USAC Reports Little Change in Q3 Funding Projections

WASHINGTON, May 7, 2026 – Consumers’ Research renewed its push Friday to dismantle the federal Universal Service Fund as new third-quarter projections showed the multibillion-dollar broadband subsidy system continuing to operate at roughly the same scale as earlier this year.

In third-quarter 2026 funding projections, the Universal Service Administrative Company projected a consolidated budget of $65.82 million, a figure largely consistent with the $65.67 million projected in its second-quarter filing submitted in January.

Despite the stable projections, Consumers’ Research filed comments with the FCC arguing the USF’s funding mechanism is unlawful and should be eliminated.

In its Q3 2026 projections, USAC outlined funding needs which include $18.33 million for rural broadband deployment, $20.28 million for low-income communications subsidies, $20 million for schools and libraries support, and $7.21 million for rural healthcare.

USAC’s latest filing is expected to feed into the FCC’s next quarterly contribution factor calculation later this quarter. 

The latest comments from Consumers’ Research reflect a years-long legal and regulatory campaign against the modern Universal Service Fund system, even after the group lost a major Supreme Court challenge in June 2025.

Consumers’ Research has argued repeatedly that the federal government unlawfully delegated taxing authority to the FCC and improperly allowed USAC, a private nonprofit, to help administer the contribution system.

The Supreme Court rejected those arguments last year in FCC v. Consumers’ Research. Despite the ruling, the group has continued filing objections before the FCC and advancing additional legal theories tied in part to a dissent written by Justice Neil Gorsuch.

The broader fight comes as the Universal Service Fund faces mounting financial pressure tied to its shrinking contribution base. 

The fund is primarily supported through assessments on interstate and international telecommunications revenues, but the traditional voice-revenue base has steadily declined for years as consumers move away from legacy telephone services. 

Last year, the contribution base fell more than 47 percent compared to 2015 levels, helping push contribution factors to record highs.

The issue has fueled growing debate in Washington over whether lawmakers or regulators should expand USF contributions to broadband internet providers or large technology companies instead of relying primarily on traditional telecom revenues.