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Notice

Smith Bagley, Inc., Petition for Waiver of Section 54.400(e) of the Commission's Rules

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AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

In this document, the Commission grants the petition of Smith Bagley, Inc. (SBI) seeking a waiver of section 54.400(e) of the Commission's Lifeline and Link-Up eligibility rules to enable eligible residents of the Eastern Navajo Agency in the state of New Mexico to receive enhanced Lifeline and Link-Up support.

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FOR FURTHER INFORMATION CONTACT:

Mark Seifert, Assistant Chief, Wireline Competition Bureau, Telecommunications Access Policy Division, (202) 418-7400, TTY (202) 418-0484.

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SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Memorandum Opinion and Order in WC Docket No. 03-109 released on March 30, 2005. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC 20554.

I. Introduction

1. In this Order, we grant the petition of Smith Bagley, Inc. (SBI) seeking a waiver of § 54.400(e) of the Commission's Lifeline and Link-Up eligibility rules to enable eligible residents of the Eastern Navajo Agency in the state of New Mexico to receive enhanced Lifeline and Link-Up support. We find that this waiver is in the public interest and warranted by the unique and compelling circumstances of low-income consumers residing in the Eastern Navajo Agency. Start Printed Page 21780

II. Discussion

2. We grant SBI's request for waiver of § 54.400(e) of the Commission's rules and find that SBI has demonstrated good cause to justify the waiver by demonstrating that special circumstances exist and because granting such a waiver, in this instance, is in the public interest.

3. Generally, the Commission's rules may be waived for good cause shown. The Commission may exercise its discretion to waive a rule where the particular facts make strict compliance inconsistent with the public interest. In addition, the Commission may take into account considerations of hardship, equity, or more effective implementation of overall policy on an individual basis. Waiver of the Commission's rules is therefore appropriate only if special circumstances warrant a deviation from the general rule, and such deviation will serve the public interest.

4. We find that SBI has identified special circumstances in the Eastern Navajo Agency that warrant a waiver of § 54.400(e) of the Commission's rules. In the Twelfth Report and Order, 65 FR 47941, August 4, 2000, the Commission identified a number of factors that are primary impediments to subscribership on Tribal lands, including the lack of access to and/or affordability of telecommunications services, the cost of basic service, the cost of intrastate toll service, inadequate telecommunications infrastructure and the cost of line extensions, and the lack of competitive service providers offering alternative technologies. To address these impediments, the Commission adopted measures specifically targeted to increase subscribership and infrastructure development on Tribal lands, where unaffordable service and low subscribership are most prevalent. Our review of the record reveals that the Eastern Navajo Agency has the same impediments to subscribership and infrastructure development as those existing on Tribal lands.

5. The Eastern Navajo Agency encompasses lands that do not fall within the Commission definition of a “reservation” for purposes of enhanced Lifeline and Link-Up support. Ninety-two percent of the 37,404 persons living within its borders are Navajo Nation tribal members. Recent data published by the Census Bureau indicate that telephone penetration rates and per capita incomes in the Eastern Navajo Agency are far below the average existing throughout America. The telephone subscribership penetration rates for the United States are approximately 94% and per capita income is $21,587. Telephone penetration rates and per capita income in the Eastern Navajo Agency are far below the average existing on Tribal lands nationwide. Census data show that the average telephone penetration rate on Tribal lands is approximately 68% and per capita income is $12,452. By comparison, telephone penetration in the Eastern Navajo Agency is approximately 33% and per capita income is $6,979. Census data also show that nearly 45% of the 37,404 Eastern Navajo Agency residents subsist at or below the federal poverty level, compared to 23.5% of American Indian residents living on Tribal lands. In addition, data show that unemployment in the Eastern Navajo Agency stands at 25%, compared to 13.6% of American Indian residents on Tribal lands. Finally, approximately 52% of households rely on wood for heat and 46% of households lack plumbing. It is evident, therefore, that depressed economic conditions exist in the Eastern Navajo Agency. The Commission has previously determined that this is one of the primary causes of low subscribership levels.

6. Other factors identified by the Commission as impediments to subscribership also exist in the Eastern Navajo Agency. In particular, the cost of basic telephone service, $13.50 per month, and the cost of intrastate toll service, $0.16 per minute, is high relative to the incomes of many families in the Eastern Navajo Agency. Moreover, sparse population and distances between existing plant and requesting customers in this area make extending wireline telephone facilities challenging, if not infeasible. In addition, depressed economic conditions of potential subscribers may not justify construction of telecommunications facilities because of the consumers' inability to pay for service. In fact, there are many areas within the Eastern Navajo Agency where no telephone service is available. SBI submits that it has been unable to identify another area in the United States of similar geographic size or population that suffers from these types of conditions.

7. Based on the statistics discussed above and our review of the record, we conclude that specific action is needed to address the impediments to subscribership and infrastructure development in the Eastern Navajo Agency to ensure affordable access to telecommunications services for residents. Although the enhanced Lifeline and Link-Up program is limited to low-income consumers living on reservations, most of the factors that the Commission found relevant in establishing enhanced Lifeline and Link-Up support exist for the Eastern Navajo Agency. We therefore conclude that it is appropriate to waive § 54.400(e) of the Commission's rules and permit ETCs serving the Eastern Navajo Agency to offer Tier 4 Lifeline and Link-Up benefits to qualified residents.

8. We find that granting SBI's Waiver Petition will serve the public interest by allowing SBI to provide service at rates that will likely increase the number of subscribers in the Eastern Navajo Agency who can afford basic telephone service. As illustrated in SBI's Waiver Petition, household telephone penetration in the other four Navajo Nation Agencies significantly increased as a result of ETCs having the ability to offer and advertise Tier 4 benefits. In fact, in three years, SBI added more than 27,000 new Tier 4-eligible subscribers in four other Navajo Nation Agencies. Based on the performance of the other four Navajo Agencies, SBI estimates that 20,000 households in the Eastern Navajo Agency will be able to initiate telephone service with the availability of Tier 4 support. This record persuades us that making enhanced Lifeline and Link-Up support available will eliminate or diminish the effect of unaffordability for individuals in the Eastern Navajo Agency who have never had telephone service and for individuals who cannot afford to maintain telephone service. Furthermore, making access to telecommunications services more affordable also serves the public interest because it enables these low-income consumers to have easier access to emergency, medical, government and other public services that they may need.

9. The availability of enhanced federal support in the Eastern Navajo Agency will also make this area more attractive for carrier investment and deployment of telecommunications infrastructure. As the Commission stated in the Twelfth Report and Order, increasing the total number of individuals who are connected to the network within a tribal community enhances the value of the network in that community and results in greater incentives for ETCs to serve those areas. Specifically, as the number of potential subscribers grows, carriers may achieve greater economies of scale and scope when deploying facilities and providing service to those areas. In this way, granting this waiver serves the public interest because doing so furthers the Commission's goal of increasing the deployment of telecommunications facilities in unserved and underserved Start Printed Page 21781regions of the Nation, especially among Native American populations. We emphasize that the action we take here does not affect state sovereignty or impinge upon a state's ability to establish universal service programs aimed at increasing telephone subscribership within its borders.

10. Verizon opposes a waiver of § 54.400(e) until such time as the Commission determines how the term “near reservation” should be defined. As noted above, however, Smith Bagley no longer requests the Commission to designate the Eastern Navajo Agency as “near reservation” land. Because we do not grant this waiver on the basis of defining “near reservation,” we reject Verizon's argument.

11. Further, we are not persuaded by Verizon's argument that SBI's Waiver Petition should be denied because states are in a better position to address pockets of low subscribership in non-reservation areas within their respective state. We agree that, in most instances, it is more appropriate for states to implement Lifeline and Link-Up programs designed for the specific needs of their state. Nothing in this order is intended to prevent state action in this regard. Indeed, the state of New Mexico is free to adopt measures to eradicate pockets of low subscribership within its borders. We emphasize that, at the present time, 67% of occupied housing units in the Eastern Navajo Agency do not have telephone service. As we stated in the Twelfth Report and Order, “the unavailability or unaffordability of telecommunications service on Tribal lands is at odds with our statutory goal of ensuring access to such services to “[c]onsumers in all regions of the Nation, including low-income consumers.” Although the Eastern Navajo Agency is not entirely comprised of Tribal lands under the Commission's definition, the area is almost exclusively populated by Native Americans that suffer from the same conditions present on other federally-recognized Tribal lands. The availability of Tier 4 support program will provide immediate and vital benefits to low-income consumers in the Eastern Navajo Agency, consistent with the Commission's goal of enhancing telecommunications access among consumers on Tribal lands and its responsibility to ensure a standard of livability for members of Indian tribes.

III. Ordering Clause

12. Pursuant to authority contained in sections 1, 4, and 254 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 254, and the authority under § 1.3 of the Commission's rules, 47 CFR 1.3, the Waiver Petition filed by Smith Bagley, Inc., on November 15, 2004, is granted.

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Federal Communications Commission.

Marlene H. Dortch,

Secretary.

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[FR Doc. 05-8339 Filed 4-26-05; 8:45 am]

BILLING CODE 6712-01-P