The Universal Service Fund (USF) makes sure that low income and rural consumers have access to affordable phone services. It also ensures that schools, libraries and rural healthcare providers receive Internet service at discounted rates. The current system is fair, collecting USF monies on a "pay-for-what-you-use" system. All telephone users pay a percentage of their monthly phone bill to the Universal Service Fund based on how much long distance is used. If you use less, you pay less.  Under this system, big businesses pay more into the system then consumers and other low-volume users.

The Federal Communications Commission (FCC) is considering changing the fair "pay-for-what-you-use" system to a "monthly flat-fee." This flat fee plan would hurt millions. Even if you make no long distance calls, you still have to pay a fee.

A monthly flat fee system is unfair. It shifts the burden of the USF to those it was created to help -- Americans with low or fixed incomes, residential consumers and those who use little or no long distance a month. Big business users would be paying the same USF fee as you or me – in fact, we would be subsidizing them!

According to a recent Keep USF Fair study, Losing Numbers: How America’s Most Vulnerable Consumers Could Suffer Under Universal Service Fund (USF) Reform [PDF], this flat fee shift would:

• Result in higher federal phone taxes (or forced phone bill hikes) of as much as $707 million for 43 million low-volume, long-distance users in the US.
• This would include 16 million low-income and elderly individuals who can afford few if any long distance calls but would be required to pay up to $383 million in higher USF taxes.
• Even a $1 to $2 charge could add $350 million to $700 million a year in costs borne by the four in 10 U.S. households that rarely or never make long-distance calls.

The "flat fee" plan would impose a steep financial burden on millions of seniors and low-income phone users.  While still opposing the flat-fee plan, Keep USF Fair has filed comments (link) on other proposals before the FCC to change the USF.  Recently, Keep USF Fair filed comments in support of the “by-the-minute” proposal. The proposal, supported by Coalition supporter TracFone, would base contributions of prepaid wireless phone providers on their minutes of use rather than charging the same flat fee regardless of usage.

If you agree that a “by-the-minute” proposal is a necessary component and reasonable alternative to enforcing a “flat fee” plan that would hurt millions than let the FCC and your Member of Congress know how you feel...support our coalition and take action today!