In its quarterly report to the Federal Communications Commission, the Universal Service Administrative Company (USAC) has reported that approximately $1 billion in unused funds from previous Funding Years could be used to supplement current and future requests for E-rate discounts.  This is an increase of $100 million from the last quarterly report. Based on the FCC's Third Report and Order, the FCC can direct USAC to apply unused funds increase the amount of available funding for a funding year.

Unused Funds

USAC reported the breakdown of unused funds by year as follows:

  • FY 1999 - $25 million
  • FY 2001 - $50 million
  • FY 2002 - $50 million
  • FY 2003 - $200 million
  • FY 2004 - $275 million
  • FY 2005 - $200 million
  • FY 2006 - $175 million
  • FY 2007 - $25 million

Last fall, Funds For Learning conducted an E-rate Utilization Analysis that explains why E-rate commitments are sometimes not fully utilized.

Potentially Fundable Applications

USAC continues to reduce potentially fundable applications from previous years. A potentially fundable application is one that is currently pending a funding decision by USAC, or has been appealed to USAC or the FCC and an appeal decision has not yet been rendered.  In its latest quarterly report, USAC indicates that as of December 31, 2008, there were 2,821 potentially fundable applications for Funding Year 2008 and 642 for prior funding years.

In response to an FCC Office of Inspector General Report released last fall, USAC reported to the FCC that they continue to strengthen their processes, systems and procedures to prevent and reduce the improper payments as defined by the statute.  USAC has dedicated more resources for oversight, training and improving their information technology tools for data gathering. In fact, they have further reported, they have hired an auditing firm to evaluate their current controls and procedures and the contractor now is in the process of testing "key control activities" associated with USAC’s policies and procedures.  

The USAC Quarterly Report can be viewed here .