Federal Communications Commission DA 21-54 DA 21-54 Released: January 14, 2021 CONNECT AMERICA FUND PHASE II AUCTION SUPPORT AUTHORIZED FOR NEW YORK WINNING BIDDER WC Docket No. 10-90 By this Public Notice, the Wireline Competition Bureau (WCB) authorizes Connect America Fund (CAF) Phase II support for the New York winning bidder identified in Attachment A of this Public Notice. For the winning bidder identified in Attachment A, we have reviewed the long-form application information, including the letter of credit and Bankruptcy Code opinion letter from the long-form applicant’s legal counsel. 47 CFR § 54.315(b)(6)(v); Connect America Fund Phase II Support for a New York Winning Bidder Ready to Be Authorized, WC Docket No. 10-90, Public Notice, DA 20-1508 (WCB 2020) (Slic Second Ready to Authorize Public Notice). This application concerns CAF Phase II support awarded to Slic Network Solutions for additional census blocks and locations in New York. See generally Connect America Fund, Order, 35 FCC Rcd 10012 (WCB 2020). Based on the representations and certifications in the relevant long-form application, we authorize support for the winning bid listed in Attachment A. In Attachment A, we also include a summary that provides for the long-form applicant: (1) the total support amount over 10 years and number of locations that the long-form applicant is being newly authorized in New York; (2) the number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency; and (3) the eligible census blocks included in the winning bid that are being authorized. A New York winning bidder that deploys to fewer locations than determined by the CAM may have its total support reduced. See Connect America Fund, Order, 32 FCC Rcd 968, 988, para. 55 (2017) (New York Auction Waiver Order). 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 the 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 CAF Phase II auction support recipients, including recipients of CAF Phase II support through New York’s New NY Broadband Program. We apply the Commission’s recent CAF II Auction Recipients’ Deployment and Reporting Deadlines Aligned Order (Alignment 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., Order, 35 FCC Rcd 109, 109 (WCB 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, including recipients of CAF Phase II support through New York’s New NY Broadband Program, are subject to the following deadlines: Alignment 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. New York winning bidders are required to file location information with USAC through the High-Cost Universal Broadband (HUBB) portal. 47 CFR § 54.316(a)(4); New York Auction Waiver Order, 32 FCC Rcd at 988, 993, paras. 54, 69; Phase II Auction Order, 31 FCC Rcd at 6010-11, para. 172. This information includes geolocation data for each qualifying location to which they are offering the requisite service and the technology the winning bidder 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/hc/annual-requirements/hubb.aspx. · Service milestones. As a result of the recent Alignment Order, January 1, 2020 is the commencement of the deployment timeline for all CAF Phase II auction 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, including recipients of CAF Phase II support through New York’s New NY Broadband Program, 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 Alignment 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 auction 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. The long-form applicant authorized in this Public Notice will be required to file its 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; New York Auction Waiver Order, 32 FCC Rcd at 993, para. 70. 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 High Cost Forms, FCC Form 481, http://www.usac.org/hc/tools/forms.aspx. 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, WC Docket No. 10-90, Order on Reconsideration, FCC 19-104 (Oct. 31, 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: 54.314 Certification, https://www.usac.org/hc/annual-requirements/certification/54314-certification.aspx (last visited March 12, 2019). 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. 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 recipients of CAF Phase II auction support 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 support recipients were required to obtain a high-cost ETC designation prior to being authorized for Phase II 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 a New York winning bidder that receives support 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 Phase II support to offer the required voice and broadband services to locations in eligible census blocks. If a New NY Broadband Program participant receiving Phase II support 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 Phase II support. For example, some CAF Phase II support recipients in New York 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 Phase II 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 a CAF Phase II auction support recipient 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 winning bidder 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 CAF Phase II auction support is authorized beginning on the first day of the month after the CAF Phase II auction support is authorized for those census blocks). For additional information on this proceeding, contact Stephen Wang (Stephen.Wang@fcc.gov) of the Wireline Competition Bureau, Telecommunications Access Policy Division, (202) 418-7400. This Public Notice contains the following Attachment: Attachment A: Authorized Long-Form Applicant and Winning Bid -FCC- 2