A Universal Service Fund (USF) fee may be applied to your account for certain Twilio usage. This guide explains the USF fee, how it applies, and where to see your charges.
To read more about additional applicable taxes in the United States, see Does Twilio charge sales or telecommunication tax?
What is the USF Fee?
The Federal Universal Service Fund (USF) is a federal fund that ensures the availability of affordable communications to underserved populations. The Federal Communications Commission (FCC) requires companies providing interconnected VoIP and telecommunications services to retail customers, including businesses and residences, to contribute to the USF. All retail customers based in the United States purchasing Twilio interconnected VoIP or telecommunications services are subject to a USF pass-through fee.
The FCC’s USF program aims to preserve and advance universal access to telecommunications and internet services in rural and high cost areas. Specific beneficiaries of the USF are low-income residential customers, libraries, and schools as well as consumers and healthcare providers in rural America. Any entity providing telecom and/or VoIP services within the United States must contribute to the fund in addition to federal, state and local regulatory fees and taxes.
You can find more information about the Universal Service Fund at: www.fcc.gov/general/universal-service
Why are you passing USF fees through to me?
Twilio International Inc. is registered with the FCC as an interconnected VoIP provider and is therefore required to contribute a portion of its interstate and international end-user telecommunications revenue to the USF.
Which Twilio services are subject to USF?
USF will be applied to telecom and/or VoIP consumption of US Elastic SIP Trunking (US Inbound, Outbound & Toll-Free), US PSTN Connectivity (for Flex), and Programmable Voice US Toll-Free (US Outbound & Inbound) services. Only the Interconnected VoIP portion of the these products will be subject to USF:
- Elastic SIP Trunking (US) 69% software / 31% iVoIP
- Programmable Voice Toll Free (US) 62% software / 38% iVoIP
- PSTN Connectivity for Flex (US) 79% software / 21% iVoIP
Notice: Bifurcation rates are subject to change. USF will only be billed to companies based in the United States.
How is USF calculated?
USF contribution rates vary quarterly (e.g. 3Q2020 = 26.5%) and can be found on the FCC website. Here's how to calculate USF for the current year:
USF Fee (%) = Safe Harbor rate (64.9%) * iVoIP revenue bifurcation (see above)
* USF rate (26.5%)
Isn’t Twilio responsible for regulatory obligations like USF?
Twilio may have its own obligations for the services that it sells, depending on the nature of those services, but it cannot assume the regulatory obligations of its customers for a couple of reasons.
First, Twilio might sell your company services that are not regulated that you might use to create a voice offering that is regulated. We have no way of knowing exactly how you use our services.
Second, even if we sell you a telecommunications service or other services that are subject to regulation, Twilio’s compliance with its own regulatory obligations does not relieve our customers from complying with regulations that apply to the voice services they provide.
Although there are a few exceptions, in most cases retail providers of telecom and/or VoIP services have to meet federal and state regulatory obligations on their own and cannot rely on their wholesale provider for those obligations.
How can I be exempt from USF?
If your company files the FCC Form 499-A and pays USF contributions directly to the USF as a provider of telecommunications, your company may qualify for an exemption from USF pass-through charges that we impose on USF-assessable services. Please complete the USF Exemption Form, and then email it along with your Account SID to email@example.com. Please note that you are required to renew this exemption certificate annually.
Where can I see the USF charged on my invoice?
You will see this increase in the Tax-Based Charges section of your invoice.