USF Contribution Factor Dips to 21.2%

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The universal service fund (USF) contribution factor for first quarter of fiscal year (FY) 2020 has been announced at 21.2 percent. This is a drop from the record-high of the 25 percent contribution factor currently in place for 4Q FY 2019 and continues to surpass 20%, which occurred for the first time in late 2018. The quarterly contribution factor is calculated based on the ratio of projected USF costs to contributors’ projected end-user telecommunications revenues. Projected revenues for 1Q 2020 are forecasted at around $11.13 billion, which is slightly higher than the $11.017 billion projected for 4Q FY2019. On the whole, revenues from voice services continue to decline though the USF contribution base remains unadjusted.

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