Why is there a USF Fee or Tax on my bill? by :
David Mcdonough
"We also emphasize that carriers may not mark up federal universal service line-item amounts above the contribution factor. Thus, carriers may not, during the fourth quarter of 2003, recover through a federal universal service line item an amount that exceeds the interstate telecommunications charges on a customer’s bill times 9.2%." Copied from: 4th Quarter USF Fee Contribution Factor Background: The Federal Universal Service Fund Low-Income. This program provides telephone service discounts to consumers with qualifying low-incomes. High-Cost. This program provides financial support to companies that provide telecommunications services in areas of America where the cost of providing service is high. Schools and Libraries. This program helps to ensure that the nation’s classrooms and libraries receive access to the vast array of educational resources that are accessible through the telecommunications network. Rural Health Care. This program helps to link health care providers located in rural areas to urban medical centers so that patients living in rural America will have access to the same advanced diagnostic and other medical services that are enjoyed in urban communities. Who is Required to Contribute to the Universal Service Fund? Under FCC rules, all telecommunications companies that provide service between states must contribute to the Universal Service Fund. In the past, only long distance companies paid fees to support the Federal Universal Service Fund. In 1996, Congress passed a law that expanded the types of companies contributing to Universal Service. Currently, all telecommunications companies that provide service between states, including long distance companies, local telephone companies, wireless telephone companies, paging companies, and payphone providers, are required to contribute to the Federal Universal Service Fund. How is the Amount a Company Pays to the Universal Service Fund Determined? The Contribution Factor changes each quarter of the year, depending on the needs of the Universal Service Fund and the consumers it is designed to help. Because the Contribution Factor will increase or decrease, depending upon the projected needs of the Universal Service Fund, the amount owed to the Fund by each affected telecommunications company will also increase or decrease accordingly. Different events, such as changes in demand for support or FCC regulatory action, may result in changes in the Contribution Factor. For example, increased demand for a particular Universal Service program may result in an increase to the Contribution Factor, but such increase might be offset by decreased demand for a different program or a decision to credit back to carriers any unused balances that remain in the Fund. Does the FCC Require That Phone Companies Recover Their Universal Service Contributions From Their Customers?
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