Recently, VoIP providers have become ensnared in regulatory non-compliance issues with increasing frequency. The FCC's enforcement bureau has assessed fines for companies that fail to make required reports in a timely manner. But many VoIP providers remain unaware that some of the FCC's reporting requirements apply to them, even if they are not otherwise regulated by the FCC. These fines can be significant and the FCC will not consider failure to know the requirements as an excuse for non-compliance. For years, due to their size and the regulatory uncertainty surrounding VoIP, VoIP providers escaped regulatory scrutiny. For the most part, VoIP providers have not been and are not required to hold federal or state licenses in order to offer VoIP voice and data services. But the lines between traditional telephony and VoIP continue to be eroded and VoIP providers are subject to increasing regulation. And with that new regulation, VoIP providers must increase their vigilance to ensure that compliance issues do not affect their transactions and on-going operations. Issues to look out for include:
1) USF issues. VoIP providers should have been submitting FCC Form 499A’s and contributing to USAC, if required. 2) Broadband/VoIP reporting requirements. Providers of broadband and VoIP services are required to make Form 477 filings twice a year. The FCC has recently indicated that non-compliance with this requirement may result in fines in excess of $10,000.
2) CPNI compliance. Many VoIP providers do not have appropriate plans in place or have failed to submit the yearly self-certification for treatment of Customer Proprietary Network Information (CPNI).
3) State Compliance filings. Although state certification is generally not required, many VoIP providers are unaware that they are still required to submit certain state required reports Such as E911 reports.
4) Services not solely VoIP. While an entity may have started out as VoIP only, providers sometimes expand their operations into the provision of regulated telephony without realizing it – creating state and federal licensing issues.
5) Miscellaneous Billing and customer notice issues. As VoIP carriers combine with more traditional providers, regulatory hurdles can arise when the entities try to reconcile their regulatory requirements.