To all clients reporting a majority of revenue as Non-Interconnected VoIP —
Our firm recently became aware of a new FCC Form 499 revenue reporting “Red Flag” that may indicate USAC will soon target certain Non-Interconnected VOIP service providers for scrutiny and possible audits. In our experience and that of our affiliated consulting firm, The Commpliance Group, USAC frequently relies on its E-File System to identify and “flag” revenue reporting issues.
In a recent “Red Flag” 499 ISSUE notification, we were alerted to a new area of focus, one that has not previously triggered a flag in the E-File System. The substantive notice is copied below:
Line 418.4 – The majority of revenue reported is on this line. Please provide an explanation of the services associated with this revenue.
USAC’s focus on Non-Interconnected VOIP, for what appears to be the first time, indicates USAC may be concerned that Interconnected VOIP or other interstate telecommunications services are being incorrectly reported (unintentionally, intentionally or negligently) as Non-Interconnected VOIP. Revenue classified as Non-Interconnected VOIP avoids USF, NANP and LNP support fees, and is only exposed to TRS fees.
If your company currently reports a majority of its revenue as Non-Interconnected VOIP, we wanted to alert you to this new information to digest. If you have any concerns or receive a similar “Red Flag” notice from USAC now or in the future, do not hesitate to contact our firm’s USAC Compliance, Audit Preparation and Defense practice team. You can learn more about what our team recommends doing if you receive an Audit Notice by clicking here.