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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
APCC Services, Inc., )
Data Net Systems, LLC, )
Davel Communications, Inc., )
Jaroth, Inc. dba Pacific Telemanagement )
Services, and )
Intera Communications Corp., )
)
Complainants, )
)
)
v. ) File No. EB-02-MD-012
)
TS Interactive, Inc., )
)
Defendant. )
MEMORANDUM OPINION AND ORDER
Adopted: June 9, 2004 Released: June 10,
2004
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Order, we grant an unopposed
supplemental complaint for damages
(``supplemental complaint'' or ``complaint for
damages'') filed by APCC Services, Inc., et al.
(``APCC'' or ``Complainants'') against TS
Interactive, Inc. (``TS Interactive'') pursuant
to section 208 of the Communications Act of
1934, as amended (the ``Act'')1 and section
1.722 of the Commission's rules.2 In the
liability phase of this proceeding, we granted a
motion for default judgment against TS
Interactive, thereby resolving a formal
complaint alleging that TS Interactive breached
section 276 of the Act3 by failing to pay dial-
around compensation to Complainants for certain
categories of completed coinless calls
originating from payphones, in violation of
Commission rules and orders.4 Consistent with
that ruling, we now award damages to
Complainants for dial-around compensation that
TS Interactive has failed to pay for calls made
from Complainants' payphones using resold
services of Global Crossing Ltd. (``Global
Crossing'').
II. BACKGROUND
A. The Parties and the Procedural Background
2. Complainants consist of payphone service
providers (``PSPs'') and the agents of PSPs for
the billing and collection of ``dial-around
compensation.''5 Defendant TS Interactive has
been described by Complainants as a switch-based
reseller of certain communications services of
Global Crossing Ltd. (``Global Crossing'').6
During the relevant period, TS Interactive
provided interstate and intrastate telephone
toll service, and carried traffic originating
from payphones owned or represented by
Complainants.7
3. On April 19, 2002, Complainants filed a
formal complaint (``formal complaint'') against
TS Interactive seeking to recover unpaid ``dial-
around compensation'' that TS Interactive was
allegedly required to pay Complainants under
section 276 of the Act and section 64.1300 et
seq. of the Commission's rules.8 Specifically,
Complainants alleged that TS Interactive failed
to pay them dial-around compensation, despite
entering into a contract with Global Crossing in
which TS Interactive assumed the responsibility
to make such payments after February 28, 1999.9
4. Although TS Interactive made an initial
settlement proposal, it eventually decided not
to participate further in the liability phase of
this proceeding.10 After TS Interactive failed
to submit an answer to the complaint,
Complainants filed a Motion for Default Judgment
on the issue of liability.11 TS Interactive
also failed to file an opposition to
Complainants' Motion for Default Judgment.12
5. In the Liability Order, the Enforcement
Bureau (the ``Bureau'') found that TS
Interactive was in default, and granted the
complaint.13 In doing so, the Bureau was guided
by four factors generally used by federal courts
in construing Rule 55 of the Federal Rules of
Civil Procedure,14 which concerns the
appropriateness of default judgments.15 The
Bureau found that: (1) the alleged facts, if
true, constituted a violation of the Act;16 (2)
TS Interactive had clearly failed to defend the
complaint, and this failure had continued for a
significant period of time and did not derive
from excusable neglect or a good faith
mistake;17 (3) Complainants had been
substantially prejudiced by the delay caused by
TS Interactive's failure to defend the
complaint;18 and (4) Complainants had properly
prosecuted this case.19 In addition, we found
that the claim presented was not an important
matter of public policy, such as a
constitutional or statutory construction issue,
but rather was a straightforward, private
payment dispute in an amount that ``is not so
large as to preclude a default judgment.''20
Finally, we granted Complainants' request to
bifurcate liability from damages, and directed
APCC to file a supplemental complaint for
damages within sixty days of the release of the
Liability Order.21
6. TS Interactive was served with a copy of the
Liability Order on December 20, 2002.22 TS
Interactive did not file a petition for
reconsideration or an application for review of
the Liability Order and has not otherwise
contested the Bureau's decision.
B. The Supplemental Complaint for Damages
7. APCC filed the supplemental complaint for
damages on February 19, 2003. Upon review,
Commission staff found that the supplemental
complaint failed to comply with several of the
Commission's rules, including section 1.722(h),
which requires a computation of ``each and every
category'' of damages for which recovery is
sought.23 Thus, Commission staff dismissed the
supplemental complaint, without prejudice.24
Complainants refiled their supplemental
complaint for damages on April 11, 2003.25 Once
more, the supplemental complaint contained
several deficiencies, but instead of dismissing
it, Commission staff required that Complainants
supplement the record to correct these
deficiencies by August 15, 2003.26 At the
Complainants' request, Commission staff later
extended this deadline to October 3, 2003.27
Pursuant to the staff's letter rulings,
Complainants augmented the supplemental
complaint with additional information filed on
October 3, 2003 and October 9, 2003.28 TS
Interactive has failed to participate in any way
in the damages phase of this proceeding.
III. DISCUSSION
A. Standard for Default Judgment
8. As in the liability stage of this proceeding,
we must examine whether a default judgment for
damages is appropriate here. As the Bureau
stated in the Liability Order, section 1.724(a)
of the Commission's rules requires a defendant
in a formal complaint proceeding to file an
answer within twenty days of service of the
formal complaint, unless otherwise directed by
the Commission.29 Furthermore, section 1.724(d)
of the Commission's rules states that
``[a]verments in a complaint . . . are deemed to
be admitted when not denied in the answer.''30
Although the Commission's formal complaint rules
do not address default judgments specifically,
when a defendant fails knowingly to answer a
complaint against it, the Commission may find
the defendant in default, and may consider the
material facts alleged in the complaint to be
admitted.31 The same general principles apply
to supplemental complaints for damages.
9. As we did in the liability stage of this
proceeding, we conclude that TS Interactive has
clearly failed to defend the supplemental
complaint; that TS Interactive's failure to
defend has continued for a significant period of
time; and that TS Interactive's failure to
defend does not derive from excusable neglect or
a good faith mistake. Furthermore, TS
Interactive received timely notice of the
supplemental complaint and of the deadline for
filing its answer, yet failed to respond.32
This failure to participate or otherwise defend
the complaint has lasted for several months, and
TS Interactive has neither offered a legitimate
rationale for its failure to participate nor
shown any indication that it has had a change of
heart regarding its conduct. We therefore find
that TS Interactive clearly, knowingly, and
repeatedly failed to defend against the
supplemental complaint for damages.
Consequently, we grant default judgment on the
supplemental complaint for damages with respect
to Complainants APCC Services, Inc., Data Net
Systems, LLC, and Intera Communications Corp.33
10. In the damages context, however, we conclude
that we have an obligation to ensure that the
amount of the requested damages is appropriate,
and we should not automatically accept the
proffered amount as correct and reasonable.34
For example, according to Federal Rule of Civil
Procedure 8(d), ``[a]verments in a pleading to
which a responsive pleading is required, other
than those as to the amount of damages, are
admitted when not denied . . . .''35 Moreover,
Federal Rule of Civil Procedure 55(b)(2)
provides that, when granting a default judgment,
if ``it is necessary to take account or to
determine the amount of damages or to establish
the truth of any averment by evidence . . . ,
the court may conduct such hearings or order
such references as it deems necessary and
proper.''36 Thus, even when a default judgment
is warranted based upon a party's failure to
defend, the allegations in the complaint with
respect to the amount of the damages are not
deemed true, and the court must ascertain the
amount of damages with reasonable certainty.37
In this spirit, Commission staff has carefully
reviewed the damage calculation submitted by
Complainants, and is satisfied that the amount
summarized below is appropriate in this
particular case.
B. Measuring Damages
11. Determining an appropriate measure of damages
in this particular case presents a unique set of
challenges. Complainants state that payphone
dial-around compensation can only be calculated
based on information and documents that reside
solely in the possession of the switch-based
reseller (``SBR'');38 in this case, TS
Interactive. As described above, TS Interactive
has failed to participate at any stage of this
proceeding, and has refused to provide the
relevant documentation that Complainants assert
would allow the Complainants and Commission
staff to calculate the amount of dial-around
compensation that TS Interactive has failed or
refused to pay during the relevant time
period.39 This appears to place the
Complainants squarely between the proverbial
rock and hard place.
12. At the time they filed their motion for
default judgment, Complainants estimated the
damage amount based on one unsubstantiated
sentence contained in a letter from TS
Interactive stating ``that the matter involves a
claim for less than $100,000.''40 Complainants
then estimated the amount at issue to be
$99,000.41 According to Complainants, they
relied on this estimate in their motion because,
at that time, they had no other information.42
13. Complainants state that they subsequently
became aware of the website for the National
Payphone Clearinghouse containing call
information about each Global Crossing switch-
based reseller that ``have identified themselves
as responsible for the payment of per-call
compensation during the time periods covered by
the data [January 1999 through December
2001].''43 Furthermore, according to
Complainants, the ``Global Crossing Reseller
Information'' home page on the National Payphone
Clearinghouse website contains files that
segregate the number of calls that were placed
by each payphone that was presubscribed to
Global Crossing's services by month and year, by
payphone automatic number identification
(``ANI''), and by SBR code for the period
between January 1999 and December 2001.44 With
this data, Complainants determined the number of
calls placed from their payphones using the
services of Global Crossing that were resold by
TS Interactive by simply cross-referencing to a
list of all the payphones that they owned and
controlled during the relevant time.45
14. This analysis, though, is incomplete. The
Commission's rules entitle payphone providers to
compensation for every completed call.46 The
data available through the National Payphone
Clearinghouse website, however, exhibits the
number of calls placed, not the number of calls
actually completed. Complainants' expert, Mr.
Pace, who identifies himself as ``an owner and
operator of a Mid-West independent payphone
service provider (``PSP'') company [that also]
act[s] as a consultant to other PSPs,''47 has
stated that, to determine an exact damage
amount, TS Interactive's call-detail records are
required.48 According to Mr. Pace, if such
records were made available, Complainants could
accurately measure damages by identifying each
completed call originated from one of their
payphones that was sent to Global Crossing and
completed by Defendant's switch by matching the
unique automated number identifications
associated with each particular payphone.49
Unfortunately, without the participation of the
Defendant, Complainants state they have no means
to access TS Interactive's call completion
information.
15. To assist us in resolving this dilemma,
Complainants' expert, Mr. Pace, has submitted an
affidavit stating that, in his ``extensive
experience working with interexchange carriers,
call completion rates have all been well above
50 percent.''50 Furthermore, he indicates that
he is ``aware of no plausible reason why a
carrier would experience call completion rat[es]
of less than 50 percent'' and that he believe[s]
a 50 percent call completion rate is an
appropriate rate to apply to the instant
case.''51
16. Based on our review of the Global Crossing
data submitted by Complainants from the National
Payphone Clearinghouse, the statement by
Complainants' expert that a 50 percent call
completion ratio is reasonable, and TS
Interactive's failure or refusal to rebut this
figure, we conclude, for the purposes of this
case only, that at least half of the calls
attempted from Complainants' payphones were
``completed,'' as that term is defined by the
Commission's rules and orders. Since April 22,
1999, the prescribed rate for dial-around
compensation has been $0.24 per completed
call.52 Thus, Complainants are entitled to
recover $0.24 on 50 percent of the attempted
calls (or $0.12 for each call attempted) from
Complainants' payphones using Global Crossing's
services that were resold by TS Interactive.
C. Complainants Have Abandoned Their Claim to Damages
Prior to January 1, 2000.
17. Section 415(b) of the Act provides that a
claim to recover damages must be filed within
two years from the time the claim accrues.53
Here, Complainants filed their Complaint on
April 19, 2002. Thus, a straightforward
application of section 415(b) would seem to
require that Complainants may recover damages
only on claims that accrued on or after April
19, 2000. Nevertheless, Complainants seek to
recover damages for every completed call routed
through TS Interactive's switch from
Complainants' payphones for the period February
28, 1999 through November 23, 2001.54 Despite
several requests from Commission staff to
explain why Complainants' recovery period should
go beyond the two year period outlined in
section 415(b) of the Act,55 Complainants
declined to do so.56 Thus, we find no basis in
this record to extend the recovery period beyond
the statutory two year limitations period.
Accordingly, we conclude that only claims for
damages that accrued on or after April 19, 2000
are timely.
18. For purposes of this case only, we accept
Complainants' assertion that the obligation of
carriers to compensate payphone owners for dial-
around calls arises quarterly, on the first day
of the quarter ``that is one quarter after the
one in which those calls were made (e.g., calls
made in the first quarter of 1999 became due on
the first day of the third quarter of 1999).''57
According to Complainants, this is because,
under standard industry practices, dial-around
compensation is paid quarterly.58 Accordingly,
a claim for a failure to pay payphone dial-
around compensation does not accrue until the
date by which such compensation is ordinarily
due.59
19. Applying that standard here to determine
which claims accrued on or after April 19, 2000,
we conclude that Complainants are entitled to
damages only for completed calls made after
January 1, 2000. Specifically, compensation for
completed calls made during the first quarter of
2000¾from January 1 to March 31¾was due on July
1, 2000, within the two-year statute of
limitations period; however, compensation for
completed calls made during the fourth quarter
1999¾from October 1 to December 31¾was due on
April 1, 2000, outside (by eighteen days) the
two-year statute of limitations period.
Accordingly, the following damages calculation
performed by Commission staff reflects the fact
that Complainants are entitled to damages only
for completed calls made after January 1, 2000.
D. Summary of Damages
20. After carefully reviewing the data submitted
by Complainants, we find that TS Interactive
owes Complainants the following amounts for
dial-around compensation:
Damages Calculation for Compensation Owed Complainant APCC
Services, Inc.:
Year Quarter # of Calls Compensation
2000 1st 64,814 $ 7,777.68
2nd 242,554 $ 29,106.48
3rd 401,847 $ 48,221.64
4th 400,627 $ 48,075.24
2001 1st 448,371 $ 53,804.52
2nd 863,064 $103,567.68
3rd 896,314 $107,557.68
4th 401,836 $48,220.3260
TOTAL 3,836,812 $460,417.44
Damages Calculation for Compensation Owed Complainant Data
Net Systems, LLC:
Year Quarter # of Calls Compensation
2000 1st 1,052 $ 126.24
2nd 1,563 $ 187.56
3rd 2,313 $ 277.56
4th 1,208 $ 144.96
2001 1st 978 $ 117.36
2nd 1,933 $ 231.96
3rd 2,316 $ 277.92
4th 955 $ 114.6061
TOTAL 12,318 $ 1,478.16
Damages Calculation for Compensation Owed Complainant Intera
Communications Corp:62
Year Quarter Representing # of Calls
Compensation
2000 1st Pacific Coin 15,635 $ 1,876.20
GoldenTel 1,142 $ 137.04
TOTAL 16,777 $ 2,013.24
2nd Pacific Coin 39,864 $ 4,783.68
GoldenTel 2,165 $ 259.80
TOTAL 42,029 $ 5,043.48
3rd Pacific Coin 58,450 $ 7,014.00
GoldenTel 4,893 $ 587.16
TOTAL 63,343 $ 7,601.16
4th Pacific Coin 67,764 $ 8,131.68
GoldenTel 5,348 $
641.76
TOTAL 73,112 $ 8,773.44
2001 1st Pacific Coin 83,210 $
9,985.20
GoldenTel 3,598 $
431.76
TOTAL 86,808 $10,416.96
2nd Pacific Coin 163,268 $19,592.16
GoldenTel 3,674 $
440.88
TOTAL 166,942 $20,033.04
3rd Pacific Coin 162,878 $19,545.36
GoldenTel 3,428 $
411.36
TOTAL 166,306 $19,956.72
4th Pacific Coin 72,602 $
8,712.24
GoldenTel 1,201 $
144.12
TOTAL 73,803 $ 8,856.3663
TOTAL 689,120 $82,694.40
E. Calculation of Interest
21. Complainants request that the Commission
award interest on the late payments at an annual
rate of 11.25 percent, accruing from ``the date
the amount owing for each quarter initially was
due until the date paid.''64 Complainants
further allege (as previously described) that
compensation for dial-around calls ``is due 90
days from the end of the calendar quarter for
which dial-around compensation is being
billed,''65 and that such schedule should be
utilized to calculate the applicable interest.66
22. The Commission has previously stated that an
11.25 percent interest rate is appropriate for
late payment of dial-around compensation, and we
therefore will allow 11.25 percent interest
here.67 Interest shall begin to accrue 90 days
from the end of the calendar quarter for which
dial-around compensation is being billed. The
parties shall calculate the applicable interest
using the base damages amounts set forth in
section III.D, supra.68
IV. ORDERING CLAUSES
23. 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,
sections 1.720-1.736 and 64.1300-64.1320 of the
Commission's rules, 47 C.F.R. §§ 1.720-1.736,
64.1300-64.1320, and authority delegated by
sections 0.111 and 0.311 of the Commission's
rules, 47 C.F.R. §§ 0.111, 0.311, that the
Complainants' Supplemental Complaint for Damages
IS GRANTED to the extent indicated herein as to
Complainants APCC Services, Inc., Data Net
Systems, LLC, and Intera Communications Corp.
24. 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,
sections 1.720-1.736 and 64.1300-64.1320 of the
Commission's rules, 47 C.F.R. §§ 1.720-1.736,
64.1300-64.1320, and authority delegated by
sections 0.111 and 0.311 of the Commission's
rules, 47 C.F.R. §§ 0.111, 0.311, that TS
Interactive shall pay APCC Services, Inc.,
within 90 days of release of this Order, damages
in the amount of $460,417.44, plus interest at
an annual rate of 11.25 percent, computed
beginning 90 days from the end of the calendar
quarter for which dial-around compensation was
initially billed and continuing through the date
of payment.
25. 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,
sections 1.720-1.736 and 64.1300-64.1320 of the
Commission's rules, 47 C.F.R. §§ 1.720-1.736,
64.1300-64.1320, and authority delegated by
sections 0.111 and 0.311 of the Commission's
rules, 47 C.F.R. §§ 0.111, 0.311, that TS
Interactive shall pay Data Net Systems, LLC,
within 90 days of release of this Order, damages
in the amount of $1,478.16, plus interest at an
annual rate of 11.25 percent, computed beginning
90 days from the end of the calendar quarter for
which dial-around compensation was initially
billed and continuing through the date of
payment.
26. 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,
sections 1.720-1.736 and 64.1300-64.1320 of the
Commission's rules, 47 C.F.R. §§ 1.720-1.736,
64.1300-64.1320, and authority delegated by
sections 0.111 and 0.311 of the Commission's
rules, 47 C.F.R. §§ 0.111, 0.311, that TS
Interactive shall pay Intera Communications
Corp., within 90 days of release of this Order,
damages in the amount of $82,694.40, plus
interest at an annual rate of 11.25 percent,
computed beginning 90 days from the end of the
calendar quarter for which dial-around
compensation was initially billed and continuing
through the date of payment.
27. 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,
sections 1.720-1.736 and 64.1300-64.1320 of the
Commission's rules, 47 C.F.R. §§ 1.720-1.736,
64.1300-64.1320, and authority delegated by
sections 0.111 and 0.311 of the Commission's
rules, 47 C.F.R. §§ 0.111, 0.311, that the
complaint against TS Interactive IS DENIED with
respect to claims asserted by Davel
Communications, Inc., and with respect to any
claims asserted by Jaroth, Inc. that have not
been transferred or assigned to Intera
Communications Corp.
FEDERAL COMMUNICATIONS
COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
147 U.S.C. § 208.
247 C.F.R. § 1.722.
347 U.S.C. § 276.
4APCC Services, Inc., et al., v. TS Interactive, Order, 17
FCC Rcd 25523 (2002) (``Liability Order''). See 47 C.F.R.
§§ 64.1300-64.1320. The Commission promulgated these rules
to implement section 276 of the Act, 47 U.S.C. § 276.
5Liability Order at 25524, ¶ 2. ``Dial-around
compensation'' refers to the per-call payments that
interexchange carriers (``IXCs'') must make to PSPs for
certain categories of completed coinless calls originating
from payphones, including access code calls and calls to
subscriber toll-free numbers. 47 C.F.R. §§ 64.1300 et seq.
6Liability Order at 25524, ¶ 2.
7Id. at 25524, ¶ 2.
8Id. at 25524, ¶ 3; 47 C.F.R. §§ 64.1300 et seq.; 47 U.S.C.
§ 276.
9Liability Order at 25524, ¶ 3. In accordance with section
1.722 of the Commission's formal complaint procedures, 47
C.F.R. § 1.722, Complainants requested that we bifurcate the
liability and damages phases of this proceeding. See Id. at
25524, ¶ 3.
10Id. at 25524-25, ¶ 4. See APCC Services, Inc., et al., v.
TS Interactive, Letter from Warren Firschein, Attorney,
Market Disputes Resolution Division, Enforcement Bureau,
FCC, to Albert H. Kramer, Counsel for Complainants, and
Douglas R. Hirsch, Counsel for TS Interactive, File No. EB-
02-MD-012 (July 10, 2002). TS Interactive has never
provided any written explanation for its failure to
participate in these proceedings.
11Liability Order at 25524-26, ¶ 4. See APCC Services,
Inc., et al., v. TS Interactive, Motion for Default Judgment
with Supporting Memorandum of Law, File No. EB-02-MD-012
(filed Sept. 6, 2002).
12Liability Order at 25525-26, ¶ 4.
13Id.
14Fed.R.Civ.P. 55.
15Where appropriate, we take guidance from the Federal Rules
of Civil Procedure. See, e.g., Core Communications, Inc. v.
Verizon Maryland Inc., 19 FCC Rcd 1935, 1939 n.29 (Enf. Bur.
2004); Premier Network Services, Inc. v. Southwestern Bell
Tel. Co., 18 FCC Rcd 11474, 11475 at ¶ 4 (Enf. Bur. 2003).
16Liability Order at 25527-27, ¶ 8.
17Id. at 25528, ¶ 9.
18Id. at 25528, ¶ 10.
19Id. at 25528, ¶ 11.
20Id. at 25528-29, ¶ 12. At the time, the Complainants
indicated that the claim was for $99,000. Id.
21Id. at 22529, ¶ 13.
22APCC Services, Inc., et al., v. TS Interactive, Letter
from Sandra Gray, Staff Assistant, Market Disputes
Resolution Division, Enforcement Bureau, FCC, to Alan C.
Hubbard and Gregory D. Kwan, Counsel for Complainants, and
Douglas R. Hirsch, Counsel for TS Interactive, File No. EB-
02-MD-012 (December 20, 2002).
2347 C.F.R. § 1.722(h). See APCC Services, Inc., et al., v.
TS Interactive, Letter from Radhika V. Karmarkar, Deputy
Chief, Market Disputes Resolution Division, Enforcement
Bureau, FCC, to Albert H. Kramer, Counsel for Complainants,
and Douglas R. Hirsch, Counsel for TS Interactive, File No.
EB-02-MD-012 (March 3, 2003) (``March 3 Dismissal Letter'').
24See March 3 Dismissal Letter.
25APCC Services, Inc., et al., v. TS Interactive,
Supplemental Complaint for Damages, File No. EB-02-MD-012
(filed April 11, 2003) (``Supplemental Complaint'').
26APCC Services, Inc., et al., v. TS Interactive, Letter
from Radhika V. Karmarkar, Deputy Chief, Market Disputes
Resolution Division, Enforcement Bureau, FCC, to Albert H.
Kramer, Counsel for Complainants, and Douglas R. Hirsch,
Counsel for TS Interactive, File No. EB-02-MD-012 (July 31,
2003).
27APCC Services, Inc., et al., v. TS Interactive, Letter
from Radhika V. Karmarkar, Deputy Chief, Market Disputes
Resolution Division, Enforcement Bureau, FCC, to Albert H.
Kramer, Counsel for Complainants, and Douglas R. Hirsch,
Counsel for TS Interactive, File No. EB-02-MD-012 (August
15, 2003). See APCC Services, Inc., et al., v. TS
Interactive, Letter from Allan C. Hubbard and Gregory D.
Kwan, Counsel for Complainants, to Jonathan Reel, Attorney,
Market Disputes Resolution Division, Enforcement Bureau,
FCC, File No. EB-02-MD-012 (filed August 13, 2003).
28APCC Services, Inc., et al., v. TS Interactive, Additional
Materials to Complainants' Supplemental Complaint for
Damages, File No. EB-02-MD-012 (filed October 3, 2003)
(``October 3 Additional Damages Materials''); APCC Services,
Inc., et al., v. TS Interactive, Additional Materials to
Complainants' Supplemental Complaint for Damages, File No.
EB-02-MD-012 (filed October 9, 2003) (``October 9 Additional
Damages Materials''). The October 9 Additional Damages
Materials supplemented a portion of the earlier filing.
According to Complainants, the computer diskette attached to
the October 3 Additional Damages Materials that identified
the payphones represented by Complainant APCC was ``not
verified by'' the National Payphone Clearinghouse. October
3 Additional Damages Materials at 6 n.7. See also paras.
12-13, infra (generally describing the role of the National
Payphone Clearinghouse in this proceeding). The October 9
Additional Damages Materials consisted solely of a new
diskette containing verified data, which was intended to
replace the earlier diskette filed on October 3, 2003.
29Liability Order at 25526, ¶ 5; 47 C.F.R. § 1.724(a).
3047 C.F.R. § 1.724(d).
31See Liability Order at 25526, n.18.
32See e.g., APCC Services, Inc., et al., v. TS Interactive,
Letter from Radhika V. Karmarkar, Deputy Chief, Market
Disputes Resolution Division, Enforcement Bureau, FCC, to
Albert H. Kramer, Counsel for Complainants, and Douglas R.
Hirsch, Counsel for TS Interactive, File No. EB-02-MD-012
(August 15, 2003); APCC Services, Inc., et al., v. TS
Interactive, Letter from Allan C. Hubbard and Gregory D.
Kwan, Counsel for Complainants, to Jonathan Reel, Attorney,
Market Disputes Resolution Division, Enforcement Bureau,
FCC, File No. EB-02-MD-012 (filed August 13, 2003); APCC
Services, Inc., et al., v. TS Interactive, Letter from
Radhika V. Karmarkar, Deputy Chief, Market Disputes
Resolution Division, Enforcement Bureau, FCC, to Albert H.
Kramer, Counsel for Complainants, and Douglas R. Hirsch,
Counsel for TS Interactive, File No. EB-02-MD-012 (July 31,
2003); APCC Services, Inc., et al., v. TS Interactive,
Letter from Radhika V. Karmarkar, Deputy Chief, Market
Disputes Resolution Division, Enforcement Bureau, FCC, to
Albert H. Kramer, Counsel for Complainants, and Douglas R.
Hirsch, Counsel for TS Interactive, File No. EB-02-MD-012
(March 3, 2003).
33See generally Fed.R.Civ.P. 55. Intera Communications
Corp. apparently owns the rights of Complainant Jaroth, Inc.
for the purposes of this litigation. See October 3
Additional Damages Materials at 8 and Exh. H. We deny the
complaint with respect to Complainant Davel Communications,
Inc., with prejudice, for failing to submit a request for
damages.
34See, e.g., 10a CHARLES A. WRIGHT, ARTHUR R. MILLER, & MARY
K. KANE, FEDERAL PRACTICE AND PROCEDURE § 2688 (1998).
35Fed. R. Civ. P. 8(d) (emphasis added).
36Fed.R.Civ.P. 55(b)(2).
37See, e.g., Credit Lyonnais Securities. (USA), Inc. v.
Alcantra, 183 F. 3d 151, 154-5 (2d Cir. 1999); Au Bon Pain
Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981);
Geddes v. United Financial Group, 559 F.2d 557, 560 (9th
Cir. 1977); U.S. v. Gant, 268 F. Supp. 2d 29, 32-33 (D.D.C.
2003); MCI WorldCom Communications, Inc. v. Gamma
Communications Group, Inc., 204 F.R.D. 259, 262-63 (S.D.N.Y.
2001).
38Supplemental Complaint at 9, ¶ 14; October 3 Additional
Damages Materials at 6, n.9.
39Supplemental Complaint at 9, ¶ 14; October 3 Additional
Damages Materials at 6, n.9.
40Supplemental Complaint at ¶¶ 12, 15 and 17. See APCC
Services, Inc., et al., v. TS Interactive, Letter from
Douglas R. Hirsch, Counsel for TS Interactive, to Warren
Firschein, Attorney, Market Disputes Resolution Division,
Enforcement Bureau, FCC, File No. EB-02-MD-012 (May 15,
2002) at 1.
41See APCC Services, Inc., et al., v. TS Interactive,
Supplemental Complaint for Damages, File No. EB-02-MD-012
(filed February 19, 2003) at 5, ¶ 5 and 11, ¶ 23.
42Supplemental Complaint at 9-10, 11, ¶¶ 15 and 17.
43October 3 Additional Damages Materials at 2. See
Supplemental Complaint at 11-12, ¶¶ 17-18.
44October 3 Additional Damages Materials at 3. See
Supplemental Complaint at 12, ¶ 18.
45October 3 Additional Damages Materials at 3-10. See
Supplemental Complaint at 12-13, ¶¶ 19-23.
4647 C.F.R. § 64.1300. See also Supplemental Complaint at
Attachment 9, Declaration of Gary L. Pace at 1-2, ¶ 3 (Pace
Declaration''); October 3 Additional Damages Materials at 6,
n.9.
47See Pace Declaration at 1, ¶ 1.
48Pace Declaration at 1-2, ¶ 3; October 3 Additional Damages
materials at 6, n.9.
49Pace Declaration at 1-2, ¶ 3.
50Id. at 2, ¶ 4.
51Id.
52Implementation of the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunications Act of
1996, Third Report and Order, and Order on Reconsideration
of the Second Report and Order,14 FCC Rcd 2545, 2632, ¶ 191
(1999) (subsequent history omitted).
5347 U.S.C. § 415(b).
54Supplemental Complaint at 22-23, ¶ 48.
5547 U.S.C. § 415(b).
56See APCC Services, Inc., et al., v. TS Interactive, Letter
from Radhika V. Karmarkar, Deputy Chief, Market Disputes
Resolution Division, Enforcement Bureau, FCC, to Albert H.
Kramer, Counsel for Complainants, and Douglas R. Hirsch,
Counsel for TS Interactive, File No. EB-02-MD-012 (July 31,
2003); APCC Services, Inc., et al., v. TS Interactive,
Letter from Radhika V. Karmarkar, Deputy Chief, Market
Disputes Resolution Division, Enforcement Bureau, FCC, to
Allan C. Hubbard and Gregory D. Kwan, Counsel for
Complainants, and Douglas R. Hirsch, Counsel for TS
Interactive, File No. EB-02-MD-012 (March 16, 2004).
Complainants simply stated that the statute of limitations
``is an affirmative defense which needs to be raised by the
Defendant'' pursuant to the Commission's formal complaint
rules. October 3 Additional Damages Materials at 11.
According to Complainants, since TS Interactive has failed
or refused to file an answer to either the formal complaint
or the supplemental complaint for damages, ``the statute of
limitations issue has not been appropriately raised.'' Id.
See APCC Services, Inc., et al., v. TS Interactive, Letter
from Albert H. Kramer, Counsel for Complainants, to Marlene
Dortch, Secretary, FCC, File No. EB-02-MD-012 (filed March
29, 2004) (arguing that the Commission ``should act on the
basis of the record before it.''). As explained above,
however, in a default judgment context, we have an
independent obligation to ensure that the damages awarded
are reasonable. This obligation includes investigating
defenses that seem obvious and clear in the record.
57Additional Materials to Complainants' Supplemental
Complaint for Damages at 11 n. 23 (citing APCC Services,
Inc. v. WorldCom, Inc., 35 F.Supp.2d 1, 9 (D.D.C. 2001)).
58See October 3 Additional Damages Materials at 9 n.19; APCC
Services, Inc. v. WorldCom, Inc., 35 F.Supp.2d 1, 9 (D.D.C.
2001); Implementation of the Pay Telephone Reclassification
and Compensation Provisions of the Telecommunications Act of
1996, Order, 13 FCC Rcd 7303, 7305, ¶ 4 (Enf. Div., Com.
Car. Bur. 1998) (subsequent history omitted).
59See Implementation of the Pay Telephone Reclassification
and Compensation Provisions of the Telecommunications Act of
1996, Order, 13 FCC Rcd 7303, 7305, ¶ 4 (Enf. Div., Com.
Car. Bur. 1998) (subsequent history omitted).
60The data obtained from the National Payphone Clearinghouse
website indicates that 151,220 calls were placed from Data
Net Systems' payphones during November, 2001 using Global
Crossing's services that were resold by TS Interactive, and
that 11,903 calls were placed during December, 2001. As
described in the Liability Order, however, switch-based
resellers such as TS Interactive were required to pay dial-
around compensation to a PSP between October 7, 1997 and
November 23, 2001, when, as here, the switch-based reseller
contractually assumed responsibility for the dial-around
payments from the first facilities-based IXC. See
Liabuility Order at 25527, ¶ 8. Consistent with the
Commission's orders, the Liability Order imposed liability
for calls placed until November 23, 2001. To account for
this discrepancy, we multiplied the total number of calls
placed in November, 2001 by a factor of .7333, which
represents the percentage of the month of November that
passes during its first 22 days, and subtracted the calls
placed during December, 2001. This approximation rests on
an assumption that there were roughly an identical number of
calls placed each day during the month of November. Due to
the holiday of Thanksgiving, this may not be accurate, but
without any evidence in the record to the contrary, we will
use this simple ratio.
61The data obtained from the National Payphone Clearinghouse
website indicates that 367 calls were placed from Data Net
Systems' payphones during November, 2001 using Global
Crossing's services that were resold by TS Interactive. As
described in footnote 60, supra, these figures must be
prorated to limit liability to calls placed until November
23, 2001. We used the monthly data contained on the
National Payphone Clearinghouse to perform this calculation.
To reach the results summarized here, we removed the calls
placed in December, 2001, and multiply the number of calls
placed in November, 2001 by .7333, which represents the
proportion of the month of November that falls within the
period for calculating damages. This approximation rests on
an assumption that there were roughly an identical number of
calls placed each day during the month of November. It
appears that Complainants estimated that 245 compensable
calls were placed during November, 2001. Compare October 3
Additional Damages Materials at 7-8 with October 3
Additional Damages Materials at Exhibit G. Furthermore,
Complainants appear to have used the incorrect 367-call
figure when calculating interest due on the past-due dial-
around compensation. See October 3 Additional Damages
Materials at Exhibit L. We caution Complainants to
recalculate the interest due based upon the number of calls
adopted in this order.
62On October 22, 2002, Intera purchased Pacific Coin and
GoldenTel. See October 3 Additional Damages Materials at
Exhibit H (Declaration of M. Sean Venezia), ¶ 4. For
clarity, the damages calculation has been broken up
according to the payphones owned by those two former
entities.
63The data obtained from the National Payphone Clearinghouse
website indicates that 83,952 calls were placed from Pacific
Coin's payphones, and 1,446 calls were placed from
GoldenTel's payphones, during the fourth quarter of 2001
using Global Crossing's services that were resold by TS
Interactive. As described in footnote 60, supra, these
figures must be prorated to limit liability to calls placed
until November 23, 2001. We used the monthly data contained
on the National Payphone Clearinghouse to perform this
calculation. Using the data submitted by Complainants, we
have concluded that, using GTI's payphones, 688 calls were
placed in October, 2001; 700 calls were placed in November,
2001; and 58 calls were placed in December, 2001. Using
PCCI's payphones, we calculate that 48,654 calls were placed
in October, 2001; 32,658 calls were placed in November,
2001; and 2,640 calls were placed in December, 2001. To
reach the results summarized here, we removed the calls
placed in December, 2001, and multiply the number of calls
placed in November, 2001 by .7333, which represents the
proportion of the month of November that falls within the
period for calculating damages.
64Supplemental Complaint at 14, ¶ 26.
65Id.
66Id.
67See Implementation of the Pay Telephone Reclassification
and Compensation Provisions of the Telecommunications Act of
1996, Second Report and Order, 13 FCC Rcd 1778, 1805-06 at
¶¶ 59-60 (1997) (subsequent history omitted); Implementation
of the Pay Telephone Reclassification and Compensation
Provisions of the Telecommunications Act of 1996, Third
Report and Order, and Order on Reconsideration of the Second
Report and Order, 14 FCC Rcd 2545, 2631 at ¶ 189 (1999)
(subsequent history omitted); Bell-Atlantic-Delaware, Inc.
et al. v. MCI Telecommunications Corp., Memorandum Opinion
and Order, 16 FCC Rcd 8112, 8120 at ¶ 17 n.43 (2001)
(``Bell-Atlantic-Delaware'').
68See General Communication, Inc. v. Alaska Communications
Systems Holdings, Inc. et al., Memorandum Opinion and Order,
16 FCC Rcd 2834, 2864 at ¶ 77 (2001), reversed on other
grounds, ACS of Anchorage, Inc. v. FCC, 290 F.3d 403 (D.C.
Cir. 2002); Bell-Atlantic-Delaware, 16 FCC Rcd at 8120, ¶
17.