FCC to Distribute $10 Billion for Broadband Services

Congress has authorized, and the Federal Communications Commission ("FCC") is administering, two recent funds to ensure the availability of broadband services to those most in need during the continuing COVID-19 pandemic.  The two funds are stockpiled with billions of dollars of federal funding:

Emergency Connectivity Fund -- $7.1 billion

Emergency Broadband Benefit program - $3.2 billion

Each of the funds and associated programs for qualification and distribution of the federal dollars have (or will have) rules, restrictions, and requirements that qualifying providers (of either broadband services, equipment, or both) and qualifying consumers will be obligated to follow.  While the two programs may be short-term "gold rushes" for some service providers and their customers, others may realize that participation is important simply to avoid churn, as month-to-month customers could be lured away by participating service providers (this is a particular consideration in the mobile Wireless Broadband sector vis-a-vis the Emergency Broadband Benefit program).

The two funds/programs and their current status are detailed below.  Contact Christine McLaughlin at czm@commlawgroup.com or call 703-714-1328 if you seek additional information regarding each.

EMERGENCY CONNECTIVITY FUND

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 during the COVID-19 pandemic. The ECF will specifically fund the purchase of “eligible equipment,” “advanced telecommunications or information services,” or both. Eligible equipment includes Wi-Fi hotspots, modems, routers, gateways combining a modem and router into a single device, and connected devices. A connected device is defined as a “laptop computer, tablet computer or similar end-user device that is capable of connecting to advanced telecommunications and information services.”

Eligible equipment and services may be used by students, faculty, and staff outside the school building. In the case of libraries, they may be used by patrons outside the library location.

The Act authorizes funding for 100% of costs associated with eligible equipment and telecommunications and information services, subject to an important limitation. ECF support may not exceed an amount that the FCC will determine to be reasonable. Significantly, ECF funding will be separate from, and in addition to, funding under the Commission’s e-rate program, from which schools and libraries have benefited long before the pandemic.

ECF funding will remain available until June 30 following the date on which the federal government lifts the COVID-19 emergency declaration. The Act requires the FCC to promulgate implementing ECF regulations within 60 days of enactment. The FCC released a public notice seeking comment on ECF implementation on March 16^th, setting April 5^th as the deadline for comments and April 23^rd as the reply comment deadline.

EMERGENCY BROADBAND BENEFIT PROGRAM

The ECF is in addition to a previously-authorized fund, the Emergency Broadband Benefit (“EBB”) Program.  In the Consolidated Appropriations Act, 2021, Congress set aside a fund of $3.2 billion and directed the FCC to create the EBB to provide for discounts to low income households on certain broadband services and equipment.

The FCC adopted rules to implement the EBB Program in late February, and applications for interested service providers are being accepted now; the priority filing period ends on Monday, March 22^nd, but the FCC will still accept applications on process them on a rolling basis after that date.  Service providers who were making discounts or forbearance/forgiveness programs available to low income consumers on or before April 1, 2020 can be automatically approved if their programs meet certain criteria.  Providers who are already designated as “Eligible Telecommunications Carriers” under the FCC’s existing Lifeline program don’t need to apply, but can participate by filing an election form with USAC.

Under the EBB Program, eligible households can receive a discount from participating service providers of up to $50, or up to $75 for households on Tribal lands, off the monthly charges (exclusive of taxes, fees, etc.) on qualifying broadband Internet services.   In order to participate, the service provider must have been offering retail broadband Internet services to consumers as of December 1, 2020.  The services offered under the EBB must be offered on the same terms as they were offered as of December 1, 2020.  Broadband Internet is very broadly defined for EBB purposes, and the basic discount may also be applied to certain equipment – such as modems, routers, and hotspot devices and antennas that are “part and parcel” of an Internet service offering – if that equipment is billed monthly to the consumer.  In addition, each qualified household can receive one, deeply discounted desktop, laptop or tablet during the EBB Program.  As long as the household pays between $10 and $50 for the desktop, laptop or tablet, and has not received one under the Program previously, the service provider selling that device can receive reimbursement of up to $100 from the EBB Program.

The EBB is a temporary program, only in place during an “emergency period” that will end six months after the date on which the Secretary of Health and Human Services’ determination of a health emergency due to COVID-19 terminates – or earlier, if the funds run out.  At this time, there is no mechanism to fund the EBB Program once the $3.2 billion allocation is exhausted.

Companies wishing to participate in the EBB Program should note that it is a fairly detailed regulatory program.  It is distinct from and in addition to, the FCC’s Lifeline program, but it borrows heavily from Lifeline for its structure and administration.  Providers whose applications are approved by the FCC will need to file with USAC as well, and will generally need to use USAC systems to participate, including verifying customer eligibility and obtaining reimbursement.  The Program also imposes customer outreach and notice obligations and record retention requirements.

Interested service providers should review the EBB Program requirements carefully; both the FCC and USAC have set up informational pages on their websites.  Parties looking to participate in any FCC funding mechanism, including the ECF and the EBB Program, would also do well to consult with their legal counsel before proceeding.

If your company is interest in learning more about the ECF and/or EBB programs, determining whether you may qualify, and participation, implementation and compliance, please contact Christine McLaughlin at czm@commlawgroup.com or call 703-714-1328.