**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matters of                | * | CC Docket No. 96-45          |
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| Federal-State Joint Board on     | ) |                              |
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| Universal Service;               | * |                              |
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| Promoting Deployment and         | * |                              |
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| Western Wireless Corporation,    | ) |                              |
| Crow Reservation in Montana      | * |                              |
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| Cheyenne River Sioux Tribe       | * |                              |
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| Western Wireless Corporation,    | * |                              |
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| Atlantic Mobile, Inc.            | ) |                              |
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+----------------------------------+---+------------------------------+

**TWELFTH REPORT AND ORDER,**

**MEMORANDUM OPINION AND ORDER, and**

**FURTHER NOTICE OF PROPOSED RULEMAKING**

**Adopted:** June 8, 2000 **Released:** June 30, 2000

**Comments Due:** August 7, 2000

**Reply Comments Due:** August 28, 2000

By the Commission: Commissioners Ness and Tristani issuing separate
statements; Commissioner Powell approving in part, dissenting in part,
and issuing a statement.

**TABLE OF CONTENTS**

Paragraph Number

I. INTRODUCTION 1

II\. EXECUTIVE SUMMARY 12

III\. low-income INITIATIVES to improve access to TELECOMMUNICATIONS
services and subscribership on tribal lands 13

A. Overview 13

B. Definitions of "Indian Tribe" and "Tribal Lands" 15

1\. Background 15

2\. Discussion 16

C. Bases for Commission Action to Increase Subscribership on Tribal
Lands 20

1\. Authority to Take Action to Improve Access to Telecommunications
Services and Subscribership on Tribal Lands 20

2\. Subscribership Levels on Tribal Lands 24

D. Enhanced Federal Lifeline and Expanded Link Up Support for Qualifying
Low-Income Consumers Living on Tribal Lands 36

1\. Background 36

2\. Discussion 42

a\. Enhanced Lifeline Support for Qualifying Low-Income Consumers Living
on Tribal Lands 42

b\. Expanded Link Up 59

c\. Implementation Issues Associated with Rule Changes to Provide
Enhanced Lifeline Support and Expanded Link Up Support to Low-Income
Consumers on Tribal Lands 64

d\. Expanded Lifeline and Link Up Qualification Criteria for Low-Income
Consumers on Tribal Lands 67

E. Requiring Eligible Telecommunications Carriers to Publicize the
Availability of Lifeline and Link Up Support 75

1\. Background 75

2\. Discussion 76

F. Lifeline Jurisdictional Issues 81

1\. Background 81

2\. Discussion 85

IV\. designating eligible telecommunications carriers pursuant to
section 214(e)(6) 92

A. Overview 92

B. Background 97

1\. The Act 97

2*.* *Further Notice* 101

C. Discussion 104

1\. Scope of Section 214(e)(6) 104

2\. Section 214(e)(6) Designation Process for Carriers Serving
Non-Tribal Lands 112

3\. Section 214(e)(6) Designation Process for Carriers Serving Tribal
Lands 115

D. Pending Requests For Designation Pursuant To Section 214(e)(6) 128

1\. Cellco Petition For Designation As An Eligible Telecommunications
Carrier For Maryland and Delaware 128

2\. Western Wireless Petition For Designation As An Eligible
Telecommunications Carrier For Wyoming 135

3\. Western Wireless Petition To Be Designated As An Eligible
Telecommunications Carrier For The Crow Reservation In Montana 138

4\. Smith Bagley Petition To Be Designated As An Eligible
Telecommunications Carrier in Arizona and New Mexico 141

5\. Cheyenne River Sioux Tribe Telephone Authority Petition For
Designation As An Eligible Telecommunications Carrier 145

V. further notice of proposed rulemaking 151

VI\. procedural matters 154

A. paperwork reduction Act 154

B. Final Regulatory Flexibility Analysis 155

1\. Need for and Objectives of this Report and Order and the Rules
Adopted Herein 156

2\. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA 157

3\. Description and Estimate of the Number of Small Entities To Which
Rules Will Apply 158

4\. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements 179

5\. Steps Taken to Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered 182

6\. Report to Congress. 184

C Effective Date of Final Rules 185

D. Initial Regulatory Flexibility Analysis 186

1\. Need for and Objectives of the Proposed Rules 187

2\. Legal Basis 188

3\. Description and Estimate of the Number of Small Entities To Which
Rules Will Apply 189

4\. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements 210

5\. Steps Taken to Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered 211

6\. Federal Rules that May Duplicate, Overlap, or Conflict with the
Proposed Rules. 212

E. Comment Dates and Filing Procedures 213

VII\. ordering clauses 217

#  {#section .unnumbered}

# introduction

1.  In this Order, we adopt measures to: (1) promote telecommunications
    subscribership and infrastructure deployment within American Indian
    and Alaska Native tribal communities;[^1] (2) establish a framework
    for the resolution of eligible telecommunications carrier
    designation requests under section 214(e)(6)[^2] of the
    Communications Act of 1934, as amended (the Act);[^3] and (3) apply
    the framework to pending petitions for designation as eligible
    telecommunications carriers filed by Cellco Partnership d/b/a Bell
    Atlantic Mobile, Inc., Western Wireless Corporation, Smith Bagley,
    Inc., and the Cheyenne River Sioux Tribe Telephone Authority.

2.  An important goal of the Telecommunications Act of 1996 is to
    preserve and advance universal service. The 1996 Act provides that
    "\[c\]onsumers in all regions of the Nation, including low-income
    consumers and those in rural, insular, and high\[-\]cost areas,
    should have access to telecommunications and information
    services...."[^4] In the *Further Notice* of this proceeding, we
    sought to identify the impediments to increased telecommunications
    deployment and subscribership in unserved and underserved regions of
    our Nation, including tribal lands and insular areas, and proposed
    particular changes to our universal service rules to overcome these
    impediments.[^5] Although approximately 94 percent of all households
    in the United States have telephone service today, penetration
    levels among particular areas and populations are significantly
    below the national average.[^6] For example, only 76.7 percent of
    rural households earning less than \$5,000 have a telephone,[^7] and
    only 47 percent of Indian tribal households on reservations and
    other tribal lands have a telephone.[^8] These statistics
    demonstrate, most notably, that existing universal service support
    mechanisms are not adequate to sustain telephone subscribership on
    tribal lands.

3.  Central to the issues addressed in the *Further Notice* is the
    notion that basic telecommunications services are a fundamental
    necessity in modern society.[^9] As our society increasingly relies
    on telecommunications technology for employment and access to public
    services, such telecommunications services have become a practical
    necessity. The absence of telecommunications services within a home
    places its occupants at a disadvantage when seeking to contact, or
    be contacted by, employers and potential employers. The inability to
    contact police, fire departments, and medical service providers in
    an emergency situation may have, and in some areas routinely does
    have, life-threatening consequences.[^10] In geographically remote
    areas, access to telecommunications services can minimize health and
    safety risks associated with geographic isolation by providing
    people access to critical information and services they may need.
    Basic telecommunications services also may provide a source of
    access to more advanced services. For example, voice telephone is
    currently the most common means of household access to the Internet,
    and the same copper loop used to provide ordinary voice telephone
    service also may be used for broadband services.[^11] Thus, as use
    of advanced services among the general population increases, those
    without basic telecommunications services may find themselves
    falling further behind in a number of ways.[^12] In its *Falling
    Through the Net* report, the U.S. Department of Commerce's National
    Telecommunications and Information Administration (NTIA) found that,
    while "\[o\]verall . . . the number of Americans connected to the
    nation's information infrastructure is soaring," the benefits of
    even basic telecommunications services have not reached certain
    segments of our population.[^13]

4.  This Order, along with a companion Report and Order and Further
    Notice of Proposed Rulemaking[^14] and Policy Statement[^15] that we
    adopt, represents the culmination of an ongoing examination of the
    issues involved in providing access to telephone service for Indians
    on reservations. This process began when the Commission convened two
    meetings in April and July of 1998, which brought Indian tribal
    leaders and senior representatives from other federal agencies to
    the Commission to meet with FCC Commissioners and Commission
    staff.[^16] The Commission then organized formal field hearings in
    January 1999 at the Indian Pueblo Cultural Center in Albuquerque,
    New Mexico, and in March 1999 at the Gila River Indian Community in
    Chandler, Arizona, at which Indian tribal leaders,
    telecommunications service providers, local public officials, and
    consumer advocates testified on numerous issues, including
    subscribership levels and the cost of delivering telecommunications
    services to Indians on tribal lands, as well as jurisdictional and
    sovereignty issues associated with the provision of
    telecommunications services on tribal lands.[^17] Based on
    information and analysis provided during these proceedings, the
    Commission initiated two rulemakings: one proposing changes to our
    universal service rules to promote deployment of telecommunications
    infrastructure and subscribership on tribal lands,[^18] and the
    other proposing changes to our wireless service rules to encourage
    the deployment of wireless service on tribal lands.[^19]

5.  In this Order, we take the first in a series of steps to address the
    causes of low subscribership within certain segments of our
    population. The extent to which telephone penetration levels fall
    below the national average on tribal lands underscores the need for
    immediate Commission action to promote the deployment of
    telecommunications facilities in tribal areas and to provide the
    support necessary to increase subscribership in these areas. We
    adopt measures at this time to promote telecommunications deployment
    and subscribership for the benefit of those living on
    federally-recognized American Indian and Alaska Native tribal
    lands,[^20] based on the fact that American Indian and Alaska Native
    communities, on average, have the lowest reported telephone
    subscribership levels in the country. Toward this end, we adopt
    amendments to our universal service rules and provide additional,
    targeted support under the Commission's low-income programs to
    create financial incentives for eligible telecommunications carriers
    to serve, and deploy telecommunications facilities in, areas that
    previously may have been regarded as high risk and unprofitable. By
    enhancing tribal communities' access to telecommunications services,
    the measures we adopt are consistent with our obligations under the
    historic federal trust relationship between the federal government
    and federally-recognized Indian tribes to encourage tribal
    sovereignty and self-governance. Specifically, by enhancing tribal
    communities' access to telecommunications, including access to
    interexchange services, advanced telecommunications, and information
    services, we increase their access to education, commerce,
    government, and public services. Furthermore, by helping to bridge
    the physical distances between low-income consumers on tribal lands
    and the emergency, medical, employment, and other services that they
    may need, our actions ensure a standard of livability for tribal
    communities. To ensure their effectiveness in addressing the low
    subscribership levels on tribal lands, we intend to monitor the
    impact of the enhanced federal support measures and to adjust the
    measures as appropriate.

6.  In response to the requests of Indian tribal leaders, we have
    adopted a statement of policy that recognizes the principles of
    tribal sovereignty and self-government inherent in the relationships
    between federally-recognized Indian tribes and the federal
    government.[^21] In conjunction with our efforts to adopt policies
    that further tribal sovereignty and tribal self-determination, we
    note the Commission's upcoming Indian Telecom Training Initiative,
    in which the Commission will bring together experts on
    telecommunications law and technologies to provide information to
    tribal leaders and other interested parties to promote
    telecommunications deployment and subscribership on tribal
    lands.[^22]

7.  In this Order, we also offer guidance on those circumstances in
    which the Commission will exercise its authority to designate
    eligible telecommunications carriers under section 214(e)(6) of the
    Act.[^23] We conclude that, consistent with the Act and the
    legislative history of section 214(e), state commissions have the
    primary responsibility for the designation of eligible
    telecommunications carriers under section 214(e)(2). We direct
    carriers seeking designation as an eligible telecommunications
    carrier for service provided on non-tribal lands to first consult
    with the state commission, even if the carrier asserts that the
    state commission lacks jurisdiction. We will act on a section
    214(e)(6) designation request from a carrier providing service on
    non-tribal lands only in those situations where the carrier can
    provide the Commission with an affirmative statement from the state
    commission or a court of competent jurisdiction that the carrier is
    not subject to the state commission's jurisdiction.

8.  We recognize, however, that a determination as to whether a state
    commission lacks jurisdiction over carriers serving tribal lands
    involves a legally complex and fact-specific inquiry, informed by
    principles of tribal sovereignty, treaties, federal Indian law, and
    state law. Such jurisdictional ambiguities may unnecessarily delay
    the designation of carriers on tribal lands. In light of the unique
    federal trust relationship between the federal government and Indian
    tribes and the low subscribership levels on tribal lands, we
    establish a framework designed to streamline the eligibility
    designation of carriers providing service on tribal lands.[^24]
    Under this framework, carriers seeking a designation of eligibility
    for service provided on tribal lands may petition the Commission for
    designation under section 214(e)(6). The Commission will proceed to
    a determination on the merits of such a petition if the Commission
    determines that the carrier is not subject to the jurisdiction of a
    state commission. We apply the framework adopted in this Order to
    several pending requests for eligible telecommunications carrier
    designation on tribal and non-tribal lands.

9.  We also recognize that excessive delay in the designation of
    competing providers may hinder the development of competition and
    the availability of service in many high-cost areas. We therefore
    commit to resolve requests for designation for the provision of
    service on non-tribal lands that are properly before us pursuant to
    section 214(e)(6) within six months of the date of filing.
    Similarly, we commit to resolve the merits of a request for
    designation for the provision of service on tribal lands within six
    months of our determination that the carrier is not subject to the
    jurisdiction of a state commission. We encourage state commissions
    to act accordingly, and resolve designation requests filed pursuant
    to section 214(e)(2) within six months.

10. Finally, in the attached Further Notice of Proposed Rulemaking, we
    seek comment on the adoption of a rule that would require
    designation requests filed under section 214(e), either with this
    Commission or a state commission, to be resolved within six months
    of the filing date, or some shorter period. We also seek comment on
    alternative methods by which state commissions, tribal authorities,
    and this Commission can work together to further facilitate the
    expeditious resolution of designation requests from carriers serving
    tribal lands.

11. The Commission will take action in a further proceeding to address
    the remaining issues raised in the *Further Notice* that are not
    addressed in this Order. In particular, we will continue to examine
    and address the causes of low subscribership in other areas and
    among other populations, especially among low-income individuals in
    rural and insular areas. In addition, in areas where the cost to
    deploy telecommunications facilities is significantly above the
    national average, we anticipate that additional action may be
    necessary to encourage such deployment. Providing appropriate
    incentives for the deployment of facilities in such locations will
    be central to the issues that we will address, in consultation with
    the Federal-State Joint Board on Universal Service (Joint Board) in
    our consideration of rules to implement section 214(e)(3) of the Act
    and in considering the recommendations of the Joint Board for
    high-cost universal service reform for rural carriers.

# EXECUTIVE SUMMARY

12. In this Order, we adopt measures to:

-   Provide up to \$25 per month in additional federal Lifeline
    Assistance (Lifeline) support to eligible telecommunications
    carriers serving qualifying low-income individuals living on
    American Indian and Alaska Native lands in order to substantially
    reduce the cost of basic telephone service for such individuals;

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-   Provide up to \$70 per consumer in additional federal Lifeline
    Connection Assistance (Link Up) support to eligible
    telecommunications carriers initiating service to qualifying
    low-income individuals living on American Indian and Alaska Native
    lands to offset initial connection charges and line extension costs
    associated with the initiation of service on behalf of those
    individuals;

-   Broaden our Lifeline and Link Up consumer qualification criteria for
    low-income consumers on tribal lands to include income-dependent
    eligibility criteria employed in means-tested programs in which such
    individuals may be more likely to participate and therefore are more
    suitable income proxies for such individuals. These include the
    Bureau of Indian Affairs (BIA) general assistance program,
    tribally-administered Temporary Assistance for Needy Families, Head
    Start (only for those meeting its income-qualifying standard), and
    the National School Lunch Program's free lunch program;

-   Require eligible telecommunications carriers to publicize the
    availability of Lifeline and Link Up support in a manner reasonably
    designed to reach those likely to qualify for those discounts;

-   Permit eligible telecommunications carriers that are not subject to
    rate regulation by a state commission to receive the \$1.75 of
    second-tier Lifeline support without state commission approval;

-   Permit tribal authorities and eligible telecommunications carriers
    that are not subject to rate regulation by a state commission to
    provide the local matching funds necessary to receive third-tier
    federal Lifeline support;

-   Establish a framework for the resolution of eligible
    telecommunications carrier designation requests under section
    214(e)(6) of the Act; and

-   Apply the framework adopted in this Order to pending section
    214(e)(6) petitions for designation as eligible telecommunications
    carriers filed by Cellco, Western Wireless, Smith Bagley, Inc., and
    the Cheyenne River Sioux Tribe Telephone Authority.

# low-income INITIATIVES to improve access to TELECOMMUNICATIONS services and subscribership on tribal lands

## Overview

13. In this section, we adopt several revisions to our universal service
    rules designed to increase access to telecommunications services and
    subscribership among low-income individuals living on American
    Indian and Alaska Native lands (referred to hereinafter as "tribal
    lands").[^25] Specifically, we create a fourth tier of federal
    Lifeline support available to eligible telecommunications carriers
    serving qualifying low-income individuals living on tribal lands
    consisting of up to an additional \$25 per month, per primary
    residential connection for each such qualifying individual. This
    amount, in conjunction with the current first-tier baseline (which
    may increase to as much as \$4.35 on July 1, 2000)[^26] and \$1.75
    second-tier "non-matching" federal support amounts, will entitle
    each qualifying low-income consumer on tribal lands to a reduction
    in its basic local service bill of up to \$31.10 per month. In
    addition, we revise our rules governing the Link Up program to
    provide up to \$100 of federal support to reduce the cost of both
    initial connection charges and line extension charges of qualifying
    low-income individuals living on tribal lands. To ensure their
    effectiveness in addressing the low subscribership levels on tribal
    lands, we intend to monitor the impact of the enhanced federal
    support measures and to adjust the measures as appropriate.

14. We also broaden our federal consumer qualification default criteria
    to enable low-income individuals on tribal lands to qualify for
    Lifeline and Link Up services by certifying their participation in
    certain additional means-tested assistance programs. Based on the
    widespread lack of awareness of the Lifeline and Link Up programs
    among low-income subscribers, and within tribal communities in
    particular, we require *all* eligible telecommunications carriers to
    publicize the availability of Lifeline and Link Up services in a
    manner reasonably designed to reach those likely to qualify for
    these services. Finally, we modify our Lifeline rules to permit
    eligible telecommunications carriers that are not subject to rate
    regulation by a state commission to (1) receive second-tier federal
    Lifeline support without state commission approval and (2) provide
    the local matching funds necessary to receive third-tier federal
    Lifeline support.

## Definitions of "Indian Tribe" and "Tribal Lands"

### Background

15. The *Further Notice* referred to the definition of the term "Indian
    tribe" that is codified in the Federally Recognized Indian Tribe
    List Act of 1994.[^27] Under that definition, the term "Indian
    tribe" includes "any Indian or Alaska Native tribe, band, pueblo,
    village or community that the Secretary of the Interior acknowledges
    to exist as an Indian tribe."[^28] For purposes of identifying those
    geographic areas for which the Commission might consider
    modifications to its rules to provide targeted assistance to Indians
    or Indian tribes, the *Further Notice* sought comment on how the
    Commission should define the term "tribal lands."[^29]

### Discussion

16. For purposes of this Order, we define the terms "Indian tribe,"
    "reservation," and "near reservation" as those terms are defined in
    Subpart A of the regulations promulgated by the United States
    Department of the Interior's Bureau of Indian Affairs (BIA).[^30] In
    light of our decision below to adopt rules to benefit low-income
    individuals living on Indian tribal lands,[^31] we use, for purposes
    of this Order, the definition of "Indian tribe" contained in section
    20.1(p) of the BIA regulations.[^32] That definition includes "any
    Indian tribe, band, nation, rancheria, pueblo, colony, or community,
    including any Alaska Native village or regional or village
    corporation as defined in or established pursuant to the Alaska
    Native Claims Settlement Act (85 Stat. 688) which is federally
    recognized as eligible by the U.S. Government for the special
    programs and services provided by the Secretary \[of the Interior\]
    to Indians because of their status as Indians."[^33] Although there
    are minor variations between this definition and the statutory
    definition of "Indian tribe" in section 479a(2) and cited in the
    *Further Notice*, the characteristic common to both definitions that
    is relevant for our purposes is that both refer to the list of
    entities compiled and published by the Secretary of the
    Interior.[^34]

17. For purposes of identifying the geographic areas within which the
    rule amendments set forth below will apply, we define the term
    "tribal lands" to include the BIA definitions of "reservation" and
    "near reservation" contained in sections 20.1(v) and 20.1(r) of the
    BIA regulations, respectively.[^35] The term "reservation" means
    "any federally recognized Indian tribe's reservation, Pueblo, or
    Colony, including former reservations in Oklahoma, Alaska Native
    regions established pursuant to the Alaska Native Claims Settlement
    Act (85 Stat. 688), and Indian allotments."[^36] "Near reservation"
    means those areas or communities adjacent or contiguous to
    reservations that are designated as such by the Department of
    Interior's Commissioner of Indian Affairs, and whose designations
    are published in the Federal Register.[^37]

18. We define the term "tribal lands" to include the BIA definitions of
    "reservation" and "near reservation" because these definitions
    appear to encompass the geographic areas in which the Commission may
    adopt, consistent with principles of Indian sovereignty and the
    special trust relationship, rule changes to benefit members of
    federally-recognized Indian tribes. In particular, we agree with
    commenters who argue that Alaska Native Statistical Areas and other
    lands conveyed pursuant to the Alaska Native Claims Settlement Act,
    although not Indian reservations, should be included within the
    definition of tribal lands insofar as these lands are
    federally-recognized lands that are inhabited by Alaska Native
    tribes.[^38] The BIA definition of "near reservation" includes lands
    adjacent or contiguous to reservations that generally have been
    considered tribal lands for purposes of other federal programs
    targeted to federally-recognized Indian tribes. Again, we conclude
    that such lands properly should be included within our definition
    insofar as they are Indian lands on which principles of Indian
    sovereignty and the special trust relationship apply.[^39] To
    exclude the "near reservation" lands designated by the Department of
    the Interior or lands on which tribal members in Alaska live, in our
    view, would unfairly penalize tribal members who live in tribal
    communities, but for historic or other reasons, do not live on an
    Indian reservation.

19. We believe that using the BIA regulations to define and identify the
    geographic areas to which our rule amendments will apply offers
    significant advantages in the ease of its administration.
    Specifically, the BIA definitions of "reservation" and "near
    reservation"[^40] provide a widely used and readily verifiable
    standard by which tribes may establish and carriers may verify the
    eligibility of individuals who qualify for the targeted assistance
    made available by this Order.[^41] We note that the classification
    "on or near a reservation" is used by BIA in administration of its
    financial assistance and social services programs for Indian
    tribes.[^42] If BIA or Congress should modify these definitions in
    the future, we intend such modifications to apply in equal measure
    to the classifications adopted in this Order without further action
    on our part. We believe that this action is consistent with our goal
    of using a widely used and readily verifiable standard for defining
    these terms.

## Bases for Commission Action to Increase Subscribership on Tribal Lands 

### Authority to Take Action to Improve Access to Telecommunications Services and Subscribership on Tribal Lands

20. Section 254(b) of the Act sets forth the principles that guide the
    Commission in establishing policies for the preservation and
    advancement of universal service.[^43] Included among these is the
    principle that "quality services should be available at just,
    reasonable, and affordable rates."[^44] Our authority to take action
    to remedy the disproportionately lower levels of infrastructure
    deployment and subscribership prevalent among tribal communities
    derives from sections 1, 4(i), 201, 205, as well as 254 of the Act.
    [^45] As discussed more fully below, the record before us suggests
    that the disproportionately lower-than-average subscribership levels
    on tribal lands are largely due to the lack of access to and/or
    affordability of telecommunications services in these areas (as
    compared with cultural or individual preferences that cause
    individuals to choose not to subscribe). Along with depressed
    economic conditions and low per capita incomes,[^46] commenters have
    identified the following factors as the primary impediments to
    subscribership on tribal lands: (1) the cost of basic service in
    certain areas (as high as \$38 per month in some areas);[^47] (2)
    the cost of intrastate toll service (limited local calling
    areas);[^48] (3) inadequate telecommunications infrastructure and
    the cost of line extensions and facilities deployment in remote,
    sparsely populated areas;[^49] and (4) the lack of competitive
    service providers offering alternative technologies.[^50] We note
    that no tribal representative in this proceeding has suggested that
    cultural or personal preference accounts for low subscribership
    levels within or among particular tribes. Based on the substantial
    Indian tribal participation in this proceeding and in the
    Commission's proceedings in WT Docket No. 99-266 and BO Docket No.
    99-11, we do not have any evidence to conclude that cultural or
    personal factors generally explain low subscribership levels on
    tribal lands.[^51]

21. We conclude that the unavailability or unaffordability of
    telecommunications service on tribal lands is at odds with our
    statutory goal of ensuring access to such services to "\[c\]onsumers
    in all regions of the Nation, including low-income consumers."[^52]
    In addition, the lack of access to affordable telecommunications
    services on tribal lands is inconsistent with our statutory
    directive "to make available, so far as possible, to all the people
    of the United States, without discrimination on the basis of race,
    color, religion, national origin, or sex, a rapid, efficient
    Nationwide . . . wire and radio communication service, with adequate
    facilities at reasonable charges."[^53] In the *Universal Service
    Order*, the Commission stated that, where "necessary and
    appropriate," the Commission, working with an affected state or U.S.
    territory or possession, will open an inquiry to address instances
    of low or declining subscribership levels and take such action as is
    necessary to fulfill the requirements of section 254.[^54]

22. Our authority to alter our rules in ways targeted to benefit tribal
    communities also must be informed by the principles of federal
    Indian law that arise from the unique trust relationship between the
    federal government and Indian tribes. That relationship has been
    characterized as "unlike that of any other two people in existence,"
    and "marked by peculiar and cardinal distinctions which exist no
    where else."[^55] The Supreme Court has repeatedly "recognized the
    distinctive obligation of trust incumbent upon the \[Federal\]
    Government" in its dealings with Indian tribes.[^56] Moreover,
    Congress and the courts have recognized the federal government's
    responsibility to promote self-government among tribal communities
    as an important facet of the federal trust relationship.[^57] In
    *Morton v. Mancari*, for example, the Supreme Court upheld a federal
    regulation establishing a hiring preference for members of Indian
    tribes as consistent with the goal of promoting Indian
    self-government.[^58] In that case, the Court noted that "literally
    every piece of legislation dealing with Indian tribes and
    reservations. . . singles out for special treatment a constituency
    of tribal Indians living on or near reservations."[^59]

23. By enhancing tribal communities' access to telecommunications
    services, the measures we adopt today are consistent with our
    federal trust responsibility to encourage tribal sovereignty and
    self-governance.[^60] Specifically, by enhancing tribal communities'
    access to telecommunications, including access to interexchange
    services, advanced telecommunications, and information services, we
    increase tribal communities' access to education, commerce,
    government, and public services.[^61] Furthermore, by helping to
    bridge physical distances between low-income individuals living on
    tribal lands and the emergency, medical, employment, and other
    services that they may need, our actions further our federal trust
    responsibility to ensure a standard of livability for members of
    Indian tribes on tribal lands.[^62]

### Subscribership Levels on Tribal Lands 

24. Section 254(i) of the Act requires that the Commission and the
    states ensure that universal service is available at rates that are
    just, reasonable, and affordable.[^63] In the *Universal Service
    Order*, the Commission adopted the finding of the Joint Board that
    subscribership levels provide relevant information regarding whether
    consumers have the means to subscribe to universal service and,
    thus, represent an important tool in evaluating the affordability of
    rates.[^64] The Commission found that subscribership levels alone,
    however, do not reveal whether consumers are spending a
    disproportionate amount of income on telecommunications services or
    whether paying the rates charged for services imposes a hardship for
    those who subscribe.[^65] The Commission concurred in the
    recommendation of the Joint Board that a determination of
    affordability take into consideration both rate levels and non-rate
    factors, such as consumer income levels, that can be used to assess
    the financial burden subscribing to universal service places on
    consumers.[^66] The Commission also adopted the Joint Board's
    finding that the scope of a local calling area "directly and
    significantly impacts affordability" of universal service.[^67]

25. In the *Further Notice,* we expressed concern that, although
    approximately 94 percent of all households in the United States have
    telephone service today, penetration levels among particular areas
    and populations are significantly below the national average.[^68]
    To better understand the dimensions of the problem of low
    subscribership in particular areas, we sought information on
    subscribership levels and impediments to subscribership generally
    and on tribal lands in particular.[^69] The *Further Notice* defined
    the term "penetration rate" (or subscribership level) to mean "the
    percentage of households within a specified area that have telephone
    service in the housing unit."[^70] We also asked commenters to
    provide information pertaining to the total population, population
    density, average annual income, and average unemployment rate for
    each area within which penetration rates were measured. The *Further
    Notice* noted the Commission's particular concern that Indians
    living on reservations, whose nationwide subscribership level is
    only 46.6 percent,[^71] have less access to telecommunications
    services than other Americans.[^72] In the *Further Notice*, we
    sought comment on issues that may be affecting the availability of
    universal service in tribal communities and on possible
    modifications to the federal universal service support mechanisms
    that may be necessary to promote deployment and subscribership in
    these areas.[^73]

26. Consistent with our statutory goal of preserving and advancing
    universal service and of ensuring that consumers in all regions of
    the Nation have access to the services supported by federal
    universal service support mechanisms,[^74] we modify our universal
    service rules, as set forth below,[^75] to increase
    telecommunications infrastructure deployment and subscribership on
    tribal lands. We take action at this time primarily for the benefit
    of low-income individuals living on tribal lands, as that term is
    defined above,[^76] because of the critically low telephone
    subscribership levels that are reported in these areas.
    Specifically, statistics demonstrate that, although approximately 94
    percent of all Americans have a telephone,[^77] only 47 percent of
    Indians on reservations and other tribal lands have a
    telephone.[^78] Similarly, an analysis of 1990 Census data found
    that Indians represent 89 percent of the Nation's population in the
    one hundred zip codes with the lowest subscribership levels.[^79]
    More recent studies of subscribership levels for individual tribes
    suggest that subscribership levels for many tribes remain
    significantly below the national average.[^80]

27. Consistent with recent research that demonstrates that telephone
    penetration correlates directly with income,[^81] federal statistics
    reveal that tribal communities are among the poorest populations in
    the United States. For example, according to 1990 data published by
    the Bureau of the Census, the per capita income of Native Americans
    living on tribal lands was only \$4,478, as compared with the
    \$14,420 per capita income in the United States as a whole.[^82] At
    the time of the 1990 Census data collection, almost 51 percent of
    American Indians residing on reservations and trust lands had
    incomes below the poverty level,[^83] compared to 13 percent of
    United States residents nationwide with incomes below this
    level.[^84] Unemployment levels for a sample of 48 tribes averaged
    42 percent as compared to the national unemployment figure of 4.5
    percent.[^85] The record before us suggests that there is a
    correlation between low subscribership levels and low incomes on
    tribal lands.[^86] Indeed, the majority of commenters identify low
    incomes or impoverishment as the key reason for low subscribership
    levels on tribal lands.[^87]

28. Based on our review of these statistics and the record before us,
    and consistent with the unique trust relationship between the
    federal government and members of Indian tribes, we conclude that
    specific action is needed to address the impediments to
    subscribership on tribal lands and to ensure affordable access to
    telecommunications services in these areas. Specifically, the
    significantly lower-than-average incomes and subscribership levels
    of members of federally-recognized Indian tribes warrant our
    immediate action to increase subscribership and improve access to
    telecommunications on tribal lands.

29. We conclude that the potential benefits to tribal members will only
    increase by extending to non-Indians living on tribal lands, as well
    as Indians, the measures we adopt in Section III.D. of this Order.
    First, we believe that, by increasing the total number of
    individuals, both Indian and non-Indian, who are connected to the
    network within a tribal community the value of the network for
    tribal members in that community is greatly enhanced. Implicit in
    our decision to extend the availability of enhanced federal support
    to all low-income individuals living on tribal lands, is our
    recognition of the likelihood that non-Indian, low-income households
    on tribal lands may face the same or similar economic and geographic
    barriers as those faced by low-income Indian households.[^88]

30. Second, we believe that increasing the total number of individuals,
    both Indian and non-Indian, who are connected to the network within
    a tribal community will result in greater incentives for eligible
    telecommunications carriers to serve in those areas. We anticipate
    that the availability of enhanced federal support for all low-income
    individuals living on tribal lands will maximize the number of
    subscribers in such a community who can afford service and,
    therefore, make it a more attractive community for carrier
    investment and deployment of telecommunications infrastructure. As
    the number of potential subscribers grows in tribal communities,
    carriers may achieve greater economies of scale and scope when
    deploying facilities and providing service within a particular
    community.

31. Finally, we believe that, by extending the availability of enhanced
    federal support to all low-income individuals residing on tribal
    lands, carriers will avoid the administrative burden associated with
    distinguishing between low-income individuals who are members of
    federally-recognized tribes living on tribal lands and all other
    low-income individuals living on tribal lands.[^89] By reducing the
    possible administrative burdens associated with implementation of
    the enhanced federal support, we intend to eliminate a potential
    disincentive to providing service on tribal lands.

32. At this time, we do not adopt commenters' suggestions to apply the
    actions taken in this Order more generally to all high-cost areas
    and all insular areas.[^90] Although the record demonstrates that
    subscribership levels are below the national average in low-income,
    rural areas and in certain insular areas,[^91] the significant
    degree to which subscribership levels fall below the national
    average among tribal communities underscores the need for immediate
    Commission intervention for the benefit of this population. The
    record before us does not permit a determination that the factors
    causing low subscribership on tribal lands are the same factors
    causing low subscribership among other populations. Indeed, the
    presence of certain additional factors on tribal lands that may not
    be present in non-tribal areas, and which appear to create
    disincentives for carriers to provide service in these areas,
    suggests that the identical strategy adopted in this Order to boost
    subscribership levels on tribal lands may not be appropriate for
    increasing subscribership in other areas. Specifically, the
    following combination of factors may increase the cost of entry and
    reduce the profitability of providing service on tribal lands: (1)
    the lack of basic infrastructure in many tribal
    communities;[^92] (2) a high concentration of low-income individuals
    with few business subscribers; (3) cultural and language barriers
    where carriers serving a tribal community may lack familiarity with
    the Native language and customs of that community;[^93] (4) the
    process of obtaining access to rights-of-way on tribal lands where
    tribal authorities control such access;[^94] and (5) jurisdictional
    issues that may arise where there are questions concerning whether a
    state may assert jurisdiction over the provision of
    telecommunications services on tribal lands.[^95]

33. We are concerned that to devise a remedy addressing all low
    subscribership issues for all unserved or underserved populations
    simultaneously might unnecessarily delay action on behalf of those
    who are least served, *i.e.*, tribal communities. We do not believe
    that we should delay action to benefit those who, based on national
    statistics and the record before us, comprise the most underserved
    segment of our population. We will, however, continue to examine and
    address the causes of low subscribership in other areas and among
    other populations within the United States and, in conjunction with
    the release of the 2000 Census data, we will take action as
    appropriate at that time to address low subscribership among such
    other populations.[^96]

34. Several incumbent local exchange carriers serving tribal communities
    indicate that subscribership levels among tribal communities within
    their service territories are higher than the nationwide average
    penetration rate for Indians on reservations and other tribal
    lands.[^97] These comments do not lead us to alter our conclusion
    that Commission action is warranted to improve subscribership levels
    for low-income individuals on tribal lands. As an initial matter, we
    recognize that penetration levels for particular tribal communities
    may exceed the 47 percent national average for Indians on tribal
    lands, just as certain tribes may be below the national average of
    47 percent. This fact, however, is not inconsistent with our
    decision to adopt measures to benefit tribal communities generally
    because we are targeting our actions to low-income individuals on
    tribal lands, who we anticipate will have the lowest subscribership
    levels in these areas. Specifically, because research indicates that
    there is a correlation between income and subscribership levels, we
    anticipate that our actions will benefit tribal communities whose
    subscribership levels, as a function of low average per capita
    incomes, are closer to, or less than, the 47 percent national
    average for Indians on reservations.

35. Although we recognize the achievements of rural carriers serving
    tribal lands in improving subscribership levels in these areas,[^98]
    the fact that carriers employ various methodologies when measuring
    subscribership levels within their service territories limits the
    utility of particular statistics beyond the specific service
    territories. For example, statistics that measure the number or
    percentage of homes passed within a carrier's total service
    territory on a reservation do not reveal the number or percentage of
    households that, notwithstanding the fact that facilities are
    present, do not subscribe because they cannot afford telephone
    service.[^99] Even where subscribership statistics measure the
    number or percentage of households within a carrier's territory that
    have telephone service, those statistics provide no measure of
    reservation households outside of the carrier's service territory
    that have access to facilities or take service.[^100] Therefore, we
    conclude that nationwide and regional statistics that measure actual
    subscribership throughout tribal areas provide a more complete
    picture than do statistics that measure only the number of homes
    passed within particular service territories.

##  {#section-1 .unnumbered}

## Enhanced Federal Lifeline and Expanded Link Up Support for Qualifying Low-Income Consumers Living on Tribal Lands

### Background

36. *[Lifeline]{.underline}.* The Commission's Lifeline support program
    was designed to increase subscribership by reducing qualifying
    low-income consumers' monthly basic local service charges.[^101] The
    Lifeline program provides three tiers of universal service support
    to eligible telecommunications carriers that offer Lifeline service.
    The support associated with each tier must be passed through by the
    carrier to each qualifying low-income customer by an equivalent
    reduction in the customer's monthly bill for telephone
    service.[^102] The first tier currently provides carriers with a
    baseline support amount of \$3.50 per month per Lifeline customer in
    the form of a waiver of the federal subscriber line charge, but this
    amount will increase to as much as \$4.35 on July 1, 2000.[^103] The
    second tier provides carriers with an additional \$1.75 per month
    per Lifeline customer if the relevant state commission approves an
    equivalent reduction in the amount paid by Lifeline customers in
    that state.[^104] Finally, the third tier provides carriers with
    federal matching funds of 50 percent of the amount of state-provided
    Lifeline support, up to a maximum of an additional \$1.75 per month
    per Lifeline customer (50 percent of \$3.50), assuming that the
    entire amount is passed on to the carrier's Lifeline
    customers.[^105] Although federal Lifeline support under the
    existing Lifeline program may not exceed \$7.85 per month as of July
    1, 2000 under the Commission's rules, in a state that provides
    \$3.50 of support per month, which is the level needed to generate
    the full federal matching amount, a carrier currently may receive a
    total of \$11.35 per month per Lifeline customer in combined federal
    and state support.[^106]

37. In the *Further* *Notice*, we sought comment on whether federal
    universal service support mechanisms should provide additional
    support for low-income consumers living on tribal lands.[^107] In
    recognition of the fact that local calling areas for wireline
    carriers are established by the states, we sought comment on what
    role, if any, the Commission is authorized to and should play in
    seeking to address impediments caused by limited local calling
    areas. The options proposed for addressing the issue of limited
    local calling areas within tribal communities included the provision
    of federal universal service support for: (1) intrastate toll
    calling; (2) calls outside of the local calling area that fall
    within specified federally-designated support areas; and (3) a
    foreign exchange line service from the remote or tribal area to the
    nearest metropolitan area or community of interest. Finally, we
    sought comment on whether the provision of service by terrestrial
    wireless or satellite providers would alleviate problems associated
    with limited local calling areas.

38. *[Link Up]{.underline}.* The Commission's Link Up program helps
    qualifying low-income consumers initiate telephone service by paying
    half of the first \$60 of service connection charges for a
    subscriber's primary residential connection.[^108] When a carrier
    offers eligible low-income customers a deferred payment plan for
    connection charges, carriers may receive reimbursement of up to
    \$200 under the Link Up program for waiving interest on the deferred
    charges.[^109]

39. In the *Further Notice*, we sought comment on whether increasing
    federal support to offset initial service connection charges may be
    necessary to increase subscribership on tribal lands.[^110] We also
    sought comment on whether to use federal support to address the
    problem of low subscribership in underserved or unserved areas
    caused by prohibitively high costs associated with line extension or
    facilities construction and the inability of low-income residents to
    obtain telecommunications service because they cannot afford to pay
    the required line extension or construction costs. We sought comment
    on alternative options for addressing prohibitively expensive line
    extension costs. Specifically, we asked whether the provision of
    telecommunications service to remote areas using terrestrial
    wireless or satellite technologies might allow service at lower cost
    compared to the cost of line extensions or construction of wireline
    facilities, and how various proposals would avoid encouraging
    uneconomic investments in relatively high-cost technologies.

40. *[Consumer Eligibility under Lifeline and Link Up
    Programs]{.underline}*. In the *Universal Service Order*, the
    Commission adopted the Joint Board's recommendation to maintain the
    basic framework for administering the Lifeline program that existed
    prior to adoption of the *Universal Service Order*, under which a
    state providing intrastate matching funds under the Lifeline program
    established the qualification criteria governing customer
    participation in that state.[^111] Thus, section 54.409(a) of our
    rules provides that, in states that provide intrastate matching
    funds, a consumer must meet the criteria established by the state
    commission to receive federal Lifeline support.[^112] The Commission
    adopted the Joint Board's additional recommendation, however, to
    require states to base such Lifeline criteria "solely on income or
    factors directly related to income" in order to increase the
    availability of Lifeline support to all low-income consumers. We
    took this action in recognition of the fact that some states limited
    Lifeline support availability to certain low-income consumers, such
    as the elderly, or did not participate in the program.

41. For states that do not provide intrastate matching Lifeline funds,
    the Commission adopted the Joint Board's recommendation to establish
    federal default consumer qualification criteria.[^113] Specifically,
    section 54.409(b) of our rules provides that, in states that do not
    provide state matching funds (and thus do not establish the consumer
    qualifications for Lifeline participation), a consumer seeking
    Lifeline support must certify his or her participation in one of the
    following Commission-designated low-income assistance programs:
    Medicaid; food stamps; Supplemental Security Income; federal public
    housing assistance; or Low-Income Home Energy Assistance
    Program.[^114] Section 54.415 incorporates the identical framework
    for purposes of establishing a consumer's eligibility under the
    Commission's Link Up program.[^115]

### Discussion

#### Enhanced Lifeline Support for Qualifying Low-Income Consumers Living on Tribal Lands

42. In this Order, we create a fourth tier of federal Lifeline support
    available to eligible telecommunications carriers serving qualifying
    low-income individuals living on tribal lands. This fourth tier of
    federal Lifeline support will consist of up to an additional \$25
    per month, per primary residential connection for each qualifying
    low-income individual living on tribal lands. This amount, in
    conjunction with the first-tier baseline (ranging from \$3.50 to
    \$4.35 after July 1, 2000)[^116] and \$1.75 second-tier
    "non-matching" federal support amounts, will entitle each qualifying
    low-income consumer on tribal lands to a reduction in its basic
    local service bill of up to \$31.10 per month.[^117] In taking this
    action, we follow the example of states such as New York and require
    all qualifying low-income individuals on tribal lands to pay a
    minimum monthly Lifeline rate of \$1.[^118] As explained further
    below, this enhanced Lifeline support should substantially reduce
    the Lifeline rate (*i.e*., the monthly basic service rate) for all
    qualifying low-income consumers on tribal lands.

43. Consistent with the requirement of section 54.403(a) of our rules,
    we condition the receipt of this increased federal Lifeline support
    on carriers passing through the entire fourth-tier support amount to
    each qualifying low-income individual living on tribal lands by an
    equivalent reduction in the subscriber's monthly bill for local
    service.[^119] Specifically, we require each eligible
    telecommunications carrier to certify that it (1) will pass through
    the fourth-tier federal support amount to its qualifying low-income
    subscribers, and (2) has received the necessary approval of any
    non-federal regulatory authority authorized to regulate such
    carrier's rates that may be required to implement the required rate
    reduction. As discussed in greater detail below in Section
    III.D.2.c., an eligible telecommunications carrier seeking to
    receive reimbursement during the calendar year 2000 for enhanced
    Lifeline and Link Up services provided during the fourth quarter
    2000 must make these certifications in a letter filed with the
    universal service fund Administrator, the Universal Service
    Administrative Company (USAC), by September 1, 2000. All carriers
    seeking reimbursement for enhanced Lifeline or Link Up services must
    make these certifications in the FCC Form 497 (as revised).[^120]

44. Our primary goal, in taking this action, is to reduce the monthly
    cost of telecommunications services for qualifying low-income
    individuals on tribal lands, so as to encourage those without
    service to initiate service and better enable those currently
    subscribed to maintain service. In view of (1) the extraordinarily
    low average per capita and household incomes in tribal
    areas,[^121] (2) the excessive toll charges that many subscribers
    incur as a result of limited local calling areas on tribal
    lands,[^122] (3) the disproportionately low subscribership levels in
    tribal areas,[^123] and (4) the apparent limited awareness of, and
    participation in, the existing Lifeline program,[^124] we conclude
    that a substantial additional amount of support is needed to have an
    impact on subscribership. Our conclusion to provide up to an
    additional \$25 for all qualifying low-income individuals living on
    tribal lands is consistent with the actions of state commissions
    that have instituted substantial rate reductions for their
    low-income residents.[^125] In each of these cases, substantial
    additional state funds have been made available to promote
    subscribership among qualifying low-income consumers in those
    jurisdictions. Our determination is informed by the experience of
    these jurisdictions and the increased subscribership levels achieved
    following their implementation of substantial Lifeline rate
    reductions. For example, in the four years (1992-1996) immediately
    following the District of Columbia Public Service Commission's (D.C.
    Commission) adoption of a \$1 Lifeline rate for low-income residents
    65 years of age and older and a \$3 Lifeline rate for low-income
    residents under 65 years of age, the District of Columbia's overall
    subscribership levels increased by more than 4 percent, as compared
    with a nationwide increase of only 0.1 percent for the same time
    period.[^126] Similarly, while only 8,850 low-income individuals
    previously lacking telephone service initiated service in New York
    in the three years preceding the New York Public State Service
    Commission's adoption of a \$1 Lifeline rate, 171,536 low-income
    individuals initiated service in the three years following adoption
    of the \$1 Lifeline rate, an increase in new Lifeline subscribers of
    almost 2000 percent.[^127]

45. In adopting its \$1 Lifeline program for low-income citizens in the
    District of Columbia, the D.C. Commission determined that a
    substantial rate reduction, along with the removal of other
    regulatory restrictions, was needed to stimulate interest among the
    low-income population generally, given its history of low
    subscription and in light of the potential importance of phone
    service, particularly to elderly residents, as a "Lifeline."[^128]
    Subscribership levels on tribal lands, the multitude of obstacles to
    increasing subscribership on tribal lands, and the critical health
    and safety function of a telephone to persons in extremely remote
    locations suggest that tribal populations represent a similarly "at
    risk" population. Just as the D.C. Commission determined that an
    aggressive regulatory approach was needed to raise the visibility of
    Lifeline and stimulate interest on the part of residents there, we
    believe that a similarly aggressive, multi-faceted approach is
    needed to address the problem of low subscribership on tribal lands.

46. In combination with the "non-matching" federal first-tier Lifeline
    support of up to \$4.35 and second-tier support of \$1.75 per month
    per Lifeline customer, the additional \$25 in enhanced federal
    Lifeline support for qualifying low-income individuals living on
    tribal lands would reduce the cost of the most expensive basic
    service rates presented on the record (*e.g.*, \$38 per month in
    areas of Alaska and \$35 per month on the Wind River
    Reservation),[^129] to less than \$10 per month.[^130] The record
    before us indicates that basic local service rates for subscribers
    living on or near reservations range from \$5 to \$38 per month,
    with most subscribers receiving rates of less than \$20 per
    month.[^131] Thus, with the enhanced Lifeline support, low-income
    individuals on tribal lands whose local service rates are \$32.10 or
    less per month would pay a monthly local service rate of \$1.[^132]
    The enhanced support also would apply to any monthly mileage or
    zonal charges imposed as a condition for receiving basic local
    service. The enhanced support would not apply to state or federal
    taxes, state or federal universal service fees, or surcharges for
    911 service that may appear as line items on a subscriber's bill for
    local service. By substantially reducing the monthly service costs
    for all qualifying low-income individuals on tribal lands, we find
    that the additional targeted Lifeline support provided here should
    eliminate or diminish the effect of unaffordability for those
    low-income individuals for whom it may be difficult to maintain
    telephone service even where facilities are present.[^133]

47. By creating this enhanced Lifeline support, we have attempted to
    reduce to \$1 per month the basic service rate for the majority of
    income-eligible individuals residing on tribal lands. There are,
    however, some isolated instances where local telephone rates are
    high enough that, even with the enhanced Lifeline support, monthly
    service rates will be greater than \$1. In addition, there are a
    myriad of charges, which vary from state to state, that also affect
    customers' bills, such as taxes, surcharges, and mileage charges.
    So, while we have taken significant steps toward reducing the
    monthly local service rates for low-income individuals on tribal
    lands with this program, we cannot assure each eligible customer
    that his or her local service bill will be \$1 per month.

48. We have ample evidence that customer confusion and lack of awareness
    of Lifeline discounts have contributed to low subscribership levels
    on tribal lands.[^134] We encourage states to consider ways in which
    local charges may be simplified, particularly for low-income
    customers eligible to receive this enhanced Lifeline support, so as
    to make the Lifeline discounts easier to promote and explain to
    qualifying customers. We encourage the Joint Board to consider this
    issue in its review of Lifeline service for all low-income
    consumers.

49. In determining the appropriate level of enhanced Lifeline support
    for qualifying low-income individuals on tribal lands, we recognize
    that low-income individuals on tribal lands may spend a
    significantly greater percentage of their household income on local
    and toll services than do most other Americans as a result of the
    substantial toll charges they incur to place calls within their
    communities of interest. Based on data compiled by the Bureau of
    Labor Statistics, we observe that expenditures for residential local
    and toll telephone services comprise approximately two percent of
    the average U.S. household's annual expenditures.[^135] Assuming
    average local service charges of approximately \$20 per month[^136]
    and toll charges of as much as \$126 per month,[^137] a tribal
    member may spend as much as \$1,752 per year on local and long
    distance telephone service. Assuming an average household income of
    \$12,459 per year,[^138] a tribal household could spend
    approximately 14 percent of its annual income on telephone service.
    Given that an annual household income of \$12,459 is unlikely to
    result in any savings, we assume that all or most of this amount is
    dedicated to household expenditures.

50. Even if we were to use the lowest local service charge on the record
    of \$5 per month[^139] and assume intrastate toll charges of only
    \$42 per month (or one-third of the \$126 toll charge figure cited
    above), total telephone services, excluding taxes and other charges,
    would cost \$47 per month, or \$564 per year. A tribal household
    earning \$12,459 per year would spend, in this example,
    approximately 5 percent of its annual income on telephone service.
    Thus, in comparison to the two percent of household expenditures
    dedicated to telecommunications services in the average U.S.
    household, it appears that tribal members on average commit a
    substantially greater percentage of household resources to pay for
    the same services.

51. Finally, we are mindful that a low-income individual currently
    receiving and paying for service without enhanced support will, upon
    adoption of these rules, receive a discounted rate for the same
    service, when that individual arguably could continue to pay the
    current rate without any enhancement. Nonetheless, we believe that
    our decision is consistent with our responsibility to ensure that
    our actions do not expand the federal universal service support
    mechanisms beyond that required to achieve our statutory mandate to
    preserve and advance universal service. As we noted in the
    *Universal Service Order*, however, the fact that an individual is
    connected to the network does not, in itself, reveal whether that
    individual is spending a disproportionate amount of income on
    telecommunications services.[^140] We have carefully examined the
    facts before us and structured the enhanced Lifeline support in a
    manner that is precisely targeted to provide qualifying low-income
    individuals with access to telecommunications services and to
    increase subscribership on tribal lands. Given that: (1) tribal
    members appear to spend a significantly higher proportion of their
    incomes on telecommunications services than do other Americans; (2)
    low-income tribal members' services may be more likely to be
    disconnected;[^141] (3) beneficiaries of enhanced support must be
    income eligible; and (4) qualifying individuals can use only as much
    support as is needed to cover the cost of the individuals' basic
    service rate less \$1, we are persuaded that the level of support
    provided here does not exceed that required to preserve and advance
    universal service.

52. We also believe that our adoption of enhanced Lifeline support will
    encourage: (1) eligible telecommunications carriers to construct
    telecommunications facilities on tribal lands that currently lack
    such facilities; (2) new entrants offering alternative technologies
    to seek eligible telecommunications carrier status to serve tribal
    lands; and (3) tribes, eligible telecommunications carriers, and
    states to address impediments to increased penetration that are
    caused by limited local calling areas. We discuss each of these in
    greater detail below.

53. *[Infrastructure Development]{.underline}*. By providing carriers
    with a predictable and secure revenue source, the enhanced Lifeline
    support just discussed, in conjunction with the expanded support
    that we provide under the Link Up program,[^142] is designed to
    create incentives for eligible telecommunications carriers to deploy
    telecommunications facilities in areas that previously may have been
    regarded as high risk and unprofitable. We note that, unlike in
    urban areas where there may be a greater concentration of both
    residential and business customers, carriers may need additional
    incentives to serve tribal lands that, due to their extreme
    geographic remoteness, are sparsely populated and have few
    businesses. In addition, given that the financial resources
    available to many tribal communities may be insufficient to support
    the development of telecommunications infrastructure,[^143] we
    anticipate that the enhanced Lifeline and expanded Link Up support
    will encourage such development by carriers. In particular, the
    additional support may enhance the ability of eligible
    telecommunications carriers to attract financing to support
    facilities construction in unserved tribal areas. Similarly, it may
    encourage the deployment of such infrastructure by helping carriers
    to achieve economies of scale by aggregating demand for, and use of,
    a common telecommunications infrastructure by qualifying low-income
    individuals living on tribal lands.

54. The enhanced Lifeline and Link Up support adopted here also may help
    to foster principles of tribal sovereignty and tribal
    self-determination in two respects. First, the availability of
    enhanced federal support may provide additional incentives for
    tribes that wish to establish tribally-owned carriers to do so by
    diminishing the financial risk associated with providing service to
    low-income customers on tribal lands. Second, to the extent that
    tribal leaders can aggregate service requests of large numbers of
    qualifying individuals eligible for enhanced support, they may have
    more control in choosing the carriers serving their communities and
    increased bargaining power in their negotiations with carriers
    seeking to provide universal service on tribal lands.

55. To the extent that the cost to extend facilities, due to the
    geographic remoteness of a location or other geographic
    characteristics, is extraordinarily high,[^144] we recognize that
    the level of support provided here, in combination with existing
    levels of universal service high-cost support, may not always be
    sufficient to attract the necessary facilities investment.
    Accordingly, although we anticipate that the measures adopted in
    this Order will address a significant number of the obstacles to
    subscribership on tribal lands identified on the record before us,
    we anticipate that additional regulatory steps may be necessary to
    encourage the deployment of facilities in areas where the cost of
    deployment is extraordinarily high. We will address these issues, in
    consultation with the Joint Board, when we consider reform of the
    rural high cost mechanism, and implementation of section 214(e)(3)
    of the Act.[^145] For this reason, we do not adopt additional
    measures at this time to address the problem of inadequate
    facilities deployment in the most geographically remote tribal
    areas.[^146]

56. *[Competitive Service Providers]{.underline}.* By providing
    additional federal support targeted to low-income individuals on
    tribal lands, without regard to the specific technology used to
    provide the supported telecommunications services, we recognize that
    different technologies may offer solutions to address low
    subscribership levels on tribal lands. For example, commenters have
    suggested that wireless service may represent a cost-effective
    alternative to wireline service in sparsely populated, remote
    locations where the cost of line extensions is prohibitively
    expensive.[^147] Moreover, as we discuss further below, a wireless
    eligible telecommunications carrier service offering that features
    an expanded local calling area along with a predetermined number of
    calls or minutes of calling within a tribal member's community of
    interest, may represent a solution to the problem of limited local
    calling areas and excessive toll charges in tribal areas.[^148] The
    enhanced Lifeline support adopted in this Order is competitively
    neutral because any carrier, including a wireless carrier, that
    receives designation as an eligible telecommunications carrier and
    is permitted by tribal authorities to serve on tribal lands may
    provide enhanced Lifeline service to qualifying low-income
    individuals on tribal lands.[^149]

57. *[Limited Local Calling Areas]{.underline}*. As noted above, because
    the boundaries of local calling areas for wireline carriers are
    established by the states, we recognize that we do not have the
    authority to address the problem of limited local calling areas
    directly. We find, however, that the enhanced Lifeline support may
    help to alleviate the financial burden of the excessive toll charges
    that low-income individuals on tribal lands incur when their local
    calling area does not encompass their community of interest. First,
    the availability of enhanced Lifeline support, by reducing local
    service rates by as much as \$25 per month, effectively "frees up"
    money formerly dedicated to local service charges that a subscriber
    now may apply to the subscriber's toll charges. Second, the enhanced
    Lifeline support may spur competitive entry by non-wireline carriers
    whose calling plans offer an expanded local calling area. Finally,
    our decision to increase the level of Lifeline support to reduce
    basic local service rates for qualified, low-income individuals on
    tribal lands may encourage states to expand local calling areas for
    subscribers whose local calling area does not encompass their
    community of interest. Specifically, in instances where the entire
    federal Lifeline support amount (up to \$31.10 where no state
    matching funds are provided) is not needed to offset a subscriber's
    local service rate because the rate is less than this amount, the
    additional remaining support may provide states with incentives to
    examine and, where appropriate, expand local calling areas on tribal
    lands.[^150] By reducing the financial burden associated with
    excessive toll charges and by reducing the number of calls subject
    to toll charges, we conclude that the actions we take today will
    help low-income individuals on tribal lands to maintain their access
    to telephone service.

58. We decline at this time to adopt other proposals included in the
    *Further Notice* for offsetting the cost of intrastate toll service,
    based on our expectation that the measures adopted in this Order,
    although not providing support directly for intrastate toll charges,
    nevertheless will help to alleviate some of the burden associated
    with high intrastate toll charges on tribal lands.[^151] Because we
    find that the provision of federal support to offset the cost of
    intrastate toll service would expand upon the definition of
    supported services in section 254(c) of the Act, and would raise
    issues of competitive neutrality to the extent that interexchange
    carriers would not be eligible to receive such enhanced Lifeline
    support, we do not adopt our proposal to support intrastate toll
    service.[^152] We ask the Joint Board, in connection with its
    upcoming review of the definition of supported services, to issue a
    recommendation as to whether the Commission should include
    intrastate or interstate toll services or expanded area service
    within the list of supported services on tribal lands or in other
    areas.[^153] Finally, in recognition of the states' traditional
    jurisdiction and expertise in determining the appropriate size and
    scope of local calling areas, we concur in the view expressed by
    NTIA and other parties that counsel against our direct involvement
    in this area.[^154]

#### Expanded Link Up 

59. In this Order, we provide up to \$100 of federal support under the
    Link Up program to reduce the initial connection charges and line
    extension charges of qualifying low-income individuals on tribal
    lands. Thus, in addition to the currently available Link Up support
    amount, *i.e.*, half of the first \$60 of a qualifying subscriber's
    initial connection charges up to a maximum of \$30, we will provide
    up to an additional \$70 of federal Link Up support to cover 100
    percent of the remaining charges associated with initiating service
    between \$60 and \$130, for a total maximum support amount of \$100
    per qualifying low-income subscriber. Adoption of this measure will
    provide up to \$100 in federal Link Up support to qualifying
    low-income individuals on tribal lands with initial connection or
    line extension costs of \$130 or more. Based on information and
    comment on the record pertaining to the costs associated with
    initiating service in many tribal areas, we conclude that the
    existing \$30 maximum level of Link Up support is, in many cases,
    far short of the support amount needed to offset such charges.[^155]
    A recent study of American Indian and Alaska Native tribal
    communities on tribal lands found that average household telephone
    installation charges for responding tribes was \$78.[^156] We note
    that all parties who commented on the appropriate amount by which to
    increase the level of Link Up support recommend an increase in the
    maximum level of support to \$100[^157] and that no party opposes
    this amount or proposes an alternative amount.

60. As proposed in the *Further Notice*, we also expand the types of
    charges covered by the Link Up program to include any standard
    charges imposed on qualifying low-income individuals on tribal lands
    as a condition of initiating service, including both line extension
    and initial connection charges, up to the \$100 maximum.[^158]
    Although the Link Up program traditionally has operated only to
    reduce qualifying consumers' initial connection or initial
    installation charges (*e.g.*, switch activation fees),[^159] we
    conclude that the expanded Link Up support also should apply to
    reduce facilities-based charges associated with the extension of
    lines or construction of facilities needed to initiate service to a
    qualifying low-income individual on tribal lands.[^160] We take this
    action in recognition of the fact that many low-income individuals
    on tribal lands face as a result of their remote locations certain
    supplementary charges for the installation of new lines and the
    initiation of service, in addition to the typical switch activation
    fees.[^161] For example, on Pueblo Picuris, in New Mexico,
    qualifying low-income consumers are charged an initial connection
    charge of approximately \$130 per consumer and other consumers are
    charged approximately \$160 per consumer, \$113 of which represents
    a zonal charge to cover the cost of expanding the capacity of
    existing facilities located near that community.[^162] To the extent
    that parties have identified line extension and construction costs
    as obstacles to subscribership on tribal lands, this measure is
    designed to increase subscribership among qualifying low-income
    individuals by minimizing certain of these up-front costs.[^163] In
    addition, we conclude that several of the justifications supporting
    our adoption of enhanced Lifeline support also support our adoption
    of expanded Link Up support. Specifically, by adopting the expanded
    Link Up support, we intend to create incentives for (1) eligible
    telecommunications carriers to construct telecommunications
    facilities on tribal lands that currently lack such facilities;
    and (2) new entrants offering alternative technologies to seek
    eligible telecommunications carrier status to serve tribal
    lands.[^164]

61. We note that the expanded Link Up support for qualifying low-income
    individuals living on tribal lands is competitively neutral in that
    it will apply to any eligible telecommunications carrier's standard
    charges for initiating service to qualifying consumers on tribal
    lands. For example, the expanded Link Up support may be used to
    offset the charge associated with "activating service" for an
    eligible telecommunications carrier that offers satellite telephone
    service.[^165] We further note, however, that the expanded Link Up
    support cannot be applied to customer premises equipment, *i.e.*,
    equipment that falls on the customer side of the network interface
    device boundary between customer and network facilities.[^166] We
    adopt this limitation in light of the fact that the federal
    universal service support mechanisms generally support only the cost
    of facilities falling on the network side of the demarcation
    point[^167] and because the Commission's definition of supported
    services does not include customer premises equipment or inside
    wiring.[^168] Expanded Link Up support would be available for
    qualifying consumers on tribal lands to offset charges for
    facilities that are necessary to enable a non-wireline eligible
    telecommunications carrier to provide service to the demarcation
    point. For example, if the provision of a fixed wireless or
    satellite service required the installation of a receiver on the
    roof of a subscriber's premises to bring service to a demarcation
    point, *i.e.*, a network interface device, expanded Link Up support
    could be used to offset the cost of installing such facilities. To
    the extent that a non-wireline carrier can isolate costs associated
    with the portion of a handset that receives wireless signals, we
    conclude that those costs would be covered as costs on the network
    side of the network interface device.

62. With respect to GTE's concern that the use of expanded Link Up
    support to cover line extension costs may not provide sufficient
    funding,[^169] we note that, as discussed above, where the cost to
    extend facilities to a low-income individual's residence is
    extraordinarily high, additional regulatory action may be necessary
    to encourage the deployment of facilities in such areas.[^170] To
    the extent that extraordinarily high costs pose a barrier to service
    in certain tribal areas, we will examine those issues in a future
    order implementing section 214(e)(3) of the Act [^171] and in
    connection with our consideration of the Joint Board's
    recommendations regarding high-cost universal service reform for
    rural carriers. We likewise are not dissuaded by GTE's concern that
    the expanded Link Up support will encourage inefficient investment
    in telecommunications infrastructure.[^172] We do not anticipate
    that the expanded Link Up support will encourage inefficient
    investment in telecommunications infrastructure because: (1) support
    for line extension or other construction costs is capped at \$100
    per qualifying low-income individual on tribal lands; (2) the line
    extension or other construction costs in many tribal areas will
    exceed the maximum amount covered under the expanded Link Up
    support; and (3) carriers therefore may have to absorb certain costs
    in excess of the maximum expanded Link Up support amount in order to
    induce low-income individuals to initiate service,[^173]. Moreover,
    to the extent that a competitive eligible telecommunications carrier
    offering an alternative to wireline technology can extend service to
    a remote tribal area at a substantially lower cost than a wireline
    carrier, we believe that it is a more economically efficient use of
    federal universal service funds to create incentives, in the first
    instance, for the lower-cost provider to provide the service.[^174]

63. Our decision to apply the expanded Link Up support exclusively to
    low-income individuals living on tribal lands at this time and
    further examine whether to extend this approach to other unserved
    populations, is consistent with Bell Atlantic's suggestion that we
    adopt a means-tested approach to funding line extensions and, before
    adopting such an approach, resolve whether it should be applied to
    other unserved areas.[^175] With respect to Bell Atlantic's further
    suggestion that we resolve, prior to taking action, how much of an
    increase in expanded Link Up support is needed to have a significant
    impact on penetration, we note that the actions we take are
    necessarily based on our best estimates of how much support is
    needed to impact subscribership levels. We intend that the measures
    we adopt in this Order and their impact on subscribership levels
    will be subject to ongoing examination and possible refinement as
    may be appropriate.

#### Implementation Issues Associated with Rule Changes to Provide Enhanced Lifeline Support and Expanded Link Up Support to Low-Income Consumers on Tribal Lands

64. We anticipate that carriers may require additional time, beyond the
    effective date of this Order, to implement the tariff and billing
    system changes that may be necessary for eligible telecommunications
    carriers to offer the enhanced Lifeline and expanded Link Up
    services we adopt in this Order.[^176] Accordingly, we have
    determined to extend until October 1, 2000 the date by which
    eligible telecommunications carriers must comply with the new rule
    sections 54.403(a)(4) and 54.411(a)(3) adopted in this Order. An
    eligible telecommunications carrier serving tribal lands must make
    available, upon request by a qualifying low-income individual living
    on tribal lands, the enhanced Lifeline and Link Up services adopted
    in this Order by no later than October 1, 2000. Although we
    encourage eligible telecommunications carriers to implement the
    necessary changes and offer the expanded Lifeline and Link Up
    services prior to this date where possible, we believe that this
    date gives carriers sufficient time to comply with these rule
    amendments.[^177] Because we find significant public interest in not
    delaying the benefits of these rules beyond that required to enable
    carriers to comply with them without undue burden, we decline to
    extend the deadline for their implementation beyond October 1,
    2000.[^178]

65. In order to receive reimbursement during the calendar year 2000 for
    enhanced Lifeline and expanded Link Up services provided during the
    fourth quarter 2000, an eligible telecommunications carrier must
    submit to USAC by no later than September 1, 2000, a letter from a
    corporate officer of the carrier containing the following
    information and certifications: (1) an estimate of (a) the number of
    eligible low-income subscribers in each of the carrier's study areas
    that the carrier projects will receive non-enhanced federal Lifeline
    or Link Up discounts in the fourth quarter of 2000 (*i.e.*, number
    of eligible subscribers on non-tribal lands), and (b) the number of
    eligible low-income subscribers in each of the carrier's study areas
    that the carrier projects will receive enhanced Lifeline or expanded
    Link Up discounts in the fourth quarter of 2000 as a result of
    actions taken in this Order (*i.e.*, number of eligible subscribers
    on tribal lands); (2) a statement of the corporate officer that the
    estimates provided are based on the good-faith estimate of the
    corporate officer; (3) the carrier's monthly undiscounted service
    rates for subscribers eligible to receive enhanced Lifeline
    support; (4) the monthly amount of additional support for each
    low-income subscriber who the carrier projects will be eligible for
    enhanced Lifeline support; (5) the number of low-income individuals
    on tribal lands for whom the carrier expects to initiate service in
    the fourth quarter of 2000 and the number of other low-income
    individuals for whom the carrier expects to initiate service in the
    fourth quarter of 2000; (6) the amount charged to initiate service
    for low-income subscribers on tribal lands and the amount charged to
    initiate service for other low-income subscribers; (7) an estimate
    of total federal Lifeline and Link Up support that the carrier
    anticipates it will require in the fourth quarter of 2000; (8) a
    certification that the carrier will pass through all federal
    Lifeline support amounts to its qualifying low-income
    subscribers; (9) a certification that the carrier has received the
    necessary approval of any non-federal regulatory authority (*e.g.,*
    a state commission or tribal regulatory authority) that is
    authorized to regulate such carrier's rates that may be necessary to
    implement the required rate reduction; and (10) a certification that
    the carrier is publicizing the availability of Lifeline and Link Up
    services in a manner reasonably designed to reach those likely to
    qualify for these services.

66. We emphasize that all eligible telecommunications carriers,
    including those that do not submit to USAC by September 1, 2000 the
    letter described above, are required to make available the Lifeline
    and Link Up discounts adopted in this Order to all qualifying
    low-income consumers not later than October 1, 2000. We also remind
    all eligible telecommunications carriers that, as a condition for
    receiving federal Lifeline or Link Up support payments from USAC,
    they must submit to USAC at regular intervals an FCC Form 497.[^179]
    We direct the Common Carrier Bureau and USAC to revise the FCC Form
    497 Lifeline Worksheet as necessary to implement the decisions and
    rule changes adopted in this Order. We delegate to the Common
    Carrier Bureau the authority to modify the FCC Form 497, along with
    any other forms that may be required to implement the decisions in
    this Order.

#### Expanded Lifeline and Link Up Qualification Criteria for Low-Income Consumers on Tribal Lands

##### Background

67. In the *Further Notice*, we expressed concern that some state
    regulatory commissions and this Commission have adopted Lifeline and
    Link Up qualification criteria that may inadvertently exclude
    low-income consumers on tribal lands because the criteria do not
    include low-income assistance programs that are specifically
    targeted to Indians living on tribal lands.[^180] We asked whether
    we should amend our rules to allow low-income individuals on tribal
    lands to qualify for Lifeline and Link Up support by certifying
    their participation in alternative means tested assistance programs,
    such as programs administered by BIA or Indian Health
    Services.[^181] Finally, we sought comment on whether the Commission
    could apply any new qualification criteria specifically targeted to
    low-income Indians living on tribal lands both to states that do not
    provide matching funds and in states that do provide such
    funds.[^182]

##### Discussion

68. We amend section 54.409(b) of our rules to enable qualifying
    low-income individuals living on tribal lands within a state that
    *does not* provide intrastate matching funds under the Lifeline
    program (either for the benefit of the state's population generally
    or tribal members specifically), to qualify for Lifeline and Linkup
    support by certifying their participation in certain alternative
    means-tested assistance programs.[^183] Specifically, we expand the
    federal default qualification criteria for eligibility for Lifeline
    and Link Up assistance, as set forth in section 54.409(b), to permit
    low-income individuals living on tribal lands to establish their
    income eligibility by certifying their participation in one of the
    following federal assistance programs: (1) BIA general
    assistance;[^184] (2) Temporary Assistance for Needy Families (TANF)
    tribally-administered block grant program;[^185] (3) Head Start
    Programs (under income qualifying eligibility provision only);[^186]
    or (4) National School Lunch Program (free meals program
    only).[^187] Given that the household income thresholds for these
    newly added programs range from 100-130 percent of the federal
    poverty level or incorporate state-determined poverty
    thresholds,[^188] we conclude these income thresholds are consistent
    with those associated with the programs included in our current
    federal default list.[^189]

69. We take this action based on evidence on the record before us that
    the existing federal qualification criteria governing eligibility
    under the Commission's Lifeline and Link Up programs, to the extent
    that these criteria do not include low-income programs specifically
    targeted to Indians, serve as a barrier to participation in the
    Lifeline and Link Up programs by low-income members of Indian
    tribes.[^190] A low-income tribal member effectively may be excluded
    from participation in Lifeline and Link Up in instances where that
    individual receives assistance or benefits under a program other
    than one of the programs listed in section 54.409(b) of our rules.
    For example, a low-income tribal member who receives cash assistance
    benefits under the BIA general assistance program, but receives no
    assistance or benefits under any of the means-tested programs listed
    in section 54.409(b) of the Commission's rules, would not be
    eligible today to receive Lifeline and Link Up support by virtue of
    the individual's non-participation in any of the low-income programs
    listed under section 54.409(b). Accordingly, we have expanded the
    list of programs contained in section 54.409 to include means-tested
    programs in which, according to commenters, low-income tribal
    members are more likely to participate and, therefore, represent
    more suitable income proxies for low-income tribal members.[^191]

70. We also make available the expanded eligibility criteria enumerated
    above to all low-income individuals living on tribal lands. This
    action is consistent with our rationale discussed in Section III.C.
    above for extending the benefits of the enhanced Lifeline and
    expanded Link Up support to all qualifying low-income individuals on
    tribal lands, as opposed to limiting these benefits solely to
    qualifying low-income tribal members on tribal lands. We believe
    that, by increasing the total number of individuals, both Indian and
    non-Indian, who are connected to the network within a tribal
    community the value of the network for tribal members in that
    community is greatly enhanced. We also anticipate that reducing
    barriers to participation in the Commission's Lifeline and Link Up
    programs for all low-income individuals residing on tribal lands
    will help to increase the number of subscribers in a tribal
    community who can afford service and, thereby, provide greater
    incentive for carriers to invest and deploy telecommunications
    infrastructure on tribal lands. In addition, making the identical
    set of eligibility criteria available to all low-income individuals
    on tribal lands should make it administratively less burdensome for
    an eligible telecommunications carrier serving tribal lands to
    provide Lifeline and Link Up services in those areas. In particular,
    we believe that it will be less burdensome for a carrier to verify
    the income eligibility of all potential Lifeline and Link Up
    subscribers in a tribal area using the same set of eligibility
    criteria.

71. We decline to expand our federal default qualification criteria to
    include participation in services provided by the Indian Health
    Service of the U.S. Department of Health and Human Services given
    that such services are available to Indian tribal members generally,
    rather than exclusively to low-income tribal members, and therefore
    are inappropriate qualification criteria for our purposes.[^192] In
    addition to proposing the addition of certain of the means-tested
    programs that we adopt here, one commenter suggests that we include
    the Low Income Home Energy Assistance Program (LIHEAP), Aid to
    Families with Dependent Children (AFDC), and Tribal Work Experience
    Program (TWEP).[^193] We note that LIHEAP is included currently in
    the federal default qualification criteria listed in section
    54.409(b) of our rules. In light of our understanding that TANF has
    superseded the AFDC program, we do not include the AFDC program, but
    we do include the tribally-administered TANF block grant program. In
    addition, we do not include TWEP insofar as it appears that
    participation in BIA general assistance is a prerequisite to
    participation in TWEP and, given that our expanded default
    qualification criteria now include participation in the BIA general
    assistance program, TWEP participants need only certify their
    participation in the BIA general assistance program.[^194]

72. At this time, we also do not adopt a qualification procedure by
    which low-income individuals on tribal lands could establish their
    income eligibility by self-certifying that their income is below a
    particular level, such as that set by the Federal Poverty
    Guidelines, as one commenter has suggested.[^195] Because we
    believe, however, that this approach may reach more low-income
    consumers, including low-income tribal members, than the current
    method of conditioning eligibility on participation in particular
    low-income assistance programs, we will further examine, in
    consultation with the Joint Board, possible revisions to section
    54.409 of the Commission's rules to provide for self-certification
    based solely on income level.

73. For qualifying low-income individuals who live on tribal lands in
    states that *do* provide intrastate matching funds under the
    Lifeline program and therefore are subject to state-created
    eligibility criteria, we adopt the suggestion of the Wisconsin
    Public Service Commission and revise our eligibility guidelines
    under section 54.409(a).[^196] Specifically, in addition to
    establishing qualification criteria under section 54.409(a) that are
    based "solely on income or factors directly related to income," we
    conclude that a state containing any tribal lands, as defined in
    Section III.B. above, also must ensure that its qualification
    criteria are reasonably designed to apply to low-income tribal
    populations within that state. We conclude that this modification to
    section 54.409(a), as reflected in Appendix A of this Order, is
    preferable to an alternative approach under which we would require
    states to adopt the identical expanded qualification criteria as
    those adopted above for purposes of the federal default
    qualification criteria. Our decision today will give a state whose
    eligibility criteria inadvertently exclude low-income tribal
    populations impetus to take corrective action, while giving the
    state flexibility to adopt eligibility criteria best-suited to the
    tribal populations within that state. Consistent with the Joint
    Board's goal of increasing low-income subscribership and ensuring
    that the availability of Lifeline and Link Up is not limited to
    particular populations,[^197] we conclude that this approach will
    help to ensure that all qualifying residents on tribal lands will
    receive the intended benefits of the federal Lifeline and Link Up
    programs.

74. We will permit, however, a low-income individual who lives on tribal
    lands and who is excluded from participation in the Lifeline and
    Link Up programs because the individual is not enrolled in any of
    the programs listed in a state's qualification criteria to qualify
    for *federal* Lifeline and Link Up support by certifying his or her
    eligibility under one of the means-tested programs listed in section
    54.409, as revised herein. We conclude that this action is necessary
    to hasten the process of bringing telecommunications services to
    unserved and underserved tribal lands and in recognition of the time
    needed for states to revise their qualification criteria where those
    criteria limit participation in Lifeline and Link Up to individuals
    who receive benefits under one or more low-income assistance
    programs in which low-income tribal members typically do not
    participate. For example, in a state where Lifeline and Link Up
    eligibility hinges on enrollment in the Medicaid program, a
    low-income tribal member who receives health services through the
    Indian Health Services and does not participate in Medicaid would
    not be eligible for Lifeline and Link Up support (state or federal)
    in that state by virtue of that state's qualification
    criteria.[^198] This measure recognizes the unique barriers facing
    low-income tribal members living on tribal lands who may have been
    excluded inadvertently from participation in Lifeline and Link Up as
    a result of a state's qualification criteria. This action is
    consistent with the Commission's statement in the *Universal Service
    Order* that, where a state provides matching funds under the
    Lifeline program, the state's qualification criteria should
    apply.[^199] Conversely, if a low-income individual living on tribal
    lands is excluded from participation in the Lifeline and Link Up
    programs because that individual participates in none of the
    programs used as income proxies in a state's qualification criteria
    and such individual agrees to forgo state matching funds, then we
    find that the justification for applying state qualification
    criteria in that circumstance no longer applies.

## Requiring Eligible Telecommunications Carriers to Publicize the Availability of Lifeline and Link Up Support

### Background

75. Section 214(e)(1)(B) of the Act requires an eligible
    telecommunications carrier to "advertise the availability of" the
    services supported by federal universal service support mechanisms
    "and the charges therefor using media of general
    distribution."[^200] In the *Universal Service Order*, the
    Commission noted that "eligible telecommunications carriers will be
    required to advertise the availability of, and charges for, Lifeline
    pursuant to their obligations under section 214(e)(1)."[^201] In the
    *Further Notice,* we expressed the concern that, although the
    Commission's Lifeline and Link Up programs have been providing
    universal service support to qualifying low-income customers for
    more than a decade, carriers may have failed to publicize the
    programs in some areas, particularly on Indian reservations.[^202]
    We noted that, in markets where carriers find it unprofitable to
    provide service, carriers lack incentive to publicize the
    availability of Lifeline and Link Up services. Accordingly, we
    sought comment on whether the Commission should play a role in
    ensuring the wide dissemination of information on tribal lands, or
    in other low-income, underserved areas, about the availability of
    low-income support. We tentatively concluded that a lack of such
    information may contribute to the significantly low penetration
    levels on tribal lands.[^203] We sought comment on options to
    promote awareness of low-income support mechanisms on tribal lands
    and, in particular, on whether we should amend our rules[^204] to
    require all eligible telecommunications carriers to publicize the
    availability of the Lifeline and Link Up programs in a manner
    reasonably designed to reach those likely to qualify for these
    services*.*[^205]

### Discussion

76. In codifying section 214(e)(1)(B), Congress recognized that merely
    providing a service is not enough to ensure that the needed support
    is received. Rather, it imposed an obligation to advertise the
    availability of the supported services and the charges for those
    services. There is evidence in the record that the lack of
    information concerning the availability of Lifeline and Link Up
    services contributes to low penetration rates.[^206] We are
    concerned that eligible telecommunications carriers are not
    advertising the availability of Lifeline and Link Up services or, if
    they are, that such efforts are not reasonably designed to reach
    those likely to qualify for the service. Based on the apparent lack
    of awareness of the availability of Lifeline and Link Up services in
    many rural, low-income communities[^207] and to remove any confusion
    concerning eligible telecommunications carriers' obligation to
    publicize the availability of these services, we conclude that this
    obligation should be codified in our rules.

77. We recognize, as pointed out by United Utilities, Inc. (UUI), the
    limitations of traditional advertising media in promoting awareness
    of low-income support mechanisms within particular low-income
    populations. Specifically, UUI, a Native-owned eligible
    telecommunications carrier serving "predominantly Alaskan native
    villages," describes how it achieved significant increases in both
    penetration rates and Lifeline subscribership through an intensive
    outreach effort in 26 native villages.[^208] As part of its outreach
    effort, UUI waived "service order and hook-up fees," identified and
    contacted each household that did not have service, and often spoke
    in its customers' Native language to inform them of the Lifeline
    program and toll blocking. According to UUI, as a result of this
    effort, the household penetration level in these 26 villages
    increased by 4.9 percent, and Lifeline subscribership increased from
    395 to 1,263 subscribers. In its comments, UUI states that:

    \[R\]egional advertising media generate very limited results, as
    does the placing locally of posters. Placing ads in regional
    publications and placing posters can be ineffective when carriers do
    not make special efforts, as did UUI, to contact low income
    households in person, to speak to them in their own language, and to
    adequately explain the Lifeline program and toll blocking options.
    UUI would take the position that a lack of information
    [does]{.underline} ... contribute to the significantly low
    penetration rates on tribal lands.[^209]

    We commend these efforts and encourage other carriers to undertake
    similar efforts to comply with the rule amendments that we adopt in
    this Order.

78. We amend sections 54.405 and 54.411 of our rules, as reflected in
    Appendix A of this Order, to require eligible telecommunications
    carriers to publicize the availability of Lifeline and Link Up
    services in a manner reasonably designed to reach those likely to
    qualify for those services.[^210] We emphasize that these rule
    amendments shall apply to all eligible telecommunications carriers
    and not merely to those serving tribal lands. We take this action
    based on evidence in the record that the lack of awareness of the
    Lifeline and Link Up programs contributes to low penetration rates
    and to eliminate any confusion concerning eligible
    telecommunications carriers' obligation to publicize the
    availability of these services.

79. We recognize that a method that is reasonably designed to reach
    qualifying low-income subscribers in one location may not be
    effective in reaching qualifying low-income subscribers in another
    location. For that reason, we do not prescribe in this Order
    specific, uniform methods by which eligible telecommunications
    carriers must publicize the availability of Lifeline and Link Up
    support. We do, however, require an eligible telecommunications
    carrier to identify communities with the lowest subscribership
    levels within its service territory and make appropriate efforts to
    reach qualifying individuals within those communities. For example,
    we would expect a carrier to take into consideration the cultural
    and linguistic characteristics of low-income communities within its
    service territory as well as the efficacy of particular methods in
    reaching the greatest number of qualifying low-income individuals
    within those communities. In addition, we require an eligible
    telecommunications carrier to provide to qualifying low-income
    individuals, through whatever public awareness method it selects,
    consumer information on the availability of toll blocking and toll
    limitation services for the purpose of enabling the subscriber to
    control the amount of toll charges that he or she may incur.

80. If we determine that eligible telecommunications carriers are not
    adopting methods reasonably designed to reach qualifying low-income
    individuals, additional action may be needed to increase public
    awareness among such individuals. To that end, we may address in a
    Further Notice of Proposed Rulemaking more specific methods by which
    eligible telecommunications carriers must publicize the availability
    of Lifeline and Link Up services. Finally, we note that the
    Commission's upcoming Indian telecommunications training initiative
    will be devoted, in part, to familiarizing carriers and tribal
    representatives with the Lifeline and Link Up programs generally,
    and the changes made to those programs by this Order, in
    particular.[^211]

## Lifeline Jurisdictional Issues

### Background

81. *[State Approval Requirement for Second-Tier Support]{.underline}.*
    In the *Further Notice*, we noted that certain eligible
    telecommunications carriers not subject to the jurisdiction of a
    state commission had sought a waiver of the requirement of state
    commission consent prior to our making available the \$1.75 second
    tier of federal Lifeline support.[^212] We stated that, in adopting
    section 54.403(a), we did not intend to require carriers not subject
    to state commission jurisdiction to seek either state commission
    action or a Commission waiver in order to receive the additional
    \$1.75 of second-tier federal Lifeline support. Rather, the
    requirement of state consent prior to making available the second
    tier of federal Lifeline support was "intended to reflect deference
    to the states in such areas of traditional state expertise and
    authority."[^213] Accordingly, the *Further Notice* proposed to
    modify our rules to provide that an additional \$1.75 per qualifying
    low-income consumer will be available to an eligible
    telecommunications carrier where the additional support will result
    in an equivalent reduction in the monthly bill of each qualifying
    low-income consumer.[^214]

82. Following release of the *Further Notice*, the Commission's Common
    Carrier Bureau (Bureau) released the *Gila River Order* granting a
    temporary waiver of section 54.403(a) of our rules in response to
    the petition for waiver filed by several tribally-owned
    carriers.[^215] In that order, the Bureau found the petitioners
    eligible for second-tier federal Lifeline support on the condition
    that the carriers in question were not subject to the jurisdiction
    of a state commission "subject to future Commission action in the
    pending Unserved Areas proceeding."[^216] The Bureau noted that the
    tribal authorities in each case had approved, or were in the process
    of approving, the carriers' plans to pass on the \$1.75 per month in
    lower Lifeline rates. Because these tribal authorities represent the
    non-federal entities that could prevent petitioners from providing
    the additional \$1.75 per month discounts, their approval and the
    lack of any opposition to the petition convinced the Bureau that
    granting this waiver was in the public interest.

83. *[State Matching for Third-Tier Lifeline Support]{.underline}*. In
    the *Further Notice*, we sought comment on whether to modify section
    54.403(a) of our rules to provide that carriers serving tribal lands
    may receive the third tier of federal Lifeline support, a maximum of
    \$1.75 per month per qualifying low-income consumer, without any
    requirement that the state provide matching funds. [^217] We
    explained that, unlike in other areas, this federal support amount
    would not be contingent upon the state in which the tribal lands are
    located providing support. The *Further Notice* suggested that we
    would take this action "in light of \[the federal government's\]
    trust relationship with Indian tribes."[^218]

84. As noted previously, in the *Gila River Order*, the Bureau granted
    temporary waivers of section 54.403(a) of our rules in response to a
    petition for waiver filed by several tribally-owned carriers.[^219]
    In that order, the Bureau concluded, *inter alia*, that it would
    serve the public interest to grant, on a temporary basis, the
    petitioners' requests for waiver of the third-tier support matching
    requirement in section 54.403(a) of our rules. The Bureau found that
    a temporary waiver of the rule was further justified by the low
    penetration and income levels on reservations, the lack of any
    opposition to the petition, and the Commission's policy of fostering
    access to the public telephone network for those most in need.

### Discussion

85. *[State Approval Requirement for Second-Tier Support]{.underline}*.
    We modify section 54.403(a) of our rules to make second-tier federal
    Lifeline support available to an eligible telecommunications carrier
    that is not subject to state rate regulation on the condition that
    the carrier certifies that it: (1) will pass through the second-tier
    \$1.75 federal support amount to its qualifying low-income
    subscribers, and (2) has received the necessary approval of any
    non-federal regulatory authority that is authorized to regulate such
    carrier's rates that may be required to implement the required rate
    reduction (*e.g.,* a tribal regulatory authority).[^220] To the
    extent that an eligible telecommunications carrier is not subject to
    rate regulation by any non-federal regulatory authority, then the
    carrier need only certify for this purpose that it: (1) will pass
    through the second-tier \$1.75 federal support amount to its
    qualifying low-income subscribers, and (2) is not subject to rate
    regulation by any non-federal regulatory authority. As discussed in
    greater detail above in Section III.D.2.c., an eligible
    telecommunications carrier seeking to receive reimbursement during
    the calendar year 2000 for enhanced Lifeline and Link Up services
    provided during the fourth quarter 2000 must make these
    certifications in a letter filed with USAC by September 1, 2000. All
    carriers seeking reimbursement for enhanced Lifeline or Link Up
    services must make these certifications in the FCC Form 497 (as
    revised).[^221]

86. By eliminating the need for eligible telecommunications carriers not
    subject to state rate regulation to obtain state action or seek a
    Commission waiver in order to receive second-tier federal Lifeline
    support, this revision to section 54.403(a) of our rules ensures
    that no category of carriers is subjected to more burdensome
    administrative requirements than are imposed on all other eligible
    telecommunications carriers seeking second-tier federal Lifeline
    support.[^222] We conclude that this amendment maintains appropriate
    deference to tribal regulatory authorities because second-tier
    support will not be disbursed where a tribal regulatory authority
    that regulates the rates of an eligible telecommunications carrier
    does not permit an equivalent reduction in consumers' bills. In
    addition, by requiring eligible telecommunications carriers to
    certify that they are not subject to state rate regulation before we
    make available second-tier federal Lifeline support, this result is
    consistent with our overall deference to the states in areas of
    traditional state ratemaking.[^223]

87. *[Third-Tier Lifeline Support]{.underline}*. In light of our
    determination, as discussed in Section III.D.2. above, to provide
    enhanced federal Lifeline support of up to \$25 for low-income
    individuals living on tribal lands through the creation of a fourth
    tier of the Lifeline program, we do not adopt our proposal in the
    *Further Notice* to provide the third tier of federal Lifeline
    support to carriers serving tribal lands where no intrastate
    matching funds are provided. In granting a temporary waiver of the
    matching requirement for third-tier federal Lifeline support in the
    *Gila River Order*, the Bureau was aware that, absent a waiver, a
    tribal carrier not subject to the jurisdiction of a state
    commission, such as Gila River Telecommunications, Inc., could
    receive only first-tier Lifeline support in the amount of \$3.50 per
    qualifying low-income subscriber. Central to the Bureau's
    determination to grant a temporary waiver of the second-tier state
    approval requirement and the third-tier state matching requirement,
    was the recognition that, in light of the "low penetration and
    income levels on reservations," providing tribal carriers with only
    \$3.50 per qualifying low-income subscriber was inconsistent with
    the "Commission's policy of fostering access to the public telephone
    network for those most in need."[^224]

88. We note that, because we modify the state approval requirement of
    section 54.403(a) for the provision of second-tier Lifeline support
    and adopt enhanced Lifeline support for qualifying low-income
    individuals, eligible telecommunications carriers will be entitled
    to receive *non*matching federal support of up to \$31.10 per month,
    per qualifying low-income subscriber. We conclude that it is not
    necessary to waive the third-tier state matching requirement because
    we anticipate the enhanced Lifeline amount of \$31.10 per month per
    qualifying low income subscriber will constitute a sufficient level
    of support, even on tribal lands where no intrastate support is
    generated. We further believe that the enhanced Lifeline will
    increase qualifying low-income individuals' access to the public
    telephone network more effectively than would our proposal in the
    *Further Notice* to waive the third-tier matching requirement, which
    would yield a maximum additional level of support of only \$1.75 per
    qualifying subscriber. Given that all parties who commented on this
    issue supported our proposal to waive the third-tier state matching
    requirement in section 54.403(a) as a means to direct additional
    federal Lifeline support to low-income individuals on tribal lands,
    we conclude that our decision to accomplish this result through the
    creation of a fourth tier of the Lifeline program, in lieu of
    waiving the third-tier state matching requirement, is not
    inconsistent with the comments addressing this issue.[^225]

89. We revise section 54.403(a), however, to permit a carrier that is
    not subject to state rate regulation to satisfy the third-tier
    intrastate matching requirement of section 54.403(a) by generating
    its own matching funds, independently of the actions of the state in
    which it operates. Although we recognize that many tribes and tribal
    carriers may not have adequate resources to generate the matching
    funds necessary to receive third-tier federal support, we find that
    the level of *non*matching federal Lifeline support that will be
    available for qualifying low-income individuals on tribal lands
    provides an adequate level of support. If a tribe or a carrier,
    including a wireless carrier, that is not subject to state rate
    regulation nevertheless wishes to provide matching funds in order to
    receive third-tier federal Lifeline support and reduce local rates
    further, we do not want to preclude such a result. Accordingly, we
    modify section 54.403(a) of our rules to provide third-tier federal
    Lifeline support, up to a maximum of \$1.75 per qualifying
    low-income customer as calculated in section 54.403(a), to an
    eligible telecommunications carrier that certifies that it: (1) is
    not subject to state rate regulation, and (2) will pass through the
    total amount of third-tier support (intrastate and federal) to its
    qualifying low-income subscribers by an equivalent reduction in
    those subscribers' monthly bill for local telephone service. As
    discussed in greater detail above in Section III.D.2.c., an eligible
    telecommunications carrier seeking to receive reimbursement during
    the calendar year 2000 for enhanced Lifeline and Link Up services
    provided during the fourth quarter 2000 must make these
    certifications in a letter filed with USAC by September 1, 2000. All
    carriers seeking reimbursement for enhanced Lifeline or Link Up
    services must make these certifications in the FCC Form 497 (as
    revised).[^226]

90. By maintaining the matching requirement of section 54.403(a) as a
    condition for receiving third-tier federal Lifeline support, we
    leave undisturbed a primary goal underlying the Commission's
    adoption of third-tier support, namely, the creation of an incentive
    for states (or tribal authorities, tribal carriers, or wireless
    carriers, as the case may be) to reduce local rates even further. In
    the *Universal Service Order*, the Commission determined that \$5.25
    represented a sufficient level of baseline federal Lifeline
    support.[^227] The Commission established the additional third tier
    of federal Lifeline support, which entitles an eligible
    telecommunications carrier to receive up to \$1.75 of federal
    Lifeline support per qualifying low-income consumer in a state that
    generates support from the intrastate jurisdiction, in order to
    preserve states' incentive to reduce local rates beyond that
    achieved under the first and second tiers of Lifeline support, as
    deemed appropriate by the state. Accordingly, a carrier that is not
    subject to state rate regulation, but that certifies that it will
    pass through to its qualifying low-income subscribers a rate
    reduction equivalent to both the intrastate and federal third-tier
    support amounts, will be entitled to receive third-tier federal
    Lifeline support. For the foregoing reasons, however, we maintain
    the matching requirement of section 54.403(a) as a condition for
    receiving third-tier federal Lifeline support.

91. *[Filing of Federal Lifeline Plan]{.underline}*. Finally, we observe
    that section 54.401(d) of the Commission's rules currently does not
    apply to an eligible telecommunications carrier that is not subject
    to the rate regulatory authority of a state commission. That section
    directs a state commission to file, or requires a state commission
    to direct an eligible telecommunications carrier to file, with USAC
    information demonstrating that the carrier's Lifeline plan meets the
    requirements of Subpart E of the Commission's rules. We amend
    section 54.401(d) to require eligible telecommunications carriers
    not subject to the rate regulatory authority of a state commission
    to file with USAC information demonstrating that the carrier's
    Lifeline plan meets the requirements of Subpart E of the
    Commission's rules.[^228]

# designating eligible telecommunications carriers pursuant to section 214(e)(6)

## Overview 

92. Section 254(e) of the Act provides that only an "eligible
    telecommunications carrier" as designated under section 214(e) shall
    be eligible to receive federal universal service support.[^229]
    Section 214(e)(2) directs the state commissions to perform the
    designation, and section 214(e)(6) directs the Commission to perform
    the designation in those instances where the state commission lacks
    jurisdiction to perform the designation. The statute does not
    address the issue of whether the state or the Commission makes the
    threshold determination of which governmental entity has
    jurisdiction to make the designation. In the sections that follow,
    we provide a roadmap detailing the procedures that carriers seeking
    eligible telecommunications carrier status should follow, and
    describe the circumstances in which the Commission will exercise its
    authority to designate eligible telecommunications carriers under
    section 214(e)(6).

93. We conclude that, consistent with the Act and the legislative
    history of section 214(e), state commissions have the primary
    responsibility for the designation of eligible telecommunications
    carriers under section 214(e)(2).[^230] Accordingly, we direct
    carriers seeking designation as eligible telecommunications carriers
    for service provided on non-tribal lands to consult with the state
    commission, even if the carrier asserts that the state commission
    lacks jurisdiction over the carrier. We will act on a section
    214(e)(6) designation request from a carrier providing service on
    non-tribal lands only in those situations where the carrier can
    provide the Commission with an affirmative statement from the state
    commission or a court of competent jurisdiction that the carrier is
    not subject to the state commission's jurisdiction.

94. We are concerned, however, that excessive delay in the designation
    of competing providers may hinder the development of competition and
    the availability of service in many high-cost areas. We therefore
    commit to resolve within six months of their filing at this
    Commission designation requests for services provided on non-tribal
    lands that are properly before us pursuant to section 214(e)(6). We
    also strongly encourage state commissions to resolve requests under
    section 214(e)(2) within the same time frame. In the attached
    Further Notice of Proposed Rulemaking, we seek comment on whether we
    should adopt a rule that would require all petitions for designation
    under section 214(e), whether filed with the state or this
    Commission, to be resolved within six months, or some shorter
    period.

95. With regard to tribal lands, however, we recognize that a
    determination as to whether a state commission lacks jurisdiction
    over carriers serving tribal lands involves a legally complex and
    fact-specific inquiry, informed by principles of tribal sovereignty,
    federal Indian law, treaties, as well as state law. Such
    jurisdictional ambiguities may unnecessarily delay the designation
    of carriers on tribal lands. In light of the unique federal trust
    relationship between the federal government and members of
    federally-recognized Indian tribes and the low penetration rates on
    tribal lands, we conclude that this Commission may make the
    threshold determination of which entity -- the state or this
    Commission -- has jurisdiction to make the eligibility designation
    of carriers providing service on tribal lands. Under this framework,
    carriers seeking a designation of eligibility for service provided
    on tribal lands may petition the Commission directly for designation
    under section 214(e)(6). A carrier seeking designation from this
    Commission for the provision of service on tribal lands must
    demonstrate, based upon a fact-specific showing, that the state
    commission does not have jurisdiction over the carrier seeking
    designation. The state commission will have an opportunity, during
    the notice and comment period, to respond to the assertion that it
    lacks jurisdiction. In the event the Commission determines that the
    state commission lacks jurisdiction to make the designation and the
    petition is properly before the Commission under section 214(e)(6),
    the Commission will decide the merits of the request within six
    months of release of an order resolving the jurisdictional issue.

96. As described more fully below, this streamlined framework respects
    the sovereignty of the tribes while providing the state commission
    the opportunity to establish the basis for its assertion of
    jurisdiction over the designation of a carrier providing universal
    service on tribal lands. In the attached Further Notice of Proposed
    Rulemaking, however, we seek comment on alternative measures that
    may be implemented to further facilitate the designation process for
    the provision of service on tribal lands. Specifically, we seek
    comment on ways in which the state commissions, tribal authorities,
    and this Commission can work together toward this end. Finally, we
    apply the framework we adopt in this Order to several pending
    requests for eligible telecommunications carrier designation on
    non-tribal and tribal lands.

##  Background

### The Act

97. Section 254(e) of the Act provides that "only an eligible
    telecommunications carrier designated under section 214(e) shall be
    eligible to receive specific Federal universal service
    support."[^231] Section 214(e)(1) requires that a carrier designated
    as an eligible telecommunications carrier must:

    \(A\) offer the services that are supported by Federal universal
    service support mechanisms under section 254(c), either using its
    own facilities or a combination of its own facilities and resale of
    another carrier's services (including the services offered by
    another eligible telecommunications carrier); and

    \(B\) advertise the availability of such services and the charges
    therefor using media of general distribution.[^232]

98. Section 214(e)(2) directs state commissions to designate as eligible
    telecommunications carriers those common carriers that meet the
    requirements of section 214(e)(1) for a service area designated by
    the state commission.[^233] When first passed into law in 1996,
    however, section 214(e) did not include a provision for designating
    carriers that were not subject to the jurisdiction of a state
    commission. Thus, common carriers not subject to state commission
    jurisdiction, "most notably, some carriers owned or controlled by
    native Americans," were unable to be designated as eligible
    telecommunications carriers.[^234] As a result, these carriers would
    have become ineligible for universal service support as of January
    1, 1998, when the eligibility requirements of the Act became
    effective.[^235] In 1997, Congress amended the Act with the addition
    of section 214(e)(6) to correct this "oversight."[^236]

99. Section 214(e)(6) authorizes the Commission, upon request, to
    designate as an eligible telecommunications carrier "a common
    carrier providing telephone exchange service and exchange access
    that is not subject to the jurisdiction of a State
    commission."[^237] Under section 214(e)(6), the Commission may, with
    respect to an area served by a rural telephone company, and shall,
    in all other cases, designate more than one common carrier as an
    eligible telecommunications carrier for a designated service area,
    so long as the requesting carrier meets the requirements of section
    214(e)(1).[^238] This designation must be made consistent with the
    public interest, convenience, and necessity. On December 29, 1997,
    the Commission released a Public Notice establishing the procedures
    that carriers must use when seeking Commission designation as an
    eligible telecommunications carrier pursuant to section
    214(e)(6).[^239]

100. Soon after the adoption of section 214(e)(6), the Common Carrier
     Bureau designated as eligible telecommunications carriers several
     tribally-owned carriers providing service on their respective
     tribal lands within the state of Arizona.[^240] As a result of
     these designations, these carriers continued to be eligible to
     receive federal universal service support and no local rate
     increases were necessary to replace support for which they
     otherwise might have become ineligible. The Bureau made these
     designations based on the carriers' representations that they were
     not subject to state commission jurisdiction, and the absence of
     any evidence to the contrary.

### *Further Notice* 

101. In the *Further Notice*, we tentatively concluded that, by adding
     section 214(e)(6), Congress sought to ensure that carriers serving
     all regions of the United States have access to a mechanism that
     will allow them to be designated as eligible telecommunications
     carriers, if they meet the statutory requirements.[^241] We stated
     that, "\[r\]ecognizing that the designation of eligible
     telecommunications carriers is primarily a state commission
     function, Congress granted this Commission the authority for this
     task in the event that a carrier is not subject to the jurisdiction
     of a state commission."[^242] To that end, we sought comment on how
     section 214(e)(6) should be interpreted and implemented to
     determine whether a carrier is subject to the jurisdiction of a
     state commission.[^243] We opined that the statutory language of
     section 214(e)(6) is ambiguous with respect to when the
     Commission's authority to designate an eligible telecommunications
     carrier is triggered.[^244] We tentatively concluded that the
     determination whether a carrier is subject to the jurisdiction of a
     state commission may depend on the nature of the service provided
     (*e.g.*, wireline, satellite, or wireless) or the geographic area
     in which the service is provided (*e.g.*, tribal land).[^245]

102. Against the backdrop of this tentative conclusion, and out for
     respect for tribal sovereignty, we sought comment on the extent of
     state commission jurisdiction over tribally-owned and
     non-tribally-owned carriers providing service on tribal lands. We
     noted that, with regard to tribally-owned carriers providing
     service on tribal lands, state law is generally inapplicable when
     state commissions attempt to regulate the conduct of tribal members
     directly within the reservation boundaries, except in "exceptional
     circumstances."[^246] We also noted that, with regard to a state
     commission's authority to regulate a non-tribal carrier seeking to
     provide service on tribal lands, the appropriateness of the state
     commission's exercise of authority turns on a balancing of federal
     and tribal interests against the interest of the state. This
     analysis must be made in light of traditional notions of Indian
     sovereignty and the congressional goal of Indian self-government,
     including its "overriding goal of encouraging tribal
     self-sufficiency and economic development."[^247] We recognized
     that this inquiry is a particularized one, and thus, specific to
     each state and the circumstances surrounding the provision of
     telecommunications services by non-tribal members within those
     tribal lands.[^248] Finally, we recognized, as did Congress when it
     enacted section 214(e)(6), that some state commissions have
     asserted jurisdiction over carriers seeking to provide service on
     tribal lands, and that these commissions regulate certain aspects
     of a carrier's provision of service on tribal lands.[^249] Thus, we
     acknowledged that the exercise of state commission jurisdiction
     over carriers providing service on tribal lands varies from state
     to state.

103. In the *Further Notice*, we recognized that the fact-intensive and
     legally complex determination of whether a particular state
     commission has jurisdiction over a particular carrier serving
     tribal lands may lead to confusion, duplication of efforts, and
     needless controversy among carriers, tribal authorities, state
     commissions, and this Commission. This, in turn, might undermine
     the universal service goal of ensuring that all Americans,
     including those living on tribal lands, have access to affordable
     telecommunications services.[^250] Accordingly, we proposed a
     process for Commission designation of eligible telecommunications
     carriers under section 214(e)(6) for carriers serving tribal lands.
     This process was designed to facilitate the designation of carriers
     serving tribal lands in a manner that recognizes the sovereign
     nature of the tribal authorities. We tentatively concluded that,
     before asking this Commission to make the designation under section
     214(e)(6), a carrier should consult with the relevant tribal
     authority and/or the state commission on whether the state
     commission has jurisdiction to designate the carrier.[^251] In
     situations where the tribal authority and the state commission
     agree that the state commission has jurisdiction, we tentatively
     concluded that the state commission would conduct the designation
     pursuant to section 214(e)(2).[^252] In instances where the tribal
     authority challenges the state commission's exercise of
     jurisdiction, we encouraged carriers, with the support of the
     tribal authority, to apply to this Commission for
     designation.[^253] Finally, we sought comment on whether the
     Commission, rather than the state commission, should have exclusive
     jurisdiction to designate terrestrial wireless or satellite
     carriers as eligible telecommunications carriers.[^254]

##  Discussion

### Scope of Section 214(e)(6)

104. *[State Commission Designation of Eligible Telecommunications
     Carriers]{.underline}*. In light of the statutory framework and
     legislative history, we conclude that Congress, in enacting section
     214(e)(6), did not intend to alter the basic framework of section
     214(e), which gives the state commissions the principal role in
     designating eligible telecommunications carriers under section
     214(e)(2). This interpretation of section 214(e) is consistent with
     the legislative history, which indicates that section 214(e)(6) is
     not intended to "restrict or expand the existing jurisdiction of
     State commissions over any common carrier," but is intended to
     provide a means for the designation of a carrier over which a state
     commission lacks jurisdiction. [^255]

105. We conclude that section 214(e)(6) requires the Commission to
     conduct a designation proceeding in instances where the relevant
     state commission lacks, for whatever reason, the authority to
     perform the designation. We are guided by the statutory framework,
     legislative history, and the record before us, to conclude that the
     threshold question in determining whether the Commission may
     exercise its authority under section 214(e)(6) is whether the state
     commission lacks jurisdiction over the carrier, for any reason. We
     agree with commenters who suggest that the inquiry should include,
     but not be limited to, whether a state commission lacks
     jurisdiction over the particular service or geographic area.[^256]
     The determination as to whether a state commission lacks
     jurisdiction over a particular carrier is a fact-specific inquiry
     that may depend on interpretations of federal, state, and tribal
     law where appropriate.

106. *[Jurisdiction Over Carriers Serving Tribal Lands]{.underline}*. We
     are not persuaded by claims that the exercise of our authority
     under section 214(e)(6) is limited to designations of eligibility
     sought by tribally-owned carriers serving tribal lands.[^257] We
     conclude that neither the language of section 214(e)(6) nor its
     legislative history provides any indication that it applies only to
     tribally-owned carriers serving tribal lands.[^258] Section
     214(e)(6) applies to any carrier "not subject to the jurisdiction
     of a state commission." Moreover, the legislative history supports
     this interpretation.[^259] In sum, we agree with those commenters
     who contend that the legislative history of section 214(e)(6) makes
     clear that, although the class of carriers to be covered by section
     214(e)(6) was dominated by tribally-owned carriers, it was not
     restricted to them.[^260]

107. Nor do we find persuasive claims that the Commission generally has
     authority to make all eligible telecommunications carrier
     determinations over carriers providing telecommunications service
     on tribal lands.[^261] We do not believe that Congress intended the
     Commission to use section 214(e)(6) to usurp the role of a state
     commission that has jurisdiction over a carrier providing service
     on tribal lands.[^262] On the contrary, in adopting section
     214(e)(6), Congress recognized that some state commissions had
     asserted jurisdiction over tribal lands.[^263] Congress also
     acknowledged pending jurisdictional disputes between states and
     tribes and made clear that the adoption of section 214(e)(6) was
     not "intended to impact litigation regarding jurisdiction between
     State and federally-recognized tribal entities."[^264]

108. As discussed above, the Commission's authority under section
     214(e)(6) applies only when a carrier is not subject to the
     jurisdiction of a state commission. The determination as to whether
     a carrier providing service on tribal lands is subject to the
     jurisdiction of a state commission is a complicated and intensely
     fact-specific legal inquiry informed by principles of tribal
     sovereignty and requiring the interpretation of treaties, and
     federal Indian law and state law. Such determinations usually
     consider whether state regulation is preempted by federal
     regulation, whether state regulation is consistent with tribal
     sovereignty and self-determination, and whether the tribe has
     consented to state jurisdiction, either in treaties or
     otherwise.[^265] The inquiry as to whether a state commission has
     authority to regulate the provision of telecommunications service
     on tribal lands is a particularized one, and thus specific to each
     state and the facts and circumstances surrounding the provision of
     the service.[^266] As the U.S. Supreme Court has stated, "there is
     no rigid rule by which to resolve the question whether a particular
     state law may be applied to an Indian reservation or to tribal
     members."[^267]

109. *[Jurisdiction Over Particular Services]{.underline}*. We further
     conclude that the technology used to provide the telecommunications
     service does not *per se* determine whether the state commission or
     this Commission has jurisdiction over the carrier for purposes of
     designating the carrier as eligible to receive federal universal
     service support. Specifically, we conclude that the provision of
     service by terrestrial wireless or satellite carrier does not *per
     se* place the carrier outside the parameters of the state
     commission designation authority under section 214(e)(2). We
     believe that if Congress had intended to exempt particular services
     from the state commission designation process, it would have
     expressly done so in section 214(e). We therefore agree with NTIA
     that there is nothing in the statute or the legislative history to
     support the notion that, by enacting section 214(e)(6), Congress
     intended to remove from the state commissions the primary
     responsibility for designating wireless or satellite carriers as
     eligible telecommunications carriers.[^268]

110. We further conclude that state commission designation of a
     Commercial Mobile Radio Service (CMRS) provider pursuant to section
     214(e)(2) does not constitute entry regulation in violation of
     section 332(c)(3) of the Act.[^269] Section 332(c)(3) bars state
     and local rate and entry regulation of CMRS providers, but allows
     the states to regulate "other terms and conditions of service."
     Section 332(c)(3) prohibits direct state regulation of entry by
     CMRS providers (*e.g.*, a regulation that requires the CMRS
     provider to obtain a certificate of public convenience and
     necessity from the state prior to providing service), but a
     regulation does not necessarily run afoul of section 332(c)(3)
     solely because it may make it more difficult for some carriers to
     offer service.[^270] We conclude that the prohibition on "entry"
     regulation in section 332(c)(3) does not prohibit states from
     designating CMRS providers as eligible telecommunications carriers
     because such designation relates to a carrier's right to receive
     federal universal service support, rather than a carrier's legal
     right to do business in a state. We need not decide for present
     purposes whether, or under what conditions, a particular state's
     eligible telecommunications carrier designation process as applied
     to a CMRS provider might constitute impermissible entry regulation,
     rather than permissible regulation of terms and conditions of
     service. Moreover, this conclusion does not affect our ability to
     determine whether a state commission's designation process or
     denial of eligibility may constitute a barrier to entry under
     section 253 of the Act.[^271]

111. We note that several states have already issued orders addressing
     designation requests from wireless carriers.[^272] We encourage
     states to move forward expeditiously to resolve pending requests in
     a pro-competitive manner designed to preserve and advance universal
     service.

### Section 214(e)(6) Designation Process for Carriers Serving Non-Tribal Lands

112. As discussed above, the threshold question for determining whether
     the Commission may exercise its authority to designate a carrier as
     an eligible telecommunications carrier under section 214(e)(6) is
     whether the state commission lacks jurisdiction over the carrier,
     for any reason. Section 214(e) does not, however, define the
     circumstances under which a state commission may lack jurisdiction,
     nor does it address whether such jurisdictional determinations
     should be made by the state commission or this Commission. We
     conclude that carriers seeking designation from this Commission
     under section 214(e)(6) for service provided on non-tribal lands
     must first consult with the relevant state regulatory commission on
     the issue of whether the state commission has jurisdiction to
     designate the carrier, even if the carrier asserts that the state
     commission lacks jurisdiction over the carrier.[^273] In so doing,
     we note that jurisdictional challenges relating to the authority of
     the state commission to designate certain carriers or classes of
     carriers on non-tribal lands derive almost exclusively from
     interpretations of state law.[^274]

113. While a carrier may believe state law to preclude the state
     commission from exercising jurisdiction over the carrier for
     purposes of designation under section 214(e)(2), we conclude, as a
     matter of federal-state comity, that the carrier should first
     consult with the state commission to give the state commission an
     opportunity to interpret state law. We conclude that state
     commissions should be allowed a specific opportunity to address and
     resolve issues involving a state commission's authority under state
     law to regulate certain carriers or classes of carriers.[^275] Only
     in those instances where a carrier provides the Commission with an
     affirmative statement from a court of competent jurisdiction or the
     state commission that it lacks jurisdiction to perform the
     designation will we consider section 214(e)(6) designation requests
     from carriers serving non-tribal lands. We conclude that an
     "affirmative statement" of the state commission may consist of any
     duly authorized letter, comment, or state commission order
     indicating that it lacks jurisdiction to perform designations over
     a particular carrier. Each carrier should consult with the state
     commission to receive such a notification, rather than relying on
     notifications that may have been provided to similarly situated
     carriers.

114. We are concerned, however, that excessive delay in the designation
     of competing providers may hinder the development of competition
     and the availability of service in many high-cost areas.[^276] We
     believe it is unreasonable to expect prospective entrants to enter
     a high-cost market and provide service in competition with an
     incumbent carrier that is receiving support, without knowing
     whether they are eligible to receive support. If new entrants do
     not have the same opportunity to receive universal service support
     as the incumbent, such carriers may be unable to provide service
     and compete with the incumbent in high-cost areas.[^277] As the
     Commission has previously concluded, competitively neutral access
     to such support is critical to ensuring that all Americans,
     including those that live in high-cost areas, have access to
     affordable telecommunications services.[^278] We are therefore
     concerned that indefinite delays in the designation process will
     thwart the intent of Congress, in section 254, to promote
     competition and universal service to high-cost areas. Accordingly,
     we commit to resolve, within six months of the date filed at the
     Commission, all designation requests for non-tribal lands that are
     properly before us pursuant to section 214(e)(6). We also strongly
     encourage state commissions to resolve designation requests filed
     under section 214(e)(2) in the same time frame.[^279]

### Section 214(e)(6) Designation Process for Carriers Serving Tribal Lands 

115. In this section, we establish a framework designed to streamline
     the process for eligibility designation of carriers providing
     service on tribal lands. As discussed in greater detail below, we
     conclude that carriers seeking eligibility designations for service
     provided on tribal lands may petition this Commission under section
     214(e)(6) for a determination of whether the carrier is subject to
     the state commission's jurisdiction and, in instances where the
     state lacks jurisdiction, a decision on the merits of the
     designation request. Under this framework, a carrier seeking an
     eligibility designation for service provided on tribal lands will
     avoid any costs and delays associated with resolving the threshold
     jurisdictional determination in a state designation proceeding and
     possible court appeal of that state jurisdictional decision.
     Moreover, this framework will provide a safe harbor for carriers
     unwilling to have the jurisdictional question resolved by a state
     commission. This streamlined designation process for carriers
     serving tribal lands is intended to facilitate the expeditious
     resolution of such requests so as to increase the availability of
     affordable telecommunications services to tribal lands, while
     preserving the state commissions' jurisdiction consistent with
     federal, tribal, and state law. We believe that this process will
     balance carefully the principles of tribal sovereignty and the
     demonstrated need for access to affordable telecommunications
     services on tribal lands, against the appropriate exercise of state
     jurisdiction over carriers operating on such lands.

116. As discussed in Section IV.C.1. above, we conclude that section
     214(e)(6) directs the Commission to perform the eligibility
     designation in instances where the carrier is not subject to the
     jurisdiction of a state commission. Neither section 214(e)(2) nor
     section 214(e)(6), however, address how such jurisdictional
     determinations should be made or by which commission. In the
     absence of specific guidance in the statute as to how such
     jurisdictional determinations should be made, we conclude that this
     Commission may resolve the threshold question of whether a carrier
     seeking eligibility designation for service provided on tribal
     lands is subject to the jurisdiction of the state commission. This
     conclusion is consistent with the execution of our duty to preserve
     and advance universal service under section 254, principles of
     tribal sovereignty, and the unique federal trust relationship
     between Indians tribes and the federal government.

117. We recognize that a determination as to whether a state commission
     lacks jurisdiction over a carrier providing service on tribal lands
     is a legally complex inquiry extending beyond interpretations of
     state law to principles of tribal sovereignty, federal Indian law,
     and treaties.[^280] Evaluating the extent to which a state
     commission has jurisdiction over activities conducted on tribal
     lands, whether by members or non-members of a tribe, will involve
     questions of whether state regulation is preempted by federal
     regulation, whether state regulation is consistent with tribal
     sovereignty and self-determination, and whether a tribe has
     consented to state jurisdiction in treaties or otherwise. Thus, we
     find that such jurisdictional determinations, which will involve an
     analysis of principles of tribal sovereignty, federal Indian law,
     treaties, and state law, may be appropriately performed by this
     Commission.

118. The jurisdictional ambiguities associated with the question of
     whether a state may designate a carrier serving tribal lands may
     unnecessarily delay the provision of affordable services in
     high-cost areas. We intend this framework to facilitate the
     designation of carriers eligible to receive federal universal
     service support for service provided on tribal lands by permitting
     such carriers to seek resolution of the jurisdictional issue
     directly from this Commission. Absent this framework, the
     designation of such carriers as eligible to receive federal
     universal service support may be otherwise unnecessarily delayed
     pending resolution of the jurisdictional question, or potentially
     prevented entirely in those instances where the tribal authority
     will not support the carrier's submission to state commission
     jurisdiction.

119. Moreover, in establishing this framework for the designation of
     eligible telecommunications carriers serving tribal lands, we are
     guided by our recognition of, and respect for, principles of tribal
     sovereignty and self-determination. As described in the
     Commission's *Indian Policy Statement*, we acknowledge the
     principles of tribal sovereignty and self-government and the unique
     trust relationship between the Indian tribes and the federal
     government.[^281] We are mindful that the federal trust doctrine
     imposes on federal agencies a fiduciary duty to conduct their
     authority in matters affecting Indian tribes in a manner that
     protects the interest of the tribes.[^282] We are also mindful that
     federal rules and policies should therefore be interpreted in a
     manner that comports with tribal sovereignty and the federal policy
     of empowering tribal independence.[^283]

120. In light of our obligation to preserve and advance universal
     service under section 254, principles of tribal sovereignty and
     self-determination, and our unique federal trust responsibility, we
     adopt the following framework for resolution of designation
     requests under section 214(e)(6) for carriers serving tribal lands.
     We conclude that a carrier seeking a designation of eligibility to
     receive federal universal service support for telecommunications
     service provided on tribal lands may petition the Commission for
     designation under section 214(e)(6), without first seeking
     designation from the appropriate state commission. The petitioner
     must set forth in its petition the basis for its assertion that it
     is not subject to the state commission's jurisdiction, and bears
     the burden of proving that assertion. The petitioner must provide
     copies of its petition to the appropriate state commission at the
     time of filing with the Commission. The Commission will release,
     and publish in the Federal Register, a public notice establishing a
     pleading cycle for comments on the petition. The Commission will
     also send the public notice announcing the comment and reply dates
     to the affected state commission by overnight express mail to
     ensure that the state commission is notified of the notice and
     comment period.

121. Based on the evidence presented in the record, the Commission shall
     make a determination as to whether the carrier has sufficiently
     demonstrated that it is not subject to the state commission's
     jurisdiction. In the event the Commission determines that the state
     commission lacks jurisdiction to make the designation and the
     petition is properly before the Commission under section 214(e)(6),
     the Commission will decide the merits of the request within six
     months of release of an order resolving the jurisdictional issue.
     If the carrier fails to meet its burden of proof that it is not
     subject to the state commission's jurisdiction, the Commission will
     dismiss the request and direct the carrier to seek designation from
     the appropriate state commission. In such cases, we urge state
     commissions to act within a similar time frame (*i.e.*, six months)
     to resolve such requests as expeditiously as possible.

122. We emphasize that a carrier seeking a section 214(e)(6) designation
     for service provided on tribal lands must bear the burden of
     demonstrating that it is not subject to the state commission's
     jurisdiction. As discussed above, we reject the contention that
     section 214(e)(6) provides the Commission with the blanket
     authority to make all eligible telecommunications carrier
     designations over carriers providing service on tribal lands.[^284]
     In so doing, we recognize that the issue of whether a state
     commission may exercise jurisdiction over a carrier providing
     service on tribal lands is a particularized inquiry guided by
     principles of tribal sovereignty, federal Indian law, and treaties,
     as well as state law. Therefore, carriers seeking an eligibility
     designation from this Commission for the provision of service on
     tribal lands should provide fact-specific support demonstrating
     that the carrier is not subject to the state commission's
     jurisdiction for the provision of service on tribal lands. Such
     support should include any relevant case law, statutes, and
     treaties. We emphasize that this is a strict burden and that
     generalized assertions regarding the state commission's lack of
     jurisdiction will not suffice to confer jurisdiction on this
     Commission under section 214(e)(6). We would also find informative
     any statements and analyses the tribal authority might provide
     regarding the petitioner's request for designation and the state
     commission's exercise of jurisdiction. For example, carriers may
     include with their petitions a letter from the appropriate tribal
     authority addressing the jurisdictional question or the merits of
     the designation request.

123. We decline to place on the affected state commission the burden of
     proving that it has jurisdiction over a particular carrier.[^285]
     To do so would suggest that state commission bear the burden of
     overcoming a general presumption that states do not have
     jurisdiction over carriers providing service on tribal lands. Such
     a presumption is inconsistent with our determination that the issue
     of whether a state commission lacks jurisdiction over a carrier
     providing service on tribal lands is a particularized inquiry, and
     thus specific to each state and the facts and circumstances
     surrounding the provision of the service.[^286]

124. We strongly encourage the participation of the affected state
     commissions and tribal authorities in this process. The
     determination of whether a particular carrier is subject to the
     state commission's jurisdiction for service provided on tribal
     lands is one that will be greatly informed by the participation of
     the tribes and state commission or other state officials. Based on
     our experience to date with section 214(e)(6), we believe that
     there will be some state commissions that will not object to the
     Commission's designation of carriers serving tribal lands as
     eligible to receive federal universal service support.[^287] We
     look forward to working with the state commissions, tribal
     authorities, and members of industry to resolve these
     jurisdictional questions, and ultimately the designation requests,
     in an expeditious manner. To that end, we seek comment in the
     attached Further Notice of Proposed Rulemaking on additional
     measures that may be implemented to further facilitate the
     designation process for the provision of service on tribal
     lands.[^288]

125. We emphasize, however, that this process is limited in several
     respects. First, a carrier may avail itself of this process only to
     seek a designation of eligibility to receive federal universal
     service support for service provided on *tribal lands*.[^289]
     Petitioners seeking an eligibility designation under section
     214(e)(6) for service provided on tribal lands must accurately
     describe the specific geographic areas they wish to serve, and must
     demonstrate that such areas satisfy the definition of tribal lands
     we adopt in this Order. As discussed above in Section III.C.1., the
     federal government has a unique trust responsibility with respect
     to members of federally-recognized tribes. In addition, the
     determination of jurisdiction over a carrier serving tribal lands
     is an inquiry that will extend beyond questions of state law, and
     will be informed by principles of tribal sovereignty, federal law,
     and treaties.[^290] Thus, it is appropriate and reasonable that the
     Commission, in executing its statutory obligation to preserve and
     advance universal service, should determine whether a carrier
     seeking an eligibility designation for services provided on tribal
     lands is subject to the state commission's jurisdiction.

126. Second, a carrier may only avail itself of this process when it has
     not initiated a designation proceeding before the affected state
     commission. In order to avoid the potential for \"forum- shopping\"
     and the costs and confusion caused by a duplication of efforts
     between this Commission and state commissions, we will not make a
     jurisdictional determination under section 214(e)(6) if the
     affected state commission has initiated a proceeding in response to
     a designation request under section 214(e)(2). Nothing we adopt
     today affects the ability of a state commission to make an eligible
     telecommunications carrier designation for a carrier serving tribal
     lands, where jurisdiction may otherwise be in dispute among the
     parties.

127. Finally, any determination made by this Commission pursuant to
     section 214(e)(6) relates only to a carrier's eligibility to
     receive *federal* universal service support for the provision of
     service on tribal lands. We emphasize that the Commission's
     determination of whether a particular carrier is subject to the
     state commission's jurisdiction for service provided on tribal
     lands is limited to the state commission's ability to designate the
     carrier as eligible to receive federal universal service support.

##  Pending Requests For Designation Pursuant To Section 214(e)(6)

### Cellco Petition For Designation As An Eligible Telecommunications Carrier For Maryland and Delaware

128. *[Background]{.underline}*. On September 8, 1999, Cellco
     Partnership d/b/a Bell Atlantic Mobile, a non-tribally-owned CMRS
     provider, filed with the Commission a petition seeking a
     designation of eligibility to receive federal universal service
     support for service provided in Delaware and parts of
     Maryland.[^291] Cellco contends that provisions of applicable state
     law in Maryland and Delaware preclude state commission designation
     of wireless carriers under section 214(e)(2).[^292] Specifically,
     Cellco contends that the state legislatures in both Delaware and
     Maryland have divested their respective state regulatory
     commissions of jurisdiction over cellular telephone service.[^293]
     On November 16, 1999, the Common Carrier Bureau sought comment on
     Cellco's petition for designation as an eligible telecommunications
     carrier under section 214(e)(6).[^294] The Maryland Public Service
     Commission (Maryland Commission) filed an *ex parte* letter
     requesting that the Commission dismiss Cellco's petition and direct
     Cellco to file its petition for eligible telecommunications carrier
     designation with the Maryland Commission.[^295] The Delaware Public
     Service Commission (Delaware Commission), however, filed comments
     confirming that it does not believe it has jurisdiction over CMRS
     providers.[^296]

129. *[Discussion]{.underline}*. Consistent with the Maryland
     Commission's request and our conclusions above in Section IV.C.2.
     concerning the role state commissions play in the designation of
     carriers under section 214(e), we dismiss without prejudice
     Cellco's request for designation of eligible telecommunications
     carrier status for service provided in Maryland. Although we do not
     reach the merits of the Cellco request for designation in Delaware
     in this Order, we conclude that the Delaware Commission's comments
     in this proceeding provide a sufficient basis for the exercise of
     our jurisdiction to consider the merits of the request for
     designation under section 214(e)(6). We discuss each of the
     requests in greater detail below.

130. *[Maryland Request]{.underline}*. At the request of the Maryland
     Commission, we dismiss Cellco's request for designation as an
     eligible telecommunications carrier in Maryland. In a letter to the
     Commission on April 18, 2000, the Maryland Commission stated its
     intent to assert jurisdiction over CMRS providers, including
     Cellco, for purposes of making eligible telecommunications carrier
     designations in Maryland.[^297] We are not persuaded by Cellco's
     statement that it has "informally confirmed with the professional
     staffs of the Maryland and Delaware commissions that these
     statutory exclusions are complete exclusions from the commissions'
     jurisdiction."[^298] We emphasize that carriers seeking a
     designation from this Commission for service provided on non-tribal
     lands must provide to us an affirmative statement[^299] from the
     state commission or a court of competent jurisdiction that the
     carrier is not subject to the state commission's jurisdiction for
     purposes of eligible carrier designation.[^300]

131. We decline Cellco's invitation that we should interpret the
     relevant state law to conclude that it is not subject to the state
     commission\'s jurisdiction. We note that, while Cellco has cited
     provisions of applicable state law in both Delaware and Maryland to
     support its contention that the state regulatory commission has no
     designation authority over wireless carriers, we believe that, as a
     matter of federal-state comity, such interpretations are better
     performed by the affected state commissions. As this case
     demonstrates, in the absence of explicit state guidance in the form
     of an affirmative statement from the state commission or a court of
     competent jurisdiction regarding the interpretation of its state
     law, premature intervention by the Commission may lead to confusion
     and duplication of efforts with the state commission, and an
     improper exercise of our jurisdiction under section 214(e)(6).

132. Should Cellco challenge the Maryland Commission's exercise of
     authority under section 214(e)(2), resolution of the jurisdictional
     issue may be obtained either through the state commission
     proceeding or in a judicial proceeding. Should the state commission
     or courts ultimately determine that Cellco is not subject to the
     state commission\'s jurisdiction for purposes of the eligibility
     designation, the Commission will assume the designation
     responsibility under section 214(e)(6) upon request. We reiterate
     our expectation that state commissions will act as expeditiously as
     possible on requests for designation. Should Cellco submit to the
     Maryland Commission a request for designation under section
     214(e)(2), we strongly encourage the Maryland Commission to resolve
     this request within six months of the filing date.

133. *[Delaware Request]{.underline}*. With regard to Cellco's request
     for designation as an eligible telecommunications carrier for
     service provided in Delaware, we conclude that the statements
     contained in comments filed by the Delaware Commission are
     sufficient to warrant our assertion of jurisdiction under section
     214(e)(6). In its comments, the Delaware Commission confirms that
     the Delaware General Assembly has, for almost two decades, withheld
     from the Delaware Commission jurisdiction over cellular service or
     other mobile radio services.[^301] Specifically, the Delaware
     Commission cites to Delaware law stating that it "shall have no
     jurisdiction over the operation of telephone service provided by
     cellular technology or by domestic public land mobile radio service
     or over the rates to be charged for such service or over property,
     property rights, equipment or facilities employed in such
     service."[^302] According to the Delaware Commission, it has
     consistently taken the position that it has not been granted
     regulatory jurisdiction over any aspect of telephone service
     provided by mobile, and now fixed, cellular wireless
     technology.[^303] The Delaware Commission states that it does not
     currently exercise any form of supervisory jurisdiction over
     wireless CMRS providers, including Cellco, and acknowledges that
     this Commission, not the Delaware Commission, "must be the entity
     to . . . supervise and enforce the proper application of such
     support by Cellco."[^304]

134. Consistent with the framework adopted in this Order, we conclude
     that we have jurisdiction to consider Cellco's request for
     designation as an eligible telecommunications carrier for services
     provided in Delaware. As a result, we will address Cellco's
     Delaware request for designation as an eligible telecommunications
     carrier within six months from the release date of this Order.

### Western Wireless Petition For Designation As An Eligible Telecommunications Carrier For Wyoming

135. *[Background]{.underline}*. On September 1, 1998 Western Wireless
     Corporation, a wireless provider, petitioned the Wyoming Public
     Service Commission (Wyoming Commission) for designation as an
     eligible telecommunications carrier pursuant to section 214(e)(2)
     for service provided throughout Wyoming. On August 13, 1999, the
     Wyoming Commission dismissed Western Wireless' request for
     designation on the grounds that the Wyoming Telecommunications Act
     denies the Wyoming Commission the authority for regulating
     "telecommunications services using . . . cellular technology,"
     except for quality of service. [^305] The Wyoming Commission
     interpreted this prohibition as preventing it from designating
     Western Wireless as an eligible telecommunications carrier because
     Western Wireless provides services using cellular technology.[^306]

136. On September 29, 1999, Western Wireless filed with the Commission a
     section 214(e)(6) petition seeking a designation of eligibility to
     receive federal universal service support for service provided
     throughout Wyoming.[^307] Western Wireless contends that the
     Commission should assume jurisdiction given the Wyoming
     Commission's determination that it lacked jurisdiction under the
     applicable state law to designate wireless carriers as eligible
     telecommunications carriers.[^308] On November 12, 1999, the Common
     Carrier Bureau released a Public Notice seeking comment on Western
     Wireless' petition for designation as an eligible
     telecommunications carrier.[^309]

137. *[Discussion]{.underline}*. Consistent with the framework adopted
     in this Order, we conclude that we have the authority under section
     214(e)(6) to consider this petition. We commend the Wyoming
     Commission for its resolution of the threshold jurisdictional
     question, and encourage other state commissions to resolve such
     issues as expeditiously as possible. As with the Cellco Delaware
     request, we will promptly decide the merits of Western Wireless'
     request for designation in Wyoming within six months from the
     release date of this Order.

### Western Wireless Petition To Be Designated As An Eligible Telecommunications Carrier For The Crow Reservation In Montana

138. *[Background]{.underline}*. On August 4, 1999, Western Wireless, a
     non-tribally-owned telecommunications carrier, filed with the
     Commission a petition under section 214(e)(6) seeking a designation
     of eligibility to receive federal universal service support for a
     service area comprised of the Crow Reservation in Montana.[^310]
     Specifically, Western Wireless contends that telecommunications
     service offered on the Crow Reservation is not subject to the
     jurisdiction of the state commission.[^311] At the time of its
     filing the section 214(e)(6) petition with this Commission, Western
     Wireless also had pending before the Montana Public Service
     Commission (Montana Commission) a request for designation as an
     eligible telecommunications carrier throughout Montana, including
     the Crow Reservation.[^312] On September 10, 1999, the Common
     Carrier Bureau released a Public Notice seeking comment on Western
     Wireless' section 214(e)(6) petition for designation as an eligible
     telecommunications carrier for the Crow Reservation.[^313] In its
     comments, the Montana Commission asks the Commission to dismiss the
     section 214(e)(6) petition to allow the Montana Commission to
     consider the designation request.[^314] On November 3, 1999,
     Western Wireless filed a notice withdrawing from the Montana
     Commission its petition for section 214(e)(2) designation as an
     eligible telecommunications carrier throughout Montana.[^315]

139. *[Discussion]{.underline}*. Consistent with the framework we adopt
     in this Order, we will resolve the threshold question of whether
     Western Wireless is subject to the jurisdiction of the Montana
     Commission for purposes of determining eligibility for federal
     support for services provided on the Crow Reservation. As discussed
     above in Section IV.C.1., we have concluded that section 214(e)(6)
     does not provide the Commission with the *per se* authority to
     designate carriers based solely on the provision of service on
     tribal lands.[^316] As noted above, determinations as to whether a
     state commission lacks jurisdiction over carriers serving tribal
     lands involves a fact-specific inquiry informed by principles of
     tribal sovereignty, treaties, state law, and federal Indian law.
     Consistent with the discussion above in Section IV.C.3., we
     conclude that Western Wireless should bear the burden of
     demonstrating that it is not subject to the jurisdiction of the
     Montana Commission for purposes of an eligibility designation for
     services provided on the Crow Reservation.

140. Consistent with the framework we establish in Section IV.C.3. and
     to permit Western Wireless a full and fair opportunity to present a
     case consistent with the guidance we give in this Order, we will
     reopen the record in this proceeding to allow Western Wireless an
     opportunity to supplement its claim that the Montana Commission
     lacks jurisdiction to make the designation for service provided on
     the Crow Reservation. Western Wireless shall notify the Commission
     in writing within 15 days of release of this Order whether it
     wishes to supplement the record consistent with the determinations
     in this Order. If Western Wireless chooses to supplement the
     record, it shall do so within 30 days of the date it notifies the
     Commission of its intent to do so. It shall also provide copies of
     the supplemental filing to the Montana Commission at the time of
     its filing with the Commission. In any event, the Commission will
     release, and publish in the Federal Register, a public notice
     announcing that the Montana Commission, and any other interested
     party, shall have 30 days to respond to Western Wireless\' original
     petition and/or supplemental filing. To ensure that the Montana
     Commission receives prompt notification of the 30-day period, the
     Commission shall also send to the Montana Commission, by overnight
     express mail, the public notice announcing the comment cycle
     deadline. Should the Commission determine, on the basis of the
     record developed, that the Montana Commission does not have
     authority to perform the eligibility designation for Western
     Wireless\' service provided on the Crow Reservation, the Commission
     will exercise its authority under section 214(e)(6) to decide the
     merits of the request within six months after release of an order
     resolving the jurisdictional issue.

### Smith Bagley Petition To Be Designated As An Eligible Telecommunications Carrier in Arizona and New Mexico

141. *[Background]{.underline}*. On June 2, 1999, Smith Bagley, Inc., a
     non-tribally-owned CMRS provider, filed a petition seeking
     designation by the Commission as an eligible telecommunications
     carrier under section 214(e)(6) for those parts of its service
     areas in Arizona and New Mexico that encompass federally reserved
     Indian lands.[^317] In April 1999, Smith Bagley submitted to the
     Arizona Corporation Commission (Arizona Commission) and the New
     Mexico Public Regulation Commission (New Mexico Commission)
     separate requests for designation as an eligible telecommunications
     carrier pursuant to section 214(e)(2). Both state commissions
     initiated proceedings to consider the merits of the designation
     requests, although neither commission has reached a decision at
     this time. Although Smith Bagley applied to the respective state
     commissions for designation, Smith Bagley contends in its section
     214(e)(6) petition that this Commission should designate Smith
     Bagley as an eligible telecommunications carrier for all federally
     reserved Native American lands within its service area.[^318]

142. On July 6, 1999, the Common Carrier Bureau released a Public Notice
     seeking comment on Smith Bagley's petition for designation as an
     eligible telecommunications carrier in Arizona and New
     Mexico.[^319] In response, the Arizona Commission asserted that it
     has jurisdiction over tribal lands served by non-tribally owned
     telephone companies.[^320]

143. *[Discussion]{.underline}*. Consistent with the framework we adopt
     in this Order for the designation of carriers serving tribal lands,
     we dismiss without prejudice Smith Bagley's section 214(e)(6)
     request for designation as an eligible telecommunications carrier
     for tribal lands in Arizona and New Mexico. Both the Arizona and
     New Mexico Commissions are currently considering section 214(e)(2)
     requests for designation filed by Smith Bagley prior to the date of
     their filing with this Commission. As we concluded above in Section
     IV.C.3., in order to avoid the possibility of forum-shopping and
     the costs and confusion caused by a duplication of efforts between
     this Commission and state commissions, we decline to address a
     designation request under section 214(e)(6) if a request for
     eligible telecommunications carrier designation is pending at the
     state commission.

144. Accordingly, we dismiss without prejudice Smith Bagley's request
     for designation under section 214(e)(6) to permit the Arizona and
     New Mexico Commissions to complete their proceedings on the merits
     of Smith Bagley's pending requests. We request, however, that both
     state commissions act expeditiously in consideration of Smith
     Bagley's designation requests. We note that those requests have now
     been pending for over one year. As we have discussed above, we are
     concerned that unreasonable delays in acting upon designation
     requests will hinder the availability of affordable
     telecommunications services in high-cost areas. We therefore
     strongly encourage the Arizona and New Mexico Commissions to
     resolve Smith Bagley's pending requests for designation as soon as
     possible.

### Cheyenne River Sioux Tribe Telephone Authority Petition For Designation As An Eligible Telecommunications Carrier

145. *[Background]{.underline}*. The Cheyenne River Sioux Tribe
     Telephone Authority (Cheyenne Telephone Authority), a
     tribally-owned carrier, provides service within the Cheyenne River
     Indian Reservation.[^321] According to the Cheyenne Telephone
     Authority, the South Dakota Public Utilities Commission (South
     Dakota Commission) lacks authority over tribal enterprises
     conducting business on the Cheyenne River Sioux Reservation, such
     as the Cheyenne Telephone Authority.[^322] Accordingly, the
     Cheyenne River Sioux Tribe designated the Cheyenne Telephone
     Authority as an eligible telecommunications carrier serving the
     reservation.[^323]

146. As a precautionary measure to avoid the serious consequences of
     failing to be eligible to receive federal universal service support
     as of January 1, 1998, the Cheyenne Telephone Authority also
     applied to the South Dakota Commission for eligible
     telecommunications carrier designation.[^324] In so doing, the
     Cheyenne Telephone Authority expressly stated its belief that the
     South Dakota Commission did not have jurisdiction within
     reservation boundaries, but that it applied to the South Dakota
     Commission in any event because of the ambiguous nature of the Act,
     which at that time did not contain section 214(e)(6).[^325] On
     December 11, 1997, the South Dakota Commission found that the
     Cheyenne Telephone Authority satisfied the requirements for
     designation as an eligible telecommunications carrier for its
     service area.[^326]

147. On December 1, 1997, Congress enacted section 214(e)(6), giving the
     Commission jurisdiction to perform eligible telecommunications
     carrier designations for carriers not subject to the jurisdiction
     of a state commission. On January 7, 1998, the Cheyenne Telephone
     Authority filed a petition with the Commission seeking designation
     as an eligible telecommunications carrier under section 214(e)(6)
     and confirmation of the designation performed by the South Dakota
     Commission.[^327] On January 28, 1998, the Common Carrier Bureau
     released a Public Notice seeking comment on the Cheyenne Telephone
     Authority petition.[^328] On August 25, 1998, the South Dakota
     Commission submitted a letter asserting that "it has jurisdiction
     to designate \[Cheyenne Telephone Authority\] as an eligible
     telecommunications carrier for its presently served service
     area."[^329]

148. Although the Cheyenne Telephone Authority received its eligible
     telecommunications carrier designation from the South Dakota
     Commission pursuant to section 214(e)(2), it requests designation
     from this Commission due to its concern that the state commission
     may lack jurisdiction over tribally-owned carriers to make the
     eligible telecommunications carrier designation.[^330]
     Alternatively, the Cheyenne Telephone Authority asks the Commission
     to confirm the state commission's designation to ensure that its
     eligibility status is preserved in the event the matter is reopened
     and a determination made that the South Dakota Commission does not
     have jurisdiction within the boundaries of the Cheyenne River
     Indian Reservation.[^331]

149. *[Discussion]{.underline}*. In accordance with our conclusion above
     that section 214(e)(6) requires the Commission to designate an
     eligible telecommunications carrier only when the state lacks
     jurisdiction under section 214(e)(2), we dismiss Cheyenne Telephone
     Authority's petition without prejudice. We find no reason before us
     to disturb the South Dakota Commission's designation of the
     Cheyenne Telephone Authority as an eligible telecommunications
     carrier.[^332] In addition, we note that this conclusion is
     consistent with our prior statement that, "\[a\]ny carrier that is
     able to be or has already been designated as an eligible
     telecommunications carrier by a state commission is not required to
     receive such designation from the Commission."[^333]

150. In reaching this conclusion we note that, as with the case of the
     Cheyenne Telephone Authority, many tribes may have ongoing
     jurisdictional disputes with state commissions. We are hopeful that
     our decision not to disturb the finding of the state commission in
     this instance will encourage state commissions and tribes to move
     forward with the designation process for determining eligibility
     for federal universal service support despite disagreements
     relating to the state's exercise of jurisdiction over carriers
     providing service on tribal lands. We believe that to disturb a
     state commission\'s prior determination that a particular carrier
     is eligible for federal universal service support would have the
     unintended effect of forcing the tribal authority to choose between
     delaying its designation request pending a lengthy resolution of
     disputed jurisdictional issues or conceding jurisdiction to the
     state commission for other purposes in order to be eligible for
     federal universal service support.

# further notice of proposed rulemaking

151. *[Deadline for Resolving Section 214(e) Designation
     Requests]{.underline}.* In this Further Notice of Proposed
     Rulemaking, we seek comment on the imposition of a time limit
     during which requests for designation as an eligible
     telecommunications carrier under section 214(e), filed either with
     this Commission or a state commission, must be resolved. As noted
     above, we are concerned that lengthy delays in addressing requests
     for designation may hinder the availability of affordable
     telecommunications services in many high-cost areas of the Nation.
     We believe it is unreasonable to expect a prospective entrant to
     enter a high-cost market and provide service in competition with an
     incumbent carrier that is receiving support, without knowing
     whether it is eligible to receive support. If new entrants do not
     have the same opportunity to receive universal service support as
     the incumbent, such carriers may be unable to provide service and
     compete with the incumbent in high-cost areas.[^334] As the
     Commission has previously concluded, competitively neutral access
     to such support is critical to ensuring that all Americans,
     including those that live in high-cost areas, have access to
     affordable telecommunications services.[^335] We believe such a
     result to be contrary to Congress' intent in adopting section 254
     of the Act.

152. We therefore seek comment on whether to adopt a rule that would
     require resolution of the merits of any request for designation
     under section 214(e) within a six-month period, or some shorter
     period. In addition, we seek comment on whether to require a
     similar time limit for the resolution of the jurisdictional issues
     associated with requests for eligibility designations on tribal
     lands, and what that time limit should be. We intend to consult
     with members of the Joint Board on this issue and invite comment
     from the Joint Board and interested parties. We also seek on
     comment on the Commission's authority to enforce any such
     requirement imposed on state commissions. For example, we seek
     comment on our authority under sections 201(b), 253, 254 of the
     Act,[^336] or *AT&T v. Iowa Utilities Board* [^337] to enforce any
     deadline imposed on resolution of requests for eligibility
     designations under section 214(e).

153. *[Alternative Frameworks for Resolving Designation
     Requests]{.underline}*. In light of the immediate need for
     expeditious resolution of designation requests from carriers
     serving tribal lands, we have adopted a framework for resolving
     designation requests filed at the Commission under section
     214(e)(6). This framework is designed to streamline the process for
     designation of eligible telecommunications carriers serving tribal
     lands in order to expedite the availability of affordable
     telecommunications services to tribal communities. We are guided,
     however, by our desire to work cooperatively with the state
     commissions and tribal authorities to consider alternative methods
     for facilitating the expeditious resolution of eligibility
     designation requests. We therefore seek comment on additional ways
     in which the state commissions, tribal authorities, and this
     Commission can work together toward this end. We look forward to
     collaborating further with state commissions and tribal leaders to
     consider additional measures we can take to resolve eligibility
     designation requests on tribal lands as expeditiously as possible.

# procedural matters

# Paperwork Reduction Act

154. The action contained herein has been analyzed with respect to the
     Paperwork Reduction Act of 1995 (PRA) and found to impose new or
     modified reporting and/or recordkeeping requirements or burdens on
     the public. Implementation of these new or modified reporting
     and/or recordkeeping requirements will be subject to approval by
     the Office of Management and Budget (OMB) as prescribed by the PRA,
     and will go into effect upon announcement in the Federal Register
     of OMB approval.

# Final Regulatory Flexibility Analysis

155. As required by the Regulatory Flexibility Act (RFA),[^338] an
     Initial Regulatory Flexibility Analysis (IRFA) was incorporated
     into the *Further Notice*.[^339] The Commission sought written
     public comment on the proposals in the *Further Notice*, including
     comment on the IRFA. This present Final Regulatory Flexibility
     Analysis (FRFA) conforms to the RFA.[^340]

### Need for and Objectives of this Report and Order and the Rules Adopted Herein

156. The Commission issues this Twelfth Report and Order (Order) as a
     part of its implementation of the Act's mandate that "\[c\]onsumers
     in all regions of the Nation . . . have access to
     telecommunications and information services . . . .".[^341] This
     Order implements that mandate by enhancing Lifeline and LinkUp
     support for low-income individuals living on tribal lands, as
     defined herein. This Order also outlines the process the Commission
     will follow in designating telecommunications carriers as eligible
     telecommunications carriers under section 214(e) of the Act [^342]
     for the purposes of receiving universal service support under
     section 254(e).[^343] Our objective is to fulfill section 254's
     mandate that "all regions of the Nation . . . have access to
     telecommunications" with respect to tribal lands, which have the
     lowest reported subscribership levels for telecommunications in the
     Nation.[^344]

### Summary of Significant Issues Raised by Public Comments in Response to the IRFA

157. We received no comments directly in response to the IRFA in this
     proceeding. Some comments generally addressed small business
     issues, but these issues are not a part of this present Order.

### Description and Estimate of the Number of Small Entities To Which Rules Will Apply

158. The RFA directs agencies to provide a description of and, where
     feasible, an estimate of the number of small entities that may be
     affected by the new rules.[^345] The RFA generally defines the term
     "small entity" as having the same meaning as the terms "small
     business," "small organization," and "small governmental
     jurisdiction."[^346] In addition, the term "small business" has the
     same meaning as the term "small business concern" under the Small
     Business Act.[^347] A small business concern is one that: (1) is
     independently owned and operated; (2) is not dominant in its field
     of operation; and (3) satisfies any additional criteria established
     by the Small Business Administration (SBA).[^348] A small
     organization is generally "any not-for-profit enterprise which is
     independently owned and operated and is not dominant in its
     field."[^349] Nationwide, as of 1992, there were approximately
     275,801 small organizations.[^350] And finally, "small governmental
     jurisdiction" generally means "governments of cities, counties,
     towns, townships, villages, school districts, or special districts,
     with a population of less than 50,000."[^351] As of 1992, there
     were approximately 85,006 such jurisdictions in the United
     States.[^352] This number includes 38,978 counties, cities, and
     towns; of these, 37,566, or 96 percent, have populations of fewer
     than 50,000.[^353] The Census Bureau estimates that this ratio is
     approximately accurate for all governmental entities. Thus, of the
     85,006 governmental entities, we estimate that 81,600 (91 percent)
     are small entities. In this Order, the Commission stated that the
     new rules will affect all providers of interstate
     telecommunications and interstate telecommunications services.
     Below, we further describe and estimate the number of small
     business concerns that may be affected by the rules adopted in this
     Order.

159. The SBA has defined a small business for Standard Industrial
     Classification (SIC) categories 4812 (Radiotelephone
     Communications) and 4813 (Telephone Communications, Except
     Radiotelephone) to be small entities when they have no more than
     1,500 employees.[^354] We first discuss the number of small
     telephone companies falling within these SIC categories, then
     attempt to refine further those estimates to correspond with the
     categories of telecommunications companies that are commonly used
     under our rules.

160. The most reliable source of information regarding the total numbers
     of common carriers and related providers nationwide, including the
     numbers of commercial wireless entities, appears to be data the
     Commission publishes annually in its *Carrier Locator* report,
     derived from filings made in connection with the Telecommunications
     Relay Service (TRS).[^355] According to data in the most recent
     report, there are 4,144 interstate carriers.[^356] These carriers
     include, *inter alia*, incumbent local exchange carriers,
     competitive local exchange carriers, competitive access providers,
     interexchange carriers, other wireline carriers and service
     providers (including shared-tenant service providers and private
     carriers), operator service providers, pay telephone operators,
     providers of telephone toll service, wireless carriers and services
     providers, and resellers.

161. We have included small incumbent LECs in this present RFA analysis.
     As noted above, a "small business" under the RFA is one that,
     *inter alia*, meets the pertinent small business size standard
     (*e.g.*, a telephone communications business having 1,500 or fewer
     employees), and "is not dominant in its field of operation."[^357]
     The SBA\'s Office of Advocacy contends that, for RFA purposes,
     small incumbent LECs are not dominant in their field of operation
     because any such dominance is not "national" in scope.[^358] We
     have therefore included small incumbent LECs in this RFA analysis,
     although we emphasize that this RFA action has no effect on
     Commission analyses and determinations in other, non-RFA contexts.

162. *Total Number of Telephone Companies Affected.* The United States
     Bureau of the Census ("the Census Bureau") reports that, at the end
     of 1992, there were 3,497 firms engaged in providing telephone
     services, as defined therein, for at least one year.[^359] This
     number contains a variety of different categories of carriers,
     including local exchange carriers, interexchange carriers,
     competitive access providers, cellular carriers, mobile service
     carriers, operator service providers, pay telephone operators, PCS
     providers, covered SMR providers, and resellers. It seems certain
     that some of those 3,497 telephone service firms may not qualify as
     small entities or small incumbent LECs because they are not
     "independently owned and operated."[^360] For example, a PCS
     provider that is affiliated with an interexchange carrier having
     more than 1,500 employees would not meet the definition of a small
     business. It seems reasonable to conclude, therefore, that fewer
     than 3,497 telephone service firms are small entity telephone
     service firms or small incumbent LECs that may be affected by the
     decisions and rules in this Order.

163. *Wireline Carriers and Service Providers.* SBA has developed a
     definition of small entities for telephone communications companies
     other than radiotelephone companies. The Census Bureau reports
     that, there were 2,321 such telephone companies in operation for at
     least one year at the end of 1992.[^361] According to SBA\'s
     definition, a small business telephone company other than a
     radiotelephone company is one employing no more than 1,500
     persons.[^362] All but 26 of the 2,321 non-radiotelephone companies
     listed by the Census Bureau were reported to have fewer than 1,000
     employees. Thus, even if all 26 of those companies had more than
     1,500 employees, there would still be 2,295 non-radiotelephone
     companies that might qualify as small entities or small incumbent
     LECs. Although it seems certain that some of these carriers are not
     independently owned and operated, we are unable at this time to
     estimate with greater precision the number of wireline carriers and
     service providers that would qualify as small business concerns
     under SBA's definition. Consequently, we estimate that there are
     fewer than 2,295 small entity telephone communications companies
     other than radiotelephone companies that may be affected by the
     decisions and rules in this Order.

164. *Local Exchange Carriers*, *Interexchange Carriers, Competitive
     Access Providers, Operator Service Providers, and Resellers*.
     Neither the Commission nor SBA has developed a definition
     particular to small local exchange carriers (LECs), interexchange
     carriers (IXCs), competitive access providers (CAPs), operator
     service providers (OSPs), or resellers. The closest applicable
     definition for these carrier-types under SBA rules is for telephone
     communications companies other than radiotelephone (wireless)
     companies.[^363] The most reliable source of information regarding
     the number of these carriers nationwide of which we are aware
     appears to be the data that we collect annually in connection with
     the Telecommunications Relay Service (TRS).[^364] According to our
     most recent data, there are 1,348 incumbent LECs, 212 CAPs and
     competitive LECs, 171 IXCs, 24 OSPs, 388 toll resellers, and 54
     local resellers.[^365] Although it seems certain that some of these
     carriers are not independently owned and operated, or have more
     than 1,500 employees, we are unable at this time to estimate with
     greater precision the number of these carriers that would qualify
     as small business concerns under SBA\'s definition. Consequently,
     we estimate that there are fewer than 1,348 incumbent LECs, 212
     CAPs and competitive LECs, 171 IXCs, 24 OSPs, 388 toll resellers,
     and 54 local resellers that may be affected by the decisions and
     rule changes adopted in this Order.

165. *Wireless (Radiotelephone) Carriers.* SBA has developed a
     definition of small entities for radiotelephone (wireless)
     companies. The Census Bureau reports that there were 1,176 such
     companies in operation for at least one year at the end of
     1992.[^366] According to SBA's definition, a small business
     radiotelephone company is one employing no more than 1,500
     persons.[^367] The Census Bureau also reported that 1,164 of those
     radiotelephone companies had fewer than 1,000 employees. Thus, even
     if all of the remaining 12 companies had more than 1,500 employees,
     there would still be 1,164 radiotelephone companies that might
     qualify as small entities if they are independently owned and
     operated. Although it seems certain that some of these carriers are
     not independently owned and operated, we are unable at this time to
     estimate with greater precision the number of radiotelephone
     carriers and service providers that would qualify as small business
     concerns under SBA\'s definition. Consequently, we estimate that
     there are fewer than 1,164 small entity radiotelephone companies
     that may be affected by the decisions and rules in this Order.

166. *Cellular, PCS, SMR and Other Mobile Service Providers.* In an
     effort to further refine our calculation of the number of
     radiotelephone companies that may be affected by the rules adopted
     herein, we consider the data that we collect annually in connection
     with the TRS for the subcategories Wireless Telephony (which
     includes Cellular, PCS, and SMR) and Other Mobile Service
     Providers. Neither the Commission nor the SBA has developed a
     definition of small entities specifically applicable to these broad
     subcategories, so we will utilize the closest applicable definition
     under SBA rules -- which, for both categories, is for telephone
     companies other than radiotelephone (wireless) companies.[^368] To
     the extent that the Commission has adopted definitions for small
     entities providing PCS and SMR services, we discuss those
     definitions below. According to our most recent TRS data, 808
     companies reported that they are engaged in the provision of
     Wireless Telephony services and 23 companies reported that they are
     engaged in the provision of Other Mobile Services.[^369] Although
     it seems certain that some of these carriers are not independently
     owned and operated, or have more than 1,500 employees, we are
     unable at this time to estimate with greater precision the number
     of Wireless Telephony Providers and Other Mobile Service Providers,
     except as described below, that would qualify as small business
     concerns under SBA's definition. Consequently, we estimate that
     there are fewer than 808 small entity Wireless Telephony Providers
     and fewer than 23 small entity Other Mobile Service Providers that
     might be affected by the decisions and rules adopted in this Order.

167. *Broadband PCS Licensees.* The broadband PCS spectrum is divided
     into six frequency blocks designated A through F, and the
     Commission has held auctions for each block. The Commission defined
     "small entity" for Blocks C and F as an entity that has average
     gross revenues of less than \$40 million in the three previous
     calendar years.[^370] For Block F, an additional classification for
     "very small business" was added, and is defined as an entity that,
     together with its affiliates, has average gross revenues of not
     more than \$15 million for the preceding three calendar
     years.[^371] These regulations defining "small entity" in the
     context of broadband PCS auctions have been approved by SBA.[^372]
     No small businesses within the SBA-approved definition bid
     successfully for licenses in Blocks A and B. There were 90 winning
     bidders that qualified as small entities in the Block C auctions. A
     total of 93 small and very small business bidders won approximately
     40 percent of the 1,479 licenses for Blocks D, E, and F. However,
     licenses for Blocks C through F have not been awarded fully,
     therefore there are few, if any, small businesses currently
     providing PCS services. Based on this information, we estimate that
     the number of small broadband PCS licenses will include the 90
     winning C Block bidders and the 93 qualifying bidders in the D, E,
     and F blocks, for a total of 183 small PCS providers as defined by
     SBA and the Commissioner\'s auction rules.

168. *SMR Licensees.* Pursuant to 47 C.F.R. § 90.814(b)(1), the
     Commission has defined "small entity" in auctions for geographic
     area 800 MHz and 900 MHz SMR licenses as a firm that had average
     annual gross revenues of less than \$15 million in the three
     previous calendar years. The definition of a "small entity" in the
     context of 800 MHz SMR has been approved by the SBA,[^373] and
     approval for the 900 MHz SMR definition has been sought. The rules
     may apply to SMR providers in the 800 MHz and 900 MHz bands that
     either hold geographic area licenses or have obtained extended
     implementation authorizations. We do not know how many firms
     provide 800 MHz or 900 MHz geographic area SMR service pursuant to
     extended implementation authorizations, nor how many of these
     providers have annual revenues of less than \$15 million.
     Consequently, we estimate, for purposes of this IRFA, that all of
     the extended implementation authorizations may be held by small
     entities, some of which may be affected by the decisions and rules
     in this Order.

169. The Commission recently held auctions for geographic area licenses
     in the 900 MHz SMR band. There were 60 winning bidders who
     qualified as small entities in the 900 MHz auction. Based on this
     information, we estimate that the number of geographic area SMR
     licensees that may be affected by the decisions and rules in the
     order and order on reconsideration includes these 60 small
     entities. No auctions have been held for 800 MHz geographic area
     SMR licenses. Therefore, no small entities currently hold these
     licenses. A total of 525 licenses will be awarded for the upper 200
     channels in the 800 MHz geographic area SMR auction. The
     Commission, however, has not yet determined how many licenses will
     be awarded for the lower 230 channels in the 800 MHz geographic
     area SMR auction. There is no basis, moreover, on which to estimate
     how many small entities will win these licenses. Given that nearly
     all radiotelephone companies have fewer than 1,000 employees and
     that no reliable estimate of the number of prospective 800 MHz
     licensees can be made, we estimate, for purposes of this IRFA, that
     all of the licenses may be awarded to small entities, some of which
     may be affected by the decisions and rules in this Order.

170. *220 MHz Radio Service -- Phase I Licensees*. The 220 MHz service
     has both Phase I and Phase II licenses. There are approximately
     1,515 such non‑nationwide licensees and four nationwide licensees
     currently authorized to operate in the 220 MHz band. The Commission
     has not developed a definition of small entities specifically
     applicable to such incumbent 220 MHZ Phase I licensees. To estimate
     the number of such licensees that are small businesses, we apply
     the definition under the SBA rules applicable to Radiotelephone
     Communications companies.[^374] According to the Bureau of the
     Census, only 12 radiotelephone firms out of a total of 1,178 such
     firms which operated during 1992 had 1,000 or more employees.[^375]
     Therefore, if this general ratio continues to 1999 in the context
     of Phase I 220 MHz licensees, we estimate that nearly all such
     licensees are small businesses under the SBA's definition.

171. *220 MHz Radio Service -- Phase II Licensees*. The Phase II 220 MHz
     service is a new service, and is subject to spectrum auctions. In
     the 220 MHz *Third Report and Order* we adopted criteria for
     defining small businesses and very small businesses for purposes of
     determining their eligibility for special provisions such as
     bidding credits and installment payments.[^376] We have defined a
     small business as an entity that, together with its affiliates and
     controlling principals, has average gross revenues not exceeding
     \$15 million for the preceding three years. Additionally, a very
     small business is defined as an entity that, together with its
     affiliates and controlling principals, has average gross revenues
     that are not more than \$3 million for the preceding three
     years.[^377] An auction of Phase II licenses commenced on September
     15, 1998, and closed on October 22, 1998.[^378] 908 licenses were
     auctioned in 3 different‑sized geographic areas: three nationwide
     licenses, 30 Regional Economic Area Group Licenses, and 875
     Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693
     were sold. Companies claiming small business status won: one of the
     Nationwide licenses, 67 percent of the Regional licenses, and 54
     percent of the EA licenses. As of January 22, 1999, the Commission
     announced that it was prepared to grant 654 of the Phase II
     licenses won at auction.[^379] A reauction of the remaining, unsold
     licenses was completed on June 30, 1999, with 16 bidders winning
     222 of the Phase II licenses.[^380] As a result, we estimate that
     16 or fewer of these final winning bidders are small or very small
     businesses.

172. *Narrowband PCS*. The Commission has auctioned nationwide and
     regional licenses for narrowband PCS. There are 11 nationwide and
     30 regional licensees for narrowband PCS. The Commission does not
     have sufficient information to determine whether any of these
     licensees are small businesses within the SBA-approved definition
     for radiotelephone companies. At present, there have been no
     auctions held for the major trading area (MTA) and basic trading
     area (BTA) narrowband PCS licenses. The Commission anticipates a
     total of 561 MTA licenses and 2,958 BTA licenses will be awarded by
     auction. Such auctions have not yet been scheduled, however. Given
     that nearly all radiotelephone companies have no more than 1,500
     employees and that no reliable estimate of the number of
     prospective MTA and BTA narrowband licensees can be made, we
     assume, for purposes of this FRFA, that all of the licenses will be
     awarded to small entities, as that term is defined by the SBA.

173. *Rural Radiotelephone Service*. The Commission has not adopted a
     definition of small entity specific to the Rural Radiotelephone
     Service.[^381] A significant subset of the Rural Radiotelephone
     Service is the Basic Exchange Telephone Radio Systems
     (BETRS).[^382] We will use the SBA\'s definition applicable to
     radiotelephone companies, *i.e.*, an entity employing no more than
     1,500 persons.[^383] There are approximately 1,000 licensees in the
     Rural Radiotelephone Service, and we estimate that almost all of
     them qualify as small entities under the SBA\'s definition.

174. *Air-Ground Radiotelephone Service*. The Commission has not adopted
     a definition of small entity specific to the Air-Ground
     Radiotelephone Service.[^384] Accordingly, we will use the SBA's
     definition applicable to radiotelephone companies, *i.e.*, an
     entity employing no more than 1,500 persons.[^385] There are
     approximately 100 licensees in the Air-Ground Radiotelephone
     Service, and we estimate that almost all of them qualify as small
     entities under the SBA definition.

175. *Fixed Microwave Services*. Microwave services include common
     carrier,[^386] private‑operational fixed,[^387] and broadcast
     auxiliary radio services.[^388] At present, there are approximately
     22,015 common carrier fixed licensees in the microwave services.
     The Commission has not yet defined a small business with respect to
     microwave services. For purposes of this IRFA, we will utilize the
     SBA\'s definition applicable to radiotelephone companies \--
     *i.e.*, an entity with no more than 1,500 persons.[^389] We
     estimate, for this purpose, that all of the Fixed Microwave
     licensees (excluding broadcast auxiliary licensees) would qualify
     as small entities under the SBA definition for radiotelephone
     companies.

176. *Wireless Communications Services*. This service can be used for
     fixed, mobile, radio location and digital audio broadcasting
     satellite uses. The Commission defined "small business" for the
     wireless communications services (WCS) auction as an entity with
     average gross revenues of \$40 million for each of the three
     preceding years, and a "very small business" as an entity with
     average gross revenues of \$15 million for each of the three
     preceding years. The Commission auctioned geographic area licenses
     in the WCS service. In the auction, there were seven winning
     bidders that qualified as very small business entities, and one
     that qualified as a small business entity. We conclude that the
     number of geographic area WCS licensees that may be affected by the
     decisions and rules in this Order includes these eight entities.

177. *Multipoint Distribution Systems (MDS).* The Commission has defined
     "small entity" for the auction of MDS as an entity that, together
     with its affiliates, has average gross annual revenues that are not
     more than \$40 million for the preceding three calendar
     years.[^390] This definition of a small entity in the context of
     MDS auctions has been approved by the SBA.[^391] The Commission
     completed its MDS auction in March 1996 for authorizations in 493
     basic trading areas (BTAs). Of 67 winning bidders, 61 qualified as
     small entities.[^392]

178. MDS is also heavily encumbered with licensees of stations
     authorized prior to the auction. The SBA has developed a definition
     of small entities for pay television services, which includes all
     such companies generating \$11 million or less in annual
     receipts.[^393] This definition includes multipoint distribution
     systems, and thus applies to MDS licensees and wireless cable
     operators which did not participate in the MDS auction. Information
     available to us indicates that there are 832 of these licensees and
     operators that do not generate revenue in excess of \$11 million
     annually. Therefore, for purposes of this FRFA, we find there are
     approximately 892 small MDS providers as defined by the SBA and the
     Commission's auction rules, some which may be affected by the
     decisions and rules in this Order.

### Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements

179. In this Order, we adopt revisions to Part 54 that enhance universal
     service support for low-income individuals living on tribal lands,
     that remove certain administrative burdens that have prevented
     carriers not subject to state rate regulation, such as many tribal
     carriers, from providing certain tiers of Lifeline service to
     qualifying low-income consumers, and that clarify how the
     Commission will proceed under section 214(e) of the Act in the
     designation of eligible telecommunications carriers.

180. With respect to our rules enhancing Lifeline and Link-Up assistance
     on tribal lands, carriers will be required to ascertain applicant
     eligibility for these forms of low-income universal service
     support. Ascertainment of applicant eligibility will entail
     determining whether a particular applicant is (1) a low-income
     applicant, under the criteria for income eligibility set forth
     above;[^394] and (2) living on or near a reservation. This Order
     also clarifies and elaborates on carrier obligations to publicize
     the availability of Lifeline and Link-Up assistance, although no
     new carrier obligations are imposed. Furthermore, this Order
     changes the requirements placed upon carriers for the provision of
     second-tier and third-tier Lifeline support. A carrier not subject
     to state rate regulation may now obtain second-tier Lifeline
     support provided it certifies to the Administrator that it will
     pass through the full amount of any second-tier support it receives
     to qualifying low income subscribers, and that it has received any
     non-federal regulatory approvals necessary to implement the
     required rate reduction. Such a carrier also may now obtain
     third-tier Lifeline support provided that the carrier or a tribe
     provides the local matching funds necessary to receive third-tier
     federal Lifeline support. Finally, because carriers are required to
     make low-income assistance available to qualifying customers, the
     rules and decisions in this Order expanding the level and types of
     support available to any carrier's customers will require that
     carrier to make such expanded support available to its qualifying
     customers.

181. Our clarification of how the Commission will proceed under section
     214(e) of the Act in the designation of eligible telecommunications
     carriers will impose no additional reporting, recordkeeping, or
     other compliance requirements on carriers seeking eligible
     telecommunications carrier designation for the provision of service
     on tribal lands, but instead should diminish some carriers' legal
     costs by setting forth guidelines for carriers seeking such
     designation from the Commission. A state government, however,
     seeking to preserve a claim of its jurisdiction over any carrier
     seeking such designation from the Commission, will have to indicate
     to the Commission its jurisdictional claim in order for the
     Commission to refrain from entertaining such a designation
     proceeding until the state makes a final determination on its
     jurisdiction over that carrier.

### Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered

182. With respect to our rules enhancing Lifeline and LinkUp assistance
     on tribal lands, we emphasize that most of the information carriers
     will be required to examine in order to determine applicant
     eligibility are already collected pursuant to other federal
     programs for Indians and for low-income individuals, and are
     readily available. For example, BIA maintains and regularly
     publishes in the Federal Register lists of those areas in the
     Nation which fall under BIA's definition of "reservation" or are
     considered "near reservation." Moreover, carriers are already
     required to determine applicants' income eligibility under the
     existing Lifeline and LinkUp support mechanisms; this Order
     modifies those eligibility criteria merely by providing certain
     additional means-tested programs that low-income individuals living
     on tribal lands may use to establish their income eligibility. In
     order to apply these new eligibility criteria, carriers will not be
     required to make *de novo* evaluations of subscriber eligibility.
     Rather, carriers will only need to consult the decisions regarding
     particular applicants' low-income status already made by other
     government entities. Thus, the inquiry carriers will have to make
     to determine whether an applicant for the low-income support
     adopted in this Order meets the income eligibility requirement
     should not be substantially different from the inquiry carriers
     must already make for the Commission's existing low-income support
     mechanisms. Furthermore, our clarification of carrier obligations
     to publicize the availability of Lifeline and Link-Up assistance
     does not expand existing obligations or create additional ones;
     rather, this Order clarifies existing obligations under section
     214(e) of the Act and our previous Orders.[^395] Additionally, the
     certifications required by our new rules for second and third tier
     Lifeline support impose at most a minimal burden on carriers
     seeking to obtain such support. Finally, to the extent the rules
     and decisions adopted in this Order require carriers to change
     their operations in order to deliver expanded support to qualifying
     customers, for example by changing their billing systems, we have
     some indication that the costs of making such modifications, if
     any, are minimal.[^396] Furthermore, to the extent the rules and
     decisions adopted in this Order entail any such costs, they also
     provide substantial financial benefits, by providing carriers with
     guaranteed revenue streams in place of billings subject to the
     risks of non-collection. We conclude that, in general, the
     compliance requirements entailed by the low-income support
     mechanisms adopted in this Order are not of a scope or magnitude
     substantially different from the compliance requirements entailed
     by our existing low-income support mechanisms.

183. With respect to our clarification of how the Commission will
     proceed under section 214(e) of the Act in the designation of
     eligible telecommunications carriers we conclude that the cost to a
     state government of filing with the Commission a statement
     asserting jurisdiction over any carrier seeking such designation
     for the provision of service to tribal lands, in order for the
     Commission to refrain from acting on the designation petition until
     the state makes a final determination regarding its jurisdiction
     over that carrier, will be minimal. Furthermore, because such
     filings would be made by the authorized state government body,
     rather than a local governing authority, it is doubtful that any
     government authority making such a filing with the Commission would
     be considered a small entity.[^397]

### Report to Congress.

184. The Commission will send a copy of this Order, including this FRFA,
     in a report to be sent to Congress pursuant to the Small Business
     Regulatory Enforcement Fairness Act of 1996, *see* 5 U.S.C. §
     801(a)(1)(A). In addition, the Commission will send a copy of the
     Order, including FRFA, to the Chief Counsel for Advocacy of the
     Small Business Administration. A copy of the Order and FRFA (or
     summaries thereof) will also be published in the Federal Register.
     *See* 5 U.S.C. § 604(b).

# Effective Date of Final Rules

185. Pursuant to 5 U.S.C. § 553(d),[^398] the rules and rule changes
     adopted herein shall take effect thirty (30) days after their
     publication in the Federal Register.

# Initial regulatory flexibility analysis

186. As required by the Regulatory Flexibility Act (RFA),[^399] the
     Commission has prepared this Initial Regulatory Flexibility
     Analysis (IRFA) of the possible significant economic impact on
     small entities by the policies and rules proposed in this Further
     Notice of Proposed Rulemaking. Written public comments are
     requested on this IRFA. Comments must be identified as responses to
     the IRFA and must be filed by the deadlines for comments on the
     Further Notice provided below in section VI.E. The Commission will
     send a copy of the Further Notice, including this IRFA, to the
     Chief Counsel for Advocacy of the Small Business
     Administration.[^400] In addition, the Further Notice and IRFA (or
     summaries thereof) will be published in the Federal Register.[^401]

### Need for and Objectives of the Proposed Rules

187. The Commission issues the Further Notice of Proposed Rulemaking
     contained herein as a part of its implementation of the Act's
     mandate that "\[c\]onsumers in all regions of the Nation . . . have
     access to telecommunications and information services . . .
     .".[^402] The Further Notice seeks comment on rules setting a
     deadline for the consideration of petitions for designation of
     carriers as eligible telecommunications carriers under section
     214(e) of the Act [^403] for the purposes of receiving universal
     service support under section 254(e).[^404] The Further Notice also
     seeks comment on alternative methods for facilitating expeditious
     resolution of eligibility designation requests. Our objective is to
     fulfill section 254's mandate that "all regions of the Nation . . .
     have access to telecommunications" with respect to tribal lands,
     which have the lowest reported subscribership levels for
     telecommunications in the Nation.[^405]

### Legal Basis

188. The legal basis as proposed for this Further Notice is contained in
     section 254 of the Communications Act of 1934, as amended by the
     Telecommunications Act of 1996, 47 U.S.C. § 254.

### Description and Estimate of the Number of Small Entities To Which Rules Will Apply

189. The RFA directs agencies to provide a description of and, where
     feasible, an estimate of the number of small entities that may be
     affected by the proposed rules.[^406] The RFA generally defines the
     term "small entity" as having the same meaning as the terms "small
     business," "small organization," and "small governmental
     jurisdiction."[^407] In addition, the term "small business" has the
     same meaning as the term "small business concern" under the Small
     Business Act.[^408] A small business concern is one that: (1) is
     independently owned and operated; (2) is not dominant in its field
     of operation; and (3) satisfies any additional criteria established
     by the Small Business Administration (SBA).[^409] A small
     organization is generally "any not-for-profit enterprise which is
     independently owned and operated and is not dominant in its
     field."[^410] Nationwide, as of 1992, there were approximately
     275,801 small organizations.[^411] And finally, "small governmental
     jurisdiction" generally means "governments of cities, counties,
     towns, townships, villages, school districts, or special districts,
     with a population of less than 50,000."[^412] As of 1992, there
     were approximately 85,006 such jurisdictions in the United
     States.[^413] This number includes 38,978 counties, cities, and
     towns; of these, 37,566, or 96 percent, have populations of fewer
     than 50,000.[^414] The Census Bureau estimates that this ratio is
     approximately accurate for all governmental entities. Thus, of the
     85,006 governmental entities, we estimate that 81,600 (91 percent)
     are small entities. The new rules proposed in this Further Notice
     may affect all providers of interstate telecommunications and
     interstate telecommunications services. Below, we further describe
     and estimate the number of small business concerns that may be
     affected by the rules proposed in this Further Notice.

190. The SBA has defined a small business for Standard Industrial
     Classification (SIC) categories 4812 (Radiotelephone
     Communications) and 4813 (Telephone Communications, Except
     Radiotelephone) to be small entities when they have no more than
     1,500 employees.[^415] We first discuss the number of small
     telephone companies falling within these SIC categories, then
     attempt to refine further those estimates to correspond with the
     categories of telecommunications companies that are commonly used
     under our rules.

191. The most reliable source of information regarding the total numbers
     of common carrier and related providers nationwide, including the
     numbers of commercial wireless entities, appears to be data the
     Commission publishes annually in its *Carrier Locator* report,
     derived from filings made in connection with the Telecommunications
     Relay Service (TRS).[^416] According to data in the most recent
     report, there are 4,144 interstate carriers.[^417] These carriers
     include, *inter alia*, incumbent local exchange carriers,
     competitive local exchange carriers, competitive access providers,
     interexchange carriers, other wireline carriers and service
     providers (including shared-tenant service providers and private
     carriers), operator service providers, pay telephone operators,
     providers of telephone toll service, wireless carriers and services
     providers, and resellers.

192. We have included small incumbent LECs in this present RFA analysis.
     As noted above, a "small business" under the RFA is one that,
     *inter alia*, meets the pertinent small business size standard
     (*e.g.*, a telephone communications business having 1,500 or fewer
     employees), and "is not dominant in its field of operation."[^418]
     The SBA\'s Office of Advocacy contends that, for RFA purposes,
     small incumbent LECs are not dominant in their field of operation
     because any such dominance is not "national" in scope.[^419] We
     have therefore included small incumbent LECs in this RFA analysis,
     although we emphasize that this RFA action has no effect on
     Commission analyses and determinations in other, non-RFA contexts.

193. *Total Number of Telephone Companies Affected.* The United States
     Bureau of the Census ("the Census Bureau") reports that, at the end
     of 1992, there were 3,497 firms engaged in providing telephone
     services, as defined therein, for at least one year.[^420] This
     number contains a variety of different categories of carriers,
     including local exchange carriers, interexchange carriers,
     competitive access providers, cellular carriers, mobile service
     carriers, operator service providers, pay telephone operators, PCS
     providers, covered SMR providers, and resellers. It seems certain
     that some of those 3,497 telephone service firms may not qualify as
     small entities or small incumbent LECs because they are not
     "independently owned and operated."[^421] For example, a PCS
     provider that is affiliated with an interexchange carrier having
     more than 1,500 employees would not meet the definition of a small
     business. It seems reasonable to conclude, therefore, that fewer
     than 3,497 telephone service firms are small entity telephone
     service firms or small incumbent LECs that may be affected by the
     rules proposed in this Further Notice.

194. *Wireline Carriers and Service Providers.* SBA has developed a
     definition of small entities for telephone communications companies
     other than radiotelephone companies. The Census Bureau reports
     that, there were 2,321 such telephone companies in operation for at
     least one year at the end of 1992.[^422] According to SBA\'s
     definition, a small business telephone company other than a
     radiotelephone company is one employing no more than 1,500
     persons.[^423] All but 26 of the 2,321 non-radiotelephone companies
     listed by the Census Bureau were reported to have fewer than 1,000
     employees. Thus, even if all 26 of those companies had more than
     1,500 employees, there would still be 2,295 non-radiotelephone
     companies that might qualify as small entities or small incumbent
     LECs. Although it seems certain that some of these carriers are not
     independently owned and operated, we are unable at this time to
     estimate with greater precision the number of wireline carriers and
     service providers that would qualify as small business concerns
     under SBA's definition. Consequently, we estimate that there are
     fewer than 2,295 small entity telephone communications companies
     other than radiotelephone companies that may be affected by the
     rules proposed in this Further Notice.

195. *Local Exchange Carriers*, *Interexchange Carriers, Competitive
     Access Providers, Operator Service Providers, and Resellers*.
     Neither the Commission nor SBA has developed a definition
     particular to small local exchange carriers (LECs), interexchange
     carriers (IXCs), competitive access providers (CAPs), operator
     service providers (OSPs), or resellers. The closest applicable
     definition for these carrier-types under SBA rules is for telephone
     communications companies other than radiotelephone (wireless)
     companies.[^424] The most reliable source of information regarding
     the number of these carriers nationwide of which we are aware
     appears to be the data that we collect annually in connection with
     the Telecommunications Relay Service (TRS).[^425] According to our
     most recent data, there are 1,348 incumbent LECs, 212 CAPs and
     competitive LECs, 171 IXCs, 24 OSPs, 388 toll resellers, and 54
     local resellers.[^426] Although it seems certain that some of these
     carriers are not independently owned and operated, or have more
     than 1,500 employees, we are unable at this time to estimate with
     greater precision the number of these carriers that would qualify
     as small business concerns under SBA\'s definition. Consequently,
     we estimate that there are fewer than 1,348 incumbent LECs, 212
     CAPs and competitive LECs, 171 IXCs, 24 OSPs, 388 toll resellers,
     and 54 local resellers that may be affected by the rules proposed
     in this Further Notice.

196. *Wireless (Radiotelephone) Carriers.* SBA has developed a
     definition of small entities for radiotelephone (wireless)
     companies. The Census Bureau reports that there were 1,176 such
     companies in operation for at least one year at the end of
     1992.[^427] According to SBA's definition, a small business
     radiotelephone company is one employing no more than 1,500
     persons.[^428] The Census Bureau also reported that 1,164 of those
     radiotelephone companies had fewer than 1,000 employees. Thus, even
     if all of the remaining 12 companies had more than 1,500 employees,
     there would still be 1,164 radiotelephone companies that might
     qualify as small entities if they are independently owned and
     operated. Although it seems certain that some of these carriers are
     not independently owned and operated, we are unable at this time to
     estimate with greater precision the number of radiotelephone
     carriers and service providers that would qualify as small business
     concerns under SBA\'s definition. Consequently, we estimate that
     there are fewer than 1,164 small entity radiotelephone companies
     that may be affected by the rules proposed in this Further Notice.

197. *Cellular, PCS, SMR and Other Mobile Service Providers.* In an
     effort to further refine our calculation of the number of
     radiotelephone companies that may be affected by the rules proposed
     herein, we consider the data that we collect annually in connection
     with the TRS for the subcategories Wireless Telephony (which
     includes Cellular, PCS, and SMR) and Other Mobile Service
     Providers. Neither the Commission nor the SBA has developed a
     definition of small entities specifically applicable to these broad
     subcategories, so we will utilize the closest applicable definition
     under SBA rules -- which, for both categories, is for telephone
     companies other than radiotelephone (wireless) companies.[^429] To
     the extent that the Commission has adopted definitions for small
     entities providing PCS and SMR services, we discuss those
     definitions below. According to our most recent TRS data, 808
     companies reported that they are engaged in the provision of
     Wireless Telephony services and 23 companies reported that they are
     engaged in the provision of Other Mobile Services.[^430] Although
     it seems certain that some of these carriers are not independently
     owned and operated, or have more than 1,500 employees, we are
     unable at this time to estimate with greater precision the number
     of Wireless Telephony Providers and Other Mobile Service Providers,
     except as described below, that would qualify as small business
     concerns under SBA's definition. Consequently, we estimate that
     there are fewer than 808 small entity Wireless Telephony Providers
     and fewer than 23 small entity Other Mobile Service Providers that
     might be affected by the rules proposed in this Further Notice.

198. *Broadband PCS Licensees.* The broadband PCS spectrum is divided
     into six frequency blocks designated A through F, and the
     Commission has held auctions for each block. The Commission defined
     "small entity" for Blocks C and F as an entity that has average
     gross revenues of less than \$40 million in the three previous
     calendar years.[^431] For Block F, an additional classification for
     "very small business" was added, and is defined as an entity that,
     together with its affiliates, has average gross revenues of not
     more than \$15 million for the preceding three calendar
     years.[^432] These regulations defining "small entity" in the
     context of broadband PCS auctions have been approved by SBA.[^433]
     No small businesses within the SBA-approved definition bid
     successfully for licenses in Blocks A and B. There were 90 winning
     bidders that qualified as small entities in the Block C auctions. A
     total of 93 small and very small business bidders won approximately
     40 percent of the 1,479 licenses for Blocks D, E, and F. However,
     licenses for Blocks C through F have not been awarded fully,
     therefore there are few, if any, small businesses currently
     providing PCS services. Based on this information, we estimate that
     the number of small broadband PCS licenses will include the 90
     winning C Block bidders and the 93 qualifying bidders in the D, E,
     and F blocks, for a total of 183 small PCS providers as defined by
     SBA and the Commissioner\'s auction rules.

199. *SMR Licensees.* Pursuant to section 90.814(b)(1) of the
     Commission's rules, 47 C.F.R. § 90.814(b)(1), the Commission has
     defined "small entity" in auctions for geographic area 800 MHz and
     900 MHz SMR licenses as a firm that had average annual gross
     revenues of less than \$15 million in the three previous calendar
     years. The definition of a "small entity" in the context of 800 MHz
     SMR has been approved by the SBA,[^434] and approval for the 900
     MHz SMR definition has been sought. The rules may apply to SMR
     providers in the 800 MHz and 900 MHz bands that either hold
     geographic area licenses or have obtained extended implementation
     authorizations. We do not know how many firms provide 800 MHz or
     900 MHz geographic area SMR service pursuant to extended
     implementation authorizations, nor how many of these providers have
     annual revenues of less than \$15 million. Consequently, we
     estimate, for purposes of this IRFA, that all of the extended
     implementation authorizations may be held by small entities, some
     of which may be affected by the decisions and rules in this Order.

200. The Commission recently held auctions for geographic area licenses
     in the 900 MHz SMR band. There were 60 winning bidders who
     qualified as small entities in the 900 MHz auction. Based on this
     information, we estimate that the number of geographic area SMR
     licensees that may be affected by the decisions and rules in the
     order and order on reconsideration includes these 60 small
     entities. No auctions have been held for 800 MHz geographic area
     SMR licenses. Therefore, no small entities currently hold these
     licenses. A total of 525 licenses will be awarded for the upper 200
     channels in the 800 MHz geographic area SMR auction. The
     Commission, however, has not yet determined how many licenses will
     be awarded for the lower 230 channels in the 800 MHz geographic
     area SMR auction. There is no basis, moreover, on which to estimate
     how many small entities will win these licenses. Given that nearly
     all radiotelephone companies have fewer than 1,000 employees and
     that no reliable estimate of the number of prospective 800 MHz
     licensees can be made, we estimate, for purposes of this IRFA, that
     all of the licenses may be awarded to small entities, some of which
     may be affected by the rules proposed in this Further Notice.

201. *220 MHz Radio Service -- Phase I Licensees*. The 220 MHz service
     has both Phase I and Phase II licenses. There are approximately
     1,515 such non‑nationwide licensees and four nationwide licensees
     currently authorized to operate in the 220 MHz band. The Commission
     has not developed a definition of small entities specifically
     applicable to such incumbent 220 MHZ Phase I licensees. To estimate
     the number of such licensees that are small businesses, we apply
     the definition under the SBA rules applicable to Radiotelephone
     Communications companies.[^435] According to the Bureau of the
     Census, only 12 radiotelephone firms out of a total of 1,178 such
     firms which operated during 1992 had 1,000 or more employees.[^436]
     Therefore, if this general ratio continues to 1999 in the context
     of Phase I 220 MHz licensees, we estimate that nearly all such
     licensees are small businesses under the SBA's definition.

202. *220 MHz Radio Service -- Phase II Licensees*. The Phase II 220 MHz
     service is a new service, and is subject to spectrum auctions. In
     the 220 MHz *Third Report and Order* we adopted criteria for
     defining small businesses and very small businesses for purposes of
     determining their eligibility for special provisions such as
     bidding credits and installment payments.[^437] We have defined a
     small business as an entity that, together with its affiliates and
     controlling principals, has average gross revenues not exceeding
     \$15 million for the preceding three years. Additionally, a very
     small business is defined as an entity that, together with its
     affiliates and controlling principals, has average gross revenues
     that are not more than \$3 million for the preceding three
     years.[^438] An auction of Phase II licenses commenced on September
     15, 1998, and closed on October 22, 1998.[^439] 908 licenses were
     auctioned in 3 different‑sized geographic areas: three nationwide
     licenses, 30 Regional Economic Area Group Licenses, and 875
     Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693
     were sold. Companies claiming small business status won: one of the
     Nationwide licenses, 67 percent of the Regional licenses, and 54
     percent of the EA licenses. As of January 22, 1999, the Commission
     announced that it was prepared to grant 654 of the Phase II
     licenses won at auction.[^440] A reauction of the remaining, unsold
     licenses was completed on June 30, 1999, with 16 bidders winning
     222 of the Phase II licenses.[^441] As a result, we estimate that
     16 or fewer of these final winning bidders are small or very small
     businesses.

203. *Narrowband PCS*. The Commission has auctioned nationwide and
     regional licenses for narrowband PCS. There are 11 nationwide and
     30 regional licensees for narrowband PCS. The Commission does not
     have sufficient information to determine whether any of these
     licensees are small businesses within the SBA-approved definition
     for radiotelephone companies. At present, there have been no
     auctions held for the major trading area (MTA) and basic trading
     area (BTA) narrowband PCS licenses. The Commission anticipates a
     total of 561 MTA licenses and 2,958 BTA licenses will be awarded by
     auction. Such auctions have not yet been scheduled, however. Given
     that nearly all radiotelephone companies have no more than 1,500
     employees and that no reliable estimate of the number of
     prospective MTA and BTA narrowband licensees can be made, we
     assume, for purposes of this IRFA, that all of the licenses will be
     awarded to small entities, as that term is defined by the SBA.

204. *Rural Radiotelephone Service*. The Commission has not adopted a
     definition of small entity specific to the Rural Radiotelephone
     Service.[^442] A significant subset of the Rural Radiotelephone
     Service is the Basic Exchange Telephone Radio Systems
     (BETRS).[^443] We will use the SBA\'s definition applicable to
     radiotelephone companies, *i.e.*, an entity employing no more than
     1,500 persons.[^444] There are approximately 1,000 licensees in the
     Rural Radiotelephone Service, and we estimate that almost all of
     them qualify as small entities under the SBA\'s definition.

205. *Air-Ground Radiotelephone Service*. The Commission has not adopted
     a definition of small entity specific to the Air-Ground
     Radiotelephone Service.[^445] Accordingly, we will use the SBA's
     definition applicable to radiotelephone companies, *i.e.*, an
     entity employing no more than 1,500 persons.[^446] There are
     approximately 100 licensees in the Air-Ground Radiotelephone
     Service, and we estimate that almost all of them qualify as small
     entities under the SBA definition.

206. *Fixed Microwave Services*. Microwave services include common
     carrier,[^447] private‑operational fixed,[^448] and broadcast
     auxiliary radio services.[^449] At present, there are approximately
     22,015 common carrier fixed licensees in the microwave services.
     The Commission has not yet defined a small business with respect to
     microwave services. For purposes of this IRFA, we will utilize the
     SBA\'s definition applicable to radiotelephone companies \--
     *i.e.*, an entity with no more than 1,500 persons.[^450] We
     estimate, for this purpose, that all of the Fixed Microwave
     licensees (excluding broadcast auxiliary licensees) would qualify
     as small entities under the SBA definition for radiotelephone
     companies.

207. *Wireless Communications Services*. This service can be used for
     fixed, mobile, radio location and digital audio broadcasting
     satellite uses. The Commission defined "small business" for the
     wireless communications services (WCS) auction as an entity with
     average gross revenues of \$40 million for each of the three
     preceding years, and a "very small business" as an entity with
     average gross revenues of \$15 million for each of the three
     preceding years. The Commission auctioned geographic area licenses
     in the WCS service. In the auction, there were seven winning
     bidders that qualified as very small business entities, and one
     that qualified as a small business entity. We conclude that the
     number of geographic area WCS licensees that may be affected by the
     rules proposed in this Further Notice includes these eight
     entities.

208. *Multipoint Distribution Systems (MDS).* The Commission has defined
     "small entity" for the auction of MDS as an entity that, together
     with its affiliates, has average gross annual revenues that are not
     more than \$40 million for the preceding three calendar
     years.[^451] This definition of a small entity in the context of
     MDS auctions has been approved by the SBA.[^452] The Commission
     completed its MDS auction in March 1996 for authorizations in 493
     basic trading areas (BTAs). Of 67 winning bidders, 61 qualified as
     small entities.[^453]

209. MDS is also heavily encumbered with licensees of stations
     authorized prior to the auction. The SBA has developed a definition
     of small entities for pay television services, which includes all
     such companies generating \$11 million or less in annual
     receipts.[^454] This definition includes multipoint distribution
     systems, and thus applies to MDS licensees and wireless cable
     operators which did not participate in the MDS auction. Information
     available to us indicates that there are 832 of these licensees and
     operators that do not generate revenue in excess of \$11 million
     annually. Therefore, for purposes of this IRFA, we find there are
     approximately 892 small MDS providers as defined by the SBA and the
     Commission's auction rules, some which may be affected by the rules
     proposed in this Further Notice.

### Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements

210. Currently, there is no deadline for the consideration of petitions
     for designation of carriers as eligible telecommunications carriers
     under section 214(e) of the Act [^455] for the purposes of
     receiving universal service support under section 254(e).[^456]
     Under the rules proposed in the Further Notice, state commissions
     and the Commission would each have a set time frame within which to
     consider such petitions before them.

### Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered

211. Wherever possible, the Further Notice proposes general rules, or
     alternative rules to reduce the administrative burden and cost of
     compliance for small telecommunications service providers. Finally,
     the Further Notice seeks comment on measures to avoid significant
     economic impact on small business entities, as defined by section
     601(3) of the Regulatory Flexibility Act.

### Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules.

212. None.

# Comment Dates and Filing Procedures

213. We invite comment on the issues and questions set forth in the
     Further Notice of Proposed Rulemaking and Initial Regulatory
     Flexibility Analysis contained herein. Pursuant to applicable
     procedures set forth in sections 1.415 and 1.419 of the
     Commission's rules,[^457] interested parties may file comments as
     follows: comments are due **August 7, 2000,** and reply comments
     are due **August 28, 2000**. Comments may be filed using the
     Commission's Electronic Comment Filing System (ECFS) or by filing
     paper copies. *See* Electronic Filing of Documents in Rulemaking
     Proceedings, 63 Fed. Reg. 24,121 (1998).

214. Comments filed through the ECFS can be sent as an electronic file
     via the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>.
     Generally, only one copy of an electronic submission must be filed.
     If multiple docket or rulemaking numbers appear in the caption of
     this proceeding, however, commenters must transmit one electronic
     copy of the comments to each docket or rulemaking number referenced
     in the caption. In completing the transmittal screen, commenters
     should include their full name, Postal Service mailing address, and
     the applicable docket or rulemaking number. Parties may also submit
     electronic comments by Internet e-mail. To receive filing
     instructions for e-mail comments, commenters should send an e-mail
     to ecfs@fcc.gov, and should include the following words in the body
     of the message, "get form \<your e-mail address\>." A sample form
     and directions will be sent in reply.

215. Parties who choose to file by paper must file an original and four
     copies of each filing. If more than one docket or rulemaking number
     appears in the caption of this proceeding, commenters must submit
     two additional copies for each additional docket or rulemaking
     number. All filings must be sent to the Commission's Secretary,
     Magalie Roman Salas, Office of the Secretary, Federal
     Communications Commission, 445 12th Street, S.W., Washington,
     D.C. 20554. Parties also should send three paper copies of their
     filing to Sheryl Todd, Accounting Policy Division, Common Carrier
     Bureau, Federal Communications Commission, 445 Twelfth Street,
     S.W., Room 5-B540, Washington, D.C. 20554.

216. Parties who choose to file by paper should also submit their
     comments on diskette to Sheryl Todd, Accounting Policy Division,
     Common Carrier Bureau, Federal Communications Commission, 445
     Twelfth Street, S.W., Room 5-B540, Washington, D.C. 20554. Such a
     submission should be on a 3.5 inch diskette formatted in an
     IBM-compatible format using Microsoft Word 97 for Windows or a
     compatible software. The diskette should be accompanied by a cover
     letter and should be submitted in "read-only" mode. The diskette
     should be clearly labeled with the commenter's name, proceeding,
     including the lead docket number in the proceeding (CC Docket No.
     96-45), type of pleading (comment or reply comment), date of
     submission, and the name of the electronic file on the diskette.
     The label should also include the following phrase ("Disk Copy Not
     an Original.") Each diskette should contain only one party's
     pleadings, preferably in a single electronic file. In addition,
     commenters must send diskette copies to the Commission's copy
     contractor, International Transcription Service, Inc., 1231 20th
     Street, N.W., Washington, D.C. 20037.

# ordering clauses

217. Accordingly, IT IS ORDERED that, pursuant to the authority
     contained in sections 1-4, 201-205, 218-220, 254, 303(r), and 403
     of the Communications Act of 1934, as amended, 47 U.S.C. §§
     151-154, 201-205, 218-220, 254, 303(r), 403, this REPORT AND ORDER,
     MEMORANDUM OPINION AND ORDER, AND FURTHER NOTICE OF PROPOSED
     RULEMAKING IS ADOPTED. The collections of information contained
     within this Order are contingent upon approval by the Office of
     Management and Budget. The Commission will publish a notice
     announcing the effective date of the collections of information.

218. IT IS FURTHER ORDERED that Part 54 of the Commission's rules, 47
     C.F.R. Part 54, IS AMENDED as set forth in Appendix A attached
     hereto, effective thirty (30) days after the publication of this
     REPORT AND ORDER, MEMORANDUM OPINION AND ORDER, AND FURTHER NOTICE
     OF PROPOSED RULEMAKING in the Federal Register.

219. IT IS FURTHER ORDERED that Cellco's Petition for Designation as an
     Eligible Telecommunications Carrier IS DISMISSED WITHOUT PREJUDICE
     to the extent that it seeks designation for service in Maryland.

220. IT IS FURTHER ORDERED that Smith Bagley's Petition for Designation
     as an Eligible Telecommunications Carrier is DISMISSED WITHOUT
     PREJUDICE.

221. IT IS FURTHER ORDERED that the record in Western Wireless' Petition
     for Designation as an Eligible Telecommunications Carrier on the
     Crow Reservation SHALL BE REOPENED, as discussed herein.

222. IT IS FUTHER ORDERED that Cheyenne River Sioux Tribe Telephone
     Authority's Petition for Designation as an Eligible
     Telecommunications Carrier is DISMISSED WITHOUT PREJUDICE.

223. IT IS FURTHER ORDERED that AUTHORITY IS DELEGATED to the CHIEF OF
     THE COMMON CARRIER BUREAU pursuant to section 0.291 of the
     Commission rules, 47 C.F.R. § 0.291, to modify, or require the
     filing of, any forms that are necessary to implement the decisions
     and rules adopted in this Order.

224. IT IS FURTHER ORDERED that the Commission's Consumer Information
     Bureau, Reference Information Center, SHALL SEND a copy of this
     Order, including the Final Regulatory Flexibility Analysis, to the
     Chief Counsel for Advocacy of the Small Business Administration.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Magalie Roman Salas
>
> Secretary

**APPENDIX A**

**FINAL RULES**

1\. Section 54.400 is amended by revising paragraph (a) and adding
paragraph (e) to read as follows:

§ 54.400 Terms and definitions.

\* \* \* \* \*

\(a\) *[Qualifying low-income consumer]{.underline}*. A "qualifying
low-income consumer" is a consumer who meets the qualifications for
Lifeline, as specified in § 54.409.

\* \* \* \* \*

\(e\) *[Eligible resident of Tribal lands]{.underline}*. An "eligible
resident of Tribal lands" is a "qualifying low-income consumer," as
defined in paragraph (a) of this section, living on or near a
reservation, as defined in 25 CFR 20.1(r) and 20.1(v).

2\. Section 54.401 is amended by revising paragraph (d) to read as
follows:

§ 54.401 Lifeline defined.

\* \* \* \* \*

\(d\) The state commission shall file or require the eligible
telecommunications carrier to file information with the Administrator
demonstrating that the carrier's Lifeline plan meets the criteria set
forth in this subpart and stating the number of qualifying low-income
consumers and the amount of state assistance. Eligible
telecommunications carriers not subject to state commission jurisdiction
also shall make such a filing with the Administrator. Lifeline
assistance shall be made available to qualifying low-income consumers as
soon as the Administrator certifies that the carrier's Lifeline plan
satisfies the criteria set out in this subpart.

3\. Section 54.403 is amended by revising paragraphs (a)(2) and (a)(3),
adding a new paragraph (a)(4), and revising paragraph (b) to read as
follows:

§ 54.403 Lifeline support amount.

\(a\) The federal Lifeline support amount for all eligible
telecommunications carriers shall equal:

\* \* \* \* \*

\(2\) *[Tier Two]{.underline}*. Additional federal Lifeline support in
the amount of \$1.75 per month will be made available to the eligible
telecommunications carrier providing Lifeline service to the qualifying
low-income consumer, if that carrier certifies to the Administrator that
it will pass through the full amount of Tier-Two support to its
qualifying, low-income consumers and that it has received any
non-federal regulatory approvals necessary to implement the required
rate reduction.

\(3\) *[Tier Three]{.underline}*. Additional federal Lifeline support in
an amount equal to one-half the amount of any state**-**mandated
Lifeline support or Lifeline support otherwise provided by the carrier,
up to a maximum of \$1.75 per month in federal support, will be made
available to the carrier providing Lifeline service to a qualifying
low-income consumer if the carrier certifies to the Administrator that
it will pass through the full amount of Tier-Three support to its
qualifying low-income consumers and that it has received any non-federal
regulatory approvals necessary to implement the required rate reduction.

\(4\) *[Tier Four]{.underline}*. Additional federal Lifeline support of
up to \$25 per month will be made available to a eligible
telecommunications carrier providing Lifeline service to an eligible
resident of Tribal lands, as defined in § 54.400(e), to the extent that:

\(i\) This amount does not bring the basic local residential rate
(including any mileage, zonal, or other non-discretionary charges
associated with basic residential service) below \$1 per month per
qualifying low-income subscribers; and

\(ii\) The eligible telecommunications carrier certifies to the
Administrator that it will pass through the full Tier-Four amount to
qualifying eligible residents of Tribal lands and that it has received
any non-federal regulatory approvals necessary to implement the required
rate reduction.

\(b\) For a qualifying low-income consumer who is not an eligible
resident of Tribal lands, as defined in § 54.400(e), the federal
Lifeline support amount shall not exceed \$3.50 plus the tariffed rate
in effect for the primary residential End User Common Line charge of the
incumbent local exchange carrier serving the area in which the
qualifying low-income consumer receives service, as determined in
accordance with § 69.104 or § 69.152(d) and (q) of this chapter,
whichever is applicable. For an eligible resident of Tribal lands, the
federal Lifeline support amount shall not exceed \$28.50 plus that same
End User Common Line charge. Eligible telecommunications carriers that
charge federal End User Common Line charges or equivalent federal
charges shall apply Tier-One federal Lifeline support to waive the
federal End-User Common Line charges for Lifeline consumers. Such
carriers shall apply any additional federal support amount to a
qualifying low-income consumer\'s intrastate rate, if the carrier has
received the non-federal regulatory approvals necessary to implement the
required rate reduction. Other eligible telecommunications carriers
shall apply the Tier-One federal Lifeline support amount, plus any
additional support amount, to reduce their lowest tariffed (or otherwise
generally available) residential rate for the services enumerated in §
54.101(a)(1) through (a)(9), and charge Lifeline consumers the resulting
amount.

4\. Section 54.405 is revised to read as follows:

§ 54.405 Carrier obligation to offer Lifeline.

All eligible telecommunications carriers shall:

\(a\) Make available Lifeline service, as defined in § 54.401, to
qualifying low-income consumers, and

\(b\) Publicize the availability of Lifeline service in a manner
reasonably designed to reach those likely to qualify for the service.

5\. Section 54.409 is amended by revising paragraphs (a) and (b) and
adding a new paragraph (c) to read as follows:

§ 54.409 Consumer qualification for Lifeline.

\(a\) To qualify to receive Lifeline service in a state that mandates
state Lifeline support, a consumer must meet the eligibility criteria
established by the state commission for such support. The state
commission shall establish narrowly targeted qualification criteria that
are based solely on income or factors directly related to income. A
state containing geographic areas included in the definition of
"reservation" and "near reservation," as defined in 25 CFR 20.1(r) and
20.1(v), must ensure that its qualification criteria are reasonably
designed to apply to low-income individuals living in such areas.

\(b\) To qualify to receive Lifeline service in a state that does not
mandate state Lifeline support, a consumer must participate in one of
the following federal assistance programs: Medicaid; food stamps;
Supplemental Security Income; federal public housing assistance; and
Low-Income Home Energy Assistance Program. In a state that does not
mandate state Lifeline support, each eligible telecommunications carrier
providing Lifeline service to a qualifying, low-income consumer must
obtain that consumer's signature on a document certifying under penalty
of perjury that the consumer receives benefits from one of the programs
listed in this paragraph and identifying the program or programs from
which that consumer receives benefits. On the same document, a
qualifying low-income consumer also must agree to notify the carrier if
that consumer ceases to participate in the program or programs.

\(c\) Notwithstanding paragraphs (a) and (b) of this section, an
individual living on a reservation or near a reservation, as defined in
25 CFR 20.1(r) and 20.1(v), shall qualify to receive Tiers One, Two, and
Four Lifeline service if the individual participates in one of the
following federal assistance programs: Bureau of Indian Affairs general
assistance; Tribally administered Temporary Assistance for Needy
Families; Head Start (only those meeting its income qualifying
standard); or National School Lunch Program's free lunch program. Such
qualifying low-income consumer shall also qualify for Tier-Three
Lifeline support, if the carrier offering the Lifeline service is not
subject to the regulation of the state and provides carrier-matching
funds, as described in § 54.403(a)(3). To receive Lifeline support under
this paragraph for the eligible resident of Tribal lands, the eligible
telecommunications carrier offering the Lifeline service to such
consumer must obtain the consumer's signature on a document certifying
under penalty of perjury that the consumer receives benefits from at
least one of the programs mentioned in this paragraph or paragraph (b)
of this section, and lives on or near a reservation, as defined in 25
CFR 20.1(r)and 20.1(v). In addition to identifying in that document the
program or programs from which that consumer receives benefits, an
eligible resident of Tribal lands also must agree to notify the carrier
if that consumer ceases to participate in the program or programs.

6\. Section 54.411 is amended by adding new paragraphs (a)(3) and (d)
and revising paragraph (b) to read as follows:

§ 54.411 Link Up program defined.

\(a\) \* \* \*\* \*

\(3\) For an eligible resident of Tribal lands, a reduction of up to
\$70, in addition to the reduction in paragraph (a)(1) of this section,
to cover 100 percent of the charges between \$60 and \$130 assessed for
commencing telecommunications service at the principal place of
residence of the eligible resident of Tribal lands. For purposes of this
paragraph, charges assessed for commencing telecommunications services
shall include any charges that the carrier customarily assesses to
connect subscribers to the network, including facilities-based charges
associated with the extension of lines or construction of facilities
needed to initiate service. The reduction shall not apply to charges
assessed for facilities or equipment that fall on the customer side of
demarcation point, as defined in § 68.3 of this chapter.

\(b\) A qualifying low-income consumer may choose one or both of the
programs set forth in paragraphs (a)(1) and (a)(2) of this section. An
eligible resident of Tribal lands may participate in paragraphs (a)(1),
(a)(2), and (a)(3) of this section.

\* \* \* \* \*

\(d\) An eligible telecommunications carrier shall publicize the
availability of Link Up support in a manner reasonably designed to reach
those likely to qualify for the support.

7\. Section 54.415 is revised to read as follows:

§ 54.415 Consumer qualification for Link Up.

\(a\) In a state that mandates state Lifeline support, the consumer
qualification criteria for Link Up shall be the same as the criteria
that the state established for Lifeline qualification in accord with §
54.409(a).

\(b\) In a state that does not mandate state Lifeline support, the
consumer qualification criteria for Link Up shall be the criteria set
forth in § 54.409(b).

\(c\) Notwithstanding paragraphs (a) and (b) of this section, an
eligible resident of Tribal lands, as defined in § 54.400(e), shall
qualify to receive Link Up support.

8\. Section 54.417 is removed.

**APPENDIX B**

**PARTIES FILING INITIAL COMMENTS**

[Commenter]{.underline} [Abbreviation]{.underline}

Air Touch Communications and Air Touch

Globalstar USA, Inc.

Arizona Telemedicine Program ATP

Alaska Rural Coalition Alaska Coalition

Alaska, Regulatory Commission of RCA

Alaska, State of Alaska

AMSC Subsidiary Corporation AMSC

American Samoa Telecommunications Authority ASTCA

AT&T Corp. AT&T

Bell Atlantic Mobile, Inc. BAM

Cellular Telecommunications Industry Association CTIA

CenturyTel, Inc. CenturyTel

CCI International, N.V. (Constellation)

Crow Tribal Council

Department of Health and Human Services, US

Dobson Communications Corporation

Eastern Shoshone Tribe

Fort Belknap Community Council

General Communication, Inc. GCI

Gila River Telecommunications, Inc. GRTI

Golden West Telecommunications Cooperative, Inc. Golden West, *et al.*

Midstate Telephone Company

Mount Rushmore Telephone Company

Roberts County Telephone Cooperative Association

RC Communications, Inc.

Sully Buttes Telephone Cooperative, Inc.

Interstate Telecom Cooperative

Vivian Telephone Company

GTE Service Corporation GTE

Guam, Government of Guam

Hawaii, State of

Minnesota Public Utilities Commission MNPUC

Montana Public Service Commission Montana PSC

Motorola, Inc., and Iridium North America Motorola/Iridium

National Rural Telecom Association and NRTA & OPASTCO

Organization for the Promotion and Advancement

of Small Telecommunications Companies

National Telephone Cooperative Association NTCA

Northern Mariana Islands, Commonwealth of CNMI

Palau, Republic of

Puerto Rico Telephone Company, Inc. PRTC

Qualcomm, Inc. Qualcomm

Rural Utilities Service RUS

Salt River Pima-Maricopa Indian Community Salt River/NTTA

and the National Tribal Telecommunications

Alliance

SkyBridge, L.L.C. SkyBridge

Small Business in Telecommunications SBT

Smith Bagley, Inc. SBI

South Dakota Independent Coalition, Inc. SDITC

Summit Telephone and Telegraph Company of Alaska Summit

TDS Telecommunications Corporation TDS Telecom

Titan Wireless Titan

Tuscarora Indian Nation

United States Cellular Corporation USCC

United States Telecom Association and USTA/NECA

National Exchange Carrier Association

US West Communications, Inc. US West

United Utilities, Inc. UUI

Virgin Islands Telephone Corporation Vitelco

Virgin Islands, the Public Service Commission VIPSC

Western Alliance

Western Wireless Corp. Western Wireless

Wisconsin, Public Service Commission of PSCW

**APPENDIX C**

**PARTIES FILING REPLY COMMENTS**

[Commenter]{.underline} [Abbreviation]{.underline}

Alaska, State of

Alaska Rural Coalition

AT&T Corp. AT&T

Bell Atlantic Telephone Co. Bell Atlantic

Cook Inlet Region, Inc. CIRI

Cheyenne River Sioux Tribe Telephone Authority

General Communications, Inc. GCI

GTE Service Corporation GTE

Miami Tribe of Oklahoma Miami Tribe

Motorola, Inc. Motorola

Northern Mariana Islands, Commonwealth of CNMI

National Telephone Cooperative Association NTCA

National Rural Telecom Association NRTA

Project Telephone Company, Inc., Scobey, Montana Project Telephone

Puerto Rico Telephone Company PRTC

Qualcomm, Inc. Qualcomm

Rural Utilities Service RUS

Satellite Industry Association SIA

Tuscarora Indian Nation Tuscarora

United States Cellular Corporation USCC

US West Communications, Inc. US West

Western Wireless Corp. Western Wireless

**SEPARATE STATEMENT OF**

**COMMISSIONER SUSAN NESS**

Re: Federal-State Joint Board on Universal Service; Promoting Deployment
and Subscribership in Unserved and Underserved Areas, Including Tribal
and Insular Areas (CC Docket No. 96-45); Extending Wireless
Telecommunications Services to Tribal Lands (WT Docket No. 99-266)

I support the actions we take today to expand access to basic telephone
services for a segment of the population that has one of the lowest
penetration rates in the United States. In a world that is moving
towards broadband communications, we must remember that many Americans
still lack basic services. The steps we take today for tribal and Alaska
Native lands are long overdue. I am also pleased that the Commission has
taken steps to encourage the deployment of wireless services, because
terrestrial and satellite wireless services may prove critical to
getting basic and advanced telecommunications services to tribal lands
and other remote areas. I would urge the Commission to continue its
efforts to increase telephone subscribership throughout the country,
particularly in rural and insular areas; when more of us are connected,
all of us benefit.

**SEPARATE STATEMENT OF**

**COMMISSIONER GLORIA TRISTANI**

Re: *Federal-State Joint Board on Universal Service: Promoting
Deployment and Subscribership in Unserved and Underserved Areas,
Including Tribal and Insular Areas*, 12th Report and Order and
Memorandum Opinion and Order, CC Docket No. 96-45; *Extending Wireless
Telecommunications Services*, Report and Order and Further Notice of
Proposed Rulemaking, WT Docket No. 99-266.

I am proud to cast my vote in support of these items. Our decisions here
reflect this agency's commitment to improving access to telephone
service on tribal lands and, in turn, to opening the door to the
Information Age.

Section 254 of the Communications Act requires the Commission to assure
that all Americans have access to telecommunications services.[^458]
While 94 percent of Americans enjoy phone service today, just 47 percent
of Indian tribal households on tribal lands have telephones. The
policies we adopt today, including expanded Lifeline and Link Up
coverage, should boost subscribership on tribal lands and create
incentives for new infrastructure investment. We appropriately recognize
that wireless-based services offer unique solutions to increasing
telephone access in often-isolated and remote tribal lands. I strongly
support the decision to award bidding credits in upcoming auctions to
wireless carriers that commit to deploy facilities and offer service to
tribal areas that have telephone subscription rates below 70 percent.

I am also pleased that the Commission has established an expedited
process for handling petitions by carriers seeking designations as
Eligible Telecommunications Carriers on tribal lands. Excessive delay in
the designation of competing providers may hinder the development of
competition and the availability of service in many high-cost areas. By
committing to prompt resolution of pending petitions, we should speed
deployment of telecommunications infrastructure.

Finally, I am pleased that the Commission is reaffirming its commitment
to promote a government-to-government relationship with tribal nations
and to recognize that tribal nations have rights to set their own
communications priorities and goals. To that end, I look forward to the
training session the Commission will hold this September to assist
tribal nations in making decisions about telecommunications.[^459]

Our actions today, and our commitment to continue to act in the future,
will help fulfill the mandate of Congress and, I believe, our moral
obligation to ensure that all Americans enjoy the benefits of the
Information Age.

**SEPARATE STATEMENT OF COMMISSIONER MICHAEL K. POWELL,**

**APPROVING IN PART AND DISSENTING IN PART**

*Re: Federal-State Joint Board on Universal Service; Promoting
Deployment ad Subscribership in Unserved and Underserved Areas,
Including Tribal and Insular Areas (CC Docket No. 96-45)*

Like my colleagues, I wholeheartedly support the decision to begin
addressing the incredibly low rates at which American Indians and Alaska
Natives living on tribal lands currently subscribe to basic telephone
service. Pursuant to Section 254 of the Act, we are duty-bound to
promote the availability of phone service to all Americans. Even before
the 1996 Act was passed, the historic universal service policies of this
Commission and state commissions had yielded a remarkable rate of
telephone subscribership, well above 90% for the country nationwide. And
yet according to statistics obtained from the 1990 Census,
subscribership among certain populations languishes: subscribership
among the rural poor falls roughly 20% behind that of the nation as a
whole, and American Indians living on tribal lands are only *half* as
likely as other Americans to subscribe to phone service.

The Commission cannot turn a blind eye to these enormous disparities; we
have an affirmative duty, at a minimum, to investigate and understand
these disparities. Moreover, if these disparities result from factors
that we cannot tolerate under section 254, we must take steps to reduce
these disparities. That is why I support the vast majority of the
measures we adopt in this *Order.* Among other things, I generally
support expanding the eligibility criteria of our low income universal
service programs to include income-dependent eligibility criteria
employed in programs in which poor tribal members are more likely to
participate. I also support requiring carriers receiving Lifeline and
Link Up support to publicize the availability of such support in a
manner that is likely to reach poor tribal members. In addition, I
support establishing more effective procedures by which carriers not
subject to state commission jurisdiction may seek designation as
telecommunications carriers eligible to receive universal service
support. With Indian subscribership statistics like those before us, I
agree that we must do *something.*

But as a government agency, the Commission cannot do just *anything,* no
matter how well-intended or politically-appealing. We must take action
based on an adequate record and a thorough and logical examination of
what that record does and *does not* tell us. Further, we need to
balance carefully the interests of those who would benefit directly from
our actions against the interests of those who would be affected
indirectly. I believe it is incumbent upon me to carry out these
responsibilities even when my personal sympathies would allow me to
accept a weaker justification for our actions.

I regret that, given the state of the record before us now, I cannot
conclude that the Commission has satisfied its responsibility to
substantiate narrow portions of this decision, and thus I must
regretfully dissent in part. As the *Order* correctly notes, universal
service funding should be "sufficient" to satisfy the statute, but
should not be more than is necessary. Yet this *Order* is hardly
faithful to that principle; we have failed to show why increases in
Lifeline funding are, in fact, necessary. Repeatedly, commenters noted
that one central problem on tribal lands is that residents fail to avail
themselves of the existing Lifeline program, thereby leaving money to
which they should be eligible on the table. The reason identified is
that tribal members often do not participate in the state and federal
government programs that we use as proxies for low income (e.g., social
security, federal housing assistance, etc.). Instead, many of these
individuals subscribe to programs administered by tribal governments. It
is entirely possible that establishing new and more appropriate proxies
for income, which we do in this item, will sufficiently offset the cost
of service and, consequently, increase penetration, without adding new
money to the program. The record simply does not offer any solid
justification for actually expanding the program given this
possibility.[^460] To expand the program without substantiation of need
contravenes the limiting principle we purport to abide by when
considering expansion of funding.

As is my practice, I remain open to being persuaded that expanding
funding in the manner contemplated in this decision is necessary to
improve Indian subscribership. But that will require more time,
explanation and credible data than could reasonably be provided at this
time. Thus, with respect to these narrow aspects of this *Order,* I must
respectfully and reluctantly dissent.

[^1]: In this Order, the term "Indian" refers to "all persons of Indian
    descent who are members of any recognized Indian tribe now under
    Federal jurisdiction, and all persons who are descendants of such
    members who were, on June 1, 1934, residing within the present
    boundaries of any Indian reservation, and shall further include all
    other persons of one-half or more Indian blood. . . . Eskimos and
    other aboriginal peoples of Alaska...." 25 U.S.C. § 479. The term
    "Indian tribe" is defined in Section III.B.2., *infra*.

[^2]: 47 U.S.C. § 214(e)(6).

[^3]: *See* Pub. L. No. 104-104, 110 Stat. 56 (1996), amending the
    Communications Act of 1934, 47 U.S.C. § 151, *et seq.*

[^4]: 47 U.S.C. § 254(b)(3).

[^5]: *Federal-State Joint Board on Universal Service; Promoting
    Deployment and Subscribership in Unserved and Underserved Areas,
    Including Tribal and Insular Areas*, CC Docket No. 96-45, Further
    Notice of Proposed Rulemaking, 14 FCC Rcd 21177 (1999) (*Further
    Notice*). We defer consideration of any issues raised in the
    *Further Notice* that are not addressed in this Order.

[^6]: *See* *Telephone Subscribership in the United States*, Report
    (Com. Car. Bur., rel. June 22, 2000), at 2 and *passim*.

[^7]: *See* National Telecommunications and Information Administration
    (NTIA), Falling Through the Net: Defining the Digital Divide, A
    Report on the Telecommunications and Information Technology Gap in
    America (1999), at 11, Chart I-3,
    [http://www.ntia.doc.gov/ntiahome/fttn99/FTTN_1/chart-1-3.html](http://www.ntia.doc.gov/ntiahome/net2/charts.html)
    (*Falling Through the Net 1999*). Although this result is based on a
    1998 survey, the data in this area appear to have been relatively
    stable in the 1990s. March 2000 data analyzed by the Commission
    indicate a penetration rate of 80.3 percent for all households
    (urban and rural) with incomes below \$5,000. *See* *Telephone
    Subscribership in the United States*, Report (Com. Car. Bur., rel.
    June 22, 2000), at 28.

[^8]: *Housing of American Indians on Reservations -- Equipment and
    Fuels*, Statistical Brief, Bureau of the Census, SB/95, April 1995
    at 2 (based on 1990 Census data). In addition, it appears that, in
    certain insular areas, penetration levels fall significantly below
    the national average. *See* PRTC comments at 3-4 (indicating that
    the average telephone penetration rate in Puerto Rico is 74.2
    percent).

[^9]: *Further Notice*, 14 FCC Rcd at 21179, para. 2.

[^10]: *See, e.g.*, Overcoming Obstacles to Telephone Service for
    Indians on Reservations, Hearings, January 29, 1999 at the Indian
    Pueblo Cultural Center in Albuquerque, New Mexico,
    [www.fcc.gov/Panel_Discussions/Teleservice_reservations/tr_newmx.txt](http://www.fcc.gov/Panel_Discussions/Teleservice_reservations/tr_newmx.txt)
    (*Albuquerque Hearings Transcript*), testimony of Raymond Gachupin,
    the appointed governor for the Pueblo of Jemez, at 31-32 (recounting
    incidents involving the death of individuals within the pueblo who
    failed to receive critically-needed medical attention due to the
    lack of telecommunications or other emergency communications
    services).

[^11]: *See generally, Inquiry Concerning the Deployment of Advanced
    Telecommunications Capability to All Americans in a Reasonable and
    Timely Fashion, and Possible Steps to Accelerate Such Deployment
    Pursuant to Section 706 of the Telecommunications Act of 1996*, CC
    Docket No. 98-146, Report, 14 FCC Rcd 2398 (1999).

[^12]: *Falling Through the Net 1999* at xii (predicting that "\[a\]s we
    enter the Information Age, access to information resources will be
    increasingly critical to finding a job, contacting colleagues,
    taking courses, researching products, or finding public
    information).

[^13]: *Falling Through the Net 1999* at xii.

[^14]: *Extending Wireless Service to Tribal Lands*, Report and Order
    and Further Notice of Proposed Rulemaking, WT Docket No. 99-266, FCC
    00-209 (rel. June 30, 2000) (*Wireless Tribal Order*). In this
    companion order and further notice, we address issues relating to
    expanding the availability of wireless services on tribal lands.

[^15]: *Statement of Policy on Establishing a Government-to-Government
    Relationship with Indian Tribes*, Policy Statement, FCC 00-207
    (released June 23, 2000) (*Indian Policy Statement*).

[^16]: *See Further Notice*, 14 FCC Rcd at 21181-82, para. 6. Appendix A
    of the *Further Notice* contains a list of individuals who
    participated in those meetings.

[^17]: *See Further Notice*, 14 FCC Rcd at 21182, para. 7.

[^18]: *Further Notice*, 14 FCC Rcd 21177.

[^19]: *Extending Wireless Service to Tribal Lands*, Notice of Proposed
    Rulemaking, WT Docket No. 99-266, 14 FCC Rcd 13679 (1999). *See also
    Wireless Tribal Order.*

[^20]: *See* Section III.B.2., *infra*, for definitions of the terms
    "Indian tribe" and "tribal land."

[^21]: *See* *Indian Policy Statement*.

[^22]: *FCC Announces the Indian Telecom Training Initiative to be Held
    September 25-28, 2000*, News Release, April 24, 2000. *See*
    [www.fcc.gov/indians/#telecom](http://www.fcc.gov/indians/#telecom).

[^23]: *See* Section IV.C., *infra*

[^24]: *See* Section IV.C., *infra*

[^25]: The term "tribal lands" is defined in Section III.B.2., *infra.*

[^26]: *Access Charge Reform, Price Cap Performance Review for Local
    Exchange Carriers*, *Low-Volume Long Distance Users*, *Federal-State
    Joint Board On Universal Service*, Sixth Report and Order in CC
    Docket Nos. 96-262 and 94-1, Report and Order in CC Docket No.
    99-249, Eleventh Report and Order in CC Docket No. 96-45, FCC 00-193
    (released May 31, 2000) (*CALLS Order*), para. 216. This order made
    several revisions to the Commission's Lifeline rules. In particular,
    the order revised the first-tier federal Lifeline support amount to
    correspond to anticipated increases in the amount of the subscriber
    line charge. The first such increase, from \$3.50 to as much as
    \$4.35, is scheduled to take place on July 1, 2000. Under the
    revised Lifeline rules adopted in that order, the first-tier federal
    Lifeline support amount, after July 1, 2000, shall increase
    commensurately with any increase in the amount of the subscriber
    line charge that the Commission may approve.

[^27]: *Further Notice*, 14 FCC Rcd at 21181, n. 24, *citing* Pub. L.
    103-454, 108 Stat. 4791 (1994); 25 U.S.C. § 479a(2).

[^28]: 25 U.S.C. § 479a(2). Under section 479a-1, the Secretary of the
    Interior is required to publish annually in the Federal Register a
    list of all Indian tribes that the Secretary recognizes to be
    eligible for the special programs and services provided by the
    United States to Indians. *See* 25 U.S.C. § 479a-1.

[^29]: *Further Notice*, 14 FCC Rcd at 21199-200, paras. 50-53.

[^30]: 25 C.F.R. § 20.1.

[^31]: *See* Section III.B., *infra*.

[^32]: 25 C.F.R. § 20.1(p).

[^33]: *Id*.

[^34]: *See* 25 U.S.C. § 479a-1. This list is posted on the Internet at
    [www.doi.gov/bia/tribes/telist97.html](http://www.doi.gov/bia/tribes/telist97.html).

[^35]: 25 C.F.R. §§ 20.1(v) and 20.1(r).

[^36]: *See* 25 C.F.R. § 20.1(v).

[^37]: Under section 20.1(r) of BIA's regulations, "near reservation" is
    defined as "those areas or communities adjacent or contiguous to
    reservations which are designated by \[the Department of Interior's
    Commission of Indian Affairs\] upon recommendation of the local
    \[Bureau of Indian Affairs\] Superintendent, which recommendation
    shall be based upon consultation with the tribal governing body of
    those reservations, as locales appropriate for the extension of
    financial assistance and/or social services, on the basis of such
    general criteria as: (1) Number of Indian people native to the
    reservation residing in the area, (2) a written designation by the
    tribal governing body that members of their tribe and family members
    who are Indian residing in the area, are socially, culturally and
    economically affiliated with their tribe and reservation, (3)
    geographical proximity of the area to the reservation, and (4)
    administrative feasibility of providing an adequate level of
    services to the area. The Commissioner shall designate each area and
    publish the designations in the FEDERAL REGISTER." 25 C.F.R. §
    20.1(r).

[^38]: *See, e.g.,* UUI comments at 1-2 (Alaska Native Village
    Statistical Areas should be included in the Commission's definition
    of tribal lands insofar as these are lands occupied by Alaska Native
    communities with valid claims to sovereignty and self-determination
    and because special efforts are "clearly needed" to preserve and
    advance universal service.); CIRI reply comments at 3-5 (Alaska
    Natives experience the same geographic and economic problems as
    Indians on reservations. Alaska Natives are entitled to participate
    in programs for Native Americans as a matter of fundamental national
    policy. The Commission should focus on tribal status as defined in
    25 U.S.C. § 450.); RCA comments at 23-24 (With the exception of the
    Metlakatla Reservation, Alaska Native lands do not come within the
    definition of "Indian Country.").

[^39]: *See Morton v. Ruiz*, 415 U.S. 199 (1974) (holding that BIA is
    obligated to offer Indian assistance programs to tribal members
    living "on or near" reservation lands, rather than simply to those
    living on reservations).

[^40]: 25 C.F.R §§ 20.1(v) and 20.1(r).

[^41]: USCC comments at 1, n. 2 (Commission should define "tribal lands"
    in a way that provides jurisdictional and regulatory certainty).

[^42]: *See, e.g.,* 25 C.F.R. §§ 20.1 and 20.20. The Secretary of the
    Interior also maintains a list of all federally-recognized Indian
    tribes on the Internet at
    [www.doi.gov/bia/tribes/telist97.html](http://www.doi.gov/bia/tribes/telist97.html).

[^43]: 47 U.S.C. § 254(b).

[^44]: 47 U.S.C. § 254(b)(1).

[^45]: *See* 47 U.S.C. § 151 (The Commission's regulations should "make
    available, so far as possible, to all the people of the United
    States . . . a rapid, efficient, Nation-wide, and world-wide wire
    and radio communications service with adequate facilities at
    reasonable charges."); 47 U.S.C. § 154(i) ("The Commission may
    perform any and all acts, make such rules and regulations, and issue
    such orders, not inconsistent with this Act, as may be necessary in
    the execution of its functions."); 47 U.S.C. § 201 (Commission's
    general authority to regulate common carriers' rates and service
    offerings); 47 U.S.C. § 205; 47 U.S.C. § 254. *See also
    Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Report and Order, 12 FCC Rcd 8776, 8952-57, paras. 326-340
    (1997), as corrected by Errata, CC Docket No. 96-45 (rel. June 4,
    1997) (*Universal Service Order*).

[^46]: *See, e.g.*, RUS comments at 7-8; Fort Belknap Community Council
    comments at 1; GRTI comments at 3 (below-average subscribership in
    tribal areas is the result of economic conditions and low incomes
    and not just the higher cost of serving remote and sparsely
    populated areas); SBI comments at 3 ("despite several aggressive
    marketing efforts, SBI cannot get many of these people \[on the
    Navajo Reservation\] to subscribe to its wireless service simply
    because the median per capita income on the reservations is
    approximately \$5,000."); Project Telephone reply commnets at 3-4
    (poverty and unemployment are major causes of nonsubcribership that
    are beyond the ability of carriers to resolve).

[^47]: *See, e.g.,* RCA comments at 4 (local rates range between \$10
    and \$38 per month in Alaska); Eastern Shoshone Tribe comments at
    7-11 (local rates range between \$9.02 and \$34.81 per month on the
    Wind River Reservation).

[^48]: *See, e.g.,* NTCA comments at 6 (the "greatest concern" for NTCA
    member companies serving tribal lands is toll calling. Subscribers
    generate high toll charges because local calling areas often do not
    encompass hospitals, governmental agencies, cultural centers, or
    entertainment centers in tribal areas); RCA comments at 19 (UUI
    reports that the most frequently identified reason why native
    households do not take service is the high cost of intrastate toll
    calling in Alaska.).

[^49]: *See, e.g.,* Qualcomm comments at 3-4; Motorola/Iridium comments
    at 7 (average line extension charge on Navajo Reservation is more
    than \$40,000 per loop).

[^50]: *See. e.g.,* Crow Tribal Council comments at 1-3 (low penetration
    levels in tribal areas are the result of the current lack of
    competition among service providers).

[^51]: We note that at least 29 Indian tribes, representing
    approximately a third of the Indian tribal population in the United
    States, have participated in some manner in this proceeding and in
    the proceedings in WT Docket No. 99-266 and BO Docket No. 99-11.
    Although cultural or personal preferences may explain why individual
    tribal members do not subscribe, there is no evidence to suggest
    that these factors account for low subscribership levels generally
    on tribal lands. Indeed, we believe that the substantial Indian
    tribal participation in the Commission's Indian tribal proceedings
    would have been unlikely to occur had Indian tribal leaders
    concluded that cultural factors or personal preference account for
    low subscribership levels among their membership.

[^52]: 47 U.S.C. § 254(b)(3).

[^53]: 47 U.S.C. § 151.

[^54]: *Universal Service Order*, 12 FCC Rcd at 8843-44, paras. 120-121.

[^55]: *Cherokee Nation v. Georgia*, 30 U.S. 1, 16 (1831) (C. J.
    Marshall) (*Cherokee Nation*).

[^56]: S*eminole Nation v. U.S.*, 316 U.S. 286, 297 (1942) (citing
    *Cherokee Nation*; *U.S. v. Kagama*, 118 U.S. 375 (1886) ("Under a
    humane and self imposed policy which has found expression in many
    acts of Congress and numerous decisions of this Court, \[the Federal
    Government\] has charged itself with moral obligations of the
    highest responsibility and trust \[towards Indian tribes\].");
    *Choctaw Nation v. U.S.*, 199 U.S. 1 (1886); *U.S. v. Pelican*, 232
    U.S. 442 (1914); *U.S. v. Creek Nation*, 295 U.S. 103 (1935); *Tulee
    v. Washington*, 316 U.S. 681 (1942).

[^57]: *See, e.g.,* The Indian Self-Determination and Education
    Assistance Act, 25 U.S.C. § 450a(a), (b) ("The Congress hereby
    recognizes the obligation of the United States to respond to the
    strong expression of the Indian people for self-determination . . .
    . \[and\] declares its commitment to the maintenance of the Federal
    Government\'s unique and continuing relationship with, and
    responsibility to, individual Indian tribes and to the Indian people
    as a whole through the establishment of a meaningful Indian
    self-determination policy . . . ."); *see also* *Morton v. Mancari*,
    417 U.S. 535, 540 (1974).

[^58]: *Morton v. Mancari*, 417 U.S. at 540 (upholding Indian employment
    preferences at the Bureau of Indian Affairs, and stating that
    "\[t\]he purpose of these preferences, as variously expressed in the
    legislative history, has been to give Indians a greater
    participation in their own self-government").

[^59]: *Morton v. Mancari*, 417 U.S. at 552.

[^60]: *See, e.g.,* *Morton v. Mancari*, 417 U.S. at 540, 555 (holding
    that a BIA hiring preference that was "tied rationally to the
    fulfillment of Congress' unique obligation toward the Indians" and
    was "reasonably and rationally designed to further Indian
    self-government" did not offend the Constitution).

[^61]: The actions we take here also are consistent with the principles
    contained in the Policy Statement adopted contemporaneously with
    this Order. *See* *Indian Policy Statement* at 4 ("The Commission
    will endeavor to work with Indian Tribes on a
    government-to-government basis consistent with the principles of
    Tribal self-governance to ensure, through its regulations and policy
    initiatives and consistent with section 1 of the Communications Act
    of 1934, that Indian Tribes have adequate access to communications
    services.").

[^62]: *See, e.g., Washington v. Washington State Commercial Passenger
    Fishing Vessel Association, et al.*, 443 U.S. 658 (1979) (holding
    that the federal government's unique relationship with Indian tribes
    may create a federal duty to ensure that federal regulation of
    tribal lands assures "Indians with . . . a moderate living").

[^63]: 47 U.S.C. § 254(i).

[^64]: *Universal Service Order*, 12 FCC Rcd at 8838-39, para. 112.

[^65]: *Universal Service Order*, 12 FCC Rcd at 8839, para. 113.

[^66]: *Universal Service Order*, 12 FCC Rcd at 8837-38, para. 110.

[^67]: *Universal Service Order*, 12 FCC Rcd at 8840, para. 114
    (affordability is affected by the amount of toll charges a consumer
    incurs to contact essential service providers such as hospitals,
    schools, and government offices located outside of the consumer's
    local calling area).

[^68]: *Further Notice*, 14 FCC Rcd at 21180-81, para. 5, *citing*
    *Telephone Subscribership in the United States*, Report, Table 1
    (Com. Car. Bur., rel. Feb. 18, 1999).

[^69]: *Further Notice*, 14 FCC Rcd at 21184-92, paras. 11-31.

[^70]: *Further Notice*, 14 FCC Rcd at 21184-85, para. 13. We use the
    terms "subscribership" and "penetration" interchangeably in this
    Order.

[^71]: *Further Notice*, 14 FCC Rcd at 21180-81, para. 5, *citing*
    *Housing of American Indians on Reservations -- Equipment and
    Fuels*, Statistical Brief, Bureau of the Census, SB/95, April 1995
    at 2 (based on 1990 Census data).

[^72]: *Further Notice*, 14 FCC Rcd at 21181-82, para. 6.

[^73]: *Further Notice*, 14 FCC Rcd at 21183, para. 9.

[^74]: 47 U.S.C. § 254(b).

[^75]: *See* Section III.D., *infra.*

[^76]: *See* Section III.B., *supra*, for definitions of "Indian tribe"
    and "tribal lands."

[^77]: *Falling Through the Net 1999* at 11, Chart I-3.

[^78]: *Housing of American Indians on Reservations -- Equipment and
    Fuels*, Statistical Brief, Bureau of the Census, SB/95, April 1995
    at 2 (based on 1990 Census data). We will be reexamining
    subscribership levels upon release of the 2000 Census data in 2001.

[^79]: National Exchange Carrier Association comments, attachment IV,
    table 1, in *Inquiry on Universal Service and Open Access Issues*,
    Department of Commerce, National Telecommunications and Information
    Administration, Docket No. 940955-4255, 1994 WL 506372 (rel. Sept.
    19, 1994).

[^80]: *See, e.g.,* Testimony of Aloa Stevens, Citizens Communications,
    at FCC Hearing, Gila River Reservation, Chandler, Arizona, March 23,
    1999, transcript at 91-92 (indicating penetration level of 17.9
    percent for the White Mountain Apache Tribe and 22.5 percent on the
    Navajo Reservation).

[^81]: *Falling Through the Net 1999* at Chart I-3.

[^82]: *We, the First Americans*, U.S. Department of Commerce, Economics
    and Statistics Administration, Bureau of the Census, WE-5 (Sept.
    1993), at 10 (indicating per capita income in 1989 of approximately
    \$4,478 for American Indians residing on all reservations and trust
    lands).

[^83]: *Id.* Twenty-one percent of Alaska Native families lived below
    the poverty level in this time period as compared with seven percent
    of Alaska families statewide. *Id*. at 17.

[^84]: *Id.* at 6.

[^85]: *Assessment of Technology Infrastructure in Native Communities*,
    Final Report, Prepared for the U.S. Department of Commerce, Economic
    Development Administration by the College of Engineering, New Mexico
    State University, June 1999 (*NMSU Report*), at 14.

[^86]: *See, e.g.,* RUS comments at 7-8; Fort Belknap Community Council
    comments at 1; GRTI comments at 3 (below-average subscribership in
    tribal areas is the result of economic conditions and low incomes
    and not just the higher cost of serving remote and sparsely
    populated areas); SBI comments at 3 ("despite several aggressive
    marketing efforts, SBI cannot get many of these people \[on the
    Navajo Reservation\] to subscribe to its wireless service simply
    because the median per capita income on the reservations is
    approximately \$5,000"); Project Telephone reply commnets at 3-4
    (Poverty and unemployment are major causes of nonsubcribership that
    are beyond the ability of carriers to resolve.).

[^87]: *Id*.

[^88]: *See, e.g.,* RCA comments at 27 (stating that, in Alaska, Native
    and non-Native customers live in the same villages, use the same
    utility infrastructure, and face the same problems obtaining
    affordable service).

[^89]: *See, e.g.,* Letter from David Cosson, Counsel to Project
    Telephone Company, Inc., to Irene Flannery, FCC, dated May 15, 2000
    (stressing the "importance of rules which result in simple and
    unambiguous determination of eligible subscribers"); RCA comments at
    27 (emphasizing the administrative difficulties inherent in
    distinguishing between Native and non-Native subscribers and
    proposing that any measures applied to Alaska Natives also apply to
    non-Natives living in Native villages in Alaska).

[^90]: *See, e.g.,* USTA/NECA comments at 1-3 (suggesting that
    Commission's proposals should be applied to all high-cost areas and
    not just to tribal or insular areas); USTA/NECA comments at 9-10
    (suggesting that the Commission apply any initiatives benefitting
    native populations to all areas populated by Native peoples, such as
    the Hawaiian Homelands, American Samoa, Guam, and Palau).

[^91]: *Falling Through the Net 1999* at Chart I-3; PRTC reply comments
    at 3-4 (average 74.2 percent penetration on island).

[^92]: A recent study found that, among households of 48 tribes
    surveyed, 12 percent lack electricity, 23 percent lack gas, 50
    percent do not use public sewage treatment facilities, 26 percent
    have no 911 service, and most responded that they lack an adequate
    road structure, with certain reservations having only one or two
    roads. *NMSU Report*, at 15-22.

[^93]: *See, e.g.,* UUI comments at 15.

[^94]: *See, e.g.,* Bell Atlantic reply comments at 9.

[^95]: *See, e.g.,* Bell Atlantic reply comments at 8.

[^96]: Data from the 2000 Census is expected to become available by the
    spring of 2001.

[^97]: *See, e.g.,* NTCA comments at 2-5 (asserting that 25 of NTCA's
    member companies provide telephone service on average to 97 percent
    of the households within their service territory on the
    reservation).

[^98]: *See, e.g.,* Letter from Daniel Mitchell, NTCA, to Magalie Roman
    Salas, FCC, dated February 11, 2000 (NTCA Feb. 11 *ex parte*), at 5
    (reporting survey showing 97 percent coverage rates and 80 percent
    penetration levels in tribal areas served by NTCA member companies).

[^99]: *See, e.g.,* NTCA comments at 4 (NTCA survey results showed that
    25 member companies have deployed infrastructure to provide service
    to 15 percent to 100 percent of the geographic areas within six
    reservation and trust land areas.).

[^100]: *See, e.g.,* NTCA comments at 4 (listing number of NTCA member
    companies that have a combined average penetration rate of 80
    percent in their service territory).

[^101]: *Universal Service Order*, 12 FCC Rcd at 8952-53, para. 329.

[^102]: 47 C.F.R. § 54.403(a).

[^103]: *CALLS Order*, para 216. *See also* 47 C.F.R. §§ 54.403(a)(1)
    (rules for first-tier Lifeline as revised by the *CALLS Order*).

[^104]: 47 C.F.R. § 54.403(a)(2).

[^105]: 47 C.F.R. § 54.403(a)(3).

[^106]: Federal Lifeline support is collected and distributed as
    follows. The federal universal service administrator, the Universal
    Service Administrative Company (USAC), collects universal service
    contributions for all of the universal service support mechanisms,
    including the low-income support mechanism based on the interstate
    and international end-user revenues of interstate telecommunications
    services providers. The amount collected for the low-income support
    mechanism each quarter is based on a projection of demand that USAC
    prepares and submits to the Commission each quarter, which USAC
    calculates according to carrier estimates for that quarter. At the
    beginning of each quarter, USAC calculates the amount of support
    that it will provide to each carrier offering Lifeline service based
    on the revenues that the carrier expects to forgo during that
    quarter for providing Lifeline service. Low-income subscribers apply
    for Lifeline service according to the application procedures and
    qualification criteria established by each state and, upon
    satisfying these requirements, receive service at the discounted
    Lifeline rate that is applicable in that state or service territory.
    In states that provide no intrastate Lifeline matching funds,
    Commission approved qualification criteria govern subscribers'
    eligibility for Lifeline service. At the close of each quarter, a
    carrier submits to USAC the actual amount of revenues forgone during
    the quarter for the provision of Lifeline service and USAC adjusts
    the level of Lifeline support paid to the carrier in the subsequent
    quarter to reflect this revenue data. *See generally*, 47 C.F.R. §
    54.400, *et seq.* and 47 C.F.R. § 54.700, *et seq*.

[^107]: *Further Notice*, 14 FCC Rcd at 21227- 28, paras. 122-123.

[^108]: 47 C.F.R. § 54.411(a)(1).

[^109]: 47 C.F.R. § 54.411(a)(1), (a)(2).

[^110]: *Further Notice*, 14 FCC Rcd at 21226-28, paras. 119-121. We
    also sought comment on whether the Commission should provide
    additional support through the Link Up program for locations with
    significantly lower-than-average telecommunications penetration
    levels, *e.g.*, below 75 percent. *Further Notice*, 14 FCC Rcd at
    21227, para. 121.

[^111]: *Universal Service Order*, 12 FCC Rcd at 8973, para. 373.

[^112]: 47 C.F.R. § 54.409(a).

[^113]: *Universal Service Order*, 12 FCC Rcd at 8973-74, para. 374.

[^114]: 47 C.F.R. § 54.409(b).

[^115]: 47 C.F.R. § 54.415(a), (b).

[^116]: *CALLS Order*, para. 216.

[^117]: In a jurisdiction that provides state matching funds of \$3.50,
    which represents the amount needed to generate the full \$1.75 in
    third-tier federal matching funds, a qualifying low-income
    individual on tribal lands could receive a total basic local service
    rate reduction of up to \$36.35 per month.

[^118]: *See* *Case 28961,* *New York Telephone Company-Moratorium Rate
    Decrease, and Case 28978, New York Telephone Company-Generic Rate
    Design Proceeding-Analysis*, Opinion 87-18, (NYPSC 1987)
    (establishing Lifeline rate of \$1 per month plus reduced usage
    charges for all local calls); *see also, Application of Bell
    Atlantic-Washington,D.C., Inc. for Authority to Amend the Local
    Exchange Services Tariff, P.S.C.--D.C.-- No. 202 and General
    Services Tariff, P.S.C.-D.C.-No. 203,* Order No. 11286 (DCPSC 1998)
    (establishing Lifeline rate of \$3 per month for local service with
    a limit of 120 message units for low-income consumers under 65 years
    of age and a Lifeline rate of \$1 per month with unlimited local
    calling for low-income consumers over 65 years of age).

[^119]: 47 C.F.R. § 54.403(a).

[^120]: *See* Section III.D.2.c., *infra,* for a discussion of
    implementation of enhanced Lifeline and expanded Link Up support.

[^121]: *We, the First Americans*, U.S. Department of Commerce,
    Economics and Statistics Administration, Bureau of the Census, WE-5
    (Sept. 1993), at 10 (indicating per capita income in 1989 of
    approximately \$4,478 for American Indians residing on all
    reservations and trust lands); *see also NMSU Report*, at 30
    (reporting that on the Navajo Reservation, "many more households
    have access to phone lines than is suggested by \[penetration
    statistics\]....Even where telephones are available, many low-income
    families simply cannot afford to maintain service.").

[^122]: *See, e.g.*, *Albuquerque Hearings Transcript* at 59, testimony
    of Eagle Rael, Governor, Pueblo Picuris, New Mexico ("Our local
    calling area is small. 97 percent of tribal government calls are
    long distance. Emergency 911 rings to Taos, outside the local
    calling area, and cannot be reached by those with cost-saving long
    distance \[toll\] block\[ing service\];"); Overcoming Obstacles to
    Telephone Service for Indians on Reservations, Hearings, March 23,
    1999, at the Gila River Indian Community in Chandler, Arizona
    (*Arizona Hearings Transcript*), testimony of Nora Helton,
    Chairperson, Fort Mojave Tribe, at 43 ("When we make calls into
    Laughlin, Nevada, which is only five or seven miles up the road,
    it's a long distance call for us."), available
    at\<www.fcc.gov/Panel_Discussions/Teleservice_reservations/\>
    [www.fcc.gov/Panel_Discussions/Teleservice_reservations/march23/welcome.html](http://www.fcc.gov/Panel_Discussions/Teleservice_reservations/march23/welcome.html).

[^123]: *Housing of American Indians on Reservations -- Equipment and
    Fuels*, Statistical Brief, Bureau of the Census, SB/95, April 1995
    at 2 (based on 1990 Census data).

[^124]: Testimony at the January 1999 Overcoming Obstacles Hearing in
    Albuquerque, New Mexico indicated that none of the pueblo leaders
    who participated as panelists in the hearing were aware of the
    Lifeline or Link Up programs. *See, e.g.*, Albuquerque Hearings
    Transcript at 71-74, 105-07. In addition, despite the presence of
    sixty percent unemployment in the Cheyenne River Sioux Telephone
    Authority Area, only about ten percent of the subscribers there
    receive Lifeline service. *See* Testimony of J.D. Williams, Cheyenne
    River Sioux Telephone Authority, Arizona Hearing Transcript at 71.

[^125]: *See* *Case 28961,* *New York Telephone Company-Moratorium Rate
    Decrease, and Case 28978, New York Telephone Company-Generic Rate
    Design Proceeding-Analysis*, Opinion 87-18, (NYPSC 1987)
    (establishing Lifeline rate of \$1 per month plus reduced usage
    charges for all local calls); *see also, Application of Bell
    Atlantic-Washington, D.C., Inc. for Authority to Amend the Local
    Exchange Services Tariff, P.S.C.--D.C.-- No. 202 and General
    Services Tariff, P.S.C.-D.C.-No. 203,* Order No. 11286 (DCPSC 1998)
    (establishing Lifeline rate of \$3 per month for local service with
    a limit of 120 message units for low-income consumers under 65 years
    of age and a Lifeline rate of \$1 per month with unlimited local
    calling for low-income consumers over 65 years of age).

[^126]: *See* Letter from Phylicia Bowman, District of Columbia Public
    Service Commission, to Praveen Goyal, FCC, dated May 22, 2000, at
    Section III, Table 3. It is also noteworthy that, in this same time
    period, the number of qualifying low-income residents participating
    in the Lifeline program in the District of Columbia increased from
    2,867 to 9,251, an increase of more than 300 percent. *See* *1999
    Joint Annual Report, Utility Discount Programs*, Multi-Utility
    Discount Working Group, Table 7 (July 27, 1999).

[^127]: *See* *Case 90-C-0191 -- Proceeding on Motion of the Commission
    as to the Rates, Charges, Rules and Regulations of New York
    Telephone Company; Report on New York Telephone Company's Lifeline
    Program*, Notice Soliciting Comments (rel. Nov. 20, 1991), at 24.

[^128]: *Chesapeake and Potomac Telephone Company, Formal Case No. 850*,
    Order No. 9927, 13 DCPSC 67 (Jan. 27, 1992). Although the D.C.
    Commission extended its \$1 Lifeline program to all low-income
    citizens in the District of Columbia in this order, it later adopted
    a \$3 Lifeline rate for low-income citizens under the age of 65.

[^129]: Eastern Shoshone Tribe comments at 9; RCA comments at 4.

[^130]: *See* NTCA comments at 5 (17 out of 25 companies serving
    reservations indicate that a \$10 per month basic local telephone
    rate is considered affordable); *see also* SBI comments at 2
    (Poverty on the Navajo Reservation is "extreme and even a basic
    lifeline service priced at \$10.00 per month is out of reach for
    most families.").

[^131]: Eastern Shoshone Tribe comments at 7-12 (reporting range of
    local rates of approximately \$9 to \$35, plus zonal charges); RCA
    comments at 4 (reporting range of local rates in Native and
    non-Native communities of approximately \$10 to \$38); Golden West,
    *et al.*, comments at 2-7 (tribal carriers in South Dakota reporting
    range of local rates of \$9.95 to \$15.75); NTCA Feb. 11 *ex parte*
    at 4 (reporting range of local rates of \$5 to \$20).

[^132]: As previously noted, in a jurisdiction that provides state
    matching funds of \$3.50, which represents the level of state funds
    needed to generate the maximum \$1.75 in federal matching funds, a
    qualifying low-income individual living on tribal lands could
    receive enhanced Lifeline support of up to \$36.35 per month.

[^133]: *See* RUS comments at 12 ("The current Lifeline program's
    maximum payment covers less than half of today's average cost of
    monthly service, and this may not be enough for some families." The
    Commission should consider whether an enhanced Lifeline program
    would be appropriate for tribal and other impoverished areas to
    ensure affordability of modern telecommunications.); Salt River/NTTA
    comments at 17 (urging the Commission to consider other potential
    approaches to reducing the costs to individuals of receiving
    telecommunications services in Indian Country, including
    potentially, individually targeted subsidies and increases in
    Lifeline payments).

[^134]: *See, e.g.,* UUI comments at 15.

[^135]: *Trends in Telephone Service*, Industry Analysis Division of the
    Common Carrier Bureau, FCC, at 4-3 (March 2000) (citing *Consumer
    Expenditure Survey*, U.S. Bureau of Labor Statistics).

[^136]: *Trends in Telephone Service*, Industry Analysis Division of the
    Common Carrier Bureau, FCC, at 4-3 (September 1999).

[^137]: *NMSU Report* at 18. This study found that the average tribal
    household incurs toll charges of \$126 per month for "long distance
    service within the community." *Id.*

[^138]: 1990 Census of Population: Social and Economic Characteristics,
    American Indian and Alaska Native Areas, CP-2-18, Table 12 (1990).

[^139]: *See* NTCA Feb. 11 *ex parte*, at 4.

[^140]: *Universal Service Order*, 12 FCC Rcd at 8839, para. 113.

[^141]: *See, e.g., NMSU Report* at 30.

[^142]: *See* discussion of expanded Link Up support for qualifying
    low-income tribal members in Section III.D.2.b., *infra*.

[^143]: *See, e.g.*, Testimony of Stanley Pino, Chairman of the All
    Indian Pueblo Council*, Albuquerque Hearings Transcript* at 27;
    Testimony of George Arthur, spokesman for the President of the
    Navajo Nation and for the Speaker of the Navajo Nation Council,
    *Albuquerque Hearings Transcript* at 38.

[^144]: As we observed in the *Further Notice*, in 1997, the Navajo
    Communications Company issued 72 line extension charge estimates
    that averaged more than \$40,000, including eight estimated at more
    than \$100,000 and one estimated at more than \$157,000. *Further
    Notice*, 14 FCC Rcd at 21188-89, para. 23.

[^145]: Section 214(e)(3) provides that:

    > if no common carrier will provide the services that are supported
    > by Federal Universal service support mechanisms under section
    > 254(c) to an unserved community or any portion thereof that
    > requests such service, the Commission, with respect to interstate
    > services or an area served by a common carrier to which paragraph
    > (6) applies, or a State commission, with respect to intrastate
    > services, shall determine which common carrier or carriers are
    > best able to provide such service for that unserved community or
    > portion thereof. Any carrier or carriers ordered to provide such
    > service shall meet the requirements of paragraph (1) and shall be
    > designated as an eligible telecommunications carrier for that
    > community or portion thereof.

    47 U.S.C. § 214(e)(3). *See Further Notice*, 14 FCC Rcd at 21214-25,
    paras. 83-116 (discussing Commission's implementation of section
    214(e)(3)).

[^146]: As discussed more fully in Section III.D.2.b., *infra*, however,
    we do provide in this Order up to an additional \$70 of federal
    universal service support under the Link Up program for a total of
    up to \$100 of federal support to offset the cost of service
    initiation fees and line extension charges incurred by qualifying
    low-income individuals on tribal lands for initiation of telephone
    service. This expanded Link Up support should help qualfying
    low-income individuals on tribal lands to initiate service by
    reducing the amounts carriers charge to expand the capacity of
    near-by existing facilities to serve the unserved community.

[^147]: *See, e.g.*, Qualcomm comments at 3-4.

[^148]: *See* Letter from David A. LaFuria, Counsel for Smith Bagley,
    Inc., to Mark Nadel, FCC, dated April 25, 2000 (Smith Bagley April
    25 *ex parte*), at 2 (stating that SBI could offer local calling
    throughout its authorized service territory on the Navajo
    Reservation, "which would eliminate toll charges for most Native
    American households").

[^149]: The Commission adopted the principle of competitive neutrality
    in the *Universal Service Order.* *See* *Universal Service Order*,
    12 FCC Rcd at 8801-03.

[^150]: For example, instituting one-way extended area calling for
    tribal lands may represent a cost-effective way to expand local
    calling areas of tribal members to include their communities of
    interest. *See, e.g.*, UUI comments at 13-14 (recently, the RCA
    adopted "one-way" extended area service requirements for rural
    villages desiring to expand their local calling areas based on their
    "community of interest").

[^151]: *See* *Further Notice*, 14 FCC Rcd at 21227-28, para. 123.

[^152]: Section 254(c)(1) of the Act requires the Joint Board to
    recommend, and the Commission to establish, the services that should
    be supported by federal universal service support mechanisms. 47
    U.S.C. § 254(c)(1). Section 254(c)(2) of the Act states that the
    "Joint Board may, from time to time, recommend to the Commission
    modifications in the definition of the services that are supported
    by Federal universal service support mechanisms." 47 U.S.C. §
    254(c)(2).

[^153]: *Universal Service Order*, 12 FCC Rcd at 8834-35, para. 104
    (adopting Joint Board's recommendation to convene a Joint Board no
    later than January 1, 2001, to revisit the definition of universal
    service). Moreover, we ask the Joint Board to consider the
    advisability of including prepaid calling plans within the
    definition of supported services. Specifically, we ask the Joint
    Board to examine whether support for such plans may give carriers
    sufficient financial incentive to extend service to low-income
    individuals whose service has been disconnected for failure to pay
    long distance charges and to waive past due charges for such
    individuals as a condition of receiving this support.

[^154]: Letter from Kathy Smith, NTIA, to Magalie Roman Salas, FCC,
    dated April 14, 2000 (NTIA *ex parte* comments) at 17; *see also*
    RCA comments at 21-23 (Commission lacks jurisdiction, historical
    experience, local presence, and regional knowledge to determine
    whether expansion of a local calling area is in the public
    interest).

[^155]: *See, e.g.*, UUI comments at 17 and n. 32 (often assistance
    beyond the \$30.00 of available Link Up support is needed to make
    the cost of establishing service more affordable; to cover the cost
    to establish service, *i.e.*, install jack and inside wire, purchase
    and test instruments, and connect line to central office, UUI
    charges \$177.25); Smith Bagley April 25 *ex parte,* at 2
    (subscriber activation charges often amount to several hundred
    dollars per subscriber); Eastern Shoshone comments at 8 (in addition
    to "switch activation fee" of between \$33.10-\$52.00, carriers
    charge \$375 Rural Network Assessment Tariff plus actual
    construction costs exceeding \$2,300); AT&T reply at 7 (supporting
    the provision of greater one-time discounts on installation to the
    most needy).

[^156]: *NMSU Report* at 18.

[^157]: UUI comments at 17 (supporting additional \$100 in Link Up
    support); *see also* Alaska Rural Coalition comments at 11-12
    (supporting increase in Link Up support up to \$100); RCA comments
    at 19 (supporting increase in Link Up support to \$100); NRTA &
    OPASTCO comments at 7-8 (increasing Link Up support for areas with
    unusually low subscribership is the most reasonable and targeted
    approach to problem of making basic telephone service more
    affordable to reservations and trust lands); Smith Bagley April 25
    *ex parte,* at 2 (asking the Commission to increase the cap on Link
    Up to \$100).

[^158]: Outstanding balances from previously initiated service would not
    be included within the charges covered here.

[^159]: *Universal Service Order*, 12 FCC Rcd at 8959, para. 344.

[^160]: *See* UUI comments at 20 (recommending that the Commission
    expand Link Up assistance to cover all charges that an eligible
    telecommunications carrier may charge to establish service).

[^161]: *See, e.g.*, Eastern Shoshone Tribe comments at 8 (in addition
    to "switch activation fee" of between \$33.10-\$52.00, carriers
    charge \$375 Rural Network Assessment Tariff plus actual
    construction costs exceeding \$2,300).

[^162]: *See* US West Communications, Exchange and Network Services
    Tariff, New Mexico, §§4.2.1, 5.2.4 (1999).

[^163]: *See, e.g.,* Qualcomm comments at 3-4; Motorola/Iridium comments
    at 7.

[^164]: *See* Section III.D.2.a., *supra,* for a further discussion of
    these issues.

[^165]: *See, e.g.,* Motorola/Iridium comments at 17.

[^166]: *Review of Sections 68.104 and 68.213 of the Commission's Rules
    Concerning Connection of Simple Inside Wiring to the Telephone
    Network and Petition for Modification of Section 68.213 of the
    Commission's Rules Filed by the Electronics Industries Association*,
    Third Report and Order, CC Docket No. 88-57, 15 FCC Rcd 927, 929,
    para. 2 (2000) (*Inside Wiring Order*); *see also* 47 C.F.R. § 68.3.

[^167]: The demarcation point is the "interface point between the
    \[public switched telephone network\] and the inside wiring, and is
    the juncture at which the telecommunications carrier's
    responsibilities end and the customer's control begins." *Inside
    Wiring Order*, 15 FCC Rcd at 929, para. 2.

[^168]: *See* 47 C.F.R. § 101.

[^169]: GTE reply comments at 7-8.

[^170]: *See* Section III.D.2.a., *supra*.

[^171]: 47 U.S.C. § 214(e)(3).

[^172]: GTE comments at 21; GTE reply comments at 7-8.

[^173]: *See* UUI comments at 17 (stating that, because assistance
    beyond the \$30.00 of available Link Up support is needed to make
    the cost of establishing service more affordable, UUI is forced to
    absorb certain costs associated with establishing service in order
    to increase subscribership among low-income subscribers); Smith
    Bagley April 25 *ex parte*, at 2 (indicating that SBI understands
    that it "will be expected to absorb" a portion of its subscriber
    activation charges that will not be "borne" by the Link Up program).

[^174]: For example, one wireless carrier has represented that, with
    additional Lifeline and Link Up support in the ranges provided here,
    it could provide service reservation-wide on the Navajo Reservation.
    *See* Smith Bagley April 25 *ex parte*. By contrast, certain
    wireline carriers have quoted average line extension costs of more
    than \$40,000 per subscriber on the Navajo Reservation. *See*
    Motorola/Iridium comments at 7 (average line extension charge on
    Navajo Reservation is more than \$40,000 per loop).

[^175]: Bell Atlantic reply comments at 4.

[^176]: *See, e.g.*, Letter from Melissa E. Newman, U S West
    Communications, Inc. to Magalie Roman Salas, FCC, dated May 24, 2000
    (US West May 24 *ex parte*) (discussing concerns associated with
    implementation of proposed tribal Lifeline service).

[^177]: *See, e.g.*, Letter from David Cosson, Kraskin, Lesse & Cosson,
    LLP, to Irene Flannery, FCC, dated May 15, 2000 (reporting that
    companies should be able to modify subscriber bills to include
    separate tribal Lifeline rate with "little difficulty").

[^178]: *See, e.g.*, US West May 24 *ex parte* (requesting eight months
    to implement the changes needed to implement tribal Lifeline
    service).

[^179]: 47 C.F.R. § 54.407(c).

[^180]: *Further Notice*, 14 FCC Rcd at 21208-09, paras. 71-72.

[^181]: *Further Notice*, 14 FCC Rcd at 21208-09, para. 72.

[^182]: *Further Notice*, 14 FCC Rcd at 21208-09, para. 72.

[^183]: Section 54.415 of our rules, which establishes the consumer
    qualification criteria for Link Up, incorporates by reference the
    criteria established for Lifeline in section 54.409. Therefore, by
    amending the Lifeline criteria in section 54.409, we also change the
    criteria for Link Up.

[^184]: *See* 25 C.F.R. § 20.21; *see also* 25 C.F.R. § 20.21(c)(2)
    (applicant must "have insufficient resources to meet the basic and
    special needs defined by the Bureau standard of assistance").

[^185]: *See* 42 U.S.C. § 612; 45 C.F.R. § 286.

[^186]: "\[C\]hildren from low-income families shall be eligible for
    participation in programs assisted under this subchapter if their
    families' incomes are below the poverty line, or if their families
    are eligible or, in the absence of child care, would potentially be
    eligible for public assistance." 42 U.S.C. § 9840(a)(1)(A). Insofar
    as other provisions within the Head Start eligibility requirements
    permit non-means tested families to participate on a space available
    basis, we do not incorporate here any non-means tested eligibility
    criteria under the Head Start program. Only those families who
    satisfy the income standard of the Head Start program may rely on
    enrollment in Head Start for purposes of demonstrating income
    eligibility for Lifeline and Link Up service.

[^187]: "The income guidelines for determining eligibility for free
    lunches shall be 130 percent of the applicable family size income
    levels contained in the nonfarm income poverty guidelines prescribed
    by the Office of Management and Budget...." 42 U.S.C. §
    1758(b)(1)(A); *see also* 7 C.F.R. § 210.2.

[^188]: *See* notes 184 - Error: Reference source not found, *supra*.

[^189]: The income thresholds associated with the programs currently
    included range from 100-150 percent of the federal poverty level or
    incorporate state poverty thresholds. *See, e.g.,* Food Stamps
    program under 7 U.S.C. § 2014(c) (requiring that household income,
    after exclusions and deductions, cannot exceed 130 percent of the
    poverty level for households with elderly or disabled individuals or
    100 percent of the poverty level for other households).

[^190]: *See, e.g.*, Letter from James A. Casey, Counsel for the
    National Indian Telecommunications Institute (NITI), to Magalie
    Roman Salas, FCC, dated May 3, 2000 (NITI May 3 *ex parte*); *see
    also* Letter from Brent A. Kennedy, San Carlos Apache
    Telecommunications Utility, Inc., to Helen Hillegas, FCC, dated May
    4, 2000 (San Carlos Apache May 3 *ex parte*) ("As an operating local
    exchange carrier, San Carlos recognizes that its administrative
    burden is minimized by the relatively short list of programs against
    which to judge eligibility for Lifeline/Link Up programs. San Carlos
    also submits, however, that this relatively short list presents a
    hurdle to many Native Americans who, while eligible for the
    currently-specified programs, instead participate in other federal
    programs, including programs more narrowly targeted to tribal
    communities. Accordingly, many Native Americans do not currently
    receive the federal telecommunications assistance for which they
    qualify.").

[^191]: *See, e.g.*, NITI May 3 *ex parte*, at 2 (proposing adoption of
    additional eligibility proxies, including tribally administered
    means-tested programs, Head Start, free school lunch programs, and
    BIA's general assistance program).

[^192]: *See* 42 C.F.R. § 36.12 (describing persons to whom Indian
    health programs will be provided).

[^193]: *See* San Carlos Apache May 3 *ex parte*, at 2.

[^194]: *See* 25 C.F.R. § 20.1(ee).

[^195]: Smith Bagley April 25 *ex parte*.

[^196]: PSCW comments at 3-4.

[^197]: *Universal Service Order*, 12 FCC Rcd at 8973, para. 373.

[^198]: *See, e.g.*, Mont. Code Ann. § 69-3-1002 (1999) (limiting
    eligibility for low income telephone assistance to a subscriber who
    is "certified by the department of public health and human services
    as a recipient of medicaid benefits").

[^199]: *Universal Service Order*, 12 FCC Rcd at 8973, para. 373.

[^200]: 47 U.S.C. § 214(e)(1)(B).

[^201]: *Universal Service Order*, 12 FCC Rcd at 8993, para. 407.

[^202]: *Further Notice*, 14 FCC Rcd at 21228-29, paras. 125-126.

[^203]: *Further Notice*, 14 FCC Rcd at 21229, para. 126.

[^204]: 47 C.F.R. § 54.405.

[^205]: *Further Notice*, 14 FCC Rcd at 21229, para. 127.

[^206]: *See, e.g.,* UUI comments at ii (penetration level increased by
    4.9 percent and Lifeline subscribership increased from 395 to 1,263
    subscribers following outreach campaign promoting Lifeline service
    within Native communities).

[^207]: *Albuquerque Hearings Transcript* at 71-74, 105-07 (questions by
    Chairman concerning lack of awareness of Lifeline program in New
    Mexico); *see also* RUS comments at 8 (stating that in many
    low-income, rural communities, the availability of Lifeline and Link
    Up rates are not widely known).

[^208]: UUI comments at ii, 15.

[^209]: UUI comments at 15.

[^210]: *See* Appendix A (rule amendments).

[^211]: *FCC Announces the Indian Telecom Training Initiative to be Held
    September 25-28, 2000*, News Release, April 24, 2000.

[^212]: *Further Notice*, 14 FCC Rcd at 21207, para. 69, *citing*
    Petitions for Waiver of Section 54.403(a) filed by Gila River
    Telecommunications, Inc. (January 22, 1999), Tohono O'odham Utility
    Authority (January 26, 1999), San Carlos Telecommunications, Inc.
    (February 12, 1999) and Fort Mojave Telecommunications, Inc.
    (February 17, 1999).

[^213]: *Further Notice*, 14 FCC Rcd at 21207, para. 69.

[^214]: *Further Notice*, 14 FCC Rcd at 21207, para. 69.

[^215]: *See Federal-State Joint Board on Universal Service*, CC Docket
    No. 96-45, Order, DA 99-2970 (Com. Car. Bur. 1999) (*Gila River
    Order*).

[^216]: *Gila River Order,* para. 13.

[^217]: *Further Notice*, 14 FCC Rcd at 21207-08, para. 70.

[^218]: *Id*.

[^219]: *See Federal-State Joint Board on Universal Service*, CC Docket
    No. 96-45, Order, DA 99-2970 (Com. Car. Bur. 1999).

[^220]: We note that, unlike our discussion *infra* of section 214(e)(6)
    of the Act which, by its terms, applies to common carriers not
    "subject to the jurisdiction" of a state commission, the present
    discussion focuses more narrowly on whether a state is authorized to
    regulate the intrastate rates of a particular eligible
    telecommunications carrier. *Cf.*, Section IV., *infra*.

[^221]: *See* Section III.D.2.c., *supra,* for a discussion of
    implementation of enhanced Lifeline and expanded Link Up support.

[^222]: We note that all parties commenting on this issue support this
    result. *See, e.g.*, Bell Atlantic reply comments at 3 (stating that
    the Commission should not require tribal carriers not subject to
    state jurisdiction to seek state commission action or Commission
    waiver to obtain second-tier federal Lifeline support); *see also*
    GTE comments at 19-20; NTCA comments at 24; and Salt River/NTTA
    comments at 16.

[^223]: *Universal Service Order*, 12 FCC Rcd at 8963, para. 351.

[^224]: *Gila River Order,* para. 13.

[^225]: *See, e.g.,* NTCA comments at 16; TDS Telecom comments at 8.

[^226]: *See* Section III.D.2.c., *supra,* for a discussion of
    implementation of enhanced Lifeline and expanded Link Up support.

[^227]: *Universal Service Order*, 12 FCC Rcd at 8962, para. 350.

[^228]: Section 54.401(d) of the Commission's rules currently provides
    that:

    > The state commission shall file or require the carrier to file
    > information with the Administrator demonstrating that the
    > carrier's Lifeline plan meets the criteria set forth in this
    > subpart and stating the number of qualifying low-income consumers
    > and the amount of state assistance. Lifeline assistance shall be
    > made available to qualifying low-income consumers as soon as the
    > Administrator certifies that the carrier's Lifeline plan satisfies
    > the criteria set out in this subpart. 47 C.F.R. § 54.401(d). *See*
    > Appendix A reflecting revisions to section 54.401(d) adopted in
    > this Order.

[^229]: 47 U.S.C. § 254(e).

[^230]: 47 U.S.C. § 214(e)(2).

[^231]: 47 U.S.C. § 254(e).

[^232]: 47 U.S.C. § 214(e)(1).

[^233]: 47 U.S.C. § 214(e)(2).

[^234]: 143 Cong. Rec. H10807 (daily ed. Nov. 13, 1997) (statement of
    Rep. Bliley).

[^235]: 143 Cong. Rec. H10807 (daily ed. Nov. 13, 1997) (statement of
    Representative Bliley). Pursuant to section 254(e) of the Act, 47
    U.S.C. § 254(e), after the date on which the Commission's
    regulations implementing section 254 take effect, "only an eligible
    telecommunicatins carrier designated under section 214(e) shall be
    eligible to receive specific Federal universal service support."
    Section 54.201 of the Commission's rules, 47 C.F.R. § 54.201,
    provides that beginning January 1, 1998 only an eligible
    telecommunications carrier shall be eligible to receive universal
    service support.

[^236]: 143 Cong. Rec. S12568 (daily ed. Nov. 13, 1997) (statement of
    Sen. McCain).

[^237]: 47 U.S.C. § 214(e)(6).

[^238]: 47 U.S.C. § 214(e)(6). Before designating an additional eligible
    telecommunications carrier for an area served by a rural telephone
    company, the Commission must find that the designation is in the
    public interest.

[^239]: *Procedures for FCC Designation of Eligible Telecommunications
    Carriers Pursuant to Section 214(e)(6) of the Communications Act*,
    Public Notice, FCC 97-419 (rel. Dec. 29, 1997) (*Section 214(e)(6)
    Public Notice*). The Commission instructed carriers seeking
    designation to, among other things, set forth the following
    information in a petition: (1) a certification and brief statement
    of supporting facts demonstrating that the petitioner is "not
    subject to the jurisdiction of a state commission;" (2) a
    certification that the petitioner offers all services designated for
    support by the Commission pursuant to section 254(c); (3) a
    certification that the petitioner offers the supported services
    "either using its own facilities or a combination of its own
    facilities and resale of another carrier's services;" (4) a
    description of how the petitioner "advertise\[s\] the availability
    of the \[supported\] services and the charges therefor using media
    of general distribution." In addition, if the petitioner meets the
    definition of a "rural telephone company" pursuant to section 3(37)
    of the Act, the petitioner must identify its study area. If the
    petitioner is not a rural telephone company, the petitioner must
    include a detailed description of the geographic service area for
    which it requests a designation of eligibility from the Commission.
    *Id.*

[^240]: *See Designation of Fort Mojave Telecommunications, Inc.*, *Gila
    River Telecommunications, Inc.*, *San Carlos Telecommunications,
    Inc.*, and *Tohono O'odham Utility Authority as Eligible
    Telecommunications Carriers Pursuant to Section 214(e)(6) of the
    Communications Act*, Memorandum Opinion and Order, AAD/USB File No.
    98-28, DA 98-392 (rel. Feb. 27, 1998). *See also Petition of
    Saddleback Communications for Designation as an Eligible
    Telecommunications Carrier Pursuant to Section 214(e)(6) of the
    Communications Act*, Memorandum Opinion and Order, CC Docket No.
    96-45, DA 98-2237 (rel. Nov. 4, 1998). These petitions were placed
    on public notice by the Bureau. The Arizona Corporation Commission
    was notified by Commission staff regarding the petitions for
    designation. The Arizona Commission did not submit comments in
    response to the petitions, nor did it otherwise express any
    objection to the Commission's designation.

[^241]: *Further Notice*, 14 FCC Rcd at 21210, para. 75.

[^242]: *Further Notice*, 14 FCC Rcd at 21210, para. 75.

[^243]: *Further Notice*, 14 FCC Rcd at 21211, para. 76.

[^244]: *Further Notice*, 14 FCC Rcd at 21211, para. 78.

[^245]: *Further Notice*, 14 FCC Rcd at 21211-12, para. 78.

[^246]: *Further Notice*, 14 FCC Rcd at 21212, para. 79.

[^247]: *Further Notice*, 14 FCC Rcd at 21212, para. 80.

[^248]: *Further Notice*, 14 FCC Rcd at 21212-13, para. 80.

[^249]: *Further Notice*, 14 FCC Rcd at 21213, para. 81.

[^250]: *Further Notice* 14 FCC Rcd at 21213, para. 82.

[^251]: *Further Notice* 14 FCC Rcd at 21213, para. 82.

[^252]: *Further Notice*, 14 FCC Rcd at 21213, para. 82.

[^253]: *Further Notice*, 14 FCC Rcd at 21213, para. 82.

[^254]: *Further Notice*, 14 FCC Rcd at 21211, para. 77.

[^255]: 143 Cong. Rec. H10807-09 (dail ed. Nov. 13, 1997) (statement of
    Rep. Bliley).

[^256]: *See, e.g.,* BAM comments at 11 (contending that section
    214(e)(6) "applies whenever the state has no jurisdiction for
    whatever reason"); NTIA *ex parte* comments at 15 ("the amendment
    addresses a relatively limited number of instances in which, for one
    reason or another, the relevant State commission lacks jursidiction
    over a particular carrier..."). *See also* CenturyTel comments at 8
    ("Congress did not intend to replace state authority to grant
    \[eligible telecommunications carrier\] status, but rather to fill a
    void where states lack such authority under existing state law.").

[^257]: *See, e.g.*, Western Alliance comments at 3-7; NRTA & OPASTCO
    reply comments at 11-12.

[^258]: *Accord* NTIA *ex parte* comments at 13.

[^259]: For example, according to Senator McCain, the author of section
    214(e)(6), the amendment was necessary because, as enacted in 1996,
    "Section 214(e) \[did\] not account for the fact that State
    commissions in a few States have no jurisdiction over certain
    carriers. Typically States *also* have no jurisdiction over
    tribally-owned common carriers which may or may not be regulated by
    a tribal authority that is not a State Commission per se." 143 Cong.
    Rec. S12568 (daily ed. Nov. 13, 1997) (emphasis added). This
    intention was shared by the proponents of the amendment in the House
    of Representatives who noted that "some common carriers providing
    service today are not subject to the jurisdiction of a State
    commission; *most notably* some carriers owned or controlled by
    native Americans." *Id.* at H10807 (daily ed. November 13, 1997)
    (statement of Rep. Bliley) (emphasis added). *See also id*. at
    H10808 (statement of Rep. Markey) (bill allows Commission to
    designate as an eligible telecommunications carrier a "common
    carrier that is not subject to the jurisdiction of a State
    commission, *including* those telephone companies owned by certain
    federally-recognized Indian tribes") (emphasis added); *id*. at
    H10808 statement of Rep. Hayworth) (existing section 214(e) "has
    created a serious problem for certain telecom carriers,
    *particularly* some Indian tribes") (emphasis added).

[^260]: *See, e.g.*, NTIA *ex parte* comments at 13; BAM comments at 11;
    Western Wireless reply comments at 15-16.

[^261]: *See, e.g.*, BAM comments at 10; Western Wireless comments at
    5-7.

[^262]: *C.f.,* SBI comments at 5; USCC reply comments at 6-7.

[^263]: *See* 143 Cong. Rec. H10808 (daily ed. Nov. 13, 1997) (statement
    of Rep. Hayworth) ("Some, not all, but some States have no
    jurisdiction over tribally-owned carriers.").

[^264]: *See* Colloquy between Representatives Thune and Bliley, 143
    Cong. Rec. H10808-09 (daily ed. Nov. 13, 1997).

[^265]: *See, e.g.*, *White Mountain Apache Tribe v. Bracker*, 448 U.S.
    136 (1980); *Montana v. United States*, 450 U.S. 544 (1981); *Cotton
    Petroleum Corp. v. New Mexico*, 490 U.S. 163 (1989); *California v.
    Cabazon Band of Mission Indians*, 480 U.S. 202 (1987).

[^266]: *Further Notice*, 14 FCC Rcd at 21212, para. 80. The U.S.
    Supreme Court has cautioned that "\[g\]eneralizations on this
    subject have become . . . treacherous." *Mescalero Apache Tribe v.
    Jones*, 411 U.S. 145, 148 (1973).

[^267]: *White Mountain Apache Tribe v. Bracker*, 448 U.S. at 142.

[^268]: NTIA *ex parte* comments at 14.

[^269]: 47 U.S.C. § 332(c)(3), "\[n\]otwithstanding section 2(b) and
    221(b), no State or local government shall have any authority to
    regulate the entry of or the rates charged by any commercial mobile
    service or any private mobile service, except that this paragraph
    shall not prohibit a State from regulating the other terms and
    conditions of commercial mobile services." *C.f.,* BAM comments at
    13.

[^270]: *See Petition of Pittencrieff Communications, Inc. for
    Declaratory Ruling Regarding Preemption of the Texas Public Utility
    Regulatory Act of 1995*, Memorandum Opinion and Order, File No.
    WTB/POL 96-2, 13 FCC Rcd. 1735, 1746 (1997) (holding that
    requirement that CMRS providers contribute to state universal
    service fund does not constitute entry regulation within the meaning
    of section 332(c)(3)), *aff'd sub nom.* *CTIA v. FCC*, 168 F.3d 1332
    (D.C.Cir. 1999).

[^271]: 47 U.S.C. §253.

[^272]: *See, e.g.*, Arkansas Public Service Commission, *In the Matter
    of Determining Eligible Telecommunications Carriers in Arkansas*,
    Order, Docket No. 97-326-U (November 7, 1997); Public Service
    Commission of Wisconsin, *In the Matter of Designation of Eligible
    Telecommunications Carriers Under Part 54 of Title 47 of the Code of
    Federal Regulations*, Findings of Fact, Conclusions of Law and Final
    Order (December 23, 1997); Washington Utilities and Transportation
    Commission, *Order Designating Eligible Telecommunications Carriers,
    United States Cellular Corporation, et. al.*, (December 23, 1997).

[^273]: As discussed in greater detail in Section IV.C.3., *infra.*, we
    establish a separate framework for carriers seeking a designation of
    eligibility pursuant to section 214(e)(6) for service provided on
    tribal lands.

[^274]: For example, Cellco and Western Wireless have filed petitions
    asserting that state law precludes the state commissions in
    Delaware, Maryland, and Wyoming from making the eligible
    telecommunications carrier designations for wireless carriers in
    those states. *See Western Wireless Petition For Designation as an
    Eligible telecommunications carrier in the State of Wyoming*,
    September 29, 1999 (Wyoming Petition); *Cellco Partnership d/b/a
    Bell Atlantic Mobile Petition for Designation as an Eligible
    Telecommunications Carrier*, September 8, 1999 (contending that
    state law precludes the designation of CMRS carriers by the Delaware
    Public Service Commisssion and the Maryland State Public Service
    Commission) (Cellco Petition). Western Wireless' request for
    eligible telecommunications carrier designation was dismissed by the
    Wyoming Public Service Commission (Wyoming Commission) on the
    grounds that the Wyoming Telecommunications Act (Wyoming Act) denies
    the Wyoming Commission the authority for regulating
    "telecommunications services using . . . cellular technology,"
    except for quality of service. As discussed *supra* in Section
    IV.C.1., we reject commenters' claims that state commission
    designation of CMRS carriers violates the prohibition against state
    entry and rate regulation under section 332(c) of the Act.

[^275]: *See, e.g., Kremer v. Chemical Construction Corp.,* 456 U.S. 461
    (1982); Letter from Susan Stevens Miller, Maryland Public Service
    Commission, to Magalie R. Salas, FCC, dated April 18, 2000 (Maryland
    Commission *ex parte* comments). "Only after a State commission
    finds that it lacks the jurisdiction necessary should the CMRS
    provider file with the FCC. The State commission, not the FCC,
    should be responsible for determining its jurisdiction under state
    law." *Id.* at 2.

[^276]: *See* Letter from Competitive Universal Service Coalition, to
    Chairman William Kennard, FCC, dated March 8, 2000 at 2 (indicating
    that some state commissions have delayed consideration of
    eligibility designation applications by a year and a half).

[^277]: The Commission has recognized the importance of competitively
    neutral support mechanisms between competitive entrants and
    incumbent carriers in promoting competition and the provision of
    service in high-cost areas. *Universal Service Order*, 12 FCC Rcd at
    8932, para. 287.

[^278]: *Universal Service Order*, 12 FCC Rcd at 8801, para. 48 ("an
    explicit recognition of competitive neutrality in the collection and
    distribution of funds and determination of *eligibility* in
    universal service support mechanisms is consistent with
    congressional intent and necessary to promote a pro-competitive,
    de-regulatory national policy framework.") (emphasis added).

[^279]: In the attached Further Notice of Proposed Rulemaking, Section
    V., *infra*, we seek comment on whether to adopt a rule that would
    require all requests for designation under section 214(e), whether
    filed with this Commission or a state commission, to be resolved
    within six months of the filing date, or some shorter period.

[^280]: *See, e.g.*, *White Mountain Apache Tribe v. Bracker*, 448 U.S.
    136; *Montana v. United States*, 450 U.S. 544; *Cotton Petroleum
    Corp. v. New Mexico*, 490 U.S. 163; *California v. Cabazon Band of
    Mission Indians*, 480 U.S. 202.

[^281]: *See Indian Policy Statement*.

[^282]: *See, e.g.,* *Montana v. Blackfeet Tribe*, 471 U.S. 759, 766
    (1985).

[^283]: *See, e.g.,* *White Mountain Apache Tribe v. Bracker*, 448 U.S.
    at 143-44; *Ramah Navajo School Bd. v. Bureau of Revenue of New
    Mexico*, 458 U.S. 832, 846 (1982).

[^284]: *See* paras. 107-108, *infra*.

[^285]: *See, e.g.,* Salt River/NTTA comments at 17-18; Western Wireless
    reply comments at 17.

[^286]: *See* para. 108, *infra*.

[^287]: *See, e.g., Designation of Fort Mojave Telecommunications,
    Inc.*, *Gila River Telecommunications, Inc.*, *San Carlos
    Telecommunications, Inc.*, and *Tohono O'odham Utility Authority as
    Eligible Telecommunications Carriers Pursuant to Section 214(e)(6)
    of the Communications Act*, Memorandum Opinion and Order, DA 98-392
    (rel. Feb. 27, 1998). *See also Petition of Saddleback
    Communications for Designation as an Eligible Telecommunications
    Carrier Pursuant to Section 214(e)(6) of the Communications Act*,
    Memorandum Opinion and Order, CC Docket No. 96-45, DA 98-2237 (rel.
    Nov. 4, 1998). These petitions were placed on public notice by the
    Bureau. The Arizona Corporation Commission was notified by
    Commission staff regarding the petitions for designation noted
    above. The Arizona Commission did not submit comments in response to
    the petitions, nor did it otherwise express any objection to the
    Commission's designation.

[^288]: *See infra* Section V*.*

[^289]: For purposes of this section, we define "tribal lands"
    consistent with the definition adopted in the context of our actions
    relating to Lifeline and Link Up in Section III of this Order.
    Specifically, for purposes of identifying the geographic areas for
    which we will make the jurisidctional determination described in
    Section IV.C.3, we define "tribal lands" to include the definitions
    of "reservation" and "near reservation," as those terms are defined
    under BIA's regulations. *See* 25 C.F.R. §§ 20.1(v) and 20.1(r);
    *see* *supra* Section III.B.2..

[^290]: *See, e.g.*, *White Mountain Apache Tribe v. Bracker*, 448 U.S.
    136; *Montana v. United States*, 450 U.S. 544; *Cotton Petroleum
    Corp. v. New Mexico*, 490 U.S. 163; *California v. Cabazon Band of
    Mission Indians*, 480 U.S. 202.

[^291]: *Cellco Partnership d/b/a Bell Atlantic Mobile Petition for
    Designation as an Eligible Telecommunications Carrier*, September 8,
    1999 (Cellco Petition).

[^292]: Cellco Petition at 3, 6-8 *citing* Md. Ann. Code, Public Utility
    Companies Article, §§ 2-112, 1-101(p), 1-101(bb); 26 Del. Ann. Code
    §§ 102(2), 202(c).

[^293]: Cellco Petition at 3.

[^294]: *Petition of Cellco Partnership D/B/A Bell Atlantic Mobile for
    Designation as an Elgible Telecommunications Carrier*, Public
    Notice, CC Docket No. 96-45, DA 99-2544 (rel. Nov. 16, 1999).

[^295]: Maryland Commission *ex parte* comments at 1-2.

[^296]: Delaware Commission Cellco Petition comments at 2.

[^297]: Maryland Commission *ex parte* comments at 1-2.

[^298]: Cellco Petition at n. 9.

[^299]: As discussed *supra* in Section IV.C.2., we find that an
    "affirmative statement" of the state commission may consist of any
    duly authorized letter, comment, or state commission order
    indicating that it lacks jurisdiction to perform designations over a
    particular carrier.

[^300]: *See* Maryland Commission *ex parte* comments at 2-3 (stating
    that carriers should seek a ruling from the state commission on the
    issue of jurisdiction).

[^301]: Delaware Commission Cellco Petition comments at 2-4.

[^302]: Delaware Commission Cellco Petition comments at 3, *citing* 26
    Del. Ann. Code § 202(c), *as amended by* 72 Del. Laws ch. 163 (July
    16, 1999).

[^303]: Delaware Commission Cellco Petition comments at 2-3.

[^304]: Delaware Commission Cellco Petition comments at 6.

[^305]: *The Amended Application of WWC Holding Co., Inc., (Western
    Wireless) For Authority To Be Designated As An Eligible
    Telecommunications Carrier*, Order Granting Motion to Dismiss
    Amended Application, Docket No. 70042-TA-98-1 (Record No. 4432),
    (Aug. 13, 1999) (*Wyoming Order*) *citing* the Wyoming
    Telecommunications Act of 1995.

[^306]: *Wyoming Order* at 2-4.

[^307]: *Western Wireless Petition for Designation as an Eligible
    Telecommunications Carrier in the State of Wyoming*, September 29,
    1999 (Wyoming Petition).

[^308]: *See generally* Wyoming Petition.

[^309]: *Western Wireless Corporation Petitions for Designation as an
    Eligible Telecommunications Carrier to Proivde Services Eligible for
    Universal Service Support in Wyoming*, Public Notice, CC Docket No.
    96-45, DA 99-2511 (rel. Nov. 12, 1999).

[^310]: *Western Wireless Corporation Petition for Designation as an
    Eligible Telecommuncations Carrier and for Related Waivers to
    Provide Universal Service to the Crow Reservation in Montana*,
    August 4, 1999 (Crow Petition). In addition, Western Wireless
    requested waivers of certain rules governing the amount and timing
    of high-cost and low-income support.

[^311]: Crow Petition at 7-8.

[^312]: *Montana PSC Docket No. D98.8.190*. Montana Commission Crow
    Petition comments at 1.

[^313]: *Western Wireless Corporation Petitions for Designation as an
    Eligible Telecommunications Carrier and for Related Waivers to
    Provide Services Eligible for Universal Service Support to Crow
    Reservation, Montana*, Public Notice, CC Docket No. 96-45, DA
    99-1847 (rel. Sept. 10, 1999).

[^314]: Montana Commission Crow Petition comments at 2-3 (noting that it
    has designated carriers serving tribal lands in Montana, including
    the Crow Reservation).

[^315]: *See* Montana Commission Crow Petition supplemental comments at
    1-2

[^316]: *See, e.g.*, CTIA Crow Petition comments at 5; Smith Bagley Crow
    Petition comments at 2; Western Wireless Crow Petition reply
    comments at 2-3.

[^317]: *Smith Bagley, Inc. Petition for Designation as an Eligible
    Telecommunications Carrier Under 47 U.S.C. § 214(e)(6)*, June 2,
    1999 (Smith Bagley Petition)

[^318]: Smith Bagley Petition at 5.

[^319]: *Petition of Smith Bagley, Inc. for Designation as an Eligible
    Telecommunications Carrier*, Public Notice, CC Docket No. 96-45, DA
    99-1331 (rel. July 6, 1999).

[^320]: Letter from Maureen A. Scott, Arizona Corporation Commission, to
    Magalie Roman Salas, FCC, dated July 27, 1999 (Arizona Commission
    comments) at 1.

[^321]: *Petition of the Cheyenne River Sioux Tribe Telephone Authority
    for Designation as an Eligible Telecommunications Carrier Pursuant
    to Section 214(e)(6) of the Communications Act*, January 7, 1998
    (Cheyenne Telephone Authority Petition) at 5.

[^322]: Cheyenne Telephone Authority Petition at 5. The Cheyenne River
    Sioux Tribe and South Dakota Commission have engaged in a lengthy
    dispute regarding the South Dakota Commission's authority to
    regulate activities on tribal land. *See Cheyenne River Sioux Tribe
    Telephone Authority v. Public Utilities Commission of South Dakota*,
    595 N.W. 2d 604 (S.D. 1999) (concluding that the South Dakota
    Commission's exercise of authority to regulate sale of telephone
    exchanges on tribal land was not preempted by federal law).

[^323]: Cheyenne Telephone Authority Petition at 7 *citing* Cheyenne
    River Sioux Tribe Resolution No. 337-97-CR (Nov. 5, 1997).

[^324]: Cheyenne Telephone Authority Petition at 7.

[^325]: Cheyenne Telephone Authority Petition at 7-8.

[^326]: Cheyenne Telephone Authority Petition at 8 *citing* *Findings of
    Fact, Conclusions of Law, Order and Notice of Entry of Order*, In
    the Matter of the Filing by Cheyenne River Sioux Tribe Telephone
    Authority for Designation as an Eligible Telecommunications Carrier,
    No. TC97-184 (Dec. 17, 1997).

[^327]: *See* Cheyenne Telephone Authority Petition.

[^328]: *Cheyenne River Sioux Tribe Telephone Authority Seeks FCC
    Designation as an Eligible Telecommunications Carrier Pursuant to
    Section 214(e)(6) of the Communications Act*, AAD/USB File No.
    98-21, DA 98-150 (rel. Jan. 28, 1998).

[^329]: Letter from Rolayne Ailts West, South Dakota PUC, to Magalie
    Roman Salas, FCC, dated August 25, 1998.

[^330]: According to the Cheyenne Tribal Authority, it submitted its
    request for designation to the South Dakota Commission prior to the
    adoption of section 214(e)(6) in order to continue to receive
    support after the eligibility requirements of the Act came into
    effect. Cheyenne Telephone Authority Petition at 7-8.

[^331]: Letter from James A. Casey, on behalf of the Cheyenne River
    Sioux Tribe Telephone Authority, to Magalie Roman Salas, FCC, dated
    August 23, 1999.

[^332]: *See, e.g.,* *Universal Service Order*, 12 FCC Rcd 8859, para.
    147.

[^333]: *Section 214(e)(6) Public Notice* at 1.

[^334]: The Commission has recognized the importance of competitively
    neutral support mechanisms between competitive entrants and
    incumbent carriers in promoting competition and the provision of
    service in high-cost areas. *Universal Service Order*, 12 FCC Rcd at
    8932, para. 287.

[^335]: *Universal Service Order*, 12 FCC Rcd at 8801, para. 48
    (agreeing with the Joint Board that an explicit recognition of
    competitive neutrality in the collection and distribution of funds
    and determination of *eligibility* in universal service support
    mechanisms is consistent with congressional intent and necessary to
    promote a pro-competitive, de-regulatory national policy framework)
    (emphasis added).

[^336]: 47 U.S.C. § 201(b) (allowing the Commission to prescribe such
    rules as may be necessary in the public interest to carry out the
    provisions of the Act); 47 U.S.C. § 253 (removal of barriers to
    entry); 47 U.S.C. § 254 (preserve and advance universal service).

[^337]: *AT&T v. Iowa Utilities Board*, 525 U.S. 366 (1999).

[^338]: *See* 5 U.S.C. § 603. The RFA, see 5 U.S.C. § 601 *et. seq.*,
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104‑ 121, 110 Stat. 847 (1996) (CWAAA). Title II
    of the CWAAA is the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA).

[^339]: *See* *Further Notice,* 14 FCC Rcd at 21270-21282.

[^340]: *See* 5 U.S.C. § 604.

[^341]: 47 U.S.C. § 254.

[^342]: 47 U.S.C. § 214(e).

[^343]: 47 U.S.C. § 254(e).

[^344]: *See* Section III.C.2., *supra*.

[^345]: 5 U.S.C. § 603(b)(3).

[^346]: 5 U.S.C. § 601(6).

[^347]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small business concern" in 15 U.S.C. § 632). Pursuant to the RFA,
    the statutory definition of a small business applies "unless an
    agency, after consultation with the Office of Advocacy of the Small
    Business Administration and after opportunity for public comment,
    establishes one or more definitions of such term which are
    appropriate to the activities of the agency and publishes such
    definition(s) in the Federal Register." 5 U.S.C. § 601(3).

[^348]: Small Business Act, 15 U.S.C. § 632.

[^349]: 5 U.S.C. § 601(4).

[^350]: 1992 Economic Census, U.S. Bureau of the Census, Table 6
    (special tabulation of data under contract to Office of Advocacy of
    the U.S. Small Business Administration).

[^351]: 5 U.S.C. § 601(5).

[^352]: U.S. Dept. of Commerce, Bureau of the Census, "1992 Census of
    Governments."

[^353]: *Id*.

[^354]: 13 C.F.R. § 121.201.

[^355]: FCC, *Carrier Locator: Interstate Service Providers*, Figure 1
    (Jan. 2000) (*Carrier Locator*). *See also* 47 C.F.R. § 64.601 *et
    seq.* (TRS).

[^356]: *Carrier Locator* at Fig. 1.

[^357]: 5 U.S.C. § 601(3).

[^358]: Letter from Jere W. Glover, SBA, to Chmn. William E. Kennard,
    FCC, dated May 27, 1999. The Small Business Act contains a
    definition of "small business concern," which the RFA incorporates
    into its own definition of "small business." *See* 15 U.S.C. §
    632(a) (Small Business Act); 5 U.S.C. § 601(3) (RFA). SBA
    regulations interpret "small business concern" to include the
    concept of dominance on a national basis. 13 C.F.R. § 121.102(b).
    Since 1996, out of an abundance of caution, the Commission has
    included small incumbent LECs in its regulatory flexibility
    analyses. *See, e.g.*, *Implementation of the Local Competition
    Provisions of the Telecommunications Act of 1996*, CC Docket No.
    96-98, First Report and Order, 11 FCC Rcd 15499, 16144-45 (1996).

[^359]: United States Department of Commerce, Bureau of the Census,
    *1992 Census of Transportation*, Communications, and Utilities:
    Establishment and Firm Size, at Firm Size 1‑123 (1995) ("1992
    Census").

[^360]: 15 U.S.C. § 632(a)(1).

[^361]: 1992 Census, *supra*, at Firm Size 1‑123.

[^362]: 13 C.F.R. § 121.201, SIC Code 4813.

[^363]: 13 C.F.R. § 121.210, SIC Code 4813.

[^364]: *See* 47 C.F.R. § 64.601 *et seq.*; *Carrier Locator* at Fig. 1.

[^365]: *Carrier Locator* at Fig. 1. The total for resellers includes
    both toll resellers and local resellers. The TRS category for CAPs
    also includes competitive local exchange carriers (CLECs) (total of
    129 for both).

[^366]: United States Department of Commerce, Bureau of the Census,
    *1992 Census of Transportation*, Communications, and Utilities:
    Establishment and Firm Size, at Firm Size 1‑123 (1995) ("1992
    Census").

[^367]: 13 C.F.R. § 121.201, SIC Code 4812.

[^368]: *Id.*

[^369]: *Carrier Locator* at Fig. 1.

[^370]: *See* *Amendment of Parts 20 and 24 of the Commission's Rules --
    Broadband PCS Competitive Bidding and the Commercial Mobile Radio
    Service Spectrum Cap*, Report and Order, FCC 96-278, WT Docket No.
    96-59, paras. 57-60 (June 24, 1996), 61 FR 33859 (July 1, 1996);
    *see also* 47 C.F.R. § 24.720(b).

[^371]: *Id.*, at para. 60.

[^372]: *Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding*, PP Docket No. 93-253, Fifth Report and Order,
    9 FCC Rcd 5532, 5581-84 (1994).

[^373]: *See Amendment of Parts 2 and 90 of the Commission's Rules to
    Provide for the Use of 200 Channels Outside the Designated Filing
    Areas in the 896-901 MHz and the 935-940 MHz Bands Allotted to the
    Specialized Mobile Radio Pool*, PR Docket No. 89-583, Second Order
    on Reconsideration and Seventh Report and Order, 11 FCC Rcd 2639,
    2693-702 (1995); *Amendment of Part 90 of the Commission's Rules to
    Facilitate Future Development of SMR Systems in the 800 MHz
    Frequency Band*, PR Docket No. 93-144, First Report and Order,
    Eighth Report and Order, and Second Further Notice of Proposed
    Rulemaking, 11 FCC Rcd 1463 (1995).

[^374]: 13 C.F.R. § 121.201, SIC Code 4812. This definition provides
    that a small entity is a radiotelephone company employing no more
    than 1,500 persons.

[^375]: U.S. Bureau of the Census, U.S. Department of Commerce, 1992
    Census of Transportation, Communications, and Utilities, UC92‑S‑1,
    Subject Series, Establishment and Firm Size, Table 5, Employment
    Size of Firms; 1992, SIC code 4812 (issued May 1995).

[^376]: 220 MHz Third Report and Order, 12 FCC Rcd 10943, 11068‑70, at
    paras. 291‑ 295 (1997). The SBA has approved these definitions.
    *See* Letter from A. Alvarez, SBA, to D. Phythyon, FCC (Jan. 6,
    1998).

[^377]: 220 MHz Third Report and Order, 12 FCC Rcd at 11068‑69, para.
    291.

[^378]: *See generally* Public Notice, "220 MHz Service Auction Closes,"
    Report No. WT 98‑36 (Wireless Telecom. Bur. Oct. 23, 1998).

[^379]: Public Notice, "FCC Announces It is Prepared to Grant 654 Phase
    II 220 MHz Licenses After final Payment is Made," Report No.
    AUC-18-H, DA No. 99-229 (Wireless Telecom. Bur. Jan. 22, 1999).

[^380]: Public Notice, "Phase II 220 MHz Service Spectrum Auction
    Closes," Report No. AUC-99-24-E, DA No. 99-1287 (Wireless Telecom.
    Bur. July 1, 1999).

[^381]: The service is defined in section 22.99 of the Commission\'s
    rules, 47 C.F.R. § 22.99.

[^382]: BETRS is defined in sections 22.757 and 22.759 of the
    Commission\'s rules, 47 C.F.R. §§ 22.757, 22.759.

[^383]: 13 C.F.R. § 121.201, SIC Code 4812.

[^384]: The service is defined in section 22.99 of the Commission\'s
    rules, 47 C.F.R. § 22.99.

[^385]: 13 C.F.R. § 121.201, SIC Code 4812.

[^386]: 47 C.F.R. § 101 *et seq.* (formerly, Part 21 of the
    Commission\'s rules).

[^387]: Persons eligible under Parts 80 and 90 of the Commission\'s
    rules can use Private Operational-Fixed Microwave services. *See* 47
    C.F.R. Parts 80 and 90. Stations in this service are called
    operational-fixed to distinguish them from common carrier and public
    fixed stations. Only the licensee may use the operational-fixed
    station, and only for communications related to the licensee\'s
    commercial, industrial, or safety operations.

[^388]: Auxiliary Microwave Service is governed by Part 74 of the
    Commission\'s rules. *See* 47 C.F.R. § 74 *et seq.* Available to
    licensees of broadcast stations and to broadcast and cable network
    entities, broadcast auxiliary microwave stations are used for
    relaying broadcast television signals from the studio to the
    transmitter, or between two points such as a main studio and an
    auxiliary studio. The service also includes mobile TV pickups, which
    relay signals from a remote location back to the studio.

[^389]: 13 C.F.R. § 121.201, SIC Code 4812.

[^390]: 47 C.F.R. § 21.961(b)(1).

[^391]: *See* *Amendment of Parts 21 and 74 of the Commission's Rules
    With Regard to Filing Procedures in the Multipoint Distribution
    Service and in the Instructional Television Fixed Service and
    Implementation of Section 309(j) of the Communications Act -
    Competitive Bidding,* MM Docket No. 94-31 and PP Docket No. 93-253,
    Report and Order, 10 FCC Rcd 9589 (1995).

[^392]: One of these small entities, O'ahu Wireless Cable, Inc., was
    subsequently acquired by GTE Media Ventures, Inc., which did not
    qualify as a small entity for purposes of the MDS auction.

[^393]: 13 C.F.R. § 121.201.

[^394]: *See* Section III.D.2.d., *supra*.

[^395]: *See, e.g., Universal Service Order*, 12 FCC Rcd at 8993, para.
    407.

[^396]: *See, e.g.,* Letter from David Cosson, Kraskin, Lesse & Cosson,
    LLP to Irene Flannery, FCC, dated May 15, 2000 (citing indication by
    company that designs billing software for 60 rural telephone
    companies that billing could be "readily" modified to account for
    expanded Lifeline support for tribal communities).

[^397]: *See* *supra,* at para. 158 (defining "small governmental
    jurisdiction").

[^398]: *See* 5 U.S.C. § 553(d).

[^399]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et. seq.*,
    has been amended by the Contract with America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of
    the CWAAA is the Small Business Regulatory Enforcement Fairness Act
    of 1996 (SBREFA).

[^400]: *See* 5 U.S.C. § 603(a).

[^401]: *See id.*

[^402]: 47 U.S.C. § 254.

[^403]: 47 U.S.C. § 214(e).

[^404]: 47 U.S.C. § 254(e).

[^405]: *See* Section III.C.2., *supra*.

[^406]: 5 U.S.C. § 603(b)(3).

[^407]: 5 U.S.C. § 601(6).

[^408]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small business concern" in 15 U.S.C. § 632). Pursuant to the RFA,
    the statutory definition of a small business applies "unless an
    agency, after consultation with the Office of Advocacy of the Small
    Business Administration and after opportunity for public comment,
    establishes one or more definitions of such term which are
    appropriate to the activities of the agency and publishes such
    definition(s) in the Federal Register." 5 U.S.C. § 601(3).

[^409]: Small Business Act, 15 U.S.C. § 632.

[^410]: 5 U.S.C. § 601(4).

[^411]: 1992 Economic Census, U.S. Bureau of the Census, Table 6
    (special tabulation of data under contract to Office of Advocacy of
    the U.S. Small Business Administration).

[^412]: 5 U.S.C. § 601(5).

[^413]: U.S. Dept. of Commerce, Bureau of the Census, "1992 Census of
    Governments."

[^414]: *Id*.

[^415]: 13 C.F.R. § 121.201.

[^416]: FCC, *Carrier Locator: Interstate Service Providers*, Figure 1
    (Jan. 2000) (*Carrier Locator*). *See also* 47 C.F.R. § 64.601 *et
    seq.* (TRS).

[^417]: *Carrier Locator* at Fig. 1.

[^418]: 5 U.S.C. § 601(3).

[^419]: Letter from Jere W. Glover, SBA, to Chmn. William E. Kennard,
    FCC, dated May 27, 1999. The Small Business Act contains a
    definition of "small business concern," which the RFA incorporates
    into its own definition of "small business." *See* 15 U.S.C. §
    632(a) (Small Business Act); 5 U.S.C. § 601(3) (RFA). SBA
    regulations interpret "small business concern" to include the
    concept of dominance on a national basis. 13 C.F.R. § 121.102(b).
    Since 1996, out of an abundance of caution, the Commission has
    included small incumbent LECs in its regulatory flexibility
    analyses. *See, e.g.*, *Implementation of the Local Competition
    Provisions of the Telecommunications Act of 1996*, CC Docket No.
    96-98, First Report and Order, 11 FCC Rcd 15499, 16144-45 (1996).

[^420]: United States Department of Commerce, Bureau of the Census,
    *1992 Census of Transportation*, Communications, and Utilities:
    Establishment and Firm Size, at Firm Size 1‑123 (1995) ("1992
    Census").

[^421]: 15 U.S.C. § 632(a)(1).

[^422]: 1992 Census, *supra*, at Firm Size 1‑123.

[^423]: 13 C.F.R. § 121.201, SIC Code 4813.

[^424]: 13 C.F.R. § 121.210, SIC Code 4813.

[^425]: *See* 47 C.F.R. § 64.601 *et seq.*; *Carrier Locator* at Fig. 1.

[^426]: *Carrier Locator* at Fig. 1. The total for resellers includes
    both toll resellers and local resellers. The TRS category for CAPs
    also includes competitive local exchange carriers (CLECs) (total of
    129 for both).

[^427]: United States Department of Commerce, Bureau of the Census,
    *1992 Census of Transportation*, Communications, and Utilities:
    Establishment and Firm Size, at Firm Size 1‑123 (1995) ("1992
    Census").

[^428]: 13 C.F.R. § 121.201, SIC Code 4812.

[^429]: *Id.*

[^430]: *Carrier Locator* at Fig. 1.

[^431]: *See* *Amendment of Parts 20 and 24 of the Commission's Rules --
    Broadband PCS Competitive Bidding and the Commercial Mobile Radio
    Service Spectrum Cap*, Report and Order, FCC 96-278, WT Docket No.
    96-59, paras. 57-60 (June 24, 1996), 61 FR 33859 (July 1, 1996);
    *see also* 47 C.F.R. § 24.720(b).

[^432]: *Id.*, at para. 60.

[^433]: *Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding*, PP Docket No. 93-253, Fifth Report and Order,
    9 FCC Rcd 5532, 5581-84 (1994).

[^434]: *See Amendment of Parts 2 and 90 of the Commission's Rules to
    Provide for the Use of 200 Channels Outside the Designated Filing
    Areas in the 896-901 MHz and the 935-940 MHz Bands Allotted to the
    Specialized Mobile Radio Pool*, PR Docket No. 89-583, Second Order
    on Reconsideration and Seventh Report and Order, 11 FCC Rcd 2639,
    2693-702 (1995); *Amendment of Part 90 of the Commission's Rules to
    Facilitate Future Development of SMR Systems in the 800 MHz
    Frequency Band*, PR Docket No. 93-144, First Report and Order,
    Eighth Report and Order, and Second Further Notice of Proposed
    Rulemaking, 11 FCC Rcd 1463 (1995).

[^435]: 13 C.F.R. § 121.201, SIC Code 4812. This definition provides
    that a small entity is a radiotelephone company employing no more
    than 1,500 persons.

[^436]: U.S. Bureau of the Census, U.S. Department of Commerce, 1992
    Census of Transportation, Communications, and Utilities, UC92‑S‑1,
    Subject Series, Establishment and Firm Size, Table 5, Employment
    Size of Firms; 1992, SIC code 4812 (issued May 1995).

[^437]: 220 MHz Third Report and Order, 12 FCC Rcd 10943, 11068‑70, at
    paras. 291‑ 295 (1997). The SBA has approved these definitions.
    *See* Letter from A. Alvarez, SBA, to D. Phythyon, FCC (Jan. 6,
    1998).

[^438]: 220 MHz Third Report and Order, 12 FCC Rcd at 11068‑69, para.
    291.

[^439]: *See generally* Public Notice, "220 MHz Service Auction Closes,"
    Report No. WT 98‑36 (Wireless Telecom. Bur. Oct. 23, 1998).

[^440]: Public Notice, "FCC Announces It is Prepared to Grant 654 Phase
    II 220 MHz Licenses After final Payment is Made," Report No.
    AUC-18-H, DA No. 99-229 (Wireless Telecom. Bur. Jan. 22, 1999).

[^441]: Public Notice, "Phase II 220 MHz Service Spectrum Auction
    Closes," Report No. AUC-99-24-E, DA No. 99-1287 (Wireless Telecom.
    Bur. July 1, 1999).

[^442]: The service is defined in section 22.99 of the Commission\'s
    rules, 47 C.F.R. § 22.99.

[^443]: BETRS is defined in sections 22.757 and 22.759 of the
    Commission\'s rules, 47 C.F.R. §§ 22.757, 22.759.

[^444]: 13 C.F.R. § 121.201, SIC Code 4812.

[^445]: The service is defined in section 22.99 of the Commission\'s
    rules, 47 C.F.R. § 22.99.

[^446]: 13 C.F.R. § 121.201, SIC Code 4812.

[^447]: 47 C.F.R. § 101 *et seq.* (formerly, Part 21 of the
    Commission\'s rules).

[^448]: Persons eligible under Parts 80 and 90 of the Commission\'s
    rules can use Private Operational-Fixed Microwave services. *See* 47
    C.F.R. Parts 80 and 90. Stations in this service are called
    operational-fixed to distinguish them from common carrier and public
    fixed stations. Only the licensee may use the operational-fixed
    station, and only for communications related to the licensee\'s
    commercial, industrial, or safety operations.

[^449]: Auxiliary Microwave Service is governed by Part 74 of the
    Commission\'s Rules. *See* 47 C.F.R. § 74 *et seq.* Available to
    licensees of broadcast stations and to broadcast and cable network
    entities, broadcast auxiliary microwave stations are used for
    relaying broadcast television signals from the studio to the
    transmitter, or between two points such as a main studio and an
    auxiliary studio. The service also includes mobile TV pickups, which
    relay signals from a remote location back to the studio.

[^450]: 13 C.F.R. § 121.201, SIC Code 4812.

[^451]: 47 C.F.R. § 21.961(b)(1).

[^452]: *See* *Amendment of Parts 21 and 74 of the Commission's Rules
    With Regard to Filing Procedures in the Multipoint Distribution
    Service and in the Instructional Television Fixed Service and
    Implementation of Section 309(j) of the Communications Act -
    Competitive Bidding,* MM Docket No. 94-31 and PP Docket No. 93-253,
    Report and Order, 10 FCC Rcd 9589 (1995).

[^453]: One of these small entities, O'ahu Wireless Cable, Inc., was
    subsequently acquired by GTE Media Ventures, Inc., which did not
    qualify as a small entity for purposes of the MDS auction.

[^454]: 13 C.F.R. § 121.201.

[^455]: 47 U.S.C. § 214(e).

[^456]: 47 U.S.C. § 254(e).

[^457]: 47 C.F.R. §§ 1.415, 1.419.

[^458]: 47 U.S.C. § 254(b)(3).

[^459]: *See* "FCC Announces the Indian Telecom Training Initiative to
    be Held September 25-28, 2000" (rel. Apr. 24, 2000)
    \<http://www.fcc.gov/Bureaus/Wireless/News_Releases/2000/nrwl0012.doc\>.

[^460]: Indeed, the *Order*'s attempt to justify expansion of funding on
    the basis of the current record is, at best, curious. The *Order*
    merely points to evidence of a correlation between low income and
    low subscribership, without making any effort to show why this
    *correlation* demonstrates *causation* (*i.e.,* that this
    correlation shows that inhabitants of tribal lands do not subscribe
    *because* they are poor)*.* Similarly, the *Order*'s reliance on
    efforts to increase Lifeline support in other areas to justify
    expanding such support to the poor on tribal lands is undermined by
    the central premise of our efforts to improve subscribership on
    these lands: that methods successful in promoting subscribership in
    most poor areas have not been effective in promoting subscribership
    in tribal areas.