FCC Orders $211M USF Hurricane Plan

Telecom Policy Report, Oct 17, 2005

The Federal Communications Commission late Friday issued its formal order to implement a $211 million emergency services plan for supporting the Universal Service Fund (USF) program under adverse circumstances in areas affected by Hurricane Katrina within the Gulf Coast states of Alabama, Louisiana and Mississippi (TPR, Oct. 10; Sept. 19).

The federal regulator's initiative - as initially disclosed by FCC Chairman Kevin J. Martin last month - will involve disbursing monies on an expedited basis to recipients of four USF subsidiary mechanisms: approximately $39 million for Lifeline, $12 million for Link-Up, $28 million for rural health care, and $132 million for schools and libraries.

The unique aspect of the initiative is the federal Lifeline support for a free wireless handset and a package of at least 300 minutes of use, not to exceed $130 per household, until March 1, 2006, for displaced residents. Its $39 million impact on the low-income fund is based on an estimated $130 per approximately 300,000 eligible evacuee households without telephone service, with the March 1, 2006, date based on the expectation that citizens will no longer need the temporary emergency relief.

The emergency rules on the low income-oriented Link-Up and rural area- oriented telemedicine/healthcare mechanisms are expected to be in effect until March 1, 2007, and March 1, 2006, respectively. The E-rate mechanisms for schools and libraries is slightly more complex, because the FCC is re-opening the application window for the 2005 funding year, offering open-ended extensions on applications for the 2006 funding year and prioritizing hurricane-related applications.

The FCC continues to estimate that at least 600 schools and libraries will be eligible for the new E-rate funding shift due to the hurricane, with specific information on levels of destruction, funding requirements and eligibility coming in from E-rate coordinators in the three states. Eligibility on the other initiatives is, in part, being coordinated with the Federal Emergency Management Agency, while all USF monies continue to be managed and distributed by the FCC's independent, third-party handling the program: the Universal Service Administrative Company (USAC).

The FCC/USAC implementation will be watched closely by congressional committees and executive-branch units that have been monitoring oversight problems with USF, especially E-rate. Congress also wants to see the specifics behind this FCC order. Since late August, the FCC has been active with numerous disaster responses to cut the red tape and to help re-establish wireline, wireless and broadcast communications facilities and networks in the hurricane- impacted region (TPR, Sept. 12; Sept. 26).

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