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Tuesday, September 05, 2006

USF Notice of Apparent Liability Issued

Commission Issues Notice of Apparent Liability for Forfeiture
for Failure to Contribute to the Universal Service Fund

The Federal Communications Commission ("FCC") has assessed a forfeiture of $529,000 against Local Phone Services, Inc. d/b/a Best Phone ("LPSI"), for repeated and willful failures to contribute fully and timely to the Universal Service Fund ("USF") and certain additional violations.

LPSI failed to timely file certain required Telecommunications Reporting Worksheets ("Worksheets"). The FCC uses the information submitted in these Worksheets to determine the amount of the USF payment due by that telecommunications carrier. The failure to file the Worksheets and pay the subsequent USF assessments results in disproportionate distribution of USF liability between carriers. Compliant carriers end up bearing the "economic costs and burdens associated with universal service", while delinquent carriers reap "an unfair competitive advantage."

Although a reduction in the forfeiture amount is typical when the violation is disclosed voluntarily, the FCC declined to reduce the forfeiture in this case. The FCC expects the voluntary disclosure to be accompanied by "swift and effective corrective actions" which were not forthcoming in the instant case.

Please feel free to contact us with any questions you may have regarding Universal Service obligations.


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