The FCC proposed sweeping reforms to its process for suspending and debarring entities from participating in its largest funding programs, including the four Universal Service Fund (“USF”) programs, at its meeting on November 22, 2019. If adopted, the proposed rules would mark a sea change in FCC enforcement, allowing the FCC to cut off funding more quickly and for a wider range of alleged misconduct. The FCC also would expand the scope of these rules to cover its Telecommunications Relay Service (“TRS”) program and National Deaf-Blind Equipment Distribution Program (“NDBEP”), in addition to the High-Cost, Lifeline, E-Rate, and Rural Health Care USF programs.
The proposed rules also would impose new disclosure obligations on support recipients and require them to verify that they do not work with suspended/debarred entities. In addition, the proposed rules would create a federal reciprocity system, in which entities suspended/debarred from participating in funding programs administered by other agencies similarly would be prevented from participating in the FCC’s programs (and vice versa). The proposed rules would impact nearly every USF participant and warrant close attention. The FCC has not announced comment deadlines on its proposals, but they will likely occur in early 2020. While the FCC’s proposals are just the first step towards actual rule changes, the agency has shown every indication that it will continue moving full speed ahead on USF reform in the coming year.