USAC:

1999 Annual Report to Congress and the FCC

Milestones for 1997 – 1999

USAC, the Rural Health Care Corporation (RHCC) and the Schools and Libraries Corporation (SLC) were formed in September 1997. In order to reduce administrative costs and streamline the operations of the universal service support mechanisms, a reorganization plan was filed with the FCC and approved in November 1998. The reorganization brought each of the four universal service support mechanisms—the Schools and Libraries Program, the Rural Health Care Program, the High Cost Program, and the Low Income Program—fully within the aegis of USAC. The merger was completed on December 31, 1998, and today each of the programs is administered by USAC.

The High Cost and Low Income Programs were seamlessly transitioned to the new administrator. Over 1,300 carriers have received support from one or more of the components of the High Cost Program since January 1, 1998 (see the chapter on benefits for a breakdown of support by state).

The funds distributed through the Low Income Program have more than doubled as a result of the changes that were instituted on January 1, 1998, requiring both participation of all eligible telecommunications service providers and an increased level of federal support. As of December 31, 1999, the program is providing benefits to over 5 million low-income consumers in all 50 states, United States territories and the District of Columbia.

The Rural Health Care Program accepted its first program applications in May 1998. The FCC approved the audit of the Rural Health Care Program operations and internal controls, and authorized the administrator to begin issuing funding commitment letters beginning June 4, 1999. Additional highlights to date include:

Competitive bidding for program support services work in 1997, and consolidated competitive bidding process for program operations with the Schools and Libraries Program was initiated in late 1999
Funding commitments to rural health care providers reached one million dollar mark in October 1999
The FCC modified and improved the program, adopting most of USAC’s recommendations, in November 1999

Prior to SLC’s merger with USAC in 1998, the Schools and Libraries Program received a clean opinion from its independent auditor and a "green light" from the United States General Accounting Office. Schools and Libraries Program milestones include:

$1.75 billion of funding committed in Year One (January 1, 1998 - June 30, 1999), reaching nearly 80 percent of public schools, nearly 50 percent of libraries, and thousands of private schools
$1.96 billion of funding committed in Year Two (July 1, 1999 - June 30, 2000), increasing pub- lic school participation by 15 percent, providing stable support to libraries, and increasing pri- vate school participation by one third, as compared to Year One
Opening of Year Three filing window on November 10, 1999

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