Red Light is the FCC rule that lets USAC withhold all Universal Service Fund disbursements from an entity, and any other entity sharing its taxpayer ID, once its account is one day delinquent on a debt owed to USAC. It stays in effect until the delinquency is resolved or an approved payment plan is in place.
How It Works
Red Light status is triggered the day after a payment due date is missed, one day delinquent is all it takes. At that point, the entity's Filer ID and all associated SPINs (498 IDs) go on Red Light status. Future Universal Service Fund disbursements are netted against the outstanding debt, and interest accrues daily at the U.S. prime rate plus 3.5 percent, under 47 C.F.R. ยง 54.713.
If the debt is still unpaid at 91 days delinquent, a further DCIA penalty of 6 percent annually applies retroactively to whatever portion is more than 90 days past due, and the full debt becomes eligible for transfer to the U.S. Treasury for collection, with the debtor responsible for Treasury's own administrative collection costs.
The rule, commonly called the Red Light Rule, comes from 47 C.F.R. Parts 0 and 1 (sections 1.1112, 1.1116, 1.1161, 1.1167, and 1.1910). It applies to any entity associated through a shared taxpayer identification number (TIN), not just the specific delinquent account. USAC emails the entity or service provider whenever a disbursement is held or netted because of Red Light status. (USAC: Late Payments, DCIA, Red Light)
This is exactly the consequence described on our COMAD page for an unpaid Commitment Adjustment Letter: a COMAD or RIDF action creates the debt, and Red Light is what happens if that debt goes unpaid.
What This Means for You
Applicants
An unresolved COMAD or RIDF debt doesn't just sit quietly. Once you're one day past the due date, USAC starts withholding and netting future disbursements against it, and the interest clock never pauses while you're deciding whether to appeal.
Service Providers
Red Light follows your taxpayer ID, not just the single SPIN with the delinquent balance. If your company operates multiple SPINs or subsidiaries under one TIN, a debt on one can freeze disbursements across all of them.
We've seen service providers get blindsided by Red Light on an entity they thought was unrelated to the one that actually owed money, simply because both shared a parent company's taxpayer ID. If your corporate structure includes multiple SPINs, it's worth knowing exactly which ones share a TIN before a delinquency on one becomes a disbursement freeze on all of them.
Common Questions About Red Light Status
What triggers Red Light status?
Being one day delinquent on a debt owed to USAC or the Universal Service Fund.
What happens once an entity is in Red Light?
Future disbursements are withheld and netted against the debt, interest accrues at the U.S. prime rate plus 3.5 percent, and after 91 days a further 6 percent annual penalty applies with eligibility for transfer to the U.S. Treasury.
Does Red Light affect only the delinquent entity?
No. Any entity associated through the same taxpayer identification number is also subject to it.
How do I get out of Red Light status?
Pay the delinquency in full, or enter a payment plan that USAC and the FCC find satisfactory.
Is Red Light the same as a COMAD?
No. A COMAD is what creates the debt in the first place, when a commitment was improperly made or funds were improperly disbursed. Red Light is what happens if that debt then goes unpaid.
Informational only, not legal advice. E-Rate procedures and forms can change by funding year. Confirm current requirements in the applicable USAC and FCC guidance.