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




In the Matter of                 )
                                )
Pend Oreille                     )    File No. EB-03-TC-123
Telephone Company                )    NAL/Acct. No. 200432170001 
                                )    FRN: 0007838568
Apparent Liability for           )
Forfeiture




                       ORDER OF FORFEITURE 

   Adopted:  October 13, 2004           Released:  October 15, 
2004                                    

By the Chief, Enforcement Bureau:

I.          INTRODUCTION

            1. In this Order, we assess a forfeiture of $20,000 
against Pend Oreille Telephone Company (``Pend Oreille'') for 
willful and repeated violations of the Communications Act of 
1934, as amended (``the Act''), and the Federal Communications 
Commission's (``Commission'' or ``FCC'') rules and orders.  For 
the reasons set forth below, we find that Pend Oreille willfully 
and repeatedly violated Section 214(e)(1)(B) of the Act,1 and 
Sections 54.405(b) and 54.411(d) of the Commission's rules,2 by 
willfully and repeatedly failing to publicize the availability 
of Lifeline and Link-Up services ``in a manner reasonably 
designed to reach those likely to qualify'' for the services. 

II.  BACKGROUND

     2.   The facts and circumstances surrounding this case are 
          set forth in the Notice of Apparent Liability 
          previously issued by the Enforcement Bureau 
          (``Bureau'') and need not be reiterated at length.3  
          Pend Oreille is an eligible telecommunications carrier 
          (``ETC''), i.e., a telephone company eligible to 
          receive universal service support under Section 254 of 
          the Act.4  Pend Oreille serves the Kalispel Reservation 
          in Usk, Washington.  On October 7, 2003, based on 
          concerns raised informally with the Bureau by tribal 
          leaders, the Bureau sent a Letter of Inquiry (``LOI'') 
          to Pend Oreille,5 stating that it was investigating 
          whether Pend Oreille was satisfying its obligations 
          under Sections 54.405(b) and 54.411(d) of the 
          Commission's rules to publicize the availability of 
          Lifeline and Link-Up services to low-income residents 
          on tribal lands ``in a manner reasonably designed to 
          reach those likely to qualify'' for those services.6  
          The LOI directed Pend Oreille to describe any action it 
          had taken over the previous year to satisfy Sections 
          54.405(b) and 54.411(d) and to support its response 
          with pertinent documentation and affidavits.  Pend 
          Oreille responded by saying it did not target any 
          particular group for Lifeline and Link-Up advertising 
          and attached a newspaper advertisement and a telephone 
          application insert, neither of which described its 
          Lifeline and Link-Up offerings.  

       3. Because the record reflected an almost complete failure 
by Pend Oreille to publicize the availability of Lifeline and 
Link-Up offerings, we found that Pend Oreille apparently 
violated Section 214(e)(1)(B) of the Act, and Sections 54.405(b) 
and 54.411(d) of the Commission's rules, and therefore proposed 
a forfeiture of $25,000.7  In addition, we admonished Pend 
Oreille for failing to comply with a Bureau directive to provide 
certain information and documents.8          

III.        DISCUSSION

              4.    In its response to the Pend Oreille NAL, Pend 
Oreille argues that no forfeiture should be imposed because: 1) 
it publicized the availability of Lifeline services in its 
telephone directory, local newspaper, and telephone application 
insert; 2) it is able to demonstrate tangible outreach success 
because 55 percent of the impoverished households on the Kalispel 
Reservation receive Lifeline discounts; 3) it was working without 
the benefit of Commission guidelines; and 4) it did not act with 
bad intent and has a record of complying with Commission rules 
and the duties of an ETC.9  We address Pend Oreille's arguments 
in turn, and conclude that none of Pend Oreille's arguments 
warrant cancellation of the proposed forfeiture amount.  

     5.Pend Oreille argues that its LOI Response indicated that 
it advertised the availability of Lifeline and Link-Up services 
to low-income residents on tribal lands via local newspaper ads 
and in applications for telephone service.10  We disagree. The 
newspaper ad and application insert submitted with Pend Oreille's 
LOI response set forth the company's rates for basic service and 
describe those services under general headings entitled, for 
example, ``Touch Tone Service,'' ``Toll Blocking,'' and 
``Emergency 911 Services.''11  One such heading, ``Toll 
Restriction Services'' states that toll blocking is offered at no 
charge ``to low-income customers participating in the Lifeline 
program'' and directs interested persons to ``contact your local 
Health and Welfare office.''12  This passing reference in the 
newspaper ad and application insert, focused on toll blocking 
capability, provides no information about the nature of Lifeline 
service (i.e., that Lifeline is a program assisting low income 
households with monthly telephone bills).  Indeed, readers may 
not even notice the vague reference to Lifeline service, let 
alone have any incentive to call a Pend Oreille customer 
representative or consult with a social service agency to inquire 
about Lifeline service.  Furthermore, the newspaper ad and 
application insert make no mention of Pend Oreille's Link-Up 
service offering.  Thus, we conclude that Pend Oreille's claimed 
outreach efforts via newspaper advertisements and telephone 
service applications to low-income individuals fail to satisfy 
its outreach obligations. 

     6.Pend Oreille also argues that its LOI Response indicated 
that it advertised the availability of Lifeline and Link-Up 
services to low-income residents on tribal lands in its telephone 
directory.13  However, Pend Oreille fails to provide, either in 
its response to the LOI14 or its response to the Pend Oreille 
NAL,15 a copy of the relevant directory pages.  Further, Pend 
Oreille fails to describe exactly how its directory advertised or 
explained the Lifeline or Link-Up programs.  To the extent that 
the directory pages refer to Lifeline and Link-Up in a manner 
consistent with Pend Oreille's newspaper ads and application 
inserts discussed above, we would conclude that Pend Oreille's 
telephone directory did not sufficiently describe the Lifeline or 
Link-Up programs.   Without having the opportunity to review the 
directory pages or the relevant language from the directory, we 
are not persuaded that the directory adequately advises consumers 
of the availability of the Lifeline and Link-Up programs.  
Moreover, even assuming that Pend Oreille did describe the 
availability of the Lifeline and Link-Up programs in some fashion 
in its telephone directory, we are not convinced of the 
reasonableness of this method of outreach.16  Based on the 
forgoing, we conclude that Pend Oreille has not demonstrated that 
it fulfilled its obligation to reasonably advertise Lifeline and 
Link-Up through its directory pages.  

     7.   Pend Oreille additionally states that it trained its 
customer representatives to discuss the Lifeline and Link-Up 
programs with prospective customers who may inquire as a result 
of its ads and telephone applications, and that it coordinated 
with the local health and welfare office to commence service to 
qualified applicants.17  As noted above, however, because Pend 
Oreille's ads and applications fail to provide any description of 
Pend Oreille's Lifeline and Link-Up offerings, we fail to see why 
interested potential Lifeline and Link-Up customers would either 
call Pend Oreille or contact a welfare office to inquire as to 
these discounted services.  This commitment to respond to 
inquiries is not sufficient to satisfy Pend Oreille's affirmative 
obligation to publicize the availability of Lifeline and Link-Up 
services.  Further, Pend Oreille fails to provide details or 
evidence of any of its in-house training or coordination 
efforts.18    

     8. Next, Pend Oreille argues that because 55 percent of the 
impoverished Kalispel Reservation households receive Lifeline 
discounts, it can demonstrate ``tangible success'' from its 
publication of Lifeline and Link-Up services to low-income 
consumers on the Kalispel Reservation.19  We disagree.  First, as 
described above, we find Pend Oreille's outreach so lacking that 
any such success cannot reasonably be attributed to Pend 
Oreille's efforts.  Further, we note that Pend Oreille's analysis 
is incomplete.  While poverty levels may suggest the number of 
individuals likely to qualify for the discount, eligibility 
determinations for Lifeline and Link-Up service are based on 
participation in various means-tested public assistance programs 
that go beyond poverty levels.20  As a result, we find Pend 
Oreille's argument unavailing.

     9.   Pend Oreille further argues that a forfeiture should 
not be imposed because Pend Oreille was working without the 
benefit of Commission guidelines for outreach efforts.21  We find 
this argument unpersuasive.  While the Commission has not 
mandated specific types of outreach for publicizing the 
availability of Lifeline and Link-Up services to low-income 
residents,22 because reasonable outreach may differ depending on 
customer location,23 it has nevertheless provided sufficient 
guidance for ETCs.  In the Twelfth Report and Order, the 
Commission required ETCs to identify communities with the lowest 
subscribership levels within their service territories and make 
``appropriate'' efforts to reach qualifying individuals within 
those communities.24  The Commission further stated that, among 
other things, it expected carriers to take into consideration the 
cultural and linguistic characteristics of low-income communities 
within their service territory, as well as the efficacy of 
particular methods in reaching the greatest number of qualifying 
low-income individuals within those communities.25  As an example 
of effective outreach efforts, the Commission commended one 
carrier for taking a proactive non-traditional means of 
advertising in its service area by contacting low-income 
households in person, speaking to individuals in their own 
language, and explaining the Lifeline and toll blocking options, 
rather than merely placing ads in regional publications or 
putting up posters.26  Pend Oreille should have realized, based 
on this guidance, that its virtually nonexistent outreach 
efforts, i.e., embedding a vague reference to Lifeline in the 
local newspaper and in application inserts, were not reasonable 
methods of reaching qualifying low-income individuals on the 
Kalispel Reservation.  

     10.  Pend Oreille also argues that a forfeiture should not 
be imposed because it was not acting with bad intent.27  As we 
noted in the Pend Oreille NAL, and reiterate here, Section 
503(b)(1)(B) of the Act gives the Commission authority to assess 
a forfeiture 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.28  For a violation 
to be willful under Section 503(b), the carrier need not intend 
to violate the rule.  Rather, the carrier need only intend to 
commit the act or omission in question.29  As a result, we do not 
consider whether Pend Oreille acted with ``bad intent'' in 
determining whether to impose a forfeiture.
  
     11.  Finally, Pend Oreille argues that a forfeiture should 
not be imposed because it has a record of complying with 
Commission rules and the duties of an ETC.30  In examining Pend 
Oreille's assertion, Section 503(b) of the Act requires that the 
Commission take into account, among other things, a history of 
overall compliance in its consideration of downward adjustment of 
a forfeiture.31  We note that the Commission has not in the past 
taken enforcement action against Pend Oreille for violation of 
the Commission's rules or its duties as an ETC.  Accordingly, in 
light of Pend Oreille's history of overall compliance, we reduce 
the forfeiture by $5,000.  We do not believe, however, that such 
compliance warrants cancellation of the forfeiture.  Thus, we 
conclude that Pend Oreille is liable for a forfeiture in the 
amount of $20,000. 

IV.  CONCLUSIONS AND ORDERING CLAUSES

            12.     After reviewing Pend Oreille's Response, we 
find that Pend Oreille willfully and repeatedly failed to 
publicize the availability of Lifeline and Link-Up services ``in 
a manner reasonably designed to reach those who qualify'' for 
those services.  However, as discussed above, Pend Oreille has 
shown mitigating circumstances sufficient to warrant a reduction 
of the forfeiture penalty to $20,000.

            13.     Accordingly, IT IS ORDERED THAT, pursuant to 
Sections 4(i) and 503(b) of the Act, 47 U.S.C. §§ 154(i) and 
503(b), and Sections 0.111, 0.311 and 1.80(f)(4) of the 
Commission's Rules, 47 C.F.R. §§ 0.111, 0.311 and 1.80(f)(4) that 
Pend Oreille shall forfeit to the United States government the 
sum of $20,000 for willfully and repeatedly violating Section 
214(e)(1)(B) of the Act, 47 U.S.C. § 214(e)(1)(B), and Sections 
54.405(b) and 54.411(d) of the Commission's rules, 47 C.F.R. §§ 
54.405(b), 54.411(d) as discussed in the paragraphs above. 

            14.     Payment of the forfeiture must be made by 
check or similar instrument, payable to the order of the Federal 
Communications Commission, no later than 30 days after release of 
this Order.  The payment must include the NAL/Acct. No. and FRN 
No. referenced above.  Payment by check or money order may be 
mailed to Forfeiture Collection Section, Finance Branch, Federal 
Communications Commission, P.O. Box 73482, Chicago, Illinois 
60673-7482.  Payment by overnight mail may be sent to Bank One/LB 
73482, 525 West Monroe, 8th Floor Mailroom, Chicago, Illinois 
60661.  Payment by wire transfer may be made to ABA Number 
071000013, receiving bank Bank One, and Account Number 1165259.  
             15.    IT IS FURTHER ORDERED that a copy of this 
Forfeiture Order shall be sent by Certified Mail Return Receipt 
Requested to Mark R. Martell, Assistant Manager, Pend Oreille 
Telephone Company, 892 W. Madison Avenue, Glenns Ferry, ID  
83623. 

          
                     
                         FEDERAL COMMUNICATIONS COMMISSION



                         David H. Solomon
                    Chief, Enforcement Bureau


_________________________

147 U.S.C. § 214(e)(1)(B).
247 C.F.R. §§ 54.405(b), 54.411(d).
3Pend Oreille Telephone Company, Notice of Apparent Liability for 
Forfeiture, 19 FCC Rcd 9264 (EB rel. May 24, 2004) (Pend  Oreille 
NAL).
447 U.S.C. § 254.
5See  Letter   of   Inquiry   from   Colleen   Heitkamp,   Chief, 
Telecommunications Consumers  Division,  Enforcement  Bureau,  to 
Pend Oreille Telephone Company (Oct. 7, 2003) (``LOI'').
6Based on concerns that low-income residents on tribal lands  may 
not be aware of the benefits  of Lifeline and Link-Up, the  scope 
of the investigation  was limited to  ETCs' efforts to  publicize 
Lifeline and Link-Up to eligible residents on tribal lands.  
7Pend Oreille NAL, 19 FCC Rcd at 9268, ¶ 15.
8Id. at 9269, ¶ 20.
9Response to Notice of  Apparent Liability for Forfeiture,  filed 
by Lukas, Nace, Guitierrez & Sachs, Counsel to Pend Oreille (June 
23, 2004) (``Response'').
10Response at 2.  
11Response to  Letter of  Inquiry from  Colleen Heitkamp,  Chief, 
Telecommunications Consumers  Division,  Enforcement  Bureau,  to 
Pend  Oreille  Telephone  Company,  filed  by  Mark  R.  Martell, 
Assistant Manager to Pend Oreille Telephone Company (December  9, 
2003) (``LOI Response'').
12LOI Response at Attachment. 
13Response at 2.
14LOI at 4, question 6 (stating that supporting data should at  a 
minimum  include  copies   of  any  written   material  used   as 
advertisements).
1547 C.F.R. § 1.80(f)(3)  (stating that ``any  showing as to  why 
the forfeiture should not be  imposed or should be reduced  shall 
include a detailed factual  statement and such documentation  and 
affidavits as may be pertinent'').
16  Indeed,  in  a  recent  order,  the  Commission  noted   that 
``although advertising  Lifeline/Link-Up in  carriers'  telephone 
books may be effective  in reaching some low-income  individuals, 
it will  not be  effective for  those without  established  phone 
service because carriers  only distribute  telephone books  after 
phone service is  established.''  In the  Matter of Lifeline  and 
Link-Up,  Report  and  Order  and  Further  Notice  of   Proposed 
Rulemaking, 19  FCC Rcd  8302, 8327,  ¶ 46  (2004) (Lifeline  and 
Link-Up Order) 
17Response at 7.
1847 C.F.R. § 1.80(f)(3).
19Response at 3-4.
20See  47  C.F.R.   §§  54.409,  54.415   which  detail   various 
eligibility criteria  for  Lifeline and  Link-Up  programs.   The 
Commission recently modified the low-income Lifeline and  Link-Up 
program criteria to include an income-based eligibility criterion 
and additional means-tested programs.   See Lifeline and  Link-Up 
Order,19  FCC  Rcd  at  8308-14.   However,  we  note  that   the 
modifications in the Lifeline and  Link-Up Order do not apply  in 
the instant  proceeding because  that decision  became  effective 
after the period in question here.
21Response at 7.
22In the  Lifeline  and  Link-Up Order,  the  Commission  adopted 
guidelines for ETCs to  follow when publicizing the  availability 
of Lifeline and Link-Up to low-income residents on tribal  lands, 
but  these  guidelines   are  not  applicable   in  the   instant 
proceeding.  See id. at 19 FCC Rcd at 8325-29. 
23See In the  Matter of  Federal-State Joint  Board on  Universal 
Service, Twelfth Report and Order, 15 FCC Rcd 12208, 12250, ¶  79 
(2000) (Twelfth Report and Order).
24Id.
25Id.
26Id. at 12249-50, ¶ 77.
27Response at 6.
2847 U.S.C. § 503(b)(1)(B).  
29See, e.g.,  Southern  California Broadcasting  Co.,  Memorandum 
Opinion and Order, 6 FCC Rcd 4387 (1991).
30Response at 6. 
3147 U.S.C. §503(b)(2)(D).