*Pages 1--6 from Microsoft Word - 49955.doc* Federal Communications Commission DA 05- 1907 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of QuickLink Telecom, Inc. Apparent Liability for Forfeiture ) ) ) ) ) ) ) ) File No. EB- 04- IH- 0503 NAL/ Acct. No. 200532080136 FRN 0009268061 NOTICE OF APPARENT LIABILITY FOR FORFEITURE AND ORDER Adopted: July 1, 2005 Released: July 5, 2005 By the Acting Chief, Enforcement Bureau: I. INTRODUCTION 1. In this Notice of Apparent Liability for Forfeiture (“ NAL”), we find that QuickLink Telecom, Inc. (“ QuickLink”) apparently violated a Commission order by willfully and repeatedly failing to respond to a directive of the Enforcement Bureau (“ Bureau”) to provide certain information and documents. Based on our review of the facts and circumstances of this case, and for the reasons discussed below, we find that QuickLink is apparently liable for a monetary forfeiture in the amount of $20,000. II. BACKGROUND 2. QuickLink characterizes itself as a “toll reseller.” 1 It routes voice and data from around the world through its gateway facilities in the U. S. and Europe. 2 3. In October 2004, the Universal Service Administrative Company (“ USAC”) referred QuickLink to the Bureau for action concerning its failure to contribute to the universal service fund (“ USF”) and its failure to file Telecommunications Reporting Worksheets. According to USAC’s records, QuickLink has filed only one Worksheet, and made only one contribution to USF since 2003. 4. Following USAC’s referral, the Bureau sent QuickLink a Letter of Inquiry (“ LOI”) to obtain information concerning whether the company violated section 54.706 of the Commission’s rules, 3 involving the requirement to contribute to USF. 4 The Bureau sent the LOI to QuickLink’s registered 1 2003 FCC Form 499- A at 5. 2 http:// www. qltel. net/ contact. htm 3 47 C. F. R. § 54.706. 4 Letter from Eric J. Bash, Assistant Chief, Investigations & Hearings Division, Enforcement Bureau, FCC, to Amar Siddigui, QuickLink Telecom, Inc. (Oct. 15, 2004). 1 Federal Communications Commission DA 05- 1907 2 office in Jamaica, New York, by certified mail/ return receipt requested, facsimile and email. 5 The Bureau also sent the LOI to QuickLink’s registered agent by certified mail/ return receipt requested. The LOI directed QuickLink to provide certain specified documents and information within twenty calendar days of the date of the letter, i. e., by November 5, 2004. Because USF contributions are based on the information contained in the Telecommunications Reporting Worksheets, and because contributions to the North American Numbering Plan (“ NANP”) and the Telecommunications Relay Service Fund (“ TRS Fund”) are also based on such filings, the LOI also initiated an investigation into whether the company violated the Commission’s rules requiring these filings. 6 5. As of November 6, 2004, the Bureau had not received communication of any kind from QuickLink. Bureau staff made several additional attempts to reach the company, and ultimately spoke to a man answering the telephone at QuickLink’s office and representing himself as Muhammad Ali on December 14, 2004. Mr. Ali confirmed QuickLink’s business address, that the named addressee on the letter, Amar Siddigui, was involved with the company, and that the company had received invoices from USAC. He made no representations concerning the company’s response to the LOI. Later that day, Bureau staff sent a letter to QuickLink, reciting the above history, and reminding QuickLink that its “failure to respond fully to the October 15, 2004, LOI subjects it to potential enforcement action, including forfeitures. Unless we receive a full response to the Bureau’s LOI within seven days of this letter, by December 1, 2004, we will commence such an enforcement action.” 7 The Bureau sent the letter by certified mail/ return receipt requested, and by facsimile. Additionally, Bureau staff repeatedly telephoned QuickLink between December 14, 2004, and December 20, 2004, but were told that QuickLink’s president was out of the country at present. To date, the Bureau has not received any response to the LOI from QuickLink. III. DISCUSSION A. Apparent Violation 6. Under section 503( b)( 1) of the Act, any person who is determined by the Commission to have willfully or repeatedly failed to comply with any provision of the Act or any rule, regulation, or order issued by the Commission shall be liable to the United States for a forfeiture penalty. 8 To impose 5 The certified mail’s return receipt indicates the LOI was received by QuickLink’s corporate office, located in Jamaica, Queens, NY, on November 1, 2004. The Bureau’s facsimile machine generated a confirmation sheet indicating that the document was successfully transmitted to QuickLink. The email, sent to the email address listed by QuickLink in its 2003 FCC Form 499- A, bounced back to the FCC as ‘undeliverable. ’ The Bureau also sent a copy of the LOI to Roger Eddleman in Falls Church, VA, who is listed on QuickLink’s 2003 FCC 499- A as an agent for service of process. According to the certified mail receipt, Mr. Eddleman received the document on October 21, 2004. Thereafter, he contacted the Bureau and said he was not QuickLink’s agent for service. 6 Id. 7 Letter from Hillary S. DeNigro, Deputy Chief, Investigations & Hearings Division, FCC to Amar Siddigui, QuickLink Telecom, Inc. (Dec. 14, 2004) (“ LOI Follow- up”). 8 47 U. S. C. § 503( b)( 1)( B); 47 C. F. R. § 1.80( a)( 1); see also 47 U. S. C. § 503( b)( 1)( D) (forfeitures for violation of 14 U. S. C. § 1464). Section 312( f)( 1) of the Act defines willful as “the conscious and deliberate commission or omission of [any] act, irrespective of any intent to violate” the law. 47 U. S. C. § 312( f)( 1). The legislative history to section 312( f)( 1) of the Act indicates that this definition of willful applies to both sections 312 and 503( b) of the Act, H. R. Rep. No. 97- 765, 97 th Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the term in (continued….) 2 Federal Communications Commission DA 05- 1907 3 such a forfeiture penalty, the Commission must issue a notice of apparent liability and the person against whom the notice has been issued must have an opportunity to show, in writing, why no such forfeiture penalty should be imposed. 9 The Commission will then issue a forfeiture if it finds by a preponderance of the evidence that the person has willfully or repeatedly violated the Act or a Commission order or rule. 10 7. Sections 4( i), 4( j), 218, and 403 of the Act afford the Commission broad authority to investigate the entities it regulates. Section 4( i) authorizes the Commission to “issue such orders, not inconsistent with this Act, as may be necessary in the execution of its functions,” and section 4( j) states that “the Commission may conduct its proceedings in such manner as will best conduce to the proper dispatch of business and to the ends of justice.” Section 218 of the Act authorizes the Commission to “obtain from . . . carriers . . . full and complete information necessary to enable the Commission to perform the duties and carry out the objects for which it was created.” 11 Section 403 likewise grants the Commission “full authority and power to institute an inquiry, on its own motion . . . relating to the enforcement of any of the provisions of this Act.” 12 8. As indicated above, the Bureau directed QuickLink to provide certain documents and information to enable the Commission to perform its enforcement function and evaluate allegations that QuickLink violated Commission rules. Commission rules specifically require QuickLink to maintain these documents and produce them upon the Commission’s request. 13 QuickLink received the LOI as evidenced by the return of the mail receipt to the Bureau and confirmation of the facsimile transmission. 14 As noted above, Bureau staff also contacted a QuickLink employee by telephone and sent a follow- up (Continued from previous page) the section 503( b) context. See, e. g., Application for Review of Southern California Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387- 88, ¶ 5 (1991) (“ Southern California Broadcasting”). The Commission may also assess a forfeiture for violations that are merely repeated, and not willful. See, e. g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362, ¶ 10 (2001) (“ Callais Cablevision”) (issuing a Notice of Apparent Liability for, inter alia, a cable television operator’s repeated signal leakage). “Repeated” means that the act was committed or omitted more than once. Southern California Broadcasting, 6 FCC Rcd at 4388, ¶ 5; Callais Cablevision, 16 FCC Rcd at 1362, ¶ 9. 9 47 U. S. C. § 503( b); 47 C. F. R. § 1.80( f). 10 See, e. g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589, 7591, ¶ 4 (2002) (“ SBC Forfeiture Order”). 11 47 U. S. C. § 218. 12 47 U. S. C. § 403. Section 403 provides, in part: “The Commission shall have full authority and power at any time to institute an inquiry, on its own motion, in any case and as to any matter or thing concerning which complaint is authorized to be made, to or before the Commission by any provision of this Act, or concerning which any question may arise under any of the provisions of this Act.” See also 47 U. S. C. § 154( i), (j). 13 47 C. F. R. § 54.711 in the USF section of our rules requires contributors to “maintain records and documentation to justify information reported in the Telecommunications Reporting Worksheet for three years and [to] provide such records and documentation to the Commission or the Administrator upon request.” 14 See n. 4, supra. 3 Federal Communications Commission DA 05- 1907 4 letter. We conclude that QuickLink’s failure to respond to the Bureau’s LOI constitutes an apparent willful violation of a Commission order. 15 B. Forfeiture Amount 9. Section 503( b)( 2)( B) of the Act authorizes the Commission to assess a forfeiture of up to $130,000 for each violation or each day of a continuing violation, up to a statutory maximum of $1,325,000 for a single act or failure to act. 16 In determining the appropriate forfeiture amount, we consider the factors enumerated in section 503( b)( 2)( D) 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.” 17 10. Section 1.80 of the Commission's rules and the Commission's Forfeiture Policy Statement establish a base forfeiture amount of $3,000 for failure to file required forms or information, and $4,000 for failure to respond to a Commission communication. 18 QuickLink’s failure to respond occurred in the face of numerous attempts by Bureau staff to call QuickLink’s attention to the importance of responding to the LOI. We find that the lack of a response to a Bureau LOI in the circumstances presented here warrants a substantial increase to this base amount. Misconduct of this type exhibits a disregard for the Commission’s authority that cannot be tolerated, and, more importantly, threatens to compromise the Commission’s ability to adequately investigate violations of its rules. In this case, such misconduct inhibits our ability adequately to detect and deter potential rule violations in an area of critical importance to the Commission, contributions to the universal service fund. Prompt and full responses to Bureau inquiry letters are critical to the Commission’s enforcement function. We therefore propose a forfeiture against QuickLink of $20,000 for failing to respond to the Bureau’s LOI. This forfeiture amount is consistent with recent precedent in a similar case where a company failed to provide any response to an LOI inquiry concerning compliance with USF rules despite evidence that the LOI had been received. 19 15 See, e. g., SBC Forfeiture Order, 17 FCC Rcd at 7599- 7600, ¶¶ 23- 28 (2002) ($ 100,000 forfeiture for egregious and intentional misconduct, amount set high enough to serve as a deterrent in view of SBC's ability to pay); Globcom, Inc., Notice of Apparent Liability for Forfeiture and Order, 18 FCC Rcd, 19893, 19898 n. 36 (2003) (delayed response to an LOI considered dilatory behavior, which may result in sanctions in the future); BigZoo. Com Corporation, Order, DA 05- 449 (Enf. Bur., rel. Feb. 23, 2005) (“ BigZoo”) ($ 20,000 forfeiture for failure of an entity to provide any response to a USF LOI, notwithstanding evidence that the LOI was received); American Family Association, Licensee of Station KBMP( FM), Enterprise, Kansas, Notice of Apparent Liability for Forfeiture, 19 FCC Rcd 14072 (2004) ($ 3,000 forfeiture for a partial response to an LOI); World Communications Satellite Systems, Inc., Notice of Apparent Liability for Forfeiture, 18 FCC Rcd 18545 (2003) ($ 10,000 forfeiture for a non- responsive reply to an LOI); Donald W. Kaminski, Jr., Notice of Apparent Liability for Forfeiture, 16 FCC Rcd 10707 (2001) ($ 4,000 forfeiture after individual refused to respond to an LOI). 16 47 U. S. C. § 503( b)( 2)( B). See also 47 C. F. R. § 1.80( b)( 2); Amendment of Section 1.80( b) of the Commission’s Rules, Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 19 FCC Rcd 10945 (2004). 17 47 U. S. C. § 503( b)( 2)( D). 18 47 C. F. R. § 1.80; Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines, Report and Order, 12 FCC Rcd 17087, 17114 (1997) (“ Forfeiture Policy Statement”); recon. denied 15 FCC Rcd 303 (1999). 19 See BigZoo, DA 05- 449 at ¶ 5. 4 Federal Communications Commission DA 05- 1907 5 11. We also direct QuickLink to respond fully to the October 15, 2004, LOI within thirty days of the release of this order. Failure to do so may constitute an additional violation potentially subjecting QuickLink to further penalties, including potentially higher monetary forfeitures and/ or the revocation of QuickLink’s authorization to operate as a common carrier pursuant to section 214 of the Act. 20 IV. ORDERING CLAUSES 12. ACCORDINGLY, IT IS ORDERED THAT, pursuant to section 503( b) of the Communications Act of 1934, as amended, 47 U. S. C. § 503( b), and section 1.80 of the Commission’s rules, 47 C. F. R. §1.80, QuickLink Telecom, Inc., is hereby NOTIFIED of its APPARENT LIABILITY FOR FORFEITURE in the amount of $20,000 for willfully and repeatedly violating a Commission order. 13. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the Commission’s rules, 47 C. F. R. § 1.80, within thirty days of the release date of this NOTICE OF APPARENT LIABILITY FOR FORFEITURE, QuickLink Telecom, Inc., SHALL PAY the full amount of the proposed forfeiture currently outstanding on that date or SHALL FILE a written statement seeking reduction or cancellation of the proposed forfeiture. 14. Payment of the forfeiture must be made by check or similar instrument, payable to the order of the Federal Communications Commission. The payment must include the NAL/ Acct. No. and FRN No. referenced above. Payment by check or money order may be mailed to Federal Communications Commission, P. O. Box 358340, Pittsburgh, PA 15251- 8340. Payment by overnight mail may be sent to Mellon Bank /LB 358340, 500 Ross Street, Room 1540670, Pittsburgh, PA 15251. Payment by wire transfer may be made to ABA Number 043000261, receiving bank Mellon Bank, and account number 911- 6106. 15. IT IS FURTHER ORDERED, that pursuant to sections 4( i), 4( j), 218 and 403 of the of the Communications Act of 1934, as amended, 47 U. S. C. §§ 4( i), 4( j), 218 and 403, and section 54.711 of the Commission’s rules, 47 C. F. R. § 54.711, QuickLink Telecom, Inc., shall fully respond to the October 15, 2004, Letter of Inquiry sent by the FCC’s Enforcement Bureau within 30 days of the release of this order. 16. The response, if any, to this NOTICE OF APPARENT LIABILITY FOR FORFEITURE must be mailed to William H. Davenport, Chief, Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, 445 12 th Street, S. W., Suite 4- C330, Washington, D. C. 20554 and must include the NAL/ Acct. No. referenced above. E- mail address: william. davenport@ fcc. gov. 17. The Commission will not consider reducing or canceling a forfeiture in response to a claim of inability to pay unless the petitioner submits: (1) federal tax returns for the most recent three-year period; (2) financial statements prepared according to generally accepted accounting practices (“ GAAP”); or (3) some other reliable and objective documentation that accurately reflects the petitioner’s 20 See NOS Communications, Inc., Affinity Network, Inc., and NOSVA Limited Partnership, Order to Show Cause, Notice of Opportunity for Hearing, 18 FCC Rcd 6952 (2003). 5 Federal Communications Commission DA 05- 1907 6 current financial status. Any claim of inability to pay must specifically identify the basis for the claim by reference to the financial documentation submitted. 18. Requests for payment of the full amount of this NOTICE OF APPARENT LIABILITY FOR FORFEITURE under an installment plan should be sent to Chief, Revenue and Receivables Operations Group, 445 12 th Street, S. W., Washington, D. C. 20554. 19. IT IS FURTHER ORDERED THAT a copy of this NOTICE OF APPARENT LIABILITY shall be sent, by certified mail/ return receipt requested to Amar Siddigui, QuickLink Telecom, Inc., 169- 26 Hillside Avenue, Jamaica, NY 11432. FEDERAL COMMUNICATIONS COMMISSION Kris Anne Monteith Acting Chief, Enforcement Bureau 6