Managing and Overseeing Universal Service
- The Universal Service Fund (USF) provides financial support for telecommunications services to a variety of entities serving rural areas, low-income consumers, and schools and libraries. While considering legislation that codified universal service, the Senate Committee on Commerce, Science, and Transportation anticipated that competition and new technologies would reduce or eliminate the need for universal service support.
- Since 1998, when USF disbursements were about $2.3 billion, disbursements have increased rapidly and in 2007 were about $7 billion. Some stakeholders and policymakers advocate expanding USF to include broadband service, which could help reduce the country’s lagging rate of adoption of broadband service. However, this could also further expand the size of the USF.
- The USF faces a myriad of management challenges. USF disbursements operate outside of the annual appropriations process, and a nongovernmental entity runs the day-to-day operations of the USF. In several reports, we have identified weaknesses with the management and oversight of the USF, including a lack of performance goals and measures and weak internal controls. Because of these weaknesses, it is not clear whether the USF is achieving the desired outcomes in an effective and cost-efficient manner.
Highlights of GAO-08-633 (PDF), Highlights of GAO-05-151 (PDF)
- The increasing burden imposed on American households to fund universal service, combined with these weaknesses, could undermine support for the program, and policymakers have introduced proposals to reform the USF.
Figure: Universal Service Fund Disbursements
Source: USAC annual reports (1998-2007)
^ Back to topWhat Needs to Be Done
- GAO recommended that FCC develop performance goals and measures for both the High Cost and Schools and Libraries components of the USF, which would help identify areas for improved program operations and help ensure that the programs are meeting their intended purposes.
Highlights of GAO-08-633 (PDF), Highlights of GAO-05-151 (PDF)
- GAO also recommended that FCC identify areas of risk in the internal control environment for the High Cost component of the USF and implement mechanisms that will help ensure compliance with the program’s rules and produce cost-effective use of the program’s funds.
Highlights of GAO-08-633 (PDF)
^ Back to topKey Reports
- Telecommunications: FCC Needs to Improve Performance Management and Strengthen Oversight of the High-Cost Program
- GAO-08-633, June 13, 2008
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 68 pages) Accessible Text Recommendations (HTML)
- Telecommunications: Challenges to Assessing and Improving Telecommunications For Native Americans on Tribal Lands
- GAO-06-189, January 11, 2006
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 88 pages) Accessible Text Recommendations (HTML)
- Telecommunications: Greater Involvement Needed by FCC in the Management and Oversight of the E-Rate Program
- GAO-05-151, February 9, 2005
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 75 pages) Accessible Text Recommendations (HTML)
- FCC, Office of Inspector General, Initial Statistical Analysis of Data from the 2006/2007 Compliance Audits (Washington, D.C.: October 3, 2007)
