The Front Lines - May 5, 2005

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Advancing The Cause of Competition in the Telecommunications Industry


On May 3, 2005, AT&T filed an emergency petition for "immediate interim relief" with the Federal Communications Commission ("FCC"), asking it to "level the playing field" in prepaid services no later than May 17, 2005. In its petition, AT&T stated that the FCC's February 23, 2005, decision ordering AT&T to pay $160 million in Universal Service Fund ("USF") charges and subjecting the company to intrastate access fees for its "enhanced" calling card services and the FCC's concurrent issuance of a Notice of Proposed Rulemaking ("NPRM") on other enhanced prepaid services, skewed the regulatory environment and "created uncertainty and asymmetries."

In order to create regulatory neutrality now, AT&T said that the FCC should immediately adopt interim rules that all prepaid service providers pay USF (Universal Service Fund) and interstate access charges on all their services. This interim measure would apply to "any form of prepaid calling services that allow users to pay in advance for a specified amount of billing, whether by card, virtual card, or PIN-based, serial number-based, or some other account identification mechanism." AT&T wants this to apply regardless of the technology that is used to provide service.

According to AT&T's petition, the FCC has authority to remove the Enhanced Services Provider ("ESP") exemption for prepaid service providers and direct that USF be paid on all prepaid card services, regardless of whether they are ultimately determined to be information services or telecommunications services. To make sure that all prepaid service providers are subject to the same access charges, the FCC could just simply remove the intrastate exemption and treat all access charges as interstate, according to AT&T. AT&T says if the FCC does not want to preempt state regulations, it could instead rule that prepaid service providers will be subject to interstate or intrastate access charges.

AT&T said that, as an alternative, the FCC could require that all prepaid calling service providers pay intrastate access charges on all calls within a state, and interstate access charges and USF on other calls. If this alternative is adopted, AT&T said the interim rules should include "stringent reporting and certification mechanisms."

According to AT&T's petition, there is the risk that if the FCC does not institute AT&T's proposed measures immediately, in addition to creating an unfair competitive environment, the Commission is risking the collection of USF from prepaid service providers.

At this time, the FCC has not taken any action on AT&T's Petition.


Recent reports indicate that FCC Chairman Kevin Martin has proposed requiring Internet-based telephone service provider ("VoIP") to offer

911 emergency services to customers by as early as the end of September.

After a few incidents where customers failed to reach emergency officials when they dialed 911, federal regulators are increasing pressure on companies to ensure those calls get routed and answered properly with location information.

The proposal would require VoIP providers to route 911 calls directly to primary emergency lines within four months of the order being issued.

Martin has circulated the proposal to his fellow Commissioners which means it could be voted on as early as the FCC's May 19th open meeting.


On April 29, 2005, the FCC released an Order upholding and clarifying its rules governing the duty of local exchange carriers to grant competing carriers access to directory assistance information.

The FCC denied a petition filed by BellSouth and SBC seeking reconsideration of rules that bar them from imposing restrictions on the use by competitors of directory assistance information competitors obtain from the LECs under the Communications Act. Section 251(b)(3) of the Act requires that LECs provide nondiscriminatory access to directory assistance, and the FCC has determined that this permits competitors to have the same access to directory assistance information that the LECs provide to themselves.

The order clarifies however, that a LEC must not provide access to numbers that are unlisted at the customer's request. And while competing directory assistance providers may be entitled to nondiscriminatory access to directory assistance information, they still must adhere to the privacy requests made by LEC customers.

Finally, the FCC rejected SBC and BellSouth's argument that LECs should not be required to provide access to local listings that were obtained from third parties. Even though the FCC has declined to require LECs to provide nondiscriminatory access to nonlocal directory assistance data, it has consistently required nondiscriminatory access to all of their local directory assistance database listings. _____

The Front Lines is a free publication of The Helein Law Group, LLP, 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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Jonathan Marashlian
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