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, DC 20554
)
In the Matter of ) File No.: EB-TCD-12-0000219
Think 12 Corporation d/b/a Hello ) NAL/Acct. No.: 200932170826
Depot
) FRN: 0010729283
)
order on review
Adopted: December 20, 2012 Released: December 21, 2012
By the Commission:
I. introduction
1. In this Order on Review, we deny the Application for Review filed by
Think 12 Corporation (Think 12), of the October 28, 2011 Memorandum
Opinion and Order of the Enforcement Bureau (Bureau), in which the
Bureau denied Think 12's petition for reconsideration of a February
25, 2011 Forfeiture Order. We find that Think 12 has not provided
grounds upon which to overturn the Bureau's decision.
II. background
2. Think 12 is a telecommunications carrier based in Itasca, Illinois
that resells interexchange services. As a telecommunications carrier,
Think 12 is subject to the requirements of the Communications Act of
1934, as amended (Act or Communications Act), relating to customer
proprietary network information (CPNI), set forth in Section 222 of
the Act, as well as the Commission's implementing rules and orders.
Pursuant to Section 64.2009(e) of the Commission's rules, carriers
(and certain others) must file annually, on or before March 1, a
certification with the Commission, over the signature of an officer,
that the officer has personal knowledge that the carrier has
established operating procedures sufficient to ensure compliance with
the Commission's CPNI rules.
3. On September 5, 2008, the Bureau issued a letter of inquiry (LOI) to
Think 12 asking whether the company had filed a Section 64.2009(e)
CPNI compliance certification for calendar year 2007. Think 12
responded by submitting a CPNI certification for calendar year 2007,
dated September 18, 2008.
4. On February 24, 2009, the Bureau released the Omnibus NAL against
numerous companies, including Think 12, proposing a monetary
forfeiture of $20,000 for the apparent failure to timely file a CPNI
certification as required by Section 64.2009(e) of the Commission's
rules and the Commission's EPIC CPNI Order. The NAL ordered the
companies to either pay the proposed forfeiture or file a written
response within 30 days stating why the proposed forfeiture should be
reduced or canceled. Think 12 submitted a response to the Omnibus NAL
on March 25, 2009. In its response, Think 12 conceded that it was
unaware of the CPNI compliance certification filing requirement until
it received the LOI. On February 25, 2011, the Bureau issued its
Forfeiture Order, finding that Think 12's admitted ignorance of the
law, as well as its other arguments-that it was unable to pay the
forfeiture, had a history of compliance with CPNI rules, and had not
previously received CPNI complaints-were insufficient to cancel or
reduce the forfeiture.
5. On March 28, 2011, Think 12 submitted a petition for reconsideration.
In the October 28, 2011 Memorandum Opinion and Order the Bureau denied
the petition, concluding that Think 12 had not raised new facts or
shown an error or omission in the Forfeiture Order. Think 12
thereafter filed an Application for Review of the Memorandum Opinion
and Order on November 25, 2011.
III. discussion
6. In this Order on Review, we deny Think 12's Application for Review and
affirm the Bureau's Memorandum Opinion and Order. Think 12's
Application for Review largely reiterates arguments it made before the
Bureau in its Petition for Reconsideration, and provides additional
new financial information to support its claim that it is unable to
pay the forfeiture. We agree with the Bureau's disposition of the
arguments Think 12 made before, and find the new financial information
procedurally improper and, in any event, substantively unpersuasive,
as discussed below.
7. Think 12 raised three issues in its Petition for Reconsideration: that
due to financial difficulties it would be unable to pay the forfeiture
amount; that it was in compliance with our CPNI rules and had a
confidentiality policy for handling customers' information, even
though it had failed to timely file the compliance certification; and
that it had no history of prior complaints regarding misuse or
mishandling of customer information. The Bureau declined to reconsider
Think 12's claim of financial hardship; based on the tax returns Think
12 had submitted for years 2004, 2005, and 2006 and other information
derived from its investigation, the Bureau concluded that Think 12 had
not demonstrated an inability to pay the proposed forfeiture amount.
With respect to Think 12's assertions that it had a history of
protecting CPNI-as evidenced by its confidentiality policy and the
absence of complaints-the Bureau declined to reconsider imposing the
forfeiture because it concluded that Think 12 failed to demonstrate
that the company met its obligation to complete and independently
maintain annual CPNI compliance certifications.
8. In its Application for Review, Think 12 presents no new argumentation
with respect to the latter two issues raised in its Petition for
Reconsideration. Rather, it merely incorporates that Petition by
reference. We agree with the Bureau's analysis of those issues in the
Memorandum Opinion and Order and reject Think 12's arguments for the
reasons stated therein.
9. With respect to its argument that it cannot pay the proposed
forfeiture, Think 12 does raise a new argument in its Application for
Review; it has now produced new financial information that, it
asserts, raises an "important or material question of fact regarding
financial hardship" that the Bureau did not address. This new
financial information consists of tax returns for years 2007, 2008,
and 2009, as well as unaudited financial statements for 2010 and 2011.
10. As a matter of procedure, the Commission does not consider newly
presented factual information at this stage in a proceeding. The
Commission's rules explicitly state: "No application for review will
be granted it if relies on questions of fact or law upon which the
designated authority has been afforded no opportunity to pass." Think
12 did not present, and the Bureau has had no opportunity to consider,
new financial information. Thus, procedurally, the Application for
Review must be denied. Enforcement of our procedural rules promotes
orderliness and finality in the administrative process and thereby
serves the public interest, convenience, and necessity. It would be
especially inappropriate to accept Think 12's newly-submitted
financial information at this juncture because the Bureau previously
invited the company to provide such information, but it did not do so.
In issuing the penalty of $20,000 in the Forfeiture Order, the Bureau
considered tax returns for years 2004, 2005, and 2006 provided by
Think 12. In considering Think 12's petition for reconsideration of
that order, the Bureau requested that the company produce additional
updated tax returns, but as stated in the Memorandum Opinion and
Order, "the company did not avail itself of that opportunity." In its
Application for Review, Think 12 candidly admits that it failed to
provide updated tax returns for years 2007-2009, and simply states
that its inaction was due to reliance on legal advice. We thus dismiss
Think 12's application for review.
11. As an alternative and independent basis for our decision, we conclude
that such information does not support its inability to pay argument.
Based on our review of Think 12's tax returns for 2007-2009 and
unaudited financial statements for 2010 and 2011, and considering a
factor within the range that the Commission has previously found
reasonable in determining inability to pay, we conclude that the
forfeiture amount is reasonable and that Think 12 has not demonstrated
an inability to pay.
12. Accordingly, upon review of the Application for Review and the entire
record herein, we conclude that Think 12 has failed to demonstrate
that the Bureau erred in imposing a forfeiture for a violation of
Section 222 of the Communications Act and Section 64.2009 of the
Commission's rules. We find that the Bureau properly decided the
matters before it and we uphold the Bureau's decision to impose a
$20,000 forfeiture in its Forfeiture Order and Memorandum Opinion and
Order.
IV. Ordering Clauses
13. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 405 of the Act
and Section 1.115 of the Commission's rules, Think 12 Corporation's
Application for Review IS DISMISSED. As an alternative independent
holding as set forth herein, the Application for Review IS DENIED.
14. It is FURTHER ORDERED that the Forfeiture Order and Memorandum Opinion
and Order ARE AFFIRMED and that pursuant to Section 503(b) of the Act,
Think 12 Corporation SHALL FORFEIT to the U.S. Government the sum of
$20,000.
15. Payment of the forfeiture shall be made in the manner provided for in
Section 1.80 of the Rules within thirty (30) calendar days after the
release date of this Order on Review. 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. Think 12 Corporation shall send electronic
notification of payment to Johnny Drake at johnny.drake@fcc.gov on the
date said payment is made.
16. 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.
17. Any request for full payment under an installment plan should be sent
to: Chief Financial Officer-Financial Operations, Federal
Communications Commission, 445 12th Street, SW, Room 1-A625,
Washington, DC 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.
18. IT IS FURTHER ORDERED that a copy of this Order on Review shall be
sent by Certified Mail Return Receipt Requested and First Class Mail
to Think 12 Corporation d/b/a Hello Depot at 650 East Devon Avenue,
Suite 133, Itasca, IL 60143.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
This case was formerly assigned the file number EB-08-TC-5708. In January
2012, the Telecommunications Consumers Division assigned the case a new
number.
Think 12 filed an Application for Review under Section 47 C.F.R. S: 1.115
of the Commission's rules on Nov. 25, 2011.
Think 12 Corporation d/b/a Hello Depot, Memorandum Opinion and Order, 26
FCC Rcd 15152 (Enf. Bur. 2011) (Memorandum Opinion and Order).
Think 12 Corporation d/b/a Hello Depot, Order of Forfeiture, 26 FCC Rcd
2135 (Enf. Bur. 2011) (Forfeiture Order).
Section 222 of the Act, 47 U.S.C S: 222, provides: "Every
telecommunications carrier has a duty to protect the confidentiality of
proprietary information of, and relating to, other telecommunications
carriers, equipment manufacturers, and customers, including
telecommunication carriers reselling telecommunications services provided
by a telecommunications carrier."
47 C.F.R. S:S: 64.2001-2011.
47 C.F.R. S: 64.2009(e). The carrier must provide a statement
accompanying the certification explaining how its operating procedures
ensure that it is or is not in compliance with the Commission's CPNI
rules. In addition, the carrier must include an explanation of any actions
taken against data brokers and a summary of all customer complaints
received in the past year concerning the unauthorized release of CPNI.
This filing must be made annually on or before March 1 in EB Docket No.
06-36, for data pertaining to the previous calendar year.
See Letter from Marcy Greene, Deputy Chief, Telecommunications Consumers
Division, FCC Enforcement Bureau, to Think 12 (Sept. 5, 2008) at 1 (on
file in EB-TCD-12-0000219).
See Think 12's "Annual 47 C.F.R. S: 64.2009(e) CPNI Certification," dated
Sept. 18, 2008.
Annual CPNI Certification, Omnibus Notice of Apparent Liability for
Forfeiture, 24 FCC Rcd 2299 (Enf. Bur. 2009) (Omnibus NAL).
Implementation of the Telecommunications Act of 1996: Telecommunications
Carriers' Use of Customer Proprietary Network Information and Other
Customer Information, IP-Enabled Services, Report and Order and Further
Notice of Proposed Rulemaking, 22 FCC Rcd 6927, 6953, para. 51 (2007)
(EPIC CPNI Order), aff'd sub nom. Nat'l Cable & Telecom. Assoc. v. FCC,
555 F.3d 996 (D.C. Cir. 2009).
See Response to Omnibus Notice of Apparent Liability for Forfeiture (filed
Mar. 25, 2009) (on file in EB-TCD-12-0000219) (Response to NAL).
See Response to NAL, Declaration of Jeom Heui Lee at 1.
See Forfeiture Order, 26 FCC Rcd at 2137-40, paras. 6-10.
See Petition for Reconsideration (filed Mar. 28, 2011) (on file in
EB-TCD-12-0000219).
Memorandum Opinion and Order, 26 FCC Rcd at 15154, para. 6.
Application for Review (filed Nov. 25, 2011) (on file in
EB-TCD-12-0000219).
Petition for Reconsideration at 2-3.
Id. at 3-4.
Id. at 4-5.
Memorandum Opinion and Order, 26 FCC Rcd at 15155, para. 9.
Think 12 conceded that it did not meet that obligation, arguing it never
knew such certifications were required. See id. at 3-4 ("[Think 12]
failed to notice and educate itself with respect to the specific rules and
the filing requirements thereunder. . . .").
Application for Review at 2.
47 C.F.R. S: 1.115(c).
See Amendment of the Commission's Rules Regarding the 37.0-38.6 GHz and
38.6-40.0 GHz Bands, Memorandum Opinion and Order, 15 FCC Rcd 10579,
10580, para. 3 (2000).
Forfeiture Order, 26 FCC Rcd at 2139, para 9.
Memorandum Opinion and Order, 26 FCC Rcd at 15155, para 9.
Application for Review at 2.
Section 1.80(b)(4) of our rules provides that a downward adjustment or
cancellation of the base forfeiture amount may be warranted in
circumstances where the violator has demonstrated an inability to pay. 47
C.F.R. S: 1.80(b)(4). In the Omnibus NAL the Bureau stated: "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;
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." Omnibus NAL, 24 FCC Rcd at 2304,
para. 16.
See, e.g., Hoosier Broadcasting Corporation, Memorandum Opinion and Order,
15 FCC Rcd 8640, 8641, para. 7 (2000) (finding that penalty of
approximately 7.6 percent of target's gross revenues not excessive); Local
Long Distance, Inc., Forfeiture Order, 15 FCC Rcd 24385 (2000) (forfeiture
not deemed excessive where it represented approximately 7.9 percent of the
violator's gross revenues).
47 C.F.R. 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 FCC 12-164
5
Federal Communications Commission FCC 12-164