On any home phone, cell phone, or conference call bill there is a fee called the Universal Service Fee. If you’re anything like me, you might have no idea what it means, or have recently been clued in on its meaning and purpose.

The Universal Service Fee or USF was enacted in 1996 by the Federal Communications Commission. Its main purpose was simple – ensure that all long distance companies were providing long distance phone services to low-income areas without price gouging. Basically, the government said that everyone deserves to have access to a phone line and applied a fee to help those services reach more rural areas. The USF also helps to fund internet access in hospitals, schools, and libraries.

Seems simple enough, doesn’t it? A fee charged to telecommunication service that funnels into the Universal Service Administrative Company – a nonprofit organization that chooses the areas that are the most deserving of the money in the funds. As simple as that sounds there are a lot of problems with the USF that you probably don’t even know of. In fact, I’m sure you don’t know about any of them.

First and foremost, the Universal Service Fee’s main goal of providing phone services has become antiquated over time, and yet, the percentage continues to go up. In 2002, the USF was 7.2% as opposed to the most recent contribution factor, 15.3%. If you have a cell phone in addition to your home phone, you’re paying the fee on that as well.

This is a fee that has doubled in the last 10 years, and yet, the services funded are considered to be on the way “out”. With improved cell phone networks and the increasing reliability of VoIP networks, there are fewer homes choosing to carry a long-distance provider. Since a single company decides where the money goes, despite the fact that it’s a government program, there’s no way to track what the funds are actually providing and where the money is going.

In March, the FCC sent a proposal for the Connect America Fund to Congress for approval. Basically, it’s the USF for broadband services, in the hopes to be in place by 2020, and thus do away with the Universal Service Fee. The hidden meaning is that one service fee will be replaced with another, and the only thing that’s different is the expansion of the technology it funds.

My take is they should do away with USF and not approve the CAF. This is just another form of taxation.

What do you think? Should we even be paying fees for these kinds of programs? Where do you think the money should be spent?