Form 499 & Billing AN OVERVIEW

Transcription

1 Form 499 & Billing AN OVERVIEW November

2 Overview General Overview Submitting the 499 Form Who uses the 499 information? USF Billing True Up Audits Common E-File Issues 2

3 Form 499 & Billing Overview 3

4 Who MUST file the 499-A? ALL intrastate, interstate and international providers of telecommunications service providers within the United States, with very limited exceptions, must file the FCC Form 499A. TELECOMMUNICATIONS: (defined by FCC for FCC Form 499-A purposes) the transmission, between or among points specified by the user, of information of the user s choosing, without change in the form or content of the information as sent and received 4

5 Who MUST file the 499-A? Types of entities responsible for filing Form 499 include (but are not limited to): wireless telephone, including cellular and personal communications services (PCS) paging and messaging services private line dispatch services telex mobile radio services telegraph wide area telecommunications services (WATS) operator services video services access to interexchange service satellite services special access resale services message telephone services (MTS) frame relay and ATM services subscriber toll-free services interconnected VoIP services 5

6 Current 499 Forms TYPE DUE DATE REVENUE REPORTED FUND(S) 499A April 1 Annual actual billed revenue TRS, NANP, LNP & USF 499Q May 1 499Q Aug 1 499Q Nov 1 499Q Feb 1 3Q projected billed & collected revenue 1Q actual billed revenue 4Q projected billed & collected revenue 2Q actual billed revenue 1Q projected billed & collected revenue 3Q actual billed revenue 2Q projected billed & collected revenue 4Q actual billed revenue USF USF USF USF 6

7 499 Non Responders FCC Order paragraph 14 If a filer is more than 30 days delinquent in filing an FCC Form 499-A or 499-Q, the USF Administrator shall also use the U.S. prime rate plus 3.5 percent in assessing a remedial sanction. The sanction will be the greater of $100 per month or the amount derived when a rate of interest equal to the U.S. prime rate plus 3.5 percent is assessed on the amount due per the Administrator s invoice or calculations (if no invoice was provided). 7

8 499 Non Responders The FCC Order requires USAC to continue to bill Late Filing Fees until the form is received. Filing May Q Quarterly Contribution Base $430,000 Monthly USF Contribution $14, WSJ Prime Rate 5% USAC Late Filing Fee Rate 8.5% Daily Late Filing Fee 3.34% Monthly Fee $100 Yearly Fee $1,

9 499 Non Responders Late Filing Fees Invoice A B C D E F G H (F+G) Filing Due Monthly Obligation Filing Received Rate Months Delinquent Additional Sanction Accrued Sanction Total Sanction 499Q 2/1/10 $1, /15/10 100/mo 5 $100 $400 $ Q 11/2/10 $1, NR 100/mo 8 $100 $700 $ A 4/1/09 $1, NR 100/mo 15 $100 $1,400 $1, A 4/1/08 $1, NR 100/mo 27 $100 $2,600 $2,700 TOTAL $400 $5,100 $5,500 NR = Filing Not Received 9

10 Delinquent Debt Due Date and Delinquency Under 31 U.S.C. 3701, your BALANCE DUE is a debt owed to the United States. Any portion of that amount unpaid after the payment due date (i.e., the date of delinquency) is a DELINQUENT DEBT for which USAC and the FCC may take collection action against you as a delinquent debtor. Under the law, we will assess interest, penalties and administrative charges, from the date of delinquency, and if the debt remains delinquent, we will refer the matter to the United States Department of Treasury or the Department of Justice. 10

11 Delinquent Debt If your debt is 1 Day Delinquent: your filer ID and all associated SPINs put on Red Light status all future USF disbursements netted against outstanding delinquent debt 30 Days Delinquent: interest charged at the annual rate equal to the U.S. prime rate as of the date of delinquency plus 3.5 percent from the date debt was due 90 Days Delinquent: additional penalty of 6 percent a year assessed to any part of debt more than 90 days past due 11

12 Delinquent Debt If your debt remains unpaid Full amount of outstanding debt may be transferred to the United States Department of Treasury for debt collection You will be required to pay administrative costs of processing and handling a delinquent claim as set by the Treasury (currently 28 percent of the debt) 12

13 Delinquent Debt Delinquent Debt Invoice 13

14 Form 499 & Billing 499 Submittals 14

15 Submitting a 499 E-file! Hard Copy (mail) 15

16 Submitting a 499 HARD COPY Officer signs 499 (certifying information) Mail to USAC Forms received are date stamped (form must be received by USAC by the due date or the form is late!) Form data entered into USAC s E-File system Data doubled checked by 499 analyst to ensure accuracy 16

17 Submitting a 499 ONLINE E-File Log in to E-File Prepare the Form 499 Officer certifies information is correct (with electronic signature) User ID (batch ID) Date certified (postmark & receive dates) No hardcopy required 17

18 Submitting a 499 ONLINE E-File system Pre-populates all non-financial data from previous filings Has automated checks and helpful hints to help preparers file their FCC Form accurately and in compliance with FCC instructions 18

19 Submitting a 499 ONLINE E-File Automated Checks FCC Form 499 filings are checked against prior filings and FCC rules for compliance and accuracy 40 checks conducted on 499A 10 checks conducted on 499Q 19

20 499 Correspondence Standard Form 499 s: FCC 499 Notice notifies filers of upcoming filing due dates and recently issued FCC orders Non-responder Notice notifies filers that USAC has not received their latest 499 filing 20

21 499 Correspondence Standard Form 499 s: Issue identifies an issue with a filing with definition as to why issue exists Accepted (499Q Only) notifies filer that filing has been reviewed with no apparent issues as well as any change in contribution base % 21

22 499-Q Quick Check

23 499-Q Quick Check Q Filing Identifier (Line 113 & 114) Line 113: year of historical revenue should be year that the filing was due (exception: February 499Q year of historical revenue will be the prior year) Example: May Q Line 113 will be

24 499-Q Quick Check Q Filing Identifier (Line 113 & 114) Ensure correct filing has been checked off 24

25 499-Q Quick Check 2 End User Interstate & International Revenues (Line 116, 119, & 120) Do you have End User Interstate and/or International Revenues? YES: check to make sure revenues are listed on lines 116, 119, and 120 and that numbers are fairly similar (~+/-30%) 25

26 499-Q Quick Check 2 End User Interstate & International Revenues (Line 116, 119, & 120) Do you have End User Interstate and/or International Revenues? NO: check to make sure you have reported $0 on lines 116, 119, and

27 499-Q Quick Check 2 End User Interstate & International Revenues (Line 116, 119, & 120) If you have reported revenue on line 116 but have stopped providing End User Interstate and/or International services, you should report $0 on lines 119 and

28 499-Q Quick Check 2 End User Interstate & International Revenues (Line 116, 119, & 120) If you have reported $0 on line 116 and are going to start providing End User Interstate and/or International services, you should report revenues on lines 119 and

29 499-Q Quick Check 3 Signature (Line 122) Make sure your Company Officer has signed the form 499Q Be sure you are sending USAC the original NOT a photocopy 29

30 Form 499 & Billing Who uses 499 s? 30

31 Who uses 499 s? Telecommunications Relay Service (TRS) FCC Form 499-A only A telephone service allowing persons with hearing or speech disabilities to place and receive telephone calls TRS is available in all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories for local and/or long distance calls Accepted (499Q Only) notifies filer that filing has been reviewed with no apparent issues as well as any change in contribution base % 31

32 Who uses 499 s? Telecommunications Relay Service (TRS) Revenue Base Line 420(d) + Line 420(e) + Line 412(e) Line 511(b) Minimum Fee: filers with interstate or international enduser revenues must pay a minimum of $25 32

33 Who uses 499 s? Universal Service Fund (USF) FCC Form 499-A and 499-Q Largest of all funds using the 499 information Revenue Base 499-A: Line 423(d) + Line 423(e) 499-Q: Line 120(b) + Line 120(c) De Minimis Exemption telecom carriers not required to contribute to universal service support mechanisms for a given year if their contribution for that year is less than $10,000 33

34 Who uses 499 s? North American Numbering Plan (NANP) FCC Form 499-A only Integrated telephone numbering plan serving 19 North American countries that share its resources AT&T developed NANP in 1947 to simplify and facilitate direct dialing of long distance calls (implementation began in 1951) Revenue Base: Line 420(a) + Line 412(a) Line 511(a) Minimum Fee: filers with end-user revenues pay minimum of $25 filers with no end user revenues, pay $25 34

35 Who uses 499 s? Local Number Portability (LNP) FCC Form 499-A only LNP is defined in the Telecommunications Act of 1996 as the ability of users of telecommunications services to retain, at the same location, existing telecommunications numbers without impairment of quality, reliability, or convenience when switching from one telecommunications carrier to another. Opens up local telephone service to competition 35

36 Who uses 499 s? Local Number Portability (LNP) Revenue Base by region: (Line 420(a) + Line 412(a) Line 511(a)) * % of end-user revenues shown on Lines 503 through 509 Minimum Fee: filers with no end user revenues must pay $100 36

37 Who uses 499 s? Federal Communications Commission (FCC) FCC Regulatory Fees for interstate telecommunications providers DC Agent Declaration: Carriers can satisfy their obligations under Section 413 of the Act to designate an agent in the District of Columbia for service of process FCC Registration: Companies also satisfy their obligations to register with the FCC under Slamming Regulations passed February 2001 Industry Analysis 37

38 Form 499 & Billing USF Billing 38

39 USF Billing SMC Background FCC sets quarterly contribution factors based on cumulative revenue reported by carriers on 499-Q Carriers are permitted to pass Universal Service Fund charges through to customers Revenue generated must be reported on Form 499 FCC sets a quarterly circularity factor to reduce contribution amounts (prevents assessing further USF fees on pass-through charges) Circularity factor is same for all carriers (whether or not they pass-through charges to customers) 39

40 USF Billing Quarterly Telecommunications Worksheet (499-Q) Filed by carriers Used to determine carriers monthly USF contribution obligation Obligations assessed based on projected collected enduser interstate and international revenues (Line 120) 40

41 USF Billing Exceptions De Minimis: contributors with annual contributions < $10,000 are not required to contribute 499Q USAC uses FCC Contribution and Circularity Factors to determine de minimis status 499A USAC uses average of the FCC Contribution and Circularity Factors to determine de minimis status 41

42 USF Billing Exceptions De Minimis Monthly Charges: de minimis test performed on both 499-Q (for current quarter) & latest 499-A If de minimis on both forms, company is exempt from charges De minimis test is conducted on an individual basis 42

43 USF Billing Exceptions De Minimis Examples Example 1: both 499A and 499Q are not De Minimis 499A: $165,000 *.104 = $17, Contribution Base FCC Estimated Annual Factor Estimated 499A Contribution 499Q: $ * 4 = $16, Adjusted Contribution Estimated 499Q Contribution 43

44 USF Billing Exceptions De Minimis Examples Example 2: 499A is De Minimis and 499Q is not De Minimis 499A: $50,000 *.104 = $5,200 Contribution Base FCC Estimated Annual Factor Estimated 499A Contribution 499Q: $ * 4 = $16, Adjusted Contribution Estimated 499Q Contribution 44

45 USF Billing Exceptions De Minimis Examples Example 3: both 499A and 499Q are De Minimis 499A: $50,000 *.104 = $5,200 Contribution Base FCC Estimated Annual Factor Estimated 499A Contribution 499Q: $1, * 4 = $4, Adjusted Contribution Estimated 499Q Contribution 45

46 USF Billing Exceptions De Minimis Examples Example 3: both 499A and 499Q are De Minimis 499A: $50,000 *.104 = $5,200 Contribution Base FCC Estimated Annual Factor Estimated 499A Contribution A company needs to be De Minimis on both their current 499Q and their last filed 499A in order to not to be billed by USAC. 499Q: $1, * 4 = $4, Adjusted Contribution Estimated 499Q Contribution 46

47 USF Billing Exceptions De Minimis Examples De Minimis for 499Q Only 1Q 2Q 3Q 4Q Total True Up Final Quarterly Revenues 25, $25,000 $100,000 $75,000 FCC Contribution Factor 9% 9% 9% 13% 10% 11%* Annual Contribution $9,000 $9,000 $9,000 $13,000 10,000 DeMinimis Yes Yes Yes No No USF Contribution 0$ $0 0$ $3,250 $3,250 $8,250 $11,500 De Minimis for 499Q and 499A 1Q 2Q 3Q 4Q Total True Up Final Quarterly Revenues 25, $25,000 $100,000 $0 FCC Contribution Factor 9% 9% 9% 13% 10% 10% Annual Contribution $9,000 $9,000 $9,000 $13,000 10,000 DeMinimis No No No No No USF Contribution $2,250 $2,250 $2,250 $3,250 $10,000 $0 $10,000 47

48 USF Billing Exceptions In this scenario, filer would be charged $1,500 more if USAC did not require companies to be both De Minimis on 499-Q & 499-A De Minimis for 499Q Only 1Q 2Q 3Q 4Q Total True Up Final Quarterly Revenues 25, $25,000 $100,000 $75,000 FCC Contribution Factor 9% 9% 9% 13% 10% 11%* Annual Contribution $9,000 $9,000 $9,000 $13,000 10,000 DeMinimis Yes Yes Yes No No USF Contribution 0$ $0 0$ $3,250 $3,250 $8,250 $11,500 De Minimis for 499Q and 499A 1Q 2Q 3Q 4Q Total True Up Final Quarterly Revenues 25, $25,000 $100,000 $0 FCC Contribution Factor 9% 9% 9% 13% 10% 10% Annual Contribution $9,000 $9,000 $9,000 $13,000 10,000 DeMinimis No No No No No USF Contribution $2,250 $2,250 $2,250 $3,250 $10,000 $0 $10,000 48

49 Understanding Your Invoice 49

50 Understanding Your Invoice 50

51 Understanding Your Invoice 51

52 Understanding Your Invoice 52

53 Form 499 & Billing True Up 53

54 True Up: Background Purpose of the True Up: Determines who was de minimis for prior calendar year Reverses billings associated with that status Compares quarterly filings to the year-end annual filing Adjusts non de minimis accounts for any differences in the revenue reported 54

55 True Up: Background True Up process: Four quarters of projected, collected revenue compared to corresponding 499-A filing If sum of 499-Qs exceeds the 499-A: credits issued on July September invoices Credits calculated using average of the two lowest contribution factors and associated circularity factors in place during the quarterly billings 55

56 True Up: Background True Up process: If sum of 499-Qs is less than the 499-A: charges issued on July September invoices Charges calculated using average of the two highest contribution factors and associated circularity factors in place during quarterly billings Revised 499A Forms result in recalculation of the true up Resulting recalculation is compared to original true up to determine credits or adjustments due 56

57 A/Q True Up Example Filings Interstate Revenue (Line 423D) International Revenue (Line 423E) Contribution Base A $2,377,064 + $19,218 = $2,396,282 Interstate Revenue (Line 120B) International Revenue (Line 120C) Contribution Base Nov Q $621,080 + $7,495 = $628,575 Feb Q $603,005 + $4,978 = $607,983 May Q $623,264 + $4,627 = $627,891 Aug Q $639,772 + $4,211 = $643, Q Contribution Base $2,487,121 + $21,311 = $2,508, Avg. Contribution & Circularity Factors Avg. of 2 highest FCC contribution Factors.126 Avg. of 2 lowest FCC Contribution Factors.104 Avg. of 2 FCC Circularity Factors associated with 2 high FCC Contribution Factors Avg. of 2 FCC Circularity Factors associated with 2 low FCC Contribution Factors Avg. of all FCC Contribution Factors.115 Avg. of all FCC Circularity Factors

58 A/Q True Up Step 1 Determine whether or not company is de minimis for purposes of the A/Q True Up FORMULA: (499A *.115) (499A *.115 * ) If < $10,000, contributor is de minimis (January December 2009 charges are reversed) If > or = $10,000, contributor is NOT de minimis; continue to step 2 58

59 A/Q True Up Step 1 Example ($2,396,282 *.115) ($2,396,282 *.115 * ) = $246, $246, > $10,000 Not De Minimis 59

60 A/Q True Up Step 2 Determine which FCC contribution factor, and associated FCC Circularity factor, to use in True Up Calculation After determining which factor is applicable, use to replace Average FCC Contribution Factor* in step 3 Average of 2 highest FCC Contribution Factors and associated average FCC Circularity Factor used if (499A) > (Q1 + Q2 + Q3 + Q4) Average of 2 lowest FCC Contribution Factors and associated average FCC Circularity Factor used if (499A) < (Q1 + Q2 + Q3 + Q4) Average of all 3 FCC Contribution Factors and associated average FCC Circularity Factor used if (499A) = (Q1 + Q2 + Q3 + Q4) 60

61 A/Q True Up Step 2 Example ($2,396,282) < ($628,575 + $607,983 + $627,891 + $643,983) Average of 2 lowest FCC Contribution Factors and the associated average FCC Circularity Factor should be used. 61

62 A/Q True Up Step 3 Using the inputs, A/Q True Up formula for calculating necessary Support Mechanism Credits or Adjustments is: (499A) - (Q1 + Q2 + Q3 + Q4) = True Up Base (True Up Base * Average FCC Contribution Factor) (True Up Base * Average FCC Contribution Factor * Average FCC Circularity Factor) = Quarterly Credit or Adjustment Quarterly Credit or Adjustment / 3 = Monthly Credit or Adjustment 62

63 A/Q True Up Step 3 Example ($2,396,282) - ($628,575 + $607,983 + $627,891 + $643,983) = - $112,150 (-$112,150 *.104) - (-$112,150 *.104 * ) = -$10, $10, / 3 = -$3, The company will receive three equal credits of -$3,511.9 on their July September Invoices. 63

64 True Up: Inactivation COMPANY: going out of business Company goes out of business mid year not responsible for filing 499-A for that calendar year COMPANY: sales, mergers, consolidations Purchasing company responsible for reporting all revenues from purchased company for complete reporting year on 499A unless stipulated otherwise USAC uses combined 499Q revenues of both companies when calculating purchasing company s 499A True Up 64

65 True Up: Inactivation SMC USAC reverses all SMC and related interest & penalties from date the company was inactivated forward EXAMPLE: If company goes out of business on 6/30/2007, USAC will: a) Reverse SMC and related interest & penalties billed to the company after their 6/15 invoice b) Reverse late filing fees and related interest & penalties for filings due after 6/30 c) Consider remaining SMC and Late Filing Fees as outstanding debt subject to FCC and DCIA 65

66 True Up: Inactivation 499A True Up USAC only reverses 499A True Up charges that resulted from USAC generated estimated 499A created after the company s inactivation When the company is inactivated mid-year, USAC does not use revenue reported on the company s 499Q filings USAC will calculate 499Q revenues from company s actual SMC billed throughout the year 66

67 Form 499 & Billing Audit 67

68 AUDIT 2007 Form 499-A Instructions Filers shall maintain records and documentation, to justify information reported in the Telecommunications Reporting Worksheet, for five years (including the methodology used to determine projections and allocate interstate revenues) Filers shall provide records and documentation to the Commission or the Administrator upon request 68

69 AUDIT 2007 Form 499-A Instructions Review by the Commission or the Administrator may cover any existing corporate records, not just those maintained specifically for the five year period Entities that acquire carrier operations through acquisition of property, consolidation, merger, etc, must maintain the records of the acquired entity 69

70 AUDIT US Telepacific Order (DA ) Service providers leasing or purchasing transmission from telecommunications carriers to provide wireline broadband Internet access services are not required to contribute to the USF for revenues derived from the provision of that service If service providers lease or purchase transmission service offered on a common carrier basis (whether from an affiliated entity or a third party) they are end users of that telecommunications service, and the telecommunications carrier providing the leased telecommunications services is obligated to contribute to the USF on those revenues 70

71 AUDIT: Areas of Concern Block 3 Revenues: Wholesale Revenues Reseller is a telecommunications carrier or telecommunications provider that: 1. Incorporates purchased telecommunications services into its own telecommunications offerings 2. Can reasonably be expected to contribute to federal universal service support mechanisms based on revenues from such offerings when provided to end users 71

72 AUDIT: Areas of Concern Private Line: Revenues If over ten percent of the traffic carried over a private or WATS line is interstate, then the revenues and costs generated by the entire line are classified as interstate. 72

73 AUDIT: Areas of Concern 418 Revenues: Non Telecommunications Two safe harbor methods for allocating revenue when telecommunications and CPE/enhanced services are offered as a bundled package 1. Report revenues from bundled telecommunications and CPE/enhanced service offerings based on the unbundled service offering prices, with no discount from bundled offering being allocated to telecommunications 2. Contributors may elect to treat all bundled revenues as telecommunications revenues for purposes of determining their universal service obligations 73

74 AUDIT: Areas of Concern Subscriber Line Charges (SLC) Represent interstate portion of fixed local exchange service Filers without subscriber line charge revenue must identify interstate portion of fixed local exchange service revenues in column (d) of the appropriate line 74

75 AUDIT: Areas of Concern Universal Service Charges Any charge identified on a bill as recovering contributions to universal service support mechanisms must be shown on Line 403 Charges should be identified as either interstate or international revenues, as appropriate Filers should report intrastate revenues on line 403 only to the extent that actual payments to state universal service programs were recovered by pass-through charges itemized on customer bills 75

76 Form 499 & Billing E-File Issues 76

77 E-File Issues I can t log in to E-File! Due to security, E-File system will not let you log in if you use a link from your internet favorites list If you would like to add a site to your favorites, try one of the following links: Select E-file from the USAC Forms list on the right hand side of the page Still having trouble? Call us! 77

78 E-File Issues I can t log in to E-File! Select E-file from the USAC Forms list on the right hand side of the page 78

79 E-File Issues Still can t log in to E-File? Internet Browser: E-File system has issues with some internet browsers: try changing your browser (Internet Explorer works the best) Pop-up Blocker: Please make sure that your internet pop-up blocker is off 79

80 E-File Issues Common Error Messages No User ID Caused by either a form rejection or an uncertified form Paper form will be required to obtain a login in either case Login Not Valid User name and password are case sensitive Customer Service can support questions with user name and to reset passwords 80

81 E-File Issues Common Error Messages Not Authorized Caused by an active directory issue Contact USAC to resubmit the form Delegated User Forgets Password Contact delegator to reset password (USAC cannot reset) Delegated User Not Authorized Contact USAC 81

82 E-File Issues Can log in, but can t view forms? Adobe Adobe version 7.0 or greater is required Pop-Up Blocker Please make sure that your internet Pop-up Blocker is off USAC Customer Service

83 Questions Fred Theobald Billing Manager, Finance To learn more, visit: 83