Universal Service Contribution Factor Surpasses 20% for the First Time, Highest Rate Ever

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The proposed Universal Service contribution factor will exceed 20%. It will be 20.1% for the fourth quarter of 2018, according to a new Federal Communications Commission public notice. An FCC spokesperson confirmed that it is the highest ever. And it means that just over one-fifth of every dollar that users spend on interstate and international telecom services (essentially long-distance voice services) will go toward the Universal Service Fund (USF) program. The USF contribution factor has been creeping up for years. Back in 2012, the contribution factor had reached a then-whopping 17.4%. This situation has occurred, even though the FCC has essentially capped the budget for all four Universal Service Fund (USF) programs, because the revenues that carriers collect from voice services have been declining. At one time the USF was primarily a voice-focused program but as it has transitioned over the years to focus on broadband, the contribution base has not been adjusted accordingly.


Universal Service Contribution Factor Surpasses 20% for the First Time, Highest Rate Ever