FCC Releases Emergency Connectivity Fund Program Report and Order

On May 11, 2021, the FCC released the adopted Report and Order (“R&O”) establishing the $7.17 billion Emergency Connectivity Fund Program (the “Program”) pursuant to section 7402 of the American Rescue Plan Act of 2021.  The Program, under USAC’s administration, will allow eligible schools and libraries to seek funding for eligible telecommunications equipment and services purchased from July 1, 2021 to June 30, 2022, necessary to provide e-access during the pandemic to basic educational and library services in their communities.  The R&O sets forth following rules and policies for the Program:

Goals:  The Program is being established to meet three goals:

  1. Connecting and facilitating remote learning for students, school staff, and library patrons who would otherwise lack adequate access to connected devices and broadband connectivity during the pandemic.  This will be measured using two metrics: (1) the number of connected devices funded with Program support that are provided to students, school staff, and library patrons who would otherwise lack access to a device sufficient to enable them to engage in remote learning; and (2) the number of broadband connections (including Wi-Fi hotspots) funded with Program support that are provided to students, school staff, and library patrons who would otherwise lack access to Internet connectivity sufficient to engage in remote learning. The FCC will also take this opportunity to gather additional data about the number of students who lack access to connected devices or broadband services.  Schools will be required to submit best estimates of the number of students who lack access to connected devices, broadband services, or both, as a part of their application.  USAC will then release the data as part of its Open Data Project for the Program.
  2. Ensuring that USAC efficiently and effectively administers the Program. This will be measured using two metrics: (1) the speed and ease of the application process; and (2) the speed and ease of the reimbursement process.
  3. Providing pricing transparency for eligible equipment and services to inform future policy and purchasing decisions.  USAC will make pricing publically available on its Open Data platform.  The effectiveness of this will be measured through surveys of the schools and libraries to determine if the platform enabled them to make more cost-effective purchasing decisions.

Eligible Entities:  The schools, libraries, and consortia of schools and libraries that are eligible for support under the E-Rate Program are also those that are eligible for support under the Program.  In accordance with this decision, the definitions and in-eligible entities enumerated in the E-Rate Program are also adopted to govern the Program.  Tribal libraries that are eligible for support from a state library administrative agency under the Library Services and Technology Act (“LSTA”) are also eligible for support, in accordance with the recently amended LSTA.

Eligible Equipment and Reimbursement Amounts:  Purchase of the following equipment is eligible for funding:

  1. Wi-Fi hotspots – defined as “a device that is capable of—(A) receiving advanced telecommunications and information services; and (B) sharing such services with another connected device through the use of Wi-Fi.”  For purposes of reimbursement, the FCC establishes a $250 maximum reasonable cost for Wi-Fi hotspots.
  2. Modems, routers, and combined modems and routers – For the purposes of reimbursement, the FCC declined to establish a maximum reasonable support amount.  Instead the Wireline Competition Bureau (“Bureau”) is directed to guide USAC in assessing applications for reimbursement of these items to determine whether the request is reasonable.
  3. Connected devices – laptop computers, tablet computers, or similar end-user devices that are capable of connecting to advanced telecommunications and information services.  Connected devices are expected to be Wi-Fi enabled and able to support video conferencing platforms and other software necessary for remote learning.  Desktop computers and mobile phones, including smartphones, are excluded from the definition of connected devices.  For the purposes of reimbursement, $400 is established as the reasonable maximum support for connected devices; however, to meet the needs for individuals with disabilities, applicants may request a waiver of this cap.

Eligible Services and Reimbursement Amounts: Purchase of a commercially available service providing a fixed or mobile broadband connection for off-campus use by students, school staff, or library patrons (including installation costs, taxes, and fees) will qualify for funding as an advanced telecommunications and information service, unless there is no service available to purchase in an area.  Dark fiber and construction of new networks are not eligible for funding.  There is a limited exception to allow for network construction or datacasting, but only where no commercially available option does not already exist.  The FCC did not include any minimum service standards.  The FCC expects that the cost of broadband services will range between $10 and $25 per month, but declines to impose a maximum reasonable reimbursement amount for services in recognition that the range will not be appropriate for all areas or types of services.  The Bureau is directed to provide guidance to USAC to determine the reasonableness of requests for reimbursement of services.

Eligible Locations: The FCC declined to adopt limitations on where the equipment may be utilized, recognizing that in the pandemic, students, staff, and library patrons have been forced to work in unique locations.  The funds may not be used for equipment and services at the school or library (i.e. on-campus) during the pandemic emergency period.  The funding may be used to provide Wi-Fi hotspots for school buses and bookmobiles to provide off-campus broadband services to students, school staff, and library patrons who currently lack sufficient access.

Per-Location/Per-User Limitations:  Reimbursement under the Program is limited to one fixed broadband connection per location and one connected device or Wi-Fi hotspot per student, school staff member, or library patron during the pandemic emergency period.  Participating schools and libraries will be required to document the students, school staff members, and library patrons that are served at each location.

Eligible Uses: The purchased devices and services must be used primarily for educational purposes, defined as “activities that are integral, immediate, and proximate to the education of students in the case of a school, and activities that are integral, immediate, and proximate to the provision of library services to library patrons in the case of a library.”  They may be utilized for non-educational purposes when not being utilized for educational purposes.

Application Process:  The first round of applications will provide reimbursement to schools and libraries to purchase eligible equipment and services and provide them to students, staff, and library patrons who lack access to adequate devices, equipment, or services between July 1, 2021 and June 30, 2022.  If, after the first round, funding remains, then a second round will be opened for reimbursement of services and equipment provided to students, staff, and library patrons, from March 1, 2020 to June 30, 2021.  USAC is directed to open an initial 45-day filing window as soon as practicable.  Any additional filing windows will be opened as appropriately determined by the Bureau and USAC.  USAC is directed to leverage the existing E-Rate application and associated processes to ensure ease of the application process.  In the event that there is insufficient funding, applications will be prioritized in accordance with their E-Rate Program discount rate for category one services.

Invoicing and Reimbursement Process:  Applicants are ultimately responsible for ensuring that reimbursement requests are submitted.  Applicants can request that service providers seek reimbursement from the Emergency Connectivity Fund, but service providers are not required to accept that responsibility.  Applicants must specify at the application stage whether the applicant or service provider will be seeking reimbursement, and if they specify the service provider, the applicant must provide evidence of a service provider’s willingness to seek reimbursement.  Requests for reimbursement must include invoices that support the amounts requested in the application.  Applicants may seek reimbursement for services that they have not yet paid for.  Similar to the application process, USAC is directed to leverage existing E-Rate invoicing forms for the Program.  USAC will start accepting requests for reimbursement within 15 days of the first wave of commitments in the first application window.  Applicants will then have 60 days from the date of their funding decision commitment letter or service delivery date, whichever is later, to submit a request for reimbursement.

Payment Administration:  The FCC’s red light rule is applicable to Program applicants.  In addition, applicants will be required to register with the System for Award Management (“SAM”), a web-based government-wide application that collects, validates, stores, and disseminates business information about the federal government’s partners in support of federal awards, grants, and electronic payment processes.  If an applicant has already registered with SAM, they are not required to re-register.  Finally, the Do Not Pay system, administered by the US Treasury’s Bureau of the Fiscal Service, will be utilized to determine whether an applicant is eligible to receive funding.  For additional information on the Do Not Pay System see: https://fiscal.treasury.gov/DNP/.

Other Items:

  1. The Children’s Internet Protection Act will apply to services and equipment purchased with Emergency Connectivity Fund funding that is owned by the school or library, but will not apply to school or equipment used only in conjunction with student, school staff, or patron owned computers.
  2. The FCC establishes the following requirements to guard against waste fraud and abuse: participants must keep an inventory of devices and services purchased with Program funding; participants must retain documents related to the Program for at least 10 years from the last date of service or delivery of equipment; participants must comply with the gift rule; participants must make several certifications; USAC must conduct audits; and the FCC will limit the sale, resale or transfer of equipment and services purchased with funding from the Program for three years.
  3. The FCC will apply its typical enforcement procedures to the Program.

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