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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                            )                               
                                                                            
                                            )                               
                                                                            
     In the Matter of                       )   File No. EB-04-IH-0654      
                                                                            
     International Telecom Exchange, Inc.   )   NAL/Acct. No. 200632080161  
                                                                            
     Apparent Liability for Forfeiture      )   FRN 0013218409              
                                                                            
                                            )                               
                                                                            
                                            )                               


                              ORDER OF FORFEITURE

   Adopted: July 26, 2007 Released: July 27, 2007

   By the Chief, Enforcement Bureau:

   I. INTRODUCTION

    1. In this Order of Forfeiture  ("Order"), we assess a monetary
       forfeiture of $28,062 against International Telecom Exchange, Inc. and
       International Telecom Exchange Group, Inc. (collectively, "ITE"). We
       find that ITE willfully and repeatedly failed to respond on a timely
       basis to a directive of the Enforcement Bureau ("Bureau") to provide
       certain information and documents. Further, we find that ITE has
       violated section 64.604(c)(5)(iii)(A) of the Commission's rules by
       willfully and repeatedly failing to contribute to the
       Telecommunications Relay Service ("TRS") Fund on a timely basis.

   II. BACKGROUND

    2. The facts and circumstances of this cases are set forth in the Notice
       of Apparent Liability for Forfeiture and Order ("NAL") previously
       issued by the Commission, and need not be repeated at length here. ITE
       characterizes itself as a provider of residential and business long
       distance telephone service, international telephone services, and
       pre-paid phone card services. On January 26, 2005, the Bureau sent ITE
       a letter of inquiry ("LOI") requiring the company within twenty days
       to answer certain questions and produce certain information concerning
       its compliance with a variety of Commission rules, including section
       64.604(c)(5)(iii)(A), which requires carriers providing interstate
       telecommunications services to contribute to the fund that supports
       TRS on the basis of their interstate end-user telecommunications
       revenues. Upon ITE's request, the Bureau granted ITE an extension of
       time until March 25, 2005 to respond to the LOI, but the company
       failed to produce any information until September 2005, and only after
       repeated efforts by Bureau staff to elicit a response. ITE paid past
       due TRS contributions on May 31, 2006.

    3. On June 1, 2006, the Bureau issued the NAL in the amount of $28,062
       against ITE for apparently failing to respond on a timely basis to a
       directive of the Bureau to provide certain information and documents,
       as well as apparently failing to contribute to the TRS Fund. The NAL
       ordered ITE to pay the proposed forfeiture or respond to the notice
       within 30 days, submitting evidence and arguments in response to the
       NAL to show that no forfeiture should be imposed or that some lesser
       amount should be assessed.

    4. On August 10, 2006, ITE requested an extension of time in order to
       submit a settlement proposal. On August 11, 2006, Bureau staff
       extended the period of time for ITE to respond to the NAL, giving ITE
       until September 14, 2006. On August 24, 2006 ITE stated that the
       company was unable to pay the forfeiture proposed in the NAL. Bureau
       staff informed counsel for ITE that under Commission precedent,
       inability to pay claims are based on a company's average gross
       revenue, as demonstrated by a company's tax returns for the most
       recent three-year period, and that any information that ITE wished to
       provide the Bureau, including a response to the NAL, must be submitted
       before September 14, 2006. To date, ITE has still not paid the
       forfeiture amount, submitted a formal response to the NAL, or provided
       any documentation in support of its inability to pay claim.

   III. DISCUSSION

    5. We find by a preponderance of the evidence that ITE has willfully and
       repeatedly failed to respond on a timely basis to a directive of the
       Bureau to provide certain information and documents, and willfully and
       repeatedly violated section 64.604(c)(5)(iii)(A) by failing to
       contribute to the TRS Fund on a timely basis. Although ITE has
       asserted through informal means that it has paid some portion of its
       TRS balance and that it is unable to pay the forfeiture proposed in
       the NAL, it has never formally responded to the NAL, and its arguments
       are nonetheless meritless.

    6. 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. 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 no such
       forfeiture penalty should be imposed. 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 order or rule.

    7. 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 Communications Act of 1934, as amended (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."

    8. 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. ITE's failure to respond to
       the Bureau's inquiries for approximately eight months occurred
       following two extension requests by ITE of the required response
       deadline, repeated promises that a response would be submitted soon,
       and numerous attempts by Bureau staff to obtain a response from ITE.
       The company provided a full response to the LOI only after the Bureau
       expended significant resources to obtain one.

    9. We find that the substantial delay in responding to the LOI in the
       circumstances presented here warrants a substantial increase to the
       base amount. Misconduct of this type exhibits a blatant disregard for
       the Commission's authority that cannot be tolerated, and, more
       importantly, threatens to compromise the Commission's ability to
       adequately investigate and enforce violations of its rules. In this
       case, the misconduct inhibits our ability to adequately detect and
       deter potential rule violations in areas of critical importance to the
       Commission, i.e., the reporting and contribution requirements for
       federal regulatory programs. Considering all these circumstances and
       taking into account the factors enumerated in section 503(b)(2)(D) of
       the Act, we impose a forfeiture against ITE of $15,000 for failing to
       respond to the LOI on a timely basis.

   10. We also find that ITE has failed to make any TRS Fund contributions on
       a timely basis since it began providing telecommunications service in
       2002. In response to ITE counsel's statement in telephone
       conversations that the company had paid some portion of its TRS
       balance, Bureau staff contacted the TRS administrator to review the
       company's payment history. ITE did, in fact, make payments of
       $4,350.93 on July 26, 2005, and $5,784.52 on May 31, 2006. Both of
       these payments, however, were received many months after originally
       due. Where a carrier fails to satisfy its TRS obligations for an
       extended period of time, it thwarts the Commission's responsibility to
       ensure that telecommunications relay services "are available to the
       extent possible and in the most efficient manner, to hearing-impaired
       and speech-impaired individuals in the United States."

   11. The Commission has established a base forfeiture amount of $10,000 for
       each instance in which a carrier fails to make required TRS
       contributions in a timely manner. We find ITE liable for a base
       forfeiture in the amount of $10,000 for failing to timely pay its TRS
       Fund contribution that was due on September 26, 2005. In the past the
       Commission has also imposed an upward adjustment to forfeitures for
       the failure to pay TRS Fund contributions based on half the companies'
       unpaid contributions. Given that ITE has failed to make any TRS Fund
       contribution on time since it began providing telecommunications
       service in 2002, we find that an upward adjustment, in an amount
       approximately one-half of the carrier's unpaid TRS Fund contributions
       ($6,124) is appropriate for ITE's failure to timely pay its TRS Fund
       contribution due on September 26, 2005. Taking into account the
       factors enumerated in section 503(b)(2)(D) of the Act, we conclude
       that an upward adjustment of $3,062 is reasonable, and find ITE liable
       for a total forfeiture of $13,062 for its willful and repeated
       violations of section 64.604(c)(5)(iii)(A) of the Commission's rules.

   12. After requesting time to make a settlement proposal, ITE claimed that
       it is unable to pay the forfeiture proposed in the NAL. Bureau staff
       advised the company that under Commission precedent, inability to pay
       claims are assessed based on a company's average gross revenue, as
       demonstrated by a company's tax returns for the most recent three-year
       period, and informed the company that it could submit information in
       support of its claim by September 14, 2006. The company did not submit
       any additional information, and has failed to substantiate its claim
       that it is unable to pay the proposed forfeiture. Moreover, the
       Commission has held that forfeitures of approximately eight percent of
       a company's average gross revenue are appropriate. In response to the
       January 26, 2005 LOI, ITE submitted tax returns for 2002 and 2003. The
       $28,062 forfeiture proposed in the NAL and affirmed here is
       substantially below eight percent of the company's average gross
       revenue for this period, and the other information provided with the
       company's September 19, 2005 LOI Response does not demonstrate that
       the company is unable to pay the forfeiture. Accordingly, we reject
       ITE's claim that it is unable to pay the forfeiture.

   13. In conclusion, we find that a forfeiture in the amount of $28,062 is
       warranted. The total forfeiture amount of $28,062 includes: (1) a
       penalty of $15,000 for failing to respond on a timely basis to a
       directive of the Bureau to provide certain information and documents;
       and (2) a penalty of $13,062 for failing to make its TRS program
       contribution when due on September 26, 2005. We again caution that
       additional violations of the Act or the Commission's rules could
       subject ITE to further enforcement action. Such action could take the
       form of higher monetary forfeitures and/or possible revocation of
       ITE's operating authority, including disqualification of ITE's
       principals from the provision of any interstate common carrier
       services without the prior consent of the Commission.

   IV. ORDERING CLAUSES

   14. Accordingly, IT IS ORDERED THAT, pursuant to section 503(b) of the
       Communications Act of 1934, as amended, and sections 0.111, 0.311, and
       1.80 of the Commission's rules, that International Telecom Exchange,
       Inc. and International Telecom Exchange Group, Inc. SHALL FORFEIT to
       the United States government the sum of $28,062 for willfully and
       repeatedly violating the Commission's rules.

   15. Payment of the forfeiture shall be made in the manner provided for in
       Section 1.80 of the Rules within 30 days of the release of this Order.
       If the forfeiture is not paid within the period specified, the case
       may be referred to the Department of Justice for collection pursuant
       to Section 504(a) of the Act. 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. Requests for full payment under an installment plan
       should be sent to: Associate Managing Director, Financial Operations,
       445 12th Street, S.W., Room 1A625, Washington, D.C. 20554.

   16. IT IS FURTHER ORDERED that a copy of the Order by certified
       mail/return receipt requested to Charles H. Helein, Helein &
       Marashlian, LLC, the CommLaw Group, 1483 Chain Bridge Road, Suite 301,
       McLean, VA 22101.

   FEDERAL COMMUNICATIONS COMMISSION

   Kris Anne Monteith

   Chief

   Enforcement Bureau

   47 C.F.R. S: 64.604(c)(5)(iii)(A).

   See International Telecom Exchange, Inc., Notice of Apparent Liability for
   Forfeiture and Order, 21 FCC Rcd 6232 (Enf. Bur. 2006).

   See http://www.itetelecom.com (accessed May 17, 2007).

   See Letter from Hillary DeNigro, Deputy Chief, Investigations and Hearings
   Division, Enforcement Bureau, Federal Communications Commission, to Brian
   Jarrah, President/CEO, International Telecom Exchange, Inc. (dated January
   26, 2005) ("January 26, 2005 LOI" or "LOI").

   47 C.F.R. S: 64.604(c)(5)(iii)(A).

   NAL, 21 FCC Rcd at 6234-35, P:P: 7-11.

   Id. at P: 28.

   Electronic mail message from Lance Steinhart, counsel to International
   Telecom Exchange, Inc. to Eric Bash, Assistant Chief, Investigations &
   Hearings Division, Enforcement Bureau, Federal Communications Commission
   (dated August 10, 2006).

   Electronic mail message from Eric Bash, Assistant Chief, Investigations &
   Hearings Division, Enforcement Bureau, Federal Communications Commission
   to Lance Steinhart, counsel to International Telecom Exchange, Inc. (dated
   August 11, 2006).

   Electronic mail message from Lance Steinhart, counsel to International
   Telecom Exchange, Inc. to David Janas, Special Counsel, Investigations &
   Hearings Division, Enforcement Bureau, Federal Communications Commission
   (dated August 24, 2006).

   Electronic mail message from David Janas, Special Counsel, Investigations
   & Hearings Division, Enforcement Bureau, Federal Communications Commission
   to Lance Steinhart, counsel to International Telecom Exchange, Inc. (dated
   August 28, 2006). E.g., Coleman Enters., Inc., Order of Reconsideration,
   16 FCC Rcd 10023, 10024, P: 6 (2001) ("the Commission has discretion to
   determine what documentation it considers as reliable and objective
   evidence of ability to pay");  Hoosier Broad. Corp., Memorandum Opinion
   and Order, 15 FCC Rcd 8640, 8641, P: 7 (Enf. Bur. 2000) ("`[c]laims of
   inability to pay should be supported by tax returns or other financial
   statements prepared under generally accepted accounting procedures for the
   most recent three year period.'") (quoting Barry A. Stevenson Edmonds,
   Order, 12 FCC Rcd 1976, 1977, P: 5 (Compliance and Information Bur.,
   1997)).

   47 U.S.C. S: 503(b)(1)(B).

   47 U.S.C. S: 312(f)(1).

   H.R. Rep. No. 97-765, 97th 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 (2001)
   (issuing a Notice of Apparent Liability for, inter alia, a cable
   television operator's repeated signal leakage) ("Callais Cablevision,
   Inc.").

   Id. at 1362, P: 9; Southern California Broadcasting Co., 6 FCC Rcd at
   4388, P: 5.

   47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).

   See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
   7591, P: 4 (2002) (forfeiture paid).

   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).

   NAL, 21 FCC Rcd at 6233-35, P:P: 4-12.

   The first payment related to ITE's 2003 and 2004 499-A filings; payment is
   due in the same year as the filing to which it relates. The second payment
   related to ITE's 2005 499-A filing; payment was due on September 26, 2005,
   but ITE did not make the payment until May 31, 2006, after the TRS
   administrator transferred the delinquent debt to the Commission for
   collection, and the Commission demanded payment. The amount of the
   Commission's demand was actually higher - $6,124.49 - because it included
   not only the delinquent debt, but also accrued interest, administrative
   costs, and penalties. As indicated below in the text, this is the figure
   the Bureau staff used for purposes of applying an upward adjustment to the
   forfeiture for ITE's failure to pay its TRS Fund contributions on a timely
   basis.

   47 U.S.C. S: 225(b)(1).

   See, e.g., Globcom, Inc., Order of Forfeiture, 21 FCC Rcd. 4710, 4721-24
   P:P: 31-38 (2006).

   See, e.g., id., 21 FCC Rcd  at 4727,  P: 5. 

   See NAL, 21 FCC Rcd at 6235, P: 12.

   47 C.F.R. S: 64.604(c)(5)(iii)(A).

   Electronic mail message from Lance Steinhart, counsel to International
   Telecom Exchange, Inc. to David Janas, Special Counsel, Investigations &
   Hearings Division, Enforcement Bureau, Federal Communications Commission
   (dated August 24, 2006).

   Electronic mail message from David Janas, Special Counsel, Investigations
   & Hearings Division, Enforcement Bureau, Federal Communications Commission
   to Lance Steinhart, counsel to International Telecom Exchange, Inc. (dated
   August 28, 2006).

   Coleman Enters., 16 FCC Rcd at 10024-26, P:P: 4-8 (forfeiture not deemed
   excessive where it represented approximately 7.96 percent of the
   violator's gross revenues); Hoosier Broad., 15 FCC Rcd at 8641, P: 7
   (forfeiture not deemed excessive where it represented approximately 7.69
   percent of the violator's gross revenues).

   See Business Options, Inc., Order to Show Cause and Notice of Opportunity
   for Hearing, 18 FCC Rcd 6881, 6894, P: 36 (2003); NOS Communications,
   Inc., Order to Show Cause and Notice of Opportunity for Hearing, 18 FCC
   Rcd 6952, 6965, P: 27 (2003).

   47 U.S.C. S: 503(b).

   47 C.F.R. S:S: 0.111, 0.311, 1.80.

   47 U.S.C. S: 504(a).

   See 47 C.F.R. S: 1.1914.

   Federal Communications Commission DA 07-3412

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                                 Federal Communications Commission DA 07-3412