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

In the Matter of                 )    File No. EB-05-IH-0189
                                )
                                )
Communication Services           )    NAL/Acct. No. 200632080004
Integrated, Inc.                 )
                                )    FRN No. 0012390167
                                )
Apparent Liability for           )
Forfeiture

                  NOTICE OF APPARENT LIABILITY 
                    FOR FORFEITURE AND ORDER


Adopted:  October 31, 2005                             Released:  
October 31, 2005

By the Commission:

I.   INTRODUCTION 
                                      
     1.   In this Notice of Apparent Liability for Forfeiture 
(``NAL''), we find that a telecommunications provider, 
Communication Services Integrated, Inc. (``CSII''), operating 
since 2001 and at least indirectly benefiting from the federal 
programs supporting the telecommunications industry since that 
time, apparently failed to meet its statutory and regulatory 
obligations relating to the universal service program.  Based 
upon the facts and circumstances surrounding this matter we 
conclude that this carrier is apparently liable for a total 
forfeiture of $462,638.  

     2.   We specifically find that CSII has apparently violated 
section 64.1195 of the Commission's rules by willfully and 
repeatedly failing to register with the Commission until February 
2005.1  We also find that CSII has apparently violated section 
54.711(a) of the Commission's rules by failing to submit certain 
Telecommunications Reporting Worksheets (``Worksheets'') from 
2002 to 2005.2  Finally, we find that CSII has apparently 
violated section 254(d) of the Communications Act of 1934, as 
amended (the ``Act''),3 and section 54.706(a) of the Commission's 
rules by willfully and repeatedly failing to contribute to the 
Universal Service Fund (``USF'').4  

     3.   We are resolved to ensure a level playing field for all 
companies that are required to contribute to the maintenance of 
Congressionally mandated programs, including the federal 
universal service program.  The failure of a carrier to fulfill 
its obligation to contribute to these programs has a direct and 
significant detrimental impact on the programs and on other 
industry participants because that failure removes from the base 
of contributions telecommunications revenues that otherwise 
should be included, thereby forcing other telecommunications 
carriers to shoulder additional costs associated with the 
programs.  Thus, this NAL and others like it represent one 
element in a comprehensive approach to improving the efficacy and 
fairness of the universal service program as well as reducing 
waste, fraud and abuse in the program.

     4.   We order CSII to file with the Universal Service 
Administrative Company (``USAC'') within thirty days all annual 
Telecommunications Reporting Worksheets required under the 
Commission's rules from the date that CSII commenced providing 
telecommunications services in the United States to the date of 
this NAL.5
 
II.  BACKGROUND

     5.   The Commission is charged by Congress with regulating 
interstate and international telecommunications and ensuring that 
providers of such telecommunications comply with the requirements 
imposed on them by the Act and our rules.6  The Commission also 
has been charged by Congress to establish, administer and 
maintain various telecommunications regulatory programs, and to 
fund these programs through assessments on the telecommunications 
providers that benefit from them.  To accomplish these goals, the 
Commission established ``a central repository of key facts about 
carriers'' through which it could monitor the entry and operation 
of interstate telecommunications providers to ensure, among other 
things, that they are qualified, do not engage in fraud, and do 
not evade oversight.7  Commission rules require that, upon entry 
or anticipated entry into interstate telecommunications markets, 
telecommunications carriers register by submitting information on 
FCC Form 499-A, also known as the annual Telecommunications 
Reporting Worksheet.8  The Commission also requires 
telecommunications providers to submit financial information on 
annual and, with some exceptions not applicable to CSII since 
2003,9 quarterly short-form Worksheets to enable the Commission 
to determine and collect the statutorily mandated program 
assessments.10

     6.   The Telecommunications Act of 1996 codified Congress' 
historical commitment to promote universal service to ensure that 
consumers in all regions of the nation have access to affordable, 
quality telecommunications services.11  In particular, section 
254(d) of the Act requires, among other things, that ``[e]very 
telecommunications carrier [providing] interstate 
telecommunications services . . . contribute, on an equitable and 
nondiscriminatory basis, to the specific, predictable, and 
sufficient mechanisms established by the Commission to preserve 
and advance universal service.''12  In implementing this 
Congressional mandate, the Commission directed all 
telecommunications carriers providing interstate 
telecommunications services and certain other providers of 
interstate telecommunications to contribute to the Universal 
Service Fund based upon their interstate and international end-
user telecommunications revenues.13  Failure by some providers to 
pay their share into the USF skews the playing field by providing 
non-paying providers an economic advantage over their competitors 
who must shoulder more than their fair share of the costs of the 
Fund.

     7.   The Commission has established specific procedures to 
administer the universal service program.  A carrier must file 
Worksheets for the purpose of determining its USF payments.14  
These periodic filings trigger a determination of liability, if 
any, and subsequent billing and collection by USAC.  USAC uses 
the revenue projections submitted on the quarterly filings to 
determine each carrier's universal service contribution amount.15  
Carriers are required to pay their monthly USF contribution by 
the date shown on their invoice.16  The Commission's rules 
explicitly warn contributors that failure to file their forms or 
submit their payments potentially subjects them to enforcement 
action.17  Further, under the Commission's ``red light rule,'' 
action will be withheld on any application to the Commission or 
request for authorization made by any entity that has failed to 
pay when due its regulatory program payments, such as USF 
contributions, and if payment or payment arrangements are not 
made within 30 days from notice to the applicant, such 
applications or requests will be dismissed.18

     8.   CSII is a Georgia-based telecommunications carrier that 
began providing interstate telecommunications service in the 
United States in 2001.19  In 2004, the Enforcement Bureau 
(``Bureau'') audit staff sought to identify resellers of 
telecommunications service that failed to register as 
telecommunications service providers with the Commission, and 
thus may also have failed to satisfy various Commission program 
requirements.20  In order to identify such resellers, the Bureau 
audit staff compared lists of resellers provided by wholesale 
service providers against the Commission's central repository of 
registered telecommunications service providers with filer 
identification numbers.  If a reseller did not appear to have an 
identification number, the audit staff sent an inquiry to that 
reseller.  On March 30 and June 18, 2004, the Bureau's audit 
staff sent letters to CSII requesting information pertaining to 
CSII's compliance with section 64.1195 of the Commission's 
rules.21  On January 5, 2005, CSII sent an e-mail to Bureau audit 
staff, claiming that the carrier was ``under the impression'' it 
was de minimis.22  In response, Bureau audit staff informed CSII 
that the carrier was nonetheless required to register with the 
Commission.23  Shortly thereafter, on February 23, 2005, several 
years after it began providing service and more than 10 months 
after the Bureau sent CSII its first letter, CSII registered 
pursuant to section 64.1195 of the Commission's rules24 and 
untimely filed its 2004 annual Worksheet (reporting 2003 
revenues).  

     9.   On March 10, 2005, the Bureau issued a letter of 
inquiry (``LOI'') to CSII.25  The LOI directed CSII, among other 
things, to submit a sworn written response to a series of 
questions relating to CSII's apparent failure to register and 
file Telecommunications Reporting Worksheets in a timely manner 
and to make mandated federal telecommunications regulatory 
program payments.  CSII responded to the LOI on March 28, 200526 
and provided supplemental revenue information on March 30, 
2005.27

     10.  Subsequently, on April 30 and July 27, 2005, CSII 
timely-filed its 2005 annual Worksheet (reporting 2004 actual 
revenues) and its quarterly Worksheet due on August 1, 2005 
(reporting projected revenues to calculate monthly assessments 
for the fourth quarter 2005).  Notwithstanding its e-mail to the 
Bureau claiming it was de minimis, CSII projected interstate and 
international telecommunications revenues for the fourth quarter 
of 2005 alone that surpassed the de minimis threshold for all of 
2005.  CSII still failed to file annual Worksheets due in the 
years 2002 and 2003, and quarterly Worksheets due November 1, 
2004, February 1, 2005, and May 1, 2005.  In July 2005, USAC sent 
CSII an invoice for $10,359 reflecting one-third of the debt owed 
for the limited period that CSII reported, which CSII timely 
paid.  

III. DISCUSSION

     11.  Under section 503(b)(1)(B) of the Act, any person who 
is determined by the Commission to have willfully or repeatedly 
failed to comply with any provision of the Act or any rule, 
regulation, or order issued by the Commission shall be liable to 
the United States for a forfeiture penalty.28  Section 312(f)(1) 
of the Act defines willful as ``the conscious and deliberate 
commission or omission of [any] act, irrespective of any intent 
to violate'' the law.29  The legislative history to section 
312(f)(1) of the Act clarifies that this definition of willful 
applies to both sections 312 and 503(b) of the Act,30 and the 
Commission has so interpreted the term in the section 503(b) 
context.31  The Commission may also assess a forfeiture for 
violations that are merely repeated, and not willful.32  
``Repeated'' means that the act was committed or omitted more 
than once, or lasts more than one day.33  To impose such a 
forfeiture penalty, the Commission must issue a notice of 
apparent liability and the person against whom the notice has 
been issued must have an opportunity to show, in writing, why no 
such forfeiture penalty should be imposed.34  The Commission will 
then issue a forfeiture if it finds by a preponderance of the 
evidence that the person has violated the Act or a Commission 
rule.35  As set forth below, we conclude under this standard that 
CSII is apparently liable for a forfeiture for its apparent 
willful and repeated violations of section 254(d) of the Act36 
and sections 54.706(a), 54.711(a), and 64.1195 of the 
Commission's rules.37

     12.  The fundamental issues in this case are whether CSII 
apparently violated the Act and the Commission's rules by:  (1) 
willfully or repeatedly failing to register pursuant to section 
64.1195 of the Commission's rules;38 (2) willfully or repeatedly 
failing to file Telecommunications Reporting Worksheets; and (3) 
willfully or repeatedly failing to make requisite contributions 
toward the Universal Service Fund.  We answer these questions 
affirmatively.  Based on a preponderance of the evidence, we 
conclude that CSII is apparently liable for a forfeiture of 
$462,638 for apparently willfully and repeatedly violating 
section 254(d) of the Act,39 and sections 54.706(a), 54.711(a), 
and 64.1195 of the Commission's rules.40

     13.  Specifically, we propose the following forfeitures for 
apparent violations within the last year: (1) $100,000 for 
failure to register pursuant to section 64.1195 of the 
Commission's rules;41 (2) $150,000 for failure to file three 
Telecommunications Reporting Worksheets; and (3) $212,638 for 
failure to make nine monthly USF contributions on a timely basis.  
Although we propose forfeitures only for apparent violations 
within the last year, we discuss below CSII's noncompliance in 
prior years to demonstrate the scope of CSII's misconduct and 
provide context to the misconduct that is within the statute of 
limitations period.

     A.   Registration with the Commission

     14.  We conclude that CSII has apparently violated section 
64.1195(a) of the Commission's rules by failing to register with 
the Commission from 2001 until February 23, 2005.42  CSII's 
failure to register constitutes a clear violation of a vital 
Commission rule.  Section 64.1195(a) of the Commission's rules 
unambiguously requires that all carriers that provide, or plan to 
provide, interstate telecommunications services register with the 
Commission by submitting specified information.43  Although CSII 
has been providing interstate telecommunications services since 
2001, it failed to register in accordance with section 64.1195(a) 
until February 23, 2005, many months after the Bureau sent CSII 
the Audit Letters.  As a result of its misconduct, CSII operated 
for over three years without participation in any of the programs 
tied to registration.  As an interstate telecommunications 
carrier, CSII had a clear and affirmative duty to apprise itself 
of, and satisfy, its federal obligations.44    

     15.  We view CSII's apparent failure to register for over 
three years as a serious dereliction of its responsibilities 
under the Act and our rules.  A carrier's compliance with the 
Commission's registration requirement is critical to the 
administration of the USF and TRS programs, and to fulfilling 
Congress' objectives in sections 254(d) and 225(b)(1) of the Act.  
As we noted above, a carrier's duty to register upon entry, or 
anticipated entry, into interstate telecommunications markets is 
essential to the fulfillment of the USF, TRS, and other 
regulatory program missions because it identifies the company to 
the various program administrators and brings the carrier within 
the purview and oversight of those administrators.  If a carrier 
never identifies itself as a telecommunications provider by 
properly registering under the Commission's rules, then neither 
the Commission nor the various program administrators can 
ascertain whether that carrier has fulfilled other regulatory 
obligations, including the requirement that carriers file 
Worksheets and contribute to USF, TRS, and other regulatory 
programs.  Moreover, the program administrators have no basis 
upon which to invoice the carrier for contributions.  A 
telecommunications carrier that fails to register thus can 
operate outside of the Commission's oversight and evade its 
federal obligations to contribute toward the vital programs 
linked to registration.

     16.  The impact of a carrier's failure to register is no 
less severe where, as here, that carrier ultimately registers 
with the Commission.  Although CSII registered on February 23, 
2005, and has apparently filed some of the required Worksheets in 
the last few months, CSII delayed its registration for an 
extended period of time and took no action until long after 
receiving letters from the Bureau.45  The Commission has 
repeatedly stated that post-investigation corrective measures to 
address a violation do not eliminate a licensee's responsibility 
for the period during which the violation occurred.46  Based on a 
preponderance of the evidence, therefore, we find that CSII 
apparently has violated section 64.1195(a) of the Commission's 
rules by willfully and repeatedly failing to register from 2001 
until February 23, 2005.47  

     B.   Submission of Telecommunications Reporting Worksheets 

     17.  We also conclude that CSII apparently has violated 
section 54.711(a) of the Commission's rules by willfully and 
repeatedly failing to file certain Telecommunications Reporting 
Worksheets on a timely basis from 2002 through February 2005.  
Section 54.711(a) of the Commission's rules clearly establishes a 
carrier's obligation to file periodic Telecommunications 
Reporting Worksheets.48  A carrier's failure to file these 
Worksheets as required has serious implications for the USF.  As 
discussed above, the filing of a Telecommunications Reporting 
Worksheet prompts a determination of liability for, and 
subsequent billing and collection of, payments by the 
administrators of the Universal Service contributions.  The 
failure of a carrier such as CSII to abide by its federal filing 
obligation has a direct and profound detrimental impact by 
removing from the base of USF contributions telecommunications 
revenues that otherwise should be included, thereby shifting to 
compliant carriers additional economic burdens associated with 
the federal universal service program.49  Consequently, a 
carrier's failure to file required Worksheets frustrates the very 
purpose for which Congress enacted section 254(d) - to ensure 
that every interstate carrier ``contribute, on an equitable and 
nondiscriminatory basis, to the specific, predictable, and 
sufficient mechanisms established by the Commission to preserve 
and advance universal service.''50  Viewed in this context, the 
Telecommunications Reporting Worksheet is not only an 
administrative tool, but also a fundamental and critical 
component of the Commission's Universal Service program.
  
     18.  CSII had repeatedly failed to comply with its filing 
obligation prior to the Bureau's investigation.  Although CSII 
has been providing telecommunication services since 2001, it had 
not filed annual Worksheets in 2002 or 2003, and filed its 2004 
annual Worksheet almost one year late.  While it did file its 
2005 annual Worksheet on time, it did so only after the Bureau's 
inquiries.  Moreover, even within the past year, CSII failed to 
file the quarterly Worksheets due November 1, 2004, and February 
1 and May 1, 2005.  

     19.  Based on a preponderance of the evidence, we find that 
CSII apparently has violated section 254 of the Act51 and section 
54.711 of the Commission's rules52 by willfully and repeatedly 
failing to timely file required information with the Commission 
on multiple occasions since 2002, including its failure to make 
three quarterly Worksheet filings within the last year.  We 
therefore propose a forfeiture for CSII's failure to file the 
quarterly Worksheets due November 1, 2004, and February 1 and May 
1, 2005.

     C.   Universal Service Contributions

     20.  We further conclude that CSII apparently violated 
section 254(d) of the Act and section 54.706 of the Commission's 
rules by willfully and repeatedly failing to contribute to 
universal service support mechanisms.53  Section 54.706(c) of the 
Commission's rules unambiguously directs that ``entities 
[providing] interstate telecommunications to the public . . . for 
a fee . . . contribute to the universal service support 
programs.''54  Since 2003, CSII was required, pursuant to section 
54.706(b) of the Commission's rules, to contribute to universal 
service mechanisms based upon either its historical or projected 
revenues.55  Despite this requirement, CSII made no universal 
service contributions until August 8, 2005.56  As we previously 
have stated,

       [c]arrier nonpayment of universal service 
       contributions undermines the efficiency and 
       effectiveness of the universal service support 
       mechanisms.  Moreover, delinquent carriers may 
       obtain a competitive advantage over carriers 
       complying with the Act and our rules.  We consider 
       universal service nonpayment to be a serious threat 
       to a key goal of Congress and one of the 
       Commission's primary responsibilities.57 

Based on a preponderance of the evidence, we find that CSII 
apparently has violated sections 254(d) of the Act and 54.706 of 
the Commission's rules by willfully and repeatedly failing to 
make its monthly universal service contribution payments since 
2003, including nine such failures within the past year, i.e., 
the payments due November 15 and December 15, 2004, and January 
14, February 15, March 15, April 15, May 13, June 15, and July 
15, 2005.  

     D.   Proposed Forfeiture

     21.  Section 503(b)(1)(B) of the Act provides that any 
person that willfully or repeatedly fails to comply with any 
provision of the Act or any rule, regulation, or order issued by 
the Commission, shall be liable to the United States for a 
forfeiture penalty.58  Section 503(b)(2)(B) of the Act authorizes 
the Commission to assess a forfeiture of up to $130,000 for each 
violation or each day of a continuing violation, up to a 
statutory maximum of $1.325 million for a single act or failure 
to act.59  In determining the appropriate forfeiture amount, we 
consider the factors enumerated in section 503(b)(2)(D) of the 
Act, including ``the nature, circumstances, extent and gravity of 
the violation, and, with respect to the violator, the degree of 
culpability, any history of prior offenses, ability to pay, and 
such other matters as justice may require.''60

     22.  Under section 503(b)(6) of the Act, we may only propose 
forfeitures for apparent violations that occurred within one year 
of the date of this NAL.61  Nevertheless, section 503(b) does not 
bar us from assessing whether CSII's conduct prior to that time 
period apparently violated the Act or our rules in determining 
the appropriate forfeiture amount for those violations within the 
statute of limitations.62  Therefore, although we find that CSII 
apparently violated the Act and our rules for over three years, 
we propose forfeitures here only for violations that occurred 
within the last year.

     23.  This case involves a carrier's failure both to register 
and submit any Telecommunications Reporting Worksheets from the 
time it commenced providing telecommunications services until 
after it received a letter from the Bureau63 - in this case, a 
period of over three years.  We find CSII's failure to discharge 
its federal reporting obligations to be particularly egregious.  
The registration and filing of Telecommunications Reporting 
Worksheets are fundamental to the implementation of our central 
repository of carriers and to the administration of multiple 
statutorily derived programs - including the USF.  Where, as 
here, a carrier ignores its obligations by wholly failing to 
register - thereby affecting the time and manner in which these 
important federal programs are funded - it undermines the 
programs and thwarts the purposes for which Congress and the 
Commission established them.  

     24.  Recently, we have held that a substantial forfeiture of 
$100,000 is warranted for a carrier's failure to register with 
the Commission.64  We explained that ``[t]his egregious behavior 
strikes at the core of our ability to implement and enforce the 
Act and our rules effectively, thus warranting a substantial 
forfeiture.''65  A carrier that fails to register hampers 
``efficient and effective Commission enforcement by delaying 
detection of, and action against, its behavior . . . and imposes 
a substantial burden on the Commission, which can only identify 
such carriers through compliance review programs that require 
significant amounts of staff time and resources.''66  CSII failed 
to register until February 23, 2005.  Taking into account all of 
the factors enumerated in section 503(b)(2)(D) of the Act, we 
therefore conclude that a proposed forfeiture of $100,000 is 
warranted. 

     25.  Similarly, in the past, we have held that a substantial 
forfeiture of $50,000 is warranted for a carrier's failure to 
file a Telecommunications Reporting Worksheet for revenue 
reporting purposes.67  We find that CSII's willful and repeated 
failure to file periodic Telecommunications Reporting Worksheets 
is egregious.  As we noted above, a carrier's obligation to file 
these Worksheets is directly linked to, and thus has serious 
implications for, administration of the USF and other regulatory 
programs.  By ignoring its reporting obligations, CSII has 
unilaterally shifted to compliant carriers and their customers 
the economic costs associated with the universal service and 
other regulatory programs.  Therefore, we find that CSII is 
apparently liable for a $150,000 forfeiture for its failure to 
file three Worksheets within the last year.  As discussed above, 
CSII failed to file three quarterly Worksheets due November 1, 
2004 and February 1 and May 1, 2005.

     26.  Based on the facts above, it also appears that CSII has 
failed to make the requisite contributions into the Universal 
Service Fund for a period of over two years.  Nonpayment of 
universal service contributions is an egregious offense that 
bestows on delinquent carriers an unfair competitive advantage by 
shifting to compliant carriers the economic costs and burdens 
associated with universal service.  A carrier's failure to make 
required universal service contributions frustrates Congress' 
policy objective in section 254(d) of the Act to ensure the 
equitable and non-discriminatory distribution of universal 
service costs among all telecommunications providers.68  The 
Commission has established a base forfeiture amount of $20,000 
for each month in which a carrier has failed to make required 
universal service contributions.69  CSII, as detailed above, 
failed to make contributions from 2003 until July 2005.  Nine of 
those violations occurred within the last year.  Consequently, we 
find CSII apparently liable for a base forfeiture of $180,000 for 
its willful and repeated failure to make universal service 
contributions for the period of November 2004 through July 2005. 

     27.  We also conclude that an upward adjustment to the base 
forfeiture associated with CSII's failure to pay USF is 
appropriate.  In the past, we have calculated upward adjustments 
to forfeitures for failure to make USF payments based on half of 
the company's unpaid contributions.70  In situations such as this 
one, however, the Commission has held previously,71 where the 
subject company has failed to file timely and accurate 
information, we cannot determine the full amount owed to the 
funds until and unless the subject company provides complete and 
accurate information to the fund administrators.  Thus, our 
ability to calculate and assess accurately an upward adjustment 
based on a percentage of unpaid contribution amounts can be 
inhibited by the violator.  In this regard, Commission 
enforcement action can be delayed pending the company's full 
revenue disclosures, or foreclosed altogether if the statute of 
limitations expires during the period of delay.  In such 
circumstances, companies that comply with our registration and 
filing requirements might be worse off than those, like CSII, 
that appear to ignore them.  Such a result is not only unfair, 
but is bad public policy.  

     28.  As of July 15, 2005, USAC records show that CSII owed 
approximately $33,776 in USF contributions for the limited period 
that it has reported revenue, 2003 and 2004.  USF assessments 
have not been assigned for other periods only because CSII did 
not properly file the Worksheets for other periods.  During the 
course of the investigation, however, the Bureau received certain 
revenue information.  We have used that revenue information to 
estimate the amount that CSII should have paid during the periods 
since it began operations for which it has not filed 
(approximately $31,500) for purposes of calculating an upward 
adjustment of one-half that amount.  In total, we estimate CSII 
owes $65,276 to the USF.  Therefore, taking into account all of 
the factors enumerated in section 503(b)(2)(D) of the Act, we 
propose an upward adjustment of $32,638 for CSII's apparent 
failure to make universal service contributions.  We thus find 
CSII liable for a proposed forfeiture of $212,638 for its 
apparent willful and repeated failure to make contributions into 
the Universal Service Fund.

IV.  CONCLUSION

     29.  In light of the seriousness, duration and scope of the 
apparent violations, and to ensure that a company with 
substantial revenues such as CSII does not consider the proposed 
forfeiture merely ``an affordable cost of doing business,''72 we 
find that a proposed forfeiture in the amount of $462,638 is 
warranted.  As discussed above, this proposed forfeiture amount 
includes:  (1) a total proposed penalty of $100,000 for failing 
to register pursuant to section 64.1195 of the Commission's 
rules;73 (2) a total proposed penalty of $150,000 for failing to 
file three Telecommunications Reporting Worksheets within the 
past year; and (3) a total proposed penalty of $212,638 for 
failing to make nine monthly universal service contributions 
within the past year.

     30.  We caution that additional violations of the Act or the 
Commission's rules could subject CSII to further enforcement 
action.  Such action could take the form of higher monetary 
forfeitures and/or possible revocation of CSII's operating 
authority, including disqualification of CSII's principals from 
the provision of any interstate common carrier services without 
the prior consent of the Commission.74  In addition, we note 
that, to the extent CSII is ever found to be delinquent on any 
debt owed to the Commission (e.g., has failed to pay all of its 
USF contributions), the Commission will not act on, and may 
dismiss, any application or request for authorization filed by 
CSII, in accordance with the agency's ``red light'' rules.75  We 
order CSII to file with USAC within thirty days all annual 
Telecommunications Reporting Worksheets required under the 
Commission's rules from the date that CSII commenced providing 
telecommunications services in the United States to the date of 
this NAL.

V.   ORDERING CLAUSES

     31.  ACCORDINGLY, IT IS ORDERED THAT, pursuant to section 
503(b) of the Communications Act of 1934, as amended,76 and 
section 1.80 of the Commission's rules,77 that CSII is hereby 
NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the amount 
of $462,638 for willfully and repeatedly violating the Act and 
the Commission's rules.

     32.  IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of 
the Commission's Rules,78 within thirty days of the release date 
of this NOTICE OF APPARENT LIABILITY, CSII SHALL PAY the full 
amount of the proposed forfeiture or SHALL FILE a written 
statement seeking reduction or cancellation of the proposed 
forfeiture.

     33.  IT IS FURTHER ORDERED THAT, pursuant to sections 4(i), 
219(b), and 254(d) of the Act,79 and sections 54.706(a) and 
54.711(a) of the Commission's rules,80 within thirty days of the 
release of this NOTICE OF APPARENT LIABILITY AND ORDER, CSII 
SHALL SUBMIT to USAC all annual Telecommunications Reporting 
Worksheets required under the Commission's rules from the date 
that CSII commenced providing telecommunications services in the 
United States to the date of this NAL.

     34.  Payment of the forfeiture must be made by check or 
similar instrument, payable to the order of the Federal 
Communications Commission. The payment must include the 
NAL/Acct. No. and FRN No. referenced above. Payment bycheck or 
money order may be mailed to Federal Communications Commission, 
P.O. Box358340,Pittsburgh, PA 15251-8340. Payment by overnight 
mail may be sent toMellon Bank/LB358340,500 Ross Street, Room 
1540670, Pittsburgh, PA 15251.Payment by wire transfer may be 
made to ABA Number043000261, receiving bankMellon Bank, and 
account number911-6106.

     35.  The response, if any, to this NOTICE OF APPARENT 
LIABILITY must be mailed to William H. Davenport, Chief, 
Investigations and Hearings Division, Enforcement Bureau, Federal 
Communications Commission, Room 4-A237, 445 12th Street, S.W., 
Washington, D.C.  20554 and must include the NAL/Acct. No. 
referenced above.

     36.  The Commission will not consider reducing or canceling 
a forfeiture in response to a claim of inability to pay unless 
the petitioner submits:  (1) federal tax returns for the most 
recent three-year period; (2) financial statements prepared 
according to generally accepted accounting practices (GAAP); or 
(3) some other reliable and objective documentation that 
accurately reflects the petitioner's current financial status.  
Any claim of inability to pay must specifically identify the 
basis for the claim by reference to the financial documentation 
submitted.

     37.  Requests for payment of the full amount of this NAL 
under an installment plan should be sent to Chief, Credit and 
Management Center, 445 12th Street, S.W., Washington, D.C.  
20554.81

     38.  IT IS FURTHER ORDERED that a copy of this NOTICE OF 
APPARENT LIABILITY AND ORDER shall be sent by certified mail, 
return receipt requested, to Gary E. Middlebrooks, Chief 
Executive Officer, Communication Services Integrated, Inc., 105 
Park Place Way, Carrollton, GA 30117.

                         FEDERAL COMMUNICATIONS COMMISSION



                         Marlene H. Dortch
                         Secretary 
_________________________

1 47 C.F.R.  64.1195.
2 47 C.F.R.  54.711(a).
3 47 U.S.C.  254(d).  
4 47 C.F.R.  54.706(a).
5 The Commission has appointed USAC as the administrator of 
federal universal service support mechanisms and has made it 
responsible for billing and collection of USF contributions.  47 
C.F.R.  54.701(a), 54.702(b).
6 See, e.g., 47 U.S.C.  151.
7 See Implementation of the Subscriber Carrier Selection 
Provisions of the Telecommunications Act of 1996, Third Report 
and Order and Second Order on Reconsideration, 15 FCC Rcd 15996, 
16024 (2000) (``Carrier Selection Order'').    
8 47 C.F.R.  64.1195.
9 Based on CSII's reported revenue for 2002, CSII was a de 
minimis carrier in 2002, and therefore was not required to file 
quarterly Worksheets in 2002.  See Letter from Hillary S. 
DeNigro, Deputy Chief, Investigations and Hearings Division, 
Enforcement Bureau, Federal Communications Commission, to Gary 
Middlebrooks, Chief Executive Officer, Communication Services 
Integrated, Inc., dated March 10, 2005; Letter from Communication 
Services Integrated, Inc., to Diana Lee, Investigations and 
Hearings Division, Enforcement Bureau, FCC, dated March 30, 2005 
(attaching supplemental long distance revenue information) 
(``CSII Supplemental Response'').
10 See 47 U.S.C.  225(d)(3); 254(d).  In 1999, to streamline 
the administration of the programs and to ease the burden on 
regulatees, the Commission consolidated the information filing 
requirements for multiple telecommunications regulatory programs 
into the annual Telecommunications Reporting Worksheet.  See 1998 
Biennial Regulatory Review, Report and Order, 14 FCC Rcd 16602 
(1999).  The next year the Commission revised the 
Telecommunications Reporting Worksheet slightly to collect the 
additional information necessary to achieve its goal of 
establishing a central repository for interstate 
telecommunications providers by the least provider-burdensome 
method.  Carrier Selection Order, 15 FCC Rcd at 16026.  
11 The Telecommunications Act of 1996 amended the Communications 
Act of 1934.  See Telecommunications Act of 1996, Pub. L. No. 
104-104, 110 Stat. 56 (1996).
12 47 U.S.C.  254(d).  
13 47 C.F.R.  54.706(b).  Since April 1, 2003, carrier 
contributions have been based on a carrier's projected, rather 
than historical, revenues.  Id.  
14 Upon submission of a Form 499-A registration, the carrier is 
issued a filer identification number by USAC.  The filer 
identification number is then to be included on all further 
filings by the company and is used by the Commission and its 
administrators to track the carrier's contributions and invoices.  
15 Individual universal service contribution amounts that are 
based upon quarterly filings are subject to an annual true-up.  
See Federal-State Joint Board on Universal Service, Petition for 
Reconsideration filed by AT&T, Report and Order and Order on 
Reconsideration, 16 FCC Rcd 5748 (2001); 47 C.F.R.  54.709(a).  
16 See Globcom, Inc., Notice of Apparent Liability for Forfeiture 
and Order, 18 FCC Rcd 19893, 19896,  5 (2003); 47 C.F.R.  
54.711(a) (``The Commission shall announce by Public Notice 
published in the Federal Register and on its website the manner 
of payment and the dates by which payments must be made.'').  
See, e.g., ``Proposed Third Quarter 2003 Contribution Factor,'' 
Public Notice, 18 FCC Rcd 11442 (WCB 2003) (``Contribution 
payments are due on the date shown on the [USAC] invoice.'')  The 
Act and our rules, however, do not condition payment on receipt 
of an invoice or other notice from USAC.  See 47 U.S.C.  254(d); 
47 C.F.R.  54.706(b).  A carrier that does not file may not 
receive an invoice from USAC, but is nonetheless required to 
contribute to the universal service fund, unless its revenues are 
considered de minimis.  Globcom, Inc., 18 FCC Rcd at 19896,  5 & 
n.22.  The instructions for the Telecommunications Reporting 
Worksheet include tables for carriers to determine their 
approximate annual contributions based on their projected 
telecommunications revenues.  Providers whose annual contribution 
is less than $10,000 are considered de minimis and exempted from 
contributing to the USF.  47 C.F.R.  54.708.  CSII has not 
qualified for the de minimis exemption since 2003.
17 47 C.F.R.  54.713.
18 47 C.F.R.  1.1910.  The rule went into effect on November 1, 
2004.  See ``FCC Announces Brief Delay in Enforcement of Red 
Light Rule,'' Public Notice, 19 FCC Rcd 19452 (2004).
19 See Response to Data Requests/Request for Documents, EB-05-IH-
0189, at 4, dated March 28, 2005 (``March 28, 2005 LOI 
Response''); http://www.csii.net/index2.html (last accessed on 
October 27, 2005).
20 See 47 C.F.R.  64.1195(a).
21 See Letter from Hugh Boyle, Chief Auditor, Investigations and 
Hearings Division, Enforcement Bureau, to Communication Services 
Integrated, Inc., dated March 30, 2004 (``March 30, 2004 Audit 
Letter''); Letter from Hugh Boyle, Chief Auditor, Investigations 
and Hearings Division, Enforcement Bureau, to Communication 
Services Integrated, Inc., dated June 18, 2004 (``June 18, 2004 
Audit Letter'') (collectively, ``Audit Letters'').  
22 See e-mail from Sherry Holt, Communication Services 
Integrated, Inc., to Nand Gupta, Investigations and Hearings 
Division, January 5, 2005, 12:04 p.m. E.S.T.  Providers whose 
annual contribution is less than $10,000 are covered by the 
Commission's ``de minimis rule'' and are exempted from 
contributing to the USF.  47 C.F.R. 54.708.
23 See e-mail from Nand Gupta, Investigations & Hearings 
Division, to Sherry Holt, Communication Services Integrated, 
Inc., January 05, 2005, 16:13 p.m. E.S.T.
24 47 C.F.R.  64.1195.   
25 See supra n. 9.
26 See supra n. 19.
27 See CSII Supplemental Response.
28 47 U.S.C.  503(b)(1)(B); 47 C.F.R.  1.80(a)(1).
29 47 U.S.C.  312(f)(1).
30 H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
31 See, e.g., Application for Review of Southern California 
Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 
4388 (1991) (``Southern California Broadcasting Co.'').
32 See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, 
Notice of Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 
1359 (2001) (issuing a Notice of Apparent Liability for, inter 
alia, a cable television operator's repeated signal leakage).
33 Callais Cablevision, Inc., 16 FCC Rcd at 1362,  9; Southern 
California Broadcasting Co., 6 FCC Rcd at 4388,  5.
34 47 U.S.C.  503(b); 47 C.F.R.  1.80(f).
35 See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC 
Rcd 7589, 7591,  4 (2002) (``SBC Forfeiture Order'') (forfeiture 
paid).
36 47 U.S.C.  254(d).
37 47 C.F.R.  54.706(a), 54.711(a), and 64.1195.
38 47 C.F.R.  64.1195.
39 47 U.S.C.  254(d).
40 47 C.F.R.  54.706(a), 54.711(a), 64.1195.
41 47 C.F.R.  64.1195.
42 47 C.F.R.  64.1195(a); Carrier Selection Order, 15 FCC Rcd 
15996, 16025 (requiring existing carriers like CSII to register 
on the date the new registration requirement becomes effective by 
means of certain information in FCC Form 499-A); 66 FR 17083 
(2001) (announcing that OMB-approved information collection 
requirement in section 64.1195 would take effect on April 2, 
2001).
43 Id.  The Commission adopted the registration requirement in 
section 64.1195(a) after finding that such a requirement would 
enable it to better monitor the entry of carriers into the 
interstate telecommunications market and any associated increases 
in slamming activity, and, among other things, would enhance the 
Commission's ability to take appropriate enforcement action 
against carriers that have demonstrated a pattern or practice of 
slamming.  See Carrier Selection Order, 15 FCC Rcd at 16024  62. 
44 See The Commission's Forfeiture Policy Statement and Amendment 
of Section 1.80 of the Commission's Rules, Report and Order, 12 
FCC Rcd 17087, 17099,  22 (1997) (``Forfeiture Policy 
Statement''), recon. denied, 15 FCC Rcd 303 (1999) (``[t]he 
Commission expects, and it is each licensee's obligation, to know 
and comply with all of the Commission's rules.''); Telecom House, 
Inc., Notice of Apparent Liability for Forfeiture and Order, FCC 
05-168, 2005 WL 2233570 (F.C.C.) at  29 (released Sept. 13, 
2005); InPhonic, Inc., Notice of Apparent Liability for 
Forfeiture and Order, FCC 05-145, 2005 WL 1750418 (F.C.C.) at  
24 (released July 25, 2005); Teletronics, Inc., Notice of 
Apparent Liability for Forfeiture and Order, FCC 05-146, 2005 WL 
1750420 (F.C.C.) at  28 (released July 25, 2005). 
45 See March 30, 2004 Audit Letter, June 18, 2004 Audit Letter.  
46 AT&T Wireless Services, Inc., Forfeiture Order, 17 FCC Rcd 
21866, 21870-71, (2002); America's Tele-Network Corp., Order of 
Forfeiture, 16 FCC Rcd 22350, 22355,  15 (2001); Coleman 
Enters., Inc. d/b/a/ Local Long Distance, Inc., Order of 
Forfeiture, 15 FCC Rcd 24385, 24388,  8 (2000).  
47 The proposed forfeitures in this NAL relate only to violations 
occurring within a year of this NAL.
48 47 C.F.R.  54.711(a).
49 Sixty days prior to the start of each quarter, USAC is 
required to provide the Commission with a projection of the high 
cost, low income, schools and libraries, and rural health care 
funding requirements for the following quarter.  See 
www.universalservice.org/overview/filings.  Based on USAC's 
projection of the needs of the USF, and revenue projections from 
the registered carriers subject to universal service 
requirements, the Commission establishes a specific percentage of 
interstate and international end-user revenues that each subject 
telecommunications provider must contribute toward the USF.  This 
percentage is called the contribution factor.  The contribution 
factor, and, consequently, the amount owed to the USF by each 
affected telecommunications company, changes each quarter, 
depending on the needs of the USF and carrier-provided revenue 
projections.  See www.fcc.gov/wcb/universal_service/quarter.  
Thus, in cases where a carrier, such as CSII, fails to file 
required Worksheets reporting its revenue projections in a timely 
fashion, its revenues are excluded from the contribution base 
from which universal assessments are derived, and the economic 
burden of contributing falls disproportionately on carriers that 
have satisfied their reporting obligations.   
50 47 U.S.C.  254(d).
51 47 U.S.C.  254.  
52 47 C.F.R.  54.711, 64.604.
53 47 U.S.C.  254(d); 47 C.F.R.  54.706.
54 47 C.F.R.  54.706(c).  
55 See 47 C.F.R.  54.706(b).      
56 See USAC August 2005 billing to CSII.  USAC assessed the 
amount due in August 2005 solely based on the 2004 and 2005 
annual Worksheets, and the payment thus represented only a 
partial assessment of CSII's total USF contribution obligation 
for the month.
57 Globcom, Inc., 18 FCC Rcd at 19903,  26 (2003).
58 47 U.S.C.  503(b)(1)(B); see also 47 C.F.R.  1.80(a)(2).
59 47 U.S.C.  503(b)(2)(B); see also 47 C.F.R.  1.80(b)(2).  
Effective September 7, 2004, the Commission amended its rules to 
increase the maximum penalties to account for inflation since the 
last adjustment of the penalty rates.  See Amendment of Section 
1.90 of the Commission's Rules, Order, 19 FCC Rcd 10945, 10946  
6 (2004).
60 47 U.S.C.  503(b)(2)(D); see also Forfeiture Policy 
Statement, 12 FCC Rcd at 17100,  27; 47 C.F.R.  1.80(b).
61 47 U.S.C.  503(b)(6)(B); see also 47 C.F.R.  1.80(c)(3).
62 See, e.g., Carrera Communications, LP, Notice of Apparent 
Liability for Forfeiture and Order, FCC 05-147, 2005 WL 1750417 
(F.C.C.) at  24 (released July 25, 2005); InPhonic, Inc., 2005 
WL 1750418 (F.C.C.) at  24; Teletronics, Inc., 2005 WL 1750420 
(F.C.C.) at  28; Globcom, Inc., 18 FCC Rcd at 19903; Roadrunner 
Transp., Inc., Forfeiture Order, 15 FCC Rcd 9669, 9671 (2000); 
Liab. of E. Broad. Corp., Memorandum Opinion and Order, 10 F.C.C. 
2d 37 (1967).
63 See InPhonic, Inc., 2005 WL 1750418 (F.C.C.) at  25; 
Teletronics, Inc., 2005 WL 1750420 (F.C.C.) at  29.
64 See Telecom House, Inc, 2005 WL 2233570 (F.C.C.) at  29; 
InPhonic, Inc., 2005 WL at 1750418 (F.C.C.) at  26; Teletronics, 
Inc., 2005 WL 1750420 (F.C.C.) at  30.
65 InPhonic, Inc., 2005 WL 1750418 (F.C.C.) at  26; Teletronics, 
Inc., 2005 WL 1750420 (F.C.C.) at  30.
66 InPhonic, Inc., 2005 WL 1750418 (F.C.C.) at  26; Teletronics, 
Inc., 2005 WL 1750420 (F.C.C.) at  30.
67 Globcom, Inc., 18 FCC Rcd at 19905.  See also Carrera 
Communications, Inc., 2005 WL 1750417 (F.C.C.) at 25; InPhonic, 
Inc., 2005 WL 1750418 (F.C.C.) at  27; Teletronics, Inc., 2005 
WL 1750420 (F.C.C.) at  31.
68 See 47 U.S.C.  254(d).
69 See Globcom, Inc., 18 FCC Rcd at 19903-19904,  25-27.  See 
also Carrera Communications, Inc., 2005 WL 1750417 (F.C.C.) at  
26; InPhonic, Inc., 2005 WL 1750418 (F.C.C.) at  28; Telecom 
Mgmt., Inc., 2005 WL 1949643 (F.C.C.) at  17; Teletronics, Inc., 
2005 WL 1750420 (F.C.C.) at  32.
70 See, e.g., Globcom, Inc., 18 FCC Rcd at 19903-19904,  25-27.  
See also Carrera Communications, Inc., 2005 WL 1750417 (F.C.C.) 
at  27; InPhonic, Inc., 2005 WL 1750418 (F.C.C.) at  29; OCMC, 
Inc., 2005 WL 1949644 (F.C.C.) at Telecom Mgmt., Inc., 2005 WL 
1949643 (F.C.C.) at  18; Telectronics, Inc., 2005 WL 1750420 
(F.C.C.) at  32.
71 See, e.g,, Carrera Communications, Inc., 2005 WL 1750417 
(F.C.C.) at  27; Telectronics, Inc., 2005 WL 1750420 (F.C.C.) at 
 33.
72 Forfeiture Policy Statement, 12 FCC Rcd at 17099; see also 47 
C.F.R.  1.80(b)(4).
73 47 C.F.R.  64.1195.
74 See Business Options, Inc., Consent Decree, 19 FCC Rcd 2916 
(2003); NOS Communications, Inc., Affinity Network Incorporated 
and NOSVA Limited Partnership, Consent Decree, 2003 WL 22439710 
(2003).
75 47 C.F.R.  1.1910.
76 47 U.S.C.  503(b).
77 47 C.F.R.  1.80.
78 See 47 C.F.R.  1.80(f)(3).
79 47 U.S.C.  4(i), 219(b), and 254(d).
80 47 C.F.R.  54.706(a) and 54.711(a).
81 See 47 C.F.R.  1.1914.