Form 499-A Instructions: Comment Sought (Again) on Proposed Changes

The latest version of the FCC’s clarification on reseller certification language recommended for use by wholesale telecommunications providers is now available for comment.

The FCC’s Wireline Competition Bureau is seeking comment on another round of proposed changes to the Form 499-A and Form 499-Q instructions. The latest proposals contain (among a few other things) what many hope will be the final version of the “reseller certification” language for use starting next year. (Reseller certifications are what wholesale telecommunications providers rely on to ascertain applicable Universal Service Fund (USF) contribution obligations.)

Our regular readers will recall that the Commission’s “Wholesaler-Reseller Clarification Order” from nearly a year ago promised clarification to the reseller certification language in the upcoming Form 499-A instructions.  As we observed last March, that clarification was missing from the instructions released earlier this year. Then in August we reported that a group of wholesale telecommunications providers had offered suggested revisions to the reseller certification language and other aspects of the FCC Form 499-A instructions.

(If you need to refresh your recollection of the information in our previous posts, now would be a good time to go back through them again. That background will be helpful for what follows.)

After considering the suggested revisions (and the comments filed in response to them), the FCC seems finally to be settling in on a new set of (proposed) instructions and reseller certification language for use starting in 2014. The much awaited clarification language proposed in the new instructions largely reflects the suggestions of the wholesale telecommunications providers. Notably, the proposed language does not require service specific certifications (i.e., certifying that 100% of a service is being incorporated for resale as USF assessable telecommunications) as contemplated by the Bureau’s original proposal last year. Rather, wholesale providers will be able to obtain certification in a number of ways – including on an “entity-level” or “account-level” (among others) – as long as a portion of the services sold by a wholesale provider is being resold as USF assessable telecommunications.

The new reseller certification language also incorporates another potentially significant change not originally included in any of the prior proposals. In response to the proposals of the wholesale providers, another telecommunications provider also suggested language to accommodate the fact that wholesale telecommunications providers often offer services to other wholesalers. Indeed, there could be many wholesalers in the chain before service is ultimately provided to a “reseller” that is serving an end-user consumer. Previous iterations of the reseller certification language contemplated only that a wholesale provider’s immediate customers would be the ones offering services to end-users (and thus with the obligation to contribute directly to the USF program). The new proposal contemplates the possibility “that another entity in the downstream chain of resellers directly contributes to the federal universal service support mechanisms on the assessable portion of revenues from offerings that incorporate the purchased services.” This is likely a welcome addition for many middle-of-the-service-chain wholesale providers who have, in the past, had problems obtaining certifications from (and providing certifications to) other wholesale-resellers using the previously approved language.

If you have specific thoughts or comments on the proposed changes, the Public Notice sets a comment deadline of November 27, 2013. Apparently, the Bureau is not providing any opportunity for reply comments. We expect that the Bureau will be trying to issue the final, approved version of these instructions before the end of the year because wholesalers must implement the new reseller certification language at the beginning of 2014.

[SIDE NOTE: The Bureau is also proposing some less polite non-substantive changes to the Form 499-A instructions.  Previous iterations of the instructions politely requested Form 499 filers to comply with certain requirements, such as “Please provide an original officer signature…” The word “please” has been completely stricken from the instructions in the latest proposal. Should we be offended?]

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