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Wednesday, June 17, 2015

Sometimes the forbear eats you

The FCC has released the Third Quarter Contribution Factor: 17.1%.  I have the 3Q factor from 2014 handy from a previous post, so let's see how things have changed over the last year.

That's a 9% increase in the contribution factor!  What caused the jump?  Let me dump all the data into a spreadsheet and see what happened.

Well, it's not due to a jump in spending.  Total demand is up less than 1% (an 8% decrease over at Low Income compensating for a 4% increase in E-Rate and a 15% increase from Rural Health Care).
The problem is a 6% drop in the contribution base.  People just aren't making enough long distance calls.  I found the Contribution Factor announcement from early 2007 in a previous post, and the contribution base has dropped 20% since then.  It sure does seem like the FCC is going to have to end its forbearance of USF fees for ISPs.

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