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Statement of Commissioner Michael J. Copps
Statement of Commissioner Jonathan S. Adelstein
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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
File No. EB-06-IH-0853
Premio, Inc. )
NOTICE OF DEBARMENT
Adopted: December 13, 2006 Released: January 22, 2007
By the Commission: Commissioners Copps and Adelstein concurring and
issuing separate statements.
1. In this Notice, we debar Premio, Inc. ("Premio") from all activities
associated with the schools and libraries universal service support
mechanism ("E-Rate program"). Premio pled guilty to and was convicted
of two fraud-related felonies involving the E-Rate program. Based on
the evidence in the record, we find Premio's conduct egregious and
deny Premio's requests to reverse the suspension or halt the debarment
proceeding. In light of several important factors, however, we limit
the debarment period to one year from the effective date of this
Notice. These factors include Premio's cooperation with the U.S.
Department of Justice ("DOJ") investigation and prosecution of its
wrongdoing, explained in the record of the debarment proceeding; the
mitigating steps Premio has taken to remedy its past conduct and
prevent future problems with its participation in the E-Rate program;
and the fact that Premio states that it has voluntarily ceased to
participate in the E-Rate program for more than five years already. In
response to Premio's request, we also clarify that the debarment is
restricted to participation in the E-Rate program and not to Premio's
other activities, including the provision of equipment and services to
schools and libraries outside of the E-Rate program. Finally, as
discussed below, we also caution that in future debarment proceedings,
we may decline to limit the debarment period.
2. The E-Rate program is one of several federal programs designed to
promote and support the goal of universal service, i.e., making
telecommunications available to all Americans. Each of these programs
is funded by the Universal Service Fund ("USF"), which is administered
by the Universal Service Administrative Company ("USAC"). The
resources for the E-Rate program in particular are designed to fulfill
the principle expressed in section 254(b)(6) of the Communications Act
of 1934 that "[e]lementary and secondary schools and classrooms, . . .
and libraries should have access to advanced telecommunications
3. As part of an effort to protect the resources of the E-Rate program
from waste, fraud, and abuse, the Commission in 2003 adopted rules for
suspending and debarring persons convicted of, or held civilly liable
for, the commission or attempted commission of fraud and other similar
offenses connected with the E-Rate program. The purpose of suspension
and debarment is to prevent such persons from further participation in
the E-Rate program for a certain period of time, and thereby protect
4. Pursuant to our rules, the Commission "shall suspend and debar"
persons convicted of, or held civilly liable for, certain
fraud-related offenses involving the E-Rate program, "absent
extraordinary circumstances." Such offenses include the "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." Upon learning that a person has been convicted of or found
liable for one of these offenses, our rules contemplate that the
Commission will immediately suspend the person from the E-Rate
program, provide "prompt notice" to that effect, and initiate
debarment proceedings. Thereafter, our rules provide the suspended
person thirty days to contest suspension or the proposed debarment, or
seek to limit its scope, but state that relief from suspension "will
not ordinarily be granted." Once we have debarred a person, our rules
state that the person will be prohibited from involvement with the
E-Rate program for three years, although the rules contemplate that
the Commission might modify the period in particular circumstances.
5. Since the debarment rule became effective, there have been convictions
of eight individuals and four corporations related to their
participation in the E-Rate program. After each conviction following
the enactment of the rule, the Commission initiated debarment
proceedings against the perpetrators. The Commission has debarred the
eight individuals and two corporations, and today resolves the
debarment proceedings against two more corporations, Premio, Inc. in
this Notice and NextiraOne, LLC in a separate order.
6. Premio manufactures computers, software and peripheral equipment, and
sells them to wholesale, commercial, and government entities. On
February 22, 2006, Premio pled guilty to two felony offenses arising
out of its activities in the E-Rate program. One offense involved a
conspiracy in violation of the antitrust laws to suppress and
eliminate competition in the E-rate bidding process, and the other
involved mail fraud in seeking payment from USAC for ineligible
services. In connection with the antitrust violation, Premio admitted
that from late 1998 through late 1999, 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 in California by allocating contracts and submitting
fraudulent and non-competitive bids. In connection with the mail
fraud, Premio admitted that from late 1998 through late 2000, it
sought payment of more than $1.2 million in E-Rate funding in the
Highland Park School District in Michigan for ineligible video
conferencing equipment. For its misconduct, Premio agreed to pay
$400,000 in criminal fines, and has paid in full $1.3 million in civil
settlement that included full restitution to the USF. In addition,
Premio has been placed on probation for three years. Premio's
knowledge of and participation in these crimes was through the
activities of an employee acting at all times within the course and
scope of his employment, and for Premio's benefit.
7. On February 28, 2006, consistent with the Commission's debarment rule,
the Enforcement Bureau's Investigations and Hearings Division issued a
Notice of Suspension and Proposed Debarment to Premio, which
immediately suspended Premio from participating in the E-Rate program,
and initiated debarment proceedings. In response to the notice, Premio
submitted a Petition for Reversal of Suspension and Opposition to
Proposed Debarment ("Petition"), which seeks to overturn Premio's
suspension, and to avoid debarment. In the alternative, Premio
requests that we limit the period of debarment and clarify the scope
8. On July 13, 2006, the United States Department of Justice ("DOJ")
filed a letter explaining Premio's cooperation throughout the
government's investigation into Premio's E-Rate activities. In
addition, Premio filed two letters in the proceeding, on July 27 and
August 31, 2006, noting that it has not participated in the E-Rate
program since July 2001.
9. We reject Premio's argument that extraordinary circumstances exist
such that we shall reverse its suspension and terminate its debarment
proceeding. Specifically, Premio maintains that "extraordinary
circumstances" exist to justify reversal of suspension and avoidance
of debarment because of the following factors: (1) a single employee
committed the offenses at issue, and Premio has terminated that
employee; (2) Premio has cooperated and continues to cooperate with
governmental efforts to eliminate fraud, waste, and abuse in the
E-Rate program; (3) Premio has committed to establishing a
comprehensive compliance program to ensure future compliance with all
laws governing its operations, including E-Rate rules and regulations;
and (4) Premio has established business relationships with, and
extensive expertise in the provision of equipment and services to, the
schools and libraries that the E-Rate program is intended to support.
Premio contends that the debarment rule expressly is not intended to
be punitive, and application of the rule to Premio's case under these
facts would not serve the underlying purposes of the rule.
10. We do not find these circumstances are "extraordinary," pursuant to
our rules, and therefore they do not justify reversal of the
suspension or avoidance of debarment. Although a single employee
committed the crimes that form the basis for the debarment, the fact
remains that the E-Rate program was defrauded out of more than $1
million and that Premio admits in its criminal plea that the employee
was "acting at all times within the course and scope of his employment
with Premio, and for Premio's benefit." Rather than extraordinary, we
believe Premio's decision to terminate the employee under these
circumstances should be the ordinary course of events. We likewise
believe that Premio's cooperation with DOJ and establishment of a
compliance plan are among the remedies a company should undertake once
law enforcement has uncovered fraud within the enterprise. Indeed,
Premio is required to cooperate with DOJ and implement a compliance
plan as a result of its plea agreement with DOJ. Premio makes much of
the fact that the compliance plan includes provisions governing its
participation in the E-Rate program; Premio contends that the court
and the DOJ therefore did not contemplate that it would be debarred,
and that these provisions are sufficient to protect the program.
Premio overlooks, however, that the settlement agreement of which the
compliance plan is a part, expressly states that "any process or
proceeding, administrative or judicial, for any agency suspension or
debarment action" is excluded from the settlement terms. Moreover, in
the Special Terms of Probation, the court explicitly states that it is
not "in any way limiting the authority of any agency of the United
States to take any action permitted by law or regulation."
11. With respect to Premio's claim that debarring it will deprive E-Rate
beneficiaries from receiving "high-quality hardware and expert
support," we find no evidence that schools and libraries will be
unable to find other providers to fill any gap left by Premio's
debarment. Indeed, notwithstanding Premio's "longstanding
relationships with, and extensive expertise in providing equipment and
services to, the schools and libraries that the E-Rate program is
intended to support," we note that no school or library filed anything
in the record in support of Premio's Petition as expressly permitted
by our rules. In short, we find no "extraordinary circumstances" to
reverse the suspension the Enforcement Bureau imposed, or to avoid
debarment. Accordingly, we debar Premio.
12. Although Premio's actions do not constitute extraordinary
circumstances necessary to reverse suspension and avoid debarment, we
find several countervailing factors support limiting Premio's period
of debarment. In our recent debarment actions against NEC Network
Solutions, Inc. ("NEC") and Inter-Tel Technologies, Inc.
("Inter-Tel"), we relied on the following facts to reduce the
debarment period to six months for NEC and one year for Inter-Tel: (1)
DOJ submitted letters indicating that the corporations had cooperated
with the government during its investigation, and that such
cooperation was valuable in the detection and prosecution of E-Rate
fraud; (2) the corporations accepted full responsibility for their
actions by compensating the USF for their wrongdoing, and implemented
extensive remedial measures to protect the fund in the future; and (3)
the corporations had not participated in the E-Rate program for some
length of time already. These facts exist in this case as well and, as
discussed below, we limit Premio's debarment period to one year.
13. First, DOJ submitted a letter to the Commission documenting Premio's
cooperation with the investigation and prosecution of fraud and
collusion associated with certain E-Rate projects. DOJ explained that
Premio's plea was the third corporate plea in its investigation, and
that the company cooperated by supplying information and documents and
encouraging current or former employees to cooperate. DOJ stated that
"Premio's cooperation has enabled us to define the extent of criminal
behavior undertaken by its former employee as well as other defendants
currently awaiting trial in this matter. Consequently, we consider the
nature, speed, and extent of Premio's cooperation to have been very
helpful in developing our investigation to date." DOJ noted that
Premio would provide additional assistance in its investigation
because the Plea Agreement "require[d] Premio to cooperate with the
United States in investigating and prosecuting others involved in
criminal violations at E-Rate fund projects" on a going-forward basis.
14. Second, as DOJ pointed out in its letter, Premio also has accepted
full responsibility for its past actions and implemented remedial
measures to protect the universal service fund in the future. "Premio
has provided full reimbursement to the Universal Service Fund of
monies defrauded from the program by it and others it worked with at
certain projects." In addition, Premio has terminated the one employee
involved in the fraud that led to Premio's conviction, implemented a
code of conduct, and "established an intensive, multi-year program of
monitoring, training, and auditing of government procurement contracts
at the company's expense to ensure that there are no recurrences of
the behavior discussed in the Plea Agreement." More specifically, as
part of its agreement with the government, Premio was required to
adopt a Compliance Policy that: (1) created an internal structure
requiring high level management oversight of all public sector
business; (2) established an internal system of monitoring and audits,
including steps to be taken if any employee suspects that any company
conduct violates the compliance policy or applicable law; (3) educates
and trains employees about their obligations and applicable law; (4)
ensures that there are regular reports to the CEO and Board of
Directors. In addition, Premio was required to appoint an officer as a
Compliance Officer responsible for enforcement and oversight of the
Compliance Policy, among other duties. Moreover, as part of the
settlement terms with DOJ, Premio agreed that, if the company chose to
participate in the E-Rate program at any time during the three years
following the adoption of its settlement, its Compliance Officer must
serve as the central point of contact for certain functions relating
to E-Rate. Premio also agreed that for the three years following the
settlement, if the company submitted any bids or applications for
E-Rate funds, the Compliance Officer must take certain additional
steps to ensure that all employees associated with that activity are
properly educated and trained about program requirements. Of course,
as a result of our debarment decision today, Premio cannot participate
at all in the E-Rate program for one year, but these additional
protections are part of its agreement with DOJ, and will be triggered
if the company elects to participate after the Commission's debarment
period has ended.
15. Finally, in considering the debarment period, we note that Premio has
been out of the E-Rate program for several years already. Premio
claims it voluntarily stopped participating in the E-Rate program in
July 2001, and has not participated since that time. USAC records
confirmed that no payment has been made to Premio since July 1, 2001.
16. Under these circumstances, where DOJ has recognized and valued the
company's cooperation, the company has remedied fully its past conduct
and implemented remedial measures designed to protect the USF in the
future, and the company has not participated in the E-Rate program for
more than five years, we limit Premio's debarment period to one year.
This is the same debarment period we imposed in our recent Inter-Tel
17. We decline to reduce the debarment period to six months as we did in
the NEC Debarment Order. As we explained in prior debarment decisions,
DOJ gave special weight to NEC's cooperation as the first cooperator
in an antitrust conspiracy, which led to the discovery of additional
misconduct that might not have been detected absent NEC's cooperation.
We believe that the facts surrounding Premio's case do not warrant a
similar reduction in debarment period.
18. As part of our decision to limit the debarment periods of NEC and
Inter-Tel, we imposed additional precautionary measures to protect the
E-Rate program. Premio states that it is currently not participating
in the E-Rate program. In the event that Premio re-enters the E-Rate
program after its debarment period, but within three-years after the
adoption of its agreement with DOJ (i.e., during the three years in
which certain additional protections to its participation in the
E-Rate program as a result of the DOJ settlement), we impose those
same additional precautionary measures to protect the program. First,
we order USAC to review with heightened scrutiny Premio's applications
submitted during each of the first two funding years after re-entry.
Second, we order USAC to conduct automatic annual audits regarding
Premio's compliance with applicable laws and Commission rules
governing the E-Rate program, for each of the first two funding
periods upon Premio's re-entry.
19. Finally, we grant Premio's request to clarify the scope of any
debarment. Premio explains that while it is not currently
participating in the E-Rate program, its clients do currently "include
schools and libraries throughout the United States, some of which
otherwise receive discounted goods and services through the E-Rate
program, and entities that provide equipment or services independent
of Premio to schools and libraries through the E-Rate program." Hence,
Premio seeks clarification that debarment "does not suggest or imply
that Premio is in any way prohibited from selling equipment and
services to schools and libraries, or to other third party vendors,
that participate in the E-Rate program, so long as payment for such
equipment and service does not come from E-Rate funds." Provided that
Premio does not engage in activities associated with or related to the
E-Rate Program, including the receipt of funds or discounted services
through the E-Rate program, or consulting with, assisting or advising
applicants or service providers regarding the E-Rate program during
the debarment period, Premio's request is consistent with our rules.
We therefore clarify that Premio's debarment applies only to the
E-rate program, such that nothing in this Notice affects Premio's
ability to sell products and services to schools, libraries, or other
vendors outside of the E-Rate program.
20. We also strongly caution that future debarment proceedings may not
result in similar limitations of the debarment period. This debarment
action stems from Department of Justice investigations of fraudulent
activities by E-rate participants for conduct occurring between 1998
and 2002. In this proceeding, as well as in the NEC and Inter-Tel
Debarment Orders, we relied on multiple mitigating factors in deciding
to limit the respective debarment periods. In the case at hand, we
find it especially compelling that Premio has voluntarily ceased to
participate in the E-Rate program, and has not participated in the
program since 2001. Moreover, we emphasize that the similarities
between the facts in the instant proceeding and the NEC and Inter-Tel
debarment proceedings dictate that we debar the companies for
substantially the same period of time. These similarities include the
facts that all three carriers were involved in similar criminal
violations over a similar period of time; they all used the same
E-rate consulting service; and their acts of fraud affected many of
the same school districts. In future debarment matters, however, we
may impose stricter debarment sanctions in order to deter waste, fraud
and abuse and protect the integrity of the E-rate program.
21. Based on the foregoing and to protect the integrity of the E-Rate
program, including the investments made by American consumers to
benefit this nation's deserving school children, Premio, Inc.,
including its successors and assigns, is hereby debarred from the
E-Rate program for one year, effective upon the earlier of receipt of
this Notice or its publication in the Federal Register. During the
period in which Premio will serve its debarment, Premio, including its
successors and assigns, is prohibited from all activities "associated
with or related to the schools and libraries support mechanism," or
E-Rate program, including "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
the schools and libraries support mechanism." We will continue to take
appropriate actions in future cases as warranted by the particular
circumstances to protect the integrity of the program including, as
discussed above, declining to limit debarment periods where the facts
or circumstance do not clearly warrant such a limitation.
V. ORDERING CLAUSES
22. Accordingly, IT IS ORDERED, pursuant to section 54.521 of the
Commission's rules, 47 C.F.R. S 54.521, that Premio, Inc., including
its successors and assigns, IS DEBARRED from the schools and libraries
universal service support mechanism for one year, effective upon the
earlier of receipt of this Notice of Debarment or publication in the
23. IT IS FURTHER ORDERED that, in the event Premio, Inc. re-enters the
E-Rate program during its three-year probation period, USAC shall
review with heightened scrutiny Premio's applications submitted during
the first two funding years upon its re-entry into the E-Rate program.
24. IT IS FURTHER ORDERED that, in the event Premio, Inc. re-enters the
E-Rate program during its three-year probation period, USAC shall
conduct automatic annual audits on Premio's E-Rate activities during
each of the first two funding years upon its re-entry into the E-Rate
25. IT IS FURTHER ORDERED that the Enforcement Bureau staff shall send, by
certified mail/return receipt requested, a copy of this Notice of
Debarment to W. Kenneth Ferree, Sheppard, Mullin, Richter & Hampton,
LLP, 1300 I Street NW, 11^th Floor East, Washington, DC 20005.
26. IT IS FURTHER ORDERED, pursuant to section 54.521 of the Commission's
rules, 47 C.F.R. S 54.521, that this Notice SHALL BE PUBLISHED in the
FEDERAL COMMUNICATIONS COMMISSION
CONCURRING STATEMENT OF
COMMISSIONER MICHAEL J. COPPS
Re: Premio, Inc., File No. EB-06-IH-0853
The E-Rate program is an essential part of our national effort to ensure
that all Americans can benefit from the information superhighway in the
Digital Age. This is particularly true for those living in economically
disadvantaged areas who otherwise would be left on the wrong side of the
Digital Divide were it not for the success of the E-Rate program. There
are many dedicated people in the Schools and Libraries Division, at the
FCC and Justice Department, and elsewhere who are deserving of our praise
for bringing the Internet to our schools and libraries and for ensuring
that waste, fraud and abuse are removed from the program. Premio, Inc.'s
conviction and today's 1-year debarment from the program are further
evidence of their efforts. While there were mitigating circumstances in
this case, I believe that activities of the kind that the company engaged
in may very well merit a longer debarment period given the importance of
the E-Rate program and the severity of the company's actions. I therefore
concur in this Order.
SEPARATE STATEMENT OF
COMMISSIONER JONATHAN S. ADELSTEIN
Re: Premio, Inc, File No. EB-06-IH-0853
Since its inception, the universal service support mechanism for schools
and libraries (commonly referred to as the E-rate program) has opened up a
new world of learning and opportunity for millions of school children and
library patrons. To ensure the continued success of the E-Rate program, we
must remain committed to monitoring, auditing, reviewing and reinforcing
the program. A critical part of our Commission oversight is the use of
debarment, which prohibits bad actors from participating in the program.
Accordingly, I support our decision in this Order to debar Premio from all
involvement in the E-Rate program.
I concur in, rather than approve, this Order because I would have
supported a longer debarment period. The Commission's rules provide for a
debarment period of three years, which may be extended to protect the
public interest or reduced upon a finding of extraordinary circumstances.
I note that the Department of Justice has encouraged the Commission to
exercise our debarment policy in a way that encourages early and complete
cooperation from defendants, and I recognize that the Commission may take
into account payment of fines and restitution, the length of time that a
provider has not participated, and most importantly a high degree of
cooperation with law enforcement. Even weighing these factors, the
one-year debarment period adopted in this Order falls short, given the
scope and seriousness of the fraud-related activities in this case.
Schools do not have unlimited resources, and I am concerned about the
effect that fraudulent activity like that perpetrated by Premio can have
for the affected school systems and their students. In this case, a longer
debarment period would have sent a stronger and clearer message that fraud
will not be tolerated.
See 47 C.F.R. S 54.521.
47 U.S.C. S 254(b)(6).
47 C.F.R. S 54.521; Schools and Libraries Universal Service Support
Mechanism, Second Report and Order and Further Notice of Proposed
Rulemaking, 18 FCC Rcd 9202 (2003) ("Second Report and Order").
Second Report and Order, 18 FCC Rcd at 9225, P 66.
47 C.F.R. S 54.521(b). The rule defines a "person" as any individual,
group of individuals, corporation, partnership, association, unit of
government or legal entity, however organized. 47 C.F.R. S 54.521(a)(6).
Opting for a stringent debarment rule, the Commission explicitly rejected
a government-wide standard providing that an entity "may" be debarred
based on a conviction or civil judgment. See Second Report and Order, 18
FCC Rcd at 9227, P 74.
47 C.F.R. S 54.521(c).
47 C.F.R. S 54.521(e).
47 C.F.R. S 54.521(e)(4).
47 C.F.R. S 54.521(g) (lengthen or extend the period "if necessary to
protect the public interest"); 47 C.F.R. S 54.521(f) (reverse or limit the
period of suspension or debarment "upon a finding of extraordinary
Letter from Maureen F. Del Duca, Chief, Investigations and Hearings
Division, Enforcement Bureau, to Oscar Alvarez, Connect2 Internet Network,
Inc., DA 03-2706, Notice of Debarment, December 23, 2003; Letter from
Maureen F. Del Duca, Chief, Investigations and Hearings Division,
Enforcement Bureau, to John Angelides, Connect2 Internet Network, Inc., DA
03-4088, Notice of Debarment, December 23, 2003; Letter from Maureen F.
Del Duca, Chief, Investigations and Hearings Division, Enforcement Bureau,
to Duane Maynard, Howe Electric, Inc., DA 03-4089, Notice of Debarment,
December 23, 2003; Letter from William H. Davenport, Chief, Investigations
and Hearings Division, Enforcement Bureau, to John Dotson, DA 04-3828,
Notice of Debarment, December 6, 2004; Letter from William H. Davenport,
Chief, Investigations and Hearings Division, Enforcement Bureau, to John
Henry Weaver, DA 05-1727, Notice of Debarment, June 23, 2005; Letter from
William H. Davenport, Chief, Investigations and Hearings Division,
Enforcement Bureau, to Haider Bokhari, DA 05-1730, Notice Debarment, June
23, 2005; Letter from William H. Davenport, Chief, Investigations and
Hearings Division, Enforcement Bureau, to Qasim Bokhari, DA 05-1728,
Notice of Debarment, June 23, 2005; Letter from William H. Davenport,
Chief, Investigations and Hearings Division, Enforcement Bureau, to Ronald
R. Morrett, DA 05-2349, Notice of Debarment, August 30, 2005.
See NEC-Business Network Solutions, Inc., Notice of Debarment and Order
Denying Waiver Petition, 21 FCC Rcd. 7491 (2006) ("NEC Debarment Order");
Inter-Tel Technologies, Inc., Notice of Debarment, 21 FCC Rcd. 7506 (2006)
("Inter-Tel Debarment Notice").
See Letter from William H. Davenport, Chief, Investigations and Hearings
Division, Enforcement Bureau, to Tom Tsao, Vice President, Premio Inc., DA
06-489, Notice of Suspension and of Proposed Debarment, February 28, 2006
("Premio Suspension Notice"), 71 Fed. Reg. 14527-29 (Mar. 22, 2006). Our
rules contemplate that notice of debarment will be provided within 90 days
of receipt of information submitted by the respondent in response to a
suspension notice. 47 C.F.R. S 54.521(e)(5). Premio filed its Petition on
March 27, 2006; 90 days thereafter was June 27, 2006. We may waive our own
rules pursuant to 47 C.F.R. S 1.13 in the public interest. To allow the
Commission to have a full opportunity to analyze this matter, we hereby
waive the 90 day rule as it applies to Premio, Inc.'s responsive pleading,
filed March 27, 2006.
NextiraOne, LLC, Notice of Debarment and Order Denying Waiver Petition,
FCC 06-126 (rel. Jan. 22, 2007).
See Letter from W. Kenneth Ferree, Esq. and Erin L. Dozier, Esq., Sheppard
Mullin Richter & Hampton LLP, outside counsel for Premio, Inc., to Diana
Lee, Esq. , Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission, dated March 27, 2006, attaching
Petition for Reversal of Suspension and Opposition to Proposed Debarment
at 2 ("Petition").
U.S. v. Premio, Inc., Docket No. CR-06-0086 CRB, Plea Agreement, 5-7
(N.D.Cal. filed February 22, 2006 and entered February 24, 2004) ("Premio
Plea Agreement"); United States v. Premio, Inc., Criminal Docket No.
CR-06-0086 CRB, Judgment (N.D.Cal. filed Feb. 22, 2006 and entered Feb.
23, 2006) ("Premio Judgment").
15 U.S.C. S 1, 18 U.S.C. SS 1341-1342. See Premio Judgment at 1.
Premio Plea Agreement at 4-5.
Premio Plea Agreement at 6.
Premio Plea Agreement at 10.
Premio Plea Agreement at 10; Id. at Exhibit B (requiring the
implementation of a comprehensive Anti-Fraud and Antitrust Compliance
Program for the three-year term of probation) ("Special Terms of
Premio Plea Agreement at 4, 5.
See Premio Suspension Notice; 71 Fed. Reg. 14527-29 (March 22, 2006).
See generally Petition.
See Petition at 12-13.
Letter from Scott M. Watson, Chief, Great Lakes office, Antitrust
Division, Department Of Justice, to Marlene H. Dortch, Secretary, Federal
Communications Commission (filed July 13, 2006) ("DOJ Letter"). The Plea
Agreement obligates DOJ to make any administrative agency considering
administrative action against Premio aware of Premio's cooperation upon
request. Premio requested DOJ to provide this information in July 2006.
Letter from W. Kenneth Ferree, Sheppard Mullin Richter & Hampton LLP,
counsel for Premio, Inc., to Trent Harkrader, Eric Bash, and Diana Lee,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, dated July 26, 2006 ("July 26^th Supplemental
Letter"); Letter from W. Kenneth Ferree, Sheppard Mullin Richter and
Hampton, LLP, counsel for Premio, Inc. to Trent Harkrader, Eric Bash, and
Diana Lee, Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission, dated August 31, 2006 ("August 31^st
See Petition at 5.
Premio Plea Agreement at 4, 5.
See id. at 11-13.
See Petition at 7-8, 11-12.
Id., Attachment A ("Premio Settlement Agreement") at 6.
Special Terms of Probation at 2.
Petition at 11.
47 C.F.R. SS 54.521(e)(3)-(e)(4).
See DOJ Letter at 1.
Id. at 2.
Id. at 2.
Special Terms of Probation at P 1.
Id. at PP 2-13.
Id. at P 2(e))
Id. at P 10.
Supplemental Letter at 2. To the extent that any E-Rate applications
involving Premio were filed since July 2001, and remain pending at USAC,
Premio has stated that it "disclaims any interest in, and it relinquishes
any claim for reimbursement on, any such applications." See August 31^st
NEC Debarment Order at PP 19-20; Inter-Tel Debarment Notice at P 28.
See Petition at 12.
Petition at 8-10.
Id. at 12.
These investigations examined the practices of NEC, Inter-Tel, Premio and
NextiraOne and resulted in proceedings before the Commission. See supra
notes 11 & 13.
See supra at para. 1.
See 47 C.F.R. S 54.521(e)(5).
See 47 C.F.R. SS 54.521(a)(1), 54.521(a)(5), 54.521(d).
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Federal Communications Commission FCC 06-177
Federal Communications Commission FCC 06-177