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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:

  • Online Drone Retailer Fined Nearly $3 Million for Marketing Unauthorized Devices
  • FCC Denies Motion to Quash Letter of Inquiry Concerning Unauthorized Operation of Nevada LPFM Station
  • Unauthorized License Transfers Lead to $104,000 Consent Decree for New Jersey Water Service Company

FCC Affirms $2.8 Million Fine for Marketing Unauthorized Drone Transmitters

The FCC denied a petition asking it to reconsider a $2.8 million fine it issued to an online company for marketing and selling audio/visual (A/V) transmitters for use with drones that did not comply with FCC rules. The FCC found that dozens of the devices transmitted in unauthorized radio frequency bands and some transmitters were operating at excessive power levels.

Pursuant to Section 302(b) of the Communications Act of 1934, “[n]o person shall manufacture, import, sell, offer for sale, or ship devices or home electronic equipment and systems, or use devices, which fail to comply with regulations promulgated pursuant to this section.” Section 2.803(b) of the Commission’s Rules prohibits the marketing of radio frequency devices unless the device has first been properly authorized, identified, and labeled in accordance with the FCC’s rules. Any electronic device which intentionally emits radio frequency energy must be authorized before it can be marketed within the United States. The FCC noted in its Forfeiture Order that these technical and authorization requirements are designed to prevent interference.

The FCC’s Enforcement Bureau, Spectrum Enforcement Division, received complaints about the company’s equipment marketing and began investigating in 2016. After the investigation, the Enforcement Bureau issued a Citation and Order for violations of Section 302 of the Communications Act and Sections 2.803 and 2.925 of the FCC’s Rules. The Citation and Order stated that the company had been illegally marketing noncompliant and unauthorized drone transmitters. The FCC then received more complaints about the company’s marketing of the transmitters and began a further investigation.

After the company failed to respond, the Enforcement Bureau issued a second Citation and Order to compel the company to respond. The company again did not answer. In June 2018, a Notice of Apparent Liability for Forfeiture for over $2.8 million was issued to the company for its violations of the Communications Act and the FCC’s rules, and for its failure to respond to the FCC’s two orders. The company responded in July 2018, arguing that the Notice of Apparent Liability for Forfeiture should be cancelled, or the amount of the proposed fine should be reduced.

As we covered in detail here, the FCC released a Forfeiture Order in July 2020 issuing the proposed $2.8 million fine, declining to reduce the amount. In the Forfeiture Order, the FCC considered and rejected the company’s response, which did not dispute any of the factual allegations. Among its arguments, the company asserted that it lacked fair notice of its legal obligations. The FCC rejected this argument, explaining that the company had sufficient notice of the long-standing equipment authorization rules which apply to radio frequency devices. The FCC also explained that it twice put the company on notice when it issued citations warning the company of those requirements.

The FCC also rejected the company’s argument that the rules say nothing about authorization for devices that operate on both amateur and other frequencies, explaining that the rules are clear that any device emitting radio frequency energy is subject to the authorization requirements unless an exception applies. As it stands, the only current exception is for devices operating solely on amateur frequencies.

In August 2020, the company filed a Petition for Reconsideration asking the FCC to reconsider the Forfeiture Order. In June 2021, the FCC released an Order stating that upon review of the Petition for Reconsideration and the entire record, the Petition presented no new information and there was no basis for reconsideration. The FCC affirmed the Forfeiture Order and the fine.

The FCC strictly enforces its rules surrounding unauthorized devices, with a statement issued by Acting Chairwoman Rosenworcel’s office noting that this fine should serve as “notice to all others that we take our policies protecting our airwaves seriously.” The company will have 30 days from release of the June Order to pay the fine. If the fine is not paid within that time, the FCC may refer the matter to the Department of Justice for enforcement of the forfeiture.

FCC Rejects Nevada LPFM’s Motion to Quash a Letter of Inquiry Regarding Unauthorized Operation

The FCC’s Enforcement Bureau recently released an Order dismissing a low power FM (“LPFM”) licensee’s Motion to Quash a Letter of Inquiry (“LOI”) and denying the licensee’s Motion for Stay.

In November 2019, the Enforcement Bureau sent a letter to the licensee of the LPFM station notifying it that its license had expired pursuant to Section 312(g) of the Communications Act. The letter explained that the station had been operating from a site that was 256 feet from the station’s licensed coordinates. Pursuant to Section 73.875(b)(2) of the FCC’s Rules, any change in a station’s geographic coordinates, including corrections to the coordinates or a move of the antenna to another site, may only be made after the FCC grants a construction permit application. Though the licensee filed a request for authority to make the coordinate change, this request came only after it had already been operating at the new site for over a year.

The FCC noted in its 2019 letter to the licensee that Section 312(g) is clear that “[i]f a broadcasting station fails to transmit broadcast signals for any consecutive 12-month period, then the station license granted for the operation of that broadcast station expires at the end of that period.” FCC caselaw also makes clear that stations cannot avoid this 12-month deadline by operating from unauthorized facilities, as was the case here. The FCC found that the license had therefore expired, and the facts did not support reinstatement of the license.

The FCC then sent an LOI in April 2021 asking the Licensee if it continued to operate the station after the license expired. The licensee responded by filing a Motion to Quash the Letter of Inquiry and filing a Motion for Stay of the FCC’s investigation into whether it had continued to operate the station. In June 2021, the FCC issued an Order dismissing the licensee’s Motion to Quash the Letter of Inquiry, explaining that the LOI was issued pursuant to Sections 4(i), 4(j) and 403 of the Communications Act, not under its subpoena power in Section 409(e). The FCC said that because the licensee brought its Motion to Quash under Section 1.334 of the FCC’s Rules, which only applies to subpoenas, and because the LOI is not a subpoena, the Motion to Quash was “procedurally defective” and therefore dismissed it.

The FCC also denied the arguments laid out in the Motion to Quash for independent reasons. Among other arguments, the licensee had contended it has the right to operate its station pending the outcome of its appeal before the United States Court of Appeals for the District of Columbia Circuit. The FCC rejected this claim, explaining that it is premature. The FCC noted that it lacks sufficient information to determine whether the station indeed operated after the expiration of its license, and should it take a position regarding that argument it would pre-judge its own investigation. The FCC also dismissed the licensee’s argument that granting the Motion to Quash would serve the public interest. The FCC stated that granting the Motion would set a precedent allowing all appellants to avoid investigation while an appeal is pending.

Finally, the FCC denied the Motion for Stay because the licensee based its motion on its likelihood of prevailing on the Motion to Quash and the pending appeal. The FCC explained that not only did it dismiss the Motion to Quash, rendering moot any argument the licensee would prevail on that motion, but a pending appeal does not preclude the FCC from continuing its investigation into whether the station operated after the expiration of its license. Continue reading →

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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:

  • FCC Fines Colorado Wireless Operators for Use of Unauthorized Equipment and Unauthorized Operations
  • VoIP Provider Enters Into Consent Decree With $180,000 Penalty Over Failure to Meet FCC Filing Requirements
  • FCC Investigates Colorado Manufacturer’s Unauthorized Signal Booster

Two Colorado Wireless Operators Fined for Unauthorized Equipment and Unauthorized Operations

The FCC fined two Colorado-based wireless operators for intentionally altering settings on equipment so as to operate it in a manner not authorized by the FCC’s rules.  The operators, licensed to provide radiolocation services (such as radar services), instead operated a GPS vehicle tracking service using the unauthorized equipment on unauthorized frequencies.

Under Section 301 of the Communications Act of 1934 and Section 1.903(a) of the FCC’s Rules, the operation of any device that transmits radio signals, communications, or energy without an FCC authorization is prohibited.  Additionally, Section 302(b) of the Communications Act requires that radio frequency devices operate in accordance with their associated FCC authorization.  While a radiolocation service licensed under subpart F of Part 90 of the FCC’s Rules permits operations that “determine distance, direction, speed or position by means of radiolocation services, for purposes other than navigation,” GPS services rely on satellite communications to determine the location of an object, typically to allow the owner of a GPS receiver to navigate based upon triangulation of the satellite GPS signals.

The FCC began investigating the two operators in April 2017 after receiving a complaint alleging that the companies were providing non-radiolocation wireless data transmission services rather than the radiolocation services for which they were licensed.  The Enforcement Bureau issued Letters of Inquiry (LOI) to both operators, and FCC agents followed up with an investigation of the companies’ shared facilities in Denver, Colorado.  This investigation led the FCC to issue a second set of LOIs seeking additional information from the companies regarding the equipment used.

In October 2017, the companies filed requests for Special Temporary Authority (STA) acknowledging their unauthorized use of the equipment and seeking authority to migrate their radiolocation services to an affiliated non-radiolocation licensee authorized to operate on a different frequency.  The FCC denied the STA requests, as well as a subsequent Petition for Rulemaking filed jointly by the companies, noting that the services proposed would still be prohibited on the newly-requested frequencies, and that the transmission of GPS coordinates is not a radiolocation service as defined by the FCC’s rules.

In September 2018, the FCC issued a Notice of Apparent Liability (NAL) proposing $534,580 in total fines against the two companies for the use of unauthorized equipment and conducting unauthorized operations.  The companies responded to the notice, presenting several arguments as to why the NAL should be cancelled, but according to the FCC, still failing to explain how the non-radiolocation GPS service could legally operate using noncompliant equipment on a frequency band designated for other services.

The FCC considered and dismissed the companies’ various arguments, upholding the fines it had originally proposed.  Among other arguments, the companies asserted that they had held a reasonable belief that the GPS service was authorized due to prior conversations and assurances from FCC staff.  The FCC rejected that argument and reiterated that “parties who rely on staff advice or interpretations do so at their own risk.”  Critically, the FCC noted that the licenses themselves did not authorize non-radiolocation services, and a license grant is not a blanket authorization to operate any equipment of a party’s choosing.  The FCC also rejected the companies’ request that the fines be cancelled, instead choosing to adjust the fines upward due to both companies’ history of repeated and continuous violations of the FCC’s rules, along with the deliberate nature of these particular violations.

The companies have 30 days from release of the Orders to pay the fines in full.  If the fines are not paid within that time, the FCC noted that it may refer the matter to the Department of Justice to commence collection proceedings.

VoIP Provider Hit With $180,000 Penalty Over Failure to Comply with FCC Filing Requirements

The FCC entered into a Consent Decree with a Voice over IP (VoIP) provider, resolving an investigation into whether the provider violated several of the FCC’s filing requirements.  For purposes of settling the matter, the provider admitted that it failed to timely file its Telecommunications Reporting Worksheets, CPNI Certifications, Advanced Telecommunications Capability Data, and a response to an LOI from the Enforcement Bureau.

Under Section 254(d) of the Communications Act, “[e]very telecommunications carrier [providing] interstate telecommunications services . . . [must] contribute, on an equitable and nondiscriminatory basis, to the specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service.”  In implementing this directive, the FCC requires interstate telecommunications service providers, including VoIP providers, to contribute a portion of their interstate and international end-user telecommunications revenue to the Universal Service Fund (USF).  To accomplish this, providers must file annual, and in most cases quarterly, Telecommunications Reporting Worksheets (Worksheets) reporting their interstate and international revenue.  Failure to timely file and accurately report this information prevents the FCC from ensuring the provider is contributing its required share to the USF. Continue reading →

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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:

  • FCC Fines Long-Distance Carrier $4.1 Million Over Cramming and Slamming Violations
  • Wireless Internet Service Provider’s Unauthorized Operations Lead to Consent Decree
  • Mississippi and Michigan Radio Station Licensees Admonished for Late License Renewal Filings

Long Distance Carrier Receives $4.1 Million Fine for Deceptive Billing and Service Practices Targeting Vulnerable Populations

The FCC fined a long-distance telephone service provider $4.1 million for deceptive practices involving switching customers from their preferred interexchange carrier (the company handling a caller’s long-distance calls) without their permission, a practice known as “slamming,” and adding unauthorized charges to customers’ telephone service bills, a practice referred to as “cramming.”  This far-reaching scam employed tactics targeting vulnerable customers, including senior citizens and individuals with severe health conditions.  To make matters worse, when the fraudulent charges went unpaid, a number of these customers had their phone service disconnected.  Given the age and health of many of the affected individuals, losing phone service was not just an inconvenience, but a health and safety risk.

Section 201(b) of the Communications Act of 1934 (the Communications Act) generally protects consumers from unjust and unreasonable practices by telecommunications providers, which the FCC has found to include misrepresentations about a carrier’s identity or service intended to persuade customers to change their long-distance carrier.  The FCC has also found that placing unauthorized charges on a customer’s telephone bill constitutes a prohibited “unjust and unreasonable” practice under the Communications Act.  Additionally, Section 258 of the Communications Act and Section 64.112 of the FCC’s Rules prohibit telecommunications carriers from changing a subscriber’s telephone exchange provider without prior authorization from the customer, which must be done in accordance with the FCC’s verification requirements.

To make the FCC’s enforcement efforts more effective and efficient, Section 1.17(a) of its Rules prohibits parties from providing false or misleading information to the Commission.  The FCC has found that even absent an intent to deceive, false or misleading statements may still violate its rules if provided without a reasonable basis to believe the statement is true.

In 2017, the FCC noted that a significant number of consumer complaints regarding this long-distance carrier had been received by the Commission, state regulatory agencies, the Federal Trade Commission, and the Better Business Bureau.  The complaints alleged that the carrier switched their—or in many cases their older relatives’—long distance carrier without authorization or charged them for services they did not request.  Many complaints stated that the carrier’s telemarketers misrepresented themselves by claiming affiliation with the customer’s telecommunications service provider.  Others stated that the carrier offered a nonexistent discount on the consumer’s existing phone service or discussed a fraudulent government assistance program for low-income individuals and senior citizens that it falsely claimed could lower their cost of service.  According to many of the complaints, the “slamming” and “cramming” left many elderly and vulnerable customers unable to contact caregivers due to disconnected service.  For example, one complaint filed on behalf of a 94-year-old woman emphasized that, beyond the harmful financial impact, the “slamming” and “cramming,” and subsequent termination of telephone service, had created a broader safety issue.

In April 2018, the FCC issued a Notice of Apparent Liability (NAL) proposing a $5.3 million fine for these actions.  The NAL alleged that the carrier violated the Communications Act and FCC rules by changing the selected carrier of 24 customers without complying with the required verification procedures and placed 21 unauthorized charges on customer bills.  The NAL also alleged that the carrier failed to respond fully to the FCC’s letter of inquiry and submitted false information in the form of fraudulent third-party verifications.

In response, the carrier denied the slamming, cramming, misrepresentation, and altered third-party verification claims, and challenged the validity of the evidence relied upon by the FCC.  The carrier also argued that the FCC had exceeded its authority, violated the carrier’s due process rights, and proposed an unlawful fine amount.  Finally, the carrier urged reduction of the proposed fine based on its inability to pay such an amount.  The FCC considered the carrier’s arguments but largely reaffirmed the conclusions set forth in the earlier NAL.  It did, however, decline to find that the carrier violated Section 1.17(a) of the Commission’s Rules regarding the third-party verifications submitted.  The carrier had argued that it maintained an arms-length relationship with its third-party verification provider, with no opportunity to alter or falsify recordings, and therefore had a reasonable basis for believing the recordings provided were authentic. Although the FCC expressed doubts regarding the validity of the recordings, it concluded that the carrier had a reasonable basis for believing the recordings were legitimate.

Because of this finding, the FCC reduced the fine from the originally-proposed $5.3 million to $4.1 million.  The carrier now has 30 days from release of the Order to pay the fine.  If it is not paid within that time period, the FCC noted it may refer the matter to the Department of Justice to enforce collection.

FCC Enters Consent Decree with Wireless Internet Service Provider Over Interference to FAA Systems

The FCC entered into a Consent Decree with a wireless internet service provider, concluding an investigation into the operation of unauthorized devices causing harmful interference to a Federal Aviation Administration (FAA) weather radar system.

Section 301 of the Communications Act prohibits the use or operation of any device that transmits radio signals, communications, or energy without an FCC license.  There is an exception to this general licensing requirement under Part 15 of the FCC’s Rules whereby certain low power devices that comply with established technical parameters to limit interference may operate without a license.  In particular, the FCC has set aside spectrum in the 5 GHz band for unlicensed use by Unlicensed National Information Infrastructure (U-NII) devices, commonly used for Wi-Fi and broadband internet access.  To avoid harmful interference to other nearby authorized services, the Part 15 rules require unlicensed U-NII devices to incorporate “Dynamic Frequency Selection” capability, which enables such devices to detect nearby radiofrequency devices and avoid operating on frequencies that could create interference to those devices.

As we discussed here, in May 2018, the FCC issued an initial warning to the wireless internet service provider regarding U-NII devices causing interference to a nearby doppler radar station.  In response, the provider assured the FCC that all of its devices were operating in compliance with Commission rules.  A year later, however, the FCC received a report from the FAA that the same radar station was experiencing interference from a source operating on a nearby frequency in the 5 GHz band.  In June 2019, the FCC Enforcement Bureau began investigating the interference claims and identified two U-NII devices operated by the wireless internet service provider without Dynamic Frequency Selection capabilities enabled.  Following this discovery, the Bureau instructed the provider to modify the U-NII devices to operate on a different frequency, which immediately resolved the interference.  In May 2020, the Bureau issued an NAL to the wireless provider, proposing a $25,000 fine for violations of the Part 15 rules.

In response to the NAL, the wireless internet service provider admitted that in June 2019, it was in fact operating U-NII devices in violation of the FCC’s rules, but corrected the device configurations immediately upon discovery of the issue.  The provider also informed the FCC that it had since implemented a policy to verify on a monthly basis that all of its devices are operating on the correct frequency.  Additionally, in an effort to obtain a reduction of the proposed $25,000 fine, the company submitted financial documentation demonstrating its inability to pay the proposed fine amount.

To resolve the investigation, the Bureau entered into a Consent Decree under which the company (1) admitted, for purposes of the Consent Decree, that it violated the FCC’s rules governing U-NII devices; (2) agreed to pay a reduced $11,000 penalty; and (3) agreed to implement a compliance plan to prevent future violations.

Mississippi and Michigan Radio Stations Avoid Fines, But Receive Admonishments for Failing to Timely File Their License Renewal Applications

The FCC recently canceled proposed fines against the licensees of a Michigan FM station and FM and AM stations in Mississippi for late license renewal application filings and instead admonished the stations for the violations.

Section 73.3539(a) of the FCC’s rules requires that license renewal applications be filed four months prior to the license expiration date.  The Michigan station’s license renewal application was due June 1, 2020, but was not filed until September 29, 2020, while the Mississippi stations’ applications were due February 3, 2020, but were not filed until May 20, 2020.

Under Section 1.80(b) of the FCC’s Rules, the Commission sets a base fine amount of $3,000 for failure to timely file a required form, which may be adjusted upward or downward based on consideration of the “circumstances, extent and gravity of the violation.”  Absent an explanation from the Mississippi stations regarding the late filings, the FCC last month proposed the full $6,000 fine ($3,000 for each late-filed application).  In response, the licensee argued that it was not aware of the filing deadline and therefore did not intentionally violate Section 73.3539(a) of the FCC’s Rules.  The licensee also submitted federal tax returns in support of a request to cancel the proposed fine based upon an inability to pay such an amount.

The FCC responded that licensees are responsible for complying with the Commission’s rules, and even violations resulting from inadvertent errors or a lack of familiarity with the Commission’s rules are still considered willful violations.  The FCC did, however, accept the licensee’s financial hardship showing and did not issue the proposed $6,000 fine.  The Commission instead admonished the station for willful violations of its rules.

With regard to the Michigan FM station, the FCC proposed a $3,000 fine against the Michigan School District to which the station is licensed.  In response, the School District explained that due to restrictions associated with COVID-19, the employees did not have access to the station, which is located in inside a school, from March 12, 2020 to June 24, 2020.  The licensee further noted that it mistakenly believed the license renewal application was due on July 1, rather than June 1, 2020, and thought it had timely filed a renewal application on June 29, 2020.

To complicate matters further, it turned out the licensee was mistaken in its belief that it had filed on June 29.  According to the licensee, it was not until several months later when it received an inquiry from the FCC’s Media Bureau regarding the failure to file that it discovered the application had been prepared, but not correctly filed, in the FCC’s filing system on June 29.

While the FCC noted the licensee was incorrect in its understanding of the relevant deadline, it did find that the licensee was unable to file by June 1 due to the COVID-19-related school closure.  The FCC also verified in the Commission’s licensing database that the licensee prepared a draft application dated June 29, 2020 that was never filed.  In light of the circumstances, the FCC found that, although the station’s failure to file before the June 1 deadline was due to its inability to access the station, the subsequent failure to file resulted from a misunderstanding of the Commission’s electronic filing procedures.  The FCC emphasized that such inadvertent errors still constitute willful violations of the Commission’s Rules.  Weighing the circumstances, however, the FCC cancelled the $3,000 fine, and admonished the station for failing to comply with the Commission’s rules.

A PDF version of this article can be found at FCC Enforcement ~ April 2021.

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Turns out, some things are simpler than you think.

Few rules in the Code of Federal Regulations have as tortured a history as 47 CFR § 73.3555—the broadcast multiple ownership rules. The subject of court decisions too numerous to count, a brief review of FCC decisions revising (or deciding not to revise) these rules reveals a twisted mass of logic and rationales where parties fiercely argue even as to the very reason for their existence. In the midst of these debates, the regulatory pendulum swings steadily back and forth between ownership deregulation and added regulation as FCC commissioners come and go.

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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:

  • Texas-Based Telemarketers Fined Record $225 Million for Robocall Campaign
  • Georgia AM License Renewal Designated for Hearing Over Extended Periods of Silence
  • Public File Violations Lead to Consent Decree for Arkansas Noncommercial FM Station

FCC Issues Record Fine of $225 Million Against Texas-Based Telemarketers for Illegal Robocalls

The FCC recently issued a $225 million fine, the largest in its history, against a Texas company and its owners for transmitting approximately one billion robocalls, many of which were illegally spoofed.

The Truth in Caller ID Act, codified at Section 227(e) of the Communications Act of 1934, and Section 64.1604 of the FCC’s Rules, prohibits using a caller ID service to “knowingly transmit misleading or inaccurate caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value”—a practice known as “spoofing.”  Additionally, the Telephone Consumer Protection Act (TCPA), and the FCC’s implementing rules, prohibit prerecorded voice messages to wireless telephone numbers absent the subscriber’s express consent unless the call is for an emergency purpose.

In September 2018, a telecommunications industry trade group provided information to the FCC’s Enforcement Bureau regarding millions of robocalls that had been transmitted over its members’ networks.  The trade group estimated that 23.6 million health insurance robocalls crossed the network of the four largest wireless carriers each day and that many, possibly all, of those robocalls contained false caller ID information.  In response, the Bureau began an investigation to determine the origin of the spoofed robocalls.

The FCC found that many of the calls included false or misleading information about the identity of the caller and that the Texas company made the spoofed calls on behalf of its health care industry clients.  The pre-recorded messages at issue claimed to offer health insurance from well-known health insurance providers such as Aetna, Blue Cross Blue Shield, Cigna, and UnitedHealth Group, yet the FCC found no evidence that the company had any connection with these providers.  Part of the FCC’s findings were based upon recorded conversations between the owners, which included numerous discussions of the company’s robocalling operations, from a roughly three-month period when one of the owners was incarcerated for an unrelated matter.

Between January and May 2019, the company made more than one billion robocalls to American and Canadian consumers on behalf of its clients, a portion of which the Enforcement Bureau reviewed and confirmed were spoofed.  The trade group followed up with the company directly multiple times in 2019 to notify the owners that the robocalls appeared to violate prohibitions against unsolicited telemarketing calls and malicious spoofing.  In response, one of the company owners admitted to making millions of robocalls daily and even admitted to making calls to numbers registered to the Do Not Call Registry in an effort to increase sales.  Although the company informed the trade group that it ceased spoofing caller ID information in September 2019, the robocalls continued.

In June 2020, the FCC issued a Notice of Apparent Liability (NAL), proposing a $225 million fine against the company for violating the Communications Act and the FCC’s rules by spoofing caller ID information with the intent to cause harm and wrongfully obtain something of value.  The company responded to the NAL, claiming that: (1) it did not itself initiate any calls because it was acting as a technology consultant for its client’s calling campaigns; (2) it had only a limited role in the robocall campaigns, did not draft the messages, and believed that it had consent and therefore did not intend to defraud, cause harm, or wrongfully obtain anything of value; (3) the NAL impermissibly lumped the owners and the company (and its affiliates) together rather than attributing wrongful conduct to each party; (4) the owners cannot be held personally liable; and (5) the FCC failed to consider the company’s inability to pay and lack of any prior violations.

The FCC considered but was ultimately not persuaded by any of the company’s arguments.  In issuing the $225 million fine, the FCC noted that, among other things, the company did not contest that it spoofed more than 500 million calls and thus knowingly caused the display of inaccurate caller ID information.  While the company argued that it had only a limited role in initiating these calls, as it was acting in accordance with its client’s wishes, the FCC found that, even if the company was acting at a client’s request, it still knowingly agreed to display the inaccurate information.  The FCC also found that the company acted with wrongful intent by executing a telemarketing campaign in which call recipients were deceived by offers of health insurance from well-known providers.  Because the calls were spoofed, consumers could not identify the caller or easily choose to ignore or block the call and therefore the FCC concluded that the company employed spoofing in furtherance of the fraudulent scheme.

With respect to the owners’ personal liability, the FCC’s analysis of the company’s corporate structure and the public policy implications of broadly shielding individuals from liability for evading legal obligations led the FCC to conclude that it was necessary to hold the owners liable for their actions as officers of the company.  The FCC also distinguished this case from past decisions supporting reductions of proposed fines, noting that the decisions cited by the company did not involve spoofing.  Finally, the FCC noted that the company failed to provide the financial information required to support a claim of inability to pay.

The $225 million fine must now be paid within 30 days following release of the Order.  The FCC noted that if it is not paid within that time, the matter may be referred to the U.S. Department of Justice for enforcement.

Extended Periods of Silence Lead to Hearing Designation Order for Georgia AM Station

The Media Bureau has designated for hearing the license renewal application of a Georgia AM station based on the station’s extended periods of silence during the most recent license term.

Under Section 312(g) of the Communications Act of 1934, a station’s license automatically expires if the station “fails to transmit broadcast signals for any consecutive 12-month period.”  Where silent stations resume operations for only a short-period of time before the one-year limit passes, the FCC has cautioned that such stations will face a “very heavy burden in demonstrating that [they have] served the public interest,” noting that extended periods of silence are an inefficient use of the nation’s limited broadcast spectrum.

Section 309(k)(1) of the Communications Act provides that in determining whether to grant a license renewal application, the FCC must consider whether, in the previous license term, the licensee: (1) served the public interest; (2) has not committed any serious violations of the Act or of the FCC’s rules; and (3) has not committed other violations that, taken together, would constitute a pattern of abuse.  If the licensee falls short of this standard, the FCC can either grant the renewal application with conditions, including an abbreviated license term, or deny it after a hearing to more closely examine the station’s performance. Continue reading →

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Bringing to a close the process initiated with the adoption of the Secure and Trusted Communications Act of 2019, the FCC’s Public Safety and Homeland Security Bureau released its list of communications equipment and services that it has deemed to pose an unacceptable risk to U.S. national security. U.S.-based service providers are prohibited from receiving federal subsidies for purchasing the listed communications equipment or services (Covered List), and service providers will be given an opportunity to receive federal funds to subsidize the removal and replacement of the communications equipment and services included on the Covered List.

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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:

  • Imprisoned Former Alabama House Speaker’s Felony Convictions Lead to FCC Hearing on Character Issues
  • California Retirement Home Receives Notice of Violation Over Signal Booster Interference
  • Georgia LPFM Station Hit with $10,000 Penalty for Underwriting Violations

Imprisoned Former Alabama House Speaker’s Felony Convictions Raise Questions About FCC Qualifications

The FCC has designated for hearing the question of whether an Alabama radio broadcaster remains qualified to hold Commission licenses.  The licensee’s president and sole shareholder was convicted of six felony charges involving conduct during his time as Speaker of the Alabama House of Representatives.

Section 309 of the Communications Act of 1934 requires the FCC to designate an application for hearing before an Administrative Law Judge (ALJ) if a “substantial and material question of fact is presented” as to whether grant of an application would serve the public interest, convenience, and necessity.

The character of an applicant is one of several factors examined by the FCC in determining whether a party has the requisite qualifications to become or remain a Commission licensee.  Moreover, an FCC policy (referred to as the Jefferson Radio policy, after a 1964 case) generally prohibits the FCC from granting assignment applications where character questions have been raised regarding the seller.  The theory behind this policy is that a party unqualified to hold an FCC license should not be allowed to profit by selling it.

After a June 2016 trial and multiple appeals, the Alabama Supreme Court upheld six felony convictions against the former Speaker for: (1) soliciting or receiving something of value from a principal; (2) using an official position for personal gain; and (3) representing a business entity before an executive department or agency in exchange for compensation.  Following the court’s decision, and facing a potential four-year prison sentence, the licensee filed an application in September 2020 for consent to assign its FCC authorizations, including AM and FM station licenses, three FM translator licenses, and a construction permit for a new FM translator station.

Prior to filing the assignment application, the licensee had also filed applications for renewal of the AM, FM, and translator station licenses.  In these applications, the licensee disclosed the status of the legal proceedings against the former Speaker.  The FCC considers a felony conviction or misconduct constituting a felony as relevant to its character assessment and ultimately to its determination of whether to grant an application.  The FCC concluded that the former Speaker’s six felony convictions and the actions behind them established a substantial and material question of fact as to whether the licensee, by virtue of the former Speaker’s position as president and sole shareholder, possesses the requisite qualities to hold a Commission license.  As a result, the FCC designated for hearing the questions of whether (1) the licensee has the character to remain a Commission licensee; (2) the licensee’s authorizations should be revoked altogether; and (3) the pending construction permit application should be granted, denied, or dismissed.

Regarding the assignment application, the licensee requested that the FCC apply an exception to its Jefferson Radio policy and grant the application despite the pending character qualification issues.  While the FCC has in limited circumstances found an exception to be warranted, the Commission has generally applied the policy to deter stations from committing violations and then simply selling their assets when faced with potential disqualification.  The FCC found that in the present case, numerous factors weighed against an exception, including the fact that the market is not underserved, as listeners have access to several other broadcast stations, and the lack of any physical or mental disability or other circumstance that would prevent the licensee from fully participating in the hearing.

In light of the pending character concerns, the FCC temporarily set aside consideration of the license renewal and assignment applications until such time as the character questions can be resolved through an administrative hearing before an ALJ.

FCC Investigates California Retirement Community Over Unauthorized Operation of Signal Booster Devices

The FCC’s Enforcement Bureau issued a Notice of Violation to a Bay Area retirement community for interference complaints related to its Private Land Mobile Radio (PLMR) operations.

PLMR operations are wireless communications systems used by many local governments and private companies to meet a variety of organizational communications needs.  These systems have been used to support everything from public safety and utilities to manufacturing and certain internal business communications, and often operate on shared frequencies with other PLMR licensees. Continue reading →

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The deadline to file the 2020 Annual Children’s Television Programming Report with the FCC is January 30, 2021, reflecting programming aired during the 2020 calendar year.  Note that because this deadline falls on a weekend, submissions may be made on February 1, 2021.  In addition, commercial stations’ documentation of their compliance with the commercial limits in children’s programming during the 2020 calendar year must be placed in their Public Inspection File by January 30, 2021.  


The Children’s Television Act of 1990 requires full power and Class A television stations to: (1) limit the amount of commercial matter aired during programs originally produced and broadcast for an audience of children 12 years of age and under, and (2) air programming responsive to the educational and informational needs of children 16 years of age and under.  In addition, stations must comply with paperwork requirements related to these obligations.

On July 12, 2019, the FCC adopted a number of changes to its children’s television programming rules.  Substantively, the new rules provide broadcasters with additional flexibility in scheduling educational children’s television programming, and modify some aspects of the definition of “core” educational children’s television programming.  Those portions of the revisions went into effect on September 16, 2019.  Procedurally, the new rules eliminated quarterly filing of the commercial limits certifications and the Children’s Television Programming Report in favor of annual filings.  These revisions went into effect on January 21, 2020.

The differing effective dates of various aspects of the new rules resulted in a confusing situation in 2020 where stations had to file quarterly documentation of commercial limits compliance for the Fourth Quarter of 2019, but an Annual Children’s Television Programming Report that only covered a small portion of the preceding year.  As a result, the Children’s Television Programming Report and commercial limits documentation filed this year will be the first to reflect an entire calendar year of operation under the new rules. Continue reading →

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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:

  • Idaho Man Behind Racist Robocall Campaigns Fined $9.9 Million for Thousands of Illegally Spoofed Robocalls
  • FCC Affirms $233,000 Fine Against Large Radio Group for Sponsorship ID Violations
  • FCC Proposes a Combined $47 Million in Fines Against EBS Licensees for Failure to Meet Now-Defunct Educational Requirements

Scammer Hit With $9.9 Million Fine for Thousands of Illegally Spoofed Calls
The FCC recently issued a $9.9 million fine against an Idaho man behind a controversial media company linked to various racist and anti-Semitic robocall campaigns across the country.  The man caused thousands of robocalls to display misleading or inaccurate caller ID information—a practice known as “spoofing.”

The Truth in Caller ID Act, codified at Section 227(e) of the Communications Act and Section 64.1604 of the FCC’s Rules, prohibits the use of a caller ID service to transmit or display misleading caller ID information with the intent to knowingly cause harm or wrongfully obtain something of value.

During the summer and fall of 2018, individuals across the country received thousands of robocalls targeting several contested political campaigns and controversial local news events.  In August 2018, for example, Iowa residents received 837 prerecorded messages referring to the arrest of an undocumented immigrant from Mexico charged with the murder of a University of Iowa student.  More than 1,000 residents in Georgia and Florida received calls making racist attacks against the gubernatorial candidates running in those states.  In response to complaints received about the robocalls, the FCC traced 6,455 spoofed calls to the Idaho man and his media company after identifying the dialing platform he used to make the calls.  By matching the platform’s call records with news coverage of the calling campaigns, the Enforcement Bureau identified six specific robocall campaigns in California, Florida, Georgia, Iowa, Idaho and Virginia.  Using the platform, the man selected phone numbers that matched the locality of the call recipients to falsely suggest that the calls were local.

In January 2020, the FCC issued a Notice of Apparent Liability (NAL), proposing a $12.9 million fine against the man for violating the Communications Act and the FCC’s Rules by spoofing caller ID information with the intent to cause harm or wrongfully obtain something of value.  In response, the man called for cancellation of the NAL, claiming that: (1) the FCC failed to establish the identity of the caller and prove that the caller was the same person that caused the display of inaccurate caller ID information; (2) some of the caller IDs used were either assigned to him or were non-working numbers and therefore there was no intent to cause harm; (3) the spoofing of unassigned numbers and content of the messages themselves were forms of political speech protected by the First Amendment; (4) the FCC could not verify that each of the 6,455 calls contained the pre-recorded messages at issue; (5) the NAL failed to establish any intent to cause harm to the call recipients; (6) the “wrongfully obtain something of value” factor should only apply to criminal wrongdoing or telemarketing; and (7) the FCC failed to issue a citation before adopting the NAL in accordance with its rules.

The FCC considered and rejected most of these arguments.  In reviewing the dialing platform’s records, the Commission verified that the calls originated from his account and that there was no evidence to support his claim that someone else had selected the call numbers.  Further, although he denied involvement in selecting the caller ID numbers, the man noted that several of the numbers contained patterns that signify neo-Nazi ideology, which the FCC used to support its finding that the Idaho man knowingly chose the numbers at issue.  And despite what the man referred to as the “well established” and “recognized” meanings behind the numbers, the FCC concluded that the use of such numbers did not constitute protected speech because it was not clear the meaning was understood by the call recipients as required by the First Amendment.

The FCC also addressed how it verified the spoofed calls, noting that it relied on the same methodology used in prior spoofing enforcement actions where a sample of all calls made were reviewed, identical statements were confirmed in the recordings, and wrongful intent was identified.  Regarding the argument  that enforcement should only apply to criminal conduct or telemarketing, the FCC concluded that the use of local numbers to deceive call recipients demonstrated the man’s intent to cause harm and wrongfully obtain something of value in the form of avoiding liability and promoting his personal brand.

Finally, the FCC noted that neither the Truth in Caller ID Act nor the Commission’s rules require issuance of a citation prior to an NAL.

The Idaho man did, however, successfully demonstrate that one of the caller ID numbers displayed was not spoofed.  The FCC found that a May 2018 robocall campaign targeting California residents displayed a contact number that was assigned to the man and was therefore not spoofed.  As a result, the FCC affirmed its original fine but reduced it by $2.9 million to account for the calls that were not spoofed.  The $9.9 million fine must now be paid within 30 calendar days after release of the Order.

FCC Affirms $233,000 Fine Against Large Radio Group for Sponsorship ID Violations

The FCC issued a $233,000 fine against a national radio group for violating the Commission’s Sponsorship Identification rule and the terms of a 2016 Consent Decree by failing to timely notify the FCC of the violations.

Under the Communications Act and the FCC’s rules, broadcast stations must identify on-air any sponsored content, as well as the name of the sponsoring entity, whenever “money, service, or other valuable consideration” is paid or promised to the station for the broadcast.  According to the FCC, identifying sponsors ensures that listeners know who is trying to persuade them, and prevents misleading information from being conveyed without attribution of the source. Continue reading →

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Today, the deadline was established for filing comments in response to a Notice of Proposed Rulemaking (NPRM) pertaining to the marketing, sale and importation of radiofrequency (RF) devices that have not yet obtained equipment authorization.  Specifically, the NPRM proposes to allow manufacturers to make conditional sales of pre-authorization devices directly to consumers, and would also permit the importation of a limited number of pre-authorization RF devices for new types of pre-sale activities.  Last month, the FCC unanimously voted to approve the NPRM in response to a Petition for Rulemaking filed by the Consumer Technology Association (CTA).

Section 302 of the Communications Act empowers the FCC to create rules governing the interference potential of devices capable of emitting radio frequency energy and which can cause harm to consumers or other radio communications.  This authority covers multitudes of everyday consumer objects, from toaster ovens to the most advanced mobile communication devices. To keep pace with the speed of innovation and consumer demand, the FCC regularly updates its equipment authorization rules for such devices.  In its petition, CTA argued that the FCC’s existing rules act as a “speed bump” in the race to develop and deploy new products and do not reflect the current direct-to-consumer online marketplace. Continue reading →