Now that paging carriers must make Universal Service Fund contributions, even though they are ineligible to withdraw money from it, many are adding new charges to customer bills to recoup those fees-and the charges are not just for end users.
Some carriers have extended this practice to resellers as well, a move threatening to deepen animosity between the two industry segments.
The USF contribution amount is 3.91 percent of all 1997 receipts. Carriers’ decisions to pass that cost along to end users is a competitive decision and one that is hard to resist, considering the paging industry is striving for greater profitability. Operators such as Paging Network Inc. already have voiced their plans to raise prices across the board, anyway.
The Federal Communications Commission recently issued literature informing customers of the USF charge and explaining that some carriers may require their subscribers to cover some of, all of, or even more than the total fee.
For their part, paging carriers have sent letters to resellers informing them of the USF payments and their obligations. Some stated they already have begun billing resellers to recoup the charge, while others said they would not.
The Universal Service Report and Order states that all types of telecom carriers must contribute in some way to the fund, including resellers. But some resellers and other telecom entities may be exempt from contributing directly under the de minimis clause.
This clause states that if 3.91 percent of a reseller’s 1997 end-user receipts is less than $10,000, that reseller is exempt from paying directly into the fund. This was primarily an FCC maneuver to reduce the administrative costs and time for processing the USF worksheets contributors must complete.
But it doesn’t mean de minimis-exempted resellers don’t have to pay. According to paragraph 298 of the Universal Service Report and Order, resellers that qualify for the exemption must then be considered end users and their carrier is then responsible for that contribution. The law states the reseller must notify the carrier it is exempt so the carrier can then charge it appropriately.
This way, the FCC can collect the USF contributions of several smaller resellers lumped together in one paging carrier’s worksheet. Since they do not know which of their resellers qualify for the exemption and which do not, some carriers have begun billing all resellers as if they were end users.
Carriers such as PageNet, Paging Partners Corp. and others sent letters to resellers informing them the carrier has included a USF charge on all bills and will continue to do so unless the reseller sends in proof that it is paying directly to the fund.
“As a convenience to our resellers, PageNet, as of March 1, 1998, will include a Universal Service Fund charge on your monthly bill, which assumes you are exempt from direct remittance to the FCC,” read PageNet’s letter.
Other carriers, such as TSR Wireless Inc., said it would only begin charging exempt resellers once the carrier received confirmation of the de minimis exemption.
Resellers that believe it would be best to decline informing carriers of their exemption should note that carriers are required to provide a list of all their resellers to the FCC.
“Please be aware that PageMart Wireless is not responsible for, and is not required to determine whether you are subject to the Universal Service Order and, if you are subject to the order, to administer any required reporting or contributions to the FCC’s Universal Service Fund,” read a letter PageMart sent to resellers.
