Universal Service Fund

The Universal Service Fund (USF) was mandated by the Telecommunications Act of 1996 to further the federal goal of providing universal service in telecommunications to U.S. residents regardless of income or geography. USF matters because it is funded by payments from telephone companies which can, and do, pass this cost on to their customers. The Congressional Budget Office (CBO) recently issued a paper on increased spending in USF's High-Cost Program which serves consumers in rural areas. This program's expenses have increased more than 50 percent since FY2000 to about $7 billion.

The High Cost Program is one of four that USF supports. The others are: the Low-Income Program, the Schools and Libraries Program, and the Rural Health Care Program.

The Federal-State Joint Board on Universal Service makes recommendations to the Federal Communications Commission (FCC) on USF matters.

Factors That May Increase Future Spending from the Universal Service Fund (pdf, 900KB, 48p.), June 2006

Related CBO report:

Financing Universal Telephone Service (pdf, 504KB, 34p.), March 2005