**Before the**

Federal Communications Commission

**Washington, D.C. 20554**

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| In the Matter of                 | * | File No. EB-09-TC-120        |
|                                  | * |                              |
| Legacy Long Distance             | ) | NAL/Acct. No. 200932170079   |
| International, Inc.              | * |                              |
|                                  | * | FRN: 0003725322              |
| Apparent Liability for           |   |                              |
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**NOTICE OF APPARENT LIABILITY FOR FORFEITURE**

**Adopted: February 25, 2009 Released: February 25, 2009**

By the Chief, Enforcement Bureau:

# INTRODUCTION

1.  In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
    that Legacy Long Distance International, Inc. ("Legacy Long
    Distance" or "Company") apparently willfully or repeatedly violated
    section 222 of the Communications Act of 1934, as amended (the
    "Act"),[^1] section 64.2009(e) of the Commission's rules[^2] and the
    Commission's *EPIC CPNI* *Order.*[^3] Protection of CPNI is a
    fundamental obligation of all telecommunications carriers as
    provided by section 222 of the Act.[^4] Based upon our review of the
    facts and circumstances surrounding this apparent violation, we find
    that Legacy Long Distance is apparently liable for a monetary
    forfeiture in the amount of two thousand dollars (\$2000).[^5]
    Legacy Long Distance will have the opportunity to submit further
    evidence and arguments in response to this NAL to show that no
    forfeiture should be imposed or that some lesser amount should be
    assessed.[^6]

# BACKGROUND

2.  Section 222 imposes the general duty on all telecommunications
    carriers to protect the confidentiality of their subscribers'
    proprietary information.[^7] The Commission has issued rules
    implementing section 222 of the Act.[^8] The Commission required
    carriers to establish and maintain a system designed to ensure that
    carriers adequately protected their subscribers' CPNI. Section
    64.2009(e) is one such requirement.

3.  In 2006, some companies, known as "data brokers," advertised the
    availability of records of wireless subscribers' incoming and
    outgoing telephone calls for a fee.[^9] Data brokers also advertised
    the availability of records of certain landline toll calls.[^10] On
    April 2, 2007, the Commission strengthened its privacy rules with
    the release of the *EPIC CPNI Order,*[^11] which adopts additional
    safeguards to protect CPNI against unauthorized access and
    disclosure. The *EPIC CPNI Order* was directly responsive to the
    actions of databrokers, or pretexters, to obtain unauthorized access
    to CPNI.[^12] The *EPIC CPNI Order* and amended rule 47 C.F.R. §
    64.2009(e) require that all companies subject to the CPNI rules file
    annually, on or before March 1, a certification with the Commission
    that certifies to the company's compliance with the Commission's
    CPNI rules and provides an accompanying statement explaining how the
    company's procedures ensure that the company is or is not in
    compliance with the CPNI rules.[^13] Additionally, companies must
    now 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."[^14]

# DISCUSSION

4.  On March 3, 2008, Legacy Long Distance filed its annual CPNI
    compliance certificate with the Commission.[^15] The Bureau has
    determined that the CPNI compliance certificate filed by Legacy Long
    Distance does not meet the requirements of section 64.2009(e) of the
    Commission's rules. The Commission's rules require that
    telecommunications carriers file their annual compliance
    certification with the Bureau on or before March 1. Thus, on March
    1, Legacy Long Distance had a non-compliant CPNI certification on
    file with the Commission. In particular, Legacy Long Distance has
    failed to submit an annual CPNI compliance certificate that provides
    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. Accordingly, Legacy
    Long Distance's submission, on its face, does not comply with
    section 64.2009(e) of the Commission's rules. We conclude that
    Legacy Long Distance is in apparent violation of section 222 of the
    Act, section 64.2009(e) of the Commission's rules and the
    Commission's *EPIC CPNI* *Order*. For these apparent violations, we
    propose a forfeiture.

# FORFEITURE AMOUNT

5.  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.[^16] The Commission may assess this penalty if it
    determines that the carrier's noncompliance is "willful or
    repeated."[^17] For a violation to be willful, it need not be
    intentional.[^18] 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."[^19] 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.[^20]

6\. 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 protection of subscribers' proprietary information is an important
carrier obligation. Consumers are understandably 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 consumers' continued concern about the
security of this data, and evidence that the data appears to be
available to third parties, we must take serious steps to ensure that
carriers implement necessary and adequate measures to protect their
subscribers' CPNI, as required by the Commission's existing CPNI rules.

7\. In prior actions in 2006, the Commission issued Notices of Apparent
Liability for Forfeiture proposing forfeitures in the amount of
\$100,000 against carriers for violations of the Commission's CPNI
rules.[^21] Under the rules operative at that time, carriers were not
required to file the annual certification with the Commission but
instead were required to make the certificate available to the
Commission upon request. The Commission's investigations demonstrated
that some companies appeared to pay little heed to rules which placed a
duty upon them to maintain certifications and make the representations
therein that processes were in place to protect CPNI without the further
scrutiny of the Commission. Accordingly, a substantial forfeiture was
proposed.

8\. As explained above, the Commission strengthened the CPNI rules in
2007, in part, as a response to earlier investigations, and imposed,
among other things, the requirement that carriers submit the annual
certifications to the Commission rather than rely solely on non-filed
carrier certifications and representations of compliance with the rules,
without further scrutiny. We have conducted an extensive review of the
certifications filed with the Commission to satisfy the March 1, 2008,
filing deadline, as well as examined failures to satisfy the filing
requirement all together. Informed by this analysis and our earlier
investigations, we revise our forfeiture approach and adopt a maximum
proposed forfeiture of \$10,000 for the submission of an annual CPNI
certification that fails to meet the requirements of section
64.2009(e).[^22] This revised proposed forfeiture is based on a number
of factors. Specifically, we have considered compliance overall based on
our review of the annual submissions; the expanded scope of the new rule
to require additional types of information to be produced;[^23] and, the
amount of forfeiture necessary to have the intended deterrent effect.
With respect to this latter factor, we note that the vast majority of
the companies affected are smaller companies. Given this fact, and that
this is the first year of the filing requirement, we believe that the
goal of deterring future non-compliance with respect to the required
elements of section 64.2009(e) will be met by issuing proposed
forfeitures consistent with the maximum amount proposed herein. We take
noncompliance with our CPNI rules very seriously. To the extent that we
determine that the forfeiture approach adopted herein does not have the
intended deterrent effect, future noncompliance will face more severe
penalties.[^24]

9\. In determining the appropriate proposed forfeiture, we are cognizant
that certain violations are more technical in nature and do not greatly
inhibit the Commission's ability to judge the effectiveness of a
company's CPNI policies while others are more substantive in nature and
limit the usefulness of the certification in determining overall
compliance with the rules. In this case, Legacy Long Distance has
apparently failed to submit an annual CPNI compliance certificate that
provides 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. Based on the nature of this
noncompliance and all the facts and circumstances present in this case,
we believe the proposed forfeiture of two thousand dollars (\$2000) is
warranted.[^25]

10\. Legacy Long Distance will have the opportunity to submit further
evidence and arguments in response to this NAL to show that no
forfeiture should be imposed or that some lesser amount should be
assessed.[^26] For example, Legacy Long Distance may present evidence
that it has compelling, financial arguments to reduce the proposed
forfeiture or that it has maintained a history of overall
compliance.[^27] The Commission will fully consider any such arguments
made by Legacy Long Distance in its response to this NAL.

# V. ordering clauses {#v.-ordering-clauses .unnumbered}

11. We have determined that Legacy Long Distance International, Inc., by
    failing to submit an annual CPNI compliance certificate that
    provides 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, has apparently
    willfully or repeatedly violated Section 222 of the Act, section
    64.2009(e) of the Commission's rules and the Commission's *EPIC
    CPNI* *Order*. We find Legacy Long Distance apparently liable for a
    forfeiture of two thousand dollars (\$2000).

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6.  ACCORDINGLY, IT IS ORDERED THAT, pursuant to Section 503(b) of the
    Communications Act of 1934, as amended,[^28] Section 1.80(f)(4) of
    the Commission's rules,[^29] and authority delegated by Sections
    0.111 and 0.311 of the Commission's rules,[^30] Legacy Long Distance
    International, Inc. IS LIABLE FOR A MONETARY FORFEITURE in the
    amount of two thousand dollars (\$2000) for willfully or repeatedly
    violating Section 222 of the Act, section 64.2009(e) of the
    Commission's rules and the Commission's *EPIC CPNI* *Order* by
    failing to submit a compliant annual CPNI certificate.

7.  IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
    Commission's rules,[^31] within thirty (30) days of the release date
    of this *Notice of Apparent Liability for Forfeiture*, Legacy Long
    Distance International, Inc. SHALL PAY the full amount of the
    proposed forfeiture or SHALL FILE a written statement seeking
    reduction or cancellation of the proposed forfeiture.

8.  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 Number and FRN
    Number 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-C2-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 23A (call
    sign/other ID), and enter the letters "FORF" in block number 24A
    (payment type code). Legacy Long Distance 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.

9.  The response, if any, must be mailed both to the Office of the
    Secretary, Federal Communications Commission, 445 12^th^ Street, SW,
    Washington, DC 20554, ATTN: Enforcement Bureau -- Telecommunications
    Consumers Division, and to Marcy Greene, Deputy Chief,
    Telecommunications Consumers Division, Enforcement Bureau, Federal
    Communications Commission, 445 12^th^ Street, SW, Washington, DC
    20554, and must include the NAL/Acct. No. referenced in the caption.

10. The Commission will not consider reducing or canceling a forfeiture
    in response to a claim of inability to pay unless the petitioner
    submits: (1) federal tax returns for the most recent three-year
    period; (2) financial statements prepared according to generally
    accepted accounting practices; or (3) some other reliable and
    objective documentation that accurately reflects the petitioner's
    current financial status. Any claim of inability to pay must
    specifically identify the basis for the claim by reference to the
    financial documentation submitted.

11. IT IS FURTHER ORDERED that a copy of this *Notice of Apparent
    Liability for Forfeiture* shall be sent by Certified Mail Return
    Receipt Requested and First Class Mail to the Company at 10833
    Valley View Street Suite 150 Cypress, California 90630 and National
    Registered Agents, Inc. 1090 Vermont Avenue, N.W. Suite 910
    Washington, D.C. 20005.

    FEDERAL COMMUNICATIONS COMMISSION

    Kris Anne Monteith

    Chief, Enforcement Bureau

[^1]: 47 U.S.C. § 222.

[^2]: 47 C.F.R. § 64.2009(e).

[^3]: *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*, No. 07-132, (D.C. Cir. Decided Feb. 13, 2009).

[^4]: CPNI is defined 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 customer-carrier
    relationship. *See* 47 U.S.C. § 222(h)(1)(A); 47 C.F.R. § 64.2003(d)

[^5]: *See* 47 U.S.C. § 503(b)(4)(A). 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.

[^6]: 47 U.S.C. § 503(b)(4)(C); 47 C.F.R. § 1.80(f)(3).

[^7]: 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, equipment manufacturers, and
    customers, including telecommunication carriers reselling
    telecommunications services provided by a telecommunications
    carrier." Prior to the 1996 Act, the Commission had established CPNI
    requirements applicable to the enhanced services operations of AT&T,
    the Bell Operating Companies ("BOCs"), and GTE, and the customer
    premises equipment ("CPE") operations of AT&T and the BOCs, in the
    Computer II, Computer III, GTE Open Network Architecture ("ONA"),
    and BOC CPE Relief proceedings. *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,
    para. 7 (1998) ("*CPNI Order"*) (describing the Commission's privacy
    protections for confidential customer information in place prior to
    the 1996 Act).

[^8]: *See CPNI Order*. *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, FCC 99-223, *Order on
    Reconsideration and Petitions for Forbearance* 14 FCC Rcd 14409
    (1999); *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*, *supra.* n.3.

[^9]: *See, e.g.,* [http://www.epic.org/privacy/iei/]{.underline}.

[^10]: *See id.*

[^11]: *EPIC CPNI Order*, 22 FCC Rcd 6927.

[^12]: *Id.* at 6928.

[^13]: *Id.* at 6953; 47 C.F.R. § 64.2009(e). Prior to the issuance of
    the *EPIC CPNI Order,* carriers were required to maintain in their
    files an annual CPNI Certification that certified to the company's
    compliance with the Commission's CPNI rules and provided an
    accompanying statement explaining how the company's procedures
    ensure that the company is or is not in compliance with the CPNI
    rules. The rule also required carriers to make the certification
    available upon request.

[^14]: 22 FCC Rcd at 6953. Specifically, pursuant to section 64.2009(e):
    A telecommunications carrier must have an officer, as an agent of
    the carrier, sign and file with the Commission a compliance
    certificate on an annual basis. The officer must state in the
    certification that he or she has personal knowledge that the company
    has established operating procedures that are adequate to ensure
    compliance with the rules in this subpart. The carrier must provide
    a statement accompanying the certification explaining how its
    operating procedures ensure that it is or is not in compliance with
    the rules in this subpart. In addition, the carrier must include 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. This filing must be made annually with
    the Enforcement Bureau on or before March 1 in EB Docket No. 06-36,
    for data pertaining to the previous calendar year. 47 C.F.R. §
    64.2009(e).

[^15]: March 1, 2008, fell on a weekend. Accordingly, filings made on
    the next business day were considered timely filed.

[^16]: 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. § 503(b)(2)(B). *See Amendment of
    Section 1.80 of the Commission's Rules and Adjustment of Forfeiture
    Maxima to Reflect Inflation*, 15 FCC Rcd 18221 (2000); *Amendment of
    Section 1.80 of the Commission's Rules and Adjustment of Forfeiture
    Maxima to Reflect Inflation*, 19 FCC Rcd 10945 (2004) (increasing
    maximum forfeiture amounts to account for inflation).

[^17]: 47 U.S.C. § 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); *see also* 47 U.S.C. § 503(b)(4)(A) (providing that the
    Commission must assess such penalties through the use of a written
    notice of apparent liability or notice of opportunity for hearing).

[^18]: *Southern California Broadcasting Co.*, 6 FCC Rcd 4387 (1991).

[^19]: *See* 47 U.S.C. § 503(b)(2)(D); *see also The Commission's
    Forfeiture Policy Statement and Amendment of Section 1.80 of the
    Commission's Rules*, 12 FCC Rcd 17087 (1997) ("*Forfeiture Policy
    Statement"*); *recon. denied*, 15 FCC Rcd 303 (1999).

[^20]: *Forfeiture Policy Statement,* 12 FCC Rcd 17098-99, ¶ 22.

[^21]: *See*, *e.g.*, *AT&T, Inc*., Notice of Apparent Liability for
    Forfeiture, 21 FCC Rcd 751 (Enf. Bur. 2006); *Alltel Corp*., Notice
    of Apparent Liability for Forfeiture, 21 FCC Rcd 746 (Enf. Bur.
    2006); *Cbeyond Communications LLC*, Notice of Apparent Liability
    for Forfeiture, 21 FCC Rcd 4316 (Enf. Bur. 2006).

[^22]: *See* n.14.

[^23]: Because the *EPIC CPNI Order* took effect on December 8, 2007,
    the new reporting requirements were only in effect from that date
    until the end of the calendar year.

[^24]: The Commission retains the discretion to impose a higher
    forfeiture in cases of future noncompliance.

[^25]: 47 U.S.C. § 503(b)(4)(A).

[^26]: 47 U.S.C. § 503(b)(4)(C); 47 C.F.R. § 1.80(f)(3).

[^27]: 47 C.F.R. § 1.80(b)(4) (discussing factors the Commission or its
    designee will consider in deciding appropriate forfeiture amount).

[^28]: 47 U.S.C. § 503(b).

[^29]: 47 U.S.C. § 1.80(f)(4).

[^30]: 47 C.F.R. §§ 0.111, 0.311.

[^31]: 47 C.F.R. § 1.80.