The news follows charges levied against the company for failure to report its interstate revenues and contribute to the Universal Service Fund.
In addition to agreeing to the settlement magicJack, which sells a VoIP telephone service to consumers, also agreed to an extensive compliance plan.
“Today’s settlement sends a strong message that we take seriously the requirements on VoIP service providers to meet their legal obligations,” said Ajit Pai, FCC chairman.
“I am glad we can resolve this long-standing investigation. I thank the FCC Enforcement Bureau team for their hard work and dedication to enforcing the law.”
The $5 million settlement resolves the Enforcement Bureau’s investigation and makes clear that magicJack will comply with federal rules going forward.
The company is also required to regularly report to the Commission on its compliance with this agreement.
magicJack positions itself as a competitive replacement for traditional telephone services.
It uses Internet service to allow consumers to make phone calls to and receive calls from traditional mobile and landline phones.
The service includes traditional phone services such as caller ID, voicemail, call forwarding, and 411 service.
Formally called magicJack VocalTec, this publicly traded company operates in the US through Delaware-based, wholly owned subsidiaries MJLP and YMax Communications.
Last month, SES confirmed its intention to clear a portion of its C-band spectrum in the US, in line with the Federal Communications Commission’s (FCC) order published in April.
The accelerated clearing of the spectrum including the migration of existing customers, is an important and resource-intensive process for the current C-band users.
