Federal Communications Commission DA 22-317 DA 22-317 Released: March 25, 2022 RURAL DIGITAL OPPORTUNITY FUND SUPPORT FOR 557 WINNING BIDS READY TO BE AUTHORIZED Listed Auction 904 Long-Form Applicants Must Submit Letters of Credit and Bankruptcy Code Opinion Letters by April 8, 2022 AU Docket No. 20-34 WC Docket No. 19-126 WC Docket No. 10-90 By this Public Notice, the Rural Broadband Auctions Task Force (RBATF), Wireline Competition Bureau (WCB or Bureau), and the Office of Economics and Analytics (OEA) announce they are ready to authorize Rural Digital Opportunity Fund (Auction 904) support for the Auction 904 winning bids identified in Attachment A of this Public Notice. To be authorized to receive the total 10-year support amounts listed in Attachment A, the long-form applicants identified in that attachment are required to submit acceptable irrevocable stand-by letter(s) of credit and Bankruptcy Code opinion letter(s) from their legal counsel for each state where they have winning bids that are ready to be authorized in accordance with the instructions provided below by the applicable deadline – prior to 6:00 p.m. ET on April 8, 2022. See 47 CFR § 54.804(b)(6)(v); Rural Digital Opportunity Fund Phase I Auction Scheduled for October 29, 2020; Notice and Filing Requirements and Other Procedures for Auction 904, AU Docket No. 20-34 et al., Public Notice, 35 FCC Rcd 6077, 6177, para. 319 (2020) (Auction 904 Procedures Public Notice) (“No later than 10 business days after the release of the public notice, a long-form applicant must obtain one irrevocable standby letter of credit at the value specified in section 54.804(c)(1) from a bank acceptable to the Commission as set forth in section 54.804(c)(2) for each state where the long-form applicant is seeking to be authorized.”). On December 7, 2020, we announced that there were 180 winning bidders in the auction and established the deadlines for winning bidders to submit their long-form applications for Rural Digital Opportunity Fund support. Rural Digital Opportunity Fund Phase I Auction (Auction 904) Closes; Winning Bidders Announced; FCC Form 683 Due January 29, 2021, AU Docket No. 20-34 et al., Public Notice, 35 FCC Rcd 13888 (WCB and OEA 2020) (Auction 904 Closing Public Notice). Winning bidders had the opportunity to assign some or all of their winning bids to related entities by December 22, 2020. Id. at 13890-91, paras. 9-14. All winning bidders that retained their winning bids and all related entities that were assigned winning bids were required to submit long-form applications by January 29, 2021. Id. at 13892-93, para. 16. On February 18, 2021, we announced that there were 417 long-form applicants. 417 Long-Form Applicants in the Rural Digital Opportunity Fund Phase I Auction (Auction 904), Public Notice, DA 21-170 (WCB and OEA Feb. 18, 2021) (Auction 904 Long-Form Applicants Public Notice). We have reviewed the long-form applications associated with each of the winning bids identified in Attachment A. These applications were reviewed to determine whether they met all legal, financial, and technical requirements. Based on the representations and certifications in each relevant long-form application, we are prepared to authorize support, subject to submission of the required letter(s) of credit and Bankruptcy Code opinion letter(s), for each of the winning bids identified in Attachment A. See 47 CFR § 54.804(b)(6)(v). We remind all applicants that an ETC satisfies its obligation to “offer” qualifying services by being legally responsible for dealing with customer problems, providing quality of service guarantees, and meeting universal service fund-related requirements. Accordingly, a broadband provider may satisfy its voice obligations by offering voice service through an affiliate or by offering a managed voice solution (including VoIP) through a third-party vendor, but a provider cannot simply rely on the availability of over-the-top voice options to satisfy this obligation. Auction 904 Procedures Public Notice, 35 FCC Rcd at 6129, para. 139. The support amounts listed in Attachment A are subject to change. On July 26, 2021, the RBATF, WCB, and OEA sent a letter to certain long-form applicants that identified census blocks where concerns of existing service or questions of potential waste had been raised, and informed applicants that if they no longer wished to pursue support for a winning bid they should identify those census block groups with a brief explanation of their decision to default on their bid(s). See “Letters to Long-Form Applicants about Identified Census Blocks,” https://www.fcc.gov/auction/904/releases. Support amounts will be adjusted for applicants that defaulted on the identified census blocks. Until these adjusted support amounts are provided, we encourage long-form applicants to obtain letters of credit that cover the full amount of support indicated in Attachment A. Pursuant to section 54.804(b)(6)(v) of the Commission’s rules, the long-form applicants identified in Attachment A that may be authorized to receive Rural Digital Opportunity Fund auction support must submit irrevocable stand-by letters of credit, issued in substantially the same form as set forth in the model letter of credit provided in Appendix C of the Rural Digital Opportunity Fund Order, Rural Digital Opportunity Fund Order, 35 FCC Rcd at 773-77, Appx. C. by a bank that is acceptable to the Commission by 6:00 p.m. ET on April 8, 2022. The Commission’s rules list specific requirements for a bank to be acceptable to the Commission to issue the letter of credit. Those requirements vary for United States banks and non-U.S. banks. See 47 CFR § 54.804(c)(2); Rural Digital Opportunity Fund Order, 35 FCC Rcd at 732, para. 107. Prior to submitting their letters of credit, we encourage long-form applicants to view and share with their issuing banks the letter of credit resources available on USAC’s website: https://www.usac.org/high-cost/funds/rural-digital-opportunity-fund/. A separate letter of credit must be submitted for each state where the long-form applicant has winning bids that are ready to be authorized, in an amount equal to at least the first year of support in the state. Rural Digital Opportunity Fund Order, 35 FCC Rcd at 732-33, paras. 107-08. The value of the letter of credit must increase each year until it has been verified that the support recipient has met certain milestones, as described in more detail in section 54.804(c)(1) of the Commission’s rules. 47 CFR § 54.804(c)(1)(i)-(vii); Rural Digital Opportunity Fund Order, 35 FCC Rcd at 729-31, paras. 98-104. In addition, a long-form applicant is required to provide with the letter of credit an opinion letter from outside legal counsel clearly stating, subject only to customary assumptions, limitations, and qualifications, that, in a proceeding under the Bankruptcy Code, the bankruptcy court would not treat the letter of credit or proceeds of the letter of credit as property of the long-form applicant’s bankruptcy estate, or the bankruptcy estate of any other bidder-related entity requesting issuance of the letter of credit, under section 541 of the Bankruptcy Code. 11 U.S.C. § 541; 47 CFR § 54.804(c)(3); Rural Digital Opportunity Fund Order, 35 FCC Rcd at 735, para. 113. By future public notice, we will authorize support for specific winning bids for which all requirements, including submission of the letter of credit and opinion letter, have been met. Details concerning the next steps are set forth below. Instructions for Submission of Letter of Credit and Opinion Letter Long-form applicants identified in Attachment A of this Public Notice must submit letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids identified in Attachment A. The minimum amount of the first letter of credit for each state is determined by adding up the first year of support listed in Attachment A for each winning bid in the state. Each letter of credit and opinion letter submitted to the Universal Service Administrative Company (USAC) must reference the relevant study area code as listed in Attachment A. A long-form applicant should: · Submit the hard copy of the letter of credit and opinion letter to USAC by 6:00 p.m. ET on April 8, 2022, at the following address: Universal Service Administrative Company (USAC), High Cost Program, Rural Digital Opportunity Fund LOC, Attn: Stephen Snowman, 700 12th Street, NW, Suite 900, Washington, DC 20005; · Submit an electronic copy of its original letter of credit and opinion letter to hcinfo@usac.org and OGC-LOC@usac.org by the deadline to ensure that they are timely filed. Note: 1) the electronic copies should be scanned versions of the hard copies mailed to USAC, which should be signed and include Annex A, B, & C, as shown in the model letter of credit, Rural Digital Opportunity Fund Order, 35 FCC Rcd at 773-77, Appx. C. 2) electronic copies are used for the purpose of determining the timeliness of submissions, 3) thus, USAC will only review the mailed, hard copies of the letters of credit and opinion letters, not the electronic copies; · Expect to receive feedback from USAC on letters of credit within approximately 10 days of USAC’s receipt of the hard copies; · Avoid sending additional documents until the applicant has received feedback from USAC. If an applicant notices an error in its letter of credit or bankruptcy opinion letter prior to receiving feedback from USAC, do not send USAC a revised copy of the relevant document. Instead, applicants should wait to receive feedback from USAC and then make their corrections to the version of the document they send back to USAC that also incorporates any USAC feedback. A copy of the letter of credit and opinion letter must also be submitted in the FCC Auction System by the applicable deadline—prior to 6:00 p.m. ET on April 8, 2022. An applicant must provide this required information in two attachments. The letter of credit attachment should be uploaded using the “Letter of Credit” attachment type, and the opinion letter attachment should be uploaded using the “Letter of Credit Opinion Letter” attachment type. Each attachment must be uploaded within the applicant’s long-form application to each relevant winning bid identified in Attachment A of this Public Notice. Such attachments will be treated as confidential trade secrets and/or commercial information and withheld from routine public inspection. Auction 904 Closing Public Notice, 35 FCC Rcd at 13899, para. 28. If a request for public inspection under section 0.461 is made for the long-form applicant’s letter of credit or opinion letter, the long-form applicant will have an opportunity to object to disclosure and justify the continued confidential treatment of the information. 47 CFR §§ 0.459, 0.461. As such, a long-form applicant need not submit a separate section 0.459 confidentiality request for this information with its FCC Form 683. 47 CFR § 0.459. Any long-form applicant identified in Attachment A that fails to file the required documents 47 CFR § 54.804(b)(6)(v). for any of the identified winning bids by the applicable deadline – prior to 6:00 p.m. ET on April 8, 2022 – will be in default on such bid(s) and subject to forfeiture. Rural Digital Opportunity Fund Order, 35 FCC Rcd at 735-36, paras. 114-17; Auction 904 Procedures Public Notice, 35 FCC Rcd at 6178, paras. 321-22 (2020). Further Information Contact: Technical Support Electronic Filing Auction Application System FCC Auctions Technical Support Hotline (877) 480-3201, option nine; or (202) 4141250 (202) 414-1255 (TTY) Hours of service: 8:00 a.m. – 6:00 p.m. ET, Monday through Friday Press Information Office of Media Relations Anne Veigle, (202) 418-0506 General Universal Service Information Wireline Competition Bureau, Telecommunications Access Policy Division Lauren Garry Heidi Lankau (202) 418-7400 Auction904@fcc.gov Universal Service Administrative Company Stephen Snowman (202) 414-2725 Auction 904 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 Audra Hale-Maddox, (202) 418-0794 Jonathan McCormack, (202) 418-1065 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 fcc504@fcc.gov FCC Internet Sites http://www.fcc.gov https://www.fcc.gov/auction/904 This Public Notice contains the following Attachment: Attachment A: Ready to Authorize Long-Form Applicants and Winning Bids -FCC- 5