FCC USF Fee Factor Decreases from 31.8% to 29.1% for Q4 2021

The Federal Communications Commission released a public notice on September 10, 2021, announcing the proposed Universal Service Fund (“USF”) contribution factor for the fourth quarter of 2021 will be 29.1%, a nearly 2% decrease from the previous quarter’s 31.8%. 

At 29.1%, the Q4 USF contribution factor is nearly 4% lower than Q2 2021’s historically high point of 33.4%.  Yet the factor remains at historic levels, and the calls for reform of the USF contribution system are beginning to get louder and momentum is growing.  Just last week, as reported in our Client Advisory, three influential broadband trade groups released the USForward Report, which advocates for inclusion of broadband and wireless data revenue in the contribution base, concluding that the move would lower the contribution factor to 4% or below.

Any reforms of the USF contribution system, however, will likely take months — and potentially longer — to materialize in any meaningful way.  Therefore, the industry should anticipate the quarterly USF contribution factor remaining at stratospheric levels for the foreseeable future.   

If your company has any questions regarding the sky high USF contribution factor or would like to engage in a Communications Taxes & Fees “Optimization” to potentially minimize the economic impact of the onerous USF contribution costs and end user pass-through surcharges, please contact Jonathan S. Marashlian at jsm@commlawgroup.com.

We’ll leave you with some food for thought:

“If you aren’t OPTIMIZING your communication tax and regulatory fee billing, collection & reporting practices, then you (and your customers) are SUBSIDIZING the companies that are!”

ATTORNEY ADVERTISING DISCLAIMER: This information may be considered advertising in some jurisdictions under the applicable law and ethical rules. The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers