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Federal Communications Commission
Washington, D.C. 20554
) File No. EB-04-IH-0587
In the Matter of
) NAL/Acct. No. 200532080142
Telecom Management, Inc.
) FRN No. 0005-8591-11
ORDER OF fORFEITURE
Adopted: September 14, 2006 Released: September 15, 2006
By the Commission:
1. In this Order of Forfeiture, we assess a monetary forfeiture of
$237,992 against Telecom Management, Inc. ("TMI") for willful and
repeated violations of the Communications Act of 1934, as amended (the
"Act"), and the Commission's rules. For the reasons set forth below,
we find that TMI willfully and repeatedly violated the Act and the
Commission's rules by failing to contribute to the Universal Service
Fund ("USF") and failing to pay its regulatory fees.
2. The facts and circumstances surrounding this case are set forth in
more detail in the Notice of Apparent Liability and Order ("NAL" or
"TMI NAL") previously issued by the Commission and need not be
repeated here at length. TMI is a Maine-based telecommunications
provider that offers long distance plans, toll free numbers, and phone
cards. In 2002, it began providing these services by reselling
intrastate, interstate, and international long-distance services
purchased from Global Crossing Bandwidth, Inc. ("Global Crossing"). As
such, TMI is subject to the obligations of section 254(d) of the Act
and sections 54.706, 1.1154, and 1.1157(a)(1) of our rules. 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." Section 54.706 of the Commission's rules requires all
telecommunications carriers that provide interstate telecommunications
services and certain other providers of interstate telecommunications
to contribute to the USF based on their projected collected end-user
telecommunications revenues, and on a contribution factor determined
quarterly by the Commission. Sections 1.1154 and 1.1157 require that
interstate telecommunications carriers pay regulatory fees on the
basis of interstate and international end-user revenue.
3. The Universal Service Administrative Company ("USAC") administers the
universal service support mechanisms and performs billing and
collection functions. The Commission requires carriers to provide
revenue information to USAC on FCC Form 499 ("Telecommunications
Reporting Worksheet") on a quarterly and annual basis, and USAC uses
that information to determine the amount of each carrier's universal
service contributions on a quarterly basis, with a yearly true-up
using the Annual Worksheet. USAC bills carriers, including TMI, each
month based on their quarterly contribution amount.
4. In 2004, the Enforcement Bureau ("Bureau") sought to identify
resellers of telecommunications service that had failed to register as
telecommunications service providers with the Commission as well as
satisfy various other Commission program requirements. To this end, on
March 30, 2004 and June 18, 2004, the Bureau's audit staff sent
letters to TMI requesting information pertaining to its compliance
with the Commission's registration requirement. After receiving no
response, the Bureau issued a letter of inquiry ("LOI") on November
18, 2004. The December 20, 2004 LOI response and January 17, 2005
supplemental response filed by TMI confirmed that the carrier failed
to contribute to the USF and pay regulatory fees while operating as an
interstate telecommunications carrier for more than two years despite
having collected several hundred thousand dollars in USF fees from its
5. On August 12, 2005, the Commission issued an NAL against TMI proposing
a forfeiture of $280,000 for the apparent willful and repeated failure
to pay universal service contributions on three occasions from August
to October 2004 and failure to timely make a regulatory fee payment in
August 2004. TMI submitted a response to the NAL on August 24, 2005.
6. Under section 503(b)(1) 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. 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 may also 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 lasted 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 rule.
7. Section 503(b)(2)(B) of the Act authorizes the Commission to assess a
forfeiture of up to $120,000 for each violation or each day of a
continuing violation, up to a statutory maximum of $1.2 million for a
single act or failure to act for violations occurring before September
7, 2004, and 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 for violations occurring on or after
September 7, 2004. 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."
8. As set forth below, we find by a preponderance of the evidence that
TMI violated section 254(d) of the Act and sections 54.706(a), 1.1154,
and 1.1157(b)(1) of the Commission's rules by willfully and repeatedly
failing to make contributions toward the Universal Service Fund and
failing to pay regulatory fees to the Commission.
9. In the TMI NAL, we proposed a forfeiture of $280,000 for TMI's
apparent willful and repeated violations of section 254(d) of the Act
and sections 54.706(a), 1.1154, and 1.1157(b)(1)of the Commission's
rules. We calculated this amount, consistent with Commission
precedent, as follows. For TMI's apparent failure to pay universal
service contributions, we applied a base forfeiture amount of $20,000
for each of three months of nonpayment. We then added one-half of the
approximately $420,000 in unpaid universal service contributions, or
$210,000, to the base forfeiture for a proposed forfeiture of
$270,000. For TMI's apparent failure to pay regulatory fees, we
applied a $10,000 forfeiture. As explained below, we reduce the
forfeiture amount by $42,008 based on an USAC amendment to TMI's
unpaid USF balance but otherwise reject TMI's various arguments to
eliminate or reduce the forfeiture further. We therefore impose a
forfeiture of $237,992 against TMI.
A. TMI's Violations Were Willful and Repeated
10. In the TMI NAL Response, TMI admits it failed to make USF
contributions and pay regulatory fees prior to November 2004 but
claims that its failures were neither willful nor repeated. Based on a
preponderance of the evidence, and as discussed in more detail below,
we reject TMI's claims. We find that it violated section 254(d) of the
Act and sections 54.706, 1.1154 and 1.1157(b)(1) of the Commission's
rules by willfully and repeatedly failing to make any of its monthly
universal service contribution payments for more than two years,
including three such failures within the year prior to our issuing the
TMI NAL, and by failing to pay any regulatory fees until December
11. TMI argues that it used a third-party vendor to handle all compliance
obligations and it assumed all filings and payments, including the USF
contributions and regulatory fee payments, were being made by the
third-party vendor. TMI thus contends it cannot be held "solely
liable" for these failures because the third party vendor, not TMI,
failed to make the payments. TMI's attempt to hold this vendor liable
for its own failure to live up to its regulatory obligations is
misplaced given the Act's express provision holding that the actions
of a common carrier's agent are attributable to the carrier.
Specifically, section 217 of the Act states that "the act, omission,
or failure of any...agent or other person acting...for any common
carrier...shall in every case be also deemed to be the act, omission,
or failure of such carrier." TMI, as a common carrier, is responsible
pursuant to section 217 for any failures to comply with our rules by
the third-party vendor acting as its agent. Accordingly, TMI is
responsible for knowing and ultimately complying with its regulatory
obligations and the failure of its agent does not exculpate TMI.
12. TMI also contends that its violations were not willful, as defined in
section 312(f) of the Act, because it did not knowingly or
deliberately fail to satisfy its regulatory obligations when its
third-party vendor failed to pay the USF contributions and regulatory
fees. As stated above, however, willfulness in the context of section
503(b) does not require that an entity know it is acting unlawfully,
but merely that it knows it is engaged in the conduct constituting the
rule violations. Therefore, TMI (acting through its vendor) willfully
failed to pay USF contributions and regulatory fees. As discussed
above, TMI's use of a third-party vendor to satisfy its regulatory
obligations does not shelter it from a finding of willfulness.
13. Similarly, we reject TMI's position that its actions were not willful
based on factual distinctions between this case and the Commission's
Globcom decision. TMI claims the Commission relied on Globcom in
finding TMI willfully failed to make USF contributions and pay
regulatory fees. Unlike Globcom, TMI states it filed some worksheets,
and began making USF payments before it received notice from the
Commission. We reject TMI's position. In the TMI NAL, the Commission
cited to Globcom for various propositions (such as identifying the
serious, negative impact failure to pay USF contributions has on the
program and the forfeiture methodology), but did not rely on Globcom
to establish that TMI acted willfully under the Act. TMI's attempt
therefore to establish its lack of willfulness by distinguishing
Globcom is wholly unpersuasive.
14. TMI also generally claims that its violations were not repeated. TMI
however fails to provide any specific argument or cite to any legal
rationale supporting this claim, discussing only its belief that its
actions were not willful. As discussed above, "repeated" means the
"commission or omission" of an act "more than once or...for more than
one day." No evidence is offered to counter the TMI NAL's apparent
finding that TMI's violations were repeated. TMI failed to remit USF
fees to USAC and to pay regulatory fees for more than two years.
Therefore, we find that TMI's failures were repeated.
15. Finally, TMI argues it should not be held liable for forfeiture
because it claims it never received the Audit Letters and TMI contends
the Commission based its NAL findings on TMI's failure to respond to
those letters. TMI's assertion is incorrect. TMI's failure to respond
to those specific letters had no bearing on the Commission's decision
to propose, or its calculation of, the forfeiture. As discussed herein
and in the TMI NAL, we based the TMI forfeiture on TMI's failures to
make required payments to the USF and the FCC and calculated the
forfeiture based on Commission precedent unrelated to any failure to
respond to Commission inquiries. No forfeiture was proposed in the NAL
for TMI's failure to respond to any Commission communication.
A. Forfeiture Amount
16. In its response to the Commission's TMI NAL, TMI does not dispute the
amount of the forfeiture assigned for failure to timely pay its
regulatory fees. TMI does argue that the Commission should eliminate
or reduce the portion of the forfeiture amount attributable to its USF
violations because the amount of the forfeiture is in error and
because TMI is unable to pay the $280,000 forfeiture amount. After
full consideration of all TMI's assertions, we reject TMI's claim that
it is unable to pay the proposed forfeiture but, in light of new
information provided by TMI, we find that the forfeiture amount should
17. TMI first argues that the forfeiture amount is not warranted because
the violations were committed by its vendor and therefore were not
intentional or deliberate on TMI's part. TMI asserts "no justice will
be served by tacking an upward adjustment or penalty based upon past
occurrences which were non-deliberate, unintentional, and of which TMI
was completely unaware." This argument merely re-packages TMI's
already rejected position that it cannot be held liable for the
actions of its vendor. As discussed above, TMI's failures were in fact
both willful and repeated under the Act and Commission precedent and
the proposed forfeiture was premised on these willful and repeated
actions. Therefore, we reject TMI's attempt to have the USF forfeiture
rescinded on this basis.
18. TMI also suggests it would be inappropriate to adjust the forfeiture
upward given its efforts to come into compliance before it received
the LOI. Initially, we note that our forfeiture methodology already
takes into account any effort by TMI to pay down its balance because
the upward adjustment is dependent on the outstanding USF balance.
TMI's attempt to reduce or eliminate the upward adjustment because of
its compliance efforts is misguided, however, considering the totality
of its non-compliance. Specifically, the Commission based the upward
adjustment on the seriousness, extensive period, and scope of TMI's
universal service nonpayment violations. Prior to TMI's purported
efforts to comply, it collected several hundred thousand dollars for
USF from its end users, yet withheld USF payments for a period of over
two years. Moreover, only after the Bureau's investigation began did
TMI back-file all of the required forms that would permit USAC to
calculate TMI's outstanding balance. Thus, regardless of TMI's
purported pre-investigation efforts, there were significant and
long-standing problems with TMI's compliance. TMI's conduct threatens
the integrity and the viability of the universal service program.
Based on the totality of the factors under consideration, we deny
TMI's request to reduce the USF upward adjustment amount on this
19. Finally, we conclude, notwithstanding the foregoing, that the amount
of the forfeiture should be reduced by $42,008 based on a revision to
TMI's outstanding debt. TMI points out that the $210,000 upward
adjustment in the proposed forfeiture is incorrect because the USF
past-due debt upon which it was based has been revised. As explained
in the TMI NAL and consistent with the Commission precedent, the
upward adjustment was based on one-half of the company's unpaid
contributions, in this case determined by the past-due debt as of the
date the investigation began. In support of its argument, TMI
submitted with its response a Contribution Letter of Appeal it filed
with USAC claiming that USAC overcharged TMI for USF past-due debt by
$77,773.81. On December 30, 2005, USAC acknowledged that TMI's past
due debt should be reduced and determined it would credit TMI for
overcharges of $84,017.03. In light of USAC's decision to credit TMI
for these overcharges, the USF outstanding balance is revised from
$420,000 to $335,983, and, as a result, we revise the upward
adjustment for TMI's failure to pay USF contributions to $167,992
(one-half of $335,983).
A. Ability to Pay
20. We finally address TMI's claim that it is unable to pay a $280,000
forfeiture. In particular, TMI states that the forfeiture would
increase its net loss for 2002, cause an overall net loss for 2003,
and eliminate its reported profits for 2004.
21. Although ability to pay is a statutory factor that we must consider in
setting a forfeiture amount, the Commission has repeatedly held that a
company's gross revenues are the best indicator of its ability to pay
assessed forfeitures. After reviewing the 2002-2004 tax returns
submitted by TMI in support of its claim, we find that TMI's gross
revenues are sufficiently large relative to the adjusted forfeiture
amount, and that the forfeiture amount represents a smaller percentage
of TMI's gross revenues than that deemed not to be excessive by the
Commission in other cases. We therefore reject TMI's contention that
it would be unable to pay the proposed forfeiture and decline to
reduce the forfeiture amount on that basis.
22. The facts show TMI withheld payments to Congressionally-mandated
telecommunications programs for over two years despite collecting
hundreds of thousands of dollars from its customers in USF charges.
TMI also failed to timely pay its regulatory fees. In light of the
seriousness, duration and scope of TMI's violations, we find that a
forfeiture of $237,992 is warranted. The forfeiture amount is composed
of (1) a penalty of $227,992 (the $270,000 proposed in the NAL, less
$42,008 associated with adjustments to CSII's USF debt) for failing to
make three monthly universal service contributions within one-year
prior to the release of the TMI NAL and (2) a penalty of $10,000 for
failing to timely make its 2004 regulatory fee program payment.
23. We note that TMI is subject to the Commission's "red light rule" as a
result of any non-payment detailed above and the Commission will not
act on, and may dismiss, any application or request for authorization
filed by TMI in accordance with the Commission's rules.
V. ORDERING CLAUSES
24. Accordingly, IT IS ORDERED THAT, pursuant to section 503(b) of the
Act, 47 U.S.C. S\001503(b), and section 1.80 of the Commission's
rules, 47 C.F.R. S 1.80, TMI SHALL FORFEIT to the United States
government the sum of $237,992 for willfully and repeatedly violating
the Act and Commission's rules.
25. Payment of the forfeiture shall be made in the manner provided for in
section 1.80 of the Commission's 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. 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. Requests for full payment under an installment plan
should be sent to: Associate Managing Director -- Financial
Operations, Room 1A625, 445 12^th Street, S.W., Washington, D.C.,
26. IT IS FURTHER ORDERED that a copy of this FOREITURE ORDER shall be
sent by certified mail, return receipt requested, to Sue Bouchard,
Telecom Management, Inc., 583 Warren Avenue, Portland, ME 04103, and
Leon Nowalsky, Counsel for Telecom Management, Inc., Nowalsky,
Bronston & Gothard, APLLC, 3500 N. Causeway Blvd, Suite 1442, Metaire,
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
47 U.S.C. S 254(d); 47 C.F.R. S 54.706(a).
47 C.F.R. SS 1154, 1157(b)(1).
Telecom Management Inc., Notice of Apparent Liability and Order, 20 FCC
Rcd 14151 (2005) ("TMI NAL").
See http://support.pioneertelephone.com/test/support.asp?kb=42 (last
accessed November 25, 2005).
See id.; Letter from Leon L .Nowalsky, Nowalsky, Bronston & Gothard,
Counsel for Telecom Management, Inc., to Hillary S. DeNigro, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, FCC, dated
December 20, 2004 ("TMI December 20, 2004 Letter"), Response to Inquiry 5.
47 U.S.C. S 254(d).
47 C.F.R. SS 54.706, 54.709.
47 C.F.R. SS 1.1154, 1.1157(b)(1).
See Changes to the Board of Directors of the National Exchange Carrier
Association, Inc., Report and Order and Second Order on Reconsideration,
12 FCC Rcd 18400, 18415, P 25 (1997) ("NECA Changes Order"); 47 C.F.R.
47 C.F.R. S 54.711.
See 47 C.F.R. S 54.709(a).
See, e.g., Federal-State Joint Board on Universal Service, Sixteenth Order
on Reconsideration (in CC Docket No. 96-45), Eighth Report and Order (in
CC Docket No. 96-45), and Sixth Report and Order (in CC Docket No.
96-262), 15 FCC Rcd 1679, 1687, P 18 (1999); Federal-State Board on
Universal Service, Further Notice of Proposed Rulemaking and Order, 15 FCC
Rcd 19947, 19954, P 17 (2000); Federal-State Joint Board on Universal
Service, 1998 Biennial Regulatory Review - Streamlined Contributor
Reporting Requirements Associated with Administration of
Telecommunications Relay Services, North American Numbering Plan, Local
Number Portability, and Universal Service Support Mechanisms,
Telecommunications Services for Individuals with Hearing and Speech
Disabilities, and the Americans with Disabilities Act of 1990,
Administration of the North American Numbering Plan and North American
Numbering Plan Cost Recovery Contribution Factor and Fund Size, Number
Resource Optimization, Telephone Number Portability, Truth-in-Billing and
Billing Format, Report and Order and Second Further Notice of Proposed
Rulemaking, 17 FCC Rcd 24952, 24971-72, P 35 (2002); Changes to the Board
of Directors of the National Exchange Carrier Association, Inc.,
Federal-State Board on Universal Service, Second Order on Reconsideration
(in CC Docket No. 97-21), 12 FCC Rcd 22423, 22425, P 3 (1997). Carriers
must pay by the date shown on the invoice from the Administrator. 47
C.F.R. S 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
(Wireline Comp. Bur. 2003) ("Contribution payments are due on the date
shown on the administrator invoice.").
See 47 C.F.R. S 64.1195(a).
See Letter from Hugh L. Boyle, Chief Auditor, Investigations and Hearings
Division, Enforcement Bureau, FCC, to Telecom Management, Inc., dated
March 30, 2004 (requesting confirmation that TMI had filed registration
information pursuant to section 64.1195(a) of the Commission's rules);
Letter from Hugh L. Boyle, Chief Auditor, Investigations and Hearings
Division, Enforcement Bureau, FCC, to Telecom Management, Inc., dated June
18, 2004 (again requesting confirmation that TMI had filed registration
information pursuant to section 64.1195(a) of the Commission's rules)
(together "Audit Letters").
Letter from Hillary S. DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, FCC, to Sue Bouchard, Telecom Management
Inc., dated November 18, 2004.
See TMI December 20, 2004 Letter.
Letter from Leon L. Nowalsky, Nowalsky, Bronston & Gothard, Counsel for
Telecom Management, Inc., to Hillary S. DeNigro, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, FCC, dated
January 17, 2005 ("TMI Supplemental Response").
TMI filed its registration on April 15, 2004 and a 499-Q due August 1,
2004. TMI then received its first bill from the Universal Service
Administrative Company ("USAC") in October 2004 and, in December 2004,
back-filed its 2002, 2003 and 2004 annual worksheets and its February 1
and May 1 quarterly worksheets.
Letter from Leon L. Nowalsky, Attorney for Telecom Management, Inc., to
William Davenport, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, dated August 24,
2005 ("TMI NAL Response").
47 U.S.C. S 503(b)(1)(B).
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, Inc., 16 FCC Rcd at 1362, P\0019.
See 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, P 4 (2002) ("SBC Forfeiture Order").
47 U.S.C. S 503(b)(2)(B); see also 47 C.F.R. S 1.80(b)(2). The Commission
recently amended its rules to increase the maximum penalties to account
for inflation since the last adjustment of the penalty rates. See
Amendment of Section 1.80(b) of the Commission's Rules and Adjustment of
Forfeiture Maxima to Reflect Inflation, Order, 19 FCC Rcd 10945 (2004).
47 U.S.C. S 503(b)(2)(D); 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, 17100, P 27 (1997), recon. denied, 15 FCC Rcd 303
(1999); 47 C.F.R. S 1.80(b).
47 U.S.C. S 254(d); 47 C.F.R. SS 54.706(a), 1.1154, 1.1157(b)(1).
TMI NAL, 20 FCC Rcd at 14155-58, PP 11-19.
See TMI NAL Response at 3.
See TMI NAL Response at 3.
See 47 U.S.C. S 217.
See, e.g., All American Telephone Inc., Order of Forfeiture, 16, FCC Rcd
16601, 16604 (2001) (noting that carrier is liable under section 217 for
forgeries by agent without carrier's knowledge).
47 U.S.C. S 312(f)(1); 47 U.S.C. S 503(b).
See Globcom, Inc., Notice of Apparent Liability for Forfeiture and Order,
18 FCC Rcd 19893, 19896 (2003) ("Globcom"); see also Globcom, Inc., Order
of Forfeiture, FCC 06-49 (rel. April 19, 2006).
See TMI NAL Response at 4.
See id. at 2-4.
Southern California Broadcasting, 6 FCC at 4388, P 5.
TMI NAL Response at 2.
See TMI NAL Response at 7.
See TMI NAL Response at 5-6.
See TMI NAL Response at 6.
See supra, PP 6-8.
TMI argues that the Commission used TMI's back filing and payment of past
due amounts, presumably something for which it should be given credit, to
"levy an upward adjustment." See TMI NAL Response at 5. This position
misinterprets the Commission's action. We estimated TMI's liability from
filed forms because that was the best evidence available at the time of
the outstanding overdue debt to USAC. If TMI had not made the filing, we
would have estimated the amount from the other financial information
produced during the investigation. See, e.g,, Carrera Communications,
Inc., 2005 WL 1750417 (F.C.C.) at P 27; Telectronics, Inc., 2005 WL
1750420 (F.C.C.) at P\00133; Communication Services Integrated, Inc., 2005
WL 2861527 (F.C.C) at P 27. The source of the estimate is not the cause of
the upward adjustment.
See TMI NAL, 20 FCC Rcd at 14157-58, PP 15-18.
See id., 20 FCC Rcd at 14157-58, PP 17-18.
See Letter from Leon L. Nowalsky, Attorney for Telecom Management, Inc.,
to William Davenport, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, dated January 30,
2006, 1 ("Supplemental NAL Response"); TMI NAL Response at 4.
See TMI NAL 20 FCC Rcd at 14158, P 18.
See TMI NAL Response, Exhibit B.
Letter from Universal Service Administrative Company, to Kevin Photiades,
Compliance Specialist, Telecom Management, Inc. d/b/a Pioneer Telephone,
dated December 30, 2005 ("USAC Letter").
TMI also argues that the successful appeal effectively removes the basis
for the $60,000 base forfeiture and the upward adjustment. See
Supplemental NAL Response at 1; USAC Letter. We reject this argument
because the successful appeal does not alter the fact that TMI failed to
pay USF fees during the months August, September, and October of 2004, the
period upon which the base forfeiture was premised, or the seriousness of
TMI's withholding substantial USF payments for over two years, on which
the upward adjustment was based.
See TMI NAL Response at 6-7.
See Forfeiture Policy Statement, 12 FCC Rcd 17087, 17106, P 43 (1997),
recon denied, 15 FCC Rcd 303 (1999) ("Forfeiture Policy Statement"); PJB
Communications of Virginia, Inc., 7 FCC Rcd 2088, 2089, P 8 (1992);
Independent Communications, Inc., 15 FCC Rcd 16060, 16060, P 2 (2000).
See Alpha Ambulance, Inc., 19 FCC Rcd at 2548 n. 15; Local Long Distance,
Inc., 15 FCC Rcd 24385 (2000), recon. denied, 16 FCC Rcd 10023 (2001);
Hoosier Broadcasting Corp., 14 FCC Rcd 3356 (CIB 1999), recon. denied, 15
FCC Rcd 8640 (Enf. Bur. 2002); PJB Communications of Virginia, 7 FCC Rcd
2088 (1992). In this case, the forfeiture represents a smaller percentage
of the violator's gross revenues than those issued in the Local Long
Distance, Inc. (7.9 percent), and Hoosier Broadcasting Corp. (7.6 percent)
47 C.F.R. S 1.1910.
47 U.S.C S 504(a).
See 47 C.F.R. S 1.1914.
(Continued from previous page)
Federal Communications Commission FCC 06-136
Federal Communications Commission FCC 06-136