December 30, 2021

The Future of the Universal Service Fund (part 2)

Last month, we discussed trends in funding for universal service programs, noting that recently Congress has appropriated some funds directly for USF-like purposes, such as the EBB and the ECF.  November saw the passage (finally) of the Infrastructure Investment and Jobs Act (IIJA or, simply, the Infrastructure Act).  One provision of the Infrastructure Act is that the FCC report to Congress on the FCC’s options for “improving its effectiveness in achieving universal service goals” in light of the Infrastructure Act spending.  The FCC dutifully issued a Notice of Inquiry to collect views on this report, with comments due in January.  Not surprisingly, a wide variety of USF stakeholders are responding to the NOI.  Some see the NOI and the subsequent report as a threat to the USF as we’ve known it for the past 20 years.  Others are focusing on ways the USF programs can be expanded or can fill in gaps in the existing programs.  The Commission seems to be taking a broad view of the proceeding.  It defines its universal service goals to include “universal deployment, affordability, adoption, availability, and equitable access to broadband throughout the United States,” which in some ways is broader than the current USF program.
 
Because time is short, we want to highlight a few questions the FCC has proposed, for consideration by those who may wish to participate in the proceeding.  Among the most interesting are the following:
 

  • The Commission posits an evolving standard of sufficient broadband access, seeking “comment on how our programs may continue to evolve in light of the Act, but ‘not in any way reduce the congressional mandate to achieve the universal service goals for broadband.’” (para. 19)
  • The Commission asks for comment on “How should we account for the role that non-permanent programs created by Congress in response to the COVID-19 pandemic (EBB, ECF, and the COVID-19 Telehealth Program) have played in supplementing the USF programs?” (para 20)
  • It seeks comment on the data it should be collecting to evaluate the performance of universal service programs in achieving their goals (para. 20)
  • Noting the significant broadband deployment programs in the Infrastructure Act, the Commission asks, “how should the Report [to Congress] account for the relationship between projects to be funded by the Act and those funded by USF?” (para. 25)
  • It seeks to avoid duplication of funding, asking, “how can we cooperate with other federal agencies to prevent unnecessary duplication of broadband funding (i.e., representing to both agencies that a particular activity is supported by that agency’s program without disclosing that the same activity is supported by the other agency)?” (para. 27)

 
The Notice then asks for a number of recommendations on how it should modify its USF programs (High Cost, Lifeline, E-Rate and Rural Healthcare) in light of this funding.  This is the key question facing the Commission.  With Congress stepping in to provide additional broadband funding, what is the future of the USF program?  It still has a significant role, of that we are sure.  But can it be re-focused, and if so, how?  When you combine that question with the looming question on contributions reform, the FCC has some vexing decisions before it regarding the tried-and-true USF program.  All stakeholders should take note.


Recent News

General (Including Non-USF Programs)

  • On December 28, the FCC issued a Public Notice (DA 21-1609) announcing its monthly streamlined dispositions of USF requests taken by the Universal Service Administrative Company (USAC). The deadline for filing petitions for reconsideration or applications for review concerning the disposition of any of these Requests is 30 days from the release date of this Public Notice.
 
  • On December 23, the FCC issued a Public Notice (DA 21-1640) announcing the appointment of seven members to the Board of Directors of USAC. The term for the representative for commercial mobile radio service providers will end December 31, 2022. All other positions are for a three-year term beginning on January 1, 2022.
 
  • On December 16, the FCC released a Notice of Inquiry (FCC 21-127) on the Future of the Universal Service Program.  The Notice of Inquiry will inform a report the Commission must submit to  Congress “on the options of the Commission for improving its effectiveness in achieving the universal service goals for broadband in light of [the Infrastructure Act].”  Comments will be due January 18, 2022, with replies due January 31, 2022.
 
  • On December 9, the FCC and issued a Public Notice (DA 21-1532) announcing that Chairwoman Jessica Rosenworcel, in consultation with Secretary of Agriculture Tom Vilsack, has appointed members to serve on the re-chartered Task Force for Reviewing the Connectivity and Technology Needs of Precision Agriculture in the United States (Precision Ag Connectivity Task Force or Task Force). The Task Force will hold its first meeting under the new charter on Thursday, January 13, 2022, beginning at 10:00 am EST. The Public Notice also provides below a limited exemption from ex parte rules for certain communications between Task Force and working group members and FCC staff or Commissioners.
 
  • On December 8, the FCC’s Wireline Competition Bureau (WCB) released an Order (DA 21-1524) waiving rules governing the internet service offering, standard rate, provider participation, and election notice requirements for the end of the Emergency Broadband Benefit Program (EBB Program), and providing further guidance for the transition to the Affordable Connectivity Program.
 
  • On December 2, the WCB issued a Public Notice (DA 21-1507) announcing an updated version of responses to Frequently Asked Questions (FAQs) for the Secure and Trusted Communications Networks Reimbursement Program. The updated FAQs and other important documents related to the Reimbursement Program are available at https://www.fcc.gov/supplychain.


Lifeline/Emergency Broadband Benefit/Affordable Connectivity Program

  • On December 30, the WCB released an Order (DA 21-1650) which extends, for the tenth time, various COVID-19 related waivers in the Lifeline program through March 31, 2022.
 
  • On December 27, Assurance Wireless filed a Request for Waiver of the FCC’s rules relating to Lifeline reimbursements for Texas subscribers.
 
  • On December 27, the WCB issued a Public Notice (DA 21-1641) approving amendments to the Lifeline Compliance Plan filed by AirVoice Communications to reflect its recent acquisition by VTel Holdings, LLC.
 
  • On December 8, the WCB issued further guidance (DA 21-1524) on the transition to and operation of the Affordable Connectivity Program, which is scheduled to start on January 1, 2022.  The Bureau waives certain rules under the Emergency Broadband Benefit (EBB) program in light of the Infrastructure Act and provides guidance to assist stakeholders in transitioning from the EBB to the ACP.


High Cost Fund Programs

  • On December 16, the FCC released a Public Notice (DA 21-1582) announcing tentative approval of over $1 Billion in funding under the Rural Digital Opportunities Fund (RDOF), awarded to 69 successful bidders in the RDOF auction (Auction 904).  The Commission will authorize support for each of the listed bids, subject to submission of the required letter(s) of credit and Bankruptcy Code opinion letter(s).
 
  • On December 8, the WCB and Rural Broadband Auctions Task Force (RBATF) issued a Public Notice (DA 21-1512) announcing the modification of support and associated defined deployment obligations of AMG Technology Investment Group, LLC dba Nextlink Internet (Nextlink) and Plains Internet, LLC (Plains) (together, the Parties) and authorizes each Party to receive modified support amounts. This follows the August 25 approval of the transfer of domestic section 214 authorizations between the Parties in relation to the exchange of CAF Phase II auction support and obligations associated with certain census blocks in Texas.
 
  • On December 2, the WCB released an Order (DA 21-1502) which extends the limited waiver of the letter of credit rules for the CAF Phase II Auction and Rural Broadband Experiments funding recipients until December 31, 2022.


Schools and Libraries (E-Rate)/Emergency Connectivity Fund

  • On December 20, the FCC approved another round of Emergency Connectivity Fund Support, totaling nearly $603 million. 
 
  • On December 14, the FCC adopted a Notice of Proposed Rulemaking (FCC 21-124) proposing to create a bidding portal for the submission of all E-rate bids.  The Notice responds in part to recommendations from a GAO audit of the FCC’s E-rate program.  Comments will be due 60 days after publication of the Notice in the Federal Register.
 
  • On December 2, the WCB released an Order (DA 21-1499) which granted a petition for an expedited waiver of the Emergency Connectivity Fund (ECF) Program’s invoice filing deadline. The petition was submitted by the State E-rate Coordinators’ Alliance (SECA).


Rural Health Care (RHC)

  • On December 8, the WCB released an Order (DA 21-1530) granting a request to review a decision by USAC, which denied a funding request from Midwest Medical Center for funding year 2018 because it determined that the requested equipment was ineligible in the Healthcare Connect Fund (HCF) Program. The Order remanded the funding request at issue to USAC for further processing.