On September 16, the Federal Communications Commission issued a Notice of Apparent Liability (“NAL”) against PTT Phone Cards, Inc., (“PTT”) for a litany of alleged violations of rules applicable to international telecommunications carriers in general and one applicable to pre-paid calling card providers in particular. In short, the NAL alleges that, for over three years, PTT violated “virtually all of [the] regulatory obligations” applicable to international carriers and one specifically applicable to pre-paid calling card providers. The proposed forfeiture of $493,327 was arrived at through a straightforward application of the Commission’s base forfeiture amounts or penalties that the agency has recently applied for similar violations. While the Commission normally considers mitigating and aggravating factors to adjust penalties downward or upward, in the NAL it did not expressly do so, despite what it called “PTT’s apparent pattern of noncompliance” and “the seriousness, duration, and scope of PTT’s apparent violations.”  Instead, it simply proposed standard penalties for each apparent violation, giving a casebook glimpse into what awaits entities that provide international and/or calling card services without first obtaining necessary FCC authority and without making requisite filings with the Commission, contributions into applicable federal funds, and payments of federal regulatory fees.
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A carrier’s failure to comply with its letter of assurance or national security agreement may jeopardize its international Section 214 license.  In nearly unprecedented enforcement actions, the U.S. Department of Justice, Federal Bureau of Investigation, and U.S. Department of Homeland Security (collectively “Team Telecom”), have recently requested that the Federal Communications Commission (“Commission”) terminate, or declare null and void, the international Section 214 authorization of two carriers for failure to comply with agreed upon conditions reflected in the carriers’ letters of assurances (“LOA”).  Responding to Team Telecom’s request, in a pair of Public Notices released on June 27, 2014, the Commission directed Wypoint Telecom, Inc. (“Wypoint”) and ACT Telecommunications, Inc. (“ACT”) to respond, by July 11, 2014, to the Team Telecom allegations of noncompliance and stated that failure to respond would be deemed an admission of the allegations and could result in a show cause order.  International service providers subject to Team Telecom compliance obligations should view these revocation requests as a warning that Team Telecom is actively monitoring carrier compliance with agreed upon conditions and noncompliance will be strictly enforced.  Moreover, although not explicitly stated, we anticipate that a carrier whose international 214 authorization is revoked for failure to comply with commitments made to United States security agencies would not be granted another authorization or would be subject to significantly more stringent conditions.
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By Order dated April 22, 2014, the Federal Communications Commission (“FCC”) eliminated the effective competitive opportunities (“ECO”) Test applicable to certain foreign carriers and submarine cable landing licensees.  Going forward, once the rule changes become effective, international Section 214 applications and cable landing license applications filed by foreign carriers or licensees or their affiliates

Earlier this week, the Federal Communications Commission released an order affirming the International Bureau’s 2009 order directing all U.S. facilities-based carriers within the FCC’s jurisdiction to stop payments to Tonga Communications Corporation (“TCC”) for termination of switched voice service (“Stop Payment Order“) on the U.S.-Tonga route. The April 7 Memorandum Opinion and Order affirmed the Bureau’s conclusion that TCC’s significant increase in its rates for terminating traffic on the U.S.-Tonga route – even if ordered by the Tongan government – and its disruption of AT&T’s and Verizon’s circuits to Tonga each constituted anticompetitive conduct that harmed U.S. consumers and were contrary to the public interest. The FCC also rejected TCC’s contention that the Stop Payment Order constituted unauthorized extraterritorial regulation of TCC on the grounds that only U.S. international carriers were subject to the order.
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Earlier this month, the FCC simplified the information that must be provided in certain international reports, action that should be welcomed by many carriers that have been subject to these reporting requirements.  The FCC’s Second Report and Order (“Second Streamlining Order”) in IB Docket No. 04-112 built on its May 2011 First Report and Order and Further Notice of Proposed Rulemaking eliminating or revising certain international reporting obligation.  As a result of this latest action, most international telecommunications carriers will be required, once the new rules take effect, to file annual International Traffic and Revenue reports and Circuit Status reports (collectively, the “Annual International Reports”) under a streamlined Section 43.62 of the FCC’s Rules.  The Second Streamlining Order directs the International Bureau to establish and maintain a consolidated filing manual reflecting the rulings in the Second Streamlining Order.

The Second Streamlining Order does impose requirements on some new classes of providers.  It extends the requirement to file the Traffic and Revenue Report to providers of both international interconnected Voice over Internet Protocol (“VoIP”) service and international “one-way” VoIP services.  One-way VoIP services are those VoIP providers that permit users either to receive calls from or place calls to the public switched telephone network, but not both.  The Second Streamlining Order also requires for the first time a Circuit Status report from all submarine cable licensees, not just licensees that are common carriers, as well as for international common carrier terrestrial and satellite circuits of facilities-based common carriers and the non-common carrier circuits of satellite operators.

The Annual International Reports will retain their current separate filing deadlines — March 31 for the Circuit Status Report and July 31 of the Traffic and Revenue Report. The effective date of the rule changes is currently unknown; it is at present unclear if the requirements will go into effect in time for the filing of either of the International Reports this year.  The Office of Management and Budget must first approve the reporting and filing changes.  The FCC expressly directed parties in the Second Streamlining Order to continue filing the Annual International Reports pursuant to its existing rules until it announces the new reporting requirements have become effective.


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On October 11, the FCC proposed to fine Unipoint Technologies, Inc. d/b/a Comfi.com nearly $180,000 for various violations of the Communications Act and the Commission’s rules.  In many ways, we’ve seen this type of enforcement before.  Unipoint, a prepaid calling card provider, is accused of failing to obtain a 214, failing to file Form 499-A revenue reports and failing to pay TRS Fund contributions. 

The NAL is novel in a few ways worthy of mention on this blog.  First, it marks the first time that the FCC has proposed fines for failing to file international traffic reports.  Second, the Enforcement Bureau continues its aggressive interpretation of violations, this time proposing a fine for a violation that lasted a mere three weeks.  Finally, the NAL raises once again the tricky issue of self-disclosure of violations.  Carriers that learn of violations that have occurred should contact experienced FCC counsel promptly to come into compliance and mitigate their forfeiture exposure.

Continue reading below for a more detailed discussion of the Unipoint NAL.


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 On December 7, the FCC adopted a consent decree with an international carrier resolving several alleged transfers of FCC authorizations without prior approval.  This marks the latest in a series of enforcement actions in the area of ownership violations.  Many of these involve carriers providing foreign terminations.   The consent decree underscores the importance for all regulated carriers to monitor changes in ownership, even pro forma changes, and to seek prior FCC approval for the changes. 


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It has taken nearly a year since the FCC’s Public Safety Bureau first started laying the groundwork, but the FCC is poised to consider expanding its outage reporting rules to cover interconnected VoIP communications and broadband Internet access providers.  The Commission will consider a Notice of Proposed Rulemaking to extend the outage reporting rules at