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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-04-IH-0518
)
)
Global Teldata II, LLC ) NAL/Acct. No. 200632080005
)
)
Apparent Liability for ) FRN No. 0010865996
Forfeiture )
NOTICE OF APPARENT LIABILITY
FOR FORFEITURE AND ORDER
Adopted: October 31, 2005 Released:
October 31, 2005
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for
Forfeiture (``NAL''), we find that a
telecommunications provider, operating since 2003
and at least indirectly benefiting from the federal
programs supporting the telecommunications industry
since that time, apparently failed to meet its
statutory and regulatory obligations relating to
those programs. Based upon the facts and
circumstances surrounding this matter, we conclude
that this company is apparently liable for a total
forfeiture of $236,774.
2. We specifically find that Global Teldata
II, LLC (``Global Teldata'') has apparently
violated section 64.1195 of the Commission's rules
by willfully and repeatedly failing to register
with the Commission until November 17, 2004.1 We
also find that Global Teldata has apparently
violated section 54.711(a) of the Commission's
rules by failing to timely submit certain
Telecommunications Reporting Worksheets
(``Worksheets'') prior to November 17, 2004.2
Finally, we find that Global Teldata has apparently
violated section 254(d) of the Communications Act
of 1934, as amended (the ``Act''),3 and section
54.706(a) of the Commission's rules by willfully
and repeatedly failing to contribute to the
Universal Service Fund (``USF'') on a timely basis
in 2004 and 2005.4
3. We are resolved to ensure a level
playing field for all companies that are required
to contribute to the maintenance of our various
Congressionally mandated programs, including the
federal universal service program. The failure of
a carrier to fulfill its obligation to contribute
to these programs has a direct and significant
detrimental impact on the programs and on other
industry participants because that failure removes
from the base of contributions telecommunications
revenues that otherwise should be included, thereby
forcing other telecommunications carriers to
shoulder additional costs associated with the
programs. Thus, this NAL and others like it
represent one element in a comprehensive approach
to improving the efficacy and fairness of the
universal service program as well as reducing
waste, fraud and abuse in the program.
II. BACKGROUND
4. The Commission is charged by Congress
with regulating interstate and international
telecommunications and ensuring that providers of
such telecommunications comply with the
requirements imposed on them by the Act and our
rules.5 The Commission also has been charged by
Congress to establish, administer and maintain
various telecommunications regulatory programs, and
to fund these programs through assessments on the
telecommunications providers that benefit from
them. To accomplish these goals, the Commission
established ``a central repository of key facts
about carriers'' through which it could monitor the
entry and operation of interstate
telecommunications providers to ensure, among other
things, that they are qualified, do not engage in
fraud, and do not evade oversight.6 Commission
rules require that, upon entry or anticipated entry
into interstate telecommunications markets,
telecommunications carriers register by submitting
information on FCC Form 499-A, also known as the
annual Telecommunications Reporting Worksheet.7
The Commission also requires telecommunications
providers to submit financial information on annual
and, subject to the de minimis exception,8
quarterly short-form Worksheets to enable the
Commission to determine and collect the statutorily
mandated program assessments.9
5. The Telecommunications Act of 1996
codified Congress' historical commitment to promote
universal service to ensure that consumers in all
regions of the nation have access to affordable,
quality telecommunications services.10 In
particular, section 254(d) of the Act requires,
among other things, that ``[e]very
telecommunications carrier [providing] interstate
telecommunications services . . . contribute, on an
equitable and nondiscriminatory basis, to the
specific, predictable, and sufficient mechanisms
established by the Commission to preserve and
advance universal service.''11 In implementing
this Congressional mandate, the Commission directed
all telecommunications carriers providing
interstate telecommunications services and certain
other providers of interstate telecommunications to
contribute to the Universal Service Fund based upon
their interstate and international end-user
telecommunications revenues.12 Failure by some
providers to pay their share into the Fund skews
the playing field by giving non-paying providers an
economic advantage over their competitors who must
shoulder more than their fair share of the costs of
the Fund.
6. The Commission has established specific
procedures to administer universal service and
other regulatory programs. A carrier must file
Worksheets for the purpose of determining its USF
and other regulatory fee program payments.13 These
periodic filings trigger a determination of
liability, if any, and subsequent billing and
collection by the entities that administer the
regulatory programs. USAC uses the revenue
projections submitted on the quarterly filings to
determine each carrier's universal service
contribution amount.14 Carriers are required to
pay their monthly USF contribution by the date
shown on their invoice.15 The Commission's rules
explicitly warn contributors that failure to file
their forms or submit their payments potentially
subjects them to enforcement action.16 Further,
under the Commission's ``red light rule,'' action
will be withheld on any application to the
Commission or request for authorization made by any
entity that has failed to pay when due its
regulatory program payments, such as USF
contributions, and if payment or payment
arrangements are not made within 30 days from
notice to the applicant, such applications or
requests will be dismissed.17
7. Global Teldata began operations on April
1, 2003 as a reseller of local exchange service and
intrastate, interstate, and international
interexchange service.18 Global Teldata II, LLC
was formed in a corporate reorganization of a
predecessor entity, Global Teldata Inc., effective
April 1, 2003.19 The predecessor, Global Teldata
Inc., had never registered with the Commission.
8. In 2004, the Enforcement Bureau
(``Bureau'') audit staff sought to identify
resellers of telecommunications service that failed
to register as telecommunications service providers
with the Commission, and, thus, may also have
failed to satisfy various Commission program
requirements.20 To identify such resellers, the
Bureau audit staff compared lists of resellers
provided by wholesale service providers against the
Commission's central repository of registered
telecommunications service providers with filer
identification numbers. If a reseller did not
appear to have an identification number, the audit
staff sent an inquiry to that reseller.
9. On March 30, 2004, the Bureau's audit
staff sent a letter to Global Teldata requesting
information pertaining to Global Teldata's
compliance with section 64.1195 of the Commission's
rules.21 Global Teldata responded to the March 30,
2004 Audit Letter on May 25, 2004,22 briefly
stating that it believed it was de minimis for USF
purposes in 2003.23 It did not register or file
any periodic Worksheets at this time or in the
following five months.
10. By late October 2004, Global Teldata had
still not registered with the Commission or filed
any Worksheets, and the Bureau therefore issued a
letter of inquiry to it on October 28, 2004.24 The
October 28, 2004 LOI directed Global Teldata, among
other things, to submit a sworn written response to
a series of questions relating to Global Teldata's
apparent failure to register and file
Telecommunications Reporting Worksheets and to make
mandated federal telecommunications regulatory
program payments. Global Teldata responded to the
October 28, 2004 LOI on November 17, 2004.25 In
the November 17, 2004 LOI Response, Global Teldata
reiterated that it believed it was de minimis for
USF purposes in 2003 and that it was unaware it
must file for the other programs notwithstanding a
de minimis USF obligation.26 In addition, Global
Teldata represented that in the first week of
November 2004, it received its final revenue
figures for October 2004 which, for the first time,
placed it over the de minimis threshold for USF
contributions.27 Global Teldata also stated that,
through a billing software package provided by a
third-party vendor, it automatically billed and
collected payments for the USF from its end-user
customers.28
11. On November 17, 2004, the same day that
Global Teldata filed the November 17, 2004 LOI
Response, it late-filed an initial 2004 Form 499-
A29 and an initial quarterly Worksheet for the
first quarter of 2005, due November 1, 2004.30
Since November 17, 2004, Global Teldata has timely
filed all subsequent annual and quarterly
Worksheets. Global Teldata began paying invoiced
monthly USF contributions on February 14, 2005 and
paid a total of $53,548 in several monthly
installments for invoiced USF adjustments
attributable to 2004.
12. On June 28, 2005 and August 17, 2005,
the Bureau issued follow-up LOIs to Global
Teldata,31 and Global Teldata responded on July 8,
200532 and August 29, 2005.33 The August 29, 2005
LOI Response indicated that Global Teldata's actual
international and interstate telecommunications
revenue from end users for January to October 2004
was $722,368, over three times the amount of
$204,016 originally identified in the November 17,
2004 LOI Response. The revised amount was larger
because Global Teldata did not previously include
USF charges that it had been recovering through its
third-party billing software and subscriber line
charges that it had been recovering in other line
items.34 The August 29, 2005 LOI Response further
showed that the correct amount of international and
interstate telecommunications revenue from end
users for the entire year 2004 was $868,542.35
Finally, the August 29, 2005 LOI Response indicated
that cumulative telecommunications revenue for the
first two months of 2004 was $128,785, already in
excess of the annual de minimis level.36
III. DISCUSSION
13. Under section 503(b)(1)(B) of the Act,
any person who is determined by the Commission to
have willfully or repeatedly failed to comply with
any provision of the Act or any rule, regulation,
or order issued by the Commission shall be liable
to the United States for a forfeiture penalty.37
Section 312(f)(1) of the Act defines willful as
``the conscious and deliberate commission or
omission of [any] act, irrespective of any intent
to violate'' the law.38 The legislative history to
section 312(f)(1) of the Act clarifies that this
definition of willful applies to both sections 312
and 503(b) of the Act,39 and the Commission has so
interpreted the term in the section 503(b)
context.40 The Commission may also assess a
forfeiture for violations that are merely repeated,
and not willful.41 ``Repeated'' means that the act
was committed or omitted more than once, or lasts
more than one day.42 To impose such a forfeiture
penalty, the Commission must issue a notice of
apparent liability and the person against whom the
notice has been issued must have an opportunity to
show, in writing, why no such forfeiture penalty
should be imposed.43 The Commission will then
issue a forfeiture if it finds by a preponderance
of the evidence that the person has violated the
Act or a Commission rule.44 As set forth below, we
conclude under this standard that Global Teldata is
apparently liable for a forfeiture for its apparent
willful and repeated violations of section 254(d)
of the Act45 and sections 54.706(a), 54.711(a), and
64.1195 of the Commission's rules.46
14. The fundamental issues in this case are
whether Global Teldata apparently violated the Act
and the Commission's rules by: (1) willfully or
repeatedly failing to register pursuant to section
64.1195 of the Commission's rules;47 (2) willfully
or repeatedly failing to timely file
Telecommunications Reporting Worksheets; and (3)
willfully or repeatedly failing to make requisite
contributions toward the Universal Service Fund
when due. We answer these questions affirmatively.
Based on a preponderance of the evidence, we
conclude that Global Teldata is apparently liable
for a forfeiture of $236,774 for apparently
willfully and repeatedly violating section 254(d)
of the Act,48 and sections 54.706(a), 54.711(a),
and 64.1195 of the Commission's rules.
15. Specifically, we propose the following
forfeitures for apparent violations within the last
year: (1) $100,000 for failure to register pursuant
to section 64.1195 of the Commission's rules;49 (2)
$50,000 for failure to file the quarterly
Telecommunications Reporting Worksheet due on
November 1, 2004 on a timely basis; and (3) $86,774
for failure to make three monthly USF contributions
on a timely basis. Although we propose forfeitures
only for apparent violations within the last year,
we discuss below the history of Global Teldata's
noncompliance in the prior year as useful
background, to demonstrate the scope of Global
Teldata's misconduct, and the context of the
misconduct that is within the statute of
limitations period and thus covered by this NAL.
III.A. Registration with the Commission
16. We conclude that Global Teldata has
apparently violated section 64.1195(a) of the
Commission's rules by failing to register with the
Commission from at least April 1, 2003 until
November 17, 2004.50 Global Teldata's failure to
register constitutes a clear violation of a vital
Commission rule. Section 64.1195(a) of the
Commission's rules unambiguously requires that all
carriers that provide, or plan to provide,
interstate telecommunications services register
with the Commission by submitting specified
information.51 Although Global Teldata has been
providing interstate telecommunications services
for several years, it failed to register in
accordance with section 64.1195(a) until November
17, 2004, over seven months after receiving the
initial March 30, 2004 Audit Letter, and only after
receiving the additional October 28, 2004 LOI. As
a result of its misconduct, Global Teldata operated
for a significant period without participation in
any of the programs tied to registration. As an
interstate telecommunications carrier, Global
Teldata had a clear and affirmative duty to apprise
itself of, and satisfy, its federal obligations.52
17. We view Global Teldata's apparent
failure to register for a significant period as a
serious dereliction of its responsibilities under
the Act and our rules. A carrier's compliance with
the Commission's registration requirement is
critical to the administration of the USF and other
programs, and to fulfilling Congress' objectives in
section 254(d) of the Act. As we noted above, a
carrier's duty to register upon entry, or
anticipated entry, into interstate
telecommunications markets is essential to the
fulfillment of the USF and other regulatory program
missions because it identifies the company to the
various program administrators and brings the
company within the purview and oversight of those
administrators. If a carrier never identifies
itself as a telecommunications provider by properly
registering under the Commission's rules, then
neither the Commission nor the various program
administrators can ascertain whether that carrier
has fulfilled its regulatory obligations, including
the requirement that carriers file Worksheets and
contribute to USF and other regulatory programs.
Moreover, the program administrators have no basis
upon which to invoice the carrier for
contributions. A telecommunications carrier that
fails to register thus can operate outside of the
Commission's oversight and evade its federal
obligations to contribute toward the vital programs
linked to registration.
18. The impact of a carrier's failure to
register is no less severe where, as here, that
carrier ultimately registers with the Commission.
Although Global Teldata registered on November 17,
2004, and has filed required Worksheets beginning
that month, Global Teldata delayed its registration
for a substantial period of time and took no action
until after receiving two letters from the
Bureau.53 The Commission has repeatedly stated
that post-investigative corrective measures to
address a violation do not eliminate a licensee's
responsibility for the period during which the
violation occurred.54 Global Teldata's substantial
delay in registering after receiving the Bureau's
initial letter raises serious questions about its
intention to do so absent threat of Commission
action. Based on a preponderance of the evidence,
therefore, we find that Global Teldata apparently
has violated section 64.1195(a) of the Commission's
rules by willfully and repeatedly failing to
register until November 17, 2004.55
III.B. Submission of Telecommunications Reporting
Worksheets
19. We conclude that Global Teldata
apparently has violated section 54.711(a) of the
Commission's rules by willfully and repeatedly
failing to file certain Telecommunications
Reporting Worksheets, on a timely basis, until
November 17, 2004.56 Section 54.711(a) of the
Commission's rules clearly establishes a carrier's
obligation to file periodic Telecommunications
Reporting Worksheets.57 A carrier's failure to
file these Worksheets as required has serious
implications for the USF and other programs. As
discussed above, the filing of a Telecommunications
Reporting Worksheet prompts a determination of
liability for, and subsequent billing and
collection of, payments by the administrators of
the Universal Service Fund and other regulatory
programs. With regard to the federal universal
service program in particular, the failure of a
carrier such as Global Teldata to abide by its
federal filing obligation has a direct and profound
detrimental impact by removing from the base of USF
contributions telecommunications revenues that
otherwise should be included, thereby shifting to
compliant carriers additional economic burdens
associated with the federal universal service
program.58 Consequently, a carrier's failure to
file required Worksheets frustrates the very
purpose for which Congress enacted section 254(d) -
to ensure that every interstate carrier
``contribute, on an equitable and nondiscriminatory
basis, to the specific, predictable, and sufficient
mechanisms established by the Commission to
preserve and advance universal service.''59 Viewed
in this context, the Telecommunications Reporting
Worksheet is not only an administrative tool, but a
fundamental and critical component of the
Commission's Universal Service program.
20. Based on a preponderance of the
evidence, we find that Global Teldata apparently
has violated section 254 of the Act60 and section
54.711 of the Commission's rules61 by willfully and
repeatedly failing to timely file required
information with the Commission on multiple
occasions until November 17, 2004. It is clear
that Global Teldata was not de minimis for USF
purposes as of the end of February 2004 when its
cumulative interstate and international
telecommunications revenue from end-users reached
$128,785. Failure to file Worksheets after that
time is a violation of our rules. Global Teldata's
failures to timely file Worksheets include its
failure to file the quarterly Worksheet due on
November 1, 2004, which is within the last year and
is the basis for that component of the proposed
forfeiture in this NAL.62
III.C. Universal Service Contributions
21. We further conclude that Global Teldata
apparently violated section 254(d) of the Act and
section 54.706 of the Commission's rules by
willfully and repeatedly failing to contribute to
universal service support mechanisms on a timely
basis on several occasions in 2004 and 2005.63
Section 54.706(c) of the Commission's rules
unambiguously directs that ``entities [providing]
interstate telecommunications to the public . . .
for a fee . . . contribute to the universal service
support programs.''64 Although section 54.708 of
the rules exempts de minimis carriers from
contribution, Global Teldata's applicable revenue
exceeded the threshold beginning in February
2004.65 As we previously have stated,
[c]arrier nonpayment of universal service
contributions undermines the efficiency and
effectiveness of the universal service support
mechanisms. Moreover, delinquent carriers may
obtain a competitive advantage over carriers
complying with the Act and our rules. We consider
universal service nonpayment to be a serious
threat to a key goal of Congress and one of the
Commission's primary responsibilities.66
Based on a preponderance of the evidence, we find that Global
Teldata apparently has violated sections 254(d) of the Act and
54.706 of the Commission's rules by willfully and repeatedly
failing to timely make its monthly universal service contribution
payments. Since Global Teldata did not make its first payment to
the USF until February 2005, its failures to make monthly
payments include three violations within the twelve months
immediately preceding the date of this NAL, i.e., the payments
due November 15 and December 15, 2004 and January 15, 2005.
Those three violations are the basis for that component of the
proposed forfeiture in this NAL.
III.D. Proposed Forfeiture
22. Section 503(b)(1)(B) of the Act provides
that any person that willfully or repeatedly fails
to comply with any provision of the Act or any
rule, regulation, or order issued by the
Commission, shall be liable to the United States
for a forfeiture penalty.67 Section 503(b)(2)(B)
of the Act authorizes the Commission to assess a
forfeiture of up to $130,000 for each violation or
each day of a continuing violation, up to a
statutory maximum of $1.325 million for a single
act or failure to act.68 In determining the
appropriate forfeiture amount, we consider the
factors enumerated in section 503(b)(2)(D) of the
Act, including ``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.''69
23. Under section 503(b)(6) of the Act, we
may only propose forfeitures for apparent
violations that occurred within one year of the
date of this NAL.70 Nevertheless, section 503(b)
does not bar us from assessing whether Global
Teldata's conduct prior to that time period
apparently violated the Act or our rules in
determining the appropriate forfeiture amount for
those violations within the statute of
limitations.71 Therefore, although we find that
Global Teldata apparently violated the Act and our
rules for several years, we propose forfeitures
here only for violations that occurred within the
last year.
24. This case involves a carrier's dual
failures with respect to reporting obligations:
first, Global Teldata failed to register until
November 17, 2004; and second, it failed to submit
any periodic Telecommunications Reporting
Worksheets from the time its telecommunications
revenues exceeded de minimis levels in early 2004
until November 17, 2004. In both cases, it
effectively addressed compliance only after
receiving two letters from the Bureau. We find
Global Teldata's failure to discharge its federal
reporting obligations to be particularly egregious.
As we stated above, the registration and filing of
Telecommunications Reporting Worksheets are
fundamental to the implementation of our central
repository of carriers and to the administration of
multiple statutorily derived programs - including
the Universal Service Fund. Where, as here, a
carrier ignores its obligations by wholly failing
to register for a long period - thereby affecting
the time and manner in which these important
federal programs are funded - it undermines the
programs and thwarts the purposes for which
Congress and the Commission established them.
25. Recently, we have held that a
substantial forfeiture of $100,000 is warranted for
a carrier's failure to register with the
Commission.72 We explained that ``[t]his egregious
behavior strikes at the core of our ability to
implement and enforce the Act and our rules
effectively, thus warranting a substantial
forfeiture.''73 A carrier that fails to register
hampers ``efficient and effective Commission
enforcement by delaying detection of, and action
against, its behavior . . . and imposes a
substantial burden on the Commission, which can
only identify such carriers through compliance
review programs that require significant amounts of
staff time and resources.''74 Taking into account
all of the factors enumerated in section
503(b)(2)(D) of the Act, we conclude that this same
reasoning accurately describes the impact of Global
Teldata's misconduct, and that a proposed
forfeiture of $100,000 is therefore warranted.
26. In the past, we have held that a
substantial forfeiture of $50,000 is warranted for
a carrier's failure to file a Telecommunications
Reporting Worksheet for revenue reporting
purposes.75 As in these past cases, we find that
Global Teldata's willful and repeated failure to
file periodic Telecommunications Reporting
Worksheets is egregious. A carrier's obligation to
file these Worksheets is directly linked to, and
thus has serious implications for, administration
of the USF and other regulatory programs. By
ignoring its reporting obligations, Global Teldata
has unilaterally shifted to compliant carriers and
their customers the economic costs associated with
the universal service and other regulatory
programs. Therefore, we find that Global Teldata
is apparently liable for a $50,000 forfeiture for
its failure to timely file one Worksheet within the
last year; i.e., the one due November 1, 2004.
27. Based on the facts above, it also
appears that Global Teldata has failed to make
timely requisite contributions into the Universal
Service Fund for 2004, even though its
telecommunications revenues clearly exceeded de
minimis levels from early that year. Again,
nonpayment of universal service contributions is an
egregious offense that bestows on delinquent
carriers an unfair competitive advantage by
shifting to compliant carriers the economic costs
and burdens associated with universal service. A
carrier's failure to make required universal
service contributions frustrates Congress' policy
objective in section 254(d) of the Act to ensure
the equitable and non-discriminatory distribution
of universal service costs among all
telecommunications providers.76 The Commission has
established a base forfeiture amount of $20,000 for
each month in which a carrier has failed to make
required universal service contributions.77 At a
minimum, Global Teldata is apparently liable for a
base forfeiture of $60,000 for its willful and
repeated failure to make three universal service
contributions when due within the past year, i.e.,
the payments due on November 15 and December 15,
2004, and January 15, 2005.
28. In the past, we have calculated upward
adjustments to forfeitures for failure to make USF
payments based on half of the company's unpaid
contributions.78 As explained above, USAC records
show that Global Teldata owed $53,548 for total
2004 USF contributions. Therefore, taking into
account all of the factors enumerated in section
503(b)(2)(D) of the Act, we propose an upward
adjustment of $26,774 - half the amount that Global
Teldata owed for 2004 USF contributions - for
Global Teldata's apparent failure to make universal
service contributions. We thus find Global Teldata
liable for a total proposed forfeiture of $86,774
for its apparent willful and repeated failures to
make timely contributions into the Universal
Service Fund.
IV. CONCLUSION
29. In light of the seriousness, duration
and scope of the apparent violations, and to ensure
that a company with substantial revenues such as
Global Teldata does not consider the proposed
forfeiture merely ``an affordable cost of doing
business,''79 we find that a proposed forfeiture in
the amount of $236,774 is warranted. As discussed
above, this proposed forfeiture amount includes:
(1) a total proposed penalty of $100,000 for
failing to register pursuant to section 64.1195 of
the Commission's rules;80 (2) a total proposed
penalty of $50,000 for failing to file one
Telecommunications Reporting Worksheet within the
past year; and (3) a total proposed penalty of
$86,774 for failing to make three monthly universal
service contributions when due within the past
year.
30. We caution that additional violations of
the Act or the Commission's rules could subject
Global Teldata to further enforcement action. Such
action could take the form of higher monetary
forfeitures and/or possible revocation of Global
Teldata's operating authority, including
disqualification of Global Teldata's principals
from the provision of any interstate common carrier
services without the prior consent of the
Commission.81 In addition, we note that, to the
extent Global Teldata is ever found to be
delinquent on any debt owed to the Commission
(e.g., has failed to pay all of its USF
contributions), the Commission will not act on, and
may dismiss, any application or request for
authorization filed by Global Teldata, in
accordance with the agency's ``red light'' rules.82
V. ORDERING CLAUSES
31. ACCORDINGLY, IT IS ORDERED THAT,
pursuant to section 503(b) of the Communications
Act of 1934, as amended,83 and section 1.80 of the
Commission's rules,84 Global Teldata II, LLC is
hereby NOTIFIED of its APPARENT LIABILITY FOR A
FORFEITURE in the amount of $236,774 for willfully
and repeatedly violating the Act and the
Commission's rules.
32. IT IS FURTHER ORDERED THAT, pursuant to
section 1.80 of the Commission's Rules,85 within
thirty days of the release date of this NOTICE OF
APPARENT LIABILITY, Global Teldata II, LLC SHALL
PAY the full amount of the proposed forfeiture or
SHALL FILE a written statement seeking reduction or
cancellation of the proposed forfeiture.
33. Payment of the forfeiture must be made
by check or similar instrument, payable to the
order of the Federal Communications Commission.
The payment must include the NAL/Acct. No. and FRN
No. referenced above. Payment by check or money
order may be mailed to Federal Communications
Commission, P.O. Box 358340, Pittsburgh, PA 15251-
8340. Payment by overnight mail may be sent
to Mellon Bank /LB 358340, 500 Ross Street, Room
1540670, Pittsburgh, PA 15251. Payment by wire
transfer may be made to ABA Number 043000261,
receiving bank Mellon Bank, and account number 911-
6106.
34. The response, if any, to this NOTICE OF
APPARENT LIABILITY must be mailed to William H.
Davenport, Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal
Communications Commission, Room 4-A237, 445 12th
Street, S.W., Washington, D.C. 20554 and must
include the NAL/Acct. No. referenced above.
35. 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.
36. Requests for payment of the full amount
of this NAL under an installment plan should be
sent to Chief, Credit and Management Center, 445
12th Street, S.W., Washington, D.C. 20554.86
37. IT IS FURTHER ORDERED that a copy of
this NOTICE OF APPARENT LIABILITY AND ORDER shall
be sent by certified mail, return receipt
requested, to Darius B. Withers, Kelly Drye and
Warren LLP, Counsel to Global Teldata II, LLC, 1200
19th Street N.W., Suite 500, Washington, D.C.
20036; and Edward M. O'Reilly, Controller, Global
Teldata II, LLC, 4646 North Ravenswood Avenue,
Chicago, Illinois 60640.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
_________________________
1 47 C.F.R. § 64.1195.
2 47 C.F.R. §§ 54.711(a), 64.604(c)(5)(iii)(B).
3 47 U.S.C. § 254(d).
4 47 C.F.R. § 54.706(a).
5 See, e.g., 47 U.S.C. § 151.
6 See Implementation of the Subscriber Carrier Selection
Provisions of the Telecommunications Act of 1996, Third Report
and Order and Second Order on Reconsideration, 15 FCC Rcd 15996,
16024 (2000) (``Carrier Selection Order'').
7 47 C.F.R. § 64.1195.
8 Pursuant to the de minimis exception, contributors that owe
less than $10,000 to the USF in any given year are not required
to contribute to the fund or file Worksheets (annual or
quarterly) for that year for purposes of the USF. 47 C.F.R. §
54.708. Based on Global Teldata's reported revenue for 2003 as
reported in its 2004 Form 499-A, it was a de minimis carrier in
2003. However, even though the de minimis exception excuses
carriers from filing Worksheets for purposes of the USF, the
rules still require carriers such as Global Teldata to file
annual Worksheets for purposes of other regulatory programs, such
as the Telecommunications Relay Service. Id. See also 47 C.F.R.
§ 64.604(c)(5)(iii)(B) (requiring common carriers to submit
Worksheets for the TRS Fund).
9 See 47 U.S.C. §§ 225(d)(3); 254(d). In 1999, to streamline the
administration of the programs and to ease the burden on
regulatees, the Commission consolidated the information filing
requirements for multiple telecommunications regulatory programs
into the annual Telecommunications Reporting Worksheet. See 1998
Biennial Regulatory Review, Report and Order, 14 FCC Rcd 16602
(1999). The next year the Commission revised the
Telecommunications Reporting Worksheet slightly to collect the
additional information necessary to achieve its goal of
establishing a central repository for interstate
telecommunications providers by the least provider-burdensome
method. Carrier Selection Order, 15 FCC Rcd at 16026.
10 The Telecommunications Act of 1996 amended the Communications
Act of 1934. See Telecommunications Act of 1996, Pub. L. No.
104-104, 110 Stat. 56 (1996).
11 47 U.S.C. § 254(d).
12 47 C.F.R. § 54.706(b). Beginning April 1, 2003, carrier
contributions were based on a carrier's projected, rather than
historical, revenues. Id.
13 Upon submission of a Form 499-A registration, the carrier is
issued a filer identification number by USAC. The filer
identification number is then to be included on all further
filings by the company and is used by the Commission and its
administrators to track the carrier's contributions and invoices.
Unless they qualify for the de minimis exception, see supra note
8, interstate telecommunications carriers must file FCC Form 499-
Q quarterly, reporting revenue information by February 1, May 1,
August 1 and November 1 of each year, and FCC Form 499-A
annually, by April 1 of each year. See Instructions for
Completing the Worksheet for Filing Contributions to
Telecommunications Relay Service, Universal Service, Number
Administration and Local Number Portability Support Mechanisms,
FCC Form 499, April 2004, at 9.
14 Individual universal service contribution amounts that are
based upon quarterly filings are subject to an annual true-up.
See Federal-State Joint Board on Universal Service, Petition for
Reconsideration filed by AT&T, Report and Order and Order on
Reconsideration, 16 FCC Rcd 5748 (2001); 47 C.F.R. § 54.709(a).
15 See Globcom, Inc., Notice of Apparent Liability for Forfeiture
and Order, 18 FCC Rcd 19893, 19896, ¶ 5 (2003); 47 C.F.R. §
54.711(a) (``The Commission shall announce by Public Notice
published in the Federal Register and on its website the manner
of payment and the dates by which payments must be made.'').
See, e.g., ``Proposed Third Quarter 2003 Contribution Factor,''
Public Notice, 18 FCC Rcd 11442 (WCB 2003) (``Contribution
payments are due on the date shown on the [USAC] invoice.'').
The Act and our rules, however, do not condition payment on
receipt of an invoice or other notice from USAC. See 47 U.S.C. §
254(d); 47 C.F.R. § 54.706(b). A carrier that does not file may
not receive an invoice from USAC, but is nonetheless required to
contribute to the universal service fund, unless its revenues are
considered de minimis. Globcom, Inc., 18 FCC Rcd at 19896, ¶ 5 &
n.22. The instructions for the Telecommunications Reporting
Worksheet include tables for carriers to determine their annual
contributions. Global Teldata qualified for the de minimis
exception in 2003 but not thereafter.
16 47 C.F.R. § 54.713.
17 47 C.F.R. § 1.1910. The rule went into effect on November 1,
2004. See ``FCC Announces Brief Delay in Enforcement of Red
Light Rule,'' Public Notice, 19 FCC Rcd 19452 (2004).
18 See Letter from Darius B. Withers, Kelly Drye and Warren LLP,
Counsel to Global Teldata II, LLC, to Gerald H. Chakerian,
Attorney, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, dated November 17,
2004 (``November 17, 2004 LOI Response'') at 1.
19 See id.
20 See 47 C.F.R. § 64.1195(a).
21 See Letter from Hugh Boyle, Chief Auditor, Investigations and
Hearings Division, Enforcement Bureau, Federal Communications
Commission, to Global Teldata II, LLC, dated March 30, 2004
(``March 30, 2004 Audit Letter'').
22 See E-mail from Erin R. Swansiger, Kelly Drye and Warren LLP,
Counsel to Global Teldata II, LLC, to Hugh Boyle, Chief Auditor,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, dated May 25, 2004.
23 See note 8, supra, regarding the de minimis exception for
filing if a carrier's USF contribution in any given year is less
than $10,000.
24 See Letter from Hillary S. DeNigro, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, to Erin R. Swansiger, Kelly Drye and
Warren LLP, Counsel to Global Teldata II, LLC, dated October 28,
2004 (``October 28, 2004 LOI'').
25 November 17, 2004 LOI Response (see note 18, supra).
26 See id. (Inquiry Nos. 7-11). For a description of the de
minimis exception, see note 8, supra.
27 See id. (Inquiry Nos.7-8) and Exhibits E & F. These responses
indicated that total telecommunications revenue in 2003 was
$99,087 and cumulative telecommunications revenue from January to
October 2004 was $204,016 (Global Teldata did not provide a
month-by-month breakdown of these revenues).
28 See id. (Inquiry No. 14) and Exhibit G. Global Teldata stated
that it collected $27,459 for the USF in 2003 and $42,784 for the
USF in 2004. It did not specifically state whether it was aware
of these collections at the time.
29 See id. (Inquiry Nos. 7-8) and Exhibit E. This filing was
apparently intended to serve both as a late-filed registration
that had been due since the beginning of business on April 1,
2003, and as a late-filed annual 2004 Form 499-A Worksheet for
2003 that had been due since April 1, 2004. Global reiterated
here that it was a de minimis carrier for the year 2003.
30 See id. (Inquiry No. 8) and Exhibit F. This filing was
designated as a quarterly Worksheet due on November 1, 2004.
31 Letter from Hillary S. DeNigro, Deputy Chief, Investigations
and Hearings Division, Enforcement Bureau, Federal Communications
Commission, to Darius B. Withers, Kelly Drye and Warren LLP,
Counsel to Global Teldata II, LLC, dated June 28, 2005 (``June
28, 2005 LOI''); Letter from Hillary S. DeNigro, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, to Darius B. Withers, Kelly Drye and
Warren LLP, Counsel to Global Teldata II, LLC, dated August 17,
2005 (``August 17, 2005 LOI'').
32 See Letter from Darius B. Withers, Kelly Drye and Warren LLP,
Counsel to Global Teldata II, LLC, to Gerald H. Chakerian,
Attorney, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, dated July 8, 2005
(``July 8, 2005 LOI Response'').
33 See Letter from Darius B. Withers, Kelly Drye and Warren LLP,
Counsel to Global Teldata II, LLC, to Gerald H. Chakerian,
Attorney, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, dated August 29, 2005
(``August 29, 2005 LOI Response'').
34 Id. at 1 and Exhibit A. Global Teldata's first quarterly
Worksheet that was late-filed on November 17, 2004 contained this
same error. See July 8, 2005 LOI Response at Exhibit A; November
17, 2004 LOI Response at Exhibit F.
35 See July 8, 2005 LOI Response at Exhibit B. This amount is
consistent with the 2005 Annual Worksheet, filed on March 31,
2005, that served as a true-up for 2004.
36 See August 29, 2005 LOI Response at Exhibit A.
37 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1).
38 47 U.S.C. § 312(f)(1).
39 H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
40 See, e.g., Application for Review of Southern California
Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387,
4388 (1991) (``Southern California Broadcasting Co.'').
41 See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana,
Notice of Apparent Liability for Monetary Forfeiture, 16 FCC Rcd
1359 (2001) (issuing a Notice of Apparent Liability for, inter
alia, a cable television operator's repeated signal leakage).
42 Callais Cablevision, Inc., 16 FCC Rcd at 1362, ¶ 9; Southern
California Broadcasting Co., 6 FCC Rcd at 4388, ¶ 5.
43 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).
44 See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC
Rcd 7589, 7591, ¶ 4 (2002) (``SBC Forfeiture Order'') (forfeiture
paid).
45 47 U.S.C. § 254(d).
46 47 C.F.R. §§ 54.706(a), 54.711(a), 64.1195.
47 47 C.F.R. § 64.1195.
48 47 U.S.C. § 254(d).
49 47 C.F.R. § 64.1195.
50 As indicated above, Global Teldata was formed in a corporate
reorganization of a predecessor entity on April 1, 2003. See
supra ¶ 7. That entity had not registered with the Commission,
see supra note 19, such that Global Teldata's period of
noncompliance is likely to be even longer, as the registration
requirement became effective in 2001. See 66 Fed. Reg. 17083
(March 29, 2001) (announcing that OMB-approved information
collection requirement in section 64.1195 would take effect on
April 2, 2001).
51 47 C.F.R. § 64.1195. The Commission adopted the registration
requirement in section 64.1195(a) after finding that such a
requirement would enable it to better monitor the entry of
carriers into the interstate telecommunications market and any
associated increases in slamming activity, and, among other
things, would enhance the Commission's ability to take
appropriate enforcement action against carriers that have
demonstrated a pattern or practice of slamming. See Carrier
Selection Order, 15 FCC Rcd at 16024 ¶ 62.
52 See The Commission's Forfeiture Policy Statement and Amendment
of Section 1.80 of the Commission's Rules, Report and Order, 12
FCC Rcd 17087, 17099, ¶ 22 (1997) (``Forfeiture Policy
Statement''), recon. denied, 15 FCC Rcd 303 (1999) (``The
Commission expects, and it is each licensee's obligation, to know
and comply with all of the Commission's rules.''); Telecom House,
Inc., Notice of Apparent Liability for Forfeiture and Order, FCC
05-168, 2005 WL 2233570 (F.C.C.) at ¶ 28 (released September 13,
2005); InPhonic, Inc., Notice of Apparent Liability for
Forfeiture and Order, FCC 05-145, 2005 WL 1750418 (F.C.C.) at ¶
25 (released July 25, 2005); Teletronics, Inc., Notice of
Apparent Liability for Forfeiture and Order, FCC 05-146, 2005 WL
1750420 (F.C.C.) at ¶ 30 (released July 25, 2005).
53 See March 30, 2004 Audit Letter; October 28, 2004 LOI.
54 AT&T Wireless Services, Inc., Forfeiture Order, 17 FCC Rcd
21866, 21870-71, (2002); America's Tele-Network Corp., Order of
Forfeiture, 16 FCC Rcd 22350, 22355, ¶ 15 (2001); Coleman
Enters., Inc. d/b/a/ Local Long Distance, Inc., Order of
Forfeiture, 15 FCC Rcd 24385, 24388, ¶ 8 (2000).
55 The proposed forfeitures in this NAL relate only to violations
occurring within a year of release of this NAL.
56 47 C.F.R. § 54.711(a).
57 Id. In addition, although the de minimis exception set forth
in section 54.708 of the Commission's rules excuses carriers from
filing the Worksheets for purposes of USF, that exception is
explicitly qualified by other rules that require carriers to file
the annual Worksheet. Id. § 54.708. Thus, to the extent that
Global Teldata's LOI responses indicate that the company
qualified for the exception in calendar year 2003, and therefore
was not required to file either annual or quarterly forms
relating to revenues from that year for purposes of USF, the
company was still required to file the annual form relating to
that year for other regulatory programs. See, e.g., id. §
4.604(c)(5)(iii)(B).
58 Sixty days prior to the start of each quarter, USAC is
required to provide the Commission with a projection of the high
cost, low income, schools and libraries, and rural health care
funding requirements for the following quarter. See
www.universalservice.org/overview/filings. Based on USAC's
projection of the needs of the USF, and revenue projections from
the registered carriers subject to universal service
requirements, the Commission establishes a specific percentage of
interstate and international end-user revenues that each subject
telecommunications provider must contribute toward the USF. This
percentage is called the contribution factor. The contribution
factor, and, consequently, the amount owed to the USF by each
affected telecommunications company, changes each quarter,
depending on the needs of the USF and carrier-provided revenue
projections. See www.fcc.gov/wcb/universal_service/quarter.
Thus, in cases where a carrier, such as Global Teldata, fails to
file required Worksheets reporting its revenue projections in a
timely fashion, its revenues are excluded from the contribution
base from which universal assessments are derived, and the
economic burden of contributing falls disproportionately on
carriers that have satisfied their reporting obligations.
59 47 U.S.C. § 254(d).
60 47 U.S.C. § 254.
61 47 C.F.R. §§ 54.711, 64.604.
62 Moreover, as discussed in note 34, supra, Global Teldata's
late-file Worksheet for this quarter understated
telecommunications revenue by a wide margin. See Globcom, Inc.,
18 FCC Rcd at 19901-2, ¶¶ 19-20 (finding apparent liability for
forfeiture for reporting inaccurate information).
63 47 U.S.C. § 254(d); 47 C.F.R. § 54.706.
64 47 C.F.R. § 54.706(c).
65 See 47 C.F.R. § 54.708.
66 Globcom, Inc., Notice of Apparent Liability for Forfeiture and
Order, 18 FCC Rcd 19893, 19903, ¶ 26 (2003).
67 47 U.S.C. § 503(b)(1)(B); see also 47 C.F.R. § 1.80(a)(2).
68 47 U.S.C. § 503(b)(2)(B); see also 47 C.F.R. § 1.80(b)(2).
Effective September 7, 2004, the Commission amended its rules to
increase the maximum penalties to account for inflation since the
last adjustment of the penalty rates. See Amendment of Section
1.90 of the Commission's Rules, Order, 19 FCC Rcd 10945, 10946 ¶
6 (2004).
69 47 U.S.C. § 503(b)(2)(D); see also Forfeiture Policy
Statement, 12 FCC Rcd at 17100, ¶ 27; 47 C.F.R. § 1.80(b).
70 47 U.S.C. § 503(b)(6)(B); see also 47 C.F.R. § 1.80(c)(3).
71 See, e.g., Carrera Communications, LP, Notice of Apparent
Liability for Forfeiture and Order, FCC 05-147, 2005 WL 1750417
(F.C.C.) at ¶ 24 (released July 25, 2005); InPhonic, Inc., Notice
of Apparent Liability for Forfeiture and Order, FCC 05-145, 2005
WL 1750418 (F.C.C.) at ¶ 24 (released July 25, 2005);
Teletronics, Inc., Notice of Apparent Liability for Forfeiture
and Order, FCC 05-146, 2005 WL 1750420 (F.C.C.) at ¶ 28 (released
July 25, 2005); Globcom, Inc., 18 FCC Rcd at 19903; Roadrunner
Transp., Inc., Forfeiture Order, 15 FCC Rcd 9669, 9671 (2000);
Liab. of E. Broad. Corp., Memorandum Opinion and Order, 10 F.C.C.
2d 37 (1967).
72 See Telecom House, Inc., 2005 WL 2233570 (F.C.C.) at ¶ 29
(released Sept. 13, 2005); InPhonic, Inc., 2005 WL at 1750418
(F.C.C.) at ¶ 26; Teletronics, Inc., 2005 WL 1750420 (F.C.C.) at
¶ 30.
73 See, e.g., InPhonic, Inc., 2005 WL at 1750418 (F.C.C.) at ¶
26.
74 Id.at ¶ 26.
75 Globcom, Inc., 18 FCC Rcd at 19905. See also BCE Nexxia
Corp., Notice of Apparent Liability for Forfeiture and Order, FCC
05-167, 2005 WL 2233569 (F.C.C.) at ¶ 19 (released Sept. 13,
2005); Telecom House, Inc., 2005 WL 2233570 (F.C.C.) at ¶ 30;
Carrera Communications, Inc., 2005 WL 1750417 (F.C.C.) at ¶ 25;
InPhonic, Inc., 2005 WL 1750418 (F.C.C.) at ¶ 27; Teletronics,
Inc., 2005 WL 1750420 (F.C.C.) at ¶ 31.
76 See 47 U.S.C. § 254(d).
77 See Globcom, Inc., 18 FCC Rcd at 19903-19904, ¶¶ 25-27. See
also BCE Nexxia Corp., 2005 WL 2233569 (F.C.C.) at ¶ 20; Telecom
House, Inc., 2005 WL 2233570 (F.C.C.) at ¶ 31; Telecom Mgmt.,
Inc., Notice of Apparent liability for Forfeiture, FCC 05-156,
2005 WL 1949643 (F.C.C.) at ¶ 17 (released Aug. 12, 2005);
Carrera Communications, Inc., 2005 WL 1750417 (F.C.C.) at ¶ 26;
InPhonic, Inc., 2005 WL 1750418 (F.C.C.) at ¶ 28; Teletronics,
Inc., 2005 WL 1750420 (F.C.C.) at ¶ 32.
78 See, e.g., Globcom, Inc., 18 FCC Rcd at 19903-19904, ¶¶ 25-27.
See also BCE Nexxia Corp., 2005 WL 2233569 (F.C.C.) at ¶ 21;
Telecom House, Inc., 2005 WL 2233570 (F.C.C.) at ¶ 32; Telecom
Mgmt., Inc., 2005 WL 1949643 (F.C.C.) at ¶ 18; Carrera
Communications, Inc., 2005 WL 1750417 (F.C.C.) at ¶ 27;
InPhonic, Inc., 2005 WL 1750418 (F.C.C.) at ¶ 29; OCMC, Inc.,
Notice of Apparent Liability for Forfeiture, FCC 05-157, 2005 WL
1949644 (F.C.C.) at ¶ 19; Teletronics, Inc., 2005 WL 1750420
(F.C.C.) at ¶ 32.
79 Forfeiture Policy Statement, 12 FCC Rcd at 17099; see also 47
C.F.R. § 1.80(b)(4).
80 47 C.F.R. § 64.1195.
81 See Business Options, Inc., Consent Decree, 19 FCC Rcd 2916
(2003); NOS Communications, Inc., Affinity Network Incorporated
and NOSVA Limited Partnership, Consent Decree, 2003 WL 22439710
(2003).
82 47 C.F.R. § 1.1910.
83 47 U.S.C. § 503(b).
84 47 C.F.R. § 1.80.
85 See 47 C.F.R. § 1.80(f)(3).
86 See 47 C.F.R. § 1.1914.