Universal Service Administrative Company

The Universal Service Fund (USF) is a system of telecommunications subsidies and fees managed by the United States Federal Communications Commission (FCC) intended to promote universal access to telecommunications services in the United States. The FCC established the fund in 1997 in compliance with the Telecommunications Act of 1996. The fund reported a total of $7.82 billion in disbursements in 2014, divided among its four programs. The fund is supported by charging telecommunications companies a fee which is set quarterly. As of the third quarter of 2016, the rate is 17.9% of a telecom company's interstate and international end-user revenues.

While separate itemization is not required by the FCC, it is common for USF fees to be listed separately from other charges on a consumer's bill. Universal Service charges should not be confused with what are sometimes referred to in telephone company bills as "Federal Subscriber Line" charges, which are access fees charged by telecommunications companies, not the local or federal government.

Some have raised concerns about the future funding of the USF; despite falling taxable revenues, the size of the fund has increased from $1.2 billion in collections at 5.7% in 4Q 2000, to $2.2 billion in 4Q 2014 at 16.1%. Some believe that reclassifying broadband internet access services under Title II of the 1996 Telecommunications Act would be followed by requiring ISPs to pay into the USF as a new source of revenue for the fund. But the FCC has made clear that it will not require contributions on broadband Internet access revenues at this time, as the FCC will forbear from the contribution requirements in Section 254(d) of the Communications Act.

By 1913, AT&T had favored status from U.S. government, allowing it to operate in a noncompetitive economic environment in exchange for subjection to price and quality service regulation. The government asserted that a monopolistic telephone industry would best serve the goal of creating a "universal" network with compatible technology country-wide for telephone consumers. Regulators emphasized limits on profits, enforcing "reasonable" prices for service, setting levels of depreciation and investment for new technology and equipment, dependability and "universality" of service. "Universal" was originally used by AT&T to mean, "interconnection to other networks, not service to all customers". After years of regulation, the term came to include infrastructural development of telephony and service to everyone at a reasonable price.

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