[Federal Register: February 2, 2005 (Volume 70, Number 21)]
[Notices]
[Page 5447-5449]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02fe05-66]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
[DA 05-112]
Notice of Suspension and of Proposed Debarment Proceedings;
Schools and Libraries Universal Service Support Mechanism
AGENCY: Federal Communications Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Enforcement Bureau (Bureau) gives notice of Inter-tel
Technologies, Inc.'s (Inter-Tel) suspension from the schools and
libraries universal service support mechanism. In addition, the Bureau
gives notice that debarment proceedings are commencing against Inter-
tel.
DATES: Opposition request must be received by February 22, 2005. An
opposition request by the party to be suspended must be received 30
days from the receipt of the suspension letter or by February 22, 2005.
The Bureau will decide any opposition request for reversal or
modification of suspension within 90 days of its receipt of such
requests.
FOR FURTHER INFORMATION CONTACT: Romanda Williams, Federal
Communications Commission, Enforcement Bureau, Investigations and
Hearings Division, Room 4-C330, 445 12th Street, SW., Washington DC
20554. Romanda Williams may be contacted by phone at (202) 418-1420 or
e-mail at Romanda.Williams@fcc.gov.
SUPPLEMENTARY INFORMATION: The Bureau has suspension and debarment
authority under 47 CFR 54.521 and 47 CFR 0.111(a)(14). Suspension will
help ensure that the party to be suspended cannot continue to benefit
from the schools and libraries mechanism pending resolution of the
debarment process. Attached is the suspension letter, Notice of
Suspension and of Proposed Debarment Proceeding, DA 05-112, which was
mailed to Inter-tel and released on January 19, 2005. The letter (1)
gives notice of the suspension and proposed debarment; (2) gives the
reasons for the proposed debarment; (3) explains the debarment
procedure; and (4) describes the potential effect of the debarment. The
complete text of the suspension letter is available for public
inspection and copying during regular business hours at the FCC
Reference Information Center, Portal II, 445 12th Street, SW., Room CY-
A257, Washington, DC 20554. In addition, the complete text is available
on the FCC's Web site at http://www.fcc.gov. The text may also be
purchased from the Commission's duplicating contractor, Best Copy and
Printing, Inc., Portals II, 445 12th Street, SW., Room CY-B402,
Washington, DC 20554, telephone (202) 488-5300 or (800) 378-3160,
facsimile (202) 488-5563, or via e-mail http://www.bcpiweb.com.
Federal Communications Commission.
William H. Davenport,
Chief, Investigations and Hearings Division, Enforcement Bureau.
The suspension letter follows:
January 19, 2005.
Via Certified Mail--Return Receipt Requested
Mr. Steven G. Mihaylo,
Chief Executive Officer, Intel-Tel Technologies, Inc., 1615 S 52nd
Street, Tempe, AZ 85281-6233.
Re: Notice of Suspension and of Proposed Debarment, File No. EB-05-
IH-0012
Dear Mr. Mihaylo: The Federal Communications Commission (``FCC''
or ``Commission'') has received notice of the January 5, 2005
conviction of Inter-Tel Technologies, Inc. (``Inter-Tel'') for mail
fraud and aiding and abetting in violation of 18 U.S.C. 1341 and 2,
and for conspiracy to suppress and eliminate competition in
violation of the Sherman Antitrust Act, 15
[[Page 5448]]
U.S.C. 1.\1\ Consequently, pursuant to 47 CFR 54.521, this letter
constitutes official notice of Inter-Tel's suspension from the
schools and libraries universal service support mechanism (``E-rate
program''). In addition, the Enforcement Bureau (``Bureau'') hereby
notifies Inter-Tel that we are commencing debarment proceedings
against it.\2\
---------------------------------------------------------------------------
\1\ United States v. Inter-Tel Technologies, Inc., No. CR-04-
399-CRB, Plea Agreement (N.D.Cal. filed Dec. 8, 2004) (``Inter-Tel
Plea Agreement''). The Order accepting this plea agreement was
signed by the Court on January 5, 2005, and entered on January 10,
2005.
\2\ 47 CFR 54.521; 47 CFR 0.111(a)(14) (delegating to the
Enforcement Bureau authority to resolve universal service suspension
and debarment proceedings pursuant to 47 CFR 54.521).
---------------------------------------------------------------------------
I. Notice of Suspension
Pursuant to section 54.521(a)(4) of the Commission's rules,\3\
Inter-Tel's conviction requires the Bureau to suspend it from
participating in any activities associated with or related to the
schools and libraries fund mechanism, including the receipt of funds
or discounted services through the schools and libraries fund
mechanism, or consulting with, assisting, or advising applicants or
service providers regarding the schools and libraries support
mechanism.\4\ Inter-Tel's suspension becomes effective upon the
earlier of its receipt of this letter or publication of notice in
the Federal Register.\5\
---------------------------------------------------------------------------
\3\ 47 CFR 54.521(a)(4). See Schools and Libraries Universal
Service Support Mechanism, Second Report and Order and Further
Notice of Proposed Rulemaking, 18 FCC Rcd 9202, 9225-9227, ]] 67-74
(2003) (``Second Report and Order'').
\4\ Second Report and Order, 18 FCC Rcd at 9225, ] 67; 47 U.S.C.
254; 47 CFR 54.502-54.503; 47 CFR 54.521(a)(4).
\5\ Second Report and Order, 18 FCC Rcd at 9226, ] 69; 47 CFR
54.521(e)(1).
---------------------------------------------------------------------------
Suspension is immediate pending the Bureau's final debarment
determination. Inter-Tel may contest this suspension or the scope of
this suspension by filing arguments in opposition to the suspension,
with any relevant documentation. Inter-Tel's request must be
received within 30 days after it receives this letter or after
notice is published in the Federal Register, whichever comes
first.\6\ Such requests, however, will not ordinarily be granted.\7\
The Bureau may reverse or limit the scope of suspension only upon a
finding of extraordinary circumstances.\8\ Absent extraordinary
circumstances, the Bureau will decide any request for reversal or
modification of suspension within 90 days of its receipt of such
request.\9\
---------------------------------------------------------------------------
\6\ Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47 CFR
54.521(e)(4).
\7\ Second Report and Order, 18 FCC Rcd at 9226, ] 70.
\8\ 47 CFR 54.521(e)(5).
\9\ See Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47
CFR 54.521(e)(5), 54.521(f).
---------------------------------------------------------------------------
II. Notice of Proposed Debarment
A. Reasons for and Cause of Debarment
The Commission has established procedures to prevent persons who
have ``defrauded the government or engaged in similar acts through
activities associated with or related to the schools and libraries
support mechanism'' from receiving the benefits associated with that
program.\10\ Based on the plea agreement upon which Inter-Tel's
conviction is based, Inter-Tel pled guilty to mail fraud and other
criminal offenses for activities in connection with its
participation in the E-rate program with the San Francisco Unified
School District (``SFUSD''). In connection with the mail fraud
offense charged against Inter-Tel, the company admitted that it: (1)
Assisted consultants in falsely describing equipment to be supplied
to SFUSD, by hiding equipment not eligible for funding under the E-
rate program in order to have the program pay for it; (2) learned
that consultants had submitted bills to the Universal Service
Administrative Company (``USAC'') with inflated prices, and did
nothing to inform USAC that the prices had been inflated by
approximately $26 million above the amounts originally bid for the
project; and (3) did nothing to disclose to the SFUSD superintendent
or school board that the funding requests to USAC had been increased
over the original amounts, that there were inflated estimates in the
bid documents, or that equipment ineligible for funding had been
hidden in documents submitted to USAC. In connection with the
antitrust crime charged against Inter-Tel, the company admitted that
it: (1) Participated in a conspiracy with one or more vendors of
equipment and services related to telecommunications, Internet
access and/or internal connections, with a purpose of suppressing
and eliminating competition for E-rate projects; and (2) reached an
agreement with its co-conspirators to frustrate the competitive
process in the E-rate projects by allocating contracts and
submitting fraudulent and non-competitive bids; and (3) submitted
fraudulent and non-competitive bids in accordance with the
conspiratorial agreement.\11\ These actions constitute the conduct
or transactions upon which this debarment proceeding is based.\12\
Moreover, Inter-Tel's conviction on the basis of these acts falls
within the categories of causes for debarment defined in section
54.521(c) of the Commission's rules.\13\ Therefore, pursuant to
section 54.521(a)(4) of the Commission's rules, Inter-Tel's
conviction requires the Bureau to commence debarment proceedings
against it.
---------------------------------------------------------------------------
\10\ Second Report and Order, 18 FCC Rcd at 9225, ] 66. The
Commission's debarment rules define a ``person'' as ``[a]ny
individual, group of individuals, corporation, partnership,
association, unit of government or legal entity, however,
organized.'' 47 CFR 54.521(a)(6).
\11\ See Inter-Tel Plea Agreement at 5-7.
\12\ Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47 CFR
54.521(e)(2)(i).
\13\ ``Causes for suspension and debarment are the conviction of
or civil judgment for attempt or commission of criminal fraud,
theft, embezzlement, forgery, bribery, falsification or destruction
of records, making false statements, receiving stolen property,
making false claims, obstruction of justice and other fraud or
criminal offense arising out of activities associated with or
related to the schools and libraries support mechanism.'' 47 CFR
54.521(c). Such activities ``include the receipt of funds or
discounted services through the schools and libraries support
mechanism, or consulting with, assisting, or advising applicants or
service providers regarding schools and libraries support mechanism
described in this section (47 CFR 54.500 et seq.).'' 47 CFR
54.521(a)(1).
---------------------------------------------------------------------------
B. Debarment Procedures
Inter-Tel may contest debarment or the scope of the proposed
debarment by filing arguments and any relevant documentation within
30 calendar days of the earlier of the receipt of this letter or of
publication in the Federal Register.\14\ Absent extraordinary
circumstances, the Bureau will debar Inter-Tel.\15\ Within 90 days
of receipt of any opposition to Inter-Tel's suspension and proposed
debarment, the Bureau, in the absence of extraordinary
circumstances, will provide Inter-Tel with notice of its decision to
debar.\16\ If the Bureau decides to debar Inter-Tel, its decision
will become effective upon the earlier of Inter-Tel's receipt of a
debarment notice or publication of the decision in the Federal
Register.\17\
---------------------------------------------------------------------------
\14\ See Second Report and Order, 18 FCC Rcd at 9226, ] 70; 47
CFR 54.521(e)(2(i), 54.521(e)(3).
\15\ Second Report and Order, 18 FCC Rcd at 9227, ] 74.
\16\ See id., 18 FCC Rcd at 9226, ] 70; 47 CFR 54.521(e)(5).
\17\ Id. The Commission may reverse a debarment, or may limit
the scope or period of debarment upon a finding of extraordinary
circumstances, following the filing of a petition by you or an
interested party or upon motion by the Commission. 47 CFR 54.521(f).
---------------------------------------------------------------------------
C. Effect of Debarment
If and when Inter-Tel's debarment becomes effective, it will be
prohibited from participating in activities associated with or
related to the schools and libraries support mechanism for at least
three years from the date of debarment.\18\ The Bureau may, if
necessary to protect the public interest, extend the debarment
period.\19\
---------------------------------------------------------------------------
\18\ Second Report and Order, 18 FCC Rcd at 9225, ] 67; 47 CFR
54.521(d), 54.521(g).
\19\ Id.
---------------------------------------------------------------------------
Please direct any responses to the following address: Romanda
Williams, Federal Communications Commission, Enforcement Bureau,
Investigations and Hearings Division, Room 4-C443, 445 12th Street,
SW., Washington, DC 20554.
If Inter-Tel submits its response via hand-delivery or non-
United States Postal Service delivery (e.g., Federal Express, DHL,
etc.), please send the response to Ms. Williams at the following
address: Federal Communications Commission, 9300 East Hampton Drive,
Capitol Heights, MD 20743.
If Inter-Tel has any questions, please contact Ms. Williams via
mail, by telephone at (202) 418-1420 or by e-mail at
romanda.williams@fcc.gov. If Ms. Williams is unavailable, you may
contact Eric Bash by telephone at (202) 418-1188 and by e-mail at
eric.bash@fcc.gov.
Sincerely yours,
William H. Davenport,
Chief, Investigations and Hearings Division, Enforcement Bureau.
cc: Leo P. Cunningham, Esq., Wilson Sonsini Goodrich & Rosati;
Michael F. Wood, Esq., United States Department of Justice,
Antitrust Division; Kristy Carroll,
[[Page 5449]]
Esq., USAC.
[FR Doc. 05-1860 Filed 2-1-05; 8:45 am]
BILLING CODE 6712-01-P