Contribution Factor Climbs To All-Time High of 18.2 Percent

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The FCC’s Office of Managing Director (OMD) has announced that the proposed universal service contribution factor for the first quarter of 2016 is 18.2 percent. It marks a new all-time high for the contribution factor, surpassing the previous high of 17.9 set in the first quarter of 2012. It also represents a 1.5 percent increase from the 16.7 percent rate that was used in the fourth quarter of 2015. OMD also announced that for the first quarter of 2016, the Universal Service Administrative Company (USAC) projects that it will collect $14.93 billion in total interstate and international end-user telecommunications revenues. USAC estimates that $2.277 billion will be needed to cover the Federal universal service support mechanisms’ total demand and expenses for the first quarter of 2016. If the Commission takes no action on the proposed contribution factor within 14 days, it will be declared approved.

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