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WCB Clarifies ETC Reporting Requirements and Waives Five-Year Plan

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Released: May 16, 2013

Federal Communications Commission

DA 13-1115

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Connect America Fund
)
WC Docket No. 10-90
)

ORDER

Adopted: May 16, 2013

Released: May 16, 2013

By the Chief, Wireline Competition Bureau:

I.

INTRODUCTION

1.
In this Order, the Wireline Competition Bureau (Bureau) further clarifies annual
reporting obligations for 2013 and 2014 in response to informal inquiries from eligible
telecommunications carriers (ETCs) regarding the scope of reporting obligations currently under
Paperwork Reduction Act (PRA) review by the Office of Management and Budget (OMB).1 The Bureau
also waives the requirement that rate-of-return ETCs file five-year service quality improvement plans in
2013, in response to a petition filed by NTCA – The Rural Broadband Association (NTCA), the Eastern
Rural Telecom Association (ERTA), the Independent Telephone Telecommunications Alliance (ITTA),
the National Exchange Carrier Association, Inc. (NECA), the United States Telecom Association
(USTelecom), and the Western Telecommunications Alliance (WTA) (collectively, Rural Associations).2

II.

BACKGROUND

2.
In the USF/ICC Transformation Order, the Commission adopted several reforms to
harmonize and update annual ETC reporting requirements.3 The Commission extended reporting
requirements for voice service to all ETCs and adopted new reporting requirements to reflect new
broadband obligations.4 The Commission required all ETCs subject to new broadband obligations to file
five-year service quality improvement plans in a manner consistent with section 54.202(a)(1)(ii) in 2013,

1 Pursuant to the Paperwork Reduction Act of 1995, Public Law 104-13, the Bureau is currently seeking approval from
the Office of Management and Budget (OMB) for information collection number 3060-0986.
2 See Emergency Petition for Clarification, or in the Alternative Waiver, of NTCA – The Rural Broadband
Association et al., WC Docket No. 10-90 et al. (filed Apr. 1, 2013) (Rural Associations Petition); see also Connect
America Fund et al
., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed Rulemaking, 26
FCC Rcd 17663 (2011) (USF/ICC Transformation Order), pets. for review pending sub nom. In re: FCC 11-161,
No. 11-9900 (10th Cir. filed Dec. 8, 2011); Connect America Fund et al., WC Docket No. 10-90 et al., Third Order
on Reconsideration, 27 FCC Rcd 5622 (2012) (Third Reconsideration Order); Connect America Fund et al., WC
Docket No. 10-90 et al., Order, 28 FCC Rcd 2051 (Wireline Comp. Bur. 2013) (ETC Reporting Clarification
Order
).
3 USF/ICC Transformation Order, 26 FCC Rcd at 17852, para. 579.
4 Id.

Federal Communications Commission

DA 13-1115

and annual progress reports thereafter.5 Subsequently, the Bureau waived the requirement for price cap
carriers to file five-year plans until after such carriers accept Connect America Phase II support.6

III.

DISCUSSION

3.
The Bureau reiterates that all ETCs will be required to file an annual report in 2013
pursuant to the OMB-approved sections of 54.313.7 The Commission announced that it had received
PRA approval for the reporting on ETCs’ voice service obligations in sections 54.313(a)(1) through (a)(6)
and (h) on May 8, 2012.8 Pursuant to that existing approval, an incumbent carrier ETC’s annual report
filed in 2013 should include information as it relates to its provision of voice service in calendar year
2012 in response to section 54.313(a)(2) through 54.313(a)(6). ETCs thus are required to provide
information in their 2013 annual report relating to their provision of voice service for those aspects of the
rule requiring them to report data for the prior calendar year.9 Incumbent carrier ETCs also must report
voice rates that were less than $14 as of June 1, 2013, and the number of lines for each such rate, in
response to section 54.313(h).
4.
The Bureau is currently seeking approval for additional provisions of sections 54.313 and
anticipates receiving such approval shortly before the July 1st filing deadline.10 The Bureau intends to
provide affected ETCs with at least thirty days after PRA approval is announced in the Federal Register to
file the relevant information required in the 2013 annual report.
5.
Subject to PRA approval, an incumbent carrier ETC will be required to file information
for the following additional requirements: its holding company, operating companies, ETC affiliates11
and any branding in response to section 54.313(a)(8); its CAF-ICC certification, if applicable, in response
to section 54.313(d); its financial information, if a privately held rate-of-return carrier, in response to
section 54.313(f)(2); and its satellite backhaul certification, if applicable, in response to section 54.313(g).
6.
We also take this opportunity to clarify what broadband-related information rate-of-return
ETCs will be required to report in 2014, once OMB approval is obtained. In the USF/ICC
Transformation Order
, as a condition of receiving support for ongoing operations of mixed-use facilities
capable of providing voice and broadband service, the Commission required rate-of-return carriers that
receive HCLS, ICLS, or new CAF-ICC support to provide broadband service to their customers upon
reasonable request.12 We clarify that for purposes of reporting regarding this obligation, the relevant
“customer” is the end-user customer of the retail broadband Internet access service, regardless of whether
that customer purchases that retail service directly from the ETC or from an Internet service provider that

5 Id. at 17854, para. 587.
6 See ETC Reporting Clarification Order, 28 FCC Rcd at 2054, para. 8. Only those price cap ETCs that accept
Phase II funding will be required to file five-year plans.
7 ETCs should file pursuant to the instructions published by the Wireline Competition Bureau once PRA approval is
received for the request currently pending with OMB.
8 See 77 Fed. Reg. 26987 (May 8, 2012).
9 47 C.F.R. § 54.313(a). ETCs should have begun collecting such information after May 8, 2012, when the Bureau
announced PRA approval for those sections.
10 Pursuant to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13, the Bureau is currently seeking
approval from the Office of Management and Budget (OMB) for information collection number 3060-0986.
11 For purposes of this requirement, the ETC is required to report all affiliates as defined under section 3 of the
Communications Act, 47 U.S.C. § 153(3), that are also designated as ETCs or that provide retail broadband Internet
access to end-user customers.
12 USF/ICC Transformation Order, 26 FCC Rcd at 17740, para. 206.
2

Federal Communications Commission

DA 13-1115

purchases the ETC’s wholesale broadband transmission service offering. The Commission required
ETCs to include in their annual reports the number of unfulfilled requests for service from potential
customers and the number of customer complaints, broken out separately for voice and broadband
services.13 Further, beginning July 1, 2014, all rate-of-return ETCs must certify that they are taking
reasonable steps to offer broadband service meeting the Commission’s specific service requirements
throughout their service area, and that requests for such service are met within a reasonable amount of
time.14 To give full effect to that rule, we clarify that such certifications must be made regarding the
provision of broadband Internet access either directly or indirectly to end-user customers.
7.
The Commission committed to monitoring ETCs’ annual reports to determine whether
reasonable requests for broadband service are being fulfilled, and encouraged states and Tribal
governments to do the same.15 As a condition of receiving federal support, the Commission required
ETCs to report information in order to monitor progress in achieving its broadband goals and to assist the
Commission in determining whether universal service funding is being used for the intended purposes.16
The Commission expects that states (or the ETC if the state lacks jurisdiction) will use the information
reported in July of each year in determining whether they can certify that carriers’ support has been used
and will be used to maintain and extend modern networks capable of providing voice and broadband
service.17 To read the Commission’s rule as requiring only reporting with respect to the provision of
broadband transmission service to an affiliated ISP would substantially thwart the Commission’s overall
framework for accountability and oversight, as the Commission’s ultimate focus is on residential
households, anchor institutions, and business customers across the nation.18 Therefore, once PRA
approval is obtained, rate-of-return ETCs must begin collecting for calendar year 2013 the relevant
information on broadband Internet access service provided either directly or indirectly to end-user
customers, in satisfaction of their federal high-cost universal service obligations, in order to report such
information in their 2014 annual report.19
8.
Finally, in response to the Rural Associations’ Petition,20 the Bureau finds that it is in the
public interest to grant a limited waiver of the requirement that rate-of-return ETCs submit a five-year
plan in 2013.21 Instead, rate-of-return ETCs will be required to file five-year plans with their 2014 annual
reports. The Bureau notes that price-cap carriers that accept Connect America Phase II support are
required to file their five-year plans on July 1, 2014.22 By allowing rate-of-return ETCs to file their first

13 Id. at 17741, para. 208; see also 47 C.F.R. § 54.313(a)(3)-(4).
14 USF/ICC Transformation Order, 26 FCC Rcd at 17854, para. 588; see also 47 C.F.R. § 54.313(f)(1)(i).
15 USF/ICC Transformation Order, 26 FCC Rcd at 17741, para. 208.
16 Id. at 17852, para. 580; see also 47 U.S.C. § 254(e).
17USF/ICC Transformation Order, 26 FCC Rcd at 17861, para. 612; see also 47 C.F.R. § 54.314(a).
18 USF/ICC Transformation Order, 26 FCC Rcd at 17681, paras. 51-52.
19 See 47 C.F.R. § 54.313(a)(2)-(7).
20 Rural Associations Petition at 5-8.
21 Generally, the Commission’s rules may be waived if good cause is shown. 47 C.F.R. § 1.3. The Commission
may exercise its discretion to waive a rule where the particular facts make strict compliance inconsistent with the
public interest. Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (Northeast
Cellular
). In addition, the Commission may take into account considerations of hardship, equity, or more effective
implementation of overall policy on an individual basis. WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir. 1969);
Northeast Cellular, 897 F.2d at 1166. Waiver of the Commission’s rules is appropriate if special circumstances
warrant a deviation from the general rule, and such deviation will serve the public interest. Northeast Cellular, 897
F.2d at 1166.
22See ETC Reporting Clarification Order, 28 FCC Rcd at 2054, para. 8.
3

Federal Communications Commission

DA 13-1115

five-year plan on July 1, 2014, we will bring conformity in filing dates across all incumbent ETCs,
thereby simplifying administrative processing for USAC.

IV.

ORDERING CLAUSES

9.
Accordingly, IT IS ORDERED that, pursuant to sections 1, 4, and 254 of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154, 254, and sections 0.91, 0.291, and 1.3
of the Commission’s rules, 47 C.F.R. §§ 0.91, 0.291, 1.3, the emergency petition for clarification, or in
the alternative waiver, filed by NTCA – The Rural Broadband Association, the Eastern Rural Telecom
Association, the Independent Telephone Telecommunications Alliance, the National Exchange Carrier
Association, Inc., the United States Telecom Association, and the Western Telecommunications Alliance
IS GRANTED IN PART, to the extent described herein, and DENIED IN PART, to the extent described
herein.
10.
IT IS FURTHER ORDERED that, pursuant to section 1.102(b)(1) of the Commission’s
rules, 47 C.F.R. § 1.102(b)(1), this Order SHALL BE EFFECTIVE upon release.
FEDERAL COMMUNICATIONS COMMISSION
Julie A. Veach
Chief, Wireline Competition Bureau
4

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