Page Plus also is noteworthy in two additional respects relevant to this blog. First, the FCC applies the base forfeiture of $3,000 for “failure to file a required report” to this violation. This contrasts with other types of forms, such as the Form 499-A and the annual CPNI certification, where the FCC has set an individual (and much higher) forfeiture for failing to file the required form. Here, the FCC applied the $3,000 base forfeiture to eight violations, adding an upward adjustment of $19,200 to the fine due to duration of the violations.

Second, FCC proposed a fine for eight failures to file the annual certification – dating back to 2003. The Commission apparently relied upon its controversial “continuing violation” theory for missed deadlines, in which the Commission considers a violation to continue until it is cured. In this instance, six of the eight alleged violations relate to forms that Page Plus has never filed. Two relate to late-filed forms, which were filed exactly one year prior to the release of the NAL. (A ninth year’s report was filed slightly more than one year prior to the NAL, and is not part of the FCC’s proposed forfeiture). We say that the FCC “apparently” relied upon the continuing violations theory because the NAL does not cite to or discuss the statute of limitations with respect to the eight violations found. In our opinion, the FCC action is vulnerable on statute of limitations grounds.

The NAL is novel in a few ways worthy of mention on this blog. First, it marks the first time that the FCC has proposed fines for failing to file international traffic reports. Second, the Enforcement Bureau continues its aggressive interpretation of violations, this time proposing a fine for a violation that lasted a mere three weeks. Finally, the NAL raises once again the tricky issue of self-disclosure of violations. Carriers that learn of violations that have occurred should contact experienced FCC counsel promptly to come into compliance and mitigate their forfeiture exposure.

Continue reading below for a more detailed discussion of the Unipoint NAL.

The facts in the Unipoint NAL are fairly common. Unipoint is a prepaid calling card provider based in Massachusetts. It applied for international 214 authority in April 2009, which was granted by the FCC in May 2009. In August, however, Unipoint self-disclosed that it had been operating without a 214 prior to 2009. (Unipoint apparently sought confidential treatment of the information it provided to the Enforcement Bureau, so the NAL does not specify precisely when Unipoint began providing service.) An investigation ensued, which revealed several violations of the Act and FCC rules.

Significantly,

• the NAL proposes fines for failing to file Unipoint's Form 499-A in 2007 and for failing to pay TRS in 2007 and 2008. Although the NAL makes no mention of a tolling agreement, it appears that Unipoint agreed to an extension of the statute of limitations to reach back at least to 2009. However, the Commission appears to once again rely upon its "continuing violation" theory for failures to file relevant forms to bring the violation within the one year statute of limitations.
• the NAL also, for the first time, proposes fines for failing to file international traffic reports required by section 43.61 of the FCC's rules. Unlike proposed fines for failing to file CPNI certifications, USF revenue reports, carrier outage reports or most other "failure to file" actions recently, the FCC sticks with its Forfeiture Guidelines for these reports, proposing (only) a $3,000 fine per failure to file. Comparatively, failing to file an international traffic report is treated as a minor violation.
• One of the failures to file, however, exposes a particularly rigid interpretation by the FCC. The Commission asserts that Unipoint failed to file its 2011 international traffic report when due. Instead, it filed it three weeks after the due date. This is the first time we've seen a proposed fine for such a short-lived violation. Typically, an informal grace period applies to such routine reports. In this case, however, we believe the fine was proposed because the violation occurred during the Enforcement Bureau's investigation, and that it repeated a type of violation the Bureau was actively investigating. Presumably, with Unipoint on notice, the FCC's tolerance was at its lowest point.

Finally, it bears noting that Unipoint self-disclosed the violation that triggered the Enforcement Bureau investigation. Despite this self-disclosure, the NAL does not appear to take Unipoint's actions in account in determining the proposed forfeiture amounts. We see no evidence that Unipoint received credit for having come to the FCC first, or that the FCC lowered the proposed fines in recognition of this self-disclosure. This action again underscores the difficult decision facing carriers that discover otherwise undetected violations of FCC rules. Carriers that find themselves in a similar position should contact experienced FCC counsel as soon as possible in order to come into compliance and to mitigate their forfeiture exposure for the violations. If self-disclosure is made, the carrier should do everything possible to ensure that the FCC takes this action into account in evaluating whether to take enforcement action.