Why is there a USF Fee or Tax on my bill? Long distance
companies used to make money off of your USF Fee which is an FCC
mandated fee that goes to schools, roads etc... in your
community. AT&T used to charge 11.5% and MCI used to charge
12.3% for something the FCC used to charge them 5% for. Since
these companies were making a ton of money, off of what the
Public thought was a mandated fee, the FCC just changed the rule
so that all telephone companies are required by law to charge
the same amount, and give it all to the FCC. Read below to find
out what all the USF is used for.
"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 customerâ™s bill times 9.2%." Copied from: 4th Quarter USF Fee
Contribution Factor
Background: The Federal Universal Service Fund "The
Federal Communications Commission (FCC) and Congress recognize
that telephone service provides a vital link to emergency
services, government services, and surrounding communities. To
help promote telecommunications service nationwide, the FCC, as
directed by Congress, developed the Federal Universal Service
Fund. There are four components to the Federal Universal Service
Fund. They are:
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 nationâ™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? All telecommunications companies that provide service
between states must 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? Telecommunications companies must pay a
specific percentage of their interstate and international
revenues into the Universal Service Fund. This percentage is
called the Contribution Factor. You can go to the FCCâ™s Web
site, www.fcc.gov, to see the current Contribution Factor.
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? The
FCC does not require telecommunications companies to recover
their Universal Service contribution from their customers.
Companies that do choose to recover their contributions from
customers may do so in different ways, however, they may not
shift more than an equitable share of the contribution to any
customer or group of customers. The actual percentage or fee
that a company recovers from its customers may be different from
the Contribution Factor, and may vary from company to company.
If the contribution factor increases, not all companies will
adjust the fees they charge customers in the same way."
Information Taken From www.fcc.gov
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