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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                        )                               
                                                        
                        )                               
                                                        
                        )   File No. EB-05-IH-0158      
     In the Matter of                                   
                        )   NAL/Acct. No. 200532080139  
     InPhonic, Inc.                                     
                        )   FRN No. 0012-5999-16        
                                                        
                        )                               
                                                        
                        )                               


                     ORDER OF FORFEITURE AND FURTHER NOTICE

                      OF APPARENT LIABILITY FOR FORFEITURE

   Adopted: April 18, 2007   Released: May 3, 2007

   By the Commission:

   I. INTRODUCTION

    1. In this Order of Forfeiture and Further Notice of Apparent Liability
       for Forfeiture, we both impose a forfeiture of $819,905 ("Order of
       Forfeiture"), and propose a new forfeiture of $100,000 ("Further
       Notice of Apparent Liability"), against InPhonic, Inc. ("InPhonic").
       The Order of Forfeiture follows a Notice of Apparent Liability we
       issued on July 25, 2005. Herein we find that InPhonic willfully and
       repeatedly violated: (1) section 64.1195 of the Commission's rules by
       failing to register with the Commission until January 2005; (2)
       sections 54.706(a) and 64.604(c)(5)(iii)(B) of the rules by failing to
       submit certain Telecommunications Reporting Worksheets ("Worksheets")
       from 2002 to 2004; (3) section 254(d) of the Communications Act of
       1934, as amended (the "Act"), and 54.711(a) of the rules by failing to
       contribute to the Universal Service Fund ("USF"); and (4) section
       64.604(c)(5)(iii)(A) of the rules by failing to contribute to the
       Telecommunications Relay Service ("TRS") Fund. The Further Notice of
       Apparent Liability for Forfeiture finds that InPhonic apparently is in
       violation of section 214(a) of the Act, and section 63.18 of the
       Commission's rules, by failing to apply for and obtain authorization
       to provide international telecommunications service.

    2. InPhonic's failures to pay its Congressionally-mandated USF and TRS
       Fund contributions strike at the core of the Commission's mission to
       promote access to affordable, quality telecommunications services for
       all Americans. As such, they are especially serious. In section 254 of
       the Act, Congress codified the historical commitment to universal
       service for consumers in all regions of the nation. In section 225 of
       the Act, Congress directed the Commission to ensure the availability
       of TRS to hearing- and speech-impaired individuals. Both programs are
       supported by mandatory contributions from telecommunications carriers
       providing interstate telecommunications services. The Commission also
       requires certain providers of interstate telecommunications, including
       interconnected Voice over Internet Protocol (VoIP), to contribute to
       the USF. Congress similarly directed the Commission to establish the
       regulatory fee program and to collect fees from its regulatees,
       including telecommunications carriers, to support certain regulatory
       functions. To achieve Congress' goals, carriers subject to
       contribution requirements must provide certain necessary information
       and contribute their equitable share to support these programs.
       Failure to do so threatens the integrity and viability of these
       Congressional mandates. The Commission cannot and will not tolerate
       any carrier's failure to participate in these programs as required by
       our rules, and we will use our forfeiture authority to penalize and
       deter violations such as those committed by InPhonic.

    3. Furthermore, the Commission requires that providers of international
       telecommunications service, including resellers and wireless
       telecommunications carriers, must affirmatively apply for and obtain
       authorization from the Commission pursuant to section 214 of the Act
       and related Commission rules before providing such service. The
       Commission has explained that policy considerations, including
       national security, law enforcement, and foreign and trade policy,
       necessitate Commission review prior to a carrier's provision of
       international service. By providing unauthorized service, InPhonic is
       also violating the conditions applicable to international section 214
       authorizations. InPhonic's apparent violation of these requirements
       demonstrates a disregard for these important interests. The Commission
       cannot tolerate such violations, and must take action to ensure
       carrier compliance.

   II.  BACKGROUND

    4. The facts and circumstances upon which the Order of Forfeiture is
       based are set forth in the InPhonic NAL, and need not be reiterated
       here at length. InPhonic incorporated in 1997, and began providing
       "mobile virtual network operator," or "MVNO," service in August 2002.
       MVNO service is resold wireless telecommunications service. To provide
       this service, InPhonic purchases airtime from Sprint Corp. at
       wholesale rates, and then resells the time to end-users or third
       parties that, in turn, resell the time to end-users under their own
       brand names. InPhonic sells its MVNO service through Star Number,
       Inc., a subsidiary, and under the "Liberty Wireless" brand name ("Viva
       Liberty" in Spanish). Its service has both interstate and
       international components.

   A. Requirements to Register, File Periodic Revenue Information, and
   Contribute to USF and TRS Funds

    5. Both the Act and Commission rules impose a number of obligations on
       providers of interstate telecommunications services, including
       resellers and wireless telecommunications carriers. Pursuant to
       section 64.1195(a) of the Commission's rules and pursuant to
       Commission Order, all carriers that provide, or plan to provide,
       interstate telecommunications services and certain other providers of
       interstate telecommunications must register with the Commission by
       submitting certain information on FCC Form 499-A, the annual
       "Telecommunications Reporting Worksheet." The Commission created this
       requirement to establish "a central repository of key facts about
       carriers" in order to monitor the entry and operation of such
       providers to ensure that, among other things, they are qualified, do
       not engage in fraud, and do not evade oversight. Likewise, unless
       their revenues are de minimis, Commission rules require providers of
       interstate telecommunications services to file revenue information on
       both an annual and quarterly basis, using FCC Form 499-A and FCC Form
       499-Q, respectively. The purpose of these reporting requirements is to
       provide the information necessary to calculate the amount that a
       provider of interstate telecommunications must contribute to certain
       regulatory programs.

    6. The information reported on the Telecommunications Reporting Worksheet
       is needed to administer and fund the universal service and TRS
       programs. Unless specifically exempt, section 54.706(a) requires all
       providers of interstate telecommunications services, including those
       that provide "mobile radio services" and "resale of interstate
       services," to contribute to the USF. Section 64.604(c)(5)(iii)(A)
       requires carriers and certain other providers of interstate
       telecommunications to contribute to the TRS Fund on the basis of their
       interstate end-user telecommunications revenues. The Universal Service
       Administrative Company ("USAC") administers the USF, and the National
       Exchange Carriers Association ("NECA") administers the TRS Fund. USAC
       bills contributors monthly, based on the information they report on
       FCC Form 499-Q, with an annual "true-up," based on the information
       they report on FCC Form 499-A. NECA bills contributors annually.

   B. Requirement to Apply for Authorization to Provide International
   Telecommunications Service

    7. Section 214(a) of the Act prohibits any carrier from constructing,
       extending, or operating any line, and from engaging in transmission
       through any such line, "unless and until there shall first have been
       obtained from the Commission a certificate that the present or future
       public convenience and necessity" require, or will require, the
       construction, extension, or operation of the line. While the
       Commission has granted "blanket" authority to carriers providing
       domestic service, meaning that such carriers need not apply to the
       Commission for such authority before providing domestic service, the
       Commission has not done the same for providers of international
       telecommunications services. Rather, section 63.18 of the Commission's
       rules requires that any carrier that seeks section 214 authority "for
       provision of common carrier communication services between the United
       States, its territories or possessions, and a foreign point shall
       request such authority by application." Through this process the
       applicant provides the Commission with, among other things, contact
       information, ownership information, information on any affiliations it
       may have with foreign carriers, certification that it will comply with
       Commission rules, and certification that the applicant is not subject
       to denial of Federal benefits pursuant to the Anti-Drug Abuse Act of
       1988. The application requirement applies to carriers that resell the
       service of another authorized carrier, and to domestic providers of
       wireless telecommunications service that also provide international
       telecommunications service.

   C. The Commission's Investigation

    8. In 2004, the Enforcement Bureau ("Bureau") sought to identify
       resellers of telecommunications service that had failed to register as
       telecommunications service providers with the Commission as well as
       satisfy other Commission program requirements. To this end, on March
       30 and August 9, 2004, the Bureau's audit staff sent letters to the
       company requesting information pertaining to InPhonic's compliance
       with section 64.1195 of the Commission's rules. On January 18, 2005,
       InPhonic stated that it still had not registered,  but it intended to
       submit by January 31, 2005, all appropriate filings due since the
       company's incorporation in August 2002. On January 28, 2005, InPhonic
       filed three FCC Form 499-Qs, which had been due on May 1, August 1,
       and November 1, 2004. On January 31, 2005, InPhonic finally registered
       by filing its 2003 Form 499-A, and also filed its 2004 Form 499-A.

    9. On March 2, 2005, the Bureau issued a letter of inquiry ("LOI") to
       InPhonic. The LOI directed InPhonic to, among other things, submit a
       sworn, written response to a series of questions relating to
       InPhonic's apparent failure to register, file Telecommunications
       Reporting Worksheets, and make mandated federal telecommunications
       regulatory program payments. On March 18, 2005, InPhonic paid USAC
       $889,189 for USF contributions it owed based on its 2002, 2003 and
       2004 revenue. InPhonic responded to the LOI on April 8, 2005. InPhonic
       made its first TRS Fund payment of $22,455.04 on April 25, 2005,
       approximately nine months after its 2004 TRS contribution became due
       on July 26, 2004.

   10. 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 rule.

   11. On July 25, 2005, we released the InPhonic NAL. We proposed a
       forfeiture of $819,905 against InPhonic for its apparent violations of
       (1) section 64.1195 of the Commission's rules by failing to register
       with the Commission; (2) sections 54.711 and 64.604(c)(5)(iii)(B) of
       the Commission's rules by failing to file Telecommunications Reporting
       Worksheets; (3) section 54.706(a) of the Commission's rules by failing
       to contribute to the USF; and (4) section 64.604(c)(5)(iii)(A) of the
       Commission's rules by failing to contribute to the TRS Fund.

   12. InPhonic filed its response to the NAL  on August 24, 2005. InPhonic
       does not deny that it engaged in each of the violations described in
       the NAL, or that it deliberately, intentionally, and repeatedly
       engaged in the acts that constitute its violations; indeed, it
       acknowledges that "it was late in complying with its regulatory and
       universal service obligations." Yet, InPhonic argues that the
       forfeiture proposed in the NAL must be eliminated or reduced for
       several reasons. First, InPhonic argues that the NAL was unlawful
       because InPhonic does not hold, and is not an applicant for, an
       authorization from the Commission, and in such instances, section
       503(b)(5) of the Act requires the Commission to issue a citation
       before it can impose a notice of apparent liability for forfeiture.
       Second, InPhonic asserts that the statute of limitations has run on
       its failure to make timely TRS Fund payments. Third, InPhonic asserts
       that the proposed forfeitures for each of its violations are
       arbitrary, capricious and excessive, and do not comply with the
       Administrative Procedures Act. Finally, InPhonic asserts that proposed
       penalties in the NAL are disproportionate to the Commission's
       treatment of other carriers and are therefore discriminatory.

   13. Since InPhonic filed its response to the NAL, the Bureau has also
       investigated whether the company has obtained formal authorization
       required by section 214 of the Act to provide international
       telecommunications service, given InPhonic's claim that it is immune
       from forfeiture because it does hold and is not an applicant for a
       Commission-issued authorization. In fact, the Bureau has learned that
       InPhonic apparently does not hold, and has never held, such required
       authorization.

   III.  ORDER OF FORFEITURE

   14. We find by a preponderance of the evidence that InPhonic willfully and
       repeatedly engaged in the violations described in the NAL. More
       specifically, we find that InPhonic willfully and repeatedly violated
       (1) section 64.1195 of the Commission's rules by failing to register
       with the Commission; (2) sections 54.706(a) and 64.604(c)(5)(iii)(B)
       of the Commission's rules by failing to file Telecommunications
       Reporting Worksheets on multiple occasions; (3) section 254(d) of the
       Act and section 54.711(a) of the Commission's rules by failing to
       contribute to the USF on a timely basis on multiple occasions; and (4)
       section 64.604(c)(5)(iii)(A) of the Commission's rules by failing to
       contribute to the TRS Fund on a timely basis on multiple occasions.

   15. Section 503(b)(2)(B) of the Act authorizes the Commission to assess a
       forfeiture of up to $120,000 for each violation or each day of a
       continuing violation, up to a statutory maximum of $1.2 million for a
       single act or failure to act before September 7, 2004, and up to
       $130,000 for each violation or each day of a continuing violation, up
       to a statutory maximum of $1.325 million for a single act or failure
       to act for violations occurring on or after September 7, 2004. 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."

   16. In Globcom, we issued a forfeiture against a carrier for willful and
       repeated violations of section 254(d) of the Act and sections
       54.706(a), 54.711(a), and 64.604 of the Commission's rules. We issued
       a total forfeiture of $806,861, as follows:

   o for Globcom's apparent failure to pay universal service contributions,
   we applied a base forfeiture amount of $20,000 for 12 months of nonpayment
   and added one-half of the total unpaid universal service contributions
   ($340,918) to the base forfeiture of $240,000, for a proposed forfeiture
   of $580,918;

   o for Globcom's apparent failure to pay TRS fund contributions, we applied
   a base forfeiture amount of $10,000 for each of the two violations and
   added one-half of the total unpaid balance ($5,943), for a proposed
   forfeiture of $25,943;

   o for Globcom's apparent filing of an inaccurate Annual Worksheet, we
   applied a forfeiture of $50,000; and

   o for Globcom's apparent failure to submit Quarterly and Annual
   Worksheets, we applied a forfeiture of $50,000 for three occasions when
   Globcom failed to file the revenue information, for a total forfeiture of
   $150,000.

   17. In the InPhonic NAL, we proposed a forfeiture of $819,905. We arrived
       at this amount as follows:

     * for InPhonic's apparent failure to register with the Commission, we
       proposed a forfeiture of $100,000;

     * for InPhonic's apparent failures to submit Telecommunications
       Reporting Worksheets, we proposed a forfeiture of $50,000 for two such
       failures within the one-year period preceding the issuance of the NAL,
       for a total proposed forfeiture of $100,000;

     * for InPhonic's apparent failure to pay universal service
       contributions, we proposed a base forfeiture amount of $20,000 per
       month for seven months of nonpayment within the one-year period
       preceding the issuance of the NAL, and added an upward adjustment of
       one-half of the total unpaid universal service contributions
       ($458,626) to the base forfeiture of $140,000, for a total proposed
       forfeiture of $598,626; and

     * for InPhonic's apparent failure to pay TRS Fund contributions, we
       proposed a base forfeiture amount of $10,000 and added an upward
       adjustment of one-half of the carrier's estimated unpaid TRS Fund
       contributions ($11,279), for a total proposed forfeiture of $21,279.

   As explained below, we reject each of InPhonic's arguments that we should
   either cancel the entire forfeiture, or cancel or reduce certain
   components of the forfeiture, and we therefore impose the forfeiture of
   $819,905 proposed in the NAL.

    A. Commission Authority to Issue the Proposed Forfeitures

   18. InPhonic first argues that the InPhonic NAL is unlawful and must be
       cancelled because the company does not hold, and is not applying for,
       any kind of authorization issued by the Commission. As such, inPhonic
       argues that pursuant to section 503(b)(5) of the Act, the Commission
       must issue it a citation and provide an opportunity for a personal
       interview before issuing a notice of apparent liability.

   19. Significantly, InPhonic does not quote the pertinent sentence in
       section 503(b)(5) of the Act, to wit: "This paragraph shall not apply,
       however, if the person involved is engaging in activities for which a
       license, permit, certificate, or other authorization is required...."
       Thus, although an entity that has not applied for and does not hold an
       FCC authorization must ordinarily receive a citation before becoming
       subject to forfeiture, that entity is subject to forfeiture if it is
       engaged in an activity that requires FCC authorization. As discussed
       above and below, InPhonic provides international telecommunications
       service, and is required to apply for and obtain authorization to do
       so from the Commission. Therefore, the fact that InPhonic is required
       to have such authorization but has not in fact applied for it does not
       preclude the Commission from issuing the NAL and proceeding with this
       Order of Forfeiture pursuant to section 503(b).

    B. Statute of Limitations on the TRS Violation

   20. InPhonic next argues that the one-year statute of limitations for
       InPhonic's failure to timely pay its TRS Fund contributions has
       expired. InPhonic explains that the NAL was mailed on July 27, 2005,
       but its failure to contribute to the TRS Fund that was the subject of
       the NAL occurred on July 26, 2004.

   21. Section 503(b)(6) of the Act provides that the Commission cannot
       impose a forfeiture penalty against a carrier "if the violation
       charged occurred more than 1 year prior to the date of issuance of the
       required notice or notice of apparent liability." Thus, the statute
       does not require service by mail of the NAL on InPhonic within one
       year of its failure to contribute to the TRS Fund, but rather issuance
       of the NAL.  The date of issuance of a notice of apparent liability is
       the date of its public notice, which may or may not coincide with the
       date of service. Under Commission rules, the date of public notice of
       non-rulemaking documents, like the InPhonic NAL, is the date the
       Commission releases the document. The Commission released the NAL on
       July 25, 2005 by making the full text of the document available to the
       public at Commission headquarters on that date, and thus issued the
       document within one year of the company's failure to make its TRS Fund
       contribution on July 26, 2004. In addition, although not legally
       required to do so, on the same date the Commission issued the NAL,
       the Bureau also served the document by facsimile on the counsel who
       had represented the company in connection with the investigation that
       led to the InPhonic NAL, providing actual notice to InPhonic's counsel
       in the investigation.

   22.  In its response to the InPhonic NAL, the company admits that "a copy
       of the NAL was faxed at 4:47 pm on July 25, 2005 to Darius Withers of
       the law firm of Kelley Drye & Warren LLP," but claims that the firm is
       only "one of a handful of law firms that represents InPhonic," and was
       "never authorized to represent InPhonic with regard to the NAL ...."
       InPhonic's attempt to distance itself from its lawyers is meritless,
       and we find that the company was actually served through Mr. Withers
       on July 25, 2005. The InPhonic NAL arises out of Commission File No.
       EB-05-IH-0158, the same file number carried by the InPhonic LOI.
       InPhonic's response to the LOI was submitted over the signature of Mr.
       Withers and other lawyers at Kelley Drye, identifying themselves as
       "Counsel to InPhonic, Inc." The LOI Response was supported by
       affidavits from InPhonic's General Counsel, Senior Vice President and
       Corporate Treasurer, and Chief Financial Officer. Prior to release of
       the InPhonic NAL in the investigation, the Commission received no
       notice that Kelley Drye and/or Mr. Withers no longer represented
       InPhonic. Therefore, we find that service on Mr. Withers constituted
       service on InPhonic for purposes of the InPhonic NAL.

    C. Administrative Procedure Act and Section 503(b)(2)(D)

   23. InPhonic also argues that the forfeitures for each of its violations
       must be reduced because, it claims, we did not consider our forfeiture
       guidelines, which are in effect binding rules, and we did not explain
       why InPhonic's conduct in particular justified a higher penalty than
       the amounts set forth in the guidelines. For example, with respect to
       the $100,000 forfeiture we proposed for InPhonic's registration
       violation, InPhonic states that we should have begun our calculation
       with the base forfeiture of $3,000 for "failure to file required forms
       or information" set forth in our forfeiture guidelines. InPhonic
       acknowledges that the Commission can deviate from the guidelines as
       warranted by consideration of the criteria set forth in section
       503(b)(2)(D), but it claims that we did not apply these factors to
       InPhonic's situation. As a result, InPhonic claims that the amounts of
       the forfeitures we proposed for its various violations do not comply
       with the Administrative Procedure Act or section 503(b)(2)(D) of the
       Act.

   24. As a preliminary matter, InPhonic is simply wrong that the Commission
       has ignored the base forfeiture amounts specified in our guidelines.
       The base forfeitures in the guidelines are preceded by explicit
       statements that "[t]he Commission and its staff may use these
       guidelines in particular cases[, and] retain the discretion to issue a
       higher or lower forfeiture than provided in the guidelines, to issue
       no forfeiture at all, or to apply alternative or additional sanctions
       as permitted by the statute." The base forfeitures in the guidelines
       are then followed by the criteria that the Commission may use to
       adjust a forfeiture upward or downward. InPhonic itself acknowledges
       that the base forfeiture amounts specified in the guidelines are not,
       in fact, binding rules that the Commission must follow when it
       concedes that the Commission may deviate from the guidelines in
       accordance with the criteria set forth in section 503(b)(2)(D). In any
       event, the Commission's established methodologies for determining the
       amount of the forfeiture for the particular violations at issue here
       do take into account the base forfeiture amounts, as well as the
       upward and downward adjustment criteria, specified in section 1.80 of
       the Commission's rules. The Commission followed this methodology
       exactly in the InPhonic NAL.

   25. Next, with respect to section 503(b)(2)(D), InPhonic is wrong that we
       did not comply with the Act because the forfeiture was not
       sufficiently tied to InPhonic in particular. For example, with respect
       to the registration violation, InPhonic states that instead of "a
       particularized Section 503(b)(2)(D) analysis, the FCC proceeds to a
       generic discussion of the importance of registering and of how failing
       to do so can undermine the universal service system." It thus claims
       that "there is no analysis provided in support of any upward
       adjustment, much less the extraordinary upward adjustment in this
       case."

   26. InPhonic's position misrepresents both the statute and our analysis.
       InPhonic suggests that our "generic discussion of the importance of
       registering" is irrelevant to determining the amount of a forfeiture
       for violation of section 64.1195 of the Commission's rules. This
       construction of section 503(b)(2)(D) ignores the fact that the statute
       directs the Commission to consider certain factors about the violation
       itself, in addition to certain factors about the particular violator,
       in establishing a forfeiture. Section 503(b)(2)(D) states: "In
       determining the amount of such a forfeiture penalty, the Commission or
       its designee shall take into account 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." In
       establishing a forfeiture, the Commission must consider certain
       features about both the violation and the violator.

   27. Our analysis satisfied both prongs of section 503(b)(2)(D) for each of
       InPhonic's violations. For example, with respect to the registration
       violation, we explained, as InPhonic itself acknowledges, the
       importance of the registration requirement and how noncompliance
       compromises not only the USF, but also other statutorily-mandated
       programs. We also compared the failure to register to the failure to
       file Telecommunications Reporting Worksheets, and explained why the
       registration violation is more severe and therefore warrants a higher
       forfeiture. With respect to InPhonic itself, we considered the degree
       of the company's culpability and explained that InPhonic had violated
       the registration requirement from the time it began providing service
       until January 31, 2005. In addition, we acknowledged that InPhonic had
       cured its registration violation before we issued the NAL, but
       explained that such action did not reduce the severity of the
       violation because the company did not cure the problem until after the
       Bureau made inquiries about the violations. We also indicated that we
       would consider arguments about InPhonic's ability to pay before
       imposing a forfeiture under certain conditions. Thus, our analysis of
       the registration violation considered all of factors set forth in
       section 503(b)(2)(D), and the analysis appropriately supports a
       forfeiture of $100,000. Our analysis of InPhonic's other violations
       also considered both the general impact of noncompliance with each
       rule, and the degree of InPhonic's misconduct in particular.

   28. Although InPhonic claims on one hand that our analyses of the
       appropriate forfeitures for its various violations were not
       sufficiently tied to its misconduct in particular, on the other hand
       the company also attacks our approach of basing the upward adjustment
       for nonpayment to the TRS Fund and the USF on one-half of the balance
       that a company owed to the funds. This approach, however, which the
       Commission has consistently followed in numerous recent cases, ties
       the upward adjustment of the forfeiture to the impact that a company's
       failure to contribute had on the funds, and, as a consequence, the
       impact on company's competitors. As the Commission has repeatedly
       stated, the upward adjustment "`illustrate[s] that a delinquent
       carrier's culpability and the consequential damage it causes to the
       goal of universal service may vary with the size of the contribution
       it fails to make.'" It is therefore difficult to envision an approach
       that better satisfies that aspect of section 503(b)(2)(D) that
       mandates that we base a forfeiture on the "degree of culpability" of a
       violator - exactly what InPhonic claims we did not do - and on the
       "extent[] and gravity of the violation." Yet InPhonic claims that
       consideration of any amount owing to either fund for any period of
       time beyond the twelve months immediately preceding the date of the
       NAL violates the one-year statute of limitations set forth in section
       503(b)(6) of the Act. It is a well-settled principle of law, however,
       that the Commission may properly consider prior offenses that occurred
       more than one year before a violation to establish the context for
       determining an appropriate forfeiture amount. As a result, our
       approach to the upward adjustment to the forfeiture for violations for
       nonpayment to the TRS Fund and USF not only does not violate the
       one-year statute of limitations, but in fact, best realizes the
       mandate in section 503(b)(2)(D) that our forfeitures take into account
       the "degree of culpability" of a particular violator.

    D. Discriminatory Treatment

   29. As its final argument, InPhonic contends that the forfeitures proposed
       in the NAL are much larger than penalties imposed against small
       carriers for similar violations, and would effect a greater punishment
       on InPhonic than penalties that have been imposed on larger carriers.
       As a result, the NAL "arbitrary [sic] and capriciously discriminates
       against InPhonic and for this reason alone the NAL should be
       cancelled."

   30. As support for its argument involving the larger carriers, InPhonic
       cites two enforcement matters, one involving SBC Communications and
       the other involving Verizon Comunications. In SBC Communications, the
       Commission imposed a forfeiture of $6,000,000 against SBC for
       violating conditions of the Commission's approval of the merger
       between SBC and Ameritech Corporation. InPhonic claims that this
       forfeiture constitutes approximately 0.013 percent of SBC's annual
       common carrier revenues and 0.1 percent of its net income, while the
       forfeiture of approximately $820,000 against InPhonic represents 1.7
       percent of its common carrier revenues and a net loss in its income.
       InPhonic does not mention, however, that the forfeiture imposed
       against SBC was the statutory maximum for the violations at issue,
       while that proposed against InPhonic does not begin to approach the
       maximum for its multiple violations, which would be nearly
       $15,000,000.

   31. In Verizon Communications, the Bureau admonished, but did not impose a
       forfeiture against, the company for failure to publicize certain
       services in six states in accordance with Commission rules, because
       the statute of limitations set forth in section 503(b)(6) had expired
       for these violations. The Bureau explained that "[b]ecause Verizon
       undertook renewed outreach efforts in these six states within the last
       year, we are constrained from pursuing a proposed forfeiture at this
       time." InPhonic claims that the Bureau did not say that the statute of
       limitations had run, and that "because the failure had been rectified
       prior to the issuance of the forfeiture order, ... the Commission
       could not lawfully impose a forfeiture on Verizon." Because the
       Commission did not take this approach with InPhonic, the company
       claims that we engaged in "discriminatory treatment of the
       Commission's Rules against a small carrier in favor [of] a large
       carrier." InPhonic mischaracterizes the admonishment. The Bureau
       clearly explained that Verizon's failures occurred in between January
       2001 and December 2003, more than twelve months before the
       admonishment was issued in 2005. Thus, the fact that the Bureau
       admonished Verizon but issued an NAL against InPhonic does not
       evidence any form of discrimination against InPhonic.

   32. As support for its claim that the Commission's actions against smaller
       carriers demonstrate discrimination, InPhonic points to a number of
       cases where InPhonic asserts the Commission assessed or proposed
       lesser penalties against such carriers for nonpayment into the USF. In
       each of these cases, the Commission assessed a base forfeiture of
       $20,000 for one or two months of nonpayment, with an upward adjustment
       of one-half of the carrier's balance owed to the fund for one or two
       months, whereas we proposed a base forfeiture of $20,000 for each
       month that InPhonic did not contribute to the USF within the one-year
       period preceding the NAL, with an upward adjustment of one-half of its
       total outstanding balance.

   33. As we explained in Globcom, since the ConQuest decision it has become
       apparent that substantially larger forfeiture amounts are needed to
       deter carriers from violating our universal service contribution and
       reporting rules. The Commission held that the time had come to
       implement a substantially greater forfeiture amount in order to deter
       carriers from violating our universal service contribution and
       reporting rules. Clearly, our method of assessing forfeitures prior to
       Globcom was not a sufficient deterrent. Therefore, consistent with
       prior Commission warnings concerning likely increases in forfeiture
       amounts, we properly increased the number of months of USF nonpayment
       on which we assess forfeiture amounts and the discretionary upward
       adjustment, and the Commission fully explained the reasons for doing
       so.

    E. Conclusion

   34. Accordingly, we find no reason to cancel or reduce the forfeiture we
       proposed in the InPhonic NAL. As a result, we impose a forfeiture of
       $819,905 against InPhonic.

   IV.  FURTHER NOTICE OF APPARENT LIABILITY FOR FORFEITURE

   35. In today's Order we also find that InPhonic is apparently in violation
       of section 214(a) of the Act and section 63.18 of the Commission's
       rules by willfully and repeatedly failing to apply for and obtain
       authorization from the Commission to provide international
       telecommunications service. Accordingly, we find that InPhonic is
       apparently liable for an additional forfeiture of $100,000.

   36. Section 214(a) of the Act prohibits any carrier from constructing,
       extending, or operating any line, and from engaging in transmission
       through any such line, "unless and until there shall first have been
       obtained from the Commission a certificate that the present or future
       public convenience and necessity" require, or will require, the
       construction, extension, or operation of the line. Part 63 of the
       Commission's rules sets out the rules for providing U.S.-international
       service, including the requirement that a carrier seek and obtain
       Commission approval prior to providing international service. The
       Commission has explained that the international section 214 review
       process serves several purposes. It enables the Commission to review
       applications for risks to competition, particularly in situations
       where the applicant has an affiliation with a foreign carrier with
       market power on the foreign end of the route that may be able to
       leverage that market power to discriminate against U.S. competitors to
       the detriment of U.S. consumers. The review process also includes
       consultation with the Executive Branch agencies regarding national
       security, law enforcement, foreign policy and trade concerns that may
       be unique to the provision of international service.

   37. For these reasons, section 63.18 of the Commission's rules therefore
       requires that "any party seeking authority pursuant to Section 214 . .
       . for the provision of common carrier communications services between
       the United States, its territories or possessions, and a foreign point
       shall request such authority by formal application." Section
       63.18(e)(2) clearly assigns the obligation to apply for and obtain
       section 214 authorization before providing international service to
       resellers by establishing specific requirements for parties "applying
       for authority to resell the international services of authorized U.S.
       common carriers subject to [section 63.23] of this part," which, in
       turn, identifies the conditions that apply to "carriers authorized to
       resell the international services of other authorized carriers." The
       Commission has specifically stated that this requirement for prior
       approval to provide international service explicitly extends to
       wireless telecommunications carriers.

   38. Notwithstanding these explicit requirements, InPhonic provides
       international service, but apparently does not hold an authorization
       pursuant to section 214 from the Commission. In its annual
       Telecommunications Reporting Worksheets for 2003, 2004, and 2005,
       InPhonic reports international revenues for certain mobile and toll
       services. Yet the Commission's [1]International Bureau's Filing System
       ("IBFS") database has no record that InPhonic or its subsidiaries have
       applied for or obtained section 214 authorization. In addition, as
       discussed above, InPhonic admits that it does not hold "a license,
       permit, certificate or other authorization issued by the Commission."

   39. The Commission has previously proposed forfeitures against
       telecommunications service providers failing to obtain section 214
       authorization prior to providing service. In Philippine Long Distance
       Telephone, the Commission proposed forfeitures of $200,000 each
       against World Communications, Inc. ("WorldCom") and Manila Peninsula
       Hotel ("Peninsula") for failing to obtain section 214 authority prior
       to providing international telecommunications service. The Commission
       found that the violations were egregious and continuing and applied
       upward adjustments of $120,000 to the then-existing base forfeitures
       of $80,000 to assess total forfeitures of $200,000 each. In Ameritech
       Corporation, the Commission issued a $200,000 forfeiture against
       Ameritech for constructing new communications facilities without first
       obtaining authorization from the Commission. The Commission found that
       the requirements of section 214, as indicated by the unambiguous
       language of the statute, should have been readily apparent to
       Ameritech. The Commission also considered Ameritech's ability to pay
       and found that the violation was continuing, and proposed a forfeiture
       of $200,000.

   40. Both the Philippine Long Distance Telephone and the Ameritech
       Corporation decisions were released prior to the Commission's current
       forfeiture guidelines. In 1993, when the Commission released
       Philippine Long Distance Telephone, the base forfeiture for a section
       214 violation under the 1991 Forfeiture Guidelines was $80,000, i.e.,
       80 percent of the maximum forfeiture under section 503 of the Act
       ($100,000 in 1993). The D.C. Circuit vacated the 1991 Forfeiture
       Guidelines in 1994. The Commission's enforcement action in Ameritech
       Corporation was taken in 1995. In 1997, the Commission adopted the
       current forfeiture guidelines, which provide a base forfeiture amount
       of $10,000 for operation without an instrument of authorization for
       the service. Although the Philippine Long Distance Telephone and the
       Ameritech Corporation decisions were issued before the Commission's
       adoption of the current forfeiture guidelines, these decisions provide
       guidance on the appropriate upward adjustment to the base forfeiture
       for a section 214(a) violation, when the Commission's upward
       adjustment factors are implicated.

   41. InPhonic has apparently been operating as an international
       telecommunications service provider since 2002 without authorization
       from the Commission. We therefore find that this apparent violation of
       the Act and the Commission's rules was continuing. Given the
       unambiguous language of the Act, the Commission's rules and decisions,
       and even the Commission's web site, it should have been apparent to
       InPhonic that it was required to obtain section 214 authority from the
       Commission to provide international telecommunications service. In
       light of the Commission's clear requirements, and the important public
       interest considerations involving national security, law enforcement,
       foreign policy and trade policy, we find that InPhonic's failure to
       obtain section 214 authority from the Commission prior to providing
       international telecommunications service was also egregious. We view
       InPhonic's apparent failure to obtain section 214 authority as serious
       a dereliction of its responsibilities under the Act and our rules as
       its failure to register pursuant to section 64.1195(a) of the
       Commission's rules. Just as a telecommunications carrier that fails to
       register can operate outside of the Commission's oversight and evade
       its federal obligations to contribute toward the vital programs linked
       to registration, international telecommunications carriers that fail
       to obtain section 214 authority may endanger important pubic interest
       considerations involving national security, law enforcement, foreign
       policy and trade policy. We also find that a proposed forfeiture must
       be large enough to have a deterrent effect on companies with gross
       revenues commensurate with those of InPhonic. Pursuant to the
       Commission's mandate from Congress to consider "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," we find, consistent with prior precedent for entities
       failing to receive prior authorization from the International Bureau,
       that a proposed forfeiture of $100,000 is warranted for InPhonic's
       apparent willful and repeated failure to obtain section 214 authority
       from the Commission prior to providing international
       telecommunications service.

   V. CONCLUSION

   42. InPhonic operated as a provider of interstate and international
       telecommunications services for multiple years without registering
       with the Commission or making payments to Congressionally-mandated
       telecommunications programs, thereby denying these programs of
       essential funding for an extended period of time and totaling hundreds
       of thousands of dollars in withheld contributions. In light of the
       seriousness, duration and scope of the apparent violations, we find
       that the forfeiture proposed in the InPhonic NAL is warranted. As
       discussed above, this forfeiture amount includes as follows: (1) a
       total proposed penalty of $100,000 for failing to register pursuant to
       section 64.1195 of the Commission's rules; (2) a total proposed
       penalty of $100,000 for failing to file two Telecommunications
       Reporting Worksheets within the year preceding issuance of the
       InPhonic NAL; (3) a total proposed penalty of $598,626 for failing to
       make seven monthly universal service contributions within the year
       preceding issuance of the InPhonic NAL; and (3) a proposed total
       penalty of $21,279 for failing to make its 2004 TRS Fund contribution
       when due.

   43. Furthermore, in light of the seriousness, duration and scope of
       InPhonic's apparent violation concerning its failure to obtain
       Commission approval under section 214(a) to provide international
       telecommunications service, we find that an additional proposed
       forfeiture in the amount of $100,000 is warranted. We direct InPhonic
       to submit within thirty days either as part of its response to this
       Notice of Apparent Liability or separately, a report supported by a
       sworn statement or declaration under penalty of perjury of a corporate
       officer, stating its plan to come into compliance with the relevant
       authorization rules described herein. InPhonic should also submit to
       the Commission within thirty days all authorization applications under
       section 214(a) to provide international telecommunications service. We
       again caution InPhonic that additional violations of the Act or the
       Commission's rules could subject InPhonic to further enforcement
       action. Such action could take the form of higher monetary forfeitures
       and/or possible revocation of InPhonic's operating authority,
       including disqualification of InPhonic's principals from the provision
       of any interstate common carrier services without the prior consent of
       the Commission.

   VI. ORDERING CLAUSES

   44. Accordingly, IT IS ORDERED THAT, pursuant to section 503(b) of the
       Communications Act of 1934, as amended, and section 1.80 of the
       Commission's rules, InPhonic, Inc. IS LIABLE FOR A MONETARY FORFEITURE
       in the amount of $819,905 for willfully and repeatedly violating the
       Act and the Commission's rules.

   45. Payment of the forfeiture shall be made in the manner provided for in
       section 1.80 of the Commission's rules within thirty 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 payment of the full amount of the
       forfeiture under an installment plan should be sent to: Chief, Credit
       and Management Center, 445 12^th Street, S.W., Washington, D.C.

   46. IT IS FURTHER ORDERED THAT, pursuant to sections 4(i) and 214(a) of
       the Act, and section 63.18 and 63.20 of the Commission's rules, within
       thirty days of the release of this FORFEITURE ORDER AND FURTHER NOTICE
       OF APPARENT LIABILITY FOR FORFEITURE, InPhonic SHALL SUBMIT to the
       Commission a report, supported by a sworn statement or declaration
       under penalty of perjury by a corporate officer, stating its plan to
       come into compliance with the authorization rules discussed herein,
       and its application for authority to provide international
       telecommunications service.

   47. IT IS FURTHER ORDERED THAT, pursuant to section 503(b) of the
       Communications Act of 1934, as amended, and section 1.80 of the
       Commission's rules, that InPhonic is hereby NOTIFIED of its FURTHER
       NOTICE OF APPARENT LIABILITY FOR A FORFEITURE in the amount of
       $100,000 for willfully and repeatedly violating the Act and the
       Commission's rules.

   48. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
       Commission's Rules, within thirty days of the release date of this
       FURTHER NOTICE OF APPARENT LIABILITY, InPhonic SHALL PAY the full
       amount of the further proposed forfeiture or SHALL FILE a written
       statement seeking reduction or cancellation of the further proposed
       forfeiture. Payment of the further proposed forfeiture must be made by
       check or similar instrument, as set forth above.

   49. The response, if any, to this FURTHER NOTICE OF APPARENT LIABILITY
       must be mailed to Hillary DeNigro, Chief, Investigations and Hearings
       Division, Enforcement Bureau, Federal Communications Commission, Room
       4-C330, 445 12^th Street, S.W., Washington, D.C. 20554 and must
       include the NAL/Acct. No. referenced above.

   50. 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.

   51. IT IS FURTHER ORDERED that copies of this ORDER OF FORFEITURE AND
       FURTHER NOTICE OF APPARENT LIABILITY shall be sent by certified mail,
       return receipt requested, to Aaron Daniels, Senior Vice-President and
       Corporate Treasurer, InPhonic, Inc., 1010 Wisconsin Avenue, N.W.,
       Suite 600, Washington, D.C. 20007, and to Dana Frix, Chadbourne and
       Parke, LLP, 1200 New Hampshire Avenue, NW, Washington, D.C. 20036.

   FEDERAL COMMUNICATIONS COMMISSION

   Marlene H. Dortch

   Secretary

   InPhonic, Inc., Notice of Apparent Liability for Forfeiture and Order, 20
   FCC Rcd. 13277 (2005) ("InPhonic NAL" or "NAL").

   47 C.F.R. S 64.1195.

   Id. at SS 54.706(a), 64.604(c)(5)(iii)(B).

   47 U.S.C. S 254(d).

   47 C.F.R. S 54.711(a).

   Id. at S 64.604(c)(5)(iii)(A).

   47 U.S.C. S 214(a).

   47 C.F.R. S 63.18.

   See 47 U.S.C. SS 225 ("[T]he Commission shall ensure that interstate and
   intrastate 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").

   47 U.S.C. SS 225, 254(d).

   See 47 U.S.C. S 254(d) ("Any other provider of interstate
   telecommunications may be required to contribute to the preservation and
   advancement of universal service if the public interest so requires.");
   Universal Service Contribution Methodology, Federal-State Joint Board on
   Universal Service, 1998 Biennial Regulatory Review - Streamlined
   Contributor Reporting Requirements Associated with Administration of
   Telecommunications Relay Service, North American Numbering Plan, Local
   Number Portability, and Universal Service Support Mechanisms,
   Telecommunications Services for Individuals with Hearing and Speech
   Disabilities, and the Americans with Disabilities Act of 1990,
   Administration of the North American Numbering Plan and North American
   Numbering Plan Cost Recovery Contribution Factor and Fund Size, Number
   Resource Optimization, Telephone Number Portability, Truth-In-Billing and
   Billing Format, IP-Enabled Services,  Report and Order and Notice of
   Proposed Rulemaking, WC Docket Nos. 06-122 and 04-36, CC Docket Nos.
   96-45, 98-171, 90-571, 92-237, 99-200, 95-116, and 98-170, 21 FCC Rcd 7518
   (2006) (extending section 254(d) permissive authority to require
   interconnected VoIP providers to contribute to the USF) ("2006
   Contribution Methodology Order").

   47 U.S.C. S 214(a); 47 C.F.R. S 63.18.

   See 1998 Biennial Regulatory Review of Int'l Common Carrier Regulations,
   Report & Order, 14 FCC Rcd 4909, 4914-17, PP 14-18 (1999) ("1998
   International Biennial Review Order").

   See 47 C.F.R. SS 63.21, 63.23. We note in particular that neither InPhonic
   nor any of its subsidiaries have filed annual traffic and revenue reports
   for their international service as required by the Commission's rules. See
   id. at SS 43.61, 63.21(d).

   See Response of InPhonic, Inc. to Notice of Apparent Liability,
   EB-05-IH-0158 (dated August 24, 2005) ("InPhonic NAL Response"), at 8.
   InPhonic also sells "wireless activation services" and "wireless enhanced
   data services," id. at 7, but these services were not the subject of the
   NAL.

   See, e.g., Implementation of Section 6002(b) of the Omnibus Budget
   Reconciliation Act of 1993, Annual Report & Analysis of Competitive Market
   Conditions With Respect to Commercial Mobile Radio Servs., Tenth Annual
   Report, 20 FCC Rcd 15908, 15920, P 27 (2005).

   InPhonic NAL Response at 8.

   Id.

   See, e.g., InPhonic's Response to the Enforcement Bureau's March 2, 2005
   Inquiry Regarding Federal Regulatory Fee Payments, EB-05-IH-0158 (dated
   Apr. 8, 2005) ("InPhonic LOI Response"), at Ex. H.

   47 U.S.C. S 254(d), 47 C.F.R. S 64.1195(a); 2006 Contribution Methodology
   Order, 21 FCC Rcd at 7548-49, P 61.

   Implementation of the Subscriber Carrier Selection Provisions of the
   Telecomms. Act of 1996, Third Report & Order & Second Order on
   Reconsideration, 15 FCC Rcd 15996, 16024, P 59 (2000).

   47 C.F.R. S 54.711. Carriers project future quarterly revenues on FCC Form
   499-Q, and report the previous year's revenue on FCC Form 499-A. Section
   64.604(c)(5)(iii)(B) also requires common carriers to complete and submit
   FCC Form 499-A. Id. at S 64.604(c)(5)(iii)(B).

   Id. at S 54.706(a).

   Id. at S 64.604(c)(5)(iii)(A).

   47 U.S.C. S 214(a).

   47 C.F.R. S 63.01(a) ("Any party that would be a domestic interstate
   communications common carrier is authorized to provide domestic,
   interstate services to any domestic point and to construct or operate any
   domestic transmission line as long as it obtains all necessary
   authorizations from the Commission for use of radio frequencies.").

   Implementation of Section 402(b)(2)(A) of the Telecomms. Act of 1996,
   Report & Order in CC Docket No. 97-11, Second Memorandum Opinion & Order
   in AAD File No. 98-43, 14 FCC Rcd 11364, 11366 n. 8 (1999) (grant of
   blanket authority is only for domestic services and does not extend to the
   provision of international services).

   47 C.F.R. S 63.18.

   See id.

   See id. at S 63.18(e)(2).

   1998 International Biennial Review Order, 14 FCC Rcd at 4926-27, PP 38-39.
   See also Personal Communications Indus. Ass'n's Broadband Personal
   Communications Servs. Alliance's Pet. for Forbearance for Broadband
   Personal Communications Servs., Memorandum Opinion & Order & Notice of
   Proposed Rulemaking, 13 FCC Rcd 16857, 16881-84, PP 45-54 (1998)
   (declining PCIA's request to forbear from requiring section 214 authority
   for a broadband PCS carrier to provide international services) ("PCIA
   Forbearance Order"); Implementation of Sections 3(n) and 332 of the
   Communications Act, Regulatory Treatment of Mobile Servs., Second Report &
   Order, 9 FCC Rcd 1411, 1481 n. 369 (1994) (declining to forbear from
   application of section 214 to CMRS carriers' provision of international
   services).

   See Letter from Hugh Boyle, Chief Auditor, Investigations and Hearings
   Division, Enforcement Bureau, to InPhonic (dated Mar. 30, 2004) ("Mar. 30,
   2004 Audit Letter"); Letter from Hugh Boyle, Chief Auditor, Investigations
   and Hearings Division, Enforcement Bureau, to InPhonic (dated Aug. 9,
   2004) ("Aug. 9, 2004 Audit Letter").

   Letter from Karly E. Baraga, Esq., Kelly Drye & Warren, LLP, counsel to
   InPhonic, Inc., to Hugh L. Boyle, Chief Auditor, Investigations & Hearings
   Division, Enforcement Bureau, Federal Communications Commission (dated
   Jan. 18, 2005) ("InPhonic Jan. 18, 2005 Letter").

   On April 1, 2005, InPhonic filed its 2005 Form 499-A on a timely basis.
   InPhonic provided the Bureau no other annual or quarterly
   Telecommunications Reporting Worksheets. InPhonic stated however that it
   filed its Quarterly Worksheet for February 1, 2005, in a timely manner.
   See InPhonic LOI Response at 2.

   Letter from Hillary S. DeNigro, Deputy Chief, Investigations and Hearings
   Division, Enforcement Bureau, Federal Communications Commission, to Darius
   B. Withers, Esq., Kelley Drye & Warren, LLP, counsel to InPhonic, Inc.
   (dated March 2, 2005) ("InPhonic LOI").

   InPhonic LOI Response at Ex. I. According to USAC, InPhonic owed
   $917,251.59 for USF contributions, which was due on March 15, 2005.

   InPhonic LOI Response, supra note 21.

   47 U.S.C. S 503(b)(1)(B); 47 C.F.R. S 1.80(a)(1).

   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 & 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.").

   Callais Cablevision, Inc., 16 FCC Rcd 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) ("SBC Forfeiture Order") (forfeiture paid).

   InPhonic NAL, supra note 1.

   InPhonic NAL Response, supra note 15.

   Id. at 4.

   Id. at 3-4, 15-17.

   Id. at 18-19.

   Id. at 19-28.

   Id. at 7, 30-37.

   47 U.S.C. S 503(b)(2)(B).

   Id.

   Globcom, Inc., Order of Forfeiture, 21 FCC Rcd 4710, 4721-24, PP 29-38
   (2006) ("Globcom Forfeiture Order"); Globcom, Inc. d/b/a Globcom Global
   Communications, Notice of Apparent Liability for Forfeiture & Order, 18
   FCC Rcd 19893, 19902-05, PP 22-32 (2003) ("Globcom NAL").

   47 U.S.C. S 254(d); 47 C.F.R. SS 54.706(a), 54.711(a), 64.604.

   Globcom Forfeiture Order, 21 FCC Rcd at 4721, P 31.

   InPhonic argues that the InPhonic NAL is factually inaccurate in a number
   of ways, although the company does not appear to contend that these
   "mistakes" justify cancellation or reduction of the forfeiture, but rather
   indicate that the company is not as lax about compliance as the NAL
   suggests. As indicated above, the Bureau first sent InPhonic a letter
   inquiring about some of the facts that led to the NAL on March 30, 2004,
   and after receiving no response, the Bureau followed up with a second
   letter on August 9, 2004. InPhonic NAL, 20 FCC Rcd at 13280, P 9. InPhonic
   claims that it never received either of these letters, that in fact, the
   Bureau first contacted the company on January 10 or 11, 2005, and by that
   time the company was already taking steps to correct its failures that are
   the subject of the NAL. InPhonic NAL Response at 8-15. Notwithstanding
   InPhonic's receipt of the 2004 letters, however, it does not claim that it
   voluntarily brought its failures to the attention of the Commission, or
   that it in fact corrected any of its violations until after it received
   inquiries from the Bureau in January 2005. Moreover, while InPhonic notes
   it did register and file Telecommunications Reporting Worksheets in late
   January 2005, it does not dispute that it did not make any payments to the
   USF until March 18, 2005, or to the TRS Fund until April 25, 2005, after
   the Bureau issued its LOI. By this time, as the InPhonic NAL concludes,
   the company had been operating without participating in any of the
   Commission programs at issue since 2002. In sum, the Bureau clearly was
   investigating InPhonic in the absence of any disclosure by the company of
   its wrongdoing, and before InPhonic corrected any of the filing,
   non-payment, and registration violations that are the subject of the NAL.
   The company therefore is not entitled to a reduction in the proposed
   forfeiture amount.

   InPhonic NAL Response at 15-17. InPhonic states that section 503(b)(5) of
   the Act provides: "No forfeiture liability shall be determined under this
   subsection against any person, if such person does not hold a license,
   permit, certificate, or other authorization issued by the Commission, and
   if such person is not an applicant for a license, permit, certificate, or
   other authorization issued by the Commission, unless, prior to the notice
   required by paragraph (3) of this subsection or the notice of apparent
   liability required by paragraph (4) of this subsection, such person (A) is
   sent a citation of the violation charged; (B) is given a reasonable
   opportunity for a personal interview with an official of the Commission,
   at the field office of the Commission which is nearest to such person's
   place of residence; and (C) subsequently engages in conduct of the type
   described in such citation." 47 U.S.C. S 503(b)(5).

   Id. at S 503(b)(5).

   See supra P 7 and infra PP 35-41.

   Because we find that InPhonic is subject to section 503(b)(1)(B) given the
   requirement that it must obtain Commission authorization under section
   214, we need not and do not rule herein on InPhonic's position that it is
   not a Commission licensee.

   InPhonic NAL Response at 18-19.

   Id. at 19 & n.17.

   47 U.S.C. S 503(b)(6)(B) (emphasis supplied).

   See Colorado Small Business Dev. Assoc., Inc., Memorandum Opinion & Order,
   15 FCC Rcd 24314, 24316, P 7 (2000) ("the statute does not require that
   the NAL be received within one year of the violation, but that the NAL
   must be issued within one year of the violation.").

   Cf. 47 C.F.R. S 1.4(b)(2). InPhonic is correct that the Commission did not
   list the InPhonic NAL on its electronic daily list of releases until July
   26, 2005. See InPhonic NAL Response at 19 n.17. The InPhonic NAL, however,
   appeared along with seven others under the boldface heading "ADDENDA: THE
   FOLLOWING ITEMS, RELEASED JULY 25, 2005, DID NOT APPEAR IN DIGEST NO.
   140," i.e., the agency's daily list of releases for the preceding day.
   Daily Digest, Vol. 24, No. 141 (July 26, 2005). The documents were
   released the preceding day by operation of the Commission's procedures. At
   that same time, the Commission also made the documents available to the
   public. The Commission routinely provides information electronically about
   some documents the day after they are released. The date of issuance of a
   non-rulemaking document like the InPhonic NAL is however the date of
   release, the date the Commission makes the full text of the document
   available to the public.

   InPhonic NAL Response at 19, n.17.

   InPhonic LOI Response at 2.

   InPhonic NAL Response at 20-29.

   47 C.F.R. S 1.80(b)(4).

   InPhonic argues that the forfeitures we proposed for its failures to file
   Telecommunications Reporting Worksheets and for failures to contribute to
   the USF and TRS Funds suffer from the same deficiencies, i.e., that we did
   not begin with what InPhonic contends are the applicable base forfeitures
   for the violations, and that we did not explain why we deviated from the
   base forfeitures in InPhonic's particular case. InPhonic NAL Response at
   26-29.

   InPhonic cites U.S. Telecom Ass'n v. FCC, 28 F.3d 1232 (D.C. Cir. 1994)
   for the proposition that the D.C. Circuit "has concluded that where the
   Commission codifies penalties for particularized behavior such penalties
   constitutes [sic] Commission Rules and the Commission must, to some
   extent, be constrained by them because they are binding Rules." InPhonic
   NAL Response at 23. InPhonic misrepresents the case. The court found that
   the Commision's earlier forfeiture standards should have been subject to
   notice and comment because the standards functioned as a rule and not a
   policy statement, in part because the agency seldom deviated from strict
   application of the standards. The court did not make the global
   pronouncement InPhonic claims. Following the USTA case, the Commission
   revised the standards, recast them as guidelines and has applied them
   without the rigidity that attended the old standards. Indeed, in arguing
   that the Commission has failed to adhere strictly to the guidelines,
   InPhonic appears to recognize the fact that we do not treat the guidelines
   as binding rules. InPhonic also appears to recognize as much when it later
   acknowledges that the InPhonic NAL and the USTA case involve "opposite"
   problems. Id. at 25.

   47 C.F.R. S 1.80(b)(4), note (emphasis supplied).

   Id. See also Commission's Forfeiture Policy Statement & Amendment of
   Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines, Report
   & Order, 12 FCC Rcd 17087, 17101, P 29 (1997) ("1997 Forfeiture Policy
   Statement") (explaining that "[b]ecause th[e forfeiture guidelines that
   are being adopted as a Note to Section 1.80] is only a guideline and not a
   binding rule, however, the Commission retains its discretion to depart
   from the guidelines where appropriate").

   InPhonic NAL Response at 21.

   47 C.F.R. S 1.80. See, e.g., Globcom Forfeiture Order,  21 FCC Rcd at
   4721-24, PP 31-38; Globcom NAL, 18 FCC Rcd at 19905, PP 31-32 ("The
   Commission's Forfeiture Policy Statement and implementing rules establish
   $3,000 as the base forfeiture for failing to provide required forms or
   information. We find that a substantial upward adjustment is appropriate
   [for failing to file periodic revenue information]."); InPhonic NAL at
   13286-87, PP 25-26 ("The Commission's Forfeiture Policy Statement and
   implementing rules prescribe a base forfeiture of $3,000 for failure to
   file required forms or information. ... Taking into account all of the
   factors enumerated in section 503(b)(2)(D) of the Act, we conclude that a
   proposed forfeiture of $100,000 is warranted [for failing to register with
   the Commission pursuant to section 64.1195 of the Commission's rules].").

   InPhonic NAL Response at 23-24.

   Id. at 25-26 (emphasis in original).

   InPhonic NAL, 20 FCC Rcd at 13287, P 25.

   Id. at 13287, P 26. See also id. at 13282, P 15. We therefore disagree
   with InPhonic that we were "analytically wrong" in assigning a higher
   forfeiture for failure to register than failure to file Telecommunications
   Reporting Worksheets. As we explained in the NAL, "failure to register is
   an even more egregious violation" because carriers that are not on record
   operate outside of the requirements of the Act and the Commission's rules,
   and can only be detected through time-intensive compliance reviews, which
   delays detection of their misconduct, and imposes administrative burdens
   on the Commission. Id. at 13287, P 26.

   Id. at 13282, P 14.

   Id. at 13283, P 16.

   Id. at 13289, P 38.

   See id. at 13283-84, PP 17-19 & 13288, P 27 (failure to file Worksheets);
   id. at 13284, P 20 & 13288, P 28-29 (failure to contribute to the USF);
   id. at 13285, P 21-22 & 13288-89, P 30-31 (failure to contribute to the
   TRS Fund).

   E.g., Globcom Forfeiture Order, 21 FCC Rcd at 4721, P 31.

   Globcom NAL, 18 FCC Rcd at 19904, P 27 (quoting Matrix Telecom, Inc.,
   Notice of Apparent Liability, 15 FCC Rcd 13544, 13547, P 8 (2000), which
   cites Conquest Operator Servs. Corp., Forfeiture Order, 14 FCC Rcd 12518,
   12527, P 19 (1999)).

   InPhonic NAL Response at 29-30.

   E.g., Roadrunner Transp., Inc., Forfeiture Order, 15 FCC Rcd 9669,
   9671-72, P 8 (2000) ("While the Commission may not ... find the Licensees
   liable for violations committed prior to [the NAL], it may lawfully look
   at facts arising before that date in determining an appropriate forfeiture
   amount."); Cate Communications Corp., Memorandum Opinion & Order, 60 Rad
   Reg 2d 1386, 1388,  P 7 (1986) (holding that facts prior to the statute of
   limitations period may be used to place "the violations in context, thus
   establishing the licensee's degree of culpability and the continuing
   nature of the violations"); Eastern Broadcasting Corp., Memorandum Opinion
   & Order, 11 FCC2d 193, 195, P 6 (1967) ("Earlier events may be utilized to
   shed light on the true character of matters occurring within the
   limitations period."). InPhonic apparently fails to "distinguish between
   conduct the Commission may consider in determining a licensee liable for a
   forfeiture and conduct or other matters the Commission may consider in
   determining the degree of culpability." Eastern Broadcasting Corp., 11
   FCC2d at 193, P 2 (1967).

   InPhonic NAL Response at 31.

   Id. at 31-35 (citing SBC Communications, Inc., Forfeiture Order, 17 FCC
   Rcd 19923 (2002); Verizon Communications, Inc., Memorandum Opinion &
   Order, 20 FCC Rcd 4244 (Enf. Bur. 2005)).

   SBC Communications, 17 FCC Rcd at 19934, P 23.

   InPhonic NAL Response at 35.

   The statutory maximum forfeiture against InPhonic for its failure to
   register, file two Worksheets, make seven USF contributions, and make one
   TRS Fund contribution would be $14,575,000.

   Verizon Communications, 20 FCC Rcd at 4247, P 8.

   InPhonic NAL Response at 32.

   Id. at 34.

   Verizon Communications, 20 FCC Rcd at 4246, P 5.

   InPhonic NAL Response at 35-36 (citing PTT Telekom, Notice of Apparent
   Liability, 16 FCC Rcd 7477, 7479-80, PP 7-8 (2001); America's Tele-Network
   Corp., Notice of Apparent Liability, 15 FCC Rcd 20903, 20906, PP 8-9
   (2000) ("ATNC"); Intellicall Operator Servs., Notice of Apparent
   Liability, 15 FCC Rcd 13539, 13541-42, PP 7-8 (2000); Matrix, 15 FCC Rcd
   at 13546-47, PP 7-8; North American Tel. Network, LLC, Notice of Apparent
   Liability, 15 FCC Rcd 14022, 14024, P 8 (2000); Conquest, 14 FCC Rcd at
   12527-28, PP 19-20).

   Globcom Forfeiture Order, 21 FCC Rcd at 4723-24, P 36; Globcom NAL, 18 FCC
   Rcd at 19903, PP 25-26.

   Globcom Forfeiture Order, 21 FCC Rcd at 4724, P 38 ("we affirm the
   forfeiture calculation methodology for nonpayment of universal service
   contributions and reporting violations as set forth in the Globcom NAL. We
   again warn carriers that if the forfeiture methodology described herein is
   not adequate to deter violations of our USF and TRS rules, our statutory
   authority permits the imposition of much larger penalties and we will not
   hesitate to impose them."); Globcom NAL, 18 FCC Rcd at 19903, PP 25-26.

   Globcom Forfeiture Order, 21 FCC Rcd at 4724, P 37; Globcom NAL, 18 FCC
   Rcd at 19903, P 26.

   Globcom Forfeiture Order, 21 FCC Rcd at 4723-24, PP 36-38; Globcom NAL, 18
   FCC Rcd at 19903-04, PP 25-27.

   47 U.S.C. S 214(a).

   47 C.F.R. S 63.18.

   47 U.S.C. S 214(a).

   47 U.S.C. Part 63.

   See 1998 International Biennial Review Order, 14 FCC Rcd at 4915-16, 4918,
   4921, PP 16, 21, 27; PCIA Forbearance Order, 13 FCC Rcd at 16883, PP
   50-51.

   See 1998 International Biennial Review Order, 14 FCC Rcd at 4914-16, PP
   14-16; PCIA Forbearance Order, 13 FCC Rcd at 16882-83, P 50.

   1998 International Biennial Review Order, 14 FCC Rcd at 4914-15, P 14;
   PCIA Forbearance Order, 13 FCC Rcd at 16882, P 50.

   47 C.F.R. S 63.18.

   Id. S 63.18(e)(2).

   1998  International Biennial Review Order, 14 FCC Rcd at 4926-27, PP 38-39
   (the public interest concerns for requiring prior review of international
   section 214 applications apply equally to CMRS carriers); PCIA Forbearance
   Order, 13 FCC Rcd at 16881, P 46 (all CMRS carriers are required to obtain
   an international section 214 authorization before providing international
   service). In 2004, the Commission sought comment on whether to reconsider
   the prior application requirement for certain wireless carriers, but to
   date it has not rescinded or modified that requirement. Amendment of Parts
   1 & 63 of the Commission's Rules, Notice of Proposed Rulemaking, 19 FCC
   Rcd 4231, 4238-4241, PP 15-21 (2004).

   See InPhonic LOI Response at Ex. H.

   See
   http://svartifoss2.fcc.gov/myibfs/quickSearch.do?sortBy=callsign&ssid=960021005&pgid=2.

   InPhonic NAL Response at 17.

   Philippine Long Distance Tel. Co., Order & Notice of Apparent Liability
   for Forfeitures, 8 FCC Rcd 755 (1993).

   Id. at P 15. The forfeitures against WorldCom and Peninsula were later
   cancelled due to insufficient evidence. Philippine Long Distance Tel. Co.,
   Order, 13 FCC Rcd 21520 (1998), aff'd, Order on Recons., 16 FCC Rcd 16612
   (2001).

   Ameritech Corp., Apparent Liability for Forfeiture, 10 FCC Rcd 10559
   (1995).

   Id. at 10560, P 9.

   Id. Ameritech and the Commission subsequently entered into a Consent
   Decree to resolve the investigation and Ameritech made a $150,000
   voluntary contribution to the U.S. Treasury. Ameritech Corp., Order, 11
   FCC Rcd 15474 (1996).

   The current forfeiture guidelines are set forth in the Commission's 1997
   Forfeiture Policy Statement, 12 FCC Rcd 17087. The forfeiture guidelines
   applicable from 1991-94 are set forth in Standards for Assessing
   Forfeitures, Policy Statement, 6 FCC Rcd 4695 (1991) ("1991 Forfeiture
   Guidelines").

   1991 Forfeiture Guidelines, 6 FCC Rcd 4695, Appendix I. The 1991
   Forfeiture Guidelines provided for upward adjustments, which included an
   additional percentage of the maximum forfeiture permitted under section
   503 of the Act, 47 U.S.C. S 503, as follows: egregious misconduct, 50-90
   percent; ability to pay/relative disincentive, 50-90 percent; intentional
   violation, 50-90 percent; substantial harm, 40-70 percent; substantial
   economic gain, 20-50 percent; repeated or continuous violation, variable
   up to the statutory maximum per violation or per day of a continuing
   violation. Id. at Appendix II.

   US Tel. Assoc. v. FCC, 28 F.3d 1232 (D.C. Cir. 1994).

   Forfeiture Policy Statement, 12 FCC Rcd 17087, Appendix A; 47 C.F.R. S
   1.80.

   47 U.S.C. S 214(a).

   See, e.g., 47 C.F.R. SS 63.12, 63.18, 63.20, 63.21, 63.23; 1998
   International Biennial Review Order, 14 FCC Rcd 4909;  Regulation of Int'l
   Common Carrier Services, Report and Order, 7 FCC Rcd 7331 (1992)
   ("International Resale Order").

   For example, the Commission's website has a list of frequently asked
   questions about section 214 applications for providers of international
   telecommunications services. See
   [2]http://www.fcc.gov/ib/pd/pf/214guide.html. Among the questions and
   answers are the following: "Question: If I am merely reselling the
   international services of another carrier, do I have to file a section 214
   application? Answer: Yes, including in the case of mobile international
   services. Refer to 47 CFR S 63.18(e)(2), global resale service."

   See 1998 International Biennial Review Order, 14 FCC Rcd at 4915-17, PP
   15-18, 4939-40, PP 72-74.

   47 C.F.R. S 64.1195(a).

   See InPhonic LOI Response at Ex. H (submitting gross annual revenue on its
   2003-05 Annual Worksheets).

   47 U.S.C. S 503(b)(2)(D).

   See, e.g., DIRECTV, Notice of Apparent Liability for Forfeiture, 19 FCC
   Rcd 10939 (2004) (proposing a substantial forfeiture against a company
   that failed to obtain requisite international authorization from the
   Commission).

   47 C.F.R. S 64.1195.

   See Business Options, Inc., Consent Decree, 19 FCC Rcd 2916 (2003); NOS
   Communications, Inc., Affinity Network Inc.  & NOSVA LP, Consent Decree,
   2003 WL 22439710 (2003).

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

   47 C.F.R. S 1.80.

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

   See 47 C.F.R. S 1.1914.

   47 U.S.C. SS 154(i), 214(a).

   47 C.F.R. SS 63.18, 63.20.

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

   47 C.F.R. S 1.80.

   See 47 C.F.R. S 1.80(f)(3).

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   Federal Communications Commission FCC 07- 58

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                                  Federal Communications Commission FCC 07-58

References

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