Federal Communications Commission DA 08-1921
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Cardinal Broadband LLC, 
aka Sovereign Telecommunications, 
a wholly owned subsidiary of Cardinal 
Communications, Inc.
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File No. EB-07-SE-310
NAL/Acct. No. 200832100069
FRN No. 0018035063
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted:  August 15, 2008 Released: August 15, 2008
By the Chief, Enforcement Bureau:
I.  INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture (NAL), we find Cardinal Broadband, 
LLC, aka Sovereign Telecommunications, a wholly owned subsidiary of Cardinal Communications, Inc.
(hereinafter, Cardinal), apparently liable for a forfeiture in the amount of twenty-five thousand dollars 
($25,000) for willful violation of Section 1.17(a)(2) of the Commissions Rules (Rules).1  The noted 
apparent violation involves Cardinals provision of incorrect material factual information to the 
Commission without a reasonable basis for believing that the information was correct and accurate.  
II. BACKGROUND  
2. On July 13, 2007, the Commission received a complaint alleging that Cardinal, an 
interconnected Voice over Internet Protocol (VoIP) service provider,2 was not providing E911 service 
in a condominium complex called Millstone in Golden, Colorado.  Specifically, the complaint alleged that 
no one in the complex can call 911 and get our local police department. The complaint further alleged 
that the local police department had visited the condominium complex to confirm the situation and had 
provided residents a flyer advising them that they did not have 911 service and that they should call the 
police departments regular number in case of emergency.  This complaint was subsequently referred to 
the Enforcement Bureaus Spectrum Enforcement Division (Division) for investigation.  During a 
follow-up phone call on August 24, 2007, the complainant informed Division staff that he and his 
neighbors had had a form of E911 service for approximately two weeks.  The complainant indicated that 
the 911 calls now went to a third party, which would forward the call and the 911 callers address to the 
appropriate emergency personnel.  The complainant also asserted that conventional landline telephone 
  
1 47 C.F.R.  1.17(a)(2). In a companion decision issued concurrently with this NAL, we propose a forfeiture of 
$25,000 against Cardinal for its willful and repeated failure to provide fully compliant E911 service in apparent 
violation of Section 9.5(b) of the Rules.  Cardinal Broadband LLC, Notice of Apparent Liability and Order, DA 08-
1920 (Enf. Bur., rel. August 15, 2008) (Cardinal VoIP E911 NAL).
2 An interconnected VoIP service is a service that:  (1) enables real-time, two-way voice communications; (2) 
requires a broadband connection from the users location; (3) requires Internet Protocol-compatible customer 
premises equipment; and (4) permits users generally to receive calls that originate on the public switched telephone 
network (PSTN) and to terminate calls to the PSTN.  See 47 C.F.R.  9.3; see also IP-Enabled Services and E911 
Requirements for IP-Enabled Service Providers, First Report and Order and Notice of Proposed Rulemaking, 20 
FCC Rcd 10245, 10257-58,  24 (2005) (VoIP 911 Order), affd sub nom. Nuvio v. FCC, 473 F.3d 302 (D.C. Cir. 
2006).
Federal Communications Commission DA 08-1921
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service was not available at Millstone because an affiliate company of Cardinal constructed the 
condominium complex and did not permit it to be wired for conventional landline service.
3. On September 10, 2007, the Division issued a letter of inquiry (LOI) to Cardinal 
directing it to provide certain information concerning its provision of interconnected VoIP service.3 In its 
response, Cardinal admitted that it resells telephone service but claimed that it does not provide an 
interconnected VoIP service.4 Specifically, Cardinal argued that the service Cardinal resells does not
require a broadband connection from the users location  [or]  internet protocol-compatible 
customer premises equipment [CPE] and, thus does not meet two of the four criteria for 
interconnected VoIP service.5 Relying on its claim that the service it provided was not interconnected 
VoIP service, Cardinal did not respond to the remainder of the LOI.
4. During internet research on the website of Cardinals wholly-owned subsidiary, 
Broadband, the Division found marketing materials that included the following statement: Our state-of-
the-art phone service transports voice data using both regular phone lines and the Internet.  Getting 
connected to our broadband network is easy.  You simply connect your telephone to your Digital 
Telephone adaptor and use your phone service like you do today.
5. On November 20, 2007, the Division directed a follow-up LOI to Cardinal, attaching the 
marketing materials found on the Broadband website.6 In a preliminary e-mail response, Cardinal stated
that:
In my initial response I relied on the information provided to me verbally by the 
employees of our subsidiary, Cardinal Broadband.  Somewhere we had a communication 
break down because I agree with you that anywhere a customer must use an internet 
adapter to have telephone service would definitely qualify as Interconnected VoIP.7
Beyond this admission, in its response to the follow-up LOI, Cardinal provided additional information 
confirming that the company is an interconnected VoIP service provider.8
  
3 Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal 
Communications Commission, to Cardinal Communications, Inc. (September 10, 2007) (LOI).
4 Letter from Edward A. Garneau, Chief Executive Officer, Cardinal Communications, Inc., and Ronald S. Bass, 
Principal Accounting Officer, Cardinal Communications, Inc., to Kathryn S. Berthot, Chief, Spectrum Enforcement 
Division, Enforcement Bureau, Federal Communications Commission, and Thomas D. Fitz-Gibbon, Esq., Spectrum 
Enforcement Division, Enforcement Bureau, Federal Communications Commission (October 9, 2007) (LOI 
Response) at 3.
5 Id. at 3 (emphasis in original).
6 Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal 
Communications Commission, to Ronald S. Bass, Principal Accounting Officer, Cardinal Communications, Inc. 
(November 20, 2007) (Second LOI).  
7 Electronic Mail Message from Ronald S. Bass, Principal Accounting Officer, Cardinal Communications, Inc., to 
Thomas D. Fitz-Gibbon, Esq., Spectrum Enforcement Division, Enforcement Bureau, Federal Communications 
Commission (November 30, 2007).
8 See Cardinal VoIP E911 NAL at  12.
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III.  DISCUSSION
A. Cardinal Apparently Provided Incorrect Material Factual Information to 
the Commission
6. Section 1.17 of the Rules9 provides, in pertinent part, that in any investigation, no person 
shall:
(1) In any written or oral statement of fact, intentionally provide material factual 
information that is incorrect or intentionally omit material information that is 
necessary to prevent any material factual statement that is made from being 
incorrect or misleading; and
(2) In any written statement of fact, provide material factual information that is 
incorrect or omit material information that is necessary to prevent any material 
factual statement that is made from being incorrect or misleading without a 
reasonable basis for believing that any such material factual statement is correct 
and not misleading.
Any person who has received a letter of inquiry from the Commission or its staff or is otherwise the 
subject of a Commission investigation is subject to this rule.10 In expanding the scope of Section 1.17 in 
2003 to include written statements made without a reasonable basis for believing the statements are
correct and not misleading, the Commission explained that it intended this requirement to clarify the 
obligations of persons dealing with the Commission, ensure that they exercised due diligence in preparing 
written submissions, and enhance the effectiveness of the Commissions enforcement efforts.11 Thus, 
even absent an intent to deceive, a false statement may constitute an actionable violation of Section 1.17 
of the Rules if provided without a reasonable basis for believing that the material factual information it 
contains is correct and not misleading.12
7. In its response to the first LOI, Cardinal claimed that its telephone service is not 
interconnected VoIP service because it does not require a broadband connection from the users location 
or Internet protocol-compatible CPE, and thus the service fails to meet two of the four criteria defining 
interconnected VoIP service. Our review of Cardinals marketing materials,13 however, indicates that a 
broadband connection and, at least in some locations, a digital telephone adapter were required for 
Cardinals digital telephone service.  We therefore conclude on the basis of Cardinals marketing 
materials that it already knew it was providing interconnected VoIP service. Moreover, as noted above, 
Cardinal subsequently admitted that the service it provides is interconnected VoIP service. Cardinals 
earlier claim that the service it provides does not require a broadband connection from the users location 
or Internet protocol-compatible CPE is, therefore, incorrect material factual information.  
  
9 47 C.F.R.  1.17.
10 47 C.F.R.  1.17(b)(4).
11 In the Matter of Amendment of Section 1.17 of the Commissions Rules Concerning Truthful Statements to the 
Commission, Report and Order, 18 FCC Rcd 4016, 4016-17  1-2, 4021  12 (2003) (Amendment of Section 1.17), 
recon. denied, Memorandum Opinion and Order, 19 FCC Rcd 5790, further recon. denied, Memorandum Opinion 
and Order, 20 FCC Rcd 1250 (2004).
12 See Amendment of Section 1.17, 18 FCC Rcd at 4017  2 (stating that the revision to Section 1.17 is intended to 
prohibit incorrect statements or omissions that are the result of negligence, as well as an intent to deceive).
13 See  4, supra.
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8. As the Commission has stated, parties must use due diligence in providing information 
that is correct and not misleading to the Commission, including taking appropriate affirmative steps to 
determine the truthfulness of what is being submitted.  A failure to exercise such reasonable diligence 
would mean that the party did not have a reasonable basis for believing in the truthfulness of the 
information.14  It does not appear that Cardinal had a reasonable basis for believing that the information 
it initially provided was correct and not misleading.  We think that, had it exercised even a minimum of 
diligence prior to the submission of its initial LOI response, Cardinal would not have submitted incorrect 
or misleading material factual information.15  Although we have insufficient information to conclude that 
Cardinals provision of incorrect material factual information was intentional in violation of Section 
1.17(a)(1) of the Rules,16 we find that Cardinal apparently willfully17 violated Section 1.17(a)(2) by 
providing material factual information that was incorrect without a reasonable basis for believing that the 
information was correct and not misleading.18
B. Proposed Forfeiture
9. Section 503(b) of the Act19 authorizes the Commission to assess a forfeiture for each willful 
or repeated violation of the Act or of any rule, regulation, or order issued by the Commission under the Act.  
In exercising such 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.20
  
14 Amendment of Section 1.17, 18 FCC Rcd at 4021  12.
15 See, e.g., Syntax-Brillian Corporation, Forfeiture Order and Notice of Apparent Liability for Forfeiture, 23 FCC 
Rcd 6323 6342  44 (2008) (Syntax-Brillian Further NAL) (finding that a television manufacturer apparently 
provided incorrect material information concerning its importation and interstate shipment of non-DTV-compliant 
televisions without a reasonable basis for believing that the information was correct and not misleading, in violation 
of Section 1.17(a)(2) of the Rules); Citicasters License, L.P., Memorandum Opinion and Order and Notice of 
Apparent Liability for Forfeiture, 22 FCC Rcd 19324, 19338  40 (2007) (Citicasters) (forfeiture paid) (finding 
that a licensees false certification that it had not violated the Act or any Commission rules during the preceding 
license term had no reasonable basis but was not made with the intent to deceive Commission and, therefore, 
apparently violated Section 1.17(a)(2) of the rules).
16 47 C.F.R.  1.17(a)(1),
17 Section 312(f)(1) of the Communications Act of 1934, as amended (Act), 47 U.S.C.  312(f)(1), which applies 
to violations for which forfeitures are assessed under Section 503(b) of the Act, provides that [t]he term willful,
 means the conscious and deliberate commission or omission of such act, irrespective of any intent to violate any 
provision of this Act or any rule or regulation of the Commission authorized by this Act .  See Southern 
California Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387 (1991).
18 We further note that Cardinal initially failed to respond to all of the questions in the LOI, which itself is a 
violation of a Commission order and subject to forfeiture.  See, e.g., Hauppauge Computer Works, Inc, Notice of 
Apparent Liability, 23 FCC Rcd 3684  8 (Enf. Bur., Spectrum Enf. Div. 2008) (proposing an $11,000 forfeiture for 
failure to provide complete response to Letter of Inquiry) (forfeiture paid).  Given that Cardinal ultimately 
responded to the LOI in full and our Section 1.17 holding largely relies on the same facts, however, we will exercise 
our prosecutorial discretion here and not propose an additional forfeiture for Cardinals incomplete initial response 
to our LOI. 
19 47 U.S.C.  503(b).
20 47 U.S.C.  503(b)(2)(E).
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10. Under the Forfeiture Policy Statement21 and Section 1.80 of the Rules,22 the base 
forfeiture amount for misrepresentation or lack of candor is the statutory maximum.23 Therefore, for 
common carriers such as Cardinal,24 the statutory maximum is $130,000 for each violation or each day of 
a continuing violation.  The Commission has imposed the statutory maximum penalty against common 
carriers for the intentional provision of incorrect material factual information.25 Because we do not have 
evidence that the misrepresentation was intentional and Cardinal provided the correct information against 
its interest and prior to any formal Commission action, we impose a lesser forfeiture penalty here.26  
Nonetheless, we find a significant forfeiture appropriate.  The Commission has stated that [we rely] 
heavily on the truthfulness and accuracy of the information provided to us.  If information submitted to us 
is incorrect, we cannot properly carry out our statutory responsibilities.27  Cardinals failure to exercise 
due diligence to ensure that the information provided in its initial LOI response was correct and not 
misleading hampered our ability to properly carry out our statutory responsibilities and consumed scarce 
Commission resources.  Although Cardinal ultimately provided the correct information, it did so only 
after the Bureau sent the company a follow-up LOI directing it to provide substantially the same 
information requested in the first LOI.  Accordingly, considering all of the enumerated factors and the 
particular circumstances of this case, we find that a forfeiture of $25,000 is warranted here for Cardinals 
apparent willful violation of Section 1.17(a)(2).  
  
21 The Commissions Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the 
Forfeiture Guidelines, Report and Order, 12 FCC Rcd 17087, 17113 (1997) (Forfeiture Policy Statement), recon. 
denied, 15 FCC Rcd 303 (1999).
22 47 C.F.R.  1.80(b)(4), Note to Paragraph (b)(4):  Section I. Base Amounts for Section 503 Forfeitures.
23 See, e.g., SBC Communications, Inc., Notice of Apparent Liability, 16 FCC Rcd 19091, 19120 (2001) (statutory 
maximum forfeiture amount proposed for intentional violation of Section 1.17 of the Rules) (subsequent history 
omitted).
24 As noted above, Cardinal is a reseller of Qwest analog telephone service and therefore is subject to the forfeiture 
penalties applicable to common carriers.  See, e.g., Telrite Corp., Notice of Apparent Liability and Order, 23 FCC 
Rcd 7231 (2008) (proposing a forfeiture for non-payment of universal service contributions against a toll reseller as 
a common carrier); Regulatory Policies Concerning Resale And Shared Use Of Common Carrier Services And 
Facilities, Report and Order, 60 FCC 2d 261 at  101(1976) (subsequent history omitted) (Resellers will be 
offering a communications service for hire to the public just as the traditional carriers do. The ultimate test is the 
nature of the offering to the public. No one contends that resellers will make a private offer of communications 
service rather than a public offering. Nor we will permit resellers to operate in a discriminatory fashion. 
Accordingly, the offering which resellers will make will satisfy the  sine qua non  of common carrier status, and 
they will be considered as such.).  See also 47 C.F.R.  63.01 (granting blanket Section 214 authority to domestic 
carriers for the construction and operation of all new lines).  
25 See note 34, supra.
26 See, e.g., Access.1 New York License Company, LLC, Notice of Apparent Liability, 22 FCC Rcd 15205, 15209  
11 (Media Bur. 2007) (forfeiture amount proposed for provision of incorrect material factual information adjusted 
downward from statutory maximum amount of $32,500 to $10,000 on basis that violation was unintentional).  
Compare Syntax-Brillian Further NAL, 23 FCC Rcd at 6343  46 (proposing statutory maximum forfeiture 
($11,000) for apparent negligent misrepresentation based on totality of the circumstances; company corrected the 
erroneous information only after the Commission had relied on it in an earlier enforcement action); Intelsat North 
America, Notice of Apparent Liability, 21 FCC Rcd 9246, 9250  12 (Enf. Bur., Inv. & Hearings Div. 2006) 
(proposing statutory maximum forfeiture ($11,000) for apparent negligent misrepresentation based on the totality of 
the circumstances, including ability to pay and the Commissions reliance on the incorrect information). We note 
that in the Syntax-Brillian and Intelsat cases, our statutory maximum forfeiture was significantly less than that 
applicable to broadcast licensees and common carriers.
27 In the Matter of Amendment of Section 1.17 of the Commissions Rules Concerning Truthful Statements to the 
Commission, Notice of Proposed Rulemaking, 17 FCC Rcd 3296, 3297  3 (2002).
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IV. ORDERING CLAUSES
11. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the Act, and Sections 
0.111, 0.311 and 1.80 of the Rules,28 Cardinal Broadband LLC IS NOTIFIED of its APPARENT 
LIABILITY FOR A FORFEITURE in the amount of twenty-five thousand dollars ($25,000) for
providing incorrect material factual information to the Commission in willful violation of Section 
1.17(a)(2) of the Rules.
12. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules, within thirty 
days of the release date of this Notice of Apparent Liability for Forfeiture, Cardinal SHALL PAY the full 
amount of the proposed forfeiture or SHALL FILE a written statement seeking reduction or cancellation 
of the proposed forfeiture.
13. 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).  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. Cardinal will also 
send electronic notification on the date said payment is made to Thomas.Fitz-Gibbon@fcc.gov and 
Ricardo.Durham@fcc.gov. 
14.  The response, if any, must be mailed to the Office of the Secretary, Federal 
Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554, ATTN: Enforcement 
Bureau  Spectrum Enforcement Division, and must include the NAL/Acct. No. referenced in the caption.
15. 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 petitioners current financial 
status.  Any claim of inability to pay must specifically identify the basis for the claim by reference to the 
financial documentation submitted.
16. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for 
Forfeiture shall be sent by first class mail and certified mail return receipt requested to Ronald S. Bass, 
Principal Accounting Officer, Cardinal Communications, Inc., 11101 120th Avenue, Suite 220, Broomfield, 
CO 80021.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
  
28 Id.  0.111, 0.311 and 1.80.