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Netted and Withheld Disbursements

Netted and Withheld Disbursements

USAC is required to net or withhold payment to entities in accordance with the Debt Collection Improvement Act (DCIA). All contributors, service providers, and applicants are subject to action pertaining to delinquency and the DCIA. Actions taken under the DCIA are also known as actions under the Red Light Rule.

Netted Payments

If an entity is delinquent and in Red Light status, when possible, USAC will apply any disbursement support to the delinquent universal service obligation until the delinquency is cured. This may cause partial, full, or multiple disbursement payment(s) to be netted against the delinquent amount, depending on the amount of the disbursement as related to the amount owed.

Netting of disbursement payments occurs for the High Cost program, Lifeline program, Rural Health Care program, and for Service Provider Invoice (SPI) payments in the Schools and Libraries (E-Rate) Program. USAC does not net against E-Rate program Billed Entity Applicant Reimbursement (BEAR) payments and will withhold payments as discussed further below.

Note: Netting will only occur if entities indicate on their FCC Form 498 that they allow netting.

Withheld Payments

If an entity is delinquent and in Red Light status, USAC is obligated to withhold payment of universal service disbursements until the debt has been satisfied. These types of debt can include:

  • Debt owed to the Federal Communications Commission (FCC);
  • Debt owed to other programs such as Telecommunications Relay Service (TRS), Local Number Portability (LNP), North American Number Plan (NANP), and others;
  • Debt owed to the United States Department of Treasury (U.S. Treasury);
  • Cash recoveries for program rule violations; and
  • Other debt in accordance with the DCIA.

In all cases, payments that are either netted or withheld due to delinquency do not alleviate the service provider’s obligation to pass or remit payments to applicants in accordance with the program rules. To check your current FCC Red Light status, please use the FCC Red Light Display (RLD) system.

Right to Dispute

Service providers may file a dispute if they believe there was an error. As a first step, entities may file a dispute regarding the action with USAC.

Parties can choose to file an appeal if they disagree with the dispute resolution, or to file an appeal without filing a billing dispute. Please refer to the appeals procedure for additional information.