Telecom Law Monitor : Washington D.C. Telecom Lawyer & Attorney : Kelley Drye & Warren Law Firm : New York, Chicago, Connecticut, New Jersey, Brussels

We posted recently on rules the Federal Communications Commissions (FCC or Commission) adopted in January modifying the scope of and particulars of the annual International Traffic and Revenue reports and Circuit Status reports many international providers must file annually.   The effective date of those rules, which will extend certain reporting requirements to one- and two-way international VoIP providers and non-common carrier submarine cable licensees, was made dependent on Office of Budget and Management (OMB) review, which created some uncertainty about whether the new regulations would apply to this year's reports.  

In a Public Notice issued February 7, 2013, the Commission removed any suspense created by its Second Report and Order (“Second Streamlining Order”) in IB Docket No. 04-112 about when the new rules will first apply to the filing of the annual reports.  The Public Notice confirmed that for the annual Traffic and Revenue report and Circuit Status reports due in 2013 (using 2012 data), the current rules will still apply and filers are to proceed pursuant to the procedures and manuals currently in effect, with the possible exception of certain thresholds mentioned below.  The filing deadlines for the reports based on 2012 data are April 1, 2013 and July 31, 2013, respectively.  The Commission expects the new rules will be fully effective in time for the 2014 reports (using 2013 data), and will issue further public notices when the rules in the Second Streamlining Order become effective generally and the new Section 43.62 filing manual is available.  

The Public Notice indicated that the Commission expects to implement the $5 million minimum reporting thresholds for international services resale traffic and international miscellaneous services in time for the 2013 reports (using 2012 data).  Once OMB approves the information collection activities associated with the new thresholds, the FCC will issue a public notice announcing the effective date of the threshold rules.


 

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Earlier this month, the FCC simplified the information that must be provided in certain international reports, action that should be welcomed by many carriers that have been subject to these reporting requirements.  The FCC’s Second Report and Order (“Second Streamlining Order”) in IB Docket No. 04-112 built on its May 2011 First Report and Order and Further Notice of Proposed Rulemaking eliminating or revising certain international reporting obligation.  As a result of this latest action, most international telecommunications carriers will be required, once the new rules take effect, to file annual International Traffic and Revenue reports and Circuit Status reports (collectively, the “Annual International Reports”) under a streamlined Section 43.62 of the FCC’s Rules.  The Second Streamlining Order directs the International Bureau to establish and maintain a consolidated filing manual reflecting the rulings in the Second Streamlining Order.

The Second Streamlining Order does impose requirements on some new classes of providers.  It extends the requirement to file the Traffic and Revenue Report to providers of both international interconnected Voice over Internet Protocol (“VoIP”) service and international “one-way” VoIP services.  One-way VoIP services are those VoIP providers that permit users either to receive calls from or place calls to the public switched telephone network, but not both.  The Second Streamlining Order also requires for the first time a Circuit Status report from all submarine cable licensees, not just licensees that are common carriers, as well as for international common carrier terrestrial and satellite circuits of facilities-based common carriers and the non-common carrier circuits of satellite operators.

The Annual International Reports will retain their current separate filing deadlines -- March 31 for the Circuit Status Report and July 31 of the Traffic and Revenue Report. The effective date of the rule changes is currently unknown; it is at present unclear if the requirements will go into effect in time for the filing of either of the International Reports this year.  The Office of Management and Budget must first approve the reporting and filing changes.  The FCC expressly directed parties in the Second Streamlining Order to continue filing the Annual International Reports pursuant to its existing rules until it announces the new reporting requirements have become effective.

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Compliance with a carrier's CPNI certification obligations has provided steady fodder for this blog, with the annual Omnibus CPNI fines, unusual settlements and consistent enforcement focus from the FCC's enforcement bureau.  With the start of a new year, the CPNI season begins anew.  Yeasterday, the FCC unofficially kicked off the 2012 CPNI certification season with an Enforcement Advisory stressing the requirements of the FCC's CPNI rules. 

The Enforcement Advisory (which is itself almost becoming an annual ritual with the FCC) reminds carriers of the annual March 1 CPNI certification filing deadline, identifies common certification errors and highlights the monetary penalties associated with certification errors and failures to file. The Commission’s issuance of this CPNI Advisory is an indication that the FCC considers the submission of the CPNI certifications to be a high priority., and that its past history of enforcement will not change in the near term   Telecommunications carriers and interconnected VoIP providers should review the advisory carefully to ensure that they are in compliance with the certification obligations of the rules.

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On October 24, the FCC Laboratory published a number of new and updated documents through its Knowledge Database (“KDB”) that liberalize further the equipment authorization process for a number of product types, including Software Defined Radios (“SDRs”).  That same day, the Lab released numerous other KDB publications providing guidance regarding both its RF exposure test procedures applicable to cellphones, smartphones, laptops, tablets, and other categories of devices, and the Commission’s “Permit But Ask” (“PBA”) procedures, which enable telecommunications certification bodies (“TCBs”) to test equipment for compliance with RF emissions limits even though the Commission has issued only partial guidance or where a certain amount of FCC oversight is still considered necessary.  Together, these changes are designed to allow a broader range of consumer devices subject to equipment authorization requirements prior to their being offered for sale, imported, or otherwise marketed to reach the marketplace quickly by allowing importers, manufacturers, and service providers to get them certificated more rapidly than in the past through the TCB process.

This wave of KDB publications, which are effective immediately subject to certain conditions in some cases, comes only one week after the FCC announced that a draft Notice of Proposed Rulemaking (“NPRM”) is on circulation among the Commissioners that would consider (a) codification of and refinements to the FCC’s permit-but-ask (“PBA”) procedure, (b) further articulating the post-grant obligations of TCBs, (c) requiring labs that manufacturers and importers use to test radiofrequency equipment to be accredited, and (d) officially recognizing the latest industry testing standards.  The text of the NPRM is not yet available and it is uncertain when the Commission will adopt the NPRM, which it is expected to do.

Continue reading here . . .

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In several earlier posts, we informed you the FCC had adopted mandatory outage reporting regulations for both facilities-based and non-facilities-based interconnected Voice over Internet Protocol (VoIP) service providers.  The FCC has now established those rules will take effect before the end of the year.  For more details on the VoIP outage reporting regulations, see our full Advisory.

As we explained, the effective date of the new VoIP outage reporting rules would be delayed until 90 days after the Office of Management and Budget (OMB) approves the information collection required by the Report and Order. Well, that process is complete, and the FCC published in the Federal Register today a notice announcing the effective date of the new rules as December 16, 2012.

If they haven't already, VoIP providers should make sure they understand the new requirements and have processes in place to ensure that the FCC's tight reporting requirements can be met in a timely fashion --- some reports must be filed within four hours of an outage commencing. Significant enforcement penalties may apply in cases of non-compliance.  In the past, the FCC has set significant fines for carriers subject to similar outage reporting obligations in a timely fashion. It has used base forfeitures of $40,000 for failing to file an initial outage Electronic Notification, $20,000 for failing to file the subsequent outage reports and $25,000 for filing incomplete or inaccurate reports. Presumably, similar base fines will likely apply to a VoIP provider that fails to comply with the new rules, although perhaps limited to $16,000 per violation per day, since VoIP providers have not to date been classified as telecom carriers.  The prospective fines will vary depending on the circumstances.  But as we note elsewhere, at least for now, VoIP providers may be subject to monetary forfeitures only after they first receive a citation. 
 

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As is customary every year, the FCC recently announced the due date for its annual FCC regulatory fees. Regulatory fees must be paid no later than 11:59 PM on September 13, 2012, Eastern Daylight Time. Most federal licensees and other regulated entities must pay these regulatory fees to offset costs associated with the FCC's enforcement, public service, international, policy, and rulemaking activities. Fee amounts change each year and vary by type of activity. Of particular interest is the Interstate Telecommunications Service Provider Fee which must be paid by most companies, including VoIP providers and audio bridging providers. Fees not paid by the due date are subject to a mandatory 25% late payment penalty.

Please reference the Kelley Drye client advisory for more information. Fact sheets detailing the types of fees, fee codes and payment methods and options can be found on the FCC's website.

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The FCC recently announced revisions to its debt collection process for those carriers that are delinquent in contributing to the FCC’s Universal Service Fund (“USF”), Telecommunications Relay Services Fund (“TRS”) and North American Numbering Plan Fund (“NANP”) (collectively the “Funds”). Under the new procedures, the Fund administrators will forward delinquent accounts directly to the United States Department of Treasury (“Treasury”) for collection (where a 28% collection fee is added), rather than forwarding them to the FCC first. In addition, the FCC will no longer send delinquency notices to contributors for these types of debts.

These revisions could have a significant impact on telecommunications providers, who now may receive only a single notice before an outstanding debt is transferred to Treasury for collection. Contributors will have to exercise greater diligence to ensure that they receive notices of delinquent obligations to the Funds and do not mistakenly incur collection fees.
 

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Compliance with the FCC's revised intercarrier compensation rules adopted in its USF/ICC Transformation Order continues to be a work in progress for many carriers. The rules have generated several waves of questions as the July 1, 2012, deadline for reducing certain intrastate terminating switched access rates fast approaches. On June 6, 2012, the Wireline Competition Bureau released an Order designed to answer a number of questions that had arisen regarding this transition. The Bureau clarified and revised a number of rules that had been troubling both carriers and state commissions as they tried to make sense of the FCC's rules and comply with the transition requirements. Carriers preparing their July 1, 2012 tariff revisions should review this order to ensure their filings are consistent with the FCC rules.

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This post was co-written by Randy Sifers.

In February, the FCC adopted new outage reporting rules for interconnected VoIP providers.  Our story and our advisory on the new rules are available at this link.  At the time, we told you that the rules would become effective 90 days after OMB approved the new information collection.

On Friday, the new outage reporting rules took one step closer to becoming effective.  No, OMB has not yet approved the rules.  However, the FCC published notice in the Federal Register of its Report and Order extending the network outage reporting requirements to interconnected VoIP service providers.  Friday’s publication was made to comply with OMB information collection requirements. The FCC will make a future publication announcing the effective date of the new rule when OMB approval is obtained. 

This notice does have the effect of starting the clock for appeals or petitions for reconsideration of the new outage reporting rules.  Interested parties may file for reconsideration within 30 days of the notice; petitioners may appeal the decision within 60 days.

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As it does every year, the FCC released its update to the annual Form 499-A.  The Form 499-A is used to report revenues for purposes of the federal Universal Service Fund and also for calculating associated revenue-based contribution obligations such as TRS, NANP, LNP and FCC Regulatory Fees.  The Public Notice describes changes to the form, primarily to implement the new requirement that non-interconnected VoIP providers contribute to the TRS fund.  (Non-interconnected VoIP providers were required to register with USAC for this purpose by December 31, 2011.)

The 2012 Form 499-A has been posted on USAC's website.  Go to "universal service links" in our Resource Center on the right-hand side of this page for the USAC Forms page.

REMINDER:  Kelley Drye will discuss these changes, important developments in USF audits and other topics at our 3rd Annual USF Update Webinar next week.  This is our most popular webinar of the year.  Please register today. 

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All telecommunications carriers and interconnected VoIP providers must file an annual report certifying their compliance with the Federal Communications Commission’s (FCC) rules regarding Customer Proprietary Network Information (CPNI).  The report covers calendar year 2011 and must be filed with the FCC by March 1, 2012.  Providers may file CPNI certifications via an FCC web application or via ECFS, mail or hand delivery.

The FCC’s Enforcement Bureau actively enforces the filing requirement, and proposes fines for failure to file the certification at approximately this time every year.  Any company that submits USF revenue reports should ensure that it is in compliance with the CPNI certification requirement.

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As we've discussed, today the FCC adopted rules to require interconnected VoIP providers to report network outages to the FCC.  The text of the FCC's order has not been released, but the order adopts a much narrower outage reporting requirement than originally proposed.  Under the new rules, interconnected VoIP providers will be required to report "hard" outages -- inabilities to complete calls -- that meet thresholds also applicable to traditional telecom services.  This decision continues the trend to treat interconnected VoIP the same as traditional TDM voice services, at least with respect to its obligations.

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VoIP providers, prepare to report outages to the FCC.  Since early in 2010, the FCC has been on a path to impose new outage reporting obligations on providers of interconnected VoIP services, despite industry opposition to the new requirements.  Today, the FCC released its "Sunshine Notice" confirming that it will vote on an order to adopt reporting requirements at its February 15th open meeting.  Here is how it described the VoIP item:

The Commission will consider a Report and Order to extend outage reporting under
Part IV of the rules to interconnected Voice over Internet Protocol (VoIP) service providers. Extended reporting will enable the Commission to fulfill statutory E9-1-1 obligations and help protect the growing number of Americans who rely on VOIP phone service.

The FCC notice is available at this link.  On the 15th, interested persons may view the FCC meeting at this link.

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Here's another VoIP item from our backlog.  On December 16, the FCC's Enforcement Bureau issued an "Enforcement Advisory" reminding providers of their obligation to submit an FCC Form 477 every six months.  The Form 477 collects information about broadband deployment on a Census Tract level.  All facilities-based broadband providers and all interconnected VoIP providers are required to submit the form.

The Advisory lists several "problems" the Enforcement Bureau has noticed with the filings, including:

1. failing to file the form in a timely fashion, if at all;
2. failing to properly certify the form (and provide contact information); and
3. filing incomplete or inaccurate data (including failing to update data from previous submissions

The FCC has not issued any forfeitures for failure to submit a Form 477, nor, to our knowledge, are any investigations into Form 477 compliance pending.  Nevertheless, as a reminder, below is a summary of the Form 477 filing obligations for broadband providers and VoIP service providers.

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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.  

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Here is another compliance item for our readers.  The FCC's rules requiring all tariffs to be filed electronically takes effect today.  For competitive carriers, this means that you must file tariffs via the new electronic portal; paper tariffs are no longer permitted. 

The FCC released two public notices on the tariff filing procedures earlier this week.  (One notice addressed the effective date, the other the filing procedures.)

All competitive carriers must file their existing base tariff within the next 60 days.  (It's probably not a good idea to file in the first few days or the last few days of this window).  Thereafter, changes to the tariffs must be filed electronically.  Operator service providers, if there are any still out there, also must file the base tariff electronically. 

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Yesterday, the FCC released an order cancelling more CPNI fines proposed in its Omnibus CPNI Forfeiture Order.  Because proposed fines for failing to file the CPNI certification have become an annual event, this is a good time to remind telecommunications carriers of their obligation to file the CPNI certification that is due annually on March 1.

If for any reason, your company is a telecommunications carrier or interconnected VoIP provider and you have not filed the certification for calendar year 2010, you should do so as soon as possible.  And, since this usually is the time during which the Enforcement Bureau sends out its CPNI Letters of Investigation, if you've received a letter, do not delay in responding.  Your window to present evidence and negotiate a settlement will close near the end of February.

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In June, the FCC adopted an order requiring all carriers (not just incumbent carriers) to file FCC tariffs via an electronic portal.  The FCC announced today that the new filing requirement will become effective on November 17th.

For carriers with FCC tariffs, you must file your base tariff within 60 days after November 17th.  Anticipating potential server issues, the FCC encouraged carriers not to wait until the 60th day to make these filings.

For Operator Service Providers -- if there are any of you still out there -- informational tariffs must also be filed within this 60 day window.

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If you missed last night's deadline for making FCC regulatory fee payments, there's good news.  The FCC extended the deadline by 48 hours;  Fees are now due by September 16 at 11:59 pm. 

Late payments after that date are subject to a mandatory, non-waivable late fee of 25% of the amount due.

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Yesterday, the FCC held its "Workshop/Webinar" on the pending proposal to extend the outage reporting requirements to interconnected VoIP and to broadband service providers.  We've noted several times that the FCC staff appears to be in favor of extending these rules.  At yesterday's workshop, two FCC Commissioners made statements that also signal their support.

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Interconnected VoIP provider Ooma suffered a three-hour outage late last week.  Ooma identified the cause of the outage as "an extremely rare power failure at a portion of our data center," but the effect of the outage may have a much broader impact.  The outage comes only two weeks after VoIP providers opposed extension of the FCC's outage reporting rules to them.  Timing, as they say, is everything.  In this case, the timing of the outage appears to be unfortunate.

The Ooma outage may assure FCC staff that they are on the right track in requiring reporting of such outages in the future.  Just last week, the Public Safety Bureau announced it was holding a "Workshop/Webinar" on the extension of the reporting requirements to VoIP and broadband providers.  The portion of the workshop devoted to outage reporting is described as examining how public safety agencies and critical infrastructure industries rely on communications "and how outages of interconnected VoIP and broadband Internet service providers could affect their vital work."  It looks like the FCC needs no convincing of the wisdom of requiring new outage reporting by VoIP providers. 

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As in years, past, we're tracking the FCC Regulatory fees for you.  The Regulatory Fee is an annual assessment mandated by Congress to recover most of the FCC's cost of doing business.  Regulatory fees are recovered directly from the entities the FCC regulates.  As I've noted before, the FCC collects nearly half of its fees from telecommunications carriers, an amount that I believe is disproportionate to the FCC's overall activities.

The due date for regulatory fees varies from year to year, but the FCC must collect regulatory fees before the end of the fiscal year on September 30.  This year, the FCC announced that the fee is due on September 14th by 12 midnight.   As with the past few years, the FCC does not mail invoices and payments are due on-line.  Also, a late fee of 25% of the amount due is assessed on all late payments (no exceptions).

See Kelley Drye's client advisory on the topic for more information.  For those paying regulatory fees, see the links below for more detail on where and how to pay the fees.  As a reminder, our Resource Center contains helpful links to the FCC and other sites of interest to regulated entities.

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Form 499Q: Quarterly Telecommunications Reporting Worksheet

Carriers required to contribute to federal universal service support mechanisms must report their actual and projected end user and wholesale revenues for each calendar quarter by filing Form 499Q on a quarterly basis. The Form 499Q filing, providing historical revenue data for April 1 through June 30 and projected data for October 1 through December 31, is due to USAC by August 1, 2011.

Form 502: North American Numbering Plan Numbering Resource Utilization/Forecast Report

Carriers that receive numbers from

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Implementing the Truth in Caller ID Act passed last December, the FCC adopted rules prohibiting the fraudulent manipulation of caller ID information.  These so-called anti-"spoofing" rules track the statutory language to prohibit any person from "knowingly transmit[ing] misleading or inaccurate caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value."  The Commission also released a report to Congress recommending additional legislative changes to strengthen the spoofing protections.

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Last month, we noted that the FCC is proposing to expand outage reporting obligations to interconnected VoIP providers, broadband Internet access providers and to Internet backbone providers.  The new rules propose reporting based on latency and jitter, and effectively would establish a minimum service quality for broadband networks.

Yesterday, the FCC published notice of the new rules in the Federal Register.  Comments on the proposed rules will be due on August 8, with reply comments due on October 7.  In addition, parties wishing to comment on the paperwork reduction requirements associated with the rules, may do so by August 8.  Those comments are due to the Office of Management and Budget (OMB), not the FCC.

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As we discussed previously, the FCC is proposing to extend outage reporting obligations to interconnected VoIP providers, broadband Internet access providers and to Internet "backbone" providers.  With the release of the text of the Notice of Proposed Rulemaking, we now know the specific triggers the FCC is proposing to use for these providers.

In a first, the FCC is proposing to set the triggers based on packet loss, average round-trip latency and average jitter measurements.  This proposal essentially would set minimum service quality standards for IP-enabled services -- another first for the FCC.

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As we noted earlier this week, the FCC is moving ahead to expand its reporting obligations for telecommunications outages.  Touting the outage reporting rules as a 911 service protection, the FCC proposed to expand its outage reporting rules to require interconnected VoIP and broadband Internet service providers to submit reports to the FCC, as wireline, wireless, cable and satellite providers must today.  Indeed "resilience" and "reliability" were the buzzwords of the presentation before the Commission. 

5/16 UPDATE:  The FCC released the text of its proposal, which would set a service quality standard for IP-enabled services for the first time. 

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It has taken nearly a year since the FCC's Public Safety Bureau first started laying the groundwork, but the FCC is poised to consider expanding its outage reporting rules to cover interconnected VoIP communications and broadband Internet access providers.  The Commission will consider a Notice of Proposed Rulemaking to extend the outage reporting rules at its May 12 Commission Meeting. 

This item has been moving forward under the radar of most VoIP and broadband providers.  As we told you back in July, the Public Safety Bureau sought comment on how to apply its outage reporting obligations to interconnected VoIP services and broadband Internet access services.  The Public Notice produced only a handful of comments and replies.  Even in the few days before the FCC announced its meeting agenda -- typically a very busy time for those with an interest in an order -- only three ex parte notices were filed on the proposal.  The minimal level of interest won't last long, however.  Once the NPRM is released this week, a much larger universe of interested parties is likely to appear. 

Note:   Also on the May 12th agenda are proposed revisions to two international service compliance obligations -- the FCC's settlements policy and its Part 43 reporting requirements for international traffic.  International carriers should pay close attention to both items. 

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According to the FCC's weekly list of pending items on circulation, the Commission appears ready to resolve a longstanding petition by an interconnected VoIP provider to cancel its 2007 FCC regulatory fee.  The ruling could have impact on future regulatory fee assessments, but the specific relief relating to 2007 (if the petitioner is successful) is likely to be limited to the petitioner.

See below for more on the pending action.

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As we've noted previously, the U.S. Department of Justice has urged the FCC to take an expansive interpretation of the Truth in Caller ID Act of 2009.  In comments filed last week, the Department continued its effort to have the FCC apply the rules to VoIP providers, including those not subject to any FCC rules today.

In its comments in response to the FCC Notice of Proposed Rulemaking, the Department urged the FCC to adopt rules regulating Caller ID spoofing providers directly.  It contends that this authority is rooted in the Truth in Caller ID Act of 2009 itself and in the Commission's "ancillary" authority over non-common carriers (the same authority at issue in the Comcast net neutrality case).  The Department does not explicitly mention non-interconnected VoIP providers or one-way VoIP providers in its comments, but its arguments would extend to any service provider offering spoofing services. 

The Department's comments are available here.

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In response to the passage of anti-spoofing legislation late last year, the FCC recently adopted a Notice of Proposed Rulemaking to tighten rules relating to the "spoofing" of caller ID information.  The Commission is seeking comments in late April and early May, which would make it tough for the Commission to meet the legislation's six-month deadline for the adoption of implementing rules.

The NPRM contains a surprising proposal to bypass the ordinary enforcement processes the Commission uses.  See below for that and other highlights of the proposal.

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Despite many high-profile forfeiture proceedings, significant outreach by the FCC and even a new app to facilitate filing, the level of CPNI certifications filed this year was on a par with 2010. 

Last year, we reported about 3,000 CPNI certifications filed during the filing window.  This year, 2,858 submissions were made through 3/2/11.  While many filers certified on behalf of multiple USF filers, this total still is about a thousand carriers below the number of active USF filers as identified in USAC's most recent contribution factor report and is well below the 6,700 filers in USAC's database. 

It appears that the FCC has achieved about as much compliance as it is going to receive from the universe of required filers.  Now, the question is whether it will pursue more $25,000 fines from the remaining (mostly small) entities that failed to file a certification. 

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On March 1, the FCC's Wireline Competition Bureau released its revised Form 499-A, the Telecommunications Reporting Worksheet.  This Worksheet must be used by telecommunications providers and interconnected VoIP providers to report annual 2010 revenues for USF, TRS, NANPA, LNP and FCC Regulatory Fee assessments.  The Form 499-A is due by April 1, 2011.

The 2011 Form 499-A Instructions mark the Bureau's first major revision to the Instructions since the FCC began using the Form 499-A in 2000.  The Bureau has substantially reorganized the Instructions and consolidated some of the discussions.  As a result, a comparison of this year's Instructions to the 2010 Instructions is not an easy task.  We will continue to review the Form and expect to discover any changes over the next few weeks.  Filers should consult their regulatory counsel prior to filing their 2011 Form, just to be sure.   

For the benefit of our readers, we post here the FCC Public Notice, the revised Form 499-A and the revised Instructions.  These forms also are available on the Universal Service Links page of our Resource Center.  For easy "two-click" access to these and other regulatory resources, bookmark our site. 

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Customer Proprietary Network Information Certifications

All telecommunications carriers and interconnected VoIP providers must file an annual report certifying their compliance with the Federal Communications Commission’s (FCC) rules regarding Customer Proprietary Network Information (CPNI). The report covers calendar year 2010 and must be filed with the FCC by March 1, 2011.

The FCC’s Enforcement Bureau recently released a FCC Enforcement Advisory addressing the importance of making timely and compliant filings and noting that filers now have the option of filing CPNI certifications via a new FCC web application, in addition to filing via ECFS, mail or by hand delivery.

Form 477: Local Competition and Broadband Report

The Local Competition and Broadband Report, containing data as of December 31, 2010, must be filed by March 1, 2011. The report requires the submission of information regarding broadband connections in individual states.

Who Must File:
(1) ILECs or CLECs that provide local exchange service to one or more end user customers;
(2) facilities-based providers of mobile telephony services that serve one or more mobile telephony subscribers;
(3) entities (including all commonly-owned or commonly-controlled affiliates) that are facilities-based providers of broadband (i.e., faster than 200 kbps, in at least one direction) connections (including both wired lines and wireless channels) to one or more end users in a state; and
(4) providers of interconnected VoIP services that provide interconnected VoIP service to one or more subscribers in a state.

Reporting Basis:
In addition to specific reporting requirements contained in the Form 477 Instructions, for all broadband technologies other than terrestrial mobile wireless, filers must report broadband subscribership information by Census Tract.

Filing Process:
The Form 477 Report must be submitted via an FCC web-based interface and filers will need to use their Federal Registration Number (FRN) and associated password to access the system.

REVISED Form 499-Q Quarterly Telecommunications Reporting Worksheet

Providers required to contribute to universal service support mechanisms must report their actual and projected end user and wholesale revenues for each calendar quarter by filing FCC Form 499Q on a quarterly basis. Filers making revisions to the February 1, 2011 Form 499-Q filing must submit the revisions to the Universal Service Administrative Company (USAC) no later than March 18, 2011.

REVISED Form 499-A Annual Telecommunications Reporting Worksheet

All providers of interstate telecommunications service and all common carriers are required to file FCC Form 499-A with USAC each year with limited exceptions. Filers making revisions to their previous year’s Form 499-A Telecommunications Reporting Worksheet filing which result in a decreased contribution must submit the revisions to USAC by March 31, 2011.
 

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In late December, Congress passed new Anti-Spoofing legislation.  As we told you at the time, the Act requires the FCC to enact implementing regulations within 6 months.  In anticipation of that rulemaking, the U.S. Department of Justice's Criminal Division submitted a letter to the FCC with its recommendations for the regulations.

The DOJ letter is described in more detail below.  Most notably, DOJ recommends verification obligations be imposed on providers of spoofing services and proposes an expansive definition of "IP-enabled Voice Service" that would impose obligations on services heretofore not subject to FCC regulations.  If the FCC agrees, new classes of entities would be subject to compliance obligations relating to Caller ID spoofing.

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For the past few years, telecommunications carriers and interconnected VoIP providers have been required to file annual certifications of CPNI compliance in WCB docket 06-36.  These certifications are due by March 1 each year -- and this year is no exception.  Failure to file a certification has led to significant proposed fines from the FCC.  Proposed fines have been issued at $100,000,  $20,000 or $25,000, depending upon when the FCC issued the order.   We would not bet on this year's $25,000 standard fine being reduced this year, what with the deficit to contend with and all.  And, although the FCC recently settled some CPNI-related actions for as little as $250, the agency could impose a fine as high as $150,000 which can translate into a fine of $1.5 million under the FCC's "continuing violation" method of jacking-up fines. 

Earlier today, the FCC released an "Enforcement Advisory" reminding its subjects of the filing requirement and its intention to "strictly" enforce the rules (or to at least go after those who don't file or fail to file properly).   The Advisory should soon be available here (it wasn't at the time of our post)

Notably, the FCC is making available a new web application for filing this year's CPNI certifications.  Filers can still use the FCC's electronic comment filing system or paper filing process, if they prefer one of those methods.  The new app interface is available here. 

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The following FCC forms are due on or before February 1, 2011:

Form 499-Q Quarterly Telecommunications Reporting Worksheet

Carriers required to contribute to universal service support mechanisms must report their actual and projected end user and wholesale revenues for each calendar quarter by Filing Form 499Q on a quarterly basis. The Form 499-Q filing reporting historical revenue for October 1 through December 31 of 2010 and projected revenues for April 1 through June 30 of 2011 is due to USAC by February 1, 2011.

Note: Revisions to this Form 499-Q filing must be filed within 45 days of the February 1, 2011 filing due date.

Form 502: North American Numbering Plan Numbering Resource Utilization/Forecast Report

Carriers that receive numbers from the North American Numbering Plan Administrator (“NANPA”), pooling administrator or other carriers must file the Form 502 to report numbering usage and forecast future numbering resource needs. Reports for the six month period ending December 31, 2010 are due to the NANPA by February 1, 2011. 

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Two developments last month portend a more difficult time for entities "spoofing" caller ID information.  On December 22, President Obama signed into law the Truth in Caller ID Act of 2009 [sic], which makes it unlawful for a person to transmit misleading or inaccurate caller ID information with an intent to defraud.  In addition, the FTC is seeking comment on rule changes to strengthen the caller ID provisions of its Telemarketing Sales Rule (TSR). 

Descriptions of both developments are provided below.

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Our post about the unique enforcement posture of interconnected VoIP quickly became the most popular post on the Telecom Law Monitor.  One person asked if we could elaborate on the differences in regulatory treatment between traditional telecom services, interconnected VoIP and non-interconnected VoIP (like Skype).   In response, we prepared a chart comparing applicability of the major telecom obligations to both types of VoIP.

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What:   FCC Form 499Q: Telecommunications Reporting Worksheet - Quarterly Filing for Universal Service Contributors.  Contributors must project 1Q telecommunications revenues for 2011 and report actual telecommunications revenues for 2Q 2010.

When:  Due on November 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. 

See the KDW Client Advisory for more information.

REMINDER:  Revisions to the 499Q must be filed within 45 days of this deadline. 

REMINDER:  CMRS and interconnected VoIP providers that rely on traffic studies instead of the jurisdictional safe harbor must submit their studies quarterly.

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AT&T has joined the ranks of petitioners seeking to overturn the Wireline Competition Bureau's tough stance on contributors' late-filed USF forms.  On September 13, AT&T joined Airband Communications in seeking Commission-level review of the Bureau's Denial Order. 

Note:  A third carrier, Airnex Communications, filed a petition for reconsideration of the Denial Order. 

AT&T asserts that the Denial Order is inconsistent with other orders granting waivers of Form 499 filing deadlines.  For good measure, AT&T also asks the FCC to act on its 5-1/2 year old petition to reverse the 1-year amendment deadline that it missed in this instance. 

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Last week, we posted an entry about the tough stance the FCC's Wireline Competition Bureau is taking on late-filed Universal Service Forms submitted by contributors.  One of the parties whose USF appeal was denied, Airband Communications, has filed an application for review of the Bureau decision.  The Commission yesterday asked for comment on the request.   Comments are due September 30 and October 15. 

The FCC's quick action is unusual in one sense:  the deadline for petitions for reconsideration or applications for review of the Denial Order is not until September 14.  Other parties to the same order may file additional petitions on the same issue.

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In stark contrast to the Bureau's more liberal waiver policy for recipients of Universal Service Funds, the Wireline Competition Bureau recently released orders affirming a tough stance for contributors who miss USF filing deadlines.  In the Waiver Order, the Bureau granted two waviers of the deadline to file 499-A revisions.  In the Denial Order, the Bureau denied ten requests for similar waivers.  The difference?  In the Waiver Order, the Bureau found "special circumstances" -- complex revisions undertaken after a merger and late-filing due to the 9/11 terrorist attacks.  By contrast, in the Denial Order, the Bureau characterized the reasons for late-filing as "simple negligence."

The Bureau's stance is summarized with this quote from the Denial Order:

We reaffirm the importance of filing revisions to FCC Forms 499 promptly and within the windows established by the Commission's rules and requirements.  In order for USAC to process the thousands of forms it receives each year and for contributors to know that their contributions will not dramatically change each year on account of late-filed revisions, filers must comply with the deadlines we have established for filing and revising FCC Forms 499.

As a public service, we remind readers:  Corrections to the quarterly estimates (499-Q) are due within 45 days of the due date.  Revisions that reduce USF liability for a year (499-A) are due within one year of the April 1 499-A filing date.

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It's official -- FCC regulatory fees are due on August 31.  Here are the links you will need to make payment by the deadline:

FCC announcement of the August 31 deadline

FCC public notice -- Payment methods and procedures

FCC public notice - Fee filer system

FCC public notice -- ITSP fees (with payment code)

FCC public notice -- Commercial wireless fees (with payment code)

FCC Regulatory Fee website

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In July, we reported that the FCC had adopted its FY 2010 regulatory fee schedule.  In past years, regulatory fees were due in September, usually in the third week of the month.  However, it looks like this year's fee will be due significantly earlier -- by August 31, 2010.

The first hint of an earlier due date appears in the FCC Regulatory Fee Order released on July 9.  The order did not establish a due date for regulatory fees, but the Commission stated that it intended to collect fees "during an August 2010 filing window."  (see paragraph 1).  That made us curious, but not convinced.  Last week, however, the FCC released a public notice concerning fees for its radio and TV licensees.  That public notice states that the media services fee is "due no later than 11:59 PM, ET, on August 31, 2010."  This seems a pretty good indication that fees for all filers will be due earlier than in years past.

Given that late-paid regulatory fees are subject to a mandatory, non-waivable 25% late payment penalty, carriers should plan accordingly.  

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Following on the release of the 2010-11 TRS Fund contribution factor, the Commission today released its final regulatory fee schedule for FY 2010.  The Commission adopted a telecommunications provider fee that is slightly lower than it proposed in April.  The regulatory fee for telecommunications providers (including audio bridging providers) is $0.00349 per revenue dollar reported on the April 1, 2010 Form 499-A.

The Commission acknowledged that telecommunications providers pay 46% of all regulatory fees, which several carriers had argued is a disproportionately large percentage of the total amount collected by the FCC.  (And I agree.)  Recognizing these concerns, the Commission announced that it would be releasing a Further Notice of Proposed Rulemaking to "rebalance" its regulatory fees in the future.

Regulatory fee payments will be due by the end of September and are subject to a 25% late payment penalty if not paid on time.  As with last year, the FCC will not mail bills to telecommunications carriers.  Carriers are required to check the FCC regulatory fee web page for payment information before the September due date. 

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We have a classic "man bites dog" story for you today:  The FCC announced that its contribution factor for the fund that supports the Telecommunications Relay Service -- a telecom assistance service for persons with hearing or speech disabilities -- is decreasing by nearly 50%.  Whereas last year's TRS contribution factor was 1.1% of telecom revenues, the 2010-11 factor is only 0.585% of telecom revenues.

However, this rate was lowered in part by a one-time application of a refund from the 2009-10 fund.  Carriers can expect a slight increase in July 2011, after the one-time refund is exhausted.

The new rate is effective as of July 1.  Carriers subject to the TRS fund (basically, any entity that files a FCC Form 499) should see the lower rate on their next invoice from the TRS administrator.

Kelley Drye's client advisory on the TRS reduction is available here.

The FCC order setting the TRS contribution factor is available here.

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Despite issues over the FCC's jurisdiction in light of the Comcast decision, the FCC's Public Safety Bureau took a step toward possible extension of the FCC's outage reporting requirements to broadband service providers and providers of interconnected VoIP services.  In a July 2 Public Notice, the Bureau seeks comment "in advance of" a possible Commission rulemaking proceeding.  The comment request in many ways presumes that the outage reporting rules should apply, and asks a number of questions about how they could apply and what changes might be necessary in light of the different technologies involved.  Clearly, the Bureau is seeking to do its homework before the Commission initiates a rulemaking proceeding.

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Yesterday, the FCC launched a review of its data collection practices, which it termed its "Data Innovation Initiative."  Most relevant to the scope of this blog is the inventory of compliance obligations released by each FCC Bureau.  The FCC's notice highlights just how extensive the reporting obligations are for carriers and other regulated entities.

The Data Innovation Initiative public notice is available here.  As described by the FCC, the Initiative is designed "to modernize and streamline how [the Commission] collects, uses and disseminates data."  Accompanying the initiative are three public notices establishing comment periods concerning the data collection requirements adopted by each of the main three bureaus -- Wireline Competition, Wireless Telecommunications and Media.  Each bureau's public notice is accompanied by an "inventory" of data collection activities approved by the Office of Management and Budget ("OMB").  The inventories list the following number of data collection requirements:

Wireline Competition Bureau inventory:  104 data collection requirements

Wireless Telecommunications Bureau inventory:  96 data collection requirements

Media Bureau inventory:  140 data collection requirements

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On April 13, the FCC released its proposed schedule of FY 2010 FCC Regulatory Fees.  By law, the FCC is obligated to collect $335 million in fees in FY 2010 from the entities that it regulates.  This order identifies how the FCC proposes to allocate the fees.  Among the highlights:

• The regulatory fee for telecommunications carriers increases to $0.00351 per dollar of interstate and international revenue.  The FCC projects that it will collect $157 million from telecommunications carriers, 57% of the total it will collect in regulatory fees.  (For my views on the proportionality of this, see my earlier post here.)
• As with last year, the FCC will not mail invoices to telecommunications carriers.  Carriers must submit the fee payment by the deadline. 
• Audio bridging providers must make regulatory fee payments.  However, the FCC again mistakenly refers to audio bridging providers as common carriers (see fn 26). 

The Commission has requested comment on these proposals.  It will adopt a final regulatory fee schedule in July.  Regulatory fee payments will be due by the end of September and are subject to a 25% late payment penalty if not paid on time.

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As of COB yesterday, 3070 unique CPNI submissions were made in the FCC's annual CPNI certification docket.  That number is almost the same as the 3,107 CPNI filers in 2009.  However, it still is about 500 fewer than the number of active USF filers, according to USAC's most recent report, and is over 3,000 entities fewer than USAC has in its filer database.  It looks like the FCC's Enforcement Bureau will still have some work to do to track down potential CPNI violators.

For those who failed to file the certificiations, be warned that last year, the FCC released an Omnibus CPNI NAL proposing to fine over 600 carriers $20,000 each for failing to file the required annual certification or for filing a non-compliant certification.  This year, the fine has increased to $25,000, at least according to two NALs released late last week (available here and here).  No, this is not an inflationary increase.  Instead, the Bureau reasoned that carriers were on notice of the requirement and had failed to file in past years as well.  Therefore, the action this year was more culpable and deserving of a higher fine.

If you didn't file your 2010 CPNI certification, you should do so soon.

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UPDATED -- FORM 499 RELEASED

The FCC's Wireline Competition Bureau announced the new FCC Form 499A today.  This form, which must be used to file the April 1 annual revenue report, includes several potentially significant changes.  Audio bridging providers (conference service providers) and those close to the de minimis threshold are most affected.

As of COB yesterday, only the announcement was available.  The 499A itself will be released today and I will update this post when it is available.   UPDATE:  The new Form 499A is available here.

Follow the jump for a discussion of the changes.

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What:   Annual CPNI Certification pursuant to Section 64.2009.   Carriers must certify that their procedures comply with the FCC's privacy rules, disclose complaints about CPNI breaches and identify actions taken against pretexters.  The certification must be signed by an officer of the company and based on the officer's personal knowledge.  In addition, the certification must be accompanied by a statement describing the company's CPNI policies and explaining how those policies comply with the rules. 

Where:  Certifications are to be filed in FCC docket no. 06-36.

When:  Due by March 1, 2010

Who must file:  All telecommunications carriers and all interconnected VoIP providers.  Filing obligation applies to carriers who are de minimis for USF purposes.  Filing obligation does not apply to private carriers. 

WARNING:  Last year, the FCC proposed base fines of $20,000 to companies that failed to file certifications or that filed certifications that did not comply with the rules.

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What:   FCC Form 502: North American Numbering Plan Numbering Resource Utilization/Forecast Report

When:  Due on February 1, 2010

Who must file:  Required if carrier has received numbers from NANPA, a pooling administrator or other carrier.  Subscriber toll-free numbers are not reported.  Filers include ILECs, CLECs, 500-service providers, paging companies, wireless carriers, STS providers, satellite service providers and resellers of these services.

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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.

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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.

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