1 TEXAS STATEWIDE TELEPHONE COOPERATIVE, INC. Accounting and Customer Service Conference Regulation and Accounting for VoIP Presented by: Matt Snowden, C.P.A. Bolinger, Segars, Gilbert & Moss, L.L.P.

2 TOPICS Regulation Accounting Taxes

3 Regulation Is it regulated? Depends Three different scenarios

4 Regulation Scenario One  ILEC/CLEC provides basic local exchange service using VoIP technology  Regulated? Yes!

5 Regulation Scenario Two  ILEC/CLEC provides a combination of basic local exchange service and DSL service, over which a VoIP service is provided by an entity other than the ILEC/CLEC  Regulated? Yes and No

6 Regulation Scenario Three  ILEC/CLEC provides a data-only DSL service over which a VoIP service is provided by an entity other than the ILEC/CLEC  Regulated? Yes and No

7 Additional Regulation FCC has acted to ensure VoIP providers comply with important public safety requirements and public policy goals.

8 Additional Regulation – E911 All interconnected VoIP providers must:  Provide 911 service to all of their customers  Obtain customer’s physical location at which the service will first be used  Transmit all 911 calls (including callback number and physical location) to appropriate emergency services call center or local emergency authority  Inform and obtain affirmative acknowledgement from new and existing customers of the limitations of their 911 service

9 Additional Regulation - Other Local Number Portability (LNP) Customer Proprietary Network Information (CPNI) Telecommunication Relay Service (TRS) requirements

10 Accounting VoIP Network

11 Accounting VoIP Network Class 4 or 5 TDM Switch TDM Softswitch STP Media Gateway Media Gateway Controller Border Session Controller Signaling Gateway 2232 Circuit Equipment

12 Accounting What is a “Switch”?  Centers around interconnection  Controls the call  Interfaces other network elements  Must support the origination and termination of a call  Serves functions such as routing, billing, traffic measurement and custom calling

13 Accounting – TDM Softswitch Softswitch Elements FunctionalityClassificationAccount Softswitch controller + Signaling Gateway Call Control SS7 Interface Standalone Softswitch Controller – Not a switch Circuit Equipment Softswitch controller + Signaling Gateway + Line Gateway + Trunk Gateway + Packet Router Call Control SS7 Interface Line Terminations Trunk Terminations Routing for L-L and L-T and possible T - T Softswitch End Office with associated circuit equipment or Softswitch Tandem Switch Softswitch End Office ( Digital Electric Switching) and other Circuit Equipment ( Circuit Equipment) Line Gateway + Trunk Gateway + Packet Router Line Terminations Trunk Terminations Routing for L-L and L-T and possible T-T Softswitch Remote with associated circuit equipment (Requires Softswitch controller and Signaling Gateway for call routing and other functionalities) Softswitch Remote ( Digital Electric Switching) and other Circuit Equipment ( Circuit Equipment) Line GatewayLine TerminationsSoftswitch Concentrator Circuit Equipment Packet RouterRouting between Line and Trunk Gateways Softswitch Circuit Equipment Circuit Equipment

14 Accounting VoIP Network Tower  Attached to building (2121 account)  Free standing or guyed (2411 account) Tower Equipment – Antenna Systems  Mostly going to consist of radio equipment ( accounts) Field Cabinet  Mostly going to consist of circuit equipment (2232 accounts) See embedded RAO Letter 6 for detailed listing of equipment with their respective account classifications

15 Accounting See embedded RAO Letter 6 for detailed listing of equipment with their respective account classifications Broadband Modem (2232 – Circuit Equip) Adaptor (2362 – Other Terminal Equipment) VoIP Phone (2311 – Station Apparatus) Regular Telephone (2311 – Station Apparatus) Satellite ( – Radio Systems) Antennae ( – Other Radio Facilities) NID (2232 – Circuit Equipment) Computer (2311 – Station Apparatus) Fiber Wireless

16 Taxes Taxes to be collected and remitted:  State Sales Tax  City, County and Other Local Taxes  TUSF Assessment  Federal Universal Service Charge

17 Taxes Taxes not applicable:  Federal Excise Tax  PUC Gross Receipts Assessment  911 Equalization Surcharge

18 Reference NECA VoIP Guideline PaperRAO Letter 6 Accounting for SoftswitchesRAO Letter 21

The End Matt Snowden, Bolinger, Segars, Gilbert & Moss, LLP – Phone – (806) Fax – (806)