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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                         )                               
                                                                         
                                         )                               
                                                                         
                                         )                               
     In the Matter of                        File No. EB-08-TC-3704      
                                         )                               
     Diamond Phone, Inc.                     NAL/Acct. No. 201032170352  
                                         )                               
     Apparent Liability for Forfeiture       FRN: 0009886268             
                                         )                               
                                                                         
                                         )                               
                                                                         
                                         )                               


                              ORDER OF FORFEITURE

   Adopted: March 3, 2011 Released: March 3, 2011

   By the Chief, Telecommunications Consumers Division, Enforcement Bureau:

   I. INTRODUCTION and background

    1. In this Order of Forfeiture, we assess a monetary forfeiture of twenty
       thousand dollars ($20,000) against Diamond Phone Card, Inc. ("Diamond
       Phone") for willfully or repeatedly violating section 222 of the
       Communications Act of 1934, as amended (the "Communications Act" or
       "Act"), section 64.2009(e) of the Commission's rules, and the
       Commission's EPIC CPNI Order by failing to timely file an annual
       compliance certification with the Enforcement Bureau ("Bureau") for
       calendar year 2007 on or before March 1, 2008.

    2. Diamond Phone is a telecommunications carrier located in Elmhurst, New
       York providing prepaid phone card services. As a telecommunications
       carrier, Diamond Phone is subject to the requirements of section 222
       of the Act and section 64.2009 of the Commission's rules. Section 222
       imposes the general duty on all telecommunications carriers to protect
       the confidentiality of their subscribers' proprietary information.
       Protection of CPNI is a fundamental obligation of all
       telecommunications carriers as provided by section 222 of the Act. The
       Commission required carriers to establish and maintain a system
       designed to ensure that carriers adequately protected their
       subscribers' CPNI. The Commission strengthened its privacy rules with
       the release of the EPIC CPNI Order,  requiring that all companies
       subject to the CPNI rules file annually, on or before March 1, a
       certification with the Commission pursuant to amended rule 47 C.F.R.
       S: 64.2009(e).

    3. The Bureau sent a Letter of Inquiry ("LOI") to Diamond Phone on
       September 2, 2008. In the LOI the Bureau asked Diamond Phone to
       provide copies and evidence of its timely filed CPNI compliance
       certificate for 2007, which was due by March 1, 2008, or an
       explanation as to why no certification was filed. Diamond Phone
       responded to the LOI by emailing a CPNI certification dated September
       25, 2008. The Bureau concluded that Diamond Phone failed to submit
       satisfactory evidence of its timely filing of the annual CPNI
       compliance certification. On February 24, 2009, the Bureau released
       the Omnibus NAL against numerous companies, including Diamond Phone,
       proposing a monetary forfeiture of $20,000 for the apparent failure to
       comply with section 64.2009(e) of the Commission's rules, and the
       Commission's EPIC CPNI Order, and ordered Diamond Phone to either pay
       the proposed forfeiture or file a written response within 30 days of
       the release date stating why the proposed forfeiture should be reduced
       or canceled. Diamond Phone did not submit a response to the Omnibus
       NAL.

   II. discussion

    4. Section 64.2009(e) of the Commission's rules requires
       telecommunications carriers such as Diamond Phone to file annually
       before March 1st a CPNI compliance certification signed by an officer
       of the carrier. By its own admission, Diamond Phone failed to comply
       with this Commission rule and is subject to forfeiture. Section 503(b)
       of the Communications Act authorizes the Commission to assess a
       forfeiture against a common carrier of up to $150,000 for each
       violation of the Act or of any rule, regulation, or order issued by
       the Commission under the Act. The Commission may assess this penalty
       if it determines that the carrier's noncompliance is "willful or
       repeated." For a violation to be willful, it need not be intentional.
       In exercising our forfeiture authority, we are required to take into
       account "the nature, circumstances, extent, and gravity of the
       violation and, with respect to the violator, the degree of
       culpability, any history of prior offenses, ability to pay, and such
       other matters as justice may require." In addition, the Commission has
       established guidelines for forfeiture amounts and, where there is no
       specific base amount for a violation, retained discretion to set an
       amount on a case-by-case basis.

    5. The Commission's Forfeiture Policy Statement does not establish a base
       forfeiture amount for the failure to timely file an annual CPNI
       certification. The $3,000 base forfeiture amount suggested in the
       Commission's Forfeiture Policy Statement for failure to file documents
       generally is inadequate when applied to failure to file CPNI
       certifications. The Commission adopted the annual CPNI certification
       filing requirement to "ensure that carriers regularly focus their
       attention on their duty to safeguard CPNI. . . [and] remind carriers
       of the Commission's oversight and high priority regarding carrier
       performance in this area." In the Omnibus NAL, the Commission took
       into account the statutory factors for determining a forfeiture
       amount, the gravity of the offense, FCC precedent involving violations
       of our CPNI rules, and the fact that protection of a subscriber's CPNI
       is an important carrier obligation and the certification filing is an
       important part of that obligation. Taking these factors into account,
       the Commission proposed a forfeiture amount in the Omnibus NAL of
       $20,000 which is significantly lower than the maximum allowable
       forfeiture under section 503(b) and is also much lower than the
       $100,000 forfeitures assessed against carriers in prior Commission
       actions involving violations of our CPNI rules. Further, pursuant to
       the statutory factors, our rules, and the Forfeiture Policy Statement
       and find that no further downward adjustment from the $20,000
       forfeiture amount is warranted.

    6. As a preliminary matter, Diamond Phone's failure to timely file its
       annual 2007 CPNI certification is not disputed. Diamond Phone
       submitted the required certification only after the Commission
       notified it that it was investigating Diamond Phone's compliance with
       our rules and that it might be subject to enforcement action,
       including forfeitures.

    7. In addition, Diamond Phone failed to show past compliance with the
       Commission's CPNI certification requirements. Prior to the annual
       certification filing requirement, carriers were required to have a
       CPNI compliance plan and keep an annual CPNI compliance certificate in
       their files (i.e., carriers were required to annually certify but were
       not required to file the certification with the Commission). In lieu
       of an annual filing requirement, carriers were required to produce
       their annual certifications for inspection upon Commission request.
       Diamond Phone has failed to show that it was in compliance with the
       earlier certification requirement. Thus, the Commission cannot
       consider past CPNI compliance as a mitigating factor.

    8. Moreover, in a number of recent actions, the Commission has held that
       the failure to file forms is a continuing violation until cured, i.e.,
       Diamond Phone continued to violate the certification filing
       requirement for calendar year 2007 until it filed the certification.
       Failure to file the annual CPNI certification jeopardizes the
       Commission's ability to effectively monitor and respond to violations
       of consumer's privacy. The annual certification filing obligation is
       specifically intended to "ensure that carriers regularly focus their
       attention on their duty to safeguard CPNI" and allow the Commission to
       "monitor the industry's response to CPNI privacy issues and to take
       any necessary steps to ensure that carriers are managing customer CPNI
       securely." As we discussed above, Diamond Phone has failed to show
       that it maintained an annual, but unfiled, CPNI compliance
       certification. Thus, no downward adjustment is warranted in this case
       because Diamond Phone has failed to show that it has a history of
       compliance with our CPNI rules.

    9. With respect to inability to pay or hardship adjustment, we stated in
       the Omnibus NAL:

   The Commission will not consider reducing or canceling a forfeiture in
   response to a claim of inability to pay unless the petitioner submits: (1)
   federal tax returns for the most recent three year period; (2) financial
   statements prepared according to generally accepted accounting practices;
   or (3) some other reliable and objective documentation that accurately
   reflects the petitioner's current financial status. Any claim of inability
   to pay must specifically identify the basis for the claim by reference to
   the financial documentation submitted.

   Diamond Phone has not provided federal tax returns, financial statements,
   or any other information to support an inability to pay adjustment. We
   therefore conclude that Diamond Phone has not demonstrated an inability to
   pay the proposed forfeiture amount of $20,000.

   III. conclusion

   10. In the Omnibus NAL, the Bureau considered several factors including
       the amount of forfeiture necessary to have the intended deterrent
       effect. The Bureau concluded that the goal of deterring future
       non-compliance would be met by issuing forfeitures consistent with the
       proposed amount. We take noncompliance with our CPNI rules very
       seriously. This forfeiture order should advise Diamond Phone and other
       carriers that the protection of a subscriber's CPNI and the annual
       CPNI compliance certification filing requirements are important
       carrier obligations.

   IV. ordering clauses

   11. Accordingly, IT IS ORDERED, pursuant to section 503(b) of the
       Communications Act of 1934, as amended, 47 U.S.C. S: 503(b), section
       1.80 of the Commission's rules, 47 C.F.R. S: 1.80, that Diamond Phone
       Card, Inc. SHALL FORFEIT to the United States government the sum of
       $20,000 for willfully and repeatedly violating the Act and the
       Commission's rules.

   12. Payment of the forfeiture shall be made in the manner provided for in
       section 1.80 of the rules within thirty (30) days of the release of
       this Forfeiture Order. If the forfeiture is not paid within the period
       specified, the case may be referred to the Department of Justice for
       collection pursuant to section 504(a) of the Act. 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 No. and FRN 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-C 2-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 24A. Diamond Phone
       Card, Inc. will also send electronic notification on the date said
       payment is made to johnny.drake@fcc.gov. 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. 

   13. IT IS FURTHER ORDERED that a copy of this Order for Forfeiture shall
       be sent by Certified Mail Return Receipt Requested and First Class
       Mail to the company at 87-20 Queens Blvd., Elmhurst, NY 11373.

   FEDERAL COMMUNICATIONS COMMISSION

   Richard A. Hindman

   Chief

   Telecommunications Consumers Division

   Enforcement Bureau

   47 U.S.C. S: 503(b)(1). The Commission has the authority under this
   section of the Communications Act to assess a forfeiture against any
   person who has "willfully or repeatedly failed to comply with any of the
   provisions of this [Act] or of any rule, regulation, or order issued by
   the Commission under this [Act] ...." For a violation to be willful, it
   need not be intentional. See Application for Review of Southern California
   Broadcasting Co. Licensee, Radio Station KIEV (AM) Glendale, California,
   Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387-88, P: 5 (1991)
   ("Southern California Broadcasting"), recon. denied, 7 FCC Rcd 3454
   (1992).

   47 U.S.C. S: 222.

   47 C.F.R. S: 64.2009(e).

   Implementation of the Telecommunications Act of 1996: Telecommunications
   Carriers' Use of Customer Proprietary Network Information and Other
   Customer Information; IP-Enabled Services, CC Docket No. 96-115; WC Docket
   No. 04-36, Report and Order and Further Notice of Proposed Rulemaking, 22
   FCC Rcd 6927, 6953, P: 51 (2007) ("EPIC CPNI Order"); aff'd sub nom. Nat'l
   Cable & Telecom. Assoc. v. FCC, 555 F.3d 996 (D.C. Cir. 2009).

   Section 222 of the Communications Act, 47 U.S.C S: 222, provides that:
   "Every telecommunications carrier has a duty to protect the
   confidentiality of proprietary information of, and relating to, other
   telecommunications carriers, equipment manufacturers, and customers,
   including telecommunication carriers reselling telecommunications services
   provided by a telecommunications carrier."

   47 C.F.R. S: 64.2009(e) is one such requirement.

   EPIC CPNI Order, 22 FCC Rcd at 6953, P: 51. 47 C.F.R. S: 64.2009(e).
   Specifically, pursuant to section 64.2009(e): A telecommunications carrier
   must have an officer, as an agent of the carrier, sign and file with the
   Commission a compliance certificate on an annual basis. The officer must
   state in the certification that he or she has personal knowledge that the
   company has established operating procedures that are adequate to ensure
   compliance with our CPNI rules. The carrier must provide a statement
   accompanying the certification explaining how its operating procedures
   ensure that it is or is not in compliance with our CPNI rules. In
   addition, the carrier must include an explanation of any actions taken
   against data brokers and a summary of all customer complaints received in
   the past year concerning the unauthorized release of CPNI. This filing
   must be made annually on or before March 1 in EB Docket No. 06-36, for
   data pertaining to the previous calendar year. See also Enforcement
   Advisory No. 2011-02, 26 FCC Rcd 650 (Enf. Bur. 2011); Enforcement
   Advisory No. 2010-01, 25 FCC Rcd 361 (Enf. Bur. 2010).

   See email from David Rimas to Marcy Greene (Sept. 24, 2008). Diamond Phone
   submitted its 2007 CPNI compliance certification (dated Sept. 25, 2008)
   after it received notice from the Commission of this investigation of
   potential non-compliance with section 222 of the Act and section 64.2009
   of the Commission's rules. See Diamond Phone's "Annual 47 C.F.R. S:
   64.2009(e) CPNI Certification," dated Sept. 25, 2008.

   Annual CPNI Certification, Omnibus Notice of Apparent Liability for
   Forfeiture, 24 FCC Rcd 2299 (Enf. Bur. 2009) ("Omnibus NAL").

   47 C.F.R. S: 64.2009(e); see also EPIC CPNI Order, 22 FCC Rcd at 6953-54,
   P:P: 51-53.

   47 U.S.C. S: 503(b)(2)(B); see also  47 C.F.R. S: 1.80(b)(2); Amendment of
   Section 1.80 of the Commission's Rules, Order, 12 FCC Rcd 1038
   (1997)(inflation adjustment to $100,000/$1,100,000); Amendment of Section
   1.80(b) of the Commission's Rules and Adjustment of Forfeiture Maxima to
   Reflect Inflation, Order, 15 FCC Rcd 18221 (2000)(inflation adjustment to
   $120,000/$1,200,000); Amendment of Section 1.80 of the Commission's Rules
   and Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 23 FCC
   Rcd 9845 (2008) (inflation adjustment to $150,000/$1,500,000). See also
   FCC Enforcement Advisory No. 2011-02, 26 FCC Rcd 650 (Enf. Bur. 2011). At
   the time the Omnibus NAL was released the maximum forfeiture was $130,000
   for each violation of the Act or of any rule, regulation, or order issued
   by the Commission. See Omnibus NAL, 24 FCC Rcd at 2301, P: 5.

   See 47 U.S.C. S: 503(b)(1)(B).

   See, e.g., Southern California Broadcasting, 6 FCC Rcd at 4387-88, P: 5.

   See 47 U.S.C. S: 503(b)(2)(E); see also The Commission's Forfeiture Policy
   Statement and Amendment of Section 1.80 of the Commission's Rules, 12 FCC
   Rcd 17087, 17100-17101, P: 27 (1997) ("Forfeiture Policy Statement");
   recon. denied, 15 FCC Rcd 303 (1999).

   See Forfeiture Policy Statement, 12 FCC Rcd at 17098-99, P: 22.

   EPIC CPNI Order, 22 FCC Rcd at 6953, P: 51

   See Omnibus NAL, 24 FCC Rcd at 2302, P: 8; see also EPIC CPNI Order, 22
   FCC Rcd at 6953, P: 51.

   See Omnibus NAL, 24 FCC Rcd at 2299-2303, P:P: 5-8. The prior actions
   involved violations of the Commission's CPNI rules in effect in 2006. See
   id. at 2302, P: 7.

   Omnibus NAL, 24 FCC Rcd at 2302, P: 7. This prior rule is discussed in the
   EPIC CPNI Order: "each telecommunications carrier must have an officer, as
   an agent of the carrier, sign a compliance certificate on an annual basis
   stating that the officer has personal knowledge that the company has
   established operating procedures that are adequate to ensure compliance
   with the Commission's CPNI rules and to make that certification available
   to the public." EPIC CPNI Order, 22 FCC Rcd at 6953, P: 52 (citation
   omitted).

   Omnibus NAL, 24 FCC Rcd at 2302, P: 7.

   The 2007 CPNI compliance certification Diamond Phone submitted to the
   Bureau was dated Sept. 25, 2008. Diamond Phone has failed to show that it
   had an earlier CPNI compliance certification.

   Annual CPNI Certification, Omnibus Notice of Apparent Liability for
   Forfeiture and Order, DA 11-371,P: 8 (Enf. Bur. Feb. 25, 2011); STI
   Prepaid, LLC, Notice of Apparent Liability for Forfeiture, 25 FCC Rcd
   17836, 17845, P: 20 (Enf. Bur. 2010); Champaign Telephone Company d/b/a CT
   Communications, Inc., Order and Notice of Apparent Liability for
   Forfeiture, 25 FCC Rcd 17814, 17818-18, P: 9 (Spec. Enf. Div. 2010);
   Lightyear Network Solutions, LLC, Order and Notice of Apparent Liability
   for Forfeiture, 25 FCC Rcd 16212, 16217, P: 12 (Spec. Enf. Div. 2010);
   Alpheus Communications, LP, Notice of Apparent Liability for Forfeiture,
   25 FCC Rcd 8993, 8998, P: 12 (Enf. Bur. 2010); Compass Global, Inc.,
   Notice of Apparent Liability for Forfeiture, 23 FCC Rcd 6125, 6138-39, P:
   31 (2008); Telrite Corp., Notice of Apparent Liability for Forfeiture and
   Order, 23 FCC Rcd 7231, 7244, P: 30 (2008); VCI Company, Notice of
   Apparent Liability for Forfeiture and Order, 22 FCC Rcd 15933, 15940, P:
   20 (2007).

   EPIC CPNI Order, 22 FCC Rcd at 6953, P: 51.

   Omnibus NAL, 24 FCC Rcd at 2304, P: 16.

   See Long Distance Direct, Inc., Apparent Liability for Forfeiture,
   Memorandum Opinion and Order, 15 FCC Rcd 3297, 3305-06, P:P: 22-23 (2000).

   (Continued from previous page)

   (continued....)

   Federal Communications Commission DA 11-423

   2

   Federal Communications Commission DA 11-423