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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-04-IH-0157
)
New Edge Network, Inc. ) Acct. No. 200432080185
)
) FRN No. 0003-7204-71
ORDER
Adopted: September 10, 2004 Released: September 13,
2004
By the Chief, Enforcement Bureau:
1. The Enforcement Bureau (``Bureau'') has been conducting
an investigation into possible violations by New Edge
Network, Inc. (``New Edge'') of section 254 of the
Communications Act of 1934, as amended,1 and sections
54.706, 54.711, 54.713,2 and related provisions of the
Commission's rules in connection with the universal service
support mechanism reporting and contribution requirements.3
2. The Bureau and New Edge have negotiated the terms of a
Consent Decree that would terminate the Bureau's
investigation. A copy of the Consent Decree is attached
hereto and incorporated by reference.
3. We have reviewed the terms of the Consent Decree and
evaluated the facts before us. We believe that the public
interest would be served by approving the Consent Decree and
terminating the investigation.
4. Based on the record before us, and in the absence of
material new evidence relating to this matter, we conclude
that there are no substantial or material questions of fact
as to whether New Edge possesses the basic qualifications,
including those related to character, to hold or obtain any
Commission license or authorization.
5. Accordingly, IT IS ORDERED, pursuant to section 4(i) of the
Communications Act of 1934, as amended, 47 U.S.C. § 154(i), and
the authority delegated by sections 0.111 and 0.311 of the
Commission's rules, 47 C.F.R. §§ 0.111, 0.311, that the attached
Consent Decree IS ADOPTED.
6. IT IS FURTHER ORDERED that the above captioned
investigation is TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of ) File No. EB-04-IH-0157
)
New Edge Network, Inc. ) Acct. No. 200432080185
)
) FRN No. 0003-7204-71
CONSENT DECREE
1. The Enforcement Bureau (``Bureau'') of the Federal
Communications Commission (``Commission'') and New Edge
Network, Inc. (``New Edge'') hereby enter into this
Consent Decree for the purpose of terminating the
Bureau's investigation into whether New Edge violated
the universal service reporting and contribution
requirements of section 254 of the Communications Act
of 1934, as amended (the ``Act'')4 and sections 54.706,
54.711, and 54.713 of the Commission's rules.5
2. For the purposes of this Consent Decree, the
following definitions shall apply:
2)a. ``Commission'' means the Federal
Communications Commission.
2)b. ``Bureau'' means the Enforcement Bureau of
the Federal Communications Commission.
2)c. ``New Edge'' means New Edge Network, Inc.,
any affiliate, d/b/a, predecessor-in-interest,
parent companies, any wholly or partially owned
subsidiary, or other affiliated companies or
businesses and their successors and assigns.
2)d. ``Parties'' means New Edge and the
Bureau.
2)e. ``Order'' or ``Adopting Order'' means an
Order of the Commission or the Bureau adopting
the terms of this Consent Decree without change,
addition, deletion, or modification.
2)f. ``Effective Date'' means the date on which
the Commission or the Bureau releases the
Adopting Order.
2)g. ``Investigation'' means the investigation
commenced by the Bureau's May 21, 2004 Letter of
Inquiry6 regarding whether New Edge violated the
universal service reporting and contribution
requirements of section 254 of the Act and
sections 54.706, 54.711, and 54.713 of the
Commission's rules.
I. BACKGROUND
3. Pursuant to section 254(d) of the Act and sections
54.706, 54.711, and 54.713 of the Commission's rules,
telecommunications carriers that provide interstate
telecommunications services and private service
providers that provide interstate telecommunications
services are required to file annual and quarterly
Telecommunications Reporting Worksheets (FCC Forms 499-
A and 499-Q) and contribute to the Universal Service
Fund.7
4. New Edge offers virtual private networks and is a
broadband service provider, with resale agreements in
small and mid-sized markets. On May 21, 2004, the
Bureau issued a Letter of Inquiry (``LOI'') to New Edge
requesting information about New Edge's compliance with
the universal service contribution requirements. New
Edge submitted a response to the Bureau's LOI on June
10, 2004. New Edge admitted that it had a substantial
balance due for past universal service contributions.
New Edge explained that it was paying a significant
amount in addition to its monthly contribution amount,
in order to eliminate the past due balance. New Edge
began making these additional monthly payments in
December 2003, six months before the Bureau commenced
its investigation.
II. AGREEMENT
5. The Parties agree that the provisions of this
Consent Decree shall be subject to final approval by
the Bureau, through entry of the Order, which shall
immediately resolve and terminate the Investigation.
6. The Parties agree that this Consent Decree does
not constitute either an adjudication on the merits or
a factual or legal finding or determination regarding
any compliance or noncompliance with the requirements
of the Act or the Commission's rules and orders. The
Parties agree that this Consent Decree is for
settlement purposes only and that by agreeing to this
Consent Decree, New Edge does not admit or deny
liability for violating any statute, regulation, or
administrative rule in connection with matters that are
the subject of this Consent Decree.
7. New Edge agrees that it will make a voluntary
contribution to the United States Treasury in the
amount of fifty thousand dollars ($50,000) within 30
calendar days after the Effective Date of the Adopting
Order. The payment must be made by check or similar
instrument, payable to the order of the Federal
Communications Commission. The payment must include
``Acct. No. 200432080185'' and ``FRN No. 0003-7204-
71.'' Payment by check or money order must be mailed
to Forfeiture Collection Section, Finance Branch,
Federal Communications Commission, P.O. Box 73482,
Chicago, Illinois, 60673-7482. Payment by overnight
mail may be sent to Bank One/LB 73482, 525 West Monroe,
8th Floor Mailroom, Chicago, IL 60661. Payment by
wire transfer may be made to ABA Number 071000013,
receiving bank Bank One, and account number 1165259.
8. For purposes of settling the matters set forth
herein, New Edge agrees to implement a compliance
program related to future compliance with the Act, the
Commission's rules, and the Commission's orders. The
program will include, at a minimum, the following
components:
(a) Compliance Manual. The Company shall develop and
update as necessary a Compliance Manual. Company
personnel shall have ready access to the Compliance
Manual and are to follow the procedures contained in
it. The Compliance Manual will describe the universal
service rules and requirements as they apply to New
Edge. The Compliance Manual will encourage personnel
to contact the Company's Legal Department, the
Company's Chief Executive and/or Chief Financial
Officer with any questions or concerns that arise.
(b) Compliance Training Program. The Company will
establish an FCC compliance training program for
employees who engage in activities subject to FCC
regulation. Training sessions will be conducted at
least annually to ensure compliance with the Act and
the FCC's regulations and policies and, for new
employees, within the first 30 days of employment.
(c) Designated Contact. The Company will designate
one employee as the point of contact for all regulatory
compliance matters.
(d) Review and Monitoring. The Company will review
the Program annually to ensure that it is maintained in
a proper manner and continues to address the objectives
set forth therein.
9. New Edge agrees to make timely contributions to
the universal service fund of its monthly contribution
amount and late payment fees, if any, as required by
the Commission's rules. New Edge further agrees to pay
to the universal service fund on or before the 15th of
each month additional payments representing delinquent
contributions, interest, late charges, administrative
charges, and late payment fees as follows: September
15, 2004 through November 15, 2004, $70,000 per month;
December 15, 2004 through May 15, 2005, $100,000 per
month; June 15, 2005 through September 15, 2005,
$534,897.61 per month. If the 15th of the month is not
a business day, the additional monthly payment is due
the prior business day. The additional monthly payment
is to be made in a separate payment from monthly
contributions to the universal service fund. The
additional monthly payment must include the Filer 499
ID and the company name. The payment instructions are
as follows:
· Check payments: If sending by US Mail or major courier
service (e.g., Airborne, Federal Express, or UPS),
please send check payments to
Universal Service Administrative Company
1259 Paysphere Circle
Chicago, IL 60674
· ACH Payments: ACH Payments should be sent in a CCD+
format to
ABA Number 071000505
Bank Account Number 5590045653
10. New Edge agrees that in the event it shall fail,
after the Effective Date, to make a timely required
contribution as described in Paragraph 9 to the
universal service fund it will be in default of this
Consent Decree. In addition to any other penalties
which may be assigned pursuant to applicable law, New
Edge will be required to make payments sufficient to
satisfy all remaining disbursements described in
Paragraph 9 above. Such payments will be made in no
more than three installments, each no more than 30 days
apart, to be completed within 90 days after receipt of
written notice to New Edge from the Bureau stating that
New Edge is in default.
11. The Bureau agrees that it will not use the facts
developed in this Investigation through the Effective
Date of the Consent Decree or the existence of this
Consent Decree to institute, on its own motion, any new
proceeding, formal or informal, or take any action on
its own motion against New Edge concerning the matters
that were the subject of the Investigation. The Bureau
also agrees that it will not use the facts developed in
this Investigation through the Effective Date of this
Consent Decree or the existence of this Consent Decree
to institute on its own motion any proceeding, formal
or informal, or take any action on its own motion
against New Edge with respect to New Edge's basic
qualifications, including its character qualifications,
to be a Commission licensee or authorized common
carrier.
12. Nothing in this Consent Decree shall prevent the
Commission or its delegated authority from adjudicating
complaints filed pursuant to section 208 of the Act
against New Edge or its affiliates for alleged
violations of the Act, or for any other type of alleged
misconduct, regardless of when such misconduct took
place. The Commission's adjudication of any such
complaint will be based solely on the record developed
in that proceeding. Except as expressly provided in
this Consent Decree, this Consent Decree shall not
prevent the Commission from investigating material new
evidence of noncompliance by New Edge of the Act, the
rules, or this Order.
13. New Edge waives any and all rights it may have to
seek administrative or judicial reconsideration,
review, appeal or stay, or to otherwise challenge or
contest the validity of this Consent Degree and the
Order adopting this Consent Decree, provided the Bureau
issues an Order adopting the Consent Decree without
change, addition, modification, or deletion. New Edge
shall retain the right to challenge Commission
interpretation of the Consent Decree or any terms
contained herein.
14. New Edge's decision to enter into this Consent
Decree is expressly contingent upon the Bureau's
issuance of an Order that is consistent with this
Consent Decree, and which adopts the Consent Decree
without change, addition, modification, or deletion.
15. In the event that this Consent Decree is rendered
invalid by any court of competent jurisdiction, it
shall become null and void and may not be used in any
manner in any legal proceeding.
16. If either Party (or the United States on behalf of
the Commission) brings a judicial action to enforce the
terms of the Adopting Order, neither New Edge nor the
Commission shall contest the validity of the Consent
Decree or the Adopting Order, and New Edge shall waive
any statutory right to a trial de novo. New Edge shall
retain the right to challenge Commission interpretation
of the Consent Decree or any terms contained herein.
17. Any violation of the Consent Decree or the
Adopting Order will constitute a separate violation of
a Commission order, entitling the Commission to
exercise any rights or remedies authorized by law
attendant to the enforcement of a Commission order.
18. The Parties also agree that if any provision of
the Consent Decree conflicts with any subsequent rule
or order adopted by the Commission (except an order
specifically intended to revise the terms of this
Consent Decree to which New Edge does not consent) that
provision will be superseded by such Commission rule or
order.
19. New Edge hereby agrees to waive any claims it may
otherwise have under the Equal Access to Justice Act, 5
U.S.C. § 504 and 47 C.F.R. § 1.1501 et seq., relating
to the matters addressed in this Consent Decree.
20. This Consent Decree may be signed in counterparts.
________________________________
David H. Solomon
Chief, Enforcement Bureau
Federal Communications
Commission
________________________________
Date
________________________________
Dan Moffat
President and CEO
New Edge Network, Inc.
________________________________
Date
_________________________
1 47 U.S.C. § 254.
2 47 C.F.R. §§ 54.706, 54.711, 54.713.
3 See Letter from Hillary S. DeNigro, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, FCC to
Penny H. Bewick, Vice President-External Affairs, New Edge
Network, Inc. (May 21, 2004).
4 47 U.S.C. § 254.
5 47 C.F.R §§ 54.706, 54.711, 54.713.
6 See Letter from Hillary S. DeNigro, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau,
FCC to Penny H. Bewick, Vice President-External Affairs, New
Edge Network, Inc. (May 21, 2004).
7 47 U.S.C. § 254(d); 47 C.F.R. §§ 54.706, 54.711, 54.713.