Before the

Federal Communications Commission

Washington, D.C. 20554

APCC Services, Inc., Davel Communications, )

Inc., ETS Payphones, Inc., Goldentel, Inc., )

Kellee Communications Group, Inc., )

NSC Communications Public Services )

Corporation, PayTel Communications, Inc., )

and West Coast Coin, Inc., )

> )

Complainants, )

> )

v\. ) File No. EB-05-MD-002

> )

IDT Corporation, )

)

Respondent. )

Memorandum opinion and order

Adopted: July 11, 2006 Released: July 11, 2006

By the Chief, Enforcement Bureau:

# Introduction

1.  In this order, we address a formal complaint[^1] filed by APCC
    Services, Inc. ("APCC"), and several payphone service providers
    against IDT Corporation ("IDT") pursuant to section 208 of the
    Communications Act of 1934, as amended ("Act").[^2] The Complaint
    alleges that IDT violated sections 201(b) and 416(c) of the
    Communications Act[^3] by failing to produce certain documents as
    required by rule 47 C.F.R. § 64.1320(g). Because IDT provided those
    documents to APCC after the Complaint was filed, however, the
    Complaint is moot and, accordingly, we dismiss it.

# Background

## The Parties

2.  Complainants Davel Communications, Inc., ETS Payphones, Inc.,
    Goldentel, Inc., NSC Communications Public Service Corporation, West
    Coast Coin, Inc., Kellee Communications Group, Inc., and PayTel
    Communications, Inc. (collectively, the "PSP Complainants") are
    payphone services providers. APCC is an agent of the PSP
    Complainants, and of other payphone service providers, for the
    billing and collection of dial-around compensation.[^4]

3.  IDT is a common carrier providing interexchange telecommunications
    services. IDT is also a "Completing Carrier," as defined by section
    64.1300(a) of the Commission's rules.[^5]

## The Relevant Law

4.  The Commission's payphone compensation rules are designed to ensure,
    *inter alia,* that payphone service providers are fairly compensated
    for coinless calls originated from their payphones.[^6] For the
    period at issue here, those rules require that the last
    facilities-based long distance carrier in a call path, the
    "Completing Carrier," compensate the payphone service provider for
    coinless calls that are completed by that carrier.[^7]

5.  To help ensure accurate reporting of calls (and, thus, accurate
    payment for those calls), the Commission's rules require a
    Completing Carrier to establish detailed procedures for tracking and
    paying compensation for payphone-originated calls.[^8] The
    Commission's rules also require Completing Carriers to engage an
    independent third-party auditor to prepare a "System Audit Report"
    verifying the accuracy and reliability of the call tracking
    system.[^9] Completing Carriers must submit their System Audit
    Reports to, among others, the Commission and all payphone service
    providers for which they complete calls.[^10] In addition, the rules
    require that "\[s\]ubject to protections safeguarding the auditor's
    and the Completing Carrier's confidential and proprietary
    information, the Completing Carrier shall provide, upon request, to
    the payphone service provider for inspection any documents,
    including working papers, underlying the System Audit Report."[^11]
    This provision lies at the heart of the dispute in the instant case.

## The Facts

6.  On July 1, 2004, IDT filed its first System Audit Report with the
    Commission.[^12] On September 14, 2004, APCC sent IDT a letter
    requesting, on behalf of APCC's unidentified payphone service
    provider principals, that IDT provide all documents underlying its
    System Audit Report. This letter initiated subsequent correspondence
    between the parties about the terms under which IDT was prepared to
    make the audit documents available.[^13] For instance, IDT insisted
    that APCC identify the payphone service providers on whose behalf it
    was making the request, and asked for documentation of APCC's
    authority to do so.[^14] Another point of contention was the
    location at which the audit documents would be produced. IDT
    indicated that it would make the documents available only at its New
    Jersey headquarters, while APCC demanded that IDT send copies of the
    documents to APCC in Washington, D.C.[^15]

## The Complaint

7.  On February 1, 2005, while the parties were still discussing
    production of the documents, APCC and the PSP Complainants filed
    their Complaint with the Commission. The Complaint alleges that IDT
    violated sections 201(b) and 416(c) of the Communications Act by
    engaging in a "dilatory and obstructive pattern of conduct" in
    response to APCC's request for documents underlying the System Audit
    Report, and by failing to provide those documents to APCC or to the
    PSP Complainants.[^16] The Complaint does not request payment of
    damages. The Complaint asks only that the Commission find that IDT
    violated rule 64.1320(g) and the Act and order IDT "either to
    deliver copies of the Underlying Documents to Complainants'
    attorneys, or alternatively, to allow Complainants to inspect the
    documents in Washington, D.C., and to request and receive copies of
    such documents, subject to the condition that Complainants
    reasonably compensate IDT for such copies, all in accordance with
    the protective agreement provided by Complainants."[^17]

    **E. The Motion to Dismiss**

8.  After the Complaint was filed, the parties continued discussions
    about IDT's production of the requested documents. A few months
    later, in June 2005, the parties agreed upon terms for disclosure of
    the audit documents to the Complainants.[^18] IDT then filed a
    Motion to Dismiss the Complaint,[^19] asserting that since the
    requested documents have now been made available to the
    Complainants, there is no longer any effective relief for the
    Commission to grant.[^20] IDT argues that any guidance as to rights
    and responsibilities under rule 64.1320(g) should be determined in a
    rulemaking, where all interested parties would have a right to
    participate.[^21]

9.  Complainants, however, oppose the Motion to Dismiss on three bases.
    First, they assert that the challenged action is "capable of
    repetition, yet evading review," and thus dismissal of the Complaint
    would encourage IDT "to repeat its dilatory and obstructive conduct"
    in response to future requests.[^22] Second, they assert that there
    is a continuing adverse impact on them because they were harmed by
    the delay in obtaining the audit documents.[^23] And finally,
    Complainants assert that the Commission can grant effective relief
    because IDT may have, "by design or mistake," failed to produce all
    of the documents, such that an explicit Commission order to produce
    them is still necessary.[^24] Complainants also argue that the
    Article III case-or-controversy requirement is applicable only to
    federal courts, not to the Commission.[^25]

# discussion

10. As Complainants correctly point out,[^26] section 208 complaints are
    not governed by Article III "case or controversy" standards.[^27]
    Nevertheless, we can and do dismiss complaints when the issues
    raised therein have become moot.[^28] Thus, we consider whether
    there is any remaining controversy in this case, and whether any
    effective relief can be granted.

11. As stated above, Complainants assert that there is a continuing
    controversy here, either because they continue to be adversely
    impacted by IDT's actions, or because the violation at issue is
    "capable of repetition yet evading review." In addition,
    Complainants argue that "\[i\]t is quite possible that either IDT or
    its auditor, whether by design or mistake, has failed to produce all
    the documents whose production is required,"[^29] and that therefore
    the Commission can and should grant relief by explicitly directing
    IDT to produce all underlying documents. We find, however, that
    there is no continuing controversy, and that there is no longer any
    effective relief that we can grant in this case. Complainants did
    not request monetary damages, and have already obtained the relief
    they requested -- access to IDT's audit documents. Accordingly, at
    this point, any ruling on whether IDT may have violated the Act and
    our rules would have no concrete impact in this particular case.

12. Complainants assert that they need a specific Commission order
    directing IDT to provide the audit documents in order to protect
    against the possibility that IDT has withheld some of those
    documents, either inadvertently or wilfully. We disagree.
    Complainants offer only speculation to suggest that they have not
    been given all of the audit documents. IDT is already subject to a
    Commission rule directing that it make those documents available to
    payphone service providers. We expect them to comply with that rule.
    Thus, we find that another Commission order directing them to do so,
    when we have no reason to believe that they are withholding
    documents, is unnecessary.

13. We also reject Complainants' assertion that this case is not moot
    because the action challenged is "capable of repetition, yet evading
    review."[^30] As applied by the courts, this is a narrow exception
    to the "case or controversy" requirement, applicable only in
    "'exceptional situations' . . . where the following two
    circumstances \[are\] simultaneously present: '(1) the challenged
    action \[is\] in its duration too short to be fully litigated prior
    to its cessation or expiration, and (2) there \[is\] a reasonable
    expectation that the same complaining party would be subjected to
    the same action again.'"[^31] Complainants have not demonstrated
    such circumstances here. As to the duration of the challenged
    action, Complainants seem to consider it sufficient to speculate
    that IDT could choose to cease the offending behavior prior to the
    conclusion of a complaint proceeding. That is the case, however, in
    all complaint proceedings. The "capable of repetition" exception was
    meant to address actions that are inherently too short to be
    litigated.[^32] Moreover, Complainants offer nothing other than
    speculation that IDT will subject them again to the circumstances of
    this case.[^33] This is not enough to persuade us that we should
    issue a decision concerning a dispute that has become moot.

14. Nevertheless, to facilitate prompt production of audit documents in
    future cases, we provide the following guidance. First, we believe
    that it is reasonable to expect that a party requesting documents
    under rule 64.1320(g) will specifically identify on whose behalf it
    makes the request. Second, we note that rule 64.1320(g) effectively
    requires the Completing Carrier to permit payphone service providers
    to *copy* the audit documents, at the payphone service providers'
    expense, not merely to examine them. We agree with APCC that given
    the complex and technical nature of the documents at issue, it would
    be unduly burdensome to expect payphone services providers to
    conduct their "inspection" of audit documents entirely on the
    Completing Carrier's premises, and without any copies to mark up. To
    the extent that copying raises greater issues of safeguarding
    confidential information than does on-site inspection, we expect
    parties to be able to address this in their nondisclosure
    agreements.[^34] And finally, we note that rule 64.1320(g)
    effectively requires Completing Carriers to ensure that their
    auditors are contractually obligated to provide the documents
    covered by the rule if a payphone service provider requests them.
    This obligation can readily be imposed when the auditor is engaged;
    if the Completing Carrier fails to take this step, then any
    "impossibility" of compliance will be of its own making. If the
    auditor failed to live up to its contractual obligation, we would
    consider whether the Completing Carrier had taken all reasonable
    steps to enforce compliance before we would excuse its failure to
    provide the documents as "impossible." In this case, it appears that
    IDT did, in fact, take steps to ensure that its auditors would
    provide the necessary documents. *See* IDT's Initial Brief at 14-15.

15. We find that there is no remaining dispute in this case, and no
    requested relief remaining for us to grant. Accordingly, we dismiss
    the Complaint as moot.

# Ordering Clause

16. Accordingly, IT IS ORDERED, pursuant to sections 4(i), 4(j), and 208
    of the Communications Act of 1934, as amended, 47 U.S.C. §§ 254(i),
    154(j), and 208, sections 1.720-1.736 of the Commission\'s rules, 47
    C.F.R. §§ 1.720-1.736, and the authority delegated in section 0.111
    and 0.311 of the Commission\'s rules, 47 C.F.R. §§ 0.111 and 0.311,
    that the

    Defendant's Motion to Dismiss IS GRANTED, that the Complaint IS
    DISMISSED WITH PREJUDICE as moot, and that this proceeding IS
    TERMINATED.

FEDERAL COMMUNICATIONS COMMISSION

Kris A. Monteith

Chief, Enforcement Bureau

[^1]: Complaint, File No. EB-05-MD-002 (filed Feb. 1, 2005)
    ("Complaint").

[^2]: 47 U.S.C. § 208.

[^3]: 47 U.S.C. §§ 201(b), 416(c).

[^4]: Revised Joint Statement of Stipulated Facts, Disputed Facts, and
    Key Legal Issues, File No. EB-05-MC-002 (filed May 13, 2005)
    ("Revised Joint Statement") at ¶¶ 9-10. *See generally* 47 C.F.R. §§
    64.1300-64.1320 for rules governing payphone compensation
    obligations. [ ]{.mark}

[^5]: Revised Joint Statement at ¶ 11; 47 C.F.R. § 64.1300(a) (defining
    a "Completing Carrier" as "a long distance carrier or switch-based
    long distance reseller that completes a coinless access code or
    subscriber toll-free payphone call or a local exchange carrier that
    completes a local, coinless access code or subscriber toll-free
    payphone call").

[^6]: *See, e.g., In the Matter of the Pay Telephone Reclassification
    and Compensation Provisions of the Telecommunications Act of 1996,*
    19 FCC Rcd 21457, ¶ 1 (2004) (subsequent history omitted)("*October
    2004 Payphone Order*"); *see also* 47 U.S.C. § 276; 47 C.F.R. §§
    64.1300-64.1320.

[^7]: *See, e.g., October 2004 Payphone Order* at ¶ 2; *see also* 47
    C.F.R. § 64.1300.

[^8]: 47 C.F.R. § 64.1310(a)(1).

[^9]: 47 C.F.R. § 64.1320(a).

[^10]: *See* 47 C.F.R. § 64.1320(b). Completing Carriers can comply with
    the requirement to submit the report to payphone service providers
    by posting a copy on either their website or a clearinghouse
    website. 47 C.F.R. § 64.1320(b)(2).

[^11]: 47 C.F.R. § 64.1320(g).

[^12]: Revised Joint Statement at ¶ 12; Complaint Exh. 2.

[^13]: Complaint Exhs. 3-11.

[^14]: Complaint Exh. 7 at 2, Exh. 10 at 1.

[^15]: Complaint Exhs. 7, 8, 9, and 11.

[^16]: Complaint at 17-19.

[^17]: *Id.* at 61.

[^18]: *See* IDT's Motion to Dismiss, File No. EB-05-MD-002 (filed June
    30, 2005) ("Motion to Dismiss") at 2; *see also* Complainants'
    Opposition to IDT's Motion to Dismiss, File No. EB-05-MD-002 (filed
    July 25, 2005) at 3.

[^19]: The Motion to Dismiss was filed after the Complaint, Answer, and
    Reply had all been filed, but shortly before the parties filed their
    Opposing Briefs and Reply Briefs in the case.

[^20]: Motion to Dismiss at 1-5. IDT also asserts that APCC's claims
    should be dismissed because APCC, which is not a payphone service
    provider, lacks standing to assert that it was denied the right to
    inspect the audit documents. Motion to Dismiss at 4-5. Because we
    dismiss the Complaint as moot, this issue is also moot.

[^21]: Motion to Dismiss at 5-9.

[^22]: Complainants' Opposition to IDT's Motion to Dismiss at 2.

[^23]: *Id.* at 2-3.

[^24]: *Id.* at 3.

[^25]: *Id.* at 4-5.

[^26]: *Id.*

[^27]: *See, e.g., North Carolina Utilities Comm. v. FCC*, 537 F.2d 787,
    791 (4^th^ Cir. 1976) (holding that federal administrative agencies
    are not restricted to adjudication of matters that are "cases and
    controversies" within the meaning of Article III of the
    Constitution).

[^28]:
    > *See, e.g.,* *Total Telecommunications Services, Inc. v. AT&T
    > Corporation,* 16 FCC Rcd 5726 (2001) (dismissing claims as moot
    > because there was no additional relief that could be granted),
    > *remanded,* 317 F.3d 227 (D.C. Cir. 2003) (to explain dismissal of
    > claim as "moot, *without prejudice*" (emphasis added)), *dismissed
    > on motion of parties,* 18 FCC Rcd 11533 (Enf. Bur. 2003);
    > *Transglobal Telcom, Inc. v. E-Tel, Inc.,* 16 FCC Rcd 21576 (Enf.
    > Bur. 2001) (dismissing complaint as moot where challenged action
    > had ceased and plaintiff had not requested damages) *National
    > Wireless Resellers Ass'n v. AirTouch Communications, Inc.,* 15 FCC
    > Rcd 13826 (Wireless Tel. Bur. 2000) (dismissing complaint as moot
    > where the challenged program had been discontinued); *see also
    > AT&T v. BellSouth,* 19 FCC Rcd 23898 (2004) (dismissing certain
    > counts of a complaint on grounds that no additional relief could
    > be afforded even if the Commission ruled in the complainant's
    > favor).

[^29]: Complainants' Opposition to IDT's Motion to Dismiss at 3.

[^30]: *Id.* at 2. Although, as explained above, we are not governed by
    Article III concepts of standing and mootness, we address
    Complainants' argument here under Article III precedent because they
    have framed their argument in this context.

[^31]: *Lewis v. Continental Bank Corp.,* 494 U.S. 472, 481 (1990)
    (citations omitted).

[^32]: *See, e.g., Spencer v. Kemna,* 523 U.S. 1 (1998) (holding that
    the exception is inapplicable where party failed to show that
    duration of action is *always* so short as to evade review).

[^33]: *See, e.g., City of Los Angeles v. Lyons*, 461 U.S. 95, 109
    (1983) ( "\[T\]he capable-of-repetition doctrine applies only in
    exceptional situations, and generally only where the named plaintiff
    can make a reasonable showing that he will again be subjected to the
    alleged illegality.").

[^34]: We note that these document production requirements are all
    "\[s\]ubject to protections safeguarding the auditor's and the
    Completing Carrier's confidential and proprietary information," as
    set forth at 47 C.F.R. § 64.1320(g).