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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
In the Matter of
) File No.: EB-11-IH-0057
Start Wireless Group, Inc.
) NAL/Acct. No.: 201232080013
d/b/a Page Plus Cellular
) FRN: 0016871113
Apparent Liability for Forfeiture
)
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: January 19, 2012 Released: January 19, 2012
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Start Wireless Group, Inc., d/b/a Page Plus Cellular ("Page
Plus"), apparently willfully and repeatedly violated Section 214 of
the Communications Act of 1934, as amended (the "Act"), and Section
63.18 of the Commission's rules by providing international
telecommunications service without a Section 214 certificate of
authorization from the Commission. Based on our review of the facts
and circumstances surrounding this matter, and for the reasons
discussed below, we find that Page Plus is apparently liable for a
total forfeiture of $100,000.
II. BACKGROUND
2. Section 214(a) of the Act prohibits any carrier from constructing,
extending, acquiring, or operating any line, and from engaging in
transmission over any such line, without first obtaining a certificate
of authorization from the Commission. While the Commission has granted
"blanket" authority for carriers to provide domestic service, meaning
that such carriers need not apply individually for such authority, the
Commission has not extended blanket authority to providers of
international telecommunications services. Section 63.18 of the
Commission's rules requires any carrier that seeks Section 214
authority "for provision of common carrier communication services
between the United States, its territories or possessions, and a
foreign point" to request such authority by application." This
requirement applies to, among others, carriers that resell the
international services of other authorized carriers, and to providers
of international commercial mobile radio service.
3. Page Plus is an Ohio corporation, incorporated on March 13, 2003.
According to its submissions, as part of its business, Page Plus sells
prepaid phone cards with minutes purchased from Cellco Partnership
d/b/a Verizon Wireless. Page Plus sells some of these cards directly
to end-user customers through its www.pagepluscellular.com website.
These calling cards enable consumers to make domestic and
international telephone calls. Page Plus provided international
telecommunications service through its calling card business from its
incorporation in 2003 until 2011 without obtaining an international
214 authorization, as required by the Act.
4. On October 14, 2010 the Enforcement Bureau ("Bureau") issued a letter
of inquiry ("LOI") to Page Plus requesting information concerning
potential violations of Section 214 of the Act and Section 63.18 of
the Commission's rules. At the time the Bureau initiated its
investigation, a review of the Commission's International Bureau
Filing System ("IBFS") database revealed no record that Page Plus had
applied for or obtained an international Section 214 authorization. On
November 23, 2010, in its LOI Response, Page Plus confirmed that it
held no international 214 authorization.
5. On December 14, 2010, after having provided international
telecommunications service for over eight years without Commission
authorization, Page Plus simultaneously filed an application for
Special Temporary Authority ("STA") to provide international service
and an application for an international Section 214 authorization. On
January 20, 2011, the Commission's International Bureau ("IB") granted
Page Plus's application for STA. On February 4, 2011, without
prejudice to any enforcement action by the Commission for prior
non-compliance, IB granted Page Plus a Section 214 authorization to
provide international telecommunications service.
III. DISCUSSION
6. 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. To impose 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 by a
preponderance of the evidence that the person has violated the Act, a
rule, or a Commission order.
7. The fundamental issue in this case is whether Page Plus violated the
Act and the Commission's rules by willfully or repeatedly failing to
obtain authorization prior to providing international
telecommunications service. Based on a preponderance of the evidence,
we conclude that Page Plus is apparently liable for a forfeiture of
$100,000 for its apparent willful and repeated violation of Section
214 of the Act and Section 63.18 of the Commission's rules.
A. Page Plus Failed to Obtain an International Section 214 Authorization
Before Providing International Telecommunications Service
8. By its own admission, Page Plus provided international
telecommunications service from at least March 2003 until February
2011 without a Section 214 authorization from the Commission.
Nevertheless, in its LOI Response, Page Plus argues that it remains
"unconvinced" that Section 214 of the Act applies to its operations
because it does not "own, lease, operate, acquire, construct, or
maintain any `line' as described by Section 214." Page Plus further
claims it had been "completely unaware" of the rule that providers of
international telecommunications service must apply for Section 214
authorization. As described in detail below, Page Plus's arguments are
meritless.
9. First, the Commission has consistently held that resellers of
telecommunications service are common carriers and are subject to
regulation under Title II of the Act. The nature of a
telecommunications reseller's business is to function as a broker to
facilitate transmission of communications over lines owned by another
carrier. The Commission has made clear that ownership of the
underlying transmission facilities is not dispositive of whether a
service provider is a common carrier. As the Commission stated in the
Resale Order, "with the exception that some resellers may not own any
transmission plant, we perceive no difference between resale and
traditional communications common carriage." Whether a reseller offers
telecommunications services to the public for a fee is "the `sine qua
non' of common carrier status." As described above, Page Plus is a
reseller of telecommunications services to the public for a fee, and
thus is a common carrier subject to Title II.
10. Second, the Commission has determined that "because they provide
transmission of information, without a change in form or content, for
a fee directly to the public," prepaid calling card services are
telecommunications services and their providers are subject to
regulation as telecommunications carriers. In accordance with
long-established Commission precedent, Page Plus is subject to Title
II regulation as a telecommunications carrier because its prepaid
calling card service enables transmission of information between
points chosen by the user, does not change the form or content of such
information, and is available directly to the public for a fee.
11. Third, because Page Plus is a common carrier reseller of international
telecommunications services, it is required, pursuant to Section 214,
to obtain Commission authorization before providing international
telecommunications services. When it adopted Section 63.18 of the
rules, the Commission included resellers of telecommunications
services within the class of service providers required to meet the
obligations of Section 214. The Commission has enforced this rule with
respect to resellers in a well-established line of decisions.
12. Although Page Plus claims it was "completely unaware" of its
obligation to comply with Section 214 of the Act and Section 63.18 of
the rules, ignorance of the Act or the Commission's rules does not
exonerate, excuse, or mitigate violations. Page Plus's lack of
awareness is irrelevant.
13. A carrier's failure to obtain Section 214 authorization "undermines
the Commission's ability to accomplish Congress's objectives in
Section 214 of the Act." The Commission has explained that given the
"clear requirements and the important public interest considerations
involving national security, law enforcement, foreign policy and
trade, the failure to obtain Section 214 authority from the Commission
prior to providing international telecommunications services [is]
egregious." Given the unambiguous language of the Act, the
Commission's rules and decisions, and even the Commission's web site,
it should have been apparent to Page Plus that it was required to
obtain Section 214 authority from the Commission to provide
international telecommunications service. We, therefore, conclude
that, in failing to obtain an international Section 214 authorization
from the Commission prior to providing international
telecommunications service, Page Plus apparently willfully and
repeatedly violated Section 214 of the Act and Section 63.18 of the
Commission's rules. Furthermore, because Page Plus operated as an
international telecommunications service provider from at least 2003
until 2011 without authorization from the Commission, we find that
Page Plus's apparent noncompliance with the Act and the Commission's
rules constitutes a continuing violation.
B. Proposed Forfeiture Amount
14. Section 503(b)(1) of the Act provides that any person that 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 and Section 1.80(b)(2) of the rules authorizes the Commission
to assess a forfeiture of up to $150,000 for each violation or each
day of a continuing violation by a common carrier, up to a statutory
maximum for continuing violations 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." Through consideration of these
factors, and the adjustment criteria provided by Section 1.80 of the
rules, the Commission has established that the base forfeiture amount
for operating without Commission authorization pursuant to Section 214
is $100,000.
15. As explained above, we find that Page Plus violated a clear
requirement of the Act and the Commission's rules by operating without
the required international Section 214 authorization for at least
eight years. In light of the Commission's clear requirements, the
important public interest considerations involving national security,
law enforcement, foreign policy, and trade policy, and consistent with
prior precedent for entities failing to receive prior authorization
from the International Bureau, a proposed forfeiture of $100,000 is
warranted for Page Plus's apparent willful repeated failure to obtain
Section 214 authority from the Commission prior to providing
international telecommunications service.
IV. ORDERING CLAUSES
16. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 503(b) of the Act
and Sections 0.111, 0.311, 0.314 and 1.80 of the rules, Start Wireless
Group, Inc. d/b/a Page Plus Cellular, is hereby NOTIFIED of its
APPARENT LIABILITY FOR A FORFEITURE in the amount of $100,000 for
apparently willfully and repeatedly violating Section 214(a) of the
Act and Section 63.18 of the rules.
17. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the
Commission's rules, within thirty days of the release date of this
Notice, Start Wireless Group, Inc. d/b/a Page Plus Cellular SHALL PAY
the full amount of the proposed forfeiture or SHALL FILE a written
statement seeking reduction or cancellation of the proposed
forfeiture.
18. 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). Page Plus
will also send electronic notification within forty-eight (48) hours
of the date said payment is made to Terry Cavanaugh at
Terry.Cavanaugh@fcc.gov, Pamela Kane at Pamela.Kane@fcc.gov, and
Edward Smith at Edward.Smith@fcc.gov.
19. The response to this Notice of Apparent Liability for Forfeiture
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 response 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 response should also be emailed to
Terry Cavanaugh at Terry.Cavanaugh@fcc.gov, Pamela Kane at
Pamela.Kane@fcc.gov, and Edward Smith at Edward.Smith@fcc.gov.
20. 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.
21. Requests for payment of the full amount of this Notice of Apparent
Liability for Forfeiture 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.
22. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture shall be sent by certified mail, return receipt
requested, to counsel for Page Plus: Robert E. Levine, Law Offices of
Robert E. Levine, 1750 K Street, N.W., Suite 350, Washington, D.C.
20006.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau
47 U.S.C. S:214(a).
47 C.F.R. S: 63.18.
Supra note 1.
47 C.F.R. S: 63.01(a) ("Any party that would be a domestic interstate
communications common carrier is authorized to provide domestic,
interstate services to any domestic point and to construct or operate any
domestic transmission line as long as it obtains all necessary
authorizations from the Commission for use of radio frequencies").
Implementation of Section 402(b)(2)(A) of the Telecomm. Act of 1996,
Report and Order in CC Docket No. 97-11, Second Memorandum Opinion & Order
in AAD File No. 98-43, 14 FCC Rcd 11364, 11366 n.8 (1999) (grant of
blanket authority is only for domestic services and does not extend to the
provision of international services).
47 C.F.R. S: 63.18.
See id. S: 63.18(e)(2).
1998 Biennial Regulatory Review-Review of International Common Carrier
Regulations, Report and Order, 14 FCC Rcd 4909, 4926-27 P:P: 38-39 (1999)
("1998 International Biennial Review Order"); see also, Personal
Communications Indus. Ass'n's Broadband Personal Communications Servs.
Alliance's Pet. for Forbearance for Broadband Personal Communications
Servs., Memorandum Opinion and Order and Notice of Proposed Rulemaking, 13
FCC Rcd 16857, 16881-84 P:P: 45-54 (1998) (declining PCIA's request to
forbear from requiring Section 214 authority for a broadband PCS carrier
to provide international services) ("PCIA Forbearance Order");
Implementation of Sections 3(n) and 332 of the Communications Act,
Regulatory Treatment of Mobile Servs., Second Report and Order, 9 FCC Rcd
1411, 1481 P: 182 n.369 (1994) (declining to forbear from application of
Section 214 to provision of international services).
See Response of Start Wireless Group, Inc. to Commission Letter of Inquiry
(Nov. 23, 2010) ("LOI Response"), Note 8; see also, LOI Response,
attachment 3.
See id.
See id; see also www.pagepluscellular.com, last visited on Dec. 7, 2011.
www.pagepluscellular.com, last visited on Dec. 7, 2011.
See LOI Response at 3.
47 C.F.R. S: 63.18.
See LOI Response at 3.
See IBFS file no. ITC-STA-20101215-00484 and IBFS file no.
ITC-214-20101215-00483.
See IBFS file no. ITC-STA-20101215-00484.
See IBFS file no. ITC-214-20101215-00483.
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).
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362, P: 10
(2001) (issuing a Notice of Apparent Liability for, inter alia, a cable
television operator's repeated signal leakage).
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: 214(a); 47 C.F.R. S: 63.18.
See LOI Response at 3.
See id., at Note 8.
See id., at 3.
See, e.g., Regulation of Prepaid Calling Card Services, WC Docket No.
05-68, Declaratory Ruling and Report and Order, 21 FCC Rcd 7290, 7293-94,
7312, P:P: 10, 65 (2006), vacated in part on other grounds sub nom. Qwest
Servs. Corp. v. FCC, 509 F.3d 531 (D.C. Cir. 2007); NOS Communications,
Inc., Affinity Network Inc. and NOSVA Limited Partnership, EB Docket No.
03-96, Order to Show Cause and Notice of Opportunity for Hearing, 18 FCC
Rcd 6952, 6953-54, P: 3 (2003); Regulatory Policies Concerning Resale and
Shared Use of Common Carrier Services and Facilities, Docket No. 20097,
Report and Order, 60 FCC 2d 261, 265 P: 8 (1976) ("an entity engaged in
the resale of communications service is a common carrier, and is fully
subject to the provisions of Title II"), aff'd sub nom. AT&T v. FCC, 572
F.2d 17 (2d Cir. 1978) ("Resale Order").
See Resale Order, 60 FCC 2d 261, 271 P: 17 (defining "resale" as "an
activity wherein one entity subscribes to the communications services and
facilities of another entity and then reoffers communications service and
facilities to the public (with or without `adding value') for profit.")
See, e.g., Resale Order, 60 FCC 2d at 308, P: 101. The Act defines
"telecommunications carrier" as "any provider of telecommunications
services." 47 U.S.C. S: 153 (51). "Telecommunications service" is "the
offering of telecommunications for a fee directly to the public, . . .
regardless of the facilities used." Id. S: 153(53) (emphasis added).
"Telecommunications" is "the transmission, between or among points
specified by the user, of information of the user's choosing, without
change in the form or content of the information as sent and received."
Id. S: 153(50).
Resale Order at 308 P: 101.
See Resale Order, 60 FCC 2d 261, 308 P: 101; see also NARUC v. FCC, 533
F.2d 601, 608 (D.C. Cir. 1976).
See AT&T Corp. Petition for Declaratory Ruling Regarding Enhanced Prepaid
Calling card Services; Regulation of Prepaid calling Card Services, WC
Docket Nos. 03-133, 05-68, Order and Notice of Proposed Rulemaking, 20 FCC
Rcd 4826, 4827 P: 4 (2005) ("To date, calling card services have been
regulated by the Commission as telecommunications services because they
provide transmission of information, without a change in form or content,
for a fee directly to the public"); see also, Regulation of Prepaid
Calling Card Services, 21 FCC Rcd at 7293 P: 10 ("prepaid calling cards
are telecommunications services and . . . their providers are subject to
regulation as telecommunications carriers").
See, e.g., ADMA Telecom, Inc., Forfeiture Order, 26 FCC Rcd 4152, 4161
P:P: 26-27 (2011) (assessing a $100,000 forfeiture against a prepaid
calling card company for unauthorized international telecommunications
service); Teleplus, LLC, Notice of Apparent Liability for Forfeiture, 24
FCC Rcd 7666, 7670-71 P: 12 (2009) ("Teleplus NAL") (same); Omniat
International Telecom, LLC d/b/a Omniat Telecom, Notice of Apparent
Liability for Forfeiture, 24 FCC Rcd 4254, 4264, P: 25 (2009) ("Omniat
NAL") (same); InPhonic, Inc., Notice of Apparent Liability of Forfeiture
and Order, 20 FCC Rcd 13277, 8706, P: 41 (2007) ("InPhonic NAL") (same).
See In the Matter of the Bureau D'Electronique Appliquee, Inc., Forfeiture
Order, 20 FCC Rcd 17893, 17896-7 (2005) (rejecting claims by
manufacturer/distributor that its failure to obtain a requisite
certification was due to "good faith inadvertent mistakes" and that it
lacked "actual knowledge of the need to test and certify" its equipment);
In the Matter of Liability of Profit Enterprises, Inc., 8 FCC Rcd 2846,
2846 (1993) ("[P]rior knowledge or understanding of the law is unnecessary
to a determination of whether a violation existed. . . . The Commission
also does not consider ignorance of the law a mitigating factor").
Omniat NAL, 24 FCC Rcd at 4264 P: 24 (2009).
See Id. at 4264 P: 25; see also, Teleplus NAL, 24 FCC Rcd at 7670-71 P:
13; InPhonic NAL, 20 FCC Rcd at 8706 P: 41 (2007).
47 U.S.C. S: 214(a).
See, e.g., 47 C.F.R. S:S: 63.12, 63.18, 63.20, 63.21, 63.23; see also,
1998 International Biennial Review Order, 14 FCC Rcd 4909; Regulation of
Int'l Common Carrier Services, Report and Order, 7 FCC Rcd 7331 (1992)
("International Resale Order").
See supra note 36.
See International Bureau Frequently Asked Questions,
http://www.fcc.gov/ib/pd/pf/214faq.html, last visited December 7, 2011.
47 U.S.C. S: 214; 47 C.F.R. S: 63.18.
See LOI Response at 3; see also supra note 18.
47 U.S.C. S: 503(b)(1)(B); see also 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).
47 U.S.C. S: 503(b)(2)(E).
See supra note 36.
47 U.S.C. S: 214(a); 47 C.F.R. S: 63.18.
See 1998 International Biennial Review Order, 14 FCC Rcd at 4915-17, P: P:
15-18; id. 4939-40, P:P: 72-74.
See supra note 36.
See 47 U.S.C. S: 503; 47 C.F.R. S:S: 0.111, 0.311, 0.314, 1.80.
See 47 U.S.C. S: 214(a); 47 C.F.R. S:S: 63.18, 63.04.
See 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.
Federal Communications Commission DA 12-65
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Federal Communications Commission DA 12-65