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. So far, the Commission has tackled ongoing issues of bipartisan support, including broadband mapping, communications supply chain security and preventing 911 fee diversion. But the biggest challenges ahead are in the universal service fund and, specifically, efforts to bridge the digital divide.

In this post, we’re going to take a look at developments in the FCC’s $9 billion-per-year Federal Universal Service Fund and more recent pandemic-related efforts to address deficiencies in broadband access that have been exposed by our year of remote work, school and social activities.


Continue Reading The State of the Universal Service Fund in 2021

The Federal Communications Commission (“Commission” or “FCC”) has long been interested in the use of broadband-enabled telehealth services to make healthcare more accessible, particularly for veterans and low-income patients. On September 3, 2020 the Commission released a Public Notice (“Public Notice”) providing additional information about its Connected Care Pilot Program (“Connected Care Program”). The Connected Care Program will make available up to $100 million dollars, over a three year period, to defray the costs of broadband connectivity and other connected care information services for eligible health care providers (“HCP”). While the CARES Act allowed the Commission to quickly implement the short-term COVID-19 Telehealth Program supporting eligible HCP telehealth services during the early stages of the COVID-19 pandemic, the Connected Care Program is a longer-term initiative, under Commission consideration since late 2018 and formally established in April 2020. The Connected Care Program is intended to provide much-needed financial support for telehealth services, particularly for veterans and low-income patients, and also to provide the Commission with data regarding how funding can support telehealth services in the future to treat the health needs of individuals that may lack sufficient – or any – mobile or residential broadband internet access services necessary for healthcare needs.

The FCC has not yet set a deadline for Connected Care Program applications but issued the recent Public Notice to enable HCPs to begin preparing to apply once the application filing deadline is established. If the Connected Care Program garners the same level of interest as the COVID-19 Telehealth Program – a $200 million fund that was depleted within 3 months of the Commission first accepting applications – HCPs seeking to participate in the Connected Care Program may want to consider how to prepare now to submit a timely application once the final application details and filing deadline are established. The Commission will be issuing a subsequent Public Notice identifying the final Connected Care Program application procedures and filing deadline.


Continue Reading FCC Provides Guidance on $100 Million Connected Care Pilot Program; Application Deadline Remains TBD

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.


Continue Reading FCC Plans Major Overhaul of Suspension and Debarment Rules for its USF, TRS, and Other Funding Programs

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.


Continue Reading Does the Universal Service Fund Need a Cap? A Divided FCC Begins its Inquiry

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 a likely increased amount of activity over the next few months.

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

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 Internet access, dark fiber, and business data services.  This item is part of FCC Chairman Ajit Pai’s overall initiative to close the “digital divide,” and proposes to increase the $400 million spending cap for the first time since 1997.  The NPRM also proposes to change how the FCC handles demand beyond the cap, from general proration to prioritization based on rurality or remoteness.  As such, all interested stakeholders should carefully monitor and consider participating in the rulemaking process.  Comments will be due 30 days after publication of the item in the Federal Register (which usually takes a few weeks) and reply comments will be due 60 days after publication.

Continue Reading FCC Votes on Possible Changes to the Rural Health Care Program

CashIn 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 NAL was not based on the correct violations and included violations beyond the agency’s one-year statute of limitations.  However, by changing the type of conduct found to violate the RHCP rules and increasing the proposed fine, the FCC’s amendment presents its own statute of limitations concerns and raises questions about the use of amendments in enforcement actions.  The amendment also is the first foray by Chairman Pai into Universal Service enforcement matters since he assumed the chairmanship in January of this year.

Continue Reading FCC Amends NAL in Rural Healthcare Proceeding, Increases Proposed Fine