Nebraska plans to limit Universal Service Fund outlays

The good news for telcos: Nebraska gave out $71 million in Universal Service Fund cash to 48 phone companies in the state last year. The bad? Regulators want to track more closely how it’s being spent.

Qwest, for example, received $32.6 million last year, ostensibly to offset its costs for providing service to low-income Nebraskans and in high-cost rural areas. Some of the money was used to help hospitals establish a statewide network. The state’s Public Service Commission said it doesn’t believe the money is being misspent, but it wants a more detailed accounting of where the money—which is funded through a 7 percent surcharge of phone and cellphone bills—is being spent.

Regulators haven’t set the caps yet, but they have approved the idea of caps, which would go into effect next year.

State Auditor Mike Foley, concerned about lack of USF oversight, said the new restrictions were a move in the right direction.

"When you see tens of millions of dollars flowing to telephone companies and a general lack of oversight ... you have to question where the money is going,” he said, “and whether it's serving customers or being channeled off for higher salaries."

For more:
- See the Associated Press report [1] on Forbes

Related articles:
FCC caps USF for now FCC report [2]
Nebraska exempts VoIP from USF USF report [3]