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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Simultaneously with issuing a nearly $3,000,000 fine to HobbyKing for marketing unauthorized (and in some cases not capable of being authorized) audio/video (“AV”) transmitters for use with drone mounted cameras, the Federal Communications Commission’s (“FCC’s” or “Commission’s”) Enforcement Bureau issued an Advisory Tuesday reminding retailer manufacturers, and operators of their obligations:  no marketing or operation of unauthorized equipment except under very limited exceptions.

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On May 30, 2018, the Commission issued a Notice of Apparent Liability (“NAL”) proposing a total penalty of $590,380 against a company for marketing noncompliant radio frequency (“RF”) devices in apparent violation of the agency’s equipment marketing rules.  The allegations in the NAL provide a textbook example of how a company that becomes aware of a violation relating to products subject to the Commission equipment authorization procedures should not respond.  The NAL was issued against Bear Down Brands, LLC, dba Pure Enrichment (“Pure Enrichment”), a Delaware company, in connection with fourteen models of the company’s consumer-oriented electronic personal hygiene and wellness devices it markets and imports, all of which were Part 15 or Part 18 unintentional radiators.  The NAL alleges that the devices were noncompliant because they lacked proper equipment authorization, failed to make required user manual disclosures, and/or did not have compliant FCC labels.

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Continuing its assault on unlicensed broadcast operations, the Federal Communications Commission (“FCC”) issued a unanimous Notice of Apparent Liability for Forfeiture (“NAL”) at its September meeting proposing the statutory maximum fine of $144,344 against a pirate radio operator as well as the owners of the property housing the unlicensed station.  The action represents the first time the FCC has found landowners apparently liable for pirate radio operations on their property and the first Commission-level NAL issued against a pirate radio operation.  Imposing penalties on property owners that support pirate operations has been a longstanding goal for Commissioner O’Rielly, and Chairman Pai signaled that cracking down on pirate stations remains a key enforcement priority for the FCC.

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The FCC’s Enforcement Bureau will no longer have the power to settle monetary enforcement actions originally issued by the Commission under a process reform announced by Chairman Pai on Wednesday.  Settlements of forfeitures proposed or imposed by the Commission will now be subject to a full Commission vote, as was the NAL that initiated the action.  The announcement clarified previously unsettled issues regarding the Enforcement Bureau’s delegated authority, which Chairman Pai said resulted in major settlements with little to no Commissioner input.

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Today the Federal Communications Commission’s (FCC’s) Enforcement Bureau (Bureau) issued a pair of closely-related enforcement actions against two radio station licensees for failing to comply with the FCC’s radiofrequency (RF) exposure limits.  T-Mobile received a $60,000 Notice of Apparent Liability and Wirelessco received a $25,000 Notice of Apparent Liability (NALs) for apparent inadequate protections to prevent public access to antennas co-located on the same office building rooftop in Phoenix, Arizona.  These actions underscore the importance of radio station operators ensuring that appropriate barriers and signage designed to limit access are in place and regularly maintained.

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US Capitol BuildingMembers of the House Subcommittee on Communications and Technology (Committee) issued a letter late last week requesting that the Government Accountability Office (GAO) conduct an audit of the FCC’s Enforcement Bureau (Bureau).  The audit would focus exclusively on the Bureau and address its backlog of consumer complaints, its output and performance metrics and recent management decisions.   Among the primary concerns for the Committee is the Bureau’s continued use of the number and monetary value of enforcement actions as the metrics to determine the success of its enforcement efforts.

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On October 3rd, the FCC announced a settlement with Marriott International, Inc. and Marriott Hotel Services, Inc. to resolve an investigation into the hotel operator’s use of a Wi-Fi monitoring and blocking system.  In the investigation, the Commission concluded that an operator cannot use such a system to prevent users from connecting to the Internet via their own personal Wi-Fi networks, rather than being limited to the hotel’s own Wi-Fi network, when these users did not pose a threat to the security of the hotel operator or its guests.  This consent decree reminds hotel operators and property owners, as well as other property owners that, while they may control the deployment of fixed radio stations on their property, they may not interfere with communications, including Internet wireless access, that occur on their property using mobile devices.  As part of the consent decree, the hotel operator agreed to pay $600,000 in “civil penalties” and to implement an extensive three-year compliance plan, with quarterly reporting, focusing on the hotel operator’s access point containment features at all of its U.S. properties, including properties owned and/or operated by the company.
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On September 16, the Federal Communications Commission issued a Notice of Apparent Liability (“NAL”) against PTT Phone Cards, Inc., (“PTT”) for a litany of alleged violations of rules applicable to international telecommunications carriers in general and one applicable to pre-paid calling card providers in particular. In short, the NAL alleges that, for over three years, PTT violated “virtually all of [the] regulatory obligations” applicable to international carriers and one specifically applicable to pre-paid calling card providers. The proposed forfeiture of $493,327 was arrived at through a straightforward application of the Commission’s base forfeiture amounts or penalties that the agency has recently applied for similar violations. While the Commission normally considers mitigating and aggravating factors to adjust penalties downward or upward, in the NAL it did not expressly do so, despite what it called “PTT’s apparent pattern of noncompliance” and “the seriousness, duration, and scope of PTT’s apparent violations.”  Instead, it simply proposed standard penalties for each apparent violation, giving a casebook glimpse into what awaits entities that provide international and/or calling card services without first obtaining necessary FCC authority and without making requisite filings with the Commission, contributions into applicable federal funds, and payments of federal regulatory fees.
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A recent Enforcement Bureau (“EB”) Order and Consent Decree highlights the perils that attend failure to get FCC approvals to transfer or assign wireless licenses. The March 13, 2014, release, involving Skybeam Acquisition Corporation and Digis, LLC, commonly-owned affiliates providing fixed wireless broadband service and VoIP, also confirmed, once again, that voluntary disclosure does not necessarily count for much once violations are referred to the EB for investigation.  The two companies discovered their failure in the context of a subsequent transaction, retained counsel, and self-reported.  While the situation was put back on track from a licensing perspective, through requests and grants of special temporary authority followed by curative assignment applications granted by the Wireless Telecommunications Bureau (“WTB”), the EB’s subsequent investigation led to a $50,000 voluntary contribution and a burdensome three-year compliance plan.

In mid-2012, the two companies, subsidiaries of JAB Wireless, Inc., which claims to be the largest fixed wireless broadband provider, acquired microwave licenses from third parties.  Skybeam acquired ten licenses from KeyOn Communications, and Digis acquired forty licenses from HJ LLC. The parties proceeded without communications’ counsel and failed to seek approval from the FCC for the assignments.  Once they realized in early 2013 that they had failed to obtain approval for the acquisitions, they proceeded to remedy the situation after the fact and voluntarily disclosed the earlier failure, attributing it to inadvertence, lack of experience in such matters, and not having counsel.  While the Consent Decree states the two companies will pay a combined voluntary contribution of $50,000, there is no indication whether this number reflects the unlawful assignment of 50 licenses or the failure to obtain authority for two transactions, each involving multiple licenses.  The entities selling the licenses are not the subject of the enforcement action.
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