FCC Establishes ACP Rules in High-Cost Areas Benefits

In a recent Order, the FCC adopted rules to establish the enhanced discounts available for broadband services provided in high-cost areas to eligible Affordable Connectivity Program (ACP) participants. The rules will be effective 30 days after publication in the Federal Register.

The new rules implement a provision of the Infrastructure Investment and Jobs Act (Infrastructure Act) allowing providers to offer up to a $75/month discount on broadband services to eligible ACP households in high-cost areas, where the provider can demonstrate “particularized economic hardship.” The discount for eligible households in high-cost areas will complement the existing ACP discounts of up to $30/month or up to $75/month for eligible households on qualifying Tribal lands. Pursuant to the Infrastructure Act, the applicable high-cost areas are those NTIA identified for use in the Broadband Equity, Access, and Deployment (BEAD) grant program. A map showing those areas can be found here and an explanation of how NTIA made its determination can be found here.

To be eligible for the high-cost area benefit a broadband provider must demonstrate “particularized economic hardship,” based on a showing of loss from the provider’s operating costs and revenues in the high-cost area. A provider can demonstrate "particularized economic hardship” in a high-cost area where (i) the provider is unable to offer service in the area while covering the costs of maintaining the operation of all or part of its broadband network at the standard up to $30/month discount, and (ii) the provider’s ability to offer service and maintain operations in its broadband network would be materially improved through the up to $75/month benefit.

The high-cost area benefit is limited to facilities-based providers, which includes provider-owned physical facilities and wireless spectrum. Providers must submit documentation and certification showing how the economic hardship limits the provider’s ability to maintain the operation of all or part of its broadband network in the high-cost area, including income statements, affidavits, and tax filings and/or returns. To maintain the benefit, providers will also be required to annually certify that they remain eligible for the high-cost area enhanced benefits.

If you have questions about the ACP program, please contact an attorney in our Broadband, Spectrum, and Communications Infrastructure practice group.