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Internet-based TRS Provider Settles Bureau Investigation

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Released: March 19, 2013

Federal Communications Commission

DA 13-444

Before the

Federal Communications Commission

Washington, DC 20554

)
File No.: EB-TCD-12-000003421
In the Matter of
)
)
Acct. No.: 201332170010
American Network, Inc.
)
)
FRN: 0004294856

ORDER

Adopted: March 19, 2013


Released: March 19, 2013

By the Chief, Enforcement Bureau:
1.
In this Order, we adopt the attached Consent Decree entered into between the
Enforcement Bureau (Bureau) of the Federal Communications Commission and American Network, Inc.
(ANI). The Consent Decree terminates the Bureau’s investigation into ANI’s compliance with Section
225 of the Communications Act of 1934, as amended,2 and Sections 64.604 and 64.611 of the
Commission’s rules3 concerning the provision of Telecommunications Relay Services and compensation
from the TRS Fund.
2.
The Bureau and ANI have negotiated the terms of the Consent Decree that resolves the
matters in the above-captioned investigation. A copy of the Consent Decree is attached hereto and
incorporated herein by reference.
3.
After reviewing the terms of the Consent Decree and evaluating the facts before us, we
find that the public interest would be served by adopting the Consent Decree and terminating the above
referenced investigation.
4.
Accordingly,

IT IS ORDERED

that, pursuant to Sections 4(i) and 503(b) of the
Communications Act of 1934, as amended,4 and Sections 0.111 and 0.311 of the Commission’s rules,5 the
Consent Decree attached to this Order

IS ADOPTED

.


1 This investigation was originally identified as file number EB-11-TC-021.
2 47 U.S.C § 225.
3 47 C.F.R. §§ 64.604, 64.611.
4 47 U.S.C. §§ 154(i), 503(b).
5 47 C.F.R. §§ 0.111, 0.311.

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DA 13-444

5.

IT IS FURTHER ORDERED

that the above-captioned investigation

IS

TERMINATED

.
6.

IT IS FURTHER ORDERED

that a copy of this Order and Consent Decree shall be
sent by first class mail and certified mail, return receipt requested, to Russell H. Fox, Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., 701 Pennsylvania Ave., NW, Suite 900, Washington, DC 20004.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief
Enforcement Bureau
2

Federal Communications Commission

DA 13-444

Before the

Federal Communications Commission

Washington, DC 20554

)
In the Matter of
)
File No.: EB-TCD-12-000003421
)
American Network, Inc.
)
NAL/Acct No.: 201332170010
)
)

FRN: 0004294856

CONSENT DECREE

The Enforcement Bureau of the Federal Communications Commission and American Network,
Inc. by their respective authorized representatives, hereby enter into this Consent Decree for the purpose
of terminating the Bureau’s investigation into ANI’s provision of Telecommunications Relay Services
and compensation from the TRS Fund, including the Company’s compliance with Section 225 of the
Communications Act of 1934, as amended,2 and Sections 64.604 and 64.611 of the Commission’s rules.3

I.

DEFINITIONS

1.
For the purposes of this Consent Decree, the following definitions shall apply:
(a) “Act” means the Communications Act of 1934, as amended, 47 U.S.C. § 151
et seq.
(b) “Adopting Order” means an order of the Bureau adopting the terms of this
Consent Decree without change, addition, deletion, or modification.
(c) “ANI” or “Company” means American Network, Inc. and its predecessors-in-
interest and successors-in-interest.
(d) “Bureau” means the Enforcement Bureau of the Federal Communications
Commission.
(e) “Commission” and “FCC” mean the Federal Communications Commission
and all of its bureaus and offices.
(f) “Communications Laws” means, collectively, the Act, the Rules, and the
published and promulgated orders and decisions of the Commission to which
ANI was subject to by virtue of its business activities conducted pursuant to its
certification as a provider of Internet-based TRS eligible to receive
reimbursements from the TRS Fund.
(g) “Compliance Reports” mean the reports ANI is required to file with the


1 The Investigation was originally identified as file number EB-11-TC-021.
2 47 U.S.C. § 225.
3 47 C.F.R. §§ 64.604, 64.611.

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DA 13-444

Commission pursuant to paragraph 15.
(h) “Effective Date” means the date on which the Bureau releases the Adopting
Order.
(i) “Internet-based TRS” means IP CTS, IP Relay, and VRS collectively.
(j) “IP CTS” means Internet Protocol Captioned Telephone Service, 47 C.F.R. §
64.601(12).
(k) “IP Relay” means Internet Protocol Relay Service, 47 C.F.R. § 64.601(a)(13).
(l) “Investigation” means investigative measures and reviews undertaken by the
Bureau regarding the Company’s compliance with Section 225 of the Act, 47
U.S.C. § 225 and the TRS Rules in File No.: EB-TCD-12-00000342 (formerly
EB-11-TC-021).
(m) “Parties” means ANI and the Bureau, each of which is a “Party.”
(n) “Reimbursement Dates” means the dates on which ANI received reimbursement
from the TRS Fund for minutes handled.
(o) “Rules” means the Commission’s regulations found in Title 47 of the Code of
Federal Regulations.
(p) “TRS” means Telecommunications Relay Services, 47 C.F.R. § 64.601(a)(22).
(q) “TRS Fund” or “Fund” means the Telecommunications Relay Services Fund, 47
C.F.R. § 64.604(c)(5)(iii).
(r) “TRS Fund administrator” or “Administrator” means the entity selected by the
Commission to administer the TRS Fund, 47 C.F.R. § 64.604(c)(5)(iii).
(s) “TRS Rules” means the regulations set forth at Section 64.601 through Section
64.613 of the Rules, 47 C.F.R. §§ 64.601 et. seq. and Commission orders
implementing and interpreting 47 U.S.C. § 225 of the Act, and any other Commission
rules and orders applicable to TRS providers.
(t) “Voluntary Contribution” means the payment made by or on behalf of ANI to the
United States Treasury pursuant to this Consent Decree and described at paragraph
17.
(u) “VRS” means Video Relay Service, 47 C.F.R. § 64.601(a)(27).
2

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DA 13-444

II.

BACKGROUND

2.
TRS enables persons who have a hearing or speech impairment to communicate using
voice communications services in a manner that is functionally equivalent to that of persons without such
disabilities.4 Section 225 of the Act requires the Commission to ensure that TRS is “available, to the
extent possible and in the most efficient manner” to persons with hearing or speech disabilities in the
United States.5 In meeting its obligations under the statute, the Commission has recognized numerous
forms of TRS.6
3.
TRS users do not pay to use the service. Rather, the cost of providing TRS is ultimately
paid for by the subscribers of telecommunications and interconnected VoIP services, through a surcharge
that providers of these services impose on the monthly bills of their subscribers.7 These providers pay the
monies they collect from the surcharges into the TRS Fund, which is then used to reimburse eligible TRS
providers for the cost of providing TRS.8 The TRS Rules require TRS providers seeking compensation
from the TRS Fund to submit true and adequate data to the TRS Fund Administrator, as well as to provide
upon request additional data the Administrator may need to verify payment requests.9
4.
In 2008, the Commission adopted a new numbering system, involving ten-digit numbers
linked to the North American Numbering Plan, for Internet-based TRS use, and imposed certain new
obligations on Internet-based TRS providers.10 Among other things, the Commission prohibited, after
December 31, 2008, an Internet-based TRS provider from providing (non-emergency) service to a new
user without first registering that user and assigning him or her a ten-digit number.11 With respect to
existing users, the Commission ultimately mandated that Internet-based providers cease providing (non-
emergency) service, absent registration and assignment of a ten-digit number, after November 12, 2009.12


4 See 47 U.S.C. § 225(a)(3). See also 47 C.F.R. § 64.601(a)(22).
5 47 U.S.C. § 225(b)(1).
6 47 C.F.R. § 64.601.
7 47 C.F.R. § 64.604(c)(5) (setting out the method for recovering the costs of TRS from subscribers of interstate
and intrastate telecommunications, e.g., mobile telephone, operator services, voice telephone services, toll free
number services, international, etc.); IP-Enabled Services, WC Docket No. 04-36, WT Docket No., 96-198, CG
Docket No. 03-123, CC Docket No. 92-105, Report & Order, 22 FCC Rcd 11275, 11283-291 (2007) (requiring
providers of interconnected VoIP services to contribute to the TRS Fund).
8 47 U.S.C. § 225(d)(3).
9 47 C.F.R. §§ 64.604(c)(5)(iii)(D), (E).
10 Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech
Disabilities, CG Docket No. 03-123, WC Docket No. 05-196, Report and Order and Further Notice of Proposed
Rulemaking, 23 FCC Rcd 11591 (2008) (Internet-Based TRS Order); Telecommunications Relay Services and
Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities,
CG Docket No. 03-123, WC
Docket No. 05-196, Second Report and Order and Order on Reconsideration, 24 FCC Rcd 791 (2008) (Second
Internet-Based TRS Report & Order
).
11 Internet-Based TRS Report & Order, 23 FCC Rcd at 11610.
12 Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech
Disabilities, CG Docket No. 03-123; WC Docket No. 05-196, Order, 24 FCC Rcd 8000, 8002 (2009).
3

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DA 13-444

5.
On January 23, 2012, the Bureau issued a Letter of Inquiry (LOI) and subpoena to ANI
seeking information to assess whether the Company complied with the TRS Rules and Commission
orders governing Internet-based TRS, including whether the Company had established a reasonable
process for verifying information provided by users registering for ten-digit numbers.13 The LOI and
subpoena required ANI to submit specific information associated with registrations completed since
January 1, 2009.
6.
On February 22, 2012, ANI submitted its response, which indicated that ANI may have
billed the TRS Fund for calls by unregistered Internet-based TRS users after the date that such conduct
was impermissible.14 In subsequent discussions, the Company acknowledged that it had determined that
ANI’s subcontractor failed to register any IP Relay users but still processed calls and ANI billed the TRS
Fund for them. After conducting an internal review, the Company determined that it was financially
unable to proceed as an ongoing operation and decided to cease providing TRS.
7.
ANI subsequently met with the Bureau for purposes of reaching agreement to resolve all
outstanding issues related to its compliance with the Act, the Rules, and Commission orders, and
terminating the Bureau’s Investigation.
8.
The Administrator is currently holding $183,462.65 that is associated with claims for
compensation filed by ANI.

III.

TERMS OF AGREEMENT

9.

Adopting Order

. The Parties agree that the provisions of this Consent Decree shall be
subject to final approval by the Bureau by incorporation of such provisions by reference in the Adopting
Order.
10.

Jurisdiction

. ANI agrees that the Bureau has jurisdiction over it and the matters
contained in this Consent Decree and that the Bureau has the authority to enter into and adopt this
Consent Decree.
11.

Effective Date; Violations

. The Parties agree that this Consent Decree shall become
effective on the Effective Date, as defined herein. As of the Effective Date, the Adopting Order and this
Consent Decree shall have the same force and effect as any other order of the Commission. Any violation
of the Adopting Order or of the terms of this Consent Decree shall constitute a separate violation of a
Commission order, entitling the Commission to exercise any rights and remedies attendant to the
enforcement of a Commission order.
12.

Termination of Investigation

. In express reliance on the covenants and representations
in this Consent Decree and to avoid further expenditure of public resources, the Bureau agrees to
terminate the Investigation. In consideration for the termination of the Investigation, ANI agrees to the
terms, conditions, and procedures contained herein. ANI also agrees that for a period of two years from
the Effective Date, neither the Company nor its principals will engage in any business activities related to
provisioning or otherwise providing any form of TRS (e.g., offer TRS, manage TRS call centers,
subcontract to provide any services) where the Company or any Company principal is reimbursed directly


13 See Letter from Richard A. Hindman, Chief, TCD, FCC Enforcement Bureau, to Kent Charugundla,
President, American Network, Inc., (January 23, 2012) (on file in EB-11-TC-021/EB-TCD-12-00000342).
14 See Letter from Kent Charugundla, President, American Network, Inc., to Sharon Lee, Deputy Division
Chief, TCD, FCC Enforcement Bureau (February 23, 2012) (on file in EB-11-TC-021/EB-TCD-12-00000342).
4

Federal Communications Commission

DA 13-444

or indirectly through payments from the TRS Fund. The Bureau further agrees that in the absence of new
material evidence, the Bureau will not use the facts developed in the Investigation through the Effective
Date, or the existence of this Consent Decree, to institute on its own motion any new proceeding, formal
or informal, or take any action on its own motion against ANI concerning the matters that were the
subject of the Investigation. The Bureau also agrees that in the absence of new material evidence it will
not use the facts developed in these Investigations through the Effective Date, or the existence of this
Consent Decree, to institute on its own motion any proceeding, formal or informal, or take any action on
its own motion against ANI with respect to ANI’s basic qualifications, including its character
qualifications, to be a Commission licensee or certified TRS provider, or to hold Commission
certifications, licenses, or authorizations. The Bureau represents that, except for the Investigation, it has
no other enforcement investigation or inquiry currently underway against ANI that involves the same
factual allegations underlying the Investigation.
13.

Representations; Warranties

. ANI warrants that in March 2012, the Company ceased
to provide Internet-based TRS and is no longer certified as an Internet-based TRS provider. ANI further
represents that the Company does not currently provide any form of TRS, directly or indirectly. ANI
agrees that the Company will notify the Chief, Telecommunications Consumers Division, Enforcement
Bureau, Federal Communications Commission, 445 12th Street, SW, Room 4-C224, Washington, DC
20554, with a copy submitted electronically to Sharon Lee at sharon.lee@fcc.gov and to
fccebaccess@fcc.gov ninety (90) calendar days prior to providing any form of TRS, directly or as a
contractor.
14.

Reporting Noncompliance

. ANI shall report any noncompliance with the TRS Rules
and with the terms and conditions of this Consent Decree within fifteen (15) calendar days after discovery
of such noncompliance. Such reports shall include a detailed explanation of each instance of
noncompliance. All reports of noncompliance shall be submitted to the Chief, Telecommunications
Consumers Division, Enforcement Bureau, Federal Communications Commission, 445 12th Street, SW,
Room 4-C224, Washington, DC 20554, with a copy submitted electronically to Sharon Lee at
sharon.lee@fcc.gov and to fccebaccess@fcc.gov.
15.

Compliance Reports

. For purposes of settling the matters set forth herein, ANI agrees
to submit to the Commission within thirty (30) calendar days after the Effective Date of this Consent
Decree a Compliance Report that: (i) identifies the date on which ANI ceased conducting any TRS
business; (ii) includes copies of all notices that ANI sent to its employees, independent contractors, and
Internet-based TRS users notifying them that ANI closed its TRS business; and (iii) includes copies of
any contracts or agreements that relate to the sale, use, transfer, or management of call centers, personnel,
and the infrastructure associated with ANI’s TRS business. ANI shall also file a Compliance Report
with the Commission six (6) and twelve (12) months after the Effective Date that: (i) confirms the status
of ANI’s business as it relates to TRS and (ii) includes a copy of any contract(s) and a detailed description
of any arrangement(s) the Company has entered into that relate to TRS. Both the initial and subsequent
compliance reports shall be submitted to the Chief, Telecommunications Consumer Division,
Enforcement Bureau, Federal Communications, 4-C224, 445 12th Street, S.W. Washington, D.C. 20554,
with a copy submitted electronically to Richard Hindman at richard.hindman@fcc.gov and to Sharon Lee
at sharon.lee@fcc.gov and to fccebaccess@fcc.gov.
16.

Termination Date

. Unless stated otherwise, the obligations set forth in paragraphs 14
and 15 of this Consent Decree shall expire twenty-four months (24) months after the Effective Date.
17.

Voluntary Contribution

. ANI agrees that it will make a Voluntary Contribution to the
United States Treasury in the amount of $59,019.25. Furthermore, ANI acknowledges and agrees that
upon execution of this Consent Decree, the amount of the Voluntary Contribution is a “Claim” or “Debt”
5

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DA 13-444

as defined in 31 U.S.C. § 3701(b)(1).15 The Debt may be fully satisfied by administrative offset initiated
by the Commission on the Effective Date.
18.

Reimbursement to the TRS Fund

. ANI agrees that it shall make a Refund Payment to
the TRS Fund within thirty (30) calendar days after the Effective Date totaling $124,443.40, which
includes accrued interest calculated from the Reimbursement Dates. ANI acknowledges and agrees that
upon execution of this Consent Decree, the amount of the Refund Payment is a “Claim” or “Debt” as
defined in 31 U.S.C. § 3701(b)(1). The Debt may be fully satisfied by administrative offset initiated by
the Commission on the Effective Date.
19.

Interest and Charges for Collection

. In the event the Debt cannot be satisfied by
administrative offset, then as to any remaining unpaid balance of the Debt, ANI will have committed an
event of default under this Consent Decree. Thereafter, automatically, and without further notice, the then
entire unpaid amount of the Debt shall accrue interest at a rate of 15.75% per annum from the date of the
event of default until payment in full. An event of default on either payment of the Voluntary
Contribution or the Refund Payment will result in a cross default on both amounts. Upon an event of
default, the then unpaid amount of the Debt together with interest, as aforesaid, any penalties permitted
and/or required by the law, including but not limited to 31 U.S.C. § 3717 and administrative charge(s),
plus the costs of collection, litigation, and attorneys’ fees, is accelerated and shall become immediately
due and payable, without notice, presentment, demand, protest, or notice of protest of any kind, all of
which are waived by ANI. Upon an event of default by nonpayment of the Debt, all procedures for
collection permitted by the Debt Collection Improvement Act of 199616 and other provisions of law17
may, at the Commission’s discretion, be initiated.
20.

Waivers

. ANI waives any and all rights it may have to seek administrative or judicial
reconsideration, review, appeal, or stay, or to otherwise challenge or contest the validity of this Consent
Decree and the Adopting Order, provided the Bureau issues an Adopting Order as defined herein. If
either Party (or the United States on behalf of the Commission) brings a judicial action to enforce the
terms of the Adopting Order, neither ANI nor the Commission shall contest the validity of the Consent
Decree or of the Adopting Order, and ANI shall waive any statutory right to a trial de novo. ANI hereby
agrees to waive any claims it may have under the Equal Access to Justice Act18 relating to the matters
addressed in this Consent Decree.
21.

Invalidity

. The Parties agree that if a court of competent jurisdiction renders any of the
provisions of the Adopting Order or the Consent Decree invalid or unenforceable, such invalidity or
unenforceability shall not invalidate or render unenforceable the entire Adopting Order or Consent
Decree, but rather the entire Adopting Order or Consent Decree shall be construed as if not containing the
particular invalid or unenforceable provision or provisions, and the rights and obligations of the Parties
shall be construed and enforced accordingly. In the event that this Consent Decree in its entirety is
rendered invalid by any court of competent jurisdiction, it shall become null and void and may not be
used in any manner in any legal proceeding.


15 Debt Collection Improvement Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321, 1358 (Apr. 26, 1996).
16 Id.
17 See 31 C.F.R. Parts 900-904; 47 C.F.R. § 1.1901, et seq.
18 Equal Access to Justice Act, Pub L. No 96-481, 94 Stat. 2325 (1980) (codified at 5 U.S.C. § 504); see also
47 C.F.R. §§ 1.1501-1.1530.
6

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DA 13-444

22.

Subsequent Rule or Order

. The Parties agree that if any provision of the Consent
Decree conflicts with any subsequent Rule or order adopted by the Commission (except an order
specifically intended to revise the terms of this Consent Decree to which ANI does not expressly consent)
that provision will be superseded by such Rule or Commission order.
23.

Successors and Assigns

. ANI agrees that the provisions of this Consent Decree shall be
binding on its successors, assigns, and transferees.
24.

Final Settlement

. The Parties agree and acknowledge that this Consent Decree shall
constitute a final settlement between the Parties with respect to the Investigations. The Parties further
agree that this Consent Decree does not constitute an adjudication on the merits, or a factual or legal
finding or determination regarding any compliance or noncompliance with the Communications Laws.
25.

Modifications

. This Consent Decree cannot be modified without the advance written
consent of both Parties.
26.

Paragraph Headings

. The headings of the paragraphs in this Consent Decree are
inserted for convenience only and are not intended to affect the meaning or interpretation of this Consent
Decree.
27.

Authorized Representative

. The individual signing this Consent Decree on behalf of
ANI represents and warrants that he is authorized by ANI to execute this Consent Decree and to bind ANI
to the obligations, including all payment obligations, set forth herein. The FCC signatory represents that
she is signing this Consent Decree in her official capacity and that she is authorized to execute this
Consent Decree.
28.

Counterparts

. This Consent Decree may be signed in any number of counterparts
(including by facsimile), each of which, when executed and delivered, shall be an original, and all of
which counterparts together shall constitute one and the same fully executed instrument.
_____________________________________ ___________________________________
P. Michele Ellison Kent Charugundla
Chief
President
Enforcement Bureau American Network, Inc.
_____________________________________ ___________________________________
Date
Date
7

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