Fund Administration

About the Universal Service Fund

The Universal Service Fund is one fund with four programs.


The four programs of the federal Universal Service Fund are:

  • High Cost - This support ensures that consumers in all regions of the Nation have access to and pay rates for telecommunications services that are reasonably comparable to those in urban areas.
  • Low Income - This support, commonly known as Lifeline and Link Up, provides discounts that make basic, local telephone service affordable for more than 7 million Americans.
  • Rural Health Care - This support provides reduced rates to rural health care providers for telecommunications and Internet services so they pay no more than their urban counterparts for the same or similar telecommunication services.
  • Schools & Libraries - This support provides affordable telecommunications and Internet access services (known as Priority One services) to connect classrooms and libraries to the Internet. Schools and Libraries support also provides for Internal Connections and Basic Maintenance of Internal Connections (known as Priority Two services) after all Priority One commitments have been made.

    • 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 the Universal Service Fund. 

    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. Carriers providing international services also must contribute to the fund.

    Carriers pay contributions into one central fund. USAC makes payments from this central fund to support the four Universal Service programs.


    Last modified on 2/12/2008