On January 13, 2016, NextMetro, LLC d/b/a BroadAspect filed a Request for Review and Waiver with the Federal Communications Commission (“FCC,” or the “Commission”) concerning the Universal Service Administrative Company’s (“USAC”) refusal to of BroadAspect’s request for cancellation of late fees and penalties associated with its late-filed FCC Form 499-As. In its Request, BroadAspect asserted that it should be exempt from filing FCC Form 499-As as a systems integrator providing Interconnected Voice over Internet Protocol (“I-VoIP”) services.
Pursuant to the FCC Form 499-A Instructions, systems integrators are exempt from registering and filing Form 499-As with USAC if they “derive less than five percent of their systems integration revenues from the resale of telecommunications” (“SI Exemption”). However, the Commission also considers I-VoIP providers to be telecommunications service providers for purposes of contributions to the federal Universal Service Fund (“USF”), and thus required them to register and file Form 499-As. Yet, the Commission has not explicitly stated whether the SI Exemption equally extends to systems integrators providing I-VoIP services as it does to systems integrators providing traditional telecommunications services.
It was on these grounds that BroadAspect requested that the Commission cancel USAC’s assessment of late fees and penalties against the provider for its untimely filing of its 2009-2015 Form 499-As. BroadAspect asserted, inter alia, that it would be inequitable for USAC to assess late fees and penalties against the provider when the USF reporting policies exempt other similarly situated systems integrators providing telecommunications services – rather than I-VoIP – from filing Form 499-As. Moreover, BroadAspect pointed out that the inherent conflict between the SI Exemption and the requirement that even de minimis I-VoIP service providers must file Form 499-As was recently raised for Commission consideration in a 2015 Petition for Declaratory Ruling filed by The Commpliance Group – which remains unanswered by the FCC.
Accordingly, BroadAspect stated that given the lack of clarity in the rules and in the Form 499-A Instructions, as well as the Commission’s inaction on The Commpliance Group’s petition, BroadAspect could not be said to have been “on notice” of its obligation to file Form 499-As as a systems integrator offering I-VoIP services. Thus, the company argued, it would be inequitable for USAC and the FCC to hold BroadAspect responsible for late fees and penalties resulting from the late filing of its 2009-2015 Form 499-As.
Our firm will continue to monitor the progress of both BroadAspect and The Commpliance Group’s petitions concerning the SI Exemption’s application to I-VoIP service providers. As such, we will provide any interested clients and other parties with notice if/ when the FCC releases a public notice soliciting comments on BroadAspect’s petition, and if/ when the Commission takes any action on The Commpliance Group’s petition.
Should you have any questions regarding the petitions, or have questions regarding the application of the FCC’s SI Exemption to your service offerings, please do not hesitate to contact Jonathan Marashlian at jsm@commlawgroup.com, or Joanna Wallace at jgw@commlawgroup.com.
