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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. EB-01-MA-040
New Image Electronics )
Miami, Florida ) NAL/Acct. No.
) FRN 0006-3343-12
Adopted: February 26, 2002 Released: March 1, 2002
By the Chief, Enforcement Bureau:
1. In this Forfeiture Order (``Order''), we issue a
monetary forfeiture in the amount of seven thousand dollars
($7,000), to New Image Electronics (``NIE''), for willful
violation of Section 302(b) of the Communications Act of 1934, as
amended (``Act''),1 and Section 2.803(a)(1) of the Commission's
Rules ("Rules").2 The noted violation involves NIE's marketing
of non-compliant long-range cordless telephones.
2. On October 29, 2001, the District Director of the
Commission's Tampa, Florida Field Office issued a Notice of
Apparent Liability for Forfeiture ("NAL"),3 on behalf of the
Commission's Miami, Florida Resident Agent Office ("Miami
Office"), in the amount of seven thousand dollars ($7,000). NIE
filed a response on January 14, 2002.
3. In February of 2001, the Federal Aviation
Administration ("FAA") reported to the Enforcement Bureau that it
was receiving sporadic interference to an aviation frequency in
the Miami, Florida area. In March of 2001, the Miami Office
identified the source of the interference as a long-range
cordless telephone being operated from an electronics store in
Miami. Information subsequently obtained by the Enforcement
Bureau indicated that some long-range cordless telephones were
being marketed for use on civilian VHF aviation frequencies in a
number of states. The FAA provided technical measurements of
some of the long-range cordless telephones and indicated that
some of the units transmitted significant spurious signals on
aviation frequencies, while other units were purposely designed
to operate in the aviation band. As a result of the FAA's
concerns, the Enforcement Bureau launched a nationwide
investigation into the unlawful use of long-range cordless
telephones that has resulted in the issuance of several citations
and NALs. The cordless telephone purchased by the FCC agents
from NIE is the same type of unlawful long-range cordless
telephone that caused concern for the FAA. This long-range
cordless telephone had the potential to cause serious
interference to aviation and, thus, is a threat to public safety.
4. On July 27, 2001, agents from the Miami Office visited
NIE, a retail store located at 9 West Flagler Street, Miami,
Florida 33130. The agents inquired about the availability of
long-range, cordless telephones for purchase. The salesperson
offered several models for sale, including a Prolink, CT 600.
The long-range cordless telephones offered for sale did not
possess the FCC authorization required for marketing these
devices in the United States. On August 24, 2001, the Miami
Office issued a citation to NIE for violation of Section 302(b)
of the Act and Section 2.803(a)(1) of the Rules which prohibits
the marketing of such devices. On September 10, 2001, NIE
responded to the citation. In its response, NIE stated that the
offending cordless telephones were no longer in the store.
5. On September 27, 2001, two FCC agents returned to NIE
and again inquired about the availability of long-range cordless
telephones for purchase. The salesperson sold the agents a
Prolink, CT 600. The cordless telephone purchased by the agents
did not possess the labeling or FCC authorization required for
marketing the device in the United States.4 On October 29, 2001,
the District Director of the Commission's Tampa, Florida Field
Office issued a NAL to NIE for marketing a non-compliant high-
power cordless telephone in violation of Section 302(b) of the
Act and Section 2.803(a)(1) of the Rules. On January 14, 2002,
the Bureau received a response to the NAL. In its response, NIE
does not dispute the violations. However, NIE requests
cancellation or reduction of the forfeiture for other reasons.
Specifically, NIE asserts that because of a misunderstanding
between it and its former counsel, NIE believed that it was
permitted to continue selling the long-range cordless telephones
as long as they were sold for export only. NIE further contends
that it mistakenly believed it was selling the long-range
cordless telephone for export when the Commission agent gave his
address as "Puerto Rico." NIE also contends that it has removed
all of the offending items from its store, has obtained a credit
from its wholesaler for the return of those items, and is
cooperating with the Enforcement Bureau in this matter.
Alternatively, NIE claims that it would be an extreme financial
hardship for it to pay the forfeiture proposed in light of its
small profit margin over the last three years.
6. The forfeiture amount in this case was assessed in
accordance with Section 503(b) of the Communications Act of 1934,
as amended (``Act''),5 Section 1.80 of the Rules,6 and The
Commission's Forfeiture Policy Statement and Amendment of Section
1.80 of the Rules to Incorporate the Forfeiture Guidelines, 12
FCC Rcd 17087 (1997), recon. denied, 15 FCC Rcd 303 (1999). In
examining NIE's response, Section 503(b) of the Act requires that
the Commission take into account the nature, circumstances,
extent and gravity of the violation and, with respect to the
violator, the degree of culpability, any history of prior
offenses, ability to pay, and other such matters as justice may
7. Section 302(b) of the Act provides that no 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(a)(1) of the Rules provides that:
(a) Except as provided elsewhere in this section,
no person shall sell or lease, or offer for sale
or lease (including advertising for sale or
lease), or import, ship, or distribute for the
purpose of selling or leasing or offering for sale
or lease, any radio frequency device unless: (1)
[i]n the case of a device subject to
certification, such device has been authorized by
the Commission in accordance with the rules in
this chapter and is properly identified and
labeled as required by ' 2.925 and other relevant
sections in this chapter[.]
NIE contends that, after consulting with its prior attorney, it
believed that it was permitted to continue selling the long-range
cordless telephones as long as they were sold for export only.
NIE also contends that it sold the cordless telephone to the FCC
agent thinking that it was being sold for export, because the
agent told the salesperson that his address was in Puerto Rico
and the salesperson mistakenly believed for export purposes, that
Puerto Rico was outside the United States. Section 2.807(b) of
the Rules8 exempts devices ``manufactured solely for export''
from the prohibition of Section 2.803(a)(1) which prohibits the
marketing of non-compliant devices. However, the exemption only
applies to devices that the manufacturer actually exports
(emphasis added). NIE was not the manufacturer of the device at
issue here. As a retailer, NIE is not entitled to use this
exemption. In any event, the fact that NIE was selling the long-
range cordless telephones in a retail store in Miami, Florida
indicates that NIE was engaged in marketing the long-range
cordless telephones to the general public in the United States.9
Moreover, even though NIE alleges that there was a
misunderstanding between it and its former counsel, reliance upon
advice of counsel is "grounds for neither rescission nor
mitigation of a forfeiture penalty."10 Additionally, NIE's
statement to this effect is inconsistent with the information NIE
initially provided the Bureau in response to the citation issued
to NIE on August 24, 2001. In its response of September 10,
2001, NIE informed the Bureau that the cordless telephones were
no longer in the store. If the cordless telephones were no
longer in the store, they could not possibly be sold for export
or otherwise. Further, even if export by NIE was permitted,
Puerto Rico is not considered to be outside of the United States
for the purpose of export.
8. Finally, NIE asserts that because it has removed the
long-range cordless telephones from the store, has obtained a
credit from its wholesaler for the return of the phones and is
cooperating with the Enforcement Bureau, the forfeiture should be
cancelled or reduced. We disagree. Corrective action taken to
come into compliance with Commission rules or policy is expected,
and does not nullify or mitigate any prior forfeitures or
9. Alternatively, NIE asserts that it would be an extreme
financial hardship for NIE to pay the forfeiture imposed in light
of the small profit margin it has experienced over the last three
years. In support of its claim of financial hardship, NIE has
submitted its federal income tax returns for tax years 1998,
1999, and 2000. The Commission has determined that, in general,
a licensee's gross revenues are the best indicator of its ability
to pay a forfeiture.12 After reviewing the financial data
submitted, we find no evidence in NIE's response that would
support cancellation of the forfeiture or a reduction based upon
IV. ORDERING CLAUSES
10. Accordingly, IT IS ORDERED THAT, pursuant to Section
503(b) of the Act and Sections 0.111, 0.311 and 1.80(f)(4) of the
Rules,13 New Image Electronics, Inc. IS LIABLE FOR A MONETARY
FORFEITURE in the amount of seven thousand dollars ($7,000) for
violating Section 302(b) of the Act and Section 2.803(a)(1) of
11. Payment of the forfeiture shall be made in the manner
provided for in Section 1.80 of the Rules within 30 days of the
release of this Order. If the forfeiture is not paid within the
period specified, the case may be referred to the Department of
Justice for collection pursuant to Section 504(a) of the Act.14
Payment shall be made by mailing a check or similar instrument,
payable to the order of the "Federal Communications Commission,"
to the Federal Communications Commission, P.O. Box 73482,
Chicago, Illinois 60673-7482. The payment should note NAL/Acct.
No. 20023700003, and FRN 0006-3343-12. Requests for full payment
under an installment plan should be sent to: Chief, Revenue and
Receivables Group, 445 12th Street, S.W., Washington, D.C.
12. IT IS FURTHER ORDERED that, a copy of this Order shall
be sent by Certified Mail Return Receipt Requested to New Image
Electronics, Inc. at 9 West Flagler Street, Miami, Florida 33130
and to its counsel Gary S. Glasser, Esq. at Biscayne Building,
Suite 1400, 19 West Flagler Street, Miami, Florida 33130.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
1 47 U.S.C. § 302(b).
2 47 C.F.R. § 2.803(a)(1).
3 Notice of Apparent Liability for Forfeiture, NAL/Acct. No.
200232700003 (Enf. Bur., Miami Office, released October 29,
4 See e.g., 47 C.F.R. '' 15.201, 2.925, and 15.19.
5 47 U.S.C. § 503(b).
6 47 C.F.R. § 1.80.
7 47 U.S.C. § 503(b)(2)(D).
8 47 C.F.R. ' 2.807(b).
9 See Amertel Electronics Corp., 8 FCC Rcd 4462, 4462 (Field
Operations Bureau 1993).
10 See Virginia RSA 6 Cellular Limited Partnership, 7 FCC Rcd
8022, 8022 (1992).
11 See Seawest Yacht Brokers DBA San Juan Marina Friday
Harbor, Washington, 9 FCC Rcd 6099, 6099 (1994).
12 See PJB Communications of Virginia, Inc., 7 FCC Rcd 2088,
13 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).
14 47 U.S.C. § 504(a).
15 See 47 C.F.R. § 1.1914.