What: FCC Form 502: North American Numbering Plan Numbering Resource Utilization/Forecast Report
When: Due on February 1, 2010
Who must file:
What: FCC Form 499Q: Telecommunications Reporting Worksheet - Quarterly Filing for Universal Service Contributors. Contributors must project 2Q telecommunications revenues and report actual telecommunications revenues for 4Q 2009.
When: Due on February 1, 2010
Who must file: All carriers that are required to contribute to the maintenance of universal support mechanisms. De minimis contributors (those with an annual contribution to the FCC's Universal Service Fund below $10,000) need not file a 499Q but must keep records demonstrating their de minimis status.
REMINDER: Revisions to the 499Q must be filed within 45 days of this deadline.
Continuing its recent custom, the FCC quickly sought comment on two Universal Service Appeals. The issues involved in these appeals include classification of information services, classification of reseller revenues and identification of subscriber line charge (SLC) revenues. Carriers offering similar services take note.
Telepacific Appeal and Request for Stay. In this appeal, Telepacific seeks reversal of USAC's classification of an integrated T-1 service as telecommunications. Telepacific contends that its service is an information service based on the FCC's 2005 Wireline Broadband Internet Access Order. Telepacific also seeks a stay of the instruction that it refile a Form 499-A consistent with USAC's decision. Comments are due January 29; replies February 3.
USF filers should note that this appeal did not result from a USAC audit. Instead, Telepacific attempted to revise its 499-A form, and USAC raised questions about the revision. Ultimately, USAC disagreed with the classification reflected in the revision and rejected the filing. In my view, USAC's rejection is procedurally improper. All Form 499-As are certified by an officer of the company under penalty of perjury. USAC should be obligated to accept and process a revision properly certified by an officer.
Grande Communications. In this appeal, Grande challenges three conclusions made in an audit of its 2004, 2005 and 2006 revenues. First, Grande challenges USAC presumption that Grande assessed an interstate Subscriber Line Charge (SLC). Second, Grande challenges USAC's classification of a wireline broadband Internet access service as telecommunications for a portion of the audit period. Finally, Grande challenges USAC's reclassification of Grande reseller revenues, including at least one instance where USAC is seeking to collect USF from Grande and Grande's reseller customer simultaneously.
Comments on the Grande appeal are due February 18. Replies are due March 5.
Full Disclosure: Kelley Drye represents Grande in its appeal.
What: FCC Form 655: Hearing Aid Compatibility Status Reporting Form
When: Due on January 15, 2010 (electronic filing only)
Who must file: All wireless service providers, including MVNOs. See FCC Public Notice.
The U.S. Court of Appeals for the D.C. Circuit has upheld the FCC's November 5, 2008 ruling continuing the rate cap on CLEC intercarrier charges for dial-up Internet calls. In Core Communications v. FCC, decided January 12, 2009, the Court found "no legal error in the Commission's analysis" and thus affirmed the agency's decision. This ruling presumably ends a protracted set of challenges and judicial examinations of the FCC's efforts to limit CLEC charges for receiving ISP bound calls.
Continue Reading...Yesterday, the DC Circuit held oral argument on Comcast's appeal of the FCC's ruling that Comcast ilegally blocked P2P traffic in its broadband Internet service. By all accounts, the argument went poorly for the FCC. If the FCC indeed loses the case, it could have implications for enforcement of federal Universal Service Fund (USF) contribution obligations too.
Some of the best summaries appear in MultiChannel News, The Blog of the Legal Times and Enterprise Networking Planet. The argument went so poorly that FCC Chairman Julius Genachowski issued what amounts to a "vote of confidence" for the enforcement order. And we know how well those things work out for NFL coaches.
It appears that the FCC might lose because the court feels the FCC lacks authority over broadband Internet service providers. That would have a significant impact on the FCC's activities, particularly with the Commission on the verge of adopting (and then implementing) a National Broadband Plan.
A more narrow ground also could have significant impact on Universal Service. One argument made by Comcast was that the FCC Order is unlawful because the Commission was enforcing a 2005 Policy Statement, not an actual law. The FCC can enforce obligations that are legally binding -- statutes, properly adopted rules and lawful FCC orders. But a policy statement is not itself enforceable. Its enforceability depends on the underlying legal obligations that the Commission is interpreting. If the only "authority" relied upon is the Policy Statement, the FCC would lose.
The Policy Statement is a shortcut to the harder task of adopting specific and enforceable obligations, typically through rulemaking. The FCC is taking a similar shortcut with its Universal Service rules. In a series of FCC Orders, the Commission has created a federal USF and established rules for who must contribute to the Fund and on what revenues. Each year, the FCC releases an FCC Form 499A for contributors to report their revenues for assessment purposes. The 499A comes with 30+ pages of instructions. The instructions purport to mandate a variety of actions by contributors, and they are frequently modified without any change in the underlying FCC rules or orders.
The problem is that USAC acts as if the instructions are binding rules. It is increasingly becoming more aggressive in audits and enforcement actions, relying on specific instructions that never were subject to notice and comment rulemaking, were not adopted by the FCC and could not be appealed. If the FCC loses the Comcast case because the Policy Statement is not enforceable, it will have to return to enforcing actual law. Hopefully, such an outcome will reign in USAC's reliance on non-binding instructions, too. If so, it will not be a moment too soon.
A few months ago, AT&T sued IDT Corp. for failing to pay access charges allegedly due on local-dialed prepaid calling cards. As we expected, IDT has moved the court to stay, or in the alternative, dismiss, AT&T's action. IDT contends that the FCC, not the court, should decide whether access charges apply to this type of call. In a strategic move, IDT seeks a stay of the case, rather than referral of AT&T's complaint to the FCC for resolution.
The case bears watching because AT&T appears to be using the IDT litigation as a test case before proceeding with actions it has threatened against other providers. If IDT is successful, AT&T likely will have to present its case directly to the FCC, perhaps by filing a petition for declaratory ruling, or maybe by bringing a formal complaint before the Enforcement Bureau. Alternatively, AT&T may switch approaches and seek to recover access charges from the CLECs to whom it hands off the calls.
In the meantime, AT&T has continued to send monthly demands to prepaid card providers, allegedly calculating the amount of access charges due from the carrier. We are not aware of any other cases AT&T has filed against prepaid card providers. Yet.
Follow the jump for a discussion of the pleadings on IDT's motion.
Continue Reading...
Tucked inside a semi-annual report released over the holidays, the FCC's Inspector General revealed that its most recent round of audits of the Universal Service Fund included, for the first time, an effort to identify entities that failed to contribute to the fund. The IG contracted with an independent accounting firm to compare state PUC listings of active telecom companies with the USAC 499 filer database.
This led to 50 letters sent in September 2009 to companies that had not filed a 499-A. Of these 50 targets, 23 had responded by the end of the reporting period (Sept. 30). The other group -- slightly more than half -- had not yet responded to the IG's letter. However, this sample was taken from only six states. The IG estimates that as many as 1,000 non-filing companies may exist in 32 states.
Although the IG lacks enforcement power, potential targets of the IG effort should be cautious. The IG likely will refer non-filers to the FCC's Enforcement Bureau, where they could be subject to substantial penalties after an Enforcement Bureau investigation. For example, in January 2009, the FCC proposed a fine against a small provider that filed four months late in the year that it slightly surpassed the de minimis threshold for contributions. The FCC's proposed fine was $672,000, even though the highest amount of USF owed was alleged to be $22,000.
With respect to its contributor audits, the IG reports that 12 audits conducted in 2009 are close to resolution. According to the IG, three of the audits conclude that a wholesale carrier overstated reseller revenues. This has been a frequent subject of USF appeals, leading to one FCC decision in August 2009 (now subject to an application for review) and a half dozen other appeals pending before the FCC. It appears that more are on the way.
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