USF Update

Televergence, a nationwide telecom carrier, is a certified diverse supplier, thought leader in telecom and member of INCOMPAS, the leading trade association for the competitive networks. INCOMPAS represents communications and technology companies large and small, advocating for laws and policies that promote competition, innovation and economic development.

Pressure from telecom companies, industry trade groups, and government officials grows for the Federal Communications Commission (FCC) and Congress to address the Universal Service Fund’s (USF) $8B phone and broadband program.

In February 2021, INCOMPAS sent an email to its members, informing them that an article on USF contributions reform was published by Bloomberg Law.  See highlights below:

○      USF subsidizes rural and low-income households, schools, libraries, telehealth services

○      Is funded by telecom companies who must contribute a percentage of interstate and international phone services revenues

    • Percentage is adjusted quarterly by the FCC at a current record contribution rate of 31.8%
    • This passthrough cost from the telecom companies results in a 31.8% increase in business and residential customer’s phone bills
    • Program disproportionately impacts the low-income households this program was designed to help

As traditional phone service continues to decline, contribution revenue has dropped by almost 40% over the last decade

○      Some feel that the new administration is an opportunity to overhaul the funding mechanism

    • Agreement that change is needed exists, however, consensus on a solution does not
    • Some favor a funding base expansion to include services such as broadband internet access revenues, but that is fiercely opposed by others who consider that to be an internet tax
    • Others support an AT&T proposal to replace the funding system with monies via Congress’s appropriations process
    • The FCC may launch a public comment period to discuss updated USF funding rules

Televergence will continue to update all on this mandatory cost that affects the entire supply chain.  While we cannot directly impact this mandatory cost, we typically save our customers an average of 30% on their telecom voice services. These savings could help offset the record-high USF cost.  Our 32-year reputation and industry-leading customer retention rate is supported by our unparalleled customer service and technical expertise.   

Please schedule a 5 minute call here to learn more.