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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-05-IH-0913
In the Matter of
) NAL/Acct. No. 200632080168
Local Phone Services, Inc.
) FRN No. 0008358343
)
ORDER OF FORFEITURE
Adopted: May 15, 2008 Released: May 19, 2008
By the Commission:
I. INTRODUCTION
1. In this Order of Forfeiture, we impose a forfeiture of $436,765
against Local Phone Services, Inc., d/b/a Best Phone ("LPSI"). The
Order of Forfeiture follows a Notice of Apparent Liability for
Forfeiture issued on August 29, 2006. Herein we find that LPSI
willfully or repeatedly violated section 54.711(a) of the Commission's
rules by failing to timely submit certain Telecommunications Reporting
Worksheets. We also find that LPSI willfully or 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
timely contribute to the Universal Service Fund ("USF" or the "Fund").
2. LPSI's failure to pay Congressionally-mandated USF contributions
strikes at the core of the Commission's mission to promote access to
affordable, quality telecommunications services for all Americans. In
section 254 of the Act, Congress codified the historical commitment to
universal service for consumers in all regions of the nation. The
universal service programs are supported by contributions from
telecommunications carriers and certain other providers of
telecommunications. Entities subject to USF contribution requirements
must provide certain necessary information and contribute their
equitable share to support the federal universal service programs.
Failure to do so threatens the integrity and viability of this
Congressional mandate. The Commission cannot and will not tolerate any
entity's failure to contribute to the USF as required by our rules,
and we will use our forfeiture authority to penalize and deter
violations such as those at issue in this Order of Forfeiture.
II. BACKGROUND
A. Requirements To File Periodic Revenue Information And Contribute To
The USF
3. The Universal Service Administrative Company ("USAC") administers the
universal service support mechanisms and performs billing and
collection functions. The Commission requires telecommunications
providers, such as LPSI, to provide revenue information on FCC Form
499, the Telecommunications Reporting Worksheet ("Worksheet"), on a
periodic basis, and USAC uses that information to determine each
provider's universal service contribution obligations. A provider'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."
4. 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 telecommunications carriers such as LPSI, and interconnected
VoIP providers, to contribute to the USF. This obligation is generally
calculated as the product of a contribution factor and a contributor's
interstate and international telecommunications revenues. USAC bills
contributors each month based on their quarterly contribution amount.
Failure by some providers to pay their share into the Fund skews the
playing field by giving non-paying providers an economic advantage
over their competitors, who must then shoulder more than their fair
share of the costs of the Fund.
B. The Commission's Investigation
5. The facts and circumstances upon which the Order of Forfeiture is
based are set forth in the LPSI NAL, and need not be repeated here at
length. LPSI is a telecommunications carrier that began providing long
distance service in Kansas in 2002. LPSI provides both interstate and
international telecommunications service. Between July 5 and August
12, 2005, the Commission released six NALs for apparent failures by
telecommunications service providers to register, file Worksheets, and
make contributions to the USF, among other apparent violations. On
August 26, 2005, LPSI informed the Commission that although LPSI began
providing telecommunications service in 2002, it had "not paid
universal service or other federal regulatory fees or assessments
based on its revenues from interstate and international
telecommunications service." LPSI stated that it intended to take
immediate corrective measures, including filing outstanding Worksheets
no later than "early October 2005," and intended to "promptly" pay all
amounts properly invoiced by USAC and the Commission.
6. The Enforcement Bureau ("Bureau") initiated an investigation on
October 18, 2005 by a letter of inquiry ("LOI") regarding LPSI's
compliance with its filing and payment obligations involving federal
regulatory programs, including the universal service fund. LPSI
submitted its LOI response on December 7, 2005 and supplemental
response on December 23, 2005. In its responses, LPSI informed the
Commission it filed its November 1, 2005 Worksheet three weeks late on
November 23, 2005. On December 9, 2005, LPSI untimely filed with USAC
2004 and 2005 annual Worksheets, May 1 and August 1, 2005 quarterly
Worksheets, and a revised 2003 annual Worksheet. LPSI made its first
USF payment on May 26, 2006. On August 16, 2006, nearly an entire year
after it brought its failures to the Commission's attention, LPSI paid
outstanding USF contributions due through July 2006.
7. On August 29, 2006, the Commission released the LPSI NAL in which it
proposed a forfeiture of $529,000 against LPSI for its apparent
violations of section 54.711(a) of the Commission's rules by failing
to file Worksheets, and LPSI's apparent violations of section 254(d)
of the Act and section 54.706(a) of the Commission's rules by failing
to contribute to the USF. Specifically, the Commission proposed a
forfeiture of $50,000 for each of LPSI's four apparent failures to
timely submit Worksheets for a proposed forfeiture of $200,000. The
Commission also proposed a base forfeiture of $20,000 per month for
the 15 months in which LPSI failed to pay universal service
contributions, and added an upward adjustment of one-half of LPSI's
total unpaid universal service contributions ($29,000) to the base
forfeiture of $300,000, for a proposed forfeiture of $329,000.
8. LPSI filed its response to the NAL on September 27, 2006. LPSI does
not deny that it engaged in each of the violations described in the
NAL, or that it deliberately, intentionally, and repeatedly engaged in
the acts that constitute its violations. Yet, LPSI argues that the
forfeiture proposed in the NAL must be eliminated. First, LPSI argues
that its voluntary disclosure of its violations of the Act and
Commission rules was unrelated to other universal service enforcement
actions taken in the summer of 2005. Second, LPSI argues that it
disclosed to Bureau staff that it would fail to file its Worksheets by
October 2005. Third, LPSI argues that the forfeiture is excessive when
compared to the amount of USF contributions that it owed. Fourth, LPSI
argues that because it voluntarily disclosed its violations, the
Commission should rescind the NAL and a forfeiture in this instance
will serve to discourage companies from making voluntary disclosures.
Finally, LPSI states that it "is a small company and cannot afford the
services of an attorney to prepare and submit a full-fledged response
to the NAL."
9. In September 2007, based on late-filed Worksheets from LPSI, USAC
determined that LPSI was a de minimis carrier in 2006. USAC therefore
credited LPSI for amounts that USAC invoiced LPSI for 2006 USF
contributions. USAC further determined that through 2005, LPSI owed a
total of $73,529.26 in outstanding USF contributions.
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
forfeiture if it finds by a preponderance of the evidence that the
person has violated the Act or a Commission rule.
11. We find by a preponderance of the evidence that LPSI willfully or
repeatedly engaged in the violations described in the NAL. More
specifically, we find that LPSI willfully or repeatedly violated
section 54.711(a) of the Commission's rules by failing to file
Worksheets on multiple occasions. We also find that LPSI willfully or
repeatedly violated 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 multiple occasions. As explained below, we reject each of
LPSI's arguments that we should cancel or reduce the forfeiture. Based
on new information received from USAC in September 2007, however, we
reduce the imposed forfeiture to $436,765.
A. Voluntary Disclosure
12. We find that LPSI's voluntary disclosure does not require us to
rescind the proposed forfeiture. LPSI argues that the Commission
should rescind the proposed forfeiture given its voluntary disclosure
of its violations, and that a forfeiture in this instance would
discourage companies from voluntarily disclosing violations of the Act
and the Commission's rules. In establishing a forfeiture amount, the
Commission takes into consideration the existence of many factors, one
of which is whether the company in question has voluntarily disclosed
its violations. Voluntary disclosure by itself, however, is not enough
to prevent a forfeiture proceeding. When the company, as here, does
not diligently take action to correct its violations, the Commission
may decline to discount a forfeiture amount for the company's
voluntary disclosure.
13. As previously noted, LPSI notified the Commission of apparent
violations of the Act and Commission's rules on August 26, 2005. At
that time, LPSI stated that it intended to file its required
Worksheets no later than "early October 2005," and intended to
"promptly" pay all outstanding federal regulatory obligations. LPSI,
however, did not file its first quarterly Worksheet until late
November 2005, and filed other outstanding Worksheets in early
December 2005. Of greater concern, LPSI did not make a USF payment
until May 26, 2006, and did not pay outstanding USF contributions
until nearly a full year after its August 26, 2005 Disclosure Letter.
LPSI's lengthy delay in filing its outstanding Worksheets and making
required regulatory payments does not demonstrate diligent efforts to
cure its federal regulatory compliance failures. Under these
circumstances, we find that LPSI's voluntary disclosure does not merit
consideration as a mitigating factor. In so doing, we disagree with
LPSI's assertion that our refusal to discount the forfeiture because
of its voluntary disclosure discourages voluntary disclosure by other
companies. To the contrary, our decision is consistent with our rules
and encourages companies to voluntarily disclose violations and
promptly correct violations.
14. Our decision to impose a forfeiture here, despite LPSI's voluntary
disclosure, is unrelated to other universal service NALs issued before
LPSI's disclosure. In the LPSI NAL, the Commission noted that LPSI's
voluntary disclosure came two weeks after the Commission released a
series of USF enforcement items. Whether LPSI disclosed its violations
"because it believed that was the right thing to do," as it claims, or
because it became aware that the Commission was undertaking monitoring
and enforcement measures, is irrelevant, given that LPSI failed to
demonstrate it was committed to a good faith effort to comply promptly
with its filing and contribution obligations under the Commission's
regulatory programs.
15. We also note LPSI's communications with Commission staff to the effect
that the company would be unable to file the required Worksheets do
not require the Commission to rescind the proposed forfeiture. LPSI
claims that it apprised Commission staff that the company would
continue failing to file Worksheets beyond October 2005, and suggests
that this should excuse LPSI's failures to promptly remedy its federal
regulatory filing and payment obligations. Contrary to LPSI's
suggestion, a company's obligation to timely file Worksheets is not
relieved by informing Commission staff that the company will not
fulfill this important requirement.
B. LPSI Has Not Demonstrated An Inability To Pay
16. We next conclude that LPSI has failed to demonstrate it is unable to
pay the proposed forfeiture. In establishing a forfeiture amount, one
of the numerous factors that the Commission takes into consideration
is a company's ability to pay the forfeiture. LPSI states that it "is
a small company and cannot afford the services of an attorney to
prepare and submit a full-fledged response to the NAL."
17. Although LPSI did not explicitly seek rescission or reduction of the
forfeiture amount based on LPSI's ability to pay, we presume that was
its intention in making this statement, and conclude that LPSI has
failed to demonstrate an inability to pay the forfeiture. LPSI
provided no information demonstrating its inability to pay. In
analyzing economic-hardship claims, the Commission generally looks to
a violator's gross revenues from the three most recent tax years as a
reasonable and appropriate yardstick to determine its ability to pay
an assessed forfeiture. Undocumented statements of a regulatee's size
and financial condition do not meet the requirement of a
particularized showing of financial hardship or inability to pay. We
find that LPSI has failed to demonstrate an inability to pay the
forfeiture.
C. The Forfeiture Is Not Excessive
18. We also conclude that the forfeiture proposed in the NAL was not
excessive. LPSI states that "despite the fact that LPSI voluntarily
disclosed this matter and had paid all amounts invoiced by USAC, the
Commission has proposed to fine LPSI . . . a sum that dwarfs the
amount that LPSI is alleged to have owed." With regard to the
forfeiture proposed in the NAL, whether LPSI's payments were current
at the time the NAL was released is irrelevant. We proposed a
forfeiture amount based on LPSI's failures to timely file four
Worksheets and timely pay monthly USF contributions, repeated failures
that occurred over a substantial time period prior to the release of
the NAL.
19. In determining the appropriate forfeiture amount, we considered 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
require[d]." As set forth in the LPSI NAL, we have recounted at length
the vital policy considerations that underlie the forfeiture of LPSI's
failure to file its Worksheets and make USF contributions on a timely
basis. LPSI states the forfeiture is excessive given the amounts it
has owed. We rejected a similar argument raised in Global Teldata II,
where the company argued that the total proposed forfeiture was 27
percent of its telecommunications revenues in a particular year and
therefore excessive and unjust. Just as we found no merit in the
carrier's argument in Global Teldata II, we find no merit in LPSI's
unsupported, blanket assertion that the forfeiture proposed in the
LPSI NAL is excessive.
D. Adjustment of Total Forfeiture Amount Based on Late-Filed Revenue Data
Provided by LPSI to USAC
20. At the time the Commission released the NAL, LPSI's projected
collected revenue, as reported on LPSI's quarterly Worksheets, had
indicated that LPSI owed USF contributions in 2006. On May 31, 2007,
however, LPSI filed its 2007 annual Worksheet. Based on the historical
revenue reported in LPSI's 2007 annual Worksheet, USAC determined that
under section 54.708 of the Commission's rules, LPSI was a de minimis
carrier and therefore exempt from USF contributions in 2006. Thus,
USAC credited LPSI for the amounts that USAC invoiced LPSI for 2006
contributions.
21. When calculating the total proposed forfeiture in the NAL, we assessed
forfeitures of $20,000 per month for LPSI's failure to make monthly
USF contributions between March 2005 and May 2006. Because USAC has
determined, based on LPSI's late-filed 2007 annual Worksheet, that
LPSI was de minimis in 2006, we rescind the forfeitures assessed in
the NAL for LPSI's failure to make USF contributions between January
and May 2006. We only impose forfeitures for LPSI's failure to make
ten monthly contributions between March and December 2005. The
Commission has established a base forfeiture amount of $20,000 for
each month in which a carrier has failed to make required universal
service contributions. Consequently, we conclude that LPSI is liable
for a base forfeiture of $200,000 for its willful and repeated failure
to make universal service contributions for ten months. As discussed
below, however, that base amount is subject to an upward adjustment.
22. In the past, we have calculated upward adjustments to forfeitures for
failure to make USF payments based on one-half of the company's
approximate unpaid contributions. Based on LPSI's financial
information filed at the time we released the NAL, we estimated that
LPSI's outstanding USF contributions were approximately $58,000.
Taking into account all the factors enumerated in section 503(b)(2)(E)
of the Act, we therefore assessed an upward adjustment of $29,000 for
LPSI's apparent nonpayment violations. Based on LPSI's most recent
Worksheets, USAC has determined that as of December 2005, the last
month of LPSI's payment failures within the scope of this forfeiture
proceeding, LPSI owed $73,529.26 for USF contributions. Accordingly,
based on LPSI's late-filed revenue information submitted to USAC, and
again taking into account all the factors enumerated in section
503(b)(2)(E) of the Act, we modify our upward adjustment to $36,765,
and conclude that LPSI is liable for a total forfeiture of $236,765
for its apparent willful and repeated failure to make monthly
contributions into the USF.
E. Conclusion
23. In sum, based upon a preponderance of the evidence, we find that LPSI
failed to file four Worksheets in violation of section 54.711(a) of
the Commission's rules and failed to make ten monthly contributions to
the USF in violation of section 254(d) of the Act and section
54.706(a) of the Commission's rules. We therefore impose a total
forfeiture of $436,765, which includes forfeitures of (1) $200,000 for
LPSI's failure to timely file required Worksheets; and (2) $236,765
for LPSI's failure to make required USF contributions. As discussed
above, we find no reason to cancel the forfeiture based on LPSI's
response to the NAL. Based on LPSI's most recent Worksheets, and
USAC's assessment of the reported revenue in LPSI's Worksheets,
however, we conclude that the forfeiture imposed on LPSI should be
reduced to $436,765.
IV. ORDERING CLAUSES
24. Accordingly, IT IS ORDERED THAT, pursuant to section 503(b) of the
Communications Act of 1934, as amended, and section 1.80 of the
Commission's rules, Local Phone Services, Inc. IS LIABLE FOR A
MONETARY FORFEITURE in the amount of $436,765 for willfully or
repeatedly violating the Act and the Commission's rules.
25. Payment of the forfeiture shall be made in the manner provided for in
Section 1.80 of the 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/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[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 (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.
26. IT IS FURTHER ORDERED that copies of this ORDER OF FORFEITURE shall be
sent by certified mail, return receipt requested, to L.E. Hisken,
President, Local Phone Services, Inc., 815 N. West Street, Wichita, KS
67203-1216; and Judith A Riley, Regulatory Agent, Best Phones, 2912
Lakeside Drive, Oklahoma City, OK 73120.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
Local Phone Services, Inc., Notice of Apparent Liability for Forfeiture,
21 FCC Rcd 9974 (2006) ("LPSI NAL" or "NAL").
47 C.F.R. S: 54.711(a).
47 U.S.C. S: 254(d). 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).
47 C.F.R. S: 54.706(a).
47 C.F.R. S: 254(d); see Universal Service Contribution Methodology,
Report and Order and Notice of Proposed Rulemaking, 21 FCC Rcd 7518 (2006)
(extending section 254(d) permissive authority to require interconnected
VoIP providers to contribute to the USF) ("2006 Interim Contribution
Methodology Order"), petition for review denied, and vacated in part on
other grounds, Vonage Holding Corp. v. FCC, 489 F.3d 1232 (D.C. Cir.
2007). The universal service support mechanisms include the following
programs: (1) Lifeline/Link-Up, (2) High-Cost, (3) Schools and Libraries,
and (4) Rural Health Care. See generally 47 C.F.R. Part 54, subparts D-G;
http://www.fcc.gov/cgb/consumerfacts/universalservice.html.
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: 54.702(b).
47 C.F.R. S: 54.711. Contributors file revenue information on both an
annual and quarterly basis, using FCC Form 499-A (annual Worksheet) and
FCC Form 499-Q (quarterly Worksheet), respectively. Id. Contributors
project quarterly revenues on FCC Form 499-Q and report the previous
year's revenue on FCC Form 499-A.
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. S:S: 206-209, 312, 403, 503).
See 47 U.S.C. S: 254(d); 47 C.F.R. S: 54.706(a). See also supra note 5.
When a contributor's projected collected interstate end-user
telecommunications revenue is less than 12 percent of its combined
projected collected interstate and international end-user
telecommunications revenue, the contributor only pays the product of the
contribution factor and its projected collected interstate end-user
telecommunications revenues. 47 C.F.R. S: 54.706(c). If a contributor's
payment would be less than $10,000 in any given year, the contributor is
considered to be de minimis and not required to submit a contribution for
that year. See 47 C.F.R. S: 54.708.
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); 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, 24971-72, P: 35 (2002) ("Interim
Contribution Order"); Changes to the Board of Directors of the National
Exchange Carrier Association, Inc., Federal-State
(Continued...)
(Continued from previous page)
Board on Universal Service, Second Order on Reconsideration, 12 FCC Rcd
22423, 22425, P: 3 (1997). Contributors must pay by the date shown on the
invoice from the administrator. 47 C.F.R. S: 54.711(a); See, e.g.,
"Proposed Second Quarter 2008 Universal Service Contribution Factor,"
Public Notice, CC Docket No. 96-45, DA 08-576 (Office of Managing Dir.
rel. March 14, 2008) ("Contribution payments are due on the date shown on
the administrator invoice.").
See Letter from Bradford M. Berry, Esq., Wilmer Cutler Pickering Hale and
Dorr, LLP, to William Davenport, Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission (dated
August 26, 2005) at 1 ("Voluntary Disclosure Letter").
See Letter from Bradford M. Berry, Esq., Wilmer Cutler Pickering Hale and
Dorr, LLP, to Diana Lee, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission (dated December 23, 2005)
("Supplemental Response") at 1.
See Carrera Communications, LP, Notice of Apparent Liability for
Forfeiture and Order, 20 FCC Rcd 13307 (2005); InPhonic, Inc., Notice of
Apparent Liability for Forfeiture and Order, 20 FCC Rcd 13277 (2005);
Teletronics, Inc., Notice of Apparent Liability for Forfeiture and Order,
20 FC Rcd 13291 (2005); Telecom Mgmt., Inc., Notice of Apparent Liability
for Forfeiture, 20 FCC Rcd 14151 (2005); Telecom House, Inc., Notice of
Apparent Liability for Forfeiture and Order, 20 FCC Rcd 15131 (2005);
Communications Servs. Integrated, Inc., Notice of Apparent Liability for
Forfeiture and Order, 20 FCC Rcd 17251 (2005).
Voluntary Disclosure Letter at 1.
Id.
Letter of Inquiry from Hillary S. DeNigro, Deputy Chief, Investigations
and Hearings Division, Enforcement Bureau, Federal Communications
Commission, to Local Phone Services, Inc., c/o Bradford M. Berry, Esq.,
Wilmer Cutler Pickering Hale and Dorr, LLP (dated October 18, 2005)
("LOI").
See Letter from Bradford M. Berry, Esq., Wilmer Cutler Pickering Hale and
Dorr, LLP, to Diana Lee, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission (dated December 7, 2005) ("LOI
Response"); Supplemental Response, supra note 13.
See Letter from L.E. Hiskin, President, Local Phone Services, Inc. to
William H. Davenport, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission (dated September 27,
2006) at 2 ("NAL Response").
See supra note 1.
See supra note 19.
See supra note 14 (citing Commission enforcement actions).
NAL Response at 1.
Providers whose annual USF contribution would be less than $10,000 are
considered de minimis and exempt from contributing to the USF. 47 C.F.R.
S: 54.708; see also supra note 10.
See e-mail from Tracey Beaver, USAC, to David Janas, Special Counsel,
Investigations & Hearings Division, Enforcement Bureau, Federal
Communications Commission, dated Sept. 28, 2007.
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, 97th Cong. 2d Sess. 51 (1982) ("This provision
[inserted in section 312] defines the terms `willful' and `repeated' for
purposes of section 312, and for any other relevant section of the act
(e.g., section 503).... As defined ... `willful' means that the licensee
knew that he was doing the act in question, regardless of whether there
was an intent to violate the law. `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 ...").
See, e.g., Application for Review of Southern California Broadcasting Co.,
Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (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, Inc.") (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).
NAL Response at 1.
See 47 C.F.R. S: 1.80(b)(4).
LPSI NAL, 21 FCC Rcd at 9980-81, P:P: 17-20.
Voluntary Disclosure Letter, supra note 12.
Id. at 1.
LPSI finally paid outstanding USF contributions owed through July 2006 on
August 16, 2006. See supra para. 6.
While the forfeiture guidelines list voluntary disclosure as a downward
adjustment factor, the "Commission and its staff retain the discretion to
issue a higher or lower forfeiture than provided in the guidelines . . .
." 47 C.F.R. S: 1.80(b)(4) note.
See NAL Response at 1.
LPSI NAL, 21 FCC Rcd at 9976, P: 4 & n.14.
NAL Response at 1.
Id.
See 47 C.F.R. S: 1.80(b)(4).
NAL Response at 1.
See James Lee Gaskey, Forfeiture Order, 15 FCC Rcd 25309, 25311-12, P:P:
12-13 (Enf. Bur. 1999) (presuming that respondent's submission of tax
returns and statement of income were intended to demonstrate inability to
pay the forfeiture, even though the response to the Notice of Apparent
Liability did not explicitly seek rescission or reduction of the
forfeiture amount, and concluding that respondent failed to provide
sufficient justification for reducing the forfeiture).
Frank Neely Licensee, Memorandum Opinion and Order, 22 FCC Rcd 1434, 1435,
P: 5 (Assistant Chief, Enf. Bur. 2007) (citing PJB Communications of
Virginia, Inc., Memorandum Opinion and Order, 7 FCC Rcd. 2088, 2089
(1992)); see also Forfeiture Policy Statement, 12 FCC Rcd. at 17106-07, P:
43; LPSI NAL, 21 FCC Rcd at 9982, P: 27.
NAL Response at 2.
47 U.S.C. S: 503(b)(2)(E). See Forfeiture Policy Statement, 12 FCC Rcd at
17100; 47 C.F.R. S: 1.80(b).
LPSI NAL, supra note 1.
Global Teldata II, LLC, Order of Forfeiture, 22 FCC Rcd 8710 (2007)
("Global Teldata II").
Id. at 8720, P: 26.
Id.
LPSI's annual Worksheet, which reported historical revenue for 2006, was
due April 1, 2007.
See 47 C.F.R. S: 54.708.
See supra para. 9.
See LPSI NAL, 21 FCC Rcd 9974, 4722, P: 15 & n. 48.
See Globcom Forfeiture Order, 21 FCC Rcd 4721-4724, P: 31-38.
See, e.g., id. at 4722, P: 33.
See LPSI NAL, 21 FCC Rcd at 9980, P: 16.
47 C.F.R. at S: 54.711(a). See LPSI NAL, 21 FCC Rcd at 9977-78, P:P: 9-11.
47 U.S.C. S: 254(d).
47 C.F.R. S: 54.706(a).
See LPSI NAL, 21 FCC Rcd at 9979, P: 14.
47 U.S.C. S: 503(b).
47 C.F.R. S: 1.80.
47 U.S.C. S: 504(a).
Federal Communications Commission FCC 08-130
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Federal Communications Commission FCC 08-130