On January 15, 2013, the Federal Communications Commission ("Commission") released a Second Report and Order ("Second Streamlining Order"), in IB Docket No. 04-112, in which the Commission continued to streamline the reporting obligations of international telecommunications carriers, by simplifying and minimizing the information that must be provided in certain international reports. As noted in Kelley Drye's May 20, 2011 Client Advisory, the Commission's First Report and Order and Further Notice of Proposed Rulemaking ("Streamlining Order and FNPRM"), issued in May 2011, eliminated a number of international carrier reporting requirements and streamlined the information to be provided in others. The Commission directed the International Bureau to create a new filing manual addressing the revised reporting requirements. Once the revised rules promulgated in the Second Streamlining Order take effect, most international telecommunications carriers will be required to file only the International Traffic and Revenue report and Circuit Status report (the "Annual International Reports") on an annual basis. It should be noted that the reporting requirements applicable to dominant carriers and submarine cable landing licensees were not eliminated by the Commission's Streamlining Orders.
The Second Streamlining Order's reporting and filing changes require approval by the Office of Management and Budget before the changes can take effect and the Commission will be issue a notice announcing the effective date of the rule changes. It is not known if the new rules will take effect in time for either annual filing deadline. The Commission expressly directed carriers to continue making filings pursuant to the existing international filing rules until the Commission announces the new reporting requirements have become effective and the new filing manual the International Bureau is to create takes effect.
Among other changes, the Second Streamlining Order further streamlines the information to be reported in the Annual International Reports and extends the International Traffic and Revenue Reporting requirement to some providers of Voice over Internet Protocol ("VoIP") service. The Commission also consolidated the Annual International Report requirements under new Commission rule Section 43.62. Further, the Commission established streamlined procedures for filers to use when requesting confidential treatment of information filed in the Annual International Reports.
Changes Applicable to Both Annual International Reports
Several of the Commission's revised reporting requirements are applicable to both Annual International Reports. The two Reports will now be governed by a single rule (Section 43.62), and the Commission will require the use of a single filing manual governing the details of the two Reports and of a new registration form that will be submitted with each Report. The Commission directed the International Bureau to establish and maintain a consolidated filing manual reflecting the rulings in the Second Streamlining Order – and subsequent revisions or updates shall be the subject of notice and comment provided by the Bureau.
The Commission will also require filers to submit a Registration Form, with each Report, containing basic contact information for the filer as well as, the first time it files under Section 43.62, a list of the filer's international section 214 authorizations and cable landing licenses and, on subsequent filings, a list of such authorizations obtained or which it no longer holds since the previous filing. Contrary to the Commission's initial proposal of a single filing date, the Annual International Reports will retain their separate filing deadlines of March 31 for the Circuit Status Report and July 31 for the International Traffic and Revenue Report.
The Commission also clarified that it will allow statistical sampling and other estimation procedures and techniques where actual counts of data are not possible, in order to provide the best data possible for its use.
Changes Specific to the International Traffic and Revenue Report
The Second Streamlining Order contained a number of changes specific to each report with the majority of the changes affecting the International Traffic and Revenue Report.
One of the most significant changes to the International Traffic and Revenue reporting obligation is the extension of the reporting requirement to providers of "one-way" or interconnected VoIP services between the United States and a foreign point, referred to by the Commission as "international VoIP service connected to the public switched telephone network" ("PSTN"). One-way VoIP providers are described as those that permit users to terminate calls to, but not receive calls originating from, the PSTN or that enable users to receive calls from, but not terminate calls to, the PSTN. In using its ancillary authority to extend the filing requirement to providers of international VoIP service connected to the PSTN, the Commission cited the increasing use of VoIP service in the international calling market and the Commission's need for the information necessary to administer its duties with respect to the U.S. international calling markets. In particular, the Commission noted that data regarding international VoIP service is important to several Commission responsibilities including ensuring cost savings are passed on to consumers, enabling U.S. service providers to obtain cost-based foreign termination rates, and evaluating mergers involving international calling services.
Other changes to the International Traffic and Revenue reporting requirements include, but are not limited to:
- the use of specific Commission-created filing schedules and the requirement of filers to complete a new Services Checklist concerning the provision of international telecommunications services;
- U.S. International Service Providers with less than $5 million in revenues from international calling services ("ICS") resale traffic and that do not provide facilities-based ICS, are not required to include resale-ICS on their annual report (The Commission also adopted a $5 million annual revenue threshold below which a carrier need not report "miscellaneous services");
- requiring filers to disaggregate world-total ICS traffic and revenue data for specific customer categories and routing arrangements such as residential/mass market, business/government, reoriginated foreign traffic and U.S. resellers;
- eliminating the requirement for filers to list destinations to which they provide ICS resale;
- requiring filers to report only the total number, in 64kbs-equivalent, of international private line services instead of disaggregating the data into six speed categories and requiring circuit data for private line service on a world-total basis only;
- requiring the reporting of disaggregated data, for minutes and settlement payments, between calls terminated on fixed line networks and those terminated on mobile networks when the termination rates are different;
- requiring filers to allocate their non-route-specific revenues to specific U.S. international routes; and identify such revenues as a percentage of customer revenue;
- requiring filers to report traditional transiting traffic only on a world total basis;
- eliminating the requirement to report billing codes, the number of IMTS messages carried, and to report regional totals; and
- requiring filers to file revisions/corrections, by October 31 of the filing year in which the original filing was made, for all values with errors exceeding one percent (1%).
Changes Specific to the Circuit Status Report
The Commission's changes to the Circuit Status Report are fewer in number but just as substantive as those applicable to International Traffic and Revenue Reports. The Commission highlighted the importance of collecting accurate and complete circuit data as such information is used, among other purposes, for establishing annual regulatory fee amounts, monitoring markets to prevent anticompetitive behavior, and developing policy positions for bilateral and multilateral negotiations. The Commission noted that the international transport market consists of capacity on terrestrial facilities, international submarine cables and satellites and streamlined the circuit status reporting requirements associated with these facilities.
Terrestrial and Satellite Circuits
Currently, only common carriers are required to report on the status of their circuits. However, noting that annual FCC regulatory fees are based on both common carrier terrestrial and satellite circuits and non-common carrier satellite circuits, the Commission extended the reporting requirement to include the common carrier terrestrial and satellite circuits of facilities-based common carriers and the non-common carrier circuits of satellite operators. The Commission also streamlined the reporting obligations by eliminating the requirements to report on the destination of circuits or the number of idle circuits and will now require these groups of providers to report world total aggregate active 64 kbps terrestrial and satellite circuits.
Submarine Cable Circuits
Similar to today's reporting of terrestrial and satellite circuits, currently only common carriers are required to report on submarine cable capacity. Recognizing that current reporting requirements collect information about only approximately ten percent (10%) of submarine cable capacity, the Commission's Second Streamlining Order requires the reporting of all submarine cable capacity, not just capacity used for common carrier services. Consequently, all cable landing licensees and common carriers with capacity on international submarine cables are required to report on both available and planned capacity on all such circuits. Reporting will be in STM-1 (Synchronous Transport Module level-1) units and by the type of ownership interest they have in that capacity, e.g., ownership, IRU, or inter-carrier lease. Filers will no longer have to report capacity on submarine cables as active or idle, but rather as activated (in use or available for immediate use) or non-activated.
Dominant Carrier Safeguard
The Commission will continue to collect quarterly route-specific circuit data from carriers on routes on which they are dominant, but it eliminated the requirement for such carriers to file derived circuits.
Confidential Treatment of Filings
The Commission acknowledged that disclosure of a filer's individual report data could result in competitive harm to the filer and created an abbreviated method for filers to use when requesting confidential treatment of reported data. Specifically, filers of both Annual International Reports will be able to designate information as confidential by selecting a checkbox on the certification forms that will accompany each filing and will not need to provide justification for the confidentiality request, unless and until someone requests access to the data.
For further information, please contact your Kelley Drye attorney or any other member of the firm's Communications practice group.