Commission Releases Category 2 NPRM

The Commission released the Category 2 Notice of Proposed Rulemaking today.

In the NPRM, the Commission proposes (1) amending its rules to make permanent the category two budget approach for all applicants; (2) proposes and seeks comment on ways to improve the category two budget approach; and (3) seeks comment on how best to transition from the five-year test period to a permanent extension of this approach.

Specifically, the Commission seeks comment on other potential ways to improve the budget approach, including moving to district-wide budgets and simplifying the budget calculations.  It also seeks general comment on ways to decrease the burden of applying for category two services and improve administration of category two budgets for both applicants and USAC.

In 2014, the Commission adopted rules establishing budgets for Category 2 services.  For schools, those budgets are based on student head count, and for libraries, the budgets are based on the size of the library.  Applicants had five years to use their budget, which was set for each separate building.

Commissioners O’Rielly, Rosenworcel and Starks issued statements; O’Rielly dissented in part, noting that the Commission missed an opportunity to take “corrective steps” on what he called the "overbuilding" of fiber facilities, that is, funding the construction of new fiber facilities with E-rate funds when fiber already exists in the area. Commissioner O'Rielly also objected to the rule that set a library's budget based on its size.