It is all-too-fitting that the annual USF report is due on April 1. For many filers, OMB’s “Estimated Average Burden Hours Per Response” of 13.5 hours for completing the Form 499-A is laughable. The FCC could substantially reduce USF reporting burdens by implementing a number of overdue changes.
Many process improvement proposals offered in comments filed in response to the FCC’s 2012 Further Notice of Proposed Rulemaking remain viable and doable. These changes are independent of any FCC decision on whether, when or how to expand the base of USF-assessable revenues. Here is a short list of USF reporting reforms the FCC should adopt.
1. Resolve appeals of USAC decisions consistent with the timelines in Section 54.724 of the FCC’s rules or revise the target dates for making decisions.
If the expert agency sits on its hands, inconsistent decisions by filers are inevitable.
2. Address USF contribution reporting questions through analogues to IRS Private Letter Rulings or Revenue Rulings.
Determining USF contributions can be problematic because filers often must address the vexing question of whether a service is a telecommunications service or an information service. Many of these questions remain unanswered for years. The FCC or the Wireline Competition Bureau is in the best position to answer these questions.
3. Balance the current asymmetrical periods for correcting USF reporting mistakes (5 years for underpayments and 1 year for refunds/adjustments for overpayments).
This is a no-brainer.
4. Limit adjustments to the USF contribution factor to once a year.
While USF contributions may not be “taxes,” it is noteworthy that state sales and use taxes typically are not adjusted quarterly. This would be a “win-win” for filers and USAC.
5. Set “safe harbors” for determining interstate/international and intrastate traffic mixes for wireless and VoIP traffic that reasonably correspond to reported values.
Filers cannot be expected to remit USF contributions based on “safe harbors” that bear no relation toactual jurisdictional traffic mixes. This would be another “win-win” for filers and USAC.
The FCC should also adopt a self-disclosure program to encourage non-filers and late-filers to register and report and remit USF contributions and all other regulatory payments. Under this approach, the services provider would pay the amounts owed, a reasonable measure of “economic benefit” for late payment, and a realistic forfeiture amount. Let’s maximize support for important programs and try to keep services providers in the game. This is far better than the treble damages methodology outlined in the 2015 Forfeiture Policy Statement.