Federal Communications Commission FCC 16-158 2 1.  NSS Apparently Received Commitments from HCPs to Provide Telecommunications Services Prior to the Expiration of the 28-Day Period and, in Some Instances, Before the Form 465 Was Even Posted, in Violation of Section 54.603 of the Commission’s Rules ........................................................................................................................................ 91  2.  NSS Created Post Facto Bid Matrices to Apparently Deceive USAC and the Commission into Believing that Competitive Bidding Processes were Fair and Open, in Violation of Sections 54.603 and 54.615 of the Commission’s Rules ................................ 94  3.  NSS Apparently Induced an HCP to Award It a Contract as a Result of an Improper Gift, in Violation of Sections 54.603 and 54.615 of the Commission’s Rules........................ 97  4.  NSS Apparently Received Confidential, Proprietary, and Inside Information from Service Providers and HCPs that Gave NSS an Unfair Advantage in the Competitive Bidding Process, in Violation of Sections 54.603 and 54.615 of the Commission’s Rules ........................................................................................................................................ 99  B.  NSS Apparently Violated the Commission’s Rules by Inflating Rural Rates Charged to HCPs to Improperly Increase Its Payments from the Fund, in Violation of Sections 54.607 and 54.609 of the Commission’s Rules ........................................................................... 101  C.  NSS Apparently Violated the Commission’s Rules Through Its Use of Apparently Forged and False Documents to Improperly Increase Payments Received from the Fund ...................... 105  1.  NSS Apparently Violated the Commission’s Rules Through Its Use of Apparently Forged Urban Rate Documents, in Violation of Sections 54.605, 64.609, and 54.613 of the Commission’s Rules .................................................................................................... 108  2.  NSS Apparently Violated the Commission’s Rules When It Falsely Represented that the Urban Rate for Certain Services Was $138.00 Per Month, in Violation of Sections 54.605, 64.609, and 54.613 of the Commission’s Rules ....................................................... 109  D.  NSS Apparently Committed Wire Fraud ..................................................................................... 110  E.  Joint and Several Liability of NSS and Scott Madison ................................................................ 117  V.  PROPOSED FORFEITURE .............................................................................................................. 127  A.  Proposed Forfeiture Amount for NSS’s Conduct in Apparent Violation of the Commission’s Competitive Bidding Rules .................................................................................. 133  B.  Proposed Forfeiture Amount for NSS’s Apparent Violations of the Commission’s Rules Governing Urban Rates ................................................................................................................ 136  C.  Proposed Forfeiture Amount for NSS’s Apparent Violation of the Wire Fraud Statute Pursuant to Section 503(b)(1)(D) ................................................................................................. 141  VI. CONCLUSION .................................................................................................................................. 142  VII. ORDERING CLAUSES .................................................................................................................... 148 APPENDIX A – Overview of $138.00 Urban Rates as Represented by NSS APPENDIX B – Form 466s Charged APPENDIX C – Form 466s Supported by Apparently False $138.00 Rate Documents APPENDIX D – Form 466s Supported by Apparently Forged Comcast Rate Documents APPENDIX E – Apparently Forged Urban Rate Document Submitted to USAC by HCP South Sunflower on June 10, 2013 APPENDIX F – Apparently Forged Urban Rate Document Backdated by NSS and Submitted to USAC by HCP South Sunflower on January 24, 2014 APPENDIX G – Email from NSS Employee to Scott Madison Attaching Apparently Backdated and Forged Urban Rate Documents at His Request I. INTRODUCTION 1. The federal Rural Health Care Program (RHC Program) ensures that eligible rural health care providers (HCPs) pay the same amount for telecommunications services as their urban counterparts. Through this program, the Commission facilitates the availability of cutting edge medical services to rural communities, including high-speed telecommunications and internet connectivity. Parties that defraud or Federal Communications Commission FCC 16-158 3 otherwise harm the RHC Program not only deprive the program of much-needed funds, but also potentially harm millions of rural Americans, who may end up paying more for medically necessary services or forgoing them altogether. This is such a case. 2. From at least 2012 through the present, Network Services Solutions, LLC (NSS), in connection with its participation in the RHC Program, received millions of dollars from the Universal Service Fund (USF or the Fund) to which it was not apparently entitled. NSS’s apparently wrongful conduct includes: Competitive Bidding ? Prematurely reaching agreements in principle with eligible rural HCPs prior to the end of the mandatory 28-day waiting period during which HCPs are required to consider bids submitted by multiple parties; ? Deceiving the Universal Service Administrative Company (USAC) and the Commission by proffering bid analysis documents that gave the false impression that NSS’s selection as service provider for certain contracts was objectively made; ? Providing a $10,000 gift to induce an HCP to award a contract to NSS; ? Gaining an unfair advantage in the competitive bidding process by utilizing proprietary information it improperly obtained through its relationship with an account manager of a facilities-based telecommunications provider; Inflated Rural Rates ? Contributing little to no value for services that were provided to HCPs by underlying facilities- based carriers and then significantly inflating the actual costs of those services, the rural rates, which were ultimately paid by the Fund; Forged and False Documents ? Submitting documents to USAC and HCPs with apparently forged and false urban rates in order to increase NSS’s payments from the Fund; and Wire Fraud ? Transmitting forged documents via interstate wire to HCPs and USAC in order to support USF claims, which resulted in NSS improperly receiving considerably greater payments from the Fund. 3. In this Notice of Apparent Liability for Forfeiture (NAL), we continue our commitment to combat waste, fraud, and abuse in the RHC Program by taking action and proposing monetary forfeitures against a company that has apparently ignored the Commission’s Rules. Specifically, we find that NSS apparently willfully and repeatedly violated Sections 54.603, 54.605, 54.607, 54.609, 54.613 and 54.615 of the Commission’s Rules,1 by engaging in conduct which resulted in competitive bidding that was not fair and open, inflating the rates for services it charged to HCPs and the Fund, and relying on apparently forged and false documents to support its claims for payment from the Fund. Pursuant to Section 503(b)(1)(D) of the Communications Act of 1934, as amended (Act)2, we further find that NSS apparently violated the wire fraud statute by transmitting or causing to be transmitted by means of wire, radio, or television communication in interstate commerce apparently forged documents to support its claims for payment from the Fund. 3 As a result, and upon the findings and recommendations of the 1 47 CFR §§ 54.603, 54.605, 54.607, 54.609, 54.613, 54.615. 2 47 U.S.C. § 503(b)(1)(D). 3 18 U.S.C. § 1343. Federal Communications Commission FCC 16-158 4 Enforcement Bureau’s (Bureau) USF Strike Force (Strike Force) after an extensive and comprehensive investigation (the Investigation),4 we propose a forfeiture penalty of $21,691,498.85. The forfeiture penalty we propose here reflects the seriousness, duration, egregiousness, and scope of NSS’s multiple apparent violations. II. BACKGROUND A. Legal Framework 4. Before discussing NSS’s apparent violations, we first must provide some background information on the RHC Program. As noted above, the RHC Program provides financial support to eligible rural HCPs so that all health care facilities—regardless of whether they are located in a rural or urban area—can implement the modern telecommunications systems that are vital to 21st century medical care.5 The Telecommunications Program is part of the Commission’s RHC Program and is paid for through the USF.6 Through the Telecommunications Program, eligible rural HCPs can obtain rates for supported services that are no higher than the highest tariffed or publicly-available commercial rate for a similar service in the closest city in the state with a population of 50,000 or more people.7 Support payments from the Fund related to the Telecommunications Program are calculated as the difference between the rural rate (the rate for telecommunication services provided to HCPs in rural areas, which is generally more expensive) and the lower urban rate (the rate for commercial customers other than HCPs in nearby urban areas, which is generally less expensive).8 5. Competitive Bidding. Through the RHC Program, HCPs may apply for USF support for eligible services only by making a “bona fide” request for services from telecommunications companies, seeking competitive bids for services eligible for support, and following any other applicable state, local, or other procurement requirements.9 The competitive bidding requirement is a significant safeguard to 4 In addition to the analysis of NSS data and documents, USAC data and documents, and other investigative steps, several confidential witnesses, including former NSS employees and employees of regional sales companies, were interviewed in connection with this Investigation. 5 See Federal-State Joint Board on Universal Service, Report and Order, 12 FCC Rcd 8776, 8796, para. 35 (1997); see also 47 CFR § 54.602. 6 The RHC Program also includes the Healthcare Connect Fund, Internet Access Program and the Pilot Program. The Healthcare Connect Fund provides a 65 percent discount on eligible expenses related to broadband connectivity to both HCPs and consortia. The Internet Access Program provides a 25 percent discount off the cost of monthly Internet access for eligible rural HCPs. The Pilot Program provides funding for up to 85 percent of eligible costs of the construction or implementation of statewide and/or regional broadband networks. See generally Rural Health Care Support Mechanism, Report and Order, 27 FCC Rcd 16678 (2012); Rural Health Care Support Mechanism, Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking, 18 FCC Rcd 24546 (2003) (2003 Order and Further Notice). Funding for Internet access under the Internet Access Program continued through the end of funding year 2013, which ended on June 30, 2014. See Rural Health Care Support Mechanism, Report and Order, 27 FCC Rcd 16678, 16700, n.120 (2012). Beginning in January 2014, rural HCPs receiving support for Internet access received support for those same services through the Healthcare Connect Fund Program. See Rural Health Care Support Mechanism, Report and Order, 27 FCC Rcd 16678, 16819, para. 354 (2012). 7 47 CFR § 54.607. 8 47 CFR §§ 54.602, 54.609. See generally Rural Health Care Support Mechanism, Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking, 18 FCC Rcd. 24546 (2003) (2003 Order and Further Notice). 9 47 CFR §§ 54.602, 54.603, 54.615. Federal Communications Commission FCC 16-158 5 protect the RHC Program and USF from waste, fraud, and abuse, and ensures that HCPs choose the most cost-effective bid so that the USF is used wisely and efficiently.10 6. To make the required bona fide request for bids in connection with the Telecommunications Program, HCPs prepare and transmit to USAC an FCC Form 465 (Form 465), which USAC then posts on its website for telecommunications carriers to review.11 An HCP submits one Form 465 per Funding Year (FY) for all services for which it is seeking bids through the Telecommunications Program. Each funding year begins on July 1 and ends June 30; for example, FY2012 runs from July 1, 2012, through June 30, 2013, and FY2013 begins on July 1, 2013. 7. Through the Form 465, HCPs describe the planned service requirements and may provide other information about their service needs to potential service providers.12 In response to the Form 465, interested service providers submit bids to the HCPs. HCPs must review all bids submitted in response to the Form 465 and wait at least 28 days before “making commitments” with the selected service provider.13 The earliest date on which HCPs can enter into agreements with the selected service provider, i.e., the 29th day after the Form 465 is posted, is the Allowable Contract Selection Date (ACSD). 8. Under the Commission’s Rules, HCPs must choose the most cost-effective service provider, which is the “method that costs the least after consideration of the features, quality of transmission, reliability, and other factors that the health care provider deems relevant to choosing a method of providing the required health care services.”14 Once the HCP selects the most cost-effective service provider and enters into a service contract, the HCP conveys this selection to USAC by filing an FCC Form 466 (Form 466), which also serves as the HCP’s request for support payments from the USF.15 The applicant uses the Form 466 to verify the type of services ordered and to certify that the selected service provider is the most cost-effective option.16 9. Requesting Support. USAC uses the Form 466, along with the supporting documentation and information that applicants submit, to determine, among other things, the appropriate support payments from the Fund.17 Supporting documentation and information includes the rural and urban rates to determine the cost of service, the requested USF support amount, a copy of the signed contract (if applicable), and copies of bids (if more than one bid is received).18 The Form 466 and supporting 10 See In the Matter of Rural Health Care Support Mechanism, Order, 22 FCC Rcd. 20360, 20412, para. 101 (2007). See also Federal-State Joint Board on Universal Service, Report and Order, 12 FCC Rcd. 8776, 9076, paras. 480, 686 (1997) (requiring competitive bidding processes for eligible schools and libraries and eligible health care providers to be fair and open such that no bidders receive an unfair advantage). 11 47 CFR § 54.603; Health Care Providers Universal Service, Description of Services Requested and Certification Form, OMB 3060-0804 (Nov. 2011) (Form 465); Form 465 Instructions, Rural Health Care Universal Service Mechanism, OMB-3060-0804 (Nov. 2011). 12 See Form 465, Block 5; USAC, Rural Health Care, Telecommunications Program, Step 2: Evaluation Criteria & Service Requests, http://www.usac.org/rhc/telecommunications/health-care-providers/step02/default.aspx (last visited Oct. 31, 2016). 13 47 CFR § 54.603(b)(3). 14 47 CFR § 54.603(b)(4). 15 See Health Care Providers Universal Service, Funding Request and Certification Form, OMB 3060-0804 (Nov. 2011) (Form 466); Form 466 Instructions, Rural Health Care Universal Service Mechanism, OMB-3060-0804 (Nov. 2011) (Form 466 Instructions). 16 See 47 CFR § 54.603(b)(4); see also Form 466. 17 See Form 466; USAC, Rural Health Care, Telecommunications Program, Health Care Providers, Step 4: Submit Funding Requests, http://www.usac.org/rhc/telecommunications/health-care-providers/step04/default.aspx (last visited Oct. 31, 2016). 18 See Form 466; USAC, Rural Health Care, Telecommunications Program, Health Care Providers, Documentation, (continued….) Federal Communications Commission FCC 16-158 6 documentation, including the urban rate documentation, is typically submitted electronically through USAC’s “My Portal” web-based application.19 HCPs must submit one Form 466 for each service for which they are seeking support from the Fund.20 10. Determining the Urban and Rural Rates. The rural rate submitted by the HCP, which reflects the HCP’s actual cost of service, is substantiated by a monthly bill or invoice from the service provider with the type of service and the actual cost of the service for which funding is requested.21 HCPs and service providers can obtain and utilize urban rates from a number of sources. One source is USAC’s website, which contains a list of acceptable urban rates.22 If an HCP uses an urban rate other than one posted on USAC’s website, an HCP must provide documentation of the urban rate, which may come from the service provider.23 The urban rate must be in use in an urban area in the HCP’s state.24 Urban rate documentation may include tariff pages, contracts, signed letters on a service provider’s letterhead, rate pricing information from a service provider’s website, or similar documentation showing how the urban rate was obtained,25 and the date on the urban rate documentation should indicate that the rate is provided in the current funding year.26 11. Evergreen Status. USAC then reviews each contract to determine whether it is eligible for “evergreen” status, which refers to a contract that covers more than one funding year. If USAC approves the contract for evergreen status, the HCP would be exempt from having to post subsequent Form 465s and engage in further competitive bidding for the remainder of the contract term.27 However, regardless of whether the HCP receives evergreen status, it is required to apply for support annually by filing a Form 466.28 12. Funding. USAC reviews the applicant’s Form 466 with accompanying documentation and information, the service contract entered into between the HCP and service provider, and any (Continued from previous page) http://www.usac.org/rhc/telecommunications/health-care-providers/documentation.aspx (last visited Oct. 31, 2016). 19 See USAC, Rural Health Care, Telecommunications Program, My Portal, http://usac.org/rhc/tools/applicant- login/default.aspx (last visited Oct. 31, 2016). USAC’s network servers for the Rural Health Care Program’s My Portal are currently located in Virginia. 20 See Form 466 Instructions. 21 See Form 466; USAC, Rural Health Care, Telecommunications Program, Documentation, http://www.usac.org/rhc/telecommunications/health-care-providers/documentation.aspx (last visited Oct. 31, 2016). 22 See USAC, Rural Health Care, Telecommunications Program, Search Tools, Urban Rates Search, www.usac.org/rhc/telecommunications/tools/UrbanRates/search.asp (last visited Oct. 31, 2016). 23 See Form 466 Instructions, Block 6; USAC, Rural Health Care, Telecommunications Program, Health Care Providers, Documentation, http://www.usac.org/rhc/telecommunications/health-care-providers/documentation.aspx (last visited Oct. 31, 2016). 24 See 47 CFR § 54.605; see also Form 466 Instructions, Block 6; USAC, Rural Health Care, Telecommunications Program, Health Care Providers, Supporting Documentation, http://www.usac.org/rhc/telecommunications/health- care-providers/documentation.aspx (last visited Oct. 31, 2016). 25 See Form 466; USAC, Rural Health Care, Telecommunications Program, Health Care Providers, Documentation, http://www.usac.org/rhc/telecommunications/health-care-providers/documentation.aspx (last visited Oct. 31, 2016). 26 See USAC, Rural Health Care, Telecommunications Program, Health Care Providers, Frequently Asked Questions, Q9: What is acceptable documentation, guidelines for calculating urban rates, http://www.usac.org/rhc/telecommunications/faqs/default.aspx (last visited Oct. 31, 2016). 27 See USAC, Rural Health Care, Telecommunications Program, Health Care Providers, Evergreen Contracts, http://www.usac.org/rhc/telecommunications/health-care-providers/evergreen-contracts.aspx (last visited Oct. 31, 2016). 28 Id. Federal Communications Commission FCC 16-158 7 competing bids. USAC then issues funding commitment letters (FCLs) informing the HCP whether the application has been approved or denied. 29 USAC may also request additional information before finalizing a decision. 13. When USAC approves the HCP’s Form 466 and related materials, an HCP submits an FCC Form 467 (Form 467) to notify USAC that the service provider has begun providing the supported service.30 An HCP must submit one Form 467 for each Form 466 that the HCP previously submitted to USAC.31 The Form 467 is also used to notify USAC when the applicant has discontinued the service or if the service was or will not be active during the Funding Year.32 14. Service Provider Invoicing. If USAC approves the Form 467, the HCP and the service provider will then receive a copy of the HCP Support Schedule (HSS), which outlines the approved support amounts for each billing cycle.33 The service provider should then begin crediting the HCP for the support amount (if it has not yet done so) and may begin to invoice USAC for the telecommunications services approved by USAC.34 15. The service provider then submits its invoice to USAC through the My Portal application and electronically certifies that the information contained in the invoice is correct and that the HCP was credited with the amount shown under “Support Amount to be Paid by USAC.”35 USAC reviews the invoice, and if approved, disburses funds to the service provider in accordance with the HSS.36 B. Relevant Entities and Individuals 1. Network Services Solutions, LLC 16. Network Services Solutions, LLC (NSS) is a limited liability company, organized under the laws of Nevada, and is a reseller of telecommunications services.37 NSS provides telecommunications services to HCPs in connection with the RHC Program. NSS has received more than $38,000,000 in payments from the USF from 2006 through the present in connection with the RHC Program, and is one of the largest recipients of USF funding in the RHC Program.38 29 If USAC denies support or if the HCP or service provider disagrees with the support amount as determined by USAC, either the HCP and/or the service provider may file an appeal of USAC’s determination. See USAC, Rural Health Care, Telecommunications Program, Health Care Providers, Step 4: Submit Funding Requests, http://www.usac.org/rhc/telecommunications/health-care-providers/step04/default.aspx (last visited Oct. 31, 2016). 30 See Health Care Providers Universal Service, Connection Certification, OMB 3060-0804 (Nov. 2011) (Form 467); Form 467 Instructions, Rural Health Care Universal Service Mechanism, OMB-3060-0804 (Nov. 2011). 31 See id. 32 See id. 33 USAC, Rural Health Care, Telecommunications Program, Service Providers, Step 5: Support Schedule, http://www.usac.org/rhc/telecommunications/service-providers/step05/default.aspx (last visited Oct. 31, 2016). 34 USAC, Rural Health Care, Telecommunications Program, Service Providers, Invoicing, http://www.usac.org/rhc/telecommunications/service-providers/invoicing.aspx (last visited Oct. 31, 2016). 35 See id. 36 USAC, Rural Health Care, Telecommunications Program, Service Providers, Step 6: Invoice USAC, http://www.usac.org/rhc/telecommunications/service-providers/step06/default.aspx (last visited Oct. 31, 2016). 37 NSS Articles of Organization, Limited Liability Company (Dec. 30, 2004); see also Telecommunications Reporting Worksheet, FCC Form 499-A, OMB 3060-0055, Block 1 (Dec. 2014) NS 0003843. 38 Information on file in EB-IHD-15-0001913. Federal Communications Commission FCC 16-158 9 4. Health Care Providers 24. A number of HCPs contracted for services from NSS through the RHC Program and are referenced throughout the NAL: a. Weems Community Mental Health Center (Weems), which has health care facilities in each of the nine counties that make up Region Ten of the Mississippi Community Mental Health System;44 b. Bond County Health Department (Bond) is located in Greenville, Illinois;45 c. South Sunflower County Hospital (South Sunflower) is located in Indianola, Mississippi;46 d. Forrest General Hospital/Marion General Hospital (FGH/MGH) is part of the Forrest Health System, which is a partnership of healthcare organizations formed to increase access to health care in south Mississippi;47 e. Hardy Wilson Memorial Hospital (Hardy Wilson) is located in Hazlehurst, Mississippi; f. Tallahatchie General Hospital (Tallahatchie) is a hospital located in Charleston, Mississippi;48 g. East Central Mississippi Health Care (East Central) operates health centers and clinics in Mississippi;49 h. Texoma Community Center (Texoma), located in the Texas counties of Cooke, Fannin, and Grayson, provides an array of mental health services for adults, adolescents, and children;50 and i. South Central Regional Medical Center (SCRMC) is a hospital system located in Mississippi.51 III. THE COMMISSION’S INVESTIGATION 25. In connection with the Investigation, confidential witnesses were interviewed, including former NSS employees, as well as principals and employees of the Regional Sales Companies. Collectively, these witnesses discussed NSS, its conduct, and how its agents engaged in practices that resulted in competitive bidding that was not fair and open, and gave NSS an improper advantage in the RHC Program marketplace. These witnesses also discussed misconduct related to the urban and rural rates NSS submitted to HCPs and ultimately to USAC, which resulted in improper USF payments to NSS. These witnesses furnished the Commission with over one hundred thousand documents that 44 Weems Community Mental Health Center, http://www.weemsmh.com/default/index.cfm/about-us/ (last visited on Oct. 31, 2016). 45 Bond County Health Department, http://www.bchd.us/pcc.htm (last visited on Oct. 31, 2016). 46 South Sunflower County Hospital, http://health.usnews.com/best-hospitals/area/ms/south-sunflower-county- hospital-6540355 (last visited on Oct. 31, 2016). 47 Forrest General Hospital/Marion General Hospital, http://www.forresthealth.org/our-locations/marion-general- hospital/ (last visited on Oct. 31, 2016). 48 Tallahatchie General Hospital, http://www mytgh.com/about (last visited on Oct. 31, 2016). 49 East Central Mississippi Health Care, https://www.ecmhci.com/history (last visited on Oct. 31, 2016). 50 Texoma Community Center, http://www.texomacc.org/ (last visited on Oct. 31, 2016). 51 South Central Regional Medical Center, http://www.scrmc.com (last visited on Oct. 31, 2016). Federal Communications Commission FCC 16-158 10 corroborated their statements and independently demonstrated NSS’s apparent misconduct in violation of the Commission’s Rules governing the RHC Program. A. NSS’s Conduct Related to the Rural Health Care Program’s Competitive Bidding Process 26. The Commission has consistently required that the competitive bidding process be fair and open, and that no bidders receive an improper advantage.52 In furtherance of these requirements, the Commission’s competitive bidding rules for the Healthcare Connect Fund53 Program prohibit service providers from, among other things, preparing, signing, or submitting an applicant’s initial documents requesting services, being involved in setting bid evaluation criteria, or participating in the bid evaluation or vendor selection process.54 In apparent violation of the Commission’s Rules and Orders requiring that the competitive bidding process be fair and open, NSS obtained contracts supported by the RHC Program through a variety of apparently unlawful means, including receiving inside, proprietary information; agreeing in principle with HCPs to receive RHC Program contracts before the Form 465 was posted; furnishing a gift to an HCP to induce a contract award and extension of that contract; and creating documents for certain HCPs to submit to USAC and the Commission in order to give the impression that the HCPs undertook an objective, contemporaneous assessment of competing bidders when, in fact, the HCPs had not performed any such assessment prior to awarding the contract to NSS. 1. NSS Received Commitments from HCPs Prior to the Completion of the 28- Day Competitive Bidding Process 27. The Commission’s Rules prohibit HCPs from making commitments with service providers until a minimum of 28 days after the posting of a Form 465.55 The Investigation demonstrated that NSS and certain HCPs entered into service agreements during the 28-day waiting period, or otherwise committed to procuring services from NSS as part of the RHC Program. In some cases, these commitments were made before a Form 465 solicitation for bids was posted. In all of these instances, NSS requested payments from the Fund. 28. One such example involved HCP Bond. On June 25, 2013, Bond filed, and USAC posted, a Form 465 soliciting bids for “Internet Service ONLY.”56 Prior to the ACSD, NSS determined that Bond’s Form 465 was too specific and would likely not support funding for NSS’s proposed services 52 See Rural Health Care Support Mechanism, Report and Order, 27 FCC Rcd 16678, 16778, paras. 229-30 (2012) (“[C]ompetitive bidding furthers the competitive neutrality requirement . . . of the Act by ensuring that universal service support does not disadvantage one provider over another . . . [A]ll entities participating in the [RHC Program] must conduct a fair and open competitive bidding process prior to submitting a request for funding . . .”); cf. 47 CFR § 54.503(a) (“All entities . . . must conduct a fair and open competitive bidding process . . . .”); Federal- State Joint Board on Universal Service First Report and Order, Report and Order, 12 FCC Rcd 8776, 9133-34, paras. 686, 688 (1997); Schools and Libraries Universal Service Support Mechanism, Third Report and Order and Second Further Notice of Proposed Rulemaking, 18 FCC Rcd 26912, 26939, para. 66 (2003) (Schools and Libraries Third Report and Order) (stating that a fair and open competitive bidding process is critical to preventing waste, fraud, and abuse of program resources). 53 See supra note 6. 54 See 47 CFR § 54.642; Rural Health Care Support Mechanism, Report and Order, 27 FCC Rcd at 16779, para. 231. The E-rate Program’s competitive bidding rules also prohibit such conduct. See 47 C.F.R. § 54.503; In the Matter of Schools and Libraries Universal Support Mechanism, A National Broadband Plan For Our Future, Sixth Report and Order, 25 FCC Rcd 18762, 18798-800, paras. 85-86 (2010) (Schools and Libraries Sixth Report and Order). 55 47 CFR § 54.603(b)(3). 56 FY2013, Form 465, HCP No. 13498, Form 465 Application No. 43136622, Boxes 29 and 30 (June 25, 2013). The ACSD was July 23, 2013, and NSS submitted a bid on July 10, 2013. See Email from , Director of Business Development, NSS, to Kris Hand, Administrative Assistant, Bond (July 10, 2013, 2:01 p.m.). Federal Communications Commission FCC 16-158 13 33. Tallahatchie’s Form 465 for FY2013 was posted on May 28, 2013, and resulted in an ACSD of June 25, 2013.75 Even before the competitive bidding process had begun, NSS, through Madison, had already placed the order for Tallahatchie’s service with AT&T on May 8, 2013.76 Tallahatchie claimed on its FY2013 Form 466 that it selected NSS as its service provider on July 19, 2013.77 34. During the 28-day competitive bidding period, Tallahatchie received other bids in addition to the one submitted by NSS.78 In reviewing the Form 466 and its supporting documentation, USAC asked Tallahatchie to justify its selection of NSS’s $8,100.00 bid when a losing bidder had offered substantially similar services at a cost of $1,876.00.79 In its response, Tallahatchie advised USAC that based on its evaluation of the contracts, NSS was “worth the high cost.”80 On July 24, 2014, USAC denied Tallahatchie’s request for support finding that it had not selected the most cost effective method of providing the requested service.81 Tallahatchie and NSS did not appeal this denial of support, and NSS did not require Tallahatchie to pay the outstanding invoiced amounts.82 Although USAC denied funding support for Tallahatchie, NSS’s conduct illustrates the schemes the company apparently devised to defeat the Commission’s competitive bidding rules. 2. NSS and HCPs Created and Used Post Facto Bid Matrices 35. A bid matrix is one method HCPs may use to demonstrate to USAC how they evaluated the relevant factors to determine which bid is the most cost effective, as required by the Commission’s Rules.83 After certain contracts were awarded to NSS, USAC requested supporting documentation from 75 FY2013, Form 465, HCP 10269, Form 465 Application No. 43134249 (May 28, 2013). 76 See Email from Scott Madison, President, NSS, to , Sales, Regional Sales Companies, (May 8, 2013, 2:02 p.m.). See also AT&T Pricing Schedule, Managed Internet Service (MIS) Basic (May 8, 2013). 77 FY2013, Form 466, HCP No. 10296, Form 465 Application No. 43134249, Block 45 (Dec. 20, 2013). 78 FY2013, Form 466, HCP 10296, Form 465 Application No. 43134249, Block 45 (Dec. 20, 2013). See also Response to Rural Healthcare Division, USAC (RHCD), Information Request Notice to HCP No. 10269, FRN 1337087 (July 16, 2014, 10:03 a m.); Tallahatchie General Hospital, Service Provider Scorecard, FRN 1337087. 79 RHCD, Information Request Notice to HCP No. 10269, FRN 1337087, (July 3, 2014, 11:01 a m.). 80 Response to RHCD, Information Request Notice to HCP No. 10269, FRN 1337087 (July 16, 2014, 10:03 a.m.). See also Tallahatchie General Hospital, Service Provider Scorecard, FRN 1337087. 81 RHCD Portal Notice to HCP No. 10269, FRN 1337087 (July 24, 2014). A copy of this notice was also provided to NSS. See also Proposal for Tallahatchie General Hospital. Information on file in EB-IHD-15-0001913. On April 15, 2014, USAC also approved Tallahatchie’s Form 466-A in connection with the Internet Access Program requesting support for costs associated with internet access. See RHCD Service Provider Invoice Status Report, Invoice No. 2014 06-30 FY2013, FRN 13370931 (July 1, 2014). 82 See Email from Scott Madison, President, NSS, to , Sales, Regional Sales Companies (July 25, 2014, 2:02 p.m.) (“Bottom line is that NNS [sic] will honor the agreement and there [sic] net pay.”). Tallahatchie was required to pay only $ of the $ invoiced by NSS per month. See NSS Invoice No. 0000483131201, Account No. 00483-2108 (Dec. 1, 2013). Compare NSS Dedicated Internet Access Service Agreement (July 20, 2013) (contract rate of $ per month), with AT&T Pricing Schedule, Managed Internet Service (MIS) Basic (May 8, 2013) (contract rate of $ per month) (resulting in a markup by NSS of 525 percent). 83 The use of a scoring matrix is not required under the Rules but is a useful tool for documenting the criteria used in evaluating bids and selecting the most cost-effective method of providing the services requested on the Form 465. See USAC Rural Health Care, Telecommunications Program, Health Care Providers, Step 2: Evaluation Criteria & Service Requests, http://www.usac.org/rhc/telecommunications/health-care-providers/step02 (last visited Oct. 31, 2016); see also 47 CFR § 54.603. The HCP certifies on the Form 466 that it “has considered all bids received and selected the most cost-effective method of providing the requested service or services.” See FCC Form 466, Block 8: Certification. Federal Communications Commission FCC 16-158 14 the HCPs, including bid matrices. In a number of instances, the HCPs at issue apparently never prepared bid matrices prior to, or contemporaneous with, awarding contracts to NSS. Instead, in specific instances, NSS and these HCPs apparently misled USAC and the Commission by proffering bid matrices that were not considered by the HCPs as part of their decision making process but were created well after the contracts had been awarded to NSS. 36. NSS apparently misrepresented its compliance with the Commission’s Rules through the use of bid matrices that were generated well after contracts were awarded to NSS. That is to say, these bid matrices were not prepared contemporaneously with the submission of bids, and were not considered by the HCPs as part of their decision-making process. In doing so, NSS coordinated with HCPs to present inaccurate information to USAC and the Commission that the competitive bidding processes were fair and open. 37. NSS provided bid matrices to HCPs after NSS was awarded contracts by HCPs, and only after USAC requested such documents from the HCPs. NSS provided material direction to the HCPs about how to construct the bid matrices, including which factors to include and how much weight to apply to those factors. NSS also sought to review the bid matrices before they were submitted to USAC. These post facto bid matrices apparently sought to justify the HCPs’ selection of NSS as the winning bidder, and made it appear to USAC and the Commission as though NSS was selected through a process in which bid matrices were fairly evaluated prior to the awarding of a contract. 38. One such example of NSS’s participation in the construction of a post facto bid matrix concerned HCP Texoma, where a bid matrix was apparently constructed more than eight months after NSS was awarded the contract. After NSS and other service providers submitted bids in response to Texoma’s Form 465, Texoma awarded the contract to NSS on or about December 16, 2013.84 On or about August 27, 2014, after Texoma filed for USF support, USAC requested Texoma provide its selection criteria and explain why it selected NSS.85 39. On August 29, 2014, two days after USAC requested Texoma’s bid matrix, reported to Madison and that s/he discussed the USAC inquiry and request for a bid matrix with Texoma’s Director of Information Technology, and that Texoma “is going to research [its] records and complete the matrix. Once [it] has done so, [it] will send it to me for review.”86 added that Texoma “is confident that between price and customer care NSS will prevail” in the outcome of the post facto bid matrix analysis for the contract NSS was already awarded.87 In a different email discussion, others at NSS discussed relevant bid matrix elements that should be conveyed to Texoma and, on August 30, 2014, Madison directed that “verbal communication is the next steps [sic], nothing in email.”88 84 See FY2013, Form 465, HCP No. 33245, Application No. 43137960, (Sept. 10, 2013); see also NSS Point to Point Dedicated Service Agreement (Dec. 16, 2013). 85 RHCD Information Request Notice to HCP No. 33245, FRN 1348976 (Aug. 27, 2014); see also Email from RHC Admin, USAC to John Pack, Texoma (Sept. 8, 2014, 4:17 p m.); Email from , Compliance Specialist, NSS, to Scott Madison, President, NSS, and , Director of Operations, NSS, RE: Texoma (Aug. 29, 2014, 2:42 p.m.). 86 Email from , Compliance Specialist, NSS, to Scott Madison, President, NSS, and , Director of Operations, NSS, RE: Texoma (Aug. 29, 2014, 7:42 p.m.). 87 Id. 88 Email from Scott Madison, President, NSS, to , Director, Business Development, NSS, and , Major Account Executive, NSS, FW: Texoma (Aug. 30, 2014, 12:30 a.m.) (stating that “price has to be weighted the heaviest, total score adding to 100”). Federal Communications Commission FCC 16-158 20 55. The most egregious examples included situations where HCPs had existing service contracts with AT&T.128 In these instances, AT&T AM-1 introduced the HCPs to NSS where AT&T AM-1 was the designated representative for AT&T.129 NSS then pitched its “full funding” program where the HCP paid only a small portion of its total invoice and the remaining balance would be paid to NSS from the Fund. As part of this “partnership,” AT&T would not submit a bid for any new Form 465s that were posted by HCPs AT&T AM-1 introduced to NSS.130 The HCPs then selected NSS as their service provider, thus replacing AT&T. 56. NSS then did one of two things, depending on the HCP: ? NSS purchased additional telecommunications services from AT&T (through AT&T AM-1 as the designated representative), which often included upgraded and more expensive services than AT&T originally provided to the HCPs;131 or ? NSS would make no changes to the existing services being provided to the HCP by AT&T but would request a change of the billing address so AT&T could send its invoices to NSS for the services it was providing to the HCP. In each of these scenarios, NSS would then inflate AT&T’s costs and submit its own invoices to USAC for payment from the Fund, therefore representing to USAC that NSS and not AT&T was the HCP’s service provider. NSS never informed USAC that AT&T was in fact providing the underlying service at a significantly lower price, or that the HCP was still under contract with AT&T for these services. The difference between what AT&T charged the HCP for the service and what NSS billed USAC simply constituted NSS’s profit for its limited (if any) added value. 57. Occasionally, HCPs and others raised concerns about what was described by witnesses as “eye-popping” rates NSS charged to the Fund.132 In those cases, NSS directed the HCPs to focus only on the portion of the invoice that the HCP was directed to pay, which was typically less than 10 percent of the total amount NSS invoiced to USAC (the balance of which NSS charged to the Fund).133 128 For SCRMC compare NSS Point to Point Ethernet Service Agreement (Oct. 14, 2013) (indicating the monthly pre-discount rates of $ or $ for 100 Mbps Ethernet and $ for 1 Gbps Ethernet), with AT&T Addendum Agreement at 4 (Aug. 29, 2013) (indicating monthly pre-discount rates of $ for 100 Mbps Ethernet and $ for 1000 Mbps Ethernet) (a markup by NSS of 819 percent or 738 percent for 100 Mbps, and a markup by NSS of 1203 percent for 1000 Mbps/1 Gbps Ethernet, respectively). For Weems compare NSS Invoice 0000489140401 (Apr. 1, 2014) (indicating monthly pre-discount rates of $ , $ , or $ for MPLS 1.5 Mbps service), with AT&T Invoice 3486732205 (Dec. 5, 2013) (indicating monthly pre-discount rate of $ for MPLS 1.5 Mbps service) (a markup by NSS of 462 percent, 478 percent, and 386 percent, respectively). Information on file in EB-IHD-15-0001913. 129 Email from AT&T AM-1 to Keith Pearson, Information Technology, LSMFT, Weems (Oct. 15, 2013, 9:33 a.m.) (“[A]ttached is the MIS Pricing Schedule for Weems Community Mental Health . . . your monthly rate will be much lower through [Regional Sales Companies’] partner…”). 130 Information on file in EB-IHD-15-0001913. 131 Plan of Action for Weems Mental Health. Information on file in EB-IHD-15-0001913. See also Email from , Partner, Regional Sales Companies to AT&T AM-1, RE: FW: [AT&T] Switched Ethernet Network Contract (Aug. 26, 2013, 4:25 p m.). 132 Information on file in EB-IHD-15-0001913. 133 Information on file in EB-IHD-15-0001913; see also email from , Director of Business Development, NSS, to Jonathan Hatfield, I/T Manager, Klickitat Valley Health (May 29, 2014, 2:34 p m.) (“I do believe we can address everyone’s concern about the top line number. Our service agreements put the entire burden of that high number on our plate. Network Services accepts the responsibility so that you [sic] only commitment is to the Net (low number). That is in BACL [sic] and WHITE in our contract.”). Federal Communications Commission FCC 16-158 23 to Weems. NSS, in turn, submitted its own inflated invoices to USAC for payment as the purported service provider of record for Weems.154 64. When Weems’ Information Technology representative received NSS’s first invoice in the fall of 2013, he emailed an employee of Regional Sales Companies and wrote “I think I just lost my job” because he received NSS’s “63000 dollar invoice.”155 The invoice referenced by the Weems’ employee only displayed the amount NSS sought from the Fund, not the considerably smaller cost to be paid by Weems directly to NSS.156 65. Weems filed Form 466s requesting funding support on June 17, 2014. In September 2014, Weems received one FCL approving support in the amount of $19,973.26, and its contract with NSS received “Evergreen” status.157 After Weems confirmed its receipt of services, NSS invoiced and received payment from USAC in the amount of $19,973.26 on or about October 21, 2014, pursuant to its HSS.158 66. By letter dated January 5, 2015, USAC advised Weems that it had “received allegations that Network Services Solutions has submitted inflated rate documentation for services that are actually being provided by an incumbent local exchange carrier” and requested that Weems explain, among other things, “why Weems is receiving two sets of invoices for the same services.”159 USAC further advised Weems that the “allegations raise serious questions concerning compliance with FCC rules governing the RHC Telecommunications Program.”160 67. On January 12, 2015, Weems advised NSS that it “got an alarming letter from USAC today about investigating [NSS] and our relationship and requesting a lot of info. could you give me a call. I am basically reaching out to everyone at NSS….thanks.”161 Two weeks later and without explanation, NSS returned to USAC the $19,973.26 in USF support it received for one FRN related to the services it claimed to have provided to Weems in FY2013.162 After discussions with NSS, Weems 154 See FY2013, Form 466, HCP No. 26967, FRN 1347006 (June 17, 2014); FY2013, Form 466, HCP No. 26968, FRN 1347028 (June 17, 2014); FY2013, Form 466, HCP No. 26969, FRN 1347021 (June 17, 2014); FY2013, Form 466, HCP No. 29670, FRN 1347016 (June 17, 2014); FY2013, Form 466, HCP No. 26971, FRN 1347014 (June 17, 2014); FY2013, Form 466, HCP No. 26972, FRN 1347033 (June 17, 2014); FY2013, Form 466, HCP No. 26973, FRN 1347013 (June 17, 2014); FY2013, Form 466, HCP No. 26974, FRN 1346931 (June 17, 2014). In actuality, these services had previously been installed by AT&T and the October 5, 2013 install date on the Form 466s appears to be nothing more than the date that NSS started invoicing Weems for services already being provided by AT&T. Compare AT&T Invoice No. 9953010207, June 5, 2013, with AT&T Invoice No. 6723141204, October 5, 2013. See also NSS Invoice dated April 30, 2014, Invoice No. 0000489140401. 155 Email from Keith Pearson, Information Technology, LSMFT, Weems to , Regional Sales Companies (Nov. 6, 2013, 1:57 p.m.). 156 See Email from , Director of Business Development, NSS, to Scott Madison, President, NSS (Nov. 5, 2013, 1:13 p.m.). 157 FY2013, FCL, HCP No. 26967, FRN 13470061, (Sept. 17, 2014). 158 See RHCD eStatement for NSS (Oct. 21, 2014). 159 Letter from , Vice President, Rural Healthcare Division, USAC to Keith Pearson, Information Technology LSMFT, Weems (Jan. 5, 2015). 160 Id. 161 Email from Keith Pearson, Information Technology LSMFT, Weems, to , Vice President, Sales, Eastern Territory, NSS (Jan. 12, 2015, 3:28 p.m.). 162 See USAC Payment Identification Worksheet (Jan. 30, 2015); NSS check no. 8467 in the amount of $19,973.23 (Jan. 30, 2015). See also RHCD eStatement, Network Services Solutions, Weems-Clarke County, HCP No. 26967, FRN 13470061 (Oct. 21, 2014). Information on file in EB-IHD-15-0001913. Federal Communications Commission FCC 16-158 26 74. NSS apparently knowingly used sales quotes on fabricated Comcast letterhead to document urban rates as needed. In an August 7, 2013 email, Madison directed , an NSS employee, to provide “some dates that support 2012 funding” on sales quotes to serve as urban rate documents.178 On August 9, 2013, replied to Madison attaching three Comcast sales quotes with the date “05/09/13” inserted into the quotes. email reply also stated “05/09/13” and “Before you ask, yes, it is a weekday (Thursday).”179 75. On January 24, 2014, South Sunflower electronically submitted through USAC’s web- based My Portal application, an exact copy of the “05/09/13” Comcast sales quote for 50 Mbps that provided to Madison on August 9, 2013 as evidence of an urban rate in FY2012.180 After reviewing South Sunflower’s Form 466, USAC requested that South Sunflower obtain new urban rate documentation from the service provider (which appeared to be Comcast) because only one of the previously submitted urban rate letters included a date (March 7, 2013).181 76. These “05/09/13” sales quotes are essentially identical to the ones that were initially transmitted to USAC by South Sunflower as documentation of the urban rate on June 10, 2013.182 The only difference between the ‘Comcast’ sales quotes provided by to Scott Madison on August 9, 2013, the 50 Mbps ‘Comcast’ sales quote submitted by South Sunflower on January 24, 2014, and the ‘Comcast’ urban rate documents submitted to USAC by South Sunflower on June 10, 2013, is that the ‘Comcast’ sales quotes forwarded to Madison by email and the 50 Mbps sales quote submitted to USAC on January 24, 2014, were backdated to “05/09/13” and list the customer of record as ‘Network Services Solutions, LLC.’183 (Continued from previous page) Area (100 Mbps). Only the 100 Mbps letter is dated: “March 7, 2013,” which appears to have been manually entered. None of the three urban rate documents identifies a customer of record, but there are markings above the listed service address which appear to reflect the manual redaction of the named customer. All three letters bear the same Comcast trade insignia and employee email address. See e.g., Appendix E. 177 See FY2012, Form 466, HCP No. 12791, FRN 1224839 (June 10, 2013) (urban rate documents). See e.g., Appendix E. 178 Email from Scott Madison, President, NSS, to , Billing Manager, NSS (Aug. 7, 2013, 5:33 p.m.). 179 See Appendix G; Email from , Billing Manager, NSS, to Scott Madison, President, NSS (Aug. 9, 2013, 5:16 p.m.). Madison apparently wanted his employee to specifically add dates to urban rate quotes that occurred during the course of the normal business week to make the forged and backdated quotes more plausible. Similar to South Sunflower, these three urban rate documents were purportedly issued by “Robyn Milder” of Comcast’s Mississippi Sales Division (10 Mbps), “Robyn Milder” of Comcast’s Sacramento Service Area (50 Mbps), and “Robyn Midler” of Comcast’s Mississippi Service Area (100 Mbps). See also Appendix F. 180 FY2012, Form 466, HCP No. 12791, FRN 1224839; Response to RHCD Information Request Notice to HCP No. 12791, FRN 1224839 (Jan. 24, 2014). See also Appendix F. 181 RHCD Information Request Notice to HCP No. 12791, FRN 1224839 (Jan. 24, 2014). Urban rate documentation should indicate that the rate is available during the funding year. See supra Section II. 182 Compare FY2012, Form 466, HCP No. 12791, FRN 1224839 (urban rate documents), with Email from , Billing Manager, NSS, to Scott Madison, President, NSS (Aug. 9, 2013, 5:16 p m.). In addition to the same inconsistent spelling of the last name of the Comcast employee who purportedly issued the documents in question (Milder and Midler), the documents’ similarities include, among other things, the email address listed for the Comcast employee, the addresses for the locations where the services were to be received, the respective services provided (10 Mbps access, 50 Mbps access, and 100 Mbps access), the service rates and installation costs, term lengths, and trade insignia. See, e.g., Appendix E; Appendix F. 183 The 100 Mbps letter contained the “05/09/13” date as well as the “March 7, 2013” date that was also on the 100 Mbps letter submitted to USAC by South Sunflower on June 10, 2013. Compare FY2012, Form 466, HCP No. (continued….) Federal Communications Commission FCC 16-158 28 Comcast stated that it did not possess any documents concerning the email address for the person to whom NSS attributes these purported urban rate quotes—“Robyn@comcast.com.”194 In each of these four funding requests described above, urban rate documents were transmitted to USAC via interstate wire, either directly by NSS or indirectly through the HCPs after NSS furnished them.195 USAC, relying on these urban rate documents, issued FCLs and HSSs that authorized payments to NSS from the Fund, and USAC then transmitted USF payments to NSS, via interstate wire.196 As a result, NSS received a series of payments from the Fund that apparently relied on forged urban rate documents insofar as they were purportedly issued by Comcast and on the dates indicated on the sales quotes.197 80. As part of the Investigation, the Commission issued a subpoena to NSS and demanded supporting documentation for a number of the above-referenced urban rates, including HCPs South Sunflower and Hardy Wilson.198 Despite these specific demands for documents, NSS did not provide any documents supporting the urban rate forms that it submitted to USAC in connection to Hardy Wilson or South Sunflower. Additionally, none of the forms that relied on the urban rates discussed above have been corrected or withdrawn,199 nor have any of the USF payments that USAC disbursed to NSS in reliance upon this information been returned.200 81. Separate from submitting the apparently forged urban rate documents, NSS apparently also backdated other documents to make it appear as if the urban rates were available during the applicable funding year. For example, on August 5, 2013, Madison explicitly requested that “find a way to insert a date on the pdf document” and if so, to insert dates “for fund year 2012 as well as fund year 2013” because Madison was “[w]orking on an urban rate quote in this task.”201 Approximately three hours later, replied to Madison, “Here you go,” and attached two urban rate documents that were exactly the same except one displayed the date “May 21, 2013,” corresponding to FY2012 and the other “July 10, 2013,” corresponding to FY2013.202 194 Id. 195 See Appendix D. NSS’s transmission, and HCPs’ transmissions caused by NSS, of Form 466s and forged urban rate documents constitute interstate electronic and wire activity, as Form 466s and forged urban rate documents were transmitted electronically and by wire from NSS in Nevada and/or HCPs in Mississippi to USAC through USAC’s network servers located in Virginia. See also supra Section II. 196 See, e.g., FY2012, Form 466, HCP 15801, FRN 12267351 (June 22, 2013) and FY2012, Form 467, HCP No. 15801, FRN 12267351 (Dec. 4, 2013); see also FY2012, FCL, HCP No. 15801, FRN 12267351 (Dec. 3, 2013) and FY2012, HSS, HCP No. 15801, FRN 12267351 (Dec. 4, 2013). 197 Invoice spreadsheet for HCP No. 12791, FRN 1224839 and FRN 1338163; Invoice spreadsheet for HCP No. 16415, FRN 1347127; Invoice spreadsheet for HCP No. 15801, FRN 12267351. Information on file in EB-IHD-15- 0001913. 198 See FCC Subpoena to NSS, Attachment A, para. 2.o. (Nov. 12, 2015). 199 See Appendix D; see also FY2012, Form 466, HCP No. 15801, FRN 12267351 (June 22, 2013); FY2012, Form 466, HCP No. 12791, FRN 1224839 (June 10, 2013) and FY2013, Form 466, HCP No. 12791, FRN 1338163 (Feb. 1, 2014) and FY2013, Form 466, HCP No. 16415, FRN 1347127 (June 20, 2014). 200 USAC denied Tallahatchie’s request for funding based on its Form 466 submitted on December 20, 2012. See RHCD Portal Notice to HCP No. 10269, FRN 1337087 (July 24, 2014). Information on file in EB-IHD-15- 0001913. 201 Email from Scott Madison, President, NSS, to , Billing Manager, NSS (Aug. 5, 2013, 12:40 p.m.). 202 Email from , Billing Manager, NSS, to Scott Madison, President, NSS (Aug. 5, 2013, 3:54 p.m.). Federal Communications Commission FCC 16-158 32 to support its claims for payment from the Fund.222 As discussed above, we find these apparent violations began no later than 2012 and continue through the present as a result of NSS’s failure to correct the Form 466s that were filed in connection with these activities.223 Pursuant to Section 503(b)(1)(D), we further find that, in apparent violation of the wire fraud statute, NSS apparently willfully and repeatedly violated Title 18, United States Code, Section 1343, by forging urban rate documents and transmitting or causing these documents to be transmitted by interstate wires.224 As discussed above, for multiple years and continuing through the present, NSS apparently violated the Commission’s Rules and, as a direct result of these apparent violations, was awarded many contracts from HCPs and received millions of dollars in improper payments from the Fund.225 A. NSS Apparently Engaged in Competitive Bidding Practiced That Were Not Fair and Open in Order to Receive Contracts from HCPs in Violation of Rural Health Care Program Rules 89. As the Commission has repeatedly stated, competitive bidding rules are vital to ensuring that the USF is “used wisely and efficiently” and that HCPs “are aware of cost-effective alternatives” to limit waste, fraud and abuse of the Fund. 226 Fundamental to this is the Commission’s consistent requirement that the competitive bidding process for services supported by the RHC Program be fair and open, and that no bidders receive an unfair advantage.227 As service providers have long been aware, the Commission will take action against those that seek to secure an unfair advantage in competing for 222 See 47 CFR §§ 54.603, 54.605, 54.607, 54.609, 54.613, 54.615. 223 See Purple Communications, Inc., Forfeiture Order, 30 FCC Rcd 14892 (2015) (Purple); BellSouth Telecommunications, LLC, d/b/a AT&T Southeast, Notice of Apparent Liability for Forfeiture, FCC 16-98, para. 67 (July 7, 2016) (BellSouth NAL); Total Call Mobile, Inc., Notice of Apparent Liability for Forfeiture and Order, 31 FCC Rcd. 4191, paras. 81, 89 (2016); Purple Communications, Inc., Notice of Apparent Liability for Forfeiture, 29 FCC Rcd 5491, 5506, n.87 (2014) (Purple NAL); VCI Company, Notice of Apparent Liability for Forfeiture and Order, 22 FCC Rcd 15933, 15940, para. 20 (2007). 224 See 18 U.S.C. § 1343; 47 U.S.C. § 503(b)(1)(D). 225 We observe the duty of the HCPs to be cost-effective and comport themselves with the rules of the RHC Program. We acknowledge the participation of certain HCPs and at least one employee of a facilities-based telecommunications carrier in the conduct at issue. Nevertheless, we need not reach the issue of their conduct given the fault by NSS violating the Commission’s Rules. Therefore, in our discretion, we do not propose forfeiture penalties against the facilities-based telecommunications carriers and HCPs identified herein. See, e.g., Federal- State Joint Board on Universal Service; Changes to the Board of Directors for the National Exchange Carrier Association, Inc.; Schools and Libraries Universal Service Support Mechanism, Order on Reconsideration and Fourth Report and Order, 19 FCC Rcd 15252, 15255-57, paras. 10-15 (2004) (Schools and Libraries Fourth Report and Order) (directing USAC to pursue recovery actions against the party or parties that violated the Commission’s rules); Request for Review of the Decision by the Universal Service Administrator by Bell South Telecommunications, Inc. and Union Parish School Board; Schools and Libraries Universal Service Support Mechanism, CC Docket No. 02-6, Order, 27 FCC Rcd 11208 (Wireline Comp. Bur. 2012) (Bell South Order) (seeking recovery of funding from the party that violated the Commission’s Rules). 226 See Federal-State Joint Board on Universal Service First Report and Order, Report and Order, 12 FCC Rcd. 8776, 9133-34, paras. 686, 688 (1997). 227 See id.; see also 47 CFR §§ 54.601, 54.603, 54.615; Rural Health Care Support Mechanism, Report and Order, 27 FCC Rcd. 16678, 16778, paras. 229-230 (2012); cf. Schools and Libraries Universal Service Support Mechanism, Third Report and Order and Second Further Notice of Proposed Rulemaking, 18 FCC Rcd. 26912, 26939, para. 66 (2003) (Schools and Libraries Third Report and Order) (stating that a fair and open competitive bidding process is critical to preventing waste, fraud, and abuse of program resources). Federal Communications Commission FCC 16-158 33 contracts supported by the USF or otherwise engage in conduct that threatens to damage the integrity of USF programs in violation of the Commission’s Rules.228 90. The Investigation has uncovered that NSS obtained multiple contracts from HCPs for services supported by the Fund as a result of competitive bidding practices that were not fair and open in various ways and, in doing so, apparently violated several of the Commission’s Rules. 1. NSS Apparently Received Commitments from HCPs to Provide Telecommunications Services Prior to the Expiration of the 28-Day Period and, in Some Instances, Before the Form 465 Was Even Posted, in Violation of Section 54.603 of the Commission’s Rules 91. The Commission’s Rules provide that telecommunications services to rural HCPs may be supported by the Fund only if those services are procured through a competitive bidding process.229 The Commission’s Rules further require HCPs to only “mak[e] commitments” with service providers after 28 days following USAC’s posting of Form 465s soliciting bids.230 NSS acted in concert with HCPs to reach agreements in principle, and to make commitments to award contracts to NSS prior to the expiration of the 28-day waiting period, and in some cases even prior to USAC’s posting of a Form 465 soliciting bids.231 92. For example, NSS apparently obtained commitments from HCP Tallahatchie before Tallahatchie filed its Form 465 for FY2013.232 In this instance, Madison ordered the underlying service from AT&T for Tallahatchie before USAC posted the Form 465 for FY2013 and therefore prior to the expiration of the 28-day waiting period.233 NSS’s representative also emailed Madison more than three months prior to the posting of the Form 465 stating that s/he “ha[s] been assured” that Tallahatchie would award NSS its contract.234 NSS apparently advised Tallahatchie to ignore a bid from an NSS competitor, which was approximately 20 percent of the cost NSS charged the Fund for substantially similar services.235 228 See id. The Commission’s fair and open competitive bidding requirements date back to the inception of the USF and have always applied to service providers. In July 1997, the Commission granted a limited waiver to the competitive bidding rules for contracts signed before the competitive system became fully operational, noting that the exemption applied to “schools, libraries, and service providers.” Federal-State Joint Board on Universal Service, Order on Reconsideration, 12 FCC Rcd. 10095, 10098, paras. 9-10 (1997). In December 1997, the Commission extended the rules regarding support for existing contracts to the rural health care program to “reduce potential confusion on the part of program participants and providers.” Federal-State Joint Board on Universal Service, Fourth Order on Reconsideration 13 FCC Rcd. 2372, 2445, para. 219 (1997). Service providers have been on notice that funding commitments resulting from contracts awarded in violation of the competitive bidding rules will be rescinded and the disbursed funds recovered. In 2007, the Commission noted that “the danger of waste, fraud, and abuse by service providers is as great as the danger of such conduct by rural health care providers” and advised that “funds disbursed from the rural health care support mechanism in violation of a Commission rule that implements the statute or a substantive program goal will be recovered and that sanctions, including enforcement actions would be appropriate in cases of waste, fraud, and abuse…”. In the Matter of Comprehensive Review of the Universal Service Fund Management, Administration, and Oversight, Report and Order, 22 FCC Rcd. 16372, 16385-86, paras. 26, 30 (2007) (Comprehensive Report and Order). 229 47 CFR § 54.601(c)(1). 230 47 CFR § 54.603(b)(3). 231 See supra Section III.A. 232 See id. 233 See id. 234 See id. 235 See id. Federal Communications Commission FCC 16-158 34 93. Likewise, HCP Bond made commitments to NSS prior to the time Bond filed and USAC posted its revised Form 465 in August 2013, and agreed in principle to award its contract to NSS without considering other potential competing bids.236 Indeed, it appears Bond’s putatively competitive bidding process for its revised Form 465 was illusory, with NSS having already “won” Bond’s contract pursuant to the June 2013 Form 465. 2. NSS Created Post Facto Bid Matrices to Apparently Deceive USAC and the Commission into Believing that Competitive Bidding Processes were Fair and Open, in Violation of Sections 54.603 and 54.615 of the Commission’s Rules 94. Sections 54.603 and 54.615 of the Commission’s Rules require HCPs to select “the most cost-effective method” in response to their Form 465s, which is “the method that costs the least after consideration of the features, quality of transmission, reliability, and other factors that the health care provider deems relevant to choosing a method of providing the required health care services.”237 To assess the various bids HCPs receive, HCPs are encouraged to create bid matrices that weigh price, service, and other factors as articulated by the Commission’s Rules to evaluate which bidder is the most cost-effective and therefore which bidder should be awarded the contract.238 Therefore, if bid matrices are used, they should be prepared and studied by HCPs prior to the time they award contracts in response to multiple bids, and not after the contract was awarded, which inherently defeats the purpose of a bid matrix in its entirety. A bid matrix created after the contract award and in concert with the selectee renders the evaluation process meaningless. By creating bid matrices only after NSS was awarded contracts and USAC required documentation justifying NSS’s selection, NSS coordinated with HCPs to deceive USAC and the Commission into believing that NSS won contracts as a result of fair and open competitive bidding, when this was not the case.239 95. In order to assess whether NSS won contracts as a result of competitive bidding that complied with the Commission’s Rules, USAC requested that HCPs Texoma, SCRMC, and East Central explain the criteria they used to select NSS. These HCPs, with NSS’s substantial assistance, responded to USAC’s requests by producing what were represented as bid matrices used by HCPs to objectively weigh the various factors to determine which bidder was most cost-effective.240 The bid matrices sent to USAC in response to these requests were not part of the HCPs’ evaluation processes but were prepared and sent to USAC only after such documents were requested by USAC—well after the contracts were already awarded to NSS.241 These documents were apparently constructed to give USAC and the Commission the false impression that they were generated contemporaneously with the bid review process, and that NSS was awarded contracts only after an objective analysis by HCPs as memorialized by the bid matrices. 96. NSS received contracts from HCPs and funds from the USF as a result of a competitive bidding process that was not fair and open in apparent violation of the Commission’s Rules due to NSS’s substantial role in the preparation of post facto bid matrices for HCPs Texoma and East Central.242 236 See id. 237 47 CFR §§ 54.603(b)(4), 54.615(c)(7). 238 See id. 239 See supra Section III.A. 240 See id. 241 See id. 242 See id. Federal Communications Commission FCC 16-158 37 employees and representatives, including Madison, regularly discussed how high of a markup NSS could charge HCPs and the Fund, as high as 1100 percent above what NSS paid to procure the underlying service, divorced from the requirements of the Commission’s Rules to calculate the rural rate.259 Witnesses described “eye-popping” rates NSS was charging HCPs and the Fund, and directed HCPs to only focus on the portion the HCPs were responsible for paying, highlighting the limited concern NSS has for the Fund.260 This is particularly the case where NSS, as frequently occurred, merely “re-billed” services it purchased from facilities-based service providers without providing (or providing minimal) additional value-added services.261 104. Here too, we see the interconnection of NSS’s scheme. NSS and its representatives used the company’s unique relationship with AT&T AM-1 to cultivate relationships with HCPs that allowed NSS to charge markedly inflated rural rates and earn the trust of HCP employees to do so.262 By misrepresenting to the HCPs the actual cost of the services through its use of “please pay” amounts versus the significantly higher amounts invoiced to the Fund through USAC,263 NSS was able to improperly inflate the rural rates charged to HCPs and supported by the Fund. NSS’s rural rate inflation is further evidenced by the disparate amounts charged by NSS where an HCP has funded and unfunded sites. NSS rebilled HCPs approximately 75 percent less for services it procured from facilities-based carriers when those services not supported by the Fund.264 C. NSS Apparently Violated the Commission’s Rules Through Its Use of Apparently Forged and False Documents to Improperly Increase Payments Received from the Fund 105. As outlined above, the Investigation uncovered evidence that NSS submitted and caused HCPs to submit apparently forged and false documents to increase the amount of money NSS obtained from the Fund. 106. The Commission’s Rules mandate how service providers are to calculate urban rates. If the rural site is located within the standard urban distance,265 “the urban rate for that service shall be a rate no higher than the highest tariffed or publicly available rate charged to a commercial customer for a functionally similar service in any city with a population of 50,000 or more in that state, calculated as if it were provided between two points within the city.”266 If the rural site is located beyond the standard urban distance, “the urban rate for that service shall be a rate no higher than the highest tariffed or (Continued from previous page) Companies to , Director of Business Development, NSS, , Partner, Regional Sales Companies (Nov. 18, 2013, 11:22 a m.) (“I understand this, but how did you come up with this number? Is this just a fictional number you made up or what is the guidelines to it?”). 259 See Emails between Scott Madison, President, NSS, , Director of Business Operations, NSS, and , Director of Business Development, NSS (July 18, 2014) (discussing NSS’s proposed 1147 percent profit margin over the cost of obtaining the underlying services). 260 See supra Section III.B. 261 See id. 262 See id. 263 See id. 264 See id. 265 “The ‘standard urban distance’ for a state is the average of the longest diameters of all cities with a population of 50,000 or more within the state.” 47 CFR § 54.605(c). 266 47 CFR § 54.605(a). Federal Communications Commission FCC 16-158 38 publicly-available rate charged to a commercial customer for a functionally similar service provided over the standard urban distance in any city with a population of 50,000 or more in that state.”267 107. As with its rural rates, NSS’s determinations of urban rates apparently are not calculated in the manner required by the Commission’s Rules. There is no evidence before the Commission that NSS ascertained the highest tariffed or publicly available rates charged to commercial customers for functionally similar services for every urban rate it proffered to HCPs, USAC, and the Commission.268 Instead, NSS has apparently engaged in a widespread scheme to use apparently false and misleading urban rates to underpin its claims for funds from the USF. 1. NSS Apparently Violated the Commission’s Rules Through Its Use of Apparently Forged Urban Rate Documents, in Violation of Sections 54.605, 64.609, and 54.613 of the Commission’s Rules 108. NSS and its representatives appear to have manually applied Comcast’s trade insignia to documents NSS, its employees, and representatives created to give the false impression that they were actually issued by Comcast.269 The record before the Commission demonstrates that Comcast did not issue these sales quotes, as established by the fact that Comcast provided a sworn declaration that the individuals that purportedly issued the Comcast sales quotes were neither employed by nor affiliated with Comcast at any point, nor did their putative employee email address even exist.270 When NSS was served with a Commission subpoena seeking documents that supported its purported urban rates, NSS did not produce any responsive documents271—and indeed could not do so because apparently such documents do not exist. In addition, the record demonstrates that NSS’s employees backdated and post-dated certain documents at Madison’s direction.272 2. NSS Apparently Violated the Commission’s Rules When It Falsely Represented that the Urban Rate for Certain Services Was $138.00 Per Month, in Violation of Sections 54.605, 64.609, and 54.613 of the Commission’s Rules 109. In addition to its use of apparently forged sales quotes as urban rate documents, NSS submitted letters containing misrepresentations on its own letterhead in order to support the urban rates listed on Form 466s filed by the HCPs it serviced.273 In these letters, NSS asserted that the urban rate for different services in different cities, as outlined in Appendix A, were all $138.00 per month and proffered such letters in at least 83 instances.274 The Commission sought to corroborate the rates with the underlying service provider identified in NSS internal documents. In response to a Commission subpoena, the service provider was not able to produce any responsive documents showing that these different services in different cities were ever offered to commercial customers at $138.00 per month.275 The Commission also issued a subpoena to NSS for the documents that supported its assertions that these services in urban areas cost $138.00 per month. However, as with the apparently forged sales quotes, the 267 47 CFR § 54.605(b). 268 See supra Section III.B. 269 See supra Section III.C. 270 See id. 271 See id. 272 See id. 273 See id. 274 See id. 275 See id. Federal Communications Commission FCC 16-158 39 supporting documents apparently do not exist. NSS did not produce responsive documents to support its urban rate letters, and NSS’s own Compliance Specialist stated that USAC regarded them as “ ”276 D. NSS Apparently Committed Wire Fraud 110. Pursuant to Section 503(b)(1)(D) of the Act, we find that NSS apparently knowingly, willfully, and with reckless indifference to the truth violated the federal wire fraud statute (18 U.S.C. § 1343). Congress has authorized the Commission to assess a forfeiture penalty for such violations. Specifically, Section 503(b)(1)(D) states that the Commission may propose a forfeiture against a person that the Commission has determined violated “any provision of section . . . 1343 . . . of title 18.”277 The Commission’s Rules further provide that a “forfeiture penalty may be assessed against any person found to have . . . [v]iolated any provision of section . . . 1343 . . . of Title 18, United States Code.”278 111. Section 1343 provides that a violation of the wire fraud statute occurs when a person: having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice.279 112. A finding that wire fraud has occurred “requires proof of (1) a scheme to defraud; and (2) the use of an interstate wire communication to further the scheme.”280 “The essence of a scheme is a plan to deceive persons as to the substantial identity of the things they are to receive in exchange. A pattern of deceptive conduct may show the existence of a plan, scheme or artifice.”281 Where one scheme involves several wire communications or mailings, “the law is settled that each mailing [or wire communication] constitutes a violation of the statute.”282 The use of mail or interstate wires to effectuate the fraudulent scheme “need not be an essential element of the scheme;” instead, it is “sufficient for the mailing [or the use of the interstate wire] to be incident to an essential part of the scheme or a step in the plot.”283 One need not have used the wires themselves in the scheme to defraud; instead, culpability may arise from having caused the wires to be used.284 276 See id. 277 47 U.S.C. § 503(b)(1)(D). 278 47 CFR § 1.80(a)(5). See also KHTK (FM), Notice of Apparent Liability, DA 92-1064, 7 FCC Rcd 5108, 5109 (Mass Media Bur. 1992) (finding licensee apparently liable for a forfeiture under Section 503(b) of the Act based on a violation of wire fraud under 18 U.S.C. § 1343). 279 18 U.S.C. § 1343. 280 United States v. Maxwell, 920 F.2d 1028, 1035 (D.C. Cir. 1990); see also United States v. Pollack, 534 F.2d 964, 971 (D.C. Cir. 1976). 281 United States v. Brien, 617 F.2d 299, 307 (1st Cir. 1980) (citations omitted). 282 United States v. Philip Morris USA, Inc., 566 F.3d 1095, 1116 (D.C. Cir. 2009) (citations omitted); see also United States v. Sum of $70,990,605, 4 F. Supp. 3d 189, 201 n.9 (D.D.C. 2014) (“Because the mail and wire fraud statutes are similar, cases construing mail fraud apply to the wire fraud statute as well.”) (internal quotations omitted). 283 Schmuck v. United States, 489 U.S. 705, 710 (1989) (citations, quotations, and punctuation omitted). 284 See Pereira v. United States, 347 U.S. 1, 8 (1954) (“To constitute a violation of these provisions, it is not necessary to show that petitioners actually mailed or transported anything themselves; it is sufficient if they caused it to be done.”); United States v. Lemire, 720 F.2d 1327, 1334 n.6 (D.C. Cir. 1983) (“[C]ases construing mail fraud apply to the wire fraud statute as well.”). Federal Communications Commission FCC 16-158 40 113. An intent to defraud includes an act undertaken “willfully and with specific intent to deceive or cheat, ordinarily for the purpose of either causing some financial loss to another or bringing about some financial gain to one’s self.”285 “The requisite intent under the federal mail and wire fraud statutes may be inferred from the totality of the circumstances and need not be proven by direct evidence.”286 Fraudulent intent may be “shown if a representation is made with reckless indifference to its truth or falsity,”287 as well as a victim’s reliance on the misrepresentations made by the perpetrator.288 114. We find that NSS apparently knowingly, willfully, and with reckless indifference to the truth violated Title 18, United States Code, Section 1343 by transmitting forged documents containing false information through interstate wire, and causing HCPs to transmit forged documents containing false information to USAC through interstate wire, in furtherance of a scheme to defraud, resulting in USAC disbursing via interstate wire USF support to which NSS was not entitled.289 The purpose of these apparently forged urban rate documents was to increase the amount of support NSS received from the Fund as a result of the RHC Telecommunications Program’s funding formula, in which payments are calculated by determining the difference between the higher cost of providing services in a rural area and the lower cost of providing the same services in an urban area. 115. As detailed above and in Appendix D, on no less than five occasions, NSS supplied HCPs with forged documents purportedly issued by Comcast and which contained false material information related to urban rates that the HCPs subsequently electronically transmitted to USAC. The Investigation revealed that Madison directed an NSS employee to backdate the forged urban rate documents to correspond to “2012 funding support,” and the employee gave Madison three forged Comcast sales quotes bearing the date of “05/09/13,” which corresponded to FY2012. 290 At least one of these three forged and backdated Comcast sales quotes was transmitted to USAC as documentation of the urban rate in support of a funding request for FY2012.291 As demonstrated by Comcast’s response to the Bureau’s LOI, Comcast did not issue any of these urban rate documents, did not offer the telecommunications services at the prices listed in the documents, and had no record of “Robyn Midler” or “Robyn Milder,” who purportedly issued the documents on Comcast’s behalf, being a Comcast employee, independent contractor, agent, or other representative.292 Additionally, a plain review of all of 285 United States v. Lemire, 720 F.2d 1323, 1341 (D.C. Cir. 1983). 286 United States v. O’Connell, 172 F.3d 921 (D.C. Cir. 1998); see also United States v. Alston, 609 F.2d 531, 538 (D.C. Cir. 1979). 287 United States v. Cusino, 694 F.2d 185, 187 (9th Cir. 1982); see also United States v. Kennedy, 714 F.3d 951, 958 (6th Cir. 2013); United States v. Jackson, 524 F.3d 532 (4th Cir. 2008); United States v. DeRosier, 501 F.3d 888, 897–98 (8th Cir. 2007). 288 United States v. Wynn, 684 F.3d 473 (4th Cir. 2012). 289 USAC’s network servers are currently located in Virginia. The apparently forged urban rate documents concern HCPs located in Mississippi and may have been transmitted by NSS to certain consultants located in Kentucky and Connecticut, who then transmitted these apparently forged documents to USAC. NSS’s principal place of business is located in Nevada. As a result, all Form 466s that rely on forged urban rate documents and data transmissions by NSS of the forged urban rate documents were the result of interstate electronic and wire activity. Additionally, USF payments made by USAC in reliance upon these apparently forged documents and false information were sent to NSS via interstate wire. 290 Email from , Billing Manager, NSS, to Scott Madison, President, NSS (Aug. 9, 2013, 5:16 p.m.). See also Appendix E; Appendix F; Appendix G. 291 See Invoice spreadsheet for South Sunflower, FY 2012, HCP No. 12791, FRN 1224839, on file in EB-IHD-15- 0001913. 292 See supra Section III.C. Federal Communications Commission FCC 16-158 43 decisions related to the hiring and terminating of NSS employees and outside contractors were made at Madison’s sole discretion.307 123. Madison also personally directed or was otherwise intimately involved in much of the apparently improper conduct described above. For example, he apparently directed and assisted in the preparation of post facto bid matrices for Texoma, SCRMC, and East Central.308 Madison also had contemporaneous knowledge that NSS apparently furnished a $10,000 gift to Texoma to induce a contract award.309 NSS, which Madison controlled, then received USF funding in connection with that contract.310 Madison later sought to explain that the gift was furnished by a rogue employee.311 Further, Madison apparently knew that both the $138.00 urban rate letters and forged Comcast quotes were invalid and permitted NSS to submit these documents in support of its claims for USF support in no less than 83 instances.312 All of the apparently false $138.00 urban rate letters on NSS letterhead bear Madison’s signature and title.313 backdated the date on an apparently forged Comcast sales quote at Madison’s direction.314 These facts demonstrate that NSS and Madison shared a common identity and that Madison exercised dominant control over decision making and financial authority within NSS. 124. Furthermore, holding Madison personally liable is necessary to preserve the integrity of the Communications Act and to prevent entities such as NSS from defeating the purpose of statutory provisions and the Commission’s Rules. Telecommunications providers must respect the RHC Program’s competitive bidding and rate rules to prevent waste, fraud, and abuse. The failure to hold Madison responsible for the forfeiture penalty described in this NAL would establish a loophole in our Rules, which are aimed to achieve compliance, enforcement, and the recovery of improper payments for conduct that violates our Rules.315 125. Section 503(b)(1) of the Act specifies that “[a]ny person who is determined by the Commission … to have willfully or repeatedly failed to comply with any of the provisions of [the] Act or [Commission] rule . . . shall be liable . . . for a forfeiture penalty.”316 In these circumstances, we are entitled to look through NSS’s corporate structure to prevent Madison from using a corporate entity to circumvent these statutory directives and the Commission’s Rules. 126. Accordingly, we find that NSS apparently willfully and repeatedly violated Sections 54.603, 54.605, 54.607, 54.609, 54.613, and 54.615 of the Commission’s Rules. Furthermore, pursuant to Section 503(b)(1)(D) of the Act,317 we find that NSS apparently violated the wire fraud statute. We find accordingly that NSS and Scott Madison are for legal purposes one and the same, and are jointly and severally liable for the resulting forfeiture. 307 See Emails between Scott Madison, President, NSS and , Director of Business Operations, NSS (Aug. 16-18, 2014). 308 See supra Section III.A.2. 309 See supra Section III.A.3. 310 Id. 311 Id. 312 See supra Section III.C; Appendix C; Appendix D. 313 See supra Section III.C.1. 314 See Appendix E, Appendix F, Appendix G. 315 Id. 316 47 U.S.C. § 503(b)(1) (emphasis added). “The term ‘person’ includes an individual, partnership, association, joint-stock company, trust, or corporation.” 47 U.S.C. § 153(39). 317 47 U.S.C. § 503(b)(1)(D). Federal Communications Commission FCC 16-158 44 V. PROPOSED FORFEITURE 127. For the violations at issue here, Section 503(b)(2)(B) of the Act authorizes the Commission to assess a forfeiture penalty against a telecommunications carrier of up to $189,361 for each violation or each day of a continuing violation, up to a statutory maximum of $1,893,610 for a single act or failure to act.318 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. In determining the appropriate forfeiture amount, we consider 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,”319 as well as our forfeiture guidelines.320 128. Deterring the conduct outlined here and the importance of preserving the Fund for the critical mission of the RHC Program are of paramount importance to the Commission. In developing an appropriate forfeiture, we are mindful that this is the first NAL issued in connection with the RHC Program. The Commission must propose significant forfeitures when—such as here—a service provider apparently presents forged and false rate documents that are the basis of its claims for universal service support, receives proprietary information at the exclusion of other market participants, engages in a relationship with facilities-based providers and HCPs that results in a competitive bidding process that was neither fair nor open, and comes to agreements in principle with HCPs to receive contracts under the RHC Program even before the request for bids is made public. This apparent conduct undermines the fundamental operation of the RHC Program, and therefore warrants a significant proposed forfeiture. 129. Based on the facts and record before us, we have determined that NSS’s apparent violations involve: (i) receiving numerous contracts for services as a result of competitive bidding that was not fair and open, including one instance in which a $10,000 network server was provided to the HCP; (ii) the preparation and transmittal of apparently forged and false urban rate documents; (iii) the filing of invoices with USAC that contained inflated rural rates; and (iv) wire fraud. We find these apparent violations occurred, at a minimum, beginning in 2012 and continued through the present as a result of NSS’s failure to take actions that would have corrected the forms that were filed in connection with these activities.321 318 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) ($100,000 per violation or per day of a continuing violation and $1,000,000 per any single act or failure to act). The Federal Civil Penalties Inflation Adjustment Act of 1990, Pub. L. No. 101-410, 104 Stat. 890, as amended by the Debt Collection Improvement Act of 1996, Pub. L. No. 104-134, Sec. 31001, 110 Stat. 1321 (DCIA), requires the Commission to adjust its forfeiture penalties periodically for inflation. See 28 U.S.C. § 2461 note (4). The Commission most recently adjusted its penalties to account for inflation in 2016. See Amendment of Section 1.80(b) of the Commission’s Rules, Adjustment of Civil Monetary Penalties to Reflect Inflation, DA 16-644, 2016 WL 3218781 (Enf. Bur. 2016) (ordering inflation adjustments effective July 1, 2016 and for those penalties assessed after July 1, 2016). NSS filed an FCC Form 499 with the Commission in which it described its principal communications function as Toll Reseller. See FCC Form 499, Network Services Solutions, LLC (filer ID 825703). Toll resellers are common carriers for penalty purposes. See, e.g., Cardinal Broadband LLC, Notice of Apparent Liability for Forfeiture, 23 FCC Rcd. 12233 (Enf. Bur. 2008); Telrite Corp., Notice of Apparent Liability for Forfeiture, 23 FCC Rec. 7231 (2008). 319 47 U.S.C. § 503(b)(2)(E). 320 See 47 CFR § 1.80(b)(8); Note to Paragraph (b)(8): Guidelines for Assessing Forfeitures. 321 See Purple Communications, Inc., Forfeiture Order, 30 FCC Rcd 14892 (2015) (Purple); BellSouth Telecommunications, LLC, d/b/a AT&T Southeast, Notice of Apparent Liability for Forfeiture, FCC 16-98, para. 67 (July 7, 2016) (BellSouth NAL); Total Call Mobile, Inc., Notice of Apparent Liability for Forfeiture and Order, 31 FCC Rcd. 4191, paras. 81, 89 (2016); Purple Communications, Inc., Notice of Apparent Liability for Forfeiture, 29 FCC Rcd 5491, 5506, n.87 (2014) (Purple NAL); VCI Company, Notice of Apparent Liability for Forfeiture and Order, 22 FCC Rcd 15933, 15940, para. 20 (2007). Federal Communications Commission FCC 16-158 45 130. In accordance with Commission precedent for penalties assessed for violations of the Commission’s Rules across USF programs, we propose a forfeiture against NSS as follows: (1) a base forfeiture of $20,000 for each instance in which NSS filed or assisted HCPs in filing Form 466s to USAC or the Commission that contained false information;322 and (2) an upward adjustment of the base forfeiture equal to three times the total amount improperly received or requested by NSS. Additionally, in light of the egregious nature of NSS’s conduct, certain additional upward adjustments are warranted. 131. For the conduct described above, as outlined in Appendix B, NSS submitted or caused HCPs to submit 175 improper Form 466s that contained apparently false information.323 Of these, 88 Form 466s are associated with NSS’s violations of the Commission’s competitive bidding rules; and 87 Form 466s are associated with NSS’s violations of the Commission’s Rules governing urban rates. The proposed forfeiture penalty is calculated accordingly. 132. As further described below, in total, we propose a forfeiture penalty of $21,691,498.85 for NSS’s apparent violations.324 A. Proposed Forfeiture Amount for NSS’s Conduct in Apparent Violation of the Commission’s Competitive Bidding Rules 133. The Commission’s Rules require service providers to participate in, and obtain contracts from HCPs as a result of, fair and open competitive bidding. When service providers such as NSS receive contracts as a result of improper conduct in the bidding process such as competitive bidding that is not fair and open, they receive reimbursement from the Fund to which they are not entitled—even where there are no other bidders for a given Form 465 request for bids. Without the requisite level playing field and transparency mandated by the Commission’s Rules, the RHC Program would be susceptible to fraud, inside dealing, and market manipulation. Such an outcome would present a severe threat to the continued functioning of the RHC Program and would prevent it from serving its fundamental purpose of allowing rural health care facilities to enjoy the same advances in telecommunications technology so critical to 21st century medicine as their urban counterparts. 134. In total, the Investigation uncovered evidence that demonstrates that NSS apparently violated the Commission’s Rules and Orders requiring fair and open competitive bidding in the RHC Program, and that 88 of the 175 total Form 466s at issue here resulted in or caused false information to be 322 See, e.g., Budget Prepay, Inc., Notice of Apparent Liability for Forfeiture, 29 FCC Rcd 2508, 2513 (2014). In Budget Prepay, the Commission imposed a three-part forfeiture for Lifeline violations: (1) a base forfeiture of $20,000 for each instance in which an ETC files an FCC Form 497 that includes ineligible subscribers; (2) a base forfeiture of $5,000 for each ineligible subscriber for whom the ETC requests and/or receives support; and (3) an upward adjustment of the base forfeiture equal to three times the reimbursements requested and/or received by the ETC for ineligible subscribers. While we draw on the overall structure of that framework, the calculation related to the number of ineligible subscribers is not applicable in the Rural Health Care Program context and we do not utilize it here. See also VCI Company, Notice of Apparent Liability for Forfeiture, 22 FCC Rcd 15933, 15940 para. 18 (2007) (“Accordingly, we establish $20,000 per form as the base forfeiture amount for the filing of inaccurate requests for reimbursement under the low-income program, in violation of sections 54.407(c) and 54.413(b) of the Commission’s rules.”). On each Form 466, representatives from HCPs certify that “the HCP . . . that I am representing satisfies all the requirements herein and will abide by all the relevant requirements, including all applicable FCC rules,” and specifically references the relevant regulation governing fair and open competitive bidding in the RHC Program. See Form 466, box 47 (citing 47 CFR § 54.603). The Investigation demonstrates that NSS was intimately involved in the preparation, drafting, and execution of Form 466s by HCPs. Even in those instances where NSS did not “guide” HCPs in the preparation, drafting, and execution of these forms, the urban and rural rates contained in each Form 466 can only be provided by the service provider, as that information is not readily ascertainable by the HCP. 323 Each of the entries in Appendix B relates to a single Form 466, therefore totaling 175 entries. 324 This proposed forfeiture is less than the statutory maximum allowed for the continuing violations cited in this NAL. Federal Communications Commission FCC 16-158 46 transmitted to USAC and the Commission. We apply a base forfeiture of $20,000 per form to each of these 88 Form 466s, for a total base forfeiture of $1,760,000. 135. The loss to the Fund as a result of contracts NSS received in apparent violation of the Commission’s Rules governing competitive bidding in the RHC Program for HCPs Bond, Weems, Texoma, and East Central is $1,298,480.74.325 Therefore, we propose an upward adjustment of the base forfeiture equal to three times the amount NSS improperly received from the Fund, or $3,895,442.22, for a total proposed forfeiture amount of $5,655,442.22 for NSS’s apparent violations of the Commission’s Rules governing competitive bidding. B. Proposed Forfeiture Amount for NSS’s Apparent Violations of the Commission’s Rules Governing Urban Rates 136. The various submissions of apparently false documents as the basis for NSS’s claims from the Fund are egregious acts of misconduct, and the Commission proposes a commensurate forfeiture. The Commission, in the RHC Program and elsewhere, relies on program participants to act with integrity in submitting claims for support from the Fund. 137. Therefore, the Commission proposes (1) a base forfeiture of $20,000 for each Form 466 for which NSS provided apparently false rate documents, or for which an HCP relied on apparently false rates as the basis of NSS’s claims from the Fund; (2) an upward adjustment of the base forfeiture equal to three times the amount NSS improperly received from the Fund as a result of its misconduct; and (3) an additional upward adjustment of $1,893,610 for each apparently forged document NSS filed, transmitted, or relied on as the basis of its claims for USF funding. 138. The record before the Commission shows that 87 of the 175 Form 466s at issue here contain apparently false information from NSS, either where NSS submitted apparently forged Comcast sales rate quotes or relied on urban rate documents bearing false rates of $138.00 for telecommunications services. We apply a base forfeiture of $20,000 per form to each of these 87 Form 466s, for a total base forfeiture of $1,740,000.326 NSS received $2,204,085.21 from the Fund as a result of this conduct, and we accordingly propose an upward adjustment to $6,612,255.63. 139. Furthermore, in at least four instances in which NSS purposefully submitted apparently forged Comcast sales quotes as urban rate documentation to increase its amount of funding from the USF, NSS acted with complete disregard of the RHC Program Rules. The Commission therefore proposes an additional upward adjustment of $1,873,610 for each of the four Form 466s at issue, for an additional forfeiture of $7,494,440.327 140. We propose a forfeiture amount of $15,926,695.63 related to NSS’s false urban rate violations, resulting from a combination of the $1,740,000 base forfeiture for the form 466s supported by false information, the upwardly adjusted forfeiture of $7,494,440 for the four Form 466s supported by forged urban rate documents, and the upwardly adjusted forfeiture of $6,612,255.63 for the loss to the Fund. 325 Neither the base forfeiture nor the loss to the Fund calculations include any FY2013 Form 466s filed by HCPs Tallahatchie, SCRMC, Weems, or East Central. See supra Section III.A.1 (Tallahatchie); Section III.A.2 (SCRMC and East Central); Section III.A.4 (Weems). 326 See supra Section III.C.2; Appendix C. See also supra Section III.C.1 (HCPs South Sunflower, Hardy Wilson, and FGH/MGH); Appendix D. Neither the base forfeiture nor the loss to the Fund calculations include the FY2013 Form 466 filed by HCP Tallahatchie. See supra Section III.C.1. 327 See Appendix D. These particular penalties are proposed for NSS’s use of forged urban rate documents in apparent violations of RHC Program Rules, specifically 47 CFR §§ 54.605, 54.609, and 54.613. Because we include a base forfeiture of $20,000 per form for each of the four urban rate documents, we upwardly adjust to $1,873,610 per form for an additional forfeiture. Federal Communications Commission FCC 16-158 47 C. Proposed Forfeiture Amount for NSS’s Apparent Violation of the Wire Fraud Statute Pursuant to Section 503(b)(1)(D) 141. In accordance with our Rules,328 the Commission proposes a base forfeiture of $5,000 for NSS’s single apparent violation of wire fraud pursuant to Section 503(b)(1)(D).329 In light of the egregiousness of NSS’s conduct in using apparently forged urban rate documents in furtherance of its scheme to defraud, and causing USAC to utilize interstate wires to transmit USF payments to NSS in reliance upon forged documents, a substantial upward adjustment is warranted. Therefore, we propose an upward adjustment of $189,361, which is the statutory maximum for non-continuing violations. VI. CONCLUSION 142. In sum, considering NSS’s competitive bidding violations, urban rate violations, as well as NSS’s violation of the wire fraud statute, we propose a total forfeiture penalty of $21,691,498.85. 143. In addition to assessing a forfeiture, we also believe it is appropriate to order that NSS repay the amounts improperly overpaid by the Fund as a result of NSS’s apparent violations, and plan to order a recovery of those disbursements at the forfeiture stage if we conclude that NSS has violated the Commission’s Rules and Orders. The Commission has stated that “funds disbursed from the . . . rural health care support mechanism[ ] in violation of a Commission rule that implements the statute or a substantive program goal should be recovered.”330 To be clear, an erroneous or illegal overpayment from the Fund must be recouped.331 We have a duty to recover those misspent funds, and if payment is not received by the Commission as demanded, we have an inherent right to collect332 by exercising available legal procedures.333 Accordingly, NSS is apparently responsible for returning the RHC Program funds it received while in violation of the Commission’s Rules. 144. Recovery of such funds is not barred by the passage of time.334 The Commission stated that funding disbursed in violation of a statute or a rule that implements the statute or a substantive 328 See 47 CFR § 1.80, Section I (Base Amounts for Section 503 Forfeitures). 329 See Appendix D. We note that NSS caused USAC to utilize interstate wires to transmit a USF support payment to NSS related to HCP Hardy Wilson on or about November 6, 2015. 330 Comprehensive Review of the Universal Service Fund Management, Administration, and Oversight, 22 FCC Rcd 16372, 16387-88, para. 30 (2007). 331 See Fansteel Metallurgical Corp. v. United States, 172 F. Supp. 268, 270 (Ct. Cl. 1959) (“when a payment is erroneously or illegally made it is in direct violation of article IV, section 3, clause 2, of the Constitution. . . . Under these circumstances it is not only lawful but the duty of the Government to sue for a refund thereof”); see also Amtec Corp. v. United States, 69 Fed. Cl. 79, 88 (2005), aff'd, 239 Fed. Appx. 585 (Fed. Cir. 2007). 332 United States v. Wurts, 3003 U.S. 414, 415-16 (1938); United States v. Lahey Clinic Hospital, Inc. 399 F.3d 1, 15 (1st Cir.), cert. denied, 546 U.S. 815 (2005) (the only time a government agency is barred from exercising its right to recover overpayments is when Congress has clearly manifested its intention to raise a statutory barrier). 333 See 31 U.S.C. §§ 3711, 3716, 3717; 31 CFR §§ 901, et seq., 47 CFR §§ 1.1901, et seq. 334 See BellSouth Telecommunications, LLC d/b/a AT&T Southeast, Notice of Apparent Liability for Forfeiture, ___ FCC Rcd ___, paras. 69-71 (FCC 16-98) (July 27, 2016). See also Holmberg v. Armbrecht, 327 U.S. 392, 396 (1946) (“Traditionally, and for good reasons, statutes of limitation are not controlling measures of equitable relief.”); United States v. Wurts, 303 U.S. 414, 415-16 (1938) (“The Government by appropriate action can recover funds which its agents have wrongfully, erroneously, or illegally paid. . . . Ordinarily, recovery of Government funds, paid by mistake to one having no just right to keep the funds, is not barred by the passage of time.”); Request for Waiver or Review of a Decision of the Universal Service Administrator by Premio Computer, Inc., Order, 29 FCC Rcd 8185 para. 6 n.16 (Wireline Comp. Bur. 2014) (Premio Computer) (“The Government’s right to recover funds, from a person who received them by mistake and without right, is not barred unless Congress has clearly manifested its intention to raise a statutory barrier to recovery. Congress has imposed no such statutory barrier to recovery but, to the contrary, in the Debt Collection Improvement Act, has generally directed agencies to try to collect a claim of the (continued….) Federal Communications Commission FCC 16-158 48 program goal must be recovered in full.335 Based on this mandate, we propose a recovery of $3,502,565.95 in USF support NSS received as a result of its apparent violations related to competitive bidding and rates charged in the RHC Program, and wire fraud as described above. 145. As discussed above, we believe that piercing the corporate veil is appropriate in this case. Based upon the ongoing, widespread conduct exhibited by NSS at Madison’s direction, we find that the imposition of a significant forfeiture amount is necessary to curtail future violations and imposing a significant forfeiture should achieve broader industry compliance with the Commission’s Rules. 146. In addition, in light of NSS’s apparent egregious misconduct and demonstrated harm to the Fund from the apparent violations, we order NSS to submit a report within 30 days of release of this NAL explaining why the Commission should not: (1) order USAC to hold all payments and disbursements to NSS; and (2) initiate proceedings against NSS to revoke its Commission authorizations. 147. We recognize that the proposed forfeiture discussed herein may cause uncertainty for those HCPs that have selected NSS as their service provider. Accordingly, should we determine that revocation of NSS’s Commission authorizations is appropriate, we will consider using our discretion to waive Section 54.603(b) of the Commission’s Rules to provide these HCPs with the option of selecting a new service provider if needed to help alleviate any disruption in service.336 VII. ORDERING CLAUSES 148. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the Act, and 1.80 of the Rules,337 Network Services Solutions, LLC and Scott Madison are hereby NOTIFIED of this APPARENT LIABILITY FOR A TOTAL FORFEITURE AND ORDER in the amount of $21,691,498.85 for apparently willfully and repeatedly violating Sections 54.603, 54.605, 54.607, 54.609, 54.613, and 54.615 of the Commission’s Rules338 and apparently knowingly, willfully, and with reckless indifference to the truth violating Section 1343 of Title 18 of the United States Code. 149. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules,339 within thirty (30) calendar days of the release date of this Notice of Apparent Liability for Forfeiture and Order, NSS and Scott Madison 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 149 below. 150. 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. NSS shall also send electronic notification of payment to Loyaan Egal at Loyaan.Egal@fcc.gov, to Rakesh Patel at Rakesh.Patel@fcc.gov, to Mary Beth DeLuca at MaryBeth.DeLuca@fcc.gov, and to David M. Sobotkin at David.Sobotkin@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.340 When completing the FCC Form (Continued from previous page) U.S. government for money or property arising out of activities of, or referred to, the agency.”) (internal citations and quotations omitted). 335 Comprehensive Review of the Universal Service Fund Management, Administration, and Oversight, 22 FCC Rcd at 16387-88, para. 30 (2007); cf. Fifth Report and Order, 19 FCC Rcd 15808, 15815, para. 20 (2004). 336 Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990). 337 47 U.S.C. § 503(b); 47 CFR § 1.80. 338 47 CFR §§ 54.407, 54.409, 54.410. 339 47 CFR § 1.80. 340 An FCC Form 159 and detailed instructions for completing the form may be obtained at http://www fcc.gov/Forms/Form159/159.pdf. Federal Communications Commission FCC 16-158 49 159, enter the Account Number in block number 23A (call sign/other ID) and enter the letters “FORF” in block number 24A (payment type code). Below are additional instructions you should follow based on the form of payment you select: ? Payment by check or money order must be made payable to the order of the Federal Communications Commission. Such payments (along with the completed Form 159) must be mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank – Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101. ? Payment by wire transfer must be made to ABA Number 021030004, receiving bank TREAS/NYC, and Account Number 27000001. To complete the wire transfer and ensure appropriate crediting of the wired funds, a completed Form 159 must be faxed to U.S. Bank at (314) 418-4232 on the same business day the wire transfer is initiated. ? Payment by credit card must be made by providing the required credit card information on FCC Form 159 and signing and dating the Form 159 to authorize the credit card payment. The completed Form 159 must then be mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank – Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101. 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. 20554.341 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. 151. 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 to Sections 1.16 and 1.80(f)(3) of the Rules.342 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 emailed to Loyaan.Egal@fcc.gov, Rakesh.Patel@fcc.gov, MaryBeth.DeLuca@fcc.gov, and David.Sobotkin@fcc.gov. 152. 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. 153. IT IS FURTHER ORDERED that NSS shall respond to the order in paragraph 146 within thirty (30) calendar days of the release date of this Notice of Apparent Liability for Forfeiture and Order. 341 See 47 CFR § 1.1914. 342 47 CFR §§ 1.16, 1.80(f)(3). Federal Communications Commission FCC 16-158 50 154. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for Forfeiture and Order shall be sent by certified mail, return receipt requested, and first class mail to Scott Madison, President, Network Services Solutions, LLC, 3700 Barron Way, Reno, NV 89511. FEDERAL COMMUNICATIONS COMMISSION Marlene H. Dortch Secretary Federal Communications Commission FCC 16-158 51 APPENDIX A OVERVIEW OF $138.00 URBAN RATES AS REPRESENTED BY NSS Service City State Rate Term 100 Mbps Ethernet Little Rock AR $138.00 36 months 100 Mbps MPLS Birmingham AL $138.00 36 months 10 Mbps Ethernet Jackson MS $138.00 36 months 50 Mbps Ethernet Jackson MS $138.00 36 months 100 Mpbs Point to Point Jackson MS $138.00 36 months 100 Mbps Switched Ethernet Jackson MS $138.00 36 months 1,000 Mbps MPLS Jackson MS $138.00 36 months 10 Mbps Switched Ethernet Jackson MS $138.00 36 months 100 Mbps Ethernet New Orleans LA $138.00 36 months 100 Mbps Ethernet Lafayette LA $138.00 36 months 20 Mbps Ethernet Dallas TX $138.00 60 months 100 Mbps Ethernet Dallas TX $138.00 36 months 10 Mpbs Point to Point Dallas TX $138.00 36 months 10 Mbps MPLS Memphis TN $138.00 36 months 100 Mbps Ethernet San Francisco CA $138.00 36 months 5 Mbps Ethernet San Francisco CA $138.00 36 months 20 Mbps Ethernet San Francisco CA $138.00 36 months 10 Mbps Ethernet Sacramento CA $138.00 36 months 100 Mbps MPLS Los Angeles CA $138.00 36 months 10.5 Ethernet Los Angeles CA $138.00 36 months 20 Mbps Ethernet St. Louis MO $138.00 36 months 45 Mbps Ethernet Charlotte NC $138.00 36 months 50 Mbps MPLS Raleigh NC $138.00 36 months 10 Mbps Ethernet Lexington KY $138.00 36 months 50 Mbps Ethernet Lexington KY $138.00 36 months Federal Communications Commission FCC 16-158 52 APPENDIX B FORM 466s CHARGED HCP Number HCP Name FRN FY 10254 Northeastern Rural Health Clinics, Inc. 1465189 2014 10254 Northeastern Rural Health Clinics, Inc. 1569144 2015 10256 Mountain Valleys Health Centers, Big Valley Health Center 1465638 2014 10256 Mountain Valleys Health Centers, Big Valley Health Center 1570623 2015 10256 Mountain Valleys Health Centers, Big Valley Health Center 1570624 2015 10795 East Central Mississippi Health Care - Sebastopol Medical Clinic 1455924 2014 10795 East Central Mississippi Health Care - Sebastopol Medical Clinic 1455926* 2014 10795 East Central Mississippi Health Care - Sebastopol Medical Clinic 1455927 2014 10795 East Central Mississippi Health Care - Sebastopol Medical Clinic 1455929 2014 10796 East Central Mississippi Health Care - Walnut Grove Medical Clinic 1455918* 2014 10797 East Central Mississippi Health Care - Philadelphia Health Center 1455920* 2014 11142 Mitchell County Hospital 1449767 2014 11852 Mountain Valleys Health Centers, Butte Valley Health Center 1570625 2015 11856 Childress Regional Medical Center 1449144 2014 12791 South Sunflower County Hospital 1224839 2012 Federal Communications Commission FCC 16-158 53 12791 South Sunflower County Hospital 1338163 2013 12791 South Sunflower County Hospital 1449025 2014 12791 South Sunflower County Hospital 1449153 2014 12816 IHSCAL Toiyabe 1574163 2015 13498 Bond County Health Department 1348427* 2013 13498 Bond County Health Department 1348767* 2013 13498 Bond County Health Department 1456297* 2014 13498 Bond County Health Department 1567571* 2015 13498 Bond County Health Department 1568203 2015 13965 Burney Health Center 1570621 2015 14347 East Carroll Parish Hospital 1465999 2014 15570 Jeff Davis Hospital 1568145 2015 15801 Forrest General Hospital/Marion General Hospital 1226735 2012 15925 Monroe County Hospital 1576349 2015 16153 Electra Memorial Hospital 1450662 2014 16394 Rush Foundation Hospital-Rush Medical Clinic 1343269 2013 16415 Hardy Wilson Memorial Hospital 1347127 2013 16415 Hardy Wilson Memorial Hospital 1466623 2014 Federal Communications Commission FCC 16-158 54 16667 Iraan General Hospital 1449753 2014 16667 Iraan General Hospital 1570993 2015 17021 Mountain Valleys Health Centers, Tulelake Health Center 1570626 2015 17728 Fall River Valley Health Center 1570622 2015 22207 Community Counseling Services, Inc.-Malvern 1467123 2014 22207 Community Counseling Services, Inc.-Malvern 1467125 2014 22207 Community Counseling Services, Inc.-Malvern 1467126 2014 22207 Community Counseling Services, Inc.-Malvern 1567956 2015 22207 Community Counseling Services, Inc.-Malvern 1567957 2015 22207 Community Counseling Services, Inc.-Malvern 1567958 2015 24921 Hood Memorial Hospital 1466841 2014 26203 North Runnels County Hospital District dba North Runnels Hospital 1466656 2014 26203 North Runnels County Hospital District dba North Runnels Hospital 1570936 2015 26967 Weems Mental Health Center - Clarke County 1446204* 2014 26967 Weems Mental Health Center - Clarke County 1462363 2014 26968 Weems Mental Health Center - Jasper County 1462357* 2014 26969 Weems Mental Health Center - Kemper County 1462366 2014 26970 Weems Mental Health Center - Leake County 1462371 2014 Federal Communications Commission FCC 16-158 55 26971 Weems Mental Health Center - Neshoba County 1462373 2014 26972 Weems Mental Health Center - Newton County 1462381* 2014 26973 Weems Mental Health Center - Scott County 1462379 2014 26974 Weems Mental Health Center - Smith County 1462341 2014 27109 Quinco Mental Health Bolivar Facility 1465431 2014 27135 Quinco Mental Health Centers Henderson Facility 1465179 2014 27157 Quinco Mental Health Lexington Facility 1465429 2014 27229 Quinco Mental Health Centers Savannah Facility 1465426 2014 27230 Quinco Mental Health Centers Selmer Facility 1465425 2014 27665 McDuffie Regional Medical Center 1450493 2014 27665 McDuffie Regional Medical Center 1450495 2014 31331 St. Genevieve County Memorial Hospital - Pointe Bassee Family 1452625 2014 32862 Communicare Oxford 1461380 2014 32862 Communicare Oxford 1461382 2014 32906 Rush Health Systems - John C Stennis Memorial Hospital 1343287 2013 33245 Texoma Community Center – Cooke 1348862 2013 33245 Texoma Community Center – Cooke 1348881* 2013 33245 Texoma Community Center – Cooke 1348885* 2013 Federal Communications Commission FCC 16-158 56 33245 Texoma Community Center – Cooke 1348886* 2013 33245 Texoma Community Center – Cooke 1348891* 2013 33245 Texoma Community Center – Cooke 1348892* 2013 33245 Texoma Community Center – Cooke 1348895* 2013 33245 Texoma Community Center – Cooke 1348905* 2013 33245 Texoma Community Center – Cooke 1348906* 2013 33245 Texoma Community Center – Cooke 1348907* 2013 33245 Texoma Community Center – Cooke 1348913* 2013 33245 Texoma Community Center – Cooke 1348916* 2013 33245 Texoma Community Center – Cooke 1348919* 2013 33245 Texoma Community Center – Cooke 1348923* 2013 33245 Texoma Community Center – Cooke 1348946* 2013 33245 Texoma Community Center – Cooke 1348949* 2013 33245 Texoma Community Center – Cooke 1348952* 2013 33245 Texoma Community Center – Cooke 1348956* 2013 33245 Texoma Community Center – Cooke 1348957* 2013 33245 Texoma Community Center – Cooke 1348961* 2013 33245 Texoma Community Center – Cooke 1348962* 2013 Federal Communications Commission FCC 16-158 57 33245 Texoma Community Center – Cooke 1348964* 2013 33245 Texoma Community Center – Cooke 1348967* 2013 33245 Texoma Community Center – Cooke 1348968* 2013 33245 Texoma Community Center – Cooke 1348970* 2013 33245 Texoma Community Center – Cooke 1348976* 2013 33245 Texoma Community Center – Cooke 1348981* 2013 33245 Texoma Community Center – Cooke 1464295* 2014 33245 Texoma Community Center – Cooke 1465177* 2014 33245 Texoma Community Center – Cooke 1465180* 2014 33245 Texoma Community Center – Cooke 1465181* 2014 33245 Texoma Community Center – Cooke 1465182* 2014 33245 Texoma Community Center – Cooke 1465184* 2014 33245 Texoma Community Center – Cooke 1465460* 2014 33245 Texoma Community Center – Cooke 1465462* 2014 33245 Texoma Community Center – Cooke 1465468* 2014 33245 Texoma Community Center – Cooke 1465471* 2014 33245 Texoma Community Center – Cooke 1435473* 2014 33245 Texoma Community Center – Cooke 1465479* 2014 Federal Communications Commission FCC 16-158 58 33245 Texoma Community Center – Cooke 1465480* 2014 33245 Texoma Community Center – Cooke 1465482* 2014 33245 Texoma Community Center – Cooke 1465484* 2014 33245 Texoma Community Center – Cooke 1465486* 2014 33245 Texoma Community Center – Cooke 1465487* 2014 33245 Texoma Community Center – Cooke 1465524* 2014 33245 Texoma Community Center – Cooke 1465525* 2014 33245 Texoma Community Center – Cooke 1465527* 2014 33245 Texoma Community Center – Cooke 1465530* 2014 33245 Texoma Community Center – Cooke 1465531* 2014 33245 Texoma Community Center – Cooke 1465533* 2014 33245 Texoma Community Center – Cooke 1465536* 2014 33245 Texoma Community Center – Cooke 1465538* 2014 33245 Texoma Community Center – Cooke 1465545 2014 33245 Texoma Community Center – Cooke 1465547* 2014 33245 Texoma Community Center – Cooke 1567660* 2015 33245 Texoma Community Center – Cooke 1568156* 2015 33245 Texoma Community Center – Cooke 1568161* 2015 Federal Communications Commission FCC 16-158 59 33245 Texoma Community Center – Cooke 1568162* 2015 33245 Texoma Community Center – Cooke 1568163* 2015 33245 Texoma Community Center – Cooke 1568164* 2015 33245 Texoma Community Center – Cooke 1568165* 2015 33245 Texoma Community Center – Cooke 1568166* 2015 33245 Texoma Community Center – Cooke 1568167* 2015 33245 Texoma Community Center – Cooke 1568168* 2015 33245 Texoma Community Center – Cooke 1568169* 2015 33245 Texoma Community Center – Cooke 1568170* 2015 33245 Texoma Community Center – Cooke 1568171* 2015 33245 Texoma Community Center – Cooke 1568172* 2015 33245 Texoma Community Center – Cooke 1568173* 2015 33245 Texoma Community Center – Cooke 1568174* 2015 33245 Texoma Community Center – Cooke 1568176* 2015 33245 Texoma Community Center – Cooke 1568177* 2015 33245 Texoma Community Center – Cooke 1568178* 2015 33245 Texoma Community Center – Cooke 1568179* 2015 33245 Texoma Community Center – Cooke 1568180* 2015 Federal Communications Commission FCC 16-158 60 33245 Texoma Community Center – Cooke 1568181* 2015 33245 Texoma Community Center – Cooke 1568183* 2015 33245 Texoma Community Center – Cooke 1568184* 2015 33245 Texoma Community Center – Cooke 1568185* 2015 33245 Texoma Community Center – Cooke 1568186* 2015 33245 Texoma Community Center – Cooke 1568190 2015 37604 Coastal Family Health Center - Vancleave 1463754 2014 37604 Coastal Family Health Center - Vancleave 1463769 2014 37604 Coastal Family Health Center - Vancleave 1463773 2014 37604 Coastal Family Health Center - Vancleave 1463777 2014 37604 Coastal Family Health Center - Vancleave 1463780 2014 37604 Coastal Family Health Center - Vancleave 1463784 2014 37604 Coastal Family Health Center - Vancleave 1463786 2014 37604 Coastal Family Health Center - Vancleave 1463789 2014 37604 Coastal Family Health Center - Vancleave 1463811 2014 37604 Coastal Family Health Center - Vancleave 1463812 2014 37604 Coastal Family Health Center - Vancleave 1463817 2014 37604 Coastal Family Health Center - Vancleave 1570849 2015 Federal Communications Commission FCC 16-158 61 37604 Coastal Family Health Center - Vancleave 1570852 2015 37604 Coastal Family Health Center - Vancleave 1570853 2015 37604 Coastal Family Health Center - Vancleave 1570854 2015 37604 Coastal Family Health Center - Vancleave 1570855 2015 37604 Coastal Family Health Center - Vancleave 1570856 2015 37604 Coastal Family Health Center - Vancleave 1570857 2015 37604 Coastal Family Health Center - Vancleave 1570858 2015 37604 Coastal Family Health Center - Vancleave 1570859 2015 37604 Coastal Family Health Center - Vancleave 1570860 2015 37604 Coastal Family Health Center - Vancleave 1570861 2015 39286 El Futuro, Inc.--Siler City 1464330 2014 39286 El Futuro, Inc.--Siler City 1570415 2015 39710 Cheaha Regional Mental Health Center - Sylacauga 1569846 2015 39712 Cheaha Regional Mental Health Center - Talladega 1569843 2015 39713 Cheaha Regional Mental Health Center - Clay 1570290 2015 39714 Cheaha Regional Mental Health Center - Roanoke 1570282 2015 * Indicates Form 466s charged in support of apparent competitive bidding violations. Federal Communications Commission FCC 16-158 62 APPENDIX C FORM 466s SUPPORTED BY APPARENTLY FALSE $138.00 RATE DOCUMENTS HCP Number HCP Name FRN FY 10254 Northeastern Rural Health Clinics, Inc. 1465189 2014 10254 Northeastern Rural Health Clinics, Inc. 1569144 2015 10256 Mountain Valleys Health Centers, Big Valley Health Center 1465638 2014 10256 Mountain Valleys Health Centers, Big Valley Health Center 1570623 2015 10256 Mountain Valleys Health Centers, Big Valley Health Center 1570624 2015 10795 East Central Mississippi Health Care - Sebastopol Medical Clinic 1455924 2014 10795 East Central Mississippi Health Care - Sebastopol Medical Clinic 1455927 2014 10795 East Central Mississippi Health Care - Sebastopol Medical Clinic 1455929 2014 11142 Mitchell County Hospital 1449767 2014 11852 Mountain Valleys Health Centers, Butte Valley Health Center 1570625 2015 11856 Childress Regional Medical Center 1449144 2014 12791 South Sunflower County Hospital 1449025 2014 12791 South Sunflower County Hospital 1449153 2014 12816 IHSCAL Toiyabe 1574163 2015 13498 Bond County Health Department 1568203 2015 Federal Communications Commission FCC 16-158 63 13965 Burney Health Center 1570621 2015 14347 East Carroll Parish Hospital 1465999 2014 15570 Jeff Davis Hospital 1568145 2015 15925 Monroe County Hospital 1576349 2015 16153 Electra Memorial Hospital 1450662 2014 16394 Rush Foundation Hospital-Rush Medical Clinic 1343269 2013 16415 Hardy Wilson Memorial Hospital 1466623 2014 16667 Iraan General Hospital 1449753 2014 16667 Iraan General Hospital 1570993 2015 17021 Mountain Valleys Health Centers, Tulelake Health Center 1570626 2015 17728 Fall River Valley Health Center 1570622 2015 22207 Community Counseling Services, Inc.-Malvern 1467123 2014 22207 Community Counseling Services, Inc.-Malvern 1467125 2014 22207 Community Counseling Services, Inc.-Malvern 1467126 2014 22207 Community Counseling Services, Inc.-Malvern 1567956 2015 22207 Community Counseling Services, Inc.-Malvern 1567957 2015 22207 Community Counseling Services, Inc.-Malvern 1567958 2015 24921 Hood Memorial Hospital 1466841 2014 Federal Communications Commission FCC 16-158 64 26203 North Runnels County Hospital District dba North Runnels Hospital 1466656 2014 26203 North Runnels County Hospital District dba North Runnels Hospital 1570936 2015 26967 Weems Mental Health Center - Clarke County 1462363 2014 26969 Weems Mental Health Center - Kemper County 1462366 2014 26970 Weems Mental Health Center - Leake County 1462371 2014 26971 Weems Mental Health Center - Neshoba County 1462373 2014 26973 Weems Mental Health Center - Scott County 1462379 2014 26974 Weems Mental Health Center - Smith County 1462341 2014 27109 Quinco Mental Health Bolivar Facility 1465431 2014 27135 Quinco Mental Health Centers Henderson Facility 1465179 2014 27157 Quinco Mental Health Lexington Facility 1465429 2014 27229 Quinco Mental Health Centers Savannah Facility 1465426 2014 27230 Quinco Mental Health Centers Selmer Facility 1465425 2014 27665 McDuffie Regional Medical Center 1450493 2014 27665 McDuffie Regional Medical Center 1450495 2014 31331 St. Genevieve County Memorial Hospital - Pointe Bassee Family 1452625 2014 32862 Communicare Oxford 1461380 2014 32862 Communicare Oxford 1461382 2014 Federal Communications Commission FCC 16-158 65 32906 Rush Health Systems - John C Stennis Memorial Hospital 1343287 2013 33245 Texoma Community Center – Cooke 1348862 2013 33245 Texoma Community Center – Cooke 1465545 2014 33245 Texoma Community Center – Cooke 1568190 2015 37604 Coastal Family Health Center - Vancleave 1463754 2014 37604 Coastal Family Health Center - Vancleave 1463769 2014 37604 Coastal Family Health Center - Vancleave 1463773 2014 37604 Coastal Family Health Center - Vancleave 1463777 2014 37604 Coastal Family Health Center - Vancleave 1463780 2014 37604 Coastal Family Health Center - Vancleave 1463784 2014 37604 Coastal Family Health Center - Vancleave 1463786 2014 37604 Coastal Family Health Center - Vancleave 1463789 2014 37604 Coastal Family Health Center - Vancleave 1463811 2014 37604 Coastal Family Health Center - Vancleave 1463812 2014 37604 Coastal Family Health Center - Vancleave 1463817 2014 37604 Coastal Family Health Center - Vancleave 1570849 2015 37604 Coastal Family Health Center - Vancleave 1570852 2015 37604 Coastal Family Health Center - Vancleave 1570853 2015 Federal Communications Commission FCC 16-158 66 37604 Coastal Family Health Center - Vancleave 1570854 2015 37604 Coastal Family Health Center - Vancleave 1570855 2015 37604 Coastal Family Health Center - Vancleave 1570856 2015 37604 Coastal Family Health Center - Vancleave 1570857 2015 37604 Coastal Family Health Center - Vancleave 1570858 2015 37604 Coastal Family Health Center - Vancleave 1570859 2015 37604 Coastal Family Health Center - Vancleave 1570860 2015 37604 Coastal Family Health Center - Vancleave 1570861 2015 39286 El Futuro, Inc.--Siler City 1464330 2014 39286 El Futuro, Inc.--Siler City 1570415 2015 39710 Cheaha Regional Mental Health Center - Sylacauga 1569846 2015 39712 Cheaha Regional Mental Health Center - Talladega 1569843 2015 39713 Cheaha Regional Mental Health Center - Clay 1570290 2015 39714 Cheaha Regional Mental Health Center - Roanoke 1570282 2015 Federal Communications Commission FCC 16-158 67 APPENDIX D FORM 466s SUPPORTED BY APPARENTLY FORGED COMCAST RATE DOCUMENTS HCP Number HCP Name FY FRN Description of the Wire Approximate Wire Date Approximate Wire Payment Date From USAC to NSS 12791 South Sunflower County Hospital 2012 1224839 Submission of Apparently Forged Urban Rate to USAC via Web Portal June 10, 2013 and January 24, 2014 February 21, 2014 12791 South Sunflower County Hospital 2013 1338163 Submission of Apparently Forged Urban Rate to USAC via Web Portal February 1, 2014 July 7, 2014 15801 Forrest General Hospital/Marion General Hospital 2012 1226735 Submission of Apparently Forged Urban Rate to USAC via Web Portal June 22, 2013 December 20, 2013 16415 Hardy Wilson Memorial Hospital 2013 1347127 Submission of Apparently Forged Urban Rate to USAC via Web Portal June 20, 2014 November 6, 2015* * Indicates wire charged in support of apparent wire fraud violation. Federal Communications Commission FCC 16-158 68 APPENDIX E APPARENTLY FORGED URBAN RATE DOCMENT SUBMITTED TO USAC BY HCP SOUTH SUNFLOWER ON JUNE 10, 2013 Federal Communications Commission FCC 16-158 69 APPENDIX F APPARENTLY FORGED URBAN RATE DOCUMENT BACKDATED BY NSS AND SUBMITTED TO USAC BY HCP SOUTH SUNFLOWER ON JANUARY 24, 2014 Federal Communications Commission FCC 16-158 70 APPENDIX G EMAIL FROM NSS EMPLOYEE TO SCOTT MADISON ATTACHING APPARENTLY BACKDATED AND FORGED URBAN RATE DOCUMENTS AT HIS REQUEST Federal Communications Commission FCC 16-158 71 STATEMENT OF COMMISSIONER AJIT PAI, APPROVING IN PART AND DISSENTING IN PART Re: Network Services Solutions, LLC, Scott Madison, File No.: EB-IHD-15-0001913. Fabricating documents.1 Doctoring evidence to conceal unfair bidding practices.2 Offering a “bribe in order to get the customer to sign.”3 Fixing competitive bidding processes to boost federal subsidies.4 These are things Network Services Solutions (NSS) allegedly did in what appears to be an ongoing criminal enterprise designed to rob taxpayers of millions of dollars through the Universal Service Fund’s rural healthcare program. I agree completely with my colleagues that it appears that NSS willfully and repeatedly violated our rules and that we must recover the taxpayer funds that NSS unlawfully siphoned. I also agree that NSS should be barred from getting any further federal subsidies from the Universal Service Fund. Indeed, I was distressed that the Chairman’s initial draft would have allowed NSS to continue to profit from its apparently fraudulent activities. I’m accordingly grateful to my colleagues for supporting my call to turn off the spigot.5 And I agree with my colleagues that NSS’s conduct merits a hefty fine. But the NAL fatally compromises our ability to impose a lawful forfeiture of more than $189,361 upon the carrier.6 Specifically, the NAL ties the proposed forfeiture to forms submitted on or before June 30, 20157—which is at least 127 days beyond the Act’s one-year statute of limitations.8 It then claims NSS’s “apparent violations . . . continued through the present as a result of NSS’s failure to take actions that would have corrected the forms that were filed in connection with these activities.”9 This legal theory cannot be right. For one, it “stretches the concept of a continuing violation past the breaking point.”10 For example, under this theory, the statute-of-limitations clock might never commence for an inaccurately filed form and the Commission could issue forfeitures for conduct that 1 See NAL at paras. 74–78. 2 See NAL at paras. 38–44. 3 See NAL at para. 48 (quoting Email from , Billing Manager, NSS, to Scott Madison, President, NSS, and , Controller/Office Manager, FW: Sales Order – Texoma – Network Services Signed Service Agreements (Nov. 25, 2013, 5:59 p m.)). 4 See NAL at paras. 55–69. 5 See NAL at paras. 146–47. 6 I agree with the proposed forfeiture of $189,361 for the one count of wire fraud within the Act’s one-year statute of limitations. See NAL at para. 141. 7 See NAL at paras. 133–40 (relying on 175 Forms 466, the most recent of which appears to have been submitted on June 30, 2015). 8 Communications Act § 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.”). 9 NAL at para. 129. 10 See BellSouth Telecommunications, LLC, d/b/a AT&T Southeast, File No.: EB-IHD-14-00017954, NAL/Acct. No.: 201632080007, Notice of Apparent Liability for Forfeiture, 31 FCC Rcd 8501, 8528–29 (2016) (Dissenting Statement of Commissioner Ajit Pai) (quoting Intelsat License LLC f/k/a Intelsat North America, LLC, File No. EB- 11-IH-1376; NAL/Acct. No. 201432080001; FRN 0009308008, Notice of Apparent Liability, 28 FCC Rcd 17183, 17194 (2013) (Statement of Commissioner Ajit Pai, Dissenting)).