Sunday, February 6, 2005

Consumer Groups Submit USF "Fair Share Plan" to the FCC

A group of consumer organizations called the "Keep USF Fair Coalition" has filed a "Fair Share Plan" for Universal Service Fund (USF) collection with the FCC.

The FCC is considering changes to the way it collects money for the USF. Currently consumers pay a percentage of their long distance service bill each month. The FCC is considering switching to a monthly flat fee based on telephone numbers.

The coalition argues that under the current revenue system, high volume long distance users pay the most, while those who use less pay less. It believes the new system under consideration would shift the burden of paying for Universal Service to those who use the system the least.

The "Fair Share Plan" proposes to expand the USF contribution base to include all revenues derived from telecommunications, including services using VoIP. It proposes to establish a contribution factor cap to be applied to the revenue-based approach; carriers would still be assessed based on revenues up to that cap amount, and would still have the right to charge their end users a USF recovery charge not to exceed the percentage they are charged. The balance of the funds needed to support USF would come from a numbers-based charge. Another plan under consideration, the 50/50 Plan would use numbers to recover one-half of the total USF, while with the "Fair Share Plan's" numbers component would recover only the residual amount needed to meet the demands of the fund, ensuring that the funding burden is not placed on those least able to contribute at higher levels -- low-volume, elderly, rural, minority, disabled, and low-income residential consumers.

  • Every year, the nation's universal service fund (USF) pays out approximately $673 million for low-income programs and about $3.0 billion to support high-cost rural services. There are additional programs to provide Internet access to schools and libraries, as well as to support rural health initiatives. The USF is paid for by taxes to interstate switched access minutes, which are now in rapid decline.