USF Contribution Factor Drops to 19.6% for Q2 2020

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The FCC’s Office of Managing Director (OMD) has released a Public Notice announcing that the proposed Universal Service Fund (USF) contribution factor for the second quarter (Q2) of FY2020 will be 0.196 or 19.6%.  This is the second consecutive quarterly drop in the USF contribution factor, which reached a record-high of 25.0% for 4Q 2019 and most recently 21.2% in Q1 2020.  The quarterly contribution factor is calculated based on the ratio of projected USF costs to contributors’ projected end-user telecommunications revenues.  The total projected telecommunications revenues (collected Interstate and International End-User) for Q2 2020 are forecasted at around $10.86 billion, which is slightly lower than the $11.12 billion for Q1 2020.  OMD also announced that the total projected program support for the four USF programs (High-Cost, Lifeline, Rural Health Care, and Schools and Libraries) will be $1.952 billion, which is a slight drop from $1.974 in Q1 2020.

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