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February 28, 2006
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. Tom Tsao, Vice President
918 Radecki Court
City of Industry, CA 91748
Re: Notice of Suspension and of Proposed
File No. EB-06-IH-0853
Dear Mr. Tsao:
The Federal Communications Commission (``FCC'' or
``Commission'') has received notice of the conviction of
Premio, Inc., f/k/a Premio Computers, Inc. (``Premio'') for
conspiracy to suppress and eliminate competition in
violation of the Sherman Antitrust Act, 15 U.S.C. § 1, and
for mail fraud and aiding and abetting in violation of 18
U.S.C. §§ 1341 and 2.1 Consequently, pursuant to 47 C.F.R.
§ 54.521, this letter constitutes official notice of
Premio's suspension from the schools and libraries universal
service support mechanism (``E-rate program''). In
addition, the Enforcement Bureau (``Bureau'') hereby
notifies Premio that we are commencing debarment proceedings
I. Notice of Suspension
Pursuant to section 54.521(a)(4) of the Commission's
rules,3 Premio's conviction requires the Bureau to suspend
it from participating in any activities associated with or
related to the schools and libraries fund mechanism,
including the receipt of funds or discounted services
through the schools and libraries fund mechanism, or
consulting with, assisting, or advising applicants or
service providers regarding the schools and libraries
support mechanism.4 Premio's suspension becomes effective
upon the earlier of its receipt of this letter or
publication of notice in the Federal Register.5
Suspension is immediate pending the Bureau's final
debarment determination. Premio may contest this suspension
or the scope of this suspension by filing arguments in
opposition to the suspension, with any relevant
documentation. Premio's request must be received within 30
days after it receives this letter or after notice is
published in the Federal Register, whichever comes first.6
Such requests, however, will not ordinarily be granted.7
The Bureau may reverse or limit the scope of suspension only
upon a finding of extraordinary circumstances.8 Absent
extraordinary circumstances, the Bureau will decide any
request for reversal or modification of suspension within 90
days of its receipt of such request.9
II. Notice of Proposed Debarment
II.A. Reasons for and Cause of Debarment
The Commission has established procedures to prevent
persons who have ``defrauded the government or engaged in
similar acts through activities associated with or related
to the schools and libraries support mechanism'' from
receiving the benefits associated with that program.10
Premio pled guilty to antitrust, mail fraud and aiding and
abetting charges for activities in connection with its
participation in the E-rate program with two school
districts in California.
In connection with the antitrust crime charged against
Premio, the company admitted that it conspired with one or
more vendors of equipment and services related to
telecommunications, Internet access and/or internal
connections to suppress and eliminate competition for E-rate
projects in the West Fresno Elementary School District by
allocating contracts and submitting fraudulent and non-
competitive bids. More specifically, the company discussed
prospective bids for the E-rate project with its co-
conspirators, agreed with them who would serve as lead
contractor and subcontractor on the project, and worked with
consultants who awarded, or influenced the award of,
contracts to the conspirators, and disqualified bids from
non-conspirators.11 In connection with the mail fraud
charged against Premio, the company admitted that it sought
payment of more than $1 million in E-rate funding for
telecommunications servers and related installation and
maintenance it was purportedly going to provide to the
Highland Park School District in California, when in fact it
actually delivered ineligible video conferencing
These actions constitute the conduct or transactions
upon which this debarment proceeding is based.13 Moreover,
Premio's conviction on the basis of these acts falls within
the categories of causes for debarment defined in section
54.521(c) of the Commission's rules.14 Therefore, pursuant
to section 54.521(a)(4) of the Commission's rules, Premio's
conviction requires the Bureau to commence debarment
proceedings against it.
II.B. Debarment Procedures
Premio may contest debarment or the scope of the
proposed debarment by filing arguments and any relevant
documentation within 30 calendar days of the earlier of the
receipt of this letter or of publication in the Federal
Register.15 Absent extraordinary circumstances, the Bureau
will debar Premio.16 Within 90 days of receipt of any
opposition to Premio's suspension and proposed debarment,
the Bureau, in the absence of extraordinary circumstances,
will provide Premio with notice of its decision to debar.17
If the Bureau decides to debar Premio, its decision will
become effective upon the earlier of Premio's receipt of a
debarment notice or publication of the decision in the
II.C. Effect of Debarment
If and when Premio's debarment becomes effective, it
will be prohibited from participating in activities
associated with or related to the schools and libraries
support mechanism for some period of time.19
Please direct any responses to the following address:
Federal Communications Commission
Investigations and Hearings Division
445 12th Street, S.W.
Washington, D.C. 20554
If Premio submits its response via hand-delivery or non-
United States Postal Service delivery (e.g., Federal
Express, DHL, etc.), please send the response to Ms. Lee at
the following address:
Federal Communications Commission
9300 East Hampton Drive
Capitol Heights, MD 20743
If Premio has any questions, please contact Ms. Lee via
mail, by telephone at (202) 418-1420 or by e-mail at
firstname.lastname@example.org. If Ms. Lee is unavailable, you may
contact Eric Bash by telephone at (202) 418-1188 and by e-
mail at email@example.com.
William H. Davenport
cc: Paul J. Loh, Esq., Willenken Wilson Loh & Lieb, LLP
Michael F. Wood, Esq., United States Department of
Justice, Antitrust Division
Sara Winslow, Esq., Assistant United States Attorney
Alicia Bentley, Esq., United States Department of
Justice, Civil Division
Kristy Carroll, Esq., USAC
1 Any further reference in this letter to ``your
conviction'' refers to Premio's February 22, 2006 guilty
plea and conviction of these counts. United States v.
Premio, Inc., Criminal Docket No. 3:06-CR-06-0086 MMC, Plea
Agreement (N.D.Cal. filed Feb. 22, 2006) (``Premio Plea
Agreement''). The Order accepting this plea agreement was
signed by the Court on February 22, 2006 and entered on
February 23, 2006, and the Plea Agreement was entered on
February 24, 2006.
2 47 C.F.R. § 54.521; 47 C.F.R. § 0.111(a)(14) (delegating
to the Enforcement Bureau authority to resolve universal
service suspension and debarment proceedings pursuant to 47
C.F.R. § 54.521).
3 47 C.F.R. § 54.521(a)(4). See Schools and Libraries
Universal Service Support Mechanism, Second Report and Order
and Further Notice of Proposed Rulemaking, 18 FCC Rcd 9202,
9225-9227, ¶¶ 67-74 (2003) (``Second Report and Order'').
4 Second Report and Order, 18 FCC Rcd at 9225, ¶ 67; 47
U.S.C. § 254; 47 C.F.R §§ 54.502-54.503; 47 C.F.R.
5 Second Report and Order, 18 FCC Rcd at 9226, ¶ 69; 47
C.F.R. § 54.521(e)(1).
6 Second Report and Order, 18 FCC Rcd at 9226, ¶ 70; 47
C.F.R. § 54.521(e)(4).
7 Second Report and Order, 18 FCC Rcd at 9226, ¶ 70.
8 47 C.F.R. § 54.521(e)(5).
9 See Second Report and Order, 18 FCC Rcd at 9226, ¶ 70; 47
C.F.R. §§ 54.521(e)(5), 54.521(f).
10 Second Report and Order, 18 FCC Rcd at 9225, ¶ 66. The
Commission's debarment rules define a ``person'' as ``[a]ny
individual, group of individuals, corporation, partnership,
association, unit of government or legal entity, however,
organized.'' 47 C.F.R. § 54.521(a)(6).
11 See Premio Plea Agreement at 5.
12 See Premio Plea Agreement at 5-7.
13 Second Report and Order, 18 FCC Rcd at 9226, ¶ 70; 47
C.F.R. § 54.521(e)(2)(i).
14 ``Causes for suspension and debarment are the conviction
of or civil judgment for attempt or commission of criminal
fraud, theft, embezzlement, forgery, bribery, falsification
or destruction of records, making false statements,
receiving stolen property, making false claims, obstruction
of justice and other fraud or criminal offense arising out
of activities associated with or related to the schools and
libraries support mechanism.'' 47 C.F.R. § 54.521(c). Such
activities ``include the receipt of funds or discounted
services through the schools and libraries support
mechanism, or consulting with, assisting, or advising
applicants or service providers regarding schools and
libraries support mechanism described in this section ([47
C.F. R.] § 54.500 et seq.).'' 47 C.F.R. § 54.521(a)(1).
15 See Second Report and Order, 18 FCC Rcd at 9226, ¶ 70; 47
C.F.R. §§ 54.521(e)(2)(i), 54.521(e)(3).
16 Second Report and Order, 18 FCC Rcd at 9227, ¶ 74.
17 See id., 18 FCC Rcd at 9226, ¶ 70; 47 C.F.R. §
18 Id. The Commission may reverse a debarment, or may limit
the scope or period of debarment upon a finding of
extraordinary circumstances, following the filing of a
petition by you or an interested party or upon motion by the
Commission. 47 C.F.R. § 54.521(f).
19 Second Report and Order, 18 FCC Rcd at 9225, ¶ 67; 47
C.F.R. §§ 54.521(d), 54.521(g).