67060 Federal Register / Vol. 75, No. 210 / Monday, November 1, 2010 / Proposed Rules 

referenced above. Once NHTSA and 

EPA learn how many people have 

registered to speak at each public 

hearing, we will allocate an appropriate 

amount of time to each participant, 

allowing time for necessary breaks. In 

addition, we will reserve a block of time 

for anyone else in the audience who 

wants to give testimony. For planning 

purposes, each speaker should 

anticipate speaking for approximately 

ten minutes, although we may need to 

shorten that time if there is a large 

turnout. We request that you bring three 

copies of your statement or other 

material for the EPA and NHTSA 

panels. To accommodate as many 

speakers as possible, we prefer that 

speakers not use technological aids (e.g., 

audio-visuals, computer slideshows). 

However, if you plan to do so, you must 

notify the contact persons in the FOR

FURTHER INFORMATION CONTACT section 

above. You also must make 

arrangements to provide your 

presentation or any other aids to 

NHTSA and EPA in advance of the 

hearing in order to facilitate set-up. 

NHTSA and EPA will conduct the 

hearings informally, and technical rules 

of evidence will not apply. We will 

arrange for a written transcript of each 

hearing and keep the official record of 

each hearing open for 30 days to allow 

speakers to submit supplementary 

information. Panel members may ask 

clarifying questions during the oral 

presentations, but will not respond to 

the presentations at that time. You may 

make arrangements for copies of the 

transcripts directly with the court 

reporter. Written statements and 

supporting information submitted 

during the comment period will be 

considered with the same weight as oral 

comments and supporting information 

presented at the public hearings. 

Written comments on the proposal must 

be postmarked by 60 days after the date 

of publication of the proposal in the 

Federal Register. 

Dated: October 26, 2010. 

Ronald Medford, 

Deputy Administrator, National Highway 

Traffic Safety Administration. 

Dated: October 25, 2010. 

Margo T. Oge, 

Director, Office of Transportation and Air 

Quality Environmental Protection Agency. 

[FR Doc. 2010–27510 Filed 10–29–10; 8:45 am] 

BILLING CODE 6560–50–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 1 

[WT Docket No. 10–208; FCC 10–182] 

Universal Service Reform Mobility 

Fund 

AGENCY: Federal Communications 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: 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 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; 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: 

Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Federal Communications 

Commission’s Web site: http:// 

fjallfoss.fcc.gov/ecfs2/. Follow the 

instructions for submitting comments. 

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. 

All hand-delivered or messengerdelivered 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. 

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. 

People with Disabilities: Contact the 

FCC to request reasonable 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by e-mail: FCC504@fcc.gov 

or telephone: 202–418–0530 or TTY: 

202–418–0432. 

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 PRA@fcc.gov and to Nicholas A. 

Fraser, Office of Management and 

Budget, via e-mail to 

nfraser@omb.eop.gov 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 email to PRA@fcc.gov 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 


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Federal Register / Vol. 75, No. 210 / Monday, November 1, 2010 / Proposed Rules 67061 

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 costeffectively 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 

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 email 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 


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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 

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 perunit 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 


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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 

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 


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67064 Federal Register / Vol. 75, No. 210 / Monday, November 1, 2010 / Proposed Rules 

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 

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 

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 perunit 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 


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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 

services should be made available to 

consumers in rural, insular, and highcost 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, U.S., 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 technologyspecific 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 


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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, U.S. 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 

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 twostage 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 


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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 shortform 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 

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 


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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 longform 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 

seeks comment on these proposed shortform 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 perunit 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 perunit 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 perunit bid amounts for a Mobility Fund 

auction. The Commission also proposes 


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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 

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. 

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, 


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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 twostage 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 

Mobility Fund support. Those 

applications would be subject to an indepth review of the applicants’ 

eligibility and qualifications to receive 

USF support. The Commission seeks 

comment on each step of the postauction 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? 


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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 

budget that could accompany the buildout 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. 


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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’ 

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 


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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-butdisclose 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 twosentence 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 

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 


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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 

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, 


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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 buildout 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 

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 


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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 

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 clientsupplied 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 


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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 reverseauction—to compare all offers to 

provide service across the unserved 

areas eligible for participation in the 

Mobility Fund program. 

13. 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 

in 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 highcost 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, recordkeeping, 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. 

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 1 and 

54 

Administrative practice and 

procedure, Competitive bidding, 

Telecommunications, Reporting and 

recordkeeping requirements. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

[FR Doc. 2010–27458 Filed 10–29–10; 8:45 am] 

BILLING CODE 6712–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 73 

[DA 10–2000; MB Docket No. 08–194; RM– 

11488] 

Television Broadcasting Services; 

Huntsville, AL 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule. 

SUMMARY: The Commission has before it 

a petition for rulemaking filed by Local 

TV Alabama License, LLC (‘‘Local TV’’), 

the licensee of WHNT–TV, channel 46, 

Huntsville, Alabama. Local TV requests 

the substitution of channel 46 for 

channel 19 at Huntsville. 

DATES: Comments must be filed on or 

before December 1, 2010, and reply 

comments on or before December 16, 

2010. 

ADDRESSES: Federal Communications 

Commission, Office of the Secretary, 

445 12th Street, SW., Washington, DC 

20554. In addition to filing comments 

with the FCC, interested parties should 

serve counsel for petitioner as follows: 

Scott S. Patrick, Esq., Dow Lohnes 

PLLC, 1200 New Hampshire Avenue, 

NW., Suite 800, Washington, DC 20036– 

6802. 

FOR FURTHER INFORMATION CONTACT: 

David Brown, david.brown@fcc.gov, 

Media Bureau, (202) 418–1600. 

SUPPLEMENTARY INFORMATION: This is a 

synopsis of the Commission’s Notice of 

Proposed Rule Making, MB Docket No. 

08–194, adopted October 18, 2010, and 

released October 19, 2010. The full text 

of this document is available for public 

inspection and copying during normal 

business hours in the FCC’s Reference 

Information Center at Portals II, CY– 

A257, 445 12th Street, SW., 

Washington, DC 20554. This document 


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