Beginning in December 2018, USAC has provided a Reseller Certificate template on its website for companies to use. Previously, filers designed their own certificates based on the information outlined in the FCC Form 499-A instructions. A recap of the entire process follows. The FCC has defined a "reseller" as a telecommunications carrier or telecommunications provider that: (a) incorporates purchased telecommunications into its own offerings; and (b) can reasonably be expected to contribute to federal universal service support mechanisms based on revenues from those offerings. Specifically, to report revenues as reseller revenue in Block 3 of the FCC Form 499-A, the customer must be:
- Purchasing service(s) for resale, at least in part, and incorporating the purchased services into its own offerings which are, at least in part, assessable U.S. telecommunications or interconnected VoIP service; and
- Either directly contributing or have a reasonable expectation that another entity in the downstream chain of resellers directly contributes to the federal universal service support mechanisms on the assessable portion of revenue from offerings that incorporate the purchased services.
Each of the following conditions must be met if a filer intends to report its revenues from other carriers as reseller revenue in Block 3 and, therefore, have that revenue exempt from its universal service contribution base: First Condition The first condition states that the customer is incorporating at least a part of the service that it is purchasing into its own telecommunications offering. Example 1 If a customer purchases a T1 circuit, it will meet the first part of the definition if it is using at least part of the circuit for voice or other assessable telecommunications services. It will not meet the first part of the definition, however, if it is using 100% of the circuit for internal purposes or reselling it as internet or part of an enhanced product. In this example, the same reseller customer can be treated as both a reseller and an end user, depending on the purpose of the circuits that it is purchasing. Second Condition The second condition states that either the customer or another entity in the downstream chain of resellers directly contributes on the revenues for that service. This difference is crucial, because the FCC requires a wholesaler to collect the USF fees from a reseller of its services if that reseller is de minimis. Example 2 If the same customer purchases another T1 circuit but is not a direct contributor, then it will not meet the second part of the definition. All services purchased by the customer, even the services resold as 100% telecommunications, must be reported as end-user revenue in Block 4 of the form. |