High Cost, the largest of the four programs that make up the Federal Communications Commission (FCC) Universal Service Fund (USF), ensures universal availability of essential telecommunications services in rural America. The program distributes billions of dollars in funding annually to carriers to deliver voice and broadband service—both fixed and mobile—in rural areas where the market alone cannot support the substantial cost of deploying network infrastructure and providing connectivity. Carriers that receive funding must provide service at rates reasonably comparable to those available in urban areas. See the High Cost Disbursement Search Tool for information about the dollar amounts paid to carriers that receive High Cost support.
Legacy Voice Funds
Historically, the High Cost program has subsidized voice service to ensure universal access to basic phone lines through legacy funds that calculate support based on carrier costs. While legacy High Cost funds are not open to new carriers, they continue to pay out support to traditional rural telephone companies certified as eligible telecommunications carriers (ETCs).
Modernized Broadband Funds
Over the past decade, the FCC has reformed the High Cost program through the Connect America Fund (CAF) to bring advanced communications networks and reliable, high-speed Internet access to rural communities that might otherwise be stuck on the wrong side of the digital divide. The Connect America Fund consists of a nearly a dozen modernized funds that rely on mainly on incentive-based models and competitive bidding to give carriers a fixed amount of support to deploy and maintain high-quality broadband networks with certain speeds over a clear timeline —with interim and final deployment milestone deadlines —to a defined number of locations in eligible areas. With modernization, the FCC has expanded carrier participation to include not only traditional rural phone companies, but also rural electric cooperatives, cable operators, wireless operators, wireless Internet service providers, and satellite providers. See the Connect America Fund (CAF) Map to find the specific fixed locations where carriers have built out broadband using CAF support.
Participating in High Cost
The process for participating in the High Cost program—as well as the service obligations, network speed requirements, deployment timelines and reporting rules that carriers must meet—vary from fund to fund. See the High Cost Funds pages for information about the specific mandates established by the FCC for each of the legacy and modernized funds that make up the High Cost program and the Connect America Fund. Each fund has its own webpage intended to serve as a starting point for carriers participating in that specific program. Key reporting, filing, and certification requirements include:
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 and the FCC by October 1 every year through USAC’s E-File/One Portal 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 on an annual basis. This form collects financial and operations information used to validate carrier support, as well as details about carrier engagement with Tribal governments, among other data. Carriers must complete and submit FCC Form 481 online through USAC’s E-File/One Portal system. This form is typically due by July 1.
Learn more about filing the 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 latitude and longitude coordinates for every location where service is available, as well as the broadband speeds offered at those locations and dates of deployment.
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 and that the location is not a duplicate of one that has already been filed. The HUBB also checks to be sure that the date of deployment falls within the timeline of the fund in which the carrier participates and calculates carrier progress toward meeting the fund’s broadband build-out obligations, including interim 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 to report location data for broadband deployed with CAF support in the previous calendar year or certify that they have “no locations to upload.” Carriers with annual deployment milestone deadlines must also complete milestone certifications as part of the HUBB filing process and will face verification reviews tied to those milestones. 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 data submitted to the HUBB is the foundation for the Connect America Fund (CAF) Map, an interactive online map that shows the impact of CAF support on broadband expansion in rural America. The map displays the geographic areas that are eligible for CAF support, as well as the specific fixed locations where carriers participating in the program have reported deployment in the HUBB. See the HUBB Dashboard for a high-level snapshot of deployment totals based on data certified in the system as of March 10, 2023, to reflect deployment through Dec. 31, 2022, including deployment numbers by fund, speed tier and state. The HUBB Dashboard shows that as of Dec. 31, 2022, carriers had reported deployment to nearly 7.38 million locations, including nearly 1.36 million locations with speeds of a gigabit or faster.
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 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 network speed and latency pre-testing or testing at a USAC-generated random sample of CAF-supported broadband locations with active subscribers for one week of each quarter of the calendar year and submit the results to USAC as part of the annual compliance process. 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 do not comply.
USAC has built a system called the Performance Measures Module (PMM) to support this compliance process. The PMM lets carriers identify which locations that have been deployed with CAF support and reported in the HUBB have active subscribers; 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 that carriers are required to deliver); collects the speed and latency test results from carriers; and calculates compliance with performance measures standards based on certified test results.
Learn more about conducting network testing.
For questions about the High Cost program, call (844) 357-0408 or email email@example.com.