# August 7, 2008

# **DA 08-1865**

# **[VIA CERTIFIED MAIL]{.underline}** 

## [RETURN RECEIPT REQUESTED AND FACSIMILE (415-773-5759)]{.underline}

Mr. William Holman

c/o Walter F. Brown, Jr., Esq.

Orrick, Herrington & Sutcliffe, LLP

The Orrick Building

405 Howard Street

San Francisco, CA 94105-2669

> **Re: Notice of Debarment, File No. EB-08-IH-1142**

Dear Mr. Holman:

Pursuant to section 54.8 of the rules of the Federal Communications
Commission (the "Commission"), by this Notice of Debarment you are
debarred from the schools and libraries universal service support
mechanism (or "E-Rate program") for a period of three years.[^1]

On May 19, 2008, the Enforcement Bureau (the "Bureau") sent you a Notice
of Suspension and Initiation of Debarment Proceedings (the "Notice of
Suspension")[^2] as a result of your guilty plea and subsequent
conviction of bid-rigging, in violation of 15 U.S.C. § 1, for your
activities as former Vice President of NEC-Business Network Services
("NEC-BNS") in connection with the Ceria Travis Academy E-Rate project
("Project"). You responded through counsel on June 13, 2008,[^3]
contesting certain language in the Notice of Suspension, specifically,
that you "entered into and engaged in a conspiracy with NEC-BNS and
other co-conspirators to suppress and eliminate competition by
submitting non-competitive bids for the Project and taking steps to
ensure the Project was awarded to NEC-BNS and co-conspirators."[^4]
Citing the Plea Agreement, you clarified that it was NEC-BNS employees
other than yourself that submitted non-competitive bids and that
employees of another company took steps to ensure the success of the
conspiracy by discouraging and disqualifying bids from
non-conspirators.[^5] You further assert, among other things, that you
entered into what you understood to be a lawful agreement, and that you
"subsequently became aware of problems with NEC-BNS's participation in
the E-Rate program and raised these concerns with \[your\]
superiors."[^6] In the Response, you do not dispute that you pled guilty
to a violation of 15 U.S.C. § 1, but request that the Commission's
record reflect the factual circumstances surrounding your offense.[^7]

We grant your request and incorporate the cited Plea Agreement language
in the record for this debarment proceeding. Based on the evidence in
the record, we conclude that your conduct, as described in the Plea
Agreement, constitutes the basis for your debarment, and your conviction
falls within the categories of causes for debarment under section
54.8(c) of the Commission's rules.[^8] For the foregoing reasons, you
are hereby debarred for a period of three years from the debarment date,
i.e., the earlier date of your receipt of this Notice of Debarment or
its publication date in the Federal Register.[^9] Debarment excludes
you, for the debarment period, from activities "associated with or
related to the schools and libraries support mechanism," including "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 the schools and libraries
support mechanism."[^10]

Sincerely,

Hillary S. DeNigro

> Chief

Investigations and Hearings Division

Enforcement Bureau

cc: Kristy Carroll, Esq., Universal Service Administrative Company (via
e-mail)

Michael Wood, Antitrust Division, United States Department of Justice

# 

# May 19, 2008

# **DA 08-1183**

# 

# **[VIA CERTIFIED MAIL]{.underline}** 

## [RETURN RECEIPT REQUESTED AND FACSIMILE (415-773-5759)]{.underline}

Mr. William Holman

c/o Melinda Haag, Esq.

Orrick, Herrington & Sutcliffe, LLP

The Orrick Building

405 Howard Street

San Francisco, CA 94105-2669

> **Re: Notice of Suspension and Initiation of Debarment Proceedings,**
>
> **File No. EB-08-IH-1142**

Dear Mr. Holman:

The Federal Communications Commission ("FCC" or "Commission") has
received notice of your conviction of bid rigging, in violation of 15
U.S.C § 1, in connection with your participation in the schools and
libraries universal service support mechanism ("E-Rate program").[^11]
Consequently, pursuant to 47 C.F.R. § 54.8, this letter constitutes
official notice of your suspension from the E-Rate program. In addition,
the Enforcement Bureau ("Bureau") hereby notifies you that we are
commencing debarment proceedings against you.[^12]

I.  **Notice of Suspension**

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.[^13] You pled guilty to bid rigging in connection with your
participation in the Ceria Travis Academy E-Rate project (the
"Project").[^14] Specifically, you admitted that, as former vice
president of sales for NEC Business Networks, Inc. ("NEC-BNS"), you
entered into and engaged in a conspiracy with NEC-BNS and other
co-conspirators to suppress and eliminate competition by submitting
non-competitive bids for the Project and taking steps to ensure that the
Project was awarded to NEC-BNS and co-conspirators.[^15]

Pursuant to section 54.8(a)(4) of the Commission's rules,[^16] your
conviction requires the Bureau to suspend you 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.[^17] Your suspension becomes effective upon
the earlier of your receipt of this letter or publication of notice in
the Federal Register.[^18]

Suspension is immediate pending the Bureau's final debarment
determination. In accordance with the Commission's debarment rules, you
may contest this suspension or the scope of this suspension by filing
arguments in opposition to the suspension, with any relevant
documentation. Your request must be received within 30 days after you
receive this letter or after notice is published in the Federal
Register, whichever comes first.[^19] Such requests, however, will not
ordinarily be granted.[^20] The Bureau may reverse or limit the scope of
suspension only upon a finding of extraordinary circumstances.[^21]
Absent extraordinary circumstances, the Bureau will decide any request
for reversal or modification of suspension within 90 days of its receipt
of such request.[^22]

II. **Initiation of Debarment Proceedings**

Your guilty plea and conviction of criminal conduct in connection with
the E-Rate program, in addition to serving as a basis for immediate
suspension from the program, also serves as a basis for the initiation
of debarment proceedings against you. Your conviction falls within the
categories of causes for debarment defined in section 54.8(c) of the
Commission's rules.[^23] Therefore, pursuant to section 54.8(a)(4) of
the Commission's rules, your conviction requires the Bureau to commence
debarment proceedings against you.

As with your suspension, you 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.[^24] Absent extraordinary
circumstances, the Bureau will debar you.[^25] Within 90 days of receipt
of any opposition to your suspension and proposed debarment, the Bureau,
in the absence of extraordinary circumstances, will provide you with
notice of its decision to debar.[^26] If the Bureau decides to debar
you, its decision will become effective upon the earlier of your receipt
of a debarment notice or publication of the decision in the Federal
Register.[^27]

If and when your debarment becomes effective, you will be prohibited
from participating in activities associated with or related to the
schools and libraries support mechanism for three years from the date of
debarment.[^28] The Bureau may, if necessary to protect the public
interest, extend the debarment period.[^29]

Please direct any response, if by messenger or hand delivery, to Marlene
H. Dortch, Secretary, Federal Communications Commission, 236
Massachusetts Avenue, N.E., Suite 110, Washington, D.C. 20002, to the
attention of Diana Lee, Attorney Advisor, Investigations and Hearings
Division, Enforcement Bureau, Room 4-C330, with a copy to Vickie
Robinson, Assistant Chief, Investigations and Hearings Division,
Enforcement Bureau, Room 4-C330, Federal Communications Commission. If
sent by commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail), the response should be sent to the
Federal Communications Commission, 9300 East Hampton Drive, Capitol
Heights, Maryland 20743. If sent by first-class, Express, or Priority
mail, the response should be sent to Diana Lee, Attorney Advisor,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12^th^ Street, S.W., Room 4-C330,
Washington, DC, 20554, with a copy to Vickie Robinson, Assistant Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12^th^ Street, S.W., Room 4-C330,
Washington, DC, 20554. You shall also transmit a copy of the response
via email to diana.lee@fcc.gov and to vickie.robinson@fcc.gov.

If you have any questions, please contact Ms. Lee via mail, by telephone
at (202) 418-1420 or by e-mail at diana.lee@fcc.gov. If Ms. Lee is
unavailable, you may contact Ms. Vickie Robinson, Assistant Chief,
Investigations and Hearings Division, by telephone at (202) 418-1420 and
by e-mail at vickie.robinson@fcc.gov.

> Sincerely yours,

Hillary S. DeNigro

Chief

Investigations and Hearings Division

Enforcement Bureau

cc: Kristy Carroll, Esq., Universal Service Administrative Company (via
e-mail)

Michael Wood, Antitrust Division, United States Department of Justice

[^1]: *See* 47 C.F.R. §§ 0.111(a)(14), 54.8.

[^2]: Letter from Hillary S. DeNigro, Chief, Investigations and Hearings
    Division, Enforcement Bureau, Federal Communications Commission, to
    Mr. William Holman, Notice of Suspension and Initiation of Debarment
    Proceedings, 23 FCC Rcd 8228 (Inv. & Hearings Div., Enf. Bur. 2008)
    (Attachment 1); *see* 73 Fed. Reg. 36082 (Jun. 25, 2008).

[^3]: Letter from Walter F. Brown, Jr., Orrick, Herrington & Sutcliffe,
    LLP to Diana Lee, Attorney Advisor, Investigations and Hearings
    Division, Enforcement Bureau, Federal Communications Commission,
    dated June 13, 2008 ("Holman Response" or "Response"), attaching
    *United States v. William Holman*, Criminal Docket No.
    3:05-CR-00208-CRB-012, Plea Agreement (N.D.Cal. filed and entered
    Apr. 6, 2007) ("Plea Agreement").

[^4]: Holman Response at 1; Notice of Suspension at 23 FCC Rcd at 8229.

[^5]: Holman Response at 1, citing Plea Agreement, para. 4(f).

[^6]: *Id.* at 2, citing Plea Agreement, para. 4(g).

[^7]: *Id*. at 2.

[^8]: 47 C.F.R. § 54.8(c).

[^9]: *See* Notice of Suspension, 23 FCC Rcd at 8230.

[^10]: *See* 47 C.F.R. §§ 54.8(a)(1), 54.8(a)(5), 54.8(d); Notice of
    Suspension, 23 FCC Rcd at 8231.

[^11]: Any further reference in this letter to "your conviction" refers
    to your guilty plea and subsequent conviction of bid rigging. *See
    United States v. William Holman*, Criminal Docket No.
    3:05-CR-00208-CRB-012, Judgment (N.D.Cal. filed Apr. 9, 2008 and
    entered Apr. 9, 2008) ("*Holman Judgment*"), Substitute Information
    (N.D.Cal. filed and entered Apr. 5, 2007) ("*Holman Substitute
    Information*"). *See also generally United States v. Video Network
    Communications, Inc. et al.*, Criminal Docket No. 3:05-CR-00208-CRB,
    Superseding Indictment (N.D.Cal. filed Dec. 8, 2005 and entered Dec.
    12, 2005), http://www.usdoj.gov/atr/cases/f213600/213626.htm
    (accessed May 1, 2008) ("*VNCI Superseding Indictment*").

[^12]: 47 C.F.R. § 54.8; 47 C.F.R. § 0.111 (delegating to the
    Enforcement Bureau authority to resolve universal service suspension
    and debarment proceedings). The Commission adopted debarment rules
    for the schools and libraries universal service support mechanism in
    2003. *See Schools and Libraries Universal Service Support
    Mechanism*, Second Report and Order and Further Notice of Proposed
    Rulemaking, 18 FCC Rcd 9202 (2003) ("*Second Report and Order*")
    (adopting section 54.521 to suspend and debar parties from the
    E-rate program). In 2007, the Commission extended the debarment
    rules to apply to all of the Federal universal service support
    mechanisms. *Comprehensive Review of the Universal Service Fund
    Management, Administration, and Oversight; Federal-State Joint Board
    on Universal Service; Schools and Libraries Universal Service
    Support Mechanism; Lifeline and Link Up; Changes to the Board of
    Directors for the National Exchange Carrier Association, Inc.*,
    Report and Order, 22 FCC Rcd 16372, 16410-12 (2007) (*Program
    Management Order*) (renumbering section 54.521 of the universal
    service debarment rules as section 54.8 and amending subsections
    (a)(1), (5), (c), (d), (e)(2)(i), (3), (e)(4), and (g)).

[^13]: *See* *Second Report and Order*, 18 FCC Rcd at 9225, ¶ 66;
    *Program Management Order*, 22 FCC Rcd at 16387, ¶ 32. 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 C.F.R. § 54.8(a)(6).

[^14]: *See Holman Judgment* at 1; *Holman Substitute Information at* ¶
    4 .

[^15]: *See id.* The Commission debarred NEC-BNS in 2006 for the
    company's wire fraud and bid rigging conviction. *See NEC Business
    Network Solutions, Inc.*, Notice to Debarment, 21 FCC Rcd 7491
    (2006); 71 Fed. Reg. 42398 (2006). The following four individuals,
    who were also charged in the *VNCI Superseding Indictment*, have
    pled guilty or been found guilty, and subsequently sentenced: Judy
    Green, Earl Nelson, George Marchelos, and Allan Green. We are
    sending separate notices of suspension and initiation of debarment
    proceedings to these individuals. VNCI is now defunct and charges
    against the company have been dropped.

[^16]: 47 C.F.R. § 54.8(a)(4). *See* *Second Report and Order*, 18 FCC
    Rcd at 9225-9227, ¶¶ 67-74.

[^17]: 47 C.F.R. §§ 54.8(a)(1), (d).

[^18]: *Second Report and Order*, 18 FCC Rcd at 9226, ¶ 69; 47 C.F.R. §
    54.8(e)(1).

[^19]: 47 C.F.R. § 54.8(e)(4).

[^20]: *Id*.

[^21]: 47 C.F.R. § 54.8(e)(5).

[^22]: *See Second Report and Order*, 18 FCC Rcd at 9226, ¶ 70; 47
    C.F.R. §§ 54.8(e)(5), 54.8(f).

[^23]: "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, the high-cost support
    mechanism, the rural healthcare support mechanism, and the
    low-income support mechanism." 47 C.F.R. § 54.8(c). Such activities
    "include the receipt of funds or discounted services through \[the
    Federal universal service\] support mechanisms, or consulting with,
    assisting, or advising applicants or service providers regarding
    \[the Federal universal service\] support mechanisms." 47 C.F.R.
    § 54.8(a)(1).

[^24]: *See Second Report and Order,* 18 FCC Rcd at 9226, ¶ 70; 47
    C.F.R. § 54.8(e)(3).

[^25]: *Second Report and Order,* 18 FCC Rcd at 9227, ¶ 74.

[^26]: *See id.,* 18 FCC Rcd at 9226, ¶ 70; 47 C.F.R. § 54.8(e)(5).

[^27]: *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 C.F.R. §
    54.8(f).

[^28]: *Second Report and Order*, 18 FCC Rcd at 9225, ¶ 67; 47 C.F.R. §§
    54.8(d), 54.8(g).

[^29]: *Id*.