**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 |   | CC Docket No. 96-45          |
|                                  |   |                              |
| Federal-State Joint Board on     |   | CC Docket No. 98-171         |
|                                  |   |                              |
| Universal Service                |   | CC Docket No. 97-21          |
|                                  |   |                              |
| 1998 Biennial Regulatory Review  |   |                              |
| --                               |   |                              |
|                                  |   |                              |
| Streamlined Contributor          |   |                              |
| Reporting                        |   |                              |
|                                  |   |                              |
| Requirements Associated with     |   |                              |
| Administration of                |   |                              |
| Telecommunications Relay         |   |                              |
| Service, North                   |   |                              |
|                                  |   |                              |
| American Numbering Plan, Local   |   |                              |
| Number Portability, and          |   |                              |
| Universal Service Support        |   |                              |
|                                  |   |                              |
| Mechanisms                       |   |                              |
|                                  |   |                              |
| Changes to the Board of          |   |                              |
| Directors of the                 |   |                              |
|                                  |   |                              |
| National Exchange Carrier        |   |                              |
| Associations, Inc.               |   |                              |
+----------------------------------+---+------------------------------+
|                                  |   |                              |
+----------------------------------+---+------------------------------+

ORDER

**Adopted: November 19, 2004 Released: December 9, 2004**

By the Chief, Wireline Competition Bureau:

# INTRODUCTION

1.  In this Order, the Wireline Competition Bureau (Bureau) modifies the
    deadline for filing revisions to the annual Telecommunications
    Reporting Worksheet (Worksheet or Form 499-A). In addition, we
    update the Instructions to the Telecommunications Reporting
    Worksheet, FCC Form 499-A (Instructions), to clarify our intention
    to reject as untimely any Form 499-A revised filing not submitted
    within twelve months of the due date of the original filing in
    question, if the revision would decrease regulatory fees or
    contributions to support mechanisms for universal service,
    interstate Telecommunications Relay Service, number administration,
    or local number portability. With regard to universal service
    contributions, several parties (Petitioners) have filed requests for
    review of decisions by the Universal Service Administrative Company
    (USAC) rejecting revised Worksheet filings as untimely under USAC's
    processing guidelines. [^1] We grant such requests and remand them
    to USAC for consideration as provided in this Order. We also direct
    USAC to consider, as provided in this Order, any revised Form 499-A
    filings that are pending before it on the release date of this
    Order, or that it receives between the release date of this Order
    and the effective date of this Order.

2.  Adoption of a firm deadline for filing revisions to the Worksheet
    will help ensure the stability and sufficiency of the federal
    universal service fund, as contemplated in section 254(d) of the
    Communications Act of 1934, as amended (the Act).[^2] We also find
    that a firm deadline for revised Worksheets will improve the
    integrity of the universal service contribution methodology and
    promote efficiency in administration of support mechanisms for
    universal service, interstate Telecommunications Relay Service, the
    North American Numbering Plan and Local Number Portability,
    consistent with the Commission's rules and policies.

# BACKGROUND

3.  The Form 499-A collects information that is used to assess
    regulatory fees and contributions to federal universal service,
    interstate Telecommunications Relay Service (TRS), administration of
    the North American Numbering Plan (NANP), and shared costs of local
    number portability (LNP).[^3] In addition, all telecommunications
    carriers providing interstate telecommunications service must
    register using the Form 499-A, and all common carriers use the Form
    499-A to designate agents in the District of Columbia for service of
    process.[^4]

    **A. Universal Service**

4.  Pursuant to section 254 of the Act, all telecommunications carriers
    providing interstate telecommunications services and certain other
    providers of interstate telecommunications are required to
    contribute to the federal universal service support mechanisms.[^5]
    Currently, contributions to universal service are based on a
    percentage of contributor-provided projections of collected
    interstate and international end-user telecommunications
    revenues.[^6] This percentage is called the contribution factor. The
    Commission determines the contribution factor each quarter.[^7]

5.  The Commission has designated USAC as the neutral entity responsible
    for administering the universal service support mechanisms,
    including billing contributors, collecting contributions to the
    universal service support mechanisms, and disbursing universal
    service support funds.[^8] Consistent with section 54.711 of the
    Commission's rules, contributions are calculated and filed in
    accordance with the Worksheet, which sets forth information that the
    contributor must submit to USAC on a quarterly and annual basis.[^9]
    Contributors must file a Form 499-A on April 1 of each year to
    report their annual revenues from the previous year and file a Form
    499-Q on a quarterly basis, on the first day of February, May,
    August, and November, to report their revenues from the prior
    quarter and their projections of revenues for the upcoming quarter.
    [^10] Prior to 2003,[^11] contributors used the Form 499-Q only to
    report their revenues from the prior quarter.[^12] The Form 499-Q is
    only used for universal service contribution purposes. Any entities
    that have universal service contributions totaling less than
    \$10,000 within a particular year are not required to submit
    universal service contributions, although they may still have to
    file Worksheets for purposes other than universal service.[^13]

6.  If a contributor discovers errors in a Form 499-Q, the contributor
    may file a revised Form 499-Q. As of April 2003, revised Form 499-Q
    filings are due within 45 days of the original filing date.[^14]
    Prior to April 2003, revised Form 499-Q filings had to be submitted
    by the filing date for the next Form 499-Q filing.[^15] The
    contributor may also true-up errors from Form 499-Qs when it files
    the Form 499-A the following year.[^16] If a contributor discovers
    errors in a Form 499-A, however, the contributor must submit a
    revised Form 499-A by December 1 of the same filing year.[^17] If
    there is good cause to go beyond the December 1 deadline, a carrier
    may file a revision late if the revision is accompanied by an
    explanation of the cause for the change, along with complete
    documentation showing how the revised figures derive from corporate
    financial records.[^18]

7.  To improve the accuracy of the revenues reported, the USAC Board of
    Directors authorized USAC to allow contributors to file new or
    revised Form 499-As after the original due date for a period of up
    to twelve months, *i.e.,* March 31 of the subsequent year.[^19]
    According to its processing guidelines, USAC will not accept a
    revised Form 499-A beyond one year after the original filing
    deadline if the revision would reduce a contributor's universal
    service obligation.

    **B. TRS, NANP, LNP, and Regulatory Fees**

8.  Contributions to support the interstate TRS fund are calculated
    using interstate end-user telecommunications revenue for the prior
    year multiplied by a contribution factor determined annually by the
    Commission.[^20] The minimum annual contribution to the interstate
    TRS fund is \$25.00.[^21] Contributions to numbering administration
    are a product of a contributor's end-user telecommunications
    revenues for the prior year multiplied by a contribution factor
    determined annually by the Commission.[^22] The minimum annual
    contribution to the NANP is \$25.00.[^23] The shared costs of LNP
    are funded by contributions from all telecommunications carriers
    providing telecommunications service in areas served by a particular
    regional database.[^24] Part of these LNP contributions come from
    assessments on intrastate, interstate, or international revenue
    earned from providing telecommunications service in areas served by
    a particular regional database.[^25] Finally, interstate
    telecommunications providers are required to pay annual regulatory
    fees based on interstate and international end-user revenues
    multiplied by a fee factor. If the regulatory fee amount is less
    than \$10, the entity is exempt from payment of these fees.[^26] In
    all the above cases, relevant revenues are reported on the Form
    499-A.[^27]

    **C. Delegated Authority**

9.  In the *Second Order on Reconsideration*, the Commission delegated
    authority to the Bureau to waive, reduce, or eliminate the
    contributor reporting requirements associated with the universal
    service support mechanisms.[^28] In a subsequent order, the
    Commission clarified that this delegation also authorizes the Bureau
    to "modify" contributor reporting requirements for the TRS, NANP,
    and LNP funds and to make future changes to the Telecommunications
    Reporting Worksheet.[^29] Accordingly, the Commission amended
    section 54.711(c) to allow the Bureau to "waive, reduce, modify, or
    eliminate reporting requirements that prove unnecessary and require
    additional reporting requirements that the Bureau deems necessary to
    the sound and efficient administration of the universal service
    support mechanisms." The Commission reaffirmed that this delegation
    extends only to making changes to the administrative aspects of the
    reporting requirements, such as "where and when worksheets are
    filed," and not to the substance of the underlying programs.[^30]

# DISCUSSION

10. In this Order, we modify the Form 499-A Instructions by changing the
    deadline for contributors to file revised Form 499-As that would
    result in decreased contribution amounts.[^31] We adopt a
    twelve-month deadline for filing revisions to the Form 499-A which
    would result in a decreased contribution amount.[^32] Accordingly,
    any revised 499-A that would result in decreased contributions must
    be submitted by March 31 of the year after the original filing due
    date. The prior Instructions required revisions within nine months
    and contemplated the potential for revisions beyond that time period
    if there was good cause for the delay in filing and an explanation
    justifying the change. For the reasons described below, however, we
    now find that a firm twelve-month deadline for revisions that would
    result in reduced contributions will improve administrative
    efficiency and certainty for the contribution systems for universal
    service, TRS, NANP, and LNP. We conclude that adoption of a firm
    deadline for filing such revisions to the Worksheet will help ensure
    the stability and sufficiency of the federal universal service fund,
    as contemplated in section 254(d) of the Act, as well as the funds
    for TRS, NANP, and LNP.[^33] In addition, we find that a firm
    deadline for revised Worksheets will improve the integrity of the
    universal service contribution methodology and promote efficiency in
    administration of the universal service support mechanisms,
    consistent with the Commission's rules and policies. Our actions
    today will allow USAC and other fund administrators to reduce
    substantially the need for adjustments regarding a given
    contribution year, providing certainty to contributors and their
    customers.

11. In our experience, twelve months is a sufficient period of time for
    contributors to revise their 499-A filings for the purpose of
    reducing their contribution obligations. With regard to universal
    service contributions, as discussed above, the quarterly-filed 499-Q
    contains information about both projected revenue for the upcoming
    quarter and actual revenue for the past quarter. Each 499-Q filing
    provides an opportunity to report actual revenue information from
    the prior quarter. On April 1 of each year, carriers file revenue
    information for the prior year, which helps to determine whether the
    revenue information in the prior year's 499-Qs was correct. As a
    result, the 499-A is an opportunity to correct previously-filed
    revenue information.[^34] With the new deadline for filing revisions
    to the Form 499-A, carriers will have a window of one entire year in
    which to determine whether revenues reported and contribution
    amounts paid the prior year was too high. Thus, any revised 499-A
    that is filed by the new deadline represents a third opportunity for
    carriers to review and file revenue information for the prior year.
    With regard to TRS, NANP, and LNP contributions, contributors still
    have two opportunities to review and file revenue information
    (*i.e.*, in the original 499-A filing and the revised 499-A filing).
    We find that twelve months is ample time for a diligent filer to
    determine what revenues it earned the prior year. Setting a
    twelve-month deadline for filing revisions to the 499-A as described
    herein gives contributors adequate time to discover errors, while
    providing incentive to submit accurate revenue information in a
    timely manner. We note that this Order will have minimal impact on
    the payment of regulatory fees because entities pay regulatory fees
    within four months of the original April 1 Form 499-A submission,
    and most entities become aware of any need to file revisions at the
    time of payment.

12. Form 499-As that are filed after the effective date of this Order
    will be subject to the twelve-month deadline. Thus, contributors
    will be required to submit revisions to the Form 499-A within twelve
    months of the original filing deadline, *i.e.,* March 31 of the
    subsequent year.[^35] Revised Form 499-As that are submitted after
    the revision deadline will be rejected by USAC as untimely. Because
    this Order will become effective after the filing deadline for the
    2004 Form 499-A (which was April 1, 2004), contributors will be
    permitted to submit revisions to the 2004 Form 499-A up to twelve
    months following the effective date of this Order.

13. As explained above, several Petitioners have filed requests for
    review of decisions by the Universal Service Administrative Company
    (USAC) rejecting revised Worksheet filings as untimely under USAC's
    processing guidelines.[^36] Because the decision we adopt today does
    not take effect until thirty days after publication in the Federal
    Register, these requests (and any other pending requests filed
    before the effective date of this Order) are subject to the standard
    currently in effect. Although this Order adopts USAC's one-year
    deadline for the above-stated reasons, we grant the pending requests
    for review to allow USAC to consider if there was good cause to
    allow revisions beyond the deadline contained in the Instructions.
    We remand these requests to USAC and direct USAC to revise universal
    service contribution obligations as appropriate provided that: (1)
    the Petitioner has demonstrated good cause for submitting the
    revision beyond the one-year revision window; and (2) the Petitioner
    has provided "an explanation of the cause for the change along with
    complete documentation showing how the revised figures derive from
    corporate financial records." [^37] That is, USAC shall only revise
    contribution obligations to the extent that the carrier has provided
    accurate and legitimate reasons for filing late and for revising the
    obligation, in accordance with the existing Worksheet Instructions.
    The Petitioners are permitted to supplement their filings to USAC as
    necessary between the release date of this Order and the effective
    date of this Order. To the extent that a request for review
    encompasses issues in addition to revised 499-A issues, we remand to
    USAC only the portion of the request that deals with revised 499-A
    filings, and retain the remainder of the request for disposition by
    the Bureau or Commission.

14. In addition, we direct USAC to consider any similarly-situated
    revised 499-A filings that it receives between the release date of
    this Order and the effective date of this Order and to revise
    universal service contribution obligations in accordance with the
    above guidelines. In the event that there are pending
    similarly-situated 499-A revisions that were filed with USAC prior
    to the release date of this Order, we direct USAC also to consider
    such filings in accordance with the above guidelines. These filers
    are permitted to supplement their filings to USAC as necessary
    between the release date of this Order and the effective date of
    this Order. All filings that are made to USAC in connection with
    this Order should be captioned, "ATTN: Form 499-A Revision Order"
    and sent to the Universal Service Administrative Company, 2000 L
    Street, N.W., Suite 200, Washington, DC 20036.

    **IV. ORDERING CLAUSES**

15. Accordingly, IT IS ORDERED that, pursuant to authority contained in
    sections 1, 4, and 254 of the Communications Act of 1934, as
    amended, 47 U.S.C. §§ 151, 154, 254, and the authority delegated
    under sections 0.91, 0.291, 1.3, and 54.711 of the Commission's
    rules, 47 C.F.R. §§ 0.91, 0.291, 1.3, and 54.711, this Order SHALL
    BE EFFECTIVE thirty days after publication in the Federal Register.

16. IT IS FURTHER ORDERED that, pursuant to authority contained in
    sections 1, 4, and 254 of the Communications Act of 1934, as
    amended, 47 U.S.C. §§ 151, 154, 254, and the authority delegated
    under sections 0.91, 0.291, 1.3, and 54.711 of the Commission's
    rules, 47 C.F.R. §§ 0.91, 0.291, 1.3, and 54.711, the requests for
    review of decisions by the Universal Service Administrative Company
    listed in Appendix A are REMANDED to the Universal Service
    Administrative Company for further review.

17. IT IS FURTHER ORDERED that a copy of this Order SHALL BE transmitted
    to the Universal Service Administrative Company.

    FEDERAL COMMUNICATIONS COMMISSION

    Jeffrey J. Carlisle

Chief

Wireline Competition Bureau

**APPENDIX A**

Requests for Review of USAC Decisions Rejecting Revised Form 499-As

  ----------------------------------- -----------------------------------
  **[Petitioner]{.underline}**        **[Date Filed]{.underline}**

                                      

  Access One, Inc.                    November 23, 2004

  Airnex Communications, Inc.         December 4, 2003

  Alliance Group Services             October 31, 2001

  ARC Networks, Inc.                  November 20, 2001

  Bright Personal Communications      February 10, 2003
  Services, LLC                       

  Business Discount Plan, Inc.        March 3, 2003

  Cooperative Communications, Inc.    October 3, 2002

  Crown Communication, Inc.           July 23, 2002

  Dial-Thru, Inc.                     February 17, 2004

  Eagle Communications, Inc.          November 26, 2003

  Equant Inc.                         September 25, 2003

  Eureka Networks f/k/a Eureka        September 30, 2004
  Broadband Corporation               

  GE Business Productivity Solutions, July 3, 2002
  Inc.                                

  Griggs County Telephone Company     April 22, 2002

  Morris Communications, Inc.         July 12, 2002

  New Hope Telephone Company          July 3, 2002

  SBC Communications, Inc.            November 9, 2004

  SES Americom, Inc.                  October 27, 2003

  Total Communications Services, Inc. September 8, 2003
  ----------------------------------- -----------------------------------

[^1]: A list of these requests for review is provided in Appendix A to
    this Order.

[^2]: 47 U.S.C. § 254(d). The Communications Act of 1934 was amended by
    the Telecommunications Act of 1996. *See* Pub. L. No. 104-104, 110
    Stat. 56.

[^3]: *See* 47 C.F.R. §§ 64.604(c)(5)(iii)(B), 52.17(b), 52.32(b). *See
    also 1998 Biennial Regulatory Review -- Streamlined Contributor
    Reporting Requirements Associated with Administration of
    Telecommunications Relay Service, North American Numbering Plan,
    Local Number Portability, and Universal Service Support Mechanisms,
    Telecommunications Services for Individuals with Hearing and Speech
    Disabilities, and the Americans With Disabilities Act of 1990,
    Administration of the North American Numbering Plan and North
    American Numbering Plan Cost Recovery Contribution Factor and Fund
    Size, Number Resource Optimization, Telephone Number Portability,
    Truth-in-Billing and Billing Format*, Report and Order, CC Docket
    Nos. 96-45, 98-171, 90-571, 92-237, 99-200, 95-116, 98-170, FCC
    99-175 (rel. July 14, 1999), at para. 1 (*Form Consolidation
    Order*).

[^4]: *See* 47 C.F.R. §§ 64.1195(a), 1.47.

[^5]: 47 U.S.C. § 254(d). *See* 47 C.F.R. § 54.706(b).

[^6]: *See Federal-State Joint Board on Universal Service, 1998 Biennial
    Regulatory Review -- Streamlined Contributor Reporting Requirements
    Associated with Administration of Telecommunications Relay Service,
    North American Numbering Plan, Local Number Portability, and
    Universal Service Support Mechanisms, Telecommunications Services
    for Individuals with Hearing and Speech Disabilities, and the
    Americans With Disabilities Act of 1990, Administration of the North
    American Numbering Plan and North American Numbering Plan Cost
    Recovery Contribution Factor and Fund Size, Number Resource
    Optimization, Telephone Number Portability, Truth-in-Billing and
    Billing Format*, Report and Order and Second Further Notice of
    Proposed Rulemaking, CC Docket Nos. 96-45, 98-171, 90-571, 92-237,
    99-200, 95-116, 98-170, 17 FCC Rcd 24952, 24970 (2002)
    (*Contribution Methodology Order and NPRM*); *see also* 47 C.F.R. §
    54.706(b).

[^7]: *See* 47 C.F.R. § 54.709(a).

[^8]: *See Changes to the Board of Directors of the National Exchange
    Carrier Association, Inc., Federal-State Joint Board on Universal
    Service*, Report and Order and Second Order on Reconsideration, CC
    Docket Nos. 96-45, 97-21, 12 FCC Rcd 18400, 18423-24, para. 41
    (1997) (*Second Order on Reconsideration*). *See also* 47 C.F.R. §
    54.701.

[^9]: 47 C.F.R. § 54.711(a).

[^10]: *See* Form 499-A Instructions at 9; Instructions for Completing
    the Quarterly Worksheet for Filing Contributions to Universal
    Service Support Mechanisms at 8 (Form 499-Q Instructions). Unless
    otherwise indicated, all references are to the 2003 version of the
    Form 499-Q Instructions.

[^11]: The requirement in the *Contribution Methodology Order and NPRM*
    for contributors to report projected revenues in the Form 499-Q
    became effective January 29, 2003. *See* 67 Fed. Reg. 79525 (2002).

[^12]: *Federal-State Joint Board on Universal Service*, *Petition for
    Reconsideration filed by AT&T*, Report and Order and Order on
    Reconsideration, 16 FCC Rcd 5748, 5752 (2001) (*Form 499-Q Order*).

[^13]: *See* 47 C.F.R. § 54.708; 499-A Instructions at 5. As explained
    below, the Worksheet also collects information for assessing
    regulatory fees and for contributions to interstate
    telecommunications relay services, administration of the North
    American Numbering Plan, and shared costs of local number
    portability administration. *See infra* para. 8. *See also* 499-A
    Instructions at 3.

[^14]: *See* Form 499-Q Instructions at 9.

[^15]: *See Form 499-Q Order,* 16 FCC Rcd at 5753, n.22; *see also* 2002
    Form 499-Q Instructions at 9.

[^16]: *See Form 499-Q Order*, 16 FCC Rcd at 5752-5753, para. 12.

[^17]: *See* Form 499-A Instructions at 11.

[^18]: *See id.*

[^19]: *See* Universal Service Administrative Company, Board of
    Directors Meeting, July 27, 1999 Minutes.
    <http://www.universalservice.org/board/minutes/board/072799.asp>.

[^20]: *See* 47 C.F.R. § 64.604(c)(5)(iii)(B).

[^21]: *See id.*

[^22]: *See* 47 C.F.R. § 52.17(a).

[^23]: *See id.*

[^24]: *See* 47 C.F.R. § 52.32(a).

[^25]: *See* 47 C.F.R. § 52.32(a)(2)(i).

[^26]: *See* 47 C.F.R. § 1.1154; *In the Matter of Assessment and
    Collection of Regulatory Fees for Fiscal Year 2004,* Report and
    Order, MD Docket No. 04-73, 19 FCC Rcd. 11662, 11714, para. 136
    (2004).

[^27]: *See* 47 U.S.C. §§ 64.604(c)(5)(iii)(B), 52.17(b), 52.32(b).

[^28]: *See Second Order on Reconsideration*, 12 FCC Rcd at 18442. *See
    also* 47 C.F.R. § 54.711(c). At the time of the delegation, this
    Bureau was known as the Common Carrier Bureau.

[^29]: *See Form Consolidation Order,* FCC 99-175, at para. 40.

[^30]: *Id.* at para. 39.

[^31]: These changes to the Form 499-A Instructions are procedural,
    non-substantive changes to the administrative aspects of the
    reporting requirements. *See JEM Broadcasting Company, Inc. v.
    Federal Communications Commission*, 22 F.3d 320 (1994) (holding that
    the Commission's "hard look" rules, permitting amendments to
    broadcast license applications only during a 30-day window, were
    procedural and thus, notice and comment was not mandated by the
    Administrative Procedure Act). Because the changes here are "rules
    of agency organization, procedure, or practice," we are not required
    to follow the general procedures for notice and comment of section
    553 of the Administrative Procedure Act. *See* 5 U.S.C. §
    553(b)(3)(A). For the same reason, the Commission will not send a
    copy of this Order to Congress and the General Accounting Office
    pursuant to the Congressional Review Act. *See* 5 U.S.C. §
    801(a)(1)(A).

[^32]: We note that the Form 499-A replaced Forms 431 (TRS), 457
    (universal service), 487 (number portability), 496 (number
    administration), and that the Form 499-Q replaced the Form 499-S.
    *See Form Consolidation Order,* FCC 99-175, at para. 6;
    *Contribution Methodology Order and NPRM,* 17 FCC Rcd at 24952,
    para. 1. This deadline applies to all prior revenue reporting
    worksheets, including the Forms 431, 457, 487, 496, and 499-S.

[^33]: 47 U.S.C. § 254(d).

[^34]: *See, e.g.,* *Contribution Methodology Order and NPRM,* 17 FCC
    Rcd 24952, 24970, 24973, paras. 32, 36.

[^35]: Corresponding revisions regarding filing deadlines will be
    included in the instructions for the 2005 Form 499-A.

[^36]: *See* Appendix A.

[^37]: *See* Form 499-A Instructions at 11.