Federal Communications Commission DA 99-2970
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Federal-State Joint Board on ) CC Docket No. 96-45
Universal Service )
ORDER
Adopted: December 22, 1999 Released: December 23, 1999
By the Common Carrier Bureau:
I. INTRODUCTION
1. Gila River Telecommunications, Inc. (Gila River), Tohono O'odham Utility Authority (Tohono O'odham), San Carlos Apache Telecommunications Utility, Inc. (San Carlos), and Fort Mojave Telecommunications, Inc. (Fort Mojave) have all filed petitions for waiver of section 54.403(a) of the Commission's rules. These four petitioners, all located in Arizona, ask that we waive the requirement in section 54.403(a) that requires state commission action before they can receive federal Lifeline support reimbursements, as none of the four are subject to the jurisdiction of a state telecommunications regulatory commission. In addition to the $3.50 per month per Lifeline subscriber in federal universal service funds that petitioners already receive, they seek two additional monthly payments of $1.75 per subscriber each, for a total of $7.00 per month per subscriber. First, they seek $1.75 per month, which Commission rules condition on state commission approval that the funds be reflected in a reduction in the basic local monthly rates available to customers eligible for Lifeline service, which become state Lifeline rates. Second, petitioners seek the additional $1.75 per month per Lifeline subscriber that Commission rules condition on matching state contributions. We grant temporary waivers as to both amounts until the Commission addresses this specific issue directly in the Unserved Areas proceeding.[1]
II. BACKGROUND AND PETITIONS
A. Federal Lifeline Support
2. The Commission's Lifeline support program provides carriers with three elements of universal service support. First, all carriers receive baseline support of $3.50 per month per Lifeline customer in the form of a waiver of the federal subscriber line charge.[2] Second, an additional $1.75 per month is available to Lifeline customers if "the state commission approves an additional reduction of $1.75 in the amount paid by consumers. . . ."[3] Finally, under the third element of support, carriers can receive federal matching funds of 50 percent of the amount of state Lifeline support, up to a maximum of an additional $1.75 per month per Lifeline subscriber, assuming that the entire amount is passed on to subscribers.[4]
3. In August 1999, the Commission adopted the Unserved Areas Notice, which examined many issues affecting the low telephone penetration rates on Indian reservations.[5] In particular, the Notice asked what changes, if any, the Commission should make to its requirements that a carrier seeking the maximum level of federal Lifeline support must obtain state approval and secure state matching funds if the carrier is not subject to the jurisdiction of a state.[6]
B. The Petitions
4. In February 1998, the Common Carrier Bureau (Bureau) designated Gila River, Tohono O'odham, San Carlos, and Fort Mojave as eligible telecommunications carriers (ETCs) under section 214(e)(6) of the Communications Act.[7] The Bureau concluded from the record that the petitioners are not subject to the jurisdiction of a state commission for the purposes of section 214(e)(6).[8] Petitioners now ask us to recognize the implications of this lack of state jurisdiction with respect to the requirements of section 54.403(a) of the Commission's rules.[9]
5. Petitioners assert that, because they are not subject to the jurisdiction of a state commission, they should not be required to secure either state commission approval of reductions in their state Lifeline rates or state matching funds. Petitioners explain that they are "subject to the jurisdiction of a distinct federally-recognized Indian tribe, which regulates the provision of telecommunications services within tribal lands."[10] Furthermore, petitioners contend that a waiver of section 54.403(a) would be in the public interest because "Native American communities have the lowest subscribership and highest poverty ratios in the Nation" and all have subscribership levels for basic telephone service "significantly below the national average."[11] All seek to improve subscribership by lowering the Lifeline service rates. Petitioners also state that they cannot participate in the Arizona support plan and that it is not feasible for their tribal governments to develop support plans because the mix of Lifeline and non-Lifeline customers on the reservation cannot provide the funds needed to fulfill the matching fund requirement.[12]
6. In addition, Fort Mojave notes that it has been reducing its Lifeline rates by an additional $1.75 per month since January 1, 1998, and it asks that we grant this waiver retroactive to January 1, 1998.[13]
III. DISCUSSION
7. Generally the Commission's rules may be waived for good cause shown.[14] But, as noted by the Court of Appeals for the D.C. Circuit, agency rules are presumed valid, and "an applicant for waiver faces a high hurdle even at the starting gate."[15] The Commission may exercise its general discretion to waive a rule where the particular facts make strict compliance inconsistent with the public interest.[16] In addition, the Commission may take into account considerations of hardship, equity, or more effective implementation of overall policy on an individual basis.[17] Waiver is therefore appropriate if special circumstances warrant a deviation from the general rule, and such deviation would better serve the public interest than strict adherence to the general rule.[18]
A. Non-Matching Federal Lifeline Support
8. As acknowledged in the Unserved Areas Notice, in drafting its Lifeline requirements, the Commission’s current Lifeline rules do not consider the situation faced by carriers not subject to the jurisdiction of a state commission.[19] The Lifeline rules were intended to show deference to the states in areas of traditional state expertise and authority. In the Unserved Areas Notice, the Commission has proposed to modify section 54.403(a) to provide to a carrier an additional $1.75 per qualifying low-income consumer where the additional support will result in an equivalent reduction in the monthly bill of each qualifying low-income consumer. This proposed revision is intended to eliminate the need for carriers not subject to the jurisdiction of a state commission to seek state commission action or a Commission waiver.[20]
9. The Bureau has already determined that the State of Arizona does not exercise jurisdiction over petitioners.[21] Thus, the Arizona Corporation Commission's approval is not required for petitioners to pass on to their subscribers the full amount of the $1.75 per month per Lifeline subscriber. Petitioners have also filed ex parte letters indicating that their tribal authorities have approved, or are in the process of approving, their plans to pass on the $1.75 per month in lower Lifeline rates.[22] Since these tribal authorities represent the non-federal entities that could prevent petitioners from providing the additional $1.75 per month discounts, their approval and the lack of any opposition to this petition convince us that granting this waiver will better serve the purposes of the Lifeline program than would adherence to the rule in this instance. Therefore, although the Commission may take a different position on this matter in the proceeding initiated in the Unserved Areas Notice, we find that petitioners have met their burden to receive a temporary waiver of this part of the Commission's rules until the Commission addresses this issue in that proceeding and any rules adopted at that time take effect.[23] We find that the petitioners are eligible for the $1.75 in Lifeline funds that Commission rules condition on state approval of passing on such support to Lifeline subscribers in the form of lower basic rates, subject to future Commission action in the pending Unserved Areas proceeding.
10. Furthermore, because Fort Mojave has been reducing its state Lifeline rates by an additional $1.75 since January 1, 1998, in furtherance of the Commission's clear policy to promote such specific discounts, we also grant this waiver retroactive to January 1, 1998 for Fort Mojave. We note that our interpretation of section 54.403(a) in this instance is dependent upon the carriers in question not being subject to the jurisdiction of a state commission.
B. Matching Federal Lifeline Support
11. Petitioners also seek a waiver of the requirement that the Arizona state commission provide state Lifeline support in order for them to receive additional federal support of up to $1.75 per month in funds based on $.50 in matching federal support for every $1.00 in state support to reach the maximum federal support level of $7.00 per Lifeline subscriber. The Federal-State Joint Board on Universal Service (Joint Board) and the Commission endorsed this matching requirement to aid Lifeline customers by encouraging significant state support in addition to the federal support provided.[24] Both the Joint Board and the Commission hoped that this rule would generate at least $10.50 per month per subscriber in Lifeline support by encouraging state authorities to generate at least $3.50 per customer in Lifeline support. Petitioners argue that it is not feasible for their tribal governments to develop support plans because they do not have sufficient pools of customers or residents, with the mix of Lifeline and non-Lifeline customers that might be found in an entire state, to recover equitably the funds needed to fulfill the matching requirement.[25]
12. In the Unserved Areas Notice, the Commission sought comment on modifying this matching rule.[26] Noting that the federal government has a special trust relationship with Indian tribes, and that this relationship entails special responsibilities, the Commission sought comment on whether the federal government should provide carriers serving tribal lands with the additional $1.75 in support without requiring any matching funds from the state or tribe. The Commission observed that penetration levels for Indians on reservations appear to be relatively low, even when compared to the levels for other Americans of similar economic status living in rural areas.[27] In fact, while the nationwide average penetration rate for households with incomes below $5,000 living in rural areas was 74.4 percent,[28] the telephone penetration rates for all Indian households on reservations averaged approximately 46.6 percent,[29] including 1998 rates as low as 17.9 percent for the White Mountain Apache Tribe and 22.5 percent on the Navajo reservation.[30]
13. We conclude that it is in the public interest to grant, on a temporary basis, petitioners’ requests for a waiver of the Lifeline matching requirement in section 54.403(a).[31] We find that the low penetration and income levels on reservations, the lack of any opposition to this petition, and the Commission’s policy of fostering access to the public telephone network for those most in need further justify a temporary waiver of the rule. We emphasize that this waiver shall remain in effect until the Commission determines whether to modify the Lifeline matching requirement in the Unserved Areas proceeding. In addition, because Fort Mojave has been reducing its state Lifeline rates by $1.75 per month more than the $3.50 per line baseline support since January 1, 1998 we find that it is in the public interest to grant Fort Mojave's request that this waiver, as applied to Fort Mojave, be retroactive to January 1, 1998.
IV. ORDERING CLAUSE
14. Accordingly, IT IS ORDERED that, pursuant to the authority contained in sections 1-4, 10, 201-205, 254, 303(r), and 405 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 160, 201-205, 254, 303(r), and 405, and section 1.3 of the Commission's rules, 47 C.F.R. § 1.3 the Petitions for Waiver filed by Gila River Telecommunications, Inc., Tohono O'odham Utility Authority, San Carlos Apache Telecommunications Utility, Inc., and Fort Mojave Telecommunications, Inc. ARE GRANTED temporarily, until the Commission rules on these issues in a further proceeding and any rules adopted in that proceeding go into effect.
FEDERAL COMMUNICATIONS COMMISSION
Yog R. Varma
Deputy Chief, Common Carrier Bureau
[1] Federal-State Joint Board on Universal Service, Promoting Deployment and Subscribership in Unserved and Underserved Areas, Including Tribal and Insular Areas, Further Notice of Proposed Rulemaking, CC Docket No. 96-45, FCC 99-204 (released Sept. 3, 1999) (Unserved Areas Notice).
[2] 47 C.F.R. § 54.403(a).
[3] Id.
[4] Id.
[5] See supra note 1.
[6] Id. at para. 69.
[7] See Designation of Fort Mojave Telecommunications, Inc., Gila River Telecommunications, Inc., San Carlos Telecommunications, Inc., and Tohono O'odham Utility Authority as Eligible Telecommunications Carriers Pursuant to Section 214(e)(6) of the Communications Act, AAD/USB File No. 98-28, 13 FCC Rcd 4547 (Com.Car.Bur. 1998) (ETC Designation Order). 47 U.S.C. § 214(e)(6).
[8] ETC Designation Order at 4549, para. 4.
[9] The parties filed petitions on January 22, 1999 (Gila River); January 26, 1999 (Tohono O'odham); February 12, 1999 (San Carlos); and February 17, 1999 (Fort Mojave).
[10] Petitions at 2.
[11] Id. at 4-5. The respective subscribership levels reported are 30 percent (Gila River), 70 percent (Tohono O'odham), 86 percent (Fort Mojave), and 80-90 percent (San Carlos).
[12] Id. at 6.
[13] Fort Mojave Petition at 6.
[14] 47 C.F.R. § 1.3.
[15] WAIT Radio v. FCC, 418 F.2d 1153, 1157 (D.C. Cir. 1969), cert. denied, 409 U.S. 1027 (1972) (WAIT Radio).
[16] Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164 (D.C. Cir. 1990).
[17] WAIT Radio, 418 F.2d at 1157.
[18] Northeast Cellular, 897 F.2d at 1166.
[19] Unserved Areas Notice, at para. 69.
[20] Id.
[21] See supra note 8.
[22] Letter from Sylvia Lesse, attorney for Petitioners, to Magalie Roman Salas, FCC, July 28, 1999 (enclosing a copy of a resolution of the Tohono O'odham Legislative Council approving a rate reduction); Letter from Sylvia Lesse, attorney for Petitioners, to Magalie Roman Salas, FCC, May 27, 1999.
[23] WAIT Radio, 418 F.2d at 1157; Northeast Cellular, 897 F.2d at 1166.
[24] See, e.g., Federal-State Joint Board on Universal Service, First Recommended Decision, CC Docket No. 96-45, 12 FCC Rcd 87, 301-02 (1996); Federal-State Joint Board on Universal Service, First Report and Order, 12 FCC Rcd 8776, 8963 (1997) as corrected by Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Erratum, FCC 97-157 (rel. June 4, 1997), aff'd in part, rev'd in part, remanded in part sub nom. Texas Office of Public Utility Counsel v. FCC, 183 F.3d 393 (5th Cir. 1999), petition for stay granted in part (Sept. 28, 1999), petitions for rehearing and rehearing en banc denied (Sept. 28, 1999).
[25] Petitions at 6.
[26] Unserved Areas Notice at para. 70.
[27] Id. at para. 5.
[28] Although this result is based on a 1997 survey, see NTIA, Falling Through the Net II: New Data on the Digital Divide (1998) at Table 3, <http://www.ntia.doc.gov/ntiahome/net2/charts.html>, the data in this area appear to have been relatively stable in the 1990s.
[29] See Bureau of the Census, Statistical Brief, Housing of American Indians on Reservations -- Equipment and Fuels, SB/95-11, April 1995 at 2 (using 1990 census data).
[30] See Testimony of Aloa Stevens, Citizens Communications, at FCC Hearing, Gila River Reservations, Chandler, Arizona, Mar. 23, 1999, transcript at 91-92 (draft) (Arizona 1999 hearing transcript).
[31] 47 C.F.R. § 54.403(a).