Published: February 2006

Keep the Universal Service Fee Fair

Coalition: Keep USF Fair Coalition

The Federal Communications Commission (FCC) is considering changing the fair "pay-for-what-you-use" system to a "monthly flat-fee." This flat fee plan would hurt millions. Even if you make no long distance calls, you still have to pay a fee. The Keep Universal Service Fund Fair Coalition was founded to fight the change.

The Universal Service Fund (USF) makes sure that low income and rural consumers have access to affordable phone services.  It also provides internet at discounted rates to schools, libraries and rural healthcare providers.  The current system is fair, collecting USF monies on a "pay-for-what-you-use" system.  You pay a percentage of your monthly phone bill to the Universal Service Fund based on how much long distance you use.  If you use less, you pay less.

The Federal Communications Commission (FCC) is considering changing the fair "pay-for-what-you-use" system to a " monthly flat-fee."   This flat fee plan would hurt millions.  Even if you make no long distance calls, you still have to pay a fee.

A monthly flat fee system is unfair. It shifts the burden of the USF to those it was created to help - Americans with low or fixed incomes, residential consumers and those who use little or no long distance a month.  Big business users would be paying the same USF fee as you or me — in fact, we would be subsidizing them!
According to a recent Keep USF Fair study, Losing Numbers: How America's Most Vulnerable Consumers Could Suffer Under Universal Service Fund (USF) Reform, this flat fee shift would:

Result in higher federal phone taxes (or forced phone bill hikes) of as much as $707 million for 43 million low-volume, long-distance users in the US.
This would include 16 million low-income and elderly individuals who can afford few if any long distance calls but would be required to pay up to $383 million in higher USF taxes.

Even a $1 to $2 charge could add $350 million to $700 million a year in costs borne by the four in 10 U.S. households that rarely or never make long-distance calls.
The "flat fee" plan would impose a steep financial burden on millions of seniors and low-income phone users.

Lead Organization

Keep USF Fair Coalition

Other Organizations

Coalition Members: Alliance for Public Technology, Alliance for Retired Americans, American Association of People with Disabilities, American Corn Growers Association, American Council for the Blind, Black Leadership Forum, Consumer Action, Deafness Research Foundation, Gray Panthers, Latino Issues Forum , League of United Latin American Citizens, Maryland Consumer Rights Coalition, National Association of the Deaf, National Consumers League, National Grange, National Hispanic Council on Aging, National Native American Chamber of Commerce, The Seniors Coalition, TracFone Wireless, Virginia Citizen's Consumer Council, World Institute on Disability. Keep USF FAIR Coalition Supporters: NAACP and the National Education Association

More Information

Visit the Keep Universal Service Fund Fair web site.

You can also download the "Losing Numbers : How America's Most Vulnerable Consumers Could Suffer Under Universal Service Fund (USF) Reform" - A Report of the Keep Universal Service Fund (USF) Fair Coalition

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