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FEB 2 9 Z01Z ~t&O UNITED STATES COURT OF APPEAL FEB 19 ZOll

RECEIVED FOR THE DISTRICT OF COLUMBIA CIR UI't-I:"i---__ -'

THE CONFERENCE GROUP, LLC,

Petitioner,

v.

) ) ) )

-

~ Case No. 12-1124 ) )

CLERK

FEDERAL COMMUNICATIONS COMMISSION and THE UNITED STATES OF AMERICA, ) PETITION FOR REVIEW

IIMIn:n ~TATr:~ rOII&rr m: APpe=al ~

Respondents. ) )

--------------------------)

Pursuant to 47 U.S.C. § 402(a), 28 U.S.C. §§ 2342 and 2344, and Rule 15(a)

of the Federal Rules of Appellate Procedure, The Conference Group, LLC ("The

Conference Group") hereby petitions the Court for review of the Federal

Communications Commission ("FCC") decision In the matter of Request for

Review by InterCall, Inc. of Decision of Universal Service Administrator, CC

Docket No. 96-45: Order, 23 FCC Rcd. 10731 (released June 30, 2008) (the

"InterCall Order"). The Conference Group, along with other parties, timely

sought reconsideration of the InterCall Order, which reconsideration was denied

by the FCC in Petitions for Reconsideration and Clarification of the Intercall

Order, Order on Reconsideration, 2012 WL 258204 (released January 27, 2012)

(collectively, the "Orders"). The Orders are attached as exhibits.

Venue is proper under 28 U.S.C. § 2343.

liM

USCA Case #12-1124 Document #1361131 Filed: 02/29/2012 of 24

The Conference Group seeks relief from the Intercall Order on the grounds

that the FCC acted beyond its statutory jurisdiction, authority and limitations, and

the InterCall Order is arbitrary, capricious, and not in accordance with law.

Therefore, The Conference Group petitions the Court to hold that the Order

is unlawful, find that vacatur is appropriate in light of the seriousness of its

deficiency, and compel the FCC to act in accordance with its prior precedent and

the evidence submitted in the underlying proceeding that audio bridge

conferencing companies are end users of telecommunications services as opposed

to providers of telecommunications services for purposes of universal service fund

obligations.

February 29,2012

Respectfully submitted,

THE CONFERENCE GROUP, LLC .

Ross A. Buntrock Michael B. Hazzard Arent Fox LLP 1050 Connecticut Avenue, N.W. Washington, D.C. 20036 (202) 775-5734 (202) 857-6395 (fax)

Attorneys for The Conference Group, LLC

2


CERTIFICATE OF SERVICE

Pursuant to Federal Rule of Appellate Procedure 15(c)(l), I hereby certify that on this 29th day of February, 2012, I have caused the foregoing Petition for Review to be delivered via first-class mail, postage prepaid, to each of the following parties admitted to participate in the agency proceedings:

Brad E. Mutschelknaus Steven A. Augustino Denise N. Smith Kelley Drye & Warren LLP 3050 K Street, N.W. Suite 400 Washington, DC 20007 Counsel to InterCall, Inc.

Cathy Carpino Gary Phillips Paul K. Mancini AT&T Inc. 1120 20th Street, N.W. Suite 1000 Washington, DC 200036 Counsel to AT&T Inc.

Karen Zacharia Christopher M. Miller Verizon 1515 North Courthouse Road Suite 500 Arlington, VA 22201-2909 Attorneys for Verizon

Craig J. Brown Tiffany W. Smink Qwest Communications International, Inc. 607 14th Street, N.W. Suite 950 Washington, DC 20005 Counsel to Qwest


Charles V. Gerkin, Jr. Charles A. Hudak Friend, Hudak & Harris, LLP Three Ravinia Drive Suite 1450 Atlanta, GA 30346-2117 Counsel to Premiere Global Services, Inc.

William E. Snow Catherine N. Smith Chiampou Travis Besaw & Kershner LLP 45 Bryant Wood North Amherst, NY 14228 Tax Representatives ojCanopco, Inc. (U.S.)

Elliott M. Gold, President Telespan Publishing Corporation 50 West Palm Street Altadena, CA 91001-4337

Scott Brian Clark James A. Stenger Thelen Reid Brown Raysman & Steiner, LLP 701 Eighth Street, N.W. Washington, D.C. 20001 Counsel to Genesys SA

Scott Blake Harris Brita Dagmar Strandberg Linda Coffin Harris, Wiltshire & Grannis 1200 18th Street, N.W. Washington, D.C. 20036 Counsel to Cisco Systems, Inc.


Kenneth C. Johnson Bennet & Bennet, PLLC 4350 East West Highway Suite 201 Bethesda, MD 20814 Counsel to Multi-Point Communications

Glenn S. Richards Executive Director Voice on the Net Coalition c/o Pillsbury Winthrop Shaw Pittman LLP 2300 N Street, N.W. Washington, D.C. 20037-1122

Tad Lewis GuidePoint Law PLLC 600 Steward Street Suite 1414 Seattle, WA 98101 Counsel to Encounter Collaborative Group

Mark J. O'Connor Jennifer P. Bagg Lampert, O'Connor & Johnston, P.C. 1776 K Street, N.W. Suite 700 Washington, D.C. 20006 Counsel to Global Conference Partners

Danielle Coffey Mark Uncapher Brian Scarpelli Telecommunications Industry Association 10 G Street, N.E. Suite 550 Washington, D.C. 20002


Eric H. Holder, Jr. Attorney General U.S. Department of Justice 950 Pennsylvania Avenue, N.W. Washington, D.C. 20530

Austin Schlick Office of General Counsel Federal Communications Commission 445 12th Street, SW Washington, D.C. 20554

Michael B. Hazzard


EXHIBIT 1

In the matter of Request for Review by InterCall, Inc. of Decision of Universal Service Administrator, CC Docket No. 96-45: Order, 23 FCC Red. 10731

(released June 30, 2008)


IN THE MATTER OF REQUEST FOR REVIEW BY ... , 23 F.C.C.R.10731 ...

23 F.C.C.R. 10731, 23 FCC Red. 10731 (F.C.C.), 45 Communications

Reg. (P&F) 593 (F.C.C.), 2008 WL 2597359 (F.C.C.)

Federal Communications Commission (F.C.C.)

Order

IN THE MATTER OF REQUEST FOR REVIEW BY INTERCALL,

INC. OF DECISION OF UNIVERSAL SERVICE ADMINISTRATOR

**1 *10731 By the Commission:

CC Docket No. 96-45

FCC 08-160

Adopted: June 27, 2008

Released: June 30, 2008

I. INTRODUCTION

1. In this order, we deny in part and grant in part a request for review filed by InterCall, Inc. (InterCall) of a Universal Service Administrative Company (USAC) decision finding that the audio bridging services offered by InterCall are "toll

teleconferencing" services and that InterCall must contribute directly to the universal service fund (USF) based on revenues

from these services. 1 As discussed more fully below, the audio bridging services InterCall provides are equivalent to

teleconferencing services and are ''telecommunications'' under the Telecommunications Act of 1996 (1996 Act) and the

Universal Service First Report and Order. 2 Providers of these services must contribute directly to the USF based on revenues

from these services; therefore, we deny InterCall's request to reverse USAC's decision in this respect. We, however, grant

InterCall's request and reverse USAC's decision requiring InterCall to contribute based on past revenues. Instead, InterCall must

contribute directly to the USF beginning as of the calendar quarter immediately following the next scheduled FCC Form 499-

Q filing after the release date of this order. We further direct USAC to ensure that all similarly situated audio bridging service

providers contribute directly to the USF beginning as of this same time frame.

II. BACKGROUND

2. Section 254(d) of the Communications Act of 1934, as amended (the Act), directs that "[e]very telecommunications carrier

that provides interstate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, to the

specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service." 3

Section 254(d) further *10732 provides that "[a]ny other provider of interstate telecommunications may be required to

contribute to the preservation and advancement of universal service if the public interest so requires." 4 To this end, the

Commission has determined that private service providers that provide interstate telecommunications to others for a fee must

contribute, based on interstate and international end-user telecommunications revenues, to the USF. 5 The Commission also recognized that "[b lasing contributions on end-user revenues ... will relieve wholesale carriers from contributing directly to

the support mechanisms" because these carrier's carriers do not earn revenues directly from end-users. 6 Instead, the reseller

that provides the service to the end user and thereby earns end-user revenues must contribute directly to the USF. 7

**2 3. In the Second Order on Reconsideration, the Commission set forth the specific methodology for contributors to use

to compute their USF contributions. 8 In instructions to the FCC Form 499-A and 499-Q contribution forms adopted in that

order, the Commission provided additional details to contributors to promote compliance with the program's requirements. 9

Over the years, as the Commission has made changes and further clarified contribution obligations, the form instructions have

been revised to reflect those decisions, 10 as well as other administratively necessary changes. 11



4. Consistent with its periodic updates, the Common Carrier Bureau (Bureau), in 2002, revised the FCC Form 499-A and 499-Q

instructions. 12 As part of that process, the Bureau specifically included toll teleconferencing as one ofthe illustrative examples

of telecommunications that were subject to direct USF contributions. 13

*10733 5. In 2007, USAC initiated an audit of InterCall. As part of this audit, InterCall entered into discussions with USAC

concerning the proper treatment of revenues from audio bridging services. 14 On January 15,2008, USAC issued a decision

finding, among other things, that the audio bridging services provided by InterCall are toll teleconferencing services, and are,

therefore, subject to direct USF contribution obligations. 15 As a result, USAC required InterCall to file past FCC Form 499s

as well as Forms 499-Q and 499-A on a going forward basis. 16

6. On February 1,2008, InterCall filed a request for review of the InterCall USAC Decision, asserting that stand-alone audio

bridging service providers are not required to contribute directly to the USF, and on February 5, 2008, InterCall requested a

stay of the InterCall USAC Decision. 17 InterCall contends that USAC acted outside the scope of its authority in violation of

section 54. 702( c) of the Commission's rules, which requires USAC to seek guidance from the Commission where the Act or the

Commission's rules are not clear or do not address a particular situation. 18 InterCall also asserts that its audio bridging service

is an information service and it is not obligated to directly contribute to the USF. 19 InterCall argues that, even if audio bridging

services are considered telecommunications, InterCall and other stand-alone audio bridging service providers are not subject to

common carrier regulations and are thus not subject to the mandatory contribution obligations contained in section 254( d) of

the Act. 20 Rather, InterCall asserts, they fall into the category of "other providers of telecommunications," which can only be

subject to a direct USF contribution obligation upon a showing that their inclusion is in the public interest. 21 InterCall relies on

the Commission's Qwest v. Farmers Order to argue that providers of conferencing services are end users of telecommunications

and are not liable for direct USF contributions. 22

*10734 III. DISCUSSION **3 7. In this order, we deny in part and grant in part the InterCall Request for Review, as detailed below. We find that the audio

bridging services provided by InterCall are telecommunications. Although the record does not permit a clear determination of whether InterCall provides telecommunications on a common carrier or private carrier basis, we find that in either case InterCall

must contribute directly to the USF. To the extent that InterCall provides telecommunications on a non-common carrier basis,

we find that InterCall is operating as a private service provider, which the Commission required under its permissive authority

to contribute directly to the USF in the Universal Service First Report and Order. 23 To the extent that InterCall provides

telecommunications on a common carrier basis, we find that InterCall is providing a telecommunications service and must,

therefore, directly contribute to the USF pursuant to the mandatory contribution requirement of section 254( d) of the Act. 24

Consequently, as a provider of telecommunications, InterCall has a direct contribution obligation and is required to file FCC

Forms 499-A and 499-Q. 25

8. We find, however, that it was unclear to InterCall and to the industry that stand-alone audio bridging providers have a direct USF contribution obligation. Based on the record before us, we require that InterCall report its revenues and directly contribute

to the USF based on these telecommunications revenues on a going-forward basis. The record in this proceeding demonstrates an industry-wide understanding and practice of stand-alone audio bridging providers indirectly contributing to the USF through

universal service contributions assessed on them by their underlying providers. 26 Due to this lack of clarity regarding stand

alone audio bridging providers' direct contribution obligation, we reverse USAC's decision requiring InterCall to file FCC Forms 499-A and 499-Q for past periods. Given the unique circumstances, we grant InterCall's request that USAC's decision

be applied on a going-forward basis. 27

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IN THE MATTER OF REQUEST FOR REVIEW BY ... , 23 F.C.C.R.10731 .•.

9. Finally, we direct USAC to conduct outreach to both stand-alone audio bridging providers and integrated teleconferencing

service providers within thirty (30) calendar days of the effective date of this order, to ensure that such providers properly

contribute directly to the USF based on their interstate and international end user revenues derived from providing these services.

A. InterCall as a Provider of Telecommunications is Required to Contribute to USF

10. Telecommunications. The Act defmes telecommunications as "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." 28

As InterCall explains in its request for review, it markets audio, web, and video conferencing services that allow multiple end

users to communicate and collaborate with each other using telephone lines through an audio bridge, which links multiple

callers together. 29

**4 11. We find that the service described by InterCall is telecommunications. As the Commission has recognized, "the heart

of 'telecommunications' is transmission." 30 InterCall's service allows end *10735 users to transmit a call (using telephone

lines), to a point specified by the user (the conference bridge), without change in the form or content ofthe information as sent

and received (voice transmission).31 The existence of a bridge that users dial into does not alter this classification. Rather,

the purpose and function of the bridge is simply to facilitate the routing of ordinary telephone calls. As the Commission has previously determined in performing similar analysis, this results in "no more than the creation of the transmission channel

chosen by the customer." 32

12. In addition, the Commission has previously found that the features offered in conjunction with InterCall's service are not

"integrated" and thus do not change a service from telecommunications to an information service. 33 These features perform

validation functions, collect billing and participant information, and enable the participants to record, delete playback, mute and

unmute, and access operator assistance. 34 Providers that offer their services for a fee must collect billing and other information

to properly invoice their customers for the services they have provided. Such information is commonly gathered in the form of

minutes of use. The Commission has determined that "data concerning a customer's usage may be gathered, stored, processed and provided to a customer in the form of an itemized bill or a traffic management study as part of basic service" and this does

not convert the service to an information service. 35

13. Similarly, the other features offered in conjunction with InterCall's conferencing service, such as muting, recording,

erasing, and accessing operator services, do not alter the fundamental character of InterCall's telecommunications offering so

that the entire offering becomes an information service. 36 Consistent with the decision in the Prepaid Calling Card Order, these separate capabilities are part of a package in which the customer can still conduct its conference call with or without

accessing these features. 37 These features, therefore, are not sufficiently integrated into the offering to convert the offering

into an information service. 38 For these reasons, we fmd that, in providing is audio bridging service, InterCall is providing

telecommunications, and the service is not an information service.

14. Provider of telecommunications. Contrary to InterCall's assertions, as a provider of telecommunications, Commission

precedent requires InterCall and similarly-situated stand-alone audio bridging service providers to contribute directly to the

USF.

*10736 15. InterCall argues that stand-alone audio bridging service providers are not, and have never been, treated as

common carriers by the Commission. 39 Instead, InterCall contends that, if the Commission finds that InterCall is providing

telecommunications, it would only have an obligation to contribute under the Commission's permissive authority in section

254( d) of the Act as an "other provider of telecommunications." 40 InterCall asserts that, before a direct contribution obligation

can be imposed on InterCall under the Commission's permissive authority, the Commission would have to initiate a proceeding

to determine whether the public interest would be served by requiring stand-alone audio bridging service providers to contribute

directly.41 InterCall is incorrect.

3



**5 16. In the Universal Service First Report and Order, the Commission addressed under what authority entities would be

required to contribute directly to the USF. 42 In concurring with the Federal-State Joint Board on Universal Service's (Joint Board) recommendation, the Commission found that only common carriers would be required to contribute under the mandatory

contribution obligation of section 254( d) of the Act. 43

17. The Commission, however, exercised its permissive authority to subject to direct USF contribution requirements providers

that offer telecommunications to others for a fee on a private contractual or private carriage basis. 44 The Commission reasoned that, having all entities that provide telecommunications to others for a fee contribute would ensure that the mechanism operated in a competitively-neutral manner, a requirement adopted by the Commission in the Universal Service

First Report and Order. 45 InterCall does not dispute that its services are provided for a fee,46 and, because InterCall is offering telecommunications, InterCall is required to directly contribute to the USF pursuant to the Commission's decision in

the Universal Service First Report and Order. 47 Indeed, all similarly situated stand-alone audio bridging service providers that offer their services to others for a fee are also providers of telecommunications and subject to a direct USF contribution obligation.

18. Although we base our finding on the Commission's prior exercise of its section 254(d) permissive authority with respect to private service providers, we do so, in part, because the record does not clearly indicate whether InterCall provides telecommunications on a private carriage or common carriage basis. If InterCall provides telecommunications on a common carrier basis, InterCall is providing a telecommunications service and, therefore, would be required to directly contribute to the

USF pursuant to the mandatory contribution requirement of section 254( d) of the Act. 48

*10737 19. We disagree with InterCall's claims that the Commission has found that conference calling providers are end

users for purposes ofUSF contribution obligations. 49 In Jefferson Telephone Company, the Commission stated that a service

provider constituted an end user when it provided a free "chat-line" service that randomly paired callers with one another. 50 Specifically, the Commission found that International Audiotext Networks (IAN) was not a provider of telecommunications, but an "information provider" and an end user customer of Jefferson Telephone Company based on the chat-line service it

provided. 51 Unlike IAN's service, InterCall describes its service as one that brings together specific participants to talk with

one another through the use of its audio bridge. 52 InterCall's service, therefore, does not randomly pair callers in a free chatline environment. As we stated above, the service provided by InterCall meets the definition of telecommunications, which

requires that the transmission be routed "between or among points specified by the user." 53

**6 20. Additionally, contrary to InterCall's assertion, the Call Blocking Decision did not conclude that conference calling

providers are end users. 54 Rather, in that decision the Bureau was reciting the underlying facts "as alleged by the carriers," 55 and, in the passage cited by InterCall, the Bureau did not make a fmding that these providers were end users.

21. Similarly, InterCall's -attempts to cast the decision in the Qwest v. Farmers Order as evidence that the Commission has determined that conference calling companies are end users is misplaced. As in the Call Blocking Decision, the Commission was assuming certain facts in the case as the parties presented them. Specifically, the Commission's statement that conference calling

companies are end users was premised on Farmer's assertion that this was how they were defined in Farmer's tariff. 56 Moreover, as Verizon notes, the holding in the Qwest v. Farmers Order is subject to reconsideration on the factual issue of whether the

conference calling companies were end users under Farmer's tariffs. 57 We, therefore, conclude that the prior precedent cited by InterCall does not support a finding that InterCall is an end user for purposes of direct USF contribution obligations. Rather, InterCall and other similarly-situated audio bridging service providers are providers of telecommunications, and, as such, have

an obligation to directly contribute to USF. 58

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IN THE MATTER OF REQUEST FOR REVIEW BY ••. , 23 F.C.C.R. 10731 ...

22. We note that a company may be classified as an end user due to its role in obtaining telecommunications services. 59

However, that classification in the context of purchasing *10738 telecommunications does not, in tum, preclude the provider

from also being a telecommunications provider in terms of its USF contribution obligations. 60 We therefore find that stand

alone audio bridging service providers are providers of telecommunications that are required to contribute directly to the USF. 61

B. Implementation

23. The record before us indicates that it was unclear to InterCall, as well as to the industry, that stand-alone providers of audio bridging services have a direct USF contribution obligation. InterCall's practice of contributing indirectly rather than

directly to the USF has been consistent with other similarly-situated stand-alone audio bridging providers. 62 The record,

moreover, reflects that wnolesale providers of services to stand-alone audio bridging service providers have treated these

providers as end users and have assessed universal service contribution fees on them on this basis. 63 Further, as InterCall notes,

actions (or the lack thereot) in certain Commission proceedings may have contributed to the industry's unclear understanding

of stand-alone audio bridging providers' direct contribution obligation. 64 For instance, InterCall notes that the Commission

engaged in enforcement investigations without issuing concrete findings on the USF contribution obligation of similarly-situated

conference calling providers, and issued orders that assumed as fact the terms of underlying carriers' tariffs regarding the end

user status of stand-alone audio bridging providers. 65

**7 24. In part because of the lack of clarity regarding the direct contribution obligations of stand-alone audio bridging service providers that these actions may have created, we find that prospective application of our decision is warranted. We

note that there is consensus among the commenters on InterCall's petition that any direct contribution requirement for stand-

alone audio bringing providers should apply to future filings. 66 We agree with the consensus of the commenters that, in this

unique *10739 instance, requiring direct contributions on a going-forward basis will best serve the interests of all parties to this

proceeding. 67 Therefore, we reverse USAC's decision requiring InterCall to file FCC Forms 499-A and 499-Q for past periods,

and instead require InterCall to directly contribute to the USF as ofthe calendar quarter immediately following the next regularly

scheduled FCC Form 499-Q filing after the release date of this order. To this end, InterCall must properly include its end-user

telecommunications revenues on all future FCC Form 499-Q and FCC Form 499-A filings for the corresponding time period.

25. Today we make clear that providers of these services have a direct contribution obligation. We further find that a

uniform application ofUSF contribution obligations to all audio bridging service providers will promote the public interest by

establishing a level playing field and encouraging open competition among providers of audio bridging services. 68 We therefore

direct USAC to implement the findings in this order with respect to all audio bridging service providers, regardless of whether

the service is provided on a stand-alone or an integrated basis. We find that, to the extent audio bridging and teleconferencing

service providers have end user revenues sufficient for direct contribution obligations, USAC should instruct the providers to register for an FCC Filer ID, and begin submitting quarterly and annual FCC Form 499s consistent with this decision.

26. We reiterate that all similarly-situated providers, i.e., stand-alone teleconferencing providers as well as integrated

teleconferencing providers, are, at a minimum, providers of telecommunications for the purposes of contributing to the universal service fund, and we direct USAC to ensure that such providers properly reflect the revenues from these telecommunications

in all future FCC Form 499-Q and FCC Form 499-A filings. Finally, we direct USAC to conduct targeted outreach efforts to

all providers of audio bridging services (stand-alone and integrated) within thirty (30) calendar days of this order to assist such

providers in obtaining FCC Filer IDs and filing FCC Forms 499-Q and FCC Forms 499-A, consistent with the Commission's requirements.

*10740 IV. ORDERING CLAUSES

27. Accordingly, IT IS ORDERED, pursuant to sections 1, 4(i), 5(c), 201, 202, and 254 of the Communications Act of 1934,

as amended, 47 U.S.C. §§ 151, 154(i), 155(c), 201, 202, and 254, and sections 54.719 and 54.722 of the Commission's rules,

47 C.F.R. §§ 54.719 and 54.722, that InterCall's Request for Review IS DENIED IN PART, and GRANTED IN PART.

VVestlavvNext" @ 2012 Thomson Reuters. No claim to ""I"!""qn,,,,! U.S. Govemrnent Works. 5



**8 28. IT IS FURTHER ORDERED that InterCall's Petition for Stay is DISMISSED.

29. IT IS FURTHER ORDERED, pursuantto sections 1.103(a) and 1.4(b)(2) of the Commission's rules, 47 C.F.R. §§ 1.103(a),

l.4(b )(2), that this order SHALL BE EFFECTIVE upon release.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

**9 AT&T Inc. (AT&T)

Canopco, Inc. (U.S.) (Canopco)

Genesys SA (Genesys)

Premiere Global Services, Inc. (premiere)

*10741 APPENDIX

Comments Filed:

Qwest Communications International Inc. (Qwest)

TeleSpan Publishing Corporation (TeleSpan)

Verizon

Reply Comments Filed: Genesys SA (Genesys)

Global Conference Partners (GCP)

InterCall, Inc. (InterCall)

Premiere Global Services, Inc. (premiere)

Verizon

Footnotes 1 Request for Review by InterCall, Inc. of Decision of the Universal Service Administrator, CC Docket No. 96-45, (filed Feb. 1,2008)

(lnterCall Request for Review).

2 See 47 U.S.C. § 153(43); Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) (1996 Act). The 1996 Act

amended the Communications Act of 1934. Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and

Order, 12 FCC Rcd 8776 (1997) (Universal Service First Report and Order), as corrected by Federal-State Joint Board on Universal

Service, CC Docket No. 96-45, Errata, FCC 97-157 (reI. June 4, 1997), a./J'd in part, rev'd in part, remanded in part sub nom, Texas

Office o/Public Utility Counsel v. FCC, 183 F.3d 393 (5th Cir. 1999), cert. denied, 530 U.S. 1210 (2000), cert. dismissed, 531 U.S.

975 (2000).

3 47 U.S.C. § 254(d).

4 Id

5 Universal Service First Report and Order, 12 FCC Rcd at 9183-84, para. 795. The Commission also requires certain other providers

of interstate telecommunications to contribute to the USF. See, e.g., Universal Service Contribution Methodology, WC Docket Nos.

06-122 and 04-36, CC Docket Nos. 96-45, 98-171, 90-571, 92-237,99-200, 95-116, and 98-170, Report and Order and Notice of

\,;'VestLSilJvNexr © 2012 'Thomson Reuters. No claim to A""'''''''''~1 U.S, Government Works.



Proposed Rulemaking, 21 FCC Rcd 7518 (2006) (requiring interconnected voice over Internet protocol providers to contribute to the

USF) (2006 Interim Contribution Methodology Order).

6 Id. at 9207, paras. 846-47.

7 Id

8 See Changes to the Board of Directors of the National Exchange Carrier Association, Inc., Federal-State Joint Board on Universal

Service, CC Docket Nos. 97-21, 96-45 Report and Order and Second Order on Reconsideration, 12 FCC Rcd 18400 (1997) (Second

Order on Reconsideration).

9 Id. at 18498-513, Appendix A. The FCC Form 499 is the worksheet on which entities report their revenues for USF contribution

purposes. The FCC Form 499-A is filed annually, and the FCC Form 499-Q is filed quarterly.

10 For example, in 2002, the Commission revised the interim wireless safe harbor to increase the contribution requirement from 15 to 28.5

percent of a wireless carrier's end-user telecommunications services revenues and amended the instructions to reflect this increase.

See Federal-State Joint Board on Universal Service, CC Docket Nos. 96-45, 98-171, 90-571, 92-237, 99-200, 95-116, 98-170, Report

and Order and Second Further Notice of Proposed Rulemaking, 17 FCC Rcd 24952, 24965, para. 21 (2002); see also 2003 FCC Form

499-A, Telecommunications Reporting Worksheet at 18 (2003 Telecommunications Reporting Worksheet Instructions).

11 See Second Order on Reconsideration, 12 FCC Rcd at 18442, para. 81 ("Because it is difficult to determine in advance precisely the

information that will be needed to administer the new universal service programs, the Bureau will have delegated authority to waive,

reduce, or eliminate contributor reporting requirements that may prove unnecessary. The Bureau also will have delegated authority to

require any additional contributor reporting requirements necessary to the sound and efficient administration of the universal service

programs.").

12 The Common Carrier Bureau is now the Wireline Competition Bureau. The term "Bureau" in this order refers to the Common Carrier

Bureau prior to the change, and to the Wireline Competition Bureau after the change.

13 See 2002 FCC Form 499-A, Telecommunications Reporting Worksheet at 18 (2002 Telecommunications Reporting Worksheet

Instructions).

14 See InterCall Request for Review at 5-6.

15 See Letter from USAC to Steven A. Augustino, Esq., Kelley, Drye and Warren LLP, at 1 (dated Jan. 15,2008) (InterCall USAC

Decision).

16 See id.

17 See InterCall Request for Review at 2-4, 16; InterCall, Inc.'s Petition for Stay of the Decision of the Universal Service Administrative

Company, CC Docket No. 96-45, at 12 (filed Feb. 5, 2008) (lnterCall Petition for Stay). The Bureau sought comment on InterCall's

request for review of USAC's decision and its request for a stay of the decision. Comment Sought on InterCall Inc. 's Request for

Review of a Decision by the Universal Service Administrative Company and Petition/or Stay, CC Docket No. 96-45, Public Notice,

DA 08-371 (Wireline Compo Bur., Feb. 14,2008). Seven parties filed comments and five parties filed replies. A list of commenters

and replies are attached in the Appendix. On March 19,2008, the Bureau issued a letter to USAC directing it to hold in abeyance

for 90 days its decision concerning the USF contribution obligations of InterCall. Letter from Dana R. Shaffer, Chief, Wireline

Competition Bureau, to Scott Barash, Universal Service Administrative Company, DA 08-602 (Mar. 19,2008). On June 19,2008,

the Bureau extended the temporary abeyance until July 1,2008, pending further Commission action. Letter from Dana R. Shaffer,

Chief, Wireline Competition Bureau, to Scott Barash, Universal Service Administrative Company, DA 08-1447 (June 19,2008). The

temporary abeyance was based on the unique circumstances presented, and did not announce any shift in policy regarding the general

USAC principle of "pay and dispute," which requires appellants to pay disputed universal service contributions while their appeal

is pending. See http:// www.universalservice.orglfund-administration/contributors/file-appeaU (retrieved March 12,2008). USAC's

"pay and dispute" policy is critical to the stability and sufficiency of the USF because it ensures that contributors pay invoices even

when they are in dispute.

18 47 C.F.R. § 54.702(c).

19 InterCall Request for Review at 16-17.

20 See InterCall Request for Review at 12; 47 U.S.C. §254(d).

21 47 U.S.C. § 254(d).

22 InterCall Request for Review at 14-15 (citing Qwest Communications Corp. v. Farmers and Merchants Mutual Telephone, File No.

EB-07-MD-00l, Memorandum Opinion and Order, 22 FCC Rcd 17973 (2007) (Qwest v. Farmers Order); modified on recon., 23

FCC Rcd 1615 (2008) (Qwest Order on Reconsideration).

23 See id.; Universal Service First Report and Order, 12 FCC Rcd at 9183-84, para. 795.

24 See 47 U.S.C. § 254(d).

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25 Due to the temporary abeyance ofthe USAC decision, and the decision reached in this order, we dismiss as moot the InterCall Petition

for Stay. See supra n.17.

26 See Canopco Comments at 3; Genesys Comments at 4-5; Premiere Comments at 2, 5; Qwest Comments at 2; TeleSpan Comments

at 5; InterCall Reply Comments at 3-4, 12.

27 We also do not require other stand-alone audio bridging service providers to file past FCC Form 499-As.

28 47 U.s.c. § 153(43).

29 See InterCall Request for Review at 4.

30 2006 Interim Contribution Methodology Order, 21 FCC Rcd at 7539, para. 41.

31 As AT&T states in its comments, AT&T and other carriers "sell InterCall transport that InterCall then resells with its audio bridging

service to its teleconferencing customers." See AT&T Comments at 3; see also Canopco Comments at 4; Genesys Comments at 2;

Premiere Global Comments at 1-2; TeleSpan Comments at 4.

32 See North American Telecommunications Association Petition for Declaratory Ruling Under §64.702 of the Commission's Rules

Regarding the Integration o/Centrex, Enhanced Services, and Customer Premises Equipment, ENF 84-2, Memorandum Opinion and

Order, 101 FCC2d349, 363, para. 31 (1985)(NATA Order) (describing services that are adjuncts to basic service and determining that

Automatic Route Selection is an adjunct to basic service because it simply creates the transmission channel chosen by the customer).

33 See Regulation of Prepaid Calling Card Services, Declaratory Ruling and Report and Order, 21 FCC Rcd 7290, 7295-96, paras. 14-15

(2006) (Prepaid Calling Card Order) (finding that there must be functional integration between the information service features and

the telecommunications service).

34 Id

35 See NATA Order, 101 FCC 2d at 360, para. 26.

36 Prepaid Calling Card Order, 21 FCC Rcd at 7295, para. 15.

37 Id.

38 Id. We do not make a rmding here regarding whether the ancillary features enumerated by InterCall are information services. There

is no need to make this determination, because, as stated above, these services are not integrated into InterCall's underlying provision

of telecommunications.

39 InterCall Request for Review at 12-13.

40 Id at 24.

41 Id. at 24-25.

42 Universal Service First Report and Order, 12 FCC Rcd at 9183-84, para. 795.

43 Id at 9178-79, para. 786. In reviewing what it meant to be a common carrier, the Commission found that common carriers hold

themselves out to serve the public indiscriminately, noting that "precedent further holds that a carrier will not be a common carrier

'where its practice is to make individualized decisions in particular cases whether and on what terms to serve.''' See id at 9178,

para. 785.

44 See ide at 9183 para. 795 ("Whether a business decides to sell telecommunications services to others on a common carrier or private

contractual basis or through a separate corporate entity should not determine contribution obligations, because in either event the

entity offers telecommunications to others for a fee").

45 Id.

46 See http://www.platinumn.com/raindance.html (last visited on May 5, 2008) (listing a sample of the fees charged to use InterCall's

conferencing services based on per minute usage and number of participants. The website also notes that "there is virtually no

additional cost to add web interface to conference call for visual presentations").

47 Universal Service First Report and Order, 12 FCC Rcd at 9183-84, para. 795.

48 See 47 U.S.C. § 254(d).

49 See InterCall Request for Review at 14-16 (citing AT &Tv Jefferson Telephone Company, 16 FCC Rcd 16130, 16131 (2001) (Jefferson

Telephone Company); Establishing Just and Reasonable Rates for Local Exchange Carriers, 22 FCC Rcd 11629 (Wireline Compo

Bur. 2007) (Call Blocking Decision); Qwest v. Farmers Order, 22 FCC Rcd 17973). We note that the cases cited by InterCall arise

in the access charge, rather than universal service, context. This order pertains solely to universal service contribution obligations.

Nothing in this order is intended to address issues relating to access charge tariffs or other types of intercarrier compensation.

50 Jefferson Telephone Company, 16 FCC Rcd at 16131, para. 3.

51 Id.

52 InterCall Request for Review at 5.

53 47 U.S.C. § 153(43).

54 InterCall Request for Review at 16; Call Blocking Decision, 22 FCC Rcd 11629.

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55 See Call Blocking Decision, 22 FCC Rcd at 11629, para. 2.

56 Qwest v. Farmers Order, 22 FCC Rcd at 17987, para. 35.

57 Verizon Comments at 5; see Qwest Order on Reconsideration, 23 FCC Rcd 1615.

58 See Universal Service FIrst Report and Order, 12 FCC Rcd at 9183, para. 795.

59 See e.g., 2008 FCC Form 499-A, Telecommunications Reporting Worksheet at 8 (government and broadcast treated as end users

because they do not contribute directly). De minimis carriers/providers are end users that would otherwise be subject to direct

contribution if their revenues were higher.

60 See Second Order on Reconsideration, 12 FCC Rcd at 18507, App. A; see also 2002 Telecommunications Reporting Worksheet

Instructions at 18.

61 See AT&T Comments at 2; Verizon Comments at 2-5. Verizon asserts that, as a provider of telecommunications services, InterCall

has an obligation to directly contribute to the fund, like any other reseller. Verizon Comments at 8.

62 See Canopco Comments at 3 (arguing that audio bridging service providers have never been required to file FCC Form 499s as

direct contributors to the fund); see also Genesys Comments at 4-5; Premiere Comments at 2,5; TeleSpan Comments at 5; InterCall

Reply Comments at 3-4, 12. As InterCall notes in its reply comments, according to a survey conducted by Wainhouse Research,

LLC, of the 40 conference calling providers it surveyed, 29 did not contribute directly to the fund. The eleven that do contribute

directly do so because they have an independent basis for contributing, i.e., they are local exchange carriers, interexchange carriers,

or interconnected voice over Internet protocol providers, all of which have been found by the Commission to have direct USF

contribution obligations. See InterCall Reply Comments at 5-6; see also 2006 Interim Contribution Methodology Order, 21 FCC Rcd

at 7636, para. 34. Wainhouse Research is an independent market research firm focusing on the conference calling industry. See http://

www.wainhouse.comlabout.html (visited Mar. 12,2008). Additionally, as noted in their comments, a number of the "stand-alone"

providers view themselves as end users of the toll free 8XX services they purchase from the underlying facilities-based carriers.

See Canopco Comments at 3; see also Genesys at 4; Premiere Comments at 2,4; TeleSpan Comments at 5-6 (asserting that audio

bridging providers are end users.) Alternatively, these teleconferencing providers assert that they are not common carriers and have

never been regulated as such, and are therefore not "mandatory contributors" to the fund. See id.

63 See AT&T Comments at 1,3-4.

64 See InterCall Request for Review at 22.

65 Id at 22-23, 14-16 (citing Qwest v. Farmers Order).

66 See Genesys Comments at 14-16; Premiere Comments at 6; Qwest Comments at 2; TeleSpan Comments at 6 (arguing that the

Commission should act only prospectively with regards to stand-alone audio bridging service providers' contribution obligations).

67 See Qwest Comment at 2 (arguing in support of InterCall's position that the Commission should address the issue such that any

decision is made only on a prospective basis and applies across the industry); see also InterCall Reply Comments at 3; Premiere

Reply Comments at 1 (noting the broad consensus among commenters that the Commission has never classified providers of audio

bridging services as ''telecommunications carriers").

68 See Universal Service First Report and Order, 12 FCC Rcd at 9183, para. 795; see also InterCall Request for Review at 25 (stating

that the uniform application of rules to all providers would maintain the competitive environment in which audio bridging providers

operate); AT&T Comments at 7 (advocating for equal application of the rules to eliminate competitive disadvantage to certain

providers of audio bridging services); Letter from Kathleen Grillo, Vice President Federal Regulatory, Verizon, to Marlene H. Dortch,

Secretary, Federal Communications Commission, CC Docket No. 96-45, Att. at 3 (filed Apr. 25, 2008) (arguing that a level playing

field going forward is the most important outcome).

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vVestlawNext" © 2012 Thomson Reuters, No claim to .""n;"Hn·~! U.s. Government Works,


EXHIBIT 2

Petitions/or Reconsideration and Clarification o/the Intercall Order, Order on Reconsideration, 2012 WL 258204 (released January 27, 2012)


IN THE MATTER OF UNIVERSAL SERVICE •.. , 2012 WL 258204 (2012)

2012 WL 258204 (F.C.C.)

Federal Communications Commission (F.C.C.) Order on Reconsideration

IN THE MATTER OF UNIVERSAL SERVICE CONTRIBUTION METHODOLOGY

WC Docket No. 06-122

FEDERAL-STATE JOINT BOARD ON UNIVERSAL SERVICE

CC Docket No. 96-45

Petitions for Reconsideration and Clarification of the InterCall Order

GLOBAL CONFERENCE PARTNERS

A+ CONFERENCE LTD., FREE CONFERENCING CORPORATION, AND THE CONFERENCE GROUP

*1 By the Commission:

FCC 12-10

Adopted: January 26, 2012

Released: January 27, 2012

I. INTRODUCTION 1. In this order, we address petitions for reconsideration filed by (i) Global Conference Partners (GCP), and (ii) A+ Conference

Ltd., Free Conferencing Corporation, and The Conference Group (collectively, A+ Conferencing) (collectively, Petitioners). 1

Petitioners seek reconsideration and clarification of certain aspects of the InterCall Order, 2 in which the Commission clarified

that InterCall, Inc. (InterCall) and all similarly-situated audio bridging service providers are required to contribute directly to

the universal service fund (USF or the Fund). For the reasons stated below, we deny both petitions for reconsideration.

II. BACKGROUND

A. The Act and the Commission's Rules and Requirements 2. Section 254(d) of the Communications Act of 1934, as amended (the Act), directs that every telecommunications carrier

that provides interstate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, to the

specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service. 3

Section 254( d) further provides that any other provider of interstate telecommunications may be required to contribute "to

the preservation and advancement of universal service." 4 To this end, the Commission has determined that any entity that

provides interstate telecommunications to the public for a fee must contribute to the Fund. 5 The Commission further directed

that contributions should be based on contributors' interstate and international end-user telecommunications revenues. 6

3. Although the Commission has declined to exempt from contribution any broad classes of telecommunications providers,

not all providers of interstate telecommunications contribute directly to the Fund under the current end-user system. 7 The

Commission generally does not require wholesale carriers to contribute directly to the Fund because these carriers do not earn

revenues directly from end users. 8 Instead, the reseller that provides the service to the end user, and thereby earns end-user

revenues, contributes directly to the USF. 9

4. In the Universal Service Second Order on Reconsideration, the Commission set forth the specific methodology for

contributors to use to compute their USF contributions. 10 In the instructions to the Telecommunications Reporting Worksheet

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IN THE MATTER OF UNIVERSAL SERVICE ... , 2012 WL 258204 (2012)

adopted in that order, the Commission provided additional details to contributors to promote compliance with the USF

contribution requirements. 11 Over the years, as the Commission has made changes and further clarified contribution

obligations, the Form 499 instructions have been revised to reflect those decisions, 12 as well as other administratively necessary

changes. 13 Consistent with these periodic updates, in 2002 the FCC Form 499-A and 499-Q instructions were updated to, among other things, specifically include toll teleconferencing as one of the illustrative examples of telecommunications that

are subject to direct USF contributions. 14

*2 5. InterCall Order. In June 2008, the Commission relea:sed the InterCall Order, which clarified that audio bridging services are equivalent to toll teleconferencing services, and providers of such services must contribute directly to the USF based on their

end-user revenues from these services. 15 The Commission, however, granted InterCall's request that any direct contribution

requirement for stand-alone audio bridging providers should apply prospectively only beginning in the fourth quarter of2008. 16

B. Petitions for Reconsideration 6. On July 30, 2008, GCP and A + Conferencing filed separate petitions seeking reconsideration by the Commission of the

InterCall Order. 17 In its petition, GCP requests, among other things, reconsideration of the Commission's finding in the InterCall Order that stand-alone, audio conferencing services are ''telecommunications'' (and not "information services")

for purposes of regulatory classification under the Act and applicable precedent. 18 GCP also requests that the Commission

clarify the treatment of bundled telecommunications and non-telecommunications services. 19 A+ Conferencing asserts that

the InterCall Order should be reconsidered because, among other things, the Commission provided insufficient notice to non-

party teleconferencing service providers as to the scope of the proceeding. 20 Both Petitioners further assert that the InterCall

Order should be reconsidered because it contained material errors of fact and law. 21

III. DISCUSSION 7. For the reasons discussed below, we deny the petitions for reconsideration. We conclude that the Petitioners have failed to identify any new facts or circumstances, or any material error that would support reconsideration of the InterCall Order.

Further, we are not persuaded by claims that the InterCall Order is inconsistent with Commission precedent, nor do Petitioners provide any other basis for concluding that the Commission's action in the InterCall Order was otherwise improper.

8. Reconsideration of a Commission's decision may be appropriate when the petitioner demonstrates that the original order

contains a material error or omission, or raises additional facts that were not known or did not exist until after the petitioner's

last opportunity to present such matters. 22 If a petition simply repeats arguments that were previously considered and rejected

in the proceeding, the Commission may deny them for the reasons already provided. 23

9. A + Conferencing and GCP both argue that the Commission misunderstood the nature of audio bridging services and as a result incorrectly concluded that audio bridging providers must contribute directly to the Fund based on revenues from the

service. In the InterCall Order, the Commission concluded that InterCall's service constitutes telecommunications. 24 The Commission found that "the heart of telecommunications is transmission . . . [and] InterCall's service allows end uSers to transmit a call (using telephone lines), to a point specified by the user (the conference bridge), without change in the form or

content of the information as sent and received (voice transmission)." 25 Explaining the function of a conference bridge, the

Commission stated "the purpose and function of the bridge is simply to facilitate the routing of ordinary telephone calls." 26 In

the instant matter, the Petitioners focus on the Commission's statement that InterCall's conference bridge facilitates call routing and contend that the Commission incorrectly identified a conference bridge as a "switch" or a "router." Petitioners therefore

believe the Commission committed a material error of fact that calls into question its holding in that order. 27 Petitioners'

argument, however, is premised on a misreading of the Commission's finding in the InterCall Order where the Commission

stated only that the conference bridge facilitates the routing of a phone call, not that it routes the call. 28 The Commission did

not conclude that the audio bridge offered by these providers was a router or provided the functionality of a router; rather, the

VVestiav.;Nexr © 2012 T'homson Reuters, No claim to t"H'!'''Hn.',:~! tlS. Govermnent Works,



Commission was describing the overall purpose and function of the service, analogizing it to a routine telephone call in order to explain its decision that audio bridging was a USF-assessable service.

*3 10. Petitioners also argue that the InterCall Order was flawed because the Commission did not consider or address the

Pulver Order, 29 arguing that this renders the Commission's decision arbitrary and unreasonable. 30 GCP argues that the holding

in the InterCall Order conflicts with the Pulver Order, claiming that the Commission found in Pulver that conference bridging

capabilities are an information service under the Act. 31 The Petitioners' argument is without merit and overstates the decision

in the Pulver Order. First, unlike the audio bridging services at issue here (in which customers are provided a telephone number

to access the audio bridge), the "Free World Dialup" service analyzed in the Pulver Order did not provide a transmission service

or capability.32 Moreover, the Commission identified conferencing capabilities as one of several "computing capabilities"

available for free to members using the Free World Dialup web-based application. 33 The Free World Dialup application at

issue in Pulver was limited to members of the Free World Dialup community, required members to be on-line using a broadband

connection, and did not allow for calls made or received on the public switched telephone network (pSTN). 34 We find that these

material characteristics differentiate the services that were the subject of the Pulver Order from the audio bridge conferencing

services that were the subject of the InterCall Order. 35

11. Finally, Petitioners argue that audio bridging service providers, in addition to offering teleconferencing, offer additional

enhanced conferencing features, which they further argue creates a single integrated "information service," as that term is

defined in the Act and relevant precedent. 36 In its petition, GCP claims that conference services providers typically offer

the ability to record conference calls, retrieve and store a recording of the conference communications, and play back pre-

recorded information. 37 GCP argues that the Commission failed to consider whether these other features and functions (in

addition to the bare transport or transmission component of a toll teleconferencing service), cause the conference service to

be an information service. 38 The Commission considered and rejected this argument already in the InterCall Order 39 where

it found that the additional features offered by conference bridge service providers, of the type described by GCP, are not sufficiently integrated to cause the basic service (toll teleconferencing) to be considered an information service under the Act

and Commission precedent. 40

12. As the Commission has previously noted, the classification of a service as either information or telecommunications hinges

on whether the transmission capability is "sufficiently integrated" with the information service capabilities to make it reasonable

to describe the two as a single, integrated offering and classify the entire integrated service as an information service. 41

Merely packaging two services together (such as teleconferencing packaged with additional features that perform validation

functions, collect billing and participant information, and enable the participants to record, delete, playback, mute and unmute,

and access operator assistance) does not create a single integrated service. 42 For example, in the Prepaid Calling Card Order,

the Commission determined that additional menu-driven features that enabled callers to obtain information services (such as

sports scores, stock quotes, and other information) packaged with a basic prepaid calling card service, were not sufficiently

integrated to classify the calling card services as information services. 43 We therefore reiterate the Commission's determination

in the InterCall Order that the additional enhanced conferencing features of the type described by the Petitioners do not create a single integrated information service.

*4 13. GCP has also requested that the Commission clarify whether certain additional services bundled with the audio bridging

service, such as whiteboarding and other computer capabilities that may be used simultaneously with the voice teleconference,

transform the service into an information service. 44 We find that the additional services, as described by GCP, are not

sufficiently integrated with audio conferencing services to be reasonably determined a single product. 45 Consistent with the

Commission's decision in the Prepaid Calling Card Order, we find that these separate capabilities are part of a package in which

the customer can conduct its conference call with or without accessing these features. 46 Accordingly, we confirm that under

our existing requirements, a provider offering a bundled service comprised of telecommunications services and information

V'VestlawNext' @ 2012 Thornsorl Reuters, No claim to AI"I,'1in,!C:Oi U,S. Government VVorks.



services may not treat the entire bundled service as an information service for purposes of USF contribution assessment, but

must instead apportion its end user revenues between telecommunications and non-telecommunications sources. 47

14. Procedural Issue. A+ Conferencing alleges that the Commission violated the Administrative Procedure Act (APA) by,

in effect, issuing a new rule without proper notice and comment. 48 We disagree. The APA distinguishes between "rules"

and "orders." A "rule" is "an agency statement of general or particular applicability and future effect designed to implement,

interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency." 49

Rulemaking is the "agency process for formulating, amending, or repealing a rule," 50 and the AP A requires agencies to give

public notice of a proposed rulemaking and give interested parties an opportunity to submit comments on the proposal. 51 An "order," by contrast, is the "whole or part of a final disposition ... of an agency in a matter other than rulemaking," and it is

formulated through "adjudication;" 52 notice and comment are not required. 53

15. The InterCall Order is an adjudicatory decision in which the Commission determined the regulatory status of the service in

question based on existing rules and requirements and applicable precedent. Moreover, the Commission did not in the InterCall

Order formulate, amend, or repeal a rule. 54 The Commission may interpret its own rules consistent with existing regulation,

without initiating a new rulemaking proceeding. 55 In the InterCall Order, the Commission determined that revenues from

audio bridging service offerings were subject to direct USF contribution requirements, pursuant to the Universal Service First

Report and Order, the 2006 Contribution Methodology Order, and implementing rules flowing therefrom. 56 Thus, we find

that the Commission did not engage in rulemaking under the AP A, but rather it clarified the existing obligations of Inter Call -

and other similarly situated audio bridge service providers -- based upon existing Commission rules and requirements.

IV. CONCLUSION *5 16. For the reasons discussed above, we deny the Petitioners' request for reconsideration of the InterCall Order. We

conclude that the Petitioners have failed to identify any new facts or circumstances, or any material error that would support

reconsideration of the InterCall Order. In so doing, we reiterate the Commission's determination in the InterCall Order

that the additional enhanced conferencing features of the type described by the Petitioners do not create a single integrated

information service under the Act and Commission precedent. We also confirm that our existing requirements require a

provider offering a bundled service consisting oftelecommunications services and information services to apportion its revenues

between telecommunications and non-telecommunications sources for purposes of USF contribution assessment. We also

clarify that under our existing requirements, a provider offering a bundled service consisting of telecommunications and non

telecommunications services may not treat the entire bundled service as an information service for purposes ofUSF contribution

assessment, but must instead apportion its end user revenues between telecommunications and non-telecommunications sources.

V. ORDERING CLAUSES 17. ACCORDINGLY, IT IS ORDERED, pursuant to the authority contained in sections 1-4, 254, and 405 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 254, and 405, and sections 1.106 and 1.429 of the

Commission's rules, 47 C.F.R. §§ 1.106, 1.429, that the petitions for reconsideration filed by (i) Global Conference Partners,

and (ii) A+ Conference Ltd., Free Conferencing Corporation, and The Conference Group ARE DENIED.

18. IT IS FURTHER ORDERED that, pursuant to section 1.103 of the Commission's rules, 47 C.F.R. § 1.103, this Order

SHALL BE EFFECTIVE upon release.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

*6 Comments Filed: APPENDIX

4



Cisco

InterCall

Multi-Point Communications

Verizon (9-8-08)

Voice on the Net Coalition ("VON")

Reply Comments Filed:

A + Conferencing

Encounter Collaborative Group

Global Conference Partners

TIA

Footnotes 1 Global Conference Partners Petition for Partial Reconsideration and Clarification of the InterCall Order, CC Docket No. 96-45 (filed

July 30, 2008) (GCP Petition); A+ Conferencing, Ltd., Free Conferencing Corporation, and The Conference Group Petition for

Reconsideration, CC Docket No. 96-45 (filed July 30, 2008) (A + Conferencing Petition); 47 C.F.R. § § 1.106, 1.429. On August 8,

2008, the Commission sought comment on these petitions. Comment Sought on Petitions for Reconsideration and Clarification of

the Commission's InterCall Order, CC Docket No. 96-45, Public Notice, 23 FCC Rcd 917 (Wireline Compo Bur. 2008). Six parties

filed comments and four parties filed replies. A list of commenters and replies is attached in the Appendix.

2 See Request for Review by InterCall, Inc. of Decision of Universal Service Administrator, CC Docket No. 96-45, Order, 23 FCC

Rcd 10731 (2008) (InterCall Order).

3 47 U.S.C. § 254(d).

4 Id Pursuant to section 254( d) of the Act, the Commission has determined that the public interest requires certain other providers of

interstate telecommunications to contribute to the USF. 47 U.S.C. § 254(d); see, e.g., Universal Service Contribution Methodology

et al., WC Docket Nos. 06-122, 04-36, CC Docket Nos. 96-45, 98-171, 90-571, 92-237, 99-200, 95-116, 98-170, Report and Order

and Notice of Proposed Rulemaking, 21 FCC Rcd 7518 (2006) (2006 Contribution Methodology Order) (requiring interconnected

voice over Internet Protocol (VolP) providers to contribute to the universal service fund because they are providers of interstate

telecommunications).

5 See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776, 9179, para. 787

(1997) (Universal Service First Report and Order) (subsequent history omitted).

6 Id at 9171, para. 772; 47 C.F.R. § 54.706.

7 Universal Service First Report and Order, 12 FCC Rcd at 9179, para. 787. The Commission's rules exempt certain providers from

the contribution requirement.

8 Universal Service First Report and Order, 12 FCC Rcd at 9207, para. 846.

9 Id

10 See Changes to the Board of Directors of the National Exchange Carrier Association, Inc., Federal-State Joint Board on Universal

Service, CC Docket Nos. 97-21, 96-45, Report and Order and Second Order on Reconsideration, 12 FCC Rcd 18400 (1997) (Universal

Service Second Order on Reconsideration).

11 Id at 18498-513 (Appendix A, Universal Service Worksheet FCC Form 457). The FCC Form 457 was the precursor to the FCC

Form 499. See 1998 Biennial Regulatory Review--Streamlined Contributor Reporting Requirements Associated with Administration

of Telecommunications Relay Services, North American Numbering Plan, Local Number Portability, and Universal Service Support

Mechanisms, CC Docket No. 98-171, Report and Order, 14 FCC Rcd 16602 (1999) (consolidating the requirements ofthe FCC Form

457 with other regulatory forms and creating the Telecommunications Reporting Worksheet, FCC Form 499). Entities report their

revenues for USF contribution purposes using the Telecommunications Reporting Worksheets (FCC Form 499-A and Form 499-Q).

The FCC Form 499-A is filed annually, and the FCC Form 499-Q is filed quarterly.

5



12 For example, in 2002, the Commission revised the interim wireless safe harbor to increase the contribution requirement from 15

to 28.5 percent of a wireless carrier's end-user telecommunications services revenues and amended the instructions to reflect this

increase. See Federal-State Joint Board on Universal Service, CC Docket Nos. 96-45, 98-171, 90-571, 92-237, 99-200, 95-116,

98-170, Report and Order and Second Further Notice of Proposed Rulemaking, 17 FCC Rcd 24952, 24965, para. 21 (2002); 2003

FCC Form 499-A Instructions at 18.

13 The Wireline Competition Bureau, formerly the Common Carrier Bureau (Bureau), has delegated authority to revise the Forms

499 and accompanying instructions to ensure "sound and efficient administration ofthe universal service programs." See Universal

Service Second Order on Reconsideration, 12 FCC Rcd at 18442, para. 81 ("Because it is difficult to determine in advance precisely

the information that will be needed to administer the new universal service programs, the [Common Carrier] Bureau will have

delegated authority to waive, reduce, or eliminate contributor reporting requirements that may prove unnecessary. The Bureau

also will have delegated authority to require any additional contributor reporting requirements necessary to the sound and efficient

administration of the universal service programs."). Consistent with this authority, the Bureau revises the Telecommunications

Reporting Worksheet Instructions to provide guidance for complying with existing rules and requirements.

14 See 2002 FCC Form 499-A Instructions at 20.

15 InterCall Order, 23 FCC Rcd at 10731, para. 1. The Commission explained that audio bridging services allow end users to transmit

a call (using telephone lines), to a point specified by the user (the conference bridge), without change in the form or content of the

information as sent and received (voice transmission). See id at 10735, para. 11.

16 Id at 10738, para. 24.

17 See supra note 1.

18 See GCP Petition at 1-2.

19 See id at 22.

20 See A+ Conferencing Petition at 3-5 (citing Section 553 of the APA; Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1027 (9th Cir.

1978); American Radio Relay League, Inc. v. FCC, 524 F.3d 227,242 (D.C. Cir. 2008».

21 See id at 7; GCP Petition at 9.

22 Toll Free Service Access Codes, CC Docket No. 95-155, Order on Reconsideration, 22 FCC Rcd 22188, 22192-93, para. 13 (2007);

47 C.F.R. § 1.106(c).

23 See, e.g., Federal-State Joint Board on Universal Service Business Service Center, Inc., Mobile Phone of Texas, Inc., and 3 Rivers

PCs, Inc. Petitionfor Reconsideration of Small Wireless Carrier Group, Order, CC Docket No. 96-45, 19 FCC Rcd 22305,22306,

para. 4 (2004).

24 InterCall Order, 23 FCC Rcd at 10734, para. 8. The Act defines telecommunications as ''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." 47 U.S.C. § 153(43).

25 InterCall Order, 23 FCC Rcd at 10734, para. 11.

26 Id

27 GCP Petition at 11; A+ Conferencing Petition at 9.

28 InterCall Order, 23 FCC Rcd at 10734, para. 11.

29 Petitionfor Declaratory Ruling that pulver.com's Free World Dialup Is Neither Telecommunications Nor a Telecommunications

Service, WC Docket No. 03-45, Memorandum Opinion and Order, 19 FCC Rcd 3307,3320-21, para. 21 (2004) (Pulver Order).

30 GCP Petition at 10-11 (citing Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42 (1983) (Agency changing

course "is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act

in the first instance"»; A+ Conferencing Petition at 13-14.

31 GCP Petition at 2.

32 Pulver Order, 19 FCC Rcd at 3309, para. 5 ("members must have an existing broadband Internet access service as Pulver does not

offer any transmission service or transmission capability").

33 Id at 3315, n. 50

34 See Id at 3308, n.3.

35 See 2006 Contribution Methodology Order, 21 FCC Rcd at 7540, n.147 (distinguishing interconnected VoIP services from the

services in the Pulver Order on the grounds that the non-interconnected VoIP provider in the Pulver Order "did not supply

connectivity to any PSTN user"). We also disagree with GCP's assertion that, in determining that audio bridging services were

telecommunications, the Commission did not adequately distinguish between audio bridging services and the "chat-line" information

services described in AT&Tv Jefferson Telephone Company. GCP Petition at 11-12, citingAT&TvJefferson Telephone Company,

16 FCC Rcd 16130, 16131, para. 3 (2001) (Jefferson Telephone). In Jefferson Telephone, the Commission referred to free chat-line

VIJ{?stlawNext' @ 2012 Thorns()!"1 Reuters. No d.:xim to r\l"il"lH,,:~i U.S. Government \Nort<s.



service as an information service. The chat-line service in question is materially different than the audio bridging services because

the chat-line service randomly connects incoming calls so that two or more callers are able to talk with each other simultaneously. Id,

at 16131-32, para. 3. Audio bridging service is telecommunications, not an information service, because the transmission is routed

"between or among points specified by the user." InterCall Order, 23 FCC Rcd at 10737, para. 19, citing 47 U.S.C. § 153(43). The

randomization of the chat-line service by definition means the transmission of those calls is not routed "between or among points

specified by the user."

36 GCP Petition at 12-13 (citing 47 USC § 153(20»; A+ Conferencing Petition at 11-13 (citing Regulation of Prepaid Calling Card

Services, WC Docket No. 05-68, Declaratory Ruling and Report and Order, 21 FCC Rcd 7290 (Prepaid Calling Card Order».

37 GCP Petition at 14-15.

38 Id at 13.

39 See InterCall Order, 23 FCC Rcd at 10734-35, paras. 11-13.

40 Id at 10735, para. 13.

41 Prepaid Calling Card Order, 21 FCC Rcd at 7296, para. 14 ("the key question in classifying offerings with both telecommunications

and information service capabilities is whether the telecommunications transmission capability is 'sufficiently integrated' with the

information service component 'to make it reasonable to describe the two as a single, integrated offering."') (quoting National Cable

& Telecomm. Ass'n. v. Brand X Internet Services, 125 S. Ct. 2688, 2704 (2005».

42 See InterCall Order, 23 FCC Rcd at 10735, para. 12.

43 Prepaid Calling Card Order, 21 FCC Rcd at 7295-96, paras. 14-15.

44 GCP Petition at 23 and Attachment. See Cisco Comments at 6-8; InterCall Comments at 6-8; Multi-Point Communications Comments

at 3-4; VON Comments at 6-9. See 47 U .S.C. § 153(20) (defining "information service" as ''the offering of a capability for generating,

acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications").

45 Prepaid Calling Card Order, 21 FCC Rcd at 7295, para. 15.

46 Id

47 See CP E Bundling Order, 16 FCC Rcd 7418. The Commission established how providers could apportion their bundled revenues for

purposes of contribution assessment. Id at 7448, para. 53. First, a provider can apportion its revenues based on unbundled service

offering prices, with no discount from the bundled offering being allocated to telecommunications service. Second, a provider can

treat all bundled revenues as telecommunications revenues. Third, a provider can apportion its bundled revenues using any reasonable

alternative method as long as it reflects the contributor's obligation to equitably contribute to universal service. Id. at para. 50. The

first two methods are "safe harbors" which the Commission has deemed reasonable, while the Commission cautions that carriers

utilizing other methods are subject to audit and review. Id at 7448, paras. 52-53.

48 A + Conferencing Petition at 3-7.

49 5 U.S.C. § 551(4).

50 5 U.S.C. § 551(5).

51 5 U.S.C. § 553(b).

52 5 U.S.C. § 551(6), (7).

53 5 U.S.C. § 553(b)(3)(A); see also 5 U.S.C. § 553(d)(2).

54 Compare the defmitions of "rule" and "rulemaking" and the requirements thereof under sections 551 and 553, with the definitions of

"orders" and "adjudications" and the requirements thereof under sections 551 and 554.5 U.S.C. §§ 551,553,554.

55 See Cost-Based Terminating Compensation for CMRS Providers; Interconnection Between Local Exchange Carriers and

Commercial Mobile Radio Service Providers; Implementation of the Local Competition Provisions of the Telecommunications Act

of 1996; Calling Party Pays Service Offering in the Commercial Mobile Radio Services, CC Docket Nos. 95-185, 96-98, WT Docket

No. 97-207, Order, 18 FCC Rcd 18441, 18450, para. 22 (2003) ("The D.C. Circuit has repeatedly held that interpretive rulings are

properly used to clarify the original meaning and application of an agency's substantive rules. The Supreme Court in reaffirming

the authority of agencies to interpret their own rules stated that "a new APA rulemaking is required only if an agency adopt[s] a

new position inconsistent with any of the [agency's] existing regulations.") (2003), review denied, SBC Inc. v. FCC, 414 F.3d 486

(3d Cir. 2005).

56 InterCall Order, 23 FCC Rcd at 10732-33, paras. 2-3 (citing Universal Service First Report and Order, 12 FCC Rcd at 9183-84,

para. 795; 2006 Contribution Methodology Order, 21 FCC Rcd at 18498-513, Appendix A; FCC Forms 499-A and 499-Q).

End of Document © 2012 Thomson Reuters. No claim to original U.S. Government Works.

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