It is like sausage.
(this a gross oversimplification, there are whole industries of cost 
consultants that specialize in doing the accounting for telephone companies)
We have 5 main categories of expense.
Interstate to interstate
Interstate to interLATA
interLATA to Interstate
InterLATA to interLATA
and Local.

Every nut bolt, washer, time sheet minute and paper cup is accounted for and 
allocated to those expense categories.
If you really want to see the whole chart of accounts go to :47 CFR 32

In the case of the state funds and auditors, they actually come out and do 
things like climb on the roof to see the new air conditioner and to decide 
if you bought one that is too expensive.

We track EVERYTHING.  Then the actual cost of providing each of those 
categories of service is divided by the number of minutes (in the case of 
toll calls) or the number of subscribers (in the case of local service) and 
a revenue requirement figure is generated.

For interstate, we are allowed to earn our revenue requirement plus 11.5% of 
our investment in toll facilities.  In the event that we don't make that 
much money, then the shortage is made up from USF and NECA high cost pools. 
It is private enterprise socialism administered by the federal govt.

----- Original Message ----- 
From: "Randy Cosby" <[EMAIL PROTECTED]>
To: "WISPA General List" <[email protected]>
Sent: Thursday, October 09, 2008 10:24 AM
Subject: Re: [WISPA] gotta love USF!!!!


> Chuck,
>
> Moving off the debate topic a little, I do have an honest question (not
> baiting, I promise) I was wondering if you could shed some light on.
> Maybe the answer is much longer than can be explained on the list.
>
> How is USF contribution calculated?  If I recall, it changes from time
> to time, and seems to be different from company to company.  Just
> curious who decides how much it is and what factors come into the
> calculation?
>
> thanks,
>
> Randy
>
>
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