fl.petition to deny

PETITION submitted by Stanacard, LLC

Petition to Deny

2012-06-20

This document pretains to ITC-214-20120518-00134 for International Global Resale Authority on a International Telecommunications filing.

IBFS_ITC2142012051800134_957007


Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Rubard LLC d/b/a Centmobile ) ) File No. ITC-214-20120518-00134 Streamlined International ) Section 214 Application ) PETITION TO DENY INTERNATIONAL SECTION 214 APPLICATION OF RUBARD LLC D/B/A CENTMOBILE Pursuant to Section 63.20(d) of the Federal Communications Commission’s (“FCC’s” or “Commission’s”) rules, 1 Stanacard, LLC (“Petitioner” or “Stanacard”), 2 by its attorneys, hereby petitions the Commission to deny the application submitted by Rubard, LLC d/b/a Centmobile (“Centmobile” or “Applicant”) for authority under Section 214 of the Communications Act of 1934, as amended (the “Act”), 3 to provide international telecommunications services. 4 Centmobile’s application for international Section 214 authority (the “Application”) must be denied because, as explained below, Centmobile’s longstanding pattern of violating FCC rules as well as its manifest lack of truthfulness in its Application shows that a grant of the Application would be prima facie inconsistent with the public interest, convenience and necessity. 1 See 47 C.F.R. § 63.20(d). Section 63.20(d) of the Commission’s rules provides that “any interested party may file a petition to deny [that contains] specific allegations of fact sufficient to show that … a grant of the application would be prima facie inconsistent with the public interest, convenience and necessity.” 2 To the extent necessary, Petitioner’s Declaration, signed by its Managing Member, in support of this Petition to Deny is enclosed. However, facts asserted herein are derived from Commission records and various public sources. Accordingly, Petitioner requests that the Commission take official notice of the factual allegations which support the conclusions herein. See 47 C.F.R. § 63.20(d) (requiring allegations of fact to be supported by an affidavit, “except for those of which official notice may be taken”). 3 47 U.S.C. § 214. 4 Streamlined International Applications Accepted for Filing, Public Notice, Report No. TEL- 01564S (rel. June 8, 2012).

As a threshold matter, the Commission must determine whether an application for authority to provide international telecommunications services under Section 214 will serve the public interest, convenience, and necessity. 5 A factor in this public interest review is whether the applicant meets “the requisite qualifications requirements to hold and transfer licenses” under Section 214(a), including the applicant’s citizenship and character qualifications. 6 In common carrier proceedings, the Commission looks to the character policy it initially developed under Title III of the Act to determine whether the applicant has the requisite character qualifications. 7 The Commission looks especially to allegations of misconduct directly before it as relevant to determining the applicant’s character including, most importantly, the applicant’s truthfulness and reliability. 8 Character disqualification may be justified on the basis of intentional concealment of material facts or a pattern of repeated violations of Commission rules. 9 As demonstrated below, Applicant has intentionally provided false and misleading information to the Commission in its Application by concealing its ownership structure and true 5 See 47 U.S.C. § 214(a); 47 C.F.R. § 63.18. 6 See, e.g., In the Matter of Applications of AT&T Inc. & Cellco Partnership d/b/a Verizon Wireless, Memorandum, Opinion and Order, 25 FCC Rcd 8704, 8718 (2010) (“Verizon”). 7 See, e.g., Applications for Consent to the Assignments and/or Transfer of Control of Licenses, Adelphia Comms. Corp., Assignors, to Time Warner Cable, Inc., Assignees, et al., Memorandum, Opinion & Order, 21 FCC Rcd 8203, at para. 237 (2006) (“Adelphia”); Applications for the Consent to Transfer of Control of Licenses and Section 214 Authorizations from Southern New England Telecommunications Corporation, Transferor, to SBC Communications, Inc., Transferee, Memorandum, Opinion & Order, 13 FCC Rcd 21292, 21305, para. 26 (1998). 8 See Verizon, 25 FCC Rcd at 8718-19; Adelphia, 13 FCC Rcd at n.732-733. 9 See, e.g., In re the Application of New Ulm Telecom, Inc., Memorandum, Opinion & Order, 10 FCC Rcd 2705, 2706-07 (1995) (finding that a denial of a Section 214 application on the basis of misrepresentation must be evidenced by “deceptive intent,” a repeated pattern of violations, or significant carelessness); Augusta Radio Fellowship Institute, Initial Decision of Administrative Law Judge, 6 FCC Rcd. 340, 345 (1991) (revoking license for deliberate and repeated violations of Commission rules to avoid further inquiry by the Commission into matters licensee knew were relevant to the license); In re Colonial Communications, Inc. Bedford Concepts, Initial Decision of Administrative Law Judge, 4 FCC Rcd 5969 (1989) (disqualifying applications because of material and intentional violations of required certifications). 2

business address. This alone warrants denial of the Application on its face. Furthermore, Centmobile has exhibited an egregious pattern of repeated intentional violation of the Commission’s rules by providing interstate and international telecommunications services for years without any attempt at compliance, despite having specific knowledge of the applicable FCC requirements. Centmobile’s actions clearly show that it lacks the character qualifications required of a Section 214 license holder, and are indicative of the Applicant’s likelihood to be deceptive in future dealings with the Commission and with consumers. For these reasons, Centmobile’s Application is prima facie inconsistent with the public interest, convenience, and necessity, and must be denied. I. INTENTIONAL MISREPRESENTATIONS IN ITS APPLICATION DEMONSTRATE CENTMOBILE’S LACK OF CHARACTER QUALIFICATIONS TO HOLD A SECTION 214 AUTHORIZATION Centmobile lacks the character qualifications required to hold an international Section 214 license because it has provided false and misleading information to the Commission in its Application. The Commission finds that there is a “predictive element to the application process,” and therefore intentional misrepresentations in the course of the application process are grounds for a denial of the application. 10 Intent is implicated from knowledge of the falsity or from a clear motive to conceal. 11 The Commission has found, in reference to the intentional provision of false information in applications, that “there is a public interest to deter such conduct in the future.” 12 In the instant matter, Applicant has made several false and misleading statements. Centmobile knowingly provided false ownership information in its Application. Centmobile also 10 See In re Colonial Communications, Inc. Bedford Concepts, 4 FCC Rcd at 5978. 11 See In re Gerard A. Turro for Renewal of License for FM Translator Stations W276AQ(FM), Fort Lee, NJ, and W232AL(FM), Pomona, NY, Hearing Designation Order, order to Show Cause and Notice of Opportunity for Hearing, 12 FCC Rcd 6264, 6272 (1997) (“Turro”). 12 See In re Colonial Communications, Inc. Bedford Concepts, 4 FCC Rcd at 5979. 3

shows a clear motive to conceal its true place of business. These misrepresentations raise grave concerns about Applicant’s future dealings with the Commission, and whether Centmobile will be truthful and reliable regarding matters of compliance. Therefore, in the interest of deterring such deleterious conduct in the future, the Commission must deny the Application. A. The Application Must be Denied for Intentional Misrepresentation of Ownership Information Centmobile knowingly misrepresented the company’s ownership information on its Application. The Commission has found that the failure to disclose the complete ownership structure of a company, and the failure to amend an application to reflect changes in ownership, are material omissions warranting a denial of a licensee’s application. 13 Alexander Dzerneyko (“Dzerneyko”) is certified as the only 10% or greater shareholder on Centmobile’s Application. 14 However, Artur Zaytsev (“Zaytsev”) listed himself as the Applicant’s 100% owner when registering “Centmobile” as a trade name in Delaware in January 2011. 15 The trade name registration was signed by Zaytsev before a notary public. 16 These separately certified ownership assertions, which cannot be simultaneously true, show that the Application is false and misleading on its face in one of two ways. Either way, knowledge of the false and misleading nature of the Application can unquestioningly be attributed to Zaytsev and Centmobile. First, if Zaytsev is still the true 100% owner of Centmobile, the Applicant has apparently provided the Commission with falsified information in an attempt to disguise Zaytsev’s 13 See In re Colonial Communications, Inc. Bedford Concepts, at 5978-79 (finding applicant unqualified because it included individuals who were no longer partners on the application, and failed to amend the application). 14 International Section 214 Application for Authorization for Rubard LLC d/b/a Centmobile, File No. ITC-214-20120518-00134 (filed May 18, 2012). 15 A copy of the trade name registration is enclosed as Exhibit 1. 16 Id. 4

involvement. 17 Alternatively, if Dzerneyko is truly the only 10% or greater shareholder, failure to disclose Zaytsev’s former ownership interest and request FCC approval for a transfer of control renders the Application equally false and misleading. As he admitted to the Commission in contesting a transfer of control application, Zaytsev is a former Chief Financial Officer of the Petitioner, which operates as a reseller of international telecommunications services regulated by the Commission.18 It is necessarily clear from his participation in contesting this application that Zaytsev had specific knowledge that a separate application and Commission authorization would have been necessary to transfer his controlling interest in Centmobile. 19 Furthermore, as an officer of Stanacard, Zaytsev had involvement in matters documented before the Commission which would have provided him with specific knowledge of other FCC requirements, including those related to applying for international Section 214 authority. Specifically, Zaytsev was aware of: (1) the need for Commission authorization to provide international telecommunications services; (2) the requirements to disclose truthful ownership information in an application; and even (3) the need to obtain special temporary authority from the Commission if an applicant was already providing services prior to obtaining international 214 authorization. 20 Accordingly, the only reasonable conclusion is that the Application is false 17 It is highly possible that the involvement of other individuals with control over Centmobile is being deliberately withheld from the Commission in order to evade other requirements (e.g., Executive Branch Agency review of international 214 applications involving non-U.S. citizen ownership). 18 See Domestic Section 214 Authorization Granted: Domestic Section 214 Application Filed for the Transfer of Control of Stanacard, LLC, WC Docket No. 12-18, Public Notice, DA 12-372 (rel. Mar. 9, 2012) (Zaytsev, along with another individual, Aleksandr Palatkevich, filed an opposition to Stanacard’s Section 214 transfer of control application on February 9, 2012). 19 Without prior approval, a transfer of control would be ineffective in the view of the Commission with respect to an international Section 214 application. See, e.g., 47 C.F.R. § 63.24(a). Accordingly, for purposes of the Application, Zaytsev would still be considered the effective 100% shareholder of the Applicant. 20 Zaytsev’s name appears as the contact on Stanacard’s international Section 214 application. See IBFS File No. ITC-214-20090624-00301 (filed June 24, 2009); International Authorizations 5

and misleading, and deliberately designed to disguise Zaytsev’s involvement in Centmobile. Zaytsev knew that a full and truthful international Section 214 application would have to reflect his ownership interest (whether past or present), and the deliberate exclusion of his ownership on Centmobile’s Application calls into question the character qualifications of Centmobile’s controlling members. Therefore, the Commission must deny the Application in the public interest of deterring similar misconduct in the future. B. Applicant Shows a Clear Motive to Conceal its True Place of Business Centmobile also lacks the qualifications to hold a Section 214 license because it intentionally misrepresented its true business address on the Application. The South Dakota address (Box 180671878, Sioux Falls, SD 57186) listed on the Application is merely a forwarding address designed to mask the company’s true business address from the Commission and the public. ZIP Code 57186 is a unique ZIP Code provided by the U.S. Postal Service to an individual company. 21 By all appearances, this ZIP Code belongs not to Centmobile, but to PayTrust, a company that offers a bill paying service by providing its customers with unique P.O. Box numbers at ZIP Code 57186. 22 PayTrust scans paper bills into online accounts for its customers. 23 Thus, the South Dakota address apparently belongs to one of Centmobile’s vendors, not to Centmobile, and is used for the limited purposes of billing. The South Dakota Granted, Public Notice, 25 FCC Rcd 1860 (FCC/IB 2010). Zaytsev also appears as the contact on Stanacard’s Special Temporary Authority (“STA”) filings. See, e.g., IBFS File No. ITC- STA-20090625-00304 (filed June 25, 2009). In the instant case, Applicant began offering international telecommunications services on or about December 2010 (and possibly back as far as 2008), yet has failed to request STA. See infra at 8. 21 See https://tools.usps.com/go/ZipLookupAction_input (retrieved June 14, 2012). 22 See http://paytrust.intuit.com/paytrust-online-bill-pay-faqs.jsp (retrieved June 14, 2012). PayTrust does not mention ZIP Code 57186 on its website, but customer testimonials found elsewhere clearly indicate that ZIP Code is used by PayTrust for its customer’s P.O. Box numbers. See, e.g., http://www.osterman.com/wordpress/2011/08/07/why-i-love-paytrust; http://www.yelp.com/biz/paytrust-sioux-falls (retrieved June 14, 2012). 23 See http://paytrust.intuit.com/paytrust-online-bill-pay-faqs.jsp (retrieved June 14, 2012). 6

address is not where Applicant’s business is located or even where it receives general correspondence. 24 Listing this address as its own on Centmobile’s Application is a clear misrepresentation designed to conceal. Applicant’s misrepresentation of its address was also intentional. Intentional misrepresentation can be found in a clear motive to conceal. 25 Motive, in turn, can be found in a desire to evade the Commission’s authority. 26 This misrepresentation cannot be viewed as other than a purposeful evasion of the Commission’s authority by making Centmobile difficult to reach. By never disclosing any address other than one belonging to a vendor, Centmobile leaves the Commission and the public at large without recourse for any future problems with the Applicant. 27 Centmobile’s consistent misrepresentation of its business address indicates a clear motive to conceal its true place of business from the public, making that misrepresentation intentional in the view of the Commission. The Commission should take strong action to deter such conduct by denying Centmobile’s Application. II. REPEATED VIOLATIONS OF COMMISSION RULES DEMONSTRATE THAT APPLICANT LACKS THE CHARACTER QUALIFICATIONS TO HOLD A SECTION 214 LICENSE Applicant’s repeated violation of the Commission’s rules provides independent grounds for finding that it does not have the requisite character fitness to hold a Section 214 license. In examining an applicant’s basic character qualifications as a factor in its public interest analysis, 24 Similarly, Centmobile’s business entity details, trade name registration, and company website list the address for a Delaware company that provides registered agent services instead of a real place of business. A copy of the trade name registration and entity details are enclosed as Exhibit 1 and Exhibit 2, respectively. See also http://www.centmobile.com/Contact.aspx (retrieved June 14, 2012). 25 See Turro, 12 FCC Rcd at 6272. 26 See id. 27 Failure to state a true and accurate business address also prevents negatively affected consumers from utilizing the appropriate state or local level consumer protections and resources normally available. 7

the Commission has stated that “all violations of the Act, or of the Commission’s rules or policies, are predictive of an applicant’s future truthfulness and reliability.” 28 The Commission has found willful and repeated violations of Commission rules to provide “a separate and independent basis” for an applicant’s disqualification on character grounds. 29 The Commission has found even a few violations to constitute grounds for character disqualification, especially when the violations reflect a “continuing course of conduct aimed at avoiding disclosure.”30 Centmobile has willfully and repeatedly violated the Commission’s rules, both in its Application and in a continuing course of conduct to avoid the Commission’s authority; therefore the Commission must deny the Application. Centmobile’s misrepresentations in its Application are merely a continuation of its longstanding pattern of operating in violation of FCC rules. 31 This ongoing misconduct is ultimately intended to avoid disclosure of its operations to the Commission. 32 Centmobile has been in operation, providing prepaid interstate and international telecommunications services via its website, since at least its formation in December 2010. 33 28 See Augusta Radio Fellowship Institute, 6 FCC Rcd at 345. 29 See id. See also Merrimack Valley Broadcasting, Inc., 55 Radio Reg. 2d 23 (1983), modified 99 FCC 2d 681, 683-84 n.9 (1984). 30 See Augusta Radio Fellowship Institute, 6 FCC Rcd at 345. 31 See supra at 3-7. Centmobile’s intentional misrepresentations are also repeated violations of the Commission’s rules regarding truthfulness and continuing accuracy in Section 214 applications. See 47 C.F.R. § 1.17; 47 C.F.R. § 63.21(a). 32 Zaytsev, an apparent owner of Centmobile, was a former officer of a regulated telecommunications carrier. As such, he was aware of the Commission’s regulatory requirements for prepaid telecommunications service providers (including those related to Section 214 authorization, as explained supra at 5), yet has exhibited a pattern of deliberate circumvention of such requirements in the operation of Centmobile. 33 A copy of Rubard’s business entity details showing its formation date of December 9, 2010 is enclosed as Exhibit 2. More likely, Centmobile has been providing telecommunications services since 2008, as its website shows a copyright notice of 2008-2012. See http://www.centmobile.com/ (retrieved June 15, 2012). 8

Centmobile has been providing regulated telecommunications services, yet has deliberately and continuously failed to comply with applicable FCC requirements, including the following: 34 1) submitting a Form 499-A Registration as required by 47 C.F.R. § 64.1195; 2) filing a telecommunications carrier System Security and Integrity Plan as required by 47 C.F.R. § 1.20005; 3) filing any annual certifications of compliance with the Commission’s Customer Proprietary Network Information requirements as required by 47 C.F.R. § 64.2009; 4) filing ongoing Forms 499-A or 499-Q to report revenue as required under several sections of the Commission’s rules; 35 or, even more disturbingly, 5) remitting required contributions to the various federal funding mechanisms. 36 In short, Applicant has been providing regulated telecommunications service for over two years without having submitted a single required filing or report with the FCC prior to the instant Application. In its years of intentionally avoiding these Commission requirements, Applicant has exhibited a continuing course of misconduct. This pattern of willful and repeated violation of the Commission’s rules, which creates grave concerns for the Commission and consumers, 37 34 A search of available Commission online databases (including the FCC Form 499 Filer Database and the Electronic Comment Filing System) shows that Centmobile has apparently failed to comply with the following requirements. 35 See note 36, infra. 36 These funding mechanisms include the Universal Service Fund (47 C.F.R. § 54.706); FCC Regulatory Fees (47 C.F.R. § 1.1157); Telecommunications Relay Service Fund (47 C.F.R. § 64.604); North American Numbering Plan Fund (47 C.F.R. § 52.17); and Local Number Portability Contributions (47 C.F.R. § 52.32). 37 Centmobile’s willingness to knowingly and repeatedly flout Commission rules indicates it would be just as willing to deceive its customers. Centmobile’s customers would be at high risk to have prepayments or deposits stolen, have private information (e.g., Consumer Proprietary Network Information) utilized in improper ways, or suffer from service interruptions or discontinuance without warning – all negative results the FCC’s rules are designed to prevent. 9



EXHIBIT 1 (Centmobile Trade Name Registration)

6 DeI.C. Ch. 31 INEW CASTLE ICOUNTY REGISTRATION OF TRADE NAMES PARTNERSHIPS & ASSOCIATIONS TRADE NAM E: CENTMOBILE -------------------------------------------------- Business Address: 2711 CENTERVILLE RD STE 120, WILMINGTON, DE 19808 RUBARD, LLC Phone Number 917·568·6833 Title of Person, Firm or AssociatiOn(Parent Company, if applicable): Names and addresses of all owners, members, or partners comprising the firm: ZAYTSEV ARTURN. 401 E 60TH ST. APT 10F NEW YORK NY 10022 Date of Formation: _1_2/_1_3/_20_1_0________________________________....:;~ s;- Nature of Business: INTERNET SERVICES - .' o STATE OF DELA'v'v'ARE Sfc,+e of Pew Y'Or I.( INEW CASTLE jcOllNlY ).) el.c.J yor I{ Coc)" f Y BEFORE ME, the Subscriber, a Notary Public of the State of jfJelJ ';/'" 1(, personally appeared /jr-lur IV. 2 S Yf}'CV , a principal in the business described in the furegoing Certificate, who, having first been sworn by me according to law did depose and say as follows: 1. He/She is a principal in the business described in the foregoing certificate. CERTIFiED AS AJ~~!~~~ffo::I~:~rmation provided in the foregoing certificate is true, ArrEST: S.I 0 A~NEW ri.:- "~ /' BYX:W J.~ .1t3--<..!~\_ . . ~~-"--"''''::'--,*--- Affiant Title: C~O SWORN AND SUBSCRIBED this ?) • }p// LOUIS MAiIOCCO ~-- Notary Public. State of New Yorl< Notary Public Lic # 01 MA6206052 Revised 09/2006 Qualified in Orange Counly Commission expires 05/1 8/20J.3

EXHIBIT 2 (Rubard, LLC DE Entity Details)

Division of Corporations - General Information - Entity Details https://delecorp.delaware.gov/tin/controller Frequently Asked Questions View Search Results Summary of Charges Logout Entity Details Incorporation Date / 12/09/2010 File Number: 4910195 Formation Date: (mm/dd/yyyy) Entity Name: RUBARD, LLC LIMITED LIABILITY Entity Kind: Entity Type: GENERAL COMPANY (LLC) Residency: DOMESTIC State: DE GOOD Status: Status Date: 12/09/2010 STANDING TAX INFORMATION NO REPORTS Last Annual Report Filed: Tax Due: $ 0.00 ON FILE Annual Tax Assessment: $ 250.00 Total Authorized Shares: 0 REGISTERED AGENT INFORMATION Name: THE COMPANY CORPORATION Address: 2711 CENTERVILLE ROAD SUITE 400 City: WILMINGTON County: NEW CASTLE State: DE Postal Code: 19808 Phone: (302)636-5440 FILING HISTORY (Last 5 Filings) Filing Date Effective Date Seq Document Code Description No. of pages Filing Time (mm/dd/yyyy) (mm/dd/yyyy) 1 0102Y Register L.L.C. 1 12/09/2010 14:06 12/09/2010 Back to Entity Search To contact a Delaware Online Agent click here. 1 of 1 5/24/2012 3:19 PM



Document Created: 2012-06-20 15:16:37
Document Modified: 2012-06-20 15:16:37
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