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April 28, 2006
DA 06-951
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Robert J. Buhay, Chief Financial Officer
NextiraOne, LLC.
c/o Robert A. Salerno, Esq.
Morrison & Foerster LLP
2000 Pennsylvania Avenue, N.W.
Washington, DC 20006-1888
Re: Notice of Suspension and Initiation of Debarment Proceedings,
File No. EB-06-IH-1392
Dear Mr. Buhay:
The Federal Communications Commission ("FCC" or "Commission") has received
notice of the conviction of NextiraOne, LLC ("NextiraOne") for wire fraud
in violation of 18 U.S.C. S 1343 in connection with NextiraOne's
participation in the schools and libraries universal service support
mechanism ("E-rate program"). Consequently, pursuant to 47 C.F.R.
S 54.521, this letter constitutes official notice of NextiraOne's
suspension from the E-rate program. In addition, the Enforcement Bureau
("Bureau") hereby notifies NextiraOne that we are commencing debarment
proceedings against it.
Although we suspend NextiraOne and initiate debarment proceedings, we
acknowledge that NextiraOne has submitted a petition to waive the
debarment rules ("Waiver Petition"). We further note that the Department
of Justice submitted a letter in reference to that petition. We emphasize
that the arguments and evidence presented in both submissions will be
evaluated and considered during the debarment proceeding.
I. Notice of Suspension
The Commission has established procedures to prevent persons who have
"defrauded the government or engaged in similar acts through activities
associated with or related to the schools and libraries support mechanism"
from receiving the benefits associated with that program. NextiraOne pled
guilty to wire fraud for activities in connection with its participation
in the E-rate program with the Oglala Nation Education Coalition ("ONEC")
schools in the District of South Dakota.
According to the plea, in December 2000, NextiraOne (known as Williams
Communications Services, Inc. at that time) falsely promised ONEC schools
that they could participate in the E-rate program for free; in January
2001, a member of the Oglala tribe, under Williams' guidance, submitted to
the administrator of the E-rate program, the Universal Service
Administrative Company ("USAC"), E-rate applications that contained
non-competitive manufacturer "list" prices; in December 2001, NextiraOne
filed an invoice with USAC even though no equipment had been delivered to
ONEC schools; and beginning in December 2001, NextiraOne re-engineered the
ONEC networks such that the costs decreased, but failed to notify ONEC. In
January 2002, a billing employee at NextiraOne submitted an invoice by
facsimile to USAC that made it falsely appear that ONEC had been billed
for non-discounted portions of the equipment and services funded by
E-rate, as well as certain ineligible items, and as a result, NextiraOne
over-billed the E-rate program in excess of $1 million.
Pursuant to section 54.521(a)(4) of the Commission's rules, NextiraOne's
conviction requires the Bureau to suspend it from participating in any
activities associated with or related to the schools and libraries support
mechanism, including the receipt of funds or discounted services through
the schools and libraries support mechanism, or consulting with,
assisting, or advising applicants or service providers regarding the
schools and libraries support mechanism. NextiraOne's suspension becomes
effective upon the earlier of its receipt of this letter or publication of
notice in the Federal Register.
Suspension is immediate pending the Bureau's final debarment
determination. In accordance with the Commission's debarment rules,
NextiraOne may contest this suspension or the scope of this suspension by
filing arguments in opposition to the suspension, with any relevant
documentation. NextiraOne's request must be received within 30 days after
it receives this letter or after notice is published in the Federal
Register, whichever comes first. Such requests, however, will not
ordinarily be granted. The Bureau may reverse or limit the scope of
suspension only upon a finding of extraordinary circumstances. Absent
extraordinary circumstances, the Bureau or the Commission will decide any
request for reversal or modification of suspension within 90 days of its
receipt of such request.
NextiraOne asks us to toll its mandated suspension from the E-rate
program. NextiraOne offers no justification, however, for its request that
we depart from our mandated suspension procedure. We will consider
NextiraOne's arguments regarding the appropriateness of debarment at the
debarment stage of the proceeding. Accordingly, we deny NextiraOne's
request that we toll the suspension.
II. Initiation of Debarment Proceedings
NextiraOne's guilty plea to criminal conduct in connection with the E-rate
program, in addition to serving as a basis for immediate suspension from
the program, also serves as a basis for the initiation of debarment
proceedings against the company. NextiraOne's conviction falls within the
categories of causes for debarment expressly contained in section
54.521(c) of the Commission's rules. Therefore, pursuant to section
54.521(a)(4) of the Commission's rules, we initiate debarment proceedings
against NextiraOne.
As with its suspension, NextiraOne may contest debarment or the scope of
the proposed debarment by filing arguments and any relevant documentation
within 30 calendar days of the earlier of the receipt of this letter or of
publication in the Federal Register. During this debarment phase of the
proceeding, we will consider the arguments NextiraOne presents in its
Waiver Petition. We will also weigh the views of the Department of Justice
in considering NextiraOne's debarment.
Absent extraordinary circumstances, the Bureau or the Commission will
debar NextiraOne. Within 90 days of receipt of any opposition to
NextiraOne's suspension and proposed debarment, the Bureau or the
Commission, in the absence of extraordinary circumstances, will provide
NextiraOne with notice of its decision to debar. If the Bureau or the
Commission decides to debar NextiraOne, its decision will become effective
upon the earlier of NextiraOne's receipt of a debarment notice or
publication of the decision in the Federal Register.
If and when NextiraOne's debarment becomes effective, it will be
prohibited from participating in activities associated with or related to
the schools and libraries support mechanism for some period of time.
Please direct any responses to the following address:
Diana Lee, Esq.
Federal Communications Commission
Enforcement Bureau
Investigations and Hearings Division
Room 4-C443
445 12^th Street, S.W.
Washington, D.C. 20554
If NextiraOne submits its response via hand-delivery or non-United States
Postal Service delivery (e.g., Federal Express, DHL, etc.), please send
the response to Ms. Lee at the following address:
Federal Communications Commission
9300 East Hampton Drive
Capitol Heights, MD 20743
If NextiraOne has any questions, please contact Ms. Lee via mail, by
telephone at (202) 418-1420 or by e-mail at diana.lee@fcc.gov. If Ms. Lee
is unavailable, you may contact Eric Bash by telephone at (202) 418-1188
and by e-mail at eric.bash@fcc.gov.
Sincerely yours,
Kris A. Monteith
Chief
Enforcement Bureau
cc: James J. Regan, Esq., Crowell and Moring LLP (via E-Mail)
E. Ashton Johnston, Esq., DLA Piper Rudnick Gray Cary, US LLP (via E-Mail)
Eric C. Hoffmann, Esq., United States Department of Justice, Antitrust
Division (via E-Mail)
Alicia Bentley, Esq., United States Department of Justice, Civil Division
(via E- Mail)
Kristy Carroll, Esq., USAC (via E-Mail)
Any further reference in this letter to "your conviction" refers to
NextiraOne's April 20, 2006 guilty plea and conviction of this count.
United States v. NextiraOne, LLC, Criminal Docket No. 4:06-cr-40041-LLP,
Plea Agreement (D.S.D. April 20, 2006) ("NextiraOne Plea Agreement" or
"Plea Agreement"). Sentence was imposed on April 20, 2006 and entered on
April 21, 2006.
47 C.F.R. S 54.521; 47 C.F.R. S 0.111(a)(14) (delegating to the
Enforcement Bureau authority to resolve universal service suspension and
debarment proceedings pursuant to 47 C.F.R. S 54.521).
See NextiraOne, LLC Petition for Waiver of Section 54.521 of the
Commission's Rules, Petition for Waiver (filed April 14, 2006) ("Waiver
Petition").
See generally, Waiver Petition; Letter from Scott Hammond, Assistant
Attorney General, Antitrust Division, Department of Justice, to Marlene E.
Dortch, Secretary, Federal Communications (filed April 14, 2006).
Second Report and Order, 18 FCC Rcd at 9225, P 66. The Commission's
debarment rules define a "person" as "[a]ny individual, group of
individuals, corporation, partnership, association, unit of government or
legal entity, however, organized." 47 C.F.R. S 54.521(a)(6).
47 C.F.R. S 54.521(a)(4). See Schools and Libraries Universal Service
Support Mechanism, Second Report and Order and Further Notice of Proposed
Rulemaking, 18 FCC Rcd 9202, 9225-9227, PP 67-74 (2003) ("Second Report
and Order").
Second Report and Order, 18 FCC Rcd at 9225, P 67; 47 U.S.C. S 254; 47
C.F.R SS 54.502-54.503; 47 C.F.R. S 54.521(a)(4).
Second Report and Order, 18 FCC Rcd at 9226, P 69; 47 C.F.R. S
54.521(e)(1).
Second Report and Order, 18 FCC Rcd at 9226, P 70; 47 C.F.R. S
54.521(e)(4).
Second Report and Order, 18 FCC Rcd at 9226, P 70.
47 C.F.R. S 54.521(e)(5).
See Second Report and Order, 18 FCC Rcd at 9226, P 70; 47 C.F.R. SS
54.521(e)(5), 54.521(f).
"Causes for suspension and debarment are the conviction of or civil
judgment for attempt or commission of criminal fraud, theft, embezzlement,
forgery, bribery, falsification or destruction of records, making false
statements, receiving stolen property, making false claims, obstruction of
justice and other fraud or criminal offense arising out of activities
associated with or related to the schools and libraries support
mechanism." 47 C.F.R. S 54.521(c). Such activities "include the receipt of
funds or discounted services through the schools and libraries support
mechanism, or consulting with, assisting, or advising applicants or
service providers regarding schools and libraries support mechanism
described in this section ([47 C.F. R.] S 54.500 et seq.)." 47 C.F.R. S
54.521(a)(1).
See Second Report and Order, 18 FCC Rcd at 9226, P 70; 47 C.F.R. SS
54.521(e)(2)(i), 54.521(e)(3).
Second Report and Order, 18 FCC Rcd at 9227, P 74.
See id., 18 FCC Rcd at 9226, P 70; 47 C.F.R. S 54.521(e)(5).
Id. The Commission may reverse a debarment, or may limit the scope or
period of debarment upon a finding of extraordinary circumstances,
following the filing of a petition by you or an interested party or upon
motion by the Commission. 47 C.F.R. S 54.521(f).
Second Report and Order, 18 FCC Rcd at 9225, P 67; 47 C.F.R. SS 54.521(d),
54.521(g).
NextiraOne, LLC
April 28, 2006
Page 3 of 5
Federal Communications Commission
Enforcement Bureau
445 12^th Street, SW
Washington, D.C. 20554