Federal Communications Commission	DA 21-718


DA 21-718
Released:  June 21, 2021

WIRELINE COMPETITION BUREAU AUTHORIZES STAGE 2 SUPPORT FOR PUERTO RICO TELEPHONE COMPANY AND LIBERTY COMMUNICATIONS OF PUERTO RICO
WC Docket Nos. 18-143, 10-90

	By this Public Notice, the Wireline Competition Bureau (Bureau) authorizes $127,095,163.96 in Bringing Puerto Rico Together “Bringing Puerto Rico Together” is the translation of “Uniendo a Puerto Rico.”
 Fund Stage 2 support for the winning proposals from Puerto Rico Telephone Company, Inc. (PRTC) and Liberty Communications of Puerto Rico, LLC (Liberty) to provide fixed voice and broadband services for the 10-year period identified in Attachment A of this Public Notice. The Uniendo a Puerto Rico Fund and the Connect USVI Fund, Order, WC Docket Nos. 18-143, 10-90, 14-58, 34 FCC Rcd 9109 (2019) (PR-USVI Stage 2 Order); Wireline Competition Bureau Announces Winning Applicants for Uniendo a Puerto Rico Fund Stage 2 Competitive Process, Public Notice, 35 FCC Rcd 12699 (WCB 2020) (PR Winners Public Notice).  Following the Bureau’s Public Notice announcing the winners of the Stage 2 competitive process, PRTC sought Commission view of the Bureau’s action.  Puerto Rico Telephone Company, Inc. d/b/a Claro’s Application for Review, WC Docket Nos. 18-143, 10-90 (filed Dec. 2, 2020).  Because the Bureau’s Public Notice was not “the ‘consummation’ of the agency’s decision making process,” but rather an interlocutory action that triggered new filing requirements with which the winners must comply before support can be authorized, the Application for Review was not timely.  See Jet Fuel Broadcasting et al., Memorandum Opinion and Order, 29 FCC Rcd 2471, 2471-72, para. 2 (2014) (quoting Bennett v. Spear, 520 US.S. 154, 177-78, 117 S. Ct. 1154, 1168 (1997)).  With the issuance of this Public Notice authorizing support to winning applicants, PRTC’s Application for Review is now timely and is currently under review.

In the PR-USVI Stage 2 Order, the Commission adopted a competitive proposal process to award fixed support over a 10-year period to ensure the continued expansion and improvement of fixed voice and broadband service in each of the 78 municipios of the Commonwealth of Puerto Rico. PR-USVI Stage 2 Order, 34 FCC Rcd at 9114-33, paras. 11-37.
  Based on the applications received for the Stage 2 competitive process prior to the application deadline, the Bureau announced PRTC and Liberty as the two winning applicants eligible for high-cost support based on their proposals receiving the lowest overall scores for price, network performance, and redundancy and resiliency. See Uniendo a Puerto Rico Fund and Connect USVI Fund Notice and Filing Requirements and Other Procedures for Stage 2 Fixed Competitive Proposal Process, Public Notice, WC Docket Nos. 18-143, 10-90, 35 FCC Rcd 218, 220, 252-55, paras. 2, 124-34 (2020) (Procedures Public Notice) (explaining scoring of proposals based on price per location, network performance, and resilience and redundancy information provided by eligible applicants).  
  Liberty was the winning applicant in 43 of Puerto Rico’s 78 municipios, covering over 914,000 locations, and PRTC was the winning applicant in the other 35 municipios, covering over 308,000 locations. PR Winners Public Notice, 35 FCC Rcd at 12705-06, Attach. A.
  As part of the competitive process, the Bureau also reviewed other application information, including PRTC’s and Liberty’s submitted financial information and their proposed network designs (as certified by a professional engineer) to meet the program’s service requirements to offer voice service and broadband service with downstream speeds of more than 100 Megabits per second. Procedures Public Notice, 35 FCC Rcd at 233-38, paras. 54-64; PR Winners Public Notice, 35 FCC Rcd at 12699, para. 1.
  Based on its review, the Bureau announced PRTC and Liberty as the winning applicants for each municipio identified in Attachment A. PR Winners Public Notice, 35 FCC Rcd at 12705-06, Attach. A.
  
For the winning proposals previously announced by the Bureau and identified in Attachment A, we have conducted additional reviews of PRTC’s and Liberty’s letters of credit from an eligible bank, Bankruptcy Code opinion letter, documentation of Eligible Telecommunications Carrier designation, and Disaster Preparation and Response Plans (DPRP) committing to methods and procedures that will be used to prepare for and respond to future disasters. A winning applicant must submit for the Bureau’s approval a Disaster Preparation and Response Plan that commits to the methods and procedures that the applicant will use, during the period for which it receives Stage 2 support, to prepare for and respond to disasters in Puerto Rico.  47 CFR § 1515; PR-USVI Stage 2 Order, 34 FCC Rcd at 9174-76, paras. 134-38.

	Based on the representations and certifications in PRTC’s and Liberty’s applications, and the Bureau’s approval of their respective DPRPs, we authorize Stage 2 support for the municipios listed in Attachment A. As discussed further herein, PRTC will no longer receive frozen high-cost support for the municipios where it is the authorized winning applicant.  See PR-USVI Stage 2 Order, 34 FCC Rcd at 9156, para. 87.
  In the attachment, we provide the total support amount over 10 years that PRTC and Liberty are being authorized for each municipio for which it is the winning applicant and the total number of locations to which the support recipient must offer the required voice and broadband services for each performance tier and latency accepted in its winning proposal. The total number of required locations to which PRTC may be adjusted following the mandatory one-year and voluntary five-year location adjustment processes for the Stage 2 term.  PR-USVI Stage 2 Order, 34 FCC Rcd at 9144-46, paras. 63-66; The Uniendo a Puerto Rico Fund and Connect USVI Fund Notice and Filing Requirements and Other Procedures for Stage 2 Fixed Competitive Proposal Process, Public Notice, 35 FCC Rcd 218, 223-24, para. 12 (2020).

	We direct and authorize the Universal Service Administrative Company (USAC), upon issuance of this Public Notice, to obligate and disburse from the Universal Service Fund the amounts identified in Attachment A to PRTC and Liberty for the municipios specified.  USAC will make disbursement payments to the accounts on file for the 498 ID associated with the study area code.  USAC will disburse the support in 120 monthly payments, which will begin next month.  Based on this authorization of support to PRTC and Liberty, and consistent with the Procedures Public Notice, the Bureau will soon make available to the public the final proposal scores for the Bringing Puerto Rico Together Fund and certain application information. Procedures Public Notice, 35 FCC Rcd at 241-43, 257, paras. 82-86, 143.  The proposal scores and certain application information will soon be made publicly available through the Commission’s ECFS System and the Bureau’s webpage for the Bringing Puerto Rico Together Fund: https://www.fcc.gov/uniendo-puerto-rico-and-connect-usvi-fund-stage-2.

	Below, we provide a summary of the various obligations of authorized Stage 2 support recipients.  This summary is not comprehensive, and PRTC and Liberty are each responsible for compliance with its legal obligations, including universal service fund requirements and the Commission’s rules.
	Summary of Obligations and Relevant Dates.  The following dates are applicable to the Stage 2 support recipient that is being authorized for support by this Public Notice.
· Annual reporting of location information.  Stage 2 support recipients are required to file location information with USAC through the High-Cost Universal Broadband (HUBB) portal. 47 CFR § 54.316(a)(7).  The Bureau expects to obtain approval from the Office of Management and Budget for these recordkeeping requirements prior to the deadlines for submitting the requisite information.
  This information includes geolocation data for each qualifying location to which they are offering the requisite service and the technology the Stage 2 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); PR-USVI Stage 2 Order, 34 FCC Rcd at 9149, para. 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 geographic areas covered by each applicant’s winning proposals.  See 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.  While the Commission encourages reporting on a rolling basis, the first deadline for the long-form applicants being authorized in this Public Notice to submit their location data is on or before March 1, 2022. Location data are due by the last business day of the second calendar month following the relevant support year.  47 CFR § 54.316(b)(7); PR-USVI Stage 2 Order, 34 FCC Rcd at 9143-44, 9149, paras. 61, 73.
  Support recipients must continue to report this information on or before the last business day of each February in each subsequent year 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/.
· Service milestones.  A Stage 2 support recipient must complete construction and begin commercially offering service to 40 percent of the requisite number of the locations in its service territory by the end of the third year of funding and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. 47 CFR § 54.1506; PR-USVI Stage 2 Order, 34 FCC Rcd at 9143-44, para. 61. 
  The service milestones for the winning applicant authorized by this Public Notice are as follows:
Percentage of Locations in the Territory
Service Milestone Deadline
40
December 31, 2024
60
December 31, 2025
80
December 31, 2026
100
December 31, 2027

By the last business day of the second calendar month following each relevant service milestone, a Stage 2 support recipient must file a certification in the HUBB portal that it has met its service milestone and is meeting the requisite public interest obligations. 47 CFR § 54.316(b)(4); PR-USVI Stage 2 Order, 34 FCC Rcd at 9149-50, para. 73.
  Based on the authorization of support by this Public Notice, an ETC must file its certifications in the HUBB portal by March 1 following each service milestone listed above.
If an ETC is unable to meet a service milestone, it must notify the Commission, USAC, and the relevant local regulatory authority 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).
  As with repeated warnings to other high-cost support recipients of the Connect America Fund, the Commission has stated 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.  PRTC and Liberty will be required to file their first annual section 54.313 report by July 1, 2022 and each subsequent year until the year after their support terms have ended. 47 CFR § 54.313(e).
  Annual reports are filed with USAC. 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 54.1507 of the Commission’s rules. 47 CFR § 54.309.
  The Commission has adopted a uniform framework to measure and report on the performance of ETCs’ service. PR-USVI Stage 2 Order, 34 FCC Rcd at 9149, para.73 & n. 271; Performance Measures for Connect America High-Cost Universal Service Support Recipients, Order, 33 FCC Rcd 6509 (WCB/WTB/OET 2018) (CAF Performance Measures Order); Performance Measures for Connect America High-Cost Universal Service Support Recipients, Order on Reconsideration, 34 FCC Rcd 10109 (2019); 47 CFR § 54.313(a)(6).

· Annual section 54.314 certification.  The annual section 54.314 certification is due for PRTC and Liberty 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 the Commonwealth, that local regulatory authority must certify on the support recipient’s behalf “that all federal high-cost support provided . . . within [the Commonwealth] 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).  
    
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.

Location Adjustment Process.  The Bureau anticipates the adjustment window, including the stakeholder comment period, to open one year following this public notice authorizing support to the winning applicants.  By the window closing date, if a winning applicant cannot identify actual locations totaling the number identified in Attachment A, it must file and certify its proposed actual location number and all relevant supporting information, including maps, studies, certifications, and any other evidence with the Bureau.  The winning applicants must include geolocation data indicating the latitude and longitude and address for each actual location it can identify for each winning area.  If a winning applicant does not need to adjust its deployment obligation, it must file a certification with the Bureau by the close of the adjustment window certifying to that effect and accepting the number of locations the Bureau previously announced.
Disaster Preparation and Response Plans.    A winning applicant has the obligation to provide the Bureau with an updated DPRP within ten business days of making any material change, and for as long as it receives Stage 2 support. The failure to update the DPRP may result in withholding of support. 47 CFR § 54.1515(c).

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. Id. § 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 Stage 2 support. 47 CFR §§ 54.1508(e), 54.320; 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 §§ 54.1508(e), 54.320; 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; PR-USVI Stage 2 Order, 34 FCC Rcd at 9150, para. 74.
 
ETC Obligations.  All Stage 2 support recipients were required to obtain a high-cost ETC designation prior to being authorized for high-cost 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 Stage 2 support recipient was not required to obtain an ETC designation that was limited only to the eligible geographic areas covered by its winning proposals, it may only use its Stage 2 support to offer the required voice and broadband services to locations in awarded areas.  Based on their ETC designations, PRTC and Liberty are required to continue offering Lifeline throughout their designated ETC area, including in areas where it was not awarded Stage 2 support, absent relinquishment or forbearance. 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). 
  PRTC and Liberty may also be subject to specific requirements imposed by the Commonwealth of Puerto Rico.
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.  
Transitioning Frozen Support.  This authorization impacts the frozen high-cost support ETCs receive in Puerto Rico.  For the municipios where PRTC is the winning applicant, PRTC will only receive high-cost support in the amounts listed in Attachment A.  This award of Stage 2 support will immediately replace the frozen support PRTC previously received for the municipios listed in Attachment A, as allocated to those municipios by the Bureau. PR-USVI Stage 2 Order, 34 FCC Rcd at 9156, para. 87.
  For municipios where Liberty was selected as the winning applicant, PRTC will only receive two-thirds of the frozen support it previously received for the first 12-month period in equal monthly payments, one-third of its frozen support for the second 12-month period in equal monthly payments, and no support thereafter as listed in Attachment B. Id.

In addition to the phased down of support for PRTC, upon issuance of this Public Notice, we direct and authorize USAC to obligate and disburse transition support to WorldNet Communications, Inc. (WorldNet) from the Universal Service Fund in the amounts identified in Attachment C. Id. at para. 87, n.312.
  Beginning this month, USAC will make equal monthly disbursement payments totaling the total transition support amounts for the first 12-month period and second 12-month period provided in Attachment C to the account on file for the 498 ID associated with the study area code.  WorldNet will no longer receive support after the second 12-month period.      

Further Information Contact:
FCC Email & Webpages

ConnectAmerica@fcc.gov
http://www.fcc.gov

https://www.fcc.gov/uniendo-puerto-rico-and-connect-usvi-fund-stage-2


General Bringing Puerto Rico Together Fund and Connect USVI Fund Questions

Wireline Competition Bureau
Telecommunications Access Policy Division
Suzanne Yelen
Dangkhoa Nguyen
(202) 418-0660

Press Information
Office of Media Relations, (202) 418-0500

FCC Forms
(800) 418-3676 (outside Washington, DC) 
(202) 418-3676 (in the Washington area)
http://www.fcc.gov/formpage.html
Accessible Formats
Braille, large print, electronic files, or 
audio format for people with disabilities
Consumer and Governmental Affairs Bureau
(202) 418-0530 
fcc504@fcc.gov


Small Businesses
Additional information for small and disadvantaged businesses

Office of Communications Business Opportunities
(202) 418-0990
http://www.fcc.gov/ocbo/


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