In this post, we’re going to take a look at developments in the FCC’s $9 billion-per-year Federal Universal Service Fund and more recent pandemic-related efforts to address deficiencies in broadband access that have been exposed by our year of remote work, school and social activities.

On the universal service front, the principal activity surprisingly has as much to do with non-Universal Service Fund (“USF”) programs as with the USF itself. The USF is a $9 billion-per-year fund with four primary programs aimed at different elements of the challenge to bring broadband telecommunications to all. For 25 years, the Fund has aimed to provide support to increase broadband availability in rural areas, in schools and libraries, among low-income consumers and to serve rural healthcare needs. These programs all have been modified significantly in the last ten years to re-focus on broadband services and de-emphasize (but not completely eliminate) support for voice services. The FCC also has focused on ensuring that these programs are run efficiently while protecting against waste, fraud and abuse by actors with mal intent. In 2020 and early 2021, we’ve discussed efforts to establish a new Connected Care pilot program, to waive rules during the pandemic and to implement a Rural Digital Opportunity Fund.

Separately, as the USF contribution factor continues to reach new and staggering heights, attention is again returning to the idea of USF contributions reform. With the contribution factor expected to top 33% in the next quarter, Acting Chairwoman Rosenworcel pledged to Senators Thune and Wicker to work with Congress “to explore how to improve [the contributions] system” in the coming months. We’ll have more on contributions reform in a future blog post.

Special Programs Dwarf the USF

But the big news of 2021 is turning out to be the additional funding that is being provided outside the traditional fund. In legislation since December, Congress has authorized four programs that affect USF beneficiaries, to the tune of over $13 billion.

• In the Consolidated Appropriations Act (“CAA”), Congress authorized a second Telehealth Fund to provide reimbursement for services and equipment used to provide telehealth services during the COVID pandemic. The Telehealth II fund provides $249.95 million in new funding for this program. The FCC already has designated USAC to administer the new fund and promises to adopt criteria for USAC to use in evaluating applications soon.
• Also in December, Congress authorized an Emergency Broadband Benefit of up to $50 per month for services and a one-time benefit of $100 for a qualifying computer, laptop or tablet for low-income consumers during the pandemic. (For tribal subscribers, the benefit is $75 per month). A total of $3.2 Billion is appropriated for this emergency fund. Importantly, the program is open to providers that do not currently participate in the USF programs, expanding access to the funding. The FCC recently adopted rules for the program and you can read our summary here. The program is expected to begin sometime in April.
• Congress recently approved an additional $7.1 Billion over several years for E-rate support for remote learning and remote library services. The legislation authorizes funding for the purchase of eligible equipment, advanced telecommunications services and/or information services used to support education of students at locations other than the school and to support delivery of library services at locations other than the library. This fund will reimburse 100% of the cost of the equipment or services, up to the amount the FCC determines is reasonable. Funding remains available until the June 30th that is one year after the COVID-19 public health emergency order is terminated. The FCC will have 60 days to establish rules for this program.
• Finally, although not related to the COVID emergency, Congress recently appropriated $1.9 Billion to fund the removal and replacement of telecommunications equipment that is deemed to present a national security threat. The FCC has been developing this so-called “Rip and Replace” program for over a year, contingent on the appropriation of funds, after determining in November 2019 to prohibit recipients of federal USF funding to purchase, install or maintain prohibited equipment. The FCC most recently adopted a Further Notice of Proposed Rulemaking to align its reimbursement priorities with the implementing legislation.

To stay up-to-date on these and other USF developments, join us on March 22, 2021 for our annual webinar discussing the state of the federal Universal Service Fund. This webinar, back for its 12th year, provides an in-depth look at all four USF programs and the USF contribution mechanism, highlighting major developments in the last year and trends for the upcoming year. In addition, this year we will discuss how the ongoing pandemic has influenced the importance of the USF and related policy decisions.

This webinar supplements the knowledge our clients gain from the monthly USF Tracker to provide context and analysis of the issues you need to know.

The 12th Annual Update will address the following, among other topics:

• The COVID-19 Telehealth Program
• The Connected Care Pilot and Rural Healthcare Program
• Lifeline and the Emergency Broadband Benefit Program
• E-Rate Outside the Classroom
• The Rural Digital Opportunity Fund and Broadband Mapping
• Rip and Replace
• Contributions Reform

The February meeting begins what is expected to be a busy 2021 for the FCC’s agenda. You will find more information about the meeting items after the break.

Emergency Broadband Benefit Program: On December 27, 2020, President Trump signed the Consolidated Appropriations Act ("CAA"), 2021, which included Section 904 authorizing the $3.2 billion Emergency Broadband Benefit (EBB) Program. The Program will reimburse up to $50 per month per eligible low-income household to discount broadband service and certain connected devices during an emergency period. To participate, providers must have offered broadband internet access service as of December 1, 2020 and must either be an Eligible Telecommunications Carrier or be approved by the FCC pursuant to an expedited approval process. Congress gave the FCC 60 days to promulgate regulations to implement the EBB program and the FCC released a Public Notice establishing a comment cycle on January 4, 2021. Comments were filed on or before January 25, 2021 and reply comments are due by February 16, 2021. The Commission is also holding a roundtable discussion on the EBB implementation on February 12, 2021.

COVID-19 Telehealth Program: The FCC will hear a presentation about the agency’s plans for the next stage of the COVID-19 Telehealth program. The agency already approved $200 million in funding under the program for health care providers in 2020, exhausting the initial funding appropriated by Congress to support connected care services to patients. But Congress recently provided an additional $249.95 million for the program and the FCC already has sought comment on the appropriate metrics for evaluating requests for this funding and potential program improvements and taken action to streamline the process for disbursing future funding.

Improving Broadband Mapping Data: The FCC will hear a presentation on the agency’s work to improve its broadband maps, including through the Digital Opportunity Data Collection (DODC) that will require service providers to submit granular data regarding their current and potential broadband service territories. Among other things, the FCC will use this information to determine the areas eligible for the second round of support under the Rural Digital Opportunity Fund, which will provide at least $4.4 billion over ten years to spur broadband deployment in unserved areas. The DODC enjoys bipartisan support at the FCC, but has received criticism for its complex reporting requirements, crowdsourcing and challenge processes, enforcement standards, and lack of exceptions for smaller providers.

Supply Chain Security: The draft Further Notice of Proposed Rulemaking (“FNPRM”) would align the FCC’s supply chain security rules with the recently-enacted CAA, which allocated $1.9 billion to reimburse providers for the costs of removing, replacing, and disposing of network equipment and services posing a national security risk. In particular, the FCC plans to: (1) raise the cap on reimbursement eligibility to encompass providers with 10 million or fewer customers; (2) seek comment on allowing providers to use reimbursement funds to cover the removal, replacement, and disposal of all network equipment and services provided by Chinese telecommunications companies Huawei and ZTE that were deemed a national security threat last year; (3) request input on allowing providers to use reimbursement funds to cover the removal, replacement, and disposal of unsecure network equipment and services obtained on or before June 30, 2020; (4) prioritize reimbursement funding to smaller providers with two million or fewer customers and non-commercial educational broadband service (“EBS”) providers as well as “core” network transition costs; and (5) expand the definition of advance communications service providers eligible for reimbursement to explicitly include EBS providers, libraries, and health care providers, in line with the CAA.

911 Fee Diversion: The draft Notice of Proposed Rulemaking (“NPRM”) would implement section 902 of the Don’t Break Up the T-Band Act of 2020, which requires the FCC to take action to address the diversion of 911 fees by states and other jurisdictions for purposes unrelated to 911 operations. Section 902 specifically directs the FCC to issue final rules within 180 days of defining what uses of 911 fees by states and taxing jurisdictions constitute 911 fee diversion. The NPRM seeks comment on proposed rules to implement these provisions. Notably, fee diversion was a key focus area for former FCC Commissioner O’Rielly and remains a controversial issue within the agency.

When the FCC proposed the 5G Fund last May, the biggest sticking point concerned when the Commission would aim to start the auction, which hinged on a decision about what data the FCC would use to identify the areas eligible for support. In the 5G Fund NPRM, the Commission set forth two options. Under the first option, the FCC would initiate Phase I of the auction in 2021 using 10-year old data – primarily census information – to determine rural areas eligible for funding by population (i.e., less than 2,500 people), and then prioritize support to those areas “unlikely” to see 5G deployment absent such investment. Under the second option, the FCC would postpone Phase I until at least 2023 so that it could develop the Digital Opportunity Data Collection (DODC) to collect more granular deployment data. Option 1 had the potential to be both over and under inclusive of eligible areas while option 2 would significantly delay the auction start date. During the proceeding, some commenters urged the Commission to use new Form 477 self-reported data from carriers, as it had tried to do for Mobility Fund Phase II. Ultimately, the Commission selected option 2, prioritizing accuracy and efficient use of funds over speed and declining to use new Form 477 data because the Commission was not convinced it could ensure the data was reliable in a shorter timeframe than using the DODC information.

The Report and Order also places a few other conditions on the selection of eligible areas. First, an area will only be eligible for Phase I of the auction if the DODC shows that there is not already at least one service provider offering unsubsidized 4G LTE or 5G broadband service. Given existing market competition, the Commission thinks that providing support to areas with unsubsidized 4G LTE service could preempt near-term 5G deployments that would already be expected in those areas. Second, the 5G Fund will exclude areas covered by the T-Mobile/Sprint merger. Since new T-Mobile committed to serve 90% of rural Americans within six years as part of the merger agreement, the Commission said providing support to those same areas would be a waste of the limited funds. As a related limitation, while T-Mobile can participate in the auction, it cannot use any 5G Fund awards to support 5G buildouts in areas where it has already committed to deploy under the merger agreement.

Other key elements of the Report and Order include:

Auction Procedures – The FCC will award the funds using a two-phase reverse auction, where the provider offering to serve an area for the least amount of funding is the winner. Phase I would provide up to $8 billion in support, with $680 million reserved for deployments on Tribal lands. Phase II would provide up to $1 billion, plus any funding remaining after Phase I, for deployments for precision agriculture and particularly hard-to-serve areas like farms and ranches. Geographic bidding areas will range from census block groups to census tracts, with the exact grouping of eligible areas to be determined during the pre-auction process. The FCC also adopted an “adjustment factor” that will assign weights and increase support for geographic areas with difficult terrain and other characteristics that make them more costly or less profitable to serve. The exact application of the adjustment factor will also be decided during the pre-auction process.

Performance Requirements – 5G Fund recipients will be required to deploy networks that meet 5G-NR (New Radio) technology standards and provide median speeds of at least 35/3 Mbps. Minimum cell edge speeds must be at least 7/1 Mbps. Round-trip latency on supported services cannot exceed 100 milliseconds. In addition, support recipients would be required to offer at least one service plan with a monthly data allowance equaling the average U.S. subscriber’s data usage. As with prior high-cost programs, support recipients will be required to offer their services at rates “reasonably comparable” to those offered in urban areas and be subject to collocation and roaming obligations.

Deployment Milestones – The FCC adopting escalating deployment milestones for 5G Fund support recipients. Specifically, support recipients will need to offer service meeting the performance requirements to 40% of their service area by the end of the third full calendar year of funding, 60% by year four, 80% by year five, and a final milestone of 85% by year six. To avoid a repeat of the Mobility Fund Phase II coverage data issues, the FCC has imposed strict reporting requirements on 5G Fund support recipients that include on-the-ground testing for each milestone.

ETC Designation and Application Requirements – Like the RDOF, service providers will be able to participate in the 5G Fund auction without first being designated as an eligible telecommunications carrier (ETC), but winning bidders will need to secure such designations in their supported service areas with 180 days to receive funding. The 5G Fund application process also mirrors the RDOF procedures, with service providers initially required to submit a short-form application that includes basic business, financial, and technical information followed by a long-form application for winning bidders with detailed network information and deployment timeframes. Winning bidders also will have to meet letter of credit requirements that are eased as providers hit deployment milestones.

Transitioning Legacy Support – All competitive ETCs receiving legacy high-cost support for 4G LTE mobile wireless service will be required to use an increasing percentage of their support toward the deployment, maintenance, and operation of 5G networks that meet 5G-NR standards. The change will be phased in, with one-third of the support required for 5G in 2021 and two-thirds in 2022. These competitive ETCs will also be required to meet the same speed, latency, data allowance, and “reasonably comparable” rate requirements as 5G Fund recipients.

• The background of the RDOF and how it relates to Connect America Fund Phase II;
• How the RDOF works (budget, eligible areas, support awarded, deployment);
• The two-stage RDOF application process;
• Unresolved issues and potential pitfalls in RDOF; and
• Considerations and recommendations for RDOF participants.

This event builds on our annual Universal Service Fund webinar and ongoing coverage of the FCC’s efforts to close the “digital divide” between rural and urban areas.

If you have any urgent questions, please contact your usual Kelley Drye attorney or any member of the Communications Practice Group. For more information on other aspects of the federal and state response to the COVID-19 pandemic, as well as labor and employment and other issues, please visit Kelley Drye’s COVID-19 Response Resource Center.

FCC Approves Twelfth Set of COVID-19 Telehealth Program Applications, Closes Filing Window

On June 25, 2020, the FCC’s Wireline Competition Bureau (“WCB”) announced via Public Notice (DA 20-667) that it will no longer accept new applications for funding from the COVID-19 Telehealth Program, noting that demand for funding exceeds available Program funds based on applications received. This announcement comes after the June 24 approval of 77 additional applications and $29.41 million in funding. To date, the FCC has approved 444 funding applications in 46 states plus Washington, D.C. for a total of $157.64 million in funding. Congress appropriated $200 million for the Program in the CARES Act.

The FCC also released a report on the CARES Act spending plan in accordance with section 15011(b)(1)(B) of the legislation, which requires the agency to submit a plan describing how it will use the covered funds.

FCC Further Extends Temporary Waivers of Relay Services Rules

On June 22, 2020, the FCC’s Consumer and Governmental Affairs Bureau extended temporary waivers (DA 20-650) through August 31, 2020 for Telecommunications Relay Service (“TRS”) providers to ensure relay services remain available for individuals who are deaf, hard of hearing, deafblind, or have a speech disability. These waivers extend actions previously taken to grant TRS providers flexibility.

FCC Further Extends Inteliquent Access Stimulation Waiver

On June 23, 2020, the WCB granted (DA 20-655) Inteliquent’s request for renewal of its temporary waiver of certain access stimulation rules until September 1, 2020. Inteliquent requested a limited renewal of the temporary waiver, with respect to traffic it terminates in six urban areas to preexisting customers on the basis that its terminating-to-originating traffic ratios in those areas continue to be particularly unbalanced as a result of the “unprecedented amounts of conference platform traffic that Inteliquent is terminating for pre-existing customers Zoom and Cisco Webex to facilitate remote work and other forms of social distancing.”

The WCB originally granted Onvoy d/b/a Inteliquent a temporary and limited waiver of the FCC’s rules that treat competitive local exchange carriers with an interstate terminating-to-originating traffic ratio of at least 6:1 as engaging in access stimulation.

FCC Resolves CAF Phase II, Rural Broadband Petitions

On June 26, 2020, the WCB, Rural Broadband Auctions Task Force, and Office of Economics and Analytics, resolved petitions (DA 20-677) filed by the Connect America Fund (“CAF”) Phase II Coalition and Skybeam, LLC (“Skybeam”) seeking waiver of the letter of credit rules for the CAF Phase II auction (“Auction 903”) and Rural Broadband Experiments. Petitioners requested that the FCC allow them to comply with the recently adopted letter of credit rules for the Rural Digital Opportunity Fund instead. The FCC found good cause to grant a limited waiver to all Auction 903 and Rural Broadband Experiments funding recipients until December 31, 2021, because of the increased consumer demand for robust broadband services and severe financial hardship on the companies imposed by the COVID-19 pandemic.

FCC Announces Section 106 Emergency Authorizations

On June 25, 2020, the FCC’s Wireless Telecommunications Bureau issued a Public Notice (DA 20-668) announcing an electronic process for FCC licensees to apply for expedited Section 106 review or for emergency authorization to resume standard review for qualifying critical infrastructure projects. Section 106 of the National Historic Preservation Act requires the FCC to account for the effect of any proposed “undertakings” on historic properties, including construction or collocation of wireless communications facilities.

Covering the gamut of network funding, spectrum resources, and construction, the June meeting items will impact nearly all providers of 5G and other next-generation technologies and deserve close attention. You will find more information on the significant June meeting items after the break:

RDOF Phase I Auction Procedures: The FCC’s draft Public Notice would establish RDOF Phase I auction procedures that largely mirror the agency’s initial proposals for the program. In particular, the FCC would require auction participants to bid by census block group and establish an auction weighting mechanism that favors higher-speed, lower-latency services when awarding support. Auction winners would be required to offer service at the bid-upon performance level to 40% of the supported locations by the end of the third full calendar year following funding authorization and to an additional 20% of locations each year thereafter. As expected, service providers would be required to file a short-form application including basic ownership, technical, and financial information to participate in the auction, followed by a long-form application from auction winners providing detailed network descriptions and deployment plans. Auction winners would be obligated to obtain a letter of credit that would increase in value until the service providers begin to satisfy their deployment milestones. Service providers would not be required to receive designation as an eligible telecommunications carrier by the FCC or state authority to participate in the RDOF Phase I auction, but they would need to receive such designation before receiving any funding under the program.

Expanding High-Band Frequency Access: The FCC’s Notice of Proposed Rulemaking and Order would seek comment on proposed changes to the rules governing the use of the 70/80/90 GHz Bands to support wireless 5G backhaul and broadband services onboard aircrafts and ships. First, the FCC would propose changes to antenna standards for the 70 and 80 GHz Bands to permit the use of smaller antennas and ask whether it should make similar changes to the standards for the 90 GHz Band. Second, the FCC would seek input on authorizing point-to-point links to endpoints in motion in the 70 and 80 GHz Bands and classifying those links as “mobile” services to support new offerings. Third, the FCC would request comment on whether it should change its link registration process for the 70/80/90 GHz Bands to eliminate never-constructed links from third-party registration databases, thereby opening the spectrum for new registrations. Finally, the FCC would propose power limits and other technical and operational rules to prevent harmful interference to incumbent operations in the 70/80/90 GHz Bands. As the 70/80/90 GHz Bands are currently allocated to co-primary Federal and non-Federal use, the FCC would coordinate any rule changes with affected federal agency incumbents through the National Telecommunications and Information Administration.

Clarifying State/Local Wireless Review: The FCC’s Declaratory Ruling and Notice of Proposed Rulemaking would clarify agency rules implementing Section 6409(a) of the Spectrum Act of 2012, which streamlines state and local reviews of requests to modify existing wireless infrastructure. Section 6409(a) and associated FCC rules require state and local governments to approve modification requests for existing wireless towers and base stations within 60 days as long as the modification does not “substantially change” the physical dimensions of the tower or base station. However, confusion exists among service providers and government authorities on when this 60-day shot clock begins. The FCC would clarify that the 60-day shot clock begins to run when a requester takes the first procedural step in a locality’s application process and submits written documentation showing that a proposed modification is eligible for streamlined treatment under Section 6409(a). The FCC would find that this approach would prevent localities from effectively postponing wireless network modifications through multiple interim procedural hurdles. The FCC also would clarify what types of infrastructure modifications represent a “substantial change” that would not qualify for streamlined treatment under Section 6409(a).

The main sticking point among the Commissioners is over when Phase I should begin, and on what basis. The NPRM seeks comment on two options. Under the first option, the FCC would initiate Phase I in 2021 and use existing data sources – primarily census information – to determine rural areas eligible for funding by population (i.e., less than 2,500 people), and then prioritize support to those areas “unlikely” to see 5G deployment on their own. The FCC seeks comment on whether alternative data sources exist and whether a population density threshold may be more appropriate. The FCC plans to prioritize support to areas historically lacking 4G LTE (or even 3G) service. However, recognizing the deficiencies in existing wireless coverage data, the FCC asks for input on relevant information sources to make this historical determination. Under the second option, the FCC would postpone Phase I until at least 2023 in order to use more granular deployment data developed through its upcoming Digital Opportunity Data Collection. The NPRM asserts that the delay stems from a lack of appropriations under the recent Broadband DATA Act, which requires the FCC to significantly improve its broadband coverage maps. Without such appropriations, the FCC contends that it would need time to reallocate existing resources to broadband mapping that it would eventually use to determine rural areas lacking 5G service eligible for funding. Both options have their detractors, with critics of the first option noting that available census data already are almost ten years old as well as the importance of ensuring funding goes to areas actually lacking 5G service, and with detractors of the second option warning that funding delays would only widen the urban/rural digital divide. At the April Open Meeting, the two Democratic Commissioners dissented in part, suggesting that the NPRM presents a false choice between speed and accuracy.

Other key elements of the FCC’s 5G Fund proposal include:

• Auction Procedures: As with the RDOF, the FCC plans to award 5G Fund support through a “reverse” auction, where the provider offering to serve an area for the least amount of funding is the winner. Auction participants would bid by census tract (or a potentially larger area) and the FCC’s proposes applying an “adjustment” factor to increase the funding available for tracts with difficult terrain and other characteristics increasing service costs. The FCC plans to issue proposed adjustment factor criteria and seek comment on such criteria at a later date.
• Performance Requirements: The FCC proposes requiring 5G Fund support recipients to provide speeds of at least 35/3 Mbps, with potential increases over time to reflect service advancements. Support recipients would be required to provide a minimum cell-edge download speed of 7/1 Mbps, with a 90% coverage probability and 50% cell loading factor. The FCC also would cap supported service latency at 100 milliseconds per round trip. In addition, support recipients would be required to offer at least one service plan with a data allowance equaling the average U.S. subscriber’s data usage. As with prior high-cost programs, support recipients would be required to offer their services at rates “reasonably comparable” to those offered in urban areas and be subject to collocation and roaming obligations.
• Deployment Milestones: The FCC anticipates adopting escalating deployment milestones for 5G Fund support recipients. Specifically, support recipients would be required to offer service meeting the performance requirements to 40% of their service area by the end of the third full calendar year of funding, with the deployment requirement increasing to 60% by year four, 80% by year five, and 85% by year six as the final milestone. To avoid a repeat of the Mobility Fund Phase II coverage data issues, the FCC plans to impose strict reporting requirements on 5G Fund support recipients that include significant on-the-ground testing and standardized propagation modeling.
• Transitioning Legacy Support: The FCC seeks comment on how best to transition existing high-cost support to 5G Fund auction winners. In particular, the FCC proposes phasing down all legacy high-cost support over no more than five years, with legacy support recipients required to meet the same performance requirements as 5G Fund auction winners on an accelerated schedule to receive transition funding.
• ETC Designation and Application Requirements: Like the RDOF, the FCC plans to permit service providers to participate in the 5G Fund auction without first being designated as an eligible telecommunications carrier ("ETC"). However, winning bidders would be required to obtain an ETC designation in their supported service areas before receiving any funding. The 5G Fund application process also would mirror RDOF procedures, with service providers initially submitting a short-form application including basic information on their identity, ownership, and financial/technical qualifications followed by a long-form application for winning bidders providing detailed network information and deployment timeframes. Winning bidders also would be required to meet letter of credit requirements, which could be eased as the providers hit deployment milestones.

Running the gamut from rural networks to outer space, the FCC’s April agenda will impact service providers across the industry. Consequently, stakeholders should closely examine the deployment and funding opportunities presented in the FCC’s proposals. You will find more information on the key April meeting items after the break:

Unlicensed Use of 6 GHz Band: The draft Report and Order and Further Notice of Proposed Rulemaking would authorize two types of unlicensed operations in the 6 GHz band. First, the FCC would permit unlicensed operations in the 5.925-6.425 GHz and 6.525-6.875 GHz sub-bands at standard power levels used in nearby bands (i.e., 23 dBm/MHz), provided such operations use an automated frequency control (AFC) system. The AFC would determine the frequencies available for use without causing harmful interference to incumbent operators and make only those frequencies available for unlicensed operations. Second, the FCC would permit unlicensed operations across the entire 1,200 megahertz of the 6 GHz band at a lower power (i.e., 5 dBm/MHz) without an AFC system, but restrict such operations to indoor uses. The FCC would seek comment on allowing a higher power level (i.e., up to 8 dBm/MHz) for indoor unlicensed operations. The agency also plans to ask whether it should permit very low power unlicensed operations without an AFC system both indoors and outdoors and, if so, what that power level should be.

5G Fund: The draft Notice of Proposed Rulemaking and Order would seek comment on establishing a 5G Fund to provide up to $9 billon to support the deployment of 5G mobile broadband and voice networks in rural and other hard-to-serve areas over ten years. The 5G Fund would support deployments in areas left uncovered by the recently-approved T-Mobile/Sprint merger, which included a commitment to serve 90% of rural Americans within six years. Under the FCC’s proposal, funding would be awarded through competitive bidding in two phases. Phase I would provide up to $8 billion in support, including $680 million in funding reserved for deployments on Tribal lands. The FCC would request input on two options for the Phase I timeframe. Under the first option, the FCC would initiate Phase I in 2021 using existing wireless deployment data to determine eligible areas and prioritize support for areas historically lacking 4G LTE (or even 3G) service. Under the second option, the FCC would hold off on Phase I until at least 2023 in order to use more granular deployment data developed through its upcoming Digital Opportunity Data Collection. Phase II would take place after the completion of Phase I, targeting especially hard-to-serve areas and reserving at least $1 billion to support networks used for precision agriculture. In addition, the FCC would seek comment on 5G Fund auction procedures as well as the appropriate eligibility, application, and performance requirements for auction participants.

Orbital Debris Mitigation: The draft Report and Order and Further Notice of Proposed Rulemaking would mark the FCC’s first major update to its orbital debris mitigation requirements in over 15 years and incorporate a number of recommendations developed by the agency with NASA, the Defense Department, and other federal agencies. The FCC would require all satellites to be able to perform collision avoidance maneuvers any time they are in orbit above the International Space Station (approximately 400 kilometers altitude). The FCC also would update its disclosure requirements to include new information related to satellite collision risk, protecting inhabitable spacecraft, maneuverability, and how operators plan to share information related to space situational awareness. In addition, the FCC would codify requirements for geostationary-orbit satellite license extensions and limit such extensions to five years. The FCC further plans to ask whether it should impose a bond requirement for geostationary and non-geostationary space stations contingent on successful post-mission station disposal.

The 11th Annual Update will address the following, among other topics:

• The Rural Digital Opportunity Fund ("RDOF");
• Significant modifications to the Rural Healthcare and Lifeline programs;
• The proposal by the state members of the Joint Board to modify the contributions mechanism; and
• The FCC’s proposed new suspension and debarment rules.

CLE credit is available for this webinar.

The CAF provides support to broadband service providers to deploy networks in rural and other high-cost service areas. In addition to meeting their deployment obligations, CAF recipients must show that they provide broadband services meeting certain performance requirements that vary by CAF program. Last year, the FCC established uniform testing procedures for CAF recipients to demonstrate that they meet the relevant performance requirements. The testing requires CAF recipients to measure the speed and latency of their broadband services to see if they meet the applicable program benchmarks. Service providers unable to meet their performance requirements lose funding on a sliding scale based on how far they miss the benchmarks. The FCC initially established a July 1, 2020 deadline for CAF recipients to report their broadband performance testing results. However, many service providers raised concerns regarding both the timing and procedures for testing. In particular, these stakeholders noted that the July 1, 2020 reporting deadline would come before many CAF recipients are required to deploy most of their networks. These service providers also took issue with the current cost and availability of testing equipment and requested more time to become familiar with the CAF broadband performance testing process.

The Order attempts to address CAF recipients’ concerns in two ways. First, the FCC will delay the start of testing reporting for many CAF recipients to better align with the deployment deadlines for the different CAF programs. For example, the FCC is in the process of authorizing funding for winning bidders at the CAF Phase II auction that closed last year. These newly-authorized service providers would have at least until 2022 to deploy 40% of their broadband networks. As a result, the FCC will delay the start of testing reporting for CAF Phase II auction winners until January 1, 2023, to ensure a sufficient sample size. Second, the FCC will create mandatory pre-testing periods for CAF recipients to see how their networks and testing equipment perform without risk of losing support for missing the applicable speed and latency program benchmarks. The pre-testing period also will provide time for the cost of testing equipment to decrease and the availability of such equipment to increase. Note that the FCC will not delay the July 1, 2020 broadband performance testing start date for recipients of CAF Phase II model-based support. CAF Phase II model-based support recipients generally are large price-cap carriers that must deploy 80% of their networks by the end of 2020 and that have prior broadband testing experience. A summary of the new pre-testing and testing start dates for the major CAF programs is below:

CAF Program	Pre-Testing Start Date	Testing Start Date
CAF Phase II (model-based)	January 1, 2020	July 1, 2020
Rural Broadband Experiments	January 1, 2021	January 1, 2022
Alternative Cost-Model I	January 1, 2021	January 1, 2022
Alternative Cost-Model II	January 1, 2022	January 1, 2023
CAF Phase II (auction)	January 1, 2022	January 1, 2023

The Order also provides more flexibility in CAF broadband performance testing by, among other things, expanding the number and types of locations that can be used as testing endpoints, clarifying that the same location can be used for both speed and latency testing, and making the speed and latency testing timeframes less rigid. These changes should help lower the compliance burdens on smaller providers.

The August agenda items impact all corners of the telecommunications industry. You will find more details on some of the most significant August meeting items after the break:

RDOF Funding and Procedures: The draft Notice of Proposed Rulemaking (“NPRM”) seeks comment on the budget, auction procedures, application processes, and deployment obligations for the RDOF. The FCC plans to target $20.4 billion in support to areas that lack access to 25/3 Mbps broadband service, which represents the agency’s current benchmark for fixed advanced communications services and an increase over the 10/1 Mbps minimum performance tier under the CAF. The FCC would award RDOF support through an auction in two phases, with the first phase targeting wholly-unserved census blocks and the second phase focusing on partially-unserved census blocks. Like the CAF auction, the FCC anticipates weighing RDOF auction bids based on performance, with higher-speed, lower-latency services preferred. RDOF bidders would be subject to similar application procedures, deployment milestones, and reporting obligations as CAF auction participants.

RDOF Data Collection: The draft Report and Order and Further NPRM would require all fixed broadband providers to submit coverage polygons depicting the areas where they provide service as well as information on the speed and technology used in providing such service. Service provider coverage claims would be subject to challenge by government entities and the public, with the FCC seeking comment in the further NPRM on how it should gather and apply this “crowdsourced” information. For now, the RDOF data collection would be in addition to the deployment data already collected by the FCC from service providers through the Form 477. The new data collection would only apply to fixed broadband providers at first, but the FCC would seek comment on the parameters for incorporating mobile broadband coverage data into the RDOF in the future. In addition, the FCC would seek input on whether to require even more precise deployment data based on user location and who should bear the burden of such data collection.

Rural Health Care Program (“RHCP”) Reform: The draft Report and Order would adopt reforms to the FCC’s RHCP, which provides financial support to rural health care providers to obtain broadband and other communications offerings at discounted rates to facilitate telehealth services. The FCC plans to revamp the RHCP’s Telecom Program that subsidizes the difference between urban and rural service rates by, among other things, requiring the RHCP Administrator to create a database of rates that health care providers would use to determine the amount of support they can receive. The FCC would prioritize RHCP funding in the event support requests exceed the cap (which was $581 million in 2018) based on the rurality of the area and whether the area faces a shortage of medical personnel. The FCC would caution that it intends to enforce limits on RHCP spending consistent with its current review of overall universal service budgets. In addition, the FCC anticipates tightening up its RHCP competitive bidding and consultant rules following a number of high-profile enforcement actions.

Streamlining Smallsat Licensing: The draft Report and Order would revise the FCC’s current one-size-fits-all satellite licensing regime and create a tailor-made path for licensing smallsats. Smallsat applicants would be subject to lower application fees, easier application processes, and quicker agency reviews, including an exemption from the agency’s processing round procedure that often delays approvals as competing satellite systems file challenges. To qualify for streamlined processing, smallsat applications must meet certain requirements, including: (1) a maximum mass of 180 kg for any single satellite; (2) no more than 10 satellites under a single authorization; (3) total on-orbit satellite lifetime of five years or less; (4) propulsion capabilities or deployment below 400 km altitude; (5) ability to share frequencies with current operations without precluding future entrants; and (6) relatively low risk from orbital debris.

Toll-Free Number Auction: The draft Public Notice would establish procedures for the auction of over 17,000 toll-free numbers in the “833” code, with applications due by October 18, 2019 and bidding set to begin on December 17, 2019. The auction would be the first time the FCC has used competitive bidding to distribute numbering resources. The auction would be run by Somos, which currently is the designated administrator of the toll free database. Parties may apply to participate in the auction individually or through a Responsible Organization, which can bid on behalf of multiple parties as long as the parties do not want the same numbers. Parties would be subject to application, anti-collusion, and default provisions similar to those used in the FCC’s recent spectrum auctions. Winning bidders would be allowed to sell the toll-free numbers obtained through the auction on the secondary market and would report such secondary market transactions to Somos.

MLTS 911 Requirements: The draft Report and Order would implement recent legislation by prohibiting the manufacture, import, sale, or lease of an MLTS unless it is pre-configured so that a user may initiate an emergency call by dialing 911 without first having to dial “9” or take other action to access an outside line. Similarly, anyone installing, managing, or operating an MLTS would not be allowed to do so unless the MLTS is pre-configured to allow 911 direct dialing. If possible, MLTS managers also must configure the MLTS to provide a notification when a 911 call is made to a central location (e.g., front desk, security office) in order to facilitate emergency response efforts. The FCC plans to adopt an assumption that an MLTS manager is responsible for any failure to comply with the 911 direct dialing or notification rules. The new rules would apply to any MLTS manufactured, imported, sold, leased, or installed after February 16, 2020. In addition, the FCC would impose “dispatchable location” requirements on MLTS and other 911-capable services, which would require the transmission of a caller’s street address and additional information such as room number, floor number, or other data to help identify the caller’s location.

Anti-Spoofing Expansion: The draft Report and Order would expand the reach of FCC enforcement against the manipulation of caller ID information for malicious purposes (otherwise known as “spoofing”) under new authority granted by legislation adopted last year. Specifically, the FCC would extend its authority to punish spoofing violations for communications originating from foreign points to recipients within the United States. The FCC also would expand the scope of communications covered by its anti-spoofing rules to include some of the most widely-used forms of text messaging as well as alternative voice services, such as one-way VoIP services. The draft item follows in the wake of numerous enforcement actions imposing large fines for malicious spoofing in 2018.

Cable Franchise Fee Restrictions: The draft Report and Order would address concerns raised by a federal appeals court regarding the fees imposed by local franchising authorities (“LFAs”) on cable operators. The Communications Act places a five percent cap on such fees, but cable operators allege that LFAs frequently seek additional benefits as part of the franchise process. The draft item would treat most in-kind contributions required by LFAs from cable operators as fees subject to the five percent cap. Moreover, the FCC would prohibit LFAs from using their franchising authority to regulate most non-cable services, including broadband services offered over cable systems. LFAs also would be prohibited from requiring cable operators to secure additional franchises or other authorizations to provide non-cable services through their cable systems.