Federal Universal Service Fund (USF)

All telecommunications service providers and certain other providers of telecommunications must contribute to the federal Universal Service Fund (USF) to support access to telecommunications services at reasonable rates for those living in rural and high-cost areas, income-eligible consumers, rural health care facilities, and schools and libraries. 

A "Universal Service" line item may be placed by a service provider on a telephone bill if the service provider chooses to recover USF contributions from its customers. The FCC does not require this charge to be passed on, but service providers are allowed to do so. These charges usually appear as a percentage of the consumer's phone bill. Companies cannot collect an amount that exceeds the percentage of their contribution to the USF. They also cannot collect any fees from a Lifeline program participant.