The Front Lines - June 22, 2006

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Sponsored by The Helein Law Group, P.C.

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Advancing The Cause of Competition in the Telecommunications Industry


As expected, at yesterday's Open Meeting the Federal Communications Commission ("Commission") adopted two modifications to its approach for assessing contributions to the Universal Service Fund ("USF"). The following changes were announced via News Release:

First, the Commission raised the existing wireless "safe harbor" percentage used to estimate interstate revenue from 28.5 percent to

37.1 percent of total end-user telecommunications revenue to better reflect growing demand for wireless services. Wireless carriers continue to retain the option to base contributions on their actual revenues or on traffic studies that estimate their actual interstate revenues.

Second, the Commission expanded the base of USF contributions by extending universal service contribution obligations to providers of "interconnected voice over Internet Protocol," or VoIP, service. For interconnected VoIP providers, the Commission establishes a safe harbor percentage of interstate revenue at 64.9 percent of total VoIP service revenue. Interconnected VoIP providers also may calculate their interstate revenues based on their actual revenues or by using traffic studies.

The full text of the Commission's Report and Order is not currently available. The increased wireless safe harbor and addition of VoIP to the USF contribution base will become effective 30 days after publication of the full text of the Report and Order in the Federal Register.

The Commission also adopted a Notice of Proposed Rulemaking seeking comment on interim contribution obligations imposed in its Order.

According to its News Release, the Commission's measured interim steps will stabilize the contribution base for the Fund in the near-term and minimize the impact of any changes on consumers, Fund contributors, and Fund administration, while the Commission considers more fundamental reform of the contribution methodology.

For more information on how the Commission's Order will affect your business, please contact your regulatory counsel. If you do not have counsel, please contact Jonathan S. Marashlian at


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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8180 Greensboro Drive, Suite 700 McLean, Virginia 22102
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Jonathan Marashlian
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