The petitions were brought by two free conferencing providers, who argued that the FCC had misinterpreted the nature of audio bridging service (or at least their audio bridging services). In the reconsideration order, the FCC denies the petitions. While we had hoped that the reconsideration order would provide additional explanation of the rationale for classifying audio bridging as telecommunications, except for a discussion of bundled services, the order does not provide further guidance on the classification of bridging services. As a result, audio conferencing providers will be left with the existing uncertainty for the foreseeable future when making classification decisions.

The FCC Reconsideration Order denies in full the recon petitions submitted by two "free" conferencing providers, Global Conferencing Partners (GCP) and A+ Conferencing. The order affirms the conclusions in the 2008 Classification Order that audio bridging is "telecommunications" and that audio bridging providers must contribute to the USF. With respect to the role of the conference bridge, the FCC does not classify the bridge as a switch or an intermediate point of routing. Instead, it concludes that the bridge facilitates routing, not that it performs the routing itself.

The Commission provides the most guidance in its discussion of additional features of the conference bridge. In the Classification Order, the Commission had found that features such as recording and playback are separate from the audio bridging functionality. In the Reconsideration Order, the FCC reiterated that the question is whether such functions are sufficiently integrated with the telecommunications so as to form a single service. If so, then the entire service can be treated as an information service; if not, then the provider must treat the offering as a bundle of services and perform an allocation of the revenues between the two services.

The Commission briefly referred to two services offered by petitioner GCP -- a "whiteboarding" feature and "other computing capabilities" made available to conference participants -- both of which, the FCC concluded, are offered "simultaneously" with the audio bridging. This was, in the FCC's view, not sufficiently integrated to constitute a single service. Conferencing providers should review any similar services they offer carefully in light of this additional guidance.

The FCC's Wireline Competition Bureau announced the new FCC Form 499A today. This form, which must be used to file the April 1 annual revenue report, includes several potentially significant changes. Audio bridging providers (conference service providers) and those close to the de minimis threshold are most affected.

As of COB yesterday, only the announcement was available. The 499A itself will be released today and I will update this post when it is available. UPDATE: The new Form 499A is available here.

Follow the jump for a discussion of the changes.

According to the public notice, the primary changes are:

* several revisions regarding the obligations of stand-along conferencing providers to pay USF. The FCC added a check box for audio bridging providers, updated their "who pays what" chart to include audio bridging and added a description of audio bridging providers. Last year, the FCC mistakenly referred to audio bridging providers as "telecommunications service providers" and then quickly corrected that error. I will be checking to see if the new guidance is consistent with the Calling Card Classification Order. UPDATE: The form confirms that audio bridging providers offering service on a non-common carrier basis are only subject to USF, and not TRS and other funds. However, on p. 29 (fn 47) the instructions again mistakenly refer to audio bridging as "telcommunications services."

* adjusted the de minimis estimation factor and the circularity factor to account for the new 14% USF contribution factor. This is a sure sign that a USF factor in the 14% range is here to stay. Important Note: The FCC did not adjust the "Limited Interstate Revenues Exemption" (LIRE) threshold, even though the USF factor now exceeds the threshold. Thus, there is a possibility that a carrier's interstate revenue percentage will exceed 12% but the carrier will still pay more in USF than its total interstate revenues. Such a result was declared unlawful by the 5th Circuit Court of Appeals in 1999.

* "added more specific language, consistent with the body of the text" to require CMRS and interconnected VoIP providers to submit traffic studies if they are not relying upon the safe harbor percentage of interstate calling. The filing obligation (not a prior approval requirement) has existed for some time, but compliance with it was low. I expect this will be an area for enforcement inquiries this year.

More when the Form is released. Stay tuned.