CI Docket No. 95-6
the Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines
January 13, 1995
February 10, 1995
March 27, 1995
Reply Comment Date:
April 17, 1995
By the Commission:
2. The proposed forfeiture guidelines are identical to
the 1993 version appended to the Forfeiture Policy Statement
and are attached as Appendix A. If adopted, we would be
guided by these guidelines, but remain free to exercise
discretion in specific cases. See Guardian Federal Savings
& Loan Ass'n v. Federal Savings and Loan Insurance Co.,
589 F. 2d 658 (D.C. Cir. 1978).
3. The benefits of our adopting such a schedule would
include comparable treatment of similarly situated offenders
and clearer guidance to the public regarding the forfeitures
that can be expected in response to specific violations.
Adopting such standards also would increase our administrative
efficiency in determining the appropriate range of forfeitures
for various offenses, is consistent with a recommendation
of the Administrative Conference of the United States
(ACUS), and is similar to approaches adopted by certain
other regulatory agencies.(n1) However, it is possible that,
notwithstanding the adjustment factors provided for in
the guidelines and the flexibility the Commission retains
in determining the amount of a fine in any particular case,
different categories of licensees may be impacted disproportionately
under a guidance-based system.
4. We request comment on all aspects of the proposal,
including on the advantages and disadvantages of adopting
forfeiture guidelines instead of proceeding on our traditional
case-by-case basis. We ask commenters to address whether
licensees are benefitted or disadvantaged by the guideline
system, and more generally, whether the benefits of the
guideline system outweigh any perceived detriments. With
respect to the guidelines themselves, we ask whether the
base forfeiture amounts set forth in the guidelines are
set at appropriate levels, or whether some may be set either
too high or too low based on the nature of the violation.
We request comment on the use of different base forfeiture
amounts for similar violations in different services in
light of the different maximum forfeiture amounts for the
different services set forth in the statute. See 47 U.S.C.
§§ 503(b)(2)(A)-(C). Commenters who disagree with this
approach should propose alternative approaches and explain
how their proposals would reflect the distinctions among
services in the statute for purposes of maximum forfeiture
amounts. For example, if the base forfeiture amounts for
all services were set at the same level, should the Commission
adopt different ranges for the adjustment factors to reflect
the different statutory maxima? As an alternative, should
the Commission eliminate the ranges for the adjustment
factors? We, thus, ask for comments on the proposed base
amounts, adjustment factors, and adjustment factor ranges.
5. In concluding that we may not implement the Forfeiture
Policy Statement and guidelines without notice and comment,
the Court did not question our authority to adopt the Forfeiture
Policy Statement to provide general guidance that does
not bind the Commission or its staff. Thus, we propose
to incorporate the guidelines as anote to our forfeiture
rule (47 C.F.R. § 1.80) and to clarify that the guidelines
set forth general guidance that the Commission and the
staff may choose to apply in appropriate cases. We continue
to believe that, ultimately, every decision must be based
on the specific facts and equities at issue, taking into
account the factors set forth in Section 503(b)(2)(D) of
the Act, 47 U.S.C. § 503(b)(2)(D). Thus, under the Policy
Statement the Commission would retain discretion to depart
from the guidelines in appropriate circumstances. In this
regard, we stress that the adjustment factors set forth
in the guidelines, which track Section 503(b)(2)(D) closely,
are not intended to be exclusive adjustment factors. Similarly,
it is not our intent that the guidelines be read to require
that a forfeiture be issued in any particular case. The
Commission would retain discretion not to issue a forfeiture
in particular circumstances. We ask for comment on this
proposal and whether, in the alternative, we should adopt
the guidelines as a binding rule.
6. If retained, we propose to apply the Forfeiture Policy
Statement and guidelines to all forfeiture proceedings
begun after the effective date of the Forfeiture Policy
Statement and guidelines. For forfeiture proceedings begun
but not completed before the effective date, we propose
to reach decisions on a case-by-case basis as we have been
doing since issuance of the USTA decision. We ask for
comment on this approach and whether, if the Forfeiture
Policy Statement and guidelines are adopted, they should
be applied to all cases pending as of the time of their
7. Our goal in this proceeding is to carefully examine
all issues related to the imposition of forfeitures based
on a system of guidelines. We ask interested parties for
their views and suggestions on any matters germane to resolving
9. Ex Parte Rules - Non-Restricted Proceeding:
This is a non-restricted notice and comment rule making
proceeding. Members of the public are advised that ex
parte presentations are permitted except during the Sunshine
Agenda period. See generally 47 C.F.R. §§ 1.1202, 1.1203,
11. Objectives: The Commission is seeking information
regarding the guidelines to be used in implementing its
authority to issue increased monetary forfeiture penalties.
12. Legal Basis: The proposed action is authorized under
the authority contained in Sections 4(i), 303(r), and 503(b)
of the Communications Act of 1934, 47 U.S.C. §§ 154(i),
13. Reporting, Recordkeeping and Other Compliance Requirements:
14. Federal Rules Which Overlap, Duplicate or Conflict
With These Rules: None.
15. Description, Potential Impact, and Number of Small
Entities Involved: Adoption of this Policy Statement could
affect all licensees, including those that qualify as small
business entities, who receive a monetary forfeiture as
a result of a violation of the Communications Act or of
the Commission's Rules. Non-licensees may also be liable
for a monetary forfeiture if violations are repeated and
they have previously received a warning or citation.
16. Any Significant Alternatives Minimizing the Impact
on Small Entities Consistent with the Stated Objectives:
The Notice solicits comments on better ways to accomplish
the goals of developing guidelines for determining forfeiture
amounts and providing notice to the public about the range
of forfeiture amounts that may be assessed in particular
cases. We are unable to assess at this time what, if any,
economic impact the proposed rule change would have on
small business entities. A full assessment of the potential
economic impact, as required by Section 605(b) of the Regulatory
Flexibility Act of 1980 (Pub. L. 96-354, 5 U.S.C. § 605(b))
will be made, if applicable, at the final rulemaking stage.
FEDERAL COMMUNICATIONS COMMISSION
William F. Caton
1. The authority citation for Part 1 continues to read
AUTHORITY: 47 U.S.C. 154, 303, 503(b)(5); 5 U.S.C. 552;
21 U.S.C. 853a, unless otherwise noted.
2. Section 1.80 is amended by adding a note to read as
§1.80 Forfeiture proceedings.
* * * * *
(b) * * *
(4) * * *
I. BASE AMOUNTS FOR SECTION 503 FORFEITURES
Misrepresentation/lack of 80% 20,000 80,000 8,000
Construction and/or operation 80% 20,000 80,000 8,000
without an instrument of
authorization for the service
Unauthorized substantial 80% 20,000 80,000 8,000
transfer of control
% of BC/CABLE CC OTHER
VIOLATION Stat. Max. $25,000 $100,000 $10,000
Violations of rules relating to 80% 20,000 80,000 8,000
distress & safety frequencies
False distress communications 80% 20,000 80,000 8,000
Alien ownership violation 80% 20,000 80,000 8,000
Failure to permit inspection 75% 18,750 75,000 7,500
Violation of operator 75% n.a. 75,000 7,500
Violation of pay-per-call 75% n.a. 75,000 7,500
Unauthorized conversion of long 75% n.a. 75,000 n.a.
distance telephone service
Malicious interference 70% 17,500 70,000 7,000
Importation or marketing of 70% n.a. 70,000 7,000
Exceeding authorized antenna 60% 15,000 60,000 6,000
Transmission of indecent/ 50% 12,500 n.a. 5,000
Violation of political rules: 50% 12,500 n.a. n.a.
reasonable access, lowest unit
charge, equal opportunities
Fraud by wire, radio or 50% 12,500 50,000 5,000
Exceeding power limits 40% 10,000 40,000 4,000
No licensed operator on duty 40% 10,000 n.a. 4,000
% of BC/CABLE CC OTHER
VIOLATION Stat. Max. $25,000 $100,000 $10,000
Failure to maintain directional 40% 10,000 n.a. n.a.
pattern within prescribed
Failure to respond to 40% 10,000 40,000 4,000
Unauthorized emissions 40% 10,000 40,000 4,000
Using unauthorized frequency 40% 10,000 40,000 4,000
EBS equipment not installed 40% 10,000 n.a. n.a.
Violation of children's 40% 10,000 n.a. n.a.
or programming requirements
Violation of main studio rule 40% 10,000 n.a. n.a.
Violation of broadcast hoax 40% 10,000 n.a. n.a.
Failure to engage in required 40% 10,000 40,000 4,000
AM tower fencing 40% 10,000 n.a. n.a.
Failure to comply with varies 8,000 8,000 8,000
prescribed lighting & marking
Violation of public file rules 20% 5,000 20,000 n.a.
Unauthorized discontinuance 20% 5,000 20,000 2,000
Use of unauthorized equipment 20% 5,000 20,000 2,000
Construction or operation at 20% 5,000 20,000 2,000
% of BC/CABLE CC OTHER
VIOLATION Stat. Max $25,000 $100,000 $10,000
Violation of transmitter 20% 5,000 20,000 2,000
control and metering
Failure to file required 20% 5,000 20,000 2,000
forms or information
Violation of sponsorship ID 20% 5,000 n.a. n.a
Violation of requirements 20% 5,000 n.a. n.a
pertaining to broadcasting of
lotteries or contests
Broadcasting telephone 20% 5,000 n.a. n.a.
conversations without authorization
Failure to make required 10% 2,500 10,000 1,000
measurements or conduct
Violation of enhanced 10% 2,500 n.a. n.a.
Failure to provide station ID 5% 1,250 5,000 500
Unauthorized pro forma 5% 1,250 5,000 500
transfer of control
Failure to maintain 5% 1,250 5,000 500
Miscellaneous minor violations 2.5% 625 2,500
Upward Adjustment Criteria
(2) Ability to pay/relative disincentive(n4) 50-90%
(3) Intentional violation 50-90%
(4) Substantial harm 40-70%
(5) Prior violations of same or other requirements 40-70%
(6) Substantial economic gain 20-50%
(7) Repeated or continuous violation varies(n5)
III. NON-SECTION 503 FORFEITURES
Violation Statutory Amount(n8)
Sec. 202(c) Common carrier discrimination $6,000 $300/day
Sec. 203(e) Common carrier tariffs $6,000 $300/day
Sec. 205(b) Common carrier prescriptions $12,000
Sec. 214(d) Common carrier line extensions $1,200/day
Sec. 219(b) Common carrier reports $1,200
Sec. 220(d) Common carrier records & accounts $6,000/day
Sec. 223 Dial-a-Porn $50,000 maximum/day
Sec. 364/386 Ship radio $5,000/day (owner)
Sec. 506 Great Lakes Agreement $500/day (owner)
Sec. 634 Cable EEO $500/day
Note: Non-section 503 forfeitures may be adjusted downward
using the "Downward
Adjustment Criteria" shown for section 503 forfeitures in Section II above.
Regulatory Flexibility Act Analysis
Objectives: The Commission is seeking information regarding
the guidelines to be used in implementing its authority
to issue increased monetary forfeiture penalties.
Legal Basis: The proposed action is authorized under the authority contained in Sections 4(i), 303(r), and 503(b) of the Communications Act of 1934, 47 U.S.C. §§ 154(i), 303(r), 503(b).
Reporting, Recordkeeping and Other Compliance Requirements:
Federal Rules Which Overlap, Duplicate or Conflict With These Rules:
Description, Potential Impact, and Number of Small Entities Involved: Adoption of this Policy Statement could affect all licensees, including those that qualify as small business entities, who receive a monetary forfeiture as a result of a violation of the Communications Act or of the Commission's Rules. Non-licensees may also be liable for a monetary forfeiture if violations are repeated and they have previously received a warning or citation.
Any Significant Alternatives Minimizing the Impact on Small entities Consistent with the Stated Objectives: The Notice solicits general comment on better ways to accomplish its goals of developing guidelines for determining forfeiture amounts and providing notice to the public about the range of forfeiture amounts that may be assessed in particular cases.
I. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 II. DISCUSSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 III. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 IV. Initial Regulatory Flexibility Act Analysis . . . . . . . . . . . . . 10 V. Ordering Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 APPENDIX A APPENDIX B
Footnote 1 See ACUS, Agency Assessment and Mitigation of Civil Money Penalties, Recommendation No. 79-3. See also 10 C.F.R. Chapt. 1, Part 2, App. C (General Statement of Policy and Procedure for NRC Enforcement Actions)(1994).
Footnote 2 The Commission and its staff may use these guidelines in particular cases. The Commission and its staff retain the discretion to issue a higher or lower forfeiture than provided in the guidelines, to issue no forfeiture at all, or to apply alternative or additional sanctions as permitted by the statute. The forfeiture ceilings per violation or per day for a continuing violation stated in Section 503 of the Communications Act and the Commission's Rules are $100,000 for common carriers or applicants, $25,000 for broadcasters and cable operators or applicants, and $10,000 for all others. These base amounts listed are for a single violation or single day of a continuing violation. 47 U.S.C. § 503(b)(2); 47 C.F.R. § 1.80. For continuing violations involving a single act or failure to act, the statute limits the forfeiture to $1,000,000 for common carriers or applicants, $250,000 for broadcasters and cable operators or applicants, and $75,000 for all others. Id. There is an upward adjustment factor for repeated or continuous violations, see Section II, infra. That upward adjustment is not necessarily applied on a per violation or per day basis. Id. Unless Commission authorization is required for the behavior involved, a Section 503 forfeiture proceeding against a non-licensee or non-applicant who is not a cable operator or is not operating in the radio control or citizens band radio service can only be initiated for a second violation, after issuance of a citation in connection with a first violation. 47 U.S.C. § 503(b)(5). A citation is not required, however, for non-licensee tower owners who have previously received notice of the obligations imposed by Section 303(q) from the Commission or the permittee or licensee who uses that tower. Id. Forfeitures issued under other sections of the Act are dealt with separately in Section III below.
Footnote 3 Both upward and downward adjustments are applied to the base forfeiture amount. More than one factor may apply in a given case. This list of factors is intended to include the most common situations that arise under section 503(b)(2)(D) and is not intended to limit the Commission's discretion under that section.
Footnote 4 The Commission is required by the Communications Act to take ability to pay into consideration in assessing forfeiture amounts. 47 U.S.C. § 503(b)(2)(D).
Footnote 5 The percentage adjustment for this criterion could vary up to the statutory maximum per violation or per day of a continuing violation.
Footnote 6 A "minor" violation is misconduct which is at a low level of seriousness within the violation category. A minor violation is the opposite of "egregious misconduct."
Footnote 7 As noted above, the Commission is required by the Communications Act to take ability to pay into consideration in assessing forfeiture amounts. 47 U.S.C. § 503(b)(2)(D). The application of a downward adjustment for inability to pay is based upon a showing of substantial financial hardship. Inability to pay would generally be considered as a downward adjustment factor only upon a specific showing by the entity against whom forfeiture action is taken. However, in cases involving violations by individuals who are not in the business of providing radio services, e.g., recreational licensees, financial hardship may be presumed to exist in appropriate cases prior to a specific showing.
Footnote 8 Unlike section 503, which establishes maximum forfeiture amounts, other sections of the Act, with one exception, state prescribed amounts of forfeitures for violations of the relevant section. These amounts are then subject to mitigation or remission under section 504 of the Act. The one exception is section 223 of the Act, which provides a maximum of $50,000 per day. For convenience, the Commission will treat the $50,000 set forth in section 223 as if it were a prescribed base amount, subject to downward adjustments.