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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-05-IH-2010
In the Matter of
) Acct. No. 201032080007
Next-G Communication, Inc.
) FRN No. 0010717874
)
CONSENT DECREE
1. The Enforcement Bureau ("Bureau") of the Federal Communications
Commission ("Commission" or "FCC") and Next-G Communication, Inc.
("Next-G" or the "Company"), by their authorized representatives,
hereby enter into this Consent Decree for the purpose of terminating
the Bureau's investigation into whether Next-G violated section 276 of
the Communications Act of 1934, as amended (the "Act"), and sections
64.1300, 64.1310(a), and 64.1320 of the Commission's Rules, relating
to payphone compensation, and section 214 of the Act and section 63.18
of the Commission's Rules, relating to the provision of international
telecommunications service.
I. DEFINITIONS
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 the terms of
this Consent Decree without change, addition, deletion, or
modification.
c. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
d. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
e. "Compliance Plan" means the program described in this Consent Decree
at paragraph 11.
f. "Effective Date" means the date on which the Commission releases the
Adopting Order.
g. "Investigation" means the investigation commenced by the Bureau's
November 15, 2005 Letter of Inquiry regarding, among other issues,
whether Next-G violated section 276 of the Act and sections 64.1300,
64.1310, and 64.1320 of the Commission's rules, relating to payphone
compensation.
h. "Next-G" or the "Company" means Next-G Communication, Inc. and its
predecessors-in-interest and successors-in-interest.
i. "Parties" means Next-G Communication, Inc. and the Bureau.
j. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
k. "Telecommunications" or "Telecommunications service" means
telecommunications or telecommunications service as defined in
sections 3(43) and 3(46) of the Act, respectively, 47 U.S.C. S:S:
153(43), 153(46).
II. BACKGROUND
3. Pursuant to section 276 of the Act, the Commission has developed rules
to ensure that all payphone service providers ("PSPs") are fairly
compensated for each and every completed intrastate and interstate
call using their payphones. As a general matter, the rules require
"Completing Carriers" to compensate PSPs for completed payphone calls
at a rate agreed upon by contract," or, in the absence of such an
agreement, "at a per-call rate of $.494." A "Completing Carrier" is
defined as "a long distance carrier or switch-based long distance
reseller that completes a coinless access code or subscriber toll-free
payphone call or a local exchange carrier that completes a local,
coinless access code or subscriber toll-free payphone call."
4. Unless the PSP consents to an alternative compensation arrangement,
Completing Carriers must compensate PSPs in accordance with procedures
specified in sections 64.1310(a) and 64.1320 of the Commission's
rules. Those procedures require that the Completing Carrier, among
other things: (1) establish a call tracking system that accurately
tracks all toll-free payphone calls to completion; (2) engage a
third-party auditor who will verify that the call tracking system
complies with the Commission's requirements, prepare a "System Audit
Report" to be filed with the Commission, and verify the Completing
Carrier's continuing compliance with the requirements annually
thereafter; and (3) on a quarterly basis, compensate all PSPs for each
completed coinless access code or subscriber toll-free payphone call,
timely submit to each PSP a call data report that contains certain
information about the calls the Completing Carrier completed from that
PSP's payphone(s) during the quarter, and provide a sworn statement
from its chief financial officer to each PSP certifying that the
compensation paid for a quarter is accurate and complete.
5. 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. Section 63.18 of
the Commission's rules requires that any carrier seeking to provide
international telecommunications service apply for and obtain an
international section 214 authorization prior to providing such
service. The application requirement applies to carriers that resell
the service of another authorized carrier.
6. Next-G is a Texas-based telecommunications carrier that has provided
pre-paid calling cards and international termination services since at
least 2002. On November 15, 2005 and February 28, 2006, the Bureau
sent Next-G letters of inquiry ("LOIs") seeking certain documents and
information related to the company's compliance with the payphone
compensation rules. On December 21, 2005 and March 27, 2006,
respectively, Next-G responded to the LOIs. At the request of
Commission staff, Next-G thereafter supplemented the record several
times regarding its compliance with the Commission's payphone
compensation rules. Next-G and the Bureau have executed several
tolling agreements to date.
III. TERMS OF AGREEMENT
7. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau by
incorporation of such provisions by reference in the Adopting Order
without change, addition, modification, or deletion.
8. Jurisdiction. Next-G agrees that the Bureau has jurisdiction over it
and the matters contained in this Consent Decree and has the authority
to enter into and adopt this Consent Decree.
9. Effective Date: Violations. The Parties agree that this Consent Decree
shall become effective on the date on which the FCC releases the
Adopting Order. Upon release, the Adopting Order and this Consent
Decree shall have the same force and effect as any other Bureau Order.
Any violation of the Adopting Order or of the terms of this Consent
Decree shall constitute a separate violation of a Bureau Order,
entitling the Bureau to exercise any rights and remedies attendant to
the enforcement of a Commission Order.
10. Termination of Investigation. In express reliance on the covenants and
representations in this Consent Decree and to avoid further
expenditure of public resources, the Bureau agrees to terminate its
investigation. In consideration for the termination of said
investigation, Next-G agrees to the terms, conditions, and procedures
contained herein. The Bureau further agrees that in the absence of new
material evidence, the Bureau will not use the facts developed in this
investigation through the Effective Date of the Consent Decree, 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 Next-G 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 of
this Consent Decree, 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 Next-G with respect to
Next-G's basic qualifications, including its character qualifications,
to be a Commission licensee or authorized common carrier.
11. Compliance Plan. For purposes of settling the matters set forth
herein, Next-G agrees to create within thirty (30) calendar days from
the Effective Date a Compliance Plan related to future compliance with
the provisions of the Act, the Rules, and the Commission's Orders. The
Plan will include, at a minimum, the following components:
a. "Red Light" Status. Next-G will submit all outstanding payments due
to the Commission and file such documents as are necessary to remove
Next-G's "red light" status within thirty (30) days of the Effective
Date.
b. International Section 214 Authorization. Next-G will take all steps
necessary within sixty (60) days of the Effective Date to obtain
section 214 authority for its provision of international
telecommunications service.
c. Compliance Officer. Next-G will designate a Compliance Officer that
will be responsible for implementing and administering the Compliance
Plan and serve as the point of contact for all FCC compliance
matters.
d. Compliance Training Program. The Compliance Officer will be
responsible for ensuring that any Next-G employee who engages in
activities related to the FCC's payphone compensation and section 214
authorization requirements receives FCC compliance training. Such
training will be completed within ninety (90) days of the Effective
Date and any new employees will receive training within thirty (30)
days of their employment.
e. Review and Monitoring. Next-G will review its FCC Compliance Training
Program annually to ensure that it is maintained in a proper manner
and continues to address the objectives set forth therein.
f. Compliance Reports. Next-G will file compliance reports with the
Commission ninety (90) days after the Effective Date, twelve (12)
months after the Effective Date, twenty-four (24) months after the
Effective Date, and thirty-six (36) months after the Effective Date.
Each compliance report shall include a compliance certificate from an
officer, as an agent of Next-G, stating that the officer has personal
knowledge that Next-G has established operating procedures intended
to ensure compliance with this Consent Decree and outlining within
that statement the basis for the officer's compliance certification.
All compliance reports shall be submitted to Division Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, S.W., Washington, D.C.
20554.
g. Termination Date. Unless stated otherwise, the requirements of this
Consent Decree will expire thirty-six (36) months after the Effective
Date.
12. Section 208 Complaints: Subsequent Investigations. Nothing in this
Consent Decree shall prevent the Commission or its delegated authority
from adjudicating complaints filed pursuant to section 208 of the Act
against Next-G or its affiliates for alleged violations of the Act, or
for any other type of alleged misconduct, regardless of when such
misconduct took place. The Commission's adjudication of any such
complaint will be based solely on the record developed in that
proceeding. Except as expressly provided in this Consent Decree, this
Consent Decree shall not prevent the Commission from investigating new
evidence of noncompliance by Next-G of the Act, the Rules, or any
Commission Order.
13. Voluntary Contribution. Next-G agrees that it will make a voluntary
contribution to the United States Treasury in the amount of two
hundred fifty thousand dollars ($250,000.00), with an initial payment
of thirty thousand dollars ($30,000.00) and the remainder paid in
thirty-six (36) equal monthly installments of six thousand one hundred
eleven dollars and twelve cents ($6,111.12). The initial payment of
$30,000.00 shall be made within thirty (30) days after the Effective
Date, and the monthly installments thereafter shall be made by the
thirtieth (30th) day of each month following payment of the initial
payment. Each payment must be made by check or similar instrument,
payable to the order of the Federal Communications Commission. The
payment must include the 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 by wire transfer may be made to ABA
Number 021030004, receiving bank Federal Reserve Bank of New York, and
account number 27000001. Next-G will also send an electronic
notification within forty-eight (48) hours of the date of said payment
to Chin Yoo at Chin.Yoo@fcc.gov.
14. Waivers. Next-G 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 Bureau issues the Adopting
Order without change, addition, modification, or deletion. Next-G
shall retain the right to challenge Commission interpretation of the
Consent Decree or any terms contained herein. 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 Next-G nor the
Commission shall contest the validity of the Consent Decree or the
Adopting Order, and Next-G shall waive any statutory right to a trial
de novo. Next-G hereby 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.
15. Subsequent Rule or Order. The Parties 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 Next-G does not expressly
consent) that provision will be superseded by such Commission Rule or
Order.
16. Successors and Assigns. Next-G agrees that the provisions of this
Consent Decree shall be binding on its successors, assigns, and
transferees.
17. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties. The
Parties further 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, the Rules, and the Commission's Orders.
18. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
19. Paragraph Headings. The headings of the paragraphs in this Consent
Decree are inserted for convenience only and are not intended to
affect the meaning or interpretation of this Consent Decree.
20. Authorized Representative. Each party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
21. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when executed
and delivered, shall be an original, and all of which counterparts
together shall constitute one and the same fully executed instrument.
________________________________
Michele Ellison
Chief, Enforcement Bureau
________________________________
Date
________________________________
Zulfiqar AR
Vice President
Next-G Communication, Inc.
________________________________
Date
47 U.S.C. S: 276.
47 C.F.R. S:S: 64.1300, 64.1310(a), and 64.1320.
47 U.S.C. S: 214(a).
47 C.F.R. S: 63.18.
See Letter from Hillary S. DeNigro, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, FCC, to Zee Ar, President, Next-G
Communications, Inc. d/b/a U.S. Comm (Nov. 15, 2005).
47 U.S.C. S: 276.
47 C.F.R. S:S: 64.1300, 64.1310(a), and 64.1320.
47 U.S.C. S: 276(b)(1)(A).
See Implementation of the Pay Telephone Reclassification and Compensation
Provisions of the Telecommunications Act of 1996, Report and Order, 11 FCC
Rcd 20541 (1996) (subsequent history omitted) ("First Payphone Order").
The Commission's current rules were adopted in 2003, and subsequently
modified in 2004. See Implementation of the Pay Telephone Reclassification
and Compensation Provisions of the Telecommunications Act of 1996, Second
Report and Order, 18 FCC Rcd 19975 (2003) (subsequent history omitted)
("Second Payphone Order"); Implementation of the Pay Telephone
Reclassification and Compensation Provisions of the Telecommunications Act
of 1996, Order on Reconsideration, 19 FCC Rcd 21457 (2004) (subsequent
history omitted) ("Payphone Reconsideration Order").
47 C.F.R. S: 64.1300(b).
Id. at S: 64.1300(d).
Id. at S: 64.1300(a).
Id. at S:S: 64.1310(a), 64.1320.
Id. at S: 64.1310(a)(1).
Id. at S: 64.1320.
Id. at S: 64.1310(a)(2)-(4).
47 U.S.C. S: 214(a).
47 C.F.R. S: 63.18.
Id., at S: 63.18(e)(2).
Letter from Jonathan S. Marashlian, The Helein Law Group, P.C., counsel
for Next-G, to Hillary DeNigro and Raelynn Tibayan Remy, Investigations
and Hearings Division, Enforcement Bureau, FCC (Dec. 21, 2005), at 2
("December 2005 LOI Response").
Letter from Hillary S. DeNigro, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, FCC, to Zee Ar, President, Next-G
Communications, Inc. d/b/a U.S. Comm (Nov. 15, 2005); Letter from Hillary
S. DeNigro, Deputy Chief, Investigations and Hearings Division,
Enforcement Bureau, FCC, to Jonathan S. Marashlian, The Helein Law Group,
P.C., counsel for Next-G (Feb. 28, 2006).
See December 2005 LOI Response; Letter from Jonathan S. Marashlian, The
Helein Law Group, P.C., counsel for Next-G, to Hillary DeNigro and Raelynn
Tibayan Remy, Investigations and Hearings Division, Enforcement Bureau,
FCC (Mar. 27, 2006), at 2.
See, e.g., Letter from Jonathan S. Marashlian, The Helein Law Group, P.C.,
counsel for Next-G, to Hillary DeNigro and Raelynn Tibayan Remy,
Investigations and Hearings Division, Enforcement Bureau, FCC (May 5,
2006); Letter from Jonathan S. Marashlian, The Helein Law Group, P.C.,
counsel for Next-G, to Hillary DeNigro and Raelynn Tibayan Remy,
Investigations and Hearings Division, Enforcement Bureau, FCC (July 14,
2006); Letter from Jonathan S. Marashlian, The Helein Law Group, P.C.,
counsel for Next-G, to Hillary DeNigro and Raelynn Tibayan Remy,
Investigations and Hearings Division, Enforcement Bureau, FCC (Nov. 8,
2006); Letter from Jonathan S. Marashlian, Helein & Marashlian, LLC,
counsel for Next-G, to Hillary DeNigro and Raelynn Tibayan Remy,
Investigations and Hearings Division, Enforcement Bureau, FCC (Jan. 3,
2007); Letter from Jonathan S. Marashlian, Helein & Marashlian, LLC,
counsel for Next-G, to Hillary DeNigro and Raelynn Tibayan Remy,
Investigations and Hearings Division, Enforcement Bureau, FCC (Nov. 9,
2007); Letter from Jonathan S. Marashlian, Helein & Marashlian, LLC,
counsel for Next-G, to Hillary DeNigro and Raelynn Tibayan Remy,
Investigations and Hearings Division, Enforcement Bureau, FCC (Nov. 19,
2007); Letter from Jonathan S. Marashlian, Helein & Marashlian, LLC,
counsel for Next-G, to Trent Harkrader, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, FCC, (Jan. 29, 2008); Letter from
Jonathan S. Marashlian, Helein & Marashlian, LLC, counsel for Next-G, to
Vickie Robinson and Chin Yoo, Investigations and Hearings Division,
Enforcement Bureau, FCC (Dec. 29, 2008).
Tolling Agreement, File No. EB-05-IH-2010, executed on June 29, 2006, by
and between Christopher Olsen, Deputy Chief, Enforcement Bureau, FCC (on
behalf of Kris Monteith, Chief, Enforcement Bureau, FCC) and Jonathan
Marashlian, Counsel to Next-G; Tolling Agreement Extension, File No.
EB-05-IH-2010, executed on September 19, 2006, by and between Gene
Fullano, Deputy Chief, Enforcement Bureau, FCC (on behalf of Kris
Monteith, Chief, Enforcement Bureau, FCC), and Jonathan Marashlian,
Counsel to Next-G; Tolling Agreement Extension, File No. EB-05-IH-2010,
executed on December 13, 2006, by and between Kris Monteith, Chief,
Enforcement Bureau, FCC, and Jonathan Marashlian, Counsel to Next-G;
Tolling Agreement Extension, File No. EB-05-IH-2010, executed on March 16,
2007, by and between Kris Monteith, Chief, Enforcement Bureau, FCC, and
Jonathan Marashlian, Counsel to Next-G; Tolling Agreement Extension, File
No. EB-05-IH-2010, executed on June 7, 2007, by and between Hillary S.
DeNigro, Deputy Chief, Investigations and Hearings Division, Enforcement
Bureau, FCC, and Ted A. Cox, Counsel to Next-G; Tolling Agreement
Extension, File No. EB-05-IH-2010, executed on June 12, 2009 , by and
between Trent B. Harkrader, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, FCC, and Jonathan Marashlian, Counsel to
Next-G; Tolling Agreement Extension, File No. EB-05-IH-2010, executed on
August 14, 2009, by and between Hillary S. DeNigro, Chief, Investigations
and Hearings Division, Enforcement Bureau, FCC, and Jonathan Marashlian,
Counsel to Next-G; Tolling Agreement Extension, File No. EB-05-IH-2010,
executed on October 8, 2009, by and between Hillary S. DeNigro, Chief,
Investigations and Hearings Division, Enforcement Bureau, FCC, and
Jonathan Marashlian, Counsel to Next-G.
See 47 C.F.R. S: 1.1910.
Federal Communications Commission DA 09-2068
2
Federal Communications Commission DA 09-2068