FCC Proposes Fines Against AT&T and AMG in Connection with CAF Phase II Auction

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The FCC’s Enforcement Bureau has proposed Notices of Apparent Liability against both AT&T Services, Inc. and AMG Technology Investment Group, LLC in connection with the companies’ involvement in the Commission’s Connect America Fund Phase II (CAF-II) auction (Auction 903).  Specifically, the Commission asserts that the two parties engaged in prohibited communications during the course of Auction 903 and failed to report those discussions with the Commission.  The Enforcement Bureau has proposed forfeitures of $75,000 and $100,000 respectively, against AT&T and AMG.  Sections 1.21002(b) and (c) of the Commission’s rules require that auction participants disclose to the FCC, within five days, any prohibited communications between parties.  AMG, which attempted to win financial support to offer voice and broadband services in underserved areas, apparently violated the FCC’s rules by “engaging in prohibited communications of its bidding, bidding strategies, and bidding results to AT&T”, the parent company of Auction 903 applicant New Cingular Wireless PCS, LLC, and then failed to report these talks to the FCC within the required five-day reporting period.  In their respective Auction 903 applications, AMG and AT&T asserted that the two companies were not part of a joint-bidding agreement.  Nonetheless, during the Auction 903 “quiet period,” an AMG representative sent more than a half-dozen e-mails to AT&T, including emails to management-level AT&T personnel “discussing AMG’s Auction 903 bids, its bidding strategies, and bidding results.”  According to the Enforcement Bureau, the $25,000 reduction in AT&T’s proposed forfeiture was appropriate given the fact that AT&T did not initiate the communications, eventually ceased the communications, and was the first party to report the communications to the FCC.

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