WASHINGTON-In separate actions, the Federal Communications Commission lowered the universal-service contribution factor to 10.2 percent and said it would begin examining the USF subsidy program, perhaps dramatically changing the way the E-rate is administered.
“I fully support the universal-service program and the critical function it serves to ensure access for consumers in rural and high-cost areas and to promote access to advanced services for schools, libraries and healthcare providers in rural areas,” said FCC Chairman Kevin Martin.
The 10.2-percent contribution factor is lower than the current 11.1 percent, but higher than the 10 percent-threshold many argued as too high. The contribution factor is a percentage of long-distance and international revenues. Because it is often difficult in the mobile world to distinguish between in-state and out-of-state calls, wireless carriers generally use a safe-harbor percentage of all of their revenues-set at 28.5 percent-to determine how much they owe to the universal-service fund. Mobile-phone customers are charged a percentage of their bills to recover this assessment.
“Using a formulaic approach to distribute support directly to schools, libraries and rural healthcare providers, the FCC may be able to address the concerns raised by beneficiaries about the growing complexity of the application process while still ensuring that the programs’ funds are used appropriately,” said Martin.
FCC Commissioner Michael Copps saw it differently, however, wondering whether a formula would leave behind parochial and small rural schools.
