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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-00-IH-0241
) TRS Company Code: 811135
Advanced Telecom. Network, Inc. ) NAL/Acct. No.
200132080020
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: February 28, 2001 Released: March 2,
2001
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for
Forfeiture ("NAL"), we find that Advanced Telecom. Network,
Inc. (``Advanced'') has apparently violated 47 U.S.C. §
254(d) and 47 C.F.R. § 54.706 by willfully and repeatedly
failing to contribute to universal service support programs.
Based on our review of the facts and circumstances in this
case, we conclude that Advanced is apparently liable for a
forfeiture in the amount of $46,700.
II. BACKGROUND
2. In 1996, Congress amended the Communications Act
of 1934 (the ``Act'') to require 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.1
In implementing that section, the Commission authorized the
Universal Service Administrative Company (``USAC'') to
administer universal service support mechanisms and to
perform billing and collection functions.2 As to these
matters, the Commission directed USAC to distribute, receive
and process the Universal Service Worksheet (now the
Telecommunications Reporting Worksheet) (``Worksheet''),
which is used to report certain categories of revenue for
the purpose of calculating a carrier's universal service
contribution, and to adjust carriers' contributions in
accordance with factors established by the Commission.3 In
addition, the Commission gave USAC the authority to bill
carriers monthly, with the first payment being due in
February 1998.4 To foster compliance with universal service
requirements, the Commission's rules provide that a
carrier's failure ``to submit required . . . contributions
may subject the contributor to the enforcement provisions of
the Act and any other applicable law.''5
3. Advanced filed its first Worksheet on September
23, 1997. Based upon information in the Worksheet, USAC
sent ATN an invoice dated January 19, 1998, which set forth
Advanced's liability to the universal service funds for high
cost and low income areas, school and libraries, and rural
health care. The amount billed was $5,935.28. USAC
thereafter sent out monthly invoices to Advanced. On April
20, 1998, Advanced submitted a payment of $11,870.56
covering its required contributions for January and February
1998. Through the rest of 1998 and continuing through
September 1999, Advanced made additional payments, which met
its obligations only through March 1999. In calendar year
2000, Advanced made but one payment, in August, of
$8,900.78, which USAC credited to the amount billed to
Advanced in April 1999. Because of Advanced's chronic
tardiness in submitting universal service contributions
since March 1998, USAC has repeatedly alerted Advanced that
its account was past due.
4. On August 7, 2000, the Enforcement Bureau sent a
letter to Advanced, which explained that Advanced was
potentially the subject of an enforcement action.6 Advanced
failed to respond to our letter.7 As of February 2001,
Advanced owes a balance of approximately $266,000, which
represents required contributions and late payment penalties
billed through December 2000.
III. DISCUSSION
5. We conclude that Advanced is apparently liable for
forfeiture for willful and repeated violations of 47 U.S.C.
§ 254 and the Commission's rules governing universal service
contributions. Prior to September 1999, Advanced paid some,
but not all, of its required universal service
contributions. From October 1999 to the present, Advanced
has made one payment of less than $9,000. Consequently,
Advanced is more than a year in arrears and its unpaid
contribution balance has grown to more than $260,000. As
noted above, 47 U.S.C. § 254(d) and 47 C.F.R. §§ 54.706 and
54.709 require that interstate telecommunications carriers
make universal service contributions in the amounts
calculated by USAC. Advanced has not done so, and we find
that Advanced's failures to make the required contributions
are both willful and repeated. The term ``willful'' means
that the violator knew that it was taking the action in
question, irrespective of any intent to violate the
Commission's rules,8 and ``repeated'' means more than once.9
Considering the record before us, it appears that Advanced
knew of its obligation to contribute to universal service
programs on a monthly basis but chose repeatedly not to meet
that obligation.
6. Section 503(b)(1)(B) of the Act provides that any
person who willfully or repeatedly fails to comply with the
Act or the Commission's rules shall be liable for a
forfeiture penalty.10 If the violator is a common carrier,
47 U.S.C. § 503(b)(2)(B) authorizes the Commission to assess
a forfeiture of up to $110,000 for each violation, or each
day of a continuing violation, up to a statutory maximum of
$1,100,000 for a single act or failure to act.11 In
assessing a forfeiture, 47 U.S.C. § 503(b)(2)(D) requires us
to consider 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.12
7. Taking into account the statutory factors, as well
as Commission precedent, we find Advanced apparently liable
for a forfeiture of $46,700. This forfeiture consists of
two components. First, we have assessed a base figure of
$40,000, $20,000 for each of two apparent violations, i.e.,
the failures to pay the November and December 2000
invoices.13 The Commission established such a base figure
in order to deter delinquencies regardless of their
amount.14 Second, consistent with recent Commission actions
in this area, 15 we have added an amount that is
approximately one half of the unpaid universal service
contributions for two representative months. In this case,
we have chosen the months of November and December 2000,
which results in an addition of $6,700 to the base figure.
This second component of the forfeiture illustrates 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 contributions it fails to make.16
8. Although Advanced's failures to pay its
contributions in months other than November and December
2000 represent separate violations of the Act and our rules,
we do not find apparent liability for these apparent
violations at this time. Nevertheless, we warn Advanced
that these violations could form the basis for additional
notices of apparent liability.17 If Advanced continues to
violate our universal service rules, such violations could
result in future NALs proposing substantially greater
forfeitures, or could result in issuance of a show cause
order to revoke Advanced's operating authority.18
IV. ORDERING CLAUSES
9. Accordingly, IT IS ORDERED THAT, pursuant to 47
U.S.C. § 503(b), and 47 C.F.R. § 1.80, Advanced Telecom.
Network, Inc. is hereby NOTIFIED of its APPARENT LIABILITY
FOR A FORFEITURE in the amount of forty-six thousand seven
hundred dollars ($46,700) for violating the Act and the
Commission's rules requiring regular contributions for
universal service.
10. IT IS FURTHER ORDERED THAT, pursuant to 47 C.F.R.
§ 1.80, within thirty days of this NOTICE OF APPARENT
LIABILITY, Advanced Telecom. Network, Inc. SHALL PAY the
full amount of the proposed forfeiture or SHALL FILE a
written statement seeking reduction or cancellation of the
proposed forfeiture.
Payment of the forfeiture may be made by mailing a check or
similar instrument, payable to the order of the Federal
Communications Commission, to the 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.
11. The response, if any, must be mailed to Charles W.
Kelley, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W, Room 3-B443, Washington DC 20554 and MUST
INCLUDE the file number listed above.
12. 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.
13. Requests for payment of the full amount of this
Notice of Apparent Liability under an installment plan
should be sent to: Chief, Revenue and Receivables Operations
Group, 445 12th Street, S.W., Washington, D.C. 20554. See
47 C.F.R. § 1.1914. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
Liability for Forfeiture shall be sent by Certified
Mail/Return Receipt Requested, to Phillip Krieger, Advanced
Telecom. Network, Inc., 4 Executive Campus, Suite 200,
Cherry Hill, New Jersey 08002.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 47 U.S.C. § 254(d).
2 See Amendment of Parts 54 and 69 - Changes to Board of
NECA, Inc., 12 FCC Rcd 18400, 18415 (1997) (``NECA Changes
Order''); 47 C.F.R. § 54.702(b).
3 See NECA Changes Order, 12 FCC Rcd at 18424-25; 47 C.F.R.
§§ 54.709(a)(1-3), 54.711(a).
4 See Amendment of Part 54 - Universal Service, 12 FCC Rcd
22423, 22425 (1997); 47 C.F.R. § 54.709(a)(4-5).
5 47 C.F.R. § 54.713.
6 Letter from David H. Solomon, Chief, Enforcement Bureau,
to Advanced Telecom. Network, Inc. dated August 7, 2000.
7 The Enforcement Bureau mailed the August 7, 2000 letter
to Advanced certified mail, return receipt requested. The
return receipt reflects that Advanced received the Bureau's
letter on August 10, 2000.
8 See Jerry Szoka, 14 FCC Rcd 9857, 9865 (1999); Southern
California Broadcasting Co., 6 FCC Rcd 4387 (1991).
9 See Hale Broadcasting Corp., 79 FCC 2d 169, 171 (1980).
10 47 U.S.C. § 503(b)(1)(B). See also 47 C.F.R. §
1.80(a)(2). Recently, the Commission amended section
1.80(b) of its rules to increase the maximum penalties that
may be imposed. Accordingly, for a common carrier, the
forfeiture limit for each violation is now $120,000, with a
maximum potential forfeiture of $1,200,000 for a continuing
violation involving a single act or failure to act. See
Amendment of Section 1.80(b) of the Commission's Rules, 15
FCC Rcd 18221 (2000).
11 See also 47 C.F.R. § 1.80(b)(2).
12 See also The Commission's Forfeiture Policy Statement
and Amendment of Section 1.80 of the Rules to Incorporate
the Forfeiture Guidelines, 12 FCC Rcd 17087, 17100-01
(1997), recon. denied, 15 FCC Rcd 303 (1999) (``Forfeiture
Guidelines'').
13 See ConQuest Operator Services Corp., 14 FCC Rcd 12518,
12527 (1999) (``ConQuest Forfeiture Order'') (The Commission
determined that $20,000 should be the general base amount
for failure to pay the assessed universal service
contribution in a timely manner).
14 See id.
15 See America's Tele-Network Corp., 15 FCC Rcd 20903
(2000) (Notice of Apparent Liability), 15 FCC Rcd 24391
(2000) (Forfeiture Order); Intellicall Operator Services, 15
FCC Rcd 15359 (2000) (Notice of Apparent Liability), 15 FCC
Rcd 21771 (2000) (Forfeiture Order); Matrix Telecom, Inc.,
15 FCC Rcd 15344 (2000) (Notice of Apparent Liability), FCC
01-48, released February 20, 2001 (Forfeiture Order). See
also North American Telephone Network, LLC, 15 FCC Rcd 14022
(Enf. Bureau 2000) (Notice of Apparent Liability).
16 See ConQuest Forfeiture Order, 14 FCC Rcd at 12527.
17 ConQuest Forfeiture Order, 14 FCC Rcd at 12527.
18 See CCN, Inc. et al., 12 FCC Rcd 8547 (1997) (the
``Fletcher Companies'').