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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
File No. EB-04-IH-0274
In the Matter of )
NAL/Acct. No. 200532080137
Carrera Communications, LP )
FRN No. 0010-7507-43
)
)
ORDER OF FORFEITURE
Adopted: April 25, 2007 Released: May 16, 2007
By the Commission:
I. INTRODUCTION
1. In this Order of Forfeiture, we assess a monetary forfeiture of
$345,900 against Carrera Communications, LP ("Carrera") for willful
and repeated violations of the Communications Act of 1934, as amended
(the "Act"), and our rules. For the reasons set forth below, we find
that Carrera willfully and repeatedly violated the Act and Commission
rules by failing to contribute to the Universal Service Fund ("USF")
and the Telecommunications Relay Services ("TRS") Fund and failing to
pay its regulatory fees. In addition, we find that Carrera also
willfully and repeatedly violated Commission rules requiring it to
submit Telecommunications Reporting Worksheets ("Worksheets") and
predecessor forms. Finally, we find that Carrera willfully and
repeatedly failed to respond to Commission orders.
2. Carrera'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. Finally, Carrera's failure to respond to Commission orders
to provide information threatens to compromise our ability to
adequately and efficiently investigate violations of the Act and our
rules. We will use our forfeiture authority to penalize and deter
violations such as those committed by Carrera.
II. BACKGROUND
3. The facts and circumstances surrounding this case are set forth in
more detail in the Carrera NAL and need not be reiterated here at
length. Carrera is a Texas-based telecommunications carrier that has
been providing telecommunications services since 1999. Despite
multiple Commission inquiries into its compliance with our rules and
the Act, and with the exception of a few isolated acts of
post-investigative compliance, Carrera continues a pattern of
egregious non-compliance in failing to submit the required periodic
financial information, to make required payments to the subject
programs, and to respond to Commission orders.
4. The Universal Service Administrative Company ("USAC") administers the
universal service support mechanisms and performs billing and
collection functions. The National Exchange Carrier Association
("NECA") administers the TRS fund. 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 TRS
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. The revenue information
provided on the Annual Worksheet also determines a carrier's
contributions to the TRS fund. A carrier's failure to file Worksheets
or its submission of inaccurate or untruthful information "may subject
the contributor to the enforcement provisions of the Act and any other
applicable law."
5. USAC bills carriers each month based on their quarterly contribution
amount. NECA bills carriers annually. The Commission's rules do not,
however, condition payment on receipt of an invoice or other notice
from USAC or NECA. A carrier that does not file an Annual or Quarterly
Worksheet may fail to receive an invoice from USAC or NECA, but is
nonetheless required to contribute to the USF, unless its revenues are
considered de minimis, and to the TRS fund regardless. The
instructions for the Annual and Quarterly Worksheets include tables
for carriers to calculate annual contributions.
6. In 2004, the Enforcement Bureau ("Bureau") sought to identify
resellers of telecommunications services that failed to register as
telecommunications service providers with the Commission and, thus,
may also have failed to satisfy various Commission program
requirements. On March 30, 2004, the Bureau's audit staff sent a
letter to Carrera requesting information pertaining to Carrera's
compliance with section 64.1195 of the Commission's rules. On May 4,
2004, Carrera registered and belatedly filed certain financial
information that had been due April 1, 2004. After determining that
Carrera apparently failed to timely register with the Commission or
timely file required Worksheets, the Bureau issued a letter of inquiry
("LOI") to Carrera on July 29, 2004. Carrera did not respond within
the time required. After Bureau staff telephoned Carrera regarding its
failure to respond, it provided only an incomplete response to the
LOI. The Bureau issued two additional letters to Carrera, directing it
to provide complete responses to the original LOI and warning that
"[f]ailure to respond fully to the Bureau's LOI can by itself subject
Carrera to potential enforcement action." Carrera failed to respond in
any manner to the last two LOIs or to telephone and voicemail messages
left by Bureau staff. During this same period, Carrera continued to
fail to make any universal service contributions, paid its 2003
regulatory fees and TRS Fund contribution late and only after repeated
collection efforts, failed to file the quarterly Worksheets due May
1, August 1, and November 1, 2004, and February 1 and May 1, 2005, and
failed to file the annual 499-A Worksheet due April 1, 2005.
7. 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 for violations occurring 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."
8. The Commission issued the Carrera NAL on July 25, 2005, proposing a
forfeiture of $606,500 for the apparent willful and repeated failures
listed above. The Commission also ordered Carrera to file all annual
Worksheets required since it began providing telecommunications
services and to submit a report setting forth in detail its plan to
come into compliance with the relevant payment and reporting rules.
9. On November 14, 2005, Carrera submitted its response to the Carrera
NAL. Therein, Carrera admits the substantive allegations of the
Carrera NAL, but argues that its repeated and long-standing violations
of the law were not intentional and should not be considered willful
and repeated or egregious. Carrera does not address its failure to
comply with our July 25, 2005 order to file a compliance report and
overdue Worksheets or its failure to file the Worksheets or pay the
contributions or regulatory fees due since the Carrera NAL. Carrera
further argues that the forfeiture should be cancelled or reduced from
the $606,500 proposed in the Carrera NAL to $20,000 based on its
assertions of financial hardship. Carrera submitted certain financial
information with its response. Since the Carrera NAL was issued to
date, Carrera has not filed any required Worksheets, paid any of the
USF or TRS Fund contributions or regulatory fees due or owing, or
filed any of its outstanding reporting forms.
III. DISCUSSION
10. Under section 503(b)(1) 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 willfully or repeatedly violated the Act or a Commission
order or rule.
11. We find by a preponderance of the evidence, as discussed in detail in
the Carrera NAL and herein, that Carrera has violated section 254(d)
of the Act and sections 54.711(a), 64.604(c)(5)(iii), 54.706(a),
1.1154, and 1.1157(b)(1) of the Commission's rules. Specifically, we
find based on a preponderance of the evidence that Carrera: (1)
willfully and repeatedly failed to file Worksheets and predecessor
forms; (2) willfully and repeatedly failed to make requisite
contributions toward the Universal Service and TRS Funds; (3)
willfully and repeatedly failed to pay regulatory fees to the
Commission; and (4) willfully and repeatedly failed to respond to
Commission communications and comply with associated orders.
12. In the Carrera NAL, we proposed a forfeiture of $606,500 for Carrera's
apparent willful and repeated violations of section 254(d) of the Act
and sections 54.711(a), 64.604(c)(5)(iii), 54.706(a), 1.1154, and
1.1157(b)(1) of the Commission's rules. As explained below, with one
exception, we reject Carrera's various arguments to eliminate or
reduce the forfeiture. We credit in part Carrera's argument that,
pursuant to Commission precedent, it would be unable to pay the
proposed forfeiture in full based on its gross revenues and thus
reduce the proposed forfeiture for the willful and repeated violations
of the Act and our rules to $345,900.
A. Carrera's Violations were Willful and Repeated
13. Carrera admits to the violations detailed in the Carrera NAL. Despite
these failures, Carrera contends the Commission should cancel or
reduce the forfeiture amount because its violations were inadvertent
and unintentional and thus should not be considered willful and
repeated or egregious. In support, Carrera claims that a general
partner initially "investigated all the various regulatory
requirements associated with the industry [the partnership was]
entering" and that, for its first two years of operation, it "used the
FCC's `De Minimis Worksheet' [contained in the instructions to the
Annual Worksheet and its predecessor forms] to determine its
regulatory responsibilities," concluding that it "did not have to
worry about FCC regulatory requirements for a while because [its]
interstate telecommunications receipts were so low." Carrera states
that by 2001, when Carrera's revenues "no longer qualified as de
minimis," it failed to comply with relevant requirements because that
one partner had become distracted from compliance duties by personal
difficulties. Carrera argues that thus its non-compliance was
unintentional and the forfeiture should be rescinded or cancelled.
This argument fails for two reasons.
14. First, the Commission may assess and has assessed forfeitures 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. In this case, we found -- and Carrera does not dispute
-- that it repeatedly failed to make its universal service and TRS
fund contributions and make regulatory fee payments, repeatedly failed
to file required Worksheets, and repeatedly failed to respond to
Commission orders. Therefore, the Commission is well within the
authority granted by section 503(b) in assessing a forfeiture against
Carrera.
15. Second, Carrera's actions were willful in addition to being repeated.
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. Thus, Carrera's position that its failures were
unintentional because its management was distracted and did not
reconsider in certain years whether it might, at that time, owe money
to federal telecommunications programs is irrelevant to a
determination of its willfulness. Its violation was willful under the
definition in the Act because it made a conscious decision not to file
forms or to pay into the funds.
16. Finally, we note that Carrera's claims of inadvertence are contrary to
the facts. For example, Carrera asserts it determined it was de
minimis for purposes of USF contributions in 1999 and 2000. It further
contends that it thus was diligent with respect to all its federal
regulatory obligations until 2001 when one of its partners had
personal difficulties and was rendered unable to perform competently
Carrera's compliance responsibilities. Carrera's failures to comply
with federal regulatory obligations, however, were not limited to USF
contributions and in some instances pre-date the purported
difficulties of its management. For example, despite its obligation to
do so, Carrera did not file forms for or pay TRS Fund contributions
and regulatory fees from at least April 2000. These significant
failures belie Carrera's claim of historic compliance with its
regulatory obligations.
B. Carrera's Ability to Pay the Forfeiture Amount
17. We find in accord with our precedent regarding ability to pay
forfeitures that Carrera has established its average gross revenues
indicate it would be unable to pay the proposed forfeiture amount in
full and therefore we reduce the forfeiture from the proposed amount
of $606,500 to $345,900. Carrera, however, contends that the
forfeiture should be cancelled or further reduced to $20,000 because
it, and one of its partners, would be unable to pay even an amount
reduced in accord with precedent. We find that Carrera did not produce
nor does the record contain evidence to support this contention and
decline to reduce the forfeiture below $345,900 in this case, as the
revised forfeiture amount falls squarely within the range that
Commission precedent has deemed not excessive.
18. The Commission has repeatedly held that a company's gross revenues are
the best indicator of its ability to pay a forfeiture amount. The
Commission "looks to companies' gross revenues as reasonable and
appropriate yardsticks to determine their ability to pay assessed
forfeitures." In this instance, we looked to Carrera's average gross
revenues and followed our precedent by reducing the proposed
forfeiture amount proportionally. Carrera argues that only one of its
general partners is liable for Carrera's debts and that partner is
unable to pay the forfeiture amount or even an amount reduced in
accord with our precedent. We reject these arguments because Carrera
has not substantiated the claims. The summary financial information
that Carrera produced lacks the detail we repeatedly have found
necessary to evaluate the ability to pay of an entity beyond its gross
revenues. Further, Carrera did not provide personal tax returns or
other financial information for any of its general partners. The
Commission may not find that an entity or individual does not have the
ability to pay a forfeiture based on mere assertions or speculation.
IV. CONCLUSION
19. We find that Carrera violated multiple Commission rules pertaining to
its universal service obligations for years, failed to file Worksheets and
predecessor forms, and withheld payments to Congressionally-mandated
telecommunications programs, thereby denying these programs of funds due
and owing for an extended period of time and totaling many thousands of
dollars in withheld contributions. In light of the seriousness, duration
and scope of Carrera's violations, we conclude that the forfeiture
proposed in the Carrera NAL and revised as set forth above to $345,900 is
warranted.
V. ORDERING CLAUSES
20. Accordingly, IT IS ORDERED THAT, pursuant to sections 4(i), 4(j), and
303(r) of the Act, 47 U.S.C. SS 154(i), 154(j), and 303(r), and section
1.3 of the Commission's rules, 47 C.F.R. S 1.3, Carrera's Petition for
Waiver is GRANTED.
21. IT IS FURTHER ORDERED THAT, pursuant to section 503(b) of the Act, 47
U.S.C. S 503(b), and section 1.80 of the Commission's rules, 47 C.F.R. S
1.80, Carrera IS LIABLE FOR A MONETARY FORFEITURE in the amount of
$345,900 for willfully and repeatedly violating the Act and Commission's
rules.
22. 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 911-6106. Requests for full payment under an
installment plan should be sent to: Associate Managing Director --
Financial Operations, Room 1A625, 445 12^th Street, S.W., Washington, D.C.
20554.
23. IT IS FURTHER ORDERED that a copy of this FOREITURE ORDER shall be
sent by certified mail, return receipt requested, to Jonathan S.
Marashlian, Esq., the Helein Law Group, P.C., 8180 Greensboro Drive, Suite
700, McLean, Virginia 22120.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
47 U.S.C. S 254; 47 C.F.R. SS 1.1154, 1.1157(b)(1), 54.706(a),
64.604(c)(5)(iii)(A).
47 C.F.R. S 54.711, 64.604.
See 47 U.S.C. S 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).
See Statement in Response to Notice of Apparent Liability for Forfeiture,
and to the Extent Required, Request for Waiver, submitted by Jonathan S.
Marashlian, the Helein Law Group, PC, Attorney for Carrera Communications
("Response"), at 1.
Since July 25, 2005, the date on which the Commission issued the Carrera
NAL, Carrera has failed to file the three Worksheets due, failed to make
any of its required federal telecommunications program payments.
See Changes to the Board of Directors of the National Exchange Carrier
Association, Inc., Report and Order and Second Order on Reconsideration,
12 FCC Rcd 18400, 18415, P 25 (1997) ("NECA Changes Order"); 47 C.F.R.
S\00154.702(b).
47 C.F.R. S 54.711.
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.
47 C.F.R. S 54.713. See also NECA Changes Order, 12 FCC Rcd at 18442, P 80
& n.165 (citing 47 U.S.C. SS 206-209, 312, 403, 503).
See, e.g., Federal-State Joint Board on Universal Service, Sixteenth Order
on Reconsideration in CC Docket No. 96-45, Eighth Report and Order in CC
Docket No. 96-45, and Sixth Report and Order in CC Docket No. 96-262, 15
FCC Rcd 1679, 1687, P 18 (1999); Federal-State Board on Universal Service,
Further Notice of Proposed Rulemaking and Order, 15 FCC Rcd 19947, 19954,
P 17 (2000); Interim Contribution Order, 17 FCC Rcd at 24971-72, P 35;
Changes to the Board of Directors of the National Exchange Carrier
Association, Inc., Federal-State Board on Universal Service, Second Order
on Reconsideration in CC Docket No. 97-21, 12 FCC Rcd 22423, 22425, P 3
(1997). Carriers must pay by the date shown on the invoice from the
Administrator. 47 C.F.R. S 54.711(a) ("The Commission shall announce by
Public Notice published in the Federal Register and on its website the
manner of payment and the dates by which payments must be made.") See,
e.g., "Proposed Third Quarter 2003 Contribution Factor," Public Notice, 18
FCC Rcd 11442 (Wireline Comp. Bur. 2003) ("Contribution payments are due
on the date shown on the administrator invoice.")
See 47 C.F.R. SS 54.706(b); 64.604 (c)(5)(iii)(A).
See "2002 FCC Form 499-A, Telecommunications Reporting Worksheet" at
Instructions--page 1 "Instructions for Completing the Worksheet for Filing
Contributions to Telecommunications Relay Service, Universal Service,
Number Administration, and Local Number Portability Support Mechanisms,"
http://www.fcc.gov/Forms/Form499-A/499a-2002.pdf ("2002 Telecommunications
Reporting Worksheet Instructions").
See 47 C.F.R. S 64.1195(a).
See letter from Hugh Boyle, Chief Auditor, Investigations and Hearings
Division, Enforcement Bureau, to Carrera dated March 30, 2004 ("March 30
Audit Letter").
See electronic mail response to the March 30 Audit Letter from Carrera
dated May 7, 2004.
Letter from Hillary S. DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, to Joann P. Bennett, Carrera, dated July 29,
2004.
Letter from Joann P. Bennett, General Partner, Carrera, to Hillary S.
DeNigro, Deputy Chief, Investigations and Hearings Division, Enforcement
Bureau, dated September 10, 2004, with facsimile transmission date of
September 13, 2004 ("Carrera Response"). Carrera did not respond fully to
LOI Inquiry Numbers 8, 9, 10, and 12 regarding various regulatory program
payments. In addition, the affidavit Carrera supplied to support its
response did not contain a statement that it was made under penalty of
perjury, as specifically required in the LOI. Moreover, in response to LOI
Inquiry Number 5, Carrera did not provide a specific response setting
forth the required revenue information.
Letters from Hillary S. DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, to Joann P. Bennett, Carrera, dated November
5, 2004 and January 21, 2005. Carrera's receipt of the letters was
confirmed by return of the mail receipts to the Bureau and confirmations
of the facsimile transmissions.
47 U.S.C. S 503(b)(2)(B); see also 47 C.F.R. S 1.80(b)(2). The Commission
recently amended its rules to increase the maximum penalties to account
for inflation since the last adjustment of the penalty rates. See
Amendment of Section 1.80(b) of the Commission's Rules and Adjustment of
Forfeiture Maxima to Reflect Inflation, Order, 19 FCC Rcd 10945 (2004).
47 U.S.C. S 503(b)(2)(D); see The Commission's Forfeiture Policy Statement
and Amendment of Section 1.80 of the Commission's Rules, Report and Order,
12 FCC Rcd 17087, 17100, P 27 (1997), recon. denied, 15 FCC Rcd 303
(1999); 47 C.F.R. S 1.80(b).
At the same time, Carrera petitioned the Commission for a waiver of rule
1.80(f)(3), pursuant to which the Carrera NAL required the company to file
its NAL response 30 days from the date of the Carrera NAL. Carrera notes
that the Commission may waive its rules for good cause and to serve the
public interest. Carrera argues that a limited waiver to extend the
procedural deadline for Carrera's NAL response in recognition of severe
adverse personal circumstances of a Carrera partner and to consider the
merits of this matter would serve the public interest. Considering
hardship, equity and effective implementation of overall policy, we hereby
grant Carrera's request and accept its NAL response. See, e.g., Wait Radio
v. FCC, 418 F.2d 1153 (D.C. Cir. 1969); Northeast Cellular Telephone
Company, L.P., et al, v. FCC, 897 F.2d 1164 (D.C. Cir. 1990).
47 U.S.C. S 503(b)(1)(B); 47 C.F.R. S 1.80(a)(1); see also 47 U.S.C. S
503(b)(1)(D) (forfeitures for violation of 14 U.S.C. S 1464).
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, 1362, P 10
(2001) ("Callais Cablevision") (issuing a Notice of Apparent Liability
for, inter alia, a cable television operator's repeated signal leakage).
Southern California Broadcasting Co., 6 FCC Rcd at 4388, P 5; Callais
Cablevision, Inc., 16 FCC Rcd at 1362, P 9.
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").
47 U.S.C. S 254(d); 47 C.F.R. SS 54.711(a), 64.604(c)(5)(iii), 54.706(a),
1.1154, 1.1157(b)(1).
Carrera NAL, 20 FCC Rcd at 13317-20, PP 23-31.
Response at 7.
Id. at 7; Declaration at 2. We note however, that carriers are obligated
to register and file annual Worksheets even if they are de minimis for
purposes of USF contribution. See, e.g., 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)
To the extent that Carrera is suggesting that the forfeiture should be
reduced because of a record of compliance prior to 2001, we reject that
argument based on the facts discussed below.
See, e.g., Callais Cablevision, 16 FCC Rcd 1359 (issuing a Notice of
Apparent Liability for, inter alia, a cable television operator's repeated
signal leakage).
Southern California Broadcasting, 6 FCC Rcd at 4388, P 5; Callais
Cablevision, 16 FCC Rcd at 1362, P 9.
Carrera NAL, 20 FCC Rcd at 13313-17, PP 14-22.
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., Southern California Broadcasting Co., 6 FCC Rcd at 4388.
See, e.g., Eure Family Limited Partnership, Memorandum Opinion and Order,
17 FCC Rcd 21861 (2002) (rejecting licensee's argument that tower lighting
violation was not "willful" when licensee had no knowledge that antenna
light had gone out; "It is irrelevant whether Eure knew about the light
outage on its tower....").
Response at 3 ("By 2001, the year in which the Commission ... approved FCC
Form 499 to govern compliance with various federal funding programs, [one
partner] was completely distracted [by personal circumstances] from
running the business and paying proper attention to regulatory compliance
matters."). The Commission created FCC Form 499 and consolidated the
filing requirements for various federal telecommunications programs in
1999, not in 2001. Cf., 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, Report and
Order, 14 FCC Rcd 16602 (1999), Implementation of the Subscriber Carrier
Selection Provisions of the Telecommunications Act of 1996, Third Report
and Order and Second Order on Reconsideration, 15 FCC Rcd 15996, 16024
(2000) ("Carrier Selection Order") (The 2001 approval cited by Carrera was
by the Office of Management and Budget and for purposes only of adding the
registration information collection requirement adopted in the Carrier
Selection Order to the already consolidated (and OMB-approved) FCC Form
499-A. See 66 Fed. Reg. 17083 (Mar. 29, 2001)); see also, e.g., Common
Carrier Bureau Announces Release of September Version of
Telecommunications Reporting Worksheet (FCC Form 499-S), Public Notice, 14
FCC Rcd 12171 (CCB July 30, 1999); Common Carrier Bureau Announces Release
of Telecommunications Reporting Worksheet (FCC Form 499-A) for April 1,
2000 Filing by all Telecommunications Carriers, Public Notice, 15 FCC Rcd
16434 (CCB Mar. 1, 2000).
See Carrera NAL, 20 FCC Rcd at 13314-16. In addition, we note the
financial documentation submitted by Carrera suggest that its revenues may
have been above the USF de minimis threshold for 2000 and thus it is
possible that Carrera should have been filing and contributing even for
USF purposes by September 2000. We cannot determine this fact with
specificity because Carrera, despite our order to do so, still has not
filed the outstanding reporting forms that would provide such information.
We note that the summary financial information that Carrera provided with
its NAL response shows dramatic increases from 1999 to 2000 in both
revenues and long distance resale purchases.
We note the personal difficulties of an individual partner cannot excuse a
carrier's violations of law and to the extent Carrera's submission raises
such an argument, we reject it.
As directed in the Carrera NAL and in accord with our prior precedent,
Carrera submitted its three most recent tax returns to establish its
average gross revenues and substantiate it claim of inability to pay.
See, e.g., Alpha Ambulance, Inc., Order, 19 FCC Rcd 2547, 2549 (2004);
see also PJB Communications of Virginia, Inc., Memorandum Opinion and
Order, 7 FCC Rcd 2088, 2089 (1992) (determining appropriateness of
forfeiture amount by proportionality to gross revenues); Local Long
Distance, Inc., Order on Reconsideration, 16 FCC Rcd 10023, 10025, PP 6-8
(2001) (same); Hoosier Broadcasting Company, Memorandum Opinion and Order,
15 FCC Rcd 8640, 8641, P 7 (Enf. Bur. 2002) (same),
See Commission's Forfeiture Policy Statement and Amendment of Section 1.80
of the Rules to Incorporate the Forfeiture Guidelines, Report and Order,
12 FCC Rcd 17087, 17106-07, P 43 (1997), recon. denied 15 FCC Rcd 303
(1999); see also cases at n. 48 supra.
Alpha Ambulance, Inc., 19 FCC Rcd at 2549.
For example, the financial information Carrera submitted indicates that in
2004, the first year of our investigation, millions of dollars of capital
were contributed to Carrera and ultimately used to make distributions to
partners and for unidentified service contract payments. Carrera's
submission did not provide any detail about these capital contributions,
distributions, or payments. See, e.g., WebNet Communications, Inc., Order
of Forfeiture, 18 FCC Rcd 6870, 6878, P 16 (2003) ("WebNet") (addressing
need for complete and detailed financial statements in evaluating such
claims); Applications of San Luis Obispo Limited Partnership, Memorandum
Opinion and Order and Forfeiture Order, 11 FCC Rcd 9616, 9620 PP 14-15
(1996) (same), recon. denied, 13 FCC Rcd 1020, 1024, P 14 (1998); Black &
Gold Radio Company, Inc. Licensee of Station WLCS(FM) North Muskegon,
Michigan, Forfeiture Order, 10 FCC Rcd 8719, PP 3-4 (1995) (same);
Application of Ellwood Beach Broadcasting, Ltd., Memorandum Opinion and
Order, 8 FCC Rcd 453, 454, P 9 (1993) ("Ellwood Beach Broadcasting")
(same).
See, e.g., A-O Broadcasting Corporation, Forfeiture Order, 18 FCC Rcd
27069, 27076-77, P 24 (2003), recon. denied, Memorandum Opinion and Order,
20 FCC Rcd 756, 760-62 (2005); Liability of Danville Television
Partnership, Memorandum Opinion and Order and Forfeiture Order, 15 FCC Rcd
10628, 10630, P 6 (MMB 2000). Carrera also did not document its unusual
claim that only one general partner would be liable for Carrera's debts.
See, e.g., WebNet, 18 FCC Rcd at 6878, P 16; Ellwood Beach Broadcasting, 8
FCC Rcd at 454, P 9. In its response, Carrera made various statements that
the company would be unable to pay even a reduced forfeiture, only one
partner would be liable for Carrera's debts and that partner would be
unable to pay such a forfeiture, but did not provide the evidence that
would support these claims. See, e.g., Response at 2, 10.
47 U.S.C. S 504(a).
See 47 C.F.R. S 1.1914.
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Federal Communications Commission FCC 07-73
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Federal Communications Commission FCC 07-73