The Universal Service Administrative Company (USAC) is an independent, not-for-profit corporation, located in Washington, DC. USAC was created in 1997 by the Federal Communications Commission to administer the Universal Service Fund. USAC's mission is to collect and distribute money for the USF and administer the four USF programs in accordance with the FCC's rules. USAC does not set or advocate policy. USAC works to protect the integrity of the fund, promote compliance among program participants, and provide information about the USF to Congress, the FCC, program audiences, and the general public. In all these tasks, USAC strives to provide efficient, responsible stewardship of the USF, a key national asset in making important telecommunications services available to consumers, health care providers, schools, and libraries throughout the United States.
Universal service is the policy of providing access to a baseline level of telecommunications services for all consumers in the United States. The policy originated with the Communications Act of 1934. The Telecommunications Act of 1996 (1996 Telecom Act) expanded the scope of universal service from individuals to include rural health care facilities, schools, and libraries.
The goals of Universal Service, as mandated by the 1996 Telecom Act, are: • To promote the availability of quality services at just, reasonable prices. • To increase access to advanced telecommunications services throughout the country. • To advance the availability of such services to all consumers, including those in low-income, rural, insular, and high-cost areas at comparable rates to urban areas.
The Universal Service Fund (USF) is money collected from telecommunications companies and dedicated to fulfilling the goals of universal service. Under the authority of the 1996 Telecom Act, the Federal Communications Commission (FCC) created the USF as well as the Universal Service Administrative Company (USAC), the organization charged with administering the USF. Telecommunications companies make contributions to the USF based on revenues gained from providing international and interstate calling services.
The purpose of the USF is to enable access to telecommunications services for all U.S. consumers. A principle of universal service holds that such access helps ensure that all U.S. residents can participate fully in the opportunities available to them in American society. In an increasingly networked, technology-intensive world, widespread access to telecommunications services is a key to national prosperity, well-being, and safety.
As required by the 1996 Telecom Act, all telecommunications carriers providing international and interstate service make contributions to the Universal Service Fund. Consumers may notice a "Universal Service" line item on their telephone bills. This line represents a charge by a telephone company to recover its mandated contributions to the USF. USAC collects these contributions and then allocates the proceeds to the four USF programs: High Cost, Low Income, Rural Health Care, and Schools and Libraries.
Paying into the USF (Collections): All telecommunications carriers that provide international and interstate service make contributions to the USF. The amounts of these contributions are determined by projections of the aggregate demand for USF support, which USAC submits each quarter to the FCC. The FCC reviews these projections and determines the percentage of international and interstate revenues that carriers must pay into the fund.
Paying out of the USF (Disbursements): USAC allocates money from the USF to fund the High Cost, Low Income, Rural Health Care, and Schools and Libraries programs. Entities eligible for support from these programs submit information to USAC for processing and evaluation, leading to disbursement of USF support to those approved for funding.
High Cost Program – ensures consumers in all regions across the nation have access to and pay rates for telecommunications services that are reasonably comparable to those in urban areas.
Low Income Program – commonly known as Lifeline and Link Up, provides discounts that make basic, local telephone service affordable and helps more than 8 million low-income consumers nationwide stay connected.
Rural Health Care Program – provides reduced rates to rural health care providers for telecommunications and Internet services so they pay no more than their urban counterparts for the same or similar telecommunications services.
Schools & Libraries Program – commonly referred to as E-rate, provides affordable telecommunications and Internet access services to connect schools and libraries to the Internet. This support goes to service providers that provide discounts on eligible products and services to eligible schools, school districts, libraries, and consortia of these entities.