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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554

In the Matter of                )  File No. EB 00-IH-0053
                                )
America's Tele-Network Corp.    )  NAL/Acct. No. x32080024
                                 

                      FORFEITURE ORDER

   Adopted: November 30, 2000           Released:   December 
5, 2000   

By the Commission:

                      I.  INTRODUCTION

     1.  In this Forfeiture Order, we find that America's 
Tele-Network Corp. (``ATNC'') has violated section 254(d) of 
the Communications Act of 1934, as amended (the 
``Communications Act'' or the ``Act''), and section 54.706 
of the Commission's rules by willfully and repeatedly 
failing to make required contributions to universal service 
support programs.1  Based on our review of the facts and 
circumstances of this case and after considering ATNC's 
response to our Notice of Apparent Liability (``NAL'') in 
this matter,2 we conclude that ATNC is liable for a 
forfeiture in the amount of one hundred fifty-four thousand 
dollars ($154,000). 

                       II.  BACKGROUND

     2.  In the NAL, we briefly described the universal 
service program, including the mechanisms established by the 
Commission in response to Congress' 1996 amendments to the 
Communications Act creating the universal service program.  
In particular, section 254 of the Act requires that:    

     Every telecommunications carrier that provides 
     interstate telecommunications services shall 
     contribute, on an equitable and nondiscriminatory 
     basis, to the specific, predictable, and 
     sufficient mechanisms established by the 
     Commission to preserve and advance universal 
     service.3

In implementing section 254, the Commission authorized the 
Universal Service Administrative Company (``USAC'') to 
administer universal service support mechanisms and to 
perform billing and collection functions.4  The Commission 
gave USAC the authority to bill carriers monthly, starting 
in February 1998, for their contributions.5

     3.  In accordance with its authority, USAC began 
billing ATNC in February 1998.  Notwithstanding its receipt 
of monthly bills and despite repeated contacts from USAC, 
ATNC failed to submit any of its required contributions 
through 1999.  In February 2000, the Enforcement Bureau sent 
a letter to ATNC explaining that it was the subject of a 
potential enforcement action.6  In its response to the 
Bureau's letter, ATNC stated that it had withheld payments 
based on its belief that ``universal service support 
programs and contribution assessments are unconstitutional 
and invalid,'' ``notwithstanding the decision of the Fifth 
Circuit Court of Appeals in Texas Office of Public Utility 
Counsel v. FCC.''7  Nevertheless, ATNC stated that it sought 
``to evaluate the potential of a settlement,'' which would 
result in payment of current invoices and retirement of 
``verified'' arrearages over a 24-month period.8  In 
responding to a staff inquiry,9 ATNC subsequently stated 
that it did not pay its universal service contributions 
because its customers failed to pay line item charges for 
universal service.10  Finally, in response to a further 
staff inquiry in May 2000,11 ATNC explained its billing 
arrangements and reiterated its belief that its customers 
did not pay universal service charges.  Nonetheless, ATNC 
acknowledged that it regularly received from its billing 
agent approximately 63 percent of the amounts billed to 
customers and that the billed amounts included universal 
service charges.12  

     4.  In May 2000, ATNC began making universal service 
contributions.  As of July 18, 2000, ATNC had paid more than 
$320,000 to USAC.  Accounting for those payments, ATNC still 
owed more than $1 million as of the July 2000 invoice.  ATNC 
has made no contributions toward universal service since 
that time.  
   
     5.  We concluded in the NAL that ATNC had apparently 
violated the Act and our rules by willfully and repeatedly 
failing to pay universal service contributions.  We further 
concluded that ATNC's apparent violations were both 
egregious and intentional.  Consequently, the proposed 
forfeiture contained an upward adjustment.13    

     6.  In its response to the NAL, ATNC challenges the 
NAL's upward adjustment of the proposed forfeiture.  ATNC 
claims that the NAL mischaracterized its arguments 
concerning the constitutionality of the universal service 
program and erroneously found that that it had ``shifted'' 
its defense to justify its failure to pay.  ATNC further 
disputes the NAL's finding that it had received 
``substantial'' income from its billing agent and failed to 
make a commitment to pay arrearages.  Finally, ATNC contends 
that imposing an upward adjustment is inconsistent with 
Commission precedent.  In this regard, ATNC believes it is 
being treated more harshly than similarly situated carriers.  

                         III.  DISCUSSION

     7.  In determining the amount of a forfeiture penalty, 
we take into account ``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.''14  The NAL proposed a forfeiture of $154,000 
based on three components.  First, consistent with 
Commission precedent, we assessed a base figure of $40,000 
as a general penalty of $20,000 for each of the two 
violations at issue.  Second, we added to the base amount of 
$40,000 an amount equal to one-half of the contributions due 
for the months of November and December 1999, or $62,671.15  
Finally, we applied an upward adjustment of nearly 50% of 
the sum of the first two components, or $51,329, to account 
for the apparent egregious and intentional nature of the 
violations.   

     8.  After considering ATNC's arguments, we decline to 
reduce or eliminate the upward adjustment.  ATNC does not 
dispute that for more than two years, it paid nothing into 
the universal service fund.  In response to the Bureau's 
February 2000 letter, ATNC clearly stated that it withheld 
payments due to its belief that the universal service 
program was unconstitutional, notwithstanding a contrary 
finding by the U.S. Court of Appeals for the Fifth 
Circuit.16  ATNC then argued that its failure to pay 
resulted from a notice appearing on local exchange carrier 
(``LEC'') bills stating that nonpayment of long distance 
charges would not result in interruption of local service, 
and encouraging customers either to withhold or seek refunds 
of universal service charges.  In this regard, we note that 
a customer's failure to pay does not excuse a carrier from 
contributing to universal service.  The Commission's rules 
permit carriers to pass through all or part of their 
universal service contributions to their end-users in 
customer bills.  However, the statutory requirement to 
contribute is not dependent on a carrier's ability 
successfully to do so.17  While some customers may have 
withheld payments or sought refunds, the fact is that ATNC 
regularly received from its billing agent approximately 63% 
of the total amount billed to customers, including line item 
charges for universal service. 
       
     9.  Although ATNC stated in its February 2000 letter 
that it sought ``to evaluate the potential of a 
settlement,'' ATNC has made no commitment of any kind to 
USAC to pay off its arrearage within a specified timeframe.  
In this regard, although ATNC has paid more than $436,000 
toward universal service to date, its total indebtedness 
according to USAC still stands at more than $1,000,000.  
Further, since July 2000, ATNC has made no contributions 
toward universal service.

     10.  We disagree that imposing an upward adjustment is 
inconsistent with Commission precedent or results in harsher 
treatment for ATNC than that meted out to similarly situated 
carriers.  In both Intellicall Operator Services18 and 
Matrix Telecom, Inc.,19 the Commission applied a downward 
adjustment after finding that each carrier had made efforts 
to satisfy its universal service obligation prior to receipt 
of a letter from the Enforcement Bureau, and had committed 
to pay off its indebtedness by a date certain.  In North 
American Telephone Network, L.L.C.,20 the Enforcement Bureau 
proposed a forfeiture that contained neither an upward nor a 
downward adjustment after finding that the carrier had made 
a few payments before notification of potential enforcement 
action.  By contrast, ATNC made no payments prior to the 
Enforcement Bureau's letter, and still has never committed 
to pay off its arrearage within a specified timeframe.    

                    IV.  ORDERING CLAUSES

     11.  Accordingly, IT IS ORDERED THAT, pursuant to 
section 503(b) of the Act,21 and section 1.80(f)(4) of the 
Commission's rules,22 America's Tele-Network Corp. is LIABLE 
FOR A FORFEITURE in the amount of one hundred fifty-four 
thousand dollars ($154,000) for willfully and repeatedly 
violating section 254 of the Act,23 and section 54.706 of 
the Commission's rules.24 

     12.  Payment of the forfeiture shall be made in the 
manner provided for in section 1.80 of the Commission's 
rules,25 within thirty days of the release of this 
Forfeiture Order.  If the forfeiture is not paid within the 
period specified, the case may be referred to the Department 
of Justice for collection pursuant to section 504(a) of the 
Act.26  America's Tele-Network Corp. may pay the forfeiture 
by mailing a check or money order, payable to the order of 
the Federal Communications Commission, to the Forfeiture 
Collection Section, Finance Branch, Federal Communications 
Commission, P.O. Box 73482, Chicago, Illinois 60673-7482.  
The payment should note the NAL/Acct. No. referenced above.  
A request for payment of the full amount of this Forfeiture 
Order under an installment plan should be sent to: Chief, 
Credit and Debt Management Center, 445 12th Street, S.W., 
Washington, D.C. 20554.27  

     13.  IT IS FURTHER ORDERED THAT a copy of this 
Forfeiture Order shall be sent by Certified Mail Return 
Receipt Requested to America's Tele-Network Corp. in care of 
Charles H. Helein, Esq., The Helein Law Group, P.C., 8180 
Greensboro Drive, Suite 700, McLean, Virginia 22102, and to 
720 Hembree Place, Roswell, Georgia 30076, attention: John 
W. Little.


                         FEDERAL COMMUNICATIONS COMMISSION
                    

     

                         Magalie Roman Salas
                         Secretary
 
_________________________

1  47 U.S.C. § 254(d); 47 C.F.R. § 54.706.

2  America's Tele-Network Corp., Notice of Apparent 
Liability for Forfeiture, FCC 00-276 (released August 1, 
2000).  

3  47 U.S.C. § 254(d). 

4  See Amendment of Parts 54 and 69 - Changes to Board of 
NECA, Inc., 12 FCC Rcd 18400, 18415 (1997) (``NECA Changes 
Order''); 47 C.F.R. § 54.702(b).

5  See Amendment of Part 54 - Universal Service, 12 FCC Rcd 
22423, 22425 (1997); 47 C.F.R. §§ 54.709(a)(4-5). 

6  Letter from David H. Solomon, Chief, Enforcement Bureau, 
to America's Tele-Network Corp. dated February 16, 2000 
(``Bureau's February 2000 letter''). 

7  Letter from Charles H. Helein, Esq., counsel for ATNC, to 
James W. Shook, Investigations and Hearings Division, 
Enforcement Bureau, dated February 25, 2000, citing Texas 
Office of Public Utility Counsel v. FCC, 183 F.3d 393 (5th 
Cir. 1999) (subsequent history omitted) (``ATNC February 
2000 letter'').  In that decision, the court, inter alia, 
denied constitutional challenges to the universal service 
contribution system.  

8  ATNC February 2000 letter, supra note 7. 

9  Letter from David H. Solomon, Chief, Enforcement Bureau, 
to America's Tele-Network Corp. dated April 20, 2000.

10  Letter from John W. Little, President, ATNC, to Charles 
W. Kelley, Chief, Investigations and Hearings Division, 
Enforcement Bureau, dated April 28, 2000.  In this regard, 
we note that a customer's failure to pay universal service 
line item charges has no bearing on a carrier's obligation 
to contribute to universal service.  See Federal-State Board 
on Universal Service, 14 FCC Rcd 8030, 8038 (1999).  

11  Letter from David H. Solomon, Chief, Enforcement Bureau, 
to America's Tele-Network Corp. dated May 3, 2000.

12  Letter from Charles H. Helein, Esq., counsel for ATNC, 
to Charles W. Kelley, Chief, Investigations and Hearings 
Division, Enforcement Bureau, dated May 15, 2000.   

13 See 47 C.F.R. § 1.80(b)(4).  See also The Commission's 
Forfeiture Policy Statement and Amendment of Section 1.80 of 
the Rules to Incorporate the Forfeiture Guidelines, 12 FCC 
Rcd 17087, 17100-01 (1997), recon. denied, 15 FCC Rcd 303 
(1999) (``Forfeiture Guidelines''). 

14  47 U.S.C. § 503(b)(2)(D).  See also Forfeiture 
Guidelines, 12 FCC Rcd at 17100-01.

15  For a more complete discussion of our system for 
determining forfeitures for failures to contribute universal 
service payments, see the NAL at ¶¶ 8 and 9 and the cases 
cited therein. 

16  We note that ATNC's failure to pay continued until May 
2000, nearly ten months after the court rendered its 
decision, and nearly three months after ATNC acknowledged 
the court's decision. 

17  See Federal-State Board on Universal Service, supra note 
10, 14 FCC Rcd at 8038. 

18  Intellicall Operator Services, Notice of Apparent 
Liability for Forfeiture, 15 FCC Rcd 13539 (2000) 
(subsequent history omitted). 

19  Matrix Telecom, Inc., Notice of Apparent Liability for 
Forfeiture, 15 FCC Rcd 13544 (2000).

20  North American Telephone Network, L.L.C., Notice of 
Apparent Liability for Forfeiture, 15 FCC Rcd 14022 (Enf. 
Bureau 2000).

21  47 U.S.C. § 503.

22  47 C.F.R. § 1.80(f)(4).

23  47 U.S.C. § 254.

24  47 C.F.R. § 54.706.

25  47 C.F.R. § 1.80. 

26  47 U.S.C. § 504(a).

27 See 47 C.F.R. § 1.1914.