Carriers Question Revised Form 499 and Instructions

Sprint Nextel said the proposed revisions to forms 499-A and Q fail to comply with the Paperwork Reduction Act, both procedurally and substantively (http://xrl.us/boaszk). By effectively requiring circuit-by-circuit certifications instead of the industry-wide practice of entity-level certification, the forms “dramatically increase the burden” to carriers without justification, Sprint said. Sprint also criticized the Wireline Bureau for using the forms and instructions to implement “flawed USF contribution requirements.” The proposed changes would “implement inequitable and discriminatory USF contribution obligations on information services” because the proposed instructions redefine “reseller” to include such services, the carrier said. The proposed instructions also could be read as treating the integrated transmission component of wireline broadband Internet service as the provisioning of “telecommunications services,” Sprint said. That would contradict commission precedent by assessing USF fees on a non-segregable component, the carrier said.

Verizon and Verizon Wireless asked the bureau to “clarify the meaning of the proposed reseller certification language” and ensure it doesn’t conflict with the commission’s 2012 wholesaler-reseller clarification order (http://xrl.us/boas26). That order addressed several issues relating to USF contribution obligations of wholesale providers and their customers. It clarified the circumstances where revenue constitutes reseller revenue and, as “carrier’s carrier” revenue, is therefore exempt from contribution to the fund, Verizon said. The FCC’s proposed reseller certification language is inconsistent with that order, Verizon said: The order “makes clear that -- for purposes of determining the filer’s contributions -- the customer is considered a reseller for the entire portion of the filer’s revenue even if the wholesale service is incorporated into an offering that is only in part assessable telecommunications on which the customer contributes,” Verizon said. The new language is “at odds” with that decision, it said. Verizon also asked for clarification on the definition of “affiliate” and the deletion of language regarding gross revenue.

AT&T asked the commission to explain why it proposes to delete a provision in its 499 instructions on affiliate transactions. The FCC offers no explanation, and contributors are “left to guess whether and how they should modify their reporting practices,” AT&T said (http://xrl.us/boaszt). AT&T criticized what it called “premature” inclusion of alternative sample reseller certification language in the instructions. That language was contained in the commission’s further notice of proposed rulemaking on contribution methodology reform released in April, which AT&T and others “expressed serious reservations” about, it said. AT&T instead suggested the commission “work collaboratively with industry to develop revised reseller language” that addresses everyone’s concerns and could be implemented by wholesale providers and resellers.

XO Communications prefaced its comments by cautioning the bureau that its public notice “does not imbue the Instructions with greater legal significance than they enjoy today” -- they are still “merely guidance to USAC and the industry; they are not themselves rules” (http://xrl.us/boas4b). XO said the instructions implementing the wholesaler-reseller clarification order “should be further revised to better reflect the reseller procedures.” The instructions as written “only partially” implement the order’s ruling on a transition period for continued use of the 2012 reseller certification language, XO said.

NCTA said it was worried about “potentially problematic language” in the form instructions on subscriber line charge (SLC) and interconnected VoIP providers. The bureau should change the proposed language to make clear that only providers that collected SLC revenue must separately report it, the association said (http://xrl.us/boas3i). The Independent Telephone & Telecommunications Alliance said a public notice is “inadequate” to let stakeholders provide “informed” comment. “Without additional guidance and specificity regarding the Commission’s proposed revisions to the forms and instructions, ITTA and other industry stakeholders are hindered in their ability to provide an educated response regarding such changes,” the association said (http://xrl.us/boas3r).