Mere days after the infrastructure bill became effective, the Federal Communications Commission (FCC) launched a rulemaking proceeding to create rules for the new $14.2 billion Affordable Connectivity Program (ACP). The ACP modifies and extends the temporary Emergency Broadband Benefit (EBB) program created in early 2021 to ease affordability barriers to consumers having access to high-speed internet services during the pandemic.

Time is of the essence because Congress scheduled the EBB program to end either when the funding ran out or on December 31, 2021, whichever happened earlier. Funding exhaustion has thus far not been an issue because EBB enrollment has been lower than anticipated, but it was also anticipated that Congress would pass the infrastructure bill much earlier in the fall, particularly given that the legislation provides for a 60-day transition period once the ACP is launched. The rulemaking notice states the ACP will begin on December 31, 2021, giving the agency and industry very little time to create new rules and processes for the program.

Comments on the proposed rules for the new program are due December 8, 2021, and reply comments are due December 28, 2021. The agency’s notice also confirms that currently enrolled households will continue to receive their EBB benefits during the transition period and that enrollments in the ACP may begin as soon as December 31, 2021. Although the new rules are likely to be issued in mid-January, the FCC will issue further guidance to the industry beyond what is in the rulemaking notice before the transition period begins.

In the meantime, providers can begin planning for the transition by noting the instances in which the agency has proposed rules that would provide continuity from the EBB program, including:

  • Not requiring currently-authorized EBB providers to reapply to the FCC to participate in the ACP, although they may need to make new filings with the program administrator, Universal Service Administrative Company (USAC), in order to update information regarding their service offerings, or with the FCC to update any alternative verification processes (AVPs) for consumer enrollments such as including the Special Supplemental Nutrition Program for Women, Infants, and Children as a means for consumers to qualify for the ACP.
  • Continuing to use the National Lifeline Accountability Database as the authoritative source to determine which household is enrolled with which provider.
  • Retaining the definition of usage for no-fee plans, although it seeks comment on whether the agency should require a third-party app on the subscriber’s device that confirms the subscriber is using the ACP-supported service or require subscribers to periodically contact USAC to confirm that the subscriber is still using or still desires to retain the service.

In other instances, the FCC has proposed a departure or change to the EBB rules, such as:

  • A troubling proposal to limit provider access to program databases administered by USAC where there are “concerns” of waste, fraud, and abuse. This seems to be distinct from a discussion later in the notice seeking comment on whether it should include the ACP within the scope of a separate and pending rulemaking proceeding to create rules for debarring providers from similar funding programs.
  • Limiting the use of AVPs to only those providers who maintain such processes for their own low-income programs or purposes unrelated to the EBB program.
  • Introducing a 15-day period for households receiving a no-fee service to cure their non-usage after 30 days. This is a construct from the Lifeline program that is absent in the EBB program, with the latter having no cure period and a calendar-month non-usage rule.
  • Introducing an annual re-certification requirement modeled after the Lifeline re-certification process.
  • Requiring consumers to opt into the ACP even if the consumer is already enrolled in the EBB program.
  • Proposing to prohibit support for device manufacturers on the agency’s list of entities that pose a national security threat.

The FCC is otherwise seeking comment on a wide variety of issues, including the following:

  • As interpreted in the FCC’s notice, the legislation requires participating providers to offer the ACP service benefit—which will be $30 instead of $50 per month—on all of its broadband service plans (except those bundled with video services). The FCC is now asking for comment on how it should treat promotional and individually-negotiated “contract” rate plans and how to evaluate plans only offered in particular geographic areas. The FCC is also asking whether it should require the plans to have been offered on a generally available basis for a specific period of time in order to qualify for the ACP, and otherwise how to treat grandfathered plans.
  • Whether the FCC should require providers to submit the specifications and wholesale costs of connected devices in order to determine whether the program should have minimum requirements and limits to the level of support for devices such as tablets and laptops. The FCC seeks comment on whether it should adopt a cost-plus approach to capping the level of subsidy providers may seek.
  • Whether the FCC should empower the USAC to reject a provider’s ACP election notice and disapprove the provider’s service plans due to past complaints, audit findings, enforcement actions, or fraud convictions.
  • Whether the ACP should adopt minimum service standards as a way of ensuring that competitive levels of service are provided compared to non-supported services.
  • Whether the ACP should formally adopt a rule permitting providers to provide a subsidized tablet or laptop if it is not also providing a broadband service to that same consumer.
  • Whether the FCC should adopt a uniform monthly snapshot date for determining which households a provider may claim for a given month.
  • Whether the FCC should provide more flexibility in the monthly claim filing deadline and whether it should permit a reasonable period in which providers may file revised claims like the long-standing rule in the Lifeline program, although it has also asked whether it should limit upward revisions to certain circumstances.
  • Whether there should be a consumer self-service option to terminate the ACP service.
  • Whether the FCC should prohibit households that received a connected device through the EBB program from receiving a second device in the ACP.
  • How to reconcile the legislation’s directive to permit providers to de-enroll a subscriber after 90 days of non-payment with the prohibition against refusing to enroll a consumer in the ACP based on any past or present arrearages with the provider.
  • Various consumer protection measures, such as new rules governing benefit transfers, prohibiting practices it deems constitute inappropriate upselling or downselling, and requiring new consumer disclosures.

DWT is continuously monitoring developments in this area, and will provide periodic updates as more details emerge about this new program. Please reach out to your DWT attorney if you are interested in participating or learning more about it.