[Federal Register Volume 85, Number 55 (Friday, March 20, 2020)]
[Rules and Regulations]
[Pages 15982-15999]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05508]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket Nos. 18-143, 10-90, 14-58; DA 20-133; FRS 16538]
The Uniendo a Puerto Rico Fund and the Connect USVI Fund, Connect
America Fund, ETC Annual Reports and Certifications
AGENCY: Federal Communications Commission.
ACTION: Final action; requirements and procedures.
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SUMMARY: In this document, the Wireline Competition Bureau (the Bureau)
establishes procedures for the Uniendo a Puerto Rico Fund and the
Connect USVI Fund Stage 2 Competition (PR-USVI Stage 2 Competition,
Stage 2 Competition, or the Competition).
DATES: The PR-USVI Stage 2 Competition applications will not be due
earlier than 30 days following the announcement of the application
form's approval from the Office of Management and Budget. The Bureau
will release a public notice announcing the application deadline.
FOR FURTHER INFORMATION CONTACT: Alexander Minard, Wireline Competition
Bureau, (202) 418-7400 or TTY: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Bureau's Public
Notice in WC Docket Nos. 18-143, 10-90, 14-58; DA 20-133, released on
February 5, 2020. The full text of this document is available for
public inspection during regular business hours in the FCC Reference
Center, Room CY-A257, 445 12th Street SW, Washington, DC 20554 or at
the following internet address: https://www.fcc.gov/document/uniendo-puerto-rico-fund-and-connect-usvi-fund-procedures-pn.
[[Page 15983]]
I. General Information
A. Introduction
1. The Bureau established procedures for the PR-USVI Stage 2
Competition, thus furthering the Commission's goal of closing the
digital divide for all Americans, including those in non-contiguous
areas of our country. The Stage 2 Competition will award up to $691.2
million annually for 10 years to service providers that commit to offer
voice and broadband services to all fixed locations in the Commonwealth
of Puerto Rico and the U.S. Virgin Islands (USVI) (together, the
``Territories''). The Bureau will release an application form and
instructions, and announce the application deadline in a public notice
following Paperwork Reduction Act approval from the Office of
Management and Budget.
B. Requirements for Participation
2. Those wishing to participate in this competition must:
Submit an application form for Stage 2 of the Uniendo a
Puerto Rico Fund or the Connect USVI Fund (Application Form) via
electronic mail to [email protected] prior to the application
deadline; and
Comply with all provisions outlined in this Public Notice
and applicable Commission rules.
C. Public Interest Obligations
3. Each winning applicant that is authorized to receive Stage 2
fixed support will be required to offer voice and broadband services
meeting the relevant performance requirements to fixed locations. It
must make these services available to all fixed locations associated
with the geographic area for which it is the winning applicant.
4. In the competition, the Bureau will accept applications for
service at one of three performance levels, each with its own minimum
download and upload speed and usage allowance, and for either high or
low latency service, as shown in the tables herein. Winning applicants
that become authorized to receive Stage 2 fixed support must deploy
broadband service that meets the performance speed, usage and latency
requirements associated with their winning applications. The
performance requirements for authorized winning applicants are
described in more detail in the following tables and in the PR-USVI
Stage 2 Order.
------------------------------------------------------------------------
Assigned
Speed Monthly usage allowance points
------------------------------------------------------------------------
>=25/3 Mbps.................... >=250 GB or U.S. 50
median, whichever is
higher.
>=100/20 Mbps.................. >=2 TB................. 25
1 Gbps/500 Mbps................ >=2 TB................. 0
------------------------------------------------------------------------
------------------------------------------------------------------------
Assigned
Latency Requirement points
------------------------------------------------------------------------
Low............................ <=100 ms............... 0
High........................... <=750 ms............... 40
------------------------------------------------------------------------
5. Stage 2 support recipients may offer a variety of broadband
service offerings as long as they offer at least one standalone voice
plan and one service plan that provides broadband at the relevant
performance tier and latency requirements, and these plans must be
offered at rates that are reasonably comparable to rates offered in
urban areas. For voice service, a support recipient will be required to
certify annually that the pricing of its service is no more than the
applicable reasonably comparable rate benchmark that the Bureau
releases each year. For broadband services, a support recipient will be
required to certify that the pricing of a service that meets the
required performance tier and latency performance requirements is no
more than the applicable reasonably comparable rate benchmark, or that
it is no more than the non-promotional price charged for a comparable
fixed wireline broadband service in the state or U.S. territory where
the eligible telecommunication carrier (ETC) receives support.
6. The Commission has adopted specific service deployment
milestones that require each winning applicant authorized to receive
Stage 2 support to offer service to all locations associated with the
geographic area included in its authorized winning application.
Specifically, each support recipient must complete construction and
begin commercially offering service to at least 40% of the locations in
an area by the end of the third year of support, to at least 60% by the
end of the fourth year, at least 80% and by the end of the fifth year,
and to 100% by the end of the sixth year. A support recipient is deemed
to be commercially offering voice and/or broadband service to a
location if it provides service to the location or could provide it
within 10 business days upon request.
7. Compliance will be determined by geographic area. The Bureau
will verify that the support recipient offers the required service to
the total number of locations across all winning areas included in the
support recipient's authorized application areas (i.e., municipios or
island(s)). If a support recipient is authorized to receive support in
an area for different performance tier/latency and resiliency/
redundancy combinations, it will be required to demonstrate that it is
offering service meeting the relevant performance requirements to the
required number of locations throughout each geographic area for each
such combination within the application.
8. The Commission established a one-year location adjustment
process, as described more completely in the PR-USVI Stage 2 Order and
in the following. In the event a support recipient cannot identify all
locations in its winning geographic areas, it will have one year from
release of the Stage 2 Competition winning applicants public notice to
file evidence of the total number of locations in those blocks,
including geolocation data of all the locations it was able to
identify. The support recipient's filing will be subject to review and
comment by relevant stakeholders and to audit. If the support recipient
demonstrates that the number of actual, on-the-ground locations is
lower than the number announced by the Bureau on December 19, 2019, its
location total will be adjusted, and its support will be reduced on a
pro rata basis. If a support recipient finds that the number of actual
locations has increased, its total support will not be increased, but
it will be required to deploy to all actual locations.
[[Page 15984]]
9. Additionally, the Commission adopted a voluntary five-year
assessment prior to the end of the fifth year of support, as described
more completely in the PR-USVI Stage 2 Order. This process allows a
support recipient that faces unforeseen challenges to request a review
of and adjustment to its deployment obligations. As directed by the
Commission, the Bureau will establish a process no later than the
beginning of the fifth year of support to provide recipients an
opportunity to request reassessment of their obligations. The support
recipient's filing will be subject to review and public comment. If,
based on the Bureau's review, an adjustment of deployment obligations
or locations is warranted for any winning applicant, the Bureau will
announce those changes in a public notice.
10. To monitor each support recipient's compliance with the Stage 2
public interest obligations, the Commission has adopted reporting
requirements described in detail in the PR-USVI Stage 2 Order. These
include reporting a list of geocoded locations each year to which the
support recipient is offering the required voice and broadband
services, making a certification when the support recipient has met
service milestones, and submitting the annual FCC Form 481 report. A
support recipient that fails to offer service to all locations by a
service milestone will be subject to non-compliance measures. A support
recipient will also be subject to any non-compliance measures that are
adopted in conjunction with the uniform methodology applicable to high-
cost support recipients for testing and reporting network performance.
II. Applying To Compete in the Stage 2 Competition
A. Competition Structure
11. Single-Round Competition Format. As adopted in the PR-USVI
Stage 2 Order, the Bureau will conduct the Stage 2 Competition using a
single-round, confidential submission, objective scoring process. The
Bureau will consider all eligible Stage 2 applications simultaneously
and select applicants based on the lowest score for a series of
weighted objective criteria. Applicants must commit to meeting the
established minimum performance requirements identified in its
application, and the scoring gives greater preference to proposals
based on how much they exceed the minimum thresholds. The Bureau
establishes the procedures in the following in order to implement a
competition that is efficient, orderly, transparent, and impartial.
12. Eligible Providers. The Commission determined that it would
allow all providers that had existing fixed network facilities and made
broadband service available in Puerto Rico or in the U.S. Virgin
Islands, according to June 2018 FCC Form 477 data, to be eligible to
participate in their respective territory's competitive process.
Therefore, for example, a provider that has deployed broadband in
Puerto Rico but not the U.S. Virgin Islands according to June 2018 FCC
Form 477 data would be eligible to apply for support throughout Puerto
Rico, but not in the U.S. Virgin Islands. The Commission determined
that it would allow broadband providers that, according to June 2018
FCC Form 477 data, serve only business locations to participate. The
Commission also allowed participation by fixed providers who rely on
any technology, including satellite, that can meet the Stage 2 service
requirements.
13. Eligible Areas and Minimum Geographic Area. All areas of the
Territories are eligible for support. As the Commission determined in
the PR-USVI Stage 2 Order, the Bureau will use the 78 municipios in
Puerto Rico and create two areas in USVI--one that is composed of St.
John and St. Thomas islands together and a second of just St. Croix
island--as the geographic areas for which applicants may request
support in the competition.
14. As directed by the Commission, the Bureau released a public
notice listing the number of locations for each geographic area for the
Stage 2 Competition in December 2019 based on the most recent census
data (Reserve Price Notice). The Reserve Price Notice identifies the
geographic areas eligible for Stage 2 fixed funding, and lists the
municipio or island name, the number of locations in each area, and the
reserve price.
15. Applicants must use the municipio as the minimum geographic
area for applying for Stage 2 support in Puerto Rico. An applicant may
apply for up to 78 geographic areas in an application to compete for
Stage 2 fixed support in Puerto Rico. Applicants may apply for up to
two geographic areas in an application to compete for Stage 2 support
in the USVI.
16. Reserve Prices. The Bureau released the reserve prices for the
Territories on December 19, 2019. The Bureau applied the three-step
process adopted by the Commission to determine the reserve price for
each minimum geographic area. First, the Bureau employed the Connect
America Model (CAM) to calculate the average cost per location for all
locations in a census block. Second, the Bureau applied the full amount
of the budgets for Puerto Rico and for the U.S. Virgin Islands to
create territory-specific high-cost thresholds and to ensure the entire
budget is available over the 10-year term. Third, the Bureau
established a reserve price for each geographic area in proportion to
the support amounts calculated for each census block within that area.
The reserve prices are $25.58 per location per month for Puerto Rico
and $23.34 per location per month for USVI.
17. Competition Delay or Suspension. The Bureau may, by
announcement, delay or suspend the competition in the event of natural
disaster, technical obstacle, network disruption, evidence of an
competition security breach or unlawful application activity,
administrative or weather necessity, or for any other reason that
affects the fair and efficient conduct of the competitive proposal
process. In such cases, the Bureau will resume the competition starting
from the point at which the competition was suspended.
B. Application Procedures
18. Application Overview. The Stage 2 Competition will establish
the amount of support that each winning applicant will be eligible to
receive over the 10-year term. An applicant can submit an application
that includes a proposal for each geographic area for which it seeks
support. The price proposed for each geographic area represents the
amount of support the applicant is willing to receive per location per
month in a geographic area (Proposal Price). The Proposal Price will
apply to all locations within a geographic area for which the applicant
is seeking support. The Proposal Price must be at a price that is equal
to or less than the reserve price established by the Bureau. An
applicant may submit a different Proposal Price for each geographic
area it proposes to serve in the territory. Each application represents
an irrevocable offer to meet the terms of the application if it becomes
a winning application. That is, an application indicates that the
applicant, if selected, commits to provide service to all locations in
the minimum geographic area(s) in which it is chosen as the winning
applicant in accordance with its specified performance tier and latency
requirements in exchange for Stage 2 support. An authorized winning
applicant will receive support in amounts corresponding to the Proposal
Price for each geographic area in which it is the winning applicant.
[[Page 15985]]
19. The application and scoring procedures described herein
implement the Commission's decisions on the process for evaluating
applications in the Stage 2 Competition.
20. Required Application Form. An applicant must timely and
properly file an Application Form to be considered a participant in the
Stage 2 Competition for support in the Territories. This form can be
accessed at the FCC's website.
21. Application Submission. An application to participate in the
Stage 2 Competition will provide information used to determine whether
the applicant has the legal, technical, and financial qualifications to
participate in a Commission competition for universal service support.
An entity seeking to participate in the competition must file an
application in which it certifies, under penalty of perjury, its
qualifications. Eligibility to participate in the Stage 2 Competition
is based on an applicant's submission of required information,
Application Form and certifications. A potential applicant must take
seriously its duties and responsibilities and carefully determine
before filing an application that it is able to meet the public
interest obligations associated with Stage 2 support if it ultimately
becomes a winning applicant in the competition. An applicant's
selection as a winning applicant does not guarantee that the applicant
will also be deemed qualified to receive Stage 2 support. Each winning
applicant must file all required forms, information and certifications,
which the Bureau will review to determine if a winning applicant should
be authorized to receive support for its winning applications.
22. An entity seeking to participate in the Stage 2 Competition
must file an application electronically via email at
[email protected] by the deadline announced by the Bureau. Among
other things, an applicant must submit operational and financial
information demonstrating that it can meet the service requirements
associated with the performance tier and latency combination(s) for
which it submits an application. In the following, the Bureau describes
more fully the information disclosures and certifications required in
the application. An applicant is also subject to the Commission's rules
prohibiting certain communications, as explained in the following,
beginning on the date the window for filing applications opens. The
Bureau will publish a notice announcing the window opening date and a
notice announcing all parties that have successfully filed a Stage 2
Fixed application following the application deadline.
23. An applicant bears full responsibility for submitting an
accurate, complete, and timely application. An applicant should consult
the Commission's rules to ensure that, in addition to the materials
described in the following, all required information is included in its
application. To the extent the information in this Public Notice does
not address an applicant's particular circumstances, or if the
applicant needs additional information or guidance concerning the
following disclosure requirements, the applicant should review the PR-
USVI Stage 2 Order and the instructions for the Application Form and/or
use the contact information provided in this Public Notice to consult
with Commission staff to better understand the information it must
submit in its application.
24. An applicant should note that submitting an application (and
any amendments thereto) constitutes a representation by the certifying
official that he or she is an authorized representative of the
applicant, that he or she has read the form's instructions and
certifications, and that the contents of the application, its
certifications, and any attachments are true and correct. As more fully
explained in the following, an applicant may not make major
modifications to its application after the application filing deadline.
Submitting a false certification to the Commission may result in
penalties, including monetary forfeitures, the forfeiture of universal
service support, license forfeitures, ineligibility to participate in
future auctions, competitions, and/or criminal prosecution.
25. After the initial application filing deadline, Bureau staff
will review all timely submitted applications to determine whether each
application complies with the application requirements and has provided
all required information concerning the applicant's qualifications.
After this review is complete, Bureau staff may contact an applicant
regarding minor application defects that may be corrected. Staff will
establish a deadline for resubmitting modified applications. After any
applications have been resubmitted, Bureau staff will complete review
of all qualified applications, and the selected winners will be
announced in a public notice.
26. Acceptable Applications. To submit an application for support
to provide service to an area in the Stage 2 Competition, an applicant
must specify the area, a performance tier and latency combination, a
Proposal Price, resiliency and redundancy information that explains how
the applicant is building in network or path diversity, and a Disaster
Preparation and Response Plan. Several requirements, as set forth in
the following, will also apply to application submission and the Bureau
will advise applicants if an application does not meet these
conditions.
27. Each applicant should submit a single application for each
territory in which it seeks to provide qualifying voice and broadband
services. The application should include all proposals for each
geographic area within the territory for which the applicant seeks to
provide service. To effectuate this direction from the Commission, the
Bureau prohibits commonly controlled applicants from applying for the
same geographic areas.
28. An applicant may submit the Proposal Price as a price point
percentage of the reserve price for a geographic area. The price point
percentage submitted in the application may be specified with up to two
decimal places (e.g., 98.44%). The option to apply at intermediate
price point percentages will allow an applicant to indicate more
precisely the minimum amount of support it will accept for an area, and
it reduces the likelihood of ties.
29. An application must specify a percentage that implies a support
amount that is one percent or more of an area's reserve price to be
acceptable. One percent represents a sufficiently small fraction of the
model-derived reserve price to serve as a minimum acceptable
application for applicants with legitimate support needs. An applicant
that requires--or receives--no Stage 2 support to build out in an area
is free to provide service in the area if it wishes, and furthermore,
it can do so without the requirements imposed on Stage 2 support
recipients.
30. Modifying the Application Form. As indicated in this document,
an entity seeking to participate in the Stage 2 Competition must file
an Application Form electronically via electronic mail to the Bureau at
[email protected]. During the filing window, an applicant will be
allowed to make any necessary permissible modifications to its
Application Form through resubmission via electronic mail to the
Bureau. An applicant that has certified and submitted its Application
Form before the close of the filing window may continue to make
modifications as often as necessary until the application deadline;
however, the applicant must re-certify and resubmit its Application
Form before the close of the filing
[[Page 15986]]
window to confirm and effect its latest application changes.
31. After the Application Form filing deadline, a Stage 2
Competition applicant will be permitted to make only minor changes to
its application consistent with the Commission's rules. An applicant's
ability to modify its Application Form will be limited between the
closing of the filing window and the release of the public notice
announcing the Stage 2 Competition winning applicants. During this
period, an applicant will be permitted to modify only the applicant's
address, responsible party address, and contact information (e.g.,
name, address, telephone number, etc.) via resubmission through
electronic mail to the Bureau.
32. If an applicant needs to make other permissible minor changes
to its Application Form, or changes to maintain the accuracy and
completeness of its application pursuant to Sec. 1.65 of the
Commission's rules, the applicant must submit a letter briefly
summarizing the changes to its Application Form via electronic mail to
the Bureau at [email protected]. The email summarizing the changes
must include a subject line referring to the Stage 2 Competition and
the name of the applicant, for example, ``Re: Changes to the Stage 2
Competition Application of XYZ Corp.'' Any attachments to the email
must be formatted as Adobe[supreg] Acrobat[supreg] (PDF) or
Microsoft[supreg] Word documents.
33. An applicant will not be able to modify any other portions of
the Application Form, and in particular an applicant may not, after the
filing deadline, add a proposal for an area that it did not submit by
the filing deadline or subtract a proposal from those areas that it
submitted by the filing deadline. Major modifications to an Application
Form (e.g., changes in ownership that would constitute an assignment or
transfer of control of the applicant, change in applicant's legal
classification that results in a change in control, change in the
area(s) for which proposals are submitted) will not be permitted after
the Application Form filing deadline. If an amendment reporting change
is a ``major modification,'' the major modification will not be
accepted and may result in the dismissal of the application.
34. Pursuant to Sec. 1.65 of the Commission's rules, each
applicant has a continuing obligation to maintain the accuracy and
completeness of information furnished in a pending application,
including a pending application to participate in the Stage 2
Competition. Consistent with the requirements for the Commission's
spectrum competitions, an applicant for the Stage 2 Competition must
furnish additional or corrected information to the Commission within
five business days after a significant occurrence, or amend its
Application Form no more than five business days after the applicant
becomes aware of the need for the amendment. An applicant is obligated
to amend its pending application even if a reported change may result
in the dismissal of the application because it is subsequently
determined to be a major modification.
35. If, at any time, an applicant needs to make changes in order to
maintain the accuracy and completeness of its application pursuant to
Sec. 1.65 of the Commission's rules, it must make the change(s) by
resubmitting its application with an email to the Bureau, which must
include a re-certification to confirm and effect the change(s).
36. As with filing the Application Form, any amendment(s) to the
application and related statements of fact must be certified by an
authorized representative of the applicant with authority to bind the
applicant. Applicants should note that submission of any such amendment
or related statement of fact constitutes a representation by the person
certifying that he or she is an authorized representative with such
authority and that the contents of the amendment or statement of fact
are true and correct.
37. Questions about Application Form amendments should be directed
to the Telecommunications Access Policy Division, Wireline Competition
Bureau at (202) 418-0660.
C. Application Requirements
38. Disclosure of Agreements. An applicant must identify in its
application all real parties in interest to any agreements relating to
the participation of the applicant in the Stage 2 Competition. This
disclosure requirement applies to any arrangements with parties that
are applying to participate in the Stage 2 Competition as well as
parties that are not. An applicant that discloses any such agreement(s)
in its application must also provide a brief description of each
agreement.
39. An applicant must certify under penalty of perjury in its
application that it has disclosed all real parties in interest to any
agreements involving the applicant's participation in the Stage 2
Competition. The Bureau requires an applicant to certify under penalty
of perjury that it has not entered into any explicit or implicit
agreements, arrangements, or understandings of any kind related to the
support to be sought through the Stage 2 Competition, other than those
disclosed in its application. For purposes of making the required
agreement disclosures, if parties agree in principle on all material
terms prior to the application filing deadline, each applicant should
provide a brief description of, and identify the other party or parties
to, the agreement on its respective Application Form, even if the
agreement has not been reduced to writing. If an applicant has had
discussions, but it has not reached an agreement by the close of the
filing deadline, it should not include the matter on its application
and may not continue such discussions with any applicants after the
close of the filing window.
40. Ownership Disclosure Requirements. Each applicant must comply
with the ownership disclosure requirements in Sec. Sec. 1.2112(a) and
54.315(a)(1) of the Commission's rules. Specifically, in completing the
application, an applicant must fully disclose information regarding the
real party- or parties-in-interest in the applicant and the ownership
structure of the applicant, including both direct and indirect
ownership interests of 10% or more, as prescribed in Sec. 1.2112(a) of
the Commission's rules. Each applicant is responsible for ensuring that
information submitted in its application is complete and accurate.
41. In certain circumstances, an applicant may have previously
filed an FCC Form 602 ownership disclosure information report or filed
a competition application for a previous competition in which ownership
information was disclosed. Although an applicant might have filed this
information using the same FRN, the applicant should resubmit that
information in its Application Form. Each applicant must carefully
review any ownership information contained in its Application Form,
including any ownership attachments, to confirm that all information
supplied on the Application Form is complete and accurate as of the
application filing deadline for the Stage 2 Competition. An applicant
should note if there are any changes to information recently submitted.
Any information that needs to be corrected or updated must be changed
in the Application Form.
42. Specific Universal Service Certifications. An applicant must
certify that it is in compliance with all statutory and regulatory
requirements for receiving Stage 2 universal service support.
Alternatively, if expressly allowed by the rules specific to a high-
cost support mechanism, an applicant
[[Page 15987]]
may certify that it acknowledges that it must be in compliance with
such requirements before being authorized to receive Stage 2 support.
43. In addition, the Bureau requires that an applicant must certify
that it will make any default payment that may be required and that it
is aware that if its application is shown to be defective, the
application may be dismissed without further consideration and
penalties may apply.
44. Specific Stage 2 Eligibility Requirements and Certifications.
In the PR-USVI Stage 2 Order, the Commission established that an
applicant must demonstrate its operational experience and financial
qualifications to participate in the Stage 2 Competition. Therefore,
all applicants are required to provide the information described in the
following in this section.
45. An applicant must certify on its Application Form that it has
provided voice and/or broadband services since at least the time period
required for filing the June 30, 2018 FCC Form 477. An applicant must
specify the number of years it has been operating and identify the
services it has provided. An applicant will be deemed to have started
providing a service on the date it began commercially offering that
service to end users.
46. An applicant must certify that it (or its parent company, if it
is a wholly owned subsidiary) has filed FCC Form 477s as required
during that time period. And it must identify the FRNs it (or its
parent company) used to file the FCC Form 477s for the relevant filing
periods. The relevant FCC Form 477 filing periods include data as of
June 30, 2018; December 31, 2018; June 30, 2019; and December 31, 2019.
The Bureau will use FCC Form 477 data for these periods to validate an
applicant's representation on its application.
47. An applicant that intends to use wireless technologies to meet
the relevant Stage 2 public interest obligations must demonstrate that
it currently has sufficient access to spectrum--either licensed and
unlicensed--for each performance combination it selects in each area.
Specifically, in its application, an applicant must (i) identify the
spectrum band(s) it will use for the last mile, backhaul, and any other
parts of the network; (ii) describe the total amount of uplink and
downlink bandwidth (in megahertz) that it has access to in each
spectrum band for the last mile; (iii) describe the authorizations
(including leases) it has obtained to operate in the spectrum, if
applicable; and (iv) list the call signs and/or application file
numbers associated with its spectrum authorizations, if applicable. An
applicant that intends to provide service using satellite technology
should describe its expected timing for applying for earth station
license(s), and an applicant that intends to obtain microwave
license(s) for backhaul should describe its expected timing for
applying for microwave license(s) if these licenses have not already
been obtained.
48. To the extent that an applicant will use licensed spectrum, it
should provide details about how the licensed service area covers its
winning application area(s) (e.g., provide a list of geographic areas
that the spectrum license covers and describe how those areas relate to
the application area(s)). In the Public Notice, the Bureau identifies
the spectrum bands that it anticipates could be used for the last mile
to meet the performance obligations and indicate whether the spectrum
bands are licensed or unlicensed. The Bureau would expect that a
service provider operating in these bands could, at a minimum, offer
service meeting the requirements for the minimum performance tier
provided that the service provider is using sufficient bandwidth in the
spectrum band(s) and a technology that can operate on these spectrum
bands consistent with applicable U.S. and international rules and
regulations. The Bureau notes that the spectrum chart in the Public
Notice is a non-exhaustive list of spectrum bands that an applicant
could potentially use to meet its performance obligations. An applicant
is not precluded from proposing to use a spectrum band that is not
included in Appendix A of the Public Notice, provided that the
applicant can demonstrate that it is reasonably capable of meeting the
performance requirements over the entire support term for the selected
performance tier and latency combination(s) using that spectrum. The
Bureau also notes that an applicant that selects a spectrum band listed
in in the Public Notice for a particular performance tier and latency
combination may not necessarily be deemed eligible for that
combination.
49. An applicant must also certify that the description of the
spectrum access is accurate and that it will retain such access for at
least 10 years after the date on which it is authorized to receive
Stage 2 fixed support. Applications will be reviewed to assess the
reasonableness of the certification.
50. The Commission required all applicants to demonstrate
sufficient financial qualifications to participate in the Stage 2
Competition in order to minimize the number of winning applicants that
default because they are unable to meet their obligations. The Bureau
staff will review and evaluate the financial information provided to
assess the reasonableness of the applicant's financial qualifications.
In support of its financial showing, an applicant may choose to submit
its (or its parent company's) unaudited or audited financial statements
from the prior fiscal year, including balance sheets, net income and
cash flow, to support its application and financial certification.
Staff may request further information from an application if there are
questions about its qualifications. An applicant will ultimately be
provided a pass or fail rating on its financial qualifications. If an
applicant receives a failing score, its application will not be
reviewed, and the applicant will be disqualified from competing in the
Stage 2 Competition.
51. An applicant must certify in its application that it will have
available funds for all project costs that exceed the amount of Stage 2
support to be received for the first two years of its support term. An
applicant must also describe how the required construction will be
funded in each territory. The description should include the estimated
project costs for all facilities that are required to complete the
project, including the costs of upgrading, replacing, or otherwise
modifying existing facilities to expand coverage or meet performance
requirements. The estimated costs must be broken down to indicate the
costs associated with each proposed service area and must specify how
Stage 2 support and other funds, if applicable, will be used to
complete the project. The description must include financial
projections demonstrating that the applicant can cover the necessary
debt service payments over the life of any loans. The Bureau will treat
all the information included with this submission as confidential and
will withhold it from routine public inspection.
52. Each applicant must select in its application the performance
tier (speed and usage) and latency combination(s) for which it intends
to apply in each area where it seeks support. For each performance
combination, an applicant must indicate the technology or technologies
it intends to use to meet the associated requirements. The Bureau also
requires an applicant to demonstrate its eligibility to apply for the
performance tier and latency combination(s) it selects in its
application. It is the Bureau's objective to safeguard consumers from
situations
[[Page 15988]]
where applicants unable to meet the specified service requirements
divert support from applicants that can meet the public interest
obligations.
53. An applicant must demonstrate that it is technically qualified
to meet the relevant Stage 2 public interest obligations in its
application areas by submitting technical information to support the
operational assertions. An applicant must submit a detailed technology
and system design description, including a network diagram that must be
certified by a professional engineer. The professional engineer must
certify that the network can deliver, to all locations in each
geographic area, voice and broadband service that meets the requisite
performance requirements.
54. Initial Overview. All applicants must submit with their
application an overview of its intended technology and system design
for each area in its application. The overview must describe at a high
level how the applicant will meet its Stage 2 public interest
obligations for the relevant performance tier and latency
combination(s) using Stage 2 support (e.g., building a new network or
expanding an existing network, deploying new technology or existing
technology). This overview should avoid highly technical terminology or
jargon unless such language is integral to the understanding of the
project. The overview will be made publicly available.
55. Detailed Description. All applicants must submit with their
application, for each area, a more detailed description of its
technology and system design that describes the network to be built or
upgraded, demonstrates the project's feasibility, and includes the
network diagram certified by a professional engineer. It must describe
in detail a network that fully supports the delivery of consumer voice
and broadband service that meets the requisite performance requirements
to all locations in each area by the end of the six-year build-out
period and for the duration of the 10-year support term. It also must
contain sufficient detail to demonstrate that the applicant can meet
the interim service milestones if it becomes authorized to receive
support. If an applicant submits a technology and system design
description that lacks sufficient detail to demonstrate that the
applicant has the technical qualifications to meet the relevant Stage 2
obligations, the applicant will be asked to provide further details
about its proposed network. The Bureau will treat all the information
submitted as confidential and will withhold it from routine public
inspection.
56. In the following, the Bureau provides guidance on how an
applicant can successfully meet the requirement to provide a
description of its technology and system design. Specifically, the
Bureau describes the types of information it would expect an applicant
to include, at a minimum, in a detailed description of its technology
and system design in order to demonstrate that it has the technical
qualifications to meet its Stage 2 obligations. The Bureau's guidance
is informed by the types of information that applicants submitted in
the CAF II Auction and for rural broadband experiment support. These
are also the types of information about which the Bureau expects a
technically qualified applicant will have made preliminary decisions in
order to determine how much support it would need to meet the relevant
Stage 2 Competition public interest obligations and to begin planning
how it will meet the required service milestones.
57. The Bureau expects an applicant, regardless of the technology
(or technologies) it proposes to use, to:
Describe the proposed last mile architecture(s) and
technologies, middle mile/backhaul topology, and the architecture used
to provide voice service.
Describe the network's scalability and features that
improve reliability (such as redundancy).
Indicate whether parts of the network will use the
applicant's or another party's existing network facilities, including
non-wireless facilities extending from the network to customers'
locations. For non-wireless facilities that do not yet exist, the
description should indicate whether the new facilities will be aerial,
buried, or underground.
Provide technical information about the methods, ``rules
of thumb,'' and engineering assumptions used to size the capacity of
the network's nodes (or gateways) and links. The information provided
should demonstrate how the required performance for the relevant
performance tier will be achieved during periods of peak usage.
Provide a project plan that includes a network build-out
schedule that includes but is not restricted to plans for construction
of last mile and middle mile facilities. The build-out schedule should
show the applicant's projected milestones on an annual basis, including
achievement of the interim service milestones described in the PR-USVI
Stage 2 Order and completion of the network by the end of the sixth
year of funding authorization. The project plan and included schedule
should incorporate detailed information showing how the applicant plans
to offer, to all locations in each geographic area, voice and broadband
service meeting the relevant performance requirements when the system
is complete. The project plan and included schedule should also
incorporate the applicant's plans for monitoring and maintaining the
performance of the service for the duration of the 10-year support
term.
58. The network diagram, which must be certified by a professional
engineer, should:
Identify all wireline and wireless segments of the
proposed networks.
Uniquely identify (i) major network nodes including their
manufacturer and model, as well as their functions, locations, and
throughput/capacity; (ii) access nodes or gateways, including their
technology, manufacturer and model, location, and throughput/capacity;
and (iii) major inter-nodal links (not last mile), and their
throughput/capacity.
Indicate how many locations will be offered service from
each access node or from each gateway, and which performance tier or
tiers will be supported at each access node.
Indicate what parts of the network will be new deployment
and what parts will use the applicant's or another party's existing
network facilities.
Identify specialized nodes used in providing voice
service.
Explain how nodes or gateways are connected to the
internet backbone and Public Switched Telephone Network.
59. Additionally, an applicant that proposes to use terrestrial
fixed wireless technologies should:
Explain, with technical detail, how the proposed spectrum
can meet or exceed the relevant performance requirements at peak usage
periods.
Provide the calculations used, for each performance tier
and frequency band, to design the last mile link budgets in both the
upload and download directions at the cell edge, using the technical
specifications of the expected base station and customer premise
equipment.
Provide coverage maps for the planned and/or existing
networks that will be used to meet the Stage 2 public interest
obligations, indicating where the upload and download speeds will meet
or exceed the relevant performance tier speed(s). The coverage maps
should be provided for each interim and final service milestone and
should display the required service areas and target locations (or a
representation thereof).
[[Page 15989]]
Describe the underlying propagation model used to prepare
the coverage maps and how the model incorporates the operating
spectrum, antenna heights, distances, digital elevation, and clutter
resolutions.
Describe, for each relevant performance tier and latency
combination, the base station equipment that the applicant plans to
use.
Describe the planned customer premise equipment
configuration.
60. Additionally, an applicant that proposes to use primarily
satellite technologies should:
Describe how many satellites that are in view
simultaneously from any specific location will be required to meet the
relevant Stage 2 public interest obligations.
Describe how many uplink and downlink gateway antenna
beams will be required on each satellite, and the capacity of each beam
in megabits per second.
Describe how many uplink and downlink user antenna beams
will be required on each satellite, and the capacity of each beam in
megabits per second.
Describe how the gateway capacity is connected to user
beams on the satellite, in terms of beams and data capacity per beam.
Describe whether the capacity on the uplink and downlink
beams would be able to be reallocated once a satellite commences
operation, if the subscription rate is less in one beam but than in
another beam.
61. An applicant must submit with its application a letter from a
bank acceptable to the Commission, as set forth in Sec. 54.1508,
committing to issue an irrevocable stand-by letter of credit, in the
required form, to the applicant. The letter must, at a minimum, provide
the dollar amount of the letter of credit and the issuing bank's
agreement to follow the terms and conditions of the Commission's model
letter of credit, attached hereto as Appendix B of the Public Notice.
The Bureau will treat this letter as confidential trade secrets and/or
commercial information and thus withhold it from routine public
inspection.
62. Each applicant has sole responsibility for investigating and
evaluating all technical and marketplace factors that may have a
bearing on the amount of Stage 2 support it will seek in its
application. Each qualified applicant is responsible for certifying
that, if it becomes a winning applicant and is ultimately authorized to
receive Stage 2 support, it will be able to build and operate
facilities in accordance with the Stage 2 obligations and the
Commission's rules generally.
63. Applicants should be aware that the Stage 2 Competition
represents an opportunity to apply for Stage 2 support, subject to
certain conditions and regulations. The Stage 2 Competition does not
constitute an endorsement by the Bureau or Commission of any particular
service, technology, or product, nor does the award of Stage 2 support
constitute a guarantee of business success.
64. An applicant should perform its due diligence research and
analysis before proceeding, as it would with any new business venture.
In particular, the Bureau strongly encourages each applicant to review
all underlying Commission orders and to assess all pertinent economic
factors relating to the deployment of service in a particular area.
65. Each applicant should perform technical analyses or refresh its
previous analyses to assure itself that, should it become authorized to
receive Stage 2 support, it will be able to build and operate
facilities that fully comply with all applicable technical and legal
requirements and will advertise and provide the service to customers.
Each applicant should verify the number of actual locations within the
geographic areas that it proposes to serve in its application. Each
Stage 2 support recipient will be required to offer service meeting the
relevant requirements to all locations across all the winning areas
where it is authorized to receive support. The Bureau provided location
counts in the Stage 2 Reserve Price Public Notice, released on December
19, 2019. As described in this document and in the following, the
Commission has adopted a process by which support recipients that
cannot identify all locations can demonstrate that the number of
actual, on-the-ground locations is lower than the number estimated by
the CAM. Such a demonstration must be made within one year after the
release of the Stage 2 Competition public notice announcing the winners
and will be subject to review by the Bureau following comment by
relevant stakeholders and potentially an audit. Applicants' due
diligence should be informed by the availability of and requirements
for this process, in addition to other factors.
66. The Bureau also reminds each applicant that pending and future
judicial proceedings, as well as certain pending and future proceedings
before the Commission--including applications, applications for
modification, notices of proposed rulemaking, notices of inquiry,
petitions for rulemaking, requests for special temporary authority,
waiver requests, petitions to deny, petitions for reconsideration,
informal objections, and applications for review--may relate to or
affect licensees or applicants for support in the Stage 2 Competition.
Each applicant is responsible for assessing the likelihood of the
various possible outcomes and for considering the potential impact on
Stage 2 support available through this competition. The due diligence
considerations mentioned in this Public Notice do not comprise an
exhaustive list of steps that should be undertaken prior to
participating in this competition. As always, the burden is on the
applicant to determine how much research to undertake, depending upon
specific facts and circumstances related to its interests.
67. Each applicant is solely responsible for identifying associated
risks and for investigating and evaluating the degree to which such
matters may affect its ability to apply for or otherwise receive Stage
2 support. Each applicant is responsible for undertaking research to
ensure that any support won in this competition will be suitable for
its business plans and needs. Each applicant must undertake its own
assessment of the relevance and importance of information gathered as
part of its due diligence efforts.
68. The Bureau makes no representations or guarantees regarding the
accuracy or completeness of information in the Commission's databases
or any third-party databases, including, for example, court docketing
systems. To the extent the Commission's databases may not include all
information deemed necessary or desirable by an applicant, an applicant
must obtain or verify such information from independent sources or
assume the risk of any incompleteness or inaccuracy in said databases.
Furthermore, the Bureau makes no representations or guarantees
regarding the accuracy or completeness of information that has been
provided by incumbent licensees and incorporated into the Commission's
databases.
69. To confirm an applicant's understanding of its obligations, the
Bureau requires each applicant to certify under penalty of perjury in
its application that:
The applicant acknowledges that it has sole responsibility for
investigating and evaluating all technical, marketplace, and
regulatory factors that may have a bearing on the level of Uniendo a
Puerto Rico Fund or Connect USVI Fund Stage 2 Fixed high-cost
support it submits in its application, and that, if the applicant
wins support, it will be able to build and operate facilities in
[[Page 15990]]
accordance with the Uniendo a Puerto Rico Fund or Connect USVI Fund
Stage 2 obligations and the Commission's rules generally.
70. This certification will help ensure that an applicant
acknowledges and accepts responsibility for its application and any
forfeitures imposed in the event of default, and that it will not
attempt to place responsibility for the consequences of its activity in
this process on either the Commission or any of its contractors.
71. An applicant must acknowledge in its application that it must
be designated as an ETC for the areas in which it will receive support
prior to being authorized to receive support. Only ETCs designated
pursuant to section 214(e) of the Communications Act of 1934, as
amended (the Act) ``shall be eligible to receive specific Federal
universal service support.'' Section 214(e)(2) gives states the primary
responsibility for ETC designation. However, section 214(e)(6) provides
that this Commission is responsible for processing requests for ETC
designation when the service provider is not subject to the
jurisdiction of any state commission. Support is disbursed only after
the provider receives an ETC designation and satisfies the
requirements.
72. The Commission decided that an applicant need not be an ETC as
of the application filing deadline for the Stage 2 Competition, but
that it must obtain a high-cost ETC designation for the areas covered
by its winning applications within 60 days after being announced as a
winning applicant.
73. Absent a waiver, an applicant that fails to obtain the
necessary ETC designations by that deadline will be subject to a
forfeiture as described in the following, and will not be authorized to
receive Stage 2 support. In addition to all the requirements for
participating in the Stage 2 Competition, each applicant should be
familiar with the requirements of a high-cost ETC. For example, all
high-cost ETCs are required to offer Lifeline voice and broadband
service to qualifying low-income consumers pursuant to the Lifeline
program rules. Moreover, when the requirement has been fully
implemented, each Stage 2 support recipient will be required to bid on
Category One telecommunications and internet access services in
response to a posted FCC Form 470 seeking broadband service that meets
the connectivity targets for the Schools and Libraries universal
service support program (E-rate) for eligible schools and libraries
located within any area in a census block where the ETC is receiving
Stage 2 support. A high-cost ETC may also be subject to state-specific
requirements imposed by the state that designates it as an ETC.
74. An applicant is required to submit with its application a
Disaster Preparation and Response Plan (DPRP), which will be reviewed
by the Bureau for completeness. The DPRP should, at a minimum, address
in detail how an applicant intends to prepare for and respond to
disasters in Puerto Rico and/or the U.S. Virgin Islands according to
five criteria: (1) Strengthening Infrastructure; (2) Ensuring Network
Diversity; (3) Ensuring Backup Power; (4) Network Monitoring; and (5)
Emergency Preparedness. The detailed DPRP must include, for each
criterion:
A description of your commitments to maintain, improve or
modify your facilities based on reasonably-selected best practices,
checklists and industry standards;
commitments that are auditable and your agreement to be
subject to reasonable audit procedures; and
identification of your employee official(s) responsible
for management and compliance.
For each criterion, the Bureau has provided example best practices,
checklists, and/or standards in Appendix C of the Public Notice. It may
be useful to consider and/or incorporate some or all of these materials
in preparing the DPRP; however, the Bureau does not endorse any of the
specific examples, but rather it simply provides them as examples that
may prove useful. The applicant should explain why it believes
compliance with any specific standard it identifies will prove adequate
to meet the criteria the Bureau sets forth.
75. As directed by the Commission and as part of its review of the
application, Bureau staff will review each applicant's DPRP for
completeness, and may contact the applicant for further information.
The Bureau will provide detailed written notification of the
deficiencies, if any, to the carrier and withhold authorization to
receive support until the support recipient has cured the deficiencies.
76. Notwithstanding the prohibition against major modifications to
an application after the submission deadline, the Bureau will allow an
applicant to amend its DPRP submission in order to maintain best
practices to prepare for and respond to disasters.
77. A support recipient must certify annually to USAC that it has
recently reviewed the DPRP and considered whether any changes or
revisions were necessary. A support recipient has the obligation to
provide the Bureau with an updated DPRP within 10 days of making any
material changes to the DPRP, and for as long as it receives Stage 2
support.
D. Procedures for Limited Disclosure of Application Information
78. Consistent with the Commission's practice in the CAF II Auction
(Auction 903), Mobility Fund I and Tribal Mobility Fund I (Auctions 901
and 902) and recent spectrum auctions, the Bureau adopts procedures for
limiting the application information that will be disclosed to the
public.
79. Specifically, the Bureau will withhold from the public and
other applicants the application information listed in the following to
help ensure anonymous applications and to protect applicants'
competitively sensitive information. This Bureau will withhold the
application information until at least after the winning applicants
have been authorized to receive Stage 2 high-cost support. The
application information to be withheld includes, but is not limited to:
The minimum geographic areas selected by an applicant.
The performance tier and latency combination(s) selected
by an applicant and the associated weight for each combination.
The applicant's price percentage(s).
The spectrum access description.
An applicant's responses to the questions in this Public
Notice and any supporting documentation submitted in any attachment(s)
that are intended to demonstrate an applicant's ability to meet the
public interest obligations for each performance tier and latency
combination that the applicant has selected in its application.
Any financial information contained in an applicant's
Stage 2 application for which the applicant has requested confidential
treatment under the abbreviated process in Sec. 0.459(a)(4) of the
Commission's rules.
An applicant's letter of interest from a qualified bank
that the bank would provide a letter of credit to the applicant.
The applicant's DPRP.
80. Unlike the typical Sec. 0.459 process, which requires that an
applicant submit a statement of the reasons for withholding the
information for which confidential treatment is sought from public
inspection, an applicant that seeks confidential treatment of the
financial information contained in its application need not submit a
statement that conforms with the requirements of Sec. 0.459(b) unless
and until its request for confidential treatment is challenged. Because
the Bureau has found in other contexts that financial information that
[[Page 15991]]
is not otherwise publicly available could be competitively sensitive,
it permits applicants seeking confidential treatment of financial
information to use this abbreviated process.
81. The Sec. 0.459(a)(4) abbreviated process for requesting
confidential treatment may not be used by an applicant to request
confidential treatment of any information in its application other than
its financial information. Thus, an applicant that wishes to seek
confidential treatment of any other portion(s) of its application must
file a regular Sec. 0.459 request for confidential treatment of any
such information with its application (other than responses to the
questions in the Public Notice and associated supporting documentation
that the Bureau presumes to be competitively sensitive). This request
must include a statement of the reasons for withholding those portions
of the application from public inspection. Additionally, in the event
an applicant's abbreviated request for confidential treatment of the
financial information contained in its application is challenged, the
applicant must submit a request for confidential treatment of its
financial information that conforms with the requirements of Sec.
0.459 within 10 business days after receiving notice of the challenge.
82. After the winning applicant(s) is authorized to receive Stage 2
fixed support, the Bureau no longer has a need to preserve the
confidentiality of the contents of applications. Accordingly, the
Bureau will make publicly available all application information, except
for an applicant's operational information (including its DPRP), letter
of interest, and confidential financial information. This approach is
consistent with the Bureau's interest in a transparent competition
process and the Commission's recent practices in the CAF II Auction
903, Mobility Fund Phase I competition and the Commission's typical
spectrum competitions.
E. Prohibited Communications and Compliance With Antitrust Laws
83. To help protect competition during the Stage 2 Competition, the
Bureau incorporates into this process the Commission's rules
prohibiting an applicant from communicating certain proposal-related
information to another applicant from the application filing deadline
until awards are announced. More specifically, Sec. 1.21002 of the
Commission's rules prohibits an applicant from cooperating or
collaborating with any other applicant with respect to its own, or one
another's, or any other competing applicant's applications or
application strategies, and from communicating with any other applicant
in any manner the substance of its own, or one another's, or any other
competing applicant's applications or application strategies during the
prohibition period. The rule provides an exception for communications
between applicants if those applicants identify each other on their
respective applications as members of a joint application arrangement
and certify that the application identifies all real parties in
interest to agreements related to the applicant's participation in the
competition. Consistent with the Commission's direction in the PR-USVI
Stage 2 Order, the Bureau applies a prohibition identical to Sec.
1.21002 to the Stage 2 Competition.
84. This section provides guidance on the application of the rule
during the Stage 2 Competition. As in past competitions and auctions
for support, the targeted restrictions imposed by the rule are
necessary to serve the important public interest in a fair and
competitive process.
85. Entities Covered by Communications Prohibition. Consistent with
Sec. 1.21002, the prohibition of certain communications that the
Bureau adopts will apply to any party that submits an application to
participate in the Stage 2 Competition. This prohibition applies to all
parties that submit an application by the deadline regardless of
whether such parties become winning applicants authorized to receive
Stage 2 support.
86. ``Applicant'' for purposes of this rule includes the entity
filing the application, each party capable of controlling the
applicant, and each party that may be controlled by the applicant or by
a party capable of controlling the applicant.
87. Subject to the exception described in this document, the
prohibition applies to communications by an applicant that are conveyed
to another applicant. The prohibition of ``communicating in any
manner'' includes public disclosures as well as private communications
and indirect or implicit communications, as well as express statements.
Consequently, an applicant must take care to determine whether its
Stage 2 Competition-related communications may reach another applicant,
unless the exception applies.
88. Applicants should take special care in circumstances where
their officers, directors, and employees may receive information
directly or indirectly relating to any other applicant's Stage 2
applications or application strategies. Information received by a party
related to the applicant may be deemed to have been received by the
applicant under certain circumstances. For example, Commission staff
have found that, where an individual serves as an officer and director
for two or more applicants, the applications and application strategies
of one applicant are presumed conveyed to the other applicant, and,
absent a disclosed agreement that makes the rule's exception
applicable, the shared officer creates an apparent violation of the
rule.
89. Prohibition Applies Until Deadline. Consistent with Sec.
1.21002, the prohibition of certain communications begins at the
application filing deadline and ends when the winning applicants are
authorized to receive Stage 2 support.
90. Prohibited Communications. Consistent with Sec. 1.21002 as
applied to this Stage 2 Competition, the rule prohibits an applicant
from communicating with another applicant only with respect to ``its
own, or one another's, or any other competing applicant's application
or application strategies.'' Thus, the prohibition does not apply to
all communications between or among applicants; it applies to any
communication conveying, in whole or part, directly or indirectly, the
applicant's or a competing applicant's ``application or application
strategies.''
91. All applicants seeking support in the competitive proposal
process are ``competing applicants'' under the rule. Parties apply to
participate in the Stage 2 Competition to obtain support from a fixed
budget. As such, applicants are competing with one another regardless
of whether each seeks to serve different geographic areas with Stage 2
support.
92. Business discussions and negotiations that are unrelated to
applications in the Stage 2 Competition and that do not convey
information about Stage 2 applications or application strategies are
not prohibited by the rule. Moreover, not all competition-related
information is covered by the prohibition. For example, communicating
merely whether a party has or has not applied to participate in the
Stage 2 Competition will not violate the rule. In contrast,
communicating how a party is participating, including specific areas
and/or tier and latency combinations selected, specific price
percentages, and/or whether or not the party has submitted an
application, would convey application strategies and would be
prohibited.
93. In the present context, the prohibited communications rule will
take effect after applications are due and
[[Page 15992]]
continue to be in effect until the Bureau announces the winning
applicants that are authorized for support. Although there are no
subsequent rounds, and applicants may not add or subtract competitive
area-specific proposals after that date, it is imperative that an
applicant not discuss with any other applicant any aspect of its
application and proposals until the winning applicants are authorized
for support to comply with the rule. Previously, the Commission has
found discussions related to strategic defaults between winning auction
bidders after the close of bidding in an auction to violate the
prohibited communications rule.
94. While consistent with Sec. 1.21002 the Bureau does not
prohibit business discussions and negotiations among applicants that
are not competition related, each applicant must remain vigilant not to
communicate, directly or indirectly, information that affects, or could
affect, applications or application strategy. Certain discussions might
touch upon subject matters that could convey cost information and
application strategies. Such subject areas include, but are not limited
to, management, sales, local marketing agreements, and other
transactional agreements.
95. The Bureau cautions applicants that applications or application
strategies may be communicated outside of situations that involve one
party subject to the prohibition communicating privately and directly
with another such party.
96. Applicants should use caution in their dealings with other
parties, such as members of the press, financial analysts, or others
who might become conduits for prohibited communication of application
information. For example, even though communicating that it has applied
to participate in the competition will not violate the rule, an
applicant's statement to the press about the details of its application
or proposal in the competition could give rise to a finding of a
violation of the prohibition on certain communications that the Bureau
adopts.
97. Communicating with Third Parties. Consistent with Sec.
1.21002, the Bureau does not prohibit an applicant from communicating
application or application strategies to a third party, such as a
consultant or consulting firm, counsel, or lender, provided that the
applicant takes appropriate steps to ensure that the third party does
not become a conduit for prohibited communications to other applicants,
unless both applicants are parties to a joint application arrangement
disclosed on their respective applications. For example, an applicant
might require a third party, such as a lender, to sign a non-disclosure
agreement before the applicant communicates any information regarding
application or application strategy to the third party. Within third-
party firms, separate individual employees, such as attorneys or
competition consultants, may advise individual applicants on
application or application strategies, as long as such firms implement
firewalls and other compliance procedures that prevent such individuals
from communicating the application or application strategies of one
applicant to other individuals representing separate applicants.
Although firewalls and/or other procedures should be used, their
existence is not an absolute defense to liability if a violation of the
rule has occurred.
98. As the Commission has previously explained, in the case of an
individual, the objective precautionary measure of a firewall is not
available. As a result, an individual that is privy to bids or bidding
information of more than one applicant presents a greater risk of
engaging in a prohibited communication. The Bureau will take the same
approach to interpreting the prohibited communications rule in the
Stage 2 Competition. The Bureau emphasizes that whether a prohibited
communication has taken place in a given case will depend on all the
facts pertaining to the case, including who possessed what information,
what information was conveyed to whom, and the status of the
competition.
99. The Bureau reminds potential applicants that they may discuss
the application or proposals for specific geographic areas with the
counsel, consultant, or expert of their choice before the application
deadline. Furthermore, the same third-party individual could continue
to give advice after the deadline regarding the application, provided
that no information pertaining to application or application strategies
is conveyed to that individual.
100. Certification. By submitting an application, each applicant in
the Stage 2 Competition certifies its compliance with the prohibition
on certain communications that the Bureau adopts, consistent with the
Commission's direction in the PR-USVI Stage 2 Order. In particular, an
applicant must certify under penalty of perjury that the application
discloses all real parties in interest to any agreements involving the
applicant's participation in the applying for Stage 2 support. Also,
the applicant must certify that it and all applicable parties have
complied with and will continue to comply with the prohibition the
Bureau adopts, which is identical to 47 CFR 1.21002.
101. The Bureau cautions, however, that merely filing a certifying
statement as part of an application will not outweigh specific evidence
that a prohibited communication has occurred, nor will it preclude the
initiation of an investigation when warranted. The Commission has
stated that it ``intend[s] to scrutinize carefully any instances in
which applying patterns suggest that collusion may be occurring.'' Any
applicant found to have violated the prohibition on certain
communications may be subject to sanctions.
102. Duty to Report Prohibited Communications. Consistent with
Sec. 1.21002(c), the Bureau requires that any applicant that makes or
receives a communication that appears to violate the prohibition on
certain communications that it adopts must report such communication in
writing to the Commission immediately, and in no case later than five
business days after the communication occurs. An applicant's obligation
to make such a report continues until the report has been made.
103. In addition, Sec. 1.65 of the Commission's rules requires an
applicant to maintain the accuracy and completeness of information
furnished in its pending application and to notify the Commission of
any substantial change that may be of decisional significance to that
application. Thus, Sec. 1.65 requires a Stage 2 Competition applicant
to notify the Commission of any substantial change to the information
or certifications included in its pending application. An applicant is
therefore required by Sec. 1.65 to report to the Commission any
communication the applicant has made to or received from another
applicant after the application filing deadline that affects or has the
potential to affect its application or application strategy, unless
such communication is made to or received from an applicant that is a
member of a joint application arrangement identified on the
application.
104. Sections 1.65(a) and 1.21002 of the Commission's rules require
each applicant in competitive proceedings to furnish additional or
corrected information within five days of a significant occurrence, or
to amend its application no more than five days after the applicant
becomes aware of the need for amendment. These rules are intended to
facilitate the competition process by making information that should be
publicly available promptly accessible to all participants and to
enable the Bureau to act expeditiously
[[Page 15993]]
on those changes when such action is necessary. For the avoidance of
doubt, the Bureau applies the same requirement here.
105. Procedure for Reporting Prohibited Communications. A party
reporting any prohibited communication pursuant to Sec. 1.65 or the
prohibition the Bureau adopts here (i.e., a communication that would be
prohibited by Sec. 1.21001(b), or Sec. 1.21002(c)) must take care to
ensure that any report of the prohibited communication does not itself
give rise to a violation of the communications prohibition the Bureau
adopts. For example, a party's report of a prohibited communication
could violate the rule by communicating prohibited information to other
applicants through the use of Commission filing procedures that allow
such materials to be made available for public inspection.
106. Parties must file only a single report concerning a prohibited
communication and must file that report with the Commission personnel
expressly charged with administering the Commission's competitions.
This rule is designed to minimize the risk of inadvertent dissemination
of information in such reports. Any required reports must be filed
consistent with the instructions set forth in this Public Notice. For
the Stage 2 Competition, such reports must be filed with Ryan Palmer,
the Chief of the Telecommunications Access Policy Division, Wireline
Competition Bureau, by the most expeditious means available. Any such
report should be submitted by email to Mr. Palmer at the following
email address: [email protected]. If you choose instead to submit
a report in hard copy, any such report must be delivered only to: Ryan
Palmer, Chief, Telecommunications Access Policy Division, Wireline
Competition Bureau, Federal Communications Commission, 445 12th Street
SW, Room 5-A426, Washington, DC 20554.
107. A party seeking to report such a prohibited communication
should consider submitting its report with a request that the report or
portions of the submission be withheld from public inspection by
following the procedures specified in Sec. 0.459 of the Commission's
rules. The Bureau encourages such parties to coordinate with the
Telecommunications Access Policy Division staff about the procedures
for submitting such reports.
108. Disclosure of Agreement Terms. Each applicant may be required
to disclose in its application the specific terms, conditions, and
parties involved in any agreement into which it has entered. This may
apply to an applicant that is a consortia, joint venture, partnership,
or agreement, understanding, or other arrangement entered into relating
to the Stage 2 competitive proposal process, including any agreement
relating to the post-competition market structure. Failure to comply
with the Commission's rules can result in enforcement action.
109. Additional Information Concerning Prohibition of Certain
Communications. The prohibition the Bureau adopts here is consistent
with similar rules the Commission has applied in other Commission
competitions and auctions. Applicants may gain insight into the public
policies underlying Sec. 1.21002 by reviewing information about the
application of these other rules. Decisions applying these rules by
courts and by the Commission and its Bureau in other Commission
competitions can be found at https://www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications. Applicants utilizing these precedents should keep in
mind the specific language of the rule applied in past decisions, as
well as any differences in the context.
110. Antitrust Laws. Regardless of compliance with the Commission's
rules, applicants remain subject to the antitrust laws, which are
designed to prevent anticompetitive behavior in the marketplace.
Compliance with the disclosure of prohibited communications pursuant to
the rules the Bureau adopts in the Public Notice will not insulate a
party from enforcement of the antitrust laws. For instance, a violation
of the antitrust laws could arise out of actions taking place well
before the application filing deadline, when the prohibited
communications rule takes effect. The Commission has cited a number of
examples of potentially anticompetitive actions that would be
prohibited under antitrust laws: for example, actual or potential
competitors may not agree to divide territories in order to minimize
competition, regardless of whether they split a market in which they
both do business, or whether they merely reserve one market for one and
another market for the other. Similarly, Commission staff have
previously reminded potential applicants and others that ``[e]ven where
the applicant discloses parties with whom it has reached an agreement
on the application . . . the applicant is nevertheless subject to
existing antitrust laws.''
111. To the extent the Commission becomes aware of specific
allegations that suggest that violations of the federal antitrust laws
may have occurred, the Commission may refer such allegations to the
United States Department of Justice for investigation. If an applicant
is found to have violated the antitrust laws or the Commission's rules
in connection with its participation in the Stage 2 Competition
application process, it may be subject to a forfeiture and may be
prohibited from participating further in the Stage 2 Competition and in
future competitions and auctions, among other sanctions.
F. Red Light Rule
112. The Commission has adopted rules, including a provision
referred to as the ``red light rule,'' that implement the Commission's
obligation under the Debt Collection Improvement Act of 1996, which
governs the collection of debts owed to the United States, including
debts owed to the Commission. Under the red light rule, applications
and other requests for benefits filed by parties that have outstanding
debts owed to the Commission will not be processed. Applicants seeking
to participate in the Stage 2 Competition are subject to the
Commission's red light rule. Pursuant to the red light rule, unless
otherwise expressly provided for, the Commission will withhold action
on an application by any entity found to be delinquent in its debt to
the Commission.
113. Specifically, a red-lighted applicant seeking to participate
in the Stage 2 Competition must pay any debt(s) associated with the red
light prior to filing its application. If an applicant has not resolved
its red light issue(s) prior to filing, its application will be deemed
incomplete. Bureau staff will not process the applicant's Stage 2
application, and the applicant will be deemed not qualified to apply
for Stage 2 support.
114. Potential applicants for the Stage 2 Competition should review
their own records, as well as the Commission's Red Light Display System
(RLD), to determine whether they owe any non-tax debt to the Commission
and should try to resolve and pay any outstanding debt(s) prior to
submitting a application. The RLD enables a party to check the status
of its account by individual FCC Registration Numbers (FRNs) and links
other FRNs sharing the same Tax Identification Number (TIN) when
determining whether there are outstanding delinquent debts. The RLD is
available at http://www.fcc.gov/redlight/. Additional information is
available at https://www.fcc.gov/debt_collection/.
115. Additionally, the Bureau recognizes that a Stage 2 Competition
[[Page 15994]]
applicant may incur debt to the Commission after it files its
application and may fail to pay that debt when due. An applicant should
note that the Commission will conduct additional red light checks prior
to authorizing Stage 2 support. The Bureau therefore encourages
qualified applicants to continue to review their own records as well as
the RLD periodically during the Stage 2 Competition and to resolve and
pay all outstanding debts to the Commission as soon as possible. The
Commission will not authorize any winning applicant to receive Stage 2
support until its red light issues have been resolved.
G. USF Debarment
116. The Commission's rules provide for the debarment of those
convicted of or found civilly liable for defrauding the high-cost
support program. Stage 2 Competition applicants are reminded that those
rules apply with equal force to the Stage 2 Competition.
III. Evaluating Stage 2 Competition Applications and Proposals
A. Evaluation of Applications
117. Evaluation Process Overview. The Bureau strongly encourages
each applicant to carefully review its entire application, including
specific proposals for each geographic area, for completeness and
accuracy. Following an application's submission to the Commission, an
applicant is not afforded any opportunity to cure deficiencies or make
major modifications to its competitive proposal that may affect
Commission staff's ultimate scoring of proposals. However, the Bureau
may request additional information from applicants to facilitate its
review of underlying applications.
118. Once the deadline to submit an application has passed, Bureau
staff will determine whether each applicant has complied with the
application requirements and provided all information concerning its
competitive proposal(s). The Bureau will issue a public notice with
each applicant's proposal status identifying (1) those that are
complete and (2) those that are incomplete or deficient. Eligible
applicants that submit complete proposals will be reviewed as part of
the Stage 2 Competition for the Territories consistent with the
methodology prescribed by the PR-USVI Stage 2 Order.
119. The Bureau will select only one winner per geographic area in
the Territories. The Bureau staff will score the applications using at
least two independent reviewers for each application who will not
communicate about the contents or merits of the applications prior to
issuing a final score. Each reviewer will score separately, and the
final overall score for each competitive proposal will be the average
score of the proposal based on all scores from reviewers. There will be
no public comment period on competitive proposals submitted in the
Stage 2 Competition.
120. Overall Scoring and Weighting. Bureau staff will apply three
objective factors in scoring and selecting winning applicants based
upon information provided in each applicant's competitive proposal for
a specific geographic area: (1) Price per location; (2) network
performance, including speed, latency, and usage allowance; and (3)
network resilience and redundancy. For administrative simplicity in
evaluating comprehensive proposals, applicants shall provide this
information in a Microsoft Excel or Access format using Schedule B to
the Application Form for each geographic area it seeks Stage 2 support.
121. Bureau staff will evaluate each geographic area contained in
an applicant's competitive proposal based on a 270-point scale, as
shown in the table in the following and allocated as follows: 100
points for price per location, 90 points for network performance, and
80 points for network resilience and redundancy. An applicant will be
assigned a specific point value in each category, and it will receive a
final overall score, calculated as the average of all scores from
Commission staff for each geographic area for which it seeks support.
Price per location will be given the greatest weight; however, a
proposal for a network with top-notch performance and resilience and
redundancy can prevail over a proposal for a less expensive but less
robust and resilient network to encourage applicants to deploy high-
performing, storm-hardened networks. The applicant with the lowest
final overall point score out of a total of 270 possible points for a
geographic area will win support for that area. In the event of a tied
score for a geographic area, the Bureau will select the competitive
proposal with the lowest price per location.
Table 1--Overall Scoring
------------------------------------------------------------------------
Overall scoring Points
------------------------------------------------------------------------
Price Per Location......................................... 100
Network Performance........................................ 90
Network Resilience and Redundancy.......................... 80
------------
Total.................................................. 270
------------------------------------------------------------------------
122. Price Per Location. The Bureau will use the Proposal Price
submitted by applicants in their Application Form to determine their
scores for price per location. The reserve price for each geographic
area is the maximum amount that an applicant may commit to accept in
its proposal. An applicant who proposes to accept the reserve price for
a geographic area will receive the highest score of 100 points for
price per location category. Unlike in the multi-round CAF II reverse
auction previously used by the Commission, the competitive process here
is only a single round, so applicants must provide their best price
possible in the first instance.
123. The Bureau will subtract one point from the high score of 100
for each percentage point the Proposal Price is below the reserve
price, as shown in the Table 2 herein. Applicants may submit a Proposal
Price below the reserve price to the nearest hundredth of one percent.
In such cases, the Bureau will round the percentage to the nearest
whole percentage for the purpose of scoring. In the event two
applicants have equal overall final scores, the applicant with the
lowest Proposal Price will be selected the winning applicant. For
example, if an applicant commits to a Proposal Price that is 10.55
percent less than the reserve price, the applicant will receive an 11-
point reduction from the possible 100 points. In the event a second
applicant submits a Proposal Price for the same geographic area that is
10.75 percent less than the reserve price, thereby also receiving an
11-point reduction, and has the same point total as the first applicant
in every other respect, this later applicant would be the winning
bidder because its Proposal Price would be less than the former
applicant, assuming the final overall score for both applicants'
proposals were equal. Thus, this single-round competitive process
rewards applicants to reveal their best price to increase the
likelihood of being the winning applicant.
Table 2--Price Per Location Scoring
------------------------------------------------------------------------
Price Assigned points
------------------------------------------------------------------------
Reserve Price............................. 100
[[Page 15995]]
1% 100% Below Reserve Price............... -1 point for each percentage
below reserve
------------------------------------------------------------------------
124. Network Performance. In the PR-USVI Stage 2 Order the
Commission established three tiers for a combination of network speed
and usage allowances, and two tiers for network latency, as reflected
in Table 3 in the following. The Bureau requires applicants to commit
to the deployment of a network capable of providing a minimum upload
and download speeds of at least 25/3 Mbps with at least 200 gigabytes
(GB) of monthly data usage or a usage allowance that reflects the
average usage of a majority of fixed broadband customers, using
Measuring Broadband America data or a similar data source, whichever is
greater. For each geographic area the applicant seeks support, the
applicant specifies the specific speed, usage, and latency in Schedule
B of the Application Form. The Bureau does not require an applicant to
propose the same network performance measures for each geographic area
it proposes to provide voice and broadband service in the territory.
125. Applicants that propose to meet these minimum network speed
and usage requirements will be assigned the maximum 50 points allotted
for this category.
126. To promote the deployment of advanced networks and access to
quality services, the Bureau provides point reductions only by meeting
specific performance metrics. Applicants will be given a points
reduction if its proposed network speed and data usage is greater than
or equal to speeds of 100/20 Mbps and greater than or equal to 2 TB of
monthly data usage. Staff will assign 25 points out of a possible 50
points to applicants that commit to deploy networks meeting or
exceeding these specified speeds and minimum data usage. And staff will
assign zero points only if an applicant's proposal meets or exceeds
speeds of 1 Gbps/500 Mbps with at least 2TB for monthly usage
allowance. Unlike the price per location category, applicants do not
receive incremental decreases in assigned points for increases in speed
or monthly data usage allowance that are less than those specified for
the next performance tier.
127. All applicants must provide services with a maximum roundtrip
broadband and voice latency of <=750 milliseconds (ms) or less, but the
Bureau will give preference to applicants with low-latency broadband
and voice at or below 100 ms as shown in Table 4 herein. Staff will
assign high-latency commitments the full 40 points for this category
and assign zero points for a proposal with low-latency. Similar to
speed and usage, applicants do not receive incremental point reductions
for latency performance that are between 750 ms and 100 ms.
Table 3--Network Performance Scoring (1 of 2)--Speed/Usage
------------------------------------------------------------------------
Assigned
Speed Monthly usage allowance points
------------------------------------------------------------------------
>=25/3 Mbps.................... >=200 GB or U.S. 50
median, whichever is
higher.
>=100/20 Mbps.................. >=2 TB................. 25
1 Gbps/500 Mbps................ >=2 TB................. 0
------------------------------------------------------------------------
Table 4--Network Performance Scoring (2 of 2)--Latency
------------------------------------------------------------------------
Assigned
Latency Requirement points
------------------------------------------------------------------------
Low............................ <=100 ms............... 0
High........................... <=750 ms............... 40
------------------------------------------------------------------------
128. Network Resiliency and Redundancy. Bureau staff will evaluate
resiliency and redundancy by assigning points for a few key, objective
criteria specified in Schedule B of the Application Form. Bureau staff
will award a points preference based on the level of resilience an
applicant proposes to build into its network and/or the redundancy or
diversity it proposes to create in its network as measured in network
miles.
129. Applicants must provide data concerning its proposed network
for each geographic area for evaluation and scoring. Applicants must
provide the total network miles within the geographic area. Applicants
must further provide the amount of its total network miles that
consists of buried fiber, aerial fiber using standard poles, aerial
fiber using composite high-wind rated poles, and fixed wireless
technology. An applicant will receive a score for network resilience
based on the percentage of these technologies, as measured by network
miles, that comprise the entire network within the geographic area. The
Bureau assigns the full 60 points for this category to a network
comprised entirely of aerial fiber using standard poles, and provide
the greatest preference, with least amount of points, to an all-buried
fiber network. Bureau staff will assign as few as zero points for a
network resiliency solution that relies on all-buried fiber.
130. Finally, Bureau staff will assign up to 20 points depending on
whether an applicant proposes a redundancy solution that includes a
backup network or path diversity. Network diversity means maintaining a
separate communications network that can provide services should the
first type fail. Path diversity means that there is an alternate route
to achieving communications within the network. Specifically, staff
will assign no points for a proposal that includes either a backup
network or path redundancy, and staff will assign 20 points to a
proposal that includes neither a backup network or path redundancy.
Applicants must specify the amount of network miles within the
geographic area that include a backup network, path diversity, or both.
Bureau staff will not deduct points for satellite providers for
redundancy simply based on the availability of a backup satellite path.
Satellite providers will receive a reduction in points based on the
percentage of locations that it intends to reach with a backup network.
Although scoring will equally reward a carrier for building in either
network or path diversity, the Bureau encourages carriers to build both
into their network
[[Page 15996]]
wherever possible as a best practice for building a storm-hardened
network.
Table 5--Network Resilience and Redundancy Scoring
------------------------------------------------------------------------
Network resilience and redundancy
measures Assigned points
------------------------------------------------------------------------
Aerial wireline deployment....... 60.
Satellite; fixed wireless end 40-60 sliding scale.
user location connection;
microwave backhaul; aerial
wireline deployment using high-
wind rated composite poles.
Underground fiber................ 0-60 sliding scale.
Backup network/path diversity.... 0-20 sliding scale.
------------------------------------------------------------------------
B. Confidentiality and Availability of Competition Information
131. Applicants may request confidential treatment of application
information pursuant to the normal or abbreviated Sec. 0.459 processes
detailed in the public notice. For a typical request for confidential
treatment, an applicant must submit a statement of the reasons for
withholding information from public inspection. An applicant that seeks
confidential treatment of financial information contained in its
application need not submit a statement that conforms with the
requirements of Sec. 0.459(b) unless and until its request for
confidential treatment is challenged. Notwithstanding an applicant's
request for confidential treatment, the Bureau will withhold from
public inspection certain application information until at least after
the winning applicants have been authorized to receive support.
C. Default Payment Requirements
132. Forfeiture. Any Stage 2 Competition winning applicant will be
subject to a forfeiture in the event of a default before it is
authorized to begin receiving support. A winning applicant will be
considered in default and will be subject to forfeiture if it fails to
meet the document submission deadlines, is found ineligible or
unqualified to receive Stage 2 support by the Bureau, and/or otherwise
defaults on its winning applications or is disqualified for any reason
prior to the authorization of support. Any such determination by the
Bureau shall be final, and a winning applicant shall have no
opportunity to cure through additional submissions, negotiations, or
otherwise. Agreeing to such payment in the event of a default is a
condition for participating in application in the Stage 2 Competition.
133. The Commission established a base forfeiture of $3,000 per
census block group within a geographic area for any applicant that (i)
fails to meet the document submission deadlines, (ii) is found
ineligible or unqualified to receive support by the Bureau, or (iii)
otherwise defaults on its bid or was disqualified for any reason prior
to receiving authorization for support. The forfeiture amount resulting
from an applicant's default prior to receiving authorization for
support will be subject to adjustment based on the criteria set forth
in the Commission's forfeiture guidelines.
134. A winning applicant will be subject to the base forfeiture for
each separate violation of the Commission's rules. The Commission
defined a violation as any form of default with respect to the
geographic area. In other words, there shall be separate violations for
each winning geographic area in an application. To ensure that the
amount of the base forfeiture is not disproportionate to the amount of
a winning applicant's application, the Commission decided to limit the
total base forfeiture to five percent of the applicant's total assigned
support for the application for the support term.
135. In the event of default, the Bureau will notify and identify
the next-in-line applicant as the new winning applicant. The new
winning applicant will have all the same obligations for submitting
additional information and filings and obligations as did the initial
winning applicant.
136. Non-Compliance Measures Post-Authorization. An applicant that
has received notice from the Commission that it is authorized to
receive Stage 2 support will be subject to non-compliance measures if
it fails or is unable to meet its minimum coverage requirement, other
service requirements, or fails to fulfill any other term or condition
of Stage 2 support. As described in the PR-USVI Stage 2 Order, these
measures will scale with the extent of non-compliance, and include
additional reporting, withholding of support, support recovery, and
drawing on the support recipient's letter of credit if the support
recipient cannot pay back the relevant support by the applicable
deadline. A support recipient may also be subject to other sanctions
for non-compliance with the terms and conditions of Stage 2 support,
including, but not limited to, potential revocation of ETC designations
and suspension or debarment. Additionally, a support recipient will be
subject to any non-compliance measures in conjunction with a
methodology for high-cost support recipients to measure and report
speed and latency performance to fixed locations.
D. Closing Conditions
137. The Stage 2 Competition window for applicants will close on a
date to be announced by the Bureau. No further applications will be
accepted after that time. To avoid concerns related to electronic or
technical errors, the Bureau encourages applicants to submit ahead of
this time and date. The Bureau will confirm receipt via electronic mail
of each application received by the deadline.
E. Competition Announcements
138. The Bureau will make announcements as necessary to report or
request information from applicants during the Stage 2 Competition.
Announcements will be available at the FCC's website.
F. Competition Results
139. The Bureaus will determine the winning applicants as described
elsewhere in this Public Notice and will announce the results in a
public notice. The Bureau will make the final overall application
scores for all applicants available for public viewing after winning
applicants are authorized to receive support. Winning applicants will
then be required to complete the necessary actions described in this
Public Notice to become authorized for support.
IV. Post--Competition Procedures
A. Authorization Public Notice
140. After the Stage 2 Competition has ended, the Bureau will issue
a public notice declaring the competition closed, identifying the
winning applicants, and establishing the deadline for submission of
further information for authorizing support. Winning applicants will
file the information using ECFS and email to the Bureau. Details
regarding the
[[Page 15997]]
submission requirements will be provided in the public notice. After
the information has been reviewed and is considered to be complete,
including the Disaster Preparation and Response Plan, and the winning
applicant has submitted an acceptable letter of credit and accompanying
Bankruptcy Code opinion letter as described in the following, a public
notice will be released authorizing the winning applicant to receive
Stage 2 support.
B. Eligible Telecommunications Carrier Designation and Certification
141. Within 60 days after the release of the winning applicants
public notice, a winning applicant is required to submit appropriate
documentation of its high-cost ETC designation in all the areas for
which it will receive support. Appropriate documentation should include
the original designation order, any relevant modifications, e.g.,
expansion of service area or inclusion of wireless, along with any
name-change orders. An applicant is also required to provide
documentation showing that the designated areas (e.g., census blocks,
wire centers, etc.) cover the relevant winning application areas so
that it is clear that the winning applicant has high-cost ETC status in
each winning application area. Such documentation could include maps of
the applicant's ETC designation area, map overlays of the winning
application areas, and/or charts listing designated areas.
Additionally, an applicant is required to submit a letter with its
documentation from an officer of the company certifying that the
applicant's ETC designation for each state covers the relevant areas
where the applicant will receive support.
C. Letter of Credit and Bankruptcy Code Opinion Letter
142. After an application has been reviewed and is considered to be
complete, the Commission will issue a public notice identifying each
winning applicant that may be authorized to receive Stage 2 support. No
later than 10 business days after the release of the public notice, an
applicant must obtain an irrevocable standby letter of credit at the
value specified in Sec. 54.1508(b) from a bank acceptable to the
Commission as set forth in Sec. 54.1508(c) for each territory where
the applicant is seeking to be authorized. The letter of credit must be
issued in substantially the same form as set forth in the model letter
of credit provided in Appendix B of the Public Notice.
143. In addition, a winning applicant will be required to provide
with the letter of credit an opinion letter from 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 applicant's bankruptcy estate,
or the bankruptcy estate of any other applicant-related entity
requesting issuance of the letter of credit, under section 541 of the
Bankruptcy Code.
144. New and Renewed Letter of Credit. A winning application
receiving Stage 2 support may obtain a new or renewed Letter of Credit
after successfully achieving its deployment milestones. When a winning
applicant first obtains a letter of credit, it must be at least equal
to the amount of the first year of authorized support. Before the
winning applicant can receive its next year's support, it must modify,
renew, or obtain a new letter of credit to ensure that it is valued at
a minimum at the total amount of money that has already been disbursed
plus the amount of money that is going to be provided in the next year.
145. The Commission found that, as a recipient makes progress
towards building its network, it is appropriate to modestly reduce the
value of the letter of credit in an effort to reduce the cost of
maintaining a letter of credit as the recipient meets certain service
milestones. Specifically, once an entity meets the 60 percent service
milestone that entity may obtain a new letter of credit or renew its
existing letter of credit so that it is valued at 90 percent of the
total support amount already disbursed plus the amount that will be
disbursed the next year. Once the entity meets the 80 percent service
milestone that entity may obtain a new letter of credit valued at 80
percent of the total support amount already disbursed plus the amount
that will be disbursed the next year. The letter of credit must remain
open until the recipient has certified it has deployed broadband and
voice service meeting the Commission's requirements to 100% of the
required number of locations, and USAC has verified that the entity has
fully deployed.
D. Location Adjustment Process
146. Submission Due Date and Format for Submission. The Bureau
expects the adjustment window to open on or about one year following
the notice announcing Stage 2 winning applicants. The Bureau will
announce the specific dates of the location adjustment submission
filing window and stakeholder comment period in the public notice
announcing the winning Stage 2 applicants. By the closing date, if a
winning applicant cannot identify actual locations totaling the number
announced in the Reserve Price Public Notice on December 19, 2019, it
must file its proposed actual location number and all relevant
supporting information, including maps, studies, certifications,
documents, and any other evidence with the Bureau via electronic mail
at [email protected]. The applicant must include geolocation data
(indicating the latitude/longitude and address) for each actual
location it can identify and for each winning area. An applicant must
also include a certification for its assertion. The information and
evidence submitted will be subject to potential audit.
147. 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 window certifying to that effect and accepting the number of
locations the Bureau announced in the Reserve Price Public Notice on
December 19, 2019, as its location obligation.
148. Stakeholder Comment Period. Following the window closing date,
relevant stakeholders will have 30 days to review and comment on the
information submitted by the winning applicants. There will be no reply
comment period for the winning applicants.
149. Adjustment Order. After the comment period is closed, Bureau
staff will review all evidence submitted by the support recipients and
all relevant comments. The Bureau will then issue an order addressing
the recipients' showings, which will establish and announce the final
location obligations for each recipient.
E. Five-Year Review
150. A support recipient may choose to participate in the voluntary
five-year review process to reassess its deployment obligations. As
directed, the Bureau will release a public notice detailing the five-
year review process no later than the beginning of the fifth year of
Stage 2 support to provide recipients an opportunity to request
reassessment of their deployment obligations. The Bureau expects any
request for reassessment will be accompanied by specific information,
documents, evidence and data upon which the Bureau can make an informed
decision. This reassessment will allow the Bureau to determine whether
to adjust any deployment requirements based on newly available data or
changed circumstances such as disruptive disasters, altered
subscribership or significantly decreased revenue due to
[[Page 15998]]
population shifts. In the five-year review process public notice, the
Bureau will establish a public comment period for any support recipient
requesting reassessment, which will allow public review of the
documentation, data, and evidence put forward to support the request.
Following the close of the public comment period, the Bureau will
review and evaluate the record for each requesting support recipient.
If, based on the Bureau's review, an adjustment of deployment
obligations or locations is warranted for any winning applicant, the
Bureau will announce those changes in a public notice.
F. Updating the Disaster Preparation and Response Plan
151. As indicated in this document, 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 or disqualification from future participation in
the Commission's competitive competitions.
G. Mandatory Filing in Disaster Information Reporting System (DIRS)
152. All Stage 2 support recipients are required to perform DIRS
reporting when the system is activated. The Commission will determine
whether to activate DIRS in coordination with DHS and FEMA, and will
announce the areas that will be covered via public notice and
electronic mail. Following normal Commission protocol, the Bureau will
continue to activate DIRS and notify providers of its reporting
schedule, typically in advance of an expected impending disaster event
or immediately after such a disaster. Also pursuant to normal
Commission protocol, DIRS reporting obligations begin at the time of
DIRS activation, which may be immediately before, at the onset of, or
immediately after a disaster event, with reports due each time a
provider's restoration status changes. The Bureau notes that support
recipients are not required to report daily via DIRS when there is no
change in restoration status, and instead are only required to make
updates on changes in restoration status when they occur. The only
difference from ordinary Commission protocol is that DIRS reporting is
mandatory for Stage 2 support recipients for as long as a recipient is
receiving Stage 2 support.
153. Stage 2 funding recipients that fail to meet this mandatory
DIRS reporting obligation may be subject to penalties and sanctions
through the withholding of Stage 2 funds and/or disqualification from
participating in future Stage 3 mobile support. However, the Bureau
will not impose a penalty or sanctions if reporting deadline(s) cannot
be met for reasons reasonably beyond a participant's control (e.g. loss
of communications that precludes access to DIRS). In that case, the
Bureau requires instead that providers begin and/or resume DIRS
reporting according to the reporting schedule as soon as they are
reasonably able to do so.
V. Procedural Matters
A. Paperwork Reduction Act Analysis
154. This document implements the information collections adopted
in the PR-USVI Stage 2 Order and does not contain any additional
information collection(s) subject to the Paperwork Reduction Act of
1995 (PRA), Public Law 104-13. The Commission is currently seeking PRA
approval for information collections related to the PR-USVI Stage 2
Competition application process. Therefore, this document does not
contain any new or modified information collection burden for small
business concerns with fewer than 25 employees, pursuant to the Small
Business Paperwork Relief Act of 2002, Public Law 107-198.
B. Congressional Review Act
155. The Commission has determined, and the Administrator of the
Office of Information and Regulatory Affairs, Office of Management and
Budget, concurs that these rules are ``non-major'' under the
Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a
copy of this Public Notice to Congress and the Government
Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).
C. Legal Authority
156. The Bureau establishes procedures for the Stage 2 Competition
pursuant to the authority contained in sections 1, 2, 4(i), 214, 254,
303(r), 403, and 405 of the Communications Act of 1934, as amended, 47
U.S.C. 151, 152, 154(i), 214, 254, 303(r), 403, and 405, and Sec. Sec.
1.1, 1.3, 1.425 and 1.429 of the Commission's rules, 47 CFR 1.1, 1.3,
1.425 and 1.429.
D. Supplemental Regulatory Flexibility Analysis
157. In the PR-USVI Stage 2 Order, the Commission conducted a Final
Regulatory Flexibility Analyses (FRFAs) as required by the Regulatory
Flexibility Act of 1980, as amended (RFA). The Bureau anticipated that
the Order will not affect a substantial number of carriers and,
therefore, certified the Order would not affect a substantial number of
small entities.
158. This document establishes procedures for the Connect America
Uniendo a Puerto Rico Fund and Connect USVI Fund Stage 2 Competition
(PR-USVI Stage 2 Competition or Stage 2 Competition). The procedures
established in this document are consistent with the PR-USVI Stage 2
Order and FRFA is not required for this document.
VI. Contact Information
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FCC Email & Webpages................... [email protected], http://www.fcc.gov.
General Uniendo a Puerto Rico Fund and Wireline Competition Bureau
Connect USVI Fund Questions. Telecommunications Access
Policy Division, Alex Minard,
Rebekah Douglas, 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 Consumer and Governmental
print, electronic files, or audio Affairs Bureau, (202) 418-0530
format for people with disabilities. or (202) 418-0432 (TTY),
[email protected].
Small Businesses: Additional Office of Communications
information for small and Business Opportunities, (202)
disadvantaged businesses. 418-0990, http://www.fcc.gov/ocbo/ ocbo/.
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[[Page 15999]]
Federal Communications Commission
Kirk Burgee,
Chief of Staff, Wireline Competition Bureau.
[FR Doc. 2020-05508 Filed 3-19-20; 8:45 am]
BILLING CODE 6712-01-P