USTelecom, NCTA, Others Challenge FCC Treble-Damages Decision

Cable and phone company trade groups have teamed up to call a foul on the Federal Communications Commission for what they said was deciding to triple the damages for violating federal program payment rules (for Universal Service Fund and other fees), a move they say came without notice in violation of the Administrative Procedures Act. They call the move to a flat treble damages approach a one-size-fits-all model with potentially draconian results. The APA requires the FCC to give regulated entities notice about substantive changes.

The groups argue the change was substantive and that notice was not provided. USTelecom, CTIA, NCTA and CompTel have filed a joint petition asking the FCC to stay its decision and reconsider its policy statement, according to USTelecom. "Not only was proper notice and comment not observed, the treble damages methodology is “arbitrary and capricious” and appears aimed at driving increased forfeiture amounts without taking into account the [requisite] range of factors," USTelecom said.