As broadband bills advance in states responding to the coronavirus, former acting and possibly next FCC Chair Mignon Clyburn said states will be at the “epicenter” of recovery work. Monday at the Mid-Atlantic Conference of Regulatory Utilities virtual conference, the Democrat sought an “uplifting and all-inclusive recovery” that would include a long-awaited USF contribution revamp and increasing Lifeline’s $9.25 monthly government-funded discount.
Federal Universal Service Fund
The FCC's Universal Service Fund (USF) was created by the Telecommunications Act of 1996 to fund programs designed to provide universal telecommunications access to all U.S. citizens. All telecommunications providers are required to contribute a percentage of their end-user revenues to the Fund, which the FCC allocates for four core programs: 1. Connect America Fund, which subsidizes telecom providers for the increased costs of offering services to customers in rural and remote areas 2. Lifeline, which directly subsidizes low-income households to help pay for the cost of phone and internet service 3. Rural Health Care, which subsidizes health care providers to offer broadband telehealth services that can connect rural patients and providers with specialists located farther away 4. E-Rate, which subsidizes rural and low-income schools and libraries for internet and telecommunications costs The Universal Service Administrative Company (USAC) administers the USF on behalf of the FCC, but requires Congressional approval for its actions. Many states also operate their own universal service funds, which operate independently from the federal program.
Industry, USF recipients and consumer advocates are exploring new ways to fund USF. Talks began last year and remain in early stages, participants said in interviews. Parties fear the contribution factor, which reached a record high of 25% last fall (see 1909130003), isn't sustainable. Some want to present a unified funding proposal to Congress or the FCC. Most want the matter addressed next year.
Prospects for advancing legislation on allocating proceeds from the FCC’s coming auction involving of spectrum in the 3.7-4.2 GHz C band have become increasingly doubtful after more than two months in which negotiations were largely in stasis due to Capitol Hill's shift in priority to the COVID-19 pandemic, lawmakers and communications sector officials said in interviews. Senate Appropriations Financial Services Subcommittee Chairman John Kennedy, R-La., and Democratic backers of C band remain interested in pressing forward. Republicans on the House and Senate Commerce committees believe the time for pursuing legislation has largely passed given FCC moves to advance the auction. Wireless and satellite interests cited concerns with the FCC's order in petitions for reconsideration filed Wednesday (see 2005270031).
Major associations wrote congressional leaders Thursday backing legislation funding replacement of Huawei and ZTE equipment in U.S. networks. Industry questioned the FCC approach on equipment by the two Chinese companies, in comments on how provisions in the Secure and Trusted Communications Networks Act affect supply chain security rules. The March law lacks funding for gear replacement (see 2003130083). Industry representatives told us they hope lawmakers fund it soon.
Senate Commerce Committee members signaled interest in including further emergency broadband funding in the next COVID-19 package. Some senators urged their colleagues to think beyond the crisis. The Wednesday hearing featured few references to House Democrats' Health and Economic Recovery Omnibus Emergency Solutions (Heroes) Act (HR-6800), which contains substantial broadband funding. The bill also includes language to make broadcasters and other local outlets eligible for the Paycheck Protection Program. Both issues drew increasing support since the March enactment of the Coronavirus Aid, Relief and Economic Security Act (see 2004300058). The House is expected to vote on HR-6800 as soon as Friday.
Industry, policymakers and consumer advocates are seeking new ways to expand Lifeline enrollment and benefits in response to the public health and economic crisis, we're told. Some advocates are pursuing emergency funding to provide a more robust residential broadband Lifeline benefit to meet the demands of working and learning at home. Stay-at-home orders put restraints on Lifeline promotion and enrollment.
Commissioners approved an NPRM Thursday on the proposed 5G Fund over partial dissents by Commissioners Jessica Rosenworcel and Geoffrey Starks, as expected (see 2004200063). Both said the NPRM offers a false choice and the FCC can’t rely on bad maps or wait until 2023 or later to start offering support. Commissioner Mike O’Rielly supported the NPRM, but also had concerns. Members met via teleconference, for the second month during COVID-19.
Senate Commerce Committee ranking member Maria Cantwell, D-Wash., told us Wednesday she and other congressional Democrats plan to push for the next bill addressing COVID-19 to include broadband capacity and distance learning provisions. A compromise of a third stimulus bill unveiled that day failed to include those priorities. Capitol Hill leaders and President Donald Trump’s administration reached a deal early Wednesday. A cloture vote on the COVID-19 legislative vehicle (HR-748) was expected to have happened Wednesday night. Senate Judiciary Committee Chairman Lindsey Graham of South Carolina and three other Republicans made that outcome more uncertain when they objected to the bill's proposed amount of unemployment insurance.
The COVID-19 pandemic comes as Ajit Pai enters what is likely to be the homestretch of his time as FCC chairman. Pai has sketched out an ambitious agenda for the rest of 2020, but no one knows how long the pandemic will last. Industry officials agree it will likely slow work on at least some items due to refocusing on coronavirus-related orders. The crisis offers Pai a chance to write a new legacy, they said.
The FCC Wireline Bureau waived gift rules through Sept. 30 for the E-rate and Rural Health Care programs to help schools, libraries and healthcare providers better respond to COVID-19 outbreaks, in an order Wednesday on docket 02-60 (see 2003180048). Waivers in the healthcare program are limited to providers involved in screening and treatment of COVID-19 or mitigating its spread, the order said. The E-rate waiver is limited to eligible entities adjusting to school or library closures due to COVID-19, regardless of the USF program's funding year. The FCC will monitor whether extensions are needed. “By waiving certain FCC rules today, we are giving service providers the chance to step up and give health care providers more tools to fight the ongoing pandemic and serve patients more effectively," Chairman Ajit Pai said. He encouraged "service providers and equipment makers to partner with schools and libraries to provide mobile hotspots and other broadband-enabled devices to students to help bridge the digital divide during the coronavirus pandemic." Such efforts could complement the agency's work with Congress to appropriate funds for a remote learning initiative and a COVID connected care pilot, Pai said, adding such programs would allow the agency to use federal funds to support in-home equipment for patients and students affected by the pandemic. The agency's Connected Care pilot remains in the rulemaking stage, and it sought comment on whether the program should subsidize patient monitoring equipment and broadband to the home (see 1906190013). Commissioner Jessica Rosenworcel called the gift waivers a smart step. "But let’s not confuse generosity for justice," she said. "We need a national plan to ensure that everyone is connected during these unprecedented days." She wants the FCC to use its "universal service powers" to provide hotspot loans to students caught in the homework gap, and connectivity for telehealth services to support treating coronavirus patients and those quarantined. Stakeholders for USF programs supporting anchor institutions expect a spike in telehealth (see 2003060036) and online learning (see 2003170014) this year. The Schools, Health & Libraries Broadband Coalition asked the FCC to waive the gift rules, in a letter Tuesday (see 2003170014). The gift ban was in place to prevent undue influence in the competitive bidding process, SHLB Executive Director John Windhausen told us. SHLB views this as "a timely step,” he emailed Wednesday. “The coronavirus is putting online learning and telemedicine in high demand ... We hope the FCC will continue to be proactive.”