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Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-01-IH-0035
) TRS Company Code: 819100
PTT Telekom, Inc. ) NAL/Acct. No.
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: March 26, 2001 Released: March 29,
By the Commission:
1. In this Notice of Apparent Liability for
Forfeiture ("NAL"), we find that PTT Telekom, Inc. (``PTT'')
has apparently violated 47 U.S.C. § 254(d) and 47 C.F.R. §
54.706 by willfully and repeatedly failing to contribute to
universal service support programs. Based on our review of
the facts and circumstances in this case, we conclude that
PTT is apparently liable for a forfeiture in the amount of
2. In 1996, Congress amended the Communications Act
of 1934 (the ``Act'') to require that:
Every telecommunications carrier that provides
interstate telecommunications services shall
contribute, on an equitable and nondiscriminatory
basis, to the specific, predictable, and
sufficient mechanisms established by the
Commission to preserve and advance universal
In implementing that section, we authorized the Universal
Service Administrative Company (``USAC'') to administer
universal service support mechanisms and to perform billing
and collection functions.2 As to these matters, we directed
USAC to distribute, receive and process the Universal
Service Worksheet (now the Telecommunications Reporting
Worksheet) (``Worksheet''), which is used to report certain
categories of revenue for the purpose of calculating a
carrier's universal service contribution, and to adjust
carriers' contributions in accordance with factors
established by the Commission.3 In addition, we gave USAC
the authority to bill carriers monthly, with the first
payment being due in February 1998.4 To foster compliance
with universal service requirements, our rules provide that
a carrier's failure ``to submit required . . . contributions
may subject the contributor to the enforcement provisions of
the Act and any other applicable law.''5
3. PTT did not file its first Worksheet until August
30, 1999, nearly two years after it was due. At that time,
PTT filed Worksheets not only for 1997 but also for 1998 and
for the first six months of 1999. Based upon information in
the 1997 and 1998 Worksheets, USAC sent PTT an invoice dated
September 15, 1999, which set forth PTT's liability to the
universal service funds for high cost and low income areas,
school and libraries, and rural health care. The amount
billed was $189,257.83, which represented all of the
contributions PTT should have made in 1998 as well as those
already due in 1999. Although a PTT representative called
USAC to inquire about payment arrangements, PTT never made
any payments to USAC. USAC has continued to send out
monthly invoices to PTT, and in November 2000 and January
2001 attempted unsuccessfully to speak with someone at PTT
to inform it of its delinquency.
4. On February 1, 2001, the Enforcement Bureau sent a
letter to PTT, which explained that PTT was potentially the
subject of an enforcement action.6 PTT failed to respond to
the Bureau's letter.7 As of February 2001, PTT owes a
balance of approximately $925,000, which represents required
contributions and late payment penalties billed through
5. We conclude that PTT is apparently liable for
forfeiture for willful and repeated violations of 47 U.S.C.
§ 254 and the Commission's rules governing universal service
contributions. According to USAC's records, PTT has not
paid any of its required universal service contributions.
Consequently, PTT's unpaid contribution balance has grown to
approximately $925,000. As noted above, 47 U.S.C. § 254(d)
and 47 C.F.R. §§ 54.706 and 54.709 require that interstate
telecommunications carriers make universal service
contributions in the amounts calculated by USAC. PTT has
not done so, and we find that PTT's failures to make the
required contributions are not only apparently willful and
repeated but also apparently egregious and intentional. The
term ``willful'' means that the violator knew that it was
taking the action in question, irrespective of any intent to
violate the Commission's rules,8 and ``repeated'' means more
than once.9 The record before us indicates that PTT knew of
its obligation to contribute to universal service programs
on a monthly basis but chose repeatedly not to meet that
obligation. 6. Section 503(b)(1)(B) of the Act provides that any
person who willfully or repeatedly fails to comply with the
Act or the Commission's rules shall be liable for a
forfeiture penalty.10 If the violator is a common carrier,
47 U.S.C. § 503(b)(2)(B) authorizes us to assess a
forfeiture of up to $110,000 for each violation, or each day
of a continuing violation, up to a statutory maximum of
$1,100,000 for a single act or failure to act.11 In
assessing a forfeiture, 47 U.S.C. § 503(b)(2)(D) requires us
to consider 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.12
7. Taking into account the statutory factors, as well
as precedent, we find PTT apparently liable for a forfeiture
of $137,000. This forfeiture consists of three components.
First, we have assessed a base figure of $40,000, $20,000
for each of two apparent violations, i.e., the failures to
pay the November and December 2000 invoices.13 The
Commission established such a base figure in order to deter
delinquencies regardless of their amount.14 Second,
consistent with our recent actions in this area, 15 we have
added an amount that is approximately one half of the unpaid
universal service contributions for two representative
months. In this case, we have chosen the months of November
and December 2000, which results in an addition of $51,500
to the base figure. This second component of the forfeiture
illustrates that a delinquent carrier's culpability and the
consequential damage it causes to the goal of universal
service may vary with the size of the contributions it fails
to make.16 Finally, we have applied an upward adjustment of
$45,500, slightly less than 50 percent of the sum of the
first two components to account for the egregious nature of
PTT's violations. As noted, PTT has paid nothing toward
universal service for more than three years and has apparently ignored
Commission correspondence on the subject. We cannot and
will not countenance this kind of behavior on the part of
those we regulate.17
8. Although PTT's failures to pay its contributions
in months other than November and December 2000 represent
separate violations of the Act and our rules, we do not find
apparent liability for these apparent violations at this
time. Nevertheless, we warn PTT that these violations could
form the basis for additional notices of apparent
liability.18 If PTT continues to violate our universal
service rules, such violations could result in future NALs
proposing substantially greater forfeitures, or could result
in issuance of a show cause order to revoke PTT's operating
IV. ORDERING CLAUSES
9. Accordingly, IT IS ORDERED THAT, pursuant to 47
U.S.C. § 503(b), and 47 C.F.R. § 1.80, PTT Telekom, Inc. is
hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE
in the amount of one hundred thirty-seven thousand dollars
($137,000) for violating the Act and our rules requiring
regular contributions for universal service.
10. IT IS FURTHER ORDERED THAT, pursuant to 47 C.F.R.
§ 1.80, within thirty days of this NOTICE OF APPARENT
LIABILITY, PTT Telekom, Inc. SHALL PAY the full amount of
the proposed forfeiture or SHALL FILE a written statement
seeking reduction or cancellation of the proposed
Payment of the forfeiture 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.
11. 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 file number listed above.
12. The Commission will not consider reducing or
canceling a 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 (``GAAP''); 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
13. Requests for payment of the full amount of this
Notice of Apparent Liability under an installment plan
should be sent to: Chief, Revenue and Receivables Operations
Group, 445 12th Street, S.W., Washington, D.C. 20554. See
47 C.F.R. § 1.1914.IT IS FURTHER ORDERED that a copy of this Notice of Apparent
Liability for Forfeiture shall be sent by Certified
Mail/Return Receipt Requested, to Ron Kiser, PTT Telekom,
Inc., 1000 N. Orlando Avenue, Winter Park, Florida 32789;
and to National Registered Agents, Inc., 1090 Vermont
Avenue, N.W., Washington, D.C. 20005.
FEDERAL COMMUNICATIONS COMMISSION
Magalie Roman Salas
1 47 U.S.C. § 254(d).
2 See Amendment of Parts 54 and 69 - Changes to Board of
NECA, Inc., 12 FCC Rcd 18400, 18415 (1997) (``NECA Changes
Order''); 47 C.F.R. § 54.702(b).
3 See NECA Changes Order, 12 FCC Rcd at 18424-25; 47 C.F.R.
§§ 54.709(a)(1-3), 54.711(a).
4 See Amendment of Part 54 - Universal Service, 12 FCC Rcd
22423, 22425 (1997); 47 C.F.R. § 54.709(a)(4-5).
5 47 C.F.R. § 54.713.
6 Letter from Charles W. Kelley, Chief, Investigations and
Hearings Division, Enforcement Bureau, to PTT Telekom, Inc.
dated February 1, 2001.
7 The Enforcement Bureau mailed the February 1, 2000 letter
to PTT by certified mail, return receipt requested. The
return receipt reflects that PTT received the Bureau's
letter on February 9, 2001.
8 See Jerry Szoka, 14 FCC Rcd 9857, 9865 (1999); Southern
California Broadcasting Co., 6 FCC Rcd 4387 (1991).
9 See Hale Broadcasting Corp., 79 FCC 2d 169, 171 (1980).
10 47 U.S.C. § 503(b)(1)(B). See also 47 C.F.R. §
1.80(a)(2). Recently, we amended section 1.80(b) of our
rules to increase the maximum penalties that may be imposed.
Accordingly, for a common carrier, the forfeiture limit for
each violation is now $120,000, with a maximum potential
forfeiture of $1,200,000 for a continuing violation
involving a single act or failure to act. See Amendment of
Section 1.80(b) of the Commission's Rules, 15 FCC Rcd 18221
11 See also 47 C.F.R. § 1.80(b)(2).
12 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, 17100-01
(1997), recon. denied, 15 FCC Rcd 303 (1999) (``Forfeiture
13 See ConQuest Operator Services Corp., 14 FCC Rcd 12518,
12527 (1999) (``ConQuest Forfeiture Order'') (We determined
that $20,000 should be the general base amount for failure
to pay the assessed universal service contribution in a
14 See id.
15 See America's Tele-Network Corp., 15 FCC Rcd 20903
(2000) (Notice of Apparent Liability), 15 FCC Rcd 24391
(2000) (Forfeiture Order); Intellicall Operator Services, 15
FCC Rcd 15359 (2000) (Notice of Apparent Liability), 15 FCC
Rcd 21771 (2000) (Forfeiture Order); Matrix Telecom, Inc.,
15 FCC Rcd 15344 (2000) (Notice of Apparent Liability), FCC
01-48, released February 20, 2001 (Forfeiture Order). See
also North American Telephone Network, LLC, 15 FCC Rcd 14022
(Enf. Bureau 2000) (Notice of Apparent Liability); DA 01-
540, released March 2, 2001 (Forfeiture Order).
16 See ConQuest Forfeiture Order, 14 FCC Rcd at 12527.
17 See America's Tele-Network Corp., 15 FCC Rcd 20903
(2000) (Notice of Apparent Liability), 15 FCC Rcd 24391
(2000) (Forfeiture Order) (50 percent upward adjustment for
intentional and egregious non-payment of universal service
18 ConQuest Forfeiture Order, 14 FCC Rcd at 12527.
19 See CCN, Inc. et al., 12 FCC Rcd 8547 (1997) (the