USAC chief resigns after sharp criticism from FCC chairman about E-rate rollout

The CEO of the Universal Service Administrative Company, which administers the federal E-rate program, resigned last week after bearing the brunt of sharp criticism from his boss, Federal Communications Chairman Ajit Pai.

Chris Henderson, who was appointed in August 2014, oversaw a massive overhaul to the E-rate program, which subsidizes high-speed Internet and broadband connections to schools and libraries around the country. Vicki Robinson, who was vice president and general counsel of USAC since February 2016, will serve as acting CEO until a permanent replacement is found, according to officials.

She was appointed by the USAC board.

Pai, who was appointed in 2012 by former President Obama and elevated by President Trump, sharply criticized the rollout of the online E-rate Productivity Center. The EPC was supposed to be a new $19 million system that would provide schools and libraries with virtual portals to easily apply for federal funding. Pai wrote in a public letter to Henderson that, in fact, there were flaws that prevented the institutions from accessing funds.

“Despite
assurances from prior FCC leadership that these problems were being addressed, they appear to have
persisted, to the detriment of students, library patrons, and taxpayers across the country,” Pai wrote. “Things have not gone according to plan.”

Pai complained that the system, which was supposed to be fully operational by the opening of the 2016 filing window, is still not up and running, and legacy IT systems are still in use to complete critical processes. Pai also slammed that the costs attached to the project were heavily inflated and over budget, with $30 million so far spent on the E-rate Productivity Center – and it could balloon to more than $60 million, he wrote.

“USAC has failed to fulfill specific commitments made to applicants even as it rolled out EPC
system upgrades,” he wrote. “USAC has frequently failed to devise solutions for applicants, instead requiring
extensive FCC involvement, including from my office, to resolve problems.”

Pai voiced his full-throated support for the program, which benefits schools and libraries by providing crucial funds for internal connection upgrades, telecom services and Internet access in areas that need it most. Under former Commissioner Tom Wheeler, the program got a jolt of life when money for Wi-Fi service was added to the budget in 2015.

But Pai added that “the current state of affairs is unacceptable,” and demanded that USAC make the EPC system a priority.

As Henderson exited, the USAC board released a statement of support.

“During his tenure, Mr. Henderson led the company through a period of tremendous growth and change focused on enhancing program integrity and improving the stakeholder experience, as part of fulfilling the FCC’s universal service mission,” officials said in a statement. “The Board thanks Mr. Henderson for his leadership and wishes him continued success in his future endeavors.”

The current E-rate filing window is scheduled to close on May 11, but John Harrington, CEO of Funds for Learning, a company that helps school districts navigate the E-rate process, said the disruption in leadership is not likely to have an immediate effect on day-to-day operations.

Harrington, while acknowledging the working elements of the program, also criticized USAC’s slow-moving processes and said he hopes they go smoother in the future.

“USAC’s online system has caused unnecessary delays,” Harrington said. “The mission and framework of the E-rate program remain as vital and relevant as ever. Now is the time for the FCC and USAC to work together to create positive change in the administration of the E-rate program.”

Reach the reporter at corinne.lestch@edscoop.com and follow her on Twitter @clestch and @edscoop_news.