UNITED STATES OF
AMERICA
FEDERAL TRADE COMMISSION
In the Matter of
BEYLEN TELECOM, LTD. and NITELINE
MEDIA, INC., corporations, and RON TAN, individually and
as an officer of NITELINE MEDIA, INC.
File No. 972-3128
AGREEMENT
CONTAINING
CONSENT ORDER
The Federal Trade Commission has conducted an
investigation of certain acts and practices of Beylen
Telecom, Ltd., NiteLine Media, Inc., corporations, and
Ron Tan, individually and as an officer of NiteLine
Media, Inc. (“proposed respondents”). Proposed
respondents, having been represented by counsel, are
willing to enter into an agreement containing an order
resolving the allegations contained in the attached draft
complaint. Therefore,
IT IS HEREBY AGREED by and between Beylen Telecom,
Ltd. and NiteLine Media, Inc., by their duly authorized
officers, and Ron Tan, individually and as an officer of
NiteLine Media, Inc., and counsel for the Federal Trade
Commission that:
- 1a. Proposed respondent Beylen Telecom, Ltd., is
a corporation organized, existing and doing
business under and by virtue of the laws of the
Cayman Islands with its principal office or place
of business at Genesis Building, PS Box 2097,
Grand Cayman, Cayman Islands, British West
Indies.
- 1b. Proposed respondent NiteLine Media, Inc. is a
New York corporation with its principal office or
place of business at 7302 19th Avenue, Brooklyn,
New York 11204.
- 1c. Proposed respondent Ron Tan is an individual
residing within the State of New York and is an
officer and shareholder of NiteLine Media, Inc.
Individually or in concert with others he
formulates, direct, or controls the policies,
acts, or practices of NiteLine Media. His
principal office or place of business is the same
as that of NiteLine Media, Inc.
-
- 2. For the purpose of this Order, proposed
respondents admit all the jurisdictional facts
set forth in the draft complaint.
-
- 3. The proposed respondents waive:
- (a) Any further procedural steps;
- (b) The requirement that the
Commission’s decision contain a
statement of findings of fact and
conclusion of law;
- (c) All rights to seek judicial review or
otherwise to challenge or contest the
validity of the Order entered pursuant to
this agreement; and
- (d) Any claim under the Equal Access To
Justice Act.
-
- 4. This agreement shall not become part of the
public record of the proceeding unless and until
it is accepted by the Commission. If this
agreement is accepted by the Commission, it,
together with the draft complaint, will be placed
on the public record for a period of sixty (60)
days and information about it publicly released.
The Commission thereafter may either withdraw its
acceptance of this agreement and so notify
proposed respondents, in which event it will take
such action as it may consider appropriate, or
issue and serve its complaint (in such form as
the circumstances may require) and decision in
disposition of the proceeding.
-
- 5. This agreement is for settlement purposes only
and does not constitute an admission by any of
the proposed respondents that the law has been
violated as alleged in the draft complaint, or of
any wrongdoing whatsoever, or that the facts as
alleged in the draft complaint, other than the
jurisdictional facts, are true.
-
- 6. This agreement contemplates that, if it is
accepted by the Commission, and if such
acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Section
2.34 of the Commission's Rules, the Commission
may, without further notice to proposed
respondents, (1) issue its complaint
corresponding in form and substance with the
attached draft complaint and its decision
containing the following Order in disposition of
the proceeding, and (2) make information about it
public. When so entered, the Order shall have the
same force and effect and may be altered,
modified, or set aside in the same manner and
within the same time provided by statute for
other orders. The Order shall become final upon
service. Delivery of the complaint and the
decision and Order to proposed respondents’
attorneys as stated in this agreement by any
means specified in Section 4.4(a) of the
Commission's Rules shall constitute service.
Proposed respondents waive any right they may
have to any other manner of service. The
complaint may be used in construing the terms of
the Order. No agreement, understanding,
representation, or interpretation not contained
in the Order or in the agreement may be used to
vary or contradict the terms of the Order.
-
- 7. Proposed respondents have read the draft
complaint and the following Order. They
understand that they may be liable for civil
penalties in the amount provided by law and other
appropriate relief for each violation of the
Order that occurs after it becomes final.
ORDER
DEFINITIONS
For purposes of this Order, the following definitions
shall apply:
- 1. "Beylen" means Beylen Telecom, Ltd.
and its successors, assigns, shareholders,
officers, agents, servants, employees, and those
persons in active concert or participation with
them who receive actual notice of this Order by
personal service or otherwise, whether acting
through any corporation, subsidiary, division, or
other device.
- 2. "NiteLine" means NiteLine Media,
Inc. and its successors, assigns, shareholders,
officers, agents, servants, employees, and those
persons in active concert or participation with
them who receive actual notice of this Order by
personal service or otherwise, whether acting
through any corporation, subsidiary, division, or
other device.
- 3. "Ron Tan" means Ron Tan a/k/a Roeun
Tan, individually, and in his capacity as an
officer and shareholder of NiteLine Media, Inc.,
and his successors, assigns, officers, agents,
servants, employees, and those persons in active
concert or participation with them who receive
actual notice of this Order by personal service
or otherwise, whether acting through any
corporation, subsidiary, division, or other
device.
-
- 4. Unless otherwise specified,
“respondents” shall mean Beylen and
NiteLine, corporations, their successors and
their officers; Ron Tan, individually and as an
officer of NiteLine; and each of the above’s
agents, representatives and employees. Unless
otherwise specified, “respondent” shall
mean NiteLine, Ron Tan or Beylen.
- 5. "Commerce" shall mean
"commerce" as defined in Section 4 of
the Federal Trade Commission Act, 15 U.S.C. §
44.
- 6. "Clearly and Conspicuously" shall
mean as follows:
-
- In an advertisement communicated through
an electronic medium (such as television,
video, radio, and interactive media such
as the Internet and online services), the
disclosure shall be presented
simultaneously in both the audio and
video portions of the advertisement.
Provided, however, that in any
advertisement presented solely through
video or audio means, the disclosure may
be made through the same means in which
the ad is presented. The audio disclosure
shall be delivered in a volume and
cadence sufficient for an ordinary
consumer to hear and comprehend it. The
video disclosure shall be of a size and
shade, and shall appear on the screen for
a duration, sufficient for an ordinary
consumer to read and comprehend it. In
addition to the foregoing, in interactive
media the disclosure shall also be
unavoidable and shall be presented prior
to the consumer incurring any financial
obligation. The disclosure shall be in
understandable language and syntax.
Nothing contrary to, inconsistent with,
or in mitigation of the disclosure shall
be used in any advertisement.
- 7. “Document” is synonymous in meaning
and equal in scope to the usage of the term in
Federal Rule of Civil Procedure 34(a), and
includes writings, drawings, graphs, charts,
photographs, audio and video recordings, computer
records, and other data compilations from which
information can be obtained. A draft or
non-identical copy is a separate document within
the meaning of the term.
-
- 8. “David.exe” means a software program
that, as alleged in the Commission’s draft
complaint, a respondent has promoted, offered,
distributed, or provided on web sites as a
“viewer,” which consumers may download,
install, and execute, and which dials an
international long-distance telephone number for
which a fee is charged.
-
- 9. “Eligible Consumer” means a
telephone subscriber that was billed for
international long distance calls to Moldova from
December, 1996 through February, 1997 to one of
the telephone numbers listed in Schedule A,
annexed hereto.
-
- 10. “Relevant Charges” means the dollar
amount billed by AT&T, MCI, Sprint or another
long distance carrier to an Eligible Consumer for
international long distance calls to Moldova from
December 1996 through February 1997, to one of
the telephone numbers listed in Schedule A,
annexed hereto.
I.
IT IS THEREFORE ORDERED that, in connection with using
the Internet to place international long distance
telephone calls, each respondent shall not violate
Section 5(a) of the FTC Act, 15 U.S.C. §45(a) by:
A. Representing, either directly or by implication,
that consumers may download, install, activate or use a
computer software program to view computer-stored images
without cost, unless there are no costs to consumers
arising from such activity.
B. Representing, either directly or by implication,
that a consumer may view computer- stored images by
downloading, installing and activating a software program
known as “David.exe” or any other substantially
similar software, unless such respondent clearly and
conspicuously discloses, in close proximity to the
representation, any material facts concerning costs and
consequences to a consumer that result from downloading,
installing, and activating such software, including, but
not limited to, the following:
- That the consumer’s computer will terminate
its modem connection to the consumer’s usual
Internet service provider;
- That the consumer’s modem will dial an
international long-distance telephone number and
establish a long-distance telephone connection
with some remote location outside the United
States;
- (a) A statement that “International long
distance telephone charges to [insert country
of call termination] apply”; and
- (b) Either:
-
- (i) a statement that “This call may
cost you as much as [insert the
maximum estimate of possible per-minute
tariffed charge available through one
of the three largest U.S. long-distance
carriers (e.g. MCI, Sprint or AT&T;
hereafter "a major U.S.
carrier”)] per minute”; or
(ii)
a stated range of possible costs
per-minute for the call, where the
maximum possible per-minute charge
available through a major U.S. carrier is
disclosed at least as prominently as any
lower estimate of possible charges, and
the lower estimate is based on a
non-promotional standard tariffed charge
available through a major carrier, and
there is a clear and conspicuous
disclosure of the following statement:
“To determine your exact per-minute
charges, contact your long distance
carrier.”; and,
- 4. That, once connected, the consumer’s
computer modem will not terminate the
international long-distance telephone connection
to the remote service provider unless and until:
(a) the consumer terminates the connection by
using a “disconnect” feature that is
displayed on the screen throughout the
connection; OR (b) the call is terminated
automatically after some specific, stated period
of time (e.g. after 5 minutes); OR (c) the
consumer turns off the power switch to his
computer or modem, or takes other drastic and
unusual action to terminate the telephone
connection, if neither (a) nor (b) above are
applicable.
II.
IT IS FURTHER ORDERED that:
A. Each respondent shall not violate Section 5(a) of
the FTC Act, 15 U.S.C. §45(a) by directly causing
international long-distance charges to appear on the
telephone billing statement of any consumer when such
call does not, in fact, go to the international
destination for which charges are assessed; and
B. Each respondent, when contracting with any entity
for international call charges to appear on any
consumer’s telephone bill, shall include written
terms in such contract requiring calls to go to the
destination for which charges are assessed on a
consumer’s telephone bill. If, at the time of the
entry of this Order, a respondent has an existing
contract with another entity that arranges call charges
to appear on any consumer’s telephone bill, the
respondent may satisfy the requirements of this Section
by obtaining from that entity a letter or other written
assurance that calls go to the destination for which
charges are assessed on a consumer’s telephone bill.
III.
IT IS FURTHER ORDERED that:
A. Pursuant to the Consent Decree and Order proposed
in FTC v. Audiotex Connection, Inc., CV-97 0726 (DRH)
(EDNY) (“the Consent Decree”), and after the
entry of such Consent Decree, Eligible Consumers charged
by AT&T or MCI for telephone calls involving
David.exe shall, to the extent possible, receive a credit
on their monthly telephone bill equal to the amount of
the Relevant Charges. To the extent an Eligible Consumer
has already been credited such an amount in full, no
additional credit shall be extended. To the extent an
Eligible Consumer has received a partial credit, only the
remaining balance of the original Relevant Charge shall
be credited. The process for issuing the credits to
Eligible Consumers will be administered by AT&T and
MCI, respectively, and monitored and/or audited by the
FTC. The reasonable costs of the two carriers arising
from the issuance of credits for the Relevant Charges and
from such administration of credits shall be reimbursed
by the escrow agent by deducting and paying to AT&T
and MCI, respectively, the amounts stated below.
B. Pursuant to the Consent Decree and Order proposed
in FTC v. Audiotex Connection, Inc., CV-97 0726 (DRH)
(EDNY), and after the entry of such Consent Decree, a
Redress Escrow Account shall be established at a bank
with a branch located in the State of New York, and Joel
Dichter, Esq., shall be designated as the sole escrow
agent and signatory to this Redress Escrow Account. In
addition to the funds deposited by the defendants in FTC
v. Audiotex Connection, Inc., the respondents shall
deposit sufficient funds into the Redress Escrow Account
as are necessary to enable the escrow agent to distribute
the funds, consisting of a total deposit of all sums
provided by Section IIIB(1) and (2), below,
contemporaneously with a deposit of the $60,000 provided
by Section IIIB(3), in the following manner:
- AT&T shall be distributed the sum of $660,000
toward the cost of administering the credit to
consumers provided by Section IIIA, above, and
toward reimbursement of out-of-pocket expenses
associated with calls to the Moldova telephone
numbers;
- MCI shall be distributed the sum of $99,302.57
toward the cost of administering the credit to
consumers provided by Section IIIA above and
toward reimbursement of out-of-pocket expenses
associated with calls to the Moldova telephone
numbers;
- Forty Thousand Dollars ($40,000) shall be
distributed to the Federal Trade Commission and
shall be used, where practicable, to provide
redress to Eligible Consumers charged by an
international long-distance carrier other than
AT&T or MCI (hereinafter referred to as
“Eligible Non-AT&T/MCI Consumers”).
The Commission, in its sole discretion, may use a
designated agent to administer redress for
Eligible Non-AT&T/MCI Consumers. If the
Commission, in its sole discretion, determines
that redress to consumers is wholly or partially
impractical, any funds up to Forty Thousand
Dollars ($40,000.00) not so used shall be paid to
the United States Treasury. The respondents shall
be notified as to how such funds are disbursed,
but shall have no right to contest the manner of
distribution. Eligible Non-AT&T/MCI Consumers
shall have 90 days from the Court’s entry of
the Consent Decree to request a refund. If the
Commission or its designated agent determine
within 120 days from the entry of the Consent
Decree that the cost of issuing and administering
refunds to Eligible Non-AT&T/MCI Consumers
exceeds Forty Thousand Dollars ($40,000.00), the
Commission or its designated agent shall so
notify the escrow agent, and an additional sum of
money not to exceed Twenty Thousand Dollars
($20,000.00) shall be distributed by the escrow
agent to the Commission for redress to Eligible
Non-AT&T/MCI Consumers. To the extent that
the escrow agent is not notified in writing by
the Commission within such 120 day period that
all or a portion of the additional Twenty
Thousand Dollars ($20,000.00) is required by the
Commission for redress purposes, the $20,000.00
or remaining portion thereof not required by the
Commission for redress purposes shall be released
from the Redress Escrow Account and distributed
promptly by the escrow agent to any contributing
defendant in FTC v. Audiotex Connection, Inc.
and/or any contributing respondent.
C. The respondents unilaterally agree to comply with
this administrative Order after the Commission votes to
accept it and during the 60-day comment period before the
Order becomes final. Should the respondents distribute
funds during that period to the Redress Escrow Account,
in amounts sufficient to commence the redress program
under the Consent Decree in FTC v. Audiotex Connection,
Inc., such payment shall fulfill the respondents’
redress obligations under Section IIIB above.
IV.
IT IS FURTHER ORDERED that for a period of three years
after the date of entry of this Order, each respondent
shall maintain, and make available to the FTC upon
reasonable notice, documents that, in reasonable detail,
accurately, fairly, and completely reflect such
respondent’s activities related to using the
Internet to place international long distance telephone
calls including:
A. 1. Representative written and, if distributed in
audio format, audiotaped copies of all solicitations,
advertisements, or other marketing materials actually
used;
2. The number, frequency, and average duration of
calls to any international, tolled telephone numbers
advertised or promoted directly or indirectly by such
respondent, as well as the payments received and payments
made for such calls;
3. The portion of the contract or the other written
assurance referenced in Section IIB of this Order; and,
B. Records that reflect, for every consumer complaint
or refund request received from any consumer to whom such
respondent has sold, billed or sent any goods or
services, or from whom such respondent accepted money for
such goods or services, whether received directly or
indirectly or through any third party:
- the consumer’s name, address, telephone
number and the dollar amount paid by the
consumer;
- the written complaint or refund request, if any,
and the date of the complaint or refund request;
- the basis of the complaint and the nature and
result of any investigation conducted concerning
the validity of the complaint;
- each response from the respondent(s) and the date
of the response;
- any final resolution and the date of the
resolution; and
- in the event of a denial of a refund request, the
reason for such denial.
V.
IT IS FURTHER ORDERED that, to enable the Commission
to monitor compliance with the provisions of this Order,
for a period of three years after the date of entry of
this Order:
A. Each corporate respondent shall notify the FTC in
writing, within thirty (30) days of: (1) any
reorganization, name change, dissolution, change in
majority ownership, or any corporate change that may
affect compliance obligations arising under this Order;
and (2) any affiliation with any new business entity
(including but not limited to, any partnership, limited
partnership, joint venture, sole proprietorship or
corporation) in connection with using the Internet to
place international long distance telephone calls, such
notification to include: (a) the name of the business
entity; (b) the address and telephone number of the
business entity; (c) the names of the business
entity’s officers, directors, principals and
managers; and (d) a summary description of the business
entity’s intended activities; and
B. Each individual respondent shall notify the FTC in
writing, within thirty (30) days of the discontinuance of
his current business affiliation or employment with a
corporate respondent, or of his affiliation or employment
with any new business entity (including but not limited
to, any partnership, limited partnership, joint venture,
sole proprietorship or corporation) in connection with
using the Internet to place international long distance
telephone calls, in the latter case such notification to
include: (a) the name of the business entity; (b) the
address and telephone number of the business entity; (c)
the names of the business entity’s officers,
directors, principals and managers; and (d) a summary
description of the business entity’s intended
activities; and
C. Each respondent shall designate its counsel as
authorized to accept service of all documents related to
this Order.
VI.
IT IS FURTHER ORDERED that each respondent shall not
provide or distribute to any person, except for a court,
counsel for the respondents, counsel’s consultants,
agents of the Commission or other law enforcement
authorities, or others as ordered by a court of competent
jurisdiction, copies of “David.exe” or
“david7.exe” or any substantially similar
software.
VII.
IT IS FURTHER ORDERED that for a period of three years
after the date of entry of this Order, each respondent
shall in connection with any business using the Internet
to place international long distance telephone calls:
A. Provide a copy of this Order once to, and obtain a
signed and dated acknowledgment of receipt of the same
from, each affiliate, subsidiary, division, sales entity,
successor, officer, director, shareholder, employee,
agent or representative of such respondent; and
B. Maintain, and upon reasonable notice make available
to representatives of the Commission, the original and
dated acknowledgments of the receipts of copies of this
Order required by Section VIIA above.
VIII.
IT IS FURTHER ORDERED that where required by this
Order, written notice to:
A. The Commission shall be effected by serving papers,
by personal delivery or certified mail, addressed to:
Associate Director, Federal Trade Commission, Division of
Marketing Practices, Sixth Street and Pennsylvania
Avenue, N.W., Room 238, Washington, DC 20580; and
B. The respondents shall be effected by serving
papers, by personal delivery or certified mail, addressed
to: Joel R. Dichter, Klein, Zelman, Rothermel &
Dichter, L.L.P., 485 Madison Avenue, New York, NY 10022.
IX.
IT IS FURTHER ORDERED that each respondent shall,
within 180 days after the date of entry to this Order,
file with the Commission a report, in writing, setting
forth the manner and form of compliance with this Order.
X.
IT IS FURTHER ORDERED that, to the extent that this
Order may conflict with any federal law or regulation
which is later enacted or amended, such law and not this
Order shall apply where such a conflict exists. For the
purposes of this Order, a conflict exists if the
conduct prohibited by this Order is required by such
federal law or if conduct required by this Order is
prohibited by such federal law.
Signed this _________ day of October, 1997
BEYLEN TELECOM, LTD.
- By:________________________________
- Peter Noble, President
-
- Address:
- Genesis Building
P.O. Box 2097
Grand Cayman, Cayman Islands
British West Indies
NITELINE MEDIA, INC./RON TAN
- By:________________________________
- Ron Tan, individually and in his
capacity as an officer of NiteLine Media, Inc.
-
- Address:
- 1355 East 92nd Street
Brooklyn, NY 11236
-
- By: ___________________________________
- Joel R. Dichter, Esq.
Attorney for Beylen Telecom, Ltd.,
NiteLine Media, Inc. and Ron Tan
-
- Address:
- Klein, Zelman, Rothermel,
& Dichter, L.L.P.
485 Madison Avenue
New York, NY 10022
-
- By: ___________________________________
- Paul H. Luehr, Esq.
Attorney for the Federal Trade Commission
-
- Address:
- Federal Trade Commission
6th & Pennsylvania Ave., NW
Washington, DC 20580
Approved:
- By: _________________________________
- Eileen Harrington, Esq.
Associate Director
Division of Marketing Practices
-
- By: _________________________________
- Joan Z. Bernstein, Director
Bureau of Consumer Protection
Attachment A
List of Moldova Phone Numbers
373-955-1100
373-955-1111
373-955-1200
373-955-1300
373-955-1400
373-955-1500
373-955-1600
373-955-2000
373-955-2010
373-955-2020
373-955-2030
373-955-2222
373-955-2400
373-955-2401
373-955-2402
373-955-2403
373-955-2404
373-955-2405
373-955-2406
373-955-2407
373-955-2408
373-955-2409
373-955-2410
373-955-2411
373-955-2419
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