3060_1192_Supporting Statement Part A_122019

Survey of Urban Rates, DA 13-598 3060-1192 December 2019

SUPPORTING STATEMENT

Part A. Justification:

1. In the USF/ICC Transformation Order, the Commission directed the Wireline Competition Bureau and Wireless Telecommunications Bureau (Bureaus) to conduct a survey of residential urban rates for voice services.¹ Specifically, the Commission directed the Bureaus to “develop a methodology to survey a representative sample of facilities-based fixed voice service providers taking into account the relative categories of fixed voice providers as determined in the most recent FCC Form 477 data collection.”² The Commission also delegated “authority to conduct an annual survey of urban broadband rates, if necessary, in order to derive a in order to derive a national range of rates for broadband service”³ and “to monitor urban broadband offerings, including by conducting an annual survey, in order to specify an appropriate minimum for usage allowances and to adjust such a minimum over time.”⁴

This information collection does not affect individuals or households; thus, there are no impacts under the Privacy Act.

The Statutory authority for this information collection is contained in 47 U.S.C.254(b).

2. The Commission will use the data collected to implement universal service reforms adopted as part of the USF/ICC Transformation Order. For the survey, the Commission will annually select a statistically valid sample of urban providers who will complete the survey form with the information specified. The information collected will be used to establish a rate floor that eligible telecommunications carriers (ETCs) receiving high-cost loop support (HCLS) or frozen high-cost support must meet to receive their full support amounts and to help ensure that universal service support recipients offering fixed voice and broadband services do so at reasonably comparable rates to those in urban areas.⁵ These measures are important components of the Commission’s overall effort in the USF/ICC Transformation Order to improve accountability for the use of universal service funding.

3. The entire collection will be through electronic means. All sampled firms will be required to submit their responses electronically by answering questions in an online collection system.

4. To calculate a rate floor and ensure that rates are reasonably comparable in rural and urban areas as required by the USF/ICC Transformation Order, the Commission must have detailed information about voice and broadband rates, fees, taxes, etc. in urban areas. This information has not been collected prior to the initiation of the Urban Rate Survey, and the Commission is not aware of any other source for this information. Although some data providing local rates may be available, these data do not provide a statistically valid sample of all providers.

5. The data collection form should be easily completed by firms of all sizes (including small businesses and other small entities) using data readily available in the course of regular business operations. Because of the sampling approach used, small businesses and small entities are less likely to be sampled and therefore the total burden on these firms will be a relatively small portion of the total burden.

6. This collection will allow the Commission to improve accountability of the Universal Service Fund by not subsidizing rates that are unreasonably high. It is important to collect this data on an annual basis so that the criteria used to protect the fund are current. A less frequent data collection would reduce the Commission’s ability to enforce its rules protecting the fund in a meaningful way.

7. There are no special circumstances associated with this collection that would result in information being collected in a manner inconsistent with OMB’s guidelines under 5 C.F.R. § 1320.5(d)(2).

8. Pursuant to 5 CFR 1320.8(d), the Commission published a notice in the Federal Register soliciting public comment on October 15, 2019 (84 FR 55153). No PRA comments were received.

9. No payment or gifts will be made to respondents.

10. The information being collected is not confidential, and no assurances of confidentiality are being provided.

11. The survey does not ask any questions of a sensitive nature such those related to sexual behavior, attitudes about sexual issues, or religious beliefs.

12. The unit of observation is the provider-census tract pair. In other words, we ask providers for their prices in particular (urban) census tracts. The Commission plans annually to sample prices from 500 voice provider-census tract pairs and 2,000 fixed broadband provider-census tract pairs for a total sample size of 2,500 units. Our sampling method is probability proportional to size sampling. This means that the number of census tracts we sample regarding an individual provider depends on the relative number of subscribers the provider serves. In the 2019 survey, the number of sample responses ranged from one census tract for small providers to 166 tracts (counting both voice and fixed broadband tracts) for the largest service provider.

The following represents our estimate of the annual cost burden for the collection of information.

(1) Number of Responses: We estimate that 91% of 2,500 sample responses requested will be received for a total of 2,275 responses. (91% x 2,500 = 2,275)

(2) Frequency of Response: The annual reporting requirement is one response per randomly selected census tract

(3) Annual Number of Responses: 2,275 respondents x 1 response per year = 2,275

We estimate that it will take approximately 3 hours per response, based on the time it would take each provider to read the instructions, to gather sources of data from in-house records, and to input the data and submit it electronically. Certain administrative efficiencies may accrue to large service providers for whom we sample multiple census tracts. Otherwise, we do not expect that the burden should vary significantly across firms of different sizes to report their rates for a single Census tract.

(4) Total Annual Hourly Burden = 2,275 responses x 3 hours per response = 6,825 hours

The Commission estimates that it will take a service provider using an employee paid an in-house equivalent to a GS12/Step 10 employee to comply with the requirements because we expect a knowledgeable, moderately experienced, non-managerial employee to most likely complete the survey and we do not anticipate any respondents will use contract labor to complete this data collection.⁶

(5) Total In-house Costs to the Respondent: 6,825 burden hours x $52.22 per hour = $356,402

13. This data collection will require respondents only to report information that is readily available to the firm in the normal course of business. Respondents should not incur any capital or start-up costs or need to purchase any additional services. Therefore, for items 13 (a) and (b) we are estimating no outside contracting costs.

14. The data collected will be received by an electronic system that has already been created and then processed by Commission staff during regular business hours and thus is no additional cost to the Federal Government.

15. The Commission is reporting adjustments/increases and decreases for this information collection. We are increasing the number of responses we expect to receive in this annual collection from 1,000 to 2,285 (or by 1,275 responses). Further, we are decreasing the time burden per response from 3.5 to 3.0 hours (or by 0.5 hours). The annual net effect from the increase in responses and decrease in time per response is an increase in the total burden hours from 3,500 to 6,825 hours (or by 3,325 hours).

The adjustment to the number of responses is due to changes in the sample design of survey samples we conduct as part of the information collection. In our sample of broadband service providers and Internet prices, growth in the variety of Internet service plans providers offer along with higher price variability necessitate adding more subgroups of Internet plans to the sample design and increasing sample size by 1,500 respondents to maintain sampling precision. Further, we are adding a non-response factor to the sample design which lowers responses by 325, for a net increase of 1,275 responses.

The adjustment in time burden per response (decrease of 0.5 hours) results from re-estimations of two steps that entities follow in responding to our information collection. First, we are lowering the average time for respondents to review instructions by 0.22 hours, to account for the likelihood that respondents who file more than one response spend less time reviewing each additional response. Second, we are eliminating the step requiring respondents to match a census tract code to the geographic location being sampled and, instead, will provide the location, reducing time per response by 0.28 hours.

There are no program changes.

16. The Commission plans to compile the information collected into several tables and make them available to the public on the Commission’s website. These tables will primarily report the rate floor(s) and reasonable comparability benchmark(s) for which the data collection is being conducted. The completion of the tables and posting of the information should occur within a few months of the completion of the collection. The collection will be conducted at the end of each calendar year with the results posted in first or second quarter of the following year.

17. Not applicable. The Commission publishes a list of all OMB-approved information collections in 47 C.F.R. § 0.408 of the Commission’s rules.

18. There were no exceptions to the Certification Statement.

B. Collection of Information Employing Statistical Methods

The Commission notes that the collection of this information will employ statistical methods. See our Part B Statistical Methodology write-up that is a component of this supporting statement.

1 Connect America Fund; A National Broadband Plan for Our Future; Establishing Just and Reasonable Rates for Local Exchange Carriers; High-Cost Universal Service Support; Developing a Unified Intercarrier Compensation Regime; Federal-State Joint Board on Universal Service; Lifeline and Link-Up; Universal Service Reform—Mobility Fund; WC Docket Nos. 10-90, 07-135, 05-337, 03-109, CC Docket Nos. 01-92, 96-45, GN Docket No. 09-51, WT Docket No. 10-208, Report and Order and Further Notice of Proposed Rulemaking, 26 FCC Rcd 17663, 17694, para. 85 (2011) (USF/ICC Transformation Order and/or FNPRM), aff’d sub nom., In re: FCC 11-161, 753 F.3d 1015 (10th Cir. 2014).

2 Id.

3 Id. at 17708, para. 114.

4 Id. at 17699, para. 99.

5 USF/ICC Transformation Order and FNPRM, 26 FCC Rcd at 17751, 17855, paras. 239, 592.

6 The Commission used the 2019 General Base Schedule with this submission since the respondent pool performing the schedule preparation is located throughout the country and normally outside of large metropolitan areas. The hourly rate for a GS 12 Step 10, is $40.17 plus $12.05 for the overhead cost segment. The $52.22 hourly rate more accurately reflects the Commission’s estimate of entity staff time preparing this report(s).