Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations 60347 

Paragraph heading ‘‘(c)(2)(iv) SAC 

adjustments.’’ should read ‘‘(c)(2)(iv) 

SAC adjustments.’’ 

Paragraph heading ‘‘(c)(3) Billing 

SACs for organs generally.’’ Should read 

‘‘(c)(3) Billing SACs for organs 

generally.’’ 

[FR Doc. C2–2022–23918 Filed 8–31–23; 8:45 am] 

BILLING CODE 1505–01–D 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 54 

[WC Docket No. 21–450; FCC 23–62; FR 

ID 167068] 

Affordable Connectivity Program 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: In this document, the Federal 

Communications Commission (FCC or 

Commission) adopts rules to establish 

the enhanced discounts available for 

monthly broadband services provided in 

high-cost areas by participants in the 

Affordable Connectivity Program (ACP). 

DATES: Effective October 2, 2023. 

FOR FURTHER INFORMATION CONTACT: For 

further information, please contact, 

Travis Hahn, Attorney Advisor, 

Telecommunications Access Policy 

Division, Wireline Competition Bureau, 

at Travis.Hahn@fcc.gov or 202–418– 

7400. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Sixth 

Report and Order (Order) in WC Docket 

No. 21–450; adopted on August 3, 2023 

and released on August 4, 2023. The full 

text of this document is available at the 

following internet address: https://

www.fcc.gov/document/fcc-actsprovide-subsidy-consumers-certainhigh-cost-areas-0. 

I. Introduction 

1. In this final rule, as required by the 

Infrastructure Investment and Jobs Act 

(Infrastructure Act), the Commission 

adopts rules to establish the enhanced 

discounts available for monthly 

broadband services provided in highcost areas by participants in the ACP. 

The Infrastructure Act recognizes that in 

certain high-cost areas of the country, 

offering broadband service to ACP 

eligible households at the standard upto-$30 monthly benefit level could lead 

providers to experience particularized 

economic hardship such that the 

provider may not be able to maintain 

the operation of part or all of its 

broadband network. To address this, the 

Infrastructure Act allows for providers 

to provide an up-to-$75 monthly benefit 

to ACP eligible households in high-cost 

areas upon a showing of such 

particularized economic hardship in a 

given high-cost area. The steps the 

Commission takes to implement this 

provision will help narrow the digital 

divide by ensuring that more lowincome households throughout the 

country, including households in rural 

and insular areas, have access to 

discounted broadband services. In 

particular, the high-cost area benefit 

will maximize provider participation in 

the ACP, by encouraging additional 

providers to participate in the ACP in 

high-cost areas and incentivizing 

existing ACP providers experiencing an 

economic hardship in high-cost areas to 

continue participating in the program. 

The high-cost area benefit also 

complements and supports other 

Federal initiatives, including those in 

the Infrastructure Act, to spur 

deployment and adoption in rural areas 

by strengthening the business case for 

providers to deploy broadband in rural 

and insular areas. 

II. Discussion 

2. The Commission now establishes 

the requirements to implement the ACP 

high-cost area benefit as required by the 

Infrastructure Act. In this section, the 

Commission discusses determining 

high-cost areas that will be eligible for 

the high-cost area benefit, eligibility to 

receive the high-cost area benefit, 

requirements to make a showing of 

economic hardship, as well as other 

administrative aspects necessary to 

implement the high-cost area benefit. 

3. Pursuant to the Infrastructure Act, 

for purposes of the ACP high-cost area 

benefit, the Commission must use the 

definition of high-cost areas established 

by the National Telecommunications 

and Information Administration (NTIA) 

for its Broadband Equity, Access, and 

Deployment (BEAD) grant program. The 

ACP statutory provisions specifically 

reference NTIA’s determination of highcost areas under the BEAD program in 

defining a high-cost area for the ACP 

high-cost area benefit. As such, the 

high-cost areas used by the Commission 

for the ACP high-cost area benefit will 

be the same as the high-cost areas used 

for the BEAD program as determined by 

NTIA. 

4. The statute establishing the BEAD 

program requires NTIA, ‘‘on or after the 

date on which the [Commission’s] 

broadband DATA maps are made 

public,’’ to allocate funding to eligible 

States for the high-cost areas within the 

State. By definition, a ‘‘ ‘high-cost area’ 

[as determined by NTIA in consultation 

with the Commission] means an 

unserved area in which the cost of 

building out broadband service is 

higher, as compared with the average 

cost of building out broadband service 

in unserved areas in the United States.’’ 

For purposes of defining ‘‘high-cost 

area’’, the term ‘‘unserved area’’ means 

an area in which not less than 80 

percent of broadband-serviceable 

locations are unserved locations. 

5. On June 26, 2023, NTIA announced 

the State allocations for the BEAD grant 

program. As part of BEAD, NTIA has 

made State allocations in part based on 

the determined ‘‘high-cost areas’’ within 

each State. Pursuant to the 

Infrastructure Act, the Commission 

therefore makes the ACP high-cost area 

benefit available in those high-cost areas 

identified by NTIA consistent with the 

Infrastructure Act’s definition of ‘‘highcost area,’’ and subject to the provider’s 

demonstration of particularized 

economic hardship, as described in 

further detail in the following. 

6. The Commission next addresses the 

requirements for participating providers 

seeking to offer a high-cost area benefit 

to eligible households located in 

designated high-cost areas served by the 

provider. Specifically, the Commission 

defines ‘‘particularized economic 

hardship,’’ to clarify that the benefit is 

limited to facilities-based providers, and 

address the specific showing that 

participating providers must make to 

demonstrate they are experiencing a 

particularized economic hardship in a 

given high-cost area. The Commission 

also prescribes the process for 

submitting, reviewing, and taking action 

on such showings, and for requests for 

review of adverse decisions. Lastly, the 

Commission clarifies the interplay 

between the qualifying Tribal land and 

high-cost area benefits by interpreting 

the Infrastructure Act to mean that 

participating providers can either offer 

one or the other, but not both 

simultaneously, to eligible households 

located on both a Tribal land and in a 

designated high-cost area. 

7. Particularized Economic Hardship. 

First, consistent with the Infrastructure 

Act, the Commission will require a 

participating provider to demonstrate 

economic hardship to be eligible for the 

high-cost area benefit. The 

Infrastructure Act directs the 

Commission to establish a mechanism 

whereby a ‘‘participating provider’’ in a 

high-cost area ‘‘may provide’’ an 

enhanced monthly benefit up to $75 

‘‘upon a showing that the applicability 

of the lower [$30] limit . . . would 

cause particularized economic hardship 

to the provider such that the provider 

may not be able to maintain the 


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operation of part or all of its broadband 

network.’’ The Commission implements 

this directive by requiring a 

participating provider seeking 

application of the high-cost area benefit 

to demonstrate the economic hardship 

to which it would be subject if only the 

standard $30 monthly discount were 

applied to its provision of ACP service 

in a high-cost area(s). This approach to 

implementing the statute is consistent 

with the positions taken by several 

commenters in the record. 

8. Next, the Commission defines 

particularized economic hardship by 

focusing on the provider’s operating 

costs and revenues in the high-cost 

area(s) where the provider seeks 

approval to offer the high-cost area 

benefit. The Commission finds that a 

provider that demonstrates it is unable 

to cover the costs of maintaining the 

operation of all or part of its broadband 

network in a high-cost area where it 

seeks to offer the high-cost area benefit 

as described in the following meets the 

‘‘particularized economic hardship’’ 

standard. Hereafter, the Commission 

describes such a provider as operating at 

a loss. To establish ‘‘particularized 

economic hardship,’’ the Commission 

will require providers to submit 

documentation, such as an income 

statement, showing that they are unable 

to cover the costs of maintaining the 

operation of all or part of their 

broadband network for each high-cost 

area for which the high-cost area benefit 

is being sought. Aside from required 

documentation, the Commission will 

also require each provider to certify to 

and explain how the up to $75 a month 

high-cost area benefit would materially 

improve the provider’s ability to offer 

service through the ACP and maintain 

and operate its broadband network and 

how the economic hardship limits its 

ability to ‘‘maintain the operation of all 

or part of its broadband network’’ in 

each high-cost area for which it seeks to 

offer the high-cost area benefit. 

9. The Commission finds this 

standard to be consistent with the 

language and intent of the statute, as 

well as the record. Congress did not 

provide details on the nature of the 

showing of economic hardship 

providers must make to obtain the highcost area benefit. The statute provides 

that the provider must show that the 

applicability of the basic $30 benefit 

would cause ‘‘particularized economic 

hardship . . . such that the provider 

may not be able to maintain the 

operation of part or all of its broadband 

network.’’ The Commission sought 

comment on the mechanism by which 

providers can show particularized 

economic hardship. Because a provider 

operating at a loss in the high-cost area 

for which it seeks the high-cost area 

benefit may be unable to maintain 

broadband network operations in that 

area, the Commission finds this 

standard to be consistent with the 

language and intent of the statute. For 

purposes of this standard, the provider 

will need to factor in the standard 

monthly $30 ACP benefit as well as 

subsidies and other financial benefits 

the provider receives, including 

Universal Service Fund (USF) high-cost 

support, as they are directly relevant 

when evaluating the overall costs and 

revenues of the provider. No commenter 

opposed the Commission’s proposal in 

the Notice of Proposed Rulemaking 

(NPRM), 87 FR 8385, February 14, 2022, 

of including subsidies and other 

financial benefits in the economic 

hardship analysis. 

10. The Commission rejects ACA 

Connects’ suggestion to interpret 

‘‘particularized economic hardship’’ to 

mean those instances where the 

provider’s administrative costs of 

participating in the ACP exceeds the 

benefits received, and where the 

provider shows that in the context of its 

overall financial position, that net loss 

would affect its ability to maintain part 

of its broadband network. A provider 

could be profitable overall and willing 

to maintain network operations even if 

the costs of voluntarily participating in 

the ACP exceeded the benefits received. 

Conversely, a provider could be 

unprofitable overall, but the 

administrative costs of ACP 

participation could be less than the 

benefits received. Accordingly, the 

Commission finds ACA Connects’ 

suggested approach would not provide 

a meaningful indication of whether a 

provider can ‘‘maintain the operation of 

part or all of its broadband network’’ 

when just the standard $30 benefit is 

available to eligible households in the 

designated high-cost areas it serves. 

11. The Commission also declines to 

define ‘‘particularized economic 

hardship’’ as the serving of less than a 

Commission-defined threshold of 

broadband subscribers across a smaller 

provider’s entire service territory, as 

suggested by ACA Connects. The 

Commission did seek comment on this 

approach in the NPRM in response to 

earlier comments by NTCA—The Rural 

Broadband Association (NTCA) and 

Conexon. However, the Commission 

received no comments that would help 

them determine how to apply a standard 

under a threshold-based approach to 

determine whether a provider may not 

be able to maintain the operation of part 

or all of its broadband network without 

the high-cost area benefit. Furthermore, 

the Commission believes that a 

subscriber threshold-based approach 

would be at odds with Congress’s 

directive to require a showing of 

‘‘particularized’’ economic hardship. 

The Commission interprets the meaning 

of ‘‘particularized’’ in the context of the 

high-cost area benefit to mean that a 

provider must show that it is 

individually experiencing economic 

hardship. A subscriber-based threshold 

approach is inconsistent with this 

interpretation because it would 

necessarily assume that all providers 

that met the threshold were 

experiencing sufficiently similar 

circumstances to merit access to the 

high-cost area benefit, without regard to 

whether each provider’s specific 

circumstances demonstrated that the 

provider would experience economic 

hardship absent the application of the 

high-cost area benefit. Accordingly, the 

Commission finds that the statute 

requires them to define particularized 

economic hardship based on an 

individualized showing so that each 

provider can account for its own 

particularized cost and revenue 

structure. 

12. To the extent that NTCA suggests 

an approach that allows providers to 

qualify for the high-cost area benefit 

based solely on the receipt of USF highcost support, the Commission declines 

to adopt such an approach. Recipients 

of USF high-cost support receive 

subsidies to provide reasonably 

comparable services at rates reasonably 

comparable to those in urban areas. 

Indeed, those subsidies are a way for 

providers to cover certain costs of 

operating and maintaining their 

networks, which may, if anything, make 

it less likely that a provider would be 

suffering a particularized economic 

hardship in the geographic area where 

it receives high-cost support. Therefore, 

receipt of USF high-cost support, in and 

of itself, does not show the provider is 

experiencing a ‘‘particularized 

economic hardship’’ in general, or as 

defined herein. To bolster its argument, 

NTCA attempts to tie the ACP high-cost 

area benefit to the role USF high-cost 

support plays in enabling ‘‘ ‘affordable’ 

broadband services for all rural 

consumers, regardless of income level.’’ 

NTCA contends that the ‘‘ ‘enhanced’ 

ACP subsidy can make up for [the] ‘gap’ 

between ‘reasonable comparability’ and 

‘affordability’ that the High-Cost USF 

program does not close on its own.’’ 

However, this argument does not 

address the specific language of the 

statute, which focuses on a provider’s 

inability to ‘‘maintain the operation of 

part or all of [a provider’s] broadband 


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network’’ rather than on whether the 

service at issue is affordable to 

subscribers with the standard ACP 

benefit. Accordingly, the Commission 

rejects this proposal. 

13. The Commission also disagrees 

with the Wireless Internet Service 

Providers Association’s (WISPA) 

position that small Internet Service 

Providers ‘‘lack the administrative 

resources to establish their specific costs 

to provide broadband service in an 

area,’’ and that it is unnecessary to 

examine an individual operator’s cost of 

doing business.’’ Instead, WISPA asserts 

that all areas eligible for the Connect 

America Fund or Rural Digital 

Opportunity Fund, as well as any 

census block identified as a highpoverty area on the map created by the 

Department of Agriculture and NTIA, 

should be designated as high-cost areas 

eligible for the $75 subsidy. WISPA’s 

suggested approach would seem to read 

the ‘‘particularized economic hardship’’ 

showing out of the statute entirely. As 

discussed in this document, the statute’s 

particularized economic hardship 

requirement is separate from and in 

addition to the requirement that this 

enhanced support only be made 

available in ‘‘high-cost areas,’’ and the 

determination of those high-cost areas 

will be made by NTIA. Moreover, the 

Commission expects that any business, 

regardless of size, will have knowledge 

of the costs and revenues associated 

with its business operations, at least to 

the extent necessary to determine if the 

provider is experiencing particularized 

economic hardship in a high-cost area. 

14. Facilities-Based Provider 

Limitation. Pursuant to the 

Infrastructure Act’s direction that a 

provider show that particularized 

economic hardship may impair its 

ability ‘‘to maintain the operation of 

part or all of its broadband network,’’ 

the Commission clarifies that only 

facilities-based providers will be eligible 

for the high-cost benefit. The 

Commission finds that the Act directs 

them to prohibit non-facilities-based 

providers from receiving a high-cost 

area benefit as such providers would not 

experience an inability to maintain their 

network absent the application of the 

high-cost benefit. For purposes of this 

final rule, the Commission defines 

facilities-based provider consistent with 

its rules regarding the Form 477 

collection, to include provider owned 

physical facilities, and wireless 

spectrum. The Commission directs the 

Universal Service Administrative 

Company (USAC) to validate and verify 

a provider’s facilities-based status as 

part of the process of approving 

providers to offer the high-cost area 

benefit. Providers will additionally be 

required to certify to their status as a 

facilities-based provider as part of their 

application to offer the high-cost area 

benefit. 

15. Showing to Support Request for 

Approval to Offer the High-Cost Area 

Benefit. The Commission’s objective is 

to administer the high-cost area benefit 

consistent with the statutory language 

requiring, among other things, a 

showing of particularized economic 

hardship by the ACP provider balanced 

with ‘‘a minimal burden on qualifying 

households and providers.’’ In 

implementing this approach, the 

Commission seeks to safeguard program 

integrity while also minimizing the 

administrative burden for a provider 

seeking to demonstrate that it is unable 

to cover the costs of operating and 

maintaining all or part of its network 

operations in the high-cost area(s) 

absent the high-cost area benefit. 

16. The Commission outlines the type 

of documentation that it expects would 

be sufficient for a provider to 

demonstrate that it is experiencing 

‘‘particularized economic hardship’’ for 

purposes of the high-cost area benefit. 

Participating providers must 

demonstrate particularized economic 

hardship by submitting an affidavit 

supported by an income statement 

demonstrating the provider is currently 

operating at a loss in each high-cost 

area(s) for which the provider is seeking 

approval to offer the high-cost area 

benefit. To facilitate the administration 

of the benefit and minimize provider 

burdens, providers may submit a single 

application with supporting 

documentation for all of the high-cost 

areas where they are seeking approval to 

offer the high-cost area benefit. 

17. To support its affidavit, the 

provider must include a copy of its most 

recent income statement(s), prepared in 

the ordinary course of business, 

consolidated and at the component 

level, as applicable, covering the 

previous fiscal year of operations or the 

last six quarters of operations, and 

separately identify, in the method 

determined by the Wireline Competition 

Bureau (the Bureau), the high-cost areas, 

as designated by NTIA, that the provider 

serves and in which it is seeking to 

provide the high-cost area benefit. An 

income statement, otherwise known as 

a profit and loss statement, showing the 

provider’s revenue, expenses, gains, and 

losses during the required time period, 

strikes the appropriate balance between 

ensuring the high-cost area benefit is 

appropriately limited and minimizing 

the administrative burden on providers. 

An income statement is a routine 

financial statement prepared by 

companies, and thus most providers 

already prepare such statements in the 

normal course of business. The income 

statement must, at a minimum, include 

detailed information on the provider’s 

net income, operating revenue and 

operating expenses, including, but not 

necessarily limited to, cost of goods sold 

or services, selling, general and 

administrative expenses and 

depreciation or amortization expenses. 

To protect program integrity providers 

that are publicly traded or that prepare 

audited income statements in the 

ordinary course of business shall be 

required to submit the audited income 

statement, rather than an unaudited 

income statement, to support their 

affidavit. The Commission delegates 

authority to the Bureau, in consultation 

with the Office of Economics and 

Analytics (OEA) as appropriate, and 

consistent with the standard established 

in this Order, to further specify or 

modify the types of documentation that 

providers must submit to show 

‘‘particularized economic hardship’’. 

18. To protect program integrity, and 

consistent with other submissions made 

to justify the receipt of a Federal benefit, 

such an affidavit shall be made under 

penalty of perjury from a company 

officer with knowledge of the provider 

company’s costs and revenues. The 

affidavit must describe in sufficient 

detail the methodology used for 

determining that the annualized 

expenses of maintaining the operation 

of the provider’s broadband network in 

a particular high-cost area exceeds the 

provider’s expected total revenues in 

that high-cost area. This should include 

an allocation of provider broadband 

internet access service revenues and 

costs for the relevant high-cost area(s) if 

the income statement is too broad to 

demonstrate that the provider is 

operating at a loss relative to providing 

broadband internet access service in the 

high-cost area(s) in question. The 

affidavit should also factor in payments 

from customers for broadband internet 

access service as well as the up-to-$30 

ACP benefit and additional subsidies 

and other financial benefits received, 

including USF high-cost support related 

to providing broadband internet access 

service. The affidavit must also include 

an explanation as to how the economic 

hardship resulting from the operating 

loss may limit the provider’s ability to 

maintain the operation of all or part of 

its broadband network in the high-cost 

area(s) for which it seeks to offer the 

high-cost area benefit. Additionally, in 

the affidavit, each provider must 

explain when and why the provider 

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60350 Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations 

cost area(s). In support of the affidavit 

a provider is also required to submit any 

Federal income tax returns relating to 

the submitted income statements. These 

tax returns could be used to identify 

anomalies or other potential issues in 

the financial data being provided as part 

of the application for the high-cost area 

benefit. 

19. To demonstrate that a provider is 

operating at a loss, the income 

statement, and cost-allocation as 

applicable, must show that the 

provider’s broadband revenue has been 

below broadband expenses in at least 

four of the last six fiscal quarters or for 

the last full fiscal year for each relevant 

high-cost area. If the income statement 

includes costs and revenues for 

broadband network operations outside 

of the high-cost areas for which the 

provider seeks approval to offer the 

high-cost area benefit, then the provider 

will need to allocate the costs and 

revenues associated with the relevant 

high-cost area(s) and provide the cost 

and revenue allocation for the high-cost 

area(s) in the supporting affidavit. 

20. To determine the share of the 

provider’s total operating costs that are 

associated with its broadband network 

operations in the relevant high-cost 

area(s), the provider must use a 

reasonable cost assignment and/or costallocation method. A provider should 

first attempt to directly assign or 

attribute costs to broadband internet 

access services and to the relevant highcost area(s). Costs that are not directly 

assignable (e.g., common or shared 

costs) should be allocated based on a 

cost-causative mechanism wherein the 

participating provider should identify a 

cost-causative link to an expense 

category (or group of categories) that has 

already been directly assigned or 

attributed. Finally, where none of the 

methods described in this document are 

possible, the participating provider 

should employ a reasonable costallocation of operating expenses, which 

may be based on factors, such as, for the 

relevant high-cost area(s), the share of a 

provider’s total investments, total 

locations served, or in proportion to the 

share of directly assignable investments 

or expenses for the relevant high-cost 

area(s). Different cost allocators may be 

used to allocate different shared costs 

and must be sufficiently described in 

the supporting affidavit. For providers 

applying for multiple high-cost areas, 

the cost allocation methods should be 

consistent for all relevant high-cost 

areas to the extent feasible. To 

determine the share of the provider’s 

total revenues associated with its 

broadband network operations in the 

relevant high-cost area(s), the provider 

must calculate and allocate revenue for 

the relevant time periods based on 

revenues for the applicable high-cost 

area(s), and account for any subsidies 

received by the provider or other 

financial benefits, including USF highcost support. Regardless of which cost 

allocation methods is used, all 

company-wide financial data submitted 

in support of an application for the 

high-cost area benefit must comply with 

generally accepted accounting 

principles. 

21. To maximize flexibility, the 

Commission will allow a provider to 

choose the reasonable cost and revenue 

allocation method(s) within the 

parameters described in this document, 

rather than prescribe one. To mitigate 

any program integrity issues that this 

discretion might introduce, however, 

the Commission requires providers to 

identify and justify their chosen 

allocation method(s). Allowing 

providers options for reasonable cost 

and revenue allocation method(s) will 

allow even those providers with limited 

financial expertise to submit a showing 

based on their records that meets the 

standards adopted herein. The 

Commission directs the Bureau to 

develop a more detailed process for 

determining, in consultation with OEA, 

whether the provider’s allocation 

method and justification are reasonable. 

22. Notwithstanding the 

Commission’s recognition that the needs 

to minimize the burden on participating 

providers and to encourage provider 

participation in the ACP are paramount, 

the Commission requires the filing of 

documentation showing that a provider 

will experience particularized economic 

hardship, which shall include the filing 

of both an affidavit with the information 

outlined in this document, along with 

the required income statement, and tax 

filings. An income statement alone 

would not provide sufficient assurances 

that a provider has satisfied the 

standard for offering the high-cost area 

benefit in a given high-cost area. The 

affidavit is an important safeguard for 

ensuring that the high-cost area benefit 

is appropriately limited to providers 

that are facing ‘‘particularized economic 

hardship’’ such that they will be unable 

to maintain part or all of their 

broadband network if they can only 

offer the standard $30 ACP benefit. The 

Commission recognizes that providers 

may not routinely prepare costallocations specific to the relevant highcost areas. However, for income 

statements that are not specific to the 

relevant high-cost areas, cost allocations 

are necessary to satisfy the statute’s 

requirement that the high-cost area 

benefit only be made available in highcost areas where the provider 

experiences economic hardship. As 

noted earlier, to minimize the burden 

associated with cost-allocations, the 

Commission allows providers some 

flexibility in determining which costallocation method to use where the 

provider is unable to directly assign or 

attribute costs to broadband internet 

access services and to the relevant highcost area(s) or use a cost-causative 

mechanism. An affidavit accompanying 

an income statement strikes the 

appropriate balance between protecting 

program integrity while minimizing the 

burden on providers. 

23. Commenters stressed the 

importance of the Commission choosing 

a means for ‘‘qualification that imposes 

the least administrative burdens on 

providers, while protecting against 

waste, fraud, and abuse.’’ The 

Commission agrees, although it also 

concludes that proposals that effectively 

eliminate the need for any showing 

altogether are at odds with the statute. 

Similarly, the Commission finds that a 

mere certification as to a provider’s 

particularized economic hardship in the 

high-cost area(s) it serves, as suggested 

by ACA Connects, is insufficient to 

satisfy the express ‘‘showing’’ mandated 

by Congress and impedes the 

Commission’s ability to ascertain 

whether the provider is, in fact, 

experiencing a particularized economic 

hardship. 

24. The Commission declines to adopt 

the suggestion from the Mississippi 

Center for Justice that it requires service 

providers to submit additional speed 

and coverage tests before allowing a 

broadband service provider to receive 

the high-cost area benefit. While the 

Commission is sympathetic to concerns 

about whether a provider’s asserted 

coverage and speed matches actual 

network performance, the Infrastructure 

Act is clear that the only criterion it may 

consider when deciding whether a 

provider can receive the high-cost area 

benefit, is whether the absence of a 

high-cost area benefit would cause a 

particularized economic hardship to the 

provider. Furthermore, the Commission 

has taken steps in other proceedings to 

address service quality concerns and the 

reporting of accurate coverage and 

speed data. Accordingly, the 

Commission declines to require 

participating providers to perform these 

additional tests. 

25. Additional Information Required 

for High-Cost Area Benefit Application. 

To facilitate the evaluation of a provider 

request for approval to offer the highcost area benefit and to help protect 

program integrity, the Commission 

directs USAC to communicate with the 


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Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations 60351 

provider about its request and collect 

information, as part of the application 

for approval to offer the high-cost area 

benefit, sufficient to identify the 

provider and the nature of the services 

it offers in the relevant high-cost areas, 

such as: contact information; FCC 

Registration Number; Unique Entity 

Identifier; Federal Tax ID Number; 

Service Provider ID Number; whether 

the provider is facilities-based in the 

relevant high-cost areas; and the nature 

of the provider’s broadband network 

technology in the relevant high-cost 

area(s). Finally, a provider’s submission 

must include certifications from a 

company officer with knowledge of the 

provider’s cost and revenues under 

penalty of perjury that: (1) all 

information submitted is true and 

correct to the best of the filer’s 

knowledge; (2) the provider will comply 

with all applicable statutes and the 

Commission’s rules and orders; and (3) 

the provider will use any reimbursed 

funds received for its intended purpose 

of providing discounted broadband 

internet access services to eligible lowincome households. 

26. To help protect program integrity, 

a participating provider will also be 

required to indicate in its application 

seeking to offer the ACP high-cost area 

benefit whether it has previously 

applied for Federal financial assistance 

in the three fiscal years prior to the 

provider’s application. Upon request, 

the participating provider must submit 

to USAC or the Commission 

applications for loans submitted to the 

U.S. Department of Agriculture Rural 

Utility Service (RUS), approvals or 

denials of such loans, the provider’s 

RUS Operating Report for 

Telecommunications Borrowers filed 

with the RUS, and any financial reports 

filed with a state Public Utility 

Commission, as applicable. The 

requirement to submit these documents 

is an important safeguard against 

provider manipulation of the financial 

information in its application. This 

requirement will also assist USAC in 

ascertaining the validity of the financial 

information in the provider’s 

application materials. Finally, in 

evaluating a provider’s request for 

approval to offer the high-cost area 

benefit and to help protect program 

integrity the Commission or USAC must 

consider the extent to which other 

providers are operating in the high-cost 

area and not requesting this benefit. 

27. Submission and Review of 

Showings and Appeals. The 

Commission directs USAC, under the 

oversight of the Bureau and the Office 

of the Managing Director, to develop a 

mechanism to enable participating 

providers to electronically submit the 

requisite particularized economic 

hardship showings. The Commission 

further directs USAC, under the 

oversight of the Bureau and OEA, to 

produce provider education and 

training materials concerning seeking 

approval to offer the high-cost area 

benefit and the Commission directs the 

Bureau to provide additional guidance 

to providers on the submission process. 

All provider submissions will be treated 

as presumptively confidential and will 

not be available for routine public 

inspection consistent with the Freedom 

of Information Act and the 

Commission’s rules. While the actual 

content of the provider filings will 

remain confidential, the Commission 

directs USAC to publicly issue 

information identifying which providers 

are approved to offer the high-cost area 

benefit and the high-cost areas where 

they are approved to offer it. The 

Commission further directs the Bureau 

to release a Public Notice within 90 

days after NTIA’s determination of highcost areas, announcing the date upon 

which providers can start to submit 

applications requesting authority to 

offer the high-cost area benefit. The 

Bureau shall have the discretion to 

determine whether to establish an initial 

deadline for provider requests or accept 

applications on a rolling basis. 

28. The Commission directs USAC to 

review each economic hardship 

submission for completeness and then 

either approve or deny each submission 

pursuant to guidance and oversight by 

the Bureau and OEA. Each decision by 

USAC shall be made in writing, provide 

a written explanation of the basis for the 

decision, and provide the approval 

period for the high-cost area benefit as 

appropriate. Each USAC decision will 

be subject to the restrictions of 

§ 54.702(c) of the Commission’s rules 

which prohibits USAC from making 

policy, interpreting unclear provisions 

of the statute or rules, or from 

interpreting the intent of Congress. Any 

provider aggrieved by an action taken by 

USAC may seek review of that action, as 

set forth in Subpart I of the 

Commission’s rules. While review of 

that action is pending, a provider will 

be able to submit claims for up to the 

$30 standard monthly benefit. 

Following a successful appeal, 

providers approved to offer the highcost area benefit may submit revised 

claims for eligible households in the 

approved high-cost areas as set forth in 

47 CFR 54.1808. The provider may only 

submit revised claims for up to $75 per 

month per eligible subscriber for the 

snapshot dates from the start of the 

period of approval, and the provider 

will be responsible for passing the full 

benefit amount on to subscribers as a 

discount off the price of their monthly 

bills before seeking reimbursement for 

the high-cost area benefit amount. 

29. The Commission directs USAC to 

make updates to ACP systems, 

including to the National Lifeline 

Accountability Database, as appropriate, 

to allow providers that are approved to 

receive reimbursement for the high-cost 

area benefit to enroll households with 

the high-cost area benefit or to update 

existing ACP subscribers’ records to 

reflect the designated high-cost areas 

associated with the participating 

provider’s approved showing. The 

Commission also directs USAC to 

incorporate the high-cost area benefit 

into the ACP claims and enrollment 

tracker, with a separate column for 

households receiving the up to $75 

high-cost area benefit. The Commission 

further directs USAC, with Bureau 

oversight, to develop provider training 

materials on how to enroll or update 

subscriber information to reflect the 

high-cost area benefit and to seek 

reimbursement for the enhanced benefit 

for eligible households in the relevant 

high-cost areas. 

30. Annual Resubmission 

Requirement. To account for changing 

financial circumstances, participating 

providers approved to offer the highcost area benefit must annually resubmit 

a showing of particularized economic 

hardship to demonstrate continued 

eligibility to offer the high-cost area 

benefit. The Commission directs the 

Bureau to determine any modifications 

providers should make to the financial 

showing for the resubmission, 

consistent with the statutory language 

and standard outlined in this Order, as 

well as the deadline for such 

resubmissions. The deadline shall allow 

sufficient time for review and a 

determination on the renewal 

submission, and provider notification to 

households of any benefit level changes 

as appropriate, before the expiration of 

the prior approval period. The 

Commission directs USAC to issue 

reminders to providers with current 

approvals of the renewal submission 

requirements within at least 30 days and 

at least 15 days of the deadline the 

Bureau announces for resubmissions. 

These reminders shall also inform 

providers that failure to make a 

resubmission will result in the loss of 

their approval to offer the high-cost area 

benefit and the date on which the 

provider must cease offering and can no 

longer claim the high-cost area benefit if 

it does not timely make a renewal 

submission. The Commission directs the 


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Bureau to ensure that the renewal 

resubmissions are reviewed and a 

determination is issued in a reasonable 

timeframe. 

31. There may be instances where a 

provider fails to submit the renewal 

submission, or does not satisfy the 

criteria to offer the high-cost area benefit 

based on its renewal submission. The 

Commission recognizes that the loss of 

the high-cost area benefit may cause a 

financial burden to low-income 

households that would be transitioned 

to the standard discount rather than the 

higher subsidy. To mitigate financial 

hardship and to avoid an accrual of 

household debt related to the loss of the 

high-cost area benefit, the Commission 

adopts several protections for ACP 

households where the provider is no 

longer approved to offer the high-cost 

ACP benefit. If a provider fails to submit 

the renewal submission by the deadline, 

the provider shall provide written 

notice to its ACP households receiving 

the high-cost area benefit at least 30 

days prior to the last date that the 

provider is approved to offer the highcost area benefit and a second notice at 

least 15 days before the last date that the 

provider is approved to offer the highcost area benefit. If USAC determines 

that a provider no longer qualifies for 

the high-cost area benefit based on its 

renewal submission, the provider shall 

also follow the same customer 

notification process and deadlines as 

providers that fail to submit the renewal 

submission by the deadline. Such 

notices shall include: (1) a statement 

that the provider will no longer be 

offering the high-cost benefit; (2) the 

effective date of the loss of the high-cost 

area benefit; (3) a statement that upon 

the effective date of the loss of the highcost area benefit, the ACP-supported 

service purchased by the household will 

no longer be discounted at the higher 

subsidy amount; and (4) the amount the 

household will be expected to pay if it 

continues purchasing the service from 

the provider after the high-cost area 

benefit is no longer available. 

32. The Commission finds that 

providers may transition a household to 

a lower-priced service plan once the 

provider is no longer eligible to offer the 

high-cost area benefit upon advance 

notice to the household and after 

offering a reasonable opportunity for the 

household to agree to retain its current 

service plan or switch to another service 

plan. If the provider offers to transition 

the eligible household to a lower-priced 

plan, the offer to transition must be 

included in the required 30-day and 15- 

day notices, and must: (1) provide 

details about the new plan and monthly 

price; (2) inform the subscribers they 

can opt out of the transition and retain 

their current service plan or change to 

a different service plan than the lowerpriced plan the service provider 

identified; (3) provide instructions for 

opting out of the transition or switching 

plans; and (4) provide the deadline for 

opting out of the transition or switching 

plans. The Commission believes this 

approach minimizes the potential for 

bill shock by allowing providers to 

transition eligible subscribers to a 

lower-priced plan, while also giving 

them an opportunity to opt out of the 

transition and either remain on their 

current service plan or choose another 

service plan. The Commission clarifies 

that moving eligible subscribers to a 

lower-priced plan upon advance notice 

and reasonable opportunity for 

subscribers to opt out of such a 

transition where the high-cost area 

benefit is no longer available does not 

constitute inappropriate down-selling. 

33. Subscriber Initial Notice 

Concerning High-Cost Area Benefit. The 

Commission requires providers to seek 

annual approval to continue offering the 

high-cost area benefit. Accordingly, 

there is a potential for ACP subscribers 

receiving the high-cost area benefit to 

experience financial difficulty if their 

provider ceases being eligible to offer 

the high-cost area benefit. 

34. To promote transparency and 

avoid the potential for subscriber 

confusion, participating providers 

approved to offer the high-cost area 

benefit must provide written notice to 

the subscriber when the provider first 

applies the high-cost area benefit to the 

subscriber’s bill, stating: (1) that the 

subscriber is receiving an high-cost area 

benefit and specifying the difference 

between the standard ACP benefit and 

the high-cost area benefit being applied 

to the subscriber’s ACP service; (2) that 

the receipt of the high-cost area benefit 

is contingent on the provider’s annual 

continued eligibility to offer the highcost area benefit; (3) that the provider is 

required to provide the subscriber 

advance notice if the provider is no 

longer deemed eligible to offer the highcost area benefit; and (4) that the 

provider is required to provide the 

subscriber advance notice of any 

changes to the subscriber’s ACP service 

rate or service plan stemming from any 

loss of the provider’s eligibility to offer 

the high-cost area benefit. 

35. Program Integrity. To ensure that 

providers are only seeking 

reimbursement for households that are 

eligible to receive the ACP high-cost 

area benefit, the Commission directs 

USAC to conduct program integrity 

reviews of claims related to the highcost area benefit on an annual basis, in 

addition to targeted reviews of providers 

approved to offer the high-cost area 

benefit as needed (e.g., based on indicia 

of program integrity risks). The 

Commission recognizes that a risk exists 

where providers receiving the high-cost 

benefit could attempt to raise rates or 

push ACP subscribers to higher priced 

pans to maximize their reimbursement 

for the high-cost area benefit claims. 

The Commission reminds providers that 

they are required to offer the same 

services to ACP households on the same 

terms and conditions as non-ACP 

households and inappropriate upselling 

is a violation of the ACP rules. The 

Commission also clarifies that, as with 

the standard benefit and the enhanced 

Tribal benefit, providers are required to 

pass through the entire benefit to ACP 

eligible households. In addition to 

USAC’s program integrity reviews, the 

Bureau, in coordination with OEA, shall 

also use available data from ACP 

providers to maximize program integrity 

with respect to the high-cost area 

benefit, including, but not limited to, 

inflating rates, or claiming the high-cost 

area benefit for a greater number of 

households than the number of the 

provider’s broadband serviceable 

locations in a given high-cost area. The 

Commission reminds providers that it 

may suspend or remove a participating 

provider from the ACP for a variety of 

reasons, including violations of the 

rules or requirements of ACP or any 

action that indicates a lack of business 

integrity or business honesty that 

seriously and directly affects the 

provider’s responsibilities under the 

ACP or undermines the integrity of the 

program. The Commission further 

directs the Bureau, in coordination with 

USAC, to provide additional details and 

procedures, as necessary, in 

conformance with this Order to ensure 

the efficient functioning of the high-cost 

area benefit. 

36. Lastly, the Commission reminds 

providers that the Infrastructure Act 

allows eligible households to apply the 

ACP benefit to ‘‘any internet service 

offering of the participating provider, at 

the same terms available to households 

that are not eligible households.’’ The 

Commission has found this requirement 

will help ‘‘ensure the marketplace will 

not be limited, and consumers can 

apply the affordable connectivity benefit 

to a plan of their choosing.’’ This, in 

turn, will help minimize concerns that 

‘‘providers may introduce or alter plans 

solely to maximize the reimbursement 

amount.’’ However, as the Commission 

clarified, providers are not precluded 

‘‘from making internet service offerings 

that are only available to ACP 


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subscribers provided that the terms are 

at least as good as plans that are 

available to non-eligible 

households. . . .’’ 

37. Clarification of the Scope of Both 

ACP Enhanced Benefits. The statute is 

silent on whether a household that is 

both eligible for the ACP high-cost area 

benefit and the ACP enhanced 

qualifying Tribal land benefit may 

receive both benefits simultaneously 

However, nothing indicates that 

Congress intended for households in 

this scenario to be eligible to receive 

more than one ACP enhanced benefit. 

Further, allowing households to receive 

both enhanced ACP benefits at the same 

time would not be a fiscally responsible 

use of limited ACP funds. Absent 

Congressional intent to the contrary, the 

Commission clarifies that the ACP 

enhanced benefits are not cumulative 

and thus, a participating provider can 

only offer and seek reimbursement for 

one ACP enhanced benefit to eligible 

households in such situations. 

Accordingly, a participating provider is 

allowed to seek reimbursement for the 

enhanced qualifying Tribal land or the 

high-cost area benefit per eligible 

household up to the maximum benefit 

amount of $75 per month, not both. 

III. Procedural Matters 

A. Paperwork Reduction Act 

38. Pursuant to 47 U.S.C. 1752(h)(2) 

the collection of information sponsored 

or conducted under the regulations 

promulgated in this Order is deemed 

not to constitute a collection of 

information for the purposes of the 

Paperwork Reduction Act, 44 U.S.C. 

3501–3521. 

B. Congressional Review Act 

39. The Commission has determined, 

and the Administrator of the Office of 

Information and Regulatory Affairs, 

OMB, concurs, that this rule is nonmajor under the Congressional Review 

Act, 5 U.S.C. 804(2). The Commission 

will send a copy of this final rule to 

Congress and the Government 

Accountability Office pursuant to 5 

U.S.C. 801(a)(1)(A). 

40. As required by the Regulatory 

Flexibility Act of 1980, as amended 

(RFA), an Initial Regulatory Flexibility 

Analysis (IRFA) was incorporated in the 

Notice of Proposed Rulemaking (NPRM) 

released in March 2021. The 

Commission sought written public 

comment on the proposals in the Notice, 

including comment on the IRFA. No 

comments were filed addressing the 

IRFA. This Final Regulatory Flexibility 

Analysis (FRFA) conforms to the RFA. 

41. In the Infrastructure Act, Congress 

established the ACP, which is designed 

to promote access to broadband internet 

access services by households that meet 

specified eligibility criteria by providing 

funding for participating providers to 

offer certain services and connected 

devices to these households at 

discounted prices. The ACP funds an 

affordable connectivity benefit 

consisting of a per month discount up 

to $30 on the price of broadband 

internet access services that 

participating providers supply to 

eligible households in most parts of the 

country and a per month discount up to 

$75 on such prices for households on 

qualifying Tribal lands. The 

Commission established rules governing 

the affordable connectivity standard $30 

benefit and the enhanced Tribal lands 

benefit in the ACP Report and Order, 87 

FR 8346, February 14, 2022, adopted on 

January 14, 2022. 

42. The Infrastructure Act also 

establishes a separate, enhanced 

affordable connectivity benefit for 

eligible households served by 

participating providers in certain highcost areas. Specifically, the 

Infrastructure Act makes available a 

high-cost area benefit of up to $75 per 

month for broadband internet access 

service offered by participating 

providers in certain areas where the cost 

of building broadband facilities is 

relatively high, upon a showing that the 

lower $30 per month benefit ‘‘would 

cause particularized economic hardship 

to the provider such that the provider 

may not be able to maintain the 

operation of part or all of its broadband 

network.’’ In the earlier NPRM to which 

the IRFA applied, the Commission 

sought comment on the rules to 

implement this enhanced benefit. 

43. In the Order, the Commission 

adopts the rules necessary to implement 

the enhanced benefit in high-cost areas 

the NTIA designated in consultation 

with the Commission. Specifically, the 

Commission addresses the rules and 

procedures for participating providers 

that are facilities-based to offer an highcost area benefit to eligible households 

located in designated high-cost areas 

served by the provider. The Commission 

defines ‘‘particularized economic 

hardship’’ for purposes of determining 

eligibility for the high-cost area benefit. 

The Commission then addresses the 

specific showing that participating 

providers must make to demonstrate 

they are experiencing a particularized 

economic hardship. The Commission 

also prescribes the process for 

submitting, reviewing, taking action on 

such showings, and for requests for 

review of adverse decisions. 

44. The RFA directs agencies to 

provide a description of, and where 

feasible, an estimate of the number of 

small entities that may be affected by 

the proposed rules, if adopted. The RFA 

generally defines the term ‘‘small 

entity’’ as having the same meaning as 

the terms ‘‘small business,’’ ‘‘small 

organization,’’ and ‘‘small governmental 

jurisdiction.’’ In addition, the term 

‘‘small business’’ has the same meaning 

as the term ‘‘small business concern’’ 

under the Small Business Act. A small 

business concern is one that: (1) is 

independently owned and operated; (2) 

is not dominant in its field of operation; 

(3) satisfies any additional criteria 

established by the Small Business 

Administration (SBA). 

45. Small Businesses, Small 

Organizations, and Small Governmental 

Jurisdictions. Small Businesses, Small 

Organizations, Small Governmental 

Jurisdictions. The Commission’s 

actions, over time, may affect small 

entities that are not easily categorized at 

present. The Commission therefore 

describes, at the outset, three broad 

groups of small entities that could be 

directly affected herein. First, while 

there are industry specific size 

standards for small businesses that are 

used in the regulatory flexibility 

analysis, according to data from the 

SBA’s Office of Advocacy, in general a 

small business is an independent 

business having fewer than 500 

employees. These types of small 

businesses represent 99.9% of all 

businesses in the United States, which 

translates to 32.5 million businesses. 

46. Next, the type of small entity 

described as a ‘‘small organization’’ is 

generally ‘‘any not-for-profit enterprise 

which is independently owned and 

operated and is not dominant in its 

field.’’ The Internal Revenue Service 

(IRS) uses a revenue benchmark of 

$50,000 or less to delineate its annual 

electronic filing requirements for small 

exempt organizations. Nationwide, for 

tax year 2020, there were approximately 

447,689 small exempt organizations in 

the U.S. reporting revenues of $50,000 

or less according to the registration and 

tax data for exempt organizations 

available from the IRS. 


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47. Finally, the small entity described 

as a ‘‘small governmental jurisdiction’’ 

is defined generally as ‘‘governments of 

cities, counties, towns, townships, 

villages, school districts, or special 

districts, with a population of less than 

fifty thousand.’’ U.S. Census Bureau 

data from the 2017 Census of 

Governments indicate there were 90,075 

local governmental jurisdictions 

consisting of general purpose 

governments and special purpose 

governments in the United States. Of 

this number, there were 36,931 general 

purpose governments (county, 

municipal, and town or township) with 

populations of less than 50,000 and 

12,040 special purpose governments— 

independent school districts with 

enrollment populations of less than 

50,000. Accordingly, based on the 2017 

U.S. Census of Governments data, the 

Commission estimates that at least 

48,971 entities fall into the category of 

‘‘small governmental jurisdictions.’’ 

48. Small entities potentially affected 

by the rules herein include Wireless 

Broadband internet Access Service 

Providers (Wireless ISPs or WISPs). 

49. High-Cost Area Benefit. Providers 

of wireline or wireless broadband 

internet access services, including small 

businesses, that voluntarily seek to 

qualify for the enhanced benefit will 

need to report and retain certain data 

about their operations. The necessary 

data include the costs of deploying and 

maintaining broadband internet access 

networks in particular high-cost areas, 

including the cost of capital, 

depreciation expenses, operating costs, 

and other associated expenses. These 

costs may vary, in part, depending on 

the topological features, population 

distribution, and other conditions in 

such areas. Other relevant factors may 

include estimates of consumer demand 

and likely revenues from providing 

broadband internet access services. 

Importantly, no small entity will be 

required to report or retain such data as 

a general matter. 

50. The recordkeeping or reporting 

requirements adopted in this proceeding 

will apply only to those providers that 

choose to participate in the ACP and 

that voluntarily seek to provide service 

that qualifies for the enhanced benefit in 

high-cost areas where the benefit may be 

available. Moreover, because 

participation is entirely optional, the 

Commission believes that providers that 

voluntarily avail themselves of the 

enhanced benefit component of the ACP 

will enjoy benefits that far exceed the 

reporting and recordkeeping costs. 

51. The Commission therefore finds 

the cost of compliance for small entities 

will be minimal given the steps taken to 

minimize the administrative burden as 

discussed in this FRFA. 

52. The RFA requires an agency to 

describe any significant, specifically 

small business alternatives that it has 

considered in reaching its approach, 

which may include the following four 

alternatives (among others): ‘‘(1) the 

establishment of differing compliance or 

reporting requirements or timetables 

that take into account the resources 

available to small entities; (2) the 

clarification, consolidation, or 

simplification of compliance or 

reporting requirements under the rule 

for such small entities; (3) the use of 

performance, rather than design, 

standards; and (4) and exemption from 

coverage of the rule, or any part thereof, 

for such small entities.’’ 

53. The actions taken by the 

Commission in this final rule were 

considered to be the least costly and 

minimally burdensome for small and 

other entities impacted by the rules. As 

such, the Commission does not expect 

the adopted requirements to have a 

significant economic impact on small 

entities. In the following, the 

Commission discusses actions it takes in 

this final rule to minimize any 

significant economic impact on small 

entities and some alternatives that were 

considered. 

54. High-Cost Area Benefit. As 

discussed in this FRFA, the Commission 

is constrained by the plain language of 

the statute to require a participating 

provider to make a showing of 

‘‘particularized economic hardship’’ to 

offer the high-cost area benefit. Such a 

showing inevitably involves a measure 

of a provider’s costs and revenues. The 

Commission has, however, taken steps 

to minimize the burden on small 

entities. A provider will only need to 

submit an affidavit asserting it will 

incur a ‘‘particularized economic 

hardship’’ and supply an income 

statement, that businesses routinely 

keep in the normal course of business, 

to show the provider is operating at a 

loss. Only if the income statement 

includes costs and revenues for areas 

outside of the designated high-cost 

areas, would the provider need to 

submit information, in addition to the 

income statement and an affidavit, to 

allocate costs and revenues to the highcost areas it intends to serve. These 

steps will greatly minimize the 

administrative burden on all providers 

that voluntarily seek to offer the highcost area benefit, including small 

providers, by eliminating the need, in 

the first instance, to gather and submit 

specific cost and revenue information 

for review and analysis. The 

Commission did consider the proposal 

to define ‘‘particularized economic 

hardship’’ as the serving of less than a 

Commission-defined threshold of 

broadband subscribers across a smaller 

provider’s entire service area, but 

determined this approach was 

inconsistent with the statutory language, 

as discussed in this final rule. 

IV. Ordering Clauses 

55. Accordingly, it is ordered that, 

pursuant to the authority contained in 

Section 904 of Division N, Title IX of 

the Consolidated Appropriations Act, 

2021, Public Law 116–260, 134 Stat. 

1182, as amended by Section 60502 of 

the Infrastructure Investment and Jobs 

Act and codified at 47 U.S.C. 1752, this 

Sixth Report and Order, is adopted and 

shall be effective thirty (30) days after 

publication of the text or summary 

thereof in the Federal Register. 

56. It is further ordered, that Part 54 

of the Commission’s rules, 47 CFR part 

54, is amended as set forth in this 

document, and such rule amendments 

shall be effective thirty (30) days 

following publication of the text or 

summary thereof in the Federal 

Register. 

List of Subjects in 47 CFR Part 54 

Communications common carriers, 

Health facilities, Infants and children, 

internet, Libraries, Puerto Rico, 

Reporting and recordkeeping 

requirements, Schools, 

Telecommunications, Telephone, Virgin 

Islands. 

Federal Communications Commission. 

Katura Jackson, 

Federal Register Liaison Officer. 

Final Regulations 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends part 54 of title 47 

of the Code of Federal Regulations as 

follows: 

PART 54—UNIVERSAL SERVICE 

■ 1. The authority citation for part 54 

continues to read as follows: 

Authority: 47 U.S.C. 151, 154(i), 155, 201, 

205, 214, 219, 220, 229, 254, 303(r), 403, 

1004, 1302, 1601–1609, 1752, unless 

otherwise noted. 

Subpart R—Affordable Connectivity 

Program 

■ 2. Amend § 54.1803 by revising 

paragraph (a) to read as follows: 

§ 54.1803 Affordable Connectivity Program 

support amounts. 

(a) The monthly affordable 

connectivity benefit support amount for 

all participating providers shall equal 


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the actual discount provided to an 

eligible household off of the actual 

amount charged to such household but 

not more than $30.00 per month, if that 

provider certifies that it will pass 

through the full amount of support to 

the eligible household, or not more than 

$75.00 per month, if that provider 

certifies that it will pass through the full 

amount of support to the eligible 

household on Tribal lands, as defined in 

§ 54.1800(s), or not more than $75.00 

per month, if that provider certifies that 

it will pass through the full amount of 

support to the eligible household in a 

high-cost area, as defined in 

§ 54.1814(a), and is approved to offer 

the enhanced high-cost benefit in that 

high-cost area pursuant to the process in 

§ 54.1814(b). 

* * * * * 

■ 3. Add § 54.1814 to read as follows: 

§ 54.1814 High-cost area benefit. 

(a) Definitions—(1) Audited income 

statement. For purposes of the 

administration of the Affordable 

Connectivity Program high-cost area 

benefit, an ‘‘audited income statement’’ 

is an income statement that has been 

audited by an independent Certified 

Public Accountant (CPA). 

(2) Component-level income 

statement. For purposes of the 

administration of the Affordable 

Connectivity Program high-cost area 

benefit, a ‘‘component-level income 

statement’’ is an income statement that 

shows financial results for the 

subsidiary or business component that 

is operating and/or offering retail 

broadband internet access service for 

sale in the designated high-cost areas as 

defined by 47 U.S.C. 1702(a)(2)(G). 

(3) Consolidated income statement. 

For purposes of the administration of 

the Affordable Connectivity Program 

high-cost area benefit, a ‘‘consolidated 

income statement’’ is an income 

statement that shows aggregated 

financial results for multiple entities or 

subsidiaries connected with a single 

parent company. 

(4) High-cost area. For purposes of the 

administration of the Affordable 

Connectivity Program high-cost area 

benefit, the term ‘‘high-cost area’’ means 

an area as defined by 47 U.S.C. 

1702(a)(2)(G) as determined by the 

National Telecommunications and 

Information Administration. 

(5) Particularized economic hardship. 

A provider has a ‘‘particularized 

economic hardship’’ in a high-cost area 

only if: 

(i) It is not possible for that provider 

to offer service in the high-cost area 

while covering the costs of maintaining 

the operation of all or part of its 

broadband network in that area at the 

standard up to $30 a month discount; 

and 

(ii) The up to $75 a month high-cost 

area benefit would materially improve 

the provider’s ability to offer service 

through the ACP and maintain and 

operate its broadband network in that 

area. 

(b) High-cost area benefit approval 

process. A facilities-based ACP 

participating provider in a high-cost 

area (as defined in paragraph (a) of this 

section) may provide an affordable 

connectivity benefit in an amount up to 

$75.00 for a broadband internet access 

service offering in a high-cost area upon 

a showing that the applicability of the 

standard up to $30.00 benefit under 

§ 54.1803(a) by the provider would 

cause particularized economic hardship 

to the provider such that the provider 

may not be able to maintain the 

operation of part or all of its broadband 

network in that high-cost area. 

(1) A participating provider seeking 

approval to provide the high-cost area 

benefit must first electronically file a 

request with the Universal Service 

Administrative Company by the 

deadline established by the Wireline 

Competition Bureau. 

(i) The electronic request shall require 

the participating provider to specify 

whether it has previously applied for 

Federal financial assistance, as defined 

in 2 CFR 25.406, in the three fiscal years 

prior to the provider’s application. 

Upon request, the participating provider 

must submit to the Administrator or the 

Commission applications for loans 

submitted to the U.S. Department of 

Agriculture Rural Utility Service (RUS), 

approvals or denials of such loans, the 

provider’s RUS Operating Report for 

Telecommunications Borrowers filed 

with the RUS, and any financial reports 

filed with a state Public Utility 

Commission, as applicable. 

(ii) [Reserved] 

(2) The participating provider’s 

request shall include the documentation 

required to demonstrate particularized 

economic hardship. The request shall 

include an income statement, a 

supporting affidavit, any applicable 

Federal tax filings and/or returns, and 

any other relevant documentation as 

determined by the Bureau and OEA. 

(i) The income statement(s) must: 

(A) Be produced in the ordinary 

course of business; 

(B) Include both consolidated and 

component-level income statements; 

(C) Be audited by an independent 

public accountant, where such 

statements are produced in the ordinary 

course of business or are required by 17 

U.S.C. 78m, 78o(d); and 

(D) Include detailed information on 

the provider’s net income, operating 

revenue, and operating expenses, 

including, but not necessarily limited 

to, cost of goods sold or services, selling, 

general and administrative expenses 

and depreciation or amortization 

expenses. 

(ii) The supporting affidavit, must 

include revenue and cost allocations 

and a description of the methodology, 

demonstrating that the provider was 

operating at a loss related to providing 

broadband internet access service in the 

relevant high-cost area(s) for the last 

fiscal year or in at least four of the last 

six fiscal quarters, or other acceptable 

documentation determined by the 

Wireline Competition Bureau in 

consultation with the Office of 

Economics and Analytics. 

(iii) The participating provider must 

first attempt to directly assign or 

attribute costs to broadband internet 

access services, and if that is not 

possible, must use a cost-causative 

mechanism to the extent possible. If 

neither is possible, the participating 

provider must employ a reasonable costallocation with a justification for its 

methodology. 

(iv) The tax filing should include 

Form 1120, Form 1120–S or other 

applicable Federal Income Tax returns 

as required by 26 CFR part 1. 

(2) The participating provider’s 

application must also include 

certifications from a company officer 

with knowledge of the provider’s cost 

and revenues under penalty of perjury 

that: 

(i) All information submitted is true 

and correct to the best of the filer’s 

knowledge; 

(ii) The provider will comply with all 

applicable statutes and the 

Commission’s rules and orders; and 

(iii) The provider will use any 

reimbursed funds received for its 

intended purpose of providing 

discounted broadband internet access 

services to eligible low-income 

households. 

(iv) The provider is a facilities-based 

provider as defined by 47 CFR 

1.7001(a)(2)(i) through (v). 

(v) The provider used cost allocation 

methodology consistent with the rules. 

(c) Review process. The 

Administrator, under oversight of the 

Wireline Competition Bureau and the 

Office of Economics and Analytics, shall 

review each participating provider’s 

request to offer the high-cost area 

benefit and determine whether the 

provider has demonstrated a 

particularized economic hardship in the 


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60356 Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations 

high-cost areas for which it is requesting 

to offer the high-cost area benefit. If the 

Administrator finds the particularized 

economic hardship showing is satisfied 

in accordance with the Commission’s 

rules and orders, and any guidance from 

the Wireline Competition Bureau and 

the Office of Economics and Analytics, 

then the Administrator will approve the 

request and notify the participating 

provider. Otherwise, the Administrator 

will deny the request and provide the 

participating provider a written 

explanation of the basis for the denial. 

(1) The Administrator will review 

applications within a timeline to be 

determined by the Bureau. 

(2) Providers may appeal the 

Administrator’s determination as set 

forth in subpart I in this part of the 

Commission’s rules. 

(3) Providers may only submit claims 

for up to the $30.00 standard benefit 

amount while an appeal of an 

Administrator’s determination is 

underway. Following a successful 

appeal, providers approved to offer the 

high-cost area benefit may submit 

revised claims for eligible households in 

the approved high-cost areas as set forth 

in § 54.1808. The provider many submit 

revised claims for up to $75.00 only 

from the start of the approval period 

indicated in the appeal determination 

letter. 

(d) Annual renewal process. A 

participating provider that has been 

approved to provide the high-cost area 

benefit must request approval annually 

thereafter to continue to provide the 

enhanced benefit to eligible households 

in a subsequent year. The participating 

provider will need to demonstrate 

particularized economic hardship in the 

renewal submission, through the 

documentation specified by the 

Wireline Competition Bureau. The 

deadline for submitting the renewal 

request shall be determined by the 

Wireline Competition Bureau. 

(e) Notice to eligible households. (1) 

Participating providers approved to 

offer the high-cost area benefit shall 

provide Affordable Connectivity 

Program subscribers written notice 

when the provider begins applying the 

high-cost area benefit to the subscriber’s 

bill. The written notice must state: 

(i) That the subscriber is receiving a 

high-cost area benefit and the difference 

between the standard benefit amount 

and the enhanced high-cost benefit 

being applied to the subscriber’s 

supported service; 

(ii) That the receipt of the high-cost 

area benefit is contingent on the 

provider’s annual continued eligibility 

to offer the enhanced high-cost area 

benefit; 

(iii) That the provider is required to 

provide the subscriber advance notice if 

the provider is no longer deemed 

eligible to offer the high-cost area 

benefit; and 

(iv) That the provider is required to 

provide the subscriber advance notice of 

any changes to the subscriber’s 

supported service rate or service plan 

stemming from any loss of the 

provider’s eligibility to offer the highcost area benefit. 

(2) If a participating provider fails to 

timely submit the renewal submission 

by the deadline or no longer qualifies to 

offer the high-cost area benefit based on 

its annual resubmission, then the 

participating provider shall provide 

written notice to its Affordable 

Connectivity Program customers 

receiving the high-cost area benefit at 

least 30 days and at least 15 days before 

the expiration of its approval to offer the 

high-cost area benefit. Such subscriber 

notices shall include: 

(i) A statement that the provider will 

no longer be offering the high-cost area 

benefit in the relevant high-cost area; 

(ii) The effective date of the end of the 

high-cost area benefit; 

(iii) A statement that upon the 

effective date of the loss of the high-cost 

area benefit, the Affordable Connectivity 

Program supported service purchased 

by the household will no longer be 

discounted at the higher subsidy 

amount; and 

(iv) The amount the household will be 

expected to pay if it continues 

purchasing the service from the 

provider after the high-cost area benefit 

is no longer available. 

(3) If a participating provider is no 

longer authorized to offer the high-cost 

area benefit, the provider may transition 

an eligible household to a lower-priced 

ACP service plan once the high-cost 

area benefit is no longer available, upon 

advance notice to the household and an 

opportunity for the household to opt out 

of the change and remain on its current 

service plan or select another service 

plan. Participating providers must 

include the advance transition notice in 

the required written notice about the 

end of the provider’s approval to offer 

the high-cost area benefit. The advanced 

notice must: 

(i) Provide details about the new plan 

and monthly price; 

(ii) State that the subscriber may 

remain on its current plan or choose 

another plan; 

(iii) Provide instructions on how the 

subscriber can opt out of the transition 

or change its service plan; 

(iv) Provide the deadline for the 

subscriber to notify the provider that the 

subscriber would like to remain on its 

current plan or choose another plan. 

[FR Doc. 2023–18621 Filed 8–31–23; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF TRANSPORTATION 

Pipeline and Hazardous Materials 

Safety Administration 

49 CFR Part 172 

[Docket No. PHMSA–2021–0058 (HM–264A)] 

RIN 2137–AF55 

Hazardous Materials: Suspension of 

HMR Amendments Authorizing 

Transportation of Liquefied Natural 

Gas by Rail 

AGENCY: Pipeline and Hazardous 

Materials Safety Administration 

(PHMSA), Department of Transportation 

(DOT). 

ACTION: Final rule. 

SUMMARY: PHMSA, in coordination with 

the Federal Railroad Administration 

(FRA), is amending the Hazardous 

Materials Regulations to suspend 

authorization of liquefied natural gas 

(LNG) transportation in rail tank cars 

pursuant to a final rule published on 

July 24, 2020, pending the earlier of 

either completion of a companion 

rulemaking evaluating potential 

modifications to requirements governing 

rail tank car transportation of LNG, or 

June 30, 2025. 

DATES: This final rule is effective on 

October 31, 2023. 

FOR FURTHER INFORMATION CONTACT: 

Alexander Wolcott, Transportation 

Specialist, Standards and Rulemaking 

Division, Office of Hazardous Materials 

Safety, (202) 366–8553, 1200 New Jersey 

Avenue SE, Washington, DC 20590– 

0001. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Overview 

II. Background 

A. Historical Regulation of LNG by Rail 

B. A New Regulatory Approach and 

Enabling Research 

C. Another Hard Look Incorporating 

NASEM Recommendations and Ongoing 

Research Efforts 

D. East Palestine, OH Derailment 

III. Discussion of Comments to the NPRM 

and Adoption of a Temporary 

Suspension of the July 2020 Final Rule 

A. Comments Requesting an Immediate, 

Permanent Ban of LNG by Rail 

B. Comments Requesting the Removal of 

the June 30, 2024, Sunset Date 


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