FCC to Increase Q4 Universal Service Fund Contribution Fee

WASHINGTON, September 11, 2024 – Federal fees on local phone bills are expected to rise during the last three months of 2024.

On Wednesday, the Federal Communications Commission said the fee on monthly telecommunications charges will rise to 35.8 percent in the fourth quarter, up from 34.4 percent in the current quarter.

This means that the agency will charge voice providers 35.8 percent of end-user revenues to support the $8.1 billion Universal Service Fund, which subsidizes broadband infrastructure service in rural areas, schools, health centers and libraries across the country.

The FCC adjusts its USF contribution factor four times per year on a quarterly basis, generally increasing the required contribution each quarter. 

The factor is calculated as a function of the total projected demand and expenses of USF programs, as outlined in a Wednesday FCC notice.

As the contribution factor has continued to rise, some experts have cast doubt as to its sustainability.  

Free Press Vice President of Policy Matt Wood, for example, has expressed concern that a higher USF contribution factor - in connection with more comprehensive USF programs - could shift the USF contribution burden towards individuals and families.

Likewise, FCC Chairwoman Jessica Rosenworcel mentioned in January that she had reservations about expanding the contribution pool to include broadband providers.

A group of lawmakers have worked on legislation to change the USF’s contribution base as traditional voice revenue continues to fall.

Legislators and the FCC alike have continued to disagree on where the agency should go to shore up additional funding for the USF.