The Prepaid Press - March 2009 - (Page 6)

PREPAID BUSINESS March 15 · 2009 - 6 REGULATORY RUNDOWN by Ed Maldonado March 2009 2009. This, in combination with the recently approved Obama Stimulus Package allocating $7 billion to build and service Broadband networks in unserved and underserved regions, begs the question of who will is eligible to receive such subsidies. Traditionally, these types of subsidies were only available to the dominant ILECs, and, the diminishing number of CLEC providers that qualified as Eligible Telecommunication Provider (ETC). Should the FCC move upon the NARUC recommendations, the category of eligible providers may now expand to Interconnected VoIP Providers with data line resale capacity, or may cause a growth of ETC providers by Interconnected VoIP Providers looking to augment their revenues. Likewise, a FCC decision favoring the more traditional ETC model stands to breathe some renewed life into the progressively shrinking number of CELCs. Those Prepaid CLECs who offer prepaid reconnection after consumer disconnection from ILECs may also see new opportunities on the horizon. No matter which way the FCC finally rules, it is clear that USF subsidized Broadband Internet Access Service will implicate state regulation and oversight. Interconnected VoIP Providers, ETCs, Prepaid CLECs and traditional CLECs are well advised to diligently monitor the development of this FCC policy. by section 222 of the Act.” For those carriers affected by the Omnibus NAL, swift response to the FCC Enforcement Bureau is highly encouraged. Be prepared to document any arguments or statements given to the FCC in response to the NAL. If seeking reductions for the inability to pay the fine amount, tax returns and financial statements must be submitted to the FCC. In addition to the Omnibus NAL, the FCC Enforcement Bureau has also issued formal Citations for some carrier CPNI violations, and has issued NALs for providers that did not expressly state their policies or actions against data brokers, or summarize customer CPNI complaints, if there were any. The proposed forfeiture for improper certification has been in the area of two thousand dollars ($2,000) per incident. Citations have yet to be determined, as carriers are given opportunity to meet with the FCC Enforcement Bureau. Both Citations and FCC NALs are now being served upon the carriers, so be aware of any correspondence from the FCC through your Washington D.C. registered agents. As with the Omnibus NAL, affected carriers now have thirty (30) days to pay the full amount of the proposed forfeiture or file a written statement seeking reduction or cancellation of the proposed forfeiture. The issue of customer privacy and proprietary information is keenly developing as a hot topic of concern under the Obama Administration. Fundamental to several funding provisions of the President’s Economic Stimulus Program were several legislated assurances that the privacy of information will be affirmatively protected 1. Prepaid Telecom: Federal USF Contributions to Subsidize Broadband Access? NARUC Makes Recommendations to FCC WASHINGTON, D.C. (February 18, 2009) The winter meeting of the National Association of Regulatory Utility Commissioners (NARUC) has passed a resolution to encourage the Federal Communications Commission to implement No matter which way the FCC finally rules, it is clear that USF subsidized Broadband Internet Access Service will implicate state regulation and oversight. a pilot program for broadband internet access services for subsidies paid under the Universal Service Fund (USF). Entitled “Resolution on Lifeline and Link-up Program Support for Broadband Internet Access Services,” the resolution was sponsored by Commissioner Betty Ann Kane (District of Colombia Public Service Commission), which created some opposition among NARUC members but met eventual consensus. Specifically, the resolution recognized and stated that: 1. NARUC recognized the critical role that the FCC and State Lifeline and Link-Up programs have played in expanding subscribership of local telephone service to low income consumers; 2. NARUC believes that the availability and affordability of Broadband Internet Access Services to low income consumers is critical to the provision of public education, public health, public safety and other services by the States (as provided by the Communications Act of 1934 as amended); 3. NARUC strongly encouraged the FCC to declare Broadband Internet Access Services as a service eligible for the universal service support mechanisms for the Lifeline and Link-Up programs; 4. NARUC supports the establishment of a three-year federal Lifeline and Link-Up Pilot Program for Broadband Internet Access Services and enabling access devices; 5. NARUC asked the FCC to ensure that: (1) the Pilot Program will be open to all Broadband Internet Access Services providers, irrespective of whether they are an ETC (eligible telecommunication carrier) for the existing Lifeline and Link-Up programs, and that they will not be automatically designated as ETCs for other universal service support programs; (2) any Broadband Internet Access Service Provider which receives universal service support for other FCC Broadband programs within a state will also be required to participate in the Pilot Program within that State; and (3) all Broadband Internet Access Service Providers which are eligible to participate in any FCC Broadband program, including the Pilot Program, be required to make equitable financial contributions to support such programs; AND 6. NARUC asked the FCC to direct the FederalState Joint Board on Universal Service to conduct an evaluation of the Pilot Program during its implementation and to make recommendations regarding its continuation and configuration as a national program; 7. NARUC stated that because of the States’ significant experience in administering Lifeline and Link-Up programs for local telephone service the FCC should modify its proposed Pilot Program to allow States to administer the eligibility and verification procedures for low income participants in the Pilot Program. The resolution is significant in that the FCC is currently evaluating the subsidy of Broadband Internet Access as a part of the Universal Services subsidies under Lifeline (discounted rates on local phone service to low income consumers) and Link-Up (subsidized connection charges for low income consumers) programs With recent approval of the President’s broadband initiative as a part of the same stimulus package, CPNI compliance as it relates to carriers and interconnected VoIP providers may become more critical for the FCC and carriers alike. under proposed rulemaking and comment, issued this past November 2008. Both Lifeline and Link-Up programs are directly subsidized by contributions from telecommunication carriers and Interconnected VoIP Providers under Federal USF assessments contributed under the FCC Form 499-A and 499-Q. Prepaid Calling Card Providers currently pay such assessments based upon the face value of their cards. Mobile Carriers and Interconnected VoIP Providers pay such assessments based upon their services. The issue of where Federal USF contributions are allocated is poignant, as the filing deadline for Prepaid and VoIP carriers reporting USF Contributions under the FCC Form 499-A is April 1, 2. Prepaid Telecom: FCC Enforcement Crackdown - CPNI Certification. Hundreds of Carriers Found in Apparent Violation of CPNI Reporting WASHINGTON, D.C. (February 24, 2009) The Federal Communications Commission (FCC) Enforcement Bureau has issued an Omnibus Notice of Apparent Liability (NAL) to several hundred carriers for failure to submit their annual customer proprietary network information (“CPNI”) compliance certificate under Section 222 of the Communications Act of 1934; Section 64.2009(e) of the Commission’s rules; and pursuant to the FCC’s EPIC CPNI Order. The thrust of the violations is that the named carriers did not submit their CPNI Certifications within the required deadline or a significant period thereafter. Many of these carriers submitting their filings only after being served with a Letter of Inquiry from the FCC as to their lack of filing. Because of this, the FCC has initially concluded the in-actions of these carriers to be willful. The proposed monetary forfeiture set by the FCC for this type of violation is twenty thousand dollars ($20,000). These carriers now have thirty (30) days from the of the release date of this Omnibus NAL Order to pay the full amount of the proposed forfeiture or file a written statement seeking reduction or cancellation of the proposed forfeiture. Avid readers of Regulatory Rundown should not be surprised by this latest Omnibus NAL. Early tremors of a potential FCC enforcement action began on February 19th 2008 with a NAL proposed against CTC Communication (reported in the March 17th, 2008 issue of Regulatory Rundown); the May 2008 forfeiture and rescinded Order against Habla Communication for CPNI violations (reported in the June 15, 2008 issue of Regulatory Rundown under “CPNI: FCC Traffic Stops;” and culminating in the September 5, 2008 issuance of hundreds of Letters of Inquiry to carriers that had failed to file CPNI Certifications as of that date (reported in the September 15, 2008 issue of Regulatory Rundown). The issue should not be new to prepaid carriers, however, the level of aggressiveness has surprised some carriers – particularly small sized carriers now faced with responding to the FCC. The Omnibus NAL recognized that many of the carriers cited were small-sized businesses who may have had fiscal or operational constraints that needed to be brought to the FCC’s attention in evaluating the final forfeiture. However, law and regulation on this matter are clear: “Protection of CPNI is a fundamental obligation of all telecommunications carriers as provided The basis of these tracing challenges is that these payment systems can take many forms in

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The Prepaid Press - March 2009 Contents The Retske Report: A Disconnect in Connecticut Regulatory Rundown 5 Minutes With Brooks Smith, CEO of InComm TracFone Launches SafeLink Wireless in NY iPayStation Enables International Top-Up Comverse Launches Next-Generation IMS Solution Prepaid Companies Agree to Pay $2.25 Million Prepaid Telecom in Brief Boost Mobile Reintroduces Itself Virgin Mobile Announces New Branding Campaign The State of Prepaid Technology: Becoming a Virtual Operator Prepaid Wireless Roundup New Prepaid Calling Plans from Verizon Wireless The Legal Line Jobless Benefit Debit Card Usage Debated InsurCard Provides Catastrophic Relief Solution Metavante, Monitise Americas Launch Text Banking TransCard Provides Personal Financial Management Walmart to Help Americans Manage Finances Payments and Processing in Brief Prepaid Consumer and Employee/Partner Incentives CashStar Launches Interactive Gift Card Platform VIPGift Continues Sales Expansion Pentagon Installs Unique Card Personalization Line Digital Promotions Grow in Popularity The Ultimate Gift Card Network Retail Sales Show Unexpected Rebound Smart Transaction Systems Selects Hypercom GiftCards.com Acquires Swapagift.com InComm Gaming Opportunities on the Rise VCT Adds Equipment to New Jersey Facility Gift Cards and Promotions in Brief Our Advertisers Contact Us

The Prepaid Press - March 2009

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