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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. EB-03-IH-0366
) Acct. No. 200432080021
WestCom Corporation ) FRN No. 0009-6760-99
)
ORDER
Adopted: March 12, 2004 Released: March 16, 2004
By the Chief, Enforcement Bureau:
1. In this Order, we adopt a Consent Decree terminating an
investigation into possible violations by WestCom Corporation
(``WestCom'') of sections 54.706, 54.711, 54.713, and related
provisions of the Commission's rules (``Rules''), 47 C.F.R.
§§ 54.706, 54.711 and 54.713, in connection with the universal
service support mechanism reporting and contribution
requirements.1
2. The Enforcement Bureau (``Bureau'') and WestCom 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 WestCom possesses the basic qualifications, including
those related to character, to hold or obtain any Commission
license or authorization.
5. We deem the adopted Consent Decree to satisfy the
requirements of the Citation provisions under subsections
503(b)(5)(A)-(B) of the Communications Act of 1934, as amended.2
6. Accordingly, IT IS ORDERED, pursuant to Sections 4(i),
4(j), and 503(b)(5) of the Communications Act of 1934, as
amended, 47 U.S.C. §§ 154(i), 154(j), and 503(b)(5), 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.
7. 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, D.C. 20554
In the Matter of )
) File No. EB-03-IH-0366
) Acct. No. 200432080021
WestCom Corporation ) FRN No. 0009-6760-99
)
CONSENT DECREE
8. The Enforcement Bureau (the ``Bureau'') of the Federal
Communications Commission (the ``Commission'') and WestCom
Corporation (``WestCom'' or the ``Company''), by their respective
authorized representatives, hereby enter into this Consent Decree
for the purpose of terminating the Bureau's investigation into
whether WestCom violated the universal service reporting and
contribution requirements of Section 254 of the Communications
Act of 1934, as amended (the ``Act''), 47 U.S.C. § 254, and of
Sections 52.17, 52.32, 54.706, 54.711, 54.713, and 64.1195 of the
Commission's Rules, 47 C.F.R. §§ 52.17, 52.32, 54.706, 54.711,
54.713, and 64.1195.
9. For the purposes of this Consent Decree, the following
definitions shall apply:
(a) The ``Act'' means the Communications Act of 1934,
as amended, 47 U.S.C. §§ 151 et seq.
(b) ``Adopting Order'' or ``Order'' means an order of
the Commission or the Bureau adopting this Consent
Decree.
(c) The ``Bureau'' means the Enforcement Bureau of the
Federal Communications Commission.
(d) The ``Commission'' or ``FCC'' means the Federal
Communications Commission.
(e) ``Effective Date'' means the date on which the
Commission or the Bureau releases the Order.
(f) ``Investigation'' means the investigation
initiated by the Bureau's September 10, 2003 letter
of inquiry concerning possible violations of the
Rules.
(g) ``Parties'' means WestCom and the Bureau.
(h) ``Rules'' means the Commission's regulations set
forth in Title 47 of the Code of Federal
Regulations.
(i) ``WestCom'' or the ``Company'' means WestCom
Corporation and all parents, subsidiaries, divisions
and affiliates, and each of their respective
officers, directors, employees, agents,
representatives, or any other person acting or
purporting to act on behalf of WestCom, or its
successors or assigns.
I. BACKGROUND
10. Pursuant to section 254(d) of the Act and sections
54.706, 54.711, and 54.713 of the 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 FCC
Form 499-Q) and contribute to the Universal Service Fund. 47
U.S.C. § 254(d); 47 C.F.R. §§ 54.706, 54.711 and 54.713.
Sections 52.17 and 52.32 of the Rules require all
telecommunications carriers to contribute to the costs of
establishing numbering administration and long-term number
portability, respectively. Section 64.1195 of the Rules requires
all telecommunications carriers to register using Form 499-A.
11. WestCom offers local and long distance private line
voice and data services to business customers, predominantly in
the financial industry. On September 10, 2003, the Bureau issued
a letter of inquiry (``LOI'') initiating an investigation
regarding WestCom's compliance with its universal service and
other reporting and contribution obligations associated with
Forms 499-A and 499-Q.3 In its filings and discussions with the
Bureau, WestCom stated that prior to its receipt of the LOI,
WestCom anonymously had sought guidance from the Wireline
Competition Bureau and from the Universal Service Administrative
Company (``USAC'') regarding voluntary payment of past universal
service contribution obligations and had advised USAC of its
intention to pay in full all such amounts. On October 3, 2003,
WestCom submitted to USAC Forms 499-A and 499-Q for prior periods
(the ``Forms'') for which WestCom had not made universal service
support contributions. Based on the Forms, USAC calculated
WestCom's obligation and issued three substantial, multi-million
dollar invoices. On November 15, 2003, December 15, 2003, and
January 15, 2004, WestCom timely paid, in full, each of the
invoices.
II. AGREEMENT
12. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau, through
the entry of the Order, which shall immediately resolve and
terminate the Investigation.
13. 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, WestCom does not admit or deny
liability for violating any statute, regulation, or
administrative rule in connection with the matters that are the
subject of this Consent Decree.
14. WestCom agrees that it has implemented or will
implement, within thirty (30) calendar days after the Bureau
releases the Order adopting this Consent Decree, an internal
compliance program (the ``Program'') to ensure WestCom's future
compliance with the Act, the Commission's rules, and the
Commission's orders. The program will include, at a minimum, the
following components:
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 describe the universal
service rules and requirements as they apply to
WestCom. The Compliance Manual will encourage
personnel to contact the Company's Legal Department,
the Company's Chief Executive and/or Chief Financial
Officer with any questions or concerns that arise.
Compliance Training Program. The Company shall
establish an FCC compliance-training program for
employees who engage in activities subject to FCC
regulation. Training sessions will be conducted (i) at
least annually to ensure compliance with the Act and
the FCC's regulations and policies and (ii) for any new
employee, within the first thirty (30) days of
employment.
Designated Contact. The Company will designate one
employee as the point of contact for all regulatory
compliance matters.
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 herein.
Supplemental Measures. The Program will be
supplemented by membership in a trade organization and
other means of keeping responsible Company personnel
informed of FCC regulatory compliance requirements.
15. WestCom agrees that in the event it shall fail, after
the Effective Date, to timely file a FCC Form 499-A or Form 499-
Q, or make on a timely basis a required contribution to the
Universal Service Fund, it will make a voluntary contribution to
the United States Treasury equal to (a) $25,000 for the first
such failure, (b) $100,000 for the second such failure, or (c)
$250,000 for the third and any subsequent such failure. Any
voluntary contribution under this Paragraph 8 must be made by
check, wire transfer or money order drawn to the order of the
Federal Communications Commission and the check, wire transfer,
or money order shall reference ``Acct. No. 200432080021'' and
``FRN No. 0009-6760-99.'' If WestCom makes any payments by check
or money order, it must mail the check or money order to: the
Forfeiture Collection Section, Finance Branch, Federal
Communications Commission, P.O. Box 73482, Chicago, Illinois,
60673-7482. If WestCom makes any payment by wire transfer, it
must wire such payment in accordance with Commission procedures
for wire transfers. WestCom must make any voluntary contribution
under this Paragraph 8 within thirty (30) days of notice to
WestCom from USAC or the Commission that WestCom has failed to
timely file a FCC Form 499-A or Form 499-Q, or make a required
contribution.
16. The Parties agree that this Consent Decree and
WestCom's December 9, 2003 meeting with the Bureau staff are
deemed to satisfy the requirements of the Citation provisions
under subsections 503(b)(5)(A)-(B) of the Act, 47 U.S.C.
§§ 503(b)(5)(A)-(B).
17. The Parties agree that this Consent Decree shall become
effective on the Effective Date and, except for paragraph 9,
shall expire two (2) years after the Effective Date. On the
Effective Date, the Order and this Consent Decree shall have the
same force and effect as any other order of the Commission. Any
material violation of any term of this Consent Decree shall
constitute a violation of a Commission order entitling the
Commission to exercise any rights and remedies attendant to the
enforcement of a Commission order.
18. This Consent Decree and Order may be extended by the
Bureau upon a final, non-appealable judicial or administrative
ruling that WestCom has materially failed to comply with the
terms of this Consent Decree.
19. WestCom acknowledges that the Bureau has jurisdiction
over it and this matter, and has the authority to enter into, and
adopt, this Consent Decree.
20. WestCom 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 Decree and the Order, provided the Order adopts this
Consent Decree without change, addition, or modification.
21. The Parties agree that if WestCom, the Commission or
the United States on behalf of the Commission, brings a judicial
action to enforce the terms of the Order adopting this Consent
Decree, neither WestCom nor the Commission shall contest the
validity of the Consent Decree or the Order, and WestCom will
waive any statutory right to a trial de novo regarding the terms
or validity of the Consent Decree. WestCom, however, may present
evidence that it has not violated the Consent Decree.
22. WestCom agrees to waive any claims it may otherwise
have under the Equal Access to Justice Act, Title 5 U.S.C. § 504
and 47 C.F.R. §§ 1.1501 et seq.
23. In express reliance on the covenants and
representations in this Consent Decree, the Bureau agrees to
terminate the Investigation without any finding of liability on
the part of WestCom. This Consent Decree shall constitute a
final settlement between the Parties of the Investigation.
24. The Bureau agrees that, in the absence of material new
evidence related to the matters that were the subject of the
Investigation, it will not institute, on its own motion, any new
proceeding, formal or informal, or take any action on its own
motion against WestCom for possible past violations of the
contribution rules of the Commission in connection with the
universal service and other reporting and contribution
requirements. The Bureau also agrees that, in the absence of
material new evidence related to these matters, it will not use
the facts developed in the Investigation through the Effective
Date, or the existence of this Consent Decree, to institute on
its own motion any new proceeding, formal or informal, or to take
any action on its own motion, against WestCom concerning the
matters that were the subject of the Investigation. The Bureau
further agrees that, in the absence of material new evidence
related to these matters, it will not use the facts developed in
this Investigation through the Effective Date, 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 WestCom with respect to its basic qualifications,
including its character qualifications, to be a Commission
licensee or with respect to compliance with the Commission's
rules and policies.
25. Nothing in this Consent Decree shall prevent the
Commission from adjudicating formal or informal complaints filed
against the Company pursuant to Section 208 of the Act, 47 U.S.C.
§ 208. Similarly, nothing in this Consent Decree is dispositive
with respect to the rights of any third party or complainant who
has filed or may file a formal or informal complaint against the
Company pursuant to Section 208 of the Act, 47 U.S.C. § 208. If
any such complaint is made, the adjudication of that complaint
will be based solely on the record developed in that proceeding
and the Bureau shall not use any facts developed through the
Investigation in any such proceeding. Moreover, the existence of
this Consent Decree and the Order shall not be submitted in any
proceeding, legal or otherwise, other than to enforce this
Consent Decree and Order, as evidence of any act or omission by
WestCom, and shall not be deemed an admission or denial by
WestCom of any fact introduced therein.
26. Nothing in this Consent Decree shall preclude WestCom
from petitioning the Commission for relief as to future
obligations under Section 254 of the Act and the Commission's
Rules.
27. The Parties agree that the effectiveness of this
Consent Decree is expressly contingent upon the Bureau's issuance
of the Order adopting the Consent Decree without change,
addition, or modification.
28. 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.
29. The Parties 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 WestCom does not consent)
that provision will be superseded by such Commission rule or
order.
30. This Consent Decree may be signed in counterparts.
For the Enforcement Bureau
Federal Communications Commission
By: ____________________________ Date: _________
David H. Solomon
Chief, Enforcement Bureau
For WestCom Corporation
By: ____________________________ Date: _________
Michael Hirtenstein
President
_________________________
1 See Letter from William H. Davenport, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, to
Michael Hirtenstein, President and Chief Executive Officer,
WestCom Corporation, dated September 10, 2003 (``LOI'').
2 See 47 U.S.C. §§ 503(b)(5)(A) - (B); Consent Decree at ¶ 9.
3 See Letter from William H. Davenport, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, to
Michael Hirtenstein, President and Chief Executive Officer,
WestCom Corporation, dated September 10, 2003.