Enforcement Newsletter – July 6, 2016


This edition summarizes notable new FCC-related enforcement matters during the second quarter of 2016.  Questions or comments may be addressed to David H. Solomon at 202-383-3369 or dsolomon@wbklaw.com


  • The Commission issued a Notice of Apparent Liability (“NAL”) proposing a $51 million forfeiture against a carrier for receiving approximately $9.7 million dollars in improper payments from the Universal Service Fund’s Lifeline program for duplicate or ineligible consumers.  The NAL indicates that company employees “repeatedly and explicitly told” management that sales agents were fraudulently enrolling ineligible consumers.  The Commission also directed the company to explain why the Commission should not order the suspension of Lifeline reimbursements and initiate proceedings to revoke the company’s Commission authorizations.
    • Commissioners Clyburn approved in part and concurred in part, stating that a more significant proposed forfeiture would have been appropriate.  Commissioner Pai approved in part and dissented in part, also stating that the proposed forfeiture should have been higher, and could have been had the Chairman not held the NAL for a period of time, which allowed the statute of limitations to lapse for certain violations.  Commissioner O’Rielly also approved in part and dissented in part, stating that he had questions whether all of the conduct falls within the statute of limitations period.
    • In the accompanying News Release, Enforcement Bureau Chief Travis LeBlanc said:  “We reserve the strongest sanctions for those who defraud or abuse federal programs.
    • This is the second highest proposed forfeiture in FCC history and the fourth NAL in the last two years for more than $25 million.  Prior to Chairman Wheeler’s tenure, the highest proposed forfeiture was $18.4 million, in 2013.
    • After reviewing the company’s response regarding potential suspension of reimbursements, the Wireline Competition Bureau directed the Universal Service Administrative Company to issue a temporary hold of payments to the company.


  • The Commission released a $34.9 million Forfeiture Order against a Chinese company for marketing unlawful jamming equipment, the same amount proposed in a 2014 NAL.  The company did not respond to the NAL, but the Forfeiture Order noted that the company has taken steps to come into compliance with the law.  The Commission also released a $48,000 Forfeiture Order against a Florida man for jamming cellular service, again the same amount proposed in a 2014 NAL to which the individual did not respond.

Foreign Ownership

  • The Enforcement Bureau entered into a Consent Decree with a United States carrier and its ultimate parent for levels of indirect foreign control that exceeded the levels previously approved by the Commission.  The companies admitted liability, agreed to Compliance Plans, and agreed to a civil penalty of $1.1 million.

Cable Modems

  • On the same day the Commission approved the Charter/Time Warner Cable merger, the Media Bureau entered into a Consent Decree with Charter resolving an investigation into whether it prevented the connection of customer-owned modems without determining that they posed a threat of harm to the network or of theft of service.  Charter agreed to a Compliance Plan and to make a $640,000 “settlement payment” to the Treasury.  It did not admit a violation of the Commission’s rules.

Rural Call Completion

  • The Enforcement Bureau entered into a Consent Decree regarding a small long-distance company’s compliance with rural call completion requirements.  The company admitted liability, agreed to pay a $100,000 civil penalty, and agreed to a Compliance Plan.

Inflationary Increases in Maximum Forfeiture Penalties

  • The Enforcement Bureau released an order increasing for inflation the maximum forfeiture amounts permitted by the Communications Act, effective July 1, 2016.  The Bureau made the last similar adjustments in 2013.  Based on a recent change to the statutory scheme for inflation adjustments, the new maximum amounts apply to forfeiture penalties assessed after the effective date of the increases, even if the violations predated the effective date of the adjustment.  However, because, unlike with prior inflation adjustment orders, the Bureau amended only the portion of the FCC rule setting out the maximum forfeiture amounts permitted by statute and not the portion of the rule setting limits on forfeitures to be assessed by the Commission, it is unclear whether further rule amendments are required before any forfeitures can be assessed under the new statutory limits.
  •  The new maximum statutory forfeiture penalties include, among others, the following: 
  1. Common carriers:  $189,361 per violation or per day of a continuing violation, up to a maximum of $1,893,610 for a continuing violation (up from $160,000/$1.575 million);
  2. Broadcasters/cable operators:  $47,340 per violation or per day of a continuing violation, up to a maximum of $473,402 for a continuing violation (up from $37,500/$400,000) (for broadcast indecency the maximum amounts increased from $350,000/$3.3 million to $383,038/$3,535,740); and
  3. Other entities:  $18,936 per violation or per day of a continuing violation, up to a maximum of $142,021 for a continuing violation (up from $16,000/$122,500).Common carriers: $189,361 per violation or per day of a continuing violation, up to a maximum of $1,893,610 for a continuing violation (up from $160,000/$1.575 million);

Local Radio Ownership Rule

  • The Media Bureau released a $20,000 NAL against an FM radio licensee that, in light of a time brokerage agreement, held attributable interests in more stations than permitted by the local radio ownership rule.  The Bureau noted that the licensee was “fully aware” that entering into the time brokerage agreement resulted in a violation of the rule and criticized the licensee for brokering under the agreement while a waiver request was pending.  The Bureau also denied the waiver request due to the licensee’s brokering prior to grant of the waiver.

Short-Term Broadcast Renewals

  • The Commission entered into a Consent Decree with a television station regarding compliance with Children’s Television Act educational and informational programming, public inspection file, and ancillary and supplemental service reporting requirements, and granted a short-term renewal for only two years.  The licensee admitted liability, agreed to make a $14,500 “settlement payment,” and agreed to implement a Compliance Plan.  The Media Bureau also issued short-term renewals for public inspection file issues (two years with a $15,000 NAL to an AM station and four years with a $12,000 NAL to a noncommercial FM station). 

Other Notable Actions

  • Merger Enforcement:  As in the AT&T/DirecTV merger, in the Charter/Time Warner cable merger approval order, the Commission required the appointment of an independent, external compliance officer.  It also provided for extension of conditions in certain circumstances, and required the company to report any material non-compliance with the conditions.

  • Data Roaming:  The Enforcement Bureau denied complaints (one on an interim basis) against two nationwide carriers’ roaming rates.

  • Environmental Rules:  The Wireless Telecommunications Bureau issued letters finding that several wireless carriers violated the Commission’s environmental and related rules and indicating that future violations could lead to enforcement action.  The letters did not admonish the carriers or propose or take any other enforcement action.

  • Prosecutorial Discretion:  The Enforcement Bureau vacated a $25,000 Forfeiture Order for violations of section 1.17 (truthful and accurate statements to the Commission) and section 1.65 (updating of applications) that was before the Commission through an application for review.  Upon request of the company involved, the Bureau treated the application for review as a petition for reconsideration.  The Bureau stated:  “Consistent with our broad prosecutorial discretion in enforcement proceedings, and based on the totality of the circumstances and a careful weighing of the benefits of further adjudication against the costs to the agency, the Bureau has determined that the public interest is best served” by vacating the Forfeiture Order.  One can infer from this action that the Bureau may have had concerns over whether the Commission would have affirmed the Forfeiture Order.