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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
) File No. EB-07-IH-5364
In the Matter of
) NAL/Acct. No. 200832080012
U.S. Wireless Data, Inc.
) FRN No. 0016385478
)
)
ORDER
Adopted: March 4, 2008 Released: March 6, 2008
By the Chief, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau ("Bureau") of the Federal
Communications Commission (the "Commission") and U.S. Wireless Data,
Inc. ("USWDI"). The Consent Decree terminates an investigation
initiated by the Enforcement Bureau against USWDI for possible
violations of Section 214 of the Communications Act of 1934, as
amended ("the Act"), relating to extension of lines, and sections
63.03, 63.04, 63.18 and 63.24 of the Commission's rules relating to
transfer of control.
2. The Bureau and USWDI have negotiated the terms of a Consent Decree
that resolves this matter. A copy of the Consent Decree is attached
hereto and incorporated by reference.
3. Based on the record before us, and in the absence of material new
evidence relating to this matter, we conclude that there are no
substantial or material questions of fact as to whether USWDI
possesses the basic qualifications, including those related to
character, to hold or obtain any Commission license or authorization.
4. After reviewing the terms of the Consent Decree, we find that the
public interest will be served by adopting the Consent Decree.
5. Accordingly, IT IS ORDERED that, pursuant to section 4(i) of the
Communications Act of 1934, as amended, the Consent Decree attached to
this Order IS ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, DC 20554
)
)
) File No. EB-07-IH-5364
In the Matter of
) NAL/Acct. No. 200832080012
U.S. Wireless Data, Inc.
) FRN No. 0016385478
)
)
CONSENT DECREE
1. The Enforcement Bureau of the Federal Communications Commission (the
"Bureau") and U.S. Wireless Data, Inc. ("USWDI"), by their authorized
representatives, hereby enter into this Consent Decree for the purpose
of terminating the Bureau's investigation into USWDI's compliance with
section 214 of the Communications Act of 1934, as amended (the "Act"),
relating to extension of lines and sections 63.03, 63.04, 63.18 and
63.24 of the Commission's rules relating to transfer of control.
2. For the purposes of this Consent Decree, the following definitions
shall apply:
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C.
S: 151 et seq.
b. "Adopting Order" means an order of the Bureau adopting this Consent
Decree.
c. The "Bureau" means the Enforcement Bureau of the Federal
Communications Commission.
d. The "Commission" or "FCC" means the Federal Communications Commission
and all of its bureaus and offices.
e. "CTI" means Capital Telecommunications, Inc., a wholly-owned
subsidiary of StarVox.
f. "Effective Date" means the date on which the Commission releases the
Adopting Order.
g. "Investigation" means the investigation commenced by the Bureau's
September 11, 2007 Letter of Inquiry regarding whether USWDI violated
the requirements of section 214 of the Act and/or sections 63.03,
63.04, 63.18, and 63.24 of the Commission's rules relating to transfer
of control.
h. "Parties" means USWDI and the Bureau.
i. "Rules" means the Commission's regulations set forth in Title 47 of
the Code of Federal Regulations.
j. "StarVox" means StarVox Communications, Inc., a wholly-owned
subsidiary of USWDI.
k. "USWDI" means U.S. Wireless Data, Inc., and any
predecessor-in-interest, affiliate, parent company, wholly or
partially owned subsidiary, other affiliated company or business, or
its successors or assigns.
I. BACKGROUND
3. Section 214 of the Act requires telecommunications carriers to obtain
a certificate of public convenience and necessity from the Commission
before constructing, acquiring, operating or engaging in transmission
over lines of communications, or before discontinuing, reducing or
impairing service to a community. In accordance with section 63.03 of
the Commission's rules, any domestic carrier seeking to transfer
control of lines or authorization to operate pursuant to section 214
of the Act must obtain prior approval from the Commission. Similarly,
pursuant to section 63.24, a transfer of control of an international
section 214 authorization requires application to and prior approval
from the Commission. section 63.24(e) requires that the proposed
transferee apply to the Commission for approval prior to the
consummation of the proposed transfer of control. Sections 63.04 and
63.18 set forth the required contents of domestic and international
transfer of control applications. The Commission employs a public
interest standard under section 214(a) of the Act that involves the
examination of the public interest impact of a proposed transaction.
4. StarVox is a non-dominant telecommunications carrier holding section
214 authority to provide switched and dedicated intrastate,
interstate, and international long distance message toll
telecommunications services to business, enterprise, and carrier
customers on a retail and wholesale basis. StarVox was a
privately-held company prior to the transfer of control, with three
individuals or entities each holding a 10% or greater direct equity
and voting interest.
5. CTI is a non-dominant telecommunications carrier holding section 214
authority to provide domestic interstate and international
telecommunications services. CTI was a wholly-owned subsidiary of
StarVox prior to the transfer of control and remained a wholly-owned
subsidiary of StarVox after the transfer of control.
6. USWDI is a holding company that does not provide telecommunications
services except through StarVox and CTI. USWDI is a publicly-traded
company that had no operations, employees or assets prior to the
transfer of control.
7. On March 23, 2007, StarVox completed a reverse merger with USWDI (the
"merger"). Pursuant to the transaction, a wholly-owned subsidiary of
USWDI merged with and into StarVox, with StarVox surviving as a
wholly-owned subsidiary of USWDI. The merger diluted the ownership
interests of some individuals and entities that had previously held a
cognizable interest in StarVox. CTI remained a direct, wholly-owned
subsidiary of StarVox.
8. On May 23, 2007, USWDI and StarVox filed separate Joint International
and Domestic Applications for Consent to Transfer Control of StarVox
and CTI to USWDI.
9. On June 1, 2007, StarVox, CTI and USWDI requested special temporary
authority from the Commission that would allow StarVox and CTI to
provide service under the ownership of USWDI pending approval of their
applications for transfer of control.
10. On June 5, 2007, the Commission granted the request for Special
Temporary Authority.
11. On June 6, 2007, the Commission released a Public Notice accepting the
section 214 applications for streamlined processing under the
Commission's rules.
12. On September 11, 2007, the Bureau issued a letter of inquiry ("LOI")
directing USWDI, among other things, to submit a sworn written
response to a series of questions relating to the apparent
unauthorized transfer of control of StarVox and CTI to USWDI.
II. AGREEMENT
13. The Parties agree that the provisions of the Consent Decree shall be
subject to final approval by the Bureau through entry of the Adopting
Order which shall resolve and terminate the Investigation.
14. The Parties agree and acknowledge that this Consent Decree shall
constitute a final settlement between the Parties of the
Investigation. In express reliance on the covenants and
representations in this Consent Decree, the Bureau agrees to terminate
the Investigation without any finding of liability or violations on
the part of USWDI, StarVox or CTI. In consideration for the
termination of the Investigation and in accordance with the terms of
this Consent Decree, USWDI agrees to the terms, conditions, and
procedures contained herein.
15. USWDI acknowledges that the Commission has jurisdiction over the
matters contained in this Consent Decree and the authority to enter
into and adopt this Consent Decree.
16. The Parties agree that this Consent Decree does not constitute either
an adjudication on the merits or a factual or legal finding or
determination regarding any compliance or noncompliance with the
requirements of the Act or the Commission's rules and orders. The
Parties agree that this Consent Decree is for settlement purposes only
and that by agreeing to this Consent Decree, USWDI does not admit or
deny liability for violating any statute, regulation, or
administrative rule in connection with the matters that are the
subject of this Consent Decree.
17. USWDI agrees that it will make a voluntary contribution to the United
States Treasury in the amount of eleven thousand dollars (($11,000
US), to be paid within thirty (30) calendar days after the Effective
Date of the Adopting Order. The payment must be made by check or
similar instrument, payable to the order of the Federal Communications
Commission. The payment must include the NAL/Account Number and FRN
Number referenced in the caption to the Adopting Order. Payment by
check or money order may be mailed to Federal Communications
Commission, P.O. Box 979088, St. Louis, MO 63197-9000. Payment by
overnight mail may be sent to U.S. Bank - Government Lockbox #979088,
SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101. Payment[s] by
wire transfer may be made to ABA Number 021030004, receiving bank
TREAS/NYC, and account number 27000001. For payment by credit card, an
FCC Form 159 (Remittance Advice) must be submitted. When completing
the FCC Form 159, enter the NAL/Account number in block number 23A,
and enter the letters "FORF" in block number 24A (payment type code).
18. USWDI agrees that it will develop, within sixty (60) calendar days
from the Effective Date, an internal Compliance Plan to ensure USWDI's
future compliance with the Act, the Commission's rules, and the
Commission's orders governing telecommunications carriers' reporting
and contribution requirements for universal service and other
Commission programs. The Compliance Plan shall include the following
components:
a. Compliance Manual. USWDI shall create, maintain and update an FCC
Compliance Manual. USWDI personnel who engage in activities related to
FCC regulation of USWDI will have ready access to the Compliance
Manual and are to follow the procedures contained therein. The
Compliance Manual will, among other things, describe the rules and
requirements as they apply to USWDI regarding requirements governing
transfer of control of USWDI. The Compliance Manual will require
personnel to contact USWDI's Designated Contact with any questions or
concerns that arise with respect to USWDI's FCC compliance.
b. Compliance Training Program. USWDI will establish an FCC compliance
training program for any employee who engages in activities related to
FCC regulation of USWDI. Training sessions will be conducted at least
annually for such employees to ensure compliance with the Act and the
FCC's regulations and policies and, for new employees who are engaged
in such activities, within the first sixty (60) days of employment.
c. Designated Contact. USWDI will designate one employee as the point of
contact for all FCC compliance matters.
d. Review and Monitoring. USWDI management will review the FCC Compliance
Manual and FCC Compliance Training Program annually to ensure that
they are maintained in a proper manner and continue to address the
objectives set forth therein.
e. License Assignments and Transfers. The Compliance Manual and related
training will contain information for USWDI personnel regarding the
need to conduct thorough due diligence regarding potential FCC
licenses of any company in a potential merger or acquisition
transaction, the need to monitor any corporate reorganization for
potential license assignment or transfer issues and the need to obtain
prior FCC approval for all assignments and transfers of control of FCC
licenses.
f. Annual Report. Twelve months and twenty-four months after the
Effective Date, USWDI shall submit an affidavit or declaration under
penalty of perjury, signed and dated by an authorized officer of USWDI
with personal knowledge of the representations therein, verifying that
USWDI has complied with the terms of this Consent Decree. The
declaration shall be submitted to the Chief, Investigations and
Hearings Division, Enforcement Bureau, Federal Communications
Commission, 445 12th Street, S.W., Washington, D.C. 20554. The
declaration or affidavit must comply with section 1.16 of the
Commission's rules, 47 C.F.R. S: 1.16, and be substantially in the
form set forth therein.
g. Termination. USWDI's obligations under this Paragraph shall expire
twenty-four (24) months after the Effective Date.
19. The Bureau agrees that in the absence of new material evidence, it
will not use the facts developed in this Investigation through the
Effective Date, or the existence of this Consent Decree to institute,
on its own motion, any new proceeding, formal or informal, or take any
action on its own motion against USWDI concerning the matters that
were the subject of the Investigation. The Bureau also agrees that it
will not use the facts developed in this Investigation through the
Effective Date, or the existence of this Consent Decree, to institute
on its own motion any proceeding, formal or informal, or take any
action on its own motion against USWDI with respect to USWDI's basic
qualifications, including its character qualifications, to be a
Commission licensee or authorized common carrier.
20. Nothing in this Consent Decree shall prevent the Commission or its
delegated authority from adjudicating any formal or informal complaint
filed against USWDI pursuant to section 208 of the Act, 47 U.S.C. S:
208, and to take action in response to such formal complaint. If any
such complaint is made, the adjudication of that complaint will be
based solely on the record developed in that proceeding and the
Commission shall not use any facts developed through the Investigation
or the existence of this Consent Decree in any such proceeding. Except
as expressly provided in this Consent Decree, nothing herein shall
prevent the Commission or its delegated authority from investigating
new evidence of noncompliance by USWDI of the Act, the Commission's
rules, or this Consent Decree.
21. USWDI waives any and all rights it may have to seek administrative or
judicial reconsideration, review, appeal or stay or to otherwise
challenge or contest the validity of this Consent Decree and the
Adopting Order, provided the Adopting Order adopts this Consent Decree
without change, addition, deletion or modification. USWDI shall retain
the right to challenge Commission interpretation of the Consent Decree
or any terms contained herein.
22. USWDI's decision to enter into this Consent Decree is expressly
contingent upon the Bureau's issuance of the Adopting Order without
change, addition, deletion or modification.
23. In the event that this Consent Decree is rendered invalid by any court
of competent jurisdiction, it shall become null and void and may not
be used in any manner in any legal proceeding.
24. The Parties agree that if either Party (or the United States on behalf
of the Commission), brings a judicial action to enforce the terms of
the Adopting Order, neither USWDI nor the Commission shall contest the
validity of the Consent Decree or the Adopting Order, and USWDI will
waive any statutory right to a trial de novo regarding the terms or
validity of the Consent Decree. USWDI, however, may present evidence
that it has not violated the Consent Decree.
25. Upon release, the Adopting Order and this Consent Decree shall have
the same force and effect as any other order of the Commission. Any
violation of any term of this Consent Decree shall constitute a
separate violation of a Commission order entitling the Commission to
exercise any rights and remedies authorized by law attendant to the
enforcement of a Commission order.
26. The Parties also agree that if any provision of the Consent Decree
conflicts with any subsequent rule or order adopted by the Commission
(except an order specifically intended to revise the terms of this
Consent Decree to which USWDI does not expressly consent) that
provision will be superseded by such Commission rule or order.
27. The Parties acknowledge that USWDI neither waives nor alters its
rights to assert and seek protections from disclosure of any
privileged or otherwise confidential and protected documents and
information or to seek appropriate safeguards of confidentiality for
any competitively sensitive or proprietary information.
28. USWDI agrees to waive any claims it may otherwise have under the Equal
Access to Justice Act, 5 U.S.C. S: 504 and 47 C.F.R. S: 1.1501 et
seq., relating to the matters addressed in this Consent Decree.
29. USWDI and the Bureau each represents and warrants to the other that it
has full power and authority to enter into this Consent Decree.
30. This Consent Decree may be signed in counterparts.
________________________________
Kris Anne Monteith
Chief, Enforcement Bureau
Federal Communications Commission
________________________________
Date
________________________________
Chris McKee
General Counsel
U.S. Wireless Data, Inc.
________________________________
Date
47 U.S.C. S: 214.
47 C.F.R. S:S: 63.03, 63.04, 63.18 and 63.24.
47 U.S.C. S: 154(i).
47 U.S.C. S: 214.
47 C.F.R. S:S: 63.03, 63.04, 63.18 and 63.24.
See Letter from Trent B. Harkrader, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, FCC, to Thomas E. Rowley, CEO
and Director, U.S. Wireless Data, Inc., dated September 11, 2007
("September 11, 2007 LOI").
47 U.S.C. S: 214.
47 C.F.R. S:S: 63.03-04, 63.18, 63.24.
See 47 U.S.C. S: 214(a).
See Implementation of Further Streamlining Measures for Domestic
Section 214 Authorizations, Report and Order 17 FCC Rcd 5517, 5521, P:
5 (2002) ("2002 Streamlining Order"); 47 C.F.R. S:S: 63.03. See also
id. S: 63.03(d)(1) excluding all pro forma transactions, which do not
result in a change in the carrier's ultimate ownership or control,
from the domestic section 214 application and approval requirements);
id. S: 63.04(d)(2) (requiring that a post-transaction notice be filed
with the Commission within 30 days of a pro forma transfer of a
domestic section 214 authorization to a trustee, a
debtor-in-possession, or any other party pursuant to any applicable
chapter of the Bankruptcy Code).
47 C.F.R. S: 63.24(a).
See generally 47 C.F.R. S: 63.24(e); see also id. 47 C.F.R. S:
63.24(d) (excluding pro forma applications, or non-substantive
assignments and transfers of control that do not result in a change in
the actual controlling party or do not require prior Commission
approval). Section 63.24(g) of the Commission's rules also establishes
a narrow exception to this application requirement for specified
involuntary transfers involving bankruptcy, foreclosure action, legal
disability or death, for which only a post-transaction notification is
required. In a case involving involuntary assignment or transfer of
control to: a bankruptcy trustee appointed under involuntary
bankruptcy; an independent receiver appointed by a court of competent
jurisdiction in a foreclosure action; or, in the case of death or
legal disability, to a person or entity legally qualified to succeed
the deceased or disabled person under the laws of the place having
jurisdiction over the estate involved; the transferee must provide
post-transaction notice no later than 30 days after the event causing
the involuntary assignment or transfer of control. See 47 C.F.R. S:
63.24(g). But see id. 47 C.F.R. S: 63.03 (categorizing these types of
involuntary transactions as pro forma assignments or transfers of
control for domestic section 214 applications).
47 C.F.R. S:S: 63.04 and 63.18.
See 47 U.S.C. S: 214(a).
See September 11, 2007 LOI.
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