May 2

May 2 USAC Files Estimated 3Q 2022 Universal Service Funding Requirements

Universal Service, USAC, USF, USF Contribution

May 2, 2022 – The Universal Service Administrative Company (USAC) has filed the Federal Universal Service Support Mechanisms Fund Size Projections for the third quarter of 2022.[1] The filing details the universal service fund’s (USF) total budget for 3Q 2022, which includes any costs that can be directly attributed to the High Cost, Low Income, Rural Health Care, and Schools and Libraries Support Mechanisms, as well as the Connected Care Pilot Program, and the projected administrative expenditures of each mechanism.

USAC’s data shows the following total projected 3Q 2022 funding requirements for each USF support mechanism:

High Cost Support Mechanism – $992.51 million (the 2Q funding requirement was $880.14 million, and the 1Q 2022 funding requirement was $1.04452 billion). The 3Q 2022 total funding requirement for the High Cost Support Mechanism was initially projected at $1.03792 billion, but was adjusted as follows: decreased by prior period adjustments of $62.54 million and increased by administrative costs of $17.13 million; resulting in a total projected 2Q 2022 funding requirement of $992.51 million.

Low Income Support Mechanism – $269.22 million (the 2Q 2022 funding requirement was $220.47 million, and the 1Q 2022 funding requirement was $137.51million). The 3Q 2022 total funding requirement for the Low Income Support Mechanism was initially projected at $287.13 million, but was adjusted as follows: decreased by prior period adjustment of $34.03 million and increased for administrative costs of $16.12 million; resulting in a total projected 3Q 2022 funding requirement of $269.22 million.

Rural Health Care Support Mechanism – $159.25 million (the 2Q 2022 funding requirement was negative $7.62 million, and the 1Q 2022 funding requirement was $11.72 million). The initial 3Q 2022 collection requirement of $159.43 million was decreased by a prior period adjustment of $0.18 million, resulting in a total projected funding requirement of $159.25 million.

Connected Care Pilot Program – $8.34 million (the 2Q 2022 funding requirement was $7.81 million, and the 1Q 2022 funding requirement was $9.21 million). The initial 3Q 2022 Connected Care Pilot Program collection requirement of $8.33 million was adjusted as follows: decreased by prior period adjustment of $0.10 million and increased by $0.11 million for administrative expenses, resulting in a total projected funding requirement of $8.34 million.

E-Rate Schools and Libraries Support Mechanism – $606.99 million (the 2Q 2022 funding requirement was $563.22 million, and the 1Q 2022 funding requirement was $637.95 million). The initial 3Q 2022 funding requirement of $593.30 million was decreased by a prior period adjustment of $7.27 million and increased by $20.96 million for administrative expenses, which resulted in $606.99 million

For its own consolidated budget, USAC projects total administrative costs of $61.60 million for 3Q 2022. This breaks out to $32.38 million in direct costs for all four support mechanisms, and $29.22 million in joint and common costs which include costs associated with billing, collection, and disbursement of universal service funds. This is an increase in administrative costs from the last two quarters (USAC projected consolidated budgets of $58.09 million for 2Q 2022 and $55.57 million for 1Q 2022).

The FCC will use the of the quarterly funding requirements for the four USF Support Mechanisms, the projected administrative expenses, and the USF contribution base amount to establish a quarterly USF contribution factor. Copies of USAC’s historical USF filings are available on its website.

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[1] Universal Service Administrative Company, Federal Universal Service Support Mechanisms Fund Size Projections For Third Quarter 2022, WC Docket Nos. 06-122; 05-337 and 03-109; CC Docket Nos. 02-6; 02-60; and 96-45 (May 2, 2022), https://www.fcc.gov/ecfs/search/search-filings/filing/1050277244188.