Bridggita Table of Contents INTRODUCTION AND SUMMARY OF REQUEST .......................................... 3 Fiscal Year 2024 Proposed Appropriation Language ................................................................................. 9 Legislative Proposals ................................................................................................................................ 10 Summary of FYs 2022 - 2024 FTEs and Funding by Bureaus and Offices .............................................. 11 FTEs - Historical and Estimated ............................................................................................................... 12 Summary of Changes - Regulatory Fees (Offsetting Collections) ............................................................ 13 Narrative Explanation of Changes - Salaries and Expenses - Regulatory Fees ........................................ 14 Office of Inspector General Narrative ...................................................................................................... 16 Universal Service Fund Activities and Costs ............................................................................................ 17 Overall Status of Audit Recommendations ............................................................................................... 20 SPECTRUM AUCTIONS ...................................................................................... 21 Spectrum Auctions Program - Explanation of Requested Change ........................................................... 23 Spectrum Auctions Program ..................................................................................................................... 24 Spectrum Auctions Activities ................................................................................................................... 32 Summary of Distribution of Resources - Spectrum Auctions Program .................................................... 32 Spectrum Auctions Expenditures Report .................................................................................................. 33 Spectrum Auctions and Cash Collected/Generated by Fiscal Year .......................................................... 37 Spectrum Auctions Program – Cash Collected/Generated vs. Expenditures ............................................ 37 Budget Authorities Already Provided ................................................................... 39 COVID-19 Telehealth Program ................................................................................................................ 39 Broadband Deployment Accuracy and Technological Availability (Broadband DATA) Act and Broadband Deployment Locations Map ................................................................................................... 40 Secure & Trusted Communications Network Reimbursement Program .................................................. 44 Emergency Broadband Connectivity Fund-Emergency Broadband Benefit Program and Affordable Connectivity Fund-Affordable Connectivity Program .............................................................................. 45 Emergency Connectivity Fund.................................................................................................................. 47 Summary Activities for Other Budget Authorities Received in FYs 2020, 2021, & 2022 ....................... 49 1 This page is intentionally left blank 2 INTRODUCTION AND SUMMARY OF REQUEST 3 This page is intentionally left blank 4 INTRODUCTION AND SUMMARY OF REQUEST The Federal Communications Commission (FCC or Commission) is pleased to present its fiscal year (FY) 2024 budget request. The FCC is an independent regulatory agency of the United States Government. The FCC is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The Commission also regulates telecommunications and advanced communication services and video programming for people with disabilities, as set forth in various sections of the Communications Act. As specified in section 1 of the Communications Act of 1934, as amended, the FCC’s mission is to “make available, so far as possible, to all the people of the United States, without discrimination on the basis of race, color, religion, national origin, or sex, rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.”1 In addition, section 1 provides that the Commission was created “for the purpose of the national defense” and “for the purpose of promoting safety of life and property through the use of wire and radio communications.”2 The FCC is directed by five Commissioners appointed by the President and confirmed by the Senate for five-year terms, except when filling the unexpired term of a previous Commissioner. Only three Commissioners can be from the same political party at any given time. The President designates one of the Commissioners to serve as the Chairperson. The FCC’s vision is to pursue policies to bring affordable, reliable high-speed broadband to 100 percent of the country and encourage the private sector to build, maintain, and upgrade next- generation networks so that the benefits of advanced communications services are available to all Americans. The FCC will work to promote diversity, equity, inclusion, and accessibility; empowering consumers; enhancing public safety and national security; and advancing America’s global competitiveness. Furthermore, in FY 2024, the FCC will continue to improve its processes to deliver on the needs of today and the future in a more proactive and efficient manner to maintain a current high level of performance. Through these reform efforts, the Commission will develop and implement changes that focus the Commission on effectively and efficiently leveraging human capital to deliver on programs that are the highest need to citizens and where there is a unique Federal role. For FY 2024, the Commission is requesting the budget and personnel amounts that are summarized in the bullets and a table below: The Commission requests $410,743,000 in budget authority from regulatory fee offsetting collections. This request represents an increase of $20,551,000 or 5.3 percent from the FY 2023 appropriated level of $390,192,000. 1 47 U.S.C. § 151. 2 Id. 5 The Commission requests $136,167,000 in budget authority for the spectrum auctions program. This request represents an increase of $3,936,000 or 3 percent from the FY 2023 appropriated level of $132,231,000. As of January 31, 2023, the Commission’s spectrum auctions program has generated over $233.5 billion for government use; at the same time, the total cost of the auctions program has been less than $2.5 billion or 1.1 percent of the total auctions’ revenue. In creating a lean, accountable, and efficient Commission that works for the American people, the Commission requests 1,600 Full Time Equivalents (FTEs) funded by budget authority from regulatory fee offsetting collections, spectrum auctions program, and other budget authorities provided by President and Congress. This FTE level is same as the FY 2023 appropriated and enacted level. With this FTE level, the Commission will meet its mission demands in FY 2024. (Dollars in Thousands) FY 2023 FY 2024 Change in Request Estimates to FTEs 1 Enacted FTEs 1 FTEs 1 Amount Congress Budget Authority - Offsetting Collections: Regulatory Fees - Commission2 1,540 $378,061 1,540 $398,057 0 $19,996 Regulatory Fees - Office of Inspector General (OIG) 60 $12,131 60 $12,686 0 $555 Subtotal - Offsetting Collections 1,600 $390,192 1,600 $410,743 0 $20,551 Budget Authority - Other Offsetting Collections: Auction Cost Recovery Reimbursement - Commission $132,231 $136,167 $3,936 Auction Cost Recovery Reimbursement - OIG $0 $0 $0 Subtotal - Auction Cost Recovery Reimbursement $132,231 $136,167 $3,936 Subtotal - Salaries and Expenses $522,423 $546,910 $24,487 Budget Authority - Economy Act Reimbursable Agreements: Economy Act Reimbursable Agreements $4,000 $4,000 $0 Subtotal - Economy Act Reimbursable Agreements $4,000 $4,000 $0 Total Gross Proposed Budget Authority2 1,600 $526,423 1,600 $550,910 0 $24,487 1The FTE numbers include Auctions Program FTEs . Refer to page 36 for a breakdown of FTEs between Regulatory Fees and Auctions Program FTEs. 2The Commission’s other budget authorities are summarized on page 49. 6 In furtherance of these objectives and the FCC’s mission, the FY 2024 budget request will be used to support the following Strategic Goals for FY 2024: Strategic Goal 1: Pursue a “100 Percent” Broadband Policy The COVID-19 pandemic put a spotlight on the serious broadband gaps that exist across the country, including in rural infrastructure, affordability for low-income Americans, and at-home access for students. This continuing digital divide means millions of Americans do not have meaningful access to essential infrastructure for 21st century success. In response to the challenges that many Americans face, the agency should advance access to communications that are essential for Americans to work remotely, learn remotely, receive healthcare, and engage in commerce. To this end, the FCC will pursue policies to help bring affordable, reliable, high-speed broadband to 100 percent of the country. Strategic Goal 2: Promote Diversity, Equity, Inclusion and Accessibility The FCC will seek to gain a deeper understanding of how the agency’s rules, policies, and programs may promote or inhibit advances in diversity, equity, inclusion, and accessibility. The FCC will pursue focused action and investments to eliminate historical, systemic, and structural barriers that perpetuate disadvantaged or underserved individuals and communities. In so doing, the FCC will work to ensure equitable and inclusive access and facilitate the ability of underserved individuals and communities to leverage and benefit from the wide range of opportunities made possible by digital technologies, media, communication services, and next-generation networks. In addition, the FCC recognizes that it is more effective when its workforce reflects the experience, judgement, and input of individuals from many different backgrounds. Advancing equity is core to the agency’s management and policymaking processes and will benefit all Americans. Strategic Goal 3: Empower Consumers Consumers who are well informed about their rights and what they’re buying are more confident and more likely to participate in the digital economy. The FCC will tackle new challenges to consumer rights and opportunities stemming from digital transitions. The FCC also will pursue effective enforcement and new approaches to protect consumers from unwanted and intrusive communications, phone-based scams, telephone privacy issues, and other trends that affect consumers. The FCC will work to enhance competition and pursue policies that protect the competitive process to improve consumer choice and access to information. The FCC will work to foster a regulatory landscape that fosters media competition, diversity, and localism. The FCC also must work to ensure the availability of quality, functionally equivalent communications services for persons with disabilities. Strategic Goal 4: Enhance Public Safety and National Security There is no task at the FCC that is more important than keeping the American people safe. The FCC will pursue policies to promote the availability of secure, reliable, interoperable, redundant, and rapidly restorable critical communications infrastructure and services. The FCC also will promote the public’s access to reliable 911, emergency alerting, and first responder communications. The FCC will work to ensure the continued availability of timely emergency 7 alerts. The FCC will work in coordination with Federal and state, local, Tribal, and territorial government partners and industry stakeholders to support disaster response and to ensure the nation’s defense and homeland security. Strategic Goal 5: Advance America’s Global Competitiveness The FCC will take action to promote investment and advance the development and deployment of new communications technologies, such as 5G, that will allow the nation to remain a global leader in an increasingly competitive, international marketplace. The FCC will identify incentives and policies to close security gaps and accelerate trustworthy innovation. The FCC will work with its federal partners to advocate for US interests abroad. Strategic Goal 6: Foster Operational Excellence The FCC should be a model for excellence in government by effectively managing its resources, maintaining a commitment to transparent and responsive processes that encourage public involvement and decision-making that best serves the public interest, and encouraging a culture of collaboration both internally and across government agencies. Additional Useful Information to Better Understand the Budget Request Below is some additional useful information for readers to better understand the information presented in the Commission’s budget request: • FY 2022 numbers presented are actuals. • FY 2023 numbers presented are the appropriated and enacted numbers. • The FTE numbers included in the charts in Fiscal Year 2024 Requirements by Bureaus and Offices section also include FTEs from the Spectrum Auctions Program, and other budget authorities provided by the President and Congress, but the personnel compensation and benefits dollar amount only represent personnel compensation and benefits dollars from S&E - Regulatory Fees Offsetting Collections. 8 Fiscal Year 2024 Proposed Appropriation Language For necessary expenses of the Federal Communications Commission, as authorized by law, including uniforms and allowances therefor, as authorized by 5 U.S.C. 5901–5902; not to exceed $4,000 for official reception and representation expenses; purchase and hire of motor vehicles; special counsel fees; and services as authorized by 5 U.S.C. 3109, $410,743,000, to remain available until expended: Provided, That $410,743,000 of offsetting collections shall be assessed and collected pursuant to section 9 of title I of the Communications Act of 1934, shall be retained and used for necessary expenses and shall remain available until expended: Provided further, That the sum above appropriated shall be reduced as such offsetting collections are received during fiscal year 2024 so as to result in a final fiscal year 2024 salaries and expenses appropriation estimated at $0: Provided further, That, notwithstanding 47 U.S.C. 309(j)(8)(B), proceeds from the use of a competitive bidding system that may be retained and made available for obligation shall not exceed $136,167,000 for fiscal year 2024: Provided further, That, of the amount appropriated under this heading, not less than $12,686,000 shall be for the salaries and expenses of the Office of Inspector General. 9 Legislative Proposals The Administration is proposing legislative change in the President’s FY 2024 Budget that pertain to the FCC. This proposal is designed to make more spectrum available for commercial use and represent sound economic policy. Spectrum Auction Authority The Commission’s auction authority for spectrum originally was scheduled to expire in FY 1998; however, it was extended through FY 2007 in the Balanced Budget Act of 1997, P.L. 105-33; extended through FY 2011 by the Deficit Reduction Act of 2005, P.L. 109-171; extended through FY 2012 by the DTV Delay Act (2012), P.L. 111-4; extended through FY 2022 by the Middle Class Tax Relief and Job Creation Act of 2012, P.L. 112-96; extended through December 16, 2022 by the Continuing Appropriations and Ukraine Supplemental Appropriations Acct, 2023, P.L. 117- 180; extended through December 23, 2022 by the Further Continuing Appropriations and Extensions Act, 2023, P.L. 117-229; extended through December 30, 2022 by the Further Additional Continuing Appropriations and Extensions Act, 2023, P.L 117-264; and extended through March 9, 2023 by the Consolidated Appropriations Act, 2023, P.L. 117-328. Furthermore, in the Spectrum Pipeline Act of 2015 (included as Title X in the Bipartisan Budget Act of 2015, P.L. 114-74), the Commission’s auction authority with respect only to electromagnetic spectrum identified under section 1004(a) of that Act was extended until September 30, 2025; and with respect only to the electromagnetic spectrum identified under section 90008(b)(2)(A)(ii) of the Infrastructure Investment and Jobs Act (IIJA) was extended until November 15, 2028. Absent an extension of its auction authority for spectrum, the Commission’s authority to grant licenses or construction permits for stations using spectrum subject to mutually exclusive application using competitive bidding will terminate on March 9, 2023, except for spectrum identified pursuant to the Spectrum Pipeline Act of 2015 and IIJA. The budget proposes to extend the FCC’s auction authority for ten years through 2033. 10 Summary of FYs 2022 - 2024 FTEs and Funding by Bureaus and Offices (Dollars in Thousands) FY 2022 FY 2023 FY 2024 Bureaus and Offices Estimates to 1 Actuals 1 Enacted 1 FTEs FTEs FTEs Congress Chairwoman and Commissioners 23 $4,885 25 $6,692 25 $6,987 Consumer & Government Affairs Bureau 107 $22,009 119 $25,429 119 $26,589 Enforcement Bureau 180 $39,452 212 $47,385 212 $49,569 International Bureau 82 $17,112 88 $18,846 88 $19,751 M edia Bureau 125 $24,417 133 $25,723 133 $26,959 Public Safety & Homeland Security Bureau 93 $20,286 104 $24,523 104 $25,682 Wireless Telecommunications Bureau 149 $13,038 158 $16,007 158 $16,772 Wireline Competition Bureau 149 $31,998 172 $35,762 172 $37,481 Office of Administrative Law Judges 4 $699 4 $762 4 $798 Office of Communications Business Opportunities 9 $2,022 13 $2,175 13 $2,279 Office of Economics and Analytics 109 $16,201 134 $18,311 134 $19,130 Office of Engineering & Technology 73 $13,847 79 $15,496 79 $16,219 Office of General Counsel 65 $16,364 79 $20,210 79 $21,120 Office of Legislative Affairs 8 $1,693 8 $1,797 8 $1,883 Office of Managing Director 181 $114,370 192 $114,891 192 $122,602 Office of Media Relations 12 $2,478 12 $2,593 12 $2,710 Office of Workplace Diversity 6 $1,019 8 $1,459 8 $1,526 Subtotal 1,375 $341,890 1,540 $378,061 1,540 $398,057 Office of Inspector General 46 $9,646 60 $12,131 60 $12,686 Total - Salaries & Expenses2 1,421 $351,536 1,600 $390,192 1,600 $410,743 1The FTE numbers include the spectrum auctions program FTEs. 2The Commission’s other budget authorities are summarized on page 49. The Commission is responsible for the overall management, oversight, and administration of the Universal Service Fund (USF), including all USF policy decisions. All USF related activities are currently funded by regulatory fees. The Universal Service Fund Activities and Costs section on pages 17 through 19 provides more details related to the Commission’s USF activities and related costs. 11 FTEs - Historical and Estimated Fiscal Years 1990 – 2024 12 Summary of Changes - Regulatory Fees (Offsetting Collections) (Dollars in Thousands) FY 2024 TOTAL NET CHANGE FY 2023 Estimates to Regulatory Fees - Offsetting Collections: Enacted Congress Amount Percent Commission $378,061 $398,057 $19,996 Office of Inspector General $12,131 $12,686 $555 Total Spending Authority - Offsetting Collections $390,192 $410,743 $20,551 5.3% Full-Time Equivalents (FTEs) - Commission1 1,540 1,540 0 FTEs - Office of Inspector General 60 60 0 Total Full-Time Equivalents 1,600 1,600 0 Explanation of Changes - Regulatory Fees (Offsetting Collections) FY 2023 Appropriated & Enacted- Regulatory Fees $390,192 FY 2023 Base Reductions: FY 2023 One-Time Investment Request IT- Critical Infrastructure Upgrade -$1,080 Total - FY 2023 Base Reductions -$1,080 FY 2024 Base Before Increases, Adjustments & One-Time Investments $389,112 FY 2024 Base Increases: Enterprise and Fraud Risk Management and Internal Control Support $1,000 Enterprise Data Platform $500 Data Collection System for Bureaus and Offices $500 Multi-Factor Authentication of Public Facing System $450 Subtotal - FY 2024 Base Increases $2,450 FY 2024 Base Adjustments: Compensation & Benefits $14,220 Non-Salary Inflationary Increase $1,961 Subtotal - FY 2024 Base Adjustments $16,181 FY 2024 Adjusted Base Before One-Time Investment Requests $407,743 FY 2024 - One-Time Investment Requests: Enterprise Data Platform $2,000 Data Collection System for Bureaus and Offices $1,000 Subtotal - FY 2024 One-Time Investment Requests $3,000 FY 2024 Total Request $410,743 TOTAL NET CHANGE $20,551 5.3% 1Includes Spectrum Auctions Program FTEs. 13 Narrative Explanation of Changes - Salaries and Expenses - Regulatory Fees Personnel Compensation and Non-Salaries Inflationary Increase to Base: $16,181,000 A. Personnel Compensation ($14,220,000) – Pursuant to OMB guidance, the request includes a 5.2 percent increase for personnel compensation and benefits. This increase also includes related increases for the Office of Inspector General (OIG), which total $528,686. B. Non-Salary Inflationary Increase ($1,961,000) – This request provides expected inflationary increases for phones, utilities, printing and reproduction services, contractual services, supplies, travel, training, and other expenses. The total non-salary increase also includes related increases for the OIG, which total $26,314. This increase is developed using an estimated total inflationary rate of approximately two (2) percent. FY 2024 Base Increases ($2,450,000) and One-Time Requests ($3,000,000) for New Investments: $5,450,000 1. Enterprise and Fraud Risk Management and Internal Control Support ($1,000,000) In managing FCC programs such as the Universal Service Fund (USF), Telecommunications Relay Service (TRS) Fund, Spectrum Auctions Program, Affordable Connectivity Program, Emergency Connectivity Fund, and others, management is responsible for and required to comply with various General Accountability Office (GAO) and Office of Management and Budget (OMB) guidance such as OMB A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control; GAO’s A Framework for Managing Fraud Risks in Federal Programs; and OMB M-21-19, Requirements for Payment Integrity Improvement. With an ever-growing risk environment, OMB and GAO have implemented many best practices to help agencies manage, access, monitor and respond to fraud, waste and abuse. The Commission is requesting base funding to hire experts and independent contract support to help manage this emerging growth area within Commission programs. The Commission is seeking experts and independent contract support to: (1) Perform Enterprise Risk Management (ERM) risk assessments, (2) Perform fraud risk assessments, (3) Support ERM and Fraud Risk Management efforts, (4) Identify inherent risks and fraud risks affecting Commission programs, (5) Assess the likelihood and impact of inherent risks and fraud risks, (6) Determine, update, and monitor Commission’s risk appetite and risk tolerance, (7) Examine the suitability of existing controls, fraud controls and prioritize residual risks, (8) Document the programs’ risk profile and fraud risk profile, (9) Perform improper payments risk assessments, (10) Improper payment reporting to OMB, (11) Perform payment recapture audits, and (12) Assist with Single Audit Act reviews and compliance requirements. 2. Enterprise Data Platform ($2,500,000) The FCC plans to expand and enhance an Enterprise Data Platform to address in part statutory and OMB requirements for federal government agencies. This includes a one- time request for $2,000,000, and an ongoing base increase of $500,000 for: (1) addressing the Open, Public, Electronic and Necessary Government Data Act (OPEN Data Act), part 14 of the Foundations for Evidence-Based Policymaking Act (Evidence Act), that requires agencies to publish public government data assets in a machine readable format and to develop and maintain a comprehensive data inventory, and (2) supporting Executive Order (EO) 14028 on Improving the Nation’s Cybersecurity, which requires Federal Government organizations to take action to strengthen national cybersecurity specifically calling for federal agencies and their suppliers “to modernize [their] approach to cybersecurity” by accelerating the move to secure cloud services and implementing a Zero Trust architecture (EO Zero Trust Architecture). This funding will provide resources to incorporate additional datasets and expand the Platform’s capabilities including: the implementation of access controls, tied to the agency’s authentication/single-sign-on tool, to ensure compliance with Zero Trust requirements for commercial or sensitive data; and the creation of an enterprise data catalog, capturing essential information for IT management, Zero-Trust data classification and for the public data inventory required by the Evidence Act. The funding will also support the expansion of the analytic toolset available to users on the Platform, providing a means for data discovery as well as access to various tools, software and scripting languages on the same cloud-based, scalable infrastructure that houses the data. The platform will also support Application Programming Interface (API) for data transfer among systems within the agency and for publication of data, as required by the Evidence Act. Furthermore, over the long run, a modernized consolidated data platform will allow for more efficient IT delivery, reduce tax payers’ cost, increase the Agency’s ability to implement better data governance, and provide improved data quality and analytics. 3. Data Collection System for Bureaus and Offices ($1,500,000) This request includes a one-time increase of $1,000,000, and an ongoing base increase of $500,000. The Commission and policy Bureaus regularly adopt rules to institute new or updated data collections to provide the necessary data to for fact-based policy making and implementation of existing programs. In addition, existing data collections often need updates or modernization, including due to security issues like the Log4j vulnerability. The volume of data collections can outstrip the IT resources we have available to implement them. Access to a secure low-code/no-code platform will allow the Agency to develop and design online data collection forms and interfaces to support Bureaus and Offices that are required by the Commission to conduct and implement data collections. Such a system will support compliance with the EO Zero Trust requirements; provide a secure, central location for data collected by the agency; and allow us to implement data-quality requirements on collections. 4. Multi-Factor Authentication of Public Facing System ($450,000) Per National Institute of Standards and Technology (NIST) Special Publication (SP), all public facing websites/systems require the use of a Multi-Factor Authenticator. An authentication system that requires more than one distinct authentication factor for successful authentication. FCC will leverage LOGIN.GOV to comply with NIST SP requirements for all public facing website/systems. 15 Office of Inspector General Narrative The Office of the Inspector General’s (OIG or the Office) workload continues to increase in all mission-critical areas. The Office continues to focus on increasing mission responsibilities and ensuring appropriate staff levels to keep pace with the workload. OIG has focused on hiring full- time equivalent staff over the past few budget years and this recruitment effort has permitted the Office to engage in a greater number of, and more complex, audits and investigations. We anticipate further growth in 2024. As a result, we plan to hire criminal investigators and general investigators in FY 2024 to support an expanded program of proactive investigations into E-rate and Lifeline providers and recipients and to provide additional law-enforcement capabilities we currently lack. We also plan to fill vacant staff level auditor and investigative attorney positions. We continually gauge the relative merits of any audit and investigation prior to expending valuable resources. The OIG FY 2024 budget request of $12,686,000 reflects a $555,000 increase over the FY 2023 enacted level of $12,131,000. The increase is attributable to a $528,686 increase in salary and benefits and $26,314 in non-salary. OIG Office of Audits (OA) conducts and contracts for the performance of independent and objective audits, inspections, evaluations, and related projects, designed to promote economy, effectiveness and efficiency in FCC programs and operations, and to prevent and detect fraud waste and abuse. As of September 30, 2022, OA had completed five projects and an additional six are currently in process. OA plans to complete more than 40 audits, inspections, and evaluations over the next five years, not including, any unforeseen special projects and Congressional requests. OIG Office of Investigations (OI) matters cover a wide range of topics touching on myriad aspects of the FCC’s mission and programs. Most significantly, our investigations often address allegations of criminal misconduct or civil fraud in the Commission’s Universal Service programs. We deal with complex investigations, large criminal conspiracies, and matters involving complex financial transactions throughout the United States and its territories. As of September 30, 2022, OI had 48 open cases. Working with the Department of Justice, in recent years, OI has recovered tens of millions of dollars of government funds and saved the government hundreds of millions of additional dollars, resulting from criminal and civil fraud cases that have been successfully prosecuted or settled. In the upcoming year, in addition to our ongoing activities, we also expect to conduct investigations to fulfill our mandate to deter and detect fraud, waste and abuse in the COVID-19 Telehealth program, the Affordable Connectivity Program and the Emergency Connectivity Fund Program and other matters that are a direct result of changes to the FCC’s subsidy programs in response to the coronavirus pandemic. In compliance with the IG Reform Act of 2008, this FCC OIG FY 2024 budget request includes: . A fair share ratio in the amount of $33,961 for contribution to the Council of the Inspectors General on Integrity and Efficiency, . Funds to support IGNet Management Services, and . Training funds in the amount of $92,451. 16 Universal Service Fund Activities and Costs The Commission is responsible for the overall management, oversight, and administration of the Universal Service Fund (USF). The Commission develops policies for the USF, and the Universal Service Administrative Company (USAC) collects and delivers funding through four programs – Schools and Libraries (E-Rate), Rural Health Care, Lifeline, and High Cost – focused on places where broadband and connectivity needs are critical. These programs serve people in rural, underserved, and difficult-to-reach areas. The Commission works with USAC, as administrator of the USF, to review USAC’s administrative expenses and also to oversee the effectiveness of USAC’s internal controls around USAC’s program management, procurements, information technology projects, and personnel processes. The descriptions below provide additional information about how the Commission’s various Bureaus and Offices work together as the agency carries out its USF management and oversight responsibilities. Office of Managing Director. The Office of Managing Director (OMD) is responsible for all USF management and administrative activities, including finance, accounting, procurement, information technology, and audits of beneficiaries and contributors. OMD provides instruction and oversight to USAC on these issues. Wireline Competition Bureau. The Wireline Competition Bureau (WCB) oversees USF policy and provides guidance on the applicability and interpretation of the Commission’s USF rules, orders, and directives to USAC and to stakeholders. WCB also is primarily responsible for USF rulemaking proceedings, appeals of USAC decisions, requests for waivers of the Commission’s USF rules, petitions for USF declaratory rulings, interactions with the Federal-State Joint Board on Universal Service, and preparation and publication of USF information in the Universal Service Monitoring Report. Wireless Telecommunications Bureau. The Wireless Telecommunications Bureau (WTB), in coordination with WCB, developed policy and procedures concerning the Mobility Fund and the Alaska Plan for mobile, which represent universal service support mechanisms dedicated exclusively to mobile wireless services. Office of Economics and Analytics. The Office of Economics and Analytics (OEA), in coordination with WCB, oversees reverse auctions policy and implementation for distributing high-cost universal service support. and in coordination with WTB and WCB developed the proposal for the 5G Fund for Rural America. Office of General Counsel. The Office of General Counsel (OGC) oversees issues relating to litigation and settlements and serves as the Commission’s chief legal advisor, including on issues pertaining to USF matters. Enforcement Bureau. If USAC or a Commission Bureau or Office identifies a possible violation of the Communications Act or a Commission rule, order, or directive, the matter is referred to the Enforcement Bureau (EB) for possible investigation and administrative enforcement action, including issuing forfeitures. EB pursues potential investigations of USF-related matters from other sources of information as well. In addition, EB is authorized to suspend and debar persons 17 from participating in the universal service mechanisms upon a criminal conviction of or civil judgment for fraud against a USF program. Office of Inspector General. The Office of Inspector General (OIG) conducts audits, evaluations, and inspections of USF programs and operations, as well as program service providers and beneficiaries designed to prevent and detect fraud, waste, and abuse. These oversight activities and related initiatives help promote economy, effectiveness, and efficiency of the USF. USF Activities The Commission’s continued budgetary and programmatic focus for the universal service programs includes: (1) promoting policies to help bring affordable, reliable, high-speed broadband to 100 percent of the country, (2) eliminating waste, fraud, and abuse, and (3) promoting efficiency, accountability, and fiscal responsibility. With these priorities in mind, the Commission targets support to deliver, expand, and maintain voice and broadband service to high cost and rural areas, low-income consumers, and schools and libraries. Under the Connect America Fund, as of November 2022, the Commission has authorized $1.483 billion in support over 10 years to 193 winning bidders of reverse auctions to provide fixed broadband and voice services to over 708,494 locations in 45 states. As part of its Rural Digital Opportunity Fund, the Commission used a reverse auction mechanism to distribute support for the provision of fixed broadband and voice services. As of November 10, 2022, over $5.7 billion in support has been Authorized to deploy voice and broadband service to over 3.27 million model locations. In October 2020, the Commission adopted the 5G Fund for Rural America to replace Mobility Fund Phase II. The 5G Fund Phase I auction will award up to $8 billion over 10 years to deploy 5G service in areas otherwise unlikely to receive timely 5G deployment. The 5G Fund Phase II auction budget is presently set at $1 billion plus the remainder of the Phase I budget. In the Lifeline program, the Commission’s primary goals are to: (1) continue implementation of the modernization of the Lifeline program to support affordable, high-speed internet access for our nation’s poorest families; and (2) ensure fiscal responsibility and combat waste, fraud, and abuse so Lifeline USF dollars spent reach the consumers Lifeline was created to help. Actions to accomplish these goals include using a unified interface to independently process eligibility verification and recertification of Lifeline subscribers, as well as interconnected verification with other agency and state eligibility databases to improve program controls. The Commission also anticipates working towards the implementation of the Safe Connections Act, which may impact the Lifeline program. In the E-Rate program, the Commission is committed to ensuring eligible schools and libraries can obtain affordable, high-speed broadband services and internal connections that are necessary to connect today’s students and library patrons with next-generation learning opportunities and services. The E-Rate program has a cap of $4.46 billion for the current funding year, adjusted annually for inflation. 18 Finally, in the Rural Healthcare program, the Commission remains committed to promoting telehealth by providing financial support to eligible health care providers for broadband and telecommunications services. The Rural Healthcare program has a cap of $637.7 million for the current funding year, adjusted annually for inflation. The chart below shows the estimated costs that the Commission will incur in overseeing USF activities, which includes costs incurred by the OIG. (Dollars in Thousands) Fiscal Years FY 2022 FY 2023 FY 2024 FCC's USF Activities Cost1 $19,102 $19,484 $19,874 Full-Time Equivalent (FTEs) 80 80 80 1 Amount shown are projections based on actual cost. The chart below shows the total number of Commission FTEs working on USF activities by bureau and office for FY 2022 based on extrapolated data. Number of FCC FTEs Working On USF Activities By Bureau and Office FTEs Wireline Competition Bureau 41 Office of Economics & Analytics 19 Office of Inspector General 1 Enforcement Bureau 8 Wireless Telecommunications Bureau 4 Office of General Counsel 4 Office of the Managing Director 2 Public Safety and Homeland Security Bureau 1 Total FTEs 80 Crosswalk of USF Outlays to FCC Strategic Goals In FY 2022, USF made outlays totaling $7.854 billion. These outlays were allocated to the following FY 2022 strategic goal: (Dollars in M illions) Applicable FY 2022 Strategic Goals Outlay Amount Percent Pursue a "100 Percent" Broadband Policy $7,854 100.0% Total $7,854 100.0% As of September 30, 2022 19 Overall Status of Audit Recommendations The chart below shows the number of audit recommendations outstanding from various audits conducted by FCC’s Office of Inspector General (OIG) and the Government Accountability Office (GAO) at the end of each fiscal year. The numbers shown below exclude those recommendations for which the Commission has already submitted information to GAO and OIG requesting closure of the recommendation. The count also excludes those recommendations that the Commission has determined to close as not implemented. Outstanding Audit Recommendations 300 255 250 50 200 189 150 100 103 90 159 100 205 81 75 70 47 32 57 62 39 48 50 40 44 53 58 42 30 46 27 30 0 18 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 OIG GAO FY 2023 as of December 31, 2022. 20 SPECTRUM AUCTIONS 21 This page is intentionally left blank 22 Spectrum Auctions Program - Explanation of Requested Change The Federal Communications Commission requests $136,167,000 for the Spectrum Auctions Program for FY 2024, which is an increase of $3,936,000 from FY 2023 appropriated amount of $132,231,000, as detailed below. Funding at this level will enable the Commission to continue its efforts to make more spectrum available for 5G, to continue the implementation of the Infrastructure Investment and Jobs Act of 2021, the Spectrum Pipeline Act of 2015 and certain provisions of the RAY BAUM’S Act, including the MOBILE NOW Act, as well as the Consolidated Appropriations Act of 2021; to continue the close-out of post-broadcast incentive auction (BIA) work related to displacement, repacking, and reimbursing from the TV Broadcaster Relocation Fund to broadcasters (TVBRF), multichannel video programming distributors (MVPDs), Low Power TV (LPTV), TV translator stations, and FM broadcast stations for reasonable relocation costs incurred because of the Commission’s broadcast incentive auction, and to upgrade and improve Commission’s auction infrastructure in preparation for future auctions. (Dollars in Thousands) FY 2024 TOTAL NET CHANGE FY 2023 Estimates to Enacted Amount Percent Congress Spectrum Auctions Program Cost Recovery $132,231 $136,167 $3,936 3.0% Explanation of Changes FY 2023 Appropriated & Enacted $132,231 FY 2024 Base Before Adjustments $132,231 FY 2024 Base Adjustments: Compensation & Benefits $2,156 Non-Salary Inflationary Increase $1,780 Subtotal - FY 2024 Base Adjustments $3,936 FY 2024 Total Request $136,167 TOTAL NET CHANGE $3,936 3.0% 23 Spectrum Auctions Program The Omnibus Budget Reconciliation Act of 1993, P.L. 103-66 (Act), required the Commission to auction licenses for portions of the electromagnetic spectrum used for certain services, replacing the former lottery process. The Act further requires the Commission to ensure that small businesses, women, minorities, and rural telephone companies have an opportunity to participate in the competitive bidding process. The Commission initiated regulations implementing the spectrum auction authority granted by the legislation and conducted its first round of auctions in July 1994. As of January 2023, the total amount generated for broader government use and deficit reduction since 1994 exceeds $233.5 billion. The original spectrum auction authority was scheduled to expire in FY 1998; however, it was extended through FY 2007 in the Balanced Budget Act of 1997, P.L. 105-33; extended through FY 2011 by the Deficit Reduction Act of 2005, P.L. 109-171; extended through FY 2012 by the DTV Delay Act (2012), P.L. 111-4; extended through FY 2022 by the Middle Class Tax Relief and Job Creation Act of 2012, P.L. 112-96; extended through December 16, 2022 by the Continuing Appropriations and Ukraine Supplemental Appropriations Acct, 2023, P.L. 117-180; extended through December 23, 2022 by the Further Continuing Appropriations and Extensions Act, 2023, P.L. 117-229; extended through December 30, 2022 by the Further Additional Continuing Appropriations and Extensions Act, 2023, P.L 117-264; and extended through March 9, 2023 by the Consolidated Appropriations Act, 2023, P.L. 117-328. The Commission’s authority to conduct new auctions and grant a license or permit under section 309(j) of the Communications Act expires March 9, 2023, except that, with respect to the electromagnetic spectrum identified under section 1004(a) of the Spectrum Pipeline Act of 2015, such authority shall expire on September 30, 2025, and with respect to the electromagnetic spectrum identified under section 90008(b)(2)(A)(ii) of the Infrastructure Investment and Jobs Act (P.L. 117- 58), such authority shall expire on November 15, 2028, seven (7) years after the date of enactment of that Act. The Commission is authorized to retain funds from auction revenues to develop, implement, and maintain the auctions program. These funds cover the personnel and administrative costs required to plan and execute spectrum auctions; operational costs to manage payments and collections activities; development, implementation, and maintenance of all information technology systems necessary for auctions operations, including development of a combinatorial bidding system; and a proportional share of the general administrative costs of the Commission. This budget submission assumes that the auctions program will continue to recover the costs of conducting auction activities from spectrum license auction receipts as the Commission continues to use auctions as a licensing mechanism for spectrum-based communications services. The Commission’s FY 2023 Appropriations language capped the auctions program obligations at $132,231,000. The Commission’s request of $136,167,000 for FY 2024 is an increase of $3,936,000 or 3 percent. This is due to an inflationary increase in salary costs and non-salary costs. Funding at Requirement C level will enable the Commission to: • implement the Infrastructure Investment and Jobs Act (Infrastructure Act) by taking steps toward the potential auction of licenses in the 3.1-3.45 GHz band; 24 • implement the Spectrum Pipeline Act of 2015 by, for example, taking steps to auction 30 megahertz identified pursuant to the Act and continuing the steps necessary to promote use of the 3.5 GHz band; • implement the Consolidated Appropriations Act of 2021 for 5G Act of 2020 by supporting the transition of the 3.45 GHz band and the relocation of secondary radiolocation users; • continue ongoing activities and taking other steps necessary to implement the RAY BAUM’S Act, including the Making Opportunities for Broadband Investment and Limiting Excessive and Needless Obstacles to Wireless Act (MOBILE NOW Act) provisions regarding identifying, making licenses available through auction, and transitioning spectrum for mobile and fixed wireless broadband use in, among other bands, the 3.7 GHz- 4.2 GHz range; • continue the close-out process for the post-BIA work related to displacement, repacking, and reimbursing from the TVBRF to broadcasters and MVPDs for their costs to implement the results of the BIA; and • upgrade and improve its auctions program infrastructure and security posture in preparation for future auctions authorized by the Infrastructure Act and the Spectrum Pipeline Act. In addition, as the demand for spectrum for new technologies extends to spectrum bands previously assigned for legacy applications, creative approaches must be found to accommodate existing licensees and operations while expanding opportunities for access by new users. Spectrum Pipeline Act of 2015, RAY BAUM’S Act, and Other Auction Program Improvements The Spectrum Pipeline Act of 2015 (Pipeline Act) requires the Commission to auction 30 megahertz of spectrum identified by the Secretary of Commerce for reallocation from Federal use to non- Federal use, shared use, or a combination thereof. The Pipeline Act also appropriates funds from the Spectrum Relocation Fund to support activities by Federal entities to improve the efficiency and effectiveness of Federal use of spectrum in order to make Federal spectrum available for non- Federal use, shared use, or a combination thereof. The Pipeline Act requires the FCC, as part of its role on the interagency Technical Panel established within the National Telecommunications and Information Administration (NTIA), to review Federal entities’ proposals for funds for these purposes. Additionally, the Pipeline Act requires the Commission to submit four reports to Congress. In November 2018, the Commission submitted a first report with an analysis of its new rules for the innovative Citizens Broadband Radio Service in the 3550-3700 MHz band. That same month, the Commission submitted a second report analyzing proposals to promote and identify additional bands that can be shared under such rules and identifying at least 1 gigahertz of spectrum between 6 GHz and 57 GHz for such use. By January 1, 2024, in coordination with the Assistant Secretary of Commerce for Communications and Information, the Commission must submit a third report that identifies at least an additional 50 megahertz of spectrum below 6 GHz for potential auction. Also, a fourth report which identifies at least another additional 50 megahertz of additional spectrum below 6 gigahertz for potential auction must be submitted by January 1, 2024. The latter two reports must contain an assessment of the Federal operations in such spectrum, an estimated timeline for the competitive bidding process, and a proposed plan for balance between unlicensed and licensed use. 25 The RAY BAUM’S Act amended the Pipeline Act to require notice and comment for certain Pipeline Act reports and to direct the Commission to undertake numerous rulemakings and initiatives related to potential repurposing, reallocation, sharing, or auction of spectrum bands. The latter directive included a requirement that the Commission work with NTIA to identify an additional 255 megahertz of spectrum for mobile and fixed wireless use by December 31, 2022. To fulfill these statutory requirements and enhance the Commission’s ability to execute upcoming auctions, auctions funding will also be used for the following that entail extensive work to be performed during FY 2024: • 3.1-3.45 GHz Band – The Infrastructure Investment and Jobs Act of 2021 (P.L. 117-58), among other things, requires the Commission, in consultation with the Assistant Secretary of Commerce for Communications and Information, to begin a system of competitive bidding for frequencies within 3.1-3.45 GHz band identified for shared use by federal and non-federal users by the Departments of Commerce and Defense no sooner than November 30, 2024. The development of the auction and related work will require Commission staff resources in FY 2024. • 3.5 GHz Auction and Post-Auction Implementation – In 2018, the Commission updated its service rules for licenses in the 3550-3650 MHz portion of the 3.5 GHz band, which were awarded through an auction. Bidding in Auction 105 began on July 23, 2020 and concluded on August 25, 2020. On September 2, 2020, the Commission announced that 228 bidders won a total of 20,625 licenses, for $4.5 billion in net bids. Due to the characteristics of and use cases for licenses in this band, bidding in this auction had a novel set of requirements that required the Commission to develop new auction procedures and software. In addition, the nature of the licenses required significant software changes. Long-form license applications were filed just before the end of 2020. Since then, Commission staff have undertaken the statutorily required process to evaluate and grant such applications, where warranted. In addition, the Commission will have an ongoing need to interface with the Spectrum Access System Administrators (SASs), which manage the dynamic spectrum sharing environment in the 3.5 GHz band, as well as the Environmental Sensing Capability (ESC) operators, which facilitate federal incumbent protection in the band. The Commission also will have an ongoing need to test and verify the operational capabilities of current and future SASs and ESCs, as discussed below. Successful implementation of the unique sharing model adopted in the band will provide the American consumer with access to additional spectrum resources. • 3.7-4.2 GHz Auction and Post-Auction Implementation – Bidding in Auction 107, an auction of flexible-use licenses for 280 megahertz of spectrum in this band, began on December 8, 2020 and concluded on February 17, 2021. On February 24, 2021, the Commission announced that the auction raised a total of $81.1 billion in net bids and $81.2 billion in gross bids, with 21 bidders winning all 5,684 licenses offered in the auction. Winning bidders were required to file post-auction long-form applications by March 10, 2021. Since then, Commission staff have completed the statutorily required process to evaluate and grant such applications, where warranted. The Commission is overseeing and will continue to oversee the process of transitioning incumbent Fixed Satellite Services (FSS) out of the 280 megahertz that has been auctioned in order to enable new flexible-use licensees to deploy. Under the transition process adopted by the Commission, overseeing this process will involve Commission staff resources in FY 2024. 26 • 3.45-3.55 GHz Band – In a March 2021 Second Report and Order, the Commission reallocated the 3.45-3.55 GHz band to make 100 megahertz of spectrum available for flexible use and adopted a framework for the 3.45 GHz band that will enable robust commercial use by an array of service providers, while also ensuring that federal incumbents are still protected from harmful interference where and when they require continued access to the band. Pursuant to the requirements of the Commercial Spectrum Enhancement Act, the Commission commenced bidding in Auction 110—an auction of licenses in the 3.45 GHz band—on October 5, 2021. The Commission announced the conclusion of the auction and winning bidders on January 14, 2022. Since then, Commission staff have completed the statutorily required process to evaluate and grant such applications, where warranted. Performing post-auction activities, including transitioning incumbent secondary users, will potentially require Commission staff resources in FY 2024. • 2.5 GHz Band (2496-2690 MHz) – On July 10, 2019, the Commission released a Report and Order modernizing the 2.5 GHz band and making additional spectrum available for 5G and other advanced wireless services. To this end, the Commission eliminated the legacy Educational Broadband Service (EBS) eligibility requirements, educational use requirements, and leasing restrictions in the band. The Commission also established a priority filing window providing Tribal Nations with a one-time licensing opportunity for unassigned 2.5 GHz spectrum over their rural Tribal lands. The Commission has so far issued 336 licenses to eligible Tribal entities enabling them to address the communications needs of their communities. Finally, the Commission decided that any unassigned spectrum remaining post-window would be made available via competitive bidding in a future auction. The Commission commenced bidding in Auction 108 for overlay licenses in the 2.5 GHz band on July 29, 2022. On September 1, 2022, the Commission announced that the auction raised over $419 million in net winning bids with 63 bidders winning a total of 7,872 licenses. Winning bidders were required to file post-auction long-form applications by September 16, 2022. The Commission announced the grant of 650 licenses on December 1, 2022 and additional licenses were granted on January 5 and March 1, 2023. Certain post-auction activities requiring Commission staff resources, including those related to the Rural Tribal Priority Window, may continue into FY 2024. • FM broadcast service construction permits – Pending the further development of the Commission’s upcoming auction schedule, the Commission is considering an auction of FM broadcast service construction permits in FY 2023 or FY 2024. The initial public notice announcing this FM auction would list the specific vacant FM allotments for which the Commission would offer construction permits in the auction. Conducting the auction and performing pre-auction and post-auction activities will require Commission staff resources in FY 2024. • Other Auction Development and Implementation – The Commission needs to make additional changes to the auction bidding and licensing systems to prepare for auctions of spectrum bands that may become available for licensing based on spectrum planning currently underway, including other bands identified by the Mobile Now Act, the 30 megahertz required by the Pipeline Act, and bands identified by the Infrastructure Act. The Commission and its federal partners, including NTIA and the Department of Defense, are currently collaborating to explore additional mid-band 5G opportunities, including ongoing work streams in NTIA’s Policy and 27 Plans Steering Group (PPSG). The PPSG provides a forum for the Commission and its federal partners to address spectrum policy issues that affect the use of spectrum by non-federal and federal users. The PPSG is exploring other bands that could potentially be made available for commercial 5G use, including on a shared basis, consistent with statutory directives. The Commission expects these activities will extend into FY 2024. • SAS/ESC Testing for 3.5 GHz – The Spectrum Access System (SAS)/Environmental Sensing Capability (ESC) are necessary components to facilitate additional non-federal access to spectrum in the 3.5 GHz band and are necessary to protect incumbent Federal operations. Six SASs have been authorized for full commercial use in the 3.5 GHz band for five-year terms, and sensor deployment and four ESC operators have been approved for commercial operation. In FY 2022, the Commission enabled Priority Access Licensees to enter into light-touch leases and spectrum manager leases with notification to a SAS administrator. The Commission will continue to monitor and analyze the operations of approved SASs and ESCs to ensure compliance with the rules. Other entities have applied to be SAS administrators and ESC operators. The Commission will need to test and evaluate these new SASs and ESCs prior to approving them for use in the 3.5 GHz band. The Commission may also need to perform additional testing on existing SASs and ESCs to ensure that any future system upgrades or modifications comply with the rules. This work will continue into FY 2024. • Optimization for New Spectrum Opportunities – The optimization team will help the Commission analyze and study options for using complex mathematical optimization techniques for making new spectrum licenses available through new auction formats including overlay licenses, transitioning incumbents out of repurposed spectrum bands while assuring continued service to their customers, and other ways to implement spectrum sharing scenarios, to ensure we are maximizing the amount of useful commercial spectrum. They will develop optimal band plans accommodating incumbent uses and demonstrate the value of additional clearing or sharing as necessary. This research will also provide statistical and technical computation, analysis, simulation, and modeling, including geographic data and mapping, related to auctions. • Spectrum Visualization Tools – Public Facing and Internal – The Commission continues to develop spectrum visualization tools to provide the public and government agencies with insights into how spectrum utilization could be modified to meet growing demand for wireless broadband services, including through licenses assigned by auction. These tools will help satisfy the public’s significant interest in understanding who has licensed rights to different spectrum bands at different locations and provide the ability to manipulate and analyze this data. Federal agencies also would benefit from this information as they consider sharing/relocation options. Additionally, it is critical for internal Commission teams to have robust data, including mapping, to understand coverage and operations across the country. For example, in anticipation of the auction of overlay licenses in the 2.5 GHz band (Auction 108), on March 21, 2022, the Commission announced the launch of a mapping tool for use by potential bidders to help assess whether and to what extent there is unassigned 2.5 GHz spectrum available in any U.S. county. This work will continue in FY 2024. • Auction Application System (formerly known as Integrated Spectrum Auctions System (ISAS)) Enhancement/Modernization – The Commission must modify the application forms for participation in each auction in response to the auction’s unique requirements. Work to 28 modernize the auction application system will provide the foundation for new implementations of the primary auctions application software, including providing the ability to customize the form to support future auctions based on novel license eligibility requirements and auction formats, while improving security. This work, including updates to implement new spectrum and auction policies will continue through FY 2024. Universal Licensing System Modernization – The Commission must modernize its licensing database and infrastructure to implement complex new service rules, as well as replace outdated technology to improve reliability, security, and access to data. The modernized system would enable the FCC to better support new auctions, inventory existing auction licenses, and re-auction spectrum. Development to date has focused on Short Term Authorizations for market-based licenses while requirements definition has concentrated on regular, auction market-based licenses, site-based licenses, and personal radio services. In FY 2024, the work will focus on the system’s supporting infrastructure, and preparation for incremental system releases. Continued Close-Out of Post-Broadcast Incentive Auction Transition Work The Incentive Auction Closing and Channel Reassignment Public Notice, released on April 13, 2017, announced the completion of the first-ever spectrum incentive auction. The BIA made available 84 megahertz of low-band spectrum for commercial and unlicensed wireless use by repurposing a portion of the broadcast TV band. The total net winning bids of the auction were $19.3 billion. Pursuant to the Middle Class Tax Relief and Job Creation Act of 2012, the auction proceeds, among other things, were directed to fund $1.75 billion, and the Reimbursement Expansion Act of 2018 (REA) funded the remainder, of a $2.7 billion TVBRF. The TVBRF reimburses entities for their reasonable expenses incurred as a result of stations being involuntarily relocated to new channels. Specifically, 957 repacked full power and Class A stations, 90 FM stations, 881 low power and translator TV stations (LPTV/translator stations), 181 MVPDs participate in the TVBRF. All of the repacked broadcast TV stations transitioned off of their pre- auction channels as of September 2020, though not all had completed construction of their permanent facilities. As of March, 7 2023, 7, full power stations had not completed construction of final facilities and therefore remained on interim facilities. In addition, some repacked stations, who have already vacated their pre-auction channel, have ongoing construction to remove old antennas and equipment and take other follow-up efforts, the reasonable costs of which are also reimbursable from the TVBRF. Certain LPTV/translator stations are still constructing displacement facilities. The following are a list of highlights from the activities that will continue to take place in FY 2024. • Licensing for Broadcasters Being Relocated – The Commission will continue to process applications and licenses to cover, as well as possible technical modifications determined to be necessary once the stations transition and test their new facilities. The process will require Commission staff to continue to monitor broadcaster progress, identify and resolve transition- related problems and challenges, process applications, and review and verify information in FY 2024. Concluding the post-auction transition will also continue to require software, cloud computing resources, and assistance from skilled computer scientists, software engineers, and technology experts. 29 • Displaced LPTV and TV Translator Station Licensing – A Special Displacement Window closed on June 15, 2018, for operating LPTV/translator stations displaced due to the new 600 MHz wireless band and the post-auction repacking process for full power and Class A stations. More than 2,000 applications were granted. Broadcast licensing for LPTV/translator stations is performed in two steps: (1) application review and grant of a CP and (2) application review and grant of a license to cover. LPTV/translator stations on channels 39-43 and 47-51 were allowed to continue operating until a wireless operator sent them 120-day notice that they were going to commence operations. Some displaced stations have not yet been required to transition. The Commission will continue to process such applications as they are filed. • FM Station Licensing – FM radio spectrum was not subject to the post-Incentive Auction repacking process. Some FM stations with antennas on or near a tower supporting a repacked TV antenna may be affected if, for example, the FM antenna must be moved, temporarily or permanently, to make it possible for the co-located TV station to complete its construction of facilities on the tower. In such situations some FM stations must apply for a construction permit or special temporary authority to operate on an interim basis during a construction project on the station’s tower. • Fund Administration and Reimbursement Process – The Commission has engaged a contractor (Fund Administrator) to assist in administering the TVBRF. The Fund Administrator has extensive experience in television broadcast engineering and federal funds management to review cost estimates. The Fund Administrator reviews the reimbursement estimates and invoices for expenses incurred, including the accompanying supporting documentation to validate that they reflect costs that may be reasonably incurred to relocate television service from a station’s original channel to its reassigned channel or, in the case of MVPDs, to continue to carry the broadcast signal of a reassigned broadcast station, or in the case of FM stations to reasonably minimize disruption of service during the repack. Requests for additional information are sent to entities where reasonableness cannot be determined, where necessary documentation appears to be missing, or where the requested reimbursement appears to be excessive. The Fund Administrator recommends approval or rejection of each estimate and invoice. The Commission reviews those recommendations and approves estimates and pays approved invoices. Allocations based on the amount of an entities’ verified estimates obligate funds in the TVBRF. Invoices are paid for approved incurred expenses as a portion of allocated amounts. The REA permits the Commission to obligate funds in the TVBRF until July 3, 2023 and the Commission may reimburse certain stations from obligated funds for a period of five years thereafter. Reimbursement payments will continue in FY 2024 as reimbursement-eligible entities continue to submit their invoices against previously obligated reimbursement funds. • Close Out Procedures for TV and FM Broadcasters and MVPDs –Close out procedures for stations that continue to work on construction projects for repacked or displacement facilities will be subject to close-out procedures after July 3, 2023, and during FY 2024. When an entity completes its construction project it will submit all remaining supporting documentation and requests for reimbursement to the Commission and inform the Commission that the submissions are complete. The entity will receive a financial reconciliation statement from the Fund Administrator that specifies verified, estimated amounts; allocated amounts; amounts requested for reimbursement; amounts disbursed by the Commission; and information outlining any additional amounts payable by the Commission to the entity or owed to the 30 Commission by the entity. If an overpayment is discovered, the entity will be required to return the excess amount to the Commission and detailed instructions for prompt submission of such overpayments will be provided to the entity by the Commission. Each station will review the financial reconciliation statement for accuracy and completeness and, upon concurrence, return an executed version of the financial reconciliation statement to the Fund Administrator. The Bureau will then provide the station with a close-out letter and issue any payments currently due, subject to the station’s available allocation. The close-out letter will serve as the official notice of account close-out, include a summary of any financial changes that occurred during the interim closing period, and remind entities of their ongoing document retention requirements. • Post-Implementation Site Visit Program. To prevent fraud, waste, and abuse, and thereby maximize the amount of money available for reimbursement post-implementation site visits validate the existence and operational status of post-transition equipment for which the entity received reimbursement, and ensure that such equipment is being used by the fund participant for its intended purpose. The Fund Administrator will visit a randomly selected, statistically valid sample of TVBRF participants and may select additional participants for site visits based on specific facts or circumstances. Site visits will continue in 2023. Based on the results of these site visits and the continuing reimbursement process, additional work may be required in FY 2024 and until all entities have completed close out procedures. • Audits, Data Validations, and Disbursement Validations – Audits, data validations, and site visits are essential tools in preventing waste, fraud, and abuse, and use of these measures will maximize the amount of money available for reimbursement. Throughout the reimbursement period, the Media Bureau together with the Fund Administrator performs disbursement validations in order to confirm that entities receiving reimbursement funding for third party services have in fact disbursed monies received from the Fund in a manner consistent with representations made to the Commission in the Reimbursement Form. Also, a third-party audit firm acting on behalf of the Commission may conduct audits of entities receiving disbursements from the Reimbursement Fund, and these audits may occur both during and following the Reimbursement Period. The Commission has determined that Commission staff and/or a third- party auditor will continue to validate expenses after the reimbursement period ends, consistent with the Commission’s obligation to recover improper payments, including after the close-out period. • Submission of Banking Information – The Commission requires all eligible entities who will receive TVBRF payments to provide detailed banking information that is both notarized on paper form and submitted in a secure electronic system. The Commission reviews this information prior to making any payments. Eligible entities may revise their banking information throughout the reimbursement period. FCC Obligations in Support of the Auctions Program Pursuant to 47 U.S.C. §309(a), the Commission must provide its authorizing and appropriations committees in Congress with a detailed report of the FCC’s obligations in support of the auctions program for each fiscal year of operation. The following table shows available auction cash for recent fiscal years. 31 Spectrum Auctions Activities Fiscal Years 2019 - 2023 Dollars in Thousands FY 2019 FY 2020 FY 2021 FY 2022 FY 20233 Beginning Cash Balance as of October 1 $3,508,741 $3,378,640 $7,731,130 $84,938,157 $3,098,809 Current Year Net Cash 2,598,061 6,845,791 77,926,671 (81,370,968) 326,172 Less: Deferred Revenue as of September 301 (2,725,948) (2,491,088) (113,267) (466,496) (353,997) Deposit Liability - Refunds as of September 302 (2,214) (2,213) (606,377) (1,884) 4,422 Available Cash as of September 30 $3,378,640 $7,731,130 $84,938,157 $3,098,809 $3,075,406 1Cash associated with licenses that have not been granted as of stated date. 2Upfront auction deposits not refunded as of stated date. 3The available cash balance is as of December 31, 2022 Summary of Distribution of Resources - Spectrum Auctions Program SPECTRUM AUCTIONS COST RECOVERY REIMBURSABLE AUTHORITY INCLUDING OFFICE OF INSPECTOR GENERAL (Dollars in Thousands) FY 2024 FY 2022 FY 2023 Estimates to Object Classification Description Actuals Enacted Congress Personnel Compensation & Benefits: Full-time & Other than full-time Permanent (11.1 & 11.3) $26,966 $28,587 $30,192 Personnel benefits (12.0) 9,608 9,443 $9,995 Subtotal - Personnel Compensation & Benefits $36,574 $38,030 $40,187 Other Expenses: Benefits for former personnel (13.0) $9 $8 $9 Travel & transportation of persons (21.0) $89 $387 395 Transportation of things (22.0) $5 $9 9 Rent payments to GSA (23.1) $4,598 $4,615 4,708 Communications, utilities, & misc. charges (23.3) $1,787 $2,194 2,238 Printing and reproduction (24.0) $185 $217 221 Other services from non-Federal sources (25.2) $16,052 $35,241 35,836 Other goods & services from Federal sources (25.3) $1,309 $932 951 Operation & maintenance of equipment (25.7) $41,668 $49,930 50,933 Supplies and materials (26.0) $86 $119 121 Equipment (31.0) $3,768 $529 539 Insurance claims & interest (40.0) $7 $20 20 Subtotal - Other Expenses $69,563 $94,201 $95,980 Total - Auctions Cost Recovery Reimbursable Authority $106,137 $132,231 $136,167 32 Spectrum Auctions Expenditures Report Section 309(j) of the Communications Act permits the Commission to use funds raised from auctions to fund its auctions program, including contracts for services and costs related to personnel performing work in support of Commission auctions authorized under that section. The FCC’s Office of General Counsel (OGC) and Office of Managing Director (OMD) provide direction to FCC employees attributing hours for this purpose. The House of Representatives and Senate Appropriations Committees review and set a yearly cap for the spectrum auctions program. The requested cap level for FY 2024 is $136,167,000 to fund the following activities: further the objective of making more spectrum available for commercial use; continue implementation of the Spectrum Pipeline Act of 2015 and certain provisions of the RAY BAUM’S Act, including the MOBILE NOW Act, as well as the Consolidated Appropriations Act of 2021, and the Infrastructure Investment and Jobs Act; continue the close-out of post-BIA work to include the new additional requirements from the REA related to the TVBRF; and upgrade and improve auctions infrastructure in preparation for future actions. In addition, as the demand for spectrum for new technologies extends to spectrum bands previously assigned for legacy applications, creative approaches must be found to accommodate existing licensees and operations while expanding opportunities for access by new users. The Commission’s spectrum auctions program supports efficient licensing while also contributing significant funds to the U.S. Treasury for deficit reduction and providing direct support to other government programs. As of January 2023, the Commission had generated over $233.5 billion in auctions revenues since initiating the auctions program in 1994. During this period, auctions program expenses have been 1.1% of the Commission’s total auctions revenues. Spectrum auction planning, development, and implementation is performed agency-wide and is very information technology (IT) intensive, as reflected in our Auction Expenditure Justification Reports. For example, the Incentive Auction Task Force as well as the team that implemented the auction and facilitate the transition of 100 megahertz of spectrum in the 3.45-3.55 GHz band to flexible use subject to certain cooperative sharing requirements, draw upon the resources and expertise of staff from across the Commission, including the Wireless Telecommunications Bureau, Media Bureau, International Bureau, Bureau of Consumer and Governmental Affairs, Office of Economics and Analytics, Office of Engineering and Technology, OMD, and OGC. Auctions funds also cover the program’s share of Commission operating expenses. The Commission uses these funds to enable successful auctions and expends them in a manner consistent with statutory requirements. Every auction is different and has specific requirements, which require careful attention to detail and planning. Since auction activities are performed agency-wide and are unique, allocating the appropriate amount of cost and overhead related to the auctions program is a challenge. In addition, the complexity of spectrum auctions has increased steadily as the Commission works through more difficult technical and policy issues related to the scarcity of vacant spectrum. Preparation for spectrum auctions generally requires sufficient time to design, develop, and implement secure, reliable, and effective auction application, bidding, and post-auction licensing systems. In the practice of cost accounting, costs are identified as one of the following: (1) direct cost, (2) indirect cost, or (3) generally allocated cost. The methodology for deriving the proportional share of generally allocated administrative costs to be charged to the auctions program is based on 33 the Commission’s time reporting system and Generally Accepted Accounting Principles. The allocation is based on the percentage of actual hours that employees worked to support the auction program plus the same proportional share of the employee’s indirect hours (leave hours). This full time equivalent (FTE) rate is applied to costs that benefit the Commission as a whole. The items that are allocated by the FTE rate include Commission-wide IT systems, guard service, administrative facility services, supplies, furniture, equipment, and human resources training activities. The FCC has maintained an average of 14 percent for this purpose, with minor deviations. The Commission continues to plan for future auctions, most notably reallocating and auctioning frequencies within 3.1-3.45 GHz band identified for shared use by federal and non-federal users by the Departments of Commerce and Defense; reallocating bands made available in the Spectrum Frontiers proceeding to terrestrial wireless use; and an auction of the spectrum required by the Spectrum Pipeline Act of 2015. Other auctions that may continue to be a focus for the Commission in FY 2024 include re-auctions of certain licenses previously offered and not won or returned to the Commission. Commission staff will also oversee the reimbursement process and the work of a Relocation Payment Clearinghouse in the 3.45 GHz band. The Commission will also continue to leverage auctions expertise and infrastructure to support reverse auctions that allocate Universal Service funding in an efficient and effective manner. Specifically, the Commission has adopted rules to make available through reverse auctions up to $9 billion in the 5G Fund to support deployment of mobile broadband in unserved areas. In addition, the Commission is continually working to update and modernize its auction bidding and application systems to improve their speed, flexibility, reliability, and security to support timely new auctions when additional spectrum that could be made available is identified. In FY 2024, the Commission will continue implementation of the RAY BAUM’S Act, including working with NTIA to identify 255 megahertz of additional spectrum (subject to certain frequency and use requirements) for mobile and fixed broadband use; preparing annual reports on upcoming systems of competitive bidding; and coordinating with the Departments of Commerce and Defense on initiatives related to shared spectrum allocations, bidirectional sharing, and commercial wireless use in the 3100-3550 MHz bands; and monitoring post-auction operations in bands subject to spectrum sharing and/or transition to new flexible uses. In addition, a significant Commission auction focus in FY 2024 will be to continue post-broadcast incentive auction implementation. The auction required that 987 full power and Class A television stations be repacked into a new, smaller TV band, which involved reorganizing and assigning channels to the remaining broadcast television stations to create contiguous blocks of cleared spectrum suitable for flexible wireless use. The scope of the repacking component of this auction has made it a unique and computationally complex challenge that will continue to require substantial resources and engagement from the Commission until all stations are operating on their permanent facilities and the reimbursement process has been completed. Such active oversight of the process will continue to require Commission staff resources to coordinate with broadcasters to monitor broadcaster progress, identify and resolve transition-related problems and challenges, process applications, review and verify information, undertake and complete the ongoing reimbursement program and, as appropriate, conduct subsequent verifications and audits of the reimbursements. 34 For example, we will continue to make disbursements from the TVBRF to eligible entities In addition, although the repacked full power and Class A television stations were required to vacate their pre-auction channels by July 2020, there will be continuing application processing and license to cover filings and other transition processing required after that time for both full power and Class A stations, and LPTV/translator stations. For example, LPTV/translator stations are not subject to the same construction deadlines as full power and Class A Stations, and a number of the full power and Class A stations that vacate their pre-auction channels are still operating on interim facilities while they continue to construct their permanent facilities while other stations, particularly those located on the most complicated broadcast towers, have remaining repack-related construction work to complete even after the stations have fully transitioned to their repacked channels. The post-auction transition also requires continued engagement of the Fund Administrator, which is overseen by Commission staff, to administer the reimbursement of up to $2.7 billion to the eligible entities by reviewing cost estimates and invoices to prevent waste, fraud, and abuse. The REA permits the Commission to obligate funds in the TVBRF until July 3, 2023 and the Commission may reimburse entities from obligated funds for a period of 5 years thereafter, during which time the Commission staff will continue to administer reimbursement of previously obligated funds for reimbursement of eligible expenses . Finally, the Commission will continue to devote significant resources in FY 2024 towards implementation efforts to transition a 280-megahertz block of spectrum in the 3.7-4.0 GHz band, plus a 20-megahertz guard band, from incumbent use to new flexible-use now that the related auction is complete. All eligible incumbent space station operators elected to clear according to the following accelerated timeline: (1) clearing 120 megahertz (3.7-3.82 GHz) by December 5, 2021, and (2) clearing the remaining 180 megahertz (3.82-4.0 GHz) by December 5, 2023. If both these deadlines are met, the incumbent space station operators will be eligible for accelerated relocation payments of up to $9.7 billion, to be paid by the new flexible-use licensees. Incumbent fixed- satellite service (FSS) and fixed service (FS) licensees, as well as incumbent earth station operators, may also seek reimbursement of reasonable relocation costs paid by flexible-use licensees as a condition on their license. The first clearing deadline was met by all eligible incumbent space station operators. Commission staff will establish a process for reviewing certifications by the incumbent space station operators who elected accelerated relocation to determine whether they have met their second clearing deadline and qualify for the accelerated relocation payments. Commission staff are also overseeing the reimbursement process and the work of a Relocation Payment Clearinghouse, who manages the intake, payout, and auditing of relocation funds, serves in an administrative role to mediate disputes related to such costs, and provides progress reports to the Commission. Likewise, Commission staff are overseeing technical aspects of the transition being managed by an external Relocation Coordinator, who is tasked with establishing a timeline and taking actions necessary to migrate and filter incumbent earth stations to ensure continued, uninterrupted service during and following the transition. Should the Relocation Coordinator receive notice of any substantive transition disputes between space station and earth station operators, it must notify Commission staff who will resolve such disputes. Commission staff will also handle any appeals of disputes mediated by the Relocation Payment Clearinghouse in the first instance. 35 The actual and estimated FTE levels for the spectrum auctions program for FYs 2022 through 2024 are shown below. FTEs by Resource Category The following two schedules provide some details of the spectrum auctions program since its inception in 1994. These schedules also provide some perspective into how much money was collected/generated for the U.S. Treasury or for broader government use and the total cost for running the Commission’s spectrum auctions program. 36 Spectrum Auctions and Cash Collected/Generated by Fiscal Year Fiscal Years 1994 through December 31, 2022 Number of Number of Licenses Amount Fiscal Year Auctions Won Collected/Generated 1994 2 604 $652,954 1995 2 129 $8,234,321 1996 6 2,026 $2,019,376 1997 4 1,614 $2,205,922 1998 2 1,388 $860,879 1999 6 1,693 $499,599 2000 8 4,403 $1,335,043 2001 4 3,447 $583,600 2002 7 7,036 $135,631 2003 7 3,144 $77,122 2004 5 267 $126,790 2005 6 2,803 $2,208,333 Dollars in Thousands 2006 5 1,284 $13,834,979 2007 5 290 $163,430 2008 3 1,144 $18,988,396 2009 2 115 $5,696 2010 3 4,788 $25,973 2011 3 126 $31,493 2012 1 93 $3,878 2013 2 3,197 $5,784 2014 2 186 $1,564,597 2015 2 1,713 $41,776,426 2016 0 0 $0 2017 1 2,776 $19,306,993 2018 2 41 $806 2019 3 5,880 $2,724,006 2020 2 34,767 $12,136,648 2021 2 5,781 $81,127,067 2022 3 11,931 $22,868,100 Totals 100 102,666 $233,503,841 Spectrum Auctions Program – Cash Collected/Generated vs. Expenditures Fiscal Years 1994 through December 31, 2022 (Dollars in Millions) $233,504 $2,455 $0 $30,000 $60,000 $90,000 $120,000 $150,000 $180,000 $210,000 $240,000 $270,000 Amount Collected/Generated Cumulative Expenditures Cumulative Expenditures include the amount enacted for FY 2023. 37 This page is intentionally left blank 38 Budget Authorities Already Provided COVID-19 Telehealth Program Due to the novel coronavirus 2019 disease (COVID-19) pandemic, the Commission established the COVID-19 Telehealth Program through a Report and Order released on April 2, 2020. The COVID-19 Telehealth Program is funded through a $200 million Congressional appropriation as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to immediately support eligible health care providers responding to the pandemic by providing funding for telecommunications services, information services, and connected devices necessary to provide critical connected care services whether for treatment of the COVID-19 disease or other health conditions during the COVID-19 pandemic. The COVID-19 Telehealth Program is an emergency funding program that is designed to provide flexibility for eligible health care providers that apply for and receive funding commitments, and then request reimbursement for eligible expenses that they have purchased and received from their service providers or vendors under the COVID-19 Telehealth Program. In order to seek funding under the CARES Act (Round 1), eligible health care providers were required to submit an application to the Commission, including information on the costs of the services and/or connected devices for which they plan to seek reimbursement. The Wireline Competition Bureau (Bureau), in consultation with the FCC’s Connect2Health Task Force, reviewed the COVID-19 Telehealth Program applications, as outlined in the Report and Order, selected participants, and made funding awards on a rolling basis to eligible applicants based on the estimated costs of the eligible items they intended to purchase with the COVID-19 Telehealth Program funds. Selected funding recipients received a funding commitment letter providing their award amount and additional information about certain COVID-19 Telehealth Program requirements and procedures. Consistent with the Report and Order, applications from areas that were hardest hit by COVID-19 and where funding had the most impact on addressing a community’s health care needs, were prioritized. In order to ensure as many applicants as possible received available funding under the CARES Act, the Bureau did not award more than $1 million to any single applicant. The Commission stopped accepting applications for Round 1 funding under the COVID-19 Telehealth Program on June 25, 2020. Awards were made until the appropriated Round 1 funding under the COVID-19 Telehealth Program was exhausted, which occurred on July 8, 2020. The Bureau issued $200 million in total COVID-19 Telehealth Program Round 1 funding commitments for 539 applications. After paying for and receiving the eligible services and/or connected devices from the service provider or vendor, funding recipients must submit to the Commission: a request seeking reimbursement; invoice documentation sufficient to identify the eligible items that were purchased and received, and the price paid; and, if applicable, a Letter of Authorization for those applicants that received a funding commitment on behalf of other eligible health care provider sites. Under Round 1 of the COVID-19 Telehealth Program, the Commission reimburses funding recipients the full cost of the eligible services and/or connected devices received so long as the invoice submissions are accompanied by the required supporting documentation. After the reimbursement request is approved by the Commission, payment is issued by the U.S. Department of Treasury electronically to the bank account on file associated with the funding recipient. 39 On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law, which appropriated an additional $249.95 million to the Commission’s COVID-19 Telehealth Program (Round 2). This additional funding allowed the Commission to continue its efforts to expand telehealth throughout the country and enable patients to access necessary health care services while helping slow the spread of the disease. Per congressional directive, the Commission was required to seek comment on various ideas related to committing the new funding, including the criteria to use to evaluate applications and how to treat pending applications from Round 1. The Commission released a Public Notice seeking comment on these issues on January 6, 2021. On March 30, 2021, the Commission released a Report and Order and Order on Reconsideration setting forth additional details about the policies and procedures that would apply during Round 2. On April 15, 2021, the Bureau released a Public Notice announcing the duration of the Round 2 application filing window, which opened on April 29, 2021 and closed on May 6, 2021. On August 26, 2021, the Bureau released a Public Notice announcing the first group of funding to 62 awardees totaling $41.98 million for Round 2 of its COVID-19 Telehealth Program. Health care providers in each state, territory, and the District of Columbia, including those previously unfunded in Round 1, will use this funding to provide telehealth services during the coronavirus pandemic. The Bureau then released three additional Public Notices, on September 29, October 21, and November 9, committing over $150 million. At this point, consistent with the Consolidated Appropriations Act, 2021, a 10-day window was provided for unfunded applicants to supplement or clarify their applications. A November 9 Public Notice announced that the period began November 9 and ended November 19. The same Public Notice provided guidance for applicants who wanted to supplement their applications. After the 10-day supplemental period ended, applications were re-ranked, and funding was awarded to the highest-scoring remaining applications. On December 21, 2021, the Bureau released a Public Notice committing funding to an additional 68 applicants. On January 26, 2022, the Bureau released its sixth and final Public Notice, which committed funding to 100 applicants. In total, 447 awardees received over $256 million in funding commitments as part of Round 2 of the Program. As of August 2022, Round 2 participants were implementing their programs, purchasing necessary equipment and services, and submitting reimbursement requests. On July 29, 2022, a Public Notice announced that the deadline for all purchases and implementation of services was October 31, 2022 and the deadline for submission of all invoices and requests for reimbursement is October 31, 2023. Broadband Deployment Accuracy and Technological Availability (Broadband DATA) Act and Broadband Deployment Locations Map The Commission has long recognized that precise, granular data on the availability of fixed and mobile broadband are vital to bringing digital opportunity to all Americans, no matter where they live, work, or travel. On March 23, 2020, the Broadband Deployment Accuracy and Technological Availability Act (Broadband DATA Act) was signed into law requiring the Commission to create a new set of broadband availability maps. Among other things, the Broadband DATA Act requires the Commission to collect standardized, granular data on the availability and quality of both fixed and mobile broadband Internet access services, to create a common dataset of all locations where fixed broadband Internet access service can be installed (the Broadband Serviceable Location 40 Fabric or Fabric), and to create publicly available coverage maps. The Act further requires the Commission to establish processes for members of the public and other entities to (1) provide verified data for use in the coverage maps; (2) challenge the coverage maps, the broadband availability data submitted by service providers, and the Fabric; and (3) submit specific crowdsource information about the development and availability of broadband service. In July 2020, the Commission adopted a Second Report and Order and Third Further Notice of Proposed Rulemaking that adopted rules for the collection and verification of improved, more precise data on both fixed and mobile broadband availability. In January 2021, the Commission released a Third Report and Order that took additional steps to ensure that both the new data collection itself, and the measures for verifying the accuracy of the data collected, will yield a robust and reliable data resource for the Commission, Congress, federal and state policymakers, and consumers to evaluate the status of broadband deployment throughout the United States. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law appropriating $98 million in funding for the implementation of the Broadband DATA Act. After receiving this funding, the Chairwoman established the Broadband Data Task Force (Task Force) in February 2021 to lead the cross-agency effort to implement the Act. Since then, the Task Force, working closely with multiple Commission Bureaus and Offices, has moved ahead with the complex and interrelated workstreams that must be accomplished as expeditiously as possible to enable the Commission to produce precise and consistent maps of broadband availability and thereby to assure that federal and state funding efforts can be predicated on such accurate information. On February 22, 2022, the Commission announced the opening of the initial filing window of the BDC would be June 30, 2022. All fixed and mobile providers of mass-market broadband Internet access service were required to file broadband availability data as of June 30, 2022, no later than September 1, 2022. Going forward, providers of mass-market broadband Internet access service will file broadband availability data on a biannual basis, as of December 31 and June 30 each year. On December 27, 2022, the Commission announced that the second filing window of the BDC would open on January 3, 2023, and required all fixed and mobile providers of mass-market broadband Internet access service to submit broadband availability data as of December 31, 2022, no later than March 1, 2023. On September 12, 2022, following the deadline for filing of service availability data in the inaugural data collection that commenced on June 30, 2022, the Commission began accepting bulk challenges to the Broadband Serviceable Location Fabric from state, local and Tribal governments and internet service providers. That process enabled the Commission and its contractor to augment their efforts to update and improve the Fabric in advance of the opening of the second data collection as of December 31, 2022. A revised version of the Fabric incorporating the results of the challenges, as well as other updates and refinements was made available to licensees for use in the second collection window that opened on January 3, 2023. On November 18, 2022, the Commission released a pre-production draft of its new National Broadband Map based on the availability data submitted by providers. The new map is the most comprehensive, granular and standardized data the Commission has ever made available on broadband availability. On the same day, the Commission announced the beginning of the fixed and mobile availability challenge processes, and the individual Fabric challenge process. This began an ongoing, iterative process that will improve the data submitted by providers by incorporating challenges from individuals and other stakeholders. In light of the collection of more precise location-specific availability data in the Broadband Data Collection, the Commission adopted an Order on December 19, 2022, to sunset the Form 477 broadband deployment data 41 collection that would eliminate a largely duplicative requirement on service providers. As a result, internet service providers will no longer be required to submit Form 477 broadband deployment data, but must still submit broadband and voice subscription data using the FCC Form 477, but filers will submit their data through the BDC system. Among other things, implementing the Broadband DATA Act required the Commission to develop complex data platform and systems to collect and map data collected from over 2500 internet service providers and for consumers and other stakeholders to submit challenges to that data, to develop a Broadband Serviceable Location Fabric database upon which data would be overlaid, and to establish a help center to provide technical assistance to providers, consumers and other stakeholders. In February 2021, the Commission retained an expert data architect to work with the Commission’s own data and IT systems specialists to design and build a prototype of a data flow structure and system for the Broadband Data Collection (BDC), and on July 2, 2021, after a competitive bid process, awarded a contract to build that data platform. The Commission relies on this platform to accept broadband availability coverage data submissions from service providers and other entities, map that data and make it public, receive, track, and resolve challenges to submitted data, and incorporate crowdsourced data from the FCC Speed Test app and other sources. The decision to contract with the same firm to build the IT platform and systems permitted development to begin immediately once the architecture was decided upon. The first phase of the new BDC system was developed and tested in time for the Commission to announce the opening of the system slightly ahead of schedule. On March 4, 2022, the Commission published detailed technical specifications for the submission of subscription, availability and supporting data into the BDC filing platform. On June 23, 2022, the Task Force issued a public notice announcing early access to certain portions of the BDC system for filers to register in advance of the opening of the initial filing window. In March 2021, the Commission issued a Request for Information and, in June 2021, a subsequent Request for Proposal (RFP) to seek vendors capable of building the Fabric. Vendor proposals were due on July 1, 2021; however, the Commission received a pre-award protest filed with the U.S. Government Accountability Office (GAO) following the RFP response deadline, which the agency worked to quickly resolve by issuing a revised RFP to all offerors on August 13, 2021. Revised proposals were due on August 26 and, after expeditiously reviewing these highly technical and detailed responses in a manner consistent with government solicitation practices, the Commission awarded the contract for Fabric development on November 9, 2021. Following this decision, a post-award protest was filed with GAO and Fabric development was stayed until a decision from GAO was issued on February 24, 2022, resolving the protest in the Commission’s favor. The Commission immediately lifted the stop work order and, with its contractor, finalized and made available to Internet service providers and governmental entities, the first version of the Fabric on June 23, 2022, in advance of the June 30, 2022, opening of the filing window for the BDC. The Commission has engaged in additional procurement efforts and has retained outside resources to assist in providing technical assistance to Internet service providers as well as to participants in the challenge process, as required under the Broadband DATA Act. To supplement these efforts, the FCC has executed two separate contracts with an outside firm to provide technical assistance for both filers of broadband availability data (including state agencies possessing verified data) and stakeholders, such as states, seeking to challenge the availability data submitted by internet service providers and the broadband serviceable locations set out in the Fabric. These resources include help desk support for answering basic questions related to the filing requirements, as well as specialized Geographic Information System (GIS) support for preparing and submitting verified 42 broadband availability data. In April 2022, the Task Force also launched an online help center and other new resources to assist Internet service providers and other filers of verified broadband availability data prepare their submissions for the BDC filing windows. The resources include video webinars and tutorials, technical assistance information, and an option to request additional assistance. The Commission also addressed the remaining legal and policy issues associated with implementing the challenge, crowdsource and verification processes. This framework empowers consumers, state, local, and Tribal governments, and other parties to challenge, and thereby improve, the accuracy of the maps by sharing data with the Commission. On March 9, 2022, the Task Force, WTB, OEA, and OET released a detailed order, technical appendix, rules and technical data specifications setting forth technical requirements and specifications for the mobile challenge, verification, and crowdsource processes required by the Act. Individual consumers are now able to submit mobile challenge and crowdsource data using mobile speed test apps, such as the FCC Speed Test app. To this end, in September 2021, the Commission executed a contract modification with the FCC Speed Test app developer to develop the additional functionality for the mobile challenge and crowdsource processes, and on March 9, published detailed technical specifications for the submission of mobile speed test data into the BDC. The Task Force unveiled an updated FCC Speed Test App on November 18, 2022, that enables consumers and other stakeholders to dispute the availability of mobile broadband service using on-the-ground speed test data. To assist entities that choose to file mobile challenges in bulk, on September 15, 2022, the Task Force and WTB established a process for entities to use their own software and hardware to collect on-the- ground mobile speed test data for use in the BDC mobile challenge process. In July 2022, the Commission awarded a contract to acquire propagation modeling software and automation services for use in verifying the accuracy of mobile providers’ broadband availability maps. To supplement this effort, the Commission is finalizing efforts to procure additional radiofrequency data analysis and consulting services to conduct ongoing review of data submitted by providers including link budgets, network monitoring results, infrastructure data, etc. The Commission is also assisting stakeholders, including state, local, and Tribal government entities, to participate in the ongoing data collection, challenge, and verification processes. In addition to engaging directly in discussions with state and other governmental partners, on December 8, 2021, the Task Force, in conjunction with the FCC’s Office of Native Affairs and Policy, hosted an initial workshop for Tribal governments to provide information about the BDC program and technical assistance on the procedures that Tribes will use to submit verified availability data to the Commission. In April 2022, the Task Force, WCB, WTB, OEA, and OET issued guidance to state, local, and Tribal governmental entities for filing verified broadband availability data as part of the BDC. The Task Force also hosted a live system preview for Internet service providers on June 29, 2021. The Task Force has also hosted filing workshops for Internet service providers throughout August 2022, and the Consumer and Government Affairs Bureau hosted a July 2022 webinar to answer questions on the Broadband Data Collection system for Tribal leaders, Tribal broadband providers and other Tribal filers who would submit data in the inaugural filing window. The Commission has also assisted and educated consumers, service providers, governmental entities, and others about the various challenge processes. Parallel with the beginning of the bulk fabric challenge process, on September 22, 2022, the FCC hosted a fabric challenge filing workshop to assist licensees with collecting and formatting data to be used to challenge locations on the Fabric. Additionally, on September 15, 2022, ahead of the beginning of the availability challenge process, the FCC released detailed data specifications for submitting fixed challenges in bulk. To assist entities submitting bulk challenges to the fixed availability data, the Commission posted a 43 tutorial video and on November 30, 2022, hosted a technical assistance workshop to provide an overview of the fixed bulk availability challenge process and walk filers through the process of submitting challenge data. Most recently, the Commission on December 15, 2022, posted video tutorials to assist providers of fixed broadband service with responding to challenges. The Commission has also developed a toolkit of consumer-directed outreach materials and is working with state, local and Tribal governments, organizations and other stakeholders to coordinate efforts to educate consumers about the new maps and how they can participate in the challenge processes to improve their accuracy. All of these resources have been posted on the FCC’s website and the BDC Help Center to assist entities with submitting data for the biannual BDC filing, challenge, or crowdsource processes. On November 15, 2021, the Infrastructure Investment and Jobs Act (the IIJA) was signed into law. The IIJA amended the Broadband DATA Act to require the Commission to resolve challenges no later than 90 days after the date on which a final response by a provider to a challenge is complete, and to implement this new requirement as soon as possible after the date of enactment of the IIJA. The IIJA also appropriated $10 million to the Commission, in consultation with all relevant Federal agencies, for the creation of a Broadband Deployment Locations Map, a public resource that will show the locations of broadband infrastructure projects funded by the Federal Government. The Commission is working expeditiously to implement these and other relevant provisions of the IIJA. The IIJA requires that the Broadband Deployment Locations Map be made publicly available on the Commission’s website no later than May 2023. The Commission has engaged the same firm working to build the systems for the Broadband Data Collection to build out data collection and map to meet the IIJA’s requirements. In addition, Commission staff are meeting with staff from executive agencies to develop system requirements and ensure alignment among agencies that will report data. Secure & Trusted Communications Network Reimbursement Program On March 12, 2020, the Secure and Trusted Communications Networks Act of 2019 (Secure Networks Act) was signed into law. The Secure Networks Act, among other measures, directed the Commission to establish the Secure and Trusted Communications Networks Reimbursement Program (Reimbursement Program) to fund the removal, replacement, and disposal of covered communications equipment or services that pose an unacceptable risk to the national security of the United States or the security and safety of U.S. persons from the networks of providers of advanced communications service. Specifically, the Reimbursement Program assists providers of advanced communications service with the costs of permanently removing, replacing, and disposing of communications equipment and services produced or provided by Huawei Technologies Company (Huawei) and ZTE Corporation (ZTE) and obtained by the providers on or before June 30, 2020. On December 10, 2020, the Commission adopted a Second Report and Order implementing the Secure Networks Act by establishing rules for the Reimbursement Program. The Reimbursement Program provides funding allocations to eligible providers of advanced communications service based on their estimated costs. Reimbursement Program recipients can then obtain funding disbursements from their allocation upon showing of actual expenses incurred. Reimbursement Program recipients will have one year from the initial disbursement to complete the permanent removal, replacement, and disposal of covered communications equipment or services, unless a general or individual extensions of that deadline is granted by the Commission. Recipients of Reimbursement Program funds shall use these funds solely to: (1) permanently remove covered 44 communications equipment and services from their networks; (2) replace the covered communications equipment and services with non-covered equipment or services; and (3) dispose of the covered communications equipment and services, in accordance with the Secure Networks Act and the Commission’s rules. On December 27, 2020, the Consolidated Appropriations Act, 2021 (Consolidated Appropriations Act), was signed into law. The legislation, among other things, appropriated $1.9 billion to “carry out” the Reimbursement Program. In addition, the legislation amended the Secure Networks Act, expanding program eligibility from providers of advanced communications service with two million or fewer customers to providers with ten million or fewer customers. The Consolidated Appropriations Act also amended the definition of a provider of advanced communications service to specifically include certain non-commercial education institutions, healthcare providers, and libraries providing advanced communications service, and added a method for prioritizing funding that differs from the approach adopted by the Commission in the Second Report and Order. The Commission released a Third Report and Order, on July 14, 2021, implementing the changes required by the Consolidated Appropriations Act and making additional clarifications about the Reimbursement Program. Notably, the Commission stated that the Reimbursement Program is limited to reimbursing the costs of removal, replacement, and disposal to communications equipment and service produced or provided by Huawei and ZTE that was obtained on or before June 30, 2020. On April 28, 2021, the Commission’s Wireline Competition Bureau (Bureau) announced the selection of a contractor as the Reimbursement Program Fund Administrator to assist with processing applications and administering the Reimbursement Program. On August 3, 2021, the Bureau released a public notice adopting final procedures for and providing eligible providers of advanced communications services with additional guidance regarding the application filing and reimbursement process for the Reimbursement Program. The Bureau also finalized the information fields on the new FCC Form 5640, which participants must submit to request funding allocations and disbursements from the Reimbursement Program. The filing window to accept applications to participate in the Reimbursement Program opened on October 29, 2021 and closed on January 28, 2022. The Commission received 181 applications. The Bureau issued approval and denial decisions on applications on July 15, 2022 and proceeded with issuing allocations consistent with the requirements of the Secure Networks Act and the Commission’s rules. To date, the FCC has obligated all of the funds except $54 million. The remaining $54 million is needed for program administration and any potential appeals. On July 15, 2022, the FCC informed Congress that following its review of applications submitted under the Reimbursement Program, the amount of supplemental funding needed to fully fund all reasonable and supported cost estimates for all prioritization groups and cover administrative expenses is $3.08 billion. Emergency Broadband Connectivity Fund-Emergency Broadband Benefit Program and Affordable Connectivity Fund-Affordable Connectivity Program On December 27, 2020, the Consolidated Appropriations Act, 2021 (Consolidated Appropriations Act), was signed into law. In the Consolidated Appropriations Act, Congress appropriated $3.2 billion for the Emergency Broadband Connectivity Fund for fiscal year 2021, to remain available 45 until expended or six months after the end of the public health emergency. The Consolidated Appropriations Act directed the Commission to use that funding to establish the Emergency Broadband Benefit (EBB) Program, under which eligible low-income households may receive a discount off the cost of broadband service and certain connected devices during an emergency period relating to the COVID-19 pandemic, and participating providers can receive a reimbursement for such discounts. Enrollments in the EBB Program ceased on December 30, 2021 and the successor program, the Affordable Connectivity Program (ACP) began on December 31, 2021. On November 15, 2021, the Infrastructure Investment and Jobs Act, 2021 (Infrastructure Act), was signed into law. In the Infrastructure Act, Congress appropriated $14.2 billion for the Affordable Connectivity Fund, to remain available until expended. The Infrastructure Act directed the Commission to use that funding to establish the ACP, under which eligible low-income households may receive a discount off of the cost of broadband service and certain connected devices, and participating providers can receive a reimbursement for passing such discounts on to eligible households. To participate in the ACP, a provider must elect to participate, and either be designated as an eligible telecommunications carrier or be approved by the Commission. Participating providers make available to eligible households a monthly discount off the cost of an Internet service offering and associated equipment, up to $30.00 per month. On qualifying Tribal lands, the monthly discount may be up to $75.00 per month. Participating providers receive reimbursement from the ACP for the discounts provided. Participating providers that also supply an eligible household with a laptop, desktop computer, or tablet (connected device) may receive a single reimbursement of up to $100.00 for the connected device, if the charge to and payment from the eligible household for that device is more than $10.00 but less than $50.00. A participating provider may receive reimbursement for only one supported device per eligible household. Providers must submit certain certifications to the Commission to receive reimbursement from the ACP, and the Commission is required to adopt audit requirements to ensure provider compliance and prevent waste, fraud, and abuse. In implementing the ACP, the Infrastructure Act permits the Commission to apply rules contained in part 54 of the Commission’s rules, including those governing the Lifeline program. The Infrastructure Act further permits the Commission to avail itself of the Universal Service Administrative Company (USAC)’s, the administrator of the universal service support programs, services to administer the ACP. Specifically, the Infrastructure Act required the Commission to adopt rules implementing the ACP by January 14, 2022. Consistent with the Infrastructure Act, the Commission adopted a Report and Order on January 14, 2022 adopting the rules and policies creating and governing the ACP. The Commission has established processes and systems to administer the ACP, including approval and election processes for broadband providers to participate, consumer application and enrollment processes, and provider reimbursement processes. Consumers can apply for the ACP through the National Verifier at https://www.affordableconnectivity.gov/or through service providers’ alternative verification processes. Following the Infrastructure Act’s direction for the Commission to engage in outreach to ACP eligible households, including providing grants to outreach partners, the Commission has 46 established the Affordable Connectivity Outreach Grant Program, the Your Home, Your Internet, Pilot Program, and the ACP Navigator Pilot Program. On August 5, 2022, the Commission adopted a Second Report and Order, establishing the Affordable Connectivity Outreach Grant Program. In the order, the Commission established rules and guidelines for grant applicants including, eligibility and reporting requirements, funding mechanisms, application submission and review procedures. The Notice of Funding Opportunity (NOFO) for the ACP Outreach Grants was released on November 10, 2022 and the application deadline was January 9, 2023. On August 5, 2022, the Commission adopted a Third Report and Order, establishing the Your Home, Your Internet Pilot Program. In this order, the Commission established rules and guidelines for housing agencies to participate in a pilot program, enhancing the ACP application process, and providing approved participants access to the National Verifier. The application window for the Your Home, Your Internet Pilot Program and the ACP Navigator Program and the related grant funding opportunity opened on November 21, 2022 and closed on January 9, 2023. The Infrastructure Act also requires the Commission to adopt rules for the collection of price and subscription rates of internet service offerings of ACP providers. On November 15, 2022, the FCC adopted an Order establishing the data to be collected, the mechanism for collecting the data, and the format of the data’s publication. As of February 6, 2023 over 16 million households were participating ACP. The Commission will release enrollment data to inform its evolving awareness efforts, increase transparency in the ACP, and empower its outreach partners to better target awareness and enrollment efforts. The Commission looks forward to working with Congress to extend this program and ensure that it continues to provide critical benefits to millions of households. Emergency Connectivity Fund To help schools and libraries provide connected devices, such as a laptop, tablet, or similar end- user devices, and broadband connectivity to students, school staff, and library patrons during the coronavirus disease (COVID-19) emergency period, Congress established a $7.171 billion Emergency Connectivity Fund (the Fund) to remain available until September 30, 2030, as part of the American Rescue Plan Act of 2021 (American Rescue Plan Act) signed into law on March 11, 2021. Per congressional directive, the Commission was required to promulgate rules providing for the distribution of funding from the Emergency Connectivity Fund to eligible schools and libraries for the purchase of eligible equipment and/or advanced telecommunications and information services for use by students, school staff, and library patrons at locations other than a school or library within 60 days from the date of enactment. Consistent with this congressional directive, on March 16, 2021, the Wireline Competition Bureau sought comment on the provision of support from the Emergency Connectivity Fund consistent with section 7402 of the American Rescue Plan Act. Subsequently, on May 10, 2021, the Commission established the Emergency Connectivity Fund Program and promulgated rules for the distribution of funding from the Fund. The initial Emergency Connectivity Fund Program application filing window opened on June 29, 2021 and closed on August 13, 2021. During the initial application filing window, eligible schools, libraries, and consortia of eligible schools and 47 libraries, submitted requests for funding to purchase eligible equipment and services between July 1, 2021 and June 30, 2022 for use by students, school staff and library patrons who would otherwise lack sufficient access to connected devices and/or broadband connectivity to engage in remote learning during the COVID-19 emergency period. On August 25, 2021, the Commission announced that it received requests for $5.137 billion to fund 9.1 million connected devices and 5.4 million broadband connections during the first application filing window. The first application filing window attracted applications from all 50 states, American Samoa, Guam, Northern Mariana Islands, Puerto Rico, U.S. Virgin Islands and the District of Columbia – including schools and libraries in both rural and urban communities seeking funding for eligible equipment and services received or delivered between July 1, 2021, and June 30, 2022. In view of outstanding demand and the recent spike in coronavirus cases, the FCC opened a second application filing window for schools and libraries to request funding for connected devices and broadband connections for off-campus to meet the unmet needs of students, school staff, and library patrons during the current school year (i.e., July 1, 2021 through June 30, 2022). The second Emergency Connectivity Fund Program application filing window opened on September 28 and closed on October 13, 2021. On October 25, 2021, the Commission announced that it received requests for nearly $1.3 billion during the second application filing window to fund nearly 2.4 million connected devices and over 564,000 broadband connections. On March 23, 2022, the Commission announced that a third application filing window would open on April 28, 2022, and close on May 13, 2022, and that it expected at least $1 billion was available for commitments and disbursements for this third window. During the third filing window, eligible schools and libraries could request funding for eligible equipment, non-recurring services, and up to 12 months of recurring services that will be delivered or received between July 1, 2022, through December 31, 2023. On May 25, 2022, the Commission announced that it received requests for over $2.8 billion during the third filing window to fund over 5.1 million connected devices and over 4.2 million broadband connections. The Commission also noted that because demand exceeded available funds, the third window requests will be prioritized to fund the schools and libraries with greatest need with a preference given to rural schools and libraries. As of March 1, 2023, the Commission has issued 29 waves of funding commitments for windows 1 and 2, and 19 waves of funding commitments for window 3, collectively totaling over $6.617 billion since the program was launched on June 29, 2021. Total commitments are supporting over 11,000 schools, 1,000 libraries, and 130 consortia for over 12.9 million connected devices and over 8.1 million broadband connections for students, school staff, and library patrons located in all 50 states, American Samoa, the District of Columbia, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands. 48 Summary Activities for Other Budget Authorities Received in FYs 2020, 2021, & 2022 (Dollars in Thousands) Amount Amount Obligated for Budget Amount Obligated for Program Authority Disbursed Program Use Administration Use COVID-19 Telehealth Program - Round 1 $200,000 $200,000 $6,600 $191,384 COVID-19 Telehealth Program - Round 2 $249,900 $249,653 $0 $135,695 Secure & Trusted Communications Network $1,900,000 $1,834,769 $11,172 $48,668 Reimbursement Program Emergency Broadband Connectivity Fund - $3,200,000 $3,094,117 $63,979 $3,152,050 Emergency Broadband Benefit Program Affordable Connectivity Fund - $14,200,000 $3,231,901 $91,079 $2,634,944 Affordable Connectivity Program Broadband DATA Act $65,000 $8,008 $0 $2,806 Emergency Connectivity Fund $7,171,000 $6,166,265 $109,029 $2,582,919 TOTAL - FY '20 - '22 Other Budget Authorities $26,985,900 $14,784,713 $281,859 $8,748,465 Note: Amounts dedicated to OIG for COVID-19 Telehealth Program - Round 2 and Emergency Connectivity Fund are not included in the amounts shown above. The amounts shown are as of December 31, 2022. 49