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USAC Advises FCC on Undisbursed E-rate Funding

The Universal Service Administrative Company reported Aug. 2 that it can make available $724.5 million worth of undisbursed E-rate funds from the 1999 and 2000 Funding Years to help the Federal Communications Commission stabilize carriers' contributions to the Universal Service Fund over the next two quarters. USAC already has applied $256.1 million worth of undisbursed funding to stablize the fund in the current quarter.

On June 13, the FCC directed USAC to use undisbursed E-rate funds to stabilize the Universal Service Fund through the first quarter of 2003. After that, it said, it would permit undisbursed funds to be rolled over for use by E-rate applicants in future funding years.

USAC's latest quarterly report to the FCC detailed that the problem of a gap between commitments and disbursements continues to persist. In the 2000 Funding Year, undisbursed funds totaled $516 million, or approximately 25 percent of the committed amount. Through June 30, 2002, USAC had distributed only $738.6 million of the $2.276 billion that it had committed for the 2001 Funding Year. Applicants will have until late October to submit their paperwork for recurring payments associated with that funding year, and until late January 2003 for installations that were finished through Sept. 30, 2002.

USAC said that about 515 applications from the 2001 Funding Year remain under review, 'with over half of them on hold for investigation of possible program violations." It said it has completed 'initial review" of approximately 30,700 of the 35,600 applications that the Program Integrity Staff is reviewing from the 2002 Funding Year and final reviews on more than 30,200 applications. No commitments have been made for internal connections, it said, 'because USAC remains unsure of its ability to fully fund all approved requests at 90% or requests at lower discount levels."

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