In June, the FCC approved a package of regulatory measures – Report and Order, Declaratory Ruling, Further Notice of Proposed Rulemaking (“FNPRM”), and Notice of Inquiry (“NOI”) – directed at reforming the IP Captioned Telephone Service (“IP CTS”) program to address concerns about its sustainability. IP CTS is a form of telecommunications relay service (“TRS”) that enables people with hearing loss to communicate by speaking while listening with any remaining hearing ability and reading real-time captions. IP CTS is paid for by the FCC through its TRS Fund and has experienced significant usage growth, now representing almost 80 percent of the costs covered by the Fund. The FNPRM and NOI, which propose fundamental reforms to the IP CTS program, were published in the Federal Register on July 17, 2018, which set the upcoming comment deadlines. Comments on the FNPRM are due by September 17, 2018 and replies by October 16, 2018. Comments on the NOI are due by October 16, 2018 and replies by November 15, 2018.
On September 16, the Federal Communications Commission issued a Notice of Apparent Liability (“NAL”) against PTT Phone Cards, Inc., (“PTT”) for a litany of alleged violations of rules applicable to international telecommunications carriers in general and one applicable to pre-paid calling card providers in particular. In short, the NAL alleges that, for over three years, PTT violated “virtually all of [the] regulatory obligations” applicable to international carriers and one specifically applicable to pre-paid calling card providers. The proposed forfeiture of $493,327 was arrived at through a straightforward application of the Commission’s base forfeiture amounts or penalties that the agency has recently applied for similar violations. While the Commission normally considers mitigating and aggravating factors to adjust penalties downward or upward, in the NAL it did not expressly do so, despite what it called “PTT’s apparent pattern of noncompliance” and “the seriousness, duration, and scope of PTT’s apparent violations.” Instead, it simply proposed standard penalties for each apparent violation, giving a casebook glimpse into what awaits entities that provide international and/or calling card services without first obtaining necessary FCC authority and without making requisite filings with the Commission, contributions into applicable federal funds, and payments of federal regulatory fees. Continue Reading Checking the Boxes: FCC Proposes Forfeiture of Half a Million Dollars against International Prepaid Calling Card Provider
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.
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.
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.
In late May, the Voice on the Net Coalition ("VON") held a series of meetings with FCC Commissioner’s offices concerning VoIP regulations. The Coalition discussed topics affecting 21 pending FCC dockets, and, according to the summary of the meetings, "expressed concern that additional regulation of the IP communications industry could deter investment and innovation …" The Coalition opposed a variety of new regulations:
- The Coalition opposed imposition of intercarrier compensation obligations to VoIP and argued for bill and keep for VoIP traffic;
- The Coalition opposed using advertising revenues to assess TRS obligations on VoIP providers;
- The Coalition opposed requirements to file broadband deployment reports (Form 477) and to apply FCC billing rules to VoIP;
- The Coalition urged a narrow interpretation of new disability access requirements and supported "broad waivers" of such rules; and
- The Coalition opposed the opening of a rulemaking to require E911 for mobile VoIP applications.
The Coalition also attached a chart summarizing FCC actions to regulate interconnected VoIP services. The chart mirrors the summary we prepared back in November of the regulatory obligations of VoIP services. VON’s summary chart identifies 8 pending proceedings proposing to add regulatory obligations to VoIP service providers and details 13 previous FCC orders regulating VoIP services. Since the Coalition prepared its chart, the FCC added one more proposed obligation: a proposal to require interconnected VoIP providers to report their international traffic and revenues. See Kelley Drye’s Client Advisory on the international reporting obligations for more details.