The Front Lines - August 9, 2006

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The FRONT LINES
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Advancing The Cause of Competition in the Telecommunications Industry

FCC REGULATORY FEES DUE NO LATER THAN SEPTEMBER 19, 2006

The Federal Communications Commission has published a notice in the Federal Register announcing the Fiscal Year 2006 Regulatory Payment window is opening to accept annual regulatory fee payments. Regulatory fee payments will be accepted from September 6, 2006 through September 19, 2006. Any payments received after 11:59 p.m. September 19, 2006 will be assessed a 25% late fee.

If your company is registered with the FCC as an interstate carrier (i.e., Form 499 registration) you should have already received an invoice for Regulatory Fees. The invoiced amount reflects application of a 0.00264 fee factor to the combined interstate and international retail revenue reported in your company's FCC Form 499-A.

If you have not received your Regulatory Fee invoice, but generated retail telecommunications revenue during 2005, do not ignore the legal duty to pay Regulatory Fees. The FCC reminds regulated entities of the consequences of delinquent and non-payment:

A LATE PAYMENT PENALTY OF 25 PERCENT OF THE AMOUNT OF THE REQUIRED REGULATORY FEE WILL BE ASSESSED ON THE FIRST DAY FOLLOWING THE DEADLINE DATE FOR FILING OF THESE FEES. REGULATORY FEE PAYMENT MUST BE RECEIVED AND STAMPED AT THE LOCKBOX BANK BY THE LAST DAY OF THE REGULATORY FEE FILING WINDOW, AND NOT MERELY POSTMARKED BY THE LAST DAY OF THE WINDOW.

Failure to pay regulatory fees and/or any late penalty will subject regulatees to sanctions, including the Commission's Red Light Rule (see 47 C.F.R. 1.1910) and the provisions set forth in the Debt Collection Improvement Act of 1996 (DCIA). The FCC also assesses administrative processing charges on delinquent debts to recover additional costs incurred in processing and handling the related debt pursuant to the DCIA and 71.1940(d) of the Commission's Rules. These administrative processing charges will be assessed on any delinquent regulatory fee, in addition to the 25 percent late charge penalty. Partial underpayments of regulatory fees are treated in the following manner. The licensee will be given credit for the amount paid, but if it is later determined that the fee paid is incorrect or not timely paid, the 25 percent late charge penalty will be assessed on the portion that is not paid in a timely manner.

NEW PREPAID CALLING CARD REGULATORY REGIME EFFECTIVE OCTOBER 31, 2006

On August 2, 2006, the FCC published notice in the Federal Register announcing that it will treat prepaid calling card service providers as telecommunications service providers and, as such, require them to pay interstate access charges and contribute to the federal Universal Service Fund. The new prepaid calling card regulatory regime will become effective on October 31, 2006.

Under the new rules, prepaid calling card providers will be required to provide their transport providers with 'PIU Certifications' on a quarterly basis. They must also file quarterly 'Compliance Certifications' with the FCC's Enforcement Bureau. Based on the effective date of the rules, the first certifications will be due no later than December 31, 2006. Thereafter, PIU Certifications are due by the 45th day after the close of the prior quarter and the Compliance Certification is due by the last day of the quarter in which the PIU Certification was provided. For example, in 2007, the first full year under the new rules, prepaid carriers will have the following filing schedule:

Q1: PIU Certification: Due Feb. 15, 2007; Compliance Certification Due March 30, 2007

Q2: PIU Certification: Due May 15, 2007; Compliance Certification Due June 30, 2007

Q3: PIU Certification: Due Aug. 15, 2007; Compliance Certification Due Aug. 30, 2007

Q4: PIU Certification: Due Nov. 15, 2007; Compliance Certification Due Nov. 30, 2007

Should you require assistance complying with these FCC Rules, please contact your regulatory attorney. If you are not represented by counsel, please feel free to contact The Helein Law Group at

703-714-1313 or by e-mail: snipped-for-privacy@thlglaw.com.

The Front Lines is a free publication of The Helein Law Group, P.C., providing clients and interested parties with valuable information, news, and updates regarding regulatory and legal developments primarily impacting companies engaged in the competitive telecommunications industry.

The Front Lines does not purport to offer legal advice nor does it establish a lawyer-client relationship with the reader. If you have questions about a particular article, general concerns, or wish to seek legal counsel regarding a specific regulatory or legal matter affecting your company, please contact our firm at 703-714-1313 or visit our website:

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The Helein Law Group, P.C.

8180 Greensboro Drive, Suite 775 McLean, Virginia 22102
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Jonathan Marashlian
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