FCC Re-Opens Proceeding to Consider Whether to Extend USF Contributions (and Other Regulatory Fees) to One-Way VoIP Services; Comments Due July 13, 2020

Back in late December of last year, our firm predicted the Federal Communications Commission (“FCC” or “Commission”) could soon take steps to subject revenue derived from “Non-Interconnected VoIP” and other “One-Way VoIP” services to Universal Service Fund (“USF”) contributions:

Are One-Way VoIP Services on the Precipice of Regulatory Parity with Two-Way Interconnected VoIP, including Direct Universal Service Fund Contribution Obligations? Magic Eight Ball says, “Signs Point to Yes.”

Earlier today, the FCC’s Wireline Competition Bureau (“Wireline Bureau”) toppled over the first domino by releasing a Public Notice inviting interested parties to update the record in the 2012 Contributions Reform Further Notice of Proposed Rulemaking (WC Docket No. 06-122) as it pertains to whether the Commission should exercise its permissive authority under section 254(d) to include revenues derived from the provision of “one-way” VoIP services in the USF contribution base.  The very same day, the FCC announced that the Quarterly USF Contribution Factor for Q3 2020 would be set at a new record high of 26.5%.

The Wireline Bureau is asking the industry, public, and other interested parties to file comments in WC Docket No. 06-122 and provide updated responses to the questions posed in that proceeding to ensure that the record reflects current viewpoints and includes any new developments in the VoIP marketplace.  It also seeks comments on whether such services should be required to pay other fees applicable to interconnected VoIP services, such as Telecommunications Relay Services (“TRS”) fund contributions, annual FCC regulatory fees, and Local Number Portability (“LNP”) and North American Numbering Plan (“NANP”) support payments.  The Bureau is encouraging commenters to provide specific data to support their analysis.

Comments and Reply Comments should reference WC Docket Nos. 06-122; GN Docket No. 09-51 and be filed with the Commission by July 13, 2020 and July 27, 2020, respectively, using the Electronic Comment Filing System (ECFS) or by filing paper copies.

Although it is never wise to make predictions about how any particular regulatory proceeding will turn out due to the variety of factors involved in the rulemaking process (of note, the upcoming November national election and anticipated One-Way VoIP industry and consumer push back), the timing of the Bureau’s public notice and unusually short comment cycle are telling signs that:

1. the FCC is leaning strongly in favor of extending USF (and other regulatory fees) to One-Way VoIP services; and
2. absent some material intervening event that would alter the current course, an extension of the aforementioned fees to One-Way VoIP services could take effect as early as January 1, 2021, thus coinciding with the beginning of next year’s FCC Form 499-A revenue reporting period.

Should you have questions or concerns about the matters detailed in this advisory, please contact Jonathan S. Marashlian at jsm@commlawgroup.com or call 703-714-1313.