II 

113TH CONGRESS 

1ST SESSION S. 1858 

To require the Federal Communications Commission to suspend and revise 

portions of the Report and Order and Further Notice of Proposed Rulemaking that revised Universal Service Fund distribution to rural carriers, 

to encourage renewed investment by rural rate-of-return carriers in deployment of broadband infrastructure in rural areas, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 25, 2013 

Mr. BEGICH introduced the following bill; which was read twice and referred 

to the Committee on Commerce, Science, and Transportation 

A BILL 

To require the Federal Communications Commission to suspend and revise portions of the Report and Order and 

Further Notice of Proposed Rulemaking that revised 

Universal Service Fund distribution to rural carriers, 

to encourage renewed investment by rural rate-of-return 

carriers in deployment of broadband infrastructure in 

rural areas, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Rural Broadband In3 vestment Act of 2013’’ or the ‘‘RBI Act of 2013’’. 

4 SEC. 2. DEFINITIONS. 

5 In this Act— 

6 (1) the term ‘‘applicable Federal-State Joint 

7 Board’’ means— 

8 (A) the Federal-State Joint Board on Uni9 versal Service; and 

10 (B) if the limitations in the proposal sub11 mitted by the Commission to the Federal-State 

12 Joint Board on Universal Service under section 

13 4(b)(1)(A) result in a revision of the jurisdic14 tional allocation of expenses, the Federal-State 

15 Joint Board on Separations; 

16 (2) the term ‘‘Commission’’ means the Federal 

17 Communications Commission; 

18 (3) the term ‘‘revised proposal for rural sup19 port’’ means a revised proposal to establish limita20 tions on study area total unseparated loop costs of 

21 rural rate-of-return carriers; 

22 (4) the term ‘‘rural carrier’’ means— 

23 (A) a rural rate-of-return carrier; 

24 (B) a rural wireless carrier owned by a 

25 rural rate-of-return carrier; and 


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1 (C) a rural competitive local exchange car2 rier owned by a rural rate-of-return carrier; 

3 (5) the term ‘‘rural rate-of-return carrier’’ 

4 means a rural telephone company (as defined in sec5 tion 153 of the Communications Act of 1934 (47 

6 U.S.C. 153)) that is a rate-of-return carrier (as de7 fined in section 54.5 of title 47, Code of Federal 

8 Regulations); 

9 (6) the term ‘‘study area total unseparated loop 

10 cost’’ means the cost calculated under section 

11 36.621 of title 47, Code of Federal Regulations; 

12 (7) the term ‘‘Transformation Order’’ means 

13 the Report and Order and Further Notice of Pro14 posed Rulemaking of the Federal Communications 

15 Commission adopted on October 27, 2011 (FCC 11– 

16 161); and 

17 (8) the term ‘‘tribal lands’’ has the meaning 

18 given the term in section 54.400(e) of title 47, Code 

19 of Federal Regulations. 

20 SEC. 3. FINDINGS. 

21 Congress finds the following: 

22 (1) The implementation of new rules and regu23 lations set forth in the Transformation Order has 

24 created financial uncertainty and instability for rural 

25 carriers by denying rural carriers a meaningful opVerDate Mar 15 2010 04:39 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1858.IS S1858

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1 portunity to recover investments and expenses in2 curred to provide universal service prior to 2012. 

3 (2) The implementation of the Transformation 

4 Order, including the utilization of a widely criticized 

5 regression analysis used to determine levels of uni6 versal service support, is creating significant uncer7 tainty with respect to the sufficiency and predict8 ability of the universal service support mechanisms, 

9 which has discouraged rural carriers from making 

10 broadband infrastructure investments to build out 

11 new broadband capabilities in high cost-to-serve 

12 rural communities throughout the United States. 

13 (3) The intent of Congress under section 254 of 

14 the Communications Act of 1934 (47 U.S.C. 254) is 

15 that the Commission— 

16 (A) consult with the Federal-State Joint 

17 Board on Universal Service before adopting 

18 changes to regulations that affect universal 

19 service high-cost fund mechanisms; and 

20 (B) adopt policies and regulations that es21 tablish and maintain ‘‘specific, predictable, and 

22 sufficient’’ support mechanisms to preserve and 

23 advance universal service. 

24 (4) The Secretary of Agriculture has warned 

25 that the implementation of the Transformation 


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1 Order is having unintended consequences for rural 

2 broadband investment and deployment and for other 

3 Federal programs designed to promote rural broad4 band deployment. 

5 (5) The Department of Agriculture has re6 ported that demand for Rural Utilities Service loans 

7 for broadband buildout has plummeted in 2013, due 

8 in part to the uncertainty created by the new rules 

9 and regulations set forth in the Transformation 

10 Order. 

11 (6) Surveys of rural carriers indicate that near12 ly two-thirds of rural rate-of-return carriers are can13 celing or postponing new broadband investments, 

14 while other reports indicate that rural rate-of-return 

15 carriers are being forced to increase consumer prices 

16 and reduce staff, creating ripple effects for econo17 mies in rural areas of the United States. 

18 (7) Congressional hearings have demonstrated 

19 that the approach of the Commission to the consid20 eration, review, and resolution of petitions for waiv21 ers from rules adopted under the Transformation 

22 Order— 

23 (A) is unduly burdensome and costly for 

24 small, rural carriers and inconsistent with the 


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1 established policy and waiver standards of the 

2 Commission; and 

3 (B) is consequently discouraging small, 

4 rural carriers from requesting waivers and is 

5 creating additional business uncertainties. 

6 (8) Congressional hearings have demonstrated 

7 that the Commission can make adjustments to the 

8 Transformation Order to address the adverse impact 

9 and business uncertainties confronting small, rural 

10 carriers without affecting other categories of carriers 

11 or increasing the Universal Service Fund budget es12 tablished in the Transformation Order. 

13 SEC. 4. SUSPENSION AND REVISION OF PROVISION OF 

14 TRANSFORMATION ORDER. 

15 (a) SUSPENSION.—Section 36.621(a)(5) of title 47, 

16 Code of Federal Regulations (relating to the annual limi17 tation of study area total unseparated loop cost pursuant 

18 to a schedule announced by the Wireline Competition Bu19 reau), shall have no force or effect. 

20 (b) REVIEW AND REVISION.— 

21 (1) PUBLICATION OF REVISED PROPOSAL FOR

22 UNIVERSAL SERVICE DISTRIBUTION TO RURAL RATE23 OF-RETURN CARRIERS.— 

24 (A) REQUIREMENT TO SUBMIT PRO25 POSAL.—Not later than 60 days after the effecVerDate Mar 15 2010 04:39 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1858.IS S1858

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1 tive date of this Act, the Commission shall issue 

2 a notice of proposed rulemaking to adopt a re3 vised proposal for rural support. 

4 (B) RECOVERY OF REASONABLE INVEST5 MENTS AND OPERATING EXPENSES.—The Com6 mission shall ensure that the revised proposal 

7 for rural support does not deprive a rural rate8 of-return carrier of the opportunity to recover 

9 reasonable investments and operating expenses 

10 incurred prior to the adoption under subpara11 graph (D) of the revised proposal for rural sup12 port. 

13 (C) CONSULTATION WITH JOINT

14 BOARDS.—Before the Commission issues a final 

15 rule under subparagraph (D) to adopt a revised 

16 proposal for rural support, the Commission 

17 shall consult with the applicable Federal-State 

18 Joint Board to the extent that such consulta19 tion is required under the Communications Act 

20 of 1934 (47 U.S.C. 151 et seq.). 

21 (D) FINAL RULE ADOPTING PROPOSAL.— 

22 Not earlier than 45 days and not later than 

23 120 days after the date on which the Commis24 sion issues the notice of proposed rulemaking 

25 under subparagraph (A), the Commission shall 


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1 issue a final rule adopting a revised proposal 

2 for rural support. 

3 (2) REPORT TO CONGRESS.—Not later than 60 

4 days after the effective date of this Act, the Com5 mission shall submit to the Committee on Com6 merce, Science, and Transportation of the Senate 

7 and the Committee on Energy and Commerce of the 

8 House of Representatives— 

9 (A) a report that contains the revised pro10 posal for rural support published in the notice 

11 of proposed rulemaking under paragraph 

12 (1)(A); and 

13 (B) a report that— 

14 (i) describes the amount of universal 

15 service funding necessary to achieve uni16 versal service objectives during the 10-year 

17 period following the date on which the re18 port is submitted; and 

19 (ii) includes— 

20 (I) quantitative and qualitative 

21 analysis in support of the findings of 

22 the Commission under clause (i); and 

23 (II) a specific analysis identifying 

24 the unique circumstances and result25 ing high-cost loop support required to 


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1 provide and maintain universal service 

2 in Alaska and on tribal lands. 

3 (c) INTERIM LIMITATIONS.— 

4 (1) IN GENERAL.—Not later than 30 days after 

5 the effective date of this Act, the Commission shall 

6 establish interim limitations on study area total 

7 unseparated loop costs by— 

8 (A) determining the annual Universal 

9 Service Fund distribution for each rural rate-of10 return carrier on the basis of the applicable 

11 rules that were in effect on the day before the 

12 effective date of the Transformation Order; and 

13 (B) adjusting the universal service dis14 tribution of high-cost loop support that results 

15 from the annual distribution determined under 

16 paragraph (1) to reflect— 

17 (i) the revision to section 36.605 of 

18 title 47, Code of Federal Regulations, re19 quired under section 5 of this Act; and 

20 (ii) any revisions to responses to waiv21 er petitions required under section 6 of 

22 this Act. 

23 (2) DURATION.—The interim limitations estab24 lished under paragraph (1) shall be in effect until 


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1 the date on which the final rule required under sub2 section (b)(1)(D) takes effect. 

3 SEC. 5. SAFETY NET ADDITIVE. 

4 The Commission shall amend section 36.605(a) of 

5 title 47, Code of Federal Regulations (relating to adjust6 ments to high-cost loop support for rural rate-of-return 

7 carriers) to provide that, beginning on January 1, 2012, 

8 the calculation of safety net additive support for a rural 

9 rate-of-return carrier shall include all just and reasonable 

10 investments made by the carrier prior to 2012. 

11 SEC. 6. WAIVERS. 

12 (a) IN GENERAL.—The Commission shall apply the 

13 criteria and standards under this section when considering 

14 a petition for a waiver submitted by a rural carrier nega15 tively affected by a revision adopted in the Transformation 

16 Order. 

17 (b) REASONABLE OPPORTUNITY TO RECOVER

18 COSTS.—The Commission shall grant a petition for a 

19 waiver described in subsection (a) if the Commission de20 termines a waiver is necessary to ensure that the request21 ing rural carrier is afforded a reasonable opportunity to 

22 recover the costs of providing universal service, including 

23 an equitable return on the investments the rural carrier 

24 made to provide universal service. 


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1 (c) TIME LIMIT FOR CONSIDERATION OF WAIVER

2 PETITION.— 

3 (1) IN GENERAL.—Not later than 90 days after 

4 the date on which the Commission receives a petition 

5 for a waiver, the Commission shall grant or deny the 

6 petition. 

7 (2) FAILURE TO ACT WITHIN TIME LIMIT.—If 

8 the Commission fails to make a determination on a 

9 petition for a waiver prior to the expiration of the 

10 time period set forth under paragraph (1), the Com11 mission shall be deemed to have granted the peti12 tion. 

13 (3) WAIVER PETITIONS FILED BEFORE EFFEC14 TIVE DATE.—The Commission shall reconsider, in 

15 accordance with this section, any petition for a waiv16 er relating to a revision to a regulation adopted in 

17 the Transformation Order that— 

18 (A) was submitted to the Commission dur19 ing the period beginning on November 18, 

20 2011, and ending on the day before the effec21 tive date of this Act; and 

22 (B) is denied by the Commission. 

23 (d) DENIAL OF WAIVER PETITION.—If the Commis24 sion denies a petition for a waiver, in whole or in part, 

25 the Commission shall identify with specificity— 


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1 (1) any operating expenses of the requesting 

2 carrier that the Commission determines unreason3 able; 

4 (2) any investments made by the requesting 

5 carrier that the Commission determines are not used 

6 and useful in the provision of universal service; and 

7 (3) the underlying basis for any determination 

8 under paragraph (1) or (2). 

9 SEC. 7. EFFECTIVE DATE. 

10 This Act shall take effect 30 days after the date of 

11 enactment of this Act. 

Æ 


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