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Federal Universal Service Fund
What is the Federal Universal Service Fund (FUSF)?The Federal Universal Service Fund (FUSF) is a fund administered by the Federal Communications Commission (FCC) that collects a fee assessed on all interstate telecommunications revenue which is then disbursed for a variety of subsidies including: subsidizing phone service for low-income consumers, subsidizing telephone service and infrastructure in high-cost areas (generally sparsley populated rural areas), and subsidzing communications services for schools, libraries, and rural healthcare purposes. The FCC has a fact-sheet at http://www.fcc.gov/cgb/consumerfacts/usfincrease.html . In the world of DSL, the raw layer-2 DSL Transport circuit which connects your premise to Raw Bandwidth's network is considered an interestate telecommunications service. Even though the circuit itself connects two points within the state of California, the FCC many years ago classified DSL Transport as interstate telecom when an Internet service is delivered over the top because of the nature of the communications ultimatley delivered. The FUSF fee we collect reimburses us for the FUSF fees we pay on this telecommunications service. Why does Raw Bandwidth collect FUSF if it's not a telephone company?One of the popular misunderstandings about FUSF is the misnomer that only telephone companies can line-item FUSF. FUSF is directly assessed against interstate telecom revenue of telephone companies, and the FCC's rules govern how they can pass that on to their customers. When an ISP places a line item for FUSF on its customers DSL bills, this is purely a contractual issue between the ISP and its customers; there is no legal restriction against this being done. (See below for why we do this.) The one good point some of the more vocal opponents of ISPs itemizing FUSF have is that some ISPs bury FUSF in their fine print; Raw Bandwidth itemizes this fee and lists it on its main DSL pricing page prominently in the same font size as its base service charges. When did Raw Bandwidth begin collecting FUSF?Raw Bandwidth has reserved the right to seprately bill FUSF and other government and agency fees, taxes, and assessments since the inception of our DSL service; when we provided service over Covad and NorthPoint lines, we did in fact itemize FUSF on those lines. Beginning on 7/1/05, Raw Bandwidth has begun itemizing FUSF on the bills of our current ADSL service utilizing SBC/ASI DSL lines. Note that generally Raw Bandwidth is grandfathering existing customers on specific rate plans and installations established prior to 7/1/05. Until further notice, these customers won't have a separtely itemized FUSF charge unless they take some action such as move service, change speeds, or otherwise sign onto a term rate plan. Grandfathered customers who do nothing may still see a FUSF line item added to their account if their monthly price with any extra IP addresses is reduced by Raw Bandwidth; in these cases, they are seeing an overall reduction in cost even when the new FUSF line item is added. Why does Raw Bandwidth itemize FUSF?One of the arguments that people opposed to ISPs' itemizing FUSF is that FUSF is just a cost of doing business and ISPs should absorb it. Ultimately, it's correct that FUSF would become a cost of doing business for ISPs, but like any cost, one way or another it will be passed on to customers. FUSF is somewhat unique when compared to a general business taxes, insurance, or other generic cost of doing business, because FUSF uniquely targets interstate telecommunications services rather than all types of service or product inputs. Raw Bandwidth has chosen to itemize FUSF so that you, our customers, will be aware of it, and the collective pressure of ISP and telephone company customers can be exerted to keep the FUSF assessments in check. If FUSF were simply bundled into your monthly rate, you would still wind up paying for it in the end in the form of higher rates, but you wouldn't necessarily know why your prices were held higher or have the knowledge you need to complain to your elected representatives about the FUSF cost that, one way or another, will find its way to you. In addition, by itemizing FUSF and allowing it to fluctuate with the underlying cost, we do not need to add in a margin to a bundled rate to cover risk that the FUSF cost will go up. If you would like to not have FUSF line-itemed on your account, we'd be glad to quote a bundled rate for you, however it will be higher than the sum of the basic service cost plus FUSF cost listed on our website.Prior to July 2005, the way in which our contract with our wholesale ADSL circuit provider was structured, for certain reasons it didn't make sense for us to pass on FUSF as a separate line item. That changed with a new agreement, and it began to make sense for us to itemize FUSF on our DSL lines delivered using SBC/ASI circuits. When and how can the FUSF rate on my bill change?As implied by our DSL pricing chart, FUSF varies by the line speed because the underyling telecommunications service varies. So one way your FUSF rate could change is if you change service plans to a new speed plan. The FCC presently reevaluates the FUSF assessments on a quarterly basis, and it typically changes each quarter. Raw Bandwidth will adjust our FUSF rates with each FCC adjustment. Generally, we will bill FUSF for any prepaid period of service pursuant to our billing policy and any elections you make, using the FUSF rate in effect at the time the billing is made. If the FUSF adjusts up or down by less than 25% of its previous amount (typically it changes by much less), then we won't adjust the previously billed FUSF. In the event FUSF were to adjust by an amount greater than 25% from the rate in effect when your billing for a relevant time period was issued, then we will perform a true-up to adjust the previous billing on your next regular invoice (or if you end service, at the time billing adjustments are made). If you make a change in service that results in a change in the applicable FUSF, the FUSF will be prorated just like the base service charge. FUSF increases and reductions will be announced by updating the rates posted on our website on our DSL pricing pages. Raw Bandwidth also reserves the right to not pass on FUSF increases immediately even if they would otherwise apply to a given customer. This decision will typically be made based on the extent of the increase and the effort it will take to implement. (We will always pass on reductions begining at the next regular billing for a given customer).
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