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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • Felony Fraud Conviction Results in AM Station License Revocation Hearing
  • Dash Camera Retailer Enters $75,000 Consent Decree for Marketing Unauthorized Devices
  • Broadcaster Agrees to $9,000 Consent Decree for Violations Relating to Silent STA Rule, Translator Rebroadcasting Rule, and the Truthful and Accurate Statements Rule

Up in Smoke: Lying to IRS Leads FCC to Question AM Licensee’s Character Qualifications

The FCC recently issued a Hearing Designation Order and Order to Show Cause to determine whether the license of a Tennessee AM station should be revoked.  The licensee’s sole member, a former representative in the Tennessee legislature, purchased cigarette tax stamps in 2007 and sold them for a substantial profit following the legislature’s increase in the state’s cigarette tax.  He failed to include this profit in his 2008 individual income tax return and was convicted in 2016 of fraud and making false statements to the government.  The licensee reported the conviction to the FCC on April 14, 2017 – two weeks after the deadline set forth in Section 1.65(c) of the FCC’s Rules (which requires licensees to report adverse court and administrative findings bearing on character qualifications by the anniversary of their state’s renewal filing deadline).  The licensee also disclosed the conviction in the station’s March 18, 2020 license renewal application, along with failures to file Ownership Reports and to timely upload quarterly Issues/Programs lists.

Section 312 of the Communications Act of 1934 (the “Act”) permits the FCC to revoke a license if it determines that the licensee lacks the requisite character qualifications to remain a Commission licensee.  Key to the FCC’s character inquiry is the question of whether the licensee “is likely to be forthright in its dealings with the Commission and to operate its station consistent with the requirements of the Communications Act and the Commission’s Rules and policies.”  The FCC has previously explained that any violation of the Act or FCC’s Rules may be relevant to a licensee’s character qualifications.  With respect to non-FCC misconduct, the FCC has found that felonies and adjudicated fraudulent representations to other governmental units are relevant to a licensee’s character qualifications because they are indicative of the licensee’s propensity to obey the law or to engage in similar, non-truthful behavior before the FCC.  The FCC relies heavily on the candor of licensees, and therefore deems full and clear disclosure of all material facts as essential to its processes.

In this case, the individual’s felony conviction resulted from dishonest conduct: omission of material financial information resulting in a consequential inaccuracy in the information provided to the IRS.  The FCC concluded that the individual’s willingness to unlawfully conceal information from another federal agency, together with the licensee’s admitted failures to comply with certain FCC reporting requirements, called into question the licensee’s ability to provide complete and accurate information to the FCC.  Accordingly, the FCC commenced a hearing to determine whether the individual (and, by extension, the licensee) possesses the necessary character qualifications to remain a Commission licensee.

Dash Camera Retailer Settles Equipment Marketing Investigation for $75,000

The FCC entered into a consent decree with a Connecticut-based dash camera retailer, resolving an investigation into whether the company unlawfully marketed unauthorized vehicle dash cameras in the United States.  The investigation found, and the company admitted, that the retailer marketed several unauthorized camera models, failed to test its equipment’s radiofrequency (“RF”) emissions, and failed to retain measurement records in violation of the Act and the FCC’s Rules.

Section 302(b) of the Act prohibits, among other things, the sale or offering for sale of devices that fail to comply with the FCC’s RF equipment authorization regulations.  Similarly, Section 2.803(b) of the Commission’s Rules prohibits, with limited exceptions, the marketing of an RF device unless the device has first been properly authorized, identified, and labeled in accordance with the FCC’s Rules.

As detailed in Pillsbury’s Primer on FCC Radio Frequency Device Equipment Authorization Rules, equipment authorization procedures differ depending on whether the device is an “unintentional radiator” (a device that emits signals to other parts of the device or to an attendant device, such as a universal remote control”) or an “intentional radiator” (a device that intentionally emits RF energy outside of the device).  Section 2.906 of the Rules sets forth the relatively simple Supplier’s Declaration of Conformity (“SDoC”) procedures that apply to unintentional radiators.  Section 2.907 of the FCC’s Rules sets forth the more stringent Certification process required for intentional radiators.  Section 2.938 of the Rules requires that manufacturers or other responsible parties retain test measurement records and other data demonstrating that each RF device has been properly tested and authorized under the appropriate equipment authorization procedures prior to marketing. Continue reading →