[Senate Report 119-14]
[From the U.S. Government Publishing Office]
Calendar No. 48
119th Congress } { Report
SENATE
1st Session } { 119-14
_______________________________________________________________________
RURAL BROADBAND PROTECTION ACT OF 2025
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE,
AND TRANSPORTATION
on
S. 98
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
April 28, 2025.--Ordered to be printed
_______
U.S. GOVERNMENT PUBLISHING OFFICE
59-010 WASHINGTON : 2025
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred nineteenth congress
first session
TED CRUZ, Texas, Chairman
JOHN THUNE, South Dakota MARIA CANTWELL, Washington
ROGER F. WICKER, Mississippi AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD J. MARKEY, Massachusetts
DAN SULLIVAN, Alaska GARY C. PETERS, Michigan
MARSHA BLACKBURN, Tennessee TAMMY BALDWIN, Wisconsin
TODD YOUNG, Indiana TAMMY DUCKWORTH, Illinois
TED BUDD, North Carolina JACKY ROSEN, Nevada
ERIC SCHMITT, Missouri BEN RAY LUJAN, New Mexico
JOHN CURTIS, Utah JOHN W. HICKENLOOPER, Colorado
BERNIE MORENO, Ohio JOHN FETTERMAN, Pennsylvania
TIM SHEEHY, Montana ANDY KIM, New Jersey
SHELLEY MOORE CAPITO, West Virginia LISA BLUNT ROCHESTER, Delaware
CYNTHIA M. LUMMIS, Wyoming
Brad Grantz, Majority Staff Director
Lila Harper Helms, Democratic Staff Director
Calendar No. 48
119th Congress } { Report
SENATE
1st Session } { 119-14
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RURAL BROADBAND PROTECTION ACT OF 2025
_______
April 28, 2025.--Ordered to be printed
_______
Mr. Cruz, from the Committee on Commerce, Science, and Transportation,
submitted the following
R E P O R T
[To accompany S. 98]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 98) to require the Federal
Communications Commission to establish a vetting process for
prospective applicants for high-cost universal service program
funding, having considered the same, reports favorably thereon
without amendment and recommends that the bill do pass.
Purpose of the Bill
The purpose of S. 98 is to direct the Federal
Communications Commission to initiate a rulemaking within 180
days establishing a vetting process for applicants seeking
funding, including through a reverse competitive bidding
mechanism, under the high-cost universal service program.
Background and Needs
The Federal Communications Commission's (FCC) high-cost
program provides funding via the Universal Service Fund (USF)
to carriers that provide service in rural areas. While the
program originally subsidized voice service, it has
transitioned to providing support for broadband expansion over
the past decade.\1\ The high-cost program is one of the Federal
spending programs designed to connect American homes and
businesses to broadband.\2\
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\1\Patricia Moloney Figliola, The Future of the Universal Service
Fund and Related Broadband Programs, Congressional Research Service,
March 1, 2024 (https://crsreports.congress.gov/
product/pdf/R/R47621).
\2\U.S. Government Accountability Office, National Strategy Needed
to Guide Federal Efforts to Reduce Digital Divide, GAO-22-104611, May
2022 (https://www.gao.gov/assets/d22104611.pdf).
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USF high-cost funds are awarded via model-based and legacy
rate-of-return direct subsidy mechanisms, including the Connect
American Cost Model, the Alternative Connect America Cost
Model, Enhanced-ACAM, and Connect America Fund Broadband Loop
Support.\3\ Additionally, reverse auctions award funds to
carriers, wherein a bid represents how much funding a company
would require in exchange for servicing an area, with awards
going to the lowest bidders.
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\3\Federal Communications Commission, ``Connect America Fund: A
National Broadband Plan for Our Future High-Cost Universal Service
Support, et al.'' Order, DA 23-778, FCC Record, vol. 38 (2023), no. 9,
p. 7821 (https://docs.fcc.gov/public/attachments/DA-23-778A1_Rcd.pdf).
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The FCC's most recent high-cost reverse auction, the Rural
Digital Opportunity Fund (RDOF), occurred in December 2020.
Through RDOF, 180 bidders won $9.23 billion to serve 5,220,833
locations in 49 States and one territory over 10 years.\4\
However, a number of the winning bidders have had their awards
revoked by the FCC, defaulted on obligations, or surrendered
locations back to the FCC, and as a result, approximately 1.9
million of those locations will not ultimately be served by the
RDOF program.\5\ For example, in 2023, the FCC determined to
deny the largest winning bidder in the RDOF program, which had
initially been awarded $1.3 billion, concluding after further
review that its application ``was not reasonably capable of
offering the required gigabit-speed, low-latency service
throughout the broad areas where it won auction support.''\6\
In 2024, the FCC issued a second report and order updating the
5G Fund established in 2020, through which the FCC aims to make
nearly $10 billion in USF support available to carriers
deploying 5G networks in areas that today lack 5G coverage.\7\
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\4\Federal Communications Commission, ``Rural Digital Opportunity
Fund Phase I Auction (Auction 904) Closes,'' Public Notice, DA 20-1422,
FCC Record, vol. 35 (2020), no. 17, p. 13888 (https://docs.fcc.gov/
public/attachments/DA-20-1422A1.pdf).
\5\Benton Institute for Broadband and Society, New Dataset Reveals
Impact of RDOF Defaults on Each State, February 18, 2025 (https://
www.benton.org/blog/new-dataset-reveals-impact-rdof-defaults-each-
state) (analyzing data available at https://www.fcc.gov/auction/904).
\6\Federal Communications Commission, ``Auction 904 Order on
Application for Review'' Order on Review, FCC 23-103, FCC Record, vol.
38 (2023), no. 13, p. 11697. See p. 11703 at para. 16 (https://
docs.fcc.gov/public/attachments/FCC-23-103A1_Rcd.pdf).
\7\Federal Communications Commission, ``Establishing a 5G Fund for
Rural America,'' Second Report and Order, FCC 24-89, released August
29, 2024 (https://docs.fcc.gov/public/attach
ments/FCC-24-89A1.pdf).
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Deploying network infrastructure in rural and other remote
areas can be difficult and expensive, even with Government
subsidies. This legislation, if enacted, would aim to ensure
that applicants for the USF high-cost program are able to build
and operate the networks and services that they are pledging to
provide, while simultaneously discouraging gamesmanship from
nonserious bidders.
To that end, this legislation would direct the FCC to
initiate a rulemaking requiring applicants to high-cost
programs to provide documentation demonstrating their
technical, financial, and operational capability to deploy a
network and deliver services in accordance with FCC
requirements and as pledged by applicants. The FCC would
evaluate applicants' proposals against reasonable and well-
established technical, financial, and operational standards, as
well as applicants' history of complying with the FCC's
requirements and those of other Government broadband funding
programs. The FCC would also establish penalties for applicants
who commit pre-authorization default--i.e., carriers that are
unable to build and operate the networks and services they
pledge to provide.
Legislative History
S. 98, the Rural Broadband Protection Act of 2025, was
introduced on January 15, 2025, by Senator Capito (for herself
and Senators Klobuchar and Curtis) and was referred to the
Committee on Commerce, Science, and Transportation of the
Senate. On February 5, 2025, the Committee met in open
Executive Session and, by voice vote, ordered S. 98 reported
favorably without amendment. On March 11, 2025, Senator Peters
was added as a cosponsor.
118TH CONGRESS
S. 275, the Rural Broadband Protection Act of 2024, was
introduced on February 7, 2023, by Senator Capito (for herself
and Senator Klobuchar) and was referred to the Committee on
Commerce, Science, and Transportation of the Senate. On July
31, 2024, the Committee met in open Executive Session and, by
voice vote, ordered S. 275 reported favorably with an amendment
(in the nature of a substitute). On September 25, 2024, S. 275
passed the Senate by unanimous consent.
H.R. 7005, a House companion bill to S. 275, was introduced
on January 17, 2024, by Representative Curtis (for himself and
Representative Kuster) and was referred to the Committee on
Energy and Commerce of the House of Representatives.
117TH CONGRESS
S. 4126, the Rural Broadband Protection Act of 2022, was
introduced on May 3, 2022, by Senator Capito (for herself and
Senator Klobuchar) and was referred to the Committee on
Commerce, Science, and Transportation of the Senate.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
S. 98 would require the Federal Communications Commission
(FCC) to issue rules to amend the application review process
for the high cost universal service program, which seeks to
expand voice and broadband service in unserved or underserved
areas. Specifically, the bill would require the FCC to evaluate
applicants and funding recipients based on a set of criteria
specified in the bill. Recent awards for the high cost program
have been made through auctions run by the FCC. The bill would
establish minimum civil monetary penalties for bidders who win
an auction and subsequently default on their service
obligations prior to receiving funding.
Because the FCC currently evaluates applicants for this
program, CBO expects that the rules issued under S. 98 would
mostly codify the commission's current policies. On that basis,
CBO estimates that it would cost the FCC less than $500,000 to
issue rules amending the current review process. The FCC is
authorized to collect fees each year sufficient to offset the
appropriated costs of its regulatory activities; thus, CBO
estimates that the net cost for the FCC to implement the bill
would be negligible, assuming appropriation actions consistent
with that authority.
Under current law, the FCC has broad authority to levy
civil monetary penalties, which are recorded in the budget as
revenues. Using that authority, the commission currently issues
rules for each auction that include penalties for winning
bidders that default on their service obligations prior to
receiving funding. S. 98 would set minimum penalties for
defaulting entities at an amount higher than the amounts the
FCC has set for recent auctions.
Using information from the FCC about the size of penalties
collected for previous defaults and the uncertainty about the
timing of future auctions, CBO estimates that enacting S. 98
would increase revenues by an insignificant amount over the
2025-2035 period. In CBO's estimation, any significant
increases in penalty collections under S. 98 would be unlikely
to occur before 2036.
If the FCC increases annual fee collections to offset the
costs of implementing provisions in the bill, S. 98 would
increase the cost of an existing private-sector mandate on
entities required to pay those fees. CBO estimates that the
incremental cost of the mandate would be small and would fall
well below the annual threshold established in the Unfunded
Mandates Reform Act (UMRA) for private-sector mandates ($206
million in 2025, adjusted annually for inflation).
S. 98 contains no intergovernmental mandates as defined in
UMRA.
The CBO staff contacts for this estimate are David Hughes
(for federal costs), Nate Frentz (for revenues) and Rachel
Austin (for mandates). The estimate was reviewed by H. Samuel
Papenfuss, Deputy Director of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
S. 98, as reported, would direct the FCC to establish a
vetting process for applicants seeking funding via the high-
cost universal service program. The vetting process would
require applicants to provide documentation demonstrating their
technical, financial, and operational capability to deploy a
network and deliver services in accordance with FCC
requirements and as pledged by applicants. While the
legislation would affect the FCC, the vetting process for
applicants is limited to new covered funding awards. As such,
it would only affect additional persons if the FCC established
a new covered funding award.
economic impact
S. 98 is not expected to have an adverse impact on the
Nation's economy. The legislation would help the FCC ensure
that applicants for high-cost funding are able to deliver on
their commitments.
privacy
S. 98 would not impact the personal privacy of individuals.
paperwork
The Committee does not anticipate a major increase in
paperwork burdens for private individuals or businesses
resulting from the passage of this legislation. First, the new
vetting process would only apply if the FCC established a new
covered funding award. Moreover, the FCC has historically held
vetting processes for applicants prior to issuing funding
awards.
Congressionally Directed Spending
In compliance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides that no
provisions contained in the bill, as reported, meet the
definition of congressionally directed spending items under the
rule.
Section-by-Section Analysis
Section 1. Short title
This section would provide that the legislation may be
cited as the ``Rural Broadband Protection Act of 2025''.
Section 2. Vetting process for prospective high-cost Universal Service
Fund applicants
This section would amend section 254 of the Communications
Act of 1934,\8\ which establishes the FCC's universal service
program. Section 254 would be amended by adding a subsection
(m) requiring the FCC to initiate a rulemaking proceeding to
establish a vetting process for applicants for high-cost
program funding within 180 days of the law's enactment. The
resulting FCC rules would require applicants for new FCC
funding awards to document their technical, financial, and
operational capabilities, as well as a reasonable business
plan, for deploying and operating the networks they are
pledging to stand up. The rules would also require the FCC to
evaluate an applicant's proposal against well-established FCC
standards, as well as the applicant's history of compliance
with FCC program requirements and those of other Government
broadband funding programs. Finally, the rules would have to
set the penalty for pre-authorization defaults to be at least
$9,000 per violation but no less than 30 percent of an
applicant's total support, unless the FCC were to demonstrate
the need for a lower penalty in a particular instance.
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\8\47 U.S.C. 254.
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Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
material is printed in italic, existing law in which no change
is proposed is shown in roman):
COMMUNICATIONS ACT OF 1934
* * * * * * *
[47 U.S.C. 254]
SEC. 254 UNIVERSAL SERVICE.
(a) * * *
* * * * * * *
(l) * * *
(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
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.
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[all]