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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                         )                               
                                                                         
                                         )                               
     In the Matter of                        File No. EB-10-TC-395       
                                         )                               
     Locus Telecommunications, Inc.          NAL/Acct. No. 201132170025  
                                         )                               
     Apparent Liability for Forfeiture       FRN: 0010729515             
                                         )                               
                                                                         
                                         )                               


                  NOTICE OF APPARENT LIABILITY FOR FORFEITURE

   Adopted: August 26, 2011 Released: September 1, 2011

   By the Commission:

   I. INTRODUCTION

    1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
       that Locus Telecommunications, Inc. ("Locus" or "Company") has
       apparently willfully and repeatedly violated section 201(b) of the
       Communications Act of 1934, as amended ("Communications Act" or
       "Act"), by deceptively marketing prepaid calling cards. Based upon our
       review of the facts and surrounding circumstances, Locus appears to
       target its marketing to immigrants with claims that, for a card
       costing just a few dollars, buyers can make hundreds if not thousands
       of minutes of calls to their native countries - when in fact, for that
       price, they will be able to use only a fraction of those minutes, due
       to Locus's assessment of multiple fees and surcharges that are not
       clearly and conspicuously disclosed to consumers. Accordingly, we find
       that Locus Telecommunications, Inc. has apparently violated section
       201(b) of the Act, and is apparently liable for a proposed forfeiture
       in the amount of five million dollars ($5,000,000).

   II. BACKGROUND

    2. A prepaid calling card is a retail product for which the consumer pays
       a specific dollar amount and which enables that customer to make
       domestic and/or international telephone calls. Such cards are
       frequently marketed to immigrant communities for calling a variety of
       international destinations and are especially popular with these
       communities, where many depend on prepaid calling cards to stay in
       touch with family and friends in their home countries. The cards are
       typically sold at retail in denominations of $2, $3, and $5 at
       newsstands and in grocery and convenience stores. Companies often
       market prepaid cards under a variety of brand names and advertise them
       to consumers primarily using posters displayed in retail locations,
       and in some cases, through radio and television advertising.

    3. The Enforcement Bureau began its investigation of Locus by directing a
       letter of inquiry to the Company requesting information and documents
       relating to its prepaid calling card services. According to its
       initial response, Locus provides long distance telecommunications
       service through the use of prepaid calling cards. Locus has developed
       over 500 different long distance calling cards "tailored to meet the
       needs of specific market segments." Locus sells its prepaid calling
       cards through a national distributor network that reaches over 70,000
       retailers. The retail vendors sell the cards to consumers using
       marketing posters that Locus designs and distributes.

    4. As part of its LOI response, Locus provided samples and print sheets
       of the posters and calling cards sold in 2009 and 2010. A typical
       Locus poster includes the name of the calling card (e.g., "Go," "Hey,"
       and "my Friend"), the name of the telecommunications provider whose
       network carries the calls (e.g., Geo Telecom, Dulce Telecom), and
       representations about the number of minutes a consumer will receive
       when calling various countries and/or cities. The number of calling
       minutes listed on the sample of posters provided by Locus usually
       appears in large font size and/or bright colors. Additionally, the
       posters contain boxes listing various calling destinations, along with
       the number of calling minutes a consumer will receive to those
       destinations using the advertised calling card of a specified dollar
       value (e.g., " Mexico 2500 minutes $5"; "1000 minutes $2"). Appearing
       on the bottom of the posters is a disclosure in very small font size
       relating to certain fees and surcharges that will apply when using the
       cards, including post-call fees, semi-monthly charges, and other fees
       assessed when using toll-free access numbers or calling from
       payphones.

    5. Locus's calling cards themselves generally come in two parts: a top
       portion (or "hang tag") and a bottom portion, the size of a credit
       card, that can be separated from the top. The front of the cards
       identifies the name and value of the card (e.g., $2, $3, $5), and in
       most instances, whether the cards offer local and/or toll-free access.
       The back of the top portion of the cards includes a disclosure about
       fees. For example, the disclosure on Locus's $2 "The Card" calling
       card reads as follows:

   Calls are billed in one minute increments. The following surcharges and
   fees will have the effect of reducing total minutes available if not used
   on a single call: $0.99 charge per call using a payphone; Post call fee of
   $0.49 per minute; $0.99 weekly charge within 24 hours of first use; $1.50
   charge for directory assistance (max duration 3 min). For latest rates and
   fees, please contact our customer service number. Card expires 30 days
   after first use. Network services are provided by Geo Telecom.

   The back of the bottom portion of the card includes a scratch off area
   that hides the Personal Identification Number ("PIN") necessary to use the
   card, as well as a series of local access numbers, a toll-free access
   number, and a customer service number.

    6. The poster used to market Locus's $2 "The Card" card includes the
       following disclosure (which differs from the one that appears on the
       card itself):

   Advertised Rates Based on a Single Initial Call Using Local Access Numbers

   Rates and fees are subject to change after validation date. Minutes and
   rates are based on a single call from the contiguous United States to a
   non-cellular destination unless otherwise advertised. Domestic rates apply
   only to calls within the contiguous United States. Calls made using a
   toll-free access number on a local access card are billed at a higher per
   minute rate. Calls are billed in one minute increments. The following
   surcharges and fees will have the effect of reducing total minutes
   available if not used on a single call: 99-c- charge per call using a
   payphone; Post call fee of 49-c- per minute; 99-c- weekly charge after 24
   hours of first use. $1.50 charge for directory assistance (max duration 3
   min). Card expires 30 days after the date of first use. Network services
   are provided by Geo Telecom.

   III. DISCUSsION

          A. Apparent Violation of Section 201(b) of the Act

    7. Section 201(b) of the Act, states, in pertinent part, that "[a]ll
       charges, practices, classifications, and regulations for and in
       connection with [interstate or foreign] communication service, shall
       be just and reasonable, and any such charge, practice, classification,
       or regulation that is unjust or unreasonable is declared to be
       unlawful." The Commission has found that unfair and deceptive
       marketing practices by interstate common carriers constitute unjust
       and unreasonable practices under section 201(b). A practice that
       "convey[s] insufficient information as to the company's identity,
       rates, practices, and range of services" may constitute a violation of
       section 201(b). Thus, a carrier that fails sufficiently to convey
       material information, such as rates, about its prepaid calling card
       services violates section 201(b) of the Act.

    8. We find that Locus has apparently violated section 201(b) of the Act
       because it deceptively represents that buyers of its cards can use
       hundreds if not thousands of minutes to make calls to foreign
       countries for just a few dollars. In truth and in fact, buyers can use
       only a fraction of those minutes for calls, because Locus applies a
       variety of fees and surcharges that quickly deplete the card. Locus
       purports to disclose these fees and surcharges, but the fine print
       "disclosures" contradict the express and much more prominent claims in
       the main portion of the marketing materials. Moreover, even if the
       disclosures of the various fees and surcharges were not contradictory,
       they are in small print and not clear or conspicuous in relation to
       the claim of total available minutes that the disclosure is intended
       to modify, and the disclosure otherwise "convey[s] insufficient
       information as to the company's identity, rates, practices, and range
       of services."

    9. Locus uses posters displayed in retail locations to market its prepaid
       calling card services to consumers. As indicated above, Locus
       represents on its posters that consumers who purchase its cards will
       receive a specified number of calling minutes to specific countries or
       cities for a set price (e.g., to Guadalajara, 2500 minutes for $5;
       1000 minutes for $2). Although Locus's prepaid cards are often
       marketed as providing hundreds or thousands of minutes, the total
       number of minutes actually received by the consumer is significantly
       less once the various fees are applied, and if the consumer attempts
       to use the card to make multiple calls. In fact, when applied after
       the first call, Locus's fees and surcharges can wipe out all remaining
       minutes on its $2 calling cards.

   10. Locus's marketing materials and cards make certain disclosures about
       these fees, but they conflict with the express statements of how many
       calling minutes are available, and they are not adequate to counter
       the express and otherwise unqualified claim that consumers will be
       able to make hundreds if not thousands of minutes of calls for the
       marketed rate. As a preliminary matter, the font size of the
       advertised minutes and rate information completely dwarfs the
       disclosure. As described above, Locus's posters typically advertise
       the number of calling minutes offered to certain countries in large,
       colorful, simple text, which is prominently displayed at the top or
       center of the poster. This information is not qualified in any way;
       i.e., there is no suggestion that the consumer will receive "up to"
       the specified number of minutes, and no indication that the consumer
       must read the small print at the bottom in order to determine what he
       or she is actually purchasing. The main part of the poster stands in
       stark contrast to the disclosures regarding additional fees and
       surcharges, which are at the bottom of the posters in significantly
       smaller type and easily overlooked. While disclosures regarding fees
       and surcharges are also printed on the top portion (or "hang tag") of
       Locus's cards, they are similarly printed in extremely small font and
       difficult to read. Further, because the calling card is meant to be
       torn away from the hang tag for ease of carrying in a wallet and
       customer use, the disclosures on the hang tag afford the consumer
       little information at the actual point of use. Disclosures in fine
       print and in materials that reasonable consumers may not read or use
       are ineffective to ensure that consumers have an accurate and informed
       understanding of an advertising claim. We therefore conclude that
       Locus's disclosures are not clear and conspicuous to the average
       consumer.

   11. Additionally, even if Locus's disclosures were more prominent, we find
       that they do not provide the information necessary for a consumer to
       determine when and how the fees and surcharges will affect the number
       of calling minutes offered. To illustrate this point, we use the
       disclosure example in paragraph 6 above for Locus's $2 "The Card"
       card, which is typical of the disclosures found in Locus's marketing
       materials. First, despite advertising on its posters a specific number
       of minutes for a set price, Locus includes a disclosure that states
       that "calls made using a toll-free access number on a local access
       card are billed at a higher per minute rate." The poster does not
       specify what "higher" rates will apply. Moreover, Locus fails to
       disclose that higher rates apply when using 800 access numbers on the
       card itself-a card that clearly advertises on the front that it offers
       local and toll-free access. In addition, the 800 number on the card is
       in bold, effectively encouraging the consumer to dial that number to
       access service, rather than dial the local access numbers provided.
       Given that a typical consumer would expect the 800 access number, like
       other 800 numbers, to be toll-free, this lack of clarity is
       particularly misleading. We therefore find that the disclosures are
       not in the "clear and unambiguous language" that the Commission has
       said is needed to ensure that they are effective.

   12. Locus's poster disclosures note that "[m]inutes and rates are based on
       a single call...and that "surcharges and fees will have the effect of
       reducing total minutes available if not used on a single call." We
       find that these statements are inadequate to inform consumers fully
       about the possible reduction in the number of advertised minutes, the
       circumstances under which those minutes will not be received, or how
       to calculate the actual number of minutes provided.

   13. To give context to why these disclosures are inadequate and the extent
       of the gulf between a consumer's reasonable expectation (based on
       Locus's marketing materials) and the consumer's actual experience
       (based on application of Locus's fees), consider the card that one of
       Locus's posters advertises as offering 1000 minutes of calling time to
       Mexico for $2. If a consumer makes a 60-minute call to Mexico, one
       would reasonably expect there to be 940 minutes remaining on the card.
       However, the card disclosure suggests that once the initial call is
       completed, a post-call fee of $0.49 cents per minute applies. In
       addition, a weekly fee of $0.99 applies within 24 hours of the first
       call. Thus, after one 60-minute call, potential post-call fees of
       $30.39 would exhaust a card that was advertised to provide 1000
       minutes. According to Locus, the advertised "minutes and rates are
       based on a single call." In other words, the only possible way a
       consumer could use all of the 1000 advertised minutes would be to make
       a single 16-hour call from a local access number - a duration so
       lengthy as to make such calls highly improbable by the typical
       consumer.

   14. Information regarding the existence, amount, and application of fees
       that affect the value of a calling card is material to consumers when
       deciding to purchase cards. The failure to provide such information
       clearly and conspicuously, because it deprives consumers of material
       information needed to make a purchasing decision, is a deceptive
       marketing practice. As the Commission stated in NOS, if a consumer
       must take a series of complicated and confusing steps to try and
       calculate the charges and calling time based on the disclosure
       provided, such disclosure almost certainly would be misleading to
       consumers. Such a practice, then, would be unjust and unreasonable
       under section 201(b).

   15. We find the marketing materials used by Locus to sell its prepaid
       calling cards are misleading and deceptive regarding the rates and
       charges applicable to its service offerings. In addition, we find that
       Locus failed to disclose, in any meaningful way, material information
       about its rates, charges and practices at the point of sale, resulting
       in substantial harm to consumers who purchased its prepaid calling
       cards. Accordingly, we find that Locus has apparently engaged in
       unjust or unreasonable marketing practices in violation of section
       201(b) of the Act.

     A. Proposed Forfeiture Pursuant to Section 503(b) of the Act

   16. Section 503(b)(1) of the Act states that any person who willfully or
       repeatedly fails to comply with any provision of the Act or any rule,
       regulation, or order issued by the Commission, shall be liable to the
       United States for a forfeiture penalty. Section 503(b)(2)(B) of the
       Act authorizes the Commission to assess a forfeiture of up to $150,000
       for each violation, or each day of a continuing violation, up to a
       statutory maximum of $1,500,000 for a single act or failure to act. In
       determining the appropriate forfeiture amount, we consider the factors
       enumerated in section 503(b)(2)(E) of the Act, including "the nature,
       circumstances, extent and gravity of the violation, and, with respect
       to the violator, the degree of culpability, any history of prior
       offenses, ability to pay, and such other matters as justice may
       require."  Although the forfeiture guidelines do not establish a
       forfeiture amount for unjust or unreasonable practices, such as
       deceptive marketing practices, the guidelines do state that, ". . .
       any omission of a specific rule violation from the. . . [forfeiture
       guidelines]. . . should not signal that the Commission considers any
       unlisted violation as nonexistent or unimportant." The Commission
       retains the discretion to depart from the guidelines and issue
       forfeitures on a case-by-case basis, under its general forfeiture
       authority contained in section 503 of the Act.

   17. In NOS, the Commission found that unfair and deceptive marketing
       practices by interstate common carriers constitute unjust and
       unreasonable practices within the meaning of section 201(b) of the
       Act," and concluded that each instance of such practices constituted a
       separate violation of section 201(b). The Commission noted that it had
       previously assessed a forfeiture amount of $40,000 for each instance
       in which a carrier engaged in an unjust and unreasonable telemarketing
       practice in violation of section 201(b). It explained, however, that
       "a straightforward application of a $40,000 base forfeiture amount
       would likely produce a proposed forfeiture in the millions of
       dollars." Rather, taking into account the number of violations
       attributed to the two companies involved in the case, the Commission
       determined that a $500,000 forfeiture amount per company was
       sufficient to protect the interests of consumers and to deter future
       violations of the Act.

   18. We find that each card that Locus marketed using deceptive advertising
       constitutes an independent unjust and unreasonable practice, and thus
       a separate and distinct apparent violation of section 201(b) of the
       Act. Given the thousands of cards that Locus appears to have marketed,
       there is an extensive number of apparent violations in this case for
       which the Commission is empowered to propose a penalty. While the
       proposed forfeiture is higher than the proposed forfeiture in NOS,
       weighing the facts before us, and taking into account the extent and
       gravity of Locus's egregious conduct, as well as its culpability and
       information in the current record about its revenues, we find that a
       total proposed forfeiture amount of $5,000,000 is appropriate under
       the specific circumstances of this case. The proposed forfeiture
       clearly must protect the interests of consumers and serve as an
       adequate deterrent. A lesser penalty would be inappropriate in light
       of Locus's failure to adequately provide material information about
       its rates to thousands of consumers who purchased the Company's
       prepaid cards. Moreover, in determining the amount of a proposed
       penalty, we seek to "guarantee that forfeitures issued against large
       or highly profitable entities are not considered merely an affordable
       cost of doing business." While we could propose a higher forfeiture
       based on Locus's 2010 revenues, we believe the forfeiture we propose
       today is sufficient to protect the interests of consumers and serve as
       an adequate deterrent. In the event Locus continues to engage in
       conduct that apparently violates section 201(b)'s prohibition against
       unjust and unreasonable practices, such apparent violations could
       result in future NALs proposing substantially greater forfeitures and
       revocation of Locus's operating authority. Other prepaid calling card
       providers are also on notice that practices such as those engaged in
       by Locus are unjust and unreasonable, and that we may propose more
       significant forfeitures in the future as high as is necessary, within
       the range of our statutory authority, to ensure that such companies do
       not engage in deceptive marketing practices.

   IV. CONCLUSION

   19. We have determined that Locus Telecommunications, Inc. apparently
       violated section 201(b) of the Act. We have further determined that
       Locus Telecommunications, Inc. is apparently liable for a forfeiture
       in the amount of $5,000,000.

   V. ORDERING CLAUSES

   20. Accordingly, IT IS ORDERED that, pursuant to section 503(b)(2)(B) of
       the Communications Act of 1934, as amended, 47 U.S.C. S: 503(b)(2)(B),
       and section 1.80 of the Commission's rules, 47 C.F.R. S: 1.80, Locus
       Telecommunications, Inc. is hereby NOTIFIED of this APPARENT LIABILITY
       FOR FORFEITURE in the amount of $5,000,000, for willful and repeated
       violations of section 201(b) of the Act, 47 U.S.C. S: 201(b).

   21. IT IS FURTHER ORDERED that, pursuant to section 1.80 of the
       Commission's rules, within thirty (30) days of the release date of
       this Notice of Apparent Liability for Forfeiture, Locus
       Telecommunications, Inc. SHALL PAY the full amount of the proposed
       forfeiture or SHALL FILE a written statement seeking reduction or
       cancellation of the proposed forfeiture.

   22. Payment of the forfeiture must be made by check or similar instrument,
       payable to the order of the Federal Communications Commission. The
       payment must include the NAL/Account Number and FRN referenced in the
       caption. 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. Payment by wire transfer may be made to ABA Number 021030004,
       receiving bank TREAS/NYC, and account number 27000001. For payment by
       credit card, an FCC Form 159 (Remittance Advice) must be submitted.
        When completing the FCC Form 159, enter the NAL/Account number in
       block number 23A (call sign/other ID), and enter the letters "FORF" in
       block number 24A (payment type code). Locus Telecommunications, Inc.
       will also send electronic notification to Johnny.Drake@fcc.gov on the
       date said payment is made. Requests for full payment under an
       installment plan should be sent to: Chief Financial Officer --
       Financial Operations, 445 12th Street, S.W., Room 1-A625, Washington,
       D.C.  20554.   Please contact the Financial Operations Group Help Desk
       at 1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions
       regarding payment procedures.

   23. The response, if any, must be mailed both to: Marlene H. Dortch,
       Secretary, Federal Communications Commission, 445 12th Street, SW,
       Washington, DC 20554, ATTN: Enforcement Bureau - Telecommunications
       Consumers Division; and to Richard Hindman, Chief, Telecommunications
       Consumers Division, Enforcement Bureau, Federal Communications
       Commission, 445 12th Street, SW, Washington, DC 20554, and must
       include the NAL/Acct. No. referenced in the caption. Documents sent by
       overnight mail (other than United States Postal Service Express Mail)
       must be addressed to: Marlene H. Dortch, Secretary, Federal
       Communications Commission, Office of the Secretary, 9300 East Hampton
       Drive, Capitol Heights, MD 20743. Hand or messenger-delivered mail
       should be directed, without envelopes, to: Marlene H. Dortch,
       Secretary, Federal Communications Commission, Office of the Secretary,
       445 12th Street, SW, Washington, DC 20554 (deliveries accepted Monday
       through Friday 8:00 a.m. to 7:00 p.m. only). See
       www.fcc.gov/osec/guidelines.html for further instructions on FCC
       filing addresses.

   24. The Commission will not consider reducing or canceling a proposed
       forfeiture in response to a claim of inability to pay unless the
       petitioner submits: (1) federal tax returns for the most recent
       three-year period; (2) financial statements prepared according to
       generally accepted accounting practices; or (3) some other reliable
       and objective documentation that accurately reflects the petitioner's
       current financial status. Any claim of inability to pay must
       specifically identify the basis for the claim by reference to the
       financial documentation submitted.

   25. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
       for Forfeiture shall be sent by Certified Mail Return Receipt
       Requested and First Class mail to Locus Telecommunications, Inc.,
       Attention: Jason Chon, CEO; John Chough, Chairman; and Sam Lee,
       President, 111 Sylvan Avenue, Englewood Cliffs, NJ 07632; and to David
       H. Soloman and Robert G. Kirk, Wilkinson, Barker, Knauer, LLP, 2300 N
       Street, N.W., Suite 700, Washington, DC 20037.

   FEDERAL COMMUNICATIONS COMMISSION

   Marlene H. Dortch
   Secretary

   Locus is a Delaware corporation, whose principal address is 111 Sylvan
   Avenue, Englewood Cliffs, New Jersey 07632. According to Locus, Locus is a
   subsidiary of KDDI America, Inc, which in turn is a wholly-owned
   subsidiary of KDDI Corporation. Jason Chon, CEO; John Chough, Chairman;
   and Sam Lee, President, are listed as contact persons for Locus.
   Accordingly, all references in this NAL to "Locus" also encompass the
   foregoing individuals and all other principals and officers of Locus, as
   well as the corporate entity itself.

   47 U.S.C. S: 201(b).

   See Letter from Colleen K. Heitkamp, Chief, Telecommunications Consumers
   Division, Enforcement Bureau, Federal Communications Commission, to Locus
   Telecommunications, Inc., April 2, 2010 ("LOI").

   See Letter from David H. Solomon and Robert G. Kirk, Counsel for Locus
   Telecommunications, Inc., to Ms. Colleen K. Heitkamp, Chief,
   Telecommunications Consumers Division, Enforcement Bureau, Federal
   Communications Commission, May 17, 2010 ("Response").

   See id. at 1.

   See Locus Communications,
   http://www.locustelecom.com/calling_card/main.shtml (last visited June 20,
   2011).

   Locus also provided a handful of audio and video advertisements for its
   cards. See also Letter from David H. Solomon and Robert G. Kirk, Counsel
   for Locus Telecommunications, Inc. to Richard A. Hindman, Chief,
   Telecommunications Consumers Division, Enforcement Bureau, Federal
   Communications Commission, January 21, 2011 ("Supplemental Response").

   See, e.g., "Pan," "Hey," and "My Friend" posters, submitted with Response.

   See, e.g., "Pan" poster, submitted with Response.

   See "The Card" $2 card, submitted with Supplemental Response.

   See "The Card" poster with advertised rates valid until January 30, 2011,
   submitted with Supplemental Response.

   47 U.S.C. S: 201(b).

   See NOS Communications, Inc., Notice of Apparent Liability for Forfeiture,
   16 FCC Rcd 8133 (2001) ("NOS") (finding that the companies engaged in
   deceptive marketing of their interstate communication services by failing
   to disclose clearly and conspicuously material facts regarding their
   promotional plan offerings and pricing methodology, in violation of
   section 201(b)); Business Discount Plan, Inc., Order of Forfeiture, 15 FCC
   Rcd 14461 (2000) ("BDP"), recon. granted in part and denied in part, 15
   FCC Rcd 24396 (2000) (find that the company violated section 201(b) by
   using unjust and unreasonable telemarketing practices such as
   misrepresenting the nature of its service offerings); Telecommunications
   Research & Action Center & Consumer Action, Memorandum Opinion and Order,
   4 FCC Rcd 2157 (Com.Car.Bur. 1989) ("TRAC") (recognizing that section
   201(b) provides a cause of action against carriers for failing to convey
   sufficient information about their rates, practices and range of
   services). See also Joint FCC/FTC Policy Statement For the Advertising of
   Dial-Around And Other Long Distance Services To Consumers, 15 FCC Rcd 8654
   (2000) ("Joint Advertising Statement").

   See TRAC, 4 FCC Rcd at 2159. The full Commission has approvingly cited
   this passage from TRAC as indicating that such conduct violates section
   201(b) of the Act. BDP, 16 FCC Rcd at 14469.

   TRAC, 4 FCC Rcd at 2159.

   See posters submitted with Response.

   See "The Card" poster with advertised rates valid until January 30, 2011,
   submitted with Supplemental Response.

   A card is exhausted when either its face value has been used up (e.g.,
   $2), or when all of the available minutes have been used. For a discussion
   of how the fees may impact the value of the card as it is used, see infra
   P: 13.

   Both academic research and the Commission's experience with consumer
   issues have demonstrated that the manner in which providers display
   material information, including the charges, classifications, and terms of
   use, can have as much impact on a consumer's decision to make a purchase
   as the information itself. See generally Colin Camerer, Samuel
   Issacharoff, George Loewenstein, Ted O'Donoghue & Matthew Rabin,
   Regulation for Conservatives: Behavioral Economics and the Case for
   "Asymmetric Paternalism," 151 U. Penn. L. Rev. 1211 (2003) (surveying
   regulatory strategies to address problems arising from systematic errors
   in consumer decision-making); Richard H. Thaler and Cass R. Sunstein,
   Nudge, Yale University Press 2008 (concluding that information buried deep
   in the "fine print" is far less useful to consumers than information
   displayed clearly and prominently). See also Joint Advertising Statement,
   15 FCC Rcd at 8654-55 (finding that if consumers are deceived by
   advertising claims, they cannot make informed purchasing decisions);
   Truth-in-Billing and Billing Format, First Report and Order and Further
   Notice of Proposed Rulemaking, 14 FCC Rcd 7492 (1999) (noting that the
   proper functioning of competitive markets is predicated on consumers
   having access to accurate, meaningful information in a format that they
   can understand).

   See, e.g., "The Card" poster with advertised rates valid until January 30,
   2011, submitted with Supplemental Response.

   See, e.g., "The Card" $2 card submitted with Supplemental Response.

   Joint Advertising Statement, 15 FCC Rcd at 8663 (noting that prominence,
   proximity, and placement of disclosure in comparison to advertising
   representation affect effectiveness of disclosure); id. at 8659 (noting
   that disclosure about limitations on advertised long distance rate likely
   ineffective when advertised rate appeared on peel-off stickers, without
   disclosure, that consumers were supposed to put on telephones).

   Dialing a local access number could result in charges to the consumer by
   the consumer's phone company (if, for example, the number was a regional
   toll number), but would not reduce the available minutes on the card.

   Joint Advertising Statement, 15 FCC Rcd at 8662.

   See, e.g., "The Card" poster with rates valid until January 30, 2011,
   submitted with Supplemental Response.

   See id.

   See supra P: 6.

   See NOS, 16 FCC Rcd at 8138.

   47 U.S.C. S: 503(b)(1)(B). See also  47 C.F.R. S: 1.80(a)(2).

   47 U.S.C. S:503(b)(2)(B); see also  47 C.F.R. S: 1.80(b)(2). In 2008, the
   Commission amended section 1.80(b)(2) of the rules, 47 C.F.R. S:
   1.80(b)(2), to increase the maximum forfeiture amounts in accordance with
   the inflation adjustment requirements contained in the Debt Collection
   Improvement Act of 1996, 28 U.S.C. S: 2461. See  Amendment of Section 1.80
   of the Commission's Rules and Adjustment of Forfeiture Maxima to Reflect
   Inflation, Order, 23 FCC Rcd 9845, 9847 (2008) (adjusting the maximum
   statutory amounts for common carriers from $130,000/$1,300,000 to
   $150,000/$1,500,000).

   47 U.S.C. S: 503(b)(2)(E).

   See Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules
   to Incorporate Guidelines, Report and Order, 12 FCC Rcd 17087, 17099, P:
   22 (1997) ("Forfeiture Policy Statement"); recon. denied, 15 FCC Rcd 303
   (1999).

   Id.

   See NOS, 16 FCC Rcd at 8133, 8142.

   See id. at 8141-8142 (citing Business Discount Plan, Inc., Apparent
   Liability for Forfeiture, 15 FCC Rcd at 14471-72 (2000)).

   Id. at 8142.

   See id.

   In NOS, the Commission found that "each rate sheet sent to consumers
   constitutes a separate violation of section 201(b)." NOS, 16 FCC Rcd at
   8133. Consistent with NOS, we find that the marketing of each card to
   consumers constitutes a separate apparent violation of section 201(b). See
   also BDP, 15 FCC Rcd at 14471-72 (assessing a forfeiture amount of $40,000
   for each instance in which the carrier engaged in an unjust and
   unreasonable telemarketing practice in violation of section 201(b)).

   See Response attachments (including print sheets for hundreds of different
   cards).

   The $5 million penalty we propose is equivalent to applying a $40,000
   penalty to only 125 apparent violations that occurred within one year of
   this NAL.

   See Forfeiture Policy Statement 12 FCC Rcd 17087, 17099.

   See Locus 2011 FCC Form 499-A (Telecommunications Reporting Worksheet
   (Reporting Calendar 2010 Revenues)).

   47 C.F.R. S: 1.80.

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   Federal Communications Commission FCC 11-130