcd 5007, 5010, para. 8 (WTB 1999) (equipment installation or delivery not delayed for some unique reason, and licensee’s failing to obtain equipment was business decision); Application for Review of Specialized Mobile Radio Station WAY-671, Licensed to AAT Electronics Corporation, Staten Island, New York, Memorandum Opinion and Order, 93 FCC 2d 1034, 1047, para. 46 (1983) (decision not to market service aggressively because of equipment uncertainties is within licensee’s control); Application for Review of Business Radio Communications Systems, Inc., Licensee of 800 MHz SMR System WZF-975, Laurel, Maryland, Memorandum Opinion and Order, 102 FCC 2d 714, 716-17, paras. 6-7 (1985) (construction delay caused by zoning challenge not a circumstance beyond licensee’s control); Application for Review of Specialized Mobile Radio Station WQA-505, Licensed to Texas Two-Way, Inc., Fort Worth, Texas, Memorandum Opinion and Order, 98 FCC 2d 1300, 1303, para. 8 (1984), aff'd sub nom., Texas Two-Way, Inc. v. FCC, 762 F.2d 138 (D.C. Cir. 1985) (licensee is responsible for the delay resulting from interference caused by construction adjacent to construction site because site selection was an independent business decision). Additionally, the Bureau has reminded recipients that it remains the carrier’s responsibility to familiarize itself with any applicable regulations and ensure that its filings are timely received, regardless of the time and method of their filings. See High-Cost Waiver Order, 34 FCC Rcd at 11146, para. 20. The Bureau now expects that, after the initial reporting and certification deadline, carriers are familiar with their reporting requirements and the HUBB interface. Id. 9. We find that NNTC has established special circumstances that warrant granting its petition, in-part, to allow certification of the locations that were timely reported but not properly certified. We have confirmed that NNTC uploaded into the HUBB all of the identified locations by March 1, 2019. Additionally, based on consultations with USAC, we believe that NNTC mistakenly certified only the first page of its location submission instead of certifying each page of its submission. Because each page in the HUBB system only displays up to ten entries, certifying the first page meant that NNTC only properly certified the first ten entries (representing 11 locations) instead of the intended 282 locations reflected in the entire submission. As NNTC did in fact timely upload the remaining 282 locations in the HUBB database, and certified some of the reported locations, we find that NNTC made a good faith effort to timely certify all reported locations. 10. We agree with NNTC that strict compliance with Commission rules in this case does not serve the public interest. The certification error appears to be an inadvertent administrative oversight discovered through proactive internal review by the company, and NNTC took immediate action to resolve the error by contacting USAC and filing a waiver petition with the Commission. NNTC Petition at 3. Most importantly, NNTC uploaded these 282 locations into the HUBB by the March 1 deadline. Compliance with the Commission’s location filing deadlines is critical to ensuring that the Commission can accurately track broadband deployment and can update the CAF Broadband map, which allows the public to see where broadband deployment has occurred in the prior year. Accordingly, we believe NNTC has demonstrated good cause to allow all 282 timely-filed locations to be certified and to be counted towards NNTC’s interim and final milestones. 11. Therefore, we conclude that the public interest will be served by granting, in part, NNTC’s petition and waiving Commission rules to the extent described herein. See Connect America Fund; ETC Annual Reports and Certifications, WC Docket Nos. 10-90, 14-58, Order, 32 FCC Rcd 968, 975-76, para. 21 (2017). See also USF/ICC Transformation Order, 26 FCC Rcd at 17701, para. 103 (“[A]ll broadband obligations for fixed broadband are conditioned on not spending the funds to serve customers in areas already subsidized by an ‘unsubsidized competitor.’”). NNTC’s petition for waiver regarding its failure to timely upload location data into the HUBB remains pending. IV. ORDERING CLAUSES 12. Accordingly, IT IS ORDERED that, under the authority contained in sections 1, 2, 4(i), 5, 10, 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 323, and 603 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i), 155, 160, 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403, 503, 1302, and sections 1.1 and 1.3 of the Commission’s rules, 47 CFR §§ 1.1, 1.3, the Nucla Naturita Telephone Company Request for Waiver of Section 54.316, as discussed herein, is hereby GRANTED IN PART. 13. IT IS FURTHER ORDERED that a copy of this Order SHALL BE transmitted to the Universal Service Administrative Company. 14. IT IS FURTHER ORDERED that, under section 1.103(a) of the Commission’s rules, 47 CFR § 1.103(a), this Order SHALL BE effective upon release. FEDERAL COMMUNICATIONS COMMISSION Kris A. Monteith Chief Wireline Competition Bureau 2 Exhibit A HUBB ID Number 28648509 28648552 28648595 28648643 28648690 28648510 28648553 28648596 28648644 28648691 28648511 28648554 28648597 28648645 28648692 28648512 28648555 28648598 28648646 28648693 28648513 28648556 28648600 28648647 28648694 28648514 28648557 28648601 28648649 28648695 28648516 28648558 28648602 28648650 28648696 28648517 28648560 28648603 28648651 28648697 28648518 28648561 28648604 28648653 28648699 28648519 28648562 28648605 28648655 28648700 28648520 28648563 28648606 28648656 28648701 28648521 28648564 28648607 28648657 28648702 28648522 28648565 28648608 28648658 28648703 28648523 28648566 28648610 28648659 28648704 28648524 28648567 28648611 28648660 28648705 28648525 28648568 28648612 28648661 28648706 28648526 28648569 28648613 28648662 28648707 28648527 28648570 28648614 28648664 28648709 28648528 28648571 28648615 28648665 28648710 28648529 28648572 28648616 28648666 28648711 28648530 28648573 28648617 28648668 28648712 28648531 28648574 28648618 28648669 28648714 28648532 28648575 28648619 28648670 28648715 28648533 28648576 28648620 28648671 28648654 28648534 28648577 28648621 28648672 28648663 28648535 28648578 28648622 28648673 28648667 28648536 28648579 28648623 28648674 28648698 28648537 28648580 28648626 28648675 28648708 28648538 28648581 28648627 28648676 28648713 28648539 28648582 28648628 28648677 28648540 28648583 28648629 28648678 28648541 28648584 28648630 28648679 28648542 28648585 28648631 28648680 28648543 28648586 28648632 28648681 28648544 28648587 28648633 28648682 28648545 28648588 28648635 28648683 28648546 28648589 28648636 28648684 28648547 28648590 28648637 28648685 28648548 28648591 28648638 28648686 28648549 28648592 28648639 28648687 28648550 28648593 28648640 28648688 28648551 28648594 28648641 28648689