USF Contribution Factor Continues its Rollercoaster Ride
After two quarters of near-18 percent contribution factors, the Universal Service Fund’s quarterly contribution factor is declining again. For the third quarter of 2012, the USF contribution factor will decline to 15.7%. This two percent decline again demonstrates the volatility of the contribution factor. The change is due primarily to a $300 million increase in reportable revenues and a significant decline in Lifeline expenditures (presumably due to the Lifeline Reform Order).
But, as Commissioner Pai points out, a 15% USF contribution factor is hardly good news. The drumbeat is sounding for USF reform. We hope the current FNPRM will lead to a reduction in USF costs for carriers and their end users.