FCC fines for unauthorized carrier changes and consumer billing

The FCC has a poor record of actually collecting money from Notices of Apparent Liability (i.e. fines). There are flaws in the FCC notification rules, but it does have some rules requiring indpendent verification of carrier changes.

FCC Fines Tele Circuit $4,145,000 for Cramming & Slamming Violations

FCC fines Tele Circuit Network Corporation $4,145,000 for switching consumers from their preferred carrier to Tele Circuit without permission and adding unauthorized charges to consumers' bill

In this Order, the Federal Communications Commission (FCC or Commission) adopts the findings in the Notice of Apparent Liability (Tele Circuit Notice or Notice) that Tele Circuit Network Corporation (Tele Circuit or Company) engaged in slamming and cramming, made misrepresentations to consumers, and violated a Commission order by failing to produce certain information and documents relating to the Company’s business practices. The Company’s misconduct harmed elderly and infirm consumers, in some cases leaving them without telephone service for extended periods of time—with Tele Circuit refusing to reinstate service until the crammed charges were paid in full. These practices violated sections 201(b) and 258 of the Communications Act of 1934, as amended (the Act), and section
64.1120 of the Commission’s rules. After reviewing Tele Circuit’s response to the Notice, we decline to find that the Company violated section 1.17(a)(2) of the Commission’s rules and reduce the proposed penalty by $1,178,322, and therefore impose a forfeiture of $4,145,000.

In particular, Tele Circuit did not provide proof that the complainants listed in the LOI authorized Tele Circuit to switch their long distance carrier. In response to the LOI, Tele Circuit did produce some third-party verification recordings,31 which are supposed to provide evidence that customers assented to changing their long distance service from their existing carriers to Tele Circuit. However, some complainants who listened to the recordings alleged that the third-party verifications were falsified. In all, the Bureau reviewed more than 100 written consumer complaints, contacted numerous complainants, obtained
substantial documentary evidence (including copies of consumer telephone bills), listened to third-partyverification recordings, and received data from consumers’ carriers.

  Tele Circuit switched the telephone service of 24 consumers without verified authorization to do so, in violation of section 258 of the Act and section 64.1120 of the Commission’s rules.


Did the FCC ever collect its $50 million from “Sandwich Isles Telecommunications” for blatant fraud? At this scale I wonder how or why certain people are not in federal prison.



V. ORDERING CLAUSES69. Accordingly,IT IS ORDEREDthat Sandwich Isles Communications, Inc., Waimana Enterprises, Inc., and Albert S.N. Hee, pursuant to section 220(d) of the Communications Act of 1934, as amended, and section 1.80 of the Commission’s rules,293ARE JOINTLY AND SEVERALLY LIABLE FOR A MONETARY FORFEITUREin the amount of forty-nine million, five hundred and ninety-eight thousand, and four hundred and forty-eight dollars ($49,598,448) for violating the Act and the Commission’s rules.70. Payment of the forfeiture shall be made in the manner provided for in section 1.80 of the Commission’s rules within thirty (30) calendar days after the release of this Forfeiture Order.29

FCC is not law enforcement. The FTC can send people to prison. The FCC can only send press releases.


Neither FCC nor FTC can send people to prison. Only the Department of Justice can criminally prosecute people (or corporations, i.e. WORLDCOM, ENRON, etc) in the U.S. Federal system. States and other countries vary.

FCC can deny future licenses and make things difficult for long-term carriers. Most scammers declare bankruptcy or just never pay.

FCC proposes millions in fines, collects $0
November 23, 2015

FCC “fined” robocallers $208 million since 2015 but collected only $6,790
Both FCC and FTC fail to collect vast majority of robocall fines, WSJ reports.
March 28, 2019

If your carrier doesn't indpendently verify LOAs, the security of your circuits is zip. Ask your carrier salesperson how they validate LOAs. If they just check a letterhead, tell your carrier salesperson to do better.

When it affects the salesperson's commission, things happen.

Don't depend on the FCC.

It just got harder for the FTC to fine people: Supreme Court Limits FTC's Ability to Recoup Ill-Gotten Gains

It just got harder for the FTC to fine people

Based on the unanimous US Supreme Court decision, they never could in the first place, at least in the particular manner that was challenged.

It’ll be up to Congress to explicitly define how big the FTC’s teeth are, not the unelected leadership of a regulatory body to decide for themselves. Working as Intended (despite the undesirable end result).


:: “the Paniolo Cable Company for their interisland fiber network”

I see I wasn’t clear. The Paniolo Cable Company was part of SIC by ownership

That bankruptcy hearing, meanwhile, comes on the heels of a real estate fire-sale consummated on May 18 in which a company controlled by disgraced businessman Albert S.N. Hee — which owns one of the three undersea cables the entire state depends on for its data services — effectively sold parts of itself to another company controlled by the same family. The companies in question are Honolulu-based Sandwich Isles Communications and Paniolo Cable.