**Before the**

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | File No. EB-04-IH-0587       |
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| Telecom Management, Inc.         | ) | NAL/Acct. No. 200532080142   |
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ORDER OF fORFEITURE

**Adopted: September 14, 2006 Released: September 15, 2006**

By the Commission:

# INTRODUCTION

1.  In this Order of Forfeiture, we assess a monetary forfeiture of
    \$237,992 against Telecom Management, Inc. ("TMI") for willful and
    repeated violations of the Communications Act of 1934, as amended
    (the "Act"), and the Commission's rules. For the reasons set forth
    below, we find that TMI willfully and repeatedly violated the Act
    and the Commission's rules by failing to contribute to the Universal
    Service Fund ("USF")[^1] and failing to pay its regulatory fees.[^2]

# background

2.  The facts and circumstances surrounding this case are set forth in
    more detail in the Notice of Apparent Liability and Order ("*NAL*"
    or "*TMI NAL*")[^3] previously issued by the Commission and need not
    be repeated here at length. TMI is a Maine-based telecommunications
    provider that offers long distance plans, toll free numbers, and
    phone cards.[^4] In 2002, it began providing these services by
    reselling intrastate, interstate, and international long-distance
    services purchased from Global Crossing Bandwidth, Inc. ("Global
    Crossing").[^5] As such, TMI is subject to the obligations of
    section 254(d) of the Act and sections 54.706, 1.1154, and
    1.1157(a)(1) of our rules. Section 254(d) of the Act requires, among
    other things, that "\[e\]very telecommunications carrier
    \[providing\] interstate telecommunications services . . .
    contribute, on an equitable and nondiscriminatory basis, to the
    specific, predictable, and sufficient mechanisms established by the
    Commission to preserve and advance universal service."[^6] Section
    54.706 of the Commission's rules requires all telecommunications
    carriers that provide interstate telecommunications services and
    certain other providers of interstate telecommunications to
    contribute to the USF based on their projected collected end-user
    telecommunications revenues, and on a contribution factor determined
    quarterly by the Commission.[^7] Sections 1.1154 and 1.1157 require
    that interstate telecommunications carriers pay regulatory fees on
    the basis of interstate and international end-user revenue.[^8]

3.  The Universal Service Administrative Company ("USAC") administers
    the universal service support mechanisms and performs billing and
    collection functions.[^9] The Commission requires carriers to
    provide revenue information to USAC on FCC Form 499
    ("Telecommunications Reporting Worksheet") on a quarterly and annual
    basis,[^10] and USAC uses that information to determine the amount
    of each carrier's universal service contributions on a quarterly
    basis, with a yearly true-up using the Annual Worksheet.[^11] USAC
    bills carriers, including TMI, each month based on their quarterly
    contribution amount.[^12]

4.  In 2004, the Enforcement Bureau ("Bureau") sought to identify
    resellers of telecommunications service that had failed to register
    as telecommunications service providers with the Commission as well
    as satisfy various other Commission program requirements.[^13] To
    this end, on March 30, 2004 and June 18, 2004, the Bureau's audit
    staff sent letters to TMI requesting information pertaining to its
    compliance with the Commission's registration requirement.[^14]
    After receiving no response, the Bureau issued a letter of inquiry
    ("LOI") on November 18, 2004.[^15] The December 20, 2004 LOI
    response[^16] and January 17, 2005 supplemental response[^17] filed
    by TMI confirmed that the carrier failed to contribute to the USF
    and pay regulatory fees while operating as an interstate
    telecommunications carrier for more than two years despite having
    collected several hundred thousand dollars in USF fees from its
    customers.[^18]

5.  On August 12, 2005, the Commission issued an *NAL* against TMI
    proposing a forfeiture of \$280,000 for the apparent willful and
    repeated failure to pay universal service contributions on three
    occasions from August to October 2004 and failure to timely make a
    regulatory fee payment in August 2004. TMI submitted a response to
    the *NAL* on August 24, 2005.[^19]

6.  Under section 503(b)(1) of the Act, any person who is determined by
    the Commission to have willfully or repeatedly failed to comply with
    any provision of the Act or any rule, regulation, or order issued by
    the Commission shall be liable to the United States for a forfeiture
    penalty.[^20] Section 312(f)(1) of the Act defines willful as "the
    conscious and deliberate commission or omission of \[any\] act,
    irrespective of any intent to violate" the law.[^21] The legislative
    history to section 312(f)(1) of the Act clarifies that this
    definition of willful applies to both sections 312 and 503(b) of the
    Act,[^22] and the Commission has so interpreted the term in the
    section 503(b) context.[^23] The Commission may also assess a
    forfeiture for violations that are merely repeated, and not
    willful.[^24] "Repeated" means that the act was committed or omitted
    more than once, or lasted more than one day.[^25] To impose such a
    forfeiture penalty, the Commission must issue a notice of apparent
    liability and the person against whom the notice has been issued
    must have an opportunity to show, in writing, why no such forfeiture
    penalty should be imposed.[^26] The Commission will then issue a
    forfeiture if it finds by a preponderance of the evidence that the
    person has willfully or repeatedly violated the Act or a Commission
    order or rule.[^27]

7.  Section 503(b)(2)(B) of the Act authorizes the Commission to assess
    a forfeiture of up to \$120,000 for each violation or each day of a
    continuing violation, up to a statutory maximum of \$1.2 million for
    a single act or failure to act for violations occurring before
    September 7, 2004, and up to \$130,000 for each violation or each
    day of a continuing violation, up to a statutory maximum of \$1.325
    million for a single act or failure to act for violations occurring
    on or after September 7, 2004.[^28] In determining the appropriate
    forfeiture amount, we consider the factors enumerated in section
    503(b)(2)(D) of the Act, including "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."[^29]

# discussion

8.  As set forth below, we find by a preponderance of the evidence that
    TMI violated section 254(d) of the Act and sections 54.706(a),
    1.1154, and 1.1157(b)(1) of the Commission's rules by willfully and
    repeatedly failing to make contributions toward the Universal
    Service Fund and failing to pay regulatory fees to the
    Commission.[^30]

9.  In the *TMI NAL*, we proposed a forfeiture of \$280,000 for TMI's
    apparent willful and repeated violations of section 254(d) of the
    Act and sections 54.706(a), 1.1154, and 1.1157(b)(1)of the
    Commission's rules.[^31] We calculated this amount, consistent with
    Commission precedent, as follows. For TMI's apparent failure to pay
    universal service contributions, we applied a base forfeiture amount
    of \$20,000 for each of three months of nonpayment. We then added
    one-half of the approximately \$420,000 in unpaid universal service
    contributions, or \$210,000, to the base forfeiture for a proposed
    forfeiture of \$270,000. For TMI's apparent failure to pay
    regulatory fees, we applied a \$10,000 forfeiture. As explained
    below, we reduce the forfeiture amount by \$42,008 based on an USAC
    amendment to TMI's unpaid USF balance but otherwise reject TMI's
    various arguments to eliminate or reduce the forfeiture further. We
    therefore impose a forfeiture of \$237,992 against TMI.

## TMI's Violations Were Willful and Repeated

10. In the *TMI NAL* *Response*, TMI admits it failed to make USF
    contributions and pay regulatory fees prior to November 2004 but
    claims that its failures were neither willful nor repeated.[^32]
    Based on a preponderance of the evidence, and as discussed in more
    detail below, we reject TMI's claims. We find that it violated
    section 254(d) of the Act and sections 54.706, 1.1154 and
    1.1157(b)(1) of the Commission's rules by willfully and repeatedly
    failing to make any of its monthly universal service contribution
    payments for more than two years, including three such failures
    within the year prior to our issuing the *TMI NAL*, and by failing
    to pay any regulatory fees until December 2004.

11. TMI argues that it used a third-party vendor to handle all
    compliance obligations and it assumed all filings and payments,
    including the USF contributions and regulatory fee payments, were
    being made by the third-party vendor.[^33] TMI thus contends it
    cannot be held "solely liable" for these failures because the third
    party vendor, not TMI, failed to make the payments.[^34] TMI's
    attempt to hold this vendor liable for its own failure to live up to
    its regulatory obligations is misplaced given the Act's express
    provision holding that the actions of a common carrier's agent are
    attributable to the carrier. Specifically, section 217 of the Act
    states that "the act, omission, or failure of any...agent or other
    person acting...for any common carrier...shall in every case be also
    deemed to be the act, omission, or failure of such carrier."[^35]
    TMI, as a common carrier, is responsible pursuant to section 217 for
    any failures to comply with our rules by the third-party vendor
    acting as its agent. Accordingly, TMI is responsible for knowing and
    ultimately complying with its regulatory obligations and the failure
    of its agent does not exculpate TMI.[^36]

12. TMI also contends that its violations were not willful, as defined
    in section 312(f) of the Act, because it did not knowingly or
    deliberately fail to satisfy its regulatory obligations when its
    third-party vendor failed to pay the USF contributions and
    regulatory fees. As stated above, however, willfulness in the
    context of section 503(b) does not require that an entity know it is
    acting unlawfully, but merely that it knows it is engaged in the
    conduct constituting the rule violations.[^37] Therefore, TMI
    (acting through its vendor) willfully failed to pay USF
    contributions and regulatory fees. As discussed above, TMI's use of
    a third-party vendor to satisfy its regulatory obligations does not
    shelter it from a finding of willfulness.

13. Similarly, we reject TMI's position that its actions were not
    willful based on factual distinctions between this case and the
    Commission's *Globcom* decision.[^38] TMI claims the Commission
    relied on *Globcom* in finding TMI willfully failed to make USF
    contributions and pay regulatory fees.[^39] Unlike *Globcom*, TMI
    states it filed some worksheets, and began making USF payments
    before it received notice from the Commission.[^40] We reject TMI's
    position. In the *TMI NAL*, the Commission cited to *Globcom* for
    various propositions (such as identifying the serious, negative
    impact failure to pay USF contributions has on the program and the
    forfeiture methodology), but did not rely on *Globcom* to establish
    that TMI acted willfully under the Act. TMI's attempt therefore to
    establish its lack of willfulness by distinguishing *Globcom* is
    wholly unpersuasive.

14. TMI also generally claims that its violations were not
    repeated.[^41] TMI however fails to provide any specific argument or
    cite to any legal rationale supporting this claim, discussing only
    its belief that its actions were not willful.[^42] As discussed
    above, "repeated" means the "commission or omission" of an act "more
    than once or...for more than one day."[^43] No evidence is offered
    to counter the *TMI NAL*'s apparent finding that TMI's violations
    were repeated. TMI failed to remit USF fees to USAC and to pay
    regulatory fees for more than two years. Therefore, we find that
    TMI's failures were repeated.

15. Finally, TMI argues it should not be held liable for forfeiture
    because it claims it never received the Audit Letters and TMI
    contends the Commission based its *NAL* findings on TMI's failure to
    respond to those letters.[^44] TMI's assertion is incorrect. TMI's
    failure to respond to those specific letters had no bearing on the
    Commission's decision to propose, or its calculation of, the
    forfeiture. As discussed herein and in the *TMI NAL*, we based the
    TMI forfeiture on TMI's failures to make required payments to the
    USF and the FCC and calculated the forfeiture based on Commission
    precedent unrelated to any failure to respond to Commission
    inquiries. No forfeiture was proposed in the *NAL* for TMI's failure
    to respond to any Commission communication.

## Forfeiture Amount 

16. In its response to the Commission's *TMI NAL*, TMI does not dispute
    the amount of the forfeiture assigned for failure to timely pay its
    regulatory fees.[^45] TMI does argue that the Commission should
    eliminate or reduce the portion of the forfeiture amount
    attributable to its USF violations because the amount of the
    forfeiture is in error and because TMI is unable to pay the
    \$280,000 forfeiture amount. After full consideration of all TMI's
    assertions, we reject TMI's claim that it is unable to pay the
    proposed forfeiture but, in light of new information provided by
    TMI, we find that the forfeiture amount should be reduced.

17. TMI first argues that the forfeiture amount is not warranted because
    the violations were committed by its vendor and therefore were not
    intentional or deliberate on TMI's part.[^46] TMI asserts "no
    justice will be served by tacking an upward adjustment or penalty
    based upon past occurrences which were non-deliberate,
    unintentional, and of which TMI was completely unaware."[^47] This
    argument merely re-packages TMI's already rejected position that it
    cannot be held liable for the actions of its vendor. As discussed
    above, TMI's failures were in fact both willful and repeated under
    the Act and Commission precedent and the proposed forfeiture was
    premised on these willful and repeated actions.[^48] Therefore, we
    reject TMI's attempt to have the USF forfeiture rescinded on this
    basis.

18. TMI also suggests it would be inappropriate to adjust the forfeiture
    upward given its efforts to come into compliance before it received
    the LOI.[^49] Initially, we note that our forfeiture methodology
    already takes into account any effort by TMI to pay down its balance
    because the upward adjustment is dependent on the outstanding USF
    balance. TMI's attempt to reduce or eliminate the upward adjustment
    because of its compliance efforts is misguided, however, considering
    the totality of its non-compliance. Specifically, the Commission
    based the upward adjustment on the seriousness, extensive period,
    and scope of TMI's universal service nonpayment violations.[^50]
    Prior to TMI's purported efforts to comply, it collected several
    hundred thousand dollars for USF from its end users, yet withheld
    USF payments for a period of over two years.[^51] Moreover, only
    after the Bureau's investigation began did TMI back-file all of the
    required forms that would permit USAC to calculate TMI's outstanding
    balance. Thus, regardless of TMI's purported pre-investigation
    efforts, there were significant and long-standing problems with
    TMI's compliance.[^52] TMI's conduct threatens the integrity and the
    viability of the universal service program. Based on the totality of
    the factors under consideration, we deny TMI's request to reduce the
    USF upward adjustment amount on this basis.

19. Finally, we conclude, notwithstanding the foregoing, that the amount
    of the forfeiture should be reduced by \$42,008 based on a revision
    to TMI's outstanding debt. TMI points out that the \$210,000 upward
    adjustment in the proposed forfeiture is incorrect because the USF
    past-due debt upon which it was based has been revised.[^53] As
    explained in the *TMI NAL* and consistent with the Commission
    precedent, the upward adjustment was based on one-half of the
    company's unpaid contributions, in this case determined by the
    past-due debt as of the date the investigation began.[^54] In
    support of its argument, TMI submitted with its response a
    Contribution Letter of Appeal it filed with USAC claiming that USAC
    overcharged TMI for USF past-due debt by \$77,773.81.[^55] On
    December 30, 2005, USAC acknowledged that TMI's past due debt should
    be reduced and determined it would credit TMI for overcharges of
    \$84,017.03.[^56] In light of USAC's decision to credit TMI for
    these overcharges, the USF outstanding balance is revised from
    \$420,000 to \$335,983, and, as a result, we revise the upward
    adjustment for TMI's failure to pay USF contributions to \$167,992
    (one-half of \$335,983).[^57]

## Ability to Pay 

20. We finally address TMI's claim that it is unable to pay a \$280,000
    forfeiture.[^58] In particular, TMI states that the forfeiture would
    increase its net loss for 2002, cause an overall net loss for 2003,
    and eliminate its reported profits for 2004.[^59]

21. Although ability to pay is a statutory factor that we must consider
    in setting a forfeiture amount, the Commission has repeatedly held
    that a company's gross revenues are the best indicator of its
    ability to pay assessed forfeitures.[^60] After reviewing the
    2002-2004 tax returns submitted by TMI in support of its claim, we
    find that TMI's gross revenues are sufficiently large relative to
    the adjusted forfeiture amount, and that the forfeiture amount
    represents a smaller percentage of TMI's gross revenues than that
    deemed not to be excessive by the Commission in other cases.[^61] We
    therefore reject TMI's contention that it would be unable to pay the
    proposed forfeiture and decline to reduce the forfeiture amount on
    that basis.

# CONCLUSION 

22. The facts show TMI withheld payments to Congressionally-mandated
    telecommunications programs for over two years despite collecting
    hundreds of thousands of dollars from its customers in USF charges.
    TMI also failed to timely pay its regulatory fees. In light of the
    seriousness, duration and scope of TMI's violations, we find that a
    forfeiture of \$237,992 is warranted. The forfeiture amount is
    composed of (1) a penalty of \$227,992 (the \$270,000 proposed in
    the NAL, less \$42,008 associated with adjustments to CSII's USF
    debt) for failing to make three monthly universal service
    contributions within one-year prior to the release of the *TMI NAL*
    and (2) a penalty of \$10,000 for failing to timely make its 2004
    regulatory fee program payment.

23. We note that TMI is subject to the Commission's "red light rule" as
    a result of any non-payment detailed above and the Commission will
    not act on, and may dismiss, any application or request for
    authorization filed by TMI in accordance with the Commission's
    rules.[^62]

# ORDERING CLAUSES

24. Accordingly, IT IS ORDERED THAT, pursuant to section 503(b) of the
    Act, 47 U.S.C. § 503(b), and section 1.80 of the Commission's rules,
    47 C.F.R. § 1.80, TMI SHALL FORFEIT to the United States government
    the sum of \$237,992 for willfully and repeatedly violating the Act
    and Commission's rules.

25. Payment of the forfeiture shall be made in the manner provided for
    in section 1.80 of the Commission's rules within 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.[^63]
    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/Acct. No. and FRN No.
    referenced above. Payment by check or money order may be mailed to
    Federal Communications Commission, P.O. Box 358340, Pittsburgh, PA
    15251-8340. Payment by overnight mail may be sent to Mellon Bank /LB
    358340, 500 Ross Street, Room 1540670, Pittsburgh, PA 15251. Payment
    by wire transfer may be made to ABA Number 043000261, receiving bank
    Mellon Bank, and account number 911-6106. Requests for full payment
    under an installment plan should be sent to: Associate Managing
    Director \-- Financial Operations, Room 1A625, 445 12^th^ Street,
    S.W., Washington, D.C., 20554.[^64]

26. IT IS FURTHER ORDERED that a copy of this FOREITURE ORDER shall be
    sent by certified mail, return receipt requested, to Sue Bouchard,
    Telecom Management, Inc., 583 Warren Avenue, Portland, ME 04103, and
    Leon Nowalsky, Counsel for Telecom Management, Inc., Nowalsky,
    Bronston & Gothard, APLLC, 3500 N. Causeway Blvd, Suite 1442,
    Metaire, LA 70002.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

[^1]: 47 U.S.C. § 254(d); 47 C.F.R. § 54.706(a).

[^2]: 47 C.F.R. §§ 1154, 1157(b)(1).

[^3]: *Telecom Management Inc.*, Notice of Apparent Liability and Order,
    20 FCC Rcd 14151 (2005) ("*TMI NAL*").

[^4]: *See* <http://support.pioneertelephone.com/test/support.asp?kb=42>
    (last accessed November 25, 2005).

[^5]: *See id*.; Letter from Leon L .Nowalsky, Nowalsky, Bronston &
    Gothard, Counsel for Telecom Management, Inc., to Hillary S.
    DeNigro, Deputy Chief, Investigations and Hearings Division,
    Enforcement Bureau, FCC, dated December 20, 2004 ("*TMI December 20,
    2004 Letter*"), Response to Inquiry 5.

[^6]: 47 U.S.C. § 254(d).

[^7]: 47 C.F.R. §§ 54.706, 54.709.

[^8]: 47 C.F.R. §§ 1.1154, 1.1157(b)(1).

[^9]: *See Changes to the Board of Directors of the National Exchange
    Carrier Association, Inc.*, Report and Order and Second Order on
    Reconsideration, 12 FCC Rcd 18400, 18415, ¶ 25 (1997) ("*NECA
    Changes Order*"); 47 C.F.R. § 54.702(b).

[^10]: 47 C.F.R. § 54.711.

[^11]: *See* 47 C.F.R. § 54.709(a).

[^12]: *See, e.g., Federal-State Joint Board on Universal Service*,
    Sixteenth Order on Reconsideration (in CC Docket No. 96-45), Eighth
    Report and Order (in CC Docket No. 96-45), and Sixth Report and
    Order (in CC Docket No. 96-262), 15 FCC Rcd 1679, 1687, ¶ 18 (1999);
    *Federal-State Board on Universal Service*, Further Notice of
    Proposed Rulemaking and Order, 15 FCC Rcd 19947, 19954, ¶ 17 (2000);
    *Federal-State Joint Board on Universal Service, 1998 Biennial
    Regulatory Review − Streamlined Contributor Reporting Requirements
    Associated with Administration of Telecommunications Relay Services,
    North American Numbering Plan, Local Number Portability, and
    Universal Service Support Mechanisms, Telecommunications Services
    for Individuals with Hearing and Speech Disabilities, and the
    Americans with Disabilities Act of 1990, Administration of the North
    American Numbering Plan and North American Numbering Plan Cost
    Recovery Contribution Factor and Fund Size, Number Resource
    Optimization, Telephone Number Portability, Truth-in-Billing and
    Billing Format,* Report and Order and Second Further Notice of
    Proposed Rulemaking, 17 FCC Rcd 24952, 24971-72, ¶ 35 (2002);
    *Changes to the Board of Directors of the National Exchange Carrier
    Association, Inc.*, *Federal-State Board on Universal Service*,
    Second Order on Reconsideration (in CC Docket No. 97-21), 12 FCC Rcd
    22423, 22425, ¶ 3 (1997). Carriers must pay by the date shown on the
    invoice from the Administrator. 47 C.F.R. § 54.711(a) ("The
    Commission shall announce by Public Notice published in the Federal
    Register and on its website the manner of payment and the dates by
    which payments must be made."). *See, e.g.*, *Proposed Third Quarter
    2003 Contribution Factor*, Public Notice, 18 FCC Rcd 11442 (Wireline
    Comp. Bur. 2003) ("Contribution payments are due on the date shown
    on the administrator invoice.").

[^13]: *See* 47 C.F.R. § 64.1195(a).

[^14]: *See* Letter from Hugh L. Boyle, Chief Auditor, Investigations
    and Hearings Division, Enforcement Bureau, FCC, to Telecom
    Management, Inc., dated March 30, 2004 (requesting confirmation that
    TMI had filed registration information pursuant to section
    64.1195(a) of the Commission's rules); Letter from Hugh L. Boyle,
    Chief Auditor, Investigations and Hearings Division, Enforcement
    Bureau, FCC, to Telecom Management, Inc., dated June 18, 2004 (again
    requesting confirmation that TMI had filed registration information
    pursuant to section 64.1195(a) of the Commission's rules) (together
    "Audit Letters").

[^15]: Letter from Hillary S. DeNigro, Deputy Chief, Investigations and
    Hearings Division, Enforcement Bureau, FCC, to Sue Bouchard, Telecom
    Management Inc., dated November 18, 2004.

[^16]: *See TMI December 20, 2004 Letter.*

[^17]: Letter from Leon L. Nowalsky, Nowalsky, Bronston & Gothard,
    Counsel for Telecom Management, Inc., to Hillary S. DeNigro, Deputy
    Chief, Investigations and Hearings Division, Enforcement Bureau,
    FCC, dated January 17, 2005 ("*TMI Supplemental Response*").

[^18]: TMI filed its registration on April 15, 2004 and a 499-Q due
    August 1, 2004. TMI then received its first bill from the Universal
    Service Administrative Company ("USAC") in October 2004 and, in
    December 2004, back-filed its 2002, 2003 and 2004 annual worksheets
    and its February 1 and May 1 quarterly worksheets.

[^19]: Letter from Leon L. Nowalsky, Attorney for Telecom Management,
    Inc., to William Davenport, Chief, Investigations and Hearings
    Division, Enforcement Bureau, Federal Communications Commission,
    dated August 24, 2005 ("*TMI NAL Response*").

[^20]: 47 U.S.C. § 503(b)(1)(B).

[^21]: 47 U.S.C. § 312(f)(1).

[^22]: H.R. Rep. No. 97-765, 97^th^ Cong. 2d Sess. 51 (1982).

[^23]: *See, e.g., Application for Review of Southern California
    Broadcasting Co.*, Memorandum Opinion and Order, 6 FCC Rcd 4387,
    4388 (1991) ("*Southern California Broadcasting Co.*").

[^24]: *See, e.g.,* *Callais Cablevision, Inc., Grand Isle, Louisiana*,
    Notice of Apparent Liability for Monetary Forfeiture, 16 FCC Rcd
    1359, 1362, ¶ 10 (2001) ("*Callais Cablevision*") (issuing a Notice
    of Apparent Liability for, *inter alia*, a cable television
    operator's repeated signal leakage).

[^25]: *Southern California Broadcasting Co.*, 6 FCC Rcd at 4388, ¶ 5;
    *Callais Cablevision, Inc.*, 16 FCC Rcd at 1362, ¶ 9.

[^26]: *See* 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).

[^27]: *See, e.g., SBC Communications, Inc*., Forfeiture Order, 17 FCC
    Rcd 7589, 7591, ¶ 4 (2002) ("*SBC Forfeiture Order*").

[^28]: 47 U.S.C. § 503(b)(2)(B); *see also* 47 C.F.R. § 1.80(b)(2). The
    Commission recently amended its rules to increase the maximum
    penalties to account for inflation since the last adjustment of the
    penalty rates. *See Amendment of Section 1.80(b) of the Commission's
    Rules and Adjustment of Forfeiture Maxima to Reflect Inflation*,
    Order, 19 FCC Rcd 10945 (2004).

[^29]: 47 U.S.C. § 503(b)(2)(D); *See The Commission's Forfeiture Policy
    Statement and Amendment of Section 1.80 of the Commission's Rules*,
    Report and Order, 12 FCC Rcd 17087, 17100, ¶ 27 (1997), *recon.
    denied*, 15 FCC Rcd 303 (1999); 47 C.F.R. § 1.80(b).

[^30]: 47 U.S.C. § 254(d); 47 C.F.R. §§ 54.706(a), 1.1154, 1.1157(b)(1).

[^31]: *TMI NAL*, 20 FCC Rcd at 14155-58, ¶¶ 11-19.

[^32]: *See TMI NAL Response* at 3.

[^33]: *See TMI NAL Response* at 3.

[^34]: *See id*.

[^35]: *See* 47 U.S.C. § 217.

[^36]: *See, e.g., All American Telephone Inc.*, Order of Forfeiture,
    16, FCC Rcd 16601, 16604 (2001) (noting that carrier is liable under
    section 217 for forgeries by agent without carrier's knowledge).

[^37]: 47 U.S.C. § 312(f)(1); 47 U.S.C. § 503(b).

[^38]: *See* *Globcom, Inc.*, Notice of Apparent Liability for
    Forfeiture and Order*,* 18 FCC Rcd 19893, 19896 (2003)
    ("*Globcom*"); *see also Globcom, Inc.*, Order of Forfeiture, FCC
    06-49 (rel. April 19, 2006).

[^39]: *See TMI NAL Response* at 4.

[^40]: *See id*.

[^41]: *See id*.

[^42]: *See id*. at 2-4.

[^43]: *Southern California Broadcasting*, 6 FCC at 4388, ¶ 5.

[^44]: *TMI NAL* *Response* at 2.

[^45]: *See TMI NAL Response* at 7.

[^46]: *See TMI NAL Response* at 5-6.

[^47]: *See TMI NAL Response* at 6.

[^48]: *See supra*, ¶¶ 6-8.

[^49]: TMI argues that the Commission used TMI's back filing and payment
    of past due amounts, presumably something for which it should be
    given credit, to "levy an upward adjustment." *See TMI NAL Response*
    at 5. This position misinterprets the Commission's action. We
    estimated TMI's liability from filed forms because that was the best
    evidence available at the time of the outstanding overdue debt to
    USAC. If TMI had not made the filing, we would have estimated the
    amount from the other financial information produced during the
    investigation. *See*, *e.g,*, *Carrera Communications, Inc*., 2005
    WL 1750417 (F.C.C.) at ¶ 27; *Telectronics, Inc*., 2005 WL 1750420
    (F.C.C.) at ¶ 33; *Communication Services Integrated, Inc.*, 2005 WL
    2861527 (F.C.C) at ¶ 27. The source of the estimate is not the cause
    of the upward adjustment.

[^50]: *See TMI NAL*, 20 FCC Rcd at 14157-58, ¶¶ 15-18.

[^51]: *See id*., 20 FCC Rcd at 14157-58, ¶¶ 17-18.

[^52]: *See id*.

[^53]: *See* Letter from Leon L. Nowalsky, Attorney for Telecom
    Management, Inc., to William Davenport, Chief, Investigations and
    Hearings Division, Enforcement Bureau, Federal Communications
    Commission, dated January 30, 2006, 1 ("*Supplemental NAL
    Response*"); *TMI NAL Response* at 4.

[^54]: *See TMI NAL* 20 FCC Rcd at 14158, ¶ 18.

[^55]: *See TMI NAL Response*, Exhibit B.

[^56]: Letter from Universal Service Administrative Company, to Kevin
    Photiades, Compliance Specialist, Telecom Management, Inc. d/b/a
    Pioneer Telephone, dated December 30, 2005 ("USAC Letter").

[^57]: TMI also argues that the successful appeal effectively removes
    the basis for the \$60,000 base forfeiture and the upward
    adjustment. *See* *Supplemental NAL Response* at 1; USAC Letter. We
    reject this argument because the successful appeal does not alter
    the fact that TMI failed to pay USF fees during the months August,
    September, and October of 2004, the period upon which the base
    forfeiture was premised, or the seriousness of TMI's withholding
    substantial USF payments for over two years, on which the upward
    adjustment was based.

[^58]: *See TMI NAL Response* at 6-7.

[^59]: *See id*.

[^60]: *See Forfeiture Policy Statement*, 12 FCC Rcd 17087, 17106, ¶ 43
    (1997), recon denied, 15 FCC Rcd 303 (1999) ("*Forfeiture Policy
    Statement*"); *PJB Communications of Virginia, Inc.*, 7 FCC Rcd
    2088, 2089, ¶ 8 (1992); *Independent Communications, Inc.*, 15 FCC
    Rcd 16060, 16060, ¶ 2 (2000).

[^61]: *See Alpha Ambulance, Inc.*, 19 FCC Rcd at 2548 n. 15; *Local
    Long Distance, Inc.*, 15 FCC Rcd 24385 (2000), *recon. denied,* 16
    FCC Rcd 10023 (2001); *Hoosier Broadcasting Corp.*, 14 FCC Rcd 3356
    (CIB 1999), *recon. denied*, 15 FCC Rcd 8640 (Enf. Bur. 2002); *PJB
    Communications of Virginia,* 7 FCC Rcd 2088 (1992). In this case,
    the forfeiture represents a smaller percentage of the violator's
    gross revenues than those issued in the *Local Long Distance, Inc.*
    (7.9 percent), and *Hoosier Broadcasting Corp.* (7.6 percent) cases.

[^62]: 47 C.F.R. § 1.1910.

[^63]: 47 U.S.C § 504(a).

[^64]: *See* 47 C.F.R. § 1.1914.