The FCC released a Notice of Apparent Liability (“NAL”) yesterday against Telseven, LLC, a provider of interstate telecommunications services that is currently in bankruptcy. The Commission proposed a $1.75 Million forfeiture against Telseven and its sole officer and director in his personal capacity. The NAL concludes that Telseven apparently failed to provide good faith estimates of its projected telecommunications revenue in the third and fourth quarters of 2009 because it projected revenues that would render it a de minimis provider. The FCC noted that when Telseven reported its revenue in the 2010 FCC 499-A, its actual revenue was three times greater than projected in their 499-Q filings. The FCC concluded that the difference between Telseven’s projected revenue and their actual revenue is so significant that it shows that the 499-Q revenue projections were not made in good faith.
While the proposed forfeiture penalty also stems from unpaid USF, Telecommunications Relay Services Fund, North American Numbering Plan, and FCC regulatory fees, the NAL demonstrates that FCC Form 499 filers must be very careful when adjusting their revenue reporting methodologies and projecting telecommunications and VoIP revenues. Telseven’s actual revenue in 2009 was only high enough to have a $13,444.62 USF contribution obligation in 2009, which barely exceeds the $10,000 de minimis threshold.
The paragraph below is from the NAL.
The Forms 499–Q that Telseven filed in April 2009 and July 2009 apparently failed to provide good faith estimates of Telseven’s projected telecommunications revenue for the third and fourth quarters of 2009. In those Quarterly Worksheets, Telseven projected revenues sufficiently low for USAC to place Telseven in de minimis status for 2009. Telseven’s actual revenue for 2009, as reported on its Form 499-A filing due April 1, 2010, was more than three times greater than Telseven had predicted in its Form 499-Q filings and showed that Telseven did not qualify for de minimis status in 2009. USAC determined that Telseven’s actual revenues meant that it had a $13,444.62 contribution obligation to the USF for 2009. We deem the difference between Telseven projected revenue, as reported on its Forms 499–Q and its actual revenue, as reported on its Forms 499–A, to be so significant as to show that the Form 499–Q revenue estimates were apparently not made in good faith, as Section 54.711(a) of our rules requires. Based on the record, we therefore find that Telseven apparently violated Section 54.711(a) by willfully or repeatedly filing Forms 499–Q that failed to provide good faith estimates of Telseven’s quarterly telecommunications revenue.
The NAL is available here.
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