Earlier today, the Federal Communications Commission’s (“FCC”) Enforcement Bureau (the “Bureau”) released a Notice of Apparent Liability imposing nearly $1 million in proposed forfeitures against two affiliated prepaid wireless carriers for their alleged non-compliance with Form 499 reporting and associated Fund/program contribution requirements.
A copy of the Notice of Apparant Liability is linked here: https://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db1205/FCC-11-180A1.pdf
Airlink Mobile did not respond to the LOI. Subsequent investigation by the Enforcement Bureau revealed that Airlink Mobile was no longer in business and that its assets had apparently been purchased by Kajeet, Inc. and its subsidiary, Kajeet/Airlink, LLC (together, “the successor Companies”). On December 10, 2009, the Bureau issued an LOI to the successor Companies seeking information about their compliance with USF and other related regulatory obligations and Kajeet/Airlink LLC’s acquisition of certain assets of Airlink Mobile.
The successor Companies’ Response to the LOI and supplemental information developed through Enforcement Bureau investigation indicated that both Kajeet and Kajeet/Airlink failed to contribute fully and timely to the USF, the TRS Fund, and the LNP cost recovery mechanism. In addition, the Enforcement Bureau found that Kajeet/Airlink consummated a substantial assignment of an international section 214 authorization without prior Commission approval.
According to the Commission’s Notice of Apparent Liability and Proposed Forfeiture, “[i]n light of the seriousness, duration, and scope of the apparent violations,” the FCC proposed a total forfeiture of $460,186 against Kajeet, consisting of $426,966 for failure to make full and timely USF contributions; $13,220 for failure to make full and timely TRS contributions; and $20,000 for failure to make LNP contributions. The FCC also proposed a total forfeiture of $502,642 against Kajeet/Airlink, consisting of $455,185 for failure to make full and timely USF contributions; $11,457 for failure to make full and timely TRS contributions; $20,000 for failure to make LNP contributions; and $16,000 for failure to obtain Commission approval prior to consummating the assignment of an international section 214 authorization.
The Commission’s action demonstrates the serious consequences associated with non-compliance with rules governing Form 499 revenue reporting and making contribution payments in support of the Universal Service Fund, Telecommunications Relay Services fund and other programs. The action also highlights the risks associated with transferring or selling substantial assets subject to Section 214 of the Act without obtaining prior Commission approval.
If you are concerned about your compliance with the Form 499 reporting, Funds and FCC program contribution regulations please contact the attorney assigned to your account. If you are not a Firm client, please visit our website and submit the contact form and an attorney will contact you.