USAC, the Universal Service Fund Administrator, recently implemented a program administration policy change with implications for all telecommunications providers that prematurely enter the market prior to registering and obtaining their Filer IDs.
USAC’s Form 499-A Initial Registration (and Filer ID procurement) process has always required service providers to: (A) disclose the Month and Year in which they first provided telecommunications or interconnected VoIP services in Line 228 of the Form 499-A and (B) certify the truthfulness of the information contained in Form 499-A under penalty of perjury. However, until very recently USAC would issue a Filer ID even if the service provider disclosed a “start date” that preceded the current year.
In a recent change of administrative policies and practices, USAC will no longer issue a Filer ID in these circumstances. Instead, USAC will withhold issuance of a Filer ID pending the applicant’s submission of all prior period Form 499-As. The notice from USAC detailing this change follows:
Thank you for submitting FCC Form 499 for ________ to register this filer with USAC and obtain a new Filer ID. USAC at this time cannot process your request for the following reason(s):
Line 228 – To be compliant with FCC rules and regulations, a Form 499-A is required for each year that the company has generated telecommunications revenue, not just the current year.
We urge all telecommunications and interconnected VoIP service providers, in particular VoIP Wholesale Platform providers that rely upon retail Interconnected VoIP resellers to deliver services, to heed this change in USAC policy. All downstream retailers should be informed of the new USAC policy to avoid delays in Form 499 Registration and procurement of Filer IDs. Furthermore, was advise any service provider that is currently non-compliant, i.e., offering service, but lacking a Filer ID, to carefully review our firm’s Primer on the Processes & Risks associated with the USF program: USAC & USF Program Primer
Understanding the Risks & Consequences of non-compliance is a critical first step to ensuring that your company’s efforts to remediate do not result in unexpected surprises and onerous financial consequences. The next most important step beyond awareness is making sure you consult with experienced legal counsel. The last thing a non-compliant communications service provider should do is to immediately and blindly submit past year Form 499-As without fully comprehending the significant and potentially irreversible consequences of doing so. A simple example illustrates this point.
Under current FCC Rules and USAC policies, if your company has been providing telecommunications or Interconnected VoIP services for several years and paying USF pass-through surcharges to your supplier(s), but are then required by USAC to file prior year Form 499-As reporting revenue during the period of non-compliance, your company may find itself paying duplicate contributions — once through your supplier(s) and a second time directly to USAC. Avoiding this consequence or minimizing the impact requires advance planning, which is better implemented prior to submitting an initial Form 499-A Registration request to USAC.
Please contact the attorney responsible for your account with any questions regarding this Advisory, or contact Jonathan S. Marashlian at jsm@commlawgroup.com.
