What Is The Federal Universal Service Fund?

After Andrew S. Fischer discovered that a whopping 40% of his company’s telephone bill was comprised of various taxes and service charges, he decided to suss out one of the most egregious contributors: the mysterious Federal Universal Service Fund.

The FCC describes the tax: “The Federal Communications Commission (FCC) and Congress recognize that telephone service provides a vital link to emergency services, government services, and surrounding communities. To help promote telecommunications service nationwide, the FCC, as directed by Congress, developed the Federal Universal Service Fund.” What does that all mean? Fischer has written a highly entertaining dissection of the tax:

There are four components to the Federal Universal Service Fund. They are:

* Low-Income. This program provides telephone service discounts to consumers with qualifying low-incomes.

Translation: we charge you more and selected poor people less, but don’t call us socialists.

* High-Cost. This program provides financial support to companies that provide telecommunications services in areas of America where the cost of providing service is high.

Translation: We subsidize businesses where phone service isn’t profitable, but don’t accuse us of “state capitalism.”

* Schools and Libraries. This program helps to ensure that the nation’s classrooms and libraries receive access to the vast array of educational resources that are accessible through the telecommunications network.

Translation: We use your money to fund services that we, in our infinite wisdom, deem fit for our youth propaganda camps, but don’t ask where in the Constitution it says the government is permitted to do this.

Universal Service Fraud [LewRockwell.com]