Proposed USF Contribution Factor for 3rd Quarter 2014 is 0.157%


The FCC recently announced that the proposed Federal Universal Service Fund (“USF”) contribution factor for the Third Quarter of 2014 will be 0.157 or 15.7%.  This amount is an decrease from the Second Quarter 2014 contribution factor of 16.6%.

Unless otherwise notified by our firm, clients may presume the FCC approved the new rate, and that the new rate will be in effect from July 1, 2014 – September 30, 2014.

Detailed information about the methodology the FCC used to set the new contribution factor, along with notices of past contribution factors, can be found on the FCC’s website at:


All contribution-eligible telecommunications carriers and interconnected VoIP providers must apply the new factor to all interstate telecommunications revenue received during the effective reporting period and contribute to the USF accordingly by filing FCC Form 499-Q. Clients who file FCC Form 499-Q with the FCC will receive invoices from the fund administrator, the Universal Service Administrative Company (“USAC”), that applies this factor to retail interstate telecommunications revenue.

Contributing telecommunications carriers are permitted to pass-through the USF contribution fee to end-users through the use of a Federal USF line-item on bills. However, under the FCC’s Truth-in-Billing rules, contributing telecommunications carriers may not mark up the Federal USF line-item amounts above the current contribution factor.  Thus, clients may not, through a Federal USF line-item, recover an amount in excess of the proposed USF contribution factor from the interstate telecommunications charge on a customer’s bill.

LIRE-eligible Contributors May Petition the FCC for Waiver

Since the proposed contribution factor exceeds 12 percent (the threshold for the FCC’s limited international revenue exemption (“LIRE”) ), international telecommunications providers who are LIRE-eligible may face contribution obligations in excess of interstate end-user telecommunications revenue. Clients who face this situation should petition the FCC for waiver of the LIRE threshold.

All LIRE-eligible contributing clients should contact Jonathan Marashlian at The Commlaw Group directly at

Late Payment Penalties

Clients are reminded that USF contribution payments must be made promptly by the due date listed on monthly contribution invoices, or else they may face interest and penalties from both USAC and the FCC. Failure to make timely payments automatically subjects contributors to substantial interest and monetary penalties. In addition, USAC may bill clients for the cost of collecting overdue contributions and refer the matter to the FCC’s Enforcement Bureau for further sanctions.

Clients who would like assistance instituting the new contribution factor for purposes of contributing to the USF, or have FCC regulatory compliance questions in general, should contact Chris Canter at or Jonathan Marashlian at

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

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