Universal Service reform: What it means for schools


Already, at least two groups have offered proposals that would further increase the benefits of the ABC Plan for schools, libraries, and other community anchor institutions. First, on June 29, the Schools, Health, and Libraries Broadband (SHLB) Coalition filed data with the FCC to argue that many institutions will need broadband with greater capacity than 4Mbps to fulfill their community missions. As a result, the SHLB Coalition proposed that the broadband speed supported by the CAF for community anchor institutions should increase over time to as much as 1Gbps, based on goals in the National Broadband Plan. In addition, on August 2, the Bill and Melinda Gates Foundation requested that approximately $450 million from the CAF be allocated each year to build fiber laterals to schools and libraries.

While the CAF and AMF, if enacted, would provide obvious benefits to broadband providers and community anchor institutions—such as schools and libraries—that purchase their services, both groups must take care to avoid duplication of federal funding that might create compliance violations.

First, potential CAF and AMF recipients already might receive support from BTOP, the Rural Utilities Service’s Broadband Initiatives Program (BIP), the RUS Broadband Loan Program, or other federal programs. Neither the ABC Plan nor the Google Plan explicitly states whether a recipient of such support would be eligible for CAF support.

If CAF or AMF support is available in areas served by recipients of BTOP, BIP, or other federal broadband grants, recipients that also obtain CAF or AMF support will need to maintain detailed financial records documenting compliance with the terms of each program. Specifically, they’ll need to be able to demonstrate that they have not received duplicate funding to construct the same facilities, and that they have not used federal Universal Service funding to satisfy the matching component of a BTOP, BIP, or similar grant award.

While neither NTIA nor RUS has explicitly ruled on the question, it is possible that the prohibition on using federal Universal Service funding as a matching contribution will extend to in-kind contributions of facilities previously constructed with CAF or AMF funds.

In addition, broadband providers—as well as schools and libraries that purchase their services—will need to carefully observe non-duplication of funding requirements. When it enacts rules governing the distribution of CAF and AMF funding, the FCC should address questions regarding whether broadband internet access supported by the CAF or AMF is eligible for e-Rate support as well. In addition, recipients of BTOP grant awards for public computer center (PCC) or sustainable broadband adoption (SBA) projects will need to ensure that they do not violate NTIA’s prohibitions on duplication of federal funding. While NTIA’s existing guidance does not address CAF or AMF support, it has stated that e-Rate support may not be used as matching funds for a PCC or SBA project. We expect NTIA would view CAF and AMF support similarly.

Low-Income Broadband Pilot Program

As with its high-cost universal service mechanisms, the FCC is working to reform its low-income support program to support the availability, affordability, and adoption of broadband service.

On Aug. 5, the FCC issued a Public Notice seeking comment on specific issues it will need to resolve to create a pilot program to support broadband adoption by low-income consumers. The FCC sought additional comment on (1) its legal authority in this area; (2) appropriate eligibility criteria for consumers (for example, based on level of income); (3) whether the FCC can require that pilot participants not be forced to change their voice service provider, purchase bundled broadband and voice services, or otherwise be penalize for the purchase of pilot low-income broadband services; and (4) what metrics to use to measure the results of the pilot projects, including whether a single pilot project should test multiple design elements to facilitate comparisons within its population of users, or whether each project should test a single set of design elements, and be compared to pilot projects operated by others.

This Public Notice builds on the FCC’s March 2011 Notice of Proposed Rulemaking on this subject. The record the FCC received this spring was generally favorable, and the FCC now appears to be in the process of working out the legal and operational details required to launch a series of pilot projects. Many broadband service providers—including those that already might serve schools, libraries, and other community anchor institutions—might be well-positioned to propose pilot projects that expand their missions to include low-income users.

Universal Service Reform for Schools and Libraries

The FCC already has made significant adjustments to the e-Rate program, and it has an ambitious slate of reforms still under consideration.

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