The telecom industry as a whole has undergone extensive changes since the passage of the 1996 Act. Many providers now offer IP based services that deliver voice, data and video. The FCC, however, has struggled with modifications and updates to the current universal service funding mechanisms that are needed to keep up with these changes. Assessments, reporting and distribution methodologies supporting the federal Universal Service Fund (“USF” or the “Fund”) have become increasingly complex and (often) confusing: examples include the ambiguous USF treatment of IP enabled services (e.g., MPLS), the ad hoc assessment of USF on interconnected (but not one-way) VoIP, and the “back of the napkin” safe harbors for assessing USF on VoIP and mobile usage.

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