Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C

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1 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C ) In the Matter of ) ) Request for Review by ) WC Docket No MeetingOne.com Corp. of Decision of ) Universal Service Administrator ) ) COMMENTS OF INTERCALL, INC. InterCall, Inc. ( InterCall ), through its undersigned counsel and pursuant to the Bureau s Public Notice, DA , in this docket, respectfully submits these comments in response to MeetingOne.com Corp. s ( MeetingOne ) Request for Review of a Decision of the Universal Service Administrative Company ( USAC ) finding that Meeting One is subject to universal service contributions for past and future revenues associated with MeetingOne s audio bridging service. 1 As discussed below, the Commission s 2008 Audio Bridging Order sought to create a level playing field for all providers of audio bridging services with regard to universal service obligations. With the contribution factor in the percent range, it is critical that the Bureau provide clear guidance on what services are and are not subject to USF contributions. While MeetingOne contends that its service is not subject to USF contributions, InterCall understands the rules to make such services subject to USF contributions. As a result, 1 MeetingOne.com Corp. Request for Review of a Universal Service Administrator Decision, WC Docket No (filed May 3, 2010) ( Request for Review ). See Public Notice, Comment Sought on MeetingOne s Request for Review of a Universal Service Contribution Decision by the Universal Service Administrative Company, DA (rel. May 7, 2010).

2 InterCall reports these revenues on its Form 499s and applies an USF contribution recovery surcharge on its assessable services. In order to remedy the competitive distortions created in the market by the unequal application of universal service obligations, InterCall urges the Bureau swiftly to clarify providers contribution obligations. While InterCall believes that the Audio Bridging Order encompasses services such as those similar to MeetingOne s, if the Bureau nevertheless determines that such services are not subject to contribution obligations, it must permit entities like InterCall, who paid USF on the subject revenues, to modify their reporting forms so as to apply the contribution obligations of all audio bridging providers on an equal basis. I. BACKGROUND In June of 2008, the Commission released an Order classifying stand-alone audio bridging services for USF purposes. The Order required InterCall and all similarly situated audio bridging service providers to contribute directly to the universal service fund ( USF ). 2 In addition, the Commission stressed that the uniform application of USF obligations to all audio bridging providers served the public interest by establishing a level playing field and encouraging open competition among providers of audio bridging services. 3 As a result, the Commission directed USAC to implement the Audio Bridging Order with respect to all audio bridging service providers, regardless of whether the service is provided on a stand-alone or an integrated basis. 4 The Commission further instructed USAC to contact teleconferencing service providers to ensure that such providers properly contribute to the USF from that point forward Request for Review by InterCall, Inc. of Decision of Universal Service Administrator, Order, 23 FCC Rcd (2008) ( Audio Bridging Order ). Audio Bridging Order, 25 (emphasis supplied). Id. Id., 9. 2

3 The Audio Bridging Order furthers a critical policy objective of the Communications Act (the Act ): to ensure the competitively neutral application of universal service rules. Section 254 of the Act requires the Commission to implement rules that ensure telecommunications carriers and other providers of telecommunications contribute on an equitable and nondiscriminatory basis to the specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service. 6 The statutory mandate was designed to ensure that no entity gains a competitive advantage or is placed at a competitive disadvantage due to the application of federal universal service contribution obligations. As InterCall argued in its own appeal of a USAC decision two years ago, once the Commission determined the proper classification of audio bridging, it was obligated to implement that ruling on an equitable basis across all audio bridging providers. After the Audio Bridging Order, InterCall understands that USAC contacted a number of teleconferencing providers to ensure even application of the Order. MeetingOne and USAC engaged in correspondence on this issue, with MeetingOne taking the position that it was not subject to direct universal service contributions since its conference calling services were information services. 7 On March 3, 2010, USAC rejected MeetingOne s argument, finding that MeetingOne s services constituted not an information service, but a telecommunications service. 8 USAC found that, because of the similarities between MeetingOne s service and that of audio bridging services and interconnected VoIP services, both of which are subject to See 47 U.S.C. 254(d) (emphasis supplied). See Letter from Trent Martinet, Counsel to MeetingOne.com Corp., to USAC (Oct. 15, 2009). Letter from USAC, to Trent Martinet, Counsel to MeetingOne.com Corp. (Mar. 3, 2010), p. 4 ( USAC Decision ). 3

4 USF contribution obligations MeetingOne is also obligated to contribute to the USF. 9 Following the USAC Decision MeetingOne petitioned the Bureau to review USAC s Decision. II. THE BUREAU MUST APPLY THE AUDIO BRIDGING ORDER IN A COMPETITIVELY NEUTRAL MANNER Section 254 of the Act requires that universal service obligations be imposed upon carriers on an equitable and nondiscriminatory basis. 10 In the Audio Bridging Order, the Commission determined that audio bridging service providers should contribute to the universal service fund based on their revenues derived from audio bridging. 11 MeetingOne s appeal represents the first opportunity for the Bureau to ensure even application of that ruling. MeetingOne contends that its audio bridging service is different from the audio bridging services offered by InterCall and those addressed in the Audio Bridging Order. In particular, MeetingOne contends that its services are exclusively provided over the Internet and are not dependent on the PSTN, and indeed do not touch the PSTN directly. 12 MeetingOne acknowledges that end users dial PSTN numbers to reach an IP gateway operated by a third party, who then converts the call to IP before handing it off to MeetingOne. 13 Other than the use of IP technology, however, MeetingOne s services mirror that of traditional audio bridging services. InterCall understands the Audio Bridging Order to encompass services provisioned in the manner described by MeetingOne. Like traditional audio bridging services, MeetingOne s services enable end users to access the bridge from ordinary telephones by dialing Letter from USAC, to Trent Martinet, Counsel to MeetingOne.com Corp. (Mar. 3, 2010), pg. 2-3 ( USAC Decision ). See 47 U.S.C. 254(d) (emphasis supplied). Audio Bridging Order, 26. MeetingOne Request for Review, p. 3. Id., p

5 an ordinary PSTN toll-free number. The end user then interacts with a conference bridge, which enables the user to communicate with other participants and to obtain additional services such as call recording, in a similar fashion as other audio bridging services. Despite MeetingOne s arguments to the contrary, InterCall believes MeetingOne s service is subject to universal service fund contribution obligations just as are other audio bridging services. Perhaps the best analogue to MeetingOne s services and the appropriate regulatory framework is that contained in the Commission s IP-in-the-Middle Order. 14 In that case, AT&T s IP telephony services initiated as a call by a traditional caller on the PSTN. When the call reached AT&T s network, AT&T converted it from its existing format into an IP format, delivered the converted call over the Internet, converted it back out of IP format and then delivered it to the third party. 15 Only the protocol conversion in the middle differentiated AT&T s technology from a traditional circuit-switched call. Since end-users did not place or receive calls any differently than they did through AT&T s circuit-switched services, the Commission found these conversions to be internetworking conversions, or conversions taking place solely within the carrier s network to facilitate the provision of a basic network service. 16 Since end-users did not experience the service as different in any way than a traditional call, the fact of an internal protocol conversion was found insufficient to render the Petition for Declaratory Ruling that AT&T's Phone-to-Phone IP Telephony Services are Exempt from Access Charges, WC Docket No , FCC 04-97, 19 FCC Rcd 7457 (2004) ( IP-in-the-Middle Order ). Id. 1. Id. 12; see also Implementation of the Non-Accounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended, CC Docket No , FCC , 11 FCC Rcd 21905, 106 ( no net protocol conversion services constitute telecommunications services, rather than information services, under the 1996 Act ). 5

6 service an information service. As a result, the Commission found that AT&T s service was properly classified as telecommunications service. 17 Here, too, MeetingOne s callers place a call from a traditional phone to a PSTN number. Then, unbeknownst to the callers, their call is converted into IP packets for interaction with MeetingOne s conference bridges. Communications from the conference bridge to the caller are reconverted from IP packets and delivered back to the participant over the PSTN. MeetingOne s offerings, though routed using different technology than that of a plain old telephone conferencing call, bears the same result: routing ordinary telephone calls by creating a transmission channel chosen by the user. As a result, MeetingOne s offerings constitute telecommunications properly within the scope of the Audio Bridging Order. Thus, in order to ensure that the Order is applied on a competitively neutral basis for these similarly situated technologies, the Bureau should affirm the applicability of universal service obligations to MeetingOne. The argument that the PSTN is not a necessary component of MeetingOne s audio conferencing technology 18 is also unconvincing. Without access to the PSTN, what would remain of MeetingOne s services? Even though MeetingOne s bridges appear capable of supporting direct SIP-based connections, MeetingOne itself admits that MeetingOne has not yet made [its]service available to individual computer users. 19 Thus, MeetingOne s service today is totally dependent on the PSTN to function. The mere possibility of enhanced service at some point in the future is insufficient to transform its classification. Just as the Commission held in the IP-in-the-Middle Order, a telecommunications service does not become an information Id. Request for Review, p. 14. Id. (emphasis supplied). 6

7 service due to its future potential to provide enhanced functionality and net protocol conversion. 20 Thus, the argument that MeetingOne is not reliant on the PSTN is misplaced, as it is the sole means by which MeetingOne s services are ultimately routed among callers. USAC was correct to find that MeetingOne was obligated under the Audio Bridging Order to contribute to the USF. As noted in the USAC Decision, the FCC does not specify any particular technology or platform in the Audio Bridging Order. 21 Thus, MeetingOne s argument attempt to differentiate its technological offerings from the exact technological offerings discussed by the Commission in reaching the Order are largely besides the point. 22 The policy enunciated by the Commission in the Audio Bridging Order and similar Orders demonstrate that the Commission should look beyond the exact technological arrangement underlying the service and focus instead on the service itself. Focusing on the interchangeable nature of the services offered is particularly important in the audio bridging industry. Audio bridging is extremely competitive, with dozens of stand-alone providers, several integrated carrier-providers (such as AT&T) and numerous web conferencing alternatives. The decision whether to apply USF contribution obligations to a service can have a significant impact on the competitive position of a service. InterCall, as explained above, interprets the Audio Bridging Order to apply to PSTN-originated audio conferences, and InterCall applies USF when it provides service in a manner similar to MeetingOne. Nevertheless, InterCall faces competition from MeetingOne and many others, including carrier-providers of audio conferencing that do not apply the USF contribution IP-in-the-Middle Order, 13. USAC Decision, p. 3. Request for Review, p (differentiating MeetingOne s specific technology from that employed by time division multiplexing-based conferencing, IP-in-the-Middle and interconnected VoIP services). 7

8 obligation. If the Bureau accepts MeetingOne s arguments, some audio bridging services will enjoy an effective percent price advantage over equivalent services, an outcome that Section 254(d) is designed to prevent. Accordingly, it is important for the Bureau to decide MeetingOne s appeal as quickly as possible. The different interpretation taken by MeetingOne and other audio bridging providers is conferring a short-term competitive advantage on those providers, to the detriment of providers such as InterCall that apply the USF to the equivalent services. III. THE BUREAU S RESOLUTION OF MEETINGONE S REQUEST SHOULD APPLY RETROACTIVELY TO THE EFFECTIVE DATE OF THE AUDIO BRIDGING ORDER When the Commission extended universal service obligations to conference call service providers in 2008, it emphasized that the Order applied to all audio bridging service providers. 23 Soon thereafter, the Commission issued a Public Notice that audio bridging carriers were required to begin filing directly with the universal service administrator as of August 1, The Bureau s resolution of the MeetingOne appeal should similarly apply to all audio bridging service providers. In addition, regardless of which way the Bureau rules, InterCall believes that its ruling should apply to all services provided from the date on which stand alone audio bridging providers were added to the contribution base. Regardless of whether the Bureau determines that MeetingOne should contribute to the USF or whether it determines that the services are not subject to the USF, InterCall Audio Bridging Order, 25, 26 ( We reiterate that all similarly-situated providers, i.e., stand-alone teleconferencing providers as well as integrated teleconferencing providers, are at a minimum, providers of telecommunications for the purposes of contributing to the universal service fund ) (emphasis supplied). Public Notice, Audio Bridging Service Providers to Begin Filing FCC Form 499-Q on August 1, 2008, DA (July 17, 2008). 8

9 believes that the reasoning of the Audio Bridging Order requires uniform application of the ruling retroactive to the October 2008 effective date of the Order. InterCall disagrees with MeetingOne s assertion that the uncertainty it identifies regarding its obligations requires prospective treatment of the Commission s ruling. As such, the MeetingOne s situation is unlike that in the Audio Bridging Order in this key respect. In InterCall s case, the Commission acknowledged that it was unclear to the industry at the time whether teleconferencing providers possessed a direct universal service contribution obligation. 25 The Commission attributed this uncertainty in significant part to certain Commission proceedings that may have contributed to the lack of clarity regarding the direct contribution obligations of audio bridging service providers. 26 As a result, the Commission found that this unique instance warranted the prospective application of the Commission s Order. 27 MeetingOne s request, on the other hand, involves a more typical interpretation of a prior Commission order. MeetingOne does not identify any unique circumstances that would support prospective application of the Bureau s resolution. Moreover, the potential competitive advantage that could be gained by MeetingOne if the order were applied prospectively countenances against such an outcome here. Section 254 s requirement of equitable and nondiscriminatory application of USF rules requires that the Bureau apply its interpretation to all services provided since the Audio Bridging Order Audio Bridging Order, 23, 24. Id., 25. Id., 24. If, however, the Bureau decides that USAC s decision should only be applied prospectively, InterCall requests that the Bureau waive USAC s one year revision deadline in order to allow similarly situated companies to restate their Form 499s to reflect the Bureau s holding in this matter. 9

10 CONCLUSION{ TC \l "1" } For the reasons discussed above, MeetingOne s audio bridging services are similarly situated to those of audio bridging service providers who currently contribute directly to the universal service fund. As a result, InterCall believes that MeetingOne s services are subject to the Audio Bridging Order. In order to establish a level playing field for all competitors in the audio bridge industry, the Bureau should clarify the application of the 2008 Audio Bridging Order as quickly as possible. Regardless of which interpretation the Bureau reaches, it should apply its ruling equally to all services provided since the effective date of the Audio Bridging Order. Respectfully submitted, INTERCALL, INC. Steven A. Augustino Aaron M. Gregory * Kelley Drye & Warren, LLP 3050 K Street, NW, Suite 400 Washington, D.C Telephone: (202) ) Its Attorneys Date: June 7, 2010 * Not admitted to the District of Columbia Bar. Practicing under the supervision of principals of the firm who are members of the D.C. bar. 10

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