FCC Continues to Enforce Transfer of Control Violations

On July 17th, the FCC adopted a consent decree entered into between the Enforcement Bureau and AccessLine Communications Corporation, a facilities-based and resold long distance carrier holding domestic and international Section 214 authority. The consent decree, which resolved an investigation into alleged unauthorized transfers of control by AccessLine and its parent, Telanetix, is but the latest in a continuing series of such enforcement actions. As we have discussed here previously (see, e.g., December 12, 2011 International Carrier Settles Transfer of Control Violations with FCC), these episodes remind carriers of the importance of monitoring all transactions which may result in a change of their ownership (whether substantial or pro forma) to ensure that required FCC approvals are obtained before consummation.

This recent consent decree addresses allegations that in 2010, without obtaining prior FCC approvals, Telanetix entered into a security purchase agreement which transferred control of Telanetix, and indirect control of AccessLine, to a third party. AccessLine and Telanetix filed applications for approval of the change in ownership in early 2013 and approvals issued from the Wireline Competition Bureau and International Bureau in March. Shortly thereafter, the Enforcement Bureau issued a Letter of Inquiry regarding the transaction. Under the terms of the resulting consent decree, AccessLine is required to implement an internal compliance regimen focused on compliance with Section 214 obligations. In addition, AccessLine will make a voluntary contribution of $16,000, reflecting the base FCC penalty for two violations, respectively, of domestic and international Section 214 transfer of control approval obligations (as well as several associated FCC Rules). The adopting order and consent decree are provided in the attached links.