USF Contribution Factor Remains Steady at 16.6 Percent

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The FCC’s Office of Managing Director has announced that the proposed universal service contribution factor for the second quarter of 2014 will be 0.166 or 16.6 percent.  This is a negligible increase from the 16.4 percent factor that was used for the first quarter of 2014.  Certain telecommunications providers apply the contribution factor to their end-user 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 second quarter 2014 projections of support demand for all four portions of the USF: $573.85 million for the Schools and Libraries program, $57.23 million for the Rural Health Care program, $1.125 billion for the High Cost program, and $421.35 million for the Low Income program.  USAC predicts that the total demand and administrative expenses for the USF in the second quarter of 2014 will be $2.251 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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