The FCC released a public notice reminding all eligible telecommunications carriers (ETCs) receiving high-cost Universal Service Fund (USF) support that such support may be used only for the intended purposes of maintaining and extending communications service to rural, high-cost areas. Any misuse of funds may lead to recovery and/or suspension of funding and other enforcement actions, including prosecution under the False Claims Act. The FCC already requires annual ETC certifications that high-cost support has been and will be used only for intended purposes. Though ETCs are permitted to recover a portion of their costs relating to corporate operations, such expenses must relate to the provision, maintenance, and upgrading of facilities and services for which the support is intended and not for such expenditures as personal travel, entertainment, alcohol, contributions, gifts, or sponsorships. Some commissioners chimed in with separate statements. Commissioner Pai cited the case of ETC Sandwich Isles Communications, whose now-federally-convicted owner apparently used the company to fund a number of personal and family expenses such as massages, vacations and homes.
