Five9, a provider of cloud-based communications and software services geared to call centers, has sought an emergency stay of enforcement and petitioned the Federal Communications Commission (“FCC”) to review the Universal Service Administration Committee’s (“USAC”) recent decision requiring Five9 to contribute to the Universal Service Fund (“USF”) and file 499-A worksheets for the years 2003 to 2007. USAC’s decision opens the door for potential contribution liability for telecommunications service providers well beyond the four (4) year default federal statute of limitations period on the government’s ability to collect debts and even the five (5) year document retention period associated with USF reporting. In other words, while acknowledging that there exists a 5-year document retention period associated with the maintenance of information needed to support, justify and explain revenue reporting for USF determination purposes, USAC takes the position that it has the authority to require contributors, like Five9, to file Form 499s as far back as the inception of the USF program, circa 1998.
After years of non-compliance, Five9 voluntarily registered with USAC for calendar year 2011 and continued to file its 499-Qs for 2012 and 2013. Five9 also self-reported filing deficiencies for prior years 2008-2011, and made plans to bring itself current on payments for those years. However, USAC found that Five9’s back filings should extend all the way back to 2003—the year Five9 began operations. This decision validates our firm’s long-held fear that USAC would ignore fundamental concepts of fairness by refusing to honor either the 4-year default federal SOL or the 5-year document retention period set forth in FCC rules and would, instead, subject contributors to reporting and contribution obligations without any limits.
Current FCC rules only require contributors to retain records used to support Form 499 revenue reporting for a period of no more than five (5) years; prior to a rule change in 2009, the applicable document retention period was three (3) years. As a result of these FCC rules, contributors have generally relied on the document retention period as representing an outer limit on USAC’s or the FCC’s authority to demand filing 499-As, reporting revenue and paying USF contributions. As Five9 noted in its appeal, since the Commission must base contribution requirements on relevant data, its inability to access this information from 2003 to 2007 would make filing for this period impossible. In addressing Five9’s concerns, however, USAC stated that “there is no relationship between the…record retention policy and Five9’s obligation to file 499-As back to when Five9 began providing telecommunications services.”
If you have any questions regarding the recent Commission decision and how it potentially affects your company, or any other questions regarding USAC filing procedures, please contact the attorney assigned to their account or Jonathan Marashlian at email@example.com.