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Federal Communications Commission
Washington, D.C. 20554
In the matter of )
ASC Telecom, Inc. d/b/a )
) File No. EB-02-TC-136
) NAL/Acct. No. 200232170006
) FRN: 0004372835
Operator Service Provider )
Adopted: March 11, 2004 Released:
March 19, 2004
By the Commission:
1. In this Order, we adopt a Consent Decree terminating an
investigation into possible violations by ASC Telecom, Inc.
("ASC"), d/b/a/ Alternatel, of Section 226 of the Communications
Act of 1934, as amended (the ``Act''), and the Commission's rules
governing operator service providers.1
2. The Commission and ASC have negotiated the terms of a
Consent Decree that would resolve this matter and terminate the
investigation.2 A copy of the Consent Decree is attached hereto
and incorporated by reference.
3. After reviewing the terms of the Consent Decree, we
find that the public interest would be served by approving the
Consent Decree and terminating the investigation.
4. Accordingly, IT IS ORDERED, pursuant to Sections 4(i),
4(j), and 503(b) of the Communications Act of 1934, as amended,3
that the attached Consent Decree IS ADOPTED.
5. ASC shall make its voluntary contribution to the United
States Treasury by mailing a check or similar instrument, payable
to the order of the Federal Communications Commission, to the
Federal Communications Commission, Forfeiture Collection Section,
Finance Branch, P.O. Box 73482, Chicago, Illinois 60673-7482. The
payment should reference NAL/Acct. No. 200232170006 and FRN
6. IT IS FURTHER ORDERED that the Commission investigation
into the matter described herein is terminated.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-03-TC-136
) NAL/Acct. No. 2002321700006
ASC Telecom, Inc. d/b/a/ ) FRN: 0004372835
Operator Service Provide )
1. The Federal Communications Commission (the ``FCC'' or
the ``Commission'') and ASC Telecom, Inc. d/b/a Alternatel
(``ASC''),4 by their authorized representative, hereby enter into
this Consent Decree to resolve two investigations and a Notice of
Apparent Liability (``NAL'')5 (together, the ``Investigations'')
by the Commission regarding non-compliance with the operator
service provider (``OSP'') requirements contained in Sections
226(b)(1)(A), (b)(1)(B), (b)(1)(C)(i), and Section 201(b) of the
Communications Act of 1934, as amended (the ``Act''), and
Sections 64.703(a)(1), (a)(2), and (a)(3)(i) of the Commission's
rules.6 The Investigations were undertaken pursuant to Sections
4(i) and 403 of the Act.7
2. ASC provides operator services that can be accessed
through aggregator telephones across the United States.8
Aggregator phones include phones in hotel and motel rooms, as
well as payphones located in airports, train stations, shopping
malls, gas stations, and other locations where they serve the
public or transient users. ASC states that it provides operator
services over its ``Hospitality Platform,'' which accommodates a
number of customer choices regarding payment method, including
FONCARD, collect, third party, other carriers' calling cards and
major credit cards. As an operator service provider, ASC is
required for all operator services calls to identify itself
audibly and distinctly at the beginning of each call
(``branding'')9, before the consumer incurs any charge; to permit
the consumer to terminate the call at no charge before it is
connected; and to provide its rates to consumers upon request.10
3. On September 23, 2002, the Commission, following an
investigation, issued the NAL. The NAL found that ASC had
apparently violated the Act and the Commission's rules regarding
OSPs on certain toll free access codes.11 Also on September 23,
2002, the Enforcement Bureau of the FCC issued a Letter of
Inquiry regarding ASC's provisioning of operator services.12
4. In the Investigations, and subsequent to the issuance
of the NAL, ASC represented that at one time it had contracted to
provide Operator Services to certain customers (``Contract
Customers'') that owned or controlled Other Access Codes but that
it voluntarily had severed these contractual relationships prior
to gaining any knowledge on its part that the FCC had initiated
the Investigations. ASC represents that it did not own any Other
Access Codes before or after the NAL was issued.
5. Further, ASC represents that it did not develop any
distinct branding or rate disclosure practices specific to
handling calls placed through Other Access Codes and that the
procedures set forth in ASC's submissions to the Commission
regarding branding and rate disclosure for OSP-assisted calls
fully comply with applicable legal requirements. ASC further
represents that there was no intent, purpose or scheme on its
part to deceive or mislead customers through improper branding or
6. For the Purposes of this Consent Decree, the following
definitions shall apply:
(a) The ``FCC'' or the ``Commission'' means the Federal
Communications Commission and all bureaus and offices of the
Commission, including the Enforcement Bureau.
(b) ``Bureau'' means the Enforcement Bureau of the Federal
(c) ``ASC'' or the ``Company'' means ASC Telecom, Inc.,
d/b/a Alternatel, and any affiliate, d/b/a, predecessor-in-
interest, parent companies and any direct or indirect
subsidiaries of such parent companies, or other affiliated
companies or businesses, and their successors and assigns.
(d) ``Parties'' means ASC and the Federal Communications
(e) ``OSPs'' means providers of operator services, as
defined by the Act and the Commission's rules.13
(f) ``Other Access Codes'' means toll-free access codes
that differ from 1-800-COLLECT (1-800-265-5328), 1-800-
CALLATT (1-800-225-5288), or 1-800-OPERATOR (1-800-673-7286
(7)) by no more than one digit.
(g) ``Adopting Order'' means an Order of the Commission
adopting the terms and conditions of this Consent Decree
without change, addition or modification.
(h) ``Effective Date'' means the date on which the
Commission adopts the Adopting Order.
(i) ``Hospitality Platform'' means the ASC/Sprint operator
services platform designed and utilized to service primarily
(j) Notice of Apparent Liability (``NAL'') means the NAL
adopted on September 23, 2002, ASC Telecom, Inc., d/b/a/
Alternatel, Notice of Apparent Liability for Forfeiture, 17
FCC Rcd 18654 (2002).
7. ASC represents and warrants that it is the properly
named party to this Consent Decree and is solvent and has
sufficient funds available to meet fully all financial and other
obligations set forth herein. ASC further represents and warrants
that it has caused this Consent Decree to be executed by its
authorized representative, as a true act and deed, as of the date
affixed next to said representative's signature. Said
representative and ASC respectively affirm and warrant that said
representative is acting in his/her capacity and within his/her
authority as a corporate officer of ASC, and on behalf of ASC and
that by his/her signature said representative is binding ASC to
the terms and conditions of this Consent Decree.
8. ASC agrees that the Commission has jurisdiction over it
and the matters contained in this Consent Decree and the
authority to enter into and adopt this Consent Decree.
9. ASC will make a voluntary contribution to the United
States Treasury in the amount of one hundred twenty-five thousand
dollars ($125,000.00) within 14 calendar days after the
Commission Order adopting this Consent Decree becomes final. ASC
must make this payment by check, wire transfer, or money order
drawn to the order of the Federal Communications Commission, and
the check, wire transfer, or money order should refer to ``NAL
Acct. No. 200232170006.'' If ASC makes this payment by check or
money order, it must mail the check or money order to:
Forfeiture Collection Section, Finance Branch, Federal
Communications Commission, P.O. Box 73482, Chicago, Illinois,
60673-7482. If ASC makes this payment by wire transfer, it must
wire such payment in accordance with Commission procedures for
10. For purposes of settling the matters set forth herein,
ASC agrees to take the actions described below:
(a) ASC will not knowingly provide, and will not enter into
an agreement to knowingly provide, Operator Services on
calls initiated over Other Access Codes.
(b) ASC will require any agreement it enters into with
other operator service providers to preclude such provider
from delivering to ASC any calls initiated over Other Access
(c) ASC agrees that it will institute the following
``Compliance Plan'' as set forth below, beginning no later
than 30 days after the Effective Date:
(i) ASC will require each new employee hired to work
as an operator to undergo training prior to processing
operator service calls. For purposes of this section
10(c), the term ``operator'' shall mean an operator
processing calls via tollfree access codes over ASC's
Hospitality Platform. Such training will include
materials emphasizing the need for complete and
accurate branding, rate disclosure, and lawful
processing of operator service calls.
(ii) ASC will provide, on an annual basis, refresher
training to its operators. Such refresher training
shall review the need for complete and accurate
branding, rate disclosure, and lawful processing of
calls and to provide ongoing training as necessary.
(iii) ASC will on a biannual basis, audit the
performance of the operators, and such audit shall
include real-time monitoring of actual calls. The audit
results for individual operators may be used by ASC to
take corrective or disciplinary action as ASC, in its
sole judgment, deems appropriate.
(iv) ASC will require those employees supervising the
operators to supervise in a manner that will promote
the provision of accurate and lawful operator services.
Nothing in this Compliance Plan shall alter ASC's obligation to
otherwise comply with the Act
and with the Commission's rules and orders.
11. Within 90 days from the Effective Date, ASC will
provide a formal report to the Bureau of its compliance with this
Consent Decree, including progress in implementing its Compliance
Program. ASC also agrees to send to the Bureau, upon 30 days
after receiving a written request from the Bureau, a report
updating its compliance efforts with regard to this Consent
12. In express reliance on the covenants and
representations contained herein, the Commission agrees to
terminate the Investigations concerning compliance with Sections
226(b)(1)(A), (b)(1)(B), (b)(1)(C)(i) and Section 201(b) of the
Act, and Sections 64.703(a)(1), (a)(2) and (a)(3)(i) of the
Commission's rules and resolve the Investigations, including the
NAL. By this Consent Decree, the Notice of Apparent Liability is
cancelled, the apparent findings in the NAL are withdrawn, and
the NAL has no legal force or effect.
13. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement of the Investigations.
The Commission agrees that, in the absence of new material
evidence related to this matter, it will not use the facts
developed in the Investigations or the existence of this Consent
Decree, on its own motion, to initiate any new proceedings,
formal or informal, or take any actions, including any other
enforcement action, against ASC, nor will the Commission, on its
own motion, seek any administrative or other penalties from ASC
based on these Investigations. Consistent with the foregoing,
nothing in this Consent Decree limits the Commission's authority
to consider and adjudicate any complaint that may be filed
pursuant to Section 208 of the Act, 47 U.S.C. § 208, and to take
any action in response to such complaint.
14. ASC waives any and all rights it may have to seek
administrative or judicial reconsideration, review, appeal, or
stay, or to otherwise challenge or contest the validity of this
Consent Decree and the Order adopting this Consent Decree,
provided the Order adopts the Consent Decree without change,
addition, or modification.
15. ASC's decision to enter into this Consent Decree is
expressly contingent upon the issuance of an Adopting Order by
the Commission that is consistent with this Consent Decree, and
which adopts the Consent Decree without change, addition, or
16. ASC represents and warrants that it shall not effect
any change in its form of doing business or its organizational
identity or participate directly or indirectly in any activity to
form a separate entity or corporation that engages in acts
prohibited in this Consent Decree or for any other purpose which
would otherwise circumvent any part of this Consent Decree or the
obligations of this Consent Decree.
17. In the event that this Consent Decree is rendered
invalid by any court of competent jurisdiction, it shall become
null and void and may not be used in any manner in any legal
18. The Parties also agree that if any provision of this
Consent Decree conflicts with any subsequent rule or order
adopted by the Commission, where compliance with the provision
would result in a violation of the subsequent rule or order, that
provision will be superseded by such Commission rule or order.
19. By this Consent Decree, ASC does not waive or alter its
right to assert and seek protection from disclosure of any
privileged or otherwise confidential and protected documents and
information, or to seek appropriate safeguards of confidentiality
for any competitively sensitive or proprietary information. The
status of materials prepared for, reviews made and discussions
held in the preparation for and implementation of ASC's
compliance efforts under this Consent Decree, which would
otherwise be privileged or confidential, are not altered by the
execution or implementation of the terms of this Consent Decree,
and no waiver of such privileges is made by this Consent Decree.
When the Commission is legally able to return any documents
submitted by ASC as part of the Investigations pursuant to a
request for confidential treatment, the Commission agrees that
upon ASC's request, it will return such documents within 30 days
of such request.
20. If either Party (or the United States on behalf of the
Commission) brings a judicial action to enforce the terms of the
Adopting Order, neither ASC nor the Commission shall contest the
validity of the Consent Decree or the Adopting Order, and ASC and
the Commission will waive any statutory right to a trial de novo
with respect to the issuance of the Adopting Order and shall
consent to a judgment incorporating the terms of this Consent
21. The Parties agree that this Consent Decree does not
constitute either an adjudication on the merits or a factual or
legal finding regarding any compliance or noncompliance with the
requirements of the Act and the Rules. The Parties agree that
this Consent Decree is for settlement purposes only and that by
agreeing to this Consent Decree, ASC does not admit any
wrongdoing, non-compliance, or violation of the Act or the
Commission rules in connection with the matters that are the
subject of this Consent Decree.
22. ASC agrees that any violation of the Consent Decree or
the Adopting Order will constitute a separate violation of a
Commission order, entitling the Commission to exercise any rights
or remedies attendant to the enforcement of a Commission order.
23. The Parties agree that the requirements of this Consent
Decree shall expire thirty-six (36) months from the Effective
24. This Consent Decree may be signed in counterparts.
For the Federal Communications Commission For ASC Telecom,
Marlene H. Dortch Michael Hyde
Secretary Vice President and
1 47 U.S.C. §§ 226(b)(1)(A), (b)(1)(C)(i); 47 C.F.R. §§
64.703(a)(1), (a)(3)(i), (a)(4).
2 See ASC Telecom, Inc. d/b/a/ Alternatel, Notice of Apparent
Liability for Forfeiture, 17 FCC Rcd 18654 (2002).
3 47 U.S.C. §§ 154(i), 154(j), 503(b).
4 ASC is an indirect subsidiary of Sprint Corporation. See
ASC's 2002 FCC Form 499-A Telecommunications Reporting Worksheet.
ASC is located at 6200 Sprint Parkway, Overland Park, KS 66251.
The definitions of the term ASC and other defined terms are
set forth in Section II of this decree.
5 ASC Telecom, Inc. d/b/a Alternatel, Notice of Apparent
Liability for Forfeiture, 17 FCC Rcd 18654 (2002).
6 47 U.S.C. §§ 226(b)(1)(A), (b)(1)(B), (b)(1)(C)(i); §201(b);
47 C.F.R. §§ 64.703(a)(1), (a)(2), (a)(3)(i).
7 47 U.S.C. §§ 154(i), 403.
8 ``Operator services'' are defined by the Act and the
Commission's rules as ``any interstate telecommunications service
initiated from an aggregator location that includes, as a
component, any automatic or live assistance to a consumer to
arrange for billing or completion, or both, of an interstate
telephone call through a method other than: (A) automatic
completion with billing to the telephone from which the call
originated; or (B) completion through an access code used by the
consumer, with billing to an account previously established with
the carrier by the consumer.'' 47 U.S.C. § 226(a)(7)(A)-(B); 47
C.F.R. §§ 64.708(i)(1)-(2). An ``aggregator'' is ``any person
that, in the ordinary course of its operations, makes telephones
available to the public or to transient users of its premises,
for interstate telephone calls using a provider of operator
services.'' 47 U.S.C. § 226(a)(2); 47 C.F.R. §64.708(b).
9 ``Branding'' occurs when an OSP ``identif[ies] [itself],
audibly and distinctly, to the consumer.'' 47 U.S.C. §
226(b)(1)(A); 47 C.F.R. § 64.703(a)(1). See also Policies and
Rules Concerning Operator Service Access and Pay Telephone
Compensation, Notice of Proposed Rulemaking, 6 FCC Rcd 1448
10 47 U.S.C. §§ 226(b)(1)(A), (b)(1)(B), (b)(1)(C)(i); 47
C.F.R. §§ 64.703(a)(1), (a)(2), (a)(3)(i). The FCC has
interpreted the statute to permit branding to occur after the
input of billing information if operator service providers use
automated equipment that under certain circumstances transfers a
call to another carrier. This ensures ``that the consumer hears
only the brand of the OSP who is actually handling the call.''
Policies and Rules Concerning Operator Service Providers, CC Dkt.
90-313¸ Order on Reconsideration¸ 7 FCC Rcd 3882, ¶¶ 1, 5-9
11 ``Access code'' means ``a sequence of numbers that, when
dialed, connect the caller to the provider of operator services
associated with that sequence.'' 47 U.S.C. § 226(a)(1); 47 C.F.R.
12 See Letter from Colleen K. Heitkamp, Chief,
Telecommunications Consumers Division, Enforcement Bureau,
Federal Communications Commission to Richard Juhnke, Vice-
President, Federal Regulatory Affairs, ASC Telecom, Inc., d/b/a
Alternatel, September 23, 2002.
13 See 47 U.S.C. § 226(a)(9); 47 C.F.R. § 64.708(l).