Alaska Universal Service Fund
Frequently Asked Questions

What is the Alaska Universal Service Fund?

The Alaska Universal Service Fund is a fund created by the Regulatory Commission of Alaska under the authority of AS 42.05.840, which reads:

The commission may establish a universal service fund or other mechanism to be used to ensure the provision of long distance telephone service at reasonable rates throughout the state and to otherwise preserve universal service.

The Regulatory Commission of Alaska established the Alaska Universal Service Fund in 1999 through the adoption of regulations (3 AAC 53.300 – 3 AAC 53.399).

Who administers the Alaska Universal Service Fund?

The Alaska Universal Service Administrative Company (AUSAC) is a member-based nonprofit corporation that serves as the administrator of the Alaska Universal Service Fund.  More information about AUSAC can be found at https://www.ausac.org/.

How does the Universal Service Fund work?

A public utility that provides intrastate telecommunications service to the public or “to classes of users as to be effectively available to the public for a fee” must pay a universal service surcharge to the Alaska Universal Service Fund.  This universal service surcharge is based on annual gross revenues of the utility generated from end users receiving specified intrastate telecommunications services and charges.  Among those services subject to the universal service surcharge are traditional wireline telephone service, wireless telephone service, cable telephone service, and Voice over Internet Protocol (VoIP) telephone service.  3 AAC 53.340(a).  A utility paying the universal service surcharge can recover the surcharge from customers.  The surcharge appears as a separate line item on customers’ telephone bills. 

By October 1 of each year, AUSAC calculates a proposed budget for the estimated total amount of universal service support payments that will be needed from the Alaska Universal Service Fund for the following calendar year and for administrative costs. AUSAC then calculates an annual universal service surcharge factor to cover the proposed budget for the following year based on the ratio of the total estimated disbursements for the Alaska Universal Service Fund to the total annual gross revenues from intrastate end users subject to the universal service surcharge. 3 AAC 53.340(d). 

A public utility that provides intrastate telecommunications service remits its universal service surcharge payment to the AUSAC monthly.  3 AAC 53.340(e). AUSAC makes disbursements on a monthly basis to pay eligible universal service support to local exchange telephone companies and to pay administrative costs. 3 AAC 53.350.

Although the Alaska Universal Service Fund over its history has supported a variety of programs to improve access to telecommunications services in Alaska, support is now limited to Essential Network Support distributed to qualifying local exchange telephone companies.  Essential Network Support payments are calculated in line with the provisions of 3 AAC 53.346. 


How much is the universal service surcharge factor?

Under 3 AAC 53.340(d), the current universal service surcharge factor may not exceed 10%.  As the table below demonstrates the universal service surcharge factor began a steady increase in 2011 after the Regulatory Commission of Alaska, in Docket R-08-003, added an intrastate access charge replacement mechanism.  By 2018 the universal service surcharge factor was 19.0%.  The Regulatory Commission of Alaska, in Docket R-18-001, subsequently imposed a 10% surcharge cap, effective January 1, 2019.
. 
Tariff Advice
Number
Effective Date
Universal Service Surcharge Factor
 
 
Calculated
Effective
TA1-998
March 1, 1999
1.8%
1.8%
TA2-998
January 1, 2000
1.2%
1.2%
TA3-998
January 1, 2001
0.4%
0.4%
TA4-998
January 1, 2002
0.56%
0.56%
TA5-998
January 1, 2003
0.65%
0.65%
TA6-998
January 1, 2004
0.96%
0.96%
TA7-998
January 1, 2005
1.00%
1.00%
TA8-998
January 1, 2006
1.2%
1.2%
TA9-998
January 1, 2008
0.77%
0.77%
TA10-998
January 1, 2009
1.05%
1.05%
TA11-998
January 1, 2010
1.32%
1.32%
TA12-998
January 1, 2011
9.5%
9.5%
TA14-998
January 1, 2012
9.5%
9.5%
TA15-998
January 1, 2013
9.3%
9.3%
TA16-998
January 1, 2014
9.2%
9.2%
TA18-998
January 1, 2015
10.4%
10.4%
TA19-998
January 1, 2016
11.5%
11.5%
U-16-075(1)*
September 1, 2016
14.2%
14.2%
U-16-075(3)*
October 1, 2016
14.2%
14.2%
TA23-998
January 1, 2017
14.2%
14.2%
TA25-998
January 1, 2018
15.8%
15.8%
TA26-998
January 1, 2018
19.0%
19.0%
TA28-998
January 1, 2019
14.5%
10%
TA31-998
January 1, 2020
17.6%
10%
TA34-998
January 1, 2021
25.9%
10%
TA37-998
January 1, 2022
30.3%
10%
TA40-998
January 1, 2023
30.8%
10%
* These Tariff Advice Filings were suspended into dockets for further investigation.



How much does the Alaska Universal Service Fund disburse? 

Current and past disbursements from the Alaska Universal Service Fund are summarized in AUSAC’s most recent budget filing, TA40-998, Schedule 6 (available at: https://rca.alaska.gov/RCAWeb/ViewFile.aspx?id=E0804A20-C8B4-4F6C-872B-5AA2FA3DBCDE).

AUSAC reports disbursements in its budget filings with the Regulatory Commission of Alaska and in the annual reports that appear on its website.  A filing made with the Regulatory Commission of Alaska reported the universal service support distributed in the 12-month period ending October 2022 as $13,521,914.32 and listed the companies to which Essential Network Support was distributed and the amount paid to each company.  That filing can be accessed at https://rca.alaska.gov/RCAWeb/ViewFile.aspx?id=389B63FD-5097-4984-9F47-D4DFA2C8730A (see last column of spreadsheet on the second page). The Regulatory Commission of Alaska has not independently verified the amounts reported. 

Under the 10% surcharge cap, in practice, local exchange telephone companies receiving Essential Network Support do not receive disbursements identical to the support calculated under 3 AAC 53.346.  Where a shortfall in the Alaska Universal Service Fund exists, recipients’ claims are subject to pro-rated reductions under the provisions in 3 AAC 53.350(e).   

What is the status of the Alaska Universal Service Fund?

The Alaska Universal Service Fund is currently operating, collecting the universal service surcharge from public utilities that provide intrastate telecommunications service and paying eligible universal service support to local exchange telephone companies.  However, under existing regulations adopted in 2018 the Alaska Universal Service Fund sunsets on June 30, 2023.  3 AAC 53.300(d).

What happens if the Alaska Universal Service Fund sunsets on June 30, 2023? 

AUSAC will continue to function, paying universal service support, until the Alaska Universal Service Fund is exhausted.  It is expected that telecommunications utilities that formerly paid the universal service surcharge will remove the Alaska universal service fees from customers’ telephone bills and that those bills will be reduced.      

Where can I learn more about the Alaska Universal Service Fund?

The Regulatory Commission of Alaska opened a regulations docket in June 2021 to conduct a sunset review of the Alaska Universal Service Fund.  This docket contains orders issued by the Regulatory Commission of Alaska, public notices, public comments, filings by interested persons, transcripts of public meetings held by the Regulatory Commission of Alaska, and other documents pertaining to the Alaska Universal Service Fund.  These documents can be found on the Regulatory Commission of Alaska’s website at http://rca.alaska.gov/RCAWeb/Home.aspx by using “Top Searches” and entering “R-21-001” in “Find a Matter”. 



The regulations docket opened in June 2021 (R-21-001) remains open and the Regulatory Commission of Alaska has not yet taken final action on proposed regulations revisions related to the Alaska Universal Service Fund.


Date Issued: 4/28/2023