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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D. C. 20554
In the Matter of )
) File No. ENF-98-06
ConQuest Operator Services Corp. )
) NAL/Acct. No. 816EF0004
Apparent Liability for Forfeiture )
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: August 11, 1998 : Released: August 14, 1998
By the Commission:
1. By this Notice of Apparent Liability for Forfeiture ("NAL"), we
initiate enforcement action against ConQuest Operator Services Corp.
For the reasons set forth below, we find that ConQuest apparently
willfully or repeatedly violated Section 254 of the Communications
Act of 1934 (the "Act"), as amended by the Telecommunications Act of
1996 (the "1996 Act"), and Commission rules and orders issued
pursuant thereto, by failing to pay its universal service
contribution. Based upon our review of the facts and circumstances
surrounding the violations, we find that ConQuest is apparently
liable for a forfeiture in the amount of seventy thousand and
thirty-three dollars ($70,033).
2. Ensuring universal service throughout the country represents one of
the primary goals of the 1996 Act. This important congressional
objective is embodied in Section 254:
Consumers in all regions of the Nation, including low-income consumers and
those in rural, insular, and high cost areas, should have access to
telecommunications and information services, including interexchange
services and advanced telecommunications and information services, that
are reasonably comparable to those services provided in urban areas and
that are available at rates that are reasonably comparable to rates
charged for similar services in urban areas.
To ensure the realization of this goal, the statute provides:
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.
The statute further requires that, within 15 months of the enactment of
the 1996 Act, the Commission implement the changes to its regulations
necessary to achieve the statutory goal of universal service. The
Commission issued a series of orders to comply with this important portion
of the 1996 Act.
3. Our regulations restate the statutory requirement that
telecommunication carriers "must contribute to the universal service
support programs." In the Universal Service Order, we named the
National Exchange Carrier Association ("NECA") as the temporary
administrator of the universal service support mechanisms.
Subsequently, we directed NECA to create, as a condition of serving
as temporary universal service administrator, an independent,
not-for-profit subsidiary, the Universal Service Administrative
Company ("USAC"), to administer temporarily the universal service
support mechanisms for high cost areas and low-income consumers, and
to perform billing and collection functions for the universal
service support mechanisms for schools and libraries and rural
health care providers. In that connection, we directed that USAC
distribute, receive, and process the Universal Service Worksheet on
which carriers are required to report certain categories of revenue
used to calculate their universal service contribution; we further
directed that USAC adjust carriers' contributions in accordance with
contribution factors established by the Commission. Given the
importance of ensuring universal service, our regulations provide
that the failure "to submit the required . . . contributions may
subject the contributor to the enforcement provisions of the Act and
any other applicable law."
4. USAC received ConQuest's Universal Service Worksheet on or about
September 9, 1997. Based on the information reflected in the
worksheet, the accuracy of which was certified by ConQuest's vice
president and secretary, Marianne Townsend, USAC sent ConQuest an
invoice for its first universal service monthly contribution. The
invoice was dated January 15, 1998 and set out ConQuest's liability
to the high cost, low income, schools and libraries, and rural
health care funds. The invoice stated that payment of the requested
amount was due by February 16, 1998. ConQuest failed to submit its
contribution by the due date stated in the invoice.
5. On February 26, 1998, Nancy Thomas, USAC's Billing and Collection
Manager, wrote to ConQuest at the address included on ConQuest's
Universal Service Worksheet, requesting payment by March 4, 1998.
Subsequently, on March 6, 1998, USAC wrote to ConQuest again
requesting payment of the contribution. On February 23 and March 9,
1998, and one other occasion in March, USAC personnel telephoned
ConQuest to discuss the overdue universal service contribution.
During the March 9 call a representative of ConQuest told USAC's
representative that payment would be forthcoming. ConQuest has
disputed neither that debt was due and owing, nor the amount of the
debt. As of this date, however, ConQuest has not paid to USAC any
portion of the amount that it owes for January 1998, nor has it
provided any explanation for its failure to make payment. USAC's
records also indicate that ConQuest has failed to pay its assessed
contributions for February, March, April, May and June 1998.
6. Based on the foregoing, we conclude that ConQuest is apparently
liable for forfeiture for willful or repeated violation of Section
254 of the Act and the Commission's rules governing universal
service contributions. Since February 16, 1998, ConQuest has failed
to pay its January universal service contribution, the amount of
which was calculated by USAC from figures that ConQuest itself
reported in its Universal Service Worksheet. As explained above,
Section 254(d) of the Act, as well as our Rule 54.703(a), require
that telecommunication carriers make universal service contributions
in the amount prescribed by USAC. In the absence of any evidence
indicating that ConQuest is unable to pay the assessed contribution,
it appears that its failure to make the required contribution
amounts to a willful or repeated violation of the Act and the
Commission's rules. As we have noted above, it appears that ConQuest
is currently also in arrears for its assessed universal service
contributions for February through June of this year. The failure to
make timely payment of its contributions for each of these months
represents an independent violation of the Act and our rules;
however, we do not currently find apparent liability for these
violations. Nevertheless, these added violations could form the
basis for additional notices of apparent liability in the future.
7. Section 503(b)(2)(B) of the Act authorizes the Commission to assess
a forfeiture of up to one hundred ten thousand dollars ($110,000)
for each violation, or each day of a continuing violation, up to a
statutory maximum of one million, one hundred thousand dollars
($1,100,000) for a single act or failure to act. In exercising this
forfeiture authority, the Commission is required to 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." For purposes of determining
an appropriate forfeiture penalty in this case, we view ConQuest's
delinquency as a single, continuing violation, which began on
February 17, 1998, the day after its universal service contribution
was due, and is currently of 175 days in duration. After weighing
the circumstances surrounding the violation, and the central
importance of universal service to the goals of the 1996 Act, we
find that ConQuest is apparently liable for a forfeiture of seventy
thousand and thirty-three dollars ($70,033) for failure to make its
universal service contribution in a timely manner. This forfeiture
figure is based in part on ConQuest's universal service liability,
which, in turn, was based on revenue figures that it reported in its
Universal Service Worksheet. Accordingly, the calculation of the
forfeiture amount is set out in Appendix 2 to this notice, which
will remain under seal. ConQuest will have the opportunity to submit
evidence and arguments in response to this NAL to show that no
forfeiture should be imposed or that some lesser amount should be
assessed.
VI. CONCLUSIONS AND ORDERING CLAUSES
8. We have evaluated the information relating to ConQuest's obligation
to pay its universal service contribution and find that ConQuest
apparently has failed to pay its contribution in a timely manner. We
conclude that ConQuest thereby apparently willfully or repeatedly
violated Section 254 of the Act and Commission rules and orders
governing universal service contributions, and that ConQuest's
conduct warrants a forfeiture in the amount of seventy thousand and
thirty-three dollars ($70,033). We further note that ConQuest
remains liable to USAC for the full amount of the assessed universal
service contribution. Payment of this forfeiture in no way relieves
ConQuest of its obligation to pay the previously assessed
contribution amount.
9. Accordingly, IT IS ORDERED, pursuant to Section 503(b) of
Communications Act of 1934, as amended, 47 U.S.C. S: 503(b), and
Section 1.80 of the Commission's rules, 47 C.F.R. S: 1.80, that
ConQuest Operator Services Corp. IS HEREBY NOTIFIED of an Apparent
Liability for Forfeiture in the amount of seventy thousand and
thirty-three dollars ($70,033) for willful or repeated violation of
Section 254 of the Act and the Commission's universal service rules
and orders.
10. IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's
rules, 47 C.F.R. S: 1.80, that within thirty days of the release of
this Notice, ConQuest Operator Services Corp. SHALL PAY the full
amount of the proposed forfeiture OR SHALL FILE a response showing
why the proposed forfeiture should not be imposed or should be
reduced.
11. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
Liability for Forfeiture SHALL BE SENT by certified mail to John
Burchett, President, ConQuest Operator Services Corp., 5500 Frantz
Road, Suite 125, Dublin, Ohio, 43017.
FEDERAL COMMUNICATIONS COMMISSION
Magalie Roman Salas,
Secretary.
ConQuest is located at 5500 Frantz Road, Suite 125, Dublin, Ohio, 43017.
47 U.S.C. S: 254. Telecommunications Act of 1996, Pub. L. No. 104-104, 110
Stat. 56 (1996).
See 47 U.S.C. S: 503(b)(2)(B). This section authorizes the Commission to
assess a forfeiture penalty against a common carrier if the Commission
determines that the carrier has "willfully or repeatedly" failed to comply
with the provisions of the Act or with any rule, regulation, or order
issued by the Commission under the Act.
47 U.S.C. S: 254(b)(3).
47 U.S.C. S: 254(d). See also 47 U.S.C. S: 153(44) (defining
"telecommunications carrier"); 47 U.S.C. S: 153(46) (defining
"telecommunications service"); 47 U.S.C. S: 153(43) (defining
"telecommunications"); 47 C.F.R. S: 54.703(a) (codifying in Commission
regulation the statutory requirement that telecommunications carriers
"must contribute to the universal service support programs").
47 U.S.C. S: 254(a)(2).
See Federal State Joint Board on Universal Service, Report & Order, 12 FCC
Rcd 8776 (1997) (Universal Service Order); Federal State Joint Board on
Universal Service, Order on Reconsideration, 12 FCC Rcd 10095 (1997);
Changes to the Board of Directors of the National Exchange Carrier
Association, Inc., Federal-State Joint Board on Universal Service, Report
& Order and Second Order on Reconsideration, 12 FCC Rcd 18400 (1997) (NECA
Governance Order); Changes to the Board of Directors of the National
Exchange Carrier Association, Inc. Federal State Joint Board on Universal
Service, Order on Reconsideration, Second Report & Order, and Further
Notice of Proposed Rulemaking, 12 FCC Rcd 12437 (1997).
See 47 C.F.R. S: 54.703(a).
See Universal Service Order, 12 FCC Rcd at 9216-17, P: 866.
See NECA Governance Order, 12 FCC Rcd at 18415, P: 25.
See NECA Governance Order, 12 FCC Rcd at 18424-25, P: 43-45. See also 47
C.F.R. S: 54.711(a).
47 C.F.R. S: 54.713.
See Declaration of Edward English, P: 3 (English Declaration). The English
Declaration, Appendix 1 to this notice, is being placed under seal because
it includes the figure for ConQuest's universal service contribution,
information which third parties potentially could use to estimate
ConQuest's revenues. In the future, however, regardless of carrier
requests for confidentiality, we will be disinclined to withhold this type
of information when issuing NALs to enforce carriers' universal service
obligations.
Id.
See 47 U.S.C. S: 254(b)(3) (announcing universal service goal for
"low-income consumers and those in rural, insular, and high cost areas");
id S: 254(b)(6) (announcing universal service goal for "[e]lementary and
secondary schools and classrooms, health care providers, and libraries").
See English Declaration, P: 3.
See id. P: 4.
Id.
Id.
Id.
Id.
Id.
See 47 C.F.R. S:S: 54.703(a), 54.713.
47 U.S.C. S: 503(b)(2)(B); 47 C.F.R. S: 1.80. The Commission recently
amended its rules by adding a new subsection to its monetary forfeiture
provisions that incorporates the inflation adjustment requirements
contained in the Debt Collection Improvement Act of 1996 (Pub. L. 104-134,
Sec. 31001, 110 Stat. 1321), enacted on April 26, 1996. See Amendment of
Section 1.80 of the Commission's Rules, 12 FCC Rcd 1038 (1997).
47 U.S.C. S: 503(b)(2)(D).
See supra n. 13.
47 U.S.C. S: 503(b)(4)(C); 47 C.F.R. S: 1.80(f)(3).
The forfeiture amount should be paid by check or money order drawn to the
order of the Federal Communications Commission. Reference should be made
on the ConQuest Operator Services Corp.'s check or money order to
"NAL/Acct. No. 816EF0004." Such remittances must be mailed to Forfeiture
Collection Section, Finance Branch, Federal Communications Commission,
P.O. Box. 73482, Chicago, Illinois 60673-7482.
Federal Communications Commission FCC 98-196
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Federal Communications Commission FCC 98-196
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Federal Communications Commission FCC 98-196
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Federal Communications Commission FCC 98-196
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Federal Communications Commission FCC 98-196
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Federal Communications Commission FCC 98-196
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