CommLaw Monitor News and analysis from Kelley Drye’s communications practice group Wed, 03 Jul 2024 07:28:54 -0400 60 hourly 1 FCC Prepaid Card Investigations Continue; Bureau Proposes $25,000 Fine for Non-Response Fri, 08 Feb 2013 11:07:28 -0500 After six NALs and an Enforcement Advisory, the FCC is not finished with prepaid calling card marketing practices. On February 7th, the Enforcement Bureau issued a Notice of Apparent Liability against a prepaid card provider for failing to respond to the Bureau's investigation. This action serves both as a reminder to carriers of the importance of responding fully to FCC investigations and as a warning to prepaid card carriers that, despite the previous actions, the FCC's investigations are likely to continue. Any provider that receives or has received an inquiry from the FCC Enforcement Bureau should carefully consider its response.

The entity receiving the NAL is Technical Communication Network (TCN), a small prepaid card provider in Clifton, New Jersey. A few things are particularly noteworthy about the NAL:

  • The Bureau remains active. According to the NAL, the investigation was started in February 2012, which was after the first five prepaid card NALs were issued but before the most recent NAL. Clearly, the Bureau continues to identify potential targets for investigation. Moreover, the fact that the NAL orders the provider to respond substantively to the investigation suggests that the Bureau is actively pursuing additional enforcement of prepaid card marketing practices.
  • $25,000 is not the new base forfeiture. The NAL notes that the base forfeiture for a failure to respond to a Commission communication is $4,000. It applies an upward adjustment because it found the carrier's misconduct "egregious, intentional and continuous." Despite a few recent cases proposing similar $25,000 fines, the base forfeiture has not changed here.
  • The NAL orders a response within an unusually short time period. While the NAL portion of the order grants the TCN the usual 30 days to respond to the proposed fine, the Bureau provides only 10 calendar days to respond to the questions raised in the LOI.

Clearly, the prepaid card marketing issue is not closed. Not only has the FCC not resolved the six pending forfeitures (at $5 million each), but it appears ready to continue issuing NALs for failure to provide adequate disclosures in marketing materials.

FCC Proposes $25,000 Fine for Failure to Respond to Investigation Mon, 12 Dec 2011 11:10:14 -0500 On Friday, the FCC proposed a $25,000 fine against a carrier that failed to respond to a Commission investigation. In the NAL, the Enforcement Bureau stated that Net One International had failed to respond to a letter of inquiry launching an investigation into its practices. According to the NAL, the Bureau sent the letter of inquiry via certified mail, and the letter was signed for at the company's headquarters. In addition, the Bureau attorney handling the investigation sent an email after the response date had passed, providing a second deadline for the company to respond. Thus, the company was given two chances to respond before the Bureau issued the NAL.

The Bureau proposed a fine of $25,000 for the failure to respond, and ordered the company to respond to the letter of inquiry within 10 days.

The NAL is significant in two respects. First, the proposed fine is $25,000, which is an upward adjustment from the $4,000 standard fine contained in the Forfeiture Guidelines. In addition, the fine is greater than the $20,000 failure to respond fines the Bureau had used a few years ago. The Bureau justified the increase amount as appropriate due to Net One's "apparent disregard for the Commission's authority and investigatory process."

Second, the subject matter of the investigation was described as "[Net One's] billing practices and its offering of prepaid calling card services." This investigation was initiated in July 2011, well after its earlier prepaid card marketing investigations, and roughly at the time that the Bureau was presenting to the full Commission proposed $5 million fines for prepaid card marketing practices. The timing suggests that the Enforcement Bureau is not finished with its examination of prepaid card providers. Presumably, more investigations of prepaid card providers are pending at this time.