DEVELOPMENT OF NATIONWIDE BROADBAND DATA TO EVALUATE REASONABLE AND TIMELY DEPLOYMENT OF ADVANCED SERVICES TO ALL AMERICANS, IMPROVEMENT OF WIRELESS BROADBAND SUBSCRIBERSHIP DATA, AND DEVELOPMENT OF DATA ON INTERCONNECTED VOIP SUBSCRIBERSHIP.   FCC Expands, Improves Broadband Data Collection.  by FNPRM. (Dkt No.  07-38). Action by:  the Commission. Adopted:  03/19/2008 by R&O. (FCC No. 08-89).  WCB
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Reporting Requirements for Interconnected VoIP Service Providers

25. In the Data Gathering Notice, we noted that only some providers of interconnected VoIP services were required to report information on Form 477. In order to gather complete information on interconnected VoIP service adoption, the Data Gathering Notice sought comment on how to collect information on the number of interconnected VoIP subscribers in the least burdensome manner. Specifically, the Data Gathering Notice sought comment on whether to require providers of interconnected VoIP service to report information on the number of end-user subscribers in individual states, on the percentage of the subscribers who are residential, and on whether or not the service is provided over a broadband connection provided by the filer or by the filer's affiliate.

26. Interconnected VoIP service subscribers represent an important and rapidly growing part of the U.S. voice service market, and interconnected VoIP services are becoming increasingly competitive with other forms of local telephone service. Under the Commission's current reporting rules, end-user subscriptions to interconnected VoIP services are substantially underreported, which distorts the Commission's view of the extent of interconnected VoIP service deployment and uptake, and potentially distorts the Commission's picture of the U.S. voice service market. Our predictive judgment is that, if we did nothing to update our reporting rules, these distortions would continue to grow.

27. We conclude that we have the authority under Title I of the Act to impose reporting obligations on providers of interconnected VoIP service, and are justified in exercising this authority. Ancillary jurisdiction may be employed, in the Commission's discretion, when Title I of the Act gives the Commission subject matter jurisdiction over the service to be regulated and the assertion of jurisdiction is “reasonably ancillary to the effective performance of [its] various responsibilities.” Both predicates for ancillary jurisdiction are satisfied here.

28. First, as we concluded in previous orders, interconnected VoIP services fall within the subject matter jurisdiction granted to the Commission in the Act. Second, our analysis requires us to evaluate whether imposing reporting obligations is reasonably ancillary to the effective performance of the Commission's various responsibilities. Based on the record in this matter, we find that requiring interconnected VoIP service providers to report

• the number of subscribers they serve (both end user and for resale),
• the percentage of these who are residential, and
• whether the interconnected VoIP service is provided over a broadband connection provided by the filer or by the filer's affiliate

is reasonably ancillary to the effective performance of the Commission's various responsibilities under the Act. The Commission has a responsibility under section 706 of the Telecommunications Act of 1996 to encourage the deployment on a reasonable and timely basis of advanced telecommunications capability. Furthermore, the Act specifically authorizes the Commission to require annual reports from all carriers subject to the Act, as well as to require the production of other information necessary to enable the Commission to perform the duties and carry out the objects for which it was created.

29. The Commission's primary goal underlying the reporting requirements is the identification of unserved and underserved areas with respect to advanced telecommunications capability. Our ability to perform the Commission's functions related to this objective depends upon our having adequate information about deployment and uptake of advanced telecommunications capability. As explained above, we do not believe it is possible to obtain an accurate view of the U.S. voice service market without gathering data about interconnected VoIP service subscribers. Thus, the Commission's continued ability to exercise its responsibilities – such as identifying unserved and underserved markets – depends in part on requiring interconnected VoIP providers to report the number of end-user and resale subscribers they serve, the percentage of these who are residential, and whether the interconnected VoIP service is used over a broadband connection provided by the filer or by the filer's affiliate . Thus, we conclude that imposing these reporting obligations is reasonably ancillary to the effective performance of our responsibilities.

30. Commenters noted that interconnected VoIP services are becoming increasingly competitive with local telephone service, and that it is appropriate to collect information on subscriptions, including the number of connections and the percentage of those connections that are residential, in order to determine the extent of competition posed by the services. Verizon filed the lone objection to recording this information. We conclude that gathering the number of end-user and resale subscribers to interconnected VoIP service and the percentage of those subscribers who are residential would provide valuable information that would enable the Commission to track deployment and adoption of interconnected VoIP service across the nation. Accordingly, we modify Form 477 to require providers of interconnected VoIP service to report information about the number of end-user and resale subscribers they have in individual states, and the percentage of the subscribers who purchase the provider's residential grade service plan. Additionally, to collect useful information as set forth in the Data Gathering Notice, we modify Form 477 to require providers of interconnected VoIP service to report a list of 5-digit ZIP Codes within each state in which they have at least one subscriber. This requirement achieves regulatory parity across technologies that offer voice-grade equivalent lines or channels.

31. Furthermore, as mentioned above, the Data Gathering Notice sought comment on whether to require providers of end-user interconnected VoIP service to report whether the service is provided over a broadband connection provided by the filer or the filer's affiliate. Commenters noted that providing this information can enable the Commission to detect any competitive concerns resulting from the bundling of broadband and interconnected VoIP services. Because of the nomadic nature of certain VoIP services, AT&T contends that collection of this information would be impossible, or at least meaningless, as users of the interconnected VoIP service are able to use it over other connections as well as the associated broadband connection. We conclude that gathering information regarding the number of subscribers who receive broadband service in conjunction with interconnected VoIP service, and the share of interconnected VoIP service subscribers who can use the service over any broadband connection, would provide valuable information on the deployment of interconnected VoIP service. We therefore require interconnected VoIP providers to report information about the type(s) of broadband connections, if any, they or their affiliates provide in conjunction with interconnected VoIP service, and to report whether the interconnected VoIP service must be used over a single predetermined broadband connection or can be used over any broadband connection.