“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 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?
All telecommunications companies that provide service between states must contribute to the Universal Service Fund.
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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 FCC’s Web site, www.fcc.gov, to see the current Contribution Factor.