The Prepaid Press - November 15, 2007 - (Page 8)

GENERAL PREPAID November 15 · 2007 - 8 REGULATORY RUNDOWN by Ed Maldonado Wireline Broadband, LNP, Internet Taxes, and Stored Value Legislation 1. Third Circuit afﬁrms FCC’s decision on Wireline Broadband. October 17, 2007 (Philadelphia, PA) The United States Court of Appeals for the Third Circuit has ruled that the FCC’s Order that classiﬁed wireline broadband internet access service as an information service, and subject to limited federal regulation under Title I of the Communications Act, was based on a reasonable interpretation of the Communications Act and was a proper exercise of the agency’s discretion. Appeal of the original FCC Order was sought by several independent ISPs, telecoms, cable modem providers, and public interest advocates who challenged the effect of the Order as anti-competitive. Their argument was that telephone companies could effectively deny access to their broadband platforms and block out competition, thereby limiting the consumer’s choices for broadband internet service. The Appeals Court was unmoved by this argument. The Court’s ruling is signiﬁcant in that the tenor of the appellate court seems to be consistent in upholding decisions of the FCC where the FCC has distinguished voice from information services within a competitive market. The ruling is the latest in a series of ongoing appeals, in the D.C. and various Appellate Circuits, that have reinforced the FCC’s authority to craft a regulatory carve-out for interconnected VoIP providers and determine their status as USF contributors, under E-911 requirements, and now their relationships to traditional switched telephone common carriers. commerce until Nov. 1, 2014. The original law was enacted in 1998 and was previously extended in 2004 to end on November 1, 2007. The moratorium on e-commerce taxes enacted by the law has been widely hailed as beneﬁcial to both consumers and businesses alike. In particular, wireless providers have supported the extension as the new law now includes other forms of ecommerce beyond traditional web access and online shopping such as e-mail, voice and video messaging, and personal storage. Within the prepaid industry, many online distributors and retailers of prepaid telephony cards, PINs, DIDs, and wireless top-ups have enjoyed the beneﬁts of the tax-free environment of online sales. With the enactment of the “Internet Tax Freedom Act Amendment Acts of 2007,” these beneﬁts can continue until 2014. 4. Congress considers including Stored Value Cards in crime control legislation. October 31, 2007 (Washington, DC) Is it just another Bill sitting on Capitol Hill or will it go forward? Signiﬁcant changes to recognize stored value cards as monetary instruments were introduced on July 24, 2007 in H.R. 3156, under Section 338 of the “Violent Crime Control Act of 2007”. The House Bill and companion Senate Bill 1860 have had mixed industry support and are viewed as a Congressional attempt to deﬁne stored value cards through federal law. However, since Aug 10, 2007, the H.R. 3156l has sat in the House Judiciary Committee after being referred to the Subcommittee on Crime, Terrorism, and Homeland Security without clear indication if it is going forward. With the end of the congressional year drawing to a close, it is questionable whether the proposed changes under H.R. 3156 will pass before 2008 – if at all. In pertinent part H.R. 3156 seeks to amend Section 5312(a)(3)(D) of title 31, United States Code, by revising Section 338 to read; “As the Secretary of the Treasury shall provide by regulation for purposes of sections 5316 and 5331, stored value cards or other similar devices including funds or monetary value represented in digital electronics format (whether or not specially encrypted) and stored or capable of storage on electronic media in such a way as to be retrievable and transferable electronically.” Industry advocates, such as the Network Branded Prepaid Card Association, have openly opposed the bill, citing an array of inconsisten- 1. Third Circuit afﬁrms FCC’s decision on Wireline Broadband. 2. FCC Local Number Portability to be expanded to VoIP. 3. Ban on Internet Taxes extended. 4. Congress considers including Stored Value Cards in crime control legislation. The moratorium on E-commerce taxes enacted by the law has been widely hailed as beneﬁcial to both consumers and businesses alike. 2. FCC Local Number Portability to be expanded to VoIP. October 31, 2007 (Washington, DC) The FCC has issued an Order expanding the application of Local Number Portability to interconnected Voice over Internet Protocol providers and telecommunications carriers that obtain numbers for them. The FCC now seeks comment from the industry on additional VoIP numbering issues under a Notice of Proposed Rulemaking (FCC 07-188) that accompanied the Order. The substance of the Order addresses a number of well-know complaints by consumers as to their inability to port numbers to or from interconnected VoIP providers. Most signiﬁcant, the Order provides that telephone companies may not obstruct or delay number porting by demanding excess information from the customer’s new provider, and, speciﬁcally concludes that LNP validation for a simple number port should be based on no more than four ﬁelds: (1) 10-digit telephone number; (2) customer account number; (3) 5-digit zip code; and (4) pass code, if applicable. The Order also ensures that customers of small-sized wireline carriers can port their telephone numbers to wireless carriers under the same LNP criteria. The FCC has also tentatively concluded that its new rules should require carriers and interconnected VoIP providers to complete simple ports within 48 hours. While statements from Chairman Martin, Commissioners Copps, Tate, McDowell and Adelstein all denote that this action will only enhance a consumers’ ability to better choose providers, no consideration of VoIP services, such as prepaid consumer DIDs and the remote call forward services, that will likely be implicated under the expanded LNP rules was addressed by the Commission. How these emerging VoIP services will be treated will deﬁnitely be a substantial issue to be raised by the prepaid industry in the FCC comment process. Likewise, treatment of prepaid wireless numbers, and their portability implications, also stands to be a point of major comment from the prepaid industry. …the tenor of the appellate court seems to be consistent in upholding decisions of the FCC where the FCC has distinguished voice from information services within a competitive market. cies between traditional constructs of “monetary instruments” and the functionality of stored value cards. Furthermore, Section 338 is buried within legislation geared to crime control, and not direct on-point subject matter legislation as to the proper classiﬁcation of stored value cards. This could prove to be a double-edged sword for the regulatory treatment of stored value cards. While Congress may be hesitant to indirectly pass treatment of stored value card services in this Bill, crime control bills tend to bullet through Congress in the ﬁnal hours of the session as Congressmen rush out the door before the holidays. Industry participants are well advised to keep an eye on this Bill and its status. Full Bill tracking is found at: http://www.govtrack.us/congress/bill.xpd?bill=h110-3156 Attorney Edward A. Maldonado is the president of the Regnum Group, Inc. and the Maldonado Group, and can be reached at eam@maldonado-group.com 3. Ban on Internet Taxes extended. October 31, 2007 (Washington, DC) President Bush has signed H.R. 3678, known as the “Internet Tax Freedom Act Amendment Acts of 2007,” into law. The law prohibits multiple and discriminatory federal taxes on electronic http://www.ivr.com http://www.govtrack.us/congress/bill.xpd?bill=h110-3156 http://www.govtrack.us/congress/bill.xpd?bill=h110-3156 http://www.ivr.com http://www.ivr.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - November 15, 2007

The Prepaid Press - November 15, 2007 Online Wireless Recharge It's a Wrap for Gift Cards Contents GENERAL PREPAID Prepaid 101: Merchandising Regulatory Rundown: Wireless Broadband, LNP, Internet Taxes, and Stored Value Legislation Guest Editorial: Honest Minutes: "The Times They Are A-Changing" 5 Minutes With Daniel Neal, CEO of kajeet The Legal Line Prepaid Wireless Roundup WIRELESS Wireless in Brief 011 Mobile Launches Mobile International Dialing Hop-on Adds GSM Phone to Product Line Virgin Mobile USA Launches New Services kajeet Adds to Handset Line MarketStar Publishes Mobile Phone Usage Study Nokia and Cellfire Team Up Verizon Selects Firethorn iVisionMobile Launches Messaging Platform Sprint Expands "Unlimited by Boost" INTERNATIONAL Spot Rates NOMAD Brings MasterCard EMS to Europe R&M Finds Potential in Africa International in Brief TELECOM & TECHNOLOGY Caveat Emptor When Negotiating IP Licensing T&T in Brief MySpace and Skype Ink Deal Octastic Announces New Media Gateway DSP Pactolus Selected by Global Crossing Tadiran Announces New Loyalty Incentive Program Oblio Telecom Launches New Prepaid Products Total Call Enhances Prepaid Calling Cards PAYMENTS A Gift Card Technology Guide Pinnacle and PaySpot Roll Out POS/Prepaid Solution TIO Networks Announces Membership Program TransFund$ Partners with TruckersB2B AMR Finds Retailers Returning to Main Street Payments in Brief Diebold to Offer Prepaid Gift Card Technology InComm to Sell nFinanSe Discover Cards iVisionMobile Offers Retailers Mobile Payments i2c to Offer Stored Value Webinars Mobilians Starts U.S. Mobile Payments Operation NetSpend Increases Savings Program Interest EXTRAS Classifieds Contact Us Our Advertisers

The Prepaid Press - November 15, 2007

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