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USAC Anticipates Roll-Over of at Least $420 Million for 2004

The Universal Service Administrative Company has reported to the Federal Communications Commission that it expects to be able to roll over at least $420 million in undisbursed E-rate funding commitments for use in the 2004 funding year.

In its quarterly report to the Commission, dated August 1, USAC reported that it has $60 million left over from the 1999 funding year, $160 million from 2000 and $200 million from 2001. The FCC has specified that beginning in the 2004 funding year, it will permit USAC to use these undisbursed funds to increase the size of the E-rate funding pool in future years.

USAC acknowledges that the $420 million estimate is, in fact, a "cautious approach." All invoices for timely funding commitments in the 2001 funding year were supposed to be processed by March 30, 2003. However, USAC has retained $229.2 million for "potential additional disbursements on committed" funding requests, $88 million for "remaining uncommitted requests," and $133.9 million as a "contingency amount for pending appeals and invoice deadline extension requests." It is likely that a substantial part of that $450 million will also not be ultimately be disbursed, and hence could be made available to further expand the size of the funding pot for which applicants will be filing this fall.

For 1999, USAC is still retaining about $20 million for various contingencies and late disbursements and for 2000, an additional $38 million. The appeals contingency for 2002 was not reported, but it is expected to be much higher.

In June, the FCC formally proposed a procedure through which it would decide in the second quarter of each year precisely how much funding from previous years would be rolled over. By that time, the SLD has generally calculated the level of applicant demand and begun reviewing applications, and is ready to start issuing funding commitments. The FCC has not yet finalized this procedure.

In the report, USAC also said that it was still reviewing 2,174 "potentially fundable" applications for the 2002 funding year, and would issue commitment letters as reviews were completed. It also reported that by June 30, 2003, it had issued funding commitments on more than "80 percent of [2003] applications not on hold pending legal or policy decisions or awaiting data from applicants who have requested extensions to provide information for program integrity reviews."

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