Federal Universal Service Fund Reporting

The Federal Communications Commission (“FCC”) is responsible for developing policies and procedures to ensure the adequate financing of universal service support mechanisms, interstate relay services, the administration of the North American Number Plan and the shared costs of local number portability.

Currently, FCC Forms 499-A and 499-Q serve as the FCC’s primary tools for monitoring telecommunications industry participation in the funding of all of the federal universal service support mechanisms, as well as the Agency's federal regulatory fee program.

It is extremely important that Form 499-A data be reported accurately and completely.  Reported revenues will form the basis of financial assessments levied against the reporting entity. The administrators of the federal universal service support mechanisms, the Universal Service Administrative Company (“USAC”), the National Exchange Carrier Association (NECA), Welch & Company and NeuStar, review and analyze Form 499-A and Form 499-Q data to calculate the overall financial needs of the federal Universal Service Fund (“USF”), the interstate Telecommunications Relay Service Fund (“TRS”), the North American Numbering Plan Fund (“NANP”) and the recovery of Local Number Portability (“LNP”) costs.

The Fund Administrators assign a proportional financial assessment to each contributing entity to meet those funding needs. Thus, a reporting entity that inadvertently overstates its universal service contribution base will end up paying more than it is legally required. Compounding the problem of any such inadvertent statements are FCC rules that restrict reporting entities to a limited window within which to identify misstatements or errors in revenue data.  Revisions to an Form 499-A must be filed within 12 months of its original due date.  There is a 45-day window within which to revise an incorrectly-filed FCC Form 499-Q.

Inadvertent understatement of contribution base revenues can also have serious adverse consequences. The FCC's Enforcement Bureau actively prosecutes reporting entities that understate contribution base revenues, especially where failure to comply with the Form 499-A reporting rules appears willful, or where such errors occur repeatedly.

For a more detailed explanation of the USF/499 Reporting requirements, you may download a copy of our 499 Management Guide.