A fund that compensates common carriers for providing access to telecommunications services at reasonable and affordable rates throughout the country, including rural, insular and high costs areas, and to public institutions. Common carriers are required by law to contribute to this fund, a cost that many pass on to their customers.
This term describes the financial support mechanisms (a universal fund) that help compensate local exchange carriers or other communication entities to provide access to telecommunications services at affordable rates to rural, insular and other high cost areas, and to public institutions.
Electricity is an essential service. As such, it is important for this service to be available to all consumers. In a competitive market, it is possible that no provider will seek to serve less attractive customers (presumably those that utilize little energy or are located in remote, costly to serve areas). Universal service is the concept that all consumers should be guaranteed the right to service. In the telephone industry deregulation, universal service was guaranteed through assessment of a fee on all retail consumers.