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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554

In the Matter of                )  File No. EB-00-IH-0055
                                )
INTELLICALL OPERATOR SERVICES   )  NAL/Acct. No. X32080023

                                 
                      FORFEITURE ORDER

   Adopted: October 27, 2000            Released:   November 
1, 2000

By the Commission:

                      I.  INTRODUCTION

     1.   In this Forfeiture Order, we find that Intellicall 
Operator  Services  (``Intellicall'') has  violated  Section 
254(d) of  the Communications Act  of 1934, as  amended (the 
``Communications Act'' or the  ``Act''), 47 U.S.C.  254(d), 
and  Section 54.706  of  the Commission's  rules, 47  C.F.R. 
54.706,   by  willfully   failing  to   make  a   required 
contribution to  universal service support  programs.  Based 
on our  review of the  facts and circumstances in  this case 
and after  considering Intellicall's response to  our Notice 
of Apparent Liability (``NAL'') in this matter,1 we conclude 
that Intellicall is liable for a forfeiture in the amount of 
ninety-nine thousand dollars ($99,000).

                       II.  BACKGROUND

     2.   In  the NAL,  we briefly  described the  universal 
service program, including the mechanisms established by the 
Commission in  response to Congress' 1996  amendments to the 
Communications Act  creating the universal  service program.  
In particular, Section 254 of the Act requires that:

     Every  telecommunications  carrier  that  provides 
     interstate   telecommunications   services   shall 
     contribute, on an  equitable and nondiscriminatory 
     basis,   to   the   specific,   predictable,   and 
     sufficient    mechanisms   established    by   the 
     Commission  to  preserve   and  advance  universal 
     service.2
       
In implementing  Section 254, the Commission  authorized the 
Universal  Service  Administrative   Company  (``USAC'')  to 
administer  universal  service  support  mechanisms  and  to 
perform  billing and  collection functions.3  The Commission 
gave USAC  the authority to bill  carriers monthly, starting 
in February 1998, for their contributions.4 

     3.   Intellicall,   an  interstate   telecommunications 
service  provider,  does  not   dispute  its  liability  for 
universal service  contributions.  Since it  began receiving 
invoices,  Intellicall has  paid approximately  four million 
dollars in contributions, which  is a substantial portion of 
the amount  it owes for universal  service. Intellicall has, 
however, missed payments, underpaid its monthly invoices and 
failed  to cure  its arrearages.   As a  result, Intellicall 
owed over  $2 million  in universal  service payments  as of 
April 2000.

     4.   In February  2000, the  Enforcement Bureau  sent a 
letter to Intellicall explaining that  it was the subject of 
a  potential   enforcement  action.  5   In   its  response, 
Intellicall stated that it is in ``complete understanding of 
the  potential   enforcement  action  for  failure   to  pay 
outstanding   balances  due....''6   In  the   same  letter, 
Intellicall indicated that it  was committed to ``remedy the 
current situation.'' After it  received the Bureau's letter, 
Intellicall contacted USAC and presented USAC with a payment 
plan designed  to cure  its arrearage in  twenty-one months.  
Intellicall committed to  pay each month an  amount equal to 
its  then  current  monthly  obligation  and  an  additional 
$75,000 toward the amount it  is in arrears.  USAC's records 
reflect that Intellicall commenced  payments on this plan in 
April 2000. 
                      III.  DISCUSSION

     5.   In the NAL, we found Intellicall apparently liable 
for a  forfeiture of $198,000  based on its failure  to make 
required  universal  service  contributions in  January  and 
February, 2000.   In its  response, Intellicall  argues that 
there was  no violation  with respect  to the  February 2000 
invoice because it  paid that invoice.  With  respect to the 
January  2000 invoice,  Intellicall argues  that it  has not 
violated  the Commission's  rules because  the January  2000 
invoice is  being paid pursuant  to an agreement  with USAC.  
Finally, Intellicall argues that even  if it did violate the 
Commission's rules with respect to the January 2000 invoice, 
the  $99,000  forfeiture  for  that  violation  exceeds  the 
statutory limit because the  proposed base forfeiture amount 
(prior  to  downward   adjustment)  allegedly  exceeded  the 
$110,000 statutory  maximum for  a single violation  or each 
day of a continuing violation. 7

     6.   With respect  to Intellicall's contention  that it 
satisfied its  obligation to pay the  February 2000 invoice, 
we note that USAC's practice prior to May 2000 was to credit 
payments made towards the  oldest outstanding invoice unless 
the carrier  requested different treatment.8  In  this case, 
Intellicall  informed  USAC that  it  intended  to cure  its 
arrearages by  paying its current invoice  amounts beginning 
with   the   February   2000  invoice.9    Intellicall   has 
demonstrated that USAC accepted  its payment of $299,861.31, 
which USAC received on April 3,  2000, as payment in full of 
the February  2000 invoice.   Under these  circumstances, we 
will not  impose a forfeiture  with respect to  the February 
invoice,  and we  reduce the  proposed forfeiture  amount by 
$99,000. 

     7.   We  reject Intellicall's  argument that  it should 
not be fined for its failure to pay the January 2000 invoice 
in a timely fashion simply  because it has begun paying down 
its delinquency under its payment plan since April 2000. The 
fact that Intellicall has agreed  to pay the amount owed and 
has begun doing so does  not alter the fact that Intellicall 
did not  timely make  the contributions  it was  directed to 
make in the January 2000 invoice in violation of Section 254 
of the Act and Section 54.706 of the Commission's rules.

     8.   Finally, we  reject Intellicall's argument  that a 
$99,000  forfeiture  amount   for  the  January  non-payment 
exceeds  the  statutory maximum  of  $110,000  for a  single 
violation  or each  day  of a  continuing violation  because 
intermediate Commission calculations exceeded $110,000 prior 
to downward  adjustments made  in the NAL.   Even accepting, 
arguendo, that Intellicall is correct  that failure to pay a 
universal service obligation is  not a continuing violation, 
a $99,000 forfeiture for its January 2000 violation does not 
exceed the  $110,000 statutory limit for  a single violation 
forfeiture.  The nature  of  calculations  is irrelevant  to 
issues of  statutory compliance.   We continue to  believe a 
$99,000 forfeiture  is appropriate for that  violation based 
on all the facts and circumstances at issue.

                    IV.  ORDERING CLAUSES

     9.     Accordingly, IT  IS  ORDERED  THAT, pursuant  to 
Section 503(b) of  the Act,10 and Section  1.80(f)(4) of the 
Commission's  rules,11  Intellicall   Operator  Services  IS 
LIABLE  FOR  A  FORFEITURE  in the  amount  of  ninety  nine 
thousand  dollars  ($99,000)  for willfully  and  repeatedly 
violating  Section 254  of the  Act,  47 U.S.C.   254,  and 
Section  54.706  of  the  Commission's rules,  47  C.F.R.   
54.706. 

     10.   Payment  of the forfeiture  shall be made  in the 
manner  provided for  in  Section 1.80  of the  Commission's 
rules  within 30  days  of the  release  of this  Forfeiture 
Order.   If the  forfeiture is  not paid  within the  period 
specified, the  case may  be referred  to the  Department of 
Justice  for collection  pursuant to  Section 504(a)  of the 
Act, 47 U.S.C.  504(a).  Intellicall may pay the forfeiture 
by mailing  a check  or similar  instrument, payable  to the 
order  of  the  Federal Communications  Commission,  to  the 
Federal Communications Commission,  P.O. Box 73482, Chicago, 
Illinois 60673-7482.  The payment  should note the NAL/Acct. 
No. referenced  above.  Requests  for full payment  under an 
installment plan should  be sent to: Chief,  Credit and Debt 
Management Center,  445 12th Street, S.W.,  Washington, D.C. 
20554.  See 47 C.F.R.  1.1914.









     11.    IT  IS  FURTHER  ORDERED  THAT  a  copy  of  the 
Forfeiture  Order shall  be  sent by  Certified Mail  Return 
Receipt  Requested  to  Intellicall's  counsel,  Judith  St. 
Ledger-Roty Esq. and Steve A. Augustino, Esq., Kelley Drye & 
Warren LLP,  1200 19th  St NW,  Suite 500,  Washington, D.C. 
20036.
                    
     
     FEDERAL COMMUNICATIONS COMMISSION
                    

     

                         Magalie Roman Salas
                         Secretary

 
_________________________

1 Intellicall Operator Services, Notice of Apparent 
Liability for Forfeiture, FCC 00-261 (released July 27, 
2000).

2  47 U.S.C.  254(d). 

3  See Amendment of Parts 54 and 69 - Changes to Board of 
NECA, Inc., 12 FCC Rcd 18400, 18415 (1997); 47 C.F.R.  
54.702(b).

4  See Amendment of Part 54 - Universal Service, 12 FCC Rcd 
22423, 22425 (1997); 47 C.F.R.  54.709(a)(4), 54.709(d). 

5  Letter from David H. Solomon, Chief, Enforcement Bureau, 
to Intellicall Operator Services dated February 16, 2000.

6  Letter from George M. Trevino, Corporate Controller, to 
James W. Shook, Investigations and Hearings Division, 
Enforcement Bureau dated March 10, 2000.

7  The limit contained in the text of the statute for each 
violation or each day of a continuing violation is $100,000, 
and the limit for a continuing violation is $1,000,000.  47 
U.S.C.  503(b) (2).  Pursuant to the Debt Collection 
Improvement Act of 1996, Public Law 104-134 (110 Stat. 1321-
358), the maximums have been adjusted for inflation up to 
$110,000 and $1,100,000, respectively.  See Section 
1.80(b)(5)(iii) of the Commission's rules, 47 C.F.R.  
1.80(b)(5)(iii).

8 USAC's current policy is to uniformly credit payments to 
the oldest outstanding invoice.

9 Letter from George M. Trevino, Corporate Controller, to 
Beverly McLaughlin, USAC, dated March 22, 2000.

10  47 U.S.C.  503.

11  47 C.F.R.  1.80(f)(4).