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
)
)
)
In the Matter of )
File No.: EB-10-IH-4278
STi Telecom Inc., )
Acct. No.: 201132080035
f/k/a Epana Networks, Inc. )
FRN No.: 0007413867
and )
FRN No.: 0005885090
Progress International, LLC )
)
)
)
CONSENT DECREE
1. The Enforcement Bureau of the Federal Communications Commission, STi
Telecom Inc. and Progress International, LLC, by their authorized
representatives, hereby enter into this Consent Decree for the purpose of
terminating the Enforcement Bureau's investigation of STi Telecom Inc. and
Progress International, LLC for possible violations of section 214(a) of
the Communications Act of 1934, as amended, and sections 63.18 and 63.24
of the Commission's Rules, requiring prior Commission approval of the
transfer of control of international section 214 authority.
I. DEFINITIONS
2. For the purposes of this Consent Decree, the following definitions
shall apply:
(a) "Act" means the Communications Act of 1934, as amended, 47 U.S.C. S:
151 et seq.
(b) "Adopting Order" or "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" or "FCC" means the Federal Communications Commission and
all of its bureaus and offices.
(e) "Compliance Plan" means the program described in this Consent Decree
at paragraph 10.
(f) "Effective Date" means the date on which the Commission releases the
Adopting Order.
(g) "Investigation" means the Bureau's investigation regarding whether STi
Telecom Inc. and Progress International, LLC violated section 214(a) of
the Act and sections 63.18 and 63.24 of the Commission's rules by
willfully engaging in a substantial transfer of control of section 214
authority without the requisite prior approval of the Commission.
(h) "Parties" means STi Telecom Inc. and Progress International, LLC, the
respective subsidiaries, affiliates, predecessors-in-interest and
successors-in-interest of the aforementioned entities, and the Enforcement
Bureau of the Federal Communications Commission, and each a "Party."
(i) "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
(j) "STi" means STi Telecom Inc., and its respective subsidiaries,
affiliates, predecessors-in-interest and successors-in-interest.
(k) "Progress" means Progress International, LLC and its respective
subsidiaries, affiliates, predecessor-in-interest and
successors-in-interest.
II. BACKGROUND
3. Section 214(a) of the Act prohibits the construction, operation, or
acquisition of lines for interstate or international common carrier
communication without Commission authorization. Sections 63.18 and
63.24 of the Rules establish similar prohibitions regarding the
provision of international common carrier service. Section 63.24(c)
provides that "a transfer of control is a transaction in which the
authorization remains held by the same entity but there is a change in
the entity or entities that control the authorization holder."
Furthermore, section 63.24(e) provides that, in the case of transfers
of control that are not "pro-forma," the proposed transferee must
apply to the Commission for authority prior to consummation of the
proposed transfer of control. This notification must provide the
information specified in section 63.24(e)(2).
4. STi is a provider of global or limited global facilities-based
service, and global or limited resale service, to international
points, and holds an international section 214 authorization. STi is a
wholly-owned subsidiary of Vivaro Corporation ("Vivaro"). On June 18,
2010, Progress acquired Vivaro and, therefore, STi and STi's section
214 authorization, when Progress Ventures Acquisition Sub, Inc.
("Progress Sub"), a subsidiary of Progress, merged with and into
Vivaro. As a result of this transaction, the separate corporate
existence of Progress Sub ceased and Vivaro continued as the surviving
corporation of the merger and as a subsidiary of Progress. Progress
consummated this transfer without making prior application for
approval from the Commission, as the Rules require.
5. On July 23, 2010, just over one month after control of STi was
transferred to Progress, STi simultaneously filed: (1) an application
for Special Temporary Authority ("STA") with the Commission's
International Bureau ("IB") to continue providing international
service after the merger, and (2) an application to transfer control
of STi's international section 214 authorization from Vivaro to
Progress. IB granted the STA application on August 26, 2010 and
granted STi's subsequent October 18, 2010 and December 14, 2010
applications for STA on October 25, 2010 and December 22, 2010,
respectively. IB granted STi's application to transfer control of its
international section 214 authorization on January 19, 2011.
III. TERMS OF AGREEMENT
6. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau by incorporation
of such provisions by reference in the Adopting Order without change,
addition, modification, or deletion.
7. Jurisdiction. STi and Progress agree that the Bureau has jurisdiction
over them and the matters contained in this Consent Decree, and that the
Bureau has the authority to enter into and adopt this Consent Decree.
8. Effective Date; Violations. The Parties agree that this Consent Decree
shall become effective on the Effective Date. Upon release, the Adopting
Order and this Consent Decree shall have the same force and effect as any
other order of the Bureau. Any violation of the Adopting Order or of the
terms of this Consent Decree shall constitute a separate violation of a
Bureau order, entitling the Bureau to exercise any rights and remedies
attendant to the enforcement of a Bureau order.
9. Termination of Investigation. In express reliance on the covenants and
representations in this Consent Decree and to avoid further expenditure of
public resources, the Bureau agrees to terminate its Investigation on the
Effective Date. In consideration for the termination of the Investigation,
STi and Progress agree to the terms, conditions, and procedures contained
herein. The Bureau further agrees that, in the absence of new material
evidence, the Bureau will not use the facts developed in the 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 STi and
Progress concerning the matters that were the subject of the
Investigation. The Bureau also agrees that in the absence of new material
evidence it will not use the facts developed in the 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 STi and Progress
with respect to STi's and Progress' basic qualifications, including their
character qualifications to be Commission licensees or to hold Commission
authorizations.
10. Compliance Plan. STi and Progress agree that they will implement,
within thirty (30) calendar days from the Effective Date, a Compliance
Plan related to compliance with the Act, the Rules, and the Commission's
Orders, with particular emphasis on compliance with the Rules concerning
transfers of control and the provision of international telecommunications
service. The Compliance Plan shall include, at a minimum, the following
components:
(a) Compliance Officer. Within thirty (30) calendar days of the Effective
Date, STi and Progress will designate a Compliance Officer who will
administer the Compliance Plan, supervise STi's and Progress' compliance
with the Act, Rules, and Commission Orders, and serve as the point of
contact on behalf of STi and Progress for all FCC-related compliance
matters.
(b) Compliance Manual. Within sixty (60) calendar days of the Effective
Date, STi and Progress will develop and distribute a Compliance Manual to
all employees and others who perform duties at STi and Progress that
trigger or may trigger responsibilities related to regulatory compliance
with the Act, the Rules and the Commission's Orders. The Compliance Manual
will include at a minimum (i) an overview of the Commission's
requirements, including the need for prior approval for substantial
transfers of control of section 214 authorizations and the requirements
set forth in the Rules at issue in the Investigation; (ii) a description
of the regulatory requirements applicable to the accurate reporting of
information in FCC applications; and (iii) instructions regarding due
diligence for FCC applications. The Compliance Manual will be reviewed
annually and updated as appropriate, and any revisions will be distributed
within thirty (30) calendar days.
(c) Compliance Training Program. Within ninety (90) calendar days of the
Effective Date, all STi and Progress employees and others who perform
duties at STi and Progress that trigger or may trigger compliance-related
responsibilities must complete a Compliance Training Program focused on
those portions of the Act, Rules, and Commission Orders that relate to
transfers of control and the provision of international telecommunications
service. This Compliance Training Program will also be presented to new
employees who are engaged in such activities, within the first thirty (30)
calendar days of employment, and to employees who are reassigned to such
duties within thirty (30) calendar days of reassignment. This Compliance
Training Program will track the Compliance Manual, focusing on proper
implementation of the Compliance Manual and tailored to specific user
groups.
(d) Review and Updating. STi and Progress will review the Compliance
Manual and Compliance Training Program at least annually to ensure that
they are maintained in a proper manner and continue to address the
objectives set forth therein, and will update the Compliance Manual and
Compliance Training Program in accordance with any changes to the relevant
sections of the Act, Rules, and related Commission Orders.
(e) Reporting Non-Compliance. STi and Progress will report any
non-compliance with this Consent Decree or any relevant sections of the
Act, Rules, or related Commission Orders to the Bureau within 15 days
after the discovery of non-compliance.
(f) Compliance Reports. STi and Progress will file a Compliance Report
with the Commission ninety (90) days after the Effective Date, and
annually thereafter on the anniversary of the Effective Date until the
Termination Date. Each Compliance Report will include a certification by
the Compliance Officer, as an agent of and on behalf of STi and Progress,
stating that he/she has personal knowledge that: (i) STi and Progress have
established operating procedures intended to ensure compliance with the
terms and conditions of this Consent Decree and with section 214(a) of the
Act, and sections 63.18 and 63.24 of the Rules, together with an
accompanying statement explaining the basis for the certification; (ii)
STi and Progress have been utilizing those procedures since the previous
Compliance Report was submitted; and (iii) the Compliance Officer is not
aware of any instances of non-compliance with the Consent Decree, the Act
or the Rules. The certification must comply with section 1.16 of the Rules
and be subscribed to as true under penalty of perjury in substantially the
form set forth therein. If the Compliance Officer cannot provide the
requisite certification, he/she shall provide the Commission with a
detailed explanation of: (i) any instances of non-compliance with this
Consent Decree and the Rules, and (ii) the steps that STi and Progress
have taken or will take to remedy each instance of non-compliance and
ensure future compliance, and the schedule on which proposed remedial
actions will be taken. All Compliance Reports shall be directed to the
Chief, Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554.
(g) Termination. The requirements relating to the Compliance Plan shall
expire thirty-six (36) months after the Effective Date provided, however,
that, if STi and Progress have not substantially satisfied each of the
terms of the Compliance Plan , the obligations set forth therein shall
continue until STi and Progress have complied fully for two (2)
consecutive years.
11. Section 208 Complaints; Subsequent Investigations. Nothing in this
Consent Decree shall prevent the Commission or its delegated authority
from adjudicating complaints filed pursuant to section 208 of the Act
against STi, Progress or its affiliates for alleged violations of the
Act, or for any other type of alleged misconduct, regardless of when
such misconduct took place. The Commission's adjudication of any such
complaint will be based solely on the record developed in that
proceeding. Except as expressly provided in this Consent Decree, this
Consent Decree shall not prevent the Commission from investigating new
evidence of noncompliance by STi or Progress with the Act, the Rules,
or Commission Orders.
12. Voluntary Contribution. STi and Progress agree that they are jointly
and severally liable for, and shall make, a voluntary contribution to
the United States Treasury in the amount of $8,000.00. The payment
shall be made within thirty (30) calendar days after the Effective
Date of the Adopting Order. The payment shall be made by check or
similar instrument, payable to the Order of the Federal Communications
Commission. The payment must include the Account Number and FRN
Numbers referenced in the caption to the Adopting Order. Payment by
check or money order may be mailed to the 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. STi and
Progress will also send electronic notification within forty-eight
(48) hours of the date payment is made to Terry.Cavanaugh@fcc.gov and
to Edward.Smith@fcc.gov.
13. Waivers. STi and Progress agree to waive any and all rights they 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 Consent
Decree is adopted without change, addition, modification, or deletion.
STi and Progress 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
STi and Progress, nor the Commission shall contest the validity of the
Consent Decree or the Adopting Order, and STi and Progress shall waive
any statutory right to a trial de novo. STi and Progress hereby agree
to waive any claims they 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.
14. Invalidity. In the event that this Consent Decree in its entirety is
rendered invalid by any court of competent jurisdiction, it shall
become null and void and may not be used in any manner in any legal
proceeding.
15. Subsequent Rule or Order. The Parties agree that if any provision of
the Consent Decree conflicts with any subsequent Rule or Order adopted
by the Commission (except an Order specifically intended to revise the
terms of this Consent Decree to which STi and Progress do not
expressly consent) that provision shall be superseded by such
Commission rule or Order.
16. Successors and Assigns. STi and Progress agree that the terms and
conditions of this Consent Decree shall be binding on their
successors, assigns, and transferees.
17. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties. The
Parties further agree that this Consent Decree does not constitute
either an adjudication on the merits or a factual or legal finding or
determination regarding any compliance or noncompliance with the
requirements of the Act, the Rules and the Commission's Orders.
18. Modifications. This Consent Decree cannot be modified without the
advance written consent of all Parties.
19. Paragraph Headings. The headings of the Paragraphs in this Consent
Decree are inserted for convenience only and are not intended to
affect the meaning or interpretation of this Consent Decree.
20. Authorized Representative. Each Party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
21. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when executed
and delivered, shall be an original, and all of which counterparts
together shall constitute one and the same fully executed instrument.
By: _____________________________________ By:
___________________________________
Theresa Z. Cavanaugh Robert K. Lacy
Acting Chief Chief Executive Officer
Investigations and Hearings Division STi Telecom Inc.
Enforcement Bureau and
Federal Communications Commission Progress International, LLC
Date: ___________________________________ Date:
_________________________________
On June 29, 2011, Epana Networks, Inc. filed with the Secretary of State
of the State of Delaware a certificate of amendment of its certificate of
incorporation changing its name to STi Telecom, Inc. During the entirety
of the events outlined below, it operated under the name "Epana Networks,
Inc."
47 U.S.C. S: 214(a).
47 C.F.R. S:S: 63.18, and 63.24.
47 U.S.C. S: 214(a).
47 C.F.R. S:S: 63.18; and 63.24.
47 C.F.R S: 63.24(c).
Section 63.24(b) of the Rules provides that transfers of control or
assignments that do not result in a change in the actual controlling party
are considered non-substantial or pro forma. Section 63.24(b) further
provides that the determination of whether there has been a change in the
actual controlling party must be determined on a case-by-case basis. 47
C.F.R S: 63.24(b).
47 C.F.R. S: 63.24(f)(2).
See Attachment 1 to Epana Networks, Inc. Application for Approval Nunc Pro
Tunc of Transfer of Control of Entity Holding Section 214 Authorization,
filed July 23, 2010. IBFS File No. ITC-T/C-20100723-00305.
Id.
See Delaware Certificate of Merger of Progress Ventures Acquisition Sub,
Inc. with and into Vivaro Corporation, filed June 18, 2010.
Id.
See IBFS File No. ITC-STA-20100723-00302.
See IBFS File No. ITC-T/C-20100723-00305.
See IBFS File No. ITC-STA-20100723-00302.
See IBFS File No. ITC-STA-20101018-00404.
See IBFS File No. ITC-STA-20101214-00481.
See IBFS File No. ITC-STA-20101018-00404.
See IBFS File No. ITC-STA-20101214-00481.
See IBFS File No. ITC-T/C-20100723-00305.
(Continued from previous page)
(continued....)
Federal Communications Commission DA 11-1426
2
4
Federal Communications Commission DA 11- 1426