In response to recent client inquiries, we would like to confirm that the federal Telecommunications Relay Service (“TRS”) Fund contribution factor for 2013 will likely increase from 1.053% to 2.33%, a dramatic increase of 1.277% percentage points.

All interstate telecommunications service providers (“ITSPs”) registered with the Federal Communications Commission (“FCC”) and the Universal Service Administrative Company (“USAC”) who are subject to FCC Form 499-A filing requirements will be responsible for remitting annual TRS Fund contributions based on the prior year’s annual interstate and international end-user telecommunications revenues.

Notably, application of the TRS factor is retroactive. If approved, the 2.33% factor will apply to the combined total of interstate, international, and international-only (that traverse the U.S.) end-user revenues as reported on the FCC Form 499-A due April 1, 2013.  TRS contribution requirements apply to all 499-A filers, even those that qualify for the Federal Universal Service Fund (“USF”) de minimis exemption. Accordingly, the increase will have a material impact on all ITSPs, in particular, predominately international service providers that qualify for the Limited International Revenue Exemption (“LIRE”), and as a result are de minimis and exempt from direct USF contribution obligations.

The dramatic increase is concerning because carriers who recouped TRS Fund fees during the previous year at the lower rate may be adversely affected by the proposed increase.

Client Action Items

Clients who filed a 2013 FCC Form 499-A through The Commpliance Group may contact us to calculate new TRS contribution obligations under the proposed factor.  The Commpliance Group can re-generate an FCC Form 499-A fee summary based upon the new factor. If interested, please contact Chris Canter at cac@commpliancegroup.com

Clients are advised to adjust their regulatory cost recovery charges appropriately to account for this increase. Clients who need additional guidance on legal issues surrounding the new increase, or would like a review of the services subject to TRS Fund contributions, are encouraged to contact CommLaw Group attorney, Jackie Hankins at jrh@commlawgroup.com.In addition, if clients are interested, the firm can file comments in response to the proposed increase to inform the FCC that this substantial increase will unjustly affect carriers who rely on a relatively consistent factor to operate efficiently in the highly competitive telecommunications industry.