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Marashlian & Donahue, LLC
The CommLaw Group
1420 Spring Hill Road
Suite 401
McLean, Virginia 22102
Telephone: (703) 714-1300
Facsimile: (703) 714-1330
E-mail: mail@commlawgroup.com
The FCC recently solicited comments on the Rolka Loube Saltzer Associates (RLSA) annual payment formula and fund size estimate for the Interstate Telecommunications Relay Service (TRS) Fund. This year RSLA recommends that the FCC adopt a TRS contribution factor of 0.01053 (1.053%). Last year's TRS contribution factor was 0.01056 (1.056%).
The Federal Communications Commission (“FCC”) issued a Further Notice of Proposed rulemaking (“FNPRM”) requesting comment on developments of cramming for VoIP customers.
Today, the FCC issued a Public Notice seeking comments on Sprint’s Petition for Declaratory Ruling concerning the applicability of CenturyLink’s tariffed access rates for VoIP-originated traffic. While Sprint filed the petition in response to a referral from the US District Court considering a dispute between Sprint and CenturyLink, the FCC’s decision could affect the treatment of all VoIP-originated traffic prior to December 29, 2011. Specifically, Sprint asks the FCC to determine that: (1) for period prior to December 29, 2011, the effective date of the FCC’s InterCarrier Compensation Reform Order, filed interstate access tariffs did not impose originating access charges on VoIP-originated calls delivered to the PSTN; (2) intrastate access tariffs do not apply to VoIP-originated traffic because such traffic is jurisdictionally interstate; and (3) Sprint did not violate the Communications Act when it paid CenturyLink $0.0007 per minute for VoIP-originated calls, rather than CenturyLink’s tariffed switched access rates. A separate decision by the FCC late last week to allow local exchange carriers to charge intrastate access rates for intrastate VoIP-originated traffic after December 29, 2011 increases the importance of this proceeding for companies that have historically generated VoIP-originated calls. Therefore, CLECs, prepaid calling card providers, VoIP service providers, and other entities who business includes a substantial amount of VoIP-originated traffic should participate in or monitor this proceeding.
The Federal Communications Commission released the full text of the Notice of Proposed Rulemaking on comprehensive Universal Service Fund contribution reform. Our Firm is in the process of digesting the 140-page NPRM. Already, we have identified numerous issues and proposals that are likely to stimulate vibrant debates among service providers, carriers and a variety of consumer constituencies. As a teaser, one of the Commission's ideas on reforming the Carrier's Carrier Rule and wholesale verification process would involve the adoption of a European-style "Value-Added Tax" model. The Commission is also investigating whether to restrict or prohibit a service provider's ability to pass-through USF and other federal regulatory costs through line item surcharges as a means of promoting "fairness and transparency."
If you would like to receive a Memorandum summarizing and analyzing the key issues, concepts and proposed reforms and regulations being posited by the FCC, please contact Jonathan S. Marashlian at jsm@commlawgroup.com.
In a unanimous vote, the Federal Communication Commission (“FCC”) earlier today approved a Further Notice of Proposed Rulemaking (“FNPRM”) seeking Comment on reforming the Universal Service Fund contribution system in an effort to reduce disputes, simplify compliance, and promote competition.
The Federal Communications Commission ("FCC") schedules consideration of a Universal Service Fund Contributions Notice of Proposed Rulemaking at its monthly Open Meeting, set for April 27, 2012. The FCC will consider a Further Notice of Proposed Rulemaking seeking comment on proposals to reform and modernize how Universal Service Fund contributions are assessed and recovered.
FCC Open Meeting is scheduled to commence at 11:00 a.m. in Room TW-C305, at 445 12th Street, S.W., Washington, D.C. The event will be shown live at www.FCC.gov/live.
On April 3, 2012, PaeTec Communications, Inc. (“PaeTec”) filed a petition for review with the Federal Communications Commission (“FCC”) requesting the reversal of a revenue reclassification decision made in a recent USAC audit. PaeTec disputes USAC’s finding that a large portion of its private line service revenue in 2008 should be classified as interstate telecommunications revenue. PaeTec had classified 100 percent of its private line revenue as intrastate, of which USAC then reclassified in its audit as over 67 percent interstate. USAC was said to have reclassified the revenue as interstate on the basis that private line customers who failed to provide written certifications of their percentage of interstate traffic to PaeTec were presumed by USAC to be carrying entirely interstate traffic according to Form 499-A filing instructions. PaeTec argues that FCC precedent does not support a presumed finding of interstate traffic in such circumstances and also that in any event, USAC’s calculation of interstate traffic in the audit was incorrect.
On March 29, 2012, USTelecom, the trade association representing AT&T, Verizon and other incumbent carriers, filed a sharply-worded ex parte letter with the Federal Communications Commission (“FCC”). In it, USTelecom implored the FCC to fix the broken system for determining Universal Service Fund (“USF”) contributions. USTelecom criticized the current revenue-based contribution methodology as outdated, inequitable, wasteful, and inefficient and pressed the Commission to move ahead with the consideration of a "Connections-Based" contribution model that more accurately reflects the migration away from traditional telecommunications services towards an all broadband network. Recognizing that any major overhaul of the USF contribution system would take many months, if not years, USTelecom urged the Commission to enact more immediate reforms to the current revenue-based USF contribution system to ensure fairness and alleviate the marketplace uncertainties caused by years of unresolved appeals of USAC audit decisions.
You are cordially invited to join The CommLaw Group and The Commpliance Group at the TeleStrategies Communications Taxation 2012 seminar being held in Orlando, Florida at the Peabody Hotel from May 16th –18th.
Learn about our “Cloud Commpliance Solution” in the Exhibit Hall and meet with several of our professionals following their General Session presentation on advanced FCC revenue reporting issues, strategies and opportunities, described below:
Advanced FCC Revenue Reporting: Misperceptions, Mistakes & Missed Opportunities
In a final report released earlier today, the Federal Trade Commission (“FTC”) called upon businesses to step up their efforts to protect consumer privacy; yet the FTC is not holding its breath hoping private enterprises will heed its requests without Congressional action. Which is why the FTC is also asking Congress to pass legislation to better protect consumers' digital data from being misused or shared without their knowledge.
The FCC recently announced that the proposed Federal Universal Service Fund ("USF") contribution factor for the Second Quarter of 2012 will be 0.174 or 17.4%. This amount is a slight decrease from the First Quarter 2012 contribution factor of 17.9%.
The CommLaw Group will host a free, 30-minute webinar covering important developments related to CALEA enforcement on Wednesday, April 25, 2012 at 1:00 PM EST. Gain valuable insight from the industry insiders and former law enforcement officials at Subsentio, a nationally-recognized CALEA compliance firm and Trusted Third Party.
On March 7, 2012, the Canadian Radio-television and Telecommunications Commission (“CRTC”) issued a decision mandating that all service contracts, both existing and prospective, between a Canadian carrier and a local VoIP service provider include the provision that the local VoIP provider and any of its subordinate wholesale customers comply with Canada’s 911 service obligations. In the past, subordinate resellers of local VoIP service who did not contract with underlying carriers had been able to avoid 911 service obligations. Such obligations include informing consumers about any limitations of 911 service from VoIP home phones during power outages and about any inadequacies of 911 service when using nomadic VoIP. Failure to comply with 911 service requirements can result in the CRTC ordering an underlying carrier to disconnect its service to noncompliant VoIP providers.
The deadline for filing FCC Form 499-A, the annual Universal Service Fund (“USF”) reporting worksheet, is April 1st. All registered interstate telecommunications services providers (“ITSPs”) that hold a 499 Filer ID must file this form with the Universal Service Administrative Company ("USAC") by the deadline. Except in very limited circumstances, there is no de minimis exception to Form 499-A, as amounts reported on the form are used to calculate contributions to other federal Funds (e.g. TRS, NANP, LNP Funds and the FCC annual regulatory fee).
You are cordially invited to join The CommLaw Group as we host a free, 30-minute webinar covering important developments related to CALEA enforcement. Gain valuable insight from from the industry insiders and former law enforcement officials at Subsentio, a nationally-recognized CALEA compliance firm and Trusted Third Party.
On March 7, 2012, the Ad Hoc Coalition of International Telecommunications Companies (“Coalition”) filed an ex parte letter imploring the Federal Communications Commission (“Commission” or “FCC”) to take immediate action to prevent the inequitable and discriminatory consequences resulting from the Universal Service Administrative Company’s (“USAC”) policy forbidding de minimis contributors from electing to become direct Universal Service Fund (“USF”) contributors. As described in the Coalition's letter, FCC rules that are intended to mitigate administrative costs and burdens on USAC and service providers whose USF contributions are de minimis (under $10,000 annually) have been misapplied by USAC.
The deadline for filing FCC Form 499-A, the annual Universal Service Fund (“USF”) reporting worksheet, is April 1st.All registered interstate telecommunications services providers (“ITSPs”) that hold a 499 Filer ID must file this form with the Universal Service Administrative Company ("USAC") by the deadline. Except in very limited circumstances, there is no de minimis exception to Form 499-A, as amounts reported on the form are used to calculate contributions to other federal Funds (e.g. TRS, NANP, LNP Funds and the FCC annual regulatory fee).
The next-scheduled FCC PIU Certification must be filed no later than March 31st. This FCC Certification covers the Fourth Quarter of last year (October 1st - December 31st). Pursuant to Federal Communications Commission ("FCC") regulations, all prepaid calling card providers must file quarterly Certifications with the FCC ("FCC Certification") attesting to compliance with specific percentage of interstate usage (“PIU”) reporting and Universal Service Fund ("USF") requirements.
Last week, members of our firm attended a program sponsored by the Federal Communications Bar Association (“FCBA”) entitled, “CALEA Enforcement: Don’t Find Out the Hard Way.” The program was organized by the FCBA’s Homeland Security and Emergency Communications Committee and included several prominent speakers representing both government and private industry views. The purpose of the program was twofold: First, to update the industry on CALEA developments before Congress, including CALEA enhancements being sought by the U.S. Department of Justice. Second, to discuss risks associated with non-compliance, including predictions of increased CALEA enforcement by the federal government in 2012, with specific warnings regarding anticipated FCC enforcement.
On February 15, 2012, the Federal Communications Commission (“FCC”) adopted an order requiring Interconnected VoIP service providers to report significant network outages that meet specific criteria and thresholds.
In response to the high volume of complaints over unwanted robocalls, the Federal Communications Commission (“FCC”) on February 15, 2011 issued changes to its rules for autodialed or prerecorded telemarketing calls made to wireline and wireless phones.
Good faith efforts to comply with the directives of the Universal Service Administrative Company (“USAC”) were punished yet again as disclosed in a recent Petition for Review filed with the Federal Communications Commission (“FCC”). InComm Solutions, Inc. (“InComm”), a provider of call-bridging services, is appealing USAC’s decision to deny its request to offset over $250,000 in USF contribution payments paid by InComm to its supplier, Sprint, during a period in which InComm concedes it was not in compliance with FCC rules requiring call-bridging providers to directly contribute.
On February 6, 2012, representatives of the following Multi-Protocol Label Switching ("MPLS") service providers: Verizon, BT Americas, XO Communications, Orange Business Services and NTT America ("MPLS Providers"), met with staff of the Federal Communications Commission's ("FCC") Wireline Competition Bureau. At the meeting, the MPLS Providers discussed the urgent need for the FCC to resolve legal uncertainties regarding the applicability of Universal Service Fund fees and requirements to MPLS Services.
On February 1, 2012, the Universal Service Administrative Company (“USAC”) submitted the federal Universal Service Support Mechanisms fund size and administrative cost projections for the second quarter of calendar year 2012 (2Q2012), in accordance with Federal Communications Commission (“FCC”) rules. The 2Q2012 report details steps taken by USAC during the past two years to beef up its audit capabilities, budget and resources in response to FCC directives. On its face, the 2Q2012 report indicates that the industry – both on the USF recipient and contribution side – can expect an active and aggressive year of USAC enforcement ahead.
With last year's reforms to the Intercarrier Compensation regime and Universal Service Fund (“USF”) distribution system, moves which clearly shifted the policy focus from the switched telephone network of today to the Broadband networks of tomorrow, the Federal Communications Commission (“FCC”) now stands poised to tackle the sticky issue of how to pay for these reforms. Although the FCC has yet to announce the much-anticipated USF Contribution Reform Notice of Proposed Rulemaking (“NPRM”), powerful lobbies are already hard at work seeking to influence the Commission; none has been more active than the National Telecommunications Cooperative Association (“NTCA”), a trade group representing the interests of rural, independent telephone companies.
Representatives of The CommLaw Group and its regulatory compliance consulting and administration affiliate, The Commpliance Group, will be exhibiting at the Internet Telephony Expo (IT EXPO East) in Miami, FL from February 1 – 3.
On October 7, 2011, the Federal Communications Commission (“FCC”) adopted a Report and Order implementing certain provisions of the Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”). The CVAA was enacted to ensure that people with disabilities have access to the modern and innovative communications technologies of the 21st century. The FCC also released an accompanying Further Notice of Proposed Rulemaking (“FNPRM”) that seeks comment on outstanding issues regarding the implementation of the CVAA.
The deadline for filing the Hearing Aid Compatibility (“HAC”) compliance report, FCC Form 655, with the Federal Communications Commission (“FCC”) is January 15th.All clients providing either facilities-based or resold Commercial Mobile Radio Services (“CMRS”), i.e. wireless telecommunications services, in the United States must file Form 655 by this deadline. Before filing Form 655, all clients must ensure they are compliant with the FCC’s HAC rules, including those concerning sale of handsets and disclosure of handset compatibility on company websites.
Customer Proprietary Network Information (“CPNI”) Certifications must be filed with the FCC by March 1, 2012. Under the FCC’s rules, all providers of telecommunications and interconnected VoIP services must file a CPNI Certification with the FCC which describes, in detail, the policies and procedures a service provider has instituted to safeguard CPNI and any instance of a CPNI-related breach that occurred over the past year.
The FCC recently announced that the proposed Federal Universal Service Fund ("USF") contribution factor for the First Quarter of 2012 will be 0.179 or 17.9%. This amount is a significant increase from the Fourth Quarter 2011 contribution factor of 15.3%, and the highest contribution factor in the history of the Federal USF program.
Unless otherwise notified by our firm, clients may presume the FCC approved the new rate, and that the new rate will be in effect from January 1, 2012 until March 31, 2012.
Detailed information about the methodology the FCC used to set the new contribution factor, along with notices of past contribution factors, can be found on the FCC's website at:
http://www.fcc.gov/omd/contribution-factor.html
CLIENT ACTION ITEMS:
All contribution-eligible telecommunications carriers and interconnected VoIP providers must apply the new factor to all interstate telecommunications revenue received during the effective reporting period and contribute to the USF accordingly by filing FCC Form 499-Q. Clients who file FCC Form 499-Q with the FCC will receive invoices from the fund administrator, the Universal Service Administrative Company ("USAC"), that applies this factor to retail interstate telecommunications revenue.
Contributing telecommunications carriers are permitted to pass-through the USF contribution fee to end-users through the use of a Federal USF line-item on bills. However, under the FCC's Truth-in-Billing rules, contributing telecommunications carriers may not mark up the Federal USF line-item amounts above the current contribution factor. Thus, clients may not, through a Federal USF line-item, recover an amount in excess of the proposed USF contribution factor from the interstate telecommunications charge on a customer's bill.
LIRE-eligible Contributors May Petition the FCC for Waiver
Since the proposed contribution factor exceeds 12 percent (the threshold for the FCC's limited international revenue exemption ("LIRE") ), international telecommunications providers who are LIRE-eligible may face contribution obligations in excess of interstate end-user telecommunications revenue. Clients who face this situation should petition the FCC for waiver of the LIRE threshold.
All LIRE-eligible contributing clients should contact Jonathan Marashlian at The Commlaw Group directly at jsm@commlawgroup.com.
Late Payment Penalties
Clients are reminded that USF contribution payments must be made promptly by the due date listed on monthly contribution invoices, or else they may face interest and penalties from both USAC and the FCC. Failure to make timely payments automatically subjects contributors to substantial interest and monetary penalties. In addition, USAC may bill clients for the cost of collecting overdue contributions and refer the matter to the FCC's Enforcement Bureau for further sanctions.
Clients who would like assistance instituting the new contribution factor for purposes of contributing to the USF, or have FCC regulatory compliance questions in general, should contact Chris Canter at cac@commpliancegroup.com or Jonathan Marashlian at jsm@commlawgroup.com.
If revenue reporting using FCC Form 499-A was not complicated enough, the Federal Communications Commission ("FCC") and USAC, the Universal Service Fund administrator, recently released a revised Form 499-A, accompanied by revised Instructions to implement the Registration, Reporting and TRS Fund contribution obligations of providers of certain types of non-Interconnected Voice over IP services. The new rules became effective on October 7, 2011, a full week before the revised Form 499-A and Instructions became publicly available, thereby affording service providers potentially affected by the new rules no time at all to digest the rules, comprehend the new Form and Instructions, or implement any internal changes needed to accommodate the change in regulatory requirements affecting the entirely new category of services called, "non-Interconnected VoIP."
Earlier today, the Federal Communications Commission’s (“FCC”) Enforcement Bureau (the “Bureau”) released a Notice of Apparent Liability imposing nearly $1 million in proposed forfeitures against two affiliated prepaid wireless carriers for their alleged non-compliance with Form 499 reporting and associated Fund/program contribution requirements.
The CommLaw Group is pleased to announce that attorney Allison D. Rule has been elevated to head of the firm’s Dispute Resolution and Litigation practice. Ms. Rule will also co-chair the firm’s Communications Taxes and Fees Practice with a concentration in state and local taxation of VoIP and other Cloud-based communications services.
Prepaid calling card providers have recently found themselves again under the government’s scrutiny for their marketing and advertising practices. Two aspects differentiate the recent assault from the onslaught of adverse actions that last erupted several years ago. First, it is the Federal Communications Commission ("FCC" or "Commission") and State Attorneys General and not the Federal Trade Commission ("FTC") leading the enforcement charge. Second, at least in the case of the FCC, the target of the enforcement actions has been the Prepaid Service Providers themselves, not merely the calling card distributors.
The CommLaw Group is pleased to announce that attorney Michael P. Donahue has been elevated to partnership in the law practice. In recognition of his achievement and contributions, the firm will become Marashlian & Donahue, LLC, The CommLaw Group.
In a Bureau level decision released on November 4, 2011, the FCC’s Wireline Competition Bureau denied MeetingOne.com’s request for review of a USAC decision that MeetingOne.com’s IP conferencing service is telecommunications.
Per the Federal Communications Commission’s (“FCC” or “Commission”) rules, its Universal Service Fund (“USF” or “Fund”) Administrator, the Universal Service Administrative Company (“USAC”) has authority to verify information reported in FCC Forms 499-A. Initially, USAC employed a formal audit process to verify reported revenues.
On October 9, 2011 the Governor of California signed into law new legislation that requires the California Public Utilities Commission to begin assessing state universal service contributions on Interconnected VoIP providers.
On October 7, 2011, the Federal Communications Commission (“FCC”) adopted a Report and Order implementing provisions of the Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”) that require certain categories of non-interconnected VoIP service providers to contribute to the Telecommunications Relay Services (“TRS”) Fund by October 8, 2011. Affected providers must act immediately to ensure they are taking steps to recover future contribution obligations because fourth quarter 2011 revenues will serve as the basis for TRS Fund contributions for the 2012-2013 funding period.
On October 7, 2011, the Federal Communications Commission (“FCC”) adopted a Report and Order that implements the provisions of Section 104 of the Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”). The CVAA was enacted to ensure that people with disabilities have access to the modern and innovative communications technologies of the 21st century. The FCC also released an accompanying Notice of Proposed Rulemaking that seeks comments on outstanding issues regarding implementation of the CVAA.
Last week Chairman Genachowski announced that he is circulating to the Commission an order that will implement a comprehensive reform of the current Universal Service Fund (“USF”) and existing intercarrier compensation (“ICC”) regime. The order is on the Commission’s Agenda for consideration at its October 27, 2001 meeting.
The FCC recently announced that the proposed Federal Universal Service Fund ("USF") contribution factor for the Fourth Quarter of 2011 will be 0.153 or 15.3%. This amount is an increase from the Third Quarter 2011 contribution factor of 14.4%.
The FCC’s Wireline Competition Bureau is seeking comment on a Petition for Declaratory Ruling filed by GCB Communications, Inc. d/b/a Pacific Communications and Lake Country Communications, Inc. (collectively, “GCB”) regarding the FCC’s payphone compensation rules. GCP filed the Petition on August 9, 2011.
Last month, a small reseller of Global Crossing and Primus wholesale long distance services filed a contributor appeal with the Federal Communications Commission asking for various relief, including an order requiring its wholesalers to refund “excess” Universal Service Fund (“USF”) contribution pass-through charges which had been assessed over the course of several years. Primo's appeal highlights a variety of important issues and potential pitfalls many smaller and de minimis service providers face when dealing with USAC and the USF program.
Currently, the FCC’s VoIP E911 requirements apply only to two-way interconnected VoIP providers. This could soon change. On July 12, 2011, the FCC adopted a Notice of Proposed Rulemaking (“NPRM”) seeking comment on whether to extend the 911 obligations to outbound-only interconnected VoIP service providers. Outbound-only VoIP services allow users to place outbound calls to the PSTN, but not to receive inbound calls from the PSTN. The FCC has never required one-way VoIP providers to provide 911 services. However, in light of the increase in consumer access and use of these one-way/outbound-only interconnected VoIP services, the FCC seems poised to cast its regulatory net to capture outbound-only interconnected VoIP service providers and require them to adhere to the same 911 mandates imposed on two-way interconnected VoIP providers.
On April 8, 2011, the latest attempt to enact federal nexus legislation, the Business Activity Tax Simplification Act of 2011 (BATSA) (H.R. 1439) was introduced by Rep. Robert C. Scott (D-VA) and Rep. Bob Goodlatte (R-VA). A hearing on the bill was held on April 13th before the Subcommittee on Commercial and Administrative Law of the House Judiciary Committee.
Illinois’ Main Street Fairness Act, recently signed into law, requires online retailers with a business presence in Illinois to collect and remit state sales tax on every online sale made in the state. The law took effect on March 10th and has already had an impact in Illinois. Several major online retailers, including Amazon, have dropped their Illinois affiliates since the law was signed.
The expansion of state jurisdiction over out-of- state companies has taken another hit, this time by the Appellate Division of the State of New Jersey.
Recently there has been a significant amount of coverage about the expansion of state efforts to collect sales and use taxes from out-of-state vendors. Several states, including Texas, Colorado, Connecticut, Arkansas, Illinois, Hawaii, Rhode Island, North Carolina, and New York have enacted laws commonly known as “Amazon Laws”—laws that subject online retailers who have no physical presence in these states to sales and/or use tax obligations as a result of the activities of their in-state affiliates.
The U.S. Supreme Court issued two opinions clarifying the criteria that must be satisfied before a court may constitutionally exercise personal jurisdiction over a defendant-J. McIntyre Machinery, Ltd. v. Nicastro and Goodyear Dunlop Tires Operations, S.A. v. Brown. While both decisions involved product liability suits asserted against non-U.S. manufacturers, both have relevance as well for domestic corporations defending lawsuits under any liability theory. This includes liability arising from use of independent distributors and appears to extend to Web based sales as well.
In a recent decision, the U.S. Court of Appeals for the Ninth Circuit confirmed that Federal district courts have jurisdiction over foreign corporations based on their subsidiary’s contacts in the United States.
Although the deadline for seeking refunds of the Federal Excise Tax on communications services expired March 15, 2010 (or September 15, 2010 if extensions to file the 2006 return were obtained), the IRS continues to process many FET refunds.
On June 22, 2011, the Federal Communications Commission (“FCC” or “Commission”) released an order in its proceeding to consider rules to implement the Truth in Caller ID Act of 2009 (the “Act”). The Act makes it “unlawful for any person in the United States, in connection with any telecommunications service or IP-enabled voice service, tocause any caller identification service to knowingly transmit misleading or inaccurate caller identificationinformation with the intent to defraud, cause harm, or wrongfully obtain anything of value.” The Actinstructs the Commission to adopt implementing regulations within six months. On March 9, 2011, the FCC issued its Caller ID Act NPRM seeking comments on its proposed rules. The June 22nd Order adopts the following rules to implement the Act
On June 21, 2011, the Federal Communications Commission (“FCC” or “Commission”) released a Report and Order designed to prevent duplicative program payments to a single individual through the Lifeline and Link-Up programs funded by the Universal Service Fund (“USF”). The Order follows a series of Commission audits into Lifeline benefits which revealed that many recipients had received multiple benefits in contravention of the program rules. In the Order, the FCC clarified that qualifying low-income consumers may receive no more than a single Lifeline benefit, and amended its rules to codify this restriction.
During the 2011 legislative session, the Governor of Florida signed into law the Regulatory Reform Act, a law making significant changes to the Florida Public Service Commission’s ("FPSC") oversight of intrastate interexchange telecommunications companies ("IXCs").
The staff of the South Carolina Department of revenue recently issued a draft ruling concluding that 100% of a bundled service offering in South Carolina is subject to sales and use tax.
Last week, a federal judge in Illinois approved a proposed settlement of a class-action lawsuit brought against AT&T Mobility LLC ("AT&T").
The FCC has requested comment on a Petition for Declaratory Ruling filed by Verizon that asks the FCC to clarify that the cost of certain tasks that use the Number Portability Administration Center (“NPAC”) database but are unrelated to number portability or pooling should be borne directly by the cost-causing providers, rather than shared by all telecommunications carriers.
On May 12, 2011, the FCC adopted a Notice of Proposed Rulemaking (“NPRM”) seeking comment on proposed rules to extend the FCC’s Part 4 outage reporting requirements to Interconnected VoIP providers and broadband service providers.
On May 12, 2011, the Federal Communications Commission (“FCC”) released a Notice of Proposed Rulemaking advocating the elimination of the FCC’s International Settlements Policy (ISP) from all remaining international routes, with the exception of Cuba. In addition, the FCC seeks comment on proposals regarding the application of the Commission’s benchmark policy to select international routes and if the FCC should revamp regulation of anti-competitive behavior in the international telecommunications marketplace
On May 13, 2011, The Federal Communications Commission (“FCC”) released a First Report and Order and Notice of Proposed Rulemaking designed to modernize international traffic reporting regulations. The FCC eliminated several reporting requirements imposed on international carriers and solicited comments on several proposals designed to streamline international compliance obligations, such as consolidating sections 43.61 and 43.82 and adopting simplified annual reports for carriers under a revenue threshold of $5 million.
A Republican staff memo being circulated ahead of this Friday's hearing on "FCC Process Reform" before the Subcommittee on Communications and Technology raises serious concerns about a variety of processes at the FCC. According to the Memo, "[u]nder both Democratic and Republican chairmen, the FCC has fallen into practices that weaken decision-making and jeopardize public confidence." All five FCC Commissioners will be called to testify at the hearing, which will take place on Friday, May 13, 2011, at 9:30 a.m. in the Rayburn House Office Building.
In follow-up to our recent advisory, the Wireline Competition Bureau of the Federal Communications Commission released a Public Notice earlier today seeking comment on a request for guidance filed by the Universal Service Administrative Company (USAC) on the proper classification of text messaging revenues for purposes of reporting and contributing to the Universal Service Fund. Specifically, USAC is seeking guidance on whether text messaging revenues should be reported as telecommunications revenue or non-telecommunications revenue.
On April 26, 2011, the administrator of the Universal Service Fund ("USF"), the Universal Service Administrative Corporation ("USAC") sent a letter to the FCC's Wireline Competition Bureau ("Bureau") asking the Bureau to clarify whether revenue derived from Text Messaging services (also known as "SMS" for Short Messaging Service) is subject to USF contributions.
We are more than just your Regulatory Law Firm. Over the years, many clients have come to know The CommLaw Group as the law firm they turn to first, whenever a regulatory issue arises. We’ve become trusted advisors on all matters regulatory, whether before the Federal Communications Commission or the multitude of state & local governmental agencies with jurisdiction over your communications business. We appreciate your loyalty, faith and trust in our expert professional guidance in these areas. But did you know we also provide a wide variety of Intellectual Property services? We even provide basic trademark and copyright services at predictable rates which compare favorably to LegalZoom's. Ask us for a Menu of Trademark Services and Fees.
In a decision that further empowers and emboldens the Universal Service Administrative Company to dictate the revenue reporting policies and practices of auditees and Form 499 filers, earlier today the FCC's Wireline Competition Bureau ("WCB") released an Order partially denying a request for review of a 2009 USAC contributor audit decision filed by Clear World Communications ("Clear World"). Clear World is a provider of intrastate, interstate and international telecommunications.
In a controversial decision, the Supreme Court of the United States on April 27, 2011, ruled in favor of AT&T Mobility which argued that the Federal Arbitration Act trumped state consumer class action laws.
The FCC is likely to consider at its May 12, 2011 Open Meeting a Notice of Proposed Rulemaking (“NPRM”) that seeks comment on a proposal which would eliminate a broad swath of regulations governing the exchange of traffic between U.S. and foreign carriers known as the International Settlements Policy or “ISP.”
Pursuant to a tentative agenda for an Open Meeting scheduled for May 12, 2011, the FCC will consider a Notice of Proposed Rulemaking (“NPRM”) that seeks comment on a proposal to extend the network outage reporting requirements in Part 4 of the FCC rules to Interconnected VoIP and broadband service providers.
You are cordially invited to join CommLaw Group Partner, Jonathan Marashlian, at the TeleStrategies Communications Taxation 2011 seminar being held in New Orleans from May 25th– 26th. Mr. Marashlian will participate in a panel discussion on Thursday, May 26th. Jonathan will be speaking at a Session Titled: Regulatory, Tax and Business Implications of Recent FCC Decisions Related to Enhanced Communications.
In a recent Order, the FCC’s Enforcement Bureau (“Bureau”) entered into a Consent Decree to terminate an investigation of AST Telecom LLC (“AST”) for alleged violations of the FCC’s transfer of control requirements. In reaching the Consent Decree, AST agreed to make a $35,000 voluntary contribution to the United States Treasury.
Join members of The CommLaw Group during the week of May 23rd – 25th in Washington, D.C. at the 2011 International Telecoms Week (“ITW”). ITW provides the annual meeting point for the wholesale telecommunications community. Our law firm, along with its affiliated regulatory licensing and compliance administration consulting firm, The Commpliance Group, will be exhibiting throughout the week at Booth 654.
The FCC is seeking comments on three related petitions for declaratory ruling raising similar issues concerning the Telephone Consumer Protection Act of 1991 (TCPA). The TCPA is best known for imposing (along with FCC rules) the national Do-Not-Call Registry and company-specific do-not-call lists to protect consumers from unwanted telephone solicitations.
The deadline for filing FCC Form 499-Q with the Universal Service Administrative Company ("USAC") for the First Quarter is May 1st. All non de minimis providers of telecommunications services and interconnected VoIP services are required to complete Form 499-Q and report actual revenue data for the First Quarter of this year (January 1st - March 31st) and projected revenue for the Third Quarter of this year (July 1st - September 30th).
On March 30, 2011, the Federal Communications Commission (“FCC”) released a Public Notice seeking Comments on a Petition for Declaratory Ruling (“Petition”) that is likely to have far-reaching implications for the entire international telecommunications and IP transport industries.
In Ford Motor Credit Company (“FMCC”) v. Chesterfield County (Va. S. Ct., Dkt. No. 092158, March 4, 2011), the Virginia Supreme Court reversed the Chesterfield County Circuit Court’s determination that all gross receipts of FMCC’s Richmond office were generated in Chesterfield County. to telecom taxes imposed by some municipalities on communications services furnished within their municipal boundaries.
On March 2, 2011, the U.S. District Court for the Eastern District of Virginia granted judgment in favor of various LECs affiliated with CenturyLink against Sprint Communications in their dispute over whether Sprint owes access charges to CenturyLink for the exchange of VoIP traffic. The court found dispositive the interconnection agreements (ICAs), which provided that VoIP calls “shall be compensated in the same manner as voice traffic.” Sprint had followed that agreement for many years, but then, in the summer of 2009, began disputing CenturyLink’s invoices for VoIP traffic.
On March 8, 2011, the U.S. Court of Appeals for the Sixth Circuit reversed a Michigan federal trial court’s denial of a challenge by CMC Telecom to a Michigan PUC ruling that AT&T Michigan did not violate the Telecommunications Act by refusing to disclose individualized resale contracts to CMC
Several state universal service administrators have announced modifications to USF remittance forms to gather revenue information from interconnected VoIP providers.
On March 8, Vonage renewed its request for waiver of the FCC rule requiring that applicants for NANP resources be authorized to provide service in the area for which they seek phone numbers. Vonage is seeking a waiver similar to the one the FCC granted to SBC Internet Services, Inc., an interconnected VoIP provider.
On March 9, 2011, the Federal Communications Commission (“FCC”) released a Notice of Proposed Rulemaking (“NPRM”) seeking public input on proposed rules to implement the Truth in Caller ID Act of 2009 (“Act”), signed into law on December 22, 2010.
The FCC recently announced that the proposed Federal Universal Service Fund ("USF") contribution factor for the Second Quarter of 2011 will be 0.149 or 14.9%. This amount is a decrease from the First Quarter 2011 contribution factor of 15.5%.
On March 7, 2011, the FCC released a Public Notice seeking public comment on the Universal Service Administrative Company’s (“USAC”) formal request for guidance from the Wireline Competition Bureau regarding whether wholesale contributors may properly classify carrier’s carrier revenue as exempt from Universal Service assessments based on reseller certificates dated after the Form 499-A filing period.
Representatives of The CommLaw Group and its regulatory compliance consulting and administration affiliate, The Commpliance Group, will be attending the CompTel Plus Expo in Las Vegas from March 20 – 23.
On March 3, 2011, the FCC released a notice proposing rules that would extend Telecommunications Relay Service (“TRS”) participation and contribution obligations to non-interconnected VoIP service providers. The TRS Fund supports the provision of service to individuals with hearing and speech disabilities. The rules would implement provisions of the “Twenty-First Century Communications and Video Accessibility Act of 2010” (the “CVAA”).
On March 1, 2011, USAC formally asked the Wireline Competition Bureau whether wholesale contributors may properly classify carrier’s carrier revenue as exempt from Universal Service assessments based on reseller certificates dated after the Form 499-A filing period.
The Federal Register published today a Notice of Proposed Rulemaking (“NPRM”) adopted by the Federal Communications Commission that seeks comment on proposals to reform the Universal Service Fund (“USF”) and the intercarrier compensation regime.
Efforts to include nomadic Interconnected VoIP providers in the contribution base of state Universal Service Funds (“USF”) are well underway, as Arizona becomes the latest state to extend state USF contribution obligations to nomadic providers.
Earlier this week, the Federal Communications Commission ("FCC") issued a Notice of Proposed Rulemaking ("NPRM") seeking comment on its proposal to reform the Universal Service Fund ("USF" or "Fund") and intercarrier compensation ("ICC") regulatory regimes. While the proposal did not provide many details, it did outline the FCC’s plans for the type of comprehensive overhaul that the FCC, industry and Congress have long-stated are broken and in need of reform.
On February 8, 2011 the Federal Communications Commission (“FCC”) released and NPRM soliciting comment on reform of Broadband and Local Competition Reporting and Data Collection, Form 477.
On the heels of the Federal Communications Commission’s (“FCC”) announcement that intercarrier compensation reform is on the FCC’s tentative agenda for its upcoming open meeting, prepaid calling card providers have stepped up lobbying efforts to educate and inform FCC staffers regarding intercarrier compensation disputes that impact prepaid calling card providers. Specifically, a group of prepaid providers, including IDT Telecom, Total Call International, Inc., and STi PrePaid, LLC, met recently with Commissioner legal advisors and Wireline Competition Bureau staffers regarding intercarrier compensation disputes between prepaid providers and Local Exchange Carriers (“LECs”) regarding the use of local telephone numbers by prepaid calling card providers to connect their customers to the calling card service.
As expected, states are moving quickly to extend state universal service fund contribution requirements to providers of nomadic Interconnected VoIP services. The Nebraska Public Service Commission (“PSC”) released an Order confirming that nomadic Interconnected VoIP providers are required to contribute to the Nebraska Universal Service Fund (“NUSF”). The Nebraska PSC’s Order states that nomadic providers have a three month period to make adjustments to their billing systems and to implement the contribution requirements.
As predicted, efforts are well underway at state public utility commissions to extend state universal service fund contribution obligations to nomadic interconnected VoIP providers. Leading the charge is the California Public Utilities Commission, which on January 13, 2011 released an Order initiating a rulemaking concluding that all interconnected VoIP providers, including nomadic VoIP providers, are required to contribute to California’s state universal service programs.
On December 10, 2010, in Talk America, Inc. v. Michigan Bell Tel. Co., No. 10-313, the United States Supreme Court agreed to hear an appeal of a decision by the Sixth Circuit in Michigan Bell Telephone Co. v. Covad Comms. Co., No. 07-2469 that created a conflict between the Sixth Circuit and the Seventh, Eighth and Ninth Circuits. The case will be consolidated with another appeal from the Sixth Circuit in Isiogu v. Michigan Bell Tel. Co., No. 10-329.
Customer Proprietary Network Information (“CPNI”) Certifications must be filed with the FCC by March 1, 2011. Before filing the CPNI Certification, all affected service providers should ensure they are in compliance with the FCC’s CPNI rules. This is particularly important because CPNI Certifications must be signed by an Officer of the company under penalty of perjury. Therefore, in anticipation of the March 1st deadline, our firm advises affected clients to review their internal policies and procedures regarding the protection and use of CPNI before executing and filing a CPNI Certification with the FCC.
Effective October 1, 2010, sellers of retail prepaid wireless telecommunications services in the District of Columbia were required to collect from consumers a two percent charge on all retail sales of prepaid wireless telecommunications services. The charge, known as the D.C. Prepaid Wireless Telecommunications Charge, applies to prepaid wireless telecommunications services that allow a caller to dial 911 to access the 911 system, and apply regardless of whether the services are provided via a card, remote sales, or by other means such as an authorization code on a receipt.
The deadline for filing FCC Form 499-Q with the Universal Service Administrative Company ("USAC") for the Fourth Quarter is February 1st.
Yesterday, by a 3-2 party-line vote, the FCC adopted network neutrality rules “to preserve the Internet as an open network enabling consumer choice, freedom of expression, user control, competition and the freedom to innovate.” While the text of rules is not yet available, the FCC provided a high-level summary of the three principles that will guide the FCC’s regulation of Internet activity, including Transparency, prohibitions on blocking traffic and no undue discrimination. The FCC proposes somewhat different treatment of wireline and wireless broadband Internet providers, citing the still developing mobile broadband network as reason for introducing network neutrality rules in phases. Both wireline and wireless broadband providers will be subject to a transparency rule, which requires providers to make available their network management policies, and to versions of a prohibition against blocking access to certain services or content. Only wireline providers will be subject to a rule prohibiting “unreasonable discrimination.”
The FCC recently announced that the proposed Federal Universal Service Fund ("USF") contribution factor for the First Quarter of 2011 will be 0.155 or 15.5%. This amount is a significant increase from the Fourth Quarter 2010 contribution factor of 12.9% and the highest USF contribution factor to date.
Jurisdictional lines between federal and state regulation of Interconnected VoIP services are becoming increasingly blurred as states move to assert jurisdiction over both nomadic and static Interconnected VoIP service offerings. The trend toward increased state regulation of these services continues as the Maine and Vermont public utility commissions released orders asserting jurisdiction over the intrastate "fixed" VoIP services offered in those states, and in Illinois where a new law requires providers of fixed or nomadic Interconnected VoIP services to register with the Illinois Commerce Commission (“ICC”).
IP-based communications service providers are advised to be on high alert for increased taxation by states, as federal stimulus funding has dried up and state taxation authorities are pushed to look for other sources of taxable revenue.
As anticipated, on November 5, 2010, the Federal Communications Commission ("Commission") released a Declaratory Ruling granting the petition of the Nebraska Public Service Commission and the Kansas Corporation Commission seeking a declaratory ruling that states are not preempted by federal law from imposing state universal service contribution obligations on the intrastate revenues of nomadic interconnected VoIP providers. The Declaratory Ruling became effective upon its release and was limited to prospective-only relief, which effectively precludes states from imposing retroactive contributions. States are now free to assess USF contributions on revenue derived from nomadic Interconnected VoIP services, subject to the conditions outlined in the Ruling.
On October 8, 2010, President Obama signed into law the Twenty-First Century Communications and Video Accessibility Act of 2010 ("the Act"). The Act aims to ensure access to Internet Protocol ("IP")-based communications and video programming. The Act directs the Federal Communications Commission ("FCC" or "Commission") to issue new regulations to implement its provisions which include mandates for hearing aid compatibility for VoIP and related services (including electronic messaging and video conferencing). Equipment manufacturers and service providers alike must ensure that their products and services are accessible and usable by people with disabilities.
On October 28, 2010, the Federal Communications Commission ("FCC" or "Commission") released a Public Notice, inviting the submission of data to assist the Commission in evaluating the issues raised in its Special Access Notice of Proposed Rulemaking ("NPRM"). In the NPRM, the FCC proposed to examine the level of competition for special access facilities. The Commission sought comment on its pricing flexibility rules, specifically soliciting proposed measures to maintain just and reasonable price cap rates upon expiration of the CALLS plan.
The next-scheduled PIU Report to underlying transport providers is due no later than November 15th. This report will cover the Second Quarter of this year (July 1st - September 30th). Pursuant to Federal Communications Commission ("FCC") requirements, all prepaid calling card providers must report Percentage of Interstate Usage ("PIU") factors, and the call volumes on which these factors were calculated, to those carriers from which they purchase transport services.
On October 26, 2010, the Federal Communications Commission's ("FCC" or "Commission") Enforcement Bureau ("Bureau" or "EB") issued Notices of Apparent Liability for Forfeiture ("NALs") against IDT Telecom, Inc. ("IDT"), Total Call Mobile, Inc. ("Total Call"), MGA Entertainment, Inc. ("MGA") and cBeyond Communications, LLC ("cBeyond") for violations of the FCC's hearing aid compatibility ("HAC") rules. The HAC rules require, among other things, that all wireless handset providers, including resellers, offer a certain number of hearing aid compatible handsets and make available to consumers via labeling on the handset and handset box and in website disclosures, information about the performance ratings of the handsets. The rules also require providers to report to the FCC annually on their compliance with these requirements.
Over the years, many clients have come to know The CommLaw Group as the law firm they turn to first, whenever a regulatory issue arises. We've become trusted advisors on all matters regulatory, whether before the Federal Communications Commission or the multitude of state & local governmental agencies with jurisdiction over your communications business. We appreciate your loyalty, faith, and trust in our expert professional guidance in these areas.
On October 19, 2010, the Wireline Competition Bureau of the Federal Communications Commission ("Bureau") released an order granting in part Network Enhanced Telecom, LLP's ("Network IP") request for review of a 2008 Universal Service Administrative Company ("USAC") audit classifying its revenues as USF-assessable prepaid calling card revenues, and requiring Network IP to reclassify certain wholesale revenues as end-user revenues because its customers failed to provide adequate resale certifications.
Reminder, the deadline for filing FCC Form 499-Q with the Universal Service Administrative Company ("USAC") for the Third Quarter is November 1st.
Our firm's Communications Taxes and Fees Practice provides clients experienced counsel on a wide-variety of federal, state and local taxes, including sales, use, excise and transaction taxes, 911/E911 fees, and other "tax-like" fees applicable to communications services and products. Our lawyers regularly engage in communications tax planning, compliance, risk analysis and mitigation, audit avoidance strategies, audit defense and litigation, rulings, and technical advice.
The FCC recently clarified that section 222 of the Communications Act of 1934, as amended (Communications Act), does not prevent a telecommunications carrier from complying with the obligation in 18 U.S.C. § 2258A to report violations of specific federal statutes relating to child pornography.
On September 22, 2010, the Federal Trade Commission (FTC) testified before a subcommittee of the Senate's Commerce, Science and Transportation Committee and recommended that proposed data security legislation introduced by Senators Pryor (D., AR) and Rockefeller (D., WV) (The Data Security and Breach Notification Act of 2010, S.3742) be modified to extend its requirements and FTC enforcement authority to telecommunications common carriers.
On September 23, 2010, the Federal Communications Commission ("FCC") released its Further Notice of Proposed Rulemaking ("FNPRM") and Notice of Inquiry ("NOI") regarding E911 rule changes and extension of existing rules to additional VoIP and wireless services.
The FCC recently announced that the proposed Federal Universal Service Fund ("USF") contribution factor for the Fourth Quarter of 2010 will be 0.129 or 12.9%. This amount is a decrease from the Third Quarter 2010 contribution factor of 13.6%.
The next-scheduled FCC Certification must be filed no later than September 30th. This FCC Certification covers the Second Quarter of this year (April 1st - June 30th).
Our firm prepared the following Advisory to update clients about ongoing Universal Service Fund ("USF" or "Fund") reporting and contribution obligations. As most clients are already aware, the Federal Communications Commission's ("FCC" or "Commission") rules mandate that all interstate telecommunications service providers ("ITSPs") must contribute directly to the Federal USF if their annual interstate and international telecommunications revenue exceeds $10,000.00. ITSPs with revenue under the $10,000.00 threshold are considered