Ad Hoc Coalition Asks FCC to Adopt Rules to Enhance Fairness of USF Program


On April 1, 2014, the Ad Hoc Coalition of International Telecommunications Companies (“Coalition”) filedComments and, alternatively, a Petition for Rulemaking asking the FCC to adopt a variety of new rules aimed at improving the fairness and equity of USAC’s administration of the Universal Service Fund (“USF”) program.  Specifically, the Coalition asked the FCC to adopt rules to:

  1. Allow telecommunications carriers to request guidance from USAC on an anonymous and hypothetical basis (similar to the “Letter Ruling” process available at the Internal Revenue Service and many state tax authorities);
  2. Establish a five-year look-back period for all USAC audits and contribution obligations; and
  3. Create amnesty and/or voluntary disclosure agreement programs for well-intentioned telecommunications and interconnected VoIP service providers who may not be in compliance with the Commission’s USF regulations.
According to the Coalition, even well intentioned telecommunications carriers find it incredibly challenging to keep up with the changing regulatory landscape. As a consequence of the lightning speed of technological changes and rapid evolution of legal precedent governing USF-assessable services, many such providers may not be fully aware of their USF obligations. The Coalition goes on to state: “Under the current system these providers are unable to seek regulatory guidance from USAC, either directly or even through counsel, without enduring burdensome and sometimes arbitrary treatment by USAC.  Many telecommunications carriers have avoided seeking USAC guidance for fear that USAC will instruct them to make revisions to contribution filings going back as far as 1998…”
The Coalition argues that USAC’s current treatment of companies that come forward with compliance questions or issues may ultimately work to the long-term detriment of the USF.  Adverse treatment by USAC could potentially cause many companies to go out of business, or push many international companies to avoid doing business in the United States all together. Both consequences, the Coalition states, could lower long-term USF contribution levels by deterring participation and fomenting increased avoidance.
The solution, according to the Coalition, is the adoption of a series of policies and rules modeled after the well-established procedures in existence at the Internal Revenue Service and numerous state taxing authorities.
The Ad Hoc Coalition is a grassroots organization comprised of both U.S. and non-U.S. companies, including prepaid calling card providers, international transport carriers, and a broad spectrum of entities engaged in the provisioning of wholesale communications services.
If you have any questions about the Coalition’s Petition/Comments or are interested in supporting the Coalition, please contact Jonathan S. Marashlian at or 703-714-1313.

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