**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               | ) | CC Docket No. 02-6       |
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| on Universal Service                    | * | WC Docket No. 02-60      |
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| Schools and Libraries Universal Service | * | WC Docket No. 03-109     |
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+-----------------------------------------+---+--------------------------+

**ORDER**

**Adopted: October 14, 2005 Released:** **October 14, 2005**

By the Commission:

Table of Contents

**Paragraph \#**

I. INTRODUCTION AND BACKGROUND 1

II\. ORDER 6

A. Waiver Standard 6

B. Lifeline/Link-Up Support 8

1\. Need for and description of temporary rules 8

2\. Applicable time period 15

3\. Eligibility 17

C. Health Care Support 25

1\. Need for and description of temporary rules 25

2\. Applicable time period 35

D. Schools and Libraries Support 37

1\. Need for and description of temporary rules 37

2\. Eligibility 52

E. High-Cost Support 54

F. Other Issues 57

III\. effective date 62

IV\. congressional review act 64

v\. procedural matters 65

Vi. ORDERING CLAUSES 66

APPENDIX

# INTRODUCTION AND BACKGROUND

1.  In this Order, we take immediate steps to assist the victims of
    Hurricane Katrina by making available approximately \$211 million of
    targeted support from the Universal Service Fund ("USF") for
    reconstruction and remediation relating to the restoration of
    telecommunications services.[^1] We expect that these measures will
    help the victims of Hurricane Katrina recover from the catastrophic
    damage and help the affected communities rebuild. As explained
    below, because of the exigent circumstances, we find good cause to
    adopt temporary rules without notice-and-comment in order to assist
    the Nation's disaster relief effort.

2.  On Monday, August 29, 2005, Hurricane Katrina struck the Gulf Coast
    of the United States, causing significant damage in Alabama,
    Louisiana, and Mississippi.[^2] Hurricane Katrina knocked out more
    than three million customer phone lines in Alabama, Louisiana, and
    Mississippi. The wireline telecommunications network sustained
    enormous damage -- dozens of central offices and countless miles of
    outside plant were damaged or destroyed as a result of the hurricane
    or the subsequent flooding. Local wireless networks also sustained
    considerable damage -- more than a thousand cell sites were knocked
    out of service by the hurricane. At the hurricane's height, more
    than thirty-five Public Safety Answering Points ("PSAPs") were out
    of service; as of September 16, 2005, three parishes in Louisiana
    were still without 911 or enhanced 911 ("E911") service because of
    the hurricane's damage.[^3] Hurricane Katrina destroyed or damaged
    countless houses, office buildings, apartment buildings, schools,
    libraries, and health care facilities. Thousands of people -- many
    evacuated to neighboring states -- remain without telecommunications
    service, unable to contact loved ones, make new living arrangements,
    or find post-hurricane employment. To date, the damage caused by
    Hurricane Katrina has not been fully determined; we understand,
    however, that numerous people lost their lives and property owners
    sustained billions of dollars in damage.[^4]

3.  Hurricane Katrina has also severely limited the ability of health
    care providers in the affected areas to respond effectively to both
    injuries caused by the hurricane and ongoing medical needs of the
    population. Further, many evacuees are being transported to
    surrounding areas or states to receive medical attention.[^5]

4.  We have already taken a number of steps to assist in the disaster
    relief effort, including granting requests for special temporary
    authority ("STA") and waiver of various rules, and obtaining network
    information for damage assessment and analysis.[^6] In this Order,
    we modify the USF program rules to more effectively target support
    to the disaster area and to people affected by Hurricane Katrina.
    Our goal is to work within the parameters of the program rules to
    ensure that victims of Hurricane Katrina continue to have access to
    telecommunications services and advanced telecommunications services
    necessary for recovery and restoration from the catastrophic damage.
    As a result, we adopt the following temporary rules:

-   For the low-income program, we adopt Lifeline rules to provide
    households eligible for individual housing assistance under FEMA
    rules with temporary wireless telecommunications service.[^7] For
    the same households, we also adopt Link-Up rules to help pay the
    costs of reconnecting households to the telecommunications
    network.[^8]

-   For the rural health care program, we adopt rules to allow rural and
    non-rural public and nonprofit health care providers, including
    American Red Cross shelters providing health care services to
    disaster victims, to apply for support for advanced
    telecommunications and information services used for telemedicine
    applications.[^9] These temporary rules will increase the
    effectiveness of the rural health care universal service support
    mechanism by providing additional discounts for advanced
    telecommunications and information services to health care providers
    in the affected areas and in areas where the evacuees have
    relocated.

-   We take action to target support from the schools and libraries
    support mechanism (commonly known as the E-rate program), including
    opening a new application window, to allow schools and libraries in
    the affected area and those serving increased numbers of students
    and patrons to re-submit their requests for E-rate funds for this
    year. In addition, the Commission will assign the E-rate program's
    highest level of priority (*i.e.*, 90 percent) to schools and
    libraries in the Hurricane Katrina disaster area for Funding Year
    2005 and Funding Year 2006 to ensure that these schools are eligible
    for the steepest discounts available for supported services.[^10]

-   Finally, we clarify that, under the rules for receiving high-cost
    support, carriers in the disaster area may use high-cost support
    funds received for high-cost areas in Alabama, Louisiana, and
    Mississippi to assist in reconstructing facilities damaged by the
    hurricane.[^11]

5.  We conclude that these steps are necessary to assist the disaster
    recovery efforts related to Hurricane Katrina. We find these actions
    to be consistent with section 254 of the Act, and the provision of
    universal service generally, for they will help ensure that needed
    telecommunications and information services will continue to be
    available throughout our nation on an affordable basis despite the
    impact of this national tragedy. We take these actions on a limited,
    interim basis because swift and decisive action is necessary to
    ensure that E-rate program participants, communities, health care
    providers, and low-income consumers continue to have access to
    needed telecommunications and information services. These measures
    adopted today should target approximately \$211 million to the
    disaster area and to people affected by Hurricane Katrina. We expect
    that these funds will be generated through a combination of
    reprioritizing existing resources and a potential temporary increase
    in the contribution factor rate over the course of the next year. We
    remain committed to safeguarding the USF from potential waste,
    fraud, and abuse. To ensure that all monies are used for their
    intended purpose of assisting in Hurricane Katrina disaster relief
    and restoration, we adopt certification and documentation
    requirements for these temporary rules. All eligible
    telecommunications carriers, service providers, or beneficiaries
    requesting support under these temporary rules shall be subject to
    audit or investigation by the Commission's Office of Inspector
    General ("OIG"), or other authorized federal or state governmental
    agency and, upon request, must make available any documentation and
    records necessary to verify compliance with these rules. In
    addition, any eligible telecommunications carrier, service provider,
    or beneficiary receiving more than \$1 million under this section
    shall be subject to an automatic audit, investigation, or other
    review by the Commission's OIG (or the Administrator working under
    the oversight of the OIG) to ensure the temporary support is used
    for its intended purposes.[^12]

# ORDER

## Waiver Standard

6.  Generally, the Commission's rules may be waived for good cause
    shown.[^13] Waiver of the Commission's rules is therefore
    appropriate only if special circumstances warrant a deviation from
    the general rule, and such deviation will serve the public
    interest.[^14] As we discuss in more detail below, we find that the
    catastrophic damage to lives and property as a result of Hurricane
    Katrina in the Gulf Coast states and the need for expedited
    restoration of communications presents special circumstances for
    waiving certain universal service rules and that such a waiver is in
    the public interest.

7.  We find that it is appropriate to implement these rules, effective
    upon release of this Order, on a temporary basis to expand funding
    in the affected areas.[^15] We find that the circumstances caused by
    Hurricane Katrina create a special need for the Commission to use
    its discretion to provide universal service support to health care
    providers in the affected areas. This support is necessary to
    address the unique circumstances faced by health care providers,
    schools, libraries, service providers, and low-income consumers in
    the states of Alabama, Louisiana, and Mississippi, and the areas
    where evacuees have relocated. These temporary rules represent our
    recognition of the vital role played by telecommunications and by
    telemedicine in responding to the needs in the communities affected
    by Hurricane Katrina. These temporary rules also further the
    Commission's core responsibility to make available a rapid
    nationwide network for the purpose of responding to national crisis
    situations. For all of these reasons, we find this interim relief to
    be in the public interest.

## Lifeline/Link-Up Support

### Need for and description of temporary rules

8.  In this Order, we adopt temporary modifications to the low-income
    program rules to improve the effectiveness of the low-income support
    mechanism at meeting the needs of victims of Hurricane Katrina.
    Since its inception, Lifeline/Link-Up has provided support for
    telephone service to millions of low-income consumers.[^16]
    Nationally, the telephone penetration rate is 92.4 percent, in large
    part due to the success of the Lifeline/Link-Up program and our
    other universal service programs.[^17] In light of the catastrophic
    damage caused by the worst natural disaster this country has faced,
    thousands of people remain without basic telephone service.[^18]
    Unless addressed, this lack of access to telecommunications will
    lengthen the already-long period of time anticipated for recovery
    from the damage caused by Hurricane Katrina.

9.  As discussed in more detail below, in this section, we take two
    steps to address this significant problem affecting thousands of
    people. First, under the Lifeline program, we provide for temporary
    support under the federal Lifeline program for eligible
    telecommunications carriers making available a wireless service
    consumer offering to victims of Hurricane Katrina. Second, we
    provide support under the federal Link-Up program to hurricane
    victims moving to temporary housing arrangements and to those who
    return to permanent residences in the affected areas. To ensure
    victims of Hurricane Katrina in need of help receive this
    assistance, we base the eligibility criteria for these initiatives
    on those used by FEMA to provide individual disaster housing
    assistance to these people and entities.[^19]

10. In crafting these temporary rules, we are informed by the principles
    of section 254 and our low-income program rules. Section 254(b)
    establishes principles upon which the Commission shall base policies
    for the preservation and advancement of universal service. Among
    other things, these principles state that consumers in all regions
    of the Nation, including low-income consumers, should have access to
    telecommunications and information services that are reasonably
    comparable to those services provided in urban areas and that are
    available at rates that are reasonably comparable to rates charged
    in urban areas. [^20] These principles also recognize that ensuring
    rates are affordable is a national priority. In light of these
    principles, we conclude that modifying the low-income program by
    providing for a wireless service federal Lifeline consumer offering
    and providing support under the federal Link-Up program for
    connection charges, on a temporary basis, is necessary to assist the
    disaster recovery efforts related to Hurricane Katrina.

11. *[Lifeline]{.underline}*. Thousands of people left their homes
    because of the hurricane. Many of these people are in temporary
    shelters or in the process of finding interim housing and may be
    without a permanent home or employment for a period of time.[^21] To
    facilitate the access of evacuees and other displaced persons to
    telecommunications services, any person approved for individual FEMA
    housing assistance or determined by FEMA to be eligible for such
    individual housing assistance relating to the hurricane will be
    eligible for federal Lifeline[^22] support for a free wireless
    handset and a package of at least 300 minutes of use, not to exceed
    \$130 per household, until March 1, 2006.[^23]

12. We find that \$130 per household is a reasonable amount of support
    for the purchase of a handset and at least 300 minutes based on the
    variety of the competitive plans available to consumers throughout
    the United States.[^24] We note that at least one wireless provider
    has indicated this amount of support is sufficient to serve
    low-income consumers.[^25] Moreover, we find that a minimum of 300
    minutes of use per household will facilitate evacuees and those
    remaining in the affected areas to reconnect with loved ones, and
    make living, housing, and work arrangements in the wake of the
    hurricane. In addition, we expect that upon expiration, customers
    will retain the wireless phone and in many instances, be able to
    purchase additional minutes at discounted rates.[^26] Such support
    will help consumers reconnect to the telecommunications network as
    the disaster-struck areas are rebuilt. For purposes of this Order,
    we define "household" as one adult and his/her dependants, living
    together in the same residence. We recognize that many families that
    normally live together as one household have been separated due to
    the hurricane and the evacuation process and may represent more than
    one household for this temporary Lifeline support. Our intent in
    providing this support is to assist hurricane victims, regardless of
    whether they are in an intact household, separated from family
    temporarily, or otherwise. To work within the parameters of the
    existing program, we will order this temporary support available to
    ETCs providing the supported wireless service consumer offering. We
    note that to receive the temporary support, wireless carriers cannot
    require consumers to enter into a long-term contract or require
    service beyond 300 minutes or March 1, 2006, whichever is
    shorter.[^27]

13. We find that these modifications are economically reasonable and
    consistent with the existing framework of the program rules. Under
    the Lifeline program, low-income consumers could receive up to \$10
    per month or \$120 per year.[^28] Under these temporary rules,
    qualifying consumers would receive a \$130 benefit, which would also
    include a handset.[^29] We note that this relief, combined with the
    action we took earlier with regard to waiver of the geographic
    porting requirements,[^30] would allow evacuees to maintain their
    home phone numbers, and promote continuity with regard to personal
    contacts, employment, education, and housing. Under the unique and
    devastating circumstances caused by the hurricane and its aftermath,
    we conclude that provision of this support, including a free
    wireless handset, is consistent with the purpose of section 254
    because it is reasonably necessary to ensure that low income
    consumers have immediate access to telecommunications services. We
    further find that this support fulfills the Commission's broader
    mandate to make wire and radio communication service available to
    all people of the United States, and to promote the safety of life
    and property.[^31] We use our ancillary authority under Title I to
    include a free wireless handset.

14. *[Link-Up]{.underline}*. We also adopt temporary rules for the
    Link-Up program to pay for certain costs to connect victims of the
    hurricane to the network. Specifically, we will provide funding
    under the Link-Up program to eligible telecommunications carriers to
    receive, upon submission of an application and any necessary
    documentation, \$30.00 per qualifying household for commencing
    telecommunications service for a single telecommunications
    connection at any temporary housing arrangements.[^32] To ensure
    this temporary support is targeted to those victims of Hurricane
    Katrina moving to temporary housing arrangements (*e.g.*, trailer
    parks or other temporary housing facilities),[^33] we will make this
    support available from release of this Order through March 1,
    2007.[^34] In addition, we will also permit, under the Link-Up
    program, eligible telecommunications carriers to receive (upon
    submission of an application and any necessary documentation to the
    Administrator) \$30.00 per qualifying household returning to a
    primary residence in the Hurricane Katrina disaster area for
    commencing telecommunications service for a single
    telecommunications connection, including the reconnection of service
    disconnected as a result of Hurricane Katrina. Based on the numbers
    provided by FEMA, we estimate that up to 370,000 households would be
    eligible for this temporary Link-Up support at an estimated total
    cost of approximately \$12 million.

### Applicable time period

15. Hurricane victims need access to telephone service, particularly in
    this emergency situation. Carriers operating in the disaster areas
    in Alabama, Louisiana, and Mississippi, as well as in any state
    where people have been temporarily relocated, *e.g*., Texas, should
    have the opportunity to assist hurricane victims and receive
    appropriate temporary USF support payments. Accordingly, we find
    that due to this emergency situation, good cause exists for adopting
    these temporary Lifeline rules, which will expire on March 1, 2006,
    specifically for free wireless handsets, and at least 300 free
    minutes per household for displaced persons, whether they relocate
    within the three affected states, relocate to another state outside
    of the area, or return home after telephone service has been
    disconnected. We also find that good cause exists to adopt temporary
    Link-Up rules, as discussed above, which will expire on March 1,
    2007.

16. *[Summary of applicable time periods and deadlines]{.underline}*.
    Link-Up support funding is available from the release date of this
    Order until March 1, 2007. Any eligible application for Link-Up
    support postmarked by March 1, 2007 will receive the special Link-Up
    support described above. Wireless Lifeline support is available from
    the release date of this Order until March 1, 2006. Any eligible
    application for support postmarked by March 1, 2006 is eligible for
    the Wireless Lifeline support described above.[^35]

### Eligibility

17. *[Low-income consumers]{.underline}*. As discussed above, any person
    approved for FEMA disaster assistance or determined by FEMA to be
    eligible for individual assistance relating to the hurricane will be
    eligible for temporary federal Lifeline and Link-Up support, on a
    per household basis.[^36] Section 254(e) of the Communications Act
    of 1934, as amended, provides that "only an eligible
    telecommunications carrier designated under section 214(e) shall be
    eligible to receive specific Federal universal service
    support."[^37] We adopt several conditions to ensure that this
    Lifeline and Link-Up temporary support is used solely to assist
    victims of Hurricane Katrina. First, this Lifeline and Link-Up
    support is only available to consumers approved for FEMA disaster
    housing assistance or determined by FEMA to be eligible for housing
    assistance relating to the hurricane. FEMA's rules target housing
    assistance to individuals and households who are harmed by a
    disaster and generally have limited means.[^38] For example, housing
    assistance is generally not available to individuals who have
    adequate rent-free housing accommodations.[^39] To ensure this
    support is targeted to those consumers with the greatest need, we
    are making this temporary support available to those consumers
    determined to be eligible for FEMA disaster housing assistance and
    who do not have any obligation under FEMA rules to repay FEMA for
    the support.[^40] Because this is temporary support intended to
    assist in disaster relief and restoration, we limit this Link-Up
    support to one connection for temporary housing and one reconnection
    (per household) for hurricane victims determined to be eligible for
    individual assistance under FEMA rules (and who have no obligation
    to repay the funds to FEMA) returning to permanent residences in the
    FEMA-designated Hurricane Katrina disaster area.[^41] We limit the
    Lifeline support to a free wireless handset and at least 300 free
    minutes. Second, the temporary Link-Up support for reconnections is
    available only for circumstances where the consumer was disconnected
    from service because of the hurricane or subsequent flooding.[^42]
    Third, we require consumers qualifying for this support to provide
    documentary evidence to the ETC serving them to demonstrate that
    FEMA determined they were eligible for individual disaster housing
    assistance. Proof of FEMA's determination of eligibility for
    individual housing disaster assistance without repayment obligations
    is sufficient. We anticipate that the households that will receive
    support under these temporary rules would have received support
    under the existing low-income program rules if they obtained
    telephone service. We note, however, that our Link-Up rules place
    certain restrictions on the number of times at the same residence a
    low-income consumer may qualify for support. We therefore clarify
    that this temporary Link-Up support will be available both for
    temporary housing arrangements and for eligible hurricane victims
    returning to permanent residences in the Hurricane Katrina disaster
    area.

18. By adopting these temporary modifications to our Lifeline and
    Link-Up programs, we are working within the existing parameters of
    the low-income program. The Commission has long relied on
    participation in means-tested programs, such as participation in the
    food stamps program, to determine eligibility in our low-income
    program. In 2004, the Commission expanded eligibility for the
    low-income program when it acted upon the Federal-State Joint
    Board's recommendation to expand the federal default eligibility
    criteria to include an income-based criterion and additional
    means-tested programs.[^43] Under the existing rules, in cases where
    a state does not mandate state Lifeline support, the Commission's
    rules rely on other means-tested federal assistance programs
    (*e.g*., Temporary Assistance to Needy Families, Federal Public
    Housing Assistance, Low Income Home Energy Assistance Program, and
    the National School Lunch Program's free lunch program) to determine
    eligibility criteria for the low-income program.[^44] The approach
    we adopt here, *i.e*., relying on FEMA determinations that a
    consumer is eligible for certain individual disaster assistance
    program, is consistent with our general approach of using federal
    assistance programs to determine consumer eligibility for our
    low-income program. By relying on FEMA determinations of household
    eligibility for disaster housing assistance, we are targeting this
    support to households struck by Hurricane Katrina, and we are using
    FEMA's determinations as a need-based program for determining
    low-income programs eligibility.

19. *[Eligible Telecommunications Carriers.]{.underline}* There are
    approximately 65 wireless carriers designated as ETCs in the states
    of Alabama, Louisiana, and Mississippi. We recognize that these
    ETCs, as well as wireless carriers currently designated as ETCs in
    other states, may not be sufficient to implement this temporary rule
    in time to help with Hurricane Katrina disaster relief or may not be
    certified in areas where they now need to provide service. In order
    to effectively and efficiently implement these temporary rules, we
    forbear for the purposes of this special relief, until March 1,
    2006, from section 254(e)'s requirement that "only an eligible
    telecommunications carrier designated under section 214(e) shall be
    eligible to receive specific Federal universal service
    support."[^45] We establish the following alternative designation
    process for temporary ETCs to provide the specific Lifeline support
    described in this Order.

20. Section 10 of the Act requires that the Commission forbear from
    applying any regulation or any provision of the Act to
    telecommunications services or telecommunications carriers if the
    Commission determines that the three conditions set forth in section
    10(a) are satisfied.[^46] We find the requirements of section 10(a)
    are met to forbear from the ETC requirement until March 1, 2006,
    because of the limited and temporary nature of the support as well
    as the narrow application of the universal service support to only
    Lifeline customers. Section 10(a)(1) is satisfied because temporary
    forbearance from the ETC requirement will enhance the charges and
    practices of telecommunications carriers as it relates to Lifeline
    customers because it expands the scope of telecommunications
    services available to these consumers.[^47] Without such support,
    many of the affected consumers would be left with limited or no
    access to telecommunications services. In addition, because we
    specifically include a handset and a minimum of 300 minutes of
    wireless service and thus tailor the Lifeline support to the
    affected consumers, we do not believe that the additional safeguards
    afforded by the traditional ETC designation requirement are
    necessary for the protection of consumers.[^48] Thus, forbearance
    also satisfies section 10(a)(2).[^49] Further, under the alternative
    temporary ETC designation process that we establish herein, the
    Commission will review each offering to determine whether it
    complies with our requirements. This review will allow us to ensure
    that affected consumers are provided with affordable access to the
    telecommunications network. Finally, we find our actions here today
    to be most consistent with the public interest and determine that
    the additional safeguards afforded by ETC designation under section
    214 work against the public interest in this limited circumstance.
    Under the normal designation process, carriers would be required to
    submit a detailed application that addresses not only the Lifeline
    assistance but also the other requirements of serving as an ETC. By
    streamlining the process, and expediting our review, we will enable
    carriers to provide access to telecommunications to affected
    consumers as quickly as possible.[^50] Thus, we find that section
    10(a)(1) through (3) are satisfied and temporary and conditional
    forbearance is appropriate.

21. *[Additional Certifications]{.underline}*. Carriers seeking to be
    designated a temporary ETC to offer the special Lifeline support
    described in this Order must submit to the Commission a detailed
    description of the plan, including how many and type of minutes
    offered, the brand and model of the handset(s), the carrier's
    licensed service area, and any limitations or conditions associated
    with the plans.[^51] In addition, consistent with the Commission's
    ETC precedent, the petition must include (1) a certification that
    the petitioner intends to offer Lifeline services to qualifying
    subscribers consistent with this Order; and (2) a description of how
    the petitioner intends to advertise the availability of the Lifeline
    service.[^52] Upon submission, the Commission will conduct an
    expedited review to ensure compliance with our rules. Within ten
    days, the Commission will determine whether the offering complies
    with this Order and whether the carrier will be temporarily
    designated as an ETC for purposes of providing the Lifeline support
    set out in this Order.

22. We acknowledge that some FEMA-eligible subscribers may already
    possess a handset and not need an additional handset. In those
    instances, and at the subscriber's discretion, the subscriber may
    opt against receiving a new handset and opt instead for a
    Lifeline-supported package of greater than 300 minutes and the ETC
    may still receive support not to exceed \$130 for its Lifeline
    package. Further, it is acceptable for a carrier to offer a plan
    that includes a handset and a package of some greater amount of
    minutes (*e.g*., 500, 750, or 1000 minutes or more) for the \$130 in
    support. Additionally, a subscriber may opt for a plan that exceeds
    the \$130 limit for a minimum of 300 minutes of use and a handset,
    but nevertheless use the \$130 towards the higher minutes of use
    plus handset plan. This flexibility to the plan will allow eligible
    customers to purchase packages with more minutes of use, including
    packages that require the subscriber to pay any additional amount
    over the \$130 threshold. Through this temporary change to the
    federal Lifeline/Link-Up support program, it is our intent and
    purpose through this wireless option to give access to affected
    subscribers with no out-of-pocket costs. The eligible customer,
    however, may choose otherwise by, for example, forgoing the handset
    in exchange for more minutes of use.

23. We balance the need for quick and decisive action with our
    overarching goals of protecting the program from waste, fraud, and
    abuse. For that reason, we require applicants for the temporary
    Lifeline support pursuant to this Order to certify that they were
    residents of counties that are designated by FEMA as eligible for
    individual assistance, that they are the head of their household,
    and that they are only receiving one Lifeline special support
    package. Applicants seeking Link-Up support must certify that they
    were residents of counties that are designated by FEMA as eligible
    for individual assistance.[^53] We require ETCs receiving this
    temporary support to maintain all necessary documentation to verify
    that the support was used for the intended purpose of assisting
    victims of Hurricane Katrina. We also subject all ETCs receiving
    this temporary support to potential audit, and we require all
    carriers receiving \$1 million or more of this support to undergo an
    audit or other investigatory review by the Commission's OIG (or the
    Administrator working under the oversight of the OIG) to verify the
    accuracy of all data submitted and that the support was used for
    intended purposes and to validate that the eligible
    telecommunications carrier has not obtained double-recovery from a
    single household.[^54]

24. We find this action necessary to assist in the Hurricane Katrina
    disaster relief effort. Offering temporary support for this wireless
    service consumer offering will not only assist in the recovery from
    the economic damages caused by the hurricane, but it will promote
    public safety by ensuring that disaster victims have ready access to
    E911 capabilities in the event of emergency. We stress that this
    temporary designation to operate as an ETC solely for this temporary
    support mechanism does not grant or otherwise deem the carrier an
    ETC for any other USF support mechanism. Nor does this temporary
    designation prejudge or suggest that any application currently
    pending or to be filed in the future with the state commissions or
    the Commission results in designation as an ETC.

## Health Care Support

### Need for and description of temporary rules

25. In light of the compelling and unique circumstances caused by
    Hurricane Katrina, we find that it is necessary to adopt temporary
    rules, pursuant to section 254(h)(2)(A), to provide public and
    nonprofit health care providers -- in both non-rural and rural
    areas[^55] -- in the affected areas and in areas where evacuees have
    relocated, as detailed below,[^56] with a 50 percent discount off
    the monthly cost of advanced telecommunications and information
    services necessary for the provision of health care services to
    victims of Hurricane Katrina. These temporary rules discussed below
    apply to health care providers in the federally declared Hurricane
    Katrina disaster areas in the states of Alabama, Louisiana, and
    Mississippi and in areas where evacuees have relocated as detailed
    below. Specifically, all rural and non-rural nonprofit and public
    health care providers, as defined in section 54.601(a)(2), located
    within the states of Alabama, Louisiana, and Mississippi are
    eligible for this additional support.[^57] We establish different
    geographic eligibility criteria for the Health Care initiative
    because of the ability to use distance medicine applications to
    treat Hurricane Katrina victims. Furthermore, because the residents
    of the most devastated areas will likely have to relocate for an
    extended period of time, we expand eligibility for the purposes of
    these temporary rules to the rural and non-rural nonprofit and
    public health care providers located in areas that are likely to
    receive most of the citizens evacuated from the hardest hit areas.
    Initial reports show these areas to include all counties in Texas
    and Arkansas that are contiguous with Louisiana and
    Mississippi;[^58] the counties of Escambia, Santa Rosa, Okaloosa,
    Walton, and Bay in Florida; the counties of Harris, Dallas, Tarrant
    and Bexar in Texas; the county of Pulaski in Arkansas; and the
    county of Shelby in Tennessee.[^59] In addition, we find that rural
    and non-rural health care providers outside of these areas may be
    eligible for support to the extent they serve a substantial number
    of the evacuees when compared to their usual number of patients.
    Health care providers that believe they are eligible under this
    standard should file a request with the Commission.[^60] We note
    that this temporary support does not extend to private or for-profit
    health care providers.

26. American Red Cross and other shelters are providing food, water,
    shelter and physical and mental health services to evacuees.[^61]
    Tens of thousands of people displaced from their homes have taken
    refuge in shelters in several states.[^62] Accordingly, for the
    purposes of these temporary rules, we find it in the public interest
    that American Red Cross or other shelters that also offer medical
    services are eligible for funds as community health centers or
    community mental health centers to the extent they serve a
    significant number of disaster victims using advanced
    telecommunications and information services for telemedicine
    applications.[^63]

27. We also clarify that temporary or mobile health care providers are
    eligible for support under the 50 percent discount rule we adopt in
    this Order.[^64] As we noted in the *Rural Health Care Second Report
    and Order*, mobile health care providers can provide essential
    health care services to underserved populations in remote
    locations.[^65] Given the extensive damage to many health care
    facilities due to Hurricane Katrina, we envision that the recovery
    and rebuilding effort will require the use of temporary mobile
    health facilities due to the lack of permanent health care
    facilities.[^66] Furthermore, many evacuees may be housed for some
    time in temporary shelters, and health care might be brought to
    these people via mobile health care providers.[^67] The receipt of
    universal service funding will better enable mobile health care
    providers to rapidly diagnose and treat patients in the affected
    areas. We find this rule to be in the public interest because it
    will provide maximum flexibility to mobile health care providers to
    use the most-effective technology to provide service to hurricane
    victims, whether it is satellite, wireline, or wireless. In the
    *Rural Health Care Second Report and Order*, we established a
    methodology for calculating support that established discounts for
    rural mobile health care providers at the difference between the
    rate for satellite service and the rate for an urban wireline
    service with a similar bandwidth.[^68] We find that such a
    calculation is not necessary here because, under the rules we adopt
    today, mobile health care providers will receive 50 percent discount
    off the cost of advanced telecommunications and information
    services.

28. In section 254 of the Telecommunications Act of 1996,[^69] Congress
    sought to provide rural health care providers "an affordable rate
    for the services necessary for the purposes of telemedicine and
    instruction relating to such services."[^70] Specifically, Congress
    directed telecommunications carriers "\[to\] provide
    telecommunications services which are necessary for the provision of
    health care services in a State, including instruction relating to
    such services, to any public or nonprofit health care provider that
    serves persons who reside in rural areas in that State at rates that
    are reasonably comparable to rates charged for similar services in
    urban areas in that State."[^71] Congress also provided the
    Commission with authority to enhance access to advanced
    telecommunications and information services for health care
    providers.[^72]

29. The Commission implemented this statutory directive by adopting the
    rural health care support mechanism in the *1997 Universal Service
    Order*.[^73] In the *Rural Health Care Report and Order*, the
    Commission provided a 25 percent discount off the cost of monthly
    Internet access for eligible rural health care providers under
    section 254(h)(2)(A).[^74] Subsequently, on December 17, 2004, the
    Commission released a *Rural Health Care Second Report and Order*
    that, among other actions, changed the definition of "rural" for the
    purposes of the rural health care support mechanism.[^75] The
    Commission also expanded funding for mobile rural health care
    providers by subsidizing the difference between the rate for the
    satellite service and the rate for an urban wireline service with a
    similar bandwidth.[^76] In addition, on reconsideration, the
    Commission revised its rules to permit rural health care providers
    in states that are "entirely rural" to receive a 50 percent discount
    for advanced telecommunications and information services under
    section 254(h)(2)(A).[^77]

30. As the Commission has recognized in the past, access to advanced
    telecommunications services and information services presents the
    most efficient, cost-effective way to provide many telemedicine
    services.[^78] Specifically, telemedicine programs enable patients
    to receive health care services across distances that might
    otherwise be unaffordable, or physically impracticable or impossible
    to cross. For example, health care providers can use advanced
    telecommunications services to transmit x-rays and other medical
    information in real-time to doctors located in other areas for
    diagnosis and recommendations. Thus, patients benefit from access to
    timely health care services while they are spared the expense of
    lost wages and long-distance travel. In this instance, residents of
    the affected areas might be unable to travel for health care
    services because, for example, vehicles were lost in the flooding or
    gasoline is in short supply. Additionally, mobile health care
    providers can deliver cutting-edge technology and specialty care to
    citizens who are still living in areas that were damaged by the
    hurricane.[^79] These mobile clinics literally can mean the
    difference between life and death for many people who are unable to
    travel to see a physician. Furthermore, universal service support
    for advanced telecommunications and information services will enable
    health care providers in the affected areas to utilize their limited
    resources to provide additional care for hurricane victims and other
    patients.

31. We find that it is appropriate to adopt these rules on a temporary
    basis to expand funding to health care providers in the affected
    areas under section 254(h)(2)(A). As the Commission has determined
    in the past, we have the authority to provide funding for the
    provision of advanced telecommunications and information services
    under section 254(h)(2)(A).[^80] Section 254(h)(2)(A) allows the
    Commission to establish competitively neutral rules to enhance
    access to advanced telecommunications and information services for
    health care providers.[^81] Furthermore, section 254(h)(2)(A) gives
    the Commission broad discretionary authority to fulfill this
    statutory mandate. In prior orders, we have established rules under
    section 254(h)(2)(A) that further the Commission's mission of
    funding telecommunications and information services in order to
    promote telemedicine.[^82] By adopting these temporary rules,
    therefore, we are working within the existing parameters of the
    rural health care program. We find that the circumstances caused by
    Hurricane Katrina create a special need for the Commission to use
    its discretion to provide universal service support to health care
    providers in the affected areas. [^83]

32. Section 254(h)(2)(A) allows the Commission to establish
    competitively neutral rules to enhance access to advanced
    telecommunications and information services to the extent those
    rules are technically feasible and economically reasonable.[^84] We
    find that providing universal service support as discussed herein is
    both technically feasible and economically reasonable. Access to
    these services is technically feasible because eligible health care
    facilities either are already being provided or were being provided
    advanced telecommunications and information services prior to the
    hurricane. In addition, the Commission's actions are economically
    feasible, in light of the circumstances. First, the temporary
    support is for a limited amount of services used for the express
    purpose of treating disaster victims, *i.e*., advanced
    telecommunications and information services used in telemedicine
    applications. Second, we estimate that we would disburse
    approximately \$28 million in support under this temporary
    rule.[^85] The Commission has established a cap of \$400 million for
    the rural health care support mechanism.[^86] Given that currently
    the program is disbursing about \$30 million a year, we do not
    envision that the additional funding provided for in this Order will
    exceed the Commission's cap.[^87] We further note that we are not
    funding all telecommunications services, as provided for under
    254(h)(1)(A), but only advanced telecommunications and information
    services that are used directly to provide telemedicine services to
    treat patients.[^88] Third, based on past experience, we believe a
    flat 50 percent discount is easy to administer and consistent with
    section 254(h)(5), which requires a specific, sufficient and
    predictable mechanism.[^89] Fourth, the 50 percent discount limits
    the amount of support per provider, provides incentives for health
    care providers to make prudent economic decisions concerning their
    telemedicine needs and will deter wasteful expenditures.[^90]
    Finally, we find that a 50 percent discount is slightly less than
    the average discount rural health care providers current receive for
    telecommunications services under section 254(h)(1)(A).[^91]

33. We find that both rural and non-rural health care providers in
    affected areas should be eligible for this temporary support.
    Section 254(h)(1)(A) limits support to health care providers in
    "rural" areas.[^92] In allowing the Commission discretion to
    establish competitively neutral rules to enhance access to advanced
    telecommunications and information services under section
    254(h)(2)(A), however, Congress did not specifically limit such
    access to rural health care providers.[^93] Thus, we find that
    providing health care universal service support to public or
    nonprofit health care providers that are not necessarily serving
    "rural areas," as defined in the 2004 *Rural Health Care Second
    Report and Order*, is consistent with federal court precedent and
    the mechanism's goal to provide health care providers with access to
    modern telecommunications for medical and health maintenance
    purposes.[^94] These areas have experienced the destruction of the
    telecommunications network infrastructure and the obliteration of
    many buildings, including homes, medical, and other professional
    facilities, as well as the displacement of a significant percentage
    of the population. Therefore, we find that, in light of these
    extraordinary circumstances, both rural and non-rural health care
    providers are eligible to receive rural health care universal
    service support to serve the medical needs in the affected areas.
    Consistent with the Commission's principles of competitive
    neutrality, we find that eligible health care providers may receive
    discounts for any advanced telecommunications and information
    service, regardless of the platform as long as these services are
    used to treat disaster victims with telemedicine applications.[^95]

34. In administering the universal service fund, we must ensure that the
    goals of section 254 are met while preventing waste, fraud, and
    abuse.[^96] For this reason, health care providers seeking support
    pursuant to this Order shall certify that they meet the eligibility
    requirements outlined herein.[^97] We also note that our rules
    require applicants to select the most cost-effective, commercially
    available service.[^98] We will carefully monitor the use of funds
    disbursed to eligible entities under these new rules to ensure that
    all support is utilized in accordance with Commission rules, and to
    ensure that service providers do not charge unjust or unreasonable
    rates or seek to lock health care providers into long-term contracts
    beyond Funding Year 2005. We reserve the right to recover any monies
    not used for their intended purposes or, upon review, we determine
    were used wastefully.

### Applicable time period

35. *[Additional Certifications]{.underline}*. To qualify for this
    support, a health care provider should submit documentation to
    demonstrate that it used advanced telecommunications and information
    services for telemedicine applications and to treat victims of
    Hurricane Katrina. The health care provider should also certify that
    it used the services for the intended purposes. Such health care
    providers should comply with the program's document retention
    requirements and should maintain sufficient documentation to
    demonstrate the reasonableness of costs in light of the exigent
    circumstances. As noted above, all parties are subject to potential
    audit by the Commission's OIG (or the Administrator working under
    the OIG's oversight), and any party receiving more than \$1 million
    in support will be automatically audited.

36. As noted below, these temporary rules are effective immediately upon
    release of this Order and continue through the end of Funding Year
    2005.[^99] Temporary health care support funding is available from
    August 29, 2005 until June 30, 2006, which is the end of Funding
    Year 2005. Further, all health care providers eligible under these
    new rules are permitted to amend their Funding Year 2005
    applications to apply for additional support, no later than 60 days
    after the release of this Order.[^100] Applicants seeking support to
    obtain advanced telecommunications and information services for
    telemedicine applications used to treat victims of Hurricane Katrina
    should submit their FCC Form 465 postmarked no later than 60 days
    after release of this Order.[^101] Applicants should comply with all
    program rules and requirements, including the competitive bidding
    requirements.

## Schools and Libraries Support

### Need for and description of temporary rules

37. In this Order, we adopt temporary modifications to the schools and
    libraries universal service support mechanism to meet the needs of
    schools and libraries damaged by Hurricane Katrina. Approximately
    600 schools and libraries in Alabama, Louisiana, and Mississippi may
    have been affected by the hurricane and subsequent flooding.[^102]
    Many schools and libraries in other states, although not damaged by
    the hurricane, have an influx of hurricane evacuee students (and
    library patrons).[^103] We are, on our own motion, waiving certain
    rules relating to the schools and libraries universal service
    support mechanism (commonly referred to as the E-rate program) on an
    emergency interim basis, as described below. Waiver of these rules
    will preserve and advance universal service by allowing schools and
    libraries in affected areas to restore quickly their ability to
    provide students and communities with needed telecommunications and
    information services.[^104]

38. Specifically, we (1) re-open the Funding Year 2005 filing window for
    schools and libraries, and consortia of schools and libraries, that
    were directly or indirectly affected by Hurricane Katrina;[^105] (2)
    treat all schools and libraries directly affected by Hurricane
    Katrina at the highest level of priority for Priority Two services
    (*i.e.*, 90 percent) for Funding Years 2005 and 2006;[^106] (3)
    allow affected parties in eligible counties/parishes in Alabama,
    Louisiana, and Mississippi to "restart the clock" for the purposes
    of calculating compliance with the "two-in-five" rule; (4) allow
    program participants in affected areas to substitute services or
    products in one broad category for another; and (5) allow schools
    and libraries serving displaced students and citizens to amend their
    Funding Year 2005 applications to account for the unexpected
    increase in population by filing a special supplementary FCC Form
    471 request for additional funding.[^107]

39. *[Additional Certifications.]{.underline}* In taking these actions,
    we balance the need for quick and decisive action to restore the
    provision of telecommunications and information services to schools
    and libraries with our overarching need to protect the program
    against waste, fraud, and abuse. We emphasize, however, that we will
    continue to be vigilant to ensure program integrity and to detect
    and deter waste, fraud, and abuse, and pursue enforcement action
    when appropriate.[^108] Our intent is not to allow double recovery
    for damages related to telecommunications and information services
    equipment funded under the schools and libraries universal service
    support mechanism. For this reason, schools and libraries affected
    by Hurricane Katrina requesting funding for the restoration of their
    telecommunications and information systems pursuant to the direction
    contained in this Order shall certify that the school or library
    incurred substantial damage as a result of Hurricane Katrina and
    that the services and products sought in their applications will be
    solely used to restore the network to the functional equivalent of
    the pre-Katrina degree of functionality (*i.e.*, prior to August
    29, 2005) and that other resources (*e.g*., insurance or public
    assistance monies provided by FEMA) are not available for
    restoration.[^109] In addition, schools and libraries affected by
    Hurricane Katrina shall certify that any alternative funding
    (*e.g.,* insurance payments, FEMA support, community resources) in
    excess of the cost for products or services requested on their
    applications will be returned to the federal Universal Service Fund.
    To the extent that schools and libraries are handling increased
    populations of evacuees, schools and libraries shall certify
    that: (1) there are more than a *de minimis* number of Hurricane
    Katrina victims; and (2) the entity experienced an associated
    increase in demand for supported services.

40. At the outset, we note that, in a number of instances, our rules
    explicitly provide participants in the schools and libraries program
    with specific requirements for requesting extensions of deadlines or
    waivers of certain Commission rules due to the occurrence of
    unforeseen events such as Hurricane Katrina.[^110] Thus, we
    emphasize that the actions taken here do not represent the entirety
    of the relief that may be available to E-rate program participants
    in affected areas. We are committed to addressing all requests for
    hurricane assistance in an expeditious manner.

41. *[Funding Year 2005 filing window.]{.underline}* Under the
    Commission's rules, universal service funds are available to fund
    discounts for eligible schools and libraries and consortia of such
    eligible entities on a first-come, first-served basis.[^111] Each
    year, the Administrator implements an initial filing period that
    treats all schools and libraries filing within that period as if
    their applications were simultaneously received.[^112] The initial
    filing period begins on the date that the Administrator begins to
    receive applications for support, and concludes on a date to be
    determined by the Administrator.[^113]

42. In light of the extensive property damage, including damage to the
    telecommunications and information systems employed by participants
    in the schools and libraries universal service support mechanism,
    caused by Hurricane Katrina in the Gulf Coast states, we waive
    section 54.507(c) of our rules and re-open the Funding Year 2005
    filing window for schools and libraries, and consortia of schools
    and libraries, that were directly or indirectly affected by
    Hurricane Katrina to the extent set forth in this Order.[^114] The
    filing window shall be open for sixty days following the date of
    release of this Order. By waiving section 54.507(c) of our rules,
    and reopening the filing window for Funding year 2005 for schools
    and libraries affected directly by Hurricane Katrina, affected
    program participants in Alabama, Louisiana, and Mississippi can
    begin repairing and restoring needed telecommunications and
    information services quickly and rapidly. Moreover, as described
    more fully below, we recognize that certain schools and libraries
    may require additional funding to support the needs of students and
    citizens displaced by Hurricane Katrina although they have not been
    directly affected by these events. Accordingly, for the reasons
    stated above, we find that due to this natural disaster, good cause
    exists for waiving section 54.507(c) for these schools and libraries
    and that such waiver is in the public interest.[^115]

43. *[Priority level for schools and libraries in the Hurricane Katrina
    disaster area.]{.underline}* Under the Commission's rules, eligible
    schools and libraries may receive discounts ranging from 20 percent
    to 90 percent of the pre-discount price of eligible services, based
    on indicators of need.[^116] Schools and libraries in areas with
    higher percentages of students eligible for free or reduced-price
    lunch through the National School Lunch Program (or a federally
    approved alternative mechanism) qualify for higher discounts for
    eligible services than applicants with low levels of eligibility for
    such programs. Schools and libraries located in rural areas also
    generally receive greater discounts.[^117] The Commission's priority
    rules provide that requests for telecommunications services, voice
    mail and Internet access for all discount categories shall receive
    first priority for the available funding (Priority One services).
    The remaining funds are allocated to requests for support for
    internal connections (Priority Two services), beginning with the
    most economically disadvantaged schools and libraries, as determined
    by the schools and libraries discount matrix. Currently, the most
    disadvantaged schools and libraries are eligible for a 90 percent
    discount on eligible services, and thus must pay only 10 percent of
    the cost of the service. To the extent funds remain after discounts
    are awarded to entities eligible for a 90 percent discount, the
    rules provide that the Administrator shall continue to allocate
    funds for discounts to applicants at each descending single discount
    percentage. The Commission's rules also provide that if sufficient
    funds do not exist to grant all requests within a single discount
    percentage, the Administrator shall allocate the remaining support
    on a *pro rata* basis over that single discount percentage
    level.[^118]

44. In light of the extensive property damage, including damage to the
    telecommunications and information systems employed by participants
    in the schools and libraries universal service support mechanism,
    caused by Hurricane Katrina in the Gulf Coast states, we find good
    cause to waive section 54.507 of our rules and treat all schools and
    libraries directly affected by Hurricane Katrina[^119] at the
    highest level of priority for Priority Two services (*i.e.*, 90
    percent) for Funding Years 2005 and 2006.[^120] We recognize that
    program participants in Alabama, Louisiana, and Mississippi most
    affected by Hurricane Katrina may have need for an immediate
    indication of whether they are likely to receive funds for Priority
    Two services. By waiving section 54.507 of our rules, and treating
    all affected schools and libraries at the highest level of priority,
    affected program participants in Alabama, Louisiana, and Mississippi
    can fully anticipate the amount of funding they will receive from
    the universal service fund, and begin the task of developing a
    cogent, feasible, and sustainable plan to resume the provision of
    needed telecommunications and information services. We anticipate
    that treating all affected schools and libraries at the highest
    priority level could result in the disbursement of approximately
    \$96 million in E-rate funds for the approximately 600 schools and
    libraries in Alabama, Louisiana, and Mississippi affected by
    Hurricane Katrina.[^121] We note that these funds have already been
    collected by the Universal Service Fund, and would not have an
    impact on the long-term viability of the universal service program.
    Accordingly, we find that good cause exists for waiving section
    54.507 for affected entities and that such waiver is in the public
    interest.

45. We expect that the neediest schools and libraries will receive
    requested funding for Funding Year 2005 for both Priority One and
    Priority Two services. We note that, after applications from the
    disaster-struck schools and libraries are submitted and reviewed, we
    may be able to authorize funding nation-wide requests for any
    deferred requests for Priority Two internal connections service for
    Funding Year 2005. The Commission's rules require the Administrator
    to report the amount of unused funds available from prior funding
    years on a quarterly basis.[^122] Based on our past experience,
    significant funds are identified as available for use in future
    funding years.[^123] In fact, the E-rate Coordinators from Alabama,
    Louisiana, and Mississippi estimate that unused funds from prior
    funding years will be available to carry over for Funding Year 2005
    and could be used to fund Hurricane Katrina restoration.[^124]
    Because we are re-opening the funding year 2005 filing window, such
    funds previously identified as unused by the Administrator may be
    available to provide support to the disaster-struck schools and
    libraries. We recognize that demand for services from the schools
    and libraries struck by Hurricane Katrina may vary after these
    entities complete their internal reviews and prepare the necessary
    program applications. We will closely monitor this situation and, to
    the extent unused funds from prior funding years are available, we
    anticipate that these funds will be used and that Priority Two
    funding may be available for additional applicants.

46. *[Prohibition on free services.]{.underline}* Finally, we note that
    the Commission requires that an entity must pay the entire
    undiscounted portion of the cost of any services it receives through
    the schools and libraries program.[^125] Moreover, our rules
    prohibit the provision of free services to an eligible entity by a
    service provider that is also providing discounted services to the
    entity.[^126] The Commission has previously found that, for the
    purpose of this program, the provision of unrelated free services by
    a service provider to an eligible entity constitutes a rebate of the
    undiscounted portion of the costs of services, in violation of our
    rules.[^127] We clarify that to the extent schools and libraries
    receive FEMA assistance for projects, such assistance may be applied
    to the undiscounted portion of the bill. As part of our efforts to
    respond to the damage caused by Hurricane Katrina, we will continue
    to examine whether waiver of this rule is warranted to aid affected
    schools and libraries to restore the provision of service to
    students and communities.

47. *[Frequency of discounts for internal connections
    services.]{.underline}* Under the Commission's rules, eligible
    entities may receive commitments for discounts on Priority Two
    services (internal connections) no more than twice every five
    funding years (the "two-in-five" rule).[^128] For the purpose of
    determining eligibility, the five-year period may begin in any
    funding year in which the school or library receives discounted
    internal connections services other than basic maintenance
    services.[^129]

48. We find that due to the damage to information and telecommunications
    systems caused by Hurricane Katrina in the Gulf Coast states, many
    participants in the schools and libraries universal service support
    mechanism are likely to need to replace their internal connections
    services, and thus will seek commitments for discounts on Priority
    Two services despite already receiving such commitments in the
    recent past. For these entities, we waive our rule pertaining to the
    frequency of discounts for internal connections services to allow
    affected parties in Alabama, Louisiana, and Mississippi to "restart
    the clock" for the purposes of calculating compliance with the
    "two-in-five" rule. For such participants, Funding Year 2006 will
    thus serve as the first year of the five-year period for determining
    eligibility for funding for these services. We recognize that
    program participants in Alabama, Louisiana, and Mississippi affected
    by Hurricane Katrina may need funding to replace damaged or
    destroyed internal connections services, and should not be denied
    support payments simply due to the timing and frequency of previous
    requests for funding for internal connections. We limit this relief
    to schools and libraries in the Hurricane Katrina disaster area that
    incurred substantial damage as a result of the hurricane.
    Accordingly, for the reasons stated above, we find that due to this
    natural disaster, good cause exists for waiving section 54.506(c)
    for affected entities and that such waiver is in the public
    interest.[^130] To qualify for this waiver, parties should submit a
    request describing the damage incurred to the equipment that needs
    to be replaced.

49. *[Service substitution requests.]{.underline}* Section 54.504(f) of
    the Commission's rules allows the Administrator to grant a request
    by an applicant to substitute a service or product for another where
    the service or product has the same functionality; the substitution
    does not violate any contract provisions or state or local
    procurement laws; the substitution does not result in an increase in
    the percentage of ineligible services or functions; and the
    applicant certifies that the requested change is within the scope of
    the controlling FCC Form 470.[^131] On our own motion, we waive the
    requirement that, for purposes of section 54.504(f), the substituted
    service or product must have the same functionality as the service
    it is replacing.[^132] Thus, program participants in affected areas
    may substitute services in one broad category (*e.g*.,
    telecommunications service, Internet access, and internal
    connections) for those in another. Along these same lines, we will
    permit the use of approved funds for any facilities or services that
    need to be replaced due to the natural disaster to the extent that
    they were initially funded under the program. We recognize that
    program participants in Alabama, Louisiana, and Mississippi affected
    by Hurricane Katrina may seek needed funding to replace damaged or
    destroyed services and equipment, and that it is in the public
    interest to allow the replacement of such services and equipment
    with funds previously granted for other services and equipment.
    Accordingly, we find that due to this natural disaster, good cause
    exists for waiving section 54.504(f) for affected entities and that
    such waiver is in the public interest. For any eligible school,
    library or consortium in affected areas, such service substitutions
    will be limited to funds received from applications from Funding
    Year 2005.

50. *[Increased funding for schools indirectly affected by Hurricane
    Katrina.]{.underline}* Certain schools, although not directly
    affected by Hurricane Katrina, may have been indirectly impacted
    nonetheless due to the influx of displaced students into their
    district. For example, additional students may make use of school
    services and resources in a manner originally unanticipated when the
    schools' technology plans were developed and funding requested,
    thereby taxing information and telecommunication services beyond
    their usual capability. In some instances, the addition of students
    displaced due to Hurricane Katrina may cause a school to become
    eligible for a higher discount level due to an increase in the
    percentage of the student body eligible for the National School
    Lunch Program. To provide an opportunity for schools to handle the
    unforeseen consequences of Hurricane Katrina and the influx of new
    students and patrons, [^133] we will allow schools and libraries
    serving displaced students and citizens to amend their Funding Year
    2005 applications to account for the unexpected increase in
    population by filing a special supplementary FCC Form 471 request
    for additional funding. In accordance with our direction here, such
    schools may amend their original funding requests.[^134] We instruct
    the Schools and Libraries Division ("SLD") of the Administrator to
    accept and immediately process requests for additional funding from
    such schools for sixty days following the date of this Order. We
    recognize that certain schools and libraries may need to adjust
    their requests for USF support in light of Hurricane Katrina even
    though they have not been directly damaged by these events.
    Accordingly, we find that due to this catastrophic natural disaster,
    good cause exists for waiving section 54.507(c) for these schools
    and libraries and that such waiver is in the public interest.
    Schools and libraries affected by Hurricane Katrina requesting
    additional funding to support the needs of displaced citizens shall
    submit a certification indicating the approximate number of
    additional students or citizens expected to be served by the
    telecommunications and information services, and that the services
    and products sought in their applications are necessary to serve
    these additional, unanticipated needs.[^135] We estimate that this
    increase in funding will be approximately \$36 million.[^136] We
    note that these funds have already been collected and should not
    have an impact on the long-term viability of the universal service
    program.

51. Because we want to ensure the schools and libraries harmed by
    Hurricane Katrina receive targeted support, we direct the
    Administrator, in reviewing revised or supplemented requests for
    E-rate support, to determine whether the impact of Hurricane Katrina
    was *de minimis* (*e.g*., a small number of students or patrons that
    necessitates no increased demand for supported services.) Schools
    and libraries should not submit revised applications if they are
    getting a *de minimis* increase in students or patrons as a result
    of Hurricane Katrina.[^137] We recognize that this determination may
    depend upon specific facts and circumstances. Thus, applicants
    should submit the number of increased students and library patrons
    (both pre-Hurricane Katrina and post-Hurricane Katrina) and certify
    that the number is accurate. We also require schools and libraries
    to maintain documentation in support of these increased numbers. We
    authorize the state E-rate coordinators for Alabama, Louisiana, and
    Mississippi to review e-rate applications to ensure that schools and
    libraries were substantially damaged and that their requests will be
    free of waste, fraud, and abuse. In addition, for those schools and
    libraries handling increased students/patron evacuees, we authorize
    these E-rate coordinators to review whether the schools/libraries
    are handling more than a *de minimis* number of increased
    students/patrons. We note that the state E-rate coordinators for
    Alabama, Mississippi, and Louisiana will coordinate the application
    process to limit the potential for waste, fraud, and abuse. We
    authorize this additional oversight review activity. We expect such
    review efforts would include verifying that schools and libraries in
    their states seeking this temporary relief meet the *de minimis*
    standard.[^138] We will carefully monitor the use of funds disbursed
    to ensure that all support is utilized in accordance with Commission
    rules, and to ensure that service providers do not charge unjust or
    unreasonable rates. We reserve the right to recover any monies not
    used for their intended purposes or, upon review, we determine were
    used wastefully.

    **2. Eligibility**

52. These temporary rules adopted and waivers granted herein apply to
    schools, libraries, and consortia of schools and libraries in the
    federally-declared Hurricane Katrina disaster areas in the states of
    Louisiana, Mississippi, and Alabama and in surrounding areas, for
    the counties/parishes designated by FEMA as eligible for individual
    assistance. Furthermore, because the residents of the most
    devastated areas will likely have to relocate for an extended period
    of time, we expand eligibility of funds from the schools and
    libraries support mechanism to schools and libraries (and consortia
    of eligible schools and libraries) located in areas that receive
    citizens evacuated from the hardest hit areas. Initial reports show
    these areas to include all counties in Texas and Arkansas that are
    contiguous with Louisiana and Mississippi;[^139] the counties of
    Escambia, Santa Rosa, Okaloosa, Walton, and Bay in Florida; the
    counties of Harris, Dallas, Tarrant and Bexar in Texas; the county
    of Pulaski in Arkansas; and the county of Shelby in Tennessee.[^140]
    Schools and libraries that believe they are eligible under this
    standard should retain documentation of the number of additional
    students and citizens to be supported by telecommunications and
    information services.

53. *[Summary of applicable time periods and deadlines]{.underline}*.
    The E-rate Funding Year 2005 application window is reopened for
    certain schools, libraries, and consortia directly and indirectly
    affected by the hurricane, as set out above. The window reopens on
    the release date of this Order and closes 60 days after. Any
    application or amended application from an eligible school, library,
    or consortium, as discussed above, that is postmarked by 60 days
    after the release date of this Order will be deemed accepted as
    timely filed within the Funding Year 2005 window. For Funding Years
    2005 and 2006, all eligible schools, libraries, or consortia, as
    discussed above, will be treated at the highest level of priority,
    or 90 percent, for Priority Two services. For all eligible schools,
    libraries, or consortia, as discussed above, the clock shall be
    restarted in terms of applying the two-in-five rule of receiving
    Priority Two services. Therefore, applicants that qualify for
    Priority Two services under this Order will be deemed to have
    Funding Year 2006 as their first funding year, for purposes of the
    two-in-five calculation. For any eligible school, library or
    consortium, as discussed above, service substitutions will be
    limited to funds received from applications from Funding Year 2005.

## High-Cost Support 

54. The high-cost program provides support to carriers (incumbent LECs
    as well as competitive carriers) operating in high-cost and rural
    areas. Under the Commission's rules, rural carriers receive support
    based on their embedded costs and non-rural carriers receive support
    based on forward-looking economic costs, as determined by the
    Commission's cost model.[^141] Federal high-cost model support is
    provided to non-rural carriers in states where costs exceed a
    nationwide cost benchmark.[^142] After the amount of support
    available in a state is determined, that support is "targeted" to
    high-cost wire centers.[^143] Section 254(e) of the Act provides
    that carriers receiving federal universal service support "shall use
    that support only for the provision, maintenance, and upgrading of
    facilities and services for which the support is intended."[^144]
    The Commission has previously declined to establish "elaborate rules
    for compliance with section 254(e)" but, rather, has relied on the
    states, through the certification process, to ensure that carriers
    are using support for the purposes in which it is intended.[^145]
    Indeed, the Commission has stated that as long as the uses
    prescribed by the state are consistent with section 254(e), states
    should have the flexibility to decide how carriers use support
    provided by the federal non-rural high-cost mechanism.[^146]

55. The rules for the high-cost program therefore do not explicitly
    address the use of high-cost funds for disaster relief and
    restoration purposes but, instead, codify section 254(e)'s
    requirement that carriers shall use universal service support only
    for the provision, maintenance, and upgrading of facilities and
    services for which the support is intended.[^147] Here we determine
    such costs to be a purpose for which high-cost support is intended.
    In addition, we find that high-cost carriers currently operating in
    the disaster area are coping with enormous challenges. More than
    200,000 customer lines remain out of service. Carriers sustained
    significant damage to their outside plant facilities and switching
    equipment, in some cases losing entire central offices. Because
    commercial power is not fully available, many carriers continue to
    operate on back-up power. We conclude that these carriers are now
    operating in an area like a high-cost area. We conclude that a
    clarification of the use restrictions in our rules is appropriate
    given the overwhelming public interest in assisting those high-cost
    areas struck by the worst natural disaster in the nation's history.
    This action does not provide additional support to high-cost
    carriers harmed by Hurricane Katrina and thus will not affect the
    size of the fund. It will, however, provide high-cost carriers with
    the flexibility to use some of their support to assist in disaster
    restoration. We therefore clarify that using high-cost support to
    repair and rebuild facilities and services damaged by Hurricane
    Katrina is consistent with the statutory directive contained in
    section 254(e).[^148] Alternatively, we waive Commission Rule 54.7
    for the limited purposes discussed herein.[^149] To the extent
    necessary and for only the relief provided herein, we also forbear
    from section 254(e).

56. *[Additional Certifications]{.underline}.* Carriers getting this
    support should certify that: (1) the carrier is serving in the area;
    and (2) the carrier incurred substantial damage as a result of
    Hurricane Katrina.[^150]

## Other Issues

57. *[Administration.]{.underline}* As we note in the sections above, we
    are working within the existing parameters of the low-income, health
    care, E-rate, and high-cost USF programs. Except where noted herein,
    we expect to apply all existing processes and procedures to those
    applying for benefits. For example, schools and libraries would need
    to prepare technology plans, submit applications, and maintain
    documentation. Similarly, carriers seeking support for providing the
    supported wireless service consumer offering will seek reimbursement
    pursuant to the Commission's existing low-income rules.[^151] Those
    programs that have caps specified in the Commission's rules --
    *i.e*., the \$2.25 billion E-rate program and the \$400 million
    rural health care program -- will continue to operate under the
    existing caps and applicable rules. In addition, we take no steps to
    modify or change the Administrator's disbursement processes. All
    carriers and service providers receiving USF monies remain subject
    to audit, and we may recover funds that we later determine were used
    improperly.[^152] At this time, we do not anticipate a need to adopt
    any specific forms because of the temporary nature of these support
    initiatives; parties receiving benefits are required, however, to
    maintain all documentation needed to verify the accuracy of their
    applications and the amount of monies received. Nor do we anticipate
    requiring the Administrator to revise its quarterly filings,
    although the Commission may require supplemental or additional
    information on an as-needed basis consistent with our standard
    operating procedures. We also adopt safeguards tailored to these
    temporary support programs, including certification requirements,
    document retention requirements, eligibility criteria relying on
    FEMA determinations, and audits of disbursed funds.

58. On September 21, 2005, the Administrator filed a letter with the
    Commission, detailing certain implementation concerns regarding
    relief related to Hurricane Katrina.[^153] We note that many of the
    issues raised in that letter are addressed in the scope of this
    Order. Because we are applying the USF programs' existing processes
    and procedures to these initiatives, we do not anticipate
    significant administrative issues to implement. We recognize,
    however, that some implementation issues may arise. We therefore
    require the Administrator to work with the Wireline Competition
    Bureau to resolve any such issues (*e.g*., the content of
    certifications) expeditiously. We note that the proposal of the
    E-rate coordinators from Alabama, Louisiana and Mississippi does not
    address schools and libraries affected by evacuees.[^154] We direct
    the Wireline Competition Bureau to coordinate with the E-rate
    coordinators of the states eligible for relief as a result of a
    substantial number of evacuees to develop review process comparable
    to that of the E-rate coordinators for Alabama, Louisiana and
    Mississippi.[^155]

59. *[Safeguards against waste, fraud, and abuse]{.underline}*. In this
    Order, we adopt a number of measures to safeguard the USF from
    misuse of funds. In particular, we rely on the FEMA disaster
    designation and application processes to determine eligibility for
    the temporary support initiatives, and the checks and balances built
    into FEMA's internal controls and procedures to ensure parties that
    are ineligible for support are rejected. Similarly, we target the
    temporary support to the counties, parishes, and individuals that
    suffered the most from the worst natural disaster in the Nation's
    history. We also adopt specific certification and document retention
    requirements pertaining to this temporary support.[^156] In
    addition, all beneficiaries and service providers receiving these
    monies are subject to potential audit, and those that receive more
    than \$1 million will automatically be audited by the Administrator
    to ensure the funds are used for their intended purposes. All
    eligible telecommunications carriers, service providers, or
    beneficiaries requesting support under these temporary rules shall
    be subject to audit or investigation by the Commission's Office of
    Inspector General ("OIG"), or other authorized federal or state
    governmental agency and, upon request, must make available any
    documentation and records necessary to verify compliance with these
    rules. For the E-rate program, we also rely on the representations
    of the E-rate coordinators for Alabama, Mississippi, and Louisiana
    that they will coordinate the application process to limit the
    potential for waste, fraud, and abuse, and we authorize this
    additional oversight review activity.[^157] Finally, this support is
    temporary and limited for the purposes specified in this Order.

60. We also rely, however, on the existing safeguards and measures in
    the USF programs. Thus, to the extent recovery is sought from USF
    stakeholders, and such stakeholders do not make payments, they will
    be subject to our "red light" rule.[^158] Parties must still submit
    applications and maintain appropriate documentation, as required by
    the existing program rules. The Administrator will subject all
    applications to the normal review processes so that E-rate
    applications, for example, will go through the Program Integrity
    Assurance ("PIA") review process and selective review procedures
    pursuant to the Administrator's standard operating procedures. All
    information collection efforts, document retention, and
    certification requirements that normally apply to applications for
    low-income, rural health care, high-cost, or E-rate support will
    continue to apply for these temporary USF support initiatives. We
    recognize that we have already initiated a proceeding to examine
    these procedures to determine what additional measures can be taken
    to further safeguard the USF from waste, fraud, and abuse.[^159]

61. We are committed to ensuring that the funds disbursed as a result of
    these temporary support initiatives are used for their intended
    purposes and that unscrupulous persons do not seek to gain from
    these disaster relief measures. Therefore, to the extent we find
    through audits or other means that funds were not used properly, we
    will require the Administrator to recover such funds through its
    normal processes. For the E-rate program, for example, we will
    continue to apply the recovery standard adopted in the *Schools and
    Libraries Fifth Report and Order*.[^160] Thus, amounts disbursed "in
    violation of the statute or a rule that implements the statute or a
    substantive program goal" will be recovered in full.[^161] We
    emphasize that we retain the discretion to evaluate the uses of USF
    monies and to determine on a case-by-case basis that waste, fraud,
    or abuse of USF monies occurred and that recovery is warranted.

# effective date

62. The waivers granted herein shall be effective upon the release date
    of this Order. The rule modifications or additions adopted herein
    shall be effective upon the release date of this Order. Pursuant to
    section 553(d)(3) of the Administrative Procedure Act, we find good
    cause to make these rule modifications or additions effective upon
    release of this Order.[^162] As explained above, Hurricane Katrina
    caused significant damage in Alabama, Louisiana, and Mississippi
    including flooding in some areas of these states and significant
    property damage and personal injury. The rule changes promulgated in
    this Order represent a critical step in facilitating the Nation's
    response to the disaster wrought by Hurricane Katrina. We note,
    moreover, that this Order does not mandate new burdens or
    obligations. Accordingly, no entity will be adversely affected by
    making the order effective at the earliest possible date. We
    delegate authority to the Wireline Competition Bureau to work with
    the Universal Service Administrator to make the necessary
    programmatic changes to implement this Order.

63. Given the urgent need, the rules set forth herein shall take effect
    immediately upon release, and without prior public notice and
    comment. Section 553 of the Administrative Procedures Act
    (APA)[^163] permits any agency to implement a rule without public
    notice and opportunity for comment "when the agency for good cause
    finds . . . that notice and public procedure thereon are
    impracticable, unnecessary, or contrary to the public
    interest."[^164] Commission rules permit us to render an order
    effective upon release where good cause warrants.[^165] As a general
    matter, we firmly believe that public notice requirements are an
    essential component of our rulemaking process. We find, however,
    that while receipt of public comment clearly is necessary to the
    formulation of final rules, the devastation caused by Hurricane
    Katrina and the need for prompt attention for the victims of
    Hurricane Katrina present good cause to make this Order effective
    upon publication in the Federal Register publication and to adopt
    the temporary rules described herein immediately.

# congressional review act

64. The Commission will send a copy of this Order in a report to
    Congress and the Government Accountability Office pursuant to the
    Congressional Review Act, *see* 5 U.S.C. § 801(a)(1)(A). For the
    reasons stated herein, we find good cause for the rule changes made
    by this Order to take effect upon the release of this Order, *see* 5
    U.S.C. § 808(2).

# Procedural Matters

65. This Order contains new and modified information collection
    requirements subject to the Paperwork Reduction Act of 1995 (PRA),
    Public Law 104-13. Pursuant to 5 C.F.R. § 1320.18(d), the Office of
    Management and Budget (OMB) has granted the Commission a temporary
    waiver of the PRA requirements for this rulemaking. Accordingly,
    this Order will not be submitted to OMB for review.

# ORDERING CLAUSES

66. Accordingly, IT IS ORDERED that, pursuant to the authority contained
    in sections 4(i), 4(j), 10, 201-205, 214, 254, 303(r), and 403 of
    the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 154(j), 160, 201-205, 214, 254, 303(r), and 403 this Order
    IS ADOPTED, and the temporary rules SHALL BECOME EFFECTIVE
    immediately upon release of this Order, pursuant to 5 U.S.C. §§ 408,
    553(d)(3), 47 U.S.C. §§ 408, 553(d)(3).

67. Accordingly, IT IS ORDERED, pursuant to 4(i) and 251(e) of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i) and
    251(e), and sections 1.1 and 1.3 of the Commission's rules, 47
    C.F.R. §§ 1.1 and 1.3, that our procedural rules relating to the
    universal service fund are waived to the extent herein described.

68. Furthermore, IT IS ORDERED, pursuant to sections 1, 4(i),
    251(b)(2),and 251(e) of the Communications Act of 1934, as amended,
    47 U.S.C. §§ 151, 154(i), 251(b)(2) and 251(e), and section 1.3 of
    the Commission's rules, 47 C.F.R. § 1.3, that section
    54.603(b)(vi)(3) of the Commission's rules is waived to the extent
    herein described.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Marlene H. Dortch
>
> Secretary

**APPENDIX**

**Maps of Affected Counties**

![](media/image1.png){width="6.498611111111111in"
height="4.876388888888889in"}

![](media/image2.png){width="6.496527777777778in"
height="4.772222222222222in"}

[^1]: As discussed in more detail below, we estimate that the support
    provided herein would be approximately \$39 million for Lifeline,
    \$12 million for Link-Up, \$28 million for rural health care, and
    \$132 million for schools and libraries.

[^2]: President Bush issued Major Disaster Declarations for these three
    states on that same day. *See*
    http://www.fema.gov/news/disasters.fema*.*

[^3]: *See* <http://www.fema.gov/news/disasters.fema?year=2005>.
    According to the Federal Emergency Management Agency ("FEMA"),
    approximately 122,000 people affected by the hurricane were housed
    in temporary shelters as of September 15, 2005. *See* map attached
    at Appendix. FEMA now estimates that approximately 300,000 families
    are homeless and 200,000 will need government housing. "*Housing the
    Displaced is Rife with Delays*," Washington Post, Sept. 23, 2005 at
    A-01. By Hurricane Katrina disaster area, we mean those counties and
    parishes designated by FEMA as eligible for individual disaster
    assistance. Based on FEMA's description, we extend this relief to:

    *Alabama* \-- Baldwin, Mobile, Pickens, Greene, Hale, Tuscaloosa,
    and Washington.

    *Louisiana* \-- Acadia, Ascension, Assumption, Calcasieu, Cameron,
    East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson,
    Jefferson Davis, Lafayette, Lafourche, Lincoln, Livingston, Orleans,
    Pointe Coupee, Plaquemines, St. Bernard, St. Charles, St. Helena,
    St. James, St. John, St. Mary, St. Martin, St. Tammany, Tangipahoa,
    Terrebonne, Vermilion, Washington, West Baton Rouge, and West
    Feliciana.

    *Mississippi* \-- Adams, Amite, Attala, Bolivar, Claiborne, Choctaw,
    Clarke, Copiah, Covington, Forrest, Franklin, George, Greene,
    Hancock, Harrison, Hinds, Jackson, Jasper, Jefferson, Jefferson
    Davis, Jones, Kemper, Lafayette, Lamar, Lauderdale, Lawrence, Leake,
    Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee,
    Oktibbeha, Pearl River, Perry, Pike, Quitman, Rankin, Scott,
    Simpson, Smith, Stone, Tippah, Walthall, Warren, Wayne, Wilkinson,
    Winston, and Yazoo.

[^4]: *See, e.g*., "*Telecom Damage from Katrina Tops \$400 Million;
    Repairs May Take Months*," Washington Post, Sept. 6, 2005.

[^5]: *See, e.g*., "*Medicaid's Red Tape Entangles Evacuees*," Chicago
    Tribune, Sept. 14, 2005 (in Texas, which has accepted 200,000
    evacuees, the state's Medicaid program could spend an extra \$30
    million per month).

[^6]: *See, e.g., Joint Application by BellSouth Corporation, BellSouth
    Telecommunications, Inc., and BellSouth Long Distance, Inc. for
    Provision of In-Region, InterLATA Services in Florida and
    Tennessee*, WC Docket Nos. 02-307, 02-150, 02-35, Order, DA 05-2447
    (rel. Sept. 13, 2005); *Schools and Libraries Universal Service
    Support Mechanism*, CC Docket Nos. 02-6, 96-45, WC Docket Nos.
    02-60, 03-109, Order, DA 05-2484 (rel. Sept. 21, 2005); *Numbering
    Resource Optimization*, CC Docket No. 99-200, Order, FCC 05-164
    (rel. Sept. 4, 2005); *Telephone Number Portability, Numbering
    Resource Optimization*, CC Docket Nos. 95-116, 99-200, Order, FCC
    05-161 (rel. Sept. 1, 2005).

[^7]: The Lifeline rules are in effect from the release date of this
    Order until March 1, 2006. We estimate that that the total impact of
    these rules will be approximately \$39 million.

[^8]: The Link-Up rules are in effect from the release date of this
    Order until March 1, 2007. We estimate that the total impact of
    these rules will be approximately \$12 million.

[^9]: The health care rules adopted herein are in effect for Funding
    Year 2005. Providers can apply for this funding by March 1, 2006 and
    receive funding retroactive to August 29, 2005. We estimate that the
    total impact of these rules will be approximately \$28 million.

[^10]: We estimate that the total impact of these rule waivers will be
    approximately \$132 million.

[^11]: We estimate that 39 high-cost companies were affected by
    Hurricane Katrina in Alabama, 29 in Louisiana, and 33 in
    Mississippi. *See infra* paras. 54-56 (discussing high-cost
    support).

[^12]: We note that the Commission\'s OIG may work with the
    Administrator to implement these audits using, for example, auditors
    working under contract.

[^13]: 47 C.F.R. § 1.3. This rule provides that "\[a\]ny provision of
    the rules may be waived by the Commission on its own motion or on
    petition if good cause therefor is shown." *Id.*

[^14]: *Northeast Cellular Telephone Co. v. FCC*, 897 F.2d 1164, 1166
    (D.C. Cir. 1990).

[^15]: For the reasons stated herein, we find good cause for the rules
    to become effective upon release of this Order, before publication
    in the Federal Register. 5 U.S.C. § 553(d)(3). *See* paras. 62-63,
    *infra.*

[^16]: *See* Wireline Competition Bureau, Federal Communications
    Commission, *Trends in Telephone Service Report*, Tables 20.2, 20.4
    (August 2003) (*2003 Trends Report*) (estimating that 6.6 million
    people paid reduced rates under the Lifeline program in 2002 and
    13.7 million people paid reduced charges under Link-Up since 1991).

[^17]: *See* Wireline Competition Bureau, Federal Communications
    Commission, *Telephone Subscribership in the United States Report*,
    Table 1 (rel. May 25, 2005) (*Telephone Subscribership Report*)
    (data through Nov. 2004);
    [[http://www.fcc.gov/wcb/iatd/lec.html]{.underline}](http://www.fcc.gov/wcb/iatd/lec.html).

[^18]: As of September 16, 2005, carriers reported approximately 274,000
    telephone lines remained out of service in Louisiana and Mississippi
    as a result of the damage caused by Hurricane Katrina.

[^19]: FEMA designated the affected areas under two categories, for
    individual assistance and for public assistance. FEMA provides
    individuals housing assistance and financial assistance for other
    needs. *See* 44 C.F.R. §§ 206.117, 206.119. FEMA's rules provide for
    a 60-day registration period, although FEMA may accept late
    registrations. *See* 44 C.F.R. § 206.11. In addition, FEMA's rules
    establish eligibility factors to specify the instances in which FEMA
    may provide individual disaster assistance. *See* 44 C.F.R. §
    206.113. FEMA's rules further specify conditions of ineligibility
    that would disqualify an individual from receiving assistance. *Id*.
    at § 206.113(b).

[^20]: 47 U.S.C. § 254(b).

[^21]: *See* Letter from Foster L. Campbell, Commissioner, Louisiana
    Public Service Commission to Kevin J. Martin, Chairman, FCC (Sept.
    8, 2005) (requesting the Commission to act to ensure that wireless
    carriers provide at least two months of free service to victims of
    Hurricane Katrina) ("Campbell Letter"). On September 19, 2005, the
    entire Louisiana Public Service Commission voted a resolution in
    support of the Campbell Letter.

[^22]: Lifeline provides low-income consumers with discounts of up to
    \$10.00 off of the monthly cost of telephone service for a single
    telephone line in their principal residence. 47 C.F.R. §
    54.401(a)(2). Link-Up provides low-income consumers with discounts
    of up to \$30.00 off of the initial costs of installing telephone
    service. 47 C.F.R. § 54.411(a)(1). Recognizing the unique needs and
    characteristics of tribal communities, enhanced Lifeline and Link-Up
    provides qualifying low-income individuals living on tribal lands
    with up to \$25.00 in additional discounts off the monthly cost of
    telephone service and up to \$70.00 more off the initial costs of
    installing telephone service.

[^23]: We estimate that this will have approximately a \$39 million
    impact on the low-income fund, based on an estimated \$130 per
    approximately 300,000 eligible evacuee households without telephone
    service. We limit this Lifeline rule to the time period from the
    release date of this Order to March 1, 2006 because this is a
    short-term emergency relief measure and we anticipate that after
    this time period, hurricane victims will no longer need this
    temporary emergency relief.

[^24]: *See, e.g*.,
    <http://www.tracfone-orders.com/direct/tr/itemdetl.jsp?prod=2063&tech=TOGSM4&techzip=70806>;
    <http://onlinestorez.cingular.com/cell-phone-service/cell-phones/cell-phones.jsp?CategoryId=1717200027&source=INC230063>.

[^25]: *Id.*

[^26]: For example, many prepaid wireless carriers, such as TracFone,
    will provide a customer bonus minutes for future airtime purchases.
    *See, e.g.,*
    http://www.tracfone.com/double_minute_autopay.jsp?AID=DMA&codeVal=3.

[^27]: Consumers remain free to choose to stay with the wireless carrier
    after the expiration of the offering. To continue providing service,
    however, wireless providers must obtain the customer's approval.

[^28]: Enhanced Lifeline and Link-Up, however, provide qualifying
    low-income individuals living on tribal lands with up to \$25.00 in
    additional discounts off the monthly cost of telephone service and
    up to \$70.00 more off the initial costs of installing telephone
    service.

[^29]: We anticipate that wireless providers will seek to attract
    potential new customers by, for example, offering more free minutes
    as part of this package or at least providing additional minutes to
    consumers who do not need a new handset.

[^30]: *See Telephone Number Portability, Numbering Resource
    Optimization*, CC Docket Nos. 95-116, 99-200, Order, FCC 05-161
    (rel. Sept.1, 2005).

[^31]: 47 U.S.C. § 151.

[^32]: We estimate that this will have approximately a \$12 million
    impact on the low-income fund, based upon \$30 per 370,000
    households. Based on press reports and reports from federal
    government agencies, our best estimate is that approximately 370,000
    households may be eligible. *See, e.g*., "*Housing the Displaced is
    Rife with Delays*," Washington Post, Sept. 23, 2005 at A-01
    (estimating 300,000 homeless families).

[^33]: This temporary support is intended to defray the costs of
    installation of a telephone line to a residence that did not have
    telephone service in effect prior to the hurricane; facilities such
    as hotels or motels do not qualify for support under these temporary
    rules.

[^34]: This timeframe generally coincides with the 18-month period of
    eligibility for temporary housing under FEMA's rules.

[^35]: Carriers seeking reimbursement under these temporary Lifeline and
    Link-Up support initiatives should submit the Form 497 and any other
    forms or documentation already required to participate in the
    low-income program. In addition, carriers should also submit
    information with the Form 497 to demonstrate the provision of
    supported services to victims of Hurricane Katrina (*e.g*., number
    of households receiving the supported wireless service offering,
    number of temporary housing arrangements receiving Link-Up support,
    number of reconnections receiving Link-Up support). As noted above,
    carriers are required to certify the accuracy of this information.

[^36]: This temporary addition of eligibility criteria applies only to
    the federal Lifeline and Link-Up programs and is not intended to
    require states with their own supplemental Lifeline and Link-Up
    programs to automatically provide additional support.

[^37]: 47 U.S.C. § 254(e).

[^38]: 44 C.F.R. §§ 206.113, 206.117.

[^39]: 44 C.F.R. § 206.113(b)(2).

[^40]: Under FEMA rules, disaster victims who receive assistance but
    have the ability to repay through insurance or other means are
    generally required to repay any funds to FEMA. *See* 44 C.F.R. §
    706.113(a). *See also* Federal Emergency Management Agency, Help
    After a Disaster: Applicant's Guide to the Individuals and
    Households Program, 3-4 (Aug. 2005).

[^41]: Nothing in our temporary support initiative is intended to
    restrict low-income consumers from receiving Lifeline and Link-Up
    support under our existing income/program based low-income support
    mechanism.

[^42]: Thus, to the extent the consumer's telephone line remains in
    service after the hurricane, support for reconnecting service is not
    available.

[^43]: *Lifeline and Link-Up*, WC Docket No. 03-109, Report and Order
    and Further Notice of Proposed Rulemaking, 19 FCC Rcd 8302,
    8307-313, ¶¶ 7-14 (2004).

[^44]: To qualify to receive Lifeline service in a state that mandates
    Lifeline support, a consumer must meet the eligibility criteria
    established by the state commission for such support. 47 C.F.R. §
    54.409(a).

[^45]: Pursuant to section 214(e)(1), a common carrier designated as an
    ETC must offer and advertise the services supported by the federal
    universal service mechanisms throughout the designated service area.
    47 U.S.C. § 214(e)(1). Section 214(e)(2) of the Act gives state
    commissions the primary responsibility for performing ETC
    designations. 47 U.S.C. § 214(e)(2). *See also Federal-State Joint
    Board on Universal Service, Promoting Deployment and Subscribership
    in Unserved 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, 12255,
    ¶ 93 (2000) ("*Twelfth Report and Order"*). Section 214(e)(6)
    directs the Commission, upon request, to designate as an ETC "a
    common carrier providing telephone exchange service and exchange
    access that is not subject to the jurisdiction of a State
    commission." 47 U.S.C. § 214(e)(6). *See, e.g., Federal-State Joint
    Board on Universal Service, Western Wireless Corporation Petition
    for Designation as an Eligible Telecommunications Carrier for the
    Pine Ridge Reservation in South Dakota*, CC Docket No. 96-45,
    Memorandum Opinion and Order, 16 FCC Rcd 18133 (2001). Of the three
    states designated for FEMA assistance (Louisiana, Mississippi and
    Alabama), only Alabama does not exercise jurisdiction over ETC
    designation. *See Federal-State Joint Board on Universal Service,
    Public Service Cellular, Inc. Petition for Designation as an
    Eligible Telecommunications Carrier in the States of Georgia and
    Alabama*, CC Docket No. 96-45, Order, 20 FCC Rcd 6854 (WCB 2005).

[^46]: Specifically, section 10(a) provides that the Commission shall
    forbear from applying such provision or regulation if the Commission
    determines that:

    \(1\) enforcement of such regulation or provision is not necessary
    to ensure that the charges, practices, classifications, or
    regulations by, for, or in connection with that telecommunications
    carrier or telecommunications service are just and reasonable and
    are not unjustly or unreasonably discriminatory;

    \(2\) enforcement of such regulation or provision is not necessary
    for the protection of consumers; and

    \(3\) forbearance from applying such provision or regulation is
    consistent with the public interest.

    47 U.S.C. § 160(a).

[^47]: 47 U.S.C. § 160(a)(1).

[^48]: *See* 47 U.S.C. § 214(e).

[^49]: 47 U.S.C. § 160(a)(2).

[^50]: Service offerings pursuant to this special relief remain subject
    to Commission oversight for the duration of the offering.

[^51]: This special temporary ETC status applies only to the special
    Lifeline support adopted herein, and not to the Link-Up support.

[^52]: *See, e.g.,* 47 C.F.R. § 54.405(b) (advertising supported
    services).

[^53]: A signed letter with these certifications will suffice.

[^54]: We note that the Commission\'s OIG may work with the
    Administrator to implement these audits using, for example, auditors
    working under contract.

[^55]: *See* note 3, *supra.*

[^56]: *See* para. 31, *infra*.

[^57]: On November 17, 2003, the Commission clarified that nonprofit
    entities that function as rural health care providers on a part-time
    basis and dedicated emergency departments of rural for-profit
    hospitals that participate in Medicare are both eligible to receive
    pro-rated rural health care support. *See Rural Health Care Support
    Mechanism,* WC Docket No. 02-60, Report and Order, Order on
    Reconsideration, and Further Notice of Proposed Rulemaking, 18 FCC
    Rcd 24546, 24553-56, paras. 13-17 (2003) ("*Rural Health Care Report
    and Order"*).

[^58]: The counties in Texas are Bowie, Cass, Marion, Harrison,
    Jefferson, Newton, Orange, Panola, Shelby and Sabine. The counties
    in Arkansas are Chicot, Clay, Crittenden, Desha, Greene,
    Lee, Mississippi, and Phillips.

[^59]: *See* USA Today, Sept. 2, 2005, page 6A.

[^60]: We believe that a ten percent increase in the number of patients
    as a result of treating evacuees should be sufficient to demonstrate
    that health care providers have been substantially affected. We
    expect that health care providers serving a relatively small or *de
    minimis* number of hurricane victims would not be eligible for these
    discounts.

[^61]: *See* Red Cross web site for description of services provided in
    the case of a disaster.
    (http://www.redcross.org/services/disaster/0,1082,0_319\_,00.html,
    visited Sept. 6, 2005).

[^62]: *"Waves of evacuees swamp host cities*," USA Today, Sept. 5,
    2005,
    <http://www.usatoday.com/news/nation/2005-09-05-cover-katrina_x.htm?POE=NEWISVA>
    (The Red Cross is caring for 142,000 storm victims at 487 shelters
    in at least 12 states. ); "*Red Cross says number of people in
    shelters growing*," USA Today, Sept. 4, 2005,
    http://www.usatoday.com/news/nation/2005-09-04-katrina-shelters_x.htm.

[^63]: *See* 47 C.F.R. § 54.601(a)(2)(ii), (iv).

[^64]: "Mobile" in this context does not mean that the health care
    provider has to move to serve different areas. It can also mean
    temporary providers that stay in one location for the entire year.

[^65]: *See Rural Health Care Second Report and Order*, 19 FCC Rcd at
    24624-25, para. 24.

[^66]: *See, e.g.,* Ron Winslow, *On Wheels and in the Air, Rushing
    Medical Care to Victims*, Wall Street Journal, Sept. 7, 2005, at B1
    (describing a mobile treatment center assembled in Waveland,
    Mississippi, to take over for the damaged local hospital).

[^67]: *See, e.g*., "*Operation Assist*," Newsweek, Sept. 19, 200, at 10
    ("\[Dr. Redlener\] had founded Operation Assist, sent two mobile
    medical clinics to Mississippi, and put another on its way to
    Louisiana.")

[^68]: *See Rural Health Care Support Mechanism*, WC Docket No. 02-60,
    Second Report and Order, Order on Reconsideration, and Further
    Notice of Proposed Rulemaking, 19 FCC Rcd 24613, 24626, para. 28
    (2004) ("*Rural Health Care Second Report and Order*").

[^69]: Pub. L. No. 104-104, 110 Stat. 56 (1996).

[^70]: H.R. Conf. Rep. No. 458, 104^th^ Cong. 2^nd^ Sess. 133 (1996).

[^71]: *See* 47 U.S.C. §§ 151 *et seq.* (adding 47 U.S.C. § 254(h)(1)(A)
    to the Communications Act). The term "State" includes the District
    of Columbia and the territories and possessions. 47 U.S.C. §
    153(40).

[^72]: 47 U.S.C. § 254(h)(2)(A).

[^73]: *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Report and Order, 12 FCC Rcd 8776 (1997) ("*1997 Universal
    Service Order*").

[^74]: *See Rural Health Care Report and Order,* 18 FCC Rcd at 24557-62,
    paras. 22-29. This change was implemented beginning in Funding Year
    2004 (July 1, 2004).

[^75]: *See Rural Health Care Second Report and Order*, 19 FCC Rcd at
    24619-24, paras. 11-23. This new definition was effective as of
    Funding Year 2005 (July 1, 2005).

[^76]: *Rural Health Care Second Report and Order,* 19 FCC Rcd at
    24625-29, paras. 26-34.

[^77]: *Id*. at 24631-34, paras. 38-44.

[^78]: *See Rural Health Care Report and Order,* 18 FCC Rcd at 24557-58,
    paras. 22-24.

[^79]: *See, e.g.,* Ron Winslow, *On Wheels and in the Air, Rushing
    Medical Care to Victims*, Wall Street Journal, Sept. 7, 2005, at B1
    (describing a mobile treatment center assembled in Waveland,
    Mississippi, to take over for the damaged local hospital).

[^80]: *See* 47 U.S.C. § 254(h)(2)(A); *see also* *Rural Health Care
    Second Report and Order*, 19 FCC Rcd at 24631-32, para. 39. In
    *Texas Office of Public Utility Counsel v. FCC*, the court upheld
    the Commission's authority under section 254(h)(2)(A) to provide
    universal service support for "advanced services" to non-rural
    health care providers. *TOPUC v. FCC*, 183 F.3d 393, 446 (5^th^ Cir.
    1999), *aff'g in part, rev'g in part, and remanding in part*,
    *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, First Report and Order, 12 FCC Rcd 8776 (1997) ("*TOPUC")*.
    Specifically, the court affirmed the Commission's decision to
    provide support for advanced telecommunications and information
    services by subsidizing telephone calls to Internet service
    providers. *Id.*

[^81]: *See* 47 U.S.C. § 254(h)(2)(A).

[^82]: *See id.; see also TOPUC* 183 F. 3d at 444 ("We are convinced
    that Congress intended to allow the Commission broad authority to
    implement this section of the Act."). The Commission has determined
    that section 254(h)(2)(A), in conjunction with section 4(i),
    authorizes universal service support for advanced services provided
    by non-telecommunications carriers to enable schools and libraries
    to select the most cost-effective provider of Internet access and
    internal connections. *1997 Universal Service Order*, 12 FCC Rcd at
    9084-87, paras. 589-94. The Commission has also concluded that
    section 254(h)(2)(A) authorizes the establishment of a universal
    service support mechanism for infrastructure development to enhance
    access to advanced telecommunications and information services, as
    long as the mechanism is competitively neutral, technically
    feasible, and economically reasonable. *Id.* at 9109, para. 634. In
    addition, the Commission has determined that it is authorized under
    section 254(h)(2)(A) to provide support for Internet access for
    rural health care providers. *See Rural Health Care Report and
    Order*, 18 FCC Rcd at 24457-462, paras. 22-28.

[^83]: The current rules set the amount of universal service support as
    the difference between the urban rate and the rural rate charged for
    the service. 47 C.F.R. § 54.609.

[^84]: *See* 47 U.S.C. § 254(h)(2)(A).

[^85]: We estimate that there are approximately 2,300 health care
    providers, including American Red Cross shelters, that are eligible
    for funding under this Order based on their geographic location. We
    estimate that these facilities could receive up to \$12,000 each for
    the Funding Year ending June 30, 2006. Thus, this would have
    approximately a \$28 million impact on the rural health care fund.

[^86]: *See* 47 C.F.R. § 54.623.

[^87]: The Administrator estimates that the demand will be approximately
    \$30 million for Funding Year 2004. *See* Federal Universal Service
    Support Mechanisms Fund Size Projections for the First Quarter 2005,
    available at \<http://www.universalservice.org/overview/filings\>
    (filed Aug. 2, 2005). We also limit this additional support to
    Funding Year 2005.

[^88]: As such, this support will not fund basic telephone services,
    sometimes known as POTS. In addition, as noted above, the advanced
    telecommunications and information services must be necessary for
    the provision of health care services to victims of Hurricane
    Katrina.

[^89]: 47 U.S.C. § 254(b)(5). *See* *Rural Health Care Second Report and
    Order*, 19 FCC Rcd at 24634, para. 44; *Rural Health Care Report and
    Order*, 18 FCC Rcd at 24460-61, para. 27.

[^90]: *See* *Rural Health Care Second Report and Order*, 19 FCC Rcd at
    24634, para. 44; *Rural Health Care Report and Order*, 18 FCC Rcd at
    24460-61, para. 27.

[^91]: The average discount nationwide is 66 percent of service cost.
    *Rural Health Care Second Report and Order*, 19 FCC Rcd at 24634,
    n.167.

[^92]: *See* 47 U.S.C. § 254(h)(1)(A).

[^93]: *See* 47 U.S.C. § 254(h)(2)(A).

[^94]: As noted above, the Commission has authority under section
    254(h)(2)(A) to provide universal service support for "advanced
    services" to non-rural health care providers. *TOPUC,* 183 F.3d at
    446.

[^95]: *See* *Rural Health Care Second Report and Order*, 19 FCC Rcd at
    24634, para. 44; *Rural Health Care Report and Order*, 18 FCC Rcd at
    24460-61, para. 28.

[^96]: *See* 47 U.S.C. §§ 151 *et seq*.; *see* *also* *Schools and
    Libraries Universal Service Support Mechanism,* CC Docket No. 02-6,
    Notice of Proposed Rulemaking and Order, 17 FCC Rcd 1914, para. 3
    (2002).

[^97]: We note that a signed letter containing this certification will
    suffice.

[^98]: *See* 47 C.F.R. § 54.613.

[^99]: The end of Funding Year 2005 is June 30, 2006. If health care
    providers in these areas are unable to provide the necessary relief
    to victims of Hurricane Katrina after this time period has elapsed,
    we will revisit extending the time period for providing expanded
    support.

[^100]: In adopting these temporary rules we do not intend to limit, in
    any way, available support or administrative deadlines currently
    applicable to rural health care providers under the existing rules.

[^101]: 47 C.F.R. § 54.603(b)(vi)(3). FCC Form 465 is the means by which
    health care providers request bids from service providers for
    services to be used for the provision of health care. FCC Form 465
    is the health care provider's certification that it meets program
    eligibility requirements.

[^102]: The E-rate coordinators for Alabama, Mississippi, and Louisiana
    estimate that approximately 113 schools and libraries will not
    require Funding Year 2005 monies because they were destroyed and
    will have to be rebuilt. *See* Letter from Gary Rawson, Mississippi
    Department of Information Technology Services to Chairman Kevin
    Martin, FCC (Sept. 19, 2005) ("Rawson Letter"). The E-rate
    coordinators for Alabama, Mississippi, and Louisiana estimate that
    such rebuilding will start after July 1, 2006. *Id.* We estimate the
    following number of schools, libraries, school districts, and
    consortia in Alabama, Louisiana, and Mississippi are at the 90
    percent discount level for Funding Year 2005: Louisiana -- 255
    schools, 61 libraries, and 96 school districts; Alabama -- 188
    schools, 94 libraries, 129 school districts, and 1 consortium;
    Mississippi -- 74 schools, 55 libraries, 150 school districts, and 6
    consortia. These numbers are for the states of Louisiana,
    Mississippi, and Alabama in their entirety, and not the number of
    schools and libraries in the area FEMA declared eligible for
    individual disaster assistance. We note that the relief granted in
    this Order is limited to those counties designated as eligible by
    FEMA as eligible for individual assistance. These counties are
    listed in note 3, *supra*.

[^103]: *See, e.g*., "*New Accents in the Halls of Area Schools*,"
    Washington Post, Sept. 20, 2005 at 1B (Maryland and Virginia public
    schools have taken in at least 1,488 Hurricane Katrina evacuees);
    "*Storm and Crisis: Education; Plan Will Pay 90 % of Costs for
    Students Hit by Storm*," New York Times, Sept. 17, 2005 (over
    372,000 schoolchildren who attended public and private schools were
    displaced and now enrolled in schools throughout the country);
    "*Schools Hope for Share of Evacuee Aid*," Atlanta Journal and
    Constitution, Sept. 17, 2005 (more than 7,000 students resettled in
    Atlanta-area schools).

[^104]: The E-rate coordinators of the states of Alabama, Louisiana, and
    Mississippi, along with the education and library agencies of the
    three states, jointly submitted a proposal to the Commission, which
    included data on the destruction, recommendations on moving forward,
    and requests for waivers of the schools and libraries rules to
    permit re-opening the Funding Year 2005 filing window for applicants
    affected by the hurricane, a 90 percent discount for eligible
    services, waiver of technology plan approval for services requested,
    extensions of form deadlines, waiver of the "two-in-five" rule,
    waiver of the rules governing transfer of equipment, waiver of
    certifications, waiver of recordkeeping rules, allowing Block 4 data
    to follow new construction, flexibility in determining the contract
    end date for services requested, waiver of the LOA requirement for
    filing a state consortium Form 470, waiver of 28-day rule, waiver of
    service start date, and waiver of Item 25 certification on Form 471.
    *See* Rawson Letter. *See also* Letter from The Honorable Haley
    Barbour, Governor, State of Mississippi to Chairman Kevin Martin,
    FCC (Sept. 15, 2005); Letter from The Honorable Kathleen B. Blanco,
    Governor, State of Louisiana to Chairman Kevin Martin, FCC (Sept.
    15, 2005); Letter from Joseph B. Morton, State Superintendent of
    Education, State of Alabama to Chairman Kevin Martin, FCC (Sept. 16,
    2005). Most of these requested waivers are addressed in this Order
    or in the Wireline Competition Bureau's recently released *Schools
    and Libraries Universal Service Support Mechanism*, CC Docket No.
    02-6, Order, DA 05-2484 (rel. Sept. 21, 2005).

[^105]: By "directly affected", we mean those schools and libraries
    located in the counties and parishes FEMA declared as eligible for
    individual disaster assistance and incurred substantial damage as a
    result of Hurricane Katrina*. See supra* note 3. By "indirectly
    affected", we mean those schools and libraries handling increased
    students or patrons who evacuated from the Hurricane Katrina
    disaster area.

[^106]: This relief is limited to schools and libraries that incurred
    substantial damage in the counties and parishes listed in note 3,
    *supra.*

[^107]: We estimate that this will have a \$132 million impact on the
    schools and libraries fund, based on an estimated \$96 million for
    600 schools and libraries in the Gulf Coast region affected by the
    hurricane and an estimated \$36 million for 2,400 schools and
    libraries serving evacuees throughout the country for Funding Year
    2005. E-rate coordinators of the states of Alabama, Louisiana, and
    Mississippi, estimate that 122 schools and libraries will not
    require Funding Year 2005 dollars because they have been destroyed
    and will have to be rebuilt, which the coordinators estimate will
    occur after July 1, 2006. *See* Rawson Letter. The E-rate
    coordinators for Alabama, Mississippi, and Louisiana also expect
    that many schools and libraries in the affected areas will need to
    cancel funding request numbers ("FRNs") because of the dramatically
    changed circumstances. *Id.*

[^108]: The E-rate coordinators of the states of Alabama, Louisiana, and
    Mississippi represent that they will coordinate the application
    process for disaster-struck schools and libraries to limit the
    potential for waste, fraud, and abuse. *See* Rawson Letter. The
    E-rate coordinators also indicate that they will perform this review
    for both schools and libraries in the three states. *Id.* Under
    state law, state educational and library administrative authorities
    have the ability to determine how and for what services member
    schools and libraries may apply.

[^109]: We note that it will be sufficient to satisfy this requirement
    to submit signed letters stating that services and products will be
    solely used to restore the network would be and that any alternate
    funding (*e.g*., insurance, FEMA, community resources) in excess of
    90 percent of the cost for products or services requested on the
    application will be returned to the Universal Service Fund.
    Insurance or FEMA funds, for example, can be used to pay the ten
    percent not covered by the 90 percent USF discount. Schools and
    libraries are not permitted to recover more than the costs of the
    supported services. We note that the E-rate coordinators for
    Alabama, Mississippi, and Louisiana provided sample certifications.
    *See* Rawson Letter.

[^110]: For example, a program applicant may request an extension of the
    implementation deadline for funding requests when the applicant's
    service provider is unable to complete implementation for "reasons
    beyond the service provider's control." 47 C.F.R. § 54.507(d)(3). In
    addition, eligible services and equipment components of eligible
    services may be transferred to another eligible school or library in
    the event that the particular location where the service originally
    was received is permanently or temporarily closed. 47 C.F.R. §
    54.513(c).

[^111]: 47 C.F.R. § 54.507(c).

[^112]: *Id.*

[^113]: *Id.*

[^114]: *See Request for Review of the Decision of the Universal Service
    Administrator, Ysleta Independent School District, El Paso, TX*, CC
    Docket Nos. 96-45, 97-21, Order, 18 FCC Rcd 26406, 26436, para. 66
    (2003) (re-opening filing window for Funding Year 2002 in order to
    permit Ysleta, and similarly situated applicants in the caption who
    appealed SLD's denial of their funding requests, to re-bid for
    services, to the extent such services had not been provided).

[^115]: *See also supra* at paras. 6-7 (providing reasons for waiver).

[^116]: *See* 47 C.F.R. § 54.505.

[^117]: *Id*. The Commission recently sought comment on altering the
    discount mechanism. *See* *Schools and Libraries Universal Service
    Support Mechanism*, CC Docket No. 02-6, Third Report and Order and
    Second Further Notice of Proposed Rulemaking, 18 FCC Rcd 26912,
    26936-39 (2003).

[^118]: 47 C.F.R. § 54.507(g)(1)(i-iv); *see* *also* *Federal-State
    Joint Board on Universal Service*, CC Docket 96-45, Fifth Order on
    Reconsideration and Fourth Report and Order, 13 FCC Rcd 14915,
    14938, para. 36 (1998).

[^119]: *See* note 3, *supra*, for a list of counties and parishes that
    were directly affected by Hurricane Katrina. Only schools and
    libraries that sustained substantial damage in those counties are
    eligible for this relief.

[^120]: Priority Two services are internal connections and equipment;
    the type of services that would need to be replaced due to the
    hurricane. Priority One services are recurring services and
    typically would be requested each year. We limit this treatment to
    those schools and libraries in the Hurricane Katrina disaster area
    that are in counties or parishes designated as eligible for FEMA
    individual housing assistance. The list of these counties and
    parishes is in note 3, *supra*.

[^121]: *See* note 87, *supra*.

[^122]: *See* 47 C.F.R. § 54.507(a)(1).

[^123]: *See* Federal Universal Service Support Mechanisms Fund Size
    Projections for the Second Quarter 2005, available at
    \<http://www.universalservice.org/overview/filings\>(USAC Filing for
    Second Quarter 2005 Projections). For 2d Quarter, 2005:
    [http://www.universalservice.org/overview/filings/2005/Q2/2Q05%20Demand%20FINAL.pdf](http://www.universalservice.org/overview/filings/2005/Q2/2Q05 Demand FINAL.pdf).
    For 2d Quarter, 2004:
    http://www.universalservice.org/overview/filings/2004/Q2/2Q04%20FINAL.doc.
    We estimate that approximately 600 schools and libraries could be
    eligible for this support.

[^124]: Rawson Letter at 3. Specifically, E-rate Coordinators from
    Alabama, Louisiana, and Mississippi state that funding should be
    provided with unused rollover funds that are available to the
    Administrator. The Coordinators also state that the cancellation of
    many of the existing FRNs currently held by the affected entities
    should make available adequate funds to cover these special needs.
    *Id.*

[^125]: *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Report and Order, 12 FCC Rcd 8776, 9035-36, para. 493 (1997);
    *see also*
    http://www.sl.universalservice.org/reference/obligation.asp.

[^126]: http://www.sl.universalservice.org/reference/freeservices.asp
    (the "Free Service Advisory" notes that requests that do not account
    for free services will result in a denial and may result in criminal
    penalties).

[^127]: *Schools and Libraries Universal Service Support Mechanism*, CC
    Docket No. 02-6, Third Report and Order and Second Further Notice of
    Proposed Rulemaking, 18 FCC Rcd 26912, 26929, para. 41 (2003)
    ("*Schools and Libraries Third Report and Order"*).

[^128]: 47 C.F.R. § 54.506(c).

[^129]: *Id*. Certain basic maintenance costs that are "necessary to the
    operation of the internal connections network" are eligible for
    Priority Two support. *See Schools and Libraries Third Report and
    Order*, 18 FCC Rcd at 26921-22, paras. 22-23. Basic maintenance
    services are "necessary" if, but for the maintenance at issue, the
    connection would not function and serve its intended purpose with
    the degree of reliability ordinarily provided in the marketplace to
    entities receiving such services without e-rate discounts. *Id.*
    Basic maintenance services do not include services that maintain
    equipment that is not supported or that enhance the utility of
    equipment beyond the transport of information, or diagnostic
    services in excess of those necessary to maintain the equipment's
    ability to transport information. On-site technical support is not
    necessary to the operation of the internal connection network when
    off-site technical support can provide basic maintenance on an
    as-needed basis. Services such as 24-hour network monitoring and
    management also do not constitute basic maintenance. Such services
    are therefore ineligible for discounts under the schools and
    libraries universal service mechanism. *Id.*

[^130]: *See also supra* at paras. 6-7.

[^131]: 47 C.F.R. § 54.504(f).

[^132]: We are waiving section 54.504(f)(i) of the Commission's rules,
    but not other aspects of this rule. The applicant still has a duty
    to: ensure that the substitution does not violate any contract
    provisions or state or local procurement laws; ensure that the
    substitution does not result in an increase in the percentage of
    ineligible services or functions; and certify that the requested
    change is within the scope of the relevant Form 470. We also note
    that this waiver is not automatic; it still depends on the applicant
    making a request to the Administrator.

[^133]: *See* "*Teachers Look to Panhandle for New Jobs*," *Pensacola
    News Journal*, Sept. 10, 2005 ("As of Friday, 4,548 students from
    schools damaged by the Aug. 29 hurricane had enrolled in Florida
    schools, the state Department of Education reported.")

[^134]: Although we will treat schools and libraries damaged by
    Hurricane Katrina at the highest level of priority, we do not
    believe it necessary to afford such treatment to schools and
    libraries handling evacuees. Instead, these entities may supplement
    their applications using their existing discount rates.

[^135]: A certification in a signed letter stating that services and
    products will be solely used to restore the network is sufficient to
    satisfy this requirement.

[^136]: *See* note 87, *supra*.

[^137]: We find that an increase of at least ten percent in the number
    of students or library patrons who are evacuees should generally be
    sufficient to demonstrate that schools or libraries have been
    substantially affected.

[^138]: *See* Rawson Letter.

[^139]: The counties in Texas are Bowie, Cass, Marion, Harrison,
    Jefferson, Newton, Orange, Panola, Shelby and Sabine. The counties
    in Arkansas are Chicot, Clay, Crittenden, Desha, Greene,
    Lee, Mississippi, and Phillips.

[^140]: *See* USA Today, Sept. 2, 2005, page 6A.

[^141]: *See Federal-State Joint Board on Universal Service,
    Multi-Association Group (MAG) Plan for Regulation of Interstate
    Services of Non-Price Cap Incumbent Local Exchange Carriers and
    Interexchange Carriers*, Fourteenth Report and Order, Twenty-Second
    Order on Reconsideration, and Further Notice of Proposed Rulemaking
    in CC Docket No. 96-45, and Report and Order in CC Docket No.
    00-256, 16 FCC Rcd 11244 (2001) ("*Rural Task Force Order*");
    *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Ninth Report and Order and Eighteenth Order on
    Reconsideration, 14 FCC Rcd 20432 (1999) ("*Ninth Report and
    Order*"), *remanded*, *Qwest Corp. v. FCC*, 258 F.3d 1191 (10^th^
    Cir. 2003) ("*Qwest"*); *Federal-State Joint Board on Universal
    Service*, CC Docket No. 96-45, Order on Remand, Further Notice of
    Proposed Rulemaking, and Memorandum Opinion and Order, 18 FCC Rcd
    22559 (2003), *remanded, Qwest Corp. v. FCC*, 398 F.3d 1222 (10^th^
    Cir. 2005); *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, 14 FCC Rcd
    20156 (1999) ("*Tenth Report and Order*"), *affirmed*, *Qwest*, 258
    F.3d 1191. We note that, under the existing rules and high-cost
    formulas, rural carriers may be able to recover additional costs
    caused by Hurricane Katrina through the normal operation of the
    Commission's rules.

[^142]: The nationwide cost benchmark currently is set at two standard
    deviations above the national average cost per line.

[^143]: Targeting support ensures that non-rural carriers serving the
    highest-cost wire centers in the state receive support. Targeting
    also determines the amount of per-line support available to
    competitive eligible telecommunications carriers serving high-cost
    wire centers. *See Ninth Report and Order*, 14 FCC Rcd at 20471,
    para. 70. BellSouth is projected to receive annually approximately
    \$99.6 million in Mississippi and \$25 million in Alabama in
    high-cost model support. *See* USAC Quarterly Administrative Filing
    2005, Fourth Quarter (4Q) Appendix, HC01, filed August 2, 2005, at
    <http://www.universalservice.org/overview/filings>. In addition
    BellSouth is projected to receive \$ 32.9 million in interstate
    access support in Alabama, Louisiana, and Mississippi. *Id.*

[^144]: 47 U.S.C. § 254(e).

[^145]: *Ninth Report and Order*, 14 FCC Rcd at 20482-83, paras. 95-96;
    *Rural Task Force Order*, 16 FCC Rcd at 11317-18, para. 187. *See
    also* *Federal-State Joint Board on Universal Service*, CC Docket
    No. 96-45, Report and Order, 12 FCC Rcd 8776, 8877, paras. 46-51
    (1997) (subsequent history omitted) (finding that, beyond the
    statutory language, no guidelines were necessary to interpret
    section 254(e)'s requirement that a carrier that receives universal
    service support shall only use that support for the facilities and
    services for which it is intended).

[^146]: *Ninth Report and Order*, 14 FCC Rcd at 20482-83, paras. 95-96
    (noting that states could, among other things, use federal support
    to lower intrastate rates or to require carriers to upgrade
    facilities in rural areas).

[^147]: 47 C.F.R. § 54.7. In the May 2001 *Rural Task Force Order*, the
    Commission declined to adopt the Rural Task Force's proposal to
    adopt specific rules that would allow rural carriers to request
    additional support to recover the costs of hurricanes, floods and
    other natural disasters. *See Rural Task Force Order*, 16 FCC Rcd at
    11296, para. 128 & n.332.

[^148]: We expect that this clarification will enable the rural and
    non-rural carriers operating throughout the disaster area to use
    their more than \$240 million in estimated annual high-cost support
    to assist in restoration efforts. This action does not modify or
    otherwise permit these carriers to use high-cost support disbursed
    to one state to meet the needs in another state.  

[^149]: We find that the damage inflicted by Hurricane Katrina is
    sufficient for a deviation from our general rule.

[^150]: We note that a signed letter containing this certification will
    suffice.

[^151]: *See, e.g.*, 47 C.F.R. § 54.707(a) (stating that carriers'
    "support for providing Lifeline shall be provided directly . . .
    based on the number of qualifying low-income consumers \[a carrier
    services\], under administrative procedures determined by the
    Administrator.").

[^152]: As noted above, we expect the Administrator will conduct audits
    or other reviews of beneficiaries and service providers obtaining a
    significant amount of this temporary support. Improperly used funds
    may be recovered.

[^153]: *See* Letter from Lisa M. Zaina, Chief Executive Officer, USAC
    to Chairman Kevin J. Martin, *et al*. (Sept. 21, 2005).

[^154]: *See* Rawson Letter.

[^155]: *See* *supra*, note 137 (defining eligibility for schools and
    libraries substantially affected by evacuees).

[^156]: We recently waived recordkeeping requirements to the extent such
    records were lost due to Hurricane Katrina and subsequent flooding.
    *See Schools and Libraries Universal Service Support Mechanism*, CC
    Docket No. 02-06, *Rural Health Care Support Mechanism*, WC Docket
    No. 02-60, *Lifeline and Link-Up*, WC Docket No. 03-109, and
    *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Order, DA 05-2484 (WCB rel. Sept. 21, 2005) at para. 3. We
    emphasize that our waiver of recordkeeping requirements in that
    Order does not alleviate universal service recipients'
    responsibility to continue to follow our recordkeeping requirements.

[^157]: *See* Rawson Letter.

[^158]: 47 C.F.R. § 1.1910.

[^159]: *See Comprehensive Review of Universal Service Fund Management,
    Administration, and Oversight*, WC Docket No. 05-195, Notice of
    Proposed Rulemaking and Further Notice of Proposed Rulemaking, 20
    FCC Rcd 11308 (2005).

[^160]: *See Schools and Libraries Universal Service Support Mechanism,*
    CC Docket No. 02-6, Fifth Report and Order and Order, 19 FCC Rcd
    15808, 15835, ¶ 80 (2004) ("*Schools and Libraries Fifth Report and
    Order*").

[^161]: *Schools and Libraries Fifth Report and Order*, 19 FCC Rcd at
    15815, 15835, paras. 20, 80.

[^162]: *See* 5 U.S.C. § 553(d)(3).

[^163]: *See* 5 U.S.C. § 500 *et seq*.

[^164]: 5 U.S.C. §§ 553(b)(3)(B) (allowing for implementation without
    notice and comment or publication in the Federal Register if good
    cause exists); 553(d)(3) (allowing for effective date to occur prior
    to 30 days after publication for good cause).

[^165]: *See* 47 C.F.R. §§ 1.103(a), 1.427(b).