NetworkIP Must Pay For Card Use On Pay Phones

(CN) - The Federal Communications Commission correctly found NetworkIP liable for not compensating phone-service providers for calls made from pay phones with calling cards, a federal appeals court in Washington, D.C., ruled.

A group of service providers complained to the FCC that NetworkIP used its technology to avoid paying them for switching pay-phone calls. The FCC fined NetworkIP $2.7 million.

NetworkIP asked the D.C. Circuit to review the case.

Judge Brown wrote that the FCC's interpretation of its own orders shouldn't be overturned lightly, but "even without substantial deference, the FCC's interpretation of its earlier pay-phone orders was appropriate."

However, Brown ruled that the FCC should not have fined Network IP, because the company that issued the complaint was $5 short on its filing fee on the last possible day the complaint could be timely. The FCC allowed the complaint with the proper fee after the deadline.

"The criteria used to make waiver determinations are essential," Brown wrote. "If they are opaque, the danger of arbitrariness (or worse) is increased. The FCC's decision to waive the filing deadline was arbitrary and capricious."

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