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Commentary

2021 is well underway and the new leadership at the FCC is
taking shape.  While we don’t yet know who will fill the
Chair on a permanent basis, the FCC under Acting Chairwoman
Rosenworcel is proceeding without delay.  On the Universal
Service front, the principal activity surprisingly has as much to
do with non-USF programs  as with the USF
itself.  Yes, the $9 billion per year fund with its four
primary programs continues to serve broadband needs in the
country.  And it is true that the FCC has extended many
COVID-19 waivers and is considering additional waivers such as a
proposal to allow E-rate funds to be used for off-campus
purposes.  But the big news of 2021 is turning out to be
the additional funding that is being provided
outside the traditional fund.  The Telehealth II fund and the
Emergency Broadband Benefit program were added in the Consolidated
Appropriations Act (CAA) approved in December, bringing $249.95
million and $3.2 billion, respectively, to pandemic-related funding
programs.  In addition, Congress is considering an additional
$7.6 billion over several years for E-rate support that may be
included in the next COVID stimulus package.  All told, this
funding (assuming current proposals are approved) would more than
double the broadband support offered under the USF, adding over $11
billion in targeted, if temporary, funding.  This will impose
new burdens on the FCC and on USAC to administer dual programs,
with different ules, simultaneously.  For beneficiaries of the
programs and for consumers on the wrong side of the digital divide,
this money could represent a key lifeline in continued uncertain
times.  Pulling it all together is the
challenge.  

Recent News

General

  • On February 17 2021, the FCC adopted a Third Further Notice of Proposed
    Rulemaking
     (FCC 21-26) in its Supply Chain
    proceeding.  The primary function of this rulemaking is to
    conform the FCC’s Rip and Replace Rules to the Consolidated
    Appropriations Act (CAA) passed at the end of 2020.  The CAA
    formally appropriated $1.895 Billion for the replacement program
    and increased eligibility to carriers with fewer than 10 million
    lines (vs. 2 million lines previously), among other things.
  • On January 12, former Chairman Pai urged Congress to channel
    $50 billion in revenue from the ongoing C-band auction to
    temporarily fund the USF and stabilize contributions.
  • On January 4, the FCC’s Wireline Competition Bureau (WCB)
    issued a Public Notice seeking comment on the provision of
    assistance from the Emergency Broadband Connectivity Fund and
    through the Emergency Benefit Program and other related matters,
    consistent with the Consolidated Appropriations Act which was
    signed in December 2020. Comments were due January 25,
    2021 
    and reply comments were
    due February 16, 2021.  The Commission
    held a roundtable on the program on February 12,
    2021 and received a presentation on its status at the February 17,
    2021 FCC Open Meeting.  The Commission is finalizing rules for
    the program. 
  • On December 30, the FCC released an Order (FCC 20-185) appointing three new
    members to the Federal-State Joint Board on Universal Service.
  • On December 22, the FCC’s Wireline Competition Bureau (WCB)
    released an Order (DA 20-1523) denying a request for
    review filed by Sprint Spectrum, L.P. (Sprint), which sought review
    of a contributor audit decision by the Universal Service
    Administrative Company (USAC).  The WCB remanded to USAC for
    further reconsideration the issue of whether, in light of new
    evidence presented, Sprint’s allocation among assessable and
    non-assessable service categories was appropriate for the bundled
    service offering at issue.
  • On December 16, the WCB and the Office of Economics and
    Analytics (OEA) released via Public Notice (DA 20-1491) a correction to
    results from the Supply Chain Security Information
    Collection.  The correction deletes the names of two
    companies from the list of ETCs with covered equipment installed in
    their networks. 
  • On December 11, the FCC adopted an Order  (FCC 20-176) in its Supply Chain
    proceeding that requires Eligible Telecommunications Carriers
    (ETCs) receiving federal universal service funding to remove and
    replace equipment and services identified as a risk to national
    security from their networks.  The Order also establishes a
    reimbursement program to subsidize smaller carriers to remove and
    replace covered equipment, specifically those providers with two
    million or fewer customers, once Congress appropriates the
    estimated $1.6 billion needed to reimburse eligible providers for
    such costs.  Finally, the Order also establishes the
    procedures and criteria for publishing a list of covered
    communications equipment or services, and would adopt a reporting
    requirement for all providers of advanced communications services
    to annually report on covered equipment and services in their
    networks.  Note:  at the February 17, 2021 FCC Open
    Meeting, the FCC adopted a Third Further Notice of Proposed
    Rulemaking to revise its rules to conform to changes made by
    Congress in the Consolidated Appropriations Act (CAA).

Lifeline

  • On February 24, the WCB released an Order (DA 21-229) extending prior waivers
    of Lifeline program rules governing documentation requirements for
    subscribers residing in rural areas on Tribal lands,
    recertification, reverification, general de-enrollment, and income
    documentation through June 30, 2021.  The FCC previously waived these rules in six
    previous Orders to provide necessary relief for low-income
    households during the COVID-19 pandemic.
  • On December 23, the WCB released an Order (DA 20-1529) initiating data
    collection for the Lifeline program.  The Order directs a
    group of mobile service providers to respond to a questionnaire
    about customer usage and cost. A copy of the Order was sent to each
    provider obligated to respond.

High Cost/Connect America Fund (CAF)

  • On February 18, the Rural Broadband Auctions Task Force, WCB,
    and OEA issued a Public Notice (DA 21-170) identifying 417
    applicants in the Rural Digital Opportunity Fund  Phase I
    auction that submitted the long-form application portion of the FCC
    Form 683.
  • On January 14, the WCB issued a Public Notice (DA 21-54) authorizing CAF
    Phase II support for a New York winning bidder.
  • On January 13, the Rural Broadband Auctions Task Force, WCB,
    and OEA announced via Public Notice  (DA 21-44) the 
    availability of educational materials related to the detailed
    technology and system design descriptions that must be filed by
    Auction 904 long-form applicants.  The Public Notice also
    announced that long-form applicants must upload their letter of
    credit commitment letters and detailed technology and system design
    descriptions to their FCC Form 683, and submit and certify their
    applications by 6 p.m. ET on Tuesday, February 16, 2021.
  • On December 21, the WCB released an Order (DA 20-1512) waiving certain
    performance testing requirements for recipients of Alternative
    Connect America Cost Model I (A-CAM I) support, Rural Broadband
    Experiment support, and Alaska Plan support.
  • On December 18, the FCC’s WCB, Wireless Telecommunications
    Bureau, and the Office of Engineering and Technology released
    an Order (DA 20-1510) clarifying aspects of
    the FCC’s Performance Measures Reconsideration Order to provide
    greater certainty to carriers.
  • On December 18, the WCB announced via Public Notice (DA 20-1508) that it is
    ready to authorize Connect America Fund (CAF) Phase II support for
    Slic Network Solutions (Slic) pursuant to the Slic in conjunction
    with the New York Broadband Program.  The deadline for Slic to
    submit letters of credit and legal counsel’s opinion letters
    was Friday, January 8, 2021.
  • On December 16, the WCB released an Order (DA 20-1488) granting a waiver of
    sections 54.901 and 54.903 of the FCC’s rules to allow
    rate-of-return carriers to include their actual rates for consumer
    broadband-only lines for the first three months of 2019 on their
    FCC Form 509, rather than imputing revenues based on the maximum
    rate that would have been assessable.  The WCB has twice
    previously granted a waiver of this rule.
  • On December 7, the Rural Broadband Auctions Task Force, WCB,
    and OEA announced via Public Notice  (DA 20-1422) the winning
    bidders in the Rural Digital Opportunity Fund Phase I auction
    (Auction 904) which concluded on November 25, 2020.  There
    were 180 winning bidders in the auction, with the 10-year support
    amount totaling $9.23 billion and covering 5,220,833 locations in
    49 states and one territory.  Winning bidders were required to
    submit a post-auction application for support (FCC Form 683) no
    later than January 29, 2021.  Winning bidders that wish to
    assign some or all of their winning bids to related entities had to
    do so by December 22, 2020.

Schools and Libraries (E-Rate)

  • On February 1, the WCB issued a Public Notice (DA 21-98) seeking
    comment on petitions for emergency relief to allow the use of
    E-Rate funds to support remote learning during the COVID-19
    pandemic.  Comments were due February 16 and reply comments
    were due February 23.
  • On December 14, the WCB extended waivers (DA 20-1479) of  the
    Rural Health Care (RHC) and E-Rate program gift rules through June
    30, 2021.  The FCC previously waived gift rules applicable
    to both programs to assist rural health care providers and schools
    and libraries affected by the pandemic by allowing them to accept
    free upgrades to connections, equipment, and other services. 
    These waivers were set to expire on December 31, 2020.
  • On December 3, the WCB released an Order (DA 20-1432) approving the National
    Exchange Carrier Association, Inc.’s (NECA) annual average
    schedule company high-cost loop support (HCLS) formula
    modifications.

Rural Health Care

  • On February 12, the WCB released an Order  (DA 21-168) waiving section
    54.621(a)(1) of the FCC’s rules and extending the close of the
    funding year 2021 application filing window for the RHC Program
    until June 1, 2021, in light of the ongoing
    pandemic.
  • On February 12, the WCB issued a Public Notice (DA 21-153) seeking comment
    on a petition for declaratory ruling filed by Technology Channel
    Sales Professionals (TCSP).  TCSP asks the Commission to
    clarify the certification requirements related to the RHC
    Promoting Telehealth Report and Order
     prohibiting Program
    applicants and service providers from hiring consultants or other
    third parties that “have an ownership interest, sales
    commission arrangement, or other financial stake in the vendor
    chosen to provide the requested services . . . .” 
    Comments are due March 15  and reply
    comments are due March 30.
  • On February 2, the FCC released a Report and Order  preparing for the second
    round of Telehealth funding under COVID-19 relief
    legislation.  The FCC already approved $200 million in funding
    under the program for health care providers in 2020, exhausting the
    initial funding appropriated by Congress under the CARES Act. 
    But Congress recently provided an additional $249.95 million for
    the program.  In the February 2 Report and Order, the FCC
    designated USAC to administer the remainder of Round 1, which
    includes reviewing invoices under the program.  The FCC also
    designated USAC to administer Round 2 of the program. 
    Applications for funding will be submitted through a USAC portal
    and will be evaluated by USAC for compliance with metrics to be
    adopted by the FCC in a subsequent order.  The Commission will
    retain final funding decision-making authority under the
    program.
  • On January 19, the WCB released an Order (DA 21-83) waiving the requirement
    to use the Telecom Program Rates Database for determining rural
    rates for health care providers in Alaska.
  • On January 15, the FCC issued a Public Notice (FCC 21-12) announcing the
    initial Connected Care pilot program projects.  The FCC
    approved an initial set of 14 applications for the $100 million
    Connected Care pilot program.  The Commission stated its
    review of applications for the Pilot Program is ongoing, and the
    Commission expects to announce the selection of the remainder of
    projects in the coming months.  The Commission is committed to
    selecting a broad array of applicants and projects.
  • On December 18, the FCC’s WCB  and Office of the
    Managing Director (OMD) issued a Public Notice (DA 20-1504) establishing
    July 31, 2021 invoicing deadline for
    the COVID-19 Telehealth Program.  Per the program’s
    requirements, Awardees had until December 31, 2020 to purchase
    eligible connected devices and implement eligible services, and can
    receive up to six months of support for eligible services with
    monthly recurring charges.  The Public Notice also and
    provides post-program guidance for awardees.
  • On December 14, the WCB extended waivers (DA 20-1479) of  the
    Rural Health Care (RHC) and E-Rate program gift rules through June
    30, 2021.  The FCC previously waived gift rules applicable
    to both programs to assist rural health care providers and schools
    and libraries affected by the pandemic by allowing them to accept
    free upgrades to connections, equipment, and other services. 
    These waivers were set to expire on December 31, 2020.

USAC Board Meeting Materials

Each quarter, we provide selected highlights from USAC’s
quarterly board and committee meetings.  This quarter, we
provide Business Update materials presented to USAC’s Audit
Committee, which provides information about USAC’s audit
activities from October 2019 through September 2020.  These
materials are from the January 25, 2021 Board Meetings. 
Click HERE to view materials from the
meeting.

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