The Prepaid Press - February 2009 - (Page 17)

PREPAID TELECOM February 15 · 2009 - 17 THE Jonathan S. Marashlian LEGAL LINE by concern over the use of local DIDs by PPCCs. Subsequent to the FCC’s release of the PPCC Order, Arizona Dialtone, a CLEC providing wireline service, filed a petition seeking reconsideration of the Order. Arizona Dialtone’s petition is currently pending before the FCC. In its petition, Arizona Dialtone requested that the FCC clarify which party is responsible for paying access charges when local access is used to place a prepaid calling card call and to impose additional reporting requirements for those carriers providing DIDs and for PPCCs using DIDs. Notably, in its petition, Arizona Dialtone does not assert that the PPCC Order created such a prohibition, nor does Arizona Dialtone seek the imposition of such a restriction. Rather than questioning whether the use of DIDs should be permissible, Arizona Dialtone’s petition focuses on how to regulate such use. It is unclear, at this time, how many prepaid providers received AT&T’s cease & desists or and (3) “locally dialed calls originated by AT&T customers are subject to reciprocal compensation, not access charges.” Finally, STi states that AT&T’s approach would result in piecemeal litigation and that the dispute is better resolved through an industry-wide decision. By virtue of Arizona Dialtone’s and STi’s pending requests before the FCC, it is likely that final resolution of the issues presented by STi states that AT&T’s approach would result in piece-meal litigation and that the dispute is better resolved through an industry-wide decision. AT&T’s cease & desist letters will require FCC intervention and action. To the extent that the FCC has expressed concerns about avoidance of access fees on the part of PPCCs, AT&T’s arguments are not wholly without merit. That being said, it is unclear the extent to which the FCC is willing to provide AT&T and other third-party local exchange carriers with the regulatory means to insinuate themselves into the private, lawfully executed contractual relationships between PPCCs and CLECs providing DIDs. The issue warrants continued diligence and awareness on the part of the PPCC industry, for it does carry the potential for an unfortunate and costly result. I would urge any PPCC that has, in fact, received a cease & desist letter from AT&T or that is generally concerned about this issue to seek advice from their legal counsel. Jonathan S. Marashlian is a partner at Helein & Marashlian, LLC, The CommLaw Group, a Washington, D.C.-area law firm specializing in federal and state telecommunications and technology matters. He can be reached at jsm@commlawgroup.com. Allison D. Rule, a Senior Associate at The CommLaw Group, assisted with this article. Rather than questioning whether the use of DIDs should be permissible, Arizona Dialtone’s petition focuses on how to regulate such use. how many have agreed to migrate to Feature Group Access. However, one prepaid provider, STI Prepaid, LLC (“STi”), brought AT&T’s actions to the attention of the FCC and requested that the Commission clarify that PPCCs are not required to pay access charges to third party local exchange carriers for calls placed to local DIDs. STi articulates three arguments in support of its request: (1) it is receiving access to the PSTN by virtue of local service purchased from CLECs – a legal practice; (2) the PPCC Order did not address the exchange of locally-dialed prepaid card traffic and that “interstate or intrastate jurisdiction determined by end points of a communications is not relevant to determining whether traffic is subject to access charges”; Dear Jonathan – I operate a small prepaid calling card business which offers our customers the ability to place calls using both toll-free and local access telephone numbers. Lately, I’ve been hearing rumors that a certain incumbent local exchange company wants to impose restrictions on a prepaid calling card provider’s ability to use local access numbers for call origination. Without local access to our calling card platform, our customers would be forced to pay a lot more to make calls; so much so, I’m afraid our services would wind up being priced out of the market. Should we be concerned that our company, our industry, and our customers will be shut out from obtaining low-cost local access service? -- Concerned be treated as telecommunications providers. In the Matter of Regulation of Prepaid Calling Card Services, Declaratory Ruling and Report and Order, 21 FCC Rcd 7290, Rel. June 30, 2006 (the “PPCC Order”). In particular, in the PPCC Order, the FCC stated its intention that all PPCCs pay the applicable interstate and intrastate In its letters, AT&T takes the position that the use of DIDs by prepaid calling card providers (“PPCCs”) constitutes an improper attempt to evade federal law and is contrary to the terms of AT&T’s access tariffs. access charges for prepaid calls. Further, as noted by AT&T, the PPCC Order required that prepaid providers and their carriers “pass the CPN of the calling party (i.e., the number associated with the telephone used by the cardholder) and not replace that number with the number associated with the platform.” While AT&T insists that PPCCs cease the use of DIDs, the PPCC Order contains no prohibition on that practice. Notably, the PPCC Order contains no mention of the use of local access numbers by providers of prepaid calling cards. While the FCC erroneously assumed that that every prepaid calling card call will require the calling party to initiate such calls using an 8YY number, it is questionable whether the FCC’s misunderstanding can equate to a prohibition on the use of DIDs by prepaid providers. Similarly, AT&T’s reliance on its access tariffs may be misplaced to the extent that AT&T is seeking to dictate the conduct of parties with which it has no direct relationship. Prior to the issuance of the PPCC Order, AT&T requested that the FCC grant it sweeping auditing rights and that the FCC impose broad reporting obligations on PPCCs with which AT&T had no direct relationship. The FCC declined to grant AT&T such authority in the PPCC Order, which specifically states: While AT&T’s proposal would require calling card providers to make certifications regarding the actions of other carriers, the requirements we adopt here require calling card providers to certify only to their own activities. We also require prepaid calling card providers to report PIU factors to those carriers from which they purchase transport services. AT&T is not the first carrier to express Prepaid Telecom in Brief Arbinet-thexchange, Inc. [NASDAQ:ARBX], a provider of voice and IP solutions for buying and selling telecommunications capacity, has hired Dan Powdermaker as the company’s Senior Vice President of Sales and Marketing. In this role, Powdermaker will be charged with managing the global sales, marketing and product organizations that span Europe, the Middle East and Africa, the Americas and Asia and include both the international Voice and IP platform solutions. Arbinet - www.arbinet.com Dear Concerned – I am well aware of the rumors you speak of, though the concerns you’ve expressed may be somewhat premature. Allow me to explain. In late 2008, several prepaid calling card providers began receiving cease and desist letters from AT&T Local Exchange Carriers (“AT&T”). In the letters, AT&T demanded that the providers discontinue their use of direct inward dialing (“DID”) arrangements to secure local access numbers through which consumers could access a prepaid calling card platform. AT&T also insisted that the providers begin to route and deliver their traffic over Feature Group trunks, which would generally result in the application of higher access charges. In its letters, AT&T takes the position that the use of DIDs by prepaid calling card providers (“PPCCs”) constitutes an improper attempt to evade federal law and is contrary to the terms of AT&T’s access tariffs. AT&T threatened to pursue legal remedies, including seeking injunctive and monetary relief, in the event that the prepaid providers disagree with AT&T’s position and device. Select fans at the private show will be given an Ocean 2 to chronicle the event. This “Ocean 2 Camera Crew” can blog, IM, email, post to social networking sites and send photos from this one mobile phone to share with friends and fans. Virgin Mobile USA - www.virginmobileusa.com Virgin Mobile USA has announced its title sponsorship of the upcoming Britney Spears concert tour. The tour, to be titled “Virgin Mobile Presents the Circus Starring Britney Spears,” features special guests The PussyCat Dolls. The circus-themed tour is due to kick off in New Orleans on March 3, 2009 with a planned 31 dates in the United States. As part of the sponsorship, some lucky fans will have the chance to catch T-Mobile USA, the fourth-largest cellular carrier in country, continued to add mostly prepaid customers in the fourth-quarter. The large proportion of new prepaid customers, who generally pay less than customers under contract, sets T-Mobile USA apart from other U.S. carriers. It added 621,000 new customers in the last three months of 2008, of which 57 percent were prepaid. That figure include customers on FlexPay plans that lack contracts but have some of the same features, such as a monthly bucket of minutes and free calls on nights and weekends. At AT&T Inc., the largest carrier, about a third of new customers were prepaying in the fourth quarter. Source: Associated Press – www.ap.org In support for its position, AT&T relied heavily on the FCC’s Prepaid Calling Card Order, wherein the FCC stated that all PPCCs would be treated as telecommunications providers. fail to “comply with the requested actions.” In support for its position, AT&T relied heavily on the FCC’s Prepaid Calling Card Order, wherein the FCC stated that all PPCCs would a sneak peek at one of the tour of the year, by attending Britney’ http://www.virginmobileusa.com http://www.arbinet.com http://www.ap.org http://www.stratustelecom.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - February 2009

Payments & Processing: Prepaid Debit Card Trends Contents The Retske Report: A Courthouse Divided Regulatory Rundown Prepaid Business: 5 Minutes With Darren Dat Lu, CEO of Lunex Group Prepaid Telecom: International Mobile Top-Up Virgin Mobile USA Compliance Plan Accepted by NYSE Tata Communications Launches One IP World KIT Communications Selects PhoenixSoft Sprint Nextel Increases Payments to Virgin Mobile Motorola, Sprint and Boost Mobile Welcome iDEN Flip PhoenixSoft Announces New Program Virgin Mobile Partners with Susan G. Komen The State of Prepaid Technology: Prepaid Virtual Operators Emerge Prepaid Wireless Roundup Boost Launches ‘Monthly Unlimited’ in More Cities Cricket Selects Callidus On-Demand Solution ICC Worldwide Expands Prepaid Products IPsmarx Launches SIP Based Card Platform The Legal Line Prepaid Telecom in Brief Pinnacle Rolls Out Ingenico’s Payment Terminals TransCard Makes Staff Announcements H&R Block Bank Selects MasterCard Avangate Pays Vendors and Affiliates with Prepaid MC TIO Networks Announces Grant of Stock Options TSYS Offers Enhanced Loyalty Solution First American Payment Systems Inks Deal with RDM Hypercom Introduces HyperSafe Remote Key System i2c Expands Team iPayStation Integrates with Movistar Payments & Processing in Brief New Javelin Report on Evolving Prepaid Card Market TransCard, Socialwise Plan to Revolutionize Prepaid Congresswoman Introduces Financial Literacy Act Industry Analysis on Mobile Banking Available Gift Cards & Promotions: Seven Cost-Conscious Marketing Strategies for 2009 Ntreev USA Announces PvP Tournament hhgregg to Help Circuit City Customers NRF Releases December Industry Sales Cellfire Expands Kroger Mobile Coupon Program Petrofix.com Offers a New Fuel Solution Gift Cards & Promotions in Brief Our Advertisers Contact Us

The Prepaid Press - February 2009

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