[Federal Register Volume 59, Number 207 (Thursday, October 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26761]
[[Page Unknown]]
[Federal Register: October 27, 1994]
VOL. 59, NO. 207
Thursday, October 27, 1994
DEPARTMENT OF AGRICULTURE
Rural Electrification Administration
7 CFR Part 1751
RIN 0572-AB07
Telecommunications System Planning and Design Criteria, and
Procedures
AGENCY: Rural Electrification Administration, USDA.
ACTION: Proposed rule.
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SUMMARY: The Rural Electrification Administration (REA) proposes to
amend its interim rule regarding the State Telecommunications
Modernization Plan requirements. The proposed changes are in response
to comments received from the public regarding the interim rule. All
Telephone Borrowers will be affected by this proposed rule.
DATES: Comments concerning this proposed rule must be received by REA
or bear a postmark or its equivalent no later than November 28, 1994.
ADDRESSES: Submit written comments to Matthew P. Link, Director, Rural
Telephone Bank Management Staff, U.S. Department of Agriculture, Rural
Electrification Administration, 14th & Independence Avenue, SW., Room
2832-S, Washington, DC 20250-1500. REA requests an original and three
copies of all comments (7 CFR part 1700). All comments received will be
made available for public inspection at Room 2238-S, at the address
listed above, between 8:30 a.m. and 5 p.m. (7 CFR 1.27(b)).
FOR FURTHER INFORMATION CONTACT: Robert Peters, Assistant
Administrator, Telephone Program, at the address listed above,
telephone number (202) 720-9554.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed rule has been determined to be significant and was
reviewed by the Office of Management and Budget (OMB) under Executive
Order 12866.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778,
Civil Justice Reform. If adopted, this proposed rule will not: (1)
Preempt any State or local laws, regulations, or policies, unless they
present an irreconcilable conflict with this rule; (2) Have any
retroactive effect; and (3) Require administrative proceedings before
parties may file suit challenging the provisions of this rule.
Regulatory Flexibility Act Certification
REA has determined that this proposed rule will not have a
significant economic impact on a substantial number of small entities,
as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
The REA program provides loans to REA Borrowers at interest rates and
terms that are more favorable than those generally available from the
private sector. REA Borrowers, as a result of obtaining federal
financing, receive economic benefits which ultimately offset any direct
economic costs associated with complying with REA regulations and
requirements. Moreover, this action is in response to the Rural
Electrification Loan Restructuring Act of 1993.
Information Collection and Recordkeeping Requirements
The reporting and recordkeeping requirements contained in the
proposed rule have been submitted to OMB for approval in accordance
with the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). Send
comments regarding this collection of information to: Department of
Agriculture, Clearance Office, Office of Information Resources
Management, Room 404-W, Washington, DC 20250, and Regulatory Affairs of
OMB, Attention: Desk Officer for USDA, Room 3201, New Executive Office
Building, Washington, DC 20503.
National Environmental Policy Act Certification
REA has determined that this proposed rule will not significantly
affect the quality of the human environment as defined by the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Therefore,
this action does not require an environmental impact statement or
assessment.
Catalog of Federal Domestic Assistance
The program described by this proposed rule is listed in the
Catalog of Federal Domestic Assistance Programs under 10.851, Rural
Telephone Loans and Loan Guarantees, and 10.852, Rural Telephone
Bank Loans. This catalog is available on a subscription basis from
the Superintendent of Documents, the United States Government
Printing Office, Washington, DC 20402-9325.
Executive Order 12372
This proposed rule is excluded from the scope of Executive Order
12372, Intergovernmental Consultation. A Notice of Final Rule entitled
Department Programs and Activities Excluded from Executive Order 12372
(50 FR 47034) exempts REA and RTB loans and loan guarantees to
governmental and nongovernmental entities from coverage under this
Order.
Background
On December 20, 1993, REA published an interim rule (58 FR 66250)
to incorporate changes to telephone loan policies required by the Rural
Electrification Loan Restructuring Act of 1993 (RELRA) (107 Stat.
1356). RELRA amended several provisions of the Rural Electrification
Act of 1936, as amended (7 U.S.C. 901 et seq.) (RE Act), and mandated a
restructuring of the telephone loan program.
On April 13, 1994, REA adopted its interim rule as a final rule (59
FR 17460) with one exception, 7 CFR Part 1751, Telecommunications
System Planning and Design Criteria, and Procedures. Because of the
overwhelming response and concerns regarding the requirements of the
State Telecommunications Modernization Plan (Modernization Plan), REA
is proposing to amend 7 CFR part 1751, subpart B.
As revised, this Rule would require that Modernization Plans, at a
minimum, apply to all REA borrowers. If a Modernization Plan is
developed by the PUC or the State Legislature, REA encourages, but does
not require, that the Modernization Plan's requirements apply to the
rural service areas of all Telecommunications Providers. A State's
decision not to include non-REA borrowers will not prejudice REA
approval of their Plan. The PUC or the State Legislature may also, at
its option, extend coverage of the Modernization Plan to all service
areas of all Telecommunications Providers in the State. In addition,
while requirements contained in Sec. 1751.106 apply only to wireline
services, the State Legislature or PUC, at its discretion, may extend
coverage of Modernization Plans to wireless or other communications
services in a State as it deems appropriate.
It is REA's policy that every State have a Modernization Plan which
provides for the improvement of the State's Public Switched Network. If
the Plan Developer is either the State Legislature or the PUC, such
entity must submit for REA approval its Modernization Plan by a date
one year from issuance of the Final Rule. After this date, if a State
or its PUC declines or fails to submit for REA approval its
Modernization Plan, eligibility to develop the Plan passes to a numeric
majority of the Borrowers within the State. While there is no time
limit requiring States to have an approved plan in place, REA, as
required by RELRA, will not approve any direct loans in States without
such a plan.
During the comment period, REA received 81 comments regarding the
interim rule, and these comments were taken into consideration in
preparing the proposed amendments. Comments were received from the
following:
(1) Alaska Public Utilities Commission.
(2) Arkansas Public Service Commission.
(3) California Public Utilities Commission.
(4) Joint comments from the Colorado Office of Consumer Counsel,
Texas Office of Public Utility Counsel, Iowa Office of Consumer
Advocate, and D.C. Office of the People's Counsel.
(5) Colorado Public Utilities Commission Staff.
(6) Florida Public Service Commission.
(7) Idaho Public Utilities Commission.
(8) Illinois Commerce Commission.
(9) Indiana Utility Regulatory Commission.
(10) Iowa Utilities Board.
(11) Michigan Public Service Commission Staff.
(12) Minnesota Public Utilities Commission.
(13) Missouri Public Service Commission.
(14) Nebraska Public Service Commission.
(15) New England Conference of Public Utilities Commissioners, Inc.
(16) New Hampshire Office of the Consumer Advocate.
(17) New York State Department of Public Service.
(18) North Carolina Public Staff Utilities Commission.
(19) North Dakota Public Service Commission.
(20) Pennsylvania Office of Consumer Advocate.
(21) Pennsylvania Public Utility Commission.
(22) Tennessee Public Service Commission.
(23) Texas Public Utility Commission.
(24) Utah Department of Commerce Division of Public Utilities.
(25) Virginia State Corporation Commission.
(26) Wisconsin Public Service Commission.
(27) ALLTEL Service Corporation.
(28) Century Telephone Enterprises, Inc.
(29) Golden West Telecommunications Cooperative, Inc.
(30) Great Plains Communications, Inc.
(31) GTE Service Corporation.
(32) Hiawatha Telephone Company.
(33) Hills Telephone Company, Inc.
(34) Interstate Telecommunications Cooperative, Inc.
(35) James Valley Cooperative Telephone Company.
(36) Kingdom Telephone Company.
(37) Mark Twain Rural Telephone Company Group.
(38) Martin and Associates, Inc., submitted comments on behalf of
16 local exchange carriers located in South Dakota.
(39) Matanuska Telephone Association, Inc.
(40) MEBTEL Communications.
(41) Pacific Telecom, Inc.
(42) Project Mutual Telephone Company.
(43) Rochester Telephone Corporation.
(44) Sioux Valley Telephone Company.
(45) Steelville Telephone Exchange, Inc.
(46) TDS Telecom.
(47) United and Central Telephone Companies.
(48) Young, Van Assenderp, Varnadoe & Pennon, P.A., submitted
comments on behalf of 7 REA Telephone Borrowers located in Florida and
Alabama.
(49) Association of Communications Engineers.
(50) Eastern REA Borrowers Association.
(51) Idaho Telephone Association.
(52) Illinois Independent Telephone Association.
(53) Illinois Telephone Association.
(54) Iowa Telephone Association.
(55) Missouri Telephone Association.
(56) Montana Telephone Association.
(57) Joint comments from the National Rural Telecom Association,
and the Western Rural Telephone Association.
(58) Nebraska Telephone Association.
(59) New York State Telephone Association, Inc.
(60) North Dakota Association of Telephone Cooperatives.
(61) National Telephone Cooperative Association.
(62) Joint comments from the Oklahoma Rural Telephone Coalition,
Rural Arkansas Telephone Systems, and Texas Statewide Telephone
Cooperative, Inc.
(63) Organization for the Protection and Advancement of Small
Telephone Companies.
(64) Oregon Independent Telephone Association.
(65) Pennsylvania Telephone Association.
(66) Telecommunications Industry Association.
(67) Texas Telephone Association.
(68) United States Telephone Association.
(69) Washington Independent Telephone Association.
(70) Ameritech Operating Companies.
(71) Bell Atlantic Telephone Companies.
(72) BellSouth Telecommunications, Inc.
(73) NYNEX (New York Telephone Company and New England Telephone
and Telegraph Company).
(74) Pacific Bell and Nevada Bell.
(75) Southwestern Bell Corporation.
(76) U.S. West Communications, Inc.
(77) MCI Telecommunications Corporation.
(78) Central Associated Engineers, Inc.
(79) Fred Williamson & Associates, Inc.
(80) Hastad Engineering Company.
(81) Hicks & Ragland Engineering Co., Inc.
1. Comment Summary: REA should not specify specific technologies.
Response: This was a nearly unanimous comment and one with which
REA concurs. REA's intent is to specify information carrying
capability, i.e., bit rate. References to specific technologies, like
ISDN, have been removed.
2. Many commenters asserted that REA exceeded its statutory
authority in one or more of the following ways:
a. Comment Summary: Congress intended State Telecommunications
Modernization Plans to be guidelines.
Response: Many commenters believe that the use of the word
``objectives'' in RELRA implies non-binding guidelines. REA believes
the commenters are taking the word out of context. The entire provision
is as follows:
``REQUIREMENTS.--For purposes of subparagraph (A), a
telecommunications modernization plan must, at a minimum, meet the
following objectives.''
REA believes that an objective that must be met is mandatory. In
the interim regulation (7 CFR part 1751, published December 20, 1993),
REA set forth both ``requirements'' and ``objectives'' to be contained
in the Modernization Plan. Requirements were to be binding while
objectives were only goals or targets. This may have led to confusion
because both words are used in RELRA. In the proposed rule, REA has
included only requirements.
b. Comment Summary: REA went beyond the intent of RELRA by
establishing timeframes for modernization.
Response: REA set timeframes because a requirement with no due date
is not a requirement.
REA believes that advanced telecommunications services should be
available to the public within a reasonable time after they are
developed. Broad experience in bringing modern telephone service to
rural America teaches the value of caution and reflection before
imposing binding requirements on future business activities. Varying
construction schedules, economic conditions and rates of technological
innovation affect even the most careful projections. REA conservatively
projected the reasonably expected growth of both the public's need for
telecommunications services and the ability of Telecommunications
Providers and equipment manufacturers to provide those services.
REA consulted both its past experience and its expectations of
future technological development before setting the short-, medium- and
long-term deadlines in the regulation. Our experience with new
technology such as buried cable, digital switching, and fiber optic
systems where the widespread deployment into the telecommunications
network took two to five years, lead us to adopt the five year phase-in
concept. The timetable is achievable, given the telecommunications
services presently available, the resources of the Telecommunications
Providers, and the accelerating engineering achievements likely in the
next few years.
The regulations phase in the requirements in three steps to provide
for an orderly deployment of these telecommunications services.
Facilities constructed more than one year after REA approves a
Modernization Plan are required to provide those services that can be
produced by equipment now in existence. The one year delay allows for
construction-in-progress to be completed before the Modernization Plan
requirements go into effect. The requirements for the medium and long
terms simply expand the coverage of the requirements so that when the
long term period (11-16 years) is reached, all subscribers will have
the services deployed during the short term period available to them.
c. Comment Summary: RELRA does not require that telecommunications
improvements be deployed ``concurrently'' in rural and nonrural areas
but only that ``the plan must provide for uniform deployment schedules
to ensure that advanced services are deployed at the same time in rural
and nonrural areas''.
Response: Several commenters thought that REA intended all
improvements to be made simultaneously throughout a service area. REA
understands that there is a logical order to providing improvements and
that they will often happen first in nonrural areas. REA intends that
they should be deployed and available at approximately the same time in
rural and nonrural areas. For example, if digital switching technology
is being deployed in a nonrural area, replacement switches in rural
areas would also employ digital technology. This does not mean that if
a switch was replaced in a nonrural area, a switch would have to be
replaced in the rural area. In the proposed rule, REA has clarified
this requirement. See Sec. 1751.106(a).
d. Comment Summary: REA has no basis for requiring either the
elimination of mileage and/or zone charges or that Telecommunications
Providers adopt flexible tariffs. These issues concern rates and are
not ``service standards''.
Response: The stated requirement in RELRA is the elimination of
party line service. REA's experience has been that imposing zone and
mileage charges on one-party service creates a large disincentive for
subscribers to choose this service. However, REA will not require the
Modernization Plan contain a provision to eliminate zone and mileage
charges.
RELRA provides that the Modernization Plan ``must provide for the
availability of telecommunications services for improved business,
educational, and medical services.'' Rigid rate structures have served
as the primary impediment to the provision of distance learning and
medical link services. REA has seen cases where states have set
wideband rates in direct proportion to the voiceband rate resulting in,
for example, rates for schools far beyond what they can afford. REA has
clarified its intent on this subject in Sec. 1751.106(e).
e. Comment Summary: It is not always practical to build only non-
loaded twisted pair plant.
Response: REA concurs and has given the Plan Developer some
discretion in this matter. Section 1751.106(g)(2)(ii) has been revised
to allow a Telecommunications Provider to request additional time from
the Plan Developer in the case of a PUC or State Legislature developed
plan, or from the REA in the case of a REA Borrower developed plan. The
Plan Developer or REA, as the case may be, must consider each request
separately and can grant additional time only if either the best
available telecommunications technology lacks the capability to enable
the Telecommunications Provider to comply with the non-loaded
requirement or complying with the requirement would impose prohibitive
cost on the Telecommunications Provider.
f. Comment Summary: Nothing in the law suggests the need for 150
Mb/sec transmission rate for video. Many compression technologies are
available which allow video to be transmitted over ordinary telephone
lines.
Response: In the interim rule, all references to provision of 150
Mb/sec service were non-binding ``objectives'', see paragraph 2a. REA
focused on the requirement in RELRA that telephone lines be capable of
carrying at least 1,000,000 bits per second. REA adjusted this to the
standard North American rate of 1.544 Mb/sec. Such a rate allows for
both the transmission of at least 1 million bits per second and for the
transmission of modest quality, highly compressed video. A higher rate
is not required by the proposed rule.
3. Comment Summary: Many radio based services such as cellular and
BETRS will be unable to meet REA bandwidth requirements.
Response: REA interprets the Modernization Plan requirements of
RELRA to apply to service provided by telephone lines, i.e., ``Wireline
Service'', the basic service most Americans receive. This
interpretation has been clarified in the proposed rule.
4. Comment Summary: REA has not defined ``Public Switched Network''
or ``Telecommunications Providers''.
Response: REA has defined these terms in the proposed regulation.
5. Comment Summary: The interim rule violates section 202 of the RE
Act which states that nothing in the RE Act shall be construed to
deprive any State commission of jurisdiction to regulate telephone
service, including the rates for such service.
Response: REA believes there is no conflict between RELRA and
section 202 of the RE Act. The PUC is neither required to develop a
Modernization Plan nor to approve REA loans that are consistent with a
Modernization Plan whoever is the Plan Developer. Therefore the PUC's
jurisdiction to regulate telephone service is not impaired. No change
has been made to the regulation based on this comment.
6. Comment Summary: REA has not considered how the proposed
services can be offered at affordable rates. The regulation could
result in an REA Borrower-developed Modernization Plan which requires
investments that a PUC would not approve.
Response: The requirements included in the proposed regulation
apply almost entirely to new construction. New construction has to be
economically justified to receive either REA financing or PUC approval
for inclusion in the rate base. REA believes strongly in universal
service and would not issue a regulation which it believed to be an
impediment to that goal. No change has been made to the regulation
based on these comments.
7. Comment Summary: REA should include a requirement that other
interested parties be notified of intent to develop a Modernization
Plan.
Response: REA concurs with this comment and has changed the wording
on notification to include other interested parties. See Sec. 1751.102
(b) and (c)(2).
8. Comment Summary: A Modernization Plan should cover only REA
Borrowers or should cover all Telecommunications Providers only if
developed by the PUC or a State Legislature.
Response: As redrafted, the Modernization Plan must apply only to
REA Borrowers unless a PUC or a State Legislature decides, at its
option, to apply the Modernization Plan to non-REA Borrower
Telecommunications Providers. The REA does, however, encourage the PUCs
and State Legislatures to apply the Modernization Plans to all
Telecommunications Providers in the State.
9. Comment Summary: REA requires integration of PCS when it doesn't
exist.
Response: REA intended that a Modernization Plan should encourage
integration of new technologies into the network. REA has substituted
``emerging technologies'' for PCS and clarified its intent. See
Sec. 1751.106(d).
10. Comment Summary: Modernization Plans should be based on market
principles.
Response: The modern telecommunications system envisioned by RELRA
and the Modernization Plan requirements can succeed only if it is
supported by market demand. REA's electric and telecommunications
programs have repeatedly demonstrated how quickly rural America takes
advantage of new utility services. RELRA and the Modernization Plans
lead the way for today's nonrural and rural subscribers to receive the
modern telecommunications services they want and need. REA believes
that the Modernization Plan requirements of this regulation rest on a
sound economic basis. True to its statutory mandate, REA will finance
projects only if it believes there is adequate security and the loan
will be repaid within the time agreed.
11. Comment Summary: It is untimely for REA to develop a rule when
other laws concerning telecommunications have been introduced in
Congress. It is inappropriate for REA to develop rules for
telecommunications. That should be the responsibility of the FCC.
Response: REA, as the agency responsible for promoting rural
telecommunications, has long experience in setting the engineering and
technical standards for service in rural areas and is ideally suited
for the responsibility it was given by Congress. REA is working to
ensure that Modernization Plan requirements and the Proposed Rule
governing their preparation are flexible enough to accommodate evolving
national policies promoting the National Information Infrastructure.
REA will revise, within our statutory constraints, these
regulations and approve amendments to Modernization Plans if the
National Information Infrastructure develops along lines not presently
envisioned. However, the legislative imperative of RELRA and rural
America's urgent need for modern telecommunications services require
that the regulations not be delayed.
12. Comment Summary: The rule is not clear on Plan Developer
eligibility as related to time. The law says the one year period starts
after publication of the final rule. Can Borrowers submit a
Modernization Plan before the end of the year if the PUC or State
Legislature does not intend to? What if a PUC or State Legislature
submits a Modernization Plan on the last day? Won't loans be delayed if
a PUC or State Legislature does not develop a plan and an REA Borrower-
developed one has not been approved?
Response: RELRA sets forth the method of determining Plan Developer
eligibility. With regard to the specific points mentioned above:
a. The one year period starts with publication of the final rule
developed in response to comments on this proposed rule.
b. Modernization Plans developed by REA Borrowers will not be
accepted until a PUC's and State Legislature's eligibility has expired,
unless the PUC and State Legislature officially reject eligibility.
c. A Modernization Plan submitted on the last day will be approved
by REA if it meets the minimum requirements without alteration. The
proposed rule includes language which recommends that to ensure a PUC
or a State Legislature has sufficient time to respond to any REA
comments on its proposed Modernization Plan, the PUC or State
Legislature should submit its plan at least 90 days in advance of the
expiration of its eligibility. See Sec. 1751.104(b)(2).
d. Loans will not be made between the end of a PUC's and State
Legislature's eligibility and the approval of a Borrower-developed
Modernization Plan.
13. Comment Summary: The regulation should allow for waivers to a
Modernization Plan.
Response: REA has changed the regulation to allow the Modernization
Plan developer the authority to grant time extensions necessitated by
the state of technology as long as the extensions are granted on a
case-by-case basis, do not exceed five years, and the circumstances for
which extensions are granted are spelled out in the Modernization Plan.
See Sec. 1751.106(b).
14. Comment Summary: What is a generic design for Broadband
service? How can this be done without local power?
Response: REA believes that the lack of consensus on how to bring
wider band switched service to the home and small business,
particularly in rural areas, means that Telecommunications Providers
continue to build and rebuild their systems essentially for traditional
voiceband service. In many cases this plant can not be adapted to wider
band services.
In the interim rule (dated December 20, 1993) REA had required a
``generic design'' for broadband service. Since REA is no longer
including non-binding goals in the proposed regulation, the requirement
for a generic design has been changed to a requirement for the
developer to provide a strategic development proposal which provides
the Plan Developer's vision of a State telecommunications structure for
the future.
With regard to local power, REA retains a concern over system
reliability. The proposed rule requires that no matter what level of
service is being offered, sufficient system power must be available to
provide voice service during electric utility outages. See
Sec. 1751.106(h)(2)(ii) and (i)(2)(iv).
General Summary: It is REA's belief that national
telecommunications ``highways'' will not and cannot be fully utilized
unless improvements are made to what might be called the
telecommunications ``driveways'', the local loops. Most loops cannot
transmit information over 9600 bits per second (b/s). Consequently,
many advanced telecommunications services are not available on the
Public Switched Network or, where available, operate only on short
loops. This limits use of these advanced services to densely populated
areas.
RELRA requires that telephone lines be capable of transmitting: (1)
Information at no less than 1,000,000 bits per second (1Mb/s) and (2)
video images. REA believes both requirements can be satisfied by
telephone lines which can transmit and receive 1.544 Mb/s, the North
American standard digital transmission rate. This rate is sufficient to
carry both 1 million bits per second and highly compressed, modest
quality video.
To carry 1.544 Mb/sec, the capacity of ordinary telephone loops
must be increased by several orders of magnitude. The other
requirements in the law are more easily met. Therefore, improving the
loop has been REA's focus in preparing minimum Modernization Plan
requirements.
REA believes that the requirements and time limits set forth in
this section will achieve the service standards of RELRA.
However, REA is concerned about coordination between States. REA
recommends that Modernization Plan Developers should work with Plan
Developers in other States both before and after their Modernization
Plans are approved to coordinate proposed improvements.
REA recommends that Modernization Plan Developers give
consideration to planning for outside plant which can ultimately
provide future broadband Wireline Service with a bandwidth equivalent
to a digital rate on the order of 150 Mb/sec. Such facilities could
carry one or more channels of conventional video with the quality
depending on the modulation technique.
List of Subjects in 7 CFR Part 1751
Loan programs--communications, Telecommunications, Telephone.
For reasons set forth in the preamble, chapter XVII of Title 7 of
the Code of Federal Regulations is proposed to be amended by revising
part 1751 to read as follows:
PART 1751--TELECOMMUNICATIONS SYSTEM PLANNING AND DESIGN CRITERIA,
AND PROCEDURES
Subpart A--[Reserved]
Sec.
1751.1-1751.99 [Reserved]
Subpart B--State Telecommunications Modernization Plan
1751.100 Definitions.
1751.101 General.
1751.102 Modernization Plan developer--eligibility.
1751.103 Loan requirements.
1751.104 Obtaining REA approval of a proposed Modernization Plan.
1751.105 Amending a Modernization Plan--
1751.106 Modernization Plan--requirements.
Authority: 7 U.S.C. 901 et seq., 1921 et seq.
Subpart A--[Reserved]
Secs. 1751.1-1751.99 [Reserved]
Subpart B--State Telecommunications Modernization Plan
Sec. 1751.100 Definitions.
As used in this subpart:
Bit rate. The rate of transmission of telecommunications signals or
intelligence in binary (two state) form in bits per unit time, e.g.,
Mb/s (megabits per second), kb/s (kilobits per second), etc.
Borrower. Any organization which has an outstanding telephone loan
made by REA or the Rural Telephone Bank, or guaranteed by REA, or which
has a completed loan application with REA.
Emerging technologies. New or not fully developed methods of
telecommunications.
Hardship loan. A loan made by REA under section 305(d)(1) of the RE
Act bearing interest at a rate of 5 percent per year.
Local power. Electrical source, provided by someone other than the
telecommunications utility, used for powering a subscriber's station
equipment.
Loop. A dedicated facility which connects the customer's station to
the Public Switched Network. The loop may consist of twisted pair
copper wire, coaxial cable, fiber optic cable, radio, or a combination
of these. It may also include dedicated electronic or lightwave
transmission equipment.
Modernization Plan (State Telecommunications Modernization Plan). A
plan, which has been approved by REA, for improving the Public Switched
Network of a State. The Modernization Plan must conform to the
provisions of this subpart.
Plan Developer. The PUC, State Legislature, or a numeric majority
of the REA borrowers within the State that have the responsibility for
creating the Modernization Plan.
Public Switched Network. The network intended for public use
furnished by Telecommunications Providers on a switched basis.
PUC (Public Utilities Commission). The public utilities commission,
public service commission or other State body with such jurisdiction
over rates, service areas or other aspects of the services and
operation of providers of telecommunications services as vested in the
commission or other body authority, to the extent provided by the
State, to guide development of telecommunications services in the
State.
RE Act. The Rural Electrification Act of 1936, as amended (7 U.S.C.
901 et seq.).
REA cost-of-money loan. A loan made under section 305(d)(2) of the
RE Act bearing an interest rate as determined under 7 CFR 1735.31(c).
REA cost-of-money loans are made concurrently with RTB loans.
RTB loan. A loan made by the Rural Telephone Bank (RTB) under
section 408 of the RE Act bearing an interest rate as determined under
7 CFR 1610.10. RTB loans are made concurrently with REA cost-of-money
loans.
State. Each of the 50 states of the United States, the District of
Columbia, and the territories and insular possessions of the United
States. This does not include countries in the Compact of Free
Association.
Telecommunications. The transmission or reception of voice, data,
sounds, signals, pictures, writings, or signs of all kinds, by wire,
fiber, radio, light, or other visual or electromagnetic means.
Telecommunications Providers. Local exchange carriers, competitive
access providers, and interexchange carriers which provide
telecommunications service in the State covered by the Modernization
Plan and such other entities providing telecommunications services as
the developer of the Modernization Plan (See Sec. 1751.102) may
determine.
Wireline Service. Telecommunications service provided over
telephone lines. It is characterized by a wire or wirelike connection
carrying electricity or light between the subscriber and the Public
Switched Network. Wireline Service implies a physical connection.
Although radio may form part of the circuit, it is not the major method
of transmission as in radiotelephone.
Sec. 1751.101 General.
(a) It is the policy of REA that every State have a Modernization
Plan which provides for the improvement of the State's Public Switched
Network.
(b) A proposed Modernization Plan must be submitted to REA for
approval. REA will approve the proposed Modernization Plan if it
conforms to the provisions of this subpart. Once obtained, REA's
approval of a Modernization Plan cannot be rescinded.
(c) The Modernization Plan shall not interfere with REA's authority
to issue such other telecommunications standards, specifications,
requirements, and procurement rules as may be promulgated from time to
time by REA including, without limitation, those set forth in 7 CFR
part 1755.
(d) The Modernization Plan must, at a minimum, apply to all REA
borrowers. If a Modernization Plan is developed by the PUC or the State
Legislature, REA encourages, but does not require, that the
Modernization Plan's requirements apply to the rural service areas of
all Telecommunications Providers. A State's decision not to include
non-REA borrowers will not prejudice REA approval of their Plan. The
PUC or the State Legislature may also, at its option, extend coverage
of the Modernization Plan to all service areas of all
Telecommunications Providers in the State. In addition, while
requirements contained in Sec. 1751.106 apply only to wireline
services, the State Legislature or PUC, at its discretion, may extend
coverage of Modernization Plans to wireless or other communications
services in a State as it deems appropriate.
Sec. 1751.102 Modernization Plan developer--eligibility.
(a) Each State, either by statute or through its Public Utility
Commission, is eligible until one year after publication of the final
rule in the Federal Register to develop a proposed Modernization Plan
and deliver it to REA. REA will review and consider for approval all
PUC or State Legislature-developed Modernization Plans received by REA
within this one year period. The review and approval, if any, may occur
after the one year period ends even though the PUC or State Legislature
is no longer eligible to submit a proposed Modernization Plan.
(b) The PUC must notify all Telecommunications Providers in the
State that are part of the Public Switched Network and other interested
parties of its intent to develop a proposed Modernization Plan. The PUC
is encouraged to consider all such Providers' and interested parties'
views and incorporate these views in the Modernization Plan.
(c) If the State Legislature or PUC is no longer eligible to
develop a Modernization Plan, as described in paragraph (a) of this
section, eligibility to develop the Modernization Plan passes to a
numeric majority of the Borrowers within the State. In this case, the
following apply:
(1) All Borrowers shall be given reasonable notice of and shall be
encouraged to attend and contribute to all meetings and other
proceedings relating to the development of the Modernization Plan; and
(2) Borrowers developing a Modernization Plan are encouraged to
solicit the views of other Telecommunications Providers and interested
parties in the State.
(3) There is no time limit placed on the REA Borrowers to develop a
Modernization Plan, however, REA, as required by the Rural
Electrification Loan Restructuring Act of 1993 (107 Stat. 1356), will
not approve any direct loans in States that do not have an approved
Modernization Plan. See Sec. 1751.103 of this subpart.
Sec. 1751.103 Loan requirements.
For information about loan eligibility requirements in relation to
the Modernization Plan, see 7 CFR part 1735. In particular, one year
after publication of the final rule, REA will make hardship loans, REA
cost-of-money loans, and RTB loans for facilities and other RE Act
purposes for Telephone Borrowers in a State only if:
(a) The State has an REA approved Modernization Plan; and
(b) The Borrower is participating in the Modernization Plan for the
State. A Borrower is considered to be participating if, in REA's
opinion, the purposes of the loan requested by the Borrower are
consistent with the Borrower achieving the requirements stated in the
Modernization Plan within the timeframe stated in the Modernization
Plan unless REA has determined that achieving the requirements is not
technically or economically feasible.
Sec. 1751.104 Obtaining REA approval of a proposed Modernization Plan.
(a) To obtain REA approval of a proposed Modernization Plan, the
Plan Developer must submit the following to REA:
(1) A certified copy of the statute or PUC order, if the State is
the Plan Developer, or a written request for REA approval of the
proposed Modernization Plan signed by an authorized representative of
the Plan Developer, if a majority of Borrowers is the Plan Developer;
and
(2) Three copies of the proposed Modernization Plan.
(b) Generally, REA will review the proposed Modernization Plan
within (30) days and either:
(1) Approve the Modernization Plan if it conforms to the provisions
of this subpart in which case REA will return a copy of the
Modernization Plan with notice of approval to the Plan Developer; or,
(2) Not approve the proposed Modernization Plan if it does not
conform to the provisions of this subpart. In this event, REA will
return the proposed Modernization Plan to the Plan Developer with
specific written comments and suggestions for modifying the proposed
Modernization Plan so that it will conform to the provisions of this
subpart. If the Plan Developer remains eligible, REA will invite the
Plan Developer to submit a modified proposed Modernization Plan for REA
consideration. This process can continue until the Plan Developer gains
approval of a proposed Modernization Plan unless the Plan Developer is
a PUC or State Legislature whose eligibility has expired. If the PUC's
or State Legislature's eligibility has expired, REA will return the
proposed Modernization Plan unapproved. Because REA does not have
authority to extend a PUC's or State Legislature's eligibility, REA
recommends that a PUC or State Legislature submit a proposed
Modernization Plan at least 90 days in advance of one year after
publication of the final rule to allow time for this process.
Sec. 1751.105 Amending a Modernization Plan.
(a) REA understands that changes in standards, technology,
regulation, and the economy could indicate that an REA-approved
Modernization Plan should be amended.
(b) The Plan Developer of the Modernization Plan may amend the
Modernization Plan if REA finds the proposed changes continue to
conform to the provisions of this subpart.
(c) The procedure for requesting approval of an amended
Modernization Plan is identical to the procedure for a proposed
Modernization Plan except that there are no time limits on the
eligibility of the Plan Developer.
(d) The existing Modernization Plan remains in force until REA has
approved the proposed amended Modernization Plan.
(e) REA may from time to time revise these regulations to
incorporate newer technological and economic standards that REA
believes represent more desirable goals for the future course of
telecommunications services. Such revisions will be made in accordance
with the Administrative Procedure Act. These revisions shall not
invalidate Modernization Plans approved by REA but shall be used by REA
to determine whether to approve amendments to Modernization Plans
presented for REA approval after the effective date of the revision.
Sec. 1751.106 Modernization Plan--requirements.
(a) A Modernization Plan must set service requirements for
improving the Public Switched Network and must at a minimum meet the
following requirements:
(1) The Modernization Plan must provide for the elimination of
party line service.
(2) The Modernization Plan must provide for the availability of
telecommunications services for improved business, educational, and
medical services.
(3) The Modernization Plan must encourage and improve computer
networks and information highways for subscribers in rural areas.
(4) The Modernization Plan must provide for:
(i) Subscribers in rural areas to be able to receive through
telephone lines:
(A) Conference calling;
(B) Video images; and
(C) Data at a rate of at least 1,000,000 bits of information per
second; and
(ii) The proper routing of information to subscribers.
(5) The Modernization Plan must provide for uniform deployment
schedules to ensure that advanced services are deployed at the same
time in rural and nonrural areas.
(b) In addition to the requirements set forth in paragraph (a) of
this section, minimum requirements are described in paragraphs (g)
through (i) of this section and are grouped by timeframe, i.e., short-
term, medium-term, and long-term. The Modernization Plan shall provide
that such requirements be implemented as set forth in this section of
the regulation except that the Modernization Plan may authorize the
Plan Developer to approve extensions if the required investment is not
economically reasonable or if the best available telecommunications
technology lacks the capability to enable the Telecommunications
Provider receiving the extension to comply with the Modernization Plan.
Extensions shall be granted only on a case-by-case basis and shall not
exceed a total of five years from the first extension except under
unusual circumstances.
(c) Each State's Modernization Plan shall include a strategic
development proposal for rebuilding the Public Switched Network within
the State. The strategic development proposal shall provide all
Telecommunications Providers in the State the Plan Developer's vision
of a State telecommunications structure for the future. Within the
scope of paragraph (d) of Sec. 1751.101 of this subpart, the
Modernization Plan shall state whether all Telecommunications Providers
in the State are required to construct their systems in a manner
consistent with the strategic development proposal.
(d) The Modernization Plan must require that the design of the
Public Switched Network allow for the expeditious deployment and
integration of such emerging technologies as may from time to time
become commercially feasible.
(e) The Modernization Plan must provide guidelines to
Telecommunications Providers for the development of affordable tariffs
for medical links and distance learning services.
(f) With regard to the uniform deployment requirement set forth in
paragraph (a)(5) of this section, if services cannot be deployed at the
same time, only the minimum feasible interval of time shall separate
availability of the services in rural and nonrural areas.
(g) Short-term requirements. (1) The ``short-term requirements
start date'' is the date one year after the date REA approves the
Modernization Plan for the State.
(2) All facilities providing Wireline Service wholly or partially
constructed or reconstructed after the short-term requirements start
date, even if the construction began before such date, shall be
constructed so that:
(i) Every subscriber can be provided 1-party service. Existing
party line subscribers would be allowed to maintain party line service
only if they requested it and approval is granted by the PUC.
(ii) Twisted-pair copper plant is non-loaded, unless the PUC, in
the case of a PUC or State Legislature-developed Modernization Plan, or
the REA, in the case of a REA Borrower-developed Modernization Plan,
determines, on a case-by-case basis, after written request from a
Telecommunications Provider, that the Telecommunications Provider
should be granted additional time because either the best available
telecommunications technology lacks the capability to enable the
Telecommunications Provider to comply with this requirement or
complying with this requirement would impose prohibitive cost on the
Telecommunications Provider.
(3) All switching equipment installed by a Telecommunications
Provider after the short-term requirements start date shall contain the
hardware, but not necessarily the software, to be capable of:
(i) Switching 1.544 Mb/sec. traffic.
(ii) Providing custom calling features. At a minimum, custom
calling features must include call waiting, call forwarding,
abbreviated dialing, and three-way calling.
(iii) Providing E911 service when required by any local government
for areas served by the Telecommunications Provider.
(h) Medium-term requirements. (1) The ``medium-term requirements
start date'' is the date six years after the date REA approves the
Modernization Plan for the State, or such earlier date as the
Modernization Plan shall provide.
(2) All facilities providing Wireline Service wholly or partially
constructed or reconstructed after the medium-term requirements start
date, even if the construction began before such date, shall be
constructed so that:
(i) Switched 1.544 Mb/sec service is available to any subscriber.
Available means the service will be provided on demand after a
reasonable waiting period.
(ii) The system does not rely exclusively on local power at the
subscriber end. There must be sufficient system power to operate
subscriber voice service during electric utility power outages.
(3) No later than the medium-term start date, all switching
equipment must be provisioned with the necessary hardware to be capable
of providing E911 service when required by any local government for
areas served by the Telecommunications Provider.
(i) Long-term requirements. (1) The ``long-term requirements start
date'' is the date eleven years after the date REA approves the
Modernization Plan for the State, or such earlier date as the
Modernization Plan shall provide.
(2) After the long-term requirements start date, the following
requirements shall apply to all Wireline Service provided by
Telecommunications Providers:
(i) Telecommunications Providers shall eliminate party line
service.
(ii) Telephone service shall be available to any subscriber at
1.544 Mb/sec. Available means the service will be provided on demand
after a reasonable waiting period.
(iii) No service lower than one digital voice circuit (56-64 kb/
sec) shall be offered as a new service.
(iv) The system must not rely exclusively on local power at the
subscriber end. There must be sufficient system power to operate
subscriber voice service during electric utility power outages.
Dated: October 24, 1994.
Bob J. Nash,
Under Secretary, Small Community and Rural Development.
[FR Doc. 94-26761 Filed 10-26-94; 8:45 am]
BILLING CODE 3410-15-P
