USF Safe Harbor is Costing You Money
In our regulatory work, we’re often surprised by how many providers don’t know that they can lower their USAC obligation with a USF Traffic Study to their actual Percent of Interstate State (PIU) rather than using the FCC’s Safe Harbor rate. Safe Harbor is a standard number that assumes that a pre-determined percent of a provider’s calls (64.9% for VoIP, 37.1% for Wireless) were interstate or international in nature. In our experience, we’ve found that carriers’ actual PIUs are typically around half of the FCC’s Safe Harbor percentage.
What is a USF traffic study?
A USF traffic study is a statistically valid analysis of your call detail records (CDRs) that calculates your actual Percent of Interstate Usage (PIU) for Universal Service Fund reporting—instead of the FCC’s default safe harbor rates of 64.9% for interconnected VoIP and 37.1% for wireless. Reporting an inflated interstate mix can raise what you and your customers pay into USAC.
Why Safe Harbor Still Costs Carriers Money
The Federal Universal Service Fund (USF) is funded by contributions tied to interstate and international telecommunications revenues. The FCC sets a quarterly contribution factor; your assessable base is the jurisdictional slice that qualifies—not “all revenue.”
If you cannot or do not measure actual jurisdiction, the FCC allows safe harbor defaults. Those defaults were built for convenience, not accuracy. For many VoIP and wireless providers, real customer traffic is far more local/intrastate than safe harbor assumes.
Risks of Relying on Safe Harbor
- Inflate reported interstate/international revenue
- Increase USF contributions passed through to customers—or absorbed as margin loss
- Push borderline carriers over the de minimis contribution threshold, triggering direct USAC billing and quarterly Form 499-Q work
How an ATS USF Traffic Study Works
- Free sample / preliminary analysis — Send a subset of CDRs. ATS estimates whether a full study is likely to beat safe harbor and provides a fixed-scope quote.
- Collect CDRs — Full sample for the period that will support Form 499 reporting. ATS handles messy, multi-vendor formats.
- Classify Jurisdiction — Intrastate, interstate, international (and related handling per methodology).
- Compute PIU to the USAC Requirement — Designed for no more than 1% margin of error at 95% confidence, with documented sampling/estimation and bias controls (per USAC Form 499 training / instructions).
- Deliver an Audit-Ready Report — Prepared in the required format for submission to USAC, typically about one to two weeks after data receipt (per ATS FAQ).
- Apply Consistently — Use results on Form 499-Q forecasts and the annual Form 499-A for the same calendar year; retain supporting records as required
The same CDR foundation can also support adjacent analytics needs via ESAP CDR Analytics.
USF Savings Calculator
Universal Service Fund Webinar – 2025
Our VP of Solutions Engineering Ryan Guthrie partnered with Jonathan Marashlian from the CommLaw Group and David Rubenstein from Wolters Kluwer to discuss the current state of the Universal Service Fund and Traffic Studies. Other topics discussed include;
- The Current State of the USF
- Data Retention and Record Keeping
- Alternative Revenue Allocation Methodology
- Traffic Studies
- Remaining Compliant and Competitive
Different Providers, Same Benefits
- VoIP and Wireless companies have an extremely high safe harbor rate of 64.9%, and 37.1%, respectively. In our history of traffic studies, most actual PIUs don’t even come close to these safe harbor rates.
- De Minimis carriers that are close to the FCC’s threshold use traffic studies to validate that they are indeed de minimis. If smaller providers use the safe harbor rate, there’s a much higher chance that their percent of interstate or international revenue will be over the de minimis threshold.
To be sure that you’ll benefit from a traffic study, we offer a free analysis on a subset of data to get a good idea of how low your actual Percent of Interstate Usage is.
Download USF VoIP Case Study
What Carriers Say…
USF Resources
What’s Next for the USF?
Blog
The wheels are turning on USF reform, and recently the FCC took small steps forward by asking Congress for authority to expand the contribution pool. Commissioner Brendan Carr predicts that if nothing is done, the contribution factor can hit 75% within four years, and some experts believe that it could be up to 40% in 2023.
Current Quarter’s Contribution Factor
USAC
“The contribution factor is the percentage of end user revenue that will be contributed to the Universal Service Fund to support the universal service programs, as established by the FCC. The contribution factor changes every quarter.”
USF Traffic Study – Wireless
Case Study
Wireless providers contribute to the Universal Service Fund (USF) with a Safe Harbor rate of 37.1%. Providers have to pay the USF Tax themselves, pass the increase to their customers, or take a closer look at their actual percentage of interstate usage.