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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
Operator Communications, Inc., )
Contel of the South, Inc. d/b/a )
Verizon Mid-States, Verizon )
California Inc., The )
Micronesian Telecommunications ) File No. EB-05-MD-009
Corporation, Verizon Delaware )
Inc., Verizon Florida Inc., )
Verizon Maryland Inc., Verizon )
New England Inc., Verizon New )
York Inc., Verizon New Jersey )
Inc., Verizon North Inc., )
Verizon Northwest Inc., Verizon )
South Inc., Verizon )
Pennsylvania Inc., GTE )
Southwest Inc., Verizon )
Washington, D.C. Inc., and
Verizon West Virginia, Inc.,
MEMORANDUM OPINION AND ORDER
Adopted: December 9, 2005 Released: December 9,
By the Commission:
1. In this Memorandum Opinion and Order, we dismiss a
formal complaint1 filed by Operator Communications, Inc.
(``OCI'') against the Verizon Telephone Companies2 pursuant to
section 208 of the Communications Act of 1934, as amended
(``Act'').3 OCI's Formal Complaint seeks, inter alia, a refund
of certain presubscribed interexchange carrier charges
(``PICCs'') that Verizon billed to OCI from April 1998 to April
2001. OCI did not initiate its claim for refund, however, until
July 6, 2004, more than six years after the charges began, and
more than three years after the charges ceased. OCI has
proffered no valid basis to excuse the delay in initiating its
claims. Consequently, OCI's claim is barred by the two-year
statute of limitations in section 415 of the Act.4 To promote
fairness and finality, a party seeking from the Commission the
serious remedy of a monetary damages award against a particular
common carrier must do so in strict accordance with the
requirements of the Act and our rules.
II.A. The Parties
2. At all relevant times, OCI was a presubscribed 0+
interexchange carrier for payphones owned by the Verizon
Telephone Companies.5 The presubscribed interexchange carrier is
selected by either the owner of the payphone or the location
provider to provide long distance services for coinless calls
made by callers dialing ``0'' plus the telephone number. OCI
provides operator-assisted calling service, primarily from local
exchange carrier (``LEC'') pay telephones.6 The Verizon
Telephone Companies (``Verizon'') are the affiliated incumbent
local exchange carriers and wholly owned (directly or indirectly)
subsidiaries of Verizon Communications Inc.7 Verizon serves
territories formerly served by Bell Atlantic entities, NYNEX
entities, and GTE.8
II.B. The Notice and Comment Proceeding
3. On May 4, 1998, the Commission issued a Public Notice
seeking comments regarding whether and to what extent the
Commission's rules permitted LECs to bill PICCs for lines serving
LEC-owned payphones.9 The Commission initiated that proceeding
(the ``Notice-and-Comment Proceeding'') in response to several
letters -- including a letter dated April 22, 1998 from OCI to
the Chief of the Common Carrier Bureau10 -- questioning the
lawfulness of such PICCs then being billed by LECs.11
4. Later in 1998, Bell Atlantic filed comments and reply
comments, and OCI filed comments, in the Notice-and-Comment
Proceeding.12 In 1999, OCI filed in the Notice-and-Comment
Proceeding a motion for interim relief -- to which Bell Atlantic
filed an Opposition -- and a request to file a supplement to its
motion for interim relief.13 OCI sought in those filings a
Commission order directing Bell Atlantic to refrain from taking
adverse action against OCI based on OCI's refusal to pay PICCs on
payphone lines.14 The Commission did not rule on OCI's Interim
Request and Supplement Request in the Notice-and-Comment
Proceeding, which remains open.15 The last OCI filing in the
Notice-and-Comment Proceeding was its Supplement Request, dated
August 20, 1999.16
5. Between April 1998 and April 2001, in reliance on
various tariff provisions, Verizon assessed the PICC on OCI for
lines serving Verizon-owned payphones.17 OCI ultimately paid
those charges, protesting to Verizon as it did so.18
6. On June 25, 2003, in a proceeding other than the
Notice-and-Comment Proceeding, the Commission issued an order
addressing the questions raised in the Notice-and-Comment
Proceeding.19 Specifically, the Payphone PICC Order
``establish[ed] that payphone lines are exempted from the PICC on
a going-forward basis .... Therefore, price cap LECs that still
assess the PICC on multi-line business lines must adjust their
rates in their October 1, 2003 tariff filings to reflect that the
PICC no longer applies to payphone lines.''20 The Payphone PICC
Order went on to state that the Commission ``ma[d]e no finding
with respect to the application of PICCs prior to the effective
date of this Order.''21
II.C. OCI's Claim for Damages from Verizon
7. On July 6, 2004, pursuant to section 1.716 of our
rules,22 OCI filed an informal complaint against Verizon seeking
(i) lost profits and (ii) refunds of the PICCs that Verizon
assessed OCI from April 1998 to April 2001.23 OCI contended that
the Payphone PICC Order's exemption of payphone lines from PICCs
applies retroactively and renders Verizon's PICCs unlawful under
sections 201(b) and 276 of the Act. After Verizon responded by
denying OCI's claim,24 OCI ``converted'' its informal complaint
to a formal complaint pursuant to section 1.718 of our rules.25
8. Verizon asserts three defenses to OCI's claim. First,
Verizon argues that the two-year statute of limitations in
section 415 of the Act bars OCI's claim, because the claim
accrued upon OCI's receipt of each PICC bill, and OCI received
the last such bill in April 2001, much more than two years before
OCI filed the July 6, 2004 informal complaint.26 Second, in
Verizon's view, Verizon's PICCs were lawfully tariffed when
assessed on OCI through April 2001, and the Commission's
subsequent exemption of payphone lines from PICCs in the 2003
Payphone PICC Order applies prospectively only.27 Third,
according to Verizon, Verizon assessed most of the PICCs at issue
pursuant to tariffs that were filed on a ``streamlined'' basis
pursuant to section 204(a)(3) of the Act,28 so most of the
charges are ``deemed lawful'' and cannot form the basis of a
9. For the following reasons, we hold that the two-year
statute of limitations in section 415 of the Act bars OCI's claim
in its entirety. Consequently, we dismiss OCI's Formal Complaint
without reaching Verizon's other affirmative defenses.
III.A. Absent Tolling, the Two-Year Statute of
Limitations Bars OCI's Claim.
10. The two-year statute of limitations in section 415 of
the Act applies to OCI's claim.30 That ``statute of limitations
is a statute of repose, designed to protect a potential defendant
against stale and vexatious claims by ending the possibility of
litigation after a reasonable period of time has elapsed.''31
Consequently, ``[s]ection 415 ... must be applied even if to do
so produces hardships.''32
11. It is well established that a customer's claim
challenging the lawfulness of a carrier's charges accrues when
the customer receives the carrier's bill containing the allegedly
unlawful charges.33 Applying that rule here, a portion of OCI's
damages claim accrued each time OCI received a PICC bill from
Verizon from April 1998 to April 2001.34 Accordingly, under the
two-year statute of limitations set forth in section 415 of the
Act, portions of OCI's damages claim began to expire in April
2000, and the claim lapsed altogether in April 2003.
Consequently, absent some basis for tolling the running of the
limitations period, we must dismiss as time-barred OCI's July
2004 claim for PICC refunds.
12. OCI does not dispute the foregoing operation of the
statute of limitations. OCI asserts two grounds, however, for
tolling the running of the limitations period: (1) general
principles of equity and (2) the pendency of the Notice-and-
Comment Proceeding. We consider and reject each of those grounds
III.B. Principles of Equity Do Not Warrant Tolling.
13. OCI argues that principles of equity warrant tolling of
the limitations period applicable to its damages claim against
Verizon, because (i) OCI had to pay Verizon's PICC bills in order
to avoid serious harm to its business; (ii) Verizon knowingly
assumed the risk that the Commission would ultimately find the
payphone PICCs unlawful; (iii) Verizon's payphone PICCs did not
serve to reimburse Verizon for any incurred costs; (iv) the
Commission's PICC rules were ambiguous, as applied to payphone
lines; (v) OCI actively participated in the Notice-and-Comment
Proceeding; (vi) the Commission did not resolve the Notice-and-
Comment Proceeding expeditiously; (vii) OCI consistently
protested to Verizon regarding the payphone PICCs; and (viii)
``OCI had no other [remedial] options.... It was stuck in a
notice and comment proceeding.''35 Put differently, according to
OCI, it would be unfair to enforce the statute of limitations
against OCI, given that doing so would harm OCI more than it
would benefit Verizon, and OCI did everything it could and should
have done to preserve its claim. We reject OCI's argument, for
the following reasons.
14. OCI has not cited any precedent (and we have found
none) in which either the Commission or a court has tolled the
operation of section 415 on ``equitable'' grounds like those
proffered by OCI here. ``The construction of section 415 by the
Commission and the federal courts has been strict and exceptions
to its application have been confined to narrow
circumstances.''36 Indeed, the Commission has identified only
one circumstance that warrants equitable tolling of section 415 -
fraudulent concealment by the defendant of the facts giving rise
to the claim.37 As the Commission has explained:
[Where] there is no allegation of fraud or
deceit, having been practiced by the
defendant upon complainant to prevent him
from becoming aware of the facts which are
the basis of its claim, there is no way of .
. . tolling the statute of limitations.38
15. Applying that standard here, ``there is no way of
tolling the statute of limitations.'' OCI has neither shown nor
even alleged that Verizon concealed the fact that Verizon was
assessing PICCs on OCI's payphone lines.39 In fact, Verizon
expressly suggested over five years ago that OCI should file a
complaint if it sought to recover such PICCs.40
16. In a short footnote in its final substantive submission
-- which concerns an entirely different issue -- OCI suggests for
the first time that Verizon committed fraud by twice telling OCI
that Verizon would refund paid PICCs if the Commission were to
rule that payphone PICCs are unlawful.41 OCI's suggestion is not
only late,42 but also erroneous. One Verizon statement was
nothing more than a recognition by Bell Atlantic that OCI's
agreement to pay disputed charges was not a concession by OCI of
the charges' validity; no reference to refunds was made.43 The
other Verizon statement was one made merely by a GTE billing
specialist that ``appropriate'' credits would be provided if the
Commission were to rule in OCI's favor.44 However, OCI could not
have reasonably believed that ``appropriate'' credits would
include those sought more than two years after the disputed
charges were imposed, especially given that, several months after
this statement by a GTE billing specialist, attorneys for GTE's
imminent purchaser (Bell Atlantic) expressly notified OCI of the
need to file a complaint.45 Indeed, OCI has presented no
argument or evidence that it refrained from filing a complaint in
reliance on either of these statements. Thus, OCI has fallen
short of meeting the high evidentiary burden of showing fraud.46
Consequently, we reject OCI's contention that we should equitably
toll the operation of section 415 in this case.
17. In addition, even assuming, arguendo, that we could
equitably toll the operation of section 415 on some basis other
than fraudulent concealment, OCI's proffered bases are not
compelling. First, as fully explained infra,47 OCI's contention
that it had no choice but to await the outcome of the Notice-and-
Comment Proceeding before filing a complaint for damages against
Verizon is unfounded. As Verizon itself pointed out to OCI in
1999, at all relevant times OCI could have filed a complaint for
damages against Verizon if OCI had an interest in pursuing that
remedy. 48 Second, even within the context of the Notice-and-
Comment Proceeding, OCI did not diligently pursue the remedy it
seeks here: OCI's submissions never mentioned a request for
refunds or lost profits;49 and OCI submitted its last pleading in
that Proceeding in 1999, 50 and then remained silent for almost
four years before the Commission answered the payphone PICC
questions raised in that Proceeding. Third, even after the
Commission answered the payphone PICC questions raised in that
Proceeding,51 OCI waited another year before filing its informal
complaint for damages against Verizon.52
18. Finally, OCI's assertion that applying the statute of
limitations would unfairly allow a large company like Verizon to
retain ill-gotten gains at the expense of a small company like
OCI similarly provides no basis for tolling section 415. As the
Commission has frequently stated, ``the fact that application of
section 415 of the Act may result in hardship in some instances
does not mean Congress intended that the statute be tolled or
that a defendant may be estopped from reliance thereon.''53
Indeed, statutes of limitations inherently involve the potential
for denying otherwise valid claims. In recently affirming the
Commission's holding that section 415 barred certain damages
claims brought by relatively small independent payphone providers
(``IPPs'') against relatively large local exchange carriers
(``LECs'') (including Verizon), the D.C. Circuit observed:
While it is certainly true that the
Commission's decision [not to equitably toll
section 415] allows the LECs to keep money
that ... they collected unlawfully, that is
both the nature of a statute of limitations
and the consequence of the IPPs' failure to
file and pursue their complaints in a timely
That observation is particularly apt in this proceeding, because
here, unlike in the D.C. Circuit case, Verizon asserts several
defenses that the Commission has not decided; consequently, here,
unlike in the D.C. Circuit case, it is not clear that Verizon
collected the charges unlawfully.
19. In sum, we reject OCI's contention that we should
equitably toll the running of the limitations period under
section 415. OCI has shown neither fraudulent concealment by
Verizon nor any other basis to warrant such tolling.
III.C. The Pendency of the Notice-and-Comment Proceeding
Does Not Warrant Tolling.
20. OCI also contends that the pendency of the Notice-and-
Comment Proceeding tolls the running of the limitations period
for OCI's damages claim against Verizon. In OCI's view, once the
Commission chose to examine the lawfulness of payphone PICCs in
the context of the Notice-and-Comment Proceeding, OCI allegedly
had no choice but to await that Proceeding's outcome before
filing its damages claim.55 According to OCI:
[C]arriers did not have the same options they
have today for filing complaints against
other carriers. OCI's only option -
particularly since the Commission already
initiated a proceeding addressing the matter
- was to submit pleadings, comments, motions,
and form orders in the [Notice-and-Comment
Proceeding] .... [A]ny other initiative at
the Commission would be duplicative.56
21. OCI's fundamental premise is incorrect. It simply is
not true that an aggrieved party could not file an adjudicatory
complaint for damages against a particular defendant while a
general, notice-and-comment proceeding involving similar issues
was pending.57 No Commission rule or order creates such a bar,
and OCI cites to none. Recognizing this, Verizon pointed out to
OCI the need to file a complaint in 1999,58 as did Qwest,59 which
OCI failed to do. Indeed, the Commission's rules contemplate the
possibility of simultaneous complaint and non-complaint
proceedings. Rule 1.721(a)(9) requires a plaintiff to indicate
``whether the complaint seeks prospective relief identical to the
relief proposed or at issue in a notice-and-comment proceeding
that is concurrently before the Commission. . . .''60 Thus, the
fact that the Notice-and-Comment Proceeding was pending did not
bar OCI from filing, at a minimum, an informal complaint to
preserve its rights and did not toll the limitations period
applicable to OCI's adjudicatory damages claim against Verizon.61
Indeed, under closely analogous circumstances, the D.C. Circuit
recently confirmed that the filing of a petition for declaratory
ruling by a trade association does not toll the statute of
limitations for damages complaints by individual payphone
providers addressing the same underlying conduct.62
22. OCI analogizes the situation here to situations in
which courts, invoking the administrative exhaustion doctrine,
toll the limitations period for filing a court claim while a
party pursues all available administrative remedies.63 That
analogy does not bear out. The administrative exhaustion
doctrine addresses the adjudicatory functions of, and the
relationships between, agencies and courts and does not apply in
this wholly intra-agency context. The question here concerns the
complaint and non-complaint functions within the Commission
itself, not the complaint functions of the Commission and courts;
and, as previously stated, there is no Commission rule or order
requiring ``exhaustion'' of general notice-and-comment procedures
before a particular plaintiff may file an adjudicative complaint
for damages against a specific defendant.64
23. Almost as an aside, OCI cursorily suggests in its
Formal Complaint that its submissions in the Notice-and-Comment
Proceeding constitute an informal complaint for damages under
Commission rules and thereby tolled the running of the
limitations period of section 415.65 We reject that suggestion.
An ``informal complaint'' filed pursuant to sections 1.716 -
1.718 of the Commission's rules constitutes a ``complaint''
within the meaning of section 415 of the Act and thus tolls the
running of the limitations period.66 Although the Commission's
rules regarding the content of informal complaints are not
extensive, they do require the complainant to put a defendant and
the Commission on fair notice that the complainant is seeking (i)
the initiation of the Commission's section 208 complaint
procedures (ii) regarding a particular defendant and (iii) a
specific remedy that may later be sought in a formal complaint.67
24. OCI's submissions in the Notice-and-Comment Proceeding
did none of those things. OCI's April 1998 Letter and subsequent
Comments were not styled as complaints, did not reference the
complaint provisions of the Act or the Commission's rules, did
not name any Verizon entity as a particular target of their
actions, and did not request the specific remedy of monetary
damages against a particular defendant, which remedy ``can only
be obtained from the Commission within the parameters established
by Sections 206-209 of the Act and Sections 1.711 through 1.735
of the Commission's rules.''68 The same is true of OCI's Interim
and Supplement Requests (except that those did pertain to
25. Because OCI's submissions lacked the fundamental traits
of an informal complaint, the Commission plainly and correctly
did not handle OCI's submissions as an informal complaint under
the Commission's rules. OCI never asked the Commission to treat
its submissions as an informal complaint, and never notified the
Commission that it believed its submissions constituted an
informal complaint that could ultimately entitle it to monetary
damages in a formal complaint proceeding against Verizon.
Further, Verizon plainly did not view OCI's submissions as a
complaint, because Verizon suggested in response to these filings
that OCI ought to file a complaint.70 Even after this explicit
invitation, OCI did not respond by saying its submissions already
constituted an informal complaint or separately file a complaint.
Given these circumstances, we find that OCI's submissions in the
Notice-and-Comment Proceeding do not constitute an informal
complaint that tolled the operation of section 415.71
26. The rulings in MCI v. PacTel and Communications Vending
v. FCC support these conclusions. Both of those cases soundly
reject belated attempts to re-characterize as complaints
submissions closely akin to those of OCI here, i.e., letters that
neither referenced any complaint provisions nor sought damages
from a particular defendant.72 Accordingly, OCI's submissions in
the Notice-and-Comment Proceeding did not toll the running of the
limitations period set forth in section 415 of the Act.
27. Even if we were to disregard reason and precedent to
treat OCI's submissions in the Notice-and-Comment Proceeding as
an informal complaint, section 415 would still time-bar OCI's
Formal Complaint for two reasons. First, if we were to liberally
construe OCI's submissions in the Notice-and-Comment Proceeding
as an informal complaint, then we would also have to liberally
construe Verizon's submissions in the Notice-and-Comment
Proceeding as a ``response'' to OCI's informal complaint, in
which case OCI would have had six months from Verizon's response
(or until 2000) to file a formal complaint that would ``relate-
back'' to the filing date of OCI's informal complaint.73 OCI
missed that deadline by several years. Second, 47 C.F.R. § 1.716
requires an informal complaint to state ``the specific relief or
satisfaction sought,'' and the filing date of a formal complaint
relates back to the prior filing date of the informal complaint
only if, inter alia, the formal complaint ``is based on the same
cause of action as the informal complaint.''74 Because OCI's
submissions in the Notice-and-Comment Proceeding did not seek the
specific relief that OCI seeks in this formal complaint
proceeding (i.e., retrospective money damages), OCI's formal
complaint filed in 2005 is not based on the same cause of action
as OCI's Notice-and-Comment submission and thus does not relate
back to OCI's 1998-1999 ``informal complaint.''75
28. OCI's claim against Verizon for monetary damages
accrued no later than April 2001. The applicable statute of
limitations is two years. Therefore, absent some basis for
tolling of the running of the two-year limitations period, OCI's
claim expired in April 2003, well before OCI filed this formal
complaint. All of the bases proffered by OCI for such tolling
lack merit. Therefore, the statute of limitations bars OCI's
V. ORDERING CLAUSE
29. ACCORDINGLY, IT IS HEREBY ORDERED that, pursuant to
sections 1, 4(i), 4(j), 208, and 415 of the Communications Act of
1934, as amended, 47 U.S.C. §§ 151, 154(i), 154(j), 208, and 415,
the formal complaint filed by Operator Communications, Inc. is
DISMISSED WITH PREJUDICE.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
1 Formal Complaint of Operator Communications, Inc., File No. EB-
05-MD-009 (filed June 3, 2005) (``Formal Complaint'').
2 Contel of the South, Inc. d/b/a Verizon Mid-States, Verizon
California Inc., The Micronesian Telecommunications Corporation,
Verizon Delaware Inc., Verizon Florida Inc., Verizon Maryland
Inc., Verizon New England Inc., Verizon New York Inc., Verizon
New Jersey Inc., Verizon North Inc., Verizon Northwest Inc.,
Verizon South Inc., Verizon Pennsylvania Inc., GTE Southwest
Inc., Verizon Washington, D.C. Inc., and Verizon West Virginia,
Inc. See Revised Joint Statement of Stipulated Facts, Disputed
Facts, and Key Legal Issues, File No. EB-05-MD-009 (filed Aug. 8,
2005) (``Revised Joint Statement'') at 1, n.1.
3 47 U.S.C. § 208.
4 47 U.S.C. § 415.
5 See, e.g., Revised Joint Statement at 2, ¶ 2. OCI was formerly
known as Oncor. See Joint Statement of Stipulated Facts,
Disputed Facts, and Key Legal Issues, File No. EB-05-MD-009
(filed July 12, 2005) (``Joint Statement'') at Exhibits JS-15,
17, 20, 22.
6 OCI is no longer a going concern. See Contel of the South,
Inc. d/b/a/Verizon Mid-States v. Operator Communications, Inc.,
Answer and Affirmative Defenses of Operator Communications, Inc.,
File No. EB-05-MD-007 (filed June 23, 3005) Tab D (Legal
Analysis) at 1. Its only ``assets'' appear to be this claim
against Verizon and similar claims that it filed in 2005 against
SBC Communications, Inc., Qwest Corporation, and Sprint
Corporation, all of whom raise the same limitations defense as
does Verizon here. See OCI v. SBC Communications, Inc., Informal
Complaint of Operator Communications, Inc., File No. EB-05-MDIC-
0017 (filed June 17, 2005); OCI v. Sprint Corp., Informal
Complaint of Operator Communications, Inc., File No. EB-05-MDIC-
0019 (filed June 17, 2005); OCI v. Qwest Corp., Informal
Complaint of Operator Communications, Inc., File No. EB-05-MDIC-
0018 (filed June 17, 2005).
7 See, e.g., Revised Joint Statement at 2, ¶¶ 3-4.
8 See, e.g., Contel of the South, Inc. d/b/a/Verizon Mid-States
v. Operator Communications, Inc., Revised Joint Statement of
Stipulated Facts, Disputed Facts, and Key Legal Issues, File No.
EB-05-MD-007 (filed Aug. 8, 2005) at 10, ¶¶ 49-50.
9 Formal Complaint at Exhibit 2 (Commission Seeks Comment on
Specific Questions Related to Assessment of Presubscribed
Interexchange Carrier Charges on Public Payphone Lines, CCB/CPD
No. 98-34 (rel. May 4, 1998)) (``Public Notice'').
10 Formal Complaint at Exhibit 1 (Letter dated Apr. 22, 1998 to
Chief, Common Carrier Bureau, from General Counsel, Oncor, Re:
Application of Presubscribed Interexchange Carrier (PICC) Charges
to Pay Telephones Owned by Local Exchange Carriers) (``April 1998
11 See Public Notice at 3.
12 Formal Complaint at Exhibit 3 (Comments of Oncor
Communications, Inc.); Joint Statement at Exhibit JS-18 (Comments
of Bell Atlantic), JS-19 (Reply Comments of Bell Atlantic).
Other commenters included SBC, US West, Sprint, Southern New
England Telephone, One Call Communications, National Operator
Services, GTE Service Corporation, Cleartel Communications,
BellSouth, MCI, and the American Public Communications Council.
See, e.g., Formal Complaint at 6, n.18.
13 See Formal Complaint at Exhibit 4 (``Interim Request''); Joint
Statement at Exhibit JS-21; Formal Complaint at Exhibit 7
14 Interim Request at 1, 4-5, 10; Supplement Request at 1-2.
15 See Revised Joint Statement at 9, ¶ 68.
16 See Formal Complaint at 32-33, ¶ 73.
17 See Revised Joint Statement at 4-7, ¶¶ 25, 29-53.
18 See, e.g., id. at 4-7, ¶¶ 26-55; 10-12, ¶¶ 75-84.
19 Access Charge Reform, Price Cap Performance Review for Local
Exchange Carriers, Order on Reconsideration, 18 FCC Rcd 12626
(2003) (``Payphone PICC Order'').
20 Payphone PICC Order, 18 FCC Rcd at 12629-30, ¶¶ 8-9.
21 Id. at 12629, ¶ 8. The Commission also noted that ``[p]rice
cap LECs may recover the revenue previously recovered through
assessing the PICC on payphone lines by adjusting their multi-
line business PICCs.'' Id. at 12629-30, ¶ 9.
22 47 C.F.R. § 1.716.
23 Informal Complaint, File No. EB-04-MDIC-0096 (filed July 6,
2004) (``Informal Complaint'').
24 Letter from Kathleen Grillo, Verizon, to Radhika Karmarkar,
Enforcement Bureau, File No. EB-04-MDIC-096 (filed Sept. 3,
25 47 C.F.R. § 1.718. See Formal Complaint. See also Letter
from Alexander P. Starr, Enforcement Bureau, to Danny Adams,
counsel for OCI, and Karen Zacharia, counsel for Verizon, File
No. E05-MD-006 (filed May 23, 2005) (extending until June 3, 2005
OCI's deadline to convert its informal complaint into a formal
complaint pursuant to rule 1.718).
26 See, e.g., The Verizon Telephone Companies' Supplemental
Answer to Operator Communications, Inc.'s Complaint, File No. EB-
05-MD-009 (filed June 30, 2005) (``Verizon Answer'') at 18-22, ¶¶
52-64; 31-32; Supplemental Legal Analysis in Support of Verizon's
Supplemental Answer, File No. EB-05-MD-009 (filed June 30, 2005)
(``Verizon Legal Analysis'') at 1, 4-10; Verizon's Initial Brief,
File No. EB-05-MD-009 (filed Aug. 25, 2005) at 1, 8; Verizon's
Reply Brief, File No. EB-05-MD-009 (filed Sept. 9, 2005) at 1-2.
27 See Verizon Answer at 7-9, ¶¶ 18-19, 21-24; 11-12, ¶ 31; 15-
16, ¶¶ 42-45; 24, ¶ 71; 26-27, ¶¶ 76-81; 32-33. See also Verizon
Legal Analysis at 1-3, 9-13; Verizon's Initial Brief at 1;
Verizon's Reply Brief at 1.
28 47 U.S.C. § 204(a)(3).
29 See Verizon Answer at 27-28, ¶¶ 82-83; 33. See also Verizon
Legal Analysis at 1, 3, 13-16; Verizon's Initial Brief at 2, 9.
30 47 U.S.C. § 415(b) and (c), providing that all complaints
against carriers for the recovery of damages shall be filed with
the Commission within two years from the time the cause of action
31 Bunker Ramo Corp. v. The Western Union Telegraph Co., New
York, N.T., Memorandum Opinion and Order, 31 FCC 2d 449, 453-4, ¶
12 (Rev. Bd. 1971) (``Bunker Ramo v. Western Union''). See,
e.g., Communications Vending Corp. of Arizona, Inc. v. Citizens
Communications Co., Memorandum Opinion and Order, 17 FCC Rcd
24201, 24222-23, ¶ 50 (2002) (``EUCL Order''), aff'd,
Communications Vending Corp. of Arizona, Inc. v. FCC, 365 F.3d
1064 (D.C. Cir. 2004) (``Communications Vending v. FCC''); US
Sprint Communications Co. v. American Telephone & Telegraph Co.,
Memorandum Opinion and Order, 9 FCC Rcd 4801, 4803, ¶ 10 (1994)
(``US Sprint v. AT&T'').
32 Michael J. Valenti and Real Estate Market Place of New Jersey
T/A Real Estate Alternative v. American Telephone and Telegraph
Co., Memorandum Opinion and Order, 12 FCC Rcd 2611, 2621-22, ¶ 24
(1997) (``Valenti v. AT&T''), quoting Municipality of Anchorage
d/b/a Anchorage Telephone Utility v. Alascom, Inc., Memorandum
Opinion and Order, 4 FCC Rcd 2472, 2476, ¶ 30 (Com. Car. Bur.
1989) (``Anchorage v. Alascom''). See, e.g., Communications
Vending v. FCC, 365 F.3d at 1075.
33 See, e.g., MCI Telecommunications Corp. v. U S West
Communications, Inc., Memorandum Opinion and Order, 15 FCC Rcd
9328, 9329-30, ¶ 5 (2000); AT&T Corp. v. Bell Atlantic -
Pennsylvania, Memorandum Opinion and Order, 14 FCC Rcd 556, 565,
¶ 19 (1998); Aetna Life Insurance Co. v. American Telephone and
Telegraph Co., 3 FCC Rcd 2126, 2128-29, ¶ 12 (1988); Tele-
Valuation, Inc. v. American Telephone and Telegraph Co.,
Memorandum Opinion and Order, 73 FCC 2d 450, 452, ¶ 4 (1979)
(``Tele-Valuation v. AT&T''); see also Communications Vending v.
FCC, 365 F.3d at 1073.
34 We note that OCI's claims accrued at this time notwithstanding
the ongoing Notice-and-Comment proceeding, in which the
Commission was evaluating the validity of PICC charges such as
those at issue here. See, e.g., Communications Vending Corp.,
365 F.3d at 1073-74 (rejecting argument that ``a cause of action
cannot accrue [under section 415 of the Act] when the controlling
law does not recognize its validity''), citing Atchison, Topeka &
Santa Fe Ry. Co. v. ICC, 851 F.2d 1432 (D.C. Cir. 1988)
(reversing ICC conclusion that party's cause of action did not
accrue until agency resolved relevant legal question). Below, we
also conclude that the ongoing proceeding does not form a basis
for tolling the two-year limitations period. See infra Part
35 Formal Complaint at 29, ¶ 67. See, e.g., Formal Complaint at
4-9, ¶¶ 8-9, 18-19; 12-17, ¶¶ 28, 30-36, 38-39; 19, ¶¶ 45-47; 29-
34, ¶¶ 65-75. See also Initial Brief of Operator Communications,
Inc., File No. EB-05-MD-009 (filed Aug. 25, 2005) (``OCI Brief'')
at 14-15; Letter from Danny E. Adams, counsel for OCI, to Marlene
H. Dortch, Secretary, FCC, File No. EB-05-MD-009 (filed Sept. 9,
2005, in lieu of a reply brief).
36 Anchorage v. Alascom, 4 FCC Rcd at 2475, ¶ 23. See, e.g.,
Communications Vending v. FCC, 365 F.3d at 1075 (``The Commission
has construed [section 415] strictly. . . We too have set a high
hurdle for equitable tolling, allowing a statute to be tolled
`only in extraordinary and carefully circumscribed
instances.'''); Valenti v. AT&T, 12 FCC Rcd at 2621-22, ¶ 24,
quoting Armstrong Utilities, Inc. v. General Telephone Co. of
Pennsylvania, 25 FCC 2d 385, 389, ¶ 11 (1971) (``Armstrong
Utilities v. General Telephone'') (``The construction of Section
415, both by the Commission and the federal courts, has been
37 EUCL Order, 17 FCC Rcd at 24222, n.145; Valenti v. AT&T, 12
FCC Rcd at 2621-22, ¶ 24; US Sprint v. AT&T, 9 FCC Rcd at 4802, ¶
10; Anchorage v. Alascom, 4 FCC Rcd at 2475, ¶ 23; Tele-Valuation
v. AT&T, 73 FCC2d at 452-3, ¶ 4 and n.7; U.S. Cablevision v. New
York Telephone Co., Memorandum Opinion and Order, 46 FCC 2d 704,
706-7, ¶ 5 (1974) (``Cablevision v. New York Tel''); Bunker Ramo
v. Western Union, 31 FCC 2d at 453-4, ¶ 12; Armstrong Utilities
v. General Telephone, 25 FCC 2d at 390, ¶ 15.
38 Valenti v. AT&T, 12 FCC Rcd at 2621-22, ¶ 24, quoting
Armstrong Utilities v. General Telephone, 25 FCC 2d at 390, ¶ 15
(emphasis added). Although the Commission has implied that that
there might be some additional basis for equitable tolling, see,
e.g., Bunker Ramo v. Western Union, 31 FCC 2d at 453-4, ¶ 12, the
Commission has never identified or relied upon any basis other
than fraudulent concealment. In the EUCL Order, the Commission
simply assumed, without deciding, that ``due diligence'' by the
plaintiff might warrant tolling, and then demonstrated the
absence of such diligence. See EUCL Order, 17 FCC Rcd at 24225-
26, ¶¶ 57-59.
39 See, e.g., Cablevision v. New York Tel, 46 FCC 2d at 706-7, ¶
5 (``we cannot hold that the statute of limitations was tolled in
view of complainant's failure to allege any facts whatsoever
indicating that fraud or deceit was practiced by NYTelco upon
complainant to prevent complainant from becoming aware of the
basic facts upon which its claim for reimbursement is based'');
Anchorage v. Alascom, 4 FCC Rcd at 2476, ¶ 30 (denying request
for equitable estoppel of section 415, because the complainant
``has convincingly shown neither that Alascom fraudulently
concealed facts that were relevant and material to the alleged
violations of the Act nor that Alascom misrepresented, either
intentionally or unintentionally, any such facts. . . .'').
40 Specifically, in one of its filings in the Notice-and-Comment
Proceeding, Verizon stated: ``[I]f [OCI] truly believes the
[PICC] charge is unlawful, it may file a complaint.'' Joint
Statement Exhibit JS-21 (Bell Atlantic Opposition to Oncor Motion
for Interim Relief, dated June 25, 1999) at 1.
41 OCI Brief at 14-15, n.6.
42 For example, 47 C.F.R. §§ 1.720(b)-(d) and 1.721(a)(5)-(6)
required OCI to set forth in its Formal Complaint all the facts
and legal analyses upon which the claims are based.
43 See Formal Complaint Exhibit 10, Attachment C, at 1.
44 See Formal Complaint Exhibit 10, Attachment D, at 2.
45 See Joint Statement Exhibit JS-21 at 1.
46 See generally Cablevision v. New York Tel, 46 FCC 2d at 706-7,
¶ 5; Anchorage v. Alascom, 4 FCC Rcd at 2476, ¶ 30.
47 See Part III(C), infra.
48 See Joint Statement Exhibit JS-21 at 1. Indeed, US West made
the same point to OCI in one of Qwest's filings in the Notice-
and-Comment Proceeding, stating that ``Sections 206-209 of the
Communications Act provide a mechanism whereby Oncor can
challenge any action which it believes contravenes the provisions
of the Act.'' Opposition of US West Communications, Inc. at 8,
CCB/CPD No. 98-34 (filed Dec. 14, 1999).
49 See Formal Complaint Exhibits 1, 3, 4, 7.
50 See, e.g., Formal Complaint at 32-33, ¶ 73.
51 See Payphone PICC Order.
52 See Informal Complaint.
53 Anchorage v. Alascom, 4 FCC Rcd at 2476-7, ¶ 32. See, e.g.,
Valenti v. AT&T, 12 FCC Rcd at 2621-22, ¶ 24; Communications
Vending v. FCC, 365 F.3d at 1075.
54 Communications Vending v. FCC, 365 F.3d at 1076 (internal
quotation marks and citations omitted).
55 See, e.g., Formal Complaint at 16, ¶ 38; 23-28, ¶¶ 54-64. See
also Reply of Operator Communications, Inc., File No. EB-05-MD-
009 (filed June 30, 2005) (``OCI Reply'') Legal Analysis at 23-
56 Formal Complaint at 16, ¶ 38.
57 OCI's repeated reference to 47 U.S.C. § 207 is mystifying.
See e.g., Formal Complaint at 15, n.52; 26-7, ¶¶ 60, 62; OCI
Reply at 25-26. Section 207 requires parties seeking recovery of
damages to file a complaint either with the Commission or in
federal court, but not both. This provision, however, has
nothing to do with filing a complaint with the Commission while a
notice-and-comment proceeding is pending at the Commission.
Moreover, OCI's unsupported suggestion that the complaint
procedures somehow did not exist during the April 1998-April 2001
timeframe (see, e.g., Formal Complaint at 16, ¶ 38) is similarly
inexplicable. Rules governing the filing of both informal and
formal complaints were in place at the time and virtually
identical to those existing today. See Amendment of Rules
Governing Procedures to Be Followed When Formal Complaints Are
Filed Against Common Carriers, Report and Order, 12 FCC Rcd 22497
(1997) (subsequent history omitted). See also Amendment of Rules
Governing Procedures to be Followed When Formal Complaints are
Filed Against Common Carriers, Report and Order, 8 FCC Rcd 2614
(1993); Amendment of Rules Governing Procedures to be Followed
Where Formal Complaints are Filed Against Common Carriers, Report
and Order, 3 FCC Rcd 1806 (1988).
58 Joint Statement Exhibit JS-21 at 1.
59 Opposition of US West Communications, Inc. at 8, CCB/CPD No.
98-34 (filed Dec. 14, 1999); see n.42, supra.
60 47 C.F.R. § 1.721(a)(9).
61 OCI warns that, if parties can file complaints while related
proceedings are pending elsewhere at the Commission, a flood of
complaints will be filed whenever an unresolved issue of broad
industry concern arises. See Formal Complaint at 28, ¶ 64. As
stated above, however, our holding here is nothing new; aggrieved
parties have always had the option to file complaints under those
circumstances, and the Commission has managed its workload
accordingly. Moreover, the Commission's informal complaint
process provides parties a specific but streamlined option for
preserving damages claims while related issues of broad industry
concern are addressed in other proceedings. 47 C.F.R. §§ 1.716-
1.718. See e.g., AT&T Corp. v. Virgin Islands Telephone Corp.
d/b/a Innovative Telephone, Order, File No. EB-01-MDIC-0552 (rel.
Nov. 21, 2004) (extending time for defendant to respond to the
informal complaint until 90 days after the D.C. Circuit ruled on
a different case involving substantially similar issues).
Indeed, under OCI's theory, any notice and comment proceeding
would serve to toll the statute of limitation for any
participating party for any claim for damages relating to the
subject of the administrative proceeding. Such an outcome would
eviscerate section 415.
62 See Communications Vending v. FCC, 365 F.3d at 1076 (``that
petition sought only a declaratory ruling that the LECs'
imposition of EUCL charges was unlawful, so it could neither have
tolled the statute nor otherwise excused the [independent
payphone providers'] failure to pursue complaints for damages'').
63 See, e.g., Formal Complaint at 25-27, ¶¶ 59, 61, 63; OCI
Reply, Legal Analysis at 25-26.
64 In any event, as OCI acknowledges, the administrative
exhaustion doctrine applies only when the second action seeks the
same remedy as the first action. That prerequisite is not met
here. The first action - the Notice-and-Comment Proceeding -
involved declaratory and injunctive relief; the second action -
this complaint proceeding - involves retrospective monetary
damages (i.e., refunds and lost profits). Therefore, even on its
own terms, the administrative exhaustion doctrine does not
warrant tolling of the limitations period applicable to OCI's
complaint for damages against Verizon.
65 See Formal Complaint at 5, ¶ 11; 22-23, ¶¶ 52 and n.73, 54.
See also OCI Reply at 3, ¶ 10; 7-8, ¶¶ 35-36; 15-16; OCI Reply,
Legal Analysis at 22-25; OCI Brief at 12-14. OCI's Formal
Complaint focuses almost exclusively on the two other alleged
bases for tolling already addressed above: so-called
``administrative'' tolling (Formal Complaint at 23-28, ¶¶ 54-64)
and equitable tolling (Formal Complaint at 28-34, ¶¶ 65-75).
Nevertheless, for the sake of completeness, we reach and reject
66 47 C.F.R. §§ 1.716-1.718.
67 See, e.g., MCI Telecommunications Corp., v. Pacific Telephone
Co., Memorandum Opinion and Order, 12 FCC Rcd 13243, 13253-54, ¶¶
17-18 (Com. Car. Bur. 1997) (``MCI v. Pac Tel''); 47 C.F.R. §§
68 See, e.g., MCI v. Pac Tel, 12 FCC Rcd at 13,253, ¶ 17. See
April 1998 Letter; Formal Complaint Exhibit 3 (Comments of Oncor
69 See Interim Request; Supplement Request. One submission
contains a single footnote citation to 47 C.F.R. § 1.727. See
Supplement Request at 2.
70 See Joint Statement Exhibit JS-21.
71 We recognize that, when a letter is submitted to the
Commission by pro se ``consumers who have little, if any,
familiarity with Commission's rules or practices,'' the
Commission may construe the rules more liberally. MCI v. Pac
Tel, 12 FCC Rcd at 13253, n.67. However, such an approach has no
application where, as here, the submissions are by in-house and
outside counsel for a communications company, all with extensive
experience with Commission processes.
72 See MCI v. PacTel, 12 FCC Rcd at 13252-54, ¶¶ 16-18;
Communications Vending v. FCC, 350 F.3d at 1076. What was said
in MCI v. PacTel is equally apt here: ``MCI could have, at any
time after the February 1990 and September 1990 [letters to the
Bureau Chief], filed claims for damages with the Commission based
on the allegations in those letters if those were its intentions.
At the very least, MCI could have acted to put the Bureau, and
the defendant LECs, on notice that it viewed the February 1990
and September 1990 Evans letters as informal complaints that
might entitle MCI to monetary damages to the extent the alleged
violations were ultimately proven. Under these circumstances, it
would be contrary to the policies underlying the statute of
limitations to permit MCI, years after the fact, to transform the
September 1990 [letter to the Bureau Chief] into an informal
complaint for purposes of pursuing monetary damages claims
against the defendant LECs that could have been filed with the
Commission within two years from the time MCI was assessed the
charges that form the basis of such claims. . . . Were MCI's
characterization of the September 1990 [letter to the Bureau
Chief] correct, the Commission would have to treat virtually
every letter or written correspondence to any Commission office
that raised a question regarding a practice of a common carrier
as a claim for damages in applying Section 415 of the Act. Such
a result would be inconsistent with Section 415.'' 12 FCC Rcd at
13254, ¶ 18 and n.70.
73 See 47 C.F.R. § 1.718.
74 47 C.F.R. § 1.718.
75 See generally MCI v. PacTel, 12 FCC Rcd at 13255, n.74 (noting
the possibility that a formal complaint seeking monetary damages
may not relate back to an informal complaint not seeking monetary