The federal universal service charge on interstate telecom bills goes up October 1. The FCC has proposed a fourth quarter contribution factor of 42.0 percent, up from 38.8 percent in the third quarter. Nothing about your E-rate discount rate, your funding commitments, or your filing deadlines changes.
What this means for your bills
The contribution factor is the percentage of interstate and international end-user revenues that telecom companies pay into the Universal Service Fund. Carriers are allowed to pass that cost along as a federal universal service line item, but they cannot charge more than the factor itself. For October through December, that caps recovery at 42.0 percent of the interstate telecommunications charges on your bill. Expect a larger line item on your October invoices.
Unused funds held the number down
The FCC’s Wireline Competition Bureau, in consultation with the Office of Managing Director, instructed USAC to apply $69 million in unused funds against projected Schools and Libraries program demand and $56 million against Rural Health Care program demand. According to the notice, that offset brought the fourth quarter factor below the level USAC’s filings had projected.
What does not change
Nothing in this notice affects E-rate discount rates, funding commitments, or filing deadlines. The Office of Managing Director released the proposed factor on September 14, 2026, and it applies from October 1 through December 31. You can read the FCC’s Public Notice here.
Questions about your E-rate funding, on your bill or anywhere else? Schedule a consultation with a Guide.
