**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the Matter of                 | *  | CC Docket No. 96-45          |
|                                  | *) |                              |
| Federal-State Joint Board on     | ** |                              |
|                                  |    |                              |
| Universal Service                | *  |                              |
|                                  | *) |                              |
| GatewayUSA Holding Company Inc., | ** |                              |
| Cosmos Telecom Marketing, Inc.,  |    |                              |
| and Sitel, Inc.                  | *  |                              |
|                                  | *) |                              |
| Petition for Partial Waiver or,  | ** |                              |
| Alternatively, Clarification of  |    |                              |
| Section 54.703 of the            | *  |                              |
| Commission's Rules               | *) |                              |
|                                  | ** |                              |
| Inteleca Communications          |    |                              |
| Corporation                      | *  |                              |
|                                  | *) |                              |
| Petition for Waiver of Rules     | ** |                              |
| 54.705, 54.707, 54.709, 54.711,  |    |                              |
| and 54.713                       | *  |                              |
|                                  | *) |                              |
| Microdevices Worldwide Inc.      | ** |                              |
|                                  |    |                              |
| Petition for Partial Waiver or,  | *  |                              |
| in the Alternative,              | *) |                              |
| Clarification of Universal       | ** |                              |
| Service Contribution             |    |                              |
| Requirements Contained in        | *  |                              |
| Section 54.703 of the            | *) |                              |
| Commission's Rules               | ** |                              |
|                                  |    |                              |
| Minimum Rate Pricing, Inc.       | *  |                              |
|                                  | *) |                              |
| Petition for Partial Waiver of   | ** |                              |
| the Universal Service            |    |                              |
| Contribution Requirements Under  | *  |                              |
| Sections 54.703, 54.709 and      | *) |                              |
| 54.711 of the Commission's Rules | ** |                              |
|                                  |    |                              |
| RealWorld Advanced Technology    | *  |                              |
| Inc.                             | *) |                              |
|                                  | ** |                              |
| Petition for Waiver of Rules     |    |                              |
| 54.705, 54.707, 54.709, 54.711,  | *  |                              |
| and 54.713                       | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
+----------------------------------+----+------------------------------+

**ORDER**

**Adopted: September 8, 2004 Released: September 8, 2004**

By the Chief, Wireline Competition Bureau:

# I. INTRODUCTION

1.  In this Order, we dismiss several petitions for waiver currently
    pending before the Federal Communications Commission ("Commission").
    First, Inteleca Communications Corporation ("Inteleca") and
    RealWorld Advanced Technology Inc. ("RealWorld"), two resellers of
    international long distance service, each request a waiver of
    sections 54.705, 54.707, 54.709, 54.711, and 54.713 of the
    Commission's rules,[^1] and seek authorization to calculate their
    universal service obligations based solely on their revenues from
    calls terminating within the United States.[^2] Second, in similar
    petitions, GatewayUSA Holding Company Inc., Cosmos Telecom
    Marketing, Inc., and Sitel, Inc. (collectively, the "Gateway
    Affiliates"), and Microdevices Worldwide Inc. ("Microdevices")
    request a partial waiver of section 54.703 of the Commission's
    rules[^3] so they may exclude from their universal service
    contribution bases revenues derived from foreign originating and
    U.S. terminating services.[^4] Third, Minimum Rate Pricing, Inc.
    ("MRP") requests a waiver from the Commission's rules requiring that
    current year universal service contributions be based on revenues
    from the previous year.[^5] Since these petitions were filed, the
    Commission has addressed each of these issues in rulemaking
    proceedings. Accordingly, we deny these petitions.

    **II. BACKGROUND**

2.  The *Universal Service First Report and Order* generally required
    all telecommunications carriers providing interstate
    telecommunications service to contribute to universal service on the
    basis of their end-user telecommunications revenues as calculated
    using the entity's prior year revenue. The Commission found that
    carriers that provide only international telecommunications services
    are not "telecommunications carriers that provide interstate
    telecommunications services," and, therefore, are exempt from the
    mandatory universal service contribution obligation.[^6] Carriers
    that provide both interstate and international telecommunications,
    however, are required to contribute to the universal service support
    mechanism based on their total revenue from both categories of
    service.[^7] In addition, at the time these waiver requests were
    filed, carriers were required to contribute to the universal service
    support mechanism based on their historical gross billed
    revenues.[^8]

3.  On July 24, 1998, Inteleca filed a petition requesting a waiver of
    then-sections 54.705, 54.707, 54.711, and 54.713 of the Commission's
    rules.[^9] Several weeks later, on August 11, 1998, RealWorld filed
    a petition requesting identical relief.[^10] Both carriers assert
    that nearly all of their traffic originates and terminates
    internationally, and request authorization to calculate their
    universal service obligations based solely upon their revenues of
    calls terminated within the United States.[^11]

4.  On March 26, 1998, Microdevices filed a petition for waiver of
    section 54.703 of the Commission's rules, which at that time
    required all carriers providing interstate services to contribute to
    the universal service fund based on their intrastate, interstate,
    and international revenues.[^12] Microdevices seeks a waiver to
    exclude revenues derived from providing services that originate in
    foreign points and terminate in the U.S from its universal service
    contribution base.[^13] In the alternative, Microdevices requests
    that the Commission clarify that section 54.703 permits it to
    perform its universal service contribution calculation in such a
    way.[^14] Similarly, on April 22, 1998, the Gateway Affiliates filed
    a petition for waiver of section 54.703 of the Commission's rules,
    or, in the alternative, ask that the Commission clarify that section
    54.703 permits them to exclude international revenue from traffic
    originating in foreign points from the calculation of their
    universal service contribution obligation.[^15]

5.  On September 17, 1999, MRP filed a petition for partial waiver of
    sections 54.703, 54.709, and 54.711 of the Commission's rules.[^16]
    In its petition, MRP, a reseller of intrastate and interstate
    telecommunications services, seeks relief from the universal service
    assessment methodology that bases current year universal service
    contributions on revenues from the previous filing period.[^17]
    Specifically, MRP states that its "revenues have declined
    dramatically over the past twelve months," and that, on February 26,
    1999, it filed for relief under Chapter 11 of the U.S. Bankruptcy
    Code.[^18] MRP argues that the Commission's universal service
    contribution calculation methodology would "result\[\] in a
    contribution assessment against MRP that is both inequitable and
    discriminatory, and which \[would\] result\[\] in an assessment that
    is grossly disproportionate to MRP's \[current\] end-user
    telecommunications revenue."[^19]

    **III. DISCUSSION**

6.  *Petitions for Waiver Filed by Inteleca, RealWorld, Microdevices,
    and the Gateway Affiliates.* Pursuant to section 1.3 of our rules,
    the Commission's rules may be waived for good cause shown.[^20]
    However, "an applicant for waiver faces a high hurdle even at the
    starting gate."[^21] The Commission may exercise its general
    discretion to waive a rule where the particular facts make strict
    compliance inconsistent with the public interest.[^22] A waiver
    applicant traditionally has a heavy burden to demonstrate that the
    arguments advanced in support of the waiver request are
    substantially different from those that have been carefully
    considered at the rulemaking stage.[^23] Generally, the Commission
    need not revisit a matter and reconsider policy every time it
    receives an application for a waiver.[^24] In this instance, we
    conclude that Inteleca, RealWorld, Microdevices, and the Gateway
    Affiliates have all failed to present the special circumstances
    necessary to justify grant of a waiver.

7.  The Commission, in the rulemaking proceeding that implemented the
    statutory contribution requirement, considered and rejected the
    proposition that revenue from the provision of international
    telecommunications service should be excluded.[^25] Moreover, during
    the time since these petitions for waiver were filed, the Commission
    has reexamined this requirement. In 1998, the Commission enacted
    section 54.706 of its rules, which requires in part that "\[a\]ny
    entity required to contribute to the federal universal service
    support mechanisms whose interstate end-user telecommunications
    revenues comprise less than 8 percent of its combined interstate and
    international end-user telecommunications revenues shall contribute
    to the federal universal service support mechanisms . . . based only
    on such entity's interstate end-user telecommunications
    revenues."[^26] This rule was intended to exclude from the
    contribution base the international end-user telecommunications
    revenues of any telecommunications provider whose annual
    contribution would exceed the amount of its interstate end-user
    telecommunications revenues.[^27] In 2002, the Commission increased
    this limited international revenues exception from eight to twelve
    percent to ensure that contributors are not required to contribute
    more to universal service than they derive from interstate end-user
    telecommunications revenues.[^28] At that time, the Commission
    explicitly declined to exclude international revenues from the
    contribution requirement altogether.[^29] We find that the petitions
    filed by Inteleca, RealWorld, Microdevices, and the Gateway
    Affiliates each fail to present special circumstances to justify
    granting waivers in these instances. Accordingly, these carriers
    should comply with the Commission's requirements set forth in
    section 54.706.

8.  *MRP's Petition for Waiver*. As stated above, pursuant to section
    1.3 of our rules, the Commission may waive any provision of its
    rules or orders if "good cause" is shown.[^30] The standard for good
    cause requires the petitioner to demonstrate that special
    circumstances warrant deviation from the rules and that such a
    deviation would better serve the public interest than the general
    rule.[^31] We note that in an order released in 2002, the Commission
    addressed the issue raised by MRP's petition by modifying its
    methodology for assessing contributions to the universal service
    fund by basing them on projections provided by contributors of their
    collected end-user interstate and international telecommunications
    revenues for the following quarter.[^32] In light of this order, MRP
    has failed to demonstrate special circumstances that would warrant
    waiver of the contribution requirement that was in effect at the
    time. Accordingly, we deny this petition.

9.  We also find unpersuasive MRP's contention that the "unique
    circumstances" surrounding its bankruptcy proceeding warrant a
    waiver.[^33] The Bureau denied a nearly identical request for relief
    in 1997.[^34] In that case, the petitioner claimed that, because it
    had recently filed for bankruptcy under Chapter 11, universal
    service contributions "could disrupt its agreements with lenders and
    would divert capital needed to run its operations," and requested a
    waiver of section 54.703 of the Commission's rules.[^35] Here, MRP
    similarly argues that "a strict application of the rules \[would\]
    threaten\[\] the viability" of its business.[^36] In denying the
    similar request for relief in 1997, the Bureau reasoned that
    "\[u\]niversal service contributions, once assessed, are a financial
    obligation and this obligation shall not be waived because of
    potential financial problems that may be created by the financial
    obligation."[^37] We find that denial of MRP's waiver request is
    consistent with precedent, and thus deny MRP's Petition for Waiver.

    **IV. ORDERING CLAUSES**

10. IT IS FURTHER ORDERED, that, pursuant to sections 1, 4(i), 4(j), and
    254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 154(j), and 254, and section 1.3 of the Commission's rules,
    47 C.F.R. § 1.3, and the authority delegated in sections 0.91 and
    0.291 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, the
    Request for Waiver from the Universal Service Contribution
    Requirement filed by Inteleca Communications Corporation, IS DENIED.

11. IT IS FURTHER ORDERED, that, pursuant to sections 1, 4(i), 4(j), and
    254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 154(j), and 254, and section 1.3 of the Commission's rules,
    47 C.F.R. § 1.3, and the authority delegated in sections 0.91 and
    0.291 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, the
    Request for Waiver from the Universal Service Contribution
    Requirement filed by RealWorld Advanced Technology Inc., IS DENIED.

12. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 4(j), and 254
    of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 154(j), and 254, and section 1.3 of the Commission's rules,
    47 C.F.R. § 1.3, and the authority delegated in sections 0.91 and
    0.291 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, that
    GatewayUSA Holding Company Inc., Cosmos Telecom Marketing, Inc., and
    Sitel, Inc. Petition for Partial Waiver is DENIED.

13. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 4(j), and 254
    of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 154(j), and 254, and section 1.3 of the Commission's rules,
    47 C.F.R. § 1.3, and the authority delegated in sections 0.91 and
    0.291 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, that
    Microdevices Worldwide Inc. Petition for Partial Waiver is DENIED.

14. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 4(j), and 254
    of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 154(j), and 254, and section 1.3 of the Commission's rules,
    47 C.F.R. § 1.3, and the authority delegated in sections 0.91 and
    0.291 of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, that
    Minimum Rate Pricing's Petition for Partial Waiver is DENIED.

    FEDERAL COMMUNICATIONS COMMISSION

    Jeffrey J. Carlisle

    Chief

    Wireline Competition Bureau

[^1]: 47 C.F.R. §§ 54.705, 54.707, 54.709, 54.711, 54.713 (1998).

[^2]: Inteleca Communications Corporation, Request for Waiver, CC Docket
    No. 96-45 (filed July 24, 1998) ("Inteleca Petition"); RealWorld
    Advanced Technology Inc., Request for Waiver, CC Docket No. 96-45
    (filed August 11, 1998) ("RealWorld Petition").

[^3]: 47 C.F.R. § 54.703.

[^4]: Microdevices Worldwide Inc., Petition for Partial Waiver or, in
    the Alternative, Clarification of Universal Service Contribution
    Requirements Contained in Section 54.703 of the Commission's Rules,
    CC Docket No. 96-45 (filed March 26, 1998) ("Microdevices
    Petition"); GatewayUSA Holding Company Inc., Cosmos Telecom
    Marketing, Inc., and Sitel, Inc., Petition for Partial Waiver or,
    Alternatively, Clarification of Section 54.703 of the Commission's
    Rules, CC Docket No. 96-45 (filed April 22, 1998) ("Gateway
    Affiliates Petition").

[^5]: Minimum Rate Pricing, Inc., Petition for Partial Waiver of the
    Universal Service Contribution Requirements Under Sections 54.703,
    54.709 and 54.711 of the Commission's Rules, CC Docket No. 96-45
    (filed September 17, 1999) ("MRP Petition").

[^6]: *See* *Federal-State Joint Board on Universal Service*, Report and
    Order, CC Docket No. 96-45, 12 FCC Rcd 8776, 9174 para. 779 (1997),
    *as corrected by Federal-State Joint Board on Universal Service*,
    Erratum, CC Docket No. 96-45, [FCC 97-157 (rel. June 4,
    1997)](http://www.westlaw.com/Find/Default.wl?rs=++++1.0&vr=2.0&DB=1016&FindType=Y&SerialNum=1997261843),
    *aff\'d in part, rev\'d in part, remanded in part sub nom*. Texas
    Office of Public Utility Counsel v. FCC, 183 F.3d 393 (5th Cir.
    1999), *cert. denied*, 120 S. Ct. 2212 (2000) ("*Universal Service
    First Report and Order*").

[^7]: *Universal Service First Report and Order*, 12 FCC Rcd at 9203,
    paras. 836-37; *see also* *Startec Global Communications Corporation
    Request for Forbearance or Exemption from the Universal Service
    Contribution Requirement*, Memorandum Opinion and Order, CC Docket
    No. 96-45, 14 FCC Rcd 8030 (1999).

[^8]: *Federal-State Joint Board on Universal Service*, Report and Order
    and Second Order on Reconsideration, CC Docket No. 96-45, 12 FCC Rcd
    18400 (1997); *Federal-State Joint Board on Universal Service*,
    *Petition of Federal Transtel, Inc. for Waiver of the Universal
    Serice Fund Contribution Requirements Under Section 54.703, 54.709,
    and 4.711 of the Commission's Rules,* Memorandum Opinion and Order
    and Order on Reconsideration, CC Docket No. 96-45, 16 FCC Rcd 17414,
    17417, para. 7 (2001). *See* 47 C.F.R. §§ 54.703, 54.709 (1998).
    *Cf.* 47 C.F.R. § 54.706 (b) (currently requiring carriers to
    contribute to the federal universal service support mechanisms on
    the basis of their projected revenues).

[^9]: Inteleca Petition, *supra* n. 2.

[^10]: RealWorld Petition, *supra* n. 2.

[^11]: Inteleca Petition at 1; RealWorld Petition at 1.

[^12]: 47 C.F.R. § 54.703 (1998).

[^13]: Microdevices Petition at 1.

[^14]: *Id*.

[^15]: Gateway Affiliates Petition at 1.

[^16]: MRP Petition, *supra* n. 5.

[^17]: *Id.* at 1.

[^18]: *Id.* at 3-4.

[^19]: *Id.* at 4.

[^20]: 47 C.F.R. § 1.3.

[^21]: *WAIT Radio v. FCC*, 418 F.2d 1153, 1157 (D.C. Cir. 1969), *cert.
    denied*, 409 U.S. 1027 (1972) ("*WAIT Radio*").

[^22]: *Northeast Cellular Telephone Co. v. FCC*, 897 F.2d 1164 (D.C.
    Cir. 1990).

[^23]: *Industrial Broadcasting Co. v. FCC*, 437 F.2d 680, 683 (D.C.
    Cir. 1970); *see also WAIT Radio*, 418 F.2d at 1157.

[^24]: *WAIT Radio*, 418 F.2d at 1157.

[^25]: *Universal Service First Report and Order*, 12 FCC Rcd at 9174,
    para. 779.

[^26]: 47 C.F.R. § 54.706(c) (1999).

[^27]: *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*, Further Notice of Proposed
    Rulemaking and Report and Order, CC Docket Nos. 96-45, 98-171,
    90-571, 92-237, 99-200, 95-116, 98-170, 17 FCC Rcd 3752, 3805, para.
    123 (2002).

[^28]: *Id*. at 3806, para. 125.

[^29]: *Id*. at 3806, para. 127.

[^30]: 47 C.F.R. § 1.3.

[^31]: *See* *Northeast Cellular Telephone* *Co. v. FCC*, 897 F.2d at
    1166; *WAIT Radio*, 418 F.2d at 1157-58.

[^32]: *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, 24969,
    para. 29 (2002).

[^33]: MRP Petition at 4.

[^34]: *Federal-State Joint Board on Universal Service, Changes to the
    Board of Directors of the National Exchange Carrier Association*,
    Order, CC Docket Nos. 96-45, 97-21, 12 FCC Rcd 15235 (Acc. Aud. Div.
    1997).

[^35]: *Id*.

[^36]: MRP Petition at 4.

[^37]: *Id*.