Why Carriers Should Invest in Traffic Studies to Avoid Safe Harbor Overcharges

In telecom, profitability depends on tightly managing costs while complying with FCC regulations. One hidden drain on revenue comes from relying on safe harbor allocations when reporting traffic for the Universal Service Fund (USF) and related programs.

While safe harbor is convenient, it often causes carriers to overstate their interstate revenue and therefore overpay into federal contribution programs. With the FCC’s proposed contribution factor for Q4 2025 set at 38.1%, the financial impact of these overpayments is higher than ever.

A traffic study can uncover your true traffic mix, reduce your obligations, and free up cash for growth. And working with an experienced outside firm like Advanced Technologies and Services, Inc. (ATS) ensures you capture those benefits safely and effectively.

The Financial Case: How Overcharges Add Up

Here’s a simple illustration of the stakes:

• Assume a carrier reports $1 million in VoIP revenue.
• Using safe harbor, a large share of that revenue is treated as interstate—even if much of it is intrastate.
• At the Q4 2025 contribution factor of 38.1%, every $100,000 of revenue misclassified as interstate leads to $38,100 in excess USF payments.

For many carriers, that translates into six- or seven-figure overpayments every year!!

But Wait Savings May Go Beyond USF

When carriers think about safe harbor overcharges, the focus is usually on the Universal Service Fund (USF). But overstating your interstate traffic inflates more than just USF contributions. A traffic study can also reduce your obligations to including:

1. TRS (Telecommunications Relay Service Fund). Which funds services for people with hearing or speech disabilities. Contributions are based on interstate revenues, just like USF. A traffic study that lowers your reported interstate share directly lowers your TRS contribution.
2. NANPA (North American Numbering Plan Administration) which pays for numbering resources (like area codes and number assignments). Carrier contributions are calculated based on their portion of interstate revenues. By reducing your interstate allocation, you reduce your share of NANPA costs.
3. LNP (Local Number Portability) which supports systems that allow customers to keep their number when changing providers. This too is funded by carriers in proportion to interstate revenues. A traffic study ensures you aren’t paying a bigger slice of this cost than necessary.

The Compounding Effect: While USF is the largest single expense, the combined savings across TRS, NANPA, and LNP can be substantial.

• Example: A carrier overstates $500,000 of revenue as interstate.
  • USF at 38.1% = $190,500 in excess USF contributions
  • TRS, NANPA, and LNP combined could add another 5–10% in extra costs on that same overstated base
  • Total potential overpayment = $215,000+ annually

These savings flow directly to the bottom line—boosting margins, freeing up cash for reinvestment, and strengthening competitive positioning.

Why Use an Outside Firm Like ATS?

While carriers can attempt traffic studies in-house, working with an experienced third-party like Advanced Technologies and Services, Inc. provides distinct advantages including:

1. Expert Compliance Knowledge – ATS designs studies that meet FCC standards for statistical confidence and documentation, minimizing audit risk.
2. Credibility With Regulators – A study performed by an independent expert carries more weight than an internal analysis.
3. Efficiency & Accuracy – ATS uses proven methodologies and specialized tools to capture accurate results without burdening your staff.
4. Favorable ROI – The cost of a study is often a fraction of the savings it generates. Carriers regularly see 5–20% reductions in regulatory contributions.
5. Audit Readiness – ATS provides complete documentation and retains records, ensuring you are prepared if regulators review your filings.
6. Strategic Insight – Beyond compliance, ATS helps you understand traffic trends, aiding in forecasting and business planning.

Why not let us help you Turn Compliance Into a Financial Strategy

Defaulting to safe harbor may feel convenient, but it’s often a costly mistake especially with the contribution factor now at 38.1%. An ATS-conducted traffic study not only protects compliance but also transforms a regulatory requirement into a tool for financial efficiency.

Remember, Safe harbor protects regulators, not carriers. Partnering with ATS is the smarter path to compliance, cost savings across USF, TRS, NANPA, and LNP, and long-term competitiveness.