Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6229

(4) That the Paperwork Reduction Act 

does not apply because the amendments 

do not impose any additional reporting 

or record-keeping requirements; 

(5) That the Small Business 

Regulatory Enforcement Fairness Act of 

1996 does not apply because it is not a 

major rule as defined by section 251 of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996, and 

would not result in an annual effect on 

the economy of $100 million or more; 

result in an increase in cost or prices; or 

have significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

companies to compete with foreignbased companies in domestic and 

export markets; and 

(6) That Executive Order 13132, 

‘‘Federalism’’ does not apply because it 

would not have substantial direct effects 

on the States or the relationship 

between the national government and 

the States.

List of Subjects in 45 CFR Part 2553 

Aged, Grant programs—social 

programs, Volunteers.

For the reasons set forth in the 

preamble, the Corporation for National 

and Community Service proposes to 

amend 45 CFR part 2553 as follows:

PART 2553—THE RETIRED AND 

SENIOR VOLUNTEER PROGRAM 

1. The authority citation for part 2553 

continues to read as follows:

Authority: 42 U.S.C. 4950 et seq.

2. In § 2553.43, add a new paragraph 

(e) to read as follows:

* * * * *

(e) Other Volunteer Expenses. RSVP 

volunteers may be reimbursed for 

expenses incurred while performing 

their volunteer assignments provided 

these expenses are described in the 

Memorandum of Understanding 

negotiated with the volunteer station to 

which the volunteer is assigned.

§ 2553.73 [Amended] 

3. In § 2553.73, remove paragraph (d) 

and redesignate paragraphs (e) through 

(i) as paragraphs (d) through (h).

Dated: February 3, 2004. 

Tess Scannell, 

Director, National Senior Service Corps.

[FR Doc. 04–2803 Filed 2–9–04; 8:45 am] 

BILLING CODE 6050–$$–P

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 54

[CC Docket No. 02–6; FCC 03–323] 

Schools and Libraries Universal 

Service Support Mechanism

AGENCY: Federal Communications 

Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: In this document, the 

Commission addresses several matters 

related to the administration of the 

schools and libraries universal service 

mechanism (also known as the e-rate 

program). The Commission seeks 

comment on several issues, including 

whether we should change the discount 

matrix used to determine the level of 

discounts for which applicants are 

eligible, the current competitive bidding 

process, the definition of ‘‘rural area’’

used in the program, the definition of 

Internet access, current rules relating to 

wide area networks, and current 

procedures for recovery of funds. The 

Commission also seeks comment on 

measures to limit waste, fraud, and 

abuse and improve the Commission’s 

ability to enforce the rules governing the 

program.

DATES: Comments are due on or before 

March 11, 2004. Reply comments are 

due on or before April 12, 2004. Written 

comments on the proposed information 

collection(s) must be submitted by the 

public, Office of Management and 

Budget OMB), and other interested 

parties on or before April 12, 2004.

ADDRESSES: All filings must be sent to 

the Commission’s Secretary, Marlene H. 

Dortch, Office of the Secretary, Federal 

Communications Commission, 445 12th 

Street, SW., Washington, DC 20554. In 

addition to filing comments with the 

Secretary, a copy of any Paperwork 

Reduction Act (PRA) comments on the 

information collection(s) contained 

herein should be submitted to Judith B. 

Herman, Federal Communications 

Commission, Room 1–C804, 445 12th 

Street, SW., Washington, DC 20554, or 

via the Internet to JudithB.Herman@fcc.gov, and to Kim A. 

Johnson, OMB Desk Officer, Room 

10236 NEOB, 725 17th Street, NW., 

Washington, DC 20503, or via the 

Internet to 

Kim_A._Johnson@omb.eop.gov or by fax 

to 202–395–5167. Parties should also 

send three paper copies of their filings 

to Sheryl Todd, Telecommunications 

Access Policy Division, Wireline 

Competition Bureau, Federal 

Communications Commission, 445 

Twelfth Street, SW., Room 5–B540, 

Washington, DC 20554. See

Supplemental Information for further 

filing instructions.

FOR FURTHER INFORMATION CONTACT:

Kathy Tofigh, Attorney, at (202) 418–

1553, Karen Franklin, Attorney, at (202) 

418–7706, or Jennifer Schneider, 

Attorney, at (202) 418–0425 in the 

Telecommunications Access Policy 

Division, Wireline Competition Bureau. 

For additional information concerning 

the information collection(s) contained 

in this document, contact Judith B. 

Herman at 202–418–0214, or via the 

Internet at Judith-B.Heman@fc.gov.

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Second 

Further Notice of Proposed Rulemaking 

(Second FNPRM) in CC Docket No. 02–

6; FCC 03–323, released on December 

23, 2003. A companion Order was also 

released in CC Docket No. 02–6; FCC 

03–323, on December 23, 2003. The full 

text of this document is available for 

public inspection during regular 

business hours in the FCC Reference 

Center, Room CY–A257, 445 Twelfth 

Street, SW., Washington, DC 20554. 

I. Introduction 

1. In this Second Further Notice of 

Proposed Rulemaking, we address 

several matters related to the 

administration of the schools and 

libraries universal service mechanism 

(also known as the e-rate program). In 

the Second FNPRM, we seek comment 

on several issues, including whether we 

should change (1) the discount matrix 

used to determine the level of discounts 

for which applicants are eligible, (2) the 

current competitive bidding process, (3) 

the definition of ‘‘rural area’’ used in the 

program, (4) the definition of Internet 

access, (5) current rules relating to wide 

area networks, and (6) current 

procedures for recovery of funds. We 

also seek comment on measures to limit 

waste, fraud, and abuse and improve the 

Commission’s ability to enforce the 

rules governing the program. Finally, we 

seek additional comment on how to 

ensure the goals of section 254 continue 

to be met. 

II. Second Further Notice of Proposed 

Rulemaking 

A. Discount Matrix 

2. Under the Commission’s rules, 

eligible schools and libraries may 

receive discounts ranging from 20 

percent to 90 percent of the prediscount price of eligible services, based 

on indicators of need. We seek comment 

on the effectiveness and efficiency of 

the discount matrix used to determine 

support payments for eligible 

6230 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

applicants. In particular, we seek 

comment on changing the matrix to 

adjust the levels of discounts received 

by schools and libraries for supported 

services. We also particularly seek 

comment from the State members of the 

Federal-State Joint Board on Universal 

Service, and commit to ongoing 

informal consultations on these issues.

3. Interested parties have indicated 

that an altered discount matrix may 

better serve the schools and libraries 

program. In response to the Schools and 

Libraries NPRM, 67 FR 7327, February 

19, 2002, several commenters asserted 

that reducing the discount rate would 

make applicants more accountable for 

their funding requests and dissuade 

vendors from improperly offering to 

forgive or refund the 10 percent 

contribution required of applicants in 

the highest discount band. In addition, 

commenters stated that altering the 

discount rate would be an effective way 

to increase the availability of funds for 

eligible applicants outside the highest 

discount band. While the Universal 

Service Order, 62 FR 32862, June 17, 

1997, prioritized support for entities 

with the greatest level of economic 

disadvantage, some interested parties 

have suggested that greater emphasis 

should be given to the equitable 

distribution of E-rate funds to eligible 

applicants from all discount bands, to 

ensure that they have comparable access 

to advanced telecommunications and 

information services. Participants in the 

Commission’s Public Forum on the Erate program in May 2003 also suggested 

that the Commission amend its discount 

matrix, and USAC’s Task Force on 

Waste, Fraud, and Abuse has 

recommended that the discount level for 

internal connections be lowered from 90 

percent to 80 percent. 

4. For these reasons, we seek 

comment on whether the Commission 

should amend the discount matrix to 

reduce the discounts available in some 

or all of the discount bands, including 

the current 90 percent discount band. 

We propose that such a change, if 

adopted, become effective in Funding 

Year 2005. We seek comment on 

whether the current discount matrix 

provides sufficient incentives for 

schools and libraries to limit funding 

requests to services that can be 

efficiently used and for vendors to 

competitively price their services. We 

also seek comment on whether it would 

be appropriate to adjust the discount 

matrix in order to expand the reach of 

funding to lower discount bands. We 

note that the rules we adopt in the 

companion Order, limiting the 

availability of support for internal 

connections to twice every five years, is 

intended to make support available to 

more applicants on a regular basis. How 

does this action affect the need to adjust 

the discount matrix? We further seek 

comment on which discount rates in the 

matrix, if any, other than the highest 

discount rate band, should be reduced. 

Additionally, we seek comment on 

whether developing a separate discount 

matrix for Priority Two funding would 

effectively address issues of waste, 

fraud, and abuse and expand the reach 

of funds to a larger number of schools 

and libraries. Many parties have 

suggested that, at a minimum, the 

maximum discount level for internal 

connections be lowered to 70 percent. 

What would be the effect of such a 

change? While we seek comment 

generally on revisions to the discount 

matrix, we note that we are not seeking 

comment on whether to combine the 

existing Priority One and Priority Two 

funding categories. 

5. We ask that commenters address 

implementation issues surrounding a 

change in the discount matrix. 

Currently, in the event that there are not 

sufficient funds remaining under the 

annual cap to support all requests for 

discounts at a particular discount level, 

funds are allocated on a pro rata basis 

among applicants at that discount level. 

Should funds continue to be allocated 

among all applicants at the discount 

level on a pro rata basis, or is there some 

other means of allocating the remaining 

funds? We seek comment on how 

changes to the discount matrix should 

be implemented across all levels of 

need. Should certain existing discount 

levels be combined? For example, 

should the 90 and 80 percent discount 

levels be combined? In the alternative, 

should each discount level be reduced 

by a fixed amount? For example, should 

each discount level be reduced by 10 

percent? Is there some other method of 

re-setting other discount levels below 

the highest discount level? Finally, we 

seek comment on how the transition to 

a new discount matrix, if adopted, 

should be implemented in order to 

minimize burdens on applicants and 

disruptions to the program. 

B. Competitive Bidding Process 

6. We seek comment on the current 

process of applying for discounted 

services. Pursuant to competitive 

bidding requirements, eligible schools 

and libraries that wish to receive 

support for discounted services must 

submit FCC Form 470 to the 

Administrator. The FCC Form 470 

describes the applicant’s 

telecommunication needs and notifies 

service providers of the applicant’s 

intent to contract for eligible services. 

After the FCC Form 470 has been posted 

to the Administrator’s website for 28 

days, the applicant may contract for the 

provision of services and file an FCC 

Form 471, requesting discounts for the 

services. We seek comment on whether 

this process typically results in 

competitive bids, and ask commenters 

to elaborate on the characteristics of 

recipients that do not ordinarily receive 

multiple bids. We seek comment on 

whether this process continues to suit 

the needs of the schools and libraries 

program, or if a different application 

process would better suit the program’s 

needs. We specifically request that 

commenters discuss how the current 

process and any proposed processes 

address the Commission’s goal of 

minimizing waste, fraud, and abuse in 

the program, while encouraging the 

benefits of competition as set out in the 

Universal Service Order. 

7. A number of parties have suggested 

that the current Form 470 posting 

process should be modified for certain 

types of services. For instance, one 

participant in the Commission’s public 

forum on the ways to improve the 

administration of the schools and 

libraries mechanism suggested that the 

Form 470 process be eliminated for 

requests for funding local telephone 

service. Others suggest that the FCC 

simplify the application process for 

applications that only seek funding for 

local and long distance service 

(including cell phone service), or that 

seek to continue an existing 

telecommunications service or Internet 

access service. We seek comment on 

whether it would serve our goals to 

simplify or eliminate the current FCC 

Form 470 posting process in such 

situations. What other mechanisms 

would ensure that our objective of 

ensuring that applicants are aware of 

potential service providers and select 

reasonably priced services is met? What 

would be the costs and benefits of such 

a change? 

8. We also seek comment on how we 

can ensure that applicants select cost 

effective services in situations in which 

no entity, or only one entity, responds 

to a Form 470 posting. In some 

situations, there may be only one 

service provider capable of, or willing 

to, provide the requested service. How 

can we ensure that the prices for such 

services are reasonable, and do not 

waste scarce universal service funds? 

Should we adopt bright line rules that 

would impose limits on the amount of 

discounts that could be available in 

such situations?

9. We further seek comment on 

whether the Commission, as a condition 

of support, should require that each 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6231

service provider certify that the prices 

in its bid have been independently 

developed. Such a certification could be 

modeled after the certificate of 

independent price determination 

required under federal acquisition 

regulations. A fair and open competitive 

bidding process is critical to preventing 

waste, fraud, and abuse of program 

resources. Adopting a certification 

requirement would ensure that service 

providers are fully aware that they may 

not communicate with other service 

providers in a way that subverts the 

competitive bidding process. Moreover, 

service providers that violate a noncollusion certification will, in many 

instances, also violate federal antitrust 

laws. Requiring certifications of 

independent pricing would better 

enable the Commission or other 

government agencies to enforce the 

Commission’s rules and to seek criminal 

sanctions where appropriate. We also 

seek comment on whether the 

Commission’s rules should specifically 

require that records related to the 

competitive bidding process for services 

must be maintained by both the 

recipient and the service provider for a 

period of five years. 

C. Definition of Rural Area 

10. We seek comment on 

modifications to the definition of ‘‘rural 

area’’ for the schools and libraries 

mechanism. Currently, an area qualifies 

as rural under our rules for the schools 

and libraries support mechanism if it is 

located in a non-metropolitan county as 

defined by the Office of Management 

and Budget or is specifically identified 

in the Goldsmith Modification to 1990 

Census data published by the Office of 

Rural Health Care Policy (ORHP). We 

understand, however, that OHRP no 

longer utilizes the definition adopted by 

the Commission in 1997, and that there 

will be no Goldsmith Modification to 

the most recent 2000 Census data. 

11. We seek comment on whether we 

should adopt a new definition of rural 

area for the schools and libraries 

program, and, if so, what that new 

definition should be. We seek comment 

on whether there are definitions for 

rural areas used by other government 

agencies that would be appropriate for 

the schools and libraries program. In 

addition to describing any proposed 

new definitions, we ask commenters to 

address the specific proposals that have 

already been raised in the rural health 

care proceeding. In particular, several 

commenters in the rural health care 

proceeding suggest that the Commission 

adopt the rural designation system 

currently utilized by ORHP, the Rural 

Urban Commuting Area (RUCA) system. 

Others propose to define rural as nonurbanized areas, as specified by the 

Census Bureau. We also recently sought 

comment on the definition of ‘‘rural 

area’’ in the context of increasing 

flexibility and the deployment of 

spectrum-based services in rural areas. 

There we identified and sought 

comment on the following potential 

definitions of ‘‘rural area,’’ in addition 

to the ones already identified above: (1) 

Counties with a population density of 

100 persons or fewer per square mile; 

(2) Rural Service Areas; (3) non-nodal 

counties within an Economic Area; (4) 

the definition of ‘‘rural’’ used by the 

Rural Utility Service for its broadband 

program; (5) the definition of ‘‘rural’’

based on census tracts as outlined by 

the Economic Research Service of the 

USDA; and (6) any census tract that is 

not within ten miles of any incorporated 

or census-designated place containing 

more than 2,500 people, and is not 

within a county or county equivalent 

which has an overall population density 

of more than 500 persons per square 

mile of land. Finally, some commenters 

in that proceeding assert that if the 

Commission adopts a new definition of 

rural, it should grandfather existing 

areas that currently qualify as rural area, 

if they would no longer qualify under 

the new definition. 

12. Commenters are encouraged to 

describe the effects of any new 

definition on the reach of the schools 

and libraries program, e.g., how many 

existing rural areas would become nonrural and vice versa, and whether and 

how the Commission should consider 

any such changes in adopting a new 

definition for ‘‘rural area.’’ We also seek 

comment on whether it is necessary or 

desirable to use the same definition of 

‘‘rural’’ for both the schools and 

libraries program and rural health care 

program. 

D. Definition of Internet Access 

13. In the Schools and Libraries 

NPRM, the Commission sought 

comment on whether modifying our 

rules governing the funding of Internet 

content would improve program 

operation consistent with our other 

goals of ensuring a fair and equitable 

distribution of benefits and preventing 

waste, fraud, and abuse. In particular, 

the Commission sought comment on 

whether to permit funding for an 

Internet access package that includes 

content if that package is the most cost 

effective form of Internet access. 

Comments we received in response to 

the Schools and Libraries NPRM

indicated that parties had widely 

varying views of what should be viewed 

as ‘‘content,’’ although many parties 

expressed concern about providing 

funding for Internet access bundled 

with subject matter content. The record 

developed on this issue, in conjunction 

with recent changes made in the rural 

health care program, leads us to seek 

more focused comment on whether we 

should alter the definition of Internet 

access used for the schools and libraries 

program. Support for Internet access 

under the schools and libraries program 

is provided only for ‘‘basic conduit 

access to the Internet.’’ Support in the 

Internet access category has not been 

provided for virtual private networks, 

nor has it been provided for Internet 

access services that enable 

communications through private 

networks. In our recent Rural Health 

Care Order, we concluded that the 

definition currently used in the schools 

and libraries context was too limited for 

the rural health care program, because it 

precludes support for features that 

provide the capability to generate or 

alter the content of information. We 

concluded that adopting such a 

limitation in the rural health care 

context would significantly undercut 

the utility of providing support for 

Internet access to rural health care 

providers, because the ability to alter 

and interact with information over the 

Internet is a functionality that could 

facilitate improved medical care in rural 

areas.

14. We now seek comment on 

whether we should amend our 

definition of Internet access in the 

schools context to conform to the 

definition recently adopted for the rural 

health care mechanism. The 

Administrator has utilized cost 

allocation to ensure that support is not 

provided for features deemed ineligible 

under the Commission’s definition of 

Internet access in the schools context, 

and also has provided discounts on 

services that provide ineligible features 

when that ineligible portion is provided 

on an ancillary basis. While we 

conclude that this has been a reasonable 

way to implement our rules in an 

administratively workable fashion, we 

are concerned that the definition 

adopted in 1997 may unintentionally 

preclude support for features of Internet 

access that would provide substantial 

benefits to school children and library 

patrons in the United States. We are 

concerned that the rule adopted six 

years ago may not adequately address 

the full ranges of features and 

functionalities in Internet access 

services that are available in the 

marketplace today. Moreover, we seek 

comment on whether amending the 

current definition of Internet access 

6232 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

would simplify and streamline program 

administration. We also seek comment 

on how broadening the definition of 

Internet access (a Priority One service) 

will impact the availability of funds for 

Priority Two services. To the extent 

commenters argue that the definition of 

Internet access should differ for the 

schools and libraries program, and the 

rural health care program, they should 

provide specific arguments outlining the 

legal, policy, or technical reasons for 

that position. 

E. Wide Area Networks 

15. In the Schools and Libraries 

NPRM, the Commission sought 

comment on whether to modify its 

policies regarding the funding of 

Priority One services 

(telecommunications service and 

Internet access) that include service 

provider charges for capital investments 

for wide area networks. The record we 

received demonstrated a wide range of 

views on what changes, if any, should 

be made in this area. 

16. In light of our decision to impose 

limitations on funding of internal 

connections, we recognize that there 

may be even greater incentives than 

before for service providers to 

characterize charges for facilities that 

also could be viewed as internal 

connections as Priority One services. 

We believe it desirable, therefore, to 

seek more focused comment on specific 

proposals in this area to ensure that 

funds are distributed in a fair and 

equitable fashion. If we adopt rules in 

this area, we anticipate that those rules 

would be effective no earlier than 

Funding Year 2005. We seek comment 

on the advantages and disadvantages of 

the proposals set forth. 

17. We seek comment on whether to 

refine a standard for determining 

whether expenditures that subsidize 

infrastructure investment, either onpremises or off-premises, may properly 

be viewed as Priority One services. In 

particular, we seek comment on 

whether we should adopt a rule that 

would limit recipients from receiving 

discounts for service provider upfront 

capital investments to the extent those 

capital investments exceed 25 percent of 

the funding request for the service in 

question. Such a rule could serve to 

spread funding for Priority One services 

more evenly across all recipients, and 

could limit the extent to which the 

universal service fund is used to finance 

significant service provider 

infrastructure investment. 

18. In the Brooklyn Order, the 

Commission determined that recipients 

may receive discounts on non-recurring 

charges associated with capital 

investment made by a service provider 

in an amount equal to the investment 

prorated equally over a term of at least 

three years. We now seek focused 

comment on whether we should adopt 

a rule that discounts for any service 

provider charges for capital investment 

of $500,000 or more must be prorated 

over a period of at least five years. Like 

the other proposal, such a rule could 

serve to spread funding for Priority One 

services more evenly across all 

recipients, and could limit the extent to 

which the universal service fund is used 

to finance significant service provider 

infrastructure investment. 

19. We also take this opportunity to 

address other issues related to the 

provision of service over wide area 

networks. Under our current rules, 

schools and libraries may receive 

support to obtain telecommunications 

services using lit fiber. Schools and 

libraries may also receive discounts 

when they obtain Internet access that 

uses lit fiber. In order to receive support 

for services using lit fiber as a Priority 

One service, the school or library must 

purchase a functioning service from 

either a telecommunications service 

provider or internet access provider, 

which in turn is responsible for 

ensuring that both the fiber and the 

equipment to light the fiber are 

provided. If a school or library enters a 

contract to lease unlit fiber, and obtain 

telecommunications service or Internet 

access using lit fiber, it must segregate 

the cost of the unsupported unlit fiber 

from the cost of the supported lit fiber 

service in its application for support. 

20. We seek comment on the 

provision of funding for unlit (dark) 

fiber under the schools and libraries 

support mechanism. We note that the 

Commission has addressed dark fiber in 

several different contexts. We seek 

comment on whether we should permit 

funding for dark fiber, pursuant to 

section 254(h), to provide additional 

flexibility to applicants in meeting their 

communications needs. We also seek 

comment on whether any limitations 

should be adopted to preclude 

discounts on the full cost of dark fiber 

network buildout when the applicant 

will not be utilizing the full capacity of 

that network. 

F. Recovery of Funds 

21. In 1999, the Commission adopted 

the Commitment Adjustment Order,

which directed the Administrator to 

recover funding erroneously committed 

to schools and libraries in violation of 

the Telecommunications Act of 1996. 

The Commission adopted a companion 

order on the same day granting a limited 

waiver of four Commission rules to first 

year applicants who had received 

commitments and disbursements in 

violation of Commission rules. Shortly 

thereafter, pursuant to the Commitment 

Adjustment Order, USAC submitted to 

the Commission its plan to collect 

universal service funds that were 

erroneously disbursed in the first year of 

the program in violation of the statute. 

Subsequently, in 2000, the Commission 

adopted with minor modifications 

USAC’s plan to implement the 

requirements of the Commitment 

Adjustment Order. In that Order, the 

Commission also emphasized that the 

recovery plan ‘‘is not intended to cover 

the rare cases in which the Commission 

has determined that a school or library 

has engaged in waste, fraud or abuse.’’

The Commission stated that it would 

address such situations on a case-bycase basis. 

22. At the time the Commission 

adopted the Commitment Adjustment 

Order, USAC had been distributing 

funds through the schools and libraries 

universal service support mechanism 

for approximately one year. The 

Commission and USAC then faced a 

limited range of situations in which 

errors had occurred requiring the 

recovery of funds. Since then, through 

the audit process, the Commission and 

USAC have become aware of additional 

scenarios that may require recovery of 

funds due to errors made by applicants 

and/or service providers. While the 

Commitment Adjustment 

Implementation Order implemented 

procedures, consistent with the 

Commission’s debt collection rules, for 

recovery of funds that were disbursed in 

violation of statutory requirements, the 

Commission has not comprehensively 

addressed the question of what recovery 

procedures would be appropriate in 

situations where it is determined that 

funds have been disbursed in violation 

of particular programmatic rules that do 

not implicate statutory requirements. 

Likewise, the Commission has not 

addressed the question of what 

procedures are needed to govern the 

recovery of funds that have been 

committed or disbursed in situations 

later determined to involve waste, fraud 

or abuse.

23. In administering the schools and 

libraries program, we have become 

aware of instances in which funds were 

disbursed erroneously, and, depending 

upon the circumstances surrounding the 

particular error as well as the procedure 

or rule implicated, we determined 

whether recovery was appropriate. In 

light of these experiences, we now 

consider whether we should implement 

procedures or adopt rules governing 

fund recovery across particular 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6233

situations and, more generally, whether 

additional safeguards or procedures are 

needed to address the matter of 

erroneously disbursed funds. 

24. In particular, we ask whether we 

should adopt specific recovery rules for 

funds that are disbursed in violation of 

statutory requirements. We also seek 

comment on whether the Commission 

should implement procedures or adopt 

rules for funds that are disbursed in 

violation of one or more programmatic 

rules or procedures under the schools 

and libraries program or in situations 

involving waste, fraud or abuse. If so, 

we ask whether we should adopt for all 

instances of improperly disbursed 

funds, procedures comparable to those 

adopted in the Commitment Adjustment 

Implementation Order, or whether we 

should modify any of those procedures. 

We note that, through petitions for 

reconsideration of the Commitment 

Adjustment Order and in comments 

filed in support of those petitions, 

particular service providers have argued 

that the Commission should recover 

erroneously disbursed funds from the 

party that received the benefit of the 

disbursement, specifically the school or 

library. Although the Commission 

continues to believe that there are valid 

reasons for seeking recovery only from 

service providers, we ask whether there 

are any circumstances under which 

recovery would be more appropriately 

sought from a school or library 

applicant. At this time we do not 

resolve the specific issues raised in the 

pending petitions for reconsideration. 

Instead, we seek to further develop the 

record in this area in light of particular 

issues that have come to our attention 

and as to which we seek comment in 

this notice. 

25. We note that in some 

circumstances, there may be a series of 

rule violations that neither collectively 

nor individually implicate the full 

amount of the funding commitment. In 

the event that the full amount of the 

funding commitment has been 

disbursed under such circumstances, we 

seek comment on what circumstances 

would make recovery of the full amount 

of the funding commitment appropriate 

or inappropriate. We seek comment 

specifically on whether a pattern of 

systematic noncompliance with 

Commission rules warrants recovery of 

the full amount disbursed, irrespective 

of the dollars associated with specific 

audit findings. We note that, unlike 

errors resulting in statutory violations, 

the Commission may waive noncompliance with regulations in 

appropriate circumstances. We 

recognize that some errors made by 

applicants and/or service providers may 

not violate the statute, may be minor in 

nature and may not affect the integrity 

of or otherwise undermine policies 

central to administration of the program. 

We invite comment on whether there 

are situations in which such errors 

would warrant a Commission decision 

not requiring the recovery of funds. For 

example, should we waive recovery if 

the dollars at issue are de minimis, 

either on absolute dollar or percentage 

of disbursement basis, and if so, what 

dollar level or percentage would be an 

appropriate threshold for deeming a 

violation to be de minimis? Parties 

advocating such a position should 

describe what mechanism the 

Commission should use to reach such a 

result, such as waiving the rules that are 

not statutory, are minor and do not 

affect program integrity, focusing 

particularly on how such a result could 

be achieved with administrative ease. 

26. In addressing the issues, we also 

invite commenters to explain whether 

any additional policies or rules directed 

at circumstances involving waste, fraud 

and abuse would be necessary, or 

whether procedures we may adopt in 

response to our questions will be 

sufficient in correcting waste, fraud and 

abuse. In doing so, parties should 

consider whether certain violations are 

more critical in our attempts to control 

waste, fraud and abuse than others. Are 

the circumstances where waste, fraud 

and abuse are found the type that 

should result in recovery of funds from 

the entity that is responsible for the 

waste, fraud and abuse? How should we 

proceed if both the applicant and the 

service provider are culpable for such 

misconduct? We seek proposals that 

include detailed procedures for dealing 

with waste, fraud and abuse cases. 

27. We also seek comment on whether 

we should implement other measures to 

ensure service provider and applicant 

accountability. In particular, we seek 

comment on whether we should 

implement procedures or adopt rules to 

defer action on any additional funding 

request involving a beneficiary for 

whom there is an outstanding 

commitment adjustment proceeding. 

Under such a policy, no discounts 

would flow to the beneficiary in 

subsequent years until there was full 

satisfaction of the outstanding 

commitment adjustment. We also seek 

comment on whether any applicant that 

has previously been subject to a 

commitment adjustment proceeding 

should be subjected to more rigorous 

scrutiny before receiving commitments 

in the future. If we were to implement 

such a policy, what additional showing 

should be required of the applicant in 

subsequent years, and how long should 

the entity be subjected to such enhanced 

scrutiny? 

28. Commenters should provide 

discrete proposals with examples or 

data to support their suggestions. 

G. Other Actions To Reduce Waste, 

Fraud, and Abuse 

29. We seek comment on a number of 

proposals intended to improve the 

abilities of the Commission and the 

Administrator to identify and enforce 

violations of the Commission’s rules 

and, thereby, to reduce waste, fraud, 

and abuse in the schools and libraries 

universal service mechanism.

30. Cost-Effective Funding Requests.

We seek comment on whether we 

should codify additional rules to ensure 

that applicants make informed and 

reasonable decisions in deciding for 

which services they will seek discounts. 

Currently, our rules specify that, in 

selecting a service provider, a recipient 

must carefully consider all bids 

submitted and must select the most 

cost-effective service offering. Moreover, 

the Universal Service Order makes clear 

that applicants must request services 

based on an assessment of their 

reasonable needs. Our rules do not 

expressly require, however, that the 

applicant consider whether a particular 

package of services are the most cost 

effective means of meeting its 

technology needs. Nor do our rules 

expressly establish a bright line test for 

what is a ‘‘cost effective’’ service. Would 

it be beneficial and administratively 

feasible to develop such a test, or, for 

example, a benchmark or formula for 

‘‘cost-effective’’ funding requests, such 

as a specified dollar amount per student 

or per library patron for specified types 

of service? Should we adopt a ceiling on 

the total amount of annual funding that 

an applicant can request? If so, how 

would such a ceiling is calculated? Are 

there other rule changes that would 

ensure applicants are not requesting 

discounts for services beyond their 

reasonable needs? 

31. Recordkeeping Requirements. We 

seek comment on whether to amend our 

rules governing the maintenance of 

records related to the receipt of 

universal service discounts. Currently, 

the Commission rules require each 

entity receiving supported services to 

keep records related to the receipt of 

discounted services similar to those that 

the entity maintains for other purchases, 

but do not specify how long such 

records should be maintained. Nor do 

our rules expressly require all entities to 

maintain records to demonstrate 

compliance with all rules. Recent 

beneficiary audits conducted by USAC’s 

independent auditor identify a number 

6234 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

of instances in which the independent 

auditor was unable to perform certain 

procedures due to lack of 

documentation. We seek comment on 

whether to amend our rules to require 

that all records related to the receipt of 

or delivery of discounted services, 

sufficient to demonstrate compliance 

with the Commission’s rules governing 

the schools and libraries mechanism, be 

maintained by the beneficiary for a 

period of five years after the last day of 

the delivery of the discounted services. 

We also seek comment on what types of 

documents would be sufficient to 

demonstrate compliance. 

32. In addition, the Commission’s 

rules require service providers to keep 

and retain records of rates charged to 

and discounts allowed for entities 

receiving supported services. We seek 

comment on requiring that service 

providers retain all records related to 

the delivery of discounted services for a 

period of five years after the completion 

of the discounted services. Further, we 

seek comment on a requirement that 

service providers comply with random 

audits or reviews that the Commission 

or USAC may undertake periodically to 

assure program compliance, including 

identifying the portions of applicant’s 

bills that represent the costs of services 

provided to eligible entities for eligible 

purposes. In accordance with this 

proposed requirement, we also seek 

comment on requiring beneficiaries to 

authorize the release of such 

information. 

33. Commenters are specifically 

requested to address the impact that 

these rule changes would have on the 

Commission’s ability to enforce its 

substantive rules and reduce waste, 

fraud, and abuse in the schools and 

libraries universal service program. 

Commenters are also requested to 

identify with particularity any 

additional recordkeeping requirements 

that would improve the Commission’s 

ability to enforce its rules in the schools 

and libraries program. 

34. Consultants and Outside Experts.

We seek comment on whether 

applicants should be required to 

identify any consultants or other outside 

experts, whether paid or unpaid, that 

aid in the preparation of the applicant’s 

technology plan or in the applicant’s 

procurement process. Additionally, we 

seek comment on whether consultants 

and other outside experts offering their 

services to applicants should be 

required to register with USAC and to 

disclose any potential conflicts of 

interests derived from relationships 

with service providers. Identifying these 

consultants and outside experts could 

facilitate the ability of the Commission, 

and law enforcement officials, to 

identify and prosecute individuals that 

may seek to manipulate the competitive 

bidding process or engage in other 

illegal acts. We also seek comment on 

whether we should adopt a rule that 

would prohibit an entity that seeks to 

become a service provider from 

providing any form of technology 

planning or procurement management 

assistance to applicants. Under such a 

rule, any entity that provides 

management support services, technical 

assistance, consulting services, 

assistance in technical evaluations, or 

systems engineering services to a 

particular recipient would be barred 

from competing for the contracts for 

eligible services with that recipient. 

35. Distribution of Support Payments.

We seek comment on whether the 

Commission should amend its rules to 

codify certain existing administrative 

procedures related to the payment of 

support for discounted services. There 

are two methods by which support for 

discounts is distributed. One method is 

for the service provider to submit an 

invoice to the Administrator, seeking 

payment for the discounted portion of 

the supported service using FCC Form 

474. The other method is for the 

recipient of the discounted services to 

pay the service provider and then seek 

reimbursement from the Administrator 

using FCC Form 473. Under either 

method, the Administrator requires that 

a completed Service Provider Annual 

Certification (or FCC Form 473) must be 

filed in order for payment to be made. 

We seek comment on whether this 

procedure should be codified in the 

Commission’s rules. We also seek 

comment on whether the Commission 

should codify rules regarding the 

establishment of deadlines for service 

providers to file invoices with the 

Administrator. The timely receipt and 

payment of invoices is extremely 

important to the administration of the 

program in accordance with the 

Commission’s rules. Accordingly, we 

seek comment on whether to codify the 

Administrator’s existing policy not to 

provide support for untimely filed 

invoices. 

36. USAC provides an extension of 

the deadline to file invoices under 

certain conditions. Under current USAC 

procedures, these circumstances 

include: authorized service provider 

changes; authorized service 

substitutions; no timely notice to USAC 

(e.g., the service providers’ Form 486 

Notification Letter is returned to USAC 

as undeliverable); USAC errors that 

result in a late invoice; USAC delays in 

data entering a form that ultimately 

result in a late invoice; documentation 

requirements that necessitate third party 

contact or certification; natural or manmade disasters that prevent timely filing 

of invoices; good Samaritan BEARs; and 

circumstances beyond the service 

providers control. We seek comment on 

whether to codify the described 

procedures providing for an extension 

of the deadline to file invoices. 

37. Technology Plans. We seek 

comment on whether the Commission 

should revise its rules regarding 

technology plans. To ensure applicants 

make a bona fide request for services, 

the Commission requires applicants to 

undertake a technology assessment 

before making a request for services. 

Section 54.504(b)(2)(vii) states that in its 

FCC Form 470 the applicant must 

certify that it has a technology plan that 

has been certified by its state, the 

Administrator, or an independent entity 

approved by the Commission. The 

instructions for FCC Form 470 permit 

applicants to certify that their 

technology plan will be approved by the 

relevant body no later than the time 

when service commences. The 

Commission adopted specific 

requirements for information that must 

be included in the FCC Form 470, but 

did not adopt specific rules addressing 

what should be included in a 

technology plan. In the Universal 

Service Order, however, the 

Commission set forth what applicants 

should address in their technology 

plans, which USAC implemented in its 

guidelines for technology plans. We 

seek comment on whether we should 

codify USAC’s current guidelines 

regarding technology plans. Should we 

require that, as part of the technology 

plan process, applicants analyze the 

cost of leasing versus purchasing E-rate 

eligible products and services? Should 

we require the applicant to consider the 

most cost-effective way to meet its 

educational objectives? In addition, we 

seek comment on whether the 

Commission’s technology planning 

requirements should be amended to be 

made more consistent with the 

technology planning goals and 

requirements of the U.S. Department of 

Education and the U.S. Institute for 

Museum and Library Services. We also 

seek comment on whether the 

Commission’s technology planning 

requirements could be strengthened 

through additional or different 

qualifications for entities, including 

states, which approve technology plans. 

38. Prevention of Unauthorized 

Applications by Subunits. We seek 

comment on whether the Commission 

should adopt rules to prevent subunits, 

such as individual schools or library 

branches, from filing applications 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6235

without the authorization of the central 

authorities over those subunits, such as 

school districts and library systems. We 

also seek comment on how such 

restrictions should be implemented, if 

adopted. For example, should an 

applicant be required to certify that it 

has the appropriate authorization from 

its central authority, or should a central 

authority be permitted to request the 

Administrator to reject any application 

filed by one of its subunits?

39. Use of Surveys to Determine 

School Lunch Eligibility. The Universal 

Service Order stated that a school may 

use federally-approved alternative 

mechanisms which rely on actual 

counts of low-income children to 

determine the level of poverty for 

purposes of the schools and libraries 

universal service discount mechanism. 

USAC implemented this provision by 

permitting schools to collect this 

information from surveys. Currently, 

USAC procedures require a response 

rate of at least 50 percent to ensure a 

statistically valid sample to project the 

percentage of eligibility for all students 

in the school. We seek comment on 

whether to codify this procedure, and if 

so, should we alter the required 

response rate? Is a 50 percent response 

rate higher than necessary to ensure a 

statistically valid sample? We seek to 

streamline program administration in 

this area while protecting against any 

potential abuse. Should the required 

response rate depend on the size of the 

population being surveyed? 

H. Miscellaneous 

40. Determining Whether Rates Are 

Affordable. We seek comment generally 

on how we can ensure that we continue 

to meet the requirements of section 254 

in an efficient and equitable manner. 

Congress mandated that schools and 

libraries across the United States have 

access to advanced telecommunications 

and information services at affordable 

rates. As the expert agency charged with 

this critical task, we believe it important 

to consider periodically how we should 

determine what funding is necessary to 

ensure access at ‘‘affordable’’ rates. Give 

the myriad of service offerings in 

today’s marketplace, how can we 

measure our progress in ensuring 

‘‘affordable’’ access? 

41. Priority for Applicants that Have 

Not Achieved Connectivity. We note 

that, in 1996, prior to implementation of 

the E-rate program, 14 percent of public 

school instructional rooms (i.e., 

classrooms) were connected to the 

Internet. According to the most recently 

available data, in 2002, 92 percent of 

public school classrooms were 

connected to the Internet. While 

considerable progress has been made in 

achieving the congressional goal of 

enhancing access of school classrooms 

and libraries to advanced 

telecommunications and information 

services, we are concerned that our 

rules as currently structured may 

preclude full attainment of that goal. As 

noted, a number of commenters in this 

proceeding have suggested that altering 

the discount rate would be an effective 

way to increase the availability of funds 

for eligible applicants outside the 

highest discount band. We seek 

comment on whether other measures 

should be adopted to further the 

objectives set forth in section 

254(h)(2)(A). In particular, we seek 

comment on whether we should provide 

priority for internal connections to those 

applicants that have not yet achieved 

Internet connectivity in their classrooms 

or libraries. If we were to adopt such a 

proposal, should the priority for funding 

be targeted to those entities where 50 

percent or more of students are eligible 

for the school lunch program? Under 

such a proposal, any entity in an area 

where 50 percent or more of students 

are eligible for free school lunch that 

certifies it has not yet implemented 

internal connections to achieve Internet 

connectivity in any classrooms or in the 

library would receive funding for 

internal connections in advance of all 

applicants seeking funding for internal 

connections that certify that they have 

implemented internal connections to 

achieve Internet connectivity in 

multiple classrooms or locations. Are 

there other rule changes that would 

ensure that all entities are able to 

provide access to the Internet from 

individual classrooms or the library? 

III. Procedural Matters 

A. Initial Paperwork Reduction Act of 

1995 Analysis 

42. This Second Further Notice of 

Proposed Rulemaking (Second FNPRM) 

contains either a proposed or modified 

information collection. As part of a 

continuing effort to reduce paperwork 

burdens, we invite the general public 

and the Office of Management and 

Budget (OMB) to take this opportunity 

to comment on the information 

collections contained in this Second 

FNPRM, as required by the Paperwork 

Reduction Act of 1995, Pub. L. 104–13. 

Public and agency comments are due at 

the same time as other comments on 

this Second FNPRM; OMB comments 

are due April 12, 2004. Comments 

should address: (a) Whether the 

proposed collection of information is 

necessary for the proper performance of 

the functions of the Commission, 

including whether the information shall 

have practical utility; (b) the accuracy of 

the Commission’s burden estimates; (c) 

ways to enhance the quality, utility, and 

clarity of the information collected; and 

(d) ways to minimize the burden of the 

collection of information on the 

respondents, including the use of 

automated collection techniques or 

other forms of information technology. 

B. Initial Regulatory Flexibility Analysis 

43. As required by the Regulatory 

Flexibility Act (RFA), 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 the Second FNPRM. 

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 Second FNPRM. The 

Commission will send a copy of this 

Second FNPRM, including this IRFA, to 

the Chief Counsel for Advocacy of the 

Small Business Administration (SBA). 

In addition, the Second FNPRM and 

IRFA (or summaries thereof) will be 

published in the Federal Register.

1. Need for, and Objectives of, the 

Proposed Rules 

44. In the Second FNPRM, we seek 

comment on whether the current 

discount matrix provides sufficient 

incentives for schools and libraries to 

limit funding requests to services that 

can be efficiently used and whether 

modifying the discount matrix would 

make funds available to a greater 

number of schools and libraries. 

Further, we ask whether the 

Commission should adopt rules 

adjusting the discount matrix for certain 

supported services. To the extent that 

commenters support creating a separate 

discount matrix for priority two 

services, we seek comment on the 

structure and implementation issues 

associated with a new discount matrix. 

In light of the limitations placed on 

applications for internal connection 

discounts, which are Priority Two 

services, we seek comment on measures 

to deter the mischaracterization of 

internal connections as Priority One 

services. 

45. In addition, we seek comment on 

whether the current process for 

applying for discounted services 

sufficiently addresses the Commission’s 

goals of minimizing waste, fraud, and 

abuse in the program, while 

encouraging the benefits of competition 

as set out in the Universal Service 

Order. In that regard, we solicit 

comment on the current competitive 

6236 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

bidding process and the efficiency and 

effectiveness of using Form 470 and 

requested comment regarding any 

means by which the Commission could 

ensure that applicants select costeffective services. Also, we seek further 

comment whether the Commission, as a 

condition of support, should require 

that each service provider certify that 

the prices in its bid have been 

independently developed. Further, we 

request comment on whether the 

Commission’s rules should specifically 

require that records related to the 

competitive bidding process for services 

be maintained by both the recipient and 

service provider for a period of five 

years. 

46. Next, we seek comment on 

modifications to the definition of ‘‘rural 

area’’ for the schools and libraries 

mechanism and ask whether it would be 

necessary or desirable to use the same 

definition of ‘‘rural’’ for both the schools 

and libraries program and rural health 

care program. Similarly, we seek 

comment whether the definition of 

Internet access in the schools context 

should be changed to mirror the 

definition of Internet access recently 

adopted in the Rural Health Care Order.

47. In light of the restrictions imposed 

on receiving discounts for internal 

connections, we seek comment asking 

whether any measures should be taken 

to evaluate service provider charges for 

capital investments for wide area 

networks, a Priority One service. In that 

regard, we seek comment whether 

expenditures that subsidize 

infrastructure investment, either onpremises or off-premises, may properly 

be viewed as Priority One services. We 

also seek comment on funding for unlit 

(dark) fiber under the E-rate program. In 

addition, we ask whether we should 

adopt specific recovery rules for funds—

entire or partial commitments—that are 

disbursed in violation of the statute or 

programmatic rules or procedures. In 

that connection, we seek comment 

regarding measures to prevent waste, 

fraud, and abuse associated with 

improper disbursement of E-rate funds. 

48. We seek comment on various 

measures to abate waste, fraud and 

abuse in the schools and libraries 

universal service mechanism, including 

whether a rule should be adopted 

requiring that all records related to the 

receipt of or delivery of discounted 

services be maintained by beneficiaries 

and service providers for a period of five 

years after the completion of the 

discounted services. In addition, we 

solicit comment whether rules defining 

‘‘cost-effective’’ service should be 

adopted. Also, we seek comment 

whether applicants should be required 

to identify any consultants or other 

outside experts, whether paid or 

unpaid, that aid in the preparation of 

the applicant’s technology plan or in the 

applicant’s procurement process. In 

addition, we solicit comment on the 

adoption of a rule requiring the filing of 

a Service Provider Annual Certification 

(or FCC Form 473) with the 

Administrator for remittance of 

payment. We also seek comment as to 

whether the Commission should codify 

rules establishing deadlines for service 

providers to file invoices with the 

Administrator and whether the 

Administrator’s existing policy to deny 

support for untimely filed invoices, 

except in limited circumstances, should 

be codified. In an effort to further 

reduce waste, fraud and abuse in the Erate program, we request comment 

whether current guidelines from the 

Universal Service Order and USAC 

regarding the content of the applicants’

technology plans should be adopted as 

Commission rules. We also ask for 

comments whether the Commission’s 

technology planning goals should be 

consistent with the requirements of the 

U.S. Department of Education and the 

U.S. Institute for Museum and Library 

Services. In addition, we seek comment 

whether the Commission should adopt 

rules to prevent individual schools and 

libraries from submitting applications 

without coordination with or 

authorization from the central 

authorities, namely school districts and 

library systems. We solicit comment on 

whether USAC’s policy of accepting 

surveys to determine National School 

Lunch eligibility should be codified. 

49. Finally, we seek comment 

whether our rules should be modified to 

ensure a funding priority for applicants 

that have not yet achieved internet 

connectivity in their classrooms or 

libraries. We also seek comment 

generally on whether any rules should 

be adopted to ensure affordable rates for 

eligible services and ensure access to 

eligible services.

2. Legal Basis 

50. The legal basis for the Second 

FNPRM is contained in sections 1 

through 4, 201 through 205, 254, 303(r), 

and 403 of the Communications Act of 

1934, as amended, and § 1.411 of the 

Commission’s rules. 

3. Description and Estimate of the 

Number of Small Entities to Which 

Rules Will Apply 

51. We have described in detail in the 

Final Regulatory Flexibility Analysis in 

the companion Order in this 

proceeding, the categories of entities 

that may be directly affected by our 

proposals. For this Initial Regulatory 

Flexibility Analysis, we hereby 

incorporate those entity descriptions by 

reference. 

4. Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

52. With one exception, the specific 

proposals under consideration in this 

Second FNPRM would not, if adopted, 

result in additional recordkeeping 

requirements for small businesses. With 

regard to the one exception, we propose 

adoption of a rule that requires each 

entity receiving supported services to 

keep all records related to the receipt of 

or delivery of discounted services for a 

period of five years after 

implementation of the discounted 

services. This proposal includes 

additional recordkeeping because the 

current Commission rule requires each 

entity receiving supported services to 

keep records related to receipt of 

discounted services similar to those that 

the entity maintains for other purchases 

and does not specify the time period for 

which such records must be maintained. 

Thus, the revised rule means that the 

records need not be kept beyond the five 

year period. 

53. We have sought comments 

regarding the other proposed rules; 

however, new recordkeeping 

requirements are not involved. 

5. Steps Taken To Minimize Significant 

Economic Impact on Small Entities, and 

Significant Alternatives Considered 

54. The RFA requires an agency to 

describe any significant alternatives that 

it has considered in reaching its 

proposed approach, which may include 

the following four alternatives (among 

others): (1) The establishment of 

differing compliance and reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance or reporting requirements 

under the rule for small entities; (3) the 

use of performance, rather than design, 

standards; and (4) an exemption from 

coverage of the rule, or part thereof, for 

small entities. 

55. In the Second FNPRM, we seek 

comment regarding the adoption of 

rules requiring addition recordkeeping 

for each entity receiving discounted 

services. Moreover, we seek comments 

asking for identification of any 

recordkeeping measures that would 

improve the Commission’s ability to 

enforce its rules governing waste, fraud, 

and abuse in the schools and libraries 

program. In that regard, we note the 

findings by recent beneficiary audits 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6237

conducted by KPMG, which indicate 

that better documentation would 

improve the ability to audit 

beneficiaries. Since abatement of waste, 

fraud, and abuse in the schools and 

libraries program is the objective, 

excluding small entities from such a 

requirement would contravene that 

objective and present a loophole that 

could damage the integrity of the 

program. Decreasing the likelihood of 

waste, fraud, and abuse preserves 

program funding for discounts to all 

eligible schools and libraries. We invite 

comment on this recordkeeping 

requirement and ask that those parties 

who object to the proposed requirement 

offer an alternative and explain the 

merits of their alternative. 

6. Federal Rules that may Duplicate, 

Overlap, or Conflict With the Proposed 

Rules 

56. None. 

C. Comment Filing Procedures 

57. We invite comment on the issues 

and questions set forth in the Second 

FNPRM and Initial Regulatory 

Flexibility Analysis contained herein. 

Pursuant to applicable procedures set 

forth in §§ 1.415 and 1.419 of the 

Commission’s rules, interested parties 

may file comments on or before March 

11, 2004, and reply comments on or 

before April 12, 2004. All filings should 

refer to CC Docket No. 02–6. Comments 

may be filed using the Commission’s 

Electronic Comment Filing System 

(ECFS) or by filing paper copies. 

58. Comments filed through the ECFS 

can be sent as an electronic file via the 

Internet to http://www.fcc.gov/cgb/ecfs/.

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, U.S. 

Postal Service mailing address, and the 

applicable docket or rulemaking 

number. Parties may also submit an 

electronic comment 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 .’’ A sample 

form and directions will be sent in 

reply. 

59. 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. 

60. Filings can be sent by hand or 

messenger delivery, by commercial 

overnight courier, or by first-class or 

overnight U.S. Postal Service mail 

(although we continue to experience 

delays in receiving U.S. Postal Service 

mail).

61. The Commission’s contractor, 

Natek, Inc., will receive hand-delivered 

or messenger-delivered paper filings for 

the Commission’s Secretary at 236 

Massachusetts Avenue, NE., Suite 110, 

Washington, DC 20002.

—The filing hours at this location are 8 

a.m. to 7 p.m. 

—All hand deliveries must be held 

together with rubber bands or 

fasteners. 

—Any envelopes must be disposed of 

before entering the building. 

—Commercial overnight mail (other 

than U.S. Postal Service Express Mail 

and Priority Mail) must be sent to 

9300 East Hampton Drive, Capitol 

Heights, MD 20743. 

—U.S. Postal Service first-class mail, 

Express Mail, and Priority Mail 

should be addressed to 445 12th 

Street, SW., Washington, DC 20554. 

—All filings must be addressed to the 

Commission’s Secretary, Office of the 

Secretary, Federal Communications 

Commission. 

62. Parties filing electronic media 

should be advised that the Commission 

released a public notice on August 22, 

2003 providing new guidance for 

mailing electronic media. In brief, 

electronic media should NOT be sent 

through USPS because of the eradiation 

process USPS mail must undergo to 

complete delivery. Hand or messenger 

delivered electronic media for the 

Commission’s Secretary should be 

addressed for delivery to 236 

Massachusetts Avenue, NE., Suite 110, 

Washington, DC 20002, and other 

messenger-delivered electronic media 

should be addressed for delivery to 9300 

East Hampton Drive, Capitol Heights, 

MD 20743. 

63. Parties who choose to file by 

paper should also submit their 

comments on diskette to Sheryl Todd, 

Telecommunications Access Policy 

Division, Wireline Competition Bureau, 

Federal Communications Commission, 

445 12th Street, SW., Room 5–B540, 

Washington, DC 20554. Such a 

submission should be on a 3.5 inch 

diskette formatted in an IBM compatible 

format using Microsoft Word or 

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 docket 

number, in this case, CC Docket No. 02–

6), 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 pleading, 

preferably in a single electronic file. In 

addition, commenters must send 

diskette copies to the Commission’s 

copy contractor, Natek, Inc., Portals II, 

445 12th Street, SW., Room CY–B402, 

Washington, DC 20554. 

64. Regardless of whether parties 

choose to file electronically or by paper, 

parties should also file one copy of any 

documents filed in this docket with the 

Commission’s copy contractor, Qualex, 

International Inc., Portals II, 445 12th 

Street, SW., Room CY–B402, 

Washington DC 20554. Comments and 

reply comments will be available for 

public inspection during regular 

business hours in the FCC Reference 

Center, Room CY–A257, 445 12th Street, 

SW., Washington, DC 20554. In 

addition, the full text of this document 

is available for public inspection and 

copying during regular business hours 

at the FCC Reference Information 

Center, Portals II, 445 12th Street, SW., 

Room CY–A257, Washington, DC 20554. 

This document may also be purchased 

from the Commission’s duplicating 

contractor, Qualex International, Inc., 

Portals II, 445 12th Street, SW., Room 

CY–B402, Washington, DC 20554, 

telephone 202–863–2893, facsimile 

202–863–2898, or via e-mail 

qualexint@aol.com. 

65. Comments and reply comments 

must include a short and concise 

summary of the substantive arguments 

raised in the pleading. Comments and 

reply comments must also comply with 

§ 1.49 and all other applicable sections 

of the Commission’s rules. We direct all 

interested parties to include the name of 

the filing party and the date of the filing 

on each page of their comments and 

reply comments. All parties are 

encouraged to utilize a table of contents, 

regardless of the length of their 

submission. We also strongly encourage 

parties to track the organization set forth 

in the FNPRM in order to facilitate our 

internal review process. 

D. Further Information 

66. Alternative formats (computer 

diskette, large print, audio recording, 

and Braille) are available to persons 

with disabilities by contacting Brian 

Millin at (202) 418–7426 voice, (202) 

418–7365 TTY, or bmillin@fcc.gov. This 

6238 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

Second FNPRM can also be downloaded 

in Microsoft Word and ASCII formats at 

http://www.fcc.gov/wcb/

universal_service/schoolsandlibs.html. 

67. For further information, contact 

Kathy Tofigh at (202) 418–1553, Karen 

Franklin at (202) 418–7706, or Jennifer 

Schneider at (202) 418–0425 in the 

Telecommunications Access Policy 

Division, Wireline Competition Bureau. 

IV. Ordering Clauses 

68. Pursuant to the authority 

contained in sections 1, 4(i), 4(j), 201–

205, 214, 254, and 403 of the 

Communications Act of 1934, as 

amended, this Second Further Notice of 

Proposed Rulemaking is adopted. 

69. The Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

this Second Further Notice of Proposed 

Rulemaking, including the Initial 

Regulatory Flexibility Analysis, to the 

Chief Counsel for Advocacy of the Small 

Business Administration.

List of Subjects in 47 CFR Part 54 

Reporting and recordkeeping 

requirements, Telecommunications, 

Telephone.

Federal Communications Commission. 

Marlene Dortch, 

Secretary.

[FR Doc. 04–2734 Filed 2–9–04; 8:45 am] 

BILLING CODE 6712–01–U

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 73 

[DA 04–144, MB Docket No. 04–16, RM–

10840] 

Digital Television Broadcast Service; 

Roswell, NM

AGENCY: Federal Communications 

Commission.

ACTION: Proposed rule.

SUMMARY: The Commission requests 

comments on a petition filed by Eastern 

New Mexico University proposing the 

allotment and the reservation of DTV 

channel 31 for noncommercial 

educational use at Roswell, New 

Mexico. DTV Channel *31 can be 

allotted to Roswell at reference 

coordinates 33–19–56 N. and 104–48–17 

W. Since the community of Roswell is 

located within 275 kilometers of the 

U.S.-Mexican border, concurrence from 

the Mexican government must be 

obtained for this allotment.

DATES: Comments must be filed on or 

before March, 22, 2004, and reply 

comments on or before April 4, 2004.

ADDRESSES: The Commission permits 

the electronic filing of all pleadings and 

comments in proceedings involving 

petitions for rule making (except in 

broadcast allotment proceedings). See 

Electronic Filing of Documents in Rule 

Making Proceedings, GC Docket No. 97–

113 (rel. April 6, 1998). Filings by paper 

can be sent by hand or messenger 

delivery, by commercial overnight 

courier, or by first-class or overnight 

U.S. Postal Service mail. The 

Commission’s contractor, Natek, Inc., 

will receive hand-delivered or 

messenger-delivered paper filings for 

the Commission’s Secretary at 236 

Massachusetts Avenue, NE., Suite 110, 

Washington, DC 20002. The filing hours 

at this location are 8 a.m. to 7 p.m. All 

hand deliveries must be held together 

with rubber bands or fasteners. Any 

envelopes must be disposed of before 

entering the building. Commercial 

overnight mail (other than U.S. Postal 

Service Express Mail and Priority Mail) 

must be sent to 9300 East Hampton 

Drive, Capitol Heights, MD 20743. U.S. 

Postal Service first-class mail, Express 

Mail, and Priority Mail should be 

addressed to 445 12th Street, SW., 

Washington, DC 20554. All filings must 

be addressed to the Commission’s 

Secretary, Office of the Secretary, 

Federal Communications Commission, 

Washington, DC 20554. In addition to 

filing comments with the FCC, 

interested parties should serve the 

petitioner, or its counsel or consultant, 

as follows:

FOR FURTHER INFORMATION CONTACT: Pam 

Blumenthal, Media Bureau, (202) 418–

1600.

SUPPLEMENTARY INFORMATION: This is a 

synopsis of the Commission’s Notice of 

Proposed Rule Making, MB Docket No. 

04–16, adopted January 22, 2004, and 

released January 30, 2004. The full text 

of this document is available for public 

inspection and copying during regular 

business hours in the FCC Reference 

Information Center, Portals II, 445 12th 

Street, SW., Room CY–A257, 

Washington, DC 20554. This document 

may also be purchased from the 

Commission’s duplicating contractor, 

Qualex International, Portals II, 445 

12th Street, SW., Room CY–B402, 

Washington, DC 20554, telephone (202) 

863–2893, facsimile (202) 863–2898, or 

via-e-mail qualexint@aol.com. 

Provisions of the Regulatory 

Flexibility Act of 1980 do not apply to 

this proceeding. 

Members of the public should note 

that from the time a Notice of Proposed 

Rule Making is issued until the matter 

is no longer subject to Commission 

consideration or court review, all ex 

parte contacts are prohibited in 

Commission proceedings, such as this 

one, which involve channel allotments. 

See 47 CFR 1.1204(b) for rules 

governing permissible ex parte contacts. 

For information regarding proper 

filing procedures for comments, see 47 

CFR 1.415 and 1.420.

List of Subjects in 47 CFR Part 73 

Digital television broadcasting, 

Television.

For the reasons discussed in the 

preamble, the Federal Communications 

Commission proposes to amend 47 CFR 

Part 73 as follows:

PART 73—RADIO BROADCAST 

SERVICES 

1. The authority citation for part 73 

continues to read as follows:

Authority: 47 U.S.C. 154, 303, 334 and 336.

§ 73.622 [Amended] 

2. Section 73.622(b), the Table of 

Digital Television Allotments under 

New Mexico is amended by adding DTV 

channel *31 at Roswell.

Federal Communications Commission. 

Barbara A. Kreisman, 

Chief, Video Division, Media Bureau.

[FR Doc. 04–2835 Filed 2–9–04; 8:45 am] 

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 73 

[DA 04–94, MB Docket No. 04–11, RM–

10841] 

Digital Television Broadcast Service; 

Colby, KS

AGENCY: Federal Communications 

Commission.

ACTION: Proposed rule.

SUMMARY: The Commission requests 

comments on a petition filed by Smoky 

Hills Public Television Corporation, 

proposing the allotment of DTV channel 

19 to Colby, as an educational channel. 

DTV Channel *19 can be allotted to 

Colby, Kansas, at reference coordinates 

39–23–45 N. and 101–03–37 W in 

compliance with §§ 73.625(a) and 

73.623(d) of the Commission’s Rules.

DATES: Comments must be filed on or 

before March 15, 2004, and reply 

comments on or before March 30, 2004.

ADDRESSES: The Commission permits 

the electronic filing of all pleadings and 

comments in proceeding involving 

petitions for rule making (except in 

broadcast allotment proceedings). See 

Electronic Filing of Documents in Rule