Universal Service Fraud

Email Print

I recently
noticed that federal and state “taxes and surcharges” now comprise
an astounding forty percent of my company’s phone bill. Among
the charges I found was something called the Federal Universal Service
Fund. A googling quickly found the FCC’s Orwellian rationalization
for this not-so-hidden tax, and I present it below, with my own
translation for us peons:

Service Fund Increases: What Every Consumer Should Know

Here’s how we’re going to rationalize yet another tax on you dumb


The Federal
Communications Commission (FCC) and Congress recognize that telephone
service provides a vital link to emergency services, government
services, and surrounding communities. To help promote telecommunications
service nationwide, the FCC, as directed by Congress, developed
the Federal Universal Service Fund.

We’ve found yet another way to steal your money, increase our power
and enrich our buddies.

There are four
components to the Federal Universal Service Fund. They are:

  • Low-Income.
    This program provides telephone service discounts to consumers
    with qualifying low-incomes.

we charge you more and selected poor people less, but don’t call
us socialists.

  • High-Cost.
    This program provides financial support to companies that provide
    telecommunications services in areas of America where the cost
    of providing service is high.

We subsidize businesses where phone service isn’t profitable,
but don’t accuse us of “state capitalism.”

  • Schools
    and Libraries.
    This program helps to ensure that the nation’s
    classrooms and libraries receive access to the vast array of educational
    resources that are accessible through the telecommunications network.

We use your money to fund services that we, in our infinite wisdom,
deem fit for our youth propaganda camps, but don’t ask where in
the Constitution it says the government is permitted to do this.

  • Rural
    Health Care.
    This program helps to link health care providers
    located in rural areas to urban medical centers so that patients
    living in rural America will have access to the same advanced
    diagnostic and other medical services that are enjoyed in urban

We give your money away to people who have thoughtlessly chosen
to live far away from medical services.

Who Is Required
to Contribute to the Universal Service Fund?

In the past,
only long distance companies paid fees to support the Federal Universal
Service Fund. In 1996, Congress passed a law that expanded the types
of companies contributing to the Universal Service Fund.

Hooray — we found even more ways to steal!

all telecommunications companies that provide service between states,
including long distance companies, local telephone companies, wireless
telephone companies, paging companies, and payphone providers, are
required to contribute to the Federal Universal Service Fund. Carriers
providing international services also must contribute to the Fund.

We’ll rip off anyone we can.

How Is the
Amount a Company Pays to the Universal Service Fund Determined?

companies must pay a specific percentage of their interstate and
international revenues into the Universal Service Fund. This percentage
is called the
Contribution Factor
. The Contribution Factor changes each quarter
of the year, depending on the needs of the Universal Service Fund
and the consumers it is designed to help. Because the Contribution
Factor will increase or decrease, depending upon the projected needs
of the Universal Service Fund, the amount owed to the Fund by each
affected telecommunications company will also increase or decrease
accordingly. Different events, such as changes in demand for support
or FCC regulatory action, may result in changes in the Contribution
Factor. For example, increased demand for a particular Universal
Service program may result in an increase to the Contribution Factor,
but such increase might be offset by decreased demand for a different
program or a decision to credit back to carriers any unused balances
that remain in the Fund.

Not only can we change the amount we steal any way we choose, we
are masters of mumbo-jumbo.

Does the
FCC Require That Phone Companies Recover Their Universal Service
Contributions From Their Customers?

The FCC does
not require companies to recover their contributions directly from
their customers. Each company makes a business decision about whether
and how to assess customers to recover Universal Service costs.
Although it is not mandatory that companies charge a Universal Service
fee to help recover their contributions to the fund, most do. Companies
that choose to collect Universal Service fees from their customers
cannot collect an amount that exceeds their contribution to the
Universal Service Fund.

This is a direct tax on John Q. Public.

Be a smart
consumer. Shop around and ask about each telecommunications company’s
Universal Service charge. Compare the charges and choose a carrier
based on your needs.

We like to use the word “needs” a lot, although in the context of
your phone bill, this is simply meaningless, obfuscating blather
on our part. Have a nice day, loyal subjects.

7, 2006

S. Fischer has worked in various fields.

S. Fischer

Email Print