RCA Makes Significant Changes to the Alaska Universal Service Fund.

On August 9, 2018, the Regulatory Commission of Alaska (RCA) voted to adopt regulations significantly modifying the Alaska Universal Service Fund (AUSF).  The adopted regulations were the product of collaborating efforts by the Alaska Telephone Association and the Attorney General. 

Some of the key features of the adopted regulations include:

  • Capping the AUSF surcharge at 10%;  

  • Eliminating the Public Interest Pay Telephone (PIPT) and State Lifeline and Link Up support programs in their entirety;

  • Initiating a two-year phasedown of a support program that addressed switching costs for several rural carriers, known as Dial Equipment Mode (DEM) Weighting support;

  • Revising Carrier of Last Resort (COLR) and Carrier Common Line (CCL) support as Essential Network Support, and freezing that support at historic 2016 values, and eliminating all such support for newly defined "non-remote" areas of Alaska;

  • Terminating the AUSF in its entirety on June 30, 2023, with a mandatory comprehensive review two years before the termination date to determine the future of the AUSF. 


AUSF was established by regulation (R-97-006) on December 30, 1998, to promote the efficiency, availability, and affordability of basic universal telephone service in Alaska.  At that time, then-Alaska Public Utilities Commission also designated the Alaska Universal Service Administrative Company (AUSAC) to administer the collection and distribution of the AUSF moneys.  The AUSF surcharge, which appears as a separate line item on a customer’s phone bill, is assessed on the in-state portion of telephone services provided. Each year, AUSAC calculates the surcharge factor used to fund the AUSF for the coming year and submits the proposed surcharge for the RCA’s review.  

Recent marketplace changes as well as changes in federal regulation caused some concerns that the AUSF contribution and disbursement mechanism is no longer sustainable as more consumers migrate away from traditional voice service.

For historical perspective, the AUSF grew from $3.5 million in 1999 (with 1.8% surcharge factor) to approximately $27.5 million in 2016 (with a 14.2% surcharge factor at year-end).  With regard to 2016 support amounts, AUSF distributed $1,459,829 in State Lifeline support, $99,221 in PIPT support, $1,236,687 in DEM Weighting support, $15,234,699 in CCL support, and $9,337,617 in COLR support.  This year, the AUSF surcharge increased to 19 percent.  The table below shows escalating surcharges from inception to date to cover the declining intrastate revenues. 

Effective Date
AUSF Surcharge
March 1, 1999
January 1, 2000
January 1, 2001
January 1, 2002
January 1, 2003
January 1, 2004
January 1, 2005
January 1, 2006
January 1, 2008
January 1, 2009
January 1, 2010
January 1, 2011
August 1, 2011
January 1, 2012
January 1, 2013
January 1, 2014
January 1, 2015
January 1, 2016
September 1, 2016
October 1, 2016
January 1, 2017
January 1, 2018

The regulations adopting changes to the AUSF are intended to stabilize recent AUSF surcharge escalation while providing carriers with a transitionary period to adjust business operations in anticipation of the possible repeal or substantial reconstitution of the AUSF.  For more information, see R-18-001(5).   The regulations will become effective on December 20, 2018, and will appear in Register 228, January, 2019 of the Alaska Administrative Code.

Date Issued: 12/12/2018