**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C. 20554**

In the Matter of )

)

PHILIPPINE LONG DISTANCE )

TELEPHONE COMPANY, )

Complainant )

)

v\. ) File No. E-95-29

)

INTERNATIONAL TELECOM, LTD., )

D/B/A/ KALLBACK DIRECT, )

Defendant )

**MEMORANDUM OPINION AND ORDER**

Adopted: March 22, 2000; Released: March 29, 2000

By the Commission: Commissioner Furchtgott-Roth issuing a separate
statement.

**I. INTRODUCTION**

1\. In this Order, we deny a Petition for Reconsideration (Petition)
filed by International Telecom, Ltd., d/b/a/ Kallback Direct (ITL)[^1]
concerning the lawfulness of providing call-back access to customers
located in the Philippines. ITL asks us to reconsider the Commission\'s
Memorandum Opinion and Order[^2] in which the Commission granted a
complaint filed by the Philippine Long Distance Telephone Company
(PLDT),[^3] finding that ITL violated the Commission\'s policy by using
the uncompleted call signalling configuration of call-back to provide
international service to customers in the Philippines, where the use of
call-back is unlawful. For the reasons discussed below, we deny ITL\'s
Petition.

**II. BACKGROUND**

**A. The *Call-Back Proceeding***

2\. \"Call-back\" is a technology used to provide international
telecommunications service from a foreign country through a U.S.
switch.[^4] In the *Call-Back Proceeding*,[^5] the Commission stated
generally that the use of call‑back utilizing uncompleted call
signalling was consistent with its policy favoring resale of
international switched service.[^6] The Commission concluded that
call-back \"advances the public interest, convenience, and necessity by
promoting competition in international markets and driving down
international phone rates, \[and that it\] is in the best interests of
consumers\--and eventually of economic growth\--around the world\"[^7]

3\. Notwithstanding its recognition of this procompetitive policy, the
Commission required U.S. carriers to provide call-back service \"in a
manner that is consistent with the laws of countries in which they
operate.\"[^8] The Commission reaffirmed this requirement in its
Reconsideration Order, stating that \"U.S.-based carriers may not offer
international call-back using uncompleted call signalling in countries
that have specifically prohibited this practice.\"[^9]

**B. The PLDT Complaint**

4\. On May 8, 1995, PLDT filed a complaint with the Commission alleging,
*inter alia*, that ITL violated the Commission\'s requirements in the
*Call-Back* proceeding by offering international common carrier service
using call-back to customers in the Philippines, a country that
prohibited call-back. In the *ITL Order*, the Commission reached the
following conclusions: (1) pursuant to Section 208 of the Communications
Act of 1934, as amended (the Act), PLDT had standing to file its
complaint against ITL; (2) ITL was acting as a common carrier in its
provision of service to the Philippines, and was, therefore, subject to
Commission regulation; (3) PLDT made a sufficient showing under the
criteria set out in the *Call-Back Proceeding* that the Philippine
government had declared unlawful the use of call-back in its country and
had taken enforcement action against several carriers providing the
service; and (4) in providing call-back in the Philippines via use of
the uncompleted call signalling configuration, ITL violated the
requirements of the Commission\'s *Call-Back Proceeding* and Section 214
of the Act.[^10] Based on the Commission\'s conclusions, the Commission
directed ITL to terminate its call-back service to the Philippines to
the extent that it used uncompleted call signalling.[^11]

**III. DISCUSSION**

5\. In its Petition, ITL argues that the Commission erred in granting
PLDT\'s complaint. ITL asserts that the Commission\'s decision conflicts
with its position that call-back using uncompleted call signalling
comports with U.S. and international law, and that the Commission
misconstrued the doctrine of international comity. ITL also argues that
the Commission ignored the procedural requirements of the *Call-Back
Reconsideration*[^12] and failed to follow the Commission\'s own
requirements for enforcement of foreign laws.[^13] Lastly, ITL contends
that the Commission erred by not considering previous comments by the
Philippine government that, ITL asserts, controverts the evidence that
the complainant presented regarding the effect of Philippine law.[^14]
We address these arguments below. We note at the outset, however, that
some of ITL's arguments ultimately question the wisdom of the
Commission's policy on international call-back. In resolving this formal
complaint proceeding, we apply existing Commission rules and orders, and
our decision here has no bearing on our evaluation of whether to modify
these policies in the future.

**A. The Commission\'s Policy on Call-Back**

6\. We reject ITL\'s claim that the Commission\'s holding in the *ITL
Order* was inconsistent with the Commission\'s previously-stated
position on international call-back. As ITL correctly observed, the
Commission has favored call-back since mid-1994, and has noted its
positive impact on competition and prices in the international
telecommunications arena.[^15] The Commission\'s decision in the *ITL
Order* is nevertheless consistent with the *Call-Back Proceeding*.
Despite the Commission\'s support for call-back as a procompetitive
policy, the Commission decided in the *Call-Back Proceeding* to forbid
U.S. carriers from providing call-back in countries that \"clearly and
explicitly prohibited this offering by statute or regulatory
decision.\"[^16] In determining whether a foreign government prohibits
call-back, the Commission requires specific documentation of the
relevant legal restrictions, evidence of violations by particular
carriers, and a description of enforcement measures.[^17] After
carefully evaluating the evidence presented by PLDT, the Commission
found in the *ITL Order* that it had made a sufficient showing that
call-back was indeed prohibited in the Philippines.[^18]

**B. The Doctrine of International Comity**

7\. We also reject ITL\'s claims that the Commission has misconstrued
the doctrine of international comity and that the *ITL Order* conflicts
with the Commission\'s previous statement that foreign governments bear
the responsibility for enforcing their domestic laws.[^19] As the
Commission recognized in the *Call-Back Reconsideration*, choosing to
honor a provision of foreign law or regulation is discretionary, and
with respect to call-back, some foreign countries\' laws and regulations
may conflict with U.S. policy. The Commission nevertheless concluded
that given the unique characteristics of call-back, it would be
appropriate to observe a foreign

government\'s determination that call-back violated its domestic laws,
and, in some instances, to assist in the foreign government\'s law
enforcement efforts.[^20]

8\. ITL argues that the Commission should not enforce a foreign law that
is contrary to U.S. policy unless there are \"exceptional
circumstances.\"[^21] The Commission found in the *Call-Back
Reconsideration* that the circumstances at that time surrounding the
call-back issue were sufficiently exceptional that, as a matter of
international comity, the Commission should prohibit U.S. carriers from
providing call-back in countries that prohibit it.[^22] We decline to
disturb that determination in this proceeding. In the *ITL Order*, the
Commission found that the procedures established in the Call-Back
Reconsideration were followed, and we affirm that decision here.

9\. We also reject ITL\'s assertion that the Commission has incorrectly
accorded to a foreign private interest rights properly accorded only to
foreign governments. While it is true that the procedures set forth in
the *Call-Back Proceeding* relating to requests for law enforcement
assistance apply only to requests from foreign governments, nothing the
Commission said in that Proceeding precludes a nongovernmental entity
from filing a complaint under Section 208 of the Act. As the Commission
explained in its *ITL Order*, PLDT\'s complaint was properly filed
pursuant to Section 208 of the Act.[^23] It was filed by a
\"person\"[^24] against a carrier (ITL) for alleged violations of the
Act, a Commission order, or a Commission rule. The instant proceeding is
not a matter of mutual cooperation between governments but rather is a
dispute between private parties. We therefore reject ITL\'s claim that
in granting PLDT\'s complaint, the Commission misconstrued the
international comity concerns underlying the *Call-Back
Reconsideration*.

**C. The Call-Back Reconsideration Order Procedural Requirements**

10\. In a related vein, we find unpersuasive ITL\'s argument that the
Commission erred in declaring that the procedures set forth in the
*Call-Back Reconsideration* were irrelevant to the Section 208
complaint.[^25] In the *Call-Back Proceeding*, the Commission made two
distinct rulings: (1) U.S. carriers may not provide service using
call‑back to countries where call-back was clearly prohibited,[^26] and,
(2) foreign governments may obtain the Commission\'s assistance by
following certain procedures.[^27] ITL persists with its argument that
unless PLDT follows the procedures by which foreign governments may seek
U.S. government assistance in enforcing their laws, PLDT may not file
its complaint. But as the Commission explained in the *ITL Order*, as a
private corporation PLDT has every right to file a section 208
complaint, regardless of the procedures prescribed for foreign
governments. While PLDT is required to satisfy the same quantum of proof
as a government entity regarding the effect of Philippine law,[^28] we
conclude that PLDT has made a sufficient showing in this regard.[^29] As
the Commission previously has held, PLDT was not required to follow the
procedures set forth in the Call-Back Proceeding for foreign governments
seeking U.S. law enforcement assistance.[^30]

11\. ITL also claims that section 208 requires a complainant to allege a
substantive violation of the Act, and that PLDT has not done so. [^31]
ITL\'s view of section 208 is too restrictive. Under the Commission\'s
general pleading requirements, formal complaints against common carriers
must, *inter alia*, contain a complete statement of facts, which if
true, are sufficient to constitute a violation of the Act, *or of a
Commission rule, or order*.[^32] Here, PLDT alleged a violation of the
Commission\'s order in the *Call-Back Proceedings*. Accordingly, the
complaint was proper under section 208.

12\. Finally, ITL restates its earlier argument that the Commission\'s
determination not to grant immediately ITL\'s Section 214 application
justifies ITL\'s attempt to offer service to the Philippines as a
private carrier. The Commission explained in the *ITL Order* why this
argument fails and we decline to address it again here. Reconsideration
generally is not available for purposes of rearguing matters on which
there has been deliberation and decision.[^33]

**D. Enforcement of Foreign Laws**

13\. We also reject ITL\'s assertion that the Commission erred in its
*ITL Order* because it inappropriately enforced foreign laws. ITL argues
that under the *Call-Back Reconsideration*, call-back using uncompleted
call signalling can only be considered unlawful when a complainant shows
that a foreign government has sought the assistance of the U.S.
government in its law enforcement efforts, in addition to showing that
the foreign government has clearly made call-back illegal and has failed
in its efforts to enforce its call-back prohibition against U.S.
carriers.[^34] Once again, ITL confuses the *Call-Back Reconsideration*
procedures with the section 208 complaint process. As the Commission
explained in the *ITL Order* and above, the section 208 complaint
process is independent of the *Call-Back Reconsideration* procedures
applicable to foreign governments seeking U.S. law enforcement
assistance.[^35]

14\. Furthermore, we reject ITL\'s assertion that there has been no
demonstration that any law, statute, or ordinance of the Philippines
prohibits uncompleted call signalling call-back, and its argument that
much of the evidence relied upon by the Commission fails to support this
proposition.[^36] PLDT submitted into evidence the Memorandum
Circular,[^37] issued January 16, 1995 by the National
Telecommunications Commission (NTC), an agency of the Philippine
government, which directs anyone offering call-back to cease and desist
unless previously authorized.[^38] The Memorandum Circular not only
describes the general policy that offering any communications service
without NTC authorization is against the law, but also expressly orders
anyone offering call-back to stop doing so, unless authorized by the
NTC.[^39] PLDT also submitted the May 1996 Kintanar letter.[^40] This
letter is more than simply a list of U.S. carriers, as suggested by ITL.
To the contrary, it was set in the context of \"tak\[ing\] action
against U.S. carriers that continue to provide international call-back
service to the Philippines in spite of the prohibition for such service
in our country.\"[^41] The evidence sufficiently demonstrates that the
government of the Philippines prohibits call-back, and meets the
standards set forth in the *Call-Back Reconsideration.*

**E. International Settlement Rates Proceeding**

15\. Finally, we are not persuaded that certain comments made by the
Philippine government in an unrelated context contradict the
Commission\'s conclusion that Philippine law prohibits call-back. ITL
points to comments submitted by the NTC in the *International Settlement
Rates* proceeding[^42] which state that the Philippine government is
generally committed \"to allowing or encouraging competition.\" ITL
argues that this statement contradicts the Commission\'s determination
that the Philippine government has prohibited call-back. We disagree.
The record evidence discussed above demonstrates to our satisfaction
that the Philippine government has prohibited call-back. The NTC\'s
general policy on competition has no necessary bearing on this issue.
Accordingly, we find ITL\'s arguments in this regard unpersuasive.

**IV. OUTSTANDING MOTIONS**

**A. Motions to Strike**

16\. We grant ITL\'s motion to strike the six pages of material that
PLDT attached to its Opposition to ITL\'s Petition for
Reconsideration.[^43] The attachments submitted by PLDT fail to address
the issues raised in ITL\'s Petition and are thus irrelevant to our
reconsideration of the *ITL Order*. PLDT submitted this material as
proof that ITL continues to offer call-back to the Philippines, an issue
that is not germane to any of the issues decided in the *ITL Order*.
Accordingly, with respect to the attachments to PLDT\'s Opposition, and
the references in the Opposition to those attachments, we grant ITL\'s
motion.

17\. We deny ITL\'s Motion to Strike PLDT\'s reference to a letter from
the Chief of the Telecommunications Division, International Bureau, to
the Chairman of the Philippine National Telecommunications
Commission.[^44] ITL claims that it has been unable to locate the
document and, therefore, unable to respond to it. As PLDT correctly
points out in its opposition to the motion to strike, this letter was
attached to PLDT\'s Reply Brief, filed March 29, 1996, as tab 18 of the
appendix.[^45]

**B. Motion to Dismiss**

18\. ITL also filed a motion to dismiss the complaint, presenting the
same arguments on the issues of jurisdiction, lack of a cause of action,
and standing that it has argued throughout this proceeding.[^46] We have
already resolved these issues in favor of the complainant with this
order. ITL also raised two issues regarding PLDT\'s entitlement to
damages. On June 16, 1998, the Enforcement Division, Common Carrier
Bureau, granted PLDT\'s motion to withdraw its supplemental complaint
for damages.[^47] Accordingly, we dismiss as moot those portions of the
Motion to Dismiss.

**V. CONCLUSION AND ORDERING CLAUSES**

19\. For the reasons discussed above, we conclude that the Commission
did not err in its findings that ITL violated the requirements of the
*Call-Back Proceeding* as well as Section 214 of the Act.[^48] We
therefore deny ITL\'s Petition for Reconsideration.

20\. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 4(j),
208, and 405 of the Act, 47 U.S.C. §§ 151, 154(i), 154(j), 208, 405,
that the Petition for Reconsideration filed by ITL IS DENIED.

21\. IT IS FURTHER ORDERED that the Motion to Strike, filed by ITL, IS
GRANTED IN PART and DENIED IN PART.

22\. IT IS FURTHER ORDERED that the Motion to Dismiss the Formal
Complaint, filed by ITL, IS DISMISSED.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

# SEPARATE STATEMENT OF COMMISSIONER HAROLD FURCHTGOTT-ROTH

Re: Philippine Long Distance Company v. International Telecom, Ltd.,
File No. E-95-29, Philippine Long Distance Company v. USA Global Link.
Inc., File No. E-95-33.

I have no qualms with the bottom lines reached in these two orders. In
fact, I believe that generally enforcement decisions should apply the
law as they find it. Here, we have held that "U.S. carriers may not
offer international call-back using uncompleted call signalling in
countries that have specifically prohibited this practice."[^49]
Therefore I believe it is proper to apply that standard to Global Link
and International Telecom.

Nonetheless, I want to emphasize that today's decisions in no way
reflect my endorsement of our current international call-back policies.
I am increasingly troubled by the idea that a foreign government can
limit the otherwise lawful operations of U.S. carriers. Despite the
Commission's conclusion that international call-back services are
pro-competitive and strengthen the marketplace, our current policy
allows a foreign government (often also the owner of the foreign
monopoly carrier) to snuff out these competitive services. In light of
these doubts and the pending rulemaking on this issue, I write
separately to clarify the limited nature of today's decisions.

[^1]: ITL is an international long distance carrier, and its principal
    place of business is 417 Second Avenue West, Seattle, Washington
    98119.

[^2]: *Philippine Long Distance Tel. Co. v. Int\'l Telecom, Ltd., d/b/a/
    Kallback Direct*, 12 FCC Rcd 15001 (1997) (*ITL Order*).

[^3]: PLDT is a private corporation that provides domestic and
    international telecommunications facilities and services in the
    Philippines, and is located at Ramon Cojuangco Building, Makati
    Avenue, Makati City, Philippines.

[^4]: *See ITL Order*, 12 FCC Rcd at 15002-03. Although several
    configurations of call-back are currently in use, \"uncompleted call
    signalling\" is the only configuration that was at issue in the
    complaint proceeding. For the purpose of this proceeding, the term
    \"call-back\" will refer solely to the uncompleted call signalling
    configuration of call-back technology. Uncompleted call signalling,
    also known as \"code calling,\" is an activity in which a reseller
    assigns its foreign customer a specific telephone number in the
    United States and instructs the customer to call that number
    whenever the customer wants to place a call, and hang up after a
    specified number of rings. The reseller\'s switch then places an
    outbound call to the foreign customer and provides the customer a
    U.S. dial tone that can be used to complete calls to the United
    States or elsewhere. The resulting call is placed at U.S.-tariffed
    rates, which are generally lower than those of the originating
    country. *Id.*

[^5]: *VIA USA, Ltd., Telegroup, Inc., Discount Call Int\'l Co.*, 9 FCC
    Rcd 2288 (1994) (*Call-Back Order*), *aff\'d on reconsideration*, 10
    FCC Rcd 9540 (1995) *(Call-Back Reconsideration*) (together
    *Call-Back Proceeding*). We note that the Commission currently has
    before it a petition for rulemaking requesting that the Commission
    reverse its comity-based policy articulated in the *Call-Back
    Proceeding*. Petition for Rulemaking of the Telecommunications
    Resellers Association to Eliminate Comity-Based Enforcement of Other
    Nation\'s Prohibitions Against the Uncompleted Call Signalling
    Configuration of International Call-Back Service, RM-9249 (filed
    Mar. 19, 1998).

[^6]: *Call-Back Reconsideration*, 10 FCC Rcd at 9541.

[^7]: *Id.* at 9541; *see also* *Call-Back Order*, 9 FCC Rcd at 2290.

[^8]: *Call-Back Order*, 9 FCC Rcd at 2292.

[^9]: *Call-Back Reconsideration*, 10 FCC Rcd at 9540-41, 9557-59.

[^10]: *ITL Order*, 12 FCC Rcd at 15003-12a.

[^11]: *Id.* at 15013.

[^12]: Petition at 4-13.

[^13]: *Id.* at 13-23.

[^14]: *Id.* at 22-23.

[^15]: *See Call-Back Reconsideration*, 10 FCC Rcd at 9541.

[^16]: *Call-Back Order*, 9 FCC Rcd at 2292; *Call-Back
    Reconsideration*, 10 FCC Rcd at 9557.

[^17]: *Call-Back Reconsideration*, 10 FCC Rcd at 9558.

[^18]: *ITL Order*, 12 FCC Rcd at 15011-12.

[^19]: *Call-Back Reconsideration*, 10 FCC Rcd at 9557.

[^20]: *Id.* at 9555-58.

[^21]: Petition at 7 (citing *Call-Back Reconsideration*, 10 FCC Rcd at
    9541).

[^22]: *Id.*

[^23]: Section 208 of the Act states, in part, that any person may
    complain to this Commission of any act or omission by a common
    carrier subject to this Act. 47 U.S.C. § 208.

[^24]: The term \"person\" includes an individual, partnership,
    association, joint-stock company, trust or corporation, 47 U.S.C. §
    153(32), and is broadly interpreted to include \"any member of the
    public\" when filing complaints against common carriers. *See ITL
    Order*, 12 FCC Rcd at n.21.

[^25]: Petition at 10-11.

[^26]: *Call-Back Reconsideration*, 10 FCC Rcd at 9557-58.

[^27]: *Id.*

[^28]: *Call-Back Order*, 9 FCC Rcd at 2292; *Call-Back
    Reconsideration*, 10 FCC Rcd at 9557-58.

[^29]: *ITL Order*, 12 FCC Rcd at 15011-12.

[^30]: *ITL Order*, 12 FCC Rcd at 15012.

[^31]: Petition at 12.

[^32]: *See* 47 C.F.R. §§ 1.720(b)-(c), 1.721(a)(5). *See also* *Febrer
    v. Sprint Corp.*, 13 FCC Rcd 150, 160 (Com.Car.Bur. Dec. 31, 1997).

[^33]: *MCI Telecomm. Corp. v. Pac. Bell Tel. Co.*, 5 FCC Rcd 3463,
    3463-64 (1990) (citing *Empire Bell Tel. Co.*, 10 FCC 2d 341, 342
    (1967) and *Petitions for Reconsideration of Commission Action*, 77
    FCC 2d 54 (1980)).

[^34]: Petition at 13-14.

[^35]: *ITL Order*, 12 FCC Rcd at 15012.

[^36]: *Id.* at 15-21.

[^37]: *See* Complaint, Exhibit E (Memorandum Circular, issued Jan. 16,
    1995).

[^38]: Opposition at 7.

[^39]: *See* Memorandum Circular, *supra* note 37. The Circular states:
    \"Any firm, person, company, association or agency found violating
    this circular shall be dealt with in accordance with law.\"

[^40]: Letter from Simeon L. Kintanar, Commissioner, NTC, to Diane J.
    Cornell, Chief, Telecommunications Division (May 28, 1996).

[^41]: *Id*.

[^42]: *International Settlement Rates*, IB Docket 96‑261, Report and
    Order, 12 FCC Rcd 19806 (1997), *aff\'d sub nom. Cable & Wireless v.
    FCC*, 166 F.3d 1224 (D.C. Cir. 1999), *recon. adopted*, 14 FCC Rcd
    9256 (1999).

[^43]: *See* Motion to Strike (filed Sept. 15, 1997). The material
    attached to PLDT\'s Opposition was apparently copied from ITL\'s
    Internet World Wide Web site, http://www.kallback.com, and consists
    of a table of rates that still lists the Philippines, and a series
    of frequently asked questions (FAQs) and answers intended to explain
    ITL\'s \"Kallback service.\"

[^44]: Opposition To Petition for Reconsideration at n.24 (filed Sept.
    3, 1997).

[^45]: Opposition to Motion to Strike, 1-2.

[^46]: *See* Motion for Immediate Dismissal (filed Oct. 20, 1997).

[^47]: *Philippine Long Distance Tele. Co. v. International Telecom,
    LTD.,* 13 FCC Rcd 12059 (Com.Car.Bur. June 16, 1998).

[^48]: 47 U.S.C. § 214.

[^49]: See VIA USA Ltd., Telegroup Inc., Discount Call International Co.
    9 FCC Rcd 2288 (1994) *aff'd on reconsideration*, 10 FCC Rcd 9540,
    9557-59 (1995).