**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | File No. EB-07-IH-5149       |
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| IDT Corporation                  | ** | NAL/Acct. No. 200832080092   |
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| Apparent Liability for           | *  | FRN No. 0003-7900-37         |
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**NOTICE OF APPARENT LIABILITY FOR FORFEITURE**

**Adopted: July 9, 2008 Released: July 10, 2008**

By the Commission:

# 

# I. INTRODUCTION 

1.  In this *Notice of Apparent Liability for Forfeiture* ("*NAL*"), we
    find that IDT Corporation ("IDT" or "the Company"), has apparently
    violated section 220 of the Communications Act of 1934, as amended
    (the "Act"), [^1] and section 43.51 of the Commission's rules by
    willfully and repeatedly failing to file with the Commission, within
    thirty days of execution, a copy of an agreement with
    Telecommunications D'Haiti S.A.M. ("Teleco Haiti") and each of four
    amendments thereto governing, among other things, the exchange of
    services, routing of traffic, accounting rates, and division of
    tolls on the U.S.-Haiti route.[^2] We further find that IDT has
    violated sections 43.51 and 64.1001 of the Commission's rules by
    failing to file a modification request for each of its four
    amendments to rate schedules under the terms of its agreement with
    Teleco Haiti,[^3] and by failing to obtain Commission approval prior
    to implementing such amendments.[^4] Based on our review of the
    facts and circumstances surrounding this matter, we find that IDT is
    apparently liable for a total forfeiture of \$1.3 million.

# II. BACKGROUND

2.  The Commission's International Settlements Policy ("ISP") is a
    longstanding regulatory framework that governs how U.S. carriers
    negotiate with foreign carriers for the exchange of international
    telecommunications traffic. The ISP is the structure by which the
    Commission has sought to respond to concerns that foreign carriers
    with market power are able to take advantage of the presence of
    multiple U.S. carriers serving a particular market.[^5] The
    Commission established the ISP to prevent foreign carriers with
    market power from discriminating, or using threats of discrimination
    or other anticompetitive actions against competing U.S. carriers as
    a strategy to obtain pricing concessions regarding the exchange of
    international traffic, a practice known as "whipsawing."[^6] The
    Commission thus adopted the ISP to ensure a competitive playing
    field among providers of international services due to the
    possibility that dominant carriers on the foreign end of a
    U.S.-international route could leverage their market power to the
    detriment of U.S. carriers and, ultimately, U.S. consumers.

3.  The ISP establishes three conditions on the ability of U.S. carriers
    to execute agreements with foreign carriers for the exchange of
    international traffic: (1) all U.S. carriers must be offered the
    same effective accounting rate, and same effective date for the rate
    ("nondiscrimination");[^7] (2) U.S. carriers must receive a
    proportionate share of U.S.-inbound, or return, traffic based upon
    their proportion of U.S.-outbound traffic ("proportionate
    return");[^8] and (3) the accounting rate[^9] must be divided evenly
    (*i.e.*, 50-50) between U.S. and foreign carriers for U.S. inbound
    and outbound traffic ("symmetrical settlement rates").[^10]
    Together, these components are intended to create a unified
    bargaining position among U.S. carriers in their negotiations with
    foreign carriers possessing market power.[^11]

4.  To detect instances in which U.S. and foreign carriers have entered
    into arrangements that violate the Commission's International
    Settlements Policy, the Commission adopted, among other safeguards,
    section 43.51 of its rules, which imposes on U.S. carriers specific
    filing obligations relating to contracts and other arrangements
    between U.S. and foreign carriers for the exchange of international
    telecommunications traffic.[^12] In particular, the Commission
    required that certain U.S. carriers who execute agreements with
    foreign carriers concerning the exchange of services, routing of
    traffic, rate and other matters, timely file such agreements with
    the Commission,[^13] and further directed that such carriers file a
    "modification request" prior to implementing any arrangement that
    offered terms different from those made available to any other
    carrier serving the same U.S.-international route.[^14] In section
    64.1001 of its rules, the Commission, among other things, barred
    subject carriers from implementing any such arrangement absent prior
    Commission approval, and further required that such carriers notify
    all other carriers providing service on the same international route
    of its modification request, concurrently with the filing of such
    request with the Commission.[^15] Collectively, the obligations
    imposed by sections 43.51 and 64.1001 were intended to enable the
    Commission to identify potential instances of anticompetitive
    conduct and enforce compliance with the International Settlements
    Policy.[^16]

5.  As the U.S.-international market and foreign markets for
    telecommunications services have become more competitive, the
    Commission has increasingly relaxed its application of the ISP. Most
    recently, the Commission, in 2004, lifted the ISP and certain
    associated requirements for all U.S.-international routes where U.S.
    carriers had negotiated termination rates that fell below certain
    thresholds, or "benchmarks" previously established by the Commission
    in order to reduce international settlement rates by bringing them
    closer to cost.[^17] The Commission determined that, in such cases,
    market forces were sufficiently competitive to justify removing the
    ISP as it applied to U.S. carriers. The Commission further found
    that removing the ISP requirements from benchmark-compliant routes
    would simplify the Commission's current regulatory regime and
    facilitate the expansion of opportunities for flexible, commercial
    arrangements on more routes, to the benefit of U.S. competition and
    U.S. consumers.[^18] Pursuant to the procedures established in the
    *ISP Reform Order,* the Commission began to identify
    U.S.-international routes that were considered exempt from the
    ISP.[^19] On November 4, 2004, the Commission lifted the ISP as it
    applied to the route between the United States and Haiti, among
    others.[^20]

6.  IDT is a publicly-traded, New Jersey-based company that provides a
    range of telecommunications services domestically and
    internationally, including local, long distance, wireless, a range
    of voice over Internet protocol services, and pre-paid calling
    cards.[^21] IDT offers services to retail and wholesale markets in
    more than 230 countries and territories worldwide.[^22] In 2007,
    IDT's telecommunications division generated revenues of
    approximately \$1.73 billion.[^23]

7.  On October 22, 2003, IDT entered into a Carrier Service Agreement
    ("agreement") with Teleco Haiti that established the terms and
    conditions for the provision and purchase of wholesale
    telecommunications services on the U.S.-Haiti route, including the
    rates for such services.[^24] During the time period beginning
    February 5, 2004, until November 4, 2004, when the ISP was lifted
    from the U.S.-Haiti route, IDT and Teleco Haiti ("the parties")
    amended the agreement by establishing or amending four times the
    rates that would apply to Teleco Haiti's termination of
    U.S.-originated traffic.[^25] The four rates became effective on
    February 5, February 23, May 12, and August 1, 2004.[^26] On March
    1, 2007, IDT filed its Carrier Service Agreement with the Commission
    at the request of Commission staff,[^27] and, on May 23, 2007, IDT
    identified the rates established under the agreement, again at the
    request of Commission staff.[^28]

# III. DISCUSSION

8.  Pursuant to section 220 of the Act, the Commission may "prescribe
    the forms of any and all accounts, records, and memoranda to be kept
    by carriers subject to \[the Act\],"[^29] and "may classify \[such\]
    carriers and prescribe different requirements . . . for different
    classes of carriers," including international telecommunications
    carriers.[^30] In addition, section 220 makes it unlawful for
    subject carriers "to keep the accounts in any other manner than that
    prescribed or approved by the Commission."[^31] In cases where a
    carrier fails to keep its accounts and records as required, or "to
    submit such accounts, records, memoranda, documents, papers, and
    correspondence . . . to the inspection of the Commission," section
    220 imposes a forfeiture of "\$6,000 for each day of the continuance
    of each such offense."[^32] To impose such a forfeiture penalty, the
    Commission must issue a notice of apparent liability, and the person
    against whom the notice has been issued must have an opportunity to
    show, in writing, why no such penalty should be imposed.[^33] The
    Commission will then issue a forfeiture if it finds, by a
    preponderance of the evidence, that the person has violated the Act
    or a Commission rule.[^34] As set forth in greater detail below, we
    conclude under this standard that IDT is apparently liable for
    forfeiture for its apparent violations of section 220 of the Act,
    and sections 43.51 and 64.1001 of the Commission's rules.[^35]

9.  The fundamental issues in this case are whether IDT apparently
    violated the Act and the Commission's rules by: (1) failing to file,
    within thirty days of execution, a copy of its Carrier Service
    Agreement with Teleco Haiti, and four subsequent amendments to the
    agreement; (2) failing to file a "modification request" for
    Commission authorization for each of four rate amendments to the
    agreement that established terms and conditions different from
    equivalent terms provided to another carrier serving the same
    U.S.-international route; and (3) failing to obtain Commission
    authorization prior to implementing such rate amendments. We answer
    these questions affirmatively. Based on a preponderance of the
    evidence, therefore, we conclude that IDT is apparently liable for a
    forfeiture of \$1.3 million for apparently violating section 220 of
    the Act,[^36] and sections 43.51 and 64.1001 of the Commission's
    rules.[^37]

10. Specifically, we propose the following forfeitures for IDT's
    apparent violations: (1) a total of \$500,000 for IDT's failure to
    file, within thirty days of execution, a copy of its Carrier Service
    Agreement with Teleco Haiti, and four subsequent amendments to the
    agreement; (2) a total of \$400,000 for IDT's four failures to file
    a modification request with the Commission prior to establishing, or
    amending, contractual termination rates for Haiti-bound traffic;
    and (3) a total of \$400,000 for IDT's implementation of rate terms
    on four occasions that varied from equivalent rates provided to
    another carrier serving the same U.S.-international route, prior to
    receiving Commission approval.

## Filing of Agreements

11. Based on a preponderance of the evidence, we conclude that IDT has
    apparently violated section 220 of the Act, and section 43.51(a) of
    the Commission's rules by failing to file with the Commission a copy
    of its Carrier Service Agreement with Teleco Haiti, as well as four
    amendments to such agreement,[^38] from November 22, 2003[^39] to
    November 4, 2004, when the Commission lifted the ISP and its
    implementing rules from the U.S.-Haiti route.[^40] IDT's failure to
    satisfy its obligations under section 43.51(a) constitutes a clear
    violation of a vital Commission requirement. As noted above, the
    2003 version of section 43.51(a) unambiguously required that all
    subject carriers file with the Commission, within thirty days of
    execution, "a copy of each contract, agreement . . . or other
    arrangement to which it is a party and amendments thereto with
    respect to . . . the exchange of services and the interchange or
    routing of traffic and matters concerning rates, accounting rates,
    division of tolls, or the settlement of traffic balances."[^41] With
    certain exceptions, section 43.51(a) applied, by its terms, to all
    carriers "engaged in foreign communications \[that enter\] into a
    contract, agreement . . . or other arrangement and amendments
    thereto with a foreign carrier that does not qualify for the
    presumption . . . that it lacks market power on the foreign end of
    one or more of the international routes included in the
    contract."[^42]

12. At the time that IDT and Teleco Haiti executed their agreement, and
    for a period when the Agreement was effective, Teleco Haiti was a
    telecommunications provider presumed to possess market power on a
    route that was subject to the ISP.[^43] Although section 43.51(a)
    thus obligated IDT to file its Carrier Service Agreement with the
    Commission by November 22, 2003 \-- thirty days after its execution
    \-- IDT failed to do so.[^44] In addition, IDT only apprised the
    Commission of its four contractual amendments relating to
    termination rates for the first time on May 23, 2007, in response to
    a Commission staff request.[^45]

13. IDT contends that it did not file its Carrier Service Agreement with
    Teleco Haiti in accordance with section 43.51(a) because it
    "believed \[the agreement\] fell under the Commission's policy of
    not requiring the filing of interim agreements under the
    International Settlements Policy."[^46] To buttress its assertion,
    IDT points to a 2004 *Order on Review* in which the Commission
    stated that it "does not require carriers to file interim agreements
    under the ISP."[^47] We reject IDT's claim that its agreement with
    Teleco Haiti constituted an "interim agreement" not subject to the
    requirements of section 43.51(a). First, IDT puts forth no evidence
    to support its assertion that the Carrier Service Agreement was
    interim in nature.[^48] Indeed, the agreement on its face strongly
    suggests otherwise,[^49] and nowhere purports to establish terms,
    including rates, that were intended by the parties to be merely
    interim.[^50] We find that the establishment of sequential,
    short-term rates that IDT has now provided to the Commission does
    not constitute an interim arrangement, particularly where, as here,
    such rates were established pursuant to the terms of an agreement
    that was clearly intended to be final, and there is no evidence to
    the contrary.[^51] We also find disingenuous IDT's reliance on the
    Commission's statement that it "does not require carriers to file
    interim agreements under the ISP" in justifying its failure to file,
    given that IDT and Teleco Haiti executed the agreement prior to the
    Commission's June 2004 *Order on Review.*

14. We view IDT's failure to file its Carrier Service Agreement with
    Teleco Haiti, and four subsequent amendments, as a serious
    dereliction of IDT's obligations under the Act and our rules. As the
    Commission has noted, "\[t\]he primary purpose for requiring the
    filing of contracts between carriers is to assist the Commission in
    monitoring whether carriers are following the Commission's rules or
    are otherwise acting in an anti-competitive manner."[^52] The
    Commission adopted section 43.51(a) in recognition that foreign
    carriers who possess market power on the foreign end of a route can
    adversely affect competition in the U.S. market by entering into
    exclusive arrangements, "whipsawing," or engaging in other such
    practices. The obligations imposed by section 43.51(a) thus were
    designed to reduce or eliminate the potential for such competitive
    harm by "enabl\[ing\] the Commission to enforce the International
    Settlements Policy and maintain regulatory oversight of accounting
    rate agreements. . . ."[^53]

15. A carrier's compliance with section 43.51(a) is critical to
    enforcement of the ISP and related policies because it enables the
    Commission to monitor the existence of arrangements that could
    undermine competition in the market for telecommunications services
    on a particular international route, in this case, the U.S.-Haiti
    route. By failing to file its Carrier Service Agreement with Teleco
    Haiti in accordance with section 43.51(a), IDT fundamentally
    undermined the Commission\'s implementation of the ISP on the
    U.S.-Haiti route.  In particular, IDT's failure deprived the
    Commission of any opportunity to review the agreement and possibly
    seek clarifications about its terms and conditions. More
    significantly, IDT's failure prevented the Commission from judging
    the agreement's overall compliance with the ISP and taking any steps
    needed to ensure the agreement was consistent with the Commission's
    pro-competitive rules and policies.

## Accounting Rate Modifications

16. Based on a preponderance of the evidence, we further conclude that
    IDT apparently has violated section 220 of the Act and sections
    43.51(e) and 64.1001(b) of the Commission's rules by failing to file
    a modification request for Commission approval for four separate
    amendments to its Carrier Service Agreement that established terms
    and conditions different from equivalent terms provided to another
    carrier serving the same U.S.-international route.[^54]

17. Although the parties amended their agreement four times after its
    execution to establish different termination rates, IDT failed to
    file with the Commission the requisite modification requests seeking
    approval for such amendments, in accordance with sections 43.51(e)
    and 64.1001(b). As noted above, section 43.51(e) of the Commission's
    rules required the filing of a modification request where a carrier
    has executed an agreement, or amendment, with a foreign carrier
    establishing terms different from "the equivalent terms and
    conditions in the operating agreement of another carrier providing .
    . . similar service between the U.S. and the same foreign
    point."[^55] At the time that IDT entered into its agreement with
    Teleco Haiti, another carrier, AT&T, was providing service on the
    U.S.-Haiti route pursuant to an agreement with Teleco Haiti that
    established an accounting rate different from the rate negotiated
    between IDT and Teleco Haiti. Because AT&T had filed a modification
    request with the Commission on April 22, 2003 disclosing its new
    accounting rates for the exchange of traffic with Teleco Haiti, IDT
    was, or should have been, aware that AT&T's rate was different from
    -- indeed, higher than -- the rate that IDT had negotiated with
    Teleco Haiti, and thus triggered IDT's obligation to file its own
    modification request, pursuant to sections 43.51(e) and 64.1001(b)
    of the Commission's rules.[^56]

18. We view IDT's failure to file a modification request for each of the
    four rate amendments to its Carrier Service Agreement with Teleco
    Haiti as a serious offense. As the Commission has noted, "\[t\]he
    requirement for filing accounting rate modification requests . . .
    is intended to prevent harm to U.S. consumers resulting from the
    exercise of market power by foreign carriers. . . . \[and\] assists
    the Commission in ensuring compliance with the ISP and the
    Commission's benchmarks . . . \[policy\]."[^57] As we noted above,
    one of the underlying purposes of the ISP is to protect against
    discriminatory treatment by assuring U.S. carriers access to the
    same rate with the foreign carrier considered to have market power
    on the U.S.-international route.[^58] To that end, modification
    requests filed pursuant to section 64.1001 serve as a means by which
    to alert other U.S. carriers of rate changes and other arrangements
    on the U.S.-international route to which they are entitled access
    under the ISP, and thus are critical to enforcement of the ISP.[^59]

19. The failure of a carrier such as IDT to abide by its filing
    obligation under section 64.1001 undermines enforcement of the ISP
    by allowing the carrier, among other things, to enter into an
    exclusive or anticompetitive arrangement absent any scrutiny or
    oversight by its competitors or the Commission. Moreover, the
    Commission and competitors are denied any opportunity to raise
    objections or concerns relating to the new arrangements, as
    contemplated by section 64.1001.[^60] The harm resulting from such
    failure ultimately falls on U.S. consumers because competing U.S.
    carriers are deprived access to the newly negotiated arrangement. In
    this case, IDT failed to file a modification request for each of
    four amendments to its agreement with Teleco Haiti that established
    rates different from those in effect between Teleco Haiti and AT&T.

## Implementation of Rate Amendments Absent Commission Approval

20. Based on a preponderance of the evidence, we further conclude that
    IDT apparently has violated section 220 of the Act, and section
    64.1001(e) of the Commission's rules by implementing four amendments
    to its Carrier Service Agreement with Teleco Haiti absent prior
    Commission approval. Despite section 64.1001(e)'s clear
    prohibition,[^61] IDT and Teleco Haiti, on February 5, February 23,
    May 12 and August 1, 2004, effectuated amendments to their operating
    agreement that established rates for Teleco Haiti's termination of
    U.S.-Haiti traffic.[^62]

21. Section 64.1001 of the Commission's rules sets out a detailed and
    comprehensive framework for notification and approval of
    arrangements between a U.S. and foreign carrier that are different
    from those the foreign carrier has brokered with competing U.S.
    carriers.[^63] That framework establishes a specific time period for
    deliberation and comment on modification requests by competitors and
    the Commission, and provides a vehicle for possible objections to,
    or denial of, such requests.[^64] Where, as here, a carrier
    implements an agreement with a foreign correspondent prior to
    requesting, and receiving, the requisite approval, it circumvents
    the Commission's process for ensuring that arrangements between U.S.
    and foreign carriers are consistent with the ISP and otherwise serve
    the public interest. Moreover, it deprives competing carriers an
    opportunity to raise competitive concerns or to opt in to more
    favorable arrangements, as contemplated by section 64.1001.

    **D. Proposed Forfeiture Amount**

22. In light of IDT's apparent violations of section 220 of the Act, and
    sections 43.51 and 64.1001 of the Commission's rules, we find that a
    proposed forfeiture is warranted pursuant to section 220(d). The
    rules that IDT apparently violated in this case \-- sections 43.51
    and 64.1001 \-- prescribe the manner in which certain carriers,
    including IDT, must maintain their records, and direct that such
    carriers submit specified documents to the inspection of the
    Commission and other interested parties.[^65] Indeed, the Commission
    expressly relied upon section 220, among other provisions, as a
    statutory basis for its adoption of sections 43.51 and 64.1001 of
    the rules.[^66] Accordingly, we find that IDT is apparently liable
    for forfeiture, pursuant to section 220(d) of the Act, for violating
    these provisions.

23. Based on our review of the facts and circumstances of this case, we
    find that IDT is apparently liable for a forfeiture of \$1.3
    million. We find IDT apparently liable for a total of thirteen
    discrete offenses, including five violations of section
    43.51(a),[^67] four violations of sections 43.51(e) and
    64.1001(b),[^68] and four violations of section 64.1001(e).[^69] As
    noted above, apparent violations of section 220 of the Act, such as
    those at issue here, carry a statutorily-prescribed per day penalty
    pursuant to section 220(d). Such penalties are then subject to
    mitigation or remission in accordance with section 504 of the
    Act.[^70] Section 220 violations thus stand in contrast to other
    infractions for which the Act establishes no specific forfeiture
    amount.[^71] The inflation-adjusted statutory forfeiture that was
    effective for violations of section 220(d) in 2003 was \$7,600 for
    each day in which a violation continued, and \$8,600 per day in
    2004.[^72]

24. Our review of the record indicates that IDT's thirteen violations,
    which varied in duration, continued for a minimum of approximately
    two weeks, to almost one year. If we were to apply strictly the per
    day forfeiture dictated by section 220(d) to each of IDT's apparent
    violations, our calculation would yield an amount that we find
    excessive under the circumstances. Given the totality of the
    circumstances, including IDT's overall history of compliance and
    ability to pay, we find IDT liable for a penalty of \$100,000 per
    violation. We believe this amount reasonably reflects our commitment
    to ensure compliance with the Commission's International Settlements
    Policy and its implementing rules, yet is not unduly burdensome to a
    large and highly profitable company such as IDT. Given the central
    importance of sections 43.51 and 64.1001 in the Commission's
    pro-competitive regulatory framework governing international
    telecommunications services, we find that this amount represents an
    appropriate balance. Our proposed per violation forfeiture of
    \$100,000, multiplied by IDT's thirteen apparent continuing
    violations, results in a total proposed penalty of \$1.3 million.

#  IV. ORDERING CLAUSES

25. ACCORDINGLY, IT IS ORDERED THAT, pursuant to section 220(d) of the
    Communications Act of 1934, as amended, 47 U.S.C. § 220(d), and
    section 1.80 of the Commission's rules, 47 C.F.R. § 1.80, that IDT
    is hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
    amount of \$1.3 million for willfully and repeatedly violating the
    Act and the Commission's rules.

26. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
    Commission's Rules,[^73] within thirty days of the release date of
    this NOTICE OF APPARENT LIABILITY, IDT SHALL PAY the full amount of
    the proposed forfeiture or SHALL FILE a written statement seeking
    reduction or cancellation of the proposed forfeiture.

27. Payment of the forfeiture must be made by check or similar
    instrument, payable to the order of the Federal Communications
    Commission.  The payment must include the NAL/Acct. No. and FRN No.
    referenced above.  Payment by check or money order may be mailed to
    Federal Communications Commission, P.O. Box 358340, Pittsburgh, PA
    15251-8340.  Payment by overnight mail may be sent to Mellon
    Bank/LB 358340, 500 Ross Street, Room 1540670, Pittsburgh, PA
    15251.   Payment by wire transfer may be made to ABA
    Number 043000261, receiving bank Mellon Bank, and account
    number 9116229.

28. The response, if any, to this NOTICE OF APPARENT LIABILITY must be
    mailed to Hillary DeNigro, Chief, Investigations and Hearings
    Division, Enforcement Bureau, Federal Communications Commission, 445
    12^th^ Street, S.W., Room 4-C330, Washington, D.C. 20554 and must
    include the NAL/Acct. No. referenced above.

29. The Commission will not consider reducing or canceling a forfeiture
    in response to a claim of inability to pay unless the petitioner
    submits: (1) federal tax returns for the most recent three-year
    period; (2) financial statements prepared according to generally
    accepted accounting practices (GAAP); or (3) some other reliable and
    objective documentation that accurately reflects the petitioner's
    current financial status. Any claim of inability to pay must
    specifically identify the basis for the claim by reference to the
    financial documentation submitted.

30. Requests for payment of the full amount of this NOTICE OF APPARENT
    LIABILITY FOR FORFEITURE under an installment plan should be sent to
    Deputy Chief Financial Officer, Federal Communications Commission,
    Room 1-A637, 445 12th Street, S.W., Washington, D.C. 20554.[^74]

31. IT IS FURTHER ORDERED that a copy of this NOTICE OF APPARENT
    LIABILITY FOR FORFEITURE shall be sent by certified mail, return
    receipt requested, to Troy F. Tanner, Counsel for IDT, Bingham
    McCutchen, LLP, 2020 K St., N.W., Washington, DC 20006-1806.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

[^1]: 47 U.S.C. § 220(g). Section 220 of the Act gives the Commission
    discretion to "prescribe the forms of any and all accounts, records,
    and memoranda to be kept by carriers subject to this Act," 47 U.S.C.
    § 220(a)(1), and provides that

    > \[a\]fter the Commission has prescribed the forms and manner of
    > keeping accounts, records, and memoranda to be kept by any person
    > as herein provided, it shall be unlawful for such person to keep
    > any other accounts, records or memoranda than those so prescribed
    > or such as may be approved by the Commission or to keep the
    > accounts in any other manner than that prescribed or approved by
    > the Commission.

    47 U.S.C. § 220(g).

[^2]: 47 C.F.R. § 43.51(a)(1) (2003).

[^3]: 47 C.F.R. §§ 43.51(e)(2), 64.1001(b) (2003). The amendment of a
    rate schedule established pursuant to the terms of a contract
    constitutes a contract amendment for which a party must file a
    modification request in accordance with section 64.1001 of the
    Commission's rules.

[^4]: 47 C.F.R. § 64.1001(e) (2003).

[^5]: *See International Settlements Policy Reform*, Notice of Proposed
    Rulemaking, 17 FCC Rcd 19954, 19956-60 (2002), ¶¶ 2-6 ("*ISP Reform
    NPRM*"). The ISP was formerly termed the Uniform Settlements Policy
    ("USP"). The USP initially applied to telegraph and telex services
    and evolved through Commission decisions and practices. The intent
    of the USP was to ensure that U.S. carriers were treated fairly and
    that U.S. customers received the benefits that result from the
    provision of international services on a competitive basis. Among
    other things, the policy required uniform accounting rates and
    uniform terms for sharing of tolls. *See, e.g., Mackay Radio and
    Telegraph Co.,* 2 F.C.C. 592 (Telegraph Committee 1936), *aff'd sub
    nom. Mackay Radio v. FCC,* 97 F.2d 641 (D.C. Cir. 1938) (In the 1936
    decision, the Commission denied an application for section 214
    authority to serve Norway because the settlement terms would have
    permitted the Norwegian carrier to "whipsaw," or engage in
    anticompetitive behavior against, U.S. carriers by manipulating
    traffic flows and retaining a greater percentage of the accounting
    rate); *Modifications of Licenses in the Fixed Public and Fixed
    Public Press Services*, 11 F.C.C. 1445 (1946); *Mackay Radio and
    Telegraph Co.,* 25 F.C.C. 690 (1951), *rev'd on other grounds sub
    nom. RCA Communications, Inc. v. FCC*, 210 F.2d 694 (D.C. Cir.
    1952), *vacated and remanded,* 346 U.S. 86 (1953); *TRT
    Telecommunications Corp.,* 46 F.C.C. 2d 1042 (1974). In 1986, the
    Commission termed the USP the "ISP" and extended its application to
    International Message Telephone Service ("IMTS") in response to
    significantly greater reported instances of "whipsawing." The
    Commission also streamlined the filing of accounting rate
    modifications and chose not to apply the ISP to enhanced services.
    *See Implementation and Scope of the Uniform Settlements Policy for
    Parallel International Communications Routes,* Report and Order, 2
    FCC Rcd 1118 (1987) ("*ISP Order"*), *modified in part on recon.,*
    Order on Reconsideration, 2 FCC Rcd 1118 (1987) ("*ISP Recon
    Order"*); Further Reconsideration, 3 FCC Rcd 1614 (1988) ("*ISP
    Further Recon"*).

[^6]: In general, "whipsawing" is the abuse of market power by a foreign
    carrier, or a combination of carriers, within a foreign market that
    is intended to play U.S. carriers in foreign markets against each
    other in order to gain unduly favorable terms in arrangements for
    the exchange of traffic. *ISP Reform NPRM,* 17 FCC Rcd at 19956-57,
    ¶ 2. This practice occurs where a foreign carrier has the ability,
    through pressure on multiple U.S. carriers, to extract higher
    termination rates from a U.S. carrier than the foreign carrier is
    required to pay to terminate traffic on the U.S. end. *Id.* Thus,
    the goal of the ISP is to address this asymmetry in market power. If
    "whipsawing" were to occur, U.S. carriers would be paid at or near
    cost for terminating U.S.-international traffic on the U.S. end,
    while paying above-cost settlement rates for termination of
    U.S.-international services on the foreign end, thereby forcing the
    U.S. carriers to recover those additional costs from U.S. ratepayers
    in the form of higher calling prices. *Id.*

[^7]: 47 C.F.R. § 64.1002(a)(1).

[^8]: 47 C.F.R. § 64.1002(a)(2).

[^9]: The international accounting rate system evolved as part of a
    regulatory tradition in which international telecommunications
    services were supplied through a bilateral relationship between
    national monopoly carriers. An accounting rate is the price a U.S.
    facilities-based carrier negotiates with a foreign carrier for
    handling one minute of international telephone service. Each
    carrier's portion of the accounting rate is referred to as the
    settlement rate. *2000 Biennial Regulatory Review,* Report and
    Order, 16 FCC Rcd 10647, 10657 (2001), ¶ 15 n.44 ("*2000 Biennial
    Review"*).

[^10]: 47 C.F.R. § 64.1002(a)(3).

[^11]: *ISP Reform NPRM*, 17 FCC Rcd at 19957, ¶ 3.

[^12]: *See* 47 C.F.R. § 43.51; *Rules and Policies on Foreign
    Participation in the U.S. Telecommunications Market,* Report and
    Order and Order on Reconsideration, 12 FCC Rcd 23891, 24007 (1997),
    ¶ 259 ("\[O\]ur contract filing requirement in section 43.51 of the
    Commission's rules enables us to detect instances where carriers
    enter into arrangements that are inconsistent with our rules and
    policies.") ("*Foreign Participation Order*").

[^13]: Pursuant to the 2003 version of section 43.51(a) of the
    Commission's rules, certain common carriers generally must file with
    the Commission, within thirty days of execution:

    > a copy of each contract, agreement, concession, license,
    > authorization, operating agreement or other arrangement to which
    > it is a party and amendments thereto with respect to the
    > following: (i) the exchange of services; and, (ii) the interchange
    > or routing of traffic and matters concerning rates, accounting
    > rates, division of tolls, or the basis of settlement of traffic
    > balances. . . .

    47 C.F.R. § 43.51(a)(1) (2003). This version of section 43.51(a)
    applied to any carrier that was:

    > engaged in foreign communications and enters into a contract,
    > agreement, concession, license, authorization, operating agreement
    > or other arrangement . . . with a foreign carrier that does not
    > qualify for the presumption . . . that it lacks market power on
    > the foreign end of one or more of the U.S.-international routes
    > included in the contract.

    47 C.F.R. § 43.51(b)(2) (2003).

[^14]: 47 C.F.R. § 43.51(e) (2003). The 2003 version of section 43.51(e)
    provided, in pertinent part:

    > \[I\]f a carrier files an operating or other agreement with a
    > foreign carrier pursuant to \[section 43.51(a)\] to begin
    > providing switched voice, telex, telegraph, or packet-switched
    > service between the United States and a foreign point and the
    > terms and conditions of such agreement relating to the exchange of
    > services, interchange or routing of traffic and matters concerning
    > rates, division of tolls, the allocation of return traffic, or the
    > basis of settlement of traffic balances, are not identical to the
    > equivalent terms and conditions in the operating agreement of
    > another carrier providing the same or similar service between the
    > United States and the same foreign point, the carrier must also
    > file with the International Bureau a modification request under
    > section 64.1001 \[of the Commission's rules\].

    47 C.F.R. § 43.51(e) (2003). The 2003 version of section 64.1001
    similarly stated that:

    > \[i\]f the international settlement arrangement in the operating
    > agreement or amendment referred to in \[section 43.51(e)\] differs
    > from the arrangement in effect in the operating agreement of
    > another carrier providing service to or from the same foreign
    > point, the carrier must file a modification request under this
    > section unless the international route is exempt from the
    > international settlements policy under \[section 43.51(e)\].

    47 C.F.R. § 64.1001(b) (2003). Section 43.51(e)(2) of the
    Commission's rules similarly required carriers to file a
    modification request where such carriers amended an existing
    operating agreement with a foreign carrier. *See* 47 C.F.R. §
    43.51(e)(2) (2003).

[^15]: 47 C.F.R. § 64.1001(e), (f) (2003). In particular, section
    64.1001(e) of the Commission's rules provided that "\[a\]n operating
    agreement or amendment filed under a modification request cannot
    become effective until the modification request has been granted. .
    . ." 47 C.F.R. § 64.1001(e) (2003).

[^16]: Section 64.1002 of the Commission's rules, which codifies the
    International Settlements Policy, directs that carriers subject to
    the ISP "must . . . duly comply with the requirements in § 43.51 and
    § 64.1001 \[of the Commission's rules\]." 47 C.F.R. § 64.1002.

[^17]: *International Settlements Policy Reform,* First Report and
    Order, 19 FCC Rcd 5709, 5723 (2004), ¶ 27 ("*ISP Reform Order*"). As
    early as 1992, the Commission adopted benchmarks for international
    settlement rates that were applicable to specific U.S.-international
    routes. *See Regulation of International Accounting Rates*, CC
    Docket No. 90-337 (Phase II), Second Report and Order and Second
    Further Notice of Proposed Rulemaking, 7 FCC Rcd 8040 (1992). These
    benchmark settlement rates served as guidelines for what constituted
    the maximum just and reasonable amount that U.S. carriers should pay
    foreign carriers for the termination of U.S.-international traffic.

[^18]: *ISP Reform Order,* 19 FCC Rcd at 5723, ¶ 27.

[^19]: *Id.*, 19 FCC Rcd at 5771, Appendix D; *Additional
    U.S.-International Routes Exempted from the International
    Settlements Policy*, Public Notice, 19 FCC Rcd 22032 (2004).

[^20]: *Additional U.S.-International Routes Exempted from the
    International Settlements Policy*, Public Notice, 19 FCC Rcd 22032,
    22035 (2004).

[^21]: [http://idt.net](http://idt.net/) (as of June 17, 2008).

[^22]: [http://idt.net](http://idt.net/) (as of June 17, 2008).

[^23]: [http://idt.net](http://idt.net/) (as of June 17, 2008).

[^24]: Letter from Troy F. Tanner, Bingham McCutchen, Counsel for IDT
    Corp., to Marlene H. Dortch, Secretary, Federal Communications
    Commission, dated March 1, 2007 (attaching Carrier Service Agreement
    between IDT and Telecommunications D'Haiti S.A.M., October 22, 2003)
    ("Tanner March 1 Letter").

[^25]: Letter from Troy F. Tanner, Bingham McCutchen, Counsel for IDT
    Corp., to Helen Domenici, Chief, International Bureau, Federal
    Communications Commission, dated May 23, 2007, at 2 ("Domenici May
    23 Letter").

[^26]: *Id.* at 2.

[^27]: Tanner March 1 Letter, Attachment.

[^28]: Domenici May 23 Letter, at 2.

[^29]: 47 U.S.C. § 220(a)(1).

[^30]: 47 U.S.C. § 220(h). By establishing certain filing and
    notification requirements to implement the ISP, the Commission has
    deemed certain international carriers to be a "class of carriers"
    necessitating "different requirements" to satisfy the main purpose
    of section 220 of the Act.

[^31]: 47 U.S.C. § 220(g).

[^32]: 47 U.S.C. § 220(d). The inflation-adjusted forfeiture that was
    effective in 2003 for violations of section 220 was \$7,600 per day.
    47 C.F.R. § 1.80(b)(4), Note, Section III (2003).

[^33]: 47 C.F.R. § 1.80(f).

[^34]: *See, e.g., SBC Communications, Inc*., *Apparent Liability for
    Forfeiture,* Forfeiture Order, 17 FCC Rcd 7589, 7591, ¶ 4 (2002)
    (forfeiture paid).

[^35]: 47 U.S.C. § 220; 47 C.F.R. §§ 43.51, 64.1001 (2003).

[^36]: 47 U.S.C. § 220.

[^37]: 47 C.F.R. §§ 43.51, 64.1001.

[^38]: It is unclear, based upon the record, whether IDT and Teleco
    Haiti amended their Carrier Service Agreement through oral or
    written agreement. Even if the parties had amended their agreement
    orally, however, IDT still would have been obligated to file a
    "certified statement covering all the details of the arrangement,"
    in accordance with section 43.51(a)(2) of the Commission's rules. 47
    C.F.R. § 43.51(a)(2).

[^39]: Section 43.51(a) of the Commission's rules required that IDT file
    its agreement with the Commission by November 22, 2003, thirty days
    after the agreement was executed. *See* 47 C.F.R. § 43.51(a) (2003).

[^40]: Although we exercise our prosecutorial discretion and limit our
    finding of liability to the period of time from November 22, 2003 to
    November 4, 2004, we note that IDT arguably is also subject to
    liability for failing to file its agreement and amendments until
    March 1, 2007, over three years after Commission rules required it
    to do so. In our view, the fact that section 43.51(a) no longer
    applied to carriers serving the U.S.-Haiti route as of November 4,
    2004 arguably does not excuse the company from discharging an
    obligation that attached prior to that date.

[^41]: 47 C.F.R. § 43.51(a)(1)(i), (ii) (2003).

[^42]: 47 C.F.R. § 43.51(b)(2) (2003).

[^43]: *See the International Bureau Revises and Reissues the
    Commission's List of Foreign Telecommunications Carriers that are
    Presumed to Possess Market Power in Foreign Telecommunications
    Markets*, Public Notice, 18 FCC Rcd 2438 (2003).

[^44]: As noted above, IDT ultimately filed its agreement with the
    Commission on March 1, 2007. The Commission has repeatedly stated,
    however, that subsequent corrective measures to address a violation
    do not eliminate a licensee's responsibility for the period during
    which the violation occurred. IDT's untimely filing thus neither
    excuses nor mitigates in any way its apparent violation of section
    43.51(a). *SBC Communications, Inc.*, Order of Forfeiture, 16 FCC
    Rcd 5535, 5542, ¶ 18 (2001); *see also* *Coleman Enters., Inc. d/b/a
    Local Long Distance, Inc*., Order of Forfeiture, 15 FCC Rcd 24385,
    24388, ¶ 8 (2000); *American's Tele-Network Corp*., Order of
    Forfeiture, 16 FCC Rcd 22350, 22355-56, ¶ 15 (2001).

[^45]: Domenici May 23 Letter, at 2. Based upon the record, it is
    unclear precisely when IDT and Teleco Haiti executed the four rate
    amendments at issue. Irrespective of when they were executed,
    however, IDT was required by section 43.51(a) to apprise the
    Commission of such amendments in 2004, long before IDT saw fit to do
    so.

[^46]: *See* Tanner March 1 Letter, at 1; Tanner May 23 Letter, at 1-2.

[^47]: *AT&T Corp. Emergency Petition for Settlements Stop Payment Order
    and Request for Immediate Interim Relief,* Order on Review, 19 FCC
    Rcd 9993, 9995 (2004), ¶ 2 n.9.

[^48]: *See* Tanner March 1 Letter.

[^49]: *See* Carrier Service Agreement between IDT and
    Telecommunications D'Haiti S.A.M., October 22, 2003, ¶¶ 1, 3.1,
    7.12, Annex A ¶ 1.2 ("Carrier Service Agreement"); Domenici May 23
    Letter, ¶ 3. The Commission's practice regarding interim agreements
    is limited and intended largely to keep U.S.-international circuits
    open when a U.S. carrier and its foreign correspondent are
    renegotiating expired rate agreements. Once service is disrupted due
    to inconclusive or failed negotiations, it becomes increasingly
    difficult for the parties involved to reach agreement, particularly
    where there is an ongoing dispute concerning amounts owed. The
    Commission's practice regarding interim agreements allows parties to
    continue negotiations while exchanging traffic at an agreed-upon
    interim rate, often the rate that has just expired. Once final
    agreement is reached, the parties typically "true-up" any difference
    between the interim and final rate. In light of these industry
    practices, requiring that interim terms be publicly filed with the
    Commission is unnecessary, and could hamper negotiations for the
    exchange of telecommunications traffic. IDT has offered no evidence
    of ongoing negotiations with Teleco Haiti that support its
    characterization of the Carrier Service Agreement as "interim."

[^50]: *See* Carrier Service Agreement.

[^51]: *Id.*, Section III, ¶ 7.12.

[^52]: *2000 Biennial Review,* 16 FCC Rcd at 10678, ¶ 68.

[^53]: *Id.*

[^54]: 47 U.S.C. § 220; 47 C.F.R. §§ 43.51(e), 64.1001(b) (2003).
    Although we find IDT apparently liable for its failure to file a
    modification request for each of the four amendments to its
    agreement with Teleco Haiti, we note that IDT arguably is also
    liable for failing to file its agreement and amendments until March
    1, 2007, over three years after Commission rules required it to do
    so. As we stated above, that sections 43.51 and 64.1001 no longer
    applied to carriers serving the U.S.-Haiti route as of November 4,
    2004 arguably does not excuse the company from discharging an
    obligation that attached prior to that date.

[^55]: 47 C.F.R. § 43.51(e) (2003); *see also* 47 C.F.R. § 64.1001(b)
    (2003). While the applicability of section 43.51(e) appears limited
    to carriers who have "file\[d\] an operating or other agreement with
    a foreign carrier," we interpret the section more broadly to apply
    to any carrier who is required to file an operating agreement
    pursuant to section 43.51(a). We find that a more restrictive
    interpretation would thwart detection of anticompetitive practices
    by U.S. and foreign carriers, and undermine enforcement of the ISP.

[^56]: *See* Application for Accounting Rate Change, filed by AT&T
    Corp., dated April 22, 2003 (reporting a change in the accounting
    rate for the exchange of traffic with Teleco Haiti from \$.60 to
    \$.46).

[^57]: *2004 Biennial Regulatory Review*, Staff Report, 20 FCC Rcd 343,
    379 (2005), Appendix VII. As noted above, the Commission has
    established benchmarks that govern the international settlement
    rates that U.S. carriers may pay foreign carriers to terminate
    international traffic originating in the United States. *See*
    [*International Settlement Rates,* IB Docket No. 96-261, Report and
    Order, 12 FCC Rcd 19806
    (1997),](http://www.lexis.com/research/buttonTFLink?_m=e2522ba3075082d642c0631f5ebd818c&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B20 FCC Rcd 343%5D%5D><%2Fcite>&_butType=3&_butStat=2&_butNum=118&_butInline=1&_butinfo=<cite cc%3D"USA"><!%5BCDATA%5B12 FCC Rcd 19806%5D%5D><%2Fcite>&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLbVzz-zSkAt&_md5=f7b06ae4002f2abed7783f75384b2d53)
    *aff\'d sub nom.* [*Cable and Wireless P.L.C. v. FCC,* 166 F.3d 1224
    (D.C. Cir.
    1999),](http://www.lexis.com/research/buttonTFLink?_m=e2522ba3075082d642c0631f5ebd818c&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B20 FCC Rcd 343%5D%5D><%2Fcite>&_butType=3&_butStat=2&_butNum=119&_butInline=1&_butinfo=<cite cc%3D"USA"><!%5BCDATA%5B166 F.3d 1224%5D%5D><%2Fcite>&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLbVzz-zSkAt&_md5=f4d07de5ee668e94843618dde8a38b96)
    [Report and Order on Reconsideration and Order Lifting Stay, 14 FCC
    Rcd 9256
    (1999).](http://www.lexis.com/research/buttonTFLink?_m=e2522ba3075082d642c0631f5ebd818c&_xfercite=<cite cc%3D"USA"><!%5BCDATA%5B20 FCC Rcd 343%5D%5D><%2Fcite>&_butType=3&_butStat=2&_butNum=120&_butInline=1&_butinfo=<cite cc%3D"USA"><!%5BCDATA%5B14 FCC Rcd 9256%5D%5D><%2Fcite>&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLbVzz-zSkAt&_md5=2e11cc050299eecbe2d31d17937d5123)

[^58]: *See* *ISP Reform Order*, 19 FCC Rcd at 5725, ¶ 30 ("As the ISP
    provides that foreign carriers offer the same rates to all U.S.
    carriers, a showing that one U.S. carrier has negotiated a
    benchmark-compliant rate with the foreign carrier with market power
    triggers the ability for all other U.S. carriers to take the same
    rate. Once the foreign carrier with market power is under an
    obligation to provide services at benchmark rates to all U.S.
    carriers, we find it reasonable to conclude that the concerns
    underlying our use of the ISP on that route have been sufficiently
    alleviated to lift the ISP.").

[^59]: *See Foreign Participation Order*, 12 FCC Rcd at 24030, ¶ 313
    ("parties that might have concerns with the reductions*, i.e*.,
    those with operating agreements with the same carrier, are given
    notice of the filing directly by the applicant. Therefore, a public
    notice would only prove to delay a procedure for approving
    modifications that is designed to allow expeditious grants in most
    cases while giving those parties potentially affected a chance to
    respond.").

[^60]: The 2003 version of section 64.1001(g) provided, in pertinent
    part, that:

    > All modification requests will be subject to a twenty-one (21) day
    > pleading period for objections and comments, commencing the date
    > after the request is filed. If the modification request is not
    > complete when filed, the carrier will be notified that additional
    > information is to be submitted, and a new 21 day pleading period
    > will begin when the additional information is filed. The
    > modification request will be deemed granted as of the
    > twenty-second (22^nd^) day without any formal staff action being
    > taken, provided (1) no objections have been filed; and (2) the
    > International Bureau has not notified the carrier that grant of
    > the modification request may not serve the public interest and
    > that implementation of the proposed modification must await formal
    > staff action on the modification request. If objections or
    > comments are filed, the carrier requesting the modification
    > request may file a response . . . . Modification requests that are
    > formally opposed must await formal staff action by the
    > International Bureau before the proposed modification can be
    > implemented.

    47 C.F.R. § 64.1001(g) (2003).

[^61]: While the applicability of section 64.1001 as it existed in 2003
    appears limited to an operating agreement or amendment "filed under
    a modification request," we interpret the provision more broadly to
    apply to any agreement or amendment for which a modification request
    must be filed, *e.g*., an agreement or amendment whose terms and
    conditions are not identical to the equivalent terms and conditions
    in the operating agreement of another carrier providing the same or
    similar service between the United States and the same foreign
    point. We find that a more restrictive interpretation would thwart
    detection of anticompetitive conduct by foreign carriers and
    undermine Commission enforcement of the ISP and related policies.
    Consistent with our interpretation, the Commission in 2004 revised
    section 64.1001 to state that "\[a\]ny operating agreement or
    amendment *for which a modification request is required to be filed*
    cannot become effective until the modification request has been
    granted. . . ." 47 C.F.R. § 64.1001(a) (2004) (emphasis added).

[^62]: Domenici May 23 Letter, at 2.

[^63]: *See* 47 C.F.R. § 64.1001 (2003).

[^64]: *See* 47 C.F.R. § 64.1001(g) (2003).

[^65]: *See* 47 C.F.R. §§ 43.51, 64.1001 (2003).

[^66]: Section 1.80 of the Commission's rules, which governs forfeiture
    proceedings, provides that, "\[i\]n the case of a forfeiture imposed
    against a carrier under sections 202(c), 203(e) and 220(d), no
    forfeiture will be imposed if the violation occurred more than 5
    years prior to the issuance of a notice of apparent liability." 47
    C.F.R. § 1.80(c)(2). Each of the thirteen apparent violations in
    this case occurred within the five-year statute of limitations
    because they occurred in 2003 and 2004.

[^67]: IDT's apparent violations of section 43.51(a) include its
    failures to file with the Commission its Carrier Service Agreement
    with Teleco Haiti by November 22, 2003, and four subsequent rate
    amendments that became effective on February 5, February 23, May 12
    and August 1, 2004.

[^68]: IDT's apparent violations of sections 43.51(e) and 64.1001(b)
    include its failures to file with the Commission a modification
    request for each of the four rate amendments to its Carrier Service
    Agreement with Teleco Haiti.

[^69]: IDT's apparent violations of section 64.1001(e) include its
    failures to obtain Commission approval prior to implementing each of
    the four rate amendments to its Carrier Service Agreement with
    Teleco Haiti.

[^70]: 47 C.F.R. § 1.80(b)(4), Note, Section III. Pursuant to section
    504, "\[t\]he forfeitures imposed by title II . . . shall be subject
    remission or mitigation by the Commission, under such regulations
    and methods of ascertaining the facts as may seem to it advisable. .
    . ." 47 U.S.C. § 504(b). For convenience, the Commission treats such
    forfeitures as prescribed base amounts that are subject to downward
    adjustment, using the downward adjustment criteria applicable to
    section 503 forfeitures in section II of the note to section
    1.80(b)(4). 47 C.F.R. § 1.80(b)(4), Note, Section III.

[^71]: In cases where there is no prescribed penalty, forfeiture
    determinations are governed by section 503 of the Act, which, among
    other things, establishes maximum forfeiture amounts that are
    subject further adjustment based upon the circumstances.

[^72]: 47 C.F.R. § 1.80(b)(5) (2003). The statutory maximum amount of a
    forfeiture penalty assessed under section 1.80 of the Commission's
    rules is subject to inflation-based adjustments at least once every
    four years. 47 C.F.R. § 1.80(b)(5). We note that some of IDT's
    apparent violations continued into 2004, when the applicable
    forfeiture penalty for section 220(d) violations increased to
    \$8,600 per day. Nevertheless, for simplicity, we will use the
    \$7,600 amount effective in 2003 to calculate IDT's apparent
    liability.

[^73]: *See* 47 C.F.R. § 1.80.

[^74]: *See* 47 C.F.R. § 1.1914.