Click here for Microsoft Word Version
******************************************************** 
                      NOTICE
********************************************************

This document was converted from
WordPerfect or Word to ASCII Text format.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

If you need the complete document, download the
Word or WordPerfect version or Adobe Acrobat version (above).

*****************************************************************




                           Before the
                Federal Communications Commission
                     Washington, D.C. 20554


In the Matter of                 )
                                )
SBC Communications Inc.          )    File No. EB-00-IH-0326a
                                )
Apparent      Liability      for )    NAL/Acct. No. 200132080015
Forfeiture


                       ORDER OF FORFEITURE 

   Adopted:  May 23, 2001               Released:  May 24, 2001

By the Chief, Enforcement Bureau:

                        I.   INTRODUCTION

In this Forfeiture Order, we  find that SBC Communications,  Inc. 
(SBC) willfully and repeatedly violated section 51.321(h) of  the 
Commission's rules, requiring  incumbent local exchange  carriers 
(ILECs) promptly to post notice of premises that have run out  of 
collocation space.1  These violations were discovered through  an 
independent audit  of  SBC's  compliance  with  the  Commission's 
collocation  rules,  in  which  Ernst  &  Young  found   material 
instances of noncompliance with the  posting rule.  Based on  the 
facts and  circumstances before  us and  after considering  SBC's 
responses to  our  Notice of  Apparent  Liability (NAL)  in  this 
matter, we  conclude  that SBC  is  liable for  a  forfeiture  of 
ninety-four thousand,  five  hundred  dollars  ($94,500.00),  the 
amount proposed in the NAL.

                         II.  BACKGROUND

In the  NAL,  we  found  that  SBC  apparently  violated  section 
51.321(h)  of  the  Commission's   rules,  which  states:   ``The 
incumbent LEC must maintain a publicly available document, posted 
for viewing on the incumbent LEC's public[]ly available  Internet 
site, indicating all  [collocation] premises that  are full,  and 
must update such a document within ten days of the date at  which 
a premises runs out of  physical collocation space.''2  We  found 
that SBC was apparently liable for a forfeiture of $94,500.00.3

In its February 20, 2001 Response  to the NAL, SBC contested  the 
Bureau's finding of apparent liability on the bases that: (1) the 
NAL failed  to specify  the  alleged violations  and,  therefore, 
deprived SBC of  a meaningful opportunity  to respond; (2)  SBC's 
few admitted posting  lapses were  not willful; and  (3) the  NAL 
failed to explain the  forfeiture amount assessed.4  In  response 
to SBC's  first claim,  on March  9, 2001,  the Bureau  issued  a 
confidential letter to SBC's outside counsel explaining that  the 
NAL omitted the details of the alleged violations because SBC had 
requested confidential treatment of its submissions to the Bureau 
detailing the nature and scope of its violations.5  The  Bureau's 
letter  detailed  the  number  and  locations  of  the   apparent 
violations, and provided SBC with an additional 30 days in  which 
it could file a supplemental response to the NAL.6  

On April 9, 2001, SBC filed its Supplemental Response to the  NAL 
claiming that the Bureau's NAL  is ``badly flawed'' on the  bases 
that: (1) the Bureau failed  to explain the rationale behind  its 
proposed  forfeiture;  (2)  SBC's  office-closing  and  Internet-
posting policy  is  pro-competitive  and  fully  consistent  with 
Commission policy  and  rules;  (3)  SBC  has  not  ``willfully'' 
disregarded  its   office-closing  and   Internet-posting   legal 
obligations; (4) three of the apparent violations are barred from 
forfeiture by the  statute of limitations;  and (5) the  Bureau's 
proposed forfeiture assessment  is unexplained, unjustified,  and 
arbitrary.  As explained  below, we  are not  persuaded by  SBC's 
arguments.

                       III.    DISCUSSION

     II.A.     Specificity of Allegations

The initial issue raised by SBC in its Response was that the  NAL 
failed to specify the  alleged violations and therefore  deprived 
SBC of a meaningful opportunity to respond.7  As noted above, the 
Bureau issued  a confidential  letter  to SBC's  outside  counsel 
detailing both the number of apparent violations, and the central 
offices where each apparent violation occurred.8  We believe that 
this letter fully responded  to SBC's concern  and note that  SBC 
did not raise this issue again in its Supplemental Response. 

     II.B.     Appropriateness  of   SBC's  Collocation   Posting 
          Policy

SBC's policy is  to post  notice of  exhausted collocation  space 
only when it determines exhaustion has occurred, ``[a]s a general 
matter .  . .  pursuant to  the  denial or  partial denial  of  a 
collocation application,  though  it  sometimes is  made  in  the 
course of approving such an application or conducting an internal 
floor space assessment.''9  SBC  asserts that, to its  knowledge, 
all other ILECs determine the appropriate time at which they must 
post collocation space exhaustion using roughly the same criteria 
as SBC.10  SBC's  policy of  posting only  once it  has denied  a 
collocation application conflicts with the plain language of  the 
collocation posting  rule.   Section 51.321(h)  requires  posting 
``within ten days  of the date  at which a  premises runs out  of 
physical collocation space.''11   SBC's denial  of a  collocation 
application is not the event that causes a premise to run out  of 
space.  Indeed, the denial makes  clear that the premise  already 
had run out  of space.  Moreover,  SBC's approach conflicts  with 
the stated purposes of the rule, to ``allow competitors to  avoid 
expending significant resources in applying for collocation space 
in an incumbent  LEC's premises where  no such space  exists.''12  
By waiting until it denies  an application, SBC in each  instance 
causes at least one competitive local exchange carrier (CLEC)  to 
waste time and resources on an application.     

In arguing against the  plain language of  the rule, SBC  asserts 
that in  adopting the  posting rule,  the Commission  ``expressly 
stated that it was `adopt[ing] the proposal of Sprint''' and that 
``Sprint . . . suggested  the Internet-posting requirement as  an 
additional reporting requirement that would also be triggered  by 
the denial of a collocation application.''13  We find nothing  in 
Sprint's comments to support this statement.  Sprint merely urged 
that ``ILECs be required simply  to maintain a current,  publicly 
available list of offices where  no space is available.''14   The 
fact that Sprint specifies that  the Internet document should  be 
``current'' suggests,  contrary  to SBC's  argument,  that  ILECs 
would have to  keep track  of current  space availability,  which 
would obviously be affected by each use or reservation of space. 

SBC also  asserts that  the Commission's  Regulatory  Flexibility 
Analysis in the Advanced Services Order ``casts further doubt  on 
the  existence  of''  a  requirement  that  ILECs  monitor  their 
collocation  floor  space  after   each  space  reservation   and 
equipment installation.15  SBC quotes the Commission's  statement 
that the burden of the Internet-posting requirement on ILECs ``is 
minimal, because an Internet site is easy and cheap to  maintain, 
and all [the  ILECs] are  doing is  making available  information 
that they already know  themselves.''16  SBC argues that  keeping 
track of space availability in every office cannot be  considered 
``minimal.''17  We  disagree.  The  Internet-posting  requirement 
simply requires that ILECs  make publicly accessible  information 
about the availability of collocation space in offices that  they 
occupy on a daily basis.  Accordingly, we reject SBC's  assertion 
that  the  Bureau's  interpretation  of  the  collocation   space 
exhaustion posting  requirement conflicts  with the  Commission's 
Regulatory Flexibility Analysis of its Advanced Services Order.  

Similarly, we  reject SBC's  argument  that the  Commission  must 
obtain additional approval from the U.S. Office of Management and 
Budget under  the Paperwork  Reduction  Act before  imposing  the 
collocation space exhaustion posting requirement on ILECs.18  The 
Commission has already obtained  such approval.19  The fact  that 
SBC claims not to  have realized the rule  meant what it said  is 
not a basis for requiring re-approval.  

In its Supplemental Response, SBC alleges that the Bureau  failed 
to  explain  the  rationale   behind  its  finding  of   apparent 
violations.20  We disagree.  As explained  above and in the  NAL, 
SBC failed to post notices of space exhaustion within 10 days  of 
the event that  actually caused the  space to become  unavailable 
for collocation.  We  note that in  SBC's pending application  to 
the Commission to provide long distance service in Missouri,  SBC 
proposed to modify its posting policy  so as to post notice of  a 
central office closing within 10 days of a collocation request or 
space assignment that would exhaust the collocation space at that 
central office.21  This approach would bring SBC into  compliance 
with the rule.

     II.C.     Willfulness Standard

In both its initial  and supplemental responses  to the NAL,  SBC 
contends that  any  violations  of  section  51.321(h)  were  not 
``willful.''22 Pointing to the Commission's statement in  Midwest 
Radio-Television that ``the policy factor which has been the main 
key to our actions'' in  the forfeiture area is ``a  demonstrated 
lack of concern or indifference on  the part of the licensee  for 
compliance with the Act or  our Rules,''23  SBC asserts that  the 
NAL has failed  to establish that  any noncompliance was  willful 
because the  Bureau has  not demonstrated  a lack  of concern  or 
indifference for compliance on  SBC's part.24  Even assuming  the 
continuing validity  of  Midwest Radio-Television,  in  light  of 
decades of subsequent Commission case law, SBC's argument has  no 
merit. The violations upon which the Bureau relied in issuing its 
NAL are not consistent with  SBC's description of its  compliance 
with the Commission's collocation requirements as ``characterized 
by extreme  care  and meticulousness.''25  Rather,  SBC  violated 
these rules in numerous instances during the audit period.26   It 
has  long  been  established  that  the  word  ``willfully,''  as 
employed in  section  503(b)  of  the Act,  does  not  require  a 
demonstration that a party knew it was acting unlawfully. Section 
503(b) requires only  a finding that  SBC knew it  was doing  the 
acts in question and that the acts were not accidental.27 

SBC  further  contends  in  its  Supplemental  Response  that   a 
``willful''  violation   must  be   predicated  on   a   standard 
``sufficient to  put  [the  licensee]  on  notice.''28   In  this 
regard, SBC states that (1) the Bureau's standard is unclear; and 
(2) it is ``SBC's collocation [space exhaustion posting] policy - 
not  the  Bureau's  -  that  is  followed  by  the  entire   ILEC 
industry,'' and that the practice of the ILECs must by definition 
be legal if they all act the same way.29  We reject both of these 
assertions.

First, as  explained  above,  the  collocation  space  exhaustion 
posting requirement is clear on its face.  Second, we find  SBC's 
assertions about the practices of  other ILECs to be  irrelevant.  
Because, as stated above, we find that SBC's policy clearly  does 
not satisfy the  posting requirement, the  purported behavior  of 
other companies cannot legitimize SBC's noncompliance.  In  light 
of SBC's  statement regarding  apparent non-compliance  by  other 
ILECs,  we  will,   however,  consider  undertaking   appropriate 
investigations and taking appropriate enforcement action.

     D.Forfeiture Amount

 SBC  contends  that  the  proposed  forfeiture  is  unexplained, 
unjustified and  arbitrary.30  SBC  argues  that the  Bureau  (1) 
failed to explain  its proposed forfeiture  amount of  $94,500;31 
(2) failed to identify the  number of violations at issue;32  and 
(3) failed  to provide  the  base forfeiture  amount it  used  in 
determining the total forfeiture  amount.33  Further, SBC  argues 
that the  Bureau  is  required  to  examine  downward  adjustment 
factors in determining a forfeiture  amount.34  To that end,  SBC 
argues that its performance in providing collocation arrangements 
to CLECs has  been ``outstanding'';  that its  overall record  of 
compliance with the Commission's  collocation and other rules  is 
``outstanding''; that  no competitor  or consumer  was harmed  by 
SBC's posting policy; and that SBC has ``operated in good faith'' 
in  dealing  with  the  Bureau  on  this  matter  and  has   made 
``voluntary disclosure'' of  the information relied  upon by  the 
Bureau in  its determination  of  a proposed  forfeiture.35   SBC 
further argues  that  its  willingness to  modify  its  ``office-
closing  and  Internet-posting  policy''  should  be  taken  into 
account by the Bureau in considering a downward adjustment.36 

We believe the  Bureau's March  9, 2001 letter  to SBC's  outside 
counsel sufficiently  explains  the proposed  forfeiture  amount, 
identifies the number  of violations at  issue, and provides  the 
base  forfeiture  amount.37    Because  of   SBC's  request   for 
confidential treatment, these  matters were not  described in  as 
much detail in the NAL as  is typically the case.  We reject  all 
of SBC's arguments for adjusting downward the proposed forfeiture 
amount.  SBC's  argument  that  its  collocation  performance  in 
general is  ``outstanding'' does  not mitigate  SBC's failure  to 
comply  specifically  with  the  Commission's  collocation  space 
exhaustion posting rule.  Moreover, we note that this is not  the 
only recent instance in which SBC has been found in violation  of 
FCC rules.38   Further, SBC's  assertion  that no  competitor  or 
consumer was  harmed  by  its posting  policy  likely  is  false.  
Information submitted to the Bureau by SBC strongly suggests that 
several CLECs applied  for collocation  space from  SBC where  no 
such space remained, and  were accordingly denied collocation  by 
SBC.39  Had SBC complied with the Commission's collocation  space 
exhaustion posting  rule,  such  denials likely  would  not  have 
occurred as the CLECs would have  been on notice as to the  space 
exhaustion and would not have applied  for space or had to  incur 
the related costs of such applications.    

The Bureau is not  persuaded to reduce  the forfeiture amount  by 
SBC's arguments that it  ``voluntarily'' disclosed to the  Bureau 
information that  the  Bureau  relied  upon  in  determining  its 
proposed forfeiture, and that it is willing to revise its posting 
policy.  First, the Bureau first learned of SBC's violations from 
an audit report that SBC  was required to file.40  Moreover,  SBC 
was  legally  bound  to   respond  to  the  Bureau's   subsequent 
inquiries.41  Thus, there was  no voluntary disclosure.   Second, 
SBC's willingness  to revise  its policy  after an  NAL has  been 
issued  provides  no  basis  to  adjust  downward  the   proposed 
forfeiture amount.  We give no weight to SBC's promise to  comply 
with its existing obligation.   

     17.  Furthermore, we disagree with SBC's contention that the 
Bureau  failed  to  comply   with  the  Commission's   forfeiture 
guidelines by not explaining  in its NAL whether  it used a  base 
forfeiture amount, and how,  if at all, it  adjusted such a  base 
amount.42  In its March 9, 2001 letter to SBC's outside  counsel, 
the Bureau provided the  number of violations  at issue, and  the 
amount it proposed  to assess per  violation.43  As explained  in 
the NAL,  the  Bureau  considered  ``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''  in   determining   the  forfeiture   amount.44    This 
forfeiture amount is  justified here  in light of  the number  of 
SBC's violations and the possible competitive harm caused by  the 
violations.45

     II.D.     Statute of Limitations

     18.  In its supplemental response, SBC contends that posting 
violations at three of the central offices the Bureau relied upon 
in determining apparent violations for its NAL are barred by  the 
Commission's one-year statute of limitations.46  SBC argues  that 
because the NAL did  not specify the  central offices upon  which 
the Bureau relied in determining its proposed forfeiture, the NAL 
was ``insufficient to place SBC  on notice'' with respect to  the 
apparent violations at issue - other than the three instances SBC 
had identified in prior submissions.47  SBC states that it  first 
was put on proper notice of  the apparent violations on March  9, 
2001, the date on which  the Bureau issued a confidential  letter 
to SBC's outside counsel setting forth the number and location of 
the violations upon  which the Bureau  relied in determining  its 
proposed forfeiture.48   As  explained  above, the  NAL  did  not 
specify the apparent violations because SBC itself had  requested 
confidential treatment  of all  information it  submitted to  the 
Bureau in conjunction with this proceeding.

     19.  We reject SBC's statue of limitations argument on two 
grounds: (1) the very reason the NAL did not specify the 
violations at issue was that SBC itself had requested 
confidential treatment of that information; and (2) SBC's 
Supplemental Response - filed thirty days after SBC's receipt of 
the Bureau's March 9, 2001 letter detailing the violations - does 
not defend substantively any specific instances of apparent 
violations, thereby indicating that the specific details provided 
in the Bureau letter were not needed by SBC to respond 
effectively to the NAL.

                   III.      ORDERING CLAUSES

     20.  ACCORDINGLY, IT IS  ORDERED that,  pursuant to  section 
503(b) of  the  Act, 49  and  section 1.80  of  the  Commission's 
Rules,50 SBC Communications  SHALL FORFEIT to  the United  States 
Government the sum of ninety-four thousand, five hundred  dollars 
($94,500.00)  for   willfully   and  repeatedly   violating   the 
Commission's rule  requiring ILECs  promptly  to post  notice  of 
premises that have run out of collocation space. 

     21.  IT IS FURTHER ORDERED that payment shall be made in the 
manner provided for  in section  1.80 of  the Commission's  rules 
within 30 days of  release of this order.   If the forfeiture  is 
not paid within the period  specified, the case will be  referred 
to the Department of Justice  for collection pursuant to  section 
504(a) of the Act. 

     22.  IT IS  FURTHER ORDERED  that a  copy of  this Order  of 
Forfeiture  shall  be  sent  by  Certified  Mail/Return   Receipt 
Requested to  SBC  Communications,  c/o Sandra  L.  Wagner,  Vice 
President-Federal Regulatory, 1401  I Street,  N.W., Suite  1100, 
Washington, D.C. 20005.



                    FEDERAL COMMUNICATIONS COMMISSION



                    David H. Solomon
                    Chief, Enforcement Bureau

_________________________

1    47 C.F.R.  51.321(h).
2    See SBC Communications, Inc., Notice of Apparent  Liability 
for Forfeiture, DA 01-128  (Jan. 18, 2001)  (NAL).  47 C.F.R.   
51.321(h).    

3    NAL at  1, 9.

4    See February 20, 2001  Response of SBC Communications  Inc. 
to Notice of Apparent Liability for Forfeiture (Response).

5    See March  9, 2001  Letter from  David H.  Solomon,  Chief, 
Federal Communications Commission Enforcement Bureau, to Michael 
K. Kellogg, Counsel for SBC Communications, Inc. (March 9,  2001 
Solomon Letter).

6    Id.

7    Response at 12 - 14.

8    See March 9, 2001 Solomon Letter.

9    Response at 3; see also April 9, 2001 Supplemental Response 
of SBC Communications Inc. to  Notice of Apparent Liability  for 
Forfeiture at 4 (Supplemental Response); see also August 7, 2000 
Report of Management  on Compliance with  the FCC's  Collocation 
Rules at 3, 4.

10   Supplemental Response at 13.

11   47 C.F.R.  51.321(h).

12   See In  the  Matter  of  Deployment  of  Wireline  Services 
Offering Advanced Telecommunications  Capability, CC Docket  No. 
98-147, First Report  and Order and  Further Notice of  Proposed 
Rulemaking, 14 FCC Rcd 4761, 4793 (Advanced Services Order).

13   Supplemental Response at 13 (emphasis added).

14   See Sprint comments at 18 (emphasis added).

15   Supplemental Response at 14.

16   Supplemental Response at 14  (citing the Advanced  Services 
Order at App. C,  18).

17   Supplemental Response at 14.

18   Supplemental Response at 15.

19   OMB No. 3060-0848.

20   Supplemental Response at 3.

21   See Application  by SBC  Communications Inc.,  Southwestern 
Bell Telephone  Company,  and Southwestern  Bell  Communications 
Services,  Inc.  d/b/a  Southwestern  Bell  Long  Distance   for 
Provision of  In-Region,  InterLATA  Services  in  Missouri,  CC 
Docket No. 01-88 (filed  April 4, 2001),  Appendix A, Volume  1, 
Tab 5 at p. 10.

22   Response at 15 - 18; Supplemental Response at 16, 17.

23   See Midwest Radio-Television  Inc., Memorandum Opinion  and 
Order, 45 FCC 1137, 1141 (1963).

24   Response at 15 - 17.  

25   Response at 15.

26   See January 9,  2001 Letter  from Sandra  L. Wagner,  Vice-
President, SBC Telecommunications, Inc.,  to Brad Berry,  Deputy 
Chief, Federal  Communications  Commission  Enforcement  Bureau, 
Exhibit A (January 9, 2001 Wagner Letter).

27   E.g.,  ConQuest   Operator   Services   Corp.,   Order   of 
Forfeiture, FCC  99-194, at    15 n.41  (rel. July  26,  1999); 
Target Telecom., Inc.,  Order of  Forfeiture, 13  FCC Rcd  4456, 
4458 (1998);  Southern California  Broadcasting Co.,  Memorandum 
Opinion and Order, 6 FCC Rcd 4387, 4387-88 (1991).  

28   Supplemental Response at  16 (citing Cedar  Constr. Co.  v. 
OSHRC, 587 F.2d 1303, 1306 (D.C. Cir. 1978)). 

29   Supplemental Response at 17.

30   See Response at 19, 20;  see also Supplemental Response  at 
17, 18.

31   Response at 19. 

32   Id.

33   Response at 19; Supplemental Response at 17, 18.

34   Response at 19, 20; Supplemental Response at 18. 

35   Id. 

36   Supplemental Response at 18.

37   See March 9, 2001 Solomon Letter.

38   See, e.g., SBC Communications,  Inc., Order of  Forfeiture, 
DA 01-680, (March 15, 2001);  C.F. Communications Corp., et  al. 
v. Century  Telephone of  Wisconsin, Inc.,  et. al.,  Memorandum 
Opinion and  Order on  Remand, 15  FCC Rcd  8759 (2000),  appeal 
pending, Bell Atlantic, et  al. v. FCC,  No. 00-1207 (D.C.  Cir. 
filed May 15, 2000);  AT&T Corp., MCI Telecommunications  Corp., 
et al. v. Bell Atlantic-Pennsylvania, et al., Memorandum Opinion 
and Order, 14 FCC Rcd 556 (1998); recon. denied 15 FCC Rcd  7467 
(2000); review  denied 15  FCC Rcd  16,124 (2000);  Southwestern 
Bell  Telephone   Co.,   Memorandum   Opinion   and   Order   on 
Reconsideration,  13   FCC   Rcd   6964   (1998);   AT&T   Corp. 
International Telecharge  v.  Southwestern Bell  Telephone  Co., 
Memorandum Opinion and Order, 11 FCC Rcd 10061 (1996).

39   See January 9, 2001 Wagner Letter, Exhibit A.

40   See Applications of  Ameritech Corp.,  Transferor, and  SBC 
Communications,  Inc.,  Transferee,  For  Consent  to   Transfer 
Control of Corporations  Holding Commission  Licenses and  Lines 
Pursuant to Sections  214 and 310(d)  of the Communications  Act 
and Parts 5, 22, 24, 25, 63, 90, 95, and 101 of the Commission's 
Rules, CC Docket  98-141, Memorandum Opinion  and Order, 14  FCC 
Rcd 14712 at  387, Appendix C at  40 (1999).

41   Sections 4(i), 218,  and 403 of  the Communications Act  of 
1934, as amended, provide the Commission with broad authority to 
make reasonable  inquires  of  the carriers  it  regulates.   47 
U.S.C.  4(i), 218, 403.

42   Response at 19; Supplemental Response at 17, 18.

43   See March 9, 2001 Solomon Letter.

44   NAL at    9.   47  U.S.C.   503(b)(2)(D);  see  also  The 
Commission's  Forfeiture  Policy  Statement  and  Amendment   of 
Section  1.80  of  the  Rules  to  Incorporate  the   Forfeiture 
Guidelines, 12 FCC Rcd 17087, 17100 (1997); recon. denied 15 FCC 
Rcd 303 (1999); 47 C.F.R.  1.80(b)(4). 

45   NAL at  6.

46   Supplemental Response at 17 (citing 47 U.S.C.  503(b)(6)). 

47   Supplemental Response at 17.

48   Id.

49   47 U.S.C.  503(b).

50   47 C.F.R.  1.80.