Goto Section: 54.803 | 54.805 | Table of Contents

FCC 54.804
Revised as of January 14, 2021
Goto Year:2020 | 2022
  §  54.804   Rural Digital Opportunity Fund application process.

   (a) In addition to providing information specified in § 1.21001(b) of
   this chapter and any other information required by the Commission, any
   applicant to participate in competitive bidding for Rural Digital
   Opportunity Fund support shall:

   (1) Provide ownership information as set forth in § 1.2112(a) of this
   chapter;

   (2) Certify that the applicant is financially and technically qualified
   to meet the public interest obligations established for Rural Digital
   Opportunity Fund support;

   (3) Disclose its status as an eligible telecommunications carrier to
   the extent applicable and certify that it acknowledges that it must be
   designated as an eligible telecommunications carrier for the area in
   which it will receive support prior to being authorized to receive
   support;

   (4) Describe the technology or technologies that will be used to
   provide service for each bid;

   (5) Submit any information required to establish eligibility for any
   bidding weights adopted by the Commission in an order or public notice;

   (6) To the extent that an applicant plans to use spectrum to offer its
   voice and broadband services, demonstrate it has the proper
   authorizations, if applicable, and access to operate on the spectrum it
   intends to use, and that the spectrum resources will be sufficient to
   cover peak network usage and deliver the minimum performance
   requirements to serve all of the fixed locations in eligible areas, and
   certify that it will retain its access to the spectrum for the term of
   support;

   (7) Submit operational and financial information.

   (i) If applicable, the applicant should submit a certification that it
   has provided a voice, broadband, and/or electric transmission or
   distribution service for at least two years or that it is a
   wholly-owned subsidiary of such an entity, and specifying the number of
   years the applicant or its parent company has been operating, and
   submit the financial statements from the prior fiscal year that are
   audited by an independent certified public accountant. If the applicant
   is not audited in the ordinary course of business, in lieu of
   submitting audited financial statements it must submit unaudited
   financial statements from the prior fiscal year and certify that it
   will provide financial statements from the prior fiscal year that are
   audited by an independent certified public accountant by a specified
   deadline during the long-form application review process.

   (A) If the applicant has provided a voice and/or broadband service it
   must certify that it has filed FCC Form 477s as required during this
   time period.

   (B) If the applicant has operated only an electric transmission or
   distribution service, it must submit qualified operating or financial
   reports that it has filed with the relevant financial institution for
   the relevant time period along with a certification that the submission
   is a true and accurate copy of the reports that were provided to the
   relevant financial institution.

   (ii) If an applicant cannot meet the requirements in paragraph
   (a)(7)(i) of this section, in the alternative it must submit the
   audited financial statements from the three most recent fiscal years
   and a letter of interest from a bank meeting the qualifications set
   forth in paragraph (c)(2) of this section, that the bank would provide
   a letter of credit as described in paragraph (c) of this section to the
   bidder if the bidder were selected for bids of a certain dollar
   magnitude.

   (8) Certify that the applicant has performed due diligence concerning
   its potential participation in the Rural Digital Opportunity Fund.

   (b) Application by winning bidders for Rural Digital Opportunity Fund
   support—

   (1) Deadline. As provided by public notice, winning bidders for Rural
   Digital Opportunity Fund support or their assignees shall file an
   application for Rural Digital Opportunity Fund support no later than
   the number of business days specified after the public notice
   identifying them as winning bidders.

   (2) Application contents. An application for Rural Digital Opportunity
   Fund support must contain:

   (i) Identification of the party seeking the support, including
   ownership information as set forth in § 1.2112(a) of this chapter;

   (ii) Certification that the applicant is financially and technically
   qualified to meet the public interest obligations for Rural Digital
   Opportunity Fund support in each area for which it seeks support;

   (iii) Certification that the applicant will meet the relevant public
   interest obligations, including the requirement that it will offer
   service at rates that are equal or lower to the Commission's reasonable
   comparability benchmarks for fixed wireline services offered in urban
   areas;

   (iv) A description of the technology and system design the applicant
   intends to use to deliver voice and broadband service, including a
   network diagram which must be certified by a professional engineer. The
   professional engineer must certify that the network is capable of
   delivering, to at least 95 percent of the required number of locations
   in each relevant state, voice and broadband service that meets the
   requisite performance requirements for Rural Digital Opportunity Fund
   support;

   (v) Certification that the applicant will have available funds for all
   project costs that exceed the amount of support to be received from the
   Rural Digital Opportunity Fund for the first two years of its support
   term and that the applicant will comply with all program requirements,
   including service milestones;

   (vi) A description of how the required construction will be funded,
   including financial projections that demonstrate the applicant can
   cover the necessary debt service payments over the life of the loan, if
   any;

   (vii) Certification that the party submitting the application is
   authorized to do so on behalf of the applicant; and

   (viii) Such additional information as the Commission may require.

   (3) Letter of credit commitment letter. No later than the number of
   days provided by public notice, the long-form applicant shall submit a
   letter from a bank meeting the eligibility requirements outlined in
   paragraph (c) of this section committing to issue an irrevocable
   stand-by letter of credit, in the required form, to the long-form
   applicant. The letter shall at a minimum provide the dollar amount of
   the letter of credit and the issuing bank's agreement to follow the
   terms and conditions of the Commission's model letter of credit.

   (4) Audited financial statements. No later than the number of days
   provided by public notice, if a long-form applicant or a related entity
   did not submit audited financial statements in the relevant short-form
   application as required, the long-form applicant must submit the
   financial statements from the prior fiscal year that are audited by an
   independent certified public accountant.

   (5) Eligible telecommunications carrier designation. No later than 180
   days after the public notice identifying it as a winning bidder, the
   long-form applicant shall certify that it is an eligible
   telecommunications carrier in any area for which it seeks support and
   submit the relevant documentation supporting that certification.

   (6) Application processing. (i) No application will be considered
   unless it has been submitted in an acceptable form during the period
   specified by public notice. No applications submitted or demonstrations
   made at any other time shall be accepted or considered.

   (ii) Any application that, as of the submission deadline, either does
   not identify the applicant seeking support as specified in the public
   notice announcing application procedures or does not include required
   certifications shall be denied.

   (iii) An applicant may be afforded an opportunity to make minor
   modifications to amend its application or correct defects noted by the
   applicant, the Commission, the Administrator, or other parties. Minor
   modifications include correcting typographical errors in the
   application and supplying non-material information that was
   inadvertently omitted or was not available at the time the application
   was submitted.

   (iv) Applications to which major modifications are made after the
   deadline for submitting applications shall be denied. Major
   modifications include, but are not limited to, any changes in the
   ownership of the applicant that constitute an assignment or change of
   control, or the identity of the applicant, or the certifications
   required in the application.

   (v) After receipt and review of the applications, a public notice shall
   identify each long-form applicant that may be authorized to receive
   Rural Digital Opportunity Fund support after the long-form applicant
   submits a letter of credit and an accompanying opinion letter as
   described in paragraph (c) of this section, in a form acceptable to the
   Commission. Each such long-form applicant shall submit a letter of
   credit and accompanying opinion letter as required by paragraph (c) of
   this section, in a form acceptable to the Commission no later than the
   number of business days provided by public notice.

   (vi) After receipt of all necessary information, a public notice will
   identify each long-form applicant that is authorized to receive Rural
   Digital Opportunity Fund support.

   (c) Letter of credit. Before being authorized to receive Rural Digital
   Opportunity Fund support, a winning bidder shall obtain an irrevocable
   standby letter of credit which shall be acceptable in all respects to
   the Commission.

   (1) Value. Each recipient authorized to receive Rural Digital
   Opportunity Fund support shall maintain the standby letter of credit in
   an amount equal to, at a minimum, one year of support, until the
   Universal Service Administrative Company has verified that the
   recipient has served 100 percent of the Connect America Cost
   Model-determined location total (or the adjusted Connect America Cost
   Model location count if there are fewer locations) by the end of year
   six.

   (i) For year one of a recipient's support term, it must obtain a letter
   of credit valued at an amount equal to one year of support.

   (ii) For year two of a recipient's support term, it must obtain a
   letter of credit valued at an amount equal to eighteen months of
   support.

   (iii) For year three of a recipient's support term, it must obtain a
   letter of credit valued at an amount equal to two years of support.

   (iv) For year four of a recipient's support term, it must obtain a
   letter of credit valued at an amount equal to three years of support.

   (v) A recipient may obtain a new letter of credit or renew its existing
   letter of credit so that it is valued at an amount equal to one year of
   support once it meets its optional or required service milestones. The
   recipient may obtain or renew this letter of credit upon verification
   of its buildout by the Universal Service Administrative Company. The
   recipient may maintain its letter of credit at this level for the
   remainder of its deployment term, so long as the Universal Service
   Administrative Company verifies that the recipient successfully and
   timely meets its remaining required service milestones.

   (vi) A recipient that fails to meet its required service milestones
   must obtain a new letter of credit or renew its existing letter of
   credit at an amount equal to its existing letter of credit, plus an
   additional year of support, up to a maximum of three years of support.

   (vii) A recipient that fails to meet two or more required service
   milestones must maintain a letter of credit in the amount of three year
   of support and may be subject to additional non-compliance penalties as
   described in § 54.320(d).

   (2) Bank eligibility. The bank issuing the letter of credit shall be
   acceptable to the Commission. A bank that is acceptable to the
   Commission is:

   (i) Any United States bank

   (A) That is insured by the Federal Deposit Insurance Corporation, and

   (B) That has a bank safety rating issued by Weiss of B− or better; or

   (ii) CoBank, so long as it maintains assets that place it among the 100
   largest United States Banks, determined on basis of total assets as of
   the calendar year immediately preceding the issuance of the letter of
   credit and it has a long-term unsecured credit rating issued by
   Standard & Poor's of BBB− or better (or an equivalent rating from
   another nationally recognized credit rating agency); or

   (iii) The National Rural Utilities Cooperative Finance Corporation, so
   long as it maintains assets that place it among the 100 largest United
   States Banks, determined on basis of total assets as of the calendar
   year immediately preceding the issuance of the letter of credit and it
   has a long-term unsecured credit rating issued by Standard & Poor's of
   BBB− or better (or an equivalent rating from another nationally
   recognized credit rating agency); or

   (iv) Any non-United States bank:

   (A) That is among the 100 largest non-U.S. banks in the world,
   determined on the basis of total assets as of the end of the calendar
   year immediately preceding the issuance of the letter of credit
   (determined on a U.S. dollar equivalent basis as of such date);

   (B) Has a branch office:

   (1) Located in the District of Columbia; or

   (2) Located in New York City, New York, or such other branch office
   agreed to by the Commission, that will accept a letter of credit
   presentation from the Administrator via overnight courier, in addition
   to in-person presentations;

   (C) Has a long-term unsecured credit rating issued by a
   widely-recognized credit rating agency that is equivalent to a BBB− or
   better rating by Standard & Poor's; and

   (D) Issues the letter of credit payable in United States dollars

   (3) Bankruptcy opinion letter. A long-form applicant for Rural Digital
   Opportunity Fund support shall provide with its letter of credit an
   opinion letter from its legal counsel clearly stating, subject only to
   customary assumptions, limitations, and qualifications, that in a
   proceeding under Title 11 of the United States Code, 11 U.S.C. 101 et
   seq. (the “Bankruptcy Code”), the bankruptcy court would not treat the
   letter of credit or proceeds of the letter of credit as property of the
   winning bidder's bankruptcy estate under section 541 of the Bankruptcy
   Code.

   (4) Non-compliance. .Authorization to receive Rural Digital Opportunity
   Fund support is conditioned upon full and timely performance of all of
   the requirements set forth in this section, and any additional terms
   and conditions upon which the support was granted.

   (i) Failure by a Rural Digital Opportunity Fund support recipient to
   meet its service milestones for the location totals determined by the
   Connect America Cost Model, or the location total that is adjusted by
   the Wireline Competition Bureau for those areas where there are fewer
   locations than the number of locations determined by the Connect
   America Cost Model, as required by § 54.802 will trigger reporting
   obligations and the withholding of support as described in § 54.320(d).
   Failure to come into full compliance during the relevant cure period as
   described in § § 54.320(d)(1)(iv)(B) or 54.320(d)(2) will trigger a
   recovery action by the Universal Service Administrative Company as
   described in § 54.320(d)(1)(iv)(B) or § 54.806(c)(1)(i), as applicable.
   If the Rural Digital Opportunity Fund recipient does not repay the
   requisite amount of support within six months, the Universal Service
   Administrative Company will be entitled to draw the entire amount of
   the letter of credit and may disqualify the Rural Digital Opportunity
   Fund support recipient from the receipt of Rural Digital Opportunity
   Fund support or additional universal service support.

   (ii) The default will be evidenced by a letter issued by the Chief of
   the Wireline Competition Bureau, or its respective designees, which
   letter, attached to a standby letter of credit draw certificate, shall
   be sufficient for a draw on the standby letter of credit for the entire
   amount of the standby letter of credit.

   [ 85 FR 13798 , Mar. 10, 2020, as amended at  85 FR 75822 , Nov. 25, 2020]

   


Goto Section: 54.803 | 54.805

Goto Year: 2020 | 2022
CiteFind - See documents on FCC website that cite this rule

Want to support this service?
Thanks!

Report errors in this rule. Since these rules are converted to HTML by machine, it's possible errors have been made. Please help us improve these rules by clicking the Report FCC Rule Errors link to report an error.
hallikainen.com
Helping make public information public