You will find more information about the items on the December meeting agenda after the break:

Improving Accessibility and Clarity of Emergency Alerts - The EAS NPRM would propose rules to improve the accessibility and clarity of visual messages distributed to the public through the EAS, which advises the public of emergency alerts issued by government entities. The EAS is comprised of a legacy broadcast system that can only relay audio messages and an internet-based Common Alerting Protocol (“CAP”) system that can relay audio, text and visual messages. Due to the fact that alert initiators using the legacy EAS have some discretion regarding the content of the alert message while EAS participants that use video (such as broadcast or cable television operators) must rely on codes embedded in alerts to create a visual message (usually text), the audio and visual messages associated with the alerts may not match. To improve the clarity of EAS test messages, the EAS NPRM would propose the use of the following script as the visual message for all legacy EAS nationwide tests: “This is a nationwide test of the Emergency Alert System issued by the Federal Emergency Management Agency covering the United States from [time] until [time]. This is only a test. No action is required by the public.” For EAS participants that receive an alert from the CAP system, the FCC would propose to change the nationwide EAS test event code that alert initiators include in the alerts so that the following language is displayed in all visual messages: “Nationwide Test of the Emergency Alert System.” The EAS NPRM would also seek comment on how the legacy EAS can be improved to enable alert originators to relay visual text that matches the audio message and how the EAS can be modified to support greater functionality and accessibility.

Facilitating Satellite Broadband Competition – The Satellite Spectrum Sharing NPRM would grant a petition for rulemaking from SpaceX requesting revisions to the spectrum sharing requirements among NGSO FSS systems. The FCC considers applications for NGSO FSS system licenses, which are used to provide broadband services, in groups based on filing date under a processing round procedure. All NGSO FSS system operators within a processing round that are granted a license must comply with the FCC’s spectrum sharing rules and coordinate with each other in good faith to use commonly authorized frequencies. If the NGSO FSS system operators in a processing round are unable to come to a coordination agreement, then a default spectrum-splitting procedure applies. The Satellite NPRM would propose that the spectrum sharing requirement only be applicable to NGSO FSS systems approved in the same processing round. The FCC would seek comment on a rule that would protect systems processed in an earlier round from being subjected to a certain level of interference from systems processed in a subsequent round and on whether interference protection should end after a period of time. To facilitate analysis of potential interference, earlier-round NGSO FSS system operators would be required to share data regarding their beam locations with later-round NGSO FSS system operators subject to confidentiality or non-disclosure agreements.

Promoting Fair and Open Competitive Bidding in the E-Rate Program – The E-Rate NPRM would propose changes to the E-Rate program rules to improve program integrity. The Schools and Libraries program, or E-Rate, funded by the Universal Service Fund, provides discounted telecommunications and broadband services and equipment to eligible schools and libraries (referenced as E-rate “applicants”). To obtain services and equipment through the E-rate program, an applicant must conduct a competitive bidding process among interested service providers that is commenced by submission of FCC Form 470 to USAC, which then posts the form to its website. Applicants consider bids received directly from interested service providers and then seek funding to pay their chosen service providers by filing an FCC Form 471 with USAC. The E-Rate NPRM would recommend the establishment of a bidding portal through which service providers would provide competitive bidding documentation. The FCC would seek comment on whether applicants also should be required to use the portal to submit other documentation, such as bid evaluation matrices, questions from bidders, and contract documents. In addition, the E-Rate NPRM would ask whether service providers should be required to wait a certain period of time before they could access service providers’ bids. Finally, the E-Rate NPRM would request comment on various issues related to the proposed portal, including how the E-rate’s existing portal could be leveraged to accept service providers’ bids, whether any procurement laws or technical issues would preclude or limit the use of a bidding portal and whether the portal should be used as a repository of documents for purposes of meeting recordkeeping requirements.

For more information 2021 INCOMPAS Show or to register, go to https://show.incompas.org/. For monthly updates on the Universal Service Fund (“USF”) and other broadband policy news, subscribe to Kelley Drye’s USF Tracker.

You will find more information about the items on the September meeting agenda after the break:

Promoting More Resilient Networks - The NPRM would seek comment on various issues related to improving the reliability and resiliency of communications networks during emergencies and natural disasters. The NPRM focuses on whether the Framework (a wireless industry agreement aimed at providing mutual aid during emergencies, ensuring municipal and consumer readiness and communicating about service restoration) can be improved, such as by expanding participation, increasing the scope of participants’ obligations or codifying industry disaster-based coordination obligations. The NPRM would also seek comment on enhancing information provided to the FCC during disasters and network outages through the Network Outage Reporting System and the Disaster Information Reporting System. In addition, the NPRM would ask about communications resilience strategies to mitigate the impact of power outages, including coordination between communications providers and power companies and the use of backup power during disasters.

Reassessing 4.9 GHz Band for Public Safety – The Order on Reconsideration would grant requests by public safety organizations to vacate a 2020 order that permits states to lease spectrum in the 4.9 GHz band (designated for public safety use) to third parties for non-public-safety use. The Order on Reconsideration would also lift a freeze on 4.9 MHz licenses to allow incumbent licensees to modify licenses or seek new permanent fixed sites. The FNPRM would propose to establish a nationwide framework for the 4.9 GHz band to maximize public safety while promoting interoperable communications and interference protection throughout the network. Areas for comment would include how to protect public safety users from harmful interference, the use of the Universal Licensing System or another database to maintain relevant technical data, adoption of consistent technical standards to foster interoperability of equipment using the band and giving public safety uses priority. The NPRM would also seek comment on how to manage the band, incentivize public safety licensees to use the latest commercially available technologies and allow non-public safety use of the band without jeopardizing public safety operations.

Authorizing 6 GHz Band Automated Frequency Coordination Systems - The Public Notice would set forth a process for the OET to authorize AFC systems, which are required to operate standard-power devices in the 6 GHz band. Specifically, unlicensed standard power devices that operate in the 6 GHz band are required to check an AFC system prior to operating to avoid harmful interference to incumbent operations. The Public Notice would explain the approval process for AFC system operators, which would include conditional approval, a public trial period and an opportunity for public comment. The Public Notice would provide detailed information about the content of AFC system proposals and request that such proposals be submitted no later than November 30, 2021 (although proposals will be accepted after that date).

Spectrum Requirements for the Internet of Things - The NOI (which is required to be issued by The William M. (Mac) Thornberry National Defense Authorization Act for FY 2021 (Pub. L. No. 116-28) (the “Act”)) would seek comment on whether there is sufficient spectrum available for current and future IoT needs. As directed by the Act, the LOI would ask for comment on how to ensure that adequate spectrum is available for the increased demand for the IoT, whether regulatory barriers would prevent accessing any additional needed spectrum and the roles of licensed and unlicensed spectrum for supporting the IoT.

Shielding 911 Call Centers from Robocalls – The FNPRM would propose to update the FCC’s rules governing the PSAP Do-Not-Call registry. Although the FCC adopted rules in 2012 to establish the registry as a means to protect PSAPs from unwanted robocalls, the registry has not been fully implemented due to security concerns associated with releasing PSAP telephone numbers to entities accessing the registry. The FNPRM would propose that voice service providers block autodialed calls to PSAP telephone numbers on the PSAP Do-Not-Call registry, as an alternative to allowing entities claiming to use autodialers to access the registry to identify telephone numbers that may not be called. In addition, the FNPRM would seek comment on whether autodialed calls and text messages continue to disrupt PSAPs’ operations, security risks associated with maintaining a centralized registry of PSAP telephone numbers, ways to address security issues (such as enhanced caller vetting and data security requirements) and alternative means to prevent robocalls to PSAPs (such as by utilizing other technological solutions or leveraging the National Do-Not-Call registry).

Stopping Illegal Robocalls From Entering American Phone Networks - The FNPRM would propose to require gateway providers to assist in the battle against illegal robocalls by applying STIR/SHAKEN caller ID authentication and other robocall mitigation techniques to calls that originate abroad from U.S. telephone numbers. The FNPRM would also seek comment on several other proposals aimed at mitigating robocalls, including the following requirements that would be applicable to gateway providers: (1) responding to traceback requests within 24 hours; (2) blocking calls upon notification from the Enforcement Bureau that a certain traffic pattern involves illegal robocalling; (3) utilizing reasonable analytics to block calls that are highly likely to be illegal; (4) blocking calls originating from numbers on a do-not-originate list; (5) confirming that a foreign call originator using a U.S. telephone number is authorized to use that number; (6) including robocall mitigation obligations in contracts with foreign customers; and (7) submitting a certification regarding robocall mitigation practices to the Robocall Mitigation Database. In addition, the FNPRM would seek comment on a requirement that service providers block calls from gateway providers identified as bad actors by the FCC and on whether additional information should be collected by the Robocall Mitigation Database. The FNPRM would ask whether there are alternative means to stop illegal foreign-originated robocalls. Finally, while the rulemaking proceeding is pending, the FCC would not enforce the prohibition in Section 63.6305(c) of the FCC’s rules on U.S.-based providers accepting traffic carrying U.S. NANP numbers that is received directly from foreign voice service providers that are not in the Robocall Mitigation Database.

Supporting Broadband for Tribal Libraries Through E-Rate - Pursuant to Section 254(h)(4) of the Communications Act of 1934, as amended, a library may not receive preferential treatment or rates (such as under the E-rate program) unless it is eligible for assistance from a State library administrative agency under the Library Services and Technology Act (“LSTA”). In 2018, the LSTA was amended to specifically include Tribal libraries as eligible for assistance from a State library administrative agency. The NPRM would propose to amend Sections 54.500 and 54.501(b)(1) of the FCC’s rules to clarify that Tribal libraries are eligible for E-rate support. The NPRM would also seek comment on other measures to enable Tribal schools and libraries to gain access to the E-rate program and ways to increase participation in the E-rate program.

Strengthening Security Review of Companies with Foreign Ownership - The Second Report and Order would adopt standardized national security and law enforcement questions (“Standard Questions”) to be answered by applicants with reportable foreign ownership as part of the Executive Branch review of certain applications filed with the FCC. The issuance of Standard Questions is the FCC’s final step in implementing several reforms to formalize and streamline the FCC and Executive Branch review process consistent with Executive Order No. 13913 (April 20, 2020), which established a Committee for the Assessment of Foreign Participation in the United State Telecommunications Sector (“Committee” (formerly known as Team Telecom)) and set forth procedures and timelines for the Committee to complete its review. The Second Report and Order would include Standard Questions for the following types of applications when reportable foreign ownership (generally a 5 percent or greater equity and/or voting interest (indirect or direct) in the applicant) is present: (1) applications for a new or modified International Section 214 authorization or submarine cable landing license; (2) applications for assignment or transfer of control of an International Section 214 authorization or a submarine cable landing license; and (3) petitions for a declaratory ruling to permit foreign ownership in a broadcast licensee, common carrier wireless licensee or common carrier earth station licensee that exceeds the benchmarks in Section 310(b) of the Communications Act. There would also be a supplement to each set of questions to provide personally identifiable information for individuals with a reportable ownership interest, non-U.S. individuals with access to the applicant’s facilities, corporate officers and directors, and a law enforcement point of contact.

The Connected Care Pilot was established in April 2020 to make up to $100 million in Universal Service Fund support available over three years for selected projects to defray costs for projects that will bring broadband connectivity and other connected care information services to eligible health care providers. The program is primarily aimed at supporting services that will benefit veterans and low-income patients. It is a longer term initiative than the short-term COVID-19 Telehealth Program designed to provide financial support for telehealth services, which are expected to remain in demand after the pandemic fully abates.

Second Report & Order

The Second Report and Order, which was released on June 21, 2021, builds on the administrative framework the FCC laid out when it established the Pilot Program and a September 2020 Public Notice that provided initial guidance to applicants. It specifically gives participants guidance on eligible services, funding rules and procedures, and data reporting requirements so they can begin their projects.

• Eligible Services – The FCC previously established that the Pilot Program will cover up to 85% of the costs for eligible services, which include patient broadband Internet access services, health care provider broadband data connections, connected care information services, and certain network equipment. Health care providers are required to cover the remaining 15% of the costs and any ineligible expenses. The Second Report & Order clarifies that the Pilot Program will reimburse network equipment purchases necessary to make already-available broadband services functional and to enable health care providers to make connected care information services functional, even if the Pilot Program is not directly supporting the costs of those services. The equipment must be purchased either because of an increase in Internet traffic caused by the connected care services or because the equipment would be primarily used for connected care information services. This approach is more expansive than the Rural Health Care Program’s reimbursement framework. Pilot Program funds cannot be used to support network deployment, internal connections, or connectivity between health care provider sites, and are also prohibited for end-user connected devices, medical equipment, health care provider administrative costs, personnel costs, and other expenses.
• Funding Rules and Procedures – The Pilot Program’s funding rules and procedures largely mirror those of the Rural HealthCare (“RHC”) Program. Participants need to follow the same competitive bidding rules for the services they are seeking to procure, including rules to ensure the bidding is fair and open and the requirement to select the most cost-effective option. Participants will also need to submit a Request for Funding to the Universal Service Administrative Company (“USAC”), which will evaluate service eligibility and issue a funding commitment decision. Just as with the RHC Program, Pilot Program participants will be able to make site and service substitutions. One notable difference is that the Pilot Program will not follow the typical July 1 to June 30 funding period, and participants will instead need to follow dates and deadlines provided by the FCC or USAC in correspondence or on their websites. The FCC also waived the procedural rule established in the First Report & Order that invoices be submitted monthly, which the agency thought might pose an undue administrative burden for some Pilot Program participants and would be difficult to enforce. Participants can only submit invoices for eligible expenses incurred within three years from the date their projects first begin service and no later than June 30, 2025.
• Data Reporting Requirements – Pilot programs established by the FCC often become permanent if they are successful, and as part of the Connected Care Pilot Program, the FCC will study how connected care can become a permanent part of the Universal Service Fund. To this end, the FCC established three goals for the Pilot Program—determining how USF support can be used to: (1) improve health outcomes through connected care; (2) reduce health care costs for patients, facilities, and the health care system; and (3) support the trend towards connected care everywhere. To help evaluate the Pilot Program, the Second Report & Order directs participants to submit three annual reports to the FCC with anonymized, aggregated data. The final report must summarize final results and include explanations of whether the goals of the participant’s project were met and how the project served the FCC’s Pilot Program goals. The FCC’s Wireline Bureau will use the data to prepare a final report at the conclusion of the Pilot Program.

The Connected Care Program is open to eligible rural non-profit and public health care providers and such non-rural providers that are part of a consortium, including post-secondary educational institutions, community health centers, local health departments or agencies, community mental health centers, not-for-profit hospitals, rural health clinics, skilled nursing facilities, and consortia of health care providers consisting of one or more of these entities.

From the over 200 Pilot Program applications the FCC received, it has so far awarded over $57 million in funding for 59 pilot projects in 30 states plus Washington, DC, leaving nearly $43 million for future project selections. The FCC announced its initial set of 14 projects, awarding $26.5 million in support, on January 15, 2021, and the second set of 36 projects, requesting $31 million in support, on June 17, 2021. It has prioritized projects that will serve a high number of patients in the veteran and low-income populations, serve areas most in need of support for connected care, treat many of the health conditions targeted by the program, and use products and services eligible for support.

At the FCC Open Meeting on June 17, 2021, the FCC took its most visible step yet toward Acting Chairwoman Rosenworcel’s vision. The Commission adopted a Notice of Proposed Rulemaking (“NPRM”) and Notice of Inquiry (“NOI”) to further address national security threats to communications networks and the supply chain. The NPRM and NOI sets its sights on the Commission’s rules relating to equipment authorization and competitive bidding. The Commission’s proposals have seeds of a much broader focus on Internet of Things (“IoT”) devices, cybersecurity and RF fingerprinting, to name a few. All participants in the telecommunications ecosystem should take notice.

The NPRM and NOI initiates an inquiry into many proposals to tighten the focus on network security in FCC procedures. Most notably, the Commission opened inquiry into the following areas:

Equipment Authorization Rules and Procedures – The NPRM seeks comment on a proposal to prohibit all future authorizations of equipment on the Covered List under the Secure and Trusted Communications Networks Act of 2019, including equipment subject to the FCC’s certification and Supplier’s Declaration of Conformity processes associated with equipment authorization. This proposal goes beyond the current rules, which prohibit recipients of Universal Service Program funding to use that funding to purchase, lease or maintain equipment on the Covered List.

Under current rules, despite the USF program prohibition, equipment on the Covered List can still obtain equipment authorization (and has already obtained authorization). The NPRM considers whether to revise the rules to ensure that any “covered” equipment cannot qualify for authorization. It also seeks comment on whether to revoke authorizations that were previously granted for equipment on the Covered List. If approved, the FCC seeks to determine which authorizations should be revoked and through what procedures.

Competitive Bidding Certification – The NPRM also seeks comment on a proposal to require applicants who wish to participate in FCC auctions to certify that their bids do not and will not rely on financial support from any entity that the FCC has designated under Section 54.9 of the FCC’s rules as a national security threat to the integrity of communications networks or the communications supply chain. The certification would require applicants to attest that no equipment (including component part) is comprised of any “covered” equipment, as identified on the current published list of “covered” equipment and would cross-reference section 1.50002 of the FCC’s rules that include the Covered List.

Manufacturing Encouragement Efforts – The NOI portion of the FCC document seeks comment on how the FCC can leverage its equipment authorization program to encourage manufacturers who are building devices that will connect to U.S. networks to consider cybersecurity standards and guidelines. The FCC inquires further about how to address security risks associated with IoT devices. Importantly, as we theorized a while back, the FCC notes the work that the National Institute of Standards and Technology (“NIST”) has done on cybersecurity and, in particular, cybersecurity for IoT devices, and asks whether the FCC’s equipment authorization rules should require manufacturers to certify in equipment authorization applications that they have considered this guidance in the design and manufacturing of their devices. The NOI also includes questions regarding the use of “RF fingerprinting” to help identify and isolate insecure devices.

Commissioner Statements

As expected, the NPRM and NOI received unanimous support from the Commissioners. Acting Chairwoman Rosenworcel cited to the rash of ransomware attacks and emphasized the need for broader cybersecurity considerations of IoT. “We need to acknowledge that the equipment that connects to our networks is just as consequential for our national security as the equipment that goes into our networks,” she said. Commissioner Carr discussed the possibility of Chinese interference with missile defense systems in North Dakota and referred to this proceeding as “closing a loophole” in FCC rules. Commissioner Starks, a former staff member in the Enforcement Bureau, emphasized changes intended to make enforcement against foreign actors easier to implement, citing examples from the past decade involving illegal jamming equipment manufactured overseas. Commissioner Simington took credit for adding “RF fingerprinting” to the NOI, stating that the technology “can play a central role in interdiction and enforcement of hacking and cyber-crime.”

With this proposal’s broad support at the Commission, equipment manufacturers (including IoT device manufacturers should pay close attention to the FCC’s actions. Comments will be received over the summer and the Commission could address its rules by year-end. Affected manufacturers may wish to comment in the proceeding.

You will find more information about the most significant items on the June meeting agenda after the break:

Securing the Communications Supply Chain – The NPRM and NOI would seek comment on a proposal to prohibit all future authorizations for equipment on the FCC’s Covered List under the Secure and Trusted Communications Act. The NPRM would seek comment on whether, and how, the FCC should revoke any current authorizations for equipment included on the Covered List, and if it should revise the rules to no longer permit exceptions for equipment authorizations on the Covered List. It would also propose to require participants in any upcoming FCC auctions to certify that their auction bids do not and will not rely on financial support from any entity that the agency has designated as a national security threat to the communications supply chain. The NOI would seek comment on how the FCC can leverage its equipment authorization program to encourage manufacturers to consider cybersecurity standards and guidelines when building devices that will connect to U.S. networks.

Modernizing Equipment Marketing and Importation – The Report and Order would adopt changes to the equipment authorization rules to allow expanded marketing and importation of radiofrequency (“RF”) devices prior to certification, with conditions. The Order would add a new condition to allow importation of up to 12,000 RF devices for certain pre-sale activities prior to authorization. It would additionally amend the FCC’s rules to allow conditional sales of RF devices prior to authorization, so long as those devices will not be delivered to consumers until they are authorized. The Order includes labeling, recordkeeping, and other conditions to ensure that RF devices are not sold or operated prior to equipment authorization.

Improving Emergency Alert Systems – The Report and Order and FNPRM would adopt the rule changes proposed in the FCC’s March 2021 NPRM to update the EAS and WEA systems rules, pursuant with the 2021 National Defense Authorization Act (“NDAA”) requirements. The Order would create a new category of non-optional “National Alerts,” combining WEA Presidential Alerts with FEMA Administrator Alerts, which may be nationally or regionally distributed. States would be encouraged to establish a state EAS plan checklist for State Emergency Communications Committees (“SECCs”), or otherwise establish an SECC if not already formed. This Report and Order would also enable FEMA to report false EAS and WEA alerts and to repeat certain EAS messages if necessary. The FNPRM would seek comment on whether to remove or refine certain EAS emergency event codes that are irrelevant or confusing, and on whether to update the EAS to include a more persistent display and notification of emergency messages for more severe events.

Implementing the TRACED Act – The Report and Order would establish rules pursuant to the TRACED Act to create a process that streamlines the ways in which a private entity may report robocalls or spoofed caller ID to the FCC. The Commission would create on online portal where private entities, meaning any entity other than an individual person or public entity, could submit suspected violations directly to the Enforcement Bureau. The Order clarifies that the new portal would not affect the existing consumer complaint process, and the agency will still use the consumer complaint portal for individual consumer complaints.

Connected Care Pilot Program – The Second Report and Order offers further guidance on the Commission’s Connected Care Pilot Program, including on the Pilot Program budget and administration, eligible services, competitive bidding instructions, invoicing, and data reporting for selected participants. Notably, the Order clarifies that the Pilot Program will reimburse network equipment purchases necessary to make both broadband and connected care information services functional, even if the Pilot Program is not directly supporting the costs of those services. The FCC announced earlier this year that an initial 23 applicants had been selected, with more selected applications to be announced at a later date, and selected applicants could begin the funding request process once this Report and Order becomes effective.

You will find more details about these items on the May meeting agenda after the break.

Reducing Interstate Rates and Charges for Incarcerated People – The Third Report and Order, Order on Reconsideration, and Fifth FNPRM all have different purposes related to reducing the telephone service rates for inmate phone calls. The Third Report and Order would lower the interstate interim rate caps to $0.12 per minute for prisons and $0.14 per minute for jails with populations of 1,000 or more. It would permit an additional allowance of $0.02 for negotiated site commission payments, and eliminate the separate interstate collect calling rate cap. The Report and Order would cap international calling rates, change ancillary service charge rules for third-party financial transaction fees, and adopt a new mandatory data collection to gather data and set permanent rates. The Report and Order would also reaffirm providers’ obligations regarding access for incarcerated people with disabilities. The Order on Reconsideration would reaffirm the FCC’s findings in the 2020 Inmate Calling Services Order that the jurisdictional nature of a telephone call for purposes of charging consumers depends on the physical location of the originating and terminating endpoints of the call. The FNPRM seeks comment on the provision of communications services to incarcerated individuals with disabilities, permanent interstate and international rate caps, and reforms to site commission payments and rules regarding ancillary service charges.

Strengthening Support for Video Relay Service – The NPRM suggests a continued use of a tiered rate structure for the next VRS compensation plan. It also seeks comment on whether to adjust tiered rate levels, bring average provider compensation closer to allowable costs, or defer rate changes for two years while waiting for a resolution of uncertainty about post-pandemic changes in VRS costs and demands. The Order would extend current VRS compensation rates through December 31, 2021, or the effective date of compensation rates adopted by the NPRM, whichever is earlier.

Shortening STIR/SHAKEN Extension for Small Providers Likely to Originate Robocalls – The Third FNPRM proposes to shorten the extension for small voice service providers that are most likely to originate illegal robocalls. These small providers would have to implement STIR/SHAKEN in the IP portions of their networks by June 30, 2022—shortening the extension by one year. The FNPRM seeks comment regarding the best methods to identify and define the small voice service providers that are at a heightened risk or originating an especially large amount of illegal robocall traffic. It proposes three measures to identify such providers that would be subject to a shortened implementation deadline:

• small voice service providers that originate more than 500 calls per day for any single line in the normal course of business;
• small voice service providers that receive more than half their revenue from customers purchasing services that are not mass market services; or
• small voice service providers that offer certain service features to customers commonly used for unlawful robocalls, such as the ability to display any number in the called party’s caller ID, or to upload and broadcast a prerecorded message.

Section 214 Petition for Partial Reconsideration for Mixed USF Support Companies – The Order on Reconsideration addresses a request related to a transaction involving a Section 214 transfer of control. The Order would grant the petition and exclude the petitioner from the mixed support condition because the cost shifting harm that the mixed support condition was designated to address is not present in the current case. The Order would also reaffirm the FCC’s delegation of authority to the Wireline Competition Bureau to continue applying the mixed merger condition where it is deemed necessary to remedy a potential public interest harm.

With these rules, the FCC sets in motion a process for schools and libraries to receive funding for 100% of purchases to provide remote learning and remote library services during the pandemic. This fund will be a significant one-time opportunity for applicants and service providers and is expected to see high demand for funding.

The Report and Order adopted by the FCC establishes the rules and policies that govern the ECP Fund. The FCC designated the Universal Service Administrative Company (“USAC”) as the program administrator. Schools and libraries that are eligible for support under the E-Rate Program are also eligible to request and receive support through the ECF Program.

Funding Window for School Year 2021-22 Purchases Prioritized

In a change from the draft order previously released by the Commission, the Report and Order prioritizes purchases to be used for providing remote learning and remote library services in the next school year (starting July 1). USAC will open a 45-day ECF Program filing window for purchases for the upcoming year. A date for this window has not been set, but FCC Chairwoman Jessica Rosenworcel said she expects it to open in early June.

The filing window will be available for purchases for use during the period from July 1, 2021 through June 30, 2022. Due to the emergency nature of this program, the FCC does not require competitive bidding for eligible purchases (like is required under the E-Rate program). However, it sets a cap for eligible equipment reimbursement of $400 for laptops and connected devices and $250 for Wi-Fi hotspots. For other eligible equipment (modems, routers and devices that combine the two), the FCC did not set a maximum reimbursement but delegated to the Wireline Bureau to provide guidance on reasonable expenses. The FCC similarly did not set a maximum reimbursement for “advanced communications services” but tasked the Bureau and USAC to identify “outliers” beyond an expected $10 to $25 monthly cost per month. The ECF will not fund self-provisioning or the construction of new networks, except in the case where it is demonstrated that no commercial service is available to the area.

Moreover, the FCC sets per-location and per-user limitations on the availability of funding. Reimbursement may be sought only for one fixed broadband service per location, one connected device per user and one Wi-Fi hotspot per user. In addition, the FCC clarified that Wi-Fi hotspots on school buses and bookmobiles are eligible for reimbursement under the ECF.

Funding is limited to uses made primarily for “educational purposes.” To ensure that devices and services are used primarily for educational purposes, the FCC requires schools and libraries to restrict access to users with appropriate credentials (i.e., a student ID or library card). Schools will be required to certify that they are only that they are only seeking support for eligible equipment provided to students and school staff who lacked access to connected devices sufficient to engage in remote learning. The FCC will also require schools to certify that they are only seeking support for eligible services provided to students and school staff who lacked broadband services sufficient to engage in remote learning. “Staff” includes only those staff members engaging in remote teaching or otherwise providing educational services to students (and would otherwise lack access to connected devices and broadband connections).

Prior Purchases

If funding is available after the initial filing window for 2021-22 purchases, the FCC will open a window for funding of purchase already made by schools or libraries to provide remote connectivity. Specifically, this filing window would cover purchases made by applicants between March 1, 2020 (when most jurisdictions closed schools during the pandemic) and June 30, 2021. USAC and the Bureau will announce when this window will open (assuming funding remains available).

As previously mentioned, the application window has not been announced, but we will monitor and relay updates on the ECF Program as they arise.

As with Round 1, this opportunity provides up to $1 million per application for equipment and services used for pandemic-related telehealth purposes. Specifically, the funding can be used “to support efforts of healthcare providers to address coronavirus by providing telecommunications services, information services, and devices necessary to enable the provision of telehealth services.” But there are three major differences this time:

1. Applications will be reviewed as a group, rather than on a rolling basis, as they were in Round 1. The FCC has established the filing window for applications to run between 12PM ET on Thursday, April 29 through 12PM ET on Thursday, May 6. All applications must be submitted by the close of this filing window and will be evaluated based on the FCC’s criteria.
2. The second major difference is that the FCC will be using the Universal Service Administrative Company (“USAC”), which administers other FCC funding programs, to evaluate applications. USAC evaluates the FCC’s Rural Health Care Program and will be bringing that expertise to this process
3. Finally, the FCC has provided more detailed criteria for evaluating applications, with the goals of prioritizing certain types of applications and fair geographic distribution.

• File Form 460 with USAC to confirm the that the application’s lead site is eligible for the program
• Register with the federal portal for payments, the System for Award Management

Click here to read the April issue of our USF Tracker for more information on the EBBP and related programs.

This event will examine the pandemic’s impact on how we think about the digital divide and digital inequality, the new administration’s approach, and related activity in Congress, at the FCC, and at other federal agencies.

Agenda Introduction & Opening Remarks

• Amie Stepanovich, Executive Director, Silicon Flatirons

• Ron Wyden, U.S. Senator for Oregon

• John J. Heitmann (Moderator), Partner, Kelley Drye & Warren LLP
• Kate Black, Acting Chief Policy Advisor, Federal Communications Commission
• Jose Cortes, Chair, Regulatory and Government Affairs Committee, National Lifeline Association
• Claire Park, Policy Program Associate, New America's Open Technology Institute
• Trinity Thorpe-Lubneuski, Senior Director, Internet Essentials, Comcast

Kelley Drye’s Communications group regularly monitors issues related to closing the Digital Divide and enabling connected life. Follow us for future updates:

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12th Annual USF Update Webinar On March 22, 2021 Kelley Drye’s Communications practice presented our annual webinar discussing the state of the federal Universal Service Fund. This webinar, back for its 12th year, provided an in-depth look at all four USF programs and the USF contribution mechanism, highlighting major developments in the last year and trends for the upcoming year. In addition, this year we discussed how the ongoing pandemic has influenced the importance of the USF and related policy decisions.

Click here to access the recording and here to access the slide deck. Click here for our 2020 USF Yearbook.

The new Emergency Connectivity Fund (“ECF”) will reimburse schools and libraries for internet access and connected devices for students and teachers for remote learning and remote library services. The passage of this legislation has been welcomed by the FCC, with Chairwoman Rosenworcel stating, “the American Rescue Plan provides the FCC with new tools to support the millions of students locked out of the digital classroom.”

The legislation requires the FCC to issue rules within 60 days of enactment to provide funding to eligible schools and libraries. Here’s a look at what to expect in the new fund.

Emergency Connectivity Fund Overview

The ECF provides support for the purchase during the COVID-19 emergency of “eligible equipment or advanced telecommunications or information services (or both)” to provide:

• For schools, for use by schools, students and staff outside the school building; and
• For libraries, for use by patrons outside the library location.

The Act provides funding for 100% of costs associated with the eligible equipment, as well as telecommunications and information services. However, funding may not exceed an amount that the FCC determines to be reasonable. Notably, funding is in addition to, and separate from, funding under the FCC’s E-rate program. The Commission received comment in February on three proposals to permit use of E-rate funds to provide off-campus broadband services, but those proposals likely have been usurped by the ECF.

Funding is available during the COVID-19 emergency, and until the June 30th following the date on which the federal government lifts the COVID-19 emergency declaration.

The FCC is required to issue regulations within 60 days of enactment to provide funding to eligible schools and libraries. We expect a public notice to be issued in the coming days. We will, of course, continue to follow development in this important new program.

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.

On the universal service front, the principal activity surprisingly has as much to do with non-Universal Service Fund (“USF”) programs as with the USF itself. The USF is a $9 billion-per-year fund with four primary programs aimed at different elements of the challenge to bring broadband telecommunications to all. For 25 years, the Fund has aimed to provide support to increase broadband availability in rural areas, in schools and libraries, among low-income consumers and to serve rural healthcare needs. These programs all have been modified significantly in the last ten years to re-focus on broadband services and de-emphasize (but not completely eliminate) support for voice services. The FCC also has focused on ensuring that these programs are run efficiently while protecting against waste, fraud and abuse by actors with mal intent. In 2020 and early 2021, we’ve discussed efforts to establish a new Connected Care pilot program, to waive rules during the pandemic and to implement a Rural Digital Opportunity Fund.

Separately, as the USF contribution factor continues to reach new and staggering heights, attention is again returning to the idea of USF contributions reform. With the contribution factor expected to top 33% in the next quarter, Acting Chairwoman Rosenworcel pledged to Senators Thune and Wicker to work with Congress “to explore how to improve [the contributions] system” in the coming months. We’ll have more on contributions reform in a future blog post.

Special Programs Dwarf the USF

But the big news of 2021 is turning out to be the additional funding that is being provided outside the traditional fund. In legislation since December, Congress has authorized four programs that affect USF beneficiaries, to the tune of over $13 billion.

• In the Consolidated Appropriations Act (“CAA”), Congress authorized a second Telehealth Fund to provide reimbursement for services and equipment used to provide telehealth services during the COVID pandemic. The Telehealth II fund provides $249.95 million in new funding for this program. The FCC already has designated USAC to administer the new fund and promises to adopt criteria for USAC to use in evaluating applications soon.
• Also in December, Congress authorized an Emergency Broadband Benefit of up to $50 per month for services and a one-time benefit of $100 for a qualifying computer, laptop or tablet for low-income consumers during the pandemic. (For tribal subscribers, the benefit is $75 per month). A total of $3.2 Billion is appropriated for this emergency fund. Importantly, the program is open to providers that do not currently participate in the USF programs, expanding access to the funding. The FCC recently adopted rules for the program and you can read our summary here. The program is expected to begin sometime in April.
• Congress recently approved an additional $7.1 Billion over several years for E-rate support for remote learning and remote library services. The legislation authorizes funding for the purchase of eligible equipment, advanced telecommunications services and/or information services used to support education of students at locations other than the school and to support delivery of library services at locations other than the library. This fund will reimburse 100% of the cost of the equipment or services, up to the amount the FCC determines is reasonable. Funding remains available until the June 30th that is one year after the COVID-19 public health emergency order is terminated. The FCC will have 60 days to establish rules for this program.
• Finally, although not related to the COVID emergency, Congress recently appropriated $1.9 Billion to fund the removal and replacement of telecommunications equipment that is deemed to present a national security threat. The FCC has been developing this so-called “Rip and Replace” program for over a year, contingent on the appropriation of funds, after determining in November 2019 to prohibit recipients of federal USF funding to purchase, install or maintain prohibited equipment. The FCC most recently adopted a Further Notice of Proposed Rulemaking to align its reimbursement priorities with the implementing legislation.

To stay up-to-date on these and other USF developments, join us on March 22, 2021 for our annual webinar discussing the state of the federal Universal Service Fund. This webinar, back for its 12th year, provides an in-depth look at all four USF programs and the USF contribution mechanism, highlighting major developments in the last year and trends for the upcoming year. In addition, this year we will discuss how the ongoing pandemic has influenced the importance of the USF and related policy decisions.

This webinar supplements the knowledge our clients gain from the monthly USF Tracker to provide context and analysis of the issues you need to know.

The 12th Annual Update will address the following, among other topics:

• The COVID-19 Telehealth Program
• The Connected Care Pilot and Rural Healthcare Program
• Lifeline and the Emergency Broadband Benefit Program
• E-Rate Outside the Classroom
• The Rural Digital Opportunity Fund and Broadband Mapping
• Rip and Replace
• Contributions Reform

EBB Program Overview

The EBB Program was authorized by Section 904 of the CAA, which was designed to provide affordable broadband services to low-income households on an emergency basis. Congress allocated $3.2 billion to the EBB Program to reimburse participating providers for providing discounts on qualifying internet service offerings to qualifying low-income households. The EBB Program will provide discounts of up to $50 per month ($75 for residents of Tribal lands) to subsidize broadband services for eligible households. Eligible consumers can also receive a one-time discount of up to $100 for a desktop or laptop computer, or tablet (no smartphones) supplied by a participating provider. The EBB benefit is limited to one monthly service discount and one device discount per eligible household. To qualify for the EBB program, households must prove that at least one member of their household meets one of the following criteria:

• qualifies for the FCC’s Lifeline program (including those who are receiving Medicaid or SNAP benefits);
• approved for the free or reduced-price school lunch program (including through the USDA Community Eligibility Provision);
• experienced substantial and documented loss of income since February 29, 2020 and the household had a total income in 2020 below $99,000 for single filers and $198,000 for joint filers;
• received a federal Pell Grant in the current award year; or
• qualifies for a participating provider’s existing low-income or COVID relief program (subject to FCC approval of that provider’s eligibility process).

Next Steps

The Order includes many specifics for the implementation of the EBB Program, but also delegates liberally to the Wireline Competition Bureau (“Bureau”) for additional details and processes. On Thursday, March 4, the Bureau issued additional guidance on the timeline for participating provider elections and applications. ETCs are automatically eligible as participating providers in the EBB Program and therefore need only submit an election to participate. The inbox for election notices will open on March 11, 2021. Non-ETC broadband providers that had existing low-income support programs as of April 1, 2020 can apply to be participating providers and will be automatically approved by providing certain information. Non-ETCs without such programs can also apply to be participating providers, but must submit an application to the Bureau for approval before they can elect to participate. The application window opened on March 8, 2021 and all application submitted by March 22, 2021 will be reviewed and acted on by the EBB service commencement date. Applications submitted after March 22 will be reviewed on a rolling basis.

For service providers to be eligible, they must file an election notice to the Universal Service Administrative Company (“USAC”), and non-ETCs must submit an application for either automatic or expedited approval by the Bureau.

Existing ETCs:

Existing ETCs need only submit an election notice to USAC. The following information must be included in election notices:

• a list of states in which the provider plans to participate in the EBB Program;
• a statement that, in each of the listed states, the provider is a “broadband provider” as of December 1, 2020;
• a statement identifying where the provider is an existing ETC;
• a statement identifying where the provider received FCC approval to participate in the EBB Program (this is primarily for providers that are seeking approvals outside of states where they are existing ETCs);
• a statement confirming whether the provider intends to distribute connected devices under the EBB Program; and
• a description and documentation of the Internet service offerings for which the provider plans to seek reimbursement from the EBB Program in each state.

Non-ETCs must file an application with the Wireline Competition Bureau (“Bureau”) that must be approved to participate in the EBB Program. Non-ETCs with an existing low-income support program must file an application describing:

• the jurisdictions in which it plans to participate,
• the service areas in which the provider has the authority, if needed, to operate in each state, and
• a description, supported by documentation, of the established program with which the provider seeks to qualify for automatic admission to the EBB Program.

Non-ETCs without pre-existing low-income support programs must first submit an application for Bureau approval describing:

• the states in which it plans to participate,
• the service areas in which the provider has the authority, if needed, to operate in each state but has not been designated as an ETC, and
• documentation of the provider’s plan to combat waste, fraud, and abuse.

The FCC has set the expectation that the EBB Program will begin within 60 days of the adoption of the Order. Therefore, participation providers should start providing EBB discounted services by the end of April. For more information on the EBB and related programs, join us on March 22, 2021 for Kelley Drye’s annual webinar discussing the state of the federal Universal Service Fund ("USF"). This year will feature segments on how the ongoing pandemic has influenced the importance of the USF and related policy decisions.

The December meeting may be the first attended by recently-confirmed Republican FCC Commissioner Nathan Simington, who will replace outgoing Commissioner Michael O’Rielly after today’s confirmation vote in the U.S. Senate. In addition, Chairman Pai recently announced that he intends to leave the FCC on Inauguration Day, January 20, 2021. As a result, the January 2021 FCC open meeting will be his last meeting before the change in administration.

You will find more details about the most significant items on the December meeting agenda after the break.

Securing the Communications Supply Chain – The draft Report and Order would require ETCs receiving Universal Service Fund support to remove and replace covered equipment and services posing a national security risk from their networks. It would also establish a reimbursement program to subsidize smaller carriers to remove and replace covered equipment, specifically those providers with two million or fewer customers, once Congress appropriates the estimated $1.6 billion needed to reimburse eligible providers for such costs. The draft Order would establish the procedures and criteria for publishing a list of covered communications equipment or services, and would adopt a reporting requirement for all providers of advanced communications services to annually report on covered equipment and services in their networks.

Modernizing Equipment Marketing and Importation Rules – The draft NPRM would propose updates to the Commission’s marketing and importation rules under its equipment authorization program. The proposed rules would permit, prior to equipment authorization, conditional sales of radiofrequency devices to consumers under certain circumstances. The NPRM also would propose to allow a limited number of radiofrequency devices subject to Certification to be imported into the U.S. prior to equipment authorization for certain pre-sale activities, including packaging and shipping devices, and loading devices with specific software.

TCPA Order on Reconsideration – The draft Order on Reconsideration would clarify the Commission’s previous interpretation of the TCPA that permitted government and government contractor calls without consumers’ prior express consent. The draft item would address long-standing questions regarding a 2016 Declaratory Ruling that first set guardrails on the government and government contractor exemption. The draft text of this item has not been publicly released.

Modernizing the E-Rate Program – The draft Order would amend the E-Rate invoice filing deadline rule to ensure program participants have sufficient time to complete the invoice payment process. Specifically, the Order would address situations where USAC issues a revised E-Rate funding commitment letter, in which case the FCC will allow recipients additional time to complete the work identified in the revised funding commitment. The draft text of this item has not been publicly released.

The Connected Care Program, adopted in the Connected Care Program Order, will make available up to $100 million dollars over a three year period for selected pilot projects. The Program will provide financial support for qualifying purchases necessary to provide connected care services through the Connected Care Program, with an emphasis on providing connected care services to low-income and veteran patients. While the CARES Act allowed the Commission to quickly implement the short-term COVID-19 Telehealth Program during the early stages of the pandemic, the Connected Care Program is a longer term initiative to provide financial support for telehealth services. The Connected Care Program is open to eligible non-profit or public health care providers (“HCPs”) under the Commission’s rules. Eligible HCPs include post-secondary educational institutions, community health centers, local health departments or agencies, community mental health centers, not-for-profit hospitals, rural health clinics, skilled nursing facilities, and consortia of health care providers consisting of one or more of these entities. These providers can be located in either rural or non-rural areas, and eligible non-rural health care providers are not required to be part of a majority rural consortium.

Selected pilot projects will receive universal service support to offset 85% of the qualifying costs incurred in connection with the Connected Care Program, while the remaining 15% share of the eligible services costs and ineligible expenses are to be paid by the recipients. Specifically, eligible service costs include: (1) patient Broadband Internet access services; (2) health care provider broadband data connections; (3) connected care information services; and (4) certain network equipment (i.e., network equipment necessary to make supported broadband service functional). The Public Notice provides an extensive list of specific examples of types of items and services that are eligible for support.

The Public Notice details the application instructions for filing and reminds applicants that in order to file an application, they must have an approved FCC Form 460 (Eligibility and Registration Form) on file. Additionally, the Commission reminds applicants that all sites included in an application must each be approved as eligible. The Commission encourages interested parties to submit applications as soon as possible after the window opens, as applications will be considered on a rolling basis. Applications will be accepted through an online application system available on the USAC website. Applications submitted after the deadline, however, will not be considered. Following the close of the window, timely filed applications will be made publicly available in ECFS under Docket No. WC 18-213.

Kelly Drye will continue to monitor the Connected Care Program proceeding, so continue to check back for updates.

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.

Following are a few Connected Care Program highlights. HCPs interested in participating in the Connected Care Program and service providers seeking to supply services or network equipment to HCPs should be sure to read the Commission’s Connected Care Program Order and Frequently Asked Questions for more details.

Who can participate? Non-profit and public HCPs, including those in rural and non-rural locations, that meet the statutory definition of “health care provider” in the Telecommunications Act of 1996 may apply to participate in the Connected Care Program. The Commission retained its previous conclusion that “dedicated emergency rooms of rural for-profit hospitals” come within the category of rural health clinics and public health care providers and, therefore, qualify for participation in the Connected Care Program.

How can funds be used? Connected Care Program funding can be used to cover up to 85% of the costs for eligible equipment and services. HCPs should take note that the Commission is focused on supporting connected care services provided to veterans and low-income patients. Connected Care Program funding can be used for (i) patient broadband internet access, (ii) HCP broadband data connections, (iii) certain network equipment, and (iv) connected care information services. The Connected Care Program funds cannot be used to support end user devices, medical equipment, network deployment, or construction of networks between HCPs, among other things (i.e., this is not an exhaustive list).

How are services procured? Subject to some limited exemptions, HCPs must use the FCC’s Rural Health Care (“RHC”) program’s competitive bidding process when identifying providers for eligible services and network equipment. The exemptions cover circumstances such as contracts of less than one year, or voluntary extension of multiyear contracts deemed by USAC to be in “evergreen status”. HCPs selected for Connected Care Program support will receive funding commitments and the Commission will issue payments directly to the eligible services and network equipment service providers.

How can HCPs apply? The FCC has not yet issued a final version of the Connected Care Program application requirements but the Public Notice identifies information anticipated to be required in applications to assist HCPs “in preparing to apply” for the Connected Care Program. In a process that will be familiar to HCPs that participated in the COVID-19 Telehealth Program, HCPs seeking to participate in the Connected Care Program must complete procedural prerequisites, including obtaining HCP numbers and a Universal Service Administrative Company (“USAC”) eligibility determination, in addition to developing a comprehensive pilot program plan. Eligible HCPs that that received USAC eligibility determinations to participate in the COVID-19 Telehealth Program or the RHC Program can rely on those existing USAC determinations. The Public Notice identifies several categories of information that applicants must address, including detailed discussions of conditions to be treated, proposed monitoring metrics, the HCP’s telehealth experience, and information about the patient population and geographic areas to be served, among other information categories. Several of the information categories appear to be similar to those required for the COVID-19 Telehealth Program such that a HCP’s experience with the COVID-19 Telehealth Program application may aid the HCP in crafting a strong application. Although the Commission’s Public Notice details information required for the Connected Care Program application, the Commission also notes that the final application may vary such as in terms of wording or formatting so HCPs should be sure to review final application information once issued.

If you have any urgent questions, please contact your usual Kelley Drye attorney or any member of the Communications Practice Group. For more information on other aspects of the federal and state response to the COVID-19 pandemic, as well as labor and employment and other issues, please visit Kelley Drye’s COVID-19 Response Resource Center.

FCC Extends Telehealth Purchase and Implementation Deadline

On September 28, 2020, the FCC’s Wireline Competition Bureau (“WCB”) extended the deadline for COVID-19 Telehealth Program funding recipients to purchase eligible devices and implement eligible services. The Public Notice extended the deadline from September 30, 2020 to December 31, 2020. Since the start of Program funding on April 16, the FCC approved 539 applications in 47 states plus Washington, D.C. and Guam for a total of $200 million in funding — the amount of money appropriated by Congress for the Program in the CARES Act. There are no immediate plans to provide additional funding for the Program.

FCC Grants Three COVID-19-Related Waiver Requests

On September 30, 2020 the WCB granted several requests for review, requests for waiver, and petitions for reconsideration of decisions related to actions taken by the Universal Service Administrative Company (“USAC”), including three related to the COVID-19 pandemic. The Public Notice granted two requests for waiver of a filing deadline due to COVID-19 and one request for waiver of a 499-Q revision deadline due to COVID-19. In each case, the filer claimed that COVID-19 related shutdowns caused the filer to miss the filing deadline or to file an incorrect form. The Bureau cited to an order granting waivers of the filing deadlines in areas impacted by hurricanes Harvey, Irma and Maria in 2017.

• The background of the RDOF and how it relates to Connect America Fund Phase II;
• How the RDOF works (budget, eligible areas, support awarded, deployment);
• The two-stage RDOF application process;
• Unresolved issues and potential pitfalls in RDOF; and
• Considerations and recommendations for RDOF participants.

This event builds on our annual Universal Service Fund webinar and ongoing coverage of the FCC’s efforts to close the “digital divide” between rural and urban areas.

Comments on the Second FNPRM are due by August 31, 2020 and reply comments are due by September 14, 2020.

FCC Declares Compliance with Secure Networks Act’s Federal Funding Prohibition Mandate

Mirroring the Commission’s November 2019 Supply Chain Protection Order in many respects, the Secure Networks Act, enacted in March 2020, seeks to protect the U.S. communications supply chain from equipment and services posing unacceptable national security risks. Among other mandates, Section 3 of the Secure Networks Act requires the Commission to adopt a Report and Order prohibiting federal funds, that are used for capital expenditures necessary to advanced communications services and made available in FCC-administered programs, from being used for certain services and equipment deemed to pose a national security threat. The Declaratory Ruling concluded that, although adopted prior to the Secure Networks Act, the Supply Chain Protection Order’s prohibition on the use of federal universal service funds (“USF”) for any equipment or service provided by a company posing a national security threat, was consistent with and “substantially implemented” the narrower prohibition, set forth in Section 3 of the Secure Networks Act.

Comments invited on FCC Proposed Interpretation and Implementation of the Secure Networks Act

Focusing on the Commission’s proposed implementation of Sections 2, 3, 5, and 7 of the Secure Networks Act, the Second FNPRM invites comment on issues that could significantly affect telecommunications providers and advanced communications service providers that receive federal funds. Among other issues, the Commission seeks comment on the following:

Definitions of Key Terms - The Commission proposes to define two key terms - “advanced communications services” and “communications services and equipment” - used in the Secure Networks Act. Under the Commission’s proposed definition, advanced communications services would use a “200 kbps in either direction” speed threshold to capture equipment that would not meet current advanced telecommunications capability speeds, such as the current 25 Mbps download/3 Mbps upload standard for fixed services, but nonetheless might pose a national security threat. In a proposal that the Commission describes as providing a bright-line rule for easy administration, “communications equipment and services” would be defined to include all of the services and equipment used in fixed and mobile broadband networks, provided they use or include electronic components.

Section 2 “Covered” Equipment and Services List – Section 2 of the Secure Networks Act requires the Commission to publish, for purposes of the federal funding usage prohibition, a list of “covered” communications equipment and services, that are deemed to present an unacceptable risk to national security (the “Covered List”). The Second FNPRM raises several questions regarding how to implement this mandate including, for example:

• Can executive branch agencies, such as Team Telecom or CFIUS, that are not specified in the Secure Networks Act, determine that equipment or service poses a national security risk (a “determination”)?
• What is the required level of specificity for determinations, e.g., must a determination identify equipment model numbers or would the mere identification of an equipment or service provider qualify as a determination?
• What process should the Commission use to permit interested parties to clarify if a specific communications equipment or service is or is not on the Covered List?
• Because the Commission interprets the Secure Networks Act as requiring that the Covered List be published without a public comment period, the Second FNPRM comment cycle may be of particular interest to entities that could be subject to the Covered List prohibitions.

Sections 5 and 7 Reporting and Enforcement – While they are important provisions, Sections 5 and 7 of the Secure Networks Act raise fewer implementation issues. Section 5 requires that advanced communications providers submit annual reports regarding any “purchased, rented, leased, or otherwise obtained” covered equipment and services and include a “detailed justification” for obtaining the equipment and service. The Second FNPRM solicits comment on what must be included in the detailed justification, the proposed report contents, and the confidentiality of such reports. Section 7 directs the FCC to treat violations of the Secure Networks Act and related regulations in the same manner as violations of the Communications Act and also requires federal funding recovery for violations. Noting that the Commission has existing enforcement regulations, the Second FNPRM proposes to adopt regulations addressing only the Section 7 fund recovery requirement and seeks comment on any additional clarifications necessary to enforce the requirement.

Next Steps

The Commission’s Supply Chain Protection proceeding has been and remains active with industry participants initially weighing in on the Commission’s USF spending prohibitions and more recently commenting on the information collection addressing anticipated costs for removing and replacing equipment deemed to pose a national security threat. The Second FNPRM is likely to trigger similar levels of interest as industry participants assess the potential impact of the additional issues related to implementing the Secure Networks Act. Although the Commission has some time to implement those requirements – for example the covered equipment and services list has a required publication date of March 12, 2021 – based on the importance of the issue and the likely significant coordination and logistics necessary to implement the Secure Networks Act requirements, we anticipate that the proceeding, and further Commission action, will progress fairly quickly.

We will continue to monitor the Commission’s Supply Chain Protection efforts. Please reach out to us or your usual Kelley Drye attorneys if you have any questions.