[Federal Register Volume 88, Number 156 (Tuesday, August 15, 2023)]
[Rules and Regulations]
[Pages 55401-55410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16984]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[CC Docket Nos. 02-6, 96-45 and 97-21; FCC 23-56; FRS ID 160335]


Schools and Libraries Universal Service Support Mechanism, 
Federal-State Joint Board on Universal Service, and Changes to the 
Board of Directors of the National Exchange Carrier Association, Inc.

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) take steps to increase Tribal library eligibility and 
continue to reduce administrative burdens in the program. In doing so, 
the Commission expects to make the program more accessible to Tribal 
communities, so that they can leverage E-Rate funds to improve and meet 
the broadband connectivity needs of their communities. Where 
appropriate, the Commission also amends its rules to benefit non-Tribal 
applicants as well, to simplify and streamline the E-Rate program for 
all participants. The Commission expects that these measures will 
provide a meaningful difference for Tribal communities, especially 
Tribal libraries that seek to participate in the E-Rate program.

DATES: Effective September 29, 2023, except for Sec. Sec.  
54.503(c)(2)(i)(B) and 54.504(a)(1)(ii), which are delayed 
indefinitely. The Commission will publish a document in the Federal 
Register announcing the effective date for those sections after 
approved by the Office of Management and Budget (OMB) as required by 
the Paperwork Reduction Act.

FOR FURTHER INFORMATION CONTACT: Johnny Roddy [email protected] or 
Kate Dumouchel [email protected] in the Telecommunications Access 
Policy Division, Wireline Competition Bureau, 202-418-7400 or TTY: 202-
418-0484. Requests for accommodations should be made as soon as 
possible in order to allow the agency to satisfy such requests whenever 
possible. Send an email to [email protected] or call the Consumer and 
Governmental Affairs Bureau at (202) 418-0530.

SUPPLEMENTARY INFORMATION: 
    This is a synopsis of the Commission's Schools and Libraries 
Universal Service Support Mechanism, Federal-State Joint Board on 
Universal Service, and Changes to the Board of Directors of the 
National Exchange Carrier Association, Inc., Report and Order (Order) 
in CC Docket Nos. 02-6, 96-45 and 97-21; FCC 23-56, adopted July 20, 
2023 and released July 21, 2023. The Commission also released a 
companion Further Notice of Proposed Rulemaking (FNPRM) in CC Docket 
Nos. 02-6, 96-45 and 97-21; FCC 23-56, adopted July 20, 2023 and 
released July 21, 2023. The FNPRM published August 9, 2023 at 88 FR 
53837. The full text of this document is available at the following 
internet address: https://docs.fcc.gov/public/attachments/FCC-23-56A1.pdf.

I. Introduction

    1. The E-Rate program provides support to ensure that schools and 
libraries can obtain affordable, high-speed broadband services and Wi-
Fi equipment to connect today's students and library patrons with next-
generation learning opportunities and services. In January 2022, the 
Commission began an initiative to increase Tribal libraries' access to 
E-Rate support, recognizing the valuable role that these entities

[[Page 55402]]

serve in providing high-speed internet access to Tribal communities. 
The Commission first clarified that Tribal libraries are eligible to 
participate in the program and later launched a Tribal Library Pilot 
Program to ensure that Tribal library entities have equitable access to 
the E-Rate program. Building on those efforts, the Commission initiated 
a rulemaking proceeding in February 2023 to seek comment on additional 
rule changes to improve Tribal participation in the E-Rate program. The 
Commission takes steps to further enhance Tribal applicants' access to 
the E-Rate program through program simplifications and other changes 
that aim to encourage greater Tribal participation in the program. At 
the same time, the Commission takes steps to simplify the E-Rate 
processes, where appropriate, for other E-Rate applicants and seek 
comment on further possible rule changes suggested by commenters in a 
the FNPRM.

II. Discussion

    2. Consistent with efforts to encourage more Tribes to participate 
in the E-Rate program, the Commission now takes steps to increase 
Tribal library eligibility and continue to reduce administrative 
burdens in the program. In doing so, the Commission expects to make the 
program more accessible to Tribal communities, so that they can 
leverage E-Rate funds to improve and meet the broadband connectivity 
needs of their communities. Where appropriate, the Commission also 
amends the rules to benefit non-Tribal applicants as well, to simplify 
and streamline the E-Rate program for all participants. First, the 
Commission modifies the rules to allow Tribal college and university 
(TCU) libraries to apply for and receive E-Rate support, provided they 
are also serving as a public library in their community. Next, the 
Commission adopts a number of changes to simplify and improve the E-
Rate application process for Tribal library and other applicants. The 
Commission also takes steps to enhance communication with Tribal 
Nations by providing additional outreach to Tribal entities and leaders 
and by adopting a definition of ``Tribal'' to better identify Tribal 
applicants. Finally, the Commission also adds a Tribal representative 
to the Universal Service Administrative Company (USAC) Board of 
Directors to ensure Tribal input into the administration and oversight 
of the federal USF and the universal service support programs. Taken 
together, the Commission expects that these measures will provide a 
meaningful difference for Tribal communities, especially Tribal 
libraries that seek to participate in the E-Rate program. The 
Commission also seeks comment on additional rule changes and 
clarifications suggested by commenters to further streamline and 
improve the application process for all E-Rate applicants. The 
Commission considers certain of those suggestions in the FNPRM.
    3. Based on a review of the record and consistent with the 
authority pursuant to section 254(h) of the Communications Act of 1934, 
as amended, the Commission adopts the proposal to make TCU libraries 
eligible for E-Rate support when they also serve as a public library in 
their community. Commenters that addressed this issue unanimously 
supported the rule change and provided evidence about how TCU libraries 
offer valuable library services to their communities.
    4. The American Library Association (ALA) argues, for example, that 
TCU libraries like Ilisagvik College's Tuzzy Consortium Library do not 
just serve students, faculty, and staff, but also the wider community, 
even providing workforce and career programs to members of the public, 
and should therefore be permitted to draw on the E-Rate program support 
like any other library. During the April 13, 2023 Tribal Consultation 
and Listening Session, the Director of Education for the Inupiat 
Community of the Arctic Slope, Mark Roseberry, explained that their TCU 
library is responsible for serving their entire Alaskan community and 
that the library would greatly benefit from E-Rate funding. The 
American Indian Higher Education Consortium (AIHEC) noted that, of the 
35 accredited TCUs, 31 open their libraries to the public as the only 
public library in their rural communities, acting as a vital resource 
in the communities they serve. AIHEC further commented that TCU 
libraries serve the public at their own expense despite facing internet 
connection costs ranging from 21 to 70 times the national average at 
much slower speeds. It noted that TCU libraries, such as Oglala Lakota 
College, provide a wide variety of services to the public for free, 
offering computers and internet access to community members who would 
not otherwise have access to the internet so that they can do homework, 
complete research, and find employment. The Commission finds that 
permitting TCU libraries that also serve as public libraries to receive 
E-Rate support will provide a meaningful benefit to Tribal communities, 
particularly where the TCU library may be the only library in its 
community. The Commission therefore will consider a TCU library 
eligible to apply for E-Rate support if it serves as a public library 
by having dedicated library staff, regular hours, and a collection 
available for public use in its community.
    5. In making this change, the Commission seeks to balance the goal 
of improving broadband connectivity on Tribal lands with the duty as a 
responsible steward of limited universal service resources. The 
Commission therefore adopts limitations to ensure that E-Rate support 
is restricted to TCU library use only, and not to support the broader 
connectivity requirements of the higher education institution. For 
example, TCU libraries cannot request funding for services or equipment 
beyond the needs of the library, and any category two equipment must be 
installed within the eligible library only and cannot be installed in 
another location within the TCU. Commenters suggest that TCU libraries 
not be required to perform cost-allocation calculations because they 
are burdensome and would potentially deter TCU libraries from seeking 
support. To address this concern, accordingly, the Commission will not 
require TCU libraries to perform cost-allocation calculations of the 
college student and staff usage at the library versus public usage of 
bandwidth, as members of the college community are also members of the 
public. If, however, the TCU library is seeking E-Rate support for a 
portion of the total bandwidth used at the Tribal college or 
university, it will be required to calculate the bandwidth usage from 
other parts of the Tribal college or university, and include only the 
library portion of bandwidth use in its E-Rate funding request. Such 
limitations will ensure that E-Rate funding is not improperly provided 
to the other TCU buildings like classrooms and dormitories.
    6. The State E-Rate Coordinators' Alliance, the Schools, Health, 
and Libraries Broadband Coalition, the Consortium for School 
Networking, and the State Educational Technology Directors Association 
(collectively, the Joint Commenters), in their comments, also suggest 
that a TCU library should only be eligible when there is no other 
Tribal library accessible to the community. The Commission is not 
convinced that this restriction is either necessary or meaningful. 
First, there are a very limited number of TCU libraries, which limits 
the impact of granting eligibility. It is also administratively 
challenging to determine whether another Tribal library is 
``accessible'' to the community. Finally, the Commission does not 
impose similar restrictions in the E-Rate program to

[[Page 55403]]

limit funding when two or more libraries may be serving the same 
community. If an otherwise eligible library is providing services to 
the public and members of the public are making use of those services, 
the presence of another eligible library accessible to that community 
has no impact on the eligibility of either library. For these reasons, 
the Commission declines to adopt this restriction at this time.
    7. The Commission finds that the action is consistent with its 
statutory authority under section 254(h) of the Communications Act to 
enhance access to advanced telecommunications and information services 
for libraries. In defining which libraries would be eligible for E-Rate 
support in 1997, the Commission initially adopted rules barring all 
college and university libraries from eligibility so as to guard 
against ``institutions of higher learning [that] could assert that 
their libraries, and thus effectively their entire institutions, were 
eligible for support,'' finding it inconsistent with congressional 
intent that funding would flow to an institution of learning only if it 
is an elementary or secondary school. Here, the presence of other 
program protections, as well as the very limited number of TCUs and the 
value of the services they provide to their Tribal communities persuade 
the Commission to change the rules and ensure that TCU libraries that 
also serve as a public library are not barred from eligibility. Though 
one commenter suggested granting eligibility to non-TCU libraries at 
small colleges or in rural areas, the Commission does not have a 
sufficient record to evaluate this issue and seeks further comment in 
the FNPRM.
    8. Allowing TCUs that serve as public libraries to participate in 
E-Rate is also consistent with the federal government's special 
treatment of TCUs. TCUs are unique higher education institutions that 
are controlled or chartered by a federally recognized Tribe, governed 
by a board of whose members are a majority Indian, and have a majority 
of Indians as its student body. Congress provides support for TCUs as 
part of its responsibility to provide for Indian education and 
facilitate its policy of enabling Tribal control of all matters 
relating to the education of Indian students. Congress has stated that 
the federal government has a special responsibility, as part of its 
overall trust responsibility to Indian Tribes, for the education of 
Indian students, and the federal government has long recognized and 
``charged itself with moral obligations of the highest responsibility 
and trust'' toward Indian Tribes. Accordingly, TCUs are unique higher 
education institutions that are entitled to special treatment from the 
federal government based on their trust relationship between the United 
States and Indian Tribes and their mission of providing education to 
Indian students.
    9. Building on the Commission proposals in the Tribal E-Rate NPRM, 
88 FR 14529, March 9, 2023, the Commission implements several measures 
to streamline and simplify the E-Rate application process for Tribal 
libraries and other similarly situated applicants. First, the 
Commission streamlines the application process for libraries making 
small purchases. Next, the Commission increases the category two 
discount rate for Tribal library applicants with the most need, helping 
to offset the costs of in-building equipment and services. The 
Commission also increases the minimum amount of funding that is 
available for category two purchases, with the goal of encouraging 
Tribal libraries that do not currently participate in the program to 
apply for E-Rate support. And finally, the Commission provides guidance 
on a number of cost-allocation calculation issues that applicants have 
raised to reduce the administrative burden and streamline the E-Rate 
program overall. Collectively, the Commission expects these changes to 
contribute to the Commission's ongoing goals of both improving and 
streamlining the program, and reducing barriers to accessing E-Rate 
funding for Tribal applicants.
    10. To streamline the application process and simplify what is 
required for Tribal and other similarly-situated libraries making low-
cost equipment purchases, the Commission adopts a competitive bidding 
exemption for library applicants seeking E-Rate support for category 
two equipment or services that total a pre-discounted amount of $3,600 
or less in a single funding year. The exemption will simplify the E-
Rate application process because it will allow libraries to purchase 
low-cost category two services and equipment without filing an FCC Form 
470 to solicit bids and waiting 28 days before entering into a 
contract. A category two funding request will be eligible for this 
exemption only if the total cost per library is $3,600 or less; and the 
cost cannot be averaged across a number of libraries. By adopting this 
exemption to the competitive bidding process, the Commission believes 
it will be easier for smaller libraries, including Tribal libraries and 
libraries serving rural communities, to apply for E-Rate support when 
they are making limited purchases of equipment to install or upgrade 
their Wi-Fi networks.
    11. Commenters broadly supported expanding the existing competitive 
bidding exemption to include category two equipment and services, with 
suggestions ranging from support for the proposed $3,600 exemption to 
eliminating the competitive bidding requirement entirely for Tribal 
entities. Because competitive bidding is essential to ensuring cost-
effective purchasing in the E-Rate program, the Commission disagrees 
with commenters that suggest eliminating competitive bidding for Tribal 
entities entirely or where there is only one commercial service 
offering. At the same time, the Commission acknowledges that there are 
administrative costs associated with the E-Rate application process 
that can be burdensome, particularly for smaller entities. WTA 
explained that the low-cost category two services and equipment 
requests that small libraries often make also do not attract many bids 
in Tribal and rural areas. As commenters highlighted, the competitive 
bidding process can be challenging, especially for smaller libraries 
that have a limited staff. The Commission believes that adopting a 
$3,600 exemption for libraries requesting category two equipment and 
services, matching the existing $3,600 competitive bidding exemption 
for commercially available high-speed internet access services, strikes 
the right balance in simplifying the E-Rate application process, while 
retaining competitive bidding requirements where appropriate to ensure 
that limited E-Rate resources are spent efficiently and effectively. 
The Commission expects that the exemption will provide a meaningful 
benefit to Tribal, small, and rural library applicants by making it 
easier to receive funding for the Wi-Fi network equipment and services 
they need.
    12. The Commission emphasizes that Tribal, and other small or rural 
library applicants may only request E-Rate support based on the actual 
cost of the equipment or service requested. The Commission cautions 
library applicants and service providers that cost-effective purchases 
are still required under this exemption in order to avoid waste in the 
program, and directs USAC to review the costs for equipment and 
services and to deny funding for purchases that are determined to not 
be cost-effective. In this regard, the Commission notes that it is 
generally straightforward to review and compare the costs of category 
two equipment, given that it tends to be widely commercially available, 
in order to ensure that

[[Page 55404]]

applicants are not seeking reimbursement for wasteful spending. The 
Commission also agrees with ALA that libraries may be subject to state 
and local requirements that help ensure that these low-cost purchases 
are still cost-effective. At present, a competitive bidding exemption 
for category two equipment and services costing less than $3,600 allows 
the Commission to determine whether this small exemption can help 
libraries, but are not precluded from amending this level in the 
future. Based on limited record evidence, the Commission declines to 
extend the exemption to school entities at this time, but seeks further 
comment on this question in the FNPRM.
    13. To increase Tribal library access to category two funding, the 
Commission increases the maximum discount rate for category two 
services for Tribal libraries to 90%, and increases the category two 
funding floor to $55,000 for Tribal libraries. The Commission expects 
that these changes will help Tribal libraries to better meet their 
needs by reducing the share that they must pay for Wi-Fi networks and 
increasing the amount of support they can receive. At the same time, 
the Commission expects that the budgetary impact to the E-Rate program 
will be minimal. Taken together, the Commission expects that these 
measures will encourage greater participation in the E-Rate program by 
Tribal libraries that will offer a substantial benefit to the 
communities they serve, at minimal cost to the overall E-Rate program.
    14. Tribal libraries tend to be under-resourced, operating on a 
limited budget to meet the diverse needs of their patrons. Many lack 
full-time, permanent library staff, much less a dedicated information 
technology (IT) staff member, often relying on the same IT staff that 
serves the larger Tribal government. While the Commission appreciates 
the request by applicants for more support for staffing costs, section 
254 of the Communications Act constrains what services are eligible for 
E-Rate program support. Given these statutory constraints that limit 
the Commission's ability to fund certain costs, the Commission 
therefore has tried to identify other options to make internet 
connectivity more affordable for Tribal libraries. The Commission 
believes that a five percentage point increase to the maximum discount 
rate, from 85% to 90%, will make category two services more affordable, 
allowing Tribal libraries to stretch their limited budgets to better 
meet their community's Wi-Fi network connectivity needs. Commenters 
agreed and broadly supported an increase, arguing that a higher 
discount rate would make a ``big difference'' to applicants and would 
result in important additional savings to Tribal applicants. In an 
April 13, 2023 Tribal Consultation and Listening Session, Tribal 
participants from Alaska noted that costs are very high in their remote 
communities, and that an increase in the discount rate would be 
especially helpful. By making category two services more affordable, 
the Commission expects that this increase will provide a meaningful 
benefit to Tribal libraries, that in turn, will encourage greater 
participation in the E-Rate program.
    15. Increasing the category two funding floor to $55,000 from the 
current floor of $25,000 will also significantly aid Tribal libraries, 
where the remoteness of Tribal libraries on Tribal lands makes 
purchasing, installing, and maintaining equipment more difficult and, 
therefore, more costly. This means that Tribal libraries will be 
eligible to receive up to a pre-discount amount of $55,000 in category 
two funding over a five-year period, based on the actual costs of the 
equipment or services. This increase is consistent with the Washington 
State Library suggestion that because category two costs of serving 
small remote libraries is approximately $11,000 per year, setting the 
funding floor at $55,000 for the five-year budget cycle may be more 
appropriate. These amounts were estimated based on a recent state pilot 
project to connect a number of single and very small library systems 
(fewer than five branches) with a basic Wi-Fi package. The National 
Tribal Telecommunications Association claimed that, in many of these 
remote and expensive-to-serve communities, the internet connection 
available through the Tribal library may be the only broadband 
available to community members and recommended increasing the funding 
floor to $35,000. Based on this record evidence, the Commission agrees 
that an increase in minimum funding levels would help ensure that 
sufficient E-Rate funding is available to meet the Wi-Fi network 
requirements of Tribal libraries, and sets the category two services 
five-year funding floor at $55,000. While the Commission limits the 
$55,000 funding floor to Tribal library entities at this time, 
evaluating the impact of this change and considering whether to expand 
it to all libraries if there is a significant impact on the ability of 
libraries to meet the needs of their communities and is likely to 
increase participation in the E-Rate program.
    16. As part of the efforts to simplify the E-Rate program, the 
Tribal E-Rate NPRM sought comment on common cost-allocation issues that 
Tribal libraries and other non-Tribal applicants experienced, noting 
that cost allocation can be confusing for all E-Rate applicants and may 
pose particular challenges for Tribal libraries, especially those 
located in multipurpose buildings. Commenters provided a number of 
examples where cost allocation can complicate the application process. 
The Alaska Department of Education and Early Development and the Alaska 
State Library provided an example where a Tribal library is in a 
building with a room that is infrequently used as an office by an 
ineligible entity. They noted that relaxing the cost allocation 
requirements for minimal or occasional use of a single room from an 
eligible location could make a real difference for these applicants in 
small villages where the library may act as the hub of that community. 
Other commenters also provided a number of other scenarios wherein 
schools and libraries are required to cost allocate for the minimal 
internet usage of a variety of in-building offerings, such as offices, 
health kiosks and other healthcare services, childcare, pre-
kindergarten, adult education, and vocational and technical classes 
available to the public. These and similar services, though ineligible 
themselves for E-Rate support, may provide significant benefit, while 
having a minimal impact on the school's or library's total internet 
usage and no real impact on schools and libraries' decision-making 
process in determining the level of internet service they need. Yet, 
schools and libraries that decide to offer these valuable services to 
their students, staff, and library patrons are required to conduct 
cost-allocation calculations to remove those portions of minimal 
ineligible internet usage by these services. In addition, if a school 
or library selects a product or service containing an ineligible 
component and that product or service is the most cost-effective means 
of receiving the eligible component functionality, those ineligible 
components are ancillary, and costs do not need to be allocated between 
the eligible and ineligible components.
    17. The Commission agrees with commenters that conducting cost 
allocations to exclude costs associated with minimal ineligible use or 
service components can be challenging, especially with regards to 
services. As a means of providing a safe harbor, the Commission adopts 
a presumption that

[[Page 55405]]

if at least 90% of an applicant's requested internet service is being 
used for eligible purposes, the remaining ineligible use of the 
internet service will be presumed to be ancillary and, therefore, cost 
allocation is not required. This does not mean that the Commission 
currently finds healthcare, childcare services, or services for 
students under the age of three to be eligible for E-Rate support, nor 
does it mean that if less than 90% of an applicant's requested internet 
service is being used for eligible purposes that the ineligible portion 
cannot be demonstrated to be ancillary. However, the Commission agrees 
with commenters that if an applicant selected the most cost-effective 
internet service offering to meet its needs, then the minimal 
ineligible use of that internet service should be treated as ancillary 
and cost allocation is not required. In this regard, the Commission 
emphasizes that applicants may request only the amount of bandwidth 
needed for eligible use. The Commission therefore determines that 
permitting minimal ancillary use, without requiring cost allocation, 
will not result in waste or additional costs to the E-Rate program, 
because applicants may only request what they need to support eligible 
uses. The Commission expects this finding will provide clarity to 
applicants about when an ineligible use of internet service can be 
presumed to be ancillary, consistent with the existing rules and 
without creating an undue risk of waste, fraud, and abuse of limited E-
Rate funds. In turn, the Commission expects it will also simplify the 
application process for some applicants.
    18. In specific regard to Tribal libraries, if the Tribal library 
is selecting the most cost-effective means of receiving the eligible 
service without regard to the value of the ineligible components, the 
burden to allocate a portion of the cost for any ineligible use may 
decrease participation by these small entities. So, with this 
presumption, the Commission expects the occasional office use, such as 
described by the Alaska Department of Education and Early Education and 
Alaska State Library, could be considered ancillary and cost allocation 
would not be required, as long as 90% of the requested internet service 
is used for the library's eligible purposes. The Commission declines to 
fully remove cost allocation requirements for all Tribal libraries 
housed in a multipurpose building because of concerns that the 
exception could lead to the E-Rate program funding largely ineligible 
services--for instance, if a large administrative building has a small 
Tribal library located within one room in the building--but the 
Commission seeks additional comment on this issue in the companion 
FNPRM.
    19. Next, the Commission addresses concerns raised by the Joint 
Commenters and clarifies that expenses associated with cabling that is 
primarily being used to provide broadband connectivity within schools 
and libraries need not be cost allocated, provided it is the most cost-
effective means of receiving the eligible service. The Joint Commenters 
note that applicants have periodically experienced difficulties 
receiving E-Rate support for cabling, or have been required to return 
funding based on what equipment the cabling was connected to after 
installation. They further explain that these issues typically arise in 
the context of installing internal cabling throughout a building that 
``provide data transmission to specific points located in the ceilings 
or in walls of a school or library building, thus creating a `drop' or 
`jack' for various types of equipment to connect to, and then gain 
access to the communications network.'' Cabling is conditionally 
eligible for E-Rate support, which means that it is ineligible for E-
Rate funding when it is for an ineligible use, such as for a security 
camera network or voice network, and the costs must be allocated or 
removed from the funding requests. However, the Commission agrees that 
it is unworkable to determine conditional eligibility of the cabling on 
a drop-by-drop basis, particularly after the fact, depending on what 
broadband-enabled device is plugged into the local area network 
cabling. Many devices may be connected to a school or library's local 
area network, both wired and wirelessly, and the devices connected to a 
network may change over time. The Commission therefore finds that the 
eligibility determination should be based on the purposes of the 
network as a whole, rather than for each cabling ``drop'' or ``jack''. 
As such, cabling ``drops'' or ``jacks'' that are part of a local area 
network primarily serving an eligible purpose (i.e., distributing 
broadband throughout a school or library building) are eligible for E-
Rate and do not require cost allocation. The Commission anticipates 
that this will help applicants by providing them certainty to request 
category two funding for the cabling needed for their Wi-Fi networks 
without concern that in the future an auditor will seek recovery of a 
small portion of that E-Rate funding due to a broadband-enabled device, 
such as a security camera, being attached at a later date. At the same 
time, the Commission expects applicants' category two budgets will 
constrain them from requesting more cabling drops than necessary for 
their local area networks. Regardless of this clarification, the 
Commission reminds applicants that cabling is ineligible to the extent 
it is installed specifically for a security camera network or for a 
dedicated voice network.
    20. Finally, the Commission addresses an issue with the cost 
allocation required for shared equipment that is located at a non-
instructional facility, including library administrative buildings. 
While NIFs are eligible for category one support, category two support 
is generally not available for NIFs unless the equipment is ``essential 
for the effective transport of information to or within one or more 
instructional buildings of a school or non-administrative library 
buildings, or the Commission has found that the use of those services 
meets the definition of educational purpose.'' This is generally a 
district switch located in an administrative building or data center. 
Under the current rules, a school district or library system generally 
cannot use any of its budget for category two equipment for a NIF. The 
exception for essential, shared equipment still applies, and therefore, 
applicants can purchase this type of equipment to be located in a NIF, 
but the rules now explicitly state that the applicant must remove the 
costs associated with the NIF's use of the shared equipment. As a 
result, the Commission has since learned that applicants have been 
required to undergo complicated cost-allocation calculations that have 
proven to be administratively burdensome, resulting in the removal of a 
small fraction of the funding request for the needed equipment, 
undercutting the Commission's efforts to streamline the category two 
application process. As long as the applicant is choosing the most 
cost-effective offering for the shared equipment (e.g., a district 
switch) without regard for the NIF's use, the Commission agrees that 
the applicant should not be required to cost allocate the NIF's use of 
the shared equipment. In recognition of this, the Commission now amends 
the rules to no longer require cost allocation to remove the costs 
associated with the NIFs' use of the shared equipment in NIFs and 
related-library administrative buildings. Removing these requirements 
will permit applicants to forego these complex cost-allocation 
procedures as they seek to equip their schools and

[[Page 55406]]

libraries with the category two equipment they need to serve their 
students and library patrons.
    21. The Commission recognizes that there still exist potential 
cost-allocation challenges for those Tribal libraries that share space 
with other governmental and/or community organizations or services, 
often in unique configurations. The Commission therefore directs USAC 
to publicly post plain language guidance, approved by the Wireline 
Competition Bureau (Bureau), providing examples of Tribal library cost 
allocations as they may arise. This could help other Tribal library 
applicants understand whether they need to cost allocate in their 
particular situation and provide examples on how they should cost 
allocate, if required. The Commission also seeks comment in the FNPRM 
if there are additional cost-allocation examples that would benefit 
from further Commission guidance.
    22. To further strengthen the Commission's government-to-government 
relationship with Tribal Nations and to improve communication with 
Tribal communities to better support Tribal entities applying for and 
receiving E-Rate funding, the Commission also makes a number of changes 
to the rules and processes. First, the Commission establishes a formal 
definition of Tribal within the E-Rate program to better identify those 
Tribal applicants seeking E-Rate funding. Second, the Commission amends 
the rules to add a Tribal representative to the USAC Board of Directors 
who will represent the Tribal community and provide valuable insights 
for the administration of the USF and the universal service programs. 
Lastly, the Commission directs USAC to provide greater outreach to 
Tribal applicants, and all applicants, so as to create a smoother 
application process. Taken together, the Commission expects these 
actions will strengthen the government-to-government relationship 
between the Commission and Tribal Nations, to better support Tribal 
libraries and schools, and the communities that they serve.
    23. Tribal Definition. To ensure that Tribal entities can be 
identified as Tribal when applying for E-Rate support and that Tribal 
libraries can receive the increase in category two funding, the 
Commission adopts and add the definition for ``Tribal'' in Sec.  54.500 
of the Commission's E-Rate rules.
    24. This definition of Tribal is modified slightly as compared to 
the definition proposed in the Tribal E-Rate NPRM as a result of the 
record the Commission received. The Commission chose not to include 
those entities for whom ``the majority of students or library patrons 
served are Tribal members'' as being Tribal because, as one commenter 
noted, this approach would be difficult to demonstrate and administer. 
Additionally, after discussion with Tribal representatives during the 
May 19, 2023 Tribal Consultation and Listening Session the Commission 
determined that both that portion of the definition and the Tribal 
lands portion of the definition proposed in the Tribal E-Rate NPRM were 
adequately covered by the remaining portion of the proposed definition. 
The Commission also included the ``Alaska native village, regional 
corporation, or village corporation'' language based upon suggestions 
from the May 19 Tribal Consultation and Listening Session, 
incorporating language from the definition of Tribal used by the 
Institute of Museum and Library Services (IMLS). The Alaska Department 
of Education and Early Development and the Alaska State Library in 
their joint comments supported this approach. While one commenter 
suggested maintaining the present system whereby applicants self-
identify as Tribal, the category two rule changes require 
implementation of a definition for Tribal applicants to evaluate their 
eligibility for the enhanced benefits. In addition, to better track and 
more easily identify Tribal entities and their Tribal affiliation, the 
Commission will also collect the applicant's Tribal affiliation as part 
of the application process.
    25. USAC Board of Directors. Next, the Commission adopts the 
proposal to add a new director to the USAC Board of Directors to 
represent the interests of Tribal communities. Consistent with the 
existing rules governing the USAC Board, the Commission establishes a 
new seat on the Board and require Tribal entities to nominate a person 
to this seat to represent the interests of Tribal communities. This 
idea was first suggested by ALA and the Association of Tribal Archives, 
Libraries, and Museums (ATALM) in their joint comments to the 2021 
Tribal Libraries NPRM, 86 FR 57097, October 14, 2021, wherein they 
explained how such a position could simultaneously provide USAC with 
information from the Tribal community and provide the Tribal community 
with information directly from USAC. Commenters that addressed the 
addition of a Tribal director unanimously supported the proposal. 
Participants at the April 13, 2023 Tribal Consultation and Listening 
Session were also supportive of this proposal, noting that USAC's Board 
would benefit from having a Tribal perspective that could speak to the 
unique political and geographical identity of Tribal communities, a 
sentiment reiterated by Chief Executive Melanie Benjamin in reply 
comments filed by the Mille Lacs Band of Ojibwe. Adding a Tribal 
director to the Board allows USAC, the USF, and all the universal 
service programs USAC administers to benefit from the perspective that 
a Tribal representative will provide.
    26. The Commission's existing rules with regards to directors will 
also apply to the Tribal director. The Tribal community shall nominate 
by consensus a new director. If consensus on a nominee is not reached 
or a nominee is not provided, the Chair of the Commission shall select 
an individual to be the Tribal director. The Tribal director will also 
serve a three-year term but will be eligible to serve for subsequent 
terms. In addition, the Commission adds the Tribal director to the 
Schools and Libraries Committee so that the Tribal board member can 
participate in and assist the Committee in carrying out its 
responsibilities and duties regarding the E-Rate program. As with other 
Board member positions, the Tribal director may also serve on other 
USAC Board committees as well. Since there will now be an even number 
of directors on the USAC Board, the Commission directs USAC to make any 
necessary changes to its bylaws to ensure procedures are in place to 
determine an outcome in the case of a tie.
    27. Outreach and Training. The Commission seeks to aid Tribal 
library applicants by directing USAC to provide additional training and 
outreach throughout the application, invoicing and post-commitment 
processes. The Tribal Libraries E-Rate Pilot Program the Commission 
tested last year demonstrated the value of one-to-one and cohort 
assistance, tailored to the needs of new Tribal library applicants. The 
Commission received positive feedback from participants and commenters 
alike, who have requested ongoing support to navigate the technical and 
administrative processes. The Pilot Program also provided helpful 
lessons learned for both USAC and the Commission to enhance future E-
Rate Tribal related trainings. The Commission therefore directs USAC to 
establish an enhanced training program that includes both cohort and 
on-demand learning opportunities that are targeted to Tribal E-Rate 
applicants. Where possible, the Commission encourages USAC to conduct 
hands-on, in-person training opportunities, as suggested by ALA. 
Enhancing Tribal governments' and libraries' awareness of

[[Page 55407]]

the E-Rate program, as well as program requirements, is integral to the 
other changes adopted herein. The Commission also directs USAC to 
provide specific support for TCU libraries, which will be eligible for 
the E-Rate program for the first time. The Commission encourages USAC 
to identify any TCU library applicants and provide them with additional 
resources to assist them in the setting up their entity profiles in the 
E-Rate Productivity Center (EPC) and through the application and 
reimbursement processes.
    28. In addition to enhanced training, commenters identified other 
outreach opportunities to better support Tribal library applicants. 
Specifically, as suggested by ALA in their initial comments, the 
Commission directs USAC to identify and conduct outreach to first-time 
Tribal applicants (may also be known as billed entities or BENs) to 
provide additional information concerning the review process and to 
inquire as to any questions the first-time filer or applicants may 
have. Commenters also expressed confusion related to how a library, 
including a Tribal library, should set up their billed entity when the 
respective local government is the entity that pays the bill to 
vendors. Consistent with the comments from the Alaska Department of 
Education and Early Development and the Alaska State Library, the 
Commission directs USAC to post guidance on its website for first-time 
Tribal library applicants on how to properly set up a library in EPC 
when the Tribal government, rather than the library, is the entity 
responsible for paying bills and invoices. The Commission also directs 
USAC to publish library-specific guidance, upon approval from the 
Bureau, on issues libraries commonly experience while navigating the E-
Rate program.
    29. The Commission declines to adopt an extended or separate 
application filing window for Tribal libraries, as that could cause 
confusion, but directs the Bureau to continue considering requests for 
waiver of the FCC Form 471 application filing deadline, recognizing the 
special circumstances that Tribal library applicants face when applying 
for the E-Rate program. From speaking with Tribal governments and 
libraries, the Commission recognizes that the procurement processes for 
Tribal libraries can be on different timelines from the procurement 
processes for Tribal schools, that there are fewer staff to handle such 
filings, and that it can be time-consuming to get approvals for 
procurements from Tribal officials. However, commenters suggested that 
extending the filing window or creating a wholly separate filing window 
would not be helpful at this time and that waiver requests are a better 
way to assist Tribal libraries in applying for E-Rate support. 
Therefore, recognizing that the E-Rate process may be particularly 
challenging for small entities like Tribal libraries, the Commission 
urges such entities to file timely waiver requests of the FCC Form 471 
application filing deadline and to describe in such requests relevant 
special circumstances, such as delays from additional Tribal approvals. 
The Commission expects the Bureau to adjudicate any such requests 
quickly. In this way, the Commission maintains useful program deadlines 
while also providing assistance to Tribal library applicants.
    30. Finally, as suggested by commenters, the Commission directs 
USAC to develop a mechanism to remind all registered users in EPC three 
weeks prior to the invoice filing deadline for each funding request 
(FRN) where no requests for reimbursement have been submitted yet, with 
instructions on how to file for reimbursement and how to file for a 
120-day invoice filing deadline extension. This reminder will offer 
applicants and service providers an opportunity to avoid missing the 
invoice filing deadline and to avoid imperiling their ability to 
receive reimbursement for their E-Rate funding requests. While the 
Commission hopes that this reminder will assist applicants and service 
providers that may have overlooked the invoice filing deadline, 
applicants and service providers are cautioned that it is their 
responsibility to comply with the Commission's invoice filing deadline 
rule, regardless of whether or not USAC has sent a reminder of the 
deadline. The Commission expects this direction to USAC will benefit 
all E-Rate applicants, especially Tribal library applicants who may be 
new to the E-Rate reimbursement process.

III. Procedural Matters

A. Paperwork Reductions Act Analysis

    31. The document contains new information collection requirements 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. It will be submitted to the Office of Management and Budget (OMB) 
for review under section 3507(d) of the PRA. OMB, the general public, 
and other Federal agencies will be invited to comment on the revised 
information collection requirements contained in this proceeding. In 
addition, the Commission notes that pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, the Commission 
previously sought specific comment on how it might further reduce the 
information collection burden on small business concerns with fewer 
than 25 employees.

B. Congressional Review Act

    32. The Commission has determined, and the Administrator of the 
Office of Information and Regulatory Affairs, Office of Management and 
Budget (OMB), concurs, that this rule is ``non-major'' under the 
Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a 
copy of the Report and Order to Congress and the Government 
Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

C. Final Regulatory Flexibility Act

    33. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Tribal E-Rate NPRM. The Commission sought written 
public comment on the proposals in the Tribal E-Rate NPRM, including 
comment on the IRFA. No comments were filed addressing the IRFA. This 
Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
    34. The Commission is required by section 254 of the Communications 
Act of 1934, as amended, to promulgate rules to implement the universal 
service provisions of section 254. On May 8, 1997, the Commission 
adopted rules to reform its system of universal service support 
mechanisms so that universal service is preserved and advanced as 
markets move toward competition. Specifically, under the schools and 
libraries universal service support mechanism, also known as the E-Rate 
Program, eligible schools, libraries, and consortia that include 
eligible schools and libraries may receive discounts for eligible 
telecommunications services, internet access, and internal connections.
    35. Taking steps to close the digital divide is a top priority for 
the Commission. The Commission's E-Rate program, formally known as the 
schools and libraries universal service support mechanism, provides 
vital support to schools and libraries allowing them to obtain 
affordable, high-speed broadband services and internal connections, 
which enables them to connect students and library patrons to critical 
next-generation learning opportunities and services. In this document, 
the Commission enhances Tribal access to E-Rate funding by making both 
Tribal library specific rule changes and program wide changes that will 
help all

[[Page 55408]]

applicants, including Tribal libraries. The Commission modifies its 
rules to allow TCU libraries to become eligible for E-Rate funding if 
they are serving a public library function in their Tribal community. 
The Commission simplifies the program by eliminating competitive 
bidding requirements for Tribal libraries seeking funding for $3,600 
total or less of category two funding, increasing the category two 
maximum discount rate from 85% to 90%, and increasing the category two 
funding floor from $25,000 to $55,000 for Tribal libraries. The 
Commission also provides guidance related to cost allocation by 
establishing a presumption that if at least 90% of an applicant's 
internet usage is for an eligible use the remaining ineligible portion 
is presumed to be ancillary and, therefore, does not need to be cost 
allocated. The Commission clarifies that cabling that is a part of a 
local area network is eligible for funding and does not need to be cost 
allocated. The Commission also modifies its rules to no longer require 
applicants to cost allocate the costs associated with a non-
instructional facility's (NIF) use of shared equipment in NIFs and 
related library administrative buildings. The Commission directs USAC 
to increase training and outreach to Tribal libraries and to provide 
additional support to applicants and registered users of the E-Rate 
Productivity Center. Lastly, the Commission amends its rules to adopt a 
definition for ``Tribal'' and modifies its rules to add an additional 
Director to the USAC Board to represent Tribal communities.
    36. There were no comments filed that specifically address the 
rules and policies proposed in the IRFA.
    37. Pursuant to the Small Business Jobs Act of 2010, which amended 
the RFA, the Commission is required to respond to any comments filed by 
the Chief Counsel of the Small Business Administration (SBA), and to 
provide a detailed statement of any change made to the proposed rule(s) 
as a result of those comments.
    38. The Chief Counsel did not file any comments in response to the 
proposed rule(s) in this proceeding.
    39. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one that: (1) is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA).
    40. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes, at the outset, three broad groups of small 
entities that could be directly affected herein. First, while there are 
industry specific size standards for small businesses that are used in 
the regulatory flexibility analysis, according to data from the SBA 
Office of Advocacy, in general a small business is an independent 
business having fewer than 500 employees. These types of small 
businesses represent 99.9% of all businesses in the United States, 
which translates to 33.2 million businesses.
    41. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 
or less to delineate its annual electronic filing requirements for 
small exempt organizations. Nationwide, for tax year 2020, there were 
approximately 447,689 small exempt organizations in the U.S. reporting 
revenues of $50,000 or less according to the registration and tax data 
for exempt organizations available from the IRS.
    42. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2017 Census of Governments indicate there were 
90,075 local governmental jurisdictions consisting of general purpose 
governments and special purpose governments in the United States. Of 
this number, there were 36,931 general purpose governments (county, 
municipal, and town or township) with populations of less than 50,000 
and 12,040 special purpose governments--independent school districts 
with enrollment populations of less than 50,000. Accordingly, based on 
the 2017 U.S. Census of Governments data, the Commission estimates that 
at least 48,971 entities fall into the category of ``small governmental 
jurisdictions.''
    43. Small entities potentially affected by the rules herein are 
Schools, libraries, Wired Telecommunications Carriers, All Other 
Telecommunications, Wireless Telecommunications Carriers (except 
Satellite), Wireless Telephony, Wired Broadband internet Access Service 
Providers (Wired ISPs), Wireless Broadband internet Access Service 
Providers (Wireless ISPs or WISPs), internet Service Providers (Non-
Broadband), Vendors of Infrastructure Development or Network Buildout, 
Telephone Apparatus Manufacturing, Radio and Television Broadcasting, 
and Wireless Communications Equipment Manufacturing.
    44. The purpose of this document is to streamline and simplify 
procedures, and improve the E-Rate program processes. As such, the 
Commission's rule modifications will reduce the economic impact of 
current compliance obligations on small entities. For example, TCU 
libraries will not have to perform cost-allocation calculations of the 
college student usage at the library versus public usage of bandwidth, 
reducing compliance obligations. The changes the Commission makes will 
also reduce current compliance obligations by exempting certain small 
entity library applicants seeking E-Rate support for category two 
equipment or services of $3,600 or less in a single funding year from 
the competitive bidding process.
    45. New procedures direct USAC to provide specific support for TCU 
libraries, outreach to first-time applicants, and invoice reminders for 
funding requests, which will ease operations and implementation costs 
for applicants and participants that are small entities. Additionally, 
the Wireline Competition Bureau will continue to provide leniency to 
Tribal library applicants that file waiver requests of the FCC Form 471 
application filing deadline, easing the compliance burden for these 
small entities. The Commission is requesting additional information for 
Tribal affiliation as part of the application process, and this 
information request is simple enough that it will not increase the 
burden of applying for relevant applicants that are small entities. 
Small entities will not be required to hire professionals to comply 
with any rule modifications. Although the Commission cannot quantify 
the cost of compliance for small entities, the Commission anticipates 
the approaches it has taken in this document to streamline and simplify 
procedures, and improve the E-Rate program processes will have minimal 
or de minimis cost implications and should significantly reduce 
compliance requirements for

[[Page 55409]]

small entities that may have smaller staff and fewer resources.
    46. The RFA requires an agency to provide, ``a description of the 
steps the agency has taken to minimize the significant economic impact 
on small entities . . . including a statement of the factual, policy, 
and legal reasons for selecting the alternative adopted in the final 
rule and why each one of the other significant alternatives to the rule 
considered by the agency which affect the impact on small entities was 
rejected.''
    47. In this document, the Commission takes steps to minimize the 
economic impact on small entities with the rule changes that it has 
adopted. The Commission made rule changes that will lower the burden 
for applicants to the E-Rate program. By granting Tribal libraries an 
exemption from the competitive bidding process for category two 
purchases totaling under $3,600, the Commission greatly simplifies the 
process of receiving funding for these small purchases, making it 
easier for Tribal libraries with a small staff to apply for E-Rate. The 
Commission also made changes to category two funding for Tribal 
libraries, increasing the maximum discount they can be eligible for 
from 85% to 90%, and increasing the minimum funding budget, increasing 
the funding floor from $25,000 to $55,000 for Tribal libraries. This 
will reduce the share that they must pay for Wi-Fi networks, increase 
the amount of support that is eligible for reimbursement, and allow 
small libraries to have greater access to funding at a lower cost to 
themselves.
    48. The Commission also clarifies its cost allocation rules to 
limit the burden on all applicants, including small entities, adopting 
a presumption that if at least 90% of an applicant's requested internet 
service is being used for eligible purposes, the remaining ineligible 
portion is presumed to be ancillary and, therefore, cost allocation is 
not required. The Commission considered but rejected alternatives for 
removing cost allocation requirements for Tribal libraries in 
multipurpose rooms because of concerns that this would lead to funding 
ineligible services. Finally, the Commission has directed USAC to 
provide enhanced support to all applicants, with particular attention 
being paid to small entities such as small libraries who work with 
their small, local governments to secure funding.
    49. The Commission will send a copy of the Order, including this 
FRFA, in a report to Congress pursuant to the Congressional Review Act. 
In addition, the Commission will send a copy of the Order, including 
the FRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the Order and FRFA (or summaries thereof) 
will also be published in the Federal Register.

IV. Ordering Clauses

    50. Accordingly, it is ordered, that pursuant to the authority 
contained in sections 1 through 4, 201-202, 254, 303(r), and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-202, 
254, 303(r), and 403, this Report and Order is adopted effective 
September 14, 2023.
    51. It is further ordered, that pursuant to the authority contained 
in sections 1 through 4, 201 through 202, 254, 303(r), and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-202, 
254, 303(r), and 403, Part 54 of the Commission's rules, 47 CFR part 
54, is amended, and such rule amendments shall be effective September 
14, 2023, except for Sec. Sec.  54.503(c)(2)(i)(B) and 
54.504(a)(1)(ii), which are delayed indefinitely. The Commission will 
publish a document in the Federal Register announcing the effective 
date for those sections after approved by the Office of Management and 
Budget (OMB) as required by the Paperwork Reduction Act.
    52. It is further ordered, pursuant to the authority contained in 
section 405 of the Communications Act of 1934, as amended, 47 U.S.C. 
405, and Sec.  1.429 of the Commission's rules, 47 CFR 1.429, that the 
Petition for Reconsideration filed by the State E-Rate Coordinators' 
Alliance on January 21, 2020, is dismissed.
    53. It is further ordered that the Office of the Secretary, 
Reference Information Center, SHALL SEND a copy of the Report and 
Order, including the Final Regulatory Flexibility Analysis, to the 
Chief Counsel for Advocacy of the Small Business Administration.
    54. It is further ordered that the Office of the Managing Director, 
Performance Program Management, shall send a copy of this Report and 
Order in a report to be sent to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act, 5 
U.S.C. 801(a)(1)(A).

Federal Communications Commission.
Marlene Dortch,
Secretary.

Final Rules

    For the reasons discussed above, the Federal Communications 
Commission amends 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority citation for part 54 continues to read as follows:

    Authority:  47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
229, 254, 303(r), 403, 1004, 1302, 1601-1609, and 1752, unless 
otherwise noted.

0
2. Section 54.500 is amended by adding, in alphabetical order the 
definition of ``Tribal'' to read as follows:


Sec.  54.500  Terms and definitions.

* * * * *
    Tribal. An entity is ``Tribal'' for purposes of E-Rate funding if 
it is a school operated by or receiving funding from the Bureau of 
Indian Education (BIE), or if it is a school or library operated by any 
Tribe, Band, Nation, or other organized group or community, including 
any Alaska native village, regional corporation, or village corporation 
(as defined in, or established pursuant to, the Alaska Native Claims 
Settlement Act (43 U.S.C. 1601 et seq.)) that is recognized as eligible 
for the special programs and services provided by the United States to 
Indians because of their status as Indians.
* * * * *

0
3. Section 54.501 is amended by revising paragraph (b)(2) and adding 
paragraph (b)(4) to read as follows:


Sec.  54.501  Eligible recipients.

* * * * *
    (b) * * *
    (2) Except as provided in paragraph (b)(4) of this section, a 
library's eligibility for universal service funding shall depend on its 
funding as an independent entity. Only libraries whose budgets are 
completely separate from any schools (including, but not limited to, 
elementary and secondary schools, colleges, and universities) shall be 
eligible for discounts as libraries under this subpart.
* * * * *
    (4) A Tribal college or university library that serves as a public 
library by having dedicated library staff, regular hours, and a 
collection available for public use in its community shall be eligible 
for discounts under this subpart.
* * * * *

0
4. Section 54.502 is amended by revising paragraphs (d)(4) and (6) to 
read as follows:


Sec.  54.502  Eligible Services.

* * * * *
    (d) * * *
    (4) Funding floor. Each eligible school and library shall be 
eligible for support for category two services of at least a

[[Page 55410]]

pre-discount price of $25,000 over five funding years. Tribal libraries 
shall be eligible for support for category two services of at least a 
pre-discount price of $55,000 over five funding years.
* * * * *
    (6) Non-instructional buildings. Support is not available for 
category two services provided to or within non-instructional school 
buildings or separate library administrative buildings unless those 
category two services are essential for the effective transport of 
information to or within one or more instructional buildings of a 
school or non-administrative library buildings, or the Commission has 
found that the use of those services meets the definition of 
educational purpose, as defined in Sec.  54.500. When applying for 
category two support for eligible services within a non-instructional 
school building or library administrative building, the applicant shall 
not be required to deduct the cost of the non-instructional building's 
use of the category two services or equipment.
* * * * *

0
5. Section 54.503 is amended by revising paragraph (e) to read as 
follows:


Sec.  54.503  Competitive bidding requirements.

* * * * *
    (e) Exemption to competitive bidding requirements. (1) An applicant 
that seeks support for commercially available high-speed internet 
access services for a pre-discount price of $3,600 or less per school 
or library annually is exempt from the competitive bidding requirements 
in paragraphs (a) through (c) of this section.
    (i) internet access, as defined in Sec.  54.5, is eligible for this 
exemption only if the purchased service offers at least 100 Mbps 
downstream and 10 Mbps upstream.
    (ii) The Chief, Wireline Competition Bureau, is delegated authority 
to lower the annual cost of high-speed internet access services or 
raise the speed threshold of broadband services eligible for this 
competitive bidding exemption, based on a determination of what rates 
and speeds are commercially available prior to the start of the funding 
year.
    (2) A library applicant that seeks support for category two 
services for a total pre-discount price of $3,600 or less per library 
annually is exempt from the competitive bidding requirements in 
paragraphs (a) through (c) of this section. Applicants must select a 
cost-effective service offering, based on the price of the equipment or 
services.

0
6. Delayed indefinitely, amend Sec.  54.503 by revising paragraphs 
(c)(2)(i)(B).


Sec.  54.503  Competitive bidding requirements.

* * * * *
    (c) * * *
    (2) * * *
    (i) * * *
    (B) The libraries or library consortia eligible for assistance from 
a State library administrative agency under the Library Services and 
Technology Act of 1996 do not operate as for-profit businesses and, 
except for the limited case of Tribal colleges or universities, have 
budgets that are completely separate from any school (including, but 
not limited to, elementary and secondary schools, colleges, and 
universities).
* * * * *

0
7. Delayed indefinitely, section 54.504 is amended by revising 
paragraph (a)(1)(ii) to read as follows:


Sec.  54.504  Requests for services.

    (a) * * *
    (1) * * *
    (ii) The libraries or library consortia eligible for assistance 
from a State library administrative agency under the Library Services 
and Technology Act of 1996 do not operate as for-profit businesses and, 
except for the limited case of Tribal college or universities, their 
budgets are completely separate from any school (including, but not 
limited to, elementary and secondary schools, colleges, and 
universities).
* * * * *

0
8. Section 54.505 is amended by revising paragraph (c) introductory 
text and adding paragraph (g) to read as follows:


Sec.  54.505  Discounts.

* * * * *
    (c) Matrices. Except as provided in paragraphs (d), (f), and (g) of 
this section, the Administrator shall use the following matrices to set 
discount rates to be applied to eligible category one and category two 
services purchased by eligible schools, school districts, libraries, or 
consortia based on the institution's level of poverty and location in 
an ``urban'' or ``rural'' area.
* * * * *
    (g) Tribal Library Category Two Discount Level. For the costs of 
category two services, Tribal libraries at the highest discount level 
shall receive a 90 percent discount.

0
9. Section 54.701 is amended by revising paragraph (b) to read as 
follows:


Sec.  54.701  The Administrator of universal service support 
mechanisms.

* * * * *
    (b)(1) The Administrator shall establish a twenty (20) member Board 
of Directors, as set forth in Sec.  54.703. The Administrator's Board 
of Directors shall establish three Committees of the Board of 
Directors, as set forth in Sec.  54.705:
    (i) The Schools and Libraries Committee, which shall oversee the 
schools and libraries support mechanism;
    (ii) The Rural Health Care Committee, which shall oversee the rural 
health care support mechanism; and
    (iii) The High Cost and Low Income Committee, which shall oversee 
the high cost and low income support mechanism.
    (2) The Board of Directors shall not modify substantially the power 
or authority of the Committees of the Board without prior approval from 
the Federal Communications Commission.
* * * * *

0
10. Section 54.703 is amended by revising paragraph (b) introductory 
text and paragraph (b)(12), redesignating paragraph (b)(13) as 
paragraph (b)(14), and adding a new paragraph (b)(13) to read as 
follows:


Sec.  54.703  The Administrator's Board of Directors.

* * * * *
    (b) Board composition. The independent subsidiary's Board of 
Directors shall consist of twenty (20) directors:
* * * * *
    (12) One director shall represent state consumer advocates;
    (13) One director shall represent Tribal communities; and
* * * * *

0
11. Section 54.705 is amended by redesignating paragraphs (a)(2)(iv) 
and (v) as paragraphs (a)(2)(v) and (vi), and adding a new paragraph 
(a)(2)(iv) to read as follows:


Sec.  54.705  Committees of the Administrator's Board of Directors.

    (a) * * *
    (2) * * *
    (iv) One Tribal community representative;
* * * * *
[FR Doc. 2023-16984 Filed 8-14-23; 8:45 am]
BILLING CODE 6712-01-P