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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. EB-02-IH-0757
)
Globcom, Inc. ) NAL Acct. No.
200332080015
d/b/a Globcom Global Communications )
)
Apparent Liability for Forfeiture ) FRN No.
0009652801
)
)
NOTICE OF APPARENT LIABILITY
FOR FORFEITURE AND ORDER
Adopted: September 26, 2003 Released:
September 30, 2003
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture
(``NAL'') and Order, we find that Globcom, Inc. (``Globcom''),
apparently violated section 254(d) of the Communications Act of
1934, as amended (the ``Act''), 1 and sections 54.706(a) and
64.604(c)(5)(iii)(A) of the Commission's rules2 by willfully and
repeatedly failing to contribute to the Universal Service Fund
and the Telecommunications Relay Service (``TRS'') Fund. We also
find that Globcom apparently violated section 54.711(a) of the
Commission's rules by willfully and repeatedly failing to file
complete and accurate interstate and international revenue
information.3 Based on our review of the facts and circumstances
surrounding this matter, we find that Globcom is apparently
liable for a total forfeiture of $806,861. We further order
Globcom to submit within 30 days, either as part of a response to
this NAL or separately, a report, supported by a sworn statement
or declaration under penalty of perjury of a corporate officer,
stating its plan to come into compliance with the relevant
payment and reporting rules discussed herein.
II. BACKGROUND
2. The Telecommunications Act of 19964 codified the
Commission's historical commitment to promote universal service
to ensure that consumers in all regions of the nation have access
to affordable, quality telecommunications services. Section 254
of the Act governs the assessment and recovery of universal
service contributions. Section 254(d) provides that ``[e]very
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.''5 Consistent with this mandate,
for the period covered by this NAL, the Commission assessed
contributions on every qualifying carrier based on the carrier's
gross billed end-user telecommunications revenues.6 Under the
Commission's rules, all telecommunications carriers that provided
interstate telecommunications services and certain other
providers of interstate telecommunications contributed to the
Universal Service Fund based on their gross billed interstate and
international end-user telecommunications revenues.7 The
Commission has authorized the Universal Service Administrative
Company (``USAC'') to administer the universal service support
mechanisms and to perform billing and collection functions.8
3. Title IV of the Americans with Disabilities Act of
1990, codified at 47 U.S.C. § 225, directs the Commission to
ensure that interstate and intrastate telecommunications relay
services are available, to the extent possible and in the most
efficient manner, to hearing-impaired and speech impaired
individuals in the United States.9 The Commission established
the TRS Fund, currently administered by the National Exchange
Carrier Association (``NECA''), to reimburse TRS providers for
the costs of providing interstate TRS. 10 TRS enables persons
with hearing and speech disabilities to communicate by telephone
with persons who may or may not have such disabilities. TRS
provides telephone access to a significant number of Americans
who, without it, might not be able to make or receive calls from
others.11 Pursuant to section 64.604 of the Commission's rules,
every carrier providing interstate telecommunications services
must contribute to the TRS fund.12 NECA invoices common carriers
each year for their contribution based on their interstate
revenues.13
4. USAC distributes, receives, and processes the
Telecommunications Reporting Worksheet, which sets forth the
information that carriers must submit so that the administrators
of the Universal Service Fund and the Telecommunications Relay
Service Fund may calculate and assess contributions.14 Prior to
March 14, 2001, the Commission required carriers to file
Telecommunications Reporting Worksheets twice each year for the
purpose of determining their contributions.15 Carriers were
required to file revenues for January through June by September 1
of each year and to file revenues for the entire calendar year by
the following April.16 Beginning March 14, 2001, the Commission
modified its reporting requirements to require carriers to file
not only an Annual Worksheet,17 but also to file a
Telecommunications Reporting Worksheet each quarter with their
interstate and international revenues from the previous period
(``Quarterly Worksheets'').18 A carrier's failure to file the
worksheets or submission of inaccurate or untruthful information
``may subject the contributor to the enforcement provisions of
the Act and any other applicable law.''19
5. USAC uses the revenue information provided on the
Quarterly Worksheets to determine each carrier's universal
service contribution on a quarterly basis, with a yearly true-up
using the Annual Worksheet.20 USAC then bills carriers each
month, based on their quarterly contribution amount.21 Carriers
must pay their contribution by the date shown on the invoices.22
As with the filing requirement, a carrier's failure to submit its
contributions may subject the carrier to the enforcement
provisions of the Act and any other applicable law.23
6. The Commission has identified the unacceptable
consequences of carriers' failure to meet their universal service
obligations:
First, delinquent carriers deprive the universal
service support mechanisms of the funds necessary to
carry out the goals of this important statutory
program. The support mechanisms cannot be fully
effective if, because of carrier delinquencies, they
are only partially funded. Second, by withholding
their universal service payments, delinquent
carriers likely enjoy a competitive advantage over
those carriers that are complying with the law and
our regulations and making their payments on a
timely basis. We view contribution to the universal
service support mechanisms as the obligation of all
responsible carriers, and we will not permit
carriers to shirk their responsibilities in an
attempt to gain an advantage over their law-abiding
competitors.24
The Commission has repeatedly warned carriers that attempts to
evade these important responsibilities will result in enforcement
action against them.25 Similar considerations are applicable to
a carrier's failure to contribute to the TRS fund.
7. Globcom, which does business as Globcom Global
Communications, is an interexchange carrier headquartered in
Northbrook, Illinois that provides resale telecommunications
services to consumers.26 Globcom has only filed two Quarterly
Worksheets out of the last ten quarters since the requirement
went into effect.27 The company has filed Annual Worksheets for
two of the last three years. In its 2001 Annual Worksheet, filed
May 7, 2002, Globcom stated that its long distance revenues for
year 2000 were $5,835,818.28 In its 2002 Annual Worksheet, filed
August 6, 2002, Globcom initially stated that its interstate and
international revenues for year 2001 were $187,343.29 On October
10, 2002, Globcom refiled its 2002 Annual Worksheet and restated
2001 revenue as $5,187,343.30 USAC has not received Globcom's
2003 Annual Worksheet with its 2002 revenues, although it was due
on April 1, 2003.
8. For the period in question, the Commission's rules
based a carrier's universal service contributions on the
carrier's interstate and international revenue during the
previous year.31 Thus, USAC based Globcom's universal service
contributions for 2001 on Globcom's reported revenues for 2000.
Similarly, USAC based Globcom's obligations for 2002 on Globcom's
reported 2001 revenues.
9. According to USAC's records, Globcom has never paid its
universal service contributions. Currently, Globcom is past due
on $681,837.76 in universal service-related charges, fees, and
adjustments. This amount represents Globcom's unpaid balances
for 2001 and 2002, as well as current monthly billings for 2003
and various fees and adjustments. USAC has sent Globcom monthly
invoices reflecting Globcom's past due balances and current
charges without any response from Globcom.32
10. Globcom has also failed to pay its November 3, 2002 and
July 7, 2003 interstate Telecommunications Relay Service
(``TRS'') Fund contributions.33 According to NECA records,
Globcom has not paid its last two invoices for contributions to
the TRS fund.34
11. After receiving information that Globcom had not paid
its universal service contributions or filed its worksheets, and
that the company may have inaccurately reported its revenue
information on its Annual Worksheets, the Enforcement Bureau
(``Bureau'') issued a Letter of Inquiry (``LOI'') to Globcom
requesting information relating to Globcom's universal service
contributions and its reporting of income.35 Globcom initially
failed to respond, but after the Bureau advised Globcom that its
failure to respond to the LOI placed it at risk of enforcement
action,36 Globcom provided responses on March 14 and April 16,
2003.37
III. DISCUSSION
12. Under section 503(b)(1) of the Act, 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.38 In order to impose
such a forfeiture penalty, the Commission must issue a notice of
apparent liability, the notice must be received, and the person
against whom the notice has been issued must have an opportunity
to show, in writing, why no such forfeiture penalty should be
imposed.39 The Commission will then issue a forfeiture if it
finds by a preponderance of the evidence that the person has
willfully or repeatedly violated the Act or a Commission rule.40
As we set forth in greater detail below, we conclude under this
standard that Globcom is liable for a forfeiture in the amount of
$806,861 for its apparent willful and repeated violations of
section 254(d) of the Act and sections 54.706(a), 54.711(a), and
64.604 of the Commission's rules.
13. The fundamental issues in this case are whether Globcom
apparently violated the Act and the Commission's rules by (1)
willfully or repeatedly failing to pay its required universal
service fund contributions and interstate TRS fund contributions;
(2) willfully or repeatedly underreporting the interstate and
international revenues that form the basis for its universal
service and TRS fund contribution obligations; and (3) willfully
or repeatedly failing to file its Annual and Quarterly
Worksheets. As discussed below, we answer all three questions
affirmatively. Based on a preponderance of the evidence, we
therefore conclude that Globcom is apparently liable for a
forfeiture of $806,861 for apparently willfully and repeatedly
violating section 254 of the Act and sections 54.706, 54.711, and
64.604 of the Commission's rules.41 We also admonish Globcom for
its violations of these requirements beyond the one-year statute
of limitations.
A. Globcom Apparently Has Willfully And Repeatedly
Failed To Pay Its Universal Service Contributions.
14. Section 254(d) of the Act requires that interstate
telecommunications carriers ``contribute . . . to the specific,
predictable, and sufficient mechanisms established by the
Commission to preserve and advance universal service.''42 The
Commission has implemented section 254(d) at section 54.706 of
its rules, which states, in relevant part, ``every
telecommunications carrier that provides interstate
telecommunications services ... shall contribute to the federal
universal service support mechanisms on the basis of its
interstate and international end-user telecommunications
revenues, net of prior period actual contributions.''43 Section
54.713 of the Commission's rules cautions that a carrier's
failure to submit its contributions ``may subject the contributor
to the enforcement provisions of the Act and any other applicable
law.''44
15. As a reseller of interstate and international long-
distance services, Globcom is subject to the obligations of
section 254 and section 54.706(b).45 Globcom states that it
``has contributed to the universal service fund''46 but does not
identify either the amounts or dates of these alleged
contributions.47 USAC has sent numerous invoices and past due
notices to Globcom informing it of its universal service
obligations.48 As of August 15, 2003, however, USAC's records
show that Globcom has not made a single payment on its debt and
to date owes $681,837.76 in universal service contributions and
fees for 2001, 2002, and 2003.49 Thus, for over two and a half
years, it appears that Globcom has failed to meet its clear
statutory obligations.
16. Carriers must pay their universal service contributions
on a monthly basis.50 Thus, each month that Globcom failed to
make its universal service contribution constitutes a separate
violation of the Commission's rules.51 Globcom therefore
apparently violated 47 U.S.C. § 254(d) and 47 C.F.R. § 54.706
each month since January 2001 by failing to pay into the fund.
Based on this evidence, we find that Globcom apparently has
willfully and repeatedly failed to make its required
contributions in violation of section 254(d) of the Act and
section 54.706 of the Commission's rules.
B. Globcom Apparently Has Willfully And Repeatedly
Failed To Pay Its Telecommunications Relay Services
Contributions
17. As noted above, TRS allow individuals with hearing or
speech disabilities to use interstate and intrastate
telecommunications services. Section 64.604 of the Commission's
rules requires every carrier providing interstate
telecommunications services to contribute to the interstate TRS
fund on the basis of interstate end-user telecommunications
revenues.52 Carriers' contributions are based upon the same
Telecommunications Reporting Worksheet used for calculating
universal service contributions.53 Each carrier must contribute
at least $25 per year; carriers whose annual contributions are
less than $1200 must pay the entire amount at the beginning of
the contribution period.54 Otherwise, carriers may divide their
contributions into equal monthly payments.55 Carriers must make
their TRS contributions on at least an annual basis. Thus,
Globcom apparently violated the Commission's rules each time it
failed to make its annual contributions in 2002 and 2003.
18. According to NECA's records, Globcom has a past due
balance for 2002 of $4,000.00, as well as a past due balance for
2003 of $7,729.14. Globcom's overdue balance therefore is
$11,729.14, plus late payment charges, for a total of
$11,885.18.56 Based on this evidence, we find that Globcom
apparently has willfully and repeatedly failed to make its
required contribution to the TRS fund in violation of section
64.604 of the Commission's rules.
C. Globcom Apparently Has Willfully and Repeatedly
Failed To File Accurate Revenue Information
19. Pursuant to section 54.711 of the Commission's rules,
carriers must file on a quarterly and annual basis complete and
accurate Telecommunications Reporting Worksheets. 57 Among other
information, the worksheets contain the carriers' interstate and
international revenues, which are the basis for the carriers'
universal service contributions, as well as their TRS fund
contributions. In Globcom's 2001 Annual Worksheet, the company
stated that its long distance revenues during 2000 were
$5,835,818.58 In its 2002 filing, Globcom initially stated that
its interstate and international revenues for 2001 were $187,343.
Following informal Commission staff inquiries about the dramatic
dip in revenue from 2000 to 2001, Globcom amended its Annual
Worksheet to state that it had $5,187,343 in interstate and
international revenues in 2001.59
20. Globcom's responses to the LOI, however, contradict
these figures. Globcom concedes that its actual combined
interstate and international revenues for 2000 and 2001 were
$7,931,497 and $21,099,070, respectively.60 Thus, Globcom
appears to have repeatedly understated its revenues on both its
2001 and 2002 Annual Worksheets, potentially by more than $2
million for 2000,61 and by more than $16 million in 2001.62
Based on this evidence, we find that Globcom has apparently
violated section 54.711 of the Commission's rules by willfully
and repeatedly underreporting its interstate and international
revenues on its Annual Worksheets.63
D.Globcom Apparently Has Willfully And Repeatedly Failed To
File Its Annual And Quarterly Worksheets
21. As noted above, the Commission requires carriers to
file Annual and Quarterly Worksheets with USAC.64 With the
exception of the apparently incorrect Annual Worksheets for 2001
and 2002, and two Quarterly Worksheets,65 USAC has no record of
any other revenue filings by Globcom. Nor has Globcom provided
us with any evidence that it filed the required information.66
In addition, Globcom has failed to file its Annual Worksheet for
2003, which was due April 1, 2003. Thus, since 2001, Globcom
apparently has violated the filing requirements of the
Commission's rules a total of nine times.67 Based on a
preponderance of the evidence, we conclude that Globcom
apparently has violated section 54.711 of the Commission's rules
by willfully and repeatedly failing to file its revenue
information.
1.a.B. Proposed Action
1. Proposed Forfeiture Amount
22. Section 503(b)(2)(B) of the Act authorizes the
Commission to assess a forfeiture of up to $120,000 for each
violation or each day of a continuing violation, up to a
statutory maximum of $1,200,000 for a single act or failure to
act.68 In determining the appropriate forfeiture amount, we
consider the factors enumerated in section 503(b)(2)(D) of the
Act, including ``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 require.''
23. Under section 503(b)(6) of the Act, we may only propose
forfeitures for apparent violations that accrued within one year
of the date of this NAL.69 Nevertheless, section 503 does not
prohibit us from assessing whether Globcom's conduct prior to
that date apparently violated the Act or our rules and we may
consider Globcom's other violations in determining the
appropriate forfeiture amount for those violations within the
statute of limitations.70 Therefore, although we find that
Globcom apparently violated the Act and our rules in multiple
years, we discuss forfeitures here for only the last year of
violations. We admonish Globcom for the violations that occurred
beyond the statute of limitations.
24. Based on the facts above, it appears that Globcom
deliberately chose not to pay its universal service contributions
each month for revenues derived from January 1, 2001 to the
present. Despite Globcom's clear obligations under our universal
service rules, and despite numerous monthly communications from
USAC informing the carrier of its increasing debt, Globcom has
done nothing to address this matter.71
25. Previously, even in cases of longstanding failures to
pay universal service contributions, we assessed forfeitures on
only a portion of the violations. Thus, in ConQuest, we assessed
a forfeiture only for a single month of nonpayment, even though
the carrier had been delinquent for more than eight months.72 We
warned, however, that ``in light of the accumulating record of
non-compliance, we are prepared to impose substantially greater
forfeitures in the future,'' and explicitly noted that ``our
future notices likely will cover greater periods of non-payment
than a single month....''73 Approximately one year later, we
assessed forfeitures for two months of nonpayment.74 In
addition, we have repeatedly stated that we are prepared to take
even stronger action against delinquent carriers, including
substantially higher forfeitures and revocation of carriers'
operating authority.75 More than three years have passed since
the ConQuest decision, and the time has come to implement a
substantially greater forfeiture amount in order to deter
carriers from violating our universal service contribution and
reporting rules.
26. The present case clearly demonstrates that our prior
method of assessing forfeitures has not adequately deterred
carriers from violating our universal service contribution and
reporting rules. Such conduct concerns us greatly, particularly
in view of the clear state of the law and our repeated warnings
that we intend to exercise our enforcement authority to the
fullest extent of that law. Carrier nonpayment of universal
service contributions undermines the efficiency and effectiveness
of the universal service support mechanisms. Moreover,
delinquent carriers may obtain a competitive advantage over
carriers complying with the Act and our rules. We consider
universal service nonpayment to be a serious threat to a key goal
of Congress and one of the Commission's primary responsibilities.
Therefore, we are now increasing the number of months of
nonpayment on which we assess the forfeiture amount .76 We will
now propose substantial forfeitures for each of Globcom's
universal service-related violations within the past year.77
27. The proposed forfeiture against Globcom for nonpayment
of its universal service contributions consists of two
components. First, applying the base forfeiture amount of
$20,000 per violation for the previous twelve months of non-
payment results in a base figure of $240,000.78 Second, we add
an amount equal to approximately one-half of the unpaid universal
service contributions.79 As the Commission has observed, this
component of the forfeiture ``illustrate[s] that a delinquent
carrier's culpability and the consequential damage it causes to
the goal of universal service may vary with the size of the
contribution it fails to make.''80 As of August 15, 2003,
Globcom owed $681,837 in universal service contributions and
fees. Adding half this amount ($340,918) to the base figure of
$240,000 results in a proposed forfeiture of $580,918.
28. In addition, it appears that Globcom deliberately chose
not to pay its contributions to the TRS Fund. Globcom paid the
first invoice of $149.87, plus a late payment fee, but has not
paid the November 3, 2002 and July 7, 2003 invoices. The TRS
fund depends on carriers' timely payment of contributions.
Carriers that violate the contribution requirements undermine the
TRS fund and may obtain an unfair advantage over their
competitors.
29. The Commission has not established a base forfeiture
amount for failure to pay TRS fund contributions. We find that
this violation is similar to the failure to pay universal service
contributions, for which the base forfeiture amount is $20,000.
TRS fund contributions are, however, relatively smaller than
carriers' universal service contributions. Therefore, we
conclude that the TRS fund nonpayment should have a base
forfeiture amount of $10,000. In addition, as we did for the
universal service nonpayment, we are adding one-half the unpaid
balance to the base forfeiture amount. In this manner, as with
forfeitures for universal service nonpayment, the forfeiture
reflects the amount of the carrier's delinquency. As described
above, Globcom apparently violated our TRS contribution
requirements twice within the last year, and currently owes
$11,885. Under our formula, we find that Globcom is liable for
an additional proposed forfeiture of $25,943 for its apparent
failure to make TRS contributions.81
30. We view Globcom's apparent submission of inaccurate
revenue information and its failure to file its Quarterly and
Annual Worksheets as similarly grave. The size and scope of the
universal service and TRS programs impose a monumental burden on
the Commission, USAC, and NECA to verify that each and every
carrier has complied with the revenue reporting requirements. By
necessity, the Commission and the other entities must rely on
carriers' compliance with our rules. Where a carrier ignores the
statute, our rules, and repeated past due notices, it undermines
the foundation of the universal service and TRS programs.
31. The Commission's Forfeiture Policy Statement and
implementing rules establish $3,000 as the base forfeiture for
failing to provide required forms or information.82 We find that
a substantial upward adjustment is appropriate here, however,
because Globcom's failure appears to have been egregious.83 The
Commission's rules state that an ``officer of the contributor
must certify to the truth and accuracy of the Telecommunications
Worksheet....''84 Despite this safeguard, as explained above,
the October 10, 2002 Annual Worksheet filed by Globcom
understated the company's revenues by more than $16 million.
Globcom has offered no explanation for this discrepancy, which is
so dramatic that we cannot attribute it to inadvertence.
Accordingly, applying the Forfeiture Policy Statement and the
statutory factors listed above to the instant case, we conclude
that Globcom is apparently liable for a $50,000 forfeiture for
the inaccurate Annual Worksheet filed in October 2002.85
32. With respect to Globcom's apparent failure to submit
the Quarterly and Annual Worksheets, we find that a similar
upward adjustment from the $3,000 base amount is appropriate.
Even though the Commission had clear rules requiring carriers to
provide revenue information on an annual and quarterly basis,
Globcom has done so only intermittently for more than two years.
Moreover, when it did submit information, it understated its
interstate and international revenues. Taking into account the
factors listed in section 503(b)(2)(D) of the Act and Commission
precedent, we find that Globcom is apparently liable for a
$50,000 forfeiture for each of the three occasions it failed to
file its revenue information within the past year, for a total
forfeiture of $150,000.86
C.a.1. Admonishment
33. As noted above, we also admonish Globcom for its
violations of our rules and the Act that occurred outside the
one-year statute of limitations. Although we propose forfeitures
for Globcom's apparent violations within the last year,
admonishment for violations beyond the statute of limitations is
appropriate here to note the full scope and scale of Globcom's
departure from our rules.
34. We therefore admonish Globcom for repeatedly violating
section 254(d) of the Act and section 54.706(a) of our rules
through its failure to pay any of its universal service debt each
month going back to January 1, 2000. We also admonish Globcom
for its violations of section 54.711(a) of the Commission's rules
through filing inaccurate Annual Worksheets in May and August of
2002, and through failing to file Quarterly Worksheets going back
to May 2001, when the Quarterly Worksheet requirement began.87
IV. CONCLUSION
35. We conclude that Globcom is apparently liable for the
following proposed forfeitures: (1) $580,918 for failure to make
timely universal service contributions; (2) $25,943 for failure
to make timely TRS contributions; (3) $50,000 for its apparent
failure to file complete and accurate revenue information on its
Annual Worksheet; and (4) $150,000 for its apparent failure to
file its 2003 Quarterly and Annual Worksheets. In sum, we hold
that Globcom is apparently liable for a total proposed forfeiture
of $806,861. We also admonish Globcom for violations beyond the
statute of limitations; specifically, failing to pay its
universal service contributions, and failing to file complete and
accurate revenue information in its Annual and Quarterly
Worksheets.
36. Future violations of the Commission's universal service
rules and TRS rules will constitute additional violations
subjecting Globcom to possible increased enforcement action.
Such enforcement action could take the form of higher forfeitures
and/or potential revocation of Globcom's operating authority,
including disqualification of Globcom's principals from the
provision of any interstate common carrier services without the
prior consent of the Commission.88 In this regard, we order
Globcom to submit within 30 days, either as part of a response to
this NAL or separately, a report, supported by a sworn statement
or declaration under penalty of perjury of a corporate officer,
stating its plan to come into compliance with the relevant
payment and reporting rules discussed here.
V. ORDERING CLAUSES
37. ACCORDINGLY, IT IS ORDERED THAT, pursuant to section
503(b) of the Communications Act of 1934, as amended, 47 U.S.C. §
503(b), and section 1.80 of the Commission's rules, 47 C.F.R. §
1.80, that Globcom, Inc. is hereby NOTIFIED of its APPARENT
LIABILITY FOR A FORFEITURE in the amount of $806,861 for
willfully and repeatedly violating the Act and the Commission's
rules.
38. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of
the Commission's rules, 47 C.F.R. § 1.80, within thirty days of
the release date of this NOTICE OF APPARENT LIABILITY AND ORDER,
Globcom, Inc. SHALL PAY the full amount of the proposed
forfeiture currently outstanding on that date or shall file a
written statement seeking reduction or cancellation of the
proposed forfeiture.
39. IT IS FURTHER ORDERED THAT, pursuant to sections 4(i),
219(b), and 254(d) of the Communications Act of 1934, as amended,
47 U.S.C. §§ 154(i), 219(b), and sections 54.706(a), 54.711(a),
and 64.604(c)(5)(iii) of the Commission's rules, 47 C.F.R. §§
54.706(a), 54.711(a), 64.604(c)(5)(iii), within thirty days of
the release date of this NOTICE OF APPARENT LIABILITY AND ORDER,
Globcom, Inc. SHALL SUBMIT a report, supported by a sworn
statement or declaration under perjury of perjury by a corporate
officer, stating its plan promptly to come into compliance with
the universal service and Telecommunications Relay Service
payment and reporting rules discussed herein.
40. Payment of the forfeiture may be made by check or
similar instrument, payable to the order of the Federal
Communications Commission. Such remittance should be made to
Forfeiture Collection Section, Finance Branch, Federal
Communications Commission, P.O. Box 73482, Chicago, Illinois
60673-7482. The payment should note the NAL/Acct. No. referenced
above and FRN No. 0009652801.
41. The response, if any, to this NOTICE OF APPARENT
LIABILITY AND ORDER must be mailed to Maureen F. Del Duca, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, S.W., Washington,
D.C. 20554 and must include the NAL/Acct. No. referenced above.
The report discussed above should be mailed to Ms. Del Duca at
the same address.
42. 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 (``GAAP'');
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.
43. Requests for payment of the full amount of this NAL
under an installment plan should be sent to Chief, Credit and
Management Center, 445 12th Street, S.W., Washington, D.C.
20554.89
44. Under the Small Business Paperwork Relief Act of 2002,
Pub.L.No. 107-198, 116 Stat. 729 (June 28, 2002), the Commission
is engaged in a two-year tracking process regarding the size of
entities involved in forfeitures. If you qualify as a small
entity and if you wish to be treated as a small entity for
tracking purposes, please so certify to us within 30 days of this
NAL, either in your response to the NAL or in a separate filing
to be sent to the Investigations and Hearings Division,
Enforcement Bureau, 445 12th Street, S.W., Washington, D.C.
20554. Your certification should indicate whether you, including
your parent entity and its subsidiaries, meet one of the
definitions set forth in the list in Attachment A of this NAL.
This information will be used for tracking purposes only. Your
response or failure to respond to this question will have no
effect on your rights and responsibilities pursuant to section
503(b) of the Communications Act. If you have any questions
regarding any of the information contained in Attachment A,
please contact the Commission's Office of Communications Business
Opportunities at (202) 418-0990.
45. IT IS FURTHER ORDERED that a copy of this NOTICE OF
APPARENT LIABILITY AND ORDER shall be sent by certified mail,
return receipt requested, to Glenn Kofman, Globcom, Inc., 2100
Sanders Rd., Suite 150, Northbrook, IL 60047.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary ATTACHMENT A
FCC List of Small Entities
As described below, a ``small entity'' may be a small
organization,
a small governmental jurisdiction, or a small business.
(1) Small Organization
Any not-for-profit enterprise that is independently owned
and operated and
is not dominant in its field.
(2) Small Governmental Jurisdiction
Governments of cities, counties, towns, townships, villages,
school districts, or
special districts, with a population of less than fifty
thousand.
(3) Small Business
Any business concern that is independently owned and
operated and
is not dominant in its field, and meets the pertinent size
criterion described below.
Industry Type Description of Small Business
Size Standards
Cable Services or Systems
Special Size Standard -
Cable Systems Small Cable Company has 400,000
Subscribers Nationwide or Fewer
Cable and Other Program
Distribution $12.5 Million in Annual
Receipts or Less
Open Video Systems
Common Carrier Services and Related Entities
Wireline Carriers and
Service providers
1,500 Employees or Fewer
Local Exchange Carriers,
Competitive Access
Providers, Interexchange
Carriers, Operator Service
Providers, Payphone
Providers, and Resellers
Note: With the exception of Cable Systems, all size
standards are expressed in either millions of dollars or
number of employees and are generally the average annual
receipts or the average employment of a firm. Directions
for calculating average annual receipts and average
employment of a firm can be found in
13 CFR 121.104 and 13 CFR 121.106, respectively.
International Services
International Broadcast
Stations
$12.5 Million in Annual
Receipts or Less
International Public Fixed
Radio (Public and Control
Stations)
Fixed Satellite
Transmit/Receive Earth
Stations
Fixed Satellite Very Small
Aperture Terminal Systems
Mobile Satellite Earth
Stations
Radio Determination
Satellite Earth Stations
Geostationary Space Stations
Non-Geostationary Space
Stations
Direct Broadcast Satellites
Home Satellite Dish Service
Mass Media Services
Television Services
$12 Million in Annual Receipts
or Less
Low Power Television
Services and Television
Translator Stations
TV Auxiliary, Special
Broadcast and Other Program
Distribution Services
Radio Services
$6 Million in Annual Receipts
or Less
Radio Auxiliary, Special
Broadcast and Other Program
Distribution Services
Multipoint Distribution Auction Special Size Standard -
Service Small Business is less than
$40M in annual gross revenues
for three preceding years
Wireless and Commercial Mobile Services
Cellular Licensees
1,500 Employees or Fewer
220 MHz Radio Service -
Phase I Licensees
220 MHz Radio Service - Auction special size standard -
Phase II Licensees Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
controlling principals)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
controlling principals)
700 MHZ Guard Band Licensees
Private and Common Carrier
Paging
Broadband Personal
Communications Services 1,500 Employees or Fewer
(Blocks A, B, D, and E)
Broadband Personal Auction special size standard -
Communications Services Small Business is $40M or less
(Block C) in annual gross revenues for
three previous calendar years
Very Small Business is average
gross revenues of $15M or less
for the preceding three
calendar years (includes
affiliates and persons or
entities that hold interest in
such entity and their
affiliates)
Broadband Personal
Communications Services
(Block F)
Narrowband Personal
Communications Services
Rural Radiotelephone Service 1,500 Employees or Fewer
Air-Ground Radiotelephone
Service
800 MHz Specialized Mobile Auction special size standard -
Radio Small Business is $15M or less
average annual gross revenues
for three preceding calendar
years
900 MHz Specialized Mobile
Radio
Private Land Mobile Radio 1,500 Employees or Fewer
Amateur Radio Service N/A
Aviation and Marine Radio
Service 1,500 Employees or Fewer
Fixed Microwave Services
Small Business is 1,500
Public Safety Radio Services employees or less
Small Government Entities has
population of less than 50,000
persons
Wireless Telephony and
Paging and Messaging 1,500 Employees or Fewer
Personal Radio Services N/A
Offshore Radiotelephone 1,500 Employees or Fewer
Service
Wireless Communications Small Business is $40M or less
Services average annual gross revenues
for three preceding years
Very Small Business is average
gross revenues of $15M or less
for the preceding three years
39 GHz Service
Auction special size standard
(1996) -
Multipoint Distribution Small Business is $40M or less
Service average annual gross revenues
for three preceding calendar
years
Prior to Auction -
Small Business has annual
revenue of $12.5M or less
Multichannel Multipoint
Distribution Service $12.5 Million in Annual
Receipts or Less
Instructional Television
Fixed Service
Auction special size standard
(1998) -
Local Multipoint Small Business is $40M or less
Distribution Service average annual gross revenues
for three preceding years
Very Small Business is average
gross revenues of $15M or less
for the preceding three years
First Auction special size
standard (1994) -
Small Business is an entity
that, together with its
affiliates, has no more than a
218-219 MHZ Service $6M net worth and, after
federal income taxes (excluding
carryover losses) has no more
than $2M in annual profits each
year for the previous two years
New Standard -
Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Satellite Master Antenna
Television Systems $12.5 Million in Annual
Receipts or Less
24 GHz - Incumbent Licensees 1,500 Employees or Fewer
24 GHz - Future Licensees Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Miscellaneous
On-Line Information Services $18 Million in Annual Receipts
or Less
Radio and Television
Broadcasting and Wireless
Communications Equipment 750 Employees or Fewer
Manufacturers
Audio and Video Equipment
Manufacturers
Telephone Apparatus
Manufacturers (Except 1,000 Employees or Fewer
Cellular)
Medical Implant Device 500 Employees or Fewer
Manufacturers
Hospitals $29 Million in Annual Receipts
or Less
Nursing Homes $11.5 Million in Annual
Receipts or Less
Hotels and Motels $6 Million in Annual Receipts
or Less
Tower Owners (See Lessee's Type of Business)
_________________________
1 47 U.S.C. § 254.
2 47 C.F.R. §§ 54.706(a); 64.604(c)(5)(iii)(A).
3 47 C.F.R. § 54.711(a).
4 The Telecommunications Act of 1996 amended the Communications
Act of 1934. See Telecommunications Act of 1996, Pub. L. No.
104-104, 110 Stat. 56 (1996).
5 47 U.S.C. § 254(d).
6 See Federal-State Joint Board on Universal Service, Report and
Order, 12 FCC Rcd 8776, 9206-07, ¶¶ 843-44 (1997) (subsequent
history omitted). As of April 1, 2003, carrier contributions are
based on carriers projected, rather than historical, revenues.
See infra note 31.
7 47 C.F.R. §§ 54.706, 54.709.
8 See Amendment of Parts 54 and 69 -- Changes to the Board of
Directors of the National Exchange Carriers Association, Inc.,
Report and Order and Second Order on Reconsideration, 12 FCC Rcd
18400, 18415, ¶ 25 (1997) (``NECA Changes Order''); 47 C.F.R.
§ 54.702(b).
9 Pub. L. No. 101-336, § 401, 104 Stat. 327, 366-69 (1990)
(adding section 225 to the Act).
10See Telecommunications Relay Services and the Americans with
Disabilities Act of 1990, Third Report and Order, 8 FCC Rcd 5300,
5301, ¶ 7 (1993) (TRS III Order).
11See Telecommunications Relay Services and Speech-to-Speech
Services for Individuals with Hearing and Speech Disabilities, CC
Docket No. 98-67, Report and Order, 15 FCC Red 5140, 5143, ¶ 5
(2000).
12See 47 C.F.R. § 64.604(c)(5)(iii).
13See Telecommunications Relay Services and Speech-to-Speech
Services for Individuals with Hearing and Speech Disabilities,
Report and Order, 15 FCC Rcd 5140, 5143, ¶ 5 (2000).
14NECA Changes Order, 12 FCC Rcd at 18442, ¶ 80.
15See 1998 Biennial Regulatory Review -- Streamlined Contributor
Reporting Requirements Associated with Administration of
Telecommunications Relay Services, North American Numbering Plan,
Local Number Portability, and Universal Service Support
Mechanisms, Report and Order, 14 FCC Rcd 16602 (1999)
(``Consolidated Reporting Order''). The Consolidated Reporting
Order established one form, the Telecommunications Reporting
Worksheet, in lieu of separate reporting requirements for the
interstate Telecommunications Relay Services Fund, federal
universal service support mechanisms, administration of the North
American Numbering Plan, and the shared costs of long-term local
number portability. Consolidated Reporting Order, 14 FCC Rcd at
16609, ¶ 10. The Commission also adopted a ``short form'' for
September 1 Universal Service support mechanism filing. Id. at
16618-19, ¶¶ 33-34.
16Prior to March 14, 2001, the Commission required semi-annual,
in addition to annual reporting. Contributors were required to
file revenues for January through June on September 1 of each
year and annual revenues from the prior calendar year on April 1
of each year. NECA Changes Order, 12 FCC Rcd 18400, Appendix B;
47 C.F.R. 54.711(a) (2000) (``Contributions shall be calculated
and filed in accordance with the Telecommunications Reporting
Worksheet. The Telecommunications Reporting Worksheet sets forth
information that the contributor must submit to the Administrator
[USAC] on a semi-annual basis. . . .''). See NECA Changes
Order, 12 FCC Rcd at 18424, ¶ 43, 18442, ¶ 80, 18501-02, Appendix
C. The Commission adopted the Worksheet and attached it as
Appendix C to the NECA Changes Order. See also ``Common Carrier
Bureau Announces Release of September Version of
Telecommunications Reporting Worksheet (FCC Form 499-S) for
Contributions to the Universal Service Support Mechanisms,''
Public Notice, CC Docket No. 98-171, 14 FCC Rcd 12171 (1999);
``Common Carrier Bureau Announces Release of Telecommunications
Reporting Worksheet (FCC Form 499-A) for April 1, 2000 Filing by
All Telecommunications Carriers,'' Public Notice, CC Docket No.
98-171, 15 FCC Rcd 16434 (2000).
17See FCC Form 499-A Telecommunications Reporting Worksheet --
Annual Filing, http://www.fcc.gov/Forms/Form499-A/499a.pdf (April
2003) (``Annual Worksheet Form'').
18See Federal-State Joint Board on Universal Service, Petition
for Reconsideration filed by AT&T, Report and Order and Order on
Reconsideration, 16 FCC Rcd 5748 (2001) (``Quarterly Reporting
Order''). The first Quarterly Worksheet, reporting revenue data
from the first quarter of 2001 (January 1 through March 31, 2001)
was due May 11, 2001; thereafter, carriers reported first quarter
revenues on May 1 of each year. See Quarterly Reporting Order,
16 FCC Rcd at 5755, ¶ 19 & note 32. See FCC Form 499-Q
Telecommunications Reporting Worksheet -- Quarterly Filing for
Universal Service Contributors, http://www.fcc.gov/Forms/Form499-
Q/499q.pdf (April 2003) (``Quarterly Worksheet Form'').
1947 C.F.R. § 54.713. See also NECA Changes Order, 12 FCC Rcd
at 18442 n.165 (citing 47 U.S.C. §§ 206-209, 312, 403, 503).
20See 47 C.F.R. § 54.709(a).
21See, e.g., Federal-State Joint Board on Universal Service,
Sixteenth Order on Reconsideration in CC Docket No. 96-45, Eighth
Report and Order in CC Docket No. 96-45, and Sixth Report and
Order in CC Docket No. 96-262, 15 FCC Rcd 1679, 1687, ¶ 18 (1999)
(``Sixth Report and Order''); Federal-State Board on Universal
Service, Further Notice of Proposed Rulemaking and Order, 15 FCC
Rcd 19947, 19954, ¶ 17 (2000) (``Further Notice''); Federal-State
Joint Board on Universal Service, 1998 Biennial Regulatory Review
- Streamlined Contributor Reporting Requirements Associated with
Administration of Telecommunications Relay Service, North
American Numbering Plan, Local Number Portability, and Universal
Service Support Mechanisms, Report and Order and Second Further
Notice of Proposed Rulemaking, 17 FCC Rcd 24952, 24971-72, ¶ 35
(2002) (``Streamlined Reporting Requirements Order''); Changes to
the Board of Directors of the National Exchange Carrier
Association, Inc., Federal-State Board on Universal Service,
Second Order on Reconsideration in CC Docket No. 97-21, 12 FCC
Rcd 22423, 22425, ¶ 3 (1997) (``Second Reconsideration Order'').
2247 C.F.R. § 54.711(a) (``The Commission shall announce by
Public Notice published in the Federal Register and on its
website the manner of payment and the dates by which payments
must be made.'') See, e.g., ``Proposed Third Quarter 2003
Contribution Factor,'' Public Notice, CC Docket No. 96-45, 18 FCC
Rcd 11442 (Wireline Comp. Bur. 2003) (``Contribution payments
are due on the date shown on the [USAC] invoice.'') Our rules do
not, however, condition payment on receipt of an invoice or other
notice from USAC. See 47 C.F.R. § 54.706(b). A carrier that
does not file an Annual or Quarterly Worksheet may fail to
receive an invoice from USAC, but is nonetheless required to
contribute to the universal service fund, unless its revenues are
considered de minimis. The instructions for the Annual and
Quarterly Worksheets include tables for carriers to determine
their annual contributions. Carriers should estimate their
annual contributions to determine if they are de minimis and
therefore exempt.
2347 C.F.R. § 54.713. See also NECA Changes Order, 12 FCC Rcd
at 18442 n.165 (citing 47 U.S.C. §§ 206-209, 312, 403, 503).
24ConQuest Operator Services Corp., Order of Forfeiture, 14 FCC
Rcd 12518, 12518, ¶ 1 (1999) (``ConQuest'').
25See, e.g., America's Tele-Network Corp., Notice of Apparent
Liability for Forfeiture, 15 FCC Rcd 20903, 20906, ¶ 8 (2000)
(``ATNC''); Matrix Telecom, Inc., Notice of Apparent Liability
for Forfeiture, 15 FCC Rcd 13544, 13546, ¶ 7 (2000) (``Matrix'').
26Globcom's website states that the carrier provides a number of
services, including residential and commercial long-distance,
calling cards, and toll-free numbers. See
http://www.globcom.com/index.aspx. The website also offers
Globcom's rates for calls to dozens of countries, as well as
within the U.S.
27Globcom filed a Quarterly Worksheet for third quarter 2002 on
October 10, 2002. On January 27, 2003, Globcom filed a revised
version of the third quarter 2002 filing. On February 13, 2003,
Globcom filed the Quarterly Worksheet for fourth quarter 2002.
28See Globcom's 2001 Annual Worksheet, p. 5, filed on May 7,
2002. The Annual and Quarterly Worksheets require carriers to
disaggregate their revenue into interstate and international
revenues, but Globcom simply reported its ``long-distance
revenue.'' Id.
29See Globcom's 2002 Annual Worksheet, p. 5, filed on August 6,
2002. Globcom disaggregated its interstate and international
revenues on its 2002 Annual Worksheet.
30See Globcom's Revised 2002 Annual Worksheet, p. 5, filed on
October 10, 2002.
31The Commission recently modified its rules on carrier
contributions to the universal service fund. See Federal/State
Joint Board on Universal Service, 1998 Biennial Regulatory Review
- Streamlined Contributor Reporting Requirements Associated with
Administration of Telecommunications Relay Service, North
American Numbering Plan, Local Number Portability, and Universal
Service Support Mechanisms, Telecommunications Services for
Individuals with Hearing and Speech Disabilities, and the
Americans with Disabilities Act of 1990, Administration of the
North American Numbering Plan and North American Numbering Plan
Cost Recovery Contribution Factor and Fund Size, Number Resource
Optimization, Telephone Number Portability, Truth-in-Billing and
Billing Format, Report and Order and Second Further Notice of
Proposed Rulemaking, 17 FCC Rcd 24952 (2002) (``Interim
Contribution Order''). As of April 1, 2003, USAC bases a
carrier's universal service obligation on the carrier's projected
collected revenue rather than its historical gross-billed
revenue. Interim Contribution Order, 17 FCC Rcd at 24969-974, ¶¶
29-39.
32USAC has sent Globcom numerous past due notices for Globcom's
2001 and 2002 contributions, as well as current charges. On
January 23, 2003, USAC sent Globcom an invoice due February 14,
2003 for $152,769.62 in 2001 and 2002 universal service-related
charges, adjustments, and fees, as well as current charges. On
February 25, 2003, USAC sent Globcom another invoice informing
the carrier that it owed $305,379.87, due March 14, 2003. On
March 21, 2003, USAC sent Globcom another invoice, informing the
carrier that it owed $459,059.51. On April 22, 2003, USAC sent
Globcom an invoice informing the carrier that it now owed
$497,240.98. On May 22, 2003, USAC sent Globcom an invoice
stating that the balance due, on June 13, 2003, was $536,422.36.
On June 20, 2003, USAC sent Globcom an invoice informing the
carrier that it owed $575,765.79, due July 15, 2003. Most
recently, on July 22, 2003, USAC sent Globcom an invoice stating
that the balance due, $681,837.76, was past due on August 15,
2003. See Letter from Anne Marie Trew, Director, Finance
Operations and D. Scott Barash, Vice President and General
Counsel, USAC to William Davenport, Deputy Chief, Investigations
and Hearings Division, Enforcement Bureau, Federal Communications
Commission, dated August 21, 2003 (``USAC Letter''). These
statements from USAC are based on Globcom's reported 2000 and
2001 revenue, as set forth in Globcom's Annual Worksheets for
2001 and 2002. Globcom did not file an Annual Worksheet for its
pre-2000 revenue and has not been billed by USAC for those years.
We take no action at this time regarding Globcom's failure to
file or contribute prior to 2000.
33NECA bills contributors following the revenue data collection.
See Consolidated Reporting Order, 14 FCC Rcd at 16612-13, ¶ 18.
All carriers providing interstate telecommunications services
(including, but not limited to, cellular telephone and paging,
mobile radio, operator services, personal communications service,
access, alternative access and special access, packet-switched,
WATS, 800, 900, message telephone, private line, telex,
telegraph, video, satellite, international, intraLATA, and resale
services) are required to contribute to the TRS Fund on the basis
of the interstate portion of their services. TRS III Order, 8
FCC Rcd at 5302, ¶ 12. See also Consolidated Reporting Order, 14
FCC Rcd at 16630-34, ¶¶ 59-67.
34According to NECA's records, on September 3, 2002, Globcom was
billed $149.87, which was paid. Globcom was billed $100.00 for
a late filing penalty, which was also paid. On November 3, 2002,
Globcom was billed $4,000 for a 2002 adjustment, after Globcom
revised its Annual Worksheet. On July 7, 2003, Globcom was
billed $7,729.14, for 2003. This amount became past due July 29,
2003. Globcom's balance due is $11,729.14, plus late payment
charges, for a total past due amount of $11,928.14. See Letter
from Maripat Brennan, Manager, NECA to William Davenport, Deputy
Chief, Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission, dated August 18, 2003 (``NECA
Letter'').
35See Letter from Maureen Del Duca, Acting Division Chief,
Investigations and Hearings Division, Enforcement Bureau, FCC, to
Glenn Kofman, Globcom, Inc., dated January 13, 2003 (``January
13th FCC Letter''). The return receipt was signed on January 22,
2003.
36See Letter from Maureen Del Duca, Chief, Investigations and
Hearings Division, Enforcement Bureau, FCC, to Glenn Kofman,
Globcom, Inc., dated February 20, 2003 (``February 20th FCC
Letter''). We have serious concerns about Globcom's apparent
lack of cooperation with this investigation. The Bureau mailed
its LOI via certified mail, return receipt requested, on January
13, 2003. Globcom's response was due February 3, 2003; however,
the carrier did not respond to the LOI or return the Bureau's
telephone calls. On February 20, 2003, the Bureau sent a second
letter via facsimile and certified mail, return receipt
requested, directing Globcom to respond to the LOI and warning
that failure to respond to the LOI placed the carrier at risk of
FCC enforcement action. After receipt of this letter, Globcom
employee Joe Vitale called Bureau staff on February 26, 2003.
Mr. Vitale indicated that he would respond to the LOI and would
forward at least some of the requested documents ``immediately.''
After waiting a week for Globcom's response, Bureau staff called
and left a message for Mr. Vitale at Globcom offices on March 5,
2003; the call was not returned. On March 20, 2003, the Bureau
received an incomplete response to the LOI. On April 16, 2003,
the Bureau received additional information from Globcom,
supplementing the initial response to the LOI. This type of
dilatory and noncompliant conduct may give rise to sanctions in
future cases.
37See Letter from Joseph A. Vitale, Chief Operating Officer,
Globcom, Inc. to Mika Savir, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission
(Mar. 14, 2003) (``Globcom March 14, 2003 Letter''); Letter from
Glenn Kofman, CEO, Globcom, Inc. to Mika Savir, Investigations
and Hearings Division, Enforcement Bureau, Federal Communications
Commission (Apr. 16, 2003) (``Globcom April 16, 2003 Letter'').
3847 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1); see also 47
U.S.C. § 503(b)(1)(D) (forfeitures for violation of 14 U.S.C. §
1464). 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. §
312(f)(1). The legislative history to section 312(f)(1) of the
Act indicates that this definition of willful 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 term in the section 503(b) context. See, e.g., Application
for Review of Southern California Broadcasting Co., Memorandum
Opinion and Order, 6 FCC Rcd 4387, 4388 (1991) (``Southern
California Broadcasting''). The Commission may also assess a
forfeiture for violations that are merely repeated, and not
willful. See, e.g., Callais Cablevision, Inc., Grand Isle,
Louisiana, Notice of Apparent Liability for Monetary Forfeiture,
16 FCC Rcd 1359 (2001) (``Callais Cablevision'') (issuing a
Notice of Apparent Liability for, inter alia, a cable television
operator's repeated signal leakage). ``Repeated'' means that the
act was committed or omitted more than once, or lasts more than
one day. Southern California Broadcasting, 6 FCC Rcd at 4388, ¶
5; Callais Cablevision., 16 FCC Rcd at 1362, ¶ 9.
3947 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).
40See, e.g., SBC Communications, Inc., Apparent Liability for
Forfeiture, Forfeiture Order, 17 FCC Rcd 7589, 7591, ¶ 4 (2002).
41This NAL is independent of any collection action pursued by
USAC, NECA, or the Commission for Globcom's outstanding balance.
4247 U.S.C. § 254(d).
4347 C.F.R. § 54.706(b). See also 47 C.F.R. § 54.709
(describing method for determining carrier contributions to the
universal service fund).
4447 C.F.R. § 54.713.
45The Commission's rules specifically include resellers of
interstate services in the definition of providers of interstate
telecommunications services that must contribute to the fund. 47
C.F.R. § 54.706(a)(16).
46See Globcom March 14, 2003 Letter.
47USAC has no record of such payments, except for a single late
payment fee. Globcom has produced no documentation of the
asserted payments.
48See USAC Letter.
49This amount could be significantly higher once Globcom
corrects its revenue information.
50See, e.g., Sixth Report and Order, 15 FCC Rcd at 1687, ¶ 18;
Further Notice, 15 FCC Rcd at 19954, ¶ 17; Streamlined Reporting
Requirements Order, 17 FCC Rcd at 24971-72, ¶ 35; Second
Reconsideration Order, 12 FCC Rcd at 22425, ¶ 3.
51See, e.g., Intellicall Operator Services, Notice of Apparent
Liability for Forfeiture, 15 FCC Rcd 13539, 13541-42, ¶¶ 7-10
(2000) (``Intellicall'').
5247 C.F.R. § 64.604(c)(5)(iii)(A). This section specifically
includes carriers -- like Globcom -- that provide resale
services. Id.
5347 C.F.R. § 64.604(c)(5)(iii)(B).
54Id.
55Id.
56The 2002 invoice for $4000 sent to Globcom on November 3, 2002
is past due. NECA sent the 2003 invoice on July 7, 2003, which
became past due on July 29, 2003.
5747 C.F.R. §§ 54.711, 54.713. Section 54.711(a) provides, in
part:
An officer of the contributor must certify to the
truth and accuracy of the Telecommunications
Reporting Worksheet, and the Commission or the
Administrator may verify any information contained
in the Telecommunications Reporting Worksheet at the
discretion of the Commission. Inaccurate or
untruthful information contained in the
Telecommunications Reporting Worksheet may lead to
prosecution under the criminal provisions of Title
18 of the United States Code. [USAC] shall advise
the Commission of any enforcement issues that arise
and provide any suggested response.
47 C.F.R. § 54.711(a).
58See Globcom's 2001 Annual Worksheet at 5. Globcom did not
disaggregate its 2000 revenue into interstate and international
revenues, so we refer to them as generally ``long-distance
revenues.''
59See Globcom's 2002 Annual Worksheet at 5.
60See Globcom April 16, 2003 Letter. Globcom disaggregated the
year 2000 revenues as $1,586,299 for interstate and $6,345,197
for international. This disaggregation was omitted from the
Annual Worksheet. Globcom's 2000 federal tax return lists
$5,835,818 in gross revenues. Globcom's 2001 federal income tax
return lists gross revenues of $21,406,048.
61$7,931,497 (2000 revenue, per LOI) - $5,835,818 (2000 revenue,
per 2001 Annual Worksheet) = $2,095,679 underreported revenue.
62$21,099,070 (2001 revenue, per LOI) - $5,187,343 (2001
revenue, per 2002 Annual Worksheet) = $16,218,705 underreported
revenue.
63Under section 503(b)(6) of the Act and section 1.80(c)(3) of
the Commission's rules, the statute of limitations for this
violation is one year. 47 U.S.C. § 503(b)(6); 47 C.F.R. §
1.80(c)(3). Therefore, as discussed below, we will only impose a
forfeiture for the revised 2002 Annual Worksheet, which Globcom
filed on October 10, 2002.
64See 47 C.F.R. §§ 54.711, 54.713.
65On October 10, 2002, Globcom filed a Quarterly Worksheet for
third quarter 2002, which it subsequently revised on January 27,
2003. Globcom filed a Quarterly Worksheet for fourth quarter
2002 on February 13, 2003.
66The Bureau's LOI requested, among other things, copies of
Globcom's Annual and Quarterly Worksheets, also known as ``Form
499s.'' In the Globcom March 14th Letter, Globcom stated that it
was enclosing the Annual Worksheets, but failed to do so. In the
Globcom April 16th Letter, Globcom stated that it ``cannot
provide the FCC with copies of Globcom's 499 forms.''
67In addition to the 2001 and 2002 instances discussed above,
Globcom failed to file the 2003 Annual Worksheet, the first
quarter 2003 Quarterly Worksheet (due May 1), and the second
quarter 2003 Quarterly Worksheet (due Aug. 1).
6847 U.S.C. § 503(b)(2)(B); see also 47 C.F.R. § 1.80(b)(2); see
also Amendment of Section 1.80(b) of the Commission's Rules,
Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 15
FCC Rcd 18221 (2000).
6947 U.S.C. § 503(b)(6). See also 47 C.F.R. § 1.80(c)(3).
7047 C.F.R. § 1.80(b)(4).
71See, e.g., ConQuest, 14 FCC Rcd at 12522, ¶ 9 (discussing the
monthly USAC invoices and the ``more than adequate notice of
ConQuest's universal service obligation'').
72ConQuest, 14 FCC Rcd at 12527, ¶ 19.
73Id. at 12528, ¶ 20.
74ATNC, 15 FCC Rcd at 20906, ¶ 9; Intellicall, 15 FCC Rcd at
13541, ¶ 7; Matrix, 15 FCC Rcd at 13546-47, ¶ 8.
75See, e.g., Intellicall, 15 FCC Rcd at 13542, ¶ 10.
76See ConQuest, 14 FCC Rcd at 12518, ¶ 1.
77See 47 U.S.C. § 503(b)(6) (establishing a one-year statute of
limitations for non-broadcast forfeiture actions). See also 47
C.F.R. § 1.80(c)(3).
78ConQuest, 14 FCC Rcd at 12527, ¶ 19.
79See, e.g., ATNC, 15 FCC Rcd at 24393, ¶ 7; Intellicall, 15 FCC
Rcd at 13541-42, ¶¶ 7-8; Matrix, 15 FCC Rcd at 13546-47, ¶¶ 7-8;
PTT Telekom, 16 FCC Rcd at 7479, ¶ 7.
80Matrix, 15 FCC Rcd at 13546-47, ¶ 8.
81 $10,000 for each of the two violations, plus $5,943 (half of
the unpaid balance) is $25,943.
8247 C.F.R. § 1.80(4).
8347 C.F.R. § 1.80(b)(4), Note to paragraph (b)(4): Section II.
Adjustment Criteria for Section 503 Forfeitures; Forfeiture
Policy Statement, 12 FCC Rcd at 17117, Appendix A, Section II.
8447 C.F.R. § 54.711(a).
85We note that our action is independent of any criminal
prosecution that might be brought ``under the criminal provisions
of Title 18 of the United States Code.'' 47 C.F.R. § 54.711(a).
See, e.g., 18 U.S.C. § 1001.
86As discussed above, Globcom failed to file the 2003 Annual
Worksheet and the first and second quarter 2003 Quarterly
Worksheets.
87See infra note 18. We note that some of the Worksheets
submitted by Globcom were filed late. Carriers must submit their
quarterly Worksheet no later than February 1, May 1, August 1,
and November 1 of each year. See Quarterly Worksheet Form at 1.
Carriers must submit their Annual Worksheets no later than April
1 of each year. As described above, Globcom filed its 2001 Annual
Worksheet on May 7, 2002 and its 2002 Annual Worksheet on August
6, 2002 (amended October 10, 2002). Late filing of revenue
information harms the universal service fund because USAC and the
Commission cannot accurately project the contribution base for
the upcoming quarter with incomplete revenue information. Globcom
and other carriers should note that we may assess forfeitures for
late filing in future enforcement actions.
88See NOS Communications, Inc., Affinity Network Incorporated
and NOSVA Limited Partnership, Order to Show Cause, Notice of
Opportunity for Hearing, 18 FCC Rcd 6952 at ¶ 27 (2003); Business
Options, Inc., Order to Show Cause and Notice of Opportunity for
Hearing, 18 FCC Rcd 6881 at ¶ 36 (2003).
89See 47 C.F.R. § 1.1914.