FCC Adopts Final Rule Modernizing Suspension, Debarment

Content

ACTION:

Final rule.

SUMMARY:

In this document, the Federal Communications Commission (Commission) adopts the Office of Management and Budget's Guidance
for Nonprocurement Debarment and Suspension, along with agency-specific regulations to allow the agency to further combat
waste, fraud, and abuse, and remove bad actors from participation in its support programs. The Commission finds further notice
and comment “unnecessary” under the Administrative Procedure Act (APA) for the Commission to adopt the Guidelines (including
updates made after the Notice of Proposed Rulemaking in this proceeding), but elect to provide an opportunity for input on
that assessment as to three of the Guidelines. A Proposed Rule relating to the Commission's adoption of updated suspension
and debarment rules is published elsewhere in this issue of the
Federal Register
.

DATES:

Effective dates: Amendatory instruction 3 is effective May 11, 2026. Amendatory instructions 1, 4 through 9, and 11 through 13 are delayed
indefinitely. The Commission will publish a document in the
Federal Register
announcing the effective date for the delayed actions.

Comment due date: As explained in the preamble below, comments in response to the adoption of §§ 180.630, 180.705, and 180.730 of the OMB Guidelines
will be accepted until May 11, 2026. If significant adverse comment is received, the Federal Communications Commission will
publish a timely notification in the
Federal Register
informing the public of additional procedures that must be followed.

ADDRESSES:

Pursuant to §§  1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments on or
before the dates provided in the
DATES
section of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998). You may submit comments, identified by GN Docket No. 19-309,
by any of the following methods:

• Electronic Filers: Comments may be filed electronically using the internet by accessing the ECFS: https://www.fcc.gov/ecfs.

• Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing.

• Filings can be sent by hand or messenger delivery, by commercial courier, or by the U.S. Postal Service. All filings must be addressed to the Secretary, Federal Communications Commission.
• Hand-delivered or messenger-delivered paper filings for the Commission's Secretary are accepted between 8:00 a.m. and 4:00 p.m. by the FCC's mailing contractor at 9050 Junction Drive, Annapolis Junction, MD 20701. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.
• Commercial courier deliveries (any deliveries not by the U.S. Postal Service) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701. Filings sent by U.S. Postal Service First-Class Mail, Priority Mail, and Priority Mail Express must be sent to 45 L Street NE, Washington, DC 20554. • People With Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530.

FOR FURTHER INFORMATION CONTACT:

Paula Silberthau, Attorney Advisor, Office of General Counsel, 202-418-1874, paula.silberthau@fcc.gov.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Report and Order in GN Docket No. 19-309, FCC 26-18, adopted on March 26, 2026, and released on March 27, 2026. The complete text of this document
is available for download at https://docs.fcc.gov/public/attachments/FCC-26-18A1.pdf. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format) by sending
an email to fcc504@fcc.gov or calling the Commission's Consumer and Government Affairs Bureau at (202) 418-0503.

Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980, as amended (RFA) requires that an agency prepare a regulatory flexibility analysis
for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant
economic impact on a substantial number of small entities.” Accordingly, the Commission has prepared a Final Regulatory Flexibility
Analysis (FRFA) concerning the possible impact of the rule changes contained in the Report and Order on small entities. The FRFA is set forth below and in Appendix B appended to the Commission's Report and Order, https://docs.fcc.gov/public/attachments/FCC-26-18A1.pdf.

Paperwork Reduction Act. This document contains new information collection requirements. The Commission, as part of its continuing effort to reduce
paperwork burdens, will invite the general public to comment on the information collection requirements contained in this Report and Order as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, the Commission notes that pursuant to
the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might further reduce the information collection
burden for small business concerns with fewer than 25 employees.

Congressional Review Act. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management
and Budget, concurs, that this rule is “non-major” under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will
send a copy of the Report and Order to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

Introduction

The Federal Communications Commission (FCC or Commission) administers several congressionally-mandated programs, such as the
Universal Service Fund (USF) and the Telecommunications Relay Services (TRS) program, that provide significant funding to
close the digital divide and ensure that all Americans have access to communications services. In administering these important
programs, it is incumbent upon the Commission to be a good steward of these funds, which are ultimately paid for by the American
people. We must ensure that these limited dollars serve their intended purposes. Waste, fraud, and abuse frustrate the Commission's
goals and undermines public trust in these programs. Bad actors who would seek to enrich themselves by siphoning

  these critical resources away from connecting rural households and businesses, schools and libraries, rural healthcare providers,
  low-income households, and people with disabilities have no place in these programs. As such, in this Report and Order we
  adopt additional, critical tools which will allow us to promptly and efficiently take action to exclude or otherwise limit
  bad actors' participation in these programs. These changes, which received widespread support in the record, will align our
  processes with other agencies, incorporate current fraud prevention best practices, and, ultimately, distribute funds more
  responsibly.

Background

OMB Guidelines. The Commission's 2019 Notice of Proposed Rulemaking (NPRM) (85 FR 2078) proposed to adopt the OMB Guidelines on Governmentwide
Debarment and Suspension (Nonprocurement) (Guidelines) (71 FR 66431, amended 89 FR 30046). The Guidelines establish a common
framework for a governmentwide debarment and suspension system for nonprocurement programs. The Guidelines define “non-procurement
transaction” as “any transaction, regardless of type (except procurement contracts),” including but not limited to grants,
cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurances,
payments for specified uses, and donation agreements. Suspension and debarment rules for federal procurement contracts are
contained in the Federal Acquisition Regulation (FAR), 48 CFR pt. 9. The Guidelines generally provide for suspension or debarment
based on a range of misconduct. This range includes not only convictions of or civil judgments for fraud or certain criminal
offenses, but also violations of the requirements of public transactions “so serious as to affect the integrity of a Federal
agency program” (including willful or repeated violations). In addition, the Guidelines provide that suspension or debarment
could be warranted for “[f]ailure to pay a single substantial debt, or a number of outstanding debts . . . owed to any Federal
agency . . . .” Finally, the Guidelines provide the discretion to suspend or debar for “[a]ny other cause that is so serious
or compelling in nature that it affects [the party's] present responsibility.” However, in the case of suspensions, but not
debarments, the suspending official must find that “[i]mmediate action is necessary to protect the public interest.”

Suspensions under the Guidelines have prospective but immediate effect, and debarments are effective following a 30-day opportunity
for a party to respond to a debarment notice and the issuance of a final debarment order. Once effective, an action to suspend
or debar serves to automatically exclude the suspended or debarred party from new covered transactions governmentwide, whether
in procurement or nonprocurement programs or activities. For ongoing activities, “a participant may . . . continue to use
the services of an excluded person as a principal” if the participant was “using that person's services in the transaction
before the person was excluded.” The participant also has the option of discontinuing the excluded person's services and finding
an alternative provider. Likewise, under the Guidelines, a participant “may continue covered transactions with an excluded
person if the transactions were in existence when the Federal agency excluded the person,” but the participant is not required
to do so.

Under the Guidelines, suspension and debarment (referred jointly herein as exclusions) are not punitive actions, and are separate
from civil enforcement actions (including those undertaken under the Communications Act) and criminal prosecutions. They are
also separate from any administrative procedures that may be used to recover debt. Thus, this Report and Order does not limit
or otherwise impact any preexisting statutory, regulatory or common law tools available to the Commission or to the Government
generally, other than any suspension and debarment rules that may be expressly replaced or superseded by this Report and Order.
Instead, exclusion is an administrative action taken to protect the Government's business interests on a prospective basis.
Federal agencies, through their Suspending and Debarring Officials (SDO), must use balance and judgment in determining whether
suspension or debarment is appropriate in a particular matter, including when an exclusion proceeding occurs as a result of,
or at the same time as, other criminal, civil, or administrative proceedings. In this respect, the approach in the Guidelines
can enhance the remedies or tools that a federal agency such as the Commission might use to address misconduct, while providing
the federal agency with flexibility to adopt supplemental rules tailored to its specific programs.

Notice of Proposed Rulemaking

The Notice of Proposed Rulemaking (NPRM) proposed to adopt the Guidelines for several critical support programs: the USF programs,
the TRS program, and the NDBEDP. The NPRM also proposed supplemental rules that would implement the Guidelines and clarify
their application to the Commission's programs. The NPRM explained that the proposed supplemental rules were consistent with
the Guidelines—which broadly afford each agency flexibility to implement the Guidelines in a manner that addresses its specific
needs—and were based on the Commission's experience in administering these programs over many years.

The comments received by the Commission demonstrate that there is widespread support for us to adopt new rules that are substantially
similar to those proposed in the NPRM. Indeed, there was near consensus support for adopting updated, more flexible suspension
and debarment rules based on the Guidelines to facilitate the exclusion of bad actors who pose a threat to the integrity of
our programs. Additionally, many commenters proposed concrete, thoughtful modifications or alternatives to our proposed supplemental
rules to improve their clarity, transparency, and process protections without compromising their efficacy. And in many cases,
we find that adopting commenters' proposed changes or clarifications will advance the public interest.

Since the release of the NPRM, high-profile investigations involving fraud in Commission programs, including USF and other
programs, have served to emphasize the importance of having more robust suspension and debarment rules in order to safeguard
public funds.

Report and Order

We hereby adopt the Guidelines and supplemental rules, as tailored below to the Commission's programs, to best address and
prevent waste, fraud, and abuse with respect to those programs. Specifically, we adopt a broader and expanded range of misconduct
(beyond merely criminal convictions and civil judgments) that can trigger Commission exclusion proceedings, and apply these
remedies to the Covered Programs. We adopt the Guidelines' approach, again tailored to the Commission's programs and needs,
in applying the exclusions to any participant or principal, which can include individuals, units of government, or legal entities,
engaging in a covered transaction, and we adopt supplemental rules that explain how these regulations will apply for different
tiers of transactions between an agency and a participant, as well as between a participant in one of the covered

  transactions and other parties. We establish the position of SDO at the Commission and will subsequently appoint an SDO whose
  proceedings, unless otherwise designated, will be exempt proceedings governed by section 1.1204(b) of the Commission's ex
  parte rules, which provides that ex parte presentations to or from Commission decisionmaking personnel are permissible and
  need not be disclosed. We anticipate that this approach will encourage the free flow of information in communications involving
  the SDO, permit the SDO to consider relevant evidence, and facilitate expedient yet comprehensive resolution of these proceedings.
  Accordingly, we find it is in the public interest to designate such proceedings as exempt proceedings under our *ex parte* rules. The SDO will review the misconduct, adduce additional evidence if necessary, and determine whether an exclusion remedy
  is warranted.

We follow the Guidelines' approach, which excludes a suspended or debarred entity or individual from all new governmentwide
nonprocurement and procurement programs, but we adopt supplemental rules and a presumption that the SDO will exclude a suspended
or debarred party from existing transactions subject to a reasonable period for customers or end-users to transition to a
new provider. For certain situations, such as where alternate service providers are not available, the supplemental rules
will permit the SDO to consider whether it is in the public interest to grant limited exceptions. To the extent that another
government agency has excluded an entity or individual from participating in its programs, the revised rules will generally
provide for reciprocity and exclude such entities or individuals from Commission programs. We adopt the Guidelines' approach
of imposing a suspension period of up to twelve months and a three year debarment period with a supplemental rule offering
the SDO the option, in appropriate cases, to require the excluded entity or individual to file a petition for readmission
rather than being automatically permitted to resume participation after the conclusion of the exclusionary period. Although
we do not expect the SDO to regularly rely on this option, we permit the SDO to have discretion to require this filing if
warranted.

We also adopt an alternative remedy to suspension and debarment, a Limited Denial of Participation, to address misconduct
that may not warrant an exclusion. The SDO may limit the entity or individual from participating in some or all of the programs
that the revised rules cover or may limit participation in other ways that we discuss in greater detail below.

Such entities or individuals generally may not participate in the relevant programs, must disclose to others involved in transactions
receiving Federal funds that they are excluded from participation, and may not serve, or continue to serve, on Commission
advisory committees and comparable Commission groups or task forces.

As a procedural matter, we acknowledge that in the NPRM we proposed to codify most proposed supplemental suspension and debarment
rules at Title 47, chapter 1, subchapter A, part 16. As detailed below, we instead codify most of the supplemental rules at
Title 2, subtitle B, chapter LX, part 6001, subject to coordination with other agencies regarding the placement in the Code
of Federal Regulations. This change comports with the placement practice of many other agencies that have adopted the governmentwide
suspension and debarment rules with any relevant supplemental rules or modifications.

Suspension and Debarment

The default procedural requirements applicable to suspension and debarment actions are set forth in subparts F, G, and H of
the Guidelines. In the NPRM, the Commission requested comment on Commission-specific modifications to those procedures as
well as proposed supplemental rules specific to our programs. The NPRM also more broadly invited comment on any other changes
that parties proposed to the Guidelines' default rules and procedures.

Definition of, and Relationship Between, Suspension and Debarment

We adopt the Guidelines' definitions of suspension and debarment given their broader range of covered misconduct and the governmentwide
reach of their remedies as compared with the scope of our existing rules. The Guidelines define a “suspension” as “an action
taken by a suspending official . . . that immediately prohibits a person from participating in covered transactions and transactions
covered under the Federal Acquisition Regulations . . . for a temporary period, pending completion of a Federal agency investigation
and any judicial or administrative proceedings that may ensue,” and note that a “person so excluded is suspended.” The Guidelines
define a “debarment” as “an action taken by a debarring official . . . to exclude a person from participating in covered transactions
and transactions covered under the Federal Acquisition Regulations,” noting that “[a] person so excluded is debarred.”

Suspension differs from debarment in several ways. First, a suspension is “a temporary status of ineligibility for procurement
and nonprocurement transactions, pending completion of an investigation or legal or debarment proceeding” whereas debarment
is a remedy that is “impose[d] . . . for a specified period as a final determination that a person is not presently responsible.”
Second, an SDO only needs to find that there is “adequate evidence” to support a suspension but must base a debarment on a
“preponderance of the evidence.” Third, because a suspension usually precedes notice and a chance to be heard, an SDO may
only impose a suspension when it finds that “immediate action is necessary to protect the public interest.” In contrast, a
debarment is imposed after a notice is issued and the respondent has had a chance to contest the proposed debarment. Finally,
the period for suspension is typically capped at twelve months, though the SDO may also extend the suspension for an additional
six months. If legal or debarment proceedings are initiated, the suspension may continue until the conclusion of those proceedings,
but if such proceedings are not initiated a suspension may not exceed 18 months. Additionally, the period of debarment is
based on the seriousness of the cause(s) prompting debarment and typically should not exceed three years. If circumstances
warrant, the SDO may extend the debarment period or issue additional requirements under the supplemental rules adopted by
this Report and Order.

Applicability

We apply the new suspension and debarment rules to nonprocurement transactions only under the Covered Programs. The rules
shall not extend at this time to transactions carried out under the Commission's other currently existing programs, nor shall
they extend to transactions to or from licensees and those with spectrum usage rights (with the exception of transactions
under the Covered Programs where such an entity is a participant). These decisions find ample support in the record.

Under the Guidelines that we adopt, together with supplemental rules, the suspension and debarment provisions apply to those
persons or entities that the rules designate as “participants.” We describe the participants for each of the programs to which
the new rules apply in more detail below. But as a

  general matter, participants subject to these rules are: (1) the beneficiaries and service providers that participate in the
  Commission's programs (typically designated as “Primary Tier” participants); and (2) other entities or persons—including contractors,
  subcontractors, suppliers, consultants, marketing organizations, or agents or representatives of such entities or persons—involved
  with the implementation of these programs (“Lower Tier” participants). Persons at the lower tiers will not be considered participants
  unless they also satisfy additional criteria. Specifically, they must either: (i) have a material role relating to or significantly
  affecting claims for disbursements related to the program; (ii) be considered a “principal” in the transaction; or (iii) be
  involved in a transaction in the program anticipated to be at least $25,000. Given our experience administering the Covered
  Programs, we are inclined to construe broadly the term “involved in” to include the submission of an application for support.
  For example, E-Rate consultants are ”involved in” a transaction when assisting schools and libraries in preparing their application.
  Likewise, marketing representatives are “involved in” transactions every time they assist in signing up a low-income consumer
  in the Lifeline program.

In addition, consistent with section 180.200 of the Guidelines, our rules also treat the E-Rate and Rural Health Care program
beneficiaries, including schools, libraries, and rural health care facilities, that deal directly with the Commission or its
agent, Universal Service Administrative Company (USAC), as “participants” subject to the rules. On the other hand, we do not
treat Lifeline (or former ACP) subscribers or end-users of TRS and NDBEDP services as “participants” subject to the disclosure
and other requirements of our new rules.

Causes and Factors

We generally adopt the NPRM's proposals regarding what causes and factors may lead to suspension and debarments, but for the
reasons explained below, we adjust and clarify our approach in light of the record. The Guidelines expressly identify several
“causes” for suspension or debarment, which include: (1) convictions of, or civil judgments for, fraud or certain offenses—including
any offense “indicating a lack of business integrity or business honesty that seriously and directly affects your present
responsibility;” or (2) violations of the terms of “a public agreement or transaction so serious as to affect the integrity
of a Federal agency program,” which may include willful or repeated violations. The Guidelines indicate that, beyond the specific,
enumerated causes, an agency may exclude a person for “[a]ny other cause that is so serious or compelling in nature that it
affects your present responsibility.” Further, the Guidelines provide each agency flexibility to identify additional causes
for suspensions and debarments. The NPRM proposed to adopt the causes in the Guidelines, proposed several additional causes,
and requested comment generally on whether to adopt an FCC-specific supplemental rule with the additional causes. Further,
as explained in the NPRM, in the case of the TRS program and NDBEDP, causes for suspension and revocation under existing procedures
overlap with, but are not the same as, the new suspension and debarment rules. Therefore, the procedures adopted herein are
intended to supplement, not replace, the existing program procedures authorizing suspension or revocation of certifications
to provide TRS or to participate in the NDBEDP.

We find that adoption of the causes for exclusion articulated in the Guidelines will provide the Commission with flexibility
while affording program participants notice of the types of misconduct that may trigger suspension or debarment. Most commenters
did not object to our adoption of the Guidelines' causes for suspension and debarment or aggravating and mitigating factors
that an SDO may consider. We address other commenters' views below.

Consistent with the Guidelines, we also adopt the examples of “causes” and factors proposed in the NPRM. Our Supplemental
Rule 6001.450(a) is consistent with the “causes,” and subsections (b) and (c) of Supplemental Rule 6001.450 are consistent
with the “factors” that may be considered. In this regard, we build on the longstanding history of the Guidelines and their
widespread adoption. We also find that expressly identifying the types of FCC-specific activity that may result in exclusion
serves the dual purposes of providing further guidance to the SDO and notice to program participants. We find that our supplemental
rule is consistent with the Guidelines.

Our “causes” rule includes potential causes for suspension or debarment that fall into two categories: (i) violations of program-specific
rules that affect program integrity; and (ii) violations of other applicable Commission rules that affect present responsibility.
The first group includes “violation[s] of the terms of a public agreement or transaction,” specific to FCC programs, that
could “be so serious as to affect the integrity of” those programs. The causes that fall into this category include, but are
not limited to: the willful or grossly negligent submission of false or misleading FCC forms or statements or other documentation
to the Commission or to the administrators of the Covered Programs that result in or could result in overpayments of federal
funds to the recipients; the willful or grossly negligent violation of a statutory or regulatory provision applicable to the
Covered Programs; and the willful, grossly negligent, or habitual failure to respond to requests made by the Commission or
the administrators of the Covered Programs for additional information to justify payment or continued operation under their
certifications. We anticipate that in evaluating a person's failure to respond, the SDO will also consider the person's compliance
with any applicable document retention regulations, as well as the quality and credibility of evidence presented. We also
note that not all such violations will be serious enough to affect program integrity; rather, this supplemental rule simply
provides notice of the type of violations that, in light of the relevant facts and circumstances, may be sufficiently serious.

The second group of “causes” include: (1) a single serious violation of Commission rules or repeated violations of Commission
rules; or (2) a single substantial or habitual non-payment or under-payment of Commission regulatory fees. A single serious
violation would be a violation that materially and negatively affects the participant's present responsibility. Similar to
the causes listed in section 180.800(c) of the Guidelines, these additional causes bear upon the present responsibility of
a program participant in doing business with the federal government—specifically, the Commission.

Many of the commenters opposing our proposed supplemental causes rule misapprehended or mischaracterized the proposal. The
NPRM did not propose automatic triggers that would always require exclusion or that would be dispositive in suspension and
debarment proceedings; instead, the NPRM proposed to identify FCC-specific activity to supplement the causes that can trigger
suspension and debarment processes. Under the Guidelines and our supplemental rule, before initiating a proceeding, an SDO
should look to not only the causes identified in section 180.800, but also, consistent with the Guidelines, the FCC-specific
activities identified in

  Supplemental Rule 6001.450, and then evaluate that conduct based on the aggravating and mitigating factors set forth in section
  180.860. Consistent with the Guidelines, an SDO would then consider the unique circumstances of the particular case including
  whether a cause for debarment is “so serious or compelling in nature that it affects [a participant's] present responsibility,”
  since the purpose of the suspension and debarment system is to “ensure[] the integrity of Federal programs by conducting business
  only with responsible persons.” In this regard, we also observe that the extent of noncompliance often bears on Commission
  determinations relating to what actions it will take to address misconduct; the case-by-case determination we adopt here mirrors
  that approach in other contexts such as licensing. We thus reject suggestions to the contrary.

We also disagree with the Joint Association Commenters who claim that a supplemental rule is unnecessary because the Commission
has “existing . . . mechanisms to protect affected funding programs,” or that the proposed rule somehow “duplicate[s]” or
“conflate[s] the FCC's enforcement function to prosecute past violations with the forward-looking purpose of the suspension
and debarment rules.” To the contrary, the rules we adopt are necessary precisely because they are not duplicative, but instead
provide the Commission with needed additional tools to protect the integrity of its programs, including ensuring that federal
funds are not disbursed to irresponsible actors. Rule violations generally will continue to be handled through enforcement
proceedings in the first instance, though investigation of such violations could result in referral for an exclusion proceeding
in appropriate cases. For example, in situations in which a single substantial rule violation or repeated rule violations
(e.g., month after month violation of the same rule, notwithstanding FCC clarifications, guidance, or enforcement actions) demonstrate
an entity's lack of responsibility, an exclusion proceeding would be appropriate and our revised supplemental rule accounts
for this. Further, in light of the robust process protections in our supplemental rules and the clarifications we offer in
this Report and Order, we also reject the suggestion of CTIA and USTelecom that “[p]ermitting suspension or debarment for minor or single rule violations
could reduce participation in the Commission's support programs.”

In turn, administration of funding holds and recovery of improper payments will continue to be handled through existing administrative
and debt collection tools. Additionally, the rules adopted in this Report and Order will not preclude the agency or the program
administrators from undertaking other reviews and actions, such as USAC's ability to lock a registered Representative Accountability
Database (RAD) user's account, to address Commission rule violations or recover improperly disbursed funds. (RAD is a registration
system that USAC uses to validate the identities of service provider representatives and track a representative's transactions
in the National Lifeline Accountability Database (NLAD) and the National Verifier. Service providers' representatives are
required to register for a unique Representative ID (Rep ID) that is linked to the service provider's Application Programming
Interface (API) account. This allows USAC to track and monitor the activity of individual service provider representatives.
If USAC suspects that a representative is engaging in potentially fraudulent activity, it may lock the representative's account.)
Likewise, nothing in this Report and Order or any order of the SDO shall interfere with the Commitment Adjustment Process
(COMAD) through which USAC recovers funds that have been committed or disbursed in error, or otherwise wrongly, by rescinding
those commitments and recovering improperly disbursed funding. An exclusion is a distinct remedy that will remove wrongdoers
both from participation in agency procurement and nonprocurement programs governmentwide. We intend to enhance the tools available
to ensure program integrity and not undermine them.

We also disagree with INCOMPAS, NCTA—The Rural Broadband Association, and ACA Connects—America's Communications Association
(collectively, the Joint Association Commenters) that the NPRM “does not provide parties with fair notice as to when they could face suspension or debarment for the proposed additional
factors, such as compliance history.” We acknowledge that the NPRM used the term “factors” in connection with the OMB Guidelines' “causes” for suspension and debarment, but the Commission cited
the OMB cause rule at the outset of that discussion, 2 CFR 180.800, and separately stated that OMB rules “also” list “mitigating
and aggravating factors,” citing 2 CFR 180.860, which permits a consideration of compliance history. The Joint Association
Commenters had ample notice that the Commission might examine compliance history as an additional cause and/or as an aggravating
or mitigating factor. Our Supplemental Rule § 6001.450(a) is consistent with the “causes,” and subsections (b) and (c) of
Supplemental Rule § 6001.450 supplement the “factors” that may be considered under the Guidelines (and consequently our rules).

The NPRM also proposed that our supplemental “cause” rule identify that suspension or debarment may be appropriate for certain
“willful or grossly negligent” or “willful or habitual” conduct. Some commenters urge the Commission to exclude from the “cause”
rule inadvertent violations, good faith mistakes, and violations resulting from negligence not rising to the level of gross
negligence, noting that in the enforcement context a “willfulness” standard encompasses situations where a participant intended
to engage in conduct but not necessarily to violate Commission rules. We recognize that in certain other contexts, there is
Commission precedent holding that even inadvertent errors can be “willful.” Of course, the Guidelines do not define the term
“willful,” but one federal court has, in the context of the Guidelines, suggested that the word generally applies to knowing
or reckless violations, rather than conduct that is merely negligent. See, e.g., Pillar of Fire, Memorandum Opinion and Order, 32 FCC Rcd 9633, 9635 n.17 (2017); Donald W. Bishop, Forfeiture Order, 8 FCC Rcd 2847, 2847 (1993) (noting that the Commission has interpreted 47 U.S.C. 312(f)(1)'s use of “willful
. . . [to] mea[n] the conscious and deliberate commission or omission of such act, irrespective of any intent to violate the
Act or Commission rules.” (citing authorities)). While this definition of “willfulness” may be narrower than the one in these
Commission cases, that does not significantly change the SDO's ability to suspend or debar participants because the Guidelines
also provide a general catchall basis for debarment for “[a]ny other cause that is so serious or compelling in nature that
it affects [a participant's] present responsibility.”

Moreover, a finding that a “cause” exists does not automatically result in a suspension or debarment. The Commission's implementation
of the statutory enforcement requirements relating to the Do-Not-Call registry for telephone numbers used by Public Safety
Answering Points (PSAPs) is instructive. As detailed in the 2012 PSAP Report and Order, the Commission was required to set
forfeiture amounts within a statutory

  range based on “whether the conduct leading to the violation was negligent, grossly negligent, reckless, or willful, and depending
  on whether the violation was a first or subsequent offence.” The statute did not define the relevant terms. In the 2012 PSAP
  Report and Order, the Commission concluded that in setting forfeitures for PSAP Do-Not-Call registry violations it is reasonable,
  to the extent that terms such as “willfulness” and “gross negligence” have been defined in the enforcement context, to rely
  on those definitions and that the Communications Act and Commission requirements to take into account the “nature, circumstances,
  extent and gravity of the violation and, with respect to the violator, the degree of culpability, any history of prior offenses,
  ability to pay, and such other matters as justice may require,” “encompass the factors necessary to distinguish between negligent,
  grossly negligent, reckless or willful conduct, as used in the Tax Relief Act, without the need for further clarification
  on this point in our rules.” We similarly conclude that it is reasonable and consistent with the Guidelines to take the same
  “case-by-case” approach here.

Further, the Guidelines' list of causes that we adopt in this Report and Order speaks about certain “willful failures” and
“willful violations” as sufficient to support debarment, while having long afforded agencies the flexibility to implement
this rule using their discretion in evaluating both what constitutes a willful act and the seriousness of the conduct. While
the Guidelines provide no express exception for inadvertent errors, the drafters of the Guidelines intended to provide “assurance
that performance matters which are minor or highly parochial in nature would not be used as a basis for debarment actions.”
(52 FR 20361). Consistent with this approach, we agree that in some cases, instances of inadvertent error, especially if set
against a demonstrated history of compliance with program requirements, may be so minor and isolated that they do not provide
an adequate basis for suspension or debarment.

For purposes of both section 180.800 and our supplemental cause rule, the term “willful” will not in the ordinary case include
minor, isolated, and inadvertent noncompliance. On the other hand, the Guidelines clearly permit debarment for a “history
of failure to perform or unsatisfactory performance” of a public transaction if “so serious as to affect the integrity of
a Federal agency program.” A history of violations of program requirements over one or multiple projects may rise to a level
that affects the integrity of an agency program and forms a basis for debarment, even if these violations individually may
each have been considered minor. Similarly, a single violation may be so significant that it affects the integrity of an agency
program—for example, a violation affecting substantial expenditures of public funds. The SDO thus has flexibility to evaluate
the appropriateness of exclusion given the complexity of the rule(s) at issue as well as the facts of a particular case.

We therefore reject CTIA and USTelecom's argument that gross negligence should not be sufficient to support suspension or
debarment and that our supplemental rule should require, at a minimum, a finding of recklessness. We note that consistent
with our Rule 1.17 precedent, the exercise of reasonable due diligence—a standard that should not be difficult for program
participants to meet—is generally sufficient to avoid a finding of simple negligence (and a fortiori of either gross negligence
or recklessness). Thus, for example—as NCTA correctly surmised—a company that submits forms that “ `could result in overpayments'
notwithstanding [its] good faith effort to comply with all applicable rules,” generally would not satisfy the “grossly negligent”
requirement to trigger suspension or debarment proceedings.

We are also not persuaded by C Spire's arguments that every potential cause in our supplemental rule should “make reference
to statutory or regulatory violations, not merely a type of conduct,” or that words like “repeat” and “habitual” are overly
vague.” First, the Guidelines include among their causes a “history of failure to perform or of unsatisfactory performance,”
without specifying the length of that “history.” The Guidelines also permit suspension or debarment based on a participant's
lack of “business integrity or business honesty” that affects “present responsibility,” which are not linked to specific statutory
or regulatory violations. Second, if an exclusion proceeding is commenced, a participant can present evidence to the SDO that
its conduct falls short of “repeated” or “habitual”—or does not qualify as a regulatory or statutory violation—and raise other
mitigation arguments. We also decline to identify the “number of . . . violations” that can give rise to suspension or debarment
as requested by C Spire, as this would be inconsistent with the kind of flexibility the Guidelines contemplate and give agencies
to consider the facts and circumstances of each case. For these reasons, we are also not persuaded by SHLB-SECA's arguments
that suspension or debarment should be invoked only for “fraud or repeated willful violations” because some rules, in their
view, “use a strict liability standard” while other rules may be considered vague. As we have stated repeatedly, suspension
and debarment decisions will be determined on a case-by-case basis by which an SDO may consider mitigating circumstances even
for such rules as SHLB-SECA may characterize as rules imposing strict liability.

The Joint Association Commenters also objected that our proposed supplemental rule—insofar as it permits suspension or debarment
for “habitual non-payment or under-payment of Commission regulatory fees or of required contributions”—is “in tension” with
the Guidelines, which permit suspension or debarment for “[f]ailure to pay a single substantial debt, or a number of outstanding
debts” only if the “debt is uncontested” or the debtor's “legal and administrative remedies have been exhausted.” But habitual
nonpayment or underpayment of fees generally could also qualify as “repeated violations of Commission rules,” permitting exclusion
on that separate and independent basis. And in any event, the Guidelines permit an agency to identify what activity is “so
serious or compelling” that it implicates a participant's “present responsibility.” Further, as already discussed extensively,
suspension and debarment decisions will be determined on a case-by-case basis in which an SDO may consider both aggravating
and mitigating circumstances. A substantial single or habitual non-payment or under-payment of fees or contributions could
be so egregious, in the context of a particular case, as to merit suspension and debarment, notwithstanding the fact that
the participant has not exhausted its legal or administrative remedies.

Aggravating and Mitigating Factors

Under the Guidelines, the SDO should consider aggravating and mitigating factors in debarment proceedings, including specific
factors set forth in the Guidelines. We also conclude that the SDO may consider aggravating and mitigating factors in suspension
proceedings. Although the Guidelines do not explicitly provide for such considerations, the Guidelines do require a suspending
official to consider “[a]ny further information and argument presented in support of, or [in] opposition to, the suspension.”
The Guidelines also give the suspending official “wide discretion,” stating that

  the official may, for example, “infer the necessity for immediate action to protect the public interest either from the nature
  of the circumstances giving rise to a cause for suspension or from potential business relationships or involvement with a
  program of the Federal Government.” Accordingly, we determine that the SDO should consider aggravating or mitigating factors
  during suspension and debarment proceedings, pursuant to 2 CFR 180.860 as well as the additional factors we adopt here.

We adopt the aggravating and mitigating factors provided in the Guidelines. In addition, we adopt a supplemental rule under
which the SDO may consider additional mitigating factors. Among such mitigating factors would be remedies that took effect
after the misconduct occurred that the SDO considers likely to prevent misconduct going forward, as well as whether proceedings
to address alleged misconduct (such as non-payment of regulatory fees) may be pending before the Commission. We decline, however,
the request by the Joint Association Commenters and CTIA and USTelecom to create any safe harbors for specific program violations
because of the discretion already afforded to the SDO to evaluate each situation on its own merits. Further, we note that
a party can often mitigate risk from inadvertent violations, and we recommend that parties do so wherever possible. We also
decline to adopt the Joint Association Commenter's request for a specific procedure to protect a self-reporting service provider
from suspension action for a period of time after the provider notifies the Commission of a potential issue or following adoption
of codes of business ethics and conduct as suggested in the record. While taking such self-corrective actions is critical
and could qualify as a mitigating factor, the Commission should retain flexibility to proceed to exclusion, where appropriate,
notwithstanding a participant's efforts at self-governance.

The NPRM also specifically asked whether, during a debarment proceeding, the Commission should consider the impact that debarment
would have on the provision of services to customers and end-users. We agree that impact on customers and end-users should
be considered during suspension and debarment proceedings, and there is support for doing so in the record, but we conclude
that we should not treat the potential impact on customers and end-users (including sole source considerations) as a rationale
for allowing a person whose misconduct otherwise warrants an exclusion to avoid the imposition of a suspension or debarment.
Rather, we conclude that the better approach is to address an exclusion's potential impact on customers and end-users in the
context of whether or to what extent to permit an excluded party to continue to provide services for a limited duration, and
under what terms and conditions. The SDO shall make determinations about transitions and continuation periods in the manner
described in more detail below.

Evidentiary Standards

The Guidelines require “adequate evidence”—defined as “information sufficient to support the reasonable belief that a particular
act or omission has occurred”—for suspension and a “preponderance of the evidence” for debarment. The NPRM requested comment
on whether the Commission should adopt these evidentiary standards, as well as whether the Commission should adopt any supplemental
evidentiary standard rules.

We received limited comment on the proposal, which we address below, and we now adopt the Guidelines' evidentiary standards.
Other federal agencies across the government employ these standards, and we find that adopting a similar framework will facilitate
governmentwide reciprocity and promote ease of application.

Contrary to CTIA and USTelecom and NCTA's claims, we are not persuaded that any harm will result from allowing suspension
based on “adequate evidence,” as opposed to a “preponderance of the evidence.” To initiate a suspension under the “adequate
evidence” standard in the Guidelines, an SDO still must independently consider whether there is “information sufficient to
support the reasonable belief” that a “cause” for suspension has occurred—which also requires the SDO to consider whether
the participant's alleged conduct implicates whether that participant is “presently responsible.” While we do not adopt a
rigid definition of “adequate evidence,” the SDO may find analogies in caselaw on how to apply the “adequate evidence” standard
to be instructive. See, e.g., Horne Bros. v. Laird, 463 F.2d 1268, 1271 (D.C. Cir. 1972). Unsubstantiated assertions made by a third party (e.g., an unsuccessful E-Rate competing bidder) would likely not satisfy this standard. Moreover, the Guidelines and our rules also
provide procedural protections (including a notice of the reasons for suspension upon initiation and a timely opportunity
to respond and present evidence), ensuring that, even if an initial suspension decision was erroneously based on materially
incomplete or incorrect information, it could be quickly corrected. Specifically, we expect that the SDO will provide a suspension
notice containing sufficient information for the suspended person to respond to the notice and identify any relevant facts
or circumstances. In this regard, such notices should not be based on “mere suspicion, unfounded allegation, or error.” Transco Sec., Inc. of Ohio v. Freeman, 639 F.2d 318, 322-23 (6th Cir. 1981). We find that it would be reasonable to apply an “adequate evidence” standard under these
circumstances, particularly given that suspensions are temporary.

In response to comments, we further clarify the types of findings on which the SDO may rely. As the Joint Association Commenters,
CTIA and USTelecom, and NCTA noted, section 504(c) of the Communications Act would preclude an FCC SDO from issuing a suspension
or proposing a debarment based solely on the issuance of a Notice of Apparent Liability (NAL). However, section 504(c) does
not preclude the SDO's reliance on any facts underpinning an NAL. Section 504(c) provides that “[i]n any case where the Commission
issues a notice of apparent liability . . . that fact shall not be used, in any other proceeding before the Commission . .
. to the prejudice of the person to whom such notice was issued . . . .” To be clear, section 504(c)'s prohibition on using
NALs is limited to the Commission's use of “that fact”— i.e., the issuance of the NAL. The Commission has previously addressed this issue in the 1999 Commission's Forfeiture Policy Statement and explained that “[t]he statute says that the issuance of an NAL shall not be used against a person unless the forfeiture
has been paid or the person is subject to a final court order to pay. It does not say that the facts underlying prior NALs
shall not be used against a person.” This is supported by the legislative history. Thus, section 504(c) does not prohibit
the Commission, and by extension the SDO, from considering the facts underlying the NAL in another proceeding. An SDO may
therefore make determinations in an exclusion proceeding— i.e., impose a suspension or propose a debarment—based on the facts underlying an NAL if those satisfy the Guidelines' evidentiary
standards. In proceedings before the SDO, however, parties may submit evidence disputing the facts underlying the NAL, should
they choose to do so. We clarify this point in response to the Joint Association Commenters' concerns

  about the use of an NAL in proceedings before the SDO. Similarly, because an exclusion decision must satisfy these evidentiary
  standards based on the SDO's rigorous review of the record, we reject the recommendation of the Joint Association Commenters
  that the Commission “expressly exclude USAC decisions from serving as causes for suspension or debarment.” An SDO may consider
  findings by a program administrator in an audit report or commitment adjustment if those findings satisfy the Guidelines'
  evidentiary standards. That is so even if an appeal of the administrator's decision is pending. But if the participant contests
  the exclusion, including contesting certain facts in the record of the proceeding, the SDO must render a final decision based
  on his/her independent evaluation of the record. As a corollary to this principle, in the event a response to an NAL has been
  filed or a USAC decision is subject to a request for FCC review, or the record otherwise has developed in direct response
  to the document or decision being referenced, we direct the SDO to consider that additional evidence independent of a participant
  contesting an exclusion. We emphasize that the SDO must exercise independent judgment. The SDO may not, consistent with section
  504(c), presume based on the issuance of the NAL that the Guidelines' standards have been satisfied. We agree with CTIA that
  the same logic would apply equally to the use of factual allegations set forth in complaints before the Commission in pending
  proceedings because, like NALs, allegations made in pending Commission proceedings are not final.

In contrast, we note that in suspension proceedings, pursuant to section 180.735(a)(1) of the Guidelines, respondents may
not challenge the facts if the “suspension is based upon an indictment, conviction, civil judgment, or other findings by a
Federal, State, or local body for which an opportunity to contest the facts was provided.” Under this rule, which we adopt,
facts contained in Commission orders for which an opportunity to contest the facts was provided, including those issued by
bureaus and offices on delegated authority, may not be challenged if relied upon by the SDO in issuing the suspension. We
recognize, however, that orders may be affected by judicial decisions or modified by the issuing body itself. Therefore, we
adopt section 180.735(a)(1) with a modification to allow respondents to bring to the SDO's attention information showing that
the findings in the original Federal, State or local orders are no longer accurate where (i) an order has been reconsidered
or modified by the issuing body (or by its staff acting on delegated authority), or (ii) an order has been remanded, reversed,
or vacated on judicial review. For debarment proceedings, we adopt a new rule providing that the SDO, in consultation with
the Office of General Counsel (OGC), shall apply the principles of collateral estoppel to determine whether a respondent may
challenge findings set forth in (i) Commission orders (including orders of bureaus or offices issued on delegated authority)
for which the opportunity to contest the facts was provided or (ii) orders of any other Federal, state, or local body for
which the opportunity to contest the facts was provided. We also recognize that Commission-level decisions can be subject
to petitions for reconsideration and actions on delegated authority can be subject to applications seeking full Commission
review. In those cases, it either typically (in the case of reconsideration) or necessarily (in the case of an application
for review) is the full Commission that resolves those requests. Consequently, where the facts material to an exclusion decision
issued by the SDO are contested in a pending petition for reconsideration of a Commission-level decision or an application
for review of an action on delegated authority, the SDO's exclusion decision shall take effect but shall be referred to the
full Commission for review. In this scenario, the required written decision by the SDO for purposes of 2 CFR 6001.135(a) would
be the referral of the matter to the full Commission. Consistent with the policy reflected in 2 CFR 6001.135(b), the full
Commission will attempt in good faith to issue a written decision within 180 days of receiving the referral.

Exceptions to Exclusion

The Guidelines permit an agency head to “grant an exception permitting an excluded person to participate in a particular covered
transaction.” The NPRM asked whether we should adopt this rule and whether we should identify factors for granting such an
“exception” or whether that determination should be left solely to the discretion of the full Commission or the Chair. The
NPRM tentatively proposed that if any factors are enumerated, one consideration should be the extent to which the exclusion
would substantially impair delivery of services to customers and end-users. The NPRM asked whether there are additional factors
that should be considered. In addition, the NPRM asked whether the Commission should delegate authority to the bureaus overseeing
the programs to grant such exceptions. We adopt an approach by which the SDO in the first instance will determine whether
good cause exists to grant an “exception” to the exclusion remedy in a particular case.

We agree that in appropriate cases, exceptions to both Commission exclusions and to those issued by another federal agency
should be permitted. We thus adopt sections 180.135 of the Guidelines with the modifications set forth in Supplemental Rule
6001.125. This supplemental rule delegates authority to the SDO in the first instance to decide whether to “grant an exception
permitting an excluded person to participate in a particular covered transaction.” An excluded party, however, may seek reconsideration,
or file an application for review (AFR) with the Commission, as provided for in Supplemental Rule 6001.125(f). Commenters
expressed support for this approach. We intend for this delegation to apply for purposes of other rule sections in the OMB
Guidelines that refer to section 180.135 of the Guidelines. We thus decline to adopt other possible approaches under the Guidelines,
which would allow the Chairperson or perhaps even the full Commission to act on exceptions in the first instance. The SDO's
decisions will remain subject to the AFR procedures available for decisions of a Commission component, as we describe herein,
thereby providing for appropriate oversight.

Under the supplemental rules that we adopt herein, the SDO is responsible for determining appropriate transition and continuation
periods before issuing any suspension or debarment order, and in that process must consider whether, subject to the limitations
described herein, an exception to permit extended continuation periods to ensure delivery of services to customers and end-users
would be appropriate. Because the SDO will be responsible for conducting these proceedings in which these transitional issues
(including sole source services) are closely evaluated, the SDO is in a suitable position to assess the facts of each case
and determine whether to grant exceptions for covered transactions and to address the relevant scope of any applicable limitations
that might apply. The proponent of an exception bears the burden of proving, by a preponderance of the evidence, any facts
asserted.

Consistent with our discussion of transitions and continuations below and to better protect program integrity, we find that
any exceptions shall be subject

  to appropriate conditions such as mandatory audits, additional reporting requirements, compliance agreements (with approval
  of OGC), monitoring, or any other forms of effective oversight supplemental to those already provided under FCC programs.
  We also adopt the NPRM's proposal, strongly supported by commenters, that the availability of alternate service providers
  to serve customers and end-users in a given area is one relevant factor for the Commission to consider in deciding whether
  to grant an exception to Commission exclusions or to those issued by another agency. If a participant contends that it is
  the sole provider of services, the SDO shall afford the bureau that administers the program involved an opportunity to address
  this matter and rebut those assertions if necessary.

We note that for purposes of the Lifeline, E-Rate, or RHC programs, where exclusions involve resellers, there will almost
always be alternate sources of service providers for customers and end-users. That is because resellers by definition purchase
their services or equipment from underlying carriers or from a manufacturer or other manufacturer partner and then resell
the services and equipment to their own customers and end-users. Our experience with debarments and other enforcement actions
in the Lifeline, E-Rate, and RHC programs has demonstrated that Lifeline subscribers, schools, libraries, and health care
providers are able to transition from the reseller to the underlying carrier or to another provider. We recognize, however,
that some participants in the E-Rate or RHC programs may need to seek new bids for services and/or equipment, and the SDO
should provide a sufficient transition period for this to occur.

Transitions and Continuations

Under the Guidelines, a program participant may choose to continue with an excluded entity “if the transactions were in existence
when the Federal agency excluded the person.” The NPRM requested comment on that approach as well as on whether continuation
should be permitted under those programs in which beneficiaries are receiving services on a month-to-month (or similarly short
term) basis. We explained in the NPRM that section 180.310 of the Guidelines, if adopted, would constitute a significant change
from policies currently in effect for the E-Rate program that preclude the distribution of any USF funds to debarred entities
or entities that have violated program rules. For the reasons explained below, we conclude that the continuation policies
set forth in section 180.310 of the Guidelines, and the related provisions contained in sections 180.315(a) and 180.415, should
not be applied to the programs subject to this Report and Order. We instead adopt a presumption that the SDO require beneficiaries
receiving services from an excluded provider to transition to new providers, subject to limited exceptions described below.
To ensure consistency in eliminating bad actors from program participation, whether as participants or principals, we conclude
that the related continuation policies set forth in section 180.315 of the Guidelines should not be applied to the programs
subject to this Report and Order and that participants should promptly secure the services of other principals (if needed)
for their covered transactions in order to maintain the integrity of Commission programs.

The rules we adopt on transitions and continuations reflect our experience with current rules in the E-Rate or RHC programs
that require beneficiaries to change providers after an exclusion or findings of rule violations. Further, in most of our
programs there are alternative providers to whom beneficiaries can transition, whether for telecommunications or other services
from participants or ancillary services from principals. For example, for participants (e.g., beneficiaries, consultants, and service providers) who are resellers, we expect that there will be an underlying carrier that
may be able to continue providing services to customers and end-users. We note that some principals, such as consultants or
management companies, may be providers of services for whom, in our experience, substitute providers should be readily available.
Other principals such as officers, directors, or program managers, may be internal to organizations. In such cases, an exclusion
would require that the organization remove those excluded persons from any role and duties in covered transactions (including
oversight responsibilities) and transfer their duties for such transactions to other individuals as may be needed.

Additionally, many of the Lifeline consumers receive service on a month-to-month basis. If we were to treat such relationships
as long-term contracts under sections 180.310 and 180.315 of the Guidelines, in practice any exclusion would become meaningless
because excluded providers could continue to provide service indefinitely. That is not an acceptable outcome. Further, in
most service areas there are multiple providers of these services such that consumers can readily find alternative providers.

Therefore, for both suspensions and debarments, we will continue and extend to all programs subject to this Report and Order
the practice of requiring alternative providers and other mitigation measures to help transition customers and end-users from
an existing, excluded provider to alternative providers. We recognize, however, that for some programs, the availability of
alternative providers may be limited or longer transition periods may be necessary. We therefore grant authority to the SDO
to both fashion reasonable transition periods that protect beneficiaries from loss of services and also to grant exceptions
pursuant to Supplemental Rule 6001.125 for that purpose subject to administrative agreements (such as compliance agreements)
and agency oversight as appropriate. The SDO's determinations on transitions and continuations should reflect the overarching
goal of the OMB Guidelines to protect program integrity by limiting or eliminating program participation by bad actors, while
also ensuring continuation of services to beneficiaries. Funds for Learning has advanced the premise that, “[w]here at all
possible, suspension and debarment should not interfere with the continued receipt of services to [the] . . . institutions
and the communities they serve.” Although this is an important consideration—and perhaps even a critical one in certain circumstances—we
must balance it with the need to protect the public, including individual consumers, from waste, fraud, and abuse that could
result in deleterious effects for a specific Commission program or group of programs.

In reaching these conclusions, we have carefully considered the comments of SHLB-SECA, which recommended that beneficiaries
such as schools, libraries, and health care providers should have the option to receive uninterrupted support from a suspended
or debarred entity for the duration of the contract, rather than being required to substitute a new service provider through
a service provider or Service Provider Identification Number (SPIN) change, if allowable under state and local procurement
rules, or rebidding the contract or service. Funds for Learning similarly encouraged us to “allow participants to receive
service from a suspended or debarred entity for the duration of the USF-supported contract or to substitute a new provider,
whether the services are on a fixed or on a month-to-month basis.” Our experience

  with service provider substitutions under our current rules, however, persuades us that we can protect against service disruptions
  to beneficiaries, including under the E-Rate and RHC programs, without allowing excluded service providers to indefinitely
  continue to provide services and receive support under these programs. The SDO shall be responsible for determining the terms
  and conditions of any transitional periods or, in rare cases, permit exceptions to allow for continuations of a limited duration
  where, for example, no alternative providers are presently available or transitioning to another service provider will require
  additional steps (perhaps under state agency requirements). We further direct the SDO to work closely with the bureaus and
  offices responsible for the programs, as well as OGC, to develop transition or continuation plans. Where appropriate, the
  SDO's transitional terms might include compliance agreements, enhanced agency oversight, and other safeguards designed to
  eliminate the potential for further misconduct. The review of how exclusions will apply as to agency procurement transactions
  in this regard shall be made by the SDO, in consultation with the affected bureaus or offices, and with OGC, on a case-by-case
  basis. Any compliance agreements will require the approval of OGC.

To achieve these goals, the SDO first will need to closely evaluate the particular services provided by the party and the
availability of alternate providers in the geographic areas served, the typical terms of any contracts that may exist between
the provider and its beneficiaries, and any federal or state certification requirements applicable in programs such as the
NDBEDP or TRS program. If the SDO determines that a continuation is necessary, the SDO shall fashion an order (or provide
for an administrative agreement) that ensures an expedited transition to alternative providers; we emphasize that transitions
from excluded entities should be accomplished with all deliberate speed in order to protect program integrity and remove bad
actors from our programs. The SDO shall require that during any transitional period, the excluded providers continue providing
services to their beneficiaries consistent with our rules and with their contractual obligations. In those cases where obtaining
an alternative provider may require new competitive bidding or provider certifications, the SDO shall ensure that the transition
period is sufficient to allow for that process.

The equities as applied to marketing organizations, enrollment representatives, or consultants who have been suspended or
debarred counsel that we adopt a different rule in that context. The SDO shall require that those entities or persons immediately
cease their operations related to covered transactions. No exceptions or transitional periods shall be permitted. Program
participants shall not have the option to continue doing business with such entities or persons during the period of their
suspension or debarment. In our experience, there are many persons and organizations seeking to perform such marketing and
consulting services, such that service providers should have ample options for securing replacement vendors. Further, immediate
discontinuation of such marketing and consulting services will not have adverse effects on current customers or end-users
of the service providers and will help to avoid an excluded actor continuing to benefit under our programs.

Additionally, we acknowledge that the NDBEDP and TRS programs present unique circumstances for the SDO to consider in our
transition and continuation framework. We note that the Commission certifies a state TRS program for each state, and each
state program manages TTY-to-voice TRS, Speech-to-Speech Relay Service, and analog Captioned Telephone Service within the
state. Generally, each state program contracts with one provider to offer service within the state, although states have the
option to contract with different providers for the different forms of TRS, and states also have the option to contract with
multiple providers of the same service or services. Because state programs are subject to the Commission's mandatory minimum
standards, and the Interstate TRS Fund, which is overseen by the Commission, is responsible for payment of the interstate
minutes originating in any given state, suspension or debarment of a provider that is contracted by a state program would
effectively debar that provider from serving the state. If the contract provider in a state is debarred from providing service,
the state program would need to contract with a new provider to maintain the state program's eligibility under the Commission's
mandatory minimum standards. Thus, for example, because only a single NDBEDP provider is certified to serve each geographic
area, suspended or debarred NDBEDP service providers may need to continue to provide services to program participants, with
appropriate safeguards as directed by the SDO, until another entity is certified to operate within the respective jurisdiction.
To facilitate the transition to another provider, the Consumer and Governmental Affairs Bureau (CGB) should request an NDBEDP
certified entity that has been suspended or debarred to voluntarily relinquish its certification within a deadline and explain
that if the entity does not voluntarily relinquish its certification, then a revocation proceeding pursuant to 47 CFR 64.6207(h)
will be initiated. Similarly, if a TRS provider is suspended or debarred and is the only entity offering a particular form
of TRS in a jurisdiction, an alternative provider will need to be certified by the Commission or contracted by a state TRS
program to provide those services.

Under those circumstances, we anticipate that the SDO will allow a suspended or debarred TRS provider to continue to provide
services to program participants until another entity is certified by the Commission or contracted by the relevant state TRS
program to provide the form of TRS involved. The Commission will expedite its certification review to the maximum extent possible
to facilitate a rapid transition to an alternative provider and will encourage the state authorities to act similarly. Further,
the Commission will follow its current notice and hearing process for suspending or revoking a TRS provider certification
or a state TRS program certification. These procedures will ensure that any exclusion action is implemented consistent with
applicable Commission rules to safeguard Commission programs and program beneficiaries' needs.

We anticipate that transitional periods to alternative providers will vary from program to program, and the SDO will need
to take individual circumstances into account. In extraordinary situations where alternative providers cannot be identified
as quickly as initially anticipated, the SDO may permit a continuation beyond the initial transition period, but any extended
transition should be limited and as short as feasible. After the SDO determines the length of the initial and any subsequently
extended transition period, the SDO shall require excluded providers to send timely notices to affected customers and end-users
of the need to transition to alternative providers.

Notices to affected customers or end-users should include: (1) a statement that the participating provider has been suspended
or debarred; (2) a statement that the provider will continue to

  provide services until the date certain as specified in the suspension or debarment order; (3) a statement that users should
  obtain service from another provider; and (4) a listing of the names and contact information for other providers authorized
  to supply that service in the jurisdiction. In evaluating transition periods and notice requirements, especially for the Lifeline
  program, the SDO should also consider any transition and notice provisions that the Commission has previously adopted.

The SDO, in consultation with the bureaus, should also take appropriate steps to ensure that a suspension or debarment is
implemented in a manner consistent with existing Commission requirements and the needs of program beneficiaries.

Interagency Reciprocity

Under the Guidelines, an agency's determination to exclude an entity from its program is afforded governmentwide reciprocity;
that is, an entity that is suspended or disbarred by another federal agency is automatically suspended or disbarred from the
Commission's nonprocurement and procurement programs. However, the Guidelines also permit an excluded entity to petition the
agency for an exception to the governmentwide exclusion. The NPRM explained that adoption of the Guidelines could trigger
the suspension or debarment of persons or entities that currently participate in the Commission's programs through governmentwide
reciprocity. The NPRM requested comment on whether there were any program participants currently excluded by another agency,
and, if so, whether they proposed any modifications or supplemental rules to allow them to continue to participate in Commission
programs.

The NPRM also requested comment on how a person excluded by another agency should advise the Commission of the exclusion and
request an exception to reciprocity. The NPRM further asked if the Commission should be required to act within a certain period
after receiving such a request and whether the agency should issue exceptions, if appropriate, through a negotiated agreement
that would include mandatory independent audits, additional reporting requirements, or similar forms of oversight. The NPRM
requested comment on how the Commission will provide information regarding entities suspended or debarred by the Commission
to the governmentwide Systems of Awards Management Exclusions (SAM.gov Exclusions). We received no comment on these requests.

We generally adopt the Guidelines' reciprocity rule; entities excluded by the Commission SDO will be excluded from nonprocurement
programs governmentwide, and entities excluded by other federal agencies' SDOs will be excluded from the Commission's nonprocurement
programs subject to this Report and Order. Additionally, we adopt with modifications our proposed supplemental rules on exceptions
to reciprocity and explain the procedures necessary to ensure that the SDO can appropriately evaluate whether and to what
extent to grant exceptions to exclusions issued by other agencies. Under Supplemental Rules 6001.120(d) and 6001.125, we delegate
authority to the SDO to entertain petitions for exceptions from interagency reciprocity.

The procedure we adopt is a two-step process, consisting of a preliminary review by the SDO and the SDO's subsequent exception
determination, if warranted. First, we require in Supplemental Rule 6001.120, as proposed in the NPRM, that FCC program participants
or principals excluded by another agency promptly notify the Commission within ten business days after the participant has
received notice of the exclusion so that the Commission may consider this information in connection with participation in
the programs that the Commission administers. We also require that any participant or principal who is currently included
in the SAM.gov Exclusion, based on conduct occurring before the effective date of this rule, provide notice of such exclusion to the Commission
within 30 days after these rules become effective. Such notifications shall be made by email and by letter to the head of
the bureau or office responsible for the program(s) in which the excluded entity participates, the administrators of any affected
program, the Commission's General Counsel, and the Commission's Managing Director. We delegate authority to OGC, in consultation
with these bureaus and offices, to revise these methods where appropriate. Participants or principals excluded by other agencies
may temporarily continue with existing covered transactions under FCC programs but may not enter into new transactions unless
an exception is granted. Such participants and principals must also comply with any orders for transitions or limited continuations
that the SDO may issue.

When advised of an exclusion issued by another agency, the SDO shall conduct a preliminary evaluation, upon the request of
a participant or an excluded person or an FCC bureau or office responsible for administering the affected programs, to determine
whether to grant an exception based on factors such as when the underlying misconduct occurred, when the other agency issued
the exclusion, whether the excluded person is a sole source provider of services under an FCC program, and how much longer
the exclusion will remain in effect. The SDO shall consult with OGC and the bureaus and offices responsible for administration
of any affected programs or covered transactions in making this determination. If no exception is granted after the preliminary
evaluation, the entity remains excluded from Commission programs. The SDO will promptly notify the excluded party and initiate
informal proceedings on transitions to alternate providers or limited continuations, if necessary. The notice shall further
state that the excluded party is immediately barred from enrolling new customers or end-users in any Commission programs subject
to our suspension and debarment rules, may not enter into any new covered transactions or provide services for a covered transaction,
and has 30 days to file a response in which the excluded person may seek an exception from Commission reciprocity.

Requests for an exception from an exclusion issued by another agency following a preliminary determination that no exception
is warranted must state the reasons for the requested exception and provide any supporting evidence. After the informal proceedings
are concluded, the SDO will issue a decision that rules on any exception request filed by the excluded person and may grant
the exclusion only if doing so is supported by a preponderance of the evidence. In any event, exceptions should be granted
only infrequently, particularly in the context of the criteria that the SDO shall consider in evaluating whether to permit
an exception. If the exception request is not granted, the decision will also set forth the appropriate transition or continuation
requirements applicable to the exclusion (including customer notice requirements) consistent with Supplemental Rule 6001.310.
The SDO will consult with OGC and the bureaus or offices responsible for administration of any affected programs before issuing
these rulings. Any exceptions granted by the SDO may be subject to appropriate conditions such as mandatory audits, additional
reporting requirements, compliance agreements (with approval of OGC), monitoring, or

  any other forms of effective oversight supplemental to that already provided under FCC programs.

We believe that the procedure we have created for the SDO to consider how to implement reciprocity creates sufficient opportunity
for the party excluded by another agency to participate in this process, and we modify our proposed supplemental rule. We
also require a participant that is not already registered with SAM.gov to do so within 10 days of the date that its suspension or debarment becomes effective. We note that the timing of this registration
requirement will differ in cases of suspension, which generally becomes effective when first imposed, and debarment, which
becomes effective only when the SDO issues a final decision at the close of the proceedings.

Alternative Remedies or Settlements

We also adopt potential alternative remedies within the suspension and debarment framework to resolve these proceedings without
resorting to an exclusion, if appropriate. The Guidelines allow agencies to settle exclusion actions when it is in the best
interest of the government and specifically authorize the use of administrative agreements as the settlement framework. The
NPRM invited comment on whether the SDO should have authority to tailor exclusions for particular circumstances or propose
remedies in lieu of exclusion. The NPRM asked commenters to address whether the SDO should impose alternative remedies after
consulting with appropriate bureau and office staff with knowledge of how entities are certified (in the case of TRS or NDBEDP)
or how alternative remedies might impact delivery of services to beneficiaries. The NPRM also asked what types of alternative
remedies should be considered, how such remedies should be fashioned, and when alternative resolutions might be appropriate.

There was consensus in the record that the SDO should have authority to fashion settlements (often referred to as administrative
agreements in the suspension and debarment context) short of imposing exclusions. Moreover, the Interagency Suspension and
Debarment Committee (ISDC) encourages agencies to use administrative agreements, which are increasingly being imposed as alternatives
to exclusion.

We agree and adopt a modified supplemental rule on alternative remedies to suspension and debarment that will include administrative
agreements, as contemplated by sections 180.635 and 180.650 of the Guidelines. The modified rule we adopt, however, recognizes
that OGC possesses substantial expertise in designing administrative agreements (including compliance agreements under our
programs). We require that the SDO consult and coordinate with OGC in structuring any administrative agreements and require
the approval of OGC before they may be adopted. In addition, under the rules we adopt, administrative agreements may not:
(i) impede or impair the Commission's authority to seek full recovery under its debt collection authority of any improper
payments made to the settling party; or (ii) purport to resolve any claims the Government may have against the settling party,
such as pending NALs issued by the Enforcement Bureau or causes of action under the False Claims Act or other similar laws
or common law claims. Similarly, should a party propose a “global” settlement with the Government on matters before the SDO
and pending in other forums, then such a settlement would require the participation and approval of all relevant decisionmakers
at the Commission, the Department of Justice, and any other agencies or entities involved, as appropriate.

We also agree with WISPA and SHLB-SECA that the SDO should determine whether an administrative agreement is the appropriate
remedy on a case-by-case basis. We note, as described by the Joint Association Commenters, that one factor that could weigh
in favor of resolution through administrative agreement is a participant's “self-report[ing] an issue to the FCC,” depending
on the circumstances (e.g., the severity of the violation or misconduct, and whether it was reported promptly and remediated when discovered). Based on
the record, we also find that administrative agreements are most effective if, in addition to training and compliance obligations,
they require reporting, auditing, and/or independent monitoring.

Period of Debarment

The typical debarment period under the Guidelines is not more than three years, but may be adjusted based on the “seriousness
of the causes” for debarment and evaluation of the factors listed in the Guidelines. Further, a debarred person may ask the
SDO to reconsider the debarment decision or to reduce the time period of the debarment. The NPRM asked whether we should adopt
the standard debarment period and whether there are additional mitigating factors beyond those set forth in the Guidelines
that may warrant a reduction in the debarment period, including the absence of an alternative service provider or the participant's
post-debarment adoption of compliance agreements. Based on the record, we adopt the standard three-year debarment period under
section 180.865 of the Guidelines, which provides the SDO with flexibility to consider adjustments. We also find that a debarred
participant may submit a petition under sections 180.875 and 180.880 of the Guidelines for a reduction of the debarment period
based on, among other things, the absence of other service providers or the participant's post-debarment adoption and satisfactory
implementation of appropriate compliance agreements.

The NPRM additionally asked whether schools, libraries, and health care providers should be treated differently from other
USF participants with respect to the period of debarment. SHLB-SECA stated that it is “absolutely necessary” to do so because
such institutions are not “commercial enterprise[s]; these are the non-profit organizations that the FCC's programs were designed
to benefit.” As we have already made clear, the SDO will consider the totality of the circumstances, such as the effect of
debarment on the broader public interest, including on the beneficiaries of FCC programs. All of the FCC programs that will
be subject to these suspension and debarment rules are intended, ultimately, to benefit unserved or underserved populations—regardless
of the type of entity or individual obtaining program services, but all participants must also conduct their business in a
manner designed to prevent waste, fraud, or abuse.

The NPRM also requested comment on a proposed rule that would permit the SDO to determine that a participant's conduct was
so egregious as to require it to petition for readmission to Commission programs. We received no comments on this proposal
and now adopt the proposed readmission rule. Although we expect that the SDO will not regularly rely on this option, we find
that, in the appropriate situation, it will protect the public interest by adding an additional opportunity for review before
permitting the worst actors from returning to FCC programs. Where a petition for readmission is required, the debarred party
as petitioner must demonstrate that it has implemented sufficient remedial actions to avoid future program violations. These
requirements

  shall apply regardless of any change of ownership of an excluded entity. If the entity fails to file a required petition or
  if the request is denied, the SDO may extend the debarment for an additional period under section 180.885 of the Guidelines
  in order to protect the public interest.

Additional Process Considerations

We resolve several additional procedural questions that the Commission raised in the NPRM to ensure that implementation of
any new rules would be efficient and fair. In their comments, parties also offered proposals for other improvements or modifications
which we address in this section.

Appointment and Designation of the SDO. Under our legacy rules, the Enforcement Bureau has authority to resolve universal service suspension and debarment proceedings.
The NPRM requested comment on whether we should revisit that delegation given our proposal to significantly expand the scope
of the Commission's suspension and debarment rules. Specifically, the NPRM asked whether the Chief, Enforcement Bureau (or
designee) should serve as SDO, and, if so, whether it would be appropriate for that person to conduct proceedings in which
the individual was involved in any capacity. The NPRM also asked whether persons other than Enforcement Bureau personnel should
be considered for appointment as SDOs, and, if so, to specify their qualifications, identifying the Managing Director as one
possible alternative. Additionally, the NPRM asked if the SDOs should be subject to appointment for a specific term, or whether
they should be subject to removal by the Commission at will—and whether the Supreme Court's decision in Lucia v. SEC, 138 S. Ct. 2044 (2018), limited the appointment of SDOs. Ultimately, the NPRM explained that our primary goal is for the official
to be neutral, but explained that suspension and debarment proceedings are not adjudications subject to the Administrative
Procedure Act's (APA) formal hearing provisions that prohibit agency staff from performing both prosecutorial and decisional
activities. We adopt an approach under which a Commission-appointed official, the SDO, will preside over suspension and debarment
proceedings under delegated authority.

Commenters generally supported our proposal that the official should be neutral. The Joint Association Commenters and SHLB-SECA
argued that, to ensure such neutrality, the Commission should house the SDO within the Office of the Managing Director (OMD)
or OGC and/or should establish clear demarcations between the suspension and debarment function, on the one hand, and the
enforcement and program administration functions, on the other. Mr. Meunier agreed that such separation is “desirable,” although
not required as a matter of due process. Mr. Meunier and SHLB-SECA also urged that the SDO must have sufficient background,
knowledge, and expertise with the highly complex rules underlying USF, TRS, and other federal programs to avoid lengthy delays
and erroneous findings and conclusions. And finally, one commenter, E-Rate Central, opined that appointment of the appropriate
SDO might “depend upon the remedial action contemplated.”

As the foregoing makes clear, while commenters generally agreed on the principle that the SDO should be “neutral” and have
relevant expertise, they did not coalesce around any specific proposal. We agree that the SDO's decisions should be informed
by the relevant subject matter experts within the Commission, and we permit the SDO to draw upon and apply expertise from
the pertinent bureaus and offices.

The Commission will designate an individual to serve as the SDO. It is not yet clear what demands the Commission will face
in terms of staffing, resources, and time on an annual basis in connection with suspension and debarment proceedings. Therefore,
we decline to adopt any of the other specific proposals regarding an SDO's appointment at this time. Rather, to enhance administrative
economy and preserve flexibility to better serve the public interest in light of future staffing resources and enforcement
demands, we anticipate that the Commission will address the agency's organizational needs and practices when making the SDO
appointment.

To the extent that commenters question a bureau or office's objectivity to handle exclusion or LDP proceedings, we disagree.
It is our experience that bureaus and offices routinely work together to administer the Commission's existing suspension and
debarment rules in an objective manner, and we anticipate and expect that such efforts would continue. We delegate authority
to the Office of General Counsel, in consultation with the Office of the Managing Director, the Enforcement Bureau, the Wireline
Competition Bureau, and the Consumer and Governmental Affairs Bureau to revise existing delegated authority rules to accommodate
this planned shift in responsibilities.

Pre-Notice Letters. We permit the use of pre-notice letters, as numerous commenters urged. According to the ISDC, these letters “include show
cause letters, requests for information, and similar types of letters” and “are used to inform an individual or entity that
the agency suspension and debarment program is reviewing matters for potential SDO action, to identify the assertion of misconduct
or the history of poor performance, and to give the recipient an opportunity to respond prior to formal SDO action.” CTIA
and USTelecom suggested that such letters should be required. The Joint Association Commenters, in contrast, noted that pre-notice
letters are generally beneficial and should be used “whenever possible,” while NCTA acknowledged they may not be appropriate
in response to “egregious conduct.” We agree that pre-notice letters may be a useful tool in appropriate circumstances, for
example, if it is clear that the misconduct at issue should be resolved through an administrative agreement. We decline, however,
to require their issuance in all cases. CTIA and USTelecom did not identify any agency that has made pre-notice letters mandatory,
and we find that doing so could harm the public interest by preventing the Commission from moving quickly when necessary to
protect our programs and their beneficiaries.

Imputation of Conduct. The Guidelines' imputation rule allows the agency to impute conduct from an individual to an organization, from an organization
to an individual, among individuals, or among organizations in appropriate circumstances. The NPRM noted that the rule allows
us to “plug a gap in the Commission's current suspension and debarment mechanism.” We now adopt the Guidelines' imputation
rule as proposed, which will afford us greater flexibility in responding to misconduct.

Some commenters expressed concern about the imputation of conduct under the Guidelines and recommended possible limitations
or modifications. One commenter, E-mpa, also objected to any imputation, arguing that suspension or debarment of an entire
company as a result of bad conduct by only a few individuals could cause undue hardship to all those at the company whose
conduct was not improper. Such an argument, however, misses the critical point that where bad conduct exists, our obligation
is to protect our programs and program beneficiaries, and in many cases any potential harm to the company or its “good actors”
will be greatly outweighed by the harm that

  such firms can cause to our programs and beneficiaries. Further, E-mpa fails to recognize that the Guidelines' imputation
  rule is permissive, not mandatory—it sets forth when an agency “may” impute conduct—and permits the SDO to take individual
  facts into account on a case-by-case basis. We also find commenters' other concerns with the Guidelines' imputation rule unpersuasive.
  Specifically, SHLB-SECA urged that imputation from an individual to an organization should require the organization's knowledge,
  approval, or acquiescence. While we generally agree that imputation from an individual to an organization will be most appropriate
  based on the latter's knowledge, approval, or acquiescence, there may be other scenarios where imputation is appropriate due
  to an organization's inadequate supervision or oversight. We also reject the recommendation of CTIA and USTelecom to limit
  imputation to an organization only where an individual acts within the scope of his/her employment; such a limitation would
  emphasize form over substance and fail to capture scenarios where an organization has knowledge of, and benefits from, an
  individual's misconduct that is outside of his/her scope of employment.

We also note that neither of the EPA decisions cited by CTIA and USTelecom suggests that imputation is appropriate only when
an individual acts within the scope of his/her employment. In the All Out Sewer and Drain Service decision, the debarring official made passing reference to the fact that the individual “was acting within the scope of his
agency” and “duties” for the company, but the debarring official did not state or suggest that this fact was necessary to
his analysis. So too in Michael J. Conrad, the debarring official quoted a representation from a plea agreement that the individual was “acting within the scope of employment
for the benefit of the corporation.” But this fact is not referenced or cited as relevant to the debarring official's imputation
from the organization to the individual.

Finally, NCTA's concern—that the imputation rule could trigger strict liability for a provider based on actions by a third
party not within the provider's control and that the provider made good-faith efforts to identify—is misplaced. Section 180.630
permits (without requiring) imputation in such scenarios, and the provider may demonstrate why the SDO should not impute liability.

Presentation of Evidence. The NPRM requested comment on several evidentiary procedures, including who should provide information supporting suspension
or debarment to the SDO in an exclusion proceeding. The NPRM proposed that where the Office of Inspector General (OIG) has
conducted the underlying investigation supporting the suspension and debarment, it should have primary responsibility for
providing the information, because it would be the entity most familiar with the underlying facts. In other situations, the
NPRM proposed, it might be appropriate for the presentation to be made by the other units within the Commission that may have
conducted the investigation, such as the Enforcement Bureau, with input from the bureau most responsible for the implementation
of the relevant program, who may inform how to implement suspension or debarment without adversely impacting the persons or
entities the programs are designed to assist. We received minimal comment on this issue. SHLB-SECA agreed that an exclusion
proceeding generally should involve the participation of the bureau responsible for the relevant FCC program to leverage its
institutional memory and expertise. Consistent with the Guidelines' direction that suspension and debarment proceedings should
be “informal,” and with the analysis of Mr. Meunier that the SDO exercises “managerial decision functions,” we authorize in
Supplemental Rule 6001.445 that the SDO in each proceeding designate a Commission unit primarily responsible for sharing relevant
materials with the SDO to inform the SDO's decisionmaking and, where necessary, establish coordination procedures for other
bureaus or offices to participate.

Reconsideration, Review, and Appeal. The Guidelines are generally silent on procedures for review of the SDO's decisions. The NPRM proposed that a determination
by the SDO should be subject to reconsideration under section 405 of the Communications Act or an AFR filed under section
155(c)(4) of the Act, and requested comment on whether it would be appropriate or necessary to adopt any supplemental rules
regarding appeals and review. The NPRM also requested comment on whether there should be specific timeframes for appeals and
requests for review, and which standard and timeframe should apply to related stay requests.

Commenters generally agreed that we should provide certainty with respect to the mechanisms, standards, and timeframes for
reconsideration, review, and appeal of suspension and debarment decisions. For instance, CTIA and USTelecom requested that
we specify both the process and timelines for review and that we authorize direct judicial review of SDO decisions, subject
to a shot-clock. The Joint Association Commenters recommended that we establish clear timeframes and due process protections
for suspension and debarment proceedings, also urging that once the SDO issues a decision, a provider should be allowed to
seek direct judicial review. NCTA agreed that the Commission should establish a set of clear timeframes for action by the
SDO, as well as review of those decisions by the full Commission. Mr. Meunier stated that with respect to appeals, the Guidelines
have no requirements “but agencies that wish to do so may include an avenue of internal agency appeal,” noting that EPA provides
a “restricted option” for an appeal officer to reverse a suspension or debarment only where the SDO “based the decision on
an error of fact or law, or abused his or her discretion.”

To provide for additional opportunities for review consistent with the Communications Act and our rules, we adopt procedures
for review of SDO decisions and permit reconsideration, review, and appeal as follows. First, we reject proposals to allow
direct judicial review of SDO decisions. Indeed, the Communications Act itself precludes such review. Moreover, we separately
find that an aggrieved party will have an adequate opportunity to seek judicial review of a suspension or debarment decision
after exhausting our procedures, which afford significant due process protections.

Second, we clarify that a suspended party may seek reconsideration and/or Commission review only after the SDO has issued
a final suspension decision under section 180.755 of the Guidelines. (Such filings remain subject to the Commission's other,
more general legal requirements.) Although a suspension is effective on the date the SDO first signs a suspension order (the
initial suspension decision), under our supplemental rules, that initial decision shall only prevent the suspended party from
enrolling new customers or otherwise entering into new covered transactions. After receiving notice of the initial suspension
decision, a provider has an opportunity to respond and participate in an informal proceeding, after which, the SDO issues
a suspension decision with written findings of fact (the final suspension decision). We find that, consistent with our rules
and precedent, a party may not file a petition for reconsideration (PFR) or an AFR of the initial suspension decision. These
decisions are not amenable to PFR because they are interlocutory. They do not mark the

  consummation of the suspension decisionmaking process. The Joint Association Commenters seek to justify a PFR of the initial
  decision by asserting that “the decision of the SDO regarding a proposed suspension or debarment should contain specific findings
  of fact and law as well as the SDO's reasoning for such findings to provide a clear record in the event of an appeal.” But
  unlike the requirements for final decisions, the Guidelines and supplemental rules that we adopt in this Report and Order
  do not require the SDO to include such findings in an initial suspension decision or proposed debarment. As a result, reconsideration
  of the initial suspension would not be appropriate at this early stage of the process. Initial suspension decisions are likewise
  not conducive to AFR, because any issues presented to the Commission in an AFR must be first raised with the entity acting
  on delegated authority—which cannot have occurred at this point in the suspension process.

In contrast, a party may seek reconsideration (if necessary) or Commission review (when otherwise permitted) of a final suspension
decision only where the party has responded to the initial suspension decision. If a party does not oppose the initial suspension,
however, the party waives the right to challenge the final suspension decision. As we proposed in the NPRM, and consistent
with section 405 of the Act, a final suspension decision is not interlocutory, because it marks the consummation of the suspension
process. Because the Guidelines do not expressly provide for reconsideration of suspension decisions, and to eliminate any
ambiguity, we hereby adopt a supplemental rule expressly permitting reconsideration of final suspension decisions in accordance
with section 1.106 of our rules. We note further that like other decisions on delegated authority, a participant may seek
Commission review of a final suspension decision when otherwise permissible under the Act and our existing rules.

Third, we agree with commenters that reconsideration and Commission review of suspension decisions should be subject to reasonable
timelines. Indeed, the Guidelines already establish timelines for an SDO to complete the exclusion process and issue a final,
written decision. To those ends, we also reject the request of INCOMPAS to implement a 90-day constructive denial rule as
inconsistent with the Guidelines. And we agree with commenters that absent a clear timeline for reconsideration, review, and
appeal, there is a possibility that suspension and debarment proceedings, including appeals, will be lengthy. We thus adopt
rules directing the SDO to resolve any PFR of a final suspension decision within 45 days, which the SDO may extend for good
cause, and the Commission to endeavor to resolve any AFR of a final suspension decision within 180 days. We note several commenters
raised concerns regarding practices by USAC related to the timing of administrative processing. We conclude that these comments
address issues that are outside of the scope of this rulemaking and reject them. We note, of course, that commenters may raise
these concerns in an appropriate open proceeding or may propose changes to our rules through a petition for rulemaking.

Fourth, we conclude that a final suspension decision is a non-hearing order that resolves an informal proceeding. As such,
the decision is subject to a permissive stay contemplated by § 1.102(b) of our rules. We remind participants that a permissive
stay is an extraordinary remedy. Consistent with Commission policy for evaluating stay requests, the decisionmaker (whether
the SDO or the Commission) will consider the four criteria set forth in Virginia Petroleum Jobbers Association: (1) whether the requesting party is likely to succeed on the merits; (2) whether the requesting party will be irreparably
injured without a stay; (3) the degree of injury to other parties if relief is granted; and (4) whether a stay is in the public
interest. We decline to adopt an automatic stay when the decisionmaker fails to issue a decision on the stay request within
a prescribed timeframe. We likewise do not agree that the filing of an AFR should trigger an automatic stay. We find that
such procedural steps are unnecessary given the timelines we adopt for reconsideration and review.

Fifth, we generally adopt the same rules and standards for reconsideration, review, and appeal of debarment decisions. Unlike
suspensions, debarments become effective after the SDO issues a final debarment order. Accordingly, we adopt the Guidelines'
reconsideration rule for debarments and also clarify that any debarment decision may be subject to an AFR under § 1.115 of
our rules. And, as with suspension decisions, we clarify that a debarment is a non-hearing order subject to a permissive stay
under § 1.102(b) of our rules.

Limited Denial of Participation

We adopt an additional remedy to supplement the suspension and debarment framework adopted herein. In the NPRM, the Commission
asked whether we should adopt a mechanism similar to a process utilized by the U.S. Department of Housing and Urban Development
(HUD), which provides for a “limited denial of participation” as an alternative to suspension and debarment. (72 FR 73484,
73487 (Dec. 27, 2007)). Many of the procedures governing this mechanism resemble those under the Guidelines for suspensions
or debarments, but HUD's LDP does not trigger inter-agency reciprocity because the LDP is not part of the governmentwide suspension
and debarment system. Therefore, under HUD's regulations, imposing an LDP prevents a bad actor from continuing to participate
in the particular program(s) and/or geographic region(s) that prompted the limited exclusion, but does not result in the party's
placement on the SAM.gov Exclusions triggering governmentwide reciprocal exclusions. HUD's rules also offer flexibility by
permitting the agency to initiate a suspension or debarment while an LDP is ongoing if the SDO thereafter determines an exclusion
is more appropriate. The NPRM requested comment on whether the Commission should adopt the LDP mechanism and, if so, what
standards might be appropriate for its use.

We find that an LDP will increase the agency's flexibility to protect its programs from actors whose conduct is concerning,
but which does not warrant suspension and debarment. Additionally, the LDP mechanism we adopt will provide additional due
process protections beyond those proposed in the NPRM by requiring that before an LDP may be issued, the alleged wrongdoer
must first be provided with notice and an opportunity to be heard. Similar to HUD's LDP, a Commission-issued LDP will not
have governmentwide effect, but will apply only to FCC activities.

Applicability

LDPs shall be available as a remedy for misconduct arising from any agency programs subject to our suspension or debarment
rules. Commenters did not recommend a more expansive scope, and we have concluded that there is no need to broaden the scope
of LDPs. Further, as proposed in the NPRM, we conclude that a denial of participation need not be limited to the program where
the misconduct occurred, but may be extended by the SDO to any other Commission programs subject to LDPs, depending on the
facts and circumstances of the case. For example, if the misconduct involves a violation of competitive bidding requirements
in the

  E-Rate program, the action may warrant a denial of participation from another program involving competitive bidding, such
  as the Rural Health Care program. The SDO should make these determinations based on the unique circumstances of each case,
  and in coordination with all relevant bureaus and offices.

Commenters generally supported our adoption of an LDP. For example, SHLB-SECA “firmly support[ed]” our use of an LDP “as a
parallel, more flexible alternative to suspension and debarment.” According to SHLB-SECA, an LDP “could be put to good use
to counteract the one-off bad conduct of participants with no history of the same, similar, or other misconduct . . . .” SHLB-SECA
further explained that an LDP would not be the appropriate remedy “where there is evidence of substantial wrongdoing” but
could be an effective tool to incentivize participants “to respond to information requests and other directives,” provided
that appropriate procedural protections are maintained. E-Rate Central agreed that an LDP could provide the Commission “with
a useful investigative tool while at the same time providing greater transparency and due process for targets of an investigation.”
We largely agree with these views regarding the benefits of an LDP, but we emphasize that the Commission remains free to rely
on other investigative tools to ensure compliance with the Commission's information requests and other directives.

Some commenters also requested that we adopt additional limitations on the imposition of this remedy. The Joint Association
Commenters noted that the Commission can avoid “continuity of service concerns” by restricting the imposition of LDPs to new
awards in affected programs, and by not covering existing contracts or customers. SHLB-SECA agreed and also urged that the
LDP rules should incorporate due process protections. The Joint Association Commenters and SHLB-SECA also both recommended
that an LDP should be imposed for a shorter period than a suspension and should not affect existing customers or awards. Finally,
CTIA and USTelecom generally did not oppose adoption of an LDP, but suggested that it should not be imposed based solely on
an assessment that a program applicant's participation in the program poses an “unsatisfactory” risk, as proposed in the NPRM.

The LDP mechanism we adopt in this Report and Order affords the SDO the flexibility to fashion the appropriate remedy based
on the facts and circumstances of each case. We therefore decline to limit LDPs to cover only new awards in the program(s)
in which the misconduct occurred as some commenters suggested. This remedy is similar to one adopted by HUD, which does not
limit LDPs in this fashion, and there may be instances where it is in the public interest for an LDP to impact a provider's
existing contracts or customers or participation in other FCC programs. We note, however, that the SDO should consider service
disruptions and other customer-facing effects when determining the scope of an LDP, as it bears on the best interests of the
federal government. Likewise, to the extent that an LDP could impact existing contracts or customers, the SDO should provide
for transitions or continuations of services in a manner similar to what we have adopted in this Report and Order for suspensions
or debarments to ensure that any service disruptions are mitigated. Given the limited scope and duration of the LDP, as well
as the possibility that the SDO will adopt remedies designed to bring the subject of the LDP into compliance with the Commission's
rules, we anticipate that it will be less likely that existing customers will need a different service provider.

Causes and Factors

We adopt, with several modifications, the proposed rule on LDP causes set forth in the NPRM. In evaluating whether to issue
an LDP, we conclude that the SDO should consider the totality of the circumstances, the factors set forth in section 180.860
of the Guidelines, and such additional factors as whether the misconduct was an isolated occurrence, how egregious the misconduct
was, and whether the violator promptly and fully self-reported or otherwise took concrete steps to come into compliance. This
analysis is somewhat similar to what the Commission undertakes in the context of forfeitures.

We conclude, and commenters agree, that it is in the public interest to provide the agency with discretion to implement a
remedy most appropriate for the misconduct at hand. We clarify in Supplemental Rule 6001.1103(a), however, that if the alleged
misconduct involves any of the causes set forth in section 180.800(a) of the Guidelines, or the filing of a criminal indictment
or information or a conviction or evidence of fraud, the presumption shall be that a suspension will be the more appropriate
remedy. In addition, we adopt Supplemental Rule 6001.1105(a), but clarify therein that only misconduct in those FCC programs
subject to the LDP remedy may trigger the LDP remedy. Limiting those causes to conduct in programs subject to the LDP remedy
is a conforming change reflecting our decision that LDPs shall be available as a remedy only for those agency programs for
which a suspension or debarment could be sought.

Finally, we do not agree with CTIA and USTelecom that one of the enumerated LDP causes—permitting LDPs on the basis of a provider's
“unsatisfactory risk”—is impermissibly vague or overbroad. To the contrary, our approach is consistent with the Guidelines,
which permit suspension and debarment based on, among other things, an entity's “unsatisfactory performance of one or more
public agreements or transactions.” Furthermore, the Commission is required by governmentwide guidance to manage risks in
its programs.

Evidentiary Standard

We adopt an “adequate evidence” standard for an LDP consistent with the evidentiary standard for a suspension under the Guidelines.
We also adopt two proposed rules that explicitly define circumstances that constitute “adequate evidence.” First, an existing
LDP related to any Commission program shall constitute adequate evidence to enter a concurrent LDP for any other Commission
program(s). Second, filing of a criminal indictment or information, regardless of whether it is based on offenses against,
or related to, the Commission, shall constitute adequate evidence for the purpose of limited denial of participation actions.
While we adopt two per se rules, these are not the only circumstances that may constitute adequate evidence.

Initiating a Proceeding

To preserve the flexibility of this remedy, an LDP proceeding may be initiated in several ways. As with exclusions, the head
of any bureau or office that determines that an LDP would be appropriate based on the causes and factors in Supplemental Rule
6001.1105 may refer the matter to the SDO along with documentation supporting this remedy. Following the referral, the SDO,
after consultation with the relevant bureau or office, shall determine whether an exclusion, an LDP, other action, or no action
is most appropriate. If the SDO determines an LDP is appropriate, the SDO shall promptly provide any person subject to the
proceeding with notice that the LDP has been proposed. Such notice shall specify the causes for the proposed limited denial
of participation, the potential effect of the remedy, including its possible length and the FCC

  program(s) and geographic areas (if relevant) impacted. The notice shall explain the recipient's right to contest the proposed
  limited denial of participation as provided under Supplemental Rule 6001.1113 by seeking a conference or providing documents
  in opposition, or both, and state that the person has 15 days to respond.

An LDP may also be initiated if an SDO determines during a suspension or debarment proceeding, after consultation with the
relevant bureau or office, that an LDP would be a more appropriate remedy. The SDO shall provide notice to the respondent
that the suspension or debarment proceeding shall be suspended, and the record for the suspension and debarment proceeding
transferred to and incorporated into the LDP proceeding. The imposition of an LDP, however, does not alter the right of the
Commission to suspend or debar any person under this part if the SDO later determines that an exclusion is warranted.

Administrative Agreements

We conclude that administrative agreements, including compliance agreements, may be issued either to supplement an LDP or
as an alternative to an LDP to ensure that the SDO has maximum flexibility to fashion the appropriate remedy. As in suspension
or debarment proceedings, administrative remedies may be implemented only after consultation with the bureaus and offices
responsible for the programs in which the misconduct occurred, and compliance agreements shall require consultation with and
approval by OGC.

Period of Limited Denial of Participation

We also adopt our proposal that the SDO may impose an LDP for any term up to twelve months, but we also permit the SDO to
grant an extension of an additional six months (not to exceed eighteen months in total). Such an extension should be imposed
if review of conduct during the initial suspension period: (i) fails to demonstrate full compliance with the terms of the
LDP or any supplemental administrative agreements; or (ii) shows other misconduct in any Commission program subject to this
remedy or additional new causes sufficient to support extension of the LDP period. In addition, the SDO imposing the LDP may
also initiate a suspension or debarment proceeding (after consultation with applicable bureaus) if review of conduct during
the initial or extended LDP period demonstrates conduct that may warrant a suspension or debarment.

Additional LDP Process Considerations

In the NPRM, the Commission requested comment on several additional process proposals and questions related to the proposed
LDP mechanism. In their comments, parties also offered proposals for other improvements or modifications which we address
in this section.

SDO Authority to Conduct LDP Proceedings. The NPRM proposed that the authority to conduct LDP proceedings would reside with the bureaus administering the relevant programs.
However, after review of the record, we agree with the Joint Association Commenters and conclude that consolidating this authority
under the SDO will provide a more streamlined administrative mechanism and will promote consistency in the application of
this remedy. Consolidated authority will also allow the SDO to more easily convert an LDP to an exclusion proceeding, or vice
versa, based on the alleged bad actor's conduct and the evidence that the SDO reviews during the proceeding.

Converting an LDP Proceeding to a Suspension and Debarment Proceeding. Just as an SDO may determine that a suspension and debarment proceeding may be paused pending consideration of an LDP on the
same facts, if after an LDP has been initiated the SDO either learns of new facts evidencing more serious misconduct than
initially suggested or learns of new misconduct, the SDO shall have authority to initiate an exclusion proceeding if appropriate
after consulting with the relevant bureau or office.

We also adopt Supplemental Rule 6001.1121, as proposed in the NPRM, to establish procedures to handle parallel proceedings
in cases where a subsequent suspension and debarment is proposed based on the same transactions or conduct underlying the
LDP. Under this rule, LDP proceedings are stayed for 30 days so that respondents may contest the proposed suspension or debarment.
If the respondent contests the proposed exclusion, the proceedings will be consolidated and the LDP record incorporated into
the exclusion proceeding.

We further emphasize that if the person or entity subject to an LDP fails to comply with its terms (including those in any
administrative agreements), the SDO, after consultation with the bureaus or offices, may initiate an exclusion proceeding.
If the suspension and debarment proceeding is initiated when an LDP is already in effect, the LDP shall remain operative while
the exclusion is contested. Where both suspension or debarment and LDP proceedings are pending, the procedures described in
section 6001.1121 of the Supplemental Rules, as proposed in the NPRM, shall be applicable.

Imputation of Conduct. We also adopt our proposed rule by which the Commission may impute conduct in LDP proceedings in the same manner as provided
under section 180.630 of the Guidelines for exclusion proceedings, which we have adopted in this Report and Order.

Covered Programs, Participant Tiers, and Disclosures

Scope of Covered Transactions

The Guidelines generally define “non-procurement transactions” as “any transaction, regardless of type (except procurement
contracts),” including but not limited to grants, cooperative agreements, scholarships, fellowships, contracts of assistance,
loans, loan guarantees, subsidies, insurances, payments for specified uses, and donation agreements. Thus, procurement contracts
awarded directly by a federal agency would not be considered “covered transactions” under the nonprocurement governmentwide
guidance for suspension and debarment. However, where non-federal participants in nonprocurement transactions award contracts
for goods or services, such contracts would be deemed to be covered transactions if the amount of the contract equals or exceeds
$25,000. Notwithstanding this definition, the Guidelines provide agencies with flexibility to determine which nonprocurement
transactions should be covered by their suspension and debarment rules.

The Commission's primary nonprocurement programs have been the Covered Programs. For example, in 2024, disbursements totaled
$8.59 billion for USF programs, and $1.48 billion (projected) for the 2025-26 TRS Fund Year. Based in part on audits and reports
by the Commission's Inspector General, the NPRM proposed that all transactions under the USF programs, TRS programs, and the
NDBEDP be considered covered transactions under any new rules, and that all other Commission transactions be exempt from such
rules. The NPRM, tentatively concluding that application of the suspension and debarment rules to these programs would improve
the sustainability of their funding for the benefit of those whom the programs

  serve, requested comment on the benefits of applying the suspension and debarment rules to the USF programs, TRS programs,
  and the NDBEDP. We now adopt the tentative conclusions in the NPRM, for which there is substantial support in the record.

The NPRM also requested comment on whether all transactions covered by the Guidelines' definition should be included within
the Commission's suspension and debarment regime or whether some Commission nonprocurement programs should be exempted because
alternative remedies (e.g., license revocation) may be more appropriate. The NPRM noted that the Guidelines primarily, but not exclusively, focus on transactions
that involve a transfer of Federal funds to a non-Federal entity. The Guidelines exclude from the definition of “covered transaction”
any “permit, license, certificate or similar instrument issued as a means to regulate public health, safety or the environment,”
unless a federal agency specifically designates it as a covered transaction. Consistent with that framework, the NPRM proposed
to exclude all other transactions, such as applications for section 214 authorizations, equipment authorizations, and broadcast
and spectrum licenses issued by the Commission. Similarly, the NPRM proposed to exclude all transactions to or from licensees
and those with spectrum usage rights (except for those USF, TRS, and NDBEDP transactions where such an entity is a participant),
such as incentive auction payments or repacking payments.

Commenters overwhelmingly supported the NPRM's proposal to apply the Guidelines to the USF programs. Funds For Learning, the
Joint Association Commenters, and SHLB-SECA noted that the current suspension and debarment rules for USF programs are too
narrow or inflexible and can impede the Commission's ability to safeguard its programs against bad actors. E-Rate Central
also generally favored “the adoption of more formal suspension and debarment rules” for E-Rate transactions. Commenters also
expressed support for coverage of the TRS program and the NDBEDP. We adopt our proposal to apply the modified Guidelines and
our supplemental rules to nonprocurement transactions under these programs.

Commenters also generally supported excluding programs other than the USF and TRS programs and the NDBEDP from coverage under
any new rules. For example, CTIA and USTelecom “agree[d] with the Commission's finding that the Communications Act and the
Commission's rules regarding [other] applications and transactions provide more appropriate remedies.” WISPA also agreed with
the Commission's approach, “particularly because” excluded transactions are “governed by separate Commission rules,” and warned
against expanding the set of covered programs. And Mr. Meunier noted that while most agencies do not adopt supplemental rules
identifying an “elaborate list of inclusions,” that fact “does not preclude an agency from issuing such a list if it chooses
to do so.” The rules, therefore, shall not extend at this time to transactions carried out under the Commission's other currently
existing programs, nor shall they extend to transactions to or from licensees and those with spectrum usage rights (with the
exception of transactions under the Covered Programs where such an entity is a participant). These decisions find ample support
in the record.

Participant Categories

Tiers. All participants (primary tier and lower tier) are potentially subject to suspension and debarment. The Guidelines use “tiers”
to categorize program participants, and a participant's placement in a particular tier can affect the scope of that participant's
required disclosures. Primary tier participants are those who deal directly with the agency or program administrators by submitting
proposals for, or entering into, covered transactions. Lower tier participants are typically those who enter into covered
transactions with a person at the next higher tier. Agencies, however, have some discretion to designate participants as belonging
to the primary tier, the lower tier, or neither. The NPRM proposed to define USF, TRS, and NDBEDP program participants as
primary tier participants and other individuals who contract with program participants as lower tier participants. The NPRM
also proposed, consistent with the Guidelines, to designate certain parties who do not directly contract with the primary
tier participant (for example, subcontractors) as lower tier participants if they meet certain criteria. While the tier designations
varied by program, the NPRM generally proposed two prongs for the lower tier participant definition. First, the participant
must belong to one of several specified categories, including contractors, subcontractors, suppliers, consultants, or their
agents or representatives for supported transactions. Second, the participant must also satisfy at least one of the following
three criteria: (1) the participant must have a material role relating to, or significantly affecting, claims for disbursements
related to the program; (2) the participant must be a “principal,” or (3) the amount of the transaction involving the participant
is expected to be at least $25,000.

We now adopt the framework of primary tier and lower tier participants proposed in the NPRM and summarized in the chart below.
The program-specific rationales for our designations are discussed in detail below, but, overall, we find that expanding the
definition of lower tier participant for each program will provide the Commission with the flexibility necessary for more
comprehensive program oversight, without imposing onerous requirements on participants. Subcontractors and suppliers play
essential roles in carrying out covered transactions, and they are entrusted with large sums of Federal funds. By classifying
them as lower tier participants, rather than excluding them from designation as participants, our rules will establish more
extensive oversight and control of program spending. Further, these parties who may play a significant role in covered transactions
will be subject to exclusion from our programs, when justified by the facts. Therefore, the expanded list of lower tier participants
as described in the summary chart and codified in our Supplemental Rules affords the Commission authority to take an exclusion
action, if justified by the record, with respect to these parties who are often key players in transactions under our programs.
We thus find that this broad definition of lower tier participants, including subcontractors and suppliers, is in the public
interest.

Our adopted designations for the Covered Programs by tier are summarized in the chart below.

| | Primary tier participants | Lower tier participants |
| --- | --- | --- |
| High-Cost | Service Providers | Contractors, subcontractors, suppliers, consultants or their agents or representatives for High-Cost-supported transactions,
if: |
| | | (1) such person has a material role relating to, or significantly affecting, claims for disbursements related to the program; |
| | | (2) such person is considered a “principal;” or |
| | | (3) the amount of the transaction is expected to be at least $25,000. |
| Lifeline | Service Providers | Any participant in the Lifeline program (except for the primary tier carrier), regardless of tier or dollar value, including
but not limited to those that are reimbursed based on the number of Lifeline subscribers enrolled |
| | | (Contractors, subcontractors, suppliers, consultants, or their agents or representatives and Lifeline marketing organizations
for Lifeline-supported transactions, or their agents or representatives, if |
| | | (1) such person has a material role relating to, or significantly affecting, claims for disbursements related to the program; |
| | | (2) such person is considered a “principal;” or |
| | | (3) the amount of the transaction is expected to be at least $25,000. |
| E-Rate | Schools and Libraries
FCC Form 471 Service Providers | Contractors, subcontractors, suppliers, consultants, or their agents or representatives for E-Rate-supported transactions,
if
(1) such person has a material role relating to, or significantly affecting, claims for disbursements related to the program; |
| | | (2) such person is considered a “principal;” or |
| | | (3) the amount of the transaction is expected to be at least $25,000. |
| RHC | Health Care Providers
FCC Form 462/466 Service Providers | Contractors, subcontractors, suppliers, consultants, or their agents or representatives for RHC-supported transactions, if
(1) such person has a material role relating to, or significantly affecting, claims for disbursements related to the program; |
| | | (2) if such person is considered a “principal;” or |
| | | (3) the amount of the transaction is expected to be at least $25,000. |
| TRS
NDBEDP | Service Providers
Certified Programs | Contractors, subcontractors, suppliers with whom the certified programs have a contractual relationship, consultants, or their
agents or representatives for TRS- or NDBEDP-supported transactions, if: |
| | | (1) such person has a material role relating to, or significantly affecting, claims for disbursements related to the program; |
| | | (2) such person is considered a “principal;” or |
| | | (3) the amount of the transaction is expected to be at least $25,000. |
| ACP | Service Providers | Any participant in the ACP (except for the primary tier service provider), regardless of tier or dollar value, including but
not limited to those reimbursed based on the number of ACP subscribers enrolled. |
| | | (Contractors, subcontractors, suppliers, consultants, or their agents or representatives and any ACP Marketing Organizations
for ACP-supported transactions, or their agents or representatives, if |
| | | (1) such person has a material role relating to, or significantly affecting, claims for disbursements related to the program; |
| | | (2) such person is considered a “principal;” or |
| | | (3) the amount of the transaction is expected to be at least $25,000. |
| ACP Outreach Grant Program | Recipients of ACP Outreach grants | Subrecipients, contractors or subcontractors of the grant recipients, or their agents or representatives, if |
| | | (1) such person has a material role relating to, or significantly affecting, claims for disbursements related to the program; |
| | | (2) such person is considered a “principal;” or |
| | | (3) the amount of the transaction is expected to be at least $25,000. |
General Lower Tier Considerations. Several commenters, including CTIA, USTelecom, and NCTA, suggested that the Commission either exclude lower tier participants
from the rules' coverage altogether or adopt a purported safe harbor described in the Guidelines that provides participants
with three options for verifying other participants' status. Specifically, CTIA and USTelecom suggested that the NPRM did
not adequately explain why extending the rules to subcontractors and suppliers was necessary to promote the public interest,
and they further stated that such an extension would “impose unduly burdensome investigation obligations on primary tier participants.”
The breadth and scope of the Guidelines offers a governmentwide default for including subcontractors and suppliers. CTIA and
USTelecom do not offer any indication of why this scope is unnecessary for failing to guard against waste, fraud, and abuse,
and indeed, the Commission's experience suggests otherwise. That is, subcontractors and suppliers may originate or amplify
the extent of fraud, further supporting the need for this scope.

CTIA and USTelecom also raised the possibility that subcontractor exclusions could significantly limit “competitive options”
for primary tier contractors, particularly in rural areas. Similarly, NCTA urged the Commission not to “impos[e] a strict
liability standard on providers that would hold them accountable for actions by a third party that are not within their control
and that they made a good faith effort to identify.” Because subcontractors and suppliers play essential roles in carrying
out covered transactions and are entrusted with large sums of Federal funds, they are also in a position to plan, initiate,
or carry out wrongdoing, both with or without the awareness of the primary tier participant. Applying the rules to all participants,
including subcontractors and suppliers, establishes the most comprehensive level of program oversight to ensure the actions
of all bad actors can be addressed so program funds go to applicants who need it and comply with program rules. Applicants
and participants in programs that the Commission administers should carefully consider the scope of the Commission's requirements
directed at safeguarding waste, fraud, and abuse,

  when receiving and spending these funds and deciding with whom to engage in business.

We find NCTA's concerns misguided. First, nothing in the Guidelines imposes a strict liability standard, as NCTA has suggested.
To the contrary, the Guidelines explicitly list a number of mitigating factors that the SDO may consider in evaluating exclusions,
including “[w]hether and to what extent [the participant] planned, initiated, or carried out the wrongdoing,” “[w]hether there
is a pattern or prior history of wrongdoing,” and “[o]ther factors that are appropriate to the circumstances of a particular
case.” These mitigating factors give the Commission flexibility to address each case on its own merits and ensure that providers
will not be held to a “strict liability standard.” Second, as discussed above, the Guidelines give the Commission flexibility
to determine whether the actions of a lower tier participant should result in any action against a primary tier participant.
Finally, as discussed above, the Guidelines also furnish several methods for primary tier participants to collect information
about their lower tier business partners. Primary tier participants who follow these methods, which we largely adopt with
minor modifications consistent with our augmented disclosure requirements, can further mitigate any liability.

We are similarly unpersuaded by CTIA and USTelecom's argument that suspension or debarment of subcontractors and other lower
tier participants could limit the ability of primary tier participants to bid on work. If a service provider concludes there
is a bona fide shortage of competent contractors, subcontractors, or suppliers to enable it to bid on a covered transaction,
it can support an excluded party's request for an “exception” under the Guidelines, allowing the excluded person to participate
in future transactions. As discussed above, one basis for granting such an exception is the unavailability of any other qualified
entities to perform the necessary services.

Finally, the commenters ask that if disclosure requirements are nevertheless extended to lower tier participants, then primary
tier participants should be permitted to use any one of three options to satisfy disclosure obligations provided in section
180.300 of the Guidelines. As nothing in the NPRM proposed to limit the disclosure options for lower tier participants, we
agree that the disclosure obligation options described in section 180.300 should be applicable to all participants.

Lower Tier Transaction Thresholds. As described above, one of the three criteria in the NPRM's proposed definition of lower tier participant is “the amount of
the transaction is expected to be at least $25,000.” Some commenters expressed concern that this threshold was too low. CTIA
and USTelecom argued that a $25,000 threshold would sweep in nearly all contractors for some projects and would not adequately
account for inflation. They suggested that the threshold be increased to $100,000. E-Rate Central in turn sought clarification
on whether the $25,000 threshold applies to “an individual FRN, application, invoice, or some combination thereof.”

We find that the $25,000 threshold is reasonable and decline to raise the transaction value threshold to an amount greater
than $25,000. That threshold is consistent with and is derived from the Guidelines' definition of “covered transactions.”
Moreover, under the Guidelines, the Commission can consider the “actual or potential harm or impact” arising from any wrongdoing
as a mitigating factor in an exclusion proceeding, allowing it to take the size of a transaction into account without creating
an unnecessarily rigid higher dollar threshold. We are also concerned that adopting a higher threshold for our programs could
interfere with governmentwide reciprocity. While CTIA and USTelecom noted that agencies tasked with regulating other capital-intensive
industries have increased their thresholds and urge that inflation should be considered, the breadth and diversity of outlays
made through our covered programs, as well as the myriad threats to the integrity of our programs, weigh against adjusting
the threshold. Even a small lower tier participant (e.g., a marketing organization) can drive significant amounts of waste, fraud, and abuse.

We also find a “transaction” can be cumulative and encompass more than a one-off funding request number (FRN), application,
or monthly disbursement. Bad actors should not be able to avoid the obligations that attach to lower tier participants by
dividing larger projects into smaller reimbursement requests that fall below a transaction threshold. Instead, the SDO must
have the discretion to aggregate smaller related FRNs, applications, or disbursements to meet the threshold. For example,
an “act or pattern of behavior” could fall within a single contract that multiple E-Rate or Rural Health Care applications
rely on, or within a particular enrollment or claims process or policy that a Lifeline service provider applied to multiple
Lifeline subscribers.

An “act or pattern of behavior” can also include, for example, a billing practice that does not account for changes in the
service start or end dates, or a subscriber's non-usage of a USF-supported service that results in the Rural Health Care (RHC)
program or the Lifeline program being over-invoiced for services that were not actually provided. Although missing one change
in a service date or the non-usage of a single Lifeline subscriber may be a small amount that is over-charged, these acts
or patterns of behavior have resulted in significant amounts of over-billing in the USF programs.

Primary and Lower Tier Classifications for High-Cost Programs. For the High-Cost programs, we adopt the NPRM's proposal that the primary tier participant will be the carrier receiving support.
We likewise adopt the NPRM's proposal that lower tier participants are contractors, subcontractors, suppliers, consultants,
or their agents or representatives for High-Cost-supported transactions if: (1) such person has a material role relating to,
or significantly affecting, claims for disbursements related to the High-Cost program; (2) such person is a “principal;” or
(3) the amount of the transaction involving the participant is expected to be at least $25,000. We received no comment on
these proposals.

Primary and Lower Tier Classifications for the Lifeline Program, Affordable Connectivity Program, and ACP Outreach Grant Program. In the Lifeline program and former ACP, we adopt the proposals that the primary tier participant will be the service provider
receiving support, while for the former ACP Outreach Grant Program, the primary tier participants were those parties obtaining
grants (consistent with sections 180.970 and 180.200 of the Guidelines). Although the appropriation for the ACP has been exhausted,
we include misconduct in the ACP as a basis for suspension and debarment because many service providers that participated
in ACP also participate in the Lifeline program and it can also take time to investigate and assess the misconduct. Additionally,
we adopt the proposals that beneficiaries under these programs generally are not considered primary or lower tier participants.
For the ACP Outreach Grant Program, however, beneficiaries are primary tier participants. Under both the Lifeline program
and the former ACP, the service providers can submit consumer Lifeline and/or ACP applications to the

  National Verifier and enroll subscribers through the National Lifeline Accountability Database, and therefore service providers
  are in the best position to have up-to-date information on customer eligibility, activation, and use of their Lifeline and/or
  ACP services. In addition, the service provider submits requests for payment to the USF Administrator and is best situated
  to carry out the obligations of primary tier participants under the Guidelines. In contrast, interactions between low-income
  consumers and the Commission or the USF Administrator are incidental. We received no comment on these proposals.

The NPRM proposed three categories of lower tier participants in the Lifeline program. We received no comment on these categories
and therefore adopt the proposal without modification. We also adopt the same categories for the former ACP because of the
similarities between the two programs. First, lower tier participants include parties (except for the primary tier Lifeline
carrier or ACP service provider) to any contract or award in which a person is reimbursed, including but not limited to contracts
or awards based on the number of Lifeline or ACP subscribers enrolled or providing commissions, or any combination thereof,
regardless of dollar value. Second, lower tier participants include contractors, subcontractors, suppliers, consultants, or
their agents or representatives, and third-party marketing organizations for Lifeline or ACP-supported transactions, or their
agents or representatives, including enrollment representatives, if: (1) such person has a material role relating to, or significantly
affecting, claims for disbursements related to the Lifeline program or the ACP; (2) such person is considered a “principal;”
or (3) the amount of the transaction involving the participant is expected to be at least $25,000.

We adopt similar categories for lower tier participants in the former ACP Outreach Grant Program, recognizing that some grantees
may do business with third parties in conducting their covered transaction. In the ACP Outreach Grant Program, lower tier
participants include subrecipients, contractors or subcontractors of the grant recipients, or their agents or representatives,
if: (1) such person has a material role relating to, or significantly affecting, claims for disbursements related to the ACP
Outreach Grant Program; (2) such person is considered a “principal;” or (3) the amount of the transaction involving the participant
is expected to be at least $25,000.

Primary and Lower Tier Classifications for the E-Rate Program. In the E-Rate program, we adopt the proposal that both the program applicant (the school, library, or consortium) and the
service provider(s) selected by the applicant (as indicated on FCC Form 471) be designated as primary tier participants. We
received no comment on this proposal. We find that extending the primary tier designation to all applicants will allow us
to obtain more extensive primary tier disclosures from the applicants themselves before approving transactions, while also
ensuring that applicants will obtain disclosures from service providers during their bid selection process under the modified
disclosure rules we adopt.

The NPRM also proposed that the service providers selected by the applicant schools, libraries, and consortia also be considered
primary tier participants, regardless of whether they submit invoices directly to USAC for reimbursement. Here too, we received
no comment and adopt the proposal without modification. In our experience, service providers, like applicants, may be responsible
for waste, fraud, and abuse, and therefore imposing the more substantial primary tier obligations and disclosure requirements
on these entities also promotes the Commission's goal of protecting federal funds.

Under the E-Rate program, schools and libraries may create “consortia” that can seek competitive bids and/or apply for E-Rate
funding on behalf of all their members. When schools and libraries participate as a consortia, the NPRM proposed that the
consortium itself, acting through its lead member, would be a primary tier participant, along with the member schools or libraries.
In considering any suspension or debarment action, however, we proposed that the SDO should evaluate which particular school
or library consortium member was responsible for the misconduct and direct the suspension and debarment orders to those responsible
for the bad acts, rather than to all consortium members. We adopt that proposal.

E-Rate Central supported this tailored approach to consortia, but further proposed that “multiple schools and libraries being
serviced by a single E-Rate consultant or service provider be treated in an equivalent manner.” If E-Rate Central is proposing
that when a lower tier participant is excluded each school or library serviced by that lower tier participant should be evaluated
on its own merits in exclusion proceedings, the Guidelines already provide for such case-by-case review. Among other things,
an SDO must consider the facts and circumstances of each particular case, including any arguments that a respondent raises,
and must make a final determination about that respondent's present responsibility. Alternatively, if E-Rate Central is requesting
that a lower tier participant's misconduct in connection with one school or library not affect transactions involving another
school or library with whom that lower tier participant works, that may be unavoidable. As explained above, where a participant
in an E-Rate transaction is excluded, we require that other parties to the transaction promptly complete a service provider
or SPIN change and, for the integrity of the program, terminate their dealings with the excluded party (unless an exception
is granted under section 180.135 of the Guidelines or under section 6001.125 of our supplemental rules). Finally, if E-Rate
Central is requesting some broader form of relief that would undermine the exclusions, we find that it would frustrate the
purposes of the Guidelines, one of which is to facilitate a broad exclusion when it is in the public interest.

Finally, the NPRM proposed three categories of lower tier participants for the E-Rate program. Lower tier participants include
contractors, subcontractors, suppliers, consultants, or their agents or representatives for E-Rate transactions if: (1) they
have a material role relating to, or significantly affecting, claims for disbursements related to the E-Rate program; (2)
they are considered a “principal;” or (3) the amount of the transaction involving the participant is expected to be at least
$25,000. All these individuals or entities play important roles in our E-Rate transactions, and we find it is important to
our oversight and to the integrity of the E-Rate program that they be included as lower tier participants.

We also note that given the similarities between the program rules (such as forms and processes) and overlap in participants,
for the purposes of this Report and Order, E-Rate specific rules and requirements adopted in this Order will also be applicable to the Cybersecurity Pilot Program.

Primary and Lower Tier Classifications for the Rural Health Care Program. In the Rural Health Care program, we adopt the NPRM proposal that both the program applicant and the service provider(s) selected
by the applicant (as indicated on FCC Form 462 or 466) be designated as primary tier participants. We received no comment
on these proposals, and for the same reasoning discussed in connection

  with the E-Rate program, now adopt them.

Similarly, the NPRM proposed that a consortium applicant in the RHC Health Care Connect Fund program, acting through its lead
entity, would be the primary tier participant, along with its member health care providers, but that in exclusion proceedings,
the SDO should evaluate which particular consortium member is responsible for the underlying misconduct and direct the suspension
and debarment orders to those entities, rather than to all consortium members. For the same reasoning articulated in the E-Rate
program, we now adopt this proposal.

Finally, the NPRM proposed three categories of lower tier participants for the RHC program. We received no comment on these
proposals, and for the same reasoning discussed in connection with the E-Rate program, now adopt them. Lower tier participants
include contractors, subcontractors, suppliers, consultants, or their agents or representatives for RHC program transactions,
if: (1) they have a material role relating to, or significantly affecting, claims for disbursements related to the RHC program;
(2) they are considered a “principal;” or (3) the amount of the transaction involving the participant is expected to be at
least $25,000.

Primary and Lower Tier Classifications for the TRS Program and NDBEDP. In the TRS program and the NDBEDP, we adopt the proposal that the service providers and certified programs receiving payments
should be deemed the primary tier participants. We received no comment on this proposal, and for the reasons set forth in
the NPRM now adopt it. In these programs, the service providers for TRS and certified programs for NDBEDP evaluate the qualifications
of customers to participate in the programs. In addition, the service providers and certified programs submit requests for
payment to the program administrators and are in the best position to carry out the obligations of primary tier participants
under the Guidelines. Specifically, for the TRS program (other than TRS that is provided through state programs) and the NDBEDP,
the primary tier participants will be the certified entities that are reimbursed by the Commission and the TRS Fund administrator
for providing services under the covered transactions. Additionally, for TRS that is provided through a state TRS program,
the primary tier participants will be the TRS providers that are authorized by each state to provide intrastate TRS under
the state program and that, accordingly, are compensated by the TRS Fund for the provision of interstate TRS. We received
no comment on the question of whether the rules should treat certain types of TRS and NDBEDP participants differently, noting
that, for the NDBEDP, some participants are state or local governments, and others are non-profits. In the absence of a clear
record, we decline to distinguish in our rules between participants based on their governmental or non-governmental status.

The NPRM observed that, in contrast to the service providers, direct interaction between TRS and NDBEDP beneficiaries (i.e., individuals with hearing or speech disabilities) and the Commission or the program administrators is incidental. Because beneficiaries
in the TRS program and NDBEDP do not directly submit applications to the program administrators, the NPRM proposed that, similar
to Lifeline, these beneficiaries should not be considered either primary or lower tier participants, and not be subject to
the exclusion rules. We received no comment on this proposal and now adopt it.

The NPRM proposed three categories of lower tier participants for the TRS program and the NDBEDP. We received no comment on
these proposals and now adopt them. Lower tier participants include contractors, subcontractors, suppliers with whom the certified
programs have a contractual relationship, consultants, or their agents or representatives for TRS- or NDBEDP-supported transactions
if: (1) they have a material role relating to, or significantly affecting, claims for disbursements related to the TRS or
NDBEDP programs; (2) they are considered a “principal;” or (3) the amount of the transaction involving the participant is
expected to be at least $25,000. In the case of suppliers, however, to ensure more effective enforcement, we have clarified
that only those suppliers with whom the certified programs have a contractual relationship shall be automatically deemed lower
tier participants.

Transactions with the USF, TRS Fund, and NDBEDP Administrators. The Commission also proposed a clarification to section 180.200 of the Guidelines explaining that covered transactions include
not only transactions between a person and the Commission, but also any transactions between a person and the administrators
of relevant programs, when those administrators are acting on behalf, or as agents, of the Commission. As noted above, the
Wireline Competition Bureau (WCB) subsequently sought comment on application of this proposal to the former ACP. We received
no specific comment on this proposal, and we now adopt it. This clarification will ensure that all transactions overseen by
the Commission under these programs are covered, whether the Commission is acting directly or through its agents.

Principals

The definition of “principal” plays an important role under the Guidelines not only in establishing the scope of disclosure
requirements, but also in ensuring that parties who may play a significant role in covered transactions are subject to our
suspension and debarment rules when justified by the facts. The modified definition of “principal” ensures that the Commission
may take an exclusion action, if justified for cause, with respect to all parties that fall into this modified definition.

The Guidelines define “principal” as: (a) an “officer, director, owner, partner, principal investigator, or another person
. . . with management or supervisory responsibilities;” or (b) a “consultant or other person, whether or not employed by the
participant or paid with Federal funds, who (1) [i]s in a position to handle Federal funds; (2) [i]s in a position to influence
or control the use of those funds; or (3) [o]ccupies a technical or professional position capable of substantially influencing
the development or outcome of an activity [in a transaction].” The Guidelines further state that an agency may “[i]dentify
specific examples of types of individuals who would be `principals' under [its] nonprocurement programs and transactions,
in addition to the types of individuals” specifically identified above.

The NPRM proposed that in addition to those persons defined as principals under the Guidelines, the term “principal” should
also mean “any person who has a critical influence on, or substantive control over, a covered transaction, whether or not
employed by the participant.” The NPRM then identified classes of persons who may fit this supplemental definition of “principal,”
including management and marketing agents, accountants, consultants, investment bankers, engineers, attorneys, and other professionals
who are in a business relationship with participants in connection with a covered transaction under a Commission program.
(This expanded definition of the term “principal” draws upon a supplement to the governmentwide definition adopted by HUD.)
Most commenters did not address the NPRM's proposed

  definition of “principal.” WISPA, however, recommended that the Commission adopt OMB's definition of “principal” without modification,
  while raising some concerns about the clarity and scope of our proposed supplemental rule. And SHLB-SECA, while not expressly
  objecting to our supplemental definition of “principal,” suggested that the breadth of the definition extends to those that
  merely provide advice and do not necessarily have substantial influence or control over a covered transaction.

We now adopt a modified version of the NPRM's proposed supplemental definition of “principal” that expands the Guideline's
definition, but is narrower than originally proposed. As noted, the existing definition in the OMB Guidelines includes an
“officer, director, owner, partner, principal investigator, or another person . . . with management or supervisory responsibilities”
and we adopt that definition as part of our overall adoption of the OMB Guidelines' definitions. This decision therefore adequately
captures a person, such as a corporate executive or board member with management or supervisory responsibilities, that the
Commission may wish to exclude, particularly given our decision regarding the scope of imputation. The supplemental definition
of “principal” we adopt has two components: first, in addition to the persons deemed principals under section 180.995(a) of
the Guidelines, a principal will also include any consultants that have a business relationship with participants in connection
with a covered transaction, as well as Lifeline or ACP marketing organizations; and second, in addition to any person deemed
a principal under section 180.995(b) of the Guidelines, a principal will also include any person having a critical influence
on, or substantive control over, a covered transaction even if not in one of the enumerated categories. In this regard, we
find that an individual's status as a principal does not depend on whether that individual is employed by the participant,
the specific title the individual holds, or whether the person is paid with federal funds. Rather, we focus on the function
that the person performs and how adequately the person performs it with respect to “principal” level responsibilities. The
modified definition of “principal” ensures that the Commission may take an exclusion action, if justified for cause, with
respect to all parties that fall into this modified definition.

We also decline to designate management agents, accountants, or attorneys as persons who will automatically be deemed principals
as we had proposed in the NPRM. We conclude that the term “management agent” which was drawn from a HUD definition is inapposite
in our context. As to accountants or attorneys, we note that these professionals could be principals under the “influence
or control” prongs of the supplemental definition, but decline to categorically deem them as principals. We received no specific
comment on the categories of persons that the NPRM proposed as “principals,” but we remove “investment bankers” and “engineers”
from the definition (as proposed) because, on further review, we find that these professionals have not been drivers of waste,
fraud, and abuse in our programs.

To implement our supplemental definition of principal, we also define “Lifeline marketing organization” or “ACP marketing
organization” as an entity that: (i) has a contractual relationship with the entity providing the Lifeline or ACP services
to consumers for the purpose of securing Lifeline or ACP enrollments; or (ii) has any contract to provide for such Lifeline
or ACP enrollment services.

The first component of our supplemental definition is a per se rule that consultants who have or had a business relationship
with the participant in connection with a covered transaction and Lifeline or ACP marketing organizations shall be considered
a principal. Our decision to treat certain enumerated professionals as principals without requiring an explicit fact-finding
process for each person in these categories reflects both a special concern for the roles played by those professionals in
Commission transactions and the need for clarity and administrability in our rules. Were we to adopt a supplemental definition
requiring a finding of fact to clarify the disclosure requirements applicable to each participant in a transaction, as WISPA
has suggested, participants would face increased uncertainty with respect to their disclosure responsibilities, while the
Commission would need to continually provide guidance in numerous transactions as to what constitutes “critical influence”
or “substantive control.”

Moreover, based on our experience with our programs, we find that in most cases consultants and Lifeline or ACP marketing
organizations would likely be designated as principals under the “influence” or “control” component of our definition, even
if they were not categorically included in the definition. Marketing organizations, for instance, have had an outsized impact
on activity in the Lifeline program and the former ACP, frequently submitting apparently fraudulent Lifeline or ACP enrollments
to increase reimbursements for service providers and, prior to its prohibition by the Lifeline and ACP rules, potential commissions
for the agents themselves. Likewise, consultants play a significant role in the E-Rate and Rural Health Care programs when
retained by program participants to manage projects that receive USF support. In several cases, such consultants have committed
serious program violations. The expanded definition of “principal” will enable us to bar those who participate in the schemes
as well as those who orchestrate them.

We further clarify, however, that enrollment representatives of marketing organizations will be classified as lower tier participants
because of their “material role relating to, or significantly affecting, claims for disbursements related to the programs
in which they participate” as described in the Tier Chart of this Report and Order, but such persons will not be deemed “principals”
except in extraordinary circumstances as determined on a case-by-case basis. The term “enrollment representatives” shall have
the same meaning as set forth in the Commission programs that may be implicated in any transaction (to the extent such definitions
exist). Moreover, the disclosure obligations of marketing representatives, who are lower tier participants, will be limited
to those under section 180.355 of the Guidelines.

There was muted objection to designating various persons providing advice to program participants as “principals.” SHLB-SECA
did not object directly, but “encourage[d] the Commission to clarify that [providing] incorrect or allegedly incorrect advice
. . . may not be grounds for suspension or debarment,” explaining that “[a]dvice alone does not constitute substantial influence
or control over a covered transaction.” Similarly, SHLB-SECA and E-mpa argued that consultants and other third parties can
never cause violations or misconduct by providing “incorrect or allegedly incorrect advice” because “participants are free
to accept or reject advice, whether it be good, bad or somewhere in between.” We reject these assertions. As a result of our
experience administering our programs and addressing cases involving waste, fraud, and abuse, we find that consultants and
other third parties can easily contribute to rule violations by negligently or intentionally providing erroneous or misleading
advice, notwithstanding the fact that “USF

  participants are free to accept or reject advice.”

We note in any given case, a consultant may make the factual argument that it did not cause the misconduct by the primary
tier participant, which, if true, would preclude the consultant's suspension or debarment. But if the evidence demonstrates
that a consultant's “act of giving advice” was the cause of rule violations or misconduct by a program participant, then an
exclusion might be appropriate, depending on the aggravating and mitigating factors. Thus, for example, a consultant also
could argue in any given case that, to the extent that its advice was incorrect, it was merely negligently so, which, if true,
would weigh against exclusion as we have made clear in this analysis.

As to the second prong of our supplemental rule, we adopt the “critical influence on or substantive control over” component
to ensure that certain forms of misconduct in our programs may be addressed even if the bad actor may not otherwise be captured
by the Guidelines' definition of principal. For example, a person that violates our competitive bidding rules might not be
“influencing the development or outcome of an activity required to perform the covered transaction,” yet that person's misconduct
could merit a debarment. For example, in the course of an investigation into the TRS entity, it might be determined that a
particular hearing health professional or entity had a significant adverse effect on the transaction that could warrant a
debarment of that person. Individual hearing health professionals are not directly subject to Commission rules, but such conduct
could critically influence ineligible individuals to register for and use TRS, despite the determination of eligibility ultimately
lying with TRS providers and users. Our expanded definition of “principal” affords the Commission the flexibility to consider
such conduct in protecting program integrity.

We reject WISPA's recommendation that the Commission adopt the OMB definition of a “principal” without any modification as
the definition of “principal” adopted here advances the purpose of the Guidelines. Certain individuals that facilitate program
abuse (including rule violations) may not fall within the Guidelines' more narrow definition of “principal.” Standing alone,
the Guidelines could unduly restrict the Commission's ability to address the actions of individuals it has identified as posing
a risk to the integrity of its programs.

Likewise, we find that adopting these program-specific supplemental definitions will provide greater certainty and notice
to program participants and improve administrative efficiency and program integrity. Under the Guidelines, both primary and
lower tier participants must promptly make disclosures about all “principals” to the transactions before a transaction is
consummated. We therefore disagree with WISPA's concern that the SDO first must make individualized findings about whether
a person in the supplemental categories is a “principal” before disclosures are required. Such a cumbersome process would
delay consummation of transactions and the timely delivery of services. In contrast, by affording participants further clarity
at this stage, our supplemental rule will ensure more timely disclosures that will facilitate program integrity and efficiency.
We would also urge participants to err on the side of disclosure in close cases. Finally, we conclude the benefit of our enhanced
ability to combat forms of waste, fraud, and abuse, greatly outweigh any incidental burdens created by the modified disclosure
requirements.

Participant Disclosures by Tier

The Guidelines require both primary and lower tier participants to disclose certain information before they enter into a covered
transaction. We adopt the Guidelines' disclosure requirements, with program-specific modifications, as detailed below. In
addition to the discussion in this section, we refer parties to the Guidelines in 2 CFR part 180, subpart C (Responsibilities
of Participants Regarding Transactions Doing Business with Other Persons), and note that entities who participate in federal
grant programs (e.g., schools, libraries, or rural health care providers) or seek federal contracts (e.g., service providers) should already be familiar with similar requirements.

Primary Tier Participants. Under the Guidelines, primary tier participants must advise the agency if they are presently excluded or disqualified, and
also must state (a) whether the participant or any principals for the transaction “[h]ave been convicted within the preceding
three years of any of the offenses listed in § 180.800(a) or had a civil judgment rendered against [them] for one of those
offenses within that time period;” (b) “[a]re presently indicted for or otherwise criminally or civilly charged by a governmental
entity (Federal, State or local) with the commission of any of the offenses listed in § 180.800(a);” or (c) “[h]ave had one
or more public transactions . . . terminated within the preceding three years for cause or default.”

The NPRM proposed that these disclosure requirements could be communicated and implemented by amending existing program forms,
form instructions and certification rules and sought comment on how to administer such requirements in a manner that minimizes
burdens on primary tier participants. The NPRM and subsequent Public Notice also proposed to clarify that such disclosures
by primary tier participants be made not only to the Commission and the applicable bureaus, but also to the relevant program
administrators.

We adopt the full disclosure requirements set forth in the Guidelines for primary tier participants. Commenters generally
focused their opposition on the breadth and clarity of the disclosure requirement—especially as it relates to the disclosure
of having “one or more public transactions . . . terminated within the preceding three years for cause or default.” For example,
immixGroup, NCTA, E-Rate Central, and E-mpa sought clarification on what kinds of “termination” would merit disclosure. (immixGroup,
however, supported the requirement that parties report convictions for offenses listed under section 180.800(a) and stated
that it might be reasonable for parties to have to report charges or indictments for those same offenses.) Several commenters
also specifically requested that we clarify that a mere denial of a USAC funding request would not qualify as a reportable
“termination.” Commenter immixGroup also suggested that we adopt “exceptions to both the reporting of funding denials requirement
during the pendency of an administrative appeal and, specifically, until a final non-appealable decision is issued by the
appropriate body of last resort.” CTIA and USTelecom suggested that the disclosure requirement for terminations be limited
to transactions with the Federal government, not state and local governments.

First, we adopt a supplemental rule clarifying that a mere denial of a funding request does not, without more, constitute
a “termination . . . for cause or default” of a public transaction as that phrase is used by the Guidelines. Program administrators
deny funding requests for a wide variety of reasons, some of which may arise from minor technical and procedural errors. On
the other hand, participants are required to report termination of a previously approved funding request based on serious
errors or misconduct (such as violations of competitive bidding requirements) by a participant in the

  covered transaction that was terminated. Although this requirement does mean that, for example, a service provider must disclose
  a denial caused by a violation by an applicant, we note again both that a party making a disclosure may provide additional
  information (*e.g.,* that it was not responsible for the violation), and that unfavorable disclosures do not automatically trigger denial of a
  transaction or the initiation of exclusion proceedings.

Second, we decline to establish an exception for otherwise reportable terminations that are pending appeal. The mere disclosure
of a termination—pending appeal or otherwise—does not automatically trigger the denial of a new transaction or initiate an
exclusion proceeding. Rather, the Commission has flexibility under the Guidelines to consider both the disclosed information
and “any additional information or explanation [a transaction participant] elect[s] to submit with the disclosed information”
in deciding whether to approve the transaction. Additionally, the Commission or program administrators might allow a transaction
to proceed, despite an unfavorable disclosure, but employ additional safeguards, including heightened scrutiny or audits,
to ensure compliance. Establishing an exception covering all terminations pending appeal would unnecessarily deprive the Commission
and program administrators of potentially relevant information about transaction partners. We will not, however, require the
reporting of terminations that have been reversed or vacated.

Third, we decline to limit the termination reporting requirement to Federal transactions. Subject to the clarifications herein,
primary tier participants must report terminations of transactions with state and local governments. Like Commission programs,
programs run by state and local governments often require participants to handle and direct public funds in an appropriate
manner. A participant's propriety in these dealings can offer valuable insight as to its fitness to participate in Commission
programs, particularly when a participant's prior contact with the Federal government is limited or nonexistent. We are unconvinced
by CTIA and USTelecom's argument that “identifying every state and local `transaction' terminated for cause or default . .
. would be highly burdensome.” The reporting requirement stretches back only three years and would likely require significant
review of only a small subset of transactions.

We also adopt a supplemental rule requiring that such disclosures be made not only to the Commission, but to the relevant
program administrators as well. We find that the requirements are essential to ensuring that the program administrators and
the Commission have access to the information needed to make informed decisions around approval and denial of transactions.

In addition, recognizing that primary tier participants in the E-Rate and RHC programs typically enter into contractual arrangements
with each other, we create a supplemental rule requiring service providers in the E-Rate and RHC programs to make the necessary
disclosures not only to the Commission and USAC, but also to the schools, libraries, or health care providers during the competitive
bidding process. Because service providers will now be primary tier participants, section 180.300 of the Guidelines, which
requires pre-transaction verification by a primary tier participant that a lower tier participant is not excluded, would not
apply on its face to transactions between E-Rate schools and libraries and their service providers or rural health care beneficiaries
and their service providers because all these entities will now be considered primary tier participants. Therefore, we adopt
a supplemental rule modifying section 180.300 to require that the verifications required by that rule will be applicable not
only to transactions with “another person at the next lower tier” but to transactions among participants at the same tier
as well.

We note that disclosures among primary tier participants other than the agency involved is not envisioned under the Guidelines
because for typical transactions covered by the Guidelines, non-federal primary tier participants may not be entering into
transactions with each other. However, the E-Rate and RHC programs follow a different model, and service providers in the
first instance are chosen by the program beneficiaries, not by the Commission. Therefore, to facilitate program integrity
and ensure the efficacy of disclosures, primary tier disclosures as required by Supplemental Rule 6001.300(a) should be made
to the beneficiaries prior to consummation of any covered transactions, preferably at an early stage in the bid selection
process and before the service provider is selected and the FCC Form 471, 462 or 466 is submitted in cases where there are
no bids or a competitive bidding exemption may apply.

We encourage schools, libraries, and health care providers to require such disclosures as early as possible in the bid selection
process so that they may consider such disclosures before entering into any covered transactions.

We further direct WCB and CGB to modify, as appropriate, any applicable program forms (such as FCC Forms 470, 461, or 465)
to require the relevant primary tier disclosures. In those cases in which no bids are submitted, or in which a competitive
bidding exemption is applicable (such as 47 CFR 54.622(i)), the program beneficiaries shall obtain such disclosures from service
providers before they may enter into any new covered transactions for program services.

These requirements will ensure that all primary tier participants receive valuable background information about the parties
with whom they are considering doing business. Importantly, most disclosures (other than that the disclosing party has been
excluded or disqualified) are not dispositive or outcome determinative. Rather, disclosures enable program beneficiaries,
program administrators, and the Commission to evaluate the level of risk associated with any given transaction and consider
appropriate remedial measures short of disqualification (e.g., compliance conditions, audits, heightened scrutiny).

We recognize that the Guidelines' disclosure requirements necessarily involve some administrative costs for the Commission
and program administrators, as well as program participants. But we reject CTIA and USTelecom's argument that these requirements
will have the net effect of diverting “resources better invested in providing service and equipment to unserved communities
and consumers” into “satisfying onerous compliance obligations.” To the contrary, we anticipate that these disclosure requirements
will ensure that scarce federal support dollars fulfill their intended purposes by allowing the Commission and primary tier
participants to avoid entering into business with bad actors who may commit waste, fraud, or abuse. The disclosures will also
allow the Commission and program administrators to address perceived risks ex ante through monitoring and audits rather than
through ex post remedies, which also will enhance the efficiency of the Commission's operations.

Lower Tier Participants. The Guidelines' disclosure requirements for lower tier participants are less extensive: lower tier participants need disclose
only whether they are excluded or disqualified from participating in

  covered transactions. The NPRM asked whether the Commission should adopt a supplemental rule requiring that lower tier participants
  also disclose the information required of primary tier participants to both the Commission and program administrators, and
  to the higher tier participant with which they seek to conduct business. The NPRM noted that, under the Guidelines, an unfavorable
  disclosure by a primary tier participant would not necessarily cause the federal agency to deny participation (except for
  instances of exclusion or disqualification), and the NPRM proposed to extend this protection to disclosures by lower tier
  participants. The NPRM explained that extending primary tier disclosure requirements to lower tier participants would allow
  the Commission and its administrators, as well as higher tier participants, the opportunity to consider additional information
  to better determine whether the participation of lower tier participants is appropriate. The NPRM proposed requiring that
  primary and lower tier participants include a term or condition in their transactions with the next lower tier participants
  mandating compliance with the disclosure rules.

We adopt with the modifications and exceptions described below our proposed rule extending the Guidelines' primary tier disclosure
requirements to lower tier participants in all Commission programs subject to this Report and Order. We find that this extension
will advance the public interest and is appropriate given our experience combatting waste, fraud, and abuse in our programs.
Specifically, lower tier participants, such as consultants and marketing organizations, have been significant drivers of malfeasance
in the universal service programs. We do not believe that requiring lower tier participants to disclose only whether they
are excluded or disqualified from participating in covered transactions will fully accomplish the Guidelines' objective of
enabling government agencies or the parties with whom these participants may be conducting transactions to make better-informed
decisions about prospective business partners.

We further modify the Guidelines to require disclosures among and between lower tier participants that enter into covered
transactions with each other. In those transactions, the lower tier participant who is performing work for another participant
shall provide the disclosures to any participant who is paying for the work or otherwise hiring the person under the covered
transaction. Thus, for example, an E-Rate subcontractor who wants to enter into a covered transaction with a contractor—both
of whom are lower tier participants—must provide any applicable disclosures to that contractor before consummating the covered
transaction. Similarly, a marketing organization that wants to perform a portion of Lifeline marketing work for another marketing
entity must provide that entity with the applicable disclosures. This requirement will again ensure that all parties, regardless
of tier, who enter into covered transactions can make an informed decision about their potential partners.

However, we tailor the disclosure obligations for enrollment representatives of marketing organizations, which we classify
as lower tier participants. Enrollment representatives need only disclose whether that individual representative is excluded
or not and need only make the disclosures to the marketing organization with whom the representative is employed or seeks
employment. We limit the disclosure obligations for enrollment representatives because we conclude that a marketing organization
will not require the full panoply of disclosures in order to make reasonable hiring decisions of enrollment representatives.
Additionally, we recognize the substantial administrative burden that would be imposed on lower tier employees of marketing
representatives to make the more expansive disclosures. To ensure Commission oversight of this disclosure obligation, enrollment
representative disclosures shall be retained by the marketing organization for review by the Commission for the period during
which the enrollment representative is employed in support of the program or the period otherwise required by document retention
rules, whichever is longer.

Few commenters squarely addressed the proposal to expand disclosures for lower tier participants. CTIA and USTelecom stated
that the Commission “has not explained why departure from its current rules, which do not extend to suppliers or subcontractors,
is necessary to protect the public interest.” They therefore urged the Commission to apply disclosure rules to primary tier
applicants only. As already demonstrated, lower tier participants have been significant drivers of malfeasance in the universal
service programs, and we require and welcome more expansive tools to effectively address the waste, fraud, and abuse that
they originate. SHLB-SECA similarly “question[ed] whether the disclosures proposed in the NPRM will help the Commission.”
As already explained above, the disclosures will protect our programs by allowing parties, including the Commission and program
administrators, to review unfavorable information before determining whether or not to proceed with a transaction—possibly
deciding to avoid the transaction altogether.

CTIA and USTelecom, NCTA, and the Joint Association Commenters also requested clarification regarding how primary tier participants
are expected to collect required disclosures from lower tier participants. As they noted, section 180.300 of the Guidelines
allows a primary tier participant to verify whether a lower tier participant has been excluded or disqualified by checking
the SAM.gov Exclusions, collecting certifications, or including clauses or conditions in the terms governing covered transactions. We
agree that these methods are appropriate for confirming whether a lower tier participant has been excluded or disqualified.
But we note that checking SAM.gov Exclusions does not allow a primary tier participant to verify the additional information that we require from lower tier
participants in our supplemental rule. These additional disclosures should be obtained through collecting certifications or
including clauses or conditions in covered transactions, and, consistent with the record, we so provide in Supplemental Rule
6001.330.

Lifeline Disclosures. Under the Lifeline program, eligible telecommunications carriers (ETCs) as well as their lower tier participants will be subject
to disclosure obligations. The NPRM sought comment on how to implement these disclosure obligations. For example, the NPRM
asked whether the disclosure rules should require all primary and lower tier participants in the Lifeline program to file
disclosure statements, upon penalty of perjury, reporting all required disclosures or certifying that they have no reportable
disclosures to make. It also asked whether the disclosure should be added to existing forms or submissions for ETCs, how often
such disclosure statements should be filed, and what remedies should be available if participants fail to disclose the required
information. The NPRM also sought comment on several program-specific questions, including whether individuals who have registered
with USAC for access to the Lifeline National Verifier or National Lifeline Accountability Database systems should be required
to file disclosure statements upon registration and every subsequent recertification, and whether ETCs should be required
to maintain such

  disclosure statements as part of their record retention requirements.

We did not receive comment regarding the implementation of disclosure requirements for the Lifeline program. Relying on the
Commission's expertise providing oversight of the Lifeline program, we find it is most appropriate for primary and lower tier
participants in the Lifeline program to file annual disclosure statements, upon penalty of perjury, reporting all required
disclosures or certifying that they have no reportable disclosures to make. Primary tier participants may also file on behalf
of lower tier participants with which they have a direct relationship. However, as already discussed, the disclosure requirements
for enrollment representatives are more limited. As the disclosure requirements may apply beyond ETCs, we do not believe a
current information collection can easily be modified to request this information. Therefore, we direct WCB to develop an
information collection to receive the appropriate certifications annually. At this time, we do not believe it is necessary
to receive similar disclosures from individuals as they register to access USAC's systems. Consistent with the Commission's
Lifeline rules, we also determine that it is appropriate for primary tier participants to maintain documentation that substantiates
their required certification, at a minimum, for the three full preceding calendar years and provide such documentation to
the Commission or USAC upon request. Finally, in addition to any other enforcement mechanisms that may be available, a participant's
non-filing of required disclosures may be considered by the relevant bureaus and offices of the Commission as “credible information”
for the purposes of directing USAC to apply a funding hold to universal service funds. We believe that all of these efforts
will ensure better stewardship of universal service funds and prevent potential waste, fraud, and abuse in the Lifeline program.
Given the similarity across programs, we delegate authority to WCB and CGB to develop appropriate information collections
to apply the Lifeline program's disclosure requirements to former ACP and ACP Outreach Grant Program and to streamline any
required disclosures under these programs.

USF Competitive Bidding Short Forms. In some instances, the Commission conducts competitive bidding to award universal service support, as in the Connect America
Fund Phase II and Rural Digital Opportunity Fund auctions. In such competitive bidding processes, an applicant for support
first files a short-form application to participate in bidding. This approach streamlines the competitive bidding process
and encourages participation. At the short-form stage, pursuant to the competitive bidding rules, an applicant is required
to certify either that it “is in compliance with all statutory and regulatory requirements for receiving the universal service
support . . . , or, if expressly allowed by the rules specific to a high-cost support mechanism, . . . that the applicant
acknowledges that it must be in compliance with such requirements before being authorized to receive support,” without being
required to demonstrate fully such compliance. Only after becoming a winning bidder must an applicant file a long-form application
demonstrating in detail the applicant's qualification to receive the support.

The Guidelines require primary tier participants not only to disclose whether they are presently excluded or disqualified,
but also to make several additional disclosures that could assist the agency in evaluating whether to enter into the transaction.
The NPRM acknowledged that requiring all of the disclosures and evaluations at the short-form stage could slow down auction
processes, and therefore sought comment on the appropriate balance between requiring helpful disclosures at the short-form
stage and preserving the speed of the competitive bidding process. The NPRM proposed three options for addressing this balance.
First, the NPRM proposed that at the short-form application stage the Commission would only require the applicant to disclose
whether they are presently excluded or disqualified and wait until the long-form application to require the applicant to submit
additional disclosures for review. Second, the Commission could require applicants to disclose at the short-form stage whether
the applicant or any of its principals are presently excluded or disqualified, and subsequently require the full disclosures
at the long-form stage. Or third, the Commission could require applicants to make all of the required disclosures on both
the short-form and the long-form application.

WISPA agreed that requiring applicants to provide all disclosures mandated by the Guidelines at the short-form application
stage could slow the auction process. It further suggested that since “[l]imiting the scope of the initial disclosures will
expedite staff review of short-forms and simplify preparation for USF auctions,” the Commission should, for the High-Cost
programs, require that an applicant disclose only whether it or any of its principals are presently excluded or disqualified.

We now adopt the NPRM's first (and narrowest) option, under which the Commission's review at the short-form stage is limited
to the status of the applicant— i.e., whether the applicant is presently excluded or disqualified—while a winning bidder will be required to make any additional
required disclosures when it submits a long-form application. Thus, for the reasons stated elsewhere in this Report and Order,
we choose not to adopt WISPA's recommendation that we implement the second option, which encompasses principals as well as
applicants, but clarify that the rule adopted involves fewer disclosures than the second option.

In a USF competitive bidding short-form application, an applicant must certify that it is “in compliance with all . . . regulatory
requirements for receiving the universal service support.” Therefore, a presently excluded applicant could not make the required
certification and could not successfully submit an accurate and complete short-form application. This approach will permit
the Commission to process competitive bidding applications more quickly and minimizes the disclosures and administrative burdens
required of potential participants. The applicant bears the risks that its short-form application is inaccurate and that required
disclosures in its long-form application could result in its disqualification from support and a default on its bid. We note
that long-form disclosures revealing that the initial certification was incorrect could result in enforcement actions, if
warranted.

We adopt these USF competitive bidding-specific rules based on our present experience administering competitive bidding auctions.
To the extent future USF competitive bidding mechanisms are structured differently and require additional or augmented suspension
and debarment rules, we reserve the ability to make such changes in those future rulemakings.

TRS and NDBEDP Disclosures. For the TRS program and NDBEDP, TRS providers and NDBEDP providers as well as their lower tier participants will be subject
to disclosure obligations. An entity seeking certification as a TRS provider or NDBEDP provider shall file the required disclosures
as part of its application for certification and renewal thereof. Additionally, internet-based TRS providers must update their
disclosures within 60 days of any change by filing notices of substantive

  change with the TRS Fund Administrator and the Commission. We amend part 64 of our rules to implement these disclosure requirements.

Each certified NDBEDP provider shall file updates to their disclosures every six months, including disclosures within required
program reports. Each NDBEDP provider shall also file a change in its disclosure as a notification of substantive change if
the disclosure bears directly on the provider's ability to meet the qualification necessary for certification as an NDBEDP
provider. We amend part 64 of our rules to implement these disclosure requirements.

Implications of Unfavorable Disclosures

Primary Tier Participants. The NPRM also contemplated what Commission action is warranted if a primary tier participant discloses unfavorable information
(other than an exclusion or disqualification) before entering into a transaction. While the NPRM noted suspension and/or debarment
proceedings as one possible method for the Commission to respond, the NPRM sought comment on whether the Commission's rules
should also permit less severe remedies. For example, the NPRM asked whether the Commission should, in consultation with the
relevant program administrator, merely preclude a participant from entering into the transaction at issue, prior to or in
lieu of suspending or debarring the participant. The NPRM also asked whether the agency could elect to not enter into covered
transactions with the party for some specified period, similar to the “limited denial of participation” process described
above. The NPRM also requested comment on whether the Commission's rules should be modified to permit the Commission to consider
unfavorable information in TRS or NDBEDP certification proceedings and, if so, what modification to our certification rules
would be necessary.

Commenters generally supported preserving flexibility for agency action in response to unfavorable disclosures. SHLB-SECA
and Funds for Learning preferred the use of tailored measures to avoid outright preclusion of a transaction, including “[a]llowing
the participant to enter into the transaction, but monitoring the participant's activities more closely.” SHLB-SECA also requested
that the Commission “specify which information may be deemed so unfavorable that rejection of a transaction is warranted.”
SHLB-SECA further suggested that the Commission “adopt a modified, formally authorized version of the [suspension] procedure
that USAC currently employs,” and that any discretionary process adopted by the Commission “come complete with reasonable
due process, transparency, and known time limits.”

The Guidelines afford agencies the flexibility to respond to unfavorable disclosures. Consistent with this approach, we now
adopt the proposal, strongly supported by comments in the record, that the Commission retain flexibility to pursue tailored
measures based on unfavorable disclosures. In addition to suspension and debarment proceedings, the agency may also consider
other remedies, including prohibiting a participant from continued participation in a transaction, or permitting transactions
presenting potential risks of misconduct to proceed with additional monitoring and oversight.

To implement this approach, we authorize the relevant bureau or office to determine, in the first instance, what remedies
are appropriate in light of an applicant's unfavorable disclosures and any other relevant circumstances. (For the TRS program
and the NDBEDP, we delegate authority to CGB. For the USF Programs, we delegate authority to WCB. For the former ACP and ACP
Outreach Grant Program, we delegate authority jointly to the bureaus in consultation with OMD.) Such remedies may include,
by way of example, approving the transaction only after entering into an administrative agreement (such as a compliance plan),
denying the application, terminating an ongoing transaction or a specific party's participation in such a transaction, or
referring the matter to the SDO to consider a limited denial of participation under the supplemental rules adopted above or
to initiate an exclusion proceeding, if necessary. We adopt a supplemental rule to implement this approach. We also direct
the administrators of the programs covered by the Guidelines to develop—and submit for approval to the relevant bureaus and
offices—policies and procedures governing how they will review unfavorable disclosures as part of their broader review of
applications, as applicable. In the case of the TRS program, and the NDBEDP, however, these disclosures will be reviewed directly
by CGB. In the case of the former ACP and ACP Outreach Program, these disclosures will be reviewed jointly by WCB and CGB
in consultation with OMD. We expect that in most cases, the remedies and procedures developed by the relevant bureau or office,
and those of the administrators, will permit administrators to continue approving (or denying) applications consistent with
current practice.

We decline SHLB-SECA's request that the Commission delineate “what information [should] be deemed so unfavorable that rejection
of a transaction is warranted.” Supplemental Rule 6001.345, consistent with section 180.340 of the Guidelines, is designed
to allow the Commission to address risks to program integrity without resorting to suspension and debarment action, if warranted.
To limit the availability of alternative responses would risk making suspension and debarment the only option available in
circumstances where another less severe action might be more appropriate.

Finally, we remind participants that any challenge to the imposition of the alternative agency actions may be done through
any normal procedures currently available for seeking reconsideration or review of that type of decision.

Lower Tier Participants. Based on our decision to require lower tier participants to disclose the same information as primary tier participants, we
also must adopt mechanisms for the Commission to address unfavorable disclosures by lower tier participants. The NPRM noted
that, for example, if a school is utilizing an E-Rate consultant who has been convicted of fraud related to another government
program but has not yet been debarred, the Guidelines themselves do not provide a mechanism for the rejection of the school's
E-Rate application. The NPRM explained that the additional disclosures might give the Commission and the relevant program
administrator reason to deny or closely monitor the lower tier participant and, if appropriate, should enable the agency to
initiate an exclusion proceeding against the lower tier participant (if the disclosures are so significant that suspension
or debarment is warranted).

Here again, we conclude that the relevant bureau or office will be best suited to determine what steps should be taken with
respect to a lower tier participant based on its unfavorable disclosures. (Therefore, for the TRS program and the NDBEDP,
we delegate authority to CGB. For the USF Programs, we delegate authority to WCB. For the former ACP and ACP Outreach Grant
Program, we delegate authority jointly to the bureaus in consultation with OMD.) And for applicable programs, we similarly
direct the administrators to develop, and obtain prior bureau approval of, policies and procedures governing the review of
unfavorable disclosures by lower tier participants—and, when necessary, to obtain prior

  bureau approval in novel situations or when departing from those policies and procedures.

Additionally, we clarify that the NPRM did not propose to “reject[ ] automatically every application that a participant with
a questionable past has touched” as SHLB-SECA suggests. As we have explained, most unfavorable disclosures by even a primary
tier participant will not automatically trigger exclusion proceedings and may not result in the denial of the transaction
in which the disclosures were made. Instead, the disclosures are additional data points that inform the agency's decisionmaking
when it comes to moving forward with a transaction. The same logic holds for unfavorable disclosures by lower tier participants,
except that such disclosures generally should be outcome determinative even less frequently than unfavorable disclosures by
primary tier participants, and only where the factual circumstances require that outcome to protect the integrity of Commission
programs. Moreover, consistent with the approach we take to “exceptions” and “continuations” as discussed above, primary tier
participants and other decisionmakers may consider “the number of suppliers” available for specific transactions, which “may
be limited in high-cost rural areas,” when determining how much weight to afford an unfavorable disclosure, as recommended
by CTIA and USTelecom. For example, a participant with unfavorable disclosures might be permitted to enter into or continue
with a covered transaction, but under heightened scrutiny or a compliance plan, depending on the circumstances. The supplemental
rule we adopt for unfavorable disclosures therefore applies by its terms to disclosures for both tiers of participants.

Moreover, we agree with commenters that in most if not all cases, the public interest will be served by affording the primary
tier participant an opportunity to address any concerns with a lower tier participant, for example, by terminating that relationship.
We also agree that denial of a transaction based on lower tier participant disclosures will not usually be justified absent
some “nexus” between the conduct covered by the unfavorable disclosure and the primary tier transaction. In many cases, we
anticipate that the program administrator or bureau will be able to move forward with a transaction, notwithstanding the lower
tier participant's disclosures, subject to targeted remedies, such as heightened scrutiny, compliance audits, or a compliance
plan to ensure that the lower tier participant does not present a significant risk to program integrity. However, in situations
where the lower tier participant's involvement is integral to the primary tier participant's performance in the transaction,
we cannot rule out the possibility that denial of the primary tier transaction may be the appropriate remedy, along with any
action taken with respect to the lower tier participant. For example, the primary tier participant could be a reseller of
the lower tier participant's service and dependent on the lower tier participant for many or most back-office functions necessary
to provide program services. An aggrieved participant may seek reconsideration or review of any such decision through the
normal mechanisms available.

Other Matters

Application of Revised Rules To Conduct Occurring Prior to the Effective Date

We modify the NPRM's proposal regarding which rules govern misconduct that preceded the effective date of the revised rules,
but for which no debarment proceeding under the legacy rules has been initiated. Instead, we conclude that we should not categorically
prescribe whether our current rules or the rules adopted herein apply to the limited number of cases where the misconduct
occurred before the effective date of these rules.

The NPRM proposed, “in appropriate cases,” to authorize the SDO to apply the Guidelines and any supplemental rules to conduct
in Commission programs that occurred before the effective date of such rules, where expeditious suspension or debarment is
“in the public interest to prevent or deter further harm” to those programs. The NPRM also proposed that where such conduct
“has already resulted in settlements with the Commission by a party responsible for the alleged misconduct, no suspension
or debarment of that party based on such antecedent conduct would be authorized if such party has and continues to comply
with the settlement terms.”

Several commenters expressed concerns that application of revised rules to past action could be impermissibly retroactive.
For example, the Joint Association Commenters questioned whether retroactive application would have any public interest benefit,
given that past misconduct cannot be deterred and can be addressed through existing remedies. CTIA and USTelecom argued that
retroactive application of the rules “risks running afoul of” the APA, which prohibits rules that alter the past legal consequences
of past actions. WISPA also generally opposed application of any new rules to past misconduct, recommending instead that the
Commission should “consider such retroactive application of revised rules only in the event of well-documented, egregious
misconduct that poses a clear threat of immediate and lasting harm.” NCTA also noted that retroactive application of the rules
could result in arbitrary enforcement. In contrast, Mr. Meunier explained that such retroactivity concerns are less compelling
in the context of administrative rulemakings: “[I]f an act was already illegal, the government may have greater latitude in
the exercise of its discretionary, non-punitive management functions to recognize that act in administering its own duties
on behalf of the tax[-]paying public.” He further described that “it is still common practice for agencies to determine whether
and how far to retroactively apply a new or altered regulation.” And he urged that any application of revised rules to past
misconduct should be guided by the public interest: “[T]he protection to be afforded the government by retroactive application
should outweigh the perceived unfairness in the application itself.”

Based on the record and in light of the range of fact patterns that may arise in any case, we require that the SDO evaluate
on a case-by-case basis whether our new rules should be applied to past conduct. This will “leave room” for the exercise of
judgment in “hard cases.” Landgraf v. USI Film Prods., 511 U.S. 244, 270 (1994). In conducting the evaluation, we anticipate that the SDO will consider among other factors whether
there is past egregious, well-documented misconduct in these programs in assessing any pattern or prior history of wrongdoing.
Thus, we will take a flexible approach.

We observe that there are other options, such as consideration of the misconduct as part of the factors that inform whether
to exclude or enter an administrative agreement, that also permit consideration of what approach will best facilitate compliance
with the Commission's rules. We further observe that parties demonstrating cause for suspension and debarment are already
subject to other agencies imposing this measure, which is intended to be remedial and not punitive.

We also adopt our proposal that the Commission maintain its current separate listing of suspensions and debarments imposed
pursuant to our

  legacy rules. As proposed in the NPRM, we adopt a rule construing the term “excluded or exclusion” in sections 180.830 and
  180.940 of the Guidelines to include those individuals and entities currently suspended or debarred by the Commission, in
  addition to those included on the *SAM.gov* Exclusions. A program participant thus must ensure that, before entering into a covered transaction, it checks both the Commission's
  listing of suspensions and debarments and the *SAM.gov* Exclusions. Further, the SDO may review existing exclusions entered pursuant to our legacy rules to determine, in consultation
  with OGC, whether a debarment proceeding under the rules adopted herein should be initiated that may result in a referral
  to the *SAM.gov* Exclusions.

Preclusion of Excluded Persons From Serving on Commission Advisory Committees

The appointment of members to federal advisory committees is at the discretion of the Commission. The NPRM proposed that any
persons or entities that are suspended or debarred be prohibited (during their period of exclusion) from serving on the Commission's
advisory committees or comparable groups or task forces established by the Commission. Similarly, if an existing member of
such an advisory group is suspended or debarred, the NPRM proposed that such person or entity be removed from that position.
We received no comment on these proposals and now adopt them.

Implementation and Update of Revised Rules

We delegate authority to the SDO, OGC, OMD, WCB, and CGB, to develop and implement any necessary procedures to effectuate
the requirements that we adopt in this Report and Order. Such implementation may include, for example, adoption of public
notices or other public-facing documents as well as internal documents such as guidelines or templates to help support the
SDO and conduct exclusion and LDP proceedings, and updates to systems of records given additional data collections. We further
delegate authority to OGC, in consultation with OMD, to coordinate with other federal agencies to cause these rules to be
codified in the Code of Federal Regulations in light of these supplementing a governmentwide program and to update these rules
to remain current, including through notice-and-comment rulemaking where appropriate. We further delegate authority to OGC
and OMD to update the rules we adopt today, including through notice and comment under the APA, where appropriate.

Recent Revisions to OMB Guidelines

Good Cause to Forgo Notice and Comment. Under the APA, when an agency for good cause finds that notice and public comment “are impracticable, unnecessary, or contrary
to the public interest,” it need not follow notice and comment procedures before modifying or repealing rules. Prior notice
and comment are “unnecessary” under the APA when “ `the administrative rule is a routine determination, insignificant in nature
and impact, and inconsequential to the industry and to the public.' ”

OMB revised its Guidelines in 2024, during the pendency of the Commission's rulemaking, to adopt “clarifying changes,” primarily
at the recommendation of the ISDC. (89 FR 30055). In pertinent part, OMB amended § 180.705 to include “other indicators of
adequate evidence that may include, but are not limited to, warrants and their accompanying affidavits” that officials may
consider before initiating a suspension. Other revisions included edits to § 180.630 to note that a “corporation” or “company”
are examples of organizations for purposes of determining whether conduct was imputed from one organization to another, and
edits to § 180.730 to clarify that a person contesting a suspension must “identify any of the paragraphs in 180.730(a)” that
do not apply to the person contesting the suspension. Our NPRM, issued in 2019, proposed to adopt rules consistent with the
Guidelines by reference to the then-codified Guidelines. For convenience, the current language of these provisions as compared
to the language that existed at the time the NPRM was adopted are reproduced in Appendix D of the Report and Order, available at https://docs.fcc.gov/public/attachments/FCC-26-18A1.pdf.

Applying the “good cause” standard discussed above, however, we conclude that prior notice and comment are unnecessary for
us to adopt the 2024 OMB clarifying changes today because the changes were minor and were adopted after careful consideration
of the record in OMB's rulemaking proceeding. Out of an abundance of caution, however, we choose to provide an opportunity
to object to these changes consistent with the direct final rule process.

We follow the processes previously outlined by the Commission, which we briefly summarize here. At times when the Commission
has found prior notice and comment unnecessary before modifying or repealing rules, it simply adopted the relevant rule change
without any additional process. Although we reserve the right to proceed in that manner, we elect in this rulemaking to proceed
using what is known as a “direct final rule” process. (We note that the Commission's Direct Final Rule Process (described
herein), including this Direct Final Rule, is distinguishable from the Direct Final Rule process described in the Office of
the Federal Register's Document Drafting Handbook (see Chapter 3.19: Direct Final Rule; DDH, August 2018 Edition (Rev.2.2),
dated June 2025; https://www.archives.gov/federal-register/write/ddh).)

By proceeding through a direct final rule, the Commission chooses to provide expanded opportunities for public comment when
it is not legally required to do so under the “good cause” standard. Under a direct final rule process, rule changes are adopted
without prior notice and comment, but accompanied by an opportunity for the public to file comments—and if we conclude that
significant adverse comments have been filed, the relevant rule changes would not take effect until after a full notice and
comment process.

Comment Process. In particular, this item incorporating as rules the current OMB Guidelines allows for comment from interested parties within
30 days of publication regarding the 2024 OMB changes described in above. Until 60 days after publication, this shall be a
“permit-but-disclose” proceeding for purposes of our ex parte rules. Because this comment process is directed toward a discrete
objective, and to avoid unwarranted delay in that process, we prohibit filings addressing the rule changes contemplated more
than 60 days after publication, absent further direction from the Commission published in the
Federal Register
. This process both accords with the purpose of the comment process, and is similar (though not identical) to actions the
Commission has taken in other contexts to provide a defined end-point for public filings to enable the Commission to focus
its attention on the submissions already before it.

The three amendments described above will become effective unless the Commission receives significant adverse comments within
30 days after publication. To the extent that the Commission receives comments on these rules, we delegate authority to OGC
to evaluate whether they are significant adverse comments that warrant further procedures before modifying the rules. We intend
for this

  assessment to be guided by ACUS's recommendation that “[a]n agency should consider any comment received during direct final
  rulemaking to be a significant adverse comment if the comment explains why: a. The [direct final] rule would be inappropriate,
  including challenges to the rule's underlying premise or approach; or b. The [direct final] rule would be ineffective or unacceptable
  without a change.”

In the event that OGC concludes that significant adverse comments have been filed, OGC will publish a timely notice in the

  Federal Register
  announcing any appropriate additional procedures that must be followed. If significant adverse comments are filed only with
  respect to a subset of amendments, OGC will publish a timely notice as to the amendments that were subject to significant
  adverse comments. In that case, we direct OGC to adopt the versions of any such rules as they were in effect at the time of
  the NPRM. Where comments are filed, but none of the comments are significant adverse comments, where warranted by the record
  OGC will issue a public notice that will briefly explain why any comments filed were not determined to be significant adverse
  comments.

Final Regulatory Flexibility Analysis

As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Federal Communications Commission (Commission)
incorporated an Initial Regulatory Flexibility Analysis (IRFA) in the Modernizing Suspension and Debarment Rules Notice of
Proposed Rulemaking (NPRM), released in November 2019. The Commission sought written public comment on the proposals in the
NPRM, including comment on the IFRA. The comments received are addressed below. This Final Regulatory Flexibility Analysis
(FRFA) conforms to the RFA.

Need for, and Objectives of, the Rules

As discussed in the regulatory preamble, the Commission oversees a number of government-funded critical support programs that
provide assistance to low-income individuals, individuals with disabilities, schools and libraries, and individuals in rural,
underserved, and unserved areas, and that help bridge the digital divide for these groups and other Americans, such as the
Universal Service Fund (USF) programs, the Telecommunications Relay Service (TRS) program, and the National Deaf-Blind Equipment
Distribution Program (NDBEDP). The Commission has also previously administered the Affordable Connectivity Program (ACP) and
ACP Outreach Programs, which ended on June 1, 2024, due to exhaustion of appropriated funds. As part of its oversight role,
the Commission seeks to protect these programs from waste, fraud, and abuse to ensure that government funds are efficiently
used for their intended purposes. The Commission's rules only allow it to suspend and debar those against whom there had been
a conviction or civil judgment arising from or related to USF programs.

The rules the Commission adopts in the Report and Order expand the Commission's arsenal of tools to root out bad actors by
implementing the Office of Management and Budget Guidelines on Government Debarment and Suspension (Nonprocurement) (Guidelines),
with modifications through FCC-specific supplemental rules to allow the Commission to carry out its statutory obligations
to ensure that the support provided by the applicable FCC programs reach the intended beneficiaries. The Order applies the
new suspension and debarment framework and supplemental rules to transactions for the four USF programs, the TRS program,
and the NDBEDP, the Commission's primary permanent nonprocurement programs, as well as to other programs (collectively Covered
Programs). Other Commission nonprocurement programs are exempt from these rules. Under the new suspension and debarment framework
and FCC-supplemental rules, the Commission will evaluate the wrongful or fraudulent conduct of companies or individuals in
other dealings with the government and take remedial action before the issuance of a judgment or conviction.

Summary of Significant Issues Raised by Public Comments in Response to the IRFA

Comments regarding the impact of the rule on small entities were filed by The Joint Association Commenters, SHLB-SECA, E-mpa,
Funds For Learning, E-Rate Central, NCTA, and CTIA and US Telecom. We summarize the comments here and respond to them below.

In the NPRM, the Commission proposed that when schools and libraries act through consortia, suspension and debarment proceedings
will be directed towards the specific entities or persons responsible for bad conduct, rather than all consortium members.
Comments from E-Rate Central supports giving schools and libraries serviced by a single E-Rate provider similar treatment.
Funds for Learning opposes the proposal to reject the application of a primary tier participant that does business with a
lower tier participant, such as an E-Rate consultant, who is convicted of fraud in another program.

NCTA, CTIA, and USTelecom contend that the Commission's proposal to extend the enhanced disclosure obligations to lower tier
participants is not necessary to protect the public interest and would impose burdensome investigation obligations on primary
tier participants. These commenters urge the Commission, in the event that it adopts these disclosures, to allow a safe harbor
for companies acting in good faith.

CTIA and USTelecom raise concern about the applicable contract valuation threshold that would trigger a lower tier participant's
obligations and urge the Commission to raise the applicable contract valuation threshold from $25,000 to at least $100,000
to account for the capital-intensive nature of communications networks and inflation.

Joint Association, SHLB-SECA, E-mpa, Funds for Learning, and E-Rate Central contend that the USF administrator, Universal
Service Administrative Company (USAC), has imposed de facto suspensions by slowed and/or delayed administrative processing,
failure to act, and withholding USF funding. These commenters also express concern specifically with the impact of these de
facto suspensions on small to medium sized service providers and ask the Commission to address this issue in the context of
this rulemaking.

Response to Comments by the Chief Counsel for the Small Business Administration Office of Advocacy

Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments
filed by the Chief Counsel for the Small Business Administration (SBA) Office of Advocacy, and also provide a detailed statement
of any change made to the proposed rules as a result of those comments. The Chief Counsel did not file any comments in response
to the proposed rules in this proceeding.

Description and Estimate of the Number of Small Entities to Which the Rules Will Apply

The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that
may be affected by the adopted rules. The RFA generally defines the term “small entity” as having the same meaning as the
terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition,

  the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small
  business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and
  (3) satisfies any additional criteria established by the SBA. The SBA establishes small business size standards that agencies
  are required to use when promulgating regulations relating to small businesses; agencies may establish alternative size standards
  for use in such programs, but must consult and obtain approval from SBA before doing so.

Our actions, over time, may affect small entities that are not easily categorized at present. We therefore describe three
broad groups of small entities that could be directly affected by our actions. In general, a small business is an independent
business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United
States, which translates to 34.75 million businesses. Next, “small organizations” are not-for-profit enterprises that are
independently owned and operated and are not dominant in their field. While we do not have data regarding the number of non-profits
that meet that criteria, over 99 percent of nonprofits have fewer than 500 employees. Finally, “small governmental jurisdictions”
are defined as cities, counties, towns, townships, villages, school districts, or special districts with populations of less
than fifty thousand. Based on the 2022 U.S. Census of Governments data, we estimate that at least 48,724 out of 90,835 local
government jurisdictions have a population of less than 50,000.

The rules adopted in the Report and Order will apply to small entities in the industries identified in the chart below by
their six-digit North American Industry Classification System (NAICS) codes and corresponding SBA size standard. Based on
currently available U.S. Census data regarding the estimated number of small firms in each identified industry, we conclude
that the adopted rules will impact a substantial number of small entities. Where available, we also provide additional information
regarding the number of potentially affected entities in the identified industries below.

| Regulated industry
(footnotes specify potentially affected entities within aregulated industry where applicable) | NAICS code | SBA size standard | Total firms | Total small firms | % Small firms |
| --- | --- | --- | --- | --- | --- |
| Telephone Apparatus Manufacturing | 334210 | 1,250 employees | 155 | 136 | 87.74 |
| Radio and Television Broadcasting and Wireless Communications Equip Manufacturing | 334220 | 1,250 employees | 155 | 136 | 87.74 |
| Other Communications Equipment Manufacturing | 334290 | 800 employees | 310 | 294 | 94.84 |
| Software Publishers | 513210 | $47 million | 16,824 | 12,148 | 72.21 |
| Wired Telecommunications Carriers | 517111 | 1,500 employees | 3,403 | 3,027 | 88.95 |
| Wireless Telecommunications Carriers (except Satellite) | 517112 | 1,500 employees | 1,184 | 1,081 | 91.30 |
| Telecommunications Resellers | 517121 | 1,500 employees | 955 | 847 | 88.69 |
| Satellite Telecommunications | 517410 | $44 million | 332 | 195 | 58.73 |
| All Other Telecommunications | 517810 | $40 million | 1,673 | 1,007 | 60.19 |
| Libraries and Archives | 519210 | $21 million | 2,030 | 1,891 | 93.15 |
| Custom Computer Programming Services | 541511 | $34 million | 63,144 | 46,196 | 73.16 |
| Information Technology Value Added Resellers (Exception) | 541519 | 150 employees | 11,570 | 8,182 | 70.72 |
| Other Computer Related Services (Except Information Technology Value Added Resellers) | 541519 | $34 million | 11,570 | 8,152 | 70.46 |
| Administrative Management and General Management Consulting Services | 541611 | $24.5 million | 10,1761 | 69,836 | 68.63 |
| Marketing Consulting Services | 541613 | $19 million | 50,507 | 34,127 | 67.57 |
| Other Management Consulting Services | 541618 | $19 million | 10,446 | 6,383 | 61.10 |
| Schools | 611110 | $20 million | 14,088 | 14,087 | 99.99 |
| Offices of Physicians Except Mental Health Specialists | 621111 | $16 million | 138,120 | 104,486 | 75.65 |
| Offices of Physicians—Mental Health Specialists | 621112 | $13.5 million | 11,973 | 8,376 | 69.96 |
| Offices of Dentists | 621210 | $9 million | 121,011 | 105,588 | 87.25 |
| Offices of Chiropractors | 621310 | $9 million | 38,673 | 30,425 | 78.67 |
| Offices of Optometrists | 621320 | $9 million | 18,582 | 16,425 | 88.39 |
| Offices of Mental Health Practitioners Except Physicians | 621330 | $9 million | 39,395 | 30,210 | 76.68 |
| Offices of Physical Occupational & Speech Therapists & Audiologists | 621340 | $12.5 million | 31,682 | 25,139 | 79.35 |
| Offices of Podiatrists | 621391 | $9 million | 6,546 | 5,737 | 87.64 |
| Offices of All Other Miscellaneous Health Practitioners | 621399 | $10 million | 29,775 | 18,206 | 61.15 |
| Family Planning Centers | 621410 | $19 million | 1,671 | 1,238 | 74.09 |
| Outpatient Mental Health and Substance Abuse Centers | 621420 | $19 million | 9,647 | 6,837 | 70.87 |
| HMO Medical Centers | 621491 | $44.5 million | 56 | 25 | 44.64 |
| Kidney Dialysis Centers | 621492 | $47 million | 516 | 367 | 71.12 |
| Freestanding Ambulatory Surgical and Emergency Centers | 621493 | $19 million | 6,092 | 4,544 | 74.59 |
| All Other Outpatient Care Centers | 621498 | $25.5 million | 8,942 | 7,160 | 80.07 |
| Medical Laboratories | 621511 | $41.5 million | 4,527 | 3,525 | 77.87 |
| Diagnostic Imaging Centers | 621512 | $19 million | 4,717 | 3,537 | 74.98 |
| Home Health Care Services | 621610 | $19 million | 27,774 | 20,724 | 74.62 |
| Ambulance Services | 621910 | $22.5 million | 3,002 | 2,436 | 81.15 |
| Blood and Organ Banks | 621991 | $40 million | 371 | 258 | 69.54 |
| All Other Miscellaneous Ambulatory Health Care Services | 621999 | $20.5 million | 7,270 | 5,794 | 79.70 |
| General Medical and Surgical Hospitals | 622110 | $47 million | 2,280 | 501 | 21.97 |
| Psychiatric and Substance Abuse Hospitals | 622210 | $47 million | 403 | 134 | 33.25 |
| Specialty Hospitals—Except Psychiatric and Substance Abuse | 622310 | $47 million | 280 | 92 | 32.86 |
| Emergency and Other Relief Services | 624230 | $41.5 million | 714 | 514 | 71.99 |

| 2024 Universal service monitoring report telecommunications service provider data
(data as of December 2023) | SBA size standard
(1,500 employees) | | |
| --- | --- | | |
| Affected entity | Total number
FCC form 499A filers | Small firms | % Small
entities |
| Incumbent Local Exchange Carriers (Incumbent LECs) | 1,175 | 917 | 78.04 |
| Interexchange Carriers (IXCs) | 113 | 95 | 84.07 |
| Local Resellers | 222 | 217 | 97.75 |
| Operator Service Providers (OSPs) | 22 | 22 | 100 |
| Paging & Messaging | 59 | 59 | 100.00 |
| Toll Resellers | 411 | 398 | 96.84 |
| Telecommunications Resellers | 633 | 615 | 97.16 |
| Wired Telecommunications Carriers | 4,682 | 4,276 | 91.33 |
| Wireless Telecommunications Carriers (except Satellite) | 585 | 498 | 85.13 |
| Wireless Telephony | 326 | 247 | 75.77 |

| Affected entity | Number receiving
E-Rate funding commitments |
| --- | --- |
| Schools | 101,522 |
| Libraries | 11,671 |

Description of Economic Impact and Projected Reporting, Recordkeeping and Other Compliance Requirements for Small Entities

The RFA directs agencies to describe the economic impact of adopted rules on small entities, as well as projected reporting,
recordkeeping and other compliance requirements, including an estimate of the classes of small entities which will be subject
to the requirement and the type of professional skills necessary for preparation of the report or record.

The Report and Order adopts new rules consistent with the OMB Guidelines in 2 CFR part 180 and supplemental FCC-specific rules
to provide the Commission with additional tools to prevent and respond to fraud, waste, and abuse of certain nonprocurement
programs that it administers. Specifically, the Commission adopts the new suspension and debarment rules for transactions
involving the Covered Programs. Pursuant to the new rules, small and other entities participating in these programs will have
new reporting, recordkeeping, and other compliance obligations. While, on the basis of the record developed in response to
the NPRM and given the amount of variation in terms of the level of participation in FCC programs, the Commission cannot quantify
the cost of compliance or determine whether small entities will have to hire professionals to comply with the Report and Order,
we have adopted the OMB Guidelines (with some modification). These establish the framework for a governmentwide suspension
and debarment system for federal assistance, loans, benefits, and other nonprocurement activities, and therefore small entities
should largely be able to employ the compliance mechanisms they already have in place to the extent they participate in other
government programs. Similar to the OMB Guidelines, the rules the Commission adopts in the Report and Order are designed to
protect the integrity of federal programs and the public interest at large by ensuring that the Commission only does business
with responsible persons.

The applicability of the rules adopted in the Report and Order to small entities depends on whether the entity is classified
as a primary tier or a lower tier participant in a transaction under the covered Commission program. The Report and Order
imposes certain new obligations on primary tier participants, including: (1) requirements that program participants confirm
that those with whom they do business are not already excluded or disqualified from government activities (which can be accomplished
by checking the governmentwide System for Award Management Exclusions (SAM.gov Exclusions) and the Commission's list of previously suspended or debarred entities), by a certification, or by addition of
terms to the applicable transaction and (2) communicating requirements to lower tier participants by collecting certifications
or including a transaction term or condition requiring compliance with subpart C of the Guidelines.

Further, in accordance with the OMB Guidelines, small and other entities are required to make advance disclosures prior to
entering into covered transactions with Federal agencies and participants in Federal programs. Mandatory disclosures for all
participants include: (1) notification to the Commission and its program agents of whether any of the participants' principals
have been either convicted, indicted, or civilly charged by any government entity for certain offenses during the past three
years, (2) notification of whether the participants are excluded or disqualified from participating in covered transactions,
and (3) notification to the Commission if an entity is excluded by another agency.

Additional mandatory disclosures for lower tier participants include: (1) notifying the higher tier participant with whom
it is doing business the information described in 2 CFR 180.335; (2) notifying the higher tier participant of the same if
participating in competitive bidding to provide services to a higher tier participant at the time of the bid; (3) notifying
the USF, TRS, NDBEDP, and ACP Administrators of the same if participating in transactions related to those programs; (4) notifying
the FCC of the same; and (5) notifying the USF, TRS, NDBEDP, and ACP Administrators, the FCC, and the higher tier participant
if the lower tier participant learns of new information required under 2 CFR 180.335. The Commission also adopts other program
specific disclosure requirements that we discuss below that are applicable to small entities and other participants in covered
Commission programs.

Lifeline and ACP. Eligible telecommunications carriers (ETCs) who are primary tier participants and their lower tier participants participating
in the Lifeline program are required to file annual disclosure statements, under penalty of perjury, reporting all required
disclosures or certifying that they have no reportable disclosures to make. Primary participants can file on behalf of lower
tier participants with which they have a direct relationship and are required to maintain documents

  substantiating their required certification for the three full years preceding. They must provide the Commission or USAC this
  documentation upon request. In light of the similarities between, and the overlap of participants in the Lifeline program
  and the ACP, primary and lower tier participants in the ACP have the same disclosure requirements as primary and lower tier
  participants in the Lifeline program except that, for consistency with the Commission's ACP rules, ACP primary tier participants
  must maintain documentation that substantiates their required certification for the six full preceding calendar years and
  provide such documentation to the Commission or USAC upon request.

The new certification requirements for small and other Lifeline or former ACP providers require service providers to certify
that they have implemented processes applicable to (1) their own employees, and (2) any employees (or independent contractors)
working for their Lifeline or former ACP marketing organizations, or their other contractors or subcontractors, that require
any such organization, as part of the onboarding process, obtain from their own employees (or from individuals they may hire
as independent contractors) disclosures of whether these employees (or individuals hired as independent contractors) are suspended
or debarred from participation in a federal program or have been required to resign from such employment due to malfeasance
within the past three years. The certification should also confirm that (1) impacted companies will not hire individuals disclosing
that they are suspended or debarred or who have disclosed such resignations or terminations, and (2) consistent with the rules
adopted in the Report and Order, neither the service providers nor their contractors or subcontractors shall enter into business
relationships with companies or individuals that are suspended or debarred, individuals that have disclosed such an exclusion,
or disclosed any resignation or employment termination within the past three years caused by malfeasance.

USF Competitive Bidding Short Forms. At the short-form application stage of the USF auction process, applicants are only required to disclose whether the applicant
or any of its principals are presently excluded or disqualified from any Federal government programs. Only applicants that
become winning bidders and proceed to the long-form stage of the auction process will be required to provide all disclosures
mandated by the OMB Guidelines adopted in the Report and Order.

TRS and NDBEDP. An entity seeking certification as a TRS provider or NDBEDP provider must file the required disclosures as part of its application
for certification and renewal thereof. Additionally, internet-based TRS providers must update their disclosures within 60
days of any change by filing a Notice of Substantive Change with the TRS Fund Administrator and the Commission. Disclosure
obligations for NDBEDP providers require each certified NDBEDP provider to file updates to their disclosures with their required
six-month program reports and to file a change in its disclosure as a notification of substantive change, if the disclosure
bears directly on the provider's ability to meet the qualification necessary for certification as a NDBEDP provider.

For all of the covered programs discussed in the Report and Order, any person suspended or debarred by a Commission order
is excluded from participation in any Commission program (not just the program in which the bad actions occurred) and will
be placed on the governmentwide System for Award Management Exclusions list, triggering reciprocity barring that person from
participating in other government programs (including procurement transactions) unless the person was granted an exemption
by another agency.

Discussion of Steps Taken To Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered

The RFA requires an agency to provide, “a description of the steps the agency has taken to minimize the significant economic
impact on small entities . . . including a statement of the factual, policy, and legal reasons for selecting the alternative
adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which
affect the impact on small entities was rejected.”

The record comments indicate overwhelming support of the FCC's efforts to adopt updated, more flexible suspension and debarment
procedures based on the OMB Guidelines, and we address here requests that the Commission modify or tailor its proposals to
small entities as follows.

As noted above, in the NPRM, the Commission proposed that when schools and libraries act through consortia, suspension and
debarment proceedings will be directed towards the specific entities or persons responsible for bad conduct, rather than all
consortium members. Comments from E-Rate Central support giving schools and libraries serviced by a single E-Rate provider
similar treatment. Funds for Learning opposes the proposal to reject the application of a primary tier participant that does
business with a lower tier participant, such as an E-Rate consultant, who is convicted of fraud in another program.

The Report and Order does not apply the approach the Commission adopted for consortia to schools and libraries serviced by
a single E-Rate consultant because the OMB Guidelines provide an appropriate level of flexibility to prevent penalizing schools
and libraries for the conduct of an E-Rate consultant. The OMB Guidelines already allow for a case-by-case review in the event
that an entity serviced by a lower tier participant is excluded. Suspension and Debarment Officials (SDOs) are required to
determine an individual respondent's responsibility and consider the facts and circumstances of each case as well as the respondent's
arguments. The exception to an exclusion mechanism allowed by the OMB Guidelines also provides sufficient flexibility to limit
the impact a lower tier participant's misconduct with one school or library may have on existing transactions with a separate
school or library. The FCC supplemental rules for continuations and transitions also provide appropriate mechanisms for limiting
the impact on covered transactions while protecting the Commission against ongoing fraud, waste, and abuse by bad actors.
Any broader form of relief would undermine the purpose of the OMB Guidelines and the Commission's supplemental rules. Finally,
unfavorable disclosures by lower tier participants are unlikely to be outcome determinative, except in instances where the
factual circumstances require exclusion to protect the Commission's programs.

Funds for Learning's comments support allowing USF participants, particularly schools and libraries, to continue receiving
services from excluded entities for either the remainder of the USF-supported contract, or until a different provider could
be substituted. Under the FCC supplemental rules, a program participant is permitted to continue with an excluded entity in
transactions that were in existence at the time the agency excluded the entity until a substitute provider is found. In the
event a substitute provider cannot be promptly identified, an exception to this rule may be required to allow for limited
continuation with the excluded provider for a reasonable transition

  period. The Report and Order delegates authority to the SDO to review the need for exceptions on a case-by-case basis by evaluating
  factors such as the availability of an alternate provider and the Commission's goals of preventing waste, fraud, and abuse.

As also noted above, NCTA and CTIA and USTelecom contend that the Commission's proposal to extend the enhanced disclosure
obligations to lower tier participants is not necessary to protect the public interest and would impose burdensome investigation
obligations on primary tier participants. These commenters urge the Commission, in the event that it adopts these disclosures,
to allow a safe harbor for companies acting in good faith.

The Commission disagrees and adopts the original proposal, extending the primary tier disclosure requirements to lower tier
participants. Requiring these participants to adhere to more expansive disclosure requirements is essential to preventing
the waste, fraud, and abuse of the Commission's programs. These disclosures will allow the Commission to better scrutinize
transactions and apply heightened safeguards where necessary while also avoiding transactions that undermine the integrity
of the Commission's programs entirely. Additionally, under the OMB Guidelines and supplemental FCC rules we adopt, the Commission
has flexibility to evaluate the actions of a lower tier participant along with mitigating factors. This flexibility allows
the SDO to tailor (and potentially limit) the degree of impact a lower tier participant's behavior may have on a primary tier
participant. This same flexibility is why the Report and Order declines to adopt a safe harbor for good faith compliance.
A safe harbor would be inconsistent with the flexible approach and invite litigation concerning whether a certain safe harbor
should, or should not have, been triggered.

In addition, in response to CTIA and USTelecom's concern about the applicable contract valuation threshold that would trigger
a lower tier participant's obligation, the Commission declines to adopt the request that it raise the applicable contract
valuation threshold from $25,000 to at least $100,000 to account for the capital-intensive nature of communications networks
and inflation. The Report and Order maintains the $25,000 threshold which the OMB Guidelines include in its definition of
a “covered transaction.” A higher threshold could interfere with governmentwide reciprocity for excluded entities, and threats
against the integrity of Commission programs weigh against increasing the threshold. Although, as CTIA and USTelecom note,
other agencies tasked with regulating capital-intensive industries increased their thresholds, the Commission finds that the
breadth and diversity of outlays made through FCC covered programs, as well as the myriad threats to the integrity of these
programs, weigh against the Commission adjusting the threshold. The Commission notes that, in its experience, lower tier participants
such as marketing organizations can commit significant amounts of waste, fraud, and abuse. Further, under the OMB Guidelines
and FCC supplemental rules, the SDO may consider the actual or potential harm or impact arising from the bad behavior, which
can include the dollar-value of the affected transaction, into account as a mitigating factor.

As noted above, the Joint Association Commenters as well as others parties contend that in the absence of rules the USF administrator,
Universal Service Administrative Company (USAC), has imposed de facto suspensions by slowed and/or delayed administrative
processing, failure to act, and withholding USF funding. Commenters express concern specifically with the impact of these
de facto suspensions on small to medium sized service providers. In the Report and Order, the Commission determines that these
issues are outside of the scope of this rulemaking because the NPRM did not propose or seek comments on USAC's administration
of USF programs. The Commission also determines that this proceeding cannot serve as a vehicle to address these concerns and
comments. The Commission notes, however, that parties can raise these concerns in an appropriate open proceeding or may propose
changes to our rules through a petition for rulemaking.

Report to Congress

The Commission will send a copy of the Report and Order, including this Final Regulatory Flexibility Analysis, in a report
to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Report and Order,
including this Final Regulatory Flexibility Analysis, to the Chief Counsel for the SBA Office of Advocacy and will publish
a copy of the Report and Order, and this Final Regulatory Flexibility Analysis (or summaries thereof) in the
Federal Register
.

List of Subjects

Administrative practice and procedure, Grant programs, Reporting and recordkeeping requirements.

Communications common carriers, Health facilities, Internet, Libraries, Reporting and recordkeeping requirements, Schools,
Telecommunications, Telephone.

Communications, Communications common carriers, Communications equipment, Individuals with disabilities, Reporting and recordkeeping
requirements, Telecommunications.

Federal Communications Commission.

Marlene Dortch, Secretary.

Final Rules

For the reasons discussed in the preamble, the Federal Communications Commission amends 2 CFR chapter LX and 47 CFR parts
54 and 64 as follows:

Title 2—Federal Financial Assistance

Subtitle B—Federal Agency Regulations for Grants and Agreements

CHAPTER LX—FEDERAL COMMUNICATIONS COMMISSION

Regulatory Text 1. Delayed indefinitely, add part 6001 to chapter LX of title 2 of the Code of Federal Regulations to read as follows:

PART 6001—NONPROCUREMENT DEBARMENT AND SUSPENSION

Subpart A—General

Sec. 6001.100 Supplemental definitions. 6001.105 What does this part do? 6001.110 Does this part apply to me? 6001.115 What policies and procedures must I follow? 6001.120 What steps must I take if I am suspended or debarred by the Commission or another agency? 6001.123 How do initial and final suspension decisions differ in their effects? 6001.125 How do I receive an exception from a suspension or debarment? 6001.130 How do I seek review of a suspension or debarment? 6001.135 What is the timeframe for review of a suspension or debarment decision? 6001.140 What are exempted Commission transactions? 6001.145 If I am excluded, may I serve on a Commission advisory committee?

Subpart B—Covered Transactions

6001.200 What additional transactions are covered transactions? 6001.210 Clarification of tier participants in Commission programs. 6001.220 What transactions are lower tier covered transactions?

Subpart C—Responsibilities of Participants Regarding Transactions Doing Business With Other Persons

6001.300 What must I do before I enter into a covered transaction with another person? 6001.310 What policies govern continuations and transitions when a Federal agency excludes a person with whom I am already doing business
in a covered transaction? 6001.330 What methods must I use to pass requirements down to participants at lower tiers with whom I intend to do business? 6001.335 Additional information disclosures for primary and lower tier participants. 6001.345 Review of unfavorable disclosures by Bureaus and Administrators.

Subpart D—Responsibilities of Federal Agency Officials Regarding Transactions

6001.430 How are Suspending and Debarring Officials Appointed and Designated to Proceedings? 6001.435 What method should the Commission or participants use to implement the requirements of primary tier participants? 6001.440 Who conducts fact finding for FCC suspensions? 6001.443 Who conducts fact finding for FCC debarments? 6001.445 Who shall present evidence supporting suspensions or debarments? 6001.447 On what findings and evidence from other Commission proceedings or activities or other Federal, State, or local bodies may
the Suspending and Debarring Officials rely? 6001.450 What causes and factors should the Commission consider for suspension or debarment determinations? 6001.455 What Commission alternatives to suspension or debarment may be appropriate? 6001.460 What must I do to be reinstated after my period of debarment is over?

Subparts E Through I [Reserved]

Subpart J—Limited Denial of Participation

6001.1101 What is a limited denial of participation? 6001.1102 How does a limited denial of participation start? 6001.1103 Scope of a limited denial of participation. 6001.1105 When may a Commission official issue a limited denial of participation? 6001.1107 When does a limited denial of participation take effect? 6001.1109 How long may a limited denial of participation last? 6001.1113 How may I contest my limited denial of participation? 6001.1115 Do Federal agencies coordinate limited denial of participation actions? 6001.1117 How will a limited denial of participation affect services to current customers of an excluded service provider? 6001.1119 May the FCC impute the conduct of one person to another in a limited denial of participation? 6001.1121 What is the effect of a suspension or debarment on a limited denial of participation? 6001.1123 What is the effect of a limited denial of participation on a suspension or a debarment? 6001.1127 How is a limited denial of participation reported?

Authority:

47 U.S.C. 154, 225, 254, 620; Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 11738, 38 FR 25161, 3
CFR, 1973 Comp., p. 799; E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p.
235.

Subpart A—General

§ 6001.100 Supplemental definitions. In addition to the definitions set forth in part 180, subpart I of this title, which have been adopted pursuant to § 6001.105,
we adopt the following definitions for purposes of this part:

Administrator shall mean the USF Administrator, the TRS Fund Administrator, the NDBEDP Administrator, and the ACP Administrator, and the
ACP Outreach Grant program Administrator.

ACP means the former Affordable Connectivity Program which provided support as set forth in 47 CFR part 54, subpart R, and which
ended on June 1, 2024, due to an exhaustion of appropriated funds.

ACP Outreach Grant Program means that former program established by the Commission for which the rules are set forth in 47 CFR part 54, subpart S, and
which ended on June 1, 2024, due to an exhaustion of appropriated funds.

Commission or FCC means the Federal Communications Commission.

Covered Programs means the Universal Service Fund programs, the Telecommunications Relay Services program, the National Deaf-Blind Equipment
Distribution Program, the ACP, and the ACP Outreach Grant Program.

Cybersecurity Pilot Program means the program providing universal service support to provide cybersecurity services and equipment for eligible schools
and libraries as set forth in 47 CFR part 54, subpart T.

E-Rate program means the program providing universal service support for schools and libraries, as set forth in 47 CFR part 54, subparts
A and F.

Eligible Telecommunications Carrier means an Eligible Telecommunications Carrier as defined in 47 CFR 54.5.

Enrollment representative shall have the same meaning as set forth in the Commission programs that may be implicated in any transaction (to the extent
such definitions exist). Thus, for the Lifeline program, the definition found at 47 CFR 54.400(p) shall apply; and for ACP,
the definition found at 47 CFR 54.1800(k) shall apply.

Exclusion in §§ 180.830 and 180.940 of this title includes suspension or debarment by the Commission under the Communications Act and
the rules in effect prior to the effective date of the Commission's adoption of the Guidelines in addition to those that are
listed under SAM.gov Exclusions.

Guidelines or OMB Guidelines means the OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), as set forth in part 180
of this title.

High-Cost program or High-Cost programs means the USF program or USF programs providing universal service support for rural, insular, and high cost areas, as set
forth in 47 CFR part 54, subparts A, B, C, D, J, K, L, M, and O, including Frozen High Cost Support, High Cost Loop Support
(HCLS), the Rural Digital Opportunity Fund, the Connect America Fund (CAF) Phase II Model and the CAF Phase II Auction support,
the 5-G Fund, the Alaska Plan Support, the Alternative-Connect America Cost Model Support, the Alternative Cost America Model
II Support, Revised Alternative Cost America Model Support, the Rural Broadband Experiments, the Bringing Puerto Rico Together
Fund, Connect USVI Fund, the CAF Intercarrier Compensation (ICC) Recovery, the CAF Broadband Loop Support (CAF BLS), the Safety
Valve Support, the CAF Fixed Support, Enhanced A-CAM Support, and the Alaska Connect Fund.

Lifeline marketing organization or ACP marketing organization means a person that:

(1) Has a contractual relationship with the person providing the Lifeline or ACP services to consumers for the purpose of
securing Lifeline or ACP enrollments; or

(2) Has any contract to provide for such Lifeline or ACP enrollment services.

Lifeline program means the program providing universal service support for low-income consumers set forth in 47 CFR part 54, subparts A, B,
C and E.

NDBEDP means the National Deaf-Blind Equipment Distribution Program, under which payments from the TRS Fund are made to support programs
distributing communications equipment to low-income individuals who are deafblind, as set forth in 47 CFR part 64, subpart
GG.

NDBEDP Administrator means the Commission official designated by the

  Consumer and Governmental Affairs Bureau as the administrator of the NDBEDP pursuant to 47 CFR 64.6205.

Principal means, in addition to those individuals described in § 180.995 of this title:

(1) Consultants that have a business relationship with any participant in connection with a covered transaction and Lifeline
or ACP marketing organizations; or

(2) Any other person (as defined in § 180.985 of this title) having a critical influence on, or substantive control over,
a covered transaction.

(3) An individual's status as a principal does not depend on whether he or she is employed by the participant or paid with
federal funds.

Rural Health Care program or RHC program means the program providing universal service support for health care providers set forth in 47 CFR part 54, subparts A and
G.

SAM.gov Exclusions means the System for Award Management Exclusions, which is a widely available source of the most current information about
persons who are excluded or disqualified from covered transactions, as further described in part 180, subpart E of this title.

Suspension and Debarment Official or SDO means an official authorized by the Commission to conduct suspension and debarment proceedings.

Termination . . . for cause or default shall not include a denial of a funding request by the NDBEDP Administrator, TRS Fund Administrator, USF Administrator, or
ACP Outreach Grant program Administrator. See also § 6001.335(e)(1).

TRS program means all forms of TRS set forth in 47 CFR part 64, subpart F.

TRS Fund Administrator means the person selected as the administrator of the Telecommunications Relay Services Fund pursuant to 47 CFR 64.604(c)(5)(iii).

USF Administrator means the administrator of the universal service mechanisms appointed pursuant to 47 CFR 54.701.

USF Programs means the programs implementing the Universal Service Fund pursuant to section 254 of the Communications Act of 1934, as amended,
47 U.S.C. 254.

§ 6001.105 What does this part do? (a) In this part, the Federal Communications Commission adopts the Guidelines in part 180, subparts A through I of this title,
as supplemented by this part, as Commission policies, procedures, and requirements for nonprocurement debarment and suspension.
All persons affected by this part should consult the Guidelines in part 180, subparts A through I of this title in order to
be informed of all the provisions of the suspension and debarment rules (as supplemented by this part).

(b) Nothing in this part forecloses the Commission from utilizing such other administrative remedies that may be available
to the Commission relating to the conduct underlying any exclusion proceeding, including forfeiture actions, debt collection
procedures, or other remedies permitted by statute or by Commission rules in this part.

§ 6001.110 Does this part apply to me? This part and, through this part, pertinent portions of part 180, subparts A through I of this title (see table at § 180.100(b)
of this title), apply to you if you are a—

(a) “Participant” or “principal” in a “covered transaction” under part 180, subpart B of this title as supplemented by this
part;

(b) Respondent in a Commission suspension or debarment action;

(c) Commission SDO; or

(d) Commission official, or agent, authorized to enter into any type of nonprocurement transaction that is a covered transaction.

§ 6001.115 What policies and procedures must I follow? The Commission policies and procedures that you must follow are the policies and procedures specified in each applicable section
of the Guidelines in part 180, subparts A through I of this title, as that section is supplemented by this part. The transactions
that are covered transactions, for example, are specified by § 180.220 of this title, as supplemented by § 6001.220. For any
section of the Guidelines in part 180, subparts A through I of this title that has no corresponding section in this part,
Commission policies and procedures are those in the Guidelines.

§ 6001.120 What steps must I take if I am suspended or debarred by the Commission or another agency? (a) If a person excluded by action of the Commission or another agency is not already registered with the System for Award
Management, that person must register within 10 days after the person's suspension or debarment becomes effective.

(b)(1) Any person already listed in the SAM.gov Exclusions when this part takes effect shall provide notice of such exclusion to the Commission within 30 days of the effective
date of this part.

(2) Any person excluded by another agency on or after the effective date of this part shall provide notice to the Commission
within 10 days after such person has received notice of the exclusion.

(3) Notifications under this paragraph (b) shall be made by email and letter to both the Chief of the Bureau(s) responsible
for any program in which such person participates, as well as to the Administrators of any such program, to the General Counsel
of the Commission, and to the Office of the Managing Director.

(4) These requirements shall apply only to those persons described in § 180.120(a) of this title (i.e., persons who have been, are, or may reasonably be expected to be a participant or principal in a covered transaction).

(c) Persons that are subject to exclusions issued by other agencies may temporarily continue with existing covered transactions
(including services for those transactions) under FCC programs but may not enter into any new covered transactions or provide
services for such transactions unless an exception is granted. Such excluded persons will comply with such orders for transitions
or limited continuations as may be required by the SDO.

(d) When notified of an exclusion issued by another agency, and upon the request of a participant or an excluded person or
an FCC bureau or office responsible for administration of any affected programs, the SDO shall preliminarily evaluate whether
or not to grant an exception under § 180.135 of this title, after consulting with the Office of General Counsel and the bureaus
or offices responsible for administration of any affected programs. The SDO may consider such factors including, but not limited
to:

(1) When the misconduct resulting in the exclusion occurred;

(2) When the other agency issued the exclusion;

(3) How much longer the exclusion will remain in effect; and

(4) The availability of alternate providers of the services provided by the excluded person.

(e) For those exclusions issued by another agency for which the SDO preliminarily determines that no exception is warranted,
the SDO will promptly initiate informal proceedings on transitions to alternate providers or limited continuations with notice
to the excluded person. The notice shall advise that the excluded person is immediately barred from enrolling new customers
or otherwise entering into new covered transactions (or providing services for such transactions). Excluded persons shall
have 30 days to file responses to the notice, in which the

  excluded person may seek an exception from the Commission granting reciprocity by stating in writing the reasons for such
  an exception. After the proceedings are concluded, the SDO will issue a decision that rules on any exception request filed
  by the excluded person. If the exception request is not granted, the decision will also set forth the appropriate transition
  or continuation requirements applicable to the exclusion (including customer notice requirements) consistent with § 6001.310.
  The SDO will consult with the Office of General Counsel and the bureaus or offices responsible for administration of any affected
  programs before issuing these rulings. Any exceptions granted by the SDO under this paragraph (e) may be subject to appropriate
  conditions such as mandatory audits, additional reporting requirements, compliance agreements (with approval of the Office
  of General Counsel), monitoring, or any other forms of effective oversight supplemental to that already provided under FCC
  programs.

§ 6001.123 How do initial and final suspension decisions differ in their effects? (a) An initial suspension decision shall prevent the suspended party from enrolling new customers or otherwise entering into
new covered transactions. However, an initial suspension decision made before a party has had the opportunity to oppose the
suspension decision shall not trigger either

(1) Any discontinuations of service; or

(2) Any requirements that beneficiaries or program administrators (in the case of the NDBEDP or TRS programs) find alternative
service providers.

(b) Any discontinuations or substitution of provider requirements shall not be effective until after the suspension process
has run its course resulting in a final suspension decision under § 180.755 of this title or until after the time for a party
to contest the initial suspension notice under § 180.725 of this title has passed.

§ 6001.125 How do I receive an exception from a suspension or debarment? (a) The Commission delegates exclusive authority to its SDO in the first instance, as the Commission's sole designee, to grant
exceptions to exclusions. Neither the Commission, nor the Chairperson of the Commission, will rule on exceptions in the first
instance, but the Commission may consider applications for review of an SDO decision on exceptions. An exception, if granted,
permits an excluded person to participate in one or more particular covered transactions as specified by the SDO. If the SDO
grants an exception, the exception must be in writing and state the reasons for deviating from the governmentwide policy in
Executive Order 12549.

(b) A person may petition for an exception during the proceedings before the SDO in which the SDO is considering the periods
for continuations and transitions, as described in § 6001.310, or in the case of exclusions by other agencies, may petition
for an exception as provided in § 6001.120(c).

(c) An exception granted for an excluded person does not extend to the covered transactions of another agency.

(d) Any exceptions granted by the SDO under this section shall be subject to such conditions as mandatory audits, additional
reporting requirements, compliance agreements (with approval of the Office of General Counsel), monitoring, or any other forms
of effective oversight supplemental to that already provided under FCC programs as the SDO considers appropriate to ensure
that an excluded person for whom an exception is granted complies with the requirements of Commission programs.

(e) In evaluating requests for exceptions, the SDO shall evaluate the particular services provided by the excluded person
and the availability of alternate providers in the areas served, the typical terms of any contracts that may exist between
the provider and its beneficiaries, any federal or state certification requirements that may be applicable (especially for
NDBEDP or TRS), when the misconduct resulting in the exclusion occurred, and in the case of exclusions by other agencies,
when the exclusion was issued and how much longer the exclusion will remain in effect. Because exceptions are evaluated on
a case-by-case basis, the SDO has discretion to consider any other factors that may be relevant to the exception determination
and shall also balance the goal of providing continued services to beneficiaries of Commission programs and the protection
of program integrity by eliminating participation of bad actors. In evaluating exception requests, the SDO shall consult with
the bureaus or offices responsible for the program in which the excluded person has participated, as well as the Office of
General Counsel. The SDO shall issue a written ruling acting on the exception request. The proponent of an exception bears
the burden of proving, by a preponderance of the evidence, any facts asserted.

(f) An excluded person may contest an exception determination of the SDO through motions for reconsideration or an application
for review pursuant to 47 CFR 1.106 or 1.115.

(g) No exceptions shall be permitted for Lifeline or ACP marketing organizations or for enrollment representatives.

§ 6001.130 How do I seek review of a suspension or debarment? (a) Consistent with 47 CFR 1.106, any person may request reconsideration of a final suspension decision issued pursuant to
§ 180.870 of this title, a debarment decision issued pursuant to § 180.875 of this title, or an exception decision issued
pursuant to § 6001.125.

(b) Consistent with 47 CFR 1.115, any person may seek Commission review of a final suspension decision issued pursuant to
§ 180.870 of this title, a debarment decision issued pursuant to § 180.875 of this title, or an exception decision issued
pursuant to § 6001.125.

(c) Consistent with 47 CFR 1.102(b), any person may seek a stay of a final suspension decision issued pursuant to § 180.870
of this title or a final debarment decision issued pursuant to § 180.875 of this title.

§ 6001.135 What is the timeframe for review of a suspension or debarment decision? (a) The SDO must make a written decision addressing any petition for reconsideration within 45 days of receiving the petition.
The SDO may extend that period for good cause.

(b) The Commission will attempt in good faith to issue a written decision addressing any application for review of a final
suspension or debarment decision within 180 days of receiving the application.

§ 6001.140 What are exempted Commission transactions? (a) Any transactions involving the Commission that are not related to or do not arise in connection with the Covered Programs
shall be exempted transactions under this part.

(b)(1) An application to the Commission to participate in any competitive process, including an auction, that will determine
parties that subsequently may apply to be authorized to receive universal service support (also known as a short-form application)
shall also be an exempted transaction under this part. In such an application, no party suspended or debarred under this part
may certify that it is able to satisfy the regulatory requirements for receiving universal service support.

(2) Any subsequent application to the Commission to be authorized to receive universal service support (also known

  as a long-form application) based on the results of any competitive process described in paragraph (b)(1) of this section
  is not an exempted transaction under this part.

§ 6001.145 If I am excluded, may I serve on a Commission advisory committee? No. Any person that is suspended or debarred may not, during their period of exclusion, serve on a Commission advisory committee
or comparable Commission group or task force established by the Commission. If a person that is already a member of such an
advisory group is suspended or debarred after an initial appointment to a Commission advisory group, such person shall be
removed from that position. For purposes of this section, persons that are suspended or debarred shall mean both persons suspended
or debarred by the Commission as well as persons included on the SAM.gov Exclusions.

Subpart B—Covered Transactions

§ 6001.200 What additional transactions are covered transactions? For purposes of determining what is a covered transaction under § 180.200 of this title, this section applies to any transaction
at the primary tier between a person and the Commission or any agents of the Commission, including the USF Administrator,
the TRS Fund Administrator, and the NDBEDP Administrator. For purposes of § 180.200 of this title, any transactions between
two primary tier participants (as clarified by § 6001.210), other than the Commission, shall be considered to be a transaction
at a lower tier within the meaning of § 180.200(b) of this title. The hiring of enrollment representatives by marketing organization
participants also shall be considered covered transactions within the meaning of § 180.200(b) of this title.

§ 6001.210 Clarification of tier participants in Commission programs. (a) For the E-Rate program, the Cybersecurity Pilot Program, and the Rural Health Care program, the primary tier participants
shall be both the schools or libraries (or consortia) that submit applications to the USF Administrator (for the E-Rate program)
or the health care providers (including consortia) that submit applications to the USF Administrator (for the Rural Health
Care program), as well as the service providers selected by these applicants.

(b) For the High-Cost programs, the Lifeline program, the TRS program, and the ACP, the primary tier participants shall be
the service providers that request and receive support from the USF Administrator, the TRS Fund Administrator, or the ACP
Administrator, respectively. For the ACP Outreach Grant Program, the primary tier participants shall be grant recipients.

(c) For the NDBEDP, the primary tier participants shall be the certified programs that request and receive reimbursements
from the TRS Fund Administrator.

(d) The lower tier participants are those persons engaged in covered transactions as described in § 6001.220, including enrollment
representatives employed by or seeking employment with marketing organizations engaged in covered transactions involving the
Lifeline program or the ACP.

(e) Beneficiaries under the Lifeline program, the ACP, the TRS program, and the NDBEDP shall not be considered primary or
lower tier participants.

§ 6001.220 What transactions are lower tier covered transactions? In addition to the transactions covered under § 180.220 of this title, this part applies to additional lower tiers of transactions
supported by the Commission's programs involving the persons described below. This section extends the coverage of the Commission
nonprocurement suspension and debarment requirements at the lower tiers to all transactions involving contracts or subcontracts,
express or implied, and regardless of tier, awarded under or in furtherance of covered nonprocurement transactions, as permitted
under the Guidelines at § 180.220(c) of this title. The SDO has the discretion to aggregate smaller related transactions (e.g., FCC Registration Numbers, applications, or disbursements) to meet the threshold. The additional transactions described in
this section will be considered covered transactions under § 180.220 of this title and the parties described herein will be
deemed “participants” under § 180.980 of this title, at the lower tiers, consistent with § 6001.210(d).

(a) For the High-Cost program, High-Cost supported transactions involving contractors, subcontractors, suppliers, consultants,
or their agents or representatives, if:

(1) Such person has a material role relating to, or significantly affecting, claims for disbursements related to the program;

(2) Such person is considered a “principal;” or

(3) The amount of the transaction is expected to be at least $25,000.

(b) For the Lifeline program:

(1) Lifeline-supported transactions involving any participant in the Lifeline program (except for the primary tier carrier),
regardless of tier or dollar value, including but not limited to those that are reimbursed based on the number of Lifeline
subscribers enrolled; and

(2) Lifeline-supported transactions involving contractors, subcontractors, suppliers, consultants, or their agents or representatives,
and Lifeline-supported transactions involving Lifeline marketing organizations, or their agents or representatives, including
enrollment representatives, if:

(i) Such person has a material role relating to, or significantly affecting, claims for disbursements related to the program;

(ii) Such person is considered a “principal;” or

(iii) The amount of the transaction is expected to be at least $25,000.

(c) For the E-Rate program and Cybersecurity Pilot Program, E-Rate-supported transactions or Cybersecurity Pilot program-supported
transactions involving contractors, subcontractors, suppliers, consultants, or their agents or representatives if:

(1) Such person has a material role relating to, or significantly affecting, claims for disbursements related to the program;

(2) Such person is considered a “principal;” or

(3) The amount of the transaction is expected to be at least $25,000.

(d) For the RHC program, RHC-supported transactions involving contractors, subcontractors, suppliers, consultants, or their
agents or representatives if:

(1) Such person has a material role relating to, or significantly affecting, claims for disbursements related to the program;

(2) Such person is considered a “principal;” or

(3) The amount of the transaction is expected to be at least $25,000.

(e) For the TRS program and the NDBEDP, TRS- or NDBEDP-supported transactions involving contractors, subcontractors, suppliers
with whom the certified programs have a contractual relationship, consultants, or their agents or representatives, if:

(1) Such person has a material role relating to, or significantly affecting, claims for disbursements related to the program;

(2) Such person is considered a “principal;” or

(3) The amount of the transaction is expected to be at least $25,000.

(4) For the TRS program (other than TRS that is provided through state

  programs), the service providers are the certified entities that are reimbursed by the Commission and the TRS Fund Administrator
  for providing services under the covered transactions. For TRS that is provided through state TRS programs, the service providers
  are the TRS providers that are authorized by each state to provide intrastate TRS under the state program and that, accordingly,
  are compensated by the TRS Fund for the provision of interstate TRS. For the NDBEDP, the certified programs are the certified
  entities that are reimbursed by the Commission and the TRS Fund Administrator for providing services and equipment under the
  covered transactions.

(f) For the ACP program:

(1) ACP-supported transactions involving any participant in the ACP program (except for the primary tier service provider),
regardless of tier or dollar value, including but not limited to those that are reimbursed based on the number of ACP subscribers
enrolled; and

(2) ACP supported transactions involving contractors, subcontractors, suppliers, consultants, or their agents or representatives,
and any ACP-supported transactions involving ACP marketing organizations, or their agents or representatives, including enrollment
representatives, if:

(i) Such person has a material role relating to, or significantly affecting, claims for disbursements related to the program;

(ii) Such person is considered a “principal;” or

(iii) The amount of the transaction is expected to be at least $25,000.

(g) For the ACP Outreach Grant Program, transactions involving subrecipients, contractors, or subcontractors of the grant
recipient if:

(1) Such person has a material role relating to, or significantly affecting, claims for disbursements related to the program;

(2) Such person is considered a “principal;” or

(3) The amount of the transaction is expected to be at least $25,000.

Subpart C—Responsibilities of Participants Regarding Transactions Doing Business With Other Persons

§ 6001.300 What must I do before I enter into a covered transaction with another person? (a) You, as a participant, are responsible for determining whether you are entering into a covered transaction with an appropriate
person based on its disclosures. You must verify that the person with whom you intend to do business is not excluded or disqualified.
You may do so by checking the SAM.gov Exclusions, by collecting certifications from that person, or by adding a clause or condition to the contract with that person.
These requirements are applicable whether entering into a covered transaction with another person at the next lower tier (as
required by § 180.300 of this title) or with another person in the same tier.

(b) For purposes of FCC programs, persons that are “excluded or disqualified” as used in §§ 180.300 and 180.940 of this title
shall mean persons suspended or debarred by the Federal Communications Commission as well as persons included on the SAM.gov Exclusions. If you elect to verify that a person is not excluded or disqualified by checking the SAM.gov Exclusions, you must also check the Federal Communications Commission's list of previously suspended or debarred entities.

(c) In the case of an employment contract, the FCC does not require employers to check the SAM.gov Exclusions before making salary payments pursuant to that contract.

§ 6001.310 What policies govern continuations and transitions when a Federal agency excludes a person with whom I am already doing business
in a covered transaction? (a)(1) The continuation policies set forth in §§ 180.310, 180.315(a), and 180.415 of this title are not applicable to the
programs subject to this part. Instead, if you are in covered transactions with an excluded person as to whom the SDO has
issued a suspension or debarment, or for whom another agency has issued an exclusion, or have been using the services of an
excluded person as a principal under a covered transaction, you as a participant must transition to an alternate provider,
or must discontinue use of that excluded principal for covered transactions, within the period of time required by the SDO
except in those rare cases in which the SDO has permitted continuation of services for a limited period. However, even if
continuation is permitted, you are not required to continue the transactions, and you may consider termination, subject to
compliance with all applicable Commission rules. You should make a decision about whether to terminate and the type of termination
action, if any, only after a thorough review to ensure that the action is proper and appropriate.

(2) You may not renew or extend covered transactions (other than no-cost time extensions) with any excluded person unless
an exception is provided by the SDO under this part or under § 180.135 of this title.

(b)(1) Except as otherwise provided in paragraph (e) of this section, each exclusion order issued by an SDO (including those
in proceedings initiated under § 6001.120) shall establish the transition period by which parties engaged in covered transactions
with an excluded person or using the services of an excluded person as a principal must transition to an alternate provider
or principal or, in rare cases, shall provide for a continuation period of limited duration. Before making these determinations,
the SDO shall closely evaluate the particular services provided by the excluded person, the typical terms of any contracts
that may exist between the excluded person and the program beneficiaries or other third parties, any federal or state certification
requirements applicable in the Commission programs involved, and the availability of alternate persons to provide the services.
In those cases where obtaining an alternate provider may require new competitive bidding or provider certifications, the SDO
shall ensure that the transition period is sufficient to provide for that process. The SDO may also permit a limited continuation
period where an excluded person demonstrates to the SDO's satisfaction that continued service subject to such compliance measures
as the SDO may impose (including stringent administrative remedies and agency oversight) is in the public interest and will
adequately protect consumers and eliminate the likelihood of further misconduct. In evaluating transition periods, especially
for service providers for the Lifeline program, the SDO should also take into consideration any transition provisions that
the Commission has adopted specific to those programs.

(2) Exclusion orders issued by the SDO shall provide a smooth and expedited transition to alternative providers to the maximum
extent possible, including administrative agreements where appropriate. The SDO's determinations on transitions and continuations
shall balance the important goal of ensuring continuation of services to beneficiaries with the need to protect the public
from waste, fraud, and abuse in Commission programs.

(3) The SDO shall require that during any transitional period, the excluded providers continue providing services to their
beneficiaries consistent with Commission rules and with their contractual obligations.

(4) In those instances where alternate service providers cannot be identified as quickly as initially anticipated by the SDO,
the SDO may allow continuation beyond the initial transition period, but for as limited a period as feasible. For any extended
continuation periods, the SDO shall give strong consideration to providing for administrative remedies such as compliance
agreements (with approval of the Office of General Counsel), mandatory audits, additional reporting requirements, monitoring,
or any other forms of effective oversight supplemental to that already provided under FCC programs. Any compliance agreement
will require consultation with the bureau or office administering the programs involved, and also the approval of the Office
of General Counsel.

(5) The review of how exclusions apply to agency procurement transactions shall be made by the SDO, in consultation with the
affected bureaus and offices, and the Office of General Counsel, on a case by case basis.

(c)(1) After the SDO determines the length of the transition period, the SDO shall require excluded providers to provide timely
notices to affected customers of the need to transition to alternate providers. In any cases where the SDO determines that
a mandatory transition to an alternate provider is not required due to an exception, and that sufficient remedies have been
put in place to facilitate compliance by the excluded party, the beneficiaries shall be so advised and shall have the option
to continue with that provider by notifying the SDO within 30 days after notice of the suspension or debarment.

(2) Notices to affected beneficiaries shall include:

(i) A statement that the participating provider has been suspended or debarred and the date that it will be ceasing operations
(as specified by the SDO);

(ii) A statement that users should obtain service from another provider;

(iii) A listing of the names and contact information for other providers authorized to provide that service in the jurisdiction;
and

(iv) A statement that the excluded provider will continue to provide service to program participants until such time as it
must cease operations.

(v) In determining notice requirements, especially for the Lifeline program, the SDO should also consider the notice provisions
that the Commission has adopted specific to those programs.

(d) The bureaus and offices, working with the SDO, shall take appropriate steps to ensure that a suspension or debarment is
implemented in a manner consistent with existing Commission requirements. For exclusions from the NDBEDP, the Consumer and
Government Affairs Bureau should request an NDBEDP certified person that has been suspended or debarred to voluntarily relinquish
its certification within a deadline and explain that if the person does not voluntarily relinquish its certification, then
a revocation proceeding will be initiated. For TRS, if a TRS provider is suspended or debarred and is the only person offering
a particular form of TRS in a jurisdiction, an alternative provider will need to be certified by the Commission or contracted
by a state TRS program to provide those services. The Commission will expedite its certification review to the maximum extent
possible to facilitate the transition to an alternate provider, and will encourage the state authorities to act similarly.
These and similar procedures for our programs will ensure that any exclusion action is implemented consistent with applicable
Commission rules with the least disruption to program beneficiaries.

(e) The SDO shall require that marketing organizations, enrollment representatives, or consultants who have been suspended
or debarred shall immediately cease their operations related to covered transactions. No exceptions or transitional periods
shall be permitted. Program participants shall not have the option to continue doing business with such entities or persons
during the period of their suspension or debarment.

(f) The SDO has delegated authority to serve in the first instance as the “agency official” responsible for making continuation
and transition decisions under § 180.415 of this title, and shall make those decisions consistent with the requirements and
considerations set forth in this section.

§ 6001.330 What methods must I use to pass requirements of the Guidelines and this part to participants with whom I intend to do business? Before entering into a covered transaction with another participant at the same or lower tier, you must require that participant
to:

(a) Comply with part 180, subpart C of this title, as supplemented by this part, as a condition of participation, by collecting
a certification or including a term or condition to this effect in your transaction; and

(b) Pass that same requirement to each person with whom the participant enters into a covered transaction.

§ 6001.335 Additional information disclosures for primary and lower tier participants. (a)(1) Before entering into a covered transaction, all lower tier participants shall be obligated to notify and disclose to
any other participants (regardless of tier) with whom they are doing or seek to do business the information described in § 180.335
of this title (pertaining to disclosures by primary tier participants). Disclosures shall be made under penalty of perjury,
and if no disclosures are made, the participant must certify under penalty of perjury that none are required. If the lower
tier participant is participating in competitive bidding to provide services to another participant, such information must
be disclosed at the time the bid is submitted. Except as provided in paragraph (a)(3) of this section, any disclosures under
this section must be simultaneously submitted to the USF Administrator (for transactions related to or arising in connection
with USF Programs), to the ACP Administrator or the ACP Outreach Grants Program Administrator (for transactions related to
or arising in connection with the ACP or ACP Outreach Grants Program), to the TRS Fund Administrator (for transactions relating
to the TRS program), to the NDBEDP Administrator (for transactions relating to the NDBEDP), and to the FCC (at the addresses
identified in paragraph (c) of this section). The provisions of § 180.345 of this title shall be applicable to any failures
to disclose under this section and, in addition, any such failure to disclose shall permit the participant with whom the lower
tier participant is doing business to terminate the transaction for failure to comply with this disclosure requirement, or
to pursue any other available remedies. Participants subject to this section shall also comply with § 180.350 of this title,
requiring notifications upon learning new information, and such notifications shall be provided not only to the USF Administrator,
the TRS Fund Administrator, the NDBEDP Administrator, and the FCC, but also to the higher or lower tier participant with whom
the lower tier participant is doing or seeks to do business.

(2) Primary and lower tier participants in the Lifeline program shall file annual disclosure statements, upon penalty of perjury,
reporting all required disclosures or certifying that they have no reportable disclosures to make. Primary tier participants
may also file on behalf of lower tier participants with whom they have a direct relationship.

(3) Enrollment representatives of Lifeline or ACP marketing organizations shall be required to disclose only to the marketing
organizations with whom they are employed or seek employment the information described in § 180.355 of this title (pertaining
to exclusions). Marketing organizations are required to obtain these disclosures for review by the Commission.

(4) Primary and lower tier participants in the ACP Outreach Grant Program shall file annual disclosure statements, upon penalty
of perjury, reporting all required disclosures or certifying that they have no reportable disclosures to make. To streamline
the administration of this program, however, lower tier participants need only file their expanded disclosures with the primary
tier participant for whom they are performing work or, in the case of contracts among lower tier participants, with the lower
tier participants for whom they perform work. Primary tier participants shall then file on behalf of all lower tier participants
with which they have a relationship (including the disclosures filed among lower tier participants). The documentation that
substantiates the required certifications shall be provided to the Commission upon request.

(5) For USF competitive bidding, the Commission's review at the short-form stage shall be limited to the status of the applicant— i.e., whether the applicant is presently excluded or disqualified—while a winning bidder will be required to make the additional
required disclosures upon submission of a long-form application.

(b) Before primary tier participants in the E-Rate program, the Cybersecurity Pilot Program, or the Rural Health Care program
may enter into a covered transaction with other participants in that tier, those participants who are service providers shall
make the disclosures required by § 180.335 of this title not only to the Commission and the USF Administrator, pursuant to
paragraph (c) of this section, but also to those primary tier participants who are schools, libraries, or health care providers
(or consortia of eligible schools, libraries, or health care providers) with whom such service providers intend to do business.
The provisions of § 180.345 of this title shall be applicable to any failures to disclose under this section and, in addition,
any such failure to disclose shall permit the school, library or rural health care provider with whom the service provider
is doing business, or seeks to do business, to refuse to enter a transaction or to terminate the transaction for failure to
comply with this requirement, or to pursue any other available remedies. Participants subject to this section shall also comply
with § 180.350 of this title, requiring notifications upon learning new information, and such notifications shall be provided
not only to the USF Administrator and the FCC, but also to the higher tier participant with whom the service provider is doing
business.

(c) The disclosures required by §§ 180.335 through 180.350 of this title shall be made not only to the Commission, but also
to the USF Administrator (for transactions related to or arising in connection with USF Programs), the TRS Fund Administrator
(for transactions relating to the TRS program), to the NDBEDP Administrator (for transactions relating to the NDBEDP), and
the ACP Administrator (for transactions relating to the ACP). Disclosures to the Commission regarding the USF Program, the
ACP, or the ACP Outreach Grant Program shall be submitted via email to USFDisclosures@fcc.gov or via mail to the Federal Communications Commission, Telecommunications Access Policy Division, Wireline Competition Bureau
(for USF or ACP disclosures), or to the Federal Communications Commission, Consumer and Governmental Affairs Bureau (for ACP
Outreach Grant Program disclosures) at the Commission's address specified in 47 CFR 0.401(a). Disclosures to the USF Administrator
shall be submitted via email to USFDisclosures@usac.org or via mail to Universal Service Administrative Company, 700 12th Street NW, Suite 900, Washington, DC 20005. Disclosures
to the Commission regarding the TRS program shall be submitted via email to TRSreports@fcc.gov or via mail to the Federal Communications Commission, Disability Rights Office, Consumer and Governmental Affairs Bureau,
at the Commission's address specified in 47 CFR 0.401(a). Disclosures to the TRS Fund Administrator shall be submitted via
email to the email address of the TRS Fund Administrator at such email address as is specified on the TRS website located
on the website of the Disability Rights Office of the Consumer and Governmental Affairs Bureau. Disclosures to the NDBEDP
Administrator shall be submitted via email to NDBEDP reports@fcc.gov or via mail to NDBEDP Administrator, Federal Communications Commission, Disability Rights Office, Consumer and Governmental
Affairs Bureau at the Commission's address specified in 47 CFR 0.401(a).

(d) The disclosures required to be made under this section shall also include such disclosures as the Commission may require,
in implementing these suspension and debarment rules, under any updated information collections or other disclosure obligations
that may be required for Lifeline, TRS and NDBEDP programs.

(e) For purposes of the disclosure requirements under § 180.335(d) of this title and this section as they pertain to terminations
of public transactions:

(1) A termination “for cause or default” shall not include the denial of funding requests for minor technical or procedural
errors (as determined by the SDO); but a termination of a previously approved funding request because of serious errors or
misconduct by a participant requires disclosure; and

(2) Otherwise reportable terminations that may be pending appeal must be disclosed.

§ 6001.345 Review of unfavorable disclosures by Bureaus and Administrators. (a) Each bureau or office with principal delegated authority for making policy recommendations and administering a program
to which the rules in this part apply should consider information disclosed under this part and under the Guidelines when
determining whether to enter into a covered transaction with a participant, as well as any additional information or explanation
that a participant elects to submit with the disclosed information.

(b) Each Administrator responsible for administration of a program to which the rules in this part apply should develop—and
submit for approval to the relevant bureau or office—policies and procedures governing its review of disclosures under this
part and under the Guidelines, as well as any additional information or explanation that a participant elects to submit with
the disclosed information. Such policies and procedures should be consistent with § 180.340 of this title. Before taking any
action based on such information that is not contemplated by such policies and procedures or is a new and novel situation,
the Administrator must obtain prior approval from the relevant bureau or office.

(c)(1) Unfavorable disclosures by primary or lower tier participants shall be evaluated under this section on a case by case
basis and will not automatically trigger exclusion proceedings or the denial of the transaction in which the disclosures were
made. Unfavorable disclosures should be outcome determinative only where it is determined that the factual

  circumstances require denial of a transaction or possibly an exclusion (or an LDP) to protect the integrity of Commission
  programs. The bureaus or offices and Administrators may consider the number of providers or suppliers available to provide
  services under a program (especially in rural areas) when determining how much weight to afford an unfavorable disclosure,
  as well as any of the other factors described in § 6001.310 (pertaining to transition and continuation periods).

(2) Where primary or lower tier participants have submitted unfavorable disclosures, the bureau or office that oversees the
program to which the participant's application (or participation) is pending shall have delegated authority to determine,
in the first instance, what remedies are appropriate in light of such disclosures and any other relevant circumstances, including
those described in paragraph (c)(1) of this section. Such remedies may include, but are not limited to: approving a pending
transaction (or continued participation in other transactions) only after the participant has entered into an administrative
agreement, such as a compliance plan, ensuring additional monitoring, oversight, and other appropriate conditions to ensure
program integrity; denying the application; terminating any ongoing transaction with the party or denying the party who made
such disclosures the right to continued participation in one or more transactions; and/or referring the matter to an SDO to
consider a limited denial of participation under this part. Where considered appropriate after consideration of the disclosures
and other relevant circumstances, the bureau or office involved may also refer the matter to an SDO to initiate an exclusion
proceeding. Any compliance agreement shall require the approval of the Office of General Counsel.

Subpart D—Responsibilities of Federal Agency Officials Regarding Transactions

§ 6001.430 How are the Suspension and Debarment Official appointed and designated to proceedings? (a) The SDO shall be appointed by the Commission. The Commission shall have the discretion to designate the term of each such
SDO.

(b) The Chair, a Commissioner, or head of the relevant bureau or office including the SDO shall refer matters to the SDO to
initiate suspension and debarment proceedings under the Guidelines.

§ 6001.435 What method should the Commission or participants use to implement the requirements of primary tier participants? To implement the requirements described in § 180.435 of this title, the Commission may require as a condition of participation
in any of the Covered Programs that participants:

(a) Comply with part 180, subpart C of this title, as supplemented by this part; and

(b) Communicate the requirement to comply with part 180, subpart C of this title, as supplemented by this part, to persons
at the next lower tier with whom the participant enters into covered transactions.

(c) The Commission, or the Administrators, may also obtain an assurance or certification of compliance at the time of application
for approval of the covered transaction or upon submission of an invoice for payment.

§ 6001.440 Who conducts fact finding for FCC suspensions? In all FCC suspensions, the SDO shall be responsible for conducting additional fact-finding proceedings where disputed material
facts are challenged.

§ 6001.443 Who conducts fact finding for FCC debarments? In all FCC debarments, the SDO shall be responsible for conducting additional fact-finding proceedings where disputed material
facts are challenged.

§ 6001.445 Who shall present evidence supporting suspensions or debarments? When necessary, the SDO in each proceeding shall designate a Commission unit primarily responsible for presentation of the
government's evidence and to establish coordination procedures for other bureaus or offices to participate. In cases where
the Office of the Inspector General has engaged in the sole or parallel investigation of a matter, the Office of the Inspector
General shall be given an opportunity to present the evidence supporting suspension or debarment.

§ 6001.447 On what findings and evidence from other Commission proceedings or activities or other Federal, State, or local bodies may
the Suspension and Debarment Official rely? (a)(1) An SDO may consider findings made by a program administrator in an audit report or commitment adjustment even if an
appeal is pending. The SDO may also rely on factual findings underlying a Notice of Apparent Liability (NAL), but may not
rely on the issuance of an NAL alone to support an exclusion decision. An SDO may also rely on other information obtained
from Commission proceedings that may not be expressly identified in this section. Except as otherwise provided in paragraph
(b) of this section, parties may submit evidence disputing the factual findings described in this paragraph (a).

(2) If a participant contests an exclusion, and contests certain facts in the record of the proceeding, the SDO shall render
a final decision based on the SDO's independent judgment except as otherwise provided in paragraph (b) of this section.

(b)(1) For purposes of a suspension or debarment proceeding, findings and other information contained in Commission orders
on which the Commission has relied for its conclusions shall be deemed conclusive and may be rebutted only by clear and convincing
evidence that the information or findings are no longer accurate due to the passage of time or other compelling evidence (such
as where an order has been reconsidered, modified, or vacated on judicial review).

(2) In addition, the SDO, in consultation with the Office of General Counsel, shall apply the principles of collateral estoppel
to determine whether a respondent may challenge findings set forth in Commission orders (including orders of bureaus or offices
issued on delegated authority) for which the opportunity to contest the facts was provided.

(c)(1) Notwithstanding § 180.735(a)(1) of this title, where an exclusion is based upon an indictment, conviction, civil judgment,
or other finding by a Federal, State, or local body for which an opportunity to contest the facts was provided, respondents
will have the opportunity to challenge the findings in the original Federal, State or local orders where:

(i) An order has been reconsidered or modified by the issuing body (or by its staff acting on delegated authority); or

(ii) An order has been remanded, reversed, or vacated on judicial review.

(2) In addition, the SDO, in consultation with the Office of General Counsel, shall apply the principles of collateral estoppel
to determine whether a respondent may challenge findings set forth in orders of any Federal, state, or local body for which
the opportunity to contest the facts was provided.

(d) The SDO shall consider on a case-by-case basis whether to include conduct preceding the effective date of this part in
any determination regarding suspensions or debarments.

§ 6001.450 What causes and factors should the Commission consider for suspension or debarment determinations? (a) Consistent with the causes for debarment described in the Guidelines at § 180.800 of this title (which are also applicable
to suspension determinations under § 180.700 of this title), the SDO may also may suspend or debar a person for conduct including:

(1) The willful or grossly negligent violation of a single Commission rule or applicable statutory obligation that materially
and negatively affects the participant's present responsibility;

(2) The repeated violations of Commission rules, or applicable statutory obligations, that materially and negatively affects
the participant's present responsibility regardless of whether such repeated violations are willful or grossly negligent;

(3) The substantial or habitual non-payment or under-payment of Commission regulatory fees or of required contributions to
FCC programs such as USF or TRS;

(4) The willful or grossly negligent submission of FCC forms or statements or other documentation to the FCC or to the USF
Administrator, TRS Fund Administrator, or NDBEDP Administrator that results in or could result in overpayments of federal
funds to the recipients;

(5) The willful or grossly negligent violation of a statutory or regulatory provision applicable to the Covered Programs that
results in or could result in overpayments of federal funds to the recipients;

(6) The willful, grossly negligent, or habitual failure to respond to requests made by the FCC or the Administrators for additional
information to justify payment or continued operation under their certifications; and

(7) Any noncompliance with requirements of an applicable statute or any Commission requirement that causes substantial harm,
whether willful, grossly negligent, or inadvertent.

(8) For purposes of this section and also § 180.800 of this title, the term “willful” in the ordinary case will not include
inadvertent noncompliance unless attributable to an unreasonable lapse in oversight of the person's statutory or regulatory
responsibilities.

(b) In determining whether to issue a suspension, the SDO may take into account, in the SDO's discretion, the factors set
forth in § 180.860 of this title, as well as the factors under § 180.705 of this title.

(c) Consistent with the factors described in the Guidelines at § 180.860 of this title, which shall be applicable to both
suspensions and debarments, the SDO may also consider any of the following examples as mitigating factors:

(1) Whether a person implemented a robust compliance plan (and internal controls) designed to prevent misconduct under agency
programs;

(2) Whether the person has self-reported the violations;

(3) Whether the violations resulted from inadvertent, computational, or clerical errors;

(4) Whether the violations resulted from good-faith misinterpretation of statutory or regulatory requirements;

(5) Whether the violations were discovered by a subsequent purchaser after a transfer of control has occurred and the transferee
is undertaking efforts to come into compliance;

(6) Any other remedial actions that took effect after the misconduct occurred that the party can demonstrate to the SDO will
likely prevent misconduct under agency programs going forward; or

(7) Whether any of the alleged misconduct, such as non-payment of regulatory fees, is currently being addressed in other proceedings.

(d) Where an SDO is considering suspension or debarment involving a consortia under the E-Rate program, Cybersecurity Pilot
Program, or Rural Health Care program, the SDO should evaluate which particular school, library, or rural health care consortium
member was responsible for the alleged misconduct and direct the suspension or debarment orders only to those responsible
for the bad acts, rather than to all consortium members. In making this evaluation, the SDO will necessarily consider who
served as the lead consortium member for the transaction at issue.

(e) As used in the Guidelines at § 180.800(b) of this title, the term “public agreement or transaction” shall encompass contracts
between USF Program applicants and their selected service providers and/or consultants or other principals.

§ 6001.455 What Commission alternatives to suspension or debarment may be appropriate? (a) If the SDO determines that circumstances justify an alternative to suspension or debarment, such as when a participant's
suspension or debarment could have a substantial detrimental impact on the provision of services under a Commission program,
then the SDO may elect to pursue an alternative remedy that the SDO finds appropriate. If the SDO determines that an administrative
agreement is the more appropriate course, the SDO shall consult and coordinate with the Office of General Counsel in structuring
any such administrative agreements, which will require the concurrence and approval of the Office of General Counsel before
it may be adopted by the SDO and any settling party.

(b) Administrative agreements may not:

(1) Impede or impair the Commission's authority to seek full recovery under its debt collection authority of any improper
payments made to the settling party; or

(2) Purport to resolve any claims the Government may have against the settling party, such as pending NALs issued by the Enforcement
Bureau or causes of action under the False Claims Act or other similar laws or common law.

(c) Should a party want to reach a global settlement with the Government on matters before the SDO as well as claims pending
in other forums, such a settlement would require the participation and approval of all relevant decisionmakers at the Commission,
the Department of Justice, and any other agencies or entities involved, as appropriate.

§ 6001.460 What must I do to be reinstated after my period of debarment is over? An SDO may determine that a person's conduct is so egregious that the debarred party must petition for readmission into FCC
programs, and such a requirement will be set forth in the debarment decision. In the absence of such a determination in the
debarment decision, reinstatement will be automatic once the debarment period is over. If a petition for readmission is required,
the debarred party as petitioner must demonstrate that it has taken sufficient remedial actions to avoid future program violations.
If the petitioner fails to make such a showing, the SDO may extend the debarment for an additional period under § 180.885
of this title in order to protect the public interest.

Subparts E Through I [Reserved]

Subpart J—Limited Denial of Participation

§ 6001.1101 What is a limited denial of participation? A limited denial of participation excludes a specific person from participating in a specific FCC program or programs for
a specific period of time. LDPs are available for any agency programs for which a suspension or debarment may be sought for
Covered

  Programs. For purposes of this subpart, the term “person” shall have the same meaning as set forth in § 180.985 of this title.

§ 6001.1102 How does a limited denial of participation start? (a) A SDO has the delegated authority, subject to the parameters established by the Commission by rule or by order, to impose
an LDP. The Chief of any bureau with delegated authority to administer rules for a program subject to the Commission's LDP
remedy shall refer the matter to the SDO, along with documentation for the SDO's consideration, if the Chief finds that an
LDP may be appropriate. The SDO shall promptly initiate a proceeding by providing any person subject to the proceeding with
notice that an LDP is being proposed. The notice shall state that the person has 15 days to respond. The notice shall specify
the causes for the proposed LDP, and the potential effect of the remedy, including its possible length and the FCC program(s)
and geographic areas (if relevant) affected. The notice shall explain the recipient's right to contest the LDP as provided
under § 6001.1113 by seeking a conference or providing documents in opposition, or both.

(b) Alternatively, after consultation with the relevant bureau or office with responsibility for administering the rules of
a program, an SDO may determine after reviewing the record in a suspension and debarment proceeding that a limited denial
of participation would be the more appropriate remedy. In that situation, the official shall provide written notice to the
respondent that the suspension or debarment proceeding is stayed and that a proceeding to consider imposition of a limited
denial of participation shall be initiated. The written notice shall include the information described in paragraph (a) of
this section. The record from the suspension and debarment proceeding shall be transferred to and incorporated into the proceeding
for the limited denial of participation. The SDO shall conduct the LDP proceeding consistent with the process in this subpart.

§ 6001.1103 Scope of a limited denial of participation. (a) An LDP extends at a minimum to participation in the program(s) under which the cause arose. As provided in § 6001.1105(d),
the LDP may, at the discretion of the SDO, be extended to other Commission programs. If the limited denial of participation
is based on any of the causes set forth in § 180.800(a) of this title, the filing of a criminal indictment or information
or a conviction, or evidence of fraud, then there shall be a presumption that denial shall apply to all Commission programs
subject to LDPs unless the SDO issuing the denial determines that such a broader application of the denial is inappropriate.
The SDO may impose an LDP on a nationwide or more limited geographic basis.

(b) For purposes of this subpart, participation in a program includes receipt of any benefit or financial assistance through
subsidies, grants, or contractual arrangements; benefits or assistance in the form of any loan guarantees or insurance; or
any other arrangements that benefit a participant in a covered transaction. When an SDO issues an LDP, the SDO shall also
advise the Commission's contracting officer so that such official is aware of the LDP when considering entering into procurement
contracts.

(c) The SDO may issue an administrative agreement either as a supplemental remedy or as an alternative to a limited denial
of participation. In such administrative agreements, the SDO may require measures such as compliance agreements or other remedies
that will enhance Commission oversight and facilitate the respondent's compliance with agency programs. Before approving any
administrative agreements, the SDO shall consult with the bureau or office responsible for the affected programs and with
the Office of General Counsel. Any compliance agreement shall require the approval of the Office of General Counsel.

(d) While a limited denial of participation proceeding is pending, if additional facts come to light in the record of the
proceeding that cause the SDO to consider a suspension or debarment remedy to be more appropriate, the SDO may initiate a
suspension or debarment proceeding. If the SDO initiates a suspension or debarment proceeding, the procedures set forth in
§ 6001.1121 shall apply.

§ 6001.1105 When may a Commission official issue a limited denial of participation? (a) An SDO may issue a limited denial of participation against a person, based upon the SDO finding adequate evidence of any
of the following causes:

(1) Approval of an applicant for a program subject to an LDP remedy would constitute an unsatisfactory risk;

(2) There are irregularities in a person's current and/or past performance in an FCC program subject to an LDP remedy;

(3) The person has failed to honor contractual obligations or abide by FCC regulations associated with an FCC program subject
to an LDP remedy;

(4) The person has documented deficiencies in FCC programs subject to an LDP remedy;

(5) The person has made a false certification in connection with any FCC program subject to an LDP remedy, whether or not
the certification was made directly to the FCC;

(6) The person has committed any act or omission that would be cause for debarment under § 180.800 of this title;

(7) The person has violated any law, regulation, or procedure relating to an FCC program subject to an LDP remedy; or

(8) The person has made or procured to be made any false statement for the purpose of influencing in any way an action of
the Commission.

(b) Filing of a criminal indictment or information shall constitute adequate evidence for the purpose of limited denial of
participation actions. The indictment or information need not be based on offenses against the Commission.

(c) In evaluating whether an LDP is a more appropriate remedy than a suspension or debarment, the SDO shall consider the totality
of the circumstances, including whether the misconduct was an isolated occurrence, how egregious the misconduct was, and whether
the violator self-reported or otherwise took steps to come into compliance.

(d) Imposition of an LDP related to any FCC program shall constitute adequate evidence for a concurrent limited denial of
participation for any other FCC program subject to the LDP remedy. Where the SDO imposes a concurrent limited denial of participation,
the SDO may restrict participation on the same basis without the need for an additional conference or further hearing.

(e) If a notice of proposed debarment or suspension is already pending that is based on the same transaction(s) or the same
conduct for which a notice of an LDP has been issued under § 6001.1102, the procedures set forth in § 6001.1121 shall apply.

§ 6001.1107 When does a limited denial of participation take effect? If parties choose not to contest the imposition of an LDP after receiving notice under § 6001.1102, then the remedy will be
effective as soon as the SDO issues an order imposing this remedy. Otherwise, an LDP will be effective only after conclusion
of any proceedings to contest the imposition of

  the remedy under § 6001.1113 and issuance of the SDO's order.

§ 6001.1109 How long may a limited denial of participation last? An LDP may remain in effect initially up to 12 months. This period may be extended for up to an additional six months if deemed
appropriate to ensure program compliance if review of conduct during the initial suspension period:

(a) Fails to demonstrate full compliance with the terms of the LDP or any supplemental administrative agreements; or

(b) Shows other misconduct in any Commission program subject to this remedy or additional new causes sufficient to support
extension of the LDP period.

(c) In addition, the SDO imposing the LDP may also initiate a suspension or debarment proceeding (after consultation with
applicable bureau or office) if review of conduct during the initial or extended denial period demonstrates conduct that may
warrant a suspension or debarment.

§ 6001.1113 How may I contest my limited denial of participation? (a) Within 15 days after receiving a notice of an LDP, you may request a conference with both the SDO who issued such notice
as well as a representative from the Commission unit that conducted the investigation resulting in the proposed denial. The
conference shall be held within 15 days after the Commission's receipt of the request for a conference, unless you waive this
time limit. You may also request to resolve the matter without a conference by responding within 15 days stating your opposition
to the remedy and filing documents in opposition within 30 days after receiving the notice of the proposed limited denial
of participation. The SDO who issued the notice shall preside over the proceedings and rule on the proposed remedy. If you
request a conference, you may appear with a representative and may present all relevant information and materials to the official
or designee. Within 30 days after the conference, or within 30 days after any agreed-upon extension of time for submission
of additional materials, the SDO shall, in writing, advise you of the decision to affirm, modify, or reject the proposed LDP.
At the conference, you may also seek alternative remedies such as an administrative agreement, including a compliance plan,
which the SDO would have authority to approve subject to consultation with the bureau or office involved and concurrence of
the Office of General Counsel. If an LDP is affirmed, the order affirming the exclusion shall advise you of the opportunity
to contest the SDO's determination by filing a request for reconsideration or an application for review with the Commission

(b) In ruling on the LDP, the SDO shall consider the factors listed in § 6001.1105 as well as those in § 180.860 of this title.

§ 6001.1115 Do Federal agencies coordinate limited denial of participation actions? Federal agencies do not coordinate LDP actions. As stated in § 6001.1101, an LDP is an FCC-specific action and applies only
to FCC activities.

§ 6001.1117 How will an LDP affect services to current customers of an excluded service provider? Before issuing an order imposing an LDP, the SDO shall take into account the effect of the LDP on current customers of the
excluded service provider and shall fashion any order in a manner designed to minimize service disruptions, including the
requirement that the excluded party provide such notifications to its customers as the SDO may require to ensure a smooth
transition of its customers to alternative providers. The SDO shall be guided by the same requirements and considerations
on transitions and continuations set forth in § 6001.310 (relating to suspensions and debarments).

§ 6001.1119 May the FCC impute the conduct of one person to another in a limited denial of participation? For purposes of determining an LDP, the Commission may impute conduct in the same manner as provided under § 180.630 of this
title as adopted under § 6001.105.

§ 6001.1121 What is the effect of a suspension or debarment on a limited denial of participation? If you have contested a notice of an LDP pursuant to § 6001.1113(a), and you subsequently receive, pursuant to subpart A of
this part, a notice of proposed debarment or suspension that is based on the same transaction(s) or the same conduct as the
limited denial of participation, as determined by the SDO, the following rules shall apply:

(a) During the 30-day period after you receive a notice of proposed debarment or suspension, during which you may elect to
contest the debarment under § 180.815 of this title, or the suspension pursuant to § 180.720 of this title, all proceedings
in the LDP, including discovery, are automatically stayed.

(b) If you do not contest the proposed debarment pursuant to § 180.815 of this title, or the suspension pursuant to § 180.720
of this title, the final imposition of the debarment or suspension shall also constitute a final decision with respect to
the LDP, to the extent that the debarment or suspension is based on the same transaction(s) or conduct as the LDP.

(c) If you contest the proposed debarment pursuant to § 180.815 of this title, or the suspension pursuant to § 180.720 of
this title, then those parts of the LDP and the debarment or suspension based on the same transaction(s) or conduct, as determined
by the SDO, shall be immediately consolidated and the record from the proceeding for the LDP shall be transferred to and incorporated
into the suspension and debarment proceeding.

§ 6001.1123 What is the effect of a limited denial of participation on a suspension or a debarment? The imposition of an LDP does not affect the right of the Commission to suspend or debar any person under this part or part
180 of this title.

§ 6001.1127 How is a limited denial of participation reported? When an LDP has been made final, or the period for contesting this remedy pursuant to § 6001.1113(a) has expired without receipt
of such a request, the SDO imposing the LDP shall notify the relevant bureaus and offices, the Office of General Counsel,
the Office of the Managing Director, and the relevant program Administrators of the scope of the limited denial of participation.

Title 47—Telecommunication

PART 54—UNIVERSAL SERVICE

Regulatory Text 2. The authority citation for part 54 continues to read as follows:

Authority:

47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 229, 254, 303(r), 403, 1004, 1302, 1601-1609, and 1752, unless otherwise
noted.

1. Add introductory text to § 54.8 to read as follows:

§ 54.8 Prohibition on participation; suspension and debarment.

Subject to case-by-case exceptions, this section shall apply to conduct occurring before May 11, 2026, and where otherwise
determined to be appropriate by the Commission.

---

1. Delayed indefinitely, amend § 54.320 by revising paragraph (c) to read as follows:

§ 54.320 Compliance and recordkeeping for the high-cost program.

---

(c) Eligible telecommunications carriers authorized to receive high-cost support that fail to comply with public interest
obligations or any other terms and conditions may be subject to further action, including the Commission's existing enforcement
procedures and penalties, reductions in support amounts, potential revocation of ETC designation, and suspension or debarment
pursuant to § 54.8 or 2 CFR parts 180 and 6001.

---

1. Delayed indefinitely, amend § 54.322 by revising the final sentence of paragraph (k)(2) to read as follows:

§ 54.322 Public interest obligations and performance requirements, reporting requirements, and non-compliance mechanisms for mobile

  legacy high-cost support recipients.

---

(k) * * *

(2) * * * The carrier may also be subject to further action, including the Commission's existing enforcement procedures and
penalties, potential revocation of ETC designation, and suspension or debarment pursuant to § 54.8 or 2 CFR parts 180 and
6001.

---

1. Delayed indefinitely, amend § 54.1015 by revising the final sentence of paragraph (g) to read as follows:

§ 54.1015 Public interest obligations and performance requirements for 5G Fund support recipients.

---

(g) * * * A support recipient that fails to comply with the public interest obligations or any other terms and conditions
associated with receiving 5G Fund support may be subject to action, including the Commission's existing enforcement procedures
and penalties, reductions in support amounts, revocation of eligible telecommunications carrier designation, and suspension
or debarment pursuant to § 54.8 or 2 CFR parts 180 and 6001.

1. Delayed indefinitely, amend § 54.1800 by revising paragraph (r)(4) to read as follows:

§ 54.1800 Definitions.

---

(r) * * *

(4) Has not been removed or voluntarily withdrawn from the Affordable Connectivity Program pursuant to § 54.1801(e) or 2 CFR
parts 180 and 6001.

---

1. Delayed indefinitely, amend § 54.1801 by adding paragraph (e)(5) to read as follows:

§ 54.1801 Participating providers.

---

(e) * * *

(5) Applicability. The rules regarding suspension and removal in this paragraph (e) shall apply to conduct occurring before [EFFECTIVE DATE],
and for which the SDO has granted an exception under 2 CFR 6001.120 or otherwise determined that application of 2 CFR parts
180 and 6001 would be impermissible. Conduct occurring after [EFFECTIVE DATE], will be subject to the 2 CFR parts 180 and
6001 rules on suspension, debarment, and limited denial of participation.

---

1. Delayed indefinitely, add § 54.1905 to subpart S to read as follows:

§ 54.1905 Suspension and debarment.

The ACP Outreach Grant program is subject to the rules on suspension, debarment, and limited denial of participation at 2
CFR parts 180 and 6001.

PART 64—MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

Regulatory Text 10. The authority citation for part 64 continues to read as follows:

Authority:

47 U.S.C. 151, 152, 154, 201, 202, 217, 218, 220, 222, 225, 226, 227, 227b, 228, 251(a), 251(e), 254(k), 255, 262, 276, 403(b)(2)(B),
(c), 616, 620, 716, 1401-1473, unless otherwise noted; Pub. L. 115-141, Div. P, sec. 503, 132 Stat. 348, 1091; Pub. L. 117-338,
136 Stat. 6156.

1. Delayed indefinitely, amend § 64.604 by revising paragraph (f) to read as follows:

§ 64.604 Mandatory minimum standards.

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(f) Other standards. The applicable requirements of §§ 64.611, 64.615, 64.621, 64.631, 64.632, 64.5105, 64.5107, 64.5108, 64.5109, and 64.5110,
§ 9.14 of this chapter, and 2 CFR parts 180 and 6001, are to be considered mandatory minimum standards.

1. Delayed indefinitely, amend § 64.6207 by:

a. Revising paragraph (c)(7);

b. Redesignating paragraph (c)(8) as paragraph (c)(9); and

c. Adding new paragraph (c)(8).

The revision and addition read as follows:

§ 64.6207 Certification to receive funding.

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(c) * * *

(7) Familiarity with Covered Services;

(8) A statement providing the information listed in 2 CFR 180.335; and

---

1. Delayed indefinitely, amend § 64.6215 by:

a. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d); and

b. Adding new paragraph (b).

The addition reads as follows:

§ 64.6215 Reporting requirements.

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(b) Every 12 months, for the period July 1 through June 30, a certified program shall provide a statement updating the information
listed in 2 CFR 180.335 or certify that there are no changes to the information since the most recent filing or update.

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[FR Doc. 2026-06864 Filed 4-8-26; 8:45 am] BILLING CODE 6712-01-P

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