The Comm Law Group The Comm pliance Group, Inc.

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1 MOBILE VIRTUAL NETWORK OPERATOR REGULATORY COMPLIANCE MANUAL Prepared and maintained by: The CommLaw Group Tel: (703) And its affiliated consulting firm: The Commpliance Group, Inc. Regulatory Compliance Guide for Mobile Virtual Network Operator ( MVNO ) Providers Tel: (703) mail@commpliancegroup.com

2 2015, All Rights Reserved The CommLaw Group This Manual reflects material changes in the laws, rules and regulations applicable to Wireless Services Providers as of May Should you have questions about this Manual or seek legal counsel, please contact: Jonathan S. Marashlian, Esq. Managing Partner Marashlian & Donahue, LLC Tel: (703) No part of the material contained herein may be reproduced by any mechanical, photographic, or electronic process, or in the form of a photographic recording, nor may it be stored in a retrieval system, transmitted or otherwise copied for private, public or commercial use, reposted, disclosed, or redistributed, without prior written permission from the copyright holders. LEGAL NOTICES & DISCLAIMERS This Manual has been prepared for informational purposes only and is not for the purpose of providing legal advice. Your use of this Manual does not create an attorney-client relationship between Marashlian & Donahue, LLC and you. You should not act upon the information set forth herein without seeking professional counsel. The information in the Manual is not guaranteed or promised to be current. Federal and state laws and regulations governing telecommunications services are subject to change through legislation, court decisions, and regulatory decisions, policy shifts and rulemakings. Many such changes are often subject to adequate advance public notice before taking effect allowing time to adjust to any new requirements. However, recently, some changes are being effected with little or no advance notice. Due to the rapid pace of regulatory change impacting telecommunications services, before any major initiatives are undertaken the most prudent practice is to check on the current status of any applicable laws and regulations that may apply. Some of the content on this document may be considered Attorney Advertising under the applicable rules of certain states. Prior results do not guarantee a similar outcome.

3 Table of Contents I. U.S. Compliance Framework... 1 A. Federal Regime Federal Regulatory Compliance... 1 B. State Regime State Regulatory Compliance State Corporate Compliance State (and Local) Tax Compliance... 3 II. FEDERAL REGULATIONS SUMMARY AND DISTINGUISHING COMMON CARRIER vs. PRIVATE CARRIER REQUIREMENTS... 4 A. E911 Requirements... 6 B. Communications Assistance for Law Enforcement Act (CALEA)... 7 C. International 214 Authority... 9 D. Universal Service Fund (USF) E. Customer Proprietary Network Information (CPNI) F. Communications and Video Accessibility Act of 2010 (CVAA) G. North American Numbering Plan (NANP) H. Local Number Portability (LNP) I. Hearing Aid Compatibility J. International Traffic Report K. Network Neutrality Rules L. Outage Reporting Rules M. Truth in Billing Rules N. Service Discontinuance Rules III. FEDERAL REGULATORY COMPLIANCE - SPECIFICS A. Licensing & Registration B. Customer Proprietary Network Information (CPNI) C. Communications Assistance For Law Enforcement act (CALEA) D. Emergency Services (E911) E. Universal Service Fund (USF) F. Telecommunications Relay Service (TRS)... 33

4 Page 2 G. Twenty-First Century Communications and Video Accessibility Act (CVAA) H. Hearing Aid Compatibility Requirements I. Additional Federal Contribution Requirements J. International Traffic & Revenue Reporting K. Network Neutrality Commercial Terms Performance Characteristics Network Practices L. Outage Reporting M. Service Discontinuance N. Consumer Protection Requirements IV. STATE REGULATORY COMPLIANCE SPECIFICS A. PUC Registrations B. Registration and Payment Obligations State Fees and Programs Generally State USF Fees TRS Fees E911 Fees... 53

5 I. U.S. Compliance Framework In the United States, providers of communications services face a three-pronged regime for legal compliance. At both the federal and state levels, providers face regulatory, corporate and tax obligations. Each of these obligations is touched upon in this Compliance Manual. However, the core focus of this MVNO Compliance Manual is on federal and state regulatory compliance before the Federal Communications Commission ( FCC or Commission ) and State Public Utility Commissions ( PUCs ). A. Federal Regime 1. Federal Regulatory Compliance The degree to which a particular service will be subject to federal regulation depends upon the FCC s classification of the service. The Communications Act defines the term telecommunications service as the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used. 1 A telecommunications service classification renders the entity a "common carrier," subject to the full range of Title II regulations, including: disability access ("CVAA")/telecommunications relay services ( TRS ) requirements, CPNI requirements, E911 mandates, CALEA requirements, local number portability ( LNP ) and North American Numbering Plan ( NANP ) administration support and annual FCC regulatory fee payments, among other obligations. In addition, as common carriers, telecommunications service providers may be subject to state regulatory and tax obligations. Providers that merely offer "telecommunications" (not "telecommunications services") are considered private carriers. Private carriers offer services to select customers based upon individually negotiated terms. Private carriers must comply with CALEA, contribute to the USF and make FCC regulatory fee payments, but are exempt from contributing to TRS, NANP, and LNP (collectively the "other Title II Funds"). 2 CAUTION! The legal determination as to whether a particular service provider is operating as a private carrier vs. common carrier and/or offering particular services as private carriage, is a highly fact-intensive, complex and potentially highrisk matter. We caution any service provider against making self-determinations absent consultation with experienced telecommunications counsel. The consequences of reaching the incorrect conclusion can be significant and very costly U.S.C. 153(46). 2 The Commission s jurisdiction under Title II is limited solely to practices that are undertaken (1) by a carrier while engaged as a common carrier and (2) for and in connection with such common carrier services. 47 U.S.C. 153(10). The Commission s jurisdiction under Title II does not extend to services provided on a private carriage basis, even if provided by a common carrier. NARUC v. FCC, 533 F.2d 601, 608 (D.C. Cir. 1976). The Act does authorize the Commission to extend contribution obligations to any other provider of interstate telecommunications. 47 U.S.C. 254(d). The Commission has required both common carriers and private service providers to contribute to the USF, but private carriers are not required to contribute to other support mechanisms (i.e. LNP, NANP and TRS). See Federal-State Joint Board on Universal Service, CC Docket No , 12 FCC Rcd 8776, , 795 (1997).