Goto Section: 54.314 | 54.316 | Table of Contents
FCC 54.315
Revised as of October 5, 2017
Goto Year:2016 |
2018
§ 54.315 Application process for phase II support distributed through
competitive bidding.
(a) Application to participate in competitive bidding for Phase II
support. In addition to providing information specified in § 1.21001(b)
of this chapter and any other information required by the Commission,
an applicant to participate in competitive bidding for Phase II auction
support shall:
(1) Provide ownership information as set forth in § 1.2112(a) of this
chapter;
(2) Certify that the applicant is financially and technically qualified
to meet the public interest obligations of § 54.309 for each relevant
tier and in each area for which it seeks support;
(3) Disclose its status as an eligible telecommunications carrier to
the extent applicable and certify that it acknowledges that it must be
designated as an eligible telecommunications carrier for the area in
which it will receive support prior to being authorized to receive
support;
(4) Indicate the tier of bids that the applicant plans to make and
describe the technology or technologies that will be used to provide
service for each tier of bid;
(5) Submit any information required to establish eligibility for any
bidding weights adopted by the Commission in an order or public notice;
(6) To the extent that an applicant plans to use spectrum to offer its
voice and broadband services, demonstrate it has the proper
authorizations, if applicable, and access to operate on the spectrum it
intends to use, and that the spectrum resources will be sufficient to
cover peak network usage and deliver the minimum performance
requirements to serve all of the fixed locations in eligible areas, and
certify that it will retain its access to the spectrum for at least 10
years from the date of the funding authorization; and
(7) Submit specified operational and financial information.
(i) Submit a certification that the applicant has provided a voice,
broadband, and/or electric transmission or distribution service for at
least two years or that it is a wholly-owned subsidiary of such an
entity, and specifying the number of years the applicant or its parent
company has been operating, and submit the financial statements from
the prior fiscal year that are audited by a certified public
accountant. If the applicant is not audited in the ordinary course of
business, in lieu of submitting audited financial statements it must
certify that it will provide financial statements from the prior fiscal
year that are audited by a certified independent public accountant by a
specified deadline during the long-form application review process.
(A) If the applicant has provided a voice and/or broadband service it
must certify that it has filed FCC Form 477s as required during this
time period.
(B) If the applicant has operated only an electric transmission or
distribution service, it must submit qualified operating or financial
reports that it has filed with the relevant financial institution for
the relevant time period along with a certification that the submission
is a true and accurate copy of the reports that were provided to the
relevant financial institution.
(ii) If an applicant cannot meet the requirements in paragraph
(a)(7)(i) of this section, in the alternative it must submit the
audited financial statements from the three most recent fiscal years
and a letter of interest from a bank meeting the qualifications set
forth in paragraph (c)(2) of this section, that the bank would provide
a letter of credit as described in paragraph (c) of this section to the
bidder if the bidder were selected for bids of a certain dollar
magnitude.
(b) Application by winning bidders for Phase II auction support—(1)
Deadline. As provided by public notice, winning bidders for Phase II
auction support shall file an application for Phase II auction support
no later than the number of business days specified after the public
notice identifying them as winning bidders.
(2) Application contents. An application for Phase II auction support
must contain:
(i) Identification of the party seeking the support, including
ownership information as set forth in § 1.2112(a) of this chapter;
(ii) Certification that the applicant is financially and technically
qualified to meet the public interest obligations of § 54.309 for each
tier in which it is a winning bidder and in each area for which it
seeks support;
(iii) Certification that the applicant will meet the relevant public
interest obligations for each relevant tier, including the requirement
that it will offer service at rates that are equal or lower to the
Commission's reasonable comparability benchmarks for fixed wireline
services offered in urban areas;
(iv) A description of the technology and system design the applicant
intends to use to deliver voice and broadband service, including a
network diagram which must be certified by a professional engineer. The
professional engineer must certify that the network is capable of
delivering, to at least 95 percent of the required number of locations
in each relevant state, voice and broadband service that meets the
requisite performance requirements in § 54.309;
(v) Certification that the applicant will have available funds for all
project costs that exceed the amount of support to be received from the
Phase II auction for the first two years of its support term and that
the applicant will comply with all program requirements, including
service milestones;
(vi) A description of how the required construction will be funded,
including financial projections that demonstrate the applicant can
cover the necessary debt service payments over the life of the loan, if
any;
(vii) Certification that the party submitting the application is
authorized to do so on behalf of the applicant; and
(viii) Such additional information as the Commission may require.
(3) No later than the number of days provided by public notice, the
applicant shall submit a letter from a bank meeting the eligibility
requirements outlined in paragraph (c) of this section committing to
issue an irrevocable stand-by letter of credit, in the required form,
to the winning bidder. The letter shall at a minimum provide the dollar
amount of the letter of credit and the issuing bank's agreement to
follow the terms and conditions of the Commission's model letter of
credit.
(4) No later than 180 days after the public notice identifying them as
a winning bidder, bidders that did not submit audited financial
statements in their short-form application pursuant to paragraph
(a)(7)(i) of this section must submit the financial statements from the
prior fiscal year that are audited by a certified independent public
accountant.
(5) No later than 180 days after the public notice identifying it as a
winning bidder, the applicant shall certify that it is an eligible
telecommunications carrier in any area for which it seeks support and
submit the relevant documentation supporting that certification.
(6) Application processing. (i) No application will be considered
unless it has been submitted in an acceptable form during the period
specified by public notice. No applications submitted or demonstrations
made at any other time shall be accepted or considered.
(ii) Any application that, as of the submission deadline, either does
not identify the applicant seeking support as specified in the public
notice announcing application procedures or does not include required
certifications shall be denied.
(iii) An applicant may be afforded an opportunity to make minor
modifications to amend its application or correct defects noted by the
applicant, the Commission, the Administrator, or other parties. Minor
modifications include correcting typographical errors in the
application and supplying non-material information that was
inadvertently omitted or was not available at the time the application
was submitted.
(iv) Applications to which major modifications are made after the
deadline for submitting applications shall be denied. Major
modifications include, but are not limited to, any changes in the
ownership of the applicant that constitute an assignment or change of
control, or the identity of the applicant, or the certifications
required in the application.
(v) After receipt and review of the applications, a public notice shall
identify each winning bidder that may be authorized to receive Phase II
auction support after the winning bidder submits a letter of credit and
an accompanying opinion letter as described in paragraph (c) of this
section, in a form acceptable to the Commission. Each such winning
bidder shall submit a letter of credit and accompanying opinion letter
as required by paragraph (c) of this section, in a form acceptable to
the Commission no later than the number of business days provided by
public notice.
(vi) After receipt of all necessary information, a public notice will
identify each winning bidder that is authorized to receive Phase II
auction support.
(c) Letter of credit. Before being authorized to receive Phase II
auction support, a winning bidder shall obtain an irrevocable standby
letter of credit which shall be acceptable in all respects to the
Commission.
(1) Value. Each recipient authorized to receive 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 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 § 54.310(c).
(i) Once the recipient has met its 60 percent service milestone, it may
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, it
may 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 that has been disbursed plus the amount that will be disbursed
in the coming year.
(2) 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) That is insured by the Federal Deposit Insurance Corporation, and
(B) That has a bank safety rating issued by Weiss of B- or better; or
(ii) CoBank, so long as it maintains assets that place it among the 100
largest United States Banks, determined on basis of total assets as of
the calendar year immediately preceding the issuance of the letter of
credit and it has a long-term unsecured credit rating issued by
Standard & Poor's of BBB- or better (or an equivalent rating from
another nationally recognized credit rating agency); or
(iii) The National Rural Utilities Cooperative Finance Corporation, so
long as it maintains assets that place it among the 100 largest United
States Banks, determined on basis of total assets as of the calendar
year immediately preceding the issuance of the letter of credit and it
has a long-term unsecured credit rating issued by Standard & Poor's of
BBB- or better (or an equivalent rating from another nationally
recognized credit rating agency); or
(iv) Any non-United States bank
(A) That is among the 50 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) Has a long-term unsecured credit rating issued by a
widely-recognized credit rating agency that is equivalent to a BBB- or
better rating by Standard & Poor's; and
(D) Issues the letter of credit payable in United States dollars
(3) A winning bidder for Phase II auction support shall provide with
its letter of credit an opinion letter from its 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 under section 541 of the Bankruptcy Code.
(4) Authorization to receive Phase II auction support is conditioned
upon full and timely performance of all of the requirements set forth
in this section, and any additional terms and conditions upon which the
support was granted.
(i) Failure by a Phase II auction support recipient to meet its service
milestones as required by § 54.310 will trigger reporting obligations
and the withholding of support as described in § 54.320(c). Failure to
come into full compliance within 12 months will trigger a recovery
action by the Universal Service Administrative Company. If the Phase II
recipient does not repay the requisite amount of support within six
months, the Universal Service Administrative Company will be entitled
to draw the entire amount of the letter of credit and may disqualify
the Phase II auction support recipient from the receipt of Phase II
auction support or additional universal service support.
(ii) The default will be evidenced by a letter issued by the Chief of
the Wireline Competition Bureau or the Wireless Telecommunications
Bureau, or their respective designees, which letter, attached to a
standby letter of credit draw certificate, shall be sufficient for a
draw on the standby letter of credit for the entire amount of the
standby letter of credit.
[ 81 FR 44449 , July 7, 2016]
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Goto Section: 54.314 | 54.316
Goto Year: 2016 |
2018
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