One month ago, we reported on Universal Service demand levels that suggested a significant increase in the USF Contribution Factor. Yesterday, the revenue figures came in low. As a result, the 1Q 2011 contribution factor is predicted to be a record 15.5 percent. This is even higher than the increase we expected last month.
As usual, our projections come courtesy of telecommunications consultant Billy Jack Gregg, of Universal Consulting. The summary of Mr. Gregg's calculations is available here. This will be the fourth quarter out of the last five where the USF factor changed (plus or minus) by at least 1.2 percentage points from the previous factor, raising the question whether the Fund meets the statute's "predictability" standard.
REMINDER: You can track the official USF contribution factor through the links in our Resource Center. Go to "Universal Service Links" on the right hand side of the page.