2. Background and Procedural History
Broadvox-CLEC, LLC (Broadvox) is a Delaware limited liability company, which has its principal place of business located in Cleveland, Ohio. Broadvox has registered with the California Secretary of State and is authorized to conduct intrastate business in California.
Broadvox filed this application for a certificate of public convenience and necessity (CPCN) authorizing the company to provide limited facilities-based and resold telecommunications services in the service territories of Pacific Bell d/b/a AT&T California, Verizon California Inc., SureWest Telephone, and Citizens Telecommunications Company, and interexchange services statewide on June 4, 2009. The application states that Broadvox will initially resell local exchange and interexchange services, and will also provide local exchange service utilizing unbundled network elements purchased from the incumbent local exchange carriers. All services will be routed solely over facilities owned by other certificated carriers. Applicant does not plan to construct or extend any facilities pursuant to this application.
In the application, Broadvox certified under penalty of perjury that:
1) Neither Broadvox, any affiliate, officer, director, partner, nor owner or more than 10 percent of Broadvox, or any person acting in such capacity whether or not formally appointed, has been sanctioned by the Federal Communications Commission (FCC) or any state or regulatory agency for failure to comply with any regulatory statute, rule or order; and
2) No affiliate, officer, director, partner, or person owning more than 10 percent of Applicant, or anyone acting in such a capacity whether or not formally appointed, held one of these positions with a telecommunications carrier that filed for bankruptcy, or has been found either criminally or civilly liable by a court of appropriate jurisdiction for a violation of Sections 17000 et seq. of the California Business and Professions Code, or for any actions which involved misrepresentations to consumers, and to the best of Applicant's knowledge, is not currently under investigation for similar violations.
On July 9, 2009, the Commission's Consumer Protection and Safety Division (CPSD) filed a protest to this application, on the grounds that some of the officers of Broadvox have held or currently hold officer positions with other telecommunications carriers that have been sanctioned for regulatory violations in other states.3
On August 18, 2009, the parties filed a Joint Case Management Statement (Statement), which states that CPSD had uncovered numerous violations of regulatory requirements in other jurisdictions by telecommunications carriers owned or controlled by the officers, directors, or shareholders of Broadvox that were not disclosed by Broadvox in the application. In addition to other regulatory problems, the Statement notes that Yesil, who owns 16.96 percent of Broadvox, served as either an officer, manager or officer of several telecommunications carriers, NeTel, Inc. (d/b/a Go 2 Telecom, Inc. and Tel 3, Inc.), Intelligent Switching and Software, Inc (ISS)., Netra, Inc., and Radiant Telecom, Inc.(Radiant), which had engaged in extensive regulatory violations and had had their certifications revoked or cancelled by a number of states.4 According to the Statement, in 2008, as a result of a formal complaint filed by APCC Services, Inc. (APCC), the FCC ordered ISS to pay damages to APCC in the amount of $574,073.07, plus interest, based on ISS' violation of payphone compensation rules.5 In addition, NeTel, Inc., for which Yesil serves as President, Director, Secretary, and Treasurer, had filed for bankruptcy in Florida in 1998, and Broadvox did not disclose this fact in its application.
According to the Statement, in February 2009, Broadvox filed litigation against Yesil for breach of contract in the U.S. District Court in Ohio in a law suit, which included claims of fraud and negligent misrepresentation.
Broadvox contends that its nondisclosure of these issues was inadvertent.
A prehearing conference was held before the assigned Administrative Law Judge (ALJ), Myra J. Prestidge, on August 24, 2009. The parties later reached an agreement regarding settlement of the issues in this proceeding (Settlement Agreement). The parties filed a joint motion for Commission adoption of the Settlement Agreement on November 30, 2009. In response to a ruling by the assigned ALJ, Broadvox filed additional information regarding the financial status of the company on March 30, 2010.
A scoping ruling was issued by the assigned Commissioner and assigned ALJ in May 2010.
3 As described in CPSD's protest, these regulatory violations generally consisted of failure to file required reports, late filing of required reports, and failure to pay required fees.
4 Among other revocations, on August 21, 2008, in Resolution T-17155, this Commission revoked Radiant's CPCN, based on the company's failure to file required reports.
5 See 2008 FCC LEXIS 4310.
