As expected, states are moving quickly to extend state universal service fund contribution requirements to providers of nomadic Interconnected VoIP services. Last week the Nebraska Public Service Commission (“PSC”) released an Order confirming that nomadic Interconnected VoIP providers are required to contribute to the Nebraska Universal Service Fund (“NUSF”). The Nebraska PSC’s Order states that nomadic providers have a three month period to make adjustments to their billing systems and to implement the contribution requirements. The PSC Order directs nomadic providers to begin collecting NUSF surcharges on May 1, 2011, and the first monthly remittance filing is due June 15, 2011. The PSC Order also states that if the nomadic provider qualifies as a quarterly remittance filer pursuant to Neb. Admin. Code Title 291, Ch. 10 § 003, then its first quarterly remittance filing must be filed on or before July 15, 2011.
The PSC Order also concludes that the “911 addresses” of the nomadic VoIP provider’s customers should serve as the basis for sourcing revenue subject to NUSF contribution assessments. Further, the PSC Order provides that nomadic providers are permitted to choose among three options for separating interstate and intrastate revenues for purposes of assessing the NUSF surcharge which are:
- Use an interim safe harbor allocation of 35.1 percent of VoIP traffic as intrastate;
- Use actual interstate and intrastate revenues; or
- Use of a traffic study (as filed with the FCC).
It remains to be seen whether other states universally adopt the Nebraska PSC’s end user 911 address “revenue sourcing” methodology or whether this methodology will ultimately conflict with rules adopted in other states. If the latter, it is possible the NUSF regulations will violate the FCC Order which granted states the authority to impose USF obligations on nomadic VoIP providers.
Clients with comments or questions regarding this Advisory should contact the attorney responsible for their account.