FCC Proposes $1.4 Million Fine for Apparent USF Fee Violations

The Federal Communications Commission proposed a fine of more than $1.4 million against PayG for apparently failing to pay Universal Service Fund (USF), Telecommunications Relay Service Fund (TRS Fund), North American Numbering Plan (NANP), and federal regulatory fees when payments were due. The proposed fine is the first enforcement action since 2015 based on a newly adopted Order clarifying the calculation of forfeitures for failure to make required payments to the FCC, including USF, TRS Fund, Local Number Portability, NANP, and federal regulatory fee payments. The Order vacates the FCC’s 2015 Forfeiture Policy Statement, which announced a “treble damages” methodology for these types of fee violations, yet due to procedural roadblocks was never put into practice. The clarified methodology enables the FCC to issue penalties for payment violations that are closely tailored to the specific circumstances of each individual adjudication. Forfeiture penalties for payment violations in future adjudications can therefore be adjusted based on the unique factors present in a case, resulting in fines more tailored to the circumstances of the case than those calculated using the “treble damages” methodology. In this instance, the FCC found PayG apparently liable for a fine that was more than treble the loss to the Funds.