According to a report in Communications Daily, the estimable analyst Billy Jack Gregg projects the "USF contribution factor" will likely increase to 36.2% during Q4 2023, making it the “highest quarterly contribution factor in the history of the USF.” Based on two decades of observation, I'd say you can take Mr. Gregg's projections to the bank. Or maybe more appropriately in this instance, prepare to make a bit larger withdrawal from your bank to pay your telephone bill.
Mr. Gregg stated total revenue collected will also be about $362 million less than the previous quarter.
Let me repeat what most readers already know. Revenue collected from the "USF contribution factor" – "surcharge," or "tax" if you want to call a spade a spade – continues to decline as more and more people abandon the traditional telephone services on which the surcharges are assessed. So, the surcharge has increased from 5.6% in 2000 to 12.9% in 2010 to 27.1% in 2020 to the now projected 36.2% for the last quarter of 2023.
You get the picture.
The current Universal Service Fund subsidy regime is unsustainable, and it must be meaningfully reformed. This is not to say that there should not be subsidies to support universal service goals, including support for low-income persons and for high-cost areas that otherwise would not be served. It is to say the legacy universal service regime is broken – and clearly unsustainable.
It needs to be replaced with a broadband-centric regime that is economically efficient, effective, transparent, and politically accountable. For a roadmap regarding how to accomplish that objective, please see the Free State Foundation's extensive comments submitted on August 25 to Senators Luján and Thune and the Universal Service Working Group.
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