The Regulatory Mix

The Regulatory Mix, TMI’s daily blog of regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court, issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Regulatory Bulletin.





Proposed Fine

The FCC issued a Notice of Apparent Liability For Forfeiture to GPSPS proposing a $9 million fine for slamming, cramming, and submitting falsified evidence to the FCC and state commissions. The FCC’s Enforcement Bureau reviewed over 150 complaints against GPSPS that were filed with the FCC, the Federal Trade Commission, the Public Utility Commission of Texas, and the Better Business Bureau. Consumers complained that GPSPS switched their long distance service provider and began charging them for its service without their authorization and without them having any contact with GPSPS. The FCC found that GPSPS relied on fabricated audio recordings as purported proof that consumers had authorized it to switch their long distance carriers and then provided those fabricated recordings to the FCC and state regulatory officials as proof that the consumers had authorized its service. However, consumers who listened to the recordings informed the FCC that the recordings were fabricated and adamantly denied that the voices on the recordings were their own. The FCC also found that GPSPS: (1) failed to fully and timely respond completely to the FCC’s Letter of Inquiry; and (2) violated §1.17 of its rules when it submitted fabricated TPVs to the FCC. (§1.17 prohibits making a false statement to the FCC without a reasonable basis for believing that the information was truthful.)


The $9,065,000 forfeiture is broken down as follows: (1) the standard, $40,000 base forfeiture for each of the 65 slamming violations and each of the 41 cramming violations that occurred within one year of the release date of the NAL for a forfeiture of $4,240,000; (2) an additional upward adjust of $4,000,000 due to the egregious and repeated nature of GPSPS’s actions; (3) the base forfeiture of $160,000 to the five instances when GPSPS provided false material information to the FCC within the last 12 months results in a proposed forfeiture of $800,000; and (4) $25,000 for failure to respond completely to the FCC’ Letter of Inquiry.


ICC Transition Rules

The FCC’s Wireline Competition Bureau clarified the some rules relating to the implementation of the intercarrier compensation (ICC) transition for rate-of-return LECs. It clarified that a rate-of-return carrier that received too much Eligible Recovery in 2012-13 because of an under-projection of demand for that tariff period and does not have sufficient Eligible Recovery in 2014-15 to fully offset the 2012-13 amount of over-recovery, must refund the amount that is not offset to the Universal Service Administrative Company (USAC) to avoid duplicative recovery. Additionally, to ensure a carrier receives the Eligible Recovery it was entitled to in 2012-13, it clarified that that a rate-of-return carrier that received too little Eligible Recovery in 2012-13 because of an over-projection of demand for that tariff period may seek recovery for any amounts it was not able to recover through its 2014-15 Eligible Recovery from USAC. Finally, the Bureau clarified how ARC rates are to be handled in making Eligible Recovery calculations in light of mid-year revisions that some carriers have made. It said that if a carrier assessed an ARC rate that was too high for part of a tariff period, it must use this higher rate and the associated demand for that time period in calculating future true-ups for that tariff period. It also reminded carriers that if they charge ARCs that are below the maximum rate that could have been charged, whether for the whole year or for part of a year, they are required to impute the maximum rate that they could have assessed for purposes of determining the carrier’s Eligible Recovery.


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