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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
) File No. EB-06-IH-0827
In the Matter of
) NAL/Acct. No. 200732080026
Verizon
) FRN No. 0003257094
)
)
ORDER
Adopted: June 29, 2007 Released: July 3, 2007
By the Commission:
1. In this Order, we adopt the attached Consent Decree entered into
between the Federal Communications Commission (the "Commission") and
Verizon Business Global LLC f/k/a MCI, LLC ("Verizon"). The Consent
Decree terminates the enforcement proceeding initiated by the
Enforcement Bureau against MCI, Inc. ("MCI") for 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, and 64.604 of the Commission's rules
relating to universal service, the Telecommunications Relay Service
("TRS") Fund, the North American Numbering Plan Administration
("NANPA"), and regulatory fees.
2. The Commission and Verizon 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 Verizon
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.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
Before the
Federal Communications Commission
Washington, DC 20554
)
)
) File No. EB-06-IH-0827
In the Matter of
) NAL/Acct. No. 200732080026
Verizon
) FRN No. 0003257094
)
)
CONSENT DECREE
1. The Federal Communications Commission (the "Commission" or "FCC") and
Verizon by their authorized representatives, hereby enter into this
Consent Decree for the purpose of terminating the Commission's
investigation into MCI's compliance with 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
universal service, the Telecommunications Relay Service ("TRS") Fund,
the North American Numbering Plan Administration ("NANPA"), 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. "Adopting Order" or "Order" means an order of the Commission adopting
this Consent Decree.
c. The "Bureau" means the Enforcement Bureau of the Federal
Communications Commission.
d. The "Commission" or "FCC" means the Federal Communications Commission.
e. "Effective Date" means the date on which the Commission releases the
Order.
f. "Investigation" means the investigation initiated by the Bureau
following MCI's January 5, 2006 disclosures regarding its universal
service and other reporting and contribution obligations associated
with FCC Forms 499-A and 499-Q.
g. "Verizon" means Verizon Business Global LLC f/k/a MCI, LLC, and its
successors or assigns.
h. "MCI" means MCI, Inc., which was the entity that filed FCC Form 499-A
on behalf of MCI prior to 2006.
i. "Parties" means Verizon and the Commission.
j. "Rules" means the Commission's regulations set forth in Title 47 of
the Code of Federal Regulations.
I. BACKGROUND
3. Pursuant to Section 254(d) of the Act and sections 54.706, 54.711, and
54.713 of the Rules, telecommunications carriers that provide
interstate telecommunications services are required to file annual and
quarterly Telecommunications Reporting Worksheets (FCC Forms 499-A and
FCC Form 499-Q) and contribute to the Federal Universal Service Fund
("FUSF"). 47 U.S.C. S: 254(d); 47 C.F.R. S:S: 54.706, 54.711, 54.713.
4. Pursuant to Section 251(e) of the Act and sections 52.17 and 52.32 of
the Rules, all telecommunications carriers are required to contribute
to the costs of establishing numbering administration and local number
portability, respectively, based on information contained in FCC Forms
499-A and FCC Form 499-Q. 47 U.S.C. S: 251(e); 47 C.F.R. S:S: 52.17,
52.32.
5. Pursuant to Section 225(b)(1) of the Act and section 64.604 of the
Rules, telecommunications carriers that provide interstate
telecommunications services are required to contribute to the TRS
fund, based on information contained in FCC Forms 499-A and FCC Form
499-Q. 47 U.S.C. S: 225(b)(1); 47 C.F.R. S: 64.604.
6. Pursuant to Section 9(a)(1) of the Act and sections 1.1151, 1.1154,
and 1.1157(b)(1) of the Commissions rules, interstate
telecommunications carriers are required to pay regulatory fees. 47
U.S.C. S: 9(a)(1); 47 C.F.R. S:S: 1.1151, 1.1154, 1.1157(b)(1).
7. Verizon offers interstate and international telecommunications
services and is subject to the requirements discussed in paragraphs 3
through 6 above.
8. On January 5, 2006, MCI informed the Bureau that, as part of a review
of its compliance with its universal service and other associated
reporting and contribution obligations, MCI discovered that it had
erroneously reported its interstate telecommunications revenues on its
FCC Form 499-As for the years 2003 and 2004, as well as its FCC Form
499-Qs for the first three quarters of 2005. As a result, MCI's
federal USF contributions, numbering administration and local number
portability contributions, TRS Fund contributions, and regulatory fee
payments for those periods had been calculated incorrectly. Verizon
informed the Commission and the Universal Service Administrative
Company ("USAC") of Verizon's intention to promptly pay in full the
difference between the total obligation and MCI's prior contributions.
On February 5, 2006, Verizon submitted to USAC Revised FCC Forms 499-A
for 2003 and 2004 (the "Revised Forms"). Verizon received three
invoices from USAC, beginning in April 2006, for the underpayment
amounts reflected on its amended FCC Form 499-A filings for the years
2003 and 2004. Verizon paid these invoices in full in a timely manner.
In addition, the FCC Form 499-A for the year 2005, which was filed on
April 1, 2006, reflected higher revenue amounts than were previously
reported on MCI's FCC Form 499-Qs for the first three quarters of
2005. Verizon received three invoices from USAC, beginning in July
2006, for the true-up of 2005 contributions. Verizon paid these
invoices in full in a timely manner.
II. AGREEMENT
9. The Parties agree and acknowledge that this Consent Decree shall
constitute a final settlement between the Parties of the
Investigation. In express reliance on the covenants and
representations in this Consent Decree, the Commission agrees to
terminate the Investigation without any finding of liability on the
part of Verizon and MCI. In consideration for the termination of the
Investigation and in accordance with the terms of this Consent Decree,
Verizon agrees to the terms, conditions, and procedures contained
herein.
10. Verizon acknowledges that the Commission has jurisdiction over the
matters contained in this Consent Decree and the authority to enter
into and adopt this Consent Decree.
11. Verizon will make a voluntary contribution to the United States
Treasury in the amount of five hundred thousand dollars ($500,000)
within thirty (30) calendar days from the Effective Date. The payment
must be made by check or similar instrument, payable to the order of
the Federal Communications Commission. The payment must include "Acct.
No. 200732080026" and "FRN No. 0003257094." 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. 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, Verizon and MCI do not
admit or deny liability for violating any statute, regulation, or
administrative rule in connection with the matters that are the
subject of this Consent Decree.
13. Verizon agrees that it will develop, within sixty (60) calendar days
from the Effective Date, an internal Compliance Program to ensure
Verizon's future compliance with the Act, the Commission's rules, and
the Commission's orders governing telecommunications carriers'
universal service reporting and contribution requirements. The
Compliance Plan will include, at a minimum, the following components:
a. Compliance Training Program. Verizon shall establish and maintain a
FUSF training program, as detailed below, for employees who are
responsible for preparing FCC Forms 499-Q and 499-A submissions on
behalf of Verizon's wholly-owned subsidiaries.
i. Verizon shall establish and maintain a training program regarding
FCC Form 499 filing requirements for employees who are
responsible for preparing FCC Form 499 submissions. This training
program shall address at least the following subject matter
areas: the FCC's regulations governing FUSF contribution
requirements, the FCC Form 499 instructions (including the
instructions regarding FCC Form 499 revenue categories, the FCC
Form 499 instructions regarding the definition of interstate and
international services, and the FCC Form 499 instructions
regarding the definitions of "end user" and "reseller"), and the
application of those instructions to the services provided by
Verizon. The training program shall also include information on
the potential ramifications of failing to comply with the FCC
Form 499 filing requirements.
ii. Verizon shall provide the foregoing FCC Form 499 training for
its employees responsible for preparing the FCC Form 499 or
providing key information that is used in preparing the FCC Form
499, at least annually. Verizon will also provide training to
new employees responsible for preparing the FCC Form 499 or
providing key information that is used in preparing the FCC Form
499 within 45 days of being assigned such responsibilities.
iii. Verizon shall update and enhance the foregoing training
regarding the FCC Form 499 filing requirements as appropriate
and necessary.
b. Internal Controls Over FUSF Reporting. Verizon has established, and
shall maintain, internal control processes to ensure accurate FCC Form
499 submissions.
i. Verizon has created, and shall maintain, a process document that
describes each step in the development of the company's FCC Form
499 submissions and that identifies the key controls to ensure an
accurate filing.
ii. Verizon has established procedures for determining the FUSF
treatment of new services and ensuring that those decisions are
reflected in the company's FCC Form 499 submissions.
iii. Verizon has established, and shall maintain, an FUSF oversight
team that will serve as a resource for resolving questions
related to Verizon compliance with applicable FUSF contribution
rules and act as a central point of contact for dissemination
of FCC Form 499 filing requirements throughout the company. The
oversight team will also oversee the development and
dissemination of training material and will monitor changes in
FUSF rules to make sure those changes are documented and
disseminated appropriately. The oversight team includes
representatives of the Verizon legal department and the Verizon
finance division.
iv. Verizon has established procedures to ensure that each
organization within the company that contributes information for
the company's FCC Form 499 submissions certifies to the accuracy
of the information it has provided.
v. Verizon has established procedures to ensure that the company's
completed FCC Form 499s are reviewed by the appropriate legal and
finance organizations prior to submission.
c. Independent Auditing. Verizon independent auditors shall audit the
effectiveness of the company's internal controls over accounting for
FUSF reporting and contributions as part of their annual financial
statement audit. Verizon shall report to the Commission any exceptions
identified by the company's independent auditor with regard to
internal controls over accounting for FUSF reporting and
contributions.
d. Termination. The provisions of this paragraph shall remain in effect
for two (2) years from the Effective Date.
14. The Commission agrees that, absent new material evidence, it will not
use the facts developed in the Investigation through the Effective
Date, or the existence of this Consent Decree, to institute on its own
motion any new proceeding, formal or informal, or to take any action
on its own motion, against Verizon concerning the matters that were
the subject of the Investigation. The Commission further agrees that
it will not use the facts developed in this Investigation through the
Effective Date, 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 Verizon with respect to its basic
qualifications, including its character qualifications, to be a
Commission licensee or authorized common carrier, or with respect to
compliance with the Commission's rules and policies.
15. Nothing in this Consent Decree shall prevent the Commission or its
delegated authority from adjudicating any formal or informal complaint
filed against Verizon pursuant to Section 208 of the Act, 47 U.S.C. S:
208, and to take action in response to such formal complaint. If any
such complaint is made, the adjudication of that complaint will be
based solely on the record developed in that proceeding and the
Commission shall not use any facts developed through the Investigation
in any such proceeding. Except as expressly provided in this Consent
Decree, nothing herein shall prevent the Commission or its delegated
authority from investigating Verizon compliance with the Act, the
Commission's rules, or this Consent Decree.
16. Verizon 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
Adopting Order, provided the Order adopts this Consent Decree without
change, addition, or modification. Verizon shall retain the right to
challenge Commission interpretation of the Consent Decree or any terms
contained herein.
17. Verizon's decision to enter this Consent Decree is expressly
contingent upon the Commission's issuance of the Order adopting the
Consent Decree without change, addition, or modification.
18. Nothing in this Consent Decree shall preclude Verizon from petitioning
the Commission for relief as to future obligations under Section 254 of
the Act and Commission's Rules or other relevant sections of the Act and
the Commission's Rules.
1. 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.
18. The Parties agree that if either Party (or the United States on behalf
of the Commission), brings a judicial action to enforce the terms of
the Order adopting this Consent Decree, neither Verizon nor the
Commission shall contest the validity of the Consent Decree or the
Adopting Order, and Verizon will waive any statutory right to a trial
de novo regarding the terms or validity of the Consent Decree.
Verizon, however, may present evidence that it has not violated the
Consent Decree.
19. The parties agree that this Consent Decree shall become effective on
the Effective Date. Upon release, the Adopting Order and this Consent
Decree shall have the same force and effect as any other order of the
Commission. Any violation of any term of this Consent Decree shall
constitute a separate violation of a Commission order entitling the
Commission to exercise any rights and remedies attendant to the
enforcement of a Commission order.
20. The Parties 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 Verizon does not consent) that provision will
be superseded by such Commission rule or order.
21. Verizon agrees that the provisions of this Consent Decree shall be
binding on its successors and assigns.
22. Verizon 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. Verizon and the Commission each represents and warrants to the other
that it has full power and authority to enter into this Consent
Decree.
24. This Consent Decree may be signed in counterparts.
________________________________
Marlene H. Dortch
Secretary
Federal Communications Commission
________________________________
Date
________________________________
Michael E. Glover
Senior Vice President and Deputy General Counsel
Verizon
________________________________
Date
47 U.S.C. S: 254.
47 C.F.R. S:S: 1.1157, 52.17, 54.706, 54.711, 64.604.
47 U.S.C. S: 154(i).
47 U.S.C. S: 254.
Under this provision, Verizon will not be required to provide FUSF
compliance training to employees whose responsibilities do not include any
decision making regarding FUSF contributions, and whose involvement in
FUSF-related projects is limited to performing non-FUSF specific job
functions.
The finance division has responsibility for all financial matters,
including accounting, internal controls, treasury, and financial
reporting, planning and operations.
Federal Communications Commission FCC 07-122
5
Federal Communications Commission FCC 07-122