Click here for Adobe Acrobat version
Click here for Microsoft Word version
********************************************************
NOTICE
********************************************************
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
*****************************************************************
Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of ) File No.: EB-07-SE-310
Cardinal Broadband, LLC, ) NAL/Acct. No.:
aka Sovereign Telecommunications, 200832100070
)
a wholly owned subsidiary of Cardinal FRN: 0018035063
Communications, Inc. )
)
forfeiture ORDER
Adopted: July 13, 2012 Released: July 13, 2012
By the Chief, Enforcement Bureau:
I. introduction
1. In this Forfeiture Order, we issue a monetary forfeiture in the amount
of twenty-five thousand dollars ($25,000) to Cardinal Broadband, LLC,
aka Sovereign Telecommunications, a wholly-owned subsidiary of
Cardinal Communications, Inc., for its willful and repeated violation
of Section 9.5(b) of the Federal Communication Commission's rules
(Rules). The noted violation involves Cardinal's failure to provide
E911 service (for more than two months) in connection with its Voice
over Internet Protocol (VoIP) offering. This Forfeiture Order furthers
the Commission's longstanding and continuing commitment to promoting
E911 service to help ensure the safety and welfare of all Americans.
II. BACKGROUND
2. On August 15, 2008, the Enforcement Bureau (Bureau) of the Federal
Communications Commission (FCC or Commission) issued a Notice of
Apparent Liability for Forfeiture to Cardinal in the amount of $25,000
for its apparent violation of Section 9.5 of Rules by failing to
provide E911 service. The Bureau's investigation into this matter was
initiated by a complaint that Cardinal, an interconnected VoIP service
provider, was not providing E911 service to residents of a condominium
complex called Millstone in Golden, Colorado. Specifically, the
complaint alleged that residents of the condominium complex could not
make E911 calls and could not reach their local police department. In
the VoIP E911 NAL, the Bureau determined that Cardinal was subject to
the requirements of Section 9.5 as a provider of interconnected VoIP
services and that Cardinal failed to provide compliant E911 service.
3. Cardinal submitted a single response to both the VoIP E911 NAL and the
Section 1.17 NAL. In this Consolidated NAL Response, Cardinal disputes
the finding in the VoIP E911 NAL that it is an interconnected VoIP
service provider. Cardinal also contends that the failure to provide
compliant E911 service was the fault of Prime Time Communications, the
third party whose VoIP service Cardinal was reselling at the Millstone
condominium complex. Cardinal further asserts that no violation
occurred during the one year period prior to the issuance of the VoIP
E911 NAL and that its actions were neither "willful" nor "repeated."
Finally, Cardinal requests cancellation or reduction of the proposed
forfeiture on the ground that payment would pose a financial hardship.
III. Discussion
4. The proposed forfeiture amount in this case was assessed in accordance
with Section 503(b) of the Communications Act of 1934, as amended (the
Act), Section 1.80 of the Rules, and the Forfeiture Policy Statement.
In examining Cardinal's Consolidated NAL Response, Section 503(b) of
the Act requires that the Commission 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 other such matters as justice may
require. As discussed below, we have considered Cardinal's response in
light of these statutory factors and find that neither cancellation
nor reduction of the forfeiture is warranted.
A. Failure to provide interconnected VoIP service
5. Section 9.5(b)(1) of the Rules states, in relevant part, that
"[i]nterconnected VoIP service providers must, as a condition of
providing service to a consumer, provide that consumer with E911
service as described in this section." As set forth in the VoIP E911
NAL, the Bureau determined that Cardinal was subject to the
requirements of Section 9.5 "as a provider of interconnected VoIP
services" and that Cardinal failed to provide compliant E911 service.
6. In its Consolidated NAL Response, Cardinal again argues that the
service it provides does not meet the definition of "interconnected
VoIP service." The Bureau previously considered and properly rejected
this argument in the VoIP E911 NAL. As the Bureau noted, the
"Commission made no distinction between providers who own and operate
their own facilities, services, or networks, and those who outsource
some or all of those functions to others." Cardinal presents no
additional arguments and no new evidence that would alter our
conclusion that, as a reseller of VoIP service, Cardinal was a
provider of interconnected VoIP within the meaning of Section 9.5 of
the Rules and therefore was obligated to provide fully compliant E911
service.
7. We also find unpersuasive Cardinal's argument that no forfeiture
should be imposed for its violation of Section 9.5(b) because the
failure to provide E911 service to the Millstone condominium community
was the fault of Prime Time Communications, the third party whose
interconnected VoIP service Cardinal resold. In this instance,
Cardinal has acknowledged that it resells interconnected VoIP service
at the Millstone condominium community. As a consequence, Cardinal was
a provider of interconnected VoIP service and was responsible for its
compliance with Section 9.5. Moreover, the Commission has consistently
"refused to excuse licensees from forfeiture penalties where the
actions of employees, independent contractors, or agents have resulted
in violations."
8. In addition, we reject Cardinal's claim that its violation of Section
9.5(b) was not "willful" because Cardinal "tried to immediately remedy
the situation once made aware of it." Section 312(f)(1) of the Act,
which applies to violations for which forfeitures are assessed under
Section 503(b) of the Act, provides that "[t]he term `willful', ...
means the conscious and deliberate commission or omission of such act,
irrespective of any intent to violate any provision of this Act or any
rule or regulation of the Commission authorized by this Act ...."
Cardinal's subsequent remedial measures, while laudable, are
irrelevant to whether its actions were "willful" within the meaning of
Section 312(f)(1) of the Act.
9. We similarly reject Cardinal's assertion that its violation of Section
9.5(b) of the Rules was not "repeated." Section 312(f)(2) of the Act
provides that "[t]he term `repeated,' ... means the commission or
omission of such act more than once or, if such commission or omission
is continuous, for more than one day." As noted below, the record
before us establishes that Cardinal's violation of Section 9.5(b)
spanned multiple days (more than two months), continuing until as late
as October 23, 2007.
A. Proposed forfeiture consistent with Section 503(b)(6)
10. In its Consolidated NAL Response, Cardinal also argues for the first
time that E911 service at the Millstone condominium "was fixed in
early August of 2007[,]" two months earlier than Cardinal indicated in
its prior sworn statements. On this basis, Cardinal claims that it is
"not aware of a violation that occurred during the [one] year prior to
issuance of this NAL[.]" While Section 503(b)(6) of the Act bars the
Commission from proposing a forfeiture for violations that occurred
more than one year prior to the issuance of a notice of apparent
liability for forfeiture, we do not find Cardinal's latest claim to be
credible or reliable; it is exceedingly general (referring only to
"early August of 2007"), is unsupported by any documentary evidence,
and contradicts detailed, sworn information Cardinal provided to the
Bureau during the course of the investigation.
11. Specifically, Cardinal had previously declared under penalty of
perjury that it switched its VoIP service provider from Prime Time
Communications to Simple Signal in July 2007, that Simple Signal
"began" servicing customers at the Millstone condominium community on
August 15, 2007, and that all VoIP customers at the Millstone
condominium were provided E911-compliant service "by or before October
23, 2007." In the absence of any documentary evidence to counter
Cardinal's initial report, or even an explanation of the conflicting
claims on when compliant E911 service commenced, we have no basis on
which to conclude that Cardinal's earlier sworn statements are
inaccurate or that Cardinal provided fully compliant E911 service
prior to August 15, 2007. Regardless of whether Cardinal's violation
of Section 9.5(b) ended on August 15, 2007 or October 23, 2007, the
VoIP E911 NAL was issued within the one year statute of limitations in
accordance with the requirements of Section 503(b)(6) of the Act.
A. Lack of a basis for reduction of the proposed forfeiture
12. Finally, Cardinal asserts that payment of the proposed forfeiture
would pose a financial hardship. The Commission has determined that,
in general, gross revenues are the best indicator of an ability to pay
a forfeiture. In addition, and as detailed in the instructions
provided in the VoIP E911 NAL, "[c]laims of inability to pay should be
supported by tax returns or other financial statements prepared under
generally accepted accounting procedures for the most recent three
year period." Cardinal only submitted financial statements covering
the eight-month period, January through August 2008. Moreover,
Cardinal's revenues, as reflected in the limited financial statements
it did submit, would not warrant a reduction of the forfeiture amount.
iV. ordering clauses
13. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the Act
and Sections 0.111, 0.311, and 1.80 of the Rules, Cardinal Broadband,
LLC IS LIABLE FOR A FORFEITURE in the amount of twenty-five thousand
dollars ($25,000) for failing to provide compliant E911 service in
willful and repeated violation of Section 9.5(b) of the Rules.
14. Payment of the forfeiture shall be made in the manner provided for in
Section 1.80 of the Rules within ten (10) calendar days after the
release date of this Forfeiture Order. If the forfeiture is not paid
within the period specified, the case may be referred to the U.S.
Department of Justice for enforcement of the forfeiture pursuant to
Section 504(a) of the Act. Cardinal shall send electronic
notification of payment to Josh Zeldis at Josh.Zeldis@fcc.gov and
Samantha Peoples at Sam.Peoples@fcc.gov on the date said payment is
made.
15. The payment must be made by check or similar instrument, wire
transfer, or credit card, and must include the NAL/Account number and
FRN referenced above. Regardless of the form of payment, a completed
FCC Form 159 (Remittance Advice) must be submitted. When completing
the FCC Form 159, enter the Account Number in block number 23A (call
sign/other ID) and enter the letters "FORF" in block number 24A
(payment type code). Below are additional instructions you should
follow based on the form of payment you select:
* Payment by check or money order must be made payable to the order of
the Federal Communications Commission. Such payments (along with the
completed Form 159) must be mailed to Federal Communications
Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent
via overnight mail to U.S. Bank - Government Lockbox #979088,
SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101.
* Payment by wire transfer must be made to ABA Number 021030004,
receiving bank TREAS/NYC, and Account Number 27000001. To complete
the wire transfer and ensure appropriate crediting of the wired funds,
a completed Form 159 must be faxed to U.S. Bank at (314) 418-4232 on
the same business day the wire transfer is initiated.
* Payment by credit card must be made by providing the required credit
card information on FCC Form 159 and signing and dating the Form 159
to authorize the credit card payment. The completed Form 159 must then
be mailed to Federal Communications Commission, P.O. Box 979088, St.
Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank -
Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St.
Louis, MO 63101.
16. Any request for full payment 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. If you have questions regarding payment
procedures, please contact the Financial Operations Group Help Desk by
phone, 1-877-480-3201, or by e-mail, ARINQUIRIES@fcc.gov.
17. IT IS FURTHER ORDERED that a copy of this Forfeiture Order shall be
sent by first class mail and certified mail return receipt requested
to Jon Bartlett, President, Cardinal Broadband, LLC, 2150 West 6th
Avenue, Suite H, Broomfield, CO 80020 and to Michael Wasik, Chairman
and CEO, Roomlinx, Inc., 2150 West 6th Avenue, Suite H, Broomfield, CO
80020.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau
Cardinal Broadband, LLC (Cardinal) was formed in 2005 as a Colorado
limited liability company. On October 1, 2010, pursuant to an acquisition
by Roomlinx, Inc. of Cardinal's parent, Roomlinx, Inc. became the sole
member of Cardinal. See Roomlinx, Inc., Annual Report (Form 10-K), at 50
(Mar. 30, 2012).
47 C.F.R. S: 9.5(b).
In the Matter of E911 Enabled Services; E911 Requirements for IP-Enabled
Service Providers, WC Docket No. 04-36, WC Docket No. 05-196, First Report
and Order and Notice of Proposed Rulemaking, 20 FCC Rcd 10245, 10246,
para. 5 (2005).
Cardinal Broadband, LLC, Notice of Apparent Liability for Forfeiture and
Order, 23 FCC Rcd 12224 (Enf. Bur. 2008) (VoIP E911 NAL). In a matter
closely related to the VoIP E911 NAL, the Bureau issued a Notice of
Apparent Liability for Forfeiture to Cardinal in the amount of $25,000 for
its apparent violation of Section 1.17(a)(2) of the Rules by providing
incorrect material factual information to the Commission without a
reasonable basis for believing that the information was correct and
accurate. Cardinal Broadband, LLC, Notice of Apparent Liability for
Forfeiture, 23 FCC Rcd 12233 (Enf. Bur. 2008) (Section 1.17 NAL). In a
companion decision issued concurrently with this Forfeiture Order, we
affirm the Section 1.17 NAL.
VoIP E911 NAL, 23 FCC Rcd at 12227-12228, paras. 9, 12.
See Letter from Ed Garneu, Manager, Cardinal Broadband, LLC, to Spectrum
Enforcement Division, FCC Enforcement Bureau (Oct. 10, 2008) (Consolidated
NAL Response) at 1-2.
Consolidated NAL Response at 2.
Id. at 1-2.
Id. at 2.
Id. at 3.
47 U.S.C. S: 503(b).
47 C.F.R. S: 1.80.
The Commission's Forfeiture Policy Statement and Amendment of Section 1.80
of the Rules to Incorporate the Forfeiture Guidelines, Report and Order,
12 FCC Rcd 17087 (1997), recon. denied, 15 FCC Rcd 303 (1999) (Forfeiture
Policy Statement).
47 U.S.C. S: 503(b)(2)(E).
47 C.F.R. S: 9.5(b)(1); IP-Enabled Services and E911 Requirements for
IP-Enabled Service Providers, First Report and Order and Notice of
Proposed Rulemaking, 20 FCC Rcd 10245, 10266, para. 37 (2005) (VoIP 911
Order), aff'd sub nom. Nuvio v. FCC, 473 F.3d 302 (D.C. Cir. 2006). See
also, 47 C.F.R. S: 9.5(a) (making the E911 service requirements
"applicable to providers of interconnected VoIP services"). An
interconnected VoIP service is a service that: (1) enables real-time,
two-way voice communications; (2) requires a broadband connection from the
user's location; (3) requires Internet Protocol-compatible customer
premises equipment; and (4) permits users generally to receive calls that
originate on the public switched telephone network (PSTN) and to terminate
calls to the PSTN. See 47 C.F.R. S: 9.3; see also VoIP 911 Order, 20 FCC
Rcd at 10257-10258, para. 24.
VoIP E911 NAL, 23 FCC Rcd at 12227, para. 9.
Id. at 12228, para. 12.
Consolidated NAL Response at 2.
VoIP E911 NAL, 23 FCC Rcd at 12226-12228, paras. 8-12. In response to the
Bureau's inquiries, Cardinal argued that it "do[es] not provide
interconnected VoIP service," but has acknowledged that it resells
interconnected VoIP service. See Letter from Edward A. Garneau, Chief
Executive Officer, Cardinal Communications, Inc., and Ronald S. Bass,
Principal Accounting Officer, Cardinal Communications, Inc., to Kathryn S.
Berthot, Chief, Spectrum Enforcement Division, FCC Enforcement Bureau, and
Thomas D. Fitz-Gibbon, Esq., Spectrum Enforcement Division, FCC
Enforcement Bureau (Oct. 9, 2007) at 3. In the VoIP E911 NAL, the Bureau
stated that it was not clear from the information provided by Cardinal
whether the company was a "reseller" or primary provider of interconnected
VoIP service. See VoIP E911 NAL, 23 FCC Rcd at 12227, para. 9. The Bureau
concluded, however, that "[w]e do not need to decide this issue ...
because even assuming that Cardinal resells interconnected VoIP service,
it is nevertheless subject to the requirements in section 9.5 of the
Commission's rules as a provider of interconnected VoIP services." Id.
VoIP E911 NAL, 23 FCC Rcd at 12227, para. 9.
Consolidated NAL Response at 2.
See Letter from Ronald S. Bass, Principal Accounting Officer, Cardinal
Communications, Inc., to Thomas D. Fitz-Gibbon, Esq., Spectrum Enforcement
Division, FCC Enforcement Bureau (Jan. 7, 2008) (January 7 Response) at 4.
See VoIP E911 NAL, 23 FCC Rcd at 12227, para. 9.
See, e.g., Eure Family Limited Partnership, Memorandum Opinion and Order,
17 FCC Rcd 21861, 21863-64, para. 7 (2002) (concluding that an antenna
structure owner was responsible for the willful acts and omissions of its
contractor when the contractor failed to monitor obstruction lights to
ensure compliance with the Commission's Rules); Triad Broadcasting
Company, Inc., Memorandum Opinion and Order, 96 FCC 2d 1235, 1244, para.
21 (1984) (determining that Commission licensee could not escape
forfeiture liability where actions by its legal counsel resulted in
Commission violations).
Consolidated NAL Response at 2.
47 U.S.C. S: 312(f)(1). See Southern California Broadcasting Co.,
Memorandum Opinion and Order, 6 FCC Rcd 4387 (1991).
The Commission has repeatedly held that post-violation corrective measures
are not sufficient to avoid liability. See, e.g., AT&T Wireless Services,
Inc., Forfeiture Order, 17 FCC Rcd 21866, 21870-71, para. 14 (2002);
America's Tele-Network Corp., Order of Forfeiture, 16 FCC Rcd 22350,
22355, para. 13 (2001); Coleman Enters., Inc. d/b/a/ Local Long Distance,
Inc., Order of Forfeiture, 15 FCC Rcd 24385, 24388, para. 8 (2000).
Consolidated NAL Response at 2.
47 U.S.C. S: 312(f)(2). See Callais Cablevision, Inc., Notice of Apparent
Liability for Forfeiture, 16 FCC Rcd 1359, 1362, para. 9 (2001); Southern
California, 6 FCC Rcd at 4388, para. 5.
January 7 Response at 4. Even assuming, however, that fully compliant E911
service was provided to the Millstone condominium community at an earlier
date (i.e., on August 15, 2007), see infra paras. 10-11, Cardinal has
acknowledged that multiple customers at the Millstone condominium property
experienced E911 service problems. Id. (stating that the service offered
at the Millstone condominium community included "30 telephone numbers
servicing 28 customers"). Cardinal therefore would have repeatedly
violated the rule as to multiple customers.
Consolidated NAL Response at 2
Id.
47 U.S.C. S: 503(b)(6).
January 7 Response at 4.
Id.
Consolidated NAL Response at 3.
See PJB Communications of Virginia, Inc., Forfeiture Order, 7 FCC Rcd
2088, 2089, para. 8 (1992) (forfeiture not deemed excessive where it
represented approximately 2.02 percent of the violator's gross revenues);
Local Long Distance, Inc., Forfeiture Order, 16 FCC Rcd 24385 (2000)
(forfeiture not deemed excessive where it represented approximately 7.9
percent of the violator's gross revenues); Hoosier Broadcasting
Corporation, Forfeiture Order, 15 FCC Rcd 8640 (2002) (forfeiture not
deemed excessive where it represented approximately 7.6 percent of the
violator's gross revenues).
See VoIP E911 NAL, 23 FCC Rcd at 12232, para. 24.
Based on established precedent, the $25,000 forfeiture proposed in the
VoIP E911 NAL is not excessive in comparison to Cardinal's reported gross
revenues. See supra note 37.
47 U.S.C. S: 503(b).
47 C.F.R. S:S: 0.111, 0.311, 1.80.
Id. S: 1.80.
47 U.S.C. S: 504(a).
An FCC Form 159 and detailed instructions for completing the form may be
obtained at http://www.fcc.gov/Forms/Form159/159.pdf.
See 47 C.F.R. S: 1.1914.
(Continued from previous page)
(continued ...)
Federal Communications Commission DA 12-1123
Federal Communications Commission DA 12-1123