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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
Global Crossing Bandwidth, Inc. (“Global Crossing”), XO Communications Services, LLC (“XO”), and TelePacific Communications (“TelePacific”) have each raised challenges to the FCC’s 2012 Wholesaler-Reseller Clarification Order (FCC 12-134), an order that affects the decisions and practices of all companies either purchasing and consuming or purchasing and reselling telecommunications services. Each challenge raises seemingly simple issues, but if successful could disrupt the FCC’s and USAC’s past enforcement of the carrier’s carrier rule as embodied in the 499 Instructions. The common theme among each petition is that the FCC has been making what amount to significant substantive rule changes for years without proper notice and an opportunity for affected parties to participate and comment.
Marashlian & Donahue, LLC, is pleased to announce that Linda McReynolds, a senior associate with the firm, has achieved recognition as a Certified Information Privacy Professional with a focus on United States ("CIPP/US") private-sector privacy laws and regulations. In her capacity as a CIPP/US, Ms. McReynolds advises clients concerning the protection, use and transfer of personal information across national boundaries.
The FCC recently announced that the proposed Federal Universal Service Fund ("USF") contribution factor for the First Quarter of 2013 will be 0.161 or 16.1%. This amount is a decrease from the Fourth Quarter 2012 contribution factor of 17.4%. 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, 2013 until March 31, 2013.
This week the Federal Trade Commission released a report, based on a review of 400 apps for kids, stating that it would begin non-public investigations of the privacy practices of mobile apps aimed at children for possible violations of the Children’s Online Privacy Protection Act (“COPPA”). COPPA requires children’s website operators to get parental permission before collecting certain personal information, including phone numbers and addresses, from pre-teen users. In conducting its review, regulators found that many apps collect this information and more without providing information to parents about what data is collected, how it is used, and who can access the information.
Today, the Wireline Competition Bureau’s (“Bureau”) Public Notice seeking comments on proposed revisions to the annual and quarterly universal service Telecommunications Reporting Worksheets, Forms 499-A and 499-Q respectively, and the accompanying instructions, was published in the Federal Register. Accordingly, comments will be due on January 11, 2013. The Bureau has not solicited reply comments.
This week the California Attorney General brought the first enforcement action to test California’s Online Privacy Protection Act. The complaint against Delta Airlines, Inc. alleges that Delta’s mobile app, “Fly Delta,” fails to comply with the state’s privacy law. Fly Delta allows users to view flight status and check reservations online. The complaint alleges that the app collects substantial personally identifiable information, including geo-location, photographs, a user’s full name and email address without a clear privacy notice. The Attorney General seeks to prevent Delta from distributing its app without a privacy policy.
This week, the US Court of Appeals for the District of Columbia Circuit upheld the Federal Communications Commission’s (“FCC”) rule requiring wireless providers to make available data roaming agreements to other providers. The Court rejected Verizon’s arguments that the FCC does not have authority under Title III of the Communications Act to promulgate the rule and that the rule improperly treats mobile data providers, which the FCC conceded are information services providers, as common carriers. The Court found that, contrary to Verizon’s claims, the FCC did not rely solely on its authority to act in the public interest, but instead expressly relied on specific delegations of authority in Title III, including its authority to prescribe the nature of service rendered by a licensee or prescribe restrictions or conditions on a licensee and to do so through a rulemaking. Therefore, the Court concluded the data roaming rule falls well within the FCC’s Title III authority.
The next-scheduled FCC Certification must be filed no later than December 31st. This FCC Certification covers the Third Quarter of this year (July 1st - September 30th). 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.
On November 29, 2012, the Federal Communications Commission (“FCC” or “Commission”) adopted an Order streamlining international telephony rules by eliminating regulatory requirements related to the Commission’s International Settlements Policy (“ISP”) and adopting a modified version for Cuba, the only country appearing on the Commission’s “Exclusion List” identifying countries and facilities not covered by the grant of global Section 214 authority under the FCC’s rules.
Earlier today, the FCC released a declaratory ruling holding companies can send confirming text messages to consumers who have opted out of further messages, under specific conditions. The FCC's Declaratory Ruling granted a request by SoundBite Communications, Inc. and confirms that sending a one-time text message confirming a consumer’s request that no further text messages be sent does not violate the Telephone Consumer Protection Act (TCPA) or the Commission’s rules as long as the confirmation text has the specific characteristics described in the petition. According to the FCC, its ruling will allow organizations that send text messages to consumers from whom they have obtained prior express consent to continue the practice of sending a final, one-time text to confirm receipt of a consumer’s opt-out request—a widespread practice among businesses, non-profit organizations, and governmental entities, which many parties in this proceeding, including a consumer group, assert is good consumer policy.
On November 23, 2012, the Federal Communications Commission’s (“FCC”) Wireline Competition Bureau (“Bureau”) released a notification soliciting comment proposed changes to the 2013 FCC Form 499-A, the FCC Form 499-Q, the accompanying instructions. This marks the first time in the history of the Universal Service Fund program that the FCC has adhered to the Administrative Procedures Act by soliciting Comments from the industry prior to implementing a Form 499 and its Instructions.
IMPORTANT CLARIFICATION OF RULES GOVERNING WHOLESALERS AND RESELLERS OF TELECOMMUNICATIONS ANNOUNCED BY FCC: YOUR IMMEDIATE ATTENTION IS REQUESTED; MATERIAL ACTIONS MAY BE REQUIRED TO ENSURE COMPLIANCE AND AVOID EXPOSURE TO LIABILITIES
Yesterday, the Federal Communications Commission (“FCC” or “Commission”) released an Order clarifying wholesalers’ responsibilities under the Carrier’s Carrier Rule (“CCR”). The CCR requires a wholesale provider to treat the revenues of a reseller customer as USF assessable end-user revenues unless the wholesaler reasonably expects that the reseller contributes directly to the Fund. The FCC clarified that under the CCR, to classify revenues from wholesale services as carrier’s carrier revenues exempt from USF contributions, the wholesale provider must either have “affirmative knowledge” or a “reasonable expectation” that its customer is itself contributing to the Fund on revenues derived from those purchased wholesale services.
On November 1, 2012 the FCC issued a Public Notice seeking to update its record on the effectiveness of hearing aid compatibility rules applicable to digital wireless services and handsets. The Commission needs to refresh the record in light of market, technical and regulatory developments that have taken place in the nearly two years since it initiated its comprehensive review of the HAC rules. The current inquiry falls into two broad categories: first, the FCC is seeking to update the record on the adequacy of technical standards for evaluating the hearing aid compatibility wireless handsets; second, the Commission seeks “specific, quantifiable” information about the costs and burdens of the current reporting and enforcement regime, particularly the burdens imposed on smaller providers.
On October 17, 2012, the Federal Communications Commission (“FCC”) published a notice announcing final Office of Management and Budget (“OMB”) approval and the December 16, 2012 effective date of interconnected VoIP outage reporting requirements. As noted in our February 16, 2012 Client Advisory, the FCC initially approved rules extending its existing outage reporting requirements to interconnected VoIP providers in February, subject to OMB review.
On October 16, 2012, the Federal Communications Commission’s (“FCC”) Wireline Competition Bureau (“Bureau”) released an Order denying Bestel’s Request for Review of a Universal Service Administrative Company (“USAC”) decision upholding late fees assessed for failure to make timely Universal Service Fund (“USF”) contribution payments. Bestel became a direct contributor to the USF in 2010. Bestel relocated to Mexico City and updated its corporate address via its 2010 Form 499-A. It neglected, however, to update its billing address.
Leading telecom tax and regulatory firms, TaxConnex, and The CommLaw Group, recently presented to members of the Cloud Communications Alliance (CCA). The presentation focused on the tax and regulatory hurdles facing Cloud Communications service providers and presented a how-to guide for managing their complexities.
This past Friday, California Governor Jerry Brown approved a ban on state VoIP regulation (SB-1161). The legislation would prohibit the California Public Utilities Commission (CAPUC) or any other California state agency from regulating VoIP and IP-enabled services until the year 2020 without a federal mandate.
Earlier today, the FCC's Enforcement Bureau released a Consent Decree resolving an investigation into Ohio-based CLEC, Communication Options, Inc.'s ("COI"), compliance with the Commission's Local Number Portability rules. COI agreed to pay $65,000 and enter into a compliance plan.
Marashlian & Donahue, LLC, The CommLaw Group, recently welcomed Ronald E. Quirk, Jr. to The Commpliance Group, its affiliated regulatory consulting and outsourced compliance services division. Ron is a seasoned telecommunications law and consulting services professional, bringing with him a wealth of experience in diverse areas.
The FCC recently announced that the proposed Federal Universal Service Fund ("USF") contribution factor for the Fourth Quarter of 2012 will be 0.174 or 17.4%. This amount is an increase from the Third Quarter 2012 contribution factor of 15.7%.
The following is a recently published Article on the relationship between sales and communications tax compliance and Mergers & Acquisitions (M&A) in the Cloud Computing and Communications sectors. The Firm is sharing this Article with Clients for informational purposes.
It appears the FCC may finally be prepared to issue orders on several long-pending USF appeals that could have a significant, immediate impact on the industry. However, based on discussions several parties have held with the Chairman and Commissioner’s offices over the last week, the FCC’s decisions may increase the complexity of USF compliance and solidify inequities in USAC’s current policy.
The deadline for payment of the annual FCC regulatory fee for FY 2012 is September 13th. All entities which possess an FCC license must pay the annual regulatory fee by this date or face severe late penalties and possible enforcement action.
The deadline for filing FCC Form 477, the Broadband and Telephone Competition Report, is September 1st. As the FCC pursues implementation of a national broadband plan, data collection through Form 477 will play a significant role for years to come. As such, we anticipate aggressive FCC enforcement of this deadline. All clients providing wireline and wireless broadband internet access, local exchange, and interconnected Voice over Internet Protocol (“VoIP”) services must file Form 477. There are no regulatory exceptions or de minimis qualifications associated with this filing. Therefore, all clients providing any of the aforementioned services to consumers in the U.S. must file Form 477 with the FCC.
In two recent Forfeiture Orders issued to Cardinal Broadband, LLC (“Cardinal”), the FCC clarified that a reseller of Voice over Internet Protocol (“VoIP”) service is subject to the FCC’s VoIP E911 requirements as a “provider of I-VoIP” services. The FCC held that the fact Cardinal relied on its underlying VoIP supplier to provide certain services, including E911, does not preclude Cardinal from being deemed “a provider of interconnected VoIP services” because the FCC does not distinguish between whether a party “own[s] and operate[s] their own facilities, services, or networks” or “outsource[s] some or all of those functions to others.” The FCC therefore found that, as an I-VoIP provider, Cardinal was required to provide E911 service to its customers and failed to do so.
On Friday, July 13th, the U.S. Court of Appeals for the District of Columbia Circuit released a decision upholding the Federal Communications Commission's decision to earmark reclaimed Universal Service fund money towards support for universal broadband through the newly created Connect America Fund. The reclaimed monies were primarily recovered from wireless carriers. The Rural Cellular Association and the Universal Service for America Coalition had challenged the FCC's order.
The deadline to file International Traffic Reports with the Federal Communications Commission (“FCC”) is July 31st.
The deadline for filing FCC Form 499-Q with the Universal Service Administrative Company ("USAC") for the Second Quarter is August 1st.
Two recent Petitions for Review of USAC contributor audit findings further illuminate the critical importance of jurisdictional revenue allocation practices, policies and documentation thereof in relation to FCC Form 499 revenue reporting. The Petitions also reinforce the widely-held perception that USAC auditors are myopically and, at times, unjustifiably focused on reaching determinations which result in revenue reclassifications with upward adjustments to contribution obligations as the outcome.
The FCC released a Notice of Apparent Liability (“NAL”) yesterday against Telseven, LLC, a provider of interstate telecommunications services that is currently in bankruptcy. The Commission proposed a $1.75 Million forfeiture against Telseven and its sole officer and director in his personal capacity.
The FCC recently announced that the proposed Federal Universal Service Fund ("USF") contribution factor for the Third Quarter of 2012 will be 0.157 or 15.7%. This amount is a decrease from the Second Quarter 2012 contribution factor of 17.4%.
As our firm recently advised, on April 30, 2012, a unanimous Federal Communications Commission (“FCC”) released its anticipated Further Notice of Proposed Rulemaking (“FNPRM”) seeking comment on reforming the Universal Service Fund (“USF”) contribution system in an effort to reduce disputes, simplify compliance, and promote competition. The FNPRM includes a number of proposals and issues that stand to have a significant impact on a variety of industry segments.
The California Senate recently voted to advance industry-backed legislation that limits further regulation of VoIP services by the California Public Utilities Commission (“CPUC”) and other state regulatory agencies. Senate Bill 1161 will preempt the CPUC and other state regulatory agencies from expanding regulations over VoIP-enabled voice and data services unless expressly authorized by the Federal Communications Commission (“FCC”) or the state Legislature.
The FCC recently announced a proposed contribution factor of 0.0000254 (0.00254%) for the North American Numbering Plan (“NANP”) for the fiscal year beginning July 1st. The proposed NANP contribution factor reflects an increase from last year's contribution factor of 0.000022.
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.
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.
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.
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.
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.
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.