Supporting Statement OMB 3060-1166 (FCC 20-150)

Supporting Statement OMB 3060-1166 (FCC 20-150).docx

Section 1.21001, Participation in Competitive Bidding for Support; Section 1.21002, Prohibition of Certain Communications During the Competitive Bidding Process

OMB: 3060-1166

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Section 1.21001, Participation in Competitive 3060-1166

Bidding for Support; Section 1.21002, Prohibition of February 2021

Certain Communications During the Competitive

Bidding Process


SUPPORTING STATEMENT


The Federal Communications Commission (Commission) requests approval from the Office of Management and Budget (OMB) for a revision to a currently approved collection under OMB 3060-1166, with no change in burden estimates. OMB 3060-1166 contains information collection requirements that apply generally to all applicants seeking to participate in competitive bidding for universal service support, and the currently approved collection requires revisions to implement modified and new information collection requirements recently adopted by the Commission.


  1. Justification:


1. Circumstances that make the revised collection necessary. On November 18, 2011, the Commission released an order comprehensively reforming and modernizing the universal service and intercarrier compensation systems to ensure that robust, affordable voice and broadband service, both fixed and mobile, are available to Americans throughout the nation.1 In the USF/ICC Transformation Order, the Commission, among other things, created (1) the Connect America Fund (CAF), to help make broadband available to homes, businesses, and community anchor institutions in areas that do not, or would not otherwise, have broadband, (2) the Mobility Fund, to ensure the availability of mobile broadband networks in areas where a private-sector business case is lacking, and (3) the Remote Areas Fund (RAF), to ensure that Americans living in the most remote areas in the nation, where the cost of deploying traditional terrestrial broadband networks is extremely high, can obtain affordable access through alternative technology platforms, including satellite and unlicensed wireless services. The USF/ICC Transformation Order directed that support under CAF Phase II, the Mobility Fund, and the RAF be awarded by competitive bidding.2 The Commission adopted rules to implement the reforms it adopted in the USF/ICC Transformation Order, including rules in Part 1, Subpart AA of the Commission’s rules governing competitive bidding for universal service support generally.3


Section 1.21001 contains information collection requirements used to determine whether an applicant is generally qualified to bid for universal service support. Sections 1.21002(c) and (d) contain information collection requirements concerning the requirement to report prohibited communications made or received by an auction applicant and the procedures for doing so. OMB initially approved the information collection requirements in sections 1.21001 and 1.21002(c) and (d) in April 2012 under OMB control number 3060-1166, and has subsequently approved extensions of the information collection requirements in these rules. The information collection requirements reported under this collection apply generally to applicants seeking to participate in competitive bidding for universal service support.4


On October 27, 2020, the Commission adopted a Report and Order in which it, among other things, amended its existing Part 1, Subpart AA general universal service competitive bidding rules to codify policies and procedures applicable to the universal service auction application process that have been adopted in its recent universal service auctions, better align provisions in the universal service competitive bidding rules with like provisions in the Commission’s spectrum auction rules, and make other updates for consistency, clarification, and other purposes that would apply in all universal service auctions.5 The amended Part 1, Subpart AA rules adopted in the 5G Fund Report and Order apply to applicants seeking to participate in future Commission auctions for universal service support.


The Commission seeks approval for revisions to its currently approved collection of information under OMB Control Number 3060-1166 to permit the collection of information in future auctions for universal service support pursuant to the modified and new information collection requirements adopted by the Commission in the 5G Fund Report and Order.


Statutory authority for this information collection is contained in 47 U.S.C. 154, 254 and 303(r).


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


The modified and new information collection requirements for this revised collection are as follows:


  1. Ownership Information. Section 1.21001(b)(1) of the Commission’s rules requires each universal service auction applicant to provide information regarding its identity, including information concerning its real parties in interest and parties that have an ownership or other interest in the applicant. For past universal service support auctions, the Commission has adopted separate, program specific rules on an auction-by-auction basis specifying that the type of ownership information to be provided is the information required by section 1.2112(a) of the Commission’s rules. To simplify the ownership disclosure requirements for all universal service auction applicants going forward and eliminate the need for the Commission to separately adopt the same ownership disclosure requirements in the program specific rules for each universal service auction, the Commission amended section 1.21001(b)(1) to specify that the type of ownership information to be provided by such applicants is the information set forth in section 1.2112(a).


  1. Authorized Bidders. Section 1.21001(b)(2) of the Commission’s rules requires each universal service auction applicant to identify up to three individuals authorized to make or withdraw a bid on behalf of the applicant. The Commission’s spectrum auction rules prohibit the same individual from serving as an authorized bidder for more than one applicant in an auction in order to ensure that an individual is not in a position to be privy to the bidding strategies of more than one applicant in a spectrum auction, which could allow it to be a conduit—intentional or unintentional—for bidding information between auction applicants. To align with the Commission’s spectrum auction rules and to help guard against potential violations of the prohibited communications rule in universal service auctions, the Commission amended section 1.21001(b)(2) to add a prohibition against the same individual from serving as an authorized bidder for more than one auction applicant in a given universal service auction.


  1. Agreement Disclosures; Certification Concerning Agreement Disclosures. Sections 1.21001(b)(3) and (b)(4) of the Commission’s rules require each universal service auction applicant to identify all real parties in interest to any agreements relating to the participation of the applicant in the competitive bidding and to certify that its auction application discloses all real parties in interest to any agreements involving the applicant’s participation in the competitive bidding. To better align the agreement disclosure requirement and associated certification for universal service auctions with both the agreement disclosure requirement and associated certification in the Commission’s spectrum auction rules and with the procedures adopted for recent Commission universal service auctions, the Commission amended sections 1.21001(b)(3) and (b)(4) to require an applicant to disclose all real parties in interest to any agreements and provide a brief description of each agreement it discloses, and to certify that it has disclosed all real parties in interest to any agreements and that it has provided a brief description of, and identified each party to, any partnerships, joint ventures, consortia or other agreements, arrangements, or understandings of any kind, including any joint bidding arrangements, relating to the applicant’s participation in the competitive bidding and the support being sought.


  1. Compliance with Rule Prohibiting Certain Communications During the Competitive Bidding Process. Section 1.21001(b)(5) of the Commission’s rules requires each universal service auction applicant to certify that the applicant and all applicable parties have complied with and will continue to comply with section 1.21002 of the Commission’s rules. The Commission made no changes in the 5G Fund Report and Order to the scope or substance of this rule, however, as a result of the other amendments to the Part 1, Subpart AA rules adopted in the 5G Fund Report and Order, section 1.21001(b)(5) has been redesignated as section 1.21001(b)(8).


  1. Certification of Compliance with Statutory and Regulatory Requirements. Section 1.21001(b)(6) of the Commission’s rules requires each universal service auction applicant to certify that the applicant is in compliance with all statutory and regulatory requirements for universal service support that the applicant seeks. The Commission made no changes in the 5G Fund Report and Order to the scope or substance of this rule, however, as a result of the other amendments to the Part 1, Subpart AA rules adopted in the 5G Fund Report and Order, section 1.21001(b)(6) has been redesignated as section 1.21001(b)(9).


  1. Agreements with Other Parties and Joint Bidding Arrangements. The Commission decided in the 5G Fund Report and Order that it would prohibit the filing of more than one application by the same entity or by commonly controlled entities in a single universal service auction. In view of this new prohibition, and to align with the Commission’s practice in its spectrum auctions and with the approach it has adopted for recent universal service auctions, the Commission also decided that it would prohibit applicants from entering into joint bidding arrangements relating to their participation in a universal service auction. To implement this prohibition on joint bidding arrangements, the Commission adopted a new rule, which was added as section 1.21001(b)(5), that will require each universal service auction applicant to certify that the applicant (or any party that controls or is controlled by the applicant) has not entered and will not enter into any partnerships, joint ventures, consortia or other agreements, arrangements, or understandings of any kind relating to the support to be sought that address or communicate, directly or indirectly, bidding at auction (including specific prices to be bid) or bidding strategies (including the specific areas on which to bid or not to bid for support), or post-auction market structure with any other applicant (or any party that controls or is controlled by another applicant).


  1. Certification Concerning Non-Controlling Interests. Although the Commission decided in the 5G Fund Report and Order to prohibit the filing of more than one application by commonly controlled entities in a single universal service auction, it acknowledged that entities may have non-controlling interests in other entities and both entities may wish to bid in an auction. To address this possibility and ensure that such arrangements do not serve or appear to be conduits for information, and to align with the Commission’s spectrum auction rules, the Commission adopted a new rule in the 5G Fund Report and Order, which was added as section 1.21001(b)(6), that will require each universal service auction applicant to certify that if it has an ownership or other interest disclosed with respect to more than one application in a given auction, it will implement internal controls that preclude any individual acting on behalf of the applicant from possessing information about the bids or bidding strategies (including post-auction market structure), of more than one party submitting an application for the auction or communicating such information with respect to a party submitting an application for the auction to anyone possessing such information regarding another party submitting an application for the auction.


  1. Certification Concerning Auction Defaults. Section 1.21001(b)(7) of the Commission’s rules requires each universal service auction applicant to certify that it will make any payment that may be required in the event of an auction default. To confirm an applicant’s understanding that it will be deemed in default and thus liable for a payment, the Commission amended section 1.21001(b)(7) to require an applicant to also acknowledge, as part of making this certification and as a condition of participating in the auction, that it will be subject to either a default payment or a forfeiture in the event of an auction default. In addition, as a result of the other amendments to the Part 1, Subpart AA rules adopted in the 5G Fund Report and Order, section 1.21001(b)(7) has been redesignated as section 1.21001(b)(10).


  1. Due Diligence Certification. To help ensure that each applicant acknowledges and accepts responsibility for its bids and any forfeitures imposed in the event of an auction default, and that the applicant will not attempt to place responsibility for the consequences of its bidding activity on either the Commission or third parties, the Commission adopted a new rule in the 5G Fund Report and Order, which was added as new section 1.21001(b)(7), that will require each universal service auction applicant to acknowledge through a certification that it has sole responsibility for investigating and evaluating all technical and marketplace factors that may have a bearing on the level of support it submits as a bid, and that if the applicant wins support, it will be able to build and operate facilities in accordance with the obligations applicable to the type of support it wins and the Commission’s rules generally.


  1. Certification Concerning Current Delinquencies. In recent universal service auctions, the Commission the provided a limited waiver of its “red light rule”6 for a universal service auction applicant that was “red lighted” for debt owed to the Commission at the time it filed its auction application to permit the applicant to cure any such delinquency prior to the end of the application resubmission period. The Commission adopted a new rule in the 5G Fund Report and Order codifying the relief granted by the limited waiver. This new rule was added as section 1.21001(b)(11) and will require an applicant to certify that it is not delinquent on any debt owed to the Commission and that it is not delinquent on any non-tax debt owed to any Federal agency as of the deadline for submitting applications to participate in a universal service auction, or that it will cure any such delinquency prior to the end of the application resubmission period established by public notice.


  1. Authorized Signatory. Section 1.21001(b)(8) of the Commission’s rules requires each universal service auction applicant to certify that the individual submitting the application is authorized to do so on behalf of the applicant. The Commission made no changes in the 5G Fund Report and Order to the scope or substance of this rule, however, as a result of the other amendments to the Part 1, Subpart AA rules adopted in the 5G Fund Report and Order, section 1.21001(b)(8) has been redesignated as section 1.21001(b)(12).


  1. Additional Information. Section 1.21001(b)(9) of the Commission’s rules requires each universal service auction applicant to provide such additional information as may be required concerning its application. The Commission made no changes in the 5G Fund Report and Order to the scope or substance of this rule, however, as a result of the other amendments to the Part 1, Subpart AA rules adopted in the 5G Fund Report and Order, section 1.21001(b)(9) has been redesignated as section 1.21001(b)(13).


  1. Financial Requirements for Participation. Section 1.21001(c) of the Commission’s rules provides that an applicant may be required to post a bond or place funds on deposit with the Commission in an amount based on the default payment or forfeiture that may be required as a prerequisite to participating in competitive bidding. The Commission made no changes in the 5G Fund Report and Order to the scope or substance of this rule, however, as a result of the other amendments to the Part 1, Subpart AA rules adopted in the 5G Fund Report and Order, section 1.21001(c) has been redesignated as section 1.21001(e).


  1. Duty to Report Potentially Prohibited Communications. Section 1.21002(c) of the Commission’s rules require parties to report any potentially prohibited communications they make or receive. The Commission made no changes in the 5G Fund Report and Order to the scope or substance of this rule, however, it did make an accuracy amendment to add a reference to section 1.21002(b) in the rule. In addition, as a result of the other amendments to the Part 1, Subpart AA rules adopted in the 5G Fund Report and Order, section 1.21002(c) has been redesignated as section 1.21002(e).


  1. Procedures for Reporting Potentially Prohibited Communications.  Section 1.21002(d) of the Commission’s rules specifies the procedures for reporting a potentially prohibited communication. The Commission made no changes in the 5G Fund Report and Order to the scope or substance of this rule, however, it did make clarification and accuracy amendments to the rule concerning the procedure for reporting a prohibited communication. In addition, as a result of the other amendments to the Part 1, Subpart AA rules adopted in the 5G Fund Report and Order, section 1.21002(d) has been redesignated as section 1.21002(f).

2. Use of information. The Commission’s rules governing competitive bidding for universal service support are designed to ensure that the competitive bidding process is limited to serious qualified applicants, deter possible abuse of the bidding and support authorization processes, and enhance the use of competitive bidding to award universal service support in furtherance of the public interest. The information collected under this information collection is used by the Commission to determine whether an applicant is qualified to participate in competitive bidding for universal service support. The section 1.21001 information collection requirements reported under this information collection are collected on the applicable application form used by the Commission for participation in a particular auction for universal service support, for which OMB approval is separately obtained by the Commission.7 Commission staff reviews the information collected for a particular auction as part of the pre-auction process, prior to the auction being held. Commission staff determines whether an applicant seeking to participate in an auction for universal service support meets the requirements and is qualified to participate.


The reports of prohibited communications required by redesignated sections 1.21002(e) and (f) of the Commission’s rules that are collected under this information collection enable the Commission to ensure that no bidder gains an unfair advantage over other bidders in its auctions for universal service support and thus enhance the competitiveness and fairness of Commission’s auctions for universal service support. The information collected will be reviewed and, if warranted, referred to the Commission’s Enforcement Bureau for possible investigation and administrative action. The Commission may also refer allegations of anticompetitive auction conduct to the Department of Justice for investigation.


3. Technological collection techniques. The Commission is committed to meeting the requirements of the E-Government Act, which requires Government agencies to provide the general public the option of submitting information or transacting business electronically to the maximum extent possible. The information required by section 1.21001 of the Commission’s rules collected under this information collection will be submitted electronically through the Commission’s auction application system. The Commission developed a centralized electronic system for collecting the information to reduce both public and agency administrative burden. The Commission expects that in almost all cases, parties will submit any prohibited communications reports electronically by e-mail.


4. Efforts to identify duplication. There will be no duplicative information collected. Each application to participate in an auction for universal service support that is submitted will be for a new program and for new purposes. The information required to be submitted to report prohibited communications is also unique to covered parties in a particular auction and is not already available because the Commission does not impose a separate similar information collection on such parties. Thus, there is no similar data available under another information collection.


5. Impact on small entities. The information collected under this information collection may affect small entities as well as large entities. In conformance with the Paperwork Reduction Act of 1995 (PRA), the Commission is making an effort to minimize the burden on all respondents regardless of size. Decisions regarding whether to apply to participate in a given universal service auction rest exclusively with the respondents. The Commission has limited the information requirements under this information collection to that which is necessary for evaluating and processing each application to participate in an auction for universal service support and to deter possible abuses of the Commission’s processes. In addition, the Commission makes available tutorials and related information to assist respondents, including small entities, in understanding what information should be submitted.


The Commission does not believe that the costs and/or administrative burdens associated with the reports of prohibited communications required by sections 1.21002(c) and (d) that are collected under this information collection will unduly burden small entities because these rules merely require those who make or receive a communication prohibited by section 1.21002(b) to report the facts of a communications that appears to be prohibited to the Commission no later than five business days after the communication occurs. Despite the large number of small businesses that have participated in Commission auctions programs to date, an extremely small percentage of auction participants have reported making or receiving communications that have violated the prohibited communications rule. The Commission believes that the vast majority of applicants comply with the Commission’s rules and do not engage in prohibited behavior, and that this will continue to be the case. Therefore, the Commission expects this reporting requirement to have little impact on small businesses generally.


The Commission cannot further reduce the burden of these requirements by exempting certain parties, such as small businesses, because the Commission cannot alter the uniform standards of behavior required of all auction participants, even if to do so might assist small businesses.


6. Consequences if information is not collected. The Commission’s universal service support auctions program could not function in its current form without the collection of the information required under this information collection. Without collecting the information required by section 1.21001 under this collection, the Commission would not be able to determine whether applicants are legally, technically, and financially qualified to participate in a Commission auction for universal service support. The requirement to report prohibited communications acts as a deterrent to would-be disseminators of prohibited information and benefits all bidders by increasing general confidence in the integrity of the Commission’s universal service support auctions and enhancing the competitiveness and fairness of an auction. Collection of this information to determine applicants’ qualifications pursuant to Commission rules and requirements to participate in an auction for universal service support and to deter and safeguard against prohibited communications is designed to limit competitive bidding to qualified applicants, deter possible abuse of the bidding process (including through prohibited communications), and enhance the use of competitive bidding to distribute Universal Service Fund support in furtherance of the public interest. Thus, the information is being collected to meet the objectives of the Universal Service Fund program.


7. Special circumstances. This information collection as currently approved does not have any of the characteristics that would require separate justification under 5 C.F.R. § 1320.5(d)(2).


8. Federal Register notice; efforts to consult with persons outside the Commission. Pursuant to 5 C.F.R. § 1320.8, the Commission published a 60-day notice in the Federal Register on November 25, 2020 (85 FR 75321) regarding the extension of this information collection. No comments were received in response to this notice.


9. Payments or gifts to respondents. Respondents will not receive any payments or gifts aside from universal service support if they become winning bidders and are authorized to receive universal service support.


10. Assurances of confidentiality. Information collected in each application to participate in an auction for universal service support will be made available for public inspection, and the Commission is not requesting that respondents submit confidential information to the Commission as part of the pre-auction application process. However, to the extent that a respondent seeks to have certain information collected in an application to participate in an auction for universal service support or in a report of a prohibited communication withheld from public inspection, the respondent may request confidential treatment pursuant to 47 CFR § 0.459 of the Commission’s rules.


11. Questions of a sensitive nature. The information collection requirements do not ask questions of a sensitive nature.


12. Estimates of the hour burden of the retained information collection to respondents. Auctions occur on an irregular schedule. Respondents determine whether to apply to participate in a particular Commission auction and, therefore, determine the frequency of filing. The number of applicants will vary, depending on the number of providers interested in serving the areas eligible for universal service support in a given auction. However, the Commission estimates that approximately 750 parties may submit applications annually to participate in competitive bidding for universal service support.


  1. Number of estimated respondents: 750 respondents annually.


  1. Total Number of annual responses: 750 responses.


  1. Frequency of response: On occasion reporting requirement.


  1. Total estimated annual hour burden per respondent: Up to 1.5 hours per response for an estimated 750 responses x 1.5 hours/response = 1,125 hours. Therefore, the total estimated annual hour burden is calculated as follows:


750 estimated annual responses x 1.5 hours per response = 1,125 total estimated annual burden hours.


  1. Total estimate of annualized “in-house” cost to respondents for the hour burden: $68,433.75.


  1. Explanation of calculation: The Commission estimates that responses to this collection will typically be prepared by the respondents using existing in-house staff (e.g., paralegal or other legal staff member) at a rate equivalent to the hourly rate of a GS-14/Step 5 government staff member ($65.88/hour). Therefore, the in-house cost is as follows:


750 estimated annual responses x 1.5 hours per response x $65.88/hour = $74,115.


13. Estimates of the cost burden of the collection to respondents. There is no external cost burden to the respondents. Applicants should not incur capital and start-up costs or operation and maintenance of purchase of services in connection with responding to the retained information collections. The information collected should be collected and maintained as part of the customary and usual business or private practice of the applicant.


TOTAL CAPITAL AND START-UP COSTS OR OPERATION AND MAINTENANCE (O&M) = $0.


14. Estimates of the cost burden of the collection to the Commission. The Commission estimates that, on average, staff review of the information collected, including time spent by staff attorneys, will take 1 hour per response, including time to identify any deficiencies, review resubmitted information as necessary, and identify the nature of any legal issues requiring policy review.


Total Estimated Annual Cost to the Federal Government: 750 x 1 hour per response x $66.54 (Attorney, GS-14/Step 5) = $49,905.


TOTAL ANNUAL COST TO THE GOVERNMENT: $49,905.


15. Program changes or adjustments from the collection. The Commission is reporting no change in annual burden for this collection. Therefore, there are no program changes or adjustments to this collection.


16. Collections of information whose results will be published. This information collection will not be published for statistical use.


17. Display of expiration date for OMB approval of information collection. The Commission seeks continued approval to not display the OMB expiration date for this collection. The Commission publishes a list of OMB-approved information collections in section 0.408 of its rules, 47 C.F.R. § 0.408, and will continue to publish the OMB control number and OMB expiration date and title for this collection in section 0.408 of its rules.


18. Exception to the certification statement for Paperwork Reduction Act submissions. There are no exceptions to the certification statement.


  1. Collections of Information Employing Statistical Methods:


This information collection does not employ statistical methods, and the use of such methods would not reduce the burden or improve accuracy of results.

1 Connect America Fund et al., Order and Further Notice of Proposed Rulemaking, FCC 11-161 (USF/ICC Transformation Order).

2 On January 30, 2020, the Commission adopted a Report and Order in which it replaced the RAF with the Rural Digital Opportunity Fund. See Rural Digital Opportunity Fund; Connect America Fund, Report and Order, FCC 20-5.

3 See 47 CFR §§ 1.21001-1.21004.


4 Applicants seeking to participate in the Commission’s Mobility Fund Phase I, Tribal Mobility Fund Phase I, CAF Phase II, and Rural Digital Opportunity Fund auctions were required to provide the information required by section 1.21001 in their auction applications and to comply with the prohibited communications reporting requirements in 1.21002(c) and (d).

5 Establishing a 5G Fund for Rural America, Report and Order, FCC 20-150 (5G Fund Report and Order).

6 The Commission adopted rules, including a provision referred to as the “red light rule,” that implement the Commission’s obligation under the Debt Collection Improvement Act of 1996, which governs the collection of debts owed to the United States, including debts owed to the Commission. See Amendment of Parts 0 and 1 of the Commission’s Rules; Implementation of the Debt Collection Improvement Act of 1996 and Adoption of Rules Governing Applications or Requests for Benefits by Delinquent Debtors, Report and Order, 19 FCC Rcd 6540 (2004) (implementing Pub. L. No. 104-134, 110 Stat. 1321, 1358 (1996)) (Debt Collection Report and Order); 47 CFR Part 1, Subpart O.

7 For example, the information collection requirements in section 1.21001 of the Commission’s rules were collected on FCC Form 180 for the Mobility Fund Phase I (MF-I) and Tribal Mobility Fund Phase I (TMF-I) auctions, and were collected on FCC Form 183 for the CAF Phase II and Rural Digital Opportunity Fund auctions. See OMB 3060-1166 and OMB 3060-1252. The information collection requirements that were initially approved by under OMB 3060-1166 included the requirements contained in section 1.21001 and 1.21002(c) and (d) of the Commission’s general rules for competitive bidding for universal service support and the program-specific requirements for MF-I and TMF-I auction applicants contained in sections 54.1003, 54.1004, and 54.1005 of the Commission’s rules, as well as the FCC Form 180 auction application form used to collect this information from MF-I and TMF-I auction applicants. However, the information requirements contained in sections 54.1003, 54.1004, and 54.1005 of the Commission’s rules and the FCC Form 180 application, which apply only to MF-I and TMF-I auction applicants, became obsolete following the completion of the MF-I and TMF-I auctions and were removed from OMB 3060-1166 through a revision in 2017 – with only the information collection requirements contained in sections 1.21001 and 1.21002(c) and (d) retained in OMB 3060-1166.

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