Legal Alerts and Articles
FCC Orders IP Conferencing Provider to Contribute to USF
On November 3, 2011, the Federal Communications Commission ("FCC") released an order denying MeetingOne.com Corp.'s ("MeetingOne's") petition for review of the Universal Service Administration Company's ("USAC's") conclusion that MeetingOne's IP audio bridging services are telecommunications services subject to direct Universal Service Fund ("USF") contributions. The FCC's ruling also denied MeetingOne's request to only apply USF contribution obligations to the company on a prospective basis. Consequently, MeetingOne was directed to contribute retroactively to the USF program starting with the company's fourth quarter 2008 revenues.
Background
On June 30, 2008, the FCC released an order ("InterCall Order") which found that InterCall, Inc.'s voice conferencing services were "telecommunications services" subject to USF contributions. The FCC rejected InterCall's assertion that conference calling providers were "end-users" rather than telecommunications providers subject to USF obligations. Furthermore, the FCC rejected the company's assertion that its audio bridging services were "information services" and not "telecommunication services."
In 2009, MeetingOne asked USAC to confirm that it was not required to make direct USF contributions or file FCC Forms 499. The company argued that the InterCall Order did not apply to MeetingOne because its IP audio bridging services were different than the audio bridging services provided by InterCall. USAC rejected this claim and required MeetingOne to contribute to USF beginning with the last quarter of 2008 (when the InterCall order took effect).
MeetingOne Order
The FCC found that MeetingOne's services were "functionally identical" to the audio bridging services at issues in the InterCall Order. Specifically, both services allow end users to call into a conference call by dialing a number and accessing the provider's platform. The use of IP technology by MeetingOne did not change the FCC's finding that the service was indeed a "telecommunications service" and subject to direct USF contributions. The FCC highlighted its previous "IP-in-the-middle Order," which concluded the use of IP technology in the middle of a service does not change its classification as a telecommunications service. Additionally, the FCC ruled that added functionality (such as the option to record a conference call and retrieve it at a later date) did not transform MeetingOne's audio bridging service into an "information service."
MeetingOne argued it "reasonably determined in good faith" that it was not subject to the InterCall Order and thus should not have to make retroactive contributions to the USF. The FCC, however, found that the InterCall Order put the industry "on notice" and confirmed USAC's determination that MeetingOne would be required to contribute to the USF starting with fourth quarter 2008 revenues.
If you have questions regarding these actions, or if you would like our assistance in reviewing your company's USF obligations, please do not hesitate to contact us.
November 2011