| Telecom glossary - U
Universal Service Fund Charge or Universal Service Charge This charge started on January 1, 1998 as part of the FCC overhaul of telephone fees. All companies that provide telephone service between states pay a set percentage of their previous year's billings. The charge is designed to ensure affordable access to telecommunications services for telephone customers with low incomes, telephone customers who live in areas where the cost of providing telephone service is extremely high, libraries, schools, and rural health care providers. Although all companies providing interstate telephone service are charged the same percentage of their billings, companies are allowed to recharge you for this in any way they see fit, and each company uses a different method to charge this carrier specific fee. It is normally not presented to you in such a way that you would think it is a competitive pricing issue. But it is! Some companies do not charge this fee at all, some charge a carrier specific flat fee, others charge a percentage of your interstate and international usage, while others charge a percentage of your entire bill. Although the charge the companies pay is in essence a tax, the fee on your bill is carrier specific, and is NOT a set tax. The telephone company keeps any difference between the USF fees they collect and the charge they pay to the Universal Service Fund.
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