Category Archives: Universal Service Fund

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FCC Plans to Classify Texting as an Information Service, Take Action on Robocalls, Spectrum, and Rural Broadband at December Meeting

The FCC plans to take aim again at unwanted texts and robocalls at its next meeting scheduled for December 12, 2018. Unwanted robocalls and texting consistently top the list of complaints received by the FCC and that has driven much regulatory attention by the agency in recent years. Specifically, at its December meeting, the FCC … Continue Reading

Flurry of USF Audit Reports Expected by End of Year, Random Audits to Return in FY 2019

We attended the Audit Committee meeting at USAC’s quarterly business meeting this morning.  While much of the discussion concerned internal controls USAC has in place to oversee its functions, the business update portion of the meeting gave us a snapshot into contributor and beneficiary audit activity at USAC.  The presentation gave us some insight into … Continue Reading

FCC Seeks Input on Revising and Eliminating Older Rules

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 … Continue Reading

5G and Broadband Infrastructure in the Spotlight at August FCC Meeting

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 … Continue Reading

Citing National Security, FCC Begins Proceeding to Bar the Use of Universal Service Monies for Equipment from Certain Countries

Echoing concerns raised by other parts of the federal government over the past several years, the FCC, at its open meeting on April 17, 2018, adopted a Notice of Proposed Rulemaking (“NPRM”) to consider a rule which would prohibit Universal Service Fund (“USF”) support from being used “to purchase or obtain any equipment or services … Continue Reading

FCC Moves to Further Deregulate Business Data Services

Nearly a year after it ordered sweeping deregulation of the business data services (“BDS”) market, the Federal Communications Commission (“FCC”) proposed new rules that would allow certain small rural carriers to move from longstanding rate-of-return regulation to price cap regulation for their BDS offerings.  The transition would reduce the regulatory obligations of such carriers, including … Continue Reading

FCC Sets Stage for $4.5 Billion Auction by Resolving Mobility Fund Phase II Challenges

The Federal Communications Commission (“FCC”) took a major step forward on closing the “digital divide” in mobile broadband at its February meeting by unanimously adopting an Order resolving the remaining challenges to the Mobility Fund Phase II (“MF-II”) auction.  The order eases the letter of credit requirements and clarifies the collocation obligations for funding recipients, … Continue Reading

Updated 499-A Form and Instructions Signal Start of 2018 USF Season

Last week, the FCC released its form and instructions for the 2018 499-A, due April 1st. The 499-A form is filed by almost all intrastate, interstate and international providers of telecommunications in the U.S. and reports historic annual revenue. Notably, the FCC’s Wireline Competition Bureau did not solicit comments on the form and instructions this … Continue Reading

USF Update: Where Are We Now?

In 2017, the Government Accountability Office (GAO) released a report focusing on the Lifeline program. Tucked away in that report was a significant discussion of Universal Service Fund (USF) contributor audits that has received little attention. In a recent episode of Kelley Drye’s Full Spectrum podcast, Partner Steve Augustino and Special Counsel Denise Smith discussed … Continue Reading

Ready, Set, Bid: FCC Announces July Start Date for Auction to Provide Support for Voice and Fixed Broadband in Unserved High-Cost Areas

At the January Open Meeting, the Federal Communications Commission (“FCC”) adopted a Public Notice (“PN”) that sets July 24, 2018 as the start of the Connect America Fund Phase II auction (“Phase II Auction”) in which service providers can compete for up to $1.98 billion annually in financial support over 10 years.  This will be … Continue Reading

Does the Rural Healthcare Program Need a Check-Up? Program Under Microscope Following $18.7 Million Proposed Fine for Fraud

The Rural Health Care Program (“RHCP”) is sure to face increased scrutiny in the wake of a $18.7 million proposed fine issued by the Federal Communications Commission (“FCC”) at its January meeting against a telecommunications reseller for allegedly defrauding the program.  The FCC claims that DataConnex, one of the top five recipients of RHCP funding, … Continue Reading

E-Rate Fraud in Crosshairs Following Charter School Indictment

E-Rate fraud is back in the spotlight following the indictment of a Dallas charter school CEO and the owner of a contracting company for an alleged kickback scheme resulting in over $300,000 in illegal subsidies. Federal prosecutors stated that the pair violated the E-Rate program’s competitive bidding requirements and submitted fraudulent invoices to the Federal … Continue Reading

FCC Votes on Possible Changes to the Rural Health Care Program

At its last open meeting in 2017, the five FCC Commissioners unanimously voted to adopt a Notice of Proposed Rulemaking (NPRM) and Order regarding the Commission’s Rural Health Care (RHC) Program, a 20-year old initiative aimed at improving rural health care provider access to first telecommunications services and later an array of communications services, including … Continue Reading

FCC Chairman Proposes Another Hurricane-Related Exception to the FCC’s Rules

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 related … Continue Reading

Proposed Fourth Quarter 2017 Universal Service Fund Contribution Factor Jumps – Poised to Hit New High

On September 12, 2017, the Federal Communications Commission’s (Commission) Office of the Managing Director (OMD) released a Public Notice proposing a universal service fund (USF) contribution factor of 18.8% for fourth quarter 2017.  This proposed contribution factor would be the highest rate since the USF program’s inception and likely reflects the impact of the declining … Continue Reading

August 2017 FCC Meeting Recap: Commission Sets Reverse Auction Procedures for CAF Phase II Auction

At its August Open Meeting, the Federal Communications Commission (FCC) approved a Public Notice (“Notice”) that addresses the procedures for its upcoming Connect America Fund (“CAF”) Phase II auction (“Auction” or “Auction 903”), scheduled to begin in 2018. Auction 903 will be a competitive reverse auction wherein service providers will compete for up to $1.98 billion … Continue Reading

New Podcast: Pai the Enforcer

When Ajit Pai was a Commissioner, he was a frequent critic of the FCC’s enforcement practice.  Now that Chairman Pai has led the FCC for six months, his approach to enforcement is coming into better focus.  In this episode of Kelley Drye’s Full Spectrum podcast, Kelley Drye enforcement attorneys Steve Augustino and Brad Currier discuss … Continue Reading

What to Expect at the FCC’s August 2017 Open Meeting

Below is Kelley Drye’s preview of the items under consideration at the Federal Communication Commission’s (FCC’s or Commission’s) upcoming monthly Open Meeting, to be held on August 3, 2017. Consistent with the trend since he took over the Commission, Chairman Ajit Pai continues to schedule a large number of items.  Indeed, for the seventh month … Continue Reading

FCC Amends NAL in Rural Healthcare Proceeding, Increases Proposed Fine

In the first action of its kind, on June 7, 2017, the Federal Communications Commission (“FCC”) issued an amendment to a Notice of Apparent Liability for Forfeiture and Order (“NAL”), for alleged violations of the rules governing the Universal Service Rural Health Care Program (“RHCP”). The FCC found that the fine proposed in the initial … Continue Reading

Commission Resolves Long-Pending Stratos and Morris USF Contribution-Related Petitions

In orders issued last week, the Federal Communications Commission (Commission) continues what appears to be a trend of resolving long-pending universal service fund (USF) contribution issues.  The Orders, released May 23, 2017 and May 24, 2017 by the Commission’s Wireline Competition Bureau (Bureau), ruled on petitions filed by, respectively, Morris Communications, Inc. (Morris) and Stratos … Continue Reading

Split FCC Proposes Rural “Rate Floor” Reform

On May 18, 2017, at its May Open Meeting, the Federal Communications Commission (“FCC”) adopted a Notice of Proposed Rulemaking and Order on a two-one vote, seeking comment on whether it should reform the so-called rural “rate floor” on basic voice service or eliminate it entirely.  The rural rate floor rule requires carriers receiving Connect … Continue Reading

FCC Eases Restrictions on Broadband Deployment Support for Rate-of-Return Carriers; Faces Challenges to Connect America Fund Phase II Auction

As part of its continued focus on accelerating broadband deployment, the Federal Communications Commission (FCC) eased restrictions on its universal service support for deployments by rate-of-return carriers in rural and other high-cost areas.  In a unanimous Order on Reconsideration issued at its April meeting, the FCC found that the restrictions drove providers to exclude high-cost … Continue Reading

Pai Directs USAC to Improve E-Rate Productivity Center

Federal Communications Commission (FCC or Commission) Chairman Ajit Pai sent a letter this week to Chris Henderson, CEO of the Universal Service Administrative Company (USAC) expressing concern about flaws in USAC’s administration of the E-Rate Productivity Center (EPC), the online application and account portal. In the letter, Chairman Pai noted his support for E-Rate as … Continue Reading

Wireline Competition Bureau Explains No Presumption of Intrastate or Interstate Jurisdiction for Private Lines; Carriers Must Conduct Good Faith Inquiry Into Nature of Traffic Carried

By an Order issued late last week, the Wireline Competition Bureau (Bureau) provided important insight regarding determining the jurisdictional classification of private line revenues.  In ruling on long-pending petitions for reconsideration of Universal Service Administrative Company (USAC) audit findings regarding the classification of private line revenues, the Bureau explained that the longstanding Ten Percent Rule … Continue Reading
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