Vetting process for prospective high-cost universal service fund applicants

Section 254 of the Communications Act of 1934 (47 U.S.C. 254) is amended by adding at the end the following:

(m)

Vetting of high-Cost fund recipients

(1)

Definitions

In this subsection—(A)the term covered funding means any new offer of high-cost universal service program funding, including funding provided through a reverse competitive bidding mechanism provided under this section, for the deployment of a broadband-capable network and the provision of supported services over the network; and(B)the term new covered funding award means an award of covered funding that is made based on an application submitted to the Commission on or after the date on which rules are promulgated under paragraph (2).(2)

Commission rulemaking

Not later than 180 days after the date of enactment of this subsection, the Commission shall initiate a rulemaking proceeding to establish a vetting process for applicants for, and other recipients of, a new covered funding award.(3)

Contents

(A)

In general

In promulgating rules under paragraph (2), the Commission shall provide that, consistent with principles of technology neutrality, the Commission will only award covered funding to applicants that can demonstrate that they meet the qualifications in subparagraph (B).(B)

Qualifications described

An applicant for a new covered funding award shall include in the initial application a proposal containing sufficient detail and documentation for the Commission to ascertain that the applicant possesses the technical, financial, and operational capabilities, and has a reasonable business plan, to deploy the proposed network and deliver services with the relevant performance characteristics and requirements defined by the Commission and as pledged by the applicant.(C)

Evaluation of proposal

The Commission shall evaluate a proposal described in subparagraph (B) against— (i)reasonable and well-established technical, financial, and operational standards, including the technical standards adopted by the Commission in orders of the Commission relating to Establishing the Digital Opportunity Data Collection (WC Docket No. 19–195) (or orders of the Commission relating to modernizing any successor collection) for purposes of entities that must report broadband availability coverage; and(ii)the applicant’s history of complying with requirements in the Commission and other government broadband deployment funding programs.(D)

Penalties for pre-authorization defaults

In adopting rules for any new covered funding award, the Commission shall set a penalty for pre-authorization defaults of at least $9,000 per violation and may not limit the base forfeiture to an amount less than 30 percent of the applicant’s total support, unless the Commission demonstrates the need for lower penalties in a particular instance.