The following statement should be attributed to Free State Foundation President Randolph May regarding the anticipated increase in the USF contribution factor:
“According to a report in Communications Daily, the USF contribution factor, a tax really, is expected to hit 42.3% in Q3, the highest ever, based on numbers released. That would be an increase of 5%, up from 37% in Q2. Boom! Breaking 40% is akin to breaking the sound barrier.
It’s crystal clear that the current USF regime is unsustainable because at some point — and the point could come suddenly — the USF tax on telecom services will be too much for consumers, and then policymakers, to bear. Reforming the regime should be a near-term priority for Congress. The focus should be on making available subsidies only upon a clear and convincing showing of need, and a reliance on market forces wherever possible to maximize efficiency and reduce waste and fraud."
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