If making telecommunications services and rural internet access more affordable is the issue, the Federal Communications Commission’s Universal Service Fund (USF) will have a part in reaching the goal.
In a recent Public Notice, the Commission asked for comments on how to reform the Universal Service Administrative Co. (USAC), including ideas to improve efficiency and streamline current rules.
USAC is a private, third-party organization that handles the administrative end of the Universal Service program. It does not set policy, but handles direct communications between providers and the USF under FCC-approved policies. USAC manages the four USF mechanisms: the high-cost fund (supporting broadband operation in rural areas); Lifeline (discounted service for low-income households); the E-Rate program (wiring schools and libraries for the internet); and Rural Healthcare (wiring medical facilities).
Comments the Commission accepted last week mainly focused on USAC audits. USTelecom said its members often are plagued with “massive” delays in audit completion. It holds up the example of a provider that received notice of a Lifeline fund audit in March 2023, which is still pending today.
“During that period, the provider responded to months of data requests and questions, received preliminary observations from USAC more than a year after the audit began, and then waited many additional months for USAC review and auditor follow-up,” USTelecom said.
Audits of the Universal Service high-cost fund’s Connect America Fund II and Rural Digital Opportunity Fund reverse auction awards affected members of WISPA–The Association for Broadband Without Boundaries.
“Every month of delay requires recipients to maintain letters of credit at higher amounts for longer periods of time, costing recipients thousands if not millions of dollars,” WISPA said. “Providers continue to incur substantial and unnecessary interest and carrying cost associated with maintaining letters of credit long after compliance obligations have effectively been satisfied.”
NTCA–The Rural Broadband Association offered several ideas to improve the USAC process. By avoiding simultaneous audits of a single provider, USAC could relieve the “strain [on] limited staff and financial resources of small providers.” Shot-clock deadlines on audits could help avoid months and years of delays. NTCA also suggested modernized, secure communications between rural providers and USAC staff.
“Commission-directed reforms … will preserve the integrity of the USF while recognizing the finite resources of the providers whose customers these programs exist to serve,” NTCA said. The NTCA refers to Universal Service as its “north star.”
