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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| Mescalero Apache Telecom, Inc.   | ) |                              |
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| Waiver of Section 54.305 of the  | * |                              |
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**ORDER**

**Adopted:** January 11, 2001 **Released:** January 18, 2001

By the Commission:

# INTRODUCTION

1.  In this Order, we grant a request from Mescalero Apache Telecom,
    Inc. (Mescalero), a newly-formed tribally-owned carrier, for a
    waiver of section 54.305 of the Commission's rules.[^1] This waiver
    will enable Mescalero to receive high-cost universal service support
    based on the average cost of the 950 access lines acquired from
    Valor Telecommunications of New Mexico, LLC (Valor). These access
    lines serve the newly established study area within the Mescalero
    Apache Reservation in New Mexico.[^2] Absent this waiver, Mescalero
    would receive the per-line level of high-cost universal service
    support that Valor received for the lines prior to the transfer.

2.  The grant of this waiver will enable Mescalero to fulfill its
    commitment to bring basic service to all unserved residences on the
    Reservation in its first two years of operation, as well as permit
    Mescalero to expand service in underserved areas of the Reservation.
    According to Mescalero, more than fifty percent of the residences on
    the Reservation are without telephone service.[^3] As the Commission
    previously concluded, enhancing tribal communities' access to
    telecommunications, including access to interexchange services,
    advanced telecommunications, and information services, increases
    tribal communities' access to education, commerce, government, and
    public services.[^4] By helping to bridge the physical distances
    between those living on the Reservation and the emergency, medical,
    employment, and other services that they may need, our action here
    will help improve the Mescalero Apache community's standard of
    living.

# background

## Section 54.305 Transfer of Universal Service Support

3.  Section 54.305 of the Commission's rules provides that a carrier
    acquiring exchanges from an unaffiliated carrier shall receive the
    same per-line levels of high-cost universal service support for
    which the acquired exchanges were eligible prior to their
    transfer.[^5] For example, if a rural carrier purchases an exchange
    from a non-rural carrier that receives support based on our new
    universal service support mechanism for non-rural carriers, [^6] the
    loops of the acquired exchange receive the same per-line support as
    calculated under the new non-rural mechanism, regardless of the
    support that the rural carrier purchasing the exchange may receive
    for any other exchanges.[^7] In adopting section 54.305, the
    Commission sought to ensure that a selling carrier does not
    artificially inflate the price of an exchange in anticipation of the
    buyer's receipt of increased universal service support as a result
    of the transfer.[^8] High-cost support mechanisms currently include
    non-rural carrier forward-looking high-cost support,[^9] interim
    hold-harmless support for non-rural carriers,[^10] rural carrier
    high-cost loop support,[^11] local

    switching support,[^12] and Long Term Support (LTS).[^13] To the
    extent that a carrier acquires exchanges receiving any of these
    forms of support, the acquiring carrier will receive the same
    per-line levels of support for which the acquired exchanges were
    eligible prior to their transfer. [^14]

## The Petition 

4.  On June 30, 2000, Mescalero, GTE Southwest Incorporated (GTE), and
    Valor filed a joint petition for waiver of various Commission rules
    in order to effectuate Mescalero's acquisition of 950 access lines
    forming the nucleus of Mescalero's operations on the
    Reservation.[^15] Mescalero seeks a waiver of section 54.305 to
    receive high-cost support based on the average cost of the acquired
    access lines under its ownership, rather than the per-line level of
    support for which the acquired lines were eligible prior to their
    transfer.[^16] Mescalero estimates that it would receive, on
    average, an additional

    \$1,790,000 annually in high-cost support over its first three years
    of operation.[^17] Absent the waiver, Mescalero estimates that it
    would receive the approximately \$28,884 in support for which the
    access lines are currently eligible.[^18] Mescalero states that
    failure to waive section 54.305 will "seriously jeopardize \[its\]
    ability to fulfill its goal of providing high-quality basic and
    advanced telecommunications services to the Tribe and its
    people."[^19] Moreover, Mescalero emphasizes that it will be "wholly
    unable to extend service to the unserved areas within the
    Reservation if it cannot receive USF support based on the average
    cost of all of its lines."[^20]

5.  On August 10, 2000, the Common Carrier Bureau released a public
    notice seeking comment on the petition. [^21] The Salt River
    Pima-Maricopa Indian Community and Saddleback Communications
    submitted comments in support of Mescalero's petition.[^22] Salt
    River contends waiver of section 54.305 is necessary to enable
    Mescalero to provide reasonably-priced service to previously
    unserved and underserved areas of the reservation.[^23]

# DISCUSSION

6.  Generally, Commission rules may be waived for good cause shown.[^24]
    As noted by the Court of Appeals for the D.C. Circuit, however,
    agency rules are presumed valid.[^25] The Commission may exercise
    its discretion to waive a rule where the particular facts make
    strict compliance inconsistent

    with the public interest.[^26] In addition, the Commission may take
    into account considerations of hardship, equity, or more effective
    implementation of overall policy on an individual basis.[^27] 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. For the reasons set forth
    below, we conclude that a waiver of section 54.305 of the
    Commission's rules is warranted in this instance.

7.  We find that Mescalero has demonstrated that special circumstances
    warrant a deviation from our general rule. First, according to
    Mescalero, the percentage of residences on the Reservation without
    telephone service is 52 percent.[^28] The national average
    penetration level for all households in the United States is 94.6
    percent.[^29] Mescalero explains that telecommunications services
    are only available in the higher density subscriber regions of the
    Reservation, and, as a result, many tribal members have no access to
    basic telecommunications services.[^30] The 950 access lines
    acquired by Mescalero serve only 42 percent of the Reservation's
    population of 4000.[^31] We conclude that application of section
    54.305 in this instance could have the unintended effect of
    preventing the expansion of service in unserved and remote areas of
    the Reservation, and the improvement of service in underserved
    areas.[^32]

8.  Second, Mescalero is a newly-formed, tribally-owned and operated,
    carrier established for the purpose of addressing the severe
    shortage of telecommunication services on the Reservation.[^33] In
    addressing Mescalero's waiver request, we are mindful of our
    obligation to work with Indian Tribes on a government-to-government
    basis consistent with the principles of Tribal self-governance.
    [^34] In doing so, we attempt to ensure that Indian Tribes have
    adequate access to telecommunications services. [^35] By granting
    this waiver, the Mescalero Apache Tribe will gain control over the
    deployment and provision of telecommunications services on the
    Reservation, thereby furthering tribal self-government and
    self-determination. As a tribally-owned and operated carrier,
    Mescalero is particularly suited to understand and address the
    unique needs of the Mescalero Apache community and to set
    communications priorities and goals for the welfare of the
    membership. For example, Mescalero submits that it will extend lines
    to unserved and underserved residents in remote areas on the
    reservation, but will not impose line extension charges on its
    customers.[^36] Such charges may present an obstacle to
    subscribership. As the Commission has observed previously, the
    extension of service to tribal communities is particularly
    challenging because they are among the poorest populations in the
    United States and, therefore, are less able to absorb the costs of
    extending lines to remote and high-cost areas.[^37] We view
    Mescalero's plan not to assess line extension charges as
    demonstrating its acute awareness of the impediments to increased
    telecommunications and deployment on tribal lands and its commitment
    to overcome them.

9.  Third, the high costs faced by Mescalero as a tribally-owned
    start-up company seeking to address the acute shortage of
    telecommunications services on the Reservation are unusually severe.
    Mescalero submits that the existing facilities, which Mescalero
    describes as antiquated and in poor condition, have reached capacity
    and cannot be expanded to serve the currently unserved areas of the
    reservation without first upgrading the system.[^38] Moreover,
    Mescalero states that the terrain of the Reservation is generally
    extremely rugged.[^39] As a result, Mescalero explains, the
    projected cost of providing service and upgrading facilities on the
    Reservation are much higher than the cost of serving other
    subscribers in New Mexico and higher than for most subscribers in
    any other state.[^40] According to Mescalero, its projected study
    area cost per loop of \$2,138 far exceeds the cost per loop of other
    New Mexico carriers, rural local exchange companies (with average
    costs per loop of \$741 and \$561, respectively) and most carriers
    in the United States.[^41] Mescalero indicates that for universal
    service calculation purposes, based on currently available data,
    only six cost carriers in the United States have universal service
    fund study area cost per loop figures higher than Mescalero's
    projected loop cost.[^42] Given the high costs associated with
    upgrading the existing facilities and extending service to unserved
    areas on the Reservation, we find that, without waiver of the
    per-line support limit, and the resulting increase in support,
    Mescalero is unlikely to be able to upgrade the existing facilities
    sufficiently to support its planned build-out to underserved and
    unserved areas.[^43]

10. Finally, we conclude that waiver of section 54.305 in this
    particular instance is in the public interest. Mescalero, a
    wholly-owned and operated tribal carrier, has been established to
    address the severe shortage of telecommunications services on the
    Reservation.[^44] In its petition, Mescalero states that, with a
    waiver of section 54.305, it will improve existing services
    throughout the Reservation without significant increases in basic
    service rates.[^45] More importantly, however, Mescalero commits to
    providing service to all unserved residences in the first two years
    of operation using universal service support to achieve that
    goal.[^46] Ultimately, Mesacalero intends to provide affordable
    services that will rival services offered in any metropolitan
    area.[^47] Waiver of our rule in this instance will increase access
    to telecommunications services on the Reservation consistent with
    our statutory goal of preserving and advancing universal
    service.[^48] Such a waiver is also consistent with our mandate to
    ensure that consumers in all regions of the Nation, including
    low-income consumers and those in rural, insular, and high-cost
    areas, have access to telecommunications and information
    services.[^49]

11. We find that this result is consistent with our obligations under
    the historic federal trust relationship between the federal
    government and federally-recognized Indian tribes to encourage
    tribal sovereignty and self-governance and to ensure a standard of
    livability for members of Indian tribes on tribal lands.[^50] By
    granting this waiver we will enhance Mescalero Apache tribal
    communities' access to telecommunications, including access to
    interexchange services, advanced telecommunications, and information
    services, and thereby increase the tribal communities' access to
    education, commerce, government, and public services. These measures
    will also help bridge the physical distances between those living on
    the Reservation and the emergency, medical, employment, and other
    services that they may need to improve the standard of living on the
    Reservation.[^51] Moreover, this result will be realized under the
    direction of the Mescalero Apache Tribe. Accordingly, based on
    Mescalero's representations and commitments, and in light of the
    advancement of the Mescalero Apache Tribe's self-determination and
    self-governance, we conclude that Mescalero has demonstrated the
    grant of this waiver request serves the public interest.

12. We further note that waiver of section 54.305 in this instance will
    have minimal effect on the high-cost universal service mechanisms.
    We estimate that the additional support received by Mescalero as a
    result of this waiver will result in an annual aggregate shift that
    is less than one percent of any of the high-cost universal service
    mechanisms.[^52] This is consistent with the Commission's prior
    analysis of whether a transfer of exchanges has an adverse impact on
    the universal service support mechanisms.[^53]

13. We emphasize that section 54.305 continues to serve an important
    purpose in the administration of high-cost universal service
    support. As discussed above, the Commission adopted this rule to
    ensure that a selling carrier does not artificially inflate the
    price of an exchange in anticipation of the buyer's receipt of
    increased universal service support as a result of the
    transfer.[^54] The action we take here does not undermine the
    validity of the rule. We grant a waiver in this instance in
    recognition of the unique opportunity it presents to promote
    subscribership and infrastructure deployment on the unserved areas
    of the Mescalero Apache Reservation. We will not, however, routinely
    grant waiver of this rule and those seeking a waiver of section
    54.305 will bear a heavy burden.

# ORDERING CLAUSES

14. Accordingly, IT IS ORDERED, pursuant to sections 4(i), 4(j), and 254
    of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i),
    154(j), and 254, and section 1.3 of the Commission\'s rules, 47
    C.F.R. § 1.3, that the petition for waiver of section 54.305 of the
    Commission's rules, 47 C.F.R. § 54.305 filed by Mescalero Apache
    Telecom, Inc., IS GRANTED, as described herein.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

[^1]: Mescalero Apache Telecom Inc., GTE Southwest Incorporated, and
    Valor Telecommunications of New Mexico, LLC, Joint Petition for
    Waiver of the Definition of "Study Area" Contained in Part 36,
    Appendix-Glossary of the Commission's Rules, Mescalero Apache
    Telecom Inc., Related Waivers of Parts 36, 54, 61 and 69 of the
    Commission\'s Rules (filed June 30, 2000) (Petition). The Common
    Carrier Bureau addresses waiver of Parts 36, 61, and 69 of the
    Commission's rules in a companion order adopted today.

[^2]: For purposes of its petition, Mescalero defines "Reservation" as
    the Mescalero Apache Reservation and the reservation controlled
    lands including the Ski Apache area. *See* Petition at 1. *See also*
    Letter from James A. Casey, Mescalero Apache Telecom, Inc., to
    Magalie Roman Salas, FCC, dated December 4, 2000 (Mescalero e*x
    parte*) at 3.

[^3]: Mescalero *ex parte* at 3.

[^4]: *See* *Federal-State Joint Board on Universal Service; Promoting
    Deployment and 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, FCC 00-208, para. 23, (rel. Jun. 30, 2000)
    (*Twelfth Report and Order*), *stayed in part by* *Federal-State
    Joint Board on Universal Service; Promoting Deployment and
    Subscribership in Unserved and Underserved Areas, Including Tribal
    and Insular Areas*, CC Docket No. 96-45, Order and Further Notice of
    Proposed Rulemaking, FCC 00-322 (rel. Aug. 31, 2000), as corrected
    by Errata, CC Docket No. 96-45, DA 00-2128 (Com Car. Bur. rel Sep.
    20, 2000).

[^5]: 47 C.F.R. § 54.305.

[^6]: On November 2, 1999, the Commission released two orders finalizing
    implementation plans for high-cost reform for non-rural carriers.
    *Federal-State Joint Board on Universal Service*, Ninth Report and
    Order and Eighteenth Order on Reconsideration, CC Docket No. 96-45,
    FCC 99-306 (rel. Nov. 2, 1999); *Federal-State Joint Board on
    Universal Service*; *Forward-Looking Mechanism for High Cost Support
    for Non-Rural LECs*, CC Docket Nos. 96-45, 97-160, Tenth Report and
    Order (rel. Nov. 2, 1999). The new mechanism, which went into effect
    on January 1, 2000, does not apply to rural carriers.

[^7]: *See Federal-State Joint Board on Universal Service*, CC Docket
    No. 96-45*,* Report and Order, 12 FCC Rcd 8776, 8942-43 (1997)
    (*First Report and Order*), as corrected by *Federal-State Joint
    Board on Universal Service*, Errata, CC Docket No. 96-45, FCC 97-157
    (rel. June 4, 1997), *affirmed in part, reversed in part and
    remanded in part sub nom. Texas Office of Public Utility Counsel v.
    FCC*, 183 F.3d 393 (5^th^ Cir. 1999) (affirming *First Report and
    Order* in part and reversing and remanding on unrelated grounds),
    *cert. denied in Celpage, Inc. v. FCC*, 120 S. Ct. 2212 (May 30,
    2000), *pet. for* *cert. withdrawn in GTE Service Corp. v. FCC*, 120
    S. Ct. 2214 (June 5, 2000), *cert. denied in AT&T Corp. v.
    Cincinnati Bell Tel. Co.*, 120 S. Ct. 2237 (June 5, 2000).

[^8]: *See, e.g.,* *id*.

[^9]: *See* 47 C.F.R. § 54.309.

[^10]: In the event that support provided to a non-rural carrier in a
    given state is less under the forward-looking methodology, the
    carrier is eligible for interim hold-harmless support, which is
    equal to the amount of support for which the non-rural carrier would
    have been eligible under the Commission's existing high-cost support
    mechanism. *See* 47 C.F.R. § 54.311. On December 6, 2000, the
    Commission adopted the recommendations of the Federal-State Joint
    Board on Universal Service for phasing down interim hold-harmless
    support for non-rural carriers. Specifically, the Commission adopted
    measures to phase down interim hold-harmless support, excluding LTS,
    through \$1.00 reductions in average monthly, per-line support
    beginning January 1, 2001, and every year thereafter until there is
    no more interim hold-harmless support. *See Federal-State Joint
    Board on Universal Service*, CC Docket No. 96-45, Thirteenth Report
    and Order and Further Notice of Proposed Rulemaking, FCC 00-428
    (rel. December 8, 2000).

[^11]: Rural carriers receive high-cost loop support when their reported
    average cost per loop exceeds the nationwide average loop cost by
    fifteen percent. *See* 47 C.F.R. §§ 36.601-36.631.

[^12]: Incumbent LECs that are designated eligible telecommunications
    carriers and serve study areas with 50,000 or fewer access lines
    receive support for local switching costs. 47 C.F.R. § 54.301. Local
    switching support enables participants to assign a greater
    proportion of local switching costs to the interstate jurisdiction.

[^13]: Carriers that participate in the NECA common line pool are
    eligible to receive LTS. *See* 47 C.F.R. § 54.303. LTS supports
    interstate access rates for carriers that are members of the NECA
    pool, by reducing the amount of interstate-allocated loop costs that
    such carriers must recover through carrier common line charges. *See
    First Report and Order,* 12 FCC Rcd at 9163-9165.

[^14]: As described in our recent order adopting an integrated
    interstate access reform and universal service proposal put forth by
    the members of the Coalition for Affordable Local and Long Distance
    Service (CALLS), beginning July 1, 2000, if a price cap LEC acquires
    exchanges from another price cap LEC, the acquiring carrier will
    become eligible to receive interstate access universal service
    support for the acquired exchanges. *See Access Charge Reform*,
    Sixth Report and Order in CC Docket No. 96-262 and 94-1, Report and
    Order in CC Docket No. 99-249, Eleventh Report and Order in CC
    Docket No. 96-45, FCC 00-103, at para. 225 (rel. May 31, 2000)
    (*Interstate Access Universal Service Order*). Because the
    interstate access universal service support mechanism is capped at
    \$650 million, transactions involving the transfer of support will
    not increase the mechanism's overall size. *See* 47 C.F.R. §
    54.801(a); *see also Interstate Access Universal Service Order* at
    para. 201. If a non-price cap LEC acquires exchanges from a
    price-cap LEC, per-line interstate access universal service support
    will not transfer. Section 54.801 of the Commission's rules states
    that, if "all or a portion of a study area served by a price cap LEC
    is sold to an entity other than a price cap LEC, . . . then the
    support that would otherwise be provided under this subpart, had
    such study area or portion thereof not been sold, will not be
    distributed or collected." 47 C.F.R. § 54.801(b).

[^15]: *See* Petition at 1-2. Mescalero has an agreement to acquire 950
    access lines from GTE. These access lines also are included in a
    transfer of GTE's New Mexico study area to Valor. According to the
    petitioners, GTE's transaction with Valor will close prior to the
    sale of the access lines to Mescalero. *See* Petition at 2. At that
    time, GTE will have no further interest in the access lines.
    Therefore, the access lines will transfer from Valor to Mescalero
    upon Mescalero receiving final state and federal approvals.

[^16]: In addition to waiver of section 54.305, Mescalero, GTE and Valor
    seek waiver of the definition of "study area" contained in the Part
    36 Appendix-Glossary of our rules. The requested waiver would permit
    Valor to alter the boundaries of a New Mexico study area it is
    acquiring from GTE so that it can transfer to Mescalero the 950
    access lines serving the Reservation. *See* Petition at 7-11. The
    waiver also would permit Mescalero to establish a new study area in
    New Mexico for the approximately 950 access lines it intends to
    acquire from Valor. Mescalero also requests waivers of sections
    61.41(c) and 69.3(e)(11) of our rules in order to operate under
    rate-of-return regulation and immediately participate in the NECA
    carrier common line tariff and LTS program following consummation of
    the proposed transaction. *See* Petition at 16-19. Finally,
    Mescalero requests waiver of sections 36.611 and 36.612 of our rules
    in order to immediately begin receiving high-cost loop support for
    the acquired access lines upon commencement of operations. *See*
    Petition at 12-15. These waivers have been granted in a companion
    order adopted today by the Common Carrier Bureau. *See Mescalero
    Apache Telecom, Inc. Waiver of Sections 61.41(c)(2), 69.3(e)(11),
    36.611 and 36.612 of the Commission's Rules*, CC Docket No. 96-45,
    Order, DA 01-129 (rel. January 18, 2001)

[^17]: *See* Petition at 9.

[^18]: *See* Petition at 9.

[^19]: Petition at 11.

[^20]: Petition at 11-12.

[^21]: *See* *Mescalero Apache Telecom, Inc., GTE Southwest
    Incorporated, and Valor Telecommunications of New Mexico, LLC* *Seek
    Waiver of the Definition of "Study Area" in Part 36 and a Waiver of
    Various of the Commission's Rules*, Public Notice, DA 00-1824 (rel.
    Aug. 10, 2000).

[^22]: Salt River Pima-Maricopa Indian Community and Saddleback
    Communications Comments (jointly, Salt River) (September 15, 2000).

[^23]: *See* Salt River Comments at 1.

[^24]: 47 C.F.R. § 1.3.

[^25]: *WAIT Radio v. FCC*, 418 F.2d 1153, 1159 (D.C. Cir. 1969), *cert.
    denied*, 409 U.S. 1027 (1972).

[^26]: *Northeast Cellular Telephone Co. v. FCC*, 897 F.2d 1164, 1166
    (D.C. Cir. 1990).

[^27]: *WAIT Radio*, 418 F.2d at 1159; *Northeast Cellular*, 897 F.2d at
    1166.

[^28]: *See* Mescalero *ex parte* at 3. According to Mescalero, 537 of
    the 1,025 residences on the Reservation are without telephone
    service. *See also* *Application of Mescalero Apache Telecom, Inc.
    for Certificates of Financial and Technical Competency, Operating
    Authority, and Public Convenience and Necessity and for Approval of
    Initial Tariffs*, Utility Case No. 3364, Final Order, at 2 (N.M.
    Pub. Reg. Com. rel. Aug. 15, 2000) in which the New Mexico Public
    Regulation Commission states that the number of Mescalero Apache
    tribal households in Mescalero, New Mexico owning telephones is
    "around 46 percent."

[^29]: *See Monitoring Report*, September 2000, CC Docket No. 98-202
    (rel. Nov. 9, 2000). Section 6, Subscribership and Penetration,
    presents comprehensive data on telephone penetration statistics
    collected by the Bureau of the Census under contract with the
    Federal Communications Commission. Table 6.1 summarizes the
    telephone penetration for the United States, combining information
    on the number of households with the penetration levels. Due to the
    fact that there can be multiple households per residence, a measure
    of subscribership in terms of residences will be equal to or less
    than a measure based on households.

[^30]: *See* Petition at 6.

[^31]: Mescalero states that 569 of these lines are residential, noting
    that 80 residences have multiple lines. Mescalero *ex parte* at 3.
    The balance of these lines are broken down in the following manner:
    356 business and/or tribal government and 26 payphone. *Id*.

[^32]: In the *Twelfth Report and Order*, we noted that only 76.7
    percent of rural households earning less than \$5,000 have a
    telephone, and only 47 percent of Indian tribal households on
    reservations and other tribal lands have a telephone in comparison
    to 94 percent of all households in the United States. *See Twelfth
    Report and Order* at para. 26 (citing *Housing of American Indians
    on Reservations -- Equipment and Fuels*, Statistical Brief, Bureau
    of the Census, SB/95, April 1995 at 2 (based on 1990 Census data)).
    On the basis of these observations, we concluded that the extent to
    which telephone penetration levels fall below the national average
    underscored the need for immediate action to promote the deployment
    of telecommunications facilities in tribal areas and to provide the
    support necessary to increase subscribership in these areas. Toward
    that end, we adopted measures to promote telecommunications
    deployment and subscribership for the benefit of those living on
    federally-recognized American Indian and Alaska native tribal lands.
    We found the enhancement of tribal communities' access to
    telecommunications services, consistent with our obligations under
    the Act to preserve and advance universal service, and our
    obligations under the historic federal trust relationship between
    the federal government and federally-recognized Indian tribes to
    encourage tribal sovereignty and self-governance. *See Twelfth
    Report and Order* at paras. 23, 26.

[^33]: *See* Mescalero *ex parte* at 3.

[^34]: *See Twelfth Report and Order* at paras. 5, 22-23; S*ee also*
    *Statement of Policy on Establishing a Government-to-Government
    Relationship with Indian Tribes*, Policy Statement, FCC 00-207, at 3
    (released June 23, 2000) (Indian Policy Statement) (citing *U.S. v.
    Mitchell*, 463 U.S. 206 (1983); *Seminole Nation v. United States*,
    316 U.S. 286, 296 (1942) (citing *Cherokee Nation v. State of
    Georgia*, 30 U.S. 1 (1831); *Tulee v. State of Washington*, 315 U.S.
    681 (1942); *United States v. Creek Nation*, 295 U.S. 103 (1935);
    *United States v. Pelican*, 232 U.S. 442 (1914); *United States v.
    Kagama*, 118 U.S. 375 (1886); *Choctaw Nation v. United States*, 119
    U.S. 1 (1886)).

[^35]: Consistent with this principal, we recently developed enhanced
    Lifeline and Link Up programs designed to increase access to
    telecommunications services and subscribership among low-income
    individuals living on American Indian and Alaska Native lands. *See*
    *Twelfth Report and Order* at paras. 13-14.

[^36]: *See* Petition at 6-7.

[^37]: *See Twelfth Report and Order* at para. 27 (citing *We, the First
    Americans*, U.S. Department of Commerce, Economics and Statistics
    Administration, Bureau of the Census, WE-5 (Sept. 1993), at 10
    (indicating per capita income in 1989 of approximately \$4,478 for
    American Indians residing on all reservations and trust lands);
    *Assessment of Technology Infrastructure in Native Communities*,
    Final Report, Prepared for the U.S. Department of Commerce, Economic
    Development Administration by the College of Engineering, New Mexico
    State University, June 1999 (*NMSU Report*), at 14 (unemployment
    levels for a sample of 48 tribes averaged 42 percent as compared to
    the national unemployment figure of 4.5 percent)); *Id*. at para.
    60.

[^38]: *See* Mescalero *ex parte* at 3; Petition at 6.

[^39]: *See* Mescalero *ex parte* at 4.

[^40]: *See* Mescalero *ex parte* at 3-4.

[^41]: *See* Mescalero *ex parte* at 3.

[^42]: *See* Mescalero *ex parte* at 3.

[^43]: *See* Mescalero *ex parte* at 4.

[^44]: *See* Mescalero *ex parte* at 3.

[^45]: *See* Petition at 6.

[^46]: *See* Mescalero *ex parte* at 3-4. Specifically, Mescalero
    commits to provide service to 248 unserved residences in the
    communities of Pena, Snow Springs, A&B Hill, Old Ladies Town,
    Summit, White Mountain Subdivision, New Mescalero School, Old Road,
    Gallarito Flats, Mud Canyon, and Pigeon Tank in the first year of
    operation and 289 unserved residences in the Communities of
    Mescalero Village and Highway 70, Cow Camp, White Tail, Silver
    Lakes, and Three Rivers in the second year of operations.

[^47]: Petition at 6.

[^48]: 47 U.S.C. § 254(b).

[^49]: *Id*.

[^50]: *See Twelfth Report and Order* at paras. 22-23.

[^51]: *See e.g.,Twelfth Report and Order* at para. 23 (citing, e.g.,
    *Washington v. Washington State Commercial Passenger Fishing Vessel
    Association, et al.*, 443 U.S. 658 (1979) (holding that the federal
    government's unique relationship with Indian tribes may create a
    federal duty to ensure that federal regulation of tribal lands
    assures "Indians with . . . a moderate living")).

[^52]: For example, Mescalero projects that it will receive \$1,512,303
    in uncapped high-cost loop support for calendar year 2001 if section
    54.305 is waived. *See* Petition at Exhibit B, Schedule 3. This is
    approximately two-tenths of one percent of the high-cost loop
    support fund which is projected to total \$919.587 million for
    calendar year 2001. *See Federal Universal Service Programs Fund
    Size Projections & Contribution Base for First Quarter 2001* (filed
    by USAC Nov. 2, 2000) (*USAC First Quarter 2001 Filing*), at 9.
    Mescalero projects that it will receive \$107,592 in local switching
    support for the calendar year 2001. *See* Petition at Exhibit B,
    Schedule 3. The total size of the local switching support mechanism
    for calendar year 2001 is projected to be \$390.836 million. *See*
    *USAC First Quarter 2001 Filing* at 10. Mescalero projects that it
    will receive \$575,010 in LTS for calendar year 2001. *See*
    Mescalero *ex parte* at Attachment 2. The total amount of LTS for
    calendar year 2001 is projected to be \$484.879 million. *See* *USAC
    First Quarter 2001 Filing* at 12*.*

[^53]: Prior to the adoption of section 54.305, the Commission concluded
    that a transfer of exchanges would be deemed to have an adverse
    effect on universal service support mechanisms if it resulted in an
    annual aggregate shift in high-cost support in an amount equal to or
    greater than one percent of the total high-cost loop fund, unless
    the petitioner demonstrated an extraordinary public interest
    benefit. In evaluating whether a study area change would have an
    adverse impact on the distribution or level of the high-cost loop
    support fund, the Commission determined this \"one-percent\"
    guideline should be applied to study area waivers filed after
    January 5, 1995. *See*, *e.g*., U S WEST Communications, Inc., and
    Eagle Telecommunications, Inc., Petition for Waiver of the
    Definition of \"Study Area\" Contained in Part 36, Appendix-Glossary
    of the Commission\'s Rules, AAD 94-27, Memorandum Opinion and Order,
    10 FCC Rcd 1771, 1772 (1995). Because under section 54.305 carriers
    purchasing high-cost exchanges can only receive the same level of
    per-line support as the selling carrier was receiving for those
    exchanges prior to the sale, there can, by definition, be no adverse
    impact on the universal service fund resulting from the transaction.
    *See* 47 C.F.R. § 54.305.

[^54]: *See supra* Discussion at para. 3.