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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
In the Matter of
)
APCC Services, Inc.,
)
Complainant,
)
v.
)
CCI Communications, LLC; File No. EB-09-MD-005
)
CCI Communications, Inc.;
)
Creative Communications, Inc.; and
)
Link Systems, Inc.,
)
Defendants.
)
)
)
order ON REVIEW
Adopted: January 10, 2013 Released: January 11, 2013
By the Commission:
I. introduction
1. This Order denies an Application for Review filed by CCI
Communications, LLC (CCI), which requests modification or reversal of
a Memorandum Opinion and Order issued by the Enforcement Bureau
(Bureau) on June 29, 2010. The June 29 Order granted in part and
denied in part a formal complaint that APCC Services, Inc. (APCC)
filed against CCI and other defendants under Section 208 of the
Communications Act of 1934, as amended (Act). The June 29 Order
awarded APCC $1,868,451, plus interest, for per-call payphone
compensation CCI owes as a "Completing Carrier" under Section
64.1300(a) and (b) of the Commission's payphone compensation rules. As
explained below, we affirm the Bureau's June 29 Order and dismiss as
moot CCI's request to stay the effect of the June 29 Order.
II. BACKGROUND
A. Payphone Compensation Regime under Section 276
2. Section 276(b) of the Act directs the Commission to "establish a
per-call compensation plan to ensure that all payphone service
providers [(PSPs)] are fairly compensated for each and every completed
intrastate and interstate call using their payphone." Included among
the calls subject to this mandate are "dial-around calls," where the
caller makes a coinless call using a carrier other than the payphone's
presubscribed long distance carrier (e.g., calls to toll-free numbers
and calls using access codes to reach a service provider of choice).
The Commission has established a default per-call compensation
amount-currently set at $.494-to be paid to PSPs (in the absence of
individual agreements) for each and every completed intrastate and
interstate dial-around call.
3. Multiple entities may collaborate in the transmission of a coinless
payphone call, but the Commission's rules place the responsibility for
paying dial-around compensation on one: the "Completing Carrier,"
defined as the "long distance carrier or switch-based long distance
reseller that completes a coinless access code or subscriber toll-free
payphone call." To ensure that PSPs can identify and locate Completing
Carriers that owe them dial-around compensation and to make certain
that Completing Carriers accurately calculate the amount of any
per-call compensation owed to PSPs, Commission rules impose a number
of call tracking, third-party audit, certification, and reporting
obligations on Completing Carriers.
A. This Litigation
1. The Formal Complaint Proceeding
4. The June 29 Order recites in detail the facts underlying the complaint
proceeding. In brief, APCC serves as a clearinghouse for the billing
and collection of dial-around compensation on behalf of certain PSPs
(Represented PSPs). CCI provides interexchange telecommunications
services and switch-based resale. CCI markets and sells prepaid phone
cards to resellers.
5. The Complaint alleged that CCI violated Sections 201(b) and 276(b) of
the Act and Sections 64.1300, 64.1310, and 64.1320 of the Commission's
rules by failing to pay per-call compensation for dial-around calls
made from the Represented PSPs' payphones during the period beginning
July 1, 2004, and ending September 30, 2008, and failed to comply with
call tracking, third party audit, certification, and reporting
requirements. The Complaint sought damages, based on "Intermediate
Carrier" reports, for all dial-around calls reported as delivered to
CCI from the Represented PSPs' payphones during the relevant timeframe
(i.e., all dial-around calls reported by Intermediate Carriers as
delivered, regardless of their duration).
6. With respect to the calls at issue in this proceeding, CCI
acknowledged that, under the Commission's payphone compensation rules,
it is a Completing Carrier. Further, CCI stipulated that, using a
120-second timing proxy (i.e., counting as "completed" only those
calls lasting 120 seconds or longer), it is the "liable Completing
Carrier" for 1,287,026 of the 6,321,578 Intermediate Carrier reported
calls that had been placed from the Represented PSPs' payphones. CCI
also admitted that, of the total stipulated calls it received from
Intermediate Carriers, 1,991,771 were of 30 seconds duration or
longer.
7. CCI argued that the calls for which it owes compensation should be
calculated using a 120-second timing proxy, because the international
nature of most of its calls poses barriers that prevent the calls from
connecting quickly and because the termination of some of its
international calls using Voice-over-Internet Protocol (VoIP)
technology results in a "high percentage of false answer supervision"
calls. CCI claimed, therefore, that the use of a 30-second timing
proxy would allow APCC to receive compensation for calls that were not
completed.
8. On February 4, 2010, APCC filed a Request for Resolution on the
Pleadings, arguing that no material disputes remain, in either fact or
law, and urging the Commission to rule on its Complaint based on the
parties' pleadings. APCC explained that it had abandoned all claims
against CCI except for its claim to compensation for those calls as to
which CCI had stipulated liability, plus interest. According to APCC,
the only remaining issue for decision was the number of "completed
calls," which it urged the Commission to determine by applying the
reasoning of APCC v. Radiant (Radiant). CCI did not file an opposition
or other response to the Request for Resolution.
1. The June 29 Order
9. In the June 29 Order, the Bureau granted APCC's Request for
Resolution, and granted in part, and denied in part, APCC's Complaint.
The Bureau ordered CCI to pay APCC unpaid dial-around compensation for
completed payphone calls in the amount of $1,868,451, plus interest,
noting that CCI had admitted to being a Completing Carrier, had
stipulated to liability for the 6,321,578 calls it had received from
Intermediate Carriers (to the extent those calls were completed), and
had provided the number of such calls that were of 30 seconds duration
or longer. The only issue that had not been stipulated to, from the
Bureau's perspective, was how to calculate the portion of the
6,321,578 Intermediate Carrier reported calls that should be deemed
completed, thus triggering CCI's compensation obligation to the
Represented PSPs.
10. The Bureau looked to the Commission's opinion in Radiant for guidance.
In Radiant, the Commission used a proxy to establish the number of
"completed" calls, because the carrier failed to comply with the
Commission's call tracking and audit rules, making it impossible to
"ascertain the exact number of calls for which [the Completing
Carrier] is liable." In the absence of accurate and reliable call
completion data, the Commission adopted a "middle view" between
complainant's proposal to require compensation for every
payphone-originated, dial-around call delivered to the Completing
Carrier's switch and the defendant's proposal to require compensation
only for those calls lasting at least 30 seconds. Specifically, the
Commission ordered that the defendant in Radiant pay compensation for
all dial-around calls of 30 seconds duration or longer, and for half
of all dial-around calls of lesser duration.
11. In the June 29 Order, the Bureau observed numerous similarities
between Radiant and the present case, including that both involved:
(1) international prepaid calling card traffic; (2) a defendant that
had acknowledged liability for completed Intermediate Carrier reported
calls delivered to its switch; (3) a defendant that had admitted
noncompliance with Commission rules regarding third party audits of
its call tracking system and the execution of a Chief Financial
Officer certification; and, as a result, (4) the submission of
unaudited data concerning the number of completed calls. In view of
these similarities, and finding unpersuasive CCI's asserted rationale
for applying a 120-second timing proxy, the Bureau applied the Radiant
analysis (including a 30-second timing proxy) to determine the number
of completed calls for which CCI is liable. Consequently, the Bureau
ordered CCI to compensate APCC for all of the 6,321,578 stipulated
Intermediate Carrier reported calls that were of 30 seconds duration
or longer (i.e., 1,991,771 calls), and for half of the calls that were
of less than 30 seconds duration (i.e., half of the difference between
the 1,991,771 calls that were 30 seconds or longer and the 6,321,578
stipulated Intermediate Carrier reported calls), minus the calls for
which CCI already had paid compensation (i.e., 374,384), for a total
of 3,782,290 calls. At the per-call rate of $.494, the Bureau
determined that CCI owed APCC total compensation of $1,868,451, plus
interest (accrued at an annual rate of 11.25 percent).
1. CCI's Application for Review
12. The Application for Review, which APCC opposes, asks the Commission to
review and "vacat[e] or modif[y]" the June 29 Order. CCI states that
such action is needed "to allow [it] to present evidence and argument"
as to why the number of calls for which it is ordered to compensate
APCC should be reduced, and so that it can explain the "facts and
circumstances to adequately inform the Commission of the
applicability, or lack thereof, of Radiant to the present case." The
Application for Review also contends that CCI's failure to oppose or
otherwise respond to the Request for Resolution should be excused and
not bar it from offering evidence and argument now as to what it
believes would be a more appropriate call proxy.
III. DISCUSSION
13. The Application for Review does not contest the Bureau's finding that,
as a Completing Carrier, CCI was subject to per-call compensation,
call tracking, third party audit, and other obligations under the
Commission's rules. Instead, the Application challenges the Bureau's
reliance on Radiant for purposes of determining the extent of CCI's
liability and takes issue with the Bureau's ruling on procedural
grounds. We affirm the June 29 Order in its entirety and deny the
Application for Review.
A. The Bureau Properly Applied the Radiant Analysis to the Instant Case
14. CCI argues that the June 29 Order failed to take into account certain
characteristics of its call traffic that it believes distinguish the
traffic from that in Radiant. To begin, CCI contends that the calls at
issue in Radiant "were more heavily weighted towards domestic traffic"
than the calls in this case. The June 29 Order considered and rejected
this argument based on evidence in Radiant that flatly refutes CCI's
contention. CCI has not provided any evidence or explanation that
warrants revisiting this issue.
15. Next, CCI maintains that the June 29 Order erred by "lumping all
international traffic into one group." CCI states that the "vast
majority" of its call traffic is "to Central and South America." CCI
claims that the call completion rate "in such countries hovers around
40% or below," and that, "for more than 90% of its call traffic, the
calls do not complete in the first 30 seconds of the call." CCI argues
that, in contrast, traffic to other international destinations may
have a "measurably higher call completion rate." Neither the
Application for Review nor CCI's pleadings below, however, includes
evidence supporting CCI's assertions that call completion rates for
its traffic differ materially from completion rates for other
international calling card traffic.
16. CCI further maintains that the Bureau erred in applying the Radiant
analysis to the present case without properly taking into account the
lower completion rates that it believes result from its high
percentage of "VoIP traffic." Once again, CCI offers no specific
evidentiary support for its assertions that VoIP traffic has a
materially lower call completion rate than non-VoIP traffic or that
such calls take significantly longer to connect than non-VoIP traffic.
Similarly, CCI does not substantiate its contention that, based on
these purported differences, a 120-second timing proxy is warranted.
17. As the Bureau noted in the June 29 Order, CCI "acknowledges liability
for completed calls and admits that it has not complied with the
Commission's requirements regarding audits of its tracking system or
submission of a CFO certification." As in Radiant, the approach the
Bureau adopted here-although admittedly "not perfect"-was necessary
because of the defendant's "willful failure to comply with rules that,
when followed by Completing Carriers, ensure that the mandates of
Section 276 are achieved." In view of the undisputed facts concerning
CCI's noncompliance with the Commission's tracking system audit and
the resulting lack of audited call data, the numerous material
similarities between Radiant and the instant case (including the
international nature of the call traffic in both cases), and CCI's
failure to provide specific evidentiary support for an alternative
call completion analysis, we reject CCI's contention that the Bureau
improperly applied the Radiant analysis.
A. The Bureau Properly Rejected CCI's Belated Request to Garner and
Present Evidence, Documents, and Expert Witness Testimony to Support
Its Case
18. As noted above, CCI did not file an opposition or other response to
the Request for Resolution. In the Application for Review, CCI
contends that the Commission should excuse this failure and allow CCI
to garner and present evidence supporting its argument that use of a
120-second timing proxy is appropriate. We find no valid basis for
granting CCI's request.
1. The Request for Resolution Is a Motion Under Section 1.727 of the
Commission's Rules, Which CCI Failed to Oppose
19. CCI asserts that the Commission's rules do not provide for a Request
for Resolution on the Pleadings and, therefore, that the Bureau should
have informed CCI of its obligation to respond to the submission. The
Bureau's failure to do so, CCI says, constitutes reversible error. We
disagree.
20. Section 1.727(a) of the Commission's formal complaint rules provides
that a "request to the Commission for an order shall be by written
motion, stating with particularity the grounds and authority therefor,
and setting forth the relief or order sought." APCC explicitly filed
the Request for Resolution "pursuant to Section 1.727 of the
Commission's rules," and it unquestionably was a request to the
Commission for an order. Although CCI contends that it was denied
"essential notice" of the true nature of the pleading by virtue of the
fact that it was not specifically styled as a "motion," Section 1.727
does not, in fact, require that a request to the Commission for an
order contain the word "motion" in its title.
21. Section 1.727(e) of the Commission's rules further provides that any
opposition to a motion must be filed "within five business days after
the motion is filed and served and not after," and that "[f]ailure to
oppose any motion may constitute grounds for granting of the motion."
"Any party that chooses not to file an opposition to a motion runs the
risk that the motion will be granted without consideration of that
party's views." CCI neglected to respond to the Request for
Resolution, and the Bureau appropriately ruled on the Request.
22. The Application for Review does not contend-nor is there any
evidence-that CCI was not timely served a copy of the Request for
Resolution or that it was otherwise unaware of the pleading. Instead,
CCI asserts that "the course of dealings" in this case prior to the
filing of the Request for Resolution led it to believe that the
Bureau's staff would "notify CCI of the filing[]," and of the
corresponding deadline for filing a response. Parties appearing before
the Commission, however, are charged with knowledge of its rules.
Indeed, when transmitting the Complaint, Bureau staff "encourage[d]
the parties to read the formal complaint rules . . . fully and
carefully." As APCC correctly notes, to the extent that CCI was
unfamiliar with the Commission's procedural rules, the burden was on
CCI to familiarize itself with the rules or to engage as co-counsel an
active practitioner before the Commission.
23. Although CCI does not dispute that the Request for Resolution was a
request for a Commission order (and, thus, a motion under Section
1.727(a)), it asks the Commission to excuse its failure to file an
opposition because it was unaware of the "dispositive" nature of
APCC's submission. Whether or not the Request for Resolution is
dispositive, however, has no bearing on CCI's obligations under
Section 1.727(e), because that rule applies to all motions,
dispositive and non-dispositive alike. In any event, we find CCI's
contention that it had no "indication" that the Request for Resolution
would dispose of the case to be implausible. The title of APCC's
pleading and the substance of the pleading itself could not have been
clearer that APCC was asking the Commission to resolve the case in its
entirety by finding CCI liable for per-call payphone compensation
totaling over $2 million. Such a ruling ending the litigation most
certainly would be dispositive.
1. Regardless of CCI's Failure to Oppose the Request for Resolution,
the Bureau Appropriately Granted the Request Based on the Record
Before It
24. CCI's failure to file a response to the Request for Resolution was not
the exclusive basis for the June 29 Order, which contained
determinations stemming from a "complete and inclusive pleading
cycle." Indeed, the Request for Resolution was not even necessary for
the Commission to resolve the case. APCC had filed a complaint and
reply, CCI had submitted an Answer, and the parties, working together,
had developed a Joint Statement containing stipulated facts. These
documents constitute an adequate written record, on which the
Commission can resolve formal complaint proceedings. Admittedly, the
Request for Resolution narrowed the issues before the Commission,
because APCC relinquished certain claims against CCI, but this worked
only to CCI's benefit. After carefully considering the written record,
the Bureau rejected CCI's substantive arguments that Radiant should
not apply.
1. CCI Has Provided No Basis to Believe a New Opportunity to Present
Evidence Would Be Fair or Meaningful
25. We find no merit to CCI's contentions that it now should be given
another opportunity to present factual evidence supporting its case.
CCI claims that, in the underlying proceeding, it "expected an
opportunity to make its case and support its asserted defenses with
documentation, expert witness testimony and other evidence when the
case resumed in full, presumably after the Initial Status Conference."
This reflects a fundamental misunderstanding of the Commission's
formal complaint processes in at least two important respects. First,
discovery is not a matter of right in formal complaint proceedings.
Therefore, CCI could have no reasonable expectation that it was
entitled to conduct discovery. Furthermore, CCI's assertion that it
intended to obtain additional facts through discovery is belied by its
failure to propound any requests for interrogatories with its Answer.
Second, the formal complaint process involves fact-based pleading, as
distinguished from notice pleading used in federal courts. Thus, CCI
was required to present in its Answer all facts and supporting
evidence relating to the call completion methodology it argued is
appropriate (i.e., use of a 120-second timing proxy). Although CCI
contends that, at the time it filed its Answer, it "did not possess"
the relevant evidence, it did not explain what information it needed
nor did it request discovery to obtain the information. The Bureau
properly proceeded to decide the Complaint based on the record before
it.
IV. ordering clauses
26. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 4(j), 201,
and 208 of the Communications Act of 1934, as amended, 47 U.S.C. S:S:
151, 154(i), 154(j), 201, 208, and Sections 1.44(e) and 1.102(b)(3) of
the Commission's rules, 47 C.F.R. S:S: 1.44(e), 1.102(b)(3), that the
Request for Stay IS DISMISSED AS MOOT.
27. IT IS FURTHER ORDERED, pursuant to Sections 1, 4(i), 4(j), 201, 208,
and 276 of the Communications Act of 1934, as amended, 47 U.S.C. S:S:
151, 154(i), 154(j), 201, 208, 276, and Sections 1.115, 1.720-1.736,
and 64.1300-64.1320 of the Commission's rules, 47 C.F.R. S:S: 1.115,
1.720-1.736, 64.1300-64.1320, that the Application for Review IS
DENIED.
28. IT IS FURTHER ORDERED, pursuant to Sections 1, 4(i), 4(j), 201, 208,
and 276 of the Communications Act of 1934, as amended, 47 U.S.C. S:S:
151, 154(i), 154(j), 201, 208, 276, and Sections 1.115, 1.720-1.736
and 64.1300-64.1320 of the Commission's rules, 47 C.F.R. S:S: 1.115,
1.720-1.736, 64.1300-64.1320, that the June 29 Order IS AFFIRMED IN
ITS ENTIRETY as described herein.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
CCI Communications, LLC's Application for Review and Request for Stay,
File No. EB-09-MD-005 (filed July 28, 2010) (Application for Review) or
(Application).
APCC Services, Inc. v. CCI Communications, LLC, Memorandum Opinion and
Order, 25 FCC Rcd 8224 (Enf. Bur. 2010) (June 29 Order).
Formal Complaint, File No. EB-09-MD-005 (filed Mar. 26, 2009) (Complaint).
47 U.S.C. S: 208. Although APCC had named several defendants in the
Complaint, by the time of the June 29 Order, CCI remained the lone
defendant. See Order Dismissing Defendant CCI Network Services, Inc., File
No. EB-09-MD-005 (Aug. 13, 2009); Order Dismissing Certain Defendants,
File No. EB-09-MD-005 (Apr. 29, 2010).
June 29 Order, 25 FCC Rcd at 8224, para. 1; see also 47 C.F.R. S:
64.1300(a), (b).
See 47 C.F.R. S: 1.115.
The Application for Review included a request that the Commission stay the
effect of the June 29 Order. Application for Review at 10. CCI
subsequently refiled that request in a separate document. CCI
Communications, LLC's Request for Stay, File No. EB-09-MD-005 (filed Aug.
13, 2010) (Request for Stay).
47 U.S.C. S: 276(b)(1)(A). The Commission has interpreted the statutory
term "completed call" to mean "a call that is answered by the called
party." Pay Telephone Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, Report and Order, 18 FCC Rcd 19975, 19987,
para. 25 (2003) (Tollgate Order).
See, e.g., Request to Update Default Compensation Rate for Dial-Around
Calls from Payphones, Report and Order, 19 FCC Rcd 15636, 15638, para. 3 &
n.9 (2004) (Rate Increase Order).
47 C.F.R. S: 64.1300(b), (d); see, e.g., Rate Increase Order, 19 FCC Rcd
at 15638, para. 3 & nn.10-11. The compensation obligations of Section
64.1300(b) do not apply to calls "to emergency numbers, calls by hearing
disabled persons to a telecommunications relay service or local calls for
which the caller has made the required coin deposit." 47 C.F.R. S:
64.1300(c).
47 C.F.R. S: 64.1300(a).
Implementation of the Pay Telephone Reclassification and Compensation
Provisions of the Telecommunications Act of 1996, Order on
Reconsideration, 19 FCC Rcd 21457, 21459-60, paras. 4-5 (2004) (2004
Payphone Order); see 47 C.F.R. S:S: 64.1310, 64.1320.
June 29 Order, 25 FCC Rcd at 8225-27, paras. 3-9.
Joint Statement, File No. EB-09-MD-005, at 2, para. 1 (filed June 22,
2009) (Joint Statement). As an agent of the Represented PSPs for the
billing and collection of dial-around compensation, APCC has entered into
an agency agreement with each of the Represented PSPs and, in addition,
each Represented PSP has executed a Power of Attorney authorizing APCC to
act on its behalf. See Complaint at 6.
Joint Statement at 2, paras. 4, 5.
Declaration of Jeff Parson in Support of the Revised Answer of CCI
Communications, LLC, File No. EB-09-MD-005 (filed May 21, 2009) (Parson
Declaration).
See, e.g., Complaint at 3, para. 5; 9, paras. 22-23; 10, paras. 28-29; see
also 47 U.S.C. S:S: 201(b), 276(b); 47 C.F.R. S:S: 64.1300, 64.1310,
64.1320.
An "Intermediate Carrier" is "a facilities-based long-distance carrier
that switches payphone calls to other facilities-based long-distance
carriers." 47 C.F.R. S: 64.1310(b). Under the Commission's rules, PSPs are
entitled to receive quarterly reports from both Completing Carriers (as
noted above) and Intermediate Carriers. 47 C.F.R. S: 64.1310(c). The
Intermediate Carrier report, which must show all dial-around payphone
calls delivered to a Completing Carrier's platform, together with the
Completing Carrier report, provide PSPs with verifiable information about
compensable calls. 2004 Payphone Order, 19 FCC Rcd at 21472, para. 25.
Although the Complaint also sought damages for calls carried by CCI for
which the 8YY (toll-free) numbers were translated into local POTS numbers
before the calls were routed to CCI's network (POTS-Translated Calls), see
Complaint at 3-4, para 7; 60, para. 231, APCC subsequently abandoned its
claim to compensation for these calls. See Request for Resolution on the
Pleadings, File No. EB-09-MD-005, at 2, 6 (filed Feb. 4, 2010) (Request
for Resolution).
Joint Statement at 2, para. 6.
Id. at 3-4, paras. 11-20.
CCI Communications, LLC's Responses to Complainant's (1) Initial
Interrogatories and Requests for Production and (2) Second Set of
Interrogatories, File No. EB-09-MD-005, at 10 (filed Jan. 19, 2010) (CCI's
Interrogatory Responses). In addition to providing the number of calls
that would be deemed "completed" using a 30-second timing proxy (i.e.,
counting as "completed" only those calls lasting 30 seconds or longer),
CCI noted that it already had paid compensation to APCC for 374,384 of
those calls. Id.
CCI Communications, LLC's Revised Answer to Formal Complaint, File No.
EB-09-MD-005, at 32-34 (filed May 21, 2009) (Answer).
Answer at 33; Parson Declaration at 6. Answer supervision refers generally
to the signal that is emitted when a call is answered by its recipient so
that billing for the call may commence. See generally Hi-Rim
Communications, Inc. v. MCI Telecommunications Corp., Memorandum Opinion
and Order, 13 FCC Rcd 1982, 1985, para. 6 n.34 (Com. Car. Bur. 1997).
Request for Resolution at 1.
Id. at 2, 5-6. Thus, APCC abandoned its claims to compensation for calls
placed during the first quarter of 2008 through the third quarter of 2008.
Id. at 2, 7-8.
Id. at 7-8; see APCC Services, Inc. v. Radiant Telecom, Inc., Memorandum
Opinion and Order, 23 FCC Rcd 8962 (2008).
June 29 Order, 25 FCC Rcd at 8228, para. 13.
Id. at 8228, para. 14.
Id. at 8228, para. 15.
Id. at 8227, para. 10.
Id. at 8227-28, paras. 11-12.
Id. (citing Radiant, 23 FCC Rcd 8962).
Radiant, 23 FCC Rcd at 8971-72, para. 30.
Id. at 8971-72, paras. 29-30.
Id.
June 29 Order, 25 FCC Rcd at 8228, para. 12.
Id. at 8228, para. 12. The Bureau also described as "noteworthy" CCI's
lack of a response to APCC's Request for Resolution. Id.
Id.
Id. at 8228, para. 13.
See Opposition to Application for Review, File No. EB-09-MD-005 (filed
Aug. 16, 2010) (Opposition).
Application for Review at 1, 10.
Id. at 10.
CCI Communications, LLC's Reply Memorandum in Support of Application for
Review, File No. EB-09-MD-005 (filed Aug. 25, 2010) (Reply Memorandum) at
8.
Application for Review at 7.
Id., passim.
Id. at 4-6; see also Answer at 32-34; Parson Declaration at 6.
Application for Review at 5.
June 29 Order, 25 FCC Rcd at 8228, para. 12 & n.45 (quoting Revised Answer
to Formal Complaint, APCC Services, Inc. v. Radiant Telecom, Inc.,
Intelligent Switching and Software, LLC, and Radiant Holdings, Inc., File
No. EB-05-MD-016, at 2 n.4 (filed Oct. 7, 2005) ("Radiant is primarily in
the calling card business. The vast majority of its end-user customers use
the cards to place international calls.")).
CCI also challenges the June 29 Order on the basis that it "requires CCI
to compensate APCC's PSPs for the same calls for which it has already
directly compensated the PSPs." Application for Review at 1. CCI first
raised this issue in paragraph 48 of its Answer, alleging that CCI has
paid "some PSPs directly for the same calls for which Complainant now
seeks compensation." Answer at 13, para. 48 (emphasis added). The first
time CCI proffered any details regarding these alleged payments, however,
was in response to an interrogatory to which it attached a CD purporting
to list 82,804 calls that "were part of the APCC claim . . . that have
been already paid by CCI." See CCI's Interrogatory Responses at 12. CCI
fails to provide even the most basic facts concerning these alleged
payments, however, and the few details it does provide vary from one
pleading to the next. For example, although the Interrogatory response and
CD referenced above contained a list of ten PSPs that CCI allegedly paid
directly, see id., the Application for Review lists only four such PSPs
(including one that did not appear on CCI's earlier list). Application for
Review at 9. Because CCI has not substantiated these allegations of
"double payment" or otherwise pleaded them with the specificity required
by our rules, they provide no cause for us to modify the ruling below.
Application for Review at 6.
Id. at 5.
Id.
Id.
Id. at 6.
See, e.g., Answer at 33 (asserting without citation or support that calls
to Central and South America take longer to connect than other
international calls due to "inferior quality of the telecommunications
infrastructure," instructions being presented in "languages different from
the users' native tongue," and "variable government regulations affecting
the telecommunications infrastructure."); cf. 47 C.F.R. S:S: 1.720(a)
("All matters concerning a claim, defense or requested remedy, including
damages, should be pleaded fully and with specificity."); 1.720(b)
("Pleadings must contain facts which, if true, are sufficient to
constitute . . . a defense" to allegations in a formal complaint);
1.720(c) ("Facts must be supported by relevant documentation or
affidavit."); 1.724(g) ("The answer shall attach copies of all affidavits,
documents, data compilations and tangible things in the defendant's
possession, custody, or control, upon which the defendant relies or
intends to rely to support the facts alleged and legal arguments made in
the answer.").
Application for Review at 5.
See, e.g., id. at 4 (asserting that, with VoIP calls, "there is a marked
increase in false answer supervision. In other words, VoIP calls take
longer to connect, sometimes are dropped and are reported as having
completed when in fact they have not").
Although CCI appended to its Answer the declaration of its chief operating
officer, Jeff Parson, in which Mr. Parson stated that the termination of
some of its international calls using VoIP technology results in a "high
percentage of false answer supervision" calls, and that the use of a 30
second proxy would allow APCC to receive compensation for calls that were
not completed, the declaration does not provide any specific evidentiary
support for these assertions. Parson Declaration at 6.
June 29 Order, 25 FCC Rcd at 8228, para. 12.
Id. at 8228, para. 11 (quoting Radiant, 23 FCC Rcd at 8972, para. 30). As
the Bureau noted, even a 30-second proxy "undercounts" the number of
completed calls to the extent that it would exclude any completed call
that lasted fewer than 30 seconds. Id. at 8228, para. 12 & n.46 (quoting
Radiant, 23 FCC Rcd at 8971, para. 29). For this reason, the Commission,
in Radiant, included half of all calls lasting fewer than 30 seconds.
Application for Review at 7.
Id. at 2, 7-9.
Id. at 2.
47 C.F.R. S: 1.727(a).
Request for Resolution at 2 n.2; see Opposition at 7.
APCC requested "a decision on the pleadings before it holding CCI liable
as the Completing Carrier for $1,868,451 in unpaid [dial-around
compensation] plus $839,718 in interest on that amount, for a total of
$2,708,169." Request for Resolution at 9.
47 C.F.R. S: 1.27(a).
47 C.F.R. S: 1.727(e).
Implementation of the Telecommunications Act of 1996: Amendment of Rules
Governing Procedures to be Followed When Formal Complaints Are Filed
Against Common Carriers, Report and Order, 12 FCC Rcd 22497, 22593-94,
para. 233 (1997) (Formal Complaints Order). This underscores what the
Commission has described as each party's "burden to represent fully its
own interests before the Commission." Id. at 22593, para. 233.
See NetworkIP v. FCC, 548 F.3d 116, 126-28 (D.C. Cir. 2008) (noting that
the court of appeals has "repeatedly discouraged" the Commission from
entertaining late-filed pleadings in the absence of "extremely unusual
circumstances" and holding that the Commission acted arbitrarily and
capriciously in waiving a filing deadline absent such circumstances). Any
response or opposition to the Request for Resolution would have been due
on February 19, 2010. The Bureau did not release the June 29 Order for
another four months. At no point during that intervening period did CCI's
counsel contact Bureau staff to inquire about the necessity of filing a
response.
In fact, APCC states that its counsel attempted to contact counsel for CCI
by phone and by email concerning its intent to file the Request for
Resolution, but, according to APCC, CCI's counsel did not respond. Request
for Resolution at 1-2.
Application for Review at 7.
See, e.g., Profit Enterprises, Inc., Forfeiture Order, 8 FCC Rcd 2846,
2846, para. 5 (1993) (stating that, with respect to
manufacturer/distributor's claim that equipment certification and
marketing requirements were inapplicable, its "prior knowledge or
understanding of the law is unnecessary to a determination of whether a
violation existed . . . ignorance of the law is [not] a mitigating
factor").
See Notice of Formal Complaint, File No. EB-09-MD-005, at 2 (Apr. 2,
2009). The Bureau's transmittal letter contained the schedule for due
dates of the answer, reply, and initial status conference. See 47 C.F.R.
S: 1.735(e). There is no basis for CCI's suggestion that this document
caused it to believe that the Bureau would notify the parties of every
filing deadline.
Opposition at 9.
Reply Memorandum at 2. In particular, CCI points to footnote 2 of the
Request for Resolution, where APCC states that it "has not treated this
request as a dispositive motion under Section 1.727(b)" insofar as it did
not include proposed findings of fact and conclusions of law and a
proposed order. Application for Review at 7 (citing Request for Resolution
at 2 n.2). APCC asked the Commission instead to "treat the relevant
portions of its Complaint and Reply as the proposed findings of fact and
conclusions of law" and stated that it did not believe a proposed order
was necessary because it was asking that the Commission "merely act to
rule on the matters already before it." Id.
If CCI believed that the Request for Resolution was somehow procedurally
infirm because the Commission's rules do not "specifically provide[]" for
Requests for Resolution, Application for Review at 7, it ought to have
raised those concerns in an opposition.
Application for Review at 7.
See, e.g., Request for Resolution at 1 (requesting a ruling "based on the
parties' pleadings" and asserting that the parties' pleadings "fully
briefed" all issues necessary to render a decision); id. at 2 n.2
(requesting that the Commission "act to decide this case on the record
already before it"); id. at 3 (asserting that "the discussion herein is a
fully adequate basis for a ruling by the Commission"); id. at 5 (asserting
that CCI has stipulated or admitted to all material questions of law and
fact necessary to resolve this case); id. at 6 (asking the Commission to
resolve this proceeding on the pleadings); id. at 8 (urging the Commission
to issue a summary ruling without further briefing given that CCI has
stipulated to liability for the completed calls at issue and the parties
have fully briefed the issues in their pleadings); id. at 9 (requesting a
decision on the pleadings holding CCI liable as the Completing Carrier for
a total of $2,708,169).
June 29 Order, 25 FCC Rcd at 8227, para. 10.
Id.
See 47 C.F.R. S: 1.720 ("Formal complaint proceedings are generally
resolved on a written record consisting of a complaint, answer, and joint
statement of stipulated facts, disputed facts and key legal issues, along
with all associated affidavits, exhibits and other attachments.") In this
case, the record also contained CCI's responses to interrogatories. See
June 29 Order, 25 FCC Rcd at 8227, para. 10 & n.38 (citing CCI
Communications, LLC's Responses to Complainant's (1) Initial
Interrogatories and Requests for Production and (2) Second Set of
Interrogatories, File No. EB-09-MD-005, at 10 (filed Jan. 19, 2010))).
June 29 Order, 25 FCC Rcd at 8226-28, paras. 6-12.
Reply Memorandum at 4-5.
See, e.g., 47 C.F.R. S:S: 1.729(d) (stating that Commission staff will
consider discovery requests and objections thereto at the Initial Status
Conference); 1.729(h) (stating that the Commission "may" allow additional
discovery); see also Formal Complaints Order, 12 FCC Rcd at 22549, para.
115 ("[W]e eliminate the rule authorizing the parties to initiate
self-executing discovery."); id. at 22550, para 120 ("We disagree with the
argument that the Commission should provide discovery as a matter of
right . . . .").
See 47 C.F.R. S: 1.729(a) ("A defendant may file with the Commission and
serve on a complainant, during the period starting with the service of the
complaint and ending with the service of its answer, a request for up to
ten written interrogatories.").
Formal Complaints Order, 12 FCC Rcd at 22529, para. 70 ("The Commission's
rules have always required fact-based pleadings. That is, all complaints,
answers and related pleadings are required to contain complete statements
of fact, supported by relevant documentation and affidavits.").
See, e.g., 47 C.F.R. S:S: 1.720(a) ("All matters concerning a claim,
defense or requested remedy, including damages, should be pleaded fully
and with specificity."); 1.720(b) ("Pleadings must contain facts which, if
true, are sufficient to constitute . . . a defense" to allegations in a
formal complaint); 1.720(c) ("Facts must be supported by relevant
documentation or affidavit."); 1.724(b) (requiring the answer to "respond
specifically to all material allegations of the complaint . . . and state
in detail the basis for admitting or denying such averment"); 1.724(d)
(stating that "[a]verments in a complaint . . . are deemed to be admitted
when not denied in an answer"); 1.724(g) ("The answer shall attach copies
of all affidavits, documents, data compilations and tangible things in the
defendant's possession, custody, or control, upon which the defendant
relies or intends to rely to support the facts alleged and legal arguments
made in the answer.").
Reply Memorandum at 5. Even in the Application for Review, CCI provides no
documentation or factual support for its contention that the call traffic
in Radiant is distinguishable. See, e.g., Application for Review at 8
("While CCI acknowledges that the arguments presented herein are without
supporting documentation, cites and expert opinion, it is confident that
such could be obtained and presented in the appropriate forum.").
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