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


In the matter of                 )
                                )
ASC Telecom, Inc. d/b/a          )
Alternatel                       )    File No. EB-02-TC-136
                                )    NAL/Acct. No. 200232170006
                                )    FRN: 0004372835
                                )
                                )
                                )

           NOTICE OF APPARENT LIABILITY FOR FORFEITURE

   Adopted:  September 17, 2002         Released:  September 23, 
2002

By the Commission: 

                        I.   INTRODUCTION

     1.   In this Notice of Apparent Liability for Forfeiture, we 
propose to  assess  a  forfeiture in  the  amount  of  $1,440,000 
against ASC  Telecom,  Inc.,  d/b/a  Alternatel  (``ASC''),1  for 
apparent widespread violations of the Communications Act of 1934, 
as amended (the  ``Act''), and the  Commission's rules  governing 
operator service providers (``OSPs''). 2  These violations appear 
to be particularly egregious because they appear to have occurred 
as part of a deliberate plan to mislead consumers.  

                         II.  BACKGROUND

     2.   ASC provides  operator services  that can  be  accessed 
through aggregator telephones across the United States. 3   These 
include hotel and motel room phones, as well as payphones located 
in airports, train  stations, shopping malls,  gas stations,  and 
other locations where they serve  the public or transient  users.  
As an  operator service  provider, ASC  is required  to  identify 
itself audibly  and distinctly  at the  beginning of  each  call, 
before the consumer incurs any charge; to permit the consumer  to 
terminate the  call  at no  charge  before it  is  connected;  to 
provide its  rates  to consumers  upon  request; and  to  provide 
instructions to the consumer on how  to obtain the total cost  of 
the call, which must be available either by dialing no more  than 
two digits or by remaining on the line. 4 

     3.   Over  the  last  several  months,  the  Commission  has 
received complaints from consumers who were connected to ASC  and 
billed for  charges  substantially  higher  than  expected.   For 
instance, one consumer  complained of attempting  to dial  1-800-
COLLECT to place a  long distance call  using MCI's service,  and 
later receiving a bill from ASC for $5.06 per minute. 5   Another 
consumer complained of attempting to  place a call through  AT&T, 
and being charged  $10.80 by  ASC for leaving  a 30-second  voice 
mail message.  6   This  pattern  of  complaints  suggested  that 
consumers' dialing  errors (for  instance, dialing  1-800-COLLETT 
instead of  1-800-COLLECT) were  connecting them  to ASC,  rather 
than the  desired carrier,  and that  ASC's failure  to  identify 
itself as  required caused  these errors  to go  unnoticed.   The 
Enforcement  Bureau   initiated  an   investigation  into   ASC's 
practices to determine  whether ASC  was in  compliance with  the 
requirements for  OSPs.   As  set forth  in  detail  below,  that 
investigation  showed  apparent   widespread  violation  of   the 
Commission's rules,  which appears  to be  part of  a  deliberate 
scheme to take advantage of consumers' dialing errors. 

                      III.      DISCUSSION

     III.A.    Legal Requirements 

     4.   Pursuant to Section 226(b)(1)(A) of the Act and Section 
64.703(a)(1) of the Commission's rules, each provider of operator 
services must  identify itself,  audibly and  distinctly, to  the 
consumer at the beginning of  each telephone call and before  the 
consumer incurs any charge for the call.7  This practice is known 
as ``branding.''  The purpose of  branding is to ensure that  the 
consumer knows who is carrying the call, in time to request  rate 
information,  and  to  decide  whether  to  use  that   carrier's 
services.  The  branding requirement  is intended  to reduce  the 
opportunity  for  carriers   to  impose   excessive  charges   on 
uninformed consumers.  In collect calling arrangements handled by 
a  provider  of  operator  services,   both  the  party  on   the 
originating end of the call and the party on the terminating  end 
of the call are considered ``consumers.''8  Therefore, to  ensure 
that both  parties  are  fully  informed  when  making  decisions 
regarding whether to initiate or accept a collect call, an OSP is 
required to brand on both ends of such calls.  

     5.   Each provider of operator  services must also  disclose 
immediately to the  consumer, upon  request and at  no charge,  a 
quotation of its  rates or  charges for the  call.9  For  collect 
calls, OSPs must provide this rate information to both the called 
party and the  calling party.10   In addition,  each provider  of 
operator services  must disclose  audibly and  distinctly to  the 
consumer,  at  no   charge  and  before   connecting  any   call, 
instructions on how to obtain the  total cost of the call or  the 
maximum possible total cost of the call, before providing further 
oral advice to the consumer on how to proceed to make the call.11  
This oral disclosure must instruct consumers that they may obtain 
applicable rate quotations either, at the option of the  provider 
of operator services, by  dialing no more than  two digits or  by 
remaining on the line.12  Each provider of operator services must 
also allow the consumer to terminate the call at no charge before 
the call is connected.13

     III.B.    The Investigation

     6.   As part of our investigation, Commission staff went  to 
several aggregator locations and placed multiple calls, including 
collect calls, via ASC from approximately 25 different payphones.  
Commission staff was also on the  receiving end of some of  these 
collect calls to determine whether  ASC identified itself to  the 
called party as well.  The staff placed the calls from  payphones 
in locations that are heavily used by consumers and travellers in 
the Washington, D.C. area, such as Reagan National Airport, Union 
Station, and  L'Enfant  Plaza  Shopping  Mall,  as  well  as  the 
Commission's own lobby.   To determine whether  ASC was  handling 
calls that were likely the result of misdialed access codes,  the 
staff placed calls using 10 different toll free numbers that  are 
similar to well  known operator service  access numbers, such  as 
MCI's 1-800-COLLECT,  and  AT&T's 1-800-CALLATT.14   The  numbers 
were called multiple times, at different locations and times,  to 
determine whether  there  was a  pattern  of misconduct,  and  to 
preclude the  possibility  that any  lack  of compliance  was  an 
anomaly.

     7.   Our investigation revealed that ASC failed to brand  at 
the origination point  of the  telephone call  on all  10 of  the 
telephone numbers dialed, and failed to brand at the  termination 
point on two  of the 10  telephone numbers.15  Our  investigation 
also revealed that  ASC failed  to provide rates  or charges,  or 
failed to provide instructions on how to obtain rates or charges, 
on four of  10 telephone  numbers.16  In addition,  on two  calls 
that were placed from Union Station, the called party was charged 
$12.78 for each of  two collect calls that  were rejected by  the 
called party.17   Based  on these  facts,  we find  that  ASC  is 
apparently liable  for 12  separate  violations of  the  branding 
requirement of  Section  226(b)(1)(A)  of  the  Act  and  Section 
64.703(a)(1)  of  the  Commission's  rules;  for  four   separate 
violations  of  the  rate  disclosure  requirements  of   Section 
226(b)(1)(C)(i) of  the  Act  and  Sections  64.703(a)(3)(i)  and 
64.703(a)(4) of  the Commission's  rules;  and for  two  separate 
violations  of  Section  226(b)(1)(B)  of  the  Act  and  Section 
64.703(a)(2) of the  rules for  charging for  collect calls  that 
were rejected.18  We  note that  although we  have only  proposed 
forfeitures for the  first of each  type of violation  associated 
with each access number for a  total of 18 violations, the  calls 
made during our investigation  revealed numerous (43)  additional 
violations that are not the subject of this NAL.

                 IV.          FORFEITURE AMOUNT

     8.   Pursuant  to   the   Commission's   Forfeiture   Policy 
Statement,  the  base  amount  for  violations  of  the  operator 
services  requirements  is   $7,000.19   The  maximum   potential 
forfeiture is  $120,000  for  each  violation.20   Based  on  the 
criteria in  Section  503(b)(2)(D)  of the  Act  and  the  upward 
adjustment  criteria  in  the  Forfeiture  Policy  Statement,  21 
however, we find that a substantial upward adjustment of the base 
forfeiture amount of $7,000 appears  to be warranted because  the 
violations here appear to be egregious and repeated, because  ASC 
appears to  have  realized  substantial economic  gain  from  its 
misconduct, and because substantial consumer harm appears to have 
resulted from ASC's pattern of misconduct.  

     9.   We  believe  that  ASC's  practices  are   particularly 
egregious for several  reasons.  First, it  appears that ASC  has 
willfully and deliberately devised a scheme repeated on  numerous 
access numbers intended to mislead unwitting consumers into using 
their operator services while the consumer is attempting to  dial 
another OSP.  For example,  if a consumer  trying to dial  1-800-
CALLATT misdials  by one  number, that  customer will  reach  ASC 
instead of AT&T.  The consumer remains unaware that he or she has 
misdialed because ASC fails to identify itself.  We believe  that 
in using such deceptive means to obtain the consumer's  business, 
ASC's practices are analogous to slamming and should be penalized 
accordingly.22  The consumer is even further left in the dark  by 
not being able to obtain  rate information that is essential  for 
consumers who  wish to  make informed  choices in  a  competitive 
telecommunications market.   This  is particularly  egregious  in 
light of the fact  that the rates  ASC charges are  significantly 
higher than the industry average,  and we have seen two  examples 
where the called party was charged $12.78 for a collect call that 
was rejected.23   We  believe,  therefore, that  ASC  realizes  a 
substantial  economic  gain   from  these  insidious   practices.  
Moreover, it appears that these misdialed numbers, such as 1-800-
CALLALT or  1-800-CATTATT,  are  not advertised  as  a  means  of 
reaching ASC.  Therefore,  it appears that  ASC's only  customers 
are those who make a mistake in attempting to dial another  OSP's 
access code.

     10.  Furthermore, while both parties  to a collect call  are 
involved in  making choices  regarding whether  to use  an  OSP's 
services, we believe that it  is particularly troubling that  the 
called party, the  party that ultimately  incurs the charges  for 
the call, is not  able to obtain the  rates before accepting  the 
call.  Many consumers, reluctant to refuse a call from a relative 
or loved one for  fear of an emergency,  are therefore forced  to 
enter unwittingly into an  agreement to pay significantly  higher 
rates than they would otherwise  pay by accepting such a  collect 
call, and ASC reaps the benefits of such higher rates.

     11.  Accordingly,  after  applying  the  Forfeiture   Policy 
Statement and  statutory  factors  to the  facts  before  us,  we 
conclude that an $80,000  forfeiture is apparently warranted  for 
each of the 18 violations of Sections 226(b)(1)(A), 226(b)(1)(B), 
and  226(b)(1)(C)(i)  of  the  Act  and  Sections   64.703(a)(1), 
64.703(a)(2),   64.703(a)(3)(i),   and   64.703(a)(4)   of    the 
Commission's rules,  resulting  in a  total  proposed  forfeiture 
amount of  $1,440,000.  

                 V.             ORDERING CLAUSES

     12.  Accordingly, IT IS  ORDERED THAT,  pursuant to  Section 
503(b) of the Act,  47 U.S.C. § 503(b),  and Section 1.80 of  the 
Commission's Rules, 47 C.F.R. § 1.80, ASC Telecom, Inc. is hereby 
NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the amount 
of $1,440,000  for willful  or  repeated violations  of  Sections 
226(b)(1)(A), (b)(1)(B), and (b)(1)(C)(i)  of the Act, 47  U.S.C. 
§§   226(b)(1)(A),   (b)(1)(B),   (b)(1)(C)(i),   and    Sections 
64.703(a)(1), 64.703(a)(2), 64.703(a)(3)(i), and 64.703(a)(4)  of 
the Commission's rules, 47 C.F.R. §§ 64.703(a)(1),  64.703(a)(2), 
64.703(a)(3)(i),  64.703(a)(4).    The   amount   specified   was 
determined after  consideration  of  the  factors  set  forth  in 
Section 503(b)(2)(D) of  the Act, 47  U.S.C. § 503(b)(2)(D),  and 
the guidelines enumerated in the Forfeiture Policy Statement.

     13.  IT IS FURTHER ORDERED, pursuant to Sections  1.80(f)(3) 
and 1.80(h) of  the Commission's Rules,  that ASC Telecom,  Inc., 
within thirty  days of  the date  of release  of this  Notice  of 
Apparent Liability, SHALL  PAY the  full amount  of the  proposed 
forfeiture24 OR SHALL  FILE a  written response  showing why  the 
proposed forfeiture should be reduced or not imposed.25  

     14.  IT IS FURTHER  ORDERED that  a copy of  this Notice  of 
Apparent Liability  for Forfeiture  SHALL  BE SENT  by  certified 
mail, return receipt requested,  to ASC Telecom,  Inc at 6860  W. 
115th Street, Overland Park, KS  66211. 


                              FEDERAL COMMUNICATIONS COMMISSION



                              Marlene H. Dortch
                              Secretary 
      




                            APPENDIX

                    ASC OSP VIOLATIONS - 2002


                        1 (800) COOLLECT
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X)*, 5/31, 6/4, 6/6, 6/12

                       1 (800) CALL - ALT
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X), 6/4, 6/13

                         1 (800) CULLECT
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X), 6/4, 6/6, 6/12
Violation of 47 CFR§ 64.703(a)(1) (Failure to Brand at 
Termination Point): 6/4

                         1 (800) COLLEC7
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X), 5/31, 6/4, 6/6, 6/12
Violation of 47 CFR §§ 64.703(a)(3)(i) and/or(a)(4)(Failure to 
Provide Rate Information at Termination Point): 6/6
Violation of 47 CFR § 64.703(a)(2)(Connection Fee Charged at 
Termination Point Without Authorization): 6/4

                       1 (800) CATT - ATT
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X), 6/4, 6/6, 6/13

                        1 (800) OOERATOR
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X), 6/4, 6/6, 6/12

                         1 (800) PERATOR
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X), 6/4, 6/6

                         1 (800) COL9ECT
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X), 5/31, 6/4, 6/6, 6/12
Violation of 47 CFR§ 64.703(a)(1) (Failure to Brand at 
Termination Point): 6/4
Violation of 47 CFR §§ 64.703(a)(3)(i) and/or(a)(4)(Failure to 
Provide Rate Information at Termination Point): 6/4

                         1 (800) COLLETT
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X), 5/31, 6/4, 6/6, 6/12
Violation of 47 CFR §§ 64.703(a)(3)(i) and/or(a)(4)(Failure to 
Provide Rate Information at Termination Point): 6/4
Violation of 47 CFR § 64.703(a)(2)(Connection Fee Charged at 
Termination Point Without Authorization): 6/4

                         1 (800) COOLECT
Violation of 47 CFR § 64.703(a)(1) (Failure to Brand at 
Origination Point): 5/30 (2X), 5/31, 6/4, 6/6, 6/12
Violation of 47 CFR §§ 64.703(a)(3)(i) and/or(a)(4)(Failure to 
Provide Rate Information at Termination Point): 6/4

*Denotes two violations on that particular date. 

_________________________

1 ASC is a subsidiary of Sprint Corporation.  See ASC's 2002  FCC 
Form 499-A Telecommunications  Reporting Worksheet.  Our  records 
indicate that ASC  is located  at 2330  Shawnee Mission  Parkway, 
Westwood, KS, 66205 and at  6860 W. 115th Street, Overland  Park, 
KS  66211.   
2 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),  (a)(4).  Our action in  this 
Notice of Apparent Liability (``NAL'') does not preclude  further 
enforcement action.  The staff is continuing to investigate ASC's 
practices to determine whether they violate the Act and our rules 
in other respects. 
3  ``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:  (1)  automatic 
completion with  billing to  the telephone  from which  the  call 
originated; or (2) 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),  (l).  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).
4  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).
5 Complaint  No. IC-02-W2370064,  dated  January 30,  2002,  from 
Claudia Valderrama-Celaya.
6 Complaint  No. IC-02-W2570712,  dated February  27, 2002,  from 
Elizabeth and Jeffrey Moberg.
7 47 U.S.C. § 226(b)(1)(A);  47 C.F.R. § 64.703(a)(1).
8 47 C.F.R. § 64.708(f).
9 47 U.S.C. § 226(b)(1)(C)(i);  47 C.F.R. § 64.703(a)(3)(i). 
10 See  47 C.F.R.  §§  64.703(a)(3)(i), 64.708(f);  Amendment  of 
Policies and Rules Concerning Operator Service Providers and Call 
Aggregators, Report and Order and Further Notice of Proposed Rule 
Making, 11 FCC Rcd 4532, 4541 (1996).
11 47 C.F.R. § 64.703(a)(4).  
12 Id.
13 47 U.S.C. § 226(b)(1)(B); 47 C.F.R. § 64.703(a)(2).
14 See Appendix A.
15 Id.     
16 Id.
17 See  Telephone  Bill  from billing  agent  for  ASC,  Operator 
Assistance Network for $25.56, Appendix B.
18 We note that even for non-operator service calls to which this 
rule does not apply, it would be a violation of Section 201(b) of 
the Act to charge a called party for a rejected collect call.
19 Forfeiture Policy Statement and  Amendment of Section 1.80  of 
the Rules to Incorporate Forfeiture Guidelines, Report and Order, 
12 FCC Rcd 17087, 17097 (1997) (Forfeiture Policy Statement).
20 Section 503(b)(2)(B) provides  for forfeitures up to  $100,000 
for each violation or a maximum of $1,000,000 for each continuing 
violation by  common  carriers or  an  applicant for  any  common 
carrier license, permit, certificate  or similar instrument.   47 
U.S.C. § 503(b)(2)(B).   The Debt Collection  Improvement Act  of 
1996 (DCIA)  requires,  however, that  civil  monetary  penalties 
assessed by  the federal  government  be adjusted  for  inflation 
based on the formula outlined in  the DCIA.  See Pub L. No.  104-
134, §  31001,  110 Stat.  1321  (1996).  The  current  statutory 
maxima  pursuant  to  Section   503(b)(2)(B)  are  $120,000   and 
$1,200,000 for individual  violations and continuing  violations, 
respectively.   See  47  U.S.C.  §  503(b)(2)(B);   47  C.F.R.  § 
1.80(b)(2), (5);  see  also Amendment of  Section 1.80(b) of  the 
Commission's Rules and Adjustment of Forfeiture Maxima to Reflect 
Inflation, Order, 15 FCC Rcd 18221 (2000).  
21 47 U.S.C.  § 503(b)(2)(D);  47 C.F.R. §  1.80(b)(4); see  also 
Forfeiture Policy Statement, 12 FCC Rcd at 17100-01. 
22  Slamming  is  the  unauthorized  change  of  a   subscriber's 
preferred carrier.  Section  258 of  the Act, as  amended by  the 
Telecommunications   Act    of   1996,    states   that    ``[n]o 
telecommunications carrier shall submit or execute a change in  a 
subscriber's  selection  of  a  provider  of  telephone  exchange 
service or telephone toll service except in accordance with  such 
verification procedures as the  Commission shall prescribe.''  47 
U.S.C. § 258.  The Commission has  used a base amount of  $80,000 
for slamming  involving forged  letters  of agency,  a  deceptive 
practice analogous to  that at  issue in this  case.  See,  e.g., 
Amer-I-Net Services Corporation, Order of Forfeiture, 15 FCC  Rcd 
3118  (2000);   see  also  Brittan  Communications  International 
Corp., Order of Forfeiture, 15 FCC Rcd 4852 (2000).
23 See  Telephone  Bill  from billing  agent  for  ASC,  Operator 
Assistance Network, for $25.56, Appendix B.
24 The forfeiture amount should be  paid by check or money  order 
drawn to the order of the Federal Communications Commission.  ASC 
should include the  reference ``NAL/Acct.  No. 200232170006''  on 
its check  or money  order.  Such  remittance must  be mailed  to 
Forfeiture   Collection   Section,   Finance   Branch,    Federal 
Communications Commission,  P.O.  Box  73482,  Chicago,  Illinois 
60673-7482.  Requests for full payment under an installment  plan 
should be sent to: Chief, Credit and Debt Management Center,  445 
12th Street,  S.W., Washington,  D.C.  20554.   See 47  C.F.R.  § 
1.1914.
25 47 C.F.R. §§ 1.80(f)(3), (h).  Send or mail any written 
responses regarding the reasons why the forfeiture should be 
reduced or not imposed to Federal Communications Commission, 
Enforcement Bureau, Telecommunications Consumers Division, 445 
12th Street, S.W., Washington, D.C., 20554, ATTN: NAL/Acct. No. 
200232170006.  Any written response should focus on the 
mitigating factors outlined in the Forfeiture Policy Statement 
and Section 503(b)(2)(D) of the Act.