On May 13, 2011, the Federal Communications Commission (“FCC”) released a First Report and Order and Notice of Proposed Rulemaking designed to modernize international traffic reporting regulations.  Under the FCC’s new rules, several reporting requirements imposed on large international carriers and providers of telegraph services are eliminated. Annual international traffic  and circuit-status reports are still mandated; however, carriers are no longer required to separate off-shore U.S. traffic from domestic traffic in these reports.  The FCC also solicited comments on several proposals designed to streamline international compliance obligations further, such as consolidating sections 43.61 and 43.82 and adopting simplified annual reports for carriers under a revenue threshold of $5 million.

Elimination of International Reports

The FCC’s new rules in the First Report and Order eliminate the following reporting requirements:

1. Quarterly traffic and revenue reports for large carriers;
2. Quarterly traffic and revenue reports for foreign-affiliated switched resale carriers;
3. The circuit-addition report filed by private-line carriers; and
4. The telegraph toll division report filed by telegraph providers.

The FCC justified elimination of these requirements because information requested in these reports is either gathered through annual traffic and circuit-status reports, or is no longer required due to changes in the telecommunications marketplace.

Streamlining of Annual Traffic and Circuit-status Reports

The FCC concluded that the annual traffic and circuit-status reports are still required because data requested by these report is used by the FCC and the Department of Justice to determine market conditions, and because reliance on other reporting mechanisms — such as FCC Form 499, ad hoc information requests, or industry reports — would not provide the requisite level of granularity.

Nevertheless, the FCC has taken steps to streamline reporting by eliminating the need to report traffic provided to “off-shore” points as separate from continental U.S.-based traffic. Under the new rules, off-shore points like Alaska, Hawaii, and Puerto Rico, are considered U.S. points. Filers should now combine the traffic and revenue data and circuit data for the off-shore U.S. points with the data for domestic U.S. points. Filers will only report traffic, revenue, and circuit status data for traffic between the “United States” and foreign points.

Proposed Rules

The FCC also seeks comment on additional rules intended to streamline annual international traffic reporting requirements.  Highlights from the proposed rules include:

• Consolidate sections 43.61 and 43.82 into one rule, and have a consolidated filing manual for both the traffic and revenue reports and the circuit-status reports;
• Establish a $5 million revenue threshold below which a filing entity need not file annual traffic and revenue data for international resale services;
• Change the filing date for the circuit-status report and the traffic and revenue report to May 1^st;
• Eliminate the use of billing codes and have the data submitted on the proposed filing schedules;
• Eliminate the requirement to report the number of messages;
• Have filing entities report resold private line service on a world-total basis; and,
• Have filing entities report data services as miscellaneous services.

The FCC also solicits comment on whether providers of interconnected Voice over Internet Protocol (VoIP) should submit data regarding their provision of international telephone services and whether non-common carrier international circuits should be reported.

All carriers, including those exempt from the proposed annual reporting requirements (e.g. those carriers who fall below the $5 million revenue threshold) would have to file an annual “Services Report” under proposed rules. This Report would provide the FCC with an entity’s contact information and contain a checklist of international services provided. Filers would be (1) all persons or entities that hold an international section 214 authorization, whether or not they provided international service in the reporting period, (2) interconnected VoIP providers that provided international service in the reporting period, and (3) any person or entity that owned international facilities as of December 31^st of the reporting period. The FCC will use these reports to update the agency’s internal records and track the status of the international telecommunications marketplace overall.

The new rules eliminating certain reporting requirements and streamlining annual reports become effective upon issuance of a Public Notice from the FCC’s International Bureau. Comments on the Notice of Proposed Rulemaking are due thirty (30) days after publication in the Federal Register; reply comments are due forty-five (45) days after publication in the Federal Register.