Company: ZM
Filing Date: 2025-11-25
Form Type: 10-Q
Source: 0001585521-25-000202
Chunk: 382

Company: Zoom Communications, Inc.
Filing Date: 2025-11-25
Form: 10-Q
Item: Part I, Item 8
Chunk 382
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 for appeal to the U.S. Supreme Court has not expired. We cannot predict the impact of the new rules on our operations or business or whether they will be overturned in court.

The FCC has adopted rules that prohibit Chinese companies that are deemed to be a national security risk by other federal agencies from obtaining new authorizations and placed on a list known as the Covered List to sell telecommunications equipment in the U.S. and is considering proposed rules that would ban those companies from selling previously-authorized equipment or could prohibit the use of their equipment in the U.S. Zoom does not currently have any equipment from the companies subject to the ban in its network, but if other companies are added to the Covered List and the FCC adopts rules that ban sales or use of equipment from such companies, we could be required to find new sources for similar equipment or replace existing equipment entirely. On May 27, 2025, the FCC released a notice of proposed rulemaking that proposes requiring companies holding FCC licenses or authorizations to certify whether they are owned, controlled, or subject to the authority of foreign adversaries and, if so, to disclose their ownership. We cannot predict if or when the FCC will adopt the proposed rules or similar rules and any impact on our operations or business.

On March 12, 2025, the FCC opened a proceeding to begin the process of identifying FCC rules, regulations, and guidance documents for elimination or modification to alleviate unnecessary regulatory burdens and eliminating or modifying such rules.  This proceeding could result in substantial changes to the FCC’s rules, including the elimination or modification of rules that impose burdens on us and rules that benefit us, including those that prevent anticompetitive behavior by competitors.  We cannot predict which rules will be affected by this initiative, when the FCC will act, or the impact of any elimination or modification of existing FCC rules on our operations or business.

State Regulation

State telecommunications regulation of Zoom Phone is generally preempted by the FCC. However, states are allowed to assess state USF contributions, E-911 fees, and other surcharges. A number of states require us to contribute to state USF and pay E-911 and other assessments and surcharges, while others are actively considering extending their programs to include the products we offer.  The California Public Utilities Commission has adopted an order requiring VoIP providers like Zoom Phone to obtain authority to operate in that state. We generally pass USF, E-911 fees, and other surcharges through to our customers where we are permitted to do so, which may result in