A PRIMER ON TELECOM LAW

Joe BowserMember

2

Introduction

Innovista Law PLLC

• From K Street to M Street – founded to provide a more nimble and

efficient platform from which to provide legal and strategic advice

to telecommunications entrepreneurs and other innovative companies

• 10+ years representing telecom and tech companies in dispute-resolution,

transactional, and regulatory-compliance issues

• Significant experience in intercarrier compensation (from ISP-bound dial-up

to IP/TDM to switched access and recip comp issues), interconnection,

transactional disputes, TCPA class action defense and compliance issues

3FCC Roundup – Major Industry ConsolidationMajor Consolidations Continue

Late 2011 – AT&T/T-Mobile deal rejected

February 2012 – Sirius/XM

August 2012 – VZW’s acquisition of significant AWS spectrum from Cable Cos

March 2013 – T-Mobile/MetroPCS deal approved

July 2013 – Softbank’s acquisition of Sprint approved

March 2014 – AT&T’s acquisition of Leap approved

Pending:

AT&T/DirecTV

Comcast/Time Warner

Verizon Wireless/Cinci Bell/Grain

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Quick History

FCC originally classifies Internet service as an “information service” regulated

– if at all – under its Title I jurisdiction

December 2010 – FCC adopts Open Internet Order imposing “common

carrier” rules on ISPs

January 2014 – D.C. Circuit vacates that order, but recommends the FCC to

consider its statutory authority under Section 706

May 2014 – FCC adopts a FNPRM “tentatively” keeping the 2010 approach,

including no-blocking and anti-discrimination rules, but proposed allowing

Fast Lanes (aka “paid prioritization”) under a “commercial reasonableness”

standard

September 2014 – FCC blogs about the “rainbow of policy and legal options”

available to protect the Open Internet. Admits problems with Fast Lanes

FCC Roundup – Open Internet

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The Debate

Jurisdictional fight matters because it determines the scope of the FCC’s

authority to impose Open Internet rules

AT&T and other network operators prefer Section 706 because it

essentially forces the FCC to create loopholes to Open Internet

standards

Public interest groups like Public Knowledge & Free Press and tech

companies favor the Title II approach because it gives the FCC the full

panoply of “common carrier” regulation, including strict non-

discrimination rules and the ability for the agency to prohibit “unjust

and unreasonable” practices

FCC Roundup – Open Internet (cont.)

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The 499

If you fit into any of these baskets, the FCC wants to hear

from you (via Form 499 to USAC):

Interconnected and non-interconnected VoIP

Mobile (cellular, PCS, paging & messaging)

Local or interexchange service

Conferencing (audio bridging)

Prepaid calling card

FCC Compliance Issues – what’s the 499?

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Interconnected VoIP providers owe into USF ~15-17% of interstate telecom revenue

Non-interconnected VoIP providers just owe into TRS, or ~1-2% of interstate telecom revenue

Think: Vonage vs. Skype

Interconnected VoIP enables real-time, two-way voice that can connect to the PSTN

Interconnected vs. Non-Interconnected VoIP

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USF is assessed against all interstate & int’l end user telecommunications service revenue

Rate is adjusted quarterly; currently 16.1%

If you’d owe <$10k (~$55k in interstate end user revenue), you are de minimis

Bottom line:

Separate telecom from non-telecom revenues The ‘safe harbor’ is 64.9% interstate traffic Pay USF to your wholesale carrier if de minimis; provide

exemption certificate to wholesaler if not

USF & the de minimis exemption

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2600hz is helping to lead the way in making this easier for resellers.

Its forthcoming integration with SureTax will allow for calculating and assessing USF and state/local taxes in an automated fashion

In development, expected roll-out 2015Q1

2600hz introducing SureTax

Thank You

Joseph P. BowserMember TEL: 202.750.3501FAX: 202.750.3503joseph.bowser@innovistalaw.com 1200 18th St., NW, Suite 700Washington, DC 20036

I N N O V I S T A L A W . C O M