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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
)
)
In the Matter of
)
Contel of the South, Inc. d/b/a Verizon Mid-States,
Verizon California Inc., The Micronesian )
Telecommunications Corporation, Verizon Delaware
Inc., Verizon Florida Inc., Verizon Maryland Inc., )
Verizon New England Inc., Verizon New York Inc.,
Verizon New Jersey Inc., Verizon North Inc., )
Verizon Northwest Inc., Verizon South Inc., Verizon
Pennsylvania Inc., GTE Southwest Inc., Verizon ) File No.
Washington, D.C. Inc., and Verizon West Virginia, EB-05-MD-007
Inc., )
Complainants, )
v. )
Operator Communications, Inc., )
Defendant. )
)
)
)
)
)
MEMORANDUM OPINION AND ORDER
Adopted: December 21, 2007 Released: January 4, 2008
By the Commission: Commissioner Copps concurring and issuing a statement.
I. INTRODUCTION
1. In this Memorandum Opinion and Order, we grant in part a formal
complaint filed by the Verizon Telephone Companies against Operator
Communications, Inc. ("OCI") pursuant to section 208 of the
Communications Act of 1934, as amended ("Act"). Verizon alleges that
OCI violated sections 201 and 276 of the Act by failing to pay Verizon
payphone compensation required by sections 64.1301(a) and (c) of the
Commission's rules, and by failing to pay certain presubscribed
interexchange carrier ("PIC") charges imposed in Verizon's tariff. For
the reasons discussed below, we grant Verizon's Complaint with respect
to Commission rules 64.1301(a) and (c), and order OCI to pay damages
in the amount of such compensation due, plus interest. We dismiss
Verizon's PIC charges claim without prejudice to filing in an
appropriate forum on the ground that it is a collections action and
thus not cognizable under the Act.
II. BACKGROUND
2. At all relevant times, Verizon was a Local Exchange Carrier ("LEC")
and a payphone service provider ("PSP"). OCI was the PIC for thousands
of payphones in the United States, including payphones owned by
Verizon.
3. Section 276 of the Act directs the Commission to "establish a per call
compensation plan to ensure that all [PSPs] are fairly compensated for
each and every completed intrastate and interstate call using their
payphone . . . ." Pursuant to section 276, the Commission established
a per call compensation scheme, inter alia, for access code and
subscriber 800 (collectively "dial-around") calls, and 0+ calls. An
"access code" call is a payphone call in which the caller dials a
sequence of numbers that connects the caller to an interexchange
carrier ("IXC") other than the payphone's PIC. A "subscriber 800 call"
is a payphone call to an 800 number assigned to a particular
subscriber. A "0+ call" is a payphone call in which the caller dials
"0" plus the called number. A 0+ call is always automatically routed
to the payphone's PIC.
4. The Commission's per call compensation plan did not take effect,
however, until October 7, 1997, the date on which carriers were
required to install the call tracking technology necessary to
implement the plan. Until that time, for the period April 16, 1997 to
October 6, 1997 (the "Interim Period"), the Commission determined that
PSPs would be compensated for dial-around and 0+ calls on a
per-payphone basis. Accordingly, the Commission promulgated rules
64.1301(a) and (c), obligating certain carriers to compensate PSPs for
Interim Period dial-around and 0+ calls "per payphone per month."
III. DISCUSSION
A. OCI's Failure to Pay Interim Period Dial-Around Compensation Violates
Section 201(b) of the Act.
5. We conclude that OCI violated section 201(b) of the Act by failing to
pay Verizon dial-around compensation as required by Commission rule
64.1301(a). That rule provides:
In the absence of a negotiated agreement to pay a different amount, each
entity listed in Appendix A of the [Fifth Payphone Compensation Order]
must pay default compensation to [PSPs] for [dial-around] calls for the
[Interim Period] in the amount listed in Appendix A per payphone per
month.
As explained in the Fifth Payphone Compensation Order, Appendix A
allocates Interim Period dial-around compensation to each of the carriers
listed by estimating that carrier's proportionate share of the payphone
calls market during the Interim Period. OCI's assigned share is
$0.01776232 per payphone.
6. The parties have stipulated that they did not have a negotiated
agreement governing Interim Period compensation for dial-around calls,
and that OCI has not compensated Verizon for any such calls. In
addition, the parties agree as to the number of Verizon payphones that
were in service during the Interim Period. Accordingly, Verizon has
established each element of its rule 64.1301(a) claim.
7. OCI's defenses to this claim lack merit. First, OCI argues that
Verizon "may not use the Commission's complaint process to collect
debts . . . owed by customers for tariffed charges." The Commission
has distinguished between rules that impose an obligation to pay, and
rules that merely permit a carrier to levy a charge. Failure to pay
pursuant to the former is actionable under the Act, while failure to
pay in the latter instance is not. In the "collections action" cases
on which OCI relies, the complainant sought amounts allegedly owed
solely pursuant to tariff and, for that reason, did not state a claim
for violation of the Act or Commission rules. In this case, however,
Verizon seeks to enforce compensation obligations explicitly imposed
upon IXCs by Commission rules, and thus may bring the case here. The
Commission has stated that, "failure to pay [payphone compensation] in
accordance with the Commission's payphone rules ... constitutes both a
violation of section 276 and an unjust and unreasonable practice in
violation of section 201(b) of the Act."
8. OCI further contends that rule 64.1301(a) is unlawful because it is
retroactive. Specifically, OCI argues that, "for the duration of what
is now referred to as the Interim Period and through 2002, no
effective FCC rules established a payphone compensation obligation
from IXCs." Therefore, according to OCI, the promulgation of these
rules in 2002 (with the release of the Fifth Payphone Compensation
Order) is improper retroactive rulemaking. This very argument,
however, was considered and rejected by the Commission in the Fourth
and Fifth Payphone Compensation Orders, and thus this defense is
conclusively precluded. As the Commission explained there, it was not
engaged in retroactive rulemaking, but rather was implementing the
mandate of the D.C. Circuit, which directed the Commission to set a
new interim rate for dial-around compensation.
9. Verizon therefore has established that it is entitled to rule
64.1301(a) compensation from OCI. The parties in this case have
stipulated to the amount of compensation owed to Verizon.
Specifically, the parties agree that, if the number of Verizon
payphones in service during the Interim Period is applied to the
dial-around compensation amount attributed to OCI in Appendix A of the
Fifth Payphone Compensation Order, OCI's liability to Verizon pursuant
to rule 64.1301(a) is $49,503 before the application of interest. We
so find.
B. OCI's Failure to Pay Interim Period 0+ Compensation Violates Section
201(b) of the Act.
10. We also conclude that OCI violated section 201(b) of the Act by
failing to pay Verizon 0+ compensation pursuant to Commission rule
64.1301(c). That rule provides:
In the absence of a negotiated agreement to pay a different amount, if a
[PSP] was not compensated for 0+ calls originating during the [Interim
Period], ... an [IXC] to which the payphone was presubscribed during this
same time period must compensate the [PSP] in the default amount of
$4.2747 per payphone per month during the same time period ....
It is well established that the complainant in a section 208 formal
complaint proceeding has the burden of establishing, by a preponderance of
the evidence, that the defendant has violated the Act or Commission rules
or orders. Verizon and OCI stipulate that they have not negotiated an
agreement governing compensation for 0+ calls, and that OCI has not paid
Verizon any Interim Period 0+ compensation. Verizon further submitted
uncontroverted evidence that it received no compensation for the 0+ calls
at issue here that originated during the Interim Period. The parties
disagree, however, as to the number of Verizon payphones that were
presubscribed to OCI during the Interim Period.
11. In order to calculate the amount of 0+ compensation owed, Verizon
relies on OCI records establishing, for each month of the Interim
Period, the number of Verizon payphones that delivered at least one 0+
call to OCI. OCI concedes that a payphone that delivered a 0+ call to
OCI in a particular month must have been presubscribed to OCI for at
least some portion of that month, because all 0+ calls are
automatically routed to the payphone's PIC. Based on this evidence,
Verizon proffers three alternative methods for calculating the number
of Verizon payphones presubscribed to OCI. We find that Verizon's
third method accurately calculates the number of such payphones.
12. First, Verizon asks us to assume that if a Verizon payphone delivered
at least one 0+ call at any time during the Interim Period, it must
have been presubscribed to OCI for the entire five and a half months
of that period. Because the rules require monthly compensation
regardless of whether any 0+ calls are carried, Verizon contends that
OCI owes default compensation for each of those phones for each month
of the Interim Period. OCI argues, on the other hand, that the Verizon
payphones could have changed PICs at any time during the Interim
Period because the IXC market was highly competitive, slamming was
pervasive and OCI's market share was in decline. Though Verizon is
correct that compensation is due regardless of whether 0+ calls were
made, the conclusion that a phone was presubscribed to OCI for the
entire five and a half month period based on a single call is too
attenuated, and we decline to base an award of 0+ compensation on this
assumption. As OCI notes, "`where an issue is left in doubt by proof
so that a trier of fact would be required to speculate, the party on
which the burden of proof ultimately rests must lose.'"
13. Second, acknowledging that some of the payphones may not have been
presubscribed to OCI for the entire Interim Period, Verizon asks us to
assume that if at least one 0+ call from a Verizon payphone was
delivered to OCI during a calendar quarter, then the payphone was
presubscribed to OCI for that quarter. For the same reasons, however,
we find that there is an insufficient basis on which to determine that
a phone was presubscribed for a calendar quarter based only upon proof
that the phone was presubscribed to OCI during some point in that
quarter.
14. Third, Verizon asks us to assume that if at least one 0+ call from a
Verizon payphone was delivered to OCI during a particular month, the
payphone was presubscribed to OCI for that entire month. OCI concedes
that these figures "indicate[], by a preponderance of the evidence,
the actual Verizon payphones [for] which OCI was the presubscribed
carrier." OCI nevertheless contends that Verizon has not established
that the payphones remained presubscribed to OCI for the entire month
and that, as a result, no 0+ compensation is due. OCI argues that PIC
changes could occur at any time, and that, therefore, "[i]t is not
possible to tell whether OCI was the presubscribed carrier for the
entire month, or only for a portion of the month."
15. Contrary to OCI's position, however, rule 64.1301(c) does not require
Verizon to prove that its payphones were presubscribed to OCI the
entire month in order to recover. The rule only obligates Verizon to
demonstrate that OCI was the PIC at some point during the month, which
Verizon has done. Again, Verizon bases its claim for compensation on
evidence that establishes the number of payphones that were
presubscribed to OCI for at least a portion of each month of the
Interim Period. Accordingly, we find that Verizon has established by a
preponderance of the evidence the number of its payphones that were
presubscribed to OCI each month of the Interim Period.
16. OCI further argues that Verizon's claim should be denied because
Verizon cannot show, as required by rule 64.1301(c), that it "was not
compensated for 0+ calls originating during the [Interim Period]." OCI
does not assert that another carrier compensated Verizon for the
payphones at issue. Rather, according to OCI, Verizon included a
number of 0+ calls delivered from Verizon payphones to OCI in payphone
call data submitted in the record of the Fifth Payphone Compensation
Order proceeding for the purpose of the Commission's Appendix A
calculations. OCI reasons that Appendix A thus overstates OCI's share
of the payphone call market to the extent of these 0+ calls, thereby
obligating OCI to pay excessive Interim Period dial-around
compensation.
17. OCI's argument is flawed. By definition, the figures included in
Appendix A are utilized solely for purposes of determining an IXC's
liability for dial-around, not 0+, compensation. OCI's position, at
best, is a challenge to Appendix A of the Fifth Payphone Compensation
Order and, therefore, to OCI's obligation to pay dial-around
compensation. Yet, OCI does not argue that Appendix A is unlawful and
that Verizon's claim for dial-around compensation should be denied.
Such a collateral attack on the Fifth Payphone Compensation Order, in
any event, would be time barred.
18. In sum, we find that OCI's defenses fail and that Verizon has
established its claim for Interim Period 0+ compensation pursuant to
rule 64.1301(c). Applying the rule 64.1301(c) default amount to the
number of Verizon payphones that were presubscribed to OCI during the
Interim Period, OCI is liable to Verizon for Interim Period
compensation in the amount of $504,120.00, before interest.
C. Verizon's Claim for PIC Charges is a Mere Collections Action.
19. We dismiss without prejudice Verizon's claim that OCI's failure to pay
Verizon's tariffed PIC charges for the period June 30, 2002 to October
1, 2003 violates section 201 of the Act. As OCI argues, this claim is
indeed a "collections action." Although purporting to allege a
violation of the Act, Verizon in fact states only an action for
recovery of charges due under the terms of its tariff. Unlike the
payphone compensation rules (requiring IXCs to pay), the Commission's
PIC charge regime permitted IXCs to assess the charge on payphone
lines. As the Commission recently reiterated, "the Commission does not
act as a collection agent for carriers with respect to unpaid tariffed
charges."
D. Verizon is Entitled to Pre-Judgment Interest at the Applicable IRS
Rate for Corporate Overpayments.
20. Verizon is entitled to interest on the amounts owed it by OCI pursuant
to rule 64.1301(a) and (c) at the applicable IRS rate for corporate
overpayments, accruing on the second day of the second quarter
following the quarter in which the calls were made. The Commission
concluded in the Fourth and Fifth Payphone Compensation Orders that
PSPs are entitled to interest on Interim Period compensation pursuant
to rule 64.1301(a) and (c) at the applicable IRS rate for corporate
overpayments. The Commission also concluded that, in accordance with
the quarterly payment system applicable to payphone compensation,
interest would begin to accrue on the second day of the second quarter
following the quarter in which the calls were made. Accordingly,
Verizon is entitled to such an award here.
21. OCI argues that the Commission should not award prejudgment interest,
asserting that the "[f]acts described by Verizon do not demonstrate
that an award of interest is warranted ...." Yet, as discussed, the
Commission has already explicitly held that PSPs such as Verizon are
entitled to prejudgment interest. The Commission explained that such
an accrual period was necessary to ensure that PSPs "receive[] full
compensation for this period." Nor does OCI identify any "facts
described by Verizon" which would cause us to make an exception here.
IV. ORDERING CLAUSES
22. ACCORDINGLY, IT IS ORDERED, pursuant to sections 1, 4(i), 4(j), 201,
208, and 276 of the Act, 47 U.S.C. S:S: 151, 154(i), 154(j), 201, 208,
276, and sections 1.720-1.736 and 64.1301 of the Commission's rules,
47 C.F.R. S:S: 1.720-1.736, 64.1301, that the above-captioned formal
complaint is GRANTED IN PART and DISMISSED WITHOUT PREJUDICE IN PART.
23. IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 4(j), 201, 208,
and 276 of the Act, 47 U.S.C. S:S: 151, 154(i), 154(j), 201, 208, 276,
and sections 1.720-1.736 and 64.1301 of the Commission's rules, 47
C.F.R. S:S: 1.720-1.736, 64.1301, that, within 90 days of release of
this Order, OCI shall pay Verizon (a) damages (i) pursuant to
Commission rule 64.1301(a), 47 C.F.R. S: 64.1301(a), in the amount of
$49,503.00, and (ii) pursuant to Commission rule 64.1301(c), 47 C.F.R.
S: 64.1301(c) in the amount of $504,120.00; and (b) interest on such
damages at the applicable IRS rate for corporate overpayments,
accruing on the second day of the second quarter following the quarter
in which the calls at issue were made, and continuing through the date
of payment.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
CONCURRING STATEMENT OF
COMMISSIONER MICHAEL J. COPPS
Re: Contel of the South, Inc. d/b/a Verizon Mid-States, et al. v. Operator
Communications, Inc., File No. EB-05-MD-007
While I agree with the Commission's decision in this case and believe that
the parties are entitled to a decision, I concur in this Order to point
out that the period of uncompensated payphone calls at issue occurred over
10 years ago, and the Defendant has subsequently sold the majority of its
corporate assets and no longer provides telecommunications services. Thus,
the practical impact of today's decision appears to be somewhat limited. I
therefore must question whether the damages awarded to the Complainants at
this late date constitute merely a Pyrrhic victory.
Formal Complaint of Verizon, File No. EB-05-MD-007 (filed May 13, 2005)
("Complaint").
Contel of the South, Inc. d/b/a Verizon Mid-States, Verizon California
Inc., The Micronesian Telecommunications Corporation, Verizon Delaware
Inc., Verizon Florida Inc., Verizon Maryland Inc., Verizon New England
Inc., Verizon New York Inc., Verizon New Jersey Inc., Verizon North Inc.,
Verizon Northwest Inc., Verizon South Inc., Verizon Pennsylvania Inc., GTE
Southwest Inc., Verizon Washington, D.C. Inc., and Verizon West Virginia,
Inc. See Revised Joint Statement of Stipulated Facts, Disputed Facts, and
Key Legal Issues, File No. EB-05-MD-007 (filed Aug. 8, 2005) ("Revised
Joint Statement") at 2, P: 4.
47 U.S.C. S: 208.
47 U.S.C. S:S: 201, 276.
47 C.F.R. S: 64.1301(a), (c).
Revised Joint Statement at 2, P:P: 2, 4.
Revised Joint Statement at 2, P: 2; Complaint at 2, P: 2; Initial Brief of
Operator Communications, Inc., File No. EB-05-MD-007 (filed Sept. 23,
2005) ("OCI Initial Br."), Exhibit 10 (Interrogatory and Document Request
Responses) at Exhibit C (Table).
47 U.S.C. S: 276(b)(1)(A).
Implementation of the Pay Telephone Reclassification and Compensation
Provisions of the Telecommunications Act of 1996, Report and Order, 11
FCC Rcd 20541 (1996) (subsequent history omitted) ("First Payphone
Compensation Order"); Implementation of the Pay Telephone Reclassification
and Compensation Provisions of the Telecommunications Act of 1996, Fourth
Order on Reconsideration and Order on Remand, 17 FCC Rcd 2020 (2002)
(subsequent history omitted) ("Fourth Payphone Compensation Order");
Implementation of the Pay Telephone Reclassification and Compensation
Provisions of the Telecommunications Act of 1996, Fifth Order on
Reconsideration and Order on Remand, 17 FCC Rcd 21274 (2002) (subsequent
history omitted) ("Fifth Payphone Compensation Order").
First Payphone Compensation Order, 11 FCC Rcd at 20549, P: 16 n.34.
First Payphone Compensation Order, 11 FCC Rcd at 20549, P: 16 n.35. "[T]he
term `subscriber 800 calls' includes other sequences of numbers that the
FCC deems, or may deem in the future, the equivalent of subscriber 800
numbers, such as numbers with an `888' code." Id.
Fourth Payphone Compensation Order, 17 FCC Rcd at 2028, P: 21. 0+ calls
include collect, credit card, and third number billing calls. See First
Payphone Compensation Order, 11 FCC Rcd at 20549, P: 16 n.33.
See Fourth Payphone Compensation Order, 17 FCC Rcd at 2020-22, P:P: 1-4;
Fifth Payphone Compensation Order, 17 FCC Rcd at 21276-79, P:P: 2-9.
47 C.F.R. S: 64.1301(a), (c).
See Complaint at 13, P: 50 (alleging that OCI's failure to pay rule
64.1301(a) compensation violates sections 201 and 276 of the Act, and
"Commission orders concerning payphone compensation.") See also Global
Crossing Telecomm. v. Metrophones Telecomm., 127 S.Ct. 1513, 1520 (2007)
(refusing to pay payphone compensation required by Commission rules
violates section 201(b) of the Act).
47 C.F.R. S: 64.1301(a).
Fifth Payphone Compensation Order, 17 FCC Rcd at 21289, P:P: 47-48.
See Fifth Payphone Compensation Order, 17 FCC Rcd at 21313 (stating that
OCI is to pay $0.01772023 per payphone per month) and 21315 (stating that
ONCOR Communications is to pay $0.00004209 per payphone per month). OCI
admits, for the purposes of this litigation, that it is responsible for
the obligations attributed to "ONCOR Communications" in Appendix A. See
Revised Joint Statement at 7, P: 34.
See Revised Joint Statement at 5, P:P: 25-26, 8-9, P:P: 38, 40-41. See
Complaint, Tab F (Fouke Decl.) at 3, P: 9.
Specifically, the parties agree that, (i) 493,230 Verizon payphones were
in service in the second quarter of 1997, (ii) 479,272 Verizon payphones
were in service in the third quarter of 1997, and (iii) 514,895 Verizon
payphones were in service in the fourth quarter of 1997. See Final [sic]
Brief in Support of Verizon's Complaint, File No. EB-05-MD-007 (filed
Sept. 23, 2005) ("Verizon Initial Br.") Attachment 4 (Joint Statement of
Additional Stipulated Facts) at 1, P: 1.
Answer and Affirmative Defenses of Operator Communications, Inc., File No.
EB-05-MD-007 (filed June 23, 2005) ("Answer"), Tab D (Legal Analysis) at
12-13 (citing Illinois Bell Telephone Co. v. AT&T, Memorandum Opinion and
Order, 4 FCC Rcd 5268, recon. denied, 4 FCC Rcd 7759 (1989), Beehive
Telephone, Inc. v. Bell Operating Cos., Memorandum Opinion and Order, 10
FCC Rcd 10562 (1995), and Long Distance/USA, Inc. v. Bell Telephone Co. of
Pa., Memorandum Opinion and Order, 7 FCC Rcd 408 (Com. Carrier Bur.
1992)); OCI Initial Br. at 32-34 (same).
See U.S. TelePacific Corp. v. Tel-America of Salt Lake City, Inc.,
Memorandum Opinion and Order, 19 FCC Rcd 24552, 24556 n.28 (2004) ("[T]he
Commission does entertain claims to recover unpaid payphone compensation
pursuant to section 276 of the Act . . . and sections 64.1300 through
64.1320 of the Commission's rules . . . . Unlike the statutory provisions
and Commission rules regarding access charges - which speak only to the
duties of the charging carrier and not to the duties of the customer -
section 276 of the Act and section 64.1300 of the Commission's rules
specifically impose an obligation on the `customer' to pay payphone
compensation charges. Therefore, a failure to pay payphone compensation
charges constitutes a violation of the Act itself, which is actionable
under section 208.")
See Illinois Bell Telephone Co., 4 FCC Rcd at 5270, P:P: 15-18 (dismissing
complaints alleging that defendant failed to pay tariffed rates for
special access services on the ground that the Commission's complaint
procedure is not "a collection mechanism for carriers"); Beehive
Telephone, Inc., 10 FCC Rcd at 10569, P: 37, n.90 (dismissing
cross-complaint for amounts billed pursuant to tariff); Long Distance/USA,
Inc., 7 FCC Rcd at 412, P: 13 (dismissing cross-complaint seeking payment
for tariffed switched access service charges). See generally U.S.
Telepacific Corp., 19 FCC Rcd 24552.
In re Pay Telephone Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, Report and Order, 18 FCC Rcd 19975, 19990,
P: 32 (2003) (subsequent history omitted). Accord APCC Services, Inc. v.
NetworkIP, LLC, Order on Review, 21 FCC Rcd 10488, 10494-95, P: 16 (2006).
See Global Crossing Telecomm., 127 S.Ct. at 1520 (violation of Commission
payphone compensation rules violates section 201(b)).
Answer Tab D (Legal Analysis) at 3-4.
See Answer Tab C (Summary) at i, Tab D (Legal Analysis) at 2-5, Tab E
(Answer and Affirm. Defenses) at 14-15, P:P: 76-78.
See Fourth Payphone Compensation Order, 17 FCC Rcd at 2022, P: 5 n.18;
Fifth Payphone Compensation Order, 17 FCC Rcd at 21294, P: 62 (citing Ill.
Pub. Telecomm. Ass'n v. FCC, 117 F.3d 555, 565, clarified on reh'g, 123
F.3d 693 (D.C. Cir. 1997), cert. denied sub nom. Virginia State Corp.
Comm'n v. FCC, 523 U.S. 1046 (1998), in which the court, in vacating the
Commission's rule governing compensation for dial-around calls, stated,
"The FCC must now set a new interim rate ...").
See Verizon Initial Br. Attachment 4 (Joint Statement of Additional
Stipulated Facts) at 1, P: 2.
Because Verizon will receive all the relief to which it is entitled under
section 201(b) of the Act, we dismiss without prejudice Verizon's claims
under section 276 of the Act and Commission orders.
See Complaint at 13, P: 47 (alleging that OCI's failure to pay rule
64.1301(c) compensation violates sections 201 and 276 of the Act, and
"Commission rules concerning OCI's payphone compensation").
47 C.F.R. S: 64.1301(c).
Hi-Tech Furnace Systems, Inc. v. FCC, 224 F.3d 781, 787 (D.C. Cir. 2000)
(affirming the Commission's decision to impose the burden of proof on the
complainant). See Consumer.Net v. AT&T Corp, Order, 15 FCC Rcd 281,
284-85, P: 6 (1999); Implementation of the Telecommunications Act of 1996,
Amendment of Rules Governing Procedures to be Followed when Formal
Complaints are Filed Against Common Carriers, Report and Order, 12 FCC Rcd
22497, 22615, P: 291 (1997).
See Revised Joint Statement at 5, P:P: 25-26.
See Complaint, Tab F (Fouke Decl.) at 3, P: 9.
See Verizon Initial Br. at 2 and Attachment 3 (Fouke Decl.) at 2-3, P:P:
5-7; Opposition Brief of Verizon, File No. EB-05-MD-007 (filed Oct. 7,
2005) ("Verizon Opp. Br.") at 3; Reply Brief of Verizon, File No.
EB-05-MD-007 (filed Oct. 14, 2005) ("Verizon Reply Br.") at 1; OCI Initial
Br. at 30-31, Exhibit 10 (OCI's Responses to Interrogatory and Document
Production Requests) at 2-3. Specifically, in each month of the Interim
Period, OCI carried at least one 0+ call from the following number of
Verizon payphones: April: 21,513 payphones; May: 21,970 payphones; June:
21,424 payphones; July: 20,721 payphones; August: 20,033 payphones;
September: 18,738 payphones; and October: 18,456 payphones. Id. OCI
subsequently stated that its initial calculation was incorrect, and that
it carried a slightly smaller number of 0+ calls from Verizon payphones
during the Interim Period. See Opposition Brief of Operator
Communications, Inc., File No. EB-05-MD-007 (filed Oct. 7, 2005) ("OCI
Opp. Br.") at 8 and Exhibit A. OCI's attempt to revise the record was not
substantiated by a declaration or affidavit, and therefore must be
rejected.
See OCI Initial Br. at 1, 30, Exhibit 10 (OCI's Responses to Interrogatory
and Document Production Requests) at 2; OCI Opp. Br. at 6.
See Verizon Initial Br. at 5-6; Verizon Opp. Br. at 2-7; Verizon Reply Br.
at 1-2.
Id.
See Supplemental Responses to Answer and Affirmative Defenses, File No.
EB-05-MD-007 (filed June 30, 2005) ("Supp. Answer"), Tab 1 (Hargrave
Decl.) at 2-3, P:P: 6-10; OCI Initial Br. at 6-7, 11, 31-32; OCI Opp. Br.
at i-ii, 3-8; Letter from Danny A. Adams, counsel OCI, to Secretary, FCC,
File No. EB-05-MD-007 (filed Oct. 14, 2005) ("OCI Reply Br.") at 2-3.
OCI Opp. Br. at 7 (citing Clark v. Wilbur, 913 F. Supp. 463 (S.D. W. Va.
1996), aff'd, 139 F.3d 888 (4th Cir. 1998)).
See Verizon Initial Br. 7, Tab 3 (Fouke Decl) at 4, P: 11.
See Verizon Initial Br. at 7-9, Attachment 3 (Fouke Decl.) at 5-6, P: 15;
Verizon Opp. Br. at 7-9; Verizon Reply Br. at 1-2.
See Verizon Initial Br. at 9-11; Verizon Opp. Br. at 3, 9; Verizon Reply
Br. at 1-2.
OCI Initial Br. at 30-31 (emphasis in original).
See OCI Initial Br. at 28 ("Although OCI does not dispute that some
unknown number of Verizon payphones were presubscribed to OCI during the
Interim Period, the exact number is not established by Verizon"); OCI Opp.
Br. at 7-8; OCI Reply Br. at 1-2.
OCI Opp. Br. at 7-8.
47 C.F.R. S: 64.1301(c).
See 47 C.F.R. S: 64.1301(c) ("an [IXC] to which the payphone was
presubscribed during this same time period must compensate the [PSP] ...
per payphone per month during the same time period . . .").
47 C.F.R. S: 64.1301(c).
See Answer, Tab D (Legal Analysis) at 6 and Exhibit 1 (Letter from Verizon
to Secretary, FCC); OCI Initial Br. at 16-17, 23.
See Answer, Tab D (Legal Analysis) at 6-7 ("Because this amount [due under
Commission rule 64.1301(a)] is inflated by an amount reflecting OCI's 0+
calls, OCI compensates Verizon for 0+ traffic through this [rule
64.1301(a)] obligation .... Therefore, Verizon's claim for 0+ compensation
should be dismissed"); OCI Initial Br. at 16-17, 23; OCI Opp. Br. at 9
n.29.
See 47 C.F.R. S: 64.1301(a) ("each entity listed in Appendix A of the
[Fifth Payphone Compensation Order] must pay default compensation to
[PSPs] for payphone access code calls and payphone subscriber 800 calls
for the [Interim] [P]eriod...") (emphasis added).
See 47 U.S.C. S: 402(a); 28 U.S.C. S: 2344 (any party "aggrieved" by a
"final [agency] order may, within 60 days after its entry, file a petition
to review the order in the court of appeals wherein venue lies").
OCI also argues that Verizon's rule 64.1301(c) claim should be denied
because it is a "collection action,", and because rule 64.1301(c) is
retroactive. See Answer Tab C (Summary) at i, Tab D (Legal Analysis) at
2-5, Tab E (Answer and Affirm. Defenses) at 14-15, P:P: 76-78; OCI Initial
Br. at 32-34. We reject these arguments for the same reason we reject
OCI's virtually identical arguments with respect to Verizon's rule
64.1301(a) claim. See supra at P:P: 7-8.
See Verizon Initial Br., Attachment 3 (Fouke Decl.), Exhibit D (Table
entitled "0+ Compensation Amounts").
See Complaint at 14, P: 53 (alleging that OCI violated section 201of the
Act and Commission orders by refusing to comply with Verizon's tariffed
PIC charges).
See Answer Tab D (Legal Analysis) at 12-13; OCI Initial Br. at 35.
See supra at P: 4.
See Complaint Tab E (Legal Analysis) at 16 (citing Access Charge Reform,
First Report and Order, 12 FCC Rcd 15982, 16019, P: 92 (1997); Access
Charge Reform, Order on Reconsideration, 18 FCC Rcd 12626, 12627, P: 3
(2003)).
U.S. TelePacific Corp., 19 FCC Rcd at 24557, P: 11. We dismiss without
prejudice because Verizon may seek to recover PIC charges from OCI in an
appropriate forum, including federal district court, if it so chooses. See
id. at 24555-56, P: 8. Cf. Global Crossing Telecomm., 127 S.Ct. at 1520
(refusing to pay payphone compensation required by Commission rules
violates section 201(b) of the Act); NetworkIP, 12 FCC Rcd at 10492-95,
P:P: 12-16 (same).
See Fourth Payphone Compensation Order, 17 FCC Rcd at 2032, P: 31
("interest shall be paid on interim ... period compensation at the rate
established under Section 6621 of the Internal Revenue Code, 26 U.S.C. S:
6621"); id. at 2035, P: 37 ("the interest rate applied to the interim
period ... [is] the applicable interest rate set by the IRS pursuant to
Section 6621 of the Internal Revenue Code for refund obligations"); id. at
2032 n.89 ("Appendix C [of this order] provides IRS rates for the last
quarter of 1996 through March 31, 2002 ..."); id. at Appendix C (setting
forth the IRS rate for overpayments); Fifth Payphone Compensation Order,
17 FCC Rcd at 21307-08, P:P: 99-100 (refusing to reconsider the Fourth
Payphone Compensation Order ruling that the IRS-prescribed interest rate
applies to late payment of Interim Period compensation).
See Fifth Payphone Compensation Order, 17 FCC Rcd at 21308, P: 101("[T]he
IRS-prescribed interest rate will only begin to accrue after the date
payment normally would have been rendered under the quarterly payment
system applicable to payphone compensation. Consistent with our
assumptions under prior orders, the IRS-prescribed interest rate for
payments that should have been made the first quarter of the year will
begin accruing on July 2 of the same year, for the second quarter of the
year on October 2 of that same year, for the third quarter on January 2 of
the next year, and for the fourth quarter on April 2 of the next year.")
(citations omitted).
Answer Tab D (Legal Analysis) at 13-14.
In re 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, 2636, P:
197 n.427 (1999).
OCI argues further that pre-judgment interest should not be awarded
because "the Commission delayed for five years before establishing any
compensation obligation in the first place." Answer Tab D (Legal Analysis)
at 13-14. We reject this argument for the same reasons we rejected OCI's
argument that rules 64.1301(a) and (c) are unlawfully retroactive. See
supra at P: 8.
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Federal Communications Commission FCC 07-227
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Federal Communications Commission FCC 07-227