The deadline for filing FCC Form 499-A, the annual Universal Service Fund (“USF”) reporting worksheet, is April 1st.
All registered interstate telecommunications services providers (“ITSPs”) that hold a 499 Filer ID must file this form with the Universal Service Administrative Company (“USAC”) by the deadline. Except in very limited circumstances, there is no de minimis exception to Form 499-A, as amounts reported on the form are used to calculate contributions to other federal Funds (e.g. TRS, NANP, LNP Funds and the FCC annual regulatory fee).
In addition, due to the strict, automated enforcement of the FCC’s filing requirements, we urge all registered ITSPs to file Form 499-A, even if a company did not provide telecommunications service or conduct business during the previous year. Filing will mitigate unnecessary USAC and FCC investigations or late fees.
The Form 499-A filing requirement extends to all wireline and wireless telecommunications providers, interconnected VoIP providers, prepaid calling card companies, and satellite service providers. Private service providers (i.e. carriers who provide service on a non-common carrier, individualized basis) are also subject to these requirements. In addition, providers of data services, certain broadband services, and audio-bridging and teleconferencing services may be required to file FCC Form 499-A. Clients who have questions about their filing requirements should contact the firm as soon as possible.
Additional information on FCC Form 499, including the most recent Form 499-A and instructions, can be found on USAC’s website at:
CLIENT ACTION ITEMS:
Clients subscribed to our Compliance & Reporting Services (“C&R Services”) will be contacted by the firm’s Commpliance Division regarding the timely submission of revenue and other required data. Clients not currently subscribed to C&R Services, but who require assistance preparing and filing the Form 499-A, should contact us at your earliest convenience to ensure timely filing. Failure to remit required data in a timely manner may result in delinquent remittance and imposition of penalties. See FCC Form 499 Late Filing Policy.
C&R Services Subscribers: Clients currently subscribed to the firm’s C&R Services will be contacted within the week to begin the data collection process. C&R clients who have data already prepared may remit revenue information and other required data to Chris Canter directly at firstname.lastname@example.org.
Non-Subscribers: Clients not currently subscribed to C&R Services, but who require assistance with the preparation and filing of Form 499-A, may contact either Jonathan Marashlian at email@example.com or Chris Canter directly at firstname.lastname@example.org to make appropriate arrangements and ensure timely filing.
Clients that are filing FCC Form 499 for the first time, and clients who want additional advice on the FCC’s revenue reporting requirements, are encouraged to contact the firm as soon as possible.
Clients who have already sent revenue information may disregard this notice.
Contributions Determined By Form 499-A
Contribution to several federal support funds is determined by the annual interstate and international revenue reported on the FCC Form 499-A. The federal funds include:
|Federal Universal Service Fund (USF)||True-Up of the previously filed quarterly FCC Form 499-Q submissions from November 1st (prior year), February 1st, May 1st, and August 1st||USAC|
|Local Number Portability (LNP) Fund||Contributions for July – June||Welch LLP|
|North American Numbering Plan (NANP) Fund||Contributions for July – June||Neustar, Inc.|
|Telecommunications Relay Services (TRS) Fund||Contributions for July – June||NECA|
|FCC Regulatory Fee||Payment for prior year||FCC|
Submission of Traffic Studies
The FCC’s rules permit wireless/ CMRS and interconnected VoIP providers to rely on traffic studies to determine the jurisdictional allocation of revenue. Providers that rely on traffic studies must submit these studies to the FCC and USAC for review, concurrent with the submission of the FCC Form 499-A.
Traffic studies must also be kept current, and updated if traffic patterns shift dramatically. Generally the FCC requires traffic studies to be executed within a reasonable timeframe, or approximately every two (2) years. Affected clients should therefore review all underlying traffic studies to ensure timeliness and accuracy.
E-File System and Electronic Officer Certification Information
Electronically-filed Form 499s are not complete until the “Officer Certification” is submitted, either by filing a hard copy or conducting the certification through USAC’s E-File System. All clients wishing to perform officer certifications electronically must have access to their individual USAC E-file account.
Clients who do not have the correct E-file account information or whose information has changed since the last submission may encounter significant delays when filing and certifying Form 499s. Therefore, all clients with an existing account with USAC should locate and confirm the functionality of their USAC E-file System Username and Password as soon as possible in anticipation of the upcoming 499.
Clients who are unable to locate their current E-File System log-in information should contact USAC’s Help Desk at (888) 641-8722.
Interconnected VoIP and wireless services providers relying on a traffic study as a proxy for apportioning their end-user revenues among the intrastate, interstate, and international jurisdictions must submit that study for review to both USAC and the Commission “no later than the deadline for submitting the FCC Form 499-Q for the same time period.” According to the FCC, all traffic studies must meet the following guidelines:
- Traffic studies “must be based on information that is current for the filing period.
- Traffic studies must include “(1) an explanation of the sampling and estimation methods employed and (2) an explanation as to why the study results in an unbiased estimate.”
- Traffic studies are studies that are designed to determine the relative number of minutes of use related to intrastate calls, interstate calls, and international calls, and must “be designed to produce a margin of error of no more than one percent with a confidence level of 95%.”
Finally, we remind clients that traffic studies must be kept current. Although the FCC has not established firm guidelines concerning the operative time frame for traffic studies, we recommend that traffic studies are refreshed annually or when traffic patterns change significantly.
Reporting Entity Revision Obligations
FCC rules require reporting entities to submit a revised FCC Form 499-A whenever there is a change in the contributor’s Block 1 identification information, the Block 2-A regulatory contact information, the Block 2-B Agent for Service of Process information, or the Block 2-C administrative contact information. Revised information must be submitted within one week of the change.
Reporting entities are also required to submit a revised FCC Form 499-A to report errors in previously-reported revenue data. Revised filings should not be filed to reflect (carry back or bring forward) routine out-of-period adjustments to revenue data unless such adjustments would affect a previously reported amount by more than 10 percent. Nor should a revised Form 499-A be filed for the purpose of reflecting mergers, acquisitions, or sales of operating units. Reporting entities may submit revised Form 499-A filings reflecting increased revenue base figures at any time; revised Form 499-A Worksheets which would result in decreased contributions to the federal USF fund will not be accepted or processed by USAC unless submitted on or before March 31stof the year following the original Form 499-A filing due date.
Record Keeping Requirements
Reporting entities are cautioned by the FCC to maintain (for a period of five years) records and documentation sufficient to justify information reported in original and revised Telecommunications Reporting Worksheets, including the methodology used to determine projections and to allocate interstate revenues. Such documentation, along with additional relevant materials, must be made available to the FCC’s Officer of Inspector General, the USF Administrator or their auditors upon request.
FCC Form 499 Late Filing Policy
Form 499s received by after the due date will be subject to a late filing fee. USAC and the FCC strictly enforce applicable filing deadlines and rarely make exceptions for late-filed Forms.
Failure to file Form 499, or to pay contributions in a timely fashion, may subject entities to the enforcement provisions of the Communications Act and any other applicable law. In addition, entities may be billed by USAC for reasonable costs, including interest and administrative costs, that are caused by late, inaccurate, or untruthful filing. The failure to timely file and accurately report revenue in a Form 499 is a violation of FCC rules and may result in a USAC audit, FCC investigation, or both. Examples of FCC enforcement actions are available on the FCC’s website: https://www.fcc.gov/eb/usfc/