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+Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
In the Matter of
) File No. EB-04-IH-0517
Unicom Communications, L.L.C.
) NAL/Acct. No. 200632080154
Apparent Liability for Forfeiture
)
)
)
NOTICE OF APPARENT LIABILITY
FOR FORFEITURE
Adopted: April 26, 2006 Released: April 27, 2006
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Unicom Communications, L.L.C. ("Unicom") apparently violated a
Commission order by willfully and repeatedly failing to respond to a
directive of the Enforcement Bureau ("Bureau") to provide certain
information and documents. Based on our review of the facts and
circumstances of this case, and for the reasons discussed below, we
find that Unicom is apparently liable for a monetary forfeiture in the
amount of $20,000.
II. BACKGROUND
2. Unicom is a division of Smoky Mountains Systems, Inc., a North
Carolina firm offering a variety of regulated and non-regulated
telecommunications services. Unicom itself is a local and long
distance carrier providing interstate telecommunications service in
North Carolina and Florida.
3. On March 30, 2004, the Bureau's audit staff sent a letter to Unicom
requesting information pertaining to its compliance with section
64.1195 of the Commission's rules, which requires all
telecommunications carriers that provide interstate telecommunications
services to register with the Commission. The purpose of this
requirement is to assist the Commission in monitoring the entry and
operation of interstate telecommunications carriers to ensure that,
among other things, they do not engage in fraud or evade oversight.
After receiving an inadequate response and still finding no evidence
that Unicom had registered, the Bureau, on October 28, 2004, issued a
letter of inquiry ("LOI") to Unicom. The October 28, 2004 LOI directed
Unicom to, among other things, submit a sworn written response to a
series of questions relating to its apparent failure to satisfy its
registration requirement, as well as certain filing and payment
obligations relating to, among others, the Universal Service Fund,
from 2002 to the date of the LOI.
4. After being granted an extension of the time to respond, Unicom filed
two separate responses to the October 28, 2004 LOI on December 7 and
9, 2004. The responses were deficient in both form and content.
Specifically, Unicom produced only three documents in response to
several multipart and multiyear document requests, provided no
explanation or support as the LOI instructions required demonstrating
how the documents were responsive to the Bureau's inquiries, and
provided no response of any kind to 11 of 14 of the inquiries.
5. After telephone discussions and email correspondence from Bureau staff
to Unicom during late December 2004 and January 2005 failed to elicit
complete responses, the Bureau sent a letter to Unicom on March 11,
2005. The March 11, 2005 Letter described specific inadequacies in
Unicom's prior response and warned that failure to respond fully to
the Bureau's inquiries could by itself subject Unicom to potential
enforcement action. Unicom responded by facsimile transmission on
March 15, 2005 providing a single document that did not answer the
Bureau's inquiries.
1. After receiving no further information, on June 28, 2005, the Bureau
issued another letter to Unicom. The June 28, 2005 Letter noted the
previous inadequacies in both informational and documentary responses.
It also reminded Unicom that it had been directed to answer the
inquiries pursuant to certain directions, and to submit a sworn
affidavit subject to penalty of perjury, as required by Commission
rules. Furthermore, the June 28, 2005 Letter directed Unicom to
provide complete responses to all unanswered inquiries, supported by a
sworn affidavit, by July 18, 2005, and again warned that failure to
respond fully to the October 28, 2004 LOI could by itself subject
Unicom to potential enforcement action. Although Unicom's receipt of
this letter is evidenced by return of the certified mail receipt and
confirmation of the facsimile transmission, the Bureau has received no
further response whatsoever from Unicom to the date of this NAL.
III. DISCUSSION
A. Apparent Violation
6. Under section 503(b)(1) of the Communications Act of 1934, as amended
(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. 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. 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, and the Commission has so interpreted the
term in the section 503(b) context. The Commission may also assess a
forfeiture for violations that are merely repeated, and not willful.
"Repeated" means that the act was committed or omitted more than once,
or lasts more than one day. 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 such forfeiture penalty should not be imposed.
The Commission will then issue a forfeiture if it finds by a
preponderance of the evidence that the person has willfully or
repeatedly violated the Act or a Commission order or rule.
7. Sections 4(i), 4(j), 218, and 403 of the Act afford the Commission
broad authority to investigate the entities it regulates. Section 4(i)
authorizes the Commission to "issue such orders, not inconsistent with
this Act, as may be necessary in the execution of its functions," and
section 4(j) states that "the Commission may conduct its proceedings
in such manner as will best conduce to the proper dispatch of business
and to the ends of justice." Section 403 likewise grants the
Commission "full authority and power to institute an inquiry, on its
own motion . . . relating to the enforcement of any of the provisions
of this Act."
8. We find that Unicom apparently violated Commission orders by failing,
after multiple opportunities, to respond fully to the October 28, 2004
LOI. Section 218 of the Act specifically authorizes the Commission to
"obtain from . . . carriers . . . full and complete information
necessary to enable the Commission to perform the duties and carry out
the objects for which it was created." Sections 4(i), 4(j), and 403 of
the Act unequivocally grant the Commission the power to direct
responses to inquiries in order to execute its functions. As indicated
above, the Bureau directed Unicom to provide certain documents and
information in order to enable the Commission to perform its
enforcement function and evaluate allegations that Unicom violated
Commission rules. Commission rules specifically require Unicom to
maintain these documents and produce them upon the Commission's
request. Unicom repeatedly failed to provide sufficient explanation
and documentation in response to both the October 28, 2004 LOI and the
March 11, 2005 Letter. Moreover, Unicom was completely unresponsive to
the June 28, 2005 Letter, although the return of the certified mail
receipt and confirmation of facsimile establish that Unicom received
this letter. The June 28, 2005 Letter reiterated the previous
inquiries, specifically instructed Unicom on the proper format for its
responses, and again warned of the enforcement consequences of failing
to respond. In addition, during the period December 2004 to January
2005, Bureau staff attempted to elicit responses through telephone
discussions and email correspondence. Unicom's willful and repeated
failures adequately to respond to the Bureau's inquiries constitute a
violation of a Commission order.
B. Forfeiture Amount
9. Section 503(b)(1) 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. 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 $1,325,000 for a single act or failure to
act. 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."
10. Section 1.80 of the Commission's rules and the Commission's Forfeiture
Policy Statement establish a base forfeiture amount of $3,000 for
failure to file required forms or information, and $4,000 for failure
to respond to a Commission communication. Unicom's failures to respond
occurred despite multiple attempts by Bureau staff to call Unicom's
attention to the importance of responding to LOIs. We find that these
failures to respond to a Bureau LOI in the circumstances presented
here warrant a substantial increase to this base amount. Unicom
received three written communications from the Bureau, and to date has
produced only four unauthenticated, unexplained documents, and has
failed to provide a response of any kind to most of the Bureau's
inquiries. Misconduct of this type exhibits a disregard for the
Commission's authority that cannot be tolerated, and, more
importantly, threatens to compromise the Commission's ability to
investigate adequately violations of its rules. In this case, such
misconduct inhibits our ability adequately to detect and deter
potential rule violations in an area of critical importance to the
Commission -- registration and contributions to universal service.
Prompt and full responses to Bureau inquiry letters are critical to
the Commission's enforcement function. We therefore propose a
forfeiture against Unicom of $20,000 for failing to respond to the
Bureau's LOI. This forfeiture amount is consistent with recent
precedent in similar cases where companies failed to provide responses
to LOIs concerning compliance with the Commission's universal service
and registration rules, despite evidence that the LOIs had been
received.
11. We also direct Unicom to respond fully to the October 28, 2004 LOI
within thirty days of the release of this order. Failure to do so may
constitute an additional violation potentially subjecting Unicom to
further penalties, including potentially higher monetary forfeitures
and/or the revocation of Unicom's authorization and the authorization
of its principals to operate common carrier services pursuant to
section 214 of the Act without prior consent of the Commission. In
addition, to the extent Unicom's responses to the LOIs evidence
noncompliance with the Commission's registration and other rules, the
Bureau will not hesitate to propose additional enforcement action.
IV. ORDERING CLAUSES
12. ACCORDINGLY, IT IS ORDERED THAT, pursuant to section 503(b) of the
Communications Act of 1934, as amended, 47 U.S.C. S 503(b), and
section 1.80 of the Commission's rules, 47 C.F.R. S1.80, Unicom
Communications, L.L.C. is hereby NOTIFIED of its APPARENT LIABILITY
FOR FORFEITURE in the amount of $20,000 for willfully and repeatedly
violating a Commission order.
13. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
Commission's rules, 47 C.F.R. S 1.80, within thirty days of the
release date of this NOTICE OF APPARENT LIABILITY FOR FORFEITURE,
Unicom Communications, L.L.C. SHALL PAY the full amount of the
proposed forfeiture currently outstanding on that date or SHALL FILE a
written statement seeking reduction or cancellation of the proposed
forfeiture.
14. 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.
15. IT IS FURTHER ORDERED, that pursuant to sections 4(i), 4(j), 218 and
403 of the of the Communications Act of 1934, as amended, 47 U.S.C. SS
4(i), 4(j), 218 and 403, and section 54.711 of the Commission's rules,
47 C.F.R. S 54.711, Unicom Communications, L.L.C. shall fully respond
to the October 28, 2004 Letter of Inquiry sent by the FCC's
Enforcement Bureau within 30 days of the release of this order.
16. The response, if any, to this NOTICE OF APPARENT LIABILITY FOR
FORFEITURE must be mailed to William H. Davenport, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12^th Street, S.W., Suite 4-C330,
Washington, D.C. 20554 and must include the NAL/Acct. No. referenced
above.
17. 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.
18. Requests for payment of the full amount of this NOTICE OF APPARENT
LIABILITY FOR FORFEITURE under an installment plan should be sent to
Chief, Revenue and Receivables Operations Group, 445 12^th Street,
S.W., Washington, D.C. 20554.
19. IT IS FURTHER ORDERED that a copy of this NOTICE OF APPARENT LIABILITY
FOR FORFEITURE shall be sent, by certified mail/return receipt requested,
to Mr. Charles D. D'Ascoli, Managing Partner, Unicom Communications,
L.L.C., 17 Smoky Mountain Drive, Franklin, North Carolina 28734.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
See [1]www.unicomcommunications.com (March 22, 2006).
See Letter from Hugh L. Boyle, Chief Auditor, Investigations and Hearings
Division, Enforcement Bureau, FCC, to Unicom Communications, L.L.C., dated
March 30, 2004.
See 47 C.F.R. S 64.1195(a).
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, P 59 (2000).
See Letter from Hillary DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, FCC, to Charles D. D'Ascoli, Managing
Partner, Unicom Communications, L.L.C., dated October 28, 2004 ("October
28, 2004 LOI").
See Letter from Hillary DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, to Charles D. D'Ascoli, Managing Partner,
Unicom Communications, L.L.C., dated December 2, 2004, extending the due
date from November 17, 2004 to December 8, 2004.
The three documents included a single incorporation renewal in North
Carolina for 2004, a balance sheet for 2002, and a federal tax return for
2002. After telephone consultation with Bureau staff regarding the
Bureau's request for information on the company's gross end user
interstate telecommunications service revenues, Unicom produced partial
accounting statements purporting to show these revenues in North Carolina
and Florida for 2002 and 2003, respectively. The documents did not provide
the information requested.
See Letter from Hillary DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, FCC, to Charles D. D'Ascoli, Managing
Partner, Unicom Communications, L.L.C., dated March 11, 2005 ("March 11,
2005 Letter").
On March, 15, 2005, Unicom provided a document that purported to be a copy
of a Form 499-A, applicable to 2002. Form 499-A, also known as
"Telecommunications Reporting Worksheet," is the form on which carriers
must submit annual revenue information to the Universal Service
Administrative Company ("USAC") to enable administrators of various funds
to determine and collect the statutorily mandated assessments. Unicom's
submission of this purported 2002 form to the Bureau on March 15, 2005 was
apparently intended to appear responsive to a portion of the October 28,
2004 LOI. Subsequent investigation showed, however, that Unicom never
actually filed this worksheet with USAC.
See Letter from Hillary DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, FCC, to Charles D. D'Ascoli, Managing
Partner, Unicom Communications, L.L.C., dated June 28, 2005 ("June 28,
2005 Letter").
47 C.F.R. S 1.16.
47 U.S.C. S 503(b)(1)(B); 47 C.F.R. S 1.80(a)(1); see also 47 U.S.C. S
503(b)(1)(D) (forfeitures for violation of 14 U.S.C. S 1464).
47 U.S.C. S 312(f)(1).
H.R. Rep. No. 97-765, 97^th Cong. 2d Sess. 51 (1982).
See, e.g., Application for Review of Southern California Broadcasting Co.,
Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388, P 5 (1991) ("Southern
California Broadcasting Co.").
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362, P 10
(2001) ("Callais Cablevision") (issuing a Notice of Apparent Liability
for, inter alia, a cable television operator's repeated signal leakage).
Southern California Broadcasting Co., 6 FCC Rcd at 4388, P 5; Callais
Cablevision, Inc., 16 FCC Rcd at 1362, P 9.
47 U.S.C. S 503(b); 47 C.F.R. S 1.80(f).
See, e.g., SBC Communications, Inc., 17 FCC Rcd 7589, 7591, P 4 (2002).
47 U.S.C. SS 4(i), 4(j), 218, 403.
47 U.S.C. SS 4(i), 4(j).
47 U.S.C. S 403. Section 403 provides, in part: "The Commission shall have
full authority and power at any time to institute an inquiry, on its own
motion, in any case and as to any matter or thing concerning which
complaint is authorized to be made, to or before the Commission by any
provision of this Act, or concerning which any question may arise under
any of the provisions of this Act," see also 47 U.S.C. S 4(i), (j).
47 U.S.C. S 218.
47 U.S.C. SS 4(i), (j), and 403.
See supra at note 5.
See 47 C.F.R. S 54.711, which requires contributors to "maintain records
and documentation to justify information reported in the
Telecommunications Reporting Worksheet for three years and [to] provide
such records and documentation to the Commission or the Administrator upon
request." Id.
See supra at notes 7, 9.
See supra at note 10.
See, e.g., SBC Forfeiture Order, 17 FCC Rcd at 7599-7600, PP 23-28 (2002)
($100,000 forfeiture for egregious and intentional misconduct, amount set
high enough to serve as a deterrent in view of SBC's ability to pay);
Globcom, Inc., Notice of Apparent Liability for Forfeiture and Order, 18
FCC Rcd 19893, 19898, P 11, n. 36 (2003) (delayed response to an LOI
considered dilatory behavior, which may result in sanctions in the
future); BigZoo.Com Corporation, Order of Forfeiture, 20 FCC Rcd 3954,
3955, PP 5-6 (Enf. Bur. 2005) ("BigZoo") ($20,000 forfeiture for failure
of an entity to provide any response to a USF LOI, notwithstanding
evidence that the LOI was received); American Family Association, Licensee
of Station KBMP(FM), Enterprise, Kansas, Notice of Apparent Liability for
Forfeiture, 19 FCC Rcd 14072, 14076-77, PP 12, 15 (2004) ($3,000
forfeiture for a partial response to an LOI); World Communications
Satellite Systems, Inc., Notice of Apparent Liability for Forfeiture, 18
FCC Rcd 18545, 18546-49, PP 4-12 (2003) ($10,000 forfeiture for a
non-responsive reply to an LOI); Donald W. Kaminski, Jr., Notice of
Apparent Liability for Forfeiture, 16 FCC Rcd 10707, 10708, PP 4-5 (2001)
($4,000 forfeiture after individual refused to respond to an LOI).
47 U.S.C. S 503(b)(1).
47 U.S.C. S 503(b)(2)(B); see also 47 C.F.R. S 1.80(b)(2); Amendment of
Section 1.80(b) of the Commission's Rules, Adjustment of Forfeiture Maxima
to Reflect Inflation, Order, 19 FCC Rcd 10945 (2004).
47 U.S.C. S 503(b)(2)(D).
47 C.F.R. S 1.80; Commission's Forfeiture Policy Statement and Amendment
of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines,
Report and Order, 12 FCC Rcd 17087, 17114 (1997) ("Forfeiture Policy
Statement"); recon. denied 15 FCC Rcd 303 (1999).
See supra at notes 8, 10. In addition, Bureau Staff had multiple telephone
discussions and email correspondence with Unicom during late December 2004
and January 2005 in order to elicit complete responses. See supra at P 5.
Blackstone Calling Card, Inc., Notice of Apparent Liability for
Forfeiture, DA 05-3192 (Enf. Bur., rel. Dec. 19, 2005) ($20,000 forfeiture
for failure of an entity to provide adequate response to a USF LOI,
notwithstanding evidence that the LOI was received); BigZoo, 20 FCC Rcd
3954 (same); QuickLink Telecom, Inc., Order of Forfeiture, 20 FCC Rcd
14464 (Enf. Bur. 2005) (same).
See NOS Communications, Inc., Affinity Network, Inc., and NOSVA Limited
Partnership, Order to Show Cause, Notice of Opportunity for Hearing, 18
FCC Rcd 6952 (2003).
Federal Communications Commission DA 06-933
5
1
Federal Communications Commission FCC 99-xx
References
Visible links
1. http://www.unicomcommunications.com/