Analysis: What the FCC didn't tell us about the USF audit

By many reports, the current FCC commissioners hoped to push through USF reform before the current administration left office, but they have not succeeded. It’s not out of question that the overblown audit analysis, and the bad PR it has generated for the USF program, could be the outgoing commission’s equivalent of removing the W key—or, as Frost & Sullivan program manager Pete Dailey speculated, “poisoning the well.”

In an email, FCC Inspector General Kent R. Nilsson declined to estimate the actual overpayment to the 85 companies. “We have initiated a process to analyze these results in more detail,” he wrote. But if the results for those companies ultimately end up anything like the estimates for the rest of the companies in the report, the actual overpayment is probably more in the range of $199 million, or between 4% and 5%.

Don’t get me wrong. Even if telcos were only overpaid by 1%, it’s still too much. USF recipients need to take the FCC charges seriously and respond promptly—and they shouldn’t wait for the FCC’s final audit results. After watching the impact of lax oversight on financial markets, the U.S. public doesn’t want to hear about any company getting away with not meeting regulations--and with Universal Service at risk, Independent telcos can’t afford the bad PR.

If you would like a copy of the Excel spreadsheet into which I input data from the late-November FCC report to calculate some of the figures cited above, please send an email to joanengebretson@cs.com.