Austin News

A new report by the Government Accountability Office (GAO) highlights rising costs and weak oversight of the Universal Service Fund (USF) by the Federal Communications Commission (FCC). The findings support concerns raised by U.S. Senate Commerce Committee Ranking Member Ted Cruz (R-Texas), who has called for greater Congressional oversight of the USF.

The GAO report, requested by Sen. Cruz, reveals that the Universal Service Administrative Company (USAC), which operates USF-funded programs aimed at expanding high-speed Internet access, has seen a 27.5% increase in operational costs over the past five years. In 2023, USAC's expenses reached nearly $248 million, almost half of the FCC's annual budget of $514 million. These administrative costs have risen from 2.2% in 2018 to 3% in 2023, surpassing Congress' typical 2% cap for administrative expenses.

Sen. Cruz stated: "These findings underscore my concerns about USF’s history of waste, fraud, and abuse, and the serious transparency and performance failures of its administrator, USAC." He added that the GAO report is timely given ongoing legal challenges, including a recent Fifth Circuit ruling that deemed the USF’s structure an unconstitutional delegation of Congress’ taxing power.

The GAO report criticizes the FCC's limited oversight of USAC's financial management. Although responsible for regulating USAC, the FCC has minimal control over how resources are allocated. Budget approvals rest with the USAC Board, which requires a two-thirds majority vote to make any modifications. The FCC does not hold a seat on this board, further diminishing its influence over decisions.