The Universal Service Fund

A decade old telephone tax intended to help bring affordable service to rural areas has instead turned into something quite different: a bottomless and politically protected well of cash for cell phone companies that do big business in rural America. The Universal Service Fund has collected $44 billion over its 10-year lifetime from a surcharge on the phone bills of nearly every American. The Universal Service Fund was created by Congress in 1996 as part of an overhaul of the nation's communications laws designed to create competition. Specifically, Congress ordered that consumers have access to telecommunications and information services at rates comparable to those charged in urban areas. That was to be financed by a fee added to long-distance bills. The charge may only be a few dollars per month, but it adds up fast.