(1) AMENDMENT.—Subparagraph (A) of sec-
tion 254(h)(1) of the Communications Act of 1934 
(47 U.S.C. 254(h)(1)) is amended to read as follows: 
‘‘(A) HEALTH CARE SERVICES FOR RURAL 
AREAS.—Within 180 days after the date of en-
actment of the Universal Service Reform Act of 
2006, the Commission shall prescribe regula-
tions that provide that a communications serv-
ice provider shall, upon, receiving a bona fide 
request, provide covered services which are nec-
essary for the provision of health care services 
in a State, including instruction relating to 
such services, to any public or nonprofit health 
care provider that serves persons who reside in 
rural areas in that State at rates that are rea-
sonably comparable to rates charged for similar 
services in urban areas in that State. A commu-
nications service provider providing service 
under this subparagraph shall be entitled to 
have an amount equal to the difference, if any, 
between the rates for services provided to health 
care providers for rural areas in a State and 
the rates for similar services in urban areas in 
that State treated as a service obligation as a 
part of its obligation to participate in the mech-
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anisms to preserve and advance universal serv-
ice.’’. 
(2) DEFINITION
OF
HEALTH
CARE
PRO-
VIDER.—Subparagraph (B) of section 254(h)(7) of 
such Act (47 U.S.C. 254(h)(7)(B)) is amended to 
read as follows: 
‘‘(B) HEALTH CARE PROVIDER.—The term 
‘health care provider’ means— 
‘‘(i) post-secondary educational insti-
tutions offering health care instruction, 
teaching hospitals, and medical schools; 
‘‘(ii) community health centers or 
health centers providing health care to mi-
grants; 
‘‘(iii) local health departments or 
agencies; 
‘‘(iv) community mental health cen-
ters; 
‘‘(v) not-for-profit hospitals; 
‘‘(vi) critical access hospitals; 
‘‘(vii) rural hospitals with emergency 
rooms; 
‘‘(viii) rural health clinics; 
‘‘(ix) not-for-profit nursing homes or 
skilled nursing homes; 
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‘‘(x) hospice providers; 
‘‘(xi) emergency medical services fa-
cilities; 
‘‘(xii) rural dialysis facilities; 
‘‘(xiii) elementary, secondary, and 
post-secondary school health clinics; and 
‘‘(xiv) consortia of health care pro-
viders consisting of one or more entities 
described in clauses (i) through (xiii).’’. 
(3) DEFINITION OF RURAL FOR HEALTH CARE 
SUPPORT.—Section 254(h)(7) of such Act is further 
amended by adding at the end the following new 
subparagraph: 
‘‘(J) RURAL AREA.—Within 180 days after 
the date of enactment of the Universal Service 
Reform Act of 2006, the Commission shall pre-
scribe regulations that provide that, for pur-
poses of the rural health care universal service 
support mechanisms established pursuant to 
this subsection, a ‘rural area’ is— 
‘‘(i) any incorporated or unincor-
porated place in the United States, its ter-
ritories and insular possessions (including 
any area within the Federated States of 
Micronesia, the Republic of the Marshall 
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Islands and the Republic of Palau) that 
has no more than 20,000 inhabitants 
based on the most recent available popu-
lation statistics from the Census Bureau; 
‘‘(ii) any area located outside of the 
boundaries of any incorporated or unincor-
porated city, village, or borough having a 
population exceeding 20,000; 
‘‘(iii) any area with a population den-
sity of fewer than 250 persons per square 
mile; or 
‘‘(iv) any place that qualified as a 
‘rural area’ and received support from the 
rural health care support mechanism pur-
suant to the Commission’s rules in effect 
prior to December 1, 2004, and that con-
tinues to qualify as a ‘rural area’ pursuant 
to such rules.’’. 
(c) SCHOOLS, LIBRARIES, RURAL HEALTH CARE, 
LIFE-LINE, LINK-UP, AND TOLL LIMITATION HOLD 
HARMLESS.—Except as provided in subsections (h)(1)(A), 
(h)(7)(B), and (h)(7)(J) of section 254 of the Communica-
tions Act of 1934 (47 U.S.C. 254), as amended by sub-
section (b)— 
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(1) nothing in this Act (and the amendments 
made by this Act) shall be construed as limiting, 
changing, modifying, or altering the amount of sup-
port or means of distribution for the schools, librar-
ies, rural health care, life-line, link-up, and toll limi-
tation programs; and 
(2) the Federal Communications Commission 
shall ensure that such amendments do not result in 
a decrease of such support to a level below the level 
for the fiscal year preceding the fiscal year in which 
this Act is enacted. 
SEC. 5. ELIGIBLE RECIPIENTS OF UNIVERSAL SERVICE 
SUPPORT. 
(a) AMENDMENT.—Section 214(e) of the Commu-
nications Act of 1934 (47 U.S.C. 214(e)) is amended— 
(1) by redesignating paragraphs (3), (4), (5), 
and (6) as paragraphs (6), (7), (9), and (8), respec-
tively, and reordering such paragraphs in numerical 
order; and 
(2) by striking paragraphs (1) and (2) and in-
serting the following: 
‘‘(1) ELIGIBILITY
TO
RECEIVE
UNIVERSAL 
SERVICE SUPPORT.—A communications service pro-
vider shall be eligible to receive universal service 
support in accordance with the requirements of this 
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subsection only if such communications service pro-
vider— 
‘‘(A) uses its own facilities to make avail-
able in a service area the services that have 
been determined by the Commission to be uni-
versal services pursuant to section 254(c), and 
responds to reasonable requests for service from 
persons located anywhere in such service area 
consistent with carrier-of-last-resort require-
ments in the State in which the requesting per-
son is located; 
‘‘(B) advertises the supported services and 
their associated charges throughout the service 
area using media of general distribution, and 
advertises the availability of life-line and link-up 
services in a manner reasonably designed to 
reach those likely to qualify for those services; 
‘‘(C) demonstrates the ability to remain 
functional in emergency situations; 
‘‘(D) satisfies consumer protection and 
service quality standards; and 
‘‘(E) meets the basic requirements for the 
deployment of high-speed broadband service, 
and provides high-speed broadband service, ex-
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cept that the Commission shall establish a proc-
ess— 
‘‘(i) whereby a determination can be 
made to waive the requirements of this 
subparagraph for 3 years upon application 
of a communications service provider dem-
onstrating that the deployment and provi-
sion of high-speed broadband service is not 
technically feasible or would materially im-
pair the communications service provider’s 
ability to continue to provide local ex-
change service throughout its service area, 
except that a waiver shall be deemed auto-
matically granted under this clause for a 
communications service provider which can 
demonstrate that the cost per line of de-
ploying 
and 
providing 
high-speed 
broadband service is at least three times 
the average cost of providing high-speed 
broadband service among all recipients of 
universal service support, subject to the re-
newal provisions set forth in clause (ii); 
‘‘(ii) whereby the communications 
service provider may seek renewal of such 
waiver every 3 years for as long as the de-
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ployment and provision of high-speed 
broadband service is not technically fea-
sible or would materially impair the com-
munications service provider’s ability to 
continue to provide local exchange service 
throughout its service area; and 
‘‘(iii) whereby any application of a 
communications service provider for a 
waiver pursuant to clause (i) on which the 
Commission has not taken final action 
within 60 days of the date of submission to 
the Commission shall be deemed granted. 
‘‘(2) ELIGIBILITY CRITERIA.—In addition to the 
criteria specified in paragraph (1), the Commission 
shall establish such additional eligibility criteria for 
the receipt of universal service support by commu-
nications service providers as it deems necessary and 
in the public interest. The criteria established in 
paragraph (1) and the criteria established by the 
Commission pursuant to this paragraph shall be 
used by State commissions in determining which 
providers shall be designated as eligible recipients of 
universal service support for the purpose of para-
graph (3). 
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‘‘(3) DESIGNATION OF ELIGIBLE RECIPIENTS.— 
A State commission shall, upon its own motion or 
upon request, designate as an eligible recipient of 
universal service support only those providers meet-
ing the requirements of paragraphs (1) and (2). 
‘‘(4) GRANDFATHER PROVISION.—Recipients of 
universal service support in any service area prior to 
the date of enactment of the Universal Service Re-
form Act of 2006 shall meet the eligibility require-
ments for eligible recipients of universal service sup-
port— 
‘‘(A) as described in paragraphs (1)(A) 
through (D) within one year of the date of en-
actment of the Universal Service Reform Act of 
2006; and 
‘‘(B) as described in paragraph (1)(E) 
within 5 years after the date of enactment of 
the Universal Service Reform Act of 2006. 
Failure of such an eligible recipient of universal 
service support to maintain and meet the eligibility 
requirements within the period required by subpara-
graph (A) or (B) after the date of enactment of the 
Universal Service Reform Act of 2006 shall require 
the automatic termination of Federal universal serv-
ice support to that recipient. This paragraph shall 
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not be construed to prohibit such a recipient from 
obtaining a waiver under paragraph (1)(E). 
‘‘(5) STATE AUTHORITY.—Nothing in this Act 
or the Universal Service Reform Act of 2006 pre-
cludes a State from establishing funding mecha-
nisms to preserve and advance universal service 
within that State pursuant to section 254(f) of this 
Act.’’. 
(b) DEFINITIONS.—Paragraph (9) of section 214(e) 
(as redesignated by subsection (a)) is amended to read as 
follows: 
‘‘(9) DEFINITIONS.—As used in this subsection, 
the term ‘service area’ means a geographic area that 
aligns with the area in which a communications 
service provider is licensed or authorized to provide 
service for the purpose of determining universal 
service obligations and support mechanisms. In the 
case of an area served by a rural telephone company, 
‘service area’ means such company’s ‘study area’ or 
the licensed or authorized service area of any other 
communications service provider serving an area 
that overlaps with the service area of a rural tele-
phone company.’’. 
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SEC. 6. REMOVAL OF IMPEDIMENTS TO SUFFICIENT SUP-
PORT MECHANISMS. 
Section 254 of the Communications Act of 1934 is 
amended by adding at the end the following new sub-
section: 
‘‘(m) REMOVAL
OF LIMITATIONS
ON HIGH COST 
SUPPORT MECHANISMS.—The limitations on universal 
service support contained in section 54.305 of the Com-
mission’s regulations (47 C.F.R. 54.305), and the indi-
vidual caps imposed upon carriers contained in section 
36.631 of the Commission’s regulations (47 C.F.R. 
36.631), shall cease to be effective on the date of enact-
ment of the Universal Service Reform Act of 2006. The 
Commission shall not, on or after such date of enactment, 
enforce or reimpose limitations on support mechanisms for 
rural telephone companies or exchanges they acquire 
based on fund size or other considerations unrelated to 
the sufficiency of support to achieve the purposes of this 
section.’’. 
SEC. 7. APPLICATION OF ANTIDEFICIENCY ACT. 
(a) MAKING ANTIDEFICIENCY ACT EXEMPTION PER-
MANENT.—Section 254 of the Communications Act of 
1934 (47 U.S.C. 254) is amended by adding the following 
subsection (n): 
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‘‘(n) APPLICATION OF ANTIDEFICIENCY ACT.—Sec-
tion 1341 and subchapter II of chapter 15 of title 31, 
United States Code, do not apply— 
‘‘(1) to any amount collected or received as 
Federal universal service contributions required by 
this section, including any interest earned on such 
contributions; nor 
‘‘(2) to the expenditure or obligation of 
amounts attributable to such contributions for uni-
versal service support programs established pursuant 
to this section.’’. 
(b) INVESTMENT
OF UNIVERSAL SERVICE FUND 
CONTRIBUTIONS.—Notwithstanding any other provision 
of law, including but not limited to sections 3302, 3321, 
3322, and 3325 of title 31, United States Code, the cash 
balance of receipts of universal service contributions col-
lected pursuant to section 254 of the Communications Act 
of 1934 (47 U.S.C. 254) shall be invested by the Commis-
sion or its designee in conservative, liquid, interest-bearing 
investment vehicles of government backed securities until 
such time as such receipts are disbursed pursuant to sec-
tion 254 of the Communications Act of 1934 (47 U.S.C. 
254). 
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SEC. 8. SCOPE OF SUPPORT. 
The Commission in implementing the requirements of 
this Act with respect to the distribution and use of Federal 
universal service support shall not limit such distribution 
and use to a single connection or primary line, and all 
residential and business lines served by an eligible tele-
communications carrier shall be eligible for Federal uni-
versal service support. 
SEC. 9. REPORT TO CONGRESS. 
The Commission shall, not later than 3 years after 
the date of enactment of this Act and triennially there-
after, report to Congress regarding the availability of the 
services designated by the Commission as universal serv-
ices to all Americans, including schools, libraries, rural 
health care providers, and low income consumers. 
Æ 
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