Before the
Federal Communications Commission 
Washington, D.C 20554
In the Matter of
INTERNATIONAL TELECHARGE, INC., 
Complainant,
V.
SOUTHWESTERN BELL TELEPHONE 
COMPANY,
UNITED TELEPHONE COMPANY OF 
FLORIDA,
UNITED TELEPHONE COMPANY OF 
MINNESOTA,
UNITED 
OHIO,
CENTRAL 
FLORIDA,
>HONE COMPANY OF 
'HONE COMPANY OF
CENTRAL TELEPHONE COMPANY OF 
NEVADA,
CENTRAL 
ILLINOIS,
>HONE COMPANY OF
NYNEX CORPORATION.
U S WEST COMMUNICATIONS, INC,
BELLSOUTH TELECOMMUNICATIONS 
INC.,
CONTEL OF TEXAS,
GTE NORTH INCORPORATED,
GTE SOUTH INCORPORATED,
GTE FLORIDA,
GTE CALIFORNIA,
File Nos. 
E-92-64
E-92-67 
E-92-68 
E-92-69 
E-92-70 
E-92-71 
E-92-72
E-92-76 
E-92-78
E-92-81 
E-92-82 
E-92-83 
E-92-84 
E-92-85 
E-92-86
DA 96-1443
10061
GTE SOUTHWEST, ) E-92-87 
Defendants. )
MEMORANDUM OPINION AND ORDER 
Adopted: August 12,1996; Released: August 29,1996
By the Chief, Common Carrier Bureau:
L INTRODUCTION
1. International Telecharge, Inc. (Ill) filed formal complaints against the sixteen 
above-captioned local exchange carriers (LECs). ITI alleges that from 1987 through 1991, the 
LECs assessed it, through MCI, the higher terminating carrier common line (CCL) charges to 
originate calls using ITI's operator service, even though ITI also paid the higher terminating CCL 
charge assessed by the LECs on MCTs service used to terminate calls using ITTs operator 
service. This, ITI claims, violates Section 69.105 of the Commission's rules,1 the Telecormect 
order2 and the ReadyLine Clarification order.3 The substance of each complaint is essentially the 
same except for the amount of damages sought We grant ITTs complaints insofar as ITI seeks 
a ruling that the defendants violated Section 69.105 of the Commission's rules and Commission 
orders, but deny the complaints as to damages.
H BACKGROUND 
A. Carrier Common Line Charges
2. Carrier common line charges recover the portion of a local exchange carrier's 
non-traffic sensitive costs of providing local switched access to interstate long distance carriers 
that are not recovered through subscriber line charges.4 Originally, local exchange carriers
1 47 C.F.R. § 69.105.
2 Teleconnect Company v. The Bell Telephone Company of Pennsylvania, 6 FCC Red 5202 (Com. Car. Bur. 
1991), ream, denied, 10 FCC Red 1626 (1995), apped docketed, No. 96-1112 (D.C. Cir. Apr. 10,1996).
3 See AT&T Communications Revisions to Tariff F.C.C. No. 2 (800 ReadyLine Service), 2 FCC Red 78 
(1986) (hereinafter fleafylwe Order; 2 FCC Red 5939 (1987) (\xxe3Di£^ReadyLimOcnficatKm(>der)-, 
(together ReadyLine Orders).
* In addition to recovering the non-traffic sensitive costs of the local exchange carriers, the CCL charges 
include Long Term and Transitional Support payments, which are used to mitigate the effects of the CCL 
depooling mat commenced on April 1,1989. See MIS and WATS Market Structure, CC Docket No. 78-72 
and Amendment of Part 67 of the Commission's Rules and Establishment of a Joint Board, CC Docket No. 
80-286, Report and Order, 4 FCC Red 5048 (1988). The subscriber line charge is a flat per-line charge, 
billed to the end user, that is designed to recover for the LECs a portion of the costs of LEG plant ("local
10062
(LECs) recovered these costs at each end of a call through a charge assessed equally on both 
originating and terminating switched access minutes. In the CC Docket No. 86-1 proceeding 
however, the Commission created a bifurcated CCL rate system to prevent uneconomic bypass 
at the originating end.5 Under this system, the CCL revenue requirement was to be recovered 
through a fixed rate at the terminating end and a varying but lower rate at the originating end, 
with the terminating rale initially fixed at $0.0433 per minute beginning on June 1, 1986.6 The 
originating and terminating rates were periodically modified following implementation of the 
bifurcated approach. In 1987, upon the recommendation of the Federal/State Joint Board, the 
Commission extended the bifurcated approach to CCL charges through November 30,1988.7 The 
Commission later postponed the expiration date for the bifurcated system of CCL charges until 
March 31,1989.8 Effective April 1,1989, section 69.105 of the Commission's rules required the 
LECs to set their originating CCL rates at no more than one cent ($0.01) per minute and to set 
their terminating CCL rates to recover the remaining interstate CCL revenue requirement9
3. Calls using conventional 800 services presented a particular problem for the 
assessment of CCL charges. Because such services normally use special access circuits on the 
terminating end, and thus do not use common line plant to terminate the call, no CCL charge 
would be assessed on this "closed" end.10 Hence, the 800 service carrier would be assessed and
loops") used in the origination and termination of interstate calls. As of July 1, 1987, the maximum 
allowable residential and single-line business subscriber line charge was $2.60. This amount was increased 
to $320, effective December 1,1988, and to $3.50, effective April 1,1989. See MTS and WATS Market 
Structure, CC Docket No. 78-72 and Amendment of Fait 67 of the Commission's Rules and Establishment 
of a Joint Board, CC Docket 80-286, Report and Order, 2 FCC Red 2953 (1987).
5 WATS-Related and Other Amendments of Part 69 of the Commission's Rules, CC Docket No. 86-1 
(hereinafter WATS Access Charge Rulemaking): Notice of Proposed Rulemaking, FCC 86-1 (released Jaa 
6,1986) (WATSNPRM); Report and Order, FCC 86-115, (released Mar. 21,1986) (WATS Access Charge 
Order), reconsideration denied, FCC 86-577 (released Jan. 15, 1987) (Reconsideration Order), farther 
reconsideration denied, 3 FCC Red 496 (1988) (Second Reconsideration Order); Supplemental Notice of 
Proposed Rulemaking, FCC 86-116 (released Mar. 25,1986) (Supplemental WATSNPRM); Second Report 
and Order, FCC 86-377 (released Aug. 26, 1986) (Second WATS Access Charge Order).
6 WATS Access Charge Order, para. 27, App. B at para. 12. For the purposes of this order, me terms 
"originating CCL charge" and "lower CCL charge" will be used interchangeably, as will the terms 
"terminating CCL charge" and "higher CCL charge." We use these terms in this manner to prevent the 
confusion that may result when the terminating CCL charge is assessed on the originating end.
7 MIS/WATS Reconsideration Order, 3 FCC Red at 4548.
8 Hat 4549.
9 MTS and WATS Market Structure, 4 FCC Red 5048, 5048 (1988).
10 The "closed end" of a call refers to the origination or termination of a call that does not use a common or 
subscriber line. An "open end" of a call utilizes exchange carrier common line plant to originate or 
terminate the call. The Commission has found that a call may have no, one, or two open ends. 47 C.FJR. 
§ 69W5QoXlXuy, see cfco MSWATSReconsideration Order, 3 FCC Red at 4555-56 (citing 47 C.F.R. § 
69.207).
10063
pay only the lower, originating CCL charge, which at one point was set at zero. To prevent a 
situation in which a carrier would avoid most or all of its CCL obligation, the Commission 
required that calls with only one open end would be assessed the higher CCL charge on the open end.11
R ReadyLme Service
4. Applying CCI^ charges to AT&Ts "800 ReadyLine" service created a different 
problem AT&Ts "800 ReadyLine" service provided toll-free inward calling, but differed from 
conventional 800 services by having two open ends.12 Because a call using ReadyLine service 
appeared to the originating LEG to be a conventional 800 call, the LEG would assess the higher 
CCL charge on the open originating end, as apparently required by section 69.105(bXlXuO- The 
JEC, at the terminating end, assessed another higher CCL charge because the call was 
terminating on an open end. Addressing this situation in the ReadyLine Clarification Order, the 
Bureau said that it is "unlawful for LECs to assess [higher] CCL charges at both the originating 
and terminating ends on a single call."13 The Bureau directed originating LECs to calculate 
settlements of the overcharges in cooperation with the affected interexchange carriers, using 
customer-provided lists of 800 calls for which billing adjustments were due.14
C Teleconnect ACA Service
5. The Commission was again presented with the issue of CCL overcharges in 
Teleconnect. 15 Applying the ReadyLine holding that it is unlawful to assess the higher CCL 
charge at both the originating and terminating ends of a single call, the Commission upheld the 
Bureau's finding that defendant LECs were liable for improper assessment of the higher carrier 
common line charge on the originating end of calls using Teleconnecf s nationwide 800 travel 
service, even though Teleconnect resold the services of other carriers, and me originating CCL 
charges may have been assessed on the underlying, facilities-based carrier.16 Recognizing that 
the end-to-end nature of the involved communications is more significant than the facilities used, 
the Commission affirmed the Bureau's finding that a call using the Teleconnect All-Call America 
("ACA") 800 Service configuration constitutes a single, end-to-end call, regardless of
11 47 C.F.R. § 69.105(bXlX»i); see cdso MTS and WATS Maricet Structure, 4 FCC Red 5048 (1988).
12 ReadyLine service used its "customers' existing switched access local exchange lines at the terminating end 
rather than the dedicated access lines used to terminate AT&Ts regular 800 service," thereby providing a 
way for customers to obtain 800 service without incurring the cost of installing dedicated lines. See 
ReadyLine Oder, 2 FCC Red at 78.
13 ReadyLine Clarification Order, 2 FCC Red at 5943.
14 Id. at 5942-43.
. u Teleconnect Co. v. Bell Tel. Co. of Pi, 10 FCC Red 1626 (1995).
16 Id
10064
Teleconnecfs intermediate routing switch.17 Further, because the record did not suggest any 
practical means by which Teleconnect could identity the actual originating LECs for the calls at 
issue, the Commission affirmed the Bureau's acceptance of a surrogate method for apportioning 
liability.18
m. THE PLEADINGS 
A. The Complaints
6. Between 1987 and 1991, IT1 provided operator services by reselling MCTs 800 
services to provide customers a means to access its network. A typical ITI call was initiated by 
an end user from a common line open end, was routed through a LEG to an MCI 800 line where 
it was transferred to an ITI switch and operator service center. Once the call reached the ITI 
operator service center, it was processed, then transported to its destination using open-end resold 
services such as MCTs PRISM outWATS service, other WATS-like services or feature group 
services to the LEC serving the local exchange area of the called party. Once received by the 
terminating LEC, the call was routed to the called party over the LECs common lines. In each 
instance, the call would originate and terminate on an open end.
7. In its complaints, ITI claims that its services "are the same as" the services at issue 
in Teleconnect, and "similar to" AT&Ts ReadyLine Service.19 ITI maintains that it was assessed 
the higher terminating charge twice for calls having two open ends, once by a LEC at the 
originating end and again by a LEC at the terminating end, in violation of Section 69.105 and 
the Teleconnect and ReadyLine orders.20
8. Subsequent to filing its complaints, and on its own motion, ITI filed what are 
essentially amendments to its complaints but which it captioned "Supplemental Complaints." 
These amendments identify requested damages totaling $2,253,220.71 from the LECs that 
handled the terminating end of ITIs calls.21 This amount is the alleged difference between the
17 Id. at 1629-30.
18 Id. at 1631-32.
19 Complaint at 2.
20 Id. at 3.
21 ITTs amended complaints identify the following damage amounts attributed to each defendant LEC: 
Southwestern Bell Telephone Company - $346,78627; United Telephone Company of Florida - $60,928.40; 
United Telephone Company of Minnesota - $824.78; United Telephone Company of Ohio - $765.44; Cental 
Telephone Company of Florida - $5392.75; Central Telephone Company of Nevada - $289.52; Central 
Telephone Company of Illinois - $2881.18; NYNEX Corporation - $335,904.51; U S WEST 
Communications, Inc. - $175,158.87; BellSouth Telecommunications, Inc. - $954,56623; GTE North 
Incorporated, GTE South Incorporated, GTE Florida, GTE California, GTE Southwest and Contel of Texas, 
a total of $369,722.76. See ITI "Supplemental Complaints" at 3. ITTs brief, however, identifies 
$1,714,675.31 in damages sought from defendants. See ITT brief at Appendix A rTTs brief also requests 
damages associated with a complaint against Ameritech Corporation. Subsequent to the filing of the brief,
10065
higher CCL charges that IT! claims were assessed for originating Ill's operator service for the 
period 1987 through 1991, and the amount ITI would have paid if the defendants had properly 
assessed the lower CCL charges on the originating end of the calls. ITT also seeks interest on 
the refunds and asks the Commission to order the defendant LECs to pay attorney's fees.22
9. In requesting partial refunds of charges assessed on the originating end of its operator 
service calls, ITI seeks a remedy similar to the remedy adopted in the Telecormect Order. As 
was the case in Telecaimect, HI asks us to accept the use of a surrogate in apportioning 
damages, because, it claims, it is impossible to identify the originating LEG that imposed the 
higher CCL charge.23
B. The Responses of the LECs
10. Virtually all defendants-answered that ITI failed to introduce evidence that the named 
defendant was an originating LEG for any of the calls in question, offered no proof that III had 
any contractual or tariff! relationship with the defendant, and that portions of Ill's claims are 
barred by the statute of limitations. Some defendants also argue that, unlike the service at issue 
in ReadyLine, ITTs call configuration involves more than two ends. Accordingly, defendants 
deny levying any unlawful charges and claim that refunds are not warranted
11. Southwestern Bell Telephone ("SWBT1) claims that ITI failed to state a claim for 
which relief may be granted, in that ITI neither alleged nor offered any proof that SWBT was 
an originating LEG for any of the calls in question24 Further, SWBT denies that it sold any 
services to or had a contract with ITI.25 SWBT argues that the decisions in Telecormect and 
ReadyLine are not applicable to the facts alleged by ITI, because, according to the complaint, ITI 
provides no transport26 Finally,,SWBT argues that if SWBT had been an originating LEG for 
any of the calls in question, which SWBT denies, SWBT had a credit mechanism in place for 
IXCs who qualified for such credits.27 SWBT argues that if the intermediary IXC foiled to pass 
along those credits to ITI, then ITTs cause of action is against the IXC.28
however, on July 5,1995, Ameritech and ITI filed a joint motion to dismiss the complaint stating mat the 
parties had negotiated a settlement We granted mat motion. International Telecharge, Inc. v. Ameritech 
Corporation, 10 FOC Red 7749 (1995).
22 Complaint at 4.
23 HI brief at 13-14.
24 SWBT answer at 2.
25 Id
26 Id
27 Id
» id
10066
12. United Telephone Company of Florida, United Telephone Company of Minnesota and 
United Telephone Company of Ohio (hereinafter referred to collectively as "United") answered 
separately, but each makes the following arguments. Each argues that ITI is not entitled to relief 
because the underlying IXC may have already received a credit for the higher terminating CCL 
charge at the originating end.29 Hence, United argues, ITI's claim, if there is one, lies with the 
intermediary IXC.30 In addition, United argues that nTs request for damages is barred because 
ITI fails to identify the amount of damages for which recovery is sought31 Further, United 
argues that ITI failed to mitigate its damages by requesting a credit for payment of the higher 
terminating CCL charge on the originating end pursuant to United's FCC tariff No. 5 and failed 
to file a claim against the intermediary IXC.32 United also argues that if ITI is entitled to relief, 
its claim is barred in part by the statute of limitations.33 Finally, United argues that there is no 
statutory or contractual basis for an award of prejudgment interest or attorney's fees.34
13. Central Telephone Company of Florida, Central Telephone Company of Nevada and 
Central Telephone Company of Illinois (hereinafter referred to collectively as "Center) also 
answered separately, but each makes the following arguments. Each claims that ITI failed to 
allege facts that state a claim for relief35 and that ITI is not entitled to relief because Centel 
complied with Commission rules in assessing the higher CCL charge on the originating end of 
the 800 service resold by ITI.36 Centel argues that ITI's call configuration is materially different 
from the configuration involved in ReadyLine, therefore, Centel argues, the decision in ReadyLine 
does not apply.37 Moreover, Centel maintains mat it has no privity of contract or tariff with m,38 
and that a portion of FITS, claim is barred by the statute of limitations.39 Centel asserts that even 
if ITI is entitled to damages, the Commission has no power to award attorney's fees.40
29 United answer at 3.
30 Id
31 Id at 2-3.
32 Id at 3.
33 See, e.g., United Telephone Company of Florida answer at 2.
34 Id
35 Centel answer at 2.
36 Id at 3-4.
37 Id at 6.
38 Id at 4.
39 Id
40 Id
10067
14. NYNEX claims that ITI failed to allege specific conduct sufficient to constitute a 
violation of the Communications Act or Commission rules or orders.41 NYNEX argues that ITI's 
service is unlike the service at issue in ReadyLine in that ITS's service involves more than-two 
ends.42 NYNEX argues that any refunds for overcharges, if appropriate, would be due from the 
intermediary IXC, not NYNEX NYNEX also asserts that ITI's claims prior to May 1, 1990 are 
barred by the statute of limitations.
15. U S WEST argues that ITI is not entitled to relief, that ITI failed to join a party or 
entity needed for the just adjudication of Ill's claim, and that any request for relief for charges 
prior to May 1990 is barred by the statute of limitations.43 Further, U S WEST argues that ITI 
failed to plead or establish that ITI was ever a customer of U S WEST or one of its afBliates for 
the services at issue or that ITI ever paid U S WEST or one of its affiliates originating CCL 
charges for those originating interstate access services.44 Moreover, U S WEST claims that on 
or about July 1, 1990, the originating and terminating CCL charges of U S WESTs indirect 
subsidiaries, MTN, NWB and PNB, were equalized, and have been equalized ever since.45 
Hence, U S WEST argues, ITI could not have been damaged by U S WEST or its indirect 
subsidiaries since July 1, 1990. Finally, U S WEST argues that the ITI call configuration 
represents a multiple call arrangement to which the decision in ReadyLine does not apply.46
16. BellSouth asserts that nTs claims are barred by the statute of limitations.47 
BellSouth argues that ITI failed to plead or establish that BellSouth provided originating access 
to ITI, assessed the terminating CCL charges for the originating access, or that BellSouth failed 
to adjust such charges in accordance with its tariff.48 BellSouth argues that ITI is not entitled 
to relief because the complaint seeks to challenge the lawfulness of terminating CCL charges 
assessed to entities other than ITI.49 BellSouth maintains .that only the originating access 
customer is entitled to seek that credit, and only from the originating LEG.50
17. GTE North Incorporated, GTE South Incorporated, GTE Florida Incorporated, GTE
41 NYNEX answer at 4.
42 Id at 3.
43 US WEST answer at 4.
44 Id at 4-5.
45 Id at 5.
46 Id
47 BellSouth answer at 3.
48 Id
49 Id at 4.
50 Id
10068
California Incorporated, GTE Southwest Incorporated and Contel of Texas (hereinafter referred 
to collectively as "GTE") deny that they have improperly charged a higher terminating carrier 
CCL charge at the terminating end of a call and maintain that have charged in accordance with 
Commission rules and GTE's tariff.51 GTE also argues that damages sought by ITI prior to May 
7, 1990 are barred by the statiite of limitations.52
C Ill's Reply
18. ITI replies that the decision in Telecormect controls this proceeding and as such, ITI 
is entitled to recover damages despite the absence of a direct relationship with the originating 
LEG, ITI argues that its cause of action did not accrue until the Bureau released the Telecormect 
decision and that it could not have known until then that it had a right to seek damages from 
defendants for CCL overcharges. Therefore, ITI argues, the statute of limitations does not bar 
ITI's claim.
IV. DISCUSSION
19. First, we must decide whether ITI's call configuration represents a single call. If so, 
we must next determine whether ITI's configuration is sufficiently similar to AT&Ts 800 
ReadyLine service to warrant application of our ReadyLine Orders. Finally, if ITFs service is 
indeed a ReadyLine-type service, we must determine whether ITI is entitled to recover past CCL 
overcharges and whether any portion of ITTs claim is barred by the statute of limitations. For 
the reasons discussed below, we find that: (1) an ITI operator service call is a single call; (2) 
ITTs operator service is a ReadyLine-type service subject to our ReadyLine Orders:, (3) a portion 
of ITTs claim is barred by the statute of limitations; and (4) ITI failed to meet its burden of proof 
with respect to damages.
A. Number of Calls
20. Several LECs argue that ITTs calls are in tact two calls, one over MCI's 800 lines 
to ITI's switch, and the other from ITI's switch by MCI to ITTs customer, the end user. ITI 
replies that its calls are like an AT&T ReadyLine call, similar to a Telecormect call, and that an 
ITI operator service call constitutes one call. ITI argues that the existence of an intermediate 
switch does not change the nature of the call, and maintains that Telecormect established the right 
of a carrier to recover damages caused by assessing higher CCL terminating access service 
charges twice, even though the carrier resold the service of other carriers.
21. In Telecormect the Bureau stated that "[cjourts and this Commission have consistently 
emphasized that they consider the end-to-end nature of communications rather than the various 
facilities used"53 In a parallel case the Bureau determined that an 800 service credit card call
51 GTE answer at 3.
52 Id.
53 Telecormect, 6 FCC Red at 5206 (citing National Ass'n of Regulatoiy Utility Comm'rs v. FCC, 746 F2d 
1492, 1498 (D.C. Cir. 1984)).
10069
that is routed through an interexchange carrier's switch should not be viewed as two calls and that 
the switch was merely an intermediate step in a single, end-tb-end communication.54 "Interstate 
wire communication is regulated from its inception to its completion by the Communications Act 
and, within the meaning of the Act, does not end at an intermediate switch."55
22. Hence, there is an assumption that interstate communication extends from the 
inception of a call to its completion.56 The Commission was guided by that principle in 
Teleconnect, and we are guided by that principle here. After being carried over MCI's 800 line 
to ITTs switch, an IT1 call continues to its destination, regardless of any intermediate switch or 
transmission facility. Thus, we find that ITTs calls, in the configuration presented to us in this proceeding, are single, end-to-end calls, unaffected by Ill's intermediate routing switch.
B. Applicability of ReadyLine
23. Most of the defendants argue unpersuasively that ITI's operator service is not similar 
to AT&Ts 800 ReadyLine service in any material way. While not identical in every respect, we 
find that these services do share such significant characteristics as two open ends and the use of 
an 800 line for the first leg of the call. Just as the Commission determined in Teleconnect, we 
find here that the ownership of the 800 leg of the call by an entity other than the complainant 
is not sufficient to make the services materially different Similarly, we conclude that the 
handling of the second leg of the call by an entity other than the complainant does not alter our 
view that ITTs operator service is similar to the ReadyLine service configuration. We therefore 
find that ITTs call configuration is similar to AT&Ts ReadyLine configuration, except that the 
latter is a reseller of IXC service, rather than a direct provider.
24. Because we find that ITTs operator service is a ReadyLine-type service, the 
defendants' assertion that our ReadyLine Orders do not apply to Ill's operator service is 
unavailing. In our ReadyLine Clarification Order, we specifically avoided focusing exclusively 
on AT&Ts 800 ReadyLine service. The use of language such as "all calls that have two open 
ends"57 clearly indicates that the orders apply generally to all similar services using 800 lines, 
including ITTs operator service.
25. We are also unpersuaded by defendants' argument that Teleconnect is not applicable 
to these tacts. In Teleconnect, like here, defendants argued that the call configuration involved 
more man two ends, that the higher CCL charge on the originating end was justified and that 
ReadyLine did not apply. The Commission disagreed, noting mat "the user of ACA service 
intends to make a single call terminating not at the Teleconnect intermediate switch... but at
54 Southwestern Bell, 3 FCC Red 2339, 2341 (1988).
55 Teleconnect, 6 FOC Red at 5206 -(citing National Ass'n of Regulatory Utility Comm'rs v. FCC, 746 F.2d 
at 1498).
* Puerto RcoTeLCav. PCC, 553 R2d 694, 699 (1st Or. 1977).
* RecdyLfmOcrifkation Order, 2?C
10070
the telephone line of the called party."58 While recognizing that Teleconnecfs ACA service was 
not identical to ReadyLine service, the Commission determined that the two services shared 
significant characteristics, including two open ends and the use of an 800 leg for the first portion 
of the call.59 The Commission found that any differences were immaterial to the matter before 
it, and concluded that the ReadyLine decision applied to the Telecormect call configuration. 
Here, ITI's call configuration embodies^the same characteristics discussed by the Commission in 
Teleconnect, namely, two open ends and the use of an 800 leg for the first portion of the call. 
Further, callers using Ill's operator service intend to make a single call, which terminates with 
the called party, not at the intermediate switch. As defendants have not presented evidence that 
persuades us that ITTs call configuration is materially different from ReadyLine and Telecormect, 
we conclude that those decisions are applicable here.
C Charges Assessed
26. In its WATS Access Charge Order,  the Commission addressed whether resellers 
"should be required to make two carrier common line contributions - one directly to the 
exchange carrier through the payment of the carrier common line charge and a second indirectly 
through the inclusion of that charge in the rates for the services it resells."61 The Commission 
decided that, although exemption from all switched access charges for WATS resellers would be 
unfair, "resellers should not have to make a 'double contribution' toward recovery of common 
line costs.'"2
27. The same basic issue of double charges raised in the WATS Access Charge Order 
gives rise to ITTs complaints. In the present case, a higher CCL charge is assessed against MCI 
at the beginning of ITTs operator service call over MCI 800 lines, and that charge is presumably 
included in MCTs rates for service to ITI. Then, a higher CCL charge is levied at the open 
terminating end of the operator service call, again directly against MCI as DCC, but indirectly 
against ITI. Hence, it appears clear that ITI pays two higher CCL charges, one indirectly at the 
originating end and the other indirectly at the terminating end. This payment of two higher CCL 
charges for a single call is squarely contrary to the Commission's prior determination mat such 
"a 'double' contribution [of access payments] is not appropriate." 
28. Section 69.105 contemplated that calls with two open ends were to be assessed only 
one higherCCL charge and that me charge was to be assessed on the terminating end.64 Hence,
58 Teleconnect, 10 FCC Red at 1630.
59 Id
60 WATS Access Charge Order, FCC 86-115, Section IV.
«' WATS NPRM,FCC 86-1, para. 12 o29.
62 WATS Access Charge Order, FCC 86-115, para. 19.
63 WATS NPRM, FCC 86-1, para. 12 n.29.
64 ReadyLine Clarification Order, 2 FCC Red at 5942.
10071
in the ReadyLine Clarification Order, the Commission concluded that it was unlawful to assess 
the higher CCL charge at both the originating and terminating ends of a single call, and directed 
the LECs so doing to settle any overcharges with the appropriate IXCs. The Commission 
decided that credit for the second charge should come from the originating end. In Teleconnect, 
the Commission applied the ReadyLine Order and reiterated that it is unlawful to assess two 
higher CCL charges on a call with two open ends.
29. In the instant case, the originating LEG would know only that the call is using 800 
service and would assume that the call has only one open end, as is the case with most 800 
service calls. Consequently, the originating LEG would assess the higher CCL charge.65 Viewed 
independent of the remainder of the ITI operator service call configuration, it would appear that 
the 800 service call originates on an open end and terminates on a closed end.66 Here, however, 
the call also terminates on an open end, resulting in a configuration having two open ends. 
Accordingly, the lower CCL charge should have been assessed by the originating carrier.67 
Hence, we conclude that defendant LECs did wrongfully assess the higher CCL charge on the 
originating end of the MCI 800 portion of an ITI operator service call.
D. Privity
30. Several defendants argue that they are not liable for refunds of the higher originating 
fees to ITI, because ITI failed to establish privity of contract or tariff between ITI and the 
defendant LECs. Defendants also argue that ITI fails to prove that the originating LECs assessed 
a higher CCL charge on MCTs 800 service and that MCI passed this charge on to ITI. Because 
only MCI had a direct relationship with the originating LEG, defendants contend that MCI is an 
essential party to these proceedings. In its opposition, III responds that unless the defendants 
notify ITI that each has granted the intermediary IXC an appropriate credit, III has the right to 
seek recovery from the defendants.68
31. Section 69.105(c) of the Commission's rules states that "[a]ny interexchange carrier 
shall receive a credit for Carrier Common Line charges to the extent that it resells services for 
which these charges have already been assessed"69 Section 69.105(c) does not distinguish 
between facilities and non-facilities based resellers. Therefore, a reseller, whether facilities based 
or non-facilities based, is entitled to partial refunds from defendants who assessed higher CCL 
charges on the originating ends of a single call with two open ends, pursuant to Section 
69.105(c). Thus, SWBTs argument that the decisions in Teleconnect and ReadyLine are not
*» See 47 C.F.R. § 69.105(bXlX"0 ("All open end minutes on calls with one end (e.g., an 800 or FX call) 
shall be treated as terminating minutes.").
66 See also Teleconnect at 1630.
67 See supra para. 3-4.
68 See, eg., ITI v. Southwestern Bell Tel. Corp., FIT Reply and Opposition to Motion to Dismiss at 4-5 n.10.
69 47 C.F.R. § 69.105
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applicable to this complaint because III provides no transport,70 is unavailing.
32. Moreover, the Commission has already addressed this issue in its Telecowtect order.71 
There, the defendant LECs maintained that the underlying IXCs, rather than the complainant, 
were the proper parties either to claim credit from the defendants or bear liability to the 
complainants because those IXCs had privity with both the defendants and with the complainants, 
respectively. The Commission disagreed and found that, despite the lack of privity between 
them, the complainants were the proper parties to request credit and that the defendants were the 
proper parties to bear liability for the refunds. The Commission stated that the underlying IXCs 
could not bear liability because the IXCs had not acted unlawfully in passing through the higher 
CCL charges to the complainants. The Commission also stated that the underlying IXCs could 
not have themselves obtained credit because a higher CCL charge on the originating end of the 
underlying IXCs portion of me call alone would be proper. When the originating end portion 
was resold by an IXC as part of a single interstate call with two open ends, however, a partial 
refund of the CCL charges on the originating end became necessary because our rules do not 
permit two higher CCL charges to be assessed on a single call. Here, ITI is the only party that 
has, directly or indirectly, paid both CCL charges. As such, ITI is entitled to a partial refund.
£. Statute of Limitations
33. Virtually all defendants argue that a portion of ITTs claim is barred by the two-year 
limitations period contained in Section 415 of the Communications Act72 Section 415(c) of the 
Act requires that complaints for the recovery of overcharges be filed within two years from the 
time the cause of action accrues.73 Hence, defendants argue, the two-year statute of limitations 
began to run from the time III was allegedly billed the higher CCL charge at the originating end 
of its calls. Therefore, defendants argue, ITTs claim for damages is limited to the two-year 
period prior to May 1992, the date on which ITI filed the complaints. ITI contends that the two- 
year limitations period does not bar any portion of its claim, because its cause of action did not 
accrue until the Commission's release of the Telecormect order. ITI argues that its cause of 
action for damages incurred during the period from 1987 through 1991, accrued on September 
5, 1991, which is the date that the Commission released its decision in Telecormect. ITI 
maintains that it was the release of the Telecormect order mat apprised it of its right to seek 
damages and commenced the running of the statutory period
34. Defendants argue that from 1987 on, when the ReadyLine decision was affirmed, ITI 
was on notice that Commission rules precluded assessment of the higher jCCL charge on the 
originating end of a call configured with two open ends.74 Moreover, defendants argue mat ITT
70 SWBT answer at 2.
71 Teleconnea, 10 FCC Red at 1631.
72 47 U.S.C. § 415(c).
73 Id
74 See BellSouth brief at 13.
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has not presented any circumstances that would have tolled the statute of limitations.75 Therefore, 
defendants argue, any claim for damages prior to May 1990 is barred by the statute of 
limitations.
35. The U.S. Court of Appeals for the District of Columbia Circuit recently addressed 
the statute of limitations issue in US Sprint Communications Co. v. FCC.16 There, the court 
affirmed a Commission order77 dismissing a complaint filed in January 1987, by Sprint against 
AT&T which alleged, inter alia, that AT&Ts rates for 56 kilobits per second ("kbps") Dataphone 
Digital Service ("DOS") between 1982 and 1984 were excessive. The court held that Sprints 
action was barred by the statute of limitations because Sprint had "inquiry notice" of its possible 
claim for more than two years before Sprint filed its complaint78 and because Sprint failed to 
satisfy its burden of showing specific facts that would justify tolling the limitations period.79 The 
court pointed out that another user of 56 kbps DDS had sufficient notice to file a complaint 
against AT&T, similar to the one filed by Sprint, as early as 1981.* 
36. Here, ITI filed its complaints in May 1992. Teleconnect, however, filed a similar 
complaint in July 1988. ITI argues that "[u]ntil the Teleconnect decision, no authority ... had 
addressed the issue of whether the particular system configuration and rate assessment scheme 
in Teleconnect was unlawful, and, thus, gave rise to liability for'overcharges."81 We disagree. 
In Teleconnect the Commission applied the ReaayLine holding that it is unlawful to assess two 
higher CCL charges for a single call having two open ends. Having applied the ReaayLine 
holding to Teleconnecfs call configuration, the Commission found defendants liable for CCL 
overcharges. We conclude that just as Teleconnect was on notice as early as 1988 that it had a 
potential claim based on ReaayLine, so was ITI.
37. Therefore, we conclude that Disclaim for damages accruing prior to May 1990 (two 
years prior to the date ITI filed these complaints),82 is untimely pursuant to Section 415(c). 
Accordingly, we find mat ITTs claim for damages from the period 1987 through May 1990, is
73 See, eg., BellSouth brief at 14.
76 76 F.3d 1221 (1996).
77 U.S. Sprint Conm Co. v. AT&T, 9 FCC Red 4801 (1994).
78 76 F.3d 1221, 1229.
79 Id at 1228.
80 Id at 1229.
81 HI brief at 10.
82 ITI filed complaints against Southwestern Bell Telephone Corporation, United Telephone Company of 
Florida, United Telephone Company of Mumesota, United Telephone Company of Ohio, U S West, Inc., 
NYNEX Corporation, Central Telephone Company of Florida, Central Telephone Company of Nevada and 
Central Telephone Company of Illinois on May 4, 1992; and against Bellsouth, GTE North, Inc., GTE 
South, Inc., GTE Florida, GTE California, GTE Southwest and Contel of Texas on May 7, 1992.
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barred by the statute of limitations. 
F. Damages
38. We conclude that the defendant LECs are liable to III for the difference between the 
amounts actually paid by ITT for originating ITTs operator services calls and the amounts III 
would have paid if the defendants had properly assessed the lower CCL charges to originate these 
calls, for the period May 1990 through December 1991. It is well established that, in a formal 
complaint proceeding pursuant to Section 208 of the Act, the complainant has the burden of 
proof.83 We must now determine whether in has met its burden of proof with respect to 
damages during that period
39. In its original complaints, III identified the defendants as originating LECs. In its 
briefs, however, IH claims that, similar to the situation in Telecormect, ITI cannot identify the 
originating LEG from which to receive a refund.84 ITI therefore purports to have used a 
surrogate to determine damages.85 ITI claims that its surrogate reflects the difference between 
the higher terminating CCL charges that were assessed on the originating end and the lower 
originating CCL charges that ITI claims should have been assessed In Telecormect, the 
Commission accepted that a surrogate could be used to apportion damages. That decision is 
consistent with the Commission's prior views on the issue. When, in its Bifurcation Order, the 
Commission determined that the bifurcated CCL charge structure should be extended, it 
recognized, inter alia, the administrative problem of implementing new 800 Readyline-type 
services because of the inability of the originating LECs to distinguish these 800 services from 
800 services with just one open end Acknowledging that these 800 services are more difficult 
to bill properly, the Commission observed mat several credit mechanisms developed to address 
the situation were apparently working acceptably.87 The Commission stated that it expected "that 
most of these problems will be resolved as the credit mechanisms are improved and as the 
carriers involved become accustomed to the new service arrangements."88
40. While we acknowledge that the use of a surrogate may be acceptable in a variety of 
contexts, in this instance III has failed to provide data sufficient for us to conclude that the 
surrogate used by ITI is an appropriate mechanism for apportioning damages in this case. In
83 See, e.g., Amendment of Rules concerning Procedures to be Followed When Formal complaints are Filed 
Against Common Carriers, 8 FCC Red 2614,2616-17 (1993); Connecticut Office of Consumer Counsel v. 
AT&T Communications, 4 FCC Red 8130, 8133 (1989), affdsub rum Connecticut Office of Consumer 
Counsel v. FCC, 915 F. 2d 75 (2d Cir. 1990X cert denied, 111 S. a 1310 (1991); see generally, 47 CFJR. 
§§ 1.720-1.735.
84 ITI brief at 13.
85 Id at 13-14.
86 See MTS and WATS Market Structure, 4 FCC Red 5048 (1988) (Bifurcation Order).
87 Id at 5053.
88 Id
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its brief, 111 lays out the five step process that it claims to have used in developing the damage 
estimates attributed to each defendant89 HI states that it:
1) first compiled monthly total switched access originating minutes from call detail 
reports which were generated by ITTs switches;
2) next calculated the percentage of originating minutes attributable to each 
defendant by dividing the total originating minutes for each defendant by the total 
originating minutes from step 1;
3) then applied the percentage calculated in step 2 to total 800 minutes to arrive at 
"Orig. Minutes" column of Appendix A to its brief;
4) applied a monthly originarmg-to-terminating minute ratio to the originating 
minutes in order to determine the originating minutes that were actually 
terminated, which resulted in the "Term. Minutes" column of Appendix A to its 
brief; and
5) calculated the refund by multiplying the difference between the defendants' lower 
and higher interstate CCL charges by the minutes calculated in step 4 which is the 
"Variance" column of Appendix A to its brief.90
ITI did not provide any further information regarding the source df the numbers used. Despite 
extensive discovery and repeated requests for clarification, ITI has failed to substantiate its 
estimates. During a status conference held April 6,1995, ITI was directed by Commission staff 
to submit factual support for the numbers used in its calculations and to give defendants all 
reliable probative evidence upon which it bases its claims.91 Nonetheless, the exhibit attached 
to ITTs brief consists entirely of an unverified chart explained only in counsel's argument in the 
brief. We agree with U S WEST that counsel's argument cannot substitute for evidence. 
Furthermore, the chart seems to suggest that ITI would be entitled to damages from at least one 
defendant, U S WEST, after U S WEST equalized its originating and terminating CCL charges, 
demonstrating that the chart cannot be accurate. Moreover, the damage estimates included as an 
appendix to ITFs brief differ from the damages requested in the amendment to its complaints that 
ITI filed on January 13,1993.92 ITI offers no explanation for the discrepancy. We conclude that 
ITI has failed to meet its burden of proof with respect to damages.
41. hi August 1992, United filed a motion to bifurcate these proceedings into two phases. 
United requested mat we address the issue of liability in the first phase, then establish a separate 
phase to address damages. TWs is similar to me ar^roadi we adopted in re/econnec?: However, 
as distinct from Telecormect, the complainant here, ITI, opposed the defendants motion, arguing
89 ITT brief at 14.
90 Id
91 See letters from Thomas Wyatt, Chief, Formal Complaints Branch, Enforcement Division, to all counsel of 
recoid (April 14, 1995, and May 5, 1995), memorializing staff rulings.
92 See supra note 2\.
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that the motion was groundless and "conceivably a poor use of the Commission's resources."93 
After considering the arguments, we decided mat the parties and Commission's interests in' 
obtaining the earliest practicable resolution to this matter would be better served by requiring the 
parties to develop a full record on the issues of both liability and damages.94 Here, also, unlike 
in Teleconnect, III filed amendments to its complaints95 indicating the amount of damages sought 
from each defendant. We therefore denied United's motion to bifurcate these proceedings.
42. Having found that ITI has failed to meet its burden of proof with respect to damages, 
Ill's request for prejudgment interest is moot. Further, we deny Ill's request that we award it 
attorney's fees. We do not have the authority to award attorney's fees.96
G. Miscellaneous Pleadings
43. US WEST filed a Motion to Dismiss ITI's complaint and supplemental complaint, 
challenging the Commission's jurisdiction to adjudicate the complaint.97 U S WEST argues that 
U S WEST is not a common carrier under the Communications Act and does not provide 
common carrier services.98 U S WEST acknowledges that Mountain States Telephone and 
Telegraph Company, Northwestern Bell Telephone Company and Pacific Northwest Bell 
Telephone Company are predecessors in interest to U S WEST Communications, Inc., which is 
a common carrier provider of interstate services regulated by the Commissioa99 U S WEST 
also acknowledges that U S WEST Communications, Inc. is an indirect subsidiary of U S WEST, 
but maintains that ITI named the wrong party as defendant100 During the April 6, 1995, 
conference regarding this proceeding, Commission staff directed ITI to acknowledge in its briefs 
the proper defendant, that is, the local exchange carrier subsidiary of the holding company, and 
noted that the proper defendant had been given actual notice and would suffer no prejudice as 
a result of ITI's oversight.101 ITT complied with this request. Accordingly, U S WESTs Motion 
to Dismiss is denied.
93 United Motion for Extension and Objection at 1.
94 See letter from Thomas Wyatt, Chief, Formal Complaints Branch, Enforcement Division, to all counsel of 
record (April 14, 1995) memorializing staff rulings.
95 See supra para. 8.
96 Comcark Cable Fund 111 v. Northwestern Indiana Telephone company, 100FCC2d 1244,1257 n.51 (1985).
97 US WEST answer at 1-2 and supplemental answer at 1-2.
98 US WEST answer at 1-2.
99 Id. at 2.
100 Id.
101 See letter from Thomas Wyatt, Chief, Formal Complaints Branch, Enforcement Division, to all counsel of 
record (April 14, 1995), memorializing staff rulings.
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44. Centel and GTE also filed motions to dismiss Ill's complaint SWBT, United and 
NYNEX filed motions to dismiss ITI's complaint and supplemental complaint ITI opposed each 
motion. These motions generally allege that ITT failed to present a cause of action as required 
by the Commission's rules. Section 1.721(a) of the Rules requires that a formal complaint 
contain "[cjitation to the section of the Communications Act and/or order and/or regulation of 
the Commission alleged to have been violated"102 as well as a "complete statement of facts which, 
if proven true, would constitute such a violation."103 Thus, a complaint is not required to prove 
a violation conclusively.104 Here, ITI alleges that the LECs violated the relevant Part 69 rules 
by assessing two higher CCL charges on each of its operator service calls. A statement of 
supporting facts accompanies the allegations. We conclude, therefore, that m has met its burden 
under Sections 1.721(a) and 1.728(a) of the Commission's rules. Accordingly, we deny the 
defendants' motions to dismiss the complaints.
45. In addition, United filed a Motion to File Errata to Answer on June 18,1992. SWBT 
filed a Motion for Leave to Amend Answer on July 16, 1992 and Centel filed a Motion for 
Leave to File Out of Time on April 23, 1993. In the interest of compiling a more complete 
record, these motions are granted and ITTs Motion to Strike Supplemental NYNEX, U S WEST 
and BellSouth Answers as Untimely filed on February 24,1993 are denied. Again, in the interest 
of compiling a complete record, FITs Motion for Leave to File Late Reply to Answer of United 
filed on February 24,1993 and GTE on February 14,1993 are granted. As we have reached this 
decision on the merits, ITTs Motion for Leave to File Consolidated Motion for Summary 
Judgment and its Consolidated Motion for Summary Judgment filed on July 28, 1993 are denied.105
V. CONCLUSION
46. For the reasons stated above, we conclude that the defendants unlawfully charged ITI 
for the higher CCL charge on the originating end of ITTs operator service calls. We further 
conclude that m has failed to prove that it is entitled to damages and the amount of its damages. 
Accordingly, insofar as ITI seeks a ruling that defendants violated Section 69.105 of the rules 
and Commission orders, we grant ITTs complaints but deny the complaints as to damages.
VL ORDERING CLAUSES
47. ACCORDINGLY, IT IS ORDERED, pursuant to Sections 1,4(i), 4(j), and 208 of 
the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i), 154(j), and 208, and 
me authority delegated in Section 0.291 of the Commission's rules, 47 C.F.R § 0.291, that the
102 47 C.F.R § 1.721(aX4).
103 47 C.F.R § 1.721(aX5).
104 American Satellite Corp., 64 FCC 2d 503, 508 (1977).
105 Commission staff ruled on numerous discovery motions during the status conference held on April 6,1995. 
See letter from Thomas Wyatt, Chief; Formal Complaints Branch, Enforcement Division, to all counsel of 
record (April 14, 1995), memorializing staff rulings.
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complaints filed by International Telecharge, Inc. on May 4, 1992 and May 7, 1992, and the 
amendments to its complaints filed by International Telecharge, Inc. on January 13, 1993, ARE 
GRANTED to the extent indicated above, and otherwise ARE DENTED.
48. IT IS FURTHER ORDERED, that the Motions to Dismiss filed by U S WEST, 
Central Telephone Company of Illinois, Central Telephone Company of Florida, Central 
Telephone Company of Nevada, GTE North, Inc., GTE South, Inc., GTE Florida, GTE 
California, GTE Southwest, Contel of Texas, Southwestern Bell Telephone, United Telephone 
Company of Florida, United Telephone Company of Minnesota, United Telephone Company of 
Ohio, and NYNEX ARE DENIED.
49. IT IS FURTHER ORDERED, that the Motions to File Errata to Answer filed by 
United Telephone company of Florida, United Telephone Company of Minnesota and United 
Telephone Company of Ohio on June 18, 1992 ARE GRANTED.
50. IT IS FURTHER ORDERED that the Motion for Leave to Amend Answer filed by 
Southwestern Bell Telephone Company on July 16, 1992 IS GRANTED.
51. IT IS FURTHER ORDERED that the Motions for Leave to File Out of Time filed 
by the Central Telephone Company of Florida, Central Telephone Company of Nevada and 
Central Telephone Company of Illinois on April 23, 1993 ARE GRANTED.
52. IT IS FURTHER ORDERED that Ill's Motion for Leave to File Late Reply to the 
Answers of United Telephone Company of Florida, United Telephone Company of Minnesota 
and United Telephone Company of Ohio on February 24J"1993 and GTE North Inc., GTE South, 
Inc., GTE Florida, GTE California and GTE Southwest on February 14,1993 ARE GRANTED.
53. IT IS FURTHER ORDERED, that ITI's Motion for Leave to File Consolidated 
Motion for Summary Judgment and its Consolidated Motion for Summary Judgment on July 28, 
1993 ARE DENIED.
54. IT IS FURTHER ORDERED, that ITI's requests for an award of prejudgment 
interest and attorney's fees ARE DENIED.
FEDERAL COMMUNICATIONS COMMISSION
ReginzrM. Keeney
Chief, Common Carrier Bureau
10079