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Before the
Federal Communications Commission
Washington, D.C. 20554
APCC Services, Inc., Davel Communications, )
Inc., ETS Payphones, Inc., Goldentel, Inc., )
Kellee Communications Group, Inc., )
NSC Communications Public Services )
Corporation, PayTel Communications, Inc., )
and West Coast Coin, Inc., )
)
Complainants, )
)
v. ) File No. EB-05-MD-002
)
IDT Corporation, )
)
Respondent. )
Memorandum opinion and order
Adopted: July 11, 2006 Released: July 11, 2006
By the Chief, Enforcement Bureau:
I. Introduction
1. In this order, we address a formal complaint filed by APCC Services,
Inc. ("APCC"), and several payphone service providers against IDT
Corporation ("IDT") pursuant to section 208 of the Communications Act
of 1934, as amended ("Act"). The Complaint alleges that IDT violated
sections 201(b) and 416(c) of the Communications Act by failing to
produce certain documents as required by rule 47 C.F.R. S 64.1320(g).
Because IDT provided those documents to APCC after the Complaint was
filed, however, the Complaint is moot and, accordingly, we dismiss it.
II. Background
A. The Parties
2. Complainants Davel Communications, Inc., ETS Payphones, Inc.,
Goldentel, Inc., NSC Communications Public Service Corporation, West
Coast Coin, Inc., Kellee Communications Group, Inc., and PayTel
Communications, Inc. (collectively, the "PSP Complainants") are
payphone services providers. APCC is an agent of the PSP Complainants,
and of other payphone service providers, for the billing and
collection of dial-around compensation.
3. IDT is a common carrier providing interexchange telecommunications
services. IDT is also a "Completing Carrier," as defined by section
64.1300(a) of the Commission's rules.
A. The Relevant Law
4. The Commission's payphone compensation rules are designed to ensure,
inter alia, that payphone service providers are fairly compensated for
coinless calls originated from their payphones. For the period at
issue here, those rules require that the last facilities-based long
distance carrier in a call path, the "Completing Carrier," compensate
the payphone service provider for coinless calls that are completed by
that carrier.
5. To help ensure accurate reporting of calls (and, thus, accurate
payment for those calls), the Commission's rules require a Completing
Carrier to establish detailed procedures for tracking and paying
compensation for payphone-originated calls. The Commission's rules
also require Completing Carriers to engage an independent third-party
auditor to prepare a "System Audit Report" verifying the accuracy and
reliability of the call tracking system. Completing Carriers must
submit their System Audit Reports to, among others, the Commission and
all payphone service providers for which they complete calls. In
addition, the rules require that "[s]ubject to protections
safeguarding the auditor's and the Completing Carrier's confidential
and proprietary information, the Completing Carrier shall provide,
upon request, to the payphone service provider for inspection any
documents, including working papers, underlying the System Audit
Report." This provision lies at the heart of the dispute in the
instant case.
A. The Facts
6. On July 1, 2004, IDT filed its first System Audit Report with the
Commission. On September 14, 2004, APCC sent IDT a letter requesting,
on behalf of APCC's unidentified payphone service provider principals,
that IDT provide all documents underlying its System Audit Report.
This letter initiated subsequent correspondence between the parties
about the terms under which IDT was prepared to make the audit
documents available. For instance, IDT insisted that APCC identify the
payphone service providers on whose behalf it was making the request,
and asked for documentation of APCC's authority to do so. Another
point of contention was the location at which the audit documents
would be produced. IDT indicated that it would make the documents
available only at its New Jersey headquarters, while APCC demanded
that IDT send copies of the documents to APCC in Washington, D.C.
A. The Complaint
7. On February 1, 2005, while the parties were still discussing
production of the documents, APCC and the PSP Complainants filed their
Complaint with the Commission. The Complaint alleges that IDT violated
sections 201(b) and 416(c) of the Communications Act by engaging in a
"dilatory and obstructive pattern of conduct" in response to APCC's
request for documents underlying the System Audit Report, and by
failing to provide those documents to APCC or to the PSP Complainants.
The Complaint does not request payment of damages. The Complaint asks
only that the Commission find that IDT violated rule 64.1320(g) and
the Act and order IDT "either to deliver copies of the Underlying
Documents to Complainants' attorneys, or alternatively, to allow
Complainants to inspect the documents in Washington, D.C., and to
request and receive copies of such documents, subject to the condition
that Complainants reasonably compensate IDT for such copies, all in
accordance with the protective agreement provided by Complainants."
E. The Motion to Dismiss
8. After the Complaint was filed, the parties continued discussions about
IDT's production of the requested documents. A few months later, in
June 2005, the parties agreed upon terms for disclosure of the audit
documents to the Complainants. IDT then filed a Motion to Dismiss
the Complaint, asserting that since the requested documents have now
been made available to the Complainants, there is no longer any
effective relief for the Commission to grant. IDT argues that any
guidance as to rights and responsibilities under rule 64.1320(g)
should be determined in a rulemaking, where all interested parties
would have a right to participate.
9. Complainants, however, oppose the Motion to Dismiss on three bases.
First, they assert that the challenged action is "capable of
repetition, yet evading review," and thus dismissal of the Complaint
would encourage IDT "to repeat its dilatory and obstructive conduct"
in response to future requests. Second, they assert that there is a
continuing adverse impact on them because they were harmed by the
delay in obtaining the audit documents. And finally, Complainants
assert that the Commission can grant effective relief because IDT may
have, "by design or mistake," failed to produce all of the documents,
such that an explicit Commission order to produce them is still
necessary. Complainants also argue that the Article III
case-or-controversy requirement is applicable only to federal courts,
not to the Commission.
III. discussion
10. As Complainants correctly point out, section 208 complaints are not
governed by Article III "case or controversy" standards.
Nevertheless, we can and do dismiss complaints when the issues raised
therein have become moot. Thus, we consider whether there is any
remaining controversy in this case, and whether any effective relief
can be granted.
11. As stated above, Complainants assert that there is a continuing
controversy here, either because they continue to be adversely
impacted by IDT's actions, or because the violation at issue is
"capable of repetition yet evading review." In addition, Complainants
argue that "[i]t is quite possible that either IDT or its auditor,
whether by design or mistake, has failed to produce all the documents
whose production is required," and that therefore the Commission can
and should grant relief by explicitly directing IDT to produce all
underlying documents. We find, however, that there is no continuing
controversy, and that there is no longer any effective relief that we
can grant in this case. Complainants did not request monetary damages,
and have already obtained the relief they requested - access to IDT's
audit documents. Accordingly, at this point, any ruling on whether IDT
may have violated the Act and our rules would have no concrete impact
in this particular case.
12. Complainants assert that they need a specific Commission order
directing IDT to provide the audit documents in order to protect
against the possibility that IDT has withheld some of those documents,
either inadvertently or wilfully. We disagree. Complainants offer only
speculation to suggest that they have not been given all of the audit
documents. IDT is already subject to a Commission rule directing that
it make those documents available to payphone service providers. We
expect them to comply with that rule. Thus, we find that another
Commission order directing them to do so, when we have no reason to
believe that they are withholding documents, is unnecessary.
13. We also reject Complainants' assertion that this case is not moot
because the action challenged is "capable of repetition, yet evading
review." As applied by the courts, this is a narrow exception to the
"case or controversy" requirement, applicable only in "`exceptional
situations' . . . where the following two circumstances [are]
simultaneously present: `(1) the challenged action [is] in its
duration too short to be fully litigated prior to its cessation or
expiration, and (2) there [is] a reasonable expectation that the same
complaining party would be subjected to the same action again.'"
Complainants have not demonstrated such circumstances here. As to the
duration of the challenged action, Complainants seem to consider it
sufficient to speculate that IDT could choose to cease the offending
behavior prior to the conclusion of a complaint proceeding. That is
the case, however, in all complaint proceedings. The "capable of
repetition" exception was meant to address actions that are inherently
too short to be litigated. Moreover, Complainants offer nothing other
than speculation that IDT will subject them again to the circumstances
of this case. This is not enough to persuade us that we should issue a
decision concerning a dispute that has become moot.
14. Nevertheless, to facilitate prompt production of audit documents in
future cases, we provide the following guidance. First, we believe
that it is reasonable to expect that a party requesting documents
under rule 64.1320(g) will specifically identify on whose behalf it
makes the request. Second, we note that rule 64.1320(g) effectively
requires the Completing Carrier to permit payphone service providers
to copy the audit documents, at the payphone service providers'
expense, not merely to examine them. We agree with APCC that given the
complex and technical nature of the documents at issue, it would be
unduly burdensome to expect payphone services providers to conduct
their "inspection" of audit documents entirely on the Completing
Carrier's premises, and without any copies to mark up. To the extent
that copying raises greater issues of safeguarding confidential
information than does on-site inspection, we expect parties to be able
to address this in their nondisclosure agreements. And finally, we
note that rule 64.1320(g) effectively requires Completing Carriers to
ensure that their auditors are contractually obligated to provide the
documents covered by the rule if a payphone service provider requests
them. This obligation can readily be imposed when the auditor is
engaged; if the Completing Carrier fails to take this step, then any
"impossibility" of compliance will be of its own making. If the
auditor failed to live up to its contractual obligation, we would
consider whether the Completing Carrier had taken all reasonable steps
to enforce compliance before we would excuse its failure to provide
the documents as "impossible." In this case, it appears that IDT did,
in fact, take steps to ensure that its auditors would provide the
necessary documents. See IDT's Initial Brief at 14-15.
15. We find that there is no remaining dispute in this case, and no
requested relief remaining for us to grant. Accordingly, we dismiss
the Complaint as moot.
IV. Ordering Clause
16. Accordingly, IT IS ORDERED, pursuant to sections 4(i), 4(j), and 208
of the Communications Act of 1934, as amended, 47 U.S.C. SS 254(i),
154(j), and 208, sections 1.720-1.736 of the Commission's rules, 47
C.F.R. SS 1.720-1.736, and the authority delegated in section 0.111
and 0.311 of the Commission's rules, 47 C.F.R. SS 0.111 and 0.311,
that the
Defendant's Motion to Dismiss IS GRANTED, that the Complaint IS DISMISSED
WITH PREJUDICE as moot, and that this proceeding IS TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
Kris A. Monteith
Chief, Enforcement Bureau
Complaint, File No. EB-05-MD-002 (filed Feb. 1, 2005) ("Complaint").
47 U.S.C. S 208.
47 U.S.C. SS 201(b), 416(c).
Revised Joint Statement of Stipulated Facts, Disputed Facts, and Key Legal
Issues, File No. EB-05-MC-002 (filed May 13, 2005) ("Revised Joint
Statement") at PP 9-10. See generally 47 C.F.R. SS 64.1300-64.1320 for
rules governing payphone compensation obligations.
Revised Joint Statement at P 11; 47 C.F.R. S 64.1300(a) (defining a
"Completing Carrier" as "a long distance carrier or switch-based long
distance reseller that completes a coinless access code or subscriber
toll-free payphone call or a local exchange carrier that completes a
local, coinless access code or subscriber toll-free payphone call").
See, e.g., In the Matter of the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunications Act of 1996, 19 FCC Rcd
21457, P 1 (2004) (subsequent history omitted)("October 2004 Payphone
Order"); see also 47 U.S.C. S 276; 47 C.F.R. SS 64.1300-64.1320.
See, e.g., October 2004 Payphone Order at P 2; see also 47 C.F.R. S
64.1300.
47 C.F.R. S 64.1310(a)(1).
47 C.F.R. S 64.1320(a).
See 47 C.F.R. S 64.1320(b). Completing Carriers can comply with the
requirement to submit the report to payphone service providers by posting
a copy on either their website or a clearinghouse website. 47 C.F.R. S
64.1320(b)(2).
47 C.F.R. S 64.1320(g).
Revised Joint Statement at P 12; Complaint Exh. 2.
Complaint Exhs. 3-11.
Complaint Exh. 7 at 2, Exh. 10 at 1.
Complaint Exhs. 7, 8, 9, and 11.
Complaint at 17-19.
Id. at 61.
See IDT's Motion to Dismiss, File No. EB-05-MD-002 (filed June 30, 2005)
("Motion to Dismiss") at 2; see also Complainants' Opposition to IDT's
Motion to Dismiss, File No. EB-05-MD-002 (filed July 25, 2005) at 3.
The Motion to Dismiss was filed after the Complaint, Answer, and Reply had
all been filed, but shortly before the parties filed their Opposing Briefs
and Reply Briefs in the case.
Motion to Dismiss at 1-5. IDT also asserts that APCC's claims should be
dismissed because APCC, which is not a payphone service provider, lacks
standing to assert that it was denied the right to inspect the audit
documents. Motion to Dismiss at 4-5. Because we dismiss the Complaint as
moot, this issue is also moot.
Motion to Dismiss at 5-9.
Complainants' Opposition to IDT's Motion to Dismiss at 2.
Id. at 2-3.
Id. at 3.
Id. at 4-5.
Id.
See, e.g., North Carolina Utilities Comm. v. FCC, 537 F.2d 787, 791 (4^th
Cir. 1976) (holding that federal administrative agencies are not
restricted to adjudication of matters that are "cases and controversies"
within the meaning of Article III of the Constitution).
See, e.g., Total Telecommunications Services, Inc. v. AT&T Corporation,
16 FCC Rcd 5726 (2001) (dismissing claims as moot because there was no
additional relief that could be granted), remanded, 317 F.3d 227 (D.C.
Cir. 2003) (to explain dismissal of claim as "moot, without prejudice"
(emphasis added)), dismissed on motion of parties, 18 FCC Rcd 11533 (Enf.
Bur. 2003); Transglobal Telcom, Inc. v. E-Tel, Inc., 16 FCC Rcd 21576
(Enf. Bur. 2001) (dismissing complaint as moot where challenged action had
ceased and plaintiff had not requested damages) National Wireless
Resellers Ass'n v. AirTouch Communications, Inc., 15 FCC Rcd 13826
(Wireless Tel. Bur. 2000) (dismissing complaint as moot where the
challenged program had been discontinued); see also AT&T v. BellSouth, 19
FCC Rcd 23898 (2004) (dismissing certain counts of a complaint on grounds
that no additional relief could be afforded even if the Commission ruled
in the complainant's favor).
Complainants' Opposition to IDT's Motion to Dismiss at 3.
Id. at 2. Although, as explained above, we are not governed by Article III
concepts of standing and mootness, we address Complainants' argument here
under Article III precedent because they have framed their argument in
this context.
Lewis v. Continental Bank Corp., 494 U.S. 472, 481 (1990) (citations
omitted).
See, e.g., Spencer v. Kemna, 523 U.S. 1 (1998) (holding that the exception
is inapplicable where party failed to show that duration of action is
always so short as to evade review).
See, e.g., City of Los Angeles v. Lyons, 461 U.S. 95, 109 (1983) ( "[T]he
capable-of-repetition doctrine applies only in exceptional situations, and
generally only where the named plaintiff can make a reasonable showing
that he will again be subjected to the alleged illegality.").
We note that these document production requirements are all "[s]ubject to
protections safeguarding the auditor's and the Completing Carrier's
confidential and proprietary information," as set forth at 47 C.F.R. S
64.1320(g).
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(continued....)
Federal Communications Commission DA-06-1424
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Federal Communications Commission DA-06-1424