Communications Taxation '22
Pre-Conference Half-Day Workshop
May 4, 2022
"Understanding USF" Workshop
This workshop explores the Universal Service Fund (USF) issues that have long plagued telecommunications and emerging operators. Six leading attorneys in the field will discuss basic principles and current issues impacting the determination of carrier contributions to the USF, including: the basic principles involved in determining the appropriate revenue base upon which to base the USF contribution; issues involved in classifying services and related revenues as telecommunications versus information services; methodologies used to determine telecommunications revenues by jurisdiction; the Form 499 and related instructions, highlighting key compliance areas; the USF audit process and common issues; USF-related issues to consider in connection with merger & acquisitions; and USF policy updates.
This session is suited for both experienced telecommunications tax personnel involved with USF regulatory compliance activities, as well as new entrants offering (or looking to offer) telecommunications services as part of their overall service package.
Presenters:
- Danielle Frappier -Davis Wright Tremaine LLP
- Steve Augustino - Nelson Mullins Riley and Scarborough LLP
- Brita Strandberg - Strandberg Strategy
USF Basics: Principles and Form 499
1:00PM - 2:00PM
Presented by: Danielle Frappier -Davis Wright Tremaine LLP
USF Basics:
- USF assessable revenue options: domestic and international; end user; telecommunications service; and iVoIP/other “telecommunications” revenues.
- Distinguishing end user revenues v. wholesale revenues
- Determining the jurisdiction of revenues – Interstate, Intrastate, International
- Clarifications
- Basic rule—end points of customer’s communications not extent of service provider’s facilities
- Physically intrastate private lines/special access services
- Internet access service
- Treatment of USF-support (High Cost, Lifeline, E-Rate, Rural Healthcare)
- Classification of services
- Telecommunications Services, Telecommunications, iVoIP, Information Services
- Challenges
- 2012 FNPRM issues identified, not resolved
- Conference Call Decisions
- MPLS/”Enterprise Services”
- Text messaging
- Recurring issues
- Wholesale v. Retail Services (Wholesale certifications)
- Classifying private line service provided over intrastate private lines
- Unique issues with international services and foreign carriers
- Bundled Services vs. Integrated Services (Cisco WebEx)
Form 499 Form and Instructions
- Quarterly Reports and Annual Reports
- Reporting entity
- Filing of Form 499 amendments and waivers
- Calculating “USF-assessable” revenues
- Actual data, traffic studies, safe harbors
- Bundled Services
- Reporting methodologies
- USAC reporting to other funds (e.g., TRS)
"Gotchas and Pitfalls," Q&A, discussion and open Issues
USF Master Class: Navigating Difficult Issues
2:15PM - 3:15PM
Presented by: STEVE AUGUSTINO - NELSON MULLINS RILEY AND SCARBOROUGH LLP
Excellence in Execution.
- Bundled services vs Single Integrated Services
- Options for Allocating Revenue from Bundles
- Jurisdiction Allocations: When to Use Safe Harbors
- Revenue Estimates and True-Ups: How Not to Get Burned
Special Cases in USF Reporting.
- Reporting for the First Time
- Revisions to Revenue Reporting
- Mergers/Acquisitions/Deactivation
USF Today, USF Tomorrow, and USF Always
3:30PM - 4:30PM
Presented by: Brita Strandberg & Stephanie Weiner
I. USF Today
- What is subject to USF today?
- What is not subject to USF?
- Self-provisioned services
- Dark Fiber,
- Internet Access
- The WebEx Order
- CPE
- Calls for reform: USF is broken and not sustainable
- Shrinking revenue base
- Rising contribution factor
- Disconnect between who pays and who receives USF
- Shrinking revenue base
- Bipartisan infrastructure law funding programs
- FCC NOI on the Future of USF
- Budget cap and/or shrinking the fund
- Appropriations model
- Expand to BIAS
- Expand to online services beyond BIAS (including non-interconnected VoIP, streaming services, cloud services, digital advertising.
II. USF Always
- Diligence and Regulatory Structuring
- Mergers, Acquisitions and USF Diligence
- Changes may be coming that expand regulatory oversight over VoIP transactions
- Mergers, Acquisitions and USF Diligence
Dress is business casual.