FCC Waives Gift Rules for Rural Health Care, E-Rate Entities in COVID-19 Response

March 23, 2020

The Federal Communications Commission is easing gift rules for participants in the RHC and E-Rate programs so that broadband providers can help support these critical institutions responding to the coronavirus.

The Wireline Competition Bureau of the Federal Communications Commission (FCC) on March 18 waived certain gift rules to allow broadband providers to give enhanced services and equipment to healthcare institutions receiving Rural Health Care (RHC) funds that are involved in the coronavirus (COVID-19) response, and to E-Rate participants that are helping their students, teachers, and patrons with closures as a result of COVID-19. Recipients of E-Rate or RHC funds are generally prohibited from seeking or accepting anything of value from providers participating in the programs.

The FCC has eased these rules through September 30, 2020, to ensure that broadband providers can help support these critical institutions as the industry and government’s response to the COVID-19 pandemic evolves.

The E-Rate and RHC programs are both subject to competitive bidding processes and regulations to ensure a “fair and open” bidding process. The limit on gift value from provider to applicant, or vice versa, is $20. The gift rules are meant to ensure a competitive bidding process but are always applicable, including during a program year.

The FCC has waived the gift rules “to permit service providers to offer, and eligible RHC and E-Rate entities to solicit and accept, improved capacity, Wi-Fi hotspots, networking gear, or other things of value to assist health care providers, schools, and libraries as well as doctors and patients, teachers, students, school administrators, and librarians and patrons during the coronavirus outbreak.”[1]

This waiver is limited to RHC participants “that are involved in the screening and treatment of patients for COVID-19 and for providing services to other patients in an effort to both help mitigate the spread of COVID-19 and devote limited on-site medical resources towards treatment of COVID-19,” and to “offerings made by service providers and solicited or accepted by E-Rate eligible entities on behalf of students, teachers, or patrons while schools and libraries prepare for closures or remain closed as a direct result of COVID-19, regardless of funding year.”[2]

The order also waived the RHC program requirements that participants in the Healthcare Connect Fund pay the unsupported portion of their service costs and that participants in the RHC Telecom program pay the urban rate. The FCC waived these requirements to assist healthcare providers with the anticipated financial strain of the pandemic response.[3]

All of these waivers expire September 30, 2020, before which time the FCC will reassess the situation and need for further relief.

The E-Rate and RHC Waiver Order is another step the FCC has taken to respond to the developing public health situation. The FCC is coordinating with Congress to appropriate funds for a remote learning initiative and COVID connected care pilot, which will use federal funds to support in-home healthcare and education efforts.

On March 13, the FCC announced the Keep Americans Connected Pledge under which broadband and telephone providers are voluntarily agreeing to not terminate services to residential and small business customers because of a failure to pay based on the disruption of the pandemic, to waive late fees, and to open up access to Wi-Fi hotspots. The FCC is updating its website regarding the agency’s ongoing response to COVID-19.

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If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Tamar Finn
Catherine Wang
Andrew Lipman

[1] E-Rate and RHC Waiver Order ¶ 7.

[2] E-Rate and RHC Waiver Order ¶¶ 10, 14.

[3] E-Rate and RHC Waiver Order ¶ 11.