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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** 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) 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 in which the Commission granted a complaint filed by the Philippine Long Distance Telephone Company (PLDT), 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. In the Call-Back Proceeding, 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. 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" 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." 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." 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. 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. 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 and failed to follow the Commission's own requirements for enforcement of foreign laws. 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. 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. 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." 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. 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. 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. 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. 8. ITL argues that the Commission should not enforce a foreign law that is contrary to U.S. policy unless there are "exceptional circumstances." 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. 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. It was filed by a "person" 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. 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, and, (2) foreign governments may obtain the Commission's assistance by following certain procedures. 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, we conclude that PLDT has made a sufficient showing in this regard. 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. 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. 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. 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. 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. 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. 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. PLDT submitted into evidence the Memorandum Circular, 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. 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. PLDT also submitted the May 1996 Kintanar letter. 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." 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 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. 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. 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. 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. 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. 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. 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." 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.