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FCC proposing slight drop to Universal Service Fund charge

Claro announced the FCC's upcoming Universal Service Fund fee review process. (Credit: © Mauricio Pascual)

As it does every quarter, the Federal Communications Commission is reviewing the rates that telephone companies must charge and pass off to consumers to cover the Universal Service Fund, which among other things, subsidizes services offered to low-income consumers as well as improvements to schools and libraries.

If approved, the FCC is proposing a reduction of the USF fee from the current 17.9 percent to 17.4 percent of a carrier’s inter-state and international calling revenue, which it is allowed to bill to customers. In the case of Puerto Rico Telephone/Claro, Puerto Rico’s largest telecom carrier, it identifies the fee as the “Federal Universal Service Fund Charge.”

The change would likely represent a slight savings for residential customers and possibly shave a few dollars a month off commercial client bills.

On Wednesday, the carrier said the proposed change, if unchallenged, would go into effect during the second quarter of 2012.

In the case of Claro’s fixed line residential customers, the fee would be calculated by multiplying the proposed 17.4 percent by the $6.50 it charges per line. It would also be applied to services and long distance calls outside Puerto Rico.

On the other hand, Claro’s business customers would see the 17.4 percent applied to the $9.20 fee per switchboard line and to special interstate services, such as high-speed dedicated circuits. Furthermore, the fee would be applied to off-island long distance calls and services.

In both cases, Claro’s “Phonemax” Voice Over Internet Protocol service clients would see the fee applied to interstate long distance calls in excess of the quota allocated in the monthly plan and to the 64.9 percent of the monthly rental plans that include minutes of use outside Puerto Rico.

Meanwhile, Claro’s post- and pre-paid wireless clients would pay the 17.4 percent fee over off-island long distance calls and roaming services, depending on their calling plans. In the case of clients whose monthly plans include off-island long distance and roaming, the fee would only apply to local and international services used, as well as overage minutes.

“It bears repeating that the revenue from the Federal Universal Service Fund do not benefit Puerto Rico Telephone or Claro,” the carrier said in a statement issued Wednesday.

On October 27, 2011, the FCC approved a six-year transfer process that would transition money from the Universal Service Fund to a new $4.5 billion-a-year Connect America Fund for broadband Internet expansion, effectively putting an end to the USF by 2018.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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