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B-279796 1 (1999-01-04)

handle is hein.gao/gaocrptajen0001 and id is 1 raw text is: h -e GeAtOa E Comptroller General of the United States United States General Accounting Office Washington, DC 20548 Decision Matter of: Universal Service Fee Surcharge File: B-279796 Date: January 4, 1999 DIGEST 1. Telecommunications vendors charge the Army a Universal Service Fee to recover the vendors' universal service contributions, required of telecommunications carriers by federal law. Because the universal service contributions arise as a result of federal, not state, law, the federal government's constitutional immunity from state and local taxation does not arise, and would not prohibit payment of the fee. 2. A pending legal challenge to the requirement of the Telecommunications Act of 1996 that telecommunications carriers make universal service contributions does not compel a conclusion that the Army may not pay Universal Service Fees assessed by carriers to recover, as a cost of doing business, the amounts of their contributions. Presently, no court has held the fees to be illegal, and the United States is vigorously defending the legality of the requirement. DECISION A disbursing officer of the Army at Fort Sam Houston has requested an advance decision concerning the propriety of paying a Universal Service Fee, a surcharge that communications vendors have added to Fort Sam Houston's invoices for telecommunications services. Although this matter is complicated by pending litigation, we have no objection to the Army's payment of the fee if payment is required by its existing contracts and is consistent with the carriers tariff. Background The Telecommunications Act of 1996 requires that every telecommunications carrier that provides interstate telecommunications services shall contribute ... to the specific, predictable, and sufficient mechanisms established by the Federal Communications Commission (Commission, or FCC) to preserve and advance universal service. Pub. L. No. 104-104, § 254(d), 110 Stat. 56, 71-73 (1996). The Act defines universal service, generally, as a level of telecommunications services that

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