Phone Plus Prepaid: industry news

By Tara Seals

Posted: 09/2002

industry news
GPA Reorganizes Management Team

By Tara Seals

Global Prepaid Alliance Inc. CEO
Lenn Brown became chairman of the board at the International Prepaid
Communications Association (IPCA) and two of GPA’s executives — John Gill,
president, and Eddie Pena, regional vice president of sales — have left the
company.

In May, the IPCA board of directors
unanimously elected Brown as its new board chairman.

Gill, one of GPA’s founders, left
the company to join eMerge Telecom Inc. as COO. He will be headquartered in
Hazlet, N.J., managing eMerge’s prepaid phone card division and will oversee the
development and implementation of a long-term strategic business plan that will
include the management of domestic and international sales.

Industry veteran Pena, formerly of
Blackstone Communications Inc. and Onyx Telcom Inc., says he left GPA in June.

Brown declined to comment on the
departures, but he says that in their wake he will be heading up the sales
division, "along with a very capable team of experienced
professionals."

Among other appointments at GPA are
Ben Diebold as affiliate manager for subsidiary PrepaidOnline.com, Kristy
Copeland as affinity manager for PrepaidOnline.com, Johnny Torres as wholesale
accounts manager at GPA and Mabel Granera as operations manager for GPA Direct.

In other personnel changes, Donna
Fontenot and Anthony Cole are new cold fusion programmers in the GPA IT
department.

In Other Personnel News …

Patterson, VendTek’s third
nonexecutive director, is a former president and COO of British Columbia
Telecom. He oversaw its transition from monopoly to competitive enterprise
during his 31 years there. Patterson serves on a number of corporate and
community boards, including NAV Canada, the privatized Canadian air traffic
control system.

IPCA to Begin Grass-roots
Campaign for USF Per-Line Proposal

By Khali Henderson

The International Prepaid
Communications Association is launching a grass-roots lobbying campaign aimed at
changing the way service providers are assessed fees for the Universal Service
Fund (USF), effectively lightening the collective burden on prepaid and
dial-around service providers by as much as $250 million.

The Washington-based group’s
executive director Howard Segermark told PHONE+ the IPCA will launch a
letter-writing campaign as well as make visits to members of Congress in an
attempt to compel the FCC to move more quickly on USF reform issue.

IXCs have been pushing the
commission to rule before the next USF calculations are due Jan. 1. Currently,
carriers’ contributions are assessed based on revenue from the previous year.

In its February Further Notice of
Proposed Rulemaking, the FCC proposed an overhaul of the USF system that
includes contributions based on the number and capacity of connections a carrier
provides to the public network. If adopted, prepaid and dial-around providers
could be relieved completely of USF contribution obligations.

However, the FCC is considering the
possibility of a minimum contribution for providers that do not provide
connections for end users or including such providers in the de minimis
exception, which precludes them from USF obligations.

While Segermark is encouraged by the
FCC’s connection-based fee proposal, he says even if this is adopted, a special
section could be added which would impose a separate tax on those telecom
companies that don’t provide end connections.

In particular, IPCA is concerned
about a joint SBC Communications Inc. and BellSouth Corp. proposal that would
base contributions on a "qualifying service connection." A QSC, as
defined in the proposal, is a retail relationship that gives an end user the
right to connect to a network. Basically, this means access and interstate
transport. In the case of a QSC provided on an occasional use basis, e.g., a
calling card or dial-around, the contribution would be based on a percentage of
the provider’s gross interstate telecom revenue.

"Everybody recognizes that the
current system is broken," says Hope Halpern, director of Regulatory
Affairs for TelStar International Inc. and a member of IPCA’s regulatory
committee. "SBC’s proposal is worse than what we have now."

Declining interstate revenue is
shrinking the USF pool, and thinning margins mean the contribution, which is
based on gross billed revenue, is taking an ever-larger chunk of a provider’s
profit.

Halpern says the SBC-BellSouth
proposal penalizes customers who use multiple service providers since they would
have to pay multiple fees while customers using a single provider would be
subject to fewer fees.

The FCC’s per-line proposal — and
others tendered by Sprint and the Coalition for Sustainable Universal Service (CoSUS)
— is supported by the IPCA, says Halpern. These, however, face opposition from
ILECs and their associations, such as OPASTCO and National Rural
Telecommunications Association, which claim in their comments to the FCC that
they unlawfully exclude IXCs from contributing to the USF except in instances
where they provide end user access for local and private line services.

In a June 14 ex parte filing with
the FCC, IPCA explains that nearly all interstate carriers would contribute to
the fund under the per-line plan as many also provide end user connections to
the PSTN. It also asserts that most prepaid calling card providers are carriers
that provide end user connections.

Segermark says he expects Congress
to receive IPCA’s message positively since its members’ customers — often
credit-challenged and low-income customers — are those USF is aimed at aiding.
"If prepaid providers have relaxed fees, consumers will ultimately
benefit."

Q COMM PoS Patents Pending

Q
Comm International Inc. announced in July that it has several patents pending
before the U.S. Patent and Trademark Office covering its Qxpress 200
point-of-sale (PoS) technology.

Among the innovations covered in the
patent filing are:

"These innovative features are
just a few that distinguish Q Comm in the electronic delivery of prepaid
services through retail points of sale and help make us a clear choice in the
marketplace," says Paul Hickey, Q Comm CEO. "We’re excited to have
patent-pending status as we begin to roll out our new Qxpress 200
terminals."