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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-05-IH-0034
In the Matter of
) Acct. No. 911-6229
Intelecom Solutions, Inc.
) FRN No. 0011-3836-92
)
ORDER
Adopted: December 21, 2006 Released: December 21, 2006
By the Chief, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau ("Bureau") of the Federal
Communications Commission and Intelecom Solutions, Inc. ("Intelecom").
The Consent Decree terminates an investigation initiated by the Bureau
into possible violations of section 254 of the Communications Act of
1934, as amended ("the Act"), relating to universal service, and,
among others, sections 1.1157, 52.17, 54.706, 54.711, 64.604, and
64.1195 of the Commission's rules relating to carrier registration,
revenue reporting, and contribution to certain regulatory programs.
2. The Bureau and Intelecom have negotiated the terms of a Consent Decree
that resolves this matter. A copy of the Consent Decree is attached
hereto and incorporated by reference.
3. 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 Intelecom possesses the basic qualifications, including those
related to character, to hold or obtain any Commission license or
authorization.
4. After reviewing the terms of the Consent Decree, we find that the
public interest will be served by adopting the Consent Decree.
5. Accordingly, IT IS ORDERED that, pursuant to section 4(i) of the
Communications Act of 1934, as amended, the Consent Decree attached to
this Order IS ADOPTED.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
See Letter from Hillary S. DeNigro, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, FCC, to Henry Fiorillo, Chief
Financial Officer, Intelecom Solutions, Inc., dated Jan. 26, 2005 ("LOI").
47 U.S.C. S 254(d).
47 C.F.R. SS 1.1157, 52.17, 54.706, 54.711, 64.604, 64.1195.
47 U.S.C. S 154(i).
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Before the
Federal Communications Commission
Washington, DC 20554
)
) File No. EB-05-IH-0034
In the Matter of
) Acct. No. 911-6229
Intelecom Solutions, Inc.
) FRN No. 0011-3836-92
)
CONSENT DECREE
1. The Enforcement Bureau ("Bureau") of the Federal Communications
Commission (the "Commission" or "FCC") and Intelecom Solutions, Inc.
("Intelecom" or the "Company"), by their authorized representatives,
hereby enter into this Consent Decree for the purpose of terminating
the Bureau's investigation into whether Intelecom violated section 254
of the Communications Act of 1934, as amended (the "Act"), relating to
universal service, and certain of the Commission's rules relating to
carrier registration, universal service, the Telecommunications Relay
Services, the North American Numbering Plan Administration, and
regulatory fees.
2. For the purposes of this Consent Decree, the following definitions
shall apply:
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C. S
151 et seq.
b. "Commission" and "FCC" mean the Federal Communications Commission,
and all of its bureaus and offices.
c. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
d. The "Company" or "Intelecom" shall mean Intelecom Solutions, Inc.,
any affiliate, d/b/a, predecessor-in-interest, parent companies, any
wholly or partially owned subsidiary, or other affiliated companies
or businesses, and all directors, officers, employees or agents,
including consultants and any other persons working for or on behalf
of the foregoing at any time during the period covered by this
letter, unless otherwise noted.
e. "Parties" means Intelecom and the Commission.
f. "Order" or "Adopting Order" means an Order of the Bureau adopting the
terms of this Consent Decree without change, addition, deletion, or
modification.
g. "Effective Date" means the date on which the Bureau releases the
Adopting Order.
h. "Investigation" means the investigation commenced by the Bureau's
March 30, 2004 letter regarding Intelecom's compliance with the
registration requirement of section 64.1195 of the Commission's rules
and the Bureau's January 26, 2005 letter of inquiry regarding whether
Intelecom violated the requirements of section 254 of the Act and/or
sections 1.1157, 52.17, 54.706, 54.711, 64.604, and 64.1195 of the
Commission's rules relating to carrier registration, universal
service, the Telecommunications Relay Service, the North American
Numbering Plan Administration, and regulatory fees.
I. BACKGROUND
3. Pursuant to section 64.1195(a) of the Commission's rules, all carriers
that provide interstate telecommunications service must register with
the Commission through submission of FCC Form 499-A. In addition,
pursuant to section 254(d) of the Act and sections 54.706(a) and
54.711(a) of the Commission's rules, telecommunications carriers that
provide interstate telecommunications services and private service
providers that provide interstate telecommunications services are
required to file annual and quarterly Telecommunications Reporting
Worksheets (FCC Forms 499-A and 499-Q) and contribute to the Universal
Service Fund.
4. Section 225(b)(1) of the Act codifies Title IV of the Americans with
Disabilities Act of 1990. In support of that Act, section 64.604 of
the Commission's rules requires every carrier that provides interstate
telecommunications services to file Telecommunications Reporting
Worksheets and contribute to the Telecommunications Relay Services
Fund based upon its interstate and international end-user revenues.
5. Section 251(e)(1) of the Act directs the Commission to ensure the
availability of telephone numbers on an equitable basis, and that the
costs of establishing numbering administration are borne by all
carriers on a competitively neutral basis. To this end, section 52.17
of the Commission's rules requires that all telecommunications
carriers file Telecommunications Reporting Worksheets and contribute
toward the costs of numbering administration on the basis of their
end-user telecommunications revenues for the prior calendar year.
6. Pursuant to section 9(a)(1) of the Act and section 1.1151 of the
Commission's rules, interstate telecommunications and other providers
must pay regulatory fees to the Commission to recover the costs of
certain regulatory activities. In particular, sections 1.1154
and 1.1157(b)(1) of the Commission's rules require that interstate
telecommunications carriers pay regulatory fees on the basis of their
interstate and international end-user revenues.
7. Intelecom offers Unbundled Network Element Platform (UNE-P) local and
interstate telecommunications services for customers in New York,
California, and Connecticut. In 2004, the
Bureau audit staff undertook a compliance review program to identify
resellers and wholesalers of telecommunications service that may have
failed to register in accordance with section 64.1195 of the Commission's
rules. On March 30 and June 18, 2004, the Bureau's audit staff sent
letters to Intelecom requesting information regarding Intelecom's
compliance with the Commission's registration requirement. On January 26,
2005, the Bureau issued a letter of inquiry ("LOI") directing Intelecom to
submit a sworn written response to a series of questions about the
company's compliance with various reporting and contribution requirements
relating to universal service and other federal programs. Intelecom filed
a response to the Bureau's LOI on February 28, 2005. Subsequently, on
March 25 and May 11, 2005, Intelecom filed supplemental information. On
July 6, 2005, the Bureau issued another LOI to Intelecom, and on July 13,
2005, Intelecom responded. On September 23, 2005, Intelecom filed
supplemental information, including financial statements and cash flow
projections. On October 5, 2005, the Bureau directed Intelecom to provide
additional information concerning that financial information.
8. On May 25, 2006, Intelecom executed a payment plan with the Universal
Service Administrative Company ("USAC") and the Commission's Office of
Managing Director ("OMD") to eliminate its total outstanding
obligations to the Universal Service Fund. The payment plan, which
became effective upon execution on May 25, 2006, provides for the payment
of the principal sum together with accrued interest, administrative
charges, and penalties. As of the Effective Date, Intelecom is also
current on its TRS Fund and numbering contributions and has paid all of
the Commission's regulatory fees.
II. AGREEMENT
9. 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.
10. 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, Intelecom 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.
11. Intelecom agrees that it will make a voluntary contribution to the
United States Treasury in the amount of $150,000, to be paid in
monthly installments over a three-year period. Under the installment
plan, Intelecom agrees to make an initial payment of $10,000 by
January 1, 2007. From February 2007 through July 2007, Intelecom
agrees to make a monthly payment of $2,000, for a total of $12,000
during that period. From August 2007 through July 2008, Intelecom
agrees to make monthly payments of $3,000, for a total of $36,000
during that period. Beginning in August 2008 through December 2009,
Intelecom agrees to pay $5,411.77 per month, for a total of $92,000
during that period. The payments must be made by check or similar
instrument, payable to the order of the Federal Communications
Commission. The payment must include "Acct. No. 911-6229" and "FRN No.
011-3836-92." 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 911-6229.
12. For purposes of settling the matters set forth herein, Intelecom
agrees to maintain 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 create, maintain and update an
FCC 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
regulatory fee, universal service, Telecommunications Relay Service,
North American Numbering Plan Administration rules and requirements as
they apply to Intelecom, including the Company's reporting and payment
obligations triggered by revenues from resellers that do not
contribute to the Universal Service Fund. The Compliance Manual shall
set forth a schedule of filing and payment dates associated with these
regulatory programs, and Intelecom will create compliance
notifications that alert the Company to upcoming filing and payment
dates. The Compliance Manual will encourage personnel to contact the
Company's Designated Contact, attorneys, Chief Executive and/or Chief
Financial Officer with any questions or concerns that arise with
respect to the Company's FCC compliance. The Company shall submit to
the Bureau a final version of its Compliance Manual thirty (30) days
after the Effective Date.
b. Compliance Training Program. The Company will establish an FCC
compliance training program for any employee who engages in activities
related to FCC regulation of Intelecom. Training sessions will be
conducted at least annually for such employees to ensure compliance
with the Act and the FCC's regulations and policies. For new employees
who are engaged in such activities, the training sessions will be
conducted within the first thirty (30) days of employment.
c. Designated Contact. The Company will designate one employee as the
point of contact for all telecommunications regulatory compliance
matters.
d. Review and Monitoring. The Company will review the FCC Compliance
Manual and FCC Compliance Training 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 any audit reviews specifically
consider compliance with FCC regulatory requirements.
f. Billing Software Review and Updates. The Company will replace or
update, as necessary, existing billing software and systems to ensure
compliance with all federal requirements relating to Universal
Service, TRS, NANPA and regulatory fee programs.
g. Termination. Intelecom's obligations under this paragraph shall
expire 36 months after the Effective Date.
13. In express reliance on the covenants and representations contained
herein, and to avoid the potential expenditure of additional public
resources, the Bureau agrees to terminate the Investigation.
14. 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 Intelecom concerning the matters that were the subject
of the Investigation. 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 Intelecom with respect to
Intelecom's basic qualifications, including its character
qualifications, to be a Commission licensee or authorized common
carrier.
15. 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 Intelecom 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 new evidence of noncompliance by Intelecom of the
Act, the rules, or this Consent Decree.
16. Intelecom 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
adopting this Consent Decree, provided the Bureau issues an Order
adopting the
Consent Decree without change, addition, modification, or deletion.
Intelecom shall retain the right to challenge the Bureau's interpretation
of the Consent Decree or any terms contained herein.
17. Intelecom's 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.
18. 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.
19. 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 Intelecom nor the Commission shall contest the validity of the
Consent Decree or the Adopting Order, and Intelecom shall waive any
statutory right to a trial de novo.
20. 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.
21. 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 Intelecom does not consent) that provision
will be superseded by such Commission rule or order.
22. Intelecom hereby agrees to waive any claims it may otherwise have
under the Equal Access to Justice Act, 5 U.S.C. S 504 and 47 C.F.R. S
1.1501 et seq., relating to the matters addressed in this Consent
Decree.
23. This Consent Decree may be signed in counterparts.
________________________________ ________________________________
Kris Monteith Joseph P. Fiorillo
Chief, Enforcement Bureau President
Federal Communications Commission Intelecom Solutions, Inc.
_______________________________ ________________________________
Date Date
47 U.S.C. S 254(d).
47 U.S.C. S 254(d).
47 C.F.R. SS 1.1157, 52.17, 54.706, 54.711, 64.604, 64.1195.
47 C.F.R. S 64.1195(a).
47 U.S.C. S 254(d); 47 C.F.R. SS 54.706(a), 54.711(a).
47 U.S.C. S 225(b)(1).
47 C.F.R. S 64.604(c)(5)(iii)(A).
47 U.S.C. S 251(e)(1).
47 C.F.R. S 52.17(a).
47 U.S.C. S 159(a)(1); 47 C.F.R. S 1.1151.
See 47 C.F.R. SS 1.1154, 1.1157(b)(1).
Letter from Hugh L. Boyle, Chief Auditor, Investigations and Hearings
Division, Enforcement Bureau, FCC, to Intelecom Solutions, dated Mar.
30, 2004; Letter from Hugh L. Boyle, Chief Auditor, Investigations and
Hearings Division, Enforcement Bureau, FCC, to Intelecom Solutions,
dated June 18, 2004.
Letter from Hillary S. DeNigro, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, FCC, to Henry Fiorillo, Chief
Financial Officer, Intelecom Solutions, Inc., dated Jan. 26, 2005.
Letter from Edward A. Yorkgitis, Jr., Darius B. Withers, and Karly E.
Baraga, Kelley Drye & Warren, LLP, to David M. Janas, Special Counsel,
Investigations and Hearings Division, Enforcement Bureau, FCC, dated
Feb. 28, 2005.
Letter from Edward A. Yorkgitis, Jr., Darius B. Withers, and Karly E.
Baraga, Kelley Drye & Warren, LLP, to David M. Janas, Special Counsel,
Investigations and Hearings Division, Enforcement Bureau, FCC, dated
Mar. 25, 2005; Letter from Edward A. Yorkgitis, Jr., Darius B.
Withers, and Karly E. Baraga, Kelley Drye & Warren, LLP, to David M.
Janas, Special Counsel, Investigations and Hearings Division,
Enforcement Bureau, FCC, dated May 11, 2005.
Letter from Hillary S. DeNigro, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, FCC, to Edward A. Yorkgitis,
Jr., Darius B. Withers, and Karly E. Baraga, Kelley Drye & Warren,
LLP, dated July 6, 2005.
Letter from Edward A. Yorkgitis, Jr., Darius B. Withers, and Karly E.
Baraga, Kelley Drye & Warren, LLP, to Raelynn Tibayan Remy,
Investigations and Hearings Division, Enforcement Bureau, FCC, dated
July 13, 2005.
Letter from Edward A. Yorkgitis, Jr., Darius B. Withers, and Karly E.
Baraga, Kelley Drye & Warren, LLP, to Raelynn Tibayan Remy,
Investigations and Hearings Division, Enforcement Bureau, FCC, dated
Sept. 23, 2005.
Email from Raelynn Tibayan Remy, Investigations and Hearings Division,
Enforcement Bureau, FCC, to Darius B. Withers, Kelley Drye & Warren,
LLP, dated Oct. 5, 2005.
On May 11, 2006, the Commission received notice of substitution of
counsel for Intelecom Solutions. Letter from Andrew M. Klein, Klein
Law Group, PLLC, to Raelynn Tibayan Remy, Investigations and Hearings
Division, Enforcement Bureau, FCC, dated May 11, 2006.
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