Federal-State Joint Board on Universal Service; 1998 Biennial Regulatory Review; Changes to the Board of Directors of the National Exchange Carrier Association, Inc.

AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

In this document, the Wireline Competition Bureau (Bureau) modifies the deadline for filing revisions to the annual Telecommunications Reporting Worksheet (Worksheet or Form 499-A). In addition, the Bureau updates the Instructions to the Telecommunications Reporting Worksheet, FCC Form 499-A (Instructions). With regard to universal service contributions, several parties (Petitioners) have filed requests for review of decisions by the Universal Service Administrative Company (USAC) rejecting revised Worksheet filings as untimely under USAC's processing guidelines. The Bureau grants such requests and remands them to USAC for consideration as provided in this Order. The Bureau also directs USAC to consider, as provided in this Order, any revised Form 499-A filings that are pending before it on the release date of this Order, or that it receives between the release date of this Order and the effective date of this Order.

DATES:

Effective January 10, 2005.

FOR FURTHER INFORMATION CONTACT:

Anita Cheng, Assistant Chief, Wireline Competition Bureau, Telecommunications Access Policy Division, (202) 418-7400.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Order in CC Docket Nos. 96-45, 98-171, and 97-21 released December 7, 2004. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, DC, 20554.

I. Introduction

1. In this Order, the Wireline Competition Bureau (Bureau) modifies the deadline for filing revisions to the annual Telecommunications Reporting Worksheet (Worksheet or Form 499-A). In addition, we update the Instructions to the Telecommunications Reporting Worksheet, FCC Form 499-A (Instructions), to clarify our intention to reject as untimely any Form 499-A revised filing not submitted within twelve months of the due date of the original filing in question, if the revision would decrease regulatory fees or contributions to support mechanisms for universal service, interstate Telecommunications Relay Service, number administration, or local number portability. With regard to universal service contributions, several parties (Petitioners) have filed requests for review of decisions by the Universal Service Administrative Company (USAC) rejecting revised Worksheet filings as untimely under USAC's processing guidelines. We grant such requests and remand them to USAC for consideration as provided in this Order. We also direct USAC to consider, as provided in this Order, any revised Form 499-A filings that are pending before it on the release date of this Order, or that it receives between the release date of this Order and the effective date of this Order.

2. Adoption of a firm deadline for filing revisions to the Worksheet will help ensure the stability and sufficiency of the federal universal service fund, as contemplated in section 254(d) of the Communications Act of 1934, as amended (the Act). We also find that a firm deadline for revised Worksheets will improve the integrity of the universal service contribution methodology and promote efficiency in administration of support mechanisms for universal service, interstate Telecommunications Relay Service (TRS), the North American Numbering Plan (NANP) and Local Number Portability (LNP), consistent with the Commission's rules and policies.

II. Discussion

3. In this Order, we modify the Form 499-A Instructions by changing the deadline for contributors to file revised Form 499-As that would result in decreased contribution amounts. We adopt a twelve-month deadline for filing revisions to the Form 499-A which would result in a decreased contribution amount. Accordingly, any revised 499-A that would result in decreased contributions must be submitted by March 31 of the year after the original filing due date. The prior Instructions required revisions within nine months and contemplated the potential for revisions beyond that time period if there was good cause for the delay in filing and an explanation justifying the change. For the reasons described, however, we now find that a firm twelve-month deadline for revisions that would result in reduced contributions will improve administrative efficiency and certainty for the contribution systems for universal service, TRS, NANP, and LNP. We conclude that adoption of a firm deadline for filing such revisions to the Worksheet will help ensure the stability and sufficiency of the federal universal service fund, as contemplated in section 254(d) of the Act, as well as the funds for TRS, NANP, and LNP. In addition, we find that a firm deadline for revised Worksheets will improve the integrity of the universal service contribution methodology and promote efficiency in administration of the universal service support mechanisms, consistent with the Commission's rules and policies. Our actions today will allow USAC and other fund administrators to reduce substantially the need for adjustments regarding a given contribution year, providing certainty to contributors and their customers.

4. In our experience, twelve months is a sufficient period of time for contributors to revise their 499-A filings for the purpose of reducing their contribution obligations. With regard to universal service contributions, as discussed, the quarterly-filed 499-Q contains information about both projected revenue for the upcoming quarter and actual revenue for the past quarter. Each 499-Q filing provides an opportunity to report actual revenue information from the prior quarter. On April 1 of each year, carriers file revenue information for the prior year, which helps to determine whether the revenue information in the prior year's 499-Qs was correct. As a result, the 499-A is an opportunity to correct previously-filed revenue information. With the new deadline for filing revisions to the Form 499-A, carriers will have a window of one entire year in which to determine whether revenues reported and contribution amounts paid the prior year was too high. Thus, any revised 499-A that is filed by the new deadline represents a third opportunity for carriers to review and file revenue information for the prior year. With regard to TRS, NANP, and LNP contributions, contributors still have two opportunities to review and file revenue information (i.e., in the original 499-A filing and the revised 499-A filing). We find that twelve months is ample time for a diligent filer to determine what revenues it earned the prior year. Setting a twelve-month deadline for filing revisions to the 499-A as described herein gives contributors adequate time to discover errors, while providing incentive to submit accurate revenue information in a timely manner. We note that this Order will have minimal impact on the payment of regulatory fees because entities pay regulatory fees within four months of the original April 1 Form 499-A submission, and most entities become aware of any need to file revisions at the time of payment.

5. Form 499-As that are filed after the effective date of this Order will be subject to the twelve-month deadline. Thus, contributors will be required to submit revisions to the Form 499-A within twelve months of the original filing deadline, i.e., March 31 of the subsequent year. Revised Form 499-As that are submitted after the revision deadline will be rejected by USAC as untimely. Because this Order will become effective after the filing deadline for the 2004 Form 499-A (which was April 1, 2004), contributors will be permitted to submit revisions to the 2004 Form 499-A up to twelve months following the effective date of this Order.

6. As explained, several Petitioners have filed requests for review of decisions by the Universal Service Administrative Company (USAC) rejecting revised Worksheet filings as untimely under USAC's processing guidelines. Because the decision we adopt today does not take effect until January 10, 2005, these requests (and any other pending requests filed before the effective date of this Order) are subject to the standard currently in effect. Although this Order adopts USAC's one-year deadline for the stated reasons, we grant the pending requests for review to allow USAC to consider if there was good cause to allow revisions beyond the deadline contained in the Instructions. We remand these requests to USAC and direct USAC to revise universal service contribution obligations as appropriate provided that: (1) the Petitioner has demonstrated good cause for submitting the revision beyond the one-year revision window; and (2) the Petitioner has provided “an explanation of the cause for the change along with complete documentation showing how the revised figures derive from corporate financial records.” That is, USAC shall only revise contribution obligations to the extent that the carrier has provided accurate and legitimate reasons for filing late and for revising the obligation, in accordance with the existing Worksheet Instructions. The Petitioners are permitted to supplement their filings to USAC as necessary between the release date of this Order and the effective date of this Order. To the extent that a request for review encompasses issues in addition to revised 499-A issues, we remand to USAC only the portion of the request that deals with revised 499-A filings, and retain the remainder of the request for disposition by the Bureau or Commission.

7. In addition, we direct USAC to consider any similarly-situated revised 499-A filings that it receives between the release date of this Order and the effective date of this Order and to revise universal service contribution obligations in accordance with the guidelines. In the event that there are pending similarly-situated 499-A revisions that were filed with USAC prior to the release date of this Order, we direct USAC also to consider such filings in accordance with the guidelines. These filers are permitted to supplement their filings to USAC as necessary between the release date of this Order and the effective date of this Order. All filings that are made to USAC in connection with this Order should be captioned, “ATTN: Form 499-A Revision Order” and sent to the Universal Service Administrative Company, 2000 L Street, NW., Suite 200, Washington, DC 20036.

8. The Commission will not send a copy of this Order pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

IV. Ordering Clauses

9. Pursuant to authority contained in sections 1, 4, and 254 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 254, and the authority delegated under 0.91, 0.291, 1.3, and 54.711 of the Commission's rules, 47 CFR 0.91, 0.291, 1.3, and 54.711, this Order shall be effective January 10, 2005.

10. Pursuant to authority contained in sections 1, 4, and 254 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 254, and the authority delegated under 0.91, 0.291, 1.3, and 54.711 of the Commission's rules, 47 CFR 0.91, 0.291, 1.3, and 54.711, the requests for review of decisions by the Universal Service Administrative Company listed in the Attachment are remanded to the Universal Service Administrative Company for further review.

11. A copy of this Order shall be transmitted to the Universal Service Administrative Company.