[Federal Register Volume 89, Number 161 (Tuesday, August 20, 2024)]
[Rules and Regulations]
[Pages 67303-67326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-18122]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket No. 21-31; FCC 24-76; FR ID 237079]


Addressing the Homework Gap Through the E-Rate Program

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission or FCC) takes steps to modernize the E-Rate program to meet 
the evolving needs of schools and libraries around the country by 
allowing for the distribution of Wi-Fi hotspots and services to 
students, school staff, and library patrons for off-premises use.

DATES: Effective September 19, 2024, except for the amendments to 
Sec. Sec.  54.504 and 54.516, at amendatory instructions 4 and 9, 
respectively, which are delayed indefinitely. The Commission will 
publish a document in the Federal Register announcing the effective 
date for those sections.

[[Page 67304]]


FOR FURTHER INFORMATION CONTACT: For further information, please 
contact, Molly O'Conor, Telecommunications Access Policy Division, 
wireline competition Bureau, at [email protected] or (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 
Report and Order (Order) and Further Notice of Proposed Rulemaking 
(FNPRM) in WC Docket No. 21-31; FCC 24-76, adopted on July 18, 2024 and 
released on July 29, 2024. The full text of this document is available 
at the following internet address: https://docs.fcc.gov/public/attachments/FCC-24-76A1.pdf.

Introduction

    Technology has become an integral part of the modern classroom and 
receiving an education, especially in the recent past, and the barrier 
to accessing such technology puts individuals at a significant 
disadvantage to their peers and often prevents educators from being 
able to teach. In the Report and Order (Order), the Commission take 
steps to modernize the E-Rate program to meet the evolving needs of 
schools and libraries around the country by allowing for the 
distribution of Wi-Fi hotspots and services to students, school staff, 
and library patrons for off-premises use.
    Since its inception more than 25 years ago, the Commission's E-Rate 
program has supported high-speed, affordable internet services to and 
within school and library buildings, and has been instrumental in 
providing students, school staff, and library patrons with access to 
the essential broadband services that are required for next-generation 
learning. Recognizing the Commission's responsibility to ensure the E-
Rate program evolves with the educational needs of students and library 
patrons, the Commission has frequently modernized the program to 
reflect the changes in education and technology, including by providing 
more equitable access to funding for Wi-Fi networks in schools and 
libraries. Recently the Commission has seen significant advances in 
technology that have changed not only the way schools and libraries 
provide educational resources, but also the way students, school staff, 
and library patrons access such resources. In particular, an internet 
connection has become an essential requirement for learners to access 
tasks that are vital to obtaining an education, including homework 
assignments, online classes, library materials, continuing education, 
and career and government applications.
    The need for internet connectivity beyond the campus boundaries was 
further underscored by nationwide school and library closures beginning 
in 2020 as a result of the COVID-19 pandemic, when most educational 
activities were unexpectedly forced to shift online overnight. During 
this time, thanks to the creativity and resourcefulness of schools and 
libraries around the country, many students, school staff, and library 
patrons that would have been caught on the wrong side of the digital 
divide or the ``Homework Gap''--i.e., students unable to fully 
participate in educational opportunities because they lack broadband 
connectivity in their homes--were able to obtain a broadband connection 
provided by their local school or library. Many schools and libraries 
used funding provided through the congressionally-appropriated 
Emergency Connectivity Fund (ECF) program to purchase connected 
devices, Wi-Fi hotspot devices, broadband connections, and other 
eligible equipment and services for students, school staff, and library 
patrons in need, to use at a variety of locations, including locations 
other than schools and libraries, during the pandemic. Notably, schools 
and libraries found success in establishing ECF-funded Wi-Fi hotspot 
lending programs to provide the hotspot equipment and monthly mobile 
wireless broadband services needed to connect individuals who otherwise 
lacked the internet access needed to fully participate in remote 
learning.
    Even with schools and libraries reopening and returning to in-
person instruction, the need for internet connections outside of the 
school or library buildings to fully engage in education remains, and 
schools and libraries are seeking to continue funding these valuable 
lending programs to keep their students, school staff, and library 
patrons connected. That is why the Commission adapts the E-Rate program 
to recognize these needs. Building on its experiences in the ECF 
program and the comments the Commission received in response to the 
Notice of Proposed Rulemaking (NPRM), 88 FR 85157, December 7, 2023, 
the Commission adopts a budget mechanism to allow for the equitable 
distribution of Wi-Fi hotspots and services to students, school staff, 
and library patrons. These rules are intended to be another step in 
updating the E-Rate program to reflect the realities of many schools 
and libraries by lending Wi-Fi hotspots and services through community 
and school libraries across the country so that students, school staff, 
and library patrons with the greatest need can be connected and learn 
without limits.

Discussion

    In the Order, the Commission takes steps to modernize the E-Rate 
program to ensure that schools and libraries across the nation have the 
tools necessary to connect their students, school staff, or library 
patrons who have fallen onto the wrong side of the digital divide or 
the Homework Gap. First, the Commission permits schools and libraries 
to purchase Wi-Fi hotspots and services that they can lend to students, 
school staff, and library patrons for off-premises use and direct the 
Wireline Competition Bureau (Bureau) to make the services and equipment 
eligible as part of the funding year 2025 eligible services list 
proceeding. Second, relying on the successes of and lessons learned 
from the ECF program, as well as the Wi-Fi hotspot lending programs 
established by schools and libraries with ECF support, the Commission 
establishes a budget mechanism to set a limit on the amount of support 
that an eligible school or library can request for Wi-Fi hotspots and 
services that can be loaned to their students, school staff, and 
library patrons, thereby allowing schools and libraries the flexibility 
to target those with the greatest need in their respective populations. 
Next, the Commission also remains committed to supporting the 
connectivity needs of school and library buildings by prioritizing 
funding for these off-premises services after on-premises-related 
funding requests. Mindful of its duty to be a responsible steward of 
limited universal service resources, the Commission also adopts 
safeguards to ensure the E-Rate funds are used for their intended 
purpose. Finally, the Commission reaffirms its conclusions that the 
obligations of the Children's internet Protection Act (CIPA) apply if 
the school or library receives E-Rate support for internet service, 
internet access, or network connection services or related equipment, 
including Wi-Fi hotspots.
    Based on the record and consistent with its authority pursuant to 
section 254(h) of the Communications Act, the Commission adopts its 
proposal to permit schools and libraries to receive E-Rate support for 
Wi-Fi hotspots and services to be used off-premises by students, school 
staff, and library patrons. Although the E-Rate program has not 
historically provided support for most off-premises uses of E-Rate-

[[Page 67305]]

supported services, the Commission agrees with commenters that today's 
educational environment has substantially changed since the advent of 
the E-Rate program in 1997. Namely, the increasing shift to digital 
learning due to evolving technologies as well as pandemic-related 
changes has resulted in internet connectivity becoming a necessity to 
being able to fully participate in modern education for students, 
school staff, and library patrons alike.
    For schools, the pandemic highlighted the digital divide, leaving 
those students without access to reliable home internet unable to 
access educational resources, participate in remote learning, or 
connect with teachers. Smith Bagley, Inc. (SBi) described how emergency 
funding during the pandemic increased educational opportunities for 
Tribal students by focusing on digital inclusion and introducing 
digital learning tools that have been available to urban and suburban 
communities for years, allowing them to connect to schools on days they 
would otherwise miss and allowing teachers to reach students that would 
otherwise be left disconnected. The digital divide between students 
with access to broadband at home and those without exacerbates existing 
inequalities, particularly for certain communities--such as those in 
rural or economically-disadvantaged areas. Commenters note that stable 
internet connectivity at home is essential to ``educational 
opportunity, equity, and achievement'' with digital learning tools 
enabling ``more expansive, up-to-date content, the inclusion of 
educational videos, and effective online collaboration.'' Others 
explain the reliance on online digital resources allows learners ``to 
engage with supplemental educational materials, complete homework 
assignments, and connect with one another,'' which leaves ``[s]tudents 
and staff that are unable to access the connected classroom . . . at a 
significant disadvantage.'' A 2021 report observed that 
``[h]istorically students caught in the digital divide have lower 
academic achievement with a significant impact on lifetime earnings.''
    Likewise, for libraries, providing free, high-speed access to the 
internet is critical to many of the services libraries provide, 
particularly for disadvantaged communities. Library services 
increasingly include virtual offerings. For example, libraries allow 
patrons to access digital resources remotely, including reserving or 
renewing books, accessing digital collections and e-materials, 
providing community support resources, and even offering support to 
library patrons who are educators or students, making these digital 
resources available to library patrons at the moment they need them. 
Additionally, Wi-Fi hotspot lending programs that provide remote access 
to the internet for library patrons are both successful and in high 
demand. For instance, one commenter explains that at the Chicopee 
Public Library, Wi-Fi hotspots are checked out ``every day to people 
who have no other way of accessing this service without putting 
themselves in danger of being unable to afford basic necessities.''
    The Commission modernizes the E-Rate program to address this 
digital inequity that leaves some students, school staff, and library 
patrons unable to fully participate in schoolwork or access library 
resources. The Commission further recognizes how learning is no longer 
confined to the physical school or library building during regular 
operating hours, and how libraries and schools often serve to fill the 
educational and connectivity gap for their students, school staff, and 
library patrons who lack access to the internet. Additionally, based on 
its experiences through the ECF program, the Commission further seeks 
to recognize the utility of Wi-Fi hotspots as an easily sourced and 
affordable means of providing connectivity for schools and libraries 
and acknowledge the commenters' countless examples of how Wi-Fi hotspot 
lending programs established with ECF funding have benefitted 
communities and students around the nation. Now, numerous libraries and 
schools are faced with the difficult decision to reduce the number of 
Wi-Fi hotspots available for circulation or start charging fees, not 
because of lack of demand, but because of lack of available funding. 
This has only been further exacerbated by the recent loss of Affordable 
Connectivity Program (ACP) benefits by many low-income households 
across the country. As such, the Commission extends eligibility to 
provide eligible schools and libraries with much-needed assistance in 
getting the students, school staff, and library patrons with the 
greatest need connected via Wi-Fi hotspots and services that can be 
used off-premises.
    Eligible Equipment & Services. The Commission adopts the proposed 
definitions to permit Wi-Fi hotspots and mobile wireless internet 
services as eligible for E-Rate support. In the NPRM, the Commission 
sought comment on what specific equipment and services should be deemed 
eligible for the off-premises use of Wi-Fi hotspots and mobile wireless 
internet services. Specifically, the Commission sought comment on 
adopting the ECF program's definition of a Wi-Fi hotspot (i.e., ``a 
device that is capable of (a) receiving advanced telecommunications and 
information services; and (b) sharing such services with a connected 
device through the use of Wi-Fi'') and limiting service eligibility to 
commercially available mobile wireless internet services that can be 
supported by and delivered with such Wi-Fi hotspots. Commenters are 
largely supportive of making off-premises uses eligible for E-Rate 
funding and, despite also requesting additional equipment and services 
be made eligible, were supportive of the proposed definitions of Wi-Fi 
hotspots and mobile wireless internet services that can be used off-
premises. Based on the record, the Commission adopts the proposed 
definitions for the equipment and services eligible for support in the 
E-Rate program and direct the Bureau to add Wi-Fi hotspots and mobile 
wireless internet services that can be used off-premises as eligible 
services as part of the funding year 2025 eligible services list 
proceeding.
    With respect to eligible equipment, the Commission adopts 
definitions of ``Wi-Fi'' and ``Wi-Fi hotspot'' in its rules that are 
based on the definitions adopted by it in the ECF program. 
Specifically, the Commission defines ``Wi-Fi'' as ``wireless networking 
protocol based on Institute of Electrical and Electronics Engineers 
standard 802.11'' and the Commission defines ``Wi-Fi hotspot'' as ``a 
device that is capable of receiving advanced telecommunications and 
information services, and sharing such services with another connected 
device through the use of Wi-Fi.'' The Commission finds that this 
decision is both supported by the record and by its own experiences 
successfully providing connectivity to students, school staff, and 
library patrons delivered by Wi-Fi hotspots through the ECF program. 
However, the Commission also wishes to acknowledge that these terms may 
have other accepted meanings within the communications industry. For 
example, Intel defines ``Wi-Fi hotspot'' to mean ``a physical location 
where individuals can access the internet wirelessly through a wireless 
local area network (WLAN) using Wi-Fi technology.'' The Commission 
concludes that this definition would be overly broad for these 
purposes, as the function described can be provided by many different 
types of devices and may permit unintended scenarios such as funding 
public Wi-Fi hubs in a public

[[Page 67306]]

park or a community center, which is beyond the scope of its goal to 
provide connectivity to individual students, school staff, or library 
patrons caught in the Homework Gap or digital divide. Therefore, for 
the purposes of the E-Rate program, the definition the Commission 
adopts for ``Wi-Fi hotspot'' means a device (sometimes referred to as a 
``mobile hotspot'' or ``portable hotspot device'') that is intended to 
provide Wi-Fi connectivity to a hotspot user as its sole function. 
Additionally, the Commission limits the capability of a sole purpose 
Wi-Fi hotspot to devices that: (1) are portable; and (2) are a single 
device (i.e., not a set of linked devices). Finally, these Wi-Fi 
hotspots must be for use with a commercially available mobile wireless 
internet service, rather than for use with Citizens Band Radio Service 
(CBRS) or other private network services.
    The Commission declines to make other multi-functional devices that 
can support Wi-Fi eligible for E-Rate support. Thus, the Commission 
finds such multi-functional devices, e.g., smartphones, PCs, notebooks, 
tablets, customer premises equipment, routers or switches, and wireless 
access points, etc., are not eligible. In the ECF Order, 86 FR 29136, 
May 28, 2021, the Commission also found it unnecessary to support 
costly smartphones used as Wi-Fi hotspots, when much less expensive 
hotspot devices can serve the same purpose. The Commission finds this 
determination remains true today; and therefore, the Commission limits 
E-Rate support to sole function Wi-Fi hotspot devices. Additionally, 
with respect to the requests to support end-user devices like laptops 
or tablets, the Commission concludes that this equipment remains 
ineligible for E-Rate support, consistent with its previous decisions 
to decline support for ``computers and other peripheral equipment'' 
based on its finding that only equipment that is an essential element 
in the transmission of information is eligible (e.g., internal 
connections) for E-Rate support. Similar to its reasoning for making 
smartphones ineligible, the Commission also finds it unnecessary to 
take on the costly expenses of laptops or tablets with built-in 
wireless connections, when less expensive, sole purpose Wi-Fi hotspots 
are capable of delivering the same service. The Commission also 
declines to permit applicants to request the mobile wireless services 
delivered to broadband-enabled end user devices (e.g., laptops, 
tablets). While the Commission recognizes that there are some benefits 
to students using these devices, the Commission is concerned that it 
adds unneeded complexity in its review of the services eligibility, 
particularly in trying to ensure these E-Rate-supported services are 
targeted to students with need, rather than just to students who need a 
school-assigned tablet or laptop.
    With respect to mobile wireless internet services, the Commission 
limits the use of services to those that can be supported by and 
delivered with Wi-Fi hotspots provided to an individual user. The 
Commission appreciates the suggestions of several commenters who urge 
it to also expand eligibility beyond just Wi-Fi hotspots and mobile 
wireless services. Citing concerns that limiting eligibility to Wi-Fi 
hotspots and mobile wireless services would be contrary to the 
statutory requirement in section 254(h)(2)(A) of the Communications Act 
to establish ``competitively neutral'' rules, these commenters argue 
that the Commission should also permit E-Rate support for other off-
premises technologies, including: fixed wireless connections and the 
related equipment, private 5G/LTE networks, CBRS and television white 
space (TVWS), fiber, and network expansion or construction. The 
Commission acknowledges these commenters' concerns and recognize that 
connectivity provided by Wi-Fi hotspots is not a one-size-fits-all 
solution. However, in taking this action, the Commission remains 
focused on the statutory obligation to establish rules that enhance 
access to the extent it is ``economically reasonable.'' At this time, 
the Commission does not possess the information necessary to make a 
broader determination, nor did any commenters sufficiently analyze the 
feasibility of broadening the scope of eligibility. In particular, the 
Commission does not have sufficient data to rely on to establish 
funding caps on the equipment or service costs associated with other 
solutions or to establish an overall budget like the one adopted for 
Wi-Fi hotspots herein. At this time, the Commission establishes caps in 
this program on both services and equipment in order to simplify 
review, aid administration, and constrain costs. Commenters provided 
examples of costs for existing network builds, but not in a way that 
would allow the Commission to establish caps or assess cost-
effectiveness on costs of access points, antennas, switches, radios, 
customer premises equipment, backhaul, installation, RF design and 
planning, engineering, licenses, maintenance, software updates, and 
other miscellaneous charges. For example, while some stakeholders urge 
the Commission to permit E-Rate support for applicant-enabled off-
campus networks, and provide some analysis for the potential cost 
efficiency of such solutions, they also acknowledge that these 
alternatives that would require much higher up-front deployment costs 
and rely on reaching a large number of students, school staff, and 
library patrons. Even if constrained by the overall budgets adopted, 
the Commission is concerned that these alternative solutions would be 
challenging to review for cost-effectiveness by applicants and the 
Administrator without additional data and analysis. In contrast, the 
Commission's experiences funding Wi-Fi hotspots and mobile wireless 
internet services through the ECF program have demonstrated that this 
particular solution can reasonably be supported. The Commission 
therefore finds that taking this incremental step toward supporting the 
off-premises educational needs of its nation's students, school staff, 
and library patrons is not only in the public interest, but it is also 
within its legal authority. As such, the Commission limits eligibility 
to commercially available mobile wireless internet services and the Wi-
Fi hotspots needed to deliver such services to an individual user.
    Per-User Limits. Mindful of the importance of maximizing the use of 
limited funds, and consistent with the limitation adopted in the ECF 
program, the Commission adopts a rule to prohibit an eligible school or 
library from applying for more than one Wi-Fi hotspot provided for use 
by each student, school staff member, or library patron in the E-Rate 
program. The NPRM sought comment on whether the Commission should 
impose per-user limitations on eligible Wi-Fi hotspots and services. 
The ECF program limited support to one Wi-Fi hotspot device per 
student, school staff, or library patron. Many commenters expressed 
support for this approach. In adopting a per-user limitation on these 
equipment and services, the Commission seeks to equitably distribute 
and maximize the use of limited funds and the number of students, 
school staff, and library patrons served.
    Minimum Service Standards. The Commission declines to adopt minimum 
service standards for Wi-Fi hotspots and services used off-premises at 
this time. While the Commission understands commenters' requests to 
establish limits related to data and quality of service, it finds that 
adopting minimum service standards runs the risk of penalizing the 
students, school staff, and library patrons in places

[[Page 67307]]

where slower speed, data capped, and/or high latency services are 
currently the only affordable options. Furthermore, the Commission 
agrees with commenters' views that schools and libraries are in the 
best position to know what is available and sufficient for their 
students', school staff members', and library patrons' remote learning 
needs. The Commission expects that schools and libraries will make the 
best decisions to meet the remote learning needs of their students, 
school staff, and library patrons.
    Demonstrating Cost-Effective Purchases of Wireless Services. In 
making the off-premises use of Wi-Fi hotspots and mobile wireless 
services eligible, the Commission concludes that the E-Rate program's 
current requirement that applicants demonstrate that mobile wireless 
services are more cost-effective than internal broadband services is 
not applicable to off-premises use. The Commission adopted that 
requirement because schools and libraries often require substantial 
bandwidth connections to meet their on-premises connectivity needs, 
which in turn would require them to seek E-Rate support for large 
numbers of data plans to meet those needs that may be more expensive 
than other methods of providing internal broadband access for mobile 
devices at the school or library. Here, the Commission solely makes the 
off-premises use of mobile wireless services eligible at this time; and 
thus, it finds no need to impose any such requirements for applicants 
seeking support for the off-premises use of wireless internet service 
and the Wi-Fi hotspots needed to deliver the services. In the event 
that the off-premises use of additional services and equipment becomes 
eligible in the future, the Commission will reconsider this approach 
and whether other requirements may be necessary. The Commission also 
reminds applicants seeking support for the off-premises use of wireless 
internet services and Wi-Fi hotspots that they remain subject to the E-
Rate program's competitive bidding rules when seeking support for these 
services and equipment, including the requirement that they select the 
most cost-effective service offering, using price of the eligible 
equipment and services as the primary factor considered.
    Implementation. The Commission directs the Bureau to make Wi-Fi 
hotspots and internet services eligible for E-Rate funding as part of 
the funding year 2025 eligible services list proceeding. Additionally, 
in implementing these changes, the Commission reaffirms the delegation 
of authority to the Bureau to interpret its rules and otherwise provide 
clarification and guidance regarding any ambiguity that may arise to 
ensure that support for these services provided to schools and 
libraries further the goals it has adopted for the E-Rate program. The 
Commission also directs the Universal Service Administrative Company 
(USAC), the Administrator of the E-Rate program, in coordination with 
and under the oversight of the Bureau, to issue further guidance and 
training on administrative and related processes for requesting support 
for the off-premises use of Wi-Fi hotspots and services.
    Wi-Fi Hotspot Lending Program Mechanism. The Commission now adopts 
a budget mechanism to allow for the equitable distribution of Wi-Fi 
hotspots and services to students, school staff, and library patrons. 
In doing so, the budget mechanism will allow eligible schools and 
libraries to develop hotspot lending programs, while setting a limit on 
the amount of support that an applicant can request for Wi-Fi hotspots 
and services. In the NPRM, the Commission sought comment on how to 
establish a Wi-Fi hotspot program, recognizing that there are 
insufficient E-Rate funds to support a Wi-Fi hotspot and recurring 
service for every student, school staff member, and library patron 
across the nation. The NPRM also asked whether a per-student limit, 
like the one used for category two funding budgets, could help ensure 
support was distributed equitably to schools and libraries. The NPRM 
sought administratively feasible ways to prioritize support to students 
and library patrons without sufficient internet access. In response, 
several commenters described the challenges to the approaches used in 
the ECF program and sought greater flexibility for schools and 
libraries. The Commission also looks to lessons learned from its 
administration of the ECF program in addressing these challenges, with 
particular focus on program integrity. With these considerations in 
mind, the Commission adopts a budgeted approach based on a mechanism 
provided in the comments to create a targeted lending program that 
allows eligible schools and libraries to be able to request a limited 
number of Wi-Fi hotspot devices and services, if they have need for 
them, within a pre-discount budget similar to the E-Rate program's 
category two budgets. This approach takes into account the applicant 
size, using information that is already collected as part of the 
category two budget process, and also relies on the E-Rate program's 
historic focus on poverty and rurality by using the applicants' 
discount rates to calculate a Wi-Fi hotspot budget. Schools and 
libraries at higher discount rate levels will be eligible to request 
and receive a greater amount of E-Rate support for Wi-Fi hotspot 
devices and services than schools and libraries at lower discount rate 
levels.
    In establishing a budgeted approach to the lending program 
mechanism, the Commission expects that the limited number of available 
Wi-Fi hotspots will more naturally be targeted to students, school 
staff, or library patrons with the most need. The budget mechanism will 
allow schools and libraries to target the appropriate individuals that 
lack broadband access; therefore, the Commission finds it does not need 
to adopt a survey requirement or other document collection requirement. 
Specifically, except in the one occasion discussed in this document, 
this limited lending approach will not require applicants to document 
whether a particular student, school staff member, or library patron 
has ``unmet need'' as the Commission defined that term in the ECF 
program, relying instead on establishing a hotspot budget to prevent 
applicants from over-purchasing Wi-Fi hotspots and services and 
permitting applicants to use their judgment to determine the need in 
their own localities within those limits. Instead, to ensure that use 
of the hotspot lending program is consistent with its objectives, the 
Commission will require schools and libraries to adopt and provide 
notice to the Wi-Fi hotspot recipients of an acceptable use policy 
(AUP) that highlights that the goal of the hotspot lending program is 
to provide broadband access to students and library patrons who need 
it. In combination with the applicant's requirement to pay its non-
discounted share of costs, schools and libraries will be incented to 
right-size their Wi-Fi hotspot and service requests. However, the 
details of such a hotspot lending program--such as length of lending 
periods and how to target the appropriate students and library 
patrons--will be left to the applicant to determine and tailor the 
hotspot lending program to their local needs. For these reasons, the 
Commission can streamline the procedures that caused applicants the 
most challenges in the ECF program, benefiting applicants, service 
providers, and the Administrator.
    The Commission finds adopting this approach to be a reasonable 
mechanism for limiting how many Wi-Fi hotspots and connections can be 
requested by an applicant. Specifically, applicants will be limited to 
a budget based on their

[[Page 67308]]

full-time student count or library square footage, and their category 
one discount rate. In doing so, the Commission establishes bright line 
limits that are fair and equitable--allowing eligible schools and 
libraries to request Wi-Fi hotspots and service, but limiting the pool 
of Wi-Fi hotspots and service lines an applicant can request based on 
its discount rate and school or library size. This will allow schools 
and libraries to request funding for a Wi-Fi hotspot lending program 
that can provide wireless internet service to its students, school 
staff, and library patrons when it is needed most. The Commission 
prohibits one situation based on its experience in the ECF program--
using Wi-Fi hotspots as part of a one to one (1:1) hotspot initiative, 
where every student receives a Wi-Fi hotspot. The Commission recognizes 
that even under the limiting mechanism, applicants might have a 
sufficient Wi-Fi hotspot budget that they could try to focus them all 
to a 1:1 initiative at a single low-income school in a district or a 
particular grade (e.g., all juniors). Generally, applicants are 
prohibited from seeking E-Rate support for a 1:1 hotspot initiative 
like this and will be required to certify on the FCC Form 471 
application that the hotspots and service will not be used for a 1:1 
hotspot initiative. If E-Rate-funded Wi-Fi hotspots are used as part of 
a 1:1 initiative--either in practice by providing all of the devices to 
a single school in the district or in conjunction with Wi-Fi hotspots 
funded via other sources, applicants must document clearly (i.e., 
individual survey results or attestations) that each individual student 
needed a Wi-Fi hotspot, in accordance with the AUPs, and may not rely 
on general or estimated findings about income levels. Funding 
disbursements for applicants without specific documentation to support 
a 1:1 Wi-Fi hotspot initiative will be subject to denial and/or 
recovery.
    Wi-Fi Hotspot and Services Funding Caps. The Commission first 
adopts pre-discount funding caps on the amounts that can be requested 
for services and hotspot equipment in the E-Rate program. Specifically, 
the Commission adopts a pre-discount $15 per month limit on recurring 
mobile wireless internet service and a pre-discount $90 per Wi-Fi 
hotspot limit, based on the median cost of monthly services and Wi-Fi 
hotspots purchased in the ECF program. Taxes and State electronic waste 
fees are not included in the cap, while other reasonable costs such as 
delivery fees, activation, and configuration costs are included in the 
capped amounts. All taxes and fees should be separately identified on 
invoices and requested on a separate funding line. In the NPRM, the 
Commission sought comment on cost control mechanisms, including funding 
caps on Wi-Fi hotspots or services. Some commenters support a cap on 
the Wi-Fi hotspots and services, with some suggesting that the averages 
from the ECF program would be an appropriate place to start. Others 
disagreed, suggesting that competitive bidding and the applicants' non-
discounted share of costs requirement would be sufficient, with some 
cost-effectiveness checks during the Program Integrity Assurance (PIA) 
review process.
    On balance, the Commission agrees with commenters suggesting that 
funding caps will more effectively ensure equitable distribution of Wi-
Fi hotspots, drive more cost-effective purchasing within the E-Rate 
program, and reduce the likelihood that these costs become 
unsustainable. The Commission also expects that clear funding caps will 
lead to a more streamlined review of these funding requests, 
simplifying administration of these requests. For example, the 
Commission disagrees with commenters that unreasonable costs are easily 
taken up in the PIA reviews, when the data the Commission have from the 
ECF program and the record in this proceeding shows a large variation 
in costs depending on service provider, technology type, and how 
contracts are structured. Setting funding caps will also reduce 
concerns about applicants selecting multiple service offerings in 
instances where a single service provider will not be able to cover the 
entire coverage area. In these instances, the program's competitive 
bidding rules would otherwise be less effective in ensuring cost-
effective purchasing when applicants may need multiple service 
providers in order to provide coverage options in various geographic 
parts of the student or library patron community. By using a funding 
cap, applicants that select multiple service providers will still be 
capped at a cost-effective price, even if they require selection of 
service offerings that may be more expensive.
    Consistent with the ECF program, applicants are permitted to select 
a Wi-Fi hotspot or service that costs more than the funding caps, but 
E-Rate commitments will not exceed the funding caps. The Commission 
expects the E-Rate program's competitive bidding rules to aid 
applicants in selecting the most cost-effective service offerings, but 
it also directs USAC to examine costs that do not appear to be cost-
effective, based upon other costs within the program or other 
commercially available offerings. Although the Commission is adopting 
funding caps for recurring services and Wi-Fi hotspots to help control 
overall costs to the E-Rate program, the Commission expects applicants 
to request E-Rate support based on actual, commercial-based costs. For 
example, an applicant cannot request funding at the cap levels, but 
purchase Wi-Fi hotspots and recurring services at lower costs and allow 
service providers to keep the difference in costs as their profit or 
windfall. The Commission will also require service providers to certify 
that the costs of the Wi-Fi hotspots do not exceed commercial value. 
USAC is permitted to modify or reduce such funding requests, as 
appropriate, to reflect the actual, market-based price of commercially-
available Wi-Fi hotspots and to seek recovery in the event of a later 
determination that the E-Rate funded costs were higher than the actual 
costs of the requested Wi-Fi hotspots and/or recurring services.
    Calculating Budgets. Next, the Commission establishes a formula to 
calculate a three-year pre-discount Wi-Fi hotspot and service budget, 
limiting the amount of E-Rate support that can be requested by an 
applicant for Wi-Fi hotspots and recurring service over three funding 
years. E-Rate Central suggests adopting a formula modeled after the 
category two budgets that limits applicants to 20 hotspots per 100 
students and 5.5 hotspots per 1,000 library square feet, adjusted by 
discount rate. Using this proposed formula and multiplying the result 
by the three-year cost of the funding caps ($630), applicants will 
calculate a three-year Wi-Fi hotspots and service budget. This is the 
maximum amount of pre-discount funding permitted for Wi-Fi hotspots 
and/or service over three funding years. E-Rate Central proposed 
limiting the quantity of Wi-Fi hotspots and services, but there are 
important benefits to calculating a maximum Wi-Fi hotspot budget for 
several reasons. One, a budget will allow schools and libraries greater 
flexibility in spending by allowing applicants to request funding for 
the most appropriate mix of Wi-Fi hotspots and service, depending on 
their needs. Two, a budget will provide applicants better incentives to 
make cost-effective purchases by permitting them to purchase higher 
quantities if there are lower costs. Three, budgets will also 
facilitate use of existing Wi-Fi hotspots purchased through the ECF 
program or with other Federal funds that are still functional by 
permitting

[[Page 67309]]

applicants to purchase higher quantities of service requests, if 
needed. Applicants that select lower-cost Wi-Fi hotspots, or that find 
ways to maintain Wi-Fi hotspots for longer, will be able to request a 
larger quantity of E-Rate supported hotspots or lines of service 
depending on their individual needs and budget.
[GRAPHIC] [TIFF OMITTED] TR20AU24.000

    Calculating Independent School and School District Hotspot Budgets. 
Independent schools and school district applicants will calculate their 
Wi-Fi hotspot and service budgets by multiplying their student counts 
by 20% (i.e., 20 hotspots per 100 students), and adjusting by their 
category one discount rates. This number is rounded up to the nearest 
ten. The applicant then multiplies that rounded number by $630 to 
determine the three-year budget. For example, an independent school 
with 500 students and a 90% discount rate would have a three-year, pre-
discount budget of $56,700, while a school district with 500 students 
and a 40% discount rate would have pre-discount budget of $25,200. 
Unlike the ECF program, these limits will reduce the number of hotspots 
that could be requested from the start, requiring schools and districts 
to make choices about how to distribute and prioritize access for 
students with the greatest need or set lending terms that allow 
students to access devices at times when need is high. To the extent 
that the formula needs adjustments, the Commission provides a means for 
future changes as discussed, but expect that the benefits of a single 
formula applicable to all school applicants will be simpler and more 
administrable than attempting to find a precise number for different 
types of applicants and will greatly decrease burdens on applicants and 
the Administrator than if different formulas were adopted dependent 
upon type of school applicant.
    Calculating Independent Libraries and Library System Hotspot 
Budgets. Likewise, independent libraries and library systems would 
calculate their Wi-Fi hotspots and service budgets using their square 
footage, allowing 5.5 devices per 1,000 square feet, adjusted by their 
category one discount rates. This number is rounded up to the nearest 
ten. The applicant then multiplies that rounded number by $630 to 
determine the three-year pre-discount budget. For example, an 
independent library of 10,000 square feet at the 90% discount rate 
would have a three-year pre-discount budget of $31,500, while a library 
system with 100,000 square feet and a 90% discount rate would have a 
three-year pre-discount budget of $315,000. Smaller libraries would 
thus be eligible for at least 10 devices and services lines, while 
larger library systems would be eligible for more. Like schools, the 
Commission adopts this formula in order to allow libraries to plan for 
and determine how and whether to request E-Rate support for a library 
hotspot lending program. The Commission adopts the factor suggested in 
the comments, which is roughly based on the ratios developed in the 
category two budgets for schools and libraries, but also adopt a means 
to adjust the formula in the future should the library factor be 
insufficient for library patron access, particularly in areas of the 
country where there may be higher need, but small libraries, such as 
rural-remote areas.
    For purposes of the calculation, full-time student count and square 
footage figures will be calculated at the district-wide or library 
system level in order to make use of existing information collections 
and procedures. Independent schools may apply using entity-level 
student counts. In doing this, the Commission seeks to use data that is 
already collected on the FCC Form 471 application for the applicants' 
category two budgets. Similarly, the Commission will allow an applicant 
to rely on a validated category two student count or square footage 
figure for purposes of the Wi-Fi hotspot limiting mechanism. Relying on 
information already collected and validated for category two purposes 
will reduce burdens on applicants and the Administrator. For funding 
year (FY) 2025 through FY 2027, schools and school districts with a 
validated category two student count could rely on that number (and 
similarly, libraries with a validated square footage), but would need 
to revalidate student counts in the next three-year Wi-Fi hotspot 
funding cycle (i.e., FY 2028 through FY 2030).
    The Commission also will use fixed three-year budget cycles, after 
which the budgets will reset, beginning with funding years 2025 through 
2027. Based on the experience with category two budgets, the Commission 
believes a fixed cycle will reduce applicant confusion and simplify 
administration. Entities are allowed to spread out their requests for 
Wi-Fi hotspots and services over the three-year timeframe, as long as 
the total pre-discount amount does not exceed the budget over the three 
funding years. Entities may request support for Wi-Fi hotspot service 
even if the associated Wi-Fi hotspots were not directly funded under 
the new E-Rate rules. However, applicants may not request more than 45% 
of its three-year budget in any year. The Commission finds this 
valuable in order to prevent applicants with high numbers of existing 
Wi-Fi hotspots from simply using the entire budget in a single funding 
year. The Commission will also require that such services must be 
competitively bid prior to requesting E-Rate support pursuant to the 
program's competitive bidding rules.
    The Commission emphasizes that the hotspot budget represents the 
maximum pre-discount amount an applicant may request across three 
funding years, rather than an allocation of funding for Wi-Fi hotspots 
and service lines for which an applicant is entitled reimbursement. 
Applicants should evaluate whether there is need in their own school 
and library communities and what can be effectively used and tracked in 
compliance with program

[[Page 67310]]

rules. Applicants will also continue to be subject to the E-Rate 
program rules requiring that schools and libraries are responsible for 
paying the non-discounted share of the costs. The intent of this 
hotspot lending program is for the Wi-Fi hotspots to be available for 
loan to and for use by students, school staff, or library patrons 
without sufficient broadband access at home and other off-campus 
locations for educational purposes. Applicants and service providers 
will be subject to E-Rate program rules, certifications, and other 
requirements designed to protect program integrity, as discussed.
    Applicants may not request funding for Wi-Fi hotspots for future 
use or to be stored in case of an emergency, and the Commission will 
not allow applicants to purchase Wi-Fi hotspots to store in case of 
theft, loss, or breakage. Each Wi-Fi hotspot must be associated with a 
line of service. The Commission recognizes the concerns from commenters 
about replacing Wi-Fi hotspots, but based on lessons from the ECF 
program, determine that a streamlined approach would be simpler to 
administer, provide clarity for applicants, and ensure limited E-Rate 
program funds are used appropriately. In the event of loss or breakage, 
applicants may purchase extra devices with other sources of funding to 
use with the E-Rate-supported service or they can request replacement 
devices paired with lines of service in the next funding year if they 
have not exhausted their budgets. The Commission cautions, however, 
that applicants that do not replace lost or broken hotspots must work 
with their service providers to discontinue the associated service 
within a reasonable amount of time of becoming aware of the issue 
(e.g., 30 days). In order to ensure the E-Rate program is not paying 
for services that sit unused for these or other reasons, the Commission 
will require service providers to exclude or waive any associated early 
termination fees for the services to Wi-Fi hotspots being funded with 
E-Rate support that are lost, broken, or unused and can no longer be 
distributed to students, school staff, or library patrons. The 
Commission reminds applicants that they must document information about 
lost or broken equipment in the asset inventory containing details 
about each Wi-Fi hotspot.
    In combination, the Commission expects this three-year pre-discount 
budget mechanism and the funding caps to be effective in ensuring that 
schools and libraries with students, school staff, and library patrons 
with need have access to E-Rate funding to effectively set up and 
request funding for hotspot lending programs, while protecting the 
Universal Service Fund from overspending and reducing administrative 
burdens, as compared to the ECF program. At the same time, the 
Commission is cognizant that a one-size formula for limiting hotspot 
requests may not fit every school and library and may need to be 
adjusted if it is impacting program participation. As such, the 
Commission delegates to the Bureau, working with the Office of 
Economics and Analytics, the ability to adjust the limiting mechanism 
quantities (i.e., 20 per 100 students and 5.5 per 1,000 square feet) as 
well as the funding caps in future funding years or future three-year 
budget cycles, after seeking comment on such an adjustment. The 
Commission also delegates to the Bureau the authority to resolve 
technical, procedural, and administrative issues that may arise in 
connection with this formula.
    In the NPRM, the Commission sought comment on what category of 
service should be used for wireless internet service and the Wi-Fi 
hotspots needed to deliver the service, as well as how to prioritize 
such services should demand for E-Rate support exceed the annual 
funding cap. Consistent with the existing eligible services list, 
wireless internet services will be listed as eligible as a category one 
service, and will not be subject to the category two budgets. Wi-Fi 
hotspots will be eligible as category one network equipment necessary 
to make category one wireless internet services functional. The 
Commission agrees with commenters arguing that it should be eligible as 
category one, consistent with the treatment of supporting equipment 
necessary to sustain connectivity.
    At the same time, in the event that demand for E-Rate support 
exceeds available funding, the Commission also adopts a rule to fund 
requests for eligible off-premises use of Wi-Fi hotspots and services 
after requests for eligible on-premises services, inclusive of both 
category one and category two services. Based on recent funding years 
and the limits that the Commission is adopting on Wi-Fi hotspot and 
recurring service requests, it does not expect the changes it adopts to 
cause demand to exceed the E-Rate funding cap. However, the Commission 
agrees with commenters that this approach will ensure that on-campus E-
Rate funding is available and predictable for schools and libraries in 
future funding years. In making this determination, the Commission also 
applies it to requests for funding for off-premises use of school bus 
Wi-Fi services. Mobile wireless broadband connectivity for school buses 
is also eligible as a category one service, but as an off-premises 
wireless internet service, it will be funded after eligible on-premises 
services should demand exceed the E-Rate annual funding cap. This 
appropriately treats these off-premises wireless internet services and 
the equipment needed for the connectivity in the same manner and 
ensures that future demand for these off-premises services does not 
make access to on-premises broadband connectivity to and within the 
schools and libraries less predictable.
    Next, mindful of its obligation to protect the integrity of the E-
Rate program and be a careful steward of these limited funds, the 
Commission adopts a number of safeguards aimed at ensuring compliance 
with its rules and strengthening program integrity. In deciding whether 
and which measures to adopt, the Commission considers a variety of 
factors, including, importantly, the intended purpose for which this 
funding is available, its experience with the ECF program, and 
commenters' concerns regarding the burdens associated with and 
feasibility around adopting such protections. The Commission also 
relies on and leverage existing tools to ensure compliance with its 
rules, such as its audit procedures and competitive bidding, non-
discounted share of costs, and discount rate rules. Coupled with those 
protections already built into the design of the mechanism the 
Commission establishes for the distribution of Wi-Fi hotspots and 
services, it seeks to protect the Fund, and the Commission reiterates 
its commitment to identify and pursue instances of waste, fraud, and 
abuse, including recovery of improperly disbursed funds where 
appropriate.
    In the NPRM, the Commission sought comment on ways to ensure that 
the off-premises use of Wi-Fi hotspots and services primarily serves an 
educational purpose consistent with the Commission's rules and section 
254(h)(1)(B) of the Communications Act. Specifically, the Commission 
asked whether requiring schools and libraries to certify on their forms 
that E-Rate support is being used primarily for this purpose is 
sufficient or if additional safeguards should be imposed to protect 
against improper use. Based on its experience with the ECF program and 
recognizing that the off-premises use of Wi-Fi hotspots and services 
raises novel challenges about ensuring their proper use, the Commission 
finds that adopting additional safeguards is necessary to ensure that 
E-Rate program funds are used for their intended purpose and to protect 
the integrity of the program. In

[[Page 67311]]

so doing, the Commission rejects those views expressed by commenters 
that the existing certifications are sufficient safeguards, and that 
ensuring the proper use of Wi-Fi hotspots and services off-premises is 
overly burdensome or impractical.
    The Commission reminds applicants that E-Rate program rules require 
schools and libraries to use E-Rate-supported services, including Wi-Fi 
hotspots and services used off-premises, primarily for educational 
purposes. Thus, in addition to requiring schools and libraries to use 
the existing E-Rate certifications to ensure that the off-premises use 
of E-Rate-funded Wi-Fi hotspots and services is primarily for an 
educational purpose, the Commission requires applicants to maintain 
and--where necessary--update their acceptable use policies to clearly 
state that this off-premises use must be primarily for an educational 
purpose as defined by its rules. With respect to schools, this means 
that the acceptable use policy must state that the use must be 
``integral, immediate, and proximate to the education of students.'' 
Similarly, for libraries, the acceptable use policy must clearly state 
that the use must be ``integral, immediate, and proximate to the 
provision of library services to library patrons.''
    While the Commission's rules require schools and libraries to 
ensure the use of E-Rate-funded services align with these purposes, it 
has long-recognized that schools and libraries are in the best position 
to determine what guidelines and restrictions should govern the 
appropriate use of their networks and other technology. The Commission 
did not find the need to impose any other restrictions or 
specifications in the ECF program; and the Commission agrees with 
commenters that schools and libraries are appropriately positioned to 
make determinations about acceptable use in their communities. 
Applicants are subject to the requirements under the Children's 
internet Protection Act, which requires local educational agencies and 
libraries to establish specific technical protections before allowing 
network access. In establishing such protections, applicants often 
create AUPs that outline expected user behaviors. For example, schools 
in Virginia are ``required to establish guidelines for appropriate 
technology use'' and AUPs must, among other things, state ``the 
educational uses and advantages of the internet'' and identify 
``prohibited forms of technology-based applications and hardware use.'' 
School staff and students are also required to ``monitor the use of 
technologies for grade-level and content appropriateness, ethics, and 
safety.'' Similarly, Maine State Libraries are encouraged to have an 
AUP in place for technology that is available for patron use and to 
review these policies with library staff. The Commission expects that 
schools and libraries will implement content and user network 
restrictions consistent with the restrictions that they place on their 
building-based networks, and to adopt suitable AUPs and other policies 
to limit access, but the Commission seeks to ensure applicants have the 
flexibility for unique situations and to avoid layering additional, 
similar restrictions that could result in program violations. For 
example, duration limits could deter applicants seeking to use hotspots 
for students that are home sick or home for inclement weather and 
accessing school or homework remotely.
    Nor does the Commission require applicants to restrict access to 
the off-premises use of Wi-Fi hotspots and services to only users with 
appropriate credentials at this time. Based on the record, the 
Commission finds that it does not have sufficient information to adopt 
such requirements; and its experience with the ECF program suggests 
that many schools and libraries already require appropriate credentials 
when logging into their networks and using school- or library-issued 
devices, while those that do not have such restrictions typically have 
other technical solutions to limit access. To avoid unnecessarily 
penalizing those applicants with technical limitations and to provide 
applicants with flexibility, the Commission does not require schools 
and libraries to implement specific user access restrictions at this 
time, and it seeks additional comment on this issue in the companion 
FNPRM. Notwithstanding, consistent with Bureau's expectation around the 
use of Wi-Fi services on school buses, to the extent schools and 
libraries already restrict access to their networks and devices, the 
Commission expects them to continue to implement content and user 
network restrictions consistent with those restrictions that they place 
on their building-based broadband networks as described in their 
acceptable use and other policies. The Commission finds that this 
approach provides reasonable limits to ensure that the off-premises use 
of Wi-Fi hotspots and services is primarily for educational purposes in 
accordance with a school's and library's existing AUP and other 
policies.
    To ensure students, school staff, and library patrons are aware of 
the limited purpose for which they might use E-Rate-funded Wi-Fi 
hotspots and services off-premises, the Commission requires schools and 
libraries to provide notice by adopting and publicly posting their 
acceptable use policies in whatever form they deem appropriate, but do 
not require them to collect signed documentation of user compliance 
with these policies as the Commission required of libraries 
participating in the ECF program. Given that schools and libraries 
already typically provide some form of notice of their acceptable use 
policies to students, school staff members, and library patrons, the 
Commission finds that imposing such a requirement would not be overly 
burdensome. The Commission likewise agrees with those commenters who 
argue that collecting signed documentation of user compliance with 
these policies is a significant burden on applicants, many of whom have 
limited resources and staff to collect and maintain such documentation. 
Indeed, its experience with libraries who participated in the ECF 
program has demonstrated just how onerous and complicated collecting 
and maintaining signed user compliance documentation can be; and the 
Commission is particularly sensitive to the concerns raised by some 
commenters that such measures might cause libraries to run afoul of 
their State privacy laws and, as a result, discourage participation. 
Accordingly, the Commission does not require applicants to collect this 
sort of user compliance documentation. However, applicants will be 
required to certify on their FCC Forms 486 that they have updated and 
publicly posted their acceptable use policies in accordance with the 
rules adopted herein. Additionally, applicants may be requested to 
provide their acceptable use policies and provide evidence of where it 
is publicly posted, upon request by the Commission or the 
Administrator.
    Finally, while the Commission recognizes that schools and libraries 
may not have the same level of supervision or control over their 
students', school staff members', or patrons' off-premises use of Wi-Fi 
hotspots and services as they might have on-premises or even on a 
school bus as one commenter suggests, with these additional safeguards 
in place, the Commission expects to better ensure their proper use 
consistent with its rules and the Communications Act than if the 
Commission only relied on the existing E-Rate certifications. And, 
consistent with its existing rules, the Commission remind applicants 
that its rules require that E-Rate-supported equipment and services be 
primarily used for educational purposes, not solely used

[[Page 67312]]

for this purpose as one commenter submits. Thus, its rules provide 
some, albeit intentionally limited, flexibility to use these Wi-Fi 
hotspots and services for other purposes when they are not needed for 
educational purposes in the first instance. Applicants may be required, 
during a post-commitment review or audit, to explain what steps they 
have taken to comply with the requirement that use of the Wi-Fi 
hotspots is primarily for educational purposes (e.g., user 
restrictions, content restrictions, or duration or time limits).
    In the NPRM, the Commission sought comment on how to prevent the 
warehousing of Wi-Fi hotspots and reimbursement for unused equipment 
and/or services. Among the various ways contemplated, the Commission 
asked whether it should adopt numerical criteria to assess usage, 
require participants to provide evidence of usage, direct service 
providers to terminate services that are not being used, and/or limit 
E-Rate support to nine months out of the year (i.e., the length of a 
typical school year) to prevent the program from covering the costs of 
unused devices and services during the summer. Many commenters agree 
that the E-Rate program should not pay for unused and/or warehoused 
equipment or services. At the same time, commenters urge us to create 
requirements that are both administrable for participants and also take 
into consideration the practical reasons why equipment or services may 
go unused for limited periods of time before adopting specific non-
usage requirements and reimbursement denial procedures. As a general 
matter, the Commission agrees with these commenters and recognize that 
there are numerous reasons for non-usage and that applicants and 
service providers are often unable to monitor or mitigate all instances 
of non-usage. The Commission therefore distinguishes the treatment for 
equipment or services that are entirely unused or warehoused from 
instances where Wi-Fi hotspot equipment and services may have limited 
periods of non-usage.
    The Commission first relies on the agency's extensive experience 
overseeing the ECF program in designing a hotspot program that protects 
against waste and abuse. It's experience suggests that reasonable 
safeguards to prevent warehousing and manage non-usage are necessary 
and possible, and the Commission rejects the view expressed by one 
commenter that there is no need for any usage requirement if the 
Commission applies existing competitive bidding requirements to off-
premises services. In addition, the Commission made several important 
modifications to this hotspot initiative to distinguish it from the 
statutorily required procedures in the ECF program. First, the 
competitive bidding requirements required here were not mandatory in 
ECF, and the Commission believes requiring them will help ensure 
applicants consider available options and make cost-effective 
purchases. Next, the budget mechanism the Commission imposes will also 
require applicants to use limited funding to target those students, 
school staff, and library patrons with the greatest need. The 
Commission also placed funding caps for hotspot devices and recurring 
service, which will have the effect of limiting the E-Rate funding 
available for Wi-Fi hotspots and service. Finally, the Commission also 
believes requiring schools and libraries to pay the non-discount share 
of costs will help incentivize applicants to make measured choices and 
determine community needs. These important distinctions from the ECF 
program will be integral to helping us protect limited funds. The 
Commission disagrees with the commenter and find it is necessary to 
adopt additional requirements to ensure that the Commission is 
maximizing the use of E-Rate supported Wi-Fi hotspots and services.
    Requirements. Considering its long-standing obligation to protect 
the integrity of the E-Rate program and being mindful of the concerns 
expressed by commenters regarding the feasibility of tracking and 
identifying non-usage, the Commission adopts a combination of 
requirements to protect against non-usage. The Commission first 
requires applicants to activate the Wi-Fi hotspot and service, make it 
available for loan, and publicize the availability of the Wi-Fi hotspot 
device and service to students, teachers, and library patrons via 
public notice or other means. To further protect the program from 
potential waste, the Commission also requires applicants to certify to 
having taken these steps on their FCC Forms 486. Applicants already use 
the FCC Form 486 to notify USAC that services have started on a 
particular funding request and will be required to certify to adopting 
measures to ensure proper use of E-Rate-funded Wi-Fi hotspots and 
services, among other things, and are required to submit these forms 
120 days after the service start date or the date of the funding 
commitment decision letter, whichever is later. The Commission finds 
that requiring applicants to also certify to having taken these steps 
on their FCC Forms 486 before they or their service providers can begin 
to submit their requests for reimbursement is reasonable and would not 
be overly burdensome. To be clear, the Commission expects schools and 
libraries to make every effort to make available and encourage the use 
of Wi-Fi hotspots and services supported by the E-Rate program.
    Second, the Commission expects that schools and libraries will 
carefully consider how to structure their lending programs to promote 
ongoing use of Wi-Fi hotspots and services. ALA highlights the 
importance of flexibility in circulation policies to address local 
needs but notes a general standard is necessary to ``ensur[e] the data 
is used regularly by users.'' The Commission agrees that schools and 
libraries understand well their community needs and are in the best 
position to structure a lending program to meet those needs, and can do 
so in a way that maximizes use of Wi-Fi hotspots and services following 
the requirements the Commission adopted. Such measures to encourage use 
may include limited lending periods (e.g., 21 days or less), providing 
technical assistance to students and library patrons, monitoring 
circulation statistics, or other approaches deemed suitable by the 
school or library for the local community. For example, EveryLibrary 
Institute explains that libraries often already have mechanisms in 
place to pause service to a specific device which is ``typically enough 
reason for the patron to return the device.'' This prevents the service 
provider from billing ``for the time elapsed when the device was not in 
service, reducing program costs automatically.'' Similarly, ALA 
reported that ``the Dublin Public Library in Texas and Pima County 
Library in Arizona [are] able to work with service providers to track 
data usage and other aspects of hotspot use.''
    Finally, to further prevent the E-Rate program from paying for 
ongoing services that are not being used, lines of service that have no 
data usage for approximately three consecutive months must be 
terminated by the service provider. As discussed further in this 
proceeding, on a monthly basis, service providers are required to 
notify applicants of each line of hotspot service that goes unused for 
at minimum 60 consecutive days and to provide applicants 30 days for 
the hotspot to be used before terminating the line of service. Service 
providers are also required to provide schools and libraries with data 
usage reports as described, and schools and libraries should regularly 
review these reports to identify hotspots with periods of non-usage to 
determine if there is an issue

[[Page 67313]]

with the device or to seek the return of a Wi-Fi hotspot after some 
period of non-use so the device can be loaned out again.
    Warehousing. In the ECF program, the Commission prohibited schools 
and libraries from requesting E-Rate support for the purchase of 
additional Wi-Fi hotspots beyond the per-user limitation to ``maximize 
the use of limited funds'' and only provided support for devices and 
services currently needed, thus avoiding unnecessary warehousing. 
Several commenters, including the EveryLibrary Institute, flagged ``the 
possibility of applicants overstocking equipment to prepare for 
breakage or loss'' and that the E-Rate program should not pay for such 
equipment and services. The Commission agrees and adopt the same per-
user limitation and prohibition against warehousing. Considering the 
limited funding available, the Commission finds that permitting 
applicants to purchase hotspots in anticipation of future use, loss, or 
breakage would be wasteful, and it concludes that limiting support in 
this way is reasonable. Applicants must certify to their compliance 
with this limitation on the FCC Form 471 application. Wi-Fi hotspots 
that have not been made available for distribution per the requirements 
specified will be considered to have been warehoused, a violation of 
the Commission's rules, and subject to a financial recovery.
    Limited periods of non-use. As well-documented in the record, there 
may be legitimate reasons for limited periods of non-use by students, 
school staff, and library patrons that are outside of the control of 
schools, libraries, and service providers. Even in the context of the 
ECF program, the Commission has recognized that there may be 
circumstances where non-usage occurs but services would still be 
eligible for support, such as during a school's summer break. At the 
same time, the Commission is mindful of the need to balance the 
legitimate reasons for limited periods of non-use with its need to 
protect program integrity, and as such have adopted the approach 
described, with a notice opportunity before services will be 
terminated.
    Commenters expressed concern with requirements that would leave 
schools and libraries responsible for paying the full amount of service 
charges when there is limited usage and indicated that such an approach 
would discourage participation in the program. However, service 
providers have also asserted that they have no control over the 
hotspots provided by a school or library to students, staff members, or 
library patrons. In response to the approaches proposed in the NPRM, 
commenters explained that assessing usage against numerical criteria 
would be challenging because usage below a pre-determined weekly, 
monthly, or quarterly threshold does not necessarily indicate that the 
hotspot devices are being warehoused and should be prohibited from 
reimbursement. Commenters also described the importance of student 
access to hotspots in the summer months to complete summer reading 
projects and other educational activities, and that the year-round 
access provided by libraries is essential. The Commission agrees with 
commenters that overly complex usage requirements would likely deter 
schools and libraries from seeking support for Wi-Fi hotspots and 
services, and find that such an outcome would negate its efforts to 
ensure schools and libraries can operate lending programs to connect 
students, school staff, and library patrons for off-premises use. 
Similarly, given the vital importance of internet connectivity, the 
Commission finds that limiting E-Rate support to nine months would 
contravene the purpose of this funding and ``would further exacerbate 
the `summer slump'--the decrease in learning between school years--and 
inhibit remote learning during summer school.''
    However, to reduce the risk of waste and inefficiencies in 
supporting Wi-Fi hotspots and services in the E-Rate program, the 
Commission finds that imposing a reasonable non-usage threshold 
requirement is both appropriate and necessary to ensure that E-Rate 
support is going to services that are actually being used. The 
Commission therefore adopt a rule to prohibit E-Rate support for lines 
of service that have not been used for a period of three consecutive 
months and have gone through the required notice process. Pursuant to 
this new rule, at least once every 31 days, service providers are 
directed to identify lines of service that have gone unused for no less 
than 60 days and provide the school or library with 30 days' notice 
that failure for the hotspot service to be used within the 30-day 
notice period will result in service termination for that particular 
line. The Commission concludes that this approach appropriately 
accounts for limited legitimate instances of non-usage, such as a 
school's summer break, while also providing sufficient time to allow 
schools and libraries to work with their service provider, as well as 
their student, school staff, and library patron users to cure the non-
usage without being unnecessarily penalized. Upon receipt of a non-
usage notification from a service provider, applicants should take 
steps to determine whether the device and services are being used, 
should be redistributed, or should be discontinued. Applicants may work 
with their service provider to restart services that have been 
terminated (e.g., where a hotspot is redistributed) one time per 
funding year, but the Commission caution applicants that such action to 
restart service after termination will be subject to program integrity 
reviews and therefore, applicants should take steps to ensure that they 
have the associated need prior to restarting services terminated for 
non-usage again.
    The Commission is also sympathetic to the concerns expressed in the 
comments regarding a rule that would leave schools and libraries 
responsible for paying the full amount of service charges for limited 
usage or in this case, a terminated line of service. In the event of a 
terminated line of service resulting from this non-usage requirement, 
service providers are prohibited from billing the applicant for the 
balance that was not paid for by the E-Rate program. Service providers 
will be required to certify on their FCC Form 473 (Service Provider 
Annual Certification (SPAC) Form) that they will comply with this non-
usage notice and termination requirement and will not charge applicants 
the balance for the terminated services.
    Finally, while the Commission understands service providers' 
concerns regarding their lack of a direct customer relationship with a 
student, school staff, and library patron user, it finds that imposing 
this usage requirement will appropriately incentivize service providers 
to avoid requesting reimbursement for ongoing lines of services that 
are not being used. This requirement follows a similar principle to the 
non-usage rules adopted in other programs, like ACP and Lifeline, and 
therefore the Commission expects that many mobile wireless service 
providers are familiar with monitoring usage and have even adapted 
their systems to track and provide notice accordingly. The Commission 
concludes that this rule strikes a reasonable and appropriate balance 
between ensuring that E-Rate support for Wi-Fi hotspots is being used 
responsibly, while not implementing overly complex rules that would be 
unadministrable for schools and libraries or deter participation.
    Some commenters alternatively suggest that the Commission provides 
program participants with an opportunity to explain the reason for the 
non-usage before denying funding and

[[Page 67314]]

argue that this approach is preferable. The Commission declines to take 
this approach because it finds that such a process would be overly 
resource intensive and fail to efficiently achieve the program's goals. 
In particular, the Commission finds that tracking down students, school 
staff members, and library patrons to ascertain the reason for non-
usage while disbursements are on hold could take time and significantly 
delay the review and disbursement process. In addition, such an 
approach would require the Commission to prescribe a comprehensive list 
of the permissible reasons for which Wi-Fi hotspots and services may 
not be used after they have been distributed, which it would then need 
to be able to verify for purposes of ensuring program compliance. 
Considering the record, the Commission is reluctant to create and 
implement such a list because that approach would only delay 
reimbursements, frustrate program participants, and cause uncertainty 
about the availability of funding. Comparatively, the Commission finds 
the non-usage notice and termination rule detailed will better allow 
schools and libraries to work with their students, school staff, and 
library patrons, as well as their service providers to ensure the 
hotspots and services are being used without impacting or delaying the 
review and disbursement processes.
    Moreover, in the context of the new program safeguards that the 
Commission adopts in the Order, the additional usage requirements the 
Commission establishes protects public funds and maximize the use of 
supported Wi-Fi hotspots and services. In particular, the Commission 
believes the funding cap for monthly service described will aid in 
controlling costs and the requirement of paying the non-discount share 
of costs will incentivize schools and libraries to avoid subscribing to 
unused services, enabling us to provide support for Wi-Fi connectivity 
necessary to engage in remote learning for students, school staff, and 
library patrons. However, in light of the challenges identified with 
the solutions proposed in the NPRM and lack of information in the 
record to address these issues, the Commission remains cognizant of the 
risk of non-usage of E-Rate-funded hotspots and want to ensure 
applicants are encouraging use among their students, school staff, and 
library patrons. The Commission therefore finds it necessary to explore 
further ways to monitor and address non-usage in the companion FNPRM. 
Additionally, the Commission delegates authority to the Bureau to 
resolve any procedural or administrative issues that arise with the 
usage requirements adopted herein.
    Usage reports. To enable schools and libraries to monitor usage and 
make adjustments to the structure of their lending programs in a way 
that maximizes the use of Wi-Fi hotspots and services, the Commission 
requires service providers to provide reports regarding data usage to 
applicants at least once per billing period. Such reports must be 
provided in machine-readable digital format, so that the information 
lines can be read and sorted, clearly identifying the lines that are 
not being used across billing periods or that will be or have been 
terminated as a result of the non-usage rules adopted herein. Because 
service providers regularly make such reports available to applicants 
and the Commission provides flexibility in how reports are provided, 
the Commission finds that imposing such a requirement would not be 
overly burdensome. Further, no commenter opposes this idea. Schools and 
libraries are also required to make these reports available to the 
Commission and/or USAC upon request, including to support program 
integrity reviews. The Commission expects applicants to review the data 
usage reports and to take actions to address non-usage included in the 
reports, including requesting the return of the Wi-Fi hotspot or 
requesting the service to be turned off to prompt the return of the 
unused hotspot device, consistent with the requirements described 
herein.
    Program integrity reviews. In addition to the existing standard 
post-commitment reviews and audits to ensure compliance with E-Rate 
program rules more broadly, the Commission directs USAC to regularly 
conduct program integrity reviews to monitor school, library, and 
service provider compliance with the requirements defined, including 
checking for warehousing and discontinued lines of services for non-
usage. The Commission further directs USAC, subject to approval by the 
Bureau, to develop risk-based procedures for these reviews. Schools and 
libraries subject to these program integrity reviews must provide usage 
reports and other documentation as requested, consistent with E-Rate 
program rules.
    The Commission modifies Sec.  54.516 of its rules to require E-Rate 
participants who receive support for the off-premises use of Wi-Fi 
hotspots and services to maintain detailed asset and service 
inventories of each hotspot and wireless service provided for use off-
premises. In the NPRM, the Commission sought comment on whether to 
adopt the ECF program's requirement to keep detailed asset and service 
inventories for each hotspot device and service provided to a student, 
school staff member, or library patron. In response, commenters raised 
concerns about the burdens associated with maintaining such 
inventories. The Commission's experience with the ECF program, however, 
demonstrated the inventory requirements served a critical purpose in 
ensuring that schools and libraries receiving support know where the 
equipment and services are located and that they comply with the 
program requirements. In particular, the inventories were helpful in 
detecting, for example, warehousing of devices by identifying which 
devices had not been distributed. As such, the Commission concludes 
that the benefit to the program of adopting more detailed inventory 
requirements will outweigh the burden of requiring increased 
recordkeeping. The Commission is further convinced that this is a 
reasonable requirement by the fact that the E-Rate program is not an 
emergency program like the ECF program. The Commission therefore 
concludes that there is time for schools and libraries to make a 
reasonable assessment of their needs and ability to comply with these 
recordkeeping requirements, and urge applicants to do so prior to 
requesting support. Relatedly, the Commission reminds participants that 
they may be asked to provide this information upon request to the 
Commission or USAC, and that failure to comply with program rules, 
including the requirement to maintain asset and service inventories, 
may result in a denial of funding or a financial recovery.
    In adopting the more detailed inventory requirements, the 
Commission is sympathetic to the concerns expressed by library 
commenters, who claim that the level of detail required by the ECF 
program's inventory requirements served as a barrier to participation 
in the program because of conflicts with many States' library patron 
privacy laws and existing library circulation systems and practices. In 
particular, commenters explain that the majority of States have laws in 
place that protect the confidentiality of library records and prohibit 
disclosure of patrons' personally identifiable information (e.g., 
individual names) without first seeking a waiver from each individual 
or, in some cases, needing a court order. Circulation and tracking 
systems are set up to be compliant with these State

[[Page 67315]]

laws, meaning that libraries did not already track and retain records 
with sufficient detail to meet the ECF program's requirements, 
resulting in the need for manual tracking of this information, and to 
do so potentially in conflict with applicable State laws. While the 
Commission recognizes that schools also have their own privacy laws to 
which they adhere, the limitations are not so strict as to create 
comparable burdens for recordkeeping. The Commission therefore agrees 
with commenters who advocate for adopting library-specific rules to 
recognize the realities of libraries' abilities to maintain such 
records and to ensure that libraries can take part in this important 
funding source to continue their successful hotspot lending programs.
    The Commission also agrees with commenters who urges it to be clear 
up front about what is expected of the recordkeeping requirements. The 
Commission finds that modifying Sec.  54.516 of its rules to adopt the 
specific information required for an asset and service inventory of Wi-
Fi hotspots and services purchased with E-Rate support is the best 
approach to ensure parties understand exactly what is expected. The 
Commission also reminds applicants that the obligation of schools and 
libraries to keep track of and document the devices that they 
distribute includes documenting information about missing, lost, or 
damaged equipment.
    For school participants receiving support for Wi-Fi hotspots and 
services, the asset and service inventory must identify: (1) the 
equipment make/model; (2) the equipment serial number; (3) the full 
name of the person to whom the equipment was provided; (4) the dates 
the equipment was loaned out and returned, or the date the school was 
notified that the equipment was missing, lost, or damaged; and (5) 
service detail. By ``service detail,'' the Commission means the line 
number or other unique identifier that associates a device to that 
particular line of service. For library participants receiving support 
for Wi-Fi hotspots and services, the asset and service inventory must 
identify: (1) the equipment make/model; (2) the equipment serial 
number; (3) the dates the equipment was loaned out and returned, or the 
date the library was notified that the equipment was missing, lost, or 
damaged; and (4) service detail.
    Consistent with the E-Rate program's current recordkeeping rule, 
program participants are required to retain documentation related to 
their participation in the E-Rate program, including the asset and 
service inventories, acceptable use policies, evidence of publicizing 
Wi-Fi hotspot availability, and other required documentation for at 
least 10 years after the latter of the last day of the applicable 
funding year or the service delivery deadline for the funding request. 
Separately, the Commission amends the language of Sec.  54.516 of its 
rules to include E-Rate-funded equipment and services provided on 
school buses.
    As was the case for the ECF program, the Commission is mindful of 
privacy concerns regarding the collection of personally identifiable 
information about the individual (e.g., student, school staff member, 
or library patron) that makes use of E-Rate-supported equipment and 
services. The Commission, USAC, and any contractors or vendors will 
abide by all applicable Federal and State privacy laws. The Commission 
also directs Commission, USAC, and contractor/vendor staff to take into 
account the importance of protecting the privacy of students, school 
staff and library patrons; to design requests for information, 
including those related to the data usage reports and asset and service 
inventories, from schools and libraries in a way that minimizes the 
need to produce information that might reveal personally identifiable 
information; and to work with auditors to accept anonymized or 
deidentified information in response to requests for information 
wherever possible. In addition to the existing standard post-commitment 
reviews and audits to ensure compliance with E-Rate program rules more 
broadly, the Commission directs USAC to regularly conduct program 
integrity reviews to monitor school, library, and service provider 
compliance with the asset and service inventory rules.
    In the NPRM, the Commission sought comment on safeguards to prevent 
duplicative funding for off-premises use of Wi-Fi hotspots and services 
across the Federal universal service programs and other funding 
programs, including Federal, State, Tribal, or local programs. The 
Commission also requested comment on whether ``a certification by the 
school or library [would] be sufficient to indicate that E-Rate support 
is only being sought for eligible students, school staff, or library 
patrons and the school or library does not already have access to Wi-Fi 
hotspots purchased with ECF support or other sources of funding.'' 
Generally, commenters agree that the Commission should not duplicate 
funding for Wi-Fi hotspots and services that are funded through other 
sources or programs. The Commission concludes that it is appropriate to 
prohibit duplicative funding for off-premises Wi-Fi hotspots and 
services funded with E-Rate support and further find that protections 
against duplicate funding adopted herein should apply to all E-Rate-
funded equipment and services.
    For example, NTCA argues that Wi-Fi hotspots and services should be 
limited to locations where High-Cost USF support is not distributed and 
where the Commission's own broadband availability data indicate service 
is not already available. In contrast, other commenters contend that 
``the Commission should not impose unnecessary restrictions on 
households' receipt of funding from multiple Federal universal service 
programs . . . households are entitled to apply under different USF 
programs for different eligible needs.'' The Commission agrees that it 
should not duplicate funding for Wi-Fi hotspots and services that are 
already funded. However, the Commission disagrees that the availability 
of High-Cost support or the availability of service as indicated in its 
broadband data should preclude funding for an E-Rate-supported Wi-Fi 
hotspot because this does not guarantee that a student or library 
patron has the off-premises broadband access needed to complete their 
educational activities.
    As noted in the NPRM, households may justifiably receive support 
from multiple universal service programs at the same time; however, to 
make the most of the support available through the E-Rate program, and 
to protect against waste, fraud, and abuse, the Commission finds it 
necessary to not extend E-Rate support to Wi-Fi hotspots and services 
that have already been funded though other sources or programs. 
Therefore, the Commission will not provide E-Rate support for eligible 
Wi-Fi hotspots and services, or the portion of eligible Wi-Fi hotspots 
and services that have already been reimbursed with other Federal, 
State, Tribal, or local funding, or other external sources of funding. 
Additionally, while commenters suggested that the Commission should not 
provide funding to households that receive ACP benefits, the Commission 
note that the ACP officially ended on June 1, 2024. As such, the 
Commission finds that not only does this eliminate the concern of 
duplicative funding between ACP and the Wi-Fi hotspots and services 
funded through the E-Rate program, but it also reinforces the need for 
E-Rate support to connect students, school staff, and library patrons 
who may now lack access as a result of losing the ACP benefit.

[[Page 67316]]

    To prevent duplicative funding, the Commission takes a similar 
approach to the approach the Commission took in the ECF program and 
adopt a rule prohibiting E-Rate participants from seeking support or 
reimbursement for eligible equipment and services that have been funded 
by other programs, including Federal (e.g. other universal service 
programs, ECF, etc.), State, Tribal, or local programs. Recognizing 
that the need to protect against duplicative funding is not limited to 
E-Rate-funded Wi-Fi hotspots and services used off-premises, the 
Commission adopts rules to prohibit duplicative funding for all E-Rate-
funded equipment and services. The Commission also finds this to be 
consistent with the Commission's past actions to prevent duplicate 
funding in other universal service support mechanisms. Additionally, 
consistent with record support for requiring applicants to certify that 
there is no duplicative funding for their requests, the Commission 
requires applicants to certify on the application for funding and on 
the request for reimbursement forms (i.e., the FCC Forms 472/474) that 
they are not seeking support for eligible equipment and services that 
have been funded by other sources. This measure balances the interest 
of applicants by allowing them to continue participating and receiving 
funding from other programs, for which they are eligible, while 
simultaneously preventing waste of limited E-Rate funds by not funding 
equipment and services that have already been funded by other programs. 
These rules will help ensure that applicants are aware of the 
prohibition on duplicative funding for equipment and services, and are 
only requesting funding that they do not otherwise have available.
    Section 254(h)(3) of the Communications Act, which applies to the 
E-Rate program, and the existing E-Rate rules prohibit sale, resale, or 
transfer of E-Rate-supported equipment for five years. In the ECF 
Order, the Commission adopted a three-year wait time to dispose, sell, 
trade, or donate equipment purchased with ECF funds, including Wi-Fi 
hotspots, explaining that ``devices and other equipment loaned to 
students, school staff, and library patrons and installed off-campus 
will likely have a shorter average life cycle than equipment installed 
and maintained on school or library premises.'' Consistent with its 
approach in the ECF program, the Commission finds that Wi-Fi hotspot 
devices intended for off-premises use by students, school staff, and 
library patrons are likely to have a shorter lifecycle and therefore, 
the Commission adopts a rule that Wi-Fi hotspot devices for off-
premises use and supported with E-Rate funds can be disposed of after 
three years.
    Schools and libraries requesting E-Rate support for Wi-Fi hotspots 
are prohibited from selling, reselling, or transferring equipment in 
consideration of money or any other thing of value for three years 
after its purchase. Wi-Fi hotspots purchased with E-Rate funds and used 
off-premises will be considered obsolete at the end of the three year 
period. Obsolete equipment may be resold or transferred in 
consideration of money or any other thing of value, disposed of, 
donated, or traded. This approach takes into consideration the limited 
lifespan of Wi-Fi hotspots, while also helping prevent potential waste, 
fraud, and abuse by ensuring that the hotspot devices are used for a 
minimum of three years.
    Head Start, Pre-Kindergarten, and Kindergarten. In the NPRM, the 
Commission proposed to limit the student population eligible for E-Rate 
support for the off-premises use of Wi-Fi hotspots and service. 
Specifically, the Commission proposed to exclude Head Start programs, 
providing early learning and development for pre-school children from 
the ages of 3 to 5, and pre-kindergarten students from receiving E-Rate 
support for off-premises use of Wi-Fi hotspots and services. Commenters 
agree with excluding the eligibility of Head Start and pre-kindergarten 
populations for a Wi-Fi hotspot to be used off-premises, but also urged 
that kindergarten populations should be excluded as well. SECA supports 
making young learners, pre-kindergarten, and kindergarten ineligible 
for Wi-Fi hotspots when they are off-campus stating that not giving 
them this device can ``help curb lost and damaged devices'' and further 
stating that ``hotspots generally should be made available only for 
students in grades where they are required to access the internet off-
campus for their homework and for other educational purposes.'' WISPA 
also agrees that funding for Wi-Fi hotspots should be limited to post-
kindergarten students who are more likely to need internet access for 
educational purposes.
    The Commission agrees and make Head Start, pre-kindergarten, and 
kindergarten populations ineligible for E-Rate-supported Wi-Fi hotspots 
for off-premises use, consistent with the support of commenters. As 
noted in the NPRM, studies recommend an hour or less of internet 
exposure for children under the age of five. Therefore, for these 
populations the risks may outweigh the benefits of receiving an E-Rate-
supported Wi-Fi hotspot for off-premises use, and as a result, these 
populations are less likely to need the internet for educational 
purposes. As mentioned in the NPRM, Head Start and/or pre-kindergarten 
education facilities serving this particular age group may be eligible 
for E-Rate funding for broadband connectivity to and within their 
facilities, if determined to be elementary schools under their 
applicable State laws. Commenters also note that kindergarteners are 
unlikely to need internet access for off-campus educational uses. The 
Commission thus limits eligibility for Wi-Fi hotspots and internet 
services to post-kindergarten students and school staff. The Commission 
notes, however, that for the purposes of calculating the hotspot 
budgets, it seeks to streamline the information collections and will 
use the full-time student enrollments that are used for category two 
budgets, which includes kindergarten students and may also include pre-
kindergarten students in certain States.
    In providing support for the off-premises use of Wi-Fi hotspots and 
services, the Commission is also mindful of the longstanding goal of 
fair and open competitive bidding for such equipment and services. The 
Commission recognizes that many schools and libraries may have taken 
advantage in recent years of discounted Wi-Fi hotspots and/or recurring 
services offered during the pandemic to enable their students, school 
staff, and library patrons to engage in remote learning. The Commission 
recognizes that applicants may have done this while it temporarily 
waived the gift rules for the ECF and E-Rate programs. The Commission 
reminds all E-Rate program participants seeking reimbursement for Wi-Fi 
hotspots and services of its gift rules, which prohibit applicants from 
soliciting or accepting any gift or other thing of value from a service 
provider participating in or seeking to participate in the E-Rate 
program. Similarly, service providers are prohibited from offering or 
providing any gift or other thing of value to those personnel of 
eligible entities involved in either program. The Commission's gift 
rule is always applicable to E-Rate program participants and is not in 
effect or triggered only during the time period when competitive 
bidding is taking place. Additionally, applicants are not permitted to 
solicit or accept a gift or thing of value over $20 from a service 
provider, and service providers are not

[[Page 67317]]

permitted to offer or provide applicants a gift or thing of value over 
$20.
    The Commission has previously explained that the gift rule is not 
intended to discourage charitable donations to E-Rate eligible entities 
as long as those donations are not directly or indirectly related to E-
Rate procurement activities or decisions and provided the donation is 
not given with the intention of circumventing the competitive bidding 
or other E-Rate program rules. For example, the Commission understands 
that some service providers offer free or discounted Wi-Fi hotspots 
with a service plan. The gift rule prohibits service providers from 
offering these kinds of special equipment discounts or equipment with 
service arrangements to E-Rate recipients only if such offerings are 
not currently available to some other class of subscribers or segment 
of the public.
    Moreover, the record and its experiences in the ECF program have 
shown that service providers sometimes bundle Wi-Fi hotspots and 
ineligible components into the costs of services. Entities seeking E-
Rate support for Wi-Fi hotspots and services for off-premises use are 
reminded that E-Rate recipients are required to cost-allocate 
ineligible components that are bundled with eligible equipment or 
services. With respect to offerings that bundle the costs of the 
eligible Wi-Fi hotspots and services together, applicants may continue 
to seek E-Rate funding for eligible components of bundled services. 
However, for the ease of administration and to streamline review of 
funding requests, applicants and service providers should itemize these 
eligible components when invoicing, and Wi-Fi hotspots, services, as 
well as any eligible components or fees should be requested on separate 
funding lines when seeking support for these equipment and services.
    The Commission considers audits and other review mechanisms in the 
E-Rate program to be important tools in ensuring compliance with its 
rules and identifying instances of waste, fraud, and abuse. Considering 
the action the Commission takes to extend the off-premises uses 
eligible for E-Rate funding, the Commission expects that these tools 
will continue to be paramount to its ability to ensure that these 
finite funds are used appropriately and consistent with its rules. The 
Commission makes clear, therefore, that any support provided for the 
off-campus use of Wi-Fi hotspots and services under the program will be 
subject to all audits and reviews currently used by the program (e.g., 
Beneficiary and Contributor Audit Program (BCAP) audits, Payment 
Quality Assurance (PQA) assessments, and Program Integrity Assurance 
(PIA) reviews and Selective Reviews (SR) reviews) and could be subject 
to recovery should the Commission and/or USAC find a violation of its 
rules and deem it appropriate. Specifically, consistent with existing 
E-Rate audits and reviews, applicants and service providers may be 
subject to audits and other investigations to evaluate compliance with 
the rules the Commission adopt, including, for example, what equipment 
and services are eligible and how the equipment and services may be 
used.
    The Commission, USAC, and contractor/vendor staff are directed to 
work with auditors to accept anonymized or deidentified information in 
response to requests for information wherever possible. If anonymized 
or deidentified information regarding the students, school staff, and 
library patrons is not sufficient for auditors' or investigative 
purposes, the auditors or investigators may request that the school or 
library obtain consent of the parents or guardians, for students, and 
the consent of the school staff member or library patron to have access 
to this personally identifiable information or explore other legal 
options for obtaining personally identifiable information. In the event 
consent is not available, the Commission recognizes that the auditors 
may need to use other procedures or take different actions to determine 
if there is any evidence of waste, fraud, or abuse from the use of E-
Rate funding for off-premises Wi-Fi hotspots. The Commission 
additionally delegates to the Bureau and Office of the Managing 
Director, in consultation with the Office of General Counsel (and 
specifically the Senior Agency Official for Privacy) the authority to 
establish requirements for the Bureau's, USAC's, or any contractor's/
vendor's collection, use, processing, maintenance, storage, protection, 
disclosure, and disposal of personally identifiable information in 
connection with any audit or other compliance tool.
    The Commission also reminds program participants of their 
obligation to maintain documentation sufficient to demonstrate their 
compliance with program rules for ten years after the latter of the 
last day of the applicable funding year or the service delivery 
deadline for the funding request. And, upon request, they must submit 
documents sufficient to demonstrate compliance with program rules, 
including the Wi-Fi hotspot-specific documentation requirements the 
Commission adopted, such as maintaining asset and service inventories 
and acceptable use policies. Additionally, schools, libraries, and 
service providers participating in the E-Rate program may be subject to 
other audit processes, including audits and inspections by the Office 
of Inspector General and other entities with authority over the entity.
    Sections 254(c)(1), (c)(3), (h)(1)(B), and (h)(2) of the 
Communications Act collectively grant the Commission broad and flexible 
authority to establish rules governing the equipment and services that 
will be supported for eligible schools and libraries, as well as to 
design the specific mechanisms of support. This authority reflects 
recognition by Congress that in order to advance its universal service 
objective, the types of services supported by the various support 
mechanisms are constantly evolving in light of ``advances in 
telecommunications and information technologies and services.'' In the 
NPRM, the Commission sought comment on whether these provisions 
authorize it to provide E-Rate support for schools or libraries to 
purchase Wi-Fi hotspots and wireless internet services for off-premises 
use, recognizing how today's technology-based educational environment 
has significantly evolved beyond the physical boundaries of a school or 
library campus. Specifically, the Commission proposed to find that 
school or library purchases of Wi-Fi hotspots and internet services for 
off-premises use by students, school staff, and library patrons for 
remote learning and the provision of virtual library services 
constitutes an educational purpose and enhances access to advanced 
telecommunications and information services pursuant to section 254 of 
the Communications Act. As explained further in this proceeding, the 
Commission concludes that it has authority under section 254 of the 
Communications Act to permit eligible schools and libraries to receive 
E-Rate support for the off-premises use of Wi-Fi hotspots and wireless 
internet services.
    First, the Commission considers its proposed finding that the off-
premises use of school- or library-purchased wireless internet services 
and the Wi-Fi hotspots needed to deliver such connectivity constitutes 
services that are ``provide[d] . . . to elementary schools, secondary 
schools, and libraries,'' and thus, may be supported pursuant to 
section 254(h)(1)(B) of the Communications Act when used ``for 
educational purposes.'' In response, many commenters agree that section 
254(h)(1)(B) of the Communications Act

[[Page 67318]]

does not prohibit the Commission from allowing E-Rate funds to be used 
by schools or libraries to support remote learning for students and 
school staff, and access to library services for library patrons so 
long as it first finds that the equipment and services that schools or 
libraries purchase for off-premises use will serve an educational 
purpose. The Commission finds this view to be consistent with its 
determination in the School Bus Wi-Fi Declaratory Ruling that any 
future decision to support school or library purchases of E-Rate-
supported services requires the Commission to first find that the off-
premises use of such service is ``integral, immediate, and proximate to 
the education of students or the provision of library services to 
library patrons'' and, therefore, serves an educational purpose.
    Turning next to the question of whether the off-premises use at 
issue herein serves an educational purpose, many commenters urge the 
Commission to find that the off-premises use of such wireless internet 
services and the Wi-Fi hotspots needed to deliver such connectivity to 
be integral, immediate, and proximate to the education of students or 
the provision of library services to library patrons. For example, the 
North American Catholic Educational Programming Foundation (NACEPF) and 
Mobile Beacon argue that ``[e]nabling students to participate in hybrid 
learning, complete their homework, or participate in other educational 
opportunities clearly qualifies as an `educational purpose.' '' 
Likewise, commenters assert that Wi-Fi hotspots are needed to ensure 
library patrons can access library services. The Commission agrees with 
these commenters. Given the lack of a reliable broadband connection at 
some students', school staff members', and library patrons' homes, the 
struggle for many households to afford high-speed broadband 
(particularly in light of the end of the ACP), and the increasing need 
for connectivity in today's technology-based educational environment 
that extends learning beyond a school or library building (e.g., for 
virtual classes, electronic research projects, homework assignments, 
virtual library resources, research, etc.), the Commission finds that 
the off-premises use of such wireless internet services and the Wi-Fi 
hotspots needed to deliver such connectivity to students, school staff, 
or library patrons is ``integral, immediate, and proximate to the 
education of students or the provision of library services to library 
patrons'' and, therefore, serves an educational purpose. For example, 
if a student is unable to complete their homework or participate in a 
virtual class or research project due to lack of internet access while 
off-premises, that lack of access is likely to have an immediate, 
negative impact on that student's academic performance, which is 
integral to their education. Similarly, if a library patron is unable 
to access work-related research for school or career advancement, that 
lack of access is likely to have an immediate, negative impact on that 
patron's career. As such, the Commission finds that the connectivity 
provided through the off-premises use of Wi-Fi hotspots can make a 
difference in a student's, school staff member's, or library patron's 
ability to meaningfully engage in learning and fully access library 
services; the provision of such services thus serves an educational 
purpose.
    The Commission disagrees with the commenters who assert that 
``educational purpose'' is defined to require a physical link to a 
school or library campus. Although activities that occur on-campus are 
presumed to serve an educational purpose, the Commission has never 
stated that the inverse would be true (i.e., that all off-premises uses 
are presumed not to be for an educational purpose). To the contrary, 
the Commission has already recognized that in certain instances, the 
off-premises use of E-Rate-funded telecommunications services and 
information services are found to serve an educational purpose, such as 
when a school bus driver uses wireless telecommunications services 
while delivering children to and from school, or when students use Wi-
Fi or similar access point technologies on school buses to complete 
homework. A number of commenters agree that it is consistent with this 
precedent to find that the off-premises use of wireless internet 
services and the Wi-Fi hotspots needed to deliver such connectivity 
similarly serves an educational purpose. The Commission further 
disagree with NTCA's claim that its prior orders have required that 
services be physically ``tied to a place of instruction.'' Although the 
Commission has previously stated that ``the purpose for which support 
is provided'' must ``be for educational purposes in a place of 
instruction,'' neither the Commission nor the statute has defined the 
physical confines of where instruction can take place, and the Schools 
and Libraries Second Report and Order, 68 FR 36931, June 20, 2003, that 
NTCA quotes did allow funding for certain off-premises services, 
demonstrating the Commission's longstanding understanding that 
``educational purposes in a place of instruction'' can include off-
premises uses. Therefore, based on the record and consistent with 
Commission precedent, the Commission concludes that section 
254(h)(1)(B) of the Communications Act allows E-Rate support for 
services purchased by ``elementary schools, secondary schools, and 
libraries'' for the purpose of allowing students, school staff, and 
library patrons to use those services off-premises for educational 
purposes. Finally, contrary to NTCA's assertion, the Commission also 
finds this conclusion is consistent with the statutory language 
requiring that services be provided ``to'' schools and libraries 
because schools or libraries are the customers and recipients of the 
services they purchase, and the services are therefore provided to them 
within the meaning of section 254(h)(1)(B), even if used elsewhere.
    The provision of support to schools and libraries to purchase 
wireless internet services for off-premises use for educational 
purposes fits squarely within the Commission's long-established 
authority and direction under section 254(h)(1)(B) of the 
Communications Act to designate `` `services that are within the 
definition of universal service under subsection (c)(3),' which itself 
authorizes the Commission to designate non-telecommunications services 
for support under E-Rate.'' As explained in the NPRM, the Commission 
expressly rejected the assertion that the support provided under 
section 254(h) of the Communications Act is limited to 
telecommunications services when it concluded in the First Universal 
Service Order, 62 FR 32862, June 17, 1997, that section 254(h)(1)(B) 
through section 254(c)(3) of the Communications Act authorizes 
universal service support for telecommunications services and 
additional services such as information services. Pursuant to this 
longstanding precedent, authority provided by section 254(h)(1)(B) and 
section 254(c)(3) is not limited to telecommunications services but 
also authorizes support for the off-premises use of wireless internet 
services. Further, the Commission finds that section 254(h)(1)(B) 
through section 254(c)(3) of the Communications Act provides authority 
to support the Wi-Fi hotspot devices that are necessary to provide the 
wireless internet services. In the First Universal Service Order, the 
Commission concluded that ``it can include `the information services' 
e.g., protocol conversion and information

[[Page 67319]]

storage, that are needed to access the internet, as well as internal 
connections, as `additional services' that section 254(h)(1)(B), 
through section 254(c)(3), authorizes us to support.'' The Commission 
further distinguished between ineligible types of peripheral equipment 
(e.g., laptops) and eligible equipment that is necessary to make the 
services functional. The Commission find that because Wi-Fi hotspots 
can provide a critical connection for delivery of internet service, 
they fall into the latter category, and the Commission therefore 
concludes that it has authority under section 254(h)(1)(B) through 
section 254(c)(3) of the Communications Act to support the off-premises 
use of Wi-Fi hotspot devices that are needed for the delivery of 
wireless internet services.
    Separately, the Commission finds that section 254(h)(2)(A) of the 
Communications Act authorizes it to permit E-Rate support for the off-
premises use of Wi-Fi hotspots and services because hotspots and 
services that connect students, school staff, and library patrons to 
digital learning will ``enhance, to the extent technically feasible and 
economically reasonable, access to advanced telecommunications and 
information services for all public and nonprofit elementary and 
secondary school classrooms . . . and libraries.'' First, the 
Commission finds that providing support for such equipment and services 
through the E-Rate program will be ``technically feasible and 
economically reasonable.'' This is best demonstrated by the more than 
one million ECF-funded Wi-Fi hotspots and services that were 
distributed to students, school staff, and library patrons who may have 
otherwise lacked access and who were successfully connected to remote 
learning. Based on those experiences in the ECF program, as well as 
demand falling short of the E-Rate program's funding cap for many years 
and the limited lending program budget mechanism adopted herein, the 
Commission believes that the cost of funding the off-premises use of 
Wi-Fi hotspots and services can be accomplished within the E-Rate 
program's existing budget.
    Second, the Commission concludes that funding Wi-Fi hotspots and 
services for off-premises use will help enhance access for school 
classrooms and libraries to the broadband connectivity necessary to 
facilitate digital learning for students and school staff, as well as 
library services for library patrons who lack broadband access when 
they are away from school or library premises. As discussed, the 
internet has become critical for equitable access to education. For 
example, even before the pandemic, a significant number of teachers and 
students around the country reported requiring an internet connection 
to complete homework, and after the pandemic, some schools still retain 
the option to attend classes virtually. Beyond the context of school, 
digital literacy has become increasingly important in the workforce, 
with many applications, interviews, and forms that in an earlier era 
applicants might have used library resources to complete in person are 
now taking place online. Yet, a portion of our population still lacks 
internet access, meaning that they are unable to engage in such regular 
educational tasks like homework, research, developing or updating 
resumes, or applying for jobs. For many of these individuals, the 
internet access provided by their local school or library is their 
primary means of accessing such critical resources. The record is 
filled with examples of how Wi-Fi hotspots and services, in particular, 
have been very effective at closing this Homework Gap and digital 
divide. By providing E-Rate support for Wi-Fi hotspots and wireless 
internet services that can be used off-premises, the Commission can 
help schools and libraries to connect, for example, the student who has 
no way of accessing their homework to prepare for the next day's 
classroom lesson, or the school staff member who is unable to engage in 
parent-teacher meetings or professional trainings that take place after 
the school day ends, or the library patron who needs to attend a 
virtual job interview or perform bona fide research after their 
library's operating hours. Thus, the Commission concludes that by 
permitting support for the purchase of Wi-Fi hotspots and internet 
wireless services that can be used off-premises and by allowing schools 
and libraries to use this technology to connect the individuals with 
the greatest need to the resources required to fully participate in 
classroom assignments and in accessing library services, the Commission 
will thereby extend the digital reach of schools and libraries for 
educational purposes and allow schools, teachers, and libraries to 
adopt and use technology-based tools and supports that require internet 
access at home. For these reasons, the Commission concludes that the 
action adopted is within the scope of its statutory directive under 
section 254(h)(2)(A) of the Communications Act to enhance access to 
advanced telecommunications and information services for school 
classrooms and libraries.
    Furthermore, the Commission agrees with commenters that permitting 
E-Rate support for the off-premises use of Wi-Fi hotspots and services 
is consistent with its exercise of its authority under section 
254(h)(2)(A) of the Communications Act to establish the Connected Care 
Pilot Program and to clarify that the use of Wi-Fi on school buses is 
eligible for E-Rate funding. In establishing the Connected Care Pilot 
Program, the Commission found that providing support for patients' home 
broadband connections expanded health care providers' digital 
footprints for purposes of providing connected care services and 
allowed health care providers and patients to overcome the obstacle of 
cost to adopt beneficial connected care services through the pilot 
program, thus enhancing eligible health care providers' access to 
advanced telecommunications and information services. As NACEPF & 
Mobile Beacon explain in their reply comments, similar reasoning exists 
to support off-premises access for classrooms and libraries: many 
students lack the broadband connectivity required to fully participate 
in their education and to complete their assignments. Providing for the 
off-premises use of Wi-Fi hotspots and services would remove this 
obstacle and therefore, enhance the ability of classrooms and libraries 
to connect with learners and enable them to participate fully in their 
classwork and lessons, and complete their assignments. The Commission 
disagrees with ACA Connects' assertion that the NPRM's proposal differs 
from the permissible actions taken in the School Bus Wi-Fi Declaratory 
Ruling because unlike a school bus, which is a school-controlled 
facility, no nexus exists between the school or library and the off-
premises learning location (e.g., a student's home). The Commission 
does not agree that the school or library needs to be in control of a 
location where the individual learns for there to be a nexus, because 
the Commission finds that this is not in line with the reality of how 
classroom instruction incorporates online resources (e.g., assignments 
that must be completed and submitted online--often by a deadline 
outside of ''school hours'', schoolwork sent home with a student, 
online school days, required use of e-books or online videos) or the 
intent of E-Rate funding. Rather, the Commission finds that students, 
school staff, and library patrons have a direct nexus with their school 
or library through the provision of remote learning and education and 
that this nexus will be further

[[Page 67320]]

strengthened by the safeguards the Commission also imposed.
    Finally, the Commission finds section 254(h)(2)(A)'s reference to 
services for ``classrooms'' includes using E-Rate support to connect 
students, school staff, and library patrons to valuable digital 
educational resources when they are not located on the school or 
library campus. The Commission notes that the statute directs the 
Commission to establish rules to enhance access ``for all public and 
nonprofit elementary and secondary school classrooms . . . and 
libraries.'' Notably, the text does not say to enhance access to 
services ``at'' or ``in'' school classrooms (or libraries), as would 
more naturally indicate a tie to a physical location. Moreover, the 
Commission sought comment in the NPRM on whether the reference in 
section 254(h)(2)(A) of the Communications Act to ``elementary and 
secondary school classrooms . . . and libraries'' includes expanding 
access to supported services that can be used in student, school staff, 
and library patron homes, given that today's educational environment 
often extends outside of the physical school or library building. In 
response, many commenters highlight the proliferation of online 
instruction and remote learning, particularly in the wake of the COVID-
19 pandemic. Specifically, commenters argue that the language of 
section 254(h)(2)(A) of the Communications Act should be interpreted to 
reflect the increasingly hybrid nature of education and enable off-
premises access to important educational resources that support 
learning, such as student access to homework or online classes, or 
educator access to professional learning courses, networks, and 
materials, and library patron access to e-books and virtual programs. 
As exemplified during the COVID-19 pandemic-era campus closures, the 
physical school building is not the only place where a student can be 
in ``class'' and there are myriad reasons why a student, school staff 
member, or library patron may not be able to travel to the physical 
campus but still requires access to their remote learning and other 
educational resources. As such, the Commission concludes that section 
254(h)(2)(A)'s reference to ``classrooms'' is appropriately interpreted 
to extend beyond the brick and mortar school buildings. Although a few 
commenters argue that interpretation is inconsistent with the statute's 
use of the word ``classroom'' because hotspots can be used anywhere, 
the Commission disagrees. As explained, in today's world, effective 
classroom learning often demands access to the internet outside of the 
school or library building, and the Commission therefore continues to 
believe that the best reading of ``for . . . classrooms'' allows 
funding for services that support effective classroom instruction, even 
if such services are used outside of a brick-and-mortar classroom. At 
the same time, to ensure the Commission is making the most-effective 
use of these scarce funds and limiting the off-premises use of Wi-Fi 
hotspots and services to educational purposes, the Commission finds it 
necessary to adopt the specific safeguards discussed.
    The Commission concludes that the obligations of the Children's 
internet Protection Act (CIPA) apply if the school or library receives 
E-Rate (or ECF) support for internet access, internet service, internal 
connections, and/or the related network equipment, including Wi-Fi 
hotspots. Enacted as part of the Consolidated Appropriations Act of 
2001, CIPA prohibits certain schools and libraries from receiving 
funding under section 254(h)(1)(B) of the Communications Act for 
internet access, internet service, or internal connections, unless they 
comply with specific internet safety requirements. Specifically, CIPA 
requires schools and libraries ``having computers with internet 
access'' to certify that they are enforcing a policy of internet safety 
that includes the operation of a technology protection measure (e.g., a 
filter). Congress enacted this law to ensure that children are 
protected from exposure to harmful material while accessing the 
internet provided by a school or library. Schools and libraries are 
therefore required to block or filter visual depictions that are 
obscene, child pornography, or harmful to minors across all sites, 
including social media. CIPA also requires monitoring the online 
activities of minors and providing education about appropriate online 
behavior, including warnings against cyberbullying.
    First and foremost, the Commission remains focused on CIPA's 
intended purpose and expect schools and libraries to take every step 
necessary to ensure internet access funded by the E-Rate program 
remains safe for use by minors. Recognizing that accessing the internet 
carries inherent risk for minors, many schools have already implemented 
measures to restrict students' access to certain websites, including 
social media. For example, one school district in New Mexico relies on 
a filter to only permit student access to selected sites, while also 
blocking access to sites deemed non-educational. The top 20 domains 
where students were denied access by the filter included primarily 
social media sites, with TikTok and Snapchat comprising roughly 40% of 
denied requests. Schools and libraries, in compliance with the 
requirements of CIPA, should continuously evaluate the effectiveness of 
their internet safety policies and technology protection measures 
against the shifting nature of potentially harmful online content and 
the various sites and platforms that make content available to minors. 
Similarly, many service providers offer network-level filtering in 
their service offerings to support schools' and libraries' deployment 
of network-level technology protection measures. The Commission 
recognizes that determinations of what is considered appropriate are 
left to the local communities, and it encourages schools and libraries 
to evaluate the needs of their communities and apply filters as 
appropriate at the network level to ensure E-Rate-funded internet is 
safe for use by minors in line with the intent of the law.
    The NPRM sought comment on the applicability of CIPA when 
connecting E-Rate-funded Wi-Fi hotspots to the internet off-premises, 
and proposed to require that CIPA applies if the school or library 
accepts E-Rate or ECF support for internet access or internet services, 
or E-Rate support for internal connections. The Commission has 
previously clarified that Wi-Fi hotspots qualify as eligible ``Network 
Equipment'' for internet access, internet service, or internal 
connections and would trigger CIPA compliance for the purchasing school 
or library. In response to the NPRM, several commenters express support 
for requiring CIPA compliance. The Commission agrees with these 
commenters and find that the requirements of CIPA apply for off-
premises use if the school or library receives E-Rate-funded internet 
service, internet access, internal connections, or related network 
equipment (including Wi-Fi hotspots).
    The Commission finds the concerns raised about the applicability 
and privacy implications of CIPA when funding the off-premises use of 
Wi-Fi hotspots and services unpersuasive. The Commission is not aware 
of any issues with CIPA compliance arising from the ECF program, in 
which the Commission applied CIPA to off-premises use. Moreover, its 
rules require schools and libraries to certify to CIPA compliance, 
under penalty of reimbursement of funds and enforcement under Federal 
requirements regarding truthful statements. The Commission has

[[Page 67321]]

recognized the ``long history'' supporting this approach to CIPA 
compliance in the E-Rate application process. The Commission's rules 
also provide that the certifying entity may be ``the relevant school, 
school board, local education agency, or other authority with 
responsibility for administration of the school'' or the relevant 
``library, library board, or other authority with responsibility for 
administration of the library.'' The Commission is therefore confident 
that participants in E-Rate are well positioned to understand and 
enforce their CIPA obligations.
    Finally, the Commission denies requests that E-Rate funds be used 
to pay for CIPA implementation costs. The Commission has previously 
determined that E-Rate recipients are statutorily prohibited from 
obtaining discounts under the universal service support mechanism for 
the purchase or acquisition of technology protection measures necessary 
for CIPA compliance.

Severability

    All of the rules that are adopted in the Order are designed to 
further the support provided by the E-Rate program to schools and 
libraries to ensure affordable access to high-speed broadband and to 
protect the integrity of the E-Rate program funding. However, each of 
the separate rules the Commission adopts herein shall be severable. If 
any of the rules are declared invalid or unenforceable for any reason, 
it is the Commission's intent that the remaining rules shall remain in 
full force and effect.

Procedural Matters

    Paperwork Reduction Act. This document contains new information 
collection requirements. The Commission, as part of its continuing 
effort to reduce paperwork burdens, will invite the general public to 
comment on the information collection requirements contained in the 
Order as required by the Paperwork Reduction Act of 1995, Public Law 
104-13. In addition, the Commission notes that pursuant to the Small 
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), the Commission previously sought specific comment on 
how the Commission might further reduce the information collection 
burden for small business concerns with fewer than 25 employees.
    Congressional Review Act. The Commission has determined, and the 
Administrator of the Office of Information and Regulatory Affairs, 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 Order to 
Congress and the Government Accountability Office pursuant to 5 U.S.C. 
801(a)(1)(A).
    Regulatory Flexibility Act. As required by the Regulatory 
Flexibility Act of 1980, as amended (RFA), an Initial Regulatory 
Flexibility Analysis (IRFA) was incorporated in the Addressing the 
Homework Gap through the E-Rate Program Notice of Proposed Rulemaking, 
released in November of 2023. The Federal Communications Commission 
sought written public comment on the proposals in the NPRM, including 
comment on the IRFA. No comments were filed addressing the IRFA. This 
Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
    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. 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. 
The Commission's E-Rate program provides 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. The E-Rate program thus plays an important 
role in closing the digital divide, a top priority for the Commission.
    In the Order, the Commission addresses the remote learning needs of 
today's students, school staff, and library patrons and help close the 
country's digital/educational divide by making the off-premises use of 
Wi-Fi hotspots and services by students, school staff, and library 
patrons eligible for E-Rate support. The ECF program highlighted the 
demand and need for off-premises use of Wi-Fi hotspots and services for 
educational success. As mentioned in the NPRM, ``[b]roadband access is 
proven to improve individuals' educational outcomes, while lack of 
access has been shown to severely hamper educational opportunities.'' 
Allowing E-Rate support for the off-premises use of Wi-Fi hotspots and 
services is an important step to ensure student and library patrons can 
take advantage of all available educational opportunities, and to help 
close the ``homework gap'', especially as the ECF program is winding 
down and support under the ACP ended as of June 1, 2024.
    In the Order, the Commission finds that the off-premises use of Wi-
Fi hotspots and services constitutes an educational purpose and 
enhances access to advanced telecommunications and information services 
for schools and libraries. Applicants will have a calculated budget, 
limiting the amount of E-Rate support available for Wi-Fi hotspots and 
services based on applicant size and E-Rate discount rate. This will 
help schools and libraries create a hotspots lending program, lending 
Wi-Fi hotspots and services to students or patrons who most need remote 
access to meet their educational goals. Further, to balance its goal of 
reducing the digital divide with the responsibility of being a prudent 
steward of the universal service funds, the Commission adopts funding 
caps of $15 month for service and $90 for a Wi-Fi hotspot (for 3 years) 
to keep the costs low, limit the impact on the fund, and to encourage 
support to only those that need the devices and services the most. The 
budget mechanism and funding caps, along with other safeguards (e.g. 
certifications, competitive bidding, prohibition against duplicative 
funding, audits, recordkeeping, usage requirements, etc.) will protect 
program integrity and prevent potential waste, fraud, and abuse. 
Additionally, the Commission will ensure that off-premises funding for 
Wi-Fi on school buses and for Wi-Fi hotspots and wireless internet 
service does not deter on-premises funding by prioritizing on-campus 
funding before these off-premises funding requests. Overall, the 
measures taken in the Order, help ensure that off-premises educational 
opportunities are available to students, school staff, and library 
patrons with the most need, while also protecting E-Rate's critical 
funds.
    There were no comments filed that specifically addressed the 
proposed rules and policies presented in the IRFA.
    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 for Advocacy of the Small Business Administration (SBA), 
and to provide a detailed statement of any change made to the proposed 
rules as a result of those comments. The Chief Counsel did not file any 
comments in response to the proposed rules in this proceeding.
    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 rules,

[[Page 67322]]

adopted herein. 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 which: (1) is independently owned and operated; (2) is 
not dominant in its field of operation; and (3) satisfies any 
additional criteria established by the SBA.
    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's 
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.
    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 2022, there were 
approximately 530,109 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.
    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 2022 Census of Governments indicate there were 
90,837 local governmental jurisdictions consisting of general purpose 
governments and special purpose governments in the United States. Of 
this number, there were 36,845 general purpose governments (county, 
municipal, and town or township) with populations of less than 50,000 
and 11,879 special purpose governments--independent school districts 
with enrollment populations of less than 50,000. Accordingly, based on 
the 2022 U.S. Census of Governments data, the Commission estimates that 
at least 48,724 entities fall into the category of ``small governmental 
jurisdictions.''
    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.
    In the Order, the Commission applies existing or modified E-Rate or 
ECF recordkeeping requirements for the off-premises use of Wi-Fi 
hotspots and services. The Commission limits the use of services to 
those that can be supported by and delivered with Wi-Fi hotspots 
provided to an individual user. Schools and libraries must adopt and 
provide notice of an acceptable use policy highlighting that the goal 
of the hotspot lending program is to provide broadband access to 
students and library patrons who need it and for educational purposes. 
When E-Rate-funded hotspots are used in conjunction with hotspots 
funded via other sources, applicants must document clearly (e.g., 
individual survey results or attestations) that each individual student 
needed a Wi-Fi hotspot, in accordance with the AUPs, and may not rely 
on general or estimated findings about income levels. Applicants will 
have a calculated budget, limiting the amount of E-Rate support 
available for off-premises Wi-Fi hotspots and services based on their 
full-time student count or library square footage, and their category 
one discount rate.
    Additionally, the Commission requires applicants to certify on 
their FCC Form 486 that they have taken reasonable steps to ensure 
proper use, to prevent warehousing, and to manage non-usage of devices. 
This will not be overly burdensome, because applicants already use FCC 
Form 486 to notify USAC that services have started on a particular 
funding request. Considering the limited funding available, applicants 
may not request funding for hotspot devices for future use or to be 
stored in case of an emergency, and the Commission will not allow 
applicants to purchase extra devices to store in case of theft, loss, 
or breakage. The Commission finds that this would be wasteful in this 
first year of expanding the program. Each device must be associated 
with a line of service, and applicants may not request more than 45 
percent of the three-year hotspot budget in a single funding year.
    At least once every 31 days, service providers are required to 
identify lines of hotspot service that have gone unused for 60 
consecutive days and to provide applicants 30 days to use the hotspot 
before the line of service is terminated. Additionally, service 
providers must provide data usage reports to applicants at least once 
per billing period. The reports need to clearly identify the lines that 
are not being used across billing periods or that will be or have been 
terminated as a result of non-usage. The usage reports should not be 
overly burdensome because service providers regularly make such reports 
available to applicants. Applicants are also required to make these 
usage reports available to the Commission and/or USAC upon request, 
including to support program integrity reviews. Service providers are 
required to certify on their FCC Form 473 (Service Provider Annual 
Certification (SPAC) Form) that they will comply with this non-usage 
notice and termination requirement and will not charge the balance for 
terminated services.
    Schools are required to maintain a similar, but modified asset and 
service inventory requirements to the ECF's program's asset and service 
inventory requirements, which details equipment and service inventories 
for each device or service purchased with E-Rate support and provided 
to an individual student or school staff member. The school's asset 
inventory must identify: (1) the equipment make/model; (2) the 
equipment serial number; (3) the full name of the person to whom the 
equipment was provided; (4) the dates the equipment was loaned out and 
returned, or the date the school was notified that the equipment was 
missing, lost, or damaged and (5) service detail. By ``service 
detail,'' the Commission means the line number or other identifier that 
associates a device to that particular line of service.
    Taking into consideration the State's library patron privacy laws 
that some libraries must adhere to and existing library circulation 
systems and practices, the Order, adopts a limited asset and service 
inventory requirement for libraries. The limited asset and service 
inventory provides libraries more flexibility in accounting and 
tracking Wi-Fi hotspots and services funded with E-Rate support. For 
library

[[Page 67323]]

participants receiving support for Wi-Fi hotspots and services, the 
asset and service inventory must identify: (1) the equipment make/
model; (2) the equipment serial number; (3) the dates the equipment was 
loaned out and returned, or the date the library was notified that the 
equipment was missing, lost, or damaged; and (4) service detail. The 
asset inventories of schools and libraries will help us verify that 
there is no warehousing of hotspots, and confirm that hotspots are 
being used as intended.
    Consistent with the E-Rate program's current recordkeeping rule, 
program participants will be required to retain documentation related 
to their participation in the E-Rate program, including the asset and 
service inventories, acceptable use policies, and data usage reports 
for at least ten years after the latter of the last day of the 
applicable funding year or the service delivery deadline for the 
funding request. Commenters are concerned about adopting new 
recordkeeping requirements, but there is support for maintaining the E-
Rate program's existing recordkeeping requirements, due to applicants 
familiarity with the requirements. The recordkeeping adopted in the 
Order, would be similar to what most applicants, including small 
entities, are already familiar with and currently undertake for the E-
Rate and ECF programs. As such, the Commission anticipates that the 
costs for compliance created by the decisions in the Order will be 
minimal. The recordkeeping requirements also help protect E-Rate funds 
from potential waste, fraud and abuse.
    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.''
    In the Order, the Commission minimizes the economic impact on small 
entities by making the off-premises use of Wi-Fi hotspots and services 
eligible for E-Rate funding to support remote learning for students, 
school staff, and library patrons. The availability of E-Rate funding 
for Wi-Fi hotspots and services gives applicants, including small 
entities, the opportunity to administer hotspot lending programs and 
provide students, school staff, and library patrons the off-premise 
broadband connectivity needed for educational success. The steps taken 
in the Order are especially important now that the ECF program is 
winding down and applicants will no longer have ECF funding available 
to meet the remote learning needs of their students, school staff, or 
library patrons and as of June 1, 2024, ACP support is no longer 
available for many households as well.
    The Commission considered the benefits of multi-functional devices, 
including smartphones, tablets, and laptops with built-in wireless 
connections, but decline to include them at this time because it does 
not have sufficient information to justify this use and the Commission 
found them to be more expensive than sole-function Wi-fi hotspots. 
Further, equipment such as laptops and tablets remain ineligible for E-
Rate support. The Commission recognizes that off-premises connectivity 
provided via Wi-Fi hotspots is not a one-size-fits-all solution, 
however the actions in the Order are a step in creating an economically 
reasonable method of meeting its statutory obligations.
    The NPRM asked whether applicants should be required to determine 
and maintain records of students', school staff members', or library 
patrons' unmet need by, for example, conducting surveys. Commenters 
were not in favor of recordkeeping for unmet need. Commenters mentioned 
that schools and libraries are in the best position to know which 
students and patrons need the hotspots and services most, and 
therefore, the Commission should not impose recordkeeping requirements 
for unmet needs, but should allow schools and libraries to determine 
who to lend the devices and services to. In consideration of the 
comments, and finding that a budget mechanism approach for a lending 
program reduces the need to implement any unmet needs requirements, the 
Order does not impose recordkeeping requirements for unmet needs. 
Applicants, including small entities, will be able to determine their 
unmet need and not be burdened by unmet need documentation.
    Further, to minimize significant economic impact on applicants, 
service providers are not allow to bill applicants for the balance that 
was not paid for by the E-Rate program for terminated lines of service 
from the non-usage requirements adopted in the Order.
    Finally, any burdens for applicants presented in the Order are 
outweighed by the benefits to applicants. With funding from the E-Rate 
program applicants will now have the opportunity to offer off-campus 
access to broadband to help meet the educational necessities of 
students, staff, and library patrons.
    The Commission will send a copy of the Order, including this FRFA, 
in a report to be sent to Congress pursuant to the Congressional Review 
Act. In addition, the Commission will send a copy of the Order, 
including this FRFA, to the Chief Counsel for Advocacy of the SBA. A 
copy of the Order and FRFA (or summaries thereof) will also be 
published in the Federal Register.
    Late-Filed Comments. The Commission notes there were several 
comments filed in this proceeding after the January 16, 2024 comment 
deadline and January 29, 2024 reply comment deadline. In the interest 
of having as complete and accurate record as possible, and because the 
Commission would be free to consider the substance of those filings as 
part of the record in any event, the Commission will accept the late-
filed comments and waive the requirements of 47 CFR 1.46(b), and have 
considered them in the Order.

Ordering Clauses

    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, the Report and Order is adopted effective 
September 19, 2024.
    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 
19, 2024, except for Sec. Sec.  54.504(a)(1)(x)-(xii), 54.504(g), and 
54.516(e)-(g), 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 as required by the Paperwork Reduction Act.
    It is further ordered that the Office of the Secretary 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.

List of Subjects in 47 CFR Part 54

    Communications common carriers, Hotspots, internet, Libraries, 
Reporting and recordkeeping requirements, Schools, Telecommunications, 
Telephone.


[[Page 67324]]


Federal Communications Commission.
Marlene Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, 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. Effective September 19, 2024, Sec.  54.500 is amended by adding in 
alphabetical order definitions of ``Wi-Fi'' and ``Wi-Fi hotspot'' to 
read as follows:


Sec.  54.500  Terms and definitions.

* * * * *
    Wi-Fi. ``Wi-Fi'' is a wireless networking protocol based on 
Institute of Electrical and Electronics Engineers standard 802.11.
    Wi-Fi hotspot. A ``Wi-Fi hotspot'' is a device that is capable of 
receiving advanced telecommunications and information services, and 
sharing such services with another connected device through the use of 
Wi-Fi.


0
3. Effective September 19, 2024, Sec.  54.502 is amended by 
redesignating paragraph (e) as (f) and adding new paragraph (e) as 
follows:


Sec.  54.502  Eligible services.

* * * * *
    (e) Off-premises Wi-Fi hotspot program. Each eligible school 
district, school operating independently of a school district, library 
system and library operating independently of a system shall be 
eligible for support for category one services for a maximum pre-
discount budget for off-premises Wi-Fi hotspots and recurring services 
pursuant to the formula described in paragraphs (e)(1) through (4) of 
this section and subject to the limitations described in paragraphs 
(e)(5) and (6) of this section.
    (1) Fixed three-year funding cycle. Beginning in funding year 2025, 
each eligible school, school district, library, or library system shall 
be eligible for a budgeted amount of pre-discount support for category 
one off-premises Wi-Fi hotspots and recurring services over a three-
year funding cycle that will reset every three funding years. Each 
school, school district, library, or library system shall be eligible 
for the total available budget less the pre-discount amount of any 
support received for these services in the prior funding years of that 
fixed three-year funding cycle.
    (2) School and school district mechanism. Each eligible school 
operating independently of a school district or school district shall 
be eligible for up to a pre-discount price calculated by multiplying 
the student count by 0.2 and the category one discount rate, rounded up 
to the nearest ten. This value is then multiplied by $630. The formula 
will be based on the number of full-time students.
    (3) Library and library system mechanism. Each eligible library 
operating independently of a system, or library system shall be 
eligible for up to a pre-discount price calculated by multiplying the 
square footage by 0.0055 and the category one discount rate, rounded up 
to the nearest ten. This value is then multiplied by $630.
    (4) Wi-fi Hotspots and service funding caps. The available funding 
for Wi-Fi hotspots is capped at $90 and services at $15 per month. An 
applicant may not request more than 45 percent of the Wi-Fi hotspot 
budget in a single funding year. Each E-Rate-supported Wi-Fi hotspot 
must have an accompanying request for recurring service.
    (5) Non-usage notice and termination requirements. At least once 
every 31 days, service providers shall determine whether any E-Rate-
supported lines have zero data usage in the prior 60 days and provide 
notice to the applicant of the particular lines within 5 business days. 
If there is zero data usage for 90 days, service providers shall 
discontinue service to such lines.
    (6) Early termination. Service providers must exclude or waive 
early termination fees for lines of service associated with Wi-Fi 
hotspots that are lost, broken, or unused, including those for which 
service is discontinued in paragraph (e)(5) of this section. Service 
providers shall not bill applicants for unused lines of service that 
are discontinued.
    (7) Off-premises hotspots program adjustments. The Chief, Wireline 
Competition Bureau, is delegated authority to adjust the limiting 
mechanism amounts and the Wi-Fi hotspot program cost caps, after 
seeking comment on a proposed adjustment.
    (8) Eligible users. Eligible schools and libraries are permitted to 
request and receive support for the purchase of Wi-Fi hotspots and 
services for off-premises use by:
    (i) In the case of a school, students and school staff; and
    (ii) In the case of a library, patrons of the library.
    (9) Per user limitation. Support for eligible Wi-Fi hotspots and 
services used off-premises is limited to not more than one Wi-Fi 
hotspot per student, school staff member, or library patron.


0
4. Delayed indefinitely, Sec.  54.504 is amended by adding paragraphs 
(a)(1)(x) through (xii), and (g) to read as follows:


Sec.  54.504  Requests for services.

    (a) * * *
    (1) * * *
    (x) The school, library, or consortium is not seeking support and 
reimbursement for eligible equipment and/or services that have been 
purchased and reimbursed with other Federal, State, Tribal, or local 
funding.
    (xi) The school, library, or consortium will create and maintain an 
asset and service inventory as required by Sec.  54.516(e).
    (xii) The school, library, or consortium will not use Wi-Fi 
hotspots or service as part of a one-to-one Wi-Fi hotspot initiative, 
nor will the Wi-Fi hotspots be purchased for future use, emergency use, 
or use in the case of theft, loss, or breakage.
* * * * *
    (g) Off-premises Wi-Fi hotspot certification on the FCC Form 486. 
An eligible school, library, or consortium that includes an eligible 
school or library receiving support for Wi-Fi hotspots and service for 
use off-premises must certify on FCC Form 486 that the school, library, 
or consortium has updated and publicly posted their acceptable use 
policy consistent with the requirements set forth in Sec.  54.516(f); 
the Wi-Fi hotspots and/or services the school, library, or consortium 
purchased using E-Rate support for off-premises use have been activated 
and made available to students, school staff, and/or library patrons; 
public notice of their availability has been provided; and the 
authorized person is not requesting reimbursement for Wi-Fi hotspots 
and/or services that have not been made available for distribution.

0
5. Effective September 19, 2024, Sec.  54.506 is added to read as 
follows:


Sec.  54.506  Duplicate support.

    Entities participating in the E-Rate program may not seek E-Rate 
support or reimbursement for eligible equipment and services that have 
been purchased and reimbursed with other Federal, State, Tribal, or 
local funding.

0
6. Effective September 19, 2024, Sec.  54.507 is amended by revising 
paragraph (f)(4) and adding paragraph (f)(5) to read as follows:


Sec.  54.507  Cap.

* * * * *

[[Page 67325]]

    (f) * * *
    (4) In the event that demand exceeds available funding, requests 
for category one services used off-premises shall be funded after on-
premises category one and category two services.
    (5) For paragraphs (f)(1) through (4) of this section, if the 
remaining funds are not sufficient to support all of the funding 
requests within a particular discount level, the Administrator shall 
allocate funds at that discount level using the percentage of students 
eligible for the National School Lunch Program. Thus, if there is not 
enough support to fund all requests at the 40 percent discount level, 
the Administrator shall allocate funds beginning with those applicants 
with the highest percentage of NSLP eligibility for that discount level 
by funding those applicants with 19 percent NSLP eligibility, then 18 
percent NSLP eligibility, and shall continue committing funds in the 
same manner to applicants at each descending percentage of NSLP until 
there are no funds remaining.

0
7. Effective September 19, 2024, Sec.  54.513 is amended by revising 
paragraph (b) to read as follows:


Sec.  54.513  Resale and transfer of services.

* * * * *
    (b) Disposal of obsolete equipment components of eligible services. 
Eligible equipment components of eligible services purchased at a 
discount under this subpart shall be considered obsolete if the 
equipment components have been installed for at least five years, 
except that Wi-Fi hotspots for off-premises use shall be considered 
obsolete after three years. Obsolete equipment components of eligible 
services may be resold or transferred in consideration of money or any 
other thing of value, disposed of, donated, or traded.
* * * * *

0
8. Effective September 19, 2024, Sec.  54.516 is amended by revising 
paragraphs (a)(1) and (b) to read as follows:


Sec.  54.516  Auditing and inspections.

    (a) * * *
    (1) Schools, libraries, and consortia. Schools, libraries, and any 
consortium that includes schools or libraries shall retain all 
documents related to the application for, receipt, and delivery of 
supported services for at least 10 years after the latter of the last 
day of the applicable funding year or the service delivery deadline for 
the funding request. Any other document that demonstrates compliance 
with the statutory or regulatory requirements for the schools and 
libraries mechanism shall be retained as well. Subject to paragraph (e) 
of this section, schools, libraries, and consortia shall maintain asset 
and inventory records for a period of 10 years after purchase.
* * * * *
    (b) Production of records. Schools, libraries, consortia, and 
service providers shall produce such records at the request of any 
representative (including any auditor) appointed by a State education 
department, the Administrator, the FCC, or any local, State or Federal 
agency with jurisdiction over the entity. Where necessary for 
compliance with Federal or State privacy laws, E-Rate participants may 
produce records regarding students, school staff, and library patrons 
in an anonymized or deidentified format. When requested by the 
Administrator or the Commission, as part of an audit or investigation, 
schools, libraries, and consortia must seek consent to provide 
personally identifiable information from a student who has reach age of 
majority, the relevant parent/guardian of a minor student, or the 
school staff member or library patron prior to disclosure.
* * * * *

0
9. Delayed indefinitely, Sec.  54.516 is amended by adding paragraphs 
(e), (f), and (g) to read as follows:


Sec.  54.516  Auditing and inspections.

* * * * *
    (e) Asset and service inventory requirements--(1) Schools. Schools, 
school districts, and consortia including any of these entities, shall 
keep asset and service inventories as follows:
    (i) For equipment purchased as components of supported category two 
services, the asset inventory must be sufficient to verify the actual 
location of such equipment.
    (ii) For equipment needed to make wireless service for school buses 
functional, the asset inventory must be sufficient to verify the actual 
location of such equipment.
    (iii) For each Wi-Fi hotspot provided to an individual student or 
school staff member, the asset and service inventory must identify:
    (A) The equipment make/model;
    (B) The equipment serial number;
    (C) The full name of the person to whom the equipment was provided;
    (D) The dates the equipment was loaned out and returned, or the 
date the school was notified that the equipment was missing, lost, or 
damaged; and
    (E) The service detail.
    (2) Libraries. Libraries, library systems, and consortia including 
any of these entities, shall keep asset and service inventories as 
follows:
    (i) For equipment purchased as components of supported category two 
services, the asset inventory must be sufficient to verify the actual 
location of such equipment.
    (ii) For each Wi-Fi hotspot provided to an individual library 
patron, the asset and service inventory must identify:
    (A) The equipment make/model;
    (B) The equipment serial number;
    (C) The dates the equipment was loaned out and returned, or the 
date the library was notified that the equipment was missing, lost, or 
damaged; and
    (D) The service detail.
    (f) Acceptable use policies. Schools, school districts, libraries, 
library systems, and consortia including any of these entities that 
receive support for the off-premises use of Wi-Fi hotspots and/or 
services, shall maintain, provide notice, and, where necessary, update 
an acceptable use policy that clearly states that the off-premises use 
of the Wi-Fi hotspot and/or service is primarily for educational 
purposes as defined in Sec.  54.500 and that the Wi-Fi hotspot and/or 
service is for use by students, school staff members, and/or library 
patrons who need it.
    (g) Data usage reports. Service providers shall provide reports 
regarding Wi-Fi hotspot data usage for off-premises use to applicants, 
and applicants shall make such reports available to any representative 
(including any auditor) appointed by a State education department, the 
Administrator, the FCC, or any local, State, or Federal agency with 
jurisdiction over the entity upon request. Data usage reports must be 
in machine-readable digital format so that information lines can be 
read and sorted, clearly identifying the lines that are not being used 
across billing periods and the lines that have been terminated pursuant 
to Sec.  54.502(e)(5).

0
10. Effective September 19, 2024, Sec.  54.520 is amended by revising 
paragraphs (c)(1)(iii)(C), (c)(2)(iii)(C), and (c)(3)(i)(C) to read as 
follows:


Sec.  54.520  Children's internet Protection Act certifications 
required from recipients of discounts under the Federal universal 
service support mechanism for schools and libraries.

* * * * *
    (c) * * *
    (1) * * *
    (iii) * * *
    (C) The Children's internet Protection Act, as codified at 47 
U.S.C. 254(h) and (l), does not apply because the recipient(s) of 
service represented in the Funding Request Number(s) on this Form 486 
is (are) receiving discount services only for telecommunications

[[Page 67326]]

services, or is (are) receiving support under the Federal universal 
service support mechanism for schools and libraries for internet access 
or internal connections that will not be used in conjunction with a 
computer owned by the recipient(s).
    (2) * * *
    (iii) * * *
    (C) The Children's internet Protection Act, as codified at 47 
U.S.C. 254(h) and (l), does not apply because the recipient(s) of 
service represented in the Funding Request Number(s) on this Form 486 
is (are) receiving discount services only for telecommunications 
services, or is (are) receiving support under the Federal universal 
service support mechanism for schools and libraries for internet access 
or internal connections that will not be used in conjunction with a 
computer owned by the recipient(s).
    (3) * * *
    (i) * * *
    (C) The Children's internet Protection Act, as codified at 47 
U.S.C. 254(h) and (l), does not apply because the recipient(s) of 
service under my administrative authority and represented in the 
Funding Request Number(s) for which you have requested or received 
Funding Commitments is (are) receiving discount services only for 
telecommunications services; and, or is (are) receiving support under 
the Federal universal service support mechanism for schools and 
libraries for internet access or internal connections that will not be 
used in conjunction with a computer owned by the recipient(s); and
* * * * *
[FR Doc. 2024-18122 Filed 8-19-24; 8:45 am]
BILLING CODE 6712-01-P