**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| Glo Gem Productions, Inc.,       | ) | File No. E-98-30             |
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| Complainant,                     | ) |                              |
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| Metronet-Telecom, Inc. f/k/a,    | ) |                              |
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| Executone-Metronet, Inc.,        | ) |                              |
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| Defendant.                       | ) |                              |
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|                                  | ) |                              |
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**MEMORANDUM OPINION AND ORDER**

**Adopted:** July 6, 2000 **Released:** July 7, 2000

By the Chief, Enforcement Bureau:

# INTRODUCTION

1.  In this Memorandum Opinion and Order, we deny the complaint filed by
    Glo Gem Productions, Inc. ("Glo Gem") against Metronet-Telecom, Inc.
    ("Metronet").[^1] Glo Gem alleges that Metronet has engaged in an
    unjust and unreasonable practice in violation of Section 201(b) of
    the Communications Act of 1934, as amended ("the Act"), by allegedly
    adding four-tenths (.4) of a minute to each of Glo Gem's long
    distance calls without authorization from Glo Gem or notice in a
    tariff or agreement for telephone service. For the reasons discussed
    below, we conclude that Glo Gem has failed to meet its burden of
    demonstrating that Metronet has engaged in the allegedly
    unreasonable practice and, therefore, deny Glo Gem's complaint
    against Metronet.

    **II. BACKGROUND**

2.  Complainant Glo Gem is a concert promoter that purchases intrastate
    and interstate interexchange telecommunications services.[^2]
    Defendant Metronet is a switch-based reseller of intrastate and
    interstate interexchange and international telecommunications
    services. The parties do not dispute that Metronet is a common
    carrier subject to Title II of the Act.[^3]

3.  On April 28, 1994, Glo Gem entered in to an agreement with Metronet
    to purchase interexchange telecommunications services pursuant to an
    "Advantage Calling Plan" agreement. Metronet provided Glo Gem
    services under that agreement from May 1994 through September 1997.
    Prior to its agreement with Metronet, Glo Gem had obtained
    interexchange telecommunications services from Philmart
    Communications ("Philmart"), a switchless reseller of such
    services.[^4]

4.  Starting in January 1995, seven months after Glo Gem began
    purchasing services from Metronet, Glo Gem began receiving invoices
    for calls from Philmart, in addition to the Metronet invoices.[^5]
    Glo Gem continued to receive bills from both companies over the next
    seven months, until August 1995.[^6] Glo Gem offers no explanation
    in the record as to why Philmart began billing Glo Gem for service
    Glo Gem was allegedly purchasing from Metronet, nor why Glo Gem
    continued to be billed by both companies for an extended period of
    time. In any event, according to Glo Gem, a comparison of the bills
    revealed that, for each of the calls common to both bills, Metronet
    had assessed Glo Gem an additional four-tenths of a minute.[^7]

5.  On September 10, 1996, Glo Gem filed a complaint in the United
    States District Court for the Eastern District of Michigan against
    Metronet and Joseph Choma, Metronet's President, alleging mail fraud
    and violations of the Act.[^8] On January 23, 1997, the District
    Court dismissed the mail fraud allegation and all allegations
    against Joseph Choma individually. The District Court also found
    that the regulation of "telephone companies" is within the special
    competence of the FCC and, under the doctrine of primary
    jurisdiction, stayed the action to permit the Commission to rule on
    the reasonableness of Metronet's alleged conduct under section
    201(b) of the Act.[^9] On February 20, 1998, Glo Gem filed a
    complaint with the Commission based on the same facts at issue in
    the District Court case.

# DISCUSSION

6.  Glo Gem alleges that Metronet engaged in an unjust and unreasonable
    practice in violation of Section 201(b) of the Act by allegedly
    adding four-tenths of a minute to each of Glo Gem's long distance
    calls without authorization from Glo Gem or notice in any tariff or
    agreement for telephone service.[^10] Glo Gem seeks a determination
    from the Commission that Metronet's alleged addition of four-tenths
    of a minute to each call is an unjust and unreasonable practice in
    violation of section 201(b) of the Act and an order requiring
    Metronet to cease and desist from future violations of the Act.[^11]

## Reasonableness of Metronet's Practices

7.  Section 201(b) requires that all charges, practices, classifications
    and regulations for common carrier service be just and
    reasonable.[^12] Glo Gem argues that Metronet's alleged practice of
    adding four-tenths of a minute to every call is unreasonable because
    it is not related to any underlying costs and cannot be traced to
    any legitimate procedure as Metronet had no tariff on file
    reflecting this alleged practice.[^13] Moreover, Glo Gem maintains
    that Metronet has concealed and refused to explain to Glo Gem the
    alleged practice at issue.[^14] To support its allegations, Glo Gem
    has provided a total of 13 invoices that it received from both
    Metronet and Philmart over a seven-month period. Glo Gem has also
    attached affidavits by James Cox, Glo Gem's President, reiterating
    the allegations that Glo Gem asserts in its complaint. In addition,
    Glo Gem submits the advertising material it received from Metronet
    at the time Glo Gem decided to switch its long distance carrier from
    Philmart to Metronet.

8.  In response, Metronet denies that it has a practice of adding
    four-tenths of a minute or any other amount to each long distance
    phone call.[^15] Metronet further asserts that, to the best of its
    knowledge, it has accurately billed Glo Gem pursuant to the
    Advantage Calling Plan agreement, and in accordance with Commission
    rules and established industry practice, for the time recorded by
    Metronet's switch.[^16] Metronet explains that, during the relevant
    time period, it used a tape to obtain on a daily basis customer
    calling data recorded from its switch.[^17] Metronet attributes the
    discrepancy in the call lengths between the common calls on the
    Metronet and Philmart bills to a certain amount of expected and
    legitimate "call set-up time" that occurs from the operation of its
    switch. Metronet maintains that this resulting "call set up time"
    cannot be characterized as a deliberate practice.[^18]

9.  In a section 208 complaint proceeding, it is well-established that
    the complainant has the burden of proof with respect to each element
    of its claim.[^19] In this case, we find that Glo Gem has failed to
    demonstrate, by the preponderance of the evidence, that Metronet
    engaged in the practice forming the basis of this complaint;
    specifically, that Metronet improperly increased the length of time
    for interexchange calls billed by Metronet to Glo Gem. Glo Gem's
    evidence in support of its allegations boils down to a comparison of
    the invoices it received from both Metronet and Philmart for what
    apparently were the same calls. Yet, despite acknowledging that
    Metronet was its chosen provider of interexchange service, Glo Gem
    offers no explanation as to why it was being billed for these calls
    by Philmart. The other evidence offered by Glo Gem is either
    unhelpful or completely irrelevant. In particular, the affidavits
    submitted by Glo Gem's president simply reiterate the allegations in
    the complaint without any direct knowledge of Metronet's practices.
    In addition, Metronet's advertising materials submitted by Glo Gem
    are irrelevant to the resolution of the dispute since Glo Gem is not
    alleging that Metronet billed it at rates that were inconsistent
    with the Advantage Calling Plan. Rather, the question presented is
    the measurement of the length of those calls.

10. Having reviewed Glo Gem's remaining evidence and Metronet's
    response, we conclude that Glo Gem has failed to meet its
    burden.[^20] Metronet puts forth evidence concerning the processes
    by which it billed Glo Gem, as well as its other customers. Metronet
    further offers a reasonable explanation as to why its timing of
    calls may differ from Philmarts's, *even if* Philmart's bills
    accurately reflected Glo Gem's calls. Glo Gem offers no direct
    evidence challenging either Metronet's description of its billing
    processes or explanation for the discrepancy in call durations.

11. Moreover, we find that Glo Gem has failed to provide evidence from
    which we could conclude that the Philmart bills more accurately
    reflect the duration of the calls at issue than the bills issued by
    Metronet. As noted above, Glo Gem offers no explanation as to why
    Philmart started billing Glo Gem for these calls seven months after
    Glo Gem terminated Philmart as its preferred interexchange carrier.
    Nor does Glo Gem explain why only some of Glo Gem's interexchange
    calls allegedly appear on both the Philmart and Metronet bills; in
    other words, why some interexchange calls on the Metronet bill do
    not appear on the Philmart bill and *vice* *versa*. In light of its
    admission that Metronet was its chosen provider of interexchange
    service, Glo Gem was obligated, at a minimum, to explain these
    discrepancies before we could find the Philmart bills to be more
    reliable than the Metronet bills. We also note that Glo Gem offers
    no evidence as to how Philmart was obtaining the billing information
    it was using in the invoices to Glo Gem, given that, as a switchless
    carrier, Philmart could not have tracked Glo Gem's calls on its own.
    In sum, Glo Gem's allegations are not supported by the preponderance
    of the evidence. We reiterate the Commission's statement in the
    *Hi-Rim* case that "liability must be based on factual information,
    not unsupported allegations that require conjecture and surmise on
    our part."[^21]

    **B. Other Issues**

12. Metronet raises several affirmative defenses besides its defense
    that Glo Gem has failed to state a claim upon which relief may be
    granted.[^22] Additionally, Metronet filed a motion to dismiss Glo
    Gem's complaint for failing to meet its burden of proof.[^23]
    Because our ruling on the merits moots the necessity to consider
    Metronet's affirmative defenses and its motion to dismiss, we need
    not consider them.

    **IV. CONCLUSION AND ORDERING CLAUSES**

13. ACCORDINGLY, IT IS ORDERED, pursuant to Sections 4(i), 201(b), and
    208 of the Communications Act of 1934, as amended, 47 U.S.C. §§
    154(i), 201(b), and 208, and the authority delegated in sections
    0.111 and 0.311 of the Commission's rules, 47 C.F.R. 0.111, 0.311,
    that Glo Gem's formal complaint against Metronet IS DENIED and that
    this proceeding IS TERMINATED effective immediately upon the Release
    Date of this Order.

    FEDERAL COMMUNICATIONS COMMISSION

    David H. Soloman

Chief, Enforcement Bureau

[^1]: Metronet Telecom was formerly known as Executone-Metronet, Inc.

[^2]: *Glo Gem Productions, Inc. v. Metronet-Telecom, Inc*., File No.
    E-98-30, Complainant's Brief (filed Oct. 13, 1998) (Glo Gem's
    Brief), at 1.

[^3]: *Glo Gem Productions, Inc. v. Metronet-Telecom, Inc.,* File No.
    E-98-30, Joint Stipulation (filed Aug. 20, 1998) (Joint
    Stipulation), at ¶¶ 4, 11. *See* 47 U.S.C. § 153(10); 47 U.S.C. §§
    201 *et seq*.

[^4]: *Glo Gem Productions, Inc. v. Metronet-Telecom, Inc*., File No.
    E-98-30, Formal Complaint (filed Feb. 20, 1998) (Complaint), at ¶
    25.

[^5]: Affidavit of James Cox, President of Glo Gem Productions (dated
    February 19, 1998), at ¶¶ 9 & 10.

[^6]: Supplemental Affidavit of James Cox, President of Glo Gem
    Productions (dated October 10, 1998), at ¶ 6; Complainant's Brief,
    Appendices C and D, Invoices submitted by Metronet and Philmart to
    Glo Gem, dated January 1995 to August 1995.

[^7]: Affidavit of James Cox at ¶ 11. The Philmart bills assessed Glo
    Gem for only some of the same calls that Metronet billed to Glo Gem.
    The Philmart bills also contained other calls that were not
    reflected on the Metronet bills. Metronet's Initial Brief at 10. Glo
    Gem's Brief, Appendices C and D, Invoices submitted by Metronet and
    Philmart to Glo Gem, dated January 1995 to August 1995.

[^8]: *Glo Gem Productions, Inc. v. Joseph P. Choma,* No. 96-74233, slip
    op. at 2 n.1 (E.D. Mich., January 23, 1997). Glo Gem filed this suit
    on behalf of itself and all persons who have contracted with
    Metronet as their provider of interexchange telecommunications
    services. The Court has not issued a ruling regarding the
    appropriateness of Glo Gem's request to certify its lawsuit as a
    class action.

[^9]: *Id*. at 5, 6, 11-15.

[^10]: Complaint at ¶¶ 3 & 33. Glo Gem further alleges that Metronet's
    practice is not reflected in a tariff, as required by § 203 of the
    Act. Because Glo Gem does not seek relief pursuant to that section,
    we decline to consider this issue. In any event, Glo Gem's
    allegations of such violation would fail for the same reason as its
    claim under § 201(b), as they have not met their burden of proof.

[^11]: Complaint at ¶ 36. Although it has not sought specific damages in
    its complaint, Glo Gem states that it reserves its rights under
    sections 206 and 209 of the Act to seek specific damages. *Id*.

[^12]: 47 U.S.C. § 201(b). The Commission's general pleading rules and
    format requirements require complainants to describe "fully and
    clearly the specific act or thing complained of, together with such
    facts as are necessary to give a full understanding of the matter,
    including relevant legal and documentary support." *See* 47 C.F.R.
    §§ 1.721(b). *See also Hi-Rim Communications, Inc. v. MCI
    Telecommunications Corporation*, File No. E-96-18, 13 FCC Rcd 1982
    (1997) (*Hi-Rim*). The Commission's rules also provide that facts
    must be supported by affidavits or other relevant documentation. 47
    C.F.R. §§ 1.720(c).

[^13]: Complaint at ¶¶ 3 & 33.

[^14]: *Id*. at ¶ 34; Affidavit of James Cox at ¶ 14; Glo Gem's Brief at
    7.

[^15]: *Glo Gem Productions, Inc. v. Metronet-Telecom, Inc*., File No.
    E-98-30, Answer and Affirmative Defenses (filed Apr. 24, 1998)
    (Answer), at 3, ¶ 12.

[^16]: Answer at 5, ¶ 25; *Glo Gem Productions, Inc. v.
    Metronet-Telecom, Inc*., File No. E-98-30, Initial Brief of
    Defendant (filed Apr. 24, 1998) (Metronet's Initial Brief), at 11.

[^17]: Metronet's Initial Brief at 12.

[^18]: Metronet's Initial Brief at 8; *Glo Gem Productions, Inc. v.
    Metronet-Telecom, Inc,* File No. E-98-30, Reply Brief of Defendant
    (filed Nov. 9, 1998) (Metronet's Reply), at 6, 8. Metronet also
    disputes Glo Gem's contention that it refused to respond to inquires
    regarding the discrepancy on the bill and states that it had not
    received any notice regarding Glo Gem's dispute with the length of
    time billed until the complaint was filed in the District Court.
    Metronet's Initial Brief at 2-3.

[^19]: *See* *AT&T v. Northwestern Bell Telephone Co.*, 5 FCC Rcd 143,
    147 (1990); 47 C.F.R. §§ 1.720 -- 1.735.

[^20]: *See* Answer at 6, ¶ 1; Metronet's Initial Brief at 5.

[^21]: *Hi-Rim*, 13 FCC Rcd 1982, 1989 (1997).

[^22]: Answer at 6-7, ¶¶ 2-7.

[^23]: *Glo Gem Productions, Inc. v. Metronet-Telecom, Inc,* File No.
    E-98-30, Motion to Dismiss Formal Complaint (filed Oct. 13, 1998).