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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In the largest forfeiture ever imposed by the agency, the Federal Communications Commission (FCC) issued a $120 million fine against Adrian Abramovich and the companies he controlled for placing over 96 million “spoofed” robocalls as part of a campaign to sell third-party vacation packages.  The case has received significant attention as an example of the growing issue of spoofed robocalls, with lawmakers recently grilling Mr. Abramovich about his operations.  The item took the lead spot at the agency’s May meeting and is emblematic of the Pai FCC’s continued focus on illegal robocalls as a top enforcement priority.  While questions remain regarding the FCC’s ability to collect the unprecedented fine, there is no question that the FCC and Congress intend to take a hard look at robocalling issues this year, with significant reforms already teed up for consideration.

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As part of its August 2017 Open Meeting, the Federal Communications Commission (“FCC”) issued a Notice of Apparent Liability for Forfeiture (“NAL”) proposing over $82 million in fines against Philip Roesel and the insurance companies he operated for allegedly violating the Truth in Caller Act by altering the caller ID information (a/k/a “spoofing”) of more than 21 million robocalls in order to generate sales leads and avoid detection by authorities.  The FCC separately issued a Citation against Mr. Roesel and his companies for allegedly violating the Telephone Consumer Protection Act by transmitting the robocalls to emergency, wireless, and residential phone lines without consent.  The NAL and Citation represent just the latest salvos in the FCC’s continuing assault on robocalling in general and deceptive uses of spoofing in particular.  With $200 million in proposed fines in only two cases, it is clear that such issues will remain an enforcement priority under Chairman Pai.

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CashIn the first action of its kind, on June 7, 2017, the Federal Communications Commission (“FCC”) issued an amendment to a Notice of Apparent Liability for Forfeiture and Order (“NAL”), for alleged violations of the rules governing the Universal Service Rural Health Care Program (“RHCP”). The FCC found that the fine proposed in the initial NAL was not based on the correct violations and included violations beyond the agency’s one-year statute of limitations.  However, by changing the type of conduct found to violate the RHCP rules and increasing the proposed fine, the FCC’s amendment presents its own statute of limitations concerns and raises questions about the use of amendments in enforcement actions.  The amendment also is the first foray by Chairman Pai into Universal Service enforcement matters since he assumed the chairmanship in January of this year.

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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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Last week, the FCC issued two Notices of Apparent Liability (“NALs”) against persons identified through various investigative techniques which the Commission concluded were operating unauthorized broadcast stations. Taken together, the cases illustrate, if not altogether clearly, how the Commission may increase forfeitures above the base amount as a result of aggravating circumstances. 

In the first case, Enforcement Bureau agents utilizing direction-findings techniques following a complaint – the nature of which is undisclosed in the NAL – found the location of an unauthorized station operating in Manhattan, Kansas. They determined the station signal exceeded the limits for operation under Part 15 of the Commission’s rules (general unlicensed operations) and therefore required a license. No license had been issued to any person at that location on the FM frequency being used. The following day, FCC agents confirmed the operation was continuing and visited the site. Further investigation led them to conclude that the equipment, located in a detached garage that was being rented, was owned and operated by a Glen RabashSpecifically, in subsequent communications with the FCC by telephone, Mr. Rabash acknowledged he was an amateur radio operator (which the FCC used to conclude he knew the broadcast operation was illegal) and that he would not surrender the equipment if asked to do so (which the FCC factored in to conclude that he had control over the equipment). Based in large part on this evidence of both repeated and willful violation, the FCC proposed the base amount forfeiture of $10,000 for unauthorized operation of a radio station. (Note that this is the base amount for unauthorized operation of any station of any type that requires an FCC authorization. The fact that the violation occurred on a broadcast frequency does not change the base amount.)

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