Informational Notice to All Universal Service Fund Contributors, Beneficiaries, and Service Providers

Effective October 1, 2004, USAC will implement new collections and disbursement procedures as a result of further implementation of the Federal Debt Collection Improvement Act of 1996 (DCIA) by the Federal Communications Commission (FCC). The new rules, codified at 47 C.F.R. Parts 0 and 1, contain specific provisions at §§ 1.1112, 1.1116, 1.1161, 1.1167, and 1.1910 and include a rule commonly referred to as the "Red Light Rule." Under the Red Light Rule, USAC will not disburse any Federal benefits to an entity that shares the same taxpayer identification number (TIN) as an entity that has delinquent debt owed to the Commission or its reporting components until such debt is paid, formally appealed, or until other arrangements, satisfactory to the FCC, are made for payment. For Red Light Rule purposes, "entity" includes contributors, beneficiaries, or other organizations or individuals who are delinquent to the USF.

USAC will coordinate closely with the FCC and with the administrator of the Telecommunications Relay Services Fund (TRS) and the Billing and Collections Agent, the North American Numbering Plan Administrator, and the Pooling Administrator for North American Numbering Plan Administration (NANPA. The FCC has determined that entities with any unpaid delinquent obligations to the FCC or to any of these funds are subject to the Red Light Rule.

USAC, the FCC, and the other fund administrators, are committed to collecting, on a timely basis, all outstanding debts. A debt or claim by the government is delinquent if the full amount has not been paid by the date specified in the initial written demand for payment. A written demand for payment includes an advance billing notice, or monthly invoice, with a specified payment due date. With respect to the Universal Service Fund (USF), any entity who owes money to the USF will be considered delinquent if payment is not made by the due date specified on the monthly invoice. When an entity's account becomes delinquent, that entity, as well as any other entity with a Service Provider Identification Number (SPIN) associated through a shared TIN, will be considered in "red light" status. USAC will not make any disbursements to the associated SPIN or SPINs until the delinquency has been satisfied by the entity or until arrangements for payment, satisfactory to the FCC, have been made, such as entering into an approved payment plan. USAC will notify the FCC and the other supporting funds on a daily basis of all TINs that are in red light status. Any pending benefits to entities associated to this TIN will be withheld. Delinquent entities shall receive a notice that details the operation of the Red Light Rule and that requires payment or satisfactory proof that payment has already been made. Entities shall have 30 days from the date of that notice to pay the delinquency or make other arrangements, satisfactory to the FCC, for payment. Failure to do so will result in the dismissal of any pending request before the FCC, and the initiation of further debt collection efforts.

USAC will receive red light status information from the FCC and the other funds on a daily basis and will withhold any pending disbursements to entities associated with a delinquent TIN. Until USAC is notified by the FCC or the other funds that the debt has been satisfied, no pending disbursements will be issued.

USAC may also offset delinquent debt against pending disbursements. If an entity is delinquent and a payment is pending to an entity sharing the TIN of the delinquent entity, USAC may apply the amount of any pending disbursements towards the delinquent balance.

At the time that a disbursement is held because an entity is in red light status, USAC intends to send the entity and/or Service Provider an e-mail notification. If USAC uses a pending disbursement to offset a USF delinquency, USAC intends to notify the delinquent entity and/or Service Provider.

In order to avoid losing benefits from the USF and the FCC, USAC encourages all entities to pay invoices no later than the due date.

For additional information, please refer to the FCC's public notice published on September 8, 2004.

Red Light Rule Effective November 1, 2004

Effective November 1, 2004, USAC will follow new collections and disbursement policies when it implements the "Red Light Rule." Under the Red Light Rule, USAC will not disburse any Federal benefits to an entity that shares the same taxpayer identification number (TIN) as an entity that has delinquent debt owed to the Commission or its reporting components until such debt is paid, formally appealed, or until other arrangements, satisfactory to the FCC, are made for payment. For Red Light Rule purposes, "entity" includes contributors, beneficiaries, or other organizations or individuals who are delinquent to the USF.

For additional information regarding the Red Light order, please refer to the public notice on the FCC's website.