On June 11, 2010, prepaid calling card provider, Allcom Telink Corporation (“Allcom”) notified the Federal Communications Commission (“FCC” or “Commission”) that it intends to cease reporting prepaid calling card revenues at face value for Universal Service Fund (“USF”) purposes. Instead, Allcom plans to contribute only on revenues actually received, rather than the retail price, or face value, of cards that the company sells to distributors and other non-contributing resellers.

Allcom also asked that the Commission issue guidance to resolve the conflict between the Universal Service Administrative Company‘s (“USAC”) USF reporting instructions, which require face value reporting, and FCC rules, which require carriers to contribute only on revenues actually received.  Further, Allcom calls for comprehensive USF reform to foster competition in the prepaid industry.

Allcom‘s announcement, following on the heels of similar AT&T and Verizon announcements, suggests an industry trend toward proactive measures to rebuff USAC‘s face value reporting instructions.  Undoubtedly frustrated by the FCC‘s inaction in the wake of innumerable calls to action from the industry, carriers have begun to take affirmative steps to protect their interests.

CLIENT ADVISORY

Carriers may soon experience relief in the form of guidance in conjunction with the FCC‘s National Broadband Plan which proposes comprehensive USF reform.  In the meantime, if you have any questions about the reporting of prepaid calling card revenues please contact the attorney assigned to your account.  Alternatively, you may reply to this message via e-mail, and someone will promptly respond to your inquiry.