MPLS is a technology that enables Internet protocol networks to make routing decisions based on user-assigned labels. MPLS is employed in many advanced data networks in order to provide users with highly-flexible, secure "virtual" networks. Unfortunately, several controversies have developed over whether an MPLS-based service is a regulated "telecommunications service" or an unregulated "information service."

The coalition carriers acknowledge this issue, and urge the FCC to initiate a rulemaking to address the proper treatment going forward:

we explained that as a class of services, many MPLS-enabled services in fact have the characteristics of information services and are treated as such. Regardless, we said that to settle uncertainty the Commission should address the treatment of MPLS-enabled services in either its expected upcoming Notice of Proposed Rulemaking regarding universal service contributions or a different rulemaking proceeding in order to establish clear rules and expectations should the Commission decide to seek contributions on services based on MPLS. We suggested it would be appropriate for the Commission to address MPLS-enabled services going forward in order to ensure consistent prospective treatment throughout the industry.

This is not the first MPLS-related request to be submitted to the FCC. The Commission has a USF appeal that presents the issue (available in parts here: part 1, part 2, part 3, part 4) and has a Petition for Clarification regarding statements it made in its FCC Form 499-A (for USF revenue reporting).

FULL DISCLOSURE: Kelley Drye represents XO Communications Services in its MPLS-related USF appeal.

• The instructions now explicitly instruct telecommunications carriers to report revenues from MPLS-based services as telecommunications services (i.e., subject to USF). The Bureau asserts that MPLS is merely “an updated technique” and a substitute for ATM transmission.
• The instructions add conference service providers (CSPs) to the list of entities that must file. The Bureau initially referred to conferencing services as “telecommunications services,” but quickly revised its notice to state that conferencing is merely “telecommunications.”

Telecommunications carriers must file their 499-A by April 1, 2009. April 1 also is the last day for carriers to revise their 2008 499-A (reporting 2007 revenues).