Section 54.1814 - High-cost area benefit(a)Definitions -(1)Audited income statement. For purposes of the administration of the Affordable Connectivity Program high-cost area benefit, an "audited income statement" is an income statement that has been audited by an independent Certified Public Accountant (CPA).(2)Component-level income statement. For purposes of the administration of the Affordable Connectivity Program high-cost area benefit, a "component-level income statement" is an income statement that shows financial results for the subsidiary or business component that is operating and/or offering retail broadband internet access service for sale in the designated high-cost areas as defined by 47 U.S.C. 1702(a)(2)(G) .(3)Consolidated income statement. For purposes of the administration of the Affordable Connectivity Program high-cost area benefit, a "consolidated income statement" is an income statement that shows aggregated financial results for multiple entities or subsidiaries connected with a single parent company.(4)High-cost area. For purposes of the administration of the Affordable Connectivity Program high-cost area benefit, the term "high-cost area" means an area as defined by 47 U.S.C. 1702(a)(2)(G) as determined by the National Telecommunications and Information Administration.(5)Particularized economic hardship. A provider has a "particularized economic hardship" in a high-cost area only if: (i) It is not possible for that provider to offer service in the high-cost area while covering the costs of maintaining the operation of all or part of its broadband network in that area at the standard up to $30 a month discount; and(ii) The up to $75 a month high-cost area benefit would materially improve the provider's ability to offer service through the ACP and maintain and operate its broadband network in that area.(b)High-cost area benefit approval process. A facilities-based ACP participating provider in a high-cost area (as defined in paragraph (a) of this section) may provide an affordable connectivity benefit in an amount up to $75.00 for a broadband internet access service offering in a high-cost area upon a showing that the applicability of the standard up to $30.00 benefit under § 54.1803(a) by the provider would cause particularized economic hardship to the provider such that the provider may not be able to maintain the operation of part or all of its broadband network in that high-cost area. (1) A participating provider seeking approval to provide the high-cost area benefit must first electronically file a request with the Universal Service Administrative Company by the deadline established by the Wireline Competition Bureau.(i) The electronic request shall require the participating provider to specify whether it has previously applied for Federal financial assistance, as defined in 2 CFR 25.406 , in the three fiscal years prior to the provider's application. Upon request, the participating provider must submit to the Administrator or the Commission applications for loans submitted to the U.S. Department of Agriculture Rural Utility Service (RUS), approvals or denials of such loans, the provider's RUS Operating Report for Telecommunications Borrowers filed with the RUS, and any financial reports filed with a state Public Utility Commission, as applicable.(2) The participating provider's request shall include the documentation required to demonstrate particularized economic hardship. The request shall include an income statement, a supporting affidavit, any applicable Federal tax filings and/or returns, and any other relevant documentation as determined by the Bureau and OEA. (i) The income statement(s) must: (A) Be produced in the ordinary course of business;(B) Include both consolidated and component-level income statements;(C) Be audited by an independent public accountant, where such statements are produced in the ordinary course of business or are required by 17 U.S.C. 78m, 78o(d) ; and(D) Include detailed information on the provider's net income, operating revenue, and operating expenses, including, but not necessarily limited to, cost of goods sold or services, selling, general and administrative expenses and depreciation or amortization expenses.(ii) The supporting affidavit, must include revenue and cost allocations and a description of the methodology, demonstrating that the provider was operating at a loss related to providing broadband internet access service in the relevant high-cost area(s) for the last fiscal year or in at least four of the last six fiscal quarters, or other acceptable documentation determined by the Wireline Competition Bureau in consultation with the Office of Economics and Analytics.(iii) The participating provider must first attempt to directly assign or attribute costs to broadband internet access services, and if that is not possible, must use a cost-causative mechanism to the extent possible. If neither is possible, the participating provider must employ a reasonable cost-allocation with a justification for its methodology.(iv) The tax filing should include Form 1120, Form 1120-S or other applicable Federal Income Tax returns as required by 26 CFR part 1.(3) The participating provider's application must also include certifications from a company officer with knowledge of the provider's cost and revenues under penalty of perjury that:(i) All information submitted is true and correct to the best of the filer's knowledge;(ii) The provider will comply with all applicable statutes and the Commission's rules and orders; and(iii) The provider will use any reimbursed funds received for its intended purpose of providing discounted broadband internet access services to eligible low-income households.(iv) The provider is a facilities-based provider as defined by 47 CFR 1.7001(a)(2)(i) through (v) .(v) The provider used cost allocation methodology consistent with the rules.(c)Review process. The Administrator, under oversight of the Wireline Competition Bureau and the Office of Economics and Analytics, shall review each participating provider's request to offer the high-cost area benefit and determine whether the provider has demonstrated a particularized economic hardship in the high-cost areas for which it is requesting to offer the high-cost area benefit. If the Administrator finds the particularized economic hardship showing is satisfied in accordance with the Commission's rules and orders, and any guidance from the Wireline Competition Bureau and the Office of Economics and Analytics, then the Administrator will approve the request and notify the participating provider. Otherwise, the Administrator will deny the request and provide the participating provider a written explanation of the basis for the denial. (1) The Administrator will review applications within a timeline to be determined by the Bureau.(2) Providers may appeal the Administrator's determination as set forth in subpart I in this part of the Commission's rules.(3) Providers may only submit claims for up to the $30.00 standard benefit amount while an appeal of an Administrator's determination is underway. Following a successful appeal, providers approved to offer the high-cost area benefit may submit revised claims for eligible households in the approved high-cost areas as set forth in § 54.1808 . The provider many submit revised claims for up to $75.00 only from the start of the approval period indicated in the appeal determination letter.(d)Annual renewal process. A participating provider that has been approved to provide the high-cost area benefit must request approval annually thereafter to continue to provide the enhanced benefit to eligible households in a subsequent year. The participating provider will need to demonstrate particularized economic hardship in the renewal submission, through the documentation specified by the Wireline Competition Bureau. The deadline for submitting the renewal request shall be determined by the Wireline Competition Bureau.(e)Notice to eligible households.(1) Participating providers approved to offer the high-cost area benefit shall provide Affordable Connectivity Program subscribers written notice when the provider begins applying the high-cost area benefit to the subscriber's bill. The written notice must state:(i) That the subscriber is receiving a high-cost area benefit and the difference between the standard benefit amount and the enhanced high-cost benefit being applied to the subscriber's supported service;(ii) That the receipt of the high-cost area benefit is contingent on the provider's annual continued eligibility to offer the enhanced high-cost area benefit;(iii) That the provider is required to provide the subscriber advance notice if the provider is no longer deemed eligible to offer the high-cost area benefit; and(iv) That the provider is required to provide the subscriber advance notice of any changes to the subscriber's supported service rate or service plan stemming from any loss of the provider's eligibility to offer the high-cost area benefit.(2) If a participating provider fails to timely submit the renewal submission by the deadline or no longer qualifies to offer the high-cost area benefit based on its annual resubmission, then the participating provider shall provide written notice to its Affordable Connectivity Program customers receiving the high-cost area benefit at least 30 days and at least 15 days before the expiration of its approval to offer the high-cost area benefit. Such subscriber notices shall include: (i) A statement that the provider will no longer be offering the high-cost area benefit in the relevant high-cost area;(ii) The effective date of the end of the high-cost area benefit;(iii) A statement that upon the effective date of the loss of the high-cost area benefit, the Affordable Connectivity Program supported service purchased by the household will no longer be discounted at the higher subsidy amount; and(iv) The amount the household will be expected to pay if it continues purchasing the service from the provider after the high-cost area benefit is no longer available.(3) If a participating provider is no longer authorized to offer the high-cost area benefit, the provider may transition an eligible household to a lower-priced ACP service plan once the high-cost area benefit is no longer available, upon advance notice to the household and an opportunity for the household to opt out of the change and remain on its current service plan or select another service plan. Participating providers must include the advance transition notice in the required written notice about the end of the provider's approval to offer the high-cost area benefit. The advanced notice must:(i) Provide details about the new plan and monthly price;(ii) State that the subscriber may remain on its current plan or choose another plan;(iii) Provide instructions on how the subscriber can opt out of the transition or change its service plan;(iv) Provide the deadline for the subscriber to notify the provider that the subscriber would like to remain on its current plan or choose another plan.88 FR 60355, Sept. 1, 2023, as amended at 88 FR 67654, Oct. 2, 2023 88 FR 60355, 10/2/2023, as amended at 88 FR 67654, 10/2/2023