FCC Adopts Enhanced ACP Broadband Discounts for High-Cost Areas

Posted by CommLaw | Aug 18, 2023 | 0 Comments

On August 3, 2023, the Federal Communications Commission adopted a Sixth Report and Order reforming the Affordable Connectivity Program (ACP) rules to provide for an enhanced benefit of up to $75 per month for broadband services to eligible households located in high-cost areas.  To receive the benefit, a broadband provider must show it incurS particularized economic hardship to provide such service using only the existing up-to-$30 monthly ACP benefit.

The FCC's ACP program provides three types of support to offset the monthly cost of broadband service to qualified low-income households: (i) up to $30 per month; (ii) up to $75 per month for eligible households on Tribal lands; and (iii) $75 per month for eligible households in a high-cost area. A high-cost area is defined as one in which the cost of building out broadband service is higher compared to the average cost of building out in unserved areas in the United States, and is set by the U.S. National Telecommunications and Information Administration (NTIA) as part of the Broadband Equity, Access, and Deployment (BEAD) grant program.

Only a facilities-based provider is eligible to offer the high-cost area benefit, and it must show that serving the high-cost area causes particularized economic hardship to a degree that it may not be able to maintain the operation of part or all of its broadband network.  A provider is expected to show such harm with an affidavit supported by an income statement and tax filings, demonstrating that it operates at a loss, or is unable to cover the costs of maintaining the operation of its broadband network in the high-cost area, using a reasonable cost allocation method. Further, the provider must certify and explain how the $75 per month benefit would materially improve the provider's ability to offer service and maintain and operate its broadband network.  A provider may submit a single application to the Universal Service Administrative Company (USAC) with supporting documentation for all high-cost areas in which it seeks to offer the enhanced high-cost area benefit.

Finally, providers participating in the enhanced high-cost area program must annually resubmit a showing of particularized economic hardship to demonstrate continued eligibility to offer the high-cost area benefit.

The rules adopting the enhanced ACP discount for high-cost areas will take effect 30 days after the Order is published in the Federal Register.

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