Goto Section: 54.1015 | 54.1017 | Table of Contents
FCC 54.1016
Revised as of October 5, 2017
Goto Year:2016 |
2018
§ 54.1016 Letter of credit.
(a) Before being authorized to receive Mobility Fund Phase II support,
a winning bidder shall obtain an irrevocable standby letter of credit
which shall be acceptable in all respects to the Commission.
(1) Each recipient authorized to receive Mobility Fund Phase II support
shall maintain the standby letter of credit or multiple standby letters
of credit in an amount equal to at a minimum the amount of Mobility
Fund Phase II auction support that has been disbursed and that will be
disbursed in the coming year, until the Universal Service
Administrative Company has verified that the recipient met the final
service milestone as described in § 54.1015(d) of this chapter.
(i) Once the recipient has met its 60 percent service milestone as
described in § 54.1015(b) of this chapter, it may, subject to the
consent of the Universal Service Administrative Company, obtain a new
letter of credit or renew its existing letter of credit so that it is
valued at a minimum at 90 percent of the total support amount already
disbursed plus the amount that will be disbursed in the coming year.
(ii) Once the recipient has met its 80 percent service milestone as
described in § 54.1015(c) of this chapter, it may, subject to the
consent of the Universal Service Administrative Company, obtain a new
letter of credit or renew its existing letter of credit so that it is
valued at a minimum at 80 percent of the total support amount already
disbursed plus the amount that will be disbursed in the coming year.
(2) Acceptability. The bank issuing the letter of credit shall be
acceptable to the Commission. A bank that is acceptable to the
Commission is:
(i) Any United States Bank—
(A) Whose deposits are insured by the Federal Deposit Insurance
Corporation; and
(B) That has a Weiss bank safety rating of B− or higher, or
(ii) CoBank, ACB—
(A) As long as it maintains assets that would place it among the
top-100 U.S. banks in terms of the amount of assets, determined on the
basis of total assets as of the end of the calendar year immediately
preceding the issuance of the letter of credit;
(B) Its obligations are insured by the Farm Credit System Insurance
Corporation; and
(C) It has a long-term unsecured credit rating of BBB− or better from
Standard & Poor's (or the equivalent from a nationally-recognized
credit rating agency); or
(iii) The National Rural Utilities Cooperative Finance Corporation—
(A) As long as it maintains assets that would place it among the
top-100 U.S. banks in terms of the amount of assets, determined on the
basis of total assets as of the end of the calendar year immediately
preceding the issuance of the letter of credit; and
(B) It has a long-term unsecured credit rating of BBB− or better from
Standard & Poor's (or the equivalent from a nationally-recognized
credit rating agency); or
(iv) Any non-U.S. bank that—
(A) Is among the 100 largest non-U.S. banks in the world, determined on
the basis of total assets as of the end of the calendar year
immediately preceding the issuance of the letter of credit (determined
on a U.S. dollar equivalent basis as of such date);
(B) Has a branch office in the District of Columbia or such other
branch office agreed to by the Commission;
(C) Maintains a credit rating of BBB− or better from Standard & Poor's
(or the equivalent from a nationally-recognized credit rating agency);
and
(D) Issues the letter of credit payable in United States dollars.
(b) Before being authorized to receive Mobility Fund Phase II support,
a winning bidder shall provide with its letter of credit an opinion
letter from legal counsel clearly stating, subject only to customary
assumptions, limitations, and qualifications, that in a proceeding
under Title 11 of the United States Code, 11 U.S.C. 101 et seq. (the
“Bankruptcy Code”), the bankruptcy court would not treat the letter of
credit or proceeds of the letter of credit as property of the winning
bidder's bankruptcy estate, or the bankruptcy estate of any other
bidder-related entity requesting issuance of the letter of credit,
under section 541 of the Bankruptcy Code.
(c) Authorization to receive Mobility Fund Phase II support is
conditioned upon full and timely performance of all the requirements
set forth in this section, § 54.1015, and any additional terms and
conditions upon which the support was granted.
(1) If a Mobility Fund Phase II recipient has triggered a recovery
action by USAC as set out in § 54.1017 and has failed to repay the
requisite amount of support within six (6) months, USAC will be
entitled to draw the entire amount of the letter of credit and may
disqualify the Mobility Fund Phase II recipient from the receipt of
Mobility Fund Phase II auction support or additional universal service
support.
(2) The default will be evidenced by a letter issued by the Chief of
either the Wireless Telecommunications Bureau or Wireline Competition
Bureau or their respective designees, which letter, describing the
performance default and attached to a standby letter of credit draw
certificate, shall be sufficient for a draw on the standby letter of
credit.
[ 82 FR 15450 , Mar. 28, 2017]
Effective Date Note: At 82 FR 15450 , Mar. 28, 2017, § 54.1016 was added.
This section contains information collection and recordkeeping
requirements and will not become effective until approval has been
given by the Office of Management and Budget.
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Goto Section: 54.1015 | 54.1017
Goto Year: 2016 |
2018
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