FCC Seeks Comment on Reforms of USAC Processes and Oversight; Comments Due May 15

The Wireline Competition Bureau and the Office of the Managing Director released a public notice seeking comment on potential reforms to the operations and management of the Universal Service Administrative Company (USAC).  Comments are due May 15, 2026.

Specifically, the public notice seeks comment on:                                                    

USAC Reform

• What improvements to USAC are appropriate, and how can the Commission effectuate these improvements? The Commission asks that commenters identify whether these improvements require changes to the Commission’s rules and provide other relevant details on how the Commission can accomplish these improvements.
• How can the Commission create additional efficiencies in USAC administration? Which areas or processes are most in need of streamlining today? Are there past examples of new efficiencies in USAC operations or operations of other organizations that could serve as a model for USAC?
• What challenges are there to reforming the processes administered by USAC, and how should these challenges be addressed?

Operations and Internal Management Processes

• Are there USAC processes that cause undue delay or burden on program participants?
• Could changes in the FCC’s oversight of and guidance to USAC increase responsiveness for program participants and stakeholders, such as shot clocks or clear deadlines for USAC action?
• Are there any other improvements to USAC’s structure or processes that would benefit the USF programs? If those improvements require changes to the Commission’s rules, which rules should be updated to improve efficiency, transparency, and accountability in the administration of the USF?

 Improving Efficiency

• Are there changes the FCC should make to streamline USAC’s audit and recovery processes to improve efficiency?
• USAC’s processes for audit-related recovery letters, non-audit-related recovery letters, and appeal decision letters vary across the USF programs. Should the FCC direct USAC to streamline these processes to create uniformity across the programs? If commenters suggest any changes, commenters should indicate what if any changes are required to the existing rules in Subpart H of Part 54 as they pertain to audits or Subpart I of Part 54 as they pertain to review of decisions issued by USAC.
• What should be the appropriate length of time after the issuance of an audit finding for the Commission to recover funds improperly disbursed to support recipients? Should the timing of a support recovery for improperly disbursed funds be impacted by an administrative appeal?
• Should the Commission modify its rules and USAC’s audit procedures to codify the use of statistically valid sampling and extrapolation methodology for support recovery across all USF programs?
• When there are either known or highly suspected instances of alleged misuse of funds, failure to comply with program rules, or other potential waste, fraud, or abuse of funds, are there practices and policies that the Commission should consider adopting, consistent with federal law, beyond our existing mechanisms to combat waste, fraud, and abuse? Are there practices and policies used by other federal agencies to quickly mitigate against potential acts of misconduct, and prevent waste or misuse of federal funds that the Commission should consider adopting?

Improving Audit Processes

• What changes, if any, should be made to the USAC annual audit to make it more efficient and cost-effective?
• Are there ways to make USAC’s administration more cost effective?
• Should there be any modifications to the USAC MOU between the Commission and USAC? Should the USAC MOU require a proposed annual budget from USAC for each year?

Board Composition

• What changes to USAC’s Board of Directors could the Commission consider to promote more efficient administration of USF support?
• Should the composition of the Board be modified to include new stakeholders or independent directors? Are there any areas of expertise that are not represented on the USAC Board?
• Should the size of the USAC Board be changed?
• Should there be changes to the USAC Board nomination and selection process?
• Under what circumstances may the Commission Chairperson remove a Board member prior to the end of their term?
• Should the Commission’s rules establishing Divisions and Committees of the USAC Board be modified?

Conflicts of Interest

• What changes should the Commission make to strengthen and improve its oversight regarding potential conflicts of interest for USAC Board members?
• Should the Commission rules, and not just USAC’s ethics policy, require USAC Board members, when acting in their capacity as Board members, to represent the interest of the USF, and not just the Board member’s personal employer or constituency?
• Should the Commission adopt new conflict of interest rules?
• Should certain individuals/entities be prohibited from serving on the USAC Board due to conflicts of interest?