On August 19, 2010, the Coalition submitted an ex parte letter outlining problems with the current USF contribution system. The Coalition pointed to unclear, ambiguous rules developed without transparency including the CCR as the chief offender. The Coalition proposed a number of reforms. In addition to reforms identified in the April 18, 2012 ex parte letter (see above), the Coalition suggested: (a) expanding the scope of the USF contribution base to include clearly-defined “Distributors” of prepaid calling cards and other prepaid calling services which depend on multi-level distribution; (b) allowing de minimis distributors a choice to contribute directly to the Fund; (c) defining “prepaid” services and honoring distinctions between private and common carrier services; (d) honoring jurisdictional boundaries; (e) establishing an expedited review process for questions and concerns; and (f) following reform of the USF system with Telecommunications Relay Services (“TRS”) Fund reform.
Of particular import in this letter is the call to the FCC to restore the common/private carrier dichotomy and honor the light touch regulatory treatment Congress intended for private service providers. The Coalition noted that the FCC has strayed from the principle, embodied in the Communications Act, that only common carriers are subject to all Title II obligations, and private service providers do not carry this heavy burden. For example, they are not required to contribute to the TRS Fund and should not be coerced into paying such contributions by USAC. Moreover, the FCC must address the complexities and uncertainties caused by the CCR due to the increased business interactions and transactions among carriers interconnected with the public network and the ever-increasing array and number of private service providers. While these issues are particularly important for international service providers (particularly wholesale only VoIP-in-the-Middle), they also impact domestic private network and private service providers.