Click here for Adobe Acrobat version
Click here for Microsoft Word version

******************************************************** 
                      NOTICE
********************************************************

This document was converted from Microsoft Word.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.

*****************************************************************



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




In the Matter of                 )
                                )
BroadStreet Communications,      )
Inc.                             )    File No. EB-02-TC-001
                                )
                                )    NAL/Acct. No. 20023217-0001
Apparent Liability for           )
Forfeiture                       )
                                )


           NOTICE OF APPARENT LIABILITY FOR FORFEITURE

   Adopted:  April 26, 2002             Released:  April 29, 2002

By the Chief, Enforcement Bureau:

                    I.   INTRODUCTION

     1.   In this  Notice of  Apparent Liability  for  Forfeiture 
(``NAL''),1  we  find   that  BroadStreet  Communications,   Inc. 
(``BroadStreet'')2 apparently  willfully or  repeatedly  violated 
section 214(a) of the Communications Act of 1934, as amended (the 
``Act''),3 and sections  63.61, 63.63, 63.71,  and 63.505 of  the 
Commission's rules4  by  discontinuing  its  domestic  interstate 
access service in Baltimore, Maryland, and Norfolk, Virginia,  as 
well as  all  of  its long  distance  service,  before  receiving 
authorization to do so from the Commission. Based upon our review 
of  the  facts  and  circumstances  surrounding  these   apparent 
violations, we find that BroadStreet  is apparently liable for  a 
forfeiture in the  amount of  five thousand  dollars ($5000)  for 
each violation,  resulting  in  a total  proposed  forfeiture  of  
$15,000.5

                         II.  BACKGROUND

     2.   BroadStreet  is  a   non-dominant  provider  of   local 
exchange,  exchange  access,  resold  long  distance,  and   data 
services in  twelve states.  BroadStreet Communications,  L.L.C., 
the parent organization,  is a limited  liability company,  under 
which  limited  unitholders   were  required   to  make   capital 
contributions  upon  call   by  the   management.  According   to 
BroadStreet, on  November  1,  2001,  one  of  its  three  equity 
investors refused to make the required capital contribution,  and 
the  other  equity   investors  advised  they   would  not   fund 
BroadStreet unless another investor  was found who would  replace 
the contribution of the first investor.6 If they refused to  make 
While management sought to continue BroadStreet's operations, the 
three equity investors advised on December 7, 2001, that  because 
BroadStreet was at or near insolvency absent additional  funding, 
the company had to wind down operations. As a result, BroadStreet 
received from its equity investors $450,000 to ensure  transition 
time  for  BroadStreet's  customers  and  provide  time  for  the 
necessary Federal and state regulatory approvals, as well as  for 
liquidation  by   BroadStreet's  senior   secured  creditor   and 
dissolution of the  BroadStreet companies.7 As  of the middle  of 
February, there were only four BroadStreet employees who would be 
paid for  approximately one  more month.8  Despite  BroadStreet's 
alleged financial  insolvency,  the  company has  stated  to  the 
Commission that it does not intend to file for bankruptcy.9

     3.   As a result of these funding decisions, on December  7, 
2001,  Broadstreet  ceased paying  its bills  to the  facilities-
based providers  whose services  BroadStreet resold.  Once  those 
carriers became  aware  of  BroadStreet's  situation,  they  were 
reluctant to continue service to BroadStreet; the intervention of 
the Virginia  and Maryland  State Commissions  persuaded some  of 
these carriers to continue service for a short period of  time.10 
BroadStreet terminated long distance service on or about December 
7, 2001.   BroadStreet  terminated  local  service  and  exchange 
access in Baltimore, Maryland on December 13, 2001, resulting  in 
a loss of  service on  583 lines.   BroadStreet terminated  local 
service and exchange access in  Norfolk, Virginia, first for  one 
day on December  18, 2001,  and then permanently  on January  11, 
2002, resulting in a loss of service on 781 lines.11

     4.   After  being   contacted  by   the  Commission   staff, 
BroadStreet filed with  the Commission on  December 18, 2001,  an 
application  for  discontinuance   of  all   of  its   interstate 
services.12  The  Commission  staff  issued a  Public  Notice  on 
December  19,  2001,13  and  the  application  was  automatically 
granted on January  19, 2002.   By that date,  however, all  long 
distance service had been terminated, and exchange access service 
had been terminated  in Baltimore and  Norfolk.14  As of  January 
24, 2002, 421, or 72% of the Baltimore lines, and 675, or 86%  of 
the Norfolk lines, had been transferred to other carriers.15   It 
is not known whether the  remaining 268 lines in those  locations 
were abandoned  by  the  customers or  whether  they  represented 
customers who lost all service.16

                         II. DISCUSSION

     I.A.      Violations Evidenced in the Record

     5.   BroadStreet's  responses  to   our  staff's   inquiries 
establish that  BroadStreet did  not meet  its obligations  as  a 
common carrier to seek Commission approval before it discontinued 
service, in apparent violation of  section 214(a) of the Act  and 
the relevant Commissionsections 63.61,  63.71, and 63.505 of  the 
Commission's rules.  Section 214(a) has an essential role in  the 
Commission's efforts to protect consumers.  Unless the Commission 
has the ability to determine whether a discontinuance of  service 
is in  the  public interest,  it  cannot protect  customers  from 
having essential services  cut off without  adequate warning,  or 
ensure that these customers have other viable alternatives.17  We 
therefore intend to  strictly enforce section  214 and our  rules 
regarding prior authorization of discontinuances. 

     6.   BroadStreet should have filed for authorization as soon 
as it  knew  that  discontinuance would  be  required.   Although 
BroadStreet contends that  it had  no choice  but to  discontinue 
service when it did, it  appears that the deadlines were  imposed 
by BroadStreet's Board of Directors, and were not long enough  to 
permit  expeditious   Commission  action   on  a   discontinuance 
application,  BroadStreet knew by November 1, 2002,2001, that  it 
might have to discontinue service, and it should have anticipated 
thehave made a timely  decision to seek  such approvals based  on 
the anticipated length of time it would take to notify  customers 
and obtain regulatory approvals for the discontinuances.  Instead 
it waited until  December 18, 20022001  to file its  application, 
after it  had already  discontinued  service to  some  customers. 
Further, BroadStreet's  actions  were apparently  caused  by  the 
actions of  its  own limited  unitholders.   WhileAlthough  these 
limited unitholders aremay be  protected by their agreement  from 
liability for the actions  of the Company, that  is no reason  to 
allowcompany,18 BroadStreet nonetheless had legal obligations  to 
to avoid its obligations.notify  customers and obtain  Commission 
approval before discontinuing service.  In view of the  foregoing 
discussion,facts,  it  appears  that  BroadStreet  willfully   or 
repeatedly discontinued service without Commission  authorization 
in violation of  section 214(a)  of the Act  and sections  63.61, 
63.71, and 63.505 of the Commission's rules. 

     I.B.      Forfeiture Amount

     7.   The forfeiture guidelines  establish a base  forfeiture 
amount of $5000 per violation for unauthorized discontinuance  of 
service.19 Service wasBroadStreet first discontinued service  for 
long distance, then for exchange access in Baltimore, and finally 
for exchange access  in Norfolk.  SinceBecause  there were  three 
violations,  i.e.,  unauthorized  discontinuances  of  long   for 
Baltimore, Norfolk,  and long  distance,distance service  and  of 
exchange access service in these two locations, this results in a 
total proposed forfeiture of $7500.$15,000. 

                                        III.    CONCLUSION    AND 
ORDERING CLAUSES

     8.   We have determined that BroadStreet apparently violated 
section 214(a)  of the  Communications  Act and  sections  63.61, 
63.71,  and  63.505  of  the  Commission's  regulationsrules   by 
discontinuing  service  on   three  separate  occasions   without 
Commission authorization,  as described  above. We  have  further 
determined that BroadStreet is apparently liable for  forfeitures 
in the amount of $5000 for each of the violations, resulting in a 
total forfeiture amount of $15,000.

     9.   Accordingly, IT IS ORDERED, pursuant to section  503(b) 
of the  Communications  Act of  1934,  as amended,  47  U.S.C.   
503(b), section 1.80 of the Commission's rules, 47 C.F.R.  1.80, 
and authority  delegated by  section  0.311 of  the  Commission's 
rules, 47 C.F.R. 0.311, that BroadStreet Communications, Inc. IS 
HEREBY NOTIFIED of  an Apparent Liability  for Forfeiture in  the 
amount of $15,000 for willful  or repeated violations of  section 
214(a) of the Act20 and sections 63.61, 63.63, 63.71, and  63.505 
of the Commission's rules as described in the paragraphs above.21

     10.  IT IS FURTHER ORDERED, pursuant to section 1.80 of  the 
Commission's rules, 47  C.F.R.   1.80, that  within thirty  (30) 
days of  the  release  of  this  Notice  of  Apparent  Liability, 
BroadStreet Communications, Inc. SHALL PAY the full amount of the 
proposed forfeiture22 OR  SHALL FILE a  response showing why  the 
proposed forfeiture should not be imposed or should be reduced.

     11.  IT IS FURTHER  ORDERED that  copies of  this Notice  of 
Apparent Liability for Forfeiture SHALL BE SENT by certified mail 
to Philip M.  Fraga, Senior Vice  President and General  Counsel, 
BroadStreet Communications,  Inc.,  601 Technology  Drive,  Suite 
300, Southpointe, Canonsburg, Pennsylvania 15317.


                       FEDERAL COMMUNICATIONS COMMISSION



                             David H. Solomon
                                     Chief, Enforcement Bureau
 
_________________________

1 See  47 U.S.C.   503(b)(4)(A).  The Commission  has  authority 
under this  section of  the Act  to assess  a forfeiture  penalty 
against a common  carrier if the  Commission determines that  the 
carrier has ``willfully or repeatedly'' failed to comply with the 
provisions of  the Act  or with  any rule,  regulation, or  order 
issued by the  Commission under  the Act.   The section  provides 
that the Commission must assess such penalties through the use of 
a written notice of apparent liability.
2 BroadStreet is  otherwise known as  Net Impact  Communications, 
Inc. and is a subsidiary of BroadStreet Communications  Holdings, 
Inc., which  is thea  subsidiary of  BroadStreet  Communications, 
L.L.C.  ItBroadStreet  Communications,  Inc. is  also  affiliated 
with BroadStreet  Communications of  Virginia, L.L.C.   Its  main 
office is at  601 Technology Drive,  Southpointe, Canonsburg,  PA 
15317.  Randolph S. Fowler is Chairman and CEO; Thomas W. Cady is 
President and COO; and Philip  M. Fraga is Senior Vice  President 
and General Counsel. BroadStreet has blanket operating  authority 
from the  Commission  under  sections  63.01  and  63.02  of  the 
Commission's rules, 47 C.F.R.  63.01, 63.02. 
3 47 U.S.C.   214(a).  This section  provides in pertinent  part 
that ``[n]o carrier shall discontinue, reduce, or impair  service 
to a community, or part of a community, unless there shall  first 
have been obtained from the Commission a certificate that neither 
the present nor future public  convenience and necessity will  be 
adversely affected thereby; except that the Commission may,  upon 
appropriate request being made, authorize temporary or  emergency 
discontinuance, reduction, or impairment  of service, or  partial 
discontinuance, reduction, or impairment of service....''
4 47 C.F.R.  63.61, 63.63, 63.71, 63.505.
5 See 47 U.S.C.  503(b)(2)(B); 47 C.F.R.  1.80(b)(2). 
6  Letter  dated  February  19,  2002,  from  Philip  M.   Fraga, 
BroadStreet, to Peter G. Wolfe, FCC (``BroadStreet Letter'').
7BroadStreet Letter.
8 Id.
9 Id.
10 Id.
11 Id.
12  An  application  had  been  filed  on  October  9,  2001   to 
discontinue service in  Roanoke, Virginia,  and this  application 
was granted on November 28,  2001, before service was  terminated 
there.
13   Public   Notice,    ``Comments   Invited   on    BroadStreet 
Communications, Inc. and BroadStreet Communications of  Virginia, 
LLC  Application  to   Discontinue  Domestic   Telecommunications 
Services,'' NSD File No. W-P-D-551, DA 01-2972.
14  Local  service  and  exchange  access  in  Washington,  D.C., 
Pittsburgh,  Pennsylvania,   and  Richmond,   Virginia  was   not 
terminated until after  the Commission authorized  discontinuance 
on January 19, 2002.
15 BroadStreet Letter.
16  Our  staff  held  a  telephone  conference  with  BroadStreet 
employees, including its Vice  President and General Counsel,  on 
January 8, 2002, and sent a  letter of inquiry to BroadStreet  on 
January 23, 2002.  BroadStreet filed  a response on February  19, 
2002.

17  See   Implementation   of   Section   402(b)(2)(A)   of   the 
Telecommunications Act of  1996 and Petition  for Forbearance  of 
the Independent Telephone  & Telecommunications Alliance,  Report 
and Order in CC Docket No.97-11 and Second Memorandum Opinion and 
Order in AAD File No. 98-43, 14 FCC Rcd 11364, 11380-81 (1999).
18  According  to   the  company's   Limited  Liability   Company 
Agreement, if unitholders refuse to make contributions, the  only 
remedy is to deprive  them of their voting  rights and rights  as 
members of the Board of Directors,  and to permit the company  to 
repurchase  their  units.  See  BroadStreet  Letter,  Attachment, 
Second Amended and Restated  Limited Liability Company  Agreement 
(May 30, 2001).
19 47 C.F.R.  1.80.
20 47 U.S.C.  214(a).
21 47 C.F.R.  63.61, 63.63, 63.71, 63.505.
22 The forfeiture amount should be  paid by check or money  order 
drawn to  the order  of  the Federal  Communications  Commission.  
Reference should be  made on  BroadStreet Communications,  Inc.'s 
check or money  order to ``NAL/Acct.  No. 20023217-0001.''   Such 
remittances must  be  mailed to  Forfeiture  Collection  section, 
Finance  Branch,  federal  Communications  Commission,  P.O.  Box 
73482, Chicago, Illinois 60673-7482.