$// MO&O, Compl. Alleging RoR Violations, File No. 93-104, FCC 94-339 //$ $/ 47 U.S.C.  208, Complaints to the Commission /$ Before the FCC 94-339 FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Section 208 Complaints Alleging ) File Nos. E-93-104, et al. Violations of the Commission's ) Rate of Return Prescription for ) the 1989-1990 Monitoring Period ) ) MEMORANDUM OPINION AND ORDER Adopted: December 23, 1994; Released: December 23, 1994 By the Commission: TABLE OF CONTENTS Topic Paragraph No. I. INTRODUCTION 1 II. BACKGROUND 2 III. DISCUSSION 3 - 45 A. Liability for Damages 3 - 19 1. Contentions of the Parties 3 - 9 2. Discussion 10 - 19 B. Damages and Interest Claims 20 - 45 1. Damages20 - 41 a. Contentions of the Parties 20 - 28 b. Discussion 29 - 41 2. Interest on Damages 42 - 45 a. Contentions of the Parties 42 - 43 b. Discussion 44 - 45 IV. PROCEDURAL MATTERS 46 - 48 V. CONCLUSION 49 VI. ORDERING CLAUSES50 - 53 APPENDIX A APPENDIX B APPENDIX C APPENDIX D I. INTRODUCTION 1. In this Memorandum Opinion and Order we find that the complainants in these consolidated Section 208 proceedings have met their burden of establishing that the defendant local exchange carriers (LECs) have violated Section 201(b) of the Communications Act of 1934, as amended, (the "Act"), by earning in excess of the rate of return for interstate access services prescribed by the Commission for the period January 1, 1989 through December 31, 1990. We also find that certain of the defendants have made persuasive claims for offsets based on the complainants' purchases of access services in categories in which the defendants realized earning shortfalls during the period in question. Therefore, we award monetary damages net of offsets, plus interest computed at the relevant Internal Revenue Service (IRS) rate compounded daily, to those complainants who have successfully shown that they incurred actual damages as a consequence of the defendants' violations. II. BACKGROUND 2. In 1993, the complainants here filed complaints alleging, inter alia, violations by defendants of the Commission's rate of return prescription for the 1989-1990 monitoring period. After the completion of discovery, the parties to the various proceedings were required to submit initial briefs and reply briefs setting forth their respective claims and arguments. The complaint proceedings thereafter were consolidated. The issues presented in these consolidated complaint proceedings are virtually identical to those presented by the complainant in MCI Telecommunication Corp. v. Pacific Northwest Bell Telephone Co. In that proceeding, the Commission held that LEC rates that produced earnings in excess of a Commission prescription were unjust and unreasonable within the meaning of Section 201(b) of the Act. The Commission also held that a complainant customer is entitled to recover damages to the extent that it can show that it suffered actual damage as a consequence of such violations. Subsequently, in the damages phase of the proceeding, the Commission held that MCI had properly shown that it had been harmed by paying the defendants' rates that produced the excessive earnings. The Commission awarded the complainant monetary damages, plus interest computed at the IRS rate. III. DISCUSSION A. Liability For Damages 1. Contentions of the Parties 3. The complainants allege that the rates they paid for certain of the defendants' interstate access services during the period from January 1, 1989 through December 31, 1990 were unjust and unreasonable in violation of Section 201(b) of the Act. To support their allegations, the complainants present evidence taken from reports filed with the Commission by the defendants for the two-year period at issue, which show that the defendants achieved earnings in excess of the Commission's prescribed rate of return in one or more of the three interstate access categories established for the purpose of enforcing that rate of return prescription. 4. The complainants request that the Commission declare that the defendants' charges for the period from January 1, 1989 through December 31, 1990 violated the rate of return prescription and Section 201(b) of the Act, and order the defendants to pay damages to the complainants equal to the difference between the amount actually paid by the complainants for interstate access service during the period and the amount that the complainants would have paid if the defendants' charges had earned no more than the maximum allowable rate of return, plus interest. 5. The defendants advance a number of arguments to support their claims that they cannot be held liable for damages based solely on the fact that their rates produced earnings in excess of the Commission's prescribed rate of return. The defendants first argue that the complainants have failed to state a cause of action under Section 208 of the Act. The defendants contend that earning in excess of a rate of return prescription is not a violation of the Act or any valid Commission rule or order; and most of the defendants argue that even if such action could be considered a violation, it could occur only if the return was exceeded by the company "overall." 6. To bolster these arguments, the defendants contend that the complaints are barred by the D.C. Circuit's decision in American Telephone & Telegraph Co. v. FCC and a later decision by the Sixth Circuit in Ohio Bell Telephone Co. v. FCC. Most of the defendants argue that recasting what amounts to a "refund" as a "damage award" does not cure the deficiencies the court found with a procedure that effectively requires the automatic refund of carrier overearnings but does not permit carriers to recoup earning shortfalls. Several of the defendants argue that, consistent with AT&T v. FCC, the Commission must consider a carrier's overall earnings in determining whether a carrier's category earnings levels are in violation of the Act. These defendants therefore maintain that to the extent that their earnings for overall interstate access services did not exceed the allowed 12.25 percent, there can be no violation of the Act regardless of the earnings realized in individual access service categories. In addition, these defendants contend that the court's decision in Ohio Bell, issued after the release of the MCI Liability Order, reaffirms the proposition established in AT&T v. FCC that the Commission cannot entertain complaints for damages based on category-level interstate access overearnings. Several defendants maintain that these propositions are not confined to the Commission's ratemaking activities under Sections 204-205 of the Act but are equally applicable when the Commission decides private complaints for damages under Section 208 of the Act. 7. Several of the defendants next contend that the Commission has no authority to order a refund retroactively apart from Sections 204 and 205 of the Act. These defendants argue that under Illinois Bell Telephone Co. v. FCC, the Commission cannot order refunds unless it has first suspended rates under Section 204 and issued an accounting order. Several defendants argue that even if their rates were not actually prescribed, they were required to charge those rates under the "filed rate doctrine". A number of defendants further contend that any Commission order requiring a carrier to make refunds solely because the carrier has exceeded the authorized rate of return would constitute unlawful retroactive ratemaking. 8. Some of the defendants argue that complainants' claims are barred in whole or in part by Section 415 of the Act, which establishes a two-year statute of limitations on the filing of complaints not based on overcharges. According to several of the defendants, Section 415 bars the recovery of any damages where the complaint was filed more than two years after the occurrence of the alleged overearning. 9. Finally, defendant SWBT argues that it did not overearn overall or in any category for the 1989-1990 monitoring period based on an amended final Form 492 it filed on March 31, 1992. According to SWBT, it discovered in September 1991 that it had failed to reverse two accrual accounts it had set up while it negotiated settlements of two billing disputes. The two accrual accounts should have been reversed in November 1990. After correcting its books, SWBT filed an amended Form 492 on March 31, 1992. Complainant MCI argues that defendant is bound by the final Form 492 defendant filed on September 30, 1991. Specifically, MCI states that our rules explicitly create a cut-off date after which amendments may not be made, that the Commission has previously held the September Forms 492 to be "final and conclusively binding," that there must be some cut-off date to facilitate enforcement, and that allowing the type of amendments present here would allow SWBT to shift revenues between periods of rate-of-return regulation and price cap regulation and would allow SWBT to manipulate the regulatory process. 2. Discussion 10. We have carefully examined the record before us and conclude that most of the defendants' arguments must be rejected under the controlling precedent of the MCI Liability Orders. The defendants have cited no facts and have made no arguments in these proceedings that would warrant rulings contrary to the MCI Liability Orders. 11. Failure to State a Cause of Action: In the MCI Liability Order, the Commission rejected identical claims made by the defendants that earnings in excess of a prescribed rate of return do not establish a cause of action under the Act. The Commission held that AT&T v. FCC, the principal case authority relied upon by the defendants, does not establish precedent barring an individual complainant from seeking relief under Section 208 of the Act for damages based on a carrier's reported overearnings. Specifically, the Commission stated that: we are not persuaded by the defendants' claims that earning in excess of a prescribed rate of return does not violate that Act or, if it does, that the Commission is required to take a carrier's underearnings as well as its overearnings into account in determining whether a violation has occurred. * * * * * * * We find that a valid prescription bound the defendants to a maximum earnings limitation, and the defendants admit that they earned in excess of that amount during the period in question. The Commission found further that AT&T v. FCC did not govern Section 208 complaint proceedings. The Commission has the authority to order a carrier to pay damages if a complainant meets the burden of establishing both a violation of the Act and actual injury. 12. In addition, we find unavailing the defendants' arguments that there are no longer any refund rules in effect upon which liability can be based. The rate of return prescription remained in effect during the 1989-1990 period. AT&T v. FCC simply remanded the enforcement provision of those rules. Furthermore, the instant complaints seek individual damages under Section 208 of the Act, not refunds under other sections of the Act, and we therefore must address the merits of complainants' damages claims. 13. AT&T v. FCC and Ohio Bell: The defendants' claim that AT&T v. FCC and Ohio Bell compel us to dismiss the complaints has no merit. As emphasized in the MCI Liability Order and reaffirmed in the MCI Damages Order, automatic refunds and refunds ordered under Section 204 of the Act are different from individual actions for damages under Section 208. Unlike the automatic refund mechanism in AT&T v. FCC or the refund procedure in Ohio Bell, both of which resulted from rulemaking proceedings initiated at the Commission's discretion, actions for damages under Section 208 are initiated by private parties seeking damages for injuries incurred as a consequence of a carrier's actions; those private parties have the burden of establishing both a violation of the Act and actual injury. The courts in AT&T v. FCC and Ohio Bell did not discuss private complaints for damages nor invalidate private actions for damages. Thus, their holdings are not applicable to the different, separately authorized complaint process set forth in Sections 206-209 of the Act. Accordingly, those decisions do not require us to depart from the Commission's holding in the MCI Liability Order that the defendants have violated the Communications Act by earning in excess of a valid rate of return prescription, thereby making their rates unjust and unreasonable under Section 201 of the Communications Act and them liable for damages to the extent a complainant customer can establish that it was damaged as a result of the violation. 14. Sections 204 and 205 of the Act. We reject the defendants' claim that the court's decision in Illinois Bell leaves the Commission only with Section 205 authority in the face of a violation of our rate of return prescription. As the Commission explained in the MCI Damages Order, Illinois Bell addresses the Commission's authority under Sections 204 and 205 of the Act, not Section 208. Thus, the defendants' claim that the Illinois Bell decision deprives the Commission of authority to award damages for violations of a valid rate of return prescription is incorrect. 15. Retroactive Ratemaking. The Commission also held in the MCI Liability Order that enforcement of a rate of return prescription is not retroactive ratemaking because the obligation being enforced was set prospectively when the prescription was adopted. Defendants have not persuaded us to alter that decision. The Commission has also rejected the contention that rates charged in conformity with a lawfully filed tariff cannot be unjust and unreasonable. As stated in the MCI Liability Order, "legally effective, carrier-initiated tariffs can always be challenged as unreasonable and unlawful." The issue raised by these complaints is not the lawfulness of high profits in the abstract, but the lawfulness of profits in excess of a prescription. Accordingly we hold that, taking into account the buffer, profits in excess of a prescription are unjust and unreasonable. 16. Rates Prescribed by the Commission. The defendants' argument that the complaints are barred because the rates in effect during the period in question were prescribed by the Commission was discussed at length and rejected in the MCI Liability Order and require no further discussion here. The defendants have raised no new issues or arguments that would persuade us to depart from our previous holdings. 17. Statute of Limitations: The purpose of Section 415 is to protect a potential defendant against stale and vexatious claims by ending the possibility of litigation after a reasonable period of time has elapsed. The statute does not begin to run, however, until discovery of the right or wrong or of the facts on which such knowledge is chargeable in law. The Commission held in the MCI Liability Order that the two year limitations period for filing complaints against LECs based on rate of return violations did not begin to run until the defendant carriers filed their rate of return monitoring reports. The Commission emphasized that the monitoring reports were specifically designed to make information about carrier earnings "publicly available" and were designated by the Commission as "final" and conclusively binding on determinations of the carriers' earnings. Defendants have made no argument that persuades us to alter this determination. Accordingly, Section 415 poses no bar to the instant complaints. 18. SWBT's Form 492. Our rules clearly state that all adjustments to LEC's Forms 492 for the period from January 1, 1989 to December 31, 1990 were to be made no later than September 30, 1991. The Commission has previously held that the final Form 492 filed on September 30 is a "conclusively binding determination of a carrier's earnings" for purposes of enforcing its rate of return prescription. Thus, we do not consider SWBT's late-filed adjustments to its Form 492 in determining its damages liability in these proceedings. 19. Even if we consider the totality of circumstances surrounding the proposed adjustments, we are not persuaded to alter this result. Prior to the Commission's determination in the MCI Liability Order, the Commission indicated that it would consider requests for waiver of the Form 492 filing deadlines on a case-by-case basis if a LEC could show "extraordinary circumstances that prevent reporting of accurate data within the required time frame." The record reflects that SWBT discovered what it describes as errors in two accrual accounts before the September 30, 1991 Form 492 filing deadline. SWBT has offered no explanation why it could not have reported accurate information on its Form 492, nor does it explain why it took fully six months after the deadline to amend its Form 492. Further, SWBT gave virtually no justification for the adjustments contained to the March 1992 Form 492 amendment. Neither this explanation nor the explanation SWBT sets forth in its briefs appears to us to present extraordinary circumstances that would warrant a waiver of the Form 492 filing deadline for the 1989-1990 reporting period. Moreover, SWBT did not seek a waiver of the Form 492 cut-off date as contemplated by the Reporting Requirements Order. SWBT also did not notify the Commission that either adjustments to its Form 492 would be forthcoming or that the Form 492 it filed contemporaneously with its discovery of the errors was inaccurate. Under these circumstances, we reject SWBT's belated attempt to adjust its reported rate of return and find that the complainants in these proceedings properly based their claims on SWBT's September 30, 1991 Form 492. B. Damages and Interest 1. Damages a. Contentions of the Parties 20. The complainants' damages claims rest primarily on the contention that the proper measure of damages incurred as a result of the defendants' rate of return prescription violations is the difference between the amounts the complainants actually paid the defendants for interstate access services during the January 1, 1989 through December 31, 1990 monitoring period and the amount they each would have paid if the defendants' rates produced earnings that did not exceed the Commission's prescription. The damages amounts claimed by individual complainants from the various defendants based on this measure are set forth in Appendix C. 21. The complainants add that the defendants' claims that complainants have failed to allege and prove violations of the Act and actual damage as a result of those violations are unfounded. The complainants maintain that they have successfully shown injury and causation arising from their payment of excessive rates for services purchased from the defendants during the relevant period. The complainants assert that their damages are the excessive charges that they paid. 22. Finally, the complainants contend that the defendants' offset claims should be rejected because the standard of damages is statutorily based and any reduction in the full amount to which complainants are legally entitled is beyond the Commission's authority. The complainants contend that offsets are in the nature of counterclaims, and as such, are not within the Commission's jurisdiction because they would involve the determination of a carrier's rights against a customer. The complainants argue that offsets would violate the "filed rate doctrine" because defendants would, in effect, be allowed to recoup undercharges through retroactive rate adjustments. The complainants also claim that allowing defendants to offset their underearnings would be unreasonably discriminatory. This is so, the complainants argue, because customers against whom offsets are allowed pay more for the services purchased from defendants than non-complaining customers. The complainants argue that such action violates the policy of nondiscrimination, one of the core values protected by the prohibition against retroactive ratemaking. MCI adds that defendants' offset arguments should be rejected because the Commission has already held that cross-subsidies in earning categories are not allowed. 23. The defendants challenge the complainants' damages claims on a number of grounds, raising several arguments that were previously considered and rejected by the Commission in the MCI Liability Order and the MCI Damages Order. The defendants contend that by simply basing their damages claims on a calculation of their prorated share of each of the defendants' category-level overearnings, the complainants ask the Commission to award them damages in the same amounts they would have received under the automatic refund rule invalidated by the court in AT&T v. FCC. The defendants maintain that such a result is expressly precluded by AT&T v. FCC as well as the court's decision in Ohio Bell. 24. The defendants next contend that, even if AT&T v. FCC and Ohio Bell do not preclude an award of damages, the complainants' damages claims still fail because the complaints do not establish a valid cause of action. According to the defendants, to pursue a damages claim, the complainants must first show that the defendants charged unjust and unreasonable rates for interstate access services during the period in question, not that the defendants' rates produced excessive returns in individual service categories. Moreover, the defendants argue, Section 206 of the Act requires that complainants prove injury, causation, and the specific amount of damages sought, in addition to establishing a violation of the Act. The defendants maintain that by simply referencing the defendants' earned rates of return for individual access service categories, the complainants have not only failed to allege any facts that would establish that the defendants' rates were unjust and unreasonable during the period in question, but have also failed to show that they sustained actual damage as a result of those rates. 25. Several defendants also contend that an award of damages to the complainants based on carrier overearnings is inappropriate for equitable and policy reasons. In addition, USWC argues that an award of damages to the complainants would reward the complainants for engaging in unlawful conduct, i.e., the provision of untariffed interstate access service in violation of Section 203 of the Act. USWC also contends that an award of damages here would punish USWC for operating more efficiently than anticipated when USWC filed its tariffs. USWC contends that it "did not spend enough money in 1989-90 to keep its reported return low enough to satisfy the FCC's prescription." 26. USWC also argues that the defendants are not entitled to damages because USWC has already made them whole by virtue of an industry-wide settlement of 1989-1990 overearnings. According to USWC, it entered into settlement agreements with practically every carrier filing an overearnings complaint for the 1989-1990 monitoring period. As a component of its settlement agreements, USWC filed a petition to permanently reduce its price cap index (PCI). USWC contends that this PCI adjustment fully satisfies all liability for overearnings complaints, including any liability for those complaints that have not been settled and remain before the Commission for resolution in this proceeding. 27. Some defendants further contend that the complainants' claims for damages are flawed because the complainants would receive windfalls if they have passed the "overcharges" on to their customers and are now awarded damages. These defendants argue that had their access charges to the complainants been lower in 1989-1990, it is almost certain that the complainants' rates to their customers would have been lower. 28. The majority of the defendants argue that even if the Commission determines that damages are lawful and appropriate, any damages award to the complainants based on overearnings must be reduced to the extent that the complainants purchased services from the defendants in other access categories that produced underearnings. The defendants argue that a damages award that did not take into account the substantial benefits realized by the complainants through their purchase of services at unreasonably low rates, would give complainants a windfall profit that would be inconsistent with sound principles of equity. EATEL further contends that its maximum liability to all carriers should be limited to the amount of its total overearnings in the two service categories for which it exceeded our prescribed rate of return. According to EATEL, the Commission has already granted AT&T a damages award in a separate proceeding and should MCI's damages award be calculated as MCI suggests, EATEL will be required to pay 100.05 percent of its total liability for category overearnings to only 81.99 percent of its customers (the percentage of service purchased by AT&T and MCI). b. Discussion 29. Judicial Precedent: The defendants' claims that the holdings in AT&T v. FCC, Ohio Bell, and Illinois Bell control these proceedings and bar awards of damages based on earnings in excess of prescribed rate of return were previously raised by several of these same defendants and discussed at length in the MCI Liability Order and the MCI Damages Order (jointly "MCI Orders"). We find these arguments to be without merit for the reasons stated in the MCI Orders. The court in Vitelco ruled only on the issue of whether the Commission could, in the context of a Section 204 investigation, find rates unjust and unreasonable when they had been in effect for only six months of the designated 24 month review or monitoring period. Not only does the instant proceeding not involve our authority under Section 204 of the Act, but also, unlike the monitoring period in Vitelco, the rate of return monitoring period at issue here is the full two-year monitoring period established in our rate of return regulations. 30. Section 201(b) of the Act: The defendants' contentions that the complainants' damages claims must be dismissed because the complainants have failed to prove that the defendants' rates were unjust and unreasonable within the meaning of Section 201(b) of the Act are without merit. In addressing liability above, we held that the complainants met their burden of establishing that the defendants violated our rate of return prescription thereby making their rates unlawful under Section 201(b) of the Act. 31. Also without merit is the defendants' claim that even if the complainants have shown that the defendants' rates were unjust and unreasonable, their damages claims must still fail because judicial precedent requires the complainants to establish what a just and reasonable rate would have been as a prerequisite to recovering damages. This argument was previously considered and rejected in the MCI Damages Order. The complainants have shown that they purchased services from the defendants at rates that produced earnings over and above the defendants' prescribed levels. The defendants, faced with the prospect of damages for violations of a binding rate of return prescription, cannot disavow the substantial flexibility afforded carriers to achieve their authorized rate of return. In effect, the defendants would have us require the complainants to do what the defendants were neither required nor apparently able to do, that is, establish the precise rates required to bring the defendants' earnings within authorized levels for each of their interstate access service categories. This is an unreasonable requirement to impose upon complainants. Although the Commission's rate of return prescription afforded the defendants considerable leeway in setting their rates, it also bound the defendants to a maximum earnings limitation. The Commission previously determined in the MCI Liability Order that a violation of such a prescription constitutes a violation of the Act for which damages may lie. It is therefore appropriate and consistent with the Commission's rate of return regulatory scheme to look at earnings in excess of the Commission's prescribed rates of return as a starting point for assessing the complainants' damages claims. 32. Damages and Offsets: The defendants' arguments are devoted primarily to attempting to persuade the Commission that the complainants' damages claims are really claims for restitution or refunds governed by equitable or public policy considerations. These considerations, according to the defendants, militate against any award of damages to the complainants based on excessive earnings. The defendants argue, in effect, that the damages the complainants seek are equivalent to refunds that would have been required under the refund mechanism invalidated by the court in AT&T v. FCC. We do not agree. We are concerned here with determining whether a particular customer, one that has availed itself of a statutory complaint remedy under Title II of the Act, has sustained any measurable damage that can be traced to the defendants' violations of the Act. Although a damages award under Section 208 of the Act might well be equal or substantially similar to a refund ordered under Section 204 of the Act, this does not transform a private complaint action into a public enforcement proceeding subject to broad public interest considerations. 33. Consistent with our decisions in the MCI Damages Order and AT&T Damages Order, we find the defendants' arguments with respect to "passing-on" to be equally unavailing. In rejecting this same argument, the Commission said, "[w]hether [complainant] passed on the overcharges or absorbed them does not alter the fact that the defendants overcharged [complainant] in violation of a binding rate of return prescription and must answer for such violations." The issue is not what the complainants have done in response to paying excessive rates, but whether the complainants have been damaged as a result of these excessive rates. 34. We also reject the defendants' other equitable arguments regarding impermissible windfall profits to the complainants if damages are awarded. The defendants' arguments in this regard, along with the numerous Commission and judicial precedents relied upon by the parties, were addressed in detail in the MCI Damages Order and require no further discussion here. In addition, the Commission has previously rejected USWC's equitable arguments regarding the defendants' provision of untariffed service and USWC's operation efficiencies and they require no further discussion here. Regarding USWC's petition for a permanent reduction in its price cap index, we note that the petition was recently granted by the Common Carrier Bureau (the "Bureau") with conditions. The Bureau held that granting USWC's petition would not constitute an "industry-wide" settlement of USWC's rate of return violations for the 1989-1990 monitoring period and therefore would have no effect on non- settling and future complainants. We also reject the contention that a voluntary PCI reduction made as part of settlement agreements with parties who are not participating in these proceedings should be allowed either to extinguish or to limit the rights of the complainants here. 35. We do find, however, that certain of the defendants have made persuasive claims for offsets based on the complainants' purchases of access services in categories in which the defendants realized earning shortfalls during the period in question. At the outset, we note that the Commission has previously rejected the defendants' claims that the Commission is required to take into account a carrier's interstate access underearnings as well as its overearnings in determining whether a violation of the Act has occurred sufficient to sustain a complaint of damages under Section 208 of the Act. We note, however, that the Commission has similarly rejected arguments that it lacks discretion under Section 208 to consider a complainant's overall purchase of interstate access services from a defendant in assessing the damage or injury to that complainant. The courts have made clear that carriers assume the risk of both losses for services they underprice and the prospect of returning amounts realized through rates that are unjustly or unreasonably high. We also maintain our view that a carrier may properly be required to make whole those who have been injured by unlawful rates and practices without regard to whether the carrier has achieved its authorized rate of return overall. Nevertheless, we believe it appropriate for purposes of assessing the complainants' damages claims to examine fully the complainants' purchase of interstate access services from the respective defendants during the monitoring period covered by the complaints. 36. Significantly, the complainants do not dispute that, in their purchases of interstate access services from the defendants, they benefitted substantially from defendants' rates that produced underearnings in one or more access service categories. Thus, while we view it as a reasonable starting point to look at the difference between the amounts the complainants paid for the defendants' access services on a category basis and the amounts they would have paid if the defendants had earned at the prescribed level for the relevant category, we find it also reasonable to offset payments by the complainants that contributed to the defendants' excessive earnings to the extent that it can be shown that the complainants benefitted from the defendants' underearnings in other service categories during the relevant period. 37. In the MCI Damages Order, the Commission rejected claims that allowing offsets would somehow repeal our rate of return prescription on a category basis. We emphasized that the issue presented by these complaints and contested by the defendants is the extent to which the complainants have been damaged as a consequence of the defendants' violations of a binding rate of return prescription and that the focus of the complaints is not the defendants' individual interstate access rates per se, but the excessive earnings produced by those rates and their effect on the complainants. The complainants have provided no new information or arguments that would persuade us to depart from our holdings. 38. Moreover, as the Commission emphasized in the MCI Damages Order, the Commission views offsets in the complaint context as appropriate only in relation to a particular complainant's purchase of access service from a defendant carrier. A defendant would not, for example, be able to rely on undercharges to a separate customer or underearnings in general to offset a damages claim based on the measures adopted here. In particular, a complainant that took service in only one access service category that overearned would not have received the benefit of a defendant's underearnings in access categories from which service was not taken. 39. We therefore reject EATEL's contention that its maximum liability to all interstate access customers must be limited to the amount of its total overearnings in the two service categories for which it earned amounts over our prescribed rate of return. According to EATEL, taking into account the amount already awarded to AT&T in a prior proceeding, this amount would be exceeded if we grant MCI the damages amount it requests. We note that the complaint brought by AT&T against EATEL alleged a violation of our overall rate of return prescription that included earnings in all three service categories, common line, special access, and switched traffic sensitive. EATEL overearned in the special access and switched traffic sensitive categories but earned within the Commission's prescription for carrier common line service. The rate of return for EATEL's overall interstate earnings was 15.70 percent for the 1989-1990 monitoring period. Thus, EATEL exceeded the Commission's prescribed rate of return plus buffer of 12.25 percent for overall interstate service. EATEL did not offer an alternative damages calculation or directly challenge AT&T's computation methodology or calculations. 40. The issue before us in this proceeding is the amount of damages MCI incurred as a result of purchases of switched traffic sensitive services and special access services, not from overall interstate purchases. As noted above, EATEL earned 17.60 percent in the special access category and 21.37 percent in the switched traffic sensitive category. At the category level, EATEL's overearnings are the earnings in excess of 12.40 percent in each category. EATEL does not directly challenge MCI's computation methodology or calculations. As the Commission previously has held, both our prescription for overall interstate access and our prescription for access service categories are valid and enforceable prescriptions. The Commission's award to AT&T is irrelevant to the amount of damages MCI has incurred. We therefore conclude that the damages award granted to AT&T based on overall interstate access overearnings does not bar MCI from recovering damages based on its purchases of switched traffic sensitive services and for special access services from EATEL. 41. Based upon our decision regarding the computation of damages, we award damages to the complainants as specified in Appendix C to this Memorandum Opinion and Order. In reaching the amounts specified in Appendix C, we have reviewed the damages calculations provided by both the complainants and the defendants and made adjustments to these calculations as explained in Appendix C. In addition, we accept the defendants' claims for offsets to the extent that the record shows that the complainants purchased access services from the defendants during the period in question at rates that produced earnings below the Commission's prescribed levels. We address the complainants' claims for interest on the damages amounts in the section below. 2. Interest on Damages a. Contentions of the Parties 42. Most of the defendants claim that the complainants are not entitled to prejudgment interest should the Commission award damages to them. These defendants contend that while the Commission may award interest under Section 204 of the Act, there is no provision for the award of interest under Section 206 of the Act. Because the Commission cannot lawfully grant the complainant refunds, according to these defendants, the Commission may not award interest. Several defendants contend that an award of prejudgment interest is an equitable remedy and that under considerations of fairness no interest should be awarded here. EATEL contends that even if complainants are awarded interest it should not be compounded daily. According to EATEL, daily compounding interest would enable complainants to receive far more interest than is currently available from a bank or other depository. Therefore, EATEL argues that this unusually high interest award would have the impact of penalizing EATEL for exercising its full litigation rights. 43. In responsive pleadings, the complainants generally claim that the defendants' arguments against an assessment of prejudgment interest in connection with any ultimate award of damages have already been considered and rejected by the Commission. MCI contends that an award of prejudgment interest is appropriate in this proceeding because interest is typically awarded in overcharge cases under the Act in order to make the injured party whole, and has been awarded in similar complaint proceedings before the Commission. WilTel adds that an interest award would not violate principles of fairness because defendants had ample opportunity to properly set and adjust their rates and that the defendants' contentions that complainants passed through the excessive charges to their customers does not shift the equities in the defendants' favor. b. Discussion 44. The defendants' claims that the Commission lacks authority to award interest in a Section 208 common carrier complaint proceeding are incorrect. Although Section 208 of the Act does not explicitly authorize an award of interest, our authority under Section 4(i) to award interest in a common carrier complaint case is well established. In deciding whether to award interest in a particular common carrier complaint case we are generally guided by federal court practice, where the award of prejudgment interest "is a matter left to the sound discretion of the trial court." The award of interest in a common carrier complaint case is thus guided by considerations of fairness. Applying this standard, we are persuaded that an award of interest is appropriate in these cases. The complainants were effectively deprived of the use of the excessive amounts they paid the defendants as a result of the defendants' unlawful rates. The defendants, on the other hand, enjoyed the beneficial use, for a substantial period of time, of funds to which the complainants rightfully have claims. We are persuaded that interest is required not only to effect a full and fair remedy for the complainants, who paid rates higher than they would have paid had the defendants earned within the prescribed levels, but also to avoid any unjust enrichment of the defendants stemming from their charging rates that we have determined to be unjust and unreasonable under Section 201(b) of the Act. 45. Regarding the rate and methodology to be used in calculating interest, in previous rate of return proceedings the Commission adopted a policy of awarding daily compounded interest computed at the IRS rate for tax overpayments. We are persuaded that daily compounded interest more fairly compensates aggrieved parties for the value of money owed. The defendants have provided no new arguments that would compel us to alter our previous determination, and we therefore reject their claims. We find that interest on the damages awarded here from each of the defendants should be computed at the IRS rate for tax refunds, compounded daily, from January 1, 1991, the day after the relevant 1989-1990 rate of return monitoring period ended, until the date full payment is made to each of the complainants. IV. PROCEDURAL MATTERS 46. Cable & Wireless filed a motion to supplement the record regarding damage calculations in File Nos. E-93-104--112 and in response GTE filed a motion to supplement the record in the same proceedings. In the interest of assuring a full record in this matter, we grant the parties' motions to supplement the record. Ameritech filed motions to withdraw their motions to compel in File Nos. E-93-122 and E-93-133. The motions were unopposed and we will grant Ameritech's motions. Sprint filed a motion for leave to file its reply brief out of time in File Nos. E-93-113--116. The motion was unopposed and we will grant Sprint's motion. 47. EATEL requests a hearing before an administrative law judge to resolve the issues raised in the complaint against it. EATEL states that under the Fifth Amendment it cannot be deprived of property without due process. EATEL has provided no persuasive authority to support its claim that it is entitled automatically to a hearing before an administrative law judge to resolve questions concerning damages. Section 208 of the Act does not mandate any particular form of procedure in complaint cases. When Section 208 is construed in conjunction with the Act's general procedural authorization in Section 154(j), it is abundantly clear that the decision of when trial-type hearings are necessary under Section 208 is one which lies within the discretion of the Commission, or by the Bureau acting pursuant to delegated authority. With respect to constitutional due process, the Fifth Amendment does not require a trial-type hearing where the disagreement is not factual but rather is over the legal conclusion to be drawn from the facts. Here there are no material disputed questions of fact at this stage of these proceedings; the issues are legal, not factual, in nature and thus no administrative hearing is required. 48. USWC alleges that it has been denied significant procedural rights in these proceedings. Specifically, USWC contends that the Bureau improperly denied its motions to compel answers to certain interrogatories. USWC repeats the interrogatories and offers a statement regarding the relevance of the interrogatories. USWC offers no new rationale that would compel the Commission to reverse the Bureau's finding that in every instance the requested interrogatories are not relevant to our determination of the issues raised in these proceedings nor are they reasonably calculated to lead to the discovery of admissible evidence. USWC also contends that it has been denied due process because the Bureau has acted as prosecutor, decision maker and advisor to the Commission. As the Commission has noted in prior proceedings, we disagree with USWC's characterization of the Bureau's activities regarding these complaint proceedings. At all times covered by USWC's allegations, the Bureau has been acting as the "decision maker" and not as a prosecutor. V. CONCLUSION 49. We have carefully reviewed the extensive record before us and have found, to the extent indicated here, that the complainants are entitled to awards of damages, plus accumulated interest, compounded daily, on such damages, for the defendants' violations of the Commission's rate of return prescription for the 1989-1990 monitoring period. VI. ORDERING CLAUSES 50. Accordingly, IT IS ORDERED, pursuant to Sections 4(i), 4(j), 201, 206, 207, 208, and 209 of the Communications Act, as amended, 47 U.S.C.  154(i), 154(j), 201, 206, 207, 208, and 209, that the complaints identified in Appendix A to this Memorandum Opinion and Order ARE GRANTED to the extent indicated above and otherwise ARE DENIED. 51. IT IS FURTHER ORDERED that the defendants identified in Appendix C to this Memorandum Opinion and Order SHALL PAY to the complainants identified in Appendix C the amount specified therein within 60 days after the release date of this Memorandum Opinion and Order. 52. IT IS FURTHER ORDERED that the defendants identified in Appendix C SHALL PAY to the complainants identified in Appendix C interest, compounded daily, on the damages specified there computed at the IRS rates set forth in Appendix D from January 1, 1991 until the date full payment is made. 53. IT IS FURTHER ORDERED that the procedural motions described in paragraph 44 above ARE GRANTED to the extend indicated there and otherwise ARE DENIED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary APPENDIX A AMERICAN NETWORK EXCHANGE, INC., (AMNEX) et al., filed a complaint against: PACIFIC BELL (Pacific)File No. E-93-117 CABLE & WIRELESS, INC., (Cable & Wireless) et al., filed complaints against: GTE CALIFORNIA1 File No. E-93-104 GTE FLORIDA1 File No. E-93-105 GTE NORTH - INDIANA1 File No. E-93-106 GTE NORTH - MICHIGAN1 File No. E-93-107 GTE NORTH - MISSOURI1 File No. E-93-108 GTE NORTH - WISCONSIN1File No. E-93-109 GTE NORTHWEST1 File No. E-93-110 CONTEL WEST RATE GROUP1 File No. E-93-111 CONTEL EAST/SOUTH RATE GROUP1 File No. E-93-112 NEW YORK TELEPHONE COMPANY (NYT) File No. E-93-119 BELLSOUTH TELECOMMUNICATIONS, INC. (BellSouth) File No. E-93-121 AMERITECH TELEPHONE OPERATING COMPANIES (Ameritech) File No. E-93-122 U S WEST COMMUNICATIONS, INC. (USWC)2 File No. E-93-123 KLP, INC., d/b/a CALL-AMERICA (Call-America) filed a complaint against: U S WEST COMMUNICATIONS, INC. (USWC)2 File No. E-93-151 LDDS COMMUNICATIONS, INC., d/b/a LDDSMETROMEDIA COMMUNICATIONS (LDDS) filed complaints against: UNITED TELEPHONE COMPANY OF FLORIDA3 File No. E-93-113 UNITED TELEPHONE SYSTEM - MIDWEST3 File No. E-93-114 CENTEL - TEXAS3 File No. E-93-115 CENTEL - VIRGINIA3 File No. E-93-116 CINCINNATI BELL TELEPHONE COMPANY (CBT) File No. E-93-120 MCI TELECOMMUNICATIONS CORPORATION (MCI) et al., filed complaints against: NEW YORK TELEPHONE COMPANY (NYT) File No. E-93-125 BELLSOUTH TELECOMMUNICATIONS, INC. (BellSouth) File No. E-93-127 AMERITECH OPERATING COMPANIES (Ameritech) File No. E-93-133 EAST ASCENSION TELEPHONE COMPANY (EATEL) File No. E-93-134 CINCINNATI BELL TELEPHONE COMPANY (CBT) File No. E-93-135 SOUTHWESTERN BELL TELEPHONE COMPANY (SWBT) File No. E-93-138 WILTEL, INC., (WilTel) filed a complaint against: PACIFIC BELL (Pacific)File No. E-93-129 FOOTNOTES 1 These companies are collectively referred to as the GTE Companies. 2 Northwestern Bell Telephone Company, Mountain States Telephone and Telegraph Company, and Pacific Northwest Bell Telephone Company have consolidated. See The Mountain States Tele. and Tele. Co., Northwestern Bell Tele. Co., and Pacific Northwest Bell Tele. Co., 5 FCC Rcd 1982 (1990). U S West Communications, Inc. is the remaining company. 3 These companies are collectively referred to as the Sprint Companies. APPENDIX B 1989-1990 Rates of Return Switched Inter- Common Special Traffic Company state Line Access Sensitive Ameritech Oper. Cos. 12.21 12.35 14.37 11.25 BellSouth Tel. Co. 12.14 11.96 10.86 12.99 Cincinnati Bell Tel. Co. 11.52 11.53 8.53 13.19 Centel - Texas 13.16 10.88 8.05 19.86 Centel - Virginia 11.95 11.11 23.49 11.58 Contel East/South 11.10 11.69 16.22 9.14 Contel West 12.53 11.69 19.69 13.49 East Ascension Tel. Co. 15.70 12.19 17.60 21.37 GTE California 11.76 10.94 9.48 13.70 GTE Florida 11.66 10.93 10.03 13.66 GTE North - Indiana 12.19 10.93 13.96 12.95 GTE North - Michigan 12.52 10.97 25.91 13.39 GTE North - Missouri 12.04 10.94 12.51 13.62 GTE North - Wisconsin 12.76 10.95 13.49 15.14 GTE Northwest 12.41 10.94 11.07 14.37 Pacific Bell 12.70 11.61 12.83 14.39 New York Tel. Co. 11.59 10.04 9.00 13.35 Southwestern Bell Tel. Co. 11.73 12.04 12.44 10.96 United Tel. Co. of Florida 11.97 11.47 8.12 13.58 United Tel. System - Midwest 12.42 12.07 5.67 14.08 U S WEST Commun. 12.75 12.04 13.25 13.40 APPENDIX C AMERITECH [amounts in dollars] Complainant DAMAGES OFFSETS DAMAGES AWARD Cable & Wireless[1] 65,035[2] (173,041)[3] -0- E-93-122 MCI 3,769,150[4] (4,668,150)[5] -0- E-93-133 NOTES FOR AMERITECH 1. Teledial America, Inc., LDDS Communications, Inc., and Schneider Communications, Inc., which were originally complainants in File No. E- 93-122, settled their claims against defendant and were dismissed from this proceeding pursuant to joint motions of the parties. Cable & Wireless, Inc. v. Ameritech, 9 FCC Rcd 1268 (Com. Car. Bur. 1994). Cable & Wireless, Inc. v. Ameritech, 9 FCC Rcd 1392 (Com. Car. Bur. 1994); Cable & Wireless, Inc. v. Ameritech, 9 FCC Rcd 3202 (Com. Car. Bur. 1994). Complainant Cable & Wireless is the sole remaining complainant in File No. E-93-122. 2. Both complainant Cable & Wireless's and defendant's damages calculations result in damages amounts that vary only slightly. Defendant calculates damages as $65,046 without interest while complainant Cable & Wireless calculates damages as $65,035 without interest. Because complainant Cable & Wireless has the burden of proof, we accept its lower damages calculation. 3. Defendant appears to calculate offsets for the traffic sensitive category using the category target rate of return plus buffer of 12.40 percent. We note that the target rate of return of 12.00 percent is correctly used to calculate offsets because a defendant cannot be said to have underearned to the extent its earnings exceed the target rate of return. See, e.g., Allnet Communication Services, Inc. v. U S West, Inc., 8 FCC Rcd 3017, 3023 n.63 (1993). Complainant calculates offsets using 12.00 percent. Therefore, we accept complainant Cable & Wireless's offset calculation. 4. Complainant MCI and defendant both provide damages calculations. In its damages calculations, complainant MCI purports to use a "carrier market share" figure provided by defendant. MCI Br. at Schedule 1, n.9. However, the figure used by complainant MCI is not the same as that provided by defendant. Complainant MCI's and defendant's calculations appear to be the same in other respects, including purchase amounts and tax adjustment factors. There would be no dispute between the parties regarding the amount of damages to be awarded had the figure provided by the defendant been used by MCI as MCI represented it had. Therefore, we accept defendant's damages calculation. 5. A heading in defendant's offset calculations indicates that defendant erroneously based its switched traffic sensitive category underearnings calculations on the category target rate of return plus buffer of 12.40 percent. As the actual figures suggest and as suggested in complainant's explanation of its calculations, however, defendant correctly used the target rate of return of 12.00 percent to calculate offsets. Complainant MCI provides no offset calculations and does not object to those provided by defendant. Therefore, we accept defendant's offset calculations. BELLSOUTH [amounts in dollars] Complainant DAMAGES OFFSETS DAMAGES AWARD LDDS 1,216,257[1] (943,361)[2] 272,896 E-93-121 Cable & Wireless 93,739[1] (58,338)[2] 35,401 E-93-121 MCI 4,771,448[3] 4,202,349[4] 569,099 E-93-127 NOTES FOR BELLSOUTH 1. With regard to switched traffic sensitive category overearnings, complainants LDDS and Cable & Wireless stipulate to defendant's methodology, purchase amount, and damages amount contained in defendant's responses to these complainants' interrogatories except for defendant's attempts to adjust its calculations to reflect its aggregate over- and under- earnings. Complainants LDDS and Cable & Wireless state that the stipulated calculations appear consistent with the way damages are calculated in rate of return complaint proceedings. LDDS Br. at 6-7, File No. E-93-121. Defendant includes the same damages calculation, without the "aggregate" adjustment, in its brief. Therefore, we accept the damages calculations to which complainants LDDS and Cable & Wireless stipulate. 2. Complainants LDDS and Cable & Wireless provide no offset calculations, but object to defendant's offset calculations contained in defendant's initial brief because of the "aggregate" adjustment described in note 1 above. LDDS RBr. at 3. We note that defendant did not include the "aggregate" adjustment in its briefs and computed offsets using the methodology to which complainants LDDS and Cable & Wireless stipulated. Therefore, we accept defendant's offset calculations contained in its initial brief. 3. Both complainant MCI and defendant derived damages amounts of $4,771,448. 4. Complainant MCI does not provide offset calculations and does not object to defendant's calculations. Therefore, we accept defendant's offset amount of $4,202,349. CINCINNATI BELL [amounts in dollars] Complainant DAMAGES OFFSETS DAMAGES AWARD LDDS 3,588[1] (2,504)[1,4] 1,084 E-93-120 MCI E-93-135 174,418[2] (480,493)[3,4] -0- NOTES FOR CINCINNATI BELL 1. Although the parties disputed the amount of complainant LDDS's purchases in their initial briefs, complainant LDDS states in its reply brief that the amounts it proffered in its initial brief "may not accurately reflect its access purchases from the Defendant during the relevant monitoring period," and states that the damages calculation methodology used by defendant appears consistent with the way damages are calculated in rate of return complaint proceedings. Complainant LDDS then stipulates to defendant's damages calculation for the switched traffic sensitive category contained in defendant's initial brief. LDDS RBr. at 4, File No. E-93-120. Therefore, we accept defendant's calculation of damages for the switched traffic sensitive category. We also accept the purchase amounts proffered by defendant for the common line and special access categories based on complainant LDDS's statement that the purchase amounts it proffers may be inaccurate. 2. Both complainant MCI and defendant derive damages amounts of $174,418. 3. Complainant MCI provides no offset calculations. 4. Defendant calculates offsets for the common line and special access categories using the category target rate of return plus buffer of 12.40 percent. We note that the target rate of return of 12.00 percent is used to calculate offsets correctly because a defendant cannot be said to have underearned to the extent its earnings exceed the target rate of return. See, e.g., Allnet v. U S West, 8 FCC Rcd at 3023 n.63. We have recalculated offsets using 12.00 percent. EAST ASCENSION TELEPHONE COMPANY, INC. [amounts in dollars] Complainant DAMAGES[1] OFFSETS[2] DAMAGES AWARD MCI 35,532 -0- 35,532 E-93-134 NOTES FOR EAST ASCENSION TELEPHONE COMPANY, INC. 1. A heading in complainant's damages calculations indicates that complainant erroneously based its category overearnings calculations on the overall target rate of return plus buffer of 12.25 percent. However, as the actual figures suggest and as clarified in complainant's explanation of its calculations, complainant correctly used the category target rate of return plus buffer of 12.40 percent. 2. Defendant overearned in the special access and switched traffic sensitive categories, and earned within the authorized range of 12.00 percent to 12.40 percent in the common line category. Therefore, there are no offsets in this proceeding. See MidAmerican Long Distance Co. v. Pacific Bell, 8 FCC Rcd 1201, 1210 n.93 (1993). GTE TELEPHONE OPERATING COS. [amounts in dollars] GTE California Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD Cable & Wireless 62,026 (73,708) -0- E-93-104 LDDS 104,978 (236,748) -0- E-93-104 GTE Northwest Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD LDDS 106,573 (72,944) 33,629 E-93-110 GTE North - Indiana Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD Teledial America 1,116 (2,370) [2] -0- E-93-106 GTE North - Michigan Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD Teledial America 43,571 17,291 26,280 E-93-107 GTE North - Missouri Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD LDDS 10,465 (14,468) -0- E-93-108 GTE North - Wisconsin Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD LDDS 6,785 (3,293) 3,492 E-93-109 Schneider Commun. 35,232 (13,600) 21,632 E-93-109 GTE Florida Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD LDDS 450,246 (934,293) -0- E-93-105 Contel East South Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD LDDS 9,123 [3] (131,269) -0- E-93-112 Contel West Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD Teleconcepts, Inc. 391 [3] (175) [3] 216 E-93-111 NOTES FOR GTE OPERATING COS. 1. Complainants erroneously use the overall target rate of return plus buffer of 12.25 percent to calculate damages and offsets on a per category basis for defendants GTE Northwest, GTE North - Wisconsin, GTE North - Michigan, and Contel West. Complainants also erroneously use the overall target rate of return plus buffer of 12.25 percent to calculate offsets for defendant GTE Northwest. We note that the target rate of return plus buffer for category overearnings is 12.40 percent. The overall target rate of return plus buffer of 12.25 percent is inapplicable to overearnings calculated on a per category basis. Further, we note that the target rate of return of 12.00 percent is used to calculate offsets correctly because a defendant cannot be said to have underearned to the extent its earnings exceed the target rate of return. See, e.g., Allnet v. U S West, 8 FCC Rcd at 3023 n.63. Complainants also used erroneous composite tax gross-up factors in calculating damages and offsets for all defendants. Therefore, except as noted, we accept defendants' overearnings and offset calculations. 2. Both parties calculate an offset amount based on a negative purchase amount in the special access category, but do not explain the entry. We do not understand how a purchaser could purchase a negative amount of service. Therefore, we disregard these calculations. We note that the total damages award is zero regardless of whether this particular offset amount is included. 3. The parties dispute the amount of complainant Teleconcepts' purchases in the switched traffic sensitive and common line categories and complainant LDDS's purchases in the special access category. Complainants provide affidavits stating that the purchase amounts they provide reflect data contained in their payment records, but they do not provide copies of those records. Defendants dispute the accuracy of the amounts and argue that the affidavits provide inadequate support. Although, as complainants note, the Commission has accepted purchase amounts supported solely by affidavits from complainants who stated that their records indicated a different purchase amount than amounts averred by defendants, the Commission did so in circumstances different from those present here. In several proceedings relating to the 1987-1988 monitoring period, the parties disputed in their briefs the amounts of service purchased by various complainants. Subsequent to the filing of reply briefs, the complainants supplemented the record by filing affidavits attesting to the accuracy of the purchase amounts they provided. See, e.g., American Network Exchange, Inc. v. Pacific Bell, File No. E-91-144. Generally, these affidavits were not contested. See Id.; compare American Network Exchange, Inc. v. Indiana Bell Telephone Company, File No. E-91-136; Section 208 Complaints Alleging Violations of the Commission's Rate of Return Prescription for the 1987-1988 Monitoring Period, 8 FCC Rcd 1876, 1900 (1993). In this proceeding, however, defendants have contested both the purchase amounts and the reliability of the affidavits filed by complainants along with their initial briefs. Complainants have not responded to defendants' objections and have submitted no additional evidence in the form of billing records or other information to support their contentions or to rebut defendants' allegations. Therefore, we find that complainants have not met their burden of proof regarding their purchase amounts and we will not credit the disputed purchase amounts they proffer. Complainants have the burden of proof to make their case and a duty to keep all information and supporting documentation complete and current. Section 208 Complaints Alleging Violations of the Commission's Rate of Return Prescription for the 1987-1988 Monitoring Period, 8 FCC Rcd 5485, 5494 (1993) (Reconsideration Order); see also 47 C.F.R.  1.720(g). We note that complainants supplemented the record with information aimed at clarifying other disputes regarding damages in this proceeding, but made no attempt to supplement their claims regarding purchase amounts. In the absence of such information, we calculate damages based on the purchase amounts admitted by defendants. We note that it is immaterial whether complainant LDDS purchased the amount of special access service it alleges because, even using its proffered purchase amounts, its damages are less than offsets and its damages award is zero. PACIFIC BELL [amounts in dollars] Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD Amnex 6,163[1,2] (985)[1,2] 5,178 E-93-117 Cable & Wireless 408,264[1,2] (69,824)[1,2] 338,440 E-93-117 LDDS 733,770[1] (144,553)[1] 589,217 E-93-117 WilTel 87,501[3] -0-[4] 87,501 E-93-129 NOTES FOR PACIFIC BELL 1. Defendant and complainants Amnex, Cable & Wireless, and LDDS use identical methodologies to calculate damages and offsets. Complainants, however, erroneously use the overall target rate of return plus buffer of 12.25 percent to calculate damages and offsets on a per category basis. We note that the target plus buffer rate for category overearnings is 12.40 percent. The overall target plus buffer rate of 12.25 percent is inapplicable to overearnings calculated on a per category basis. We note that the target rate of return of 12.00 percent is used to calculate offsets correctly because a defendant cannot be said to have underearned to the extent its earnings exceed the target rate of return. See, e.g., Allnet v. U S West, 8 FCC Rcd at 3023 n.63. Defendant uses the correct percentages. Therefore, we accept defendant's calculations. 2. The parties dispute the amount of complainant Amnex's purchases in the switched traffic sensitive and special access categories and complainant Cable & Wireless' purchases in the switched traffic sensitive category. Complainants provide affidavits stating that the purchase amounts they claim reflect data contained in their payment records, but they do not provide copies of those records. Defendant disputes the accuracy of the amounts and argues that the affidavits provide inadequate support. Defendant also provides detailed billing information broken down by Access Customer Name Abbreviation (ACNA) code for complainants' subsidiaries. Although, as complainants note, the Commission has accepted purchase amounts supported solely by affidavits from complainants who stated that their records indicated a different purchase amount from that averred by defendants, it did so in circumstances different from those present here. In several proceedings relating to the 1987-1988 monitoring period, the parties disputed in their briefs the amounts of service purchased by various complainants. Subsequent to the filing of reply briefs, the complainants supplemented the record by filing affidavits attesting to the accuracy of the purchase amounts they provided. See, e.g., American Network Exchange, Inc. v. Pacific Bell, File No. E-91-144. Generally, these affidavits were not contested. See id.; compare American Network Exchange, Inc. v. Indiana Bell Telephone Co., File No. E-91-136; Section 208 Complaints, 8 FCC Rcd at 1900. In this proceeding, however, complainants filed affidavits along with their initial briefs and defendant has contested both the purchase amounts claimed and the reliability of the affidavits. Complainants have not responded to defendant's objections and have submitted no additional evidence in the form of billing records or other information to support their contentions or to rebut defendant's allegations. Therefore, we find that complainants have not met their burden of proof regarding their purchase amounts and we do not credit the disputed purchase amounts they proffer. Complainants have the burden of proof to make their case and a duty to keep all information and supporting documentation complete and current. Reconsideration Order, 8 FCC Rcd at 5494; see also 47 C.F.R.  1.720(g). We note that complainants supplemented the record with information aimed at clarifying other disputes regarding damages in parallel proceedings (see File Nos. E-93-104-112), but made no attempt in this proceeding to supplement their claims regarding purchase amounts. In the absence of such information, we calculate damages based on the purchase amounts admitted by defendant. 3. Defendant provided no damages calculation and does not object to the calculation provided by complainant WilTel. Therefore, we accept complainant WilTel's damages calculation. 4. Neither complainant Wiltel nor defendant has provided a calculation of offsets, nor does defendant claim offsets. Therefore, we find no offsets for this defendant against Wiltel. NEW YORK TELEPHONE COMPANY [amounts in dollars] Complainant DAMAGES[3] OFFSETS[2] DAMAGES AWARD LDDS 144,266[1,4] 188,274 -0- E-93-119 Cable & Wireless 408,870[1,4] 394,677 14,193 E-93-119 MCI 6,266,142[5] 6,772,684 -0- E-93-125 NOTES FOR NEW YORK TELEPHONE COMPANY 1. The parties dispute the amount of complainant LDDS's and complainant Cable & Wireless' purchases in the switched traffic sensitive access categories. Complainants provide affidavits stating that the purchase amounts they claim reflect data contained in their payment records, but they do not provide copies of those records. Defendant disputes the accuracy of the amounts and argues that the affidavits provide inadequate support. Defendant also states that complainants refused to provide purchase information in response to defendant's interrogatories. Although, as complainants note, the Commission has accepted purchase amounts supported solely by affidavits from complainants who stated that their records indicated a different purchase amount from those averred by defendants, it did so in circumstances different from those present here. In several proceedings relating to the 1987-1988 monitoring period, the parties disputed in their briefs the amounts of service purchased by various complainants. Subsequent to the filing of reply briefs, the complainants supplemented the record by filing affidavits attesting to the accuracy of the purchase amounts they provided. See, e.g., American Network Exchange, Inc. v. Pacific Bell, File No. E-91-144. Generally, these affidavits were not contested. See id.; compare American Network Exchange, Inc. v. Indiana Bell Telephone Company, File No. E-91-136; Section 208 Complaints, 8 FCC Rcd at 1900. In this proceeding, however, complainants filed affidavits along with their initial briefs and defendant has contested both the purchase amounts and the reliability of the affidavits. Complainants have not responded to defendant's objections and have submitted no additional evidence in the form of billing records or other information to support their contentions or to rebut defendant's allegations. Therefore, we find that complainants have not met their burden of proof regarding their purchase amounts and we will not credit the disputed purchase amounts they proffer. Complainants have the burden of proving their case and a duty to keep all information and supporting documentation complete and current. Reconsideration Order, 8 FCC Rcd at 5494; see also 47 C.F.R.  1.720(g). We note that complainants supplemented the record with information aimed at clarifying other disputes regarding damages in parallel proceedings (see File Nos. E-93-104-112), but made no attempt in this proceeding to supplement their claims regarding purchase amounts. In the absence of such information, we calculate damages based on the purchase amounts admitted by defendant. 2. Complainants LDDS, Cable & Wireless, and MCI provided no offset calculations. Defendant provides offset calculations based on rates of return different from those reported in its final Form 492. Defendant attributes the figures it uses to its final Form 492, but provides no explanation of the discrepancy. We have recalculated offsets for the common line and special access categories based on the rates of return reported in defendant's final Form 492. 3. In its briefs in File Nos. E-93-119 and 125, defendant lists its rate of return for the switched traffic sensitive category as 13.35 percent and lists its rate of return for total interstate as 11.36 percent. While defendant's Form 492 lists the switched traffic sensitive rate of return as 13.35 percent, a related note appended to the Form 492 states that the switched traffic sensitive rate of return is 13.55 percent. The Form 492 also lists the total interstate rate of return as 11.59 percent. In File No. E-93-119 defendant admitted that its rate of return in the switched traffic sensitive category is 13.55 percent. In File No. E-93-125 defendant admitted that its rate of return in the switched traffic sensitive category is 13.35 percent. Complainants LDDS and Cable & Wireless claim that defendant's rate of return for the switched traffic sensitive category is 13.55 percent based on defendant's Form 492. Complainant MCI contended in its complaint that defendant's rate of return in the switched traffic sensitive category was 13.35 percent, but based its damages calculations contained in its briefs on 13.55 percent. In response to this change by complainant MCI, defendant clarifies that its rate of return per its Form 492 is 13.35 percent and explains that the 13.55 percent figure contained in a note appended to its Form 492 is a "normalized" rate of return. Defendant does not define "normalized" and does not explain what it means by a "normalized" rate of return. Defendant offers no explanation of the discrepancy regarding its total interstate rate of return. The Commission has previously held that the September Form 492 is a "conclusively binding determination of a carrier's earnings." MCI Liability Order, 5 FCC Rcd at 225; cf. Amendment of Part 65, Interstate Rate of Return Prescription, 1 FCC Rcd 952, 954 (1986) (Reporting Requirements Order), aff'd on recon., 2 FCC Rcd 5340 (1987) (Reporting Requirements Recon.). Accordingly, we calculate damages based on the rates of return shown on defendant's final Form 492. We note that the 13.55 percent figure appears in a note appended to defendant's Form 492 and we credit defendant's statement that the 13.35 percent figure is correctly reported on its Form 492 while the 13.55 percent figure includes undefined adjustments to the reported rate of return. 4. We accept defendant's damages calculations. Defendant uses appropriate purchase amounts (see n.1, above) and figures from its Form 492 (see n.3, above) to calculate damages, whereas complainants LDDS and Cable & Wireless use purchase amounts and rates of return that we have rejected. 5. Defendant calculates damages based on a purchase amount different from that complainant MCI uses. Complainant MCI calculates the purchase amount it uses by multiplying defendant's total switched traffic sensitive revenue by the percentage of these total revenues its purchases represent. This percentage was provided by defendant in response to an interrogatory and is reiterated in defendant's brief. NYT Response to Interrogatories at 2; NYT Br. at Attachment C, page 1. We note that the purchase amount defendant proffers is inconsistent with the "market share" figure it twice attributes to complainant MCI. Defendant provides no verification of the purchase amount it proffers while the "market share" percentage figure it provides is supported by affidavit. Therefore, we accept the purchase amount proffered by complainant MCI. SOUTHWESTERN BELL TELEPHONE COMPANY [amounts in dollars] Complainant DAMAGES[1] OFFSETS[2] DAMAGES AWARD MCI 74,984 -0- 74,984 E-93-138 NOTES FOR SOUTHWESTERN BELL TELEPHONE COMPANY 1. In its damages calculation, defendant without explanation uses a rate of return different from that reported in its Form 492 for the special access category. Similarly, in its damages calculation, complainant MCI used an erroneous tax factor. Therefore, we have recalculated damages using the rate of return reflected in defendant's Form 492 and the correct tax factor. 2. Defendant provides figures for underearnings, percent of earnings attributable to MCI, and offsets for the common line and switched traffic sensitive categories, but it does not explain how these figures were calculated. We find that defendant has presented insufficient information for us to evaluate its claims regarding the amount of the offsets. Cf. Allnet Communications Services, Inc. v. New York Telephone Company, 8 FCC Rcd 3087, 3092-94 (1993) (Earnings and billings data found inadequate to support damages claim absent calculation). Complainant MCI provides no offset calculations. Therefore, we are unable to determine the amount of offsets in this proceeding and none will be allowed. SPRINT CORP. TELEPHONE OPERATING COS. [amounts in dollars] United of Florida Complainant DAMAGES[1] OFFSETS[1] DAMAGES AWARD LDDS 188,857 (132,909) 55,948 E-93-113 United - Midwest Group Complainant DAMAGES[1,3] OFFSETS[1,3] DAMAGES AWARD LDDS 12,827 (4,670)[4] 8,157 E-93-114 Centel - Virginia Complainant DAMAGES[1,2] OFFSETS[1] DAMAGES AWARD LDDS 12,326 (2,283) 10,043 E-93-116 Centel - Texas Complainant DAMAGES[1,3] OFFSETS[1,3] DAMAGES AWARD LDDS 23,121 (6,784) 16,337 E-93-115 NOTES FOR SPRINT CORP. TELEPHONE OPERATING COS. 1. Defendants' damages and offsets calculations do not show how the amounts of over- and under- earnings were calculated. Therefore, we do not have enough information to evaluate defendants' calculations that reflect over- and under- earnings amounts different from those calculated by complainant. Complainant's calculations clearly show how they derived over- and under- earnings amounts. Except where noted, complainant uses the same purchase amounts as defendant. Therefore, we accept complainant's calculations of damages and offsets, except as noted. 2. Complainant proffers a purchase amount for the special access category different from that proffered by defendant, and supplies an affidavit stating that the purchase amount it proffers reflects data contained in its payment records. Defendant does not challenge complainant's submission. Therefore, we accept the purchase amount for the special access category proffered by complainant. 3. Complainant erroneously uses the overall target rate of return plus buffer of 12.25 percent to calculate damages and offsets on a per category basis. We note that the target rate of return plus buffer for category overearnings is 12.40 percent. The overall target rate of return plus buffer of 12.25 percent is inapplicable to overearnings calculated on a per category basis. Further, we note that the target rate of return of 12.00 percent is used to calculate offsets correctly because a defendant cannot be said to have underearned to the extent its earnings exceed the target rate of return. See, e.g., Allnet v. U S West, 8 FCC Rcd at 3023 n.63. Complainant's damages and the corresponding offsets have been recalculated using the correct rates. 4. Both complainant LDDS and defendant calculate an offset for underearnings in the common line category. Defendant earned, however, 12.07 percent in this category, which is within the authorized range of 12.00 percent to 12.40 percent for category earnings. Therefore, there are no damages or offsets for this category. See MidAmerican Long Distance Co. v. Pacific Bell, 8 FCC Rcd 1201, 1210 n.93 (1993). US WEST COMMUNICATIONS [amounts in dollars] Complainant[1] DAMAGES OFFSETS[4] DAMAGES AWARD LDDS 926,779[2,3] -0- 926,779 E-93-123 One to One 170,372[2,3] -0- 170,372 E-93-123 Pacnet 15,677[3] -0- 15,677 E-93-123 Teleconcepts 107,593[3] -0- 107,593 E-93-123 Call-America 16,288[5] -0- 16,288 E-93-151 NOTES FOR US WEST COMMUNICATIONS 1. Cable & Wireless, which was originally a complainant in File No. E- 93-123, was dismissed as a complainant pursuant to a joint motion of the parties. Cable & Wireless, Inc. v. U S West Communications, Inc., DA 94- 1064 (released Oct. 4, 1994). 2. The parties dispute the amount of complainant LDDS's purchases in the switched traffic sensitive and special access categories and complainant One to One's purchases in the switched traffic sensitive category. Complainants provide affidavits stating that the purchase amounts they provide reflect data contained in their payment records, but they do not provide copies of those records. Defendant states that it discovered errors in its purchase amounts and provides new purchase amounts and damages calculations that it characterizes as representing its "best effort." Defendant also states that it does not object to an additional filing by complainants regarding damages. U S West RBr. at 3-4. Defendant does not support its purchase amounts with affidavits or copies of billing records. Therefore, we accept the purchase amounts proffered by complainants LDDS and One to One. 3. Complainants LDDS, One to One, Pacnet, and Teleconcepts erroneously use the overall target rate of return plus buffer of 12.25 percent to calculate damages on a per category basis. We note that the target plus buffer rate for category overearnings is 12.40 percent. Complainants' damages have been recalculated using 12.40 percent. 4. All complainants and defendant in File Nos. E-93-123 and 151 calculate an offset for underearnings in the common line category. Defendant, however, earned 12.04 percent in this category, which is within the authorized range of 12.00 percent to 12.40 percent for category earnings. Therefore, there are no damages or offsets for this category and, consequently, there are no offsets in either proceeding. See MidAmerican Long Distance Co. v. Pacific Bell, 8 FCC Rcd 1201, 1210, n.93 (1993). 5. Both complainant Call America and defendant erroneously use the overall target rate of return plus buffer of 12.25 percent to calculate damages on a per category basis. We note that the target rate of return plus rate for category overearnings is 12.40 percent. The overall target rate of return plus buffer of 12.25 percent is inapplicable to overearnings calculated on a per category basis. Complainant Call America's damages have been recalculated using 12.40 percent. APPENDIX D Effective Period Rate Internal Revenue Service Citation 01/01/91 - 03/31/91 10% Rev.Rul. 90-94, 1990-46 I.R.B. 16 04/01/91 - 06/30/91 9% Rev.Rul. 91-20, 1991-11 I.R.B. 1 07/01/91 - 09/30/91 9% Rev.Rul. 91-33, 1991-21 I.R.B. 1 10/01/91 - 12/31/91 9% Rev.Rul. 91-50, 1991-37 I.R.B. 1 01/01/92 - 03/31/92 8% Rev.Rul. 91-65, 1991-51 I.R.B. 1 04/01/92 - 06/30/92 7% Rev.Rul. 92-21, 1992-14 I.R.B. 14 07/01/92 - 09/30/92 7% Rev.Rul. 92-44, 1992-24 I.R.B. 86 10/01/92 - 12/31/92 6% Rev.Rul. 92-77, 1992-38 I.R.B. 12 01/01/93 - 03/31/93 6% Rev.Rul. 92-110, 1992-52 I.R.B. 15 04/01/93 - 06/30/93 6% Rev.Rul. 93-24, 1993-14 I.R.B. 5 07/01/93 - 09/30/93 6% Rev.Rul. 93-40, 1993-23 I.R.B. 9 10/01/93 - 12/31/93 6% Rev.Rul. 93-63, 1993-30 I.R.B. 40 01/01/94 - 03/31/94 6% Rev.Rul. 93-94, 1993-42 I.R.B. 42 04/01/94 - 06/30/94 6% Rev.Rul. 94-21, 1994-14 I.R.B. 14 07/01/94 - 09/30/94 7% Rev.Rul. 94-39, 1994-26 I.R.B. 9 10/01/94 - 12/31/94 8% Rev.Rul. 94-58, 1994-39 I.R.B. 6