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

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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