USF Contribution Factor Dips to 15.7 Percent For Third Quarter 2014

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The FCC’s Office of Managing Director has announced that the proposed universal service contribution factor for the third quarter of 2014 will be 0.157 or 15.7 percent.  This is a nearly one percent decrease from the 16.6 percent factor that was used for the second quarter of 2014.  Certain telecommunications providers apply the contribution factor to their end-user interstate and international telecommunications revenues to determine the amount they must contribute to the universal service fund (USF).  Along with the proposed contribution factor, the Universal Service Administrative Company (USAC) has submitted the following third quarter 2014 projections of support demand for all four portions of the USF (not including administrative expenses or application of true ups): $585 million for the Schools and Libraries program, $57 million for the Rural Health Care program, $1.125 billion for the High Cost program, and $413 million for the Low Income program.  USAC predicts that the total demand and administrative expenses for the USF in the third quarter of 2014 after application of true ups will be $2.155 billion.  USAC projects that the total collected interstate and international end-user telecommunications revenues for the third quarter of 2014 will be $16.02 billion.  If the FCC takes no action on the proposed contribution factor within 14 days following its announcement, the rate will be declared approved.

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