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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
World Communications )
Satellite Systems, Inc. ) File No. EB-03-TC-038
) NAL/Acct. No. 200332170006
Apparent Liability for ) FRN: 0009553652
Adopted: February 17, 2004 Released: February 18,
By the Chief, Enforcement Bureau:
1. In this Forfeiture Order (``Order''), we
issue a monetary forfeiture in the amount of ten thousand dollars
($10,000) against World Communications Satellite Systems, Inc.
(``WCSS'') for violating a Commission order by failing to respond
to a directive of the Enforcement Bureau (``Bureau'') to provide
certain information and documents.
2. The facts and circumstances surrounding
this case are set forth in the Notice of Apparent Liability
previously issued by the Bureau and need not be reiterated at
length. On July 15, 2003, the Bureau sent a letter of inquiry to
WCSS concerning allegations that WCSS may have engaged in the
unauthorized conversion of a consumer's telephone service.1
After obtaining extensions of time,2 and after submitting a
request to the Commission under the Freedom of Information Act
(``FOIA'') to which the staff responded,3 WCSS filed a response
on August 27, 2003.4 WCSS did not provide any of the information
or documents required in the Letter of Inquiry, but instead
argued that the Commission did not have jurisdiction to require
the information and that the Bureau's failure to respond more
fully to the FOIA request was unduly prejudicial.5 On September
9, 2003, the Chief, Enforcement Bureau, issued a Notice of
Apparent Liability for Forfeiture in the amount of ten thousand
dollars ($10,000)6 for apparently violating our directive to
provide specified information and documents. WCSS filed a
response to the NAL on October 9, 2003.7
3. In its Response, WCSS argues that (1) it
responded appropriately to the Letter of Inquiry by objecting to
it on jurisdictional grounds, which it claims it may do under the
Federal Rules of Civil Procedure; (2) the Commission has
permitted large carriers such as SBC Communications to make a
good faith challenge to a Letter of Inquiry and should permit
WCSS to do the same; (3) the Bureau erroneously applied res
judicata to reject WCSS's objections to the Letter of Inquiry;
(4) WCSS was not required to respond to the Letter of Inquiry
because the Bureau was bound by state adjudications concerning
the same conduct; (5) the Bureau's failure to provide documents
in response to WCSS's Freedom of Information Act (FOIA) request
justified WCSS's refusal to provide the requested information;
(6) there was no repeated violation because there was only one
request for information; (7) the Bureau failed to consider ``the
nature, circumstances, and gravity of the violation and, with
respect to the violator, the degree of culpability, any history
of offenses, ability to pay, and such other matters as justice
may require;'' and (8) there was no willful or egregious
violation because WCSS only took action to defend itself.
4. We find that these arguments are without
merit, and the proposed forfeiture is warranted. WCSS claims,
citing the Commission's decision in SBC Communications, Inc.,8
that the Commission's investigative authority follows the Federal
Rules of Civil Procedure, which permits parties to object to
discovery requests.9 WCSS's reliance on SBC Communications,
Inc., however, is misplaced. In that case, the Commission found
that Sections 4(i) and 4(j), among others, of the Communications
Act10 provided authority for the Commission's requirement that
responses to Commission inquiries be supported by a sworn
statement.11 In the course of its discussion, the Commission
noted that both the Commission's procedural rules for formal
complaints and the Federal Rules of Civil Procedure require sworn
statements.12 At no point in the discussion did the Commission
state that an investigative inquiry must adhere to the Federal
Rules of Civil Procedure. The Commission has never concluded
that its broad investigatory authority is limited or
circumscribed by the Federal Rules of Civil Procedure, and we
decline to do so here.
5. Further, WCSS argues that the Commission
indicated in SBC Communications, Inc. that SBC could have raised
a good faith challenge to the order in question, and that the
Bureau's purportedly different treatment of WCSS shows that it
favors large over small companies.13 Again, WCSS's reliance on
SBC Communications, Inc. is misplaced. In that case, the
Commission said that SBC could have raised a good faith challenge
by seeking a stay of the Commission's order. SBC failed to do so,
and the Commission ultimately imposed a $100,000 forfeiture on
SBC.14 A stay, of course, must be sought in advance of the
action sought to be stayed. WCSS did not seek a stay in advance
of the date for filing the response, but did seek various
extensions, several of which the Bureau granted. When the due
date of the response arrived, WCSS refused to supply the
information requested. Thus, a forfeiture is plainly warranted
here and is not inconsistent with SBC Communications, Inc.15
6. Next, we reject WCSS's contention that
the Bureau relied on the principles of res judicata in
determining that there was a violation. The Bureau appropriately
relied on past precedent in determining that WCSS's arguments
objecting to the Commission's Letter of Inquiry were
unpersuasive, and in concluding that WCSS acted egregiously in
making these arguments to avoid responding to the Letter of
Inquiry, in view of WCSS's apparent knowledge of such
precedent.16 Contrary to WCSS's contention, the Bureau did not
bind WCSS with decisions rendered in other matters.
7. We also reject WCSS's contention that
res judicata principles require that adjudications by state
agencies of complaints that were used in this enforcement
investigation be considered binding on the Commission.17 As we
explained in the NAL, the Commission rejected this same argument
in the WebNet Order. In WebNet, the Commission stated that
``whether the adjudication happens on a state or federal level,
the adjudication of slamming complaints does not shield a carrier
from separate liability for separate enforcement actions based on
those same complaints.''18 We see no reason to depart from that
8. WCSS's argument regarding its FOIA
request is also misguided. WCSS argues that it was entitled to
production of investigative records prior to responding to the
Letter of Inquiry. Apparently, WCSS suspects that the Bureau had
improper motives in instituting this investigation. WCSS's FOIA-
related arguments for refusing to respond to the Letter of
Inquiry are unpersuasive. In responding to a Letter of Inquiry,
WCSS must provide documents and information within its control,
and, therefore, documents that it requests from the Commission
under FOIA are irrelevant to its obligation to respond to the
Letter of Inquiry. If WCSS were concerned about getting access
to certain documents in order adequately to respond to a slamming
NAL, we note that WCSS could obtain access to documents used by
the Commission in making its findings once an NAL issued against
WCSS for slamming.19 WCSS could, therefore, have access to all
documents necessary to respond to the slamming NAL. In any
event, the Bureau properly refused to provide certain documents
based on FOIA exemption 7(A), 5 U.S.C. § 552(b)(7)(A), which
authorizes the withholding of investigative records or
information compiled for law enforcement purposes if their
production would interfere with enforcement proceedings.
9. We also reject WCSS's contention that
its conduct here was not ``willful'' or ``repeated.'' As the
Bureau stated in the NAL, Section 312(f)(1)) of the Act, 47
U.S.C. § 312(f)(1), which applies to forfeitures assessed under
Section 503 (b) of the Act, provides that the ``[t]he term
`willful', when used with reference to the commission or omission
of any act, means the conscious and deliberate commission or
omission of such act, irrespective of any intent to violate any
provision of this Act or any rule or regulation of the Commission
authorized by this Act....''20 WCSS consciously refused to
provide information requested in the Letter of Inquiry.
Accordingly, WCSS's violation of a Bureau order was willful.
10. Similarly, as the Bureau stated in the
NAL, Section 312(f)(2) of the Act provides that ``[t]he term
`repeated', when used with reference to the commission or
omission of any act, means the commission or omission of such act
more than once or, if such commission or omission is continuous,
for more than one day.'' 47 U.S.C. § 312(f)(2). WCSS
continuously failed to respond to the Letter of Inquiry from
August 27, 2003 to September 15, 2003. Therefore, WCSS's
violation was repeated within the meaning of section 312(f)(2).
11. Finally, we reject WCSS's contention
that we did not consider the nature, circumstances, extent,
gravity, and culpability of the violator. As stated above, we
considered these factors and concluded that WCSS's violation was
apparently egregious, because WCSS knew or should have known that
the Commission had previously rejected arguments virtually
identical to those WCSS raised.21 With respect to its ability to
pay, the NAL made clear that the Commission would not consider
reducing or canceling a forfeiture in response to a claim of
inability to pay unless WCSS were to submit: (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 WCSS's current financial
status. WCSS has not submitted such documentation and,
therefore, cannot persuasively claim that it does not have the
ability to pay the forfeiture.
IV. ORDERING CLAUSES
12. ACCORDINGLY, IT IS ORDERED, pursuant to
Section 503(b) of the Communications Act of 1934, as amended,22
Section 1.80(f)(4) of the Commission's rules,23 and authority
delegated by Sections 0.111 and 0.311 of the Commission's
rules,24 that World Communications Satellite Systems, Inc. IS
LIABLE FOR A MONETARY FORFEITURE in the amount of ten thousand
dollars ($10,000) for violating a Commission order by failing to
respond to a directive of the Enforcement Bureau to provide
certain information and documents.
13. Payment of the forfeiture shall be made
in the manner provided for in Section 1.80 of the Rules within 30
days of the release of this Order. If the forfeiture is not paid
within the period specified, the case may be referred to the
Department of Justice for collection pursuant to Section 504(a)
of the Act.25 Payment may be made by mailing a check or similar
instrument, payable to the order of the ``Federal Communications
Commission,'' to the Federal Communications Commission, P.O. Box
73482, Chicago, Illinois 60673-7482. The payment should note
NAL/Acct. No. 200332170006. Requests for full payment under the
installment plan should be sent to: Chief, Revenue and
Receivables Group, 445 12th Street, S.W., Washington, D.C.
14. IT IS FURTHER ORDERED that a copy of
this Order shall be sent by Certified Mail, Return Receipt
Requested to The Helein Law Group, 81800 Greensboro Drive, Suite
700, McLean, VA 22102.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
1 Letter from Colleen Heitkamp, Chief, Telecommunications
Consumers Division, Enforcement Bureau, to World Communications
Satellite Systems, Inc. (July 15, 2003) (``Letter of Inquiry'').
2 E-Mail from Colleen Heitkamp to Loubna W. Haddad, counsel for
WCSS (August 5, 2003); E-Mail from Colleen Heitkamp to Loubna W.
Haddad (August 20, 2003).
3 Letter from Loubna W. Haddad to Managing Director, FCC (July
28, 2003); Letter from Colleen Heitkamp to Loubna W. Haddad
(August 14, 2003).
4 Letter from Charles H. Helein, counsel for WCSS, to Colleen
Heitkamp (August 27, 2003).
6 World Communications Satellite Systems, Inc., Notice of
Apparent Liability for Forfeiture, 18 FCC Rcd 18545 (Enf. Bur.
7 World Communications Satellite Systems's Statement Seeking
Cancellation of Proposed Forfeiture, filed Oct. 9, 2003
8 SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
9 Response at 5.
10 47 U.S.C. §§ 154(i), 154(j).
11 SBC Communications, Inc., 17 FCC Rcd at 7593-94.
12 Id. at 7594.
13 Response at 6-7.
14 SBC Communications, Inc., 17 FCC Rcd at 7597, 7600.
15 Further, we note that the relative forfeiture amounts imposed
on SBC and WCSS do not support WCSS's contention that we favor
large companies over small companies.
16 WCSS's counsel in this matter also represented WebNet, the
subject of the prior precedent the Bureau relied on as persuasive
in the NAL. It should be noted that, contrary to WCSS's
contention, the WebNet decision was a Commission and not a Bureau
decision. WebNet Communications, Inc.,18 FCC Rcd 6870 (2003)
17 Response at 9.
18 18 FCC Rcd at 6873-74.
19 World Communications Satellite Systems, Inc., Notice of
Apparent Liability for Forfeiture, File No. EB-03-TC-177 (rel.
Jan. 15, 2004).
20 See Southern California Broadcasting Co., Memorandum Opinion
and Order, 6 FCC Rcd 4387 (1991).
21 We note that, based on all the circumstances in this case, we
elected to impose a forfeiture far lower than the maximum
possible amount, as described in the NAL.
22 47 U.S.C. § 503(b).
23 47 U.S.C. § 1.80(f)(4).
24 47 C.F.R. §§ 0.111, 0.311.
25 47 U.S.C. § 504(a).
26 See 47 C.F.R. § 1.1914.