The Federal Communications Commission ("FCC" or "Commission") recently issued letters to various prepaid calling card providers ("PCCPs") inquiring into their marketing practices.  The letters request detailed information relating to PCCPs' provisioning of prepaid calling card services, including descriptions of the channels through which the cards are distributed and marketing activities. The FCC also asked for supportive documentation, including contracts and rate decks.  Carriers must respond within 30 days, and each response must be signed by an officer of the responding entity.

The FCC's recent actions represent the Commission's first substantive inquiry into PCCPs' marketing activities.  Whereas previously, enforcement actions against PCCPs have been achieved through private litigation, or in some instances, the Federal Trade Commission ("FTC"), the FCC appears poised to act directly against PCCPs. 

Through this inquiry, the FCC intends to substantively review PCCPs' prepaid calling card disclosures.  Whereas the FCC's authority to conduct these investigations likely stems from Section 201 of the Communications Act, which requires carriers to use "just and reasonable" practices, the Commission, in its letters, bases its jurisdictional authority to examine PCCPs' disclosures on its general authority to regulate common carriers under the Act, likely in order to preserve defenses to various challenges to its authority that may arise.  The Commission failed to cite to any specific provision of the Act or its Truth in Billing rules. 

The actions taken may be an attempt by the FCC to protect from encroachment by the FTC on its jurisdiction.  The FTC, which has taken aim generally at false and deceptive trade practices, has no general authority to regulate common carriers.

CLIENT ADVISORY

Clients that have received an inquiry from the FCC or who wish to discuss the implications of the Commission's actions should contact Jonathan S. Marashlian at jsm@commlawgroup.com or (703) 714-1313.