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Federal Communications Commission
Washington, D.C. 20554
File No. EB-07-TC-4008
In the Matter of )
File No. EB-07-TC-2806
Hands On Video Relay Services, Inc., )
File No. EB-09-TC-238
Go America, Inc. and )
Account. No. 201032170006
Purple Communications, Inc. )
The Enforcement Bureau of the Federal Communications Commission and Purple
Communications, Inc., the successor in interest to Hands On Video Relay
Services, Inc. and Go America, Inc., by their authorized representatives,
hereby enter into this Consent Decree for the purpose of terminating the
Bureau's Investigations into whether certain of the Company's programs
directed at users of Telecommunications Relay Services ("TRS") were in
compliance with Section 225 of the Communications Act of 1934, as amended,
and Commission rules 64.601 et seq.
1. For the purposes of this Consent Decree, the following definitions
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C. S:
151 et seq.
b. "Adopting Order" means an Order of the Bureau adopting the terms of
this Consent Decree without change, addition, deletion, or
c. "Bureau" means the Enforcement Bureau of the Federal Communications
d. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
e. "Compliance Plan" means the program described in this Consent Decree
at Section III, paragraph 9.
f. "Demands for Payment" means all of the demands made on the Company by
the Commission in connection with the subject matter of the
Investigations, including the demands made on February 19, 2010 and
February 25, 2010.
g. "Effective Date" means the date on which Purple executes the Note or
the Bureau releases the Adopting Order, whichever is later.
h. "FCC Claim" means the amount of required refunds identified by the
Commission in the Demands for Payment.
i. "February 25, 2010 Declaratory Ruling" means the Declaratory Ruling by
the FCC's Consumer and Governmental Affairs Bureau, released on
February 25, 2010, CG Docket No. 10-51.
j. "Investigations" means the inquiries undertaken by the Enforcement
Bureau regarding the Company's compliance with Section 225 of the Act,
47 U.S.C. S: 225, and Section 64.604 of the Rules, 47 C.F.R. S:
64.604, in File No. EB-07-TC-2806, File No. EB-07-TC-4008, and File
k. "NECA" means National Exchange Carrier Association, Inc.
l. "Note" means the Deferred Payment Plan Promissory Note, executed by
Purple on September 16, 2010, in which the Company agrees to pay the
FCC Claim over a five-year period.
m. "Parties" means Purple and the Bureau, each of which is a "Party."
n. "Purple" means Purple Communications, Inc., Hands On Video Relay
Services, Inc. ("HOVRS"), and Go America, Inc. ("Go America"), and
their predecessors-in-interest and successors-in-interest. (Purple,
HOVRS, and Go America are also herein referred to collectively as the
o. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
p. "Standstill Agreement" means the agreement entered into on March 8,
2010, by and among the Commission, Purple, Churchill Financial LLC,
Ableco Finance LLC, and Clearlake Capital, L.P.
q. "TRS Fund" means the Telecommunications Relay Services Fund. See
Section 64.604(c)(5)(iii) of the Rules, 47 C.F.R. S:
r. "TRS Fund administrator" means the entity selected by the Commission
to administer the TRS Fund. See Section 64.604(c)(5)(iii) of the
Rules, 47 C.F.R. S: 64.604(c)(5)(iii).
2. The FCC commenced the Investigations into the Company in 2007. The FCC
and the Company have entered into several tolling agreements
(collectively, the "Tolling Agreement") to extend the statute of
limitations for taking enforcement action for the potential violations
of the Act, Rules, Commission orders, and policies under investigation
and to enable the Parties to engage in negotiations regarding a
potential resolution of the Investigations through a consent decree.
The Investigations include:
(a) File No. EB-07-TC-2806: On May 7, 2007, the Bureau issued a Letter of
Inquiry ("LOI") concerning GoAmerica's marketing and outreach efforts. On
February 4, 2009, the Company received another LOI in File No.
EB-07-TC-2806 addressed to Go America concerning a marketing program
called the "Road Trip."
(b) File No. EB-07-TC-4008: On August 6, 2007, the Bureau issued a
subpoena in File No. EB-07-TC-4008 initiating an investigation into the
legal structure of HOVRS, its eligibility to receive payments from the TRS
Fund, and HOVRS programs designed to attract new customers or increase the
number of Video Relay Service ("VRS") calls made by existing HOVRS
customers. The Company received a second subpoena dated January 30, 2008,
inquiring into specific programs that may have violated FCC Rules, orders,
and policies, which also related to File No. EB-07-TC-4008. The second
subpoena included requests regarding certain HOVRS marketing programs
(including gift cards and educational programs), contractual arrangements,
and cost submissions.
(c) File No. EB-09-TC-238: On April 1, 2009, the Bureau issued a subpoena
and LOI in File No. EB-09-TC-238 to Purple investigating international
calls and programs designed to attract new customers or increase the
number of VRS calls made by existing Purple customers (including marketing
programs, third-party outreach, conference calls, surveys, contact with
new customers, technical support, button programs, and customer
3. The FCC issued two Demands for Payment concerning matters related to
the Investigations. Additionally, the Company and the FCC entered into
a Standstill Agreement on March 8, 2010. The details of the FCC's
Demands for Payment and the Standstill Agreement are as follows:
(a) February 19, 2010 Demand for Payment: On February 19, 2010, the
Commission issued to the Company a demand for payment of $1,740,406.26. In
its February 19, 2010, correspondence, the Commission explained that
certain claimed monthly TRS minutes of use were either unsubstantiated or
ineligible for payment by the TRS Fund, and that Purple had received
erroneous overpayments for VRS minutes associated with
international-to-international calls. The Commission stated that such
recoverable overpayments constituted a debt due and owing by Purple to the
(b) February 25, 2010 Demand for Payment: On February 25, 2010, the
Commission issued to the Company a second demand for payment of
$16,523,252.87. In its February 25, 2010, correspondence, the Commission
explained that certain claimed monthly TRS minutes of use were either
unsubstantiated or ineligible for payment by the TRS Fund, and that Purple
had received erroneous overpayments for VRS minutes associated with calls
made by or to its employees and subcontractors. The Commission stated that
such recoverable overpayments constituted a debt due and owing by Purple
to the Federal Government.
(c) March 8, 2010 Standstill Agreement: The Standstill Agreement noted
that the FCC had identified required refunds by the Company to the TRS
Fund. Interpreting the February 25, 2010 Declaratory Ruling as applying
retroactively, the Company acknowledged that the FCC Claim is a debt
amounting to $18,459,064, and determined not to challenge the FCC's
position. Purple and the Commission agreed to negotiate in good faith
during the 180-day period following the date of the Standstill Agreement
to reach a final and binding settlement concerning claims made by the
Commission in connection with the Demands for Payment and matters related
to the Investigations, including a plan for repayment of the full amount
of the FCC Claim that complies with the requirements of 47 C.F.R. S:
1.1914. Purple and the Commission also agreed that the statute of
limitations under 47 U.S.C. S: 503 would be tolled until thirty (30) days
after the expiration of the Standstill Period (as defined in the
Standstill Agreement) with respect to the subject matter of the
Investigations and the subject matter of the subpoenas and LOIs issued
4. Purple and the FCC agree that this Consent Decree constitutes a
settlement of the Investigations and the Demands for Payment. However,
the Parties further agree that this Consent Decree does not constitute
either an adjudication on the merits or a factual or legal finding or
determination regarding any compliance or noncompliance with the FCC's
Rules and orders.
III. TERMS OF AGREEMENT
5. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau by
incorporation of such provisions by reference in the Adopting Order
without change, addition, modification, or deletion.
6. Jurisdiction. Purple agrees that the Commission has jurisdiction over
it and the matters contained in this Consent Decree and has the
authority to enter into and adopt this Consent Decree.
7. Effective Date; Violations. The Parties agree that this Consent
Decree shall become effective on the Effective Date as defined herein.
Upon the Effective Date, the Adopting Order and this Consent Decree
shall have the same force and effect as any other order of the
Commission. Any violation of the Adopting Order or of the terms of
this Consent Decree shall constitute a separate violation of a
Commission order, entitling the Commission to exercise any rights and
remedies attendant to the enforcement of a Commission order.
8. Termination of Investigations. In express reliance on the covenants
and representations in this Consent Decree and to avoid further
expenditure of public resources, the Bureau agrees to terminate the
Investigations. In consideration for the termination of the
Investigations, Purple agrees to the terms, conditions, and procedures
contained herein. The Bureau further agrees that in the absence of new
material evidence, the Bureau will not use the facts developed in the
Investigations through the Effective Date, or the existence of this
Consent Decree, to institute, on its own motion, any new proceeding,
formal or informal, or take any action on its own motion against
Purple concerning the matters that were the subject of the
Investigations or with respect to Purple's basic qualifications,
including its character qualifications, to be a Commission licensee or
hold Commission authorizations, provided, however, that the Bureau or
Commission may consider the facts in this proceeding in any future
proceeding involving violations by Purple of the same Rules and orders
at issue in this proceeding or involving misrepresentation by Purple
in its dealings with the Commission. The Bureau or the Commission
shall not claim, demand, or require, by setoff, recoupment or
otherwise, any further amounts or payments (including without
limitation for overpayments from the TRS Fund) or impose any monetary
penalties against Purple for alleged violations, in excess of the
amount set forth in the Note and the amount of the voluntary
contribution described in paragraph 18 below, relating to conduct
prior to March 8, 2010, that is within the subject matter of the
Investigations, or the subject matter of the subpoenas and LOIs issued
therein. The Bureau represents that, except for the Investigations, it
has no other enforcement investigation or inquiry underway against
Purple that involves the same subject matter as the Investigations.
9. Compliance Plan. Purple agrees that it has implemented or will
implement, within thirty (30) calendar days from the Effective Date, a
Compliance Plan to ensure Purple's future compliance with the Act, the
Rules, and orders governing TRS/VRS cost recovery. Purple shall
provide a copy of the Compliance Plan to the Chief, Telecommunications
Consumers Division, Enforcement Bureau, Federal Communications
Commission, 445 12th St., S.W., Washington, D.C. 20554, within thirty
(30) calendar days from the Effective Date, and within thirty (30)
calendar days of implementing any revised Compliance Plan while this
paragraph 9 is in effect. The Compliance Plan shall include, at a
minimum, all of the obligations set forth at Exhibit A. The provisions
of this paragraph 9 shall remain in effect for five (5) years from the
(a) Compliance Reports. The Company shall submit Compliance Reports to the
Commission twelve (12), twenty four (24), thirty six (36), forty eight
(48), and sixty (60) months after the Effective Date. Each Compliance
Report shall include a certification by the Company's Compliance Director,
or other equivalent Company Officer, stating that he or she has personal
knowledge that the Company: (1) has abided by the terms of the Compliance
Plan at all times since its implementation; and (2) is not aware of any
violations of the Act, Rules or FCC orders. If the Compliance Director or
other equivalent Company Officer is not able to so certify, he or she
shall explain fully the reason(s) therefor. All Compliance Reports shall
be directed to the Chief, Telecommunications Consumers Division,
Enforcement Bureau, Federal Communications Commission, 445 12th Street,
S.W., Washington, D.C. 20554. The certification must comply with Section
1.16 of the Rules, and be substantially in the form set forth therein.
(b) Self-Disclosure. The Company shall report any known (following an
internal review) violations of the Act, Rules or orders, within thirty
(30) calendar days of discovery to the Chief, Telecommunications Consumers
Division, Enforcement Bureau, Federal Communications Commission, 445 12th
Street, S.W., Washington, D.C. 20554. The Company shall likewise report
any known breach of the terms and conditions of this Consent Decree within
thirty (30) calendar days of discovery.
10. Waivers. Purple waives any and all rights it may have to seek
administrative or judicial reconsideration, review, appeal, or stay,
or to otherwise challenge or contest the validity of this Consent
Decree and the Adopting Order, provided the Bureau issues an order
adopting the Consent Decree without change, addition, modification, or
deletion. Purple shall retain the right to challenge Commission
interpretation of the Consent Decree or any terms contained herein. If
either Party (or the United States on behalf of the Commission) brings
a judicial action to enforce the terms of the Adopting Order or
Consent Decree, neither Purple nor the Commission shall contest the
validity of the Consent Decree or the Adopting Order, and Purple shall
waive any statutory right to a trial de novo. Purple hereby agrees to
waive any claims it may otherwise have under the Equal Access to
Justice Act, 5 U.S.C. S: 504 and 47 C.F.R. S: 1.1501 et seq., relating
to the matters addressed in this Consent Decree.
11. Subsequent Rule or Order. The Parties agree that if any provision of
this Consent Decree conflicts with any subsequent Rules or orders
adopted by the Commission (except an order specifically intended to
revise the terms of this Consent Decree to which Purple does not
expressly consent), this Consent Decree shall be amended in a manner
consistent with the future Rules or orders. The Parties further agree
that if, during the term of the Note, there is a
retrospectively-applied change in the law or regulations that formed
the basis of the Demands for Payment, the Consent Decree and the Note
shall be modified to accommodate and be consistent with such changes.
12. Successors and Assigns. Purple agrees that the provisions of this
Consent Decree shall be binding on its successors, assigns, and
13. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties.
14. Modifications. This Consent Decree cannot be modified or amended
without the advance written consent of both Parties.
15. Paragraph Headings. The headings of the paragraphs in this Consent
Decree are inserted for convenience only and are not intended to
affect the meaning or interpretation of this Consent Decree.
16. Authorized Representative. Each Party represents and warrants to the
other that it has full power and authority to enter into this Consent
17. Debt Payments by the Company. The Parties agree that the FCC Claim
will be satisfied in the following manner:
(a) Initial Payment by the Company. Pursuant to the Standstill
Agreement, Purple and the Commission agreed that one-half (50%) of the
amount determined by the TRS Fund administrator, NECA, to be due and
payable to the Company in connection with its 2009 costs for
implementation of ten-digit geographic numbering (the "Ten-Digit Costs")
would not be paid out to the Company, but instead would be retained by the
TRS Fund as an initial payment toward satisfaction of the FCC Claim. On
August 13, 2010, NECA notified the Company that it was still in the
process of reviewing Purple's reimbursement request, but that it had
identified $799,659.15 of expenses eligible for reimbursement.
Accordingly, one-half of that amount ($399,829.58) has been retained by
the TRS Fund and has been credited against the FCC Claim as set forth in
the schedule of installment payments provided in the Note. Consistent with
the Standstill Agreement, should the TRS Fund administrator approve
payment of any additional Ten-Digit Costs, one-half of such amounts will
be retained by the TRS Fund and credited against the Note as a prepayment.
(b) Subsequent Payments by the Company. As a result of good faith
negotiations to resolve issues arising out of the Investigations, Purple
agrees to satisfy the FCC Claim on the terms set forth in the Note.
However, the Parties recognize that changes in the reimbursement rates for
VRS services may affect Purple's ability to make installment payments on
the schedule agreed to in the Note. Should subsequent rate adjustments by
the Commission reduce the reimbursement rate for Purple's VRS service by
more than ten percent (10%) below the published rates for the 2010-2011
year, the Parties agree to negotiate to consider amending the subsequent
installment payments to reflect the rate adjustment. In agreeing whether
to revise the Note, the Parties agree to take into account not only the
amount of the rate adjustment, but also the overall impact that the rate
adjustment has on the Company's business and its ability to make payments
under the plan set forth in the Note.
18. Voluntary Contribution. Purple agrees to pay a voluntary contribution
to the U.S. Treasury of $550,000. One-third of the voluntary
contribution amount ($183,333.33) must be paid within two (2) years of
the Effective Date. The remaining two-thirds ($366,666.67) of the
voluntary contribution amount must be paid within thirty (30) calendar
days of satisfaction of the FCC Claim. The payments must be made by
check or similar instrument, payable to the order of the Federal
Communications Commission. The payments must include the Account
Number and FRN Number referenced in the caption of the Adopting Order.
Payment by check or money order may be mailed to the 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. Purple must
also send electronic notification on the date said payment is made to
the Chief, Telecommunications Consumers Division, Enforcement Bureau.
19. Severability and Invalidity. The Parties agree that if any of the
provisions of the Adopting Order or the Consent Decree shall be
invalid or unenforceable, such invalidity or unenforceability shall
not invalidate or render unenforceable the entire Adopting Order or
Consent Decree, but rather the entire Adopting Order or Consent Decree
shall be construed as if not containing the particular invalid or
unenforceable provision or provisions, and the rights and obligations
of the Parties shall be construed and enforced accordingly. In the
event that this Consent Decree in its entirety is rendered invalid by
any court of competent jurisdiction, it shall become null and void and
may not be used in any manner in any legal proceeding.
20. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when executed
and delivered, shall be an original, and all of which counterparts
together shall constitute one and the same fully executed instrument.
P. Michele Ellison
Chief, Enforcement Bureau
Federal Communications Commission
Chief Executive Officer
Purple Communications, Inc.
COMPLIANCE PLAN OBLIGATIONS
I. Scope. The compliance plan that Purple is required to implement
pursuant to the terms of the Consent Decree to which this Exhibit is
attached ("Compliance Plan") shall include, at a minimum, all of the
provisions set forth in this Exhibit.
II. Distribution of the Plan. A copy of the Compliance Plan shall be
provided to all Purple employees within ninety (90) calendar days of the
Effective Date, to new hires at the time they are hired, and to persons or
entities providing independent contractor services to the Company who are
directly involved in the provision or marketing of relay services at the
time the Company engages their services (collectively, "Employees"). Each
and every Employee shall certify that s/he has received and read the
Compliance Plan and that s/he will comply with the Compliance Plan in all
III. Compliance Director. Within seventy-five (75) calendar days of the
Effective Date, Purple will appoint a Compliance Director who will have
direct responsibility for implementation of the Compliance Plan. The
Compliance Director shall report to the General Counsel, the FCC
Regulatory Committee (see paragraph IV below), and ultimately, the Board
of Directors. The Compliance Director's specific responsibilities shall
include, among other things, issuing FCC regulatory compliance directives
and guidance, compliance training, coordination of compliance review,
evaluation of programs and activities, and follow-up regarding compliance
issues brought to his/her attention, and s/he shall have access to all
Company files and documentation that s/he deems necessary to fulfill this
responsibility. The Compliance Director shall monitor ongoing Company
activities and ensure that the Compliance Plan is properly distributed.
IV. Consultation with Compliance Director; Compliance Hotlines. Any
Employee shall be entitled to consult with the Compliance Director
concerning FCC regulatory compliance issues. The Company shall maintain a
hotline for anonymous comments, complaints, or suggestions and publicize
to all Employees the general hotline number and website address for the
FCC's Office of the Inspector General. The Company shall report any known
(following an internal review) violation of the Act, Rules, or FCC orders
within thirty (30) calendar days of discovery to the Chief,
Telecommunications Consumers Division, Enforcement Bureau, FCC, 445 12th
Street, S.W., Washington, D.C. 20554.
IV. FCC Regulatory Committee. Within sixty (60) calendar days of the
Effective Date, Purple shall create and maintain an FCC Regulatory
Committee of the Board of Directors. The Committee shall be charged with
the responsibility to oversee the Company's development, implementation,
and periodic updating of the Compliance Plan, and to oversee, direct and
make recommendations to the Board of Directors with regard to the
Company's regulatory and government initiatives. At least semi-annually,
the Compliance Director and General Counsel shall report to the FCC
Regulatory Committee on all pending or potential compliance issues and the
overall effectiveness of Company compliance policies, procedures,
personnel, and programs.
V. Mandatory Regulatory Training. Purple shall provide comprehensive
training programs for all Employees regarding FCC rules and regulations,
using programs tailored to the specific positions held by the Employees.
The goal of the training programs shall be to ensure that Employees have
an appropriate level of understanding regarding the obligations of TRS
providers and are thus able to effectively assist in implementing the
Compliance Plan and detect areas of potential compliance risk. Purple
shall provide such training for current Employees within one hundred
twenty (120) calendar days of the Effective Date, to all Employees hired
after the Effective Date within thirty (30) calendar days of their hiring,
and for all Employees at least once annually. As statutory and regulatory
obligations change, Purple shall revise its training materials and provide
training on those new obligations to its Employees within sixty (60)
calendar days after the regulatory changes take effect.
VI. Compliance and Legal Department Review Procedures. The Compliance
Director will be responsible for reviewing and approving new programs
expected to involve the generation of compensable minutes and for
periodically monitoring and auditing Purple's existing programs. The
functional departmental manager responsible for any such new programs
shall be required to initiate a review by the Compliance Director. The
Compliance Director will maintain a compliance manual that contains the
statutory and regulatory rules and requirements established or promulgated
by the FCC or the TRS Fund administrator.
VII. Certification of Minutes. Before Purple submits (or causes to be
submitted) to the TRS Fund administrator any report of TRS minutes for
payment, the Compliance Director shall review such submission to ensure
that it has been subject to the appropriate compliance considerations. The
Company shall maintain internal audit controls to ensure that any
submissions to the TRS Fund administrator are accurate. The Compliance
Director shall review those audit controls as well as such additional
information as is necessary to confirm that the Company's policies and
procedures have been followed, that all non-compensable minutes have been
withheld from the submission, and that the submission is true and accurate
and consistent with applicable Rules and FCC orders. The Compliance
Director shall thereafter provide a certification as to the internal
review and audit of minutes submitted to the TRS Fund administrator. If
non-compensable minutes are inadvertently submitted for compensation, the
Company shall make immediate remedial efforts, including the repayment of
money to the TRS Fund, or a reduced request for reimbursement to the TRS
Fund Administrator, equal to the amount of the incorrect submission. The
Company shall send written notification to the TRS Fund administrator and
the FCC's Consumer and Governmental Affairs Bureau and Enforcement Bureau
within fifteen (15) calendars days of verifying such overcompensation.
VIII. Additional Compliance Measures. Other compliance issues to be
addressed by the Compliance Plan shall include:
1. Acceptable Use Acknowledgement by Purple's Customers. Purple's core
device agreements for customers shall contain language regarding the
Company's acceptable use policy and the ability of Purple to deny
service if known violations of the policy exist. Companies seeking
Purple's assistance to improve access to TRS for their deaf,
hard-of-hearing, or speech impaired employees shall be required to
review and sign an agreement regarding basic relay use terms and
acknowledge: (1) the permitted uses of TRS; (2) that TRS is provided
on a non-exclusive basis; and (3) that there is no direct or indirect
financial arrangement between the company and Purple.
2. Internal Use Restrictions Applicable to TRS. The Company shall issue
10-digit numbers for business use to its deaf and hard-of-hearing
Employees ("Work Number"). When an Employee must access VRS for
business purposes, whether or not at the workplace, the Employee must
use the Work Number. When an Employee makes use of the Company's
services for non-business related calls while at the workplace, s/he
must use the Work Number and may not use an alternative 10-digit
number. The Company will segregate the Employees' use of relay through
these 10-digit numbers to ensure that Employee relay calls made in
connection with business activities are not submitted to the TRS Fund
administrator for compensation.
3. Calling Pattern Analysis. Purple shall review monthly minute
submissions to the TRS Fund administrator for anomalous calling
patterns potentially indicating misuse or abuse of the service. The
Company shall refer known (following an internal review) violations of
the Act, Rules or FCC orders identified through this process to the
FCC within thirty (30) calendar days of discovery, by notifying the
Chief, Telecommunications Consumers Division, Enforcement Bureau.
4. Compliance Support. Purple shall provide adequate resources to ensure
the Compliance Director can fulfill the duties enumerated in this
In 2007, the FCC began investigating GoAmerica and HOVRS. The companies
subsequently merged on January 10, 2008. GoAmerica officially changed its
name to Purple Communications, Inc. on February 12, 2009.
47 C.F.R. S: 1.16.
Federal Communications Commission DA 10-1734
Federal Communications Commission DA 09-XXX