Is Your Voice Provider Compliant with FCC Regulations?

Studies show that more than two-thirds of businesses use an Internet-based voice service such as Voice over IP (VoIP) or unified communications (UC). That number continues to increase. According to Global Market Insights, the VoIP market is expected to see a compound annual growth rate of 10 percent through 2032.

Organizations adopt VoIP because it saves money, increases productivity and provides a range of value-added features. It gives them the option of replacing on-premises PBX hardware with a cloud-based, pay-as-you-go service. Work-from-home and mobile employees can access business phone services from almost anywhere — a necessity in today’s remote and hybrid work environment.

However, if your voice provider is not compliant with Federal Communications Commission (FCC) regulations, your organization could be at risk. In this series of posts, we’ll discuss some of the regulations VoIP providers are expected to comply with and the potential ramifications of noncompliance.

The Universal Services Fund

The Universal Services Fund (USF) was established by the Telecommunications Act of 1996 and is managed by the FCC. The law requires telecommunications companies to contribute a percentage of their interstate and international revenues to the USF. This includes VoIP providers as well as traditional wireline and wireless carriers. Telecom companies can choose to pass along this cost to their customers, who will see a universal service charge on their bills.

The money is used to promote nationwide access to affordable, high-quality telecom services. Specifically, the USF helps make services available to consumers in low-income, rural and high-cost areas at rates roughly comparable to urban areas. It also provides funding for schools, libraries and rural healthcare facilities to purchase certain types of technologies.

USF Compliance

Not all VoIP providers realize they’re responsible for paying USF fees. Many resell voice services provided by telecom carriers, and the carrier may be charging the VoIP provider a USF fee. But if the VoIP provider adds a markup to the voice services, the VoIP provider needs to pay a USF fee on the difference. Some VoIP providers may also be passing along the fees to their customers but not paying them into the USF fund.

There are reporting requirements as well. Voice providers must report their USF fees quarterly, and the location of their phone lines semiannually. If the voice provider has customers spread across a large area, the reporting becomes highly complex.

Providers who do not comply with these requirements face an increased risk of an FCC audit. As more customers have moved their voice services from private line circuits to broadband, the FCC has increased the number of audits, inspections and fines. If the FCC finds that a provider is noncompliant, that provider will likely be assessed hefty penalties and could even be shut down. Ultimately, the provider’s customers risk losing their vital voice services.

How GDS Maintains Compliance

GDS is a competitive local exchange carrier (CLEC). We don’t just resell voice services — we are an FCC-authorized telecom provider. We assess and pay the USF fees and complete all required federal reporting.

GDS is an FCC-authorized telecom provider.

There are other federal, state and local requirements as well. For example, every organization with a multiline telephone system must comply with Enhanced 911 (E911) regulations. In addition to the federal requirements, we comply with monthly E911 reporting requirements and fees at the county and municipal levels. There are also Telecommunications Relay Services requirements that help ensure folks who are deaf, hard of hearing, deafblind or have speech disabilities can communicate by phone.

Our customers have a wide footprint, so our compliance requirements cover 38 states and counting. Because of the complexity, we work with expert consultants who assist us with the reporting. We spend significant time, money and effort on compliance to protect our customers from potential risk.

In our next post, we will discuss compliance with the new STIR/SHAKEN compliance requirements for robocall prevention.

Benefits of Managed IT Services from Global Data Systems

• Strategic Managed IT: We help you solve your technology related business problems.
• Connectivity: We get you reliable, secure connectivity anywhere in the western hemisphere in 48 hours.
• Support: When you need help simply call our 24x7x365 support number.
• Billing: Instead of managing hundreds of vendors - get one, easy to read bill from GDS.

Contact Managed Services Provider, Global Data Systems >