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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-08-SE-706
In the Matter of
) NAL/Acct. No. 200932100053
WorldNet, L.L.C.
) FRN 0004937116
)
Notice OF apparent liability for forfeiture AND ORDER
Adopted: April 3, 2009 Released: April 3, 2009
By the Chief, Spectrum Enforcement Division, Enforcement Bureau:
I. introduction
1. In this Notice of Apparent Liability for Forfeiture and Order ("NAL"),
we find that WorldNet, L.L.C. ("WorldNet") apparently willfully
violated a Commission Order in failing to respond to a Letter of
Inquiry ("LOI") from the Enforcement Bureau's Spectrum Enforcement
Division. We conclude, pursuant to Section 503(b) of the
Communications Act of 1934, as amended ("Act"), that WorldNet is
apparently liable for a forfeiture in the amount of twenty thousand
dollars ($20,000). We also order WorldNet to respond fully to the LOI
within ten (10) days of release of this NAL. If WorldNet again fails
to submit a complete response, it will be subject to further
enforcement action.
II. background
2. On October 23, 2008, the Enforcement Bureau's ("Bureau") Spectrum
Enforcement Division ("Division") issued an LOI directing WorldNet to
provide certain information and documents regarding its compliance
with the network outage reporting requirements. The LOI was sent to
WorldNet via facsimile and by certified mail with return receipt
requested, and the Bureau subsequently received confirmation that the
facsimile transmission was successful, and that the LOI that was sent
by certified mail was delivered to WorldNet on October 28, 2008. As of
the date of this NAL, the Division has not received a response to the
LOI.
III. discussion
A. Failure to Respond to the LOI
3. We find that WorldNet's failure to respond to the Division's inquiry
constitutes an apparent willful violation of a Commission Order. The
Division directed WorldNet to provide certain information and
documents related to the company's compliance with the network outage
reporting requirements. This information was necessary to enable the
Commission to perform its enforcement function and evaluate whether
WorldNet violated the Commission's Rules ("Rules").
4. Section 218 of the Act specifically authorizes the Commission to
"obtain from ... carriers ... full and complete information necessary
to enable the Commission to perform the duties and carry out the
objects for which it was created." In addition, the Commission has
broad investigatory authority under Sections 4(i), 4(j), and 403 of
the Act, its Rules, and relevant precedent. Section 4(i) authorizes
the Commission to "issue such orders, not inconsistent with this Act,
as may be necessary in the execution of its functions." Section 4(j)
states that "the Commission may conduct its proceedings in such manner
as will best conduce to the proper dispatch of business and to the
ends of justice." Section 403 grants the Commission "full authority
and power to institute an inquiry, on its own motion ... relating to
the enforcement of any of the provisions of this Act." Numerous FCC
decisions have reaffirmed the Commission's authority to investigate
potential misconduct and punish those that disregard FCC inquiries.
5. There is no question that WorldNet received the October 23, 2008 LOI,
as evidenced by confirmation of the facsimile transmission and the
certified mail return receipt. Since WorldNet received the LOI, it has
neither contacted the Division nor submitted a response to the
Division's inquiry.
A. Proposed Forfeiture
6. 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. To impose such a forfeiture penalty, the Commission must
issue a notice of apparent liability and the person against whom such
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. We conclude
under this standard that WorldNet is apparently liable for forfeiture
for its apparent willful violation of a Commission Order.
7. Under Section 503(b)(2)(B) of the Act, we may assess a common carrier
a forfeiture of up to $150,000 for each violation, or for each day of
a continuing violation up to a maximum of $1,500,000 for a single act
or failure to act. In exercising such authority, we are required to
take into account "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."
8. Section 1.80 of the Rules and the Commission's Forfeiture Policy
Statement establish a base forfeiture amount of $4,000 for failure to
respond to Commission communications. We find that WorldNet's failure
to respond to the LOI in the circumstances presented here warrants an
increase to this base amount. Misconduct of this type exhibits
contempt for the Commission's authority and threatens to compromise
the Commission's ability to adequately investigate violations of its
rules. Prompt and full responses to Division inquiry letters are
essential to the Commission's enforcement function. In this case,
WorldNet's apparent violations have delayed our investigation in an
area of critical importance, namely, network outage reporting.
9. Based on these facts, we therefore propose a twenty thousand dollar
($20,000) forfeiture against WorldNet for failing to respond to
Commission communications. This forfeiture amount is consistent with
precedent in similar cases, where companies failed to provide
responses to Bureau inquiries concerning compliance with the
Commission's Rules despite evidence that the LOIs had been received.
10. We also direct WorldNet to respond fully to the October 23, 2008 LOI
within ten (10) days of the release of this Notice of Apparent
Liability for Forfeiture and Order. Failure to do so may constitute an
additional violation subjecting WorldNet to further penalties,
including potentially higher monetary forfeitures.
IV. ordering clauses
11. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the
Act, and Section 1.80 of the Rules, and the authority delegated by
Sections 0.111 and 0.311 of the Rules, WorldNet, L.L.C. is NOTIFIED of
its APPARENT LIABILITY FOR A FORFEITURE in the amount of twenty
thousand dollars ($20,000) for its willful violation of a Commission
Order.
12. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules,
within thirty (30) days of the release date of this Notice of Apparent
Liability for Forfeiture and Order, WorldNet SHALL PAY the full amount
of the proposed forfeiture or SHALL FILE a written statement seeking
reduction or cancellation of the proposed forfeiture.
13. IT IS FURTHER ORDERED that, pursuant to sections 4(i), 4(j), 218 and
403 of the Communications Act of 1934, as amended, 47 U.S.C. S:S:
154(i), 154(j), 218 and 403, WorldNet shall fully respond to the
October 23, 2008 Letter of Inquiry sent by the Enforcement Bureau's
Spectrum Enforcement Division in the manner described by that Letter
of Inquiry within ten (10) days of the release of this Notice of
Apparent Liability and Order.
14. 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. WorldNet will also send electronic
notification on the date said payment is made to Ricardo Durham at
Ricardo.Durham@fcc.gov and to Deborah Broderson at
Deborah.Broderson@fcc.gov.
15. The response, if any, must be mailed to the Office of the Secretary,
Federal Communications Commission, 445 12th Street, S.W., Washington,
D.C. 20554, ATTN: Enforcement Bureau - Spectrum Enforcement Division,
and must include the NAL/Acct. No. referenced in the caption. The
response should also be e-mailed to Ricardo Durham, Senior Deputy
Chief, Spectrum Enforcement Division, Enforcement Bureau, FCC, at
Ricardo.Durham@fcc.gov and to Deborah Broderson, Spectrum Enforcement
Division, FCC, at Deborah.Broderson@fcc.gov.
16. 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; 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.
17. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture and Order shall be sent by first class mail and
certified mail return receipt requested to Ms. Debra R. Schmidt,
Director of Telephony Services, WorldNet, L.L.C., 1 Riverfront Plaza,
Suite 301, Lawrence, Kansas 66044.
FEDERAL COMMUNICATIONS COMMISSION
Kathryn S. Berthot
Chief, Spectrum Enforcement Division
Enforcement Bureau
47 U.S.C. S: 503(b).
Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission to Ms. Debra R.
Schmidt, Director of Telephony Services, WorldNet, L.L.C. (Oct. 23, 2008)
("LOI").
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. 47 U.S.C. S: 312(f)(1). The legislative history of
Section 312(f)(1) of the Act indicates that this definition of willful
applies to both Sections 312 and 503(b) of the Act, H.R. Rep. No. 97-765,
97th Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the
term in the Section 503(b) context. See, e.g., Southern California
Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387-88 P:
5 (1991) ("Southern California Broadcasting").
47 U.S.C. S: 218.
47 U.S.C. S: 154(i).
47 U.S.C. S: 154(j).
47 U.S.C. S: 403.
See, e.g., Cablevision Systems Corp., Notice of Apparent Liability for
Forfeiture and Order, DA 09-119 (Enf. Bur., rel. January 19, 2009)
(proposing a forfeiture of $25,000 for failing to respond fully to an
LOI); Connect Paging, Inc., Notice of Apparent Liability for Forfeiture
and Order, 22 FCC Rcd 6303, 6306 (Enf. Bur. 2007) (proposing $4,000
forfeiture for failure to respond to an LOI); Hauppauge Computer Works,
Inc., Notice of Apparent Liability for Forfeiture and Order, 23 FCC Rcd
3684, 3688 (Enf. Bur., Spectrum Enf. Div. 2008) (proposing an $11,000
forfeiture for failure to respond to an LOI); Digital Antenna, Inc.,
Notice of Apparent Liability for Forfeiture and Order, 23 FCC Rcd 7600,
7602 (Enf. Bur., Spectrum Enf. Div. 2008) (proposing $11,000 forfeiture
for failure to respond to provide a complete response to an LOI).
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).
47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).
See, e.g., BigZoo.Com Corporation, Forfeiture Order, 20 FCC Rcd 3954, 3955
(Enf. Bur. 2005) (forfeiture paid).
47 U.S.C. S: 503(b)(2)(B). The Commission has amended Section 1.80(b)(3)
of the Rules, 47 C.F.R. S: 1.80(b)(3), three times to increase the maximum
forfeiture amounts, in accordance with the inflation adjustment
requirements contained in the Debt Collection Improvement Act of 1996, 28
U.S.C. S: 2461. See Amendment of Section 1.80 of the Commission's Rules
and Adjustment of Forfeiture Maxima to Reflect Inflation, 23 FCC Rcd 9845,
9847 (2008) (adjusting the maximum statutory amounts for common carriers
from $130,000/$1,300,000 to $150,000/$1,500,000); Amendment of Section
1.80 of the Commission's Rules and Adjustment of Forfeiture Maxima to
Reflect Inflation, Order, 19 FCC Rcd 10945, 10947 (2004) (adjusting the
maximum statutory amounts for common carriers from $120,000/$1,200,000 to
$130,000/$1,300,000); Amendment of Section 1.80 of the Commission's Rules
and Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 15 FCC
Rcd 18221, 18223 (2000) (adjusting the maximum statutory amounts for
common carriers from $100,000/$1,000,000 to $120,000/$1,200,000). The most
recent inflation adjustment took effect September 2, 2008 and only applies
to violations that occur after that date. See 73 Fed. Reg. 44663-5. As
WorldNet's apparent violations occurred after September 2, 2008, they are
therefore subject to the new forfeiture limits.
47 U.S.C. S: 503(b)(2)(E). See also 47 C.F.R. S: 1.80(b)(4), Note to
paragraph (b)(4): Section II. Adjustment Criteria for Section 503
Forfeitures.
See 47 C.F.R. S: 1.80(b)(4); The Commission's Forfeiture Policy Statement
and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture
Guidelines, Report and Order, 12 FCC Rcd. 17087 (1997), recon. denied, 15
FCC Rcd. 303 (1999).
In New Part 4 of the Commission's Rules Concerning Disruptions to
Communications, Report and Order and Further Notice of Proposed Rule
Making, 19 FCC Rcd 16830, 16833 (2004) (adopting 47 C.F.R. Part 4), the
Commission recognized "the critical need for rapid, complete, and accurate
information on service disruptions that could affect homeland security,
public health or safety, and the economic well-being of our Nation."
See supra note 8. See also, Liberty Phones, Inc., Notice of Apparent
Liability for Forfeiture and Order, 22 FCC Rcd 17264 (Enf. Bur., Inv. &
Hearings Div. 2007) (proposing a $20,000 forfeiture for failure to respond
to an LOI); Universal Telecommunications, Inc., Notice of Apparent
Liability for Forfeiture and Order, 21 FCC Rcd 6579, 6582 (Enf. Bur. 2006)
(proposing a $20,000 forfeiture for failure to respond to an LOI);
BigZoo.Com Corporation, Notice of Apparent Liability for Forfeiture and
Order, 19 FCC Rcd 24437, 24441 (Enf. Bur. 2004) (proposing a $20,000
forfeiture for failure to respond to an LOI). These cases ordered or
proposed forfeitures of $20,000 for common carriers who failed to respond
to Commission communications.
We do not decide in this NAL whether the failure to respond to an LOI
constitutes a continuing violation.
Federal Communications Commission DA 09-765
1
1
Federal Communications Commission DA 09-765