Universal Service Fund

Universal Service Fund

In May of 1997, the Federal Communications Commission (FCC) adopted rules that mandated that
telecommunications carriers pay into a federal program called the Universal Service Fund (USF). This
fund helps provide affordable telecommunications services for low-income customers and customers in
rural areas. It also provides discounts on Internet access for eligible schools, libraries and rural health
care providers. The USF is collected from telecommunications carriers and administered by the Universal
Service Administration Corporation. They are responsible for disbursing the funds according to eligibility
criteria established by the FCC.

In the past, only long distance companies paid fees to support the Federal Universal Service Fund. In
1996, Congress passed a law that expanded the types of companies contributing to Universal Service.
Currently, all telecommunications companies that provide service between states, including long distance
companies, local telephone companies, wireless telephone companies, paging companies, and payphone
providers, are required to contribute to the Federal Universal Service Fund. Telecommunications
companies must pay a specific percentage of their interstate and international revenues into the Universal
Service Fund.

Nebraska Universal Service Fund (NUSF)

This program consists of three separate programs: High Cost Support, Low-Income, and Rural TeleHealth. Each of these programs is designed to compliment its counterpart in the Federal Fund. However, unlike the Federal Fund, the NUSF doesn’t include a schools and library component.
The High Cost program is designed to keep basic local rates at the Public Service Commission’s adopted
benchmarks of $17.50 and $27.50 for residential and business services, respectively. Discounts of up to
$13.50 a month for qualifying low-income individuals are available through the low-income program. The
Nebraska Telephone Assistance Program (NTAP) was formerly known as the Lifeline program. The
NTAP program provides $3.00 per month of the support with the remainder coming from the Federal
Fund. The Rural Tele-Health program builds upon support available from the Federal Fund by providing
further reductions in rates for a statewide tele-health network.

This network will, at a minimum, link 60 critical access hospitals to hub hospitals in Scottsbluff, North
Platte, Kearney, Grand Island, Hastings, Norfolk, Lincoln, Fremont, and Omaha. This program is
designed to make available to rural Nebraskans, in their hometowns, a similar level and quality of medical
services as is available in urban areas. The NUSF is funded by a 6.95% rate assessed on in-state retail
revenue. This rate should not be confused with a tax.