WASHINGTON—Wireless carriers that plan to use traffic studies to determine their universal-service contributions must maintain all of the necessary data in case the Federal Communications Commission decides to audit the results.
The text of the traffic studies rules is pretty harsh. “We take an additional step to address concerns that wireless-telephony providers who report actual interstate revenues may not be doing so accurately,” according to the FCC. “We note that wireless-telephony providers reported a total of $1.3 billion of toll revenues on their FCC Forms 499-A for 2004. The Bureau of the Census, however, estimates that wireless-telephony providers earned $7.1 billion in long-distance revenues in 2004. Moreover, in 2004, 53 wireless-telephony providers reported a total of $31.7 billion in total end-user telecommunications revenues without reporting a single dollar of toll revenues on their FCC Forms 499-A.”
Indeed, rural wireline carriers have complained bitterly for years that the wireless industry is not paying its fair share into the universal-service fund. The FCC’s Wireline Competition Bureau chief, Thomas Navin, told a gathering of rural wireline operators last week that “companies should not be avoiding their universal-service obligation as a way to get a competitive advantage over another company.” Navin also said some wireless carriers are grumbling about having to submit the traffic studies data.
For its part, the wireless industry does not believe it grumbled about the traffic studies—something it aggressively lobbied for—rather it believes it was seeking clarification on exactly what the FCC required. The rules indicate that carriers wishing to use traffic studies must submit the data, but the instructions on the form used by carriers were unclear. The wireline bureau’s telecommunications access policy division said last week that “traffic studies should include, at a minimum: (1) an explanation of the sampling and estimation methods employed and (2) an explanation as to why the study results in an unbiased estimate with the accuracy specified.”
In June the FCC raised the safe-harbor percentage that the wireless industry can use to pay into the universal-service fund, but the commission said it would continue to allow mobile-phone carriers to also estimate their contribution amounts based on traffic studies.
The decision to raise the safe harbor from 10.9 percent of long-distance revenues to 37.1 percent was expected. The wireless industry had pushed hard for the continued use of traffic studies.
Using traffic studies benefits Verizon Wireless and T-Mobile USA Inc., both of which told the FCC their long-distance traffic is less than 28.5 percent—the amount before the recent increase—of their revenues.
