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Federal Register / Vol. 86, No. 4 / Thursday, January 7, 2021 / Rules and Regulations adopt under section 254b7. The Commission further concluded that section 254 allowed it to condition the receipt of universal service support on ETCs offering broadband capabilities to their customers. The Tenth Circuit affirmed this approach as a reasonable interpretation of the statute and upheld the Commissions authority to structure universal service support to ensure that the universal service policies set out in section 254b of the Act are achieved.
73. The Commission first funded broadband internet access service offerings in the Lifeline program when it launched the Lifeline Broadband Pilot Program as part of the reforms adopted in the 2012 Lifeline Order 77 FR 12952, March 2, 2012. In doing so, the Commission relied upon the same theory of legal authority it applied to the high-cost mechanism in the USF/ICC
Transformation Order. At the time that the Commission initiated the Lifeline Broadband Pilot Program, broadband internet access service was classified as an information service under Title I.
After a successful pilot program, in the 2016 Lifeline Order 81 FR 33026, May 24, 2016, the Commission expanded the Lifeline program to include support for broadband internet access service funding. However, since broadband internet access service had been reclassified as a telecommunications service subject to Title II regulatory requirements before the 2016 Lifeline Order, the Commission relied on that reclassification when expanding the Lifeline program to include support for broadband but did not disavow the legal authority theory used in the USF/ICC
Transformation Order or the 2012
Lifeline Order.
74. In the 2017 Lifeline Notice of Proposed Rulemaking NPRM 83 FR
2104, Jan. 16, 2018, to ensure that the Commission was administering the Lifeline program on sound legal footing, the Commission proposed to apply the same theory of legal authority it used in the USF/ICC Transformation Order and the 2012 Lifeline Order to continue funding broadband internet access service in the Lifeline program. In that NPRM, the Commission asserted that it had the proper authority under Section 254e of the Act to provide Lifeline support to ETCs that provide broadband service over facilities-based broadbandcapable networks that support voice service. The Commission concluded that this legal authority does not depend on the regulatory classification of broadband internet access service, and thus, ensures the Lifeline program has a role in closing the digital divide regardless of the regulatory classification of broadband service.

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Indeed, the Commission further concluded that it had a mandatory duty to adopt universal service policies that advance the principles outlined in section 254b and we have the authority to create some inducement to ensure that those principles are achieved. In the same NPRM, the Commission sought comment on eliminating the Lifeline Broadband Provider category of ETC, a broadbandonly ETC designation that had been newly created in the 2016 Lifeline Order when broadband internet access service had been classified as a Title II service.
75. Finally, in the 2019 Lifeline Order 84 FR 71308, Dec. 27, 2019, the Commission re-evaluated the legal structure of the Lifeline Broadband Provider ETC category. With no obligation to offer the supported voice service under section 254c, the Commission found that the Lifeline Broadband Provider category was in conflict with section 214. As such, the Commission eliminated this ETC
category. Free Press argues that the Commissions decision to reclassify broadband internet access service as an information service locks out broadband-only providers from the Lifeline program. Thus, all ETCs currently are required to be common carriers and to offer voice service. The Commission has held that the section 214 requirement that an ETC offer the supported services through its own facilities or a combination of its own facilities and resale of another carriers service would be satisfied when service is provided by any affiliate within the holding company structure.
2. The Commission Has Authority To Support Broadband Service in the Lifeline Program 76. Upon further review and having considered the record in both the Restoring Internet Freedom proceeding and in response to the 2017 Lifeline NPRM, we determine that we have authority under section 254 of the Act to provide support for broadband internet access service from the Lifeline program in addition to a qualifying voice service. First, we elaborate on our application of the theory of legal authority adopted in the USF/ICC
Transformation Order to the Lifeline program. Second, we address how this authority is not dependent on the regulatory classification of broadband internet access service and is consistent with the section 214e requirement that ETCs be common carriers. Third, we make necessary adjustments to the Commissions rules to implement this approach. Finally, we address how this legal authority will still allow the
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Lifeline program to reimburse broadband-only service offerings.
77. We conclude, as the Commission found in the context of the high-cost mechanism, that we have authority under section 254 to continue funding broadband internet access service offerings in the Lifeline program and that this position is strongly supported by the text of the Communications Act and the record. Under section 254e, carriers receiving support shall use that support only for the provision, maintenance, and upgrading of facilities and services for which the support is intended. Under this statutory provision, the Commission has flexibility to design its support mechanisms to fund both the service itselfhere, voice telephonyand the underlying facilities used to offer the supported servicehere, broadbandcapable networks. Modern communications networks are multi-use networks used to provide an array of services. Providing Lifeline support when ETCs provide broadband internet access service thus has the effect of supporting the underlying broadbandcapable network also used to offer voice telephony. As in the high-cost program, the Commissions support mechanisms can and should incentivize ETCs to offer access to the services that advance the principles of section 254b. The Leadership Conference Ex Parte also raises a number of suggestions for further Commission action to respond to the COVID19 pandemic, which we do not address here as they are beyond the scope of this remand proceeding. Other commenters argue that the Commission lacks authority to fund broadband internet access services through the Lifeline program under section 254. We believe this is incorrect, and we address those arguments below. All ETCs participating in the Lifeline program are and will remain common carriers and must offer voice services by themselves or through an affiliate, but the Commission can also continue to support broadband internet access service in the Lifeline program, and the universal service support will flow to the facilities of ETCs that are by definition common carrier providers of voice services.
78. Section 254e states that ETCs shall be eligible to receive specific Federal universal service support and that an ETC receiving universal service support shall use that support only for the provision, maintenance, and upgrading of facilities and services for which the support is intended. Section 254c does not impose an impediment to this conclusion. While section 254c1 refers to universal service as
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