ABOUT USAC

The Universal Service Administrative Company (USAC) is an independent, not-for-profit corporation designated by the Federal Communications Commission (FCC) as the administrator of the universal service fund (USF)

Universal service is the principle that all Americans should have access to a baseline level of telecommunications services. This principle is the cornerstone of the Communications Act of 1934, which established universal service in legislation and also created the Federal Communications Commission (FCC). Since that time, universal service policies have helped make telephone service widely available throughout the U.S., even in rural areas. The Telecommunications Act of 1996 (1996 Telecom Act) expanded the scope of universal service to include increased, affordable access to both telecommunications and advanced services, such as high-speed Internet, for all consumers.

More specifically, the law adopted explicit goals to guide the implementation of universal service policies. These goals include:

Promote the availability of quality services at just, reasonable, and affordable rates. Increase access to advanced telecommunications services throughout the nation. Advance the availability of such services to all consumers, including those with a low income and those who live in rural, insular, and high cost areas, at rates that are reasonably comparable to those charged in urban areas. Increase access to telecommunications and advanced services in schools, libraries, and rural health care facilities. Provide equitable and non-discriminatory contributions from all providers of telecommunications services to the fund supporting universal service programs. To implement the 1996 Telecom Act, the FCC established four programs:

High Cost, for rural areas (transitioning into the Connect America Fund) Lifeline (for low-income consumers), including initiatives to expand phone service for Native Americans Rural Health Care Schools and Libraries (commonly referred to as "E-rate")

Money to pay for universal service programs comes from the universal service fund (USF). The USF is paid for by contributions from telecommunications carriers, including wireline and wireless companies, and interconnected Voice over Internet Protocol providers, including cable companies that provide voice service, based on an assessment of their interstate and international end-user revenues.

The FCC is reforming universal service policies to encourage further investment in and access to evolving broadband and voice services, promote expansion and adoption of broadband services, and improve efficiencies and eliminate waste in the program

USAC Overview

USAC administers the four universal service support programs under the oversight of the Federal Communications Commission (FCC). The four programs – High Cost, Lifeline, Rural Health Care, and Schools and Libraries – help provide access to affordable telecommunications services to consumers, libraries, rural health care facilities, and schools. USAC also collects universal service funds to support these programs under terms defined by the Telecommunications Act of 1996, the FCC, and its bureaus and offices.

USAC was created in 1997 as a not-for-profit subsidiary of the National Exchange Carrier Association (NECA). It is governed by a 19-member Board of Directors that includes a broad representation of both industry and non-industry interests including representatives for consumers, health care providers, schools and libraries, service providers, and state regulatory commissions.

USAC is headed by a chief executive officer who is nominated by the USAC Board of Directors (the Board) and appointed by the Chairman of the FCC. The Board submits the name of its nominee, along with relevant professional and biographical information, to the Chairman of the FCC. Subject to the Chairman's approval, the nominee is appointed as USAC's chief executive officer.

USAC has three divisions that administer the four universal service support programs: the High Cost and Low Income Division (HCLI), the Rural Health Care Division (RHC), and the Schools and Libraries Division (SL). In addition, USAC has a Finance Division that is responsible for the finances of the corporation including billing, collection, and disbursement of all funds for the four programs; an Information Systems Division that is responsible for providing overall operating support to the corporation; an Internal Audit Division that is responsible for conducting audits of USAC, the support programs, and program beneficiaries; an External Relations Division that is responsible for communication with stakeholders including Congress, the FCC, the media, and program participants; an Office of the General Counsel, which is responsible for providing legal advice and support to the corporation; and a Human Resources and USAC Operations Division, responsible for managing employee- and facilities-related business.

Committees of the USAC Board of Directors govern the functions of each division. Each committee of the USAC Board oversees the budgets of its respective division and reports to the USAC Board.