FCC Seeks Public Input on Modernizing Universal Service Fund Administration

By Blake Reed

The Federal Communications Commission is inviting public comment on potential reforms to the administration of the Universal Service Fund, the multi-billion-dollar program that supports rural broadband, low-income connectivity, schools and libraries, and rural health care.

In a Notice of Proposed Rulemaking circulated for consideration at the Commission’s August Open Meeting (WC Docket No. 26-173), the FCC is examining the structure, operations, and oversight of the Universal Service Administrative Company (USAC). USAC has served as the day-to-day administrator of the fund for nearly three decades, and the Commission is now reviewing whether updates are needed to improve efficiency, transparency, and accountability.

The proceeding focuses on several core aspects of USF administration. It looks closely at how USAC currently handles routine operations and how the FCC oversees those processes. It also seeks to clarify the proper scope of USAC’s responsibilities as fund administrator — what the organization should and should not be doing. In addition, the Commission is examining USAC’s operating costs and exploring opportunities to reduce the expenses associated with administering the program.

Particular attention is being given to USAC’s Board of Directors. The NPRM reviews the Board’s structure, size, and composition, including how those factors may influence fund administration and whether adjustments could help reduce potential conflicts of interest.

Beyond these primary topics, the Commission is also seeking input on related improvements. These include ways to make audits of beneficiaries and contributors more efficient, stronger mechanisms for recovering improperly disbursed funds more quickly, and broader structural changes that could modernize oversight of the Universal Service Fund as a whole.

The stated objective of the proceeding is to reduce waste, ensure that program dollars are directed toward their intended purposes across the High-Cost, Lifeline, E-Rate, and Rural Health Care programs, and bring administrative practices up to date after nearly 30 years of operation under the current model.

The Commission is currently in the comment stage and is soliciting feedback from stakeholders before determining whether and how to proceed with any reforms.

To read the full Notice of Proposed Rulemaking in WC Docket No. 26-173, click here.