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Federal Communications Commission
Washington, D.C. 20554
) File No. EB-09-SE-126
In the Matter of
) NAL/Acct. No. 201032100033
Alpheus Communications, LP
) FRN No. 0005004361
Notice of apparent Liability for forfeiture
Adopted: July 2, 2010 Released: July 6, 2010
By the Chief, Enforcement Bureau:
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
Alpheus Communications, LP ("Alpheus") apparently liable for
forfeiture in the amount of sixty thousand dollars ($60,000) for
willfully and repeatedly violating the network outage reporting
requirements set forth in Section 4.9(f) of the Commission's Rules
("Rules"). The noted apparent violations involve Alpheus's failure to
file with the Commission network outage reports for a significant
disruption in its network services within the time periods specified
in Section 4.9(f) of the Rules.
2. The Commission's authority to require the submission of network
outage reports derives from its responsibility, as set forth in the
Communications Act, "to make available, so far as possible to all of
the people of the United States ... a rapid, efficient, Nationwide,
and world-wide wire and radio communications service, with adequate
facilities ... for the purpose of the national defense, [and] for the
purpose of promoting safety of life and property through the use of
wire and radio communication." Section 4(o) of the Act states that
"[f]or the purpose of obtaining maximum effectiveness from the use of
radio and wire communications in connection with safety of life and
property, the Commission shall investigate and study all phases of
3. The Commission first imposed network outage reporting requirements on
wireline carriers in 1992. The Commission revised these rules in 2004
to require the filing of network outage reports by additional
communications providers, adopt a common metric for determining the
general outage-reporting threshold criteria that applies across all
communications platforms, establish specific outage-reporting
criteria that account for the unique technical aspects of each
communications platform, and require the electronic filing of outage
information. In revising the network outage reporting requirements,
the Commission sought to ensure that it had prompt access to accurate
information regarding the operation and security of crucial segments
of the national telecommunications infrastructure. The Commission
stated that such access would enable it to prevent disruptions in
service that could potentially threaten "homeland security, public
health and safety, as well as [our] economic well-being," and
facilitate alternative means of communicating, either through
different network routes or different communication facilities. In
this way, the Commission could meet its statutory obligation to
protect the public's access to secure communications, even "during
terrorist attacks, fires, natural disasters (such as hurricanes,
earthquakes, and tornadoes) and war."
4. Under Section 4.9(f) of the Rules, wireline service providers must
report to the Commission an outage of at least 30 minutes duration
that: (1) potentially affects at least 900,000 user minutes of either
telephony or paging; (2) affects at least 1,350 DS3 minutes; (3)
potentially affects any special offices and facilities; or (4)
potentially affects a 911 special facility. Upon discovery of such an
outage, wireline service providers must file an electronic
Notification within 120 minutes, an Initial Communications Outage
Report within 72 hours, and a Final Communications Outage Report
within 30 days.
5. Alpheus is a non-dominant wireline carrier that provides
telecommunications and data center services, and is therefore subject
to the network outage reporting rules. In 2009, the Public Safety and
Homeland Security Bureau referred Alpheus to the Enforcement Bureau
for investigation, because it appeared that Alpheus had failed to
file a Notification and an Initial Communications Outage Report for a
significant disruption in its network services within the time frames
specified in Section 4.9(f) of the Rules. The Enforcement Bureau
("Bureau") through the Spectrum Enforcement Division ("Division")
issued Alpheus a Letter of Inquiry ("LOI") on September 10, 2009,
directing it to provide certain information and documents regarding
its compliance with the network outage reporting requirements. The
Bureau received Alpheus's response to the LOI on October 9, 2009.
A. Alpheus Apparently Violated the Network Outage Reporting Requirements
6. Section 4.9(f) of the Rules requires Alpheus to submit to the
Commission an electronic Notification within 120 minutes after
discovering that it has experienced a network outage of at least 30
minutes duration that meets certain criteria on any facility that it
owns, operates, leases, or otherwise utilizes. Thereafter, Alpheus
must file an Initial Communications Outage Report with respect to the
outage within 72 hours after discovery of the outage, and a Final
Communications Outage Report within 30 days after discovery of the
outage. The Notification serves to inform the Commission that a major
event has occurred and assists the Commission in determining "whether
an immediate response is required (e.g., terrorist attack or systemic
failure) and whether patterns of outages are emerging (e.g., phased
terrorist attacks) that warrant further coordination or other
action." The Initial and Final Communications Outage Reports provide
the Commission with more detailed data necessary to analyze outages
in order to improve network reliability and security.
7. The record establishes that, within the past year, Alpheus failed to
timely file both an electronic Notification within 120 minutes and an
Initial Communications Outage Report within 72 hours of discovering a
reportable outage. Because our rules treat network outage reports as
confidential for national security and commercial and trade secret
reasons, we will not describe herein the details of this outage,
including the basis for determining that it is reportable, its
location, duration, or the number and type of customers affected.
That information is provided in an Appendix hereto that will remain
confidential. As set forth in detail in the confidential Appendix, we
conclude that Alpheus apparently willfully and repeatedly violated
Section 4.9(f) of the Rules by failing to file an electronic
Notification within 120 minutes and an Initial Communications Outage
Report within 72 hours of discovering a reportable outage.
B. Proposed Forfeiture
8. Under Section 503(b)(1)(B) of the Act and Section 1.80(a)(1) of the
Rules, 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. To impose
such a forfeiture penalty, the Commission must issue a notice of
apparent liability and the person against whom such 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 violated the Act or a Commission rule. We conclude under
this standard that Alpheus is apparently liable for forfeiture for
its apparent willful and repeated violations of Section 4.9(f) of the
9. Section 503(b)(2)(B) of the Act authorizes the Commission to assess a
common carrier a maximum forfeiture of $150,000 for each violation,
or each day of a continuing violation, up to a statutory maximum of
$1,500,000 for any single continuing violation. In determining the
appropriate forfeiture amount, Section 503(b)(2)(E) of the Act
directs the Commission to consider factors, such as "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
10. The Commission's Forfeiture Policy Statement and its implementing
rules establish $3,000 as the base forfeiture for failure to file
required forms and information. We believe, however, that a
substantial upward adjustment of the base forfeiture amount is
warranted. Reliable communication services are essential to the
operation of virtually all government, business and critical
infrastructure, as well as to the nation's economy, and the network
outage reporting rules were intended to help ensure the reliability
of our communications infrastructure. Indeed, the failure to file
timely and accurate network outage reports jeopardizes the ability of
the Commission to effectively monitor and respond to network outages
that potentially threaten homeland security.
11. Distinctions between the three required network outage reports merit
a two-tiered forfeiture approach. As noted above, the Notification
alerts the Commission to possible widespread problems, while the
Initial and Final Communications Outage Reports supplement the
notification and provide more detailed information on the outage.
Thus, failure to timely file the Notification has a more critical and
significantly higher impact on public safety than does failure to
timely file the Initial and Final Communications Outage Reports. In
light of the increased impact on public safety of a violation
involving the Notification (for the same outage), we adopt a
two-tiered forfeiture approach for late-filed reports. We set the
base forfeiture at $40,000 per late filing for failure to timely file
Notifications and at $20,000 per late filing for failure to timely
file Initial and Final Communications Outage Reports. Under the
general forfeiture authority contained in Section 503 of the Act and
the Commission's Forfeiture Policy Statement however, we retain the
discretion to depart from this approach and issue forfeitures on a
case by case basis, including appropriate upward and/or downward
adjustments, based on the particular circumstances of a case.
12. Alpheus filed the Notification more than 120 minutes after
discovering the outage and the Initial Communications Outage Report
more than 72 hours after discovery of the outage. Alpheus's failure
to timely file the Notification and the Initial Communications Outage
Report had a significant adverse impact on the Commission's ability
to ensure the availability of the nation's communications capability
and track possible threats to national security. Accordingly, we find
that each of Alpheus's failures to file constitutes a separate
violation that continued until the violation was cured. In light of
Alpheus's failure to timely file the Notification and the Initial
Communications Outage Report in this case, we find it apparently
liable for a base forfeiture in the amount of forty thousand dollars
($40,000) for the late Notification and twenty thousand dollars
($20,000) for the late Initial Communications Outage Report, for an
aggregate base forfeiture amount of sixty thousand dollars ($60,000).
13. As detailed in the attached confidential Appendix, the outage in this
case had a relatively limited impact in comparison to other network
outages. However, Alpheus did not correct its failure to file until
it was contacted by Commission staff. Accordingly, we find that no
downward adjustment of the base forfeiture is appropriate. We
therefore propose a total forfeiture of $60,000 for Alpheus's failure
to file a timely Notification and a timely Initial Communications
Outage Report for a reportable network outage in apparent willful and
repeated violation of Section 4.9(f) of the Rules.
IV. ORDERING CLAUSES
14. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the
Act, and Section 1.80 of the Rules, and the authority delegated by
Sections 0.111 and 0.311 of the Rules, Alpheus Communications, LP is
hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
amount of sixty thousand dollars ($60,000) for its willful and
repeated violations of Section 4.9(f) of the Rules.
15. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules,
within thirty (30) days of the release date of this Notice of
Apparent Liability for Forfeiture, Alpheus SHALL PAY the full amount
of the proposed forfeiture or SHALL FILE a written statement seeking
reduction or cancellation of the proposed forfeiture.
16. 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/Account Number and FRN
Number referenced above. Payment by check or money order may be
mailed to Federal Communications Commission, P.O. Box 979088, St.
Louis, MO 63197-9000. Payment by overnight mail may be sent to U.S.
Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention
Plaza, St. Louis, MO 63101. Payment by wire transfer may be made to
ABA Number 021030004, receiving bank TREAS/NYC, and account number
27000001. For payment by credit card, an FCC Form 159 (Remittance
Advice) must be submitted. When completing the FCC Form 159, enter
the NAL/Account number in block number 23A (call sign/other ID), and
enter the letters "FORF" in block number 24A (payment type code).
Requests for full payment under an installment plan should be sent
to: Chief Financial Officer - Financial Operations, 445 12th Street,
S.W., Room 1-A625, Washington, D.C. 20554. Please contact the
Financial Operations Group Help Desk at 1-877-480-3201 or Email:
ARINQUIRIES@fcc.gov with any questions regarding payment procedures.
Alpheus will also send electronic notification on the date said
payment is made to Kathryn Berthot at Kathy.Berthot@fcc.gov and to
Linda Nagel at Linda.Nagel@fcc.gov.
17. The written statement seeking reduction or cancellation of the
proposed forfeiture, if any, must include a detailed factual
statement supported by appropriate documentation and affidavits
pursuant to Sections 1.80(f)(3) and 1.16 of the Rules. The written
statement must be mailed to the Office of the Secretary, Federal
Communications Commission, 445 12th Street, S.W., Washington, D.C.
20554, ATTN: Enforcement Bureau - Spectrum Enforcement Division, and
must include the NAL/Acct. No. referenced in the caption. The
response should also be e-mailed to Kathryn Berthot at
Kathy.Berthot@fcc.gov and to Linda Nagel at Linda.Nagel@fcc.gov.
18. 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; 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.
19. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
Liability for Forfeiture shall be sent by first class mail and
certified mail return receipt requested to Stephen W. Crawford, Esq.,
General Counsel and Senior Vice President, Alpheus Communications,
LP, 1301 Fannin St., 20th Floor, Houston, TX 77002 and to counsel for
Alpheus, Joshua M. Bobeck, Esq., Bingham McCutchen LLP, 2020 K
Street, NW, Washington, DC 20006-1806.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau
47 C.F.R. S: 4.9(f).
Section 1 of the Communications Act of 1934, as amended ("Act"), 47 U.S.C.
47 U.S.C. S: 154(o).
See Notification by Common Carriers of Service Disruptions, Report and
Order, 7 FCC Rcd 2010 (1992); Memorandum Opinion and Order and Further
Notice of Proposed Rulemaking, 8 FCC Rcd 8517 (1993); Second Report and
Order, 9 FCC Rcd 3911 (1994); Order on Reconsideration of Second Report
and Order, 10 FCC Rcd 11764 (1995).
See 47 C.F.R. Part 4; see also New Part 4 of the Commission's Rules
Concerning Disruptions to Communications, Report and Order and Further
Notice of Proposed Rulemaking, 19 FCC Rcd 16830, 16833-34, 16882-94 P:P:
2, 97-126 (2004) ("2004 Network Outage Order") (extending the network
outage reporting requirements to paging and wireless, cable circuit-switch
telephony, and satellite communications providers).
2004 Network Outage Order, 19 FCC Rcd at 16834 n.5, 16861-62 P:P: 55-56.
Id. at 16876-16894 P:P: 82-126.
Id. at 16833-34, 16908-9 P:P: 2, 156-158.
Id. at 16833, 16835-36, 16910 P:P: 1, 11, 160.
Id. at 16910 P: 160.
Id. at 16835-36, 16910 P:P: 11, 160.
See 47 U.S.C. S:S: 151, 154(k) and (o).
2004 Network Outage Order, 19 FCC Rcd at 16837 P: 11. Noting that there
are many examples of the critical need for, and our dependence upon,
reliable communications service, the Commission offered one illustration -
our financial infrastructure - which largely consists of computers,
databases, and communications links. The Commission stated that:
If the communications links were severed, or severely degraded, ATM
machines would not be able to supply cash, credit card transactions would
not `go through,' banks would not be able to process financial
transactions (including checks), and the financial markets would become
dysfunctional. In a short time, economic activity would grind to a halt
and consumers' ability to purchase food, fuel or clothing would be
severely limited if not destroyed.
Id. at 16836-37 P: 11.
"User minutes" are defined as "assigned telephone number minutes ... for
telephony and for those paging networks in which each individual user is
assigned a telephone number" or "the mathematical result of multiplying
the duration of an outage, expressed in minutes, by the number of end
users potentially affected by the outage for all other forms of
communication." 47 C.F.R. S: 4.7(e).
"DS3 minutes" are defined as "the mathematical result of multiplying the
duration of an outage, expressed in minutes, by the number of previously
operating DS3 circuits that were affected by the outage." 47 C.F.R. S:
"Special offices and facilities" include major military installations, key
government facilities, nuclear power plants, and certain airports. 47
C.F.R. S: 4.5(b)-(d).
See 47 C.F.R. S: 4.5(e).
See 47 C.F.R. S: 4.9(f).
A "data center" is defined as a "centralized location where computing
resources critical to an organization are maintained in a highly
controlled environment." See Harry Newton, Newton's Telecom Dictionary,
228 (CMP Books, 17th ed., 2001).
47 C.F.R. S:S: 4.3(b), 4.9(f). See also Application for the Transfer of
Control of Alpheus Communications, L.P., and Alpheus Data Services, LLC,
WC Docket No. 07-246 (filed October 30, 2007).
Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, to Stephen W. Crawford, Esq., General Counsel and
Senior Vice President, Alpheus Communications, LP (September 10,
Letter from Joshua M. Bobeck, Esq., Counsel for Alpheus Communications,
LP, to Linda M. Nagel, Esq., Spectrum Enforcement Division, Enforcement
Bureau, Federal Communications Commission (October 9, 2009) ("LOI
47 C.F.R. S: 4.9(f). See also supra, P: 4.
2004 Network Outage Order, 19 FCC Rcd at 16868 P: 69.
See id. at 16834 P: 3, 16868 P:P: 73-75.
In the 2004 Network Outage Order, the Commission afforded confidential
treatment to network outage reports. 2004 Network Outage Report, 19 FCC
Rcd at 16853-55, P:P: 42-46. Section 4.2 of the Rules specifically states
that Part 4 outage reports "will be presumed to be confidential" and that
public access to outage reports may be sought only pursuant to the
procedures set forth in Section 0.461 of the Rules which addresses
requests for inspection of materials not routinely available for public
inspection. 47 C.F.R. S: 4.2; see also 47 C.F.R. 0.461. On March 30, 2009,
the Commission added a new Section 0.457(d)(1)(vii) of the Rules, 47
C.F.R. S: 0.457(d)(1)(vii), to further codify the confidential treatment
of network outage reporting. This new Section became effective on April
29, 2009. See 74 FR 14,078 (March 30, 2009).
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. 47 U.S.C. S: 312(f)(1). The legislative history of
Section 312(f)(1) of the Act clarifies that this definition applies to
both Sections 312 and 503(b) of the Act, H.R. Rep. No. 97-765, 97th Cong.
2d Sess. 51 (1982), and the Commission has so interpreted the terms in the
Section 503(b) context. See, e.g., Southern California Broadcasting Co.,
Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 P: 5 (1991), recon.
denied, Memorandum Opinion and Order, 7 FCC Rcd 3454 (1992) ("Southern
Section 312(f)(2) of the Act, which also applies to forfeitures assessed
pursuant to Section 503(b) of the Act, provides that "[t]he term
`repeated,' ... means the commission or omission of such act more than
once or, if such commission or omission is continuous, for more than one
day." 47 U.S.C. S: 312(f)(2). See Callais Cablevision, Inc., Notice of
Apparent Liability for Forfeiture, 16 FCC Rcd 1359, 1362 (2001); Southern
California, 6 FCC Rcd at 4388.
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).
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) (forfeiture paid).
47 U.S.C S: 503(b)(2)(B). The Commission has amended Section 1.80(b)(3) of
the Rules, 47 C.F.R. S: 1.80(b)(3), three times to increase the maximum
forfeiture amounts, in accordance with the inflation adjustment
requirements contained in the Debt Collection Improvement Act of 1996, 28
U.S.C. S: 2461. See Amendment of Section 1.80 of the Commission's Rules
and Adjustment of Forfeiture Maxima to Reflect Inflation, 23 FCC Rcd 9845,
9847 (2008) (adjusting the maximum statutory amounts for common carriers
from $130,000/$1,325,000 to $150,000/$1,500,000); Amendment of Section
1.80 of the Commission's Rules and Adjustment of Forfeiture Maxima to
Reflect Inflation, Order, 19 FCC Rcd 10945, 10947 (2004) (adjusting the
maximum statutory amounts for common carriers from $120,000/$1,200,000 to
$130,000/$1,300,000); Amendment of Section 1.80 of the Commission's Rules
and Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 15 FCC
Rcd 18221, 18223 (2000) (adjusting the maximum statutory amounts for
common carriers from $100,000/$1,000,000 to $120,000/$1,200,000). The most
recent inflation adjustment took effect September 2, 2008 and only applies
to violations that occur after that date. See 73 Fed. Reg. 44663-5.
Because Alpheus's apparent violations occurred after September 2, 2008, it
is subject to the new forfeiture limits.
47 U.S.C. S: 503(b)(2)(E). See also 47 C.F.R. S: 1.80(b)(4), Note to
paragraph (b)(4): Section II. Adjustment Criteria for Section 503
The 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, 17117, recon. denied, 15 FCC Rcd 303 (1999) ("Forfeiture
Policy Statement"); see also 47 C.F.R. S: 1.80(b)(4), Note to paragraph
(b)(4): Section I. Base Amounts for Section 503 Forfeitures.
We note that the Commission has upwardly adjusted the base forfeiture for
the failure to file Telecommunications Reporting Worksheets from $3,000 to
$50,000, because of the importance of the Worksheets to the Commission's
administration of the Universal Service Fund ("USF"), Telecommunications
Relay Services Fund ("TRS fund"), and other telecommunications regulatory
programs. See, e.g., InPhonic, Inc., Notice of Apparent Liability for
Forfeiture, 20 FCC Rcd 13277, 13286-67 (2005), forfeiture ordered, Order
of Forfeiture and Further Notice of Apparent Liability for Forfeiture, 22
FCC Rcd 8689 (2007) ("In Phonic"); Globcom, Inc. d/b/a Globcom Global
Communications, Notice of Apparent Liability for Forfeiture and Order, 18
FCC Rcd 19893, 19905 (2003), forfeiture ordered, 21 FCC Rcd 4710 (2006)
2004 Network Outage Order, 19 FCC Rcd at 16836 P: 11.
See supra paragraph 6.
See 47 U.S.C. S: 503(b)(2)(E).
See Forfeiture Policy Statement, 12 FCC Rcd at 17099 P: 22, 17101 P: 29.
See also 47 C.F.R. S:1.80(b)(4) ("The Commission and its staff may use
these guidelines in particular cases [, and] retain the discretion to
issue a higher or lower forfeiture than provided in the guidelines, to
issue no forfeiture at all, or to apply alternative or additional
sanctions as permitted by the statute.") (emphasis added).
See Telrite Corporation, Notice of Apparent Liability for Forfeiture and
Order, 23 FCC Rcd 7231, 7244-45 (2008) (determining that the failure to
file Telecommunications Reporting Worksheets was a continuing violation)
("Telrite"); Compass Global, Inc., Notice of Apparent Liability for
Forfeiture, 23 FCC Rcd 6125, 6138 (2008) (same) ("Compass Global"); VCI
Company, Notice of Apparent Liability for Forfeiture and Order, 22 FCC Rcd
15933, 15940 (2007) (determining that the failure to file Lifeline and
Linkup Worksheets was a continuing violation) ("VCI"); American Samoa
Telecommunications Authority, Notice of Apparent Liability for Forfeiture,
23 FCC Rcd 16432, 16437 (Enf. Bur., Spectrum Enf. Div. 2008), response
received ("ASTCA NAL").
See LOI Response, Exhibit 4.
Federal Communications Commission DA 10-1258
Federal Communications Commission DA 10-1258