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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-04-IH-0142
)
) Acct. No. 200532080008
TON Services, Inc. )
) FRN No. 0005-0237-26
ORDER
Adopted: October 27, 2004 Released: October 28,
2004
By the Chief, Enforcement Bureau:
1. In this Order, we adopt a Consent Decree terminating an
investigation into possible violations by TON Services, Inc.
(``TON'') of section 254 of the Act and sections 52.17, 54.706,
54.711, 54.713, and 64.604 of the Commission's rules, 47 U.S.C. §
254, 47 C.F.R. §§ 52.17, 54.706, 54.711, 54.713 and 64.604,
relating to obligations of carriers to make payments into the
Universal Service Fund and Telecommunications Relay Service
Fund.1
2. The Enforcement Bureau (``Bureau'') and TON have
negotiated the terms of the Consent Decree. A copy of the
Consent Decree is attached hereto and incorporated by reference.
3. We have reviewed the terms of the Consent Decree and
evaluated the facts before us. We believe that the public
interest would be served by approving the Consent Decree and
terminating the investigation.
4. Based on the record before us, and in the absence of
material new evidence relating to this matter, we conclude that
there are no substantial or material questions of fact as to
whether TON possesses the basic qualifications, including those
related to character, to hold or obtain any Commission license or
authorization.
5. Accordingly, IT IS ORDERED, pursuant to Section 4(i) of
the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i),
and the authority delegated by section 0.111 and 0.311 of the
Commission's rules, 47 C.F.R. §§ 0.111, 0.311, that the attached
Consent Decree IS ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned
investigation IS TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau Before the
Federal Communications Commission
Washington, DC 20554
) File No. EB-04-IH-0142
In the Matter of )
) Acct. No. 200532080008
TON Services, Inc. )
) FRN No. 0005-0237-26
CONSENT DECREE
1. The Enforcement Bureau (``Bureau'') of the Federal
Communications Commission (``Commission'') and TON Services,
Inc. (``TON Services'') hereby enter into this Consent
Decree for the purpose of terminating the Bureau's
investigation into whether TON Services violated the
universal service reporting and contribution requirements of
section 254 of the Communications Act of 1934, as amended
(the ``Act'')2 and/or certain Commission's rules relating to
universal service, the Telecommunications Relay Service Fund
and the North American Numbering Plan Administration.
2. For the purposes of this Consent Decree, the following
definitions shall apply:
2)a. ``Commission'' and ``FCC'' mean the Federal
Communications Commission.
2)b. ``Bureau'' means the Enforcement Bureau of
the Federal Communications Commission.
2)c. ``TON Services'' and ``TON'' mean TON
Services, Inc. and its predecessors-in-interest and
successors-in-interest.
2)d. ``Parties'' means TON Services and the
Bureau.
2)e. ``Order'' or ``Adopting Order'' means an
Order of the Commission or the Bureau adopting the
terms of this Consent Decree without change,
addition, deletion, or modification.
2)f. ``Effective Date'' means the date on which
the Commission or the Bureau releases the Adopting
Order.
2)g. ``Investigation'' means the investigation
commenced by the Bureau's May 13, 2004 Letter of
Inquiry3 regarding whether TON Services violated the
universal service reporting and contribution
requirements of section 254 of the Act and/or
sections 52.17, 54.706, 54.711, 54.713, and 64.604
of the Commission's rules. ``Investigation'' also
includes all matters concerning any non-payment of
FCC regulatory fees by TON Services through the
Effective Date.
I. BACKGROUND
3. Pursuant to section 254(d) of the Act and sections
52.17, 54.706, 54.711, 54.713, and 64.604 of the
Commission's rules, telecommunications carriers that provide
interstate telecommunications services and private service
providers that provide interstate telecommunications are
required to file annual and quarterly Telecommunications
Reporting Worksheets (FCC Forms 499-A and 499-Q) and
contribute to the Universal Service Fund, Telecommunications
Relay Service Fund and North American Numbering Plan
Administration.4
4. TON Services operates payphones located at various
travel plazas and other facilities and also provides prepaid
calling card services. On March 30, 2004, the Bureau's
audit staff submitted a data request seeking information
about TON's universal service filer identification number.
The Bureau received a response on April 16, 2004. On May
13, 2004, the Bureau initiated the Investigation by issuing
a Letter of Inquiry (``LOI'') directing TON Services to
provide information about its compliance with, among other
matters, the Commission's universal service reporting and
contribution requirements. TON Services submitted a
response to the Bureau's LOI on June 17, 2004. TON
represented in its response and later offered to submit
evidence to prove that its current management team assumed
control of the company in late 2003 and first learned of
possible universal service compliance problems in January
2004. TON further represented and later offered to submit
evidence to prove that it voluntarily began the process of
correcting any universal service compliance problems before
learning of the Bureau's investigation or receiving any
inquiry from the Bureau, including the Bureau audit staff's
March 30, 2004 data request. By October 1, 2004, TON had
brought itself fully into compliance with governing
universal service rules and had no outstanding universal
service, telecommunications relay service or numbering plan
administration arrearages. TON is presently in discussions
with USAC and the FCC's Wireline Competition Bureau
regarding TON's claim that it is owed substantial credits
for past overpayments to the universal service fund.
II. AGREEMENT
5. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau,
through entry of the Order, which shall immediately resolve
and terminate the Investigation.
6. The Parties agree that this Consent Decree does not
constitute either an adjudication on the merits or a factual
or legal finding or determination regarding any compliance
or noncompliance with the requirements of the Act or the
Commission's rules and orders. The Parties agree that this
Consent Decree is for settlement purposes only and that by
agreeing to this Consent Decree, TON Services does not admit
or deny liability for violating any statute, regulation, or
administrative rule in connection with matters that are the
subject of this Consent Decree.
7. TON Services agrees that it will make a voluntary
contribution to the United States Treasury in the amount of
four hundred thousand dollars ($400,000) within 30 calendar
days after the Effective Date of the Adopting Order. The
payment must be made by check or similar instrument, payable
to the order of the Federal Communications Commission. The
payment must include ``Acct. No. 200532080008'' and ``FRN
No. 0005-0237-26.'' Payment by check or money order must 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, IL 60661. Payment by wire transfer may be made to
ABA Number 071000013, receiving bank Bank One, and account
number 1165259.
8. For purposes of settling the matters set forth herein,
TON Services agrees to implement a compliance program
related to future compliance with the Act, the Commission's
rules, and the Commission's orders. The program will
include, at a minimum, the following components:
(a) Compliance Manual. The Company shall develop and
update as necessary a Compliance Manual. Company
personnel shall have ready access to the Compliance
Manual and are to follow the procedures contained in
it. The Compliance Manual will, among other things,
describe the universal service, Telecommunications
Relay Service and North American Numbering Plan
Administration rules and requirements as they apply
to TON Services. The Compliance Manual will
encourage personnel to contact the Company's
President, General Manager and/or Chief Financial
Officer with any questions or concerns that arise.
(b) Compliance Training Program. The Company will
establish an FCC compliance training program for
employees who engage in activities subject to FCC
regulation. Training sessions will be conducted at
least annually to ensure compliance with the Act and
the FCC's regulations and policies and, for new
employees, within the first 30 days of employment.
(c) Designated Contact. The Company will designate
one employee as the point of contact for all
telecommunications compliance matters.
(d) Review and Monitoring. The Company will review
the Program annually to ensure that it is maintained
in a proper manner and continues to address the
objectives set forth therein.
(e) Audits. The Company will ensure that external and
internal audit reviews specifically address
compliance with FCC regulatory requirements.
(f) Escalation. The Company will implement an
escalation process by which notice is given to
progressively higher corporate officers within TON
in the event of delay by TON in providing
information to its vendor/agent that is necessary
for the vendor/agent to make the required filing and
payment of universal service, Telecommunications
Relay Service and North American Numbering Plan
Administration contributions. The first escalation
contact is TON's Chief Financial Officer, then its
Vice President-General Manager or President.
(g) Trade Group. The Company will maintain membership
in a trade group to keep employees and managers with
compliance responsibilities informed of FCC
regulatory compliance requirements.
(h) Termination. TON's obligation under this
Paragraph 8 shall expire twenty four (24) months
after the Effective Date.
9. The Bureau agrees that it will not use the facts
developed in this Investigation through the Effective Date
of the Consent Decree or the existence of this Consent
Decree to institute, on its own motion, any new proceeding,
formal or informal, or take any action on its own motion
against TON Services and its affiliate companies concerning
the matters that were the subject of the Investigation,
including (without limitation) any matters concerning
payment of FCC regulatory fees. The Bureau also agrees that
it will not use the facts developed in this Investigation
through the Effective Date of this Consent Decree or the
existence of this Consent Decree to institute on its own
motion any proceeding, formal or informal, or take any
action on its own motion against TON Services with respect
to TON's basic qualifications, including its character
qualifications, to be a Commission licensee or authorized
common carrier.
10. Nothing in this Consent Decree shall prevent the
Commission or its delegated authority from adjudicating
complaints filed pursuant to section 208 of the Act against
TON Services or its affiliates for alleged violations of the
Act, or for any other type of alleged misconduct, regardless
of when such misconduct took place. The Commission's
adjudication of any such complaint will be based solely on
the record developed in that proceeding. Except as
expressly provided in this Consent Decree, this Consent
Decree shall not prevent the Commission from investigating
material new evidence of noncompliance by TON Services of
the Act, the rules, or this Order.
11. TON Services waives any and all rights it may have to
seek administrative or judicial reconsideration, review,
appeal or stay, or to otherwise challenge or contest the
validity of this Consent Degree and the Order adopting this
Consent Decree, provided the Bureau issues an Order adopting
the Consent Decree without change, addition, modification,
or deletion. TON Services shall retain the right to
challenge Commission interpretation of the Consent Decree or
any terms contained herein.
12. TON Services' decision to enter into this Consent
Decree is expressly contingent upon the Bureau's issuance of
an Order that is consistent with this Consent Decree, and
which adopts the Consent Decree without change, addition,
modification, or deletion.
13. In the event that this Consent Decree is rendered
invalid by any court of competent jurisdiction, it shall
become null and void and may not be used in any manner in
any legal proceeding.
14. If either Party (or the United States on behalf of the
Commission) brings a judicial action to enforce the terms of
the Adopting Order, neither TON Services nor the Commission
shall contest the validity of the Consent Decree or the
Adopting Order, and TON shall waive any statutory right to a
trial de novo.
15. Any violation of the Consent Decree or the Adopting
Order will constitute a separate violation of a Commission
order, entitling the Commission to exercise any rights or
remedies authorized by law attendant to the enforcement of a
Commission order.
16. The Parties also agree that if any provision of the
Consent Decree conflicts with any subsequent rule or order
adopted by the Commission (except an order specifically
intended to revise the terms of this Consent Decree to which
TON Services does not expressly consent) that provision will
be superseded by such Commission rule or order.
17. TON Services hereby agrees to waive any claims it may
otherwise have under the Equal Access to Justice Act, 5
U.S.C. § 504 and 47 C.F.R. § 1.1501 et seq., relating to the
matters addressed in this Consent Decree.
18. This Consent Decree may be signed in counterparts.
________________________________
David H. Solomon
Chief, Enforcement Bureau
Federal Communications
Commission
________________________________
Date
________________________________
Jagjit Singh
President
TON Services, Inc.
________________________________
Date
_________________________
1 See Letter from Hillary S. DeNigro, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, to
Brett Sanford Chief Financial Officer, TON Services, Inc. and
Allan C. Hubbard, Counsel, dated May 13, 2004 (``LOI'').
2 47 U.S.C. § 254.
3 See Letter from Hillary S. DeNigro, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, FCC to
Brett Sanford, Chief Financial Officer, TON Services, Inc. (May
13, 2004).
4 47 U.S.C. § 254(d); 47 C.F.R. §§ 52.17, 54.706, 54.711, 54.713,
64.604.