At its July Open Meeting, the FCC adopted a Notice of Proposed Rulemaking (“NPRM”) to propose a pilot program within the Universal Service Fund (“USF”) to support broadband connections for telemedicine, or “connected care” for low-income Americans and veterans. Healthcare-related items have received a great deal of attention at the FCC recently, as the agency also adopted an order, which has not yet been released, at its August Open Meeting last week to reform its Rural Health Care Program to focus on telehealth in rural areas. The Connected Care NPRM proposes a three-year pilot at a cost of $100 million to be collected from USF assessments separate from the other USF programs. The NPRM was championed by Commissioner Carr and supported by all five FCC commissioners, although Commissioner O’Rielly expressed some reservations with the fact that the pilot would assess another $100 million on USF ratepayers outside of the individual program caps or budgets. His concerns likely relate to the fact that, at the same time, he is trying to advance a proposal to place an overall cap on the USF, which has received significant opposition. Last week, the Connected Care NPRM was published in the Federal Register, triggering a comment deadline of August 29th and a reply deadline of September 30th.

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On Friday, May 31, 2019, the FCC released a much-anticipated notice of proposed rulemaking (“NPRM”) to consider the adoption of an overall budget cap on the Universal Service Fund (“USF”), separate from any individual budgets for each of the four USF programs. The NPRM is in response to years-long advocacy on the part of Commissioner O’Rielly to impose budgets on USF spending, and it comes over dissent of the two Democratic Commissioners. While Commissioner O’Rielly justified the proposal as responsible stewardship of public money and said it would not limit funding in the near future, Commissioners Rosenworcel and Starks criticized the proposal as undermining the goals of Universal Service and, at worst, creating a “universal service hunger games” among the support programs.

The release of the NPRM was our first look at the specifics of a proposal that broke a month ago. The NPRM does not propose a specific budget, primarily raises questions about how to proceed, and does not contain any proposed rules. Nevertheless, opponents of the proposal have been most vocal since word of the NPRM came out, and we expect those USF stakeholders to continue in opposition to the approach. Meanwhile, proposals to reform USF contributions remain stalled (and lacking any consensus), while the contribution factor hovers around 20% of assessable revenues.


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Back for its 10th year, our most popular webinar offers an in-depth discussion on the federal Universal Service Fund for participants in USF programs and for contributors to the Fund. This webinar will address major developments in the four support funds and discuss the pressures on the USF contribution system in an era of 20% contribution rates. In addition, as usual, we will offer tips and insights into managing audits and investigations in these highly scrutinized programs.

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On February 4, 2019, the FCC announced a plan to create a new division housed in its Enforcement Bureau, dedicated to prosecuting fraud in the agency’s Universal Service Fund (“USF”) programs. Citing to recent USF-related proposed fines and voluntary settlements, the FCC asserted that the creation of a specialized Fraud Division was necessary to combat misuse of funds under the High Cost, E-Rate, Lifeline, and Rural Health Care programs that make up the USF. The FCC’s brief, two-page Order leaves many questions unanswered about the proposed Fraud Division’s ambit and the status of the “USF Strike Force” that preceded it. However, the Order signifies that the FCC plans to redouble its fraud enforcement efforts in 2019 following recent setbacks on the USF rulemaking front. As a result, eligible telecommunications carriers and other recipients of USF support should keep a close watch as the scope and function of the new Fraud Division starts to take shape.
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As summer begins to wind down, the FCC will begin considering whether to revise or eliminate decade-old regulations, including certain rules related to the Universal Service Fund (“USF”), equipment authorization procedures, and disabilities access. The FCC kicked off its review with a Public Notice under the Regulatory Flexibility Act, which requires federal agencies to reexamine regulations within 10 years of their adoption to assess the continued need for the rules, the rules’ complexity, and whether the rules overlap or conflict with other federal regulations. The purpose of the review is to ensure that older, unnecessary rules do not remain on the books, lowering the compliance burden for smaller businesses. Although the FCC rarely eliminates a rule outright as part of this review, the comments received can help the agency identify improvements for future rulemakings or flag potential compliance issues.

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In June, the FCC approved a package of regulatory measures – Report and Order, Declaratory Ruling, Further Notice of Proposed Rulemaking (“FNPRM”), and Notice of Inquiry (“NOI”) – directed at reforming the IP Captioned Telephone Service (“IP CTS”) program to address concerns about its sustainability. IP CTS is a form of telecommunications relay service (“TRS”) that enables people with hearing loss to communicate by speaking while listening with any remaining hearing ability and reading real-time captions. IP CTS is paid for by the FCC through its TRS Fund and has experienced significant usage growth, now representing almost 80 percent of the costs covered by the Fund. The FNPRM and NOI, which propose fundamental reforms to the IP CTS program, were published in the Federal Register on July 17, 2018, which set the upcoming comment deadlines. Comments on the FNPRM are due by September 17, 2018 and replies by October 16, 2018. Comments on the NOI are due by October 16, 2018 and replies by November 15, 2018.

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The FCC will focus on 5G spectrum and the infrastructure supporting next-generation broadband services at its meeting planned for August 2, 2018. Continuing its push to make more spectrum available for flexible wireless use to support 5G technologies, the FCC teed up two major spectrum-related items for its August Open Meeting, which comes hot on the heels of its July 12 meeting. The items would open up 1.55 GHz of spectrum for commercial use through two auctions, with the first auction set to begin later this year. The FCC also plans to take a major step forward in supporting broadband deployment by adopting a long-anticipated “one-touch make-ready” regime for pole attachments, while taking aim at deployment moratoria. Rounding out the major items, the FCC will seek comment on launching a $100 million Connected Care Pilot Program. The proposed items maintain the trend of jam-packed Summer FCC meetings (which will then take a break until September 26) and will be sure to generate input from all communications industry sectors. You will find more details on the significant August FCC items after the jump:

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As the second session begins, the 115th Congress will pick up where it left off on some key telecommunications and technology issues. In this episode of Kelley Drye’s Full Spectrum podcast, Partner John Heitmann and Jennifer McCadney, Special Counsel in Kelley Drye’s Government Relations and Public Policy group, examine the current status of these issues

A notable trend under Chairman Pai’s leadership has become the FCC’s proactive willingness to modify its rules in light of recent natural disasters.  As discussed in our recent podcast, the FCC suspended or waived a number of regulatory requirements over the past few weeks for carriers affected by recent major weather events, including rules

As communications networks continue to recover from the devastation of Hurricanes Harvey and Irma, and with further severe weather events on the horizon, this episode of Kelley Drye’s Full Spectrum podcast takes a look at the impact the hurricanes have on communications service providers. In this episode, Partner Steve Augustino and Associate Brad Currier describe