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May 21, 2004

the legal line

Ed Maldonado, Esq.

Dear Legal Line,

Can a felony DUI prevent someone from getting a 214 license? I talked to a couple of people in the business and I have gotten both “yes” and “no” answers. The reason why is that I got my 3rd DUI in 2003, which was a felony in my state. I did not fight the case and took a long probation with treatment for alcohol addiction because I really needed help. Since then, I got help and am in control of my life again. My problem now is whether I can license my own telecom company as a carrier. I am ready to split from my present employment and venture on my own with international VoIP termination routes. It is really important in my decision to leave where I’m at and go on my own. Will I be denied, or, am I worrying about nothing? Please reply.

“R2R” Road2Recovery


Dear R2R,

While it is sad to hear about how you got into your present dilemma, it is good to hear that you are in the process of recovery. Our personal lives, and what truly affects them, should be of the utmost importance and should always take a second seat to business, particularly the craziness of telecom. I have seen a number of people in prepaid get devoured by that craziness and end-up losing it all because of their addictions. Good luck with that. As for your application for 214 Authority, here’s my analysis:

When applying to be an authorized common carrier under 214 Authority certain disclosures are required from applicants as a part of the grant of licensure. 47 CFR 1.2002(b) defines a party to this application to be either an individual; a corporation; or a partnership. If you are an individual applying for the application, disclosure is pretty clear. For the purposes of a corporation applying for 214 Authority, all officers, directors and persons holding 5% or more of outstanding stock (either voting or non-voting) are included as applicants. For the purposes of a partnership applying for Authority, all limited or non-limited partners holding 5% or more interest in the partnership are included as applicants. So, it is fair to say that if you own or have more than 5% interest in the company or partnership you are using to apply for Authority, you must disclose as if you are the actual applicant, per federal regulation.

Now as to the impact of your 3rd DUI, I am assuming that your plea to probation and treatment for alcohol rehab included an adjudication of guilty (a conviction) to a felony and that disclosure of this is why you are concerned. Well, from the perspective of a FCC 214 Authority application, a felony DUI based on alcohol intoxication is not relevant and not a required disclosure by federal statute or regulation. However, this may not be the case if the DUI also implicated drug possession, depending on the circumstances. What is important to the FCC are disclosures related to denial of federal benefits pursuant to the 1988 Drug Act as cited in the application by Section 5301 of 21 USC §862. (For all you legal eagles out there, Section 5301 was renumbered and directly codified in 1990 as 21 USC §862 in case you want to look it up yourself.) The Section covers denial of federal benefits, including the right to apply for the FCC 214 Authority, based on drug convictions. Title 21 USC §862 specifically targets two types of convictions by either a federal or state court: 1) Convictions of drug distribution or trafficking; and 2) Convictions of drug possession that are drugs defined as illegal by the statute. This means that even State convictions for these offenses can result in the denial of a grant of 214 Authority, even if it was in an applicant’s past.

The language of the federal statute leaves the trial court responsible for determining the denial and prescribes guidelines for the length of denial.

In most cases, the court has permissive authority to deny based upon a first-time conviction, but is mandated to apply it for subsequent convictions. Of particular concern for those convicted of federal or state drug possession is Section 862(b), this section allows a waiver of the federal denial, if and only if, there was a reasonable body of evidence to substantiate that the defendant was an addict AND submitted himself or herself to long-term treatment program for addiction, OR is deemed rehabilitated by the rules of the Federal Department of Heath and Human Services. However the FCC 214 Application does not get that detailed about the issue, it merely requires disclosure of any denial of benefits based upon 21 USC §862 in order to determine whether or not to grant the petition.

While this is what the Federal Statues and Regulations say, I am not sure exactly how the FCC is enforcing this aspect of the application at the present time. I say this after a quick review of the pending applications and completed 214 Authorities available on the FCC website, that shows a number of companies have indicated that they were denied federal benefits in their applications but have not been weeded out by the FCC. I honestly don’t believe this is due to a surge in applicants that have convictions qualified under Section 862, and have defended their petitions successfully against the benefit denial clause. It is more likely that these are new applicants who are filing their own 214 applications and have simply mis-marked the online forms which the FCC granted Authority to anyway. The effect of this on the FCC website creates some confusion when looking for the answer of whether or not applicants may be denied a 214 based upon a federal or state drug conviction. However, the definitive legal answer is that the FCC can deny your application on that basis.

In your individual case when applying for the 214 Authority, I still think it best if you have local counsel or your telecom attorney review your criminal case prior to the filing. They should be able to tell you the impact of the conviction in your jurisdiction. Also, if you have to disclose the conviction, for any other reason than alcohol, please have your telecom attorney check out the impact of your current rehab program under 862(b) before making the decision to jump ship and be on your own. You are apparently addressing your past problems in rehab and don’t need to be further stigmatized for making the right move and seeking treatment at a time of crisis.

Good Luck and Success in the Industry.

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•• Ed Maldonado is a principal of Maldonado & Glenn, a telecom legal firm. He can be reached Send all of your Legal Line questions


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