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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
) File No.: EB-05-IH-2348
In the Matter of
) Acct. No.: 200832080084
Telrite Corporation
) FRN: 0007-9604-20
)
)
ORDER
Adopted: April 18, 2012 Released: April 18, 2012
By the Commission:
1. In this Order, we adopt the attached Consent Decree between the
Enforcement Bureau (Bureau) of the Federal Communications Commission
(Commission) and Telrite Corporation (Telrite). The Consent Decree
terminates an investigation and Notice of Apparent Liability for
Forfeiture (NAL) by the Commission against Telrite for possible
violations of Sections 9(a)(1), 225(b)(1), 251(e)(2), and 254(d) of
the Communications Act of 1934, as amended (Act), and Sections 1.1154,
1.1157(b)(1), 52.17(a), 52.17(b), 52.32(a), 52.32(b), 54.706, 54.711,
64.604(c)(5)(iii)(A), and 64.604(c)(5)(iii)(B) of the Commission's
rules concerning the payment of annual regulatory fees; contributions
to the Universal Service Fund and Telecommunications Relay Services
Fund; contributions to cost-recovery mechanisms for North American
Numbering Plan and Local Number Portability administration; and the
submission of information as set forth on the Telecommunications
Reporting Worksheets (i.e., FCC Forms 499-A and 499-Q).
2. A copy of the Consent Decree negotiated by the Commission and Telrite
is attached hereto and incorporated herein 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 Telrite possesses 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 Sections 4(i) and 503(b)
of the Act, and Sections 0.111 and 0.311 of the 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 H. Solomon, Wilkinson Barker Knauer, LLP, 2300 N
Street, N.W., Suite 700, Washington, DC 20037.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief
Enforcement Bureau
Federal Communications Commission
Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
) File No.: EB-05-IH-2348
In the Matter of
) Acct. No.: 200832080084
Telrite Corporation
) FRN: 0007-9604-20
)
)
CONSENT DECREE
1. The Federal Communications Commission and Telrite Corporation, by
their authorized representatives, hereby enter into this Consent
Decree for the purpose of terminating the Commission's investigation
into whether Telrite violated Sections 9(a)(1), 225(b)(1), 251(e)(2),
and 254(d) of the Communications Act of 1934, as amended, and Sections
1.1154, 1.1157(b)(1), 52.17(a), 52.17(b), 52.32(a), 52.32(b), 54.706,
54.711, 64.604(c)(5)(iii)(A), and 64.604(c)(5)(iii)(B) of the
Commission's rules, concerning the following issues: (1) the
submission of information as set forth on the Telecommunications
Reporting Worksheets (i.e., FCC Forms 499-A and 499-Q); (2)
contributions to the Universal Service Fund and Telecommunications
Relay Services Fund; (3) contributions to the cost-recovery mechanisms
for North American Numbering Plan and Local Number Portability
administration; and (4) payment of annual regulatory fees.
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" 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" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
e. "Communications Laws" means collectively, the Act, the Rules, and the
published and promulgated orders and decisions of the Commission to
which Telrite is subject by virtue of its business activities.
f. "Compliance Plan" means the plan described in this Consent Decree at
paragraph 14.
g. "Covered Employees" means all employees and agents of Telrite who
perform, or supervise, oversee, or manage the performance of, duties
that relate to Telrite's responsibilities under the Communications
Laws, including the Federal Regulatory Reporting and Contribution
Rules.
h. "Effective Date" means the date on which the Commission releases the
Adopting Order.
i. "Federal Regulatory Reporting and Contribution Rules" means Sections
9, 225, 251(e)(2), and 254(d) of the Act, Sections 1.1154, 1.1157,
52.17, 52.32, 54.706, 54.711, and 64.604 of the Rules, and other
provisions of the Act, the Rules, and Commission orders governing
related federal regulatory reporting and contribution obligations.
j. "Investigation" means the investigation commenced by the Bureau's
Letters of Inquiry to Telrite dated December 15, 2005, June 9, 2006,
and November 8, 2006, seeking to determine whether Telrite had
violated, among other requirements, Sections 54.706 and 54.711 of the
Commission's rules by failing to fulfill the USF reporting and
contribution obligations applicable to telecommunications carriers.
k. "LNP" means Local Number Portability.
l. "NANP" means the North American Numbering Plan.
m. "Parties" means Telrite Corporation and the Commission, each of which
is a "Party."
n. "Rules" means the Commission's regulations found in Title 47 of the
Federal Regulations.
o. "Telrite" or "the Company" means Telrite Corporation and its
predecessors-in-interest and successors-in-interest.
p. "TRS" means Telecommunications Relay Services.
q. "USF" means the Universal Service Fund.
II. BACKGROUND
A. Federal Regulatory Reporting and Contribution Obligations
3. Pursuant to Section 254(d) of the Act and Sections 54.706 and 54.711
of the Rules, telecommunications service providers that provide
interstate telecommunications services are required to file annual and
quarterly Telecommunications Reporting Worksheets (FCC Form 499-A and
FCC Form 499-Q) and contribute to the federal USF.
4. Pursuant to Section 225(b)(1) of the Act and Section 64.604 of the
Rules, providers of interstate telecommunications services are
required to contribute to the TRS Fund.
5. Pursuant to Section 251(e) of the Act and Sections 52.17 and 52.32 of
the Rules, telecommunications service providers are required to
contribute to the costs of establishing numbering administration and
local number portability.
6. Pursuant to Section 9(a)(1) of the Act and Sections 1.1154 and 1.1157
of the Rules, interstate telecommunications carriers are required to
pay regulatory fees.
B. Investigation
7. Telrite is a Georgia-based toll reseller providing interstate and
information services to residential and business customers nationwide,
and is subject to the requirements discussed in paragraphs 3 through
6, above. Following Telrite's purchase of Onestar Long Distance, Inc.
in 2004, the Universal Service Administrative Company (USAC) referred
Telrite to the Bureau for potential enforcement action, alleging that
Telrite had failed to comply with the Commission's USF contribution
and reporting rules. The Bureau issued Letters of Inquiry to Telrite
dated December 15, 2005, June 9, 2006, and November 8, 2006, seeking
information about Telrite's compliance with its regulatory
obligations. Telrite submitted responses to the Bureau's inquiries,
and on July 10, 2006, Telrite admitted that it had failed to
accurately report revenue data on its annual Form 499-A filed in March
2006.
8. On April 17, 2008, the Commission released a Notice of Apparent
Liability for Forfeiture & Order finding Telrite apparently liable for
a forfeiture of $924,212. Telrite filed a Statement Seeking Reduction
of Proposed Forfeiture on June 2, 2008.
9. As of the Effective Date, Telrite has paid all invoiced amounts to the
USF, TRS Fund, cost recovery mechanisms for NANP and LNP
administration, and regulatory fees, as discussed above.
III. TERMS OF AGREEMENT
10. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Commission by
incorporation of such provisions by reference in the Adopting Order.
11. Jurisdiction. Telrite agrees that the Commission has jurisdiction over
it and the matters contained in this Consent Decree and has the
authority to enter into and adopt this Consent Decree.
12. 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 Commission. Any violation of the
Adopting Order or of the terms of this Consent Decree shall constitute
a separate violation of a Commission Order, entitling the Commission
to exercise any rights and remedies attendant to the enforcement of a
Commission order.
13. Termination of Investigation. In express reliance on the covenants and
representations in this Consent Decree and to avoid further
expenditure of public resources, the Commission agrees to terminate
its Investigation. In consideration for the termination of said
Investigation, Telrite agrees to the terms, conditions, and procedures
contained herein. The Commission further agrees that, in the absence
of new material evidence, the Commission will not use the facts
developed in this Investigation through the Effective Date, 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 Telrite concerning the matters that were the subjects
of the Investigation. The Commission also agrees that it will not use
the facts developed in this Investigation through the Effective Date,
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 Telrite with respect to Telrite's basic
qualifications, including its character qualifications, to be a
Commission licensee or hold Commission authorizations.
14. Compliance Plan. For purposes of settling the matters set forth
herein, Telrite agrees to develop and implement a Compliance Plan to
help ensure future compliance with the Communications Laws, including
the Federal Regulatory Reporting and Contribution Rules, and with the
terms and conditions of this Consent Decree. The Compliance Plan must
include, without limitation, the following components:
a. Compliance Officer. Within thirty (30) calendar days of the Effective
Date, Telrite will designate a senior corporate manager with the
requisite corporate and organizational authority to serve as a
Compliance Officer and to discharge the duties set forth below. The
person designated as the Compliance Officer shall be responsible for
developing, implementing, and administering the Compliance Plan and
ensuring that Telrite complies with the terms and conditions of the
Compliance Plan and this Consent Decree. In addition to the general
knowledge of the Communications Law necessary to discharge his/her
duties under this Consent Decree, the Compliance Officer shall have
specific knowledge of the Federal Regulatory Reporting and
Contribution Rules.
b. Compliance Manual. Within sixty (60) calendar days of the Effective
Date, the Compliance Officer will develop and distribute a Compliance
Manual to all Covered Employees. The Compliance Manual shall explain
Communications Laws that apply to Telrite and the Federal Regulatory
Reporting and Contribution Rules, including (i) the payment of annual
regulatory fees; (ii) contributions to the USF and TRS Fund; (iii)
contributions to cost-recovery mechanisms for NANP and LNP
administration; and (iv) the submission of information as set forth on
the Telecommunications Reporting Worksheets. The Compliance Manual
will also set forth a schedule of filing and payment dates associated
with these regulatory reporting and contribution obligations. Telrite
will create compliance notifications that alert Telrite personnel to
upcoming filing and payment dates. The Compliance Manual will require
personnel to contact Telrite's Compliance Officer, and if appropriate,
regulatory legal counsel, with any questions or concerns that arise
with respect to Telrite's federal regulatory reporting and
contribution obligations. Telrite shall periodically review and revise
the Compliance Manual as necessary to ensure that the information set
forth therein remains current and accurate. Telrite shall distribute
any revisions to the Compliance Manual promptly to Covered Employees.
c. Compliance Training Program. Telrite shall establish and conduct a
training program on compliance with the Federal Regulatory Reporting
and Contribution Rules and other Communications Laws. As part of the
Compliance Training Program, Covered Employees shall be advised of
Telrite's obligation to report any noncompliance with the Regulatory
Reporting and Contribution Rules under paragraph 15 of this Consent
Decree and shall be instructed on how to disclose noncompliance to the
Compliance Officer. All Covered Employees shall be trained pursuant to
the Compliance Training Program within sixty (60) calendar days after
the Effective Date, except that any person who becomes a Covered
Employee at any time after the Effective Date shall be trained within
thirty (30) calendar days after the date such person becomes a Covered
Employee. Telrite shall repeat the compliance training on an annual
basis, and shall periodically review and revise the Compliance
Training Program as necessary to ensure that it remains current and
complete and to enhance its effectiveness.
15. Reporting Noncompliance. Telrite shall report any noncompliance with
the Federal Regulatory Reporting and Contribution Rules and with the
terms and conditions of this Consent Decree within fifteen (15)
calendar days after discovery of such noncompliance. Such reports
shall include a detailed explanation of (i) each instance of
noncompliance; (ii) the steps that Telrite has taken or will take to
remedy such noncompliance; (iii) the schedule on which such remedial
actions will be taken; and (iv) the steps that Telrite has taken or
will take to prevent the recurrence of any such noncompliance. All
reports of noncompliance shall be submitted to the Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, Room 4-C330, 445 12th Street, S.W.
Washington, D.C. 20554, with a copy submitted electronically to
Theresa Z. Cavanaugh at Terry.Cavanaugh@fcc.gov and to Mindy Littell
at Mindy.Littell@fcc.gov. The reporting obligations set forth in this
paragraph 15 of the Consent Decree shall expire thirty-six (36) months
after the Effective Date.
16. Compliance Reports. Telrite shall file compliance reports with the
commission ninety (90) calendar days after the effective date, twelve
(12) months after the Effective Date, and twenty-four (24) months
after the Effective Date, and thirty-six (36) months after the
Effective Date.
a. Each compliance report shall include a detailed description of
Telrite's efforts during the relevant period to comply with the terms
and conditions of this Consent Decree and the Federal Regulatory
Reporting and Contribution Rules. In addition, each Compliance Report
shall include a certification by the Compliance Officer, as an agent
of and on behalf of Telrite, stating that the Compliance Officer has
personal knowledge that Telrite (i) has established and implemented
the Compliance Plan and (ii) is not aware of any instances of
noncompliance with the terms and conditions of this Consent Decree,
including the reporting obligations set forth in paragraph 15 of this
Consent Decree.
b. The Compliance Officer's certification shall be accompanied by a
statement explaining the basis for such certification and 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 in Section
1.16.
c. If the Compliance Officer cannot provide the requisite certification,
the Compliance Officer, as an agent of and on behalf of Telrite, shall
provide the Commission with a detailed explanation of the reason(s)
why and describe fully (i) each instance of noncompliance; (ii) the
steps that Telrite has taken or will take to remedy such
noncompliance, including the schedule on which proposed remedial
actions will be taken; and (iii) the steps that Telrite has taken or
will take to prevent the recurrence of any such noncompliance,
including the schedule on which such preventive action will be taken.
d. All Compliance Reports shall be submitted to the Chief, Investigations
& Hearings Division, Enforcement Bureau, Federal Communications
Commission, 445 12th Street, S.W., Washington, D.C. 20554, with a copy
submitted electronically to Theresa Z. Cavanaugh at
Terry.Cavanaugh@fcc.gov and to Mindy Littell at Mindy.Littell@fcc.gov.
e. Termination Date. Unless state otherwise, the requirements of this
Compliance Plan shall expire thirty-six (36) months after the
Effective Date.
17. Section 208 Complaints: Subsequent Investigations. Nothing in this
Consent Decree shall prevent the Commission or its delegated authority
from adjudicating complaints filed pursuant to Section 208 of the Act
against Telrite or its affiliates for alleged violations of the Act,
or for any other type of alleged misconduct, regardless of when such
misconduct took place. The Commission's adjudication of any such
complaint will be based solely on the record developed in that
proceeding. Except as expressly provided in this Consent Decree, this
Consent Decree shall not prevent the Commission from investigating new
evidence of noncompliance by Telrite with the Communications Laws.
18. Voluntary Contribution. Telrite agrees that it will make a voluntary
contribution to the United States Treasury in the amount of five
hundred and twenty-five thousand dollars ($525,000). The contribution
will be made within thirty (30) calendar days after the Effective Date
of the Adopting Order. The payment 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 No.
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. An FCC Form 159 (Remittance Advice) must be
submitted with the payment. 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).
Telrite will also send electronic notification to Theresa Z. Cavanaugh
at Terry.Cavanaugh@fcc.gov, Pamela S. Kane at Pamela.Kane@fcc.gov, and
Mindy Littell at Mindy.Littell@fcc.gov on the date said payment is
made.
19. Waivers. Telrite waives any and all rights it 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 Commission issues the Adopting
Order adopting the Consent Decree without change, addition,
modification, or deletion. Telrite 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 Telrite nor the Commission shall contest the
validity of the Consent Decree or the Adopting Order, and Telrite
shall waive any statutory right to a trial de novo. Telrite hereby
agrees to waive any claims it may otherwise have under the Equal
Access to Justice Act, relating to the matters addressed in this
Consent Decree.
20. 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.
21. 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 Telrite does not expressly
consent) that provision will be superseded by such Commission rule or
order.
22. Successors and Assigns. Telrite agrees that the provisions of this
Consent Decree shall be binding on its successors, assigns, and
transferees.
23. 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 Communications Laws.
24. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
25. 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.
26. Authorized Representative. The individual signing this Consent Decree
on behalf of Telrite represents and warrants that he is authorized by
Telrite to execute this Consent Decree and to bind Telrite to the
obligations set forth herein. The FCC signatory represents that she is
signing this Consent Decree in her official capacity and that she is
authorized to execute this Consent Decree.
27. 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.
________________________________
P. Michele Ellison
Chief
Enforcement Bureau
Federal Communications Commission
________________________________
Date
________________________________
R. P. McFarland
Chief Executive Officer
Telrite Corporation
________________________________
Date
47 U.S.C. S:S: 159(a)(1), 225(b)(1), 251(e)(2), 254(d).
47 C.F.R. S:S: 1.1154, 1.1157(b)(1), 52.17(a), 52.17(b), 52.32(a),
52.32(b), 54.706, 54.711, 64.604(c)(5)(iii)(A), 64.604(c)(5)(iii)(B).
47 U.S.C. S:S: 154(i), 503(b).
47 C.F.R. S:S: 0.111, 0.311.
47 U.S.C. S:S: 159(a)(1), 225(b)(1), 251(e)(2), 254(d).
47 C.F.R. S:S: 1.1154, 1.1157(b)(1), 52.17(a), 52.17(b), 52.32(a),
52.32(b), 54.706, 54.711, 64.604(c)(5)(iii)(A), 64.604(c)(5)(iii)(B).
47 U.S.C. S:S: 159, 225, 251(e)(2), 254(d).
47 C.F.R. S:S: 1.1154, 1.1157, 52.17, 52.32, 54.706, 54.711, 64.604.
Letter from Hillary S. DeNigro, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Telrite Corporation (Dec. 15, 2005)
(Initial LOI).
Letter from Hillary S. DeNigro, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Michael Geoffroy, Corporate Counsel,
Telrite Corporation (June 9, 2006) (Second LOI).
Letter from Trent Harkrader, Deputy Chief, Investigations & Hearings
Division, Enforcement Bureau, FCC, to Michael Geoffroy, Corporate Counsel,
Telrite Corporation (November 8, 2006) (Third LOI).
47 C.F.R. S:S: 54.706 and 54.711.
See 47 U.S.C. S: 254(d); 47 C.F.R. S:S: 54.706, 54.711.
See 47 U.S.C. S: 225(b)(1); 47 C.F.R. S: 64.604.
See 47 U.S.C. S: 251(e); 47 C.F.R. S:S: 52.17, 52.32.
See 47 U.S.C. S: 159(a)(1); 47 C.F.R. S:S: 1.1154, 1.1157.
See Initial LOI, n.5, supra.
See Second LOI, n.6, supra.
See Third LOI, n.7, supra.
Letter from Michael G. Geoffroy, Corporate Counsel, Telrite Corporation,
to Christopher Shields, Enforcement Bureau, Federal Communications
Commission (July 10, 2006).
Telrite Corporation, Notice of Apparent Liability for Forfeiture and
Order, 23 FCC Rcd 7231(2008) (NAL).
Telrite Corporation's Statement Seeking Reduction of Proposed Forfeiture
(June 2, 2008).
47 C.F.R. S: 1.16.
See 47 U.S.C. S: 208.
See 5 U.S.C. S: 504; 47 C.F.R. Part 1, Subpart K.
Federal Communications Commission DA 12-612
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Federal Communications Commission DA 12-612