The Federal Communications Commission has issued an Order of Forfeiture against Globcom, a long distance company, accusing the firm of "willfully" ducking contributions to the Universal Service Fund (USF) and Telecommunications Relay Service Fund (TRS).
"Globcom’s violations strike at the core of the Commission’s mission to promote access to affordable, quality telecommunications services for all Americans," the FCC charged in a formal statement dated April 17th and released today.
The FCC demands that Globcom pay the Commission $715,031 for allegedly ignoring the agency's rules.
The USF fund taxes long distance calls to support telephone service for rural areas, rural health care providers, and the poor. It also finances Internet services for schools and libraries. The TRS Fund supports technologies that allow people with hearing and speech disabilities to communicate over the telephone.
Telecommunications firms pay a percentage of their revenues from interstate and international calls into the USF and TRS funds.
The FCC charges that Globcom "willfully" failed to contribute to both funds, submitted inaccurate revenue information, and did not file required annual and quarterly financial reports required of USR and TRS contributors. The Commission also disputes Globcom's claim that it can't afford to pay what it owes.
"Globcom withheld payments to Congressionally-mandated telecommunications programs, thereby starving these programs of essential funding for an extended period of time and totaling hundreds of thousands of dollars in withheld contributions," the FCC's report concludes, and details alleged failures to contribute to the funds that go back to 2002.
Last year the FCC threatened telecom carriers with almost five million dollars in fines for failing to properly contribute to its USF program.
The FCC's methods for collecting revenue for the USF have drawn criticism lately. In late October of 2005, FCC Chair Kevin Martin declared the system "outdated"—its revenue base declining because of a new wave of cable and Internet phone services that do not contribute to the program.
But public advocacy groups oppose proposals coming from Martin and some telecom firms to replace the present USF funding system with a "flat-fee" scheme in which telecom companies would pay into the fund based on working telephone numbers rather than long distance service volume.
The FCC has also come under fire from Senator Jay Rockefeller of West Virginia, who charges that new, more stringent accounting rules for government spending issued by the Bush administration have hurt USF accounting process.
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