On 4/15/2014 5:12 PM, Tom DeReggi wrote:
Guys,
I've been out of the loop for a couple years, regarding current status
of CAF/USF/Tax requirements for WISPs. I was surprised when I
recieved my first bill from my new upstream fiber provider.
(they are a dark fiber provider, recently expanded to also offer metro
ethernet IP)
Note: I do NOT buy IP Transit from this provider, nor Last mile Fiber.
I am just buying a Point-to-Point Fiber Transport data link.
So I consider this a wholesale component or infrastructure component,
not an End User Internet circuit.
In the past, my Fiber providers never charged me any Taxes or USF.
I was under the impression that as a WISP (Im not a CLEC) providing
Broadband only services, I didnt need to collect or pay into USF, CAF,
or State Taxes. And further, my Upstream should be exempt from having
to pay and/or collect such fees from me. If so, I need to provide
legal documentation to support my claim to my upstream.
Nope. USF is applied to jurisdictionally-interstate
"telecommunications". Not "information service", which is what an ISP
provides. But a point to point link is a classic example of a
telecommunications service, ye olde private line updated to fiber. And
since it is carrying Internet traffic, which is interstate (>10%), the
circuit is interstate, and thus taxable.
Disclaimer: IANAL; this is just how I understand it.
If you were a CLEC and collected USF yourself, then your upstream links
would be wholesale, and you could show them the FCC web site entry
proving you paid USF, exempting you from paying them and exempting them
from collecting from you. USF is collected once, by the last
non-de-minimis telecom provider in the sales chain. So your provider
correctly sees you as an end customer of telecom and thus has to collect
it from you.
IP transit is something else, not covered by USF.
THe new fiber provider is trying to charge me....
The Federal USF stated was about 16.5% of monthly fiber cost.
The VA Communication Tax was about 6% of monthly fiber cost.
The Property Tax / Franchise/Row Recovery Fees 0.08% of monthly fiber
cost.
First, I thought it was federal law that Broadband can not be taxed by
the State.
Second, the USF amount stated was 16.5%, but in the past, when USF was
applicable it was always only around 6%.
That circuit isn't "broadband", it's just a private line. What you do
with it is your business; USAC wants their cut. And the price has been
over 15% for years now. It skyrocketed in 2006 when Bell DSL was
declared to be purely an information service and thus exempt, vs. before
that when it had a legally-separate telecom component (the raw DSL that
an ISP could get out of the Special Access tariff). And the total
dollar value of long distance phone calling has gone down, so the huge
money paid to rural ILECs is divided by a smaller revenue base.
Note: I do NOT buy IP Transit from this provider, nor Last mile Fiber.
I am just buying a Point-to-Point Fiber Transport data link.
So I consider this a wholesale component or infrastructure component,
not an End User Internet circuit.
So questions are....
1) Am I exempt as a WISP.
2) Is there a standard government form I can provide to my uptream, to
document my exemption (similar to use tax resell certificate)
You aren't exempt, since you aren't collecting it from your customers.
What you're buying and what they're being taxed on isn't "broadband".
3) Is CAF in effect now (Broadband providers paying into USF) and if
so, what is the current % rate?
CAF doesn't really change who pays in; it changes what's paid out,
if/when it takes full effect.
4) Does it matter how my upstream classifies themselves versus how I
classify myself? (for example, if they've obtained CLEC status or not,
or im not a CLEC).
Being CLEC probably doesn't matter. USF comes after you if you even
smell remotely like interstate telecommunications and aren't clearly
exempt. Those rural ILECs need somebody to pay for their
$250/month/line subsidies.
5) Does it matter how I use the circuit?
If it were purely intrastate (e.g., to connect two locations of a
company for PBX remote extensions), it would not be jurisdictionally
interstate, which triggers federal USF. Of course some states have
small USFs of their own.
6) Any specific FCC code to point to, that specifies this clearly?
Figured Id ask, before I go searching through regulation code.
If it's a tough call, this is best left to lawyers who've fought it out
with USAC, or followed those cases. Case law is more important than
black letter rules.
--
Fred R. Goldstein k1io fred "at" interisle.net
Interisle Consulting Group
+1 617 795 2701
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