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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
World Communications )
Satellite Systems, Inc. ) File No. EB-03-TC-038
)
) NAL/Acct. No. 200332170006
Apparent Liability for ) FRN: 0009553652
Forfeiture )
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: September 8, 2003 Released: September 9,
2003
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for
Forfeiture (``NAL''),1 we find that World Communications
Satellite Systems, Inc. (``WCSS'') apparently willfully and
repeatedly violated a Commission order by failing to respond to a
directive of the Enforcement Bureau (``Bureau'') to provide
certain information and documents. Upon our review of the facts
and circumstances surrounding this apparent violation, we find
that WCSS is apparently liable for a forfeiture in the amount of
$10,000.
II. BACKGROUND
2. On July 15, 2003, the Bureau sent a
Letter of Inquiry to WCSS, noting that it was investigating
allegations that WCSS may have engaged in the unauthorized
conversion of a consumer's telephone service, commonly referred
to as ``slamming,'' and directing WCSS to provide information and
documents specified in the Letter.2 The information that the
Bureau directed WCSS to provide related to whether WCSS had
changed the preferred carrier for 19 consumers. The Letter also
directed WCSS to provide the telemarketing scripts that were
used, documents related to verification of the customers'
requests that their carrier be changed, WCSS's corporate
structure, WCSS's procedures to evaluate the performance of its
telemarketing employees, and information relating to alleged
misrepresentations made by these employees to customers. The
response to the Letter of Inquiry was due 30 days after the
Bureau sent the Letter, i.e., by August 14, 2003. On July 28,
2003, WCSS submitted a request under the Freedom of Information
Act (``FOIA'') for Commission records related to the complaints
specified in the July 15 Letter of Inquiry.3 On August 4, 2003,
counsel for WCSS requested an extension of the time to respond to
the Letter of Inquiry until September 1, 2003, so that WCSS could
review the response to the FOIA request before it filed the
response to the Letter of Inquiry.4 The Bureau granted the
extensions, first to August 22 and then to August 27.5 On August
14, the Bureau responded to the FOIA request, withholding certain
documents on the ground that release would interfere with the
ongoing investigation pursuant to FOIA exemption 7(A).6 On
August 22, WCSS counsel sent an E-Mail objecting to the
withholding of documents and requesting a further extension of
the time to respond to the Letter of Inquiry until the dispute
concerning the FOIA request had been resolved or the time for
filing an appeal of the FOIA response had run.7 The Bureau
denied the request for a further extension of time.8
3. On August 27, 2003, WCSS submitted a letter to
the Bureau9 outlining reasons why WCSS believed it did not need
to provide any of the information or documentation the Bureau
directed it to provide. WCSS argued that the Commission had no
jurisdiction to conduct the investigation on the grounds that the
complaints in question had been fully resolved by state agencies,
except for one complaint to the Commission for which it had
provided the Commission with all relevant evidence in its
possession. It further argued that the failure of the Commission
to provide all information in the Commission's possession about
the case until the release of an NAL is unduly prejudicial,
because, in its view, the issuance of an NAL is tantamount to a
finding of liability. The only documents WCSS provided with its
response were letters it sent to state agencies and to the
Commission regarding informal complaints that had been filed by
the complainants. Some of these letters referenced verification
tapes, but no verification tapes were provided to the Bureau in
response to the Letter of Inquiry.
II. DISCUSSION
A. Apparent Violation Evidenced in the Record
4. As explained below, WCSS' apparent failure
to respond to the Letter of Inquiry evidences an apparent willful
or repeated violation of a Commission order.
5. The issue presented here is whether WCSS is
apparently liable for violating the Bureau's directive that it
respond to the Bureau's inquiries. This order was within the
Bureau's authority to issue, and, in any event, parties are
required to comply with Bureau orders even if they believe them
to be outside the Commission's authority.10 The letter submitted
by WCSS on August 27 did not provide the information and
documentation that the Bureau directed it to provide, and WCSS
has not complied with the order to date. Therefore, we find that
WCSS apparently committed a willful and repeated violation of a
Commission order.
6. The Commission has statutory authority to require
its regulatees to respond to Commission inquiries. In sections
4(i), 4(j), 208, 218, and 403 of the Act, Congress afforded us
broad authority to investigate regulated entities.11 This broad
investigative authority in these sections individually and
collectively encompasses the authority to obtain from carriers
information and documents. Section 218 of the Act authorizes us
to ``obtain from ... carriers ... full and complete information
necessary to enable the Commission to perform the duties and
carry out the objects for which it was created.'' This provision
plainly grants us broad investigative power. Section 403 also
gives the Commission broad authority to ``make and enforce
orders'' relating to the matter under investigation. Moreover, it
gives the Commission the same "powers and authority" in
conducting an investigation that it would have when investigating
a section 208 complaint. In this regard, section 208 says the
Commission can investigate such matters ``in such manner and such
means as it shall deem proper.'' 12 The broad authority in
sections 4(i) and 4(j) for the Commission to ``issue such orders
... as may be necessary in the execution of its functions'' and
to ``conduct its proceedings in such manner as will best conduce
to the proper dispatch of business and to the ends of justice''
further supports our authority to require the production of
information. It is well established that sections 4(i) and 4(j)
afford the Commission broad general authority and power, and the
Bureau's action here falls comfortably within the scope of that
authority as well. In sum, the Bureau was well within its
authority in requiring WCSS to provide information and documents
relevant to the investigation.13
7. WCSS argues that the failure of the Bureau to
provide all information in the Commission's possession about the
case until the release of an NAL is unduly prejudicial, because,
in its view, the issuance of an NAL is tantamount to a finding of
liability.14 WCSS's argument is essentially the same argument as
the Commission rejected in another slamming investigation in
which the defendant was represented by the same counsel as is
WCSS. In WebNet Communications, Inc,15 decided prior to WCSS's
refusal in this case to comply with the Bureau's order, the
Commission said:
WebNet claims that the issuance of the WebNet NAL
is equal to a ``conviction'' against which it never
had the opportunity to defend itself. This claim
reflects a fundamental misunderstanding of the
statutory framework under which the Commission
issues an NAL, and the nature of an NAL itself.
Section 503(b) of the Act allows the Commission to
assess a forfeiture penalty only after it releases
a notice of apparent liability, which cannot be the
basis for imposing a forfeiture penalty unless and
until the recipient is afforded an opportunity to
respond in writing. That section 503(b) does not
require the Commission to give a carrier an
opportunity to address allegations in consumer
complaints before issuing an NAL is, therefore, of
no legal significance...16
8. WCSS further argues that the Commission had no
jurisdiction to conduct the investigation on the grounds that the
complaints in question had been fully resolved by state agencies,
except for one complaint to the Commission for which it had
provided the Commission with all relevant evidence in its
possession.17 The Commission also considered and rejected this
argument in WebNet. As the Commission explained:
... WebNet misunderstands the distinction
between a slamming adjudication under our rules
and an enforcement action pursuant to section
503(b) of the Act. Sections 64.1150 through
64.1170 of the Commission's rules authorize
adjudicatory proceedings to bring financial
restitution to a consumer who has been slammed.
Although each slamming allegation is adjudicated
under those rules, that does not shield a
carrier from separate enforcement action like
this one, which stems from WebNet's willful or
repeated violations of section 258 of the Act
and section 64.1120 of our rules...18
...[W]hether the adjudication happens on a state
or federal level, the adjudication of slamming
complaints does not shield a carrier from
separate liability for separate enforcement
action based on those same complaints. The
forfeiture proposed by the WebNet NAL, however,
is separate and distinct from the restitution
WebNet has already paid to complainants (whether
at the state or federal level)...
... Furthermore, because state adjudication of
slamming complaints is separate from federal
enforcement action on the same complaints, this
proceeding does not place WebNet in double
jeopardy¾a concept which, in any case, does not
apply to civil administrative procedures such as
this monetary forfeiture process.19
9.For the reasons stated in WebNet, we find that WCSS's
argument that the Commission has no jurisdiction to conduct this
investigation has been previously considered by the Commission
and rejected. WCSS's argument that it requires the Commission's
response to its FOIA request before it can respond to the Letter
of Inquiry is apparently based on its misunderstanding that the
NAL is tantamount to a finding of liability, and therefore WCSS
needs all documents in the Commission's files before the NAL is
released. Again, we find that the Commission has determined that
this assumption is erroneous.20 Under the Communications Act, a
recipient of an order requiring a regulated company to provide
information must comply with the order as long as it shall be in
effect.21 In view of the foregoing facts, it appears that WCSS
willfully and repeatedly violated a Commission order.22 In view
of the WCSS's counsel's knowledge of the WebNet order, WCSS's
legal arguments appear to be frivolous and made for the purpose
of delay. For this reason, we find the apparent violation to be
egregious.
B. Forfeiture Amount
10. We conclude that WCSS apparently willfully
and repeatedly violated a Commission order by failing to provide
the information and documents the Bureau directed it to provide.
Accordingly, a proposed forfeiture is warranted against WCSS for
its apparent willful and repeated violations of the order.
11. As adjusted by statute, Section 503(b) of the
Act authorizes the Commission to assess a forfeiture of up to
$120,000 for each violation of the Act or of any rule,
regulation, or order issued by the Commission under the Act by a
common carrier.23 In exercising such authority, we are to take
into account "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." 24
12. The Commission's Forfeiture Policy Statement
establishes a base forfeiture amount of $4,000 for failure to
respond to Commission communications.25 Moreover, as noted
above, section 503(b) gives the Commission discretion to assess
an adjusted amount of $120,000 per violation by a common carrier
or licensee. In view of the nature and gravity of the violation,
we believe that we are warranted in exercising that discretion in
assessing a forfeiture amount of $10,000.
13. It is important that WCSS not continue to
violate its obligation to respond to Commission inquiries.
Accordingly, if WCSS fails to respond to the Letter of Inquiry
within five business days from the release of this NAL, such
failure and further continued violation of the Bureau's directive
will likely subject WCSS to further more significant enforcement
action such as higher forfeitures.26
III. CONCLUSION AND ORDERING CLAUSES
14. We have determined that WCSS apparently
committed a willful and repeated violation of a Commission order
by failing to provide information and documents directed by the
Bureau. We have further determined that WCSS is apparently
liable in the amount of $10,000.
15. 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 sections 0.111 and
0.311 of the Commission's rules, 47 C.F.R. §§0.111, 0.311, that
World Communications Satellite Systems, Inc. (``WCSS'') IS HEREBY
NOTIFIED of an Apparent Liability for Forfeiture in the amount of
$ 10,000 for willful and repeated violations of a Commission
order as described in the paragraphs above.27
16. 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, WCSS SHALL PAY the full amount of the proposed
forfeiture28 OR SHALL FILE a response showing why the proposed
forfeiture should not be imposed or should be reduced.
17. 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.
18. 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., 20554.29
19. Under the Small Business Paperwork
Relief Act of 2002, Pub L. No. 107-198, 116 Stat. 729 (June 28,
2002), the FCC 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 thirty (30) days of this NAL, either in your response to
the NAL or in a separate filing to be sent to the
Telecommunications Consumers Division. Your certification should
indicate whether you, including your parent entity and its
subsidiaries, meet one of the definitions set forth in the list
provided by the FCC's Office of Communications Business
Opportunities (OCBO) set forth in Attachment A of this Notice of
Apparent Liability. 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 questions regarding any of the information contained in
Attachment A, please contact OCBO at (202) 418-0990.
20. IT IS FURTHER ORDERED that copies of this
Notice of Apparent Liability for Forfeiture SHALL BE SENT by
certified mail to The Helein Law Group, 8180 Greensboro Drive,
Suite 700, McLean, VA 22102.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
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
affil iates 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 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 or notice of opportunity
for hearing.
2 Letter from Colleen Heitkamp, Chief, Telecommunications
Consumers Division, Enforcement Bureau, to World Communications
Satellite Systems, Inc. (July 15, 2003) (``Letter'' or ``Letter
of Inquiry'').
3 Letter from Loubna W. Haddad, counsel for WCSS, to Managing
Director, FCC (July 28, 2003).
4 E-Mail from Loubna W. Haddad to Colleen K. Heitkamp (August 4,
2003).
5 E-Mail from Colleen Heitkamp to Loubna W. Haddad (August 5,
2003): E-Mail from Colleen Heitkamp to Loubna W. Haddad (August
20, 2003).
6 Letter from Colleen Heitkamp to Loubna W. Haddad (August 14,
2003).
7 E-Mail from Loubna Haddad to Colleen Heitkamp (August 22,
2003).
8 E-Mail from Colleen Heitkamp to Loubna Haddad (August 26,
2003).
9 Letter from Charles H. Helein, counsel for WCSS, to Colleen K.
Heitkamp (August 27, 2003) (``Helein Letter'').
10 47 U.S.C. § 416(c); SBC Communications, Inc., 17 FCC Rcd 7589,
7591 (2002).
11 47 U.S.C. §§ 154(i), 154(j), 208, 218, 403.
12 47 U.S.C. § 208.
13 See SBC Communications, Inc., 17 FCC Rcd 7589 (2002).
14 Helein Letter at 4.
15 18 FCC Rcd 6870 (WebNet).
16 WebNet, 18 FCC Rcd at 6871 (footnotes omitted).
17 Helein letter at 2-3.
18 18 FCC Rcd at 6872 (footnotes omitted).
19 18 FCC Rcd at 6873-74 (footnotes omitted).
20 18 FCC Rcd at 6871.
21 47 U.S.C. § 416(c).
22 Section 312(f))(1) of the Act, 47 U.S.C. § 312(f)(1), which
applies to violations for which forfeitures are assessed under
Section 503(b) of the Act, provides that ``[t]he term `willful',
when used with reference to the commission or omission of any
act, means the conscious and deliberate commission or omission of
such act, irrespective of any intent to violate any provision of
this Act or any rule or regulation of the Commission authorized
by this Act....'' See Southern California Broadcasting Co., 6 FCC
Rcd 4387 (1991). Section 312(f)(2) of the Act provides that
``[t]he term `repeated', when used with reference to the
commission or omission of any act, means the commission or
omission of such act more than once or, if such commission or
omission is continuous, for more than one day.'' 47 U.S.C. §
312(f)(2).
23 47 U.S.C. § 503(b). Pursuant to the Debt Collection
Improvement Act of 1996, P.L. 104-134, 110 Stat. 1321-358, the
statutory maximum amount for a forfeiture penalty shall be
adjusted for inflation.at least once every four years. The
current maximum, as adjusted, is $120,000. 47 C.F.R. §
1.80(b)(5).
24 47 C.F.R. § 1.80.
25 In the Matter of the Commission's Forfeiture Policy Statement,
12 FCC Rcd 17087 (1997), recon. denied, 15 FCC Rcd 303 (1999); 47
C.F.R. § 1.80(b)(4).
26 See Western Wireless Corporation, 18 FCC Rcd 10319 (2003);
Escotel Cellular, 5 FCC Rcd 6996 (CCB 1990).
27 Documentary information forming the basis of this NAL is
available for copying by WCSS, pursuant to standard Commission
practice.
28 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 WCSS' check or money order to
``NAL/Acct. No. 200332170006'' Such remittances must be mailed
to Forfeiture Collection section, Finance Branch, Federal
Communications Commission, P.O. Box 73482, Chicago, Illinois
60673-7482.
29 47 C.F.R. § 1.1914.