FCC Opens Rulemaking Proceeding to Consider Reforming USF Contribution System


In a unanimous vote, the Federal Communication Commission (“FCC”) earlier today approved a Further Notice of Proposed Rulemaking (“FNPRM”) seeking Comment on reforming the Universal Service Fund contribution system in an effort to reduce disputes, simplify compliance, and promote competition.  According to the FCC:

“The current contribution system has given rise to uncertainty, inefficiency, and market distortions.  Outdated rules and loopholes mean that services that compete directly against each other may face different treatment. Universal service charges billed to consumers and businesses vary by company despite virtually identical service offerings, creating confusion and distorting markets.  And compliance costs have increased as companies struggle to apply old rules to new products.”

Announced by a News Release only, the FCC has not yet issued the text of the FNPRM, nor has it set Comment and Reply Comment dates.   According to the News Release, the FNPRM will seek Comments on reforms of the USF contribution system that will seek to promote efficiency, fairness and sustainability.  In particular, the FNPRM will ask:

  • What services and service providers should contribute to the fund?
  • How should contributions should be assessed — on revenues, the number of connections, by phone numbers, or a hybrid approach?
  • How to reduce the cost, promote transparency and increase clarity of the contribution system?
  • Whether consumers could benefit from increased transparency and limitations on how providers recover their USF costs?

The Notice also seeks comment on the appropriate transition periods for reforms to allow service providers and consumers to adapt.

Our firm will closely monitor these developments and notify Clients and interested parties upon release of the FNPRM and establishment of Comment and Reply Comment deadlines.

The USF Contribution System and its mis-administration by the Government and the program administrator, USAC, over the course of the past decade has been one of the most important and impactful elements of this Nation’s regulatory regime.  The FCC’s invitation to industry and the public to participate in the rulemaking process where systemic reforms can and will take shape is a once in a business lifetime opportunity to help the FCC decide upon the future of the USF financial support system, which is a fundamental and indispensible aspect of U.S. communications (and, increasingly, Internet) regulation.


Whether your company is a Communications Service Provider, Broadband service provider or ISP, and even if your company is simply a high-volume user of bandwidth, there is a great deal at stake in the upcoming proceeding.  If you are interested in actively participating by filing Comments or simply want to track developments in the proceeding, please contact Jonathan S. Marashlian at jsm@commlawgroup.com.

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

Sign Up To Receive Our
Advisories and Compliance Alerts

Sign up for our email list to receive notifications regarding new advisories and news