FCC Announces New Forfeiture Methodology for Federal Program Payment Rule Violations

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Telecommunications service providers are required to pay federal regulatory fees and make timely contributions to the Universal Service Fund (USF), the Telecommunications Relay Service (TRS) Fund, and the cost recovery mechanisms for local number portability (LNP) and the North American Numbering Plan (NANP).  The Federal Communications Commission has reevaluated its methodologies for calculating forfeitures for violation of the USF and other federal program payment rules after finding that its current methodologies were overly cumbersome and prevented the Commission from taking swift enforcement action.

The Commission previously assessed forfeitures for payment violations based on the number of monthly bills that remain unpaid within the one-year statute of limitations.  For USF and TRS violations, the Commission has added an upward adjustment of 50% of the delinquent company’s unpaid contributions.  In order to determine forfeiture liability under this approach, Commission staff must engage in a forensic accounting-type process that is both time-consuming and resource-intensive.  Under the new approach, each violator’s apparent base forfeiture liability will be three times the delinquent contributor’s debts to the USF, TRS, LNP, NANP, and regulatory fee programs.  The Commission noted that this approach would allow it to perform more investigations and provide for increased compliance.

 

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