[Federal Register Volume 82, Number 173 (Friday, September 8, 2017)]
[Rules and Regulations]
[Pages 42473-42486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17824]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket No. 10-90, WT Docket No. 10-208; FCC 17-102]


Connect America Fund; Universal Service Reform--Mobility Fund

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for reconsideration.

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SUMMARY: In this Order on Reconsideration and Second Report and Order, 
the Commission adopts the parameters for the Mobility Fund Phase II 
challenge process, which will enable the Commission to resolve 
eligible-area disputes expeditiously. The challenge process will begin 
with a new, one-time collection of standardized, up-to-date 4G LTE 
coverage data from mobile wireless providers. Interested parties will 
then have an opportunity to contest an initial determination that an 
area is ineligible for MF-II support, and providers will then have an 
opportunity to response to challenges.

DATES: The Commission adopted this Order on Reconsideration and Second 
Report and Order on August 3, 2017, and the parameters set forth 
therein for the Mobility Fund Phase II challenge process, along with 
all associated requirements also set forth therein, go into effect 
October 10, 2017, except for the new or modified information collection 
requirements in the challenge process that require approval by the 
Office of Management and Budget (OMB). The Commission will publish a 
document in the Federal Register announcing approval of those 
information collection requirements and the date they will become 
operative.

ADDRESSES: Federal Communications Commission, 445 12th Street SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auction and Spectrum Access Division, Jonathan McCormack or Audra Hale-
Maddox, at (202) 418-0660. For further information concerning the 
Paperwork Reduction Act information collection requirements contained 
in this document, contact Cathy Williams at (202) 418-2918 or via the 
Internet at <a href="/cdn-cgi/l/email-protection#376765767751545419505841"><span class="__cf_email__" data-cfemail="cb9b998a8bada8a8e5aca4bd">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Order on 
Reconsideration and Second Report and Order (MF-II Challenge Process 
Order), WC Docket No. 10-90, WT Docket No. 10-208, FCC 17-102, adopted 
on August 3, 2017 and released on August 4, 2017. The complete text of 
this document is available for public inspection and copying from 8:00 
a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or from 
8:00 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 
complete text is also available on the Commission's Web site at http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0804/FCC-17-102A1.pdf. Alternative formats are available to persons with 
disabilities by sending an email to <a href="/cdn-cgi/l/email-protection#ebada8a8dedbdfab8d8888c58c849d"><span class="__cf_email__" data-cfemail="0f494c4c3a3f3b4f696c6c21686079">[email protected]</span></a> or by calling the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 
418-0432 (TTY).

Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act of 1980, the 
Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) 
of the possible significant economic impact on small entities of the 
policies and rules adopted in this document. The FRFA is set forth in 
an appendix to the MF-II Challenge Process Order, and is summarized 
below. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, will send a copy of this MF-II Challenge 
Process Order, including the FRFA, to the Chief Counsel for Advocacy of 
the Small Business Administration (SBA).

Paperwork Reduction Act

    The MF-II Challenge Process Order contains new and modified 
information collection requirements subject to the Paperwork Reduction 
Act of 1995 (PRA), Public Law 104-13. It will be submitted to the 
Office of Management and Budget (OMB) for review under section 3507(d) 
of the PRA. OMB, the general public, and other Federal agencies will be 
invited to comment on the new and modified information collection 
requirements contained in this proceeding.

Congressional Review Act

    The Commission will send a copy of this MF-II Challenge Process 
Order in a report to Congress and the Government Accountability Office 
pursuant to the Congressional Review Act (CRA), see 5 U.S.C. 
801(a)(1)(A).

I. Introduction

    1. In the MF-II Challenge Process Order, the Commission takes the 
next step to extend mobile opportunities to rural America by fulfilling 
its commitment to design a robust challenge process that will direct 
Mobility Fund Phase II (MF-II) support to primarily rural areas that 
lack unsubsidized 4G Long Term Evolution (LTE) service. The MF-II 
challenge process the Commission establishes will be administratively 
efficient, fiscally responsible, and will enable it to resolve eligible 
area disputes quickly and expeditiously. This challenge process will 
begin with a new, one-time collection of standardized, up-to-date 4G 
LTE coverage data from mobile wireless providers. Interested parties 
will then have an opportunity to contest an initial determination that 
an area is ineligible for MF-II support, and providers will then have 
an opportunity to respond to challenges.

II. Background

    2. In February 2017, the Commission adopted rules to move forward 
expeditiously to an MF-II auction. The Commission established a budget 
of $4.53 billion over a term of ten years to provide ongoing support 
for the provision of service in areas that lack adequate mobile voice 
and broadband coverage absent subsidies. The Commission further decided 
that geographic areas lacking unsubsidized, qualified 4G LTE service 
would be deemed ``eligible areas'' for MF-II support, and that it would 
use a competitive bidding process (specifically, a reverse auction) to 
distribute funding to providers to serve those areas. For the purposes 
of MF-II, the Commission defined ``qualified 4G LTE service'' as mobile 
wireless service provided using 4G LTE technology with download speeds 
of at least 5 Mbps. The Commission also decided that, prior to an MF-II 
auction, it would compile a list of areas that were presumptively 
eligible for MF-II support based on information derived from the Form 
477 data submissions and high-cost support disbursement data available 
from the Universal Service Administrative Company (USAC), and it would 
provide a limited timeframe for challenges to those initial 
determinations during the pre-auction process.
    3. In order to make more informed decisions on the challenge 
process, the Commission deferred deciding the specific parameters of 
the challenge process and instead sought additional comment. Among 
other things, the Commission sought comment in the

[[Page 42474]]

Mobility Fund II FNPRM, 82 FR 13413, March 13, 2017, on two potential 
options--called ``Option A'' and ``Option B''--for a process to 
challenge the eligibility of areas for MF-II support. ``Option A'' and 
``Option B'' varied in terms of the initial burdens for filing a 
challenge and the parameters for evidence submitted during the 
challenge. The Commission also solicited comment on any additional 
options and parameters for the MF-II challenge process and made clear 
that it was not proposing to adopt either ``Option A'' or ``Option B'' 
wholesale, intending instead to adopt the most effective approach and 
parameters to assemble a ``best in class'' structure for the challenge 
process. Seven petitions were filed seeking reconsideration of the 
Mobility Fund II Report & Order, 82 FR 15422, March 28, 2017, five of 
which directly bear upon the framework and design of the MF-II 
challenge process. The Commission addresses in the MF-II Challenge 
Process Order the portions of the five petitions asking for 
reconsideration of the framework and design of the challenge process. 
At this time, the Commission defers addressing the petitions, or 
portions thereof, requesting reconsideration of aspects of the Mobility 
Fund II Report & Order outside of the challenge process.

III. Order on Reconsideration

    4. As necessary starting points for the challenge process, the 
Commission first resolves certain issues raised in petitions for 
reconsideration of the Mobility Fund II Report & Order. Specifically, 
the Commission reconsiders its decision to use Form 477 data as the 
basis for determining deployment of qualifying 4G LTE for the map of 
areas presumptively eligible for MF-II support, and instead grants, in 
part, a petition for reconsideration seeking a new, one-time collection 
of data to determine the deployment of qualified 4G LTE for the 
purposes of the MF-II challenge process. The Commission denies 
petitions to reconsider its adoption of a 5 Mbps download speed 
benchmark to identify areas eligible for MF-II support. The Commission 
also denies petitions for reconsideration that propose including 
technology choice or collocation as elements in such an eligibility 
determination.

A. Source of Coverage Data

    5. The Commission reconsiders its decision to use Form 477 data as 
the basis for determining deployment of qualified 4G LTE for the map of 
areas presumptively eligible for MF-II. At the time of the Mobility 
Fund II Report & Order, the Commission noted that, despite criticism of 
using Form 477 data, none of the commenters had identified a better 
available coverage data source to move forward expeditiously to 
implement MF-II.
    6. A trade association now seeks reconsideration of the 
Commission's decision to use Form 477 data to determine what areas are 
covered by qualified 4G LTE for purposes of identifying areas 
presumptively eligible for MF-II support. The trade association instead 
offers an industry consensus proposal asking that the Commission 
undertakes a new, one-time data collection with specified data 
parameters tailored to MF-II, thus addressing the lack of a better-
tailored data source than Form 477.
    7. After consideration of petitioner's industry consensus proposal, 
as well as the record gathered in response to this issue, the 
Commission reconsiders its decision to use Form 477 data as the basis 
for determining deployment of qualified 4G LTE for the map of areas 
presumptively eligible for MF-II support. The Commission instead 
grants, in part, petitioner's petition for reconsideration proposing a 
new, one-time collection of data to determine the deployment of 
qualified 4G LTE for the purposes of MF-II.
    8. The Commission observes at the outset that the mobile deployment 
data collected on Form 477 represent a dramatic improvement over the 
deployment data previously available on a national scale. On 
reconsideration, the Commission acknowledges the concerns of 
commenters, and finds that the use of Form 477 data as the baseline, as 
currently filed, is likely to result in a significantly longer MF-II 
challenge process than if the Commission collected data consistent with 
the petitioner's consensus proposal as the baseline for establishing 
which areas are presumptively eligible for support.
    9. Given the negative impact that using Form 477 data could have in 
prolonging the MF-II challenge process, and after considering the 
possibility of quickly acquiring a better-tailored data source than 
Form 477, the Commission is persuaded by the weight of the record to 
adopt petitioner's consensus proposal to undertake a new, one-time data 
collection of 4G LTE coverage maps based on the specific parameters the 
Commission adopts in the MF-II Challenge Process Order. For purposes of 
implementing MF-II expeditiously, this collection will provide the 
Commission and interested parties with the best available starting 
point for the challenge process. When combined with the high-cost 
subsidy disbursement data available from USAC, the new data will form 
the basis of the map of areas presumptively eligible for MF-II support.
    10. To reduce the burden on these providers, the Commission 
requires only those providers that have previously reported 4G LTE 
coverage in Form 477 and have qualified 4G LTE coverage based on the 
data specification described below to submit MF-II coverage data. Form 
477 filers that do not provide qualified 4G LTE service at the speed 
benchmark and parameters for MF-II eligibility are not required to 
submit coverage data as part of the MF-II challenge process collection. 
Filers that provide service at the benchmark and parameters for MF-II 
eligibility must submit coverage data. The Commission will use these 
new coverage data, in conjunction with subsidy data from USAC, to 
create the map of areas presumptively eligible for MF-II support.
    11. In reaching its decision to undertake this effort, the 
Commission finds that on balance the new coverage data it is collecting 
should reduce the need for challengers to perform more in-depth testing 
in certain areas or to file extensive challenges to large geographic 
areas. Thus, it should reduce the burden on challengers and providers 
that respond to challenges and allow the Commission to commence the MF-
II auction more quickly. In addition, current 4G LTE providers have the 
best information concerning their coverage footprints based on their 
propagation models, spectrum, and network infrastructure, and thus are 
in the best position to provide the Wireless Telecommunications Bureau 
and the Wireline Competition Bureau (the Bureaus) with data already in 
their possession, tailored to the purposes of MF-II. This approach also 
allows the Commission to simplify the challenge process by allowing 
only challenges that qualified LTE coverage is overstated and not also 
challenges that such coverage is understated. This approach also 
permits the Commission to establish various bright line rules for 
evaluation of the new coverage submissions and of certain challenges 
that should expedite the final resolution of areas eligible for MF-II 
support.
    12. The Commission also wishes to make clear that only the extent 
of qualified 4G LTE coverage can be challenged in the challenge 
process; its decision in the Mobility Fund II Report & Order to rely on 
USAC high-cost support data for determinations of which areas with 4G 
LTE coverage are unsubsidized remains unchanged, and subsidy data or 
determinations are not

[[Page 42475]]

subject to challenge. In sum, the required data should allow the 
Commission to achieve its policy goal of proceeding expeditiously to an 
MF-II auction. Compliance with the required data collection adopted in 
the MF-II Challenge Process Order is mandatory, and failure to comply 
may lead to enforcement action, including forfeiture penalties, 
pursuant to the Communications Act and other applicable law.

B. 5 Mbps Download Speed Benchmark for Identifying Areas Eligible for 
MF-II Support

    13. The Commission affirms that it will use a 5 Mbps download speed 
benchmark to determine what coverage counts as qualified 4G LTE for the 
purpose of identifying areas eligible for MF-II support. Using a 
download speed benchmark of 5 Mbps supports the Commission's primary 
policy goal of directing its limited MF-II funds to address 4G LTE 
coverage gaps and expanding 4G LTE coverage to areas that the private 
sector will not serve without government subsidies.
    14. Four petitioners seek reconsideration of some aspect of the 
Commission's decision to use a 5 Mbps download speed as the benchmark 
to determine what coverage counts as qualified 4G LTE for the purpose 
of identifying areas eligible for MF-II support.
    15. Despite the fact that providers have used different standards 
and methodologies to report coverage in their Form 477 data, the 
nationwide carriers are all generally reporting minimum advertised 
download speeds of 5 Mbps for their 4G LTE network coverage. Carriers' 
advertised speeds demonstrate that a consumer can reasonably expect to 
receive 4G LTE service at a download speed of 5 Mbps in both rural and 
urban areas. The Commission previously noted that ``commenters 
generally did not discuss the technical requirements of 4G LTE 
service'' but did cite multiple comments on the performance requirement 
for MF-II recipients. Commenters consistently cited 5 Mbps download as 
consistent with 4G LTE service but differed on whether a 10/1 Mbps 
requirement was too aggressive. Similarly, the 2016 Broadband Progress 
Report found that, even in urban areas, 119.3 million Americans (45 
percent) still lack access to 4G LTE with a minimum advertised speed of 
10/1 Mbps. Thus, establishing a download speed of 10 Mbps for 
identifying areas eligible for MF-II support would not reflect the 
typical consumer experience in urban and rural areas and would direct 
the Commission's limited funds to areas that are already being served 
at speeds that are reasonably comparable to what is available in urban 
areas. The Commission's analysis of available data and the record 
reflects that consumers in urban areas generally have access to 4G LTE 
service at a download speed of 5 Mbps. Therefore, this benchmark, 
coupled with the parameters the Commission adopts in the MF-II 
Challenge Process Order, serves as a reasonable basis for its analysis 
of what areas are currently lacking unsubsidized service at an 
equivalent level.
    16. The purpose of the eligibility benchmark is to determine at the 
outset of MF-II which areas lack service reasonably comparable to 
current service because they are uneconomic to serve and require 
subsidies to achieve 4G LTE service. In contrast, the performance 
benchmark for an MF-II recipient ensures that the Commission's limited 
universal service funds are used in a fiscally responsible manner to 
assure that service in eligible areas is reasonably comparable to urban 
offerings in the future. Setting the eligibility benchmark the same as 
the performance benchmark would have the counterproductive effect of 
directing subsidies to areas that are already receiving high levels of 
service, and consequently providers in those areas could potentially 
achieve the performance objective in the first year of a ten-year 
support program. Different eligibility and buildout requirements are 
consistent with past Commission decisions in the universal service 
context, and they serve ``our objective of ensuring that we target our 
finite budget to where it is most needed.'' To accomplish this 
objective, the Commission must exercise its discretion to balance 
competing universal service principles of promoting nationwide 
deployment of high-speed mobile broadband and spending limited 
universal service funds in a cost-effective manner.
    17. The Commission also rejects petitioners' assertions that it did 
not provide sufficient analysis to justify using the 5 Mbps download 
speeds as the eligibility benchmark in light of its expectation that 
areas found to be ineligible for MF-II support are likely to see 
improvements in the coming years. The Commission's objective in MF-II, 
in accordance with the USF/ICC Transformation Order, 76 FR 73829, 
November 29, 2011, is to subsidize reasonably comparable service in 
unserved areas, not to subsidize competition. The Commission 
anticipates that to the extent an area is served by an unsubsidized 
provider offering qualified 4G LTE service such that the area is not 
eligible for MF-II support, that unsubsidized service provider will 
have incentives to continue to invest in its network to maintain and 
expand its current market position. In addition, the Commission 
anticipates that as the infrastructure to support high levels of 
service develops over the ten-year term of MF-II support, the 
incremental costs of upgrades to service in ineligible areas will 
become lower, further facilitating improvements in those areas. Even if 
incentives to invest in unsubsidized areas were lower, with all things 
being equal, these lower upgrade costs would help offset that effect, 
and would incentivize service providers to increase their speed 
offerings in those areas. Furthermore, the Commission notes that the 
cost of upgrading service is significantly lower than the cost of 
building a new network in unserved areas or filling in coverage gaps in 
areas with significant coverage, and thus the Commission anticipates 
that incentives will continue to encourage upgrades to existing network 
deployments in unsubsidized areas. Accordingly, the Commission expects 
reasonable service improvements in ineligible areas because private 
actors have already demonstrated in the marketplace that they have an 
incentive to invest in those areas without federal support.
    18. Lastly, the Commission declines to adopt an upload speed 
benchmark to identify areas eligible for MF-II support. Given the 
nature of mobile wireless deployment and the interplay between download 
and upload speeds when designing and optimizing an LTE network, there 
is no single upload edge speed that corresponds to a 5 Mbps download 
speed. One party, however, has submitted recent LTE speed measurement 
results showing that with 1 Mbps as the 10th percentile of the upload 
speed distribution, the standard national compliance, at the non-MSA 
(metropolitan statistical area) and MSA level, only ranges from 
approximately 5 percent to 12 percent. This suggests that a cell edge 1 
Mbps upload speed standard requirement would exceed the upload speeds 
of most current LTE service areas. Thus, including a 1 Mbps upload 
speed benchmark could make eligible for support most areas with current 
LTE service at download speeds of 5 Mbps. Finally, the Commission also 
finds that the additional upload speed standard would add unnecessary 
complexity to the already complex challenge process. The Commission 
concludes that including a 1 Mbps upload speed benchmark for

[[Page 42476]]

determining areas eligible for MF-II support would be contrary to its 
policy goal of directing its limited MF-II resources to areas of the 
country that lack sufficient services because such a benchmark would 
expand the areas eligible for support to include areas that already 
have 4G LTE service, without any countervailing benefit to consumers.

C. Considering Incompatible Technologies in Determining Eligible Areas

    19. The Commission affirms the conclusion it reached in the 
Mobility Fund II Report & Order that areas with unsubsidized, qualified 
4G LTE service are not at risk of losing service and therefore should 
be ineligible to receive support, regardless of whether the areas have 
networks that are compatible with both GSM and CDMA. The Commission 
further affirms its earlier finding that it should not condition 
limited MF-II support on a requirement that newly deployed 4G LTE 
networks be backwards compatible with GSM and CDMA network technologies 
that are being phased out by the marketplace.
    20. Two petitioners now seek reconsideration of this issue; they 
argue that areas that do not have both GSM and CDMA coverage by 
unsubsidized providers should be eligible for MF-II support. The 
Commission denies the petitions for reconsideration of this issue. 
Efficiently distributing MF-II funds and expanding coverage are the 
Commission's priorities, and it must balance these policy goals against 
an issue that even one petitioner notes ``is one that time and 
ubiquitous VoLTE deployment will eventually solve.'' In the face of a 
diminishing technological issue, the Commission directs MF-II support 
in a fiscally-responsible manner by focusing on areas that lack 
unsubsidized, qualified 4G LTE coverage without considering whether 
older technologies are compatible. The Commission's gradual phase down 
of legacy support will provide consumers and carriers with time to 
complete the transition to newer technologies.

D. Considering Collocation in Determining Eligible Areas

    21. The Commission also denies a petitioner's request that it 
reconsider the basis on which it determines whether qualified 4G LTE 
deployed in an area is subsidized or unsubsidized. Consistent with the 
Commission's earlier conclusion, the Commission affirms that it will 
determine whether a provider that deploys qualified 4G LTE in an area 
is subsidized or unsubsidized based only on whether it receives high-
cost support for that area using USAC high-cost disbursement data, as 
described in the MF-II Challenge Process Order, and not based on 
whether that provider collocates equipment on a tower of another 
provider receiving universal service support. In addition, the 
Commission will not consider government subsidies other than legacy 
mobile wireless CETC high-cost support and MF-I support in determining 
whether a provider's qualified 4G LTE is subsidized.
    22. The Commission also notes that the Commission has not collected 
and does not intend to collect the tower-by-tower data that would be 
necessary to conduct the analysis proposed by the petitioner because 
the possible benefits of collecting that data appear small compared to 
the significant costs of collection and analysis. As part of their Form 
477 data filings, mobile wireless carriers submit maps that depict 
coverage without distinguishing between carrier-owned and collocated 
facilities. As discussed in the MF-II Challenge Process Order, based on 
a new, one-time filing of coverage maps provided under standardized 
parameters, the Commission will determine 4G LTE coverage and establish 
the areas presumptively eligible for MF-II support. Determining whether 
coverage depicted in the standardized coverage maps is provided through 
collocation on an area-by-area basis would be inconsistent with the 
Commission's decision to base MF-II eligibility strictly on the absence 
of unsubsidized, qualified 4G LTE, and doing so would impose a 
significant burden on both carriers and the Commission.

IV. Second Report and Order

    23. Consistent with the Commission's overarching objective to 
transition quickly away from the legacy CETC support system, it adopts 
a streamlined challenge process that will efficiently resolve disputes 
about areas deemed presumptively ineligible for MF-II support. Based on 
the Commission's review of the record and its comprehensive evaluation 
of the advantages and disadvantages of the various proposals, the 
Commission concludes that the approach it adopts will both promote 
fairness and minimize burdens on interested parties.
    24. Under the adopted approach, the Commission will begin with a 
new, one-time collection of 4G LTE coverage data, which will be used to 
establish the map of areas presumptively eligible for MF-II support. 
Specifically, the Commission will require providers to file propagation 
maps and model details with the Commission indicating their current 4G 
LTE coverage, as defined by download speeds of 5 Mbps at the cell edge 
with 80 percent probability and a 30 percent cell loading factor.
    25. An interested party (the challenger) will have 150 days to 
initiate a challenge of one or more of the areas initially deemed 
ineligible in the Commission's map of areas presumptively eligible for 
MF-II support (the challenge window). Prior to the close of the 
challenge window, a challenger may use USAC's online challenge portal 
(the USAC portal) to (1) access confidential provider-specific 
information for areas it wishes to challenge; (2) identify the area(s) 
it wants to challenge; (3) submit evidence supporting the challenge; 
and (4) certify its challenge for the specified area(s). After agreeing 
to treat the data as confidential, challengers will be able to access 
via the USAC portal (a) the underlying provider-specific coverage maps 
submitted as part of the new data collection; (b) the list of pre-
approved provider-specified handsets with which to conduct speed 
measurements; and (c) any other propagation model details collected as 
part of the new data collection. To certify a challenge, a challenger 
will be required to identify the area(s) within each state that it 
wishes to challenge and submit actual outdoor speed test data collected 
using standardized parameters. Challengers will submit their challenges 
via the USAC portal. The Commission directs the Bureaus to work with 
USAC to establish the USAC portal through which a challenger will be 
able to access the confidential provider-specific information that is 
pertinent to the challenge, as well as submit its challenge, including 
all supporting evidence and required certifications.
    26. Once a challenger submits its evidence in the USAC portal, the 
system will conduct an automatic validation to determine whether the 
challenger provided sufficient evidence to justify proceeding with each 
submitted challenge. In the event the data fail automatic validation 
for an area, the system will flag the problem for the challenger. If 
the failure occurs while the challenge window is still open, the 
challenger may submit additional or modified data, or modify its 
challenged area contours, as required, to resolve the problem. Once the 
challenge window closes, however, the challenger will have no further 
opportunity to correct existing, or provide additional, data in support 
of its challenge. Only those challenges to areas that are certified by 
a challenger at the close of the window will proceed.

[[Page 42477]]

    27. A challenged party will have an opportunity to submit 
additional data via the USAC portal in response to a certified 
challenge (the response window). If a challenged party does not oppose 
the challenge, it does not need to submit any information. After the 
response window closes, Commission staff will adjudicate certified 
challenges and responses.
    28. The Commission finds that, in conjunction with the new data 
collection, this framework for the MF-II challenge process 
appropriately balances the need for accuracy against the burdens 
imposed on interested parties. The Commission anticipates that using 
standardized new coverage data as the basis for its initial eligibility 
map will improve the accuracy and reliability of the information 
available to potential challengers, which should result in fewer, more 
targeted challenges and should reduce the administrative burdens on 
Commission staff, challengers, providers, and other stakeholders. 
Requiring challengers to submit proof of lack of unsubsidized, 
qualified 4G LTE coverage should deter frivolous challenges based on 
anecdotal evidence and, thereby, expedite the challenge process. 
Moreover, allowing, but not requiring, challenged parties to submit 
data in response to a challenge will both promote fairness and minimize 
burdens on interested parties.
    29. The Commission directs the Bureaus to issue a public notice or 
order (following the Bureaus' issuance of a notice and opportunity for 
comment) detailing instructions, deadlines, and requirements for filing 
a valid challenge, including file formats, parameters, and other 
specifications for conducting speed tests.

A. Parameters for Generating Initial Eligible Areas Map

    30. In the new, one-time MF-II data collection, the Commission will 
require providers to file propagation maps and model details with the 
Commission indicating their current 4G LTE coverage, as defined by 
download speeds of 5 Mbps at the cell edge with 80 percent probability 
and a 30 percent cell loading factor. The Commission finds that a 
download speed of 5 Mbps with 80 percent cell edge probability, which 
is equivalent to approximately 92 percent cell area probability, and a 
30 percent cell loading factor, strikes a reasonable balance between 
expanding LTE into unserved areas and enhancing existing suboptimal LTE 
service areas, which promotes the optimal use of limited public funds.
    31. The Commission acknowledges that the 80 percent cell edge 
probability and 30 percent cell loading factor parameters required for 
the data collection are lower than those proposed in the industry 
consensus proposal. Adopting the higher cell edge probability and cell 
loading factor parameters in the industry consensus proposal, however, 
would increase the likelihood that MF-II funds would be directed to 
areas that already meet the MF-II performance requirement of a 10 Mbps 
median download speed. One wireless provider submitted recent LTE speed 
measurement data analysis based upon nationwide wireless provider 
performance in specific states. The analysis showed that in some cases 
less than 2 percent of the data points achieved a 5 Mbps download speed 
90 percent of the time. Indeed, the Commission estimates that the cell 
area median download speed in the cell areas associated with the 
industry consensus proposal's proposed parameters would be 
significantly in excess of 10 Mbps and therefore higher than the MF-II 
performance requirement. In fact, the Commission estimates that areas 
larger than industry consensus proposal's proposed cell areas would 
have median download speeds in excess of 10 Mbps. The Commission's 
analysis shows that the 80 percent cell edge probability it adopts 
corresponds with a 92 percent cell area probability, which means users 
would have a greater than 90 percent chance of achieving a download 
speed of at least 5 Mbps across the entire coverage area of a cell. In 
addition, these parameters exceed the parameters that wireless 
operators typically use when deploying networks into previously-
unserved areas (greenfield builds) of 75 percent cell edge probability 
and 90 percent cell area probability. In light of the difficulties of 
precisely determining the coverage areas where service with a minimum 
download speed of 5 Mbps is available, the Commission finds that a cell 
edge probability of 80 percent and a cell area probability of 92 
percent appropriately balance the concern of misrepresenting coverage 
with its priority of directing its limited universal service funds on 
areas most in need of support. Further, adoption of the industry 
consensus proposal's proposed parameters would likely result in MF-II 
support being used to upgrade or over-build current 4G LTE networks 
rather than to expand 4G LTE coverage to unserved areas.
    32. In addition, the Commission believes that a 30 percent cell 
loading factor in rural areas is more appropriate for MF-II purposes 
than the industry consensus proposal's proposed 50 percent cell loading 
factor, which is more typical in non-rural areas where there is more 
uniform traffic. Typical cell site density in rural areas is much lower 
than in urban areas, resulting in an overall lower interference 
environment. Additionally, when compared to urban and suburban areas, 
rural areas typically have lower amounts of uniform traffic among cells 
because of the varied population distribution across cells, lower 
numbers of simultaneous users, and lower overall demands on the network 
over time. As such, cell loading is typically lower in rural areas than 
in urban and suburban areas. The lower cell edge probability and cell 
loading factor parameters for the data collection will likely decrease 
the eligible areas and target the limited MF-II funds to more areas 
that are currently unserved or served by 4G LTE networks with a median 
download speed below 10 Mbps. If the Commission was to adopt a lower 
cell edge probability, it would unnecessarily risk focusing funds on 
the costliest to serve areas, thus decreasing the square miles 
receiving support in the auction and consequently reducing the cost 
effectiveness of the MF-II program. A lower cell edge probability 
requirement would likely decrease the eligible areas with marginal LTE 
coverage. Thus, using its predictive judgment, the Commission finds 
that these parameters meet its standards for the availability of 
coverage and are best suited to advancing its goals for MF-II.
    33. The Commission recognizes that some may have concerns about the 
effect of the parameters it adopts on the availability of certain 
mobile applications, for instance telemedicine and precision 
agriculture, in rural areas. The Commission believes those concerns are 
misplaced. Remote monitoring and diagnosing of medical conditions and 
precision agriculture, which uses satellite GPS positioning and remote 
sensors in farming operations, are typically lower-bandwidth, machine-
to-machine applications and should not significantly increase the 
overall cell loading or require speeds greater than 5 Mbps. Further, 
the Commission believes that focusing its limited funds on expanding 
service to the areas that currently lack 4G LTE service is the best way 
to increase the availability of these services in rural areas. Applying 
a higher cell loading factor more typical of an urban or suburban area 
or increasing the cell edge probability even further is more likely to 
direct funds to more areas that already have coverage

[[Page 42478]]

that can support telemedicine and precision agriculture applications.
    34. As one party proposed, filers shall report an outdoor level of 
coverage. The coverage boundaries shall have a resolution of 100 meters 
(approximately three arc-seconds) or better, and shall likewise use an 
appropriate clutter factor and terrain model with a resolution of 100 
meters or better. In addition, filers shall use the optimized RF 
propagation models and parameters used in their normal course of 
business. The Commission directs the Bureaus to specify what other 
propagation model details and parameters must be filed alongside such 
propagation maps in a subsequent public notice. In addition to 
submitting propagation maps and model details of 4G LTE coverage, 
providers shall report the signal strength (RSRP) and clutter factor 
categories used to generate their coverage maps. If the signal strength 
in the coverage maps varies regionally, then such variations must be 
reported. The providers must report the loss value associated with each 
clutter factor category used in their coverage maps. Additionally, 
providers shall submit a list of at least three readily-available 
handsets that challengers can use to conduct speed tests, as well as a 
certification, under penalty of perjury, by a qualified engineer that 
the propagation maps and model details reflect the filer's coverage as 
of the generation date of the map in accordance with all other 
parameters. The Commission clarifies that the handsets identified by 
providers must include at least one compatible with industry-standard 
drive test software. The Bureaus will issue further guidance or 
requirements on the handsets that may be used for speed tests in a 
subsequent public notice.
    35. The Commission finds that requiring a specific signal strength 
benchmark, as sought by several commenters, is not necessary for these 
propagation maps because the cell edge speed threshold requirement 
subsumes a specific signal strength value depending on specific 
operating signal bandwidth and the network deployment configurations. A 
10 MHz bandwidth has double the noise power of the 5 MHz bandwidth; 
thus, it requires higher signal strengths for the same signal quality 
(SNR) requirement. The thermal noise power equation indicates that 
noise power is directly proportional to the bandwidth. The Commission's 
analysis comparing results of theoretical propagation models and actual 
speed test data indicates that the signal strength parameter in 
propagation models may not be closely correlated with actual on-the-
ground data in a particular geographic area. As a result, and in light 
of the differing technical characteristics of service providers' LTE 
deployments, the Commission decides to benchmark download speed, which 
is what the customer receives, rather than signal strength, to 
determine whether a particular geographic area is eligible or not for 
MF-II support. With this in mind, the Commission sets the download 
speed at 5 Mbps at 80 percent probability, and will evaluate challenges 
on the basis of measured download speeds. In other words, the 
topography of an area as well as summer foliage may lead to differences 
between expected signal strength and the actual experienced speed of 
consumers. Thus, the Commission's cell edge speed threshold requirement 
should result in more accurate data in America's deserts, prairies, 
rolling hills, mountains, and forests than an across-the-board signal 
strength parameter. The Commission is mindful, however, of the concerns 
of some providers regarding signal strengths, and the Commission will, 
as noted above, require providers to report signal strength with their 
coverage maps. The signal strength information will be available to 
challengers. When issuing filing instructions, the Commission directs 
the Bureaus to explain what additional parameters (such as signal 
strength and clutter categories) and information must be included with 
coverage map filings, and subsequently disclosed to challengers in the 
challenge process.
    36. In a public notice to be released later in the MF-II process, 
the Commission directs the Bureaus to provide instructions for how to 
file the data submission, including a data specification, formatting 
information, and any other technical parameters that may be necessary 
for such filings. In order to provide ample time for carriers to 
generate data in accordance with these parameters, the Commission 
directs the Bureaus to set the deadline for carriers to submit data for 
the one-time data collection at least 90 days after the release of the 
filing instructions public notice.

B. Interested Parties Eligible To Participate

    37. Based on the Commission's experience in the challenge processes 
for MF-I and CAF-II, and after carefully weighing the record on this 
issue, the Commission concludes that government entities (state, local, 
and Tribal) and all service providers required to file Form 477 data 
with the Commission are best suited to participate as challengers in 
the MF-II challenge process. Allowing these interested parties to 
participate in the challenge process satisfies the Commission's policy 
goal of administrative efficiency because they are most likely to be 
able to acquire the requisite data sufficient to support a valid 
challenge and, in many cases, are already familiar with filing data 
with USAC. Many Form 477 filers have a pre-existing relationship (i.e., 
an account) with USAC because they are required to make filings on a 
regular basis with USAC. To the extent that any Form 477 filer or 
government entity eligible to participate does not have an account with 
which to authenticate against the USAC single sign-on system by the 
time the USAC portal opens, such interested parties will be required to 
request an account. The Commission directs the Bureaus to detail this 
process along with other instructions to file a valid challenge in a 
subsequent public notice.
    38. As a practical matter, the Commission does not expect that an 
individual consumer would have the time, ability, or resources to file 
a valid challenge. Instead, the Commission anticipates that an 
individual consumer will be best served by participating in the MF-II 
challenge process through his or her state, local, or Tribal government 
entity. This expectation is supported by past practice before the 
agency, as individual consumers did not file challenges in either the 
MF-I or CAF proceedings. If, however, a consumer, organization, or 
business believes that its interests cannot be met through its state, 
local, or Tribal government entity, and it wishes to participate in the 
process as a challenger, it is free to file a waiver with the 
Commission for good cause shown, either on its own or with the 
assistance of an organization. Waivers may be submitted by email to 
<a href="/cdn-cgi/l/email-protection#23425640574a4c4d1a1317634540400d444c55"><span class="__cf_email__" data-cfemail="76170315021f19184f46423610151558111900">[email protected]</span></a> or delivered in hard copy to Margaret W. Wiener, 
Chief, Auctions and Spectrum Access Division, Wireless 
Telecommunications Bureau, FCC, 445 12th Street SW., Room 6-C217, 
Washington, DC 20554. The Commission anticipates granting waivers in 
cases in which an individual, organization, or business demonstrates a 
bona fide interest in the challenge process and a plausible ability to 
submit a valid challenge. And the Commission encourages state 
commissions, state-level broadband deployment offices, county and 
municipal executives and councils, Tribal governments, and other 
governmental entities to participate robustly in the challenge process 
to ensure that the Commission's information about where service is or 
is not available is as accurate as possible.
    39. Moreover, given the improvements the Commission expects to see 
in the standardized information

[[Page 42479]]

that will be collected for MF-II purposes, it anticipates that there 
should be less concern associated with eligible area determinations, 
which, in turn, should reduce the likelihood that individual consumers 
should have to bear the burden of seeking to participate in the 
process. As the Commission explained in the Mobility Fund II FNPRM, 
``the challenge process must not impede the implementation of MF-II 
support.'' The Commission's decision therefore fosters its commitment 
to designing a challenge process that is as efficient and open as 
possible.

C. Types of Challenges

    40. Because the Commission is undertaking a new collection of 
standardized, more reliable, and more recent 4G LTE coverage data, it 
will only permit challenges for areas that the Bureaus identify as 
ineligible for MF-II support. The Commission anticipates that a party 
that submits a challenge for an eligible area will likely be the 
unsubsidized service provider that submitted and certified the data 
used to make the initial eligibility determination for the challenged 
area. As such, the challenge would consist of nothing more than an 
update to or correction of the coverage data submitted by the 
unsubsidized service provider during the new data collection in 
compliance with the Commission's new requirements. Since, under the 
framework the Commission adopts, service providers will be required to 
update their coverage data shortly before the start of the challenge 
process, permitting such ``corrections'' within the challenge process 
would be administratively inefficient and unnecessarily delay the 
deployment of MF-II support. The Commission is confident that the new 
data collection will give providers ample opportunity to correct and/or 
update the coverage data previously provided via Form 477. Therefore, 
the Commission will not permit challenges for areas that the Bureaus 
identify as eligible for MF-II support.

D. Restricting De Minimis Challenges

    41. As part of the framework the Commission adopts for the MF-II 
challenge process, it will limit challenges to de minimis geographic 
areas to increase the efficiency of the challenge process and reduce 
the administrative complications of resolving challenges for very small 
coverage gaps. Challengers will not be required to match up challenged 
areas to census blocks or census block groups (CBGs). The Commission 
believes this change will ease the filing burden on challengers because 
the data required will align more closely with data already collected 
and maintained in the normal course of business. Consistent with this 
approach, the Commission will not link de minimis challenges to CBGs, 
because a significant portion of CBGs are small enough (less than 1 
square kilometer) that establishing a minimum area for challenges as a 
portion of a CBG would make the de minimis challenge area so small as 
to be inconsequential for improving efficiency in the challenge 
process. Accordingly, the Commission will require only that any 
challenged area be of a minimum size of at least one square kilometer. 
Ineligible areas of less than one square kilometer can be subject to 
challenge insofar as they are part of a challenge where the total size 
of areas being challenged exceeds the de minimis size requirement. This 
minimum size requirement will prevent challenges solely regarding 
minor, patchy areas often at the edge of a covered area, which aligns 
with the overall goal of using MF-II funds to expand service to 
unserved areas.

E. Data Required for Submission of Challenge

    42. The Commission finds that a challenger must submit detailed 
proof of lack of unsubsidized, qualified 4G LTE coverage in support of 
its challenge. For each state, a challenger must identify the specific 
area(s) it wants to challenge and submit actual outdoor speed test data 
that satisfy the parameters the Commission adopts in the MF-II 
Challenge Process Order, as well as any other parameters that the 
Commission or Bureaus may implement. If the challenged area(s) extend 
across state borders, a challenger will need to initiate separate 
challenges for each state into which the challenged area(s) extend. The 
speed test data must be collected using the latest devices specifically 
authorized by the providers that submitted 4G LTE coverage data in 
response to the new, one-time data collection discussed above (i.e., 
provider-specified handsets). The Commission finds that such ``on the 
ground'' data collected using standardized parameters are a reliable 
form of evidence because they simulate consumers' actual experience.
    43. These requirements strengthen the Commission's ability to 
design an administratively efficient challenge process that does not 
impede implementation of MF-II. The Commission finds that requiring 
challengers to submit detailed proof of lack of unsubsidized, qualified 
4G LTE coverage instead of ``anecdotal evidence'' is fair, minimizes 
the burden on providers and Commission staff, and should help deter 
excessive and unfounded challenges that could delay the deployment of 
MF-II support. The Commission agrees with several commenters that 
requiring actual speed test data will not impose an excessive burden on 
challengers, including small carriers. The Commission expects that 
challenged areas will be sufficiently circumscribed that challengers 
will not need to collect speed test data over unnecessarily large 
areas. Further, the Commission expects that small carriers are likely 
to already own drive test equipment. To the extent they do not, the 
Commission's decision to allow application-based tests provides a less 
expensive and more mobile means of collecting data. Thus, the 
Commission declines to allow a challenger to initiate the challenge 
process with an unsubstantiated good-faith assertion of lack of 
unsubsidized, qualified 4G LTE coverage.
1. Standard Parameters
    44. Although the Commission agrees with commenters that some 
flexibility with testing standards is warranted, it finds it necessary 
to adopt clear guidance and parameters on speed test data to ensure 
that the evidence submitted by challengers is reliable, accurately 
reflects consumer experience in the challenged area, and can be 
analyzed quickly and efficiently. As a preliminary matter, the 
Commission will allow challengers to submit speed data from hardware- 
or software-based drive tests or application-based tests that cover the 
challenged area. To minimize the burdens on challengers, the Commission 
will not require that an independent third party conduct the speed 
tests. The Commission will require that all speed tests be conducted 
pursuant to standard parameters using Commission-approved testing 
methods on pre-approved handset models. Accordingly, the Commission 
expects that it would be difficult to manipulate the data collected 
regardless of whether a challenger uses drive-based or application-
based tests as both types of tests can automatically generate data 
reports that can conform to the specifications for the data submission. 
The Commission will, however, require that the speed test data be 
substantiated by the certification of a qualified engineer or official 
under penalty of perjury. For challengers that are governmental 
entities and do not have a qualified engineer available to certify, the 
Commission will allow certification by a government official authorized 
to act on behalf of the organization and

[[Page 42480]]

with actual knowledge of the accuracy of the underlying data.
    45. A challenger must provide proof of lack of unsubsidized, 
qualified 4G LTE coverage in the form of measured download throughput 
test data for each of the unsubsidized providers claiming qualified 4G 
LTE coverage in the challenged area. As part of the new MF-II data 
collection, the Commission will require service providers with 
qualified 4G LTE coverage to identify at least three readily available 
handset models appropriate for testing those providers' coverage. The 
Commission will require providers to specify at least one handset that 
is compatible with industry-standard drive test software. The 
Commission directs the Bureaus to propose and adopt further guidance on 
the types of devices that may be used for speed tests in the subsequent 
public notices. Challengers electing to use application-based tests and 
software-based drive tests must use the applicable handsets specified 
by each unsubsidized service provider with coverage in the challenged 
area. In addition, to accurately reflect consumer experience in the 
challenged area, the challenger must purchase an appropriate service 
plan from each unsubsidized service provider in the challenged area. An 
appropriate service plan would allow for speed tests of full network 
performance, e.g., an unlimited high-speed data plan. If there are 
multiple unsubsidized service providers in the challenged area, the 
challenger must purchase service plans that are comparable (i.e., 
similar with respect to services provided).
    46. All speed tests must be conducted between the hours of 06:00 
a.m. and 12:00 a.m. local time, when consumers are most likely to use 
mobile broadband data. To ensure that the speed test data reflect 
consumer experience throughout the entire challenged area, a challenger 
must take speed measurements that are no more than a fixed distance 
apart from one another within the challenged area, and which 
substantially cover the entire area. The Commission directs the Bureaus 
to adopt the specific value for the maximum distance between speed 
tests after seeking comment in a subsequent public notice. This value 
will be no greater than one mile. This requirement serves as an upper 
bound, and a challenger will be free to submit measurements taken more 
frequently. While the Commission declines to adopt the specific 
parameter here, it is convinced that a value within this range will 
strike the correct balance between the benefits of increased accuracy, 
and the harms of burdens on small carriers and to the efficient 
administration of challenges. The Commission also agrees with one 
commenter that the data should reflect recent performance. However, 
given upcoming, expected deployment of new 4G LTE service in 
conjunction with the Commission's decision to perform a new data 
collection, the Commission is concerned that speed measurements taken 
before the submission of updated coverage maps may not reflect the 
current consumer experience. Thus, the Commission will only accept data 
that were collected after the publication of the initial eligibility 
map and within six months of the scheduled close of the challenge 
window.
    47. The Commission directs the Bureaus to seek comment on and to 
implement any additional parameters and/or to require the submission of 
additional types of relevant data, such as signal strength tests, and 
then to implement any such parameters or requirements as appropriate to 
ensure that speed tests accurately reflect consumer experience in the 
challenged area, by issuing an order or public notice providing 
detailed instructions, guidance, and specifications for conducting 
speed tests.
2. Validation of Challenger's Data
    48. The Commission adopts a general framework for automatic system 
validation of a challenger's evidence, and it directs the Bureaus to 
work with USAC to implement specific parameters for the validation 
process. Using an automated process is the most efficient way to 
evaluate the data submitted by a challenger because it ensures that the 
objective validation criteria are applied consistently across every 
challenge.
    49. Under this approach, at the outset the USAC system will 
superimpose each identified challenged area on the initial eligibility 
map and will remove any portions that overlap eligible areas. If a 
challenged area meets the de minimis area threshold, that challenge 
will proceed. If it does not meet the threshold, the system will flag 
the failure and will not accept that challenge for submission unless 
and until the challenger submits during the challenge window new data 
that meet the threshold.
    50. Next, the USAC system will analyze the geographic coordinates 
of the points at which the challenger conducted the speed tests and 
will validate that the data associated with each speed test point meet 
the specifications for speed tests. To be counted towards a valid 
challenge, the speed test must record a download speed less than 5 Mbps 
(counted speed tests) and meet all other standard parameters. In order 
to implement the requirement that the tests substantially cover the 
entire challenged area and that each point is no more than a fixed 
distance apart, the system will create a buffer (i.e., draw a circle of 
fixed size) around each counted speed test point and calculate the area 
of these buffered points (speed test buffer area). The system will 
apply a buffer with a radius equal to half of the maximum distance 
parameter, and will trim any portion of the buffer that is outside of 
the challenged area. In addition, where a challenged area overlaps the 
submitted coverage map of more than one incumbent provider, the system 
will require counted speed tests for each provider in order to 
calculate the speed test buffer area. For each challenged area, if the 
speed test buffer area covers at least 75 percent of the challenged 
area, the challenge will pass validation, and once certified, these 
challenged area(s) will be presented to the incumbent provider(s) for a 
response. The area of a circle with diameter superimposed on a square 
with width is approximately 78.5 percent, therefore setting the 
validation threshold at 75 percent area coverage ensures that speed 
measurements conducted no more than a fixed distance apart from one 
another in a challenged area are sufficient to establish coverage of 
the entire area, when each measurement point is buffered by a radius of 
half of the fixed distance parameter. If the speed test buffer area 
does not cover at least 75 percent of the challenged area, the 
challenge for that area will fail validation unless the challenger 
submits new evidence or modifies its challenge during the challenge 
window such that it meets the 75 percent threshold.
    51. The USAC system will require speed tests to substantially cover 
the entire challenged area (i.e., 75 percent) regardless of any 
characteristics of the area, including whether any part of the area is 
inaccessible due to terrain, private property, or other reason. The 
Commission declines to provide any special accommodations for a 
challenger to indicate that it was unable to access any part of the 
challenged area. Challengers have the burden of proving that an area 
deemed ineligible is, in fact, not covered by at least one carrier 
providing qualified, unsubsidized 4G LTE service. Providing special 
accommodations that would relieve challengers of the need to furnish 
actual evidence would be inconsistent with this decision, would be 
difficult to administer, and would increase the likelihood of 
gamesmanship, none of which further the Commission's goal of

[[Page 42481]]

conducting a fair and efficient challenge process in a timely manner. 
The Commission notes that while the system will not provide any special 
accommodations, challengers may still include areas with inaccessible 
land in their challenges so long as the submitted speed measurements 
otherwise meet the validation threshold showing that 75 percent of the 
area has insufficient coverage. Moreover, this decision is confined 
only to the challenge process; a bidder in the MF-II auction may still 
bid for support to serve eligible areas that include land that may be 
inaccessible. A bidder that ultimately wins support to serve an area 
with inaccessible lands will remain responsible for demonstrating its 
performance in serving that area.
    52. Each challenged area that meets the de minimis threshold will 
be considered individually. Challenged areas that meet the validations, 
including the 75 percent speed test buffer area overlap, will proceed 
once certified by the challenger. The USAC system will determine which 
portions of a challenged area overlap which 4G LTE providers, and 
respondents will see only those challenged areas and speed test buffer 
areas that overlap their 4G LTE coverage.

F. Opportunity To Respond to Challenges

    53. The Commission will provide challenged parties a limited 
opportunity to submit additional data in response to a challenge. The 
Commission finds that this approach promotes its goals of a fair and 
fiscally responsible MF-II program while minimizing the burdens on 
challenged parties. Giving challenged parties an opportunity to contest 
a challenge and submit more detailed coverage data to supplement the 
information provided during the initial data collection will help to 
ensure that only areas truly lacking unsubsidized, qualified 4G LTE 
coverage will receive MF-II support.
    54. After the challenge window closes, the response window will 
open. Using the USAC portal, challenged parties will have 30 days after 
the opening of the response window to: (1) Access and review the data 
submitted by the challenger with respect to the challenged area; and 
(2) submit additional data/information to oppose the challenge (i.e., 
demonstrate that the challenger's speed test data are invalid or do not 
accurately reflect network performance). If a respondent chooses to 
respond, it need only conduct speed tests of its own network (or gather 
its own geolocated, device-specific data from network monitoring 
software) in the disputed areas, which should require less time to 
complete than a challenger testing multiple networks in multiple areas 
for data to substantiate a valid challenge. Hence, the Commission 
agrees with commenters that propose that the response window does not 
need to be open for the same amount of time as the challenge window. If 
a challenged party does not oppose the challenge, it does not need to 
submit any additional data. A challenged party will not, however, have 
a further opportunity to submit any additional data for the 
Commission's consideration after the response window closes.
    55. The Commission declines to require a specific level of response 
from challenged parties. The Commission will accept certain technical 
information that is probative regarding the validity of a challenger's 
speed tests including speed test data and other device-specific data 
collected from transmitter monitoring software. If a challenged party 
chooses to submit its own speed test data, the data must conform to the 
same standards and requirements the Commission adopts in the MF-II 
Challenge Process Order for challengers, except that it will only 
accept data from challenged parties that were collected after the 
publication of the initial eligibility map and within six months of the 
scheduled close of the response window. Any evidence submitted by a 
challenged party in response to a challenge must be certified by a 
qualified engineer or official under penalty of perjury. Since the 
Commission is not requiring a specific level of response from 
challenged parties, the response data will not be subject to USAC's 
automatic system validation process.
    56. Although the Commission is willing to accept certain technical 
data that are probative regarding the validity of a challenger's speed 
tests, the data must be reliable and credible to be useful during the 
adjudication process. Specifically, technical data other than speed 
tests submitted by a challenged party, including data from transmitter 
monitoring software, should include geolocated, device-specific 
throughput measurements or other device-specific information (rather 
than generalized key performance indicator statistics for a cell-site) 
in order to be useful to help refute a challenge. The Commission agrees 
with commenters that ``on the ground'' data collected using 
standardized parameters are a reliable form of evidence because they 
simulate what consumers actually experience. Thus, the Commission 
expects that speed test data would be particularly persuasive evidence 
for challenged parties to submit to refute a challenge, especially 
since it will be easier for the Bureaus to compare equivalent data. 
While the system will not validate a challenged party's response data, 
to be probative in order to refute a challenge, speed tests must record 
a download speed of at least 5 Mbps and meet all other standard 
parameters.
    57. The Commission directs the Bureaus to issue an order or public 
notice implementing any additional requirements that may be necessary 
or appropriate for data submitted by a challenged party in response to 
a challenge. Such order or notice will contain any further detailed 
instructions, guidance, and specifications for responding to a 
challenge.

G. Adjudication of Challenges

    58. Consistent with the standard of review adopted in the Connect 
America Fund Report & Order, 78 FR 38227, June 26, 2013, and the CAF II 
Challenge Process Order, 78 FR 32991, June 3, 2013, the Commission 
adopts a preponderance of the evidence standard to evaluate the merits 
of any challenges. Additionally, the Commission adopts its proposal 
that the challenger shall bear the burden of persuasion. If, upon 
review of all the evidence submitted in the challenge, it appears that 
the challenger has not submitted sufficient evidence to demonstrate 
that it is more likely than not that the challenged area does not have 
qualified LTE coverage, the challenge will fail under this standard. 
Following the close of the response window, the Bureaus will adjudicate 
certified challenges based upon this standard and the evidence 
submitted by the challenger and challenged party(ies) to determine 
whether adjustments to the initial eligibility map are appropriate. The 
Bureaus will weigh the evidence submitted by challengers and challenged 
parties based on its reliability, giving more credence to data that 
were collected pursuant to the parameters established in the MF-II 
Challenge Process Order and any additional standards that the 
Commission or Bureaus may adopt. The Commission retains discretion to 
discount the weight of a challenger's evidence if a challenge appears 
designed to undermine the goals of MF-II. Particularly in light of the 
steps the Commission has taken to address questions about the 
reliability of Form 477 data in response to the comments, the 
Commission concludes that it is appropriate that the burden rest on the 
challenger. The Commission finds that placing the burden of proof on 
the

[[Page 42482]]

challenger both incentivizes challengers to present a full evidentiary 
record as well as discourages frivolous filings, thus supporting its 
goal of administrative efficiency and allowing for disbursement of 
support to unserved areas without unreasonable delay.
    59. With respect to the evidentiary standard, comments submitted in 
the record support a preponderance of the evidence standard, and no 
commenters supported the higher standard of clear and convincing 
evidence. The preponderance of the evidence standard of review is 
consistent with the CAF challenge processes, as well as with a wide 
body of Commission precedent. A more demanding standard would impose an 
evidentiary burden that is in tension with the Commission's overall 
goal of making the most accurate determinations based on the evidence 
of record. The Commission finds that applying a preponderance of the 
evidence standard strikes the appropriate balance, potentially reducing 
the number of disputed areas and ensuring that the Commission has the 
data necessary to evaluate the merits of any challenges, while not 
unduly burdening smaller providers.

V. Procedural Matters

A. Paperwork Reduction Act Analysis

    60. The MF-II Challenge Process Order contains new information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. It will be submitted to the Office of 
Management and Budget (OMB) for review under section 3507(d) of the 
PRA. OMB, the general public, and other Federal agencies are invited to 
comment on the new information collection requirements contained in 
this proceeding. In addition, the Commission notes that pursuant to the 
Small Business Paperwork Relief Act of 2002, it previously sought 
specific comment on how the Commission might further reduce the 
information collection burden for small business concerns with fewer 
than 25 employees. The Commission describes impacts that might affect 
small businesses, which include most businesses with fewer than 25 
employees, in the Final Regulatory Flexibility Analysis (FRFA) in 
Appendix A of the MF-II Challenge Process Order.

B. Congressional Review Act

    61. The Commission will send a copy of the MF-II Challenge Process 
Order to Congress and the Government Accountability Office pursuant to 
the Congressional Review Act.

C. Final Regulatory Flexibility Analysis

    62. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Further Notice section of the Mobility Fund II 
FNPRM adopted in February 2017. The Commission sought written public 
comment on the proposals in the Mobility Fund II FNPRM including 
comment on the IRFA. The Commission received three comments in response 
to the IRFA. The Commission also included a Final Regulatory 
Flexibility Analysis (FRFA) in the Report and Order section of the 
February 2017 Mobility Fund II Report and Order. Seven petitions for 
reconsideration, one comment in support of a petition for 
reconsideration, two oppositions to the petitions, and six replies to 
the oppositions were received by the Commission in response to the 
Mobility Fund II Report and Order. This FRFA addresses the comments on 
the IRFA and analyzes the modifications adopted in response to the 
petitions, comments, and responsive filings to the Mobility Fund II 
Report and Order. This FRFA conforms to the RFA.
1. Need for, and Objectives of, This Order on Reconsideration and 
Second Report and Order
    63. Rural and high-cost areas of the United States trail 
significantly behind urban areas in the growth of 4G LTE service. The 
Mobility Fund Phase II (MF-II) will use a market-based, multi-round 
reverse auction and allow the Commission to redirect its limited 
resources to those areas of the country lacking unsubsidized, qualified 
4G LTE service.
    64. In the MF-II Challenge Process Order, the Commission adopts 
procedures for a challenge process to supplement its coverage maps by 
providing an opportunity for interested parties to provide up-to-date 
LTE coverage data to determine a map of areas presumptively eligible 
for MF-II support. Interested parties will have the ability to contest 
this initial determination that an area is ineligible for MF-II support 
because an unsubsidized service provider submitted data that 
demonstrates it is providing qualified 4G LTE service there. The 
challenge process adopted in the MF-II Challenge Process Order enables 
the Commission to resolve eligible-area disputes in an administratively 
efficient and fiscally responsible manner.
2. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA
    65. The Commission received one comment, one reply comment, and one 
written ex parte submission bearing on the IRFA. CCA and RWA believe 
that a challenge process without a required data collection would 
better fulfill the directive of the RFA. NTCA similarly expressed 
concern that requiring all providers, including small entities, to file 
new Form 477 data to determine eligibility for MF-II support by area 
would be unnecessary and contrary to the directive of the RFA.
    66. The Commission is sensitive to the burden on small entities and 
other providers associated with the new data collection. However, the 
benefits of standardized, reliable data on which to base eligibility 
determinations outweigh the costs associated with their collection. 
Moreover, the use of newly collected data enables the Commission to 
adopt a streamlined challenge process that will reduce the burden on 
challengers and providers that respond to challenges. Fewer small 
providers will be forced to bring a challenge, and challenges will be 
more directed, more accurate, and less onerous because the Commission 
will have the best-available starting point of standardized data. The 
Commission also eases the burden of the new data collection on small 
entities by limiting the one-time data collection to providers who have 
previously reported 4G LTE coverage in Form 477 and have qualified 4G 
LTE coverage. The limited scope of the collection addresses the 
concerns of some of the smaller providers who objected to the potential 
burden of a universal new filing. The Commission has eased the burden 
of the collection by only requiring a filing from those who have easy 
access to the necessary data. Additional steps taken to minimize the 
burden of the challenge process on small entities are discussed below.
3. Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration
    67. Pursuant to the Small Business Jobs Act of 2010, which amended 
the RFA, the Commission is required to respond to any comments filed by 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA) in response to the proposed rule(s) and to provide a detailed 
statement of any change made to the proposed rule(s) as a result of 
those comments.
    68. The Chief Counsel did not file any comments in response to the 
proposed procedures in this proceeding.

[[Page 42483]]

4. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    69. 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 rules adopted herein. 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.
    70. Small Entities, Small Organizations, Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes here, at the outset, three broad groups of small 
entities that could be directly affected herein. First, while there are 
industry-specific size standards for small businesses that are used in 
the regulatory flexibility analysis, according to data from the SBA's 
Office of Advocacy, in general a small business is an independent 
business having fewer than 500 employees. These types of small 
businesses represent 99.9 percent of all businesses in the United 
States which translates to 28.8 million businesses. Next, the type of 
small entity described as a ``small organization'' is generally ``any 
not-for-profit enterprise which is independently owned and operated and 
is not dominant in its field.'' Nationwide, as of 2007, there were 
approximately 1,621,215 small organizations. Finally, 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.'' U.S. Census 
Bureau data for 2012 indicate that there were 89,476 local governmental 
jurisdictions in the United States. The Commission estimates that, of 
this total, as many as 88,715 entities may qualify as ``small 
governmental jurisdictions.'' Thus, the Commission estimates that most 
governmental jurisdictions are small.
    71. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. The 
appropriate size standard under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. For this industry, U.S. 
Census data for 2012 show that there were 967 firms that operated for 
the entire year. Of this total, 955 firms had employment of 999 or 
fewer employees and 12 had employment of 1000 employees or more. Thus 
under this category and the associated size standard, the Commission 
estimates that the majority of wireless telecommunications carriers 
(except satellite) are small entities.
    72. The Commission's own data--available in its Universal Licensing 
System--indicate that, as of October 25, 2016, there are 280 Cellular 
licensees that will be affected by its actions. The Commission does not 
know how many of these licensees are small, as the Commission does not 
collect that information for these types of entities. Similarly, 
according to internally developed Commission data, 413 carriers 
reported that they were engaged in the provision of wireless telephony, 
including cellular service, Personal Communications Service, and 
Specialized Mobile Radio Telephony services. Of this total, an 
estimated 261 have 1,500 or fewer employees, and 152 have more than 
1,500 employees. Thus, using available data, the Commission estimates 
that the majority of wireless firms can be considered small.
    73. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as ``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 communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has developed a small business size standard 
for Wired Telecommunications Carriers, which consists of all such 
companies having 1,500 or fewer employees. U.S. Census data for 2012 
show that there were 3,117 firms that operated that year. Of this 
total, 3,083 operated with fewer than 1,000 employees. Thus, under this 
size standard, the majority of firms in this industry can be considered 
small.
5. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    74. In the MF-II Challenge Process Order, the Commission adopts 
parameters both for establishing an eligible area baseline prior to the 
MF-II challenge process and for a streamlined challenge process. The 
process will efficiently resolve disputes about areas shown as eligible 
for MF-II support on the initial eligibility map that will be generated 
based on the new collection of 4G LTE coverage data. The Commission 
summarizes the reporting and other obligations of the MF-II challenge 
process in the accompanying MF-II Challenge Process Order. Additional 
information on these requirements can be found in the MF-II Challenge 
Process Order at paragraphs 27-63.
    75. To establish the map of areas presumptively eligible for MF-II 
support, all current Form 477 filers that have previously reported 
qualified 4G LTE coverage and have qualified 4G LTE coverage based on 
the data specification set forth in the MF-II Challenge Process Order 
will be required to submit to the Commission a one-time new data filing 
detailing 4G LTE coverage. Providers will be required to file 
propagation maps and model details indicating current 4G LTE coverage, 
as defined by download speeds of 5 Mbps at the cell edge with 80 
percent probability and a 30 percent cell loading factor. Filers should 
report an outdoor level of coverage. The coverage boundaries shall have 
a resolution of 100 meters (approximately three arc-seconds) or better 
and shall likewise use an appropriate clutter factor and terrain model 
with a resolution of 100 meters or better. Providers shall report the 
signal strength (RSRP) and clutter factor categories used to generate 
their coverage maps. If the signal strength in the coverage maps varies 
regionally, then such variations must be reported. The providers must 
report the loss value associated with each clutter factor category used 
in their coverage maps. In addition, filers should use the optimized RF 
propagation models and parameters that they have used in their normal 
course of business, subject to further

[[Page 42484]]

requirements set forth in subsequent public notices. Carriers will be 
required to submit data for the one-time collection at least 90 days 
after the release of the filing instructions public notice.
    76. In conjunction with submitting propagation maps, model details, 
and signal strength of 4G LTE coverage, providers will submit a list of 
at least three readily-available handset models appropriate for 
challengers wishing to conduct a speed test of the providers' coverage 
in a particular area, and a certification, under penalty of perjury, by 
a qualified engineer or government official that the propagation map 
and model details reflect the filer's coverage as of the generation 
date of the map in accordance with all other parameters. For 
challengers that are governmental entities and do not have a qualified 
engineer available to certify, the Commission will allow certification 
by a government official authorized to act on behalf of the 
organization and with actual knowledge of the accuracy of the 
underlying data.
    77. To initiate a challenge, a challenger must, within the 150-day 
challenge window: (1) Access confidential, provider-specific 
information for areas it wishes to challenge; (2) identify the areas(s) 
it wishes to challenge; (3) submit evidence supporting the challenge; 
and (4) certify its challenge for the specified area(s). Only service 
providers required to file Form 477 data and government entities 
(state, local, and Tribal) have standing to initiate a challenge. 
Challengers other than government entities and service providers 
required to file Form 477 data with the Commission, who are not already 
represented by another interested party, may file a waiver request with 
the Commission to participate in the MF-II challenge process for good 
cause shown. Only challenges for areas that the Bureaus identify as 
presumptively ineligible for MF-II support will be permitted.
    78. Challengers must submit their challenges to areas identified as 
ineligible for support via an online challenge portal to be operated by 
the Universal Service Administrative Company (USAC). A challenger will 
be required to identify the area(s) that it wishes to challenge for 
each state. The Commission will require that any challenge be of a 
minimum size of at least one square kilometer.
    79. Challengers will also be required to submit actual outdoor 
speed test data that satisfy the parameters outlined below and any 
others the Commission or Bureaus may implement. Speed test data must be 
collected using provider-specified handsets, and substantiated by the 
certification of a qualified engineer or, in the case of a government 
entity, a government official under penalty of perjury.
    80. A challenger must provide detailed proof of lack of 
unsubsidized, qualified 4G LTE coverage in support of its challenge 
with speed test data for each of the providers claiming qualified 4G 
LTE coverage in the challenged area. The Commission will allow 
challengers to submit speed data from hardware or software-based drive 
tests or application-based tests that spatially cover the challenged 
area. All speed tests must be conducted between the hours of 06:00 a.m. 
and 12:00 a.m. local time, when consumers are likely to use mobile 
broadband data. A challenger must take speed measurements that are no 
more than a fixed distance apart from one another within the challenged 
area, and which substantially cover the entire challenged area. This 
fixed distance parameter will be a value no greater than one mile, and 
will be set by the Bureaus in a subsequent public notice. The 
Commission will only accept data that were collected after the 
publication of the initial eligibility map and within six months of the 
scheduled close of the challenge window.
    81. Challengers electing to use application-based tests must use 
the applicable handsets specified by each service provider servicing 
any portion of the challenged area. The challenger must purchase a 
service plan from each unsubsidized service provider in the challenged 
area. If there are multiple unsubsidized service providers in the 
challenge area, the challenger must purchase service plans that are 
comparable (i.e., similar with respect to cost and services provided).
    82. Once a challenger has submitted its evidence in the USAC MF-II 
portal, the system will automatically conduct a validation to determine 
whether the evidence is sufficient to justify proceeding with the 
challenge. The USAC system will superimpose each challenger's 
identified challenged area on the initial eligibility map and will 
remove any portions that overlap eligible areas. A challenged 
ineligible area must meet the de minimis area threshold to move forward 
in the challenge process. If the challenged area does not meet the 
threshold, the system will flag the failure and will not accept the 
challenge for submission unless and until the challenger submits during 
the challenge window new data that meet the threshold. Then, the USAC 
system will analyze the geographic coordinates of the points at which 
the challenger conducted the speed tests to validate whether the speed 
test data show measurements of download speed less than 5 Mbps (counted 
speed tests) and meet all other standard parameters. In order to 
implement the requirements that each point is no more than a fixed 
distance apart and that the measurements substantially cover the entire 
challenged area, the system will create a buffer around each counted 
speed test point and calculate the area of these buffered points (speed 
test buffer area). The system will apply a buffer with a radius equal 
to half of the maximum distance parameter and will trim any portions of 
the buffers that are outside the challenged area. Where a challenged 
area overlaps the submitted coverage map of more than one incumbent 
provider, the system will require counted speed tests for each provider 
in order to calculate the speed test buffer area. If the speed test 
buffer area within each challenged area covers at least 75 percent of 
the challenged area, the challenge will pass validation, and once 
certified, the challenged area(s) will be presented to the incumbent 
provider(s) for a response. If the speed test buffer area does not 
cover at least 75 percent of the challenged area, the challenge for 
that area will fail validation unless the challenger submits new 
evidence or modifies its challenge during the challenge window such 
that the challenge for that area meets the 75 percent threshold. Each 
challenged area that meets the de minimis threshold will be considered 
individually. The USAC system will determine which portions of a 
challenged area overlap which 4G LTE providers, and respondents will 
see only those challenged areas and speed test buffer areas that 
overlap their 4G LTE coverage.
    83. Once the challenge window closes, challenged parties will have 
a limited opportunity to submit additional data in response to a 
challenge. Using the USAC portal, a challenged party will have 30 days 
after the opening of the response window to: (1) Access and review the 
data submitted by the challenger with respect to the challenged area; 
and (2) submit additional data/information to oppose the challenge. The 
Commission will accept certain technical information that is probative 
to the validity of a challenger's speed tests, including, but not 
limited to speed test data and device-specific data collected from 
transmitter monitoring software. If a respondent chooses to respond, it 
need only conduct speed tests of its own network (or gather its own 
geolocated, device-specific data from network monitoring software) in 
the disputed

[[Page 42485]]

areas. If a challenged party chooses to submit its own speed test data, 
the data must conform to the same standards and requirements the 
Commission adopts for challengers. Any evidence submitted by a 
challenged party in response to a challenge must be certified under 
penalty of perjury. Response data will not be subject to the USAC's 
automatic system validation process. A challenged party may choose not 
to oppose the challenge in which case no additional information will be 
required. A challenger bears the burden of persuasion and the merits of 
any challenge will be evaluated under a preponderance of the evidence 
standard.
6. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, Significant Alternatives Considered
    84. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its 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 and reporting requirements under the rule for such 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.''
    85. The Commission has considered the economic impact on small 
entities in reaching its final conclusions and taking action through 
this proceeding. In the Mobility Fund II FNPRM, the Commission sought 
comment on the parameters for the challenge process for MF-II. The 
Commission acknowledged that any challenge process would necessarily 
involve tradeoffs between the burden on interested parties and the 
Commission and the timeliness and accuracy of final determinations. The 
Commission sought specific comment on the ways it could reduce the 
burden on smaller providers.
    86. In the MF-II Challenge Process Order, the Commission amends its 
decision to use a parties' most recent Form 477 data and will instead 
supplement its coverage maps by providing an opportunity for interested 
parties to provide up-to-date LTE coverage data to determine an initial 
map of potentially eligible areas for MF-II support. This amended data 
baseline, in response to concerns regarding the lack of standardization 
and reliability of Form 477 data for the purpose of determining 
coverage meeting the MF-II eligibility benchmark, is intended to 
provide the Commission and interested parties with the best available 
starting point of standardized coverage data. In building on this 
baseline, the procedures the Commission adopts in the MF-II Challenge 
Process Order will provide greater certainty and transparency for 
entities participating in the MF-II challenge process, including small 
entities. In the Mobility Fund II FNPRM, the Commission sought comment 
on two options, ``Option A'' and ``Option B'' for the challenge 
process, and invited alternative options for the challenge process.
    87. ``Option A'' allowed a challenge to be made on a good-faith 
belief, based on actual knowledge or past data collection, that 4G LTE 
coverage was not available in an area as depicted by Form 477 filings. 
Carriers and state and local governments would be eligible to 
participate. The Commission sought comment on what evidence, if any, 
should be required in support of a challenge, whether or not it should 
require a challenged area to reach a minimum size threshold, whether 
challenges should be allowed for areas marked as eligible, and how and 
when challenged providers could respond and with what evidence of 
coverage.
    88. ``Option B'' gave challenging parties 60 days following the 
Commission's release of a list of eligible areas to submit evidence, 
which would include speed test data and shapefile maps and be filed in 
the public record, contesting the eligibility status of an area. 
Service providers and governmental entities located in or near the 
relevant areas would be eligible to participate. Challenged providers 
would then have 30 days to respond with their own speed tests and 
shapefile maps. The Commission sought comment on what requirements 
should be imposed for speed tests and on the burden of requiring such a 
level of response from challenged providers.
    89. The Commission explained that it intended to assemble a ``best 
in class structure'' from the proposed options and made it clear the 
Commission did not intend to adopt either option wholesale. The 
Commission believes the challenge process procedures adopted today are 
the ``best in class'' and will both promote fairness and minimize 
burdens on small entities and other interested parties.
    90. Given the concerns voiced in the comments regarding the lack of 
standardization and the reliability of using Form 477 data for MF-II 
purposes, a collection of new data will ultimately lead to a less 
onerous and more efficient challenge process for small entities and 
other MF-II participants. The challenge process will be streamlined 
using universal, standardized coverage data. These data are already in 
the possession of current providers who are therefore in the best 
position to provide data to the Bureaus. Current providers of 
unsubsidized, qualified 4G LTE coverage, including small businesses, 
will benefit by filing their coverage data under the standardized 
parameters adopted in the MF-II Challenge Process Order because they 
can establish their coverage areas as initially ineligible to 
competitors seeking subsidies in the MF-II auction.
    91. Use of newly collected data enables the Commission to adopt a 
streamlined challenge process that will ease the burden of submission 
and resolution of challenges to the map of presumptively eligible 
areas. Because the map of presumptively eligible areas will be 
established using current, standardized data, challengers will be able 
to target fewer areas to challenge and reduce the need for more in-
depth testing in certain areas. This in turn should reduce the burden 
on challengers and providers that respond to challenges. The Commission 
also limited the new, one-time data collection to providers who have 
previously reported 4G LTE coverage in Form 477 and have qualified 4G 
LTE coverage. The limited scope for the collection eases the burden by 
only requiring a filing from those who have easy access to the 
necessary data.
    92. The Commission has taken a number of steps to reduce the burden 
on small entities and other parties participating in the challenge 
process while also collecting the information required to target areas 
without qualified 4G LTE coverage. For example, the Commission limits 
the types of challenges and will only accept challenges for areas 
identified by the Bureaus as ineligible for MF-II support. Because the 
data for the map of presumptively eligible areas are supplied by 
service providers, the Commission believes a challenge to an eligible 
area would likely be a correction by the service provider who supplied 
the initial data. The Commission will not require challengers to match 
up their challenged areas to census blocks or census block groups as 
proposed in the Mobility Fund II FNPRM. The Commission will allow 
challenges from government entities (state, local, and Tribal) and all 
service providers required to file Form 477 data with the Commission, 
limiting the process to those parties with an adequate interest who are 
likely to have the knowledge and expertise to make

[[Page 42486]]

the requisite submission. The Commission does not include consumers as 
challengers in the MF-II process and believe consumers are best suited 
to participate in the MF-II challenge process through a state, local, 
or Tribal government entity. If a consumer, organization, or business 
believes that its interests cannot be met through its state, local, or 
Tribal government entity, and it wishes to participate in the process 
as a challenger, it is free to file a waiver with the Commission for 
good cause shown, either on its own or with the assistance of an 
organization. These limits promote an efficient challenge process and 
prevent unnecessary delay of the deployment of MF-II support.
    93. The Commission also requires that challenges be a minimum size 
of at least one square kilometer. By including a minimum size 
requirement for challenges, the Commission believe small businesses and 
all interested parties will benefit from a streamlined challenge 
process. The Commission rejected smaller alternatives to the size of 
the minimum challenge area. Making the minimum zone smaller than one 
square kilometer would make the area so small as to be inconsequential 
for improving efficiency for the challenge process. Ineligible areas of 
less than one square kilometer can be subject to challenge insofar as 
they are part of a challenge where the total size of the areas being 
challenged exceeds the de minimis size requirement. The minimum size 
requirement for a partial area challenge will prevent challenges solely 
regarding minor, patchy areas often at the edge of a covered area.
    94. The MF-II Challenge Process Order adopts specific types of data 
needed to support a challenge, including actual outdoor download speed 
test data. The MF-II Challenge Process Order also adopts parameters 
around the type and number of handsets tested, service plan types, 
hours during which the tests must be completed, frequency of tests, and 
timing of tests in relation to the submission of the challenge. 
Standardizing the data-collection parameters will lead to a more 
efficient and accurate process, deter excessive and unfounded 
challenges, and minimize the burden on small business challengers as 
well as other parties utilizing the challenge process. In requiring the 
submission of standardized data, the Commission allows challengers to 
use drive-based or application-based tests to generate the necessary 
data reports. In addition, the Commission is not requiring that an 
independent third party conduct the speed tests. Given the parameters 
for speed test data, along with the required certification, the 
Commission believes the flexibility afforded by allowing different 
testing methods limits the burden on small businesses. The MF-II 
Challenge Process Order also adopts an automatic system of validation 
of a challenger's evidence. This automatic validation system ensures 
that the evidence is reliable and accurately reflects consumer 
experience in the challenged area, and can be analyzed quickly and 
efficiently. Challenged parties are also given a limited opportunity to 
respond to challenges. If a challenged party does not oppose the 
challenge, it does not need to submit any additional data. To reduce 
the burden on challenged parties, the Commission declines to require a 
specific level of response from challenged parties.
    95. The Commission will send a copy of the MF-II Challenge Process 
Order, including this FRFA, in a report to be sent to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act. In addition, the Commission will send a copy of the MF-II 
Challenge Process Order, including this FRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration.

VI. Ordering Clauses

    96. The Commission orders the following, pursuant to the authority 
contained in sections 1, 2, 4(i), 5, 10, 201-206, 214, 219-220, 251, 
254, 256, 303(r), 332, 403, 405, and 503 of the Communications Act of 
1934, as amended, and section 706 of the Telecommunications Act of 
1996, 47 U.S.C. 151, 152, 154(i), 155, 160, 201-206, 214, 219-220, 251, 
254, 256, 303(r), 332, 403, 405, 503, 1302, and sections 1.1 and 1.429 
of the Commission's rules, 47 CFR 1.1 and 1.429:
    <bullet> The Order on Reconsideration and Second Report and Order 
is adopted. It is the Commission's intention in adopting these 
procedures that if any of the procedures that the Commission retains, 
modifies, or adopts herein, or the application thereof to any person or 
circumstance, are held to be unlawful, the remaining portions of the 
procedures not deemed unlawful, and the application of such procedures 
to other persons or circumstances, shall remain in effect to the 
fullest extent permitted by law.
    <bullet> The parameters set forth in the Order on Reconsideration 
and Second Report and Order for the Mobility Fund Phase II challenge 
process, along with all associated requirements also set forth therein, 
go into effect October 10, 2017, except for the new or modified 
information collection requirements in the challenge process that 
require approval by the Office of Management and Budget (OMB). The 
Commission will publish a document in the Federal Register announcing 
the approval of those information collection requirements and the date 
they will become operative.
    <bullet> The Petition for Reconsideration and Comments filed by 
CTIA on April 26, 2017, is granted in part to the extent described 
herein.
    <bullet> The Petition for Reconsideration and/or Clarification 
filed by the Rural Wireless Association, Inc. on April 12, 2017, is 
denied as described herein.
    <bullet> The Petition for Reconsideration filed by Panhandle 
Telephone Cooperative, Inc. and Pine Belt Cellular, Inc. on April 27, 
2017, is denied as described herein.
    <bullet> The Petition for Reconsideration and Clarification filed 
by Rural Wireless Carriers (i.e., United States Cellular Corporation, 
East Kentucky Network, LLC d/b/a Appalachian Wireless, Cellular Network 
Partnership d/b/a Pioneer Cellular, NE Colorado Cellular, Inc. d/b/a 
Viaero Wireless, Nex-Tech Wireless, LLC, and Smith Bagley, Inc.) on 
April 27, 2017, is denied as described herein.
    <bullet> The Petition for Reconsideration and/or Clarification 
filed by the Blooston Rural Carriers on April 27, 2017, is denied as 
described herein.
    <bullet> The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of the Order on 
Reconsideration and Second Report and Order, including the Final 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.

Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer.
[FR Doc. 2017-17824 Filed 9-7-17; 8:45 am]
 BILLING CODE 6712-01-P


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