The Continuing Appropriations Act, 2021 and Other Extensions Act, a $2.3 trillion COVID-19 relief and omnibus government funding package, contains several noteworthy communications-related measures, including $7 billion in funding for broadband initiatives and expanded television and radio station eligibility for the Paycheck Protection Program administered by the Small Business Administration (SBA).
$7 Billion in Broadband Funding
The legislation’s broadband provisions target funding to both new and existing programs, responding to immediate broadband access and affordability challenges intensified by the pandemic, while also addressing longer-term broadband deployment and network security issues. Specifically, the legislation will provide additional funding for telehealth, create an emergency broadband subsidy program for eligible low-income households, fund increased broadband deployment on Tribal lands and in unserved areas, and support the removal and replacement of communications network equipment and services that pose risks to national security. An overview of these provisions is included below.
FCC’s COVID-19 Telehealth Program
The legislation provides an additional $250 million for the FCC’s COVID-19 Telehealth Program, created by the CARES Act, and the FCC has released a Public Notice seeking comments by January 19, 2021, on the metrics that should be used to evaluate new applications and the treatment of applications filed during the program’s previous funding rounds. This provision also directs the FCC, to the extent feasible, to ensure that at least one applicant in each of the 50 States and the District of Columbia has received funding from the program since its inception. Upon reaching a decision on an application, the FCC will be required to provide applicants with information on the status of the application, a rationale for the final funding decision, and if denied, notice and an additional 10 days for the applicant to provide supplementary information that the Commission can consider before making any final decision on the application. Applicants who filed during the initial funding rounds will also be granted an opportunity to update or amend their applications.
Emergency Broadband Connectivity Program
In a significant step, Congress included a $3.2 billion broadband subsidy program under which the FCC will reimburse participating providers for discounts offered to eligible low-income households off the cost of broadband internet access service and certain connected devices during the covered period set forth in the legislation. Such eligibility will be determined based upon whether someone in the household (1) is qualified to participate in the FCC’s Lifeline program; (2) has applied for and been approved to receive funds under the free and reduced lunch program; (3) has experienced a substantial loss of income since February 29, 2020, that is documented by a layoff or furlough notice, or similar form of documentation; (4) has received a Federal Pell Grant; or (5) is already eligible for a participating provider’s existing low-income or COVID-19 discount program. With respect to provider eligibility, broadband providers do not have to be designated as eligible telecommunications carriers (ETCs) in order to participate in the program, and in fact the legislation requires the FCC to create an expedited approval process for non-ETC providers seeking to participate. Under the subsidy program, participating providers will be reimbursed up to $50 monthly per eligible household for providing broadband service ($75 for an eligible household on Tribal land) and up to $100 per eligible household for providing a connected device (i.e., laptop or tablet) if the household contributes between $10 and $50 toward the device. The program is temporary and will conclude six months after the Secretary of Health and Human Services declares the end of the public health emergency. The FCC has issued a Public Notice seeking comment on implementation issues and must adopt any final rules by February 25, 2021.
Broadband Connectivity Grants
Additionally, the legislation appropriates $1.3 billion to the National Telecommunications and Information Administration (NTIA) to administer grant programs focused on expanding access to broadband, with $1 billion for the Tribal Broadband Connectivity Program and the remaining $300 million for the Broadband Infrastructure Program focused on unserved areas. Tribal Broadband Connectivity recipients may use grant funds for broadband infrastructure deployment, broadband affordability programs, distance learning, telehealth, digital inclusion efforts, and broadband adoption activities. The Broadband Infrastructure Program, in contrast, will award grants to public-private partnerships for the deployment of fixed broadband service to eligible service areas. In administering the program, NTIA must prioritize projects that, among other things, are designed to serve the greatest number of households in an eligible service area, provide service to smaller population centers (specifically counties, cities or towns with fewer than 50,000 inhabitants), are located in the most rural areas, and offer broadband speeds of 100/20 megabits per second. Finally, NTIA has also been tasked with administering a new $285 million pilot program to provide grants to Historically Black Colleges or Universities, Tribal Colleges or Universities, or other Minority-serving institutions for the purchase of broadband service, eligible equipment, or the hiring and training of technology personnel.
Secure and Trusted Communications Reimbursement Program
In February 2020, Congress passed the Secure and Trusted Communications Networks Act, which prohibits the use of Universal Service funds to obtain equipment or services from companies that pose a national security risk to the United States and provides for the removal of any such equipment from the provider’s network. The Act establishes a reimbursement program to support smaller communications providers by providing funds to offset the costs of removing the prohibited equipment. To address the program’s funding needs, the stimulus legislation includes $1.9 billion to fund the reimbursement program and establishes a system whereby smaller providers (i.e., providers with two million or fewer customers) receive priority in accessing available funds. After smaller providers, accredited public or private non-commercial educational institutions providing their own facilities-based broadband service, followed by any other eligible applicants under the program, will also be eligible for these reimbursement funds.
Television and Radio Broadcaster Eligibility for the Paycheck Protection Program
As initially structured, the Paycheck Protection Program (PPP) excluded many local television and radio stations from loan eligibility due to their respective parent and sibling companies exceeding the aggregate 500-employee eligibility cap. Changes included in the new stimulus legislation treat broadcast stations much the same as restaurants, determining eligibility based upon the number of employees at the local level rather than the number of employees employed nationwide by parent and sibling companies. This permits television and radio stations owned by larger station groups to apply for PPP loans as long as the total loans for such a group do not exceed $10 million, and such stations (1) employ fewer than 500 employees per physical location or meet the applicable SBA standards, which is up to $41.5 million in annual revenue, or (2) are nonprofit public broadcasting entities. The legislation also waives any prohibition on broadcasters owned by publicly traded companies from receiving loan funds.
Broadcasters newly eligible to apply for PPP loans will be required to make a good faith certification that the loan proceeds will be used to support local or emergency programming.
Additionally, the law creates a “second draw” PPP loan for smaller, particularly hard-hit businesses that have previously received PPP funds. Qualifying broadcasters that employ fewer than 300 employees locally and have experienced a 25 percent or more revenue loss in any quarter of 2020 may be eligible for this additional source of loan funds.