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



In the Matter of                 )
                                )
Publix Network Corporation;      )    EB Docket No. 02-149
Customer Attendants, LLC;        )    File No. EB-01-TC-052
Revenue Controls Corporation;    )    NAL/Acct. No. 200232170003
SignTel, Inc.; and Focus Group,  )    FRN: 0004-3412-51
LLC                              )
                                )
Order to Show Cause and          )
Notice of Opportunity for 
Hearing


                     ORDER TO SHOW CAUSE AND 
                NOTICE OF OPPORTUNITY FOR HEARING



   Adopted: June 12, 2002               Released: June 19, 2002

By the Commission:

                        I.  INTRODUCTION

     1.   In this Order to Show  Cause and Notice of  Opportunity 
for Hearing, we find that  an evidentiary hearing is required  to 
determine whether (1) the Commission should revoke the  operating 
authority of the Publix Companies,1 (2) the Publix Companies  and 
the principal or  principals of  the Publix  Companies should  be 
ordered  to  cease  and  desist  from  any  future  provision  of 
interstate common carrier services  without the prior consent  of 
the Commission, (3) the Publix  Companies are entitled to any  of 
the telecommunications relay services (``TRS'') fund monies  that 
they  requested  or  received  from  the  TRS  Fund,  and  (4)  a 
forfeiture  against  any  or  all  of  the  Publix  Companies  is 
warranted and, if so, the amount of the forfeiture. 

     2.   As set  forth  in detail  below,  it appears  that  the 
Publix Companies may  have unlawfully obtained  over six  million 
dollars in payments  from the TRS  Fund by means  of a scheme  to 
create the  appearance  that  they were  operating  a  legitimate 
telecommunications relay service.  Moreover, in perpetrating this 
scheme,  the  Publix  Companies  appear  to  have  made  repeated 
misrepresentations to  the  Commission  and to  have  violated  a 
number  of   the   statutorily-mandated  requirements   and   the 
Commission's  rules  relating  to  the   TRS  Fund  and  to   the 
provisioning of TRS. 
                         II.  BACKGROUND

     A.   Statutory and Regulatory Background

     3.   Telecommunications relay services were created to bring 
to those  with a  hearing or  speech disability  the benefits  of 
universal service  that had  hitherto  been unavailable  to  that 
segment of  the  public  by  ``provid[ing]  the  ability  for  an 
individual with  a  hearing or  speech  disability to  engage  in 
communication by wire  or radio  with a hearing  individual in  a 
manner that  is  functionally equivalent  to  the ability  of  an 
individual who does not  have a hearing  or speech disability  to 
communicate  using  voice  communication  services  by  wire   or 
radio.''2  To  accomplish  this,  TRS  employs  a  communications 
assistant (``CA'')  who functions  as,  in effect,  a  translator 
between the person with  a hearing or  speech disability, who  is 
typically communicating via  a text telephone  (``TTY''), and  an 
individual without any such disability,  who is using a  standard 
telephone.  A TRS call  may be initiated by  the TTY user or  the 
standard telephone user.  A  caller can dial  either a toll  free 
number or 711  to access a  TRS center.  The  CA will answer  and 
process the call.  After  the caller gives the  CA the number  of 
the person to be called, the  CA places the call to that  person.  
The CA's responsibility is to type to the person with the TTY and 
speak to the person with the standard telephone, relaying exactly 
what is  spoken or  typed by  each party.3   For interstate  TRS, 
callers pay only the cost of the long-distance telephone call  as 
if the call were placed directly between the telephones.  They do 
not pay for the TRS  service.  TRS providers recover their  costs 
of providing this service through the TRS Fund. 4

     4.   The Act requires  each common  carrier providing  voice 
transmission services  to  provide  TRS in  accordance  with  the 
standards set forth in Section 64.604 of the Commission's rules.5  
Carriers may  do this  either by  providing TRS  directly, or  by 
contracting  with  a  TRS   provider.   Section  64.604  of   the 
Commission's  rules   established   the  TRS   Fund,6   currently 
administered  by  the   National  Exchange  Carrier   Association 
(``NECA''), which  reimburses  TRS  providers for  the  costs  of 
providing  interstate   TRS.7   Carriers   providing   interstate 
telecommunications services must  contribute to the  TRS Fund  on 
the basis of interstate end-user telecommunications revenues.8 

     5.   Payments from the TRS Fund  to TRS providers are  based 
on schedules of  payment formulae that  NECA files annually  with 
the Commission.9   These  formulae  are based  on  total  monthly 
interstate TRS minutes of use (``MOU''),10 defined as the MOU for 
completed interstate  TRS  calls  placed  through  a  TRS  center 
beginning after call set-up and concluding after the last message 
call unit.11  TRS providers are eligible to receive payments from 
the TRS Fund only if they are: (1) TRS facilities operated  under 
contract with and/or by certified state TRS programs pursuant  to 
Section 64.605; (2)  TRS facilities  owned by  or operated  under 
contract with  a  common carrier  providing  interstate  services 
pursuant to  Section 64.604;  or (3)  interstate common  carriers 
offering TRS pursuant to Section 64.604.12  To receive  payments, 
TRS providers must  submit monthly reports  of interstate MOU  to 
NECA.13

     6.   As  required   by  the   Act,14  the   Commission   has 
established mandatory minimum standards for all TRS  providers.15  
Congress  mandated  certain  of  these  standards,  such  as  the 
requirement to operate  every day for  24 hours per  day and  the 
prohibition on keeping  records of or  disclosing the content  of 
TRS calls.16  The  Commission's  implementing  rules  also  cover 
matters  such  as  training,  typing  speed,  and   communication 
competence for  the CAs.   Besides employee  qualifications,  TRS 
hardware  and  access  requirements  are  outlined,  as  well  as 
reporting  functions,  payments,  contribution  computation,  and 
complaint procedures.17

     B.   Background of the Case

     7.   The Publix Companies have, since 1999, been  collecting 
reimbursements from the  TRS Fund for  purportedly providing  TRS 
service eligible for compensation  under the Commission's  rules.  
The Publix Companies began operating what they described as a TRS 
center in January 1999 and  began submitting MOU reports to  NECA 
in February of that year.18   From that period until April  2001, 
the Publix Companies submitted 8,014,815  MOU to NECA as a  basis 
for payment from the TRS  Fund.  The last billing statement  they 
sent to NECA for compensation from the TRS Fund was dated  August 
13, 2001,  and covered  purported  TRS MOU  for July  2001.   The 
Publix Companies  have received  reimbursements in  excess of  $6 
million.19

     8.   A random audit of the Publix Companies' TRS  operations 
by NECA20 in 2001 raised  significant questions of whether  their 
relay operations qualified  them for the  TRS Fund payments  that 
they had requested  and received.   The relay  operation did  not 
appear to function as a public TRS center in compliance with  the 
requirements of the Act and the Commission's rules. For instance, 
a typical TRS center would handle hundreds to thousands of  calls 
daily, but  the Publix  Companies' relay  operations appeared  to 
handle only  a  small  number of  calls,  virtually  all  between 
employees of the Publix  Companies.  It appears  that all of  the 
telephone calls in the daily call reports were between 9:00  a.m. 
and  5:00   p.m.,  Monday   through  Friday,   even  though   the 
Commission's rules require TRS providers receiving reimbursements 
to provide  service 24  hours  a day,  seven  days a  week.   The 
average length of the calls was about 50 times longer than  those 
reported by other TRS  providers, and the  volume of minutes  the 
Publix Companies were reporting was also suspicious.  At the time 
of the  NECA  audit, the  Publix  Companies' reported  volume  of 
minutes had risen  to approximately 500,000  monthly.  For  2000, 
only Sprint and  AT&T, large  TRS providers  with multiple  state 
contracts  and   centers,  reported   more  minutes.   This   was 
particularly  striking  given  that  the  Publix  Companies'  TRS 
contact information apparently  never had been  published in  the 
Telecommunications for  the Deaf,  Inc. Blue  Book, the  national 
directory of TTY and  TRS numbers, and  the Publix Companies  had 
made little  apparent effort  at advertising.   These, and  other 
concerns about compliance with the Commission's mandatory minimum 
standards and billing inaccuracies, led  NECA to contact the  FCC 
regarding possibly fraudulent activity and violations of the  Act 
and the Commission's rules. 

     9.   On June  25,  2001,  the  Enforcement  Bureau  (``EB'') 
issued  a  subpoena  for   documents  to  Publix  Network   (``EB 
Subpoena''), together with  a letter of  inquiry.21  On the  same 
day, the CCB sent a letter to Publix Network questioning  whether 
Publix Network  was operating  as a  common carrier;  questioning 
whether Publix  Network was  an eligible  TRS provider  operating 
pursuant to Section 64.604; rejecting Publix Network's method for 
calculating MOU for conference calls; stating that CCB had reason 
to believe that Publix Network's application for certification as 
a  TRS   provider  may   have  contained   false  statements   or 
misrepresentations;22 and notifying Publix  Network that CCB  had 
directed NECA  to  continue  to  withhold  payments  pending  the 
outcome  of   EB's  investigation   of  the   Publix   Companies' 
operations.23  The Publix Companies responded to both EB and  CCB 
on July 23, 2001.  In its response to CCB, Publix Network  stated 
that once it was given notice of CCB's concerns, it had  ``worked 
diligently to adjust its operations.''24  Publix Network  further 
stated that  its  management  believed that  Publix  Network  had 
always been operating  ``in substantial compliance  with the  TRS 
minimum  standards.''25   The  Publix  Companies  also   produced 
thousands  of  documents  and  a   CD-ROM  pursuant  to  the   EB 
Subpoena.26

     10.  Based on the NECA audit  and on the responses  received 
from the  Publix  Companies  to the  Commission's  inquiries,  it 
appears that  the Publix  Companies  have collected  millions  of 
dollars in payments  from the  TRS Fund  without actually  having 
provided  TRS  services  that  would  have  qualified  them   for 
reimbursement.  It  appears that  the  Publix Companies  did  not 
actually provide TRS as defined  by the Commission's rules,  thus 
raising  a   threshold   issue  about   their   eligibility   for 
compensation from the TRS Fund.27  Moreover, there appears to  be 
pervasive misconduct and  violations of Commission  rules by  the 
Publix Companies.  It appears that the Publix Companies  violated 
numerous operational, technical, and functional requirements  set 
forth in the Commission's TRS rules, submitted inflated bills for 
reimbursement and other false and inadequate data to the TRS Fund 
Administrator,  and  made  repeated  misrepresentations  to   the 
Commission.  Considered in  their totality, it  appears that  the 
actions  of  Publix  Network  and  related  companies  may   have 
constituted not only  multiple, technical violations  of the  Act 
and the  Commission's  rules, but  also  a deliberate  scheme  to 
obtain TRS  Fund  payments for  which  these companies  were  not 
eligible.   In  view  of   the  apparent  pattern  of   pervasive 
misconduct and violations, it  appears that the Publix  Companies 
are not qualified, and  should not be  authorized, to operate  as 
common carriers in the future.



                         III. DISCUSSION

     A.   Whether the Publix  Companies Collected  Reimbursements 
          Without Providing TRS within the Meaning of the Act and 
          the Commission's Rules

     11.  TRS is defined as:

          Telephone transmission services  that provide  the 
          ability for  an individual  who has  a hearing  or 
          speech disability  to engage  in communication  by 
          wire or  radio  with  a hearing  individual  in  a 
          manner that  is  functionally  equivalent  to  the 
          ability of  an  individual  who does  not  have  a 
          hearing or speech disability to communicate  using 
          voice communication  services  by wire  or  radio.  
          Such term  includes services  that enable  two-way 
          communication between  an  individual who  uses  a 
          text telephone or  other nonvoice terminal  device 
          and an individual who does not use such a  device, 
          speech-to-speech services,  video  relay  services 
          and non-English  relay services.   TRS  supercedes 
          the terms ``dual  party relay system,''  ``message 
          relay services,'' and ``TDD Relay.''28

The Publix Companies  are eligible to  receive payments from  the 
TRS Fund,  if  at  all, only  to  the  extent that  they  are  an 
interstate common  carrier  ``offering TRS  pursuant  to  Section 
64.604.''29  It appears  that the services  for which the  Publix 
Companies have sought TRS Fund reimbursement fundamentally do not 
constitute TRS at all.  Moreover, to the extent that any TRS  was 
actually provided by the Publix Companies, it appears that it was 
not ``TRS pursuant  to  64.604,''  because the Publix  Companies 
did not substantially comply with the requirements of that rule.

          1.   Whether the  service  that  the  Publix  Companies 
          provided constituted TRS

     12.  The   Commission's   definition    of   TRS    requires 
communication between  an individual  with  a hearing  or  speech 
disability  and  an  individual  without  any  such   disability. 
Communication solely  between  persons  with  hearing  or  speech 
disabilities  does   not   meet   this   definition;   nor   does 
communication between individuals without  any hearing or  speech 
disability.  As explained below, it appears that virtually all of 
the purported  TRS  calls for  which  the Publix  Companies  have 
sought reimbursement  occurred solely  between employees  of  the 
Publix  Companies  and   that  the  CAs   did  not  function   as 
transliterators, but initiated  and directed the  calls to  other 
employees of the  Publix Companies.   Thus these  calls were,  in 
effect, calls  solely  between  persons with  hearing  or  speech 
disabilities.  

     13.  As described  above,  TRS  is  a  service  that  allows 
persons with hearing or  speech disabilities to communicate  with 
those without any such  disabilities.  It appears that  virtually 
none of  the calls  that the  Publix Companies  reported to  NECA 
involved such a service.  Instead, calls appear to have  followed 
two patterns.   In the  first, the  Publix Companies'  CAs  would 
place a call to several  assistant developers (``ADs'') who  were 
in the employ of Dr.  Raanan Liebermann, President of the  Publix 
Network Corp., through Focus Group, and would ask the ADs several 
questions as per a prepared ``script.''  The CAs and ADs  engaged 
in these scripted conversations four  to eight hours a day,  five 
days a week.   The ADs,  however, were, according  to the  Publix 
Companies, all persons with  hearing or speech disabilities,  and 
thus required no TRS to communicate among themselves.   Moreover, 
it appears  that  the  CAs functioned  as  participants,  indeed, 
initiators of  these calls.   However, ``payments  shall only  be 
available for  interstate  TRS  calls  that  are  placed  by  TRS 
users,''30 not  calls placed  by CAs,  whose function  under  the 
rules is defined  as transliterating  ``conversation between  two 
end users of  TRS.''31  If, as  it appears, the  CAs were  active 
participants in calls in which  the only other participants  were 
employees with  a  hearing  disability, then  the  CAs  were  not 
transliterating conversation  from text  to voice  to enable  end 
users with a  hearing disability  to communicate  with end  users 
without such disabilities via  TRS.  Such calls  do not meet  the 
definition of TRS under the Commission's rules. 

     14.  In the second pattern, it appears that a moderator  was 
involved in  the conference  calls along  with the  CAs and  ADs.  
These moderators were employees of Dr. Liebermann through another 
of the  Publix  Companies, SignTel.   Apparently,  the  moderator 
would call as many as six  CAs of the Publix Companies (or  vice-
versa), who in  turn would usually  contact as many  as five  ADs 
each.32  When a moderator  was involved in  the call, it  appears 
that he or she would read  out the questions per the script,  and 
the CAs would type  out via TTY the  questions for the ADs.  When 
the ADs responded,  however, it appears  that the responses  were 
not always forwarded  to the moderators.   Thus, it appears  that 
the moderator may have  served only to  create the appearance  of 
actual relay service. 
     
     15.  Calls such as those  described above do not  constitute 
TRS because they do not facilitate communications between persons 
with hearing  or speech  disabilities  and persons  without  such 
disabilities.  To the  extent that the  purported relay  occurred 
between ADs with  hearing or speech  disabilities, as would  have 
been the case on calls without moderators, these would have  been 
nothing more than conventional  text telephone conversations.  No 
relay is necessary.  Even when moderators were present, there  is 
evidence that  often the  CAs did  not relay  any  communications 
between the  moderators  and  ADs,  and if  they  did  relay  any 
information, it was simply a statement by the CA that all the ADs 
had finished a particular question,  and that they were  prepared 
to move to the next question as per the prepared script.  If this 
was the case, then there was  no TRS.33  Moreover, to the  extent 
that neither the  moderator nor the  AD had a  hearing or  speech 
disability, there was no legitimate TRS. 
  
     16.  We also note  that these apparent  rule violations  are 
serious and go to the core of the statutory purpose.  The  intra-
company service provided  by the Publix  Companies to  themselves 
does not further the purpose of interstate TRS:

          The intent of Title  IV of the  ADA is to  further 
          the Act's goal of  universal service by  providing 
          to individuals with speech or hearing disabilities 
          telephone   services    that   are    functionally 
          equivalent  to  those  available  to   individuals 
          without disabilities.34  

The Act  further serves  this public  purpose by  requiring  that 
common  carriers  make  TRS  part  of  their   telecommunications 
services, either by providing TRS themselves or under contract to 
the public throughout the area in which they hold themselves  out 
to the public for  hire.''35  Congress placed the  responsibility 
for providing  TRS  on  common  carriers in  order  to  make  TRS 
available to the general public to the greatest extent  possible. 
The legislative history of  TRS illustrates the public  functions 
that TRS is  intended to provide  by extending public,  universal 
service to  the disabled  community for  whom  telecommunications 
services were  not  available.36  It  does  not appear  that  the 
Publix Companies provided any  service that promoted this  public 
purpose.  

     17.  We thus direct the ALJ to determine whether the service 
for which the  Publix Companies requested  and received  payments 
met the definition of TRS in the Act and the Commission's  rules.  
Accordingly, we will  specify an issue  to determine whether  the 
service for which the Publix  Companies were reimbursed from  the 
TRS Fund  constituted  TRS.   If  it did  not,  then  the  Publix 
Companies were not entitled to any payments from the TRS Fund.

          2.   Whether  the   Publix  Companies   Offered   ``TRS 
               pursuant to Section 64.604''

     18.  The Commission's rules provide for TRS Fund payments to 
TRS providers  only  when they  are  ``offering TRS  pursuant  to 
Section 64.604.''37 Even to the extent that the Publix  Companies 
may arguably have provided some  legitimate TRS, it appears  that 
they may have  violated many of  the mandatory minimum  standards 
required of  TRS providers  in  Section 64.604.   If  the  Publix 
Companies did  not provide  TRS ``pursuant  to Section  64.604,'' 
they would not be eligible for TRS Fund reimbursement.  

     19.  We  recognize  that   absolute  compliance  with   each 
component of the rules may not always be necessary to fulfill the 
purposes  of  the  statute  and  the  policy  objectives  of  the 
implementing rules,  and that  not  every minor  deviation  would 
justify withholding funding from  a legitimate TRS provider.   We 
therefore hold  that a  TRS  provider is  eligible for  TRS  Fund 
reimbursement if  it  has  substantially  complied  with  Section 
64.604.  This approach will allow a finding that an insignificant 
violation of  the requirements  of the  implementing  regulations 
does not render the  Publix Companies ineligible  so long as  the 
Publix Companies have satisfied the underlying purposes of  those 
requirements.38

     20.  In making a determination whether the Publix  Companies 
have substantially  complied with  Section 64.604,  the ALJ  must 
consider   the   statutory   purpose    of   TRS,   to    provide 
telecommunications services  to persons  with hearing  or  speech 
disabilities  that  are  the   functional  equivalent  of   those 
available to individuals without such disabilities, the  policies 
underlying the particular regulation, and the practical effect of 
any violation in question on  the achievement of these goals.  We 
note that Congress, in crafting the statutory requirements, found 
certain features  essential  to  ensure  that  TRS  was  in  fact 
functionally  equivalent  to   the  telecommunications   services 
generally available to the public.  For example, in keeping  with 
the public availability of such telecommunications services,  the 
statute mandates that, under the rules, TRS must be available  24 
hours a day, 7 days a week and requires an adequate back-up power 
source to ensure the continuity  of service that is  functionally 
equivalent to normal telephone service.39  Also, in keeping  with 
the restrictions against recording a  telephone call, there is  a 
prohibition against keeping a record of a TRS conversation beyond 
the  duration  of  the  call   ensures  that  TRS  provides   the 
functionally equivalent element of privacy of ordinary  telephone 
services.40  The operational, technical, and functional standards 
in Section  64.604  are designed  to  ensure that  the  essential 
purposes and  policy  objectives of  the  statute are  met.   The 
standards governing CAs, for example, are intended to ensure that 
the CAs can provide smooth, rapid transliteration of conversation 
between the  end users  of  TRS such  that  there is  a  seamless 
translation.  The technical standards such as the requirement for 
``equal access  to  interexchange  carriers,''  are  designed  to 
ensure that  TRS  users have  the  ``same access''  to  all  such 
services ``as voice users.''41 The functional standards, such  as 
the requirement to maintain consumer complaint logs,42 to provide 
public access to information,43 and to furnish true and  adequate 
data'' to the  Fund Administrator44  are designed  to ensure  the 
public accessibility,  integrity, and  functionality of  the  TRS 
system.   The   ALJ  should   determine,  using   the   foregoing 
principles, whether  the  Publix Companies'  operations  were  in 
substantial compliance with the  requirements of Section  64.604.  
To do so,  the ALJ  should first  make findings  on the  specific 
issues raised  below regarding  whether and  to what  extent  the 
Publix Companies met the  operational, technical, and  functional 
standards of Section 64.604.  In light of those findings, the ALJ 
should then determine whether the Publix Companies  substantially 
complied with  Section 64.604,  and  therefore were  entitled  to 
receive payments for providing TRS pursuant to Section 64.604.

          a.   Operational Standards of Section 64.604(a)

     21.  Section 64.604(a) delineates certain mandatory  minimum 
operational standards.  It appears that the Publix Companies  did 
not comply  with the  requirements of  Sections 64.604(a)(1)  and 
(2).  The evidence before us suggests that the Publix  Companies' 
CAs were not sufficiently trained to provide the level of service 
necessary to effectuate  the purposes  of the  statute; that  the 
Publix Companies retained records in violation of the statutorily 
mandated prohibition against keeping records past the duration of 
the  call;  that  the  Publix  Companies'  facilities  were   not 
available 24 hours  a day, 7  days a week;   and that the  Publix 
Companies never provided equal access to interexchange carriers.

               (i.) Communications Assistants

     22.  In providing traditional TRS, CAs must be  sufficiently 
trained to meet the special  communication needs of persons  with 
hearing or  speech  disabilities,  and  must,  inter  alia,  have 
competent skills in typing, grammar, spelling, and interpretation 
of typewritten American Sign  Language.45  It appears that  most, 
or all,  of  the  Publix  Companies' CAs  failed  to  meet  these 
mandatory  minimum  qualifications.   For  instance,  the  Publix 
Companies' documents acknowledge that as  of April 28, 2001,  not 
one of the Publix Companies' CAs could type the required  minimum 
of 60 words per minute.46  Therefore, we will specify an issue to 
determine  whether  the  Publix   Companies  complied  with   the 
requirements for communications assistants under the Commission's 
rules.




               (ii.)     Confidentiality and Conversation Content

     23.  CAs are "prohibited from disclosing the content of  any 
relayed conversation  regardless  of  content, and  .  .  .  from 
keeping records of  the content  of any  conversation beyond  the 
duration of the call, even if to do so would be inconsistent with 
state or local law."47  However, in responding to the Enforcement 
Bureau's subpoena, the  Publix Companies produced  over 30  boxes 
containing verbatim transcripts  of purported TRS  conversations.  
We  will  assume  here  for   the  sake  of  argument  that   the 
conversations that  the Publix  Companies retained  qualify as  a 
"relayed conversation," although, as  we have noted elsewhere  in 
this order,  it appears  that  they do  not.  We  will  therefore 
specify an issue to determine  whether the Publix Companies  kept 
records and or disclosed the content of relayed conversations  in 
violation of  47  U.S.C.   225(d)(1)(F)  and 47  C.F.R.  Section 
64.604(a)(2)(i).

          b.   Technical Standards of Section 64.604(b)

               (i.) Equal Access to Interexchange Carriers

     24.  Under the Commission's rules, individuals who use a TRS 
center are entitled to have access to their chosen  interexchange 
carrier through  the  TRS  center,  and  to  all  other  operator 
services.48  In our  First Report and  Order, we determined  that 
there could be ``only  a limited exemption  from this rule''  for 
state certified entities that applied for an exemption as part of 
their  application   for   state   certification   and   provided 
``sufficient justification'' for the exemption on the basis of  a 
pre-existing contractual agreement.49    We did  not provide  for 
any  exemptions  for  common  carriers  who  were  operating  TRS 
directly, rather than through a state certified program  pursuant 
to such  contractual agreement.50   Publix Network's  Application 
states that ``Publix  Network users [will]  have access to  their 
chosen interexchange carriers and all other operator  services.''  
The Publix Companies  admit, however,  that they  have never  met 
this requirement.51  Thus, it  appears that the Publix  Companies 
have violated Section 64.604(b)(3).52   To resolve this  apparent 
conflict between Publix Network's certification to the Commission 
and its  later  admission and  to  determine whether  the  Publix 
Companies met the prescribed standard, we will specify and  issue 
to determine whether the  Publix Companies complied with  Section 
64.604(b)(3).



               (ii.)     TRS Facilities

     25.  As mandated by the  Commission's rules, TRS  facilities 
must operate 24  hours a day,  seven days a  week, and must  have 
redundancy features  and  an  uninterruptible  power  source  for 
emergency purposes.53   Publix Network's  Application states  its 
facilities were  ``operational  24  hours a  day,  seven  days  a 
week.''54 The Publix Companies admit,  however, that for most  of 
the time  they  operated and  as  they currently  operate,  relay 
service was not available  24 hours a day,  seven days a  week.55  
The purported relay service appears  to have been primarily  open 
from 9:00 a.m. until 5:00 p.m., Monday through Friday,  excluding 
some holidays.   The  Publix  Companies contend  that  they  have 
backup features  and  an  uninterruptible power  supply,  but  it 
appears that  these  facilities  may  be  inadequate.   Thus,  it 
appears that Publix Companies' facilities were not in accord with 
the  requirements  set  forth  in  Section  64.604(b)(4)  of  the 
Commission's rules.   Accordingly, we  will specify  an issue  to 
determine whether  the  Publix Companies  complied  with  Section 
64.604(b)(4). 

          c.   Functional Standards of Section 64.604(c) - Public 
     Access to Information

     26.  The Commission's  rules require  carriers to  advertise 
the availability of their TRS facilities through ``publication in 
their directories,  periodic billing  inserts, placement  of  TRS 
instructions  in   telephone   directories,   through   directory 
assistance  services,  and  incorporation   of  TTY  numbers   in 
telephone directories.''56 As we have stated, it is critical that 
TRS providers reach the widest possible potential user population 
in order to  maximize the utility  of TRS and  to effectuate  the 
goals of the Act and the  ADA.57  There is no evidence before  us 
showing  that  the  Publix  Companies  made  efforts   reasonably 
calculated to  satisfy this  requirement.  Accordingly,  we  will 
specify an  issue  to  determine whether  the  Publix  Companies' 
complied with the requirements of Section 64.604(c)(3).

     B.   Whether the Publix Companies Violated Commission  Rules 
          by Providing  Inaccurate Information  to the  TRS  Fund 
          Administrator 

     27.  Section 64.604(c)(5)(iii) creates the  TRS Fund as  the 
cost recovery  mechanism  for  provision of  interstate  TRS  and 
appoints an Administrator,  NECA, to oversee  the collection  and 
disbursement of funds in compliance with the Act and Commission's 
rules.  NECA  collects  data  from  TRS  providers  in  order  to 
determine the  costs of  providing  TRS, and  the amount  of  the 
reimbursement to be provided.  Under Section 64.604(c)(5)(iii)(C) 
of our rules, TRS providers  must provide the Fund  Administrator 
with true  and accurate  data.58  This  includes total  TRS  MOU, 
total interstate TRS MOU, total TRS operating expenses, and total 
TRS investment in general accordance  with Part 32 of the  Act.59  
The provision of true  and accurate data  by each interstate  TRS 
provider is  essential because  these providers  are  compensated 
based on an average cost  methodology.  From the historical  data 
and forecasts of expenses and demand submitted by each interstate 
TRS  provider,   the   TRS  Fund   Administrator   develops   the 
compensation rate per minute, the projections of demand, and  the 
TRS funding requirement  for the coming  year.  The provision  of 
false or inadequate data can thus  have an overall effect on  TRS 
Fund projections of demand, on compensation rates, and on funding 
requirements.   A  number   of  accounting  inconsistencies   and 
financial  irregularities,  however,  suggest  that  the   Publix 
Companies may  have violated  this rule  by providing  false  and 
inadequate data to NECA.  This bears directly both on the  Publix 
Companies' compliance with the standards of Section 64.604 and on 
the Publix  Companies'  qualification  to  operate  as  a  common 
carrier.

          1.   Inaccuracies in Reported Costs

     28.  It appears  that  cost  items reported  by  the  Publix 
Companies  in  the  NECA-prescribed  cost  categories   contained 
significant inaccuracies.   For  example,  the  Publix  Companies 
reported automobile lease, operating, and maintenance expenses as 
``salaries.''  They also included a security system installed  at 
Dr. Liebermann's home as   ``building maintenance'' and  software 
development  and  consulting  as  ``engineering.''   The   Publix 
Companies' largest actual expense,  according to the work  papers 
they provided to NECA, was for royalties on a ``patent  pending'' 
conferencing technology  for  which SignTel  was  allegedly  paid 
$0.96 per minute.60  Thus, if the Publix Companies are in reality 
one entity for purposes of this proceeding, then the largest  TRS 
operating expense that  they reported  to NECA  was for  payments 
that they  made  to themselves  for  a license  on  developmental 
technology. 

     29.  Moreover,  because  the  Publix  Companies   apparently 
failed  to  follow   proper  accounting   practices,  there   are 
additional issues  raised about  the accuracy  of their  reported 
data.  The Publix  Companies appear to  be inconsistent in  their 
accounting methodology as to whether  they use the cash basis  of 
accounting for their financial statements and record keeping,  or 
the  accrual   basis,   and  this   inconsistency   affects   the 
reliability, accuracy,  and  adequacy of  the  Publix  Companies' 
reported data.  In  addition, we  have been  unable to  ascertain 
whether certain  expenses should  have been  allocated among  the 
Publix Companies, and therefore cannot determine whether reported 
expenses were actually incurred  for their relay operation.   The 
relay operations were charged with  all of the costs that  likely 
should have been shared with or assigned to other entities within 
the  Publix  Companies  structure.   Under  NECA  and  Commission 
guidelines,  it  is  the  Publix  Companies'  responsibility   to 
demonstrate that  expenses were  not  co-mingled, and  that  each 
reported expense relates exclusively to the communication service 
the Publix  Companies purport  to  be TRS.61   The  documentation 
provided by  the Publix  Companies  is such  that we  cannot  now 
determine how the expenses relate to the purported relay service.  
The Publix Companies also reported extensive accounting and legal 
expenses related to the provision of their purported TRS  service 
that may  have  been unrelated  to  their TRS  operation.   Other 
accounting anomalies include  discrepancies between the  accounts 
and the dollar values reported to NECA, when compared with Publix 
Network's general  ledger,  as well  as  various  inconsistencies 
contained in  the  data  it provided  NECA  during  the  audit.62  
Accordingly, we will specify an  issue to determine whether,  and 
the extent to which, the Publix Companies reported inaccurate and 
inadequate financial and operating data to the Fund Administrator 
and whether, in  light of  those findings,  the Publix  Companies 
complied with the requirements of Section 64.604(c)(5)(iii)(C).63  

          2.   Inaccuracies in Reported MOU 

     30.  It also  appears that  the  Publix Companies  may  have 
billed the TRS Fund for  excessive MOU (even assuming,  arguendo, 
that they did  provide legitimate  TRS). First,  it appears  that 
they billed NECA  for time  prior to  call set-up,  and even  for 
incomplete calls,  in  violation  of  the  Commission's  rules.64  
There is also evidence that the Publix Companies billed NECA  for 
more  MOU  than  electronically  passed  through  the  switch  of 
Southern New England  Telecommunications Corporation  (``SNET''), 
its local  and interexchange  carrier.65   In October  2000,  for 
example, SNET  calculated  Publix  Network's  switch  minutes  at 
485,859 minutes.66  For that same month, Publix Network  reported 
to NECA 515,101  MOU for  TRS service (almost  30,000 minutes  in 
excess of all the minutes that passed through the switch) and the 
Publix Companies were compensated from the TRS Fund based on that 
figure. 

     31.  Moreover, the Publix Companies reported to NECA as  TRS 
MOU the sum of all TRS MOU  for each leg of a conference call  as 
if each  leg  were  separately reimbursable.   This  resulted  in 
billing the TRS Fund for multiple  MOU each time a CA provided  a 
single minute of service.  For  instance, if there were four  ADs 
on the  call communicating  through a  single CA,  the number  of 
minutes would  quadruple.67  The  Publix Companies  contend  that 
these conference call MOU were billed based upon Dr. Liebermann's 
understanding of  how a  long-distance conference  call would  be 
billed by an interexchange carrier, and argue that they  employed 
a ``reasonable  interpretation'' in  their approach.68   We  have 
reviewed the  Publix  Companies'  arguments  in  support  of  its 
interpretation of MOU  allowable for conference  calls and  CCB's 
reasons  for  rejecting  them.   As  discussed  below,  we   have 
determined that CCB has set forth the correct view of how MOU for 
conference calls should be  calculated and adopt their  reasoning 
therein.  We further find that the Publix Companies' arguments do 
not set forth a reasonable interpretation of our rules. 

     32.  Under the Publix Companies' approach, the TRS  provider 
would be reimbursed multiple times for each minute of labor of  a 
single CA.   The Publix  Companies'  analogy to  conference  call 
billing rates is not relevant  to billing TRS MOU for  conference 
calls under the TRS  rules.  As CCB has  correctly stated in  its 
correspondence with Publix Network:

     [T]he price of a conference call, or any other call, is 
     not a  factor  in  determining  reimbursement  for  TRS 
     service.   The   individual   placing   the   call   is 
     responsible for the call whether it is directly  dialed 
     or placed  through  TRS.  TRS  reimbursement  does  not 
     include the  cost of  the call  itself, but  rather  is 
     based on and derived from  the expense items listed  in 
     the annual TRS center data request.69

The proper  calculation  of  TRS-reimbursable  MOU  reflects  the 
minutes of actual relay service, irrespective of how many callers 
are on the  call.  CCB correctly  rejected the Publix  Companies' 
argument that they  reasonably determined  that compensation  for 
each leg of the call was allowable. 

     33.  Thus, it appears that  the Publix Companies billed  MOU 
that include  minutes  where there  was  no actual  relay  (i.e., 
including call set up  or time after the  end of relay  service), 
and charged  multiple  times  for the  same  relay  service.   In 
addition, it appears that the Publix Companies deliberately  kept 
the telephone connections open between the ADs and the CAs,  even 
when no communication was actually occurring.  In other words, it 
appears  that  the  Publix  Companies  generated  idle  air  time 
intentionally designed to  inflate MOU.  Any  MOU generated as  a 
result of such  a practice  would not constitute  minutes of  use 
within the Act and the Commission's rules.  Similar schemes  have 
been held to be non-compensable where the purpose of the activity 
was merely to generate payments.  For example, the Commission has 
stated that  the  use  of  an autodialer  in  order  to  generate 
payphone compensation by calling toll free numbers billed to  the 
called party  would  not only  be  a  violation of  the  Act  and 
Commission's rules, but could also constitute wire fraud.70   The 
North  Carolina  Public  Utilities   Commission  has  held   non-
compensable the minutes  of use generated  by the maintenance  of 
open switches 23 hours and 59 minutes a day for the sole  purpose 
of generating minutes of use for reciprocal compensation.71   The 
North Carolina Commission looked behind the mechanical generation 
of minutes of use to whether  there were actual end users of  the 
services.72  By analogy to these precedents, we direct the ALJ to 
determine whether the  MOU generated  by creating  idle air  time 
were compensable  MOU.   As  noted above,  we  believe  that  the 
activities conducted by the  Publix Companies did not  constitute 
TRS and that consequently the Publix Companies were not  entitled 
to any  payments  from  the  TRS  Fund.   Nevertheless,  assuming 
arguendo, that legitimate TRS service  was offered by the  Publix 
Companies, we  instruct the  ALJ, using  the standards  governing 
calculation of MOU as stated  herein, to determine the extent  to 
which the Publix Companies overbilled NECA for MOU or whether any 
additional payments are due to the Publix Companies. 

     C.   Whether   the   Publix   Companies   Made   Intentional 
          Misrepresentations or Willful Material Omissions to the 
          Commission

     34.  Commission applicants,  permittees, and  licensees  may 
not ``in any response to Commission correspondence or inquiry, or 
in  any  application,  pleading,  report  or  any  other  written 
statement submitted to the Commission, make any misrepresentation 
or willful material  omission bearing  on any  matter within  the 
jurisdiction of the Commission.''73   It appears that the  Publix 
Companies may have  violated this  rule or  otherwise engaged  in 
misrepresentations or  lack of  candor on  multiple  occasions.74  
For example, Publix  Network's Application to  be certified as  a 
TRS provider states that  ``Publix Network TRS  meets all of  the 
FCC's operational, technical and functional minimum standards set 
forth in 47 C.F.R. Section  64.604, and in some respects  exceeds 
those standards.''75   As discussed  above,  this appears  to  be 
false.   Moreover,  as  discussed  above,  the  Publix  Companies 
repeatedly told the Commission  that their relay facilities  were 
operational 24 hours a day, seven days a week, but, as the Publix 
Companies admit,  that  does not  appear  to be  have  been  true 
between the time  of the  application and the  NECA audit.76   In 
addition, Publix  Network's  Application states  that  the  relay 
service offers consumers equal access to interexchange carrier of 
choice, and that  too appears to  be inaccurate.  Other  apparent 
violations of  the  mandatory  minimum  standards  are  discussed 
above.  Given the apparent pervasive pattern of violations of the 
Act and Commission's rules at  issue here, it appears that  these 
inaccurate  statements  may  have   been  intentional  and   thus 
constitute  unlawful   misrepresentation  or   lack  of   candor.  
Accordingly, we will specify an issue to determine the extent  to 
which the  Publix Companies  made misrepresentations  or  willful 
material omissions, or  lacked candor, to  the Commission or  its 
agents. 

     35.  It appears  that the  Publix  Companies may  also  have 
violated a specific  requirement that TRS  providers report  true 
and accurate information  to the  Fund Administrator  as part  of 
their duty to complete required  FCC reporting forms used by  the 
Administrator to determine  annually the  compensation rates  for 
TRS.    All    carriers   are    required   to    complete    the 
Telecommunications Reporting Worksheet, FCC Form 499-A  annually, 
(``Worksheet'') in  order  to  enable the  TRS  Administrator  to 
collect the necessary  funding to compensate  the TRS  providers.  
Section 220(e) of  the Act  imposes a duty  of  truthfulness  and 
accuracy in  accounting  matters on  common  carriers.   Carriers 
filing false information are subject  to fine or imprisonment  as 
specified in  Section 220(e)  of the  Act.  It  appears from  the 
evidence that the Publix  Companies may have  failed to submit  a 
number of annual  reports required  under the Act,  and may  have 
willfully provided false  information or  willfully neglected  or 
failed to provide  correct information on  their 2001  Worksheet.  
We therefore will  specify an  issue to determine  the extent  to 
which the Publix Companies filed false information on this or any 
other Worksheet that they submitted to the Fund Administrator. 

     36.  As  a  general  matter,  it  appears  that  the  Publix 
Companies  may   have  engaged   in   a  pervasive   pattern   of 
misrepresentation in order to obtain payments from the TRS  Fund.  
There is  evidence that  they may  have provided  a sham  service 
which they denominated TRS but  which may have been nothing  more 
than self-directed  calls  among  employees  of  closely  related 
corporate entities.  It appears that rather than providing actual 
TRS between legitimate  end users, employees  initiated calls  to 
other employees, and that the calls may have contained periods in 
which there was  no conversation  but vast amounts  of dead  time 
intended solely  to increase  MOU for  future reimbursement.   It 
appears that the Publix  Companies deliberately inflated the  MOU 
they reported to  NECA by  including minutes where  there was  no 
actual relay (i.e., including call set  up or time after the  end 
of relay service); charging for more minutes than passed  through 
the SNET  switch;  billing  multiple times  for  the  same  relay 
service; and deliberately generating  MOU by ``dotting'' to  keep 
the lines open  when there was  no conversation.  The  deliberate 
manipulation of  MOU  or deliberate misrepresentations  regarding 
the ``TRS''  services  being  provided  in  order  to  obtain  or 
increase payments from the  TRS Fund would  not only violate  the 
Act and  Commission  rules  but could  also  constitute  criminal 
behavior.77  We direct the  ALJ to consider  the totality of  the 
evidence and determine whether there  was a pervasive pattern  of 
misrepresentation or lack of candor. 

     D.   Whether the Publix  Companies Should Remain  Authorized 
          to Act as a Common Carrier

     37.  It appears  that  the  Publix Companies  engaged  in  a 
pervasive pattern of  rule violations  and misrepresentations  in 
order to obtain millions of dollars in payments from the TRS Fund 
to which  they  were not  entitled.   It thus  appears  that  the 
continued operation of the Publix  Companies as a common  carrier 
may not serve  the public  convenience and  necessity within  the 
meaning of Section 214 of the  Act.  We therefore direct the  ALJ 
to determine whether  the Publix Companies'  blanket Section  214 
authorization should be revoked;  such revocation would make  the 
Publix Companies  ineligible  as  a  common  carrier  for  future 
compensation from  the  TRS  Fund.   Further,  in  light  of  the 
egregious nature  of the  Publix Companies'  apparently  unlawful 
activities, we  direct  the  ALJ to  determine  whether  specific 
Commission  authorization  should  be  required  for  the  Publix 
Companies,  or  the  principal   or  principals  of  the   Publix 
Companies, to provide any  interstate common carrier services  in 
the future.78

     E.   Whether  the  Publix  Companies  are  Entitled  to  Any 
          Portion of the  Payments from  the TRS  Fund that  They 
          Requested or Received

     38.  If the Publix Companies did not provide interstate  TRS 
within the meaning of the Act  and the Commission's rules or  did 
not substantially  comply with  the mandatory  minimum  standards 
required under the Act and the  rules, then, as a matter of  law, 
they were and are not entitled to payment from the TRS Fund.   In 
addition, the Publix Companies are entitled to reimbursement from 
the TRS Fund for MOU only as properly calculated under our  rules 
and accurately reported.  Accordingly,  the ALJ is to  determine, 
in light of  the evidence adduced,  whether the Publix  Companies 
are entitled to  all or  any portion  of the  payments that  they 
requested or received from the  TRS Fund.  If the ALJ  determines 
that the Publix Companies did  not provide interstate TRS  within 
the meaning of  the Act  and the  Commission's rules  or did  not 
substantially comply with Section 64.604  for any period of  time 
for  which   Publix   Companies  reported   MOU   and   requested 
reimbursement from the TRS  Fund, then, as a  matter of law,  the 
ALJ must conclude that, for any such periods of time, the  Publix 
Companies were not entitled to any such payments.  Therefore,  to 
the extent that the ALJ determines that the Publix Companies were 
eligible for any TRS Fund reimbursements, the ALJ must  determine 
the number  of MOU  for which  Publix Companies  are entitled  to 
receive payment from  the TRS Fund,  based on the  number of  MOU 
reported by  Publix Companies  for such  period, but  to  exclude 
duplicative billings  for  multiple  legs  of  conference  calls, 
reported MOU that cannot be documented or verified, or any  other 
improperly reported MOU. 





     F.   Whether Piercing the Corporate Veil is Appropriate

     39.  It appears  that the  Publix Companies  are, for  legal 
purposes, one  and the  same,  and that  they should  be  jointly 
liable for any penalties and/or forfeitures and/or reimbursements 
that may  result  from a  hearing.   The FCC  has  found  several 
criteria useful in determining whether to ``pierce the  corporate 
veil.''   The  seminal  case  was  decided  in  1969,  where  the 
Commission stated:

          The fact  that  GTI  and  GTEC  are  separate 
          corporate  entities  is  not   determinative.  
          Where the  ownership  of  stock  is  used  to 
          dominate and control the subsidiary in such a 
          manner and to such  extent that it becomes  a 
          mere agency or instrumentality of the parent, 
          the  separate  corporate   entities  may   be 
          disregarded.  Furthermore, separate corporate 
          structures may be  ignored where the  purpose 
          of a  statutory  scheme or  regulation  would 
          otherwise  be   frustrated.    The   critical 
          question, therefore, is  whether the  conduct 
          of the . . . corporations in the light of the 
          relationship which exists among them requires 
          that the legal concept of separate  corporate 
          identities  be   disregarded  in   order   to 
          preserve the integrity of section 214 and  to 
          prevent the  respondents from  defeating  the 
          purpose  and  objective   of  the   statutory 
          provisions for certification.79

Other criteria  include:  (1)  a  common  identity  of  officers, 
directors  and  shareholders;  (2)  sharing  the  same  principal 
offices; (3) closeness of relationship between entities.80

     40.  In this case, it appears  that Dr. Liebermann runs  the 
affiliated entities  in  question with  little  or no  regard  to 
corporate identity.  For instance, most  of the expenses for  his 
companies are paid  from a  single account.   Other expenses  are 
often paid from his personal checking account.  For example,  two 
agreements between  Publix Network  and RCC,  and between  Publix 
Network and SignTel provide for a number of arrangements  between 
Publix Network and  these companies that  relate to how  expenses 
are paid  and  how  Publix Network  compensates  RCC/SignTel  for 
``conferencing technology.''   Both  agreements require  RCC  and 
later SignTel to ``perform  accounting and transact payments  for 
Publix [Network].''81   Evidence  supports the  proposition  that 
this is exactly what RCC and  SignTel did.  It also appears  that 
Dr. Liebermann's  companies  may  have  shared  common  officers, 
directors, and/or shareholders.

     41.  The  use   of  different   office  locations   by   Dr. 
Liebermann's companies is relatively new.  It appears that at one 
time, both the CAs  and the moderators were  located in the  same 
building.  Even if  these entities are  now located in  different 
offices, such  a change  is not  dispositive.  In  the  Mansfield 
Journal  case,  the  two  entities  in  question  were   separate 
corporations located over fifty miles apart.  The court held that 
the Commission  could base  its finding  that the  entities  were 
under common control upon the  ``true locus of control''  because 
of the high  level of  control exercised  by the  owners of  both 
entities.82  Here, it appears that the true locus of control  was 
with Dr.  Liebermann, sole  owner of  the entities  in  question, 
whether these companies  operated in  the same  building or  were 
miles apart.

     42.  It is also no defense if Dr. Liebermann's contends that 
his  companies,  other  than  Publix  Network,  are  not   common 
carriers.  The  United  States Court  of  Appeals for  the  Fifth 
Circuit held that activities of non-common carrier affiliates may 
be imputed to the common  carrier parent.83  It appears that  Dr. 
Liebermann's other entities were critical for his operation.   In 
conversations between  Dr.  Liebermann's counsel  and  Commission 
Staff, counsel does not  hide the fact  that the monies  received 
from the TRS Fund went  through Publix Network and into  SignTel, 
and represented most,  if not  all, of  SignTel's revenues.   The 
goals of the Communications Act and our rules would be frustrated 
if  the  Commission   cannot  hold   these  affiliated   entities 
responsible, because it appears that funds from the TRS Fund were 
transferred directly  from  the purported  TRS  provider,  Publix 
Network, to these  affiliated entities, and  that any  reasonable 
chance for  recovery of  such funds  if wrongdoing  is found,  or 
payment of any forfeiture is  imposed upon Dr. Liebermann,  could 
well require the assets of his affiliated entities.  Accordingly, 
we will specify an issue to determine whether, and to the  extent 
which, in  light of  the  legal standards  set forth  above,  the 
Publix Companies should be considered one and the same entity for 
purposes  of  this  proceeding,  for  purposes  of  issuing   any 
forfeiture order,  and/or for  purposes  of any  debt  collection 
action that may ensue as a result of this proceeding.

                         IV.  CONCLUSION

     43.  In light of the totality of the information now  before 
us, an evidentiary hearing is  required to determine whether  the 
continued operation of the Publix  Companies as a common  carrier 
would serve  the  public  convenience and  necessity  within  the 
meaning  of  Section  214  of  the  Act.   Further,  due  to  the 
potentially egregious nature of the Publix Companies'  apparently 
unlawful activities, they will be  required to show cause why  an 
order to cease and  desist from the  provision of any  interstate 
common  carrier  services  without  the  prior  consent  of   the 
Commission should  not  be  issued.  In  light  of  the  apparent 
violations outlined  above, it  also  appears that  a  forfeiture 
should be levied against the Publix Companies.  Moreover, because 
our investigation has  raised substantial  questions whether  the 
Publix Companies are entitled  to any of  the payments that  they 
have received and requested from the TRS Fund, we will specify an 
issue to determine the extent  to which the Publix Companies  are 
eligible for any payments. 


                      V.  ORDERING CLAUSES

     44.  ACCORDINGLY, IT IS ORDERED  that, pursuant to  Sections 
4(i) and 214 of  the Communications Act of  1934, as amended,  47 
U.S.C.   154(i) and  214, the  principal or  principals of  the 
Publix Companies ARE  DIRECTED TO  SHOW CAUSE  why the  operating 
authority bestowed on  the Publix Companies  pursuant to  Section 
214 of the Communications Act of 1934, as amended, should not  be 
REVOKED.

     45.  IT IS FURTHER ORDERED that, pursuant to Section  312(b) 
of the  Communications  Act of  1934,  as amended,  47  U.S.C.   
312(b), the principal or principals  of the Publix Companies  ARE 
DIRECTED TO SHOW CAUSE why an  order directing them TO CEASE  AND 
DESIST FROM  THE  PROVISION  OF  ANY  INTERSTATE  COMMON  CARRIER 
SERVICES without the prior consent  of the Commission should  not 
be issued.

     46.  IT IS FURTHER ORDERED that the hearing shall be held at 
a time and location to  be specified by the Chief  Administrative 
Law Judge  in  a  subsequent  order.  The  ALJ  shall  apply  the 
conclusions of law set forth in  this Order to the findings  that 
he makes in that hearing, upon the following issues:

          (a)  to  determine  whether  the  service  the   Publix 
               Companies provided met the definition of TRS under 
               Section 225(a)(3) of the Act and Section 64.601(7) 
               of the Commission's rules; 

          (b)  to determine whether the Publix Companies violated 
               Section 64.604(a)(1) of the Commission's rules; 

          (c)  to determine whether the Publix Companies violated 
               Section  225(d)(1)(F)  of  the  Act  and   Section 
               64.604(a)(2)(i) of the Commission's rules; 

          (d)  to determine whether the Publix Companies violated 
               Section 64.604(b)(3) of the Commission's rules;

          (e)  to determine whether the Publix Companies violated 
               Section 64.604(b)(4) of the Commission's rules; 

          (f)  to determine whether the Publix Companies violated 
               Section 64.604(c)(3) of the Commission's rules; 

          (g)  to determine whether the Publix Companies violated 
               Section 64.604(c)(5)(iii)(C)  of the  Commission's 
               rules; 

          (h)  to determine whether the Publix Companies violated 
               Section 64.604(c)(5)(iii)(E)  of the  Commission's 
               rules; 

          (i)  to determine  whether  the MOU  generated  by  the 
               Publix Companies  constituted MOU  compensable  by 
               the TRS Fund;


          (j)  to determine whether the Publix Companies violated 
               Section 220(e) of the Act  by not filing true  and 
               accurate data in FCC Form 499-A; 

          (k)  to determine whether the Publix Companies  engaged 
               in a  pervasive  pattern of  misrepresentation  or 
               lack of candor;

          (l)  to  determine   whether   the   Publix   Companies 
               misrepresented  or  willfully  omitted  facts   in 
               written materials submitted to the Commission,  in 
               violation of 47 C.F.R. Section 1.17;

          (m)  to determine whether, with  respect to the  issues 
               (a)  through  (l)  specified  above,  the   Publix 
               Companies knew or should have known that they were 
               committing such  violations,  whether  they  acted 
               with the intention of violating a known duty;  and 
               whether they  acted  negligently,  or  with  gross 
               neglect of a known duty;

          (n)  to  determine   whether   the   Publix   Companies 
               substantially complied with the requirements of 47 
               C.F.R. Section 64.604;

          (o)  to the extent that the  ALJ finds that the  Publix 
               Companies  were   eligible   for  any   TRS   Fund 
               reimbursements  they  requested  or  received,  to 
               determine the number of  MOU for which the  Publix 
               Companies were entitled  to receive  reimbursement 
               from the TRS Fund;

          (p)  to determine,  in  light  of  all  the  foregoing, 
               whether Publix Network's  authorization to operate 
               as a common carrier should be revoked;

          (q)  to  determine  whether,  in   light  of  all   the 
               foregoing, Publix Network,  the Publix  Companies, 
               and/or its principals should  be ordered to  cease 
               and desist from  the provision  of any  interstate 
               common carrier services without the prior  consent 
               of the Commission;

          (r)  to determine  whether, in  light of  the  evidence 
               adduced pursuant to  the foregoing issues,  Publix 
               Network,  Publix  Relay,  SignTel,  RCC,  Customer 
               Attendants, Focus  Group,  and any  other  related 
               company under  the control  and direction  of  Dr. 
               Raanan Liebermann,  should, for  purposes of  this 
               proceeding, be considered one and the same entity.

     47.  IT IS  FURTHER  ORDERED  that  the  Chief,  Enforcement 
Bureau, shall be a party to the designated hearing.  Pursuant  to 
Section 312(d) of  the Communications  Act of  1934, as  amended, 
both the burden of  proceeding and the burden  of proof shall  be 
upon  the  Enforcement  Bureau  as  to  issues  (a)  through  (r) 
inclusive.

     1.        48.  IT  IS   FURTHER  ORDERED   that,  to   avail 
themselves of  the  opportunity to  be  heard, the  principal  or 
principals of the Publix  Companies, pursuant to Section  1.91(c) 
of the Commission's rules, SHALL FILE with the Commission  within 
30 days  of  the mailing  of  this  Show Cause  Order  a  WRITTEN 
APPEARANCE stating that a principal or other legal representative 
from the Publix Companies will appear at the hearing and  present 
evidence on the matters  specified in the  Show Cause Order.   If 
the Publix Companies fail to file a written appearance within the 
time specified, the Publix Companies' right to a hearing SHALL BE 
DEEMED TO BE WAIVED.  In the event that the right to a hearing  a 
hearing  is   waived,  the   Presiding  Judge,   or  the   Chief, 
Administrative  Law  Judge  if   no  Presiding  Judge  has   been 
designated, SHALL  TERMINATE the  hearing proceeding  as to  that 
entity and CERTIFY  this case  to the Commission  in the  regular 
course of business, and an appropriate order shall be entered.

     49.  IT  IS  FURTHER  ORDERED  that,  irrespective  of   the 
resolution of  the foregoing  issues,  the ALJ  shall  determine, 
pursuant  to  Section  503(b)(3)(A)  of  the  Act,  47  U.S.C.   
503(b)(3)(A), whether  an Order  of  Forfeiture shall  be  issued 
against  any  or   each  of  the   Publix  companies  and   their 
principal(s) for  having  willfully  and/or  repeatedly  violated 
Sections   1.17,   64.601(7),   64.604(a)(1),    64.604(a)(2)(i), 
64.604(b)(3), 64.604(b)(4),  64.604(c)(3),  64.604(c)(5)(iii)(C), 
and/or 64.604(c)(5)(iii)(E) of the Commission's rules, 47  C.F.R. 
 1.17, 64.601(7), 64.604(a)(1), 64.604(a)(2)(i),  64.604(b)(3), 
64.604(b)(4),    64.604(c)(3),    64.604(c)(5)(iii)(C),    and/or 
64.604(c)(5)(iii)(E)  and/or  Sections   220(e),  225(a)(3)   and 
225(d)(1)(F) of  the  Act, 47  U.S.C.   220(e),  225(a)(3)  and 
225(d)(1)(F).   For   each  violation,   the  maximum   potential 
forfeiture liability for the parties, joint and separately, shall 
be the statutory maximum of $120,000 per violation up to a  total 
of $1,200,000 for each continuing violation committed by a common 
carrier.  This figure is  set based upon  the seriousness of  the 
alleged  violations,  the  continuing   nature  of  the   alleged 
violations,  the  apparent   culpability  of   each  party,   the 
information available to us concerning the financial condition of 
each party, and  the ability  of each  party to  profit from  the 
alleged rule and/or statutory violations.

     50.  IT IS FURTHER ORDERED that this document constitutes  a 
NOTICE  OF   OPPORTUNITY   FOR  HEARING   pursuant   to   Section 
503(b)(3)(A) of the  Communications Act of  1934, as amended,  47 
U.S.C.    503(b)(A),  for  the  potential  forfeiture  liability 
outlined above.

     51.  IT IS FURTHER ORDERED that a copy of this ORDER TO SHOW 
CAUSE AND  NOTICE OF  OPPORTUNITY FOR  HEARING shall  be sent  by 
certified  mail,  return   receipt  requested,   to  Dr.   Raanan 
Liebermann, Publix Network Corporation,  79 Bayard Avenue,  North 
Haven, CT 06473, and Gerard  Waldron, Esq., Covington &  Burling, 
1201 Pennsylvania Avenue, N.W., Washington, D.C., 20004.

                              FEDERAL COMMUNICATIONS COMMISSION



                              Marlene H. Dortch
                              Secretary

_________________________

1    For purposes of this order, the Publix Companies refers  to 
Publix Network  Corporation (``Publix''),  Customer  Attendants, 
LLC  (``Customer  Attendants''),  Revenue  Controls  Corporation 
(``RCC''), SignTel,  Inc. (``SignTel''),  and Focus  Group,  LLP 
(``Focus Group'').

2    47 C.F.R.  64.601(7).

3    Id.  64.601(5).

4    Id.  64.604(c)(5)(iii)(E).

5    47 U.S.C.  225(c).

6    47 C.F.R.  64.604(c)(5)(iii).

7    Id.  64.604(c)(5)(ii).

8    Id.  64.604(c)(5)(iii)(A).

9    Id.  64.604(c)(5)(iii)(E).

10   Id.

11   Id.

12   Id.  64.604(c)(5)(iii)(F).

13   Id.  64.604(c)(5)(iii)(E).

14   47 U.S.C.  225(d)(1)(A)-(G).

15   47 C.F.R.  64.604.

16   47 U.S.C. 225(d)(1)(C), (F).

17   Several of the requirements in Section 64.604 were modified 
by  the  Commission  in  2000.   See  Telecommunications   Relay 
Services and  Speech-to-Speech  Services  for  Individuals  with 
Hearing and Speech  Disabilities, Report and  Order and  Further 
Notice of Proposed Rulemaking, 15 FCC Rcd 5140 (2000).

18   Publix Network is  the entity within  the Publix  Companies 
that reports financial and operating data to NECA.

19   From January  1999  through  January 2001,  NECA  paid  the 
Publix Companies $6,649,370.   For the  months February  through 
April, 2001, the  Publix Companies  requested payments  totaling 
$3,410,140 from the TRS Fund.   NECA withheld payments on  these 
and future  requests.  In  June 2001,  the Chief  of the  Common 
Carrier Bureau  affirmed NECA's  decision to  withhold  payment.  
See Letter from Dorothy T. Attwood, Chief, Common Carrier Bureau 
(``CCB''),   Federal   Communications   Commission   to   Raanan 
Liebermann, President, Publix Network Corporation, June 25, 2001 
(``June CCB Letter'').

20   See 47 C.F.R.  64.604(c)(5)(C).

21   Letter from David  H. Solomon,  Chief, Enforcement  Bureau, 
Federal  Communications   Commission   to   Raanan   Liebermann, 
President, Publix Network Corporation, June 25, 2001.

22   See  Publix's  Application  for  Interstate  TRS   Facility 
Certification (``Application''),  filed by  Publix on  April  6, 
1998.

23   See June CCB Letter.

24   Id. at 2.

25   Id.

26   See letter from Gerard J.  Waldron, Esq. to David L.  Hunt, 
Senior  Attorney,  Enforcement  Bureau,  Federal  Communications 
Commission, July 23,  2001; letter from  Dr. Raanan  Liebermann, 
President, Publix Network Corporation, to David L. Hunt,  Senior 
Attorney, Enforcement Bureau, Federal Communications Commission, 
July 23, 2001  (``Publix Reply  to EB  Subpoena''); letter  from 
Gerard J. Waldron, Esq., to Sanford S. Williams, Staff Attorney, 
Common Carrier Bureau,  Federal Communications Commission,  July 
23, 2001.  (``July Publix Letter to CCB'').  Documents  produced 
with the Publix Reply to EB Subpoena are hereinafter referred to 
as ``Publix Response to EB Subpoena Request No. [the request and 
page numbers  will then  be added  for each  citation] July  23, 
2001.''

27   If the Publix Companies are found not to be entitled to any 
portion of the monies that they have received from the TRS Fund, 
the Commission will follow its normal debt collection procedures 
to recover all such payments. 

28   47 C.F.R.  64.601(7), see also 47 U.S.C.  225(a)(3).

29   47 C.F.R.  64.604(c)(5)(F)(3).

30   Telecommunications Relay Services,  and the Americans  with 
Disabilities Act  of 1990,  Third Report  and Order,  8 FCC  Rcd 
5300, 5305, (``Third Report and Order'') (emphasis added).

31   47 C.F.R.  64.601(5).

32   It appears  that  not  all of  the  conference  calls  that 
involved a moderator  were placed  by the  moderator.  There  is 
evidence that often the CAs  would call the ADs in  anticipation 
of receiving a call from the moderator.

33   Pursuant to Section 64.604(a)(2)(ii), end users can request 
that  the  CA   provide  a   summary  instead   of  a   verbatim 
transliteration  of  the  entire  conversation.   However,   the 
evidence  suggests  that  the  simple  responses  the  moderator 
received were part of the scheme to obtain monies illegally from 
the  TRS  Fund   by  creating  the   appearance  of  a   relayed 
conversation.  In other words,  moderators were included in  the 
end user (an AD) to CA  to end user (the moderator) triangle  to 
look more like legitimate TRS service.

34   Telecommunications Services  for Individuals  with  Hearing 
and Speech Disabilities, and the Americans with Disabilities Act 
of 1990, First Report and Order and Request for Comments, 6  FCC 
Rcd 4657, 4657 (``First Report and Order'').

35   47 U.S.C.  225(c).

36   136 Cong. Rec H2421-02, H2431 (1990).

37   47 C.F.R.  64.604(c)(5)(iii)(F).

38   See, e.g., Hickel v. Oil  Shale Corp., 400 U.S. 48  (1970); 
Kent v. United  of Omaha Life  Ins. Co., 96  F.3d 803, 807  (6th 
Cir. 1996); Donato v. Metropolitan  Life Ins. Co., 19 F.3d  375, 
382-83 (7th Cir. 1994); cf. Cox Cable Tucson, Inc. v. Ladd,  795 
F.2d 1479, 1485-7 (9th Cir. 1986).

39   47  U.S.C.     225(d)(1)(C);   see   also  47   C.F.R.    
64.604(b)(4).

40   47  U.S.C.     225(d)(1)(F);   see   also  47   C.F.R.    
64.604(a)(2)(i).

41   47 C.F.R   64.604(b)(3).

42   Id.  64.604(c)(1).

43   Id.  64.604(c)(3).

44   Id.  64.604(c)(5)(iii)(C).

45   Id.  64.604(a)(1).

46   See Publix Response to EB Subpoena Request No. 12, P002086, 
July 23,  2001.   The  Publix Companies  assert  that  they  did 
improve on  their CAs'  typing skills,  managing to  change  the 
failure rate  under the  60-words-per-minute standard  from  100 
percent to 88 percent, and  later improved further to a  failure 
rate of 64 percent.  Id.

47   47 C.F.R.  64.604(a)(2)(i).

48   Id.  64.604(b)(3).

49   First Report and Order at 4662.

50   Id.

51   See July Publix Letter to CCB, p. 3.

52   47 C.F.R.  64.604(b)(3).

53   Id.  64.604(b)(4).

54   Application at 5.

55   See July Publix Letter to CCB at 4. 

56   47 C.F.R.  64.604(c)(3).

57   Third Report and Order at 5300.

58   47 C.F.R.  64.604(c)(5)(iii)(C) .

59   Id.

60   See Publix Response to EB Subpoena Request No. 16, P002186-
93,  July  23,  2001  (``RCC/SignTel  Agreements'').   The   two 
agreements are identical except that one pertains to RCC and the 
other to SignTel.

61   See 47  C.F.R.   64.604(c)(5)(iii)(C).   Further,  Section 
1001 of Title 18 of the United States Code requires that persons 
not knowingly and willfully  make materially false,  fictitious, 
or fraudulent statements  or representations  to a  governmental 
entity.  See 18 U.S.C.  1001.

62   For instance, the  Publix Network's  records indicate  that 
its actual average  per-minute expenses for  1999 and 2000  were 
$0.642 and $0.827 respectively. Yet, Publix Network also asserts 
that its charges include $0.96 per minute royalty expense.

63   See para  35,  infra,  for  issue  of  whether  the  Publix 
Companies violated the requirements of Section 220(e) of the Act 
by providing false information on any TRS Fund Worksheet.  

64   See 47 C.F.R.  64.604(c)(5)(iii)(E).

65   See, e.g., Publix  Response to EB  Subpoena Request No.  7, 
P000313, July 23, 2001.  Here, the record indicates that  Publix 
Network reported more  TRS MOU than  actual minutes that  passed 
through SNET's switch. Switch minutes are those minutes of  time 
where a  circuit is  open or  an electronic  path is  completed.  
Conversation  minutes   reflect   actual  call   time   when   a 
conversation can occur.

66   See Publix Response to EB Subpoena Request No. 7,  P000309, 
July 23, 2001.

67   For example, if there were a four-hour conference call with 
four ADs, the  Publix Companies  would report 960  TRS MOU  (240 
minutes X 4 ADs) to NECA for reimbursement, whereas they  should 
have billed the TRS Fund for only 240 TRS MOU.  This assumes, of 
course, that any of the TRS MOU reported by the Publix Companies 
were legitimate.

68   See July Publix Letter to CCB at 5.

69   See June CCB Letter; see also Letter from Maripat  Brennan, 
Director of Fund Administration, NECA to Raanan Liebermann, CEO, 
Publix  Network  Corporation,  May  10,  2001  (``May  10   NECA 
Letter'').

70   See, e.g., Pay Telephone Reclassification and  Compensation 
Provisions of  the Telecommunications  Act of  1996, Report  and 
Order, (1996) at 20574-75.  

71   BellSouth Telecommunications,  Inc.  v.  US  LEC  of  North 
Carolina Inc., 201 PUR 4th 58, 89-91 (2000).

72   Id. at 88.

73   47 C.F.R.  1.17.

74   We note that, by definition, misrepresentation and lack  of 
candor involve  intent.  See  Trinity Broadcasting  of  Florida, 
Inc. et al., Initial Decision, 10 FCC Rcd 12,020, 12,063 (1995); 
Cannon Communications Corp.  et al., Decision,  5 FCC Rcd  2695, 
2700 (1990); MCI Telecommunications  Corp., Order and Notice  of 
Apparent Liability,  3  FCC  Rcd  509,  512  (1988);  Fox  River 
Broadcasting, Inc., et al, Order, 93 FCC 2d 127, 129 (1983).

75   Application at 2.  

76   See, eg., July Publix Letter to CCB at 4.

77        See, e.g., United States v.  Henny, 527 F.2d 479  (9th 
Cir. 1976),  cert. denied 425 U.S. 991 (1976) (wire fraud  found 
when carrier attempted deliberately  to inflate payments from  a 
long distance  toll  settlement  pool by,  among  other  things, 
misreporting length of calls, inflating the number of calls, and 
reporting free employee calls as compensable revenue  generating 
toll calls).

78   See CCN, Inc., et  al., Order to Show  Cause and Notice  of 
Opportunity for Hearing, 12 FCC Rcd 8547 (1997).

79   Petition  by  Telecable  Corp.  to  Stay  Construction   or 
Operation of  a CATV  System in  Bloomington and  Normal,  Ill., 
Decision, 19 FCC 2d 574, 587 (1969) (footnotes omitted).

80   See  generally  Petition  by  Dimension  Cable  TV,   Inc., 
Morrisonville, N.Y., to Stay Construction or Operation of a CATV 
System Near Plattsburg, N.Y.,  Memorandum Opinion and Order,  27 
FCC 2d 43 (1971).

81   See RCC/SignTel Agreements.

82   See Mansfield Journal  Co. v.  FCC, 180 F.2d  28, 37  (D.C. 
Cir. 1950) (``Mansfield Journal'').

83   General Telephone Co. of the  Southwest, et al., v.  United 
States and FCC, et al., 449 F.2d 846, 855 (5th Cir. 1971).