Federal Universal Service Fund and Other Selected Federal Broadband Programs: A Primer

Federal Universal Service Fund and Other Selected Federal Broadband Programs: A Primer

January 28, 2021
Federal Universal Service Fund and Other Selected Federal
Broadband Programs: A Primer
Introduction
budget of up to $11.2 billion, targeting partially served
Efforts to deploy voice telephone service throughout the
areas as well as the few unserved areas that did not receive
United States began almost 100 years ago. Starting in the
Phase I funding. The timeframe for the Phase II auction has
1990s, these efforts shifted toward the deployment of
not yet been determined by the FCC and is dependent on
broadband internet service to homes and businesses and the
broadband maps that are to be developed under the
provision of infrastructure to support applications such as
Broadband DATA Act (P.L. 116-130).
telehealth and distance learning. As a result of the
Coronavirus Disease 2019 (COVID-19) pandemic,
Lifeline Program
Congress created and funded new programs to accelerate
The Lifeline Program helps low-income customers initiate
broadband deployment and adoption in minority
telephone service and pay their monthly bills. The program
communities, on Tribal lands, and among qualifying
offers up to $9.25 per month towards telephone or internet
households. Enabling telehealth is one major focus of these
services for eligible subscribers (up to $34.25 for those
programs.
living on Tribal lands).
Federal Communications Commission
Rural Health Care Program
The Universal Service Fund (USF) is intended to ensure
The Rural Health Care Program allows rural health care
that telecommunications services, including broadband, are
providers to pay rates for internet and telecommunications
available and affordable throughout the country. Federal
services similar to those of their urban counterparts, making
Communications Commission (FCC) programs supported
telehealth services more affordable in rural areas. The
by the USF—the High-Cost Program, the Connect America
program’s funding cap for 2020 was initially set at $604.76
Fund, the Lifeline Program, the Rural Health Care Program,
million, but an additional $197.98 million in unused funds
and the Schools and Libraries Program—are funded by fees
from prior years was released in June 2020, bringing the
on telecommunications carriers, not through regular
total to $802.74 million––the most in the program’s history.
appropriations. The FCC sets the regulatory and fee
This program has two permanent parts, the Healthcare
structures for these programs, but the Universal Service
Connect Program and the Telecommunications Program, as
Administration Company, an independent not-for-profit
well as the fixed-term Connected Care Pilot Program.
corporation designated by the FCC to run USF programs,
manages contributions and disburses funds.
 The Healthcare Connect Program (established in
2012) supports broadband connectivity to eligible health
High-Cost Program
care providers and encourages the establishment of state
The High-Cost Program has historically provided support to
and regional provider networks. Under this program,
qualifying telephone companies serving high-cost areas
eligible rural health care providers (and eligible non-
(such as rural communities) with the goal of making voice
rural health care providers that are members of a
service affordable there.
consortium with more than 50% rural health care
providers) receive a 65% discount on internet services.
Connect America Fund
The High-Cost Program is being phased out and replaced
 The Telecommunications Program (established in
by the Connect America Fund (CAF), which supports the
1997) subsidizes the difference between urban and rural
provision of affordable fixed and mobile voice and
rates for telecommunications services. It is not used for
broadband services in high-cost areas. In 2018, the CAF
broadband services.
allocated approximately $1.5 billion to deploy networks
serving more than 700,000 unserved rural homes and
 The Connected Care Pilot Program will provide up to
businesses in 45 states.
$100 million over three years for selected pilot projects.
This funding will cover 85% of the eligible costs of
The Rural Digital Opportunity Fund (RDOF) is a
broadband connectivity, certain network equipment, and
program initiated by the FCC under the Connect America
information services to provide connected health care
Fund. Through the RDOF, the FCC plans to commit $20.4
services to the intended patient population, with a strong
billion to bring high-speed fixed broadband service to rural
preference for projects to benefit low-income Americans
homes and small businesses in two phases. In December
and veterans. On January 15, 2021, the FCC announced
2020, the FCC announced Phase I auction results, in which
23 initial project awards to 14 applicants.
180 bidders won $9.2 billion to deploy high-speed
broadband to over 5.2 million unserved homes and
businesses. The Phase II auction will be able to draw on a
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Federal Universal Service Fund and Other Selected Federal Broadband Programs: A Primer
Schools and Libraries Program
to increase access to broadband service in eligible rural
The Schools and Libraries Program, also known as E-Rate,
areas. Eligibility criteria vary, with some programs
provides telecommunication services (e.g., local and long-
targeting unserved areas with negligible access to
distance calling, high-speed lines), internet access, and
broadband and other programs available to underserved
internal connections (the equipment to deliver these
areas where only a small segment of the population has
services) to eligible schools and libraries. The FCC has
access to broadband service. Congress typically funds these
capped E-rate annual program funding at $4.15 billion.
programs through annual USDA appropriations bills.
FCC Programs Established/Funded Through the
Community Connect Program
Consolidated Appropriations Act, 2021
The Community Connect Program provides grants to
The Consolidated Appropriations Act, 2021 (P.L. 116-260)
eligible applicants to finance facilities and equipment
contained provisions for two new FCC programs, not
needed to provide broadband service in eligible rural areas.
supported by the USF:
Applicants must agree to provide free broadband service to
critical community facilities, such as public safety facilities,
 The COVID-19 Telehealth Program, established and
for at least two years.
appropriated $200 million through the Coronavirus Aid,
Relief, and Economic Security Act (CARES) (P.L. 116-
ReConnect Broadband Pilot Program
136), was appropriated an additional $250 million.
The ReConnect Program furnishes loans and grants to
finance the construction, improvement, or acquisition of
 An emergency broadband benefit was established and
facilities and equipment needed to provide broadband
appropriated $3.2 billion to provide up to a $50 monthly
service in eligible rural areas.
discount to eligible households ($75 to households on
Tribal lands). This benefit will expire at the end of June
Rural Broadband Access Program
2021, unless renewed.
The Rural Broadband Access Program provides loans and
loan guarantees to finance the construction, improvement,
National Telecommunications and
or acquisition of facilities and equipment needed to provide
Information Administration
broadband service in eligible rural areas.
The National Telecommunications and Information
Administration (NTIA), in the Department of Commerce,
Telecommunications Infrastructure Program
manages the BroadbandUSA program, which serves local
The Telecommunications Infrastructure Program furnishes
and state governments, industry, and nonprofits that need to
loans and loan guarantees to finance the construction,
enhance broadband connectivity and promote digital
maintenance, or improvement of telephone and broadband
inclusion.
service in eligible rural areas.
NTIA Programs Established/Funded Through the
Distance Learning and Telemedicine Program
Consolidated Appropriations Act, 2021
The Distance Learning and Telemedicine Program provides
The Consolidated Appropriations Act, 2021, established
grants to finance software and equipment that allows people
three new broadband assistance programs at NTIA:
in eligible rural areas to access distance learning or
telemedicine services.
 The Broadband Infrastructure Deployment Grant
Program was established and appropriated $300 million
Department of Health and Human
for broadband projects by covered partnerships in
Services
eligible service areas. Covered partnerships are defined
The Department of Health and Human Services (HHS)
as partnerships between (a) a state or one or more of its
funds telehealth services through existing infrastructure and
political subdivisions and (b) a provider of fixed
by training health providers, rather than by funding the
broadband service.
deployment of new infrastructure. Further discussion of
HHS programs is therefore beyond the scope of this primer.
 The Tribal Broadband Connectivity Grant Program
was established and appropriated $1 billion for
Interagency Rural Telehealth Initiative
broadband infrastructure deployment, broadband
In August 2020, the FCC, USDA, and HHS signed a
affordability programs, distance learning, telehealth, and
memorandum of understanding (MOU) to work together on
broadband adoption activities on Tribal lands.
a Rural Telehealth Initiative and establish an interagency
Rural Telehealth Task Force to address the telehealth needs
 The Connecting Minority Communities Pilot
of the 57 million rural residents in the United States. The
Program was established and appropriated $285 million
MOU is intended to foster collaboration and information
for grants to minority institutions, organizations, and
sharing among the three agencies on telehealth initiatives.
consortia to support broadband development and
adoption.
Patricia Moloney Figliola, Coordinator, Specialist in
Rural Utilities Service
Internet and Telecommunications Policy
Colby Leigh Rachfal, Analyst in Telecommunications
The Rural Utilities Service in the U.S. Department of
Policy
Agriculture (USDA) administers five broadband and
telecommunications programs that provide loans and grants
Alyssa R. Casey, Analyst in Agricultural Policy
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Federal Universal Service Fund and Other Selected Federal Broadband Programs: A Primer

IF11748

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