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USF Contribution Factor Could Tick Up Due to Higher Demand, Gregg Says

The USF carrier contribution factor could rise in Q2 from 16.7 percent to 16.8 percent of interstate and international U.S. telecom revenue, assuming the industry contribution base stays the same, said industry consultant Billy Jack Gregg in an email update…

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Thursday. The contribution base has been eroding over time as long-distance revenue fell, but there can be quarterly quirks. Gregg said Universal Service Administrative Co. Wednesday projected USF demand for Q2 would increase $14.7 million to $1.99 billion, with demand rising in the high-cost, E-rate and rural healthcare programs but declining in the Lifeline low-income program. "Out of period adjustments" were the main reason for the increased USF demand, he said. USAC revenue projections are due at the beginning of March, at which time it will be possible to nail down the Q2 contribution factor, he added.