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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of )
)
ILLINOIS BELL TELEPHONE COMPANY,)
INC., d/b/a AMERITECH ILLINOIS, )
INDIANA BELL TELEPHONE COMPANY, )
INC., d/b/a AMERITECH INDIANA, )
MICHIGAN BELL TELPHONE )
COMPANY, INC., d/b/a AMERITECH )
MICHIGAN, THE OHIO BELL TELEPHONE )
COMPANY, d/b/a AMERITECH OHIO, )
WISCONSIN BELL, INC., d/b/a ) File No. EB-00-MD-008
AMERITECH WISCONSIN, PACIFIC )
BELL TELEPHONE COMPANY and )
SOUTHWESTERN BELL TELEPHONE )
COMPANY, )
)
Complainants, )
)
v. )
)
ONE CALL COMMUNICATIONS, INC., )
)
Defendant. )
MEMORANDUM OPINION AND ORDER
Adopted: September 14, 2001 Released: September
17, 2001
By the Chief, Enforcement Bureau:
I. INTRODUCTION
·
1. In this Memorandum Opinion and Order (``Order''), we grant a
formal complaint filed by Illinois Bell Telephone Company,
Inc., d/b/a Ameritech Illinois; Indiana Bell Telephone
Company, Inc., d/b/a Ameritech Indiana; Michigan Bell
Telephone Company, Inc., d/b/a Ameritech Michigan; The Ohio
Bell Telephone Company, d/b/a Ameritech Ohio; Wisconsin Bell,
Inc., d/b/a Ameritech Wisconsin; Pacific Bell Telephone
Company; and Southwestern Bell Telephone Company
(collectively, ``Complainants'') against One Call
Communications, Inc. (``One Call'') pursuant to section 208 of
the Communications Act of 1934, as amended (``Act'').1
Complainants assert that One Call violated section
276(b)(1)(A) of the Act2 and section 64.1300 of the
Commission's rules3 by failing to compensate Complainants for
``1+'' calls that originated at Complainants' payphones and
were routed to One Call's network. We agree and order One
Call to compensate Complainants in the amount of $42,440.91,
plus interest, for completed 1+ calls that One Call carried
between October 7, 1997 and December 31, 1999.4
II. BACKGROUND
2. Complainants are local exchange carriers (``LECs'') that
provide local exchange and payphone service.5 One Call is a
telecommunications carrier that provides interstate and
intrastate telephone toll service.6 Between October 7, 1997
and December 31, 1999, One Call carried traffic that
originated from payphones owned by Complainants, including so-
called ``1+'' calls.7 In the context of this dispute, a 1+
call is an interLATA toll call originating at a payphone and
carried by an interexchange carrier (``IXC''), where the IXC's
operator or its automated rating system directs the calling
party to deposit coins for the call.8
3. Section 276(b)(1)(A) of the Act required the Commission to
prescribe regulations establishing a per-call payphone
compensation plan.9 The purpose of the compensation plan was
``to ensure that all payphone service providers are fairly
compensated for each and every completed intrastate and
interstate call using their payphone . . . .''10 The only
exceptions to the per-call compensation requirement identified
in the Act are calls to emergency numbers and calls by hearing
disabled persons to a telecommunications relay service.11 In
a series of orders, the Commission adopted regulations
establishing a per-call compensation plan for payphone
services.12
4. In January 1997, Complainants and One Call entered into an
agreement governing the accounting of coins deposited by
payphone users for 1+ calls carried over One Call's network.13
Pursuant to the Coin Revenue Agreement, Complainants collected
the coin revenue for such calls and remitted it to One Call,
less certain adjustments for theft shortage and processing
fees.14 In turn, One Call paid Complainants a ``message
processing charge'' for each call, which covered the cost to
Complainants of constructing a monthly ``coin settlement
report'' for submission to One Call.15 The Coin Revenue
Agreement does not compensate Complainants for the use of
their payphones.16
5. In order for a LEC payphone service provider (``PSP'') to be
eligible to receive per-call compensation, it must satisfy
various prerequisites, including certifying that it has filed
an effective cost allocation manual, and that it has in place
certain effective interstate and intrastate tariffs.17 In
addition, Bell Operating Companies (such as Complainants) must
``have approved CEI [comparably efficient interconnection]
plans for basic payphone services and unbundled
functionalities prior to receiving compensation.''18 On April
15, 1997, the Commission approved Complainants' CEI plan for
the provision of payphone services.19 Having previously
satisfied the other requirements, Complainants became eligible
to receive per-call compensation on October 7, 1997, the
effective date of the payphone regulations.20 One Call,
however, has refused to pay compensation relating to 1+
calls.21
6. On May 17, 2000, Complainants filed their Complaint,
alleging that One Call violated section 276 of the Act and
the Commission's rules by refusing ``to compensate
Complainants for each compensable completed [1+] call carried
by Defendant from Complainants' payphones on and after October
7, 1997.''22 The Complaint requests an order requiring One
Call to pay Complainants $.24, or other amount established by
law or contract, for each and every compensable completed 1+
call routed to One Call from any of Complainants' payphones,
as well as damages, including interest, for per-call
compensation due and owing at the time of judgment.23
III. DISCUSSION
7. We find that One Call violated section 276(b)(1)(A) of the
Act and section 64.1300 of the Commission's rules by failing
to compensate Complainants for 1+ calls that were made from
Complainants' payphones and routed to One Call's network. In
reaching this conclusion, we begin with an examination of the
relevant statutory and regulatory language. Section
276(b)(1)(A) mandates that all PSPs are to be fairly
compensated for ``each and every completed intrastate and
interstate call using their payphone.''24 The Commission's
rules similarly provide that every carrier to whom a
``completed call from a payphone is routed'' must either pay a
compensation rate agreed upon by contract or, in the absence
of an agreement, $.24.25 Thus, with the exception of three
types of calls identified in the Commission's rules26 - none
of which is at issue here - the only express limitation on the
types of payphone calls eligible for compensation is that they
be ``completed.''
8. Focusing on various passages of the Payphone Orders, One
Call argues that 1+ calls nonetheless are exempt from the
Commission's per-call compensation requirements. In
particular, One Call argues that the absence of any language
in the Payphone Orders specifically identifying 1+ calls as
calls for which PSPs are not otherwise compensated indicates
that the Commission did not intend for such calls to be
covered by the compensation system set forth in the rules.27
One Call also asserts that the Commission's description in the
Payphone Orders of the ``typical'' manner in which PSPs are
compensated for 1+ calls indicates that the Commission did not
intend for PSPs to receive compensation for such calls through
alternative mechanisms.28
9. We disagree with One Call's arguments. As the Commission
has explained, payphone revenue can derive from a variety of
sources, including coins ``deposited into the payphone,
through commission payments on operator service calls, or from
compensation mandated by the FCC or the states.''29 The
Payphone Orders limit statutorily-mandated, per-call
compensation to completed calls that do not produce revenue
from other sources,30 such as access code calls and toll-free
number calls.31 The Commission's citation of these two
examples, however, does not mean that PSPs are not entitled to
per-call compensation for other types of non-revenue-
generating calls. With respect to 1+ calls, the Commission
stated that PSPs ``typically'' receive coin revenue directly
from callers.32 But that is not the case here, because the
Complainants do not receive coin revenue for the 1+ calls
carried on One Call's network. In short, nothing in the
Payphone Orders purports to supercede the statutory
requirement that PSPs - including the Complainants - are to be
fairly compensated for all completed calls for which they
otherwise do not receive revenue.33
10. It is undisputed that the Coin Revenue Agreement does not
contain a provision compensating Complainants for 1+ calls
made from their payphones, and that there are no other
agreements between Complainants and One Call regarding a per-
call compensation rate.34 One Call nevertheless asserts that
Complainants are not entitled to compensation for 1+ calls,
because they had the ``opportunity to receive such
compensation'' through the Coin Revenue Agreement, but chose
not to do so.35
11. The record does not support One Call's assertion. As an
initial matter, when the parties executed the Coin Revenue
Agreement in January 1997, Complainants had not yet satisfied
the nonstructural and accounting safeguards that are
prerequisites to BOC payphone operations.36 Consequently,
they lacked the ability to participate in the selection of
presubscribed carriers at payphones and to obtain compensation
from such carriers by contract.37 Moreover, contrary to One
Call's assertion,38 the Complainants did not designate the
presubscribed 1+ carrier in the Coin Revenue Agreement.
Section 2 of the Coin Revenue Agreement merely defines
``Direct 1+ Carrier'' as the ``Presubscribed 0+ Carrier'' for
Complainants' payphones who has ``elect[ed] . . . to carry
interLATA calls initiated by dialing `1' plus the called
number . . . .''39 Thus, it was the 0+ carrier presubscribed
to Complainants' payphones ¾ in this case, One Call ¾ decided
whether it also would carry 1+ calls. In other words,
designation of the presubscribed 0+ or 1+ carrier for a
particular payphone (and compensation arrangements for calls
routed over that carrier's network) was not accomplished in
the Coin Revenue Agreement, but in other document(s) to which
Complainants were not parties.
12. In sum, Complainants are entitled to per-call
compensation for completed 1+ calls made from their payphones
and routed to One Call. Section 64.1300(c) of the
Commission's rules provides for a per-call compensation rate
of $.24.40 In the Third Report and Order, the Commission
adjusted that rate to $.238 for calls placed between October
7, 1997 and April 21, 1999.41
13. In accordance with these rates, the parties have
stipulated that (assuming a liability finding) One Call owes
Complainants principal of $42,440.91 for per-call compensation
relating to 1+ calls carried by One Call between October 7,
1997 and December 31, 1999.42 Because we have determined that
Complainants are entitled to compensation for 1+ calls, we
find One Call is liable in the amount the parties have
stipulated, plus interest, which shall be calculated at an
annual rate of 11.25 percent.43
IV. ORDERING CLAUSES
14. ACCORDINGLY, IT IS ORDERED, pursuant to sections 1, 4(i),
4(j), 208, and 276 of the Communications Act of 1934, as
amended, 47 U.S.C. §§ 151, 154(i), 154(j), 208, and 276, and
section 64.1300 of the Commission's rules, 47 C.F.R. §
64.1300, that the above-captioned complaint filed by Illinois
Bell Telephone Company, Inc., d/b/a Ameritech Illinois;
Indiana Bell Telephone Company, Inc., d/b/a Ameritech Indiana;
Michigan Bell Telephone Company, Inc., d/b/a Ameritech
Michigan; The Ohio Bell Telephone Company, d/b/a Ameritech
Ohio; Wisconsin Bell, Inc., d/b/a Ameritech Wisconsin; Pacific
Bell Telephone Company; and Southwestern Bell Telephone
Company IS GRANTED to the extent indicated above.
15. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 4(j),
208, and 276 of the Communications Act of 1934, as amended, 47
U.S.C. §§ 151, 154(i), 154(j), 208, and 276, and section
64.1300 of the Commission's rules, 47 C.F.R. § 64.1300, that
One Call shall pay Complainants damages in the amount of $42,
440.91, plus prejudgment interest computed at a rate of 11.25
percent, compounded annually. One Call shall pay this amount
to Complainants within 60 days of release of this Order.
16. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 4(j),
and 208 of the Communications Act of 1934, as amended, 47
U.S.C. §§ 151, 154(i), 154(j), and 208, that the parties'
Joint Motion for Partial Dismissal With Prejudice IS GRANTED.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 47 U.S.C. § 208.
2 47 U.S.C. § 276(b)(1)(A).
3 47 C.F.R. § 64.1300.
4 The Complaint did not specify the types of payphone-
originated traffic at issue, and instead asserted generally that
One Call failed to compensate the Complainants for ``each and
every completed intrastate and interstate call using [a]
payphone.'' Illinois Bell Telephone Co., Inc., d/b/a Ameritech
Illinois, et al. v. One Call Communications, Inc., Complaint,
File No. EB-00-MD-008 (filed May 17, 2000) at 2, ¶ 1 (quoting 47
U.S.C. § 276(b)(1)(A)) (``Complaint''). However, Complainants'
Brief clarified that Complainants sought compensation for 1+, 0+,
and 1-800 calls directed to One Call's network. See Illinois
Bell Telephone Co., Inc., d/b/a Ameritech Illinois, et al. v. One
Call Communications, Inc., Complainants' Opening Brief, File No.
EB-00-MD-008 (filed Sept. 25, 2000) at 2 (``Complainants'
Brief''). The parties recently settled the claims involving 0+
and 1-800 calls, and they moved to dismiss ``all disputes that
underlie this litigation, except One Call's liability for Per-
Call Payphone Compensation, principal and interest, arising from
1+ calls.'' Illinois Bell Telephone Co., Inc., d/b/a Ameritech
Illinois, et al. v. One Call Communications, Inc., Joint Motion
for Partial Dismissal With Prejudice, File No. EB-00-MD-008
(filed June 8, 2001) at 2 (``Motion to Dismiss''). We grant the
Motion to Dismiss.
5 Complaint at 3, ¶ 3; Complainants' Brief at 2; Illinois
Bell Telephone Co., Inc., d/b/a Ameritech Illinois, et al. v. One
Call Communications, Inc., Revised Joint Statement of the
Parties, File No. EB-00-MD-008 (filed Sept. 6, 2000) at 3, 4, ¶¶
III.A.1, 11 (``Revised Joint Statement'').
6 Complaint at 3, ¶ 4; Illinois Bell Telephone Co., Inc.,
d/b/a Ameritech Illinois, et al. v. One Call Communications,
Inc., Answer, File No. EB-00-MD-008 (filed June 6, 2000) at 4, ¶
4 (``Answer''); Revised Joint Statement at 4, ¶ 14.
7 Complaint at 3, ¶ 4; Answer at 4, ¶ 4; Revised Joint
Statement at 4, ¶ 15; Complainants' Brief at 2; Illinois Bell
Telephone Co., Inc., d/b/a Ameritech Illinois, et al. v. One Call
Communications, Inc., One Call's Initial Brief, File No. EB-00-
MD-008 (filed Sept. 25, 2000) at 3 (``One Call's Brief'').
8 Complainants' Brief at 4; One Call's Brief at 2.
9 47 U.S.C. § 276(b)(1)(A).
10 Id.
11 Id. The Commission's rules subsequently clarified that
local calls for which the caller has made the required coin
deposit also are excluded from the per-call compensation
requirement. See 47 C.F.R. § 64.1300(b).
12 Implementation of the Pay Telephone Reclassification
and Compensation Provisions of the Telecommunications Act of
1996, Report and Order, 11 FCC Rcd 20541 (1996) (``First Payphone
Order''), aff'd in part and remanded in part sub nom. Illinois
Public Telecomm. Ass'n v. FCC, 117 F.3d 555 (D.C. Cir. 1997);
Second Report and Order, 13 FCC Rcd 1778 (1997) (``Second
Payphone Order''), aff'd in part and remanded in part sub nom.
MCI v. FCC, 143 F.3d 606 (D.C. Cir. 1998); Third Report and
Order, and Order on Reconsideration of the Second Report and
Order, 14 FCC Rcd 2545 (1999) (``Third Payphone Order''), aff'd
sub nom. American Public Communications Council v. FCC, 215 F.3d
51 (D.C. Cir. 2000) (collectively, ``Payphone Orders'' or
``Payphone Classification Proceeding'').
13 See Revised Joint Statement at Exhibit 1 (``Coin
Revenue Agreement'').
14 Complainants' Brief at 3, 5, 6; One Call's Brief at 7.
See also Revised Joint Statement at Exhibit 1 (Coin Revenue
Agreement at § 6).
15 See Revised Joint Statement at Exhibit 1 (Coin Revenue
Agreement at § 6.A.).
16 Id. See also Complainants' Brief at 3, 6. One Call
does not dispute this fact. Rather, as discussed infra, section
III, One Call maintains that the Complainants could have
negotiated a term requiring payment for 1+ calls, but opted not
to do so. See One Call's Brief at 7-8.
17 Implementation of the Pay Telephone Reclassification
and Compensation Provisions of the Telecommunications Act of
1996, Order on Reconsideration, 11 FCC Rcd 21233, 21293, ¶ 131
(1996).
18 Id., 11 FCC Rcd at 21294, ¶ 132.
19 See In the Matter of Ameritech's Plan to Provide
Comparably Efficient Interconnection to Providers of Pay
Telephone Services, Order, 12 FCC Rcd 4238 (1997).
20 See First Payphone Order, 11 FCC Rcd at 20710, ¶ 366
(per-call compensation regulations become effective one year
after publication in Federal Register).
21 Complaint at 7, ¶ 15; Answer at 7, ¶ 15.
22 Complaint at 8, ¶¶ 18, 20.
23 Complaint at 8. Complainants later clarified that, for
the period between October 7, 1997 and March 31, 1999, they
request a per-call compensation rate of $.238. See Illinois Bell
Telephone Co., Inc., d/b/a Ameritech Illinois, et al. v. One Call
Communications, Inc., Letter from William A. Brown, Senior
Counsel¾External Affairs/FCC, SBC Telecommunications, Inc. to
Lisa B. Griffin, Assistant Chief, Market Disputes Resolution
Division, Enforcement Bureau, FCC, No. EB-00-MD-008 (dated Aug.
10, 2001).
24 47 U.S.C. § 276(b)(1)(A) (emphasis added).
25 47 C.F.R. §§ 64.1300 (a) and (c) (emphasis added).
26 See 47 C.F.R. § 64.1300(b).
27 See One Call's Brief at 4 (citing paragraph 52 of the
First Payphone Order, 11 FCC Rcd at 20568, ¶ 52) (PSPs ``receive[
] no revenue'' for originating subscriber 800 and other toll-free
number calls, or are ``unable to block'' callers making access
code calls).
28 See One Call's Brief at 5-6 (citing Third Payphone
Order, 14 FCC Rcd at 2548-49, ¶ 5 & n.7) (PSPs receive a ``direct
payment'' for providing long distance calls using a presubscribed
carrier, including 1+ calls, where coins are deposited).
29 Implementation of the Pay Telephone Reclassification
and Compensation Provisions of the Telecommunications Act of
1996, Notice of Proposed Rulemaking, 11 FCC Rcd 6716, 6725, ¶ 15
(1996).
30 See, e.g., First Payphone Order, 11 FCC Rcd at 20567, ¶
49 (``It is only in cases where the market does not or cannot
function properly that the Commission needs to take affirmative
steps to ensure fair compensation.'').
31 See id., 11 FCC Rcd at 20568, ¶ 52.
32 Third Payphone Order, 14 FCC Rcd at 2548-49, ¶ 5 n.7.
33 In support of their respective positions, the parties
focus extensively on arguments advanced by the Commission in its
brief on appeal of the Third Payphone Order. See Complainants'
Brief at 6-7; Illinois Bell Telephone Co., Inc., d/b/a Ameritech
Illinois, et al. v. One Call Communications, Inc., Complainants'
Response Brief, File No. EB-00-MD-008 (filed Oct. 10, 2000) at 6
(``Complainants' Response Brief''); Illinois Bell Telephone Co.,
Inc., d/b/a Ameritech Illinois, et al. v. One Call
Communications, Inc., One Call's Reply Brief, File No. EB-00-MD-
008 (filed Oct. 10, 2000) at 5-8 (``One Call's Reply Brief'').
Like this Order, the Commission's brief simply noted that
statements made in the Payphone Orders regarding the definition
of ``compensable calls'' must be read in the context of the
Commission's regulations, which the statements were not intended
to restrict. See American Public Communications Council, Inc.,
et al. v. FCC, Brief for Respondents (Final Version), No. 99-1114
(D.C. Cir.) (filed Sept. 7, 1999) at 54-55.
34 One Call's Brief at 7-8.
35 One Call's Brief at 7. See also One Call's Reply Brief
at 2 (the Coin Revenue Agreement ``further demonstrates that
Ameritech `[could] otherwise charge' for 1+ calls carried by One
Call but `has chosen not to enter into a contract for payment'
for such calls and thus may not later demand per-call
compensation therefor'') (quoting Third Payphone Order, 14 FCC
Rcd at 2568-69, ¶ 53 & n.90).
36 As noted supra, paragraph 5 and note 21, the Commission
approved Complainants' CEI plan for the provision of payphone
services on April 15, 1997.
37 See First Report and Order, 11 FCC Rcd at 20660-61, ¶
239 (``we believe that it is prudent to ensure that such
safeguards are in place before the BOCs are allowed to
participate in interLATA presubscription for their payphones'').
See also 47 U.S.C. § 276(b)(1)(D) (providing BOCs the right to
negotiate with location providers regarding presubscribed
carriers unless the Commission finds such right is not in the
public interest).
38 One Call's Reply Brief at 9.
39 Joint Statement at Exhibit 1 (Coin Revenue Agreement at
§ 2.B.) (emphasis added).
40 47 C.F.R. § 64.1300(c).
41 Third Payphone Order, 14 FCC Rcd at 2635, ¶ 196.
42 Revised Joint Statement at 5, ¶ 19.
43 The Commission has previously determined that an 11.25%
interest rate is appropriate when IXCs are late in making
payments to PSPs. See Implementation of the Pay Telephone
Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, Memorandum Opinion and Order, 13
FCC Rcd 10893, 10895, ¶ 3 (Com. Car. Bur. 1998); Third Payphone
Order, 14 FCC Rcd at 2630-31, ¶ 189.