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FCC Launches Inquiry Into Universal Service Fund Management, Administration
[June 16, 2005]

FCC Launches Inquiry Into Universal Service Fund Management, Administration


The investigation comes amidst allegations ranging from mismanagement to outright fraud.

By TED GLANZER
TMCnet Communications and Broadband Columnist

The Federal Communications Commission on Tuesday announced that it will launch an investigation into the Universal Service Fund (USF) amidst allegations ranging from mismanagement to outright fraud.

The key goal of the USF is to provide affordable telecommunication services to everyone in the country, including those who are: living in high-cost areas, low-income families, eligible schools and libraries and rural health care providers.



Before 1996, only long-distance providers paid fees into the USF.

The Telecommunications Act of 1996 expanded the types of companies required to contribute to the fund.


Today, local telcos, wireless telcos, long-distance companies, international telcos and payphone providers all contribute to the fund.

Since 1997 to April 2005, the Universal Service Administrative Company, which administers the fund, disbursed $30.3 billion.

The FCC investigation casts a rather wide net, focusing on the management, administration and oversight of the USF – pretty much everything.

Indeed, according to the Notice of Proposed Rulemaking, the FCC states: “We recognize that some parties have raised concerns ranging from mismanagement to intentionally defrauding the program, and we take these concerns seriously.”

Accordingly, the FCC plans to target and/or seek the following aspects of the USF:

• Ways to simplify and streamline the management of the program;

• The effectiveness of existing efforts to protect the fund against potential misuse;

• The effectiveness of the existing administrative structure and seeks comment on whether changes are needed to ensure the USF is administered in an effective, neutral way; and

• Comments on establishing performance measures to ensure the effectiveness of the program.

“The Commission will determine whether it needs to change any rules in order to manage and administer effectively while deterring waste, fraud and abuse,” according to the statement.

FCC Chairman Kevin Martin expressed his full support for the investigation.

“Managing the USF in an efficient, effective manner is one of the Commission’s core functions,” Martin said in a statement. “It is incumbent upon us to take the steps necessary to improve the operational efficiency of the program while providing greater certainty to the recipients. We can thus achieve our mutual goal of protecting the continuing health and sustainability of the universal service fund.”

TMCnet.com will continue to monitor the investigation and provide the latest developments.

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Ted Glanzer is assistant editor for TMCnet. For more articles by Ted Glanzer, please visit:

http://www.tmcnet.com/tmcnet/columnists/columnist.aspx?id=100033&nm=Ted%20Gl
anzer

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