Carrier contributions to the Universal Service Fund will decline ...
Carrier contributions to the Universal Service Fund will decline 16.7 percent in Q1 2009, due mostly to falling high- cost support requirements, the FCC said on Monday. Next quarter, carriers must contribute 9.5 percent of their long distance revenue…
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to USF. That’s 1.9 percentage points less than Q4, and 0.7 less than Q1 last year. To set the carrier “contribution factor,” the agency divides projected carrier revenue by expected USF subsidies for a given quarter. Of an estimated $1.84 billion in Q1 subsidies, about $1.06 billion is for the rural high-cost program, $525.74 million for the E-rate program, $204.89 million for low-income support and $49.49 million for the rural health-care program. Support requirements for the high-cost program dropped most, falling $120 million from Q4. The interim cap on the competitive eligible telecom carrier (CETC) portion of the high-cost fund is partially responsible for the drop, said Curt Stamp, president of the Independent Telephone & Telecommunications Association. An industry official estimated that the CETC cap reduced demand on the high-cost fund by about $64 million. The five-month CETC cap took effect in August, but apparently took an extra quarter to kick in, Stamp said. The contribution factor decline could relieve some of the short-term emergency behind USF reform efforts, but ITTA hopes the FCC and Congress won’t lose focus, he said.