Click here for Adobe Acrobat version
Click here for Microsoft Word version

******************************************************** 
                      NOTICE
********************************************************

This document was converted from Microsoft Word.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.

*****************************************************************



                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                         )                               
                                                                         
                                         )                               
                                                                         
     In the Matter of                    )   File No. EB-06-IH-2307      
                                                                         
     Communications Options, Inc.        )   NAL/Acct. No. 200732080031  
                                                                         
     Apparent Liability for Forfeiture   )   FRN 0003735230              
                                                                         
                                         )                               
                                                                         
                                         )                               


                              ORDER OF FORFEITURE

   Adopted: March 13, 2008 Released: March 13, 2008

   By the Chief, Enforcement Bureau:

   I. INTRODUCTION

    1. In this Order of Forfeiture ("Order"), we assess a monetary forfeiture
       of $65,000 against Communications Options, Inc. ("COI"). We find that
       COI willfully and repeatedly violated section 54.711(a) of the Federal
       Communications Commission's (the "Commission" or "FCC") rules by
       failing to maintain records and documentation to justify information
       reported in its Telecommunications Reporting Worksheets ("Worksheets")
       and provide the records and documentation to the Commission upon
       request. Further, we find that COI willfully and repeatedly violated a
       Commission order issued pursuant to sections 4(i), 4(j), 218 and 403
       of the Communications Act of 1934, as amended (the "Act"), by failing
       to respond on a timely basis to a directive of the Enforcement Bureau
       ("Bureau") to provide certain information and documents, and support
       its response with an affidavit or declaration.

   II. BACKGROUND

    2. The facts and circumstances of this case are set forth in the Notice
       of Apparent Liability for Forfeiture and Order ("NAL") previously
       issued by the Commission, and need not be repeated at length here. COI
       is a telecommunications carrier that began providing
       telecommunications service in the United States in November, 1990. The
       Universal Service Administrative Company ("USAC"), the administrator
       of the universal service fund ("USF"), received information in March
       2005 alleging that COI was not reporting revenues collected from
       Presubscribed Interexchange Carrier Charges ("PICC") or End User
       Common Line ("EUCL") charges. Pursuant to a referral from USAC, on
       July 13, 2006, the Bureau issued a letter of inquiry ("LOI") to COI.
       The LOI directed COI to, among other things, submit a sworn, written
       response to a series of questions relating to COI's compliance with
       its filing and payment obligations involving regulatory fees, the USF,
       the Telecommunications Relay Services ("TRS") Fund, and the North
       American Numbering Plan Administration ("NANPA") Fund. COI's response
       was due on August 2, 2006. COI failed to respond by that date, and
       when Bureau staff contacted COI to inquire about the status of COI's
       response, COI stated that it "overlooked" the deadline and requested
       an extension until August 31, 2006. On August 28, 2006, the Bureau
       informed COI that failure to respond fully and timely to a Bureau
       letter of inquiry constitutes a violation of the Act and Commission
       rules. COI submitted a response to the LOI on August 31, 2006.
       Contrary to the Bureau's directive, COI's LOI Response was not
       supported with an affidavit or declaration under penalty of perjury,
       signed and dated by an authorized officer of COI with personal
       knowledge of the representations provided in COI's response, verifying
       the truth and accuracy of the information submitted and to the
       production of all requested information and documents in COI's
       possession, custody, control or knowledge.

    3. On July 27, 2007, the Bureau issued the NAL in the amount of $65,000
       against COI for apparently failing to maintain records and
       documentation to justify information reported in COI's Worksheets and
       provide the records and documentation to the Commission upon request;
       and to respond on a timely basis to a directive of the Bureau to
       provide certain information and documents, and support its response
       with an appropriate affidavit or declaration. The NAL ordered COI,
       within 30 days, i.e., by August 27, 2007, to pay the proposed
       forfeiture or respond to the NAL, submitting evidence and arguments in
       response to the NAL to show that no forfeiture should be imposed or
       that some lesser amount should be assessed. To date, COI has not paid
       the forfeiture amount or submitted a formal response to the NAL.

   III. DISCUSSION

    4. We find by a preponderance of the evidence that COI has willfully and
       repeatedly failed to maintain records and documentation to justify
       information reported in COI's Worksheets and provide the records and
       documentation to the Commission upon request; and to respond on a
       timely basis to a directive of the Bureau to provide certain
       information and documents, and support its response with the required
       affidavit or declaration.

    5. Under section 503(b)(1)(B) of the Act, any person who is determined by
       the Commission to have willfully or repeatedly failed to comply with
       any provision of the Act or any rule, regulation, or order issued by
       the Commission shall be liable to the United States for a forfeiture
       penalty. Section 312(f)(1) of the Act defines willful as "the
       conscious and deliberate commission or omission of [any] act,
       irrespective of any intent to violate" the law. The legislative
       history to section 312(f)(1) of the Act clarifies that this definition
       of willful applies to both sections 312 and 503(b) of the Act, and the
       Commission has so interpreted the term in the section 503(b) context.
       The Commission may also assess a forfeiture for violations that are
       merely repeated, and not willful. "Repeated" means that the act was
       committed or omitted more than once, or lasts more than one day. To
       impose such a forfeiture penalty, the Commission must issue a notice
       of apparent liability and the person against whom the notice has been
       issued must have an opportunity to show, in writing, why no such
       forfeiture penalty should be imposed. The Commission will then issue a
       forfeiture if it finds by a preponderance of the evidence that the
       person has violated the Act or a Commission order or rule.

    6. 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 $1,325,000 for a
       single act or failure to act. In determining the appropriate
       forfeiture amount, we consider the factors enumerated in section
       503(b)(2)(E) 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."

    7. We find by a preponderance of the evidence that COI has willfully and
       repeatedly failed to maintain records and documentation to justify
       information reported in COI's Worksheets and provide the records and
       documentation to the Commission upon request. The Commission's
       Forfeiture Policy Statement and implementing rules prescribe a base
       forfeiture of $1,000 for failure to maintain required records. We
       find, however, that failing to maintain records and documentation
       supporting the Telecommunications Reporting Worksheets warrants a
       substantial increase to the base forfeiture amount in light of the
       important public policy aspects of the underlying rule. As the
       Commission has observed in another USF enforcement action, "the size
       and scope of the universal service and [other federal regulatory]
       programs impose a monumental burden on the Commission [and] USAC . . .
       to verify that each and every carrier has complied with the revenue
       reporting requirements. By necessity, the Commission and the other
       entities must rely on carriers' compliance with our rules." To assist
       the Commission and USAC in this endeavor, the document retention rule
       was adopted to ensure the accuracy of a Worksheet could be
       established, particularly in a case where information suggests the USF
       contributor is not fully reporting revenue. Thus, we find the failure
       to maintain documents supporting a Worksheet as directed by the
       Commission analogous to the filing of inaccurate information in that
       the provider prevents accurate administration of the program and
       enforcement of Commission rules. The Commission has previously
       concluded a $50,000 forfeiture is appropriate for the filing of an
       inaccurate Worksheet. We conclude that the same amount also is
       appropriate for the failure to maintain supporting documents and
       provide them to the Commission. Taking into account all of the factors
       enumerated in section 503(b)(2)(D) of the Act, we assess a forfeiture
       of $50,000 against COI for failing to maintain records and
       documentation supporting COI's Worksheets.

    8. We also find by a preponderance of the evidence that COI has willfully
       and repeatedly failed to respond on a timely basis to a directive of
       the Bureau to provide certain information and documents, and support
       its response with the required affidavit or declaration. Section 1.80
       of the Commission's rules and the Commission's Forfeiture Policy
       Statement establish a base forfeiture amount of $3,000 for failure to
       file required forms or information, and $4,000 for failure to respond
       to a Commission communication. COI's failure to respond to the
       Bureau's inquiries for approximately one month occurred following
       COI's promise that its LOI response would be timely submitted.
       However, when Bureau staff contacted COI after the deadline to inquire
       about a response, COI informed Bureau staff that COI had "overlooked"
       its obligation to respond. When COI finally did submit a response it
       lacked the required supporting affidavit or declaration required by
       the Commission.

    9. We find that the substantial delay in responding to the LOI, and the
       failure to fully comply with the Bureau's directives, in the
       circumstances presented here, warrants a substantial increase to the
       base amount. Misconduct of this type exhibits a blatant disregard for
       the Commission's authority that cannot be tolerated, and, more
       importantly, threatens to compromise the Commission's ability to
       adequately investigate violations of its rules. In this case, the
       misconduct inhibits our ability to adequately detect and deter
       potential rule violations in areas of critical importance to the
       Commission, i.e., the reporting and contribution requirements for the
       Commission's regulatory programs. Prompt, sworn responses to Bureau
       inquiry letters are critical to the Commission's enforcement function.
       We therefore impose a forfeiture against COI of $15,000 for failing to
       provide a sworn response to the LOI on a timely basis. This forfeiture
       amount is consistent with recent precedent in similar investigations
       involving the failures of companies to respond to Bureau inquiries
       concerning compliance with the reporting and contribution requirements
       for the Commission's regulatory programs, despite evidence that the
       LOIs had been received. COI and other carriers are warned that they
       may not delay or resist the Bureau's direction to provide information
       in response to an LOI. Such conduct obstructs the enforcement process
       and will not be tolerated.

   10. In conclusion, we find that a total forfeiture in the amount of
       $65,000 is warranted. The total forfeiture amount includes: (1) a
       penalty of $50,000 for failing to maintain records and documentation
       to justify information reported in COI's Worksheets and provide the
       records and documentation to the Commission upon request; and (2) a
       penalty of $15,000 for failing to respond on a timely basis to a
       directive of the Bureau to provide certain information and documents,
       and support its response with the required affidavit or declaration.
       We again caution that additional violations of the Act or the
       Commission's rules could subject COI to further enforcement action.
       Such action could take the form of higher monetary forfeitures and/or
       possible revocation of COI's operating authority, including
       disqualification of COI's principals from the provision of any
       interstate common carrier services without the prior consent of the
       Commission.

   IV. ORDERING CLAUSES

   11. Accordingly, IT IS ORDERED THAT, pursuant to section 503(b) of the
       Communications Act of 1934, as amended, and sections 0.111, 0.311, and
       1.80 of the Commission's rules, that Communications Options, Inc.
       SHALL FORFEIT to the United States government the sum of $65,000 for
       willfully and repeatedly violating the Commission's rules and a
       Commission order issued pursuant to the Act.

   12. 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/Account Number and FRN Number referenced
       above. 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 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 (call sign/other ID), and enter the letters "FORF" in
       block number 24A (payment type code). Requests for full payment under
       an installment plan should be sent to:  Chief Financial Officer --
       Financial Operations, 445 12th Street, S.W., Room 1-A625, Washington,
       D.C.  20554.   Please contact the Financial Operations Group Help Desk
       at 1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions
       regarding payment procedures.

   13. IT IS FURTHER ORDERED that a copy of this Order will be sent by
       certified mail/return receipt requested to Lewis H. Goldman, Esq., 45
       Dudley Court, Bethesda, Maryland 20814.

   FEDERAL COMMUNICATIONS COMMISSION

   Kris Anne Monteith

   Chief

   Enforcement Bureau

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

   47 U.S.C. S:S: 154(i), 154(j), 218, 403. The Telecommunications Act of
   1996 amended the Communications Act of 1934, see Telecommunications Act of
   1996, Pub. L. No. 104-104, 110 Stat. 56 (1996).

   See Communications Options, Inc., Notice of Apparent Liability for
   Forfeiture, 22 FCC Rcd 13680 (Enf. Bur. 2007) ("COI NAL" or "NAL").

   See Letter from P.J. Moody, Controller, Communication Options, Inc. to
   David Janas, Special Counsel, Investigations and Hearings Division,
   Enforcement Bureau, Federal Communications Commission, Response 4 (Aug.
   30, 2006) ("LOI Response").

   Letter from Wayne M. Scott, Vice President, Internal Audit Division,
   Universal Service Administrative Company to Hillary DeNigro, Deputy Chief,
   Investigations and Hearings Division, Enforcement Bureau, Federal
   Communications Commission, at 1 (Nov. 15, 2005) ("USAC Referral"). If an
   interstate telecommunications provider fails to report PICC and EUCL
   revenue on its Worksheet, the provider may significantly underreport
   interstate telecommunications revenue, thereby preventing USAC from
   invoicing a full assessment of the provider's fair share of universal
   service contributions.

   See USAC Referral, supra note 5.

   Letter of Inquiry from Trent Harkrader, Acting Deputy Chief,
   Investigations and Hearings Division, Enforcement Bureau, Federal
   Communications Commission to Stephen K. Vogelmeier, President,
   Communication Options, Inc. (July 13, 2006) ("LOI").

   Telephone conversation between P.J. Moody, Controller, Communication
   Options, Inc. and David Janas, Special Counsel, Investigations and
   Hearings Division, Enforcement Bureau, Federal Communications Commission,
   dated August 23, 2006.

   Letter from Trent Harkrader, Acting Deputy Chief, Investigations and
   Hearings Division, Enforcement Bureau, Federal Communications Commission
   to P.J. Moody, Controller, Communication Options, Inc. (Aug. 28, 2006).

   See LOI Response, supra note 4.

   LOI at 9 (directing COI to comply with 47 C.F.R. S: 1.16).

   COI NAL, supra note 3.

   Id. at P: 24.

   47 U.S.C. S: 503(b)(1)(B).

   47 U.S.C. S: 312(f)(1).

   H.R. Rep. No. 97-765, 97th 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.").

   Id. at 1362, P: 9; Southern California Broadcasting Co., 6 FCC Rcd at
   4388, P: 5.

   47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).

   See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
   7591, P: 4 (2002) (forfeiture paid).

   47 U.S.C. S: 503(b)(2)(B); see also 47 C.F.R. S: 1.80(b)(2); Amendment of
   Section 1.80(b) of the Commission's Rules, Adjustment of Forfeiture Maxima
   to Reflect Inflation, Order, 19 FCC Rcd 10945 (2004).

   47 U.S.C. S: 503(b)(2)(E).

   See Commission's Forfeiture Policy Statement and Amendment of Section 1.80
   of the Commission's Rules, Report and Order, 12 FCC Rcd 17087, 17114,
   Appendix A (1997) ("Forfeiture Policy Statement"), recon. denied, 15 FCC
   Rcd 303 (1999); 47 C.F.R. S: 1.80(b).

   See Globcom, Inc., Order of Forfeiture, 21 FCC Rcd 4710 (2006) ("Globcom
   Forfeiture Order"); Globcom, Inc., Notice of Apparent Liability for
   Forfeiture and Order, 18 FCC Rcd 19893 (2003) ("Globcom NAL").

   Globcom NAL, 18 FCC Rcd at 19904, P: 30.

   See Matter of Federal-State Board on Universal Service, Report and Order
   and Second Further Notice of Proposed Rulemaking, 17 FCC Rcd 24952, 25791,
   P: 34 (2002).

   Globcom Forfeiture Order, 21 FCC Rcd at 4721-24, P:P: 29-38; Globcom NAL,
   18 FCC Rcd at 19904-05, P:P: 30-32.

   47 C.F.R. S: 1.80; Forfeiture Policy Statement, 12 FCC Rcd at 17114.

   See Electronic Mail Message from P.J. Moody, Controller, Communication
   Options, Inc., to Eric Bash, Assistant Division Chief, and David Janas,
   Special Counsel, Investigations & Hearings Division, Enforcement Bureau,
   Federal Communications Commission (July 19, 2006, 12:35 p.m.) ("July 19,
   2006 COI E-Mail").

   See LOI at 9 (directing COI to comply with 47 C.F.R. S: 1.16).

   See International Telecom Exchange, Inc., Notice of Apparent Liability for
   Forfeiture and Order, 21 FCC Rcd 6232, 6240, P: 26 (Enf. Bur. 2006)
   (proposing $28,062 forfeiture for apparent failure to respond on a timely
   basis to a directive of the Enforcement Bureau to provide certain
   information and documents, and for apparent failure to contribute to the
   Telecommunications Relay Service Fund); BigZoo.com Corp., Order of
   Forfeiture, 20 FCC Rcd 3954, 3956, P: 7 (Enf. Bur. 2005) (imposing $20,000
   forfeiture for failure to respond on a timely basis to a directive of the
   Enforcement Bureau to provide certain information and documents);
   QuickLink Telecom, Inc., Order of Forfeiture, 20 FCC Rcd 14464, 14466, P:
   10 (Enf. Bur. 2005) (same). See also SBC Communications, Inc., Forfeiture
   Order, 17 FCC Rcd 7589, 7599, P: 29 (2000) (imposing a $100,000 forfeiture
   for failure to provide a sworn statement attesting to the truth and
   accuracy of the company's LOI response). We note that in the SBC case, a
   major factor behind the $100,000 forfeiture amount was the company's
   ability to pay. See SBC Communications, Inc., Notice of Apparent Liability
   for Forfeiture, 16 FCC Rcd 19370, 19373, P: 11 (Enf. Bur. 2001)
   (subsequent history omitted). We do not consider that factor here.

   See Business Options, Inc., Order to Show Cause and Notice of Opportunity
   for Hearing, 18 FCC Rcd 6881, 6894, P: 36 (2003) (subsequent history
   omitted); NOS Communications, Inc., Order to Show Cause and Notice of
   Opportunity for Hearing, 18 FCC Rcd 6952, 6965, P: 27 (2003) (subsequent
   history omitted).

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

   47 C.F.R. S:S: 0.111, 0.311, 1.80.

   See 47 C.F.R. S: 1.1914.

   (Continued from previous page)

   (continued ...)

   Federal Communications Commission DA 08-548

   1

   5

                                  Federal Communications Commission DA 08-548