Why is there a USF Fee or Tax on my bill? Long distance companies used to make money off of your USF Fee which is an FCC mandated fee that goes to schools, roads etc... in your community. AT&T used to charge 11.5% and MCI used to charge 12.3% for something FCC used to charge them 5% for. Since these companies were making a ton of money, off of what Public thought was a mandated fee, FCC just changed rule so that all telephone companies are required by law to charge same amount, and give it all to FCC. Read below to find out what all USF is used for.
"We also emphasize that carriers may not mark up federal universal service line-item amounts above contribution factor. Thus, carriers may not, during fourth quarter of 2003, recover through a federal universal service line item an amount that exceeds interstate telecommunications charges on a customerís bill times 9.2%." Copied from: 4th Quarter USF Fee Contribution Factor
Background: The Federal Universal Service Fund "The Federal Communications Commission (FCC) and Congress recognize that telephone service provides a vital link to emergency services, government services, and surrounding communities. To help promote telecommunications service nationwide, FCC, as directed by Congress, developed Federal Universal Service Fund. There are four components to Federal Universal Service Fund. They are:
Low-Income. This program provides telephone service discounts to consumers with qualifying low-incomes.
High-Cost. This program provides financial support to companies that provide telecommunications services in areas of America where cost of providing service is high.
Schools and Libraries. This program helps to ensure that nationís classrooms and libraries receive access to vast array of educational resources that are accessible through telecommunications network.
Rural Health Care. This program helps to link health care providers located in rural areas to urban medical centers so that patients living in rural America will have access to same advanced diagnostic and other medical services that are enjoyed in urban communities.
Who is Required to Contribute to Universal Service Fund? All telecommunications companies that provide service between states must contribute to Universal Service Fund.
Under FCC rules, all telecommunications companies that provide service between states must contribute to Universal Service Fund.