As discussed in the August 13, 2026 edition of the ICORE Blog, at its August 6, 2026 Open Meeting, the Commission adopted a Notice of Proposed Rulemaking (NPRM) aimed at strengthening the administration and management of the USF and the Commission’s oversight of USAC. The NPRM sought comment on ways to streamline and improve USAC processes regarding transparency, accountability, and cost effectiveness. Specific areas of concern included the USAC audit process, the costs and structure of USAC administration and the make-up of the USAC Board of Directors. Comments have now been filed in this proceeding.
In its comments, WTA – Advocates for Rural Broadband offered the following:
* Of primary concern to its members is USAC’s audit process which can be overly burdensome, time-consuming, and confusing. Regarding random audits, WTA urged the Commission to recognize that random audits place significant burdens on very small rural telcos and are a huge strain on their limited resources and suggested that the Commission employ a mechanism to reduce the burden of random audits. Further, WTA’s comments address burdensome requests with unrealistically short deadlines and cite the fact that audits can drag on as long as three years or more. In addition, WTA states that often its members are required to expend significant time and effort on trivial and/or non-material matters. WTA supports the establishment of a de-minimis exception from random audits and further suggests that small companies should be subject to random audits no more than once every six years. To reduce the burden and enhance the efficiency of the USAC audit process, WTA suggests the utilization of an “audit collaboration portal” which would allow the USF recipient companies to monitor the status of their audits on a real-time basis.
* WTA also addresses the lack of consistency in guidance provided by different teams of auditors and the lack of knowledge by auditors regarding communications technologies and the telecommunications industry. As a result, WTA members need to spend additional time explaining these issues to the auditors. WTA suggests that additional training may be necessary to ensure consistency between audit teams regarding Commission rules and the guidance offered during audits and to enhance auditors’ knowledge of the telecommunications industry.
* WTA addresses the NPRM’s proposal to move to a “pay and dispute” system, rather only requiring the company to pay disputed amounts after the company has exhausted its opportunity to challenge an audit finding with USAC and then potentially with the Commission. WTA opines that if the Commission adopts this approach, it must also provide a mechanism for repaying the company with interest if it prevails in its challenge.
* Regarding the USAC Board, WTA takes a “if it ain’t broke, don’t fix it” position. In regard to the establishment of a “shot clock” to address concerns about the speed at which USAC operates, WTA appreciates and supports proposals to increase the speed of USAC’s actions but cautions that USAC often needs guidance from the Commission and the Commission must ensure that it is not a source of delay.
NTCA also filed comments in this proceeding:
* NTCA supports publication of written USAC appeal decisions, subject to appropriate protection of confidential information to help reduce uncertainty, prevent inconsistent outcomes, and ensure that administrative determinations are grounded in Commission authority.
* NTCA urges the Commission to conduct periodic reviews, oversight, and to implement practical audit protections.
* In addition, NTCA recommends defined shot clocks for USAC and its auditors, and the establishment of reasonable minimum response periods for audited entities, and audit timelines.
* NTCA recommends the establishment of materiality thresholds to ensure that significant burdens are not imposed to resolve immaterial issues.
* NTCA opposes expanding a “pay and dispute” model across all USF programs because recovery obligations should not be attached before administrative and judicial review has been exhausted.
* Finally, NTCA recommends annual training for USAC staff and third-party auditors, and using published decisions and advisory materials to improve consistency and predictability across USF administration.
Reply comments in this proceeding are due October 30, 2026. We will continue to follow this important issue and will provide updates accordingly.
