Reminder: Non-Interconnected VoIP Providers Must Register by December 31
Back in October, the FCC released an order implementing the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA). Among other things, the order expanded the pool of contributors to the Telecommunications Relay Service Fund to include virtually all VoIP providers, including those that did not fit the FCC's definition of "interconnected" VoIP.
To implement this contribution requirement, non-interconnected VoIP providers are required to register with the FCC by filing FCC Form 499-A, which is better known as the form used for universal service fund contributions. (The Form 499-A is used for other revenue-based support funds as well.) Providers must file this form no later than December 31, 2011. At this time, it appears that fewer than a dozen new providers have registered to date.
Continue Reading...FCC Again Supports CLECs in 1996 Act Litigation
One of the trends in 2011 has been the rise in amicus filings by the FCC in litigation matters. This trend is fueled, no doubt, by the Supreme Court's determination in Talk America v. Michigan Bell earlier this year that such interpretations by the agency are entitled to deference by the courts.
The latest example of this once again involves interpretation of the FCC's rules for the provision of unbundled network elements ("UNEs"). In the latest amicus brief, the FCC agrees with CLECs that a BOC is required to permit the commingling of section 271 elements with UNEs obtained via section 251(c)(3).
Continue Reading...It's Official: First Quarter 2012 USF Contribution Factor Rises to a Record High 17.9 Percent
As we warned over a week ago, the USF contribution factor is rising to a new record high of 17.9%. The Commission made it official late today, releasing this Public Notice announcing the new contribution factor for the first quarter of 2012. The nearly 18 percent factor is by far the highest contribution factor in the history of the universal service fund.
One aspect of the new factor deserves special mention. For years, the FCC has employed a Limited Interstate Revenue Exemption (LIRE) for calculation of the contribution obligations of carriers with significant international revenues. This rule, also known as the "88/12" rule, provides that if a carrier's interstate revenue is less than 12% of its total interstate + international revenue, then the carrier pays USF only on its interstate revenue (and no USF on its international revenue). The rule was put in place in response to a court decision that found that USF assessments which exceed a carrier's gross domestic revenue are unlawful.
The current LIRE threshold is set at 12% of total revenues. Every quarter in which the USF contribution factor exceeded this 12% threshold, the FCC has included an invitation to carriers to petition for waiver of the LIRE threshold if their contributions would exceed their gross domestic revenues. No carrier has yet taken the Commission up on this invitation. However, with the spread between the LIRE and the USF contribution factor now nearly 6%, we expect that there may be a few carriers whose percentage of interstate revenue falls between the LIRE threshold and the USF contribution factor. If so, we invite those carriers to contact us to discuss filing a petition for waiver with the FCC.
FCC Proposes $25,000 Fine for Failure to Respond to Investigation
On Friday, the FCC proposed a $25,000 fine against a carrier that failed to respond to a Commission investigation. In the NAL, the Enforcement Bureau stated that Net One International had failed to respond to a letter of inquiry launching an investigation into its practices. According to the NAL, the Bureau sent the letter of inquiry via certified mail, and the letter was signed for at the company's headquarters. In addition, the Bureau attorney handling the investigation sent an email after the response date had passed, providing a second deadline for the company to respond. Thus, the company was given two chances to respond before the Bureau issued the NAL.
The Bureau proposed a fine of $25,000 for the failure to respond, and ordered the company to respond to the letter of inquiry within 10 days.
The NAL is significant in two respects. First, the proposed fine is $25,000, which is an upward adjustment from the $4,000 standard fine contained in the Forfeiture Guidelines. In addition, the fine is greater than the $20,000 failure to respond fines the Bureau had used a few years ago. The Bureau justified the increase amount as appropriate due to Net One's "apparent disregard for the Commission's authority and investigatory process."
Second, the subject matter of the investigation was described as "[Net One's] billing practices and its offering of prepaid calling card services." This investigation was initiated in July 2011, well after its earlier prepaid card marketing investigations, and roughly at the time that the Bureau was presenting to the full Commission proposed $5 million fines for prepaid card marketing practices. The timing suggests that the Enforcement Bureau is not finished with its examination of prepaid card providers. Presumably, more investigations of prepaid card providers are pending at this time.
International Carrier Settles Transfer of Control Violations with FCC
On December 7, the FCC adopted a consent decree with an international carrier resolving several alleged transfers of FCC authorizations without prior approval. This marks the latest in a series of enforcement actions in the area of ownership violations. Many of these involve carriers providing foreign terminations. The consent decree underscores the importance for all regulated carriers to monitor changes in ownership, even pro forma changes, and to seek prior FCC approval for the changes.
Continue Reading...USF Factor to Rise to 17.9%, Will This Finally Lead to Contribution Reform?
This is starting to sound like a broken record. Once again, the USF contribution factor is poised to make a big jump upward to a new record high. Once again, we wonder here whether this will finally be the time that the FCC moves forward to reform the contribution side of the USF. With the volatility and high rates, one must wonder whether the current mechanism can satisfy the requirement that the USF fund be "specific, predictable and sufficient."
Here's the bad news: according to a prominent USF analyst, the FCC will soon announce a first quarter 2012 contribution factor of 17.9%. This is an increase of over 2.5% from the current factor and by far is the highest that the USF rate has ever been.
Continue Reading...FCC to Weigh in on Cell Phone Blocking in Wake of New BART Policy
In response to yesterday's announcement that BART, the San Francisco area transit authority, modified its cell phone blocking policy, FCC Chairman Julius Genachowski announced that the FCC would soon be taking action as well. Genachowski pledged an "open, public process" to provide guidance on lawful wireless service blocking.
If opened, this will be the first formal proceeding the FCC has undertaken to address lawful blocking of wireless signals. In the past, the FCC staunchly denied any requests to sanction wireless call blocking.
UPDATE: This SF Chronicle report states that the FCC commented on BART's policy before it was adopted. According to the report, the FCC suggested language recognizing that an interruption poses risks to public safety and that the benefits of a shut down should outweigh the risks to public safety. While a BART official correctly notes that this is not an endorsement of the policy, it signals an openness (in limited circumstances) to a shut down that the FCC has not shown before.
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