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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
)
File No. EB-10-IH-2797
In the Matter of )
Acct. No. 201132080028
Piedmont Communications Services, Inc. )
FRN No. 0010104388
Surry Telephone Membership Corp. )
FRN No. 0001952605
)
)
)
)
ORDER
Adopted: May 17, 2011 Released: May 18, 2011
By the Chief, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau of the Federal Communications
Commission ("Bureau"), Piedmont Communications Services, Inc. ("PCS")
and Surry Telephone Membership Corp. ("Surry"). The Consent Decree
terminates a Bureau investigation into PCS and Surry for possible
violations of section 214(a) of the Communications Act of 1934, as
amended ("Act"), and sections 63.01, 63.03, 63.04, 63.12, 63.18 and
63.24 of the Commission's rules. The possible violations arise out of
four transactions, including two substantial transfers of control of
domestic section 214 authority, one substantial transfer of control of
international section 214 authority, and one pro forma transfer of
control of international section 214 authority.
2. The Bureau, PCS and Surry have negotiated the terms of a Consent
Decree that resolves 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 and terminating the investigation.
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 PCS and Surry possess 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 section 4(i) of the Act,
and sections 0.111 and 0.311 of the Commission's rules, the Consent
Decree attached to this Order IS ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
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 David L. Nace, Lukas, Nace, Gutierrez & Sachs, LLP, 8300
Greensboro Drive, Suite 1200, McLean, Virginia 22102.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
)
File No. EB-10-IH-2797
In the Matter of )
Acct. No. 201132080028
Piedmont Communications Services, Inc. )
FRN No. 0010104388
Surry Telephone Membership Corp. )
FRN No. 0001952605
)
)
)
)
CONSENT DECREE
1. The Enforcement Bureau of the Federal Communications Commission,
Piedmont Communications Services, Inc. and Surry Telephone Membership
Corp. by their authorized representatives, hereby enter into this Consent
Decree for the purpose of terminating the Enforcement Bureau's
investigation of compliance by PCS and Surry with section 214(a) of the
Communications Act of 1934, as amended, and sections 63.01, 63.03, 63.04,
63.12, 63.18 and 63.24 of the Commission's rules. The possible violations
arise out of four transactions, including two substantial transfers of
control of domestic section 214 authority, one substantial transfer of
control of international section 214 authority, and one pro forma 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
Piedmont Communications Services, Inc. and Surry Telephone Membership
Corp. violated section 214(a) of the Act and sections 63.01, 63.03, 63.04,
63.12, 63.18 and 63.24 of the Commission's rules by willfully and
repeatedly engaging in substantial transfers of control of section 214
authority without the requisite prior approval of the Commission and
failing to timely notify the Commission of a pro forma transfer of control
of section 214 authority.
(h) "Parties" means Piedmont Telephone Membership Corp., Piedmont
Communications Services, Inc., Surry Telephone Membership Corp., Surry
Telecommunications Inc., 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) "Piedmont" means Piedmont Telephone Membership Corp. ("PTMC"), its
subsidiary Piedmont Communications Services, Inc. ("PCS") and their
respective subsidiaries, affiliates, predecessors-in-interest and
successors-in-interest.
(k) "Surry" means Surry Telephone Membership Corp. ("STMC"), its
subsidiary, Surry Telecommunications, Inc. ("STI"), and their 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 63.12, 63.18
and 63.24 of the Rules establish similar prohibitions regarding the
provision of international common carrier service, and sections 63.01,
63.03 and 63.04 of the Rules establish similar provisions for the
provision of domestic service. Section 63.24(f) provides that while
pro forma transfers of control and assignments of international
section 214 authority do not require Commission approval prior to
consummation, the Commission must be notified no later than thirty
days after the pro forma transaction is completed. This notification
must provide information specified in section 63.24(f)(2).
4. On January 1, 2009, Surry consummated an acquisition of Piedmont
without making prior application for approval from the Commission, as
the Rules require. Prior to the acquisition, Piedmont and Surry
provided incumbent local exchange carrier ("LEC") service to different
areas of North Carolina. Each entity had a subsidiary that operated as
a reseller of long distance communications services. Piedmont's long
distance subsidiary was PCS and Surry's long distance subsidiary was
STI. On July 1, 2009, Surry merged STI into PCS, and did not provide
notice to the Commission within thirty days, as the Rules require.
5. On January 27, 2010, PCS, which held international section 214
authority since 2001, simultaneously filed applications with the
Commission for both domestic and international section 214 authority
to transfer control of PCS from Piedmont to Surry, a transaction that
had been consummated more than one year earlier. On January 29, 2010,
Surry notified the Commission that it had merged STI into PCS in a pro
forma transfer of control, a transaction that had been consummated
more than six months earlier. On October 20, 2010, Surry filed an
application for domestic section 214 authority for its acquisition of
Piedmont, which had been consummated twenty-two months earlier.
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. PCS and Surry agree that the Bureau has jurisdiction over
them and the matters contained in this Consent Decree, and 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,
PCS and Surry 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 PCS and
Surry 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 PCS and Surry with respect to
PCS's and Surry's basic qualifications, including their character
qualifications to be Commission licensees or to hold Commission
authorizations.
10. Compliance Plan. PCS and Surry agree that they will implement a
comprehensive Compliance Plan for purposes of ensuring their compliance
with section 214(a) of the Act and sections 63.01, 63.03, 63.04, 63.18 and
63.24 of the Rules. The Compliance Plan shall include, at a minimum, the
following components:
(a) Compliance Officer. Within 60 calendar days of the Effective Date, PCS
and Surry will designate a Compliance Officer who will administer the
Compliance Plan, supervise PCS's and Surry's compliance with the Act and
the Rules, and serve as the point of contact on behalf of PCS and Surry
for all FCC-related compliance matters.
(b) Compliance Manual. Within 60 calendar days of the Effective Date, the
Compliance Officer will develop and distribute a Compliance Manual to all
employees and others who perform duties at PCS and Surry that trigger or
may trigger compliance-related responsibilities. The Compliance Manual
will include an overview of the Commission's requirements, including the
need for prior approval for substantial transfers of control of section
214 authorization, timely notification of pro forma transfers of control
of section 214 authorization and the requirements set forth in the Rules
at issue in the Investigation.
(c) Compliance Training Program. Within 90 calendar days of the Effective
Date, PCS and Surry will begin administering, and within 120 days shall
complete, a Compliance Training Program for all employees and others who
perform duties at PCS and Surry that trigger or may trigger
compliance-related responsibilities. This Compliance Training Program will
be presented to new employees who are engaged in such activities, within
the first 30 calendar days of employment. This Compliance Training Program
will track the Compliance Manual, focusing on proper implementation of the
Compliance Manual and tailored to specific user groups.
(d) Compliance Reports. PCS and Surry will report to the Commission any
instance of non-compliance with this Consent Decree or with section 214(a)
of the Act or sections 63.01, 63.03, 63.04, 63.12, 63.18 or 63.24 of the
Commission's Rules within 30 days of learning of the non-compliance. PCS
and Surry also will submit a Compliance Report to the Commission 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 PCS and Surry, stating that he/she has personal knowledge that:
(i) PCS and Surry 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 63.01, 63.03, 63.04, 63.12, 63.18
and 63.24 of the Rules, together with an accompanying statement explaining
the basis for the certification; (ii) PCS and Surry 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. 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 PCS and Surry
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.
(e) Termination. The requirements relating to the Compliance Plan shall
expire twenty-four months after the Effective Date.
11. Voluntary Contribution. PCS and Surry agree that they are jointly and
severally liable for, and shall make, a voluntary contribution to the
United States Treasury in the amount of $18,000.00. The payment shall be
made within 30 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. PCS and Surry will
also send electronic notification within 48 hours of the date payment is
made to Hillary.DeNigro@fcc.gov and to Robert.Krinsky@fcc.gov.
12. Waivers. PCS and Surry 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. PCS and Surry 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 PCS nor Surry, nor the Commission
shall contest the validity of the Consent Decree or the Adopting Order,
and PCS and Surry shall waive any statutory right to a trial de novo. PCS
and Surry 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.
13. 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.
14. 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 PCS and Surry do not expressly consent)
that provision shall be superseded by such Commission rule or Order.
15. Successors and Assigns. PCS and Surry agree that the terms and
conditions of this Consent Decree shall be binding on their successors,
assigns, and transferees.
16. 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 or the Rules and Orders.
17. Modifications. This Consent Decree cannot be modified without the
advance written consent of all Parties.
18. 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.
19. Authorized Representative. Each Party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
20. 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:
___________________________________
P. Michele Ellison Curtis R. Taylor
Chief, Enforcement Bureau Chief Executive Officer
Federal Communications Commission Surry Telephone Membership Corp., and
President
Piedmont Communications Services, Inc.
Date: ___________________________________ Date:
_____________________________
47 U.S.C. S: 214(a).
47 C.F.R. S:S: 63.01, 63.03, 63.04, 63.12, 63.18, 63.24.
47 U.S.C. S: 154(i).
47 C.F.R. S:S: 0.111, 0.311.
47 U.S.C. S: 214(a).
47 C.F.R. S:S: 63.01, 63.03, 63.04, 63.12, 63.18, 63.24.
47 U.S.C. S: 214(a).
47 C.F.R. S:S: 63.01, 63.03, 63.04, 63.18; 63.24.
47 C.F.R. S: 63.24(f).
47 C.F.R. S: 63.24(f)(2).
See IBFS File No. ITC-214-20010323-00152.
(Continued from previous page)
(continued....)
Federal Communications Commission DA 11-880
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Federal Communications Commission DA 11-880