Enforcement Newsletter – January 8, 2014

Click here to view the January 2014 Enforcement Newsletter

This edition summarizes notable FCC-related enforcement matters from June through December 2013. Questions or comments may be addressed to David H. Solomon at 202-383-3369 or dsolomon@wbklaw.com.

Universal Service

Lifeline: The Commission issued 11 Notices of Apparent Liability (“NALs”), proposing forfeitures ranging from $1.2 million to $22.4 million against wireless carriers that requested and/or received support for duplicate subscribers from the Lifeline program. The proposed forfeitures far exceed the amounts of over-compensation requested and/or received by the company – for example, the NAL of $22.4 million involved a request for unauthorized compensation of approximately $40,000. The $22.4 million was the highest NAL (and third highest enforcement action) in FCC history. Commissioner Pai said in a separate statement to the first group of NALs that the Commission had increased the proposed forfeiture amounts 50-fold at his request.

Contributions/Reporting: The Enforcement Bureau entered into Consent Decrees settling investigations for $1.3 million, $500,000, and $475,000 regarding contributions and reporting to the USF and related matters. It also entered into a $215,000 Consent Decree settling a $284,000 NAL.

Consumer Protection
• The Commission issued a $3.56 million NAL for slamming, cramming, deceptive marketing, and truth-in-billing violations.

Hearing Aid Compatibility
• The Enforcement Bureau entered into Consent Decrees of $650,000, $280,000, $260,000, $100,000, and $35,000 with small wireless carriers regarding compliance with the HAC rules. It also issued a $5,400 NAL against a small carrier for failure to timely file its annual HAC report.

Retransmission Consent
• The Commission issued a $2.25 million NAL against a small cable operator for its carriage of six televisions stations without licensee approval. The Commission referred to the violations as “egregious” and “flagrant,” and appeared particularly troubled by the fact that the cable operator continued the violation after being informed of the violations by the Media Bureau. The proposed forfeiture is the highest enforcement action ever against a cable operator and vastly exceeds the amount of prior retransmission consent NALs.

Emergency Alert System
• The Enforcement Bureau entered into a $25,000 NAL with a cable programmer and a $39,000 Consent Decree with a television broadcaster regarding simulated EAS signals. The NAL was the first ever against a cable programmer for EAS violations. The Consent Decree included an extensive public education campaign regarding the EAS rules as part of the compliance plan. The programmer admitted liability in the Consent Decree, which is unusual, but is something the Enforcement Bureau appears to be seeking more often in certain cases or categories of cases.

• The Enforcement Bureau entered into a $111,000 Consent Decree regarding the broadcast of indecent material on a Spanish-language television station. According to the Bureau’s News Release, complaints had alleged, among other things, that the show “on several occasions featured pornographic film performers and exotic dancers.” The broadcaster admitted liability in the Consent Decree. This was the first indecency Consent Decree in three years. The last indecency NAL or forfeiture order was in 2008.

Other Notable Actions

Inflation Adjustments in Maximum Forfeiture Amounts: The Enforcement Bureau made inflation adjustments in the maximum forfeiture amounts contained in the Commission’s rules. For example, the maximum “catchall” forfeiture amount for common carriers increased from $150,000 to $160,000 per violation or per day of a continuing violation up to a total of $1.575 million for a continuing violation (up from $1.5 million), while the comparable maximum per violation or per day amount for broadcasters remained at $37,500 but the maximum for a continuing violation increased from $375,000 to $400,000. The maximum amount for a broadcast indecency violation increased from $325,000 per violation or per day to $350,000 up to a maximum of $3.3 million for a continuing violation (up from $3 million). The increased maximum amounts apply for violations occurring after September 12, 2013.

Cellular Geographic Service Area Modification Rules: The Enforcement Bureau entered into a $600,000 Consent Decree relating to compliance with the CGSA rules.

Tower Lighting and Registration: The Commission issued a $234,000 NAL for a tower company’s failure to light two towers as required and failure to update the FCC regarding the dismantlement of one tower. FCC staff had repeatedly warned the company that it must take steps to comply. For the two lighting violations, the Commission proposed the statutory maximum — $112,500 for each violation.

Satellite Processing Queue: In the first NAL ever in this area, the Commission issued a $112,500 NAL (the statutory maximum) against a satellite licensee for filing an application that permitted another entity to assume its position in the processing queue for a geostationary orbit-like satellite. Commissioner Pai dissented on the grounds that any such violation was not a continuing violation and thus was outside the statute of limitations given that the licensee filed the application at issue in 2010, well before the applicable one-year statute of limitations expired.

International Traffic Reports: In the first NAL ever in this area, the Enforcement Bureau issued a $43,200 NAL against a prepaid calling card company for not filing international traffic data reports for eight years. For statute of limitations purposes, the Bureau treated the failure to file each report as a continuing violation until filed. The legality of this interpretation of the one-year statute of limitations, while consistent with recent Commission case law (including the satellite processing queue NAL described above), is highly suspect and could well be reversed if ever challenged in court. 

• Children’s Television Reports: In addition to numerous enforcement actions involving lower amounts, the Media Bureau entered into a $75,000 Consent Decree with a Class A television licensee for failure to timely file children’s television reports for various stations and other compliance issues. The licensee admitted liability in the Consent Decree.

• Unauthorized Transfer of Control: The Enforcement Bureau entered into a $70,000 Consent Decree regarding unauthorized transfer of control of various wireless licenses and potential misrepresentation issues.

Unauthorized Operation: The Commission issued a $202,000 NAL against an Unlicensed National Information Infrastructure entity that had been repeatedly interfering with FAA weather systems. The Enforcement Bureau issued a $30,000 NAL against a manufacturer of non-communications products for operating handheld (walkie-talkie) radios without obtaining general mobile radio service licenses. The Bureau increased the proposed base amount from the base amount due to the duration of the violation (nine years) and the fact that the company’s parent is a multi-billion dollar global enterprise. The Bureau also issued a $31,875 NAL for operation of a GPS jammer.

Unauthorized Equipment Marketing: The Enforcement Bureau entered into a $61,500 Consent Decree regarding the manufacturing and marketing of unauthorized audio sound equipment.

Equal Employment Opportunity: The Media Bureau issued two $20,000 NALs arising from EEO audits. Both cases involved failure to notify job referral sources about vacancies and to self-assess EEO performance, and the Bureau imposed reporting conditions in both cases. In one of the cases, involving a noncommercial educational television licensee, $17,000 of the $20,000 was for providing incorrect factual information without a reasonable basis for believing the information was correct, in violation of the due diligence requirements of section 1.17 of the FCC’s rules.

Rural Call Completion: The Enforcement Bureau issued an Enforcement Advisory reminding long distance carriers of their obligations to respond fully to rural call completion complaints served on them by the Consumer and Governmental Affairs Bureau and threatening enforcement action against carriers that submit patently deficient responses to such complaints. The Enforcement Bureau reiterated that resolving rural call completion issues is a “top priority” of the Commission. The Commission adopted record-keeping and reporting rules to facilitate enforcement.