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Forfeiture Order Issued to 88 Telecom Corporation

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Released: June 6, 2011

Federal Communications Commission

DA 11-999

Before the

Federal Communications Commission

Washington, D.C. 20554

)
In the Matter of
)
File No. EB-08-TC-2780
)
88 Telecom Corporation
)
NAL/Acct No. 200932170167
)
)

FRN: 0013372263

ORDER OF FORFEITURE

Adopted: June 3, 2011

Released: June 6, 2011

By the Chief, Telecommunications Consumers Division, Enforcement Bureau:

I.

INTRODUCTION AND BACKGROUND

1.
In this Order of Forfeiture,1 we assess a monetary forfeiture of twenty thousand
dollars ($20,000) against 88 Telecom Corporation ("88 Telecom"). 88 Telecom has willfully or
repeatedly violated section 222 of the Communications Act of 1934, as amended (the
"Communications Act" or "Act"),2 section 64.2009(e) of the Commission's rules,3 and the
Commission's EPIC CPNI Order4 by failing to timely file an annual compliance certification
with the Enforcement Bureau ("Bureau") for calendar year 2007 on or before March 1, 2008.
2.
88 Telecom is a prepaid calling card telecommunications carrier located in San
Francisco, California. As a telecommunications carrier, 88 Telecom is subject to the
requirements of section 222 of the Act and section 64.2009 of the Commission's rules. Section
222 imposes the general duty on all telecommunications carriers to protect the confidentiality of
their subscribers' proprietary information.5 As part of that obligation, carriers that receive or


1 The Commission has the authority to assess a forfeiture against any person who has "willfully or repeatedly failed
to comply with any of the provisions of this [Act] or of any rule, regulation, or order issued by the Commission
under this [Act] ...." 47 U.S.C. 503(b)(1).
2 47 U.S.C. 222.
3 47 C.F.R. 64.2009(e).
4 Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer
Proprietary Network Information and Other Customer Information; IP-Enabled Services
, CC Docket No. 96-115;
WC Docket No. 04-36, Report and Order and Further Notice of Proposed Rulemaking, 22 FCC Rcd 6927, 6953
(2007) ("EPIC CPNI Order"); aff'd sub nom. Nat'l Cable & Telecom. Assoc. v. FCC, 555 F.3d 996, (D.C. Cir.
2009).
5 Section 222 of the Communications Act, 47 U.S.C 222, provides that: "Every telecommunications carrier has a
duty to protect the confidentiality of proprietary information of, and relating to, other telecommunications carriers,
(continued....)

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DA 11-999

obtain customer proprietary network information ("CPNI") through the provision of
telecommunications services can only use, disclose, or allow access to that information in
connection with or to provide such telecommunications services.6
3.
The Commission adopted rules implementing section 222 of the Act.7 Section
64.2009 of these rules requires carriers to establish and maintain a system designed to ensure that carriers
adequately protect their subscribers' CPNI.8 Prior to the EPIC CPNI Order, section 64.2009(e) of
the Commission's rules required telecommunications carriers such as 88 Telecom to maintain
and make publicly available annual certifications of their CPNI compliance.9 The EPIC CPNI
Order
strengthened the CPNI rules by adding additional safeguards to protect CPNI against
unauthorized access and disclosure, including an obligation that carriers subject to the CPNI
rules file their annual certification with the Commission on or before March 1 of each year.10
Additionally, as part of their annual certification filing, carriers were required to provide "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."11
4.
On September 2, 2008, the Bureau sent a Letter of Inquiry ("LOI") to 88 Telecom
requesting copies of its timely filed CPNI compliance certificate for 2007, which was due by
(Continued from previous page)


equipment manufacturers, and customers, including telecommunication carriers reselling telecommunications
services provided by a telecommunications carrier."
6 The Act defines CPNI as "information that relates to the quantity, technical configuration, type, destination,
location, and amount of use of a telecommunications service, subscribed to by any customer of a
telecommunications carrier, and that is made available to the carrier by the customer solely by virtue of the carrier-
customer relationship" and "information contained in the bills pertaining to telephone exchange service or telephone
toll service received by a customer of a carrier" excluding subscriber list information. 47 U.S.C. 222(h)(1)(A)-
(B). The Act provides for certain limited exceptions to a carrier's obligation to protect CPNI. See 47 U.S.C.
222(d).
7 See Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer
Proprietary Network Information and Other Customer Information and Implementation of Non-Accounting
Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended,
CC Docket Nos. 96-115 and
96-149, Second Report and Order and Further Notice of Proposed Rulemaking, 13 FCC Rcd 8061, 8068-70, 7
(1998). See also Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of
Customer Proprietary Network Information and Other Customer Information and Implementation of the Non-
Accounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended
, CC Docket Nos.
96-115 and 96-149, Order on Reconsideration and Petitions for Forbearance, 14 FCC Rcd 14409 (1999);
Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer
Proprietary Network Information and Other Customer Information and Implementation of the Non-Accounting
Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended, CC Docket Nos. 96-115 and
96-149; 2000 Biennial Regulatory Review -- Review of Policies and Rules Concerning Unauthorized Changes of
Consumers' Long Distance Carriers, CC Docket No. 00-257
, Third Report and Order and Third Further Notice of
Proposed Rulemaking, 17 FCC Rcd 14860 (2002); EPIC CPNI Order.
8 47 C.F.R. 64.2009.
9 See EPIC CPNI Order, 22 FCC Rcd at 695354, 52.
10 Id. at 6953; 47 C.F.R. 64.2009(e).
11 EPIC CPNI Order, 22 FCC Rcd at 6953.
2

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DA 11-999

March 1, 2008, or an explanation as to why no certification was filed.12 88 Telecom responded
to the LOI and filed a CPNI certification for calendar year 2007.13 The Bureau concluded that 88
Telecom failed to submit satisfactory evidence of its timely filing of the annual CPNI
compliance certification. On February 24, 2009, the Bureau released the Omnibus NAL against
numerous companies, including 88 Telecom, proposing a monetary forfeiture of $20,000 for the
apparent failure to comply with section 64.2009(e) of the Commission's rules, and the
Commission's EPIC CPNI Order, and ordered 88 Telecom to either pay the proposed forfeiture
or file a written response within 30 days of the release date stating why the proposed forfeiture
should be reduced or canceled.14 88 Telecom submitted a response to the Omnibus NAL on
March 19, 2009, essentially arguing that it was unaware of the filing requirement and thus, the
violation was not willful.15

II.

DISCUSSION

5.
Section 64.2009(e) of the Commission's rules requires telecommunications
carriers such as 88 Telecom to file annually before March 1st a CPNI compliance certification
signed by an officer of the carrier.16 By its own admission, 88 Telecom failed to comply with
this Commission rule and is subject to forfeiture. Section 503(b) of the Communications Act
authorizes the Commission to assess a forfeiture against a common carrier of up to $150,000 for
each violation of the Act or of any rule, regulation, or order issued by the Commission under the
Act.17 The Commission may assess this penalty if it determines that the carrier's noncompliance
is "willful or repeated."18 For a violation to be willful, it need not be intentional.19 In exercising
our forfeiture authority, we are required to take into account "the nature, circumstances, extent,
and gravity of the violation and, with respect to the violator, the degree of culpability, any
history of prior offenses, ability to pay, and such other matters as justice may require."20 In


12 See Letter from Marcy Greene, Deputy Division Chief, Telecommunications Consumers Division, Enforcement
Bureau, FCC, to 88 Telecom Corp. (Sept. 2, 2008).
13 See 88 Telecom Corporation's Annual 47 C.F.R. 64.2009(e) CPNI Certification, filed Sept. 24, 2008.
14 Annual CPNI Certification, Omnibus Notice of Apparent Liability for Forfeiture, 24 FCC Rcd 2299 (Enf. Bur.
2009) ("Omnibus NAL").
15 See email from Alice Ou, 88 Telecom, to Mika Savir, Attorney, Telecommunications Consumers Division,
Enforcement Bureau, FCC, (Mar. 19, 2009) ("NAL Response").
16 47 C.F.R. 64.2009(e); see also EPIC CPNI Order, 22 FCC Rcd at 6953-54, 51-53.
17 47 U.S.C. 503(b)(2)(B); see also 47 C.F.R. 1.80(b)(2); Amendment of Section 1.80 of the Commission's Rules
and Adjustment of Forfeiture Maxima to Reflect Inflation
, Order, 23 FCC Rcd 9845 (2008) (inflation adjustment to
$150,000/$1,500,000); FCC Enforcement Advisory No. 2011-02, 26 FCC Rcd 650 (Enf. Bur. 2011). At the time
the Omnibus NAL was released the maximum forfeiture was $130,000 for each violation of the Act or of any rule,
regulation, or order issued by the Commission. See Omnibus NAL, 24 FCC Rcd at 2301, 5.
18 See 47 U.S.C. 503(b)(1)(B).
19 See, e.g., Southern California Broadcasting, 6 FCC Rcd at 4387-88, 5.
20 See 47 U.S.C. 503(b)(2)(E); see also The Commission's Forfeiture Policy Statement and Amendment of Section
1.80 of the Commission's Rules
, 12 FCC Rcd 17087, 17100-17101, 27 (1997) ("Forfeiture Policy Statement"),
recon. denied, 15 FCC Rcd 303 (1999).
3

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DA 11-999

addition, the Commission has established guidelines for forfeiture amounts and, where there is
no specific base amount for a violation, retained discretion to set an amount on a case-by-case
basis.21
6.
The Commission's Forfeiture Policy Statement does not establish a base forfeiture
amount for the failure to timely file an annual CPNI certification. The $3,000 base forfeiture
amount suggested in the Commission's Forfeiture Policy Statement for failure to file documents
generally is inadequate when applied to failure to file CPNI certifications. The Commission
adopted the annual CPNI certification filing requirement to "ensure that carriers regularly focus
their attention on their duty to safeguard CPNI . . . [and] remind carriers of the Commission's
oversight and high priority regarding carrier performance in this area."22 In the Omnibus NAL,
the Commission took into account the statutory factors for determining a forfeiture amount, the
gravity of the offense, Commission precedent involving violations of our CPNI rules, and the
fact that protection of a subscriber's CPNI is an important carrier obligation and the certification
filing is an important part of that obligation.23 Taking these factors into account, the Commission
proposed a forfeiture amount in the Omnibus NAL of $20,000. This amount is consistent with
other recent forfeiture orders.24 Further, we have examined 88 Telecom's response to the NAL,
pursuant to the statutory factors, our rules, and the Forfeiture Policy Statement and find that no
further downward adjustment from the $20,000 forfeiture amount is warranted.
7.
As a preliminary matter, 88 Telecom's failure to timely file its annual 2007 CPNI
certification is not disputed. By its own admission, 88 Telecom failed to file its CPNI
certification by the March 1st filing deadline.25 88 Telecom submitted the required certification
only after the Commission notified it that it was investigating 88 Telecom's compliance with our
rules and that it might be subject to enforcement action, including forfeitures. That 88 Telecom
may have been unaware that it was required to file an annual CPNI certification and then filed it
after it was notified by the Commission, does not rise to the level of a mitigating factor
warranting a downward adjustment.26 Ignorance of one's responsibility under the law is not a
mitigating factor.27


21 See Forfeiture Policy Statement, 12 FCC Rcd at 17098-99, 22.
22 EPIC CPNI Order, 22 FCC Rcd at 6953, 51
23 See Omnibus NAL, 24 FCC Rcd at 2302, 8; see also EPIC CPNI Order, 22 FCC Rcd at 6953, 51.
24 See USA Teleport, Inc., Apparent Liability for Forfeiture, EB-08-TC-5801, Order of Forfeiture, 26 FCC Rcd
2456 (Tel. Con. Div. 2011), recon. denied, Memorandum Opinion & Order, DA 11-802 (Enf. Bur. Apr. 29, 2011);
Think 12 Corporation d/b/a Hello Depot, Apparent Liability for Forfeiture, EB-08-TC-5708, Order of Forfeiture, 26
FCC Rcd 2135 (Tel. Con. Div. 2011); Nationwide Telecom, Inc., Apparent Liability for Forfeiture, EB-08-TC-4772,
Order of Forfeiture, 26 FCC Rcd 2440 (Tel. Con. Div. 2011); Calmtel USA, Inc., Apparent Liability for Forfeiture,
EB-08-TC-3240, Order of Forfeiture, 26 FCC Rcd 2445 (Tel. Con. Div. 2011); Diamond Phone, Inc., Apparent
Liability for Forfeiture, EB-08-TC-3704, Order of Forfeiture, 26 FCC Rcd 2451 (Tel. Con. Div. 2011).
25 See NAL Response at 1 ("[88 Telecom] wasn't aware of [the] annual CPNI filing requirement").
26 See id.
27 See Southern California Broadcasting, 6 FCC Rcd at 4387, 3; see also STI Prepaid, LLC, Notice of Apparent
Liability for Forfeiture, 25 FCC Rcd 17836, 17845, 20 (Enf. Bur. 2010) ("STI Prepaid") ("It is well established
that administrative oversight or inadvertence is not a mitigating factor warranting a downward adjustment of a
(continued....)
4

Federal Communications Commission

DA 11-999

8.
In addition, 88 Telecom failed to show past compliance with the Commission's
CPNI certification requirements. Prior to the annual certification filing requirement, carriers
were required to have a CPNI compliance plan and keep an annual CPNI compliance certificate
in their files (i.e., carriers were required to annually certify but were not required to file the
certification with the Commission).28 In lieu of an annual filing requirement, carriers were
required to produce their annual certifications for inspection upon Commission request.29 88
Telecom has failed to show that it was in compliance with the earlier certification requirement.30
Thus, the Commission cannot consider past CPNI compliance as a mitigating factor.31
9.
We also note that based on the revenue information provided by 88 Telecom, a
downward adjustment is not warranted due to an inability to pay the proposed forfeiture.

III.

CONCLUSION

10.
In the Omnibus NAL, the Bureau considered several factors including the amount
of forfeiture necessary to have the intended deterrent effect. The Bureau concluded that the goal
of deterring future non-compliance would be met by issuing forfeitures consistent with the
proposed amount. We take noncompliance with our CPNI rules very seriously. This forfeiture
order should advise 88 Telecom and other carriers that the protection of a subscriber's CPNI and
the annual CPNI compliance certification filing requirements are important carrier obligations.
(Continued from previous page)


forfeiture. Likewise, a violator's lack of knowledge or erroneous beliefs is not a mitigating factor warranting
reduction of a forfeiture."). This case is different than where the rule was recently modified and the violation was
due to a licensee's lack of actual knowledge of the rule change. Prior to adoption of the annual CPNI certification
filing requirement, our CPNI rules already required telecommunications carriers such as 88 Telecom to have a CPNI
compliance program and to have an officer of the company certify annually that the company was in compliance
with our CPNI rules. See EPIC CPNI Order, 22 FCC Rcd at 6953, 52. As discussed in paragraph 8, 88 Telecom
failed to show it had complied with the certification filings under the old rules let alone the new filing requirement.
Thus, any lack of knowledge in the instant case does not warrant a downward adjustment.
28 Omnibus NAL, 24 FCC Rcd at 2302, 7. This prior rule is discussed in the EPIC CPNI Order: "each
telecommunications carrier must have an officer, as an agent of the carrier, sign a compliance certificate on an
annual basis stating that the officer has personal knowledge that the company has established operating procedures
that are adequate to ensure compliance with the Commission's CPNI rules and to make that certification available to
the public." EPIC CPNI Order, 22 FCC Rcd at 6953, 52 (citation omitted).
29 Omnibus NAL, 24 FCC Rcd at 2302, 7.
30 The 2007 CPNI compliance certification 88 Telecom submitted to the Bureau was dated Sept. 24, 2008. 88
Telecom has failed to show that it had an earlier CPNI compliance certification.
31 Moreover, in a number of recent actions, the Commission has held that the failure to file forms is a continuing
violation until cured. See Annual CPNI Certification, Omnibus Notice of Apparent Liability for Forfeiture and
Order, 26 FCC Rcd 2160, 2162, 8 (Enf. Bur. 2011); STI Prepaid, LLC, Notice of Apparent Liability for Forfeiture,
25 FCC Rcd 17836, 17845, 20 (Enf. Bur. 2010); Champaign Telephone Company d/b/a CT Communications, Inc.,
Order and Notice of Apparent Liability for Forfeiture, 25 FCC Rcd 17814, 17818-18, 9 (Spec. Enf. Div. 2010);
Lightyear Network Solutions, LLC, Order and Notice of Apparent Liability for Forfeiture, 25 FCC Rcd 16212,
16217, 12 (Spec. Enf. Div. 2010); Alpheus Communications, LP, Notice of Apparent Liability for Forfeiture, 25
FCC Rcd 8993, 8998, 12 (Enf. Bur. 2010); Compass Global, Inc., Notice of Apparent Liability for Forfeiture, 23
FCC Rcd 6125, 6138-39, 31 (2008); Telrite Corp., Notice of Apparent Liability for Forfeiture and Order, 23 FCC
Rcd 7231, 7244, 30 (2008); VCI Company, Notice of Apparent Liability for Forfeiture and Order, 22 FCC Rcd
15933, 15940, 20 (2007). Thus, 88 Telecom continued to violate the certification filing requirement for calendar
year 2007 until it filed the certification.
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Federal Communications Commission

DA 11-999

IV.

ORDERING CLAUSES

11.
Accordingly,

IT IS ORDERED

, pursuant to section 503(b) of the
Communications Act of 1934, as amended, 47 U.S.C. 503(b), section 1.80 of the
Commission's rules, 47 C.F.R. 1.80, that 88 Telecom Corporation

SHALL FORFEIT

to the
United States government the sum of $20,000 for willfully or repeatedly violating the Act and
the Commission's rules.
12.
Payment of the forfeiture shall be made in the manner provided for in section 1.80
of the rules within thirty (30) days of the release of this Forfeiture Order. If the forfeiture is not
paid within the period specified, the case may be referred to the Department of Justice for
collection pursuant to section 504(a) of the Act. Payment of the forfeiture must be made by
check or similar instrument, payable to the order of the Federal Communications Commission.
The payment must include the NAL/Account No. and FRN referenced above. Payment by check
or money order may be mailed to Federal Communications Commission, P.O. Box 979088, St.
Louis, MO 63197-9000. Payment by overnight mail may be sent to U.S. Bank-Government
Lockbox #979088, SL-MO-C 2-GL, 1005 Convention Plaza, St. Louis, MO 63101. Payment by
wire transfer may be made to ABA Number 021030004, receiving bank TREAS/NYC, and
account number 27000001. For payment by credit card, an FCC Form 159 (Remittance Advice)
must be submitted. When completing the FCC Form 159, enter the NAL/Account Number in
block number 24A. 88 Telecom Corporation will also send electronic notification on the date
said payment is made to johnny.drake@fcc.gov. Requests for full payment under an installment
plan should be sent to: Chief Financial Officer -- Financial Operations, 445 12th Street, S.W.,
Room 1-A625, Washington, D.C. 20554. Please contact the Financial Operations Group Help
Desk at 1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions regarding
payment procedures.
13.

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 the company at 2525
Van Ness Avenue, #222, San Francisco, CA 94109.
FEDERAL COMMUNICATIONS COMMISSION
Richard A. Hindman
Chief
Telecommunications Consumers Division
Enforcement Bureau

6

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