On July 16, 2026, the FCC released a draft plan that could reshape how the E-rate program, and every Universal Service Fund (USF) program, is run. If you count on E-rate to connect your schools or your library, here is the most important thing to know: this is a draft up for a vote, not a rule. Your funding requests, your competitive bidding, and your everyday deadlines all continue exactly as they do today.
The proposal, called a Notice of Proposed Rulemaking (WC Docket No. 26-173), is set for a vote at the FCC’s August open meeting. It is the first top-to-bottom review of USAC, the company that runs the day-to-day operations of E-rate, since 1998.
Several ideas in the draft would directly affect schools and libraries:
- Audits of applicants. The FCC wants to update its rules to clearly state that USAC can audit schools and libraries, not just service providers.
- Estimated recoveries. The FCC proposes letting USAC calculate how much money to take back by auditing a sample of funding requests and applying the results to the rest. It asks whether this approach is fair for E-rate, where each request comes from a different bidding process.
- Pay first, appeal later. Today, filing an appeal pauses a demand for repayment. The FCC asks whether applicants should have to pay first and get the money back if they win.
- Faster decisions. The FCC proposes requiring USAC to publicly report how long its reviews take, and asks whether firm deadlines (“shot clocks”) should apply to application reviews, appeals, and audits. It also proposes having USAC remind applicants about upcoming filing deadlines.
- Skipping small audits. The FCC asks whether applicants who receive only small amounts of funding should be exempt from random audits.
The draft also looks at capping USAC’s operating budget, shrinking its Board of Directors from 20 to 13 members, and even asks whether a different organization should run the programs.
If the FCC adopts the notice in August, the public will have 30 days to comment after it appears in the Federal Register. Funds For Learning is following this closely and will keep you posted as it develops.
