Company: ZM
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001585521-25-000141
Chunk: 138

Company: Zoom Communications, Inc.
Filing Date: 2025-08-22
Form: 10-Q
Item: Part I, Item 4
Chunk 138
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.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 our products becoming more expensive. We expect that state public utility commissions will continue their attempts to apply state telecommunications regulations to services like Zoom Phone. If we do not comply with any current or future state regulations that apply to our business, we could be subject to substantial fines and penalties, and we may have to restructure our product offerings, exit certain markets, or raise the price of our products, any of which could harm our business.

Certain states have adopted or are adopting or considering legislation or executive actions that would regulate the conduct of broadband providers.