Carriers Urge Retooled USAC Standard for Material Noncompliance
AT&T saw wide support from other carriers on its appeal of a decision by the Universal Service Administrative Co. (USAC), which found that the telco submitted inaccurate line count filings during an audit. USAC uses line counts to determine USF support for carriers. In separate comments last week, Verizon, Qwest, USTelecom and the Independent Telephone & Telecommunications Alliance urged the FCC to revise the quantitative standard that USAC used when it determined that three regional AT&T companies’ noncompliance with FCC rules was “material.”
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Under USAC guidelines, noncompliance is considered material if it results in a monetary impact of either 5 percent of funds disbursed or $100,000, whichever is less. But Qwest said the standard doesn’t account for the all sizes of carriers and the varying amounts of universal service funding they receive. “When the amount of support under review is in excess of $10 million, which can be the case for larger companies, a $100,000 materiality threshold equates to an error rate of less than 1.0%.”
The standard makes no sense for a company like AT&T, agreed USTelecom, because although each of the AT&T companies’s noncompliance amounts was more than $100,000, none exceeded 1.17 percent of overall disbursements. ITTA, which represents mid- sized companies, agreed the $100,000 threshold isn’t practical. “The threshold for material noncompliance should not be established by a static amount that offers no comparative analysis with the specific company’s USF receipts,” it said.
Meanwhile, Verizon said USAC should have accepted corrected line count information submitted by AT&T. Determining line counts is a complicated process, and it’s “inevitable that providers will sometimes need to correct or update data filed with USAC,” it said. “The Commission should encourage providers to self-correct data.”