Universal Service Fund

The FCC plans to prohibit the use of Universal Service Fund (“USF”) support to purchase equipment or services from foreign entities that it determines pose national security risks at its next meeting scheduled for November 19, 2019. As we previously reported, the ban may severely impact participants in all federal USF programs and involve a costly “rip and replace” process to remove foreign-made equipment from domestic telecommunications networks. The FCC also expects to move forward on its heavily-anticipated E911 vertical accuracy (i.e., z-axis) proceeding and adopt new requirements for wireless carriers to better identify caller locations in multi-story buildings. Rounding out the major actions, the FCC anticipates proposing new rules for suspending and debarring entities from participating in USF and other funding programs; removing longstanding unbundling and resale requirements for certain telecommunications services; and widening the contribution base for the Internet Protocol Captioned Telephone Service (“IP CTS”) to include intrastate revenues.

The draft items cover the gamut of telecommunications issues, affecting everything from the construction of next-generation 5G networks to legacy intercarrier competition rules, and should be closely watched. You will find more details on the most significant November FCC meeting items after the break:


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The FCC adopted an Order on Reconsideration at its October 25, 2019 meeting modifying the broadband performance testing requirements for service providers receiving Connect America Fund (“CAF”) high-cost support. Under the Order, the FCC will delay the start of testing for many CAF recipients to better align with network deployment deadlines. The FCC also will create a “pre-testing” period to allow CAF support recipients time to assess how their networks and testing equipment perform without penalty before official testing begins. In addition, the FCC will provide more flexibility for certain testing procedures to reduce the burden on smaller service providers. The Order impacts every CAF program and deserves a close look, not only by service providers that currently receive CAF support but also by those that plan to seek such support through future programs like the Rural Digital Opportunity Fund. The Order is just the latest in a long line of reforms to the CAF since its creation nearly a decade ago and shows that the FCC still is willing to tinker with its high-cost programs to meet its broadband deployment goals.
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Last week, the FCC announced its tentative agenda for its upcoming October 25, 2019 open meeting and released drafts of the items on which the commissioners will vote. There is a notable lack of a spectrum item on the agenda, as Chairman Pai does not appear ready yet to address the pending mid-band spectrum proceedings (including C-Band and 6 GHz). In addition, while the items will address themes that have been consistent throughout Ajit Pai’s chairmanship, like bridging the digital divide and removing unnecessary regulatory burdens, there does not appear to be a particular common theme among the items on the agenda. We have not been able to come up with a way to weave a Halloween theme into the agenda either, but at least the Chairman’s blog did take time out to wish the Nationals good luck in their series with the Dodgers. Those well wishes appear to have paid off!

You will find more details on some of the most significant October meeting items after the break:


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Featuring keynote remarks from FCC Commissioner Michael O’Rielly

Date/Time: Wednesday, October 2, 3:00 – 5:30 PM
Location: Kelley Drye & Warren LLP, 3050 K Street NW

This seminar will feature background presentations on the Universal Service Fund (“USF”) programs, remarks from FCC Commissioner Michael O’Rielly and a conversation with experts on the future of the USF programs. Attendees are encouraged to ask questions and participate in the discussion as we take a deeper dive into the issues.


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In this two-part edition of Full Spectrum’s recurring series on FCC enforcement, Partner Steve Augustino and Senior Associate Brad Currier highlight a recent trend and cover some of the most interesting late-summer enforcement items.

Part one of this episode focuses on the significance and implications of Commissioner-led investigations, such as Commissioner O’Rielly regarding E-Rate overbuilding

On August 12, the FCC officially launched the Fraud Division of its Enforcement Bureau with the publication of an Order adopted earlier this year. The new division will be tasked with taking enforcement actions against fraud in the Universal Service Fund (“USF”) and other funding programs that the agency oversees. While February’s brief Order

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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Even with the dog days of summer upon us, the FCC shows no signs of slowing down on its policymaking priorities in a jam-packed agenda for its next open meeting on August 1, 2019. Headlining the agenda is a proposal to establish a Rural Digital Opportunity Fund (“RDOF”) offering $20.4 billion over a decade to support high-speed broadband deployment to unserved areas. The RDOF would eventually replace the FCC’s Connect America Fund (“CAF”) as the agency’s primary universal service program for high-cost areas. The areas receiving RDOF support would be determined by a new agency-led information collection, requiring more granular service data from broadband providers. As with the CAF, the RDOF proceeding is sure to engender debate in the broadband industry about the appropriate performance benchmarks, auction bidding rules, and data collection mechanisms. In addition to the RDOF, the FCC also plans to adopt items at the August meeting to reform how it allocates Rural Health Care Program funding; streamline licensing procedures for small satellite systems (otherwise known as “smallsats”); establish procedures for the auction of new toll free numbers; implement 911 direct dial and location information requirements on multi-line telephone systems (“MLTS”) often found in offices, hotels, and college campuses; expand the agency’s anti-spoofing rules; and limit the franchise fees placed on cable operators.

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:


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Continuing its push to free up spectrum to support next-generation 5G services, the FCC plans to move forward on auctions of both mid- and high-band spectrum for commercial mobile use at its next open meeting scheduled for July 10, 2019. First, the FCC would establish new licensing rules for the 2.496-2.690 GHz band (“2.5 GHz Band”) currently used for educational television services to facilitate the auction of the spectrum next year. The FCC contends that the 2.5 GHz Band, which represents the largest contiguous block of mid-band spectrum considered for auction to date, has largely gone unused and should be opened up for commercial use. Second, the FCC would adopt application and bidding procedures for the auction of spectrum at 37.6-38.6 GHz (“Upper 37 GHz Band”), 38.6 GHz-40.0 GHz (“39 GHz Band”), and 47.2-48.2 GHz (“47 GHz Band”). This auction would be the FCC’s third auction of high-band spectrum, following the recent auctions of 24 GHz band and 28 GHz band spectrum. As we previously noted, this auction is complicated by the presence of incumbent licensees in the 39 GHz Band, who would be offered incentive payments to accept modified licenses or leave the Band under the FCC’s plan. Rounding out the major July actions, the FCC expects to seek comment on establishing a three-year, $100 million universal service pilot program to support telehealth services as well as eliminate pricing regulation and other restrictions on certain legacy data transport services offered by price cap carriers.

You will find more details on the most significant July meeting items after the break:


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