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FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of )
) File No. EB-00-TS-032;
SouthEast Telephone, Inc. ) NAL/Acct. No. X3210-001
1. The Enforcement Bureau ("Bureau") of the Federal
Communications Commission ("Commission'' or ``FCC"), and
SouthEast Telephone, Inc. ("South?East"), hereby enter into this
voluntary Consent Decree resolving possible violations of Section
301 of the Communications Act of 1934, as amended, 47 U.S.C.
§ 301, and the Commission's policies and rules regarding the
operation of Broad?band Personal Communications Service ("PCS")
facilities (the ``Inquiry'').
2. For purposes of this Consent Decree the following
2.a. "Commission" or "FCC" means the Federal
2.b. "Bureau" means the FCC's Enforcement Bureau;
2.c. "SouthEast" means SouthEast Telephone, Inc., its
successors and assigns;
2.d. "Parties" means SouthEast and the Bureau;
2.e. "Adopting Order" means an Order of the Bureau
adopting the terms and conditions of this Consent Decree;
2.f. ``Act'' means the Communications Act of 1934, as
amended, 47 U.S.C. §§ 151 et seq;
2.g. ``Rules'' means the rules adopted by the
Commission pursuant to the Act;
2.h. ``NAL'' means the Notice of Apparent Liability
issued by the Bureau on February 22, 2000, DA 00-325,
holding SouthEast apparently liable for a forfeiture in the
amount of $100,000 for alleged violations of Section 301 of
the Act and Section 24.803 of the Rules.
3. The Parties agree that the provisions of this voluntary
Consent Decree shall be subject to final approval by the Bureau
by incorporation of such provisions by reference into an Adopting
Order of the Bureau.
4. The Parties agree that this Consent Decree shall become
effective on the date on which the Bureau releases the Adopting
Order. Upon release, the Adopting Order and this Consent Decree
shall have the same force and effect as any other Order of the
Commission, and any violation of the terms of this Consent Decree
shall constitute a violation of a Commission Order entitling the
Commission to exercise any and all rights and to seek any and all
remedies authorized by law for the enforcement of a Commission
5. SouthEast admits the jurisdiction of the Commission for
purposes of this Consent Decree and the Adopting Order.
6. SouthEast waives any rights that it may have to further
procedural steps and any rights it may have to seek judicial
review or otherwise challenge or contest the validity of the
Adopting Order or this Consent Decree.
7. SouthEast waives any rights it may have under any
provision of the Equal Access to Justice Act, 5 U.S.C. § 504.
Statement of Facts
8. SouthEast was the winning bidder for six C-Block PCS
licenses that the Commission auctioned in 1996. SouthEast timely
made its initial payments and was granted six licenses, for which
SouthEast immediately sought financing for construction.
9. In October 1998, SouthEast completed construction and
commenced operation of the one PCS station for which it was able
to secure financing, the B474C license in the Williamsburg, West
Virginia-Pikeville Kentucky Basic Trading Area (``Pikeville
10. On October 26, 1998, SouthEast filed an emergency
petition with the FCC seeking a temporary waiver of Section
1.2110(f)(4)(iii) of the Rules, which would allow SouthEast until
December 31, 1998, to make its first interest-only installment
payment on its six PCS licenses, which was otherwise due to be
paid to the Commission on October 29, 1998.
11. On October 29, 1998, the Commission denied SouthEast's
emergency waiver petition, which under the Rules caused
SouthEast's PCS licenses to cancel automatically and revert to
the Commission unless otherwise stayed. SouthEast expeditiously
sought administrative and judicial relief from the automatic
cancellation of its licenses, including timely filing a petition
for reconsideration and request for stay with the FCC. SouthEast
continued to operate its PCS station in the Pikeville BTA pending
the judicial and administrative appeals.
12. On November 12, 1998, the Wireless Telecommu?nications
Bureau announced that it would hold a re-auction of PCS spectrum,
ultimately scheduled to begin on March 23, 1999, that was to
include SouthEast's PCS licenses. On November 20, 1998,
SouthEast petitioned the D.C. Circuit to stay the planned re-
auction but was ultimately denied. On March 11, 1999, South?East
filed a petition requesting that the Commission stay the upcoming
auction or, in the alternative, withdraw SouthEast's contested
13. On April 2, 1999, the Commission denied SouthEast's
outstanding petition for reconsideration and request for stay of
the October 29, 1998 order, as well as SouthEast's request for
stay of the C-Block re-auction.
14. On April 14, 1999, SouthEast requested special
temporary authority ("STA") from the Commission for 180 days to
continue operating its PCS facilities in the Pikeville BTA.
15. On April 29, 1999, a staff member of the Wireless
Telecommunications Bureau spoke with SouthEast's counsel about
its STA application and requested additional information about
SouthEast's PCS operations. SouthEast responded to the Wireless
Bureau's inquiry regarding the STA application, at which time
South?East stated that it had commenced operation of its PCS
facilities in the Pikeville BTA in October of 1998, and as of
April 30, 1999, it was still operating and serving 137
16. On April 30, 1999, SouthEast filed a petition for
review of the Commission's April 2, 1999, Order with the D.C.
Circuit, which the court denied on November 24, 1999.
17. On September 29, 1999, the Wireless Bureau granted a
license for the Pikeville BTA to ComScape Communications, Inc.
(``ComScape''), the winning bidder for the license at the C-Block
re-auction. On October 8, 1999, ComScape filed an informal
complaint with the FCC citing SouthEast's continued operation of
PCS facilities in the Pikeville BTA.
18. On October 29, 1999, the Wireless Bureau asked
SouthEast to respond to ComScape's informal complaint. On
November 22, 1999, SouthEast responded, confirming its continued
operation of PCS facilities in the Pikeville BTA, but noting that
it had not marketed or publicized that service or otherwise
attempted to increase the customer base.
19. On February 22, 2000, the Wireless Bureau granted
SouthEast's STA request for the lesser of 180 days or 10 days
after ComScape notifies SouthEast that ComScape has commenced
operations in the Pikeville BTA. Also on February 22, 2000, the
Enforcement Bureau issued the NAL citing SouthEast for its
operation of PCS facilities in the Pikeville BTA between February
22, 1999 (the earliest date to which penalties could relate
back), and November 22, 1999.
Terms of Settlement
20. The Parties agree that this Consent Decree is for
settlement purposes only and that SouthEast does not admit any
alleged violation or liability for the specific acts described in
the NAL or in any informal or formal complaints received by the
Commission on or before the effective date of this Consent
21. SouthEast shall make a voluntary contribution to the
United States Treasury in the amount of forty thousand dollars
($40,000) as follows: twenty thousand dollars ($20,000) of the
contribution shall be paid within ten (10) days of the effective
date of the Adopting Order, and five (5) payments of four
thousand dollars ($4,000) each shall be made, respectively, sixty
(60), ninety (90), one hundred twenty (120), one hundred fifty
(150) and one hundred eighty (180) days after the effective date
of the Adopting Order. All contributions shall be made without
further protest or recourse, by certified check, cashier's check
or money order drawn to the order of the Federal Communications
Commission, and shall be mailed to the Federal Communications
Commission, P.O. Box 73482, Chicago, Illinois 60673-7482,
reflecting account number X3210-001.
22. SouthEast agrees that it will increase education and
training of all its employees with respect to compliance with the
Act and the Commission's Rules, as follows:
22.a. SouthEast shall implement a formal, comprehensive
compliance program (``Compliance Program'') for the
education of all officers, employees, contractors, and any
other persons or entities associated with SouthEast who have
or will have responsibilities for ensuring SouthEast's
compliance with the Act and the Rules. The purpose of the
Compliance Program shall be to ensure future compliance by
SouthEast with all applicable provisions of the Act, and the
FCC's Rules, regulations and policies, and prompt reporting
of violations thereof. SouthEast may at its own discretion
terminate the Compliance Program after the expiration of the
term of this Consent Decree;
22.b. SouthEast shall appoint a Compliance Program
Administrator (``Administrator'') who shall establish and
maintain a monitoring and evaluation program to oversee
mandatory participation in the Compliance Program prior to
the assumption of any FCC-related duties by SouthEast
personnel. The Administrator shall require written
certification from SouthEast personnel with FCC-related
responsibilities that each has read, understands and agrees
to abide by the terms of this Consent Decree and the
Compliance Program. The Administrator shall further
maintain auditable records and shall produce such records
within ten (10) calendar days upon written request of the
Commission or the Bureau; and
22.c. SouthEast agrees to provide a summary of relevant
portions of its revised training materials to the Bureau
reflecting implementation of the Compliance Program within
ninety (90) days of the effective date of the Adoption
23. SouthEast agrees that it shall notify the Chief,
Enforcement Bureau, Federal Communications Commission,
Washington, D.C. 20554, at least thirty (30) days prior to the
effective date of any material change in SouthEast's legal
status, or corporate structure that may materially affect its
obligations hereunder, including but not limited to, merger,
incorporation, dissolution, assignment, or any other changes that
may materially affect South?East's obligations under this Consent
Decree. Nothing in this Consent Decree shall be deemed to be an
obligation on SouthEast to disclose "material inside
informa?tion" as that term is defined in applicable securities
law and regulations.
24. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement of the Inquiry, and in
light of the covenants and representations contained in this
Consent Decree, and in express reliance thereon, and in order to
avoid litigation costs, the Bureau agrees to terminate same.
Such termination is without a finding by the Commission or the
Bureau of wrongdoing by SouthEast. The Bureau will not initiate
on its own motion any other enforcement action against SouthEast,
or seek on its own motion any administrative or other penalties
from SouthEast based on the allegations in the NAL. In addition,
in the absence of additional facts, the Bureau agrees that it
will not use the allegations and other circumstances set forth in
the NAL and involved in this proceeding against SouthEast with
respect to its basic qualifications to be a licensee in any
current or future proceeding.
25. The Parties agree that the terms and conditions of this
Consent Decree shall remain in effect for one year from the
effective date of the Adopting Order. The Par?ties also agree
that any provision of the Consent Decree, except for that
relating to the Consent Decree constituting a final settlement of
the Inquiry hereby disposed, which conflicts with any subsequent
rule or order adopted by the Commission, will be superseded by
such Commission rule or order.
26. If this Consent Decree is not signed by both parties,
is not adopted by the Bureau, or is otherwise rendered invalid by
any court of competent jurisdiction, it shall become null and
void and shall not become part of the record in these enforcement
proceedings, nor used in any fashion by any party in a legal
proceeding. The parties agree, however, that except as otherwise
ordered by any court of competent jurisdiction, the parties will
comply with this Consent Decree during the pendency of any
proceeding initiated by a third party seeking to nullify, void or
otherwise modify the Consent Decree or the Adopting Order.
27. The parties further agree that this Consent Decree
shall become effective on the date of the release of the Adopting
28. This Consent Decree may be signed in counterparts.
FOR THE ENFORCEMENT BUREAU, FOR SOUTHEAST
FEDERAL COMMUNICATIONS TELEPHONE, INC.
David H. Solomon Darrell Maynard
Chief, Enforcement Bureau President
Federal Communications Commission SouthEast Telephone, Inc.