[Federal Register: November 1, 2005 (Volume 70, Number 210)]
[Rules and Regulations]
[Page 65850-65861]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no05-12]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[CC Docket Nos. 96-45; 02-6; WC Docket 02-60; 03-109; FCC 05-178]
Federal-State Joint Board on Universal Service
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Commission takes immediate steps to
assist the victims of Hurricane Katrina by making available
approximately $211 million of targeted support from the Universal
Service Fund (``USF'') for reconstruction and remediation relating to
the restoration of telecommunications services. We expect that these
measures will help the victims of Hurricane Katrina recover from the
catastrophic damage and help the affected communities rebuild.
[[Page 65851]]
DATES: Effective October 14, 2005.
FOR FURTHER INFORMATION CONTACT: Mika Savir, Attorney, Wireline
Competition Bureau, Telecommunications Access Policy Division, (202)
418-7400, TTY (202) 418-0484. For additional information concerning the
information collection(s) contained in this document, contact Judith-B.
Herman at (202) 418-0214, or via the Internet at
Judith-B.Herman@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order,
in CC Docket Nos. 96-45; 02-6; WC Docket 02-60; 03-109; FCC 05-178,
released October 14, 2005. 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.
I. Introduction
1. In this Order, we take immediate steps to assist the victims of
Hurricane Katrina by making available approximately $211 million of
targeted support from the Universal Service Fund (``USF'') for
reconstruction and remediation relating to the restoration of
telecommunications services. We expect that these measures will help
the victims of Hurricane Katrina recover from the catastrophic damage
and help the affected communities rebuild. As explained below, because
of the exigent circumstances, we find good cause to adopt temporary
order without notice-and-comment in order to assist the Nation's
disaster relief effort.
II. Order
A. Waiver Standard
2. Generally, the Commission's rules may be waived for good cause
shown. Waiver of the Commission's rules is therefore appropriate only
if special circumstances warrant a deviation from the general rule, and
such deviation will serve the public interest. As we discuss in more
detail below, we find that the catastrophic damage to lives and
property as a result of Hurricane Katrina in the Gulf Coast states and
the need for expedited restoration of communications presents special
circumstances for waiving certain universal service rules and that such
a waiver is in the public interest.
3. We find that it is appropriate to implement these rules,
effective upon release of this Order, on a temporary basis to expand
funding in the affected areas. We find that the circumstances caused by
Hurricane Katrina create a special need for the Commission to use its
discretion to provide universal service support to health care
providers in the affected areas. This support is necessary to address
the unique circumstances faced by health care providers, schools,
libraries, service providers, and low-income consumers in the states of
Alabama, Louisiana, and Mississippi, and the areas where evacuees have
relocated. The temporary order represents our recognition of the vital
role played by telecommunications and by telemedicine in responding to
the needs in the communities affected by Hurricane Katrina. The
temporary order also furthers the Commission's core responsibility to
make available a rapid nationwide network for the purpose of responding
to national crisis situations. For all of these reasons, we find this
interim relief to be in the public interest.
B. Lifeline/Link-Up Support
1. Need for and Description of Temporary Order
4. In this Order, we adopt temporary modifications to the low-
income program rules to improve the effectiveness of the low-income
support mechanism at meeting the needs of victims of Hurricane Katrina.
Since its inception, Lifeline/Link-Up has provided support for
telephone service to millions of low-income consumers. Nationally, the
telephone penetration rate is 92.4 percent, in large part due to the
success of the Lifeline/Link-Up program and our other universal service
programs. In light of the catastrophic damage caused by the worst
natural disaster this country has faced, thousands of people remain
without basic telephone service. Unless addressed, this lack of access
to telecommunications will lengthen the already-long period of time
anticipated for recovery from the damage caused by Hurricane Katrina.
5. As discussed in more detail below, in this section, we take two
steps to address this significant problem affecting thousands of
people. First, under the Lifeline program, we provide for temporary
support under the federal Lifeline program for eligible
telecommunications carriers making available a wireless service
consumer offering to victims of Hurricane Katrina. Second, we provide
support under the federal Link-Up program to hurricane victims moving
to temporary housing arrangements and to those who return to permanent
residences in the affected areas. To ensure victims of Hurricane
Katrina in need of help receive this assistance, we base the
eligibility criteria for these initiatives on those used by FEMA to
provide individual disaster housing assistance to these people and
entities.
6. In crafting the temporary order, we are informed by the
principles of section 254 and our low-income program rules. Section
254(b) establishes principles upon which the Commission shall base
policies for the preservation and advancement of universal service.
Among other things, these principles state that consumers in all
regions of the Nation, including low-income consumers, should have
access to telecommunications and information services that are
reasonably comparable to those services provided in urban areas and
that are available at rates that are reasonably comparable to rates
charged in urban areas. These principles also recognize that ensuring
rates are affordable is a national priority. In light of these
principles, we conclude that modifying the low-income program by
providing for a wireless service federal Lifeline consumer offering and
providing support under the federal Link-Up program for connection
charges, on a temporary basis, is necessary to assist the disaster
recovery efforts related to Hurricane Katrina.
7. Thousands of people left their homes because of the hurricane.
Many of these people are in temporary shelters or in the process of
finding interim housing and may be without a permanent home or
employment for a period of time. To facilitate the access of evacuees
and other displaced persons to telecommunications services, any person
approved for individual FEMA housing assistance or determined by FEMA
to be eligible for such individual housing assistance relating to the
hurricane will be eligible for federal Lifeline support for a free
wireless handset and a package of at least 300 minutes of use, not to
exceed $130 per household, until March 1, 2006.
8. We find that $130 per household is a reasonable amount of
support for the purchase of a handset and at least 300 minutes based on
the variety of the competitive plans available to consumers throughout
the United States. We note that at least one wireless provider has
indicated this amount of support is sufficient to serve low-income
consumers. Moreover, we find that a minimum of 300 minutes of use per
household will facilitate evacuees and those remaining in the affected
areas to reconnect with loved ones, and make living, housing, and work
arrangements in the wake of the hurricane. In addition, we expect that
upon expiration, customers will retain the wireless phone and in many
instances, be able to purchase additional minutes at discounted rates.
Such
[[Page 65852]]
support will help consumers reconnect to the telecommunications network
as the disaster-struck areas are rebuilt. For purposes of this Order,
we define ``household'' as one adult and his/her dependents, living
together in the same residence. We recognize that many families that
normally live together as one household have been separated due to the
hurricane and the evacuation process and may represent more than one
household for this temporary Lifeline support. Our intent in providing
this support is to assist hurricane victims, regardless of whether they
are in an intact household, separated from family temporarily, or
otherwise. To work within the parameters of the existing program, we
will order this temporary support available to ETCs providing the
supported wireless service consumer offering. We note that to receive
the temporary support, wireless carriers cannot require consumers to
enter into a long-term contract or require service beyond 300 minutes
or March 1, 2006, whichever is shorter.
9. We find that these modifications are economically reasonable and
consistent with the existing framework of the program rules. Under the
Lifeline program, low-income consumers could receive up to $10 per
month or $120 per year. Under the temporary order, qualifying consumers
would receive a $130 benefit, which would also include a handset. We
note that this relief, combined with the action we took earlier with
regard to waiver of the geographic porting requirements, would allow
evacuees to maintain their home phone numbers, and promote continuity
with regard to personal contacts, employment, education, and housing.
Under the unique and devastating circumstances caused by the hurricane
and its aftermath, we conclude that provision of this support,
including a free wireless handset, is consistent with the purpose of
section 254 because it is reasonably necessary to ensure that low
income consumers have immediate access to telecommunications services.
We further find that this support fulfills the Commission's broader
mandate to make wire and radio communication service available to all
people of the United States, and to promote the safety of life and
property. We use our ancillary authority under Title I to include a
free wireless handset.
10. We also adopt temporary order for the Link-Up program to pay
for certain costs to connect victims of the hurricane to the network.
Specifically, we will provide funding under the Link-Up program to
eligible telecommunications carriers to receive, upon submission of an
application and any necessary documentation, $30.00 per qualifying
household for commencing telecommunications service for a single
telecommunications connection at any temporary housing arrangements. To
ensure this temporary support is targeted to those victims of Hurricane
Katrina moving to temporary housing arrangements (e.g., trailer parks
or other temporary housing facilities), we will make this support
available from release of this Order through March 1, 2007. In
addition, we will also permit, under the Link-Up program, eligible
telecommunications carriers to receive (upon submission of an
application and any necessary documentation to the Administrator)
$30.00 per qualifying household returning to a primary residence in the
Hurricane Katrina disaster area for commencing telecommunications
service for a single telecommunications connection, including the
reconnection of service disconnected as a result of Hurricane Katrina.
Based on the numbers provided by FEMA, we estimate that up to 370,000
households would be eligible for this temporary Link-Up support at an
estimated total cost of approximately $12 million.
2. Applicable Time Period
11. Hurricane victims need access to telephone service,
particularly in this emergency situation. Carriers operating in the
disaster areas in Alabama, Louisiana, and Mississippi, as well as in
any state where people have been temporarily relocated, e.g., Texas,
should have the opportunity to assist hurricane victims and receive
appropriate temporary USF support payments. Accordingly, we find that
due to this emergency situation, good cause exists for adopting these
temporary Lifeline rules, which will expire on March 1, 2006,
specifically for free wireless handsets, and at least 300 free minutes
per household for displaced persons, whether they relocate within the
three affected states, relocate to another state outside of the area,
or return home after telephone service has been disconnected. We also
find that good cause exists to adopt temporary Link-Up rules, as
discussed above, which will expire on March 1, 2007.
12. Link-Up support funding is available from the release date of
this Order until March 1, 2007. Any eligible application for Link-Up
support postmarked by March 1, 2007 will receive the special Link-Up
support described above. Wireless Lifeline support is available from
the release date of this Order until March 1, 2006. Any eligible
application for support postmarked by March 1, 2006 is eligible for the
Wireless Lifeline support described above.
3. Eligibility
13. As discussed above, any person approved for FEMA disaster
assistance or determined by FEMA to be eligible for individual
assistance relating to the hurricane will be eligible for temporary
federal Lifeline and Link-Up support, on a per household basis. Section
254(e) of the Communications Act of 1934, as amended, provides that
``only an eligible telecommunications carrier designated under section
214(e) shall be eligible to receive specific Federal universal service
support.'' We adopt several conditions to ensure that this Lifeline and
Link-Up temporary support is used solely to assist victims of Hurricane
Katrina. First, this Lifeline and Link-Up support is only available to
consumers approved for FEMA disaster housing assistance or determined
by FEMA to be eligible for housing assistance relating to the
hurricane. FEMA's rules target housing assistance to individuals and
households who are harmed by a disaster and generally have limited
means. For example, housing assistance is generally not available to
individuals who have adequate rent-free housing accommodations. To
ensure this support is targeted to those consumers with the greatest
need, we are making this temporary support available to those consumers
determined to be eligible for FEMA disaster housing assistance and who
do not have any obligation under FEMA rules to repay FEMA for the
support. Because this is temporary support intended to assist in
disaster relief and restoration, we limit this Link-Up support to one
connection for temporary housing and one reconnection (per household)
for hurricane victims determined to be eligible for individual
assistance under FEMA rules (and who have no obligation to repay the
funds to FEMA) returning to permanent residences in the FEMA-designated
Hurricane Katrina disaster area. We limit the Lifeline support to a
free wireless handset and at least 300 free minutes. Second, the
temporary Link-Up support for reconnections is available only for
circumstances where the consumer was disconnected from service because
of the hurricane or subsequent flooding. Third, we require consumers
qualifying for this support to provide documentary evidence to the ETC
serving them to demonstrate that FEMA determined they were eligible for
individual disaster housing assistance. Proof of FEMA's determination
of
[[Page 65853]]
eligibility for individual housing disaster assistance without
repayment obligations is sufficient. We anticipate that the households
that will receive support under the temporary order would have received
support under the existing low-income program rules if they obtained
telephone service. We note, however, that our Link-Up rules place
certain restrictions on the number of times at the same residence a
low-income consumer may qualify for support. We therefore clarify that
this temporary Link-Up support will be available both for temporary
housing arrangements and for eligible hurricane victims returning to
permanent residences in the Hurricane Katrina disaster area.
14. By adopting these temporary modifications to our Lifeline and
Link-Up programs, we are working within the existing parameters of the
low-income program. The Commission has long relied on participation in
means-tested programs, such as participation in the food stamps
program, to determine eligibility in our low-income program. In 2004,
the Commission expanded eligibility for the low-income program when it
acted upon the Federal-State Joint Board's recommendation to expand the
federal default eligibility criteria to include an income-based
criterion and additional means-tested programs. Under the existing
rules, in cases where a state does not mandate state Lifeline support,
the Commission's rules rely on other means-tested federal assistance
programs (e.g., Temporary Assistance to Needy Families, Federal Public
Housing Assistance, Low Income Home Energy Assistance Program, and the
National School Lunch Program's free lunch program) to determine
eligibility criteria for the low-income program. The approach we adopt
here, i.e., relying on FEMA determinations that a consumer is eligible
for certain individual disaster assistance program, is consistent with
our general approach of using federal assistance programs to determine
consumer eligibility for our low-income program. By relying on FEMA
determinations of household eligibility for disaster housing
assistance, we are targeting this support to households struck by
Hurricane Katrina, and we are using FEMA's determinations as a need-
based program for determining low-income programs eligibility.
15. There are approximately 65 wireless carriers designated as ETCs
in the states of Alabama, Louisiana, and Mississippi. We recognize that
these ETCs, as well as wireless carriers currently designated as ETCs
in other states, may not be sufficient to implement the temporary order
in time to help with Hurricane Katrina disaster relief or may not be
certified in areas where they now need to provide service. In order to
effectively and efficiently implement the temporary order, we forbear
for the purposes of this special relief, until March 1, 2006, from
section 254(e)'s requirement that ``only an eligible telecommunications
carrier designated under section 214(e) shall be eligible to receive
specific Federal universal service support.'' We establish the
following alternative designation process for temporary ETCs to provide
the specific Lifeline support described in this Order.
16. Section 10 of the Act requires that the Commission forbear from
applying any regulation or any provision of the Act to
telecommunications services or telecommunications carriers if the
Commission determines that the three conditions set forth in section
10(a) are satisfied. We find the requirements of section 10(a) are met
to forbear from the ETC requirement until March 1, 2006, because of the
limited and temporary nature of the support as well as the narrow
application of the universal service support to only Lifeline
customers. Section 10(a)(1) is satisfied because temporary forbearance
from the ETC requirement will enhance the charges and practices of
telecommunications carriers as it relates to Lifeline customers because
it expands the scope of telecommunications services available to these
consumers. Without such support, many of the affected consumers would
be left with limited or no access to telecommunications services. In
addition, because we specifically include a handset and a minimum of
300 minutes of wireless service and thus tailor the Lifeline support to
the affected consumers, we do not believe that the additional
safeguards afforded by the traditional ETC designation requirement are
necessary for the protection of consumers. Thus, forbearance also
satisfies section 10(a)(2). Further, under the alternative temporary
ETC designation process that we establish herein, the Commission will
review each offering to determine whether it complies with our
requirements. This review will allow us to ensure that affected
consumers are provided with affordable access to the telecommunications
network. Finally, we find our actions here today to be most consistent
with the public interest and determine that the additional safeguards
afforded by ETC designation under section 214 work against the public
interest in this limited circumstance. Under the normal designation
process, carriers would be required to submit a detailed application
that addresses not only the Lifeline assistance but also the other
requirements of serving as an ETC. By streamlining the process, and
expediting our review, we will enable carriers to provide access to
telecommunications to affected consumers as quickly as possible. Thus,
we find that section 10(a)(1) through (3) are satisfied and temporary
and conditional forbearance is appropriate.
17. Carriers seeking to be designated a temporary ETC to offer the
special Lifeline support described in this Order must submit to the
Commission a detailed description of the plan, including how many and
type of minutes offered, the brand and model of the handset(s), the
carrier's licensed service area, and any limitations or conditions
associated with the plans. In addition, consistent with the
Commission's ETC precedent, the petition must include (1) a
certification that the petitioner intends to offer Lifeline services to
qualifying subscribers consistent with this Order; and (2) a
description of how the petitioner intends to advertise the availability
of the Lifeline service. Upon submission, the Commission will conduct
an expedited review to ensure compliance with our rules. Within ten
days, the Commission will determine whether the offering complies with
this Order and whether the carrier will be temporarily designated as an
ETC for purposes of providing the Lifeline support set out in this
Order.
18. We acknowledge that some FEMA-eligible subscribers may already
possess a handset and not need an additional handset. In those
instances, and at the subscriber's discretion, the subscriber may opt
against receiving a new handset and opt instead for a Lifeline-
supported package of greater than 300 minutes and the ETC may still
receive support not to exceed $130 for its Lifeline package. Further,
it is acceptable for a carrier to offer a plan that includes a handset
and a package of some greater amount of minutes (e.g., 500, 750, or
1000 minutes or more) for the $130 in support. Additionally, a
subscriber may opt for a plan that exceeds the $130 limit for a minimum
of 300 minutes of use and a handset, but nevertheless use the $130
towards the higher minutes of use plus handset plan. This flexibility
to the plan will allow eligible customers to purchase packages with
more minutes of use, including packages that require the subscriber to
pay any additional amount over the $130 threshold. Through this
[[Page 65854]]
temporary change to the federal Lifeline/Link-Up support program, it is
our intent and purpose through this wireless option to give access to
affected subscribers with no out-of-pocket costs. The eligible
customer, however, may choose otherwise by, for example, forgoing the
handset in exchange for more minutes of use.
19. We balance the need for quick and decisive action with our
overarching goals of protecting the program from waste, fraud, and
abuse. For that reason, we require applicants for the temporary
Lifeline support pursuant to this Order to certify that they were
residents of counties that are designated by FEMA as eligible for
individual assistance, that they are the head of their household, and
that they are only receiving one Lifeline special support package.
Applicants seeking Link-Up support must certify that they were
residents of counties that are designated by FEMA as eligible for
individual assistance. We require ETCs receiving this temporary support
to maintain all necessary documentation to verify that the support was
used for the intended purpose of assisting victims of Hurricane
Katrina. We also subject all ETCs receiving this temporary support to
potential audit, and we require all carriers receiving $1 million or
more of this support to undergo an audit or other investigatory review
by the Commission's OIG (or the Administrator working under the
oversight of the OIG) to verify the accuracy of all data submitted and
that the support was used for intended purposes and to validate that
the eligible telecommunications carrier has not obtained double-
recovery from a single household.
20. We find this action necessary to assist in the Hurricane
Katrina disaster relief effort. Offering temporary support for this
wireless service consumer offering will not only assist in the recovery
from the economic damages caused by the hurricane, but it will promote
public safety by ensuring that disaster victims have ready access to
E911 capabilities in the event of emergency. We stress that this
temporary designation to operate as an ETC solely for this temporary
support mechanism does not grant or otherwise deem the carrier an ETC
for any other USF support mechanism. Nor does this temporary
designation prejudge or suggest that any application currently pending
or to be filed in the future with the state commissions or the
Commission results in designation as an ETC.
C. Health Care Support
1. Need for and description of Temporary Order
21. In light of the compelling and unique circumstances caused by
Hurricane Katrina, we find that it is necessary to adopt temporary
order, pursuant to section 254(h)(2)(A), to provide public and
nonprofit health care providers--in both non-rural and rural areas--in
the affected areas and in areas where evacuees have relocated, as
detailed below, with a 50 percent discount off the monthly cost of
advanced telecommunications and information services necessary for the
provision of health care services to victims of Hurricane Katrina. The
temporary order discussed below applies to health care providers in the
federally declared Hurricane Katrina disaster areas in the states of
Alabama, Louisiana, and Mississippi and in areas where evacuees have
relocated as detailed below. Specifically, all rural and non-rural
nonprofit and public health care providers, as defined in Sec.
54.601(a)(2), located within the states of Alabama, Louisiana, and
Mississippi are eligible for this additional support. We establish
different geographic eligibility criteria for the Health Care
initiative because of the ability to use distance medicine applications
to treat Hurricane Katrina victims. Furthermore, because the residents
of the most devastated areas will likely have to relocate for an
extended period of time, we expand eligibility for the purposes of the
temporary order to the rural and non-rural nonprofit and public health
care providers located in areas that are likely to receive most of the
citizens evacuated from the hardest hit areas. Initial reports show
these areas to include all counties in Texas and Arkansas that are
contiguous with Louisiana and Mississippi; the counties of Escambia,
Santa Rosa, Okaloosa, Walton, and Bay in Florida; the counties of
Harris, Dallas, Tarrant and Bexar in Texas; the county of Pulaski in
Arkansas; and the county of Shelby in Tennessee. In addition, we find
that rural and non-rural health care providers outside of these areas
may be eligible for support to the extent they serve a substantial
number of the evacuees when compared to their usual number of patients.
Health care providers that believe they are eligible under this
standard should file a request with the Commission. We note that this
temporary support does not extend to private or for-profit health care
providers.
22. American Red Cross and other shelters are providing food,
water, shelter and physical and mental health services to evacuees.
Tens of thousands of people displaced from their homes have taken
refuge in shelters in several states. Accordingly, for the purposes of
the temporary order, we find it in the public interest that American
Red Cross or other shelters that also offer medical services are
eligible for funds as community health centers or community mental
health centers to the extent they serve a significant number of
disaster victims using advanced telecommunications and information
services for telemedicine applications.
23. We also clarify that temporary or mobile health care providers
are eligible for support under the 50 percent discount rule we adopt in
this Order. As we noted in the Rural Health Care Second Report and
Order, 70 FR 6365, February 7, 2005, mobile health care providers can
provide essential health care services to underserved populations in
remote locations. Given the extensive damage to many health care
facilities due to Hurricane Katrina, we envision that the recovery and
rebuilding effort will require the use of temporary mobile health
facilities due to the lack of permanent health care facilities.
Furthermore, many evacuees may be housed for some time in temporary
shelters, and health care might be brought to these people via mobile
health care providers. The receipt of universal service funding will
better enable mobile health care providers to rapidly diagnose and
treat patients in the affected areas. We find this rule to be in the
public interest because it will provide maximum flexibility to mobile
health care providers to use the most-effective technology to provide
service to hurricane victims, whether it is satellite, wireline, or
wireless. In the Rural Health Care Second Report and Order, we
established a methodology for calculating support that established
discounts for rural mobile health care providers at the difference
between the rate for satellite service and the rate for an urban
wireline service with a similar bandwidth. We find that such a
calculation is not necessary here because, under the rules we adopt
today, mobile health care providers will receive 50 percent discount
off the cost of advanced telecommunications and information services.
24. In section 254 of the Telecommunications Act of 1996, Congress
sought to provide rural health care providers ``an affordable rate for
the services necessary for the purposes of telemedicine and instruction
relating to such services.'' Specifically, Congress directed
telecommunications carriers
[[Page 65855]]
``[to] provide telecommunications services which are necessary for the
provision of health care services in a State, including instruction
relating to such services, to any public or nonprofit health care
provider that serves persons who reside in rural areas in that State at
rates that are reasonably comparable to rates charged for similar
services in urban areas in that State.'' Congress also provided the
Commission with authority to enhance access to advanced
telecommunications and information services for health care providers.
25. The Commission implemented this statutory directive by adopting
the rural health care support mechanism in the 1997 Universal Service
Order, 62 FR 32862, June 7, 1997. In the Rural Health Care Report and
Order, the Commission provided a 25 percent discount off the cost of
monthly Internet access for eligible rural health care providers under
section 254(h)(2)(A). Subsequently, on December 17, 2004, the
Commission released a Rural Health Care Second Report and Order, 62 FR
32862, June 7, 1997, that, among other actions, changed the definition
of ``rural'' for the purposes of the rural health care support
mechanism. The Commission also expanded funding for mobile rural health
care providers by subsidizing the difference between the rate for the
satellite service and the rate for an urban wireline service with a
similar bandwidth. In addition, on reconsideration, the Commission
revised its rules to permit rural health care providers in states that
are ``entirely rural'' to receive a 50 percent discount for advanced
telecommunications and information services under section 254(h)(2)(A).
26. As the Commission has recognized in the past, access to
advanced telecommunications services and information services presents
the most efficient, cost-effective way to provide many telemedicine
services. Specifically, telemedicine programs enable patients to
receive health care services across distances that might otherwise be
unaffordable, or physically impracticable or impossible to cross. For
example, health care providers can use advanced telecommunications
services to transmit x-rays and other medical information in real-time
to doctors located in other areas for diagnosis and recommendations.
Thus, patients benefit from access to timely health care services while
they are spared the expense of lost wages and long-distance travel. In
this instance, residents of the affected areas might be unable to
travel for health care services because, for example, vehicles were
lost in the flooding or gasoline is in short supply. Additionally,
mobile health care providers can deliver cutting-edge technology and
specialty care to citizens who are still living in areas that were
damaged by the hurricane. These mobile clinics literally can mean the
difference between life and death for many people who are unable to
travel to see a physician. Furthermore, universal service support for
advanced telecommunications and information services will enable health
care providers in the affected areas to utilize their limited resources
to provide additional care for hurricane victims and other patients.
27. We find that it is appropriate to adopt these rules on a
temporary basis to expand funding to health care providers in the
affected areas under section 254(h)(2)(A). As the Commission has
determined in the past, we have the authority to provide funding for
the provision of advanced telecommunications and information services
under section 254(h)(2)(A). Section 254(h)(2)(A) allows the Commission
to establish competitively neutral rules to enhance access to advanced
telecommunications and information services for health care providers.
Furthermore, section 254(h)(2)(A) gives the Commission broad
discretionary authority to fulfill this statutory mandate. In prior
orders, we have established rules under section 254(h)(2)(A) that
further the Commission's mission of funding telecommunications and
information services in order to promote telemedicine. By adopting the
temporary order, therefore, we are working within the existing
parameters of the rural health care program. We find that the
circumstances caused by Hurricane Katrina create a special need for the
Commission to use its discretion to provide universal service support
to health care providers in the affected areas.
28. Section 254(h)(2)(A) allows the Commission to establish
competitively neutral rules to enhance access to advanced
telecommunications and information services to the extent those rules
are technically feasible and economically reasonable. We find that
providing universal service support as discussed herein is both
technically feasible and economically reasonable. Access to these
services is technically feasible because eligible health care
facilities either are already being provided or were being provided
advanced telecommunications and information services prior to the
hurricane. In addition, the Commission's actions are economically
feasible, in light of the circumstances. First, the temporary support
is for a limited amount of services used for the express purpose of
treating disaster victims, i.e., advanced telecommunications and
information services used in telemedicine applications. Second, we
estimate that we would disburse approximately $28 million in support
under the temporary order. The Commission has established a cap of $400
million for the rural health care support mechanism. Given that
currently the program is disbursing about $30 million a year, we do not
envision that the additional funding provided for in this Order will
exceed the Commission's cap. We further note that we are not funding
all telecommunications services, as provided for under 254(h)(1)(A),
but only advanced telecommunications and information services that are
used directly to provide telemedicine services to treat patients.
Third, based on past experience, we believe a flat 50 percent discount
is easy to administer and consistent with section 254(h)(5), which
requires a specific, sufficient and predictable mechanism. Fourth, the
50 percent discount limits the amount of support per provider, provides
incentives for health care providers to make prudent economic decisions
concerning their telemedicine needs and will deter wasteful
expenditures. Finally, we find that a 50 percent discount is slightly
less than the average discount rural health care providers current
receive for telecommunications services under section 254(h)(1)(A).
29. We find that both rural and non-rural health care providers in
affected areas should be eligible for this temporary support. Section
254(h)(1)(A) limits support to health care providers in ``rural''
areas. In allowing the Commission discretion to establish competitively
neutral rules to enhance access to advanced telecommunications and
information services under section 254(h)(2)(A), however, Congress did
not specifically limit such access to rural health care providers.
Thus, we find that providing health care universal service support to
public or nonprofit health care providers that are not necessarily
serving ``rural areas,'' as defined in the 2004 Rural Health Care
Second Report and Order, is consistent with federal court precedent and
the mechanism's goal to provide health care providers with access to
modern telecommunications for medical and health maintenance purposes.
These areas have experienced the destruction of the telecommunications
network infrastructure and the obliteration of many buildings,
including homes,
[[Page 65856]]
medical, and other professional facilities, as well as the displacement
of a significant percentage of the population. Therefore, we find that,
in light of these extraordinary circumstances, both rural and non-rural
health care providers are eligible to receive rural health care
universal service support to serve the medical needs in the affected
areas. Consistent with the Commission's principles of competitive
neutrality, we find that eligible health care providers may receive
discounts for any advanced telecommunications and information service,
regardless of the platform as long as these services are used to treat
disaster victims with telemedicine applications.
30. In administering the universal service fund, we must ensure
that the goals of section 254 are met while preventing waste, fraud,
and abuse. For this reason, health care providers seeking support
pursuant to this Order shall certify that they meet the eligibility
requirements outlined herein. We also note that our rules require
applicants to select the most cost-effective, commercially available
service. We will carefully monitor the use of funds disbursed to
eligible entities under these new rules to ensure that all support is
utilized in accordance with Commission rules, and to ensure that
service providers do not charge unjust or unreasonable rates or seek to
lock health care providers into long-term contracts beyond Funding Year
2005. We reserve the right to recover any monies not used for their
intended purposes or, upon review, we determine were used wastefully.
2. Applicable Time Period
31. To qualify for this support, a health care provider should
submit documentation to demonstrate that it used advanced
telecommunications and information services for telemedicine
applications and to treat victims of Hurricane Katrina. The health care
provider should also certify that it used the services for the intended
purposes. Such health care providers should comply with the program's
document retention requirements and should maintain sufficient
documentation to demonstrate the reasonableness of costs in light of
the exigent circumstances. As noted above, all parties are subject to
potential audit by the Commission's OIG (or the Administrator working
under the OIG's oversight), and any party receiving more than $1
million in support will be automatically audited.
32. As noted below, the temporary order is effective immediately
upon release of this Order and continues through the end of Funding
Year 2005. Temporary health care support funding is available from
August 29, 2005 until June 30, 2006, which is the end of Funding Year
2005. Further, all health care providers eligible under these new rules
are permitted to amend their Funding Year 2005 applications to apply
for additional support, no later than 60 days after the release of this
Order. Applicants seeking support to obtain advanced telecommunications
and information services for telemedicine applications used to treat
victims of Hurricane Katrina should submit their FCC Form 465
postmarked no later than 60 days after release of this Order.
Applicants should comply with all program rules and requirements,
including the competitive bidding requirements.
D. Schools and Libraries Support
1. Need For and Description of Temporary Order
33. In this Order, we adopt temporary modifications to the schools
and libraries universal service support mechanism to meet the needs of
schools and libraries damaged by Hurricane Katrina. Approximately 600
schools and libraries in Alabama, Louisiana, and Mississippi may have
been affected by the hurricane and subsequent flooding. Many schools
and libraries in other states, although not damaged by the hurricane,
have an influx of hurricane evacuee students (and library patrons). We
are, on our own motion, waiving certain rules relating to the schools
and libraries universal service support mechanism (commonly referred to
as the E-rate program) on an emergency interim basis, as described
below. Waiver of these rules will preserve and advance universal
service by allowing schools and libraries in affected areas to restore
quickly their ability to provide students and communities with needed
telecommunications and information services.
34. Specifically, we (1) re-open the Funding Year 2005 filing
window for schools and libraries, and consortia of schools and
libraries, that were directly or indirectly affected by Hurricane
Katrina; (2) treat all schools and libraries directly affected by
Hurricane Katrina at the highest level of priority for Priority Two
services (i.e., 90 percent) for Funding Years 2005 and 2006; (3) allow
affected parties in eligible counties/parishes in Alabama, Louisiana,
and Mississippi to ``restart the clock'' for the purposes of
calculating compliance with the ``two-in-five'' rule; (4) allow program
participants in affected areas to substitute services or products in
one broad category for another; and (5) allow schools and libraries
serving displaced students and citizens to amend their Funding Year
2005 applications to account for the unexpected increase in population
by filing a special supplementary FCC Form 471 request for additional
funding.
35. In taking these actions, we balance the need for quick and
decisive action to restore the provision of telecommunications and
information services to schools and libraries with our overarching need
to protect the program against waste, fraud, and abuse. We emphasize,
however, that we will continue to be vigilant to ensure program
integrity and to detect and deter waste, fraud, and abuse, and pursue
enforcement action when appropriate. Our intent is not to allow double
recovery for damages related to telecommunications and information
services equipment funded under the schools and libraries universal
service support mechanism. For this reason, schools and libraries
affected by Hurricane Katrina requesting funding for the restoration of
their telecommunications and information systems pursuant to the
direction contained in this Order shall certify that the school or
library incurred substantial damage as a result of Hurricane Katrina
and that the services and products sought in their applications will be
solely used to restore the network to the functional equivalent of the
pre-Katrina degree of functionality (i.e., prior to August 29, 2005)
and that other resources (e.g., insurance or public assistance monies
provided by FEMA) are not available for restoration. In addition,
schools and libraries affected by Hurricane Katrina shall certify that
any alternative funding (e.g., insurance payments, FEMA support,
community resources) in excess of the cost for products or services
requested on their applications will be returned to the federal
Universal Service Fund. To the extent that schools and libraries are
handling increased populations of evacuees, schools and libraries shall
certify that: (1) There are more than a de minimis number of Hurricane
Katrina victims; and (2) the entity experienced an associated increase
in demand for supported services.
36. At the outset, we note that, in a number of instances, our
rules explicitly provide participants in the schools and libraries
program with specific requirements for requesting extensions of
deadlines or waivers of certain Commission rules due to the occurrence
of unforeseen events such as Hurricane
[[Page 65857]]
Katrina. Thus, we emphasize that the actions taken here do not
represent the entirety of the relief that may be available to E-rate
program participants in affected areas. We are committed to addressing
all requests for hurricane assistance in an expeditious manner.
37. Under the Commission's rules, universal service funds are
available to fund discounts for eligible schools and libraries and
consortia of such eligible entities on a first-come, first-served
basis. Each year, the Administrator implements an initial filing period
that treats all schools and libraries filing within that period as if
their applications were simultaneously received. The initial filing
period begins on the date that the Administrator begins to receive
applications for support, and concludes on a date to be determined by
the Administrator.
38. In light of the extensive property damage, including damage to
the telecommunications and information systems employed by participants
in the schools and libraries universal service support mechanism,
caused by Hurricane Katrina in the Gulf Coast states, we waive section
54.507(c) of our rules and re-open the Funding Year 2005 filing window
for schools and libraries, and consortia of schools and libraries, that
were directly or indirectly affected by Hurricane Katrina to the extent
set forth in this Order. The filing window shall be open for sixty days
following the date of release of this Order. By waiving Sec. 54.507(c)
of our rules, and reopening the filing window for Funding year 2005 for
schools and libraries affected directly by Hurricane Katrina, affected
program participants in Alabama, Louisiana, and Mississippi can begin
repairing and restoring needed telecommunications and information
services quickly and rapidly. Moreover, as described more fully below,
we recognize that certain schools and libraries may require additional
funding to support the needs of students and citizens displaced by
Hurricane Katrina although they have not been directly affected by
these events. Accordingly, for the reasons stated above, we find that
due to this natural disaster, good cause exists for waiving Sec.
54.507(c) for these schools and libraries and that such waiver is in
the public interest.
39. Under the Commission's rules, eligible schools and libraries
may receive discounts ranging from 20 percent to 90 percent of the pre-
discount price of eligible services, based on indicators of need.
Schools and libraries in areas with higher percentages of students
eligible for free or reduced-price lunch through the National School
Lunch Program (or a federally approved alternative mechanism) qualify
for higher discounts for eligible services than applicants with low
levels of eligibility for such programs. Schools and libraries located
in rural areas also generally receive greater discounts. The
Commission's priority rules provide that requests for
telecommunications services, voice mail and Internet access for all
discount categories shall receive first priority for the available
funding (Priority One services). The remaining funds are allocated to
requests for support for internal connections (Priority Two services),
beginning with the most economically disadvantaged schools and
libraries, as determined by the schools and libraries discount matrix.
Currently, the most disadvantaged schools and libraries are eligible
for a 90 percent discount on eligible services, and thus must pay only
10 percent of the cost of the service. To the extent funds remain after
discounts are awarded to entities eligible for a 90 percent discount,
the rules provide that the Administrator shall continue to allocate
funds for discounts to applicants at each descending single discount
percentage. The Commission's rules also provide that if sufficient
funds do not exist to grant all requests within a single discount
percentage, the Administrator shall allocate the remaining support on a
pro rata basis over that single discount percentage level.
40. In light of the extensive property damage, including damage to
the telecommunications and information systems employed by participants
in the schools and libraries universal service support mechanism,
caused by Hurricane Katrina in the Gulf Coast states, we find good
cause to waive Sec. 54.507 of our rules and treat all schools and
libraries directly affected by Hurricane Katrina at the highest level
of priority for Priority Two services (i.e., 90 percent) for Funding
Years 2005 and 2006. We recognize that program participants in Alabama,
Louisiana, and Mississippi most affected by Hurricane Katrina may have
need for an immediate indication of whether they are likely to receive
funds for Priority Two services. By waiving Sec. 54.507 of our rules,
and treating all affected schools and libraries at the highest level of
priority, affected program participants in Alabama, Louisiana, and
Mississippi can fully anticipate the amount of funding they will
receive from the universal service fund, and begin the task of
developing a cogent, feasible, and sustainable plan to resume the
provision of needed telecommunications and information services. We
anticipate that treating all affected schools and libraries at the
highest priority level could result in the disbursement of
approximately $96 million in E-rate funds for the approximately 600
schools and libraries in Alabama, Louisiana, and Mississippi affected
by Hurricane Katrina. We note that these funds have already been
collected by the Universal Service Fund, and would not have an impact
on the long-term viability of the universal service program.
Accordingly, we find that good cause exists for waiving Sec. 54.507
for affected entities and that such waiver is in the public interest.
41. We expect that the neediest schools and libraries will receive
requested funding for Funding Year 2005 for both Priority One and
Priority Two services. We note that, after applications from the
disaster-struck schools and libraries are submitted and reviewed, we
may be able to authorize funding nation-wide requests for any deferred
requests for Priority Two internal connections service for Funding Year
2005. The Commission's rules require the Administrator to report the
amount of unused funds available from prior funding years on a
quarterly basis. Based on our past experience, significant funds are
identified as available for use in future funding years. In fact, the
E-rate Coordinators from Alabama, Louisiana, and Mississippi estimate
that unused funds from prior funding years will be available to carry
over for Funding Year 2005 and could be used to fund Hurricane Katrina
restoration. Because we are re-opening the funding year 2005 filing
window, such funds previously identified as unused by the Administrator
may be available to provide support to the disaster-struck schools and
libraries. We recognize that demand for services from the schools and
libraries struck by Hurricane Katrina may vary after these entities
complete their internal reviews and prepare the necessary program
applications. We will closely monitor this situation and, to the extent
unused funds from prior funding years are available, we anticipate that
these funds will be used and that Priority Two funding may be available
for additional applicants.
42. Finally, we note that the Commission requires that an entity
must pay the entire undiscounted portion of the cost of any services it
receives through the schools and libraries program. Moreover, our rules
prohibit the provision of free services to an eligible entity by a
service provider that is also providing discounted services to the
entity. The Commission has
[[Page 65858]]
previously found that, for the purpose of this program, the provision
of unrelated free services by a service provider to an eligible entity
constitutes a rebate of the undiscounted portion of the costs of
services, in violation of our rules. We clarify that to the extent
schools and libraries receive FEMA assistance for projects, such
assistance may be applied to the undiscounted portion of the bill. As
part of our efforts to respond to the damage caused by Hurricane
Katrina, we will continue to examine whether waiver of this rule is
warranted to aid affected schools and libraries to restore the
provision of service to students and communities.
43. Under the Commission's rules, eligible entities may receive
commitments for discounts on Priority Two services (internal
connections) no more than twice every five funding years (the ``two-in-
five'' rule). For the purpose of determining eligibility, the five-year
period may begin in any funding year in which the school or library
receives discounted internal connections services other than basic
maintenance services.
44. We find that due to the damage to information and
telecommunications systems caused by Hurricane Katrina in the Gulf
Coast states, many participants in the schools and libraries universal
service support mechanism are likely to need to replace their internal
connections services, and thus will seek commitments for discounts on
Priority Two services despite already receiving such commitments in the
recent past. For these entities, we waive our rule pertaining to the
frequency of discounts for internal connections services to allow
affected parties in Alabama, Louisiana, and Mississippi to ``restart
the clock'' for the purposes of calculating compliance with the ``two-
in-five'' rule. For such participants, Funding Year 2006 will thus
serve as the first year of the five-year period for determining
eligibility for funding for these services. We recognize that program
participants in Alabama, Louisiana, and Mississippi affected by
Hurricane Katrina may need funding to replace damaged or destroyed
internal connections services, and should not be denied support
payments simply due to the timing and frequency of previous requests
for funding for internal connections. We limit this relief to schools
and libraries in the Hurricane Katrina disaster area that incurred
substantial damage as a result of the hurricane. Accordingly, for the
reasons stated above, we find that due to this natural disaster, good
cause exists for waiving Sec. 54.506(c) for affected entities and that
such waiver is in the public interest. To qualify for this waiver,
parties should submit a request describing the damage incurred to the
equipment that needs to be replaced.
45. Section 54.504(f) of the Commission's rules allows the
Administrator to grant a request by an applicant to substitute a
service or product for another where the service or product has the
same functionality; the substitution does not violate any contract
provisions or state or local procurement laws; the substitution does
not result in an increase in the percentage of ineligible services or
functions; and the applicant certifies that the requested change is
within the scope of the controlling FCC Form 470. On our own motion, we
waive the requirement that, for purposes of Sec. 54.504(f), the
substituted service or product must have the same functionality as the
service it is replacing. Thus, program participants in affected areas
may substitute services in one broad category (e.g., telecommunications
service, Internet access, and internal connections) for those in
another. Along these same lines, we will permit the use of approved
funds for any facilities or services that need to be replaced due to
the natural disaster to the extent that they were initially funded
under the program. We recognize that program participants in Alabama,
Louisiana, and Mississippi affected by Hurricane Katrina may seek
needed funding to replace damaged or destroyed services and equipment,
and that it is in the public interest to allow the replacement of such
services and equipment with funds previously granted for other services
and equipment. Accordingly, we find that due to this natural disaster,
good cause exists for waiving Sec. 54.504(f) for affected entities and
that such waiver is in the public interest. For any eligible school,
library or consortium in affected areas, such service substitutions
will be limited to funds received from applications from Funding Year
2005.
46. Certain schools, although not directly affected by Hurricane
Katrina, may have been indirectly impacted nonetheless due to the
influx of displaced students into their district. For example,
additional students may make use of school services and resources in a
manner originally unanticipated when the schools' technology plans were
developed and funding requested, thereby taxing information and
telecommunication services beyond their usual capability. In some
instances, the addition of students displaced due to Hurricane Katrina
may cause a school to become eligible for a higher discount level due
to an increase in the percentage of the student body eligible for the
National School Lunch Program. To provide an opportunity for schools to
handle the unforeseen consequences of Hurricane Katrina and the influx
of new students and patrons, we will allow schools and libraries
serving displaced students and citizens to amend their Funding Year
2005 applications to account for the unexpected increase in population
by filing a special supplementary FCC Form 471 request for additional
funding. In accordance with our direction here, such schools may amend
their original funding requests. We instruct the Schools and Libraries
Division (``SLD'') of the Administrator to accept and immediately
process requests for additional funding from such schools for sixty
days following the date of this Order. We recognize that certain
schools and libraries may need to adjust their requests for USF support
in light of Hurricane Katrina even though they have not been directly
damaged by these events. Accordingly, we find that due to this
catastrophic natural disaster, good cause exists for waiving Sec.
54.507(c) for these schools and libraries and that such waiver is in
the public interest. Schools and libraries affected by Hurricane
Katrina requesting additional funding to support the needs of displaced
citizens shall submit a certification indicating the approximate number
of additional students or citizens expected to be served by the
telecommunications and information services, and that the services and
products sought in their applications are necessary to serve these
additional, unanticipated needs. We estimate that this increase in
funding will be approximately $36 million. We note that these funds
have already been collected and should not have an impact on the long-
term viability of the universal service program.
47. Because we want to ensure the schools and libraries harmed by
Hurricane Katrina receive targeted support, we direct the
Administrator, in reviewing revised or supplemented requests for E-rate
support, to determine whether the impact of Hurricane Katrina was de
minimis (e.g., a small number of students or patrons that necessitates
no increased demand for supported services). Schools and libraries
should not submit revised applications if they are getting a de minimis
increase in students or patrons as a result of Hurricane Katrina. We
recognize that this determination may depend upon specific facts and
circumstances. Thus, applicants should submit the number of increased
students and library patrons
[[Page 65859]]
(both pre-Hurricane Katrina and post-Hurricane Katrina) and certify
that the number is accurate. We also require schools and libraries to
maintain documentation in support of these increased numbers. We
authorize the state E-rate coordinators for Alabama, Louisiana, and
Mississippi to review e-rate applications to ensure that schools and
libraries were substantially damaged and that their requests will be
free of waste, fraud, and abuse. In addition, for those schools and
libraries handling increased students/patron evacuees, we authorize
these E-rate coordinators to review whether the schools/libraries are
handling more than a de minimis number of increased students/patrons.
We note that the state E-rate coordinators for Alabama, Mississippi,
and Louisiana will coordinate the application process to limit the
potential for waste, fraud, and abuse. We authorize this additional
oversight review activity. We expect such review efforts would include
verifying that schools and libraries in their states seeking this
temporary relief meet the de minimis standard. We will carefully
monitor the use of funds disbursed to ensure that all support is
utilized in accordance with Commission rules, and to ensure that
service providers do not charge unjust or unreasonable rates. We
reserve the right to recover any monies not used for their intended
purposes or, upon review, we determine were used wastefully.
2. Eligibility
48. The temporary order adopted and waivers granted herein apply to
schools, libraries, and consortia of schools and libraries in the
federally-declared Hurricane Katrina disaster areas in the states of
Louisiana, Mississippi, and Alabama and in surrounding areas, for the
counties/parishes designated by FEMA as eligible for individual
assistance. Furthermore, because the residents of the most devastated
areas will likely have to relocate for an extended period of time, we
expand eligibility of funds from the schools and libraries support
mechanism to schools and libraries (and consortia of eligible schools
and libraries) located in areas that receive citizens evacuated from
the hardest hit areas. Initial reports show these areas to include all
counties in Texas and Arkansas that are contiguous with Louisiana and
Mississippi; the counties of Escambia, Santa Rosa, Okaloosa, Walton,
and Bay in Florida; the counties of Harris, Dallas, Tarrant and Bexar
in Texas; the county of Pulaski in Arkansas; and the county of Shelby
in Tennessee. Schools and libraries that believe they are eligible
under this standard should retain documentation of the number of
additional students and citizens to be supported by telecommunications
and information services.
49. The E-rate Funding Year 2005 application window is reopened for
certain schools, libraries, and consortia directly and indirectly
affected by the hurricane, as set out above. The window reopens on the
release date of this Order and closes 60 days after. Any application or
amended application from an eligible school, library, or consortium, as
discussed above, that is postmarked by 60 days after the release date
of this Order will be deemed accepted as timely filed within the
Funding Year 2005 window. For Funding Years 2005 and 2006, all eligible
schools, libraries, or consortia, as discussed above, will be treated
at the highest level of priority, or 90 percent, for Priority Two
services. For all eligible schools, libraries, or consortia, as
discussed above, the clock shall be restarted in terms of applying the
two-in-five rule of receiving Priority Two services. Therefore,
applicants that qualify for Priority Two services under this Order will
be deemed to have Funding Year 2006 as their first funding year, for
purposes of the two-in-five calculation. For any eligible school,
library or consortium, as discussed above, service substitutions will
be limited to funds received from applications from Funding Year 2005.
E. High-Cost Support
50. The high-cost program provides support to carriers (incumbent
LECs as well as competitive carriers) operating in high-cost and rural
areas. Under the Commission's rules, rural carriers receive support
based on their embedded costs and non-rural carriers receive support
based on forward-looking economic costs, as determined by the
Commission's cost model. Federal high-cost model support is provided to
non-rural carriers in states where costs exceed a nationwide cost
benchmark. After the amount of support available in a state is
determined, that support is ``targeted'' to high-cost wire centers.
Section 254(e) of the Act provides that carriers receiving federal
universal service support ``shall use that support only for the
provision, maintenance, and upgrading of facilities and services for
which the support is intended.'' The Commission has previously declined
to establish ``elaborate rules for compliance with section 254(e)''
but, rather, has relied on the states, through the certification
process, to ensure that carriers are using support for the purposes in
which it is intended. Indeed, the Commission has stated that as long as
the uses prescribed by the state are consistent with section 254(e),
states should have the flexibility to decide how carriers use support
provided by the federal non-rural high-cost mechanism.
51. The rules for the high-cost program therefore do not explicitly
address the use of high-cost funds for disaster relief and restoration
purposes but, instead, codify section 254(e)'s requirement that
carriers shall use universal service support only for the provision,
maintenance, and upgrading of facilities and services for which the
support is intended. Here we determine such costs to be a purpose for
which high-cost support is intended. In addition, we find that high-
cost carriers currently operating in the disaster area are coping with
enormous challenges. More than 200,000 customer lines remain out of
service. Carriers sustained significant damage to their outside plant
facilities and switching equipment, in some cases losing entire central
offices. Because commercial power is not fully available, many carriers
continue to operate on back-up power. We conclude that these carriers
are now operating in an area like a high-cost area. We conclude that a
clarification of the use restrictions in our rules is appropriate given
the overwhelming public interest in assisting those high-cost areas
struck by the worst natural disaster in the nation's history. This
action does not provide additional support to high-cost carriers harmed
by Hurricane Katrina and thus will not affect the size of the fund. It
will, however, provide high-cost carriers with the flexibility to use
some of their support to assist in disaster restoration. We therefore
clarify that using high-cost support to repair and rebuild facilities
and services damaged by Hurricane Katrina is consistent with the
statutory directive contained in section 254(e). Alternatively, we
waive Commission Rule 54.7 for the limited purposes discussed herein.
To the extent necessary and for only the relief provided herein, we
also forbear from section 254(e).
52. Carriers getting this support should certify that: (1) the
carrier is serving in the area; and (2) the carrier incurred
substantial damage as a result of Hurricane Katrina.
F. Other Issues
53. As we note in the sections above, we are working within the
existing parameters of the low-income, health care, E-rate, and high-
cost USF programs. Except where noted herein, we expect to apply all
existing processes and procedures to those applying for
[[Page 65860]]
benefits. For example, schools and libraries would need to prepare
technology plans, submit applications, and maintain documentation.
Similarly, carriers seeking support for providing the supported
wireless service consumer offering will seek reimbursement pursuant to
the Commission's existing low-income rules. Those programs that have
caps specified in the Commission's rules--i.e., the $2.25 billion E-
rate program and the $400 million rural health care program--will
continue to operate under the existing caps and applicable rules. In
addition, we take no steps to modify or change the Administrator's
disbursement processes. All carriers and service providers receiving
USF monies remain subject to audit, and we may recover funds that we
later determine were used improperly. At this time, we do not
anticipate a need to adopt any specific forms because of the temporary
nature of these support initiatives; parties receiving benefits are
required, however, to maintain all documentation needed to verify the
accuracy of their applications and the amount of monies received. Nor
do we anticipate requiring the Administrator to revise its quarterly
filings, although the Commission may require supplemental or additional
information on an as-needed basis consistent with our standard
operating procedures. We also adopt safeguards tailored to these
temporary support programs, including certification requirements,
document retention requirements, eligibility criteria relying on FEMA
determinations, and audits of disbursed funds.
54. On September 21, 2005, the Administrator filed a letter with
the Commission, detailing certain implementation concerns regarding
relief related to Hurricane Katrina. We note that many of the issues
raised in that letter are addressed in the scope of this Order. Because
we are applying the USF programs' existing processes and procedures to
these initiatives, we do not anticipate significant administrative
issues to implement. We recognize, however, that some implementation
issues may arise. We therefore require the Administrator to work with
the Wireline Competition Bureau to resolve any such issues (e.g., the
content of certifications) expeditiously. We note that the proposal of
the E-rate coordinators from Alabama, Louisiana and Mississippi does
not address schools and libraries affected by evacuees. We direct the
Wireline Competition Bureau to coordinate with the E-rate coordinators
of the states eligible for relief as a result of a substantial number
of evacuees to develop review process comparable to that of the E-rate
coordinators for Alabama, Louisiana and Mississippi.
55. In this Order, we adopt a number of measures to safeguard the
USF from misuse of funds. In particular, we rely on the FEMA disaster
designation and application processes to determine eligibility for the
temporary support initiatives, and the checks and balances built into
FEMA's internal controls and procedures to ensure parties that are
ineligible for support are rejected. Similarly, we target the temporary
support to the counties, parishes, and individuals that suffered the
most from the worst natural disaster in the Nation's history. We also
adopt specific certification and document retention requirements
pertaining to this temporary support. In addition, all beneficiaries
and service providers receiving these monies are subject to potential
audit, and those that receive more than $1 million will automatically
be audited by the Administrator to ensure the funds are used for their
intended purposes. All eligible telecommunications carriers, service
providers, or beneficiaries requesting support under this temporary
order shall be subject to audit or investigation by the Commission's
Office of Inspector General (``OIG''), or other authorized federal or
state governmental agency and, upon request, must make available any
documentation and records necessary to verify compliance with these
rules. For the E-rate program, we also rely on the representations of
the E-rate coordinators for Alabama, Mississippi, and Louisiana that
they will coordinate the application process to limit the potential for
waste, fraud, and abuse, and we authorize this additional oversight
review activity. Finally, this support is temporary and limited for the
purposes specified in this Order.
56. We also rely, however, on the existing safeguards and measures
in the USF programs. Thus, to the extent recovery is sought from USF
stakeholders, and such stakeholders do not make payments, they will be
subject to our ``red light'' rule. Parties must still submit
applications and maintain appropriate documentation, as required by the
existing program rules. The Administrator will subject all applications
to the normal review processes so that E-rate applications, for
example, will go through the Program Integrity Assurance (``PIA'')
review process and selective review procedures pursuant to the
Administrator's standard operating procedures. All information
collection efforts, document retention, and certification requirements
that normally apply to applications for low-income, rural health care,
high-cost, or E-rate support will continue to apply for these temporary
USF support initiatives. We recognize that we have already initiated a
proceeding to examine these procedures to determine what additional
measures can be taken to further safeguard the USF from waste, fraud,
and abuse.
57. We are committed to ensuring that the funds disbursed as a
result of these temporary support initiatives are used for their
intended purposes and that unscrupulous persons do not seek to gain
from these disaster relief measures. Therefore, to the extent we find
through audits or other means that funds were not used properly, we
will require the Administrator to recover such funds through its normal
processes. For the E-rate program, for example, we will continue to
apply the recovery standard adopted in the Schools and Libraries Fifth
Report and Order, 69 FR 55097, September 13, 2004. Thus, amounts
disbursed ``in violation of the statute or a rule that implements the
statute or a substantive program goal'' will be recovered in full. We
emphasize that we retain the discretion to evaluate the uses of USF
monies and to determine on a case-by-case basis that waste, fraud, or
abuse of USF monies occurred and that recovery is warranted.
III. Effective Date
58. The waivers granted herein shall be effective upon the release
date of this Order. The rule modifications or additions adopted herein
shall be effective upon the release date of this Order. Pursuant to
section 553(d)(3) of the Administrative Procedure Act, we find good
cause to make these rule modifications or additions effective upon
release of this Order. As explained above, Hurricane Katrina caused
significant damage in Alabama, Louisiana, and Mississippi including
flooding in some areas of these states and significant property damage
and personal injury. The rule changes promulgated in this Order
represent a critical step in facilitating the Nation's response to the
disaster wrought by Hurricane Katrina. We note, moreover, that this
Order does not mandate new burdens or obligations. Accordingly, no
entity will be adversely affected by making the Order effective at the
earliest possible date. We delegate authority to the Wireline
Competition Bureau to work with the Universal Service Administrator to
make the necessary programmatic changes to implement this Order.
[[Page 65861]]
59. Given the urgent need, the rules set forth herein shall take
effect immediately upon release, and without prior public notice and
comment. Section 553 of the Administrative Procedures Act (APA) permits
any agency to implement a rule without public notice and opportunity
for comment ``when the agency for good cause finds * * * that notice
and public procedure thereon are impracticable, unnecessary, or
contrary to the public interest.'' Commission rules permit us to render
an Order effective upon release where good cause warrants. As a general
matter, we firmly believe that public notice requirements are an
essential component of our rulemaking process. We find, however, that
while receipt of public comment clearly is necessary to the formulation
of final rules, the devastation caused by Hurricane Katrina and the
need for prompt attention for the victims of Hurricane Katrina present
good cause to make this Order effective immediately upon release of
this Order.
IV. Congressional Review Act
60. The Commission will send a copy of this Order in a report to
Congress and the Government Accountability Office pursuant to the
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A). For the reasons
stated herein, we find good cause for the rule changes made by this
Order to take effect upon the release of this Order, see 5 U.S.C.
808(2).
V. Procedural Matters
61. This Order contains new and modified information collection
requirements subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. Pursuant to 5 CFR 1320.18(d), the Office of
Management and Budget (OMB) has granted the Commission a temporary
waiver of the PRA requirements for this rulemaking. Accordingly, this
Order will not be submitted to OMB for review.
VI. Ordering Clauses
62. Pursuant to the authority contained in sections 4(i), 4(j), 10,
201-205, 214, 254, 303(r), and 403 of the Communications Act of 1934,
as amended, 47 U.S.C. 151, 154(i), 154(j), 160, 201-205, 214, 254,
303(r), and 403 this Order is adopted, and the temporary Order shall
become effective immediately upon release of this Order, pursuant to 5
U.S.C. 408, 553(d)(3), 47 U.S.C. 408, 553(d)(3).
63. Pursuant to 4(i) and 251(e) of the Communications Act of 1934,
as amended, 47 U.S.C. 154(i) and 251(e), and Sec. Sec. 1.1 and 1.3 of
the Commission's rules, 47 CFR 1.1 and 1.3, that our procedural rules
relating to the universal service fund are waived to the extent herein
described.
64. Pursuant to sections 1, 4(i), 251(b)(2), and 251(e) of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i),
251(b)(2) and 251(e), and Sec. 1.3 of the Commission's rules, 47 CFR
1.3, that Sec. 54.603(b)(3) of the Commission's rules is waived to the
extent herein described.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 05-21728 Filed 10-31-05; 8:45 am]
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