Part 3 of a 3 Part Series

In Part 2 of our series, we discussed on the need to aggressively attack the "friction" of manual operational costs by leveraging AI to solve the "Big Data" heavy lifting. We looked at how Telecom Carriers Use AI to Automate Workflows, Improve Circuit Design, and Reconcile Legacy Systems.

As we move into 2026, many companies are struggling with two other massive financial pressures:

• The soaring costs of Universal Service Fund (USF) contributions

• The high-stakes performance requirements of federal grant programs like RDOF and BEAD.

At ATS, we are seeing a clear divide between carriers that are struggling with manual reporting and those leveraging Artificial Intelligence (AI) to automate compliance. Here is how ATS uses the latest technologies to transform the way modern carriers handle these two big regulatory burdens.

Strategy 1 Stop Subsidizing the Competition

Use AI to slash USF contribution fees with an ATS traffic study

In 2026, the FCC’s Universal Service Fund (USF) contribution factor has hit a staggering 37.6%. For many VoIP and wireless carriers, this isn't just a line item; it’s a massive drain on the bottom line. When over a third of your interstate revenue is essentially "taxed" to fund the industry, every percentage point of misclassification is a direct hit to your margins.

Historically, carriers have taken the path of least resistance by using the FCC’s "Safe Harbor" rates (like the 64.9% default for VoIP). But safe harbor isn't designed to save you money—it’s designed to protect the regulator.

Here is how Artificial Intelligence and advanced data analytics are allowing savvy carriers to ditch the safe harbor and legally pay as little as possible in USF fees.

1. Moving Beyond "Safe Harbor" with AI Traffic Studies

The FCC allows you to report based on actual usage rather than the generic safe harbor percentage. However, manually analyzing millions of Call Detail Records (CDRs) to determine which calls are truly interstate is a Herculean task for most internal IT teams.

The Solution: AI agents can ingest massive datasets of CDRs and apply sophisticated jurisdictional logic in seconds. By accurately identifying intrastate vs. interstate traffic, AI-driven traffic studies frequently reveal that a carrier’s actual interstate usage is significantly lower than the 64.9% safe harbor.

Below is a comparison for a hypothetical mid-sized VoIP carrier with $5M in annual assessable revenue.

USF Contribution Comparison (Annualized)

2. Intelligent Revenue Allocation & Unbundling

Telecom billing is notoriously messy. Bundled services—where high-speed data, voice, and "value-added" features are sold for a single price—often lead to carriers over-reporting USF-assessable revenue because they can't clearly separate the components.

The Solution: Using the power of intelligent billing audits companies can review billing scenarios and "unbundle" these services ensuring you are only paying USF fees on the specific "telecommunications" portion of the bundle. Features like cloud storage, AI-driven security, or managed IT services can be legally excluded from the USF-assessable base.

3. Automated "De Minimis" Tracking

For smaller providers or those with complex subsidiary structures, there is a "De Minimis" threshold ($37,175 for 2026). If your assessable interstate revenue falls below this, your contribution is $0.

The Solution: AI monitoring tools can track your revenue in real-time across multiple entities. By intelligently managing traffic routing and service thresholds, AI can alert leadership if they are approaching the threshold, allowing for strategic decisions on traffic management that could save the company from a six-figure USF bill.

4. Audit-Proof Documentation

The biggest risk of "paying as little as possible" is a USAC audit. If you can't prove why your reported interstate percentage is lower than the safe harbor, you face massive back-payments and penalties.

The Solution: Intelligent traffic studies don’t just calculate the numbers; they build a Digital Audit Trail. Modern compliance platforms use the most advanced tools to generate statistically significant samples that proves your traffic study is accurate. When the auditor knocks, you don't give them a spreadsheet; you give them an unassailable data model.

The Bottom Line: Turn Compliance into a Financial Strategy

Paying the safe harbor rate is essentially a "convenience tax" that companies pay to take the easy way out of USF compliance. Safe Harbor is easy but it’s very expensive. By leveraging modern tools to conduct precise traffic studies and revenue allocation, carriers move from reactive reporting to strategic cost avoidance.

Strategy 2: Secure Your Funding

AI-Driven Performance Testing for CAF, RDOF, and BEAD

For recipients of CAF II, RDOF, and BEAD funds, the costs have shifted from "construction" to "compliance." With the FCC’s Rural Broadband Accountability Plan in full swing, failing a quarterly performance test can lead to support withholding of up to 25%.

How AI Acts as Your Compliance Shield:

• The "Shadow Test" Advantage: AI-driven agents perform continuous background monitoring. By analyzing real-time telemetry from ATS Stamper devices, the system identifies potential "fail nodes" (high latency or jitter) before the official quarterly testing window opens. More and more companies are performing these speed and latency tests on an ongoing basis, to be certain there will be no surprises when the quarterly test date rolls around.
• Peak-Hour Automation: FCC mandates require testing during peak usage hours (6:00 PM to 12:00 AM). AI processes autonomously manage the complex, time-aligned scheduling across multiple time zones, ensuring your tests happen exactly when required without manual oversight.
• The State-by-State "BEAD" Translator: With BEAD, you are reporting to individual State Broadband Offices (SBOs), each with potentially different rules. Slight differences in reporting requirements between states and federally funded programs can be a nightmare especially for companies who cross multiple jurisdictions. The most advanced processes serve as a "Regulatory Translator," by reformatting your raw performance data into the specific templates required by states.

The Bottom Line: Compliance as a Competitive Strategy

In 2026, compliance shouldn't be a cost center. By using AI to minimize what you pay into the USF and protect what you receive from grants, you are turning regulatory hurdles into a financial engine.

Is your network ready for the 2026 reporting crunch?

Contact ATS today for a USF Contribution Analysis or a Performance Measures Audit.