In the April 30, 2026 edition of the ICORE Blog we reported on a Public Notice by the FCC seeking comment on potential reforms to the operation and management of the Universal Service Administrative Company (USAC). The Public Notice sought comments regarding specific aspects of USAC’s operation including administration, operations and internal management, improving efficiency and the audit process, and issues related to the USAC Board of Directors. Comments have now been filed in this proceeding and below we summarize the comments from organizations representing the interests of the ILEC industry.
NTCA recommended that due to the limited staff and resources of small providers, USAC should avoid conducting multiple overlapping audits of an individual provider and audits should be conducted under defined timelines and “shot clocks” for both individual data requests and overall audit duration. In addition, NTCA calls for the establishment of a materiality threshold to focus resources on discrepancies of genuine consequence rather than immaterial issues whose investigation costs exceed the amounts at issue. Further, NTCA recommends that USAC should establish a clearinghouse for audit guidance, including advisory opinion mechanisms and continuing education programs. Finally, NTCA recommends that USAC correct its online portal to enable accurate tracking of Tribal and non-Tribal milestone compliance.
In its comments, WTA – Advocates for Rural Broadband, addresses various concerns regarding the audit process. WTA recognizes that random audits are an efficient means of ensuring compliance but urges the Commission to also recognize that random audits place a significant burden on small rural telcos and suggests that the Commission should employ a mechanism to spread out the burden of random audits. In addition, WTA points out that it is not unusual for audits to take as much as three years to complete and its members are often not updated on the status of the audit. In this regard, WTA believes the Commission should consider a “shot clock” to prevent audits from lingering and should require the auditors to notify the company when the audit is closed. Further, WTA states that in regard to the auditing teams, there is often a lack of consistency in the guidance provided by different teams of auditors as well as differing degrees of knowledge with regard to telecommunications technology and the telecommunications industry and recommends additional training for USAC’s internal auditing teams. Finally, WTA points out that its members have expended significant time and effort with auditors addressing trivial, non-material matters.
USTelecom, in its comments cite many of the issues addressed above. In discussing the audit process, USTelecom points out that some members have experienced USAC audits and reviews that extend for years, creating substantial uncertainty and administrative strain. In this regard, the Commission is urged to establish clear timelines for the completion of audits and reviews, as well as “shot clocks” for key stages of the audit process. UsTelecom also urges the Commission to ensure that USAC and its auditors, many of whom are outside contractors, apply the Commission’s rules consistently when conducting audits and reviews. Further, it’s suggested that the Commission require that USAC audits and reviews be conducted by personnel with sufficient telecommunications and USF program expertise. Like NTCA and WTA, USTelecom also recommends that audits be designed and conducted to produce meaningful program integrity benefits in relation to the burden imposed by the audit process. In addition to the forgoing issues, USTelecom’s comments include recommendations regarding streamlining and standardizing USAC’s audit processes across USF programs, adopting clear sampling standards, improving high-cost location verification, and simplifying administrative and contact systems and processes.
The comments discussed above indicate that there is significant agreement on the part of ILEC industry advocates on many issues related to USAC’s operation and we hope that the FCC acts in a timely manner to require the proposed USAC process reforms. We will continue to follow this issue and will provide updates as more information becomes available.
