The year 2000 has been challenging and successful for the Universal
Service Administrative Company (USAC). We continue to provide support
to connect everyone in the United States and its territories to the
modern tools of telecommunications at reasonable rates. USAC distributed
a record-breaking $4.4 billion to companies participating in the various
Universal Service Support Mechanisms serving high cost areas of the
country, low-income consumers, rural health care providers, libraries,
and schools.
The FCC entrusted USAC to implement several new or improved mechanisms
in 2000. USAC has successfully implemented those mechanisms, consistent
with FCC rules, in an efficient and effective manner.
We have continued to operate efficiently - 99 cents of every dollar
collected in 2000 was used to connect Americans to the telecommunications
network. USAC has increased its efforts to ensure program integrity
in several ways: (1) by establishing and maintaining a close working
relationship with the staff of the FCC Enforcement Bureau and the Office
of Inspector General; (2) by using statistical testing; (3) by conducting
audits of USAC, including beneficiary audits of all the programs; (4)
by implementing improvements recommended by independent auditors and
the United States General Accounting Office; and (5) by addressing complaints
or comments from program participants and service providers. USAC will
take additional steps in 2001 to ensure program integrity and prevent
against waste, fraud, and abuse.
USAC continues its efforts to increase operational efficiencies. We
combined the contracts for Rural Health Care and Schools and Libraries
program operation to achieve efficiencies and conducted a competitive
bidding process. As a result, the new contract will save approximately
25 percent of program costs over the next three years. We are in the
process of competitively bidding the billing, collection, and disbursement
work and will enter into a new contract in 2001. USAC has committed
to subject all major contracts to competitive bid and will continue
to do so in 2001.
We recognize the importance and value of the service providers who
work diligently to help ensure the success of all the support mechanisms.
There are over 13,000 service providers who are a vital part of the
process, and we will continue to work with them in an effort to make
improvements and increase efficiency.
Our applicants are also a critical part of the program. We continually
strive to provide assistance to them through various outreach efforts
aimed at successfully guiding them through the process, in compliance
with the rules. They provide valuable feedback and we are committed
to listening and acting on their suggestions.
The future will provide additional opportunities and challenges. We
have accomplished much, and have great plans for the future. For example,
we plan to have a more coordinated approach to enforcement and compliance,
including the expansion of our internal audit program, and we plan to
implement the decision of the FCC for a new high cost mechanism for
rural carriers.
We look forward to another successful year, and would again like to
thank the FCC and Congress for providing USAC with the opportunity to
help accomplish the universal service mission.
Sincerely,
