Universal Service Fund Contribution Factor to Hit 37% in Q2
Lawmakers and experts say the USF funding mechanism is unsustainable and outdated.
WASHINGTON, March 19, 2026 – The Universal Service Fund’s (USF) contribution factor will likely be 37 percent for the second quarter of 2026, down slightly from Q1 and its record high in 2025.
The contribution factor is the amount of interstate and international voice revenue telecom companies pay per year, which is about $8 billion. For Q2, USF programs will need $2.02 billion to operate.
The Federal Communications Commission announced the new contribution factor, proposed by the Universal Service Administrative Company, on Monday. USF has funded and continues to fund low-income households and broadband in rural communities, schools, libraries and health care centers.
The current contribution factor is 37.6 percent, and the record high was 38.1 percent in Q4 of 2025. USF’s funding process is generally understood to be unsustainable and outdated, and lawmakers have been working for years to modernize it.
Aide who were involved in helping pass the Telecommunications Act of 1996, the law that officially wrote universal service into federal statute, said one of the largest problems in the act has been USF’s funding mechanism.
Gina Keeney and John Windhausen, two staff architects of the Telecom Act, discussed this issue at the FCC’s 30th Anniversary of the 1996 Telecommunications Act Webinar on Tuesday.
Keeney said the funding process “needs to be revised,” and hopes this can get done soon, especially because she doesn’t see this as a partisan issue.
“The funding mechanism does need to be fixed, because it’s not sustainable the way it is right now,” Windhausen said. “That could lead to some greater contribution from the online services platform companies, and the reason that you think of them is they’re getting enormous benefits out of deploying broadband to every consumer.”
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