**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  |                              |
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| AT&T Communications              | ** |                              |
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| Apparent Liability for           | *  |                              |
| Forfeiture and                   | *) |                              |
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| Order to Show Cause              |    |                              |
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+----------------------------------+----+------------------------------+

**ORDER**

**Adopted: January 13, 2004 Released: January 15, 2004**

By the Commission:

# INTRODUCTION

1.  On January 4, 1995, the Commission initiated an enforcement action
    pursuant to section 503(b) of the Communications Act of 1934, as
    amended (Act),[^1] against AT&T Communications (now AT&T Corporation
    or AT&T) by issuing a Notice of Apparent Liability for Forfeiture
    (*NAL*).[^2] The *NAL* found that AT&T was apparently liable for a
    forfeiture in the amount of \$1,000,000 for willfully and repeatedly
    violating section 201(a) of the Act[^3] by failing to provide
    communications service under Contract Tariff FCC No. 383 after
    receiving orders for this service from three resellers, Public
    Service Enterprises, Inc. (PSE), Tel-Save, Inc. (Tel-Save), and
    General Electric Capital Communications Systems, Inc. (GECCS).[^4]
    The Commission also ordered AT&T to show cause why it should not be
    required to provide service to these resellers.[^5] On February 3,
    1995, AT&T filed a response to the *NAL* stating that technical
    infeasibility and the resellers' own conduct prevented AT&T from
    provisioning the ordered service.[^6] On December 11, 1995 PSE and
    GECCS filed comments in reply to AT&T's response.[^7] On January 11,
    1996, AT&T filed a reply to the comments of PSE and GECCS.[^8] In
    this order we cancel the proposed forfeiture and dismiss the order
    to show cause.

# BACKGROUND

2.  On August 9, 1993, AT&T filed Contract Tariff 383 with the
    Commission.[^9] Contract Tariff 383 offered larger volume customers
    with a minimum amount of quarterly usage certain quarterly usage
    credits of 10 percent and 15 percent on their quarterly charges.
    Shortly after the tariff become effective on August 23, 1993, PSE,
    Tel-Save and GECCS ordered service under the tariff, and AT&T
    acknowledged receipt of these orders.[^10] After some dispute
    between AT&T and the three resellers about whether the two usage
    credits offered under the tariff applied cumulatively or
    alternatively, AT&T agreed to allow PES, Tel-Save, and GECCS to
    receive both credits cumulatively. A revised tariff allowing only
    alternative discounts subsequently became effective on November 16,
    1993.[^11] As of December 1994, however, AT&T had not yet provided
    service under Contract Tariff 383. [^12] The Commission issued the
    *NAL* on January 4, 1995, because, among other reasons, it was
    unaware of any satisfactory explanation for AT&T's failure to
    provide the requested service for 17 months after AT&T filed
    Contract Tariff 383.[^13]

3.  After issuance of the *NAL*, GECCS, in February 1996, filed a formal
    complaint against AT&T for failing to provide the requested
    service.[^14] The Commission's Common Carrier Bureau dismissed the
    formal complaint, finding that GECCS had not met its burden to
    demonstrate that AT&T acted unreasonably in refusing to undertake
    the substantial and burdensome redesign of its network that would
    have been required to provide the requested service in the precise
    manner that GECCS desired.[^15] Thus the Bureau declined to rule
    that AT&T violated section 201 of the Act or the Commission's resale
    policies.[^16] In so ruling, the Bureau stated: "Our disposition of
    GECCS's complaint resolves the issues presented in the portion of
    the *NAL* proceeding relating to GECCS. Accordingly . . . we
    conclude that our ruling in this matter fully disposes of the *NAL*
    as it relates to AT&T's dealings with GECCS. Those portions of the
    *NAL* that relate to parties other than GECCS are unaffected by this
    ruling."[^17]

4.  With respect to the other two resellers, PSE filed comments in reply
    to AT&T's response to the *NAL.* There is no evidence in the record
    that, after doing so, PSE pursued its request for service under
    Contract Tariff 383. Tel-Save terminated its request for service
    under Contract Tariff No. 383 in June 1994, before the Commission
    issued the *NAL*, as part of a larger settlement agreement with
    AT&T.[^18] It filed no reply comments to AT&T's response to the
    *NAL.*

# DISCUSSION

5.  Under section 503(b)(1) of the Act, any person who is determined by
    the Commission to have willfully or repeatedly failed to comply with
    any provision of the Act or any rule, regulation, or order issued by
    the Commission shall be liable to the United States for a forfeiture
    penalty.[^19]  In order to impose such a forfeiture penalty, the
    Commission must issue a notice of apparent liability, the notice
    must be received, and the person against whom the notice has been
    issued must have an opportunity to show, in writing, why no such
    forfeiture penalty should be imposed.[^20]  The Commission will then
    issue a forfeiture if it finds by a preponderance of the evidence
    that the person has willfully or repeatedly violated the Act or a
    Commission rule.[^21]

6.  Based on the record compiled in this proceeding, we cannot find,
    based on a preponderance of the evidence, that AT&T willfully or
    repeatedly refused to provide service to either PSE or Tel-Save in
    violation of section 201(a) of the Act. The record consists of
    factual assertions made by AT&T in its response to the *NAL,*
    supported by detailed affidavits from AT&T personnel responsible for
    the PSE and Tel-Save accounts and copies of correspondence regarding
    PSE and Tel-Save orders for service under Contract Tariff 383. PSE
    provides contradictory allegations in its comments, and supports its
    allegations with copies of correspondence between PSE and AT&T
    regarding its order for Contract Tariff 383 service and internal
    memoranda. AT&T counters PSE's allegations in its reply. Because
    Tel-Save never replied to AT&T's response to the *NAL*, AT&T's
    assertions regarding its processing of Tel-Save's order for service
    under Contract Tariff 383 are not contradicted.

7.  AT&T's response to the *NAL* states that it was unable to process
    orders for service under Contract Tariff 383 from PSE and Tel-Save
    due to the resellers' own conduct, specifically their failure to
    specify the locations where they wanted the service provided.[^22]
    With respect to PSE, the record indicates a factual dispute as to
    whether or not AT&T provided PSE the information and forms necessary
    to complete its order for service. AT&T claims its representative
    e-mailed the necessary information and forms and provides a copy of
    this e-mail; PSE claims it never received the e-mail.[^23] The
    record also indicates that, on more than one occasion, PSE directed
    AT&T to process orders for other services before processing Contract
    Tariff 383 orders, which AT&T interpreted as a lack of interest in
    Contract Tariff 383 service.[^24] Based on these reasons supplied by
    AT&T for its failure to provide the service initially requested by
    PSE, we cannot find, based on a preponderance of the evidence, that
    AT&T willfully or repeatedly refused to provide service to PSE in
    violation of section 201(a) of the Act.

8.  With respect to Tel-Save, AT&T asserts that, after ordering Contract
    Tariff 383 service in only three locations where it could not
    possibly have met the usage requirements for receiving credits under
    the tariff, Tel-Save never supplied orders identifying additional
    locations for providing the service.[^25] AT&T also asserts that,
    for several months prior to formally withdrawing its request for
    Contract Tariff 383 service in June 1994, Tel-Save was negotiating
    with AT&T to settle outstanding litigation, and withdrew its request
    for service when settlement was reached.[^26] These assertions are
    not contradicted by Tel-Save. Based on these reasons supplied by
    AT&T for its failure to provide the service initially requested by
    Tel-Save, we cannot find, based on a preponderance of the evidence,
    that AT&T willfully or repeatedly refused to provide service to
    Tel-Save in violation of section 201(a) of the Act.

9.  With respect to GECCS, we adopt the Bureau's finding that GECCS did
    not meet its burden to demonstrate that AT&T acted unreasonably in
    refusing to provide the requested service as resolving the issues
    presented in the *NAL* as it relates to GECCS.[^27] Thus, we cannot
    find, by a preponderance of the evidence, that AT&T willfully or
    repeatedly refused to provide service to GECCS in violation of
    section 201(a) of the Act.

10. For the foregoing reasons we cancel the *NAL* and dismiss the order
    to show cause.

# ORDERING CLAUSES

11. Accordingly, IT IS ORDERED, pursuant to section § 503(b) of the
    Communications Act of 1934, as amended, 47 U.S.C. § 503(b), and
    section 1.80 of the Commission's rules, 47 C.F.R. § 1.80, that the
    Notice of Apparent Liability for Forfeiture in the amount of
    \$1,000,000 issued to AT&T Corporation for willfully and repeatedly
    violating section 201(a) of the Communications Act of 1934, as
    amended, 47 U.S.C. § 201(a), by failing to provide communication
    service upon the reasonable request of General Electric Capital
    Communications Systems, Inc. (GECCS), Public Service Enterprises,
    Inc. (PSE), and Tel-Save, Inc. (Tel-Save), is CANCELLED.

12. IT IS FURTHER ORDERED that the Order to Show Cause why it should not
    be required to furnish service to General Electric Capital
    Communications Systems, Inc. (GECCS), Public Service Enterprises,
    Inc. (PSE), and Tel-Save, Inc. (Tel-Save), issued to AT&T
    Corporation IS DISMISSED.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

[^1]: 47 U.S.C. § 503(b). This section provides, in relevant part: "Any
    person who is determined by the Commission

    . . . to have . . . willfully or repeatedly failed to comply with
    any of the provisions of this Act or any rule, regulation, or order
    issued by the Commission under this Act . . . shall be liable to the
    United States for a forfeiture penalty." *Id. at* § 503(b)(1)(B).
    The section further specifies maximum allowable penalties for
    violations, pursuant to which the Commission found AT&T apparently
    liable for the maximum allowable penalty when it issued the *NAL.
    Id.* at

    § 503(b)(2)(B). *See also* 47 C.F.R. § 1.80.

[^2]: *AT&T Communications Notice of Apparent Liability for Forfeiture
    and Order to Show Cause*, 10 FCC Rcd 1664 (1995) (*NAL*).

[^3]: 47 U.S.C. § 201(a). Section 201(a) of the Act requires common
    carriers such as AT&T to furnish communication service upon
    reasonable request, and the Commission has interpreted this section
    to require common carriers to permit unlimited resale of their
    services. *NAL,* 10 FCC Rcd at 1664. *See also* *Regulatory Policies
    Concerning Resale and Shared Use of Common Carrier Services and
    Facilities*, Docket No. 20097, RM-1997, RM-2218, Report and Order,
    60 FCC 2d 261 (1976) (subsequent history omitted).

[^4]: *NAL,* 10 FCC Rcd at 1664.

[^5]: *Id.*

[^6]: *AT&T Communications Notice of Apparent Liability for Forfeiture
    and Order to Show Cause,* Response of AT&T Corp. (filed Feb. 3,
    1995) (*AT&T Response*).

[^7]: *AT&T Communications Notice of Apparent Liability for Forfeiture
    and Order to Show Cause,* Comments of GE Capital Communications
    Systems, Inc.; Comments of Public Services Enterprises of
    Pennsylvania, Inc. (filed Dec. 11, 1995) (*GECCS Comments, PSE
    Comments*).

[^8]: *AT&T Communications Notice of Apparent Liability for Forfeiture
    and Order to Show Cause,* Reply of AT&T Corp. (filed Jan. 11, 1996)
    (*AT&T Reply*).

[^9]: AT&T Corporation, Transmittal No. 528 (filed Aug. 9, 1993).

[^10]: *NAL,* 10 FCC Rcd at 1665.

[^11]: AT&T Corporation, Transmittal No. 952 (filed Nov. 16, 1993). *See
    also NAL*, 10 FCC Rcd at 1665.

[^12]: *NAL,* 10 FCC Rcd at 1666.

[^13]: *Id.* at 1666 and 1667.

[^14]: *GE Capital Communications Services Corporation v. AT&T
    Corporation*, Formal Complaint (filed Feb. 23, 1996).

[^15]: *GE Capital Communications Services Corporation v. AT&T
    Corporation*, File No. E-96-22, Memorandum Opinion and Order, 13 FCC
    Rcd 13138, 13147 (Com. Car. Bur. 1998).

[^16]: *Id.* at 13149.

[^17]: *Id.* at 13150, n.70. Also subsequent to issuance of the *NAL*,
    the Commission reclassified AT&T as nondominant in the market for
    interstate, domestic, interexchange telecommunications service.
    *Motion of AT&T to be Reclassified as a Non-Dominant Carrier,*
    Order, 11 FCC Rcd 3271 (1995).

[^18]: *NAL*, 10 FCC Rcd at 1666, n.15.

[^19]: 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1). Section
    312(f)(1) of the Act defines "willful" as "the conscious and
    deliberate commission or omission of \[any\] act, irrespective of
    any intent to violate" the law. 47 U.S.C. § 312(f)(1). The
    legislative history of section 312(f)(1) indicates that this
    definition of "willful" applies to both sections 312 and 503(b) of
    the Act, H.R. Rep. No. 97-765, 97^th^ Cong. 2d Sess. 51 (1982), and
    the Commission has so interpreted the term in the section 503(b)
    context. *See, e.g., Application for Review of Southern California
    Broadcasting Co.,* Memorandum Opinion and Order, 6 FCC Rcd 4387,
    4388 (1991) (*Southern California Broadcasting*). "Repeated" means
    that the act was committed or omitted more that once, or lasts more
    than a day. *Southern California Broadcasting*, 6 FCC Rcd at 4388.

[^20]: 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).

[^21]: *See, e.g., SBC Communications Inc., Apparent Liability for
    Forfeiture,* File No. EB-01-IH-0642, Forfeiture Order, 17 FCC Rcd
    7589, 7591 (2002).

[^22]: *AT&T Response* at 44-47, 51-54 and Exhibit 12, Affidavit of
    Gregory Brown at 2.

[^23]: *AT&T Response* at 53 and Exhibit 13, Affidavit of Mary Ann
    Hansen at 6 and Exhibit D; PSE Comments at 7 and Attachments 11 and
    12.

[^24]: *AT&T Response* at 53-54 and Exhibit 18, Affidavit of Frank
    Escalante at 4, 8-10.

[^25]: *AT&T Response* at 46 and Exhibit 12, Affidavit of Gregory Brown
    at 3-4; Exhibit 13, Affidavit of Mary Ann Hansen at 5-6.

[^26]: *AT&T Response* at 47, Affidavit of Gregory Brown at 6-9.

[^27]: *GE Capital Communications Services Corporation v. AT&T
    Corporation*, File No. E-96-22, Memorandum Opinion and Order, 13 FCC
    Rcd 13138, 13147 and 13149 (Com. Car. Bur. 1998). *See also* para.
    3, *supra*.