Fund Administration
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De Minimis Exemption
A company is considered de minimis for a given calendar year when the revenue reported on the corresponding 499-A is such that the calculated contribution to the Universal Service Fund is less than $10,000.
A company that demonstrates a de minimis status is exempt from directly contributing to the Universal Service Fund for a given year but may indirectly contribute through an underlying carrier. The de minimis status is applicable only to the Universal Service Fund and thus does not necessarily affect a company's contribution obligation for Telecommunications Relay Services (TRS), North American Numbering Plan (NANPA) and Local Number Portability (LNP).
FILING OBLIGATIONS for De Minimis Companies:
Form 499-A: Due April 1
De minimis filers are required to submit the 499 Annual filings. All intrastate, interstate and international providers of telecommunications within the United States, with very limited exceptions, must file the FCC Form 499-A Telecommunications Reporting Worksheet.1
Form 499-Q: Due Feb 1, May 1, Aug 1, Nov 1
De minimis filers are not required to submit the 499 Quarterly filings. Telecommunications carriers and other telecommunications providers should complete the table contained in FCC Form 499-Q instructions to determine whether they meet the de minimis standard.2
If a contributor improperly claims exemption from the contribution requirement, it will be subject to the criminal provisions of sections 220(d) and (e) of the Communications Act regarding willful false submissions and will be required to pay the amounts withheld plus interest.
As outlined in both the FCC Form 499A and 499Q instructions, USAC uses the following processes to determine de minimis status:
On the Annual Telecommunications Reporting Worksheet (Form 499-A):
- FCC Form 499A Collected Interstate and International Revenues = Revenue Base
- Line 423d + Line 423e = Revenue Base
- Estimated 499A Annual Contributions
- (Revenue Base * Average FCC Contribution Factor) – (Revenue Base * Average FCC Contribution Factor * Average FCC Circularity Factor) = Estimated 499A Annual Contribution
- If Estimated 499-A Annual Contribution is less than $10,000, then the form is labeled as de minimis
On the Quarterly Telecommunications Reporting Worksheet (Form 499-Q):
- FCC Form 499Q Projected Collected Interstate and Projected Collected International = Revenue base
- Line 120b + Line 120c = Revenue Base
- Revenue base x FCC Contribution factor = Unadjusted Contribution
- Unadjusted Contribution x FCC Circularity factor = Circularity Deduction
- Unadjusted Contribution - Circularity Deduction = Quarterly Contribution
- Quarterly Contribution x 4 = Estimated 499-Q Annual Contribution
- If Estimated 499-Q Annual Contribution is less than $10,000, then the form is labeled as de minimis
Qualifying for the exemption:
- Companies must demonstrate that they are de minimis on both the current 499-A and the current 499-Q to be exempt from billings in that quarter.
When the 499-A is filed showing the actual revenue that had been projected quarterly, a true up will confirm the de minimis status for the year and reverse any support mechanism charges that occurred for a company that is found to have been de minimis.
1 FCC Form 499-A Instructions, February 2009
2 FCC Form 499-Q Instructions, April 2009
