Understanding the complexities of Federal Universal Service Fund contributions is essential for Interstate Telecommunications Service Providers (ITSPs). The term de minimis refers to a minimal or negligible amount, and in the context of the FUSF, it means that a telecommunications carrier is exempt from contributing to the Universal Service Fund if their contribution amount is below a certain threshold defined by the Federal Communications Commission (FCC). This threshold is set to reduce the administrative burden on small carriers with minimal revenues.
The FCC has established that ITSPs with less than $10,000 in annual assessed FUSF contributions are considered de minimis. A filer that affirms de minimis status is exempt from directly contributing to the FUSF. De minimis filers are exempt from filing FCC Form 499-Q, and will not be billed for direct contribution. However, de minimis filers must remit contribution to their underlying service providers. Conversely direct, non-de minimis contributors are excused from paying FUSF pass- through charges after filing a “Carrier’s Carrier Exemption Certificate” with an underlying telecommunications provider.
FCC explanation may be found here: https://www.usac.org/service-providers/contributing-to-the-usf/forms-to-file/de-minimis/
At about $4500 in monthly VoIP revenue, a client can begin to explore filing a “Carrier’s Carrier Exemption Certificate”.
The calculation looks like this:
(VoIP revenue x Safe Harbor) x contribution rate > $10,000 annually or $834 monthly
($4500 x 64.9%) x 29% = $847 monthly FUSF assessment
Factors that impact FUSF assessment:
- Contribution Rate – As the FUSF contribution rate increases, the VoIP revenue amount will decrease.
- Safe Harbor vs. Traffic Study – Moving from Safe Harbor to Traffic Study has a significant impact on de minimis standing.
With a Percentage Interstate Usage (PIU) of 27.5% the amount of monthly VoIP revenue necessary to meet the $834 monthly threshold ($10,000 annual threshold) more than doubles to $10,500.
($10,500 x 27.5%) x 29% = $837
Sandy Beaches Software offers free consulting to determine the best time to begin filing and directly remitting FUSF.
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