Company: ZM
Filing Date: 2025-05-23
Form Type: 10-Q
Source: 0001585521-25-000090
Chunk: 213

Company: Zoom Communications, Inc.
Filing Date: 2025-05-23
Form: 10-Q
Item: Part II, Item 1A
Chunk 213
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 of common carrier regulation to internet-based communications services like the ones we offer. The imposition of common carrier regulation would increase our costs, and we could be required to modify our service offerings to comply with regulatory requirements. The failure to comply with such regulation could result in substantial fines and penalties and other sanctions.

On December 13, 2023, the FCC adopted revised rules on reporting of breaches of private customer information, known as CPNI.  The revised rules could broaden the types of CPNI breaches that must be reported, but also could limit the number of reports that must be filed by adopting a minimum threshold for the number of customers affected and not requiring reporting in certain circumstances when customers are not harmed.  The rules also require that breach reports be provided directly to the FCC, which could increase the risk of enforcement action, including fines and behavioral remedies.  These rules are not yet in effect and have been challenged in federal court. 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 

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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 March 12, 2025, the FCC opened a proceeding to begin the process of identifying FCC rules for the purpose of alleviating unnecessary regulatory burdens and eliminating or modifying such rules.  This proceeding could result in substantial changes to the FCC’s rules, including both rules that impose burdens on us and rules that benefit us by preventing 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