Payphone Audit and Reporting Requirements Waived Through 2018 as FCC Considers Their Elimination

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At yesterday’s Open Meeting, the Federal Communications Commission (FCC or Commission) adopted a Notice of Proposed Rulemaking (NPRM) that proposes to eliminate the Commission’s payphone call tracking system annual audit and reporting requirements.  FCC rules require carriers that complete coinless and toll-free calls to track and compensate payphone providers for these calls.  These carriers must also conduct and file an annual audit report prepared by an independent third-party to verify compliance.  However, completing carriers have informed the FCC that the annual audit and associated reporting requirements cost a significant amount of, if not more than, the compensation they actually owe to payphone providers.  Due to these cost concerns and the fact that compliance with the underlying compensation obligation does not appear to be a problem, the Commission proposes eliminating these requirements and seeks input on replacing them with a less burdensome alternative, such as self-certification.  The FCC also adopted an accompanying Order that waives the audit and reporting requirements through 2018 while the Commission considers their permanent elimination.  Neither the NPRM nor the Order affects carriers’ obligations to appropriately compensate payphone providers.  Comments on the NPRM and Order are due 30 days after, and reply comments are due 60 days after, the date of publication in the Federal Register, which has not yet occurred.

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