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—COO of a leading virtual
system company
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unit of foreign PTT
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nationwide Hosted
VoIP provider
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of US operating unit
of international multi-media
conglomerate
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provider of long distance,
wireless, point-of-sale and
carrier services
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services
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provider
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of the Americas
Contact Information

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

News and Information
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FCC Solicits Comment on Proposed TRS Rate of 1.053%

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%).

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FCC Addresses VoIP Cramming in Further Notice of Proposed Rulemaking

The Federal Communications Commission (“FCC”) issued a Further Notice of Proposed rulemaking (“FNPRM”) requesting comment on developments of cramming for VoIP customers.

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Comments Sought on Sprint Petition re: Application of Originating Access Charges to VoIP

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. 

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Text of USF Contribution Reform Rulemaking Now Available

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.

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CALEA Compliance Webinar Recording Now Available
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FCC Opens Rulemaking Proceeding to Consider Reforming USF Contribution System

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.

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Comprehensive USF Contribution Reform Rulemaking Set for Late April Vote by FCC

 

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. 

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PaeTec Appeals USAC Revenue Reclassification Decision; Carrier’s Carrier Rule Challenged

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.

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USTelecom Highly Critical of FCC in Calling for Universal Service Contribution System Overhaul

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.  

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Join Us at TeleStrategies 2012 Communications Tax Seminar in Orlando

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

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Federal Trade Commission Releases Final Report on Online Consumer Privacy; Calls on Congress to Act

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.  

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Proposed USF Contribution Factor for 2nd Quarter 2012 is 17.4%

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%.

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FREE CALEA COMPLIANCE WEBINAR: Registration Now Open

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. 

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REGISTRATION NOW OPEN FOR FREE WEBINAR ON CALEA ENFORCEMENT
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Wisconsin Limits USF Contributions to Voice Communications Revenue
The Wisconsin Public Service Commission (“PSC”) recently implemented the state’s Act 22 for purposes of assessing the revenue base for state USF contributions.  Act 22 amended the definition of “telecommunications service” to include only voice communications offerings and not any non-voice data or information service offerings.  According to the Wisconsin PSC, only revenues from voice communications service will now be subject to state USF assessments.
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Canada Imposes 911 Service Requirement on All Local VoIP Providers

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.  

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FCC Form 499-A due April 1st

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).

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Court Declares IDT Liable to AT&T for Access Charges on Local Access Originated Prepaid Calls
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FREE WEBINAR: "Safe Harbor" - How to protect your company from CALEA Enforcement

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.   

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Ad Hoc Coalition Asks FCC to Provide Relief to Carriers Caught in LIRE Trap

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.

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FCC Form 499-A due April 1st

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).

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Quarterly FCC PIU Officer Certification (for Fourth Quarter) due by March 31st

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.

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Industry Representatives Predict Stepped Up FCC Enforcement of CALEA in 2012

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. 

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Network Outage Reporting Requirements Extended to Interconnected VoIP

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. 

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FCC Adopts New Rules for Telemarketing Robocalls

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.

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FCC CPNI Certifications due March 1st
Customer Proprietary Network Information (“CPNI”) Certifications must be filed with the FCC by March 1st. 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.
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FCC Considers Expanding Outage Reporting to I-VoIP and Broadband; Restrictive Robocall Rules also on Tap
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Conferencing Provider Asks FCC to Reverse USAC Refusal to Offset Duplicate USF Contributions

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. 

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Providers Urge FCC to Resolve Uncertainties Surrounding Applicability of USF to MPLS Services

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.    

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USAC Prepares to Expand and Intensify Audits of USF Participants

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.

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Rural Telcos Lobby FCC to Expand Contributor Base as Part of USF Contribution Reform

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.

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The CommLaw Group to Exhibit at IT EXPO

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. 

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FCC Form 499-Q (4th Quarter) Is Due February 1st
Reminder, the deadline for filing FCC Form 499-Q with the Universal Service Administrative Company ("USAC") for the Fourth Quarter is February 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 Fourth Quarter of the following year (October 1st - December 31st) and projected revenue for the Second Quarter of next year  (April 1st - June 30th).
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Comment Cycle Established for Twenty-First Century Communications and Video Accessibility Act FNPRM

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. 

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