Starting in February 2006, the ranges measured by the Envisat RA-2 altimeter have been biased significantly for long periods of time. The range bias is characterised by a relatively constant offset of about 5.6 meters, and an additional 1-cpr non-harmonic variation around the orbit with an amplitude of about 10-20 cm. The bias is caused by an anomalous operation of the Ultra Stable Oscillator (USO). Its frequency suddenly became biased by approximately 7 ppm plus a small variation around the orbit. This paper discusses how the USO bias can be modelled and corrected for. Also some speculations are made as to the cause of the anomaly.