California Regulators Raise State Universal Service Surcharge
Small monthly fee that funds broadband and phone assistance programs will rise 15 cents per line.
July 2, 2026 – California regulators voted unanimously Thursday to raise a small monthly fee that helps fund phone and broadband assistance programs across the state.
California Public Utilities Commission commissioners voted 3-0 to raise the surcharge added to state residents’ phone bills by 16.6%, from $0.90 to $1.05 per access line, effective September 1, 2026. The fee supports broadband affordability programs, rural telecom infrastructure subsidies, and services for Californians with disabilities.
This increase comes after regulators deliberately lowered the fee from $1.11 to $0.90 in 2025 to draw down excess balances in the same programs. Officials now say the lower rate is no longer sufficient to sustain projected spending needs in fiscal year 2026–2027 while maintaining a target 25 percent reserve across programs.
CPUC’s universal service surcharge will generate roughly $675 million per year in revenue at the rate of $1.05 per month per access line. Based on an estimated 53.6 million telephone access lines statewide, the surcharge will produce approximately $56 million each month.
The surcharge revenue is split among six long-running universal service programs, but overwhelmingly flows toward two priorities: affordability and infrastructure expansion.
The largest share, 64.5 percent, goes to the California LifeLine Program, which subsidizes discounted phone and broadband service for qualifying households and remains the state’s primary tool for affordability support. Approximately 1.79 million Californians participate in the program, according to CPUC.
Another 21.5 percent is allocated to the California Advanced Services Fund, which is the state’s main broadband deployment program, financing infrastructure construction, regional planning and coordination, and other initiatives intended to expand high-speed internet access, particularly in unserved and underserved areas.
The CPUC recently allocated $18 million from the Fund for grants for fiber projects in rural Northern California that will connect 460 homes in unserved areas.
A smaller but still significant portion of the surcharge revenue, 8.59 percent, supports California Connect – also known as the Deaf and Disabled Telecommunications Program, or DDTP – which funds specialized communications equipment and relay services for individuals with disabilities.
The remaining 5.39 percent goes to California High-Cost Fund-A, which helps subsidize basic telephone service in rural areas where costs are high and rate parity would otherwise be difficult to maintain.
Two of the six programs, the High-Cost Fund-B and the California Teleconnect Fund, currently receive no new surcharge revenue because they are operating from existing reserves sufficient to cover near-term needs.
The CPUC has also opened a separate order to consider whether to adopt enforceable service quality standards for wireless carriers, including mobile reliability and coverage requirements.
The proceeding includes upcoming public participation hearings scheduled for July 15 and July 23, where commissioners will hear public input on proposed changes.
