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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
In the Matter of ) File No. EB-08-IH-5217
Teleplus, LLC ) NAL/Acct. No. 200932080046
Apparent Liability for Forfeiture ) FRN No. 0014157283
)
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: June 4, 2009 Released: June 4, 2009
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Teleplus, LLC ("Teleplus") apparently violated section 214 of the
Communications Act of 1934, as amended (the "Act") and section 63.18
of the Commission's rules by willfully or repeatedly failing to obtain
an international section 214 authorization before providing
international telecommunications service. Based on our review of the
facts and circumstances surrounding this matter, and for the reasons
discussed below, we find that Teleplus is apparently liable for a
total forfeiture of $100,000.
II. BACKGROUND
2. Section 214(a) of the Act prohibits any carrier from constructing,
extending, or operating any line, and from engaging in transmission
through any such line, "unless and until there shall first have been
obtained from the Commission a certificate that the present or future
public convenience and necessity" require, or will require, the
construction, extension, or operation of the line. While the
Commission has granted "blanket" authority to carriers providing
domestic service, meaning that such carriers need not apply to the
Commission for such authority before providing domestic service, the
Commission has not done the same for providers of international
telecommunications services. Rather, section 63.18 of the Commission's
rules requires that any carrier that seeks section 214 authority "for
provision of common carrier communication services between the United
States, its territories or possessions, and a foreign point shall
request such authority by application." Through this process the
applicant provides the Commission with, among other things, contact
information, ownership information, information on any affiliations it
may have with foreign carriers, certification that it will comply with
Commission rules, and certification that the applicant is not subject
to denial of Federal benefits pursuant to the Anti-Drug Abuse Act of
1988. The application requirement applies to carriers that resell the
service of another authorized carrier, and to domestic providers of
wireless telecommunications service that also provide international
telecommunications service.
3. Teleplus is a Florida-based company that has provided international
telecommunications services since May 2005. Teleplus provides prepaid
calling cards that are mainly used by consumers to make U.S.
interstate, intrastate, and international telephone calls. Teleplus
sells its prepaid calling cards directly to consumers through the
www.teleplusllc.com and www.callingcardplus.com web sites, as well as
through distributors and resellers.
4. On February 17, 2006, Teleplus submitted an application for
international section 214 authority, in which it stated that it had
not previously received authority under section 214 of the Act.
Because Teleplus was owned by foreign nationals, the application was
referred to the Executive Branch for review for national security, law
enforcement, foreign policy, and trade concerns. During the course of
Executive Branch review, while its 214 application was still pending,
Teleplus represented to the Department of Justice and the Commission's
International Bureau that it had accumulated a customer base of at
least 1,000 retail end users and had earned several million dollars in
revenue from its prepaid calling card services in calendar year 2007
alone. The International Bureau granted Teleplus's section 214
application on June 19, 2008 after the conclusion of Executive Branch
review, without prejudice to subsequent enforcement action by the
Commission for non-compliance with the Act or the Commission's rules.
5. On March 30, 2009, the Commission's Enforcement Bureau ("Bureau")
issued a letter of inquiry ("LOI"), initiating an investigation into
whether Teleplus may have violated the Act and the Commission's rules
pertaining to the provision of international telecommunications
service. Teleplus responded to the LOI on April 10, 2009.
III. DISCUSSION
6. 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 of section 312(f)(1) of the Act clarifies that this definition
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 rule.
7. The fundamental issue in this case is whether Teleplus apparently
violated the Act and the Commission's rules by willfully or repeatedly
failing to obtain an international section 214 authorization before
providing international telecommunications service, as required by
section 63.18 of the Commission's rules. We answer this question in
the affirmative. Based on the preponderance of the evidence, we
conclude that Teleplus is apparently liable for a forfeiture of
$100,000 for apparently willfully or repeatedly violating section 214
of the Act and section 63.18 of the Commission's rules.
A. Teleplus Apparently Failed to Obtain an International Section 214
Authorization Before Providing International Telecommunications
Service
8. We find that Teleplus provided international telecommunications
service without an international section 214 authorization from May
2005 until June 18, 2008. In the LOI Response, Teleplus states that it
began providing international telecommunications service in May 2005.
However, Teleplus did not apply for international section 214
authority until February 17, 2006, and stated in the application that
it had not previously been granted such authority. Moreover, even
though it continued to provide international telecommunications
service, Teleplus failed to apply for Special Temporary Authority from
the Commission while its application was pending, further aggravating
its apparent violation. Furthermore, in response to the Bureau's
request for a list of all international section 214 authorizations
held by Teleplus, the company listed only the authorization granted on
June 18, 2008. Thus, Teleplus apparently provided international
telecommunications service without Commission-granted international
section 214 authority from May 2005 to June 18, 2008. We therefore
conclude based on a preponderance of the evidence that Teleplus has
apparently willfully violated section 214 of the Act and section 63.18
of the Commission's rules.
B. Proposed Forfeiture Amount
9. Section 503(b)(1) of the Act provides that any person that willfully
or repeatedly fails 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 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."
10. Under section 503(b)(6) of the Act, we may only propose forfeitures
for apparent violations that occurred within one year of the date of
this NAL. Nevertheless, section 503(b) does not bar us from assessing
whether Teleplus's conduct prior to that time period apparently
violated the Act or our rules in determining the appropriate
forfeiture amount for those violations within the statute of
limitations. Therefore, although we find that Teleplus apparently
violated the Act and our rules for over three years, we propose
forfeitures here only for violations that occurred within the last
year.
11. We conclude that Teleplus has apparently failed to obtain an
international section 214 authorization from the Commission prior to
providing international telecommunications service. A carrier's
failure to obtain the 214 authorization undermines the Commission's
ability to accomplish Congress' objectives in section 214 of the Act.
Teleplus apparently operated as an international telecommunications
service provider from May 2005 until June 18, 2008 without
authorization from the Commission. We therefore find that this
apparent violation of the Act and the Commission's rules was repeated.
Given the unambiguous language of the Act, the Commission's rules and
decisions, and even the Commission's web site, it should have been
apparent to Teleplus that it was required to obtain section 214
authority from the Commission to provide international
telecommunications service.
12. In light of the Commission's clear requirements, and the important
public interest considerations involving national security, law
enforcement, foreign policy, and trade policy, we find that Teleplus's
failure to obtain section 214 authority from the Commission prior to
providing international telecommunications service was also egregious.
We also find that a proposed forfeiture must be large enough to have a
deterrent effect on companies with gross revenues commensurate with
those of Teleplus. Pursuant to the Commission's mandate from Congress
to consider "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," we find that, consistent with
prior precedent for entities failing to receive prior authorization
from the International Bureau, a proposed forfeiture of $100,000 is
warranted for Teleplus's apparent willful repeated failure to obtain
section 214 authority from the Commission prior to providing
international telecommunications service.
IV. ORDERING CLAUSES
13. ACCORDINGLY, IT IS ORDERED THAT, pursuant to section 503(b) of the
Communications Act of 1934, as amended, 47 U.S.C. S: 503(b), and
section 1.80 of the Commission's rules, 47 C.F.R. S: 1.80, and the
authority delegated by section 0.111 of the Commission's rules, 47
C.F.R. S: 0.111, Teleplus, LLC is hereby NOTIFIED of its APPARENT
LIABILITY FOR A FORFEITURE in the amount of $100,000 for willfully and
repeatedly violating the Act and the Commission's rules.
14. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
Commission's Rules, within thirty days of the release date of this
NOTICE OF APPARENT LIABILITY, Teleplus, LLC SHALL PAY the full amount
of the proposed forfeiture or SHALL FILE a written statement seeking
reduction or cancellation of the proposed forfeiture.
15. 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. Teleplus will also send electronic
notification on the date said payment is made to
Hillary.DeNigro@fcc.gov.
16. The response, if any, to this NOTICE OF APPARENT LIABILITY must be
mailed to Hillary S. DeNigro, Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W., Room 4-C330, Washington, D.C. 20554 and must
include the NAL/Acct. No. referenced above. Teleplus also will e-mail
an electronic copy of its response to Hillary.DeNigro@fcc.gov.
17. The Commission will not consider reducing or canceling a forfeiture in
response to a claim of inability to pay unless the petitioner submits:
(1) federal tax returns for the most recent three-year period; (2)
financial statements prepared according to generally accepted
accounting practices (GAAP); or (3) some other reliable and objective
documentation that accurately reflects the petitioner's current
financial status. Any claim of inability to pay must specifically
identify the basis for the claim by reference to the financial
documentation submitted.
18. IT IS FURTHER ORDERED that a copy of this NOTICE OF APPARENT LIABILITY
FOR FORFEITURE shall be sent by certified mail, return receipt
requested, to Edward Maldonado, Counsel for Teleplus, LLC, Maldonado
Law Group, 7925 NW 12th Street, Suite 300, Doral, FL 33126.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
47 U.S.C. S: 214.
47 C.F.R. S: 63.18.
47 U.S.C. S: 214(a).
47 C.F.R. S: 63.01(a) ("Any party that would be a domestic interstate
communications common carrier is authorized to provide domestic,
interstate services to any domestic point and to construct or operate any
domestic transmission line as long as it obtains all necessary
authorizations from the Commission for use of radio frequencies.").
Implementation of Section 402(b)(2)(A) of the Telecomm. Act of 1996,
Report and Order in CC Docket No. 97-11, Second Memorandum Opinion & Order
in AAD File No. 98-43, 14 FCC Rcd 11364, 11366 n.8 (1999) (grant of
blanket authority is only for domestic services and does not extend to the
provision of international services).
47 C.F.R. S: 63.18.
See id.
See id. S: 63.18(e)(2).
1998 International Biennial Regulatory -- Review of International Common
Carrier Regulations, Report and Order, 14 FCC Rcd 4909, 4926-27, P:P:
38-39 (1999) ("1998 International Biennial Review Order"). See also
Personal Communications Indus. Ass'n's Broadband Personal Communications
Servs. Alliance's Pet. for Forbearance for Broadband Personal
Communications Servs., Memorandum Opinion and Order and Notice of Proposed
Rulemaking, 13 FCC Rcd 16857, 16881-84, P:P: 45-54 (1998) (declining
PCIA's request to forbear from requiring section 214 authority for a
broadband PCS carrier to provide international services) ("PCIA
Forbearance Order"); Implementation of Sections 3(n) and 332 of the
Communications Act, Regulatory Treatment of Mobile Servs., Second Report
and Order, 9 FCC Rcd 1411, 1481, P: 182 n.369 (1994) (declining to forbear
from application of section 214 to CMRS carriers' provision of
international services).
See Response of Teleplus, LLC. to the Enforcement Bureau's March 30, 2009
Letter of Inquiry (Apr. 10, 2009) ("LOI Response"), Response to Inquiry
No. 6.
See E-mail from Anteneh "Alonzo" T. Beyene, Regulatory Consultant to
Teleplus, Regnum Group, Inc., to Jennifer Rockoff, National Security
Division, U.S. Department of Justice and Mikelle Morra, International
Bureau, FCC (May 15, 2008).
See File No. ITC-214-20060217-00099.
See Rules and Policies on Foreign Participation in the U.S.
Telecommunications Market, Report and Order and Order on Reconsideration,
12 FCC Rcd 23891, 23919-21, P:P: 61-66 (1997), Order on Reconsideration,
15 FCC Rcd 18158 (2000).
See E-mail from Anteneh "Alonzo" T. Beyene, Regulatory Consultant to
Teleplus, Regnum Group, Inc., to Mikelle Morra, International Bureau, FCC
(Mar. 13, 2008); E-mail from Anteneh "Alonzo" T. Beyene, Regulatory
Consultant to Teleplus, Regnum Group, Inc., to Jennifer Rockoff, National
Security Division, U.S. Department of Justice and Mikelle Morra,
International Bureau, FCC (May 15, 2008).
See International Authorizations Granted, Public Notice, Rep. No.
TEL-01280, DA No. 08-1441 (rel. June 19, 2008).
See Letter from Trent B. Harkrader, Deputy Chief, Investigations &
Hearings Division, Enforcement Bureau, FCC, to Amr Ibrahim, Teleplus, LLC
(Mar. 30, 2009) ("LOI").
See LOI Response.
See 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).
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, 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) (forfeiture paid).
47 U.S.C. S: 214; 47 C.F.R. S: 63.18.
LOI Response, Response to Inquiry No. 6.
See P: 4 supra.
LOI Response, Response to Inquiry No. 4.
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(2).
47 U.S.C. S: 503(b)(2)(B); 47 C.F.R. S: 1.80(b)(2); see also Amendment of
Section 1.80(b) of the Commission's Rules, Adjustment of Forfeiture Maxima
to Reflect Inflation, Order, 15 FCC Rcd 18221 (2000). These are the
statutory maxima in effect for the period of the apparent violation.
47 U.S.C. S: 503(b)(2)(E).
47 U.S.C. S: 503(b)(6)(B); see also 47 C.F.R. S: 1.80(c)(3).
See, e.g., Globcom, Inc., Notice of Apparent Liability for Forfeiture and
Order, 18 FCC Rcd 19893, 19903, P: 23 (2003); Roadrunner Transp., Inc.,
Forfeiture Order, 15 FCC Rcd 9669, 9671, P: 8 (2000); Liab. of E. Broad.
Corp., Memorandum Opinion and Order, 10 F.C.C. 2d 37, P: 3 (1967).
47 U.S.C. S: 214(a).
See, e.g., 47 C.F.R. S:S: 63.12, 63.18, 63.20, 63.21, 63.23; see also 1998
International Biennial Review Order, 14 FCC Rcd 4909; Regulation of Int'l
Common Carrier Services, Report and Order, 7 FCC Rcd 7331 (1992)
("International Resale Order").
For example, the Commission's website has a list of frequently asked
questions about section 214 applications for providers of international
telecommunications services. See http://www.fcc.gov/ib/pd/pf/214faq.html.
Among the questions and answers are the following: "Question: If I am
merely reselling the international services of another carrier, do I have
to file a section 214 application? Answer: Yes, including in the case of
mobile international services. Refer to 47 CFR S: 63.18(e)(2), global
resale service."
See 1998 International Biennial Review Order, 14 FCC Rcd at 4915-17, P:P:
15-18; id. 4939-40, P:P: 72-74.
See P: 4 supra; LOI Response, Response to Inquiry No. 7 (providing revenue
data for 2006 through the first quarter of 2009).
47 U.S.C. S: 503(b)(2)(E).
InPhonic, Inc., Order of Forfeiture and Further Notice of Apparent
Liability for Forfeiture, 22 FCC Rcd 8689, 8703, P:35 (2007); ADMA
Telecom, Inc., Notice of Apparent Liability for Forfeiture, FCC 09-1, P:
38 (rel. Jan. 14, 2009); Omniat International Telecom, LLC d/b/a OMNIAT
Telecom, Notice of Apparent Liability for Forfeiture and Order, FCC 09-26,
P: 25 (rel. Mar. 31, 2009).
See 47 C.F.R. S: 1.80.
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Federal Communications Commission DA 09-1264
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Federal Communications Commission DA 09-1264