The FCC agrees with cable broadband providers that cloud-based services should be eligible for broadband subsidies under the Universal Service Fund's E-rate schools and libraries broadband subsidy. 

The commission had sought comment on its 2020 list of eligible services for the fund, and while it chose not to add new services to the list or make some other changes requested by some stakeholders, it did clear up the cloud issue. 

NCTA-The Internet & Television Association had said in its comments that "the Commission should make clear that, so long as the underlying function is eligible for E-rate support, virtualized services that perform the same function as a traditional hardware-based solution are eligible as well." (NCTA was talking particularly about cybersecurity equipment to protect against network attacks).  

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The commission in 2014 found that some hardware and services could be virtualized and said those were eligible. NCTA wanted a clarification that any virtualized services that had been eligible when hardware-based were covered.  

The FCC agreed, but put it in an "only" context.   

In issuing the 2020 eligibility list this week, the FCC's Wireline Competition Bureau (the decision was at the bureau level rather than voted on by commissioners) said: "We address a request for clarification regarding the eligibility of virtualized equivalents of eligible services or equipment. In 2014, the Commission recognized that some category two functionalities can be virtualized in the cloud and perform the same functions as eligible internal connections equipment, and stated that such services are eligible for E-Rate funding. Accordingly, only virtualized solutions that perform the functions of eligible broadband internal connections are eligible for E-Rate funding." 

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