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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of ) File No. EB-06-TC-3424
PhoneCo, LP ) NAL/Acct. No. 200732170046
Apparent Liability for Forfeiture ) FRN: 0008843955
)
FORFEITURE ORDER
Adopted: August 10, 2007 Released: August 10, 2007
By the Enforcement Bureau:
I. INTRODUCTION
1. In this Forfeiture Order ("Order"), we issue a monetary forfeiture in
the amount of four thousand dollars ($4,000) against PhoneCo, LP
("PhoneCo" or "Company"). PhoneCo violated a Commission order by failing
to respond to the directive of the Enforcement Bureau ("Bureau") to
provide certain information and documents. PhoneCo acted in willful or
repeated violation of Section 503(b) of the Communications Act of 1934, as
amended, ("Act") and Section 1.80 of the Commission's rules ("Rules").
2. On March 30, 2007, the Bureau issued to PhoneCo a Notice of Apparent
Liability for Forfeiture ("NAL") proposing a forfeiture in the amount of
four thousand dollars ($4,000) based on PhoneCo's apparent violation of
the Bureau's directive. The NAL gave PhoneCo the option of paying the
proposed forfeiture or of filing a response to the NAL stating why the
proposed forfeiture should either not be assessed or should be reduced.
The NAL was sent by certified mail to PhoneCo's last known address.
PhoneCo filed a response to the NAL on June 27, 2007. Based on the
information contained therein, we affirm this forfeiture.
II. BACKGROUND
3. The Bureau has been investigating the adequacy of procedures
implemented by telecommunications carriers to ensure confidentiality of
their subscribers' CPNI, based on concerns regarding the apparent
availability to third parties of sensitive, personal subscriber
information. For example, some companies, known as "data brokers," have
advertised the availability of records of wireless subscribers' incoming
and outgoing telephone calls for a fee. Data brokers have also advertised
the availability of call information that relates to certain landline toll
calls.
4. As part of our inquiry into these issues, the Bureau sent Letters of
Inquiry ("LOIs") to several carriers, including PhoneCo, directing them to
submit their certifications for the previous five (5) years prepared in
compliance with section 64.2009(e) of the Commission's rules. PhoneCo did
not respond to the LOI. Accordingly, on March 30, 2007, the Bureau issued
the NAL to PhoneCo for its failure to respond to the directive of the
Bureau.
5. On June 27, 2007, PhoneCo submitted a response to the NAL, which
explains the Company's reasons for failing to respond to the LOI.
PhoneCo states that it did realize that it had failed to respond to the
Bureau's request because it was in the process of changing legal counsel.
Specifically, it states that, "[d]ue to the transition, inadvertence
and/or mistake of the [former] counsel in Austin, who handled the CNPI
[sic] filings, it was not realized that PhoneCo, L.P.'s [LOI response] had
not been filed . . . ." PhoneCo requests that the NAL be reduced or
canceled, because the failure to timely respond was the result of a
mistake, and not willful or intentional behavior.
III. DISCUSSION
6. Section 503(b) of the Communications Act authorizes the Commission to
assess a forfeiture of up to $130,000 for each violation of the Act or of
any rule, regulation, or order issued by the Commission under the Act. The
Commission may assess this penalty if it determines that the carrier's
noncompliance is "willful or repeated." For a violation to be willful, it
need not be intentional. 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." In 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.
7. The Commission's forfeiture guidelines do not address the specific
violation at issue in this proceeding. In determining the proper
forfeiture amount in this case, however, we are guided by the principle
that there may be no more important obligation on a carrier's part than
protection of its subscribers' proprietary information. Consumers are
increasingly concerned about the security of their sensitive, personal
data that they must entrust to their various service providers, whether
they are financial institutions or telephone companies. Given the
increasing concern about the security of this data, and evidence that the
data appears to be widely available to third parties, we must take
aggressive, substantial steps to ensure that carriers implement necessary
and adequate measures to protect their subscribers' CPNI as required by
the Commission's existing CPNI rules.
8. In this case, PhoneCo argues that it had no knowledge of its failure to
respond to the Bureau's LOI. It asserts that it relied on, and evidently
believed, that its (then) legal counsel, made this filing. However, said
counsel did not file a response and did not inform the Company of this
failure. PhoneCo also explains that these events occurred during its
transition to new legal counsel. Thus, the Company asserts that the
violation was due to mistake, and therefore, not a willful or intentional
act. We find no merit in this explanation. Allowing a licensee to violate
our rules because of a misplaced trust in the competency of legal counsel
or because of the mismanagement of its affairs during a period of
transition does not serve the public interest. Thus, after fully
considering the facts and circumstances described herein, we believe the
forfeiture of $4,000 is warranted in this case.
9. Accordingly, IT IS ORDERED THAT, pursuant to Section 503(b) of the Act,
and Sections 0.111, 0.311 and 180(f)(4) of the Rules, PhoneCo, LP IS
LIABLE FOR A MONETARY FORFEITURE in the amount of four thousand dollars
($4,000) for willfully and repeatedly violating Section 503 of the Act and
Section 1.80 of the Rules within thirty (30) days of the release of this
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.
10. Payment of the forfeiture must be made by check or similar instrument,
payable to the order of the Federal Communication Commission. The payment
must include the NAL/Acct. No. and FRN No. referenced above. Payment by
check or money order may be mailed to Forfeiture Collection Section,
Finance Branch, Federal Communications Commission, P.O. Box 358340,
Pittsburgh, Pennsylvania 15251. Payment by overnight mail may be sent to
Mellon Client Service Center, 500 Ross Street, Room 670, Pittsburgh, PA
15262-0001, Attn.: FCC Module Supervisor. Payment by wire transfer may be
made to: ABA Number 043000261, receiving bank Mellon Bank, and account
number 911-6229. Please include your NAL/Acct. No. with your wire transfer
remittance. Requests for full payment under an installment plan should be
sent to: Chief, Revenue and Receivables Operations Group, 445 12th Street,
S.W., Washington, D.C. 20554.
5. IT IS FURTHER ORDERED that a copy of the Forfeiture Order shall be
sent by first class mail and certified mail return requested to PhoneCo,
LP, at its last known address, 7900 John Carpenter Freeway, Dallas, Texas
75242.
FEDERAL COMMUNICATIONS COMMISSION
Kris A. Monteith
Chief, Enforcement Bureau
47 U.S.C. S: 503(b).
47 C.F.R. S: 1.80.
PhoneCo LP, Notice of Apparent Liability for Forfeiture, 22 FCC Rcd 6318
(2007) ("NAL").
See Letter from Steven R. Shaver, Counsel for PhoneCo, LP, to Marcy
Greene, Deputy Division Chief, Telecommunications Consumers Division,
Enforcement Bureau, (filed June 27, 2007) ("NAL Response").
See, e.g. http://www.epic.org/privacy/iei/.
See id.
See LOI from Marcy Greene, Deputy Division Chief, Telecommunications
Division, Enforcement Bureau, to Peni Barfield, CEO, PhoneCo, LP (sent
December 26, 2006) ("LOI").
See NAL Response at 1-2.
Id. at 1.
Id. PhoneCo explains that both of its corporate sisters, Accutel of Texas
and Revolution Communications Ltd., timely filed their CPNI
certifications. Id.
Id. at 2.
Section 503(b)(2)(B) provides for forfeitures against common carriers of
up to $130,000 for each violation or each day of a continuing violation up
to a maximum of $1,325,000 for each continuing violation. 47 U.S.C. S:
503(b)(2)(B). See Amendment of Section 1.80 of the Commission's Rules and
Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 15 FCC Rcd
18221 (2000); Amendment of Section 1.80 of the Commission's Rules and
Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 19 FCC Rcd
10945 (2004) (increasing maximum forfeiture amounts to account for
inflation).
47 U.S.C. S: 503(b)(1)(B). The Commission has authority under this section
of the Act to assess a forfeiture penalty against a common carrier if the
Commission determines that the carrier has "willfully or repeatedly"
failed to comply with the provisions of the Act or with any rule,
regulation, or order issued by the Commission under the Act. The section
provides that the Commission must assess such penalties through the use of
a written notice of apparent liability or notice of opportunity for
hearing. See 47 U.S.C. S: 503(b)(4)(A). Here, as described above, AT&T's
actions were willful as it apparently failed to prepare the required
compliance certification.
Southern California Broadcasting Co., Memorandum Opinion and Order, 6 FCC
Rcd 4387 (1991).
See 47 U.S.C. S: 503(b)(2)(D); see also The Commission's Forfeiture Policy
Statement and Amendment of Section 1.80 of the Commission's Rules, Report
and Order, 12 FCC Rcd 17087 (1997) ("Forfeiture Policy Statement"); recon.
denied, 15 FCC Rcd 303 (1999).
Forfeiture Policy Statement, 12 FCC Rcd at 17098-99, P: 22.
See, e.g., In the matter of Liability of Triad Broadcasting Company, Inc.,
Licensee of Radio Station WSEZ (FM) Winston-Salem, North Carolina for
Forfeiture, Memorandum Opinion and Order, 96 FCC 2d 1235 (1984) (citations
omitted).
47 U.S.C. S: 503(b)(4)(A).
47 U.S.C. S: 503(b).
47 C.F.R. S:S: 0.111, 0.311, 1.80(f)(4).
47 U.S.C. S: 504(a).
(...continued from previous page)
(continued....)
Federal Communications Commission DA 07-3583
4
Federal Communications Commission DA 07-3583