On June 29, 2010, the Federal Communications Commission ("FCC" or "Commission") released an order directing CCI Communications, LLC ("CCI") to compensate Payphone Service Provider ("PSP") collection agent, APCC Services, Inc. ("APCC") for completed calls in the amount of $1,868,451, plus interest.  The order granted in part a formal complaint by APCC seeking compensation from CCI for completed payphone calls pursuant to Commission rules.  Originally, APCC sought damages for calls reported as completed by intermediate carriers to CCI as well as calls whose toll-free numbers were translated into local Plain Old Telephone Service ("POTS") numbers before being routed to CCI's network.  APCC later abandoned the latter claim to POTS-translated call compensation.

In its Answer, CCI admitted liability as a completing carrier for a portion of the calls identified by APCC in its complaint. It disputed, however, APCC's proposed computation methodology.  CCI urged the Commission to adopt a 120-second proxy, treating all calls over 120 seconds as completed.  APCC countered that precedent established in APCC v. Radiant should govern.  The Commission agreed with APCC.  It ordered CCI to pay APCC for all calls over 30 seconds and half of the calls lasting less than 30 seconds.  The Commission reasoned, consistent with Radiant, that because CCI presented unaudited call data, it should require CCI to compensate APCC not only for calls lasting 30 seconds or longer, but also for "a significant portion" of those calls lasting less than 30 seconds. The Commission rejected CCI's suggestion that a 120-second proxy was appropriate because a majority of its calls were international and allegedly failed to connect quickly, finding such calls at issue in Radiant in which the Commission adopted the 30-second proxy.At the default per-call rate of $0.494, the FCC assessed $1,868,451, plus interest.

CLIENT ADVISORY

The CCI Order demonstrates that the Commission continues to vigorously enforce dial-around compensation rules.  The Commission's adoption of the 30-second proxy for completed calls confirms that a carrier may use 30 seconds as its default benchmark for determining when a call connecting to its switches becomes compensable.  Furthermore, the Order highlights the importance of conducting regular and reliable audits of call data in order to support call records for payphone compensation purposes.  Carriers who are unable to provide such data may experience significant penalties in the form of additional liability for calls that cannot be accurately identified as completed or terminated.

If you have any questions regarding the FCC's Tollgate Rules governing payphone compensation, please contact the attorney assigned to your account.  Alternatively, you may reply to this message via e-mail, and someone will promptly respond to your inquiry.