If your company provides “prepaid” telecommunications services in California, or plans to, knowing whether or not your company is obligated to register and contribute to various state regulatory programs is critical.  Our Firm prepared a 15-page Informational Memorandum that describes the complex nature of California’s telecommunications regulatory regime, as it applies to the following prepaid telecommunications services:

• Wireless / Cellular
• Calling Cards (physical cards) and
• Various forms of PIN-based services (electronic PINS, PINS associated with a wireless account, and stand-alone PINS)

This Informational Memorandum is available for purchase here:  INFORMATIONAL MEMORANDUM: California PUC Regulation and Fee Burdens Imposed on Prepaid Telecommunications Services Providers

The Informational Memorandum provides an in-depth review of recent decisions by the CPUC that have extended the CPUC’s complex rules to prepaid calling card providers and prepaid wireless service providers, including cardless prepaid electronic calling PINs.  As a result, a prepaid telecommunications provider likely must register with the CPUC, either by submitting a relatively simple “registration” application if the company does not yet provide service in California or by completing the more onerous CPCN application process if the company is providing service in California without authorization.  These requirements apply even to providers of only interstate or international service based on the CPUC’s interpretation of the rules.

In addition to registering with the CPUC, prepaid providers must pay the PUC User Fee, the CA Combined Fee (which covers various state universal service programs), or both depending on what type of service the provider furnishes.  For example, whether a provider furnishes “telephone prepaid debit cards” can make the difference between a provider paying only the PUC User Fee and paying both the User Fee and the CA Combined Fee, and the CPUC recently determined that TracFone’s prepaid service, which is associated with a specific handset or telephone number, does not qualify as a prepaid debit card service and that TracFone must contribute to both the PUC User Fee and the CA Combined Fee.

While TracFone has requested reconsideration of the CPUC decision, prepaid calling providers operating in California need to be aware that the CPUC generally requires such providers to register with the CPUC and contribute to state PUC programs.  If you or your company would like more information regarding California’s regulatory treatment of prepaid calling services, check out our firm’s detailed informational memo regarding California’s regulatory requirements.  Or, if you have questions about the application of California’s regulatory requirements to your unique business model, please contact Jackie Hankins at jrh@commlawgroup.com.

DISCLAIMER:  NEITHER THIS ADVISORY NOR THE MEMO REFERENCED HEREIN CONSTITUTES LEGAL ADVICE.  YOUR DOWNLOAD OF THIS ADVISORY OR YOUR PURCHASE OR DOWNLOAD OF THE MEMO DOES NOT ESTABLISH AN ATTORNEY-CLIENT RELATiONSHIP WITH MARASHLIAN & DONAHUE, LLC OR ANY ATTORNEY OF THE FIRM.  IF YOU REQUIRE AN EVALUAITON OF THE REGULATORY REQUIREMENTS AND THEIR APPLICATION TO YOUR UNIQUE BUSINESS AND SERVICES MODEL, PLEASE CONSULT WITH EXPERIENCED TELECOMMUNICATIONS LEGAL COUNSEL.