USF Contribution Factor Again Tops 15%

Today the FCC announced the proposed universal service contribution factor for the fourth quarter of 2011. Based in large part on recently revised projections showing an increase in low income demand (largely due to prepaid wireless phones), the proposed contribution factor will rise nearly 1%, to 15.3%.

This marks the third quarter ever, but the second quarter this year, in which the USF contribution factor exceeded 15%. Although the USF factor is not fluctuating as much as it did last year, the fact that it has hovered around 15% all year continues to create significant compliance, litigation and reporting issues for telecommunications carriers. Carriers should closely review their methodologies for reporting USF revenues on the Form 499-A and for recovering USF contributions from end users. At a 15% contribution factor, the costs of over or under reporting USF make the effort worthwhile.

REMINDER: You can track the official USF contribution factor through the links in our Resource Center. Go to Universal Service Links” on the right hand side of the page.