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Federal Communications Commission
Washington, D.C. 20554
In the Matter of File No. EB-10-TC-396
Lyca Tel, LLC NAL/Acct. No. 201132170026
Apparent Liability for Forfeiture FRN: 0014210983
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: August 26, 2011 Released: September 1, 2011
By the Commission:
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Lyca Tel, LLC ("Lyca Tel" 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, Lyca Tel appears to target its
marketing to immigrants with claims that, for a card costing just a
few dollars, buyers can make hundreds 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 Lyca Tel's assessment of
multiple fees and surcharges that are not clearly and conspicuously
disclosed to consumers. Accordingly, we find Lyca Tel, LLC has
apparently violated section 201(b) of the Act, and is apparently
liable for a proposed forfeiture in the amount of five million dollars
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 Lyca Tel 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, Lyca Tel is a de-tariffed common carrier that
provides retail telecommunications services via prepaid calling card
services for sale through channel merchant distribution and online.
Lyca Tel establishes the rates for its calling cards, including the
rate at which minutes are deducted from the cards. Lyca Tel sells its
calling cards through wholesale channels and local point of sale
merchants. The retail vendors sell the cards to consumers using
marketing posters that Lyca Tel designs and distributes.
4. As part of its response, Lyca Tel provided samples of the posters and
calling cards it sold in 2010 and 2011. A typical poster designed and
distributed by Lyca Tel includes the name of the calling card (e.g.,
"Latino Calendar," "Director," "Africa Target," and "Africa
Calendar"), the name of the telecommunications provider whose network
carries the calls, 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 Lyca Tel's posters usually
appears in large font size and bright colors. Additionally, some
posters contain a large box 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 City 400 Minutes $2; Peru, Lima 300 Minutes
$2, Argentina, Buenos Aires 1188 Minutes $5). Appearing on the bottom
of the posters is a disclosure in very small font size relating to
certain fees and surcharges that may apply when using the cards,
including connection and disconnection fees, daily maintenance fees
and other fees assessed when using toll-free access numbers or calling
5. Lyca Tel'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 of and value of the card (e.g., $2, $5). The back
of the top portion of the cards includes a disclosure about fees-the
same disclosure that typically appears on its posters. For example,
the disclosure on Lyca Tel's $5 Director calling card reads as
Use through local access numbers will result in lower charges from the
Card than calls made from Toll Free numbers via the Card. Maximum
maintenance charge of $0.95 may be applied the 2nd day after the first use
& thereafter every 7 days until the Card is consumed or expires. Maximum
charge [of] $0.95 may be applied per call. Use from a public telephone may
result in a charge up to $0.99 per call. Higher rates apply to calls to
premium, not geographical mobile and international telephone numbers,
including international Cellular & international wireless.
The back of the bottom portion of the card includes directions on how to
use the card, and a series of local access numbers, a toll-free access
number, a customer service number, and the expiration date.
A. Apparent Violation of Section 201(b) of the Act
6. 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.
7. We find that Lyca Tel 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 Lyca Tel applies a
variety of fees and surcharges that quickly deplete the card. Lyca Tel
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
8. Lyca Tel uses posters displayed in retail locations as its primary
vehicle for marketing its prepaid calling card services to consumers.
As indicated above, Lyca Tel 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., "Mexico
City 400 Minutes $2; Argentina, Buenos Aires 1188 Minutes $5").
Although Lyca Tel's prepaid cards are often marketed as providing
hundreds 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.
9. Lyca Tel'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 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, Lyca Tel'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 is at
the bottom of the posters in significantly smaller type and easily
overlooked. While this same language is usually printed on the top
portion (or "hang tag") of Lyca Tel's cards, it is 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 the card 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 Lyca Tel's disclosures are not clear and
conspicuous to the average consumer.
10. Additionally, even if Lyca Tel's disclosures were more prominent, we
find that they do not provide the information necessary for a consumer
to determine what fees apply, the amounts of those fees, and when and
how they will affect the number of calling minutes offered. To
illustrate this point, we use the disclosure in paragraph 5 above on
the poster for Lyca Tel's $2 Director Prepaid Phone Card, which is
typical of the disclosures found in Lyca Tel's marketing materials.
First, despite advertising on its posters a specific number of minutes
for a set price, Lyca Tel includes a disclosure that "a maximum
maintenance charge of $0.95 may be applied the 2nd day after the first
use & thereafter every 7 days until the Card is consumed or expires
and a maximum charge of $0.99 will be applied per call." There is no
meaningful explanation of how the range of charges relates to the
initial advertised rate or how it is applied. The explanation of the
range of fees and variety of other terms, conditions, and charges is
so vague that it is impossible for a consumer to know when purchasing
the prepaid card what fees will actually apply or how the fees will
impact the number of calling minutes received. Thus, the disclosures
are not in the "clear and unambiguous language" that the Commission
has said is needed to ensure that they are effective. Even if the
maximum post-call fees were not charged, because Lyca Tel's disclosure
only contains a range of possible fees, it would be impossible for the
consumer to determine at the point of sale what amount will apply to
11. We also find Lyca Tel's description of fees associated with using 800
access numbers unclear and misleading. Lyca Tel's disclosures state
that "[u]se through local access numbers will result in lower charges
than calls made from toll free numbers via the Card." The cards and
posters do not specify what higher charges a consumer will incur using
a toll free number. In addition, Lyca Tel highlights its 800 access
number 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 Lyca Tel does not
convey sufficient information about its rates for the use of its 800
12. According to Lyca Tel, customers at all times receive "a voice prompt
giving the number of minutes they can expect from their call." Voice
prompts, however, are inadequate to inform consumers at the point of
sale 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. We, therefore,
find that Lyca Tel's voice prompts 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 Lyca
Tel's marketing materials) and the consumer's actual experience (based
on application of Lyca Tel's surcharges), consider the card that one
of Lyca Tel's posters advertises as offering 400 minutes to Mexico
City for $2. If a consumer makes a 30-minute call to Mexico City, one
would reasonably expect that there would be 370 minutes remaining on
the card. However, the card disclosure suggests that once the initial
call is completed, a maximum maintenance charge of $0.95 may be
applied the 2nd day after the first call and a maximum charge of $0.99
will be applied per call. Thus, two days after a 30-minute call,
potential post-call charges of $1.94 would exhaust a card that was
advertised to provide 400 minutes. According to Lyca Tel, "[a]nnounced
minutes are based on use of entire card in a single call." In other
words, the only possible way a consumer could use all of the 400
advertised minutes would be to make a single 6 hour 40 minute 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 customers 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 to
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 that the marketing materials used by Lyca Tel 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 Lyca Tel 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 Lyca Tel has
apparently engaged in unjust or unreasonable marketing practices in
violation of section 201(b) of the Act.
B. 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 by
common carriers. 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 Lyca Tel 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 Lyca Tel
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 Lyca Tel'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 Lyca Tel'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. In the event Lyca Tel
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 Lyca Tel's
operating authority. Other prepaid calling card providers are also on
notice that practices such as those engaged in by Lyca Tel 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.
19. We have determined that Lyca Tel, LLC apparently violated section
201(b) of the Act. We have further determined that Lyca Tel, LLC is
apparently liable for a forfeiture in the amount of five million
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, Lyca
Tel, LLC 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, Lyca Tel, LLC SHALL
PAY the full amount of the proposed forfeiture or SHALL FILE a written
statement seeking reduction or cancellation of the proposed
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 above.
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). Lyca Tel, LLC 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
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 A. Hindman, Division 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 Lyca Tel, LLC, Attention:
Somasuntharam Thayaparan, Chief Operating Officer; Radha Chrishnam
Kadamban, Manager, Vijayaraj Rqaviaj; Manager, and Somasuntharam
Thayaoaran, Manager, 570 Broad Street, Suite 301, Newark, NJ 07102,
and to Edward A. Maldonado, Counsel for Lyca Tel, LLC, 3399 NW 72nd
Ave, Suite 216, Miami FL 33122
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Lyca Tel is a New Jersey limited liability company, whose principal
address is 570 Broad Street, Suite 301, Newark, NJ 07102. WWW Holding
Company Limited (an English registered company) and Subaskaran Allirajah,
a British national, are listed by Lyca Tel as members. Somasuntharam
Thayaparan, Chief Operating Officer; Radha Chrishnam Kadamban, Manager;
Vijayaraj Rqaviaj, Manager; and Somasuntharam Thayaoaran, Manager are
listed as contact persons for Lyca Tel, LLC. Accordingly, all references
in this NAL to "Lyca Tel" also encompass the foregoing company and
individuals, and all other principals and officers of Lyca Tel.
47 U.S.C. S: 201(b).
See Letter from Colleen Heitkamp, Chief, Telecommunications Consumers
Division, Enforcement Bureau, Federal Communications Commission, to Lyca
Tel, LLC, April 2, 2010 ("LOI").
See Letter from Edward A. Maldonado, Esq., Counsel for Lyca Tel, LLC to
Ms. Marlene H. Dortch, Secretary, Federal Communications Commission, May
17, 2010 ("Response").
See id at 2.
See id at 4.
See id at 2.
See id at 5.
See, e.g., email from Edward A. Maldonado, Esq., Counsel for Lyca Tel, LLC
to David Marks, Federal Communications Commission, April 20, 2011,
attachment, Director poster ("Third Supplemental Response"). See also
Response, included posters.
See Third Supplemental Response, attachment, Latino Calendar poster,
Director poster, Africa Target poster, and Africa Calendar poster.
See, e.g., email from Edward A. Maldonado, Esq., Counsel for Lyca Tel, LLC
to David Marks, Federal Communications Commission, March 17, 2011,
attachment, Director calling card ("Second Supplemental Response").
47 U.S.C. S: 201(b).
See, e.g., 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) (finding 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, 15 FCC Rcd at 14469.
TRAC, 4 FCC Rcd at 2159.
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
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
See supra note 9.
See, e.g., Director calling card, Second 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).
See Director calling card, Second Supplemental Response, attachment.
Joint Advertising Statement, 15 FCC Rcd at 8662.
See, e.g. Director calling card, Second Supplemental Response, attachment.
Dialing a local access number could result in charges to the consumer by
the consumer's telephone company (if, for example, the number was a
regional toll number), but would not reduce the available minutes on the
Letter from Edward A. Maldonado, Esq., Counsel for Lyca Tel, LLC to Ms.
Marlene H. Dortch, Secretary, Federal Communications Commission, September
15, 2010 at 3 ("Supplemental Response").
See Director calling card, Second Supplemental Response, attachment.
The imputed cost of a 30-minute call at $.005 per minute (200 cents/400
minutes) would be $0.15.
See e.g. Director calling card, Second Supplemental Response, attachment.
See NOS, 16 FCC Rcd at 8138 (2001).
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
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
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 14461 at 14471-72 (2000)).
Id. at 8142.
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)).
Lyca Tel represents that it is the global market leader in the prepaid
international calling card market present in 16 countries worldwide. It
has 9 million customers and originates and terminates over 1.6 billion
minutes of voice traffic per month and completes over 2.9 million voice
calls per day. See Lyca Tel About Us, http://www.lycatel.com/AboutUs.aspx
(last visited May 27, 2011).
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
See supra note 41. See also Forfeiture Policy Statement 12 FCC Rcd 17087,
47 C.F.R. S: 1.80.
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Federal Communications Commission FCC 11-131
Federal Communications Commission FCC 11-131