On March 16, 2026, the FCC’s Office of the Managing Director has announced the proposed Universal Service Fund (USF) contribution factor for the second quarter of 2026 will be 37%, a 0.6% decrease from last quarter’s 37.6% in the Public Notice.
Covered in our previous advisory for the Q1, any meaningful reforms to the USF system remain unlikely in the short term. This increase reflects the FCC’s updated projections of USF demand and industry revenue, the industry should expect USF rates to remain at a high level for the foreseeable future. As a result, service providers must ensure proper cost recovery as the USF obligation continues to rise.
If your company has any questions regarding the escalating USF contribution factor or would like to explore Communications Taxes & Fees “Optimization” strategies to mitigate the impact of USF costs and end-user pass-through surcharges, please contact Jonathan S. Marashlian at jsm@commlawgroup.com.
We’ll leave you with some food for thought:
“If you aren’t OPTIMIZING your communication tax and regulatory fee billing, collection & reporting practices, then you (and your customers) are SUBSIDIZING the companies that are!”
