FCC Order Expected Soon on Prepaid Calling Card Rule
The FCC is close to issuing an order classifying prepaid calling card services as telecom services subject to Universal Service Fund contributions and access charge payments, Medley Global Advisors said last week. The proceeding grows out of a Feb. 2005 FCC decision that AT&T had to make universal service contributions and pay intrastate access charges on revenues from an enhanced prepaid calling card. AT&T said its enhanced card was an information service, but the FCC ruled it a telecom service and subject to payments.
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AT&T at the time complained that regulatory fees were imposed on its enhanced card while other calling card services are treated as information services and thus not subject to the same regulatory treatments. So the FCC began a rulemaking to look into handling of prepaid calling card services in general. The FCC didn’t comment Fri. on whether the agency is ready to act on that proceeding.
But the issue surfaced recently in a spate of ex parte filings -- particularly the question of whether card providers are obligated for universal service and access charge payments on a forward-looking basis only or retroactively. Sprint Nextel urged the FCC to make its decision retroactive. IDT Telecom, which considers its cards information services, urged the FCC to make any order prospective. IDT “stands by its prior comments that menu- driven prepaid calling cards should continue to be treated as hybrid information services” but if the FCC decides otherwise the policy change should be forward-looking, it said. AT&T last week urged the FCC to rule that “all prepaid calling card services should be subject to access charges and universal service obligations on a forward-looking basis.”
The FCC has decided to bring more calling card revenue into the USF system -- quite timely, since the USF program may see revenue decline in July, Medley Analyst Jessica Zufolo said. DSL providers stop paying in to USF then thanks to changes in the FCC wireline broadband Internet access order. Medley said the FCC is expected to require payment of access charges by enhanced prepaid calling card services on a forward basis. The firm predicted ILECs might seek retroactive access payments in courts as a result of the FCC order. The ruling would put IDT, the largest prepaid calling card provider, on equal footing with “standard” prepaid services such as AT&T’s, Medley said.