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An entity’s universal service contribution obligation is normally based on the sum of its interstate and international revenues reported on FCC Form 499 filings. When an entity has international revenue that greatly exceeds its interstate revenue, that entity is exempt from contributing on its international revenues. This exemption is called the Limited International Revenue Exemption (LIRE).

For purposes of this exemption, an “entity” refers to the entity that is subject to the universal service reporting requirements in Section 54.711 and “shall include all of that entity’s affiliated providers of interstate and international telecommunications and telecommunications services.”

If USAC has determined that a filer is LIRE eligible, the following paragraph will show on its invoice.

LIRE Eligibility
If a carrier’s quarterly interstate revenue equals less than 12.00% of their combined quarterly interstate and international revenue, the carrier is eligible for the Limited International Revenue Exemption (LIRE). As a result, your international revenue will not be used in determining your quarterly contribution base.

The calculation to determine this exemption is:

Interstate Revenues / (Interstate Revenues + International Revenues) < .12

An Example of a LIRE Eligible Holding Company

Carrier Holding Company Interstate Revenue International Revenue
Company A ABC Telecom Inc.



Company B ABC Telecom Inc.



Company C ABC Telecom Inc.



Company D ABC Telecom Inc.





In the table above, each company has the same holding company name, so USAC must sum up all interstate and international revenues of all the affiliates to determine if these filers are LIRE eligible.

The Calculation

$364,000 / ($364,000 + $3,075,000) = .1058 < .12

The Result

Since the holding company’s LIRE percentage of 10.58 percent is below 12 percent, all of the filers represented in the table are considered LIRE eligible. Because of this eligibility, USAC will only use their interstate revenues when determining these filer’s universal service contribution obligations. This includes companies B and D that do not have a majority of international revenues.

Conversely, when the holding company’s LIRE percentage is above 12 percent, all the affiliated filers are not considered LIRE eligible and USAC will use both the interstate and international revenues when determining these filer’s universal service contribution obligations. This includes affiliated filers that have large international revenues.