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                           Before the
                Federal Communications Commission
                     Washington, D.C. 20554

In the matter of                 )
Kenneth Kiefer,                  )
       Complainant,              )    File No. EB-00-TC-F-002
 v.                              )
Paging Network, Inc. d/b/a/      )
PageNet,                         )
       Defendant.                )


   Adopted: October 12, 2001            Released: October 18, 

By the Commission:
                        I.   INTRODUCTION

     1.   In this  Order, we  deny a  formal complaint  filed  by 
Kenneth Kiefer against Paging  Network, Inc.1 (PageNet)  pursuant 
to section 208 of the Communications Act of 1934, as amended (the 
Act).2  The United States District Court for the Eastern District 
of Michigan,  Southern Division  (District Court)  referred  this 
case  to   the  Commission   under   the  doctrine   of   primary 
jurisdiction.  We find that Mr. Kiefer has not demonstrated  that 
PageNet's assessment  of  a  late payment  fee  violates  section 
201(b) and deny the complaint with prejudice. 3 

                        II.         BACKGROUND

     2.   In  November   1991,   Mr.  Kiefer   entered   into   a 
Service/Lease Agreement with  PageNet-Michigan to receive  paging 
services in Michigan.  PageNet subsequently  notified Mr.  Kiefer 
via a billing invoice that he would  be subject to a late fee  of 
$5 or 1.5% of  the past due balance  for payment received  beyond 
the due date.4    After failing  to pay  his paging  bill by  the 
specified due date, Mr. Kiefer was charged a $5.00 late fee.5  On 
August 28, 1998, Mr. Kiefer filed a class action lawsuit  against 
PageNet in Michigan State Court that sought recovery of the  late 
fee charges that he and other subscribers had incurred.   PageNet 
subsequently removed Mr. Kiefer's complaint to the United  States 
District Court  for the  Eastern District  of Michigan,  Southern 
Division.6   The  District  Court  thereafter  granted  PageNet's 
request to refer the case to the Commission based on the doctrine 
of primary jurisdiction,7 determining that Mr. Kiefer's complaint 
asserted issues of reasonableness under section 201(b) of the Act 
that are  within  the Commission's  jurisdiction.   The  District 
Court stayed  its proceedings  and  denied PageNet's  request  to 
dismiss Mr. Kiefer's suit without prejudice. 8

                         II.  DISCUSSION

     3.   In the  above-captioned complaint,  filed on  April  5, 
2000, Mr. Kiefer  argues that PageNet's  assessment of the  $5.00 
late fee  is  an unreasonable  charge  because it  is  excessive, 
``bear[s] no  relationship to  its actual  losses resulting  from 
late payments and  does not  represent a  reasonable estimate  of 
such losses.''9  Mr.  Kiefer states that  the time period  within 
which subscribers must pay  their bills is unreasonably  short.10  
Additionally, Mr.  Kiefer  asserts  that  PageNet's  practice  of 
assessing a late fee if payment is not received within ``ten days 
of the billing date indicated  on a typical billing statement  is 
an unreasonable practice, because its truncated billing period is 
designed to induce late payments whereby PageNet's customers will 
incur unreasonably high late fees.''11 PageNet responds that  its 
business practices are the  product of competitive market  forces 
and are not unreasonable and  that customers are provided with  a 
grace period before a  late fee is  assessed.12  Mr. Kiefer  also 
alleges in his  complaint that  PageNet's assessment  of a  $5.00 
late fee violated section 201(b) of the Act, which requires  that 
all charges must be just and reasonable.  Mr. Kiefer claims  that 
PageNet's late fees were assessed after an unreasonably truncated 
billing period,  are  unlawful penalties,  constitute  liquidated 
damages that  are ``disproportionate  to the  estimated  probable 
loss or harm caused to PageNet  by the late receipt of a  monthly 
payment,''13 and contravene state law.14

          II.A.1.   Whether PageNet's  Late  Fee  Is  Unjust  and 

     4.   Under  section  201(b)  of  the  Act,  ``all   charges, 
practices, classifications and regulations for and in  connection 
with'' communication services offered by common carriers must  be 
just  and  reasonable.15   Mr.   Kiefer  argues  that   PageNet's 
assessment of  a late  fee  violates section  201(b) of  the  Act 
because the fee is not cost-based, does not reflect actual losses 
resulting from late payments, and does not represent a reasonable 
estimate of such losses.  PageNet argues that its late fee policy 
was  implemented  to  offset  expenses  due  to  customers'  late 
payments.16 Additionally,  PageNet states  that it  provided  Mr. 
Kiefer with a grace period and  did not assess a late fee  unless 
payment was  not received  by  the end  of its  billing  cycle.17  
PageNet further states that it  mailed billing statements to  Mr. 
Kiefer prior to the invoice date and that Keifer was notified  in 
October  1994  that  a  late  fee  would  be  assessed  for  late 
payments.18 PageNet also argues that the paging market is  highly 
competitive and  that ``market  forces  ensure that  a  carrier's 
rates, terms and conditions are reasonable.''19

     5.   At  the  outset,  we  note  that  the  Commission   has 
regulated  CMRS,  such  as  those  offered  by  PageNet,  through 
competitive market forces.  In doing  so, the Commission has  not 
imposed specific cost-based rate  regulations on CMRS  providers.  
This does not mean, however, that section 201(b) has no  meaning.  
If a charge  is unjust  or unreasonable, even  in an  unregulated 
market, we will find a violation.  In this case, however,  beyond 
his bald assertions, we find that  Mr. Kiefer has failed to  cite 
any authority or  present any evidence  requiring PageNet's  late 
fee to be based on an estimate of its actual losses.  Mr.  Kiefer 
has also  failed to  persuade us  that PageNet  has violated  any 
specific Commission regulation regarding its assessment of a late 

     6.   In  Southwestern   Bell  Mobile   Systems,  Inc.,   the 
Commission stated  its general  preference that  the  competitive 
market, rather than government regulation, govern the  Commercial 
Mobile Radio  Service (CMRS)  industry. 20   There,  Southwestern 
Bell Mobile Systems (``Southwestern'')  had asked the  Commission 
to issue six  specific declaratory rulings  that would assist  in 
the resolution of numerous class action suits filed in state  and 
federal courts.  Among other things, Southwestern requested  that 
we declare  that  the  Commission's general  preference  is  that 
competitive forces instead of governmental regulations govern the 
CMRS marketplace.21  The Commission granted Southwestern's  first 
requested  ruling  and  stated  that  congressional  policy  also 
favored competition over regulation.   The Commission noted  that 
it is directed by the Act to forbear from applying any regulation 
or provision of the Act  where the enforcement of the  regulation 
is not required to  protect the public  and is inconsistent  with 
the public  interest.   The  Commission  further  noted  that  in 
considering whether forbearance is within the public interest, it 
is  required  to  determine  whether  forbearance  will   promote 
competitive market forces.22  

     7.   We adhere to the views  expressed by the Commission  in 
SBMS and other proceedings,23 that market forces should generally 
govern the rates and charges assessed by CMRS providers.  We note 
however, that in a competitive market, certain industry practices 
will not necessarily ``be lawful under Section 201(b) of the  Act 
and without regard to  other contractual, service, and  marketing 
practices of the  CMRS provider.''24  Nonetheless,  we find  that 
the existence of  a competitive  market should  be considered  in 
determining the existence of a  section 201(b) violation. 25   We 
further note that  late fees  have been routinely  used by  other 
industries regulated by the Commission.26  In this instance,  the 
facts do  not  warrant that  we  find  that the  $5.00  late  fee 
violates section 201(b).

          II.A.2.   Whether  PageNet's  Bill  Payment  Period  Is 
               Unreasonably Short

     8.    Mr.  Kiefer states  that PageNet's  billing period  is 
unreasonably short and therefore  violates section 201(b).27  Mr. 
Kiefer asserts that PageNet mailed  its billing statement on  the 
first of the month,  specified that payment was  due on the  10th 
day of the month  and reminded subscribers to  allow 5 to 7  days 
for mailing.28  Mr.  Kiefer specifically states  that ``from  the 
date PageNet  mailed  its billing  statements,  subscribers  were 
generally provided at most,  five (5) days  within which to  make 
payment and ensure its receipt by PageNet, without incurring  the 
unreasonably high late fee penalty.''29 

     9.   PageNet  argues  that  its  billing  period  policy  is 
reasonable under Section  201(b) of the  Act.30   PageNet  states 
that the time period within which subscribers are required to pay 
their bill is not unreasonably short because the billing date  is 
the first day of the service  month with payment due by the  10th 
of the month and that subscribers are given a grace period to pay 
their bills without incurring a late fee.31  PageNet states  that 
this grace period is 10-13 days long, ``running from the 11th  of 
the current  billing  month  through the  printing  of  the  next 
billing  cycle.''32   PageNet  further  argues  that  Mr.  Kiefer 
subscribed to its services for over eight years, was given notice 
of the late fee and billing policy, and agreed in writing to  the 
subscription agreement.  PageNet notes  that Mr. Kiefer chose  to 
continue subscribing  to  PageNet's  services  even  after  being 
assessed the late fees.33

     10.  Mr. Kiefer  has failed  to  demonstrate that  the  time 
period during  which PageNet's  subscribers are  required to  pay 
their bill is unreasonably short.  Mr. Kiefer was given notice of 
the  10-day  billing   period  in  his   signed  1991  and   1995 
Service/Lease Agreements  with PageNet.   Furthermore,  customers 
are given an additional 10-13 day grace period before a late  fee 
is assessed.   Mr.  Kiefer further  received  billing  statements 
indicating when payment was due.  Mr. Kiefer further acknowledges 
that he received notice of the late fee on billing  statements.34  
In this context, we  decline to find that  PageNet's late fee  is 
unjust and unreasonable under section 201(b) of the Act. 35

                      III.      CONCLUSION

     11.  We find  that  Mr.  Kiefer has  not  demonstrated  that 
PageNet's assessment  of  the  $5.00 late  fee  violates  section 
201(b) of the Act.  We therefore  deny with prejudice the instant 
formal complaint filed by Kenneth Kiefer against Paging  Network, 

                      IV.  ORDERING CLAUSE

     12.   Accordingly, IT  IS ORDERED, pursuant  to sections  1, 
4(i), 4(j), 201(b), and 208 of the Communications Act of 1934, as 
amended, 47 U.S.C.  151, 154(i), 154(j), 201(b), and 208,  that 
the complaint filed by Kenneth Kiefer is DENIED.

     13.   IT IS  FURTHER ORDERED that  Kenneth Kiefer's  request 
for waiver of section 1.721(a)(8)  of the Commission's rules,  47 
C.F.R.  1.721(a)(8), is GRANTED.


                         Magalie Roman Salas


1  Paging Network, Inc.  provides paging services to  subscribers 
in the United States, U.S. territories and Canada.  PageNet, Inc. 
is the parent and holding company of PageNet Michigan.
2  47 U.S.C.  208. 
3  Section 201(b) states in pertinent part: ``All charges, 
practices, classifications, and regulations for and in connection 
with such communication service shall be just and reasonable, and 
any such charge, practice, classification, or regulation that is 
unjust or unreasonable is hereby declared to be unlawful . . . 
.''   47 U.S.C.  201(b).  Mr. Kiefer also argues that the late 
fee at issue here should be considered a ``term and condition'' 
under section 332 of the Act.  In construing the scope of the 
complaint before us we note that although it is not entirely 
clear, the Court appears to have addressed Mr. Kiefer's claim 
under section 332. Kenneth Kiefer v. Paging Network Inc., 50 
F.Supp. 2d 681, 685 (E.D. Mich. 1999) (``District Court Order'').  
At the same time, the District Court's primary jurisdiction 
referral is limited to a determination of the late fee's 
lawfulness under Section 201(b) of the Act.  "Regardless of the 
semantic label Plaintiff uses to dress his Section 201(b) claims, 
he cannot disguise the fact that they question the reasonableness 
of Defendant's uniform late payment charges, and the Sixth 
Circuit has determined that such questions should be determined, 
in the first instance, by the FCC."  District Court Order, 50 
F.Supp. 2d 681, 685-6 (1999).  Given these circumstances, we find 
it appropriate to exercise our authority to address the complaint 
before us by limiting our ruling to the issues raised under 
section 201(b) of the Act.  
4  Joint Statement at 3.
5  Mr. Kiefer does not specify the number of occasions for  which 
he was charged and paid a  late fee.  PageNet states that  Kiefer 
was assessed a late fee on six occasions.  See Reply at 2. 
6  Kenneth Kiefer  v. Paging  Network of Michigan,  Inc. et  al., 
Case No. 98-008669-CP (Mich. Cir. Ct., Oakland County).
7  Citing Far  East Conference  v. United States,  342 U.S.  570, 
574-75 (1952), the  District Court  stated that  the doctrine  of 
primary jurisdiction ``is properly invoked when enforcement of  a 
claim in  court  would require  resolution  of issues  that  have 
already  been  placed  within   the  special  competence  of   an 
administrative body.''  District  Court Order, 50  F.Supp. 2d  at 
8  Id. at 682.
9  Complaint at 16.
10  Id. at 15-16.
11  Id. at 7.
12  Answer, Tab D, at 14-16.
13  Complaint at 7.
14  The District  Court stayed its  proceedings and will  address 
these issues after the Commission rules on the reasonableness  of 
PageNet's $5.00 late fee.  District Court Order, 50 F.Supp. 2d at 
15  47 U.S.C.  201(b).
16  Answer, Tab D, at 5.
17  Id. at 5-7.
18  Id. 
19 Id. at 12.
20  Southwestern  Bell  Mobile  Systems,  Inc.,  Petition  for  a 
Declaratory Ruling regarding the  Just and Reasonable Nature  of, 
and State Challenges  to, Rates  Charged by  CMRS Providers  when 
Charging for  Incoming Calls  and Charging  for Calls  in  Whole-
Minute Increments, Memorandum Opinion and Order, 14 FCC Rcd 19898 
(1999) (``SBMS'').
21  Southwestern also  requested that we  declare that: (1)  that 
charging for CMRS calls  in whole-minute increments and  charging 
for incoming calls were not  unjust or unreasonable practices  in 
violation of  section  201(b) of  the  Act; (2)  the  term  "call 
initiation" in the  CMRS industry refers  to a cellular  customer 
activating his or her phone both to place an outgoing call and to 
accept an incoming call;  (3) the definition  of the term  "rates 
charged" in Section 332(c)(3) of the Communications Act, includes 
at least  the  elements of  a  CMRS provider's  choice  of  which 
services to charge for and how much to charge for these services; 
(4) challenges to  the "rates  charged" to  end users  by a  CMRS 
provider, including  charges for  incoming calls  and charges  in 
whole-minute increments, are exclusively governed by federal  law 
under section 332(c)(3) of the Communications Act; and (5) state-
law claims directly or indirectly challenging the "rates charged" 
by CMRS providers are barred by Section 332(c)(3). 
22  SBMS, 14 FCC Rcd at 19902 n.17.
23 Id.  at  19902  (Competitive market  forces  best  govern  the 
relationship between CMRS providers and their customers). 
24 Id.  at 19905;  see also  Petition for  Declaratory Ruling  On 
Issues Contained In Count I  of White v. GTE, Memorandum  Opinion 
and Order, WT Docket No. 00-164,  20001 WL 561271 (May 25,  2001) 
25  The factors that are considered in assessing a section 201(b) 
violation include  ``the relationship of carrier costs to billing 
charges or  practices,  consumers'  expectation  based  on  their 
wireline experience,  and  the  role  of  competitive  markets.'' 
White, WT Docket No. 00-164, 20001 WL 561271 at 5 (May 25, 2001).
26   See Falcon Cablevision, Memorandum Opinion and Order, 11 FCC 
Rcd 1051, 10525 (1996).
27  Complaint at 15-16. 
28  Complaint at 5.
29  Id.
30  Answer, Tab D, at 16-18.
31  Id.  
32  Id. at 15-16.
33  PageNet states that Mr. Kiefer  was only assessed a late  fee 
for six of his fifty late payments.  PageNet claims that the  sum 
of these six late fees amounts to $30.00.  Id. at 18-20. 
34  Complaint at 5.
35  In  addition, we  note  that Mr.  Kiefer  had the  option  to 
discontinue his relationship with PageNet and subscribe to paging 
service from other  providers in Michigan.   PageNet states  that 
from 1991  through  2000,  there  were  an  average  of  over  90 
companies providing  paging services  in Kiefer's  billing  area.  
Answer, Tab D, at 24.