Click here for Adobe Acrobat version
Click here for Microsoft Word version
********************************************************
NOTICE
********************************************************
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
*****************************************************************
Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
) File Nos. EB-06-IH-5039,
EB-07-IH-5217
In the Matter of )
NAL/Acct. No. 200832080080
Global Crossing North America, Inc., )
FRN No. 0002-8505-19
Global Crossing Telecommunications, )
Inc., NAL/Acct. No. 200832080081
)
Global Crossing Bandwidth, Inc., and FRN No. 0003-7330-94
)
Budget Call Long Distance, Inc. NAL/Acct. No. 200832080082
)
FRN No. 0003-7330-78
)
)
)
ORDER
Adopted: June 25, 2009 Released: June 25, 2009
By the Commission:
I. INTRODUCTION
1. In this Order, we adopt the attached Consent Decree between the
Federal Communications Commission ("Commission") and Global Crossing
(as defined below). The Consent Decree terminates an investigation and
Notice of Apparent Liability for Forfeiture ("NAL") by the Commission
against Global Crossing for apparent violations of sections 254(d) and
225 of the Communications Act of 1934, as amended (the "Act"), and
sections 54.706(a) and 64.604(c)(5)(iii)(A) of the Commission's rules
by willfully or repeatedly failing to contribute fully and timely to
the Universal Service Fund ("USF") and Telecommunications Relay
Service ("TRS") Fund.
2. The Commission and Global Crossing have negotiated the terms of the
Consent Decree that resolve this matter. A copy of the Consent Decree
is attached hereto and incorporated by reference.
3. After reviewing the terms of the Consent Decree and evaluating the
facts before us, we find that the public interest would be served by
adopting the Consent Decree, which terminates the investigation and
cancels the NAL.
4. In the absence of material new evidence relating to this matter, we
conclude that our investigation raises no substantial or material
questions of fact as to whether Global Crossing possesses the basic
qualifications, including those related to character, to hold or
obtain any Commission license or authorization.
5. Accordingly, IT IS ORDERED that, pursuant to sections 4(i) and 503(b)
of the Communications Act of 1934, as amended, the Consent Decree
attached to this Order IS ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED and the Notice of Apparent Liability for Forfeiture IS
CANCELLED.
7. IT IS FURTHER ORDERED that a copy of this Order and Consent Decree
shall be sent by first class mail and certified mail, return receipt
requested, to Matthew A. Brill, Counsel for Global Crossing North
America, Inc., Global Crossing Telecommunications, Inc., Global
Crossing Bandwidth, Inc., and Budget Call Long Distance, Inc., Latham
& Watkins LLP, 555 Eleventh Street, NW, Washington D.C., 20004-1304.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
) File Nos. EB-06-IH-5039,
EB-07-IH-5217
In the Matter of )
NAL/Acct. No. 200832080080
Global Crossing North America, Inc., )
FRN No. 0002-8505-19
Global Crossing Telecommunications, )
Inc., NAL/Acct. No. 200832080081
)
Global Crossing Bandwidth, Inc., and FRN No. 0003-7330-94
)
Budget Call Long Distance, Inc. NAL/Acct. No. 200832080082
)
FRN No. 0003-7330-78
)
)
)
CONSENT DECREE
Adopted: June 25, 2009 Released: June 25, 2009
By the Commission:
I. INTRODUCTION
1. The Federal Communications Commission ("Commission" or "FCC") and
Global Crossing (as defined below), by their authorized
representatives, hereby enter into this Consent Decree for the purpose
of terminating the Commission's investigations into whether Global
Crossing violated sections 254(d) and 225 of the Communications Act of
1934, as amended (the "Act"), and sections 54.706(a) and
64.604(c)(5)(iii)(A) of the Commission's rules by willfully or
repeatedly failing to contribute fully and timely to the Universal
Service Fund ("USF") and Telecommunications Relay Service ("TRS")
Fund.
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 Commission 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 12.
f. "Effective Date" means the date on which the Commission releases the
Adopting Order.
g. "Global Crossing" or "the Company" means Global Crossing North
America, Inc., Global Crossing Telecommunications, Inc., Global
Crossing Bandwidth, Inc., and Budget Call Long Distance, Inc. and
their predecessors-in-interest and successors-in-interest,
collectively.
h. "Investigation" means the investigation commenced by the Bureau's
Letters of Inquiry to Global Crossing dated March 21, 2007 and June
14, 2007 seeking to determine whether Global Crossing had violated,
among other requirements, Sections 254(d) and 225 of the
Communications Act of 1934, as amended, and sections 54.706(a) and
64.604(c)(5)(iii)(A) of the Commission's rules by willfully or
repeatedly failing to contribute fully and timely to the Universal
Service Fund and Telecommunications Relay Service Fund.
i. "NAL" means the Notice of Apparent Liability for Forfeiture issued
against Global Crossing on April 9, 2008.
j. "Parties" means Global Crossing and the Commission.
k. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
II. BACKGROUND
3. Pursuant to Section 254(d) of the Act and section 54.706 of the
Commission's rules, telecommunications carriers that provide
interstate telecommunications services are required to contribute to
the federal Universal Service Fund ("USF"). Pursuant to Section 225 of
the Act and section 64.604 of the Commission's rules,
telecommunications carriers that provide interstate telecommunications
services are required to contribute to the TRS fund.
4. Global Crossing is the holding company of various telecommunications
companies providing service in the United States. On July 13, 2006,
the Universal Service Administrative Company ("USAC") referred one of
the Global Crossing subsidiaries to the Enforcement Bureau for
investigation concerning alleged failures to fully and timely
contribute to the universal service fund. The Bureau initiated an
investigation by issuing a letter of inquiry to the Company seeking to
determine whether it had violated, among other things, the
requirements contained in the Act and the Commission's rules
concerning payment to the universal service and TRS funds. As a
supplement to its initial referral and following its investigation of
nine other Global Crossing subsidiaries, USAC later referred
additional Global Crossing subsidiaries to the Bureau for
investigation for similar failures. The Bureau then sent a second
letter of inquiry to Global Crossing on June 14, 2007, expanding its
investigation into whether other Global Crossing subsidiaries had
violated the same provisions of the Act and the Commission's rules.
5. At the conclusion of the Bureau's investigation, the Commission
determined that three Global Crossing subsidiaries had apparently
accrued significant delinquent balances owed to the universal service
fund and the TRS fund. As a result, the Commission issued a Notice of
Apparent Liability proposing that Global Crossing pay a forfeiture in
the amount of $10,518,013. The Commission calculated the proposed
forfeiture in accordance with Commission precedent imposing
forfeitures against carriers that failed to make sufficient
contributions to the universal service fund. Consistent with that
precedent, the largest component of the proposed forfeiture in the NAL
related to the total amount Global Crossing owed to the universal
service fund which, at the time the Commission issued the NAL,
exceeded $18,000,000. Following the release of the NAL, Global
Crossing approached the Bureau and requested the Parties consider
resolving the investigation in a Consent Decree. The Bureau agreed and
extended the date by which Global Crossing was required to respond to
the allegations contained in the NAL or pay the proposed forfeiture
amount in order to permit negotiation of terms.
6. After the NAL, Global Crossing promptly paid the entire balance of
outstanding universal service payments that were not subject to a
pending appeal. Global Crossing also disputed many of the allegations
contained in the NAL and proffered information in support of its
arguments. For instance, the NAL alleged that Global Crossing engaged
in a pattern of delinquency demonstrating an intent to circumvent the
Debt Collection Improvement Act ("DCIA") applicable to the Commission
and USAC. Global Crossing has specifically denied this allegation and
provided information in support of its claim that the Company did not
intend to circumvent the DCIA. In addition, Global Crossing also
argues the proposed forfeiture was unreasonably inflated because the
NAL included amounts owed to the universal service fund that should
not have been considered in the forfeiture calculation. These include
a sizable portion of the universal service delinquency that was
subject to a good faith appeal by the Company in which it asserted it
was not required to pay approximately $5,600,000 of the $18,000,000
figure considered in the NAL (the "Pending USAC Appeal"). Global
Crossing also asserts that the amount the NAL considered as owing to
the universal service fund at the time of the NAL included
approximately $2,600,000 in current amounts due but not yet past due
and therefore not properly the basis of any forfeiture calculation.
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 Commission by
incorporation of such provisions by reference in the Adopting Order
without change, addition, modification, or deletion.
8. Jurisdiction. Global Crossing agrees that the Commission 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 Commission releases
the Adopting Order. Upon release, the Adopting Order and this Consent
Decree shall have the same force and effect as any other Order of the
Commission. Any violation of the Adopting Order or of the terms of
this Consent Decree shall constitute a separate violation of a
Commission Order, entitling the Commission to exercise any rights and
remedies attendant to the enforcement of a Commission Order.
10. Admission: Global Crossing admits that it violated Sections 254(d) and
225 of the Act and sections 54.706 and 64.604 of the Commission's
rules by failing to contribute in a timely manner to the federal
Universal Service Fund and the Telecommunications Relay Service fund.
11. Termination of Investigation. In express reliance on the covenants and
representations in this Consent Decree and to avoid further
expenditure of public resources, the Commission agrees to terminate
its investigation and to cancel its NAL. In consideration for the
termination of said investigation and cancellation of the NAL, Global
Crossing agrees to the terms, conditions, and procedures contained
herein, provided that nothing in the Consent Decree or in connection
therewith shall limit Global Crossing's ability to contest any
findings of fact or conclusions of law arising from the Pending USAC
Appeal or from any other audit or assessment by the Commission or the
Universal Service Administrative Company. The Commission further
agrees that, in the absence of new material evidence, the Commission
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 Global Crossing
concerning the matters that were the subject of the investigation. The
Commission 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 Global Crossing with respect to Global Crossing's
basic qualifications, including its character qualifications, to be a
Commission licensee or authorized common carrier or hold Commission
authorizations.
12. Compliance Plan. For purposes of settling the matters set forth
herein, Global Crossing agrees to create within sixty (60) calendar
days a comprehensive Compliance Plan to ensure the timely payment of
all required contributions to the Federal Universal Service Fund,
Telecommunications Relay Service Fund, and North American Numbering
Plan and Local Number Portability cost recovery mechanisms, as well as
payment of annual regulatory fees imposed pursuant to 47 U.S.C. S: 159
(collectively, "Federal Regulatory Payments"). This plan is intended
to create the internal structure and processes to prevent a recurrence
of the events that led to the FCC's issuance of a NAL. The principal
features of this compliance plan are set forth below.
a. Responsibility for and Processing of Regulatory Payments. Global
Crossing's finance department will designate two individuals ("Finance
Designees") with exclusive responsibility to manage the regulatory
payments through Global Crossing's accounts payable process to ensure
timely and complete payment of all Federal Regulatory Payments. Each
of the Finance Designees will receive specialized training to enable
them to meet this responsibility (as discussed below). Federal
Regulatory Payment obligations are to be processed outside of Global
Crossing's existing commercial vendor management process.
b. Oversight Team. Global Crossing will establish an oversight team that
will bear supervisory responsibility for Global Crossing's timely
payment of all required Federal Regulatory Payments. The Oversight
Team will consist of the Chief Financial Officer, General Counsel, and
Head of Regulatory Affairs. The Oversight Team will serve as a
resource for resolving questions related to compliance with applicable
rules governing Federal Regulatory Payments and act as a central point
of contact for dissemination of information regarding FCC filing and
payment requirements throughout the company. The Oversight Team will
also oversee the development and dissemination of training materials
and will monitor changes to rules governing Federal Regulatory
Payments to ensure that those changes are documented and disseminated
appropriately. Each month, quarter, or year, depending on the
applicable fee, the Finance Designees will confirm to the Oversight
Team whether timely Federal Regulatory Payments were made, including
the amount and timing of such payments and whether Global Crossing
owes a delinquent balance to any of the federal regulatory programs.
c. Compliance Manual. Global Crossing will establish and maintain a
compliance manual that will serve as a reference regarding revenue
reporting and other obligations relating to the Federal Regulatory
Payments. This manual will set forth a schedule of filing and payment
dates associated with these programs, including the timely
dissemination of financial data and other information to the
individuals responsible for the preparation of Forms 499 and other
forms related to Federal Regulatory Payments. The manual also will
specify mandatory practices and procedures to be followed by Global
Crossing personnel in making the required payments.
d. Training. Global Crossing will establish and maintain a training
program for employees who are responsible for processing Federal
Regulatory Payments and for employees who are responsible for the
preparation and filing of FCC Forms 499 and other related revenue
reporting forms. This training program will address, at a minimum, (i)
the FCC's regulations governing Federal Regulatory Payments, (ii) the
FCC Form 499 instructions and the application of those instructions to
the services provided by Global Crossing and (iii) potential pitfalls
in processing Federal Regulatory Payments. The training program will
also discuss the potential ramifications of failing to comply with FCC
form filing and payment requirements. Global Crossing will provide
this training to all employees responsible for providing financial and
other input necessary to the preparation of FCC forms as well as
processing associated payments, on at least an annual basis. Global
Crossing will also provide training to new employees who will be
responsible for preparing FCC forms and processing associated payments
before they assume such responsibilities. Global Crossing will update
and enhance the foregoing training regarding FCC filing requirements
and payment obligations as appropriate and necessary. In addition to
the specialized training described above, all current and future
employees who may come into contact with Federal Regulatory Payment
procedures will be provided with general awareness training designed
to ensure that any invoices, correspondence or questions related to
Federal Regulatory Payments are directed to the employees who have
received the specific training described above. Both types of training
will (i) direct employees to promptly report all possible or suspected
instances of non-compliance to a member of the Oversight Team, (ii)
admonish employees as to the individual consequences of
non-compliance, which will result in disciplinary action, up to and
including termination of employment and (iii) advise employees of
available channels for reporting non-compliance. Global Crossing will
maintain records of all training.
e. Risk Assessment and Change Management. The Oversight Team will be
responsible for monitoring and responding to changes in Global
Crossing's business that may impact this compliance plan or Global
Crossing's broader procedures with respect to Federal Regulatory
Payments. Examples of such changes could include the resignation or
redeployment of employees who have received the specialized training
described above, the acquisition of new businesses, or changes in the
Commission's regulations
f. Continuous Improvement. The Oversight Team will be responsible for
making an annual assessment of this compliance plan and Global
Crossing's broader procedures to confirm that (i) they are being
implemented and respected by those officers and employees whose
actions may impact the company's compliance with Commission
regulations, and (ii) they are effective in ensuring timely payment of
all Federal Regulatory Payments. Any shortcomings detected through
these annual assessments will promptly be addressed
g. Compliance Reports. Global Crossing will file compliance reports with
the Commission ninety (90) days after the Effective Date and on each
anniversary of the Effective Date until the Termination Date of this
Compliance Plan. Annual compliance reports shall include a schedule of
Federal Regulatory Payments made during the previous year, indicating
when payments were due and when they were made. Each compliance report
shall include a compliance certificate from an officer, as an agent of
Global Crossing, stating that the officer has personal knowledge that
Global Crossing has established operating procedures intended to
ensure compliance with this Consent Decree, together with an
accompanying statement explaining the basis for the officer's
compliance certification. All compliance reports shall be submitted to
the Chief, Investigations & Hearings Division, Enforcement Bureau,
Federal Communications Commission, 445 12th Street, S.W., Washington,
D.C. 20554
h. Termination Date. Global Crossing's obligations under this Paragraph
shall expire thirty-six (36) months after the Effective Date.
1. Voluntary Contribution. Global Crossing agrees that it will make a
voluntary contribution to the United States Treasury in the amount of
$2,800,000 in two equal installment payments. Global Crossing will
make the first payment within thirty (30) calendar days after the
Effective Date of the Adopting Order and the second payment within
seven (7) months after the Effective Date of the Adopting Order. The
payments must be made by check or similar instrument, payable to the
Order of the Federal Communications Commission. The payments 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. Global Crossing will also send electronic
notification to trent.harkrader@fcc.gov within forty-eight (48) hours
of the date said payments are made.
2. Waivers. Global Crossing 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 Commission issues
the Adopting Order adopting the Consent Decree without change,
addition, modification, or deletion. Global Crossing 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 Global Crossing nor the
Commission shall contest the validity of the Consent Decree or the
Adopting Order, and Global Crossing shall waive any statutory right
to a trial de novo. Global Crossing 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.
3. Subsequent Rule or Order. The Parties agree that if any provision of
the Consent Decree conflicts with any subsequent rule or Adopting
Order (except an Order specifically intended to revise the terms of
this Consent Decree to which Global Crossing does not expressly
consent) that provision will be superseded by such Commission rule or
Order.
4. Successors and Assigns. Global Crossing agrees that the provisions of
this Consent Decree shall be binding on its successors, assigns, and
transferees.
5. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties.
6. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
7. 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.
8. Authorized Representative. Each party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
9. 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.
________________________________
Marlene H. Dortch
Secretary
Federal Communications Commission
________________________________
Date
________________________________
John B. McShane
Executive Vice President and General Counsel
Global Crossing
________________________________
Date
Global Crossing North America, Inc. is the parent company of various
telecommunications companies providing service in the United States,
including, but not limited to: Global Crossing Telecommunications,
Inc.; Global Crossing Bandwidth, Inc.; and Budget Call Long Distance,
Inc.
47 U.S.C. S:S: 254(d), 225. The Telecommunications Act of 1996
amended the Communications Act of 1934. See Telecommunications Act of
1996, Pub. L. No. 104-104, 110 Stat. 56 (1996).
47 C.F.R. S:S: 54.706(a), 64.604(c)(5)(iii)(A).
47 U.S.C. S: 154(i), 503(b).
Global Crossing North America, Inc. is the parent company of various
telecommunications companies providing service in the United States,
including, but not limited to: Global Crossing Telecommunications,
Inc. ("GC Telecommunications"); Global Crossing Bandwidth, Inc. ("GC
Bandwidth"); and Budget Call Long Distance, Inc. ("Budget"). For the
sake of brevity, unless stated otherwise, all references to "Global
Crossing" in this Consent Decree refer to one or more of the
aforementioned Global Crossing operating subsidiaries.
47 U.S.C. S:S: 254(d), 225. The Telecommunications Act of 1996
amended the Communications Act of 1934. See Telecommunications Act of
1996, Pub. L. No. 104-104, 110 Stat. 56 (1996).
47 C.F.R. S:S: 54.706(a), 64.604(c)(5)(iii)(A).
Letter from Trent Harkrader, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Michael J. Shortley, III,
General Counsel North America, Global Crossing Telecommunications,
Inc., dated Mar. 21, 2007 ("GC Telecommunications LOI" or "LOI").
Letter from Trent Harkrader, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Michael J. Shortley, III, Vice
President & Regional General Counsel - North America, Global Crossing
North America, Inc., dated June 14, 2007 ("Supplemental LOI").
47 U.S.C. S:S: 254(d), 225. The Telecommunications Act of 1996
amended the Communications Act of 1934. See Telecommunications Act of
1996, Pub. L. No. 104-104, 110 Stat. 56 (1996).
47 C.F.R. S:S: 54.706(a), 64.604(c)(5)(iii)(A).
See Letter from Michael J. Shortley, III, Vice President & Regional
General Counsel - North America, Global Crossing North America, Inc.,
dated July 12, 2007 ("Supplemental LOI Response") at 2-3. See also,
e.g.,
http://fjallfoss.fcc.gov/cib/form499/499detail.cfm?FilerNum=803667;
http://fjallfoss.fcc.gov/cib/form499/499detail.cfm?FilerNum=809586;
http://fjallfoss.fcc.gov/cib/form499/499detail.cfm?FilerNum=808107.
Letter from Trent Harkrader, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Michael J. Shortley, III,
General Counsel North America, Global Crossing Telecommunications,
Inc., dated Mar. 21, 2007.
Letter from Trent Harkrader, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Michael J. Shortley, III, Vice
President & Regional General Counsel - North America, Global Crossing
North America, Inc., dated June 14, 2007.
Global Crossing North America, Inc., Global Crossing
Telecommunications, Inc., Global Crossing Bandwidth, Inc., and Budget
Call Long Distance, Inc., Notice of Apparent Liability for
Forfeiture, 23 FCC Rcd 6110 (2008) ("NAL").
Federal Communications Commission FCC 09-55
2
2
Federal Communications Commission FCC 09-55