CTIA Asks FCC to Provide More Clarity on New USF Rules
CTIA asked the FCC to make clear that carriers won’t have to make potentially significant retroactive payments to the USF because of confusion over the definition of “toll revenue” on a key reporting form. CTIA filed a petition for declaratory ruling at the agency, seeking guidance on questions tied to the agency’s latest USF contribution order, approved at the June agenda meeting (CD June 22 p1).
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“With the new Commission order there’s as much if not more ambiguity than before on this,” said a regulatory attorney who represents carriers: “It has created a lot of angst.” Petitions for reconsideration of the order are due at the FCC next week.
The June order raised the wireless “safe harbor” and tightened the rules governing when a carrier can pay into the USF an alternate amount based on traffic studies. At the same time, it provides a whole paragraph of guidance defining toll traffic as the term applies to wireless carriers. The CTIA asked the Commission to clarify that this is the comprehensive definition for toll traffic going forward. “This is an issue that predates the order,” said a 2nd regulatory attorney: “There’s a discrepancy between language in an earlier order and the instructions on the form that carriers use to report their revenues for USF purposes.” USF contributions are based on a percentage of a carrier’s interstate toll revenues.
Significant retroactive payments by some carriers are possible under a worst case scenario for the carriers if the FCC finds that carriers under-reported toll revenue in the past because they relied on another definition. CTIA estimated that this year wireless carriers will collect $2.5 billion from their subscribers to be paid into the fund. “The Commission has made clear that it will impose significant forfeitures and penalties on carriers that shirk their reporting and contribution obligations,” CTIA said.
Prior to the 2006 contribution order, the Commission had never defined what it classifies as reportable toll revenue for wireless carriers. Instructions to the reporting worksheet refer to telecom services “that enable customers to communicate outside of local exchange calling areas.” But how this applies to wireless was never clear, CTIA said.
“The ‘local exchange’ is generally an element of wireline LECs’ networks; it is not generally used by wireless carriers with respect to their end-user billing,” CTIA said: “Armed with only this limited direction, wireless carriers have made good-faith decisions over the last 9 years about whether revenue should be reported in the toll category.” Moreover, wireless carriers usually offer national calling plans with minutes that can be used to call anywhere in the nation, which also makes definitions more difficult.
The CTIA also asked the FCC for additional guidance on traffic studies, which under the revised rules must now be submitted by carriers who use the studies to demonstrate their actual interstate vs. intrastate revenue for the purposes of assessing USF fees. The Commission, for example, should clarify that CMRS carriers submitting “actual revenue information,” whether relying on traffic studies or another method, must submit underlying data only when requested to do so, CTIA said.
“Because of the high stakes in play in universal service reporting, it is important that the Commission clarify its expectations going forward and put to rest concerns that its new requirements in each of these areas might be applied retroactively, upsetting carriers’ reasonable reliance on the Commission’s prior orders,” CTIA said: “These issues all appropriately can be addressed in a declaratory ruling.”