Attention telecom managers at enterprises that use audio-conference providers: If you’re not already paying the 11.4% Universal Service Fund fee on your conferencing bills, you most likely will be soon. The FCC issued an 11-page order June 27 mandating that Chicago-based audio-bridge provider InterCall Inc. contribute to the USF, despite its protests. And the commission instructed the Universal Service Administrative Company – which runs the USF – to reach out to other teleconferencing service providers by July 27 to advise them they must pay up, too. The FCC order applies to both “stand-alone audio bridging providers” and “integrated teleconference service providers.” Stand-alone providers supply the technology to connect multiple calls without making a telecom connection available, while integrated providers supply both the connection mechanism and the telecom transmission service, explains telecom attorney Colleen Boothby, partner at Levine, Blaszak, Block & Boothby, in Washington, D.C. FCC Ends Debate, Liberal Readings of Law The USF fee is set at 11.4% for the third quarter of 2008. The Universal Service Administrative Company adjusts the contribution rate quarterly depending on the needs of the Universal Service programs, which subsidize phone service for low-income consumers, rural health care providers, schools, libraries and residents in regions of the country where carriers incur high costs to provide service. The Communications Act of 1934 stipulates that every telecom carrier providing interstate telecom services must pay into USF. “Information” service providers, by contrast, are exempt from USF. InterCall argued that its services should be classified as information services because it provides a bridge to connect callers and operator assistance, collects billing and participant information, and enables participants to record, delete, play back, mute and unmute. The FCC responded by ruling that these services are not inextricably integrated with the telecom transmission portion of InterCall’s services. So InterCall – along with other stand-alone and integrated teleconference providers – is deemed to provide telecom services. There’s a chance that your audio conference service read the rules correctly and has been paying USF fees (and has been passing the charges on to you) all along. But many providers interpreted the FCC’s rules loosely in an attempt to avoid paying the fees, Boothby says. Other audio-conferencing services assumed they were covered because they are charged USF fees by their underlying providers, the FCC order says. The FCC’s order put an end to those misconceptions. Conference providers will be charged USF going forward, but the FCC quashed the Universal Service Administrative Company’s attempts to collect USF from these providers retroactively. Negotiate Out of Fees or Host Conferencing In House If USF charges start showing up on your bill in the coming months, check your contract, Boothby advises. Look for a clause prohibiting the audio conference provider from charging you for its cost of doing business. Such a clause could save you from paying the USF fee that service providers will try to add on to your bills. The FCC assesses USF on carriers and doesn’t mandate that they get reimbursed from their customers. Argue that the USF is simply a cost for the provider to do business, Boothby says. If you have verbiage in your teleconferencing service contract that would get you out of paying USF, don’t be surprised if your teleconferencing provider suddenly wants to renegotiate your contract, notes David Roberts, president of telecom finance management firm Teligistics, in The Woodlands, Texas. Some Teligistics clients – like software developers who do training via conference bridges or large companies using bridges to reduce travel – pay as much as $1 million a month for audio conferencing. Do the math. That 11.4% fee could hurt. In fact, if you’re spending more than $30,000 a month on audio conferencing, now might be the time to consider hosting your audio-conference capabilities in house, Roberts suggests. ( | 
