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

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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The Government Accountability Office (GAO) recently released a study of the FCC's e-rate program controls.  The GAO study recommended that the FCC conduct a "robust risk assessment" of its e-rate program and revise the internal control structure of the program.  What caught our eye, however, was the commentary on USAC's e-rate beneficiary audits.

The GAO criticized USAC's beneficiary audits as lacking documented and approved policies and procedures.  As a result, "[USAC] management may not have the assurance that control activities are appropriate and properly applied."  It specifically criticized USAC for not using information gathered from the audits to assess and modify the e-rate program's internal controls.  As an example, the GAO noted that of 64 beneficiaries that were audited multiple times over a three year period, 56 percent of the beneficiaries (36 of 64) had the same audit finding in multiple years.

The full GAO report is available here.

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Universal service violations, slamming, "junk faxes" and privacy violations typically draw large FCC fines.  It may seem surprising, then, to learn that unauthorized transfers of control of FCC licenses draw a comparatively small forfeiture amount. 

In this Notice of Apparent Liability released on Friday, the FCC proposed to fine Turner Broadcasting System, Inc. $16,000 for failing to obtain prior FCC approval before closing on a transaction that changed the control of Turner's FCC licensees.  Yes, the transfer was a pro forma transfer of control, and resulted from a single transaction.  But, the Bureau concluded that 49 licenses were transferred without authorization and Turner's violation remained uncorrected for two and one half years.  Nevertheless, the total fine proposed is less than one-third the amount that the FCC has been assessing for a single failure to file a Form 499-Q.  Personally, I think it is time to re-assess the comparative significance of the Commission's forfeitures.   

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Thursday, April 8, 2010, the FCC released its Broadband Action Agenda describing the purpose and timing of more than 60 rulemakings and other actions the agency plans to conduct in order to implement its recently issued National Broadband Plan.  The FCC News Release can be found here and the more detailed, 10 page Agenda is here.  In addition, the Commission issued a one page chart of its proposed action items showing the actions that it hopes to initiate, with each such action listed by the quarter of the year in which it is expected to occur.

Among topics primarily covered by this blog, a few items stand out.  In connection with the Universal Service Fund, reform of USF distribution is scheduled for 2Q 2010 (it is on the April 21 Meeting agenda, actually), but contribution reform is not scheduled to begin until the end of the year.  Access charges, VoIP and other intercarrier compensation issues are given a 4Q 2010 start date.  CLEC interconnection rights with rural ILECs are slated to be "clarified" in 3Q 2010.  Pole attachment reforms -- which presumably will include the formal complaint process improvements we described in a previous post -- are slated for 2Q 2010. 

Continue reading for more detail on the agenda.

REMINDER:  These and other broadband plan documents can be accessed using our Resource Center on the right hand column of this page.

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The U.S. Court of Appeals for the Eighth Circuit has ruled in favor of Vonage and rejected an attempt by the Nebraska PSC to claim regulatory authority over VoIP.  Vonage v. Nebraska PSC, 564 F. 3d 900 (8th Cir. 2009).  Specifically, Nebraska argued that the FCC's original ruling that VoIP is subject to exclusive federal jurisdiction was effectively modified by the FCC's subsequent creation of a "safe harbor" for payment of federal universal service payments by VoIP providers.  Nebraska argued that when the FCC created a presumption that VoIP calls are 64.5% interstate, and directed VoIP providers to make USF contributions on that basis, the inevitable corollary is that 35.5% of VoIP calls are intrastate.  On that basis, the Nebraska PSC sought to levy state universal service fees on 35.5% of Vonage's Nebraska calling.  The Court of Appeals rejected the Nebraska argument, finding that the FCC's preemption of all state regulation of nomadic VoIP was not modified or inconsistent with the FCC's creation of a 64.5% safe harbor for USF purposes.  It is noteworthy, however, that the court focused expressly on "nomadic" VoIP, leaving open the possibility of a different outcome for fixed VoIP services because the FCC's earlier preemption order is based on the nomadic nature of the service being considered in that instance. Nebraska has now petitioned the FCC to modify its order to allow for state assessment of USF on VoIP providers.

Click here to read the Kelley Drye Client Advisory.
 

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