FCC Seeks Comment on USF Spending Cap NPRM

On May 31, 2019, the Commission released a Notice of Proposed Rulemaking (“NPRM”) seeking comment on establishing a cap on the Universal Service Fund (“USF”) and on ways to evaluate the aspects of the four USF programs in a more holistic way (WC Docket No. 06-122). The Commission explains that a cap would require it to more carefully evaluate use of USF resources and consider spending decisions for the overall Fund, leading to more effective and efficient spending under an annual combined budget. As you may recall, back in April, Commissioner O’Rielly released a blog post arguing in favor of a USF budget cap and previewing this NPRM.

The USF provides financial support to recipients through four major programs: the High-Cost program (“Connect America Fund”), the Lifeline program, the schools and libraries program (“E-Rate”), and the Rural Health Care (“RHC”) program. The NPRM seeks comment on its proposal to set the overall cap at $11.42 billion, the sum of the authorized budgets for the four programs in 2018, and alternatively asks if it should set the cap at a different amount. The Commission also seeks comment on how to adjust the cap over time (i.e., whether it should adjust the cap using a program-specific index), how to implement the cap and track financial demand, and how to reduce expenditures that will exceed the cap. Additionally, it seeks comment on changes to the budget structures of each program, and any changes that should be made to streamline spending and balance program needs. Specifically, the NPRM proposes to combine the E-Rate and RHC budgets, where the two would share a combined total cap of more than $4.64 billion in funding (the 2018 funding amount), and seeks comment on this proposal.

On June 13, 2019, the Commission published the NPRM in the Federal Register therefore establishing the following comment dates:

Comments are due July 15, 2019.

Reply Comments are due August 12, 2019.

On July 5, 2019, the Commission released an Order extending the comment deadlines for the NPRM.

Comment dates are now due July 29, 2019.

Reply Comments are now due August 26, 2019.

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