USF Contribution Rate to Top 20% for First Time in Program History, Consultant Says
The USF contribution rate will increase from Q3's 17.9 percent to 20.1 percent in Q4, exceeding 20 percent of carriers' U.S. interstate and international telecom end-user revenue for the first time in USF history, industry consultant Billy Jack Gregg emailed…
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Friday. Universal Service Administrative Co. projects USF-applicable telecom revenue for Q4 to be $12.41 billion, down $545 million from Q3 and the lowest USF quarterly revenue base ever, he said. That lower revenue base, plus the previously announced USF quarterly demand of $2.06 billion, is what's driving the high USF contribution factor, he said. Total USF demand for 2018 will be $8.065 billion, up $147 million from 2017 but $1.47 billion less than the peak annual USF demand during 2012, he said. USF demand has hovered between $8 billion and $9 billion annually since then because of a 50 percent decline in low-income fund demand, a 48 percent decline in schools and libraries fund demand, and use since 2015 of unused schools and libraries fund to offset annual demand for that fund, Gregg said. Total USF revenue for 2018 will be $51 billion, also the lowest in USF history, and down $25.2 billion from the 2008 peak, he said.