FCC Reforms Seek Efficient, Fair USF Contribution System

Continuing its overhaul and modernization of the Universal Service Fund (USF), the Federal Communications Commission launched reform of how funding is collected to support universal access to voice and broadband. The overarching goal of reform: ensuring delivery of voice and broadband communications to all Americans and achieving core FCC objectives of promoting broadband innovation, investment and adoption. The Notice seeks comment on the appropriate transition periods for reforms to allow service providers and consumers to adapt.

With reforms in place to contain spending, this Further Notice of Proposed Rulemaking examines ways to pay for USF more fairly and efficiently. USF is paid for by an assessment on the interstate and international revenues of carriers, such as long-distance revenues, as well as Voice over Internet Protocol (VoIP providers). Contributors may bill consumers and business customers for the cost. The Notice builds on the FCC’s efforts to limit the Fund’s burden on consumers and businesses while modernizing USF for the 21st century.

In particular, the Notice asks:

• What services and service providers should contribute to the fund
• How should contributions should be assessed -- on revenues, the number of connections, by phone numbers, or a hybrid approach
• How to reduce the cost, promote transparency and increase clarity of the contribution system
• Whether consumers could benefit from increased transparency and limitations on how providers recover their USF costs