FCC Fines Wireless Reseller (MVNO) and Top-Up Provider for Failing to Obtain 214 License and File Reports


On December 6, 2013, the Enforcement Bureau of the Federal Communications Commission (“the FCC” or “the Commission”) issued a Notice of Apparent Liability for Forfeiture (“NAL”) finding Star Wireless Group, Inc., d/b/a Page Plus Cellular (“Page Plus”) liable for forfeiture penalties totaling forty-three thousand two hundred dollars ($43,200), for alleged violations of Section 43.61(a) of the Commission’s rules.  Page Plus’ allegedly failed to file annual reports of its international telecommunications traffic data (“International Traffic Report”) with the FCC’s International Bureau.  The Enforcement Bureau’s action marks the first time these particular rules have been enforced by the FCC through investigation and forfeiture and are a telling signal of increased enforcement of the routine regulatory filings, reports and certifications applicable to a variety of communications service providers.

In addition, the NAL clarifies the FCC’s position vis-a-vis prepaid calling cards that are used to “top up” wireless services, which heretofore was unclear and uncertain.  The Enforcement Bureau treated Page Plus wireless “top-up” prepaid cards as being no different than traditional, wireline prepaid calling cards.  Providers of prepaid “top-up” services must be mindful of this development and ensure their compliance practices comport with the FCC’s clarified expectations.

Page Plus sells prepaid phone cards with minutes purchased from Cellco Partnership d/b/a Verizon Wireless.  Page Plus sells some of these prepaid phone cards directly to end-user customers through its corporate website.  Consumers are then able to make domestic and international calls with these prepaid cards.  Page Plus provided international telecommunications service through its calling card business from 2003 until 2011, without obtaining an international Section 214 authorization, as required by the Communications Act of 1934 (“the Act”).

On January 19, 2012, after an investigation, the FCC’s Enforcement Bureau issued a notice, holding that Page Plus willfully violated Section 214 of the Act by providing international telecommunications service without a license.  Further, Page Plus had not filed International Traffic Reports as required under Section 43.61(a) of the Commission’s rules during the 2003-2011 reporting years.  Section 43.61(a) directs that “[e]ach common carrier engaged in providing international telecommunications service between the United States. . .  and any country or point outside” the United States “shall file a report with the Commission not later than July 31 of each year” including specified traffic and revenue data.  The Commission found Page Plus in willful and repeated violation of this Section.

The NAL against Page Plus is significant, as it highlights two very important issues for providers of wireless services and “top-up” calling cards (and, indeed, prepaid PINS).  First, as discussed above, the NAL shines light on the FCC’s perception and treatment of prepaid wireless top-up cards as being no different than other forms of prepaid calling card/prepaid PIN services.  Second, it illuminates another little known Commission requirement, which is that wireless carriers providing international origination and termination services are required to file International Traffic Reports,  which fall under the Title II regulatory requirements.  This means that wireless providers, to include Mobile Virtual Network Operators (“MVNOs”) and resellers, must be sure to obtain an international Section 214 license and file annual International Traffic Reports if the carrier provides international telecommunications services.

Clients that have  questions, or require dedicated assistance with obtaining an International Section 214 license and/or drafting International Traffic Reports are encouraged to contact Chris Canter at cac@commpliancegroup.com.  An international traffic and revenue review will not only confirm your company’s compliance during prior calendar years, but identify areas of your company’s international telecommunications services that require further attention.

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