(Bloomberg) -- Regulators have begun moving almost $9 billion collected to subsidize phone and broadband service from a Bank of America account to what auditors call safer ground at the U.S. Treasury.
Federal Communications Commission Chairman Ajit Pai has begun shifting the Universal Service Fund money on advice from government auditors, who said keeping the money outside government coffers was risky, according to Mark Wigfield, an FCC spokesman.
The fund, which spent $8.8 billion last year, is financed by charges on the monthly bills of telephone users and helps pay for communications service to poor people and remote areas. One widely used program called Lifeline provides a $9.25 monthly subsidy toward the cost of service.
The change happened “in the dark of night last week,” Democratic FCC Commissioner Jessica Rosenworcel said in an emailed statement. She called it “a shame” that the agency is foregoing over $50 million in annual interest income that could be used to support rural broadband, remote medicine facilities and school connections.
Moving the fund “will cost recipients tens of millions of dollars a year” in foregone interest, Representative Frank Pallone, of New Jersey, the top Democrat on the Energy & Commerce Committee, and Representative Peter Welch, of Vermont, said in an emailed statement Thursday.
Management fees for the account amounted to $1.5 million annually in 2015, according to a report last year by the Government Accountability Office.
Auditors recommended moving the money “to better protect and manage this nearly $9 billion fund,” Wigfield said. He called the move part of Pai’s “overall push to protect and better manage the Universal Service Fund.”
A representative of Bank of America didn’t immediately respond to requests for comment.
©2018 Bloomberg L.P.