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


In the matter of                 )
                                )
SBC Communications Inc.          )    File No. EB-00-IH-0432
                                )
Apparent Liability for           )    NAL/Acct. No. 200132080011
Forfeiture                       )
                                )
                                )
                                )


                         ORDER ON REVIEW

   Adopted:  May 24, 2001               Released:  May 29, 2001

By the Commission:  Commissioner Furchtgott-Roth dissenting and 
issuing a statement.

                        I.   INTRODUCTION

     1.   In this order, we affirm the March 15, 2001 Order of 
Forfeiture1 issued by the Enforcement Bureau (``Bureau'') finding 
SBC Communications, Inc. (``SBC'') to have willfully and 
repeatedly violated certain of the conditions imposed when the 
Commission approved the merger application of Ameritech Corp. 
(``Ameritech'') and SBC.2  We also affirm the Bureau's imposition 
of a forfeiture penalty of eighty eight thousand dollars 
($88,000.00) upon SBC.  Therefore, we deny SBC's April 16, 2001 
Application for Review.

                         II.  BACKGROUND

     2.   Under the merger conditions, SBC was required to submit 
specific performance data to the Commission.  An independent 
audit by Ernst and Young of SBC's compliance with the merger 
conditions reported ``material'' violations of the merger 
conditions, including ``instances of noncompliance regarding the 
accuracy of performance data.''3  In addition, the auditor also 
stated that SBC's ``annual compliance report did not 
appropriately disclose all errors related to performance 
measurements.''4  Based on the underlying data in SBC's monthly 
filings with the Commission, the deficiencies in those filings 
noted in the independent audit report, and the statements made by 
SBC in its Assertion on Compliance5 accompanying the audit 
report, the Bureau issued a Notice of Apparent Liability6 and 
then a Forfeiture Order.                                                                                                                                                                                                                                                 

     3.   In its Application for Review, SBC raises the same 
arguments it made in its Response to the NAL.  Specifically, SBC 
contends that: 1) the Forfeiture Order is unlawful because SBC 
has substantially complied with performance reporting 
obligations; 2) any noncompliance was not willful; and 3) the 
Bureau's calculation of the forfeiture amount is arbitrary. 

                      III.      DISCUSSION

     4.   Based upon our review of SBC's Application for Review 
and the record in this matter, we find no reason to reverse the 
Bureau's decision in this case.  Accordingly, we adopt the 
reasoning of the Forfeiture Order and incorporate the same here, 
with the limited additional comments below.

     5.   We reject SBC's contention that it has substantially 
complied with its performance reporting obligations.7  Using 
misleading statistics and ``apples to oranges'' comparisons, SBC 
argues that its performance reports were ``near-perfect'' and 
that the Bureau's finding of substantial noncompliance is 
``preposterous.''8  Our examination of the data points impacted 
by SBC's errors reveal that SBC has significantly overstated the 
accuracy of its filings. For instance, in Attachment A to its 
Application for Review, SBC compares 17 ``alleged errors'' for 
January 2000 with more than 1500 ``total measures and submeasures 
reported.''  A more appropriate calculation would compare the 17 
types of errors described in the Forfeiture Order to the 60 
performance measurements for the SWBT, PacBell, and Nevada Bell 
regions.  This calculation would raise SBC's non-compliance rate 
to 28 percent.  Moreover, each of the 17 types of errors impacted 
numerous reported measures.9  Our own analysis concludes that 
SBC's reporting violations in its January, 2000 report affected 
546 data points out of the 2769 measures SBC reported that month 
for all seven states in SBC's SWBT, PacBell, and Nevada Bell 
regions. Thus, we find that almost 20 percent of SBC's data for 
January 2000 was flawed. To the extent that later reports 
contained fewer errors, we find that they were nonetheless part 
of a pattern of noncompliance sufficient to warrant forfeiture. 

     6.   We also reject SBC's contention that no forfeiture is 
appropriate because SBC's errors represented reasonable 
interpretations of the Business Rules.10  Like the Bureau, we 
find that the rules at issue were clear, and that SBC 
unilaterally modified these rules in the way in which it reported 
the data without first obtaining the necessary permission.  The 
SBC/Ameritech Merger Order clearly stated that SBC was required 
to obtain explicit approval from the Commission for any changes 
it wished to implement in the Business Rules.11  Moreover, we 
reject SBC's argument that the Common Carrier Bureau's alleged 
failure to object to these unrequested changes constituted 
consent to their implementation.12  The Common Carrier Bureau 
informed SBC in May, 2000 that it was concerned about SBC's 
failure to seek Commission approval of several changes to the 
Business Rules before they were implemented and reiterated the 
prior approval requirement.13  Thus, we reject SBC's argument 
that its reporting of certain performance measurements in a 
manner contrary to that clearly stated in the Commission's 
Business Rules was reasonable.14

     7.   We also reject SBC's suggestion that certain of its 
interpretations of the Business Rules were not only reasonable, 
but were the only reasonable interpretation, i.e. that the 
Bureau's interpretation was simply wrong.15  Contrary to SBC's 
assertion in this regard, we find that the Business Rules for 
performance measurements 4c, 12b, and 12c clearly specify the 
disaggregation level to be used, and that SBC did not follow 
these requirements.  The auditor found material errors, and  
SBC's own Assertion on Compliance confirms that there were 
``disaggregation errors,'' in these measurements.16  Therefore, 
we affirm the Bureau's findings. 

     8.   We agree with the Bureau's determination that SBC 
willfully and repeatedly failed to comply with the merger 
conditions.17  As the Bureau correctly stated, it has long been 
established that the word ``willfully,'' as employed in section 
503(b) of the Act, does not require a demonstration that SBC knew 
that 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.  Even assuming, moreover, that we 
accept SBC's argument that Midwest Radio-Television18 somehow 
requires the Commission to find a lack of concern or indifference 
on the part of the licensee for compliance with our rules before 
we may assess a forfeiture, SBC's repeated and substantial 
violations of the relevant Business Rules demonstrate a lack of 
care sufficient to satisfy SBC's proffered willfulness standard.  
Given the number of violations at issue, SBC has failed to 
demonstrate that its conduct reflected diligence in complying 
with the Commission's requirements. 

     9.    Finally, we find that the Bureau's calculation of the 
forfeiture penalty is reasonable and appropriate.  Section 
503(b)(2)(D) of the Act and the Forfeiture Policy Statement allow 
the Commission considerable flexibility to determine the 
appropriate forfeiture.19  Contrary to SBC's contention, the 
Bureau was not required to limit its consideration of SBC's past 
history of noncompliance to cases involving performance 
measurement reporting.20  The Bureau appropriately considered 
adjudicated findings of violations of the Act or Commission rules 
by SBC other than violations of the merger reporting 
requirements.  We also reject SBC's assertion that the Bureau may 
have ``double counted'' the fact that the violations were 
repeated by using that fact both to determine that a forfeiture 
was warranted under 47 U.S.C.  503 (b)(1)(A) and to determine 
that an upward adjustment of the base forfeiture amount set forth 
in the Forfeiture Policy Statement was appropriate.21  There is 
nothing unlawful or inappropriate about taking account of the 
repeated nature of the violations in both contexts.  In summary, 
we find nothing unreasonable in imposing a $88,000 forfeiture on 
a company of SBC's resources for the types of violations at issue 
here.

                      IV.  ORDERING CLAUSES

     10.  For the reasons discussed above, IT IS ORDERED that, 
pursuant to sections 1, 4(i), 4(j), and 503 of the Act, as 
amended, 47 U.S.C.  151, 154(i), 154(j), and 503, the 
Application for Review filed by SBC Communications IS DENIED.

     11.  IT IS FURTHER ORDERED THAT, pursuant to section 503(b) 
of the Act, 47 U.S.C.  503(b), and section 1.80 of the 
Commission's Rules, 47 C.F.R. 1.80, SBC Communications SHALL 
FORFEIT to the United States Government the sum of eighty eight 
thousand dollars ($88,000.00) for willfully or repeatedly 
violating the Commission's merger conditions in the SBC/Ameritech 
Merger Order. 

     12.  IT IS FURTHER ORDERED that payment shall be made in the 
manner provided for in section 1.80 of the Commission's rules, 47 
C.F.R.  1.80, 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, 47 U.S.C.  504(a).









 

     13.  IT IS  FURTHER ORDERED  that a  copy of  this Order  on 
Review 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

                         

                         Magalie Roman Salas
                         Secretary

                     DISSENTING STATEMENT OF 
               COMMISSIONER HAROLD FURCHTGOTT-ROTH

RE:  SBC COMMUNICATIONS INC.  APPARENT LIABILITY FOR  FORFEITURE, 
ORDER  ON  REVIEW,   FILE  NO.  EB   00-IH-0432,  NAL/ACCT.   NO. 
200132080011.


     I respectfully dissent from the Commission's decision to 
affirm the Order of Forfeiture issued by the Enforcement Bureau 
(Bureau) finding SBC Communications, Inc. (SBC) to have willfully 
and repeatedly violated certain of the conditions imposed when 
the Commission approved the merger application of Ameritech Corp. 
and SBC. I am troubled by the Commission's finding that SBC 
``willfully'' and ``repeatedly'' violated the complex set of 
rules imposed by the merger conditions.  Although the Bureau and 
the Commission find that the rules at issue were ``clear,'' I 
suspect that they were at the very least open to reasonable 
differences of interpretation.  I would have preferred an ongoing 
dialogue with SBC to reach an understanding of SBC's obligations 
under the merger conditions, rather than finding a willful 
violation of our rules.  Although I do have continuing concerns 
about the merger conditions, this is not the basis of my concern 
here.  Once adopted, I expect strict compliance with the 
Commission's rules.  But rules must be clear if they are to be 
fairly enforced.

_________________________

1SBC Communications, Inc., Order  of Forfeiture, DA 01-680  (Mar. 
15, 2001) (``Forfeiture Order'').  
2Applications   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, 
14856 (1999) (``SBC/Ameritech Merger Order'').
3 See  Aug. 31,  2000  Report of  Independent Auditors,  Ernst  & 
Young, LLP,  at 2  (``Auditor's Report  on Compliance'').    This 
report only  covered SBC's  conduct in  Texas, Oklahoma,  Kansas, 
Missouri, and  Arkansas, California  and Nevada  from October  8, 
1999 through December 31, 1999. See also Aug. 31, 2000 Report  of 
Management   on   Compliance    with   the   Merger    Conditions 
(``Management's Assertion on Compliance''), Attachment A at 13.  
4  Auditor's Report on Compliance at 2.
5    Management's Assertion on Compliance; NAL at  6; Forfeiture 
Order at  2, 4. 
6  SBC  Communications, Inc.,  Notice of  Apparent Liability  for 
Forfeiture, DA 00-2858 (Dec. 20, 2000) (``NAL'').
7  Application for Review at 14. 
8  Application for Review at i and 11. 
9  See Application for Review at 11. 
10  The  Business   Rules  accompanying  the   Carrier-to-Carrier 
Performance Plan  describe  the specific  data  requirements  and 
measurement standards  for  each  performance  measurement.   See 
SBC/Ameritech Merger Order, Appendix  C, Attachments A-2a and  A-
2b.
11  See SBC/Ameritech Merger Order, Appendix C, Attachment A at  
4.
12  Application for Review at 16.
13 Letter from Carol Mattey, Deputy Chief, Common Carrier Bureau, 
to Marian Dyer, Vice President-Federal Regulatory, SBC, dated May 
30, 2000.
14  See Application for Review  at 17.  SBC's reliance on  United 
States v. Rust Communications Group, Inc., 425 F.Supp. 1029, 1033 
(E.D. Va. 1976),  is inapposite.   In Rust, the  court found  the 
antenna input power rule  at issue did  not provide the  licensee 
with requisite notice of the specific conduct that the Commission 
considered to be  a violation  warranting a  sanction.  Here,  by 
contrast, the Business  Rules clearly  specified the  performance 
data SBC was required to submit to the Commission pursuant to the 
merger conditions.   
15  Application for Review at 14-15.
16  Management's Assertion on Compliance, Attachment A at 13.
17  Forfeiture Order at  14-17.
18  See Midwest  Radio-Television, Inc.,  Memorandum Opinion  and 
Order, 45 FCC 1137, 1141 (1963).
19  Forfeiture Order at  20.  47 U.S.C.  503(b)(2)(D); see also 
The Commission's  Forfeiture Policy  Statement and  Amendment  of 
Section 1.80 of the Commission's  Rules, 12 FCC Rcd 17087,  17100 
(1997) (``Forfeiture Policy  Statement''); recon.  denied 15  FCC 
Rcd 303 (1999); 47 C.F.R.  1.80(b)(4).
20   Application  for   Review  at  23-24.    See  47  U.S.C.    
503(b)(2)(D) (emphasis  added) (``In  determining the  amount  of 
such a forfeiture penalty, the Commission or, its designee  shall 
take into account... with respect to the violator,... any history 
of prior offenses....'').
21  Application for Review at 25.