**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | CC Docket No. 96-45          |
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| Federal-State Joint Board on     | ** |                              |
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| Universal Service                | *  |                              |
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| Guam Cellular and Paging, Inc.   | ** |                              |
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| Petition for Waiver of Section   | *  |                              |
| 54.314 of the Commission's Rules | *) |                              |
| and Regulations                  | ** |                              |
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**ORDER**

**Adopted: April 16, 2003 Released: April 17, 2003**

By the Chief, Telecommunications Access Policy Division:

# introduction

1.  In this Order, we grant a request from Guam Cellular and Paging,
    Inc. (Guamcell), a competitive eligible telecommunications carrier
    (ETC), for waiver of the October 1, 2001 certification filing
    deadline set forth in section 54.314(d)(1) of the Commission's rules
    for high-cost universal service support in areas served by rural
    carriers. Granting Guamcell's waiver request will allow it to
    receive universal service support beginning on February 1, 2002, the
    date Guamcell filed its high-cost certification under section
    54.314(d) with the Commission.

# background

2.  Section 254(e) of the Communications Act of 1934, as amended (the
    Act), provides that "only an eligible telecommunications carrier
    designated under section 214(e) shall be eligible to receive
    specific Federal universal service support."[^1] Once a carrier is
    designated as an ETC, there are other requirements that must be
    satisfied before a carrier can begin receiving high-cost universal
    service support. Section 254(e) requires that support shall be used
    "only for the provision, maintenance, and upgrading of facilities
    and services for which support is intended."[^2] To implement this
    statutory requirement, the Commission adopted an annual
    certification requirement. Section 54.314 of the Commission's rules
    provides that states desiring rural ETCs to receive universal
    service high-cost support shall file an annual certification with
    the Universal Service Administrative Company (USAC) and the
    Commission stating that all high-cost support received by such
    carriers within such state will be used "only for the provision,
    maintenance, and upgrading of facilities and services for which
    support is intended."[^3] In instances where carriers are not
    subject to the jurisdiction of a state, the Commission allows an ETC
    to certify directly to the Commission and USAC that federal
    high-cost support will be used in a manner consistent with section
    254(e).[^4] Section 54.314 provides that the certification must be
    filed by October 1 of the preceding calendar year to receive support
    beginning in the first quarter of a subsequent calendar year.[^5] If
    the October 1 deadline for first quarter support is missed, the
    certification must be filed by January 1 for support to begin in the
    second quarter, by April 1 for support to begin in the third
    quarter, and by July 1 for support to begin in the fourth
    quarter.[^6] The Commission established this schedule to allow USAC
    sufficient time to process section 254(e) certifications and
    calculate estimated high-cost demand amounts for submission to the
    Commission.[^7]

3.  *[Guamcell's Petition for Waiver]{.underline}*. On July 26, 2001,
    Guamcell submitted an application with the Commission requesting
    designation as an ETC to receive high-cost support for operation in
    the Territory of Guam.[^8] On January 25, 2002, the Wireline
    Competition Bureau[^9] (Bureau) of the Commission designated
    Guamcell as an ETC.[^10] On February 1, 2002, consistent with
    section 54.314(b) of the Commission's rules, Guamcell certified to
    the Commission that federal high-cost support would be "used only
    for the provision, maintenance and upgrading of facilities and
    services for which the support is intended pursuant to Section
    254(e)" of the Act.[^11] On February 6, 2002, Guamcell filed a
    request for waiver of section 54.314 requesting the Commission
    accept Guamcell's annual certification for high-cost support so that
    it can receive support beginning on February 1, 2002, the date
    Guamcell filed its high-cost certification under section 54.314(d).

4.  Guamcell contends that good cause exists for granting its waiver of
    section 54.314 of the Commission's rules because it did not receive
    its ETC designation until January 25, 2002. Specifically, Guamcell
    argues that granting its request is consistent with the Commission's
    goal of competitive neutrality and will serve the public
    interest.[^12]

5.  Generally, the Commission's rules may be waived for good cause
    shown.[^13] As noted by the Court of Appeals for the D.C. Circuit,
    however, agency rules are presumed valid[^14][^15] The Commission
    may exercise its discretion to waive a rule where the particular
    facts make strict compliance inconsistent with the public
    interest[^16][^17] In addition, the Commission may take into account
    considerations of hardship, equity, or more effective implementation
    of overall policy on an individual basis[^18][^19] Waiver of the
    Commission's rules is therefore appropriate only if special
    circumstances warrant a deviation from the general rule, and such a
    deviation will serve the public interest.

# discussion

6.  We find that good cause exists to waive the certification deadlines
    contained in section 54.314 of the Commission's rules so that
    Guamcell can receive support beginning in the first quarter of
    2002.[^20] Guamcell has demonstrated that special circumstances
    warrant a deviation from the filing deadlines provided in section
    54.314(d) of the Commission's rules. Because Guamcell did not
    receive its ETC designation until January 25, 2002, it could not
    have met, under any circumstances, the October 1, 2001 filing
    deadline for receiving support beginning in the first quarter of
    2002, or the January 1, 2002 deadline for receiving support in the
    second quarter of 2002.[^21] Guamcell, however, made the necessary
    certification on February 1, 2002, a week after having been
    designated as an ETC by the Commission.[^22] The certification
    filing schedule set out in the Commission's rules was adopted to
    ensure that USAC has sufficient time to process the certifications
    prior to its submission of estimated support requirements to the
    Commission. It would be onerous, however, to deny an ETC receipt of
    universal service support for almost two quarters as a result of a
    particular ETC designation having occurred after the certification
    filing deadline. We therefore find that Guamcell has demonstrated
    special circumstances that justify a waiver of section 54.314. In
    this instance, these special circumstances outweigh any processing
    difficulties that USAC may face as a result of the late-filed
    certification.[^23]

7.  We also conclude that waiver of section 54.314 would be consistent
    with the public interest. Competitive neutrality is a fundamental
    principal of the Commission's universal service policies.[^24]
    Denying first quarter and second quarter 2002 support to Guamcell, a
    competitive ETC, merely because the timing of its ETC designation
    precluded it from timely filing its October 1 certifications would
    undermine the Commission's goals of competitive neutrality. Because
    the Commission has found that "competitively neutral access to
    support is critical to ensuring that all Americans have access to
    affordable telecommunications," Guamcell should not be penalized as
    a result of the timing of its ETC designation.[^25] We therefore
    conclude waiver of this rule is in the public interest.

8.  In conclusion, because Guamcell became eligible to receive high-cost
    support after the October 1, 2001 certification filing deadlines, we
    find that good cause exists to warrant a waiver of section 54.314(d)
    of the Commission's rules. As Guamcell requested, this waiver shall
    allow Guamcell to begin receiving high-cost support as of February
    1, 2002, the date it filed its high-cost certification under section
    54.314 of the Commission's rules.

# ordering clause

9.  Accordingly, IT IS ORDERED, pursuant to sections 1, 4(i), 5(c), 201,
    and 202 of the Communications Act of 1934, as amended, 47 U.S.C. §§
    151, 154(i), 155(c), 201, and 202, and sections 0.91, 0.291, and 1.3
    of the Commission\'s rules, 47 C.F.R. §§ 0.91, 0.291, and 1.3, that
    the petition for waiver of section 54.314(d) of the Commission\'s
    rules, filed by Guam Cellular and Paging, Inc. on February 6, 2002,
    IS GRANTED, as described herein.

FEDERAL COMMUNICATIONS COMMISSION

Eric N. Einhorn

> Chief, Telecommunications Access Policy Division

Wireline Competition Bureau

[^1]: 47 U.S.C. § 254(e). Section 214(e) of the 1996 Act provides that
    state commissions, or this Commission when states lack jurisdiction,
    shall designate carriers as ETCs. 47 U.S.C. § 214(e).

[^2]: 47 U.S.C. § 254(e).

[^3]: 47 C.F.R. § 54.314. The certification requirement for non-rural
    ETCs is found in section 54.313 of the Commission's rules.

[^4]: *See Federal-State Joint Board on Universal Service*, CC Docket
    No. 96-45, Fourteenth Report and Order and Twenty-Second Order on
    Reconsideration, *Multi-Association Group (MAG) Plan for Regulation
    of Interstate Services of Non-Price Cap Incumbent Local Exchange
    Carriers and Interexchange Carriers*, CC Docket No. 00-256, Report
    and Order, 16 FCC Rcd 11244, para. 189 (rel. May 23, 2001) (*Rural
    Task Force Order*); 47 C.F.R. § 54.314(b).

[^5]: 47 C.F.R. § 54.314(d)(1).

[^6]: *See* 47 C.F.R. § 54.314(d).

[^7]: *See Rural Task Force Order*, 16 FCC Rcd at 11319, para. 191.
    Under the Commission's rules, USAC submits to the Commission
    estimated demand for the universal service support mechanisms,
    including high-cost support, two months prior to the beginning of
    each quarter. *See* 47 C.F.R. § 54.709(a)(3). Therefore, for the
    first quarter, USAC submits estimated demand amounts to the FCC on
    or before November 1. In order to submit an accurate estimate by
    that date, USAC generally needs to know which carriers have been
    certified under the Commission's rules no later than October 1. *See
    Rural Task Force Order*, 16 FCC Rcd at 11319, para. 191.

[^8]: *See* Guam Cellular and Paging, Inc., Petition for Waiver, filed
    Feb. 6, 2002, at 1 (Guamcell Petition).

[^9]: Formerly the Common Carrier Bureau.

[^10]: *See* *Guam Cellular and Paging, Inc. d/b/a Guamcell
    Communications Petition for Designation as and Eligible
    Telecommunications Carrier in the Territory of Guam, Memorandum
    Opinion and Order*, DA 02-174, CC Docket 96-45 (Com. Car. Bur. rel.
    Jan. 25, 2002) (*Guamcell ETC Designation Order*).

[^11]: *See Letter* from Phillip N. Lyons, Chairman and CEO, Guamcell,
    to Magalie R. Salas, Secretary, FCC (Jan. 31, 2002).

[^12]: *See* Guamcell Petition at 6-7.

[^13]: 47 C.F.R. § 1.3.

[^14]: ^.^

[^15]: *WAIT Radio v. FCC*, 418 F.2d 1153, 1159 (D.C. Cir. 1969), *cert.
    denied*, 409 U.S. 1027 (1972).

[^16]: ^.^

[^17]: *Northeast Cellular Telephone Co. v. FCC*, 897 F.2d 1164, 1166
    (D.C. Cir. 1990).

[^18]: ^.^

[^19]: *WAIT Radio*, 418 F.2d at 1159; *Northeast Cellular*, 897 F.2d at
    1166.

[^20]: *See, e.g*., *Federal-State Joint Board on Universal Service,
    West Virginia Public Service Commission, Request for Waiver of State
    Certification Requirements for High-Cost Universal Service Support
    for Non-Rural Carriers*, Order, CC Docket No. 96-45, 16 FCC Rcd 5784
    (2001) (granting a waiver of the October 1 certification filing
    deadline); *Federal-State Joint Board on Universal Service, RFB
    Cellular, Inc., Petitions for Waiver of Sections 54.314(d) and
    54.307(c) of the Commission's Rules and Regulations*, Order, CC
    Docket No. 96-45, 17 FCC Rcd 24387 (Wireline Compet. Bur. 2002)
    (granting a waiver of the October 1 certification filing deadline)
    (*RFB Cellular Waiver Order*).

[^21]: Because we grant Guamcell a waiver of the October 1 deadline
    which will allow Guamcell to receive support beginning in first
    quarter 2002, it is unnecessary to also grant Guamcell a waiver of
    the January 1, 2002 filing deadline. *See* Guamcell Petition at 3;
    47 C.F.R. 54.314(d)(2).

[^22]: *See* Guamcell Petition at 3.

[^23]: To facilitate timely payments and to minimize the administrative
    burden associated with processing those payments, we direct USAC to
    distribute Guamcell's retroactive support payments on a phased-in
    basis. Specifically, we instruct USAC to pair retroactive support
    payments with regular monthly support payments as follows until all
    retroactive support has been paid: Guamcell's April 2003 support
    payment (disbursed in May 2003) shall include its February 2002
    support payment; Guamcell's May 2003 support payment (disbursed in
    June 2003) shall include its March 2002 support payment; Guamcell's
    June 2003 support payment (disbursed in July 2003) shall include its
    April 2002 support payment; Guamcell's July 2003 support payment
    (disbursed in August 2003) shall include its May 2002 support
    payment; and Guamcell's August 2003 support payment (disbursed in
    September 2003) shall include its June 2002 support payment.

[^24]: *See Federal-State Joint Board on Universal* Service, CC Docket
    96-45, Ninth Report and Order and Eighteenth Order on
    Reconsideration, 14 FCC Rcd 20432, 20479-78, paras. 89-90 (1999)
    (*Ninth Report and Order*), *reversed in part and remanded in part,
    Qwest Corp. v. FCC*, 258 F.3d 1191 (10th Cir. 2001). *See also*
    *Federal-State Joint Board on Universal Service; Promoting
    Deployment of Subscribership in Unserved and Underserved Areas,
    Including Tribal and Insular Areas*, CC Docket No. 96-45, Twelfth
    Report and Order, Memorandum Opinion and Order, and Further Notice
    of Proposed Rulemaking, 15 FCC Rcd 12208, 12264-65, para. 114 (2000)
    ("competitively neutral access to ... support is critical to
    ensuring all Americans, including those that live in high-cost
    areas, have access to affordable telecommunications.").

[^25]: *See id.*