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Federal Communications Commission FCC 18-144
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
American Broadband & Telecommunications ) File No.: EB-IHD-17-00023554
Company ) NAL/Acct. No.: 201932080001
)
Jeffrey S. Ansted )
NOTICE OF APPARENT LIABILITY FOR FORFEITURE AND ORDER
Adopted: October 23, 2018 Released: October 25, 2018
By the Commission: Chairman Pai and Commissioners Carr and Rosenworcel issuing separate
statements.
TABLE OF CONTENTS
Heading Paragraph #
I. INTRODUCTION .................................................................................................................................. 1
II. BACKGROUND .................................................................................................................................... 4
A. Legal Framework ............................................................................................................................. 4
B. Relevant Entities ............................................................................................................................ 12
1. The Company s Ownership and Management ........................................................................ 14
2. American Broadband s Master Agents ................................................................................... 17
C. American Broadband Admitted that it Received Overpayments from the Fund ........................... 23
III. THE COMMISSION S INVESTIGATION ........................................................................................ 35
A. American Broadband had Problems with its Lifeline Enrollments ............................................... 37
1. American Broadband s Agents Apparently Engaged in Conduct Designed to Create
Improper Lifeline Enrollments ................................................................................................ 43
2. American Broadband Apparently Lacked Proper Policies and Procedures to Ensure
Compliance with the Commission s Rules Governing Lifeline Enrollments ......................... 85
B. American Broadband Apparently Failed to De-enroll and Stop Seeking Lifeline Support
for Ineligible Lifeline Subscribers ............................................................................................... 100
1. American Broadband Apparently Sought Lifeline Support for Ineligible Non-Usage
Subscribers ............................................................................................................................ 101
2. American Broadband Apparently Sought Support for Subscribers Who Had
Transferred Their Lifeline Benefit to Another Carrier .......................................................... 110
3. American Broadband Apparently Sought Lifeline Support for Subscribers that its
Management Knew Should have been De-enrolled .............................................................. 125
C. How American Broadband Used its Lifeline Support ................................................................. 134
1. Jeffrey Ansted Apparently Used Funds from the Company s Lifeline Deposit
Account for his Personal Benefit ........................................................................................... 135
IV. DISCUSSION .................................................................................................................................... 141
A. American Broadband s Agents Apparently Created Improper Lifeline Enrollments and
the Company Apparently Knowingly Sought and Received USF Support for those
Ineligible Enrollments .................................................................................................................. 142
1. American Broadband Apparently Knowingly Sought Lifeline Support for Improper
Lifeline Enrollments .............................................................................................................. 143
Federal Communications Commission FCC 18-144
B. American Broadband Apparently Failed to Properly De-Enroll Ineligible Subscribers
from its Lifeline Program, but Apparently Continued to Seek and Receive Lifeline
Support for those Subscribers ...................................................................................................... 152
1. American Broadband Apparently Failed to De-enroll ineligible Non-Usage
Subscribers ............................................................................................................................ 153
2. American Broadband Failed to De-enroll Subscribers Who Had Transferred their
Lifeline Benefit to Another Carrier ....................................................................................... 156
3. American Broadband Apparently Failed to De-enroll Subscribers that Its Records
Indicated Should Have Been De-enrolled ............................................................................. 160
C. Joint and Several Liability for American Broadband and Jeffrey Ansted is Appropriate ........... 168
V. PROPOSED FORFEITURE .............................................................................................................. 173
VI. REQUESTS FOR CONFIDENTIALITY .......................................................................................... 180
VII.ORDERING CLAUSES ..................................................................................................................... 186
APPENDIX A - Original and Revised Form 497s
APPENDIX B - S M Illustration
APPENDIX C - Flight Record
APPENDIX D - Sample: Records and Data Used for Improper Enrollments
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture (NAL), we propose a $63,463,500
forfeiture penalty against American Broadband & Telecommunications Company (American Broadband
or the Company), doing business as American Assistance, for apparently willfully and repeatedly
engaging in conduct that violated the Commission s rules governing the federal Lifeline program.
2. American Broadband (1) apparently created, then sought and obtained Lifeline support
for ineligible or duplicate1 Lifeline accounts; (2) sought and obtained Lifeline support for deceased
individuals; (3) repeatedly filed Forms 497 seeking Lifeline support, and obtained support for ineligible
Lifeline accounts even after its own compliance staff had identified the enrollments as 2 and
1 The Commission has previously addressed avoiding overcompensating providers for service to the same customer
or to more than one customer in the same household. See Lifeline & Link Up Reform & Modernization, Report and
Order, 26 FCC Rcd 9022, 9027, paras. 1, 8-9 (2011) (Lifeline Duplicates Order); see Lifeline and Link Up Reform
and Modernization, Report and Order and Further Notice of Proposed Rulemaking, 27 FCC Rcd 6656, 6687, paras.
69-70 (2012) (Lifeline Reform Order); Requests for Review of Decisions of the Universal Service Administrator by
Assist Wireless, Inc., et al., Order, DA 18-464 (WCB May 7, 2018) (Lifeline IDV Appeals Order). In this NAL and
consistent with the Commission s stated goal, a duplicate applies to seeking duplicative compensation for nearly
identical or substantially similar customer records that likely were the same customer or a member of the same
household. See Lifeline IDV Appeals Order at 5, para. 8.
2 See ABT-OIG00057089. Material redacted because of confidential business or other reasons appears in the public
version of this Notice of Apparent Liability and Forfeiture Order as black space. American Broadband requested
confidential treatment under the Sections 0.457 and 0.459 of Commission s rules for correspondence and documents
it submitted to the Commission, and asserted that the documents and information it furnished contain confidential
proprietary, financial and business information and information about the Company s customers and noting that
such competitively sensitive information is exempted from mandatory disclosure under Exemption 4 of the
Freedom of Information Act ( FOIA ) and Section 0.457(d) of the Commission s rules. See e.g., Letter from Kelley
Drye & Warren LLP, Counsel for American Broadband, to Ryan Palmer, Telecommunications Access Policy
Division, FCC (Sept. 16, 2016) (Sept. 16 Letter) ( The information for which American Broadband is requesting
confidential treatment is proprietary and competitively sensitive information that is not customarily disclosed to the
public or within the industry. The confidential documents reveal details about American Broadband s business
practices, compensation, its internal operating, training and compliance procedures and activities, and its customers,
the disclosure of which would cause great harm. ); Letter from John J. Heitmann, Kelley Drye & Warren LLP,
Counsel for American Broadband, to Dangkhoa Nguyen, FCC, Enforcement Bureau (Nov. 3, 2017) ( [American
Broadband] ... hereby requests confidential treatment of the accompanying drive containing documents . . . the . . .
Production contains confidential proprietary, financial, and business information . . . The information for which
(continued)
2
Federal Communications Commission FCC 18-144
after it had represented to the Commission that it had identified and remediated all improper Lifeline
claims; and (4) failed to de-enroll ineligible subscribers that it knew or should have known were ineligible
to receive Lifeline support. As a result of this conduct, American Broadband apparently violated sections
54.405(e)(1)-(3); 54.407(c)(2); 54.407(c)(2); and 54.410(a) of the Commission s rules and apparently
improperly received millions of dollars of Lifeline support from the Universal Service Fund.
3. We find that the proposed $63,463,500 forfeiture penalty reflects the scope, duration,
seriousness, and egregiousness of American Broadband s numerous apparent violations. As discussed in
detail herein, the proposed penalty reflects the conduct of the Company for a period after which the
Company reported to the Commission that it had received overpayments from the Fund and had taken
action to ensure compliance with Lifeline program rules. We find that American Broadband and its
owner, Jeffrey Ansted, are apparently jointly and severally liable for the proposed forfeiture penalty.3
Additionally, we order American Broadband to submit a report within 30 days of this NAL addressing
why the Commission should not begin proceedings to revoke its Commission authorizations.
II. BACKGROUND
A. Legal Framework
4. Lifeline Program. The Lifeline program provides support for communications services4
provided by eligible telecommunications carriers (ETCs) to qualifying low-income consumers. 5 The
program helps to ensure that low-income Americans have access to the opportunities and security that
phone and broadband services provide, including the ability to connect to jobs, family members, and
emergency services.6
(Continued from previous page)
[American Broadband] requests confidential treatment is proprietary and competitively sensitive information that is
not customarily disclosed to the public or within the industry. The market for Lifeline services, including the
services offered by [American Broadband], is highly competitive . . . Production reveals details about [American
Broadband s] customers and business practices as well as its internal operating and compliance procedures . . .
[American Broadband] derives independent economic value from the fact that such significant, detailed proprietary
information is unknown to its competitors. . . . ). See infra Section VI; see also 47 CFR 0.457, 0.459.
3 As discussed below, Jeffrey Ansted apparently used Lifeline support for his personal benefit, including using
Lifeline support to purchase, among other things, a convertible Ferrari, a Cessna 525C jet, and a condominium in
Florida.
4 Lifeline provides qualifying low-income consumers with voice telephony service or broadband Internet access
service. 47 CFR 54.401(a)(2).
5 Id. See Lifeline and Link Up Reform and Modernization, Report and Order and Further Notice of Proposed
Rulemaking, 27 FCC Rcd 6656, 6687, paras. 69-70 (2012) (codifying a rule limiting Lifeline support to a single
subscription per household ) (Lifeline Reform Order); 47 CFR 54.409 (providing that to constitute a qualifying
low-income consumer, (1) a consumer s household income must be at or below 135% of the Federal Poverty
Guidelines for a household of that size, or the consumer (or the consumer s household) must receive benefits from a
qualifying federal assistance program, such as Supplemental Nutrition Assistance Program (SNAP); and (2) the
consumer must not already be receiving a Lifeline service, and there must not be anyone else in the subscriber s
household subscribed to a Lifeline service); see also 47 CFR 54.400(h) (defining household as any individual
or group of individuals who are living together at the same address as one economic unit. . . . ) and 54.400(g)
(providing that [d]uplicative support exists when a Lifeline subscriber is receiving two or more Lifeline services
concurrently or two or more subscribers in a household are receiving Lifeline services . . . concurrently. ).
6 Lifeline Reform Order, 27 FCC Rcd at 6662 67, paras. 11 18. See Lifeline and Link Up Reform and
Modernization, Third Report and Order, and Further Report and Order and Order on Reconsideration, 31 FCC Rcd
3962 (2016) (Lifeline Reform Third Report and Order).
3
Federal Communications Commission FCC 18-144
5. To participate in the Lifeline program and receive federal universal service support for
providing Lifeline service, a provider must be designated as an ETC.7 Once designated, an ETC may
receive Lifeline support in the amount of $9.25 per month, per subscriber8 based on the number of actual
qualifying low-income consumers it serves directly. 9 Pursuant to section 54.407, in order to receive
reimbursement for offering Lifeline, an ETC must certify as part of each request for reimbursement that
it is in compliance with all of the rules and must keep accurate records of the revenues it forgoes in
providing Lifeline services. 10
6. The Universal Service Administrative Company (USAC) is the administrator of the
federal universal service programs, including the Lifeline program.11 Among other things, USAC collects
and distributes universal service funds.12 USAC uses the National Lifeline Accountability Database
(NLAD) to receive and process subscriber data.13 Under program rules, ETCs must query NLAD to
determine consumers eligibility to receive Lifeline service, and [i]f the Database indicates that a
prospective subscriber . . . is currently receiving a Lifeline service the [ETC] must not provide and shall
not seek or receive Lifeline reimbursement for that subscriber. 14
7. USAC and ETCs use NLAD to facilitate benefit transfers. A benefit transfer occurs
when one service provider transfers a subscriber's Lifeline benefit from another service provider.15 Prior
to initiating a benefit transfer in NLAD, the service provider must obtain the consent of the subscriber and
7 47 U.S.C. 254(e) ( [O]nly an eligible telecommunications carrier designated under section 214(e) shall be
eligible to receive specific federal universal service support. ). Pursuant to sections 214(e)(1)(A) and (B), a
common carrier designated as an ETC must offer the services supported by the federal universal service support
mechanisms either using its own facilities or a combination of its own facilities and resale of another carrier s
services throughout its designated service area and must advertise the availability and charges for those services.
See 47 U.S.C. 214(e)(1)(A), (B).
Each service provider that receives federal universal service support must complete the Service Provider and Billed
Entity Identification Number and Contact Information Form, FCC Form 498, OMB3060-0824 (Form 498). See
http://www.usac.org/ res/documents/cont/pdf/forms/2013/FCC 498 Form-Instructions.pdf (last visited Oct. 23,
2018). USAC uses information provided on the form to administer the billing, collection, and disbursement
operations of the federal universal service programs. Among other information, on the Form 498, the service
provider provides a description of its telecommunications activities and its financial institution information. Id. An
authorized company officer must certify that the information provided on the Form 498 is true, accurate, and
complete. Id.
8 See 47 CFR 54.403(a)(1). An ETC may seek and receive reimbursement from the Fund for revenues it forgoes
in providing the discounted services to eligible consumers in accordance with the Commission s rules. 47 CFR
54.403(a). An ETC may receive additional federal Lifeline support of up to $25 per month for providing Lifeline
service to an eligible resident of Tribal lands. 47 CFR 54.403(a)(2).
9 47 CFR 54.407(a). Effective December 2, 2016, section 54.407(a) only permits ETCs to claim support for
qualifying Lifeline subscribers they serve directly as of the first of the month.
10 47 CFR 54.407(d), (e).
11 See 47 CFR 54.701(a), 54.702(b).
12 47 CFR 54.701(a). See USAC s website at, https://www.usac.org (last visited May 10, 2018).
13 Lifeline Reform Order, 27 FCC Rcd at 6734-6749; see 47 CFR 54.404 (codifying rules governing NLAD),
54.409(c) (providing the rules for consumer qualifications for Lifeline), and 54.410(a)(1) (discussing subscriber
eligibility determination and certification ).
14 See 47 CFR 54.404(b)(1), (2); Lifeline Reform Order, 27 FCC Rcd at 6743, para. 203; see, e.g., Lifeline Linkup
Reform and Modernization et al., Second Further Notice of Proposed Rulemaking, Order on Reconsideration,
Second Report and Order, and Memorandum Opinion and Order, 30 FCC Rcd 7818, 7879, para. 179 & n.340 (2015)
(allowing Oregon, Texas and California to receive approval to opt-out of the NLAD).
15 See USAC s website at https://www.usac.org/li/tools/nlad/benefit-transfers.aspx (last visited Apr. 10, 2017).
4
Federal Communications Commission FCC 18-144
proper documentation of consent.16 Once a benefit transfer has been successfully completed in NLAD,
USAC notifies both the former and current Lifeline service providers of the change.17
8. Pursuant to section 54.410(a) of the Commission s rules, an ETC must implement
policies and procedures for ensuring that their Lifeline subscribers are eligible to receive Lifeline
services. 18 ETCs receiving Lifeline support are responsible for any conduct by their agents or
representatives that violates the Commission s rules.19 In 2015, the Commission revised sections 54.404
and 54.410 of its rules to require that all ETCs retain documentation demonstrating subscriber income-
based or program-based eligibility for participation in the Lifeline program for the purposes of production
during audits or investigations or to the extent required by NLAD processes, including the dispute
resolution processes that require verification of identity, address, or age of subscribers.20 Pursuant to
section 54.417(a), an ETC must maintain records to document its compliance with all Lifeline rules.21
9. Form 497. Prior to the 2018 data months, ETCs used the FCC Form 497 (Form 497) to
request reimbursement from the Fund.22 An ETC filed a Form 497 for each study area code (SAC) in
which it provides Lifeline services.23 On the Form 497, an ETC multiplied the number of its subscribers
by the applicable Lifeline support amount to determine the total Lifeline support amount for the SAC.
Upon request, an ETC must provide to USAC or the Commission any additional supporting information,
including enrollment documents and applicable subscriber data.24 For example, an ETC may be required
to provide the list of subscribers (Subscriber List) for which the ETC sought Lifeline support on its Form
497.25 An ETC may file a revised Form 497 within 12 months after the form has been submitted.26
16 Id.
17 Id.
18 47 CFR 54.410(a).
19 Lifeline and Link Up Modernization and Reform, WC Docket No. 11-42, Order, 28 FCC Rcd 9057 (WCB 2013);
FCC Enforcement Advisory, 28 FCC Rcd 9022 (EB 2013).
20 See Lifeline Link Up Reform and Modernization et al., Second Further Notice of Proposed Rulemaking, Order on
Reconsideration, Second Report and Order, and Memorandum Opinion and Order, 30 FCC Rcd 7818, 7894-95,
paras. 231-32 (2015); 47 CFR 54.404(b)(11) (2015) (providing that ETCs must securely retain subscriber
documentation that the ETC reviewed to verify subscriber eligibility, for the purposes of production during audits or
investigations . . . which require, inter alia, verification of eligibility, identity, address, and age ) and 47 CFR
54.410(b)(1)(ii) (2016) (providing that ETCs [m]ust securely retain copies of documentation demonstrating a
prospective subscriber s income-based eligibility for Lifeline consistent with 54.417 ); 47 CFR 54.410(c)(1)(ii)
(2016) (providing that ETCs [m]ust securely retain copies of the documentation demonstrating a subscriber s
program-based eligibility for Lifeline consistent with 54.417 ); Wireline Competition Bureau Announces Effective
Dates of Lifeline Rules Following Approval by the Office of Management and Budget, Public Notice, 33 FCC Rcd
197 (WCB Jan. 15, 2016) (providing that the rule changes would become effective on or after February 4, 2016).
21 47 CFR 54.417(a). ETCs must keep records required pursuant to sections 54.404(b)(11), 54.410(b), 54.410(c),
54.410(d), and 54.410(f) for as long as the subscriber receives Lifeline service from the ETC, but for no less than
the three full preceding calendar years. Id.
22 See Lifeline Worksheet, FCC Form 497, OMB Approval 3060-0819 (Form 497),
http://www.usac.org/li/tools/forms/default.aspx (last visited Oct. 23, 2018). ETCs submit Lifeline reimbursement
requests through USAC s Lifeline Claims System. See Wireline Competition Bureau Provides Guidance on the
Lifeline Reimbursement Payment Process Based on NLAD Data, Public Notice, 33 FCC Rcd 128 (WCB Jan. 10,
2018); USAC Website, Receive Reimbursement Payment, https://www.usac.org/li/program-requirements/receive-
payment/default.aspx (last visited July 10, 2018).
23 Id.
24 Id.
25 See 47 CFR 54.404(b)(6) (providing that ETCs must transmit to the Database in a format prescribed by the
Administrator each new and existing Lifeline subscriber s full name; full residential address; date of birth and the
(continued)
5
Federal Communications Commission FCC 18-144
10. Consistent with section 54.403 and 54.407 of the Commission s rules, on the Form 497,
an ETC must certify that (1) it will pass through the full amount of all . . . Lifeline support for which it
seeks reimbursement . . . to all qualifying low-income subscribers, and (2) it is in compliance with all of
the Lifeline program rules.27 An officer of the ETC must certify under penalty of perjury that the data
contained in this form has been examined and reviewed and is true, accurate, and complete and persons
willfully making false statements on this form can be punished by fine or imprisonment. 28
11. De-enrollment. If a subscriber becomes ineligible for the Lifeline benefit, the ETC must
de-enroll that subscriber from the Lifeline program. An ETC must de-enroll a subscriber from its Lifeline
program if the ETC has a reasonable basis to believe that the subscriber no longer meets the eligibility
criteria.29 An ETC must also de-enroll a subscriber if it receives notice from USAC to do so.30 Upon
notification that a subscriber is receiving Lifeline service from another ETC or that more than one
member of a subscriber s household is receiving Lifeline service, an ETC must de-enroll the subscriber
from participation in the carrier s Lifeline program within five business days and the ETC shall not be
eligible for Lifeline reimbursement for any de-enrolled subscriber following the date of that subscriber s
de-enrollment. 31 Additionally, under the rules in effect prior to December 2, 2016, pursuant to sections
54.405(e)(3) and 54.407(c)(2), an ETC must de-enroll and not seek Lifeline support for a subscriber if the
subscriber fails to use32 the Lifeline-supported service within 60 consecutive days and does not cure its
non-usage during the 30-day notice period.33 Finally, pursuant to 54.405(e)(5), if an [ETC] receives a
request from a subscriber to de-enroll, it must de-enroll the subscriber within two business days after the
request. 34
(Continued from previous page)
last four digits of the subscriber s Social Security number or Tribal Identification number, if the subscriber is a
member of a Tribal nation and does not have a Social Security number; the telephone number associated with the
Lifeline service; the date on which the Lifeline service was initiated . . . ).
26 See Lifeline Reform Order, 27 FCC Rcd at 6788, para. 305.
27 47 CFR 54.403(a)(1), 54.407(d). See Form 497.
28 See 47 CFR 54.407(d); Form 497.
29 47 CFR 54.405(e)(1) (de-enrollment generally). When an ETC de-enrolls a subscriber, it must transmit to
NLAD the date of Lifeline service de-enrollment within one business day of de-enrollment. See 47 CFR
54.404(b)(10).
30 47 CFR 54.405(e)(2).
31 Id.
32 See 47 CFR 54.407(c)(2)(i)-(v) (providing, [a]ny of these activities, if undertaken by the subscriber, will
establish usage . . . [c]ompletion of an outbound call or usage of data; purchase of minutes or data from the [ETC] .
. . answering an incoming call from a party other than the [ETC] . . . responding to direst contract from the [ETC] . .
. sending a text message (emphasis added)).
33 47 CFR 54.405(e)(3) (de-enrollment for non-usage) (2014); see also 47 CFR 54.407(c) (providing that after
service activation, an ETC shall only continue to receive universal service support . . . for . . . service provided to
subscribers who have used the service in within the last 60 days ). Effective December 2, 2016, the Commission
amended its non-usage requirement, indicating, we find it appropriate at this time to shorten the non-usage period
from 60 to 30 days, along with a corresponding reduction in the time allotted for service providers to notify their
subscribers of possible termination from 30 to 15 days. See Lifeline Reform, Third Report and Order, 31 FCC Rcd
at 4115, para. 415. See 47 CFR 54.405(e)(3), 54.407(c) (2016).
34 47 CFR 54.405(e)(5).
6
Federal Communications Commission FCC 18-144
B. Relevant Entities
12. American Broadband & Telecommunications Company. American Broadband is a
Delaware corporation, headquartered in Toledo, Ohio.35 American Broadband provides
telecommunication services including local and long-distance telephone service and dial-up and
broadband internet access to residential and commercial customers located primarily in rural areas. 36
Among other things, American Broadband is a wireless reseller.37
13. American Broadband is an ETC, designated by states/territories to provide Lifeline
service in Arizona, Colorado, Georgia, Hawaii, Illinois, Indiana, Kentucky, Maryland, Michigan,
Minnesota, Missouri, Nevada, Ohio, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Utah,
West Virginia, and Wisconsin.38 Since 2014, American Broadband has received more than $81.9 million
in federal USF Lifeline support.39
1. The Company s Ownership and Management
14. Jeffrey Ansted. Jeffrey Ansted is the sole corporate officer and shareholder of American
Broadband40 and serves as the Company s president and Chief Executive Officer (CEO).41 As the
president and CEO, Jeffrey Ansted signed and certified American Broadband s Forms 497 and 498.42
15. Ansted is also the managing member of Glenmore-Tuscarauras Partners, (Glenmore-
Tuscarauras), a limited liability company organized under the laws of Delaware.43 In December 2015,
Jeffrey Ansted contracted to purchase a fixed wing multi-engine aircraft (private plane) on behalf of
Glenmore-Tuscarauras.44
35 See Letter from Kelley Drye & Warren LLP, Counsel for American Broadband, to USF Strike Force, FCC, at 3
and Enclosure (May 25, 2017) (May 25 LOI Response). American Broadband was formed in March 2003 and
began providing services in 2004. See American Broadband, Financial Statements and Supplementary Information
with Independent Accountant s Review Report, December 21, 2015 and 2014 at 9 (dated Apr. 1, 2016) (2015
Financial Statements); see also Letter from Loyaan Egal, Enforcement Bureau, FCC, to Jeffrey S. Ansted, President,
American Broadband, and Kelley Drye & Warren LLP, Counsel for American Broadband (Apr. 25, 2017) (LOI);
Certificate of Incorporation, American Broadband and Telecommunications Company at ABTC 58-000002.
36 2015 Financial Statements at 9. On its Form 498, American Broadband described its principal communications
type as competitive access provider/competitive local exchange carrier. See American Broadband FCC Form 498
(dated Mar. 5, 2010).
37 Petition of American Broadband Telecommunications Company for Limited Designation as an Eligible
Telecommunications Carrier in Alabama, Connecticut, Delaware, the District of Columbia, Florida, New
Hampshire, New York, North Carolina, Tennessee, Texas and Virginia, WC Docket No.09-197 (dated June 6, 2013)
at 2 (American Broadband FCC ETC Petition).
38 See id. at 4-5; May 25 LOI Response at 3.
39 See USAC Funding Disbursement Search Tool at, https://www.usac.org/li/tools/disbursements/default.aspx (last
visited Mar. 28, 2018).
40 See 2015 Financial Statements at 9.
41 May 25 LOI Response at 2.
42 See, e.g., American Broadband, FCC Form 498 (dated Mar. 5, 2010); American Broadband, Form 497, SAC
309010, Ohio, data month Jan. 2014 (dated Feb. 5, 2014). See supra note 6; Appendix A.
43 See Subpoena Response, Bank, on file in EB-IHD-17-00023554 (indicating that the company is
managed by members and listing only Jeffrey Ansted as manager).
44 See Subpoena Response, Bank, on file in EB-IHD-17-00023554. Jeffrey Ansted titled and
registered the jet in Glenmore-Tuscarauras s name. American Broadband leased the jet from Glenmore-
Tuscarauras. See Federal Aviation Administration s website at,
http://registry.faa.gov/aircraftinquiry/NNum Results.aspx?NNumbertxt=N254AB (last visited Oct. 23, 2018)
(continued)
7
Federal Communications Commission FCC 18-144
third-party verification process to ascertain whether the customers were alive at the time of his/her
enrollment in the Company s Lifeline program. The Bureau discovered that many of the individuals were
deceased at the time that they were enrolled in American Broadband s Lifeline program. Specifically,
five of the individuals had apparently died in the 1970s, three in the 1980s, and four had died between
1992 and 2000.
76. Based on a review of the Company s Form 497 Subscriber Lists and as indicated in Table
3, American Broadband sought USF support for 13 of the 19 individuals on both its August 2016 and
September 2016 Forms 497. As indicated in Table 3 below, American Broadband claimed more than half
of the individuals continuously from at least August 2016 through December 2016.
Table 3: Deceased Individuals Reported in March 31, 2016 E-mail and Improperly
Claimed on Subscriber Lists Supporting American Broadband s Forms 497
Deceased Subscriber Information Data Months for which American Broadband
Received Lifeline Support for Deceased Subscriber
Last Name First DOB DOD Aug. Sep. Oct. Nov. Dec.
Name Form Form Form Form Form
497 497 497 497 497
A E 7/6/1900 12/1/1974 Yes Yes Yes Yes Yes
A E 4/10/1903 11/1/1986 Yes Yes Yes Yes Yes
A E 6/7/1910 6/1/1979 Yes Yes Yes Yes Yes
A E 6/9/1922 121/1974 Yes Yes Yes Yes Yes
C C 3/10/1900 2/1/1974 Yes Yes Yes Yes Yes
C C 5/9/1902 5/28/2000 Yes Yes Yes Yes Yes
C C 12/4/1908 4/9/1992 Yes Yes No No No
C C 6/4/1917 9/1/1976 Yes Yes No No No
E T 1/28/1905 10/2/1994 Yes Yes Yes No No
E T 10/2/1927 7/12/1982 Yes Yes Yes Yes Yes
P M 8/23/1945 6/5/2004 Yes Yes Yes No No
P M 12/5/1916 12/1/1983 Yes Yes Yes Yes Yes
P M 2/17/1929 2/17/1929 Yes Yes Yes Yes Yes
ased77. on Bthe findings related to March 2016 e- mail, the Bureau conducted an
expanded review of older customers listed on the Company s Subscriber Lists.187 The Bureau determined
that the Company sought Lifeline support on its July 2016 Form 497 for at least 274 deceased individuals,
all of whom were born between the years 1900 - 1929. More significantly, most of these individuals had
been deceased before they had apparently enrolled in the Lifeline program.
78. The Bureau then reviewed the Company s Subscriber List for data month August 2016 to
ascertain whether the Company had continued to seek Lifeline support for additional deceased
individuals. Based on its review and as indicated in Table 4, the Bureau identified 12,571 deceased
subscribers on the Company s August 2016 Subscriber List. Of note, American Broadband filed its first
Form 497 for support as a wireless Lifeline provider in October 2012, and only 6 of the 12,571 were alive
at that time. Thus, almost all of the 12,571 deceased individuals on the Company s August 2016
Subscriber List individuals were deceased well before their alleged enrollment into the Lifeline program.
As indicated in Table 4 below, from August 2016 to December 2016, American Broadband repeatedly
sought and received Lifeline support on its Forms 497 for many of the same deceased individuals. As
187 The Bureau sorted the Company s data month July 2016 Form 497 Subscriber List (for DoBs between 1900 and
1929). Using a third-party verification, the Bureau determined the dates of death for these customers.
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108. The Bureau followed GJM s procedures,264 including analysis of the Company s
Combined Fusion Disconnection Report and its Subscriber Lists, to consider the Company s
subscribers.265 As the table below shows, in August 2016, on its Form 497 Subscriber List American
Broadband apparently included more than 1,200 ineligible non-usage subscribers subscribers that had
not used Lifeline service for 91 days prior to August 1, 2016.
Table 8: Ineligible Non-Usage Subscribers Claimed on American
Broadband Subscriber List (Post Purported Corrections)
State Aug-16
Michigan 758
Ohio 151
Illinois 144
Kentucky 49
Indiana 43
Wisconsin 22
South Carolina 13
Puerto Rico 12
Nevada 10
Pennsylvania 9
Missouri 8
West Virginia 1
Arizona 1
Minnesota 1
Colorado -
Maryland -
Rhode Island -
Utah -
109. In comparing the ineligible non-usage subscribers in Table 7 above (ineligible since at
least December 2014) with Table 8, there is an overlap of only two subscribers. Thus, from August 2016
through December 2016, the Company apparently sought support for two separate categories of ineligible
non-usage subscribers, totaling more than fifteen hundred ineligible non-usage subscribers. These
subscribers had failed to use their Lifeline-supported service for more than 90 days, and although the
Commission s rules (prior to December 2, 2016) instructed ETCs to de-enroll subscribers that failed to
use the service for 60 consecutive days, who do not cure their non-usage during the notice period, the
Company apparently not only failed to timely de-enroll the subscribers, but also improperly continued to
seek and receive support for those subscribers. Thus, the Company apparently violated sections
54.405(e)(2) and 54.407(c)(2) of the Commission s rules.
264 July 2016 was the latest month reviewed by GJM in the 30-month period.
265 The Bureau gathered the data in Table 8 using the GJM s procedures as provided to the Commission. Based on a
review of the Company reported non-usage data, on the Subscriber List for data month September 2016, American
Broadband did not continue to seek support for any of the identified ineligible non-usage subscribers.
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apparently violated section 54.407(a) of the Commission s rules which provides for USF support to ETCs
based on the number of actual qualifying low-income customers that it serves directly.334
C. How American Broadband Used its Lifeline Support
134. From May 2009 through May 2018, American Broadband received Lifeline support
totaling $97,700,219.335 Pursuant to the Commission s rules, an ETC may receive Lifeline support for
providing Lifeline support to a qualifying low-income subscriber, if the ETC certifies that it will pass
through the full amount of support to the qualifying low-income consumer. 336 Additionally, an ETC
must use the support only for its intended use.337 On the Form 498, ETCs must provide the financial
institution and remittance information for the financial institution to which its USF support is to be
deposited.338 From the Company s Form 498, the Bureau identified the financial institution where
American Broadband maintained the account in which its Lifeline funds were deposited (Lifeline Deposit
Account).339 Since the creation of the account, Jeffrey Ansted alone had signatory authority on the
account. From at least January 2014 to April 2017, American Broadband received all of its Lifeline
support into the Lifeline Deposit Account. As discussed below, Jeffrey Ansted transferred, by checks and
wires, funds from the Lifeline Deposit Account to various other accounts, including Ansted s personal
and trust accounts.
1. Jeffrey Ansted Apparently Used Funds from the Company s Lifeline
Deposit Account for his Personal Benefit
135. Jeffrey Ansted apparently used Lifeline support for his personal benefit. From January
2014 to February 2017, Jeffrey Ansted authorized transfers totaling at least $10 million from the Lifeline
Deposit Account to several personal accounts and used funds transferred from the Lifeline Deposit
account for personal purchases.340 For example, in April 2014, Jeffrey Ansted purchased a $1.3 million
condominium in Florida using funds transferred from the Lifeline Deposit Account for the purchase
deposit.341 On November 16, 2015, Jeffrey Ansted wired $ from the Lifeline Deposit Account
to a personal account, and two days later, he purchased a $250,000 convertible Ferrari 458 Spider.342 In
May and July 2015, Jeffrey Ansted used the Lifeline Deposit Account to pay for tens of thousands of
dollars of landscaping fees.343 Additionally, Jeffrey Ansted used funds from (or transferred from) the
Lifeline Deposit Account to pay for clothing, country club and yacht club memberships in Florida, and
boat slip fees in Michigan.344
334 47 CFR 54.407(a) (2015). See also 47 CFR 54.404(b)(6) (requiring ETCs to transmit certain information into
the database for each new and existing Lifeline subscriber).
335 See Lifeline Disbursement Tool, https://www.usac.org/li/tools/disbursements/results.aspx (last visited May 28,
2018). This total includes wireline and wireless Lifeline service.
336 47 CFR 54.403(a)(1).
337 47 CFR 54.7 (providing that an ETC must use universal service support only for the provision, maintenance,
and upgrading of facilities and services for which the support is intended ).
338 See generally FCC Form 498.
339 The Lifeline Deposit Account was a brokerage service account in the name of American Broadband and
Telecommunications.
340 American Broadband Bank Records, on file in EB-IHD-17-00023554.
341 Id.
342 Jeffrey Ansted titled and registered the Ferrari in his name. On file in EB-IHD-17-00023554.
343 American Broadband Bank Records, on file in EB-IHD-17-00023554. The fees totaled approximately $ .
344 Id.
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136. effrey AnstedJ used money from the Lifeline Deposit Account toward the purchase of an
$8 million Cessna 525C jet. Specifically, on December 22, 2015, Jeffrey Ansted executed a purchase
agreement for the jet, and on the same day, he wired a $ deposit to the plane s manufacturer
from the Lifeline Deposit Account.345 On January 29, 2016, Jeffrey Ansted wired an additional $
from the Lifeline Deposit Account to the plane s manufacturer.346
137. fter the planeA was delivered in March 2016, J effrey Ansted and his family used it for
personal travel. As an example, on March 24, 2016, Jeffrey Ansted notified a relative that
. 347 Based on flight records for the jet, from June 17-
19, 2016, at least one member of the Jeffrey Ansted family traveled round trip from Toledo, Ohio to
Martin State Airport in Middle River, Maryland.348 According to a tournament schedule and team rosters,
the lacrosse club that Jeffrey Ansted s eldest son played on participated in that lacrosse tournament in
Towson, Maryland (approximately 13 miles from Martin State Airport) from June 17-19, 2016.
138. According to flight records, on March 26, 2017, Jeffrey Ansted, his wife, and youngest
child flew from Toledo Express Airport to Owen Roberts International Airport (the Grand Cayman
Island).349 The family returned to Toledo four days later.350 On March 30, 2017, a family member posted
a photo showing Ansted s family on a beach; the photo s location was tagged Grand Cayman Island. 351
139. On February 5, 2017, Jeffrey Ansted, relatives, and friends traveled to Toronto,
Canada.352 As detailed in the flight manifests, the relatives and friends remained in Toronto, but shortly
after arriving in Toronto, Jeffrey Ansted and another family member flew to Philadelphia,
Pennsylvania.353 Based on flight records, the jet returned to Toronto to pick-up the other family members
and friends for a flight back to Toledo.354
140. As detailed in flight records, Jeffrey Ansted and his family used the jet to make at least
nine trips to Florida between March 2016 and April 2017.355 On December 27, 2016, at least one member
of the Ansted family flew from Toledo, Ohio, to Sarasota-Bradenton International Airport in Florida,356
which is near the family s condominium that was purchased with funds transferred from the Lifeline
Deposit Account, and also where Jeffrey Ansted had memberships at a nearby golf club and yacht club
memberships which were paid, in part, by funds from the Lifeline Deposit Account.357
345 Id.
346 Jeffrey Ansted titled and registered the jet under his holding company, Glenmore-Tuscarauras. American
Broadband leased the jet from Glenmore-Tuscarauras and provided funds from the Lifeline Deposit Account for the
maintenance, fuel, and ownership costs associated with the jet s operations. See supra Section II.B.1.
347 E-mail from to Jeffrey Ansted, American Broadband (Mar. 24, 2016, 12:34 p.m.) at ABT-
OIG00004083.
348 On file in EB-IHD-17-00023554.
349 On file in EB-IHD-17-00023554.
350 On file in EB-IHD-17-00023554.
351 American Broadband Bank Records, on file in EB-IHD-17-00023554.
352 On file in EB-IHD-17-00023554.
353 On file in EB-IHD-17-00023554.
354 On file in EB-IHD-17-00023554.
355 See Appendix C.
356 The following day, an Ansted family member posted on a social media site a photo of a beach; the photo s
location was tagged Longboat Key, Florida.
357 On file in EB-IHD-17-00023554.
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IV. DISCUSSION
141. ased on Bevidence developed in this Investigation, American Broadband apparently
willfully and repeatedly violated sections 54.404(b)(1), (2), 54.405(e)(1)-(3), 54.407(a), (c), (d), (e), and
54.410(a) and (c) of the Commission s rules. The Company s agents apparently created improper
Lifeline accounts, by, among other things, enrolling duplicate customers and deceased individuals.
Month after month, the Company filed its Forms 497, continually seeking support for identified, improper
Lifeline accounts. The Company also apparently failed to de-enroll ineligible non-usage subscribers and
benefit transfers, as well as failed to de-enroll subscribers that it knew were no longer eligible to receive
Lifeline benefits. Additionally, the Company generally lacked policies and procedures to ensure
compliance with the Commission s rules governing, among other things, subscriber enrollment and de-
enrollments. The Company made certain Admissions to the Commission and offered assurances that it
had resolved all issues that resulted in it improperly receiving more than $ from the Fund.
However, the Company apparently continued to violate the Commission s rules after August 2016, and
the Company s noncompliance was apparently far more extensive than it reported to the Commission.
mericanA. A Broadband s Agents Apparently Created Improper Lifeline Enrollments
and the Company Apparently Knowingly Sought and Received USF Support for
those Ineligible Enrollments
142. American Broadband apparently violated sections 54.404(b)(2) and (3) of the
Commission s rules, which provide that an ETC must not provide and shall not seek or receive Lifeline
reimbursement for a subscriber who is currently receiving Lifeline service and must not seek and will
not receive Lifeline reimbursement for providing Lifeline service to an individual residing where
another individual . . . is currently receiving a Lifeline service unless that individual has certified that
no one in his or her household is already receiving Lifeline service.358 The Company also apparently
violated: (1) section 54.410(a), which mandates that ETCs implement policies and procedures to ensure
that their subscribers are eligible to receive Lifeline service; (2) sections 54.410(a)(1) and (2), which
instruct ETCs to confirm that their subscribers are qualifying low-income subscribers, as defined by
program rules;359 and (3) sections 54.410(b)(1)(ii) and (c)(1)(ii), which require ETCs to securely retain
copies of the documentation demonstrating customers income-based or program-based eligibility. Based
upon the Bureau s analysis of American Broadband s Forms 497 and Subscriber Lists for data months
August 2016 through December 2016, the Company apparently sought and received Lifeline support for
thousands of improper Lifeline enrollments.
1. American Broadband Apparently Knowingly Sought Lifeline Support for
Improper Lifeline Enrollments
143. American Broadband contracted with master agents to enroll its customers into the
Lifeline program, and the Company is responsible for those agents and any of their conduct that violates
the Commission s rules.360 American Broadband s agents apparently manipulated names, addresses,
SSNs, and DoBs to improperly enroll consumers into the Lifeline program.361 Based on Company
358 47 CFR 54.404(b)(2)-(3).
359 47 CFR 54.410(a) (requiring an ETC to confirm that the consumer is a qualifying low-income consumer
pursuant to 54.409 and complete the eligibility determination and certifications required by program rules).
See also 47 CFR 54.403(a)(1) (stating that the basis Lifeline support amount will be made available to an [ETC]
providing Lifeline service to a qualifying low-income consumer ).
360 Lifeline and Link Up Modernization and Reform, WC Docket No. 11-42, Order, 28 FCC Rcd 9057 (WCB 2013);
FCC Enforcement Advisory, 28 FCC Rcd 9022 (EB 2013).
361 See supra Section III.A.1; 47 CFR 54.404(b)(6) (providing that an ETC must transmit to NLAD each new and
existing Lifeline subscriber s full name . . . full residential address . . . date of birth and the last four digits of the
subscriber s Social Security number ).
47
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of subscribers at a single address,
. 371
147. Under program rules, each subscriber must provide proof of his/her eligibility to receive a
Lifeline benefit, and as part of the consumer qualification, a consumer may provide evidence of its
participation in certain programs, such as the SNAP program.372 Program rules, require ETCs to review
eligibility documentation for prospective subscribers whose eligibility cannot be verified using an
eligibility database.373 However, American Broadband s agents apparently enrolled more than one
individual using the same SNAP card. As discussed above, in at least two states/territories, American
Broadband s agents reused SNAP cards to enroll multiple individuals.374 In June 2016, American
Broadband contacted USAC concerning the use of SNAP cards as proof of Lifeline eligibility.375 In the
same month, notified Company management that agents had reused SNAP cards in both Puerto
Rico and Illinois. Despite notice that some of the subscribers were ineligible based on program rules,
American Broadband continued to seek support for some of the apparently ineligible subscribers on its
Forms 497 through at least December 2016.
148. American Broadband s agents also apparently enrolled deceased individuals into the
Lifeline program.376 As discussed above, most of the deceased individuals had died years before their
enrollment in the Company s Lifeline program. Even after the Company was made aware that at least
one agent had enrolled deceased individuals, the Company continued to request and receive USF support
for many of those individuals from at least August 2016 through December 2016. In August 2016 alone,
the Company sought Lifeline support for more than 12,500 deceased subscribers.
149. Based on these e-mails and other communications, American Broadband was aware of its
agents conduct, yet based a review of the Company s Forms 497 and corresponding Subscriber Lists, the
Company repeatedly filed claims for support for enrollment that its own compliance personnel
questioned. The Company repeatedly filed claims for enrollments created by agents who were repeatedly
identified as creating questionable ( or ) accounts. By manipulating personal
information, reusing program eligibility documents, and enrolling deceased individuals, American
Broadband agents bypassed the rules and procedures established by the Commission and USAC to protect
the Fund from waste, fraud, and abuse. The Company continued to permit problem agents to enroll
individuals into the Lifeline program. Even in instances where the Company fired an agent for improper
conduct, the Company continued to seek Lifeline support for the agents improper enrollments.377
150. Effective February 17, 2016, the Commission required ETCs to retain documentation
used to verify subscriber eligibility, as well as documentation used to verify consumer income-based
eligibility.378 American Broadband repeatedly failed to comply with these requirements. As
demonstrated in the Bureau review of the Company s S M enrollments, the Company often
failed to retain the required documents.379 Even with documented proof that agents had enrolled the same
371 American Broadband BeQuick Ticket #5485 Max Orders at Address (Apr. 27, 2016). See supra Section III.A.1.
372 47 CFR 54.409(a)(2).
373 47 CFR 54.410(c)(1)(B).
374 See supra Section III.A.1.
375 E-mail from , American Broadband, to , USAC Lifeline Program, cc ,
American Broadband (June 6, 2016, 5:36 p m.) at ABT-OIG00527613.
376 See supra Section III.B.1.
377 See supra Section III.A.1.
378 47 CFR 54.404(b)(11), 54.410(b)(1)(ii), (c)(1)(ii).
379 See supra Section III.A.1.
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changed its policies and procedures to prevent claims for ineligible non-usage subscribers.385 However,
based on our review of the Company s Subscriber Lists, from August 2016 through December 2016, a
period after which the Company represented that it had corrected issues related to seeking support for
ineligible non-usage subscribers, the Company apparently sought and received Lifeline support for more
than 1,500 ineligible non-usage subscribers.386 Thus, in addition to apparently violating sections
54.405(e)(3) and 54.407(c)(2) for failing to de-enroll ineligible non-usage subscribers, the Company also
apparently violated section 54.410(a) of the Commission s rules by failing to implement policies and
procedures for ensuring that their Lifeline subscribers are eligible to receive Lifeline services. 387
2. American Broadband Failed to De-enroll Subscribers Who Had Transferred
their Lifeline Benefit to Another Carrier
156. Pursuant to section 54.405(e)(1) of the Commission s rules, if an ETC has a reasonable
basis to believe that a Lifeline subscriber no longer meets the criteria to be considered a qualifying low-
income consumer, the ETC must notify the subscriber and de-enroll the subscriber if the subscriber fails
to demonstrate eligibility by the deadline in the rules. American Broadband apparently violated section
54.405(e)(1).388
157. As discussed above, in early March 2014, American Broadband began to receive notices
from USAC/NLAD concerning benefit transfers.389 Several members of the Company s management
team received the communications directly from USAC or other members of the team. Despite the fact
that high-level officials within the Company received the communication from USAC, the Company
failed to de-enroll the transferred subscribers from its Lifeline program. In fact, based on the Company s
Form 497 Subscriber Lists, the Company sought Lifeline support for one benefit transfer subscriber
continuously from April 2014 through October 2014. In early March 2014, the Company had received
notice of only one benefit transfer. Despite having only one benefit transfer subscriber to remove from its
program, the Company failed to do so.390
158. Later in March 2014, the Company had received notices indicating that 24 subscribers
had transferred their Lifeline service to another carrier. Again, the Company continued to seek Lifeline
support for those subscribers even after it received notice from USAC. Between March 2014 through
July 2016, American Broadband received thousands of benefit transfer notices from USAC. American
Broadband apparently never implemented policies and procedures to ensure the proper resolution of
benefit transfers. It apparently failed to stop seeking Lifeline support for ineligible benefit transfer
subscribers. The Company s issues with benefit transfers continued to grow during this period.391
159. Even after the Company reported to the Commission that it had amended its policies and
procedures to resolve problems with benefit transfers, the Company continued to seek Lifeline support for
ineligible benefit transfer subscribers. In reviewing the Company s Subscriber Lists for August 2016
through December 2016, the Company apparently sought and received support for more than 3,700
ineligible benefit transfer subscribers.392 Thus, from at least August 2016 through December 2016, the
Company apparently violated section 54.405 of the Commission s rules.
385 See Sept 23 Letter.
386 See supra Section III.B.1.
387 47 CFR 54.410(a).
388 47 CFR 54.405(e)(1).
389 See supra Section III.B.2.
390 Id.
391 Id.
392 Id.
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statutory provisions.407 For example in Telseven, the Commission held the sole owner of the company
individually liable as an egregious violator[ ] of the Act who create[d] sham corporate forms to evade
liability. 408
170. Here, American Broadband is apparently the corporate vehicle for the activities of one
person, Jeffrey Ansted. In all material respects, the evidence shows that Jeffrey Ansted alone controls
American Broadband. At all times relevant to the violations described in this NAL, Jeffrey Ansted shared
a common identity with and control over American Broadband. During the relevant period, Jeffrey
Ansted apparently maintained exclusive control of American Broadband in its business matters. From at
least January 2014, Jeffrey Ansted was the exclusive shareholder of American Broadband.409 He served
as American Broadband s president and CEO.410 He oversaw the submission of and certification of
apparently inaccurate Forms 497 that resulted in American Broadband improperly receiving millions of
dollars in USF support.411 During the relevant period, Jeffrey Ansted signed and certified all of the
Company s Forms 497.
171. Likewise, Jeffrey Ansted maintained control over the Company s finances. He
maintained control over the Company s Lifeline Deposit Account; and he held sole signatory authority of
the Lifeline Deposit Account.412 Although that account was in the name of American Broadband, Jeffrey
Ansted determined the amounts and times that funds would be directed to himself and to the Company.
Ansted directed millions of dollars in transfers and purchases directly from the Lifeline Deposit Account
for expenditures that benefited himself and/or his family. For example, Jeffrey Ansted transferred money
from the Lifeline Deposit Account and to a personal account to purchase a convertible Ferrari and he
wired money from the Lifeline Deposit Account to purchase a private jet. Additionally, Jeffrey Ansted
directed funds from the Lifeline Deposit Account to the Company s operating account, and from that
account, he made cash withdrawals and paid for country club memberships.413
172. The facts and circumstances in this case require us to disregard the separate identities of
American Broadband and Jeffrey Ansted to ensure the integrity of the Lifeline program. The
Commission must adhere to the Congressional mandate that universal service support, including Lifeline
support, be specific, predictable and sufficient. 414 As discussed above, we find that American
Broadband apparently violated several sections of the Commission s rules, and in so doing, received more
Lifeline support than it was entitled to obtain which Jeffrey Ansted apparently used not to provision
Lifeline service but for his personal use. Holding Jeffrey Ansted personally liable for the forfeiture
penalty furthers the Commission s goals of properly enforcing Lifeline program rules.415 Accordingly,
407 See TelSeven, LLC, Patrick B. Hines, Forfeiture Order, 31 FCC Rcd. 1629, 1633-36 (2016) (TelSeven Forfeiture
Order); see also TelSeven, LLC, Patrick B. Hines, Notice of Apparent Liability for Forfeiture, 27 FCC Rcd. 6636,
6649-50 (2012).
408 See TelSeven Forfeiture Order, 31 FCC Rcd at 1634, para. 13.
409 See supra Section II.B.1.
410 Id.
411 Id.
412 See supra Section III.C.1.
413 Id.
414 47 U.S.C. 254(b)(5).
415 See Telseven Forfeiture Order, 31 FCC Rcd at 1636, para. 19 (providing, [i]n an investigation such as this one,
where the corporate enterprise was designed to carry out the fraudulent activities of one person ... we find that the
purpose of the statute would otherwise be frustrated if we permitted Patrick Hines to hide behind his corporate
entities and avoid personal liability for such statutory violations ); Ernesto Bustos Licensee of Station WTBL-CD
Lenoir, North Carolina, Forfeiture Order, 29 FCC Rcd at 1898, 1900 (2014) (finding that Catawba Broadcasting
and Ernesto Bustos are the same person and stating that [a] corporation will be looked upon as a legal entity
(continued)
54
Federal Communications Commission FCC 18-144
we find that American Broadband and Jeffrey Ansted are jointly and severally liable for the resulting
forfeiture, as well as any reimbursements to the Fund.
V. PROPOSED FORFEITURE
173. In light of American Broadband s apparent violations of the Commission s rules, we
propose a forfeiture penalty pursuant to Section 503(b) of the Act, which authorizes the Commission to
assess a forfeiture penalty against a telecommunications carrier of up to $196,387 for each violation or
each day of a continuing violation, up to a statutory maximum of $1,963,870 for a single act or failure to
act.416 The Commission retains the discretion to issue forfeitures on a case-by-case basis, under its
general forfeiture authority contained in Section 503 of the Act.417 In determining the appropriate
forfeiture amount, the Commission considers 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, 418 as well as our forfeiture guidelines.419
174. Based on the facts and record in this case, we have determined that American Broadband
apparently: (1) created improper Lifeline enrollments by manipulating personal identifying information
and improperly enrolling deceased individuals; (2) failed to de-enroll subscribers that the Company knew
were no longer eligible to receive a Lifeline support; (3) failed to implement policies and procedures for
ensuring that its subscribers were eligible to receive Lifeline support; and (4) failed to maintain records to
document compliance with the Commission s requirements, in apparent violation of sections 54.404(b),
54.405(e)(1) - (3), 54.410(b)(1)(ii) and (c)(1)(ii)of the Commission s rules. Also, as discussed above, we
determined that the Company apparently filed Forms 497 seeking support for ineligible Lifeline accounts,
in apparent violation of section 54.407 of the Commission s rules. With respect to the filing of improper
Forms 497, we find that these apparent violations occurred, at a minimum, beginning in March 2014 and
continued at least through December 2016 notwithstanding the Company s August 2016 indication to
WCB that it had implemented new policies and procedures to prevent future submissions of inaccurate
(Continued from previous page)
until sufficient reason to the contrary appears; but, when the notion of legal entity is used to defeat public
convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of
persons. ).
416 See 47 U.S.C. 503(b)(2)(B); 47 CFR 1.80(b)(2). These amounts reflect inflation adjustments to the
forfeitures specified in Section 503(b)(2)(B) of the Act ($100,000 per violation or per day of a continuing violation,
up to a statutory maximum of $1,000,000 per any single act or failure to act). See Amendment of Section 1.80(b) of
the Commission s Rules: Adjustment of Civil Monetary Penalties to Reflect Inflation, Order, 33 FCC Rcd 46 (EB
2018) (2018 Inflation Adjustment Order); see also Adjustment of Civil Monetary Penalties to Reflect Inflation, 83
Fed. Reg. 4600 (Feb. 1, 2018). Additionally, the 2015 Inflation Adjustment Act provides that the new penalty levels
shall apply to penalties assessed after the effective date of the increase, including [penalties] whose associated
violation predated such increase. Pub. L. No. 114-74, 701, 129 Stat. 584, 599 (the 2015 Inflation Adjustment Act
amended the Federal Civil Penalties Inflation Adjustment Act of 1990, which is codified, as amended, at 28 U.S.C.
2461).
417 See 47 U.S.C. 503(b)(6)(B) ( No forfeiture penalty shall be determined or imposed against any person under
this subsection if . . . the violation charged occurred more than 1 year prior to the date of the issues of the required . .
. notice of apparent liability. ); see, e.g., Letter signed by Rakesh Patel, USF Strike Force and John Heitmann,
Counsel for American Broadband (May 2018) (stating that for purposes of calculating the statute of limitations,
pursuant to 47 U.S.C. 503(b)(6), the parties agree that any limitations period for the possible violations as set forth
in the preamble of this Agreement shall be tolled until October 28, 2018) (Sixth Tolling Agreement).
418 47 U.S.C. 503(b)(2)(E).
419 See 47 CFR 1.80(b)(8); Note to Paragraph (b)(8): Guidelines for Assessing Forfeitures.
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Forms 497 and in its August 2016 Form 497 filing, it had removed all subscribers associated with the
relevant issues.420
175. We believe a significant forfeiture is appropriate, and we calculate a proposed forfeiture
to account for the egregiousness of the harm caused by the Company s conduct and to serve as both a
punishment and a deterrent to future wrongdoing. In other cases involving apparent mass fraud, the
Commission has applied a forfeiture of $1,000 per verified violation. For example, in the Abramovich
NAL, the Commission applied a based forfeiture in the amount of $1,000 per unlawful spoofed robocall,
providing any proposed forfeitures in such cases must reflect the exponential harm associated with large-
scale spoofing operations where the spoofer has the intent to defraud, cause harm, or wrongfully obtain
something of value. 421 In this case, American Broadband apparently intended to defraud the Fund and
wrongfully obtained universal service support. Given the similarity in harm, the large-scale misconduct,
and the apparent intent to defraud, we apply here the same forfeiture methodology proposed in the
Abramovich case.422 We propose a base forfeiture in the amount of $1,000 per unique improper Lifeline
account claimed on the Company s Form 497.423 We multiply the base forfeiture value of $1,000 by each
of the 42,309 improper claims/subscribers424 for which American Broadband sought support in August
2016, for a total base forfeiture of $42,309,000 for which American Broadband and Jeffrey Ansted are
apparently liable.425
176. Additionally, based on the egregious conduct discussed in detail above, we find that the
circumstances in this case merit a significant upward adjustment.426 American Broadband s violations of
420 Sept. 16 Letter at 2. See supra Sections III.A-III.B; see also 47 CFR 1.80(c) (imposing limits on the time when
a forfeiture proceeding may be initiated).
421 See Adrian Abramovich, Marketing Strategy Leaders, Inc., and Marketing Leaders, Inc., 32 FCC Rcd. 5418,
5427, paras. 24 (2017) (Abramovich NAL).
422 Id. at paras. 25-26.
423 The base forfeitures in Section 1.80 range from $1,000 (failure to provide station identification, for example) to
the statutory maximum (misrepresentation/lack of candor). While the Commission evaluates each case in light of
the nature and specific circumstances of the particular violations of Commission rules, we note that the Commission
has used a $1,000 base forfeiture amount in addressing similar large-scale egregious misconduct. See generally
Abramovich NAL.
424 As discussed in Section III.A. above, American Broadband sought Lifeline support for 18,894 improper Lifeline
enrollments on its Subscriber List corresponding with its data month August 2016 Form 497. See supra Tables 1-6
and para. 151. As discussed in section III.B. above, in data month August 2016, the Company sought Lifeline
support for 32,032 accounts that it failed to properly de-enroll. See supra Tables 7-10. Within the categories of
improper enrollments and de-enrollments, some of the improper accounts appeared more than once; we deleted from
the total of improper claims (50,926) any overlapping accounts. Specifically, we deleted 8,617 improper accounts,
for a total of 42,309 improper accounts in data month August 2016.
425 Although the Commission has used a different forfeiture methodology in some previous NALs involving the
Lifeline program one tying forfeiture amounts to the number of filings made in violation of our rules, the number
of ineligible subscribers claimed, and the support unlawfully claimed those NALs involved conduct less pervasive
than the conduct we have found in mass fraud cases, and as such, are not binding on us here. See, e.g., Budget
Prepay, Inc., Notice of Apparent Liability for Forfeiture, 29 FCC Rcd 2508 (2014); VCI Company, Notice of
Apparent Liability for Forfeiture, 22 FCC Rcd 15933 (2007). We find that the facts in this case are more akin to the
egregious conduct in the Abramovich case. In instances involving large-scale egregious conduct, we recognize that
there is risk that the fine will far exceed any person s or company s ability to pay; yet, because of the extensive,
apparent fraud, we find that proposing a significant penalty is appropriate. See Abramovich NAL, 32 FCC Rcd at
5426, para. 24.
426 See Abramovich NAL, 32 FCC Rcd at 5427, paras. 25-26; Adrian Abramovich, Marketing Strategy Leaders, Inc.,
and Marketing Leaders, Inc., Forfeiture Order, FCC 18-58 (May 10, 2018).
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Federal Communications Commission FCC 18-144
the Commission s rules continued even after its own staff had identified enrollments as . The
Company admitted that it had failed to comply with several of the rules and procedures governing the
Lifeline program and reported that it had taken corrective measures to correct the problems. However,
the Company continued to seek and receive Lifeline support for the same ineligible customers/accounts
after its disclosure to the Commission. The Company also failed to disclose additional issues which
allowed it to receive improper payments from the Fund. As an example, in as early as December 2015,
the Company was apparently aware that its agents manipulated personal identifying information to create
duplicate accounts yet the Company failed to disclose these facts to either USAC or the Commission.427
Also, by June 2016, the Company was aware that it was improperly seeking support for roughly 68,000
subscribers, but instead of immediately correcting the issue, it designed a plan to continue to improperly
seek Lifeline support for those subscribers and it again failed to disclose this conduct to the
Commission. Month after month, the Company filed Forms 497 seeking support for thousands of
ineligible Lifeline accounts, and in maintaining and/or increasing the reported number of subscribers, the
Company concealed the true nature of its Lifeline business. Therefore, based on this apparent egregious
misconduct,428 we propose an upward adjustment to the base forfeiture of $21,154,500, which is fifty
percent of the base forfeiture.
177. Accordingly, as summarized in Table 11, we find that American Broadband and Jeffrey
Ansted are apparently liable for a forfeiture penalty of $63,463,500 for American Broadband s apparent
violations as discussed above and conclude that the total proposed forfeiture is warranted.
Table 11: Calculation of the Forfeiture Penalty
Forfeiture Calculation No. of Subscribers Multiplier SUB-TOTAL
Base: Unique Subscribers x $1,000 42,309 $1,000 $ 42,309,000.00
Upward Adjustment $ 21,154,500.00
$ 63,463,500.00
178. We find that this forfeiture structure in no way forecloses the Commission or any other
governmental entity from taking additional enforcement action and imposing additional forfeitures for
other apparent violations of the Lifeline rules. Additionally, we clarify that the penalties that result from
this forfeiture structure are separate from any amounts that the Company may be required to refund to
make the Fund whole.
179. In addition, in light of American Broadband s egregious misconduct and the
demonstrated harm to the Fund from the apparent violations, we order American Broadband to submit a
report within 30 days of release of this NAL explaining why the Commission should not initiate
proceedings against American Broadband to revoke its Commission authorizations.
VI. REQUESTS FOR CONFIDENTIALITY
180. American Broadband has requested that that the materials it submitted to the Commission
in this matter be withheld from public inspection, pursuant to section 0.459 of our rules. While it did
provide general reasons as to why it believes the materials should be withheld, albeit with little
elaboration, it did not specify the particular information it believed was confidential, as required by our
rules, but simply made a blanket claim of confidentiality as to all of the submitted materials. And while
the materials submitted were numerous, American Broadband could have, for example, identified specific
427 As discussed above, the Company failed to properly resolve the issues with its agents and it continued to seek
Lifeline support for the ineligible accounts created by its agents.
428 See 47 CFR 1.80(b)(8), Note (providing guidelines that the Commission and its staff may use in assessing
forfeitures, including upward adjustment criteria such as egregious misconduct).
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Federal Communications Commission FCC 18-144
categories of information for which it sought confidential treatment (e.g., subscriber information). It did
not.
181. American Broadband has not followed our rules in requesting that this information be
withheld from public inspection. We are also not persuaded that the public release of the information
American Broadband has provided in this proceeding will place it at a competitive disadvantage and
cause it substantial competitive harm. Additionally, when balancing the public and private interests at
stake, we conclude that releasing to the public this and the other information cited in this NAL will serve
the public interest by furthering transparency in the Lifeline program and that the public interest
outweighs any countervailing interest that American Broadband has in keeping the information
confidential. We conclude that each of these reasons provide a sufficient basis for our denial of American
Broadband s requests and releasing the information.
182. With respect to the materials cited in this NAL which American Broadband has requested
be withheld from public inspection pursuant to section 0.459 of our rules, we deny that request with only
the following exceptions: the names, addresses and other personally identifiable information of
subscribers; the specific salaries, commissions, the price other compensation paid to and fines imposed
on sales agents; the price of phones; and the number of valid applications an agent needs to submit to
remain in active status for American Broadband. We specifically note that we are rejecting the requests
that we withhold from the public the extent of American Broadband s non-compliance with Lifeline and
other Commission rules and regulations; the problems that may have led to its non-compliance; its
detection of non-compliance; its previous methods for detecting non-compliance; and its proposed plans
for complying with our rules and regulations in the future.
183. American Broadband has not made any demonstration that, with the exceptions listed
above, release of the information for which it seeks confidentiality would cause it competitive harm.
Moreover, we note that information that is in the public domain is not subject to protection as
confidential. 429 For example, the number of Lifeline subscribers a company serves and the number that
are de-enrolled each month are publicly filed on FCC Form 555s. In addition, as the Commission has
explained, they are also readily ascertainable from other public sources.430 This information, therefore,
may not be withheld from public release under our rules. In addition, materials that are simply
embarrassing or that cause customer disgruntlement are generally not by that fact alone entitled to
confidential treatment. Rather, the materials must be of a type such that competitors could use the
information to gain a competitive advantage.431
429 See, e.g., CNA Fin l Corp. v. Donovan, 830 F. 2d 1132, 1154 (D.C. Cir. 1987); Lifeline and Link Up Reform and
Modernization, Second Notice of Proposed Rulemaking, Order on Reconsideration, Second Report and Order, and
Memorandum Opinion and Order, 30 FCC Rcd 7818, 7911 (2015) (Nexus MO&O).
430 Nexus MO&O, 30 FCC Rcd at 7911-12.
431 See, e.g., Public Citizen Health Research Group v. FDA, 704 F.2d 1280, 1291 n.30 (D.C. Cir. 1983) (observing
that competitive harm should be limited to harm flowing from the affirmative use of proprietary information by
competitors and should not be taken to mean harms such as customer or employee disgruntlement or
embarrassing publicity attendant upon public revelations concerning, for example, illegal or unethical payments to
government officials (internal quotations omitted)(emphasis in original)); CNA Fin. Corp. v. Donovan, 830 F.2d
1132, 1154 (declaring that unfavorable publicity and demoralized employees insufficient for showing of
competitive harm); General Elec. V. NRC, 750 F.2d 1394, 1402 (7th Cir. 1984); In Def. of Animals v. USDA, 587 F.
Supp. 2d 178, 182 (D.D.C. 2008) (excluding proposed expert testimony that addressed reputational harm caused by
negative publicity, which was irrelevant to the competitive harm inquiry under Exemption 4 ); Ctr. to Prevent
Handgun Violence v. United States Dep t of the Treasury, 981 F. Supp. 20, 23 (D.D.C. 1997) (denying competitive
harm claim for disclosure that would cause unwarranted criticism and harassment inasmuch as harm must flow
from competitors use of the released information, not from any use made by the public at large or customers ),
appeal dismissed, No. 97-5357 (D.C. Cir. Feb. 2, 1998).
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Federal Communications Commission FCC 18-144
184. As an independent reason for denying American Broadband s requests and releasing the
information cited in this NAL, we conclude that making public this and the other information we have
received in the course of our investigation and cited in this NAL would serve the public interest by
furthering transparency in the Lifeline program. Even if some of it would be considered to be trade
secrets or would otherwise be permitted to be withheld under Exemption 4 of the Freedom of Information
Act, section 0.457(d)(2) of our rules authorizes us to publicly release trade secrets or confidential
commercial information, that are subject to a request for confidential treatment, upon a balancing of the
public and private interests at stake.432 Consistent with section 0.457(d)(2) of our rules, we find a strong
public interest in ensuring that Lifeline funds are properly allocated and in understanding the extent to
which ETCs are complying with the Commission s Lifeline rules, and that there is a public interest in
favor of the release of this information. The information cited in this NAL falls squarely within these
contours. Accordingly, we determine that the public interest in making this information available to the
public outweighs whatever risk of competitive harm to American Broadband that may exist, and therefore
find a persuasive basis on which to release this information.
185. Because American Broadband s requests are being ruled on by the Commission in the
first instance, we will stay the effective date of our decision to deny the requests for confidentiality and
release the information cited in this NAL for 10 business days from the date of release of this NAL to
allow American Broadband to file a petition for reconsideration; if it does so, we will continue to
withhold the information from public inspection until that process is complete.433 If after 10 business
days American Broadband has not filed a petition for reconsideration or sought a judicial stay, the
material will be made publicly available.434
VII. ORDERING CLAUSES
186. Accordingly, IT IS ORDERED that, pursuant to section 503(b) of the Act, and sections
1.80 of the Commission s rules,435 American Broadband & Telecommunications Company and Jeffrey
Ansted are hereby NOTIFIED of this APPARENT LIABILITY FOR FORFEITURE in the amount of
sixty-three million four hundred sixty-three thousand and five hundred dollars ($63,463,500) for
apparently willfully and repeatedly violating of the Commission s rules.436
187. IT IS FURTHER ORDERED that, pursuant to section 1.80 of the Rules,437 within thirty
(30) calendar days of the release date of this Notice of Apparent Liability for Forfeiture and Order,
American Broadband SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a written
statement seeking reduction or cancellation of the proposed forfeiture consistent with paragraph 189
below.
188. Payment of the forfeiture must be made by check or similar instrument, wire transfer, or
credit card, and must include the NAL/Account number and FRN referenced above. American
Broadband shall also send electronic notification of payment to Rakesh Patel at Rakesh.Patel@fcc.gov on
the date said payment is made. Regardless of the form of payment, a completed FCC Form 159
(Remittance Advice) must be submitted.438 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
432 See Nexus MO&O, 30 FCC Rcd at 7913.
433 Cf. 47 CFR 0.455(g).
434 See 47 CFR 0.455(e), (g).
435 47 U.S.C. 503(b); 47 CFR 1.80.
436 47 CFR 54.405, 54.407, 54.410.
437 47 CFR 1.80.
438 An FCC Form 159 and detailed instructions for completing the form may be obtained at
http://www.fcc.gov/Forms/Form159/159.pdf.
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Federal Communications Commission FCC 18-144
(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.
Any request for making full payment over time 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. 20554.439 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.
189. The written statement seeking reduction or cancellation of the proposed forfeiture, if any,
must include a detailed factual statement supported by appropriate documentation and affidavits pursuant
1.16 and 1.80(f)(3) of the Rules.440 The written statement must be mailed to the Office of the Secretary,
Federal Communications Commission, 445 12th Street, SW, Washington, DC 20554, ATTN:
Enforcement Bureau, Federal Communications Commission and must include the NAL/Acct. No.
referenced in the caption. The written statement shall also be e-mailed to Rakesh.Patel@fcc.gov.
190. 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 principles
(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.
191. IT IS FURTHER ORDERED that American Broadband shall respond to the order in
paragraph 179 within thirty (30) calendar days of the release date of this Notice of Apparent Liability for
Forfeiture and Order.
192. IT IS FURTHER ORDERED, pursuant to section 0.459(g) of the Rules,441 that the
Requests for Confidential Treatment filed by American Broadband in this proceeding442, except as
otherwise noted above,443 ARE DENIED.
439 See 47 CFR 1.1914.
440 47 CFR 1.16, 1.80(f)(3).
441 47 CFR 0.459(g).
442 EB File Number EB-IHD-17-00023554.
443 See supra Section VI.
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Federal Communications Commission FCC 18-144
193. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for
Forfeiture together with the data related to the improper accounts claimed on the Subscriber Lists shall be
sent by certified mail, return receipt requested, and first-class mail to
(1) Jeffrey Ansted, President, American Broadband & Telecommunications Company,
One Seagate, Suite 600, Toledo, OH 46399;
(2) American Broadband and Telecommunications, Inc., One Seagate, Suite 600, Toledo,
OH 46399; and
(3) frey JefAnsted, .
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
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Federal Communications Commission FCC 18-144
APPENDIX A
Original and Revised Form 497s
State Data Months
(No. of Original Forms) (Dates of Original and Revised Form 497s)
Illinois Jan. 2015 (original 2/4/15)
(8) Jun. 2015 (original 7/1/15)
Jul. 2016 (original 8/1/16)
Aug. 2016 (original 9/6/16; revised 11/16/16)
Sep. 2016 (original 10/5/16; revised 11/16/16, 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16; revised 2/27/17)
Dec. 2016 (original 1/12/17)
Indiana Jan. 2015 (original 2/4/15)
(8) Jun. 2015 (original 7/1/15)
Jul. 2016 (original 8/1/16)
Aug. 2016 (original 9/6/16; revised 11/16/16)
Sep. 2016 (original 10/5/16; revised 11/16/16, 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16)
Dec. 2016 (original 1/12/17)
Kentucky Jan. 2015 (original 2/4/15)
(8) Jun. 2015 (original 7/1/15)
Jul. 2016 (original 8/1/16)
Aug. 2016 (original 9/6/16; revised 11/16/16)
Sep. 2016 (original 10/5/16; revised 11/16/16, 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16)
Dec. 2016 (original 1/12/17)
Michigan Jan. 2015 (original 2/4/15)
(8) Jun. 2015 (original 7/1/15)
Jul. 2016 (original 8/1/16)
Aug. 2016 (original 9/6/16; revised 11/16/16)
Sep. 2016 (original 10/5/16; revised 11/16/16, 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16; revised 2/27/17, 6/19/17)
Dec. 2016 (original 1/12/17)
Missouri Jan. 2015 (original 2/4/15)
(8) Jun. 2015 (original 7/1/15)
Jul. 2016 (original 8/1/16)
Aug. 2016 (original 9/6/16)
Sep. 2016 (original 10/5/16; revised 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16)
Dec. 2016 (original 1/12/17)
Nevada Jul. 2016 (original 8/1/16)
(6) Aug. 2016 (original 9/6/16)
Sep. 2016 (original 10/5/16; revised 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16)
Dec. 2016 (original 1/12/17)
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Federal Communications Commission FCC 18-144
Ohio Jan. 2015 (original 2/4/15)
(8) Jun. 2015 (original 7/1/15)
Jul. 2016 (original 8/1/16)
Aug. 2016 (original 9/6/16; revised 11/16/16)
Sep. 2016 (original 10/5/16; revised 11/16/16, 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16; revised 2/27/17, 6/19/17)
Dec. 2016 (original 1/12/17)
Puerto Rico Jul. 2016 (original 8/1/16)
(6) Aug. 2016 (original 9/6/16; revised 11/16/16)
Sep. 2016 (original 10/5/16; revised 11/16/16, 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16; revised 2/27/17)
Dec. 2016 (original 1/12/17)
South Carolina Jul. 2016 (original 8/1/16)
(6) Aug. 2016 (original 9/6/16; revised 11/16/16)
Sep. 2016 (original 10/5/16; revised 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16)
Dec. 2016 (original 1/12/17)
West Virginia Jan. 2015 (original 2/4/15)
(8) Jun. 2015 (original 7/1/15)
Jul. 2016 (original 8/1/16)
Aug. 2016 (original 9/6/16; revised 11/16/16)
Sep. 2016 (original 10/5/16; revised 11/16/16, 5/1/17)
Oct. 2016 (original 11/3/16)
Nov. 2016 (original 12/5/16)
Dec. 2016 (original 1/12/17)
Wisconsin Jan. 2015 (original 2/4/15)
(8) Jun. 2015 (original 7/1/15)
Jul. 2016 (original 8/1/16)
Aug. 2016 (original 9/6/16; revised 11/16/16)
Sep. 2016 (original 10/5/16; revised 5/1/17)
Oct. 2016 (original 11/3/16; revised 5/1/17)
Nov. 2016 (original 12/5/16)
Dec. 2016 (original 1/12/17)
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Federal Communications Commission FCC 18-144
STATEMENT OF
CHAIRMAN AJIT PAI
Re: American Broadband & Telecommunications Company; Jeffrey S. Ansted, File No. EB-IHD-
17-00023554.
The FCC s Lifeline program is designed in part to help provide affordable broadband and bring
the benefits of digital opportunity to those Americans who need it most. Funding for this program, which
comes from taxpayers, should be used to empower low-income consumers not line the pockets of
unscrupulous wireless resellers participating in the program. But that is apparently what happened in this
case, which involves a company ironically doing business under the name American Assistance.
Let me recap the facts: The company, American Broadband & Telecommunications Company
(American Broadband), appears to have requested and received funding for tens of thousands of ineligible
Lifeline customer accounts. The company s sales agents apparently created fake or duplicate accounts by
using the names of deceased people; modifying the names, dates of birth, and Social Security Numbers of
actual Lifeline subscribers; reusing the same proof-of-eligibility documents for multiple accounts; listing
the same single-family home addresses for dozens of accounts; and using addresses where nobody
actually lived. American Broadband also appears to have claimed funding for thousands of customers
who hadn t been using the service for months and thousands of others who had already switched to
another Lifeline provider. Month after month, the company apparently sought funding for accounts that it
knew were ineligible to receive Lifeline benefits. And in August 2016 after American Broadband told
the Commission that it had taken action to ensure compliance with our Lifeline rules the company still
appears to have claimed Lifeline funding for more than 42,000 ineligible accounts. Meanwhile, the
owner of American Broadband apparently used the company s ill-gotten gains to buy luxury items like a
private jet, a Ferrari convertible, and country club and yacht club memberships.
In short, this is a case about apparent fraud. And in response, we propose a fine of more than $63
million against American Broadband which would be the largest-ever penalty for violations of our
universal service support rules. But we don t stop there. We also make clear that this proposed penalty is
separate from any refunds that the company might owe to the Universal Service Fund essentially, to
American taxpayers. And we order American Broadband to explain why we shouldn t revoke its FCC
authorizations to offer service.
Our message cannot be clearer: We will take swift and aggressive enforcement action against
unscrupulous companies that abuse the Lifeline program. American taxpayers who contribute this
funding and the low-income Americans who rely on it deserve nothing less.
For their meticulous investigative work on this case, I d like to thank Mary Beth DeLuca,
Rosemary Harold, Jason Mastrangelo, Keith Morgan, Dangkhoa Nguyen, Rakesh Patel, Michael Scurato,
David Sobotkin, Raphael Sznajder, Romanda Williams, and Michael Zehr of the Enforcement Bureau.
And thank you to the dedicated staff from the Commission s other Bureaus and Offices for their work on
this case: Terry Cavanaugh, Rick Mallen, Linda Oliver, Joel Rabinovitz, and Bill Richardson from the
Office of General Counsel; Chris Howell-Little, Regina Jansen, and Eric Phelps from the Office of
Inspector General; and Kate Dumouchel and Rashann Duvall from the Wireline Competition Bureau.
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Federal Communications Commission FCC 18-144
STATEMENT OF
COMMISSIONER BRENDAN CARR
Re: American Broadband & Telecommunications Company; Jeffrey S. Ansted, File No. EB-IHD-
17-00023554.
Every time a company steals a dollar from Lifeline, it undermines the goals of the program. So
the FCC has a responsibility to ratepayers and beneficiaries alike to hold bad actors accountable. And this
case appears to be a particularly egregious example of fraud.
American Broadband apparently defrauded the Lifeline program to the tune of millions of dollars.
Here s what the facts indicate:
% it sought and received support for dead people more than 45,000 times over just one five-
month period;
% when it found live customers, it would sign them up multiple times in one case using the
same person s name more than 20 times;
% it would also manipulate data to generate fake or ghost customers including by making up
dates of birth, using vacant lots as addresses, and by inventing social security numbers;
% not to miss out on the action, one agent for the company even signed himself up, twice.
But the apparent con did not stop there. As alleged in the Notice, the owner of American
Broadband illegally authorized the transfer of over $10 million in Lifeline funds to personal accounts.
And he apparently used those funds:
% to purchase a $1.3 million condo in Florida;
% to buy a $250,000 Ferrari;
% to pay for a country club and yacht membership; and
% for an $8 million jet, which he used to fly to the Cayman Islands.
It would be hard to describe a more brazen or textbook example of fraud, particularly when the
entire purpose of the Lifeline program is to benefit low-income individuals. So I am glad that this FCC is
taking strong action to hold bad actors accountable. Thank you to the staff of the Enforcement Bureau for
your diligent work on this investigation. The Notice has my support.
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Federal Communications Commission FCC 18-144
STATEMENT OF
COMMISSIONER JESSICA ROSENWORCEL
Re: American Broadband & Telecommunications Company; Jeffrey S. Ansted, File No. EB-IHD-
17-00023554.
The allegations that we have before us are ugly. We have a company that knew its agents were
signing up bogus accounts to bilk the universal service fund and harm the Lifeline program. This
company submitted ineligible claims. It slow rolled the removal of ineligible subscribers once it became
clear that the jig was up. And its owner used universal service funds to purchase a Ferrari, a jet, country
club memberships, and tens of thousands of dollars for landscaping. Cheating the government should
have consequences no matter who does it because this behavior is not right.
But we should recognize that there are some other things that are not right. Last year this agency
announced plans to gut Lifeline service in a manner that could cut 70 percent of its current subscribers.
Let s review who they are. We can start with the roughly 20,000 women, men, and children
across the country who call a domestic violence hotline every day. Seventy-seven percent of domestic
violence prevention programs distribute phones to help those who truly need a lifeline for safety. We can
add the more than 500,000 Americans who live in Puerto Rico who rely on the Lifeline program for basic
communications to stay connected in the aftermath of an epic storm. We can add another 1.3 million
veterans who have honored us with their service and now rely on the Lifeline program in civilian life. On
top of that, we can count nearly 2.2 million senior citizens who rely on this program to stay connected and
healthy.
When companies cheat the Lifeline program, we need to make clear there are consequences. We
need to block the door, deny them the ability to participate, and throw the book at them as we do here.
But let s lead with our humanity and not cruelty. Let s not cut off the millions of Americans who count
on this program to stay connected every day.
73