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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2015
Commitments And Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

9.

COMMITMENTS AND CONTINGENCIES

Operating Lease Obligations —The Company leases its facilities and certain equipment under operating leases which expire through March 2026. Rental expense was $4.3 million, $4.3 million and $5.2 million for each of the years ended December 2015, 2014 and 2013, respectively.

The following table represents future lease payments under the operating leases:

 

December 31,

 

2015

 

2016

 

$

4,712

 

2017

 

 

4,684

 

2018

 

 

4,061

 

2019

 

 

3,975

 

2020

 

 

3,502

 

Thereafter

 

 

8,057

 

Total

 

$

28,991

 

 

Purchase Obligations – The Company has service agreements with certain major telecommunications service providers, where it has committed to purchase a minimum amount of services through September 2018. Additionally, the Company has contractual commitments with third parties to purchase network circuits through August 2020. In the event the Company was to terminate these circuit agreements before their expiration, early termination penalties would apply, for which the Company would be required to pay. The following table below represents the minimum future purchase obligations.  These amounts do not represent the Company’s entire anticipated purchases in the future, but represent only its estimate of those items for which the Company is committed.

 

December 31,

 

2015

 

2016

 

$

12,844

 

2017

 

 

3,781

 

2018

 

 

643

 

2019

 

 

74

 

2020

 

 

64

 

Total

 

$

17,406

 

Legal Proceedings —From time to time, the Company is a party to legal proceedings arising in the normal course of its business. Aside from the matters discussed below, the Company does not believe that it is a party to any pending legal action that could reasonably be expected to have a material adverse effect on its business or operating results, financial position or cash flows.

OTT Access Charge Dispute

On November 18, 2011, the FCC issued an order establishing, among other things, an intercarrier compensation framework for the exchange of switched access traffic. In its order, the FCC attempted to clarify the circumstances under which local exchange carriers are eligible to receive access charges when they deliver access traffic in partnership with entities that utilize VoIP technology. The FCC determined that, under certain circumstances, local exchange carriers are eligible to receive access charges when delivering access traffic in partnership with VoIP providers. The FCC has referred to its determination on this issue as the “VoIP Symmetry Rule.”

Subsequent to the FCC’s November 2011 order, further disputes developed within the industry concerning the interpretation of the VoIP Symmetry Rule. A number of long distance carriers took the position that, notwithstanding the VoIP Symmetry Rule, local exchange carriers were still not eligible to receive access charges when delivering access traffic in partnership with VoIP providers that deliver service using OTT technology.

On February 11, 2015, the FCC released an order clarifying that, pursuant to its VoIP Symmetry Rule, local exchange carriers are entitled to receive access charges when delivering access traffic in partnership with VoIP providers that utilize OTT technology under certain circumstances. This order has been appealed to a federal appellate court. The Company has disputes with several long distance carriers regarding the payment of access charges to the Company relating to the origination and termination of traffic to VoIP providers that utilize OTT technology. The Company has made judgments as to its ability to collect based on known facts and circumstances and has only recorded revenue when collection has been deemed reasonably assured.