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Federal Communications Commission
Washington, D.C. 20554
In the Matter of File No.: EB-10-TC-398
Simple Network, Inc. NAL/Acct. No.: 20113217029
Apparent Liability for Forfeiture FRN: 0007921224
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: November 29, 2011 Released: November 29, 2011
By the Commission:
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Simple Network, Inc. ("Simple Network" 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, Simple Network
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
Simple Network's assessment of multiple fees and surcharges that are
not clearly and conspicuously disclosed to consumers. Accordingly, we
find that Simple Network, 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).
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 Simple Network 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, Simple Network establishes the rates for its
calling cards, including the rate at which minutes are deducted from
the cards. Simple Network sells its calling cards both through third
party distributors, retailers, and direct sales. The retail vendors
sell the cards to consumers using marketing posters that Simple
Network designs and distributes.
4. As part of its response, Simple Network provided samples of the
posters and calling cards it sold in 2010 and 2011. A typical poster
designed and distributed by Simple Network includes the name of the
calling card (e.g., "Amigos Latinos," "El Huevito," "El Regalo," and
"Marque Mexico"), a statement that "[n]etwork services are provided by
Simple Network," 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 Simple Network'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 300 Minutes $2; Brazil 500 Minutes $5,
Monterrey 750 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 from payphones.
5. Simple Network'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 card
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 Simple Network's $5 El Huevito calling card reads as
In using this card you agree to: Announced minutes are based on the first
call using local access numbers. Toll-free access will be charged at a
higher rate. Calls placed from payphones using toll-free access will incur
a surcharge of $0.99 per call. Calls will be billed in 1 minute
increments; partial minutes used are rounded up to the next full
increment. Total charges for a call will be rounded up to the next full
cent. Additional fees and/or surcharges will reduce minutes if all
announced minutes are not used during the first call. A Maintenance fee of
$0.20/0.79 will be deducted after the first call and each 2nd/7th day
thereafter. A disconnect fee of $0.19-$1.49 may be charged per call
depending on the destination dialed. Mobile rates within a country may
vary. Rates, fees, and, surcharges are subject to change without notice
... card expires 30 days after first use.
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, and a customer service number.
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 Simple Network has apparently violated section 201(b) of
the Act because it deceptively represents that buyers of its cards can
use hundreds 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 Simple Network applies a variety of
fees and surcharges that quickly deplete the card. Simple Network
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. Simple Network uses posters displayed in retail locations as its
primary vehicle for marketing its prepaid calling card services to
consumers at those locations. As indicated above, Simple Network
represents on its posters that consumers who purchase its cards will
receive a specified number of calling minutes to specific countries
for a set price (e.g., to Mexico City 750 minutes for $5, 300 minutes
for $2). Although Simple Network'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
9. Simple Network'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, Simple Network'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 Simple Network'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
Simple Network's disclosures are not clear and conspicuous to the
10. Additionally, even if Simple Network'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 Simple Network's $5 El Huevito prepaid
calling card, which is typical of the disclosures found in Simple
Network's marketing materials. First, despite advertising on its
posters a specific number of minutes for a set price, Simple Network
includes a disclosure that "A Maintenance fee of $0.20/0.79 will be
deducted after the first call and each 2nd/7th day thereafter. A
disconnect fee of $0.19-$1.49 may be charged per call depending on the
destination dialed." 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.
11. Simple Network's disclosure states (in capital letters), "call
customer service at 1-800-919-5355 for additional information and
current rates." This statement, however, is 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 this statement is
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
12. To give context to why these disclosures are inadequate and the extent
of the gulf between a consumer's reasonable expectation (based on
Simple Network's marketing materials) and the consumer's actual
experience (based on application of Simple Network's surcharges),
consider the card that one of Simple Network's posters advertises as
offering 300 minutes to Mexico City for $2. If a consumer makes a
10-minute call to Mexico City, one would reasonably expect that there
would be 290 minutes remaining on the card. However, the card
disclosure suggests that once the initial call is completed, a maximum
maintenance charge of $0.20/0.79 will be deducted after the first call
and each 2nd/7th day thereafter and a disconnect fee of $0.19-$1.49
may be charged per call. Thus, after an initial 10-minute call,
potential post-call charges of $2.28 would exhaust a card that was
advertised to provide 300 minutes. According to Simple Network,
"[a]nnounced minutes are based on the first call using local access
numbers." In other words, the only possible way a consumer could use
all of the 300 advertised minutes would be to make a single 5-hour
call - a duration that makes such calls improbable for the typical
consumer. Even if the maximum post-call fees were not charged, because
Simple Network'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 each destination.
13. 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).
14. We find that the marketing materials used by Simple Network 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 Simple Network 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 Simple
Network 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
15. 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.
16. 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.
17. We find that each card that Simple Network 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 Simple
Network 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 Simple Network'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 Simple Network'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 Simple Network 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 Simple
Network's operating authority. Other prepaid calling card providers
are also on notice that practices such as those engaged in by Simple
Network 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.
18. We have determined that Simple Network, Inc. apparently violated
section 201(b) of the Act. We have further determined that Simple
Network, Inc. is apparently liable for a forfeiture in the amount of
five million dollars ($5,000,000).
V. ORDERING CLAUSES
19. 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, Simple
Network, 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).
20. 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, Simple Network, Inc.
SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a
written statement seeking reduction or cancellation of the proposed
21. 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). Simple Network, 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
22. 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.
23. 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.
24. 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 Simple Network, Inc., Attention:
Hemant Patel, President, 25 Main Street, Edison, New Jersey 08837, and
to Neil S. Ende, Counsel for Simple Network, Inc., 5335 Wisconsin
Avenue, NW, Suite 440, Washington DC, 20015.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Simple Network is a New Jersey limited liability company, whose principal
address is 25 Main Street, Edison, New Jersey 08837. Hemant Patel is the
President of Simple Network, Inc. Accordingly, all references in this NAL
to "Simple Network" also encompass the foregoing company, Mr. Patel, and
all other principals and officers of Simple Network.
47 U.S.C. S: 201(b).
See Letter from Colleen Heitkamp, Chief, Telecommunications Consumers
Division, Enforcement Bureau, Federal Communications Commission, to Simple
Network, Inc., April 2, 2010 ("LOI").
See email from Susan Coleman, Esq., Counsel for Simple Network, Inc., to
Kimberly Wild and Erica McMahon, Federal Communications Commission,
October 4, 2010 ("Response").
See id. We note that Simple Network was granted an international 214
certificate on December 12, 2002. See 17 FCC Rcd 24831 (2002) (granting
Simple Network's Application for Authority to operate as a
facilities-based carrier in accordance with the provisions of section
63.18(e)(1) of the rules, and also to provide service in accordance with
section 63.18(e)(2) of the rules).
See, e.g., emails from Silsa Menendez, administrative assistant to Counsel
for Simple Network, Inc., to Richard Hindman, Kimberly Wild, Erica
McMahon, and David Marks, Federal Communications Commission, June 9, 2011,
attached posters ("Second Supplemental Response").
See, e.g., Second Supplemental Response, attachment, Amigos Latinos
poster, El Huevito poster, El Regalo poster, and Marque Mexico poster.
See email from Silsa Menendez, administrative assistant to Counsel for
Simple Network, Inc., to Richard Hindman, Kimberly Wild, Erica McMahon,
and David Marks, Federal Communications Commission, June 3, 2011,
attachment, El Huevito calling card. We note that while the El Huevito
prepaid card states that calls will be billed in 1 minute increments, the
El Huevito poster supplied by Simple Network states that calls will be
billed in 1or 3 minute increments.
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.
Simple Network also markets its services on its websites:
www.simple2dial.com, www.simple2call.com, and www.motherindiacard.com.
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., El Huevito calling card, Supplemental Response, attachment.
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 El Huevito calling card, Supplemental Response, attachment.
Joint Advertising Statement, 15 FCC Rcd at 8662.
See, e.g., El Huevito calling card, Supplemental Response, attachment.
See id. See also El Huevito poster, Second Supplemental Response,
The imputed cost of one 10-minute call at 2/3 cents per minute (200
cents/300 minutes) would be $0.067.
See, e.g., El Huevito calling card, Second Supplemental Response,
The El Heuvito poster also advertises 750 minutes to Mexico City for $5.
Because a charge applies upon completion of the first call, the only
possible way a consumer could use all of the 750 advertised minutes would
be to make a single 12.5-hour call. See El Heuvito poster, 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)).
See Second Supplemental Response at 1.
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.
(Continued from previous page)
Federal Communications Commission FCC 11-178
Federal Communications Commission FCC 11-178