Believe Wireless Broadband (“Believe Wireless”), a fixed wireless and VoIP reseller, recently filed a letter with the Federal Communications Commission (“FCC”) appealing USAC’s assessment of over $8,000 in late filing fees, resulting from late-filed Form 499s. A copy of the Company’s letter is available here: https://apps.fcc.gov/ecfs/document/view?id=7022310758
According to its letter, Believe Wireless augmented its core fixed wireless business with resold Interconnected VoIP services circa 2007. Believe Wireless was under the disillusion that its payment of Universal Service Fund fees that were invoiced to the Company by its underlying supplier of Interconnected VoIP services were sufficient to ensure compliance with FCC Rules. Believe Wireless states:
“When we first started offering VoIP service we were just reselling another company’s VoIP service and on the bill of the company all of the required fees were charged to us for the service. It was our erroneous understanding that by paying the fees, we were in compliance.”
In 2011, Believe Wireless was alerted to the fact that “resellers” of VoIP services are, indeed, required to register with the FCC and USAC. The Company took steps to bring itself into compliance by filing its Form 499 Registration. Indicating that the Company started offering interstate telecommunications or Interconnected VoIP service back in 2007, Believe Wireless’ 499 Registration resulted in USAC directing the Company to file all previously un-remitted Form 499-As. Upon filing Form 499-As for the 2007-2011 period, USAC assessed a $100 per month late fees for each month during the nearly 6 year period of presumed non-compliance.
Believe Wireless is appealing and seeking a waiver of USAC’s imposition of the late fees based on claims of good faith ignorance of the law. Such appeals are rarely granted by the FCC, as ignorance of the law — even in good faith — is generally not considered a viable excuse for violating the law.
Believe Wireless’ belief system regarding the lack of any direct FCC regulatory (and, one might presume, State PUC, State & Local tax and 911 fee) obligations from the Company’s “resale” of a third-party supplier’s VoIP service (or, for that matter, other forms of telecommunications resale, including wireless), is not uncommon. Many small telecommunications businesses enter the telecom market utilizing the “platform” of another service provider, reselling services under their own company or brand name. Because these small businesses (often times lacking even basic knowledge of telecommunications laws and regulations) find themselves paying regulatory fees and taxes to their suppliers, they often times make the mistake of concluding that their legal obligations to federal and state governmental authorities is either covered by or handled by their suppliers, i.e., as a consequence of paying the supplier’s invoiced fees, taxes and surcharges.
In reality, resellers of telecommunications and Interconnected VoIP services are subject to a broad array of direct regulatory and tax compliance responsibilities that, by law, can neither be pawned off on nor contracted away to third parties. More often than not, governmental regulations apply to the “retailer” of a service, not the underlying wholesaler. Furthermore, underlying wholesalers are often powerless under the law to “comply on behalf of” their reseller customers, even if the wholesaler wanted to assume the burdens for its reseller customers.
As before the FCC, the types of regulatory responsibilities applicable to resellers of telecommunications and Interconnected VoIP include more than just federal Universal Service Fund program compliance; resellers must also comply with a variety of Title II obligations, such as CPNI customer privacy, service discontinuance and outage reporting rules, Form 477 reporting, CVAA and more.
For small businesses entering the telecommunications and VoIP marketplace, regulatory compliance can be intimidating. But it doesn’t have to be. Compliance with FCC regulations begins with awareness. For more information on the many ways The CommLaw Group and our affiliated regulatory consulting firm, The Commpliance Group, can help your small company understand and comply with applicable FCC rules and regulations, we invite you to visit our websites and explore our New Entrant Compliance Packages, specifically tailored to meet the basic FCC compliance needs of most small, new entrants to the Interconnected VoIP, MVNO/Wireless resale and International Prepaid markets: