47 U.S.C. § 254 — Universal service

(a) Procedures to review universal service requirements (1) Federal-State Joint Board on universal service — Within one month after February 8, 1996, the FCC had to start a proceeding — referred to a Federal-State Joint Board under section 410(c) — to recommend changes implementing section 214(e) and this section, including defining which services get federal universal service support and setting a specific timetable. The Joint Board also had to include a state-appointed utility consumer advocate, nominated by a national organization of state consumer advocates. After notice and public comment, the Joint Board had to send its recommendations to the FCC 9 months after February 8, 1996. (2) Commission action — The FCC had to start a single proceeding to carry out the Joint Board's recommendations, finishing within 15 months after February 8, 1996. The resulting rules had to define which services get federal universal service support and set a specific implementation timetable. After that, the FCC must finish any proceeding on later Joint Board recommendations within one year of receiving them. (b) Universal service principles — The Joint Board and the FCC must base universal service policy on these principles: (1) Quality and rates — quality service should be available at just, reasonable, and affordable rates. (2) Access to advanced services — advanced telecommunications and information services should reach every region of the country. (3) Access in rural and high-cost areas — consumers everywhere, including low-income consumers and those in rural, insular, and high-cost areas, should get telecommunications and information services — including long-distance and advanced services — that are reasonably comparable to urban service, at rates reasonably comparable to urban rates. (4) Equitable and nondiscriminatory contributions — every telecommunications service provider should contribute fairly and equally to preserving and advancing universal service. (5) Specific and predictable support mechanisms — federal and state funding mechanisms for universal service should be specific, predictable, and sufficient. (6) Access for schools, health care, and libraries — schools, classrooms, health care providers, and libraries should get access to advanced telecommunications services, as described in subsection (h). (7) Additional principles — the Joint Board and the FCC can add whatever other principles they find necessary to protect the public interest and stay consistent with this chapter. (c) Definition (1) In general — Universal service is a changing level of telecommunications service that the FCC must define from time to time, taking into account advances in technology. In recommending (the Joint Board) and setting (the FCC) that definition, they must weigh whether a service (A) is essential to education, public health, or public safety; (B) has, through customers' own market choices, been adopted by most residential customers; (C) is being rolled out in public telecommunications networks by carriers; and (D) fits the public interest, convenience, and necessity. (2) Alterations and modifications — The Joint Board can, from time to time, recommend changes to that definition to the FCC. (3) Special services — Beyond the services in the standard definition, the FCC can designate additional supported services just for schools, libraries, and health care providers, for subsection (h) purposes. (d) Telecommunications carrier contribution — Every carrier that provides interstate telecommunications service must contribute, fairly and equally, to the specific, predictable, sufficient mechanisms the FCC sets up to preserve and advance universal service. The FCC can exempt a carrier, or a class of carriers, if their telecommunications business is small enough that their contribution would be minimal (de minimis). Other interstate telecommunications providers can also be required to contribute if the public interest requires it. (e) Universal service support — Once FCC regulations under this section take effect, only a carrier designated as an "eligible telecommunications carrier" under section 214(e) can receive specific federal universal service support. A carrier that gets this support can only use it to provide, maintain, and upgrade the facilities and services the support is meant for. Support should be explicit and enough to achieve this section's purposes. (f) State authority — A state can adopt its own rules to preserve and advance universal service, as long as they don't conflict with the FCC's rules. Every carrier providing intrastate telecommunications service must contribute, fairly and equally, in a way the state decides, to universal service in that state. A state can add its own definitions and standards for universal service within the state, but only if it also sets up its own specific, predictable, sufficient funding mechanisms to support them — without relying on or burdening the federal universal service mechanisms. (g) Interexchange and interstate services — Within 6 months after February 8, 1996, the FCC had to adopt rules requiring long-distance carriers to charge their rural and high-cost-area subscribers no more than they charge their urban subscribers. Those rules also had to require interstate long-distance carriers to charge subscribers in every state no more than they charge subscribers in any other state. (h) Telecommunications services for certain providers (1) In general — (A) Health care providers for rural areas — Upon a good-faith request, a carrier must provide telecommunications services needed for health care in a state — including related instruction — to public or nonprofit health care providers who serve rural patients in that state, at rates reasonably comparable to urban rates in that state. The carrier can count the gap between the rural rate it charges and the rate it charges comparable rural customers elsewhere as part of its universal-service contribution obligation. (B) Educational providers and libraries — Every carrier serving an area must, on a good-faith request for services covered by the subsection (c)(3) definition of universal service, provide those services to elementary schools, secondary schools, and libraries for educational purposes, at a discount below what it charges other customers. The FCC (for interstate services) and the states (for intrastate services) decide how big a discount is needed for affordable access. A carrier providing the discount can either (i) count it as an offset against its own universal-service contribution, or (ii) despite subsection (e), get reimbursed instead through the universal-service support mechanisms. (2) Advanced services — The FCC must set competitively neutral rules to (A) improve access to advanced telecommunications and information services, as far as technically feasible and economically reasonable, for all public and nonprofit school classrooms, health care providers, and libraries; and (B) define when a carrier can be required to connect its network to these institutions. (3) Terms and conditions — A school, library, or health care provider can't resell, or otherwise transfer for money or anything of value, the telecommunications services or network capacity it gets under this subsection. (4) Eligibility of users — None of these entities gets the preferential rate if it's a for-profit business, or a school (as defined in paragraph (7)(A)) with an endowment over $50,000,000, or a library or library consortium that isn't eligible for assistance from a state library administrative agency under the Library Services and Technology Act. (5) Requirements for certain schools with computers having Internet access — (A) Internet safety — (i) Except as clause (ii) provides, a school with internet-connected computers can't get discounted rates under paragraph (1)(B) unless the school (or its school board, local educational agency, or other responsible authority) submits the certifications described in (B) and (C) below, submits a certification that it has adopted and put in place an internet safety policy under subsection (l), and actually uses its computers consistent with those certifications. (ii) This requirement doesn't apply if the school gets the discount only for purposes other than internet access, internet service, or internal connections. (iii) The school (or its board, agency, or authority) must give reasonable public notice and hold at least one public hearing or meeting on the proposed internet safety policy — though for a school other than an elementary or secondary school as defined in section 7801 of title 20, that notice and hearing can be limited to people connected to the school. (B) Certification with respect to minors — The school must certify it (i) enforces an internet safety policy for minors that includes monitoring their online activity and running a technology protection measure on any internet-connected computer, blocking access to visual depictions that are obscene, child pornography, or harmful to minors; (ii) keeps that protection measure running whenever minors use the computers; and (iii) teaches minors, as part of the policy, about appropriate online behavior — including interacting on social networking sites and in chat rooms, and recognizing and responding to cyberbullying. (C) Certification with respect to adults — The school must certify it (i) enforces an internet safety policy that includes a technology protection measure blocking obscene material or child pornography on internet-connected computers, and (ii) keeps that measure running whenever those computers are used. (D) Disabling during adult use — An authorized administrator, supervisor, or other person can turn off the protection measure during use by an adult, to allow bona fide research or other lawful purposes. (E) Timing of implementation — (i) For a school already covered when this paragraph took effect, certification under (B) and (C) is due within 120 days after the start of the first program funding year, and for later years, as part of that year's application. (ii) A school that already has a compliant internet safety policy and technology protection measures must certify compliance every year in its application cycle (with that same 120-day deadline for the very first year). A school that doesn't yet have them must, in its first funding year, certify it's taking steps — including any needed procurement — to put them in place, and in its second funding year, certify it's now in compliance; a school unable to certify compliance by the second year becomes ineligible for discounted service or funding for that year and every year after, until it comes into compliance. (III) A school that can't meet the second-year deadline because state or local procurement or competitive-bidding rules stand in the way can seek a waiver, but must notify the FCC and certify that it will be brought into compliance before the third program year. (F) Noncompliance — (i) A school that knowingly fails to file its required annual certification becomes ineligible for discounted rates or funding. (ii) A school that knowingly fails to actually run its computers consistent with its certification must repay the funds and discounts it got for that period. (iii) A school that missed a certification can fix that by filing it, and becomes eligible again once it does; a school that fell out of compliance with its certification can fix that by coming back into compliance and telling the FCC. (6) Requirements for certain libraries with computers having Internet access — This paragraph applies the same certification requirements, filtering rules for minors and adults, disabling-for-adults provision, implementation timing, and noncompliance consequences described in paragraph (5) to libraries with internet-connected computers, in place of schools. (7) Definitions — For this subsection: (A) "Elementary and secondary schools" has the meaning given in section 7801 of title 20. (B) "Health care provider" means post-secondary schools that teach health care, teaching hospitals, and medical schools; community or migrant health centers; local health departments or agencies; community mental health centers; not-for-profit hospitals; rural health clinics; skilled nursing facilities (as defined in section 395i–3(a) of title 42); and consortia of any of these. (C) "Public institutional telecommunications user" means a school, library, or health care provider as just defined. (D) "Minor" means anyone under 17. (E) "Obscene" has the meaning given in section 1460 of title 18. (F) "Child pornography" has the meaning given in section 2256 of title 18. (G) "Harmful to minors" means a picture, image, or other visual depiction that, taken as a whole and with respect to minors, (i) appeals to a prurient interest in nudity, sex, or excretion; (ii) depicts a sexual act or contact, or the genitals, in a way that's patently offensive with respect to minors; and (iii) lacks serious literary, artistic, political, or scientific value for minors. (H) "Sexual act" and "sexual contact" have the meanings given in section 2246 of title 18. (I) "Technology protection measure" means a specific technology that blocks or filters internet access to material covered by a certification under paragraph (5) or (6). (i) Consumer protection — The FCC and the states should make sure universal service stays available at just, reasonable, and affordable rates. (j) Lifeline assistance — This section doesn't change how the FCC collects, distributes, or runs the Lifeline Assistance Program under section 69.117 of title 47 of the Code of Federal Regulations, or other related rules. (k) Subsidy of competitive services prohibited — A carrier can't use revenue from services that face no competition to subsidize services that do face competition. The FCC (for interstate services) and the states (for intrastate services) must set cost-allocation rules, accounting safeguards, and guidelines so that services covered by the universal service definition carry no more than a reasonable share of the shared costs of facilities used for those services. (l) Internet safety policy requirement for schools and libraries (1) In general — Each school or library covered by subsection (h) must (A) adopt and put in place an internet safety policy addressing: (i) minors accessing inappropriate material on the internet; (ii) keeping minors safe when using email, chat rooms, and other direct electronic communication; (iii) blocking unauthorized access ("hacking") and other unlawful online activity by minors; (iv) stopping the unauthorized disclosure, use, or spread of minors' personal information; and (v) restricting minors' access to material harmful to them; and (B) give reasonable public notice and hold at least one public hearing or meeting on the proposed policy. (2) Local determination of content — The school board, local educational agency, library, or other responsible authority decides what material counts as inappropriate for minors. No federal agency can (A) set the criteria for that decision, (B) review the decision once made, or (C) consider the criteria used, when administering subsection (h)(1)(B). (3) Availability for review — Each adopted internet safety policy must be made available to the FCC on request, by the school, board, agency, or library responsible for adopting it. (4) Effective date — This subsection applies to schools and libraries starting 120 days after December 21, 2000. (m) Vetting of high-cost fund recipients (1) Definitions — In this subsection: (A) "Covered funding" means any new offer of high-cost universal service funding — including funding awarded through a reverse competitive bidding process under this section — for building a broadband-capable network and providing the supported services over it. (B) "New covered funding award" means covered funding awarded based on an application submitted on or after the date rules under paragraph (2) take effect. (2) Commission rulemaking — Within 180 days after May 11, 2026, the FCC must start a rulemaking proceeding to set up a vetting process for applicants and other recipients of a new covered funding award. (3) Contents — (A) In general — In writing these rules, and staying technology-neutral, the FCC must only award covered funding to applicants who can show they meet the qualifications in (B). (B) Qualifications described — An applicant's initial application must include enough detail and documentation for the FCC to confirm the applicant has the technical, financial, and operational ability, and a reasonable business plan, to build the proposed network and deliver service meeting the performance standards the FCC sets and the applicant promises. (C) Evaluation of proposal — The FCC must judge each proposal against (i) established technical, financial, and operational standards — including the technical standards adopted in the FCC's Digital Opportunity Data Collection orders (or any successor) for entities that must report broadband coverage; and (ii) the applicant's track record complying with FCC and other government broadband-deployment funding programs. (D) Penalties for pre-authorization defaults — For any new covered funding award, the FCC must set a penalty for defaulting before authorization of at least $9,000 per violation, and generally can't set the base penalty below 30 percent of the applicant's total support — unless the FCC shows that a particular case needs a lower penalty.