January

• The inauguration of Republican Donald Trump led quickly to the restructuring of the FCC from a Democratic to a Republican majority.  The previous FCC Chairwoman, Jessica Rosenworcel, resigned immediately and existing Commissioner Brendan Carr, author of the FCC chapter of Project 2025, was quickly named FCC Chairman.  The subsequent resignations of Geoffrey Starks (D) and Nathan Simington (R), and the confirmation of Olivia Trusty (R) in June 2025, led to the current 2:1 Republican majority with two Commissioner seats currently left open.
• The FCC announced an initial list of 707 participants in its $200 million Cybersecurity Pilot Program (see newsletter of January 20th).
• The FY 2025 Form 471 application window opened on January 15th.

February

• The Supreme Court issued a unanimous decision in the case of “Todd Heath vs. Wisconsin Bell,” a whistleblower case involving the FCC’s Lowest Corresponding Price (“LCP”) rule, confirming that the E-Rate program is subject to the False Claims Act.  In doing so, the Court found that only a small portion of E-Rate funds were deemed “federal funds” (see newsletter of February 24th).

March

• The FCC set the E-Rate funding cap for FY 2025 at an inflation-adjusted $5.06 billion (see newsletter of March 10th).  As in the past, the cap is far above actual demand which, as indicated above, had reached only half that level for FY 2025 as of Wave 34.  Editorial note: The availability of additional funds again makes us question the FCC’s reluctance to make more cybersecurity products and services eligible for all E‑Rate applicants.
• Meanwhile, the application window for the more limited Cybersecurity Pilot Program opened on March 18th.
• The Supreme Court held a hearing on the constitutionality of the Universal Service Fund (“USF”), the underlying funding mechanism for E-Rate and three other USF programs (see newsletter of March 31st and the Supreme Court’s decision in June, summarized below).

April

• Over twenty state attorney generals have sued the Trump Administration seeking restraining orders to prevent the shutdown and/or funding cuts to the U.S. Department of Education (“DOE”) and the Institute of Museum and Library Services (“IMLS”).
• The first wave of E-Rate funding commitments for FY 2025 was released on April 26th.

May

• The U.S. Senate voted to employ the Congressional Review Act (“CRA”) to overturn the E-Rate eligibility of hotspots.  Had the Senate’s action been confirmed by the House and signed by the President, hotspots would have become ineligible and, more importantly, would have prevented an equivalent program from being reenacted by the FCC in the future.  The House has not, and is not expected to, approve the hotspot CRA (see newsletter of May 12th).
• In streamlined decisions for April and May, and consistent with past precedent, the FCC approved waivers for over 780 late-filed Form 471 applications filed within two weeks of the close of the FY 2025 application window.

June

• The FCC released a Public Notice (DA 25-471) setting the new Category Two budget parameters for the next five-year cycle affecting FY 2026-2030.  Reflecting five years of accumulated inflation, the Category 2 budget factors and funding floors are up 20.7% from the FY 2021-2025 cycle (see our newsletter of June 9th).
• By a 6-3 vote, the U.S. Supreme Court upheld the constitutionality of the Universal Service Fund (“USF”) thus assuring continued funding for E-Rate and the other three USF programs.  The decision energized bipartisan committees in the House and Senate to begin contemplating longer-term restructuring of the underlying USF funding mechanism (see our newsletter of June 30th).

July

• The FCC began a reevaluation of the E-Rate eligibility of school bus Wi-Fi with indications that hotspot eligibility may also be reevaluated.

August

• The reactivated, bipartisan and bicameral, Congressional USF Working Group sought public comment on the future restructuring of the USF.  Much-needed USF reform is expected to be a multi-year undertaking (see newsletter of August 4th).

September

• The proposed 4Q25 USF contribution factor reached a new high of 38.1% (see newsletter of September 22nd).
• The Cybersecurity Pilot Program application window closed September 15th.

October

• In a 2:1 vote along party lines, the Republican-controlled FCC retroactively revoked the eligibility of school bus Wi-Fi and hotspots for FY 2025 and future years.  Both decisions had been expected.  No funding for either service for FY 2025 had yet been approved by USAC.  The FCC released an amended Eligible Services List (“ESL”) for FY 2025, removing the eligibility of both services.  School bus Wi-Fi, which had been an eligible service in FY 2024 and had been funded by USAC, was unaffected for the preceding year.
• The FCC released a draft of the Eligible Services List for FY 2026, simplifying the definition of Basic Maintenance of Internal Connections (“BMIC”).
• The government shutdown, beginning in October and extending into November, brought FCC E-Rate decisions and actions to a temporary halt but had only a modest impact on USAC’s E-Rate processing.

November

• Passage of the 2025 budget reconciliation legislation, leading to the end of the government shutdown, includes sweeping reductions in the Supplemental Nutrition Assistance Program (“SNAP”).  The changes, if they remain in effect, will, over time, reduce school-reported Identified Student Percentage (“ISP”) ratios, the major criteria for participation in the Community Eligibility Provision (“CEP”) program (see newsletter of November 3rd).
• USAC posted a list on the FCC website summarizing all current USAC Administrative Procedures not otherwise explicitly stated or codified in an FCC rule or regulation (see newsletter of November 24th).

December

• USAC issued Wave 34, which included formal denials of 489 school bus Wi-Fi funding requests.  While no timeline has been announced for hot spot application determinations, similar denials are anticipated.
• USAC issued the first funding wave for the Cybersecurity Pilot Program including $46.9 million for 140 applicants, all approved as submitted.
• USAC announced that the FY 2026 E-Rate application window will open January 21st and close April 1st (surely, by coincidence, being April Fools).
• The FCC issued an instructive appeals decision (FCC 25-87) setting forth a distinction between “substantive” and “procedural” ministerial and clerical (“M&C”) errors (see newsletter of December 29th).

New Category 2 Budgets:

Last June (see above), the FCC announced the new Category Two parameters for the next five-year budget cycle affecting FY 2026-2030.  Applicants planning to apply for FY 2026 Category 2 products and services this year should take advantage, if they have not already, of the last few days of the Administrative Window (closing January 16th) to update their 2025-2026 enrollment numbers.

Prospective Changes to the Eligible Services List for FY 2027:

Although the FCC only recently released the Eligible Services List for FY 2026, it is not too early to begin thinking about an updated ESL for FY 2027.  As the FCC made simplifying changes to the FY 2026 ESL regarding the Basic Maintenance of Internal Connections (“BMIC”), it had also requested comments related to Managed Internal Broadband Services (“MIBS”).  The FCC was apparently impressed with many of the MIBS comments it received but indicated that “changes to MIBS require additional time and preparation.”  That “time” might have been available in 2025 had there been no government shutdown last fall.  We will be watching for simplifying changes to MIBS for FY 2027.

We also note that the FCC received suggestions during last year’s ESL comment period to make “advanced or modern firewall services eligible as E-Rate Category Two services.”  The FCC has historically received, but not acted upon, comments to add cybersecurity products and services to the E-Rate eligibility list.  In declining to do so again this year, the FCC acknowledged that it is studying the use of USF funds for cybersecurity as a part of its Cybersecurity Pilot Program and “may reconsider the eligibility of these services after the conclusion of the Pilot program.”

We would hope that the two parties (LAUSD and Funds For Learning) — joined by others — will make the same argument during the comment period for the FY 2027 ESL.  We note that neither party was asking to make all cybersecurity products and services eligible.  The arguments focused only on firewalls for which the “basic” portion is already eligible for E-Rate, and the non-basic portion is eligible for the Pilot.  We consider this distinction to be an unnecessary point of confusion that could and should be eliminated by making advanced firewalls fully eligible for all E-Rate applicants in FY 2027.

Trump et al. v. Slaughter et al.:

One U.S. Supreme Court case we are following this year is formally titled “Donald J. Trump, President of the United States, et al., Petitioners v. Rebecca Kelly Slaughter, et al.” (case number 25-332).  The crux of this case deals with the ability of the President to fire — without cause — a member of the Federal Trade Commission (“FTC”).  The case was heard by the Supreme Court last December 8th; a decision is expected this June.  Early indications suggest that the conservative majority on the Court is set to reverse a 90-year-old Supreme Court precedent permitting the Presidential removal, only for cause, of an FTC member or, perhaps, any individual serving on other independent federal agencies.

Our interest in this case is that its outcome could also affect the FCC, a federal agency structured similarly to the FTC.  Both agencies, when fully staffed, have five commissioners, three representing the party of the current Administration, and two representing the opposing party.

The FCC currently has only three members: Chairman Brendan Carr (Republican), Commissioner Olivia Trusty (Republican), and Commissioner Anna Gomez (Democrat).  The other two positions — nominally one more Commissioner from each party — are currently vacant.  The fact that the FCC has three current members is important because three Commissioners are necessary for a quorum, without which the FCC’s decision-making power is limited.  Appointments of two additional FCC Commissioners appear to be on hold pending the outcome of the FTC decision.

Here is why, as we see it.  If the Court upholds the President’s authority to fire an independent agency’s commissioner(s) at will, and if the FCC were subsequently brought to full 3:2 strength, the President might be inclined to then fire the two Democratic Commissioners.  This would bring the FCC back down to three Commissioners again, all Republican — and with a three-person quorum.

Cybersecurity Pilot Program Developments:

With Wave 1 of the Pilot’s FCDLs only issued last December, we expect the program to really get underway in 2026 with the issuance of the remaining FCDLs and the beginning of actual cybersecurity services.  In this regard, we expect 2026 to be exciting, busy, and a bit confusing.

As a start, many applicants will need to bring their application records up to date via the new post-commitment Cyber Form 488.  We note that many of the contracts referenced in original applications used “placeholder” dates that will need to be updated once services begin.

One unique aspect of the Cyber Pilot, which will be new to most E-Rate applicants, is that most of the deadline dates for annual reports and invoices are applicant-specific.  Service start dates, service delivery dates, and invoice deadlines that fall on specific calendar days for E-Rate, will be determined, applicant-by-applicant, in the Cyber Pilot depending upon when an applicant’s FCDL was issued and when specific services began.  Tracking these dates and the resulting deadlines will be critical.  USAC recently posted a Cybersecurity Pilot FCC Form 471 dataset in Open Data but it is currently missing several columns for key dates.

One potentially outstanding issue for the Cyber Pilot is how, if at all, excess funding will be addressed.  The original Pilot order indicated that any excess funds from the $200 million total would first be used to fully fund the twenty-six applicants that initially received partial budget allocations.  Based on early applicant withdrawals from the program, funding for the partially funded applicants quickly became available last summer but was not reallocated.  Additional unused funding is expected from existing fully funded applicants who do not utilize their full allocations.  The Cyber Pilot order contains a provision to open another, albeit limited, window for new applicants.  Our assumption, based in part on Chairman Carr’s initial dissent on the Cyber Pilot, is that any excess funding will not be reallocated.

To meet the minimum 28-day posting requirement and still be able to file a Form 471 by April 1st, a Form 470 for FY 2026 must be filed no later than March 4, 2026.  Waiting until the last day to file a Form 470 is strongly discouraged.