AMC provides answering services to retailers. Calls to a retailer are automatica

Question

AMC provides answering services to retailers. Calls to a retailer are automatically forwarded to AMC, which pays for the calls. AMC obtains telephone service at a discount from major carriers, including Sprint. Sprint's tariff (a public document setting out rates and rules relating to Sprint's services) states that the "subscriber shall be responsible for the payment of all charges for service." When AMC learned that computer hackers had obtained the access code for its lines and had made nearly $160,000 worth of long-distance calls, it asked Sprint to absorb the cost. Sprint refused. AMC filed a complaint with the Federal Communications Commission, claiming in part that Sprint's tariff was vague and ambiguous, in violation of the Communications Act of 1934 and FCC rules. These laws require that a carrier's tariff "clearly and definitely" specify any "exceptions or conditions which in any way affect the rates named in the tariff." The FCC rejected AMC's complaint. AMC appealed the FCC's decision to a federal appellate court, claiming that the FCC's decision to reject AMC's complaint was arbitrary and capricious. What should the court decide and why?

Explanation / Answer

Federal Communications Commissions’ decision was neither arbitrary nor capricious. In the case- study it is specified that Sprint's tariff (a public document setting out rates and rules relating to Sprint's services) states that the "subscriber shall be responsible for the payment of all charges for service." This establishes a compulsion that all charges are to be provided by the service provider. This is completely clear and certain. Furthermore American Message Centre is responsible for making the payments because it is proved that phone has been used and computer hacking is their technical and system failure.

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