Q: What is the Federal Universal Service Fee (FUSF)?
The Universal Service Fund charge is a tax collected from
telecommunications carriers such as Verizon, ATT, or New Edge
networks to support the federal Universal Service Fund. The Fund
ensures that schools, libraries, rural hospitals, and other
individuals have access to affordable telecommunications service.
All communications providers must contribute to the fund based on
revenue incurred during the previous year. Most carriers recover
their Universal Service Fund charges from their customers in some
form. The fee passed through to you depends on the fee assessed to
Verizon and is along with the services you have ordered, and may
change slightly from month to month. For additional information
about this charge, contact the FCC at
call them at 1-888-225-5322.
Q. How did LinkLINE challenge the FUSF charges and what was
LinkLINE challenged the FUSF imposed DSL on several fronts.
First, as a member of California Internet Service Provider
Association (CISPA), we challenge the ruling that DSL circuits are
classified as Interstate service or “long Distance”. The DSL
circuits interconnect between Verizon and linkLINE within
California only in specific local LATA boundaries, and inherently
provide local transport even though the internet connectivity the
ISP provides is national/global in nature, therefore “long
distance”. The FCC assesses FUSF charges on DSL because the ILECS
filed their tariffs with the FCC, rather than individual state
Secondly, line-shared DSL presents a unique challenge since there
is no unique circuit connected to the customer’s home; the DSL
signal is superimposed on the same cable pair with local telephone
service. State taxes are charged on the voice circuit, which is
regulated by the California Public Utility Commission. We assert
that there may be double taxation involved when DSL service rides
an existing voice line.
A third challenge was launched by a number of companies asserting
the FUSF violates Congress’ moratorium on internet taxes when
applied to broadband services (as opposed to voice service). The
response is that this was a legislated fee for a specific fund and
purpose, rather than a tax imposed that would feed into general
tax funds or government coffers.
It is still possible that ongoing jurisdictional challenges and
definition of Internet Broadband may change, affecting the FUSF
tax applied to DSL. However, it appears that any changes in law or
jurisdiction will result in substantial changes since the
Universal Fund has widespread support in Congress.
HR 1542, or the Tauzin-Dingell bill, which linkLINE opposes, is
expected to be considered in March. This bill, among other things,
would classify all data and internet circuits and services as
interstate, placing them under federal jurisdiction regardless of
existing state or local policy or involvement.
Q: Why do I get charged for the FUSF?
Section 254(d) of the Telecommunications Act of 1996 states:
"Every telecommunications carrier that provides interstate
telecommunications services shall contribute, on an equitable and
nondiscriminatory basis, to the specific, predictable, and
sufficient mechanisms established by the Commission to preserve
and advance universal
Companies such as long distance providers, wireless service
providers, payphone operators, and data communications providers
are included under this heading. LinkLINE’s Digital Subscriber
Line service is provided in conjunction with Verizon, an Incumbent
Local Exchange Carrier.
Since broadband data communications traffic (Internet) travels
across state lines, and Verizon has filed their DSL product
tariffs with the FCC, they are required to participate in the
collection of the Federal Universal Service Fee. This fee is
passed on to linkLINE, which is then passed on to our customers.
Q: How does the FUSF get calculated?
The FUSF is calculated based on the yearly revenues of the company
that is required to pay it, in this case Verizon. Therefore, fees
charged may differ according to carrier used on your particular
line, as well as the exact service you have ordered. The current
rate being charged Verizon as of April 2006 is 10.9%.
Q. What about other services on my bill?
FUSF charges only apply to the amount linkLINE pays Verizon for
the actual DSL circuit. The FUSF charges don’t apply to what we
charge for bandwidth, email, and other services. FUSF doesn’t
apply to any additional services, such as dialup access,
additional IP addresses, or professional web hosting.
If you are billed for your DSL circuit by Verizon directly, no
taxes will appear on your linkLINE bill.
Q: How can I find out more information?
The best place to find information on the FUSF or the
Telecommunications Act of 1996 is the FCC's website, www.fcc.gov.
A consumer information page on Universal Service is available at