PUBLIC NOTICE
Federal Communications Commission
445 12th St., S.W.
Washington, D.C. 20554
News Media Information 202 / 418-0500
Internet: http://www.fcc.gov
TTY: 1-888-835-5322
DA 07-5007
Released:  December 14, 2007
Proposed First Quarter 2008 Universal Service Contribution Factor
CC Docket No. 96-45
In this Public Notice, the Office of Managing Director (OMD) announces that the proposed 
universal service contribution factor for the first quarter of 2008 will decrease to 0.102 or 10.2 percent.1
Rules for Calculating the Contribution Factor
Contributions to the federal universal service support mechanisms are determined using a 
quarterly contribution factor calculated by the Federal Communications Commission (Commission).2  
The Commission calculates the quarterly contribution factor based on the ratio of total projected quarterly 
costs of the universal service support mechanisms to contributors total projected collected end-user 
interstate and international telecommunications revenues, net of projected contributions.3  
USAC Projections of Demand and Administrative Expenses
Pursuant to section 54.709(a)(3) of the Commissions rules,4 the Universal Service 
Administrative Company (USAC) submitted projections of demand and administrative expenses for the 
first quarter of 2008.5 Accordingly, the projected demand and expenses are as follows:
  
1 See 47 C.F.R.  54.709(a).
2 See id.
3 See 47 C.F.R.  54.709(a)(2).
4 47 C.F.R.  54.709(a)(3).
5 See Federal Universal Service Support Mechanisms Fund Size Projections for the First Quarter 2008, available at 
<http://www.universalservice.org/overview/ filings> (filed November 2, 2007) (USAC Filing for First Quarter 2008
Projections).  See also Federal Universal Service Support Mechanisms Quarterly Contribution Base for the First
Quarter 2008, available at <http://www.universalservice.org/overview/ filings> (filed November 30, 2007) (USAC 
Filing for First Quarter 2008 Contribution Base). 
2
($ millions)
Program Demand Projected 
Program 
Support
Admin. 
Expenses
Application
Of Interest 
Income
Application 
of Periodic 
True-Ups
Total 
Program 
Collection
Schools and 
Libraries 535.63 26.87 (47.65) (0.95) 513.90
Rural Health Care 25.00 1.90 (1.79) (3.83) 21.28
High-Cost 1,141.43 6.80 (5.47) (139.52) 1,003.24
Low Income 209.98 2.46 (2.20) (3.10) 207.14
TOTAL 1,912.04 38.03 (57.11) (147.40) 1,745.56
USAC Projections of Industry Revenues
USAC submitted projected collected end-user telecommunications revenues for January through
March 2008 based on information contained in the First Quarter 2008 Telecommunications Reporting 
Worksheet (FCC Form 499-Q).6 The amount is as follows:
Total Projected Collected Interstate and International End-User Telecommunications Revenues 
for First Quarter 2008:  $19.193841 billion.
Adjusted Contribution Base
To determine the quarterly contribution base, we decrease the first quarter 2008 estimate of 
projected collected interstate and international end-user telecommunications revenues by the projected 
revenue requirement to account for circularity, and decrease the result by one percent to account for 
uncollectible contributions.  Accordingly, the quarterly contribution base for the first quarter of 2008 is as 
follows:
Adjusted Quarterly Contribution Base for Universal Service Support Mechanism
First Quarter 2008 Revenues - Projected Revenue Requirement - 1%
($19.193841 billion  $1.745560 billion) * 0.99
$17.273798 billion.
Unadjusted Contribution Factor
Using the above-described adjusted contribution base and the total program collection 
requirement from the table above, the proposed unadjusted contribution factor for the first quarter of 2008
is as follows: 
  
6 USAC Filing for First Quarter 2008 Contribution Base at 7.
3
Contribution Factor for Universal Service Support Mechanisms
Total Program Collection / Adjusted Quarterly Contribution Base
$1.745560 billion / $17.273798 billion
0.101052
.
Unadjusted Circularity Factor
USAC will reduce each providers contribution obligation by a circularity discount 
approximating the providers contributions in the upcoming quarter.  Accordingly, the proposed 
unadjusted circularity factor for the first quarter of 2008 is as follows:   
Unadjusted Circularity Factor for Universal Service Support Mechanisms
1 - ((First Quarter 2008 Revenues - Total Program Collection) / First
Quarter 2008 Revenues)
1  (($19.193841 - $1.745560) / $19.193841 billion)
0.090944.
Proposed Contribution Factor
The Commission has directed OMD to announce the contribution factor as a percentage rounded 
to the nearest tenth of one percent.7 Accordingly, the proposed contribution factor for the first quarter of 
2008 is as follows: 
 10.2
  
7 See Federal-State Joint Board on Universal Service, 1998 Biennial Regulatory Review  Streamlined Contributor 
Reporting Requirements Associated with Administration of Telecommunications Relay Service, North American 
Numbering Plan, Local Number Portability, and Universal Service Support Mechanisms, Telecommunications 
Services for Individuals with Hearing and Speech Disabilities, and the Americans with Disabilities Act of 1990, 
Administration of the North American Numbering Plan and North American Numbering Plan Cost Recovery 
Contribution Factor and Fund Size, Number Resource Optimization, Telephone Number Portability, Truth-in-
Billing and Billing Format, CC Docket Nos. 96-45, 98-171, 90-571, 92-237, 99-200, 95-116, 98-170, Order and 
Second Order on Reconsideration, 18 FCC Rcd 4818, 4826, para. 22 (2003) (Second Order on Reconsideration).  
4
Proposed Circularity Factor
The Commission also has directed OMD to account for contribution factor rounding when 
calculating the circularity discount factor.8 Accordingly, the proposed circularity factor for the first
quarter of 2008 is as follows:
0.0993889
Conclusion
If the Commission takes no action regarding the projections of demand and administrative 
expenses and the proposed contribution factor within the 14-day period following release of this Public 
Notice, they shall be deemed approved by the Commission.10 USAC shall use the contribution factor to 
calculate universal service contributions for the first quarter of 2008.  USAC will reduce each providers 
contribution obligation by a circularity discount approximating the providers contributions in the 
upcoming quarter.11 USAC includes contribution obligations less the circularity discount in invoices sent 
to contributors.  Contribution payments are due on the dates shown on the invoice.  Contributors will pay 
interest for each day for which the payments are late.  Contributors failing to pay contributions in a timely 
fashion may be subject to the enforcement provisions of the Communications Act of 1934, as amended, 
and any other applicable law.  In addition, contributors may be billed by USAC for reasonable costs of 
collecting overdue contributions.12
We also emphasize that carriers may not mark up federal universal service line-item amounts 
above the contribution factor.13 Thus, carriers may not, during the first quarter of 2008, recover through a 
federal universal service line item an amount that exceeds 10.2 percent of the interstate 
telecommunications charges on a customers bill.
For further information, contact Kim Yee in Financial Operations, Office of Managing Director, 
at (202) 418-0805, TTY (202) 418-0484.
  
8 Id.
9 The proposed circularity discount factor = 1 + [(unadjusted circularity discount factor  1) * (unadjusted 
contribution factor / proposed contribution factor)].  The proposed circularity discount factor is calculated in a 
spreadsheet program, which means that internal calculations are made with more than 15 decimal places.
10 See 47 C.F.R.  54.709(a)(3).
11 USAC will calculate each individual contributors contribution in the following manner:  (proposed contribution 
factor * contributors projected collected revenues)  (proposed circularity discount factor * proposed contribution 
factor * contributors projected collected revenues).
12 See 47 C.F.R.  54.713.
13 See 47 C.F.R.  54.712.