[Federal Register Volume 69, Number 27 (Tuesday, February 10, 2004)]
[Proposed Rules]
[Pages 6229-6238]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2734]


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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.

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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 <a href="/cdn-cgi/l/email-protection#266c53424f524e0b64086e43544b47486640454508414950"><span class="__cf_email__" data-cfemail="743e01101d001c59365a3c110619151a341217175a131b02">[email protected]</span></a>, and to Kim A. Johnson, OMB 
Desk Officer, Room 10236 NEOB, 725 17th Street, NW., Washington, DC 
20503, or via the Internet to <a href="/cdn-cgi/l/email-protection#1d567470425c3342577275736e72735d72707f3378726d337a726b"><span class="__cf_email__" data-cfemail="074c6e6a584629584d686f6974686947686a652962687729606871">[email protected]</span></a> 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 <a href="/cdn-cgi/l/email-protection#bbf1cedfd2cfd396f995f3ded6dad5fbddd895dcd4cd"><span class="__cf_email__" data-cfemail="da90afbeb3aeb2f798f492bfb7bbb49abcb9f4bdb5ac">[email protected]</span></a>.

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 pre-
discount 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

[[Page 6230]]

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 E-rate 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

[[Page 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 non-collusion 
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 non-
urbanized 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 non-rural 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

[[Page 6232]]

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 
on-premises 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-by-case 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

[[Page 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 non-compliance 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

[[Page 6234]]

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 man-made 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

[[Page 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

[[Page 6236]]

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 cost-effective 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 on-premises 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 E-rate 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 Sec. 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

[[Page 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 Sec.Sec. 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 <a href="/cdn-cgi/l/email-protection#1376707560537570703d747c65"><span class="__cf_email__" data-cfemail="9afff9fce9dafcf9f9b4fdf5ec">[email protected]</span></a>, 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 
<a href="/cdn-cgi/l/email-protection#ddaca8bcb1b8a5b4b3a99dbcb2b1f3beb2b0"><span class="__cf_email__" data-cfemail="f08185919c9588999e84b0919f9cde939f9d">[email protected]</span></a>.
    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 Sec. 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 
<a href="/cdn-cgi/l/email-protection#b0d2ddd9dcdcd9def0d6d3d39ed7dfc6"><span class="__cf_email__" data-cfemail="6507080c09090c0b250306064b020a13">[email protected]</span></a>. This

[[Page 6238]]

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


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