[Federal Register Volume 75, Number 218 (Friday, November 12, 2010)]
[Proposed Rules]
[Pages 69374-69395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28535]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0, 1, and 54

[WT Docket No. 10-208; FCC 10-182]


Supplement to Universal Service Reform Mobility Fund

AGENCY: Federal Communications Commission.

ACTION: Supplemental notice of proposed rulemaking.

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SUMMARY: This document is a supplement to the Universal Service Reform 
Mobility Fund, published November 1, 2010. In this document, the 
Federal Communication Commission proposes the creation of a new 
Mobility Fund to make available one-time support to significantly 
improve coverage of current-generation

[[Page 69375]]

or better mobile voice and Internet service for consumers in areas 
where such coverage is currently missing. The Commission seeks comment 
on creating the Mobility Fund using reserves accumulated in the 
Universal Service Fund and on the use of a reverse auction to make one-
time support available to service providers to cost-effectively extend 
mobile coverage in specified unserved areas.

DATES: Comments are due on or before December 16, 2010; and reply 
comments are due on or before January 18, 2011.

ADDRESSES: You may submit comments, identified by WT Docket No. 10-208, 
by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
    <bullet> Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail. All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
    <bullet> All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
    <bullet> 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.
    <bullet> People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#45030606707571052326266b222a33"><span class="__cf_email__" data-cfemail="fbbdb8b8cecbcfbb9d9898d59c948d">[email protected]</span></a> or telephone: 202-
418-0530 or TTY: 202-418-0432.
    <bullet> In addition to filing comments with the Secretary, a copy 
of any PRA comments on the proposed collection requirements contained 
herein should be submitted to the Federal Communications Commission via 
e-mail to <a href="/cdn-cgi/l/email-protection#98c8cad9d8fefbfbb6fff7ee"><span class="__cf_email__" data-cfemail="23737162634540400d444c55">[email protected]</span></a> and to Nicholas A. Fraser, Office of Management 
and Budget, via e-mail to <a href="/cdn-cgi/l/email-protection#98f6feeaf9ebfdead8f7f5fab6fdf7e8b6fff7ee"><span class="__cf_email__" data-cfemail="264840544755435466494b440843495608414950">[email protected]</span></a> or fax at 202-395-5167.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: Scott Mackoul at (202) 418-0660. 
For additional information concerning the information collection 
requirements contained in this document, send and e-mail to <a href="/cdn-cgi/l/email-protection#d282809392b4b1b1fcb5bda4"><span class="__cf_email__" data-cfemail="b8e8eaf9f8dedbdb96dfd7ce">[email protected]</span></a> 
or contact Judith B. Herman at 202-418-0214.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Mobility Fund Notice of Proposed Rulemaking in WT Docket No. 10-208, 
adopted October 14, 2010, and released on October 14, 2010. The 
complete text of the Mobility Fund Notice of Proposed Rulemaking is 
available for public inspection and copying from 8 a.m. to 4:30 p.m. ET 
Monday through Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays in 
the FCC Reference Information Center, 445 12th Street, SW., Room CY-
A257, Washington, DC 20554. The Mobility Fund Notice of Proposed 
Rulemaking may be purchased from the Commission's duplicating 
contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street, SW., 
Room CY-B402, Washington, DC 20554, telephone 202-488-5300, fax 202-
488-5563, or you may contact BCPI at its Web site: http://www.BCPIWEB.com. When ordering documents from BCPI, please provide the 
appropriate FCC document number, for example, FCC 10-182. The Mobility 
Fund Notice of Proposed Rulemaking is also available on the Internet at 
the Commission's Web site or by using the search function for WT Docket 
No. 10-208 on the ECFS web page at http://www.fcc.gov/cgb/ecfs/.

Initial Paperwork Reduction Act of 1995 Analysis

    This document contains proposed information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget to comment on the information collection 
requirements contained in the document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. 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. In addition, pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, 44 
U.S.C. 3506(c)(4), the Commission seeks specific comment on how the 
Commission might further reduce the information collection burden for 
small business concerns with fewer than 25 employees.

I. Notice of Proposed Rulemaking

A. Introduction

    1. Millions of Americans live in communities where current-
generation mobile service is unavailable, and millions more work in or 
travel through such areas. To accelerate the Commission's nation's 
ongoing effort to close this mobility gap in a fiscally responsible 
manner, the Mobility Fund Notice of Proposed Rulemaking seeks comment 
on using reserves accumulated in the Universal Service Fund (USF) to 
create a new Mobility Fund. The purpose of the Mobility Fund is to 
significantly improve coverage of current-generation or better mobile 
voice and Internet service for consumers in areas where such coverage 
is currently missing, and to do so by supporting private investment. 
The Mobility Fund would use market mechanisms--specifically, a reverse 
auction--to make one-time support available to service providers to 
cost-effectively extend mobile coverage in specified unserved areas.
    2. In the three decades since the Commission issued the first 
cellular telephone licenses, the wireless industry has continually 
expanded and upgraded its networks to the point where third generation 
(called advanced or 3G) mobile wireless services are now widely 
available. Despite these advances, mobility gaps remain a problem for 
residents, public safety first responders, businesses, public 
institutions, and travelers, particularly in rural areas. Such gaps 
impose significant disadvantages on those who live, work, and travel in 
these areas. Moreover, without existing modern wireless infrastructure, 
they are at risk of much-delayed access to the coming generations of 
high-speed wireless broadband services. For this reason, the National 
Broadband Plan recommended providing universal service support to 
promote the national build-out of 3G services as part of a 
comprehensive set of recommendations to reform the universal service 
program. See Federal Communications Commission, Connecting America: The 
National Broadband Plan, 146-48 (rel. Mar. 16, 2010) (National 
Broadband Plan). The proposals in the Mobility Fund Notice of

[[Page 69376]]

Proposed Rulemaking build on that recommendation. In the Mobility Fund 
Notice of Proposed Rulemaking, the Commission uses ``current 
generation,'' ``3G,'' and ``advanced'' interchangeably to refer to 
mobile wireless services that include voice telecommunications service 
as well as e-mail and Internet access.
    3. The Commission recently undertook steps for fiscally responsible 
USF reform when, in the Corr Wireless Order, the Commission provided 
instructions for implementing the commitments of both Verizon Wireless 
and Sprint Nextel to surrender their high-cost universal service 
support over five years. High-Cost Universal Service Support, Federal-
State Joint Board on Universal Service, Request for Review of Decision 
of Universal Service Administrator by Corr Wireless Communications, 
LLC, WC Docket No. 05-337, CC Docket No. 96-45, Order and Notice of 
Proposed Rulemaking, FCC 10-155 (rel. Aug. 31, 2010) (Corr Wireless 
Order). The Commission directed that the surrendered support be 
reserved as a potential down payment on proposed broadband universal 
service reforms as recommended by the National Broadband Plan, 
including creation of a Mobility Fund to provide wireless broadband 
service in areas that lack coverage. Thus, the Mobility Fund considered 
in the Mobility Fund Notice of Proposed Rulemaking is one of a set of 
initiatives to promote deployment of broadband and mobile services in 
the United States through a financially sensible transformation of USF, 
using market-based and incentive mechanisms.

B. Background

    4. The National Broadband Plan recommended a Mobility Fund in 
connection with broader reforms of the USF. The plan recommended 
providing targeted, one-time support for deployment of 3G 
infrastructure in order to bring all states to a minimum level of 
mobile service availability, without increasing the size of the USF. 
The National Broadband Plan observed that supporting 3G build-out in 
states with 3G coverage lagging the national average would enable those 
states to catch up with the rest of the nation and improve the business 
case for 4G rollout in harder-to-serve areas.

C. Overall Design of the Mobility Fund

    5. Drawing on some of the USF support voluntarily relinquished by 
Verizon Wireless and Sprint Nextel and reserved by the Commission, the 
Mobility Fund would make available non-recurring support to providers 
to deploy 3G or better networks where these services are not currently 
available. In order to maximize the reach of available funds, the 
Commission proposes to provide Mobility Fund support to at most one 
provider in any given unserved area. The Commission proposes to utilize 
a reverse auction mechanism to compare all offers to provide service 
across the unserved areas eligible for participation in the Mobility 
Fund program, which should give providers incentives to seek the least 
support needed and enable identification of the providers that will 
achieve the greatest additional coverage with the limited funding 
available. The Commission proposes to specify unserved areas eligible 
for support on a census block basis, using industry data compiled by 
American Roamer, and to conduct competitive bidding to offer support in 
unserved census blocks grouped by census tracts. The Commission noted 
that, because American Roamer reports advertised coverage as reported 
by many carriers who all use different definitions of coverage, the 
data from American Roamer may overstate the coverage actually 
experienced by consumers.
    6. The Commission also seeks comment in the Mobility Fund Notice of 
Proposed Rulemaking on a number of alternative methods the Commission 
could use to distribute Mobility Fund support, including distributing 
support to any of the identified census tracts nationwide or targeting 
it to those identified census tracts in any county nationwide or in 
states where 3G deployment most significantly lags behind the 
percentage of nationwide population with 3G access. The Commission 
proposes to support only wireless networks performing as well as or 
better than 3G networks currently operating in the United States, for 
example networks using HSPA or EV-DO. The Commission proposes that 
parties receiving support be required to demonstrate the deployment and 
offering of service in previously uncovered areas within a specified 
period of time. The Commission seeks comment on ways to structure the 
program so that it directs funding to those places where deployment of 
advanced mobile wireless service is otherwise not likely to happen.
1. Legal Authority
    7. The Commission proposes to distribute Mobility Fund support 
through the universal service program. Accordingly, the Commission's 
legal authority to create the Mobility Fund is based upon and delimited 
by its legal authority to distribute universal service funds. The 
Commission has authority to use universal service funds to support an 
evolving level of telecommunications services, taking into account 
advances in telecommunications and information technologies and 
services. See 47 U.S.C. 254(c). In addition, various statutory and 
regulatory requirements apply to the use of these funds. See 47 U.S.C. 
214, 254; 47 CFR 54.101. The Commission requests comment on its 
authority to implement the proposals contained in the Mobility Fund 
Notice of Proposed Rulemaking. The Commission also seeks comment on 
whether these proposals require any revisions to its existing 
regulations or to its existing authority. The Commission further asks 
that commenters address, to whatever extent necessary, whether any 
alternative proposals that they suggest are within its current legal 
authority or require any expansion of that authority.
2. Size of the Mobility Fund
    8. The Commission proposes to use $100 million to $300 million in 
USF high-cost universal service support to fund, on a one-time basis, 
the expansion of current-generation mobile wireless services through a 
new Mobility Fund. Prior voluntary agreements by Verizon Wireless and 
Sprint Nextel to surrender USF high-cost support will likely make 
several hundred million dollars available annually that can be used for 
other USF purposes without increasing the overall size of the high-cost 
fund. The National Broadband Plan recommended using these foregone 
funds to implement its recommendations, including the creation of the 
Mobility Fund, and subsequently the Commission adopted the Corr 
Wireless Order implementing the voluntary commitments.
    9. The ultimate impact of any amount of support would depend upon a 
variety of factors, including the extent to which non-recurring funding 
makes it possible to offer service profitably in areas previously 
uneconomic to serve, what percentage of the support must fund new 
facilities as opposed to upgrades to pre-existing facilities, the 
percentage of total capital costs that support must provide, and the 
extent to which new customers adopt services newly made available. The 
Commission seeks comment on the level of support to be provided through 
the Mobility Fund. Specifically, the Commission asks commenters to 
consider whether there is an optimal size for the Mobility Fund. For 
instance, is there an amount that would exceed what is needed to target 
those areas where non-recurring support could be used most effectively 
to expand coverage within a relatively

[[Page 69377]]

short timeframe? What amount would be too small to effectively jump-
start deployment so as to provide service in the places where it might 
not otherwise become available?
3. One Provider Per Area
    10. Given the Commission's objective of using the Mobility Fund to 
support the provision of expanded advanced mobile wireless services to 
as much of the currently unserved population in identified areas as 
possible, the Commission proposes that only one entity in a given 
geographic area receive Mobility Fund support. The Commission 
recognizes that mobile wireless providers have expressed competitive 
concerns, especially given that 3G services may use either CDMA or GSM 
technology, about the possibility of limiting support to one provider. 
In light of these concerns, the Commission proposes certain terms and 
conditions of support to encourage possibilities for competition. The 
Commission seeks comment on its proposal to make Mobility Fund support 
available to only one provider per area.
4. Auction To Determine Awards of Support
    11. The Commission proposes to use a competitive bidding mechanism 
to determine the entities that will receive support under the Mobility 
Fund and the amount of support they will receive--that is, the 
Commission proposes to award support based on the lowest bid amounts 
submitted in a reverse auction. Such a mechanism should allow the 
market to reveal the costs of providing expanded access to advanced 
mobile services in unserved areas. This should allow the Commission to 
select the providers that require the least support without requiring 
onerous cost showings by applicants and without guaranteeing that 
support payments will cover all, or any specific percentage of, the 
providers' actual costs.
    12. In this reverse auction, which the Commission proposes to 
conduct using a single round of bidding, applicants formulating their 
bids would have to evaluate carefully the amount of support they need 
to provide the required services. In general, bidders would not want to 
overstate the support they require since they would be competing 
against other providers for limited support funds and a higher bid 
would reduce their chances of winning. At the same time, they would not 
want to understate the support they require, since they might be 
awarded such support based on a bid amount that does not cover their 
costs and then be expected to provide services to meet the performance 
requirements. As a result, the submitted bids should present a good 
estimate of the actual costs to the bidders of providing advanced 
mobile services in the areas on which they bid to expand service. The 
Commission seeks comment generally on the use of a competitive bidding 
mechanism to determine recipients of Mobility Fund support and support 
amounts, and particularly, on the use of a single round reverse auction 
format.
    13. More specifically, the Commission proposes to determine winning 
bidders for Mobility Fund support based on the lowest per-unit bids, 
using the population of unserved areas (and perhaps other 
characteristics, such as road miles) as units and taking into account 
the requirement that there be no more than one Mobility Fund recipient 
in any particular area. The auction mechanism would compare all per-
unit bids across all areas (that is, compare all bids against all other 
bids, rather than compare all bids for a single area), and order all 
the submitted bids from lowest per-unit amount to highest. The bidder 
making the lowest per-unit bid would first be assigned support in an 
amount equal to the amount needed to cover the population (or units 
based on other characteristics) deemed unserved in the specific area at 
the per-unit rate that was bid. For example, if the lowest per-unit bid 
were $100 per person, the bidder placing that bid would be awarded 
support in the amount of $100 times the population of the area on which 
it bid. Support would continue to be assigned to the bidders with the 
next lowest per-unit bids in turn, as long as support had not already 
been assigned for that geographic area, until the running sum of 
support funds requested by the winning bidders was such that no further 
winning bids could be financed by the money available in the Mobility 
Fund.
    14. By awarding support to those bidders that are able to cover 
units in unserved areas at the least cost to the Mobility Fund, the 
greatest amount of population in the identified unserved areas can be 
covered with the available funds. The Commission seeks comment on this 
method of determining recipients of Mobility Fund support. The 
Commission also seeks comment on determining payment amounts as 
proposed--by multiplying the winning per-unit bid amounts by the units 
deemed unserved.
5. Identifying Unserved Areas Eligible for Support
    15. The Commission proposes to identify unserved areas on a census 
block basis and, because individual census blocks are so small, the 
Commission proposes to conduct bidding to offer Mobility Fund support 
in unserved census blocks grouped by census tracts. The Commission 
further seeks comment on alternative ways to distribute support to 
these unserved areas.
a. Identifying Unserved Areas by Census Block
    16. As a first step in identifying those areas for which applicants 
can bid for Mobility Fund support, the Commission proposes to determine 
the availability of service at the census block level, using a widely 
available dataset. Census blocks are the smallest geographic unit for 
which the Census Bureau collects and tabulates decennial census data, 
so determining coverage by census block should provide a detailed 
picture of the availability of 3G mobile services. By the end of the 
first quarter of 2011, census data from the 2010 decennial census 
should be available on a census block level. The Commission proposes to 
use that data when it becomes available and seeks comment on the 
proposal. Until that data becomes available, the Commission will use in 
its discussion the projected census block data from Geolytics Block 
Estimates and Block Estimates Professional databases (2009).
    17. Specifically, the Commission proposes to use American Roamer 
data identifying the geographic coverage of networks using EV-DO, EV-DO 
Rev A, and UMTS/HSPA as a measure of availability of current-generation 
mobile wireless services. For each census block, the Commission would 
observe whether the data indicates that the geometric center of the 
block--referred to as the centroid--is covered by such mobile wireless 
services. If the data indicates that the centroid is not covered by 
such services, the Commission proposes to consider that census block as 
unserved. Alternatively, the Commission could use the data to obtain 
the geographic proportion of the block that is uncovered--the 
proportional method. The Commission could then consider unserved any 
census block where the data indicates that more than 50 percent of the 
area is unserved. Or, the Commission could consider unserved that 
fraction of the census block's population (or other units).
    18. The Commission seeks comment on its proposed use of American 
Roamer data to determine areas unserved by current-generation mobile 
wireless services. Are there distinctions in the way carriers report 
coverage to American Roamer that the Commission

[[Page 69378]]

should consider when using the data? Are there alternative available 
datasets the Commission can use instead of, or in addition to, American 
Roamer data that would be more reliable or better suited for 
identifying unserved areas? The Commission seeks comment also on the 
proposed centroid method of determining unserved census blocks and on 
the proportional coverage alternative. Is the centroid method likely to 
identify areas that are good candidates for support consistent with the 
objectives of the Mobility Fund? Are there other transparent and 
workable methods for using the available data to define unserved areas? 
In addition, the Commission seeks comment on the extent to which the 
availability in unserved census blocks of other supported services 
using non-mobile wireless technologies should be a factor in 
determining whether those census blocks should be eligible for Mobility 
Fund support.
    19. The Commission recognizes that data on mobile services coverage 
may change over a relatively short timeframe. Therefore, the Commission 
proposes to delegate to the Wireless Telecommunications Bureau 
(Wireless Bureau) the authority to identify unserved census blocks 
prior to announcing a Mobility Fund auction, using the method the 
Commission adopts and the most recent data available for that purpose.
b. Offering Support by Census Tract
    20. While proposing to identify unserved areas at the census block 
level, the Commission proposes to group unserved census blocks by 
larger areas--census tracts--as a basis for competitive bidding, since 
individual census blocks may be too small to serve as a viable basis 
for providing support. More specifically, the Commission proposes to 
accept bids for support to expand coverage to all the unserved census 
blocks within a particular census tract.
    21. The Commission seeks comment on whether census tracts are the 
most appropriate basic geographic unit for providing support to expand 
coverage. Are there other geographic units by which the Commission 
might group unserved census blocks that might better balance the need 
to identify discrete unserved areas for which the Commission proposes 
to require coverage under the Mobility Fund with business plan 
requirements of wireless providers?
c. Establishing Unserved Units
    22. The Commission proposes at a minimum to establish the number of 
units in each unserved census block based on population. The Commission 
also seeks comment on whether it should take into account 
characteristics such as road miles, traffic density, and/or community 
anchor institutions in determining the number of units in each unserved 
census block to be used for assigning support under the Mobility Fund. 
For example, should the Commission utilize data compiled by the 
Department of Transportation (such as Traffic Analysis Zones) or data 
on community anchor institutions to establish the number of units in 
the census block that will be considered unserved? A traffic analysis 
zone (TAZ) is a special area delineated by state and/or local 
transportation officials for tabulating traffic-related data, 
especially journey-to-work and place-of-work statistics. Using such 
additional factors in determining the units in each unserved area may 
better represent the public benefits of providing new access to mobile 
services. Are there other factors that the Commission should take into 
account when assessing coverage of unserved areas, such as work or 
recreation sites; anchor institutions such as schools, libraries, and 
hospitals; or accessibility to a road system? The Commission asks that 
commenters address how it should measure the factors on which it seeks 
comment as well as any other factors they advocate, and how coverage 
for one type of unit, such as a work site, should compare with coverage 
for other units, such as resident population, or whether such 
comparisons would be appropriate.
d. Distributing Mobility Fund Support Among Unserved Areas
    23. The National Broadband Plan recommended creation of a Mobility 
Fund as a means of bringing all states to a minimum level of 3G (or 
better) mobile service availability. Here, the Commission seeks comment 
on various methods it could use to distribute Mobility Fund support 
among unserved areas, including ways to target support to places that 
significantly lag behind the level of 3G coverage generally available 
nationwide.
    24. The Commission could make eligible for Mobility Fund support 
any area nationwide that the Commission deems to be unserved, including 
territories. Thus, the Commission seeks comment on whether, if it were 
to adopt its proposal for identifying census tracts with at least one 
unserved census block, the Commission should make available for bids 
all such identified census tracts across the country.
    25. The Commission also seeks comment on alternative ways of 
limiting Mobility Fund support to places that lag significantly behind 
the level of 3G coverage nationwide. Based on May 2010 American Roamer 
data and November 2009 population estimates, 98.5 percent of the 
population nationwide resides in areas with access to 3G services. The 
Commission notes that, as proposed, it would be using updated coverage 
and population data to determine areas unserved by 3G prior to any 
Mobility Fund auction, so it is possible that the level of nationwide 
coverage could change. Therefore, the Commission seeks comment on 
various ways to identify places that lag significantly behind that 
level of coverage based on more updated data.
    26. For instance, the Commission seeks comment on making Mobility 
Fund support available for unserved census blocks in census tracts in 
any county nationwide where the countywide percentage of population 
with access to 3G services is more than three percentage points below 
the level of 3G deployment nationwide, as determined prior to an 
auction based on updated data. The Commission also seeks comment on 
targeting Mobility Fund support to unserved blocks in census tracts in 
those states where the statewide percentage of population with access 
to 3G services is more than three percentage points less than the 
percentage of the national population with such access. Alternatively, 
the Commission seeks comment on whether the it should target an 
expanded list of counties or states, for example, those with 3G 
coverage levels that are more than two percentage points below the 
nationwide level. The Commission also invites suggestions of other 
means for identifying the counties or states that the Mobility Fund 
should target.
    27. The Commission invites comment on all of the alternatives--
distributing support among unserved areas nationwide and various 
methods for targeting support to a subset of unserved areas. The 
Commission seeks comment on the relative merits and drawbacks of these 
alternative approaches. In particular, the Commission welcomes any 
insights commenters can provide regarding which of these alternatives 
would most effectively utilize Mobility Fund support to benefit 
consumers through expanded 3G coverage. The Commission also seeks 
commenters' views on which of these ways of distributing Mobility Fund 
support would best help ensure that places with the lowest levels of 3G 
coverage will not fall even farther behind as the industry begins to 
deploy the next generation of 4G mobile broadband service. Finally, the 
Commission notes that some areas

[[Page 69379]]

that it identifies as lacking 3G coverage will have some level of 
mobile voice service, while other identified areas will have no mobile 
wireless service at all. The Commission seeks comment on whether and 
how the Commission might prioritize support toward unserved areas that 
currently lack any mobile wireless service.
e. Targeting Tribal Areas
    28. The Commission seeks comment on whether the Commission should 
reserve funds for developing a Mobility Fund support program targeted 
separately to Tribal lands that trail national 3G coverage rates. For 
these purposes, Tribal lands are defined as any federally recognized 
Indian tribes reservation, pueblo or colony, including former 
reservations in Oklahoma, Alaska Native regions established pursuant to 
the Alaska Native Claims Settlements Act (85 Stat. 688), and Indian 
Allotments. 47 CFR 54.400(e). Communities on Tribal lands have 
historically had less access to telecommunications services than any 
other segment of the population. Available data illustrates that less 
than ten percent of residents on Tribal lands have access to broadband. 
Also, Tribal lands are often in rural, high-cost areas, and present 
distinct connectivity challenges. The National Broadband Plan observed 
that many Tribal communities face significant obstacles to the 
deployment of broadband infrastructure, including high build-out costs, 
limited financial resources that deter investment by commercial 
providers and a shortage of technically trained members who can 
undertake deployment and adoption planning. As a result, the National 
Broadband Plan noted that Tribes need substantially greater financial 
support than is presently available to them, and accelerating Tribal 
broadband will require increased funding. The Commission has recognized 
that Tribes are inherently sovereign governments that enjoy a unique 
relationship with the federal government. In turn, the Commission has 
reaffirmed its policy to promote a government-to-government 
relationship between the FCC and federally-recognized Indian tribes. 
Because this relationship warrants a tailored approach that takes into 
consideration the unique characteristics of Tribal lands, the 
Commission believes addressing Mobility Fund support for Tribal lands 
on a separate track will be beneficial in providing adequate time to 
coordinate with American Indian Tribes and Alaska Native Village 
governments and seeks their input.
6. Performance Requirements
a. Coverage Requirement
    29. The Commission proposes to establish a coverage requirement 
that will ensure that Mobility Fund support is put to the purpose for 
which it is intended--to expand coverage in unserved areas. The 
Commission seeks comment on the percentage of resident population in 
the census blocks deemed unserved the Commission should require be 
covered by any party receiving support for a particular census tract. 
Should the Commission require 100 percent coverage? Or would it be 
appropriate to require a level of coverage of between 95 and 100 
percent of the resident population of census blocks deemed unserved in 
order to balance its goal of expanding service with concern that 
excessively high costs to serve a few residents in an area might deter 
providers from bidding to cover areas otherwise well suited for 
Mobility Fund support? The Commission notes that should it decide to 
require less than 100 percent coverage, recipients would receive 
support based on the percentage of coverage actually achieved, provided 
that they cover at least the required percentage.
    30. Is a performance requirement appropriate, given the 
Commission's proposed method of determining unserved areas, its 
proposed use of per-unit bids to determine the set of winning bidders, 
and its proposal that the Commission will determine support amounts 
based on the units deemed unserved in the census blocks within the 
tract? The Commission asks commenters to consider how it should monitor 
compliance with any coverage requirement, and to address the ways in 
which monitoring may create incentives for support recipients to 
further the goals of the Mobility Fund program. The Commission invites 
commenters describing any alternatives to its proposal to explain with 
specificity why such alternatives would be preferable. To ensure that 
the Mobility Fund supports service where it is actually needed, should 
the Commission require winning bidders to actively market their service 
in the area(s) for which they bid, and/or to provide service to a 
specified number or percentage of consumers in such areas by certain 
milestone dates?
    31. The Commission also makes proposals to encourage possibilities 
for competition in the market for 3G or better services in the 
geographic areas in which it provides support. First, the Commission 
proposes that any new tower constructed to satisfy Mobility Fund 
performance obligations provide the opportunity for collocation. The 
Commission seeks comment on this proposal. Should the Commission 
require any minimum number of spaces for collocation on any new towers 
and/or specify terms for collocation? In addition, the Commission 
proposes that the use of Mobility Fund support be conditioned on 
providing data roaming on reasonable and not unreasonably 
discriminatory terms and conditions on 3G and subsequent generations of 
mobile broadband networks that are built through Mobility Fund support. 
The Commission seeks comment on this proposal and asks that commenters 
provide specific information on the impact and/or the importance of 
such requirements in promoting the availability of advanced mobile 
services.
b. Service Quality and Rates
    32. The Commission proposes that Mobility Fund support be used to 
expand the availability of advanced mobile communications services 
comparable or superior to those provided by networks using HSPA or EV-
DO, which are commonly available 3G technologies. Universal service 
support may be provided for services based on widely available current 
generation technologies--or superior next generation technologies 
available at the same or lower costs--even though supported services 
could be based on earlier technologies. Technologies used to provide 
the services supported by universal service funds need not be 
technologies that are strictly limited to providing the particular 
services designated for support. As detailed in connection with proof 
of deployment requirements, supported networks would demonstrate their 
quality of service by proving that they have achieved particular data 
rates under particular conditions. The Commission proposes that these 
data rates be comparable to those provided by networks using the basic 
functionality of HSPA or EV-DO. The Commission would not, however, 
require that supported parties use any particular technology to provide 
service. Instead, the Commission proposes to use widely deployed 
technologies to define a baseline of performance that any supported 
network must meet or exceed. The Commission seeks comment on this 
proposal. Should supported networks be required to provide data rates 
comparable to 4G networks? Alternatively, should supported networks be 
required to present a path to 4G service?
    33. The Commission also seeks comment on how to implement, in the 
context of the Mobility Fund, the statutory principle that supported

[[Page 69380]]

services should be made available to consumers in rural, insular, and 
high-cost areas at rates that are reasonably comparable to rates 
charged for similar services in urban areas. Given the absence of 
affirmative regulation of rates charged for commercial mobile services, 
as well as the rate practices and structures used by providers of such 
services, how can parties demonstrate that the rates they charge in 
areas where they receive support are reasonably comparable to rates 
charged in urban areas? What should the Commission use as a standard 
for reasonably comparable and urban areas in this context? What should 
be the consequence of failing to make the required showing?
c. Deployment Schedule
    34. The Commission proposes that recipients be required to meet 
certain milestones for the provision of service in each unserved census 
block in a tract in order to remain qualified for the full amount of 
any Mobility Fund award. For example, the Commission could require that 
recipients achieve fifty percent of the coverage requirement within one 
year after qualifying for support. The Commission seeks comment on this 
proposal and on appropriate coverage percentages and time periods for 
such a milestone. Are there critical factors that should be taken into 
account in establishing timetables for rollout in different areas, such 
as weather conditions or limited construction seasons? The Commission 
notes that service providers will have to comply with the Commission's 
rules implementing the National Environmental Policy Act and other 
federal environmental statutes, as well as all local requirements for 
construction. Are there areas where those requirements would make it 
appropriate to adopt alternative schedules?
d. Proof of Deployment
    35. Parties supported by the Mobility Fund must provide 3G or 
better mobile coverage in specific areas previously deemed unserved by 
3G. The Commission proposes that parties satisfy their performance 
requirement by proving that they have deployed a network covering the 
relevant area and capable of meeting certain minimum standards. The 
Commission proposes that data from the drive tests conducted after 
construction and optimization of the network be used to determine 
whether these requirements have been met. By drive tests, the 
Commission refers to tests service providers normally conduct to 
analyze network coverage for mobile services in a particular area, that 
is, measurements taken from vehicles traveling on roads in the area. 
More specifically, the Commission proposes that recipients of Mobility 
Fund support would provide data from their drive tests showing mobile 
transmissions to and from the network meeting or exceeding the 
following minimum standards: Outdoor minimum of 200 kbps uplink and 768 
kbps downlink to handheld mobile devices at vehicle speeds up to 70 
MPH. These data rates should be achieved with 90 percent coverage area 
probability at a sector loading of 70 percent. The transmissions would 
be required to support mobile voice and data. The Commission proposes 
that the drive test would be conducted over all Interstate, US, and 
State routes in the area, as well as any other roads that the 
applicable State Agency regulating the provision of telecommunications 
services deems essential to service. The Commission proposes that drive 
test data satisfying the foregoing requirements should be submitted 
within two months of a site providing service or two years of the date 
support is first provided, whichever comes earlier. The Commission 
seeks comment on these proposals.
    36. The Commission's proposal would not require that providers 
employ any particular type of technology in expanding coverage. 
Nevertheless, the Commission seeks comment on whether there are reasons 
to adopt technology-specific minimum standards. Is there any risk that 
providers will deploy particular technologies in inefficient ways or 
ways that limit their capacity for future growth in order to meet the 
minimum standards? Or should the Commission require superior 
performance from certain technologies that are capable of far exceeding 
the minimum requirements? For example, should the Commission require 
that 4G technologies deployed with support satisfy minimum standards 
greater than 3G technologies deployed with support?
    37. The Commission seeks comment on how to determine the roads that 
must be included in any drive tests subject to review. Would it be 
sufficient to cover Interstates, US Routes, and State Routes? Do 
circumstances vary sufficiently from state to state or region to region 
such that different approaches should be adopted for different States? 
What parties are likely to have the best available information 
regarding what roads are most important for mobile coverage? Should 
those parties be involved in the process of determining the roads that 
must be included in the drive tests?
    38. To demonstrate coverage of the population within an unserved 
area, the Commission proposes that bidders submit in electronic 
Shapefiles site coverage plots from a standard RF prediction tool that 
utilizes high resolution terrain data and has been calibrated to match 
the results of drive tests to the extent possible. The Environmental 
Systems Research Institute (ESRI) Shapefile format is a commonly used 
GIS (Geographic Information System) file format representing vector 
data. These plots would be submitted along with the drive test data, 
preferably on the same plot, and each will display the same coverage 
threshold parameter, with adjustments to account for drive test 
configuration specified as necessary. The coverage threshold selected 
would be one that is (a) sufficient to initiate and hold a voice call, 
and (b) is mathematically capable using standard link budget 
calculations of supporting the minimum data rate requirements. These 
link budget calculations showing derivation of the threshold would also 
be provided. The scale of the plots would be at least 1:240,000 such 
that reasonable coverage resolution is evident. In addition, the plots 
would be accompanied by all relevant site data, including site 
coordinates, antenna type(s), radiation centers (AGL), Effective 
Isotropic Radiated Powers (EIRPs), antenna azimuths, and antenna tilts. 
These plots would also include major roadways, census tract boundaries, 
and county (or its equivalent) and state boundaries, as well as the 
boundaries between served and unserved census blocks, as previously 
determined by the Commission, so that the site's coverage can easily be 
compared to areas previously deemed unserved. The specific census 
blocks may be identified on the plot or listed in accompanying data. 
Lastly, the plots would show the population previously deemed unserved 
of each block and the percentage of these that are now served.
    39. The Commission proposes that parties receiving support be 
required to file annual reports with the Commission demonstrating the 
coverage provided with support from the Mobility Fund for five years 
after qualifying for support. The Commission proposes that the reports 
include maps illustrating the scope of the area reached by new 
services, the population residing in those areas (based on Census 
Bureau data and estimates), and information regarding efforts to market 
the service to promote adoption among the population in those areas. In 
addition, the

[[Page 69381]]

Commission proposes that each party receiving support be required to 
include in its annual reports all drive test data that the party 
receives or makes use of, whether the tests were conducted pursuant to 
Commission requirements or any other reason. The Commission seeks 
comment on this proposal and discussion of any alternatives regarding 
the collection of information about supported services newly offered in 
previously unserved areas.

D. Mobility Fund Eligibility Requirements

    40. In compliance with statutory requirements and to help ensure 
the commitment of applicants, the Commission proposes certain minimum 
requirements for those entities wishing to receive support from the 
Mobility Fund. Specifically, the Commission proposes that a provider be 
required to (1) Be designated (or have applied for designation) as a 
wireless Eligible Telecommunications Carrier (ETC) pursuant to 47 
U.S.C. 214(e), by the state public utilities commission (PUC) (or the 
Commission, where the state PUC does not designate ETCs) in any area 
that it seeks to serve; (2) have access to spectrum capable of 3G or 
better service in the geographic area to be served; and (3) certify 
that it is financially and technically capable of providing service 
within the specified timeframe. The Commission proposes to require 
that, subject to these requirements, applicants be eligible to submit 
bids seeking support to deploy service in multiple unserved areas. The 
Commission seeks comment on these minimum requirements, inquires 
whether other minimum standards are desirable, and solicits comment on 
other provider eligibility issues.
    41. The Commission proposes a two-stage application process similar 
to the one it uses in spectrum license auctions. Based on the 
eligibility requirements for Mobility Fund support, the Commission 
would require a pre-auction short-form application to establish 
eligibility to participate in the auction, relying primarily on 
disclosures as to identity and ownership and applicant certifications, 
and perform a more extensive, post-auction review of the winning 
bidders' qualifications based on required long-form applications. Such 
an approach should provide an appropriate screen to ensure serious 
participation without being unduly burdensome. This would allow the 
Commission to move forward quickly with the auction, which would speed 
the distribution of funding and ultimately the provision of advanced 
mobile wireless services to currently unserved areas. The Commission 
seeks comment on the use of this application process to ensure 
compliance with its eligibility requirements.
1. ETC Designation
    42. All USF recipients must be designated as ETCs by the relevant 
state (or by the Commission in cases of states that have determined 
they have no jurisdiction over a wireless ETC designation request) 
before receiving high-cost support pursuant to 47 U.S.C. 214 and 254. 
Therefore, the Commission proposes to require that applicants for 
Mobility Fund support be designated as wireless ETCs covering the 
relevant geographic area prior to participating in a Mobility Fund 
auction. The Commission seeks comment on the proposal.
    43. Alternatively, the Commission seeks comment on allowing 
entities that have applied for designation as ETCs in the relevant area 
to participate in a Mobility Fund auction. Pursuant to 47 U.S.C. 
214(e)(1) and 47 CFR 54.101(b), an ETC is obligated to provide all of 
the supported services defined in 47 CFR 54.101(a) throughout the area 
for which it has been designated an ETC. Therefore, an ETC must be 
designated (or have applied for designation) with respect to an area 
that includes area(s) on which it wishes to receive Mobility Fund 
support. Moreover, a recipient of Mobility Fund support will remain 
obligated to provide supported services throughout the area for which 
it is designated an ETC if that area is larger than the areas for which 
it receives Mobility Fund support. Commenting parties should discuss 
whether the potential gain by allowing a larger pool of applicants 
offsets any potential abuse and delay that could result if a non-ETC 
were to bid and win the auction, but then be deemed ineligible for 
support.
    44. In addition, the Commission seeks comment on the ETC 
designation requirements of 47 U.S.C. 214(e). For example, ETCs must 
offer supported services throughout the service area for which the 
designation is received. The statute also provides that when states 
handle the ETC designation, the states also designate the service 
areas. Section 214 permits this Commission, with respect to interstate 
services, to designate ETCs and service areas if no common carrier will 
provide the services that are supported by Federal universal service 
support mechanisms under 47 U.S.C. 254(c) to an unserved community or 
any portion thereof that requests such service. The statute also 
provides that in states where the state commission lacks jurisdiction 
over the carrier seeking ETC status, which is sometimes the case for 
wireless carriers, this Commission designates the ETC and the service 
area. How can the Commission best interpret these and all the 
interrelated requirements of 47 U.S.C. 214(e) to achieve the purposes 
of the Mobility Fund?
2. Access to Spectrum To Provide Required Services
    45. In order to participate in a Mobility Fund auction and receive 
support, the Commission proposes that an entity be required to hold, or 
otherwise have access to, a Commission authorization to provide service 
in a frequency band that can support 3G or better services. The 
Commission seeks comment on both the access to, and the type of, 
spectrum required for Mobility Fund eligibility.
    46. As an initial matter, the Commission proposes that entities 
currently licensed to operate in identified unserved blocks should be 
deemed to meet this requirement. The Commission also seeks comment on 
whether entities other than current licensees should be eligible to 
participate if they have either applied for a Commission license or 
have entered into an agreement to acquire a license through an 
assignment or transfer of control. Therefore, the Commission seeks 
comment on whether a binding agreement to acquire the necessary 
authorization to use spectrum should be sufficient for Mobility Fund 
eligibility.
    47. The Commission also seeks comment on using leased spectrum to 
provide the service that would meet the parameters of the Mobility 
Fund. Commenters supporting Mobility Fund eligibility for entities 
using leased spectrum should indicate whether the Commission should 
impose requirements regarding the terms of spectrum leasing 
arrangements that will confer eligibility, such as the minimum duration 
of the arrangement, the amount of spectrum, etc. Moreover, the 
Commission asks whether the entity must currently be leasing the 
spectrum at the time of the Mobility Fund's short-form or long-form 
application deadline or whether a signed agreement is sufficient.
    48. The Commission proposes further that entities seeking to 
receive support from the Mobility Fund have access to spectrum (and 
sufficient bandwidth) capable of supporting the required services, such 
as spectrum for use in Advanced Wireless Services, the 700 MHz Band, 
Broadband Radio Services, broadband PCS or cellular bands. Should the 
Commission limit eligibility

[[Page 69382]]

based on access to specific spectrum suitable for providing the 
required services? If so, what spectrum should the Commission consider 
appropriate? Do the technical rules and configuration for Specialized 
Mobile Radio frequencies permit 3G service? The Commission also seeks 
comment on whether, with or without regard to requiring access to 
particular frequencies, the Commission should require that parties 
seeking support have access to a minimum amount of bandwidth and 
whether only paired blocks of bandwidth should be deemed sufficient.
3. Certification of Financial and Technical Capability
    49. The Commission also proposes that each party seeking to receive 
support from the Mobility Fund be required to certify that it is 
financially and technically capable of providing 3G or better service 
within the specified timeframe in the geographic areas for which it 
seeks support. The Commission seeks comment on how best to determine if 
an entity has sufficient resources to satisfy the Mobility Fund 
obligations. The Commission likewise seeks comment on certification 
regarding an entity's technical capacity. Does the Commission need to 
be specific as to the minimum showing required to make the 
certification? Or can the Commission rely on its post-auction review 
and performance requirements?
4. Other Qualifications
    50. In addition to the three minimum qualifications (ETC 
designation, access to spectrum for 3G or better services, and 
certifications regarding financial and technical capabilities), the 
Commission seeks comment on other eligibility requirements for entities 
seeking to receive support from the Mobility Fund. Parties providing 
suggestions should be specific and explain how the eligibility 
requirements would serve the ultimate goals of the Mobility Fund. At 
the same time that the Commission establishes minimum qualifications 
consistent with the goals of the Mobility Fund, are there ways the 
Commission can encourage participation by the widest possible range of 
qualified parties? For example, are there any steps the Commission 
should take to encourage smaller eligible parties to participate in the 
bidding for support?

E. Reverse Auction Mechanism

    51. At this stage in the development of the Mobility Fund, the 
Commission proposes rules for and seeks comment on certain auction 
design elements that will establish a general framework for the 
proposed reverse auction mechanism. Accordingly, as detailed in 
Appendix A of the Mobility Fund Notice of Proposed Rulemaking, the 
Commission proposes rules that will provide the Commission, the 
Wireless Bureau, and the Wireline Competition Bureau (Wireline Bureau) 
with some flexibility to choose among various methods of conducting the 
bidding and procedures to use during the bidding. These rules are 
generally modeled on the Commission rules that govern the design and 
conduct of its spectrum license auctions.
    52. While the rules the Commission proposes establish the framework 
for conducting a Mobility Fund auction, they do not necessarily by 
themselves establish the specific detailed procedures that will govern 
any auction process. The Commission envisions that it will develop and 
provide notice to potential bidders of detailed auction procedures 
prior to conducting a Mobility Fund auction. This will promote the use 
of specific procedures for an auction that take into account the 
particular program requirements and auction rules established in this 
proceeding. Specifically, the Commission proposes that, after 
establishing program and auction rules for the Mobility Fund in this 
proceeding, it will release a Public Notice announcing an auction date, 
identifying areas eligible for support through the auction, and seeking 
comment on specific detailed auction procedures to be used, consistent 
with those rules. The Commission further proposes that it will release 
a subsequent Public Notice specifying the auction procedures, including 
dates, deadlines, and other details of the application and bidding 
process. Consistent with the Commission's existing practice for 
spectrum auctions, the Commission delegates authority jointly to the 
Wireless and Wireline Bureaus to establish as outlined here, through 
public notices, the necessary detailed auction procedures prior to a 
Mobility Fund auction, and to take all other actions needed to conduct 
any such auction. The Commission seeks comment on this proposal.
1. Basic Auction Design
    53. A reverse auction, in which potential providers or sellers of a 
defined service or other benefit compete to provide it at the lowest 
price, can be a relatively quick, simple, and transparent method of 
selecting parties that will provide a benefit at the lowest price and 
of setting the price those parties should be paid. Here, the Commission 
proposes general rules for a Mobility Fund reverse auction including 
some other aspects of the auction design and process that must be 
considered before actually conducting an auction. As a threshold 
matter, although there are a number of formats that could be used for 
reverse auctions, including both multiple-round and single-round 
formats, the Commission proposes to use a single-round reverse auction 
to award Mobility Fund support. The Commission proposes a single-round 
auction because it is simple and because the Commission expects bidders 
for Mobility Fund support to be well acquainted with the costs 
associated with providing access to advanced mobile wireless services 
in the areas they proposes to cover, and to bid accordingly.
2. Application Process
    54. The Commission proposes to use a two-stage application process 
similar to the one the Commission uses in spectrum license auctions. 
Under this proposal, the Commission would require a pre-auction short-
form application from entities interested in participating in a 
Mobility Fund auction. After the auction, the Commission would conduct 
a more extensive review of the winning bidders' qualifications through 
long-form applications. The Commission envisions that both applications 
would be filed electronically, in a process similar to that used for 
spectrum license auctions.
    55. The Commission proposes that, in the short-form application, 
potential bidders provide basic ownership information and certify as to 
their compliance with the eligibility requirements for obtaining 
Mobility Fund support. Specifically, the Commission proposes that an 
applicant would need to provide information about its ownership similar 
to the Part 1 competitive bidding ownership rule for spectrum auctions, 
47 CFR 1.2112. This information will establish the identity of 
applicants and provide information that will aid in ensuring compliance 
with and enforcement of Mobility Fund auction and program rules. Also, 
a potential bidder would need to certify its qualifications to receive 
Mobility Fund support, including providing its ETC designation status 
and information regarding its access to adequate and appropriate 
spectrum. Finally, the Commission proposes that applicants be required 
to certify that they have and will comply with all rules for Mobility 
Fund competitive bidding. The Commission

[[Page 69383]]

seeks comment on these proposed short-form application requirements.
    56. In addition, the Commission seeks comment on whether the 
Commission should require applicants to identify in their short-form 
applications the specific census tracts with unserved blocks on which 
they may wish to bid and provide service. As in the Commission's 
spectrum auctions, the Commission would not necessarily require a bid 
on each census tract selected in an applicant's short-form application. 
However, the availability of this information could be helpful in 
ensuring compliance with the Commission's auction rules. The Commission 
seeks comment on this and on any other information that the Commission 
should require of applicants in the pre-auction stage that would help 
ensure a quick and reliable application process.
    57. The Commission proposes that applications to participate in a 
Mobility Fund auction should be subject to review for completeness and 
compliance with its rules, and envisions a process similar to that used 
in spectrum license auctions. Specifically, after the application 
deadline, Commission staff would review the short-form applications, 
and once review is complete, the Commission would release a public 
notice indicating which short-form applications are deemed acceptable 
and which are deemed incomplete. Applicants whose short-form 
applications were deemed incomplete would be given a limited 
opportunity to cure defects and to resubmit correct applications. As 
with spectrum license auctions, applicants would only be able to make 
minor modifications to their short-form applications. Major amendments 
would make the applicant ineligible to bid. Once the Commission staff 
reviews the resubmitted applications, the Commission would release a 
second public notice designating the applicants that have qualified to 
participate in the Mobility Fund auction. The Commission seeks comment 
on adopting this application process in order to qualify entities to 
participate in a Mobility Fund auction.
3. Bidding Process
    58. The Commission proposes to conduct a single-round reverse 
auction to identify those applicants that will receive Mobility Fund 
support and the amount of support they will receive, subject to post-
auction processing requirements applicable to winning bidders. The 
Commission seeks comment on aspects of the bidding process for any 
Mobility Fund auction, so that potential bidders will understand how 
bids may be submitted, what bids will be acceptable, and how the 
auction mechanism will determine winning bidders.
    59. Based on the Commission's proposal to award support to bidders 
that will deploy service in unserved census blocks at the least per-
unit cost to the Mobility Fund, the Commission proposes that bids for 
Mobility Fund support would state the dollar amount of support sought 
per each unit associated with the unserved area(s) in those census 
tracts covered by the specific bid submitted. In addition, based on its 
proposal to award support to only one provider per area, the Commission 
proposes that a Mobility Fund auction would select at most one winning 
bidder per census tract. The Commission proposes that after bidding 
closes, in order to select winning bidders, the auction mechanism will 
rank bids based on the per-unit bids from lowest to highest and 
calculate the running sum represented by those bids and the number of 
units in the unserved areas covered by those bids. The Commission also 
proposes that if there are any identical bids--in the same per-unit 
amounts to cover the same tract or tracts, submitted by different 
bidders--that only one such bid, chosen randomly, be considered in the 
ranking.
    60. Under these proposals, the auction would identify winning 
bidders starting with the bidder making the lowest per-unit bid and 
continue to the bidders with the next lowest per-unit bids in turn, 
provided that support had not already been assigned for that census 
tract, so long as the running sum based on the units in the identified 
unserved areas covered by the bids does not exceed the available 
monies.
    61. Maximum bids and reserve prices. The Commission proposes a rule 
to provide the Commission with discretion to establish maximum 
acceptable per-unit bid amounts for a Mobility Fund auction. The 
Commission also proposes that it may, prior to the auction, establish 
reserve amounts, separate and apart from any maximum opening bids, and 
may elect whether or not to disclose those reserves.
    62. Aggregating service areas and package bidding. The Commission 
proposes a rule to provide generally that the Commission shall have 
discretion to establish bidding procedures for any Mobility Fund 
auction that permit bidders to submit bids on packages of tracts, so 
that their bids may take into account scale and other essential 
efficiencies that tract-by-tract bidding may not permit. If a bidder 
were awarded support based on a package bid, it would still be required 
to meet the performance requirements for each census tract in the 
package.
    63. The Commission seeks comment generally on the use of package 
bidding. The Commission proposes that specific procedures for package 
bidding be among those determined as part of the process of 
establishing the detailed procedures for a Mobility Fund auction. The 
Commission expects that proposals for such procedures would consider 
how to implement package bidding consistent with its proposal to award 
support to at most one provider in a census tract, without allowing 
geographic overlaps among packages to disqualify desirable bids. For 
this purpose, proposals might include limited package bidding, e.g., 
permitting only predefined non-overlapping packages, permitting bidders 
to submit package bids on geographically adjacent census tracts, and/or 
the possibility of requiring that bidders submitting package bids also 
submit separate bids on the component tracts.
    64. Refinements to the selection mechanism to address limited 
available funds. The auction would identify winning bidders so long as 
the running sum of support represented by the winning bids does not 
exceed the monies to be made available in a Mobility Fund auction. 
However, there would likely be monies remaining after identifying the 
last lowest per-unit bid that does not exceed the funds available. The 
Commission proposes that the Commission's rules should provide it with 
discretion to establish procedures in the pre-auction process by which 
to identify winning bidder(s) for such remaining funds, e.g., by 
continuing to consider bids in order of per-unit bid amount while 
skipping bids that would require more support than is available, or by 
not identifying winning bidder(s) for the remaining funds and offering 
such funds in a subsequent auction. In exercising this discretion, the 
Commission must balance the advantages of assigning Mobility Fund 
support quickly and transparently with any disadvantages from 
supporting less cost-effective per-unit bids.
    65. The Commission also proposes that, in the pre-auction process, 
it will determine procedures to address a situation where there are two 
or more bids for the same per-unit amount but for different areas (tied 
bids) and remaining funds are insufficient to satisfy all of the tied 
bids. Specifically, the Commission proposes a rule that would give it 
the discretion to identify winning bidders among such tied bids by 
awarding support to that combination of tied bids that would

[[Page 69384]]

most nearly exhaust the available funds, by ranking the tied bids to 
establish an order in which they would be awarded based on remaining 
available funds, or by declining to select winning bidder(s) for the 
remaining funds and offering such funds in a subsequent auction.
    66. The Commission seeks comment on these proposals for developing 
procedures to address the possibility that funds will remain after the 
auction has identified the last lowest per-unit bid that does not 
exceed the funds available through the auction. The Commission asks 
commenters to address the relative advantages of any suggested 
approaches and on other options that may later be considered when the 
Commission develops specific auction procedures for a Mobility Fund 
auction.
    67. Withdrawn bids. The Commission has discretion, in developing 
procedures for its spectrum license auctions, to provide bidders 
limited ability to withdraw provisionally winning bids before the close 
of an auction. While here the Commission proposes that the Wireless and 
Wireline Bureaus be delegated authority to determine any such 
procedures in the pre-auction process, the Commission would not expect 
that the Bureaus would consider permitting any bids to be withdrawn or 
removed from consideration after the close of bidding in a single-round 
Mobility Fund auction.
    68. In spectrum license auctions, the Commission permits bid 
withdrawals in certain circumstances so that bidders can better manage 
their license aggregation strategies. The Commission does not believe 
that aggregation issues are of comparable importance under the Mobility 
Fund, which targets support to particular hard-to-reach areas. Further, 
the Commission believes that permitting bids to be withdrawn after the 
mechanism has selected winning bidders would unduly disrupt the prompt 
and smooth distribution of support.
    69. The Commission expects that bidders will consider carefully 
expected costs and the characteristics of the geographic areas they 
propose to serve if offered Mobility Fund support and bid accordingly, 
so that if offered support, they can proceed expeditiously to file 
their long form applications and comply with post-auction procedures.
4. Information and Competition
    70. In the interests of fairness and maximizing competition in the 
auction process, the Commission proposes to prohibit applicants 
competing for support in the auction from communicating with one 
another regarding the substance of their bids or bidding strategies. 
Information available in short-form applications or in the auction 
process itself might also be used to attempt to reduce competition. 
Accordingly, for spectrum auctions, the Commission adopted rules 
providing it with discretion to limit public disclosure of auction-
related information, for example by keeping non-public during the 
auction process certain information from applications and/or the 
bidding. The Commission proposes to adopt similar rules for a Mobility 
Fund reverse auction and seeks comment on this proposal.
5. Auction Cancellation
    71. As with the Commission's spectrum license auctions, the 
Commission proposes that the Commission's rules provide it with the 
discretion to delay, suspend, or cancel bidding before or after a 
reverse auction begins under a variety of circumstances, including 
natural disasters, technical failures, administrative necessity, or any 
other reason that affects the fair and efficient conduct of the 
bidding. The Commission seeks comment on this proposal.

F. Post-Auction Process, Administration, Management, and Oversight of 
the Mobility Fund

1. Administration of the Mobility Fund
    72. The Universal Service Administrative Company (USAC), a 
subsidiary of the National Exchange Carrier Association (NECA), is the 
private not-for-profit corporation created to serve as the 
Administrator of the USF under the Commission's direction. The 
Commission appointed USAC the permanent Administrator of all of the 
federal universal service support mechanisms. USAC is responsible for 
performing numerous functions including, but not limited to, billing 
USF contributors, collecting USF contributions, disbursing funds, 
recovering improperly disbursed funds, processing appeals of funding 
decisions, submitting periodic reports to the Commission, maintaining 
accounting records, conducting audits of contributors and 
beneficiaries, and providing outreach to interested parties. See 47 CFR 
54.702(b) through (m), 54.711, 54.715. USAC administers the USF in 
accordance with the Commission's rules and orders. The Commission 
provides USAC with oral and written guidance, as well as regulation 
through its rulemaking process. Because the Mobility Fund will be a 
part of the USF high cost support program, the Commission proposes to 
direct USAC to administer the Mobility Fund in accordance with the 
applicable terms of its current appointment as administrator, and 
subject to all existing Commission rules and orders applicable to the 
USF Administrator. The Commission seeks comment on whether there are 
any specific rules or orders currently applicable to USAC's 
administration of the USF that should not apply specifically to USAC's 
administration of the Mobility Fund, and whether there are new or 
different requirements the Commission should apply to USAC's 
administration of the Mobility Fund.
    73. In 2008, the Commission entered into a Memorandum of 
Understanding (MOU) with USAC to facilitate efficient management and 
oversight of the Commission's federal universal service program. If the 
Commission establishes a Mobility Fund, the Commission anticipates that 
Commission staff would work with USAC outside the context of this 
rulemaking proceeding to revise the MOU as necessary for efficient 
administration of the Mobility Fund. The Commission nevertheless 
solicits input from interested parties on whether there are specific 
aspects of the MOU that the Commission should consider revising based 
on the specific purpose and goals of the Mobility Fund. For example, 
under the MOU, the Commission's Wireline Bureau is the USF 
Administrator's primary point of contact regarding USF policy 
questions, including without limitation, questions regarding the 
applicability of the Commission's USF rules, orders, and directives, 
unless otherwise specified in such requirements. Because the Mobility 
Fund would be established to distribute support for the deployment of 
terrestrial mobile wireless networks providing 3G service, the 
Commission seeks comment on whether it would be appropriate to add the 
Wireless Bureau as a point of contact for the USF Administrator for 
policy questions pertaining to the Mobility Fund.
2. Post-Auction Application Process
    74. The Commission proposes a two-stage application process. An 
applicant for Mobility Fund support would file a short-form application 
to participate in bidding, and the information on that application 
would be reviewed as part of the Commission's initial screening process 
to determine the applicant's eligibility for support based on its ETC 
status and its other qualifications under the Mobility Fund auction 
rules. After the conclusion of the auction, winning bidders would file 
long-form applications to qualify for and receive

[[Page 69385]]

Mobility Fund support. Those applications would be subject to an in-
depth review of the applicants' eligibility and qualifications to 
receive USF support. The Commission seeks comment on each step of the 
post-auction application process. To the extent a commenter disagrees 
with a particular aspect of the proposed process, the Commission asks 
them to identify that with specificity and propose an alternative.
a. Post-Auction Application
    75. The Commission proposes that, after bidding has ended, the 
Commission will identify and notify the winning bidders and declare the 
bidding closed. Unless otherwise specified by public notice, within 10 
business days after being notified that it is a winning bidder for 
Mobility Fund support, a winning bidder would be required to submit a 
long-form application pursuant to the program requirements governing 
the Mobility Fund. The Commission seeks comment on the specific 
information and showings that should be required of winning bidders on 
the long-form application before they can be certified to receive 
support from the Mobility Fund and before actual disbursements from the 
Mobility Fund can be made to them. The Commission proposes that a 
winning bidder would be required to provide detailed information 
showing that it is legally, technically and financially qualified to 
receive support from the Mobility Fund. The Commission also proposes 
that, if the Commission were to adopt a rule allowing an applicant to 
participate in the auction while its ETC designation status is pending, 
the applicant would be required in its long-form application to 
demonstrate its ETC status by, for example, providing a copy of its ETC 
designation order from the relevant state PUC. The Commission seeks 
comment on these proposals and on the specific information that winning 
bidders should be required to provide to make the required showings.
    76. The Commission also seeks comment on the procedures that it 
should apply to a winning bidder that fails to submit a long-form 
application by the established deadline. Imposition of some deterrent 
measure, in addition to dismissal of the late-filed application, could 
deter auction participants from submitting insincere bids and serve as 
an incentive for winning bidders to timely submit their long-form 
applications, enabling prompt application review and allowing 
expeditious distribution of support. With respect to the disposition of 
the Mobility Fund support for which a winning bidder does not timely 
file a long-form application, the Commission proposes that the funds 
that would have been provided to such an applicant be offered in a 
subsequent auction. The Commission seeks comment on this proposal.
b. Ownership Disclosure
    77. The Commission discusses a proposed requirement for auction 
participants to disclose certain ownership information as an aid to 
bidders by providing them with information about their auction 
competitors and alerting them to the entities that are subject to its 
rules concerning prohibited communications. The Commission proposes 
that in the post-auction application phase, an applicant would also be 
required to provide additional detailed information about its ownership 
and control. The Commission seeks comment on what ownership information 
should be required of applicants for Mobility Fund support. Given that 
wireless providers often create subsidiaries or related entities for 
specific licenses or other purposes, detailed ownership information may 
be necessary to ensure that applicants claiming ETC status in fact 
qualify for such status. In addition to providing information on an 
applicant's officers and directors, should the Commission require 
disclosure of an applicant's controlling interests that is, those 
individuals and entities with either de jure or de facto control of the 
applicant? Applicants for authorizations to provide wireless services 
are required to disclose ownership interests in the applicant of ten 
percent or more. What threshold level of ownership interest in an 
applicant for Mobility Fund support should be required to be reported 
on the applicant's long-form application?
    78. The Commission also seeks comment on the extent to which the 
Commission can minimize the reporting burden on winning bidders by 
allowing them to use ownership information stored in existing 
Commission databases and either update the ownership information in the 
database or certify that there have been no changes in the ownership 
information since it was last submitted to the Commission.
c. Project Construction
    79. The Commission seeks comment on the level of information an 
applicant for Mobility Fund support should be required to provide 
regarding the network it will deploy with that support. The Commission 
proposes that an applicant be required to include in its long-form 
application a detailed project description that describes the network, 
identifies the proposed technology, demonstrates that the project is 
technically feasible, and describes each specific development phase of 
the project (e.g., network design phase, construction period, 
deployment and maintenance period). To ensure that projects proceed to 
completion, the Commission proposes that a participant be required to 
submit a project schedule that identifies the following project 
milestones: start and end date for network design; start and end date 
for drafting and posting requests for proposal (RFPs); start and end 
date for selecting vendors and negotiating contracts; start date for 
commencing construction and end date for completing construction. The 
Commission also proposes that a participant's project schedule identify 
the dates by which it will meet applicable requirements to receive the 
installments of Mobility Fund support for which it subsequently 
qualifies.
d. Guarantee of Performance
    80. The Commission also seeks comment on whether a winning bidder 
should be required to post financial security as a condition to 
receiving Mobility Fund support to ensure that it has committed 
sufficient financial resources to meeting the program obligations 
associated with such support under the Commission's rules. In 
particular, the Commission seeks comment on whether all winning bidders 
should be required to obtain an irrevocable standby letter of credit 
(LOC) no later than the date on which their long-form applications are 
submitted to the Commission. The Commission also seeks comment on 
whether alternatively, only certain applicants that do not meet 
specified criteria should be subject to this requirement, and if so, 
what those criteria should be. For example, should the Commission 
establish criteria, based on bond rating, market capitalization, or 
debt/equity ratios (combined with minimum levels of available capital) 
that, if not met, would make an LOC necessary? Would such a requirement 
unnecessarily preclude providers that otherwise might be able to 
satisfy the obligations of the Mobility Fund from seeking to 
participate?
    81. The Commission seeks comment on how to determine the amount of 
the LOC necessary to ensure uninterrupted construction of a network, as 
well as the length of time that the LOC should remain in place. For 
example, the amount of the LOC could be determined on the basis of an 
estimated annual

[[Page 69386]]

budget that could accompany the build-out schedule required as part of 
the long-form applications, or the Commission could simply require a 
specific dollar figure for the LOC in an amount that would ensure that 
construction could proceed for a given amount of time. Should the 
amount of an initial LOC, or a subsequent LOC, also ensure the 
continuing maintenance and operation of the network? Under what 
circumstances should the participant be required to replenish the LOC?
    82. The Commission also seeks comment on what events would 
constitute a default by the recipient of Mobility Fund support that 
would allow a draw on the entire remaining amount of the LOC. Further, 
in the event of bankruptcy, the LOC should be insulated from claims 
other than the draws authorized for the construction and operation of 
the network. The Commission seeks comment on provisions it might adopt 
to provide safeguards to this effect. For example, the Commission could 
require as a condition of receiving Mobility Fund support, that a 
winning bidder first provide the Commission with a legal opinion letter 
that would state, subject only to customary assumptions, limitations 
and qualifications, that in a proceeding under Title 11 of the United 
States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code), in which the 
winning bidder is the debtor, the bankruptcy court would not treat the 
LOC or proceeds of the LOC as property of the winning bidder's 
bankruptcy estate (or the bankruptcy estate of any other bidder-related 
entity requesting the issuance of the LOC) under 11 U.S.C. 541.
    83. As an alternative to an LOC, the Commission seeks comment on 
whether the Commission should require a winning bidder to guarantee 
completion of construction by obtaining a performance bond covering the 
cost of network construction and operation. Such a requirement would be 
similar to that which the Commission has imposed as a condition on 
satellite licenses. The Commission also seeks comment on the types of 
requirements that bond issuers might impose and whether such 
requirements would be so unduly burdensome as to restrict the number of 
carriers that might be able to bid for Mobility Fund support. The 
Commission also seeks comment on the relative merits of performance 
bonds and LOCs and the extent to which performance bonds, in the event 
of the bankruptcy of the recipient of Mobility Fund support, might 
frustrate the Commission's goal of ensuring timely build-out of the 
network. The Commission also seeks comment on whether there are other 
protections that the Commission should reasonably seek to ascertain the 
financial viability of the winning bidder, and ensure construction of 
the network and its subsequent operation. For instance, are there ways 
that the Commission can facilitate timely build-out of the network in 
areas where recipients of Mobility Fund support enter bankruptcy before 
completing construction? Are there steps the Commission could take to 
facilitate completion of the network by another service provider?
e. Other Funding Restrictions
    84. The Commission seeks comment on whether participants who 
receive support from the Mobility Fund should be barred from receiving 
funds for the same activity under any other federal program, including, 
for example, federal grants, awards, or loans.
f. Certifications
    85. Finally, the Commission seeks comment on the certifications 
that should be required of a winning bidder to receive Mobility Fund 
support. The Commission proposes that prior to receiving Mobility Fund 
support, an applicant be required to certify to the availability of 
funds for all project costs that exceed the amount of support to be 
received from the Mobility Fund and certify that they will comply with 
all program requirements. Should the Commission also require 
certifications regarding the provision of service at rates reasonably 
comparable to those offered in urban areas? The Commission has sought 
comment on the definition of these terms for these purposes in its 
discussion of performance requirements.
3. Disbursing Support
a. Support Payments
    86. The Commission seeks comment on the following proposal to 
provide Mobility Fund support in installments, and on whether this 
proposal strikes the appropriate balance between advancing funds to 
expand service and assuring that service is expanded.
    87. The Commission proposes that Mobility Fund support be provided 
in three installments. Each party receiving support would be eligible 
for \1/3\ of the amount of support associated with any specific census 
tract once its application for support is granted. A party would 
receive the second third of its total support when it files a report 
demonstrating coverage of 50 percent of the population associated with 
the census block(s) deemed unserved that are within that census tract. 
A party would receive the final third of the support upon filing a 
report that demonstrates coverage of 100 percent of the resident 
population in the unserved census block(s) within the census tract. 
Alternatively, if the Commission establishes a coverage requirement of 
less than 100 percent, the Commission proposes that a party may file a 
report that certifies that, although less than 100 percent of the 
originally unserved resident population is now covered, at least the 
required percent of that population is covered and no further coverage 
expansion is intended. In that case, the party's final payment would be 
the difference between the total amount of support based on the 
population of unserved census blocks actually covered, i.e., a figure 
between the required percentage and 100 percent of the resident 
population, and any support previously received. The Commission seeks 
comment on this proposal.
    88. 47 U.S.C. 254(e) requires that a carrier shall use support only 
for the provision, maintenance, and upgrading of facilities and 
services for which the support is intended. How should the Commission 
ensure that support from the Mobility Fund is used for the purposes in 
which it was intended as required by 47 U.S.C. 254(e)? The Commission 
seeks comment on requiring additional information from the recipients 
concerning how the funds were used and specifically what information 
should be submitted.
b. Support Liabilities
    89. The Commission seeks comment on the extent to which parties 
qualifying to receive support should be liable in the event that they 
are unable to expand service pursuant to the goals of the Mobility 
Fund. The Commission proposes that applicants qualifying for support be 
able to receive initial payments in advance of providing service in 
order to finance the expansion of service. Parties receiving such 
support should be liable to repay the support if they fail to provide 
the intended service. Should they be subject to additional liabilities 
and/or security requirements (such as letters of credit or performance 
bonds) in order to provide them with proper incentives to perform and 
to protect the Mobility Fund in case they fail to perform as required? 
Should the Commission require affiliates, such as parent corporations 
or entities within the same larger enterprise, to be responsible if the 
recipient fails to meet its obligations? Is there a level of service 
short of the full service sought that ought to offset the supported 
parties'

[[Page 69387]]

liabilities? Are any special provisions needed in the Commission's 
rules to address the possibility that a party qualifying for support 
from the Mobility Fund might enter bankruptcy prior to providing all 
the coverage necessary to receive support? Are there measures the 
Commission can take to limit the possibility that Mobility Fund support 
becomes an asset in such party's bankruptcy estate for an extended 
period of time instead of being used promptly to further the goals of 
the Mobility Fund? The Commission seeks comment on these issues.
4. Audits and Record Retention
    90. The Commission seeks comment on the rules that the Commission 
should establish to impose certain internal control requirements on 
program participants to facilitate program oversight. The Commission 
has taken action in previous proceedings to detect and deter waste, 
fraud, and abuse of the USF.
a. Audits
    91. Audits are an important tool for the Commission and the USF 
Administrator to ensure program integrity and to detect and deter 
waste, fraud, and abuse. Commission rules authorize the Administrator 
to conduct audits of contributors to the universal service support 
mechanisms. The 2008 FCC-USAC MOU requires the USF Administrator to 
conduct audits, including audits of USF beneficiaries, in accordance 
with generally accepted government auditing standards, as required by 
47 CFR 54.702(n). USAC's audit program consists of audits by USAC's 
internal audit division staff as well as audits by independent auditors 
under contract with USAC.
    92. The Commission proposes that Mobility Fund beneficiaries, like 
beneficiaries of other USF programs, be subject to assessments as 
required under the Improper Payments Information Act of 2002 and random 
compliance audits to ensure compliance with program rules and orders. 
The Commission seeks comment on whether random compliance audits of 
Mobility Fund beneficiaries would provide adequate audit oversight of 
that program. Are there other or additional oversight measures, 
including scheduled compliance audits that would be appropriate and 
effective in detecting and deterring waste, fraud, and abuse?
b. Record Retention
    93. The Commission adopted rules establishing rigorous document 
retention requirements for USF program participants. The rules create 
additional penalties for bad actors--specifically, the Commission can 
now debar from continued participation in all USF programs, any party 
that defrauds any of the four USF disbursement programs. Consistent 
with the rules governing the Commission's existing high-cost support 
program, the Commission proposes to require recipients of Mobility Fund 
support to retain all records that they may require to demonstrate to 
auditors that the support they received was consistent with the Act and 
the Commission's rules.
    94. The Commission seeks comment on what records should at a 
minimum be included in this requirement. As an initial matter, the 
Commission proposes that the record retention requirements apply to all 
agents of the recipient, and any documentation prepared for or in 
connection with the recipient's Mobility Fund support. The Commission 
further proposes that beneficiaries be required to make all such 
documents and records that pertain to them, contractors, and 
consultants working on behalf of the beneficiaries, available to the 
Commission's Office of Managing Director, Wireless Bureau, Wireline 
Bureau, Office of Inspector General, and the USF Administrator, and 
their auditors.
    95. The Commission proposes that a five-year period for record 
retention, consistent with the rules the Commission adopted for those 
receiving other universal service high cost support, is a reasonable 
standard that will serve the public interest. To the extent other rules 
or any other law require or necessitate documents be kept for longer 
periods of time, the Commission does not alter, amend, or supplant such 
rule or law. High cost program recipients would be required to keep 
documents for such longer periods of time as required or necessary 
under such other rules or law and make such documents available to the 
Commission and USAC. The Commission seeks comment on this proposal.
5. Delegation of Authority
    96. In order to implement the various requirements the Commission 
adopts for applicants for and recipients of Mobility Fund support, the 
Commission proposes to delegate jointly to the Wireless Bureau and 
Wireline Bureau the authority to determine the method and procedures 
for applicants and recipients to submit the appropriate and relevant 
documents and information. This delegation of authority to both bureaus 
would authorize modification, as necessary, of existing FCC forms and 
the creation, if necessary, of new FCC forms to implement the rules the 
Commission adopt in this proceeding.

II. Procedural Matters

A. Filing Requirements

    97. Ex Parte Rules. The Mobility Fund Notice of Proposed Rulemaking 
will be treated as a permit-but-disclose proceeding subject to the 
permit-but-disclose requirements under 47 CFR 1.1206(b). Ex parte 
presentations are permissible if disclosed in accordance with 
Commission rules, except during the Sunshine Agenda period when 
presentations, ex parte or otherwise, are generally prohibited. Persons 
making oral ex parte presentations are reminded that a memorandum 
summarizing a presentation must contain a summary of the substance of 
the presentation and not merely a listing of the subjects discussed. 
More than a one- or two-sentence description of the views and arguments 
presented is generally required. Additional rules pertaining to oral 
and written presentations are set forth in 47 CFR 1.1206(b).

B. Initial Regulatory Flexibility Analysis

    98. 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 of 
the policies and rules proposed in the Mobility Fund Notice of Proposed 
Rulemaking. Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments set forth in this Federal Register 
summary--that is, the same dates as the comment and reply deadlines for 
the Mobility Fund Notice of Proposed Rulemaking. The Commission will 
send a copy of the Mobility Fund Notice of Proposed Rulemaking, 
including the IRFA to the Chief Counsel for Advocacy of the Small 
Business Administration.
1. Need for, and Objectives of, the Proposed Rules
    99. The Mobility Fund Notice of Proposed Rulemaking seeks comment 
on creation of a new Mobility Fund within the high-cost mechanism of 
the federal universal service program. The purpose of this Mobility 
Fund is to significantly improve coverage of current-generation or 
better mobile voice and Internet service for consumers in areas where 
such coverage is currently missing, and to do so by supporting private 
investment.
    100. The Mobility Fund is one of a set of initiatives to promote 
deployment of broadband and mobile services in the

[[Page 69388]]

United States. In the Mobility Fund Notice of Proposed Rulemaking, the 
Commission seeks comment on the creation of the Mobility Fund to 
provide an initial infusion of funds toward solving persistent gaps in 
mobile services through targeted, one-time support for the build-out of 
current- and next-generation wireless infrastructure in areas where 
these services are unavailable. This proposal represents a critical 
step in modernizing the USF.
2. Legal Basis
    101. The legal basis for the proposed rules and the Mobility Fund 
Notice of Proposed Rulemaking is contained in 47 U.S.C. 154(i), 301, 
303(c), 303(f), 303(r), 303(y), and 310, and 47 CFR 1.411.
3. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    102. The RFA directs agencies to provide a description of and, 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one which: (1) Is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the SBA.
    103. Small Businesses. Nationwide, there are a total of 
approximately 29.6 million small businesses, according to the SBA.
    104. Small Organizations. Nationwide, as of 2002, there are 
approximately 1.6 million small organizations. A ``small organization'' 
is generally ``any not-for-profit enterprise which is independently 
owned and operated and is not dominant in its field.''
    105. Small Governmental Jurisdictions. The term ``small 
governmental jurisdiction'' is defined generally as ``governments of 
cities, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' Census 
Bureau data for 2002 indicate that there were 87,525 local governmental 
jurisdictions in the United States. The Commission estimates that, of 
this total, 84,377 entities were ``small governmental jurisdictions.'' 
Thus, the Commission estimates that most governmental jurisdictions are 
small.
    106. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the Census Bureau has placed wireless firms within this new, 
broad, economic census category. Prior to that time, such firms were 
within the now-superseded categories of ``Paging'' and ``Cellular and 
Other Wireless Telecommunications.'' Under the present and prior 
categories, the SBA has deemed a wireless business to be small if it 
has 1,500 or fewer employees. Because Census Bureau data are not yet 
available for the new category, the Commission will estimate small 
business prevalence using the prior categories and associated data. For 
the category of Paging, data for 2002 show that there were 807 firms 
that operated for the entire year. Of this total, 804 firms had 
employment of 999 or fewer employees, and three firms had employment of 
1,000 employees or more. For the category of Cellular and Other 
Wireless Telecommunications, data for 2002 show that there were 1,397 
firms that operated for the entire year. Of this total, 1,378 firms had 
employment of 999 or fewer employees, and 19 firms had employment of 
1,000 employees or more. Thus, the Commission estimates that the 
majority of wireless firms are small.
    107. Auctions. Initially, the Commission notes that, as a general 
matter, the number of winning bidders that qualify as small businesses 
at the close of an auction does not necessarily represent the number of 
small businesses currently in service. Also, the Commission does not 
generally track subsequent business size unless, in the context of 
assignments or transfers, unjust enrichment issues are implicated.
    108. 2.3 GHz Wireless Communications Services. This service can be 
used for fixed, mobile, radiolocation, and digital audio broadcasting 
satellite uses. The Commission defined ``small business'' for the 
wireless communications services (WCS) auction as an entity with 
average gross revenues of $40 million for each of the three preceding 
years, and a ``very small business'' as an entity with average gross 
revenues of $15 million for each of the three preceding years. The SBA 
has approved these definitions. The Commission auctioned geographic 
area licenses in the WCS service. In the auction, which was conducted 
in 1997, there were seven bidders that won 31 licenses that qualified 
as very small business entities, and one bidder that won one license 
that qualified as a small business entity.
    109. 1670-1675 MHz Band. An auction for one license in the 1670-
1675 MHz band was conducted in 2003. The Commission defined a ``small 
business'' as an entity with attributable average annual gross revenues 
of not more than $40 million for the preceding three years and thus 
would be eligible for a 15 percent discount on its winning bid for the 
1670-1675 MHz band license. Further, the Commission defined a ``very 
small business'' as an entity with attributable average annual gross 
revenues of not more than $15 million for the preceding three years and 
thus would be eligible to receive a 25 percent discount on its winning 
bid for the 1670-1675 MHz band license. One license was awarded. The 
winning bidder was not a small entity.
    110. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite). Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees. According to Trends in 
Telephone Service data, 434 carriers reported that they were engaged in 
wireless telephony. Of these, an estimated 222 have 1,500 or fewer 
employees and 212 have more than 1,500 employees. The Commission has 
estimated that 222 of these are small under the SBA small business size 
standard.
    111. Broadband Personal Communications Services. The broadband 
personal communications services (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission has created a small business 
size standard for the C and F Blocks as an entity that has average 
gross revenues of less than $40 million in the three previous calendar 
years. For the F Block, an additional small business size standard for 
``very small business'' was added and is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. These small 
business size standards, in the context of broadband PCS auctions, have 
been approved by the SBA. No small businesses within the SBA-approved 
small business size standards bid successfully for licenses in the A 
and B Blocks. There were 90 winning bidders that qualified as small 
entities in the C Block auctions. A total of 93 ``small'' and ``very 
small'' business bidders won approximately 40 percent of the 1,479 
licenses for the D, E, and F Blocks. In 1999, the Commission 
reauctioned 155

[[Page 69389]]

C, D, E, and F Block licenses; there were 113 small business winning 
bidders.
    112. In 2001, the Commission completed the auction of 422 C and F 
Block broadband PCS licenses in Auction 35. Of the 35 winning bidders 
in this auction, 29 qualified as ``small'' or ``very small'' 
businesses. Subsequent events, concerning Auction 35, including 
judicial and agency determinations, resulted in a total of 163 C and F 
Block licenses being available for grant. In 2005, the Commission 
completed an auction of 188 C Block licenses and 21 F Block licenses in 
Auction 58. There were 24 winning bidders for 217 licenses. Of the 24 
winning bidders, 16 claimed small business status and won 156 licenses. 
In 2007, the Commission completed an auction of 33 licenses in the A, 
C, and F Blocks in Auction 71. Of the 14 winning bidders, six were 
designated entities. In 2008, the Commission completed an auction of 20 
broadband PCS licenses in the C, D, E and F Block licenses in Auction 
78.
    113. Narrowband Personal Communications Services. In 1994, the 
Commission conducted an auction for narrowband PCS licenses. A second 
auction was also conducted later in 1994. For purposes of the first two 
narrowband PCS auctions, ``small businesses'' were entities with 
average gross revenues for the prior three calendar years of $40 
million or less. Through these auctions, the Commission awarded a total 
of 41 licenses, 11 of which were obtained by four small businesses. To 
ensure meaningful participation by small business entities in future 
auctions, the Commission adopted a two-tiered small business size 
standard. A ``small business'' is an entity that, together with 
affiliates and controlling interests, has average gross revenues for 
the three preceding years of not more than $40 million. A ``very small 
business'' is an entity that, together with affiliates and controlling 
interests, has average gross revenues for the three preceding years of 
not more than $15 million. The SBA has approved these small business 
size standards. A third auction was conducted in 2001, with five 
bidders winning 317 (Metropolitan Trading Areas and nationwide) 
licenses. Three of these bidders claimed status as a small or very 
small entity and won a total of 311 licenses.
    114. Advanced Wireless Services. In 2006, the Commission conducted 
its first auction of Advanced Wireless Services licenses in the 1710-
1755 MHz and 2110-2155 MHz bands (AWS-1), designated as Auction 66. The 
Commission defined ``small business'' as an entity with attributed 
average annual gross revenues that exceeded $15 million and did not 
exceed $40 million for the preceding three years. A small business 
received a 15 percent discount on its winning bid. A ``very small 
business is defined as an entity with attributed average annual gross 
revenues that did not exceed $15 million for the preceding three years. 
A very small business received a 25 percent discount on its winning 
bid. In Auction 66, thirty-one winning bidders identified themselves as 
very small businesses and won 142 licenses. Twenty-six of the winning 
bidders identified themselves as small businesses and won 73 licenses. 
In 2008, the Commission conducted an auction of AWS-1 licenses, 
designated as Auction 78, in which it offered 35 AWS-1 licenses for 
which there were no winning bids in Auction 66. Four winning bidders 
that identified themselves as very small businesses won 17 AWS-1 
licenses; three of the winning bidders that identified themselves as a 
small business won five AWS-1 licenses.
    115. 700 MHz Band Licenses. The Commission previously adopted 
criteria for defining three groups of small businesses for purposes of 
determining their eligibility for special provisions such as bidding 
credits. The Commission defined a ``small business'' as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues not exceeding $40 million for the preceding three years. 
A ``very small business'' is defined as an entity that, together with 
its affiliates and controlling principals, has average gross revenues 
that are not more than $15 million for the preceding three years. 
Additionally, the Lower 700 MHz Band had a third category of small 
business status for Metropolitan/Rural Service Area (MSA/RSA) licenses, 
identified as ``entrepreneur'' and defined as an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues that are not more than $3 million for the preceding three 
years. The SBA approved these small size standards. The Commission 
conducted an auction in 2002 of 740 Lower 700 MHz Band licenses (one 
license in each of the 734 MSAs/RSAs and one license in each of the six 
Economic Area Groupings (EAGs)). Of the 740 licenses available for 
auction, 484 licenses were sold to 102 winning bidders. Seventy-two of 
the winning bidders claimed small business, very small business or 
entrepreneur status and won a total of 329 licenses. The Commission 
conducted a second Lower 700 MHz Band auction in 2003 that included 256 
licenses: 5 EAG licenses and 476 Cellular Market Area licenses. 
Seventeen winning bidders claimed small or very small business status 
and won 60 licenses, and nine winning bidders claimed entrepreneur 
status and won 154 licenses. In 2005, the Commission completed an 
auction of 5 licenses in the Lower 700 MHz Band, designated Auction 60. 
There were three winning bidders for five licenses. All three winning 
bidders claimed small business status.
    116. In 2007, the Commission revised the band plan for the 
commercial (including Guard Band) and public safety 700 MHz Band 
spectrum, adopted services rules, including stringent build-out 
requirements, an open platform requirement on the C Block, and a 
requirement on the D Block licensee to construct and operate a 
nationwide, interoperable wireless broadband network for public safety 
users. In 2008, the Commission conducted Auction 73 which offered all 
available, commercial 700 MHz Band licenses (1,099 licenses) for 
bidding using the Commission's standard simultaneous multiple-round 
(SMR) auction format for the A, B, D, and E Block licenses and an SMR 
auction design with hierarchical package bidding (HPB) for the C Block 
licenses. For Auction 73, a bidder with attributed average annual gross 
revenues that did not exceed $15 million for the preceding three years 
(very small business) qualified for a 25 percent discount on its 
winning bids. A bidder with attributed average annual gross revenues 
that exceeded $15 million, but did not exceed $40 million for the 
preceding three years, qualified for a 15 percent discount on its 
winning bids. At the conclusion of Auction 73, 36 winning bidders 
identifying themselves as very small businesses won 330 of the 1,090 
licenses, and 20 winning bidders identifying themselves as a small 
business won 49 of the 1,090 licenses. The provisionally winning bids 
for the A, B, C, and E Block licenses exceeded the aggregate reserve 
prices for those blocks. However, the provisionally winning bid for the 
D Block license did not meet the applicable reserve price and thus did 
not become a winning bid.
    117. 700 MHz Guard Band Licenses. For 700 MHz Guard Band licenses, 
the Commission adopted size standards for ``small businesses'' and 
``very small businesses'' for purposes of determining their eligibility 
for special provisions such as bidding credits and installment 
payments. A small business in this service is an entity that, together 
with its affiliates and controlling principals, has average gross 
revenues not exceeding $40 million for the preceding

[[Page 69390]]

three years. Additionally, a very small business is an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $15 million for the preceding 
three years. SBA approval of these definitions is not required. In 
2000, the Commission conducted an auction of 52 Major Economic Area 
(MEA) 700 MHz Guard Band licenses. Of the 104 licenses auctioned, 96 
licenses were sold to nine bidders, of which five identified themselves 
as small businesses and won a total of 26 licenses. A second auction of 
eight 700 MHz Guard Band licenses commenced and closed in 2001. Of 
three bidders, one was a small business that won two of the eight 
licenses.
    118. Specialized Mobile Radio. The Commission awards small business 
bidding credits in auctions for Specialized Mobile Radio (SMR) 
geographic area licenses in the 800 MHz and 900 MHz bands to entities 
that had revenues of no more than $15 million in each of the three 
previous calendar years. The Commission awards very small business 
bidding credits to entities that had revenues of no more than $3 
million in each of the three previous calendar years. The SBA has 
approved these small business size standards for the 800 MHz and 900 
MHz SMR Services. The Commission has held auctions for geographic area 
licenses in the 800 MHz and 900 MHz bands. The 900 MHz SMR auction was 
completed in 1996. Sixty bidders claiming that they qualified as small 
businesses under the $15 million size standard won 263 geographic area 
licenses in the 900 MHz SMR band. The 800 MHz SMR auction for the upper 
200 channels was conducted in 1997. Ten bidders claiming that they 
qualified as small businesses under the $15 million size standard won 
38 geographic area licenses for the upper 200 channels in the 800 MHz 
SMR band. A second auction for the 800 MHz band was conducted in 2002 
and included 23 BEA licenses. One bidder claiming small business status 
won five licenses.
    119. The auction of the 1,053 800 MHz SMR geographic area licenses 
for the General Category channels was conducted in 2000. Eleven bidders 
won 108 geographic area licenses for the General Category channels in 
the 800 MHz SMR band qualified as small businesses under the $15 
million size standard. In an auction completed in 2000, a total of 
2,800 Economic Area licenses in the lower 80 channels of the 800 MHz 
SMR service were awarded. Of the 22 winning bidders, 19 claimed small 
business status and won 129 licenses. Thus, combining all three 
auctions, 40 winning bidders for geographic licenses in the 800 MHz SMR 
band claimed status as small business.
    120. In addition, there are numerous incumbent site-by-site SMR 
licensees and licensees with extended implementation authorizations in 
the 800 and 900 MHz bands. The Commission does not know how many firms 
provide 800 MHz or 900 MHz geographic area SMR pursuant to extended 
implementation authorizations, nor how many of these providers have 
annual revenues of no more than $15 million. One firm has over $15 
million in revenues. In addition, the Commission does not know how many 
of these firms have 1500 or fewer employees. The Commission assumes, 
for purposes of this analysis, that all of the remaining existing 
extended implementation authorizations are held by small entities, as 
that small business size standard is approved by the SBA.
    121. Cellular Radiotelephone Service. Auction 77 was held to 
resolve one group of mutually exclusive applications for Cellular 
Radiotelephone Service licenses for unserved areas in New Mexico. 
Bidding credits for designated entities were not available in Auction 
77. In 2008, the Commission completed the closed auction of one 
unserved service area in the Cellular Radiotelephone Service, 
designated as Auction 77. Auction 77 concluded with one provisionally 
winning bid for the unserved area totaling $25,002.
    122. Private Land Mobile Radio (PLMR). PLMR systems serve an 
essential role in a range of industrial, business, land transportation, 
and public safety activities. These radios are used by companies of all 
sizes operating in all U.S. business categories, and are often used in 
support of the licensee's primary (non-telecommunications) business 
operations. For the purpose of determining whether a licensee of a PLMR 
system is a small business as defined by the SBA, the Commission uses 
the broad census category, Wireless Telecommunications Carriers (except 
Satellite). This definition provides that a small entity is any such 
entity employing no more than 1,500 persons. The Commission does not 
require PLMR licensees to disclose information about number of 
employees, so the Commission does not have information that could be 
used to determine how many PLMR licensees constitute small entities 
under this definition. The Commission notes that PLMR licensees 
generally use the licensed facilities in support of other business 
activities, and therefore, it would also be helpful to assess PLMR 
licensees under the standards applied to the particular industry 
subsector to which the licensee belongs.
    123. As of March 2010, there were 424,162 PLMR licensees operating 
921,909 transmitters in the PLMR bands below 512 MHz. The Commission 
notes that any entity engaged in a commercial activity is eligible to 
hold a PLMR license, and that any revised rules in this context could 
therefore potentially impact small entities covering a great variety of 
industries.
    124. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio System (BETRS). In the present 
context, the Commission will use the SBA's small business size standard 
applicable to Wireless Telecommunications Carriers (except Satellite), 
i.e., an entity employing no more than 1,500 persons. There are 
approximately 1,000 licensees in the Rural Radiotelephone Service, and 
the Commission estimates that there are 1,000 or fewer small entity 
licensees in the Rural Radiotelephone Service that may be affected by 
the rules and policies proposed herein.
    125. Broadband Radio Service and Educational Broadband Service. 
Broadband Radio Service systems, previously referred to as Multipoint 
Distribution Service (MDS) and Multichannel Multipoint Distribution 
Service (MMDS) systems, and ``wireless cable,'' transmit video 
programming to subscribers and provide two-way high speed data 
operations using the microwave frequencies of the Broadband Radio 
Service (BRS) and Educational Broadband Service (EBS) (previously 
referred to as the Instructional Television Fixed Service (ITFS)). In 
connection with the 1996 BRS auction, the Commission established a 
small business size standard as an entity that had annual average gross 
revenues of no more than $40 million in the previous three calendar 
years. The BRS auctions resulted in 67 successful bidders obtaining 
licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67 
auction winners, 61 met the definition of a small business. BRS also 
includes licensees of stations authorized prior to the auction. At this 
time, the Commission estimates that of the 61 small business BRS 
auction winners, 48 remain small business licensees. In addition to the 
48 small businesses that hold BTA authorizations, there are 
approximately 392 incumbent BRS

[[Page 69391]]

licensees that are considered small entities. After adding the number 
of small business auction licensees to the number of incumbent 
licensees not already counted, the Commission finds that there are 
currently approximately 440 BRS licensees that are defined as small 
businesses under either the SBA or the Commission's rules. The 
Commission has adopted three levels of bidding credits for BRS: (i) A 
bidder with attributed average annual gross revenues that exceed $15 
million and do not exceed $40 million for the preceding three years 
(small business) is eligible to receive a 15 percent discount on its 
winning bid; (ii) a bidder with attributed average annual gross 
revenues that exceed $3 million and do not exceed $15 million for the 
preceding three years (very small business) is eligible to receive a 25 
percent discount on its winning bid; and (iii) a bidder with attributed 
average annual gross revenues that do not exceed $3 million for the 
preceding three years (entrepreneur) is eligible to receive a 35 
percent discount on its winning bid. In 2009, the Commission conducted 
Auction 86, which offered 78 BRS licenses. Auction 86 concluded with 
ten bidders winning 61 licenses. Of the ten, two bidders claimed small 
business status and won 4 licenses; one bidder claimed very small 
business status and won three licenses; and two bidders claimed 
entrepreneur status and won six licenses.
    126. In addition, the SBA's Cable Television Distribution Services 
small business size standard is applicable to EBS. There are presently 
2,032 EBS licensees. All but 100 of these licenses are held by 
educational institutions. Educational institutions are included in this 
analysis as small entities. Thus, the Commission estimates that at 
least 1,932 licensees are small businesses. Since 2007, Cable 
Television Distribution Services have been defined within the broad 
economic census category of Wired Telecommunications Carriers; that 
category is defined as follows: ``This industry comprises 
establishments primarily engaged in operating and/or providing access 
to transmission facilities and infrastructure that they own and/or 
lease for the transmission of voice, data, text, sound, and video using 
wired telecommunications networks. Transmission facilities may be based 
on a single technology or a combination of technologies.'' The SBA 
defines a small business size standard for this category as any such 
firms having 1,500 or fewer employees. To gauge small business 
prevalence for these cable services the Commission must, however, use 
current census data that are based on the previous category of Cable 
and Other Program Distribution and its associated size standard; that 
size standard was: all such firms having $13.5 million or less in 
annual receipts. According to Census Bureau data for 2002, there were a 
total of 1,191 firms in this previous category that operated for the 
entire year. Of this total, 1,087 firms had annual receipts of under 
$10 million, and 43 firms had receipts of $10 million or more but less 
than $25 million. Thus, the majority of these firms can be considered 
small.
    127. Internet Service Providers (ISPs). The 2007 Economic Census 
places ISPs, whose services might include voice over Internet protocol 
(VoIP), in either of two categories, depending on whether the service 
is provided over the provider's own telecommunications connections 
(e.g., cable and DSL ISPs), or over client-supplied telecommunications 
connections (e.g., dial-up ISPs). The former are within the category of 
Wired Telecommunications Carriers, which has an SBA small business size 
standard of 1,500 or fewer employees. The latter are within the 
category of All Other Telecommunications, which has a size standard of 
annual receipts of $25 million or less. The most current Census Bureau 
data for all such firms, however, are the 2002 data for the previous 
census category called Internet Service Providers. That category had a 
small business size standard of $21 million or less in annual receipts, 
which was revised in late 2005 to $23 million. The 2002 data show that 
there were 2,529 such firms that operated for the entire year. Of 
those, 2,437 firms had annual receipts of under $10 million, and an 
additional 47 firms had receipts of between $10 million and 
$24,999,999. Consequently, the Commission estimates that the majority 
of ISP firms are small entities.
    128. The ISP industry has changed dramatically since 2002. The 2002 
data cited above may therefore include entities that no longer provide 
Internet access service and may exclude entities that now provide such 
service. To ensure that this IRFA describes the universe of small 
entities that our action might affect, the Commission discusses in turn 
several different types of entities that might be providing Internet 
access service.
    129. The Commission notes that, although the Commission has no 
specific information on the number of small entities that provide 
Internet access service over unlicensed spectrum, it includes these 
entities in the IRFA.
4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities
    130. The Mobility Fund Notice of Proposed Rulemaking seeks public 
comment on creation of a new Mobility Fund within the high-cost 
mechanism of the federal universal service program. The Mobility fund 
would make available non-recurring support to providers to deploy 3G or 
better networks where these services are not currently available. The 
proposed Mobility Fund would use market mechanisms--specifically, a 
reverse-auction--to compare all offers to provide service across the 
unserved areas eligible for participation in the Mobility Fund program.
    131. In proposing the Mobility Fund, the Commission seeks comment 
on various reporting, record-keeping, and other compliance requirements 
for the parties that will be applying for and receiving support from 
the Mobility Fund. The Mobility Fund Notice of Proposed Rulemaking 
proposes, for example, that parties interested in participating in a 
Mobility Fund auction must disclose certain information, such as their 
ownership, before participating the auction. The Mobility Fund Notice 
of Proposed Rulemaking proposes that auction winners be required to 
provide more detailed information, including project descriptions and 
timetables. The parties receiving support would be subject to certain 
reporting requirements demonstrating a certain level of network quality 
of service and reasonably comparable rates, and would need to provide, 
in annual reports, data from drive tests showing mobile transmissions 
to and from the network meeting or exceeding certain minimum standards. 
The Mobility Fund Notice of Proposed Rulemaking also proposes a five-
year record retention period, consistent with the record retention 
period for other universal service high-cost support.
    132. Because the overall design and scope of the Mobility Fund have 
not been finalized, the Commission does not have a more specific 
estimate of potential reporting, recordkeeping, and compliance burdens 
on small businesses. The Commission anticipates that commenters will 
address the reporting, record-keeping, and other compliance proposals 
made in the Mobility Fund Notice of Proposed Rulemaking, and will 
provide reliable information on any costs and burdens on small 
businesses for inclusion in the record of this proceeding.

[[Page 69392]]

5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    133. 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 or 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 any part thereof, for small 
entities.
    134. The reporting, recordkeeping, and other compliance 
requirements in this Mobility Fund Notice of Proposed Rulemaking could 
have an impact on both small and large entities. However, even though 
the impact may be more financially burdensome for smaller entities, the 
Commission believes the impact of such requirements is outweighed by 
the benefit of providing the additional USF support necessary to make 
advanced wireless services available to areas of the nation that are 
currently unserved. Further, these requirements are necessary to ensure 
that the statutory goals of 47 U.S.C. 254 are met without waste, fraud, 
or abuse.
    135. The Commission expects to consider the economic impact on 
small entities, as identified in comments filed in response to the 
Mobility Fund Notice of Proposed Rulemaking, in reaching its final 
conclusions and taking action in this proceeding.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    136. None.

List of Subjects in 47 CFR Parts 0, 1 and 54

    Administrative practice and procedure, Competitive bidding, 
Telecommunications, Reporting and recordkeeping requirements.

Federal Communications Commission.
Bulah P. Wheeler,
Deputy Manager.

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR parts 0, 1 and 54 to 
read as follows:

PART 0--COMMISSION ORGANIZATION

    1. The authority citation for part 0 continues to read as follows:

    Authority:  Sec. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155, 
225, unless otherwise noted.

    2. Amend Sec.  0.131 by adding subparagraph (r) to read as follows:


Sec.  0.131  Functions of the Bureau

* * * * *
    (r) Serves as the Commission's principal policy and administrative 
staff resource with respect to competitive bidding to distribute 
universal service support for wireless telecommunications and related 
services through the Mobility Fund. Develops, recommends and 
administers policies, programs, rules and procedures concerning 
competitive bidding to distribute universal service support for 
wireless telecommunications and related services through the Mobility 
Fund.

PART 1--PRACTICE AND PROCEDURE

    3. The authority citation for part 1 continues to read as follows:

    Authority:  15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(j), 160, 
201, 225, 303, and 309.

    4. Add Subpart AA to read as follows:

Subpart AA--Competitive Bidding for Universal Service Support 
Available through the Mobility Fund

Sec.
1.21000 Purpose.
1.21001 Participation in competitive bidding to apply for mobility 
fund support.
1.21002 Communications prohibited during the competitive bidding 
process.
1.21003 Competitive bidding process.
1.21004 Applying for mobility fund support.


Sec.  1.21000  Purpose.

    This subpart sets forth procedures for competitive bidding to 
determine the recipients of universal service support available through 
the Mobility Fund and the amount(s) of support that they may receive, 
subject to post-auction procedures established by the Commission.


Sec.  1.21001  Participation in competitive bidding to apply for 
mobility fund support.

    (a) Public notice of the application process. When conducting 
competitive bidding pursuant to this subpart, the Commission shall by 
Public Notice announce the dates and procedures for submitting 
applications to participate in related competitive bidding.
    (b) Application contents. All parties submitting applications to 
participate in competitive bidding pursuant to this subpart must 
provide the following information in their application in a form 
acceptable to the Commission.
    (1) The identity of the applicant, i.e., the party seeking Mobility 
Fund support, including any information that the Commission may require 
regarding parties that have an ownership or other interest in the 
applicant.
    (2) The identities of up to three individuals designated to bid on 
behalf of the applicant.
    (3) The identities of all real parties in interest to any 
agreements relating to the participation of the applicant in the 
competitive bidding.
    (4) Certification that the application discloses all real parties 
in interest to any agreements involving the applicant's participation 
in the competitive bidding.
    (5) Certification that the applicant, any party capable of 
controlling the applicant, and any related party with information 
regarding the applicant's planned or actual participation in the 
competitive bidding will not communicate any information regarding the 
applicant's planned or actual participation in the competitive bidding 
to any other party with an interest in any other applicant until after 
the post-auction deadline for winning bidders to submit long-form 
applications for Mobility Fund support, unless the Commission by Public 
Notice announces a different deadline.
    (6) Certification that the applicant is in compliance with any and 
all statutory or regulatory requirements for receiving universal 
service support from the Mobility Fund. The Commission may elect to 
accept as sufficient the applicant's demonstration in its application 
that the applicant will be in compliance at a point in time designated 
by the Commission.
    (7) Such additional information as the Commission may require.
    (c) Demonstration of financial qualification. The Commission may 
require as a prerequisite to participating in competitive bidding 
pursuant to this subpart that applicants demonstrate their financial 
qualifications or commitment to provide supported services by 
depositing funds, posting performance bonds, or any other means the 
Commission considers appropriate.
    (d) Application processing. (1) Commission staff shall review any 
application submitted during the period for submission and before the 
deadline for submission for completeness and compliance with the 
Commission's rules. No applications submitted at any

[[Page 69393]]

other time shall be reviewed or considered.
    (2) The Commission shall not permit any applicant to participate in 
competitive bidding pursuant to this subpart to do so if, as of the 
deadline for submitting applications, the application does not 
adequately identify the applicant or does not include required 
certifications.
    (3) The Commission shall not permit any applicant to participate in 
competitive bidding pursuant to this subpart to do so if, as of the 
applicable deadline, the applicant has not provided any required 
demonstration of financial qualifications that the Commission has 
required.
    (4) The Commission shall not permit applicants to make any major 
modifications to their applications after the deadline for submitting 
applications. The Commission shall not permit applicants to participate 
in the competitive bidding if their applications require major 
modifications to be made after deadline for submitting applications. 
Major modifications include but are not limited to any changes to the 
identity of the applicant or to the certifications required in the 
application.
    (5) The Commission may permit applicants to make minor 
modifications to their applications after the deadline for submitting 
applications. The Commission may establish deadlines for making some or 
all permissible modifications to applications and may permit some or 
all permissible modifications to be made at any time. Minor 
modifications include correcting typographical errors in the 
application and supplying non-material information that was 
inadvertently omitted or was not available at the time the application 
was submitted.
    (6) After receipt and review of the applications, the Commission 
shall by Public Notice identify all applicants that may participate in 
an auction conducted pursuant to this subpart.


Sec.  1.21002  Communications prohibited during the competitive bidding 
process.

    (a) Prohibited communications. Each applicant, each party capable 
of controlling an applicant, and each party related to an applicant 
with information regarding an applicant's planned or actual 
participation in the competitive bidding is prohibited from 
communicating any information regarding the applicant's planned or 
actual participation in the competitive bidding to any other party with 
an interest in any other applicant to participate in the competitive 
bidding from the deadline for submitting applications to participate in 
the competitive bidding until after the post-auction deadline for 
winning bidders to submit long-form applications for Mobility Fund 
support, unless the Commission by Public Notice announces a different 
deadline.
    (b) Duty to report potentially prohibited communications. Any 
applicant or related party receiving communications that may be 
prohibited under this rule shall report the receipt of such 
communications to the Commission.
    (c) Procedures for reporting potentially prohibited communications. 
The Commission may by Public Notice establish procedures for parties to 
report the receipt of communications that may be prohibited under this 
rule.


Sec.  1.21003  Competitive bidding process.

    (a) Public notice of competitive bidding procedures. The Commission 
shall by Public Notice establish detailed competitive bidding 
procedures any time it conducts competitive bidding pursuant to this 
subpart.
    (b) Competitive bidding procedures. The Commission may conduct 
competitive bidding pursuant to this subpart using any of the 
procedures described below.
    (1) The Commission may establish procedures for limiting the public 
availability of information regarding applicants, applications, and 
bids during a period of time covering the competitive bidding process. 
The Commission may by Public Notice establish procedures for parties to 
report the receipt of non-public information regarding applicants, 
applications, and bids during any time the Commission has limited the 
public availability of the information during the competitive bidding 
process.
    (2) The Commission may sequence or group multiple items subject to 
bidding, such as multiple geographic areas eligible for Mobility Fund 
support, and may conduct bidding either sequentially or simultaneously.
    (3) The Commission may establish procedures for bidding on 
individual items and/or for combinations or packages of items.
    (4) The Commission may establish reserve prices, either for 
discrete items or combinations or packages of items, which may be made 
public or kept non-public during a period of time covering the 
competitive bidding process.
    (5) The Commission may prescribe the form and time for submitting 
bids and may require that bids be submitted remotely, by telephonic or 
electronic transmission, or in person.
    (6) The Commission may prescribe the number of rounds during which 
bids may be submitted, whether one or more, and may establish 
procedures for determining when no more bids will be accepted.
    (7) The Commission may require a minimum level of bidding activity.
    (8) The Commission may establish acceptable bid amounts at the 
opening of and over the course of bidding.
    (9) The Commission may establish procedures for comparing and 
ranking bids and determining the winning bidders that may become 
recipients of universal service support available through the Mobility 
Fund and the amount(s) of support that they may receive, subject to 
post-auction procedures established by the Commission.
    (10) The Commission may permit bidders to withdraw bids and, if so, 
establish procedures for doing so.
    (11) The Commission may delay, suspend or cancel bidding before or 
after bidding begins for any reason that affects the fair and efficient 
conduct of the bidding, including natural disasters, technical 
failures, administrative necessity or any other reason.
    (c) Apportioning package bids. If the Commission elects to accept 
bids for combinations or packages of items, the Commission may provide 
a methodology for apportioning such bids to discrete items within the 
combination or package when a discrete bid on an item is required to 
implement any Commission rule.
    (d) Public notice of competitive bidding results. After the 
conclusion of competitive bidding, the Commission shall by Public 
Notice identify the winning bidders that may become recipients of 
universal service support available through the Mobility Fund and the 
amount(s) of support that they may receive, subject to post-auction 
procedures established by the Commission.


Sec.  1.21004  Applying for mobility fund support.

    Winning bidders that fail to substantially comply with the 
requirements for filing the post-auction long-form application by the 
applicable deadline shall be in default on their bids and subject to 
such measures as the Commission may provide, including but not limited 
to disqualification from future competitive bidding pursuant to this 
subpart.

PART 54--UNIVERSAL SERVICE

    5. The authority citation for Part 54 continues to read as follows:


[[Page 69394]]


    Authority:  47 U.S.C. 151, 154(i), 201, 205, 254 unless 
otherwise noted.

    6. Add Subpart L to read as follows:

Subpart L--Mobility Fund

Sec.
54.1001 Mobility Fund.
54.1002 Geographic areas eligible for support.
54.1003 Provider eligibility.
54.1004 Application process.
54.1005 Performance requirements.
54.1006 Mobility Fund disbursements.
54.1007 Audits.


Sec.  54.1001  Mobility Fund.

    The Commission may designate reserves accumulated in the Universal 
Service Fund to be made available through the Mobility Fund. The 
Commission may use competitive bidding, as provided in Part 1, Subpart 
AA, to determine the recipients of support available through the 
Mobility Fund and the amount(s) of support that they may receive for 
specific geographic areas, subject to post-auction procedures 
established by the Commission.


Sec.  54.1002  Geographic areas eligible for support.

    (a) Mobility Fund support may be made available for specific 
geographic areas identified by the Commission.
    (b) The Commission may assign relative coverage units to each 
identified geographic area in connection with conducting competitive 
bidding and disbursing support.


Sec.  54.1003  Provider eligibility.

    (a) A party applying for Mobility Fund support must be designated 
an Eligible Telecommunications Carrier for an area that includes 
geographic area(s) with respect to which it applies for Mobility Fund 
support.
    (b) A party applying for Mobility Fund support must, in a form 
specified by the Commission, hold or otherwise have access to a 
Commission authorization to provide spectrum-based services such that 
it is capable of satisfying performance requirements in the geographic 
area with respect to which it applies.
    (c) A party applying for Mobility Fund support must certify that is 
financially, technically, and legally qualified to provide the 
supported mobile services.


Sec.  54.1004  Application process.

    (a) Application deadline. Unless otherwise provided by Public 
Notice, winning bidders for Mobility Fund support must file a long-form 
application for Mobility Fund support within 10 business days of the 
Public Notice identifying them as eligible to apply.
    (b) Application contents. (1) Identification of the party seeking 
the support.
    (2) Information the Commission may require to demonstrate that the 
applicant is legally, technically and financially qualified to receive 
support from the Mobility Fund, including but not limited to proof of 
its designation as an Eligible Telecommunications Carrier for an area 
that includes the area with respect to which support is requested and 
identification of its authorization to provide spectrum-based services 
in the area with respect to which support is requested.
    (3) Disclosure of all parties with a controlling interest in the 
applicant and any party with a greater than ten percent ownership 
interest in the applicant, whether held directly or indirectly.
    (4) A detailed project description that describes the network, 
identifies the proposed technology, demonstrates that the project is 
technically feasible, and describes each specific development phase of 
the project, e.g., network design phase, construction period, 
deployment and maintenance period.
    (5) Certifications that the applicant has available funds for all 
project costs that exceed the amount of support to be received from the 
Mobility Fund and that the applicant will comply with all program 
requirements.
    (6) Any guarantee of performance that the Commission may require by 
Public Notice or other proceedings, including but not limited to, 
letters of credit, performance bonds, or demonstration of financial 
resources.
    (c) Application processing. (1) No application will be considered 
unless it has been submitted during the period specified by Public 
Notice. No applications submitted or demonstrations made at any other 
time shall be accepted or considered.
    (2) The Commission shall deny any application that, as of the 
submission deadline, either does not adequately identify the party 
seeking support or does not include required certifications.
    (3) After reviewing applications submitted, the Commission may 
afford an opportunity for parties to make minor modifications to amend 
applications or correct defects noted by the applicant, the Commission, 
or other parties. Minor modifications include correcting typographical 
errors in the application and supplying non-material information that 
was inadvertently omitted or was not available at the time the 
application was submitted.
    (4) The Commission shall deny all applications to which major 
modifications are made after the deadline for submitting applications. 
Major modifications include any changes to the identity of the 
applicant or to the certifications required in the application.
    (5) After receipt and review of the applications, the Commission 
shall release a Public Notice identifying all applications that have 
been granted and the parties that are eligible to receive Mobility Fund 
support.


Sec.  54.1005  Performance requirements.

    (a) Parties receiving Mobility Fund support shall submit to the 
Commission annual reports for ten years after they qualify for support. 
The annual reports shall include:
    (1) Electronic Shapefiles site coverage plots illustrating the area 
reached by new services at a minimum scale of 1:240,000;
    (2) A list of relevant census blocks previously deemed unserved, 
with total resident population and resident population residing in 
areas reached by new services (based on Census Bureau data and 
estimates);
    (3) A report regarding the services advertised to the population in 
those areas;
    (4) Data received or used from drive tests analyzing network 
coverage for mobile services in the area for which support was 
received.
    (b) No later than two months after a site begins providing service 
or two years after receiving Mobility Fund support, parties receiving 
the support shall submit to the Commission data from drive tests 
covering the area for which support was received demonstrating mobile 
transmissions supporting voice and data to and from the network meeting 
or exceeding the following:
    (1) Outdoor minimum of 200 kbps uplink and 768 kbps downlink at 
vehicle speeds up to 70 MPH;
    (2) Achieved with 90% coverage area probability at a sector loading 
of 70%.
    (c) Drive tests submitted in compliance with this section shall 
cover all Interstate, U.S. routes, and State routes in the area for 
which support was received and any other roads deemed essential for 
mobile service by the State Agency regulating the provision of 
telecommunications services in that area.


Sec.  54.1006  Mobility Fund disbursements.

    (a) Mobility Fund support shall be disbursed to recipients in three 
stages, as follows:
    (1) One-third of the total possible support, if coverage were to be 
extended to 100 percent of the units deemed

[[Page 69395]]

unserved in the geographic area, when a recipient's long-form 
application for support with respect to a geographic area is deemed 
approved.
    (2) One-third of the total possible support with respect to a 
specific geographic area when a recipient files a report demonstrating 
coverage of 50 percent of the units in that area previously deemed 
unserved.
    (3) The remainder of the total possible support when a recipient 
files a report demonstrating coverage of 100 percent of the units in 
that area previously deemed unserved.
    (b) If the Commission concludes for any reason that coverage of 100 
percent of the units in the geographic area previously deemed unserved 
will not be achieved, the Commission instead may provide support based 
on the final total units covered in that area. In such circumstances, 
the final disbursement will be the difference between the total amount 
of support based on the final units covered in that area and any 
support previously received with respect to that area. Parties 
accepting a final disbursement for a specific geographic area based on 
coverage of less than 100 percent of the units in the area previously 
deemed unserved waive any claim for the remainder of support for which 
they previously were eligible with respect to that area.


Sec.  54.1007  Audits.

    (a) Parties receiving Mobility Fund support are subject to random 
compliance audits and other investigations to ensure compliance with 
program rules and orders.
    (b) Parties receiving Mobility Fund support and their agents are 
required to retain any documentation prepared for or in connection with 
the recipient's Mobility Fund support for a period of not less than 5 
years. All such documents shall be made available upon request to the 
Commission's Office of Managing Director, Wireless Telecommunications 
Bureau, Wireline Competition Bureau, Office of Inspector General, and 
the Universal Service Fund Administrator, and their auditors.

[FR Doc. 2010-28535 Filed 11-10-10; 8:45 am]
BILLING CODE 6712-01-P


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