47 C.F.R. § 54.706

Contributions

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(a) Entities that provide interstate telecommunications to the public, or to such classes of users as to be effectively available to the public, for a fee will be considered telecommunications carriers providing interstate telecommunications services and must contribute to the universal service support mechanisms. Certain other providers of interstate telecommunications, such as payphone providers that are aggregators, providers of interstate telecommunications for a fee on a non-common carrier basis, and interconnected VoIP providers, also must contribute to the universal service support mechanisms. Interstate telecommunications include, but are not limited to:

(1) Cellular telephone and paging services;

(2) Mobile radio services;

(3) Operator services;

(4) Personal communications services (PCS);

(5) Access to interexchange service;

(6) Special access service;

(7) WATS;

(8) Toll-free service;

(9) 900 service;

(10) Message telephone service (MTS);

(11) Private line service;

(12) Telex;

(13) [Reserved]

(14) Video services;

(15) Satellite service;

(16) Resale of interstate services;

(17) Payphone services; and

(18) Interconnected VoIP services.

(19) Prepaid calling card providers.

(b) Except as provided in paragraph (c) of this section, every entity required to contribute to the federal universal service support mechanisms under paragraph (a) of this section shall contribute on the basis of its projected collected interstate and international end-user telecommunications revenues, net of projected contributions.

(c) Any entity required to contribute to the federal universal service support mechanisms whose projected collected interstate end-user telecommunications revenues comprise less than 12 percent of its combined projected collected interstate and international end-user telecommunications revenues shall contribute based only on such entity's projected collected interstate end-user telecommunications revenues, net of projected contributions. For purposes of this paragraph, an “entity” shall refer to the entity that is subject to the universal service reporting requirements in § 54.711 and shall include all of that entity's affiliated providers of interstate and international telecommunications and telecommunications services.

(d) Entities providing open video systems (OVS), cable leased access, or direct broadcast satellite (DBS) services are not required to contribute on the basis of revenues derived from those services. The following entities will not be required to contribute to universal service: non-profit health care providers; broadcasters; systems integrators that derive less than five percent of their systems integration revenues from the resale of telecommunications. Prepaid calling card providers are not required to contribute on the basis of revenues derived from prepaid calling cards sold by, to, or pursuant to contract with the Department of Defense (DoD) or a DoD entity.

(e) Any entity required to contribute to the federal universal service support mechanisms shall retain, for at least five years from the date of the contribution, all records that may be required to demonstrate to auditors that the contributions made were in compliance with the Commission's universal service rules. These records shall include without limitation the following: Financial statements and supporting documentation; accounting records; historical customer records; general ledgers; and any other relevant documentation. This document retention requirement also applies to any contractor or consultant working on behalf of the contributor.

[63 FR 70575, Dec. 21, 1998, as amended at 64 FR 60358, Nov. 5, 1999; 67 FR 11260, Mar. 13, 2002; 67 FR 79532, Dec. 30, 2002; 71 FR 38796, July 10, 2006; 71 FR 43673, Aug. 2, 2006; 72 FR 54218, Sept. 24, 2007; 82 FR 48777, Oct. 20, 2017]

Notes of Decisions

Cited in 27 cases (11 in the last 5 years), 2002–2026 · leading case: Wisconsin Bell, Inc. v. United States ex rel. Heath, 604 U.S. 140 (2025).

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Wisconsin Bell, Inc. v. United States ex rel. Heath, 604 U.S. 140 (2025). · cites it 3× “See 47 CFR §§54.706 , 54.709(a) (2023). The FCC, however, does not manage the Fund’s day-to-day opera- tions.”

Vonage Holdings Corp. v. Fed. Commc'ns Comm'n, 489 F.3d 1232 (D.C. Cir. 2007). · cites it 2× “” 47 C.F.R. § 54.706 (b). The Commission suspended the rule with respect to VoIP for two quarters following issuance of the Order, explaining that “if carriers are permitted to invoke the carrier’s carrier rule immediately to exclude revenues from interconnected VoIP providers,…”

United States ex rel. Heath v. AT & T, Inc., 791 F.3d 112 (D.C. Cir. 2015). “See 47 C.F.R. §§ 54.706 , 54.709. That portion is established by the Commission “on an equitable and nondiscriminatory basis.”

Tomi White Bryan, Individually & on Behalf of All Others Similarly Situated v. Bellsouth Commc'ns, Inc., 377 F.3d 424 (4th Cir. 2004). “§ 254 ; 47 C.F.R. § 54.706 (a). The percentage of its revenues that a carrier must contribute to the USF is established by the Federal Communications Commission (“FCC”) and is adjusted on a quarterly basis to ensure sufficient funding of the USF.”

United States ex rel. Heath v. Wisconsin Bell, Inc., 111 F. Supp. 3d 923 (E.D. Wis. 2015). · cites it 3× “Relator audits the telecommunications records and bills of various school districts and businesses, and he claims that defendant falsely certified that it charged the LCP to one or more of the schools that he audits. E-Rate subsidies are paid out of the Universal Service Fund…”

City of Springfield v. Ostrander (In Re LAN Tamers, Inc.), 329 F.3d 204 (1st Cir. 2003). “§ 254(d); 47 C.F.R. § 54.706 (2002). Federal regulations give USAC the responsibility to administer the USF, collect the charges, and disburse its funds, all under the direction of the Federal Communications Commission (FCC).”

Conf. Grp., LLC v. Fed. Commc'ns Comm'n, 720 F.3d 957 (D.C. Cir. 2013). “” 47 C.F.R. § 54.706 (a). Specifically: Interstate telecommunications include, but are not limited to: (1) Cellular telephone and paging services; (2) Mobile radio services; (3) Operator services; (4) Personal communications services (PCS); (5) Access to interex-change service;…”

Am. Library Ass'n, Inc. v. United States, 201 F. Supp. 2d 401 (E.D. Pa. 2002). “Under FCC regulations, providers of “interstate telecommunications” (with certain exceptions, see 47 C.F.R. § 54.706 (d)), must contribute a portion of their revenue for disbursement among eligible carriers that are providing services to those groups or areas specified by…”

Consumers' Rsch. v. FCC, 109 F.4th 743 (5th Cir. 2024). “” 47 C.F.R. § 54.706 (a). USAC determines carriers’ USF contribution obligations on a quarterly basis by “apply[ing] the quarterly contribution factor .”

Vermont Pub. Serv. Bd. v. Fed. Commc'ns Comm'n, 661 F.3d 54 (D.C. Cir. 2011). “See 47 C.F.R. § 54.706 . Telecommunications providers may pass these fees along to their customers, and almost always do, usually through line items on bills marked “Federal Universal Service Assessment.”

Tri-Cnty. Tel. Ass'n, Inc. v. FCC, 999 F.3d 714 (D.C. Cir. 2021). “§ 254 (e); 47 C.F.R. § 54.706 , and refers to subsidies set aside for high-cost areas as “high- cost funds” or “high-cost support.”

In Re Universal Serv. Fund Tel. Billing Practices Litig., 247 F. Supp. 2d 1215 (D. Kan. 2002). “47 C.F.R. § 54.706 ; Federal-State Joint Board on Universal Service, CC Docket No.”

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