Rural Health Care

The Federal Communications Commission's Office of Managing Director (OMD) announced that the proposed universal service contribution factor for the fourth quarter of 2026 will be 0.42 or 42.0 percent. The FCC's Wireline Competition Bureau (WCB), in consultation with the OMD, instructs the Universal Service Administrative Company (USAC) to apply $69 million in unused funds to offset the Schools and Libraries program demand and $56 million in unused funds to offset the Rural Health Care program demand.

In its August meeting, the Federal Communications Commission adopted a Notice of Proposed Rulemaking titled Maximizing Efficiencies in Universal Service Administration Company that looks at changing the rules governing USAC, the Universal Service Administration. USAC is a non-profit corporation that was formed by the FCC after passage of the Telecommunications Act of 1996, which created the Universal Service Fund.

A new "consensus-driven roadmap" on the future of the Universal Service Fund argues that universal service should be understood as an ongoing responsibility, not a goal to achieve, and offers six principles for Universal Service Fund reform.

The Future of Universal Service Reform Task Force chaired by, Mignon Clyburn and Rachelle Chong, was convened to explore how the nation’s universal service policies should evolve to meet the communications needs of the twenty-first century. Participants represented a broad range of perspectives, including consumer advocates, industry representatives, education and health care stakeholders, public interest organizations, and policy experts.

In July, we summarized the Federal Communications Commission's draft Third Further Notice of Proposed Rulemaking and Order in its long-running Promoting Telehealth in Rural America proceeding. The Federal Communications Commission adopted that item on August 6, 2026, and released the final version on August 7. The bulk of what we wrote in July still holds.

The Federal Communications Commission adopted a proposal to strengthen the management and administration of the Universal Service Fund (USF) and the FCC’s oversight of the Universal Service Administrative Company (USAC). The proceeding builds on a prior inquiry into improving USAC’s administration of the USF and would launch a comprehensive review to ensure that funds are used for their intended purpose and the administration of those funds is efficient, fair, and cost-effective.

The Federal Communications Commission proposed reforms to improve the efficiency and effectiveness of its Rural Health Care (RHC) Program.

Judges probed the role of the $8 billion-per-year Universal Service Fund and its administrator. Conservative nonprofit Consumers’ Research is challenging the Federal Communications Commission program again, after a defeat at the Supreme Court in 2025. USF supports building and maintaining rural broadband networks, plus voice and internet discounts for low-income households, schools, and healthcare centers.

The Universal Service Administrative Company (USAC) projects a consolidated budget of $68.06 million for the federal Universal Service Support Mechanism in 4Q2026. Direct costs for all support mechanisms total $30.53 million. Joint and common costs (including billing, collection, and disbursement activities) total $37.53 million. Universal Service Support Mechanisms include High Cost, Low Income, Rural Health Care, Schools and Libraries, and Connected Care Pilot. 

On July 16, 2026, the Federal Communications Commission (FCC) released a draft Third Further Notice of Proposed Rulemaking (FNPRM) and Order in its long-running Promoting Telehealth in Rural America proceeding (WC Docket No.