Many interconnected VoIP providers have historically calculated their interstate revenues based on the FCC's VoIP "safe harbor" of 64.9%. Those revenues are subject to the Federal Universal Service Fund (FUSF) fee as well as other federally imposed fees, such as the Telecommunications Relay Service (TRS) and the annual FCC regulatory fee. Combined, these fees currently amount to almost 20% of a carrier's interstate and international revenues, so it makes sense to consider ways to minimize the assessment base for those fees.
An interconnected VoIP provider might be able to lower its federal assessment base by conducting a traffic study to determine if its traffic patterns justify a lower interstate allocation. For instance, if the interstate percentage of a carrier's VoIP traffic is actually 50%, rather than the 64.9% safe harbor, the carrier could reduce reported interstate revenues by almost $150,000 for every $1 million in total VoIP revenue, saving almost $30,000 in federal assessments.
Keep in mind that under the FCC's 499 reporting instructions, an interconnected VoIP provider's choice of interstate allocation methods (e.g., safe harbor vs. traffic study) must be consistent between the quarterly projections on the 499Qs and the following year's 499A true up. So, a carrier that used the safe harbor method on the November 1 499Q for Q1 2017 projected revenues would have to likewise use the safe harbor for Q1 2017 actual revenues on the 499A filed in 2018, even if it subsequently switched to a traffic study allocation method for its Q2 - Q4 projections .
Confusing? No one ever said federal regulations were straightforward! But understanding the rules is crucial if you want to stay competitive by minimizing your federal assessments.