8x8 urges Congress to reform the Universal Service Fund (USF) after the contribution factor for Q4 2025 climbs to a record 38.1%. The USF, an $8 billion program that supports broadband for rural and low‑income communities, has been strained by a shrinking voice‑revenue base that has fallen nearly 50% since 2015.
The company notes that the surcharge has risen almost 50% since 2015 while broadband demand has grown, making the current funding model unsustainable for providers and consumers alike. 8x8 argues that modern broadband services should be included in the contribution base to share the cost burden more fairly across the digital economy.
8x8’s own financials illustrate the impact of the rising surcharge. In Q4 FY2025 the company reported total revenue of $177.0 million, down from $179.4 million in Q4 FY2024. Non‑GAAP gross margin fell to 69% from 71%, and non‑GAAP operating profit dropped to $17.7 million from $20.3 million. GAAP net loss narrowed to $5.4 million from $23.6 million, partly due to the transition of former Fuze customers. Core service revenue excluding Fuze grew, but the overall decline highlights the cost pressures 8x8 faces.
CEO Samuel Wilson said the rising USF surcharge could increase operating costs for the company and its customers, potentially affecting pricing strategies. 8x8 has engaged lawmakers and industry peers, submitting comments to the bipartisan working group led by Senators Ben Ray Luján and Deb Fischer, and is part of a broader industry push to modernize the USF to reflect the realities of today’s digital services.
The USF has faced legal challenges, including a federal appeals court ruling that deemed the contribution methodology unconstitutional. The Supreme Court upheld the fund in June 2025, but challenges persist. Trade groups have proposed new revenue sources such as broadband ISPs and tech giants, and 8x8’s call aligns with these efforts to create a more sustainable funding model for broadband deployment.
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