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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
In the Matter of File No. EB-06-IH-2110
)
ADMA Telecom, Inc. NAL/Acct. No. 200932080022
)
Apparent Liability for Forfeiture FRN No. 0015301732
)
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: January 14, 2009 Released: January 14, 2009
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that ADMA Telecom, Inc. ("ADMA") apparently violated sections 214,
225, 251(e)(2), and 254 of the Communications Act of 1934, as amended
(the "Act"), and sections 1.1157, 52.17(a), 54.706(a), 54.711(a),
63.18, 64.604(c)(5)(iii)(A)-(B), and 64.1195 of the Commission's rules
by willfully or repeatedly failing to register with the Commission,
failing to make the required regulatory filings, as well as failing to
contribute fully and timely to the Universal Service Fund ("USF"),
Telecommunications Relay Service ("TRS") Fund, cost recovery
mechanisms for the North American Numbering Plan ("NANP")
administration and failing to obtain an international section 214
authorization. Based on our review of the facts and circumstances
surrounding this matter, and for the reasons discussed below, we find
that ADMA is apparently liable for a total forfeiture of $672,541.
II. BACKGROUND
2. The Commission is charged by Congress with regulating interstate and
international telecommunications and ensuring that providers of such
telecommunications comply with the requirements imposed on them by the
Act and our rules. The Commission also has been charged by Congress to
establish, administer and maintain various telecommunications
regulatory programs, and to fund these programs through assessments on
the telecommunications providers that benefit from them. To accomplish
these goals, the Commission established "a central repository of key
facts about carriers" through which it could monitor the entry and
operation of interstate telecommunications providers to ensure, among
other things, that they are qualified to provide telecommunications
service, do not engage in fraud, and do not evade oversight.
Commission rules require that upon entry or anticipated entry into
interstate telecommunications markets, telecommunications carriers
register by submitting information on FCC Form 499-A, also known as
the annual Telecommunications Reporting Worksheet ("annual Worksheet"
or "Form 499-A").
3. The Commission has established specific procedures for the
administration of the universal service, TRS, and other associated
federal regulatory programs. All telecommunications carriers and
certain other providers of telecommunications are required to file FCC
Form 499-A, reporting revenue information for the purpose of
determining their USF, TRS, Local Number Portability ("LNP"), NANP
administration and regulatory fee payments, and, with certain
exceptions, to file Quarterly Telecommunications Reporting Worksheets
("quarterly Worksheet" or "Form 499-Q") to determine their monthly
universal service contribution amounts. These periodic filings trigger
a determination of contribution amounts owed, if any, and subsequent
billing and collection, by the entities that administer the regulatory
programs. For example, the Universal Service Administrative Company
("USAC"), the administrator of the USF, uses the revenue projections
submitted on the quarterly filings to determine each contributor's
monthly universal service contribution obligations. Similarly, the
National Exchange Carriers Association ("NECA") is the TRS Fund
administrator, and it uses the annual filings to determine each
contributor's TRS Fund contribution amount. USAC bills carriers
(including ADMA) each month based on their quarterly contribution
amount. NECA bills carriers each July based upon their annual revenue.
Contributors must timely pay their contribution invoices, and the
Commission's rules explicitly warn contributors that failure to file
forms or submit payments potentially subjects them to enforcement
action.
4. The Act codified Congress's historic commitment to promote universal
service to ensure that consumers in all regions of the nation have
access to affordable, quality telecommunications services. In
particular, section 254(d) of the Act requires, among other things,
that "[e]very telecommunications carrier [providing] interstate
telecommunications services . . . contribute, on an equitable and
nondiscriminatory basis, to the specific, predictable, and sufficient
mechanisms established by the Commission to preserve and advance
universal service." In implementing this Congressional mandate, the
Commission directed all telecommunications carriers providing
interstate telecommunications services and certain other providers of
interstate telecommunications to register with the Commission, comply
with annual and quarterly filing requirements and contribute to the
universal service fund based upon their interstate and international
end-user telecommunications revenues. The Commission also requires
certain providers of interstate telecommunications, including
interconnected Voice over Internet Protocol (VoIP) providers, to
contribute to the USF. Failure by some providers to pay their share
into the USF skews the playing field by giving them an economic
advantage over their competitors, who must then shoulder more than
their fair share of the costs of the universal service fund.
5. Section 225(b)(1) of the Act, which codifies Title IV of the Americans
with Disabilities Act of 1990, directs the Commission to "ensure that
interstate and intrastate telecommunications relay services are
available, to the extent possible and in the most efficient manner, to
hearing-impaired and speech-impaired individuals in the United
States." To that end, the Commission established the TRS Fund to
reimburse TRS providers for the costs of providing interstate
telecommunications relay services. Pursuant to section
64.604(c)(5)(iii)(A) and section 64.601(b) of the Commission's rules,
every provider of interstate telecommunications services and certain
other providers of telecommunications must contribute to the TRS Fund
based upon its end-user revenues.
6. In addition, section 251(e)(1) of the Act directs the Commission to
oversee the administration of telecommunications numbering to ensure
the availability of telephone numbers on an equitable basis. Section
251(e)(2) of the Act requires that "[t]he cost of establishing
telecommunications numbering administration arrangements . . . shall
be borne by all telecommunications carriers on a competitively neutral
basis as determined by the Commission." In carrying out this statutory
directive, the Commission adopted section 52.17 of its rules, which
requires, among other things, that all telecommunications carriers and
interconnected VoIP providers contribute toward the costs of numbering
administration on the basis of their end-user telecommunications
revenues for the prior calendar year.
7. 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.
8. ADMA is a Florida-based company that has provided telecommunications
services since 2001. ADMA currently provides telecommunications
services as a provider of prepaid calling cards for calling to
international destinations. ADMA also sells the telecommunications
services of a related entity, Business Telecommunications Services,
Inc. ("BTS"), owned by ADMA's two shareholders. ADMA obtains
telecommunications switching capacity from BTS, and also receives
administrative support from BTS.
9. On June 2, 2006, the Bureau issued a letter of inquiry ("LOI"),
initiating an investigation into whether ADMA may have violated the
Act and the Commission's rules pertaining to registration, payment of
regulatory obligations, and other related requirements. The LOI
directed ADMA to provide certain specified documents and information.
In its response to the LOI, ADMA admits that it failed to register
with the Commission. ADMA's response also demonstrated that it failed
to timely file quarterly and annual worksheets due in February 2006,
April 2006, and May 2006. Similarly, the carrier states it failed to
contribute to the USF despite exceeding the de minimis threshold from
January 2006 through October 2006. ADMA similarly failed to timely and
fully remit its TRS obligation in 2005 and 2006 as well as
contributions to the NANP administration cost recovery mechanisms.
Finally, ADMA provides no evidence that it held an international
section 214 authorization before providing international
telecommunications services.
10. Two months after receiving the LOI, in August 2006, ADMA for the first
time began to comply with the Commission's contribution and revenue
filing regulations by filing a Form 499. ADMA filed its Form 499-A for
2005 revenue on August 1, 2006, four months after the due date of
April 1, 2006. ADMA then filed two 499-Qs on August 2, 2006 that were
due on May 1, 2006 and August 1, 2006. ADMA eventually paid its USF,
TRS, and NANP debts. Shortly after filing its forms, ADMA requested
that the Commission consider settling the investigation with a consent
agreement, and on December 8, 2006, ADMA and the Bureau executed an
agreement to toll the statute of limitations for any potential
violations related to the Bureau's investigation. The Bureau and ADMA
met in person and had numerous telephone conversations, but were
unable to agree on a settlement. ADMA insists the violations are small
infractions of the rules and regulations that warrant only a small
voluntary contribution. As discussed below, however, we find that the
violations are serious, egregious, and warrant a significant
forfeiture.
III. DISCUSSION
11. 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.
12. The fundamental issues in this case are whether ADMA apparently
violated the Act and the Commission's rules by willfully or repeatedly
(1) failing to register and submit annual and quarterly worksheets
pursuant to sections 54.711 and 64.1195 of the Commission's rules; (2)
failing to timely and fully remit payments to the Universal Service
Fund, TRS Fund, and cost recovery mechanism for NANP administration;
and (3) failing to obtain an international section 214 authorization
to provide international telecommunications services pursuant to
section 63.18 of the Commission's rules. We answer these questions
affirmatively. Based on the preponderance of the evidence, we conclude
that ADMA is apparently liable for a forfeiture of $672,541 for
apparently willfully or repeatedly violating sections 214, 225,
251(e)(2), and 254 of the Act and sections 1.1157, 52.17(a),
54.706(a), 54.711(a), 63.18, 64.604(c)(5)(iii)(A)-(B), and 64.1195 of
the Commission's rules.
A. ADMA Apparently Failed to Register with the Commission
13. We conclude that ADMA has apparently violated section 64.1195(a) of
our rules by failing to register with the Commission from the time it
began providing telecommunications services until August 1, 2006.
ADMA's failure to register constitutes an apparent violation of a
vital Commission rule. Section 64.1195(a) unambiguously requires that
all carriers that provide, or plan to provide, interstate
telecommunications services register with the Commission by submitting
specified information. Although ADMA has provided interstate
telecommunications services for several years, it failed to register
in accordance with section 64.1195(a) until August 1, 2006, when it
filed a Form 499-A reporting 2005 revenue. As a result of its
misconduct, ADMA operated for a significant period of time without
participation in any of the programs tied to registration. As an
interstate telecommunications carrier, ADMA had a clear and
affirmative duty to satisfy this federal obligation.
14. We view ADMA's apparent failure to register for a significant period
as a serious dereliction of its responsibilities under the Act and our
rules. A carrier's compliance with the Commission's registration
requirement is critical to the administration of the USF and other
programs, and to fulfilling Congress' objectives in section 254(d) of
the Act. As we noted above, a carrier's duty to register upon entry,
or anticipated entry, into interstate telecommunications markets is
essential to the fulfillment of the USF and other regulatory program
missions because registration identifies the company to the various
program administrators and brings the company within the purview and
oversight of those administrators. If a carrier never identifies
itself as a telecommunications provider by properly registering under
the Commission's rules, then neither the Commission nor the various
program administrators can ascertain whether that carrier has
fulfilled its regulatory obligations, including the requirement that
carriers file Worksheets and contribute to USF and other regulatory
programs. Moreover, the program administrators have no basis upon
which to invoice the carrier for contributions. A telecommunications
carrier that fails to register thus can operate outside of the
Commission's oversight and evade its federal obligations to contribute
toward the vital programs linked to registration.
15. The impact of a carrier's failure to register is no less severe where,
as here, that carrier ultimately registers with the Commission.
Although ADMA registered on August 1, 2006, ADMA delayed its
registration for a substantial period of time and took no action until
receiving a letter of inquiry from the Bureau. The Commission has
repeatedly stated that post-investigative corrective measures to
address a violation do not eliminate a licensee's responsibility for
the period during which the violation occurred. Based on a
preponderance of the evidence, therefore, we find that ADMA apparently
has violated section 64.1195(a) of the Commission's rules by willfully
failing to register until August 1, 2006.
B. ADMA Apparently Failed to Submit Telecommunications Reporting
Worksheets
16. We also conclude that ADMA apparently has violated sections 54.711(a)
and 64.604(c)(5)(iii)(B) of the Commission's rules by willfully and
repeatedly failing to file certain Telecommunications Reporting
Worksheets, on a timely basis, until August 1, 2006. As discussed in
the previous section, ADMA did not file its 2006 Form 499-A until
August 1, 2006, four months after it was due. The Bureau's review of
ADMA's various late-filed Form 499s shows that until late in 2005,
ADMA's annual USF contributions would qualify it for the de minimis
exemption because its annual contribution amounts would have been less
than $10,000. ADMA should have begun filing quarterly Worksheets when
it determined its projected or actual revenues would no longer qualify
it as de minimis in late 2005. Accordingly, ADMA's first failure to
file a quarterly Worksheet for purposes of the USF occurred on
February 2006, when it should have reported projected collected
revenue for the second quarter of 2006. ADMA did not, however, file
any quarterly Worksheets until August 2, 2006, when ADMA filed its
late report for the May 2006 quarterly report in response to our
investigation. ADMA also filed its August 2006 quarterly worksheet one
day late and has never filed its February 2006 quarterly worksheet.
17. Sections 54.711(a) and 64.604(c)(5)(iii)(B) of the Commission's rules
clearly establish a carrier's obligation to file periodic
Telecommunications Reporting Worksheets. A carrier's failure to file
these Worksheets as required has serious implications for the USF and
other programs. As discussed above, the filing of a Telecommunications
Reporting Worksheet prompts a determination of liability for, and
subsequent billing and collection of, payments by the administrators
of the Universal Service Fund and other regulatory programs. With
regard to the federal universal service program in particular, the
failure of a carrier such as ADMA to abide by its federal filing
obligation has a direct and profound detrimental impact by removing
from the base of USF contributions telecommunications revenues that
otherwise should be included, thereby shifting to compliant carriers
additional economic burdens associated with the federal universal
service program. Consequently, a carrier's failure to file required
Worksheets frustrates the very purpose for which Congress enacted
section 254(d) - to ensure that every interstate carrier "contribute,
on an equitable and nondiscriminatory basis, to the specific,
predictable, and sufficient mechanisms established by the Commission
to preserve and advance universal service." Viewed in this context,
the Telecommunications Reporting Worksheet is not only an
administrative tool, but a fundamental and critical component of the
Commission's Universal Service program.
18. ADMA as a provider of prepaid calling cards and a reseller of
telecommunications services must file worksheets with USAC reporting
accurate historical and projected telecommunications revenue. ADMA did
not file the required reports on February 2006, April 2006, and May
2006. Based on a preponderance of the evidence, we find that ADMA
apparently violated sections 52.17(b), 54.711(a) and
64.604(c)(5)(iii)(B) of the Commission's rules by willfully and
repeatedly failing to file certain Telecommunications Reporting
Worksheets.
C. ADMA Apparently Failed To Make Universal Service Fund Contributions
19. We next conclude that ADMA has apparently violated section 254(d) of
the Act and section 54.706 of the Commission's rules by willfully and
repeatedly failing to contribute fully and timely to the universal
service support mechanisms. Section 54.706(c) of the Commission's
rules unambiguously directs that "entities [providing] interstate
telecommunications to the public . . . for a fee . . . contribute to
the universal service support mechanisms." ADMA was required pursuant
to section 54.706(b) of the Commission's rules to contribute to
universal service mechanisms based upon its projected collected
end-user telecommunications revenue filed on its quarterly Worksheets.
20. ADMA has demonstrated a pattern of failing to fulfill its contribution
obligations by failing to make universal service payments. According
to USAC, ADMA's first USF payment was received by the fund
administrator on November 6, 2006. The record is clear that at least
between January 2006 and October 2006, however, that ADMA failed to
make any required payments to USAC on 10 separate occasions and should
have paid a total of $23,670 in USF contributions. The violations
continued with each subsequent day on which it failed to make full
payment. Based on a preponderance of the evidence, we find that ADMA
has apparently violated section 254(d) of the Act and section 54.706
of the Commission's rules by willfully and repeatedly failing to
contribute fully and timely to the USF from January 2006 to October
2006.
D. ADMA Apparently Failed to Make TRS Contributions
21. We also find that ADMA has apparently violated section 225 of the Act
and section 64.604(c)(5)(iii)(A) of the Commission's rules by
willfully and repeatedly failing to contribute fully to the TRS Fund.
As an interstate telecommunications carrier, ADMA was obligated to
contribute to the TRS Fund on the basis of its interstate end-user
telecommunications revenues reported on its annual Worksheet. A
carrier's contribution to the TRS Fund is based upon its subject
revenues for the prior calendar year and a contribution factor
determined annually by the Commission. Subject carriers must make TRS
contributions on an annual basis, with certain exceptions that are not
applicable to ADMA. Because ADMA failed to register until August 2006,
it was not timely billed for TRS obligations in 2005 or 2006. However,
the TRS payments were still due on time in those calendar years.
22. The record indicates that ADMA's revenues required it to pay a total
of $121,412 in 2005 and 2006 TRS obligations but ADMA did not make any
TRS contributions until December 19, 2006, when it made payments
totaling $79,020.63. We therefore conclude based on a preponderance of
the evidence that ADMA has apparently violated section 225 of the Act
and section 64.604(c)(5)(iii)(A) of the Commission's rules by
willfully and repeatedly failing to make full and timely TRS
contributions for its 2005 and 2006 assessments.
E. ADMA Apparently Failed to Make Timely NANP Administration
Contributions
23. We further find that ADMA has apparently violated section 251(e)(2) of
the Act and section 52.17(a) of the Commission's rules by willfully
and repeatedly failing to make timely contributions toward the costs
of number administration. As a telecommunications carrier, ADMA was
obligated to contribute to NANP administration cost recovery
mechanisms on the basis of its end-user telecommunications revenues
reported on its Form 499-A annual Worksheet during the period covered
by this NAL.
24. The record demonstrates that ADMA failed to timely remit its NANP
payment in 2005, 2006, and 2007. Because ADMA did not register until
August 2006, NANPA did not invoice the company until October 12, 2006.
The due date on the invoice was November 12, 2006, yet ADMA failed to
make any payments until February 1, 2007. Additionally, NANPA invoiced
ADMA for 2007 NANP administration payments on June 12, 2007, with
payment due on July 12, 2007. Because ADMA did not file its 2005 499-A
until July 2, 2007, ADMA was not invoiced for 2005 NANP administration
payments until October 12, 2007. The fact that ADMA was not invoiced
until October of 2007 does not negate the fact that the 2005 NANP
administration payments were due in 2005. The 2007 and 2005 amounts
were not paid by ADMA until April 14, 2008. The 2007 payment was over
eight months late and the 2005 payment was years late. We therefore
conclude based on a preponderance of the evidence that ADMA has
apparently violated section 251(e)(2) of the Act and section 52.17(a)
of the Commission's rules by willfully and repeatedly failing to make
timely NANP administration contributions on three occasions.
F. ADMA Apparently Failed to Obtain an International Section 214
Authorization
25. We also find that ADMA has apparently violated section 214(a) of the
Act and section 63.18 of the Commission's rules by willfully failing
to apply for and obtain authorization from the Commission to provide
international telecommunications service. 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. Part 63 of the Commission's rules requires that
a carrier seek and obtain Commission approval prior to providing
international service. The Commission has explained that the
international section 214 review process enables the Commission to
review applications for risks to competition, particularly in
situations where the applicant has an affiliation with a foreign
carrier with market power on the foreign end of the route that may be
able to leverage that market power to discriminate against U.S.
competitors to the detriment of U.S. consumers. The review process
also includes consultation with Executive Branch agencies regarding
national security, law enforcement, foreign policy and trade concerns
that may be unique to the provision of international service.
26. For these reasons, section 63.18 of the Commission's rules therefore
requires that "any party seeking authority pursuant to section 214 . .
. for the provision of common carrier communications services between
the United States, its territories or possessions, and a foreign point
shall request such authority by formal application." Section
63.18(e)(2) clearly assigns the obligation to apply for and obtain
section 214 authorization before providing international service to
resellers by establishing specific requirements for parties "applying
for authority to resell the international services of authorized U.S.
common carriers subject to [section 63.23] of this part," which, in
turn, identifies the conditions that apply to "carriers authorized to
resell the international services of other authorized carriers."
27. Notwithstanding these explicit requirements, ADMA provided
international service without an authorization pursuant to section 214
from the Commission until January 30, 2007. In its annual
Telecommunications Reporting Worksheets for 2005, 2006, and 2007, ADMA
reports international revenues for toll services, yet the Commission
has no record that ADMA applied for or obtained section 214
authorization prior to January 30, 2007. In an LOI to ADMA the Bureau
asked for all authorizations and jurisdictions where ADMA provides
telecommunications service. In response, ADMA provided a copy of an
international section 214 authorization for Business
Telecommunications Services, Inc. (BTS) that the Commission granted on
October 19, 2001. ADMA was not a wholly-owned subsidiary of BTS at the
time the Commission granted BTS's request for an international section
214 authorization, however, and could not have operated under BTS's
authorization until January 30, 2007, when it became a wholly owned
subsidiary of BTS. Prior to January 30, 2007, therefore, ADMA operated
without Commission-granted international section 214 authority. ADMA
has provided us with no other evidence that it held an international
section 214 authorization at any time. We therefore conclude based on
a preponderance of the evidence that ADMA has apparently willfully
violated section 214 of the Act and section 63.18 of the Commission's
rules.
G. Proposed Forfeiture Amount
28. 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."
29. ADMA failed to register with the Commission until August 1, 2006, in
apparent violation of section 64.1195(a) of our rules. The
registration and filing of Telecommunications Reporting Worksheets are
fundamental to the implementation of our central repository of
carriers and to the administration of multiple statutorily derived
programs - including the Universal Service Fund. Where, as here, a
carrier ignores its obligations by wholly failing to register for a
long period - thereby affecting the time and manner in which these
important federal programs are funded - it undermines the programs and
thwarts the purposes for which Congress and the Commission established
them.
30. We have previously established $100,000 as the base forfeiture for a
carrier's failure to register with the Commission. We explained that
"[t]his egregious behavior strikes at the core of our ability to
implement and enforce the Act and our rules effectively, thus
warranting a substantial forfeiture." A carrier that fails to register
hampers "efficient and effective Commission enforcement by delaying
detection of, and action against, its behavior . . . [and] imposes a
substantial burden on the Commission, which can only identify such
carriers through compliance review programs that require significant
amounts of staff time and resources." Taking into account all of the
factors enumerated in section 503(b)(2)(E) of the Act, we conclude
that this same reasoning accurately describes the impact of ADMA's
misconduct, and that a proposed forfeiture of $100,000 is therefore
warranted.
31. ADMA also should have filed its Telecommunications Reporting
Worksheets. ADMA failed to file an annual Telecommunications Worksheet
which was due April 1, 2006, until August 1, 2006. Similarly, it
failed to file quarterly Worksheets due on February 1, 2006, and May
1, 2006, until August 2, 2006. A contributor's obligation to file
these Worksheets is directly linked to, and thus has serious
implications for, administration of the USF, TRS, NANP, and LNP
programs. ADMA has thus delayed payment into these programs and has
shifted to compliant contributors and their customers the economic
costs associated with the administration of these programs. As noted
above, in the past, the Commission has proposed a forfeiture of
$50,000 for each failure to file a Worksheet or for filing an
inaccurate quarterly or annual Worksheet. Accordingly, we find that
ADMA is apparently liable for a $150,000 forfeiture for failure to
timely file the February 1, 2006, April 1, 2006, and May 1, 2006 Forms
499.
32. We also found that ADMA failed to make payments to the USF from
January 2006 to October 2006. Nonpayment of universal service
contributions is an egregious offense that bestows on delinquent
entities an unfair competitive advantage by shifting to compliant
contributors the economic costs and burdens associated with universal
service. An entity's failure to make required universal service
contributions frustrates Congress' policy objective in section 254(d)
of the Act to ensure the equitable and non-discriminatory distribution
of universal service costs among all telecommunications providers.
Generally, the Commission has established a base forfeiture amount of
$10,000 for each month in which a contributor has failed to fully pay
required universal service contributions and $20,000 for each month in
which a contributor has failed to make any required universal service
contribution, plus an upward adjustment based on one-half of the
company's approximate unpaid contributions. In addition, consistent
with other similar recent cases, and for the reasons explained
therein, we treat the failures to pay universal service and other
obligations as continuing violations.
33. Accordingly, consistent with those recent NALs, as well as our
previous statements that nonpayment of USF, TRS, and other
contributions can constitute continuing violations, and to effectively
deter companies from violating our rules governing payment into the
USF, TRS, and other programs, our forfeiture calculation today will
reflect not only the violations that began within the last twelve
months but all such continuing violations. As in previous orders, we
warn contributors that if the forfeiture calculation methodology
described here does not adequately deter violations of our rules, we
will consider larger penalties within the scope of our authority,
including substantially higher forfeitures and revocation of a
provider's operating authority.
34. As a result, we propose a forfeiture of $200,000 for ADMA's willful or
repeated failure to contribute fully and timely to the USF on ten
occasions between January 2006 and October 2006. Moreover, consistent
with our approach for assessing liability for apparent USF violations,
and taking into account all the factors enumerated in section
503(b)(2)(E) of the Act, we also propose an upward adjustment of
$11,835, approximately one-half of the largest amount of ADMA's unpaid
USF contributions due to USAC and the FCC, to our proposed base
forfeiture. We therefore issue a total proposed forfeiture of $211,835
against ADMA for its apparent willful or repeated failures to
contribute fully to the USF.
35. We also find that ADMA has failed to make TRS contributions in 2005
and 2006. Where a provider fails to satisfy its TRS obligations, it
thwarts the purpose for which Congress established section 225(b)(1)
of the Act and its implementing regulations -- to ensure that
telecommunications relay services "are available to the extent
possible and in the most efficient manner, to hearing-impaired and
speech-impaired individuals in the United States." The Commission has
generally established a base forfeiture amount of $10,000 for each
instance in which a contributor fails to make required TRS
contributions and an upward adjustment based on one-half of the
company's approximate unpaid contributions at the time the
investigation was initiated. Thus, for the reasons described above, we
propose a $20,000 forfeiture for ADMA's failure to pay its TRS Fund
contributions in 2005 and 2006 and an upward adjustment of $60,706,
approximately one-half of ADMA's unpaid TRS Fund contributions. We
therefore issue a total proposed forfeiture of $80,706 against ADMA
for its apparent willful or repeated failure to contribute fully to
the TRS Fund.
36. We also concluded that ADMA apparently failed to make timely
contributions toward NANP administration cost recovery mechanisms on
the basis of its actual end-user telecommunications revenues since
2005. As with universal service and TRS, the failure of carriers to
make required NANP administration contributions for an extended period
of time severely hampers the Commission's ability to ensure that the
cost of establishing telecommunications numbering administration
arrangements is "borne by all telecommunications carriers on a
competitively neutral basis" as Congress envisioned. The Commission
has generally established a base forfeiture amount of $10,000 for each
instance in which a contributor fails to make required contributions
to the NANP administration cost recovery mechanisms. Consequently, and
consistent with precedent, we find that ADMA is apparently liable for
the base forfeiture of $30,000 for failing to pay contributions toward
NANP administration cost recovery mechanisms for 2005, 2006, and 2007.
37. Finally, we conclude that ADMA 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.
ADMA apparently operated as an international telecommunications
service provider from 2003 until January 30, 2007 without
authorization from the Commission. We therefore find that this
apparent violation of the Act and the Commission's rules was
continuing. 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 ADMA that it was required to obtain
section 214 authority from the Commission to provide international
telecommunications service.
38. 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 ADMA's
failure to obtain section 214 authority from the Commission prior to
providing international telecommunications service was also egregious.
We view ADMA's apparent failure to obtain section 214 authority as
serious a dereliction of its responsibilities under the Act and our
rules as its failure to register pursuant to section 64.1195(a) of the
Commission's rules. Just as a telecommunications carrier that fails to
register can operate outside of the Commission's oversight and evade
its federal obligations to contribute toward the vital programs linked
to registration, international telecommunications carriers that fail
to obtain section 214 authority may endanger important pubic interest
considerations involving national security, law enforcement, foreign
policy and trade policy. 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 ADMA. 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, consistent
with prior precedent for entities failing to receive prior
authorization from the International Bureau, that a proposed
forfeiture of $100,000 is warranted for ADMA's apparent willful
repeated failure to obtain section 214 authority from the Commission
prior to providing international telecommunications service.
IV. CONCLUSION
39. In light of the seriousness, duration and scope of the apparent
violations, we find that a proposed forfeiture in the amount of
$672,541 is warranted. As discussed, this proposed forfeiture amount
includes a total proposed forfeiture of $100,000 for ADMA's failure to
register with the Commission, a total proposed forfeiture of $150,000
for ADMA's failure to file Telecommunications Reporting Worksheets, a
total proposed forfeiture of $211,835 for ADMA's failure to pay its
USF obligations, a total proposed forfeiture of $80,706 for ADMA's
apparent failure to make TRS contributions, a total proposed
forfeiture of $30,000 for ADMA's apparent failure to make NANP
contributions, and a total proposed forfeiture of $100,000 for ADMA's
apparent failure to obtain an international section 214 authorization
prior to commencing international service.
V. ORDERING CLAUSES
40. 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, that ADMA
Telecom, Inc. is hereby NOTIFIED of its APPARENT LIABILITY FOR A
FORFEITURE in the amount of $672,541 for willfully and repeatedly
violating the Act and the Commission's rules.
41. 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, ADMA Telecom, Inc. SHALL PAY the full
amount of the proposed forfeiture or SHALL FILE a written statement
seeking reduction or cancellation of the proposed forfeiture.
42. 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. ADMA will also send electronic
notification on the date said payment is made to
Hillary.DeNigro@fcc.gov.
43. 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. ADMA also will e-mail an
electronic copy of its response to Hillary.DeNigro@fcc.gov.
44. 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.
45. 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 Steven A. Augustino, Counsel for ADMA Telecom, Inc.,
Kelley Drye & Warren LLP, Washington Harbor, Suite 400, 3050 K Street,
NW, Washington, D.C. 20007-5108.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
47 U.S.C. S:S: 214, 225, 251(e)(2), 254.
See 47 U.S.C. S: 214; see also 47 C.F.R. S:S: 1.1157, 52.17(a), 54.706(a),
54.711(a), 63.18, 64.604(c)(5)(iii)(A)-(B), 64.1195.
See, e.g., 47 U.S.C. S: 151.
See Implementation of the Subscriber Carrier Selection Changes Provisions
of the Telecommunications Act of 1996, Third Report and Order and Second
Order on Reconsideration, 15 FCC Rcd 15996, 16024-26 P:P: 59-62 (2000)
("Carrier Selection Order").
See FCC Form 499-A Telecommunications Reporting Worksheet - Annual
Filing, available at http://www.fcc.gov/Forms/Form499-A/499a-2008.pdf
(February 2008); see also 47 C.F.R. S: 64.1195.
See Federal-State Joint Board on Universal Service, Petition for
Reconsideration filed by AT&T, Report and Order and Order on
Reconsideration, 16 FCC Rcd 5748 (2001) ("Quarterly Reporting Order").
The first Quarterly Worksheet, reporting revenue data from the first
quarter of 2001 (January 1 through March 31, 2001) was due May 11, 2001;
thereafter, contributors report their revenues for the prior quarter by
the beginning of the second month in each quarter (i.e., February 1, May
1, August 1, and November 1). See Quarterly Reporting Order, 16 FCC Rcd at
5755 P: 19 & n.32. See also FCC Form 499-Q Telecommunications Reporting
Worksheet - Quarterly Filing for Universal Service Contributors,
available at http://www.fcc.gov/Forms/Form499-Q/499q.pdf (February 2008)
("Quarterly Worksheet"). Upon submission of a Form 499-A registration, the
contributor is issued a filer identification number by USAC, which is then
associated with further filings by the company and is used to track the
provider's contributions and invoices.
See 47 U.S.C. S:S: 225(d)(3), 254(d). In 1999, to streamline the
administration of the programs and to ease the burden on regulatees, the
Commission consolidated the information filing requirements for multiple
telecommunications regulatory programs into the annual Telecommunications
Reporting Worksheet. See 1998 Biennial Regulatory Review - Streamlined
Contributor Reporting Requirements Associated with the Administration of
Telecommunications Relay Services, North American Numbering Plan, Local
Number Portability, and Universal Service Support Mechanisms, Report and
Order, 14 FCC Rcd 16602 (1999). The next year, the Commission revised the
Telecommunications Reporting Worksheet slightly to collect the additional
information necessary to achieve its goal of establishing a central
repository for interstate telecommunications providers by the least
provider-burdensome method. Carrier Selection Order, 15 FCC Rcd at 16026
P:P: 63-64.
47 C.F.R. S: 54.701(a).
See 47 C.F.R. S: 54.709(a); "Telecommunications Carrier Registration
Information Now Available Online," Public Notice, DA 01-2465 (rel. Oct.
29, 2001). The Commission modified its rules on contributions to the
universal service fund. See 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 (2002) ("Interim Contribution Order"). As of
April 1, 2003, USAC bases a contributor's universal service obligation on
the contributors' projected collected revenue rather than its historic
gross-billed revenue. Interim Contribution Order, 17 FCC Rcd at 24969-74
P:P: 29-39. Individual universal service contribution amounts that are
based upon quarterly filings are subject to an annual true-up. See
Quarterly Reporting Order, 16 FCC Rcd 5748 (2001); 47 C.F.R. S: 54.709(a).
47 C.F.R. S: 64.604(c)(5)(iii)(B).
See, e.g., Interim Contribution Order, 17 FCC Rcd at 24971-72 P: 35;
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, 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); Changes to the Board of Directors of the National Exchange
Carrier Association, Inc., Federal-State Board on Universal Service,
Second Order on Reconsideration in CC Docket No. 97-21, 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 2006 Universal Service Contribution Factor," Public Notice,
21 FCC Rcd 2379 (Wireline Comp. Bur. 2006) ("Contribution payments are due
on the date shown on the invoice."). See also 47 C.F.R. S: 54.713(b)
(noting that if a USF "contributor fails to make full payment on or before
the date due date of . . . the monthly invoice provided by the
Administrator, the payment is delinquent").
See "TRS Resources," available at:
http://www.neca.org/source/NECA_Resources_216.asp. 17 July 2007.
See 47 C.F.R. S: 54.711(a) ("The Commission shall announce by Public
Notice published in the Federal Register and on its website the manner of
payment and the dates by which payments must be made."). See, e.g.,
"Proposed Third Quarter 2003 Universal Service Contribution Factor,"
Public Notice, 18 FCC Rcd 11442, 11445 (Wir. Comp. Bur. 2003)
("Contribution payments are due on the date shown on the [USAC]
invoice."). The Act and our rules, however, do not condition payment on
receipt of an invoice or other notice from USAC or NECA. See 47 U.S.C. S:
254(d); 47 C.F.R. S:S: 54.706(b) and 64.604(c)(5)(iii)(A). A provider that
does not file may not receive an invoice from USAC, but is nonetheless
required to contribute to the universal service fund, unless its revenues
are considered de minimis. See Globcom, Inc., Notice of Apparent
Liability, 18 FCC Rcd 19893, 19896 P: 5 n. 22 (2003) ("Globcom NAL")
(subsequent history omitted). The instructions for the Worksheet include
tables for contributors to determine their annual contributions. Providers
whose annual contribution is less than $10,000 are considered to be de
minimis and exempted from contributing to the USF. 47 C.F.R. S: 54.708.
See 47 C.F.R. S: 54.713.
47 U.S.C. S: 254(d).
47 C.F.R. S: 54.706(b). Since April 1, 2003, contributions have been based
on a contributor's projected, rather than historical, revenues. Id. See
also Interim Contribution Order, 17 FCC Rcd at 24969-74 P:P: 29-39.
See 47 U.S.C. S: 254(d) ("Any other provider of interstate
telecommunications may be required to contribute to the preservation and
advancement of universal service if the public interest so requires.").
47 U.S.C. S: 225(b)(1).
See Telecommunications Relay Services and the Americans with Disabilities
Act of 1990, Third Report and Order, 8 FCC Rcd 5300, 5301 P: 7 (1993).
Telecommunications relay services enable persons with hearing and speech
disabilities to communicate by telephone with voice-telephone users. Such
services provide telephone access to a significant number of Americans
who, without it, might not be able to make calls to or receive calls from
voice-telephone users. See Telecommunications Relay Services and
Speech-to-Speech Services for Individuals with Hearing and Speech
Disabilities, Report and Order, 15 FCC Rcd 5140, 5143 P: 5 (2000).
47 C.F.R. S:S: 64.604(c)(5)(iii)(A), 64.601(b).
47 U.S.C. S: 251(e)(1).
Id.
47 C.F.R. S: 52.17(a). See Telephone Number Requirements for IP-Enabled
Services Providers; Local Number Portability Porting Interval and
Validation Requirements; IP-Enabled Services; Telephone Number
Portability; Numbering Resource Optimization, WC Docket Nos. 07-243,
07-244, 04-36, CC Docket Nos. 95-116, 99-200, Report and Order,
Declaratory Ruling, Order on Remand, and Notice of Proposed Rulemaking, 22
FCC Rcd 19531 (2007) (VoIP LNP Order).
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 ADMA Telecom, Inc. to the Enforcement Bureau's June 2,
2006 Letter of Inquiry, dated July 13, 2006, at 3 P: 4 ("LOI Response").
See id. at 1.
See id.
Id.
See Letter from Hillary DeNigro, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Mr. Raphael Olloqui, Chief Executive
Officer, ADMA Telecom, Inc., dated June 2, 2006 ("LOI").
See Supplemental Response of ADMA Telecom, Inc. to the Enforcement
Bureau's June 2, 2006 Letter of Inquiry, dated August 1, 2006, at 3
("Supplemental LOI Response"). .
Supplemental LOI Response at 3.
See Supplemental LOI Response at 4.
See email from Michelle Tilton, USAC, to Elizabeth Mumaw, Assistant
Division Chief, Investigations and Hearings Division, Enforcement Bureau,
FCC, dated February 26, 2007 ("Tilton Email")..
TRS contributions are due annually on July 26. NANPA payment is due
annually on July 12.
December 8, 2006, Tolling Agreement between Andres Proano, Chief Financial
Officer, ADMA, and Kris Anne Monteith, Chief, Enforcement Bureau, Federal
Communications Commission. ADMA and the Bureau have since extended the
termination date of the Tolling Agreement through January 15, 2009. See
November 21, 2008 Tolling Agreement between Andres Proano, Chief Financial
Officer, ADMA, and Hillary, S. DeNigro, Division Chief, Investigations and
Hearings Division, Enforcement Bureau, Federal Communications Commission.
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 (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:S: 214, 225, 251(e)(2), 254(d); 47 C.F.R. S:S: 1.1157,
52.17(a), 54.706(a), 54.711(a), 63.18, 64.604(c)(5)(iii)(A)-(B), 64.1195.
The Commission has stated that calling card services are
telecommunications services. See AT&T Corp. Petition for Declaratory
Ruling Regarding Enhanced Prepaid Calling Card Services, Order and Notice
of Proposed Rulemaking, 20 FCC Rcd 4826, 4826 P: 4(2005). Prepaid card
providers are compelled to contribute based upon reported interstate and
international calling revenue. See Regulation of Prepaid Calling Card
Services, Declaratory Ruling and Report and Order, 21 FCC Rcd 7290, 7304
P: 39 (2006)(asserting that each prepaid calling card provider must
certify the percentages of total prepaid calling card revenue that are
interstate and international, and therefore subject to federal universal
service assessments). Thus, providers of prepaid calling card services are
obligated to contribute to the same funds as other telecommunications
providers. The failures both to report revenues from prepaid calling cards
and to contribute based upon interstate and international revenues from
prepaid calling cards, would constitute a violation of our rules.
47 C.F.R. S: 64.1195. The Commission adopted the registration requirement
in section 64.1195(a) after finding that such a requirement would enable
it to better monitor the entry of carriers into the interstate
telecommunications market and any associated increases in slamming
activity, and, among other things, would enhance the Commission's ability
to take appropriate enforcement action against carriers that have
demonstrated a pattern or practice of slamming. See Carrier Selection
Order, 15 FCC Rcd at 16024 P: 62.
See The Commission's Forfeiture Policy Statement and Amendment of Section
1.80 of the Commission's Rules, Report and Order, 12 FCC Rcd 17087, 17099
P: 22 (1997) ("Forfeiture Policy Statement"), recon. denied, 15 FCC Rcd
303 (1999) ("The Commission expects, and it is each licensee's obligation,
to know and comply with all of the Commission's rules.").
AT&T Wireless Services, Inc., Forfeiture Order, 17 FCC Rcd 21866, 21870-71
P:P: 12-14 (2002); America's Tele-Network Corp., Order of Forfeiture, 16
FCC Rcd 22350, 22355 P: 15 (2001); Coleman Enters., Inc. d/b/a/ Local Long
Distance, Inc., Order of Forfeiture, 15 FCC Rcd 24385, 24388 P: 8 (2000).
47 C.F.R. S:S: 54.711(a), 64.604(c)(5)(iii)(B).
47 C.F.R. S: 54.708. See Form 499-Q Instructions at 4 (available at
http://www.fcc.gov/Forms/Form499-Q/499q.pdf ) ("Telecommunications
carriers and other telecommunications providers should complete the table
contained in Figure 1 to determine whether they meet the de minimis
standard. . . . Telecommunications providers that do not file this
worksheet because their contributions would be de minimis should retain
Figure 1 and documentation for their contribution base revenues for three
years and may be required to provide it to the FCC, the FCC's data
collection agent or [USAC] upon request").
As noted above, the rules still require carriers such as ADMA to file
annual worksheets for purposes of other regulatory programs, such as the
TRS fund.
47 U.S.C. S: 254(d).
Failure to file may constitute a continuing violation. See Compass Global,
Inc., Notice of Apparent Liability for Forfeiture, 23 FCC Rcd 6125 P: 29
(2008) (holding that Compass Global's apparent failure to file constituted
"continuing violations for which the statute of limitations for forfeiture
is tolled until the violation is cured") ("Compass Global NAL"); Telerite
Corp,, Notice of Apparent Liability for Forfeiture and Order, 23 FCC Rcd
7231 at P: 30 (2008) (stating that failures to file accurate reports
constitute "continuing violations for which the statute of limitations for
forfeiture does not begin to run until the violation is cured"); VCI
Company, Notice of Apparent Liability for Forfeiture and Order, 22 FCC Rcd
15933, 15940 P: 20 (2007) (holding that failure to file accurate Form 497s
constitutes a continuing violation) ("VCI NAL").
47 U.S.C. S: 254(d); 47 C.F.R. S: 54.706(c).
47 C.F.R. S: 54.706(c).
Id. S: 54.706(b).
LOI Supplemental Response at inquiry 10. ADMA first filed revenue
information on August 1, 2006 and states it will pay all invoiced USF
amounts going forward.
See Globcom, Inc., Order of Forfeiture, 21 FCC Rcd 4710, 4723 P: 35 n.105
(2006) ("Globcom Forfeiture Order") ("Each failure to pay the amount due
each month constituted a violation that continued for more than 10
days."); Telerite Corp., Notice of Apparent Liability for Forfeiture and
Order, 23 FCC Rcd 7231 (2008) at P: 15; Matrix Telecom, Inc., Notice of
Apparent Liability, 15 FCC Rcd. 13544 (2000); Conquest Operator Services
Corp., Order of Forfeiture, 14 FCC Rcd 12518, 12525 P: 16 (1999). See also
Compass Global NAL, 23 FCC Rcd at 6125 P: 33 (stating that nonpayment of
USF and other obligations constitute continuing violations); Global
Crossing North America, Inc., Notice of Apparent Liability for Forfeiture,
23 FCC Rcd 6110 P:P: 25-27 (2008) (finding that apparent failure to make
timely and full payments to the USF constituted continuing violations);
VCI NAL, 22 FCC Rcd at 15933 P: 24 & n.69 (holding that failure to return
excess Lifeline and Link Up support is a continuing violation).
47 U.S.C. S: 225; 47 C.F.R. S: 64.604(c)(5)(iii)(A).
Id. See also 47 C.F.R. S: 64.604(c)(5)(iii)(B) (setting forth methods of
computation and payment of contributions to TRS Fund).
47 C.F.R. S: 64.604(c)(5)(iii)(B).
Id. Under the Commission's rules, each subject carrier must contribute at
least $25 per year, and providers whose annual contributions are less than
$1,200 must pay the entire amount at the beginning of the contribution
period. Otherwise, providers may divide their contributions into equal
monthly payments. Id.
Id. The billing cycle for TRS assessments runs from July 1 to June 30 of
each year, with assessments made based on carriers' reported revenues
information for the corresponding FCC Form 499-A.
Email from Maggie Gillo, NECA to Diana Lee, FCC, dated January 3, 2008
(attaching ADMA account history).
47 U.S.C. S: 251(e)(2); 47 C.F.R. S: 52.17(a).
Id. In particular, contributions to support numbering administration are
based upon a provider's end-user telecommunications revenues for the prior
calendar year and a contribution factor determined annually by the Chief
of the Wireline Competition Bureau, but in no event will be less than $25.
47 C.F.R. S: 52.17(a). NANP administration contributions are due on an
annual basis, with certain exceptions not relevant here.
Email from Heather Bambrough, Welch and Company, to Elizabeth Mumaw,
Investigations and Hearings Division, July 17, 2007.
47 U.S.C. S: 214(a).
47 C.F.R. S: 63.18.
47 U.S.C. S: 214(a).
47 C.F.R. S: 63.01 et. seq.
See 1998 International Biennial Review Order, 14 FCC Rcd at 4914-16 P:P:
14-16; PCIA Forbearance Order, 13 FCC Rcd at 16882-83 P: 50.
See 1998 International Biennial Review Order, 14 FCC Rcd at 4914-15 P: 14;
PCIA Forbearance Order, 13 FCC Rcd at 16882 P: 50.
47 C.F.R. S: 63.18.
Id. S: 63.18(e)(2).
See ADMA Telecom, Inc. 2005 FCC Form 499-A, ADMA Telecom, Inc. 2006 FCC
Form 499-A, ADMA Telecom, Inc. 2007 FCC Form 499-A.
See 47 C.F.R. S: 63.21 (h). A company can provide international service
pursuant to another company's international section 214 authorization if
the former is a wholly-owned subsidiary.
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).
47 U.S.C. S: 503(b)(2)(E). We note that, although many of the apparent
violations at issue here occurred more than one year prior to release of
this NAL, our actions are within the statute of limitations because of the
tolling agreement between ADMA and the Bureau. See infra note 41.
See Telecom House, Inc., Notice of Apparent Liability of Forfeiture and
Order; 20 FCC Rcd 15131 15142 P: 29 (2006) InPhonic, Inc., Notice of
Apparent Liability of Forfeiture and Order, 20 FCC Rcd 13277, 13287 P: 26
(2005); Teletronics, Inc., Notice of Apparent Liability of forfeiture and
Order, 20 FCC Rcd 13291, 13302 P: 30 (2005) ("Teletronics NAL"), consent
decree entered, 22 FCC Rcd 8681 (2007).
See, e.g.,InPhonic, Inc., 20 FCC Rcd at 13287 P: 26.
Id.
See id.
See 47 U.S.C. S: 254(d).
See OCMC, Inc., Order of Forfeiture, 21 FCC Rcd 10479, 10482 P: 10 (2006)
("OCMC Forfeiture Order"); Globcom NAL, 18 FCC Rcd at 19903-19904 P:P:
25-27; Globcom Forfeiture Order, 21 FCC Rcd 4710 at 4721-4724 P: 31-38.
See, e.g., Globcom Forfeiture Order, 21 FCC Rcd at 4722 P: 33; OCMC
Forfeiture Order, 21 FCC Rcd at 10482 P: 10. For similar reasons, we also
apply an upward adjustment for TRS payments based on half of a company's
unpaid contributions. Globcom NAL, 18 FCC Rcd at 19903-19904 P:P: 25-27.
See, e.g. Global Crossing North America, Inc. et al., Notice of Apparent
Liability for Forfeiture, 23 FCC Rcd 6110 P:P: 21-24 (2008) (proposing
$10,518,013 forfeiture for, inter alia, the apparent failure to make
required universal service contributions); Telrite Corp., Notice of
Apparent Liability for Forfeiture and Order, 23 FCC Rcd 7231 (2008)
(proposing $924,212 forfeiture for, inter alia , the apparent failure to
make required universal service contributions); Compass Global, Inc.,
Notice of Apparent Liability for Forfeiture, 23 FCC Rcd 6125 P:P: 34-38
(2008) (proposing $828,613.44 forfeiture for, inter alia, the apparent
failure to make required universal service contributions).
See Globcom Forfeiture Order, 21 FCC Rcd at 4724 P: 38 & n.105.
47 U.S.C. S: 225(b)(1).
See Globcom Forfeiture Order, 21 FCC Rcd at 4721-24 P:P: 31-38.
47 U.S.C. S: 251(e)(2).
Teletronics NAL, 20 FCC Rcd at 13303 P: 35 (2005) (finding that the
carrier was apparently liable for a forfeiture of $10,000 for the
carrier's failure to make its NANP administration contribution).
See, e.g., id.
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.
47 C.F.R. S: 64.1195(a).
See Letter from Steven A. Augustino, Counsel for ADMA Telecom, Inc. to
Elizabeth Mumaw, Assistant Chief, Investigations and Hearings Division,
Enforcement Bureau, FCC, dated Apr. 12, 2007, at Exhibit A (submitting
gross annual revenue on its 2007 Annual Worksheet).
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).
See 47 C.F.R. S: 1.80.
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