Annual Requirements

To participate in the High Cost program, a carrier must be certified as an eligible telecommunications carrier (ETC) on an annual basis. State utility commissions must certify that carriers under their jurisdiction are eligible to receive High Cost support in their states and used all support received in the proceeding calendar year only to provide, maintain, and upgrade the facilities for which the support was intended and will do the same in the coming calendar year.

Carriers that self-certify (i.e., ETCs not subject to state jurisdiction) must certify that they used all High Cost support received in the proceeding calendar year only to provide, maintain, and upgrade the facilities for which the support was intended and will do the same in the coming calendar year.

State utility commissions and carriers that self-certify must submit this certification to USAC by October 1 annually. States may submit the certification online through the 54.314 system, which is accessible through USAC’s E-File/One Portal system. State officials may also send the certification to USAC by email, fax or mail, although USAC highly recommends filing online. Carriers that self certify must submit the annual ETC certification to USAC using the 54.314 system.

Learn more about obtaining ETC certification.

Eligible telecommunications carriers (ETCs) participating in the High Cost and/or Lifeline programs must file FCC Form 481 through USAC’s E-File/One Portal system by July 1 annually. This form collects financial and operations information used to validate carrier support. State utility commissions also rely on Form 481 data to perform the annual certification of carriers under their jurisdiction to be able to participate in the High Cost program.

Among other data, FCC Form 481 gathers information about a carrier’s holding company, operating companies, affiliates and branding designations (doing-business-as or DBA); ability to function in emergency situations; terrestrial backhaul; Tribal lands engagement; and comparability of voice and broadband service rates in rural and urban areas. Form 481 also includes a supply chain certification, which requires carriers to certify that no universal service support is being used to purchase, rent, lease, obtain or maintain any equipment or services produced or provided by any company designated by the FCC as posing a national security threat to the integrity of communications networks or the communications supply chain.

Learn more about filing FCC Form 481.

Carriers with defined fixed broadband deployment obligations – which require them to provide voice and broadband service to a specific number of fixed locations in areas eligible for support – must file data annually with the High Cost Universal Broadband (HUBB) portal showing where they are building out mass-market, high-speed Internet service using CAF support.

This information includes date of deployment and minimum upload and download speeds available for every location where they offer broadband supported by the Connect America Fund. Carriers must also report the address and latitude and longitude coordinates for every location served with CAF support, or report deployment using Location IDs from the Broadband Serviceable Location Fabric (Fabric). The Fabric, a single, standardized dataset of all locations in the U.S. where fixed broadband access is available or could be installed, serves as the foundation for FCC collection of fixed-broadband-availability data through the Broadband Data Collection and FCC mapping of fixed-broadband availability on the National Broadband Map. The FCC also relies on the Fabric to determine broadband deployment obligations for several newer CAF programs, and carriers in these programs report deployment data in the HUBB using Fabric Location IDs, which are the Location IDs from the Fabric that identify the locations where the carrier must offer service. (These carriers must provide a reason for any unserved locations on their required locations lists.)

The HUBB conducts automated, real-time validation checks of the deployment data submitted by the carriers. The system validates, for instance, that a location’s latitude and longitude coordinates fall within an area eligible for funding, or that a reported Fabric Location ID is included on the list of locations where a carrier is required to deploy service. The HUBB also checks to be sure that the location is not a duplicate of one that has already been filed and that the date of deployment falls within the timeline of the fund in which the carrier participates. And it calculates carrier progress toward meeting a fund’s broadband build-out obligations, including interim and final deployment milestones. The HUBB will not accept locations that do not pass these automated validation checks and carriers will not receive credit for those deployments.

Carriers have until March 1 annually to report location data for broadband deployed with CAF support in the previous calendar year or certify that they have “no locations to upload” (no deployment), and must complete an annual certification to confirm that their filing activity for the previous year is complete. Carriers with annual deployment milestones may face verification reviews tied to those milestones to confirm deployment to a random sample of reported locations in the months following the HUBB filing deadline. A carrier must notify the FCC and USAC, and relevant state, U.S. Territory or Tribal governments if applicable, within 10 business days of the deadline if it fails to meet a deployment milestone. Carriers that miss milestones face increased reporting obligations, including quarterly HUBB reporting and potential loss of support.

The HUBB dataset is the foundation for the Connect America Fund (CAF) Map and the Connect America Fund (CAF) State Map, interactive online maps that show the impact of CAF support on broadband expansion in rural America. The CAF Map displays the geographic areas that are eligible for CAF support, as well as the specific fixed locations where participating carriers report offering mass-market, high speed Internet service funded by the program. The CAF State Map provides a big-picture, state-level view of CAF-supported deployment by aggregating data for all carriers participating in the program in each state.

Learn more about filing data in the HUBB.

Carriers with defined broadband deployment obligations are subject to in-depth verification reviews to substantiate reported deployment and confirm that they are in fact building out service that meets the FCC’s performance standards at a statistically valid, randomly selected sample of eligible locations submitted to the HUBB. Verification reviews are tied to deployment milestones, although USAC also conducts some verification reviews before milestones and subjects carriers receiving the largest dollar amounts and carriers considered higher risk to additional reviews and audits.

During verification, carriers must supply documentation that serves as evidence of deployment at the required upload and download speeds by the relevant deployment deadline to all locations selected for review. Examples of acceptable documentation include: customer bills, screen shots from external service availability and internal provisioning tools, letters of certification by outside engineers, engineering emails releasing locations for sale, and project completion acceptance tests and sign-off sheets. If a review concludes that a carrier failed to meet a deployment milestone, the carrier may be subject to increased reporting obligations, including quarterly HUBB reporting, and support reductions.

Learn more about participating in verification reviews.

Carriers with defined fixed broadband deployment obligations are subject to FCC performance measures testing requirements, which ensure that CAF-supported broadband service meets basic speed and latency standards so that people living in rural communities have access to the same high-quality networks as those living in urban areas.

Under this framework, carriers must conduct a full week of network speed and latency at a USAC-generated random sample of CAF-supported broadband subscriber locations reported in the HUBB in each quarter of the calendar year, and to submit and certify all results of that testing to USAC – or attest that they cannot find active subscribers to test – within two weeks of the end of the quarter. The FCC mandates that at least 80 percent of network speed measurements be at 80 percent of required speeds and 95 percent of latency measurements be at or below 100 milliseconds round-trip time. The FCC considers failure to meet a fund’s speed and latency requirements as a failure to deploy and may withhold support from carriers that fail to meet the performance measures standards required of their funds.

Before official testing begins, carriers are subject to a year of quarterly “pre-testing.” During pre-testing, carriers must conduct a full week of network speed and latency at a USAC-generated random sample of CAF-supported broadband subscriber locations reported in the HUBB in each quarter of the calendar year, and to submit and certify all results of that testing to USAC – or attest that they cannot find active subscribers to test – within two weeks of the end of the quarter. Carriers do not face withholding of support for failing to meet speed and latency standards during pre-testing as long as they submit the required test data.

USAC calculates carrier compliance with applicable performance standards separately for each state and speed tier – as well as each fund in which a carrier participates – based on certified test results submitted through a USAC system called the Performance Measures Module (PMM). This system: (1) lets carriers identify locations deployed with CAF support and reported in the HUBB that have active subscribers; (2) generates a random sample of those locations for speed and latency testing and provides the obligated speed tiers to be tested (based on the speed tiers reported for those locations in the HUBB compared with the speeds carriers are required to deliver); (3) collects the speed and latency test results from carriers; and (4) calculates compliance with performance measures standards based on certified test results.

Learn more about conducting network testing.

Carriers that have been part of a “mixed merger” since May of 2018 are subject to a Federal Communications Commission (FCC) requirement called the “Hargray condition.” A mixed merger is a transaction in which a carrier receiving legacy, cost-based support acquires or is acquired by a carrier receiving fixed monthly support, such as model-based funding.

The “Hargray condition” caps the operating expenses of the carriers of the combined entity that receive cost-based support in order to prevent potential cost shifting, and requires carriers to certify compliance annually and submit financial statements to USAC.

Learn more about meeting mixed merger requirements.