[Federal Register Volume 73, Number 199 (Tuesday, October 14, 2008)]
[Notices]
[Pages 60689-60695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-24300]
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FEDERAL COMMUNICATIONS COMMISSION
[WC Docket No. 05-195; FCC 08-189]
Comprehensive Review of the Universal Service Fund Management,
Administration, and Oversight
AGENCY: Federal Communication Commission.
ACTION: Notice of Inquiry.
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SUMMARY: In this document, we seek comment on ways to further
strengthen
[[Page 60690]]
management, administration, and oversight of the Universal Service Fund
(``USF'' or ``Fund''), how to define more clearly the goals of the USF,
and to identify any additional quantifiable performance measures that
may be necessary or desirable. We also seek comment on whether and, if
so, to what extent the Commission's oversight of the USF can be
improved. In conducting this inquiry, we plan to build upon the
comprehensive audit oversight conducted by the Commission's Inspector
General in 2007.
DATES: Submit comments on or before November 13, 2008; reply comments
on or before December 15, 2008.
ADDRESSES: You may submit comments, identified by WC Docket No. 05-195,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow instructions for submitting comments.
Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow instructions for submitting comments.
U.S. Postal Service first class, Express, and priority
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
For detailed instructions for submitting comments, see the
SUPPLEMENTARY INFORMATION section of this document.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Inquiry, WC Docket No. 05-195, adopted August 15, 2008 and released
September 12, 2008. The complete text of this document is available for
public inspection and copying during regular business hours at the FCC
Reference Information Center, Portals II, 445 12th Street, SW., Room
CY-A257, Washington, DC 20554. In addition, the complete text of this
document is available at http://www.fcc.gov/headlines.html. The text
may also be purchased from the Commission's duplicating inspection and
copying during regular business hours at the contractor, Best Copy and
Printing, Inc., Portals II, 445 12th Street, SW., Room CY-B402,
Washington, DC 20554, telephone (202) 488-5300 or (800) 378-3160,
facsimile (202) 488-5563, or via e-mail http://www.bcpiweb.com.
I. Introduction
1. In this Notice of Inquiry (``NOI''), we seek comment on ways to
further strengthen management, administration, and oversight of the
Universal Service Fund (``USF'' or ``Fund''), how to define more
clearly the goals of the USF, and to identify any additional
quantifiable performance measures that may be necessary or desirable.
We also seek comment on whether and, if so, to what extent the
Commission's oversight of the USF can be improved. In conducting this
inquiry, we plan to build upon the comprehensive audit oversight
conducted by the Commission's Inspector General in 2007.
2. Our primary goal in initiating this NOI is to ensure sufficient
safeguards are in place for the USF to operate as Congress intended. In
recent years, the Commission has undertaken a series of steps to
improve and strengthen oversight, including support of the Inspector
General's audit program. Still, we are concerned about the error rates
the Inspector General identified. The Commission has already taken a
number of steps to address the problems identified by the Inspector
General and others, for example, implementing program-wide debarment
measures in 2007, initiating recovery of any improperly disbursed
funds, and executing a Memorandum of Understanding (``MOU'') with the
USF Administrator. These recent steps have provided tangible benefits.
For example, an independent auditor audited the Commission's finance
and accounting activities and issued a positive opinion that identified
no material weaknesses in these activities in fiscal years 2006 or
2007. The independent auditor's opinion expressly covers the
Commission's financial controls over the USF and represents a marked
improvement over the period covering fiscal years 1999 through 2005.
The importance and size of the USF demands constant scrutiny and
assessment of the Commission's oversight efforts. We are initiating
this NOI to continue our assessment, solicit input from the public, and
develop additional rules and safeguards to protect the Fund.
II. Background
3. As set forth in section 254 of the Communications Act of 1934,
as amended (the ``Act''), universal service policy is intended to
ensure the availability of affordable telecommunications services to
consumers living in high-cost areas, low-income consumers, eligible
schools and libraries, and rural health care providers. Section 254
also required explicit federal universal service mechanisms and
enlarged the scope of the universal service program. The universal
service programs are funded by contributions remitted by
telecommunications carriers providing interstate and international
telecommunications services and from certain other providers of
interstate telecommunications. The Universal Service Administrative
Company (``USAC'' or ``USF Administrator''), a subsidiary of the
National Exchange Carrier Association (``NECA'') and a private not-for-
profit corporation, was created to serve as the Administrator of the
USF. The USF consists of four programs: (1) High-cost, providing
financial support to eligible telecommunications carriers (``ETCs'')
serving high-cost areas; (2) schools and libraries (``E-Rate''),
providing discounted telecommunications services, Internet access, and
internal connections to eligible schools and libraries; (3) low-income,
assisting low-income customers with discounted installation and monthly
telephone services; and (4) rural health care, providing discounted
telecommunications and information services to rural health care
providers.
4. Many observers, including the Government Accountability Office
(``GAO''), have recommended that the Commission take steps to improve
oversight of the USF. In response, the Commission has taken action in
previous proceedings to detect and deter waste, fraud, and abuse of the
Fund. In addition, schools and libraries participating in the E-rate
program have been subject to audits to determine compliance with
program rules and requirements. Audits and investigations have
uncovered issues ranging from poor program design to improper use of
funds, including intentional efforts to defraud the program by
unscrupulous actors. In many instances these audits and investigations
have resulted in the referral of fraud cases to the Department of
Justice (``DOJ''), and in settlements favorable to the Government and/
or criminal convictions or civil judgments against the wrongdoers. In
addition, where wrongdoers have been convicted or subject to civil
judgments, the Commission has debarred or proposed debarment of the
wrongdoers consistent with our rules.
5. More recently, the Commission has taken a series of steps to
further bolster oversight of the USF. First, the Inspector General
initiated 459 audits of beneficiaries and contributors. Based on the
results of those audits, the Inspector General is now overseeing a
second round of 650 audits (beneficiaries of Schools and Libraries and
High Cost Fund programs only) that build upon experience from the first
round. The
[[Page 60691]]
results of the Inspector General's audits have resulted in both
recoveries of USF monies and enforcement action against entities that
apparently violated Commission rules.
6. Second, the Commission has strengthened its oversight and
management of the USF Administrator. In June 2007, the Commission
established an MOU with the USF Administrator to ensure greater clarity
in administrative and management functions. The MOU established
reporting requirements of key performance measurement data to the
Commission, instructed the Administrator to take corrective action on
all audit findings including recovery of all funds identified as
improperly disbursed, and directed the Administrator to maintain
effective internal controls over its operations. Specifically, the MOU
directs the Administrator to implement an internal controls structure
consistent with the requirements of Office of Management and Budget
(``OMB'') Circular A-123. The Administrator is in the process of re-
assessing its internal controls framework. The results of this effort
should enable the Administrator to develop and implement corrective
action plans for any identified internal control weaknesses, which will
help to prevent and reduce improper payments across all USF programs.
As noted above, the improved internal control structure over the USF
has helped the Commission receive unprecedented high marks from the
outside independent auditor over the Commission's finance and
accounting activities, including those governing the USF. More
recently, the Commission directed the USF Administrator to establish an
incentive-based system for its executives to reduce and prevent
improper payments. Specifically, any bonuses the USF Administrator pays
to its executives must be based at least in part on the USF
Administrators' success at reducing and preventing improper payments.
7. Third, the Commission established performance measures and goals
for the USF and the USF Administrator. These performance measures and
goals will be reported at least annually by the USF Administrator and
will be summarized in the Commission's budget and financial submissions
to Congress. In addition, the Commission required the USF Administrator
to develop customer service standards and to prepare, review, and
report data concerning the quality of service the USF Administrator
provides to USF stakeholders. Like the USF Administrator's efforts to
reduce and prevent improper payments, the quality of service it
provides its stakeholders will also help form the basis for executive
compensation.
8. Fourth, in August 2007, the Commission adopted rules that
address many of the problems previously identified with the USF
program. The Commission's new rules establish rigorous document
retention requirements for program participants and establish
performance measurements to better manage the Administrator and the
USF. These measurements, among other things, require the Administrator
to provide specific performance metrics such as the number of program
beneficiaries, rates of telephone subscribership in urban versus rural
areas, and the average dollar amount of support. The Commission's new
rules also create additional penalties for bad actors--specifically,
the Commission can now debar from continued participation in the
program, any party that defrauds any of the four disbursement programs.
9. Fifth, the Commission has followed up on investigations by
taking strong enforcement action against bad actors. Since January
2007, the Commission has suspended or debarred 14 individuals or
companies and proposed or issued 19 forfeitures or consent decrees
against violators and other targets of our investigations. We expect
that strong enforcement action and the deterrent effect of the
Inspector General's comprehensive audit program will encourage
compliance among program participants.
10. Finally, although not the subject of this Notice of Inquiry,
the Commission has taken steps toward more fundamental reform of the
USF. For example, the Commission recently took action to rein in the
explosive growth in high-cost universal service support disbursements
by adopting an interim, emergency cap on the amount of high-cost
support that competitive ETCs may receive. Further, on January 29,
2008, the Commission released three notices of proposed rulemaking
addressing proposals for comprehensive reform of the high-cost program.
In the Identical Support Rule NPRM, the Commission tentatively
concludes that it should eliminate the Commission's current ``identical
support'' rule, which provides competitive ETCs with the same per-line
high-cost support amounts that incumbent LECs receive. In the Reverse
Auctions NPRM, the Commission tentatively concludes that reverse
auctions offer several potential advantages over the current high-cost
support distribution mechanisms. In the Joint Board Comprehensive
Reform NPRM, the Commission is considering the recommendations of the
Joint Board to establish three separate funds with distinct budgets and
purposes: A broadband fund; a mobility fund; and a provider of last
resort fund, and to adopt an overall cap on high-cost funding. The
Commission is also considering all the principles in section 254(b) of
the Act, including reasonable comparability, in the Tenth Circuit
Remand proceeding. Further, building on the progress made by the
Commission in the Comprehensive Review Order, the Commission is
continuing to consider comprehensive USF reform proposals raised in, or
in response to, the Comprehensive Review NPRM, including ways to
simplify the E-Rate program.
11. These oversight improvements have built upon the earlier
measures taken by the Commission. In 1999, in the Commitment Adjustment
Order, the Commission directed the USF Administrator to recover E-Rate
funds committed in violation of the Act. In 2003, the Commission
adopted a debarment rule and other measures for the E-Rate program to
safeguard the Fund. In addition, as mentioned above, the Commission has
taken other actions to detect and deter waste, fraud, and abuse of the
Fund.
Summary of Audit Findings
12. In the Comprehensive Review NPRM, we asked whether we should
require audits of program participants. In the Comprehensive Review
Order, we concluded that the Inspector General's compliance audits of
contributions to the USF and distributions from the USF would provide
appropriate audit oversight of the USF programs and that an additional
annual audit requirement was unnecessary. Working under the Inspector
General's supervision, independent auditors audited distributions from
and contributions to the USF that occurred during the 2005 funding
year. The auditors tested compliance with the Commission's rules and
provided the basis for the Inspector General's statistical estimates of
erroneous payments as defined in the Improper Payments Information Act
of 2002 (``IPIA''). Under the IPIA, a program is at risk if the
erroneous payment rate exceeds 2.5 percent and the total amount of
erroneous payment is greater than $10 million. Under those criteria,
the low-income, schools and libraries, and high-cost fund distributions
were determined to be at risk. These audits represent the most rigorous
review of USF beneficiaries and contributors since the Fund's
inception. The auditors performed a random sample of 459 audits of
[[Page 60692]]
beneficiaries from all USF programs, as well as contributors, from
2005. The Inspector General released a preliminary analysis on October
3, 2007. The Office of Managing Director (``OMD'') subsequently
directed the USF Administrator to propose steps it could take to reduce
future improper payments based on the information gained from the
Inspector General's audits. The USF Administrator submitted a report on
December 31, 2007, and a follow-up report on February 28, 2008. In its
reports, the USF Administrator proposes additional steps that it could
take to enhance oversight.
13. Contributors. Section 254 of the Act and the Commission's rules
require all telecommunications carriers providing interstate and
international telecommunications services and certain other providers
of interstate telecommunications to contribute to the USF. Ninety
contributors were randomly selected for the audits. The contribution
improper payment rate was 5.50 percent. The independent auditors found
noncompliance with the following rules: Rules associated with
contributor ID; regulatory contact information; agent for service of
process; Commission registration number; company's reported interstate
revenues; company's reported interstate estimate; certification, and
records maintained to support data.
14. Low-income program. The low-income program provides discounts
to qualified consumers by reducing installation fees and monthly
charges for basic telephone service. Additional discounts are available
to qualified consumers living on tribal lands. The estimated improper
payment rate was 9.5 percent. Areas of noncompliance included
violations of the following: Advertising supported services; rates;
link up discount; support of toll election; no deposit for lifeline;
determination of consumer qualification; eligibility verification;
officer certification; procedures for qualification; accurate
submission of Form 497; record keeping; and certification from
resellers.
15. Schools and libraries program. The E-Rate program provides
discounts to schools and libraries for telecommunications services,
Internet access, and internal connections. The auditors estimated the
improper payment rate at 12.9 percent. The auditors found non-
compliance in several areas, such as recordkeeping; eligible services;
using the correct discount; and entering into a contract too early in
the application process.
16. High-cost program. The high-cost program provides support for
ETCs to ensure that consumers in all rural, insular, and high-cost
areas have access to telecommunications services at rates that are
reasonably comparable to those paid in urban areas. The estimated
improper payment rate was 16.6 percent. The auditors found
noncompliance with various rules, e.g., failure to accurately report
historical revenue; failure to report the number of working loops;
failure to submit forms; and failure to submit data.
17. Rural health care program. The rural health care program
provides discounts to rural health care providers to ensure they pay no
more than their urban counterparts for their telecommunications needs
in the provision of health care services. In addition, the program
provides support to rural health care providers for access to the
Internet. The estimated improper payment rate was 20.64 percent which
was mainly due to record keeping and record production problems.
18. In the Comprehensive Review Order, the Commission adopted rules
that addressed many of the audit findings. For example, the audits
disclosed widespread failure of beneficiaries to retain appropriate
documentation to justify USF support. The document retention
requirements adopted in the Comprehensive Review Order should remedy
these problems. Other concerns raised by the audits, such as rule
violations, may be prevented by better outreach by the USF
Administrator, or other methods of educating program beneficiaries.
III. Discussion
19. At the outset, we seek comment broadly on ways to further
strengthen the administration, management, and oversight of the Fund.
For example, we seek comment on what additional measures the Commission
can implement to prevent improper USF payments, to safeguard the USF
from waste, fraud, and abuse, to ensure that all providers are properly
contributing the amounts they have collected from their subscribers to
the USF, and to help operate the program in a more efficient, effective
manner. Commenters should propose measures that the USF Administrator
could take to prevent improper payments and collect all sums that
should be paid to the fund and address the error rates identified in
the Inspector General's audit results. Commenters should also propose
measures that the Commission could take to prevent improper payments
and address error rates, as well as measures that program participants
can take to prevent improper payments and address error rates. We seek
comment on whether the Commission should adopt an independent audit
requirement for program beneficiaries and contributors. Commenters
should address whether safeguards should be adopted uniquely for
certain USF programs and contributions or if the safeguards should
remain more or less uniform, and if so, why. Commenters should discuss
the costs versus benefits of their proposals in specific, rather than
general, terms. We recognize that the four USF disbursement programs
and the contribution mechanism have many differences and perhaps need
different, more closely tailored requirements to prevent waste, fraud,
and abuse efficiently and effectively. In summary, we seek comment on
whether different safeguards are necessary for the different aspects of
the universal service program. We also use this as an opportunity to
request that parties refresh the record on these issues in response to
the Commission's 2005 Comprehensive Review NPRM.
20. We expect to continue to rely on the expert oversight of the
Commission's Inspector General to conduct and maintain a sufficient
audit program. As noted above, the Commission's Inspector General
completed the most comprehensive round of audits of the USF ever
conducted. Based on these initial results, the Inspector General has
initiated plans to significantly expand the audit program going-forward
in order to provide more precise estimates of the error rates and more
detailed information on the underlying causes of any high error rates.
In Fiscal Year 2008, the Commission requested and received from
Congress $21.48 million for the Inspector General's USF oversight
efforts. The Commission has requested an additional $25.48 million in
USF oversight funding for the Inspector General in Fiscal Year 2009. As
the Inspector General completes audits of the program, we will continue
to recover any improperly disbursed monies and work to implement
appropriate corrective action in light of the audit results.
21. We seek comment on whether the Commission should establish
additional rules pertaining to document retention and enforcement. We
note that most problems identified in the audit results were related to
lack of documentation by program participants. In August 2007, the
Commission adopted specific document retention rules for each USF
mechanism. We seek comment on whether the audit results suggest that
the Commission should take additional
[[Page 60693]]
steps related to document retention in order to help verify that USF
monies are used for their intended purposes. If so, what steps should
be taken? Should recipients of universal service funding be required to
retain documents that they are currently not required to retain?
Currently, the rules require that records be retained for five years
for all aspects of the USF, except for the low-income program for which
documents must be retained for as long as the recipient continues to
receive supported service plus three additional years. Should
applicants and service providers be required to retain records for a
longer period? Should the Commission embrace additional enforcement
methods, or adopt additional enforcement rules, to address these issues
and, if so, what should they be?
22. As part of our examination into enhancing our oversight and
management of the USF, we seek comment on whether the Commission should
take steps to more clearly define the goals of the federal universal
service programs. We seek comment on whether we should adopt specific
qualitative or quantitative goals beyond those policy objectives
enumerated in section 254 of the Act. We ask parties that advocate
additional goals to identify with specificity the goals they recommend
we apply.
23. In 2005 we sought comment on the utility of a permanent
administrator of the USF. We specifically solicited comment from
stakeholders on the option of eliminating USAC as the permanent
administrator of the USF and thereby using a contractor (obtained using
the FAR) to perform the administration of the USF. As a general matter,
commenters either did not address this proposal or filed comments in
support of retaining the status quo. We use this opportunity to refresh
the record in this regard. Should the Commission continue to use a
permanent administrator of the USF? Alternatively, the Commission could
obtain the services of a contractor or contractors to perform the USF
Administrator's functions. We seek comment on this option.
24. Earlier this year, the Commission required the USF
Administrator to establish customer service standards and to report
regularly on the quality of service provided to USF stakeholders. At
this time, the USF Administrator collects and reports the number and
type of complaints received, the number of inquiries, the average
number of business days to resolve complaints, and the percentage of
complaints resolved within 20 business days. These specific data
elements are currently under review and may change. We note that the
USF Administrator is now required to base its executive compensation in
part on the quality of service it provides stakeholders. In the
meantime, we seek comment from USF stakeholders on additional metrics
the USF Administrator should collect and report to illustrate the
quality of service it provides stakeholders.
25. We seek comment on what additional performance management
techniques the Commission could adopt to improve the administration and
operation of the USF. In August 2007, the Commission took initial steps
to improve the performance management of the USF by adopting
performance measures to help ensure the program operates in an
efficient, effective manner. Most of these performance measures were
``output measures.'' OMB and GAO have written extensively on the use of
performance management techniques and the use of performance goals and
measures in Federal programs. OMB and GAO have recommended greater
reliance on other types of performance goals and measures, including
``outcome'' and ``efficiency'' measures. Because we are committed to
ensuring the USF operates in the manner intended by Congress, we seek
comment on whether the Commission should establish additional
performance goals and measures, or delete or revise any previously
established performance goals and measures, and, more fundamentally, if
the Commission has the authority to set long-term goals for the USF
programs. If so, what additional performance goals and measures should
be established, deleted, or modified, and, if so, why? Should
performance measures be oriented toward the implicit social welfare
objectives of the USF programs or tied only to accomplishment of the
explicit requirements of the Act? If and when long-term program goals
are met, does the Commission have the authority to terminate or
significantly modify a USF program, without explicit Congressional
direction?
26. The GAO recently concluded that the internal control mechanisms
over the High Cost program, including the use of audits, have
``weaknesses.'' However, the GAO declined to make any specific
recommendations for strengthening or improving the internal control
structure over the program beyond recommending that the Commission
``should identify areas of risk in its internal control environment and
implement mechanisms that will help ensure compliance with program
rules and produce cost-effective use of program funds.'' Nor did the
GAO identify any specific internal control weaknesses beyond concluding
that the existing internal controls ``may not fully address'' the
concerns the GAO identified about cost-effectiveness, accuracy of cost
and line count data, and the appropriateness of high cost support. We
invite program stakeholders to identify areas of risk in the program's
internal control environment and to propose mechanisms that will help
ensure compliance with program rules and produce cost-effective use of
program funds. We seek comment on additional measures we can take to
enhance the internal control structure of the entire USF, including all
four beneficiary support mechanisms and the contributions program. We
seek comment on whether we should establish an independent audit
requirement such as the one discussed in the 2005 NPRM. We note that
the Commission's OIG may exercise its discretion to evaluate the
accuracy of cost and line count data, which the GAO identified as a
concern. We seek comment on whether the Commission should establish any
additional measures to provide better guarantees in this area.
27. Commenters should describe the costs and benefits of any such
proposals, including the costs associated with any information
collection effort. Commenters should address how the Commission should
gather, process, and report on performance measures. Should the funds
for such data collection and processing come from the USF? If so, how
much USF money should be spent on an information collection effort for
performance measurements?
28. Commenters should also discuss whether short-term goals should
flow from explicitly stated long-term goals and if the Commission has
the responsibility to set short-term operational goals based upon the
requirements in the Act. Should performance measurements of
accomplishment of the long and short-term goals be at least in part the
responsibility of the USF Administrator?
29. We seek comment on any specific long-term and short-term goals
of the USF programs. With respect to the high-cost program, we seek
comment on any quantifiable measures that can be used in determining
the program's success in meeting its goals. Commenters should discuss
whether the Commission has the authority to adopt goals that are not
specifically part of section 254 of the Act. Commenters should address
whether high-cost program goals should
[[Page 60694]]
focus exclusively on broadband connections or develop a defined mix of
support for broadband and traditional voice telecom. Commenters should
discuss appropriate long-term goals for the schools and libraries
program and what the Commission should do with respect to the schools
and libraries program after such goals have been met. For example, if
an appropriate long-term goal is a certain level of connectivity in the
Nation's schools and libraries, what should the Commission do, and what
authority does the Commission have, with respect to the program after
that level of connectivity is met? With respect to the high-cost
program, should the Commission create a low, mid, and high range set of
options regarding services that could be provided by the program under
current rules with less, the same, or more funding?
30. We recognize that a specific rule may never be specific enough
to adequately address all situations. In addition, a specific rule may
not remain perfectly up-to-date, especially in such a dynamic industry
as telecommunications, e.g., changes in technology, corporate
structures, etc. We recognize the need of an administrator to be able
to effectively implement our rules in such a fast-changing environment.
Under Part 54 of our rules, USAC, as the administrator, is not
permitted to make policy decisions without bureau guidance. Any party,
including USAC and NECA, can file for such guidance at any time. Timely
guidance would be important to the efficient and effective
administration of the USF programs. We seek comment on the efficiency
and effectiveness of this process for obtaining timely guidance with
interpretation of our rules, especially with regard to the
administration of the USF programs. Commenters are encouraged to
provide specifics to the extent possible. For example, comments on
actual experience(s) in receiving timely guidance on the interpretation
of our rules would be most helpful. Commenters are also asked to state
how any identified problem area can be improved.
31. We seek comment on whether the Commission should establish
additional rules pertaining to internal control requirements for
program participants. For example, OMB Circular A-123 describes the
internal control requirements applicable to Federal agencies. In this
circular, OMB describes internal control, consisting of organization,
policies, and procedures, as a method to help program and financial
managers achieve results and safeguard the integrity of their programs.
We seek comment on what steps, if any, the Commission should take with
respect to the establishment of internal control measures for program
participants. We also seek comment on whether the Commission's internal
control measures should be improved with respect to the Universal
Service Fund. Commenters should describe any internal control
recommendations in detail, as well as the estimated costs and benefits
of any such requirements. Commenters should discuss whether the
Commission needs to have more direct oversight of the USF
Administrator, with respect to the internal controls of the USF.
32. We note that, under the Commission's rules, NECA performs
certain activities and functions related to the USF. For example, NECA
is the sole shareholder of the current USF Administrator, USAC. In
addition, NECA collects certain data used to administer the high cost
program. On a related note, NECA performs comparable administrative
functions over the TRS fund. We seek comment on whether we should take
additional measures concerning NECA's relationship to the current USF
Administrator and its activities in the program. For example, should
the Commission adopt any specific conflict of interest or other
requirements pertaining to NECA (or its successors or assigns) and its
relations with the USF Administrator? Should the Commission establish
any requirements specifically designed to create greater transparency
in the relationship between NECA and the USF Administrator? We seek
comment on whether we should establish any rules governing the NECA
board with respect to its relations with the USF Administrator, such as
the sharing of information or the possibility of shared board members.
USAC has proposed that the Commission consider whether USAC should be
divested from NECA ownership. We seek comment on USAC's proposal.
33. Since 2005, the Commission has required USAC to conduct its
procurements consistent with the Federal Acquisition Regulation
(``FAR''). We seek comment on ways that we can improve our oversight of
the Administrator's procurement function. For example, should the
Commission adopt rules that apply fully the socio-economic goals
incorporated into the FAR, such as veteran's preferences and small
business set-asides? We note that the USF Administrator is currently
subject to an annual audit as specified in Part 54 of the Commission's
rules and that, while this audit may cover the USF Administrator's
procurement activities, such reviews and evaluations are not
guaranteed. We therefore seek comment on the extent to which we should
establish additional oversight of the USF Administrator's compliance
with the FAR. We note that the MOU requires the USF Administrator to
take greater steps to use performance-based contracting in its
procurements. We seek comment on whether we should mandate a percentage
of the USF Administrator's procurements to be performance-based. We
also seek comment on other ways to ensure fairness and transparency in
the USF Administrator beyond those provided for the in FAR.
Alternatively, the Commission could handle certain or all procurements
on behalf of the USF Administrator. We seek comment on whether the
Commission should take a more active role in the USF Administrator's
procurements, such as by handling all aspects of the procurement
process for contracts exceeding $250,000. Commenters should discuss
whether the Commission should impose additional substantive or
reporting requirements on the Administrator.
34. We seek comment on what additional measures, if any, the
Commission should undertake with respect to the application process for
each of the USF programs. For example, should the Commission revise any
of the existing procedures or forms to help safeguard the process for
obtaining program benefits? In particular, should additional
information be required of program participants in the application
process that would improve the detection of waste, fraud, or abuse, or
that would enable the Commission to evaluate whether or how universal
service goals are being met? We seek comment on these issues for each
of the universal service mechanisms.
35. We seek comment on ways in which we could ensure better
accuracy in the certification and verification requirements in the low-
income program. In 2004, the Commission adopted federal verification
and certification procedures and required states, under certain
circumstances, to establish verification and certification procedures
to minimize potential abuse in the low-income program. Each year, ETCs
are required to verify the continued eligibility of a statistically
valid sample of their Lifeline subscribers. ETCs in states that do not
have state-based low-income programs must follow the certification and
verification procedures set out in the Lifeline Order. ETCs in states
with their own state-based low-income programs must follow the state-
established
[[Page 60695]]
verification procedures. We are concerned about the possibility of
waste, fraud, and abuse in this program by consumers and
telecommunications carriers, in federal default states as well as in
other states. We therefore seek comment on how to improve the
certification and verification requirements. Commenters should suggest
ways in which the USF Administrator can better ensure that Lifeline and
Link-Up low-income consumers are eligible for such programs after their
initial enrollment. Commenters should also discuss whether different
methods should be used to prevent waste, fraud, and abuse in federal
default states and in states that are not federal default states.
IV. Procedural Matters
A. Initial Paperwork Reduction Act Analysis
36. This NOI does not contain proposed or modified information
collections subject to the Paperwork Reduction Act of 1995 (``PRA''),
Public Law 104-13. This NOI does not contain any new or modified
``information collection burden for small business concerns with fewer
than 25 employees,'' pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198.
B. Ex Parte Rules
37. This is as a ``permit-but-disclose'' proceeding subject to the
requirements under section 1.1206(b) of the Commission's rules. Ex
parte presentations are permissible if disclosed in accordance with
Commission rules, except during the Sunshine Agenda period when
presentations, ex parte or otherwise, are generally prohibited. Persons
making oral ex parte presentations are reminded that a memorandum
summarizing a presentation must contain a summary of the substance of
the presentation and not merely a listing of the subjects discussed.
More than a one- or two-sentence description of the views and arguments
presented is generally required. Additional rules pertaining to oral
and written presentations are set forth in section 1.1206(b).
C. Filing Requirements
38. Comments and Replies. Pursuant to sections 1.415 and 1.419 of
the Commission's rules, interested parties may file comments on or
before the dates indicated on the first page of this document. Comments
may be filed using: (1) The Commission's Electronic Comment Filing
System (``ECFS''), (2) the Federal Government's eRulemaking Portal, or
(3) procedures for filing paper copies.
39. Electronic Filers: Comments may be filed electronically using
the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs or the
Federal eRulemaking Portal: http://www.regulations.gov. Filers should
follow the instructions provided on the Web site for submitting
comments. For ECFS filers, if multiple docket or rulemaking numbers
appear in the caption of this proceeding, filers must transmit one
electronic copy of the comments for each docket or rulemaking number
referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address,
and the applicable docket or rulemaking number. Parties may also submit
an electronic comment by Internet e-mail. To get filing instructions,
filers should send an e-mail to [email protected], and include the following
words in the body of the message, ``get form.'' A sample form and
directions will be sent in response.
40. Paper Filers: Parties who choose to file by paper must file an
original and four copies of each filing. If more than one docket or
rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number. Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail (although we continue to experience delays in
receiving U.S. Postal Service mail). All filings must be addressed to
the Commission's Secretary, Office of the Secretary, Federal
Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
41. Availability of Documents. Comments, reply comments, and ex
parte submissions will be available for public inspection during
regular business hours in the Commission Reference Center, Federal
Communications Commission, 445 12th Street, SW., CY-A257, Washington,
DC 20554. These documents will also be available free online, via ECFS.
Documents will be available electronically in ASCII, Word, and/or Adobe
Acrobat.
42. Accessibility Information. To request information in accessible
formats (computer diskettes, large print, audio recording, and
Braille), send an e-mail to [email protected] or call the Commission's
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice),
(202) 418-0432 (TTY). This document can also be downloaded in Word and
Portable Document Format (``PDF'') at: http://www.fcc.gov.
V. Ordering Clauses
43. Accordingly, it is ordered that, pursuant to sections 1, 4(i)
and (j), 9, 205, and 303(r) of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 154(j), 159, 205, and 303(r), this
Notice of Inquiry is hereby adopted.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E8-24300 Filed 10-10-08; 8:45 am]
BILLING CODE 6712-01-P