Telecom Regulatory Reporting

Telecom Regulatory Reporting

The material appearing in this presentation is for informational purposes only and is not legal or accounting advice. Communication of this information is not intended to create, and receipt does not constitute, a legal relationship, including, but not limited to, an accountant-client relationship. Although these materials may have been prepared by professionals, they should not be used as a substitute for professional services. If legal,

Moss Adams

• Firm established in 1913

– Serving telecom clients since 1957

• The 11th largest accounting and consulting firm

in the U.S.

– 1,800 staff and partners

• Organized by industry & service specialists

• Telecom personnel in Seattle, Spokane,

Stockton, Kansas City and Portland offices

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Course Outline

• FCC’s Order on USF/ICC Reform • New Reporting Requirements • CPNI & Red Flags

• NECA Reporting (EC 1050) • Line Counts

• 499 Reporting • FCC Form 497 • Truth-In-Billing • USAC Audits

Housekeeping

• Class schedule

• CPE forms

• Evaluation forms

• Regular breaks

• Facilities

• Lunch

• Introductions

Summary of USF & ICC

Reform Order & FNPRM

CAF & ICC Reform Order & FNPRM

• Connect America Fund (CAF) and

Intercarrier Compensation (ICC)

Reform Order and FNPRM

– Approved October 27, 2011 – Released November 18, 2011

– Order primarily addresses interim ICC and USF reform

• Proposed effective dates beginning in 2012

– FNPRM primarily addresses long term ICC and USF reform

CAF & ICC Reform Order & FNPRM

• Follow on Orders to clarify, review or

reconsider certain issues

– Regression Order – April 2012

• Adopted calculation of cost limitations for HCLS – Access Rate Clarification Order – May 2012

• Clarified the process for transitioning intrastate access rates

• Intrastate rate elements may be increased to accomplish revenue goal

• Intrastate rate elements must be raised to Interstate levels by July 1, 2013

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CAF & ICC Reform Order & FNPRM

• Follow on Orders (cont.)

– 3rd_{Order on Reconsideration – May 2012} • Reporting Requirements & Deadlines

• Document Retention • Reporting End User Rates • USF for Carriers in Alaska • Revenue Baseline

CAF & ICC Reform Order & FNPRM

• Follow on Orders (cont.)

– 5th_{Order on Reconsideration – November 2012} • Financial Reporting Requirements

• Waiver Standards

– 6th_{Order on Reconsideration – February 2013} • Modifies calculation of limitations on costs for HCLS • Dismisses several Applications for Review on other

issues

• Establishes a progress reporting deadline of 11/18/13 for the WCB

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CAF & ICC Reform Order & FNPRM

• Budget

– Up to $4.5B each year • $1.8B for Price Cap carriers • $500M Mobility Fund • $100M Remote Areas Fund • $2.0B for Rate of Return carriers

– Funding in a given year could be more or less • Contribution will not exceed $4.5B + expenses

USF Reform

• Public Interest Obligations

– 4 Mbps downstream/1 Mbps upstream

• No 5 year requirement at 6/1.5 Mbps

– 100 millisecond latency, suitable for real time applications

– Deploy broadband upon receipt of a reasonable request for service, within a reasonable amount of time

• Annual reporting to the PUC and USAC

• Construction charges may be assessed pursuant to state requirements

– Additional requirements to be identified in FNPRM • No further action at this point in time

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USF Reform

• Limitations on CapEx and OpEx

– Implemented no later than 7/1/2012 – Additional comment as part of FNPRM

• Regression analysis using publicly available cost, geographic and demographic data

• Comparison of costs to similarly situated companies – Annual publication of capped costs that will be

used in place of actual costs that exceed the cap – Focused initially on HCLS, but FNPRM directs

USF Reform

• Limitations on CapEx and OpEx

– Regression Order

• Implemented 2 separate regression based limitations

– CapEx – Investments, reserve and depreciation – OpEx – All other expenses

• Phase in of limitations

– 25% in 2012 – limited to 10% of total support – 50% in 2013

– 100% in 2014 and beyond

• Redistribution of support from limited carriers

– Calculation of 2 NACPLs (Capped & Uncapped)

• Annual updates performed by WCB

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USF Reform

• Limitations on CapEx and OpEx

– 6th_{Order on Reconsideration}

• Combined CapEx and OpEx limitations

– 2013 – simple addition of actual costs and limitations

» Reduced # of impacted carriers from 159 to 70

– 2014 – revised regression calculation

• 2013 impacts limited to 15% of total support • Did not change any independent variables

• Provides WCB flexibility to change the regression annually or leave it constant for a period of time

USF Reform

• Corporate Operations Expense Cap on ICLS

– Effective 1/1/2012

– Minor updates to the formula

• Loops ≤ 6,000 Loops – monthly per loop expense = greater of

– $42.337 – (.00328 * working loops) – $63,000/working loops

• 6,000 ≥ Loops ≤ 17,887 – monthly per loop expense = – $3.007 + (117,990/working loops)

• Loops ≥ 17,887 – monthly per loop expense = – $9.56

– Adjusted by GDP-CPI, beginning 1/1/2013

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USF Reform

• Artificially Low Voice Rates

– 3 step phase in beginning 7/1/2012 • 7/1/2012 – 6/30/2013 = $10.00

• 7/1/2013 – 6/30/2014 = $14.00

• Thereafter, determined by WCB annual survey

– Latest national average = $15.62

• Includes state SLC, state USF fees and mandatory EAS – Dollar for dollar reduction in HCLS

– Requires annual submission of rates and fees to USAC

USF Reform

• Safety Net Additive grandfathered or phased

out

– Eligibility as a result of 14% increase in TPIS • Support grandfathered for the remainder of eligibility

period

• No new support for costs incurred after 2009 – Eligibility as a result of loss of access lines

• Support phased out over 2 years – 50% of calculated support in 2012 – Support eliminated in 2013

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USF Reform

• Eliminate LSS as a separate support

mechanism effective 7/1/2012

– Limited ongoing recovery through ICC recovery mechanism

– Support frozen at 2011 support levels for 1/1/2012 – 6/30/2012

USF Reform

• Adjusted HCLS Cap for 2012

– Elimination of HCLS for Price Cap carriers requires that the overall size of the fund be reduced

• Includes Rate of Return study areas affiliated with Price Cap carriers

• NECA required to submit revised cap within 30 days

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USF Reform

• Study Area Waivers

– Eliminate 1% change in USF guideline – New standards for approval

• State PUC approval • Public interest – Streamlined Process

• Public Notice with 30 day comment and 45 day reply comments

USF Reform

• Revisions to Parent Trap Rule

– If actual costs would generate lesser support, LEC will receive the lesser

– Does not apply to price cap carriers and their rate of return affiliates (frozen support)

– Effective 1/1/2012

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USF Reform

• Cap per line support at $250 a month

– Effective 7/1/2012

– Applies to both ETCs and CETCs

– Applies to all High Cost Support, excluding CAF ICC

– 3 year phase in of cap

• 7/1/2012 – 6/30/2013 = $250/line + 2/3 of difference • 7/1/2013 – 6/30/2014 = $250/line + 1/3 of difference • 7/1/2014 = No more than $250/line

– Carriers may file a petition for waiver or adjustment • 9 of 26 limited carriers have filed for a waiver

USF Reform

• Unsubsidized Competition

– Eliminates support where unsubsidized

competitor(s) offer voice and broadband to 100% of the study area

– Incumbent support phased out over 3 years • Support frozen at the lesser of 2010 support or

$3,000/line

• Support reduced by 33% each year

– FNPRM seeks comment on process for

determining support in study areas with less than 100% overlap

– Ongoing comment process

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USF Reform

• Waivers

– Waiver process to seek relief from some or all USF reforms

• FCC does not expect to grant waivers routinely • Subject to a total company earnings review

– Carrier must demonstrate that reduction in existing support would put voice & broadband service at risk – Consideration given if reform would cause a

Interstate Rate of Return

• Prescription

– Represcription to be addressed in the FNPRM • Order waives certain procedural requirements to

streamline the process

– Primarily related to the filing of paper copies and service

• Notice and comment process to be used • No further action at this point in time

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ICC Reform

• Rate of Return Carriers

– Transition terminating switched access to bill and keep

• Cap all interstate switched access rates

– Effective 12/29/11

– Originating and terminating

» End Office Access Service

» Tandem Switched Transport Access Service » Dedicated Transport Access

» Other interstate switched access rate elements

• Carrier Common Line, as applicable • Information Surcharge

ICC Reform

• Rate of Return Carriers

– Transition terminating switched access to bill and keep

• Cap intrastate switched access rates

– Effective 12/29/11 – Terminating only

» End Office Access Service

» Tandem Switched Transport Access Service

– Includes reciprocal compensation

– No adjustment required/allowed if intrastate is already lower than interstate

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ICC Reform

• Rate of Return Carriers

– Transition terminating switched access and reciprocal compensation to bill and keep

• Step 1 (July 1, 2012) – 50% transition to interstate

– May maintain intrastate switched access rate structure; or – Apply interstate rate structure for intrastate rates

» Immediately migrate to interstate rates

» Apply a transitional rate equal to 50% of the difference • Step 2 (July 1, 2013) – 100% transition to interstate

ICC Reform

• Rate of Return Carriers

– Transition terminating switched access and reciprocal compensation to bill and keep

• Step 3 (July 1, 2014) – 1/3 of difference between interstate and $0.005

• Step 4 (July 1, 2015) – 2/3 of difference between interstate and $0.005

• Step 5 (July 1, 2016) –$0.005

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ICC Reform

• Rate of Return Carriers

– Transition terminating switched access and reciprocal compensation to bill and keep

• Step 6 (July 1, 2017) – 1/3 of difference to $0.0007 • Step 7 (July 1, 2018) – 2/3 of difference to $0.0007 • Step 8 (July 1, 2019) – terminating switched end office

access rates @ $0.0007

• Step 9 (July 1, 2020) – bill and keep

– Tariff filings to remove charges for Terminating End Office Access Charges

ICC Reform

• Rate of Return Carriers

– Other Issues

• Reforms do not automatically replace existing contracts or interconnection agreements

– Left to “change of law”, renegotiation and termination clauses in agreements

• Originating Access left to FNPRM, beyond cap

• Transport (originating and terminating) left to FNPRM, beyond cap

• Other rate elements left to FNPRM, beyond cap

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ICC Reform

• Rate of Return Carriers

– Eligible Recovery • Rate of Return Baseline

2011 Interstate Switched Access Revenue Requirement* + 2011 Intrastate Switched Access Revenues

+ 2011 Net Reciprocal Compensation Revenues - 5% annual reduction

oRecovered from 3 sources

 Intercarrier Compensation Revenues  Access Recovery Charge (ARC)  Connect America Fund (CAF)

ICC Reform

• Rate of Return Carriers

– Access Recovery Charge (ARC)

• Residential & SLB = $0.50/year for up to 6 years for a max of $3.00

• MLB = $1.00/year for up to 6 years for a max of $6.00

– SLC + ARC may not exceed $12.20

• Local Rate + SLC + EAS + Surcharges + ARC ≤ $30.00

– Residential, no benchmark for SLB & MLB

• ARC is not mandatory, but will be imputed for CAF

– Carriers that forego recovery in 1 year may not recover in future years

• ARC may not be assessed on Lifeline customers • ARC may be determined at the holding company level

FCC Reform Order

Reporting Requirements

New 5-Year Service Quality

Improvement Plan

– Due July 1, 2013

– Proposed Improvements or Upgrades

• Improvement of service quality, coverage, capacity • Projected start & completion date

• Amount of investment • Geographic areas • Population served

New 5-Year Service Quality

Improvement Plan

– Include new broadband obligations

• Take reasonable steps to offer broadband • Provide broadband upon reasonable request

– Criteria to determine “reasonable request”

» Line Extension Tariff » Aid to Construction

• Requests for broadband service are met within a reasonable time

• Carrier must define what is reasonable

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Progress Report on Service Quality

Improvement Plan

– Due July 1, 2014 and annually thereafter

• Maps detailing progress • USF received

• Details of how support improved service quality, coverage, capacity

• Explanation of unfulfilled improvement targets • Wire center or census block level

Progress Report on Service Quality

Improvement Plan

– Additional filing requirements §54.313(f)(1)(i), (ii) – Due July 1, 2014 and annually thereafter

– A letter certifying that:

• Reasonable steps are being taken to provide broadband service at actual speeds of at least 4 Mbps downstream/1 Mbps upstream • Latency is suitable for real-time applications, including VoIP • Usage capacity that is reasonably comparable to those in urban

areas

• Requests for such service are met within a reasonable time

– The number, names, and addresses of community anchor institutions to which the ETC newly began providing access to broadband service in the preceding calendar year

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Outage Reporting

– Due July 1, 2013

– Detailed outage information for outages of at least 30 minutes; and

– At least 10% of the end users in the designated service area was affected; or

– A 911 special facility was affected

– Order requires outages to be separately reported for voice and broadband, however, FCC is not seeking PRA approval for broadband outage reporting at this

Outage Reporting

– Report must include:

• Date and time the outage began • Date and time the outage ended

• Brief description of the outage and resolution of the outage

• Particular services affected • Geographic areas affected

• Steps taken to prevent a similar situation in the future • Number of customers affected

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Unfulfilled Service Requests

– Due July 1, 2013 and annually thereafter

– Voice Service

• Number of requests for voice service from potential customers that were unfulfilled

• Details of how the ETC attempted to provide service

– Broadband Service

• Number of requests for broadband service from potential customers that were unfulfilled

Complaints Received

– Due July 1, 2013 and annually thereafter

– Voice Service

• Number of voice service complaints received per 1,000 connections

• Fixed Voice Telephony Service • Mobile Voice Telephone Service

– Broadband Service

• Number of broadband service complaints received per 1,000 connections

• Fixed Broadband Service • Mobile Broadband Service

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Certification of Compliance with Service Quality

Standards and Consumer Protection Rules

§54.313(a)(5)

– Due July 1, 2013 and annually thereafter

– Separate certifications must be filed for both voice and broadband service

Certification of Ability to Function in

Emergency Situations

– Due July 1, 2013 and annually thereafter – Must certify ETC:

• Has reasonable amount of back-up power to function without an external power source

• Is able to reroute traffic around damaged facilities

• Is capable of managing traffic spikes caused by emergency situations

– Separate certifications must be filed for both voice and broadband service

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Price Offerings

– Due July 1, 2013 and annually thereafter

– Pending OMB approval

– ETC’s price offerings

• Voice

• Broadband - to include capacity range

– Format to be specified by the Wireline

Competition Bureau

Additional Voice Rate Data

– Due July 1, 2013 and annually thereafter

– Report rates for residential local service that are below local urban rate floor

• Residential local service rate • State subscriber line charges • State universal service fees

• Mandatory extended area service charges

– Report number of lines below local urban rate floor – Report lines and rates in effect as of June 1

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Additional Voice Rate Data

– Due January 2 of each year – Pending OMB approval – Mid-year update

• Optional - to report increases to residential local rates or applicable state fees

• Mandatory - if residential local rates or applicable fees decrease after June 1 sampling date causing residential rate to fall below local urban rate floor

Local Urban Rate Floor

– July 1, 2012 – June 30, 2013 Local Urban Rate Floor = $10

– July 1, 2013 – June 30, 2014 Local Urban Rate Floor = $14

– July 1, 2014 and thereafter Local Urban Rate Floor to be announced annually by Wireline Competition Bureau

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Ownership Information

– Due July 1, 2013 and annually thereafter – Pending OMB approval

– Report to include: • Holding company • Operating company • Affiliates

• Branding (“dba” or brand designation)

– Report relevant universal service identifiers for each such entity by Study Area Codes

Tribal Reporting

– Due July 1, 2013 and annually thereafter – Pending OMB approval

– ETCs Serving Tribal Lands

– Information demonstrating that discussions with Tribal governments included (at a minimum):

• Needs assessment and deployment planning with a focus on Tribal community anchor institutions

• Feasibility and sustainability planning

• Marketing services in a culturally sensitive manner

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Tribal Reporting

– Information demonstrating compliance with: • Right-of-way processes

• Land use permitting requirements • Facility siting rules

• Environmental review processes • Cultural preservation review processes • Tribal business and licensing requirements

– Certificate of Public Convenience and Necessity – Tribal business license

Additional Certifications

– Due July 1, 2013 and annually thereafter – Pending OMB approval

– A letter certifying that the company’s rate for voice services is no more than two standard deviations above the

applicable national average urban rate for voice service

– The national average urban rate to be specified by the Wireline Competition Bureau and Wireless

Telecommunications Bureau and released in a public notice

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Network Performance Tests

– Pending OMB approval

– The results of network performance tests pursuant to the methodology and in the format determined by the Wireline Competition Bureau, Wireless

Telecommunications Bureau, and Office of Engineering and Technology

– FCC DA 13-332 clarifies ETCs are not required to file network performance results with the 2013 annual report

Financial Reporting

– Annual Report of the Company’s Financial Condition and Operations

– Privately Held Rate of Return Carriers ONLY – Pending OMB approval

– WCB to publish filing deadline

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Financial Reporting

– Fifth Order on Reconsideration (FCC 12-1237), released 11/26/12

– Carriers receiving RUS loans

• Submit 2011 RUS Operating Report

– Non-RUS borrowers that are audited

• Option 1 – file audited 2011 financial statement

• Option 2 – provide 2011 financial information in a form consistent with the RUS Operating Report

– Carriers that are not audited

• Option 1 – file 2011 financial statement reviewed by a CPA

• Option 2 – provide 2011 financial information in a form consistent with the RUS Operating Report

Filing Deadlines

– Annual reporting information must be filed no later than July 1 of each year in order to receive support for the following calendar year

– Reports filed after the July 1 deadline

• Filed no later than October 1 = support for the 2nd_{, 3}rd_{, and 4}th quarters of the subsequent year

• Filed no later than January 1 = support for the 3rd_{and 4}th quarters of the subsequent year

• Filed no later than April 1 = support for the 4th_{quarter of the} subsequent year

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Certification of High-Cost Support

– Due October 1 – receive support in

succeeding year

– Certification in letter format

– Clearly referencing WC Docket No. 10-90

– Filed with Office of the Secretary of the FCC

Certification of High-Cost Support

– Carriers Subject to State Jurisdiction

• State regulatory authority must file an annual certification identifying which carriers in the state are eligible to receive federal support

• Certify that all federal high-cost support provided to carriers within the state was used in the preceding calendar year and will be used in the coming calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support is intended

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Certification of High-Cost Support

– Carriers Not Subject to State Jurisdiction

• Carriers must file an a sworn affidavit executed by a corporate officer

• Certify that all federal high-cost support received was used in the preceding calendar year and will be used in the coming calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support is intended

Certification of High-Cost Support

• Filing Deadlines

– Certifications Filed After October 1 Deadline

• Certifications filed on or before January 1 - receive support in the 2nd_{, 3}rd_{, & 4}th_{quarters of that year}

• Certifications filed on or before April 1 – receive support in the 3rd_{& 4}th_{quarters of that year}

• Certifications filed on or before July 1 – receive support in the 4th_{quarter of that year}

• Certifications filed after July 1 – no support received in that year

FCC Study Area Boundary

FCC Study Area Boundary

• FCC Report and Order, DA 12-1777 – adopted & released November 6, 2012

• Adopted data specifications for collecting study area boundaries

• FCC to issue Public Notice announcing deadline for submission

• Data will be used in:

– Quantile regression analyses to generate capex and opex limitations

FCC Study Area Boundary

• Data submitted via web interface

• Data can be submitted by ILECS or state commissions • ILECs must review and verify accuracy of data

• Company officer must certify

• Changes to study area boundaries must be submitted by March 15 of each year

• All ILECs must recertify study area boundary data every two years

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Shapefile Data Specifications

• Must be submitted in esri shapefile format

• Each shapefile must represent a single study area • Shapefile templates are available at

http://transition.fcc.gov/wcb/iatd/neca.html

• Shapefile must:

– Contain one closed, non-overlapping polygon for each exchange in the study area that represents the area served from that exchange

Shapefile Data Specifications

• Shapefile must:

– Have associated with each exchange polygon the following identifying feature attributes:

• Operating Company Number • Company name

• Exchange name

• Acquired exchange if applicable • CLLI code(s) associated with exchange • Study Area Code

• State • FRN

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Shapefile Data Specifications

• Shapefile must:

– Have an assigned projection with accompanying .prj file – Use unprojected (geographic) WGS84 geographic coordinate

system

– Have a minimum horizontal accuracy of +/- 40 feet or less, conforming to 1:24K national mapping standards

– Be submitted as a WinZip archive with a name containing the company name and study area code (e.g.,

Cover Page Information

• Information to be submitted with shapefile(s): – Contact person name

– Contact person address – Contact person phone number – Contact person email address – Date created/revised

– Methodology – process steps to create the data – Certifying official name

– Certifying official address – Certifying official phone number – Certifying official email address

FCC Form 499

FCC Form 499

• All telecommunications carriers providing

telecommunications services, including

interconnected VoIP providers, within the United

States must file a 499

– Very few exceptions/exemptions from filing – 499A & 499Q available on USAC’s website:

Form 499A Uses

• Calculate contributions to USF

– Based on interstate and international end user revenues

• 10% or more interstate traffic is interstate

• Telecommunications Relay Services (TRS)

• North American Numbering Plan (NANPA)

Administration

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Form 499A Uses

• Long-Term Number Portability (LNPA)

• Interstate Telecommunications Service Providers

(ITSP) Regulatory Fee

– FCC Form 159-W assessment

• Satisfy obligation under Section 413 of the Act to

designate a DC agent and FCC registration

Form 499Q Uses

• Forecast quarterly USF contributions

– Based on projected gross-billed end-user interstate and international revenues. Watch projected revenues so they end up matching Form 499-A end user

interstate and international revenues.

• Non de minimis filers only

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Form 499 Filing

• 499 is filed with USAC 5 times a year

– Form 499Qs due by:

• February 1st (4Q actual/2Q projections) • May 1st (1Q actual/3Q projections) • August 1st (2Q actual/4Q projections) • November 1st (3Q actual/1Q projections) – Form 499A is due by April 1

Form 499 Revisions

• 499s must be revised if revenue data changes

– Form 499A revisions:

• Decreased contributions - filed by March 31st of the year following the original filing

• Additional contributions - accepted anytime.

– Form 499Qs – 45 calendar days from original filing date

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De Minimis Carriers

• Worksheet in 499 instructions estimates

contribution less than $10,000. Watch

instructions for changed contribution factor for

de minimis test.

• Do not file 499Q

• Contribute to:

De Minimis Carriers

• Carriers near $10K contribution should file a

499Q

• All carriers must file a 499A

– If 499A results in de minimis status, USAC will refund contribution

• Carriers that do not file a 499Q and go over

$10K must pay contribution plus unadjusted

contribution

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A and Q Differences

• Form 499A reports actual annual revenues

• Form 499-Q reports actual quarterly and

projected quarterly interstate and international

end user revenue

Reporting Gross Revenue

• Report gross revenue from all sources.

– Gross revenues consist of total revenues billed to customers with no allowance for uncollectable, settlements, or out-of-period adjustments.

– Gross billed revenues maybe distinct from booked revenues.

– Deposits are not revenue.

– NECA pool companies report actual gross billed revenues not settlements.

– Surcharge treated as revenues included in revenue categories to which the surcharge applies

– Revenues on the customers bills to recover federal or state universal service support goes on line 403.

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499A Inputs

• Block 1 (lines 101 – 112) – Contributor

Information

– Line 101, Filer 499 ID

– Line 102, Legal name of filer

– Line 103, IRS employer identification number – Line 104, Name file is doing business as

FCC Form 499

• Line 105, Telecommunications activities

– Select up to 5 boxes that apply (number in order of importance)

• Competitive Access Provider (CAP)/CLEC

• Cellular/PCS/SMR (wireless telephony included by resale) • Interexchange Carrier (IXC)

• Coaxial Cable • Incumbent LEC

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FCC Form 499

• Line 105, Telecommunications activities

• Interconnected VoIP • Non-Interconnected VoIP • Local Reseller

• Operator Service Provider (OSP) • Paging & Messaging

• Payphone Service Provider • Prepaid Card

FCC Form 499

• Line 105, Telecommunications activities

• Satellite Service Provider

• Shared-Tenant Service Provider/Building LEC • Specialized Mobile (SMR) (dispatch)

• Audio Bridging Provider/ Teleconferencing Service Provider • Toll Reseller

• Wireless Data

• Other Local (requires description) • Other Mobile (requires description) • Other Toll (requires description)

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FCC Form 499

– Interconnected VoIP

• 47 CFR Section 9.3 defines it as a service that:

– Enables real-time, two way voice communications – Requires a broadband connection from user’s location – Requires Internet protocol-compatible CPE

– Permits users to receive calls that originate on the Public Switched Telephone Network (PSTN) and to terminate calls to the PSTN

– Vonage is; Skype isn’t. When in doubt call USAC. – Interconnected VoIP

– Non-Interconnected VoIP

– Difference from above is real-time that originates from or terminates not two way

FCC Form 499

• Line 106.1, Holding company name

– Just added any entity that directly or indirectly owns or controls affiliated filers. Own means 10% equity interest

• Line 106.2, Holding company IRS employer

identification number

• Line 107, FCC Registration Number (FRN)

• Line 108, Management company

• Line 109, Complete mailing address of reporting

entity corporate headquarters

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FCC Form 499

• Line 110, Complete business address for

customer inquiries and complaints

• Line 111, Telephone number for customer

complaints and inquiries

– Toll-free number if available

• Line 112, Trade names used in the past 3 years

in providing telecommunications known by

customers

FCC Form 499

• Block 2-A (lines 201 – 208) – Regulatory Contact

– Line 201, Filer 499 ID (repeat of Line 101)

– Line 202, Legal name of filer (repeat of Line 102) – Line 203, Person who completed worksheet – Line 204, Telephone number of this person – Line 205, Fax number of this person

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FCC Form 499

– Line 206, E-mail of this person

• Required if available – not for public release

– Line 207, Corporate office, attention name and mailing address for Telecommunications Reporting Worksheets

• Check if same name as Line 203 • Check if same address as Line 109

FCC Form 499

– Line 208, Billing address and billing contact person (bills for contribution will be sent to this address unless you attach a written request for alternative billing arrangements)

• Check if same name as Line 207

- Line 208.1, Email address where ITSP Regulatory Fee issues can be addressed

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FCC Form 499

• Block 2-B (lines 209 – 218) – Agent for Service

of Process

– Line 209, D.C. Agent for Service of Process – Line 210, Telephone number of D.C. agent – Line 211, Fax number of D.C. agent

– Line 212, E-mail of D.C. agent

FCC Form 499

– Line 214, Local/alternate Agent for Service of Process (optional)

– Line 215, Telephone number of local/alternate agent – Line 216, Fax number of local/alternate agent

– Line 217, E-mail of local/alternate agent – Line 218, Complete business address of

local/alternate agent

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FCC Form 499

• Block 2-C (lines 219 – 228) – FCC Registration

& Contact

– Line 219, Filer 499 ID (repeat of Line 101)

– Line 220, Legal name of filer (repeat of Line 102) – Line 221, Chief Executive Officer (or highest ranking

FCC Form 499

– Line 222, Business address of individual named on Line 221

• Check if same as Line 109

– Line 223, Second ranking company officer, such as Chairman

– Line 224, Business address of individual on Line 223

• Check if same as Line 109

– Line 225, Third ranking company officer, such as President or Secretary (don’t list same names as those on Lines 221 or 223)

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FCC Form 499

– Line 226, Business address of individual on Line 225 • Check if same as Line 109

– Line 227, Jurisdictions you provide service in the past 15 months and jurisdictions service is likely to be provided in next 12 months

– Line 228, Year and month filer first provided or expects to provide telecommunications in the U.S.

FCC Form 499

• Block 3 (lines 301 – 315) – Carrier’s Carrier

Revenue

– What is a Carrier’s carrier?

• Revenues from services provided for resale to other carriers that are contributors to FUSF

• Revenues from carriers billed for using your facilities

– Bill their own customers

– Report its revenues on their 499 in Block 4 – Calendar year revenues

• Non-contributors must be treated as end user

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FCC Form 499

– Other requirements for Block 3

• Latest update: lines 304,306, 307,308, and 309 excluded in

this annual process. Lines 303, 305, 310-314 must:

– Retain Filer ID and contact information for the associated carriers

– Verify each carrier is a direct contributor to FUSF for that calendar year

– Print and keep information on FCC website to validate reseller contributor status

FCC Form 499

• Other requirements for Block 3

– Other requirements for Block 3

– Verify that customer is purchasing service for resale as telecommunications

– Annual certification under penalty of perjury using text from instructions

– Keep records to support verification

• Non-compliance to these requirements may require additional universal service assessments if carrier reclassified as end user.

97

FCC Form 499

– Line 301, Filer 499 ID (repeat of Line 101)

– Line 302, Legal name of filer (repeat of Line 102) – Fixed Local Service

• Line 303.1, Provided as unbundled network elements (UNEs) • Line 303.2, Provided under tariffs or other arrangements

FCC Form 499

• Fixed Local Service

– Monthly service – Local calling – Connection charges – Vertical features

– Other local exchange service

» Subscriber Line Charge (SLC or EUCL)

» Primary Interexchange Carrier Charge (PICC) charges to IXCs

– Local directory assistance

– LNP surcharges (considered interstate revenues)

99

FCC Form 499

– Per-minute charges for originating or terminating calls • Include originating or terminating VoIP-PSTN traffic • Line 304.1, Provided under state or federal access tariff

– Carrier Access Switched Billing (CABs)

– NECA EC-1050 switched earned interstate revenues reported on Line 14 or AS1000 Line 17

• Line 304.2, Provided as UNE or under other arrangements – Reciprocal compensation (do not deduct compensation

FCC Form 499

– Local private line and special access service • Line 305.1, Provided to other contributors for resale as

telecommunications

– Carrier Special Access Billing (CABs) billed to carrier’s not end users

– NECA EC-1050 SP earned interstate carrier revenues reported on Line 22 A) or AS1000 Line 20 A) for carriers not ISP

• Line 305.2, Local private line special access service provided to other contributors for resale as interconnected VoIP

101

FCC Form 499

– Line 306, Payphone compensation from toll carriers • Compensation from

– Atlantax Systems

– National Payphone Clearinghouse – Billing Concepts

– Use ratio of interstate toll billings to intrastate toll or access revenues to split out estimated interstate compensation for a good faith estimate of interstate revenues.

FCC Form 499

– Line 307, Other local telecommunications service revenues. Include collocation revenues pursuant to 47 U.S.C. § 251 (c) (6)

– Line 308, Universal service support revenues

received from federal or state sources. Exclude NECA settlements.

• Interstate universal service support includes

– High Cost Loop (on NECA Disbursement Notification or USAC Correspondence)

– Safety Net Additive (on NECA Disbursement Notification or USAC Correspondence)

103

FCC Form 499

• Interstate universal service support includes: (cont.)

– Safety Valve Support (NECA Disbursement Notification or USAC Correspondence)

– CAF Support (EC-3060-L Page 1 of 3 or AS3060-L Page 1 of 6 or EC1205). CAF is state and interstate

– Interstate Common Line Support (EC-3060-L Page 1 of 3 or AS3060-L Page 1 of 6 or EC1205)

– Lifeline and Link Up Charges (Form 497). All reported as interstate revenues on this line

– Exclude charges or credits for subsidized services to schools, libraries, and rural health care providers. These are end user revenues.

FCC Form 499

– Mobile services (including wireless telephone, paging & messaging, and other mobile services)

• Line 309, Monthly, activation, and message charges except toll services

– Use safe harbor percentage or submitted traffic study for all line 309

– Toll services

• Line 310, Operator and toll calls with alternative billing arrangements – Credit card – Collect – International call-back 105

FCC Form 499

• Line 311, Ordinary long distance – Direct dialed MTS

– Customer toll-free service – “10-10” calls

– Associated monthly account maintenance – PICC pass-through

FCC Form 499

• Line 312, Long distance private line services • Line 313, Satellite services

• Line 314, All other long distance services

• Line 315, Total revenues provided for resale (Lines 303 – 314)

• The total of the 300 lines are line 115 for the Form 499-Q

107

FCC Form 499

– Many companies use payable accounts to record NECA reported revenues, instead of revenue accounts

• Payable to NECA pool

• You will need to separate the settlements from what is reported if this is booked to the same account

• Need to know what the support dollars are buried in settlements-can use EC3060 or AS3060

FCC Form 499

• Block 4A (lines 403 – 418.3) – End User &

Non-Telecom Revenue

– End users are customers that use the services provided by your company. ISP is considered end user for any transmission carrying internet

– Non-telecom revenues are other than U.S. telecommunications revenues

• Voice mail

• Inside wire revenues

• Published directory revenues • Internet revenues

• Dark Fiber

109

FCC Form 499

– Non-telecom revenues (cont.) • Billing and collection revenues • Late payment charges

• Pole rental

• Returned check charges • Phones and accessories

– Line 401, Filer 499 ID (repeat of Line 101)

FCC Form 499

• Line 403, Surcharges or other amounts on bills identified as recovering state or federal universal service contributions

– For NECA companies revenue on EC-1050, Line 3.C).2. or AS1000, Line 5 B)

– For all other companies this could be the revenue collected from the end users called USF charges. There are rules to follow if you do this

– Do not apply safe harbor percentages

– State universal service program payments recovered by pass-through charges itemized on customer bills

– ISPs that bill USF Cost Recovery report on this line unless it is labeled Federal Cost Recovery then it goes with revenues assessed on

111

FCC Form 499

– Fixed Local Services for Lines 404.1 thru 404.5 • Monthly service

• Local calling

• Connection charges

• Vertical features (custom calling features)

• Other local exchange service except for subscriber line and PICC charges

• Local directory assistance

FCC Form 499

– Fixed local services - Traditional circuit switched • Line 404.1, Provided at a flat rate including interstate toll

service – local portion

• Line 404.2, Provided at a flat rate including interstate toll service – toll portion

– Lines 404.1 & 404.2 bundled local service with interstate toll as part of that monthly rate

• Line 404.3, Monthly local services provided without interstate toll included

113

FCC Form 499

– Fixed local services - Interconnected VoIP • Line 404.4, Offered in conjunction with a

broadband connection

• Line 404.5, Offered independent of a broadband connection

– Use interconnected VoIP safe harbor with lines 404.4 and 404.5

– If you do not use safe harbor for bundled interstate or international toll calling then

FCC Form 499

• Line 405, Tariffed subscriber lines charges, Access Recovery Charges, and PICC charges levied by a local exchange carrier to an end user

• CLECs that do not have a tariff or price list for these

revenues, not reselling such tariffed charges, or do not separately state charges; report nothing

– NECA EC-1050 SLC revenue on Line 6 or AS1000 Line 8 – NECA EC-1050 PIC revenues reported on Line 14 or AS1000

Line 17 or state PIC revenues if you have a Tariff » These Lines also include switched revenues

– NECA EC-1050 Line Port Charges for ISDN & DS1 revenues on Line 3.C).3 or AS1000 Line 5 C)

– NECA EC-1050 ARC lines 15 thru 17 or lines 18 thru 20 for AS1000

115

FCC Form 499

• Line 406, Local private line, DSL, & special access service, includes the transmission portion of wireline broadband internet access provided on a common carrier basis (Title II) billed to end user or ISP

– Common carriers are ILECs and CLECs whether you provide DSL or other transmission under tariff or price list

– NECA EC-1050 DSL end user and ISP revenues reported on Line 22 B) or AS1000 Line 20 B

– Ethernet & Multi-Protocol Label Switching go on this line – Due diligence to assure special access is or is not interstate

• Line 407, Payphone coin revenue (local and LD, do not reduce by commissions)

FCC Form 499

– Mobile services (including wireless telephony, prepaid wireless, paging & messaging, and other mobile services)

• Line 409, Monthly, activation charges, and service order charges

• Line 410, Message charges including roaming, local directory assistance, and air time charges for toll calls

– Exclude separately stated toll charges

117

FCC Form 499

– Revenues on lines 409 and 410 must have a

submitted traffic study or use safe harbor. A different traffic study can be used for each of these lines

• Work with USAC to see if traffic study is acceptable. • Safe harbor currently = 37.1%

FCC Form 499

– Toll services (outside of local exchange calling areas) • Line 411, Prepaid calling card (card sales to end users,

distributors, and/or retail establishments)

– Report at face value of cards

– Prepaid card revenues recognized when end user purchases card

– Includes prepaid service where customer uses the service provider’s switching platform and personal identification number

• Line 412, International calls that both originate and terminate in foreign points

119

FCC Form 499

• Line 413, Operator and toll calls with alternative billing arrangements other than revenues reported on Line 412

– Credit card – Collect

– International call back

– Long distance directory assistance

– Include calls placed from coin, coinless, prison telephones

FCC Form 499

• Line 414.1, All, other than interconnected VoIP, including, but not limited to itemized toll on wireline and wireless bills

– No safe harbor or traffic studies

• Line 414.2, All interconnected VoIP long distance, including, but not limited to, itemized toll

– Use safe harbor

121

FCC Form 499

• Lines 414.1 and 414.2 include toll calls placed for a fee, flat monthly charges, and monthly

minimums.

– Report toll bundles and split bundles based on minutes behind bundles.

» Intrastate » Interstate » International

FCC Form 499

• Line 415, Long distance private line services for services extending beyond basic service area, frame relay using dedicated services

• Line 416, Satellite services

• Line 417, All other long distance services like toll teleconferencing, frame relay using the toll network • Lines 403-411, 413-417 are Line 116 on Form

499-Q

123

FCC Form 499

• Line 418, Revenues other than U.S. telecommunications revenues, including:

– Information services

– Inside wiring maintenance and installation – Billing and collection

– Customer premises equipment (cell phones) – Published directory

– Pole attachment – Late payment charges – Returned check charges – Voice Mail

FCC Form 499

– Dark fiber not part of a UNE or telecommunications service – Internet access

– Cable TV program transmission – Foreign carrier operations

– Non-telecommunications revenues

– Non-Common Carrier wireline broadband internet access and cable modem service (provided cable modem service is being provided by an entity already filing an FCC Form 499-A). Price cap carriers (Title 1) offering DSL under contract

125

FCC Form 499

• Line 418.1, Bundled with circuit switched local exchange service

• Line 418.2, Bundled with interconnected VoIP local exchange service

• Line 418.3, Other revenues not bundled

• Line 418.4, Non-interconnected VoIP revenues not included in any other category

FCC Form 499

• Bundle Safe Harbors

– Two “safe harbor” methods for allocating

bundle packages with telecommunications and CPE/enhanced services:

» Report revenues based on all unbundled service offering prices & no discount allocated to telecommunications » Treat all bundled revenues as

telecommunications revenues and nothing reported in line 418

127

FCC Form 499

– Source of Revenues for Class B carriers using USOA • Basic area revenues on line 404 = Account 5001

• Miscellaneous revenues for the incidental revenues on lines 403, 404, 406, 408 & 418 = Account 5200

• Local network service revenues and local private line = Account 5000

• End user special access line 406 = Account 5084 • Tariffed SLC & PIC on line 405 = Account 5081 & 5082 • These can be the same Part 32 account numbers for some

FCC Form 499

– Source of Revenues for Class B carriers using USOA • Monthly mobile and message charges on lines 409 or 410 =

Accounts 5000 and/or 5004

• Toll services on lines 411 thru 417 = Account 5100 • Directory revenues = Account 5200

• Uncollectible revenues on lines 421 & 422 = Accounts 5300 and/or 5301

• Payphone coin revenues on line 407 = Accounts 5280 and/or 7990

• These can be the same Part 32 account numbers for some 300 lines

129

FCC Form 499

– Companies use varying sub-accounts for further breakdown for Form 499 reporting by carrier or end user

– NECA companies can use payable accounts to record revenues reported to NECA and revenue accounts to record NECA settlements

FCC Form 499

– Block 4B (lines 419 – 423) – Total Revenue & Uncollectible

• Line 419, Gross billed revenues from all sources including reseller and non-telecom

– Lines 303 thru 314 plus Lines 403 through 418

• Line 419 is line 118 on the Form 499-Q

• Line 420, Gross universal service contribution base amounts

– Lines 403 thru 411, Lines 413 thru 417

131

FCC Form 499

• Line 421, Uncollectible revenue/bad debt expense

associated with gross billed revenue amounts shown on Line 419

• Line 422, Uncollectible revenue/bad debt expense

associated with universal service contribution base amounts shown on Line 420

– Lines 421 and 422 include collected written off uncollectible and write-off recoveries

• Line 423, Net universal service contribution base revenues

– Line 420 minus Line 422

FCC Form 499

– Block 5 (lines 501 – 511) – Additional Revenue Breakouts • Line 501, Filer 499 ID (repeat of Line 101)

• Line 502, Legal name of filer (repeat of Line 102) • Lines 503 thru 510,

– Percent of revenues by each region of the country for Block 3, Carrier’s Carrier and Block 4, End-User Telecom – Customer billing addresses may be used to calculate or

estimate

» Line 510 must add to 100%

133

FCC Form 499

• Line 511, Include revenue from resellers that do not

contribute to Universal Service support mechanisms reported in Block 4-B, Line 420.

– Keep records of each customer with revenues reported on Line 511

– Line 512, Gross TRS contribution base amounts (lines 403 thru 417 plus 418.4 less line 511)

– Line 513, Uncollectible revenue associated with TRS base amounts on line 512

– Line 514, Net TRS Contribution base revenues (line 512 less line 513)

FCC Form 499

– Block 6 (lines 601 – 612 - Certification) • Line 601, Filer 499 ID (repeat of Line 101) • Line 602, Legal name of filer (repeat of Line 102)

• Line 603, Mark the box for Universal Service, TRS, NANPA, LNPA Administration if entity is exempt from contributing to those funds

• Line 604, Indicate whether the exempt entity is state or local government entity or Internal Revenue Code (I.R.C.) 501 Tax Exempt

135

FCC Form 499

• Line 605, Certify that revenue data is privileged and confidential and that public disclosure would likely cause substantial harm to the competitive position of the company

– Those that certify will have to support this position in the case of a Freedom of Information Act request

• Line 606, Signature of officer • Line 607, Printed name of officer

– Electronic signature is the equivalent to a handwritten signature.

• Line 608, Position with reporting entity

FCC Form 499

• Line 610, E-mail of officer (required if available)

– If a general e-mail address, officer may not be able to go online and certify

• Line 611, Date filed

• Line 612, Check applicable box

– Original April 1st filing – New filer registration

– Revised filing with updated registration – Revised filing with updated revenue data

137

FCC Form 499

• Common Errors/Omissions

– If you do not provide the information requested on every line, the Commission may consider you in violation of Commission rules

– Make sure there is an officer signature in ink on mailed form

– Enter 0 on the lines that you did not have revenues – Do not report negative revenues

FCC Form 499

– Report whole dollars

– Recover USF contributions in excess of amounts permitted

– Revise the Form 499 when out-of-period adjustments affect a reported amount by more than 10%

– Do not report NECA settlement revenues

– Uncollectibles need to tie back to year end Trial Balance

139

FCC Form 499

– Do not send check with the Form 499

– Line 403 column (d) / Line 423 column (d) should = average of the last four quarters contribution factors – Revise Form 499-A if changes are made to

contributor identification, DC agent, FCC registration information, error in revenue, and/or you are no longer in business or start a new entity within one week

– Use circuit self-certification when Access Service Order is not used for end user. Have them certify it does not have 10% interstate traffic or carries internet

FCC Form 499

• Traffic Studies & Safe Harbor

– Traffic studies and safe harbors apply when there is a need to split revenues between state and interstate services

– Include Filer ID, Name, Holding Company (if applicable) at the top of each page

– Use same methodology for Form 499-A that was used in Form 499-Q

• Line 309, 409 & 410 – mobile services

• Lines 303.2, 404.4, 404.5 & 414.2 – interconnected VoIP

141

FCC Form 499

– Safe harbor percentages vary by service; currently: • 37.1% for cellular & broadband PCS revenues • 12% for paging revenue

• 1% for analog SMR dispatch revenues

• 64.9% for interconnected VoIP telecommunications revenues

FCC Form 499

– Reporting carrier makes an election to use a traffic study or safe harbor with each filing

• 499A must include revenues as reported in 499Qs – Traffic study, if used, must be submitted with each

499Q

• No support is required at the time of filing

– Sent to FCC and USAC – Subject to FCC OIG audit

» Maintain all supporting documentation & data

143

FCC Form 499

– Traffic study documentation

• Explanation of sampling and estimation methods used • Explanation of why the study is an unbiased estimate of the

interstate and international (if applicable) traffic

• Wireless traffic studies should include all types of minutes used to provision the wireless plan

FCC Form 499

– Traffic study data

• Minutes of use can come from multiple sources

– Underlying carrier for resale – Customer calling records – Switch data

• Minutes of use should be actual, not just a “representative period”

– Summarize by month and quarter

• Traffic study data can also be used as a good faith estimate for local bundled service

145

FCC Form 499

• Late Payment Fees

– Interest is the > of: • $100 or;

• Prime Rate (on delinquent date) + 3.5% from the date filing was due

• Administrative charges for collection and/or penalties permitted by law

– Additional 6% annual interest on debt remaining 90 days after delinquent

FCC Form 499

• Record Retention

– FCC currently requires that all records be retained 5 years including those of consultants working on your behalf

• De Minimis Worksheet

• Form 499 and supporting work papers

– See USAC Audit section

• Traffic Studies

147

FCC Form 499

• Federal Universal Service Charge (FUSC)

– FUSC is paid for by all telecommunications

companies that provide interstate and international telecommunications services

• Except de minimis carriers

– FUSC is assessed on all interstate and international end user revenues

FCC Form 499

– FUSC can, not must, be passed on to customers • The FCC does not dictate the manner in which carriers may

recover their universal services costs from interstate or international subscribers.

– Title 47 CFR, Part 54, Section 54.712.

• FUSC must be a separate billed line-item

– Flat amount or a percentage

– Not assessed on Lifeline or Link Up participants for subsidized services

– Must not exceed the current contribution factor – Not assessed on exempt military

149

FCC Form 499

– Variances for wireless carriers

• Commercial Mobile Radio Services (CMRS) providers may recover universal service contributions through rates charged for all services

– Contribution factor * traffic study interstate factor * total telecommunications revenue on Lines 409 & 410

– Contribution factor * safe harbor * total telecommunications revenue on Lines 409 & 410

– FCC DA 05-2320

FCC Form 499

– USAC submits quarterly filings to the FCC that project support requirements for:

• High Cost Support • Low Income Support • Rural Healthcare • Schools & Libraries

– USAC also submits estimates of interstate and international projected revenues based on 499Qs – FCC calculates quarterly contribution factor

151

FCC Form 499

– Customer notification of FUSC increases

• FCC rules do not specify that 30 day advance notice is required for non-dominant carriers • 47 CFR, Part 61.58 does require some form of

advance customer notification – Written notification

– Personal contact

– Advertising in newspapers of general circulation

References

• http://hraunfoss.fcc.gov/edocs_public/Query.do?mode=advance&rpt =full

– Late Payment Penalties

• http://www.fcc.gov/Bureaus/Common_Carrier/Orders/1998/fcc98292 .pdf

– DSL as Interstate

• http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-05-2320A1.doc

– Wireless Cost Recovery Clarification

• http://www.fcc.gov/omd/contribution-factor.html

– Current USF Contribution Factor

• http://www/fcc/gov/Daily_Releases/Daily_Digest/subscribe.html

– To subscribe to the FCC’s Daily Digest

• FCC Contacts

– Fred Theobald – (202) 263-1613

NECA Monthly

Reporting

Revenue Distribution Agreement

• Form EC-1050-I or AS1000-I

– Cost companies (CC)

– Average Schedule companies have different reporting requirements (AS)

• Data must be updated and corrected for up to 24

months . Tie EC 2060-L or AS 2060-L to General

Ledger or billing records.

EC-1050-I or AS1000-I Inputs

• Line 1A, Interstate Access Minutes (include

VoIP)

– Source: CABS minutes by jurisdiction for originating and terminating, excludes transiting minutes

• Line 1B, Intrastate Terminating Local Switching

Minutes (exclude VoIP)

• Line 1C, Intrastate Terminating Local Switching

Minutes (VoIP only)

156

EC-1050-I or AS1000-I Inputs

• Line 2A, Access lines in service for CC and

Settlement Access Lines for AS

A) 1) Residential include employee concession A) 2) single-line business

• Line 2B), Access lines in service for CC and

Settlement Access Lines for AS

– Multi-line business

EC-1050-I or AS1000-I Inputs

• Line 3, Common Line Earned Revenues for CC

or Line 5, Other CL Charges for AS

– C)1) Special Access Surcharge for CC or A) for AS. • Source: CABS facility access service bill.

– C)2) Federal Universal Service Charge for CC or B) for AS

• Source: End User Billing & Carriers that do not contribute – C)3) Line Port Charges: ISDN Lines, DS1 Channel

Service if customer channelizes DS1 for CC or C) for AS

• Source: End User Billing

158

EC-1050-I or AS1000-I Inputs

• Line 4, Other Common Line (CL) Charges Realized Uncollectible Revenue for CC or line 6 for AS

– Source: End User Billing for write-offs or recovery

• Line 5, Other CL Net Earned Revenue for CC or line 7 for AS – Source: Line 3 C) – Line 4 for CC or Line 5 + Line 11– Line

6 for AS

• Line 6, End User (EU) Earned Revenue for CC or Line 8 for AS

– Source: End user billing includes recurring and partial month billing

– A) Residential & single-line business – B) Multi-line business

EC-1050-I or AS1000-I Inputs

• Line 7, EU Net Realized Uncollectible Revenue for Cost Company (CC) or Line 9 for Average Schedule (AS)

– Source: End User Billing and write-offs or recoveries • Line 8, EU Earned Revenue for CC or line 10 for AS

– Source : Line 6 – Line 7 for CC or Line 8-Line 9 for AS

160

EC-1050-I or AS1000-I Inputs

• Line 9, CL Expenses & Other Taxes (A + B)

– A) CL EOT Amount

• Source: Cost Study Part 69 Expense Summary

– Total EOT assigned to CL – Acct. 6540 EOT

– B) Universal Service Contribution Reimbursement will match EC 1050 line 3 C) 2 This is line 12 for AS and it matches AS1000 line 5 B).

EC-1050-I or AS1000-I Inputs

• Line 10, CL Average Net Investment

– Source: Cost Study Part 69 Revenue Requirement Summary

• Rate Base assigned to Common Line

• Line 11, CL Income from AFUDC

– Source: Cost Study Part 69 Revenue Requirement Summary

• AFUDC assigned to Common Line

162

EC-1050-I or AS1000-I Inputs

• Line 12, CL Income Adjustment for FIT

– Source: Cost Study Part 69 Revenue Requirement Summary

• FIT Adds/Deducts assigned to Common Line

• Line 13, CL FIT Tax Credit

EC-1050-I or AS1000-I Inputs

• Line 14, Switched Access (SW) Earned

Revenue for CC or Line 17 for AS

– Sources: • CABS

• Connecting company statements • Revenue sharing statements • End User Billing for PICs

• Billing, Name, and Address (BNA)

164

EC-1050-I or AS1000-I Inputs

• Line 15 for CC or line 18 for AS, ARC residential

line revenue excludes lifeline

• Line 16 for CC or line 19 for AS, ARC single- line

business revenue

• Line 17 for CC or line 20 for AS, ARC multi- line

business revenue

– This applies to those Companies in Tariff 5 to recover the Access Recovery Charge (ARC). Source is end