The Regulatory Mix, TMI’s daily blog of regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court, issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Regulatory Bulletin.
The FCC’s Wireline Competition Bureau reversed its own decision and now agrees that certain providers were not “resellers” as contemplated by existing universal service contribution requirements. Therefore, they were not obligated to report revenue or contribute to the federal Universal Service Fund (USF). After taking a second look, the Bureau found that the providers did not purchase telecommunications services for incorporation into an offering that they sold to end users. Instead, under the terms of their contract with the underlying carrier, they acted as marketers for that carrier, selling its service to end users. The underlying carrier: (1) maintained control of the end user customers and the telecommunications products sold to the end-user customers; (2) earned, billed, and collected the revenues from end users and paid the other providers “commissions” or “margins” that were calculated after deducting costs allocated to the customers they acquired for it; and (3) prohibited the providers from marketing the services or products of other carriers while under contract with the underlying carrier. The Bureau emphasized that its conclusions were limited to the unique circumstances of the case at hand and do not alter the USF contribution obligations of wholesale carriers and their carrier customers.
The Bureau also emphasized that its conclusion “in no way lends support to Petitioners’ argument that USAC lacked the authority to reject their FCC Forms 499-A.49. We find that the Bureau correctly found that the Commission’s rules and precedent permit USAC to “verify any information” reported by carriers on their FCC Forms 499-A and to determine whether the information is “untruthful or inaccurate,” and that this authority necessarily includes the discretion to reject forms containing incomplete or inaccurate information.”
The PUC of Colorado has revised the focus of its proceeding considering Colorado High Cost Support Mechanism (HCSM) rule changes. Originally, the PUC asked the ALJ to consider rule amendments that would, among other things, establish procedures for applications for HCSM funding in areas deemed subject to effective competition. However, recent legislation eliminates HCSM funding in areas found to have effective competition. TMI Regulatory Bulletin Service subscribers see Bulletin dated June 9. 2014. The PUC is now asking the ALJ to provide a recommended decision by October 31, 2014 on the following: (1) how the PUC should account for company-wide revenues of providers requesting HCSM funding; (2) how the PUC should allocate loop and network costs and revenues among supported and non-supported services when making HCSM distribution determinations; (3) considerations of federal funding for purposes of Section 208, including federal distributions for the provisioning of broadband; (4) rural and non-rural treatment; (5) applicability of the Identical Support Rule; (6) how costs should be modeled for HCSM purposes; and (7) a reasonable benchmark rate for basic services and a maximum rate for basic service. Comments are due July 11, 2014. Reply Comments are due July 25, 2014.