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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
File No. EB-04-IH-0518
In the Matter of )
NAL/Acct. No.200632080005
Global Teldata II, LLC )
FRN No. 0010-8659-96
)
)
)
ORDER OF FORFEITURE
Adopted: April 18, 2007 Released: May 3, 2007
By the Commission:
I. INTRODUCTION
1. In this Order of Forfeiture, we assess a monetary forfeiture of
$236,774 against Global Teldata II, LLC ("Global Teldata"). Following
the Notice of Apparent Liability and Order the Commission issued on
October 31, 2005, we find that Global Teldata willfully and repeatedly
violated section 64.1195 of the Commission's rules by failing to
register with the Commission until November 17, 2004, and section
54.711(a) of those rules by failing to submit certain
Telecommunications Reporting Worksheets ("Worksheets") prior to
November 17, 2004. In addition, we find that Global Teldata willfully
and repeatedly violated section 254(d) of the Communications Act of
1934, as amended (the "Act"), and section 54.706(a) of the
Commission's rules by failing to contribute to the Universal Service
Fund ("USF") in 2004 and early 2005.
II. BACKGROUND
A. Obligations to Register, File Periodic Revenue Information, and
Contribute to the USF
2. The facts and circumstances surrounding this case are set forth in the
NAL, and need not be reiterated here at length. Global Teldata began
operations on April 1, 2003 as a reseller of local exchange service
and intrastate, interstate, and international interexchange service.
3. Both the Act and the Commission's rules impose a number of obligations
on providers of interstate telecommunications services, including
resellers such as Global Teldata and providers of interconnected Voice
over Internet Protocol (VoIP). These carriers must register with the
Commission, report information, and contribute to the USF and, in most
cases, other Commission programs. Section 64.1195(a) of the
Commission's rules first requires all carriers that provide, or plan
to provide, interstate telecommunications services to 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, among other things, that they are qualified,
do not engage in fraud, and do not evade oversight.
4. The Commission requires carriers to provide revenue information on FCC
Form 499, Telecommunications Reporting Worksheet, on a periodic basis,
and the administrators use that information to determine each
carrier's universal service and other contributions. In 2001, the
Commission modified its reporting requirements for the universal
service program to require carriers to file not only an Annual
Worksheet, but also to file a Worksheet each quarter projecting their
interstate and international revenue for the upcoming quarter and
providing their interstate and international revenues from the
previous quarter. The projected revenue information provided on the
Quarterly Worksheets determines each carrier's contribution to the
universal service fund on a quarterly basis, with a yearly true-up
using the Annual Worksheet.
5. Section 254(d) of the Act, section 54.706(a) of the Commission's
rules, and Commission Orders further require all telecommunications
carriers that provide interstate telecommunications services,
including resellers such as Global Teldata and providers of
interconnected VoIP, to contribute to the USF. This obligation is the
product of a contribution factor and some portion of a carrier's
revenue. The Universal Service Administrative Company ("USAC") is the
administrator of the USF and bills contributors monthly, based on the
information they report on FCC Form 499-Q, with an annual "true-up"as
noted above.
B. The Commission's Investigation
6. On March 30, 2004, the audit staff of the Enforcement Bureau
("Bureau") sent a letter to Global Teldata requesting information
pertaining to Global Teldata's compliance with section 64.1195 of the
Commission's rules. Global Teldata responded on May 25, 2004, briefly
stating that it believed it was de minimis for USF purposes in 2003.
Because Global Teldata had not registered with the FCC, the Bureau
issued a letter of inquiry ("LOI") to it on October 28, 2004, which
directed the company to submit a sworn written response relating to
its apparent failure to comply with section 64.1195 of the
Commission's rules, among other things. In its November 17, 2004 LOI
Response, Global Teldata again stated that it believed it was de
minimis for USF purposes in 2003 and that it was unaware it must file
for the other programs notwithstanding a de minimis USF obligation. In
addition, Global Teldata represented that its final revenue figures
for January-October 2004 of $204,016 exceeded for the first time the
de minimis threshold for USF contributions. Global Teldata also stated
that, through a billing software package provided by a third-party
vendor, it automatically billed and collected partial payments for the
USF from its end-user customers.
7. On November 17, 2004, the same day that Global Teldata filed its
response to the LOI, it filed a seven-month late 2004 Form 499-A (due
April 1, 2004) and an initial quarterly Worksheet for the first
quarter of 2005 (due November 1, 2004). As a result of these filings,
USAC began invoicing Global Teldata for its USF obligations, and the
company began paying current invoiced monthly USF contributions on
February 14, 2005. It also paid a total of $53,548 in several monthly
installments for the overdue USF assessment attributable to 2004.
8. On August 29, 2005, however, in response to a supplemental LOI, Global
Teldata disclosed for the first time that its actual international and
interstate telecommunications revenue from end users for January to
October 2004 had been $722,368, over three times the amount of
$204,016 originally reported in the November 17, 2004 LOI Response.
The revised amount was larger because Global Teldata did not
previously include USF charges and subscriber line charges that it had
been recovering automatically from its customers through line items in
a billing software package that it had obtained from a third party. In
addition, Global Teldata reported that cumulative interstate end user
telecommunications revenue for the first two months of 2004 was
$128,785, an amount already in excess of the annual de minimis level.
9. The Commission released the Global Teldata NAL on October 31, 2005,
concluding that Global Teldata apparently violated section 254(d) of
the Act and sections 54.706(a), 54.711(a), and 64.1195 of the
Commission's rules by willfully and repeatedly failing: (1) to
register with the Commission until November 17, 2004; (2) to file one
quarterly Worksheet due on November 1, 2004; and (3) to make three
contributions to the USF due on November 15 and December 15, 2004, and
January 15, 2005. The Commission proposed a total forfeiture of
$236,774 for these apparent willful and repeated violations.
10. Global Teldata filed its response to the NAL on November 29, 2005.
Global Teldata argued that the failure to register was not repeated
since it occurred only on April 1, 2003, the date when it commenced
interstate telecommunications operations without registering, and this
violation is therefore beyond the applicable one-year limitations
period in the forfeiture provisions of section 503(b)(1)(B) of the
Act. Global Teldata also claimed the proposed forfeitures for Global
Teldata's failure to timely file its initial Quarterly Worksheet and
failures to contribute to the USF should be reduced because a
carrier's honest errors in determining the first time it becomes
subject to filing and contribution requirements by exceeding the USF
de minimis threshold involves relatively less culpability than a
carrier's errors in making successive filings. Finally, Global Teldata
contended a total forfeiture that represents 27 percent of Global
Teldata's interstate telecommunications revenue in 2004 is excessive
under any measure.
11. 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. The
legislative history to section 312(f)(2) of the Act clarifies that
this definition of "repeated" applies to both sections 312 and 503(b)
of the Act, in the same way that the definition of "willful" does. 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.
12. Section 503(b)(2)(B) of the Act authorizes the Commission to assess a
forfeiture of up to $130,000 for each violation or each day of a
continuing violation, up to a statutory maximum of $1.325 million for
a single act or failure to act. In determining the appropriate
forfeiture amount, the Commission considers 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."
III. DISCUSSION
13. As discussed below, we find by a preponderance of the evidence that
Global Teldata willfully and repeatedly engaged in all of the
violations described in the Global Teldata NAL. More specifically, we
find that Global Teldata willfully and repeatedly violated section
64.1195 of the Commission's rules by failing to register with the
Commission; section 54.711(a) of the Commission's rules by failing to
file one Quarterly Worksheet on a timely basis; and section 254(d) of
the Act and section 54.706(a) of the Commission's rules by failing to
contribute to the USF on a timely basis on three occasions.
14. In the Global Teldata NAL, the Commission proposed a forfeiture of
$236,774 for Global Teldata's apparent willful and repeated violations
of section 254(d) of the Act and sections 54.706(a), 54.711(a), and
64.1195 of the Commission's rules. The Commission proposed a
forfeiture of $100,000 for Global Teldata's failure to register with
the Commission within the one-year period preceding the issuance of
the NAL. For Global Teldata's apparent failure to timely file
Telecommunications Reporting Worksheets, the Commission proposed a
forfeiture of $50,000 for the one instance of non-filing within the
one-year period preceding the NAL (i.e., the filing due November 1,
2004). Finally, for Global Teldata's apparent failure to pay universal
service contributions, the Commission proposed a base forfeiture
amount of $20,000 for three months of nonpayment within the one-year
period preceding the NAL (i.e., the payments due on November 15 and
December 15, 2004, and January 15, 2005), for a base forfeiture of
$60,000, and then added one-half of the total unpaid universal service
contributions ($26,774) to the base forfeiture of $60,000, for a total
proposed forfeiture of $86,774. These forfeiture calculations were
consistent with other, similar actions the Commission has recently
taken involving apparent USF violations. As explained below, we reject
Global Teldata's arguments to cancel or reduce the amount of the
forfeiture, and therefore impose the full forfeiture of $236,774.
A. Global Teldata's Continuous Violation of the Requirement to Register
Was Within the Applicable One-Year Limitations Period
15. In the NAL, the Commission found that Global Teldata was apparently
liable for failing to register pursuant to section 64.1195. Global
Teldata contends that the violation for failure to register occurred
on April 1, 2003, the date when it commenced interstate
telecommunications service without registering, and that the violation
was not repeated thereafter. Accordingly, it argues that this singular
violation did not occur within the one-year limitations period for
forfeiture actions set forth in section 503(b)(6) of the Act, in this
case October 31, 2004 (i.e., one year before the NAL was issued on
October 31, 2005). In particular, Global Teldata contends that because
section 503(b)(1)(B) makes an entity liable for a forfeiture only when
it has "willfully or repeatedly" (emphasis added) violated the Act or
a Commission order or rule, that provision does not make an entity so
liable for engaging in a continuing violation. Global Teldata appears
to argue that if Congress had intended in section 503 for "repeated"
to mean "an act that continues for more than one day" as opposed to
its "plain meaning [of] an act that is committed more than once,"
Congress would have explicitly so stated, as it has in section
312(f)(2) of the Act. Global Teldata therefore concludes that, because
the Commission's use of an overbroad definition of "repeated" as
including a continuing act was improper under section 503, its failure
to register on April 1, 2003 did not occur within a year before the
issuance of the NAL and the alleged violation is therefore beyond the
applicable limitations period for this forfeiture.
16. We reject this argument because Global Teldata misstates and
misinterprets the clear language and legislative history of these
statutes and their application to the present proceeding. Section
312(f)(1) defines "willful" as "the conscious and deliberate
commission or omission of [an] act, irrespective of any intent to
violate" the law. Section 312(f)(2) defines "repeated" as "the
commission or omission of [an] act more than once or, if such
commission or omission is continuous, for more than one day." In 1982,
Congress extended both of the definitions of these respective terms to
section 503. After discussing the definition of "willful," the
Conference Report states:
`Repeated' means more than once, or where the act is continuous, for more
than one day. Whether an act is considered to be "continuous" would depend
upon the circumstances in each case. The definitions are intended
primarily to clarify the language in sections 312 and 503, and are
consistent with the Commission's application of those terms in Midwest
Radio-Television, Inc., 45 F.C.C. 1137 (1983).
Thus, Congress clearly intended that the definition of "repeated" in
section 312 include a continuous violation lasting for more than one day
and that such a repeated violation would subject a violator to the section
503 forfeiture provisions. This interpretation is also confirmed by the
plain language of section 503(b)(2)(B) of the Act, which authorizes the
Commission to assess an individual forfeiture for each violation or each
day of a continuing violation," up to the statutory maximum for a single
act or failure to act.
17. Applying this standard to the instant case, we conclude that Global
Teldata's failure to register was continuing and, therefore,
"repeated" within the meaning of section 503. Global Teldata's failure
to register left it outside the purview of the Commission and USAC on
a continuing basis each day it provided service without registering
after April 1, 2003. These negative consequences continued through the
Bureau's first knowledge of Global Teldata's non-compliance through
the 2004 audit and ended only when the company finally registered with
the Commission on November 17, 2004. Accordingly, we find Global
Teldata's violation of section 64.1195 of the Commission's rules
occurred within the one-year limitations period before the NAL was
issued on October 31, 2005.
B. The Forfeiture Amounts Are Not Excessive
1. Failure to Timely File the Initial Quarterly Worksheet
18. The Commission proposed a $50,000 forfeiture for Global Teldata's
failure to timely file one Worksheet. Global Teldata admits that it
filed the Worksheet late, and the Worksheet reported incorrect
revenues, but raises four arguments as to why the proposed forfeiture
should be reduced to $10,000 under the factors enumerated in section
503(b)(2)(D) of the Act. First, it contends that, in the course of
normal business practice, it did not learn that it was above the de
minimis level until November 2004. Second, Global Teldata claims that
the initial exclusion of reportable revenues, i.e., revenues from USF
and subscriber line charges that it had been recovering through its
third-party billing software, was a simple mistake. Third, it also
asserts that for a company that has evolved from de minimis to covered
status, deciding the timing and content of a first Worksheet is a
matter of judgment and, thus, honest errors are more likely. Fourth,
Global Teldata argues that a reduction is warranted because it has
timely filed all worksheets since it first learned that it was above
the de minimis level.
19. We decline to reduce the forfeiture. Global Teldata and its corporate
predecessor have been in the telecommunications industry for years and
were on notice of the Commission's reporting and contribution
requirements. With respect to its first argument, we are not persuaded
by Global Teldata's claim that it did not learn that it had exceeded
the de minimis level in the course of normal business until November
2004. Even under its original, incorrect computation methodology that
excluded USF and subscriber line charges from interstate
telecommunications revenues, it should have realized it was
approaching the de minimis threshold long before apparent
telecommunications revenues reached approximately $200,000 in October
2004.
20. Global Teldata's second assertion, that this incorrect methodology in
2004 was a "simple mistake," is belied by its continued use of that
erroneous approach until the August 29, 2005 LOI Response, despite
repeated opportunities to re-examine its improper computation
methodology and data in the course of preparing two previous LOI
responses and several late-filed Form 499s. Throughout this period,
its own software-generated billing detail should have alerted it to
these issues. Thus, from at least the beginning of 2004, Global
Teldata's failures to follow the publicly available Worksheet
instructions for these calculations were willful because it made the
conscious decision that it did not have to file Quarterly Worksheets.
21. We reject Global Teldata's third argument, that the latitude for error
should be greater in the filing of a first Worksheet. Rather, the
filing of the first Worksheet is more critical because, like
registration, it first brings to the attention of the Commission and
USAC that a carrier's revenues are now required to be made part of the
Fund.
22. Fourth and finally, we will not reduce the forfeiture for Global
Teldata's claim that it has timely filed all current Worksheets since
its late registration. Post-investigation corrective measures are not
sufficient to avoid enforcement action.
23. Accordingly, throughout the one-year period preceding Global Teldata's
first Worksheet filing in November 2004, its repeated failures to
recognize its filing obligations weigh decisively against any
reduction to the forfeiture. Had Global Teldata been acting
responsibly, it would have realized that its revenues exceeded the de
minimis level, not in October 2004, but much earlier in February 2004.
Quarterly Worksheets are due on the first day of February, May,
August, and November of each year, and must project a carrier's
revenue for the following quarter. Because Global Teldata's revenues
exceeded the de minimis threshold in February 2004, its first
Quarterly Worksheet should have been filed in November 2003. Even if
Global Teldata did not in good faith anticipate in late 2003 that its
revenues would exceed the de minimis threshold in early 2004, by no
means should it have missed filing the first Quarterly Worksheet that
was due on May 1 after its revenues actually exceeded this threshold
in February 2004, let alone the second filing due August 1, 2004. As a
result, giving Global Teldata the benefit of the doubt, the filing due
November 1, 2004 was no less than the third deadline that the company
missed. The NAL only assessed a forfeiture for the filing due November
1, 2004 because that was the only one Global Teldata missed within the
one-year limitations period preceding the NAL. In sum, we reject
Global Teldata's four-part argument that the proposed forfeiture
should be reduced to $10,000 under the factors enumerated in section
503(b)(2)(D) of the Act.
2. Failure to Pay Three Monthly USF Contributions
24. Global Teldata also argues that the three base forfeiture amounts of
$20,000 for each of the three monthly failures to contribute to USF,
as well as the single upward adjustment thereto of $26,772, should be
reduced to $10,000 for each month without any upward adjustment. While
admitting it failed to pay, it states that the total proposed
forfeiture of $86,774 "overstates the gravity of the violations" for
the same reasons as the proposed forfeiture for failure to file the
first Worksheet. According to Global Teldata, a company new to the
system can be late simply because of the adjustment from de minimis to
covered status. Finally, it states that the late payments were not an
attempt to avoid its obligations and that it later paid all sums due
before issuance of the NAL.
25. We reject these arguments for the reasons discussed above. A carrier's
correct and timely payments of initial contributions to the USF are a
natural extension of its correct and timely registration and
submission of initial Worksheets. Like its first reporting
obligations, its first payments resulting from the transition from de
minimis to covered status are all the more important because they
first bring the carrier fully into the system. As a long-time
participant in the telecommunications industry, Global Teldata should
have attended to its regulatory obligations beginning in 2003 by
carefully tracking the growth of its interstate telecommunications
revenues, examining line items on its own billing statements, and
reviewing publicly available instructions for the correct methodology.
Moreover, this is not just a question of whether Global Teldata was
deliberately attempting to avoid its obligations, but rather whether
it conscientiously performed its important affirmative duties. Given
the vital regulatory objectives at issue, we believe that a forfeiture
composed of the base forfeiture amount for the three missed payments
in the one-year period preceding the NAL, plus one-half the total
unpaid USF contributions constitutes a fair measure of Global
Teldata's violations. Finally, as discussed above, post-investigation
payments are not sufficient to avoid enforcement action.
3. The Total Forfeiture Relative to Interstate Revenues Is Not Excessive
or Unjust
26. Finally, Global Teldata claims that the total proposed forfeiture of
$236,000 is 27 percent of its interstate and international
telecommunications revenues in 2004 and is therefore excessive and
unjust. We find no merit in this unsupported, blanket assertion. The
NAL recounts at length the vital policy considerations that underlie
the calculation of the proposed forfeiture, and we have revisited some
of those concerns in this Order. To the extent Global Teldata is
asserting a claim of inability to pay under Commission precedent, we
note that the Commission has considered a carrier's gross revenue from
all sources, not just interstate telecommunications revenues, as the
best indicator of its ability to pay. The proposed forfeiture of
$236,774 is less than three per cent of Global Teldata's total
revenues for 2004. The Commission has previously found forfeitures of
up to nearly eight per cent of a company's revenue acceptable. As a
result, Global Teldata's contention that the total proposed forfeiture
is excessive and unjust must be rejected.
IV. CONCLUSION
27. Global Teldata withheld payments to a Congressionally-mandated
telecommunications program, thereby denying that program of essential
funding for an extended period of time. In light of the seriousness,
duration and scope of the violations, we find that the total
forfeiture of $236,774 proposed in the NAL is warranted. As discussed
above, this forfeiture amount includes: (1) a total penalty of
$100,000 for failing to register with the Commission; (2) a total
penalty of $50,000 for failing to file one Worksheet within the year
preceding issuance of the NAL; and (3) a total penalty of $86,774 for
failing to make three monthly universal service contributions within
the year preceding issuance of the NAL.
V. ORDERING CLAUSES
28. Accordingly, IT IS ORDERED THAT, pursuant to section 503(b) of the
Communications Act of 1934, as amended, 47 U.S.C. S 503(b), and section
1.80 of the Commission's rules, 47 C.F.R. S 1.80, that Global Teldata II,
LLC SHALL FORFEIT to the United States government the sum of $236,774 for
willfully and repeatedly violating the Act and the Commission's rules.
29. Payment of the forfeiture shall be made in the manner provided for in
section 1.80 of the Commission's rules within 30 days of the release of
this Order. If the forfeiture is not paid within the period specified, the
case may be referred to the Department of Justice for collection pursuant
to Section 504(a) of the Act. Payment of the forfeiture must be made by
check or similar instrument, payable to the order of the Federal
Communications Commission. The payment must include the NAL/Acct. No. and
FRN No. referenced above. Payment by check or money order may be mailed to
Federal Communications Commission, P.O. Box 358340, Pittsburgh, PA
15251-8340. Payment by overnight mail may be sent to Mellon Bank /LB
358340, 500 Ross Street, Room 1540670, Pittsburgh, PA 15251. Payment by
wire transfer may be made to ABA Number 043000261, receiving bank Mellon
Bank, and account number 9116229. Requests for full payment under an
installment plan should be sent to: Associate Managing Director -
Financial Operations, 445 12th St, SW, Room 1A625, Washington, D.C. 20554.
30. IT IS FURTHER ORDERED that copies of this ORDER OF FORFEITURE shall be
sent by certified mail, return receipt requested, to David G. Crocker,
Early, Lennon, Crocker & Bartosiewicz, 900 Commercial Building, Kalamazoo,
Michigan 49007-8844.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
See Global Teldata II, LLC, Notice of Apparent Liability for Forfeiture
and Order, 20 FCC Rcd 17264 (2005) ("Global Teldata NAL" or "NAL").
47 C.F.R. S 64.1195.
Id. at S 54.711(a).
47 U.S.C. S 254(d); 47 C.F.R. S 54.706(a).
See Letter from Darius B. Withers, Counsel to Global Teldata II, LLC, to
Gerald H. Chakerian, Attorney, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, dated November 17,
2004 ("November 17, 2004 LOI Response") at 1. Global Teldata II, LLC was
formed in a corporate reorganization, effective April 1, 2003, of a
predecessor entity which also had never registered with the Commission.
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."); 47
C.F.R. S 54.706(a); 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 C.F.R. S 64.1195.
Implementation of the Subscriber Carrier Selection Provisions of the
Telecommunications Act of 1996, Third Report & Order and Second Order on
Reconsideration, 15 FCC Rcd 15996, 16024, P 159 (2000).
47 C.F.R. S 54.711. Pursuant to the de minimis exception, contributors
that owe less than $10,000 to the USF in any given year are not required
to contribute to the fund or file Worksheets (annual or quarterly) for
that year for purposes of the USF. 47 C.F.R. S 54.708. (See note 11,
infra, on quarterly reporting.) Based on Global Teldata's reported
revenue for 2003 as reported in its 2004 Form 499-A, it was a de minimis
carrier in 2003. Even though the de minimis exception excuses carriers
from the requirements for USF purposes, however, the rules still require
carriers such as Global Teldata to file annual Worksheets for purposes of
other regulatory programs, such as the Telecommunications Relay Service
("TRS"). See 47 C.F.R. S 64.604(c)(5)(iii)(B) (requiring common carriers
to submit Worksheets for the TRS Fund); see Wireline Competition Bureau
Reminds De Minimis Telecommunications Providers of Certain FCC
Registration, Reporting, and Contribution Requirements, Public Notice, WC
Docket No. 06-122 (WCB rel. Jan. 31, 2007).
See FCC Form 499-A Telecommunications Reporting Worksheet - Annual
Filing, http://www.fcc.gov/Forms/Form499-A/499a-2003.pdf (April 2003)
("Annual Worksheet").
See Federal-State Joint Board on Universal Service, Petition for
Reconsideration filed by AT&T, Report and Order and Order on
Reconsideration, 16 FCC Rcd 5748 (2001) ("Quarterly Reporting Order").
The first Quarterly Worksheet, reporting revenue data from the first
quarter of 2001 (January 1 through March 31, 2001) was due May 11, 2001;
thereafter, carriers report their revenues for the prior quarter by the
beginning of the second month in each quarter (i.e., February 1, May 1,
August 1, and November 1). See Quarterly Reporting Order, 16 FCC Rcd at
5755, P 19 & n.32. See FCC Form 499-Q Telecommunications Reporting
Worksheet - Quarterly Filing for Universal Service Contributors,
http://www.fcc.gov/Forms/Form499-Q/499q.pdf (April 2003) ("Quarterly
Worksheet").
See 47 C.F.R. S 54.709(a); "Telecommunications Carrier Registration
Information Now Available Online," Public Notice, DA 01-2465 (rel. Oct.
29, 2001). The Commission modified its rules on carrier contributions to
the universal service fund. See Federal-State Joint Board on Universal
Service, 1998 Biennial Regulatory Review - Streamlined Contributor
Reporting Requirements Associated with Administration of
Telecommunications Relay Services, 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, Report and Order and Second Further Notice of Proposed
Rulemaking, 17 FCC Rcd 24952 (2002) ("Interim Contribution Order"). As of
April 1, 2003, USAC bases a carrier's universal service obligation on the
carrier's projected collected revenue rather than its historic
gross-billed revenue. Interim Contribution Order, 17 FCC Rcd at 24969-74,
PP 29-39.
See 47 U.S.C. S 254(d). See note 6, supra.
See 47 C.F.R. S 54.706(a).
See Letter from Hugh Boyle, Chief Auditor, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, to Global
Teldata II, LLC, dated March 30, 2004 ("March 30, 2004 Audit Letter").
See E-mail from Erin R. Swansiger, Counsel to Global Teldata II, LLC, to
Hugh Boyle, Chief Auditor, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, dated May 25, 2004.
See note 8, supra, regarding the de minimis exception for filing if a
carrier's USF contribution in any given year is less than $10,000.
See Letter from Hillary S. DeNigro, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, Federal Communications Commission,
to Erin R. Swansiger, Counsel to Global Teldata II, LLC, dated October 28,
2004 ("October 28, 2004 LOI").
November 17, 2004 LOI Response (Inquiry Nos. 7-11).
See id. (Inquiry Nos. 7-8) and Exhibits E & F. These responses indicated
that cumulative telecommunications revenue from January to October 2004
was $204,016.
See id. (Inquiry No. 14) and Exhibit G. Global Teldata does not state
whether it was specifically aware of these charges and revenues.
See id. (Inquiry Nos. 7-8) and Exhibits E & F. The Form 499-A was
apparently intended to serve both as a late-filed registration that had
been due since the beginning of business on April 1, 2003, and as a
late-filed annual 2004 Form 499-A Worksheet for 2003 that had been due
since April 1, 2004.
Letter from Hillary S. DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, to Darius
B. Withers, Counsel to Global Teldata II, LLC, dated August 17, 2005.
See Letter from Darius B. Withers, Counsel to Global Teldata II, LLC, to
Gerald H. Chakerian, Attorney, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, dated August 29,
2005 ("August 29, 2005 LOI Response"). See note 14, supra, regarding its
previously reported revenues.
See August 29, 2005 LOI Response at 1 and Exhibit A. Global Teldata's
first quarterly Worksheet that was late-filed on November 17, 2004
contained this same error. The subscriber line charge (also called end
user common line charge) is a fixed, non-usage sensitive access charge to
the end user for the dedicated line from the last local exchange carrier
central office to the end user's premises. See sections 69.104 and 69.152
of the Commission's rules, 47 C.F.R. SS 69.104, 69.152.
47 U.S.C. S 254.
47 C.F.R. SS 54.706(a), 54.711(a), 64.1195.
Global Teldata NAL, 20 FCC Rcd at 17270, PP 14-15.
Id. at PP 22-28.
Response of Global Teldata II, LLC, filed November 29, 2005 ("NAL
Response").
Id. at 3-4. See 47 U.S.C. S 503(b)(1)(B). See also 47 C.F.R. S 1.80(c)(3).
NAL Response at 4.
Id.
47 U.S.C. S 503(b)(1)(B); see also 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 and Order, 6 FCC Rcd 4387, 4388, P 5 (1991) ("Southern
California Broadcasting Co.").
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359 (2001)
(issuing a Notice of Apparent Liability for, inter alia, a cable
television operator's repeated signal leakage) ("Callais Cablevision,
Inc.").
Callais Cablevision, Inc., 16 FCC Rcd at 1362, P 9; Southern California
Broadcasting Co., 6 FCC Rcd at 4388, P 5.
See A-O Broadcasting Corporation, Forfeiture Order, 18 FCC Rcd 27069,
27072, P 12 & n. 16 (2003); recon. denied., 20 FCC Rcd 756 (2005) ("A-O
Broadcasting") (radio broadcaster committed continuing violations for
failure to install certain equipment and to maintain a main studio for
five weeks).
47 U.S.C. S 503(b); 47 C.F.R. S 1.80(f).
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
7591, P 4 (2002) (forfeiture paid).
47 U.S.C. S 503(b)(2)(B).
47 U.S.C. S 503(b)(2)(D); see also Forfeiture Policy Statement, 12 FCC Rcd
at 17100, P 27; 47 C.F.R. S 1.80(b).
Global Teldata NAL, 20 FCC Rcd at 17270-73, PP 14-22.
NAL Response at 3 (citing 20 FCC Rcd at 17269, P 13). Section 503(b)(6)
of the Act states: "No forfeiture penalty shall be determined or imposed
against any person under this section if ... the violation charged
occurred more than 1 year prior to the date of issuance of the required
notice or notice of apparent liability." 47 U.S.C. S 503(b)(6)(B).
NAL Response at 3. As indicated above, section 312(f)(2) of the Act
states: "The term `repeated', when used with reference to the commission
or omission of an act, means the commission or omission of such act more
than once or, if such commission or omission is continuous, for more than
one day."
Id.
H.R. Rep. No. 97-765, 97^th Cong. 2d Sess. 51 (1982). Midwest
Radio-Television, Inc., Memorandum Opinion and Order, 45 F.C.C. 1137
(1983), rev'd on other grounds, United States v. Midwest Radio-Television,
Inc., 249 F. Supp 936 (D. Minn. 1966), concerned a radio licensee's
failure to announce paid sponsorship of certain broadcast material, in
violation of section 317(a) of the Act, 47 U.S.C. S 317(a). The Commission
imposed two forfeitures for two broadcasts of the same material within 36
minutes of each other, i.e., on the same day. In commenting on the general
meaning of the then-existing version of "repeated violation" in section
503(b), the Commission stated that this provision allows "a separate
forfeiture for each day during which repeated violations occur or an
uninterrupted continuing violation continues." Id., 45 F.C.C. at 1142, P
17. See also Southern California Broadcasting Co., 6 FCC Rcd at 4388, P 8
(discussing the parallel application of the definition of "willful"
violations).
47 U.S.C. S 503(b)(2)(B) (emphasis added). Moreover, prior Commission
decisions have recognized that both definitions in section 312(f) apply to
section 503(b) in a parallel manner, making explicit references to the
legislative history noted above. See, e.g., A-O Broadcasting Corporation,
note 34, supra. Similarly, these cases affirm that an on-going failure to
comply with regulatory requirements may constitute a "continuing" and,
therefore, "repeated" violation for purposes of section 503. For example,
in Western Wireless, the Commission issued an NAL against a cellular
carrier for willful and continuing rule violations by failing to obtain
authorization regarding the environmental impact of its antenna structure
for five years, beginning from the time of construction and continuing
through the date of the decision. Western Wireless Corporation, Notice of
Apparent Liability for Forfeiture, 18 FCC Rcd 10319, 10325-26, PP 15,
19-20 & nn. 55-56 ("Western Wireless"); modified on other grounds, 20 FCC
Rcd 1245 (2004). Moreover, in a context specifically analogous to Global
Teldata's limitations argument here, the Commission stated in Western
Wireless that "this violation has continued into the one-year limitations
period for a forfeiture." Id., 18 FCC Rcd at 10325, P 15 (emphasis added).
See paragraph 13, supra, regarding section 503(b)(2)(D).
Response to NAL at 4.
Id., see also paragraph 8, supra.
Response to NAL at 4. In this context, Global Teldata incorrectly states
that the penalty for late-filing the first required worksheet should not
be increased simply because it is the first filing. In fact, the proposed
forfeiture of $50,000 is the base forfeiture amount, and there was no
upward adjustment.
Id.
See Communication Services Integrated, Inc., Notice of Apparent Liability
for Forfeiture, 20 FCC Rcd 17251, 17257, P 16 ("CSII"); AT&T Wireless
Services, Inc., Forfeiture Order, 17 FCC Rcd 21866, 21870-71, PP 13-14
(2002); America's Tele-Network Corp., Order of Forfeiture, 16 FCC Rcd
22350, 22355, P 15 (2001).
Response to NAL at 5.
Id.
See, e.g., Globcom, Inc., Notice of Apparent Liability for Forfeiture and
Order, 18 FCC Rcd 19893, 19904, P 27 (2003); Inphonic, Inc., Notice of
Apparent Liability for Forfeiture and Order, 20 FCC Rcd 13277, 13287 P 29
(2005); CSII, 20 FCC Rcd at 17261, P 27 (2005).
Id. Global Teldata has correctly calculated this percentage because it
reflects Exhibit A of the August 29, 2005 LOI Response, showing that the
true amount of Global Teldata's interstate telecommunications revenue from
end users for the entire year 2004 was $868,542.
See Global Teldata NAL, 20 FCC Rcd at 17265-67,17271-75, PP 4-8, 17-19,
21, 24-28.
See e.g., PJB Communications of Virginia, Memorandum Opinion and Order, 7
FCC Rcd 2088, 2088-89, PP 8-9 (1992).
See the August 29, 2005 LOI Response at Exhibit A.
See Local Long Distance, Inc., 15 FCC Rcd at 24389, P 11.
47 U.S.C S 504(a).
See 47 U.S.C S 1.1914.
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Federal Communications Commission FCC 07-59