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$25K Forfeiture Against Net One for Failure to Respond

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Released: January 15, 2014

Federal Communications Commission

DA 14-38

Before the

Federal Communications Commission

Washington, DC 20554

)
In the Matter of
)
File No. EB-TCD-12-000004181
)
Net One International
)
NAL/Acct. No. 201232170002
Net One, LLC
)
Farrahtel International, LLC
)
FRN: 0004337556
)
Apparent Liability for Forfeiture
)

ORDER OF FORFEITURE

Adopted: January 15, 2014

Released: January 15, 2014
By the Acting Deputy Chief, Enforcement Bureau:

I.

INTRODUCTION

1.
In this Order of Forfeiture, we affirm our findings in the December 9, 2011, Notice of
Apparent Liability for Forfeiture (NAL or Net One NAL)2 that Net One International, Net One, LLC, and
Farrahtel International, LLC (collectively, Net One or the Company) willfully or repeatedly failed to
comply with a Commission order issued by the Enforcement Bureau (Bureau)3 to produce certain
information and documents relating to an investigation of Net One’s possible violations of Section 201(b)
of the Communications Act of 1934, as amended (Communications Act or Act).4 Pursuant to Section
503(b)(1)(B) of the Act,5 we assess the monetary forfeiture proposed in the Net One NAL of twenty-five
thousand dollars ($25,000) against Net One.

II.

BACKGROUND

2.
On July 15, 2011, the Bureau sent a letter of inquiry (LOI) to Net One, ordering Net One
to provide certain information and documents related to its billing practices and its offering of prepaid
telecommunications services.6 The Bureau directed Net One to respond to the LOI on or before August 4,

1 This case was formerly assigned the file number EB-11-TC-063. In January 2012, the Telecommunications
Consumers Division assigned the case a new file number.
2 Net One International, et al., Notice of Apparent Liability for Forfeiture and Order, 26 FCC Rcd 16493 (EB 2011)
(Net One NAL). Net One is a common carrier that provides calling card services.
3 The Bureau order was issued pursuant to delegated authority. See 47 U.S.C. § 155(c)(1)-(3).
4 47 U.S.C. § 201(b).
5 47 U.S.C. § 503(b)(1)(B).
6 See Letter from Richard A. Hindman, Chief, Telecommunications Consumers Division, FCC Enforcement Bureau,
to Net One International (July 15, 2011) (on file in EB-TCD-12-00000418).

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DA 14-38

2011. Net One received and signed for the LOI on July 19, 2011,7 but neither contacted the Bureau nor
responded to the LOI by the filing deadline. On August 29, 2011, the Bureau advised Net One that the
due date had passed and again ordered the Company to respond to the LOI.8 Again, Net One failed to
respond. Thus, on December 9, 2011, the Bureau released the Net One NAL, proposing a forfeiture of
$25,000 for Net One’s failure to respond to the LOI, and again ordering the Company to produce the
documents and information requested, this time by no later than December 19, 2011.
3.
Net One contacted the Bureau on the December 19th deadline and requested an extension
of time until December 23rd to file its response.9 The Bureau granted Net One’s request.10 On December
22, 2011, Net One filed a response to the LOI.11 The Bureau advised Net One that its LOI response was
incomplete, and again ordered the Company to fully respond.12 On January 20, 2012, Net One submitted
a supplemental response to the LOI13 as well as a response to the Net One NAL.14 In its filing, Net One
asserted that it had “remitted the remaining information” responsive to the LOI, in accordance with the
latest extension of time.15
4.
In fact, however, Net One still had not produced all documents and information requested
in the LOI. Bureau staff pointed out the deficiencies to Net One and again directed the Company to
provide a complete response.16 On April 19, 2012, Net One provided a further supplemental response.
Again, Net One failed to produce all documents and information required by the LOI; for example, the
Company failed to provide a list of customer complaints, the number of customers billed each month, a

7 The Winter Park, FL post office stamped the return receipt card July 19, 2011. The card was apparently signed by
El Bachir Alaoui Hichami, the Treasurer of Net One.
8 See E-mail from Mika Savir, Attorney, Telecommunications Consumers Division, FCC Enforcement Bureau, to El
Bachir Alaoui Hichami (Aug. 29, 2011, 11:35 EST) (on file in EB-TCD-12-00000418).
9 See E-mail from Amir Elmasri to Mika Savir, Attorney, Telecommunications Consumers Division, FCC
Enforcement Bureau (Dec. 19, 2011, 12:55 EDT) (on file in EB-TCD-12-00000418).
10 See E-mail from Mika Savir, Attorney, Telecommunications Consumers Division, FCC Enforcement Bureau, to
Amir Elmasri (Dec. 19, 2011, 13:32 EDT) (on file in EB-TCD-12-00000418).
11 See E-mail from Amir Elmasri, VP, Net One International to Kimberly Wild, Deputy Division Chief,
Telecommunications Consumers Division, FCC Enforcement Bureau (Dec. 22, 2011, 18:21 EDT) (on file in EB-
TCD-12-00000418).
12 See E-mail from Mika Savir, Attorney, Telecommunications Consumers Division, FCC Enforcement Bureau, to
Amir Elmasri VP, Net One International (Jan. 9, 2012, 14:07 EDT) (on file in EB-TCD-12-00000418).
13 See E-mail from Amir Elmasri, VP, Net One International to Mika Savir, Attorney, Telecommunications
Consumers Division, FCC Enforcement Bureau (Jan. 20, 2012, 19:01 EDT) (on file in EB-TCD-12-00000418).
Staff advised Net One that the Company was “required to provide full and complete responses to all [LOI]
questions” and that the “LOI requested complaints or inquiries, written or otherwise, since August 1, 2010. This
means all complaints and inquiries submitted since that date, not just a sample.” See E-mail from Mika Savir,
Attorney, Telecommunications Consumers Division, FCC Enforcement Bureau, to Amir Elmasri VP, Net One
International (Jan. 26, 2012, 10:01 EDT) (on file in EB-TCD-12-00000418). Net One provided two additional
customer complaints. See E-mail from Amir Elmasri, VP, Net One International to Mika Savir, Attorney,
Telecommunications Consumers Division, FCC Enforcement Bureau (Feb. 29, 2012, 19:05 EDT) (on file in EB-
TCD-12-00000418).
14 See Letter from Thomas Gainor to Marlene Dortch, Secretary, FCC (Jan. 20, 2012) (on file in EB-TCD-12-
00000418) (NAL Response).
15 NAL Response at 2.
16 See E-mail from Mika Savir, Attorney, Telecommunications Consumers Division, FCC Enforcement Bureau, to
Amir Elmasri VP, Net One International (Apr. 10, 2012, 11:22 EST) (on file in EB-TCD-12-00000418).
2

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DA 14-38

detailed description of how the Company verifies disputed billing, and copies of all complaints submitted
during the time period requested in the LOI.17 The Company has yet to provide a complete response to
the Bureau’s LOI.
5.
In response to the NAL, Net One admits that it failed to timely respond to the Bureau’s
LOI.18 Net One argues that it “is a small company that is struggling to survive and has limited resources
in terms of personnel.”19 The Company acknowledges that it had “obtained several extensions of time in
which to produce the relevant materials.”20 It characterizes its failure to respond as “an inadvertent
oversight.”21 Net One contends that the Bureau’s LOI was “inadvertently misdirected and not acted
upon” as a result of “turnover of a key executive at Net One and an internal process that ultimately has
proven flawed.”22 Net One requests that the NAL “be cancelled or otherwise reduced.”23

III.

DISCUSSION

6.
Section 503(b)(1)(B) of the Act provides that any person who willfully or repeatedly fails
to comply with any provision of the Act or any rule, regulation, or order issued by the Commission, shall
be liable to the United States for a forfeiture penalty.24 At the time of the subject violation, Section
503(b)(2)(B) of the Act authorized the Commission to assess a forfeiture of up to $150,000 for each
violation, or each day of a continuing violation, up to a statutory maximum of $1,500,000 for a single act
or failure to act, by common carriers.25 In determining the amount of the proposed forfeiture, we must
consider the factors enumerated in Section 503(b)(2)(E) of the Act: “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.”26 Our forfeiture guidelines set
forth the base amount for penalties for certain kinds of violations, and identify criteria, consistent with the
Section 503(b)(2)(E) factors, that may influence whether we adjust the base amount downward or
upward. 27 For example, we may adjust a penalty upward if it is “[e]gregious misconduct,” involves an

17 Net One provided summaries of two customer complaints in September, 2012. See E-mail from Amir Elmasri,
VP, Net One International to Mika Savir, Attorney, Telecommunications Consumers Division, FCC Enforcement
Bureau (Sept. 21, 2012, 11:42 EST) (on file in EB-TCD-12-00000418).
18 NAL Response at 2.
19 Id.
20 Id.
21 Id.
22 Id. at 1.
23 Id. at 2.
24 47 U.S.C. § 503(b)(1)(B); see also 47 C.F.R. § 1.80(a)(2).
25 47 U.S.C. § 503(b)(2)(B); see also 47 C.F.R. § 1.80(b)(2). 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 2013. See Amendment of Section 1.80(b) of the Commission’s Rules, Adjustment of Civil
Monetary Penalties to Reflect Inflation
, 28 FCC Rcd 10785 (Enf. Bur. 2013); see also Inflation Adjustment of
Monetary Penalties
, 78 Fed. Reg. 49,370-01 (Aug. 14, 2013) (setting Sept. 13, 2013, as the effective date for the
increases). Because the DCIA specifies that any inflationary adjustment “shall apply only to violations that occur
after the date the increase takes effect,” however, we apply the forfeiture penalties in effect at the time the apparent
violation took place. 28 U.S.C. § 2461 note (6).
26 See 47 U.S.C. § 503(b)(2)(E).
27 47 C.F.R. § 1.80(b)(8) note.
3

Federal Communications Commission

DA 14-38

“[i]ntentional violation,” or involves “[r]epeated or continuous violation[s].”28
7.
Net One has failed to persuade us that there is any basis for canceling or reducing the
amount of the forfeiture. The Company’s claim that its failure to respond to the LOI was “inadvertent,”
and a result of a “flawed process” and personnel changes, is simply not credible given the facts. If Net
One’s failure to respond to the LOI had been a genuine mistake, one would have expected, for example,
the Company to bring its conduct into compliance, or at the very least contact Bureau staff about its
compliance difficulties, after becoming aware of its failings. However, Net One completely disregarded
not only the original deadline for response to the LOI, but also the subsequent warning about the need to
respond and the consequences of failing to do so. Moreover, since the NAL was issued, Net One has
continued to fail to fully respond to the NAL, notwithstanding the Bureau repeatedly advising Net One
about the deficiencies in its responses. Net One’s conduct, therefore, does not appear to be “inadvertent,”
but rather “egregious, intentional, and continuous,” as we found in the NAL.29 These factors provided a
basis for an upward adjustment for a forfeiture, and not the reduction or cancelation sought by Net One.
8.
Further, we find no basis for reducing or cancelling the forfeiture based on Net One’s
statement that “it is a small company that is struggling to survive.”30 The Net One NAL was clear on the
standard of review for considering a reduction or cancellation of a proposed forfeiture based on an
inability to pay.
The Commission will not consider reducing or canceling a forfeiture in response to a
claim of inability to pay unless the petitioner submits: (1) federal tax returns for the most
recent three-year period; (2) financial statements prepared according to generally
accepted accounting practices; 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.31
Net One provided no such documentation and we, therefore, decline to reduce or cancel the forfeiture
based on Net One’s ability to pay.

IV.

CONCLUSION

9.
After reviewing the record in this case and the information Net One provided in its NAL
Response, we conclude that the proposed $25,000 penalty is appropriate. This penalty will serve as an
adequate deterrent and reflects the egregious nature of Net One’s conduct and Net One’s disregard for the
Commission’s authority and investigatory process. Accordingly, the Bureau affirms the NAL and finds
that Net One violated a validly issued Commission order to respond to a Bureau LOI and assess the
$25,000 forfeiture against the Company.

V.

ORDERING CLAUSES

10.
Accordingly,

IT IS ORDERED

, pursuant to Section 503(b) of the Communications Act
of 1934, as amended, 47 U.S.C. § 503(b) and Section 1.80 of the Commission’s rules, 47 C.F.R. § 1.80,
that Net One International, Net One, LLC, and Farrahtel International, LLC, jointly and severally

SHALL FORFEIT

to the United States government the sum of twenty-five thousand dollars ($25,000)
for willfully or repeatedly violating a Commission order.
11.
Payment of the forfeiture shall be made in the manner provided for in Section 1.80 of the

28 Id.
29 Net One NAL, 26 FCC Rcd at 16495, para. 8.
30 NAL Response at 2.
31 Net One NAL, 26 FCC Rcd at 16497, para. 15.
4

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DA 14-38

Commission’s rules within thirty (30) calendar days after the release date of this Forfeiture Order.32 If the
forfeiture is not paid within the period specified, the case may be referred to the United States Department
of Justice for enforcement of the forfeiture pursuant to Section 504(a) of the Act.33 Net One International,
Net One, LLC, and Farrahtel International, LLC, shall send electronic notification of payment to Johnny
Drake at Johnny.Drake@fcc.gov on the date said payment is made. The payment must be made by check
or similar instrument, wire transfer, or credit card, and must include the NAL/Account number and FRN
referenced above. Regardless of the form of payment, a completed FCC Form 159 (Remittance Advice)
must be submitted.34 When completing the FCC Form 159, enter the Account Number in block number
23A (call sign/other ID) and enter the letters “FORF” in block number 24A (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 full payment under an installment plan should be sent to: Chief Financial Officer—
Financial Operations, Federal Communications Commission, 445 12th Street, SW, Room 1-A625,
Washington, DC 20554.35 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.

32 47 C.F.R. § 1.80.
33 47 U.S.C. § 504(a).
34 An FCC Form 159 and detailed instructions for completing the form may be obtained at
http://www.fcc.gov/Forms/Form159/159.pdf.
35 See 47 C.F.R. § 1.1914.
5

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DA 14-38

12.

IT IS FURTHER ORDERED

that a copy of this Order for Forfeiture shall be sent by
Certified Mail Return Receipt Requested and First Class Mail to Thomas Gainor, Moffa, Gainor, and
Sutton, PA, One Financial Plaza, Suite 2202, 100 Southeast Third Avenue, Fort Lauderdale, FL 33394,
attorneys for Net One International, Net One, LLC, and Farrahtel International, LLC.
FEDERAL COMMUNICATIONS COMMISSION
Robert H. Ratcliffe
Acting Deputy Chief
Enforcement Bureau
6

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