*Pages 1--7 from  Microsoft Word - 43534.doc*
 Federal  Communications  Commission  FCC  04-  256 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of 
 GTE  Hawaiian  Telephone  Company,  Inc. 
 Application  for  Review  of  a  Decision  by  the  Common  Carrier  Bureau 


 Sandwich  Isles  Communications,  Inc. 
 Petition  for  Waiver  of  Section  36.611  of  the  Commissions  Rules  and  Request  for  Clarification 


 )  ) 
 )  ) 
 )  ) 
 )  ) 
 )  ) 
 )  )  AAD  97-  82 


 MEMORANDUM  OPINION  AND  ORDER 
 Adopted:  October  25,  2004  Released:  October  29,  2004 
 By  the  Commission:  Commissioner  Copps  concurring  and  issuing  a  statement. 


 I.  INTRODUCTION 
 1.  In  this  Memorandum  Opinion  and  Order,  we  grant  Verizon  Hawaii,  Inc.  s  (Verizon  Hawaii)  (formerly  GTE  Hawaiian  Telephone  Company)  (GTE)  Application  for  Review  of  a  decision  by 


 the  Accounting  and  Audits  Division  of  the  Common  Carrier  Bureau  (Bureau)  made  on  delegated  authority,  granting  Sandwich  Isles  Communications,  Inc.  (Sandwich  Isles)  a  waiver  to  be  treated  as  an 
 incumbent  local  exchange  carrier  (LEC)  serving  a  previously  unserved  area  for  purposes  of  receiving  high-  cost  universal  service  support.  1  As  explained  below,  we  conclude  that  the  Bureau  erred  by  ignoring 
 evidence  in  the  record  that  the  areas  Sandwich  Isles  proposed  to  serve  were  not  unserved.  Consistent  with  Commission  precedent,  we  require  Sandwich  Isles  to  seek  and  obtain  a  study  area  waiver  in  order  to  be 
 treated  as  an  incumbent  LEC  for  purposes  of  receiving  universal  service  support. 
 II.  BACKGROUND 
 2.  Sandwich  Isles  Petition.  On  July  8,  1997,  Sandwich  Isles  filed  a  petition  requesting  a  waiver  of  section  36.611  of  the  Commissions  rules  to  permit  it  to  receive  high-  cost  loop  support  based 


 1  Sandwich  Isles  Communications,  Inc.,  Petition  for  Waiver  of  Section  36.  611  of  the  Commissions  Rules  and 
 Request  for  Clarification,  Order,  AAD  97-  82,  13  FCC  Rcd  2407  (Acct.  Aud.  Div.  1998)  (Sandwich  Isles);  Application  for  Review  of  an  Order  Granting  in  Part  a  Petition  for  Waiver  by  Sandwich  Isles  Communications,  Inc., 


 by  GTE  Hawaiian  Telephone  Company  Incorporated,  filed  March  5,  1998  (Application  for  Review).  Verizon  Hawaii  is  the  successor  to  GTE.  In  this  Memorandum  Opinion  and  Order,  we  refer  to  Verizon  Hawaii  to  identify 
 the  legal  entity  whose  claims  we  address.  We  refer  to  GTE  to  identify  the  historical  entity  that  was  providing  telephone  service  in  Hawaii  when  the  Application  for  Review  was  filed.  The  Accounting  and  Audits  Division 
 subsequently  became  the  Accounting  Policy  Division.  The  Accounting  Policy  Division  and  the  Common  Carrier  Bureau  subsequently  became  the  Telecommunications  Access  Policy  Division  and  the  Wireline  Competition 
 Bureau,  respectively,  pursuant  to  the  Commissions  reorganization  in  March  2002. 
1
 Federal  Communications  Commission  FCC  04-  256 
 2 
 on  projected  costs  until  historical  costs  became  available.  2  Sandwich  Isles  said  that  it  was  a  new  LEC  that  would  be  providing  service  to  previously  unserved  portions  of  the  Hawaiian  Home  Lands.  Sandwich 
 Isles  also  sought  clarification  or,  to  the  extent  necessary,  waiver  of  the  definition  of  incumbent  LEC  for  purposes  of  calculating  universal  service  support  and  Part  69  of  the  Commissions  rules.  Sandwich  Isles 
 claimed  it  was  not  required  to  seek  a  study  area  waiver  because  it  was  establishing  a  study  area  serving  previously  unserved  areas.  3 


 3.  Opposition  and  Reply.  After  the  comment  period  had  closed,  Verizon  Hawaii  filed  an  Opposition  to  Sandwich  Isles  Petition  arguing  that  the  areas  Sandwich  Isles  proposed  to  serve  were  not, 
 in  fact,  currently  unserved,  because  they  were  within  the  serving  territory  of  Verizon  Hawaiis  central  offices.  4  Although  some  areas  currently  had  no  telephone  service,  these  were  new  subdivisions  adjacent 
 to  areas  served  by  GTE.  5  Verizon  Hawaii  further  stated  that  it  is  obligated  to  provide  service  throughout  the  state.  6  In  reply,  Sandwich  Isles  argued  that  there  was  no  overlap  in  the  Hawaiian  Home  Lands  service 
 areas  described  in  its  Petition  and  areas  served  by  GTE.  7  Sandwich  Isles  argued  that  GTE  could  not  provide  service  to  the  Hawaiian  Home  Lands  described  in  its  Petition  because  Sandwich  Isles  is 
 exclusively  licensed  to  serve  those  areas.  8 
 4.  Bureau  Order  under  Review.  On  February  3,  1998,  the  Bureau  granted  in  large  part  Sandwich  Isles  Petition.  Specifically,  the  Bureau  granted  Sandwich  Isles  a  waiver  of  section  36.611  of 


 the  Commissions  rules  to  the  extent  necessary  to  permit  it  to  receive  high-  cost  loop  support  for  the  period  January  1,  1998  through  December  31,  1999  based  initially  on  projected  costs  followed  by 
 quarterly  true-  ups  using  actual  costs.  9  In  addition,  the  Bureau  waived  the  incumbent  LEC  requirements  of  Part  36  and  69  of  the  Commissions  rules  to  permit  Sandwich  Isles  to  receive  high-  cost  loop  support 
 based  on  its  costs  and  to  become  a  member  of  the  National  Exchange  Carriers  Association  (NECA).  10  In  addition,  the  Bureau  said  that  for  regulatory  purposes  we  will  recognize  Sandwich  Isles  service  territory 
 in  Hawaii  as  a  study  area.  11  Finally,  the  Bureau  denied  Verizon  Hawaiis  Petition  to  Accept  Late-  Filed  Comments  and  did  not  consider  the  claims  made  in  its  Opposition.  12 


 2  Sandwich  Isles  Communications,  Inc.,  Petition  for  Waiver  of  Section  36.  611  of  the  Commissions  Rules  and 
 request  for  Clarification,  AAD  97-  82,  filed  July  8,  1997  (Petition).  3 
 See  Petition  at  n.  3.  4 
 Opposition  of  GTE  Hawaiian  Telephone  Company  Incorporated  to  Sandwich  Isles  Communications,  Inc.  s  Petition  for  Waiver  and  Request  for  Clarification  and  Affidavit  in  Support  of  Opposition,  filed  Sept.  15,  1997  at  2 


 (Opposition  to  Petition).  See  also  Petition  to  Accept  Late-  filed  Comments  and  Opposition,  by  GTE  Hawaiian  Telephone  Company  Incorporated,  filed  Sept.  15,  1997. 
 5  See  id. 
 6  See  id.  at  8-  9.  (  Under  its  charter,  GTE  Hawaiian  Tel  has  an  obligation  to  continue  to  provide  service  throughout 
 the  State  to  any  resident  who  requests  service  unless  the  commission  designates  another  carrier  as  the  carrier  of  last  resort)  (citation  omitted).  See  also  id.,  Affidavit  of  Susan  Eichor  at  1. 


 7  Reply  to  Late-  Filed  Comments  and  Opposition,  by  Sandwich  Isles  Communications,  Inc.,  filed  Oct.  2,  1997,  at  5 
 (Reply).  8 
 Reply  at  6.  9 
 Sandwich  Isles,  13  FCC  Rcd  at  2411.  The  Bureau  denied  Sandwich  Isles  request  for  a  waiver  to  allow  it  to  receive  high-  cost  loop  support  for  the  period  December  2,  1997  to  December  31,  1997.  Id. 


 10  Id.  at  2413. 
 11  Id. 
 12  Id. 
2
 Federal  Communications  Commission  FCC  04-  256 
 3 
 5.  Application  for  Review.  On  March  5,  1998,  Verizon  Hawaii  filed  an  Application  for  Review  of  Sandwich  Isles,  making  essentially  the  same  arguments  it  made  in  its  Opposition  to  the 
 Sandwich  Isles  Petition.  13  On  March  27,  1998,  Sandwich  Isles  filed  an  Opposition  to  the  Application  for  Review,  making  essentially  the  same  arguments  it  made  in  its  Reply  to  the  Opposition  to  its  Petition.  14 
 Both  parties  submitted  additional  information,  but  this  information  did  not  fundamentally  change  the  pertinent  underlying  facts.  15 


 III.  DISCUSSION 
 6.  Section  1.115  of  the  Commissions  rules  specify  the  factors  that  warrant  Commission  consideration  of  the  issues  presented  in  an  application  for  review  of  action  taken  pursuant  to  delegated 


 authority.  16  The  Commission  considers,  among  other  things,  whether  the  action  taken  is  in  conflict  with  case  precedent  or  established  Commission  policy;  17  whether  it  was  based  upon  an  erroneous  finding  as  to 
 an  important  or  material  question  of  fact;  18  or  whether  there  was  prejudicial  procedural  error.  19 
 7.  We  conclude  that  the  Bureau  erred  by  failing  to  consider  the  facts  presented  by  Verizon  Hawaii  in  its  late-  filed  Opposition  to  Sandwich  Isles  Petition.  Although  the  Commission  does  not 


 routinely  grant  extensions  of  time,  20  we  agree  with  Verizon  Hawaii  that  the  Bureau  should  have  considered  the  facts  presented  in  this  case.  21  In  granting  Sandwich  Isles  request  for  waiver  of  36.611  of 
 the  Commissions  rules,  the  Bureau  relied  on  Border  to  Border  and  South  Park,  explaining  that  in  those 


 13  Application  for  Review. 
 14  Opposition  to  Application  for  Review,  by  Sandwich  Isles  Communications,  Inc.,  filed  March  27,  1998 
 (Opposition  to  Application  for  Review).  15 
 For  example,  both  parties  filed  maps  identifying  the  areas  Sandwich  Isles  proposed  to  serve.  See  Letter  from  W.  Scott  Randolph,  GTE,  to  Magalie  Roman  Salas,  FCC,  dated  April  2,  1998;  Supplement  and  Motion  for  Leave  to  File 


 Supplement,  by  Sandwich  Isles,  filed  June  1,  1998.  16 
 47  C.  F.  R.    1.115(  b).  Section  1.115(  b)(  2)  provides  that  the  application  for  review  shall  specify  from  among  the  factors  listed,  which  factors  warrant  Commission  consideration  of  the  questions  presented.  Id.  Verizon  Hawaii 


 claims  that  the  Bureaus  decision  is  premised  upon  an  erroneous  factual  finding  and  is  contrary  to  Commission  precedent,  and  that  the  Bureaus  refusal  to  consider  Verizon  Hawaiis  proferred  Opposition  to  Sandwich  Isles 
 Petition  resulted  in  prejudicial  procedural  error.  See  Application  for  Review  at  2-  4.  17 
 47  C.  F.  R.    1.115  (b)(  2)(  i).  18 
 47  C.  F.  R.    1.115  (b)(  2)(  ii).  19 
 47  C.  F.  R.    1.115  (b)(  2)(  v).  20 
 47  C.  F.  R.    1.  46(  a).  The  case  cited  by  the  Bureau  for  the  proposition  that,  [  g]  enerally,  it  is  not  Commission  policy  to  accept  late-  filed  comments,  are  all  tariff  cases.  Sandwich  Isles,  13  FCC  Rcd  at  2413,  para.  16.  Tariff 


 proceedings  have  statutory  deadlines  and  the  filing  deadlines  for  petitions  seeking  investigation,  suspension,  or  rejection  of  a  new  or  revised  tariff  are  governed  by  section  1.773(  a)(  2)  of  the  Commissions  rules,  rather  than 
 section  1.46(  a).  See  47  U.  S.  C.    204;  47  C.  F.  R.    1.773(  a)(  2).  21 
 In  this  case,  Verizon  Hawaiis  motion  requested  in  the  alternative  that  the  Commission  treat  its  late-  filled  Opposition  as  an  ex  parte  filing,  which  the  Bureau  declined  to  do.  However,  the  record  in  the  proceeding  was  not 


 closed,  as  three  months  thereafter  the  Bureau  received  from  Sandwich  Isles  additional  information  that  the  Bureau  itself  had  requested.  See  Letter  from  Sylvia  Lesse  and  Margaret  Nyland,  Counsel  for  Sandwich  Isles,  to  Magalie 
 Roman  Salas,  dated  Dec.  24,  1997.  Therefore,  because  the  Bureau  in  fact  had  ample  time  to  consider  the  information  contained  in  the  Opposition,  as  well  as  Sandwich  Isles  reply  thereto,  under  these  facts  the  Bureau 
 should  have  treated  that  opposition  as  an  ex  parte  filing.  Finally,  we  note  that  Verizon  Hawaiis  failure  to  serve  the  National  Exchange  Carrier  Association  does  not  bar  consideration  of  the  Opposition  as  an  ex  parte  filing  because 
 Verizon  Hawaii  did  serve  Sandwich  Isles  and,  thus,  had  standing  to  file  the  ex  parte. 
3
 Federal  Communications  Commission  FCC  04-  256 
 4 
 cases  it  had  permitted  immediate  access  to  high  cost  support  because  the  carriers  were  offering  to  serve  previously  unserved  areas  [that]  would  have  likely  remained  without  service  if  these  carriers  were  unable 
 to  provide  service.  22  The  Bureau  did  not  question  Sandwich  Isles  claim  that  it  would  be  providing  service  to  previously  unserved  rural  areas.  Verizon  Hawaii  raised  important  facts  with  regard  to 
 Sandwich  Isles  claim  that  the  areas  it  proposed  to  serve  were  previously  unserved.  23  In  particular,  Verizon  Hawaii  states  that  the  proposed  areas  were  served  by  GTE  central  offices.  24  These  facts  were 
 material  to  the  Bureaus  decision  to  grant  Sandwich  Isles  request  for  waiver  and  to  treat  it  as  an  incumbent  LEC  for  purposes  of  receiving  universal  service  support.  25 


 8.  Consistent  with  the  Commissions  recent  Skyline  decision,  we  require  Sandwich  Isles  to  seek  and  obtain  a  study  area  waiver  in  order  to  be  treated  as  an  incumbent  LEC  for  purposes  of  receiving 
 universal  service  support.  26  In  Skyline,  the  Commission  found  that  the  exchanges  served  by  Skyline  Telephone  Company  (Skyline)  were  within  the  Qwest  and  Verizon  study  areas  and  that  a  study  area 
 waiver  was  required  in  order  for  Skyline  Telephone  to  receive  support  for  a  newly  formed  study  area.  27  Skyline  had  sought  waiver  of  the  Commissions  rules  to  enable  it  to  receive  accelerated  high-  cost  loop 
 support  and  to  participate  in  NECA  pools  and  tariffs.  28  Skyline  asserted  that  it  was  not  required  to  seek  a  study  area  waiver  because  its  exchanges  constituted  a  previously  unserved  area.  29  The  Commission 


 22  Sandwich  Isles,  13  FCC  Rcd  at  2411,  para.  10.  See  Border  to  Border  Communications,  Inc.,  Petition  for  Waiver  of 
 Sections  36.  611  and  36.  612  of  the  Commissions  Rules,  Memorandum  Opinion  and  Order,  AAD  94-  61,  10  FCC  Rcd  5055  (Com.  Car.  Bur.  1995)  (Border  to  Border);  South  Park  Telephone  Company,  Petition  for  Waiver  of  Sections 


 36.  611  and  36.  612  of  the  Commissions  Rules,  Order,  AAD  97-  41,  13  FCC  Rcd  198  (Acct.  Aud.  Div.  1997)  (South  Park). 
 23  Verizon  Hawaii  also  claims  that  the  Bureaus  decision  is  contrary  to  Bureau  precedent  in  TelHawaii.  See 
 Application  for  Review  at  4-  7;  Opposition  at  3-  6;  Petition  for  Waivers  Filed  by  TelAlaska,  Inc.  and  TelHawaii,  Inc.  Concerning  Sections  36.  611,  36.  612,  61.  41(  c)(  2)  and  the  Definition  of  Study  Area  Contained  in  the  Part  36 


 Appendix-  Glossary  of  the  Commissions  Rules,  Memorandum  Opinion  and  Order,  AAD  96-  93,  12  FCC  RCd  10309,  10316,  para.  17  (Acct.  Aud.  Div.  1997)  (TelHawaii).  We  do  not  address  this  argument,  because  there  now  is  clear 
 Commission  precedent  on  the  issue.  See  infra  para.  8.  24 
 Verizon  Hawaii  indicates  that  some  proposed  areas  were  located  in  the  center  of  the  city  of  Honolulu  and    far  from  being  unserved    are  served  by  some  of  the  largest  central  offices  in  the  state  of  Hawaii.  See  Application 


 for  Review  at  9;  see  also  Opposition  to  Petition  at  7.  Although  Verizon  Hawaii  acknowledges  that  some  proposed  areas  did  not  have  telephone  service,  it  states  that  these  were  planned  Hawaiian  Home  Lands  subdivisions  that  had 
 not  yet  been  built  and  were  adjacent  to  subdivisions  served  by  GTE.  See  Application  for  Review  at  7  (  GTE  Hawaiian  Tel  is  presently  providing  service  to  subdivisions  directly  and  immediately  adjacent  to  those  identified  by 
 [Sandwich  Isles],  and  has  every  intention  of  providing  service  to  the  new  subdivisions  as  well.).  25 
 Sandwich  Isles  concedes  that  the  areas  it  proposed  to  serve  were  in  the  vicinity  of  existing  GTE  facilities,  but  argues  that  the  proposed  areas  met  the  definition  of  unserved  because  there  was  no  telephone  service  at  the  time  of 


 its  Petition.  Sandwich  Isles  Reply  at  5.  26 
 See  M&  L  Enterprises,  Inc.,  d/  b/  a  Skyline  Telephone  Company,  Petition  for  Waiver  of  Sections  36.  611,  36.  612,  and  69.  2(  hh)  of  the  Commissions  Rules.  CC  Docket  No.  96-  45,  Order,  FCC  04-  86  (rel.  April  12,  2004)  (Skyline) 


 27  Skyline,  FCC  04-  86,  at  paras.  11-  13. 
 28  The  Commission  dismissed  as  moot  Skylines  request  for  waiver  of  sections  36.  611  and  36.  612  of  the 
 Commissions  rules.  See  Skyline,  FCC  04-  86,  at  paras.  22-  23.  29 
 Skyline  relied  on  a  1996  Bureau  order  that  held  that  carriers  are  not  required  to  seek  study  area  waivers  if  a  separately  incorporated  company  is  establishing  a  study  area  for  a  previously  unserved  area.  See  Skyline,  FCC  04-86, 


 at  para.  10  &  n.  33;  Request  for  Clarification  filed  by  the  National  Exchange  Carrier  Association,  Inc.,  and  Petitions  for  Waiver  Filed  by  Alaska  Telephone  Company,  Ducor  Telephone  Company,  and  Kingsgate  Telephone, 
 Inc.,  Concerning  the  Definition  of  Study  Area  in  the  Part  36  Appendix-  Glossary  of  the  Commissions  Rules,  (continued....) 
4
 Federal  Communications  Commission  FCC  04-  256 
 5 
 explained  that  it  had  never  enunciated  an  exception  to  its  study  area  waiver  requirements  for  unserved  areas,  nor  had  the  term  unserved  been  defined  for  purposes  of  the  study  area  waiver  requirements 
 specifically,  or  Part  36  of  the  Commissions  rules,  more  generally.  30  The  Commission  concluded  that  treating  an  area  as  unserved  when  it  was  previously  within  an  existing  study  area  would  be  inconsistent 
 with  the  purpose  of  the  study  area  freeze  and  would  require  a  study  area  waiver.  31  The  Commissions  primary  objective  in  freezing  study  area  boundaries  was  to  prohibit  companies  from  setting  up  high-  cost 
 exchanges  within  existing  service  territories  as  separate  study  areas  to  maximize  high-  cost  support.  The  creation  of  a  new  study  area  has  the  effect  of  placing  a  new  burden  on  the  federal  universal  service  fund.  32 
 Accordingly,  the  Commission  clarified  that  a  study  area  waiver  request  must  be  filed  with  the  Commission  where  a  company  is  seeking  to  create  a  new  study  area  from  within  one  or  more  existing 
 study  areas.  33 
 9.  We  find  that  the  exchanges  now  served  by  Sandwich  Isles  were  within  the  GTE  study  area  (and  are  now  within  the  Verizon  Hawaii  study  area).  The  Hawaii  Commission  designated  GTE  as  an 


 eligible  telecommunications  carrier  (ETC)  for  the  State  of  Hawaii,  effective  Jan.  1,  1998.  34  Although  Hawaii  has  the  authority  to  designate  ETCs  within  the  state,  35  the  designation  of  Sandwich  Isles  as 
 eligible  for  support  for  serving  the  Hawaiian  Home  Lands  resulted  in  the  creation  of  a  high-  cost  area  that  was  previously  within  the  study  area  of  GTE  in  the  State  of  Hawaii.  The  creation  of  a  new  study  area 
 has  the  effect  of  placing  a  new  burden  on  the  federal  universal  service  fund.  By  requiring  Sandwich  Isles  to  seek  a  study  area  waiver,  the  Commission  will  have  the  opportunity  to  consider  whether  creating  a 


 (...  continued  from  previous  page)  Memorandum  Opinion  and  Order,  AAD  95-  175,  AAD  96-  29,  AAD-  96-  51,  11  FCC  Rcd  8156,  8160,  at  para.  9 
 (Com.  Car.  Bur.  1996)  (Study  Area  Waiver  Exceptions  Order).  30 
 Skyline,  FCC  04-  86,  at  para.  11.  31 
 See  MTS  and  WATS  Market  Structure;  Establishment  of  a  Joint  Board;  Amendment,  Decision  and  Order,  CC  Docket  Nos.  78-  72,  80-  286,  FCC  84-  637,  50  Fed.  Reg.  939  (1985)  (1985  Order  Adopting  Joint  Board 


 Recommendation);  MTS  and  WATS  Market  Structure,  Amendment  of  Part  67  of  the  Commissions  Rules  and  Establishment  of  a  Joint  Board,  Recommended  Decision  and  Order,  CC  Docket  Nos.  78-  72,  80-  286,  49  Fed.  Reg. 
 48325  (1984)  (1984  Joint  Board  Recommended  Decision).  See  also  47  C.  F.  R.    36  App.  32 
 Skyline,  FCC  04-  86,  at  para.  11.  33 
 Id.  at  para.  13.  Any  such  waiver  request  will  be  evaluated  under  the  criteria  set  forth  in  the  PTI/  Eagle  Order.  This  will  ensure  that  the  Commission  has  an  opportunity  to  determine  whether  the  creation  of  a  new  study  area  will 


 have  an  adverse  impact  on  the  federal  universal  service  fund,  consistent  with  section  254  of  the  Act.  The  Commission  also  clarified  that  a  study  area  waiver  request  is  not  required  when  a  company  is  combining  previously 
 unserved  territory  with  one  of  its  existing  study  areas  in  the  same  state,  or  when  a  holding  company  is  consolidating  existing  study  areas  in  the  same  state.  See  Study  Area  Waiver  Exceptions  Order,  11  FCC  Rcd  at  8160,  para.  9. 
 34  See  GTE  Dec.  9  ex  parte  at  3  &  n.  3.  As  an  ETC,  GTE  was  required  to  provide  supported  services  throughout  its 
 designated  service  areas  under  section  214(  e)(  1)  of  the  Act.  See  47  U.  S.  C.    214(  e)(  1).  As  an  incumbent  LEC,  the  designated  service  area  for  GTE  was  its  study  area.  See  id.;  see  also  supra  note  6. 


 35  See  47  U.  S.  C.    214(  e)(  2).  At  the  time  Sandwich  Isles  filed  its  Petition,  Sandwich  Isles  had  not  been  designated 
 as  an  ETC  by  the  Hawaii  Public  Utilities  Commission  (Hawaii  Commission).  Sandwich  Isles  claims  that  it  did  not  need  ETC  designation  by  the  Hawaii  Commission,  because  the  Department  of  Hawaiian  Home  Lands  (DHHL) 


 exercises  exclusive  and  independent  jurisdiction  over  these  trust  lands.  See  Letter  from  Sylvia  Lesse,  Counsel  for  Sandwich  Isles,  to  Magalie  Roman  Salas,  FCC,  dated  Nov.  12,  1998  (Sandwich  Isles  Nov.  12  ex  parte)  at  2.  The 
 Hawaii  Commission  disagreed.  See  Letter  from  Paul  Shigenaga,  Hawaii  Commission,  to  Magalie  Roman  Salas,  dated  Aug.  10,  1998.  Sandwich  Isles  subsequently  sought  designation  as  an  ETC  by  the  Hawaii  Commission,  which 
 was  granted  on  Dec.  9,  1998.  See  Sandwich  Isles  Nov.  12  ex  parte,  at  3  n.  4;  Letter  from  Sylvia  Lesse,  Counsel  for  Sandwich  Isles,  to  Magalie  Roman  Salas,  FCC,  dated  Dec.  22,  1998  (Sandwich  Isles  Dec.  22  ex  parte)  Exhibit  1 
 (Hawaii  Commission  Decision  and  Order  granting  Sandwich  Isles  ETC  status). 
5
 Federal  Communications  Commission  FCC  04-  256 
 6 
 high-  cost  study  area  in  Hawaii  would  have  an  adverse  effect  on  the  universal  service  fund  and  whether  or  not  it  would  serve  the  public  interest.  36 
 10.  Although  we  grant  Verizon  Hawaiis  Application  for  Review  and  reverse  the  Bureaus  decision  in  Sandwich  Isles,  we  do  not  necessarily  agree  with  Verizon  Hawaii  that  Sandwich  Isles  should 
 be  treated  as  a  competitive  ETC,  rather  than  as  an  incumbent  LEC,  for  purposes  of  receiving  universal  service  support  and  part  69  of  the  Commissions  rules.  37  Accordingly,  we  will  provide  Sandwich  Isles  the 
 opportunity  to  seek  a  study  area  waiver.  To  ensure  continued  service  to  Sandwich  Isles  customers,  we  will  continue  to  treat  Sandwich  Isles  as  an  incumbent  LEC  for  purposes  of  receiving  universal  service 
 support  until  the  Commission  rules  on  a  request  for  a  study  area  waiver,  provided  that  Sandwich  Isles  file  such  request  within  60  days  of  the  effective  date  of  this  Order. 


 IV.  ORDERING  CLAUSES 
 11.  Accordingly,  IT  IS  ORDERED,  pursuant  to  the  authority  contained  in  sections  1,  4(  i),  4(  j),  and  254  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151,  154(  i),  154(  j),  and  254, 


 and  section  1.115  of  the  Commissions  rules,  47  C.  F.  R.    1.115,  that  this  MEMORANDUM  OPINION  AND  ORDER  is  ADOPTED. 


 12.  IT  IS  FURTHER  ORDERED,  pursuant  to  the  authority  contained  in  sections  1,  4(  i),  4(  j),  and  254  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151,  154(  i),  154(  j),  and  254,  and 
 section  1.115  of  the  Commissions  rules,  47  C.  F.  R.    1.  115,  that  the  Application  for  Review  filed  by  GTE  Hawaiian  Telephone  Company  Incorporated  ON  March  5,  1998  is  GRANTED. 


 13.  IT  IS  FURTHER  ORDERED,  pursuant  to  the  authority  contained  in  sections  1,  4(  i),  4(  j),  and  254  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151,  154(  i),  154(  j),  and  254,  and 
 section  1.115  of  the  Commissions  rules,  47  C.  F.  R.    1.  115,  that  the  decision  of  the  Common  Carrier  Bureau,  Sandwich  Isles  Communications,  Inc.,  Petition  for  Waiver  of  Section  36.611  of  the  Commissions 
 Rules  and  Request  for  Clarification,  Order,  AAD  97-  82,  13  FCC  Rcd  2407  (Acct.  Aud.  Div.  1998)  is  REVERSED. 


 FEDERAL  COMMUNICATIONS  COMMISSION 


 Marlene  H.  Dortch  Secretary 


 36  According  to  USACs  most  recent  projections  Sandwich  Isles  receives  annually,  approximately  $5.4  million  in 
 high-  cost  loop  support,  $1.  5  million  in  local  switching  support,  and  $7  million  in  interstate  common  line  support.  Sandwich  Isles  serves  1,059  lines  and  its  total  high-  cost  support  of  almost  $13.9  million  amounts  to  more  than 


 $13,000  per  loop,  per  year.  See  USAC  Quarterly  Administrative  Filing  2004,  Third  Quarter  (3Q)  Appendices,  HC01,  HC05,  at  http://  www.  universalservice.  org/  overview/  filings. 
 37  See  Application  for  Review  at  12-  13;  Opposition  to  Petition  at  8  n.  4;  11-  12. 
6
 Federal  Communications  Commission  FCC  04-  256 
 7 
 STATEMENT  OF  COMMISSIONER  MICHAEL  J.  COPPS, 
 CONCURRING 
 Re:  GTE  Hawaiian  Telephone  Company,  Inc.  Application  for  Review  of  a  Decision  by  the  Common  Carrier  Bureau,  Sandwich  Isles  Communications,  Inc.  Petition  for 
 Waiver  of  Section  36.611  of  the  Commissions  Rules  and  Request  for  Clarification  (AAD  97-  82) 


 In  1998,  the  Common  Carrier  Bureau  concluded  that  for  regulatory  purposes  it  would  treat  Sandwich  Isles  Communications  service  territory  as  a  study  area.  Shortly  after  the  Bureau  released  its 
 decision,  GTE  Hawaiian  Telephone  Company  filed  an  application  for  review  by  the  full  Commission,  contending  that  the  service  area  at  issue  was  within  its  serving  territory.  Incomprehensibly,  this  dispute 
 has  sat  in  front  of  the  Commission  for  six  years.  I  support  todays  decision.  But  I  limit  my  support  to  concurring  because  fairness  requires  that  we  resolve  issues  involving  support  for  unserved  areas  and 
 disputed  territory  with  greater  speed  than  we  attempt  to  do  here.  I  can  only  hope  that  a  fuller  record  in  a  subsequent  study  area  waiver  proceeding  will  bring  an  equitable  solution  for  all. 
7