What is the USF (Universal Service Fund)
What exactly is USF? Before making an investment in VoIP technology for the company, this question must be addressed. The US Telecommunications Act of
1966 creates a fund, known as USF, that, in the most basic terms, exclusively collects long-distance call fees, whether they are domestic or international. The USF must receive funding from each and every telecommunications company operating in the country. Even low-income households may afford to use phones thanks to these funds. By visiting the FCC website, you can get more details on the US Telecommunications Act.In summary, the universal service fund (USF) is a mechanism by which funds are collected from users who make interstate or international calls and then those funds are used to subsidize the costs of telephone service to rural residential users, low-income households, rural health care providers, and rural schools.
The rate at which this usage is taxed changes on a quarterly basis. Your telecommunications carrier is required to assess and collect these funds and then pass them along to the fund’s administration.
How DLS assesses USF charges
Since many of the voice services that DLS offers come as a bundled price, we do not have the liberty of simply applying the tax rate against your billed usage. When a bundled service includes interstate and international usage, we are required to estimate what portion of the revenue is related to such usage and tax that usage appropriately. This is done by adding up the price of all taxable usage (using our standard rates, if no rate applies to you) and capping the usage estimate at the total price of your service. The USF tax rate for the given quarter is then applied to the usage estimate.
- Example 1: $250 total price, $100 in taxable usage, $100 x 14.7% = $14.70 in USF charges.
- Example 2: $250 total price, $50 in taxable usage, $50 in additional estimated taxable usage, $100 total taxable usage x 14.7% = $14.70 in USF charges.
- Example 3: $250 total price, $500 in estimated usage, $250 x 14.7% = $36.75 in USF charges.