FCC Announces Proposed Q1 2023 USF Contribution Factor

On December 9, 2022, the Office of Managing Director (“OMD”) released a Public Notice announcing that the proposed universal service contribution factor for the first quarter of 2023 will be 0.326 or 32.6%.  Per FCC rules, during the first quarter of 2023, carriers may not recover through a federal universal service line item an amount that exceeds 32.6% of the interstate telecommunications charges on a customer’s bill.  The contribution factor for the fourth quarter of 2022 was 0.289 or 28.9%.

As a reminder, the FCC calculates the quarterly contribution factor based on the ratio of total projected quarterly costs of the universal service support mechanisms to contributors’ total projected end-user interstate and international telecommunications revenues, net of projected contributions.  The projected demand and administrative expenses for the first quarter of 2023 total $2.13006 billion.  The projected industry revenues for the first quarter of 2023 are $8.749750 billion.  The adjusted contribution base (the projected industry revenues decreased by the projected revenue requirement to account for circularity and decreased by one percent to account for uncollectible contributions) is $6.553493 billion.

The contribution factor will be deemed approved 14 days following the release of the Public Notice, unless the Commission takes any action regarding the projections for demand and administrative expenses and/or the proposed contribution factor.

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