Trainings & Outreach

498/499 Spotlight - January 2016

498/499 Spotlight Quarterly Newsletter

1st Quarter 2016

In this issue...


Deadlines   |   Revenue Reporting   |   The Bottom Line   l   Did You Know   l   At the FCC

DUE ITEM More Details
Feb 1 FCC Form 499-Q File FCC Form 499-Q
Feb 15 Universal service contributions Making Payments
Mar 15 Universal service contributions Making Payments
Apr 1 FCC Form 499-A File FCC Form 499-A


FCC Form 499-Q Due by February 1, 2016

Each quarter, all telecommunications carriers and all interconnected VoIP providers that are not de minimis and thus required to contribute directly to the universal service fund must file the FCC Form 499-Q (Quarterly Telecommunications Reporting Worksheet) with USAC.

The FCC Form 499-Q is used to collect carrier revenue information and to determine the carrier's universal service contribution obligation for the upcoming quarter.

Universal service contributors with access to the Internet must submit their FCC Form 499-Q using E-File. Users can pull up historical forms, edit and submit changes, and certify online.

If you have questions about the revenue you are reporting on your form, or the dates listed here, call USAC's Customer Operations team at (888) 641-8722.


Revenue data you will provide on the February FCC Form 499-Q
  • Actual billed revenue from October 1–December 31, 2015, on Lines 115-118
  • Projected billed and projected collected revenue from April 1–June 30, 2016, on Lines 119-120
February FCC Form 499-Q revision deadline March 16, 2016
Resulting USAC invoices

Based on the April 1, 2016 – June 30, 2016, projected collected revenue reported:

  • Invoices issued in April, May, June 2016
  • Payments due in May, June, and July 2016


De minimis carriers do not need to complete FCC Form 499-Q. Visit the De Minimis page on the USAC website to find out if your company qualifies as de minimis.

1st Quarter 2016 Contribution Factor Increase to 18.2 Percent

The FCC released a Public Notice (DA 15-1412) announcing that the proposed universal service contribution factor for the first quarter (January - March) of 2016 will be 0.182, or 18.2 percent.


Revenue Reporting and Audit Tips

This quarter, our topic is charging your customers for the universal service fund. Learn how to accurately charge and report the universal service fee.


Webinar Topics: We Need Your Input!

What topics interest you? Suggest a webinar topic by emailing us and we'll consider producing a training session based on your input!

Contact Us

We are here to support you! Visit the Contact Us page and let us know how we can help you.

How to Accurately Charge and Report the Universal Service Fund Fee

Methods of Collection
Telecommunications carriers that are required to contribute to the federal universal service fund have the option of recovering their contribution from their end users in the form of a line item on their invoice.

Contributors that choose to collect universal service fund fees from their customers cannot collect an amount that exceeds their contribution obligation for that customer (47 CFR Section 54.712(a)). In most cases, this is the interstate and international portions of the customer's invoice times the corresponding contribution factor.  

Filers who qualify for the Limited International Revenue Exemption (LIRE) should not include their customer's international traffic in the amount on which they charge universal service because their contribution base will not include international traffic. LIRE filers who charge a universal service fee on international traffic must refund those amounts to their customers.

For de minimis companies that are indirectly contributing through their underlying carriers, they can pass these charges through to their customers but it cannot exceed what their underlying carrier is charging them.   

Contributors also have the option of recovering the cost through a flat-rate line item on a customer's invoice; however, the fee collected cannot exceed the total amount associated with the contribution factor (2002 Contribution Methodology Order, FCC 02-329). If the contributor chooses this methodology, it should ensure that their customer service base is relatively analogous to guarantee that a fair assessment is achieved.

Quarterly Fee Adjustments
As a contributor, if you are using line item charges on your customer's invoices to recover the federal universal service fee, you are required to make changes to the amount you charge on a quarterly basis if the contribution factor changes.

The exact percentage that companies contribute – the universal service fund contribution factor – is adjusted every quarter based on projected demand for universal service funding. The quarterly contribution rates are published by the FCC via a public notice approximately one month before they go into effect. USAC maintains a history of these notices on its Contribution Factors web page.

Audit Expectations
If a contributor is audited, one area that USAC reviews is how customers were charged the universal service fee. USAC requests end-user invoices to determine if the contributor is properly charging the universal service fee.

The burden rests solely on the contributor to demonstrate that the line item charge accurately reflects the specific fee it claims to recover (2005 Truth-in-Billing Order, FCC 05-55).

Universal Service Fee Assessable Services
  • Interstate telecommunications revenue
  • International telecommunications revenue
  • SLCs charged by ILECs
  • Assessable revenue portion of a bundle
NON-Universal Service Fee Assessable Services
  • Intrastate telecommunications revenues
  • Non-telecommunications revenues
  • Non-assessable revenue portion of a bundle
  • International telecommunications revenues (only if you are a LIRE filer)

If the contributor has reseller revenues (reported in Block 3 of the FCC Form 499-A), then their resale customers should not see any universal service fees on their invoice.

For invoices displaying a single line item for both state and federal universal service funds, the contributor must be able to identify what percentage/revenue amount is related to each fee. The federal universal service fund amount will be used to determine whether the correct methodology was used to calculate the fee.

If the service is packaged as a bundle on a customer's invoice, the contributor must be able to break out and identify the assessable charges associated with that bundle.

Universal Service Fund Overcharge Audit Finding
During an audit, USAC does not see a lot of issues with how companies calculate the universal service fees to their customers, but we do see a lot of issues with contributors incorrectly classifying their products and services when reporting on the FCC Form 499-A. For example, a filer will report revenues in an inaccurate reporting category (e.g., telecommunications versus non-telecommunications, etc.), inaccurate customer category (i.e., Block 3 versus Block 4), or did not accurately determine the jurisdiction of its universal service fee-assessable services (e.g., assessed universal service fee on intrastate services). Additionally, filers might have applied a universal service fee on a non-assessable product or service.


How to Change Your E-File Password

Have you forgotten your E-File password? Or do you need to change it? Getting a new password in E-File is simple. On the E-File login page, select "Forgot Password" below the "Password" field. This will take you to the Reset Password page. Fill in your first name, last name, and user ID (your user ID is your email address), and select the "Validate" button.  

Occasionally the system will not recognize your name and user ID. This can happen when you originally typed your name in just upper or lower case and you do it differently in the password reset field, or if you add or omit a leading or trailing space in your first or last name. In this case, call Customer Operations at (888) 641-8722 and they will reset your password for you.

You will receive an email with a temporary password. Return to the E-File login page and use the temporary password with your user ID (email address). The best way to ensure the temporary password works is to type it in character by character. Microsoft operating systems will often copy an extra space after the password, and our system will read the extra space as a typed character and consider the password to be incorrect.

Pro Tip
You may at times receive strange messages from our system when you try to sign in, such as Oracle errors. Do not be alarmed. Use your browser options to clear your cache, cookies, and passwords, close your browser, and then open it again. That will usually solve this problem. If not, please contact Customer Operations at (888) 641-8722.

FCC Form 499-Q Changes

USAC is updating the quarterly FCC Form 499-Q submission screens and process and would like your input to make it better. Interested in participating in a focus group? Submit your name and we'll invite you to participate! Or if you would just like to give us your suggestions, please send us an email with your ideas.

Annual FCC Form 499-A Filing

All telecommunications providers are required to submit FCC Form 499-A, the Annual Telecommunications Reporting Worksheet. The 2016 FCC Form 499-A reports historical revenue data from 2015 and is due Friday, April 1, 2016.

Please mark your calendars for the following:

March 8:  What's new in the 2016 FCC Form 499-A
  • Join us for a webinar to learn about changes to the form in 2016, including updated audit tips and new enhancements. Register

March 10: Accessing the FCC Form 499-A in E-File

  • See an overview of E-File, USAC's online filing system, in preparation for filing the 2016 FCC Form 499-A. During the webinar, we'll review the E-File interface, how to reset your password, add/remove users, and more.

    If you haven't used the E-File system before, or find it difficult, this webinar is for you! Register

March 15:  Filling out the FCC Form 499-A, Line by Line

  • Join us for an in-depth look at the 2016 FCC Form 499-A, including a discussion of each revenue line. Register


498/499 Spotlight


1Q 2016