Enforcement Newsletter – April 9, 2014
This edition summarizes notable FCC-related enforcement matters during the first quarter of 2014. Questions or comments may be addressed to David H. Solomon at 202-383-3369 or firstname.lastname@example.org.
New Enforcement Bureau Chief
- In March, Chairman Wheeler named Travis LeBlanc as the new Acting Chief of the Enforcement Bureau. Mr. LeBlanc previously served as a top deputy and senior advisor to California Attorney General Kamala Harris, overseeing the office’s operations and activities involving complex litigation and policy matters on a broad range of issues such as technology regulation, telecommunications, high-tech crime, cybersecurity, privacy, intellectual property and antitrust. He established and oversaw California’s first high-tech crime and privacy enforcement units.
- Given his background, it seems likely that Mr. LeBlanc will take an active approach to enforcement, particularly regarding privacy and other consumer issues. Mr. LeBlanc also appears focused on addressing the Enforcement Bureau’s backlog and making the Bureau more efficient.
FCC Process Reform Report
- The “Report on FCC Process Reform” issued by an FCC staff working group led by Diane Cornell included several recommendations specifically regarding the Enforcement Bureau: (1) consider notifying investigation subjects of closure of investigation; (2) reevaluate case selection criteria/enforcement priorities to maximize enforcement; (3) develop public-private partnerships and enhanced transparency to improve resolution of interference issues; (4) improve FCC databases on which the Enforcement Bureau relies; (5) consider updating forfeiture guidelines; (6) streamline or remove the OGC process for approval of Enforcement Bureau subpoenas; and (7) evaluate whether to make legislative recommendations to increase the one-year statute of limitations for non-broadcasters to at least two years and to eliminate the requirement for a Citation prior to a Notice of Apparent Liability (“NAL”) for non-regulated entities in certain instances. The report also included a number of recommendations regarding the Consumer and Governmental Affairs Bureau’s informal consumer complaint process.
- The Commission issued a $5.2 million NAL for deceptive marketing, slamming, cramming, and violation of the truth-in-billing rules. The Enforcement Bureau entered into a $500,000 slamming Consent Decree, settling a prior NAL of approximately $1 million.
- The Commission issued a $1.8 million NAL and a $640,000 Forfeiture Order for violation of the Telephone Consumer Protection Act (“TCPA”) rules against “junk faxes.”
- The Commission issued two TCPA declaratory rulings: (1) allowing package delivery companies to alert wireless consumers about their packages, as long as consumers are not charged and may easily opt out of future messages; and (2) clarifying that text-based social networks may send administrative texts confirming customers’ interest in joining such groups. Dozens of TCPA petitions for declaratory ruling are pending.
Universal Service Fund
- The Commission issued a $3.7 million NAL for requesting or receiving Lifeline support for ineligible customers.
- The Enforcement Bureau entered into a Consent Decree for approximately $500,000 regarding failure to make USF payments and related issues, settling an NAL of approximately $800,000. The Commission issued a $179,000 Forfeiture Order (the full amount of the NAL) in another USF non-payment case.
Toll-Free Number Brokering
- The Commission issued a $3.36 million NAL for violation of the toll-free number brokering rules.
Rural Call Completion
- The Enforcement Bureau entered into a $2.5 million Consent Decree regarding rural call completion issues. This Consent Decree included a much less onerous compliance plan than the one prior Consent Decree in this area, although the payment amount was higher.
Emergency Alert System
- The Commission issued an NAL totaling more than $1.9 million against three cable programmers ($1.12 million, $530,000, and $280,000, respectively) for transmitting or causing to be transmitted a movie trailer that included EAS warning tones. The Commission also issued a $200,000 NAL against another cable programmer for similar alleged violations regarding a different advertisement.
Marketing of Wireless Microphones
- The Enforcement Bureau entered into a $120,000 Consent Decree with a major retailer regarding its online marketing of wireless microphones.
Other Notable Actions
- Jamming: The Commission issued a $29,250 NAL against a manufacturer that was operating a cellular phone jammer at its factory. The Bureau said it would have proposed a $39,000 forfeiture but reduced the amount by 25 percent because the manufacturer voluntarily surrendered the device to FCC field agents.
- Sponsorship ID: The Commission imposed a $44,000 forfeiture on a broadcaster for running a spot 11 times without sponsorship identification. The Commission indicated that, consistent with other recent cases, it will generally calculate sponsorship ID forfeitures by multiplying the $4,000 base amount by the number of times a station aired a spot without sponsorship ID.
- Unauthorized Transfer of Control: The Enforcement Bureau entered into a $50,000 Consent Decree regarding unauthorized transfers of control of fixed wireless licenses.
- Unauthorized Operation: The Enforcement Bureau issued a $25,000 NAL against a Wireless Internet Service Provider for operating unauthorized external amplifiers. The Bureau also issued a $25,000 NAL against a “pirate” FM radio operator.
- Tower Safety Rules: The Enforcement Bureau issued a $25,000 NAL against a major wireless carrier for failure to register, paint, and light a tower. It increased the proposed amount from $13,000 based on the company’s substantial revenues.
- Hearing Aid Compatibility: The Enforcement Bureau released three $6,000 NALs and one $5,000 NAL against small wireless carriers for failure to timely file their annual HAC reports.
- Miscellaneous Violations: The Enforcement Bureau entered into a $185,000 Consent Decree resolving a company’s failures to: (1) obtain international 214 authority; (2) register its interstate telecommunications service; (3) make required regulatory filings and payments; (4) comply with the rules applicable to prepaid calling card providers; and (5) file Customer Proprietary Network Information (“CPNI”) certifications.
- Voluntary Disclosure: The Commission summarized the case law on making a downward adjustment in forfeiture amounts for voluntary disclosure in a way that appears to make it more difficult to obtain such a reduction. Specifically, the Commission said it will consider voluntary disclosure to be a mitigating factor only if two conditions are met: (1) the company has taken corrective measures prior to FCC inquiry or initiation of enforcement action; and (2) there is not a lengthy delay between the time the company learned of the violation and the time it brought the matter to the FCC’s attention. The Commission considered a nearly four-month delay in voluntary disclosure to be “lengthy.”
- Section 504: The Media Bureau took two actions that appear in tension with section 504 of the Communications Act, which prohibits penalizing an entity for failure to pay a forfeiture prior to a court ruling. Specifically, the Bureau: (1) entered into a Consent Decree requiring a voluntary contribution even though the Forfeiture Order relating to the matter had been cancelled after the U.S. Attorney’s Office declined to institute a collection action; and (2) at the same time it issued an NAL, indicated that it intended to grant renewal (for a shortened term of two years) only upon conclusion of the forfeiture proceeding, suggesting that the Media Bureau might withhold grant of the renewal if the licensee did not pay.