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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
In the Matter of File No. EB-09-IH-1972
)
Kajeet, Inc. NAL/Acct. No. 201232080007
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and FRN 0019614908
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Kajeet/Airlink, LLC NAL/Acct. No. 201232080008
)
Apparent Liability for Forfeiture FRN 0018691477
)
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE AND ORDER
Adopted: December 5, 2011 Released: December 5, 2011
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture and Order ("NAL"),
we find that Kajeet, Inc. ("Kajeet") and its wholly-owned subsidiary
Kajeet/Airlink, LLC ("Kajeet/Airlink") (collectively, the "Companies")
apparently violated sections 225(b)(1), 251(e)(2), and 254(d) of the
Communications Act of 1934, as amended (the "Act"), and sections
52.32(a), 54.706(a), and 64.604(c)(5)(iii)(A) of the Commission's
rules, by apparently willfully and repeatedly failing to contribute
fully and timely to the Universal Service Fund ("USF"), the
Telecommunications Relay Service ("TRS") Fund, and the Local Number
Portability ("LNP") cost recovery mechanism. In addition, we find that
Kajeet/Airlink apparently violated section 214 of the Act and section
63.24 of the Commission's rules, by apparently willfully consummating
an unauthorized assignment of an international section 214
authorization. Based on our review of the facts and circumstances
surrounding this matter, and for the reasons discussed below, we find
that Kajeet is apparently liable for a total forfeiture of four
hundred sixty thousand, one hundred eighty-six dollars ($460,186) and
Kajeet/Airlink is apparently liable for a total forfeiture of five
hundred two thousand, six hundred forty-two dollars ($502,642).
2. We also order the Companies to submit within thirty (30) calendar days
a report-supported by a declaration under penalty of perjury from a
corporate officer-setting forth in detail their plans to come into
compliance with the payment obligations discussed herein and
describing the steps Kajeet/Airlink has taken to come into compliance
with the requirements of section 214 of the Act and section 63.24 of
the Commission's rules.
II. BACKGROUND
3. The Act codifies Congress's historic commitment to promote universal
telecommunications service to ensure that consumers in all regions of
the nation have access to affordable, quality telecommunications
services. In particular, section 254(d) of the Act requires, among
other things, that "[e]very telecommunications carrier [providing]
interstate telecommunications services ... contribute, on an equitable
and nondiscriminatory basis, to the specific, predictable, and
sufficient mechanisms established by the Commission to preserve and
advance universal service." In implementing this Congressional
mandate, the Commission directed all telecommunications carriers
providing interstate telecommunications services and certain other
providers of interstate telecommunications to register with the
Commission, comply with annual and quarterly filing requirements, and
contribute to the Universal Service Fund based on their interstate and
international end-user telecommunications revenues. The Universal
Service Administrative Company ("USAC") currently administers the USF.
USAC uses the revenue projections submitted on the quarterly filings
to determine each carrier's monthly universal service contribution
amount, and bills them accordingly each month. Consistent with the
Debt Collection Improvement Act of 1996 ("DCIA"), invoices for USF
contributions that have become over 90 days delinquent are transferred
to the Commission for further action to collect the outstanding debt.
A provider's failure to pay its share into the USF skews the playing
field by giving the provider an economic advantage over its
competitors, who must then shoulder more than their fair share of the
costs of universal service.
4. Section 225(b)(1) of the Act, which codifies Title IV of the Americans
with Disabilities Act of 1990, directs the Commission to "ensure that
interstate and intrastate telecommunications relay services are
available, to the extent possible and in the most efficient manner, to
hearing-impaired and speech-impaired individuals in the United
States." To that end, the Commission established the TRS Fund to
reimburse TRS providers for the costs of providing interstate
telecommunications relay services. Pursuant to sections
64.604(c)(5)(iii)(A) and 64.601(b) of the Commission's rules, every
provider of interstate telecommunications services and certain other
providers of telecommunications must contribute to the TRS Fund based
on their interstate end-user revenues. The TRS Fund administrator uses
the annual filings to determine each contributor's TRS Fund
contribution amount. The TRS Fund administrator bills carriers each
July based on their annual revenues.
5. In addition, section 251(e)(1) of the Act directs the Commission to
oversee the administration of telecommunications numbering to ensure
the availability of telephone numbers on an equitable basis. Section
251(e)(2) of the Act requires that "[t]he cost of establishing
telecommunications numbering administration arrangements ... shall be
borne by all telecommunications carriers on a competitively neutral
basis as determined by the Commission." In carrying out this statutory
directive, the Commission adopted section 52.32 of its rules, which
requires, among other things, that all telecommunications carriers
contribute to the costs of local number portability on the basis of
their end-user telecommunications revenues for the prior calendar
year.
6. The Commission has established specific procedures for the
administration of the USF, TRS, local number portability, and other
associated federal regulatory programs. Pursuant to section 54.711(a)
of the Commission's rules, a carrier is required to file FCC Form
499-A, also known as the annual Telecommunications Reporting Worksheet
("annual Worksheet" or "Form 499-A"), for the purpose of determining
its USF, TRS Fund, LNP, and North American Numbering Plan ("NANP")
administration and regulatory fee payments, and with certain
exceptions, to file Quarterly Telecommunications Reporting Worksheets
("quarterly Worksheet" or "Form 499-Q") to determine its monthly
universal service contribution amounts. These periodic filings trigger
a determination of liability, if any, and subsequent billing and
collection by the entities that administer the regulatory programs.
Carriers must pay their contribution invoices in a timely manner, and
the Commission's rules explicitly warn contributors that failure to
file forms or submit payments potentially subjects them to enforcement
action.
7. Section 214(a) of the Act prohibits any carrier from constructing,
extending, or operating any line, and from engaging in transmission
through any such line, "unless and until there shall first have been
obtained from the Commission a certificate that the present or future
public convenience and necessity" require, or will require, the
construction, extension, or operation of the line. In accordance with
sections 63.12 and 63.18 of the Commission's rules, any international
carrier seeking authorization for such activities pursuant to section
214 of the Act, including an assignment of an authorization, must
obtain approval from the Commission. In particular, pursuant to
section 63.24 of the Commission's rules, the assignment of an
international section 214 authorization requires application to, and
prior approval from, the Commission. Section 63.24(e) requires that
the proposed assignee apply to the Commission for approval prior to
the consummation of the proposed assignment. The Commission employs a
public interest standard under section 214(a) of the Act that involves
the examination of the positive and negative public interest impact of
a proposed transaction.
8. Kajeet is a Maryland-based company that has provided
telecommunications services since 2007. Kajeet provides prepaid
wireless services as reseller for a nationwide wireless carrier.
Kajeet/Airlink has provided telecommunications services since April
2009. Kajeet/Airlink provides prepaid wireless services as a reseller
for a nationwide wireless carrier and sells prepaid long distance
calling cards.
9. In July 2009, USAC referred Airlink Mobile, Inc. ("Airlink Mobile") to
the Enforcement Bureau (the "Bureau") for potential enforcement
action, alleging that Airlink Mobile had failed to comply with the
Commission's USF contribution rules. On August 10, 2009, the Bureau
issued a letter of inquiry ("LOI") to Airlink Mobile seeking
information about its compliance with USF and other related regulatory
obligations. Airlink Mobile did not respond to the LOI. Subsequent
investigation revealed that Airlink Mobile was no longer in business
and that its assets had apparently been purchased by the Companies. On
December 10, 2009, the Bureau issued an LOI to the Companies seeking
information about their compliance with USF and other related
regulatory obligations and Kajeet/Airlink LLC's acquisition of certain
assets of Airlink Mobile. The LOI Response and supplemental
information developed through our investigation indicate that both
Kajeet and Kajeet/Airlink failed to contribute fully and timely to the
USF, the TRS Fund, and the LNP cost recovery mechanism. In addition,
the LOI Response indicates that Kajeet/Airlink consummated a
substantial assignment of an international section 214 authorization
without prior Commission approval.
III. DISCUSSION
10. 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. 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. The legislative
history to section 312(f)(1) of the Act clarifies that this definition
of willful applies to both sections 312 and 503(b) of the Act, and the
Commission has so interpreted the term in the section 503(b) context.
The Commission may also assess a forfeiture for violations that are
merely repeated, and not willful. "Repeated" means that the act was
committed or omitted more than once, or lasts more than one day. To
impose such a forfeiture penalty, the Commission must issue a notice
of apparent liability, 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, based on the evidence, that the person has
violated the Act or a Commission rule.
11. The fundamental issues in this case are whether Kajeet and
Kajeet/Airlink apparently violated the Act and the Commission's rules
by willfully or repeatedly failing to make required contributions to
the USF, TRS Fund, and LNP cost recovery mechanism, and whether
Kajeet/Airlink apparently violated the Act and the Commission's rules
by willfully or repeatedly failing to obtain Commission approval prior
to consummating the assignment of an international section 214
authorization. We answer these questions in the affirmative. As set
forth below, we conclude that the Companies are apparently liable for
a forfeiture for their apparent willful and repeated violations of
sections 214, 225(b)(1), 251(e)(2), and 254(d) of the Act and sections
52.32(a), 54.706(a), 63.24, and 64.604(c)(5)(iii)(A) of the
Commission's rules. Based on the facts and circumstances before us, we
therefore conclude that Kajeet is apparently liable for a total
forfeiture of four hundred sixty thousand, one hundred eighty-six
dollars ($460,186) and Kajeet/Airlink is apparently liable for a total
forfeiture of five hundred two thousand, six hundred forty-two dollars
($502,642).
A. Kajeet and Kajeet/Airlink Apparently Failed to Make Full and Timely
Universal Service Fund Contributions
12. We conclude that Kajeet and Kajeet/Airlink both apparently violated
section 254(d) of the Act and section 54.706(a) of the Commission's
rules by apparently willfully and repeatedly failing to contribute
fully and timely to the universal service support mechanisms. Section
54.706(a) of the Commission's rules unambiguously directs that
"entities [providing] interstate telecommunications to the public ...
for a fee ... contribute to the universal service support mechanisms."
"Interstate telecommunications" include, among other things, "resale
of interstate services" and "prepaid calling card" services such as
those provided by Kajeet and Kajeet/Airlink. The Companies do not
dispute that Kajeet and Kajeet/Airlink were required to make USF
contributions at all relevant times.
13. Kajeet made only partial payments on its USF invoice for the monthly
payments due in May 2009, January 2010, and January 2011, and failed
to make any of the required monthly payments due in June 2009 through
December 2009, February 2010 through December 2010, and May through
June 2011. As a result of its failures to pay, Kajeet maintained
outstanding USF balances every month between May 2009 and June 2011.
Kajeet's failure to comply fully and timely with the USF requirements
for 23 of the last 30 months also afforded it a financial benefit and
an economic advantage over its competitors who complied with their USF
obligations. Based on the record developed in our investigation, we
find that Kajeet has apparently violated section 254(d) of the Act and
section 54.706(a) of the Commission's rules by apparently willfully
and repeatedly failing to contribute fully and timely to the USF.
14. Kajeet/Airlink began operating in April 2009, but did not make any USF
contributions until December 2010. The Companies indicate in the LOI
Response that Kajeet/Airlink "has not yet contributed to the USF, nor
has it filed any Form 499-Qs." The Companies claim that "[d]ue to the
severe economic turbulence of 2009, we focused on making sure this
entity was able to operate and survive during the short time we've had
to stabilize the customer base supported by the assets acquired by
Kajeet/Airlink." The Companies further assert that they were in the
process of preparing a 2010 Form 499-A for Kajeet/Airlink so that "we
can fulfill the appropriate USAC obligations for this entity."
According to USAC records, Kajeet/Airlink failed to file any quarterly
Worksheets until May 2010, and did not file its 2010 annual Worksheet
until September 21, 2010, more than five months after it was due.
Based on the record before us, including the revenues reported in
Kajeet/Airlink's 2010 annual Worksheet, Kajeet/Airlink would not have
qualified for the de minimis exemption from contributing to the USF
during 2009 and therefore should have filed quarterly Worksheets
beginning in May 2009. Because Kajeet/Airlink failed to file any
required Worksheets until May 2010, USAC did not begin sending it
invoices until July 2010. Kajeet/Airlink failed to make any payments
on its USF invoices for the monthly payments due in August 2010
through November 2010, and made only a partial payment in December
2010. Kajeet/Airlink also failed to make any payments on its USF
invoices for the monthly payments due in January, March, April, and
May 2011, and made only a partial payment in February 2011. Based on
the record developed in our investigation, we find that Kajeet/Airlink
has apparently violated section 254(d) of the Act and section
54.706(a) of the Commission's rules by apparently willfully and
repeatedly failing to contribute fully and timely to the USF.
B. Kajeet and Kajeet/Airlink Apparently Failed To Make Full and Timely
TRS Fund Contributions
15. We also find that Kajeet and Kajeet/Airlink apparently violated
section 225(b)(1) of the Act and section 64.604(c)(5)(iii)(A) of the
Commission's rules by apparently willfully and repeatedly failing to
contribute fully and timely to the TRS Fund. As interstate
telecommunications carriers, Kajeet and Kajeet/Airlink were obligated
to contribute to the TRS Fund on the basis of the interstate end-user
telecommunications revenues reported on their annual Worksheets. A
carrier's contribution to the TRS Fund is based on its subject
revenues for the prior calendar year and a contribution factor
determined annually by the Commission. Subject carriers must make TRS
contributions on an annual basis, with certain exceptions that are not
applicable to Kajeet and Kajeet/Airlink.
16. The record demonstrates that Kajeet and Kajeet/Airlink failed to make
full and timely contributions to the TRS Fund in 2010. The TRS Fund
administrator invoiced Kajeet for an adjustment to its 2009 TRS Fund
contribution on May 4, 2010, with a due date of May 26, 2010, and
invoiced Kajeet for its 2010 TRS Fund contribution on July 4, 2010,
with a due date of July 26, 2010. The TRS Fund administrator invoiced
Kajeet/Airlink for its 2010 TRS Fund contribution on November 4, 2010,
with a due date of November 26, 2010. As of January 10, 2011, however,
neither Kajeet nor Kajeet/Airlink had made any payments toward their
TRS obligations for 2010. Based on the record developed in our
investigation, we find that Kajeet and Kajeet/Airlink have apparently
violated section 225(b)(1) of the Act and section 64.604(c)(5)(iii)(A)
of the Commission's rules by apparently willfully and repeatedly
failing to make required TRS Fund contributions in 2010.
C. Kajeet and Kajeet/Airlink Apparently Failed To Make Full and Timely
Contributions to the LNP Cost Recovery Mechanism
17. We find that Kajeet and Kajeet/Airlink apparently violated section
251(e)(2) of the Act and section 52.32(a) of the Commission's rules by
apparently willfully and repeatedly failing to contribute fully and
timely to the LNP cost recovery mechanism. As telecommunications
carriers, Kajeet and Kajeet/Airlink were obligated to contribute to
the LNP cost recovery mechanism on the basis of the end-user
telecommunications revenues reported on their annual Worksheets.
18. The record demonstrates that Kajeet and Kajeet/Airlink failed to
contribute fully and timely to the LNP cost recovery mechanism in 2010
and 2011. The LNP administrator invoiced Kajeet monthly throughout
2010 and 2011 and began sending Kajeet/Airlink monthly invoices in
October 2010. As of October 26, 2011, however, Kajeet had not made any
payments towards its LNP administration obligations for 2010 or 2011.
Kajeet/Airlink did not make any payments towards its LNP
administration obligations for 2010 until July 2011 and, as of October
26, 2011, had not made any payments towards its LNP administration
obligations for 2011. Based on the record developed in our
investigation, we find that Kajeet and Kajeet/Airlink have apparently
violated section 251(e)(2) of the Act and section 52.32(a) of the
Commission's rules by apparently willfully and repeatedly failing to
contribute to the LNP cost recovery mechanism in 2010 and 2011.
D. Kajeet/Airlink Apparently Failed to Obtain Commission Approval Prior
to Consummating the Assignment of an International Section 214
Authorization
19. We find that Kajeet/Airlink apparently violated section 214 of the Act
and section 63.24 of the Commission's rules by apparently willfully
consummating the assignment of an international section 214
authorization without prior Commission approval. Under section 63.24
of the Commission's rules, an assignment of an international section
214 authorization requires application to, and approval from, the
Commission. The proposed assignee must apply to the Commission for
approval prior to the consummation of the proposed assignment. Based
on the record developed in our investigation, as set forth in detail
in the attached confidential Appendix, we find that Kajeet/Airlink has
apparently violated section 214 of the Act and section 63.24 of the
Commission's rules by apparently willfully failing to obtain
Commission approval prior to consummating the assignment of an
international section 214 authorization.
E. Proposed Forfeitures
20. Section 503(b)(1) of the Act provides that any person who 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," as well as our forfeiture guidelines.
1. Kajeet
21. We find that Kajeet made only partial payments to the USF in May 2009,
January 2010, and January 2011, and failed to make any required
monthly payments in June 2009 through December 2009, February 2010
through December 2010, and May 2011 through June 2011. Nonpayment of
universal service contributions is an egregious offense. It not only
deprives the USF of resources necessary to preserve and advance
universal service, but it also bestows on delinquent entities an
unfair competitive advantage by shifting to compliant contributors the
economic costs and burdens associated with universal service. An
entity's failure to make required universal service contributions
frustrates Congress's policy objective in section 254(d) of the Act to
ensure the equitable and non-discriminatory distribution of universal
service costs among all telecommunications providers. The Commission
has established a base forfeiture amount of $10,000 for each month in
which a contributor has failed to fully pay required universal service
contributions and $20,000 for each month in which a contributor has
failed to make any required universal service contribution, plus an
upward adjustment based on one-half of the company's approximate
unpaid contributions. In addition, the Commission has treated failures
to pay universal service and other obligations as continuing
violations. Our forfeiture calculation therefore reflects not only
violations that began within the last twelve months, but also
violations that began prior to the last twelve months and continued
during the twelve-month period preceding this NAL.
22. As a result, we find that Kajeet is apparently liable for a forfeiture
for apparently willfully and repeatedly failing to contribute fully
and timely to the USF on a total of nineteen occasions between
September 2009 and June 2011. Accordingly, we assess a $20,000
forfeiture for each of the seventeen months in which Kajeet failed to
remit any contribution toward its outstanding USF obligation. We also
assess a $10,000 forfeiture for two months in which Kajeet failed to
fully pay its required universal service contribution, as provided on
the corresponding invoices. Thus, we find Kajeet apparently liable for
a base forfeiture of $360,000 for its apparent willful and repeated
failures to contribute fully and timely to the USF on nineteen
occasions between September 2009 and June 2011. Moreover, consistent
with our approach for assessing liability for apparent USF violations,
and taking into account all the factors enumerated in section
503(b)(2)(E) of the Act, we also add an upward adjustment of $66,966
to the base forfeiture-approximately one-half of the largest amount of
Kajeet's unpaid USF contributions during the period at issue. We
therefore find Kajeet apparently liable for a forfeiture of four
hundred twenty-six thousand, nine hundred sixty-six dollars ($426,966)
for its apparent willful and repeated failures to contribute fully and
timely to the USF.
23. We also find that Kajeet is apparently liable for a forfeiture for
apparently willfully and repeatedly failing to make required TRS
contributions in 2010. Where a provider fails to satisfy its TRS
obligations, it thwarts the purpose for which Congress established
section 225(b)(1) of the Act and its implementing regulations - to
ensure that telecommunications relay services "are available to the
extent possible and in the most efficient manner, to hearing-impaired
and speech-impaired individuals in the United States." The Commission
has generally established a base forfeiture amount of $10,000 for each
instance in which a contributor fails to make required TRS
contributions and an upward adjustment based on one-half of the
company's approximate unpaid contributions. We assess a $10,000
forfeiture for Kajeet's failure to pay its TRS Fund contributions in
2010 and an upward adjustment of $3,220, approximately one-half of
Kajeet's unpaid TRS Fund contributions. We therefore find Kajeet
apparently liable for a forfeiture of thirteen thousand, two hundred
twenty dollars ($13,220) for its apparent willful and repeated failure
to contribute fully and timely to the TRS Fund.
24. Additionally, we conclude that Kajeet is apparently liable for a
forfeiture for apparently willfully and repeatedly failing to make
full and timely contributions toward LNP cost recovery mechanisms in
2010 and 2011. The failure of carriers to make required LNP
contributions severely hampers the Commission's ability to ensure that
the cost of establishing number portability arrangements are "borne by
all telecommunications carriers on a competitively neutral basis" as
Congress envisioned. The Commission has prescribed a $10,000 base
forfeiture amount for failure to pay LNP contributions. We find Kajeet
apparently liable for a forfeiture of twenty thousand dollars
($20,000) for its apparent willful and repeated failures to make full
LNP payments in 2010 and 2011.
2. Kajeet/Airlink
25. Initially, we note that although Kajeet/Airlink has been providing
telecommunications service since April 2009, it failed to file any
quarterly Worksheets until May 2010 and filed its 2010 annual
Worksheet, which was due April 1, 2010, more than five months late on
September 21, 2010. A carrier's failure to file these Worksheets is
directly linked to, and thus has serious implications for,
administration of the USF, TRS, NANP, LNP, and regulatory fee
programs. By failing to report its revenue, Kajeet/Airlink avoided
making full and timely payment into these programs and unilaterally
shifted to compliant carriers and their customers the economic costs
associated with the programs.
26. We find that Kajeet/Airlink failed to make any required monthly
payments to the USF in August 2009 through November 2010, and in
January, March, April and May 2011, and made only partial payments in
December 2010 and February 2011. We accordingly find that
Kajeet/Airlink is apparently liable for a forfeiture for apparently
willfully and repeatedly failing to contribute fully and timely to the
USF on a total of twenty-two occasions between August 2009 and May
2011. We accordingly assess a $20,000 forfeiture for each of the
twenty months in which Kajeet/Airlink failed to remit any contribution
toward its outstanding USF obligation. We also assess a $10,000
forfeiture for the two months in which Kajeet/Airlink failed to fully
pay its required universal service contribution. Thus, we find
Kajeet/Airlink apparently liable for a base forfeiture of $420,000 for
its willful and repeated failures to contribute fully and timely to
the USF on twenty-two occasions between August 2009 and May 2011. We
also conclude that an upward adjustment to the base forfeiture
associated with Kajeet/Airlink's failure to contribute to the USF is
appropriate. Accordingly, taking into account all of the factors
enumerated in section 503(b)(2)(E) of the Act, we propose an upward
adjustment of $35,185, approximately one-half of the largest amount of
Kajeet/Airlink's unpaid USF contributions during the period at issue.
We therefore find Kajeet/Airlink apparently liable for a forfeiture of
four hundred fifty-five thousand, one hundred eighty-five dollars
($455,185) for its apparent willful and repeated failures to
contribute fully and timely to the USF.
27. We also find that Kajeet/Airlink is apparently liable for a forfeiture
for apparently willfully and repeatedly failing to make required TRS
contributions in 2010. We assess a $10,000 forfeiture for
Kajeet/Airlink's failure to pay its TRS Fund contributions in 2010 and
an upward adjustment of $1,457, approximately one-half of
Kajeet/Airlink's unpaid TRS Fund contributions. We thus find
Kajeet/Airlink apparently liable for a forfeiture of eleven thousand,
four hundred fifty-seven dollars ($11,457) for its apparent willful
and repeated failure to contribute fully and timely to the TRS Fund.
28. Furthermore, we conclude that Kajeet/Airlink is apparently liable for
a forfeiture for apparently willfully and repeatedly failing to make
full and timely contributions toward LNP cost recovery mechanisms in
2010 and 2011. As noted above, the Commission has prescribed a $10,000
base forfeiture amount for failure to pay LNP contributions. We find
Kajeet/Airlink apparently liable for a forfeiture of twenty thousand
dollars ($20,000) for its apparent willful and repeated failures to
make full LNP payments in 2010 and 2011.
29. Finally, we find that Kajeet/Airlink is apparently liable for a
forfeiture for apparently willfully failing to obtain Commission
approval prior to consummating the assignment of an international
section 214 authorization. The Commission's Forfeiture Policy
Statement and implementing rules prescribe a base forfeiture of $8,000
for an unauthorized substantial assignment. Such forfeiture amount may
be adjusted upward or downward depending on the existence of
aggravating or mitigating factors. In the instant case, we have taken
into consideration Kajeet/Airlink's failure over a period of
approximately two years to file a corrective application. On balance
and after applying the factors set forth in section 503(b)(2)(E) of
the Act, we find that a forfeiture in the amount of $16,000 is
appropriate. Accordingly, we find Kajeet/Airlink apparently liable for
a forfeiture of sixteen thousand dollars ($16,000) for its apparent
willful failure to obtain Commission approval prior to consummating
the assignment of an international section 214 authorization.
IV. CONCLUSION
30. In light of the seriousness, duration, and scope of the apparent
violations, we propose a total forfeiture of four hundred sixty
thousand, one hundred eighty-six dollars ($460,186) against Kajeet,
consisting of four hundred twenty-six thousand, nine hundred sixty-six
dollars ($426,966) for failure to make full and timely USF
contributions; thirteen thousand, two hundred twenty dollars ($13,220)
for failure to make full and timely TRS contributions; and twenty
thousand dollars ($20,000) for failure to make LNP contributions.
31. We also propose a total forfeiture of five hundred two thousand, six
hundred forty-two dollars ($502,642) against Kajeet/Airlink,
consisting of four hundred fifty-five thousand, one hundred
eighty-five dollars ($455,185) for failure to make full and timely USF
contributions; eleven thousand, four hundred fifty-seven dollars
($11,457) for failure to make full and timely TRS contributions;
twenty thousand dollars ($20,000) for failure to make LNP
contributions; and sixteen thousand dollars ($16,000) for failure to
obtain Commission approval prior to consummating the assignment of an
international section 214 authorization.
32. In addition, we order the Companies to submit within thirty (30)
calendar days a report-supported by a declaration under penalty of
perjury from a corporate officer-setting forth in detail their plans
to come into compliance with the payment obligations discussed herein
and describing the steps Kajeet/Airlink has taken to come into
compliance with the requirements of section 214 of the Act and section
63.24 of the Commission's rules.
33. We caution that additional violations of the Act or the Commission's
rules could subject the Companies to further enforcement action. Such
action could take the form of higher monetary forfeitures, possible
disqualification of the Companies' principals from the provision of
any interstate common carrier services without the prior consent of
the Commission, and/or possible revocation of the Companies' authority
to operate.
V. ORDERING CLAUSES
34. ACCORDINGLY, IT IS ORDERED that, pursuant to section 503(b) of the
Act, and section 1.80 of the Commission's rules, that Kajeet, Inc. is
hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
amount of four hundred sixty thousand, one hundred eighty-six dollars
($460,186) for willfully and repeatedly violating the Act and the
Commission's rules.
35. IT IS FURTHER ORDERED that, pursuant to section 503(b) of the Act and
section 1.80 of the Commission's rules that Kajeet/Airlink, LLC is
hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
amount of five hundred two thousand, six hundred forty-two dollars
($502,642) for willfully and repeatedly violating the Act and the
Commission's rules.
36. IT IS FURTHER ORDERED that, pursuant to section 1.80 of the
Commission's rules, within thirty (30) calendar days of the release
date of this Notice of Apparent Liability for Forfeiture and Order,
the Companies SHALL PAY the full amount of the proposed forfeitures or
SHALL FILE a written statement seeking reduction or cancellation of
the proposed forfeitures.
37. IT IS FURTHER ORDERED that the Companies shall submit within thirty
days of the release date of this Notice of Apparent Liability for
Forfeiture and Order, a report supported by a declaration under
penalty of perjury from a corporate officer setting forth in detail
the Companies' plans to come into compliance with the payment
obligations discussed herein and describing the steps Kajeet/Airlink
has taken to come into compliance with the requirements of section 214
of the Act and section 63.24 of the Commission's rules. The report
must be mailed to Theresa Z. Cavanaugh, Acting Chief, Investigations
and Hearings Division, Enforcement Bureau, Federal Communications
Commission, 445 12th Street, S.W., Suite 4-C330, Washington, D.C.
20554. The Companies shall also transmit a copy of the report via
email to Theresa Z. Cavanaugh at Terry.Cavanaugh@fcc.gov and Kathy
Berthot at Kathy.Berthot@fcc.gov.
38. 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. 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-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payments by wire transfer may be made to ABA Number 021030004,
receiving bank Federal Reserve Bank of New York, 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). The
Companies will also send electronic notification within forty-eight
(48) hours of the date said payment is made to Terry.Cavanaugh@fcc.gov
and Kathy.Berthot@fcc.gov.
39. The written statement seeking reduction or cancellation of the
proposed forfeitures, if any, must include a detailed factual
statement supported by appropriate documentation and affidavits
pursuant to sections 1.80(f)(3) and 1.16 of the Commission's rules.
The written statement must be mailed to Theresa Z. Cavanaugh, Acting
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. The written statement should also be emailed to Theresa Z.
Cavanaugh at Terry.Cavanaugh@fcc.gov and Kathy Berthot at
Kathy.Berthot@fcc.gov.
40. 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.
41. Requests for payment of the full amount of this Notice of Apparent
Liability for Forfeiture and Order under an installment plan should be
sent to: Chief Financial Officer-Financial Operations, Federal
Communications Commission, 445 12th Street, S.W., Room 1-A625,
Washington, D.C. 20554. For answers to questions regarding payment
procedures, please contact the Financial Operations Group Help Desk at
1-877-480-3201 or Email: ARINQUIRIES@fcc.gov.
42. 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 Daniel Neal, CEO, Kajeet, Inc. and
Kajeet/Airlink, LLC, 7101 Wisconsin Ave., Suite 1111, Bethesda, MD
20814.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
47 U.S.C. S:S: 225(b)(1), 251(e)(2), 254(d).
47 C.F.R. S:S: 52.32(a), 54.706(a), 64.604(c)(5)(iii)(A).
47 U.S.C. S: 214; 47 C.F.R. S: 63.24.
47 U.S.C. S: 254(d).
47 C.F.R. S:S: 54.706(b), 54.711, 64.1195. See also 47 U.S.C. S: 254(d)
("Any other provider of interstate telecommunications may be required to
contribute to the preservation and advancement of universal service if the
public interest so requires."). Contributions are based on a contributor's
projected revenues, and individual universal service contribution amounts
that are based on quarterly filings are subject to an annual true-up. 47
C.F.R. S: 54.709(b).
47 C.F.R. S: 54.701(a).
See 47 C.F.R. S: 54.709.
See Debt Collection Improvement Act of 1996, Pub. L. No. 104-134, 110
Stat. 1321, 1358 (1996). Pursuant to the "red light rule," the Commission
withholds action on applications or other requests for benefits by
delinquent debtors and ultimately dismisses such applications or other
requests if the delinquency is not resolved. See 47 C.F.R. S: 1.1910.
See
http://www.universalservice.org/fund-administration/contributors/understanding-your-invoice/important-invoicing-deadlines.aspx.
Debt collection procedures may include further administrative efforts both
by the Commission and the United States Treasury or, as appropriate, the
Commission may refer the delinquent debt to the Department of Justice for
enforced collection action. 47 C.F.R. S: 1.1917. Collection efforts may
result in additional charges, to include interest and penalties, as
provided under 31 U.S.C. S: 3717, and administrative charges pursuant to
47 C.F.R. S:S: 1.1940, 54.713, and 31 C.F.R. S: 285.12(j).
47 U.S.C. S: 225(b)(1).
See Telecommunications Relay Services and the Americans with Disabilities
Act of 1990, Third Report and Order, 8 FCC Rcd 5300, 5301 P: 7 (1993).
Telecommunications relay services enable persons with hearing and speech
disabilities to communicate by telephone with voice-telephone users. Such
services provide telephone access to a significant number of Americans
who, without it, might not be able to make calls to or receive calls from
voice-telephone users. See Telecommunications Relay Services and
Speech-to-Speech Services for Individuals with Hearing and Speech
Disabilities, Report and Order, 15 FCC Rcd 5140, 5143 P: 5 (2000).
47 C.F.R. S:S: 64.604(c)(5)(iii)(A), 64.601(b).
47 C.F.R. S: 64.604(c)(5)(iii)(B).
Rolka Loube Saltzer Associates, LLC replaced the National Exchange Carrier
Association as the TRS Fund administrator effective July 1, 2011. See
http://www.r-l-s-a.com/TRS/.
47 U.S.C. S: 251(e)(1).
47 U.S.C. S: 251(e)(2).
47 C.F.R. S: 52.32.
47 C.F.R. S: 54.711(a).
See FCC Form 499-A Telecommunications Reporting Worksheet - Annual
Filing, http://transition.fcc.gov/Forms/Form499-A/499a2-2011.pdf (October
2011).
See Federal-State Joint Board on Universal Service, Petition for
Reconsideration filed by AT&T, Report and Order and Order on
Reconsideration, 16 FCC Rcd 5748 (2001). Carriers report their revenues
for the prior quarter by the beginning of the second month in each quarter
(i.e., February 1, May 1, August 1, and November 1). See id. at 5755, P:
19. See also FCC Form 499-Q Telecommunications Reporting Worksheet -
Quarterly Filing for Universal Service Contributors,
http://www.fcc.gov/Forms/Form499-Q/499q.pdf (April 2010).
See 47 C.F.R. S: 54.709. See also 47 C.F.R. S:S: 52.32,
64.604(c)(5)(iii)(B).
See 47 C.F.R. S: 54.711(a) ("The Commission shall announce by Public
Notice published in the Federal Register and on its website the manner of
payment and the dates by which payments must be made."); Proposed Fourth
Quarter 2011 Contribution Factor, Public Notice, 26 FCC Rcd 12943, 12946
(Managing Dir. 2011) ("Contribution payments are due on the date shown on
the invoice."). See also 47 C.F.R. S: 54.713(b) (noting that if a USF
"contributor fails to make full payment on or before the date due of ...
the monthly invoice provided by the Administrator, the payment is
delinquent."). The Act and our rules, however, do not condition payment on
receipt of an invoice or other notice from USAC. See 47 U.S.C. S: 254(d);
47 C.F.R. S: 54.706(b). A carrier that does not file required worksheets
may not receive an invoice from USAC, but is nonetheless required to
contribute to the USF, unless its revenues are considered de minimis. See
Globcom, Inc., Notice of Apparent Liability for Forfeiture and Order, 18
FCC Rcd 19893, 19896 P: 5 n.22 (2003) ("Globcom NAL") (subsequent history
omitted). The instructions for the Worksheets include tables for carriers
to determine their annual contributions. Providers whose annual
contribution is less than $10,000 are considered de minimis and exempted
from contributing to the USF. See also 47 C.F.R. S: 54.708.
47 C.F.R. S: 54.713.
47 U.S.C. S: 214(a).
47 C.F.R. S:S: 63.12, 63.18.
47 C.F.R. S: 63.24. For purposes of section 63.24 of the Commission's
rules, "an assignment of an authorization is a transaction in which the
authorization is assigned from one entity to another entity. Following an
assignment, the authorization is held by an entity other than the one to
which it was originally granted." 47 C.F.R. S: 63.24(b).
47 C.F.R. S: 63.24(e); see also 47 C.F.R. S: 63.24(d) (excluding pro forma
applications, or non-substantial assignments and transfers of control
that do not result in a change in the actual controlling party or do not
require prior Commission approval) and Note 1 to paragraph (d) (listing
the factors relevant to a determination of control).
See 47 U.S.C. S: 214(a).
Response of Kajeet, Inc. and Kajeet/Airlink, LLC to the Enforcement
Bureau's December 10, 2009 Letter of Inquiry, dated February 28, 2010, at
response to Question 3 ("LOI Response").
Id. at response to Questions 3 and 9. Most of the customers of Kajeet's
prepaid wireless service are children and the ability to make
international calls from Kajeet handsets has been disabled from all of
Kajeet handsets. Because Kajeet offers no international telecommunications
services, it does not hold an international section 214 authorization. Id.
at response to Question 12.
Id. at response to Question 10.
Id. at response to Question 9.
Letter from Trent B. Harkrader, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to David Stanek, Chief Executive
Officer, Airlink Mobile, Inc., dated August 10, 2009.
Letter from Trent B. Harkrader, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Daniel Neal, Chief Executive
Officer, Kajeet Inc. and Kajeet/Airlink LLC, dated December 10, 2009
("LOI").
See LOI Response at response to Question 18; see also Email from Stefani
Watterson, USAC, to Kathy Berthot, Attorney-Advisor, Investigations and
Hearings Division, Enforcement Bureau, FCC, dated December 16, 2010
(attaching USAC invoices and billing history for Kajeet and
Kajeet/Airlink) ("First Watterson Email"); Email from Stefani Watterson,
USAC, to Kathy Berthot, Attorney-Advisor, Investigations and Hearings
Division, Enforcement Bureau, FCC, dated February 15, 2011 (attaching USAC
invoices for Kajeet and Kajeet/Airlink) ("Second Watterson Email"); Email
from Kristin Berkland, USAC, to Kathy Berthot, Attorney-Advisor,
Investigations and Hearings Division, Enforcement Bureau, FCC, dated
October 26, 2011 ("Berkland Email"); Email from Marina Aparicio, NECA, to
Kathy Berthot, Attorney-Advisor, Investigations and Hearings Division,
Enforcement Bureau, FCC, dated January 7, 2011 (attaching NECA invoices
and payment history for Kajeet and Kajeet/Airlink) ("Aparicio Email");
Email from Karen Laffey, Neustar, Inc., to Kathy Berthot,
Attorney-Advisor, Investigations and Hearings Division, Enforcement
Bureau, FCC, dated January 24, 2011 ("First Laffey Email"); Email from
Karen Laffey, Neustar, Inc., to Kathy Berthot, Attorney-Advisor,
Investigations and Hearings Division, Enforcement Bureau, FCC, dated
October 26, 2011 ("Second Laffey Email").
See LOI Response at response to Questions 10, 12, Attachment C. The
Companies requested confidential treatment of "all of the materials
provided herein by Kajeet, which relates specifically to the acquisition
of certain assets by Kajeet/Airlink LLC." Id. at 1. Accordingly, the
details concerning Kajeet/Airlink's acquisition of certain assets of
Airlink Mobile are discussed in an Appendix hereto, and we are treating
the Appendix as confidential at this time. 47 C.F.R. S: 0.459(d)(3) ("The
Commission may defer acting on requests that materials or information
submitted to the Commission be withheld from public inspection until a
request for inspection has been made pursuant to S: 0.460 or S: 0.461. The
information will be accorded confidential treatment ... until the
Commission acts on the confidentiality request and all subsequent appeal
and stay proceedings have been exhausted.").
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).
47 U.S.C. S: 312(f)(1).
H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
See, e.g., Southern California Broadcasting Co., Memorandum Opinion and
Order, 6 FCC Rcd 4387, 4388, P: 5 (1991) ("Southern California
Broadcasting").
See, e.g., Callais Cablevision, Inc., Notice of Apparent Liability for
Monetary Forfeiture, 16 FCC Rcd 1359, 1362, P: 10 (2001) ("Callais
Cablevision") (issuing an NAL for, inter alia, a cable television
operator's repeated violation of the cable signal leakage rules).
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).
47 U.S.C. S:S: 214, 225(b)(1), 251(e)(2), 254(d).
47 C.F.R. S:S: 52.32(a), 54.706(a), 63.24, 64.604(c)(5)(iii)(A).
47 U.S.C. S: 254(d); 47 C.F.R. S: 54.706(a).
47 C.F.R. S: 54.706(a).
See id.
See LOI Response at response to Question 18.
See id.; see also First Watterson Email, Second Watterson Email, Berkland
Email. As of October 2011, Kajeet's USAC invoices reflected a credit
balance.
The apparent violations continued with each subsequent day on which Kajeet
failed to make full payment. See Globcom, Inc. d/b/a Globcom Global
Communications, Order of Forfeiture, 21 FCC Rcd 4710, 4723, P: 35 n.105
(2006) ("Globcom Forfeiture Order") ("Each failure to pay the amount due
each month constituted a violation that continued for more than 10
days."). USAC's practice is to apply partial payments to the oldest debt
carried on USAC's books first, and not the current billed amount. See
Intellicall Operator Services, Forfeiture Order, 15 FCC Rcd 21771, 21772,
P: 6 n.8 (2000). This practice was codified by the Commission in 2007. See
Comprehensive Review of the Universal Service Fund Management,
Administration, and Oversight; Federal-State Joint Board on Universal
Service; Schools and Libraries Universal Service Support Mechanism; Rural
Health Care Support Mechanism; Lifeline and Link Up; Changes to the Board
of Directors for the National Exchange Carrier Association, Inc., Report
and Order, 22 FCC Rcd 16372, 16381, P: 16 (2007); 47 C.F.R. S: 54.713(e).
Each violation is considered continuing until cured by full payment of
each monthly obligation, as provided on the corresponding invoices. See
Telrite Corp., Notice of Apparent Liability for Forfeiture and Order, 23
FCC Rcd 7231, 7238-39, P: 15 (2008) ("Telrite NAL"); Compass Global, Inc.,
Notice of Apparent Liability for Forfeiture, 23 FCC Rcd 6125, 6139-40,
P:P: 31-33 (2008) ("Compass Global NAL"); Global Crossing North America,
Inc., Notice of Apparent Liability for Forfeiture, 23 FCC Rcd 6110,
6120-22, P:P: 21-25 (2008) ("Global Crossing NAL"); VCI Company, Notice of
Apparent Liability for Forfeiture and Order, 22 FCC Rcd 15933, 15941, P:
24 & n.69 (2007); Matrix Telecom, Inc., Notice of Apparent Liability for
Forfeiture, 15 FCC Rcd 13544, 13546, P: 7 (2000); Conquest Operator
Services Corp., Order of Forfeiture, 14 FCC Rcd 12518, 12524-25, P: 16
(1999).
See First Watterson Email, Second Watterson Email.
LOI Response at response to Question 18.
Id.
Id.
See Kajeet/Airlink, LLC, 2010 FCC Form 499-A.
As set forth in detail in the attached confidential Appendix,
Kajeet/Airlink acquired the assets of a telecommunications provider in
April 2009. The instructions for the quarterly Worksheets explicitly
provide that "[w]here an entity obtains, through purchase, merger or
transfer, the telecommunications operations or customer base of a
telecommunications provider during a quarter, the acquiring company must
report all telecommunications revenues associated with such operations or
customer base including revenues billed in the quarter prior to the date
of acquisition." See FCC Form 499-Q Telecommunications Reporting Worksheet
- Quarterly Filing for Universal Service Contributors,
http://www.fcc.gov/Forms/Form499-Q/499q.pdf (April 2010). Therefore,
Kajeet/Airlink should have filed a quarterly Worksheet on May 1, 2009
which included revenues billed during the prior quarter (January 1 - March
31, 2009) and projected revenues for the upcoming quarter (July 1 -
September 30, 2009).
See supra note 22. A carrier that does not file the required Worksheets
may not receive an invoice from USAC, but is nonetheless required to
contribute to the USF, unless its revenues are considered de minimis. See
Globcom NAL, 18 FCC Rcd at 19896, P: 5 n.22. USAC included a true-up
adjustment for 2009 based on Kajeet/Airlink's late-filed 2010 Form 499-A
(reporting revenues for 2009) in three equal installments in
Kajeet/Airlink's October, November and December 2010 invoices. See Second
Watterson Email.
See First Watterson Email, Second Watterson Email. As noted above, the
violations continued with each subsequent day on which Kajeet/Airlink
failed to make full payment. See supra note 52.
See Berkland Email. As of October 2011, Kajeet/Airlink's USAC invoices
reflected a credit balance of approximately $12,000 but it had a past due
balance to USAC (in the form of delinquent debt transferred to the
Commission pursuant to the DCIA transfer process) of approximately
$39,000. See id.
47 U.S.C. S: 225; 47 C.F.R. S: 64.604(c)(5)(iii)(A).
Id. See also 47 C.F.R. S: 64.604(c)(5)(iii)(B) (setting forth methods of
computation and payment of contributions to TRS Fund).
47 C.F.R. S: 64.604(c)(5)(iii)(B).
Id. Under the Commission's rules, each subject carrier must contribute at
least $25 per year, and providers whose annual contributions are less than
$1,200 must pay the entire amount at the beginning of the contribution
period. Otherwise, providers may divide their contributions into equal
monthly payments. Id.
See Aparicio Email.
See id. The TRS Fund administrator also issued a credit adjustment invoice
to Kajeet on October 4, 2010. See id.
See id. The TRS Fund administrator did not invoice Kajeet/Airlink until
November 2010 because it filed its 2010 annual Worksheet late. See id.
See id.
47 U.S.C. S: 251(e)(2); 47 C.F.R. S: 52.32(a).
47 C.F.R. S: 52.32(a).
See First Laffey Email, Second Laffey Email.
See First Laffey Email, Second Laffey Email. The LNP administrator did not
begin invoicing Kajeet/Airlink until October 2010 because it filed its
2010 annual Worksheet late. See First Laffey Email.
See First Laffey Email, Second Laffey Email.
See First Laffey Email, Second Laffey Email.
47 U.S.C. S: 214; 47 C.F.R. S: 63.24.
47 C.F.R. S: 63.24.
47 C.F.R. S: 63.24(e).
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); Amendment of
Section 1.80(b) of the Commission's Rules, Adjustment of Forfeiture Maxima
to Reflect Inflation, Order, 23 FCC Rcd 9845 (2008).
47 U.S.C. S: 503(b)(2)(E).
47 C.F.R. S: 1.80(b)(4), Note to Paragraph (b)(4): Guidelines for
Assessing Forfeitures.
See supra para. 13.
See 47 U.S.C. S: 254(d).
See OCMC, Inc., Order of Forfeiture, 21 FCC Rcd 10479, 10482 P: 10 (2006)
("OCMC Forfeiture Order"); Globcom Forfeiture Order, 21 FCC Rcd at 4722 P:
33.
See OCMC Forfeiture Order, 21 FCC Rcd at 10482 P: 10; Globcom Forfeiture
Order, 21 FCC Rcd at 4722 P: 33.
See Telrite NAL, 23 FCC Rcd at 7245-46 P: 36 (proposing $924,212
forfeiture for, inter alia, the apparent failure to make required
universal service contributions); Compass Global NAL, 23 FCC Rcd at
6140-42 P:P: 34-38 (proposing $828,613.44 forfeiture for, inter alia, the
apparent failure to make required universal service contributions); Global
Crossing NAL, 23 FCC Rcd at 6120-23 P:P: 21-27 (proposing $10,518,013
forfeiture for, inter alia, the apparent failure to make required
universal service contributions).
We note that Kajeet's violations for the months of May through August 2009
were cured more than one year ago.
These months consist of September 2009 through December 2009, February
2010 through December 2010, and May and June 2011. See supra para. 13.
These months are January 2010 and January 2011. See supra para. 13.
See supra para. 13. This amount includes Kajeet's largest unpaid balance
to USAC plus delinquent debt transferred to the Commission pursuant to the
DCIA transfer process.
47 U.S.C. S: 225(b)(1).
See Globcom NAL, 18 FCC Rcd at 19904 P: 29.
47 U.S.C. S: 251(e)(2).
See Telrite NAL, 23 FCC Rcd at 7245 P: 34.
Kajeet/Airlink should have filed Worksheets beginning in May 2009. See
supra note 58 and accompanying text. Although the Worksheets were due on
specific dates, Kajeet/Airlink's failure to report revenue had a
continuing harmful impact on various programs because the relevant fund
administrators could not properly assess Kajeet/Airlink's payment
obligations. Kajeet/Airlink's failures to file worksheets constitute
continuing violations for which the one-year statute of limitations for
forfeitures under section 503(b)(2)(B) of the Act is tolled until the
violation is cured. See Telrite NAL, 23 FCC Rcd at 7244 P: 30. Consistent
with precedent, however, we exercise our prosecutorial discretion here and
decline to propose forfeitures for Kajeet/Airlink's failures to file
Worksheets, all of which occurred more than one year prior to the date of
this NAL. See, e.g., Omniat International Telecom, LLC d/b/a Omniat
Telecom, Notice of Apparent Liability for Forfeiture, 24 FCC Rcd 4254,
4265 P: 26 (2009); Compass Global NAL, 23 FCC Rcd at 6138 P: 29. We
caution Kajeet/Airlink and other carriers that future enforcement actions
may consider all failures to file Worksheets as continuing violations
subject to forfeiture action.
See supra para. 14. If Kajeet/Airlink had begun filing quarterly
Worksheets in May 2009, it would have received its first invoice from USAC
no later than July 2009 with its first payment due in August 2009.
These months consist of August 2009 through November 2010, and January,
March, April and May 2011. See supra para. 14.
These months are December 2010 and February 2011. See supra para. 13.
See Telrite NAL, 23 FCC Rcd at 7245 P: 34.
See 47 C.F.R. S: 1.80; Forfeiture Policy Statement, 12 FCC Rcd 17087,
17113 (1997).
See e.g., Shop at Home Holdings, Inc., Notice of Apparent Liability for
Forfeiture, 25 FCC Rcd 23, 25 P: 8 (Enf. Bur., Investigations and Hearings
Div., 2010) (proposing a $16,000 forfeiture against an entity which
acquired and operated two satellite earth stations without prior
Commission approval and failed to file a corrective application for more
than two years).
Kajeet and Kajeet/Airlink continue to have unpaid outstanding balances due
to the TRS and LNP Administrators and Kajeet/Airlink continues to have an
unpaid outstanding balance due to USAC. We note that payment of the
forfeitures proposed in this NAL does not absolve Kajeet and
Kajeet/Airlink of their obligations to pay their delinquent balances. As
discussed supra at note 9, debt collection procedures may include further
administrative efforts both by the Commission and by the United States
Treasury or, as appropriate, the Commission may refer the delinquent debt
to the Department of Justice for enforced collection action. 47 C.F.R. S:
1.1917.
47 U.S.C. S: 503(b).
47 C.F.R. S: 1.80.
See 47 C.F.R. S:S: 1.80(f)(3), 1.16.
See 47 C.F.R. S: 1.1914.
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