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                           Before the
                FEDERAL COMMUNICATIONS COMMISSION
                     Washington, D.C. 20554

In the Matter of                     )                             
)    File No. EB-01-IH-0642
SBC Communications, Inc.             )  
                                )  NAL/Acct. No. 200232080001
Apparent Liability for Forfeiture         )
                         
          
           NOTICE OF APPARENT LIABILITY FOR FORFEITURE

Adopted:  November 1, 2001                   Released:  November 
2, 2001 

By the Chief, Enforcement Bureau:

                        I.   INTRODUCTION
 
     1.   In this  Notice of  Apparent Liability  for  Forfeiture 
(``NAL''), we find  that SBC Communications,  Inc. (``SBC'')  has 
apparently violated an Enforcement Bureau order that SBC submit a 
sworn written response,  not later  than October 22,  2001, to  a 
Bureau inquiry conducted  pursuant to its  authority provided  by 
the Communications  Act of  1934, as  amended.1  Based  upon  our 
review of the facts and circumstances surrounding this matter, we 
find that SBC is apparently liable for a forfeiture in the amount 
of one hundred thousand dollars ($100,000).

                         II.  BACKGROUND

     2.   On September 29, 2000, the Enforcement Bureau sent  SBC 
a letter of  inquiry (``LOI'')  ordering SBC  to provide  digital 
subscriber line (``DSL'') provisioning  and maintenance data  for 
its  affiliated  Internet  service  provider  (``ISP'')  and  for 
unaffiliated ISPs.2  The  Bureau sent  this LOI  pursuant to  its 
investigation  into  whether  SBC   was  discriminating  in   its 
provisioning and  maintenance  of  DSL.   SBC  indicated  in  its 
response to that LOI,3 and in affidavits provided on December  5, 
2000,4 that it was unable  to supply the information.  The  major 
impediment identified  by SBC  was  that it  ``has no  method  to 
identify or separate  ISPs from any  other [DSL]  customer[s],''5 
and that ``[t]herefore, a comparison  of SBC's ISPs to all  other 
ISPs is not possible.''6

     3.   On  April  30,  2001,  SBC  filed  comments  with   the 
       Commission  in  an  unrelated  rulemaking  proceeding,  in 
       which it stated  that ``SBC has generated data that  shows 
       that  SBC's  affiliated  Internet  ISPs  and  unaffiliated 
       Internet ISPs  received comparable treatment with  respect 
       to [DSL]  provisioning and  maintenance.''7  SBC  attached 
       the referenced data to its comments.8 

     4.   On October 1,  2001, the Bureau  issued a  supplemental 
       LOI to SBC  ordering the company to describe, among  other 
       things,  the  facts  and  circumstances  surrounding   the 
       discrepancy  between  SBC's  statements  in  October   and 
       December 2000 that it could not provide the requested  DSL 
       data, and  SBC's statement in its  April 2001 filing  that 
       it had such data available.9  The Bureau, in two  separate 
       paragraphs  of  its  supplemental  LOI,  directed  SBC  to 
       submit a ``sworn written response'' to the LOI.10

     5.   On October 22, 2001, SBC submitted its response to  the 
       Bureau,11 which  failed to include  a sworn statement,  as 
       ordered by the Bureau in its October 1, 2001 LOI.12 

     6.   On October 29, 2001, Enforcement Bureau staff contacted 
SBC regarding the company's omission of a sworn statement in  its 
October 22, 2001 response.  SBC  orally stated to the staff  that 
the company's  failure to  submit a  sworn statement  was not  an 
oversight; rather, it was intentional.

                      III.      DISCUSSION
 
     7.   Under section  503(b) of  the Act,  any person  who  is 
determined by  the Commission  to  have willfully  or  repeatedly 
failed to comply with  any of the provisions  of the Act, or  any 
rule or order issued  by the Commission under  the Act, shall  be 
liable for a  forfeiture penalty.13   In order to  impose such  a 
forfeiture  penalty,  the  Commission  must  issue  a  notice  of 
apparent liability, the notice must  be received, and the  person 
against whom the notice has been issued must have an  opportunity 
to show, in  writing, why  no such forfeiture  penalty should  be 
imposed.14  The Commission  will then  issue a  forfeiture if  it 
finds by  a preponderance  of the  evidence that  the person  has 
violated the Act or a Commission rule.15  Based on the facts  set 
forth above,  we  find  that  SBC  is  apparently  liable  for  a 
forfeiture for willful violation of  the Bureau's order that  SBC 
submit a sworn written response  to the Bureau's October 1,  2001 
LOI.  The term ``willful''  means that the  violator knew it  was 
taking the  action in  question, irrespective  of any  intent  to 
violate the Commission's rules.16 

     8.   Section  503(b)(2)(B)   of  the   Act  authorizes   the 
Commission to  assess a  forfeiture of  up to  $120,000 for  each 
violation, or  each  day  of  a continuing  violation,  up  to  a 
statutory maximum of $1,200,000  for a single  act or failure  to 
act.17  In  determining  the appropriate  forfeiture  amount,  we 
consider the factors  enumerated in section  503(b)(2)(D) 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.''18  

     9.   Section  1.80  of  the   Commission's  rules  and   the 
       Commission's Forfeiture Policy Statement establish a  base 
       forfeiture amount of  $3,000 for failure to file  required 
       forms or information.19   The circumstances of this  case, 
       however, appear to justify a substantial increase to  this 
       base  amount   pursuant  to  upward  adjustment   criteria 
       contained  in   the  rules  and   the  Forfeiture   Policy 
       Statement.   Specifically,   three  factors  warrant   the 
       adjustment.   First,  the  misconduct  appears  egregious.  
       Second, the violation was apparently intentional.   Third, 
       the  forfeiture amount  must be  high  enough to  serve  a 
       deterrent effect in view of SBC's ability to pay.20 

     10.  We consider SBC's conduct in this case to be  egregious 
       because its failure to submit a sworn written response  to 
       the Bureau hinders  the Bureau's investigation into  SBC's 
       possible  discrimination in  provisioning and  maintenance 
       of DSL  - a  technology vital  to competition  in the  ISP 
       marketplace.  Moreover, SBC's decision not to provide  the 
       requisite  sworn  statement here  obstructs  the  Bureau's 
       investigation   into  discrepancies   in   SBC's   various 
       representations to the Commission.  SBC's conduct  strikes 
       at  the  core  of the  Bureau's  ability  to  perform  its 
       function, and rises above the level of a mere omission  or 
       failure   to   file.    Therefore,   substantial    upward 
       adjustment   of   the  proposed   forfeiture   amount   is 
       warranted.   The fact  that SBC  apparently  intentionally 
       violated  the order  provides an  additional basis  for  a 
       substantial upward adjustment.  

     11.  Finally, SBC's  ability  to  pay  warrants  an  upward-
       adjusted  forfeiture amount  to serve  as a  deterrent  to 
       future misconduct.   In the  Forfeiture Policy  Statement, 
       the Commission  made it clear  that companies with  higher 
       revenues, such as  SBC,21 could expect higher  forfeitures 
       than those reflected in the base amounts: 

     [O]n  the  other  end  of  the  spectrum  of  potential 
     violations, we  recognize  that  for  large  or  highly 
     profitable communication entities, the base  forfeiture 
     amounts . . .  are generally low.   In this regard,  we 
     are  mindful  that,  as  Congress  has  stated,  for  a 
     forfeiture to be an  effective deterrent against  these 
     entities, the forfeiture must be issued at a high level 
     . .  . For  this reason,  we caution  all entities  and 
     individuals that,  independent  from the  uniform  base 
     forfeiture amounts  .  .  ., we  intend  to  take  into 
     account the  subsequent violator's  ability to  pay  in 
     determining the  amount of  a forfeiture  to  guarantee 
     that  forfeitures  issued   against  large  or   highly 
     profitable  entities  are  not  considered  merely   an 
     affordable cost  of  doing  business.   Such  large  or 
     highly profitable entities should expect in this regard 
     that the  forfeiture  amount set  out  in a  Notice  of 
     Apparent Liability against  them may in  many cases  be 
     above, or even well above, the relevant base amount.22 

     12.  Based on these factors and the particular circumstances 
of this  case,  we find  that  SBC  is apparently  liable  for  a 
forfeiture in  the amount  of  $100,000.  The  egregiousness  and 
intentional nature of SBC's misconduct, as well as SBC's  ability 
to pay, considered  in conjunction with  the deterrent effect  of 
the forfeiture, dictate that SBC be held apparently liable for an 
amount significantly higher than  the base forfeiture amount  set 
for the relevant misconduct.

                    IV.  ORDERING CLAUSES
 
 13.    ACCORDINGLY,  IT IS  ORDERED THAT,  pursuant to  section 
  503(b)  of the  Act,23 and  section  1.80 of  the  Commission's 
  Rules,24 SBC Communications is HEREBY NOTIFIED of its  APPARENT 
  LIABILITY FOR FORFEITURE in the amount of one hundred  thousand 
  dollars  ($100,000)  for  willfully  violating  an  Enforcement 
  Bureau directive to  submit timely a sworn written response  to 
  a Bureau letter of inquiry.25

     14.  IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of 
          the Commission's Rules, within thirty (30) days of  the 
          release date of this NOTICE OF APPARENT LIABILITY,  SBC 
          Communications SHALL PAY to the United States the  full 
          amount of  the  proposed  forfeiture OR  SHALL  FILE  a 
          written statement showing  why the proposed  forfeiture 
          should not be imposed or should be reduced.

     15.  IT IS AGAIN  ORDERED THAT SBC  SHALL SUBMIT, not  later 
than November 7, 2001, a  sworn written response to the  Bureau's 
LOI dated  October  1,  2001, in  accordance  with  the  delivery 
instructions set forth therein.

     16.  Payment of the forfeiture amount may be made by mailing 
a check  or  similar instrument,  payable  to the  order  of  the 
Federal Communications Commission,  to the Forfeiture  Collection 
Section, Finance Branch, Federal Communications Commission,  P.O. 
Box 73482, Chicago, Illinois 60673-7482.  The payment should note 
the ``NAL/Acct. No.'' referenced above.

     17.       The response, if any, must be mailed to Charles W. 
Kelley, Chief, Investigations and Hearings Division,  Enforcement 
Bureau, Federal Communications Commission, 445 12th Street  S.W., 
Room 3-B443,  Washington,  D.C.,  20554,  and  must  include  the 
``NAL/Acct. No.'' referenced above.

     18.       IT IS FURTHER ORDERED that  a copy of this  Notice 
of Apparent  Liability shall  be  sent by  Certified  Mail/Return 
Receipt Requested to SBC Communications, c/o Caryn D. Moir, 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 U.S.C.  4(i), 4(j), 218, 403.
2    See Sept. 29, 2000 Letter from Charles W. Kelley, Chief, 
Investigations and Hearings Division, Enforcement Bureau, Federal 
Communications Commission to Christine Jines, Executive Director 
- Federal Regulatory, SBC Telecommunications, Inc.
3    See Oct. 19, 2000 Letter from Christine Jines, Executive 
Director - Federal Regulatory, SBC Telecommunications, Inc. to 
Charles W. Kelley, Chief, Investigations and Hearings Division, 
Enforcement Bureau, Federal Communications Commission.
4    See Dec. 5, 2000 Letter from Priscilla Hill-Ardoin, Senior 
Vice President, SBC Telecommunications, Inc. to Brad Berry, 
Deputy Chief, Enforcement Bureau, Federal Communications 
Commission (``SBC's Dec. 5, 2000 Affidavits'').
5    See SBC's Dec. 5, 2000 Affidavits, Hill-Ardoin Affidavit at 
para. 9.
6    Id. at para. 10; see also SBC's Dec. 5, 2000 Affidavits, 
Taylor Affidavit at para. 4 (``SBC is unable to identify the 
universe of ISP customers'').
7    See Computer III Further Remand Proceedings, Bell Operating 
Company Provision of Enhanced Services, CC Dkt No. 95-20; 1998 
Biennial Regulatory Review - Review of Computer III ONA 
Safeguards and Requirements, CC Dkt No. 98-10, Further Reply 
Comments of SBC Communications Inc., Apr. 30, 2001 at 15 (``SBC's 
Further Reply Comments'').
8    See SBC's Further Reply Comments at Attachments A and B.
9    See Oct. 1, 2001 Letter from Charles W. Kelley, Chief, 
Investigations and Hearings Division, Enforcement Bureau, Federal 
Communications Commission to Sandra L. Wagner, Vice-President - 
Federal Regulatory, SBC Telecommunications, Inc. (``Oct. 1, 2001 
LOI'').
10   Id. at pp. 2, 4.
11   See October 22, 2001 Letter from William A. Brown, Senior 
Counsel, SBC Telecommunications, Inc. to Elizabeth H. Valinoti, 
Attorney, Investigations and Hearings Division, Enforcement 
Bureau, Federal Communications Commission.
12   See Oct. 1, 2001 LOI.
13   47 U.S.C.  503(b); 47 C.F.R.  1.80(a).
14   47 U.S.C.  503(b)(4); 47 C.F.R.  1.80(f).
15   See, e.g., Tuscola Broadcasting Co., Memorandum Opinion and 
Order, 76 FCC 2d 367, 371 (1980) (applying preponderance of the 
evidence standard in reviewing Bureau level forfeiture order).  
Cf. 47 U.S.C.  312(d) (assigning burden of proof in hearings to 
Commission). 
16   See Application for Review of Southern California 
Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 
4388 (1991).
17   47 U.S.C.  503(b)(2)(B); see also 47 C.F.R  1.80(b)(2); 
see also Amendment of Section 1.80(b) of the Commission's Rules, 
Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 15 
FCC Rcd 18221 (2000).
18   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) (``Forfeiture Policy Statement''); recon. denied 15 
FCC Rcd 303 (1999); 47 C.F.R.  1.80(b)(4).
19   47 C.F.R.  1.80; Forfeiture Policy Statement, 12 FCC Rcd at 
17114, Appendix A, Section I.
20   47 C.F.R.  1.80; Forfeiture Policy Statement, 12 FCC Rcd at 
17100.
21   In 2000, SBC had operating revenues of $51.4 billion and 
operating income of $10.7 billion.  See SBC Telecomm., Inc., 2000 
Annual Report at 4 (2001). 
22   Forfeiture Policy Statement, 12 FCC Rcd at 17099, 17100. 
23   47 U.S.C.  503(b). 
24   47 C.F.R.  1.80.
25   We note that as of October 31, 2001, SBC still had not 
submitted the required attestation.  SBC's intentional violation 
of the Bureau's directive thus has continued from at least 
October 22, 2001 through October 31, 2001.