Articles Posted in RF Devices

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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 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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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 →