If We Have A 499 Filer Number Should Your Vendors Charge Us For State Universal Service Fund Tax?

20 Reasons Why the Universal Service Fund is an Out of Command Slush Fund:

And What nosotros Should Do Nigh it.

The Universal Service Fund should not be increased. It should exist reduced and/or removed from customers bills.

• Broadband should not be added to the Universal Service Fund. Instead, the states need to get back the billions of dollars per country that was already nerveless in backlog local rates and tax perks to rewire their states and fifty-fifty pay for schools and libraries to be upgraded..
• The Loftier Cost fund should become �needs' based and not given to wealthy companies in non-high-cost areas.
• Lifeline should be increased to brand sure that every low income family unit is protected from losing their phone service.
• Funding Schools and libraries should be re-evaluated as most of these areas have already been wired,
• Investigations �should start to examine identical �state-USF funding�, from Lifeline or schools and libraries or fifty-fifty high costs.
• The entire phone bill should be audited with ALL charges accounted for earlier any increases.

Definition: The Universal Service Fund is a tax applied to all interstate (long distance and international) communications � To date, it is 11.4% added to your bills.� Information technology�s also added on anything considered interstate, including the local FCC Line Charge, Number Portability and other areas.

FCC�southward Universal Service homepage:

http://www.fcc.gov/wcb/tapd/universal_service/

Quarterly percentage charged to customers (contribution factor)

http://www.fcc.gov/omd/contribution-factor.html

According to the FCC, the goals of Universal Service, as mandated by the 1996 Human activity, are to:

• Promote the availability of quality services at just, reasonable and affordable rates for all consumers
• Increment nationwide access to advanced telecommunication services
• Accelerate the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas at rates that are reasonably comparable to those charged in urban areas
• Increment access to telecommunications and advanced services in schools, libraries and rural wellness care facilities
• Provide equitable and not-discriminatory contributions from all providers of telecommunications services to the fund supporting universal service programs

Sounds swell, until government agencies who are more influenced by the phone companies than the public involvement run the fund.

Let�s go through the basic points.

1) Massive increase to corporate subsidies and taxes.�� The USF fund in 1999 charged� three.9%, in 2008 (second quarter) the amount is now eleven.4%. --- a 192% increase.

2) The total amount of money went from $four.seven billion in 2001 to $half-dozen.95 by 2007� --- a fifty% overall increase.

3) Who pays the USF Fees? Everyone, including seniors, low income families, businesses, etc. � Why should people who are already having problem paying their rising costs of service have to pay into a fund that is out of control?

4) Who gets the coin? � Wealthy phone companies without audits or demand.� This nautical chart is the nuts �� 62%, the largest office of the fee, DOES NOT got to wire schools and libraries, but goes to something called a �High Cost Fund�.

Universal Service Fund, 2007

(in the billions.)

	corporeality	%
High Cost:	$4.30	62%
Low Income:	$0.82	12%
Rural Wellness Care:	$.037	ane%
Schools & Libraries	$1.lxxx	26%
Estimated 2007 Back up	$6.95	100%

5) Why Is It a Slush Fund? Considering In Most States There Are No High Cost Areas.

There are 4 reasons we tin can say this:

half dozen) States �Average� All Local Service Costs

�In virtually every country, the cost of service has been historically averaged out throughout the entire land, sometimes done past regions. Urban areas actually pay more to support rural areas. This has e'er been in bear upon. Therefore, there are no high cost areas as they are funded through ALL local rates.

7) Outrageous Payments Per Line.

The FCC'south High Cost fund is so out of whack that it gives thousands of dollars in subsidies per single-line to some telephone companies. For case, the pocket-size Border to Edge telephone company in 2004 received $3,926 per line for High Price subsidies. This doesn't include the coin the company gets from the subscriber for local service and other fees.

Edge TO Edge TX	$3,926
SANDWICH ISLES COMM.HI	$three,473
BEEHIVE TEL CO - NV	$2,640
ACCIPITER COMM.AZ	$2,113
SUMMIT TEL & TEL -AK	$1,473
GEORGETOWN TEL CO MS	$ane,267
TERRAL TEL CO OK	$one,246

�UNIVERSAL SERVICE� TELEPHONE SUBSIDIES: WHAT DOES $7 BILLION BUY?
June 2006

8) No Regulator Examines the Costs and Profits.

That�south right, in most states, the cost of the service is now divorced from the actual price a customer pays, and since the 1990�south, the profits from the local service more than doubled � from 12% to 29% (1984-2004).

With no regulator examining the profits, how can you have loftier costs? You can�t.� It is voodoo statistics at its finest with no regulatory oversight in most states.

ix) The Costs to Offering Service Continues to Decrease, Yet the Regulators Continue to Allow Increases to the Costs of Local Service.

If someone was actually examining the profits they would observe that these companies don�t need the money to make them �profitable�. �Local service never lost money considering when the company�s profits dipped, they tin can only go back to the regulators for charge per unit increases. Moreover, since 1984 there has been a 65% drop in employees, a 60% drop in construction every bit compared to revenues, and the companies increased their write-offs of the networks � thus saving on taxes.

And, equally we take documented, virtually every state has had major rate increases on almost all services.

• In California , for example, AT&T is raising rates 23%,

• In New Bailiwick of jersey and New York , there accept been and continue to be increases to rates. New Bailiwick of jersey is expecting an 80% increase, while about every charge, from directory assistance to inside wiring continues to take massive increases.

Since local rates in not-high costs areas continues to rising, fifty-fifty though the costs to offering this services continues to subtract, then why aren�t low cost areas getting a �refund tax� to compensate everyone for their contribution to paying for high cost areas?

10) Massive Cross-Subsidization of Local Rates with Everything Else.�

In� many states, information technology is articulate that the �high-toll� funding is non going to pay for local service provisioning but everything else, from long distance to DSL (broadband). Why should companies be immune to accuse customers for �interstate information services� with local phone rates? How does that aid customers buying local service? How does that help the utility customers?

In fact, Verizon and AT&T are using their funding for local phone service wiring and diverting it to pay for their other projects, like FiOS or U-Verse. Thus, the actual costs of offering service continues to fall as the networks aren�t being upgraded.

Other Universal Issues:

11) Lifeline is Out of Service.

Simply 12% of the money from the Universal Service fund actually goes to pay for low income families, but that�s not the kicker, In examining those who are getting USF lifeline support, it is clear that a) the phone companies get reimbursed full RETAIL rates for the services they provide and b) USF payments to customers do not cover the bones use of the local telephone service so Lifeline customers can pay an additional 50-100% more when the really utilize the phone or get normal customer services. Also, you lot have to be below the poverty level to get any assistance, yet the companies exercise not have to prove they need the money.

According to AARP only 30% of residential customers who could receive Lifeline are getting the service.�

12) Telephone Companies are the Largest Recipient of the School and Libraries Fund. The largest recipient of the schools and libraries funds are the phone companies that get reimbursed full business concern rates for whatever discounts these public organizations go. Since they have a monopoly on services, they become nigh of the funding. If America is buying billions of dollars of service, you would think that there would be a �discounted-rate for schools and libraries�, especially when they�re the most/only viable provider.

13) Didn�t Nosotros already Pay for broadband and the Wiring? Why Charge Us Once more?

From Ohio to New Jersey , built into the cost of service has been an substantially �defacto� revenue enhancement that is being paid through local phone rates and other charges to fund broadband upgrades, besides every bit wiring of schools and libraries. So, by adding �broadband� to the Universal Service mix, all the regulators are doing is increasing how many times nosotros can spiral the customers and make them pay over and over for services they never got.�

fourteen) The FCC� Misleads the Public near USF Funding. The FCC claims that the phone companies pay Universal Service:� �Who Pays for Universal Service? --- All telecommunications service providers and certain other providers of telecommunications must contribute to the federal USF�. And it adds that the companies don�t accept to charge customers --- �The FCC does not require this charge to be passed on to customers. Each company makes a business conclusion almost whether and how to assess charges to recover its Universal Service costs.� Misleading garbage. Customers pay the USF as a pass-through, not the telcos, and it is about ever at the full charge per unit. � or more.

Merely it gets worse because there is no �Understandable English� explaination to the public about how they are getting screwed. A elementary example:

��In a companion Public Find, released May 1, 2007, the Joint Board sought comment on various proposals to reform the high-cost universal service support mechanisms. Specifically the Joint Board sought comment on the post-obit issues and proposals: 1) the use of reverse auctions to determine high-price universal service support; two) the use of GIS technology and network cost modeling to amend calculate and target support at more granular levels; 3) disaggregation of support; iv) the methodology for calculating support for competitive ETCs; and 5) whether universal service funding should be used to promote broadband deployment.�

No homo could empathise the convoluted discussions at the FCC and even exist able to get a simple explanation of this �public Find��It is articulate the Public is not invited nor has the expertise of avant-garde regulatory, legal, much less mathematical cognition. Nosotros believe this information is targeted so the public won�t know just how desperately we are being played.

Nonetheless, the decisions beingness fabricated volition heighten rates, could harm contest, could add together �broadband to the costs of service� and no ane is going to know how it happened.

15) Out of Control Without Adequate Audits.

In the 2007 Report on the USF, the FCC�s Inspector General made the following statement: "The audits resulted in the post-obit erroneous payments rates: Contributors� payments - v.5% estimated to be ap�proximately $385, 000,000), Low Income - 9.5% estimated to be ap�proximately $75, 500,000); Schools and Libraries - 12.9% (estimated� to be approximately $210,000,000); Loftier Cost Fund - 16.half-dozen% (estimated to be approximately $618,000,000); and Rural Health Care - twenty.6% (estimated to be approximately $4,450,000).

This comes to $1.293 billion dollars and these are estimates as they are based on a sample, non actual monies existence refunded. The Improper Payments Information Act of 2002 (�IPIA�) claims that a plan is at take a chance if it has 2.five% or $10 one thousand thousand. --- these 5 areas are 2500% above �at gamble�.

Decision Points:

The largest cheerleaders for the Universal Service has been the Senate nether Stevens and Inouye. They represent

Alaska

and

Hawaii

, respectively, some of the largest recipients to the fund.

here are also others, similar the FCC, that want to increase the USF and have it pay for broadband.

What Should Happen next

sixteen) A "Needs' Test". - If the companies are losing money after everything else has paid their fare share, then, and only then, should these companies become the government�s help-- read our money.

17) Do not add another cent to USF until the FCC investigates ALL of the cantankerous-subsidies, all of the extra charges for schools and libraries past land and ALL of the monies collected to pay for broadband.

18) Make the payments to the customers. Right now the phone companies control every aspect of USF. If there is a payment to be fabricated, the customer should cull who gets the money, non hard-wired to the incumbents.

19) When someone asks if we should add broadband to this USF say �Pay for Broadband: What are you,� nuts? Finish taxing �u.s. again and once again.�

twenty)Demand a clear, curtailed, English analysis for the public, not gobblygook for the political savvy wonks.

�

Bruce Kushnick, Teletruth

Tom Allibone, Teletruth.

If We Have A 499 Filer Number Should Your Vendors Charge Us For State Universal Service Fund Tax?,

Source: http://www.teletruth.org/USFReport.htm

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