Welcome to How to File the FCC Form 498, part of USAC s Online Learning Library.

Welcome to How to File the FCC Form 498, part of USAC s Online Learning Library. In this interactive module, we will discuss the FCC Form 498, and illustrate how this form is filed using the E-File system. 1

When you complete this module, you will be able to accurately complete the FCC Form 498 using the E-File system. 2

Let s begin this module by discussing some of the basics of the FCC Form 498. The FCC Form 498 must be completed by all service providers that receive support from the universal service programs. By completing this form, the service provider can let USAC know certain key information, such as contact information, remittance information, and payment information by program. Service providers can use the same information for all the programs, or select to use different information for each program, based on what works best for them. For instance, if a service provider is participating in all four programs, it can decide to use the same contact, remittance, and payment information for the High Cost and Low Income Programs, and then use different information for the Rural Health Care and Schools and Libraries Programs. 3

When a service provider successfully completes the FCC Form 498 for the first time, that service provider is assigned a Service Provider Identification Number, referred to as a SPIN. The SPIN is a nine-digit number that is used by USAC to uniquely identify service providers that are participating in the different programs. In order for a service provider to receive disbursements, it must have a SPIN. 4

Now let s take a look at the different ways the FCC Form 498 is used. As we ve already discussed, a service provider must complete the FCC Form 498 when initiating participation in one of the universal service programs. The service provider would submit the form to USAC and then receive its SPIN. Once the service provider has been assigned a SPIN, it may use the FCC Form 498 to revise its program information. For example, if the service provider needed to update its contact or banking information for a particular program, it would provide that information on the FCC Form 498 and then submit that form to USAC for processing. A service provider may also use this form to request a SPIN merger or consolidation. It may be the case that one service provider has merged with another service provider or even acquired another service provider, both of which participate in universal service programs. This would result in one service provider with two SPINs. The service provider can then complete the FCC Form 498 to consolidate the activities of these two SPINs into a single SPIN. Finally, the FCC Form 498 can be used to request a SPIN deactivation. In some cases, a service provider may choose to no longer participate in universal service programs. When this happens, the SPIN should be deactivated to avoid any confusion. 5

Now that we know why and when the FCC Form 498 should be used, let s take a look at how it is accessed and completed. USAC has developed an online portal referred to as E-File. This portal allows service providers to log into a secure environment and conduct the transactions necessary to participate in the universal service programs. To access E-File, open a browser and go to www.usac.org and click on the E-File link located near the top right of the screen. 6

There are several advantages to using the E-File system. First, use of the E-File system will save time in completing the forms. Once you have obtained a SPIN, your information will be contained within the E-File system. This means that when you go into the system to make a change or an update, much of the information will be automatically populated when you access the necessary form. Second, E-File validates much of the information you enter as you enter it. This results in a significantly lower form rejection rate. And third, any changes you certify will be immediate. This would not be the case if you were to complete a physical form and mail it to USAC. 7

Let s take a moment to check our understanding of what we ve covered so far. 8

Now let s take a look at how the form is completed using E-File. We ll demonstrate this through the use of an example. In this example, we ll put ourselves in the place of a service provider that is going to submit the FCC Form 498 for the first time in order to participate in the High Cost Program. 9

As mentioned on the previous screen, our service provider has not participated in any of the universal support programs before and so must complete the FCC Form 498 for the first time in order to obtain a SPIN. To do so, we go to www.usac.org and click on the E-File link. This brings us to the E-File Sign In screen. Since we haven t participated in the program before, we do not have a User ID or Password to access the system. Instead, we ll click on the New Service Provider link. This will present a series of instructions as well as a link to the E-File User Guide. We will read the information and then click the Continue button. This presents the FCC Form 498. FCC Form 498 begins by presenting some information about the form as well as how long it may take us to complete the form. There are also links to instructions placed throughout the form. 10

The first section of the form shows the four different uses of the form: to apply for a SPIN, to revise a SPIN, to request a SPIN merger or consolidation, and to request a SPIN deactivation. Since this is the first time we are completing this form, Original Application for SPIN is automatically selected. The next section asks for our SPIN. Since we haven t participated in the universal service programs in the past, we don t have a SPIN. As a result, we are unable to enter any information in that field. The next field asks for our 499 Filer ID. This is the six-digit number used by USAC to identify all telecommunications companies that contribute to the universal service fund. With very limited exceptions, all providers of telecommunications in the United States must complete and submit the FCC Form 499-A, and will therefore have 499 Filer IDs. We ll enter the 499 Filer ID for our company. 11

Now let s look at Blocks 1 and 2 of the form. In Block 1, we re asked to enter some general company information, such as the name and address of our company. There is also a checkbox that asks whether the company is part of or maintains affiliate companies. If so, we ll need to check this box and complete Block 4 later on. In Block 2, we need to enter the contact information for a general company contact. This should be the contact information for the person completing this form. Our General Contact will be the person who is the main point of contact for questions regarding billing, collection, and disbursement related matters. Additionally, our General Contact will be the main point of contact for the E-File system. One note about Block 2. For security purposes, the email address must be specific to the General Contact. We cannot list a generic email address here. 12

Before we move on to Block 3, we need to quickly discuss how addresses are to be entered on the form. If you are using a PO Box, you will still need to supply a physical street address. You may include the PO Box, but it must appear in Address Line 2. It is incorrect to provide the PO Box in the primary address line. This applies to any place on the form where an address is requested. 13

Now let s move on to Block 3, where we need to provide our Federal Employer Identification Number. When the Federal Employer Identification Number is entered, the E-File system will check its records to see if that particular ID is on file. If so, E-File will locate the associated 499 Filer ID. If we had not entered the 499 Filer ID above, then E-File will enter it for us and then provide a pop-up alerting us that this field was populated automatically. In addition to the Federal Employer Identification Number, we will need to enter our corporate structure as well as our nine-digit DUNS Number. The DUNS Number is administered by Dun & Bradstreet and indicates the physical location of our company. Additionally, we ll need to provide our Federal Registration Number, referred to as the FRN. The FRN is the identification number that we use when interacting with the Federal Communications Commission, or FCC. The FCC now requires the FRN on this form in accordance with the Debt Collection Improvement Act of 1996. Now that we ve completed the information for the first three blocks of the form, we can click on the Next Page button. Clicking this button validates certain information we had entered up to this point. If there is any information missing, we will receive an alert indicating exactly what needs to be completed or corrected. 14

If we had marked the affiliate checkbox in Block 1, then we would see Block 4, which shows our company s affiliated SPINs. For the purposes of this form, an affiliate is a person that, either directly or indirectly, owns or controls, or is owned or controlled by, or is under common ownership or control with, another person. Here, ownership is represented as an equity interest of more than 10 percent. Affiliated SPINs will automatically populate on the form based on the Federal Employer Identification Number that we entered in Block 3. However, if we needed to add additional affiliates, we can do so by entering the affiliated SPIN. We will not need to add the affiliate company name. This is because USAC will automatically enter that information when we submit the form. There is enough room to enter 22 affiliates on this form. If we needed to add more, we could by clicking on the Add Affiliate SPIN button, and then entering the affiliated SPINs. For the purposes of our example, we ll say that our company does not have any affiliated SPINs. In this case, we would have left the affiliate checkbox blank in Block 1, which would have let the system know to skip this block. 15

Since our service provider is looking to participate in the High Cost Program, we will need to complete Blocks 5 and 6, which are specific to the High Cost Program. Let s begin with Block 5, which is where we need to provide our financial institution and remittance contact information. Looking at the top of Block 5, you ll notice that the first option is to use the National Exchange Carrier Association, or NECA, as your High Cost Remittance Contact and Financial Institution. NECA is responsible for collecting certain cost and expense information that helps determine support for the High Cost Loop mechanism, which is part of the High Cost Program. By checking this box, the carrier has its High Cost disbursements sent directly to NECA to ensure proper data tracking and disbursement. When this box is checked, the remittance contact information and the banking information automatically populates with NECA s information. The next checkbox is used to discontinue the use of a SPIN for a particular program. We will discuss this option later in this module. The third checkbox allows us to use the same information for the remittance contact as we used for the General Contact. If we check this box, then the General Contact information will populate automatically. However, the 16

banking information must be added. This includes the name of the financial institution, the account number, and the transit number. It is important to note that the Debt Collection Improvement Act of 1996 requires universal service program payments to be made electronically. As a result, this banking information is required, since you will not be able to receive payments without it. This information is so important, in fact, that E-File validates it to ensure that it is correct. If a different company were to receive the High Cost payments, we would leave all the checkboxes unmarked and then provide that company name as well as the contact name, address, and banking information. For the purposes of our example, we ll say that the remittance contact information will be the same as the General Contact. To do so, we ll check the box that indicates the information is the same and then enter the appropriate banking information. 16

Block 6 allows us to enter a specific company contact for High Cost support. In other words, if we wanted the High Cost support contact to be a different person than the General Contact, we would need to enter that information here. In this case, we re going to indicate that the contact is the same by checking the box at the top of the block. We would then click the Next Page button to continue. E-File will then check to ensure all needed information has been entered in these blocks. Additionally, as indicated on the previous screen, E-File will check the banking information that we had entered to ensure the transit and routing numbers are correct. Again, without up-to-date and correct banking information, USAC will not be able to make the appropriate disbursements. 17

Blocks 7 and 8 are for Low Income support, so we ll skip ahead to Block 9 by leaving all the information in these blocks blank and simply clicking the Next Page button on the bottom of the screen. Since we are not participating in the Low Income Program, we do not need to provide any information. 18

Block 9 is used to associate Study Area Codes to our company s SPIN. Since this is the first time we re completing the FCC Form 498, we ll need to enter our Study Area Codes, or SACs. To do so, we enter the Study Area Code where indicated. We cannot enter the SAC company name at this point. When we submit the form, E-File will populate the name for us. We will also need to select whether the Study Area Type is Incumbent or Competitive. As with the affiliate information in Block 4, there are, by default, 22 spots for SACs. If we needed to add more than this, we would click on the Add a SAC button. 19

Blocks 10 through 16 address the other programs, so we ll just skip ahead to Block 17 by clicking on the Next Page button a few times. In Block 17, we need to provide our company s principal communications types. Here, we want to indicate up to five types of company activities, using the dropdown menus provided. Our example company is a competitive local exchange carrier, or CLEC, so we ll select that for Order of Importance 1. If we provided another service that wasn t a primary business function, for example, interexchange carrier, we would select that from the dropdown menu for Order of Importance 2. That would continue until we completed up to 5 activities. Since our company is solely a CLEC, we ll make only that selection from the first dropdown menu. 20

Once all the necessary information has been completed, the service provider will need to certify and submit the form. While the information was entered using the E-File system, the form will still need to be printed out, signed, and sent in to USAC. The reason for this is that USAC needs a physical signature on the first FCC Form 498 that is submitted. Subsequent submissions by the same Company Officer will not need to be mailed in. You may be wondering why the information was entered in E-File if the physical form was just going to be sent in anyway. As mentioned earlier, E-File validates the information you enter. This ensures the information is accurate and that your form will not be rejected when it is received. Additionally, when you access the FCC Form 498 using E-File again, your information will automatically populate, which will save you a significant amount of time. 21

In Block 18 of the FCC Form 498, a Company Officer will need to sign the form in order to certify that the information is true, accurate, and complete. A Company Officer is a person who occupies a position specified in the corporate bylaws or partnership agreement, typically as President, Vice President for Operations, Vice President for Finance, Comptroller, Treasurer, or a comparable position. If the filer is a sole proprietorship, the owner must sign the certification. As shown here, there is a checkbox that can be marked to indicate the General Contact and the Company Officer are the same person. Checking this box will automatically populate these fields. For our company, the General Contact is not the Company Officer, so we need to enter the Company Officer information in the fields provided. We ll then click on the Click here to Preview and Submit the form button to review the form. 22

Clicking on the Click here to Preview and Submit the form button launches a copy of the form in PDF format. We ll need to review the PDF to ensure it is correct. If so, the form can be submitted by clicking on the Submit button. 23

Once submitted, we ll receive the confirmation message shown here. Notice that there is a confirmation number associated with this submission. The instructions also indicate that the form must be printed and signed by the Company Officer. We can view and print the form by clicking on the Click here to view the form link. This will open a PDF version of the form. Included on the top of this form is the confirmation number. This assists USAC in processing the form. 24

When the form is approved by USAC, both our General Contact and our Company Officer that certified the form will receive an email letting them know that the form had been approved. This email will also contain our company s new SPIN as well as login information for E-File. 25

Let s take a moment to check our understanding of what we ve covered so far. 26

Once a service provider has obtained its SPIN, it may want to make changes to the information that is currently on file with USAC. This is done by submitting another FCC Form 498 that contains the revised information. Let s take a look at how this works. To do so, we ll continue with the service provider we used in the previous example. In that example, our service provider had submitted its initial application and received its SPIN to use as part of the High Cost Program. Suppose now that our service provider wants to branch out into the Schools and Libraries Program. To do so, we need to submit another FCC Form 498 using E-File. 27

To access the FCC Form 498, we go to www.usac.org and click on the E-FILE link to access the login screen. This time, we enter the User ID and Password information we received after submitting the original application. In this example, we ll log in as the General Contact. Before we click on the Login button, we need to make sure we read the system notice just below the Sign In area. Once we ve read this information, we can mark the checkbox and click the Login button. Since this the first time you are logging in, you will be asked to change your password for security purposes. 28

After logging in, we ll see the Information Center, as shown here. This screen presents the Filer IDs and SPINs associated with our company. To begin, we ll need to click on the SPIN. 29

Clicking on the SPIN launches a new browser window that contains the FCC Form 498. When we launch the form, we ll see that Revision to existing FCC Form 498 on file with USAC is already selected. We ll also see our SPIN and Filer ID information is already populated. 30

Blocks 1, 2, and 3 of the form have already been populated as well. We can leave this information as it is and click on the Next Page button until we reach the Schools and Libraries blocks. 31

The Schools and Libraries specific information begins on Block 12. Here, we are asked for our financial institution and remittance information. As we did in the High Cost blocks, we can select NECA as our remittance company, use our General Contact, or enter new information. 32

You ll notice, however, there is a difference between this block and the financial institution and remittance information blocks for the other programs. For Schools and Libraries, there is a space for alternative banking information for the payment of Billed Entity Applicant Reimbursements. Billed Entity Applicant Reimbursement payments, also known as BEAR payments, are those payments that are made to the service provider that the service provider must reimburse to the beneficiary organization. While it is possible to use the same banking information for all purposes, USAC provides the option for the service provider to use separate banking information specifically for BEAR payments to help the service provider keep these funds separate from other funds it may receive from USAC. It should be noted that this checkbox will be checked by default, meaning that the same banking information will automatically be used for both your BEAR payments and any other Schools and Libraries payments. You will need to uncheck the box and enter the new banking information to separate your BEAR payments from any other payments. For our example, we ll add some new banking information. Again, we ll want to do this so we know which funds can be used by our company and which funds must be reimbursed to the schools and libraries that use our services. 33

Block 13 the block for the Schools and Libraries Company Contact information - is similar to the High Cost contact block we saw earlier in this lesson. In fact, it is similar to all the Company Contact blocks. As with the others, we may choose to use the General Contact or we may name another person to be the contact specifically for Schools and Libraries. Regarding the email address, it must be specific to that person for security reasons; a generic email address cannot be used. 34

Now let s look at Block 14, which is specific to Schools and Libraries. In this block, we can indicate whether we want our service provider to net its Schools and Libraries payments against its universal service contribution. This means that when a USAC contributor invoice is sent to our service provider, USAC will have subtracted the disbursement amount we would have received from any Schools and Libraries disbursements. For example, suppose our monthly USAC contributor invoice was $10,000. Further suppose that over the same period, we received $4,000 from Schools and Libraries disbursements. If we leave this box unchecked, we would receive a USAC contributor invoice for $10,000 and then a disbursement payment of $4,000. Instead, we can check the box and have these two amounts netted against one another. In that case, we would only receive the USAC contributor invoice, but it would be for the netted amount of $6,000. We ll choose to net our payments. If we are done, we can submit our form for certification in the same way we had before. 35

At this point, we ve completed all the information that was needed to add the Schools and Libraries Program to our FCC Form 498, so we can skip ahead to Block 18. We went through this example as the General Contact, and not as the Company Officer. As explained earlier, only the authorized Company Officer can certify this information. As the General Contact, we can make any changes that are needed and then submit them for review and certification by the Company Officer. We do this by clicking on the Click here to Preview and Submit the form button. 36

As we saw earlier, a PDF version of the form launches for our review. If everything checks out, we can click on the Submit button. We are then provided with a confirmation number for the submission of that form. At the same time, an email is sent to the Company Officer indicating that there is a pending FCC Form 498 that must be reviewed. 37

In order to certify the pending FCC Form 498, the Company Officer must log in to E-File using the credentials received after the original application was approved. In the left-hand navigation, there is an area labeled Pending Certifications. When the Officer clicks on the Form 498 link, the pending FCC Form 498 will be listed, as shown here. Notice that the status reads Pending Officer Approval. The Officer would need to click on the SPIN to launch the form. 38

Once the form is opened, the Officer must review every page of the form. On the last page, the Officer clicks on the Click here to Preview and Certify the form button. 39

Again, a PDF version of the form is launched for review. Our officer can edit the form, reject it, or certify it, as indicated by the buttons below the form. Just a quick note about the difference between the Edit Form and Reject buttons. The Edit Form button will allow the Officer to access the form entry screens and make any changes necessary. The Reject button, however, will delete all the form data. In other words, if the Reject button is clicked, the General Contact or the Company Officer will need to start the form from scratch. Finally, the Officer may certify the form by clicking the Certify button. Once certified, the information within E-File is instantly updated. 40

Let s take a moment to check our understanding of what we ve covered so far. 41

So far, we ve seen how to obtain a SPIN and how to add a program to that SPIN. Now let s look at how to remove a program from a SPIN. This is done using a checkbox found in Blocks 5, 7, 10, and 12. Let s look at an example. Suppose our company has decided that it will no longer offer some of the services it did before. The effect of this decision is that we will no longer participate in the Rural Health Care Program. However, our company will continue to participate in the other programs. In this case, our company will want to retain its SPIN for use with the other programs. It just wants to discontinue the use of this SPIN for Rural Health Care. 42

To make the change, our company will open the FCC Form 498 and indicate that a revision will be made. We ll then skip to Block 10, where the Rural Health Care information had been entered. Here, we ll check the box marked Check this box to discontinue use of this SPIN for Rural Health Care Support. We ll receive a pop-up alerting us that the SPIN will no longer be used for this program. When we click on OK, all the information on the form for Rural Health Care will disappear. We would then proceed to the end of the form to submit it, and then have the Company Officer certify the change. 43

It should be noted that in the Low Income Program, discontinuing the use of a SPIN may not be as simple as what was just presented, as there are certain limitations in place to protect Low Income beneficiaries. In order for a service provider to discontinue the use of a SPIN for Low Income, there must be more than one telecommunications company serving that particular program in the affected study area code, or SAC. If this is the case, then advance notice must be provided to the state commission. From this time, the service provider must allow up to one year for the remaining telecommunications company to get up to speed in order to take over the program. This timeframe is necessary to ensure that the remaining telecommunications company can serve those in the community that benefit from the Low Income Program. 44

Let s take a moment to check our understanding of what we ve covered so far. 45

As mentioned earlier in this module, a service provider may need to merge or consolidate SPINs. This may happen because two or more service providers have merged or one service provider may have acquired another. If these service providers had been participating in the same programs, then there will be two or more SPINs serving the same purpose, which may be undesirable for the newly established organization. For a SPIN merger or consolidation to take place, the requirements are slightly different than for a revision. Not only must you submit an FCC Form 498 for the affected SPIN, but you must also submit one for the replacement or surviving SPIN. You must also submit any merger documentation and your federal W-9. 46

Let s take a look at an example where a service provider will need to submit an FCC Form 498 for a SPIN consolidation. In this case, our service provider has acquired another service provider that was also participating in the High Cost Program. Instead of having two SPINs that are serving the same purpose for the company, one SPIN will be eliminated for the sake of simplicity. To do so, we must complete the FCC Form 498 for the SPIN that is going to be retained. The first thing we ll do is launch the form for the surviving SPIN and select Request for SPIN Merger/Consolidation. 47

If necessary, we ll provide any updated information in Blocks 5 and 6 of the form. This includes the remittance contact information, financial institution, and the company contact for High Cost. 48

Because of the nature of the change, the form cannot be submitted electronically alone. In order to merge or consolidate a SPIN, the PDF version of the form must be printed out and physically signed by the Company Officer. This entire form will have to be submitted to USAC either through email, fax, or U.S. mail. 49

For the SPIN that will be eliminated, we ll need to launch the FCC Form 498 for this SPIN, indicate that this is a SPIN merger or consolidation, and then print the PDF version of the form. Again, the Company Officer must physically sign the form. Unlike the form for the surviving SPIN, we ll only need to submit the first and last pages of this form. These should be submitted at the same time as the surviving SPIN paperwork, again, either through email, fax, or U.S. mail. 50

In order to process the request, USAC will need some additional documentation. This includes copies of sale, acquisition, or merger documentation indicating the date of sale. This documentation should also demonstrate the surviving organization s unfettered right to all SPIN data and activity. We will also need to provide a federal W-9 form indicating the Federal Employer Identification Number. As with the FCC Forms 498 that had been printed and signed, the additional information cannot be provided directly through the E-File interface. Instead, this information can be provided to USAC by email, fax, or U.S. mail. 51

Let s take a moment to check our understanding of what we ve covered so far. 52

The final use of the FCC Form 498 is SPIN deactivation. In some cases, the service provider may decide that it does not want to participate in universal support programs, because it has changed its business focus, because it is going out of business, or because of some other reason. When this happens, the service provider should file an FCC Form 498 indicating that the SPIN it was using should not be used for any purpose any longer. Let s return to our example. Here, our company has decided that it no longer wants to participate in any of the universal service programs because it has changed its business focus. Because of this change, our company needs to deactivate its SPIN. To do so, we open the FCC Form 498 and select Request for SPIN Deactivation. At this point, an alert will appear indicating that payments will no longer be disbursed to that particular SPIN. As with a SPIN merger or consolidation, the Company Officer must physically sign the form and then submit only the first and last pages. 53

When submitting the SPIN deactivation, we will need to also submit a cover letter indicating the reason for the SPIN deactivation request. If there is any additional supporting documentation, that should be provided as well. The FCC Form 498, cover letter, and additional supporting documentation would need to be sent via email, fax, or U.S. mail. 54

Let s take a moment to check our understanding of what we ve covered so far. 55

We have reached the end of this module. Let s take a quick look at what we ve covered. In this module, we demonstrated how to accurately complete the FCC Form 498 using the E-File system. This included several parts. First, we described the uses of the FCC Form 498. Here we discussed an original application, a revision, a SPIN merger or consolidation, and a SPIN deactivation. We then looked at these four uses in more detail, starting with an example of a service provider creating and submitting an original application using the E-File system. Here, we discussed the completion of general company information, affiliate company information, and program-specific information. We also noted that first time filers need to print the form, sign it, and then send it in. Next, we provided examples of SPIN revisions. Here, we discussed how programs can be added to a SPIN and how programs may be removed from a SPIN. As part of these demonstrations, we noted the different kinds of information needed for certain programs, such as alternative banking information for Schools and Libraries. 56

We then discussed SPIN mergers and consolidations. In the case of a merger or consolidation, at least two forms must be submitted: a completed FCC Form 498 for the surviving SPIN, and an FCC Form 498 with basic information about the affected SPIN. We also noted additional documentation that needs to be submitted along with the forms. While E-File makes it easy to create the forms needed, the forms and documentation cannot be submitted through E-File. Instead, they would be submitted through email, fax, or U.S. mail. Finally, we discussed SPIN deactivation. Again, the FCC Form 498 needed for a deactivation can be generated through E-File, but must be physically signed and submitted along with a cover letter explaining the deactivation. 56

We have reached the end of this module. For more information, you may contact us by clicking on the Questions or Comments button on the bottom left of the screen. Otherwise, you may click on the Exit button on the upper right of the screen to exit the module. 57