FCC Announces Proposed USF Q4 Contribution Factor

The Commission’s Office of Managing Director (“OMD”) released a Public Notice announcing that the proposed universal service contribution factor for the fourth quarter of 2020 will be 0.271 or 27.1%.  Carriers may not, during the fourth quarter of 2020, recover through a federal universal service line item an amount that exceeds 27.1% of the interstate telecommunications charges on a customer’s bill.  Last quarter, the contribution factor was 0.265 or 26.5%.


The rate is calculated based on the ratio of total projected quarterly costs of universal service support mechanisms to contributors’ total projected collected end-user interstate and international telecommunications revenues, net of projected contributions.  For the fourth quarter of 2020, the projected revenue requirement (or “costs”) of universal service support is $2,204.79 million and the projected industry revenue is $10.42838 billion.  The quarterly contribution base is then adjusted to $8.141352 billion.  If the Commission fails to act within 14 days following the release of the Public Notice, then the calculation is deemed to be approved.


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