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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
) File No. EB-09-IH-0116
In the Matter of
) NAL/Acct. No.
AllCom 201032080032
)
Apparent Liability for Forfeiture FRN No. 0020037487
)
)
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE AND ORDER
Adopted: July 15, 2010 Released: July 16, 2010
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that AllCom apparently violated section 4(i), 4(j), 218 and 403 of the
Act by failing to respond to a directive of the Enforcement Bureau
("Bureau") to provide certain information and documents. Based on our
review of the facts and circumstances surrounding this matter, we find
that AllCom is apparently liable for a total forfeiture of $20,000.
We also order AllCom to respond fully to the Enforcement Bureau's
Letter of Inquiry within ten days of release of this NAL.
II. BACKGROUND
2. The Commission's rules require entities that provide interstate
telecommunications services to pay annual regulatory fees; to
contribute to the Universal Service Fund ("USF") and
Telecommunications Relay Service ("TRS") Fund; to contribute to
cost-recovery mechanisms for North American Numbering Plan ("NANP")
administration and Local Number Portability ("LNP") administration; to
file information as set forth on the Telecommunications Reporting
Worksheet (i.e., FCC Forms 499-A and 499-Q); to file registration
information; to confirm the registration of all carrier-customers
(i.e., resellers); and to receive authorization from the Commission
prior to commencing international telecommunications service.
3. The Bureau received allegations in 2009 that Allcom may be operating
in violation of the Commission's Universal Service Fund filing,
contribution and other related rules and that Allcom may be providing
international telecommunications service without Commission
authorization. On its website, Allcom claims to provide telephone
service, voicemail, conference calling, paging, and International
Public Access Numbers through its Universal Office and Genie products.
On July 28, 2009, the Bureau initiated an investigation into AllCom's
alleged violations of sections 1.1157, 52.17, 52.32, 54.706, 54.711,
63.12(d), 63.18, 64.604, and 64.1195 of the Commission's rules, and
Section 214 of the Communications Act of 1934, as amended ("the Act")
by issuing the LOI directing AllCom, among other things, to provide
information regarding these obligations and directing Allcom to
respond by August 27, 2009. The Bureau directed the LOI to Thomas
Skala, the Chief Executive Officer for AllCom, based on information on
the Allcom webpage and sent the LOI via certified mail with a return
receipt requested to Allcom's headquarters. The return receipt was
received at Allcom and signed on July 31, 2009. AllCom failed to
respond to the LOI.
4. Shortly after the due date, Bureau staff telephoned Mr. Skala and
spoke with him. During that conversation, staff informed Mr. Skala
that the Bureau was investigating Allcom's compliance with various
Commission requirements, that it had sent the LOI to his attention and
that the response was past due. Mr. Skala contended that AllCom was
not within the Commission's jurisdiction but nonetheless committed to
submitting a response the following week. After the conversation,
staff sent a second copy of the LOI to Mr. Skala via e-mail at an
e-mail address he provided, again directing him to respond. To date,
the Bureau has not received a response from AllCom.
III. DISCUSSION
5. 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. In order to impose such a forfeiture penalty, the Commission
must issue a notice of apparent liability, the notice must be
received, 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
willfully or repeatedly violated the Act or a Commission order or
rule.
6. We conclude that AllCom apparently violated Commission orders by
failing to respond to the LOI. Sections 4(i), 4(j), 218, and 403 of
the Act afford the Commission broad authority to investigate the
entities it regulates. Section 4(i) authorizes the Commission to
"issue such orders, not inconsistent with this Act, as may be
necessary in the execution of its functions," and section 4(j) states
that "the Commission may conduct its proceedings in such manner as
will best conduce to the proper dispatch of business and to the ends
of justice." Section 218 of the Act authorizes the Commission to
"obtain from . . . carriers . . . full and complete information
necessary to enable the Commission to perform the duties and carry out
the objects for which it was created." Section 403 likewise grants the
Commission "full authority and power to institute an inquiry, on its
own motion . . . relating to the enforcement of any of the provisions
of this Act."
7. In the LOI, the Bureau directed AllCom to provide certain documents
and information to enable the Bureau to perform its enforcement
function and evaluate possible violations of sections 1.1157, 52.17,
52.32, 54.706, 54.711, 63.12(d), 63.18, 64.604, and 64.1195 of the
Commission's rules, and Section 214 of the Act. The LOI was sent via
certified mail, with a return receipt requested, on July 28, 2009. The
LOI specifically warned AllCom that failure to respond to the LOI
could constitute a violation of the Act or the Commission's rules.
Nevertheless, AllCom failed to respond by the due date or request an
extension of time in which to meet its obligations under the LOI. The
Bureau staff then contacted Mr. Skala, who committed to respond to the
LOI, after which staff sent another copy of the LOI directly to Mr.
Skala. Allcom has not provided any response. Therefore, we conclude
that AllCom's failures to respond to the Bureau's inquiries constitute
apparent violations of a Commission order.
8. 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
$150,000 for each violation or each day of a continuing violation, up
to a statutory maximum of $1,500,000 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," and our forfeiture guidelines.
9. The forfeiture guidelines establish a base forfeiture amount of $4,000
for failure to respond to a Commission communication. As discussed
above, AllCom failed to respond to our LOI despite several attempts to
elicit a response. We find that AllCom's failure to respond to the LOI
is a violation of the Commission's rules. Misconduct of this type
exhibits a disregard for the Commission's authority that cannot be
tolerated and, more importantly, threatens to compromise the
Commission's ability to adequately investigate violations of its
rules. In this case, the misconduct inhibits our ability to
adequately detect and deter potential rule violations in areas of
critical importance to the Commission, i.e., the reporting and
contribution requirements for the Commission's regulatory programs.
Prompt, sworn responses to Bureau inquiry letters are critical to the
Commission's enforcement function.
10. Consistent with Commission precedent for violations of this nature, we
find Allcom's failure on multiple occasions to cooperate with the
Bureau's investigation and respond to the LOI warrants a sizable
proposed forfeiture. In the past, we have proposed forfeiture as high
as $15,000 for a company that submitted a substantially late response
that lacked the required supporting affidavit or declaration, and
forfeitures of $20,000 for companies that have failed to respond
entirely. In this case, AllCom never responded to the LOI despite
receiving two copies and after its CEO spoke to Bureau staff and
represented that the company would respond. Taking into account the
factors enumerated in section 503(b)(2)(D) of the Act, we conclude
that a $20,000 proposed forfeiture is justified in light of AllCom's
apparent failure to provide a response to the LOI.
IV. ORDERING CLAUSES
11. 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 AllCom
is hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
amount of $20,000 for willfully and repeatedly violating the Act and
the Commission's rules.
12. 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 FOR FORFEITURE AND ORDER, AllCom SHALL
PAY the full amount of the proposed forfeiture or SHALL FILE a written
statement seeking reduction or cancellation of the proposed
forfeiture.
13. 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/Acct. Nos. and FRN No. 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. Allcom will also send electronic
notification within forty-eight (48) hours of the date said payment is
made to Pam.Slipakoff@fcc.gov and Hillary.DeNigro@fcc.gov .
14. The response, if any, to this NOTICE OF APPARENT LIABILITY FOR
FORFEITURE AND ORDER 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. Global NAPs California, Inc. also will e-mail an electronic
copy of its response to Pam.Slipakoff@fcc.gov and
Hillary.DeNigro@fcc.gov.
15. 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.
16. IT IS FURTHER ORDERED that a copy of this NOTICE OF APPARENT LIABILITY
FOR FORFEITURE AND ORDER shall be sent by certified mail, return
receipt requested, to Thomas Skala, Chief Executive Officer, AllCom,
4570 South Eastern Avenue, Suite 23-221, Las Vegas, NV 89119.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau
47 U.S.C. S:S: 154(i), 154(j), 218, 403.
Letter from Trent B. Harkrader, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Thomas Skala, Chief Executive
Officer, AllCom (July 27, 2008) ("LOI").
See 47 C.F.R. S:S: 1.1157, 52.17, 52.32, 54.706, 54.711, 63.12(d), 63.18,
64.604, and 64.1195.
See www.allcom.com/telephone.php. AllCom's web site also indicates that it
provides credit card services with its GenieCard Visa(R) Prepaid Card and
internet services. See www.allcom.com/money.php and
www.allcom.com/internet.php.
See LOI at 1.
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). Section
312(f)(1) of the Act defines willful as "the conscious and deliberate
commission or omission of [any] act, irrespective of any intent to
violate" the law. 47 U.S.C. S: 312(f)(1). The legislative history to
section 312(f)(1) of the Act indicates that this definition of willful
applies to both sections 312 and 503(b) of the Act, H.R. Rep. No. 97-765,
97th Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the
term in the section 503(b) context. See, e.g., Application for Review of
Southern California Broadcasting Co., Memorandum Opinion and Order, 6 FCC
Rcd 4387, 4387-88, P: 5 (1991) ("Southern California Broadcasting"). The
Commission may also assess a forfeiture for violations that are merely
repeated, and not willful. 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") (issuing a Notice
of Apparent Liability for, inter alia, a cable television operator's
repeated signal leakage). "Repeated" means that the act was committed or
omitted more than once. Southern California Broadcasting, 6 FCC Rcd at
4388, P: 5; Callais Cablevision, 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) ("SBC Forfeiture Order").
47 U.S.C. S: 154(i).
47 U.S.C. S: 154(j).
47 U.S.C. S: 218.
47 U.S.C. S: 403.
See LOI at 8.
See, e.g., SBC Communications, Inc., Apparent Liability for Forfeiture,
Forfeiture Order, 17 FCC Rcd 7589, 7599-7600, P:P: 23-28 (2002) ($100,000
forfeiture for egregious and intentional misconduct, i.e., refusing to
attest to truthfulness and accuracy of responses to LOI); Globcom, Inc.,
Notice of Apparent Liability for Forfeiture and Order, 18 FCC Rcd 19893,
19898 n. 36 (2003) ("Globcom NAL") (subsequent history omitted) (delayed
response to an LOI considered dilatory behavior that may result in future
sanctions); BigZoo.Com Corporation, Order of Forfeiture, 20 FCC Rcd 3954
(Enf. Bur. 2005) ($20,000 forfeiture for failure of an entity to provide
any response to a USF LOI); American Family Association, Licensee of
Station KBMP(FM), Enterprise, Kansas, Notice of Apparent Liability for
Forfeiture, 19 FCC Rcd 14072 (Enf. Bur. 2004) ($3,000 forfeiture for a
partial response to an LOI); World Communications Satellite Systems, Inc.,
Notice of Apparent Liability for Forfeiture, 18 FCC Rcd 18545 (Enf. Bur.
2003) ($10,000 forfeiture for a non-responsive reply to an LOI); Donald W.
Kaminski, Jr., Notice of Apparent Liability for Forfeiture, 16 FCC Rcd
10707 (Enf. Bur. 2001) ($4,000 forfeiture after individual refused to
respond to an LOI).
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); see also 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, 23 FCC Rcd 9845 (2008). The
Commission most recently adjusted the maximum statutory forfeiture amounts
for inflation effective September 2, 2008. See 73 FR 44663-5. Apparent
violations which occurred before that date were subject to lower statutory
maxima.
47 U.S.C. S: 503(b)(2)(E).
47 C.F.R. S: 1.80(b)(4), Note, Guidelines for Assessing Forfeitures.
Id.
See e.g. Global NAPs California, Inc., DA 09-2375, P: 29 (rel. Nov. 12,
2009) (Global Naps Forfeiture Order).
Communications Options, Inc., Notice of Apparent Liability for Forfeiture,
22 FCC Rcd 13680, 13687-13688, P: 21 (2007).
See, e.g., BigZoo.com Corp., Order of Forfeiture, 20 FCC Rcd 3954 (Enf.
Bur. 2005); QuickLink Telecom, Inc., Order of Forfeiture, 20 FCC Rcd 14464
(Enf. Bur. 2005).
See 47 C.F.R. S: 1.1914.
Federal Communications Commission DA 10-1290
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Federal Communications Commission DA 10-1290