Vermont Universal Service Fund

The Vermont Universal Service Fund (VUSF) was established by Vermont law in 1993 through the enactment of 30 V.S.A. § 7501, which states that "the purpose of this act [is] to create a financial structure that will allow every Vermont household to obtain basic telecommunications service at an affordable price, and to finance that structure with a proportional charge on all telecommunications transactions that interact with the public switched network."

Today the fund supports five purposes in the following order of funding:

Costs payable to the fiscal agent managing the fund under contract with the Public Service Board.
The Vermont Telecommunications Relay Service...
...and its associated Vermont Telecommunications Equipment Distribution Program.
The Vermont Lifeline program.
Enhanced-911.
A state "high cost" fund, should one be established by the Legislature in the future. (See 30 V.S.A. § 7515.)

The statutes governing the VUSF can be accessed on the Legislature's Vermont Statutes web page. They include:

30 V.S.A. § 218 for Lifeline discount program eligibilty and enrollment requirements.
30 V.S.A Chapter 88 for laws concerning the VUSF.

How the VUSF is funded

The VUSF statute provides for the imposition of universal service surcharge on all retail telecommunications service provided to a Vermont address. All telecommunications providers must bill their customers for the VUSF charge, and deposit the funds collected through the surcharge in the VUSF fund. The statute caps the surcharge at 2 percent. Each year, the Department of Public Service recommends and the Public Service Board determines the actual rate necessary to meet the funding needs of the various VUSF-funded programs. The rate for July 2004-June 2005 was set at 1.27 percent. The PSB posts the current VUSF surcharge rate on its website annually.

If the 2 percent maximum was ever insufficient to meet the funding needs of the VUSF programs, programs would be funded in order of the bulleted list above. At no time thus far has 2 percent been insufficent to fund all programs.

VUSF Administrator

The VUSF is administered through a contract awarded following competitive bid by the Public Service Board. The current contractor is NECA Services. Instructions and forms needed by carriers to comply with VUSF obligations are posted on the NECA Service website.

The Lifeline Annual Report

The Department of Public Service publishes a Lifeline Annual Report, which contains extensive information about the status of all VUSF-funded programs.