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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                            )                                
                                                                             
                                            )                                
     In the Matter of                                                        
                                            )   File No.: EB-09-IH-0012      
     CASCADE ACCESS, L.L.C.                                                  
                                            )   NAL/Acct. No.: 200932080027  
     Applicant for 700 MHz band licenses                                     
     in Auction 73                          )   FRN: 0004381547              
                                                                             
                                            )                                
                                                                             
                                            )                                



                                FORFEITURE ORDER

   Adopted: January 10, 2013 Released: January 11, 2013

   By the Chief, Enforcement Bureau:

   I. INTRODUCTION

    1. In this Forfeiture Order, issued pursuant to Section 503 of the
       Communications Act of 1934, as amended (the Act), and Section 1.80 of
       the Commission's rules, we find that Cascade Access, L.L.C. (Cascade
       or Applicant), an applicant in Auction No. 73 for licenses in the 700
       MHz band, engaged in collusive conduct and failed to notify the
       Commission of such behavior, in willful violation of Sections
       1.2105(c)(1) and (c)(6) of the Commission's rules. For the reasons
       stated below, we issue a monetary forfeiture against Cascade in the
       amount of $75,000.

   II. BACKGROUND

    2. This matter arises from misconduct by Cascade during the Commission's
       Auction No. 73. On February 10, 2009, following a comprehensive
       investigation of possible collusive activities between Cascade and
       Cellco Partnership d/b/a/ Verizon Wireless (Verizon Wireless), the
       Enforcement Bureau (Bureau), issued a Notice of Apparent Liability for
       Forfeiture against Cascade. The facts that formed the basis for the
       proposed forfeiture are set forth in the NAL and are incorporated
       herein by reference. The NAL found that Cascade and Verizon Wireless
       were both applicants for the same geographic license area, CMA547-B
       (Nevada 5-White Pine), in Auction No. 73 and that, during the course
       of that auction, a representative of Cascade apparently engaged in a
       collusive communication with a representative of Verizon Wireless.
       Specifically, the NAL found that Bob Milliken, an associate of
       Cascade, sent an email to William Hickey, Executive Director -
       Strategic Alliances for Verizon Wireless, stating, "[w]e have dropped
       out of the 700 MHz auction" and are "ready to talk/meet" with Verizon
       Wireless. The NAL concluded that Cascade had engaged in a prohibited
       communication about its bidding strategy, in apparent willful
       violation of Section 1.2105(c)(1) of the Commission's rules. The NAL
       also concluded that Cascade had failed to inform the Commission about
       its communication with Verizon Wireless, in apparent willful violation
       of Section 1.2105(c)(6) of the Commission's rules. The NAL proposed a
       forfeiture in the total amount of $75,000 against Cascade.

    3. On March 12, 2009, Cascade filed its response to the NAL, requesting
       cancellation or reduction of the proposed forfeiture. In support of
       its position that the proposed forfeiture should be cancelled, Cascade
       argued that it did not violate Section 1.2105(c) because: (1) Mr.
       Milliken's statement did not communicate the "substance" of bids or
       bidding strategies, as required by the Commission's anti-collusion
       rule; (2) the conduct prohibited is not clearly stated in the
       anti-collusion rule; (3) the FCC previously disseminated to the public
       the type of information disclosed by Mr. Milliken; and (4) in a prior
       decision, the Wireless Telecommunications Bureau's Auctions Division
       permitted communications between auction applicants that were similar
       to Mr. Milliken's email. Cascade also argued in its NAL Response that
       the forfeiture should be reduced because: (1) Cascade did not intend
       to violate the anti-collusion rule; (2) Cascade's action did not cause
       Verizon Wireless to modify its bidding strategy or otherwise
       compromise the integrity of the auction process; (3) Cascade's
       offense, if any, is less egregious than that in the Star Wireless
       case; and (4) Cascade and its affiliated entities have a history of
       complying with the Commission's rules.

    4. On June 9, 2009, Cascade's counsel, Tom Gutierrez, Esq., and its
       President, Brenda Crosby, met with Enforcement Bureau and Wireless
       Telecommunications Bureau (WTB) staff about its conduct in Auction 73.
       During the meeting, Mr. Gutierrez and Ms. Crosby reiterated the
       arguments made in Cascade's NAL Response for cancellation or reduction
       of the proposed forfeiture. At that time, Cascade also stated that,
       although it is a small business, it is able to pay the full forfeiture
       amount.

   III. DISCUSSION

    5. In order to prevent collusive conduct and ensure the competitiveness
       of both the auction process and the post-auction market structure, 
       the Commission adopted Section 1.2105(c), the anti-collusion rule.
       Section 1.2105(c) states in pertinent part:

   [A]fter the [FCC Form 175] short-form application filing deadline, all
   applicants for licenses in any of the same geographic license areas are
   prohibited from cooperating or collaborating with respect to, discussing
   with each other, or disclosing to each other in any manner the substance
   of their own, or each other's, or any other competing applicant's bids or
   bidding strategies, or discussing or negotiating settlement agreements,
   until after the down payment deadline, unless such applicants are members
   of a bidding consortium or other joint bidding arrangement identified on
   the bidder's short-form application pursuant to S: 1.2105(a)(2)(viii).

   This prohibition against collusive communications set forth in Section
   1.2105(c) commences with the filing of the Form 175 application to
   participate in an auction, extends through the duration of the actual
   auction, and concludes after the successful auction participants have made
   any required down payment on the licenses. The anti-collusion rule applies
   to all applicants that file a Form 175 to participate in an auction,
   regardless of whether the applicants actually participate in the auction
   itself.

    6. As noted in the NAL, both before and after commencement of the
       auction, WTB issued multiple public notices warning auction applicants
       of their obligations to comply with Section 1.2105(c). WTB also issued
       public notices notifying auction applicants that new anonymous bidding
       procedures would be used in Auction 73 to prevent the release of
       bidding-related information to the public and competing applicants
       during the auction.

    7. Initially, we reject Cascade's contention that it did not violate
       Section 1.2105(c) because its communication did not discuss the
       "substance" of Cascade's bids or bidding strategies. By revealing to
       Verizon Wireless, a competing bidder in Auction 73, that it was
       withdrawing from the auction and would consequently no longer be
       bidding, Cascade clearly disclosed its bidding strategy. Affirmatively
       revealing to another auction participant that you intend to refrain
       from bidding is no less significant than disclosing an intention to
       make a bid of a particular dollar amount or a bid for a license in a
       particular market. Such an interpretation of Section 1.2105(c) of the
       Commission's rules is both reasonable and supported by case precedent.
       While the anti-collusion rule does not prohibit all business
       discussions between or among auction applicants, it unquestionably
       prohibits communications about bidding strategies while an auction is
       in progress.

    8. We also reject Cascade's claim that its communication with Verizon
       Wireless involved permissible "business negotiations."  Contrary to
       Cascade's assertion, business negotiations are expressly prohibited
       when, as here, they are between competing applicants who are not
       members of a bidding consortium or other joint bidding arrangement
       identified on a bidder's short-form application. Indeed, the kind of
       communication in which Cascade engaged in this instance is precisely
       the type of activity which the anti-collusion rule was intended to
       prevent, given that the communication had the potential to compromise
       the competitive nature of the auction's bidding process and the
       post-auction market structure. The confidential nature of
       bidding-related information was emphasized and reinforced by Auction
       73's anonymous bidding procedures, which required "any information"
       indicating "specific applicants' interests in the auction," to be
       withheld until after completion of Auctions 73 and 76. Thus, during
       Auction 73, applicants were not allowed to disclose to the public or
       other applicants any "confidential" information regarding an
       applicant's "bidding-related actions," such as the fact that the
       applicant had withdrawn from further bidding in the auction.

    9. We also reject Cascade's contention that the proposed forfeiture
       should be reduced because the violation was unintentional. While
       Cascade may not have set out with the specific intention of violating
       the anti-collusion rule, there is no doubt that Cascade's
       representative intended to and did contact Verizon Wireless to
       initiate a conversation about Cascade's participation in Auction No.
       73 during the period of time when such communications were strictly
       proscribed. Stated otherwise, Cascade did not accidentally contact
       Verizon Wireless to convey that it was withdrawing from further
       bidding in the auction. Thus, Cascade's actions were indisputably
       willful, as defined under the Act, and patently inconsistent with the
       plain language of Section 1.2105(c).

   10. We are not persuaded by Cascade's assertion that the proposed
       forfeiture is "far too high" compared to Star Wireless, a case in
       which the Commission imposed a $75,000 forfeiture. Cascade maintains
       that its conduct is less egregious than that in Star Wireless because
       its email to Verizon Wireless did not alter or otherwise affect the
       bidding in Auction 73. To the contrary, Cascade's conduct, insofar as
       Section 1.2105(c)(1) is concerned, is similar to that in Star
       Wireless-Cascade transmitted a prohibited communication that revealed
       its bidding strategy to a competing auction applicant. The fact that
       Verizon Wireless refrained from acting on the information it received
       from Cascade does not provide a basis for mitigating the proposed
       forfeiture amount.

   11. The Commission's Forfeiture Policy Statement specifies that the
       Commission shall impose a forfeiture based upon consideration of the
       factors enumerated in Section 503(b)(2)(E) of the Act, 47 U.S.C. S:
       503(b)(2)(E), such as "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." We have, again, carefully
       considered each of these factors, including Cascade's history of
       compliance with the Commission's rules, and find no basis for
       mitigating the proposed forfeiture. Cascade's misconduct was willful
       and serious. Given the multiple admonitions about collusion issued by
       WTB to auction applicants in Auction No. 73, Cascade knew or should
       have known that the communication in which it engaged was proscribed.
       It also knew or should have known to report such prohibited
       communications to the Commission in a timely manner. Therefore, taking
       all of these factors into consideration, we find that Cascade is
       liable for a forfeiture in the amount of $75,000.

   IV. ORDERING CLAUSES

   12. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the
       Communications Act of 1934, as amended, Section 1.80 of the
       Commission's rules, and authority delegated by Sections 0.111, 0.204,
       and 0.311 of the Commission's rules, Cascade IS LIABLE FOR A MONETARY
       FORFEITURE in the amount of Seventy-five Thousand Dollars ($75,000)
       for willfully violating Sections 1.2105(c)(1) and 1.2105(c)(6) of the
       Commission's rules.

   13. 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 of this Forfeiture Order. If the forfeiture is not paid within
       the period specified, the case may be referred to the Department of
       Justice for enforcement of the forfeiture pursuant to Section 504(a)
       of the Act. Cascade Access, L.L.C. shall send electronic notification
       of payment to Gary Schonman at Gary.Schonman@fcc.gov and Judy
       Lancaster at Judy.Lancaster@fcc.gov on the date said payment is made.

   14. 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.

   15. 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
       telephone, 1-877-480-3201, or by e-mail, ARINQUIRIES@fcc.gov.

   16. IT IS FURTHER ORDERED that a copy of this Forfeiture Order shall be
       sent by Certified Mail Return - Receipt Requested, to: Brenda C.
       Crosby, President, Cascade Access, L.L.C., 303 SW Zobrist, Estacada,
       Oregon 97023; and to Cascade's counsel: Thomas Gutierrez, Esq. and
       Elizabeth R. Sachs, Esq., Lukas, Nace, Gutierrez & Sachs, L.L.P., 1650
       Tysons Blvd., Suite 1500, McLean, VA 22102.

   FEDERAL COMMUNICATIONS COMMISSION

   P. Michele Ellison

   Chief, Enforcement Bureau

   47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80.

   47 C.F.R. S: 1.2105(c)(1), (c)(6).

   See Cascade Access, L.L.C., Notice of Apparent Liability for Forfeiture,
   24 FCC Rcd 1350 (Enf. Bur. 2009) (NAL).

   NAL, 24 FCC Rcd at 1351. See also Request for Cancellation or Reduction of
   Proposed Forfeiture, filed March 12, 2009, by Cascade Access, L.L.C. at 1
   (NAL Response); Letter from Thomas Gutierrez, Esq., Counsel for Cascade
   Access, L.L.C., to Marlene H. Dortch, Secretary, Federal Communications
   Commission, dated January 26, 2009 (LOI Response), at Exhibit 1.

   47 C.F.R. S: 1.2105(c)(1). Section 1.2105(c) is commonly referred to as
   the Commission's "anti-collusion" rule.

   47 C.F.R. S: 1.2105(c)(6).

   See NAL Response.

   See NAL Response at 3.

   See id.

   See NAL Response at 3-4.

   See NAL Response at 5.

   See id.

   See NAL Response at 6.

   See id. See also Star Wireless, LLC and Northeast Communications of
   Wisconsin, Inc., Order on Review, 22 FCC Rcd 8943 (2007), appeal denied,
   Star Wireless, LLC v. FCC & USA, 522 F.3d 469 (D.C. Cir. 2008) (Star
   Wireless).

   See NAL Response at 6.

   See June 11, 2009, letter from Brenda Crosby, President, Cascade Access,
   L.L.C., to Judy Lancaster, Investigations and Hearings Division, FCC
   Enforcement Bureau (wherein Cascade informally states that it is a small
   business).

   See Implementation of Section 309(j) of the Communications Act -
   Competitive Bidding, Second Report and Order, 9 FCC Rcd 2348, 2386-88
   (1994) (Competitive Bidding Second Report and Order). See also id. at
   2387, para. 225 ("[W]e believe that the competitiveness of the auction
   process and of post-auction market structure will be enhanced by certain
   additional safeguards designed to reinforce existing laws and facilitate
   detection of collusive conduct."); Implementation of Section 309(j) of the
   Communications Act - Competitive Bidding, Memorandum Opinion and Order, 9
   FCC Rcd 7684, 7685-7688, para. 10 (1994) ("Our anti-collusion rules are
   intended to protect the integrity and robustness of our competitive
   bidding process.").

   47 C.F.R. S: 1.2105(c)(1). Section 1.2105(a) requires that each auction
   applicant submit a short-form application (FCC Form 175) in order to
   participate in an auction. See 47 C.F.R. S:1.2105(a).

   47 C.F.R. S: 1.2105(c)(1). See also Amendment of Part 1 of the
   Commission's Rules - Competitive Bidding Procedures, Order on
   Reconsideration of the Third Report and Order, Fifth Report and Order, and
   Fourth Further Notice of Proposed Rulemaking, 15 FCC Rcd 15923 (2000) at
   15297-98, paras. 7-8.

   See, e.g., Auction of 700 MHz Band Licenses, Auction of 700 MHz Band
   Licenses Scheduled for January 24, 2008, Public Notice, 22 FCC Rcd 18141,
   18148-54 (2007) (Procedures PN); Auction of MHz Band Licenses, Status of
   Short-Form Applications to Participate in Auction 73, Public Notice, 23
   FCC Rcd 18 (2008) (Status PN); Auction of 700 MHz Band License, 214
   Bidders Qualified to Participate in Auction 73, Public Notice, 23 FCC Rcd
   276, 283-286 (2008) (Qualified Bidders PN); Wireless Telecommunications
   Bureau Reminds 700 MHz Auction Applicants of Confidential Nature of
   Upfront Payment and Other Bidding-Related Information, 23 FCC Rcd 18,
   (2008) (Confidential Information Reminder PN); Auction of 700 MHz Band
   Licenses Closes, Winning Bidders Announced for Auction 73, Public Notice,
   23 FCC Rcd 4572, 4581 (2008) (Winning Bidders PN).

   See NAL Response at 2-3.

   See 47 C.F.R. S: 1.2105(c); Star Wireless, LLC and Northeast
   Communications of Wisconsin, Inc., Order on Review, 22 FCC Rcd 8943
   (2007), appeal denied, Star Wireless, LLC v FCC and USA, 522 F.3d 469
   (D.C. Cir. 2008) (Star Wireless).

   See id. See also Lotus Communications Corporation, 23 FCC Rcd 9107 (WTB
   2008). There is no merit to Cascade's argument that Section 1.2105(c) has
   never been applied to facts such as those presented here. See Response at
   3, 7-9. It is axiomatic that the facts and circumstances of two cases will
   never be identical and, although Cascade attempts to distinguish its
   behavior from that in Star by pointing out inconsequential factual
   differences between them, the facts are sufficiently similar to find the
   legal principles applied in that case to be applicable here.

   See 47 C.F.R. S: 1.2105(c). See also Mr. Robert Pettit, Letter, 16 FCC Rcd
   10080 (WTB Auctions Div. 2000)("[T]he anti-collusion rule does not
   prohibit all business discussions among applicants for licenses in the
   same geographic license areas . . . [but] such discussions . . . must be
   conducted with great care not to convey the substance of bids or bidding
   strategies of any such applicant"); David L. Nace, 11 FCC Rcd 11363, 4 CR
   1080 (1996) (David L. Nace), cited by Cascade ("As a general matter, the
   anti-collusion rule does not prohibit business negotiations between D, E
   and F block applicants who have applied for the same markets [but]
   [a]uction applicants are reminded . . . that such negotiations should not
   amount to `cooperating, collaborating, discussing or disclosing in any
   manner the substance of ...bids or bidding strategies.'").

   47 CFR S: 1.2105(c)(1). See also supra, note 19.

   NAL Response at 5.

   See 47 C.F.R. S: 1.2105(c).

   See NAL, 24 FCC Rcd at 1354.

   Qualified Bidders PN, 23 FCC Rcd at 285. Auction 76 was the contingent,
   subsequent auction to Auction 73. The identities of qualified applicants
   and auction results were released in January 2008. See Qualified Bidders
   PN, 23 FCC Rcd at 288-299; Auction of 700 MHz Band Licenses, Additional
   Information Regarding the FCC Auction System and Results Files for
   Auctions 73 and 76, Public Notice, 23 FCC Rcd 303 (2008) (Auction Results
   PN).

   Confidential Information Reminder PN, 12 FCC Rcd at 18 ("[T]he Bureau
   recently warned applicants that the direct or indirect communication to
   other applicants or the public disclosure of such non-public information
   could violate the Commission's anonymous bidding procedures and the
   anti-collusion rule"). Thus, contrary to Cascade's argument, it is
   irrelevant whether the Auctions Division may have allowed similar
   information to be disseminated in a much earlier, prior auction.

   Section 312(f)(1) of the Act, 47 U.S.C. S: 312(f)(1), 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. See, e.g.,
   Application for Review of Southern California Broadcasting Co., Memorandum
   Opinion and Order, 6 FCC Rcd 4387, 4388 (1991).

   NAL Response at 5-6.

   The Commission's Forfeiture Policy Statement and Amendment of Section 1.80
   of the Rules to Incorporate the Forfeiture Guidelines, 12 FCC Rcd 17087,
   17113 (1997), recon. denied 15 FCC Rcd 303 (1999) (Forfeiture Policy
   Statement);  47 C.F.R. S: 1.80(b).

   Forfeiture Policy Statement, 12 FCC Rcd at 17100-01, para. 27.

   See supra, note 19.

   47 U.S.C. S: 503(b).

   47 C.F.R. S: 1.80.

   47 C.F.R. S:S: 0.111, 0.204, and 0.311.

   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.

                   Federal Communications Commission DA 13-32

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                   Federal Communications Commission DA 13-32