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FCC Upholds $20K Forfeiture for USA Teleport, Inc. CPNI Violation

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Released: January 8, 2013

Federal Communications Commission

FCC 13-3

Before the

Federal Communications Commission

Washington, DC 20554

In the Matter of
)
File No.: EB-TCD-12-00002211
)
USA Teleport, Inc.
)
NAL/Acct. No.: 201032170920
)
)

FRN: 0003775566

ORDER ON REVIEW

Adopted: January 7, 2013

Released: January 8, 2013
By the Commission:

I.

INTRODUCTION

1.
In this Order on Review we deny the “Answer to Memorandum Opinion and Order,”
which we treat as an application for review, filed by USA Teleport, Inc. (USAT) on May 18, 2011.2
USAT seeks review of the April 29, 2011 Memorandum Opinion and Order3 of the Enforcement Bureau
(Bureau) in which the Bureau denied USAT’s petition for reconsideration of a Forfeiture Order4 issued
on March 3, 2011. We find that USAT has not provided grounds upon which to overturn the Bureau’s
decision.

II.

BACKGROUND

2.
USAT is a carrier based in North Miami Beach, Florida providing dial-around long
distance services.5 As a telecommunications carrier, USAT is subject to the requirements of the
Communications Act of 1934, as amended (Act or Communications Act), relating to customer proprietary
network information (CPNI), set forth in Section 222 of the Act,6 as well as the Commission’s


1 This case was formerly assigned the file number EB-08-TC-5801. In January 2012, the Telecommunications
Consumers Division assigned the case a new file number.
2 Commission rules do not provide for the filing of an “Answer” to a Memorandum Opinion and Order. However,
because the filing appears to seek Commission review of an action taken by the Enforcement Bureau and was filed
within thirty days of the public notice of that action, we exercise our discretion to treat USAT’s filing as an
application for review under Section 1.115 of the Commission’s rules, 47 C.F.R. § 1.115, and refer to it as such in
the instant order.
3 USA Teleport, Inc., Memorandum Opinion and Order, 26 FCC Rcd 6431 (Enf. Bur. 2011) (Memorandum Opinion
and Order
).
4 USA Teleport, Inc., Order of Forfeiture, 26 FCC Rcd 2456 (Enf. Bur. 2011) (Forfeiture Order).
5 See Email from Noemi Dolinsky, USA Teleport, to Marcy Greene, Deputy Chief, Telecommunications Consumers
Division, FCC Enforcement Bureau (Sept. 9, 2008) (on file in EB-TCD-12-0000221) (Dolinsky Email). The
Dolinsky Email is attached to the Application for Review.
6 Section 222 of the Act, 47 U.S.C § 222, provides: “Every telecommunications carrier has a duty to protect the
confidentiality of proprietary information of, and relating to, other telecommunications carriers, equipment
manufacturers, and customers, including telecommunication carriers reselling telecommunications services provided
by a telecommunications carrier.”

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implementing rules and orders.7 Pursuant to Section 64.2009(e) of the Commission’s rules,8 carriers and
interconnected Voice over Internet Protocol (VoIP) service providers9 must file annually, on or before
March 1, a certification with the Commission, over the signature of an officer, that the officer has
personal knowledge that the carrier has established operating procedures sufficient to ensure compliance
with the Commission’s CPNI rules.
3.
On September 5, 2008, the Telecommunications Consumers Division (TCD) of the
Enforcement Bureau issued a letter of inquiry (LOI) to USAT asking whether the company had filed a
Section 64.2009(e) CPNI compliance certification for calendar year 2007.10 USAT responded by email
on September 9, 2008,11 and submitted a CPNI certification for calendar year 2007 the following day.12
On February 24, 2009, TCD released the Omnibus NAL13 against numerous companies, including USAT,
proposing a monetary forfeiture of $20,000 for the apparent failure to timely file a CPNI certification as
required by Section 64.2009(e) of the Commission’s rules and the Commission’s EPIC CPNI Order.14
The NAL ordered the companies to either pay the proposed forfeiture or file a written response within 30
days stating why the proposed forfeiture should be reduced or canceled. USAT submitted a response to
the Omnibus NAL on March 2, 2009.15 USAT’s arguments were considered and rejected in the March 3,
2011 Forfeiture Order.
4.
On March 18, 2011, USAT filed an “Answer to Order of Forfeiture” which the Bureau
treated as a petition for reconsideration (Petition for Reconsideration).16 In a Memorandum Opinion and


7 47 C.F.R. §§ 64.2001–64.2011.
8 47 C.F.R. § 64.2009(e). The carrier must provide a statement accompanying the certification explaining how its
operating procedures ensure that it is or is not in compliance with the Commission’s CPNI rules. In addition, the
carrier must include an explanation of any actions taken against data brokers and a summary of all customer
complaints received in the past year concerning the unauthorized release of CPNI. This filing must be made
annually on or before March 1 in EB Docket No. 06-36, for data pertaining to the previous calendar year.
9 An “interconnected Voice over Internet protocol (VoIP) service is a service that: (1) Enables real-time, two-way
voice communications; (2) Requires a broadband connection from the user's location; (3) Requires Internet protocol-
compatible customer premises equipment (CPE); and (4) Permits users generally to receive calls that originate on
the public switched telephone network and to terminate calls to the public switched telephone network.” 47 C.F.R.
§ 9.3.
10 See Letter from Marcy Greene, Deputy Chief, Telecommunications Consumers Division, Enforcement Bureau,
FCC, to USA Teleport, Inc. at 1 (Sept. 5, 2008) (on file in EB-TCD-12-00000221).
11 See Dolinsky Email.
12 See USAT’s “Annual 47 C.F.R. § 64.2009(e) CPNI Certification,” dated Sept. 10, 2008.
13 Annual CPNI Certification, Omnibus Notice of Apparent Liability for Forfeiture, 24 FCC Rcd 2299 (Enf. Bur.
2009) (Omnibus NAL).
14 Implementation of the Telecommunications Act of 1996: Telecommunications Carriers’ Use of Customer
Proprietary Network Information and Other Customer Information, IP-Enabled Services
, Report and Order and
Further Notice of Proposed Rulemaking, 22 FCC Rcd 6927, 6953, para. 51 (2007) (EPIC CPNI Order), aff’d sub
nom
. Nat’l Cable & Telecom. Assoc. v. FCC, 555 F.3d 996 (D.C. Cir. 2009).
15 See Letter from Noemi Dolinsky, USA Teleport, to the Office of the Secretary, FCC, and to Marcy Greene,
Deputy Chief, Telecommunications Consumers Division, Enforcement Bureau, FCC, (Mar. 2, 2009) (on file in EB-
TCD-12-0000221) (Response to NAL).
16 See Answer to Order of Forfeiture (Mar. 8, 2011) (on file in EB-TCD-12-0000221). The Bureau treated USAT’s
filing as a petition for reconsideration under Section 1.106 of the Commission’s rules, 47 U.S.C. § 1.106.
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Order released April 29, 2011, the Bureau found that USAT had largely repeated the arguments it had
made in its response to the Omnibus NAL and concluded that USAT had raised no new facts and relied on
arguments that revealed no error or omission in the Forfeiture Order.17 The Bureau stated that the fact
that USAT failed to timely file a CPNI compliance certificate for calendar year 2007 was not disputed
and affirmed the Forfeiture Order and denied USAT’s petition for reconsideration.18 USAT filed an
“Answer to Memorandum Opinion & Order” on May 18, 2011 which we are treating as an application for
review (Application for Review).19

III.

DISCUSSION

5.
By Memorandum Opinion and Order the Bureau denied USAT’s Petition for
Reconsideration filed on March 18, 2011, affirmed the Forfeiture Order and ordered USAT to pay the
forfeiture amount of $20,000.20 For the reasons discussed below, we agree with the Bureau’s disposition
of the case and deny USAT’s Application for Review.
6.
In its Application for Review, USAT largely repeats the arguments it made before the
Bureau in its Petition for Reconsideration. USAT’s principal argument on reconsideration and again in
its Application for Review continues to be that “USAT filed late . . . because the due date of the filing was
unknown by [USAT].”21 In essence USAT’s argument is that because it was unaware of the filing
requirement, it should not be held liable for violating the Commission’s rules.22 In its Application for
Review, however, USAT now seems to be taking this argument a step further by stating: “The
Commission cannot reaffirm the Forfeiture Order because in this case the administrative oversight that
caused the lack of knowledge is the responsibility of the Commission.”23 USAT cites a January 28, 2011
Enforcement Advisory24 and other recent Bureau actions designed to enhance compliance with the CPNI


17 Memorandum Opinion and Order, 26 FCC Rcd at 6433, para. 8.
18 Id., 26 FCC Rcd at 6434, paras. 9, 16, 17.
19 Answer to Memorandum Opinion & Order (May 18, 2011) (on file in EB-TCD-12-0000221) (Application for
Review). We treat this filing as an application for review. See supra note 1.
20 Memorandum Opinion & Order, 26 FCC Rcd at 6433-37, paras. 8-14.
21 See, e.g., Application for Review at para. 7.
22 See, e.g., id. at paras. 5, 7, 8, 9, 10, and 13. USAT stated that it “filed late a form because the due date of the
filing was unknown by it.” Id. at para. 7. As part of its argument for avoiding liability based on lack of knowledge,
USAT also challenged the Forfeiture Order’s finding that the violation was “willful.” USAT argued that the
violation could not have been “willful” because it was unaware of the rule requiring that it file a CPNI compliance
certification by March 1st 2008 for the year 2007. Memorandum Opinion and Order, 26 FCC Rcd at 6434, para. 9.
In its Application for Review, however, USAT does not contest the Bureau’s findings with respect to the violation
being “willful”.
23 Application for Review at para. 9.
24 FCC Enforcement Advisory, “Telecommunications Carriers and Interconnected VOIP Providers Reminded of
Requirement to File Annual Reports Certifying Compliance with Commission Rules Protecting Customer
Proprietary Network Information,” 26 FCC Rcd 650 (Enf. Bur. 2011).
3

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certification filing requirement25 as support for its view that the Commission erred in not giving USAT
and other carriers and interconnected VoIP providers the same type of notice in the past.26

7.
We reject USAT’s contention that it could not or should not be held liable for failure to
file its CPNI compliance certification because it was unaware of its obligation under the rules and we
agree with the Bureau’s decision below. To begin with, we find that the Bureau’s recent actions designed
to enhance compliance with our CPNI rules have no bearing on this case. As the Bureau found in the
Memorandum Opinion and Order,27
to the extent USAT argues it was entitled to personal notice of the EPIC
CPNI Order
’s amendment to section 64.2009(e) of the Commission’s
rules,28 that contention is utterly without merit. The amendment
requiring carriers to file CPNI compliance certifications with the
Commission was promulgated pursuant to the Commission’s general
rulemaking authority.29 As such, proper and timely publication in the
Federal Register—which USAT does not dispute occurred here—
furnished sufficient notice under section 553(b) of the Administrative
Procedure Act.30
Additionally, in the Memorandum Opinion and Order, the Bureau found that “on the facts of this case,
USAT’s claimed ignorance of the certification filing requirement does not warrant mitigation of the
forfeiture. As we have repeatedly held, ‘administrative oversight,’ ‘lack of knowledge,’ or ‘erroneous
beliefs’ are not factors that warrant a forfeiture’s reduction.”31 In short, the fact remains that USAT failed
to timely file its CPNI compliance certification and nothing in USAT’s Application for Review or the
record below persuades us that the Bureau erred in finding USAT violated our CPNI certification rules.
Accordingly, we agree with the Bureau’s disposition of this matter and affirm its decision.
8.
USAT also argued in its Petition for Reconsideration and again in its Application for
Review that in essence (1) no penalty should be imposed because it had a history of compliance with the
Commission’s CPNI rules, and (2) while USAT did not submit any evidence of financial hardship to
justify a reduction in the penalty, it asserts that it is entitled to such reduction.32
9.
We agree with the Bureau’s disposition of these arguments. With regard to USAT’s
argument that it has a history of compliance with the CPNI rules, the relevant fact for purposes of this
case is that USAT did not meet its obligation to complete and independently maintain annual CPNI


25 See Annual CPNI Certification, Omnibus Notice of Apparent Liability for Forfeiture and Order, 26 FCC Rcd
2160 (Enf. Bur. 2011).
26 Application for Review at para. 9.
27 Id., 26 FCC Rcd at 6436, para. 13.
28 See Petition for Reconsideration at 1–4, paras. 2, 6, 8, Conclusion.
29 See EPIC CPNI Order, 22 FCC Rcd at 6933, para. 11 (summarizing the history of the rulemaking).
30 5 U.S.C. § 553(b); see United States v. Daniels, 418 F. Supp. 1074, 1077 (D.S.D. 1976).
31 Memorandum Opinion and Order, 26 FCC Rcd at 6434, para. 9 (citing STI Prepaid, LLC, Notice of Apparent
Liability for Forfeiture, 25 FCC Rcd 17836, 17845, para. 20 (Enf. Bur. 2010) (citing So. Cal. Broad. Co. Licensee,
Radio Station KIEV (AM) Glendale, Cal.
, Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387, para. 3
(1991)).
32 Petition for Reconsideration at paras. 7-9; Application for Review at paras. 7, 9, 12, and 14.
4

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compliance certifications. Indeed, USAT expressly acknowledges that it filed its certification form
“late”.33 The fact that USAT may or may not have complied with other CPNI rules is simply not relevant
to the question of whether USAT violated section 64.2009(e). While USAT may believe there is little
value in the Commission’s requirement that it file an annual certification form,34 licensees have an
obligation to follow all of the Commission’s rules, not just those that they think are important. With
respect to USAT’s claim of financial hardship, we observe, as the Bureau did below, that “USAT has
offered no evidence of financial hardship—let alone evidence of the kind we have expressly explained is
required.”35 Accordingly, we affirm the Bureau’s decision.
10.
Finally, 36 we note that in the background section of USAT’s Application for Review it
asserts for the first time that the Bureau’s characterization of its service as a “telecommunications
service” in the Forfeiture Order was incorrect.37 In this regard USAT asserts that it is a “VoIP long
distance provider.”38 Although the Commission has not addressed whether interconnected VoIP service
constitutes a telecommunications service, it has elected to impose the same CPNI requirements on
providers of both services. 39 As a result, both interconnected VoIP and telecommunications service
providers must file annual CPNI certifications. Further, at the time the Bureau released the Omnibus NAL
and assessed the forfeiture against USAT, USAT was a Commission licensee40 and the amount of the
forfeiture, $20,000, thus was well within the range of forfeitures that could be assessed for continuing
violations by a Commission licensee.41


33 Application for Review at para. 7.
34 Application for Review at para. 12.
35 Id., para 14.
36 USAT also suggests for the first time that the Bureau failed to comply with its own ordering clauses by failing to
send a copy of the Forfeiture Order via certified mail. Application for Review at para 1. USAT admits that it
received an electronic copy of the Forfeiture Order and that it subsequently timely filed its Application for Review.
Id. Thus, even if the Bureau failed to send the Forfeiture Order by certified mail, we note that such failure is
harmless error, not prejudicial procedural error warranting Commission review. In Shinseki v. Sanders, 556 U.S.
396 (2009) (Shinseki), the Supreme Court stated that under the harmless error rule, “the burden of showing that an
error is harmful normally falls upon the party attacking the agency’s determination.” Shinseki, 556 U.S. at 409,
citing among other cases, American Airlines, Inc. v. Dept. of Transp., 202 F.3d 788, 797 (5th Cir. 2000) (declining
to remand where appellant failed to show that error in administrative proceeding was harmful). Because USAT
admits that it received an electronic copy of the Forfeiture Order, it has not shown that its failure to receive a copy of
the Forfeiture Order by certified mail was harmful. We conclude that such failure provides no basis upon which to
alter the Bureau’s decision.
37 Application for Review at para. 2.
38 Id.
39 The CPNI rules impose obligations on telecommunications carriers. The rules define “carrier” and
“telecommunications carrier” to have the same meaning as that set forth for “telecommunications carrier” in the Act,
47 U.S.C. § 153(44), and to include “an entity that provides interconnected VoIP service.” 47 C.F.R. § 64.2003(o).
40 See, e.g., Radio Station Authorization, File No. SES-LIC-19990604-00935, Call Sign E990225, grant date:
08/20/1999, expiration date: 08/20/2009; Radio Station Authorization, File No. SES-MOD-20000721-01188, Call
Sign E980299, grant date: 03/06/2001, expiration date: 8/20/2009.
41 Section 503(b)(2)(C) of the Act gives the Commission discretion to assess forfeitures for non-common carriers
that hold Commission licenses such as USAT of up to $16,000 for each violation or $112,000 for continuing
violations. 47 U.S.C. § 503(b)(2) (C); see also 47 C.F.R. § 1.80(b)(3). In 2008, the Commission amended Section
(continued….)
5

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11.
Accordingly, upon review of the Application for Review and the entire record herein, we
conclude that USAT has failed to demonstrate that the Bureau erred in imposing a forfeiture for USAT’s
violation of Section 222 of the Communications Act and Section 64.2009(e) of the Commission’s rules.
The Bureau properly decided the matters before it and we affirm the Bureau’s decision to impose a
$20,000 forfeiture in its Forfeiture Order and Memorandum Opinion and Order.

IV.

ORDERING CLAUSES

12.

ACCORDINGLY, IT IS ORDERED

that, pursuant to Section 405 of the Act and
Section 1.115 of the Commission’s rules, the Answer to Memorandum Opinion and Order filed by USA
Teleport, Inc., which we treat as an Application for Review,

IS DENIED

.
13.
It is

FURTHER ORDERED

that the Forfeiture Order and Memorandum Opinion and
Order

ARE AFFIRMED

and that pursuant to Section 503(b) of the Act, USA Teleport, Inc.

SHALL
FORFEIT

to the U.S. Government the sum of $20,000.
14.
Payment of the forfeiture shall be made in the manner provided for in Section 1.80 of the
Rules within thirty (30) calendar days after the release date of this Order on Review.42 If the forfeiture is
not paid within the period specified, the case may be referred to the U.S. Department of Justice for
enforcement of the forfeiture pursuant to Section 504(a) of the Act.43 USA Teleport, Inc. shall send
electronic notification of payment to Johnny Drake at johnny.drake@fcc.gov on the date said payment is
made.
15.
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.44 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:
Ÿ
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
(Continued from previous page)


1.80(b)(3) of the rules to increase the maximum forfeiture amounts in accordance with the inflation adjustment
requirements contained in the Debt Collection Improvement Act of 1996, 28 U.S.C. § 2461. See Amendment of
Section 1.80 of the Commission’s Rules and Adjustment for Forfeiture Maxima to Reflect Inflation
, Order, 23 FCC
Rcd 9845, 9847 (2008) (adjusting the maximum statutory amounts for non-common carriers and others not to
exceed $16,000 for a single violation and $112,500 for continuing violations). As the Bureau correctly found in the
Forfeiture Order and affirmed in the Memorandum Opinion and Order, USAT’s failure to file its 2007 CPNI
compliance certification was a “continuing violation until cured.” Forfeiture Order, 26 FCC Rcd at 2459, para. 8;
Memorandum Opinion and Order, 26 FCC Rcd at 6435, para. 12. Because USAT did not cure the violation until
September 10, 2008, over six months after the filing deadline, the Bureau was well within its statutory authority to
assess a $20,000 forfeiture for violation of the Act and our CPNI rules. While we acknowledge USAT’s
characterization of its service as VoIP long distance without ruling on whether, in fact, it is a VoIP provider or a
telecommunications service provider, we find that the classification of USAT's service has no bearing on our finding
of liability in this case.
42 47 C.F.R. § 1.80.
43 47 U.S.C. § 504(a).
44 An FCC Form 159 and detailed instructions for completing the form may be obtained at
http://www.fcc.gov/Forms/Form159/159.pdf.
6

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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.
Ÿ
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.
Ÿ
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.
16.
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 20554.45 If you have questions regarding payment procedures, please contact the
Financial Operations Group Help Desk by telephone, 1-877-480-3201, or by e-mail,
ARINQUIRIES@fcc.gov.
17.

IT IS FURTHER ORDERED

that a copy of this Order on Review shall be sent by
Certified Mail Return Receipt Requested and First Class Mail to USA Teleport, Inc. at 127th NE 167th
Street, Unit B, North Miami Beach, FL 33162.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary


45 See 47 C.F.R. § 1.1914.
7

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