TELECOMMUNICATIONS PRACTICE

Telecommunications Practice

Maldonado Law offers multiples services for telecommunications industry based upon 20 years of experience in the business and regulatory needs of our clients. The above link categories are just some on the services we offer telecommunications, wireless and VoIP providers. We invite you to explore the areas that concern your business or new venture. If they are not there, contact us regarding our past experience and practice in the given area.

• FCC 499-A Filer ID & Telecom Regulatory Reporting
• Florida Communication Service Tax
• Wireless Providers and Commercial Radio Services (CRM) /MVNO
• Telecom & Wireless Business
• State Certification of Prepaid PIN-Free and Mobile Application based PIN-Free
• FCC Section 214(e) ETC Designation
• Tribal ETCs and FCC Standing Rock Petitions

FCC 499-A Filer ID & Telecom Regulatory Reporting

For over 22 years, Maldonado Law has advised and helped telecom clients through the complexities of FCC regulatory compliance from a legal perspective. We have seen the changes in the regulatory requirements and experienced the FCC fee contribution factor increases over time. We are familiar with the advantages of proper regulatory classifications revenue reporting on the FCC 499-A and 499-Q reports. We have worked with small and large providers alike to resolve regulatory fee issues, be they proper reporting, cleaning-up misreported revenues, regulatory fee appeals to the FCC’s Wireline Bureau, removing clients from Red Light status for fees in arrears, or cleaning up the past errors of compliance work of others. Some of the Telecom Regulatory services Maldonado Law provides includes:

• Acquisition of FCC Form 499-A Filer ID
• Development of post-entry compliance plans for upstarts
• Training on how to report the FCC Form 499-A and 499-Q online and maintain filing account
• Regulatory review of existing FCC 499-A Reports and Common Carrier reporting
• Review of past 499-A and 499-Q filings to ensure correctness
• Amended filings for past 499-A and 499-Qs
• Assessment of liabilities and agency payment plan negotiations
• Review of invoices from ROLKA LOUBE (TRS), USAC (USF) and from the FCC for the ITSP fee
• Representation in USAC Audits
• Appeals of USF and TRS determinations and audits
• Temporary ad-hoc FCC compliance reporting until client can implement policies and procedures of its own
• Service provider and revenue classification adjustments with USAC to match actual business of the carrier
• Drafting of individualized client USF exemption certificates
• Drafting CPNI certification and matching CPNI breach data policies
• FCC compliance training of owners, management and personnel of carriers
• Resolution of FCC Red Light Debt and Red Light Debt referred to US Treasury for collection

Our Telecom Regulatory Practice is not purely a regulatory business interested only in an ongoing volume of FCC reporting processing on behalf of our clients. In fact, our approach is the opposite. Our FCC Telecom Regulatory Practice is focused on advising the client to be as educated as possible to take control of their own filings and revenue reporting so that they can either do their filings in-house, or if that is impractical, can knowledgably manage any work outsourced to compliance and accounting firms. We dedicate our regulatory efforts to resolving regulatory issues that can adversely affect a telecom’s business model not merely reporting. We use one-on-one consultations with clients to educate them on best practices to minimize fee exposure from their profit margins and plan fee contributions through pass-through charges or exemptions available under law and regulation. We do not believe that this is a one-size fits all solution. Each client is unique and so are the telecommunications revenue streams they service and manner which they capture their revenues for reporting purposes. However, finding the right balance is a team effort. Maldonado Law work with our clients in conjunction with their accountants and compliance reporting services of the client in this process, if already engaged, to find practical policies and methods to ensure compliance. Our services in this area include, but are not limited to:

Common Problems with the FCC Form 499-A While our firm handles a wide array of FCC Telecom Regulatory compliance issues, the vast majority revolve around general telecom revenue reporting under the FCC Form 499-A and FCC Form 499-Q. All intrastate, interstate, and international providers of telecommunications within the U.S. (whether they provide ordinary local or long-distance or VoIP) are required to file the Form 499-A and 499-Q. The FCC Form 499-A is due April 1st of every year. The FCC 499-Q reports due every March 17, May 17, August 17, and November 17 of every year. These reports are largely financial in nature and require the diligent eye of someone seasoned and experienced on the laws and rules that underpin fee contributions to best report under existing requirements and exceptions. The FCC Form 499-A is an annual report aggregating all telecom revenues from the preceding year. Revenues reported in the 499-A will be used for assessments of the Universal Service Fund (USF) and well as Telecommunications Relay Services Fund (TRS). The TRS is remitted on a true-up basis, meaning that the TRS Administrator will receive TRS Contribution base information from the Form 499-A and us it to establish and estimated or projected base for the next year. The TRS Administrator will then take the reporting entity’s estimated receive TRS Contribution base, divide it by 12 months and forward invoices to the provider for monthly payment of estimated TRS contribution. If the provider experiences a decrease in telecommunication service revenues, ceases to operate certain services or goes out of business, the changes in estimates to TRS and USF can be reported on quarterly reporting under the FCC Form 499-Q. The Form 499-Q reports quarterly revenues to certify its status as either direct contributor, or certify that provider qualifies as “de minimis” or indirect contributor and no direct contribution will be due on the next FCC Form 499-A report.

The most common problems resolved by Maldonado Law revolve around the consistency and accuracy of reported revenues along with proper classifications of provider and revenues. Not all VoIP falls under definition of Interconnected VoIP (I-VoIP) or Non- Interconnected VoIP (N-VoIP). The mere use of VoIP by the provider does not necessarily make an Other Toll type service any less. However, many long distance resellers often misclassify and miscategorize their service and revenue source without realizing that they may fall under other categories that have exemptions or may reduce their overall regulatory fee exposure. It entirely depends on the service offered and sold. Another common problem that Maldonado Law addresses for its Telecom Regulatory Practice clients is non-filing. Often a provider undertakes operations and neglects to file for an FCC 499-A Filer ID until the FCC Form 499-A is due.

FCC 499-A Filer ID registration requirements Maldonado Law acquires FCC Form 499-A filer IDs for its clients. The ID is similar to a business EIN for purposes of payroll, but in this instance for filing and paying regulatory fees under the supervision of the FCC. The ID is obtained from USAC or Universal Service Administration Corporation, a non-profit company delegated the administrative tasks of collecting and disbursing the USF for the FCC. The ID has two pre-requisites to filing: 1.) that the company have a FCC Registration Number (FRN) and that the company has a Designated Washington DC Agent for Service of Process. Anyone doing business with the Commission, regardless of their de minimis status, must obtain an FCC Registration Number (FRN). See, 47 C.F.R. § 1.8002(a). The same is true for Registration of Designated DC Agent for Service of Process. All telecommunications carriers, payphone aggregators, and interconnected VoIP providers, regardless of their de minimis status, must register with the Commission and designate an agent for service of process. See. 47 C.F.R. §§ 1.47, 64.1195. They may do so by filing FCC Form 499-A with the Universal Service Administrative Company (USAC) or file a notice with the FCC Office of the Secretary. See. 47 C.F.R. §§ 1.47, 64.1195. Afterward, all telecommunications carriers and interconnected VoIP providers must notify the Commission of any changes to registration information and agent for service of process information within one week of such changes. See. 47 C.F.R. §§ 1.47, 64.1195. Changes to FRN information must be filed with the FCC online and with USAC. See. 47 C.F.R. § 64.1195. Changes to the agent for service of process must be filed with the Chief of the FCC Market Disputes Resolution Division of the FCC Enforcement Bureau.

Periodic reporting requirements Telecommunications providers must file Telecommunications Reporting Worksheets (FCC Forms 499-A and 499-Q) periodically. The data reported on these forms are used to calculate their contributions to the USF, the North American Numbering Plan (NANP), Local Number Portability (LNP) cost recovery mechanisms, and the Telecommunications Relay Services (TRS) Fund. Failure to file is a violation of the Federal Communication Act and can result in the provider and the carrier being investigated for non-compliance and fined to failure to file and contribute their fair and reasonable portion of regulatory fees. Therefore, 499-A Reporting is not optional. It is required and it is enforced by the FCC against providers and carriers,

FCC Regulatory Contributions and De Minimis status. It has been our firm’s experience that there is often confusion over FCC regulatory fees, de minimis status, and filing requirements for new entrants or existing companies coming to the US and opening up business in telecom for the first time. The below is provided for informational purposes for when you speak with Maldonado Law.

Universal Service Fund. In general, telecommunications providers contribute to the USF based on a percentage of their interstate and international end-user telecommunications revenues. However, telecommunications providers that would be required to contribute to USF but meet the de minimis standard in a given year are not required to contribute to the USF that year.

Universal Service Fund and “de minimis” status of providers. Under the FCC rules, a telecommunications provider is considered de minimis if it is required to contribute to the federal Universal Service Fund (USF), but its contribution to the USF in a given year would be less than $10,000. Under 47 C.F.R. § 54.708, the term “telecommunications providers” includes “telecommunications carriers” as well as certain other providers of “telecommunications,” such as payphone providers that are aggregators, providers of interstate telecommunications for a fee on a non-common carrier basis, and interconnected Voice over Internet Protocol (VoIP) providers found under 47 C.F.R. § 54.706. The terms “telecommunications carrier” and “telecommunications” are also defined in section 54.5 of the Commission’s rules under 47 C.F.R. § 54.5 Telecommunications providers that are required to contribute to the USF include wireline telephone companies, wireless telephone companies, paging service providers, and certain Voice over Internet Protocol (VoIP) providers, known as “interconnected VoIP providers.” See. 47 C.F.R. § 54.706 and 47 C.F.R. § 54.5 (defining “interconnected VoIP provider”); also see, 47 C.F.R. § 9.3 (defining “interconnected VoIP service”). Should a telecommunications provider meet de minimis standards, it may be exempt from some, but not all, of the regulatory fees and filing requirements previously described. Consult Maldonado Law for a full regulatory review to determine which may, or may not, be applicable.

North American Numbering Plan Administration. The North American Numbering Plan (NANP) is the telephone numbering scheme for 19 North American countries, including the United States. See, 47 C.F.R. § 52.5(c). All telecommunications carriers in the United States must contribute to meet the costs of administering the NANP regardless of their de minimis status. See, 47 C.F.R. § 52.17(a). Carriers contribute based on a percentage of their intrastate, interstate, and international end-user telecommunications revenues. See, 47 C.F.R. § 52.17(a). The minimum contribution amount is $25, even if a carrier has no end-user telecommunications revenues. See, 47 C.F.R. § 52.17(a).

Local Number Portability Administration: Local Number Portability (LNP) is a service that allows telecommunications customers to keep the same telephone number (at the same location) when switching from one telecommunications carrier to another. See, 47 C.F.R. § 52.21(l). All telecommunications carriers must contribute to meet the costs of administering LNP, on a regional basis, regardless of their de minimis status. See 47 C.F.R. § 52.32. Carriers contribute based on their intrastate, interstate, and international end-user telecommunication service revenues. See, 47 C.F.R. § 52.32(a)(2). Carriers that have no intrastate, interstate, or international end-user revenues derived from providing telecommunications services must contribute $100. See, 47 C.F.R. § 52.32(a)(1).

Telecommunications Relay Services Fund. The TRS Fund supports the provision of telecommunications relay services allowing individuals with a hearing or speech disability to communicate through the telephone system with individuals without hearing or speech disabilities. See, 47 C.F.R. § 64.601(14). Interstate telecommunications carriers must contribute to the TRS Fund based on a percentage of their interstate and international end-user telecommunications revenues regardless of their de minimis status. See, 47 C.F.R. § 64.604(c)(5)(iii)(A). Every carrier providing interstate and international telecommunications services, which receives some revenues, must contribute at least $25. If a carrier contributes less than $1,200 annually, that payment must be made at the beginning of the contribution period. See, 47 C.F.R. § 64.604(c)(5)(iii)(B). Otherwise, a carrier may divide contributions into equal monthly payments. See, 47 C.F.R. § 64.604(c)(5)(iii)(B).

Florida Communications Service Tax

Working with Communication Service providers since 1998, Maldonado Law is versed in the issues and problems Florida provides face with Florida taxes on their services. The Florida Communication Service Tax (CST) is a state tax levied upon a wide range of voice and data services in Florida under Fla. Stat. 202 (Communications Services Tax Simplification Law). The four basic service areas to which CST applies are:

• Telephone, including Voice-over-Internet Protocol (VoIP), SIP and similar methods
• Mobile communications, or, similar services.
• Video, OTT and music streaming
• Cable and satellite television

The CST includes state tax and gross receipts taxes and is collected from on all post paid services rendered. The total CST is approximately 7.44%. The CST is specifically levied on the sale of “communications services” that are furnished entirely intrastate, or alternatively, on those communication services that either originate or terminate in the state. The CST is not levied on the privilege of merely “doing business in communications.” The tax is based upon service being provided to a Florida customer that has a billing address within the state, or location it operates from equipment in Florida. In the instance of Mobile Applications providing voice or “communication services,” the user’s payment record and/or Florida phone number may be used as a method of determining billing address. Virtual platforms, which they themselves do not offer communication or voice services in and out of Florida, may be deemed Infrastructure-as-a-Service (IaaS) and outside the definition of the CST. Most IP-PBX and Soft-switches fall inside the definition of CST “Communication Services.” Prepaid Communication and Voice services are treated slightly different from CST. For these communication services, sold in set bundles and prepaid, Florida Sales Tax applies at a similar rate to CST. When the Prepaid and Communication Services are resold downstream to eventual consumers in Florida, it must also be to a registered CST Dealer, who has a valid exemption certificate, which is verified by the seller.

Maldonado Law provides its clients with consultation on whether their services fall within the scope of communication services under CST. We have represented clients in CST audits by the Florida Department of Revenue (DOR), sought Technical Opinions from the Department, sought administrative appeals within the Department for CST determinations and CST audit determinations, and have successfully appealed CST determinations to the Florida District Court of Appeals. Maldonado Law is available to clients seeking assistance with CST problems, audits, administrative appeals and appeals to the Florida courts.

Wireless Providers and Commercial Radio Services (CRM) /MVNO

Our frim works with a variety of providers within the field of wireless. Our services include licensure and regulatory matters with the FCC, defense of FCC violations, commercial transactions and contracts, as well as consultation as to commercial and regulatory implications of new services or internal problems. We work with commercial operator licensees on a one-on-one basis whether they are an upstart reseller, an MVNO wholesale reseller or a seasoned company.

The FCC requires all telecommunication carriers to offer international and domestic commercial service originating or terminating in the United States to obtain a Section 214 authority before providing service. The term telecommunication carriers has been interrupted by the FCC to include wireless providers and commercial radio services including but not limited to Personal Communications Service (PCS), Specialized Mobile Radio (SMR) service, Private Land Mobile Radio service and satellite services. The requirement to seek Authority pursuant to 47 U.S.C. § 214 to provide international or domestic long distance services is absolute. The statute is a prohibitive statute requiring prior approval by the FCC before services can be rendered. This requirement is not only limited to upstart companies in the telecommunication field, but also acquisitions of telecommunication carriers by other carriers or companies, who must seek a transfer of control prior to any acquisition of a carrier or its assets, be they large or small.

Along with an FCC 214 License, Wireless Providers and Commercial Radio Service Providers offering services that originate or terminate within the United States are required to obtain other licenses. Wireless providers seeking to provide services in specific frequencies must acquire the requisite FCC License in order to provide that service. The type of license required is broken down by the FCC into categories which include but not limited to the flowing; 218-219 MHz Radio Service, 220 MHz Service, 3650-3700 MHz Radio Service, Basic Exchange Telephone Radio Service, Broadband PCS, Cellular Services, and Commercial Radio Operator License Program.

Telecom & Wireless Business

The legal issues facing telecommunications, wireless and VoIP providers today is ever changing with innovations from the industry and regulatory treatment of those innovations by the FCC and state regulatory bodies. This involves a mix of business and regulatory know-how. Maldonado Law has practiced in the area of telecommunications since inception and its primary attorney has practiced before the FCC on telecom issues since 1998. Some of the areas which we support our telecommunications, wireless and VoIP providers include:

• Communications service agreementsz
• Merger & acquisition due diligence
• Merger & acquisition agreements and closings
• Disputes between carriers or VOIP providers
• CALEA subpoena responses
• Bulk telephone service agreements and disputes
• Tower or line infrastructure issues & disputes (FL)
• Local zoning issues (FL)
• Access disputes with CLECS (FL)
• Bulk data service agreements and disputes
• FCC WISP registrations and compliance
• Compliance for mobile applications using SIP or VOIP
• Reseller agreements and reseller disputes with wireless carriers
• Regulatory fee disputes between carriers

In addition to the above, Maldonado Law also has experience in special niche industry business projects and niche regulatory licensing needs to accomplish those projects.These include:

State Certification of Prepaid Calling Services (PIN-Free and Mobile Application based PIN-Free)

Interstate and international prepaid calling cards and prepaid calling services sold within a state’s borders require certification as a provider of inter-exchange services and sometimes even as a certified prepaid calling card provider. This is done under a state’s Certification for Public Necessity & Convenience (CPNC), and the requirements (Bond Requirements, Hearings, Local Counsel, Financial Stability, Technical Capacity) vary from state-to-state. This certification must be done prior to entering the cards into markets within that particular state. Providers are required to file a tariff defining the terms and conditions under which they will sell these services to consumers in that state. The appropriate PUC/PSC reviews terms and conditions along with rates when it certifies the prepaid calling card provider. Federal regulation supports the state processes under CRF 42.11 (a) which requires federally de-tariffed non-dominant carriers who provide international service to make available to the public information concerning their existing rates, terms and conditions for all of its international and interstate services. This includes state agencies such as Public Service Commissions, Public Utility Commissions, and Public Utility Control Commissions.

We perform the Preparation, Processing, Submission, and Docket Tracking/Supplements for IXC (Inter-Exchange Carrier) Applications for Certification for Public Necessity & Convenience (CPNC) of prepaid calling services as carrier or reseller in all 50 U.S. States & U.S. Territory of Puerto Rico. This Includes:

• Applications for CPCN of Prepaid Calling Card or Service where separate from IXC;
• Applications for CPCN of Prepaid Long Distance Carrier as IXC Carrier;
• Preparation and filing of tariff updates to include new card pricing, remove discontinued cards, and update policies of the company
• Multi-State Corporate filings (with use of local counsel when required by state law)

C Section 214(e) ETC Designation

While most Wireline, VoIP and Wireless Common Carriers understand the Universal Service Fund (USF), Connect America Fund (CAF) and USAC as Fund Contributors. The Fund is designed to support specific needs that have been traditionally under-served by ILECs and Competitive CLECs, IXCs, Wireless Carriers and Broadband providers. Those carriers that qualify may be designated as an “Eligible Telecommunication Carrier (“ETC”) and receive subsidies to provide services to programs funded by the Universal Service Programs and the Connect America Fund. All ETCs are designated under the Communications Act of 1934, as amended, under 47 U.S.C. § 214(e). Maldonado Law represents applicant carriers seeking ETC designation in a particular State. We offer reasonable and flexible rates for small-sized ETC applicants based upon the applicant’s qualifications and service area. Contact our firm for requirements and quotes for particular ETC petitions or projects.

Prior to designating an ETC pursuant to 47 U.S.C. § 214(e)(6), the FCC must determine whether such designation, be it wireline or wireless, is in the public interest. In determining the public interest, the Commission considers a variety of factors, including the benefits of increased consumer choice and the unique advantages and disadvantages of the applicant’s service offering. An ETC must also: (1) certify that it will comply with the service requirements applicable to the support that it receives; (2) submit a five-year plan that describes with specificity proposed improvements or upgrades to the applicant’s network throughout its proposed service area, estimating the area and population that will be served as a result; (3) demonstrate that it will remain functional in emergency situations; and (4) demonstrate that it will satisfy applicable consumer protection and service quality standards. In the case of Wireless ETCs, they must further submit a “commitment by wireless applicants to comply with the Cellular Telecommunications and Internet Association’s Consumer Code for Wireless Service will satisfy this requirement.

Tribal ETCs and FCC Standing Rock Petitions

tanding Rock is a Tribally owned commercial mobile radio service (CMRS) provider operating within the boundaries of the Standing Rock Reservation. After a series of conflicting decisions by the FCC’s Bureaus on Standing Rock’s ETC Designation Petition, the matter was referred to the full Commission that concluded that the FCC has jurisdiction to designate Standing Rock within the service area of its own Reservation, and if a tribal company meets the statutory and regulatory requirements for being designated an ETC, the FCC directly may designate it as such for purposes of receiving Universal Service Support. The decision has opened up the opportunity for Tribal telephone Companies to serve their sovereign territories as ETCs, in addition to any other designations that may be granted by the Tribal Authorities or by Tribal Utility Commissions.

Our firm represents Tribal Telephone Companies seeking to be designated ETC on their sovereign territories through Petitions principled on the Decisions of the FCC under the Standing Rock Petitions. Our firm also works with Native American enterprises seeking to build tribal owned and controlled communication services and networks to service reservations and tribal territories through grants, infrastructure projects, and development of ETCs, CLECs, IXCs and Wireless tribal companies.

State ETC applications. State regulatory Commission qualification is the first step to any federal designation as an ETC. Specifically 47 U.S.C. § 214(e)(2) gives state utility commissions the primary responsibility for designating ETCs in their states. Each state maintains an individual process for designating ETCs. Some states require that a carrier be previously certified by the state to provide either CLEC or IXC services as a prerequisite to applying for ETC designations, other simply allow any common carrier to apply. In the case of Wireless Providers, some states defer regulation of Wireless to the FCC and retain jurisdiction over only Wireline Services. Those carriers contemplating becoming an ETC are well advised to be clear on their desired footprint of services, and, indentify what state territories that particular footprint implicates. The process for each state may be particular, and some state may require more stringent examination of the ETC candidates, including in-person hearings.

Contact Maldonado Law to schedule a confidential initial consultation your telecommunications needs, projects and matters so that we can assist you with and learn about our rates and experience.

TELECOMMUNICATIONS & MEDIA PRACTICE

• Radio & TV Broadcaster Practice
• Telecommunications Practice