The Tangled Web of E-Rate

THE TANGLED WEB OF E-RATE
[SOURCE: Government Computing News, AUTHOR: Wilson P. Dizard III]
A look at the Universal Service Administrative Company and its murky legal status. The Federal Communications Commission created USAC to receive project applications, rate them and disburses E-rate money. The nonprofit also administers programs to subsidize telecommunications in high-cost and low-income areas, and rural health care facilities. USAC itself is neither fish nor fowl. Under its own bylaws and FCC regulations, it is barred from making policy decisions or interpreting the program’s law and regulations. The Government Accountability Office cited an analysis by the FCC inspector general in May 2004 stating that the foggy distinction between the commission’s regulations and USAC’s procedures weakens the program and hinders oversight. For example, the FCC has a policy of allowing USAC to implement procedures, which the Commission later codifies in regulations. That codification policy raises the question of whether the FCC or USAC itself is actually setting program policies, GAO said in a February 2005 report. Only now, 10 years after Congress established the E-Rate program and nine years after the FCC created the company, is the commission thoroughly evaluating which federal laws apply to the nonprofit corporation.
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