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February 2015

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:

  • FCC Issues $3.36 Million Fine to Company and Its CEO for Selling Toll Free Numbers
  • Antenna Fencing and Public Inspection File Violations Result in $17,000 Fine
  • FCC Reiterates That “Willful Violation” Does Not Require “Intent to Violate the Law”

Hold the Phone: FCC Finds Company and CEO Jointly and Severally Liable for Brokering Toll Free Numbers

The FCC handed down a $3,360,000 fine to a custom connectivity solutions company (the “Company”) and its CEO for violations of the FCC’s rules regarding toll free number administration. Section 251(e)(1) of the Communications Act mandates that telephone numbers, including toll free numbers, be made “available on an equitable basis.” As a general rule, toll free numbers, including “vanity” numbers (e.g., 1-800-BUY-THIS), cannot be transferred, and must be returned to the numbering pool so that they can be made available to others interested in applying for them when the current holder no longer needs them. Section 52.107 of the FCC’s Rules specifically prohibits brokering, which is “the selling of a toll free number by a private entity for a fee.”

In 2007, the Enforcement Bureau issued a citation to the Company and CEO for warehousing, hoarding, and brokering toll free numbers. The Bureau warned that if the Company or CEO subsequently violated the Act or Rules in any manner described in the 2007 citation, the FCC would impose monetary forfeitures. A few years later, the Bureau received a complaint alleging that in June and July of 2011, the Company and CEO brokered 15 toll free numbers to a pharmaceutical company for fees ranging from $10,000 to $17,000 per number. In 2013, the FCC found the Company and CEO jointly and severally liable for those violations and issued a $240,000 fine.

Despite the 2007 citation and 2013 fine, the Bureau found evidence that the CEO continued to broker toll free numbers. In early 2013, the Bureau received tips that the CEO sold several toll free numbers to a law firm for substantial fees. An investigation revealed that the CEO, who was the law firm’s main point of contact with the Company, had sold 32 toll free numbers to the firm for fees ranging from $375 to $10,000 per number. On other occasions, the CEO solicited the firm to buy 178 toll free numbers for fees ranging from $575 to $60,000 per number. This, along with his correspondence with the firm–including requests that payments be made to his or his wife’s personal bank accounts–were cited in support of a 2014 Notice of Apparent Liability (“NAL”) finding that the CEO, in his personal capacity and on behalf of the Company, had “yet again, apparently violated the prohibition against brokering.”

As neither the Company nor the CEO timely filed a response to the 2014 NAL, the FCC affirmed the proposed fines: $16,000 for each of the 32 toll free numbers that were sold, combined with a penalty of $16,000 for each of the 178 toll free numbers that the Company and CEO offered to sell, resulting in a total fine of $3.36 million.

FCC Rejects AM Licensee’s “Not My Tower, Not My Problem” Defense

The FCC imposed a penalty of $17,000 against a Michigan radio licensee for failing to make available its issues/program lists in the station’s public file and for failing to enclose the station’s antenna structure within an effective locked fence.
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January 2015

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:

  • Individual fined $25,000 for Unauthorized “Chanting and Heavy Breathing” on Public Safety Station
  • Failure to Timely Request STA Results in $5,000 Fine
  • FCC Imposes $11,500 Fine for Intentional Interference and Station ID Violation

FCC Fired up by a New Yorker’s Deliberate Disregard for Public Safety

Earlier this month, the FCC imposed a $25,000 fine against a New York man for operating a radio transmitter without a license and interfering with the licensed radio communications system of the local fire department. Section 301 of the Communications Act provides that “[n]o person shall use or operate any apparatus for the transmission of energy or communications or signals by radio . . . except under and in accordance with [the Act] and with a license.” Section 333 of the Act prohibits a person from willfully or maliciously interfering with any radio communications of any station licensed or authorized under the Act or operated by the United States government.

On October 31, 2013, the local fire department complained to the FCC that unauthorized transmissions of chanting and heavy breathing were interfering with its radio communications system. When the transmissions occurred during fire emergencies, the firefighters were forced to switch to an alternate frequency to communicate with each other and with the dispatchers. FCC agents traced the source of the interfering transmissions to an individual’s residence–a location for which no authorization had been issued to operate a Private Land Mobile Station. County police officers interviewed the individual and confirmed that one of his portable radios transmitted with the unique identifying code that the fire department observed when the unauthorized transmissions interfered with its communications. The officers subsequently arrested the individual for obstruction of governmental administration.

The FCC found the individual’s conduct was particularly egregious because his unlicensed operations hampered firefighting operations and demonstrated a deliberate disregard for public safety and the Commission’s authority and rules. Thus, while the FCC’s base fines are $10,000 for operation without authorization and $7,000 for interference, the FCC found that an upward adjustment of $8,000 was warranted, leading to the $25,000 fine.
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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:

  • Sponsorship Identification Violation Yields $115,000 Civil Penalty
  • $13,000 Increase in Fine Upheld for Deliberate and Continued Operation at Unauthorized Location
  • FCC Reduces $14,000 Fine for EAS and Power Violations Due to Inability to Pay

FCC Adopts Consent Decree Requiring Licensee to Pay $115,000 Civil Penalty

Earlier this month, the FCC’s Enforcement Bureau entered into a Consent Decree with a Nevada TV station terminating an investigation into violations of the FCC’s sponsorship identification rule.

The FCC’s sponsorship identification rule requires broadcast stations to identify the sponsor of content aired whenever any “money, service, or other valuable consideration” is paid or promised to the station for the broadcast. The FCC has explained that the rule is rooted in the idea that the broadcast audience is “entitled to know who seeks to persuade them.”

In 2009, the FCC received a complaint alleging that an advertising agency in Las Vegas offered to buy air time for commercials if broadcast stations aired news-like programming about automobile liquidation sales events at dealerships. The FCC investigated the complaint and found that the licensee’s TV station accepted payment to air “Special Reports” about the liquidation sales. The “Special Reports” resembled news reports, and featured a station employee playing the role of a television reporter questioning representatives of the dealership about their ongoing sales event.

The licensee acknowledged the applicability of the sponsorship identification rule to the “Special Reports,” but asserted that the context made clear their nature as paid advertisements despite the absence of an explicit announcement. The FCC disagreed, contending that the licensee failed to air required sponsorship announcements for twenty-seven “Special Reports” broadcast by the station from May through August of 2009.

As part of the Consent Decree, the licensee admitted to violating the FCC’s sponsorship identification rule and agreed to (i) pay a civil penalty of $115,000; (ii) develop and implement a Compliance Plan to prevent future violations; and (iii) file Compliance Reports with the FCC annually for the next three years.

FCC Finds That Corrective Actions and Staffing Problems Do Not Merit Reduction of Fine

The FCC imposed a $25,000 fine against a Colorado radio licensee for operating three studio-transmitter links (“STL”) from a location not authorized by their respective FCC licenses.

Section 301 of the Communications Act prohibits the use or operation of any apparatus for the transmission of communications signals by radio, except in accordance with the Act and with a license from the FCC. In addition, Section 1.903(a) of the FCC’s Rules requires that stations in the Wireless Radio Services be operated in accordance with the rules applicable to their particular service, and only with a valid FCC authorization.

In August 2012, an agent from the Enforcement Bureau’s Denver Office inspected the STL facilities and found they were operating from a location approximately 0.6 miles from their authorized location. The agent concluded–and the licensee did not dispute– that the STL facilities had been operating at the unauthorized location for five years. A July 2013 follow-up inspection found that the STL facilities continued to operate from the unauthorized location.
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