Sprint will request a refund of all its USF (universal service fu...

Universal Service Administrative Co. (USAC) and the FCC last week. In May, AT&T asked the FCC to classify certain prepaid card services whose users heard an advertisement during the call set-up process as “enhanced” or “information” services because of subscriber interaction with stored information. Sprint said although the petition referred to access charges, a “necessary application” was that revenue from such prepaid cards would be the one from “information services,” rather than from telecom services, and therefore was exempt from USF contributions. However, Sprint argued the revenue from such cards constituted telecom service revenue because “users of these cards buy them to make telephone calls, rather than to listen to advertisements from the card issuer… If the FCC grants the AT&T petition, then it will be clear that Sprint’s view… is erroneous and that Sprint has mistakenly been overstating the amount of its revenues that is subject to USF assessments.” Sprint said USAC “may wish” to gather information from other companies on the way they classify and report revenue from prepaid card services to evaluate the potential impact on future funding of the exclusion or inclusion of such revenue in the contribution base. It cited recent FCC data that in 1999-2002, the number of reporting prepaid card providers more than doubled to 37, while the telecom services revenue reported by such entities declined more than 90% to $72 million. “This startling drop” in telecom services revenue, Sprint said, “suggests that AT&T may not be the only entity that is attempting to characterize prepaid card service as an ‘enhanced’ or ‘information’ service.”