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Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-05-IH-0808
Universal Telecommunications, Inc. ) NAL/Acct. No. 200632080162
Apparent Liability for Forfeiture ) FRN 0010-5735-09
NOTICE OF APPARENT LIABILITY FOR FORFEITURE AND ORDER
Adopted: June 13, 2006 Released: June 15, 2006
By the Chief, Enforcement Bureau:
1. In this Notice of Apparent Liability for Forfeiture and Order ("NAL"),
we find that Universal Telecommunications, Inc. ("Universal")
apparently violated Commission orders by willfully and repeatedly
failing to respond to directives of the Enforcement Bureau ("Bureau")
to provide certain information and documents. Based on our review of
the facts and circumstances of this case, and for the reasons
discussed below, we find that Universal is apparently liable for a
monetary forfeiture in the amount of $20,000.
2. Universal is a Georgia-based company that characterizes itself as
providing "an array of services for businesses across the United
States and Canada." Universal offers various services to the public,
including "affordable long distance to millions of satisfied customers
throughout the country." It registered with the Commission as an
interstate telecommunications carrier on March 22, 2004 and appears to
have filed some Telecommunications Reporting Worksheets ("Worksheets")
after that date.
3. Starting in 2004, the Bureau has conducted several audits to identify
resellers of telecommunications services that failed to register as
telecommunications service providers with the Commission, and thus
also may have failed to satisfy various Commission program
requirements. Universal was identified as a reseller in one of these
audits. Bureau staff determined that although Universal appeared to
have registered and filed certain Worksheets, it subsequently failed
to file required Worksheets and make associated program payments. The
Bureau then issued a letter of inquiry ("LOI") to Universal on August
17, 2005. The LOI directed Universal, among other things, to submit a
sworn written response to a series of questions relating to
Universal's apparent failure to file Worksheets and to make mandated
federal telecommunications regulatory program payments. Universal did
not respond to the LOI on the due date for its response or at any time
since that date. Universal also has not responded to telephone
messages left by Bureau staff regarding the failure to respond to the
4. As a result of Universal's failure to respond, the Bureau sent a
follow-up letter on October 21, 2005, directing Universal to provide
complete responses to inquiries in the original LOI. The October 21,
2005 Letter also warned Universal that its failure to respond fully to
the Bureau's LOI could subject Universal to potential enforcement
action. Universal again failed to respond to the October 21, 2005
Letter in any manner. In a final attempt to solicit a response, Bureau
staff contacted Universal via telephone and left multiple messages
about its continuing failure to respond. To date, the Bureau has not
received any response from Universal.
A. Apparent Violation
5. Under section 503(b)(1) of the Communications Act of 1934, as amended
(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. 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. 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 and the Commission has so
interpreted the term in the section 503(b) context. The Commission
also may assess a forfeiture for violations that are merely repeated,
and not willful. "Repeated" means that the act was committed or
omitted more than once, or lasts more than one day. 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. The Commission will then issue a forfeiture
if it finds by a preponderance of the evidence that the person has
willfully or repeatedly violated the Act or a Commission order or
6. Sections 4(i), 4(j), 218, and 403 of the Act afford the Commission
broad authority to investigate the entities it regulates. Section 4(i)
authorizes the Commission to "issue such orders, not inconsistent with
this Act, as may be necessary in the execution of its functions," and
section 4(j) states that "the Commission may conduct its proceedings
in such manner as will best conduce to the proper dispatch of business
and to the ends of justice." Section 403 of the Act grants the
Commission "full authority and power at any time to institute an
inquiry, on its own motion . . . relating to the enforcement of any of
the provisions of this Act."
7. We find that Universal apparently violated Commission orders by
failing on multiple occasions to respond to Bureau inquiries. Section
218 of the Act specifically authorizes the Commission to "obtain from
. . . carriers . . . full and complete information necessary to enable
the Commission to perform the duties and carry out the objects for
which it was created." Sections 4(i), 4(j), and 403 of the Act
unequivocally grant the Commission the power to direct responses to
inquires in order to execute its functions. As indicated above, the
Bureau directed Universal to provide certain documents and information
to enable the Commission to perform its enforcement function and
evaluate allegations that Universal violated Commission rules. There
is no question that Universal received both the August 17, 2005 LOI
and the October 21, 2005 Letter, as evidenced by confirmation of the
facsimile transmissions and U.S. certified mail return receipts
executed by Universal agents. Further, Bureau staff took the
additional step of attempting to contact Universal by telephone. In
those messages, Bureau staff specifically stated that the Bureau had
not received the required response to the LOI. Despite the Bureau's
significant efforts to elicit information from Universal, as of the
date of this NAL, Universal has failed to provide any response to the
Bureau's LOI. We conclude that Universal's continuing failure to
respond to the Bureau's LOI constitutes an apparent willful and
repeated violation of Commission orders.
A. Forfeiture Amount
8. Section 503(b)(1) 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. 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 $1,325,000 for a single act or failure to
act. 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
9. Section 1.80 of the Commission's rules and the Commission's Forfeiture
Policy Statement establish a base forfeiture amount of $3,000 for
failure to file required forms or information, and $4,000 for failure
to respond to a Commission communication. Universal's failures to
respond occurred despite Bureau staff's repeated attempts to call
Universal's attention to the importance of responding to the LOI. We
find that the total failure to respond to the LOI, notwithstanding the
Bureau's efforts to contact Universal executives, warrants a
substantial increase to this base amount. Misconduct of this type
exhibits a disregard for the Commission's authority and, more
importantly, threatens to compromise the Commission's ability to
adequately investigate violations of its rules. In this case, such
misconduct inhibits our ability adequately to detect and deter
potential rule violations in an area of critical importance to the
Commission -- contributions to the Universal Service Fund. Prompt and
full responses to Bureau inquiry letters are critical to the
Commission's enforcement function. We therefore propose a total
forfeiture against Universal of $20,000 for failing to respond to
Commission communications. This forfeiture amount is consistent with
recent precedent in similar cases, where companies failed to provide
responses to LOIs concerning compliance with the Commission's
universal service rules despite evidence that the LOIs had been
10. We also direct Universal to respond fully to the August 17, 2005 LOI
within thirty (30) days of the release of this order. Failure to do so
may constitute an additional violation potentially subjecting
Universal to further penalties, including potentially higher monetary
forfeitures, the revocation of operating authority, and the
disqualification of any Universal principal from the provision of any
common carrier services without the prior consent of the Commission.
IV. ORDERING CLAUSES
11. ACCORDINGLY, IT IS ORDERED THAT, pursuant to section 503(b) of the
Communications Act of 1934, as amended, 47 U.S.C. S 503(b), and
section 1.80 of the Commission's rules, 47 C.F.R. S1.80, Universal
Telecommunications, Inc., is hereby NOTIFIED of its APPARENT LIABILITY
FOR FORFEITURE in the amount of $20,000 for willfully and repeatedly
violating Commission orders.
12. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
Commission's rules, 47 C.F.R. S 1.80, within thirty (30) days of the
release date of this NOTICE OF APPARENT LIABILITY FOR FORFEITURE,
Universal Telecommunications, Inc., SHALL PAY the full amount of the
proposed forfeiture currently outstanding on that date or SHALL FILE a
written statement seeking reduction or cancellation of the proposed
13. 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 by check or money order may be mailed to Federal
Communications Commission, P.O. Box 358340, Pittsburgh, PA 15251-8340.
Payment by overnight mail may be sent to Mellon Bank /LB 358340, 500
Ross Street, Room 1540670, Pittsburgh, PA 15251. Payment by wire
transfer may be made to ABA Number 043000261, receiving bank Mellon
Bank, and account number 911-6106.
14. IT IS FURTHER ORDERED, that pursuant to sections 4(i), 4(j), 218 and
403 of the of the Communications Act of 1934, as amended, 47 U.S.C. SS
4(i), 4(j), 218 and 403, and section 54.711 of the Commission's rules,
47 C.F.R. S 54.711, Universal Telecommunications, Inc., shall fully
respond to the August 2005 and October 2005 Letters of Inquiry sent by
the FCC's Enforcement Bureau within thirty (30) days of the release of
15. The response, if any, to this NOTICE OF APPARENT LIABILITY FOR
FORFEITURE must be mailed to William H. Davenport, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12^th Street, S.W., Suite 4-C330,
Washington, D.C. 20554 and must include the NAL/Acct. No. referenced
above. E-mail address: firstname.lastname@example.org.
16. 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.
17. Requests for payment of the full amount of this NOTICE OF APPARENT
LIABILITY FOR FORFEITURE under an installment plan should be sent to
Associate Managing Director -- Financial Operations, Room 1A625, 445
12^th Street, S.W., Washington, D.C. 20554.
18. IT IS FURTHER ORDERED THAT a copy of this NOTICE OF APPARENT LIABILITY
shall be sent, by certified mail/return receipt requested to Ms. Ruth
Peterson, President, Universal Telecommunications, Inc., 3781
Presidential Parkway, Atlanta, Georgia 30340 and 2799 Lawrenceville
Highway, Suite 111, Decatur, Georgia 30033 and CT Corporation,
Registered Agent, Universal Telecommunications, Inc, 111 Eighth
Avenue, New York, New York 10011.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
See http://www.utiworldnet.com/USP/servicesUSP.asp (last accessed on
June 13, 2006.
See 47 C.F.R. S 64.1195(a).
Letter from Hillary S. DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, to Ruth Peterson, Universal and CT
Corporation, Registered Agent for Universal, dated August 17, 2005
("August 17, 2005 LOI"). The LOI specifically required Universal to
provide relevant information with respect to Universal and any affiliate,
predecessor-in-interest, parent company, subsidiary, director, officer,
employee, and agent. Receipt of the letter is shown by confirmation of the
facsimile transmission to the Universal and CT Corporation facsimile
numbers and by the certified mail return receipts.
Letter from Hillary S. DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, to Ruth Peterson, Universal, dated October
21, 2005 ("October 21, 2005 Letter"). The letter was sent by certified
mail/return receipt and by facsimile to Universal in Atlanta and Decatur,
Georgia and CT Corporation, Universal's Registered Agent, in New York, NY.
Receipt of the letter is shown by confirmation of the facsimile
transmission to the Universal and CT Corporation facsimile numbers and by
the certified mail return receipts.
47 U.S.C. S 503(b)(1)(B); 47 C.F.R. S 1.80(a)(1); see also 47 U.S.C. S
503(b)(1)(D) (forfeitures for violation of 14 U.S.C. S 1464).
47 U.S.C. S 312(f)(1).
H.R. Rep. No. 97-765, 97^th Cong. 2d Sess. 51 (1982).
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.").
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362, P 10
(2001) ("Callais Cablevision") (issuing a Notice of Apparent Liability
for, inter alia, a cable television operator's repeated signal leakage).
Southern California Broadcasting Co., 6 FCC Rcd at 4388, P 5; Callais
Cablevision., 16 FCC Rcd at 1362, P 9.
47 U.S.C. S 503(b); 47 C.F.R. S 1.80(f).
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
7591 (2002) ("SBC Forfeiture Order").
$7 U.S.C. SS 154(i), (j), 218, & 403.
47 U.S.C. S 154(i), (j).
47 U.S.C. S 403; see also 47 U.S.C. S 154(i), (j).
47 U.S.C. S 218.
47 U.S.C. SS 154(i),(j), & 403.
See, e.g., SBC Forfeiture Order, 17 FCC Rcd 7589, 7599-7600, PP 23-28
(ordering $100,000 forfeiture for egregious and intentional failure to
certify the response to a Bureau inquiry); Globcom, Inc., Notice of
Apparent Liability for Forfeiture and Order, 18 FCC Rcd 19893, 19898 n. 36
(2003) (noting delayed response to an LOI is considered dilatory behavior
which may result in future sanctions); BigZoo.Com Corporation, Notice of
Apparent Liability for Forfeiture and Order, 19 FCC Rcd 24437 (Enf. Bur.
2004), Order of Forfeiture, 20 FCC Rcd 3954 (Enf. Bur. 2005) ("BigZoo")
(ordering $20,000 forfeiture for failure to respond to an LOI); American
Family Association, Licensee of Station KBMP(FM), Enterprise, Kansas,
Notice of Apparent Liability for Forfeiture, 19 FCC Rcd 14072, Forfeiture
Order, 19 FCC Rcd 22025 (Enf. Bur. 2004) (ordering $3,000 forfeiture
against non-commercial educational station for a partial response to an
LOI); World Communications Satellite Systems, Inc., Notice of Apparent
Liability for Forfeiture, 18 FCC Rcd 18545 (Enf. Bur. 2003) (proposing
$10,000 forfeiture for non-responsive reply to an LOI); Donald W.
Kaminski, Jr., Notice of Apparent Liability for Forfeiture, 16 FCC Rcd
10707 (Enf. Bur. 2001), Forfeiture Order, 18 FCC Rcd 26065 (Enf. Bur.
2003) (ordering $4,000 forfeiture for individual's failure to respond to
47 U.S.C. S 503(b)(1)(B); 47 C.F.R. S 1.80(a)(2).
47 U.S.C. S 503(b)(2)(B); see also 47 C.F.R. S 1.80(b)(2); Amendment of
Section 1.80(b) of the Commission's Rules, Adjustment of Forfeiture Maxima
to Reflect Inflation, Order, 19 FCC Rcd 10945 (2004).
47 U.S.C. S 503(b)(2)(D).
47 C.F.R. S 1.80; Commission's Forfeiture Policy Statement and Amendment
of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines,
Report and Order, 12 FCC Rcd 17087, 17114 (1997) ("Forfeiture Policy
Statement"), recon. denied 15 FCC Rcd 303 (1999).
See, e.g., BigZoo, 20 FCC Rcd at 3955 (ordering $20,000 forfeiture for
failure to respond to LOI); QuickLink Telecom, Inc., Order of Forfeiture,
20 FCC Rcd 14464 (Enf. Bur. 2005) (same).
See CCN, Inc., et al, Order to Show Cause and Opportunity for Hearing,
Order, 13 FCC Rcd 13599 (1998) (revoking carrier's operating authority
based on findings of repeated violations); see also, e.g., 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).
Federal Communications Commission DA 06-1267
Federal Communications Commission DA 06-1267