# FCC-07-231: Universal Service Contribution Methodology (01/24/08): Universal Service Contribution Methodology

> Federal · Rulings · In force

URL: https://www.frixlaw.com/law-library/statutes/FCC_FCC_07_231

## Section

- **Citation:** FCC-07-231: Universal Service Contribution Methodology (01/24/08)
- **Heading:** Universal Service Contribution Methodology
- **Jurisdiction:** Federal
- **Kind:** Rulings
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FCC Declaratory Rulings / Universal Service Contribution Methodology

## Text

Federal Communications Commission
FCC 07-231
Before the
Federal Commuiiicatioiis Cotiunission
Washington, D.C. 20554
WC
Docket No. 06-122
In the Matter of
Universal Service Contribution Methodology
Petition for Declaratory Ruling of CTIA -
The
Wireless Association on Universal Service
Contribution Obligations
Petition for Declaratory Ruling of Cingular
Wireless, LLC
DECLARATORY ORDER
Adopted: December 26,2007
Released: January 24,2008
By the Conunission:
I.
INTRODUCTION
1. In this Declaratory Order (Order), we address petitions filed by CTIA-The Wireless
Association (CTIA) and Cingular Wireless, LLC, seeking clarification of the definition of "toll services"
for purposes of determining contribution obligations to the federal universal service fund (USF or Fund).'
We grant both petitions to the extent that they ask the Commission to declare that the definition of "toll
services" discussed in the 2006 Contribution Methodology Order is the definition to be used on the FCC
Form 499 for reporting the revenues derived from toll service charges.^ We also address CITA's request
to clarify how wireless carriers should allocate toll service revenues to the interstate and international
jurisdiction. In particular, we clarify that, to the extent a Fund contributor (including wireless and
interconnected Voice over Internet Protocol (VoIP) providers) uses a traffic study or studies to determine
its contribution obligations, such traffic study or studies must specifically account for the interstate or
international nature of toll service revenues.
'
Universal Service Contribution Methodology, WC Docket No. 06-122, Petition for Declaratory Ruling of CTIA-
The Wireless Association on Universal Service Contribution Obligations (filed Aug. 1, 2006) (CTIA Petition)-,
Petition for Declaratory Ruling of Cingular Wireless LLC (filed Aug. 8, 2006) (Cingular Wireless Petition). On
January 3,2007, Cingular Wireless, LLC, changed its name to AT&T Mobility, LLC. See Cingular Wireless, LLC
SEC Form 8-K (filed Jan
06-122, Petition for Declaratory Ruling of CTIA-
The Wireless Association on Universal Service Contribution Obligations (filed Aug. 1, 2006) (CTIA Petition)-,
Petition for Declaratory Ruling of Cingular Wireless LLC (filed Aug. 8, 2006) (Cingular Wireless Petition). On
January 3,2007, Cingular Wireless, LLC, changed its name to AT&T Mobility, LLC. See Cingular Wireless, LLC
SEC Form 8-K (filed Jan. 9,2007) available at http://www.sec.gOv/Archives/edgar/data/l 130452/
00009501440700018 l/g05017e8vk.htm (last visited Jan. 2, 2008). Because the Cingular Wireless Petition was
filed in the name of Cingular Wireless, LLC, we continue to refer to the company as Cingular in this Order.
^ See Universal Service Contribution Methodology; Federal-State Joint Board on Universal Service, WC Docket
No. 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 Red 7518,7535, para. 29 (2006) (2006 Contribution Methodology Order).
The Commission requires contributors to report their end user telecommunications revenues on a quarterly basis
(FCC Form 499-Q) and on an annual basis (FCC Form 499-A). See 47 C.F.R. § 54.711(a).
1411

Federal Commnnications Commission
FCC 07-231
n.
BACKGROUND
2. Universal service represents a key component of communications policy. The statutory
framework established by Congress in the Telecommunications Act of 1996 (1996 Act) governs the
assessment of contributions to the Fund.' Section 254(b) of the Act instructs the Commission to establish
universal service support mechanisms with the goal of ensuring the delivery of affordable
telecommunications services to all Americans.'* Section 254(b) also provides that Comrmssion policy on
universal service shall be based, in part, on the principles that contributions should be equitable and
nondiscriminatory, and support mechanisms should be specific, predictable, and sufficient
to establish
universal service support mechanisms with the goal of ensuring the delivery of affordable
telecommunications services to all Americans.'* Section 254(b) also provides that Comrmssion policy on
universal service shall be based, in part, on the principles that contributions should be equitable and
nondiscriminatory, and support mechanisms should be specific, predictable, and sufficient. Section
254(d) of the Act mandates that "[e]very teleconununications 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."® Section 254(d) also vests the Commission with the permissive authority to require "[a]ny other
provider of interstate telecommunications ... to contribute to the preservation and advancement of
universal service if the public interest so requires."'
3. In 1997, in the Universal Service First Report and Order, the Commission determined to
assess universal service contributions based on end user telecommunications revenues.® The Commission
concluded that the revenues approach would be: (1) competitively neutral; (2) easy to administer; and (3)
explicit.® In the Second Order on Reconsideration, the Commission set forth the specific methodology
for contributors to use to compute their USE contributions.'" In 1998, in response to wireless carriers'
'
Teleconununications Act of 1996, Pub.L.No. 104-104, 110 Stat. 56 (1996) (1996 Act). The 1996 Act amended the
Communications Act of 1934 (the Act). See A1 U.S.C. §§ 151, et seq.
"
47 U.S.C.§ 254(b).
'
47 U.S.C. §§ 254(b)(4), (5). The Commission adopted the additional principle that federal support mechanisms
should be competitively neutral, neither unfairly advantaging nor disadvantaging particular service providers or
technologies. See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12
FCC Red 8776, 8801-03, paras
§§ 151, et seq.
"
47 U.S.C.§ 254(b).
'
47 U.S.C. §§ 254(b)(4), (5). The Commission adopted the additional principle that federal support mechanisms
should be competitively neutral, neither unfairly advantaging nor disadvantaging particular service providers or
technologies. See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12
FCC Red 8776, 8801-03, paras. 46-51 (1997) {Universal Service First Report and Order) (subsequent history
omitted).
* 47 U.S.C. § 254(d).
Ud.
® See Universal Service First Report and Order, 12 FCC Red at 9206-07, paras. 843-44; Federal-State Joint Board
on Universal Service, Access Charge Reform, Sixteenth Order on Reconsideration and Eighth Report and Order in
CC Docket No. 96-45 and Sixth Report and Order in CC Docket No. 96-262, 15 FCC Red 1679,1685, para. 15
(1999) {establishing a single contribution methodology for all universal service support mechanisms based on
interstate and international revenues in response to the 5"' Circuit's decision in Texas Office of Public Utility
Counsel v. FCC. 183 F.3d 393 (5"' Cir. 1999), cert, denied. 530 U.S. 1210).
'
Universal Service First Report and Order, 12 FCC Red at 9206, 9211, paras. 843, 854.
See Changes to the Board ofDirectors of the National Exchange Carrier Association, Inc., Federal-State Joint
Board on Universal Service, CC Docket Nos. 96-45,97-21, Report and Order and Second Order on
Reconsideration, 12 FCC Red 184(X) (1997) {Second Order on Reconsideration); see also Changes to the Board of
Directors of the National Exchange Carrier Association, Inc., Federal-State Joint Board on Universal Service, CC
Eiocket Nos
of the National Exchange Carrier Association, Inc., Federal-State Joint
Board on Universal Service, CC Docket Nos. 96-45,97-21, Report and Order and Second Order on
Reconsideration, 12 FCC Red 184(X) (1997) {Second Order on Reconsideration); see also Changes to the Board of
Directors of the National Exchange Carrier Association, Inc., Federal-State Joint Board on Universal Service, CC
Eiocket Nos. 96-45,97-21, Order on Reconsideration, Second Report and Order, and Further Notice of Proposed
Rulemaking, 12 FCC Red 12444 (1997) {concluding that, on an interim basis contributors, including wireless
carriers, that cannot derive interstate revenues from their books of account or that cannot derive the line-by-line
revenue breakdowns from their books of account may provide on the Worksheet good faith estimates of these
figures).
1412

Federal Communications Commission
FCC 07-231
concerns about the difficulties of distinguishing between interstate and intrastate revenues, the
Commission permitted those carriers to rely on an interim "safe harbor" percentage." At the same time,
the Commission allowed wireless carriers to report a different percentage so long as the carriers could
document the method used to calculate their reported percentages of interstate revenues.'^ Of particular
note, the Commission permitted wireless providers to use traffic studies as a proxy for calculating their
actual interstate and international revenues.'^ In June 2006, when the Commission extended USF
contribution obligations to interconnected VoIP providers, it also permitted such providers to use traffic
studies to estimate their interstate and international revenues.'"'
4
enues.'^ Of particular
note, the Commission permitted wireless providers to use traffic studies as a proxy for calculating their
actual interstate and international revenues.'^ In June 2006, when the Commission extended USF
contribution obligations to interconnected VoIP providers, it also permitted such providers to use traffic
studies to estimate their interstate and international revenues.'"'
4. On August 1,2006, CTIA filed a petition raising concerns regarding the allocation of toll
revenue when a wireless provider uses a company-specific traffic study to report interstate and
international revenue.'^ On August 8,2006, Cingular filed a similar petition requesting clarification
regarding the allocation of toll revenue when a wireless provider has opted to utilize a safe harbor.'^
CITA asserts that the Commission has consistently indicated that a provider that avails itself of the traffic
study method to report end-user telecommunications revenues could apply this method to all end-user
telecommimications revenues, including toll revenues, and asks the Commission to clarify how wireless
carriers should properly report toll revenue.'^ To assist wireless carriers in reporting toll revenue, both
CTIA and Cingular seek guidance on the definition of "toll revenues," and CIIA asks the Commission to
declare that the definition of "toll revenue" discussed in paragraph 29 of the 2006 Contribution
Methodology Order is the proper definition for purposes of reporting separately stated toll revenue on
FCC Form 499.'® In that regard, CTLA asks the Commission to declare that toll revenue does not include
either: (1) revenue associated with plans that give end users fixed amounts of minutes which can be used
either for local or long distance service; or (2) per-minute airtime charges that are the same for local or
long distance calls." Finally, CTIA asks that, to the extent the Commission provides clarification in these
areas, those clarifications apply prospectively only.^
"
See Federal-State Joint Board on Universal Service
d with plans that give end users fixed amounts of minutes which can be used
either for local or long distance service; or (2) per-minute airtime charges that are the same for local or
long distance calls." Finally, CTIA asks that, to the extent the Commission provides clarification in these
areas, those clarifications apply prospectively only.^
"
See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Memorandum Opinion and Order and
Further Notice of Proposed Rulemaking, 13 FCC Red 21252,21258, para. 11 (1998) (stating that wireless carriers
that choose to avail themselves of the safe harbor percentages could assume that the Commission would not find it
necessary to review or question the data underlying their reported percentages) (Safe Harbor Order).
Id. (noting that the Conunission retained its authority to require carriers that reported interstate revenues below the
safe harbors, perhaps using traffic studies, to document the method by which they arrived at their reported
percentage of interstate telecommunications revenues).
"Id.
2006 Contribution Methodology Order, 13 FCC Red. at 7547, para. 57.
"
CTIA Petition at 3.
'* Cingular Wireless Petition at 1-2. CTIA also requested clarification regarding the allocation of toll revenue when
a wireless provider uses the interim wireless safe harbor to report revenues. CTIA Petition at 7-9. We do not reach
the safe harbor issue in this Order.
"
See CTIA Petition at 5-12; see also Qwest Comments at 2.
"
See CTIA Petition at 5-12; see also Cingular Wireless Petition at 11-12.
"CTIA Petition, at 5.
^
Id. at 14.
1413
requested clarification regarding the allocation of toll revenue when
a wireless provider uses the interim wireless safe harbor to report revenues. CTIA Petition at 7-9. We do not reach
the safe harbor issue in this Order.
"
See CTIA Petition at 5-12; see also Qwest Comments at 2.
"
See CTIA Petition at 5-12; see also Cingular Wireless Petition at 11-12.
"CTIA Petition, at 5.
^
Id. at 14.
1413

Federal Communications Commission
FCC 07'231
m. DISCUSSION
5. In this Order, we address the manner in which Fund contributors, including wireless and
interconnected VoIP providers, must report on FCC Form 499 revenues that they obtain from toll
services.^' First, we reiterate that, for universal service purposes, "[tjoll services are telecommunications
services that enable customers to communicate outside of their local exchange calling areas," and that, for
wireless providers, this means outside the customer's plan-defined home calling area?^ Second, we fmd
that those contributors reporting revenues based on traffic studies must report all revenues associated with
interstate or intemational toll service calls for which there is a separate charge on an end user's bill as
interstate or intemational toll service revenues when submitting their Telecommunications Reporting
Worksheets (FCC Forms 499-A and 499-Q). In this respect, and as explained more fully below, we find
that wireless providers and interconnected VoIP providers that report revenue based on a traffic study or
studies must account for toll service traffic that is assessed an additional charge(s) in a manner that
reflects accurately both the jurisdiction of this traffic and the associated revenue.
A.
ToU Service Revenue
6
499-A and 499-Q). In this respect, and as explained more fully below, we find
that wireless providers and interconnected VoIP providers that report revenue based on a traffic study or
studies must account for toll service traffic that is assessed an additional charge(s) in a manner that
reflects accurately both the jurisdiction of this traffic and the associated revenue.
A.
ToU Service Revenue
6. We agree with CTIA that, as we explained in the 2006 Contribution Methodology Order, toll
services are "telecommunications services that enable customers to communicate outside of their local
exchange calling areas."^' Toll service revenues are, in turn, revenues resulting from the provision of
telecommunications services that enable customers to communicate outside of their local exchange
calling areas. In applying this definition to wireless carriers, the Commission indicated that certain
wireless revenues fall within the definition of toll service revenues. In particular, the Commission stated:
Many wireless telephony customers subscribe to plans that give them fixed amounts
of minutes which can be used for either local or long distance service. Other
wireless telephony customers, however, pay by the minute for some or all calls. For
long distance service, the charge is often made up of an air time charge that is the
same for local and long distance calls, and an additional toll charge that applies only
to long distance calls. For some wireless telephony providers, toll service revenue
includes these additional charges for intrastate, interstate, and intemational toll
calls.^"^
7
r, pay by the minute for some or all calls. For
long distance service, the charge is often made up of an air time charge that is the
same for local and long distance calls, and an additional toll charge that applies only
to long distance calls. For some wireless telephony providers, toll service revenue
includes these additional charges for intrastate, interstate, and intemational toll
calls.^"^
7. CinguIJir asserts that the Commission never previously provided clear guidance as to
precisely what revenue falls into the category of wireless toll revenue.^ Cingular also claims that the
concept of a local exchange calling area does not translate into commercial mobile radio service (CMRS)
networks.^ CTIA similarly asserts that the 2006 Contribution Methodology Order is not only the first
Although the CTIA Petition only seeks a declaratory order in the wireless context, because both wireless and
interconnected VoIP providers may utilize a traffic study or studies to report interstate and intemational revenues,
we address in this Order the Commission's reporting requirements for any Fund contributor that permissibly uses a
traffic study to report USE revenues.
^
2006 Contribution Methodology Order, 21 FCC Red at 7534, para. 29; see, e.g., Cingular Wireless Petition at 11-
12,23-24; CTIA Petition at 3-5; T-Mobile Comments at 2; USCC Comments at 4-5.
^ 2006 Contribution Methodology Order, 21 FCC Red at 7534, para. 29.
^*Id.
^
See Cingular Wireless Petition at 12; see also T-Mobile Comments at 2.
^
See Cingular Wireless Petition at 11-12.
1414
revenues.
^
2006 Contribution Methodology Order, 21 FCC Red at 7534, para. 29; see, e.g., Cingular Wireless Petition at 11-
12,23-24; CTIA Petition at 3-5; T-Mobile Comments at 2; USCC Comments at 4-5.
^ 2006 Contribution Methodology Order, 21 FCC Red at 7534, para. 29.
^*Id.
^
See Cingular Wireless Petition at 12; see also T-Mobile Comments at 2.
^
See Cingular Wireless Petition at 11-12.
1414

Federal Communicatioiis Commission
FCC 07-231
Commission-level universal service contribution order to define "toll traffic," but the first Commission-
level order to define toll traffic in the CMRS context?^ CTIA further asserts that the 2006 Contribution
Methodology Order suggests that "toll charges, in the wireless context, are additional charges for 'long
distance' calls (that is, calls outside of the customer's home calling area, as defined in the customer's
plan), distinct from any itemized airtime charges that may apply and also distinct from roaming (whether
on-network or off-network)."^* Both Cingular and CTIA urge the Commission to clarify that the
definition of toll services set forth in the 2006 Contribution Methodology Order is the definition the
Commission will apply and that contributors must use in reporting toll service revenues on the FCC Form
499.
8. We grant petitioners request for clarification and state that the definition of toll services set
forth in paragraph 29 of the 2006 Contribution Methodology Order is the definition that contributors must
use to report toll services revenues on their FCC Form 499s.^' Regarding petitioners' complaint that this
defmition of "toll service" is difficult to apply to wireless services, we acknowledge that the definition
includes a term, "local exchange calling area," typically associated with wireline networks, but we think
petitioners overstate the case
ogy Order is the definition that contributors must
use to report toll services revenues on their FCC Form 499s.^' Regarding petitioners' complaint that this
defmition of "toll service" is difficult to apply to wireless services, we acknowledge that the definition
includes a term, "local exchange calling area," typically associated with wireline networks, but we think
petitioners overstate the case. In common usage a "toll" is a separate charge for use of a service or access
to infrastructure, such as a toll road or bridge, or "a charge for a long distance telephone call."^°
Moreover, since 1934, the Act's definition of "telephone toll traffic" has included the concept of "a
separate charge."*' And although wireless service is not typically described in terms of "local exchange
areas," we note that wireless providers have long crafted cdling plans for consumers that feature a
separate charge for calls made outside of a plan-defined home calling area.*^ In this respect, providers
have demonstrated that their billing systems can and do segregate and separately track revenues
associated with calls that fall outside of a subscriber's plan, in terms of minutes used (overages), calls
originating outside of the plan-defined home calling area (roaming), and calls placed to points outside of
the plan-defined home calling area (toll).** Although the definition of toll service reflected in the FCC
Form 499 instructions predates the 2006 Contribution Methodology Order, we recognize that the
Commission had not addressed the application of that definition to wireless services prior to that order.
See CTIA Petition at 4.
® We note that the term "home calling area" is used generally by wireless carriers to denote the plan-defined area in
which a subscriber may make calls and inciu- no additional charges beyond the plan-specific per month charge,
assuming the subscriber does not exceed the plan allotted minutes. See id
e application of that definition to wireless services prior to that order.
See CTIA Petition at 4.
® We note that the term "home calling area" is used generally by wireless carriers to denote the plan-defined area in
which a subscriber may make calls and inciu- no additional charges beyond the plan-specific per month charge,
assuming the subscriber does not exceed the plan allotted minutes. See id. at 5', see also Letter from Brian Fontes,
Vice President -
Federal Relations, AT&T Mobility, LLC, to Marlene H. Dortch, Secretary, Federal
Communications Commission, WC
£>ocket No. 06-122 at 2-3, filed Feb. 6,2007 (Cingular Wireless letter).
^
The discussion of "toll services," "toll traffic," and "toll revenues" in this order pertains solely to universal service
contribution obligations. Nothing in this order is intended to address intercarrier compensation and other issues
raised in CC Docket No. 01-92 or other pending proceedings. See Developing a Unified Compensation Regime, CC
Docket No. 01-92, Further Notice of Proposed Rulemaking, 20 FCC Red 4685 (2005).
Merriam-Webster Online Dictionary, copyright 2005 by Merriam-Webster, Inc. available at www.merriam-
webster.com (last visited Jan. 2, 2(X)8).
"
47 U.S.C. § 153(48) (defining telephone toll service as "telephone service between stations in different exchange
areas/or which there is made a separate charge not included in contracts with subscribers for exchange service")
(emphasis added).
** Cingular Wireless Letter at 3
(discussing legacy regional plans).
** See id. See also Letter from Paul W. Gamett, CTIA -
The Wireless Association, to Marlene H. Dortch, Secretary,
Federal Communications Commission, WC Docket No. 06-122 at 2, filed Feb. 21,20O7 (CTIA Member Toll
Charges Letter).
1415
ate charge not included in contracts with subscribers for exchange service")
(emphasis added).
** Cingular Wireless Letter at 3
(discussing legacy regional plans).
** See id. See also Letter from Paul W. Gamett, CTIA -
The Wireless Association, to Marlene H. Dortch, Secretary,
Federal Communications Commission, WC Docket No. 06-122 at 2, filed Feb. 21,20O7 (CTIA Member Toll
Charges Letter).
1415

Federal Communications Comniission
FCC 07-231
Thus, we agree with CTIA that the definition of wireless toll services applies from the effective date of
that order.
9. Toll services can thus be defined as telecommunications services, regardless of how
provisioned, that enable the customer to call points outside the customer's plan-defined home calling area
for an additional charge.'* These services can take many forms. Wireless and interconnected VoIP
providers and many local exchange carriers offer a range of calling plans to consumers. These plans may
include small local calling areas, regional calling areas, and nation-wide calling areas." Although some
wireless plans may include an additional air time charge that is the san^ for local and long distance calls,
and therefore does not represent a toll service char^, other plans assess an additional charge that applies
only to calls to points outside of the customer's plan-defined home calling area, that is, a toll charge."
10. In the 2006 Contribution Methodology Order, we expressed concern that wireless carriers
were not properly reporting revenues associated with toll services." Providers using traffic studies to
report revenues on the FCC Forms 499 shall identify toll service revenues consistent with the home
calling area of the particular plan for the subscriber
efined home calling area, that is, a toll charge."
10. In the 2006 Contribution Methodology Order, we expressed concern that wireless carriers
were not properly reporting revenues associated with toll services." Providers using traffic studies to
report revenues on the FCC Forms 499 shall identify toll service revenues consistent with the home
calling area of the particular plan for the subscriber. Therefore, revenue associated with wireless and
interconnected VoIP consumers that subscribe to nation-wide, fixed-price calling plans that give the
customer fixed amounts of minutes, and do not distinguish between local, intrastate, or interstate service,
must be identified as toll service revenue only to the extent that additional fees are assessed for calls made
to points outside the plan-defined home calling area. For these plans, toll service revenue would likely be
limited to charges associated with intemational calling." Similarly, revenues associated with regional or
local plan-defined home calling areas must be reported as toll service revenue to the extent that there are
additional fees assessed for calls made to points outside the plan-defined home calling area." Revenues
of a wireless provider or an interconnected VoIP provider associated with additional airtime, roaming,
and overage charges, while not toll service revenue, must be allocated between the interstate and
intrastate jurisdictions.*"
11. There are also wireless plans that charge by the minute for some or all calls. These plans,
which require consumers to pay in advance for usage, do not offer consumers a "bucket" of minutes per
^
See Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of1993, Annual Report and
Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services, Eleventh Report, 21 FCC
Red 10947,11049, para. 125 (2006) (explaining wireless carrier calling areas).
"
See Cingular Wireless Letter at 3; CTIA Member Toll Charges Letter at 2
rs a "bucket" of minutes per
^
See Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of1993, Annual Report and
Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services, Eleventh Report, 21 FCC
Red 10947,11049, para. 125 (2006) (explaining wireless carrier calling areas).
"
See Cingular Wireless Letter at 3; CTIA Member Toll Charges Letter at 2. Some interconnected VoIP plans also
include international calls within the flat rate monthly plan fee. See generally http;//comparevoipproviders.org (last
visited Jan. 2,2008) for a listing of various VoIP calling plans and coverage.
^
See Cingular Wireless Letter at 3. We note that such toll charges, as we define the term here, are distinct from
roaming charges, which we do not define in this Order.
"
2006 Contribution Methodology Order, 21 FCC Red at 7534, paras. 29-30.
For example, as Cingular explains in its letter, the only "toll" charges associated with its nationwide calling plans
would be for calls made from die United States to foreign points. Cingular Wireless Letter at 4. Calls made or
received by Cingular customers while outside the United States are generally treated as intemational roaming. Id.
"
For example, as Cingular explains in its letter, for its legacy regional plans, calls made to points outside the plan-
defined home calling area are treated as toll, depending on the number called, whereas calls made from or received
while outside the plan-defined home calling area are treated as roaming. Cingular Wireless Letter at 3. See also
CTIA Member Toll Charges Letter at 2-3.
*° Instructions to the Telecommunications Reporting Worksheet (2007), Form 499-A, at 23-24.
1416
ls made to points outside the plan-
defined home calling area are treated as toll, depending on the number called, whereas calls made from or received
while outside the plan-defined home calling area are treated as roaming. Cingular Wireless Letter at 3. See also
CTIA Member Toll Charges Letter at 2-3.
*° Instructions to the Telecommunications Reporting Worksheet (2007), Form 499-A, at 23-24.
1416

Federal Communications Commission
FCC 07-231
month. Rather, consumers pay on a per-minute basis for e^h call made. For long distance service, the
charges associated with these offerings are often made up of an air time charge that is the same for local
and long distance calls, and an additional toll charge that applies only to long distance calls made to
points outside of the plan-defined home calling area. As with the other wireless offerings, wireless
providers will need to report toll service revenue to the extent they charge additional fees beyond the
airtime charges for calls to points outside the plan-defmed home calling area. Further, as with the
"bucket" plan offerings, additional airtime, roaming, and overage charges must be allocated between the
interstate and intrastate jurisdictions as revenue reported for mobile telephony service."'
B.
Toll Service Revenue Reporting
12. Having defined toll service revenues for purposes of USF contribution obligations, we next
address how, on a going-forward basis, wireless, interconnected VoIP, and other providers should treat
toll service revenues when conducting their traffic studies
ted between the
interstate and intrastate jurisdictions as revenue reported for mobile telephony service."'
B.
Toll Service Revenue Reporting
12. Having defined toll service revenues for purposes of USF contribution obligations, we next
address how, on a going-forward basis, wireless, interconnected VoIP, and other providers should treat
toll service revenues when conducting their traffic studies. We begin by noting that wireless providers
have indicated to the Commission that revenues associated with toll services are identifiable because, for
the provider to generate a bill for the customer, it must have a system that is capable of determining that a
certain call made by a subscriber does not fit within the subscriber's plan-defined home calling area, and
thus should be assessed an additional charge."^ This premise would also hold true for other providers that
are able to identify and charge for calls that fall outside a subscriber's plan-defined home calling area or
local exchange. We also understand, however, that the billing information alone may not in all cases be
sufficient to determine whether the call and associated revenue is interstate/international or intrastate for
purposes of billing a customer due to limitations of a provider's billing system, attributes of a consumer's
calling plan, or for other reasons. The availability of traffic studies for use in revenue reporting remains a
viable means for these providers to determine the percentage of revenue that should be allocated to the
interstate jurisdiction.
13
ue is interstate/international or intrastate for
purposes of billing a customer due to limitations of a provider's billing system, attributes of a consumer's
calling plan, or for other reasons. The availability of traffic studies for use in revenue reporting remains a
viable means for these providers to determine the percentage of revenue that should be allocated to the
interstate jurisdiction.
13. In the 2006 Contribution Methodology Order, we expressed concern that some wireless
providers may not be accurately reporting toll service revenues, and we noted that providers have
incentives to design traffic studies so as to minimize their interstate and international end-user revenues.""
Unlike monthly charges associated with calling plans and associated usage, the revenue associated with
toll service is predominantly a result of domestic long distance and international calling"' and is often
much higher than the per-minute revenue associated with a plan's bucket minutes."® In order to more
accurately reflect the jurisdictional nature of toll service revenue, providers, including wireless and
interconnected VoIP providers, must ensure that toll service revenues are accurately accoimted for by
See id.
See Cingular Wireless Letter at 3; CTIA Member Toll Charges Letter at 2.
See T-Mobile Comments at 4.
** 2006 Contribution Methodology Order, 21 FCC Red at 7534-35, paras. 29-32.
Cingular Wireless Letter at 2-4; CTIA Member Toll Charges Letter at 2-3.
"® For example. Sprint international calling rates range from $.06 to over $2.49 per minute. See
http://www.nextel.com/en/services/worldwide/ratesfromus.shtml (last visited Jan. 2,2(X)8). The Sprint bucket plan
minutes range from as little as $.04 to $.14 per minute depending on the size of the bucket and assuming that all
minutes are used. See http://nextelonline.nextel.com/NASApD/onlinestore/en/Action/SubmitReEionAction (last
visited Jan. 2,2008). Similar per minute charges are found with other wireless providers
n/services/worldwide/ratesfromus.shtml (last visited Jan. 2,2(X)8). The Sprint bucket plan
minutes range from as little as $.04 to $.14 per minute depending on the size of the bucket and assuming that all
minutes are used. See http://nextelonline.nextel.com/NASApD/onlinestore/en/Action/SubmitReEionAction (last
visited Jan. 2,2008). Similar per minute charges are found with other wireless providers. See generally
www.vzw.com.www.cinsular.com (last visited Jan.2, 2(X)8).
1417

Federal Communications Commission
FCC 07-231
appropriately weighting such traffic in the reporting methodology they choose.''^ Wireless and
interconnected VoIP providers may, for example, conduct separate traffic studies on the traffic associated
with toll service charges to determine the percentage of such revenue that is associated with the interstate
and international jurisdiction. Thus, a provider using traffic studies to report revenues could conduct one
study focusing on toll calls to allocate toll service revenue and a separate study of all calls to allocate all
other telecommunications revenues. Conducting two studies should more accurately approximate actual
revenues than a single study that includes all telecommunications revenues. We note that the procedures
adopted in the 2006 Contribution Methodology Order for performing a valid traffic study would apply to
separate toll service traffic studies.^
14. Alternatively, wireless and interconnected VoIP providers may be able to design a single
traffic study that adequately accounts for toll service revenue by properly weighting such traffic.^'
Wireless and interconnect^ VoIP providers could also choose to report toll service revenue based on
actual revenues, while conducting a traffic study excluding toll service calls to address other
telecoirununications revenues.
15
ess and interconnected VoIP providers may be able to design a single
traffic study that adequately accounts for toll service revenue by properly weighting such traffic.^'
Wireless and interconnect^ VoIP providers could also choose to report toll service revenue based on
actual revenues, while conducting a traffic study excluding toll service calls to address other
telecoirununications revenues.
15. Our goal in adopting this flexible approach to allocating toll service revenues by jurisdiction
is to provide contributors, including wireless and interconnected VoIP providers, a means of assuring
compliance with their USF contribution obligations. Regardless of which option is chosen, however, toll
service traffic must be identified and treated in a manner that recognizes that such traffic is more likely to
be interstate or international than intrastate.®" Moreover, appropriate weighting of the higher revenue that
is often associated with toll service must be reflected in the traffic study or studies." Accordingly, any
revenues associated with charges on customer bills that are identified as interstate or international must
effectively be accounted for {e.g., through proper weighting in a traffic study) as 100 percent interstate or
international when reporting revenues in the appropriate block of the Telecommunications Reporting
Worksheets.
IV.
PROCEDURAL MATTERS
16. To request materials in accessible formats for people with disabilities (Braille, large print,
electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer &
Governmental
Affairs Bureau at 202-418-0530 (voice) or 202-418-0432 (TTY). Contact the FCC to request reasonable
accommodations for filing comments (accessible format documents, sign language interpreters, CART,
etc.) by e-mail: FCC504@fcc.gov; phone: 202-418-0530 or TTY: 202-418-0432
s (Braille, large print,
electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer &
Governmental
Affairs Bureau at 202-418-0530 (voice) or 202-418-0432 (TTY). Contact the FCC to request reasonable
accommodations for filing comments (accessible format documents, sign language interpreters, CART,
etc.) by e-mail: FCC504@fcc.gov; phone: 202-418-0530 or TTY: 202-418-0432.
For example, if on average a service provider derives five times as much revenue fi'om an international minute as
it does from an intrastate minute, then it would weight each international minute equivalent to five intrastate minutes
in calculating a single traffic-based percentage to apply to all revenues. To the extent that a provider chooses to use
a weighted traffic study, we again reiterate that such a study must meet the requirements for ensuring accuracy
adopted in the 2006 Contribution Methodology Order. See 2006 Contribution Methodology Order, 21 FCC Red at
7535, n.ll5.
See supra n.47.
^
See supra para. 12.
"
See supra n.47.
1418

Federal Communications Commission
FCC 07-231
V.
ORDERING CLAUSES
17. Accordingly, IT IS ORDERED that pursuant to the authority contained in sections 1, 2,4(i),
4(j), 201,202,218-220, 254, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.
§§ 151,152, 154(i)-(j), 201, 202, 208-220,254, and 303(r), this Order in WC Docket No. 06-122 IS
ADOPTED.
18. IT IS FURTHER ORDERED that the petitions for declaratory ruling filed by CTIA-The
Wireless Association and Cingular Wireless, LLC, ARE GRANTED to the extent discussed herein.
19. IT IS FURTHER ORDERED THAT pursuant to sections 1.2 and 1.103(a) of the
Commission's rules, 47 C.F.R. §§ 1.2,1.103(a), this Order SHALL BECOME EFFECTIVE upon release.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
1419
R ORDERED that the petitions for declaratory ruling filed by CTIA-The
Wireless Association and Cingular Wireless, LLC, ARE GRANTED to the extent discussed herein.
19. IT IS FURTHER ORDERED THAT pursuant to sections 1.2 and 1.103(a) of the
Commission's rules, 47 C.F.R. §§ 1.2,1.103(a), this Order SHALL BECOME EFFECTIVE upon release.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
1419

Federal Communications Commission
FCC 07-231
APPENDIX
Commenters In WC
Docket No. 06-122
Comments
Abbreviation
Qwest Communications International Inc.
Qwest
T-Mobile USA,
Inc.
T-Mobile
United States Cellular Corporation
USCC
Reply Commenters in WC Docket No. 06-122
Renlv Comments
Abbreviation
CTIA -
The Wireless Association
CTIA
Cingular Wireless
Cingular
1420

## Nearby sections

- [DA-00-1341: A&E Television Networks For Declaratory Ruling (06/20/00) A&E Television Networks For Declaratory Ruling](https://www.frixlaw.com/law-library/statutes/FCC_DA_00_1341.md)
- [DA-01-2234: Request for Declaratory Ruling Removing the Commission's Minimum Carrier Tone Requirement for OFDM Modulation in the Multipoint Distribution and Instructional Television Fixed Services (09/26/01) Request for Declaratory Ruling Removing the Commission's Minimum Carrier Tone Requirement for OFDM Modulation in the Multipoint Distribution and Instructional Television Fixed Services](https://www.frixlaw.com/law-library/statutes/FCC_DA_01_2234.md)
- [DA-01-2871: Multi-Association Group (MAG) Plan (12/11/01) Multi-Association Group (MAG) Plan](https://www.frixlaw.com/law-library/statutes/FCC_DA_01_2871.md)
- [DA-02-765: NATIONAL ASSOCIATION OF BROADCASTERS AND ASSOCIATION OF LOCAL TELEVISION STATIONS' EMERGENCY PETITION FOR MODIFICATION OR CLARIFICATION OF BROADCAST CARRIAGE RULES FOR SATELLITE CARRIERS, 47 C.F.R. SECTION 76.66 (04/04/02) NATIONAL ASSOCIATION OF BROADCASTERS AND ASSOCIATION OF LOCAL TELEVISION STATIONS' EMERGENCY PETITION FOR MODIFICATION OR CLARIFICATION OF BROADCAST CARRIAGE RULES FOR SATELLITE CARRIERS, 47 C.F.R. SECTION 76.66](https://www.frixlaw.com/law-library/statutes/FCC_DA_02_765.md)
- [DA-02-2078: Time-Telepictures Television (08/26/02) Time-Telepictures Television](https://www.frixlaw.com/law-library/statutes/FCC_DA_02_2078.md)
- [DA-03-2865: INFINITY BROADCASTING OPERATIONS INC (09/09/03) INFINITY BROADCASTING OPERATIONS INC](https://www.frixlaw.com/law-library/statutes/FCC_DA_03_2865.md)
- [DA-03-4108: Comcast Cable Communications, Inc., Petition for Declaratory Ruling Petition for Revocation of Certification Request for Expedited Consideration (01/06/04) Comcast Cable Communications, Inc., Petition for Declaratory Ruling Petition for Revocation of Certification Request for Expedited Consideration](https://www.frixlaw.com/law-library/statutes/FCC_DA_03_4108.md)
- [DA-04-970: List of Foreign Telecommunications Carriers that Are Presumed to Possess Market Power in Foreign Telecommunications Markets (04/08/04) List of Foreign Telecommunications Carriers that Are Presumed to Possess Market Power in Foreign Telecommunications Markets](https://www.frixlaw.com/law-library/statutes/FCC_DA_04_970.md)
- [DA-04-3201: Amendment of the Commission's Space Station Licensing Rules and Policies (10/06/04) Amendment of the Commission's Space Station Licensing Rules and Policies](https://www.frixlaw.com/law-library/statutes/FCC_DA_04_3201.md)
- [DA-04-3576: Thrifty Call, Inc. Petition for Declaratory Ruling Concerning BellSouth Tariff F.C.C. No. 1 (11/12/04) Thrifty Call, Inc. Petition for Declaratory Ruling Concerning BellSouth Tariff F.C.C. No. 1](https://www.frixlaw.com/law-library/statutes/FCC_DA_04_3576.md)
- [DA-05-140: Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities (01/26/05) Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities](https://www.frixlaw.com/law-library/statutes/FCC_DA_05_140.md)
- [DA-05-148: CLARIFICATION OF RECONSIDERATION PERIOD AND EFFECTIVE DATE FOR TERMINATIONS OF WIRELESS RADIO SERVICE AUTHORIZATIONS (01/21/05) CLARIFICATION OF RECONSIDERATION PERIOD AND EFFECTIVE DATE FOR TERMINATIONS OF WIRELESS RADIO SERVICE AUTHORIZATIONS](https://www.frixlaw.com/law-library/statutes/FCC_DA_05_148.md)
- [DA-05-1618: Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996 (06/09/05) Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996](https://www.frixlaw.com/law-library/statutes/FCC_DA_05_1618.md)
- [DA-05-1667: Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 (06/15/05) Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991](https://www.frixlaw.com/law-library/statutes/FCC_DA_05_1667.md)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FCC_FCC_07_231. Check the current official text before relying on it. Not legal advice.