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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. ENF-00-0003
Global Crossing )
Telecommunications, Inc.
CONSENT DECREE
I. INTRODUCTION
The Enforcement Bureau of the Federal Communications Commission
(FCC or Commission), joined by the Office of General Counsel of
the Commission, hereby enter into this Consent Decree with Global
Crossing Telecommunications, Inc. (formerly Frontier
Communications Services, Inc. (Global Crossing)) for the purpose
of terminating an informal investigation by Commission staff.
The investigation at issue concerned whether further enforcement
action was warranted against Global Crossing in view of the
Commission's determination that Global Crossing violated section
276 of the Communications Act of 1934, as amended, and the
Commission's rules, in connection with its failure to pay per-
call compensation to certain payphone owners.
II. BACKGROUND
2.In the Payphone Orders,1 the Commission adopted rules and
policies governing the payphone industry to implement section 276
of the Telecommunications Act of 1996 (1996 Act). As part of that
proceeding, the Commission concluded that interexchange carriers
(IXCs) receiving calls originating from payphones should
compensate the PSP because the IXCs were the primary
beneficiaries of such calls. The Commission further concluded
that local exchange carrier (LEC) PSPs would be eligible to
receive compensation for completed calls originated from their
payphones once the LEC ``was able to certify'' that it had
complied with compensation eligibility prerequisites set forth in
the Order on Reconsideration.2
3.Bell Atlantic and other LEC PSPs submitted to Global
Crossing letters certifying that they had satisfied the
prerequisites set forth in the Order on Reconsideration. Global
Crossing refused to compensate the LEC PSPs on the basis of these
letters of certification, arguing that these LEC PSPs were not
eligible for such compensation. Bell Atlantic and other LEC PSPs
filed with the Commission formal complaints alleging that Global
Crossing had failed to pay payphone compensation. On September
24, 1999 and November 8, 1999, the Common Carrier Bureau issued
Orders resolving these complaints, finding that Global Crossing
was liable to the LEC PSPs for payphone compensation as required
by the Commission's Payphone Orders.3
4. Global Crossing filed Applications for Review of the
two Common Carrier Bureau Orders. Both applications
were resolved in a single Order on Review,4 in which
the Commission affirmed the Common Carrier Bureau's
orders. In addition, the Commission stated:
Having reviewed the facts and history of
these disputes reflected in the Bureau
Orders, we are troubled by self-help actions
taken by [Global Crossing] in an apparent
effort to delay payment of payphone
compensation mandated by the Act and our
rules. As detailed in the Bureau Orders, the
parties met with Bureau staff in June of 1998
to discuss [Global Crossing's] obligations to
pay payphone compensation, and specifically
the issues raised in these complaints.
During these meetings, the staff stated that
the Payphone Orders clearly mandated that
IXCs must compensate a LEC payphone service
provider upon receipt of the LECs'
certification of eligibility without further
inquiry or requirements. As discussed above,
it was made clear at that time that if
[Global Crossing] believed that a LEC had
failed to satisfy its prerequisites to
payphone compensation, the IXC was obligated
to file a complaint with the Commission to
that effect. Instead, [Global Crossing]
continued to engage in self-help by simply
refusing payment without bringing the matter
to the Commission for resolution.5
The Order on Review directed the Commission's Enforcement Bureau
``to investigate whether further enforcement action is warranted
against [Global Crossing] for apparent knowing or repeated
violations of Commission rules in relation to the facts in these
complaint proceedings.''6 Global Crossing strongly disagrees
with the Commission's conclusions and description of the history
of the dispute, and accordingly has filed a Petition for Review
of the Commission's Order in the U.S. Court of Appeals for the
District of Columbia Circuit. That petition is currently pending
before the Court.
5. Pursuant to the Commission's instructions in the Order
on Review, the Enforcement Bureau began an informal
investigation into these matters on May 23, 2000.7
6. The Bureau and Global Crossing wish to resolve this
investigation through the entry of this Consent Decree
without further administrative proceedings or
litigation.
III. DEFINITIONS
7. For the purposes of this Consent Decree, the following
definitions shall apply:
1. (a) ``Global Crossing'' or the ``Company'' shall mean
Global Crossing Telecommunications, Inc. and its interexchange
carrier affiliates, with the exception of Frontier Communications
of America, Inc.
(b) ``FCC" or "Commission'' shall mean the Federal
Communications Commission and all Bureaus and
offices of the Commission, including the
Enforcement Bureau.
(c) ``Parties'' shall mean the FCC Enforcement Bureau
and Office of General Counsel and Global Crossing.
(c) ``Adopting Order'' shall mean an Order of the
Enforcement Bureau adopting the terms and
conditions of this Consent Decree.
(d) ``Effective Date'' shall mean the date on which
the Enforcement Bureau adopts the Adopting Order.
(f) ``Appellate Litigation'' shall mean the proceeding
Global Crossing Telecommunications, Inc. v.
Federal Communications Commission and United
States of America, No. 00-1204 (D.C. Cir.).
(g) ``PSP'' shall mean payphone service provider.
(h) ``Bureau'' shall mean the Enforcement Bureau of
the FCC.
(i) ``Office of General Counsel'' shall mean the
Office of General Counsel of the Commission.
IV. AGREEMENT
8. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval through
incorporation of such provisions by reference in an
Adopting Order, which shall immediately terminate the
investigation.
9. As of the Effective Date, the Adopting Order and this
Consent Decree shall have the same force and effect as
any other order entered by the Commission, whether
directly or through properly delegated authority. Any
violation of the terms of this Consent Decree shall
entitle the FCC to exercise any and all rights, and to
seek any and all remedies, authorized by law for the
enforcement of an order entered by the Commission. The
Parties agree that any provisions of this Consent Decree
affected by or inconsistent with any subsequent rule or
order adopted by the Commission will be superseded by any
such subsequent rule or order.
10. Global Crossing admits the jurisdiction of the
Commission for purposes of this Consent Decree and any
Adopting Order.
11. Global Crossing agrees to waive any further procedural
steps and any rights it may have to seek judicial review
or otherwise to challenge or contest the validity of this
Consent Decree or the Adopting Order. Global Crossing
waives any rights it may have under any provision of the
Equal Access to Justice Act, 5 U.S.C. § 504.
12. The Bureau and Office of General Counsel acknowledge
that Global Crossing has sought review of the Order on
Review in the Appellate Litigation. The Bureau and the
Office of General Counsel acknowledge that Global
Crossing is entering into this Consent Decree entirely
without prejudice to any position that Global Crossing
may take in the Appellate Litigation. The Office of
General Counsel agrees that it shall not rely upon this
Consent Decree or the Adopting Order for any purpose in
the Appellate Litigation. In the event that any
intervenor in the Appellate Litigation seeks to rely on
the Consent Decree or the Adopting Order, the Office of
General Counsel agrees promptly to inform the Court that
in its view, neither document should have any bearing on
the outcome of the Appellate Litigation.
13. The Parties agree that by entering into this Consent
Decree, Global Crossing does not admit any legal or
equitable liability or any wrongdoing. Nothing herein
shall constitute findings as to the matters raised in the
investigation or constitute evidence of liability in any
section 208 complaint regarding Global Crossing's
compliance with section 276 of the Act.
14. In light of the covenants and representations contained
in this Consent Decree, and in express reliance thereon,
the Parties agree and acknowledge that the Consent Decree
shall constitute a final settlement of this investigation
without any finding of liability on the part of Global
Crossing. The Bureau agrees that, based on the facts
developed in its investigation and the absence of
material new evidence related to this matter, it will not
use the facts developed in the investigation through the
date of this Consent Decree, or the existence of this
Consent Decree, to institute on its own motion any new
proceedings, formal or informal, or to take any actions
on its own motion against Global Crossing covering the
matters that were the subject of the investigation.
Consistent with the foregoing, nothing in this Consent
Decree limits the Commission's authority to consider any
complaint that may be filed pursuant to section 208 of
the Communications Act, as amended, 47 U.S.C. § 208, and
to take any action in response to such complaint.
15. Global Crossing waives any and all rights it may have
to seek administrative or judicial reconsideration,
review, appeal or stay, or to otherwise challenge or
contest the validity of this Consent Decree and the Order
adopting this Consent Decree, provided the Order adopts
the Consent Decree without change, addition, or
modification.
16. The Parties agree that the terms and conditions of this
Consent Decree shall remain in effect for thirty-six (36)
months from the Effective Date.
17. Global Crossing shall, beginning with its payments of
per-call compensation for completed calls carried in the
fourth quarter of 2000 and for each quarter thereafter,
provide to each eligible PSP a list of the 800 numbers
which traversed Global Crossing's network upon which it
paid per-call compensation for that quarter and a list of
the 800 numbers which traversed the Global Crossing
network upon which it did not pay per-call compensation
for that quarter. For those 800 numbers upon which it
did not pay per-call compensation, Global Crossing shall
also provide the name of the carrier to whom all 800
number traffic was routed by Global Crossing. Global
Crossing's obligations under this paragraph shall not be
affected by the outcome of the Appellate Litigation.
Moreover, unless and until the U.S. Court of Appeals
holds that the Commission erred in its determination of
the requirements for compensation of PSPs, Global
Crossing shall abide by the Commission's prior ruling in
determining which PSPs are eligible for compensation.
18. Global Crossing agrees to deposit into an interest-
bearing escrow account the sum of eighty-thousand dollars
($80,000). Such deposit shall be made within ten (10)
business days of the entry of an Adopting Order. Global
Crossing shall promptly inform the Commission of the
identity of the escrow agent and the account number for
the escrow account.
19. In the event that the Court of Appeals holds that the
Commission erred in its determination of the requirements
for compensation of PSPs, Global Crossing may terminate
the escrow agreement at such time as the Court's order
becomes final and unappealable. In that event, Global
Crossing may retain the principal and any accumulated
interest thereon.
20. In the event that the Court of Appeals affirms the
Order on Review, Global Crossing shall, within ten (10)
business days of any dispositive order in the Appellate
Litigation having become final and unappealable, insure
that the Escrow Agent transfers to the United States
Treasury the principal and any accumulated interest
thereon then subject to the escrow arrangement, as a
voluntary payment on behalf of Global Crossing to the
United States Treasury. Payment shall be made by check
or money order drawn to the order of the Federal
Communications Commission, shall reflect File No. ENF-00-
0003, and shall be mailed to the Forfeiture Collection
Section, Finance Branch, Federal Communications
Commission, P.O. Box 73482, Chicago, Illinois 60673-7482.
21. This consent decree may be signed in counterparts.
FEDERAL COMMUNICATIONS GLOBAL CROSSING
COMMISSION TELECOMMUNICATIONS, INC.
By: ___________________________ By:
___________________________
David H. Solomon Michael J. Shortley, III
Chief, Enforcement Bureau Senior Associate General
Counsel & Senior Director-
Regulatory Services
Global Crossing North
America, Inc.
By: ___________________________
Christopher J. Wright
General Counsel
_________________________
1 Implementation of the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunications Act of 1996,
First Report and Order, 11 FCC Rcd 20,541 (1996) (Report and
Order); Order on Reconsideration, 11 FCC Rcd 21,233 (1996)
(Order on Reconsideration), aff'd in part and remanded in part
sub nom. Illinois Public Telecomm. Ass'n v. FCC, 117 F.3d 555
(D.C. Cir. 1997).
2 Order on Reconsideration at para. 131.
3 In the Matter of Bell-Atlantic Delaware, et al. v. Frontier
Communications, et al., Memorandum Opinion and Order, 14 FCC Rcd
16,050 (Com. Car. Bur. 1999) (Bell Atlantic Order); In the
Matter of Ameritech Illinois, U S West Communications, Inc., et
al., v. MCI Telecommunications Corporation, Memorandum Opinion
and Order, 14 FC Rcd 18,643 (Com. Car. Bur. 1999) (Ameritech
Order). The Bell Atlantic Order and Ameritech Order are jointly
referred to as the Bureau Orders.
4 In the Matter of Bell Atlantic Delaware, et al. v. Frontier
Communications, et al., Order on Review, 15 FCC Rcd 7,475
(2000).
5 Order on Review at para. 11.
6 Order on Review at para. 11.
7 See Letter from David H. Solomon, Chief, Enforcement Bureau to
Danny E. Adams and Steven A. Augustino, Kelley Drye and Warren,
LLP, and Michael J. Shortley and Martin T. McCue of Global
Crossing North America, Inc., dated May 23, 2000 (``May 23
Solomon Letter'').