FCC Adopts Lower Standard of Evidence for Wholesale Providers Accepting Other Reliable Proof of Reseller Contributor Status


For wholesale providers who do not follow the Form 499-A “safe harbor” guidance to verify a reseller customer’s contribution status, the FCC both eased the standard of proof and explained how difficult it can be to obtain.

Today the FCC released its Order on Reconsideration in response to a petition filed by XO Communications Services, LLC, in December 2012.  In that petition, XO had asked the FCC to reconsider its imposition of the “clear and convincing standard” for wholesalers who do not employ the safe harbor procedures and instead rely on “other reliable proof.”  In today’s order, the FCC announced that it would apply the “preponderance of the evidence” standard in determining whether a wholesaler had a reasonable expectation that its reseller customer would contribute directly into the Universal Service Fund or that the customer in fact had paid.

While the FCC lowered the standard of evidence, it emphasized that a wholesaler “must demonstrate that the reseller customer contributed specifically on the revenues associated with the wholesale provider’s telecommunications input.”  The Commission notes that a review of USAC payment records would not be sufficient to provide this level of detail.

To assist clients with their efforts to comply with the clarified USF exemption requirements, our firm has formed the USF Exemption Task Force – an internal task force that will provide the following services:

  • Design, develop and assist with the implementation of USF Exemption Policies and Procedures that are appropriate for your unique business;
  • Review USF exemption forms and certifications provided by your suppliers and provide guidance and advice on the appropriate manner to complete such exemption forms;
  • Analyze and advise on the practical economic consequences of your responses to wholesale supplier USF exemption forms and evaluate options to address the same.

If you require assistance from our firm’s USF Exemption Task Force, please contact Linda McReynolds at lgm@commlawgroup.com or by phone at 703-714-1318.

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