On April 15, 2026, the FCC’s Wireline Competition Bureau and Office of the Managing Director issued a Public Notice (Notice) seeking comment on potential reforms to the operations and management of the Universal Service Administrative Company (USAC). USAC was originally established as a subsidiary of NECA which the Commission established in 1983. USAC, however, was not and is not subject to NECA’s management or operational control and instead operates at the direction of the FCC pursuant to the FCC’s rules and guidance. USAC’s function is purely administrative and its operations are prescribed by FCC regulations and subject to FCC oversight. Citing the passage of time since the FCC last conducted a review of USAC’s relevant processes, the Notice seeks comment on strengthening USAC’s internal processes and improving its management structure to increase efficiency in the administration of USF programs. The Public Notice seeks input in the following areas:
Administration – The Notice seeks comment on the current state of USAC operations and ways to improve efficiency. Input is sought on ways to improve USAC’s operations and if proposed improvements would require changes to the FCC’s rules. In addition, the Notice asks which areas or processes are most in need of streamlining today and what challenges are there to reforming the processes administered by USAC?
Operations and Internal Management – The Notice considers what changes are needed to USAC operations and internal management processes to maximize efficiency, transparency, accountability, and operational speed. Comments are sought regarding specific USAC processes that cause undue delay and are overly burdensome. The Notice asks if changes in FCC oversight and guidance and the establishment of shot clocks or clear deadlines for USAC action should be implemented to improve efficiency?
Improving Efficiency – Next, comment is sought on improving the efficiency of USAC’s role in the recoveries of USF funds and audits of USF program beneficiaries, and ways to ensure that the Commission is able to recover all improperly disbursed funding subject to recovery. The Notice seeks input regarding changes the FCC should make to streamline the audit and recovery processes to improve efficiency. Further, comments are sought regarding the appropriate length of time after the issuance of an audit finding for the FCC to recover improperly disbursed funds. In addition, the Notice asks if the FCC should modify its rules and USAC’s audit procedures to codify the use of statistically valid sampling an extrapolation methodology for support recovery across all USF programs?
Improving Audit Processes – The Notice asks what changes, if any, should be made to USAC’s annual independent audit to make it more efficient and cost effective and further seeks input on ways to make USAC’s administration more effective. Also, comments are requested regarding the need for modifications to the Memorandum of Understanding (MOU) between the Commission and USAC and on whether the MOU should require a proposed annual budget from USAC for each year.
USAC Board Composition and Conflicts of Interest – The Notice seeks comment on the composition of the USAC Board of Directors and on preventing Board member conflicts of interest. Input is requested regarding changes to the Board that would promote more efficient administration of USF support. Commenters are asked to provide input relative to the composition and size of the Board, the Board nomination and selection process, and ways for the Commission to strengthen and improve its oversight regarding potential conflicts of interest for USAC Board members.
The Notice seeks comment on a wide range of issues relative to USAC’s operation and processes. Comments in response to the Notice are due May 15, 2026 and we anticipate that a significant volume of comments will be filed in this proceeding. We will continue to monitor this important issue and will provide updates as more information becomes available.
