Fund Administration
About Fund Administration:
- Fund Adminstration Overview
- How the Universal Service Fund Works
- Purpose of the Universal Service Fund
- Understanding Audits
Fund Administration Tools:
De Minimis Exemption
Some companies are exempt from paying into the Universal Service Fund based on their revenue amounts.
De Minimis Exemption for Contributors
If a contributor's contribution to universal service in any given year is less than $10,000 that contributor will not be required to submit a contribution or a Telecommunications Reporting Worksheet (Form 499) for that year unless it is required to do so by FCC rules governing Telecommunications Relay Service (TRS - 47 CFR 64.601 et seq.), numbering administration (NANPA - 47 CFR 52.1 et seq.), or shared costs of local number portability (LNP - 47 CFR 52.21 et seq.).
If a contributor improperly claims exemption from the contribution requirement, it will be subject to the criminal provisions of sections 220(d) and (e) of the Communications Act regarding willful false submissions and will be required to pay the amounts withheld plus interest.
If a company is expected to contribute less than $10,000 in a calendar year, it is considered to be de minimis and is not obligated to contribute into the USF. USAC uses the following processes to determine de minimis status:
On the Annual Telecommunications Reporting Worksheet (Form 499-A):
- Historical collected interstate + Historical collected international = Revenue Base
- Revenue Base x Estimated FCC contribution factor (as shown in the form's instructions) = Estimated 499-A Annual contribution
- If Estimated 499-A Annual Contribution is less than $10,000, then the form is labeled as de minimis
On the Quarterly Telecommunications Reporting Worksheet (Form 499-Q):
- Projected collected interstate + Projected collected international = Revenue base
- Revenue base x FCC Contribution factor = Unadjusted Contribution
- Unadjusted Contribution x FCC Circularity factor = Circularity Deduction
- Unadjusted Contribution - Circularity Deduction = Quarterly Contribution
- Quarterly Contribution x 4 = Estimated 499-Q Annual Contribution
- If Estimated 499-Q Annual Contribution is less than $10,000, then the form is labeled as de minimis
Qualifying for the exemption:
- Companies must demonstrate that they are de minimis on both the current 499-A and the current 499-Q to be exempt from billings in that quarter.
When the 499-A is filed showing the actual revenue that had been projected quarterly, a true up will confirm the de minimis status for the year and reverse any charges that occurred for a company that is found to have been de minimis.
