Commenters propose measures to shorten Universal Service audits

The Federal Communications Commission is seeking comments on reforming the Universal Service Administrative Company (USAC) to improve efficiency and streamline existing rules. USAC is a private third-party organization that administers the Universal Service program under FCC-approved policies, managing four mechanisms: the high-cost fund for rural broadband operations, Lifeline for discounted service to low-income households, E-Rate for connecting schools and libraries, and Rural Healthcare for connecting medical facilities. Accepted comments focused on USAC audits, citing long delays in audit completion. USTelecom described a Lifeline audit that began in March 2023 and remained pending, involving months of data requests, delayed preliminary observations, and extended review and follow-up. WISPA linked audit delays to Connect America Fund II and Rural Digital Opportunity Fund reverse auction awards, noting that each month of delay increases letters of credit and carrying costs.

"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)."

"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 mai"

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