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Locus Telecommunications, Inc. NAL

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Released: September 1, 2011

Federal Communications Commission

FCC 11-130

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
File No. EB-10-TC-395
)
Locus Telecommunications, Inc.
)
NAL/Acct. No. 201132170025
)
Apparent Liability for Forfeiture
)
FRN: 0010729515
)

NOTICE OF APPARENT LIABILITY FOR FORFEITURE

Adopted: August 26, 2011

Released: September 1, 2011

By the Commission:

I.

INTRODUCTION

1.
In this Notice of Apparent Liability for Forfeiture ("NAL"), we find that Locus
Telecommunications, Inc. ("Locus" or "Company")1 has apparently willfully and repeatedly violated
section 201(b) of the Communications Act of 1934, as amended ("Communications Act" or "Act"),2 by
deceptively marketing prepaid calling cards. Based upon our review of the facts and surrounding
circumstances, Locus appears to target its marketing to immigrants with claims that, for a card costing
just a few dollars, buyers can make hundreds if not thousands of minutes of calls to their native countries
when in fact, for that price, they will be able to use only a fraction of those minutes, due to Locus's
assessment of multiple fees and surcharges that are not clearly and conspicuously disclosed to consumers.
Accordingly, we find that Locus Telecommunications, Inc. has apparently violated section 201(b) of the
Act, and is apparently liable for a proposed forfeiture in the amount of five million dollars ($5,000,000).

II.

BACKGROUND

2.
A prepaid calling card is a retail product for which the consumer pays a specific dollar
amount and which enables that customer to make domestic and/or international telephone calls. Such
cards are frequently marketed to immigrant communities for calling a variety of international destinations
and are especially popular with these communities, where many depend on prepaid calling cards to stay in
touch with family and friends in their home countries. The cards are typically sold at retail in
denominations of $2, $3, and $5 at newsstands and in grocery and convenience stores. Companies often
market prepaid cards under a variety of brand names and advertise them to consumers primarily using
posters displayed in retail locations, and in some cases, through radio and television advertising.


1 Locus is a Delaware corporation, whose principal address is 111 Sylvan Avenue, Englewood Cliffs, New Jersey
07632. According to Locus, Locus is a subsidiary of KDDI America, Inc, which in turn is a wholly-owned
subsidiary of KDDI Corporation. Jason Chon, CEO; John Chough, Chairman; and Sam Lee, President, are listed as
contact persons for Locus. Accordingly, all references in this NAL to "Locus" also encompass the foregoing
individuals and all other principals and officers of Locus, as well as the corporate entity itself.
2 47 U.S.C. 201(b).

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FCC 11-130

3.
The Enforcement Bureau began its investigation of Locus by directing a letter of inquiry
to the Company requesting information and documents relating to its prepaid calling card services.3
According to its initial response,4 Locus provides long distance telecommunications service through the use
of prepaid calling cards. Locus has developed over 500 different long distance calling cards "tailored to
meet the needs of specific market segments."5 Locus sells its prepaid calling cards through a national
distributor network that reaches over 70,000 retailers.6 The retail vendors sell the cards to consumers
using marketing posters that Locus designs and distributes.
4.
As part of its LOI response, Locus provided samples and print sheets of the posters and
calling cards sold in 2009 and 2010.7 A typical Locus poster includes the name of the calling card (e.g.,
"Go," "Hey," and "my Friend"), the name of the telecommunications provider whose network carries the
calls (e.g., Geo Telecom, Dulce Telecom), and representations about the number of minutes a consumer
will receive when calling various countries and/or cities.8 The number of calling minutes listed on the
sample of posters provided by Locus usually appears in large font size and/or bright colors.9
Additionally, the posters contain boxes listing various calling destinations, along with the number of
calling minutes a consumer will receive to those destinations using the advertised calling card of a
specified dollar value (e.g., " Mexico 2500 minutes $5"; "1000 minutes $2"). Appearing on the bottom of
the posters is a disclosure in very small font size relating to certain fees and surcharges that will apply
when using the cards, including post-call fees, semi-monthly charges, and other fees assessed when using
toll-free access numbers or calling from payphones.
5.
Locus's calling cards themselves generally come in two parts: a top portion (or "hang
tag") and a bottom portion, the size of a credit card, that can be separated from the top. The front of the
cards identifies the name and value of the card (e.g., $2, $3, $5), and in most instances, whether the cards
offer local and/or toll-free access. The back of the top portion of the cards includes a disclosure about
fees. For example, the disclosure on Locus's $2 "The Card" calling card reads as follows:
Calls are billed in one minute increments. The following surcharges and fees will have the
effect of reducing total minutes available if not used on a single call: $0.99 charge per call
using a payphone; Post call fee of $0.49 per minute; $0.99 weekly charge within 24 hours
of first use; $1.50 charge for directory assistance (max duration 3 min). For latest rates


3 See Letter from Colleen K. Heitkamp, Chief, Telecommunications Consumers Division, Enforcement Bureau,
Federal Communications Commission, to Locus Telecommunications, Inc., April 2, 2010 ("LOI").
4 See Letter from David H. Solomon and Robert G. Kirk, Counsel for Locus Telecommunications, Inc., to Ms.
Colleen K. Heitkamp, Chief, Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, May 17, 2010 ("Response").
5 See id. at 1.
6 See Locus Communications, http://www.locustelecom.com/calling_card/main.shtml (last visited June 20, 2011).
7 Locus also provided a handful of audio and video advertisements for its cards. See also Letter from David H.
Solomon and Robert G. Kirk, Counsel for Locus Telecommunications, Inc. to Richard A. Hindman, Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal Communications Commission, January 21,
2011 ("Supplemental Response").
8 See, e.g., "Pan," "Hey," and "My Friend" posters, submitted with Response.
9 See, e.g., "Pan" poster, submitted with Response.
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FCC 11-130

and fees, please contact our customer service number. Card expires 30 days after first use.
Network services are provided by Geo Telecom.10
The back of the bottom portion of the card includes a scratch off area that hides the Personal
Identification Number ("PIN") necessary to use the card, as well as a series of local access numbers, a
toll-free access number, and a customer service number.
6.
The poster used to market Locus's $2 "The Card" card includes the following disclosure
(which differs from the one that appears on the card itself):
Advertised Rates Based on a Single Initial Call Using Local Access Numbers
Rates and fees are subject to change after validation date. Minutes and rates are based on
a single call from the contiguous United States to a non-cellular destination unless
otherwise advertised. Domestic rates apply only to calls within the contiguous United
States. Calls made using a toll-free access number on a local access card are billed at a
higher per minute rate. Calls are billed in one minute increments. The following
surcharges and fees will have the effect of reducing total minutes available if not used on a
single call: 99 charge per call using a payphone; Post call fee of 49 per minute; 99
weekly charge after 24 hours of first use. $1.50 charge for directory assistance (max
duration 3 min). Card expires 30 days after the date of first use. Network services are
provided by Geo Telecom.11

III.

DISCUSSION

A.

Apparent Violation of Section 201(b) of the Act

7.
Section 201(b) of the Act, states, in pertinent part, that "[a]ll charges, practices,
classifications, and regulations for and in connection with [interstate or foreign] communication service,
shall be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or
unreasonable is declared to be unlawful."12 The Commission has found that unfair and deceptive
marketing practices by interstate common carriers constitute unjust and unreasonable practices under
section 201(b).13 A practice that "convey[s] insufficient information as to the company's identity, rates,


10 See "The Card" $2 card, submitted with Supplemental Response.
11 See "The Card" poster with advertised rates valid until January 30, 2011, submitted with Supplemental Response.
12 47 U.S.C. 201(b).
13 See NOS Communications, Inc., Notice of Apparent Liability for Forfeiture, 16 FCC Rcd 8133 (2001) ("NOS")
(finding that the companies engaged in deceptive marketing of their interstate communication services by failing to
disclose clearly and conspicuously material facts regarding their promotional plan offerings and pricing
methodology, in violation of section 201(b)); Business Discount Plan, Inc., Order of Forfeiture, 15 FCC Rcd 14461
(2000) ("BDP"), recon. granted in part and denied in part, 15 FCC Rcd 24396 (2000) (find that the company
violated section 201(b) by using unjust and unreasonable telemarketing practices such as misrepresenting the nature
of its service offerings); Telecommunications Research & Action Center & Consumer Action, Memorandum
Opinion and Order, 4 FCC Rcd 2157 (Com.Car.Bur. 1989) ("TRAC") (recognizing that section 201(b) provides a
cause of action against carriers for failing to convey sufficient information about their rates, practices and range of
services). See also Joint FCC/FTC Policy Statement For the Advertising of Dial-Around And Other Long Distance
Services To Consumers, 15 FCC Rcd 8654 (2000) ("Joint Advertising Statement").
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FCC 11-130

practices, and range of services" may constitute a violation of section 201(b).14 Thus, a carrier that fails
sufficiently to convey material information, such as rates, about its prepaid calling card services violates
section 201(b) of the Act.
8.
We find that Locus has apparently violated section 201(b) of the Act because it
deceptively represents that buyers of its cards can use hundreds if not thousands of minutes to make calls
to foreign countries for just a few dollars. In truth and in fact, buyers can use only a fraction of those
minutes for calls, because Locus applies a variety of fees and surcharges that quickly deplete the card.
Locus purports to disclose these fees and surcharges, but the fine print "disclosures" contradict the
express and much more prominent claims in the main portion of the marketing materials. Moreover, even
if the disclosures of the various fees and surcharges were not contradictory, they are in small print and not
clear or conspicuous in relation to the claim of total available minutes that the disclosure is intended to
modify, and the disclosure otherwise "convey[s] insufficient information as to the company's identity,
rates, practices, and range of services."15
9.
Locus uses posters displayed in retail locations to market its prepaid calling card services
to consumers.16 As indicated above, Locus represents on its posters that consumers who purchase its
cards will receive a specified number of calling minutes to specific countries or cities for a set price (e.g.,
to Guadalajara, 2500 minutes for $5; 1000 minutes for $2).17 Although Locus's prepaid cards are often
marketed as providing hundreds or thousands of minutes, the total number of minutes actually received by
the consumer is significantly less once the various fees are applied, and if the consumer attempts to use
the card to make multiple calls. In fact, when applied after the first call, Locus's fees and surcharges can
wipe out all remaining minutes on its $2 calling cards.18
10.
Locus's marketing materials and cards make certain disclosures about these fees, but they
conflict with the express statements of how many calling minutes are available, and they are not adequate
to counter the express and otherwise unqualified claim that consumers will be able to make hundreds if
not thousands of minutes of calls for the marketed rate. As a preliminary matter, the font size of the
advertised minutes and rate information completely dwarfs the disclosure.19 As described above, Locus's


14 See TRAC, 4 FCC Rcd at 2159. The full Commission has approvingly cited this passage from TRAC as indicating
that such conduct violates section 201(b) of the Act. BDP, 16 FCC Rcd at 14469.
15 TRAC, 4 FCC Rcd at 2159.
16 See posters submitted with Response.
17 See "The Card" poster with advertised rates valid until January 30, 2011, submitted with Supplemental Response.
18 A card is exhausted when either its face value has been used up (e.g., $2), or when all of the available minutes
have been used. For a discussion of how the fees may impact the value of the card as it is used, see infra 13.
19 Both academic research and the Commission's experience with consumer issues have demonstrated that the
manner in which providers display material information, including the charges, classifications, and terms of use, can
have as much impact on a consumer's decision to make a purchase as the information itself. See generally Colin
Camerer, Samuel Issacharoff, George Loewenstein, Ted O'Donoghue & Matthew Rabin, Regulation for
Conservatives: Behavioral Economics and the Case for "Asymmetric Paternalism,"
151 U. PENN. L. REV. 1211
(2003) (surveying regulatory strategies to address problems arising from systematic errors in consumer decision-
making); Richard H. Thaler and Cass R. Sunstein, NUDGE, Yale University Press 2008 (concluding that information
buried deep in the "fine print" is far less useful to consumers than information displayed clearly and prominently).
See also Joint Advertising Statement, 15 FCC Rcd at 8654-55 (finding that if consumers are deceived by advertising
claims, they cannot make informed purchasing decisions); Truth-in-Billing and Billing Format, First Report and
Order and Further Notice of Proposed Rulemaking, 14 FCC Rcd 7492 (1999) (noting that the proper functioning of
(continued....)
4

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FCC 11-130

posters typically advertise the number of calling minutes offered to certain countries in large, colorful,
simple text, which is prominently displayed at the top or center of the poster.20 This information is not
qualified in any way; i.e., there is no suggestion that the consumer will receive "up to" the specified
number of minutes, and no indication that the consumer must read the small print at the bottom in order to
determine what he or she is actually purchasing. The main part of the poster stands in stark contrast to the
disclosures regarding additional fees and surcharges, which are at the bottom of the posters in
significantly smaller type and easily overlooked. While disclosures regarding fees and surcharges are
also printed on the top portion (or "hang tag") of Locus's cards, they are similarly printed in extremely
small font and difficult to read. Further, because the calling card is meant to be torn away from the hang
tag for ease of carrying in a wallet and customer use, the disclosures on the hang tag afford the consumer
little information at the actual point of use.21 Disclosures in fine print and in materials that reasonable
consumers may not read or use are ineffective to ensure that consumers have an accurate and informed
understanding of an advertising claim.22 We therefore conclude that Locus's disclosures are not clear and
conspicuous to the average consumer.
11.
Additionally, even if Locus's disclosures were more prominent, we find that they do not
provide the information necessary for a consumer to determine when and how the fees and surcharges
will affect the number of calling minutes offered. To illustrate this point, we use the disclosure example
in paragraph 6 above for Locus's $2 "The Card" card, which is typical of the disclosures found in Locus's
marketing materials. First, despite advertising on its posters a specific number of minutes for a set price,
Locus includes a disclosure that states that "calls made using a toll-free access number on a local access
card are billed at a higher per minute rate." The poster does not specify what "higher" rates will apply.
Moreover, Locus fails to disclose that higher rates apply when using 800 access numbers on the card
itself--a card that clearly advertises on the front that it offers local and toll-free access. In addition, the
800 number on the card is in bold, effectively encouraging the consumer to dial that number to access
service, rather than dial the local access numbers provided.23 Given that a typical consumer would expect
the 800 access number, like other 800 numbers, to be toll-free, this lack of clarity is particularly
misleading. We therefore find that the disclosures are not in the "clear and unambiguous language" that
the Commission has said is needed to ensure that they are effective.24
12.
Locus's poster disclosures note that "[m]inutes and rates are based on a single call...and
that "surcharges and fees will have the effect of reducing total minutes available if not used on a single
call."25 We find that these statements are inadequate to inform consumers fully about the possible
(Continued from previous page)


competitive markets is predicated on consumers having access to accurate, meaningful information in a format that
they can understand).
20 See, e.g., "The Card" poster with advertised rates valid until January 30, 2011, submitted with Supplemental
Response
.
21 See, e.g., "The Card" $2 card submitted with Supplemental Response.
22 Joint Advertising Statement, 15 FCC Rcd at 8663 (noting that prominence, proximity, and placement of disclosure
in comparison to advertising representation affect effectiveness of disclosure); id. at 8659 (noting that disclosure
about limitations on advertised long distance rate likely ineffective when advertised rate appeared on peel-off
stickers, without disclosure, that consumers were supposed to put on telephones).
23 Dialing a local access number could result in charges to the consumer by the consumer's phone company (if, for
example, the number was a regional toll number), but would not reduce the available minutes on the card.
24 Joint Advertising Statement, 15 FCC Rcd at 8662.
25 See, e.g., "The Card" poster with rates valid until January 30, 2011, submitted with Supplemental Response.
5

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FCC 11-130

reduction in the number of advertised minutes, the circumstances under which those minutes will not be
received, or how to calculate the actual number of minutes provided.

13.
To give context to why these disclosures are inadequate and the extent of the gulf
between a consumer's reasonable expectation (based on Locus's marketing materials) and the consumer's
actual experience (based on application of Locus's fees), consider the card that one of Locus's posters
advertises as offering 1000 minutes of calling time to Mexico for $2.26 If a consumer makes a 60-minute
call to Mexico, one would reasonably expect there to be 940 minutes remaining on the card. However,
the card disclosure suggests that once the initial call is completed, a post-call fee of $0.49 cents per
minute applies. In addition, a weekly fee of $0.99 applies within 24 hours of the first call. Thus, after
one 60-minute call, potential post-call fees of $30.39 would exhaust a card that was advertised to provide
1000 minutes. According to Locus, the advertised "minutes and rates are based on a single call."27 In
other words, the only possible way a consumer could use all of the 1000 advertised minutes would be to
make a single 16-hour call from a local access number a duration so lengthy as to make such calls
highly improbable by the typical consumer.
14.
Information regarding the existence, amount, and application of fees that affect the value
of a calling card is material to consumers when deciding to purchase cards. The failure to provide such
information clearly and conspicuously, because it deprives consumers of material information needed to
make a purchasing decision, is a deceptive marketing practice. As the Commission stated in NOS,28 if a
consumer must take a series of complicated and confusing steps to try and calculate the charges and
calling time based on the disclosure provided, such disclosure almost certainly would be misleading to
consumers. Such a practice, then, would be unjust and unreasonable under section 201(b).
15.
We find the marketing materials used by Locus to sell its prepaid calling cards are
misleading and deceptive regarding the rates and charges applicable to its service offerings. In addition,
we find that Locus failed to disclose, in any meaningful way, material information about its rates, charges
and practices at the point of sale, resulting in substantial harm to consumers who purchased its prepaid
calling cards. Accordingly, we find that Locus has apparently engaged in unjust or unreasonable
marketing practices in violation of section 201(b) of the Act.

B.

Proposed Forfeiture Pursuant to Section 503(b) of the Act

16.
Section 503(b)(1) of the Act states that any person who willfully or repeatedly fails to
comply with any provision of the Act or any rule, regulation, or order issued by the Commission, shall be
liable to the United States for a forfeiture penalty.29 Section 503(b)(2)(B) of the Act authorizes the
Commission to assess a forfeiture of up to $150,000 for each violation, or each day of a continuing
violation, up to a statutory maximum of $1,500,000 for a single act or failure to act.30 In determining the


26 See id.
27 See supra 6.
28 See NOS, 16 FCC Rcd at 8138.
29 47 U.S.C. 503(b)(1)(B). See also 47 C.F.R. 1.80(a)(2).
30 47 U.S.C. 503(b)(2)(B); see also 47 C.F.R. 1.80(b)(2). In 2008, the Commission amended section 1.80(b)(2)
of the rules, 47 C.F.R. 1.80(b)(2), to increase the maximum forfeiture amounts in accordance with the inflation
adjustment requirements contained in the Debt Collection Improvement Act of 1996, 28 U.S.C. 2461. See
Amendment of Section 1.80 of the Commission's Rules and Adjustment of Forfeiture Maxima to Reflect Inflation
,
(continued....)
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appropriate forfeiture amount, we consider the factors enumerated in section 503(b)(2)(E) of the Act,
including "the nature, circumstances, extent and gravity of the violation, and, with respect to the violator,
the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice
may require."31 Although the forfeiture guidelines do not establish a forfeiture amount for unjust or
unreasonable practices, such as deceptive marketing practices, the guidelines do state that, ". . . any
omission of a specific rule violation from the. . . [forfeiture guidelines]. . . should not signal that the
Commission considers any unlisted violation as nonexistent or unimportant."32 The Commission retains
the discretion to depart from the guidelines and issue forfeitures on a case-by-case basis, under its general
forfeiture authority contained in section 503 of the Act.33
17.
In NOS, the Commission found that unfair and deceptive marketing practices by
interstate common carriers constitute unjust and unreasonable practices within the meaning of section
201(b) of the Act,"34 and concluded that each instance of such practices constituted a separate violation of
section 201(b). The Commission noted that it had previously assessed a forfeiture amount of $40,000 for
each instance in which a carrier engaged in an unjust and unreasonable telemarketing practice in violation
of section 201(b).35 It explained, however, that "a straightforward application of a $40,000 base forfeiture
amount would likely produce a proposed forfeiture in the millions of dollars."36 Rather, taking into
account the number of violations attributed to the two companies involved in the case, the Commission
determined that a $500,000 forfeiture amount per company was sufficient to protect the interests of
consumers and to deter future violations of the Act.37
18.
We find that each card that Locus marketed using deceptive advertising constitutes an
independent unjust and unreasonable practice, and thus a separate and distinct apparent violation of
section 201(b) of the Act.38 Given the thousands of cards that Locus appears to have marketed, there is an
extensive number of apparent violations in this case for which the Commission is empowered to propose
a penalty.39 While the proposed forfeiture is higher than the proposed forfeiture in NOS, weighing the
(Continued from previous page)


Order, 23 FCC Rcd 9845, 9847 (2008) (adjusting the maximum statutory amounts for common carriers from
$130,000/$1,300,000 to $150,000/$1,500,000).
31 47 U.S.C. 503(b)(2)(E).
32 See Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate Guidelines, Report
and Order, 12 FCC Rcd 17087, 17099, 22 (1997) ("Forfeiture Policy Statement"); recon. denied, 15 FCC Rcd 303
(1999).
33 Id.
34 See NOS, 16 FCC Rcd at 8133, 8142.
35 See id. at 8141-8142 (citing Business Discount Plan, Inc., Apparent Liability for Forfeiture, 15 FCC Rcd at
14471-72 (2000)).
36 Id. at 8142.
37 See id.
38 In NOS, the Commission found that "each rate sheet sent to consumers constitutes a separate violation of section
201(b)." NOS, 16 FCC Rcd at 8133. Consistent with NOS, we find that the marketing of each card to consumers
constitutes a separate apparent violation of section 201(b). See also BDP, 15 FCC Rcd at 14471-72 (assessing a
forfeiture amount of $40,000 for each instance in which the carrier engaged in an unjust and unreasonable
telemarketing practice in violation of section 201(b)).
39 See Response attachments (including print sheets for hundreds of different cards).
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facts before us, and taking into account the extent and gravity of Locus's egregious conduct, as well as its
culpability and information in the current record about its revenues, we find that a total proposed
forfeiture amount of $5,000,000 is appropriate under the specific circumstances of this case.40 The
proposed forfeiture clearly must protect the interests of consumers and serve as an adequate deterrent. A
lesser penalty would be inappropriate in light of Locus's failure to adequately provide material
information about its rates to thousands of consumers who purchased the Company's prepaid cards.
Moreover, in determining the amount of a proposed penalty, we seek to "guarantee that forfeitures issued
against large or highly profitable entities are not considered merely an affordable cost of doing
business."41 While we could propose a higher forfeiture based on Locus's 2010 revenues,42 we believe
the forfeiture we propose today is sufficient to protect the interests of consumers and serve as an adequate
deterrent. In the event Locus continues to engage in conduct that apparently violates section 201(b)'s
prohibition against unjust and unreasonable practices, such apparent violations could result in future
NALs proposing substantially greater forfeitures and revocation of Locus's operating authority. Other
prepaid calling card providers are also on notice that practices such as those engaged in by Locus are
unjust and unreasonable, and that we may propose more significant forfeitures in the future as high as is
necessary, within the range of our statutory authority, to ensure that such companies do not engage in
deceptive marketing practices.

IV.

CONCLUSION

19.
We have determined that Locus Telecommunications, Inc. apparently violated section
201(b) of the Act. We have further determined that Locus Telecommunications, Inc. is apparently liable
for a forfeiture in the amount of $5,000,000.

V.

ORDERING CLAUSES

20.
Accordingly,

IT IS ORDERED

that, pursuant to section 503(b)(2)(B) of the
Communications Act of 1934, as amended, 47 U.S.C. 503(b)(2)(B), and section 1.80 of the
Commission's rules, 47 C.F.R. 1.80, Locus Telecommunications, Inc. is hereby

NOTIFIED

of this

APPARENT LIABILITY FOR FORFEITURE

in the amount of $5,000,000, for willful and repeated
violations of section 201(b) of the Act, 47 U.S.C. 201(b).
21.

IT IS FURTHER ORDERED

that, pursuant to section 1.80 of the Commission's rules,43
within thirty (30) days of the release date of this Notice of Apparent Liability for Forfeiture, Locus
Telecommunications, Inc.

SHALL PAY

the full amount of the proposed forfeiture or

SHALL FILE

a
written statement seeking reduction or cancellation of the proposed forfeiture.
22.
Payment of the forfeiture must be made by check or similar instrument, payable to the
order of the Federal Communications Commission. The payment must include the NAL/Account
Number and FRN referenced in the caption. Payment by check or money order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000. Payment by overnight mail


40 The $5 million penalty we propose is equivalent to applying a $40,000 penalty to only 125 apparent violations
that occurred within one year of this NAL.
41 See Forfeiture Policy Statement 12 FCC Rcd 17087, 17099.
42 See Locus 2011 FCC Form 499-A (Telecommunications Reporting Worksheet (Reporting Calendar 2010
Revenues)).
43 47 C.F.R. 1.80.
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may be sent to U.S. Bank Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St.
Louis, MO 63101. Payment by wire transfer may be made to ABA Number 021030004, receiving bank
TREAS/NYC, and account number 27000001. For payment by credit card, an FCC Form 159
(Remittance Advice) must be submitted. When completing the FCC Form 159, enter the NAL/Account
number in block number 23A (call sign/other ID), and enter the letters "FORF" in block number 24A
(payment type code). Locus Telecommunications, Inc. will also send electronic notification to
Johnny.Drake@fcc.gov on the date said payment is made. Requests for full payment under an installment
plan should be sent to: Chief Financial Officer -- Financial Operations, 445 12th Street, S.W., Room 1-
A625, Washington, D.C. 20554. Please contact the Financial Operations Group Help Desk at 1-877-
480-3201 or Email: ARINQUIRIES@fcc.gov with any questions regarding payment procedures.

23.
The response, if any, must be mailed both to: Marlene H. Dortch, Secretary, Federal
Communications Commission, 445 12th Street, SW, Washington, DC 20554, ATTN: Enforcement
Bureau Telecommunications Consumers Division; and to Richard Hindman, Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal Communications Commission,
445 12th Street, SW, Washington, DC 20554, and must include the NAL/Acct. No. referenced in the
caption. Documents sent by overnight mail (other than United States Postal Service Express Mail) must
be addressed to: Marlene H. Dortch, Secretary, Federal Communications Commission, Office of the
Secretary, 9300 East Hampton Drive, Capitol Heights, MD 20743. Hand or messenger-delivered mail
should be directed, without envelopes, to: Marlene H. Dortch, Secretary, Federal Communications
Commission, Office of the Secretary, 445 12th Street, SW, Washington, DC 20554 (deliveries accepted
Monday through Friday 8:00 a.m. to 7:00 p.m. only). See www.fcc.gov/osec/guidelines.html for further
instructions on FCC filing addresses.
24.
The Commission will not consider reducing or canceling a proposed forfeiture in
response to a claim of inability to pay unless the petitioner submits: (1) federal tax returns for the most
recent three-year period; (2) financial statements prepared according to generally accepted accounting
practices; or (3) some other reliable and objective documentation that accurately reflects the petitioner's
current financial status. Any claim of inability to pay must specifically identify the basis for the claim by
reference to the financial documentation submitted.
25.

IT IS FURTHER ORDERED

that a copy of this Notice of Apparent Liability for
Forfeiture shall be sent by Certified Mail Return Receipt Requested and First Class mail to Locus
Telecommunications, Inc., Attention: Jason Chon, CEO; John Chough, Chairman; and Sam Lee,
President, 111 Sylvan Avenue, Englewood Cliffs, NJ 07632; and to David H. Soloman and Robert G.
Kirk, Wilkinson, Barker, Knauer, LLP, 2300 N Street, N.W., Suite 700, Washington, DC 20037.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
9

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