After multiple enforcement actions totaling hundreds of thousands of dollars in penalties against importers and retailers of LED signs last year, it appears that the message has not been fully received. To the contrary, the FCC is back at it in enforcing its equipment marketing rules against importers and retailers of LED signs in 2019. In a recent Enforcement Advisory, the FCC again warned companies marketing noncompliant LED displays that they may be subject to costly investigations and significant monetary penalties. As we previously reported, these warnings should put all importers and retailers of LED signs – many of whom may not know FCC rules apply to them – on notice that their products should be authorized, properly labeled, and contain the required user disclosures before being marketed in the United States. The FCC often uses Enforcement Advisories to set the stage for future enforcement action and the agency appears poised to move forward with another wave of enforcement actions in the coming months. It is therefore critical that companies assess their equipment marketing compliance procedures now to avoid Commission enforcement later.

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On February 4, 2019, the FCC announced a plan to create a new division housed in its Enforcement Bureau, dedicated to prosecuting fraud in the agency’s Universal Service Fund (“USF”) programs. Citing to recent USF-related proposed fines and voluntary settlements, the FCC asserted that the creation of a specialized Fraud Division was necessary to combat misuse of funds under the High Cost, E-Rate, Lifeline, and Rural Health Care programs that make up the USF. The FCC’s brief, two-page Order leaves many questions unanswered about the proposed Fraud Division’s ambit and the status of the “USF Strike Force” that preceded it. However, the Order signifies that the FCC plans to redouble its fraud enforcement efforts in 2019 following recent setbacks on the USF rulemaking front. As a result, eligible telecommunications carriers and other recipients of USF support should keep a close watch as the scope and function of the new Fraud Division starts to take shape.
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On January 30, 2019, Geoffrey Starks was sworn in as the newest FCC Commissioner, restoring the agency to its full complement of five Commissioners for the first time since the summer. In announcing his swearing in, Commissioner Starks stated he intends to focus on strong FCC enforcement “protecting the most vulnerable and holding wrongdoers accountable.” He added that he will “serve the public interest by encouraging innovation, competition, and security, as well as advancing policies to increase the quality, availability, and affordability of our country’s communications services.” Commissioner Starks joins Commissioner Rosenworcel as one of the two Democratic Commissioners at the FCC. He fills the seat vacated by former Commissioner Mignon Clyburn, who left in June 2018 after nearly nine years at the FCC, including a stint as acting Chairwoman in 2013. Commissioner Starks will complete Ms. Clyburn’s five-year term, which expires at the end of June 2022. Although Commissioner Starks’ swearing in is not expected to result in any immediate FCC policy shifts, his addition provides a strong voice in favor of Open Internet regulation, Universal Service Fund reform, and enforcement.
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In this edition of Full Spectrum’s recurring series on FCC enforcement, Partner Steve Augustino and Associate Brad Currier highlight some of the major developments in FCC enforcement in 2018 and discuss potential next steps in the year ahead.

Part one of this episode focuses on the big picture in 2018 and the FCC’s use of

In this edition of Full Spectrum’s recurring series on FCC enforcement, Partner Steve Augustino and Associate Brad Currier address the legal dangers facing entities that may be unfamiliar with telecommunications regulation. Steve and Brad focus on a multi-million dollar DOJ fraud prosecution involving the E-rate fund and a settlement of inadvertent transfers of FCC licenses

On August 28, 2018, the FCC’s Enforcement Bureau announced a Consent Decree with Marriott International, Inc. (“Marriott”) to resolve an investigation into unauthorized transfers of wireless radio licenses in connection with Marriott’s acquisition of Starwood Hotels & Resorts Worldwide Inc. (“Starwood”). The civil payment levied against Marriott and the other conditions set forth in the Consent Decree serve as a reminder to companies that may not normally be subject to the FCC’s jurisdiction to thoroughly review the regulatory implications of mergers, acquisitions, or other corporate transactions as part of any due diligence conducted before a deal is reached.

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The FCC recently reached a $5.25 million settlement with AT&T to resolve investigations into two 911 service outages that resulted in thousands of failed emergency calls. This edition of Full Spectrum’s series on FCC enforcement discusses the unexpected settlement and its implications on carrier network practices and the FCC’s enforcement priorities. Partner Steve Augustino and

As we enter the dog days of summer, the FCC continues to turn up the heat on equipment marketing enforcement. But while million dollar fines for marketing noncompliant devices capture the spotlight, the FCC also quietly issued a number of equipment marketing actions focused on a single type of device: LED signs. In just the last three months, the FCC has settled over ten investigations involving the marketing of LED signs used in digital billboards for commercial and industrial applications without the required authorizations, labeling, or user manual disclosures. Each action involved an entity that either manufactured or sold (or both) LED signs. The agency’s recent actions should be a shot across the bow to any retailer of LED signs to ensure that their devices are properly tested and authorized prior to sale. Otherwise, these companies may face significant fines and warehouses of unmarketable devices.

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On June 28, 2018, the FCC’s Enforcement Bureau announced a Consent Decree with AT&T Mobility, LLC (“AT&T”) to resolve investigations into two 911 service outages in 2017. The outages lasted for more than five hours and resulted in approximately 15,000 failed calls. The settlement was somewhat unexpected because more than a year had passed since the FCC issued its report on the outages, which did not indicate that enforcement action was coming. The penalty levied against AT&T underscores that improving the nation’s 911 capabilities continues to be a top priority for the FCC and that outages will be met with significant fines.

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On June 5, 2018, the Federal Communications Commission’s (“FCC’s” or the “Commission’s”) Enforcement Bureau (“Bureau”) issued a Notice of Apparent Liability against a manufacturer and retailer for marketing non-compliant RF devices, a dozen models of which were capable of operating in restricted spectrum bands.  The FCC proposes to assess a total fine of $2,861,128.00 against ABC Fulfillment Services LLC and Indubitably, Inc. (collectively, “HobbyKing”) for equipment authorization rule violations involving 65 models of recreational audio/video transmitters (“AV Transmitters”) used with model airplanes drones.  But more than $2.2 million of that resulted from the fact that twelve models apparently operates in restricted radio bands and three at higher powers than authorized in other bands. The restricted bands are those in which unlicensed transmitters are not allowed to operate because of potential interference to sensitive radio communications.  In the case of HobbyKing’s  the Commission found that its AV transmitters operated in bands where important government and public safety operations, such as those of the Federal Aviation Administration managing commercial and passenger flight traffic, doppler weather radar, flight testing, and other activities the FCC has determined are particularly worthy of heightened interference protection take place.  In other words, the moral is that marketing devices that do not have proper equipment authorization is bad, but doing so when the devices operate within restricted bands is quite simply “egregious,” as the NAL put it.

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