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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
) File No. EB-07-IH-5149
In the Matter of
) NAL/Acct. No. 200832080092
IDT Corporation
) FRN No. 0003-7900-37
)
)
ORDER
Adopted: October 29, 2008 Released: October 29, 2008
By the Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau (the "Bureau") and IDT Corporation (the
"Company"). The Consent Decree terminates the enforcement proceeding
initiated by the Bureau against the Company for possible violation of
section 220 of the Communications Act of 1934, as amended (the "Act"),
and sections 43.51 and 64.1001 of the Commission's rules relating to
the failure to file with the Commission an agreement with
Telecommunications D'Haiti S.A.M. ("Teleco Haiti") and amendments
thereto; failing to file a modification request for each of the
amendments to rate schedules; and failing to obtain Commission
approval prior to implementing modifications to rate schedules under
the terms of the agreement.
2. The Bureau and the Company have negotiated the terms of the Consent
Decree that resolve this matter. A copy of the Consent Decree is
attached hereto and incorporated by reference.
3. In the absence of material new evidence relating to this matter, we
conclude that the Bureau's investigation raises no substantial or
material questions of fact as to whether the Company possesses the
basic qualifications, including those related to character, to hold or
obtain any Commission license or authorization.
4. Accordingly, IT IS ORDERED that, pursuant to section 4(i) of the
Communications Act of 1934, as amended, the Consent Decree attached to
this Order IS ADOPTED.
5. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
6. IT IS FURTHER ORDERED that a copy of this Order and Consent Decree
shall be sent by first class mail and certified mail, return receipt
requested, to Elliot Rothstein, Chief Legal Officer, IDT Corporation,
520 Broad Street, Newark, NJ 07102.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
File No. EB-07-IH-5149
In the Matter of )
NAL/Acct. No. 200832080092
IDT Corporation )
FRN No. 0003-7900-37
)
)
)
CONSENT DECREE
1. The Enforcement Bureau of the Federal Communications Commission (the
"Commission" or "FCC") and IDT Corporation (the "Company"), by their
authorized representatives, hereby enter into this Consent Decree for
the purpose of terminating the Commission's investigation into whether
IDT violated section 220 of the Communications Act of 1934, as amended
(the "Act"), and sections 43.51 and 64.1001 of the Commission's Rules
relating to the failure to file with the Commission an agreement with
Telecommunications D'Haiti S.A.M. ("Teleco Haiti") and amendments
thereto; the failure to file a modification request for each of the
amendments to rate schedules; and the failure to obtain Commission
approval prior to implementing modifications to rate schedules under
the terms of the agreement.
I. DEFINITIONS
2. For the purposes of this Consent Decree, the following definitions
shall apply:
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C.
S: 151 et seq.
b. "Adopting Order" means an Order of the Bureau adopting the terms of
this Consent Decree without change, addition, deletion, or
modification.
c. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
d. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
e. "Compliance Plan" means the program described in this Consent Decree
at paragraph 9.
f. "Effective Date" means the date on which the Bureau releases the
Adopting Order.
g. "Foreign Carrier Service Agreements" means contracts, amendments, or
modification requests related to the exchange of services, routing of
traffic, accounting rates and division of tolls.
h. "IDT" or "Company" means IDT Corporation, its affiliates and
subsidiaries, and its predecessors-in-interest and
successors-in-interest.
i. "Investigation" means the investigation commenced by the Commission's
requests in February 2007 for copies of any contracts between the
Company and any Haitian telecommunications companies to determine
whether the Company violated section 220 of the Communications Act of
1934, as amended (the "Act"), and sections 43.51 and 64.1001 of the
Commission's Rules relating to the failure to file with the Commission
an agreement with Telecommunications D'Haiti S.A.M. ("Teleco Haiti")
and amendments thereto; the failure to file a modification request for
each of the amendments to rate schedules; and the failure to obtain
Commission approval prior to implementing modifications to rate
schedules under the terms of the agreement, which resulted in the
Commission's Notice of Apparent Liability for Forfeiture issued on
July 10, 2008.
j. "Parties" means the Company and the Bureau.
k. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
l. "Teleco Haiti" means Telecommunications D'Haiti S.A.M. and its
predecessors-in-interest and successors-in-interest.
II. BACKGROUND
3. The Commission's Rules implementing its International Settlements
Policy ("ISP") facilitate detection of arrangements between U.S. and
foreign carriers with market power that have the potential to result
in anticompetitive actions against competing U.S. carriers to the
detriment of U.S. consumers. In particular, U.S. carriers must comply
with specific filing obligations relating to contracts and other
arrangements between U.S. and foreign carriers concerning the exchange
of international telecommunications traffic, routing of traffic, rates
and other matters.
4. Specifically, section 43.51 of the Rules requires U.S. carriers who
execute such agreements to file them with the Commission within thirty
(30) days of execution, and to file a "modification request" prior to
implementing any arrangement that offers terms different from those
made available to any other carrier serving the same
U.S.-international route. Section 64.1001 of the Rules bars subject
carriers from implementing any such arrangement absent prior
Commission approval, and further requires that such carriers notify
all other carriers providing service on the same international route
of a modification request, concurrently with the filing of such
request with the Commission.
5. IDT is a publicly-traded, New Jersey-based company that provides a
range of telecommunications services domestically and internationally,
and is subject to the requirements discussed in paragraphs 3 through
4, above. On October 22, 2003, an IDT subsidiary entered into a
Carrier Service Agreement with Teleco Haiti that established the terms
and conditions for the provision and purchase of wholesale
telecommunications services on the U.S.-Haiti route, including the
initial rate for such services. Between February 5, 2004 and November
4, 2004, when the ISP was lifted from the U.S.-Haiti route, IDT and
Teleco Haiti amended the agreement three times by establishing or
amending the rates that would apply to Teleco Haiti's termination of
U.S.-originated traffic. The three amended rates became effective on
February 23, May 12, and August 1, 2004. At no point did IDT file the
agreement or any of its amendments with the Commission, nor did the
Company seek Commission approval or notify other carriers serving the
U.S.-Haiti route before modifying or implementing the agreement and
its amendments. On March 1, 2007, IDT submitted its Carrier Service
Agreement with the Commission at the request of Commission staff, and,
on May 23, 2007, IDT identified the rates established under the
agreement, again at the request of Commission staff. On July 10, 2008,
the Commission issued to IDT a Notice of Apparent Liability for
Forfeiture, finding the company apparently liable for a forfeiture of
$1.3 million.
III. TERMS OF AGREEMENT
6. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau by
incorporation of such provisions by reference in the Adopting Order
without change, addition, modification, or deletion.
7. Jurisdiction. IDT agrees that the Commission has jurisdiction over it
and the matters contained in this Consent Decree and has the authority
to enter into and adopt this Consent Decree.
8. Effective Date; Violations. The Parties agree that this Consent Decree
shall become effective on the date on which the Bureau releases the
Adopting Order. Upon release, the Adopting Order and this Consent
Decree shall have the same force and effect as any other Order of the
Commission. Any violation of the Adopting Order or of the terms of
this Consent Decree shall constitute a separate violation of a
Commission Order, entitling the Commission to exercise any rights and
remedies attendant to the enforcement of a Commission Order.
9. Compliance Plan. IDT agrees that it will develop (or further develop),
within sixty (60) calendar days from the Effective Date, an internal
Compliance Plan to ensure IDT's future compliance with the Act, the
Commission's Rules, and the Commission's orders governing the
execution of agreements with foreign carriers for the exchange of
international traffic. For purposes of this Compliance Plan, "IDT"
shall mean IDT Corporation and any and all of its U.S. communications
common carrier affiliates and subsidiaries. The Compliance Plan shall
include the following components:
A. Compliance Training Program. IDT will develop (or further develop) and
maintain a training program devoted to compliance with the Commission
requirements governing the execution and FCC filing of agreements with
foreign carriers for the exchange of international traffic on routes
subject to the ISP. The training program will be for employees
responsible for executing said agreements on behalf of IDT and IDT
attorneys that review and/or approve said agreements. Training
sessions will be conducted at least annually for such employees to
ensure compliance with the Act and the Commission's regulations and
policies and, for new employees who are engaged in such activities,
within the first sixty (60) days of employment. This training program
shall address at least the following subject matter areas:
1. the international routes currently subject to the ISP;
2. the specific filing obligations relating to contracts and other
arrangements between IDT and foreign carriers for the exchange of
international telecommunications traffic on routes subject to the
ISP;
3. the specific filing obligations for modification requests that
offer terms different from those made available to any other
carrier serving the same U.S.-international route subject to the
ISP;
4. the requirement for prior Commission approval before implementing
any such arrangements on routes subject to the ISP;
5. the requirement to notify all other carriers providing service on
the same international route, subject to the ISP, of any
modification request; and
6. the potential ramifications of failing to comply with the Act and
the Commission's Rules and Orders.
7. IDT shall update and enhance the foregoing training as appropriate
and necessary.
B. Internal Controls. IDT will develop (or further develop), and shall
maintain, internal control processes designed to ensure compliance
with the Act and the Commission's Rules and Orders regarding contracts
and other arrangements between IDT and foreign carriers for the
exchange of international telecommunications traffic on routes subject
to the ISP.
C. Self-Reporting. IDT will promptly file with the Commission all current
Foreign Carrier Service Agreements or amendments of such agreements
between IDT and foreign carriers for the exchange of international
traffic on routes currently subject to the ISP. IDT will file such
agreements and amendments within fifteen (15) days of discovery or the
Effective Date of this Consent Decree, whichever is later. If there
are no such agreements, IDT shall so notify the Commission. IDT will
report such filings to the Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W., Washington, D.C. 20554.
D. Compliance Report. IDT will file compliance reports with the
Commission ninety (90) days after the Effective Date, twelve (12)
months after the Effective Date, twenty-four (24) months after the
Effective Date, and thirty-six (36) months after the Effective Date.
Each compliance report shall include a compliance certificate from an
officer, as an agent of IDT, stating that the officer has personal
knowledge that IDT has operating procedures designed to ensure
compliance with this Consent Decree. All compliance reports shall be
submitted to Chief, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, 445 12th Street, S.W.,
Washington, D.C. 20554.
E. Termination Date. Unless stated otherwise, the requirements of this
Compliance Plan will expire thirty-six (36) months after the Effective
Date.
10. Voluntary Contribution. IDT agrees that it will make a voluntary
contribution to the United States Treasury in the amount of four
hundred thousand dollars ($400,000.00) ("Voluntary Contribution")
within thirty (30) days after the Effective Date of the Adopting
Order. The payment must be made by check or similar instrument,
payable to the Order of the Federal Communications Commission. The
payment must include the Account Number and FRN Number referenced in
the caption to the Adopting Order. Payment by check or money order may
be mailed to Federal Communications Commission, P.O. Box 979088, St.
Louis, MO 63197-9000. Payment by overnight mail may be sent to U.S.
Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza,
St. Louis, MO 63101. Payments by wire transfer may be made to ABA
Number 021030004, receiving bank Federal Reserve Bank of New York, and
account number 27000001. The Company also will send electronic
notification on the date said payment is made to
Mindy.Littell@fcc.gov.
11. Termination of Investigation. In express reliance on the covenants and
representations in this Consent Decree and to avoid further
expenditure of public resources, the Commission agrees to terminate
its Investigation. In consideration of IDT's Voluntary Contribution
and its agreement to develop and adhere to an internal Compliance Plan
as set forth herein, the Commission shall not initiate or continue any
inquiries, investigations, forfeiture proceedings, hearings, or
actions, or impose any sanctions or penalties, against IDT or its
affiliates or subsidiaries based in whole or in part on (i) the
Investigation; (ii) any other investigation or complaint related to
IDT's or any of its affiliates' or subsidiaries' compliance with
sections 43.51 and 64.1001 of the Commission's rules (and Sections 211
and 220 of the Communications Act, as amended, insofar as they relate
to obligations to file with the Commission a copy of any agreement
with a foreign carrier or modifications thereto) prior to the
Effective Date with respect to any "Foreign Carrier Service
Agreements" entered into by IDT on routes between the United States
and any foreign country, (iii) the allegations contained in any of the
foregoing, (iv) the underlying facts or conduct that relate to any of
the foregoing, or (v) any act or omission by IDT or its affiliates or
subsidiaries occurring prior to the Effective Date and relating to any
of the foregoing.
12. Waivers. IDT waives any and all rights it may have to seek
administrative or judicial reconsideration, review, appeal or stay, or
to otherwise challenge or contest the validity of this Consent Decree
and the Order adopting this Consent Decree, provided the Commission
issues an Order adopting the Consent Decree without change, addition,
modification, or deletion. IDT shall retain the right to challenge
Commission interpretation of the Consent Decree or any terms contained
herein. If either Party (or the United States on behalf of the
Commission) brings a judicial action to enforce the terms of the
Adopting Order, neither IDT nor the Commission shall contest the
validity of the Consent Decree or the Adopting Order, and IDT shall
waive any statutory right to a trial de novo. IDT hereby agrees to
waive any claims it may otherwise have under the Equal Access to
Justice Act, 5 U.S.C. S: 504 and 47 C.F.R. S: 1.1501 et seq., relating
to the matters addressed in this Consent Decree.
13. Subsequent Rule or Order. The Parties agree that if any provision of
the Consent Decree conflicts with any subsequent Rule or Order adopted
by the Commission (except an Order specifically intended to revise the
terms of this Consent Decree to which IDT does not expressly consent)
that provision will be superseded by such Commission Rule or Order.
14. Successors and Assigns. IDT agrees that the provisions of this Consent
Decree shall be binding on its successors, assigns, and transferees.
15. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties. The
Parties further agree that this Consent Decree does not constitute
either an adjudication on the merits or a factual or legal finding or
determination regarding any compliance or noncompliance with the
requirements of the Act or the Commission's Rules and Orders.
16. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
17. Paragraph Headings. The headings of the Paragraphs in this Consent
Decree are inserted for convenience only and are not intended to
affect the meaning or interpretation of this Consent Decree.
18. Authorized Representative. Each party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
19. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when executed
and delivered, shall be an original, and all of which counterparts
together shall constitute one and the same fully executed instrument.
________________________________
Kris Anne Monteith
Chief
Enforcement Bureau
Federal Communications Commission
________________________________
Date
________________________________
James A. Courter
Chief Executive Officer
IDT Corporation
________________________________
Date
47 U.S.C. S: 220; 47 C.F.R. S:S: 43.51(a)(1) and (e)(2), 64.1001(b) and
(e) (2003).
47 U.S.C. S: 154(i).
47 U.S.C. S: 220; 47 C.F.R. S:S: 43.51(a)(1) and (e)(2), 64.1001(b) and
(e) (2003).
47 U.S.C. S: 220; 47 C.F.R. S:S: 43.51(a)(1) and (e)(2), 64.1001(b) and
(e) (2003); IDT Corporation, Notice of Apparent Liability for Forfeiture,
FCC 08-165, 2008 WL 2714526 (rel. July 10, 2008), response pending.
47 C.F.R. S: 43.51(a)(1)(i), (ii) (2003).
47 C.F.R. S: 64.1001(b) and (e) (2003).
Letter from Troy F. Tanner, Bingham McCutchen LLP, Counsel for IDT Corp.,
to Marlene H. Dortch, Secretary, Federal Communications Commission, dated
March 1, 2007 (attaching Carrier Service Agreement between IDT and
Telecommunications D'Haiti S.A.M., October 22, 2003) ("Tanner March 1
Letter").
Additional U.S.-International Routes Exempted from the International
Settlements Policy, Public Notice, 19 FCC Rcd 22032, 22035 (2004).
Letter from Troy F. Tanner, Bingham McCutchen LLP, Counsel for IDT Corp.,
to Helen Domenici, Chief, International Bureau, Federal Communications
Commission, dated May 23, 2007, at 2 ("Domenici May 23 Letter").
Id. at 2.
Tanner March 1 Letter, Attachment.
Domenici May 23 Letter, at 2.
See IDT NAL.
Federal Communications Commission DA 08-2393
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Federal Communications Commission DA 08-2393
Federal Communications Commission DA 08-2393
2
Federal Communications Commission DA 08-2393