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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
ESI Companies, Inc. ) File Number EB-02-NF-109
1877 Vanderhorn Drive ) NAL/Acct. No. 200332640003
Memphis, Tennessee 38134 ) FRN 4245429
Adopted: September 7, 2004 Released: September 9,
By the Chief, Enforcement Bureau:
1. In this Forfeiture Order (Order), we issue a
monetary forfeiture in the amount of ten thousand dollars
($10,000) to ESI Companies, Inc. (ESI), for
willful violation of Section 301 of the Communications Act of
1934, as amended (Act).1 The noted violation
involves ESI's operation of a maritime radio station on
the frequency 156.8050 MHz without Commission authorization.
2. On March 4, 2003, the Commission's Norfolk, Virginia,
Resident Agent Office (``Norfolk Office'') issued a
Notice of Apparent Liability for Forfeiture (``NAL'') to
ESI proposing a forfeiture in the amount of ten thousand
dollars ($10,000) for willful and repeated violation of
Section 301 of the Act.2 ESI responded to the NAL on
April 10, 2003.
3. On August 14, 2002, the Norfolk Office received a
complaint indicating that transmissions on 156.8050 MHz
were hampering the United States Coast Guard Auxiliary's
ability to monitor for distress calls from boaters on
the maritime safety channel at 156.800 MHz.3 The
complaint also indicated that the interfering
transmissions were emanating from an area south of
Taylorsville, North Carolina, and were related to
4. On August 22, 2002, an agent from the Norfolk Office
monitored 156.8050 MHz in the Taylorsville, North
Carolina area. The agent observed communications
relating to construction activities on that frequency.
Using direction finding equipment and investigative
techniques, he determined that these transmissions
emanated from a construction site located off Old Land
Fill Road (SR 1608), south of Taylorsville, North
Carolina. The agent conducted an inspection and
interviewed the construction superintendent, who stated
that ESI's employees were using a base station radio and
six hand-held radios as part of ESI's construction
business. The agent made frequency measurements of
ESI's base station and noted that it was tuned to
156.8050 MHz. That frequency is allocated exclusively
for maritime use. ESI holds licenses for land mobile
radio stations used in its construction business, but it
is not authorized to transmit on 156.8050 MHz or any
other maritime frequency.
5. In its letter of October 21, 2002, to the Norfolk
Office, ESI stated that, after the FCC visited its
Taylorsville, North Carolina, jobsite, ESI found that
the wrong frequency -- 156.8050 MHz -- was installed
there and ``possibly other locations across the
country.'' ESI also stated that it was ``now using
151.505 and 158.400 MHz at all sites nationwide.''
6. On March 4, 2003, the Norfolk Office issued an NAL to
ESI for a forfeiture in the amount of $10,000. In its
reply to the NAL, ESI states that it originally operated
radio transmitters on 156.8050 MHz during 19994 at a San
Diego, California, job site. ESI theorizes that the
recurrence of such operation on August 22, 2002, arose
from ESI's order to reprogram transmitters in late 2000.
ESI asserts that, in making the order, it apparently --
through error -- sent Integrated Communications, Inc.
(``ICI''), a transmitter which was supposedly programmed
for the ``correct'' frequency but was actually
programmed for 156.8050 MHz; and that, as a result, ICI
reprogrammed the transmitters to operate on 156.8050
MHz. ESI seeks cancellation or reduction of the
proposed monetary forfeiture. It argues that its
violation is not willful; that the proper base
forfeiture amount for its violation is $4,000 rather
than $10,000; that ``the nature, circumstances and
history of compliance show ESI does not have the
requisite degree of culpability to support [a]
forfeiture''; and that ``the Norfolk Office improperly
used ESI's good faith and voluntary disclosures of prior
improper programming by a service representative as a
basis to refuse rather than allow any reduction of the
7. The forfeiture amount in this case is being 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) (``Policy
Statement''). Section 503(b) of the Act requires that
the Commission, in examining ESI's response, 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 such other matters as justice may
8. Section 301 of the Act prohibits unauthorized radio
operation.8 We conclude on the basis of the Norfolk
agent's observations and ESI's response to the NAL, that
ESI operated radio transmitting apparatus on a frequency
reserved for maritime radio stations without an
instrument of authorization for the maritime service on
August 22, 2002, in violation of Section 301 of the Act.
9. ESI argues that, under the standard of Midwest-Radio
Television, Inc., 45 FCC 1137 (1963),9 its violation of
Section 301 was not willful because it did not know ICI
had programmed its radios with an improper frequency.
As the Commission recently reiterated, ``the Commission
has long held that licensees and other Commission
regulatees are responsible for the acts and omissions of
their employees and independent contractors and has
consistently refused to excuse licensees from forfeiture
penalties where actions of employees or independent
contractors have resulted in violations.''10 ESI is,
therefore, chargeable with ICI's knowledge of the
frequencies installed in its transmitters.11 We
conclude that ESI's violation of Section 301 of the Act
on August 22, 2002, was willful.
10. Section 503(b) of the Act gives the Commission
authority to assess a forfeiture penalty against any
person if the Commission determines that the person has
``willfully or repeatedly'' failed to comply with the
provisions of the Act or with any rule, regulation or
order issued by the Commission. In light of our
determination that ESI's violations were willful it is
not necessary to determine whether they were also
11. Even if we agreed with ESI's contention that the proper
base forfeiture amount for its violations of Section 301
is $4,000, we would still find $10,000 to be the proper
forfeiture amount because of the egregiousness13 of
ESI's violations. ESI's unlicensed operation occurred
on 156.805 MHz, a frequency located so close to the
international distress, safety and calling channel,
156.800 MHz, that there was a significant risk of
interference to distress and safety communications.
This case originated from a complaint about
transmissions on 156.805 MHz which were hampering the
United States Coast Guard Auxiliary's ability to monitor
for distress calls from boaters on 156.800 MHz.
Additionally, ESI had been previously warned about
operation on 156.805 MHz. We find that $10,000 is the
proper forfeiture amount for ESI's violations.
12. We also reject ESI's claim that ``the nature,
circumstances and history of compliance show ESI does
not have the requisite degree of culpability to support
[a] forfeiture.'' First, as indicated in the July 14,
1999, LOI described in fn. 3, ESI violated Section 301
during 1999 and, therefore, does not have a history of
overall compliance. Second, as indicated in paragraph
(9), above, ESI is responsible for the acts and
omissions of ICI, its contractor. Third, ESI's
culpability is increased by its failure to take the
necessary steps to prevent the recurrence of its
violation of Section 301 on August 22, 2002.
13. Finally, we reject ESI's assertion that ``the Norfolk
Office improperly used ESI's good faith and voluntary
disclosures of prior improper programming by a service
representative as a basis to refuse rather than allow
any reduction of the base forfeiture.'' While voluntary
disclosure of violations before detection by the
Commission or correction of violations before
notification by the Commission does warrant a reduction,
neither circumstance exists here. In this case, ESI
acted only after the Commission notified it of its
violation of Section 301 of the Act.
14. We have examined ESI's response to the NAL pursuant to
the statutory factors above, and in conjunction with the
Policy Statement as well. As a result of our review, we
conclude that ESI willfully violated Section 301 of the
Act and find no basis for cancellation or reduction of
the proposed $10,000 monetary forfeiture.
IV. ORDERING CLAUSES
15. 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,14 ESI IS LIABLE FOR A MONETARY
FORFEITURE in the amount of ten thousand dollars
($10,000) for willfully violating Section 301 of the
16. 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.15 Payment may 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
reference NAL/Acct. No. 200332640003 and FRN 4245429.
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. 20554.16
17. IT IS FURTHER ORDERED that a copy of this Order shall
be sent by First Class and Certified Mail Return Receipt
Requested to ESI's counsel, Nathan E. Minear, Esq.,
Hendrick, Phillips Salzman & Flatt, 230 Peachtree
Street, N.W., Suite 1800, Atlanta, Georgia 30303.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
1 47 U.S.C. § 301.
2 Notice of Apparent Liability for Forfeiture, NAL/Acct. No.
200332640003 (Enf. Bur., Norfolk Office, released March 4, 2003).
3 The frequency 156.800 MHz is the international distress, safety
and calling channel and is maintained by the United States Coast
Guard to detect, among other things, calls from ships in
4 On July 14, 1999, the Commission's San Diego, California, Field
Office issued a letter of inquiry (``LOI'') to ESI concerning
radio signals observed July 2, 1999, on 156.8050 MHz emanating
from transmitters located at or near ESI's office at a San Diego,
California construction site. ESI was not authorized to transmit
on 156.8050 MHz or any other maritime frequency. ESI's response
to the LOI indicated that ESI held a license to operate on
151.62500 MHz but ``the single frequency was not working for
us.'' ESI stated that, to find a solution, it consulted
Integrated Communications, Inc. (``ICI''), a radio dealer and
repair shop, which suggested using an itinerant frequency ``which
. . . would not require a license''; and that ICI then mistakenly
programmed ESI's transmitters to operate on 156.8050 MHz. ESI
asserted that it replaced those transmitters with rented
5 47 U.S.C. § 503(b).
6 47 C.F.R. § 1.80.
7 47 U.S.C. § 503(b)(2)(D).
8 Section 301 provides, in pertinent part, that ``No person shall
. . . operate any apparatus for the transmission of energy or
communications or signals . . . except under and in accordance
with this Act and with a license in that behalf granted under the
provisions of this Act.''
9 That case holds that - to establish that a violation is willful
- the language of Section 503(b) of the Act ``requires only that
the Commission establish that the licensee knew that he was doing
the acts in question . . . .'' Midwest-Radio Television, Inc.,
45 FCC 1137, 1141 (1963). In 1982 Congress codified the same
standard in Section 312(f)(1) of the Act, 47 U.S.C. § 312(f)(1),
which applies to violations for which forfeitures are assessed
under Section 503(b) of the Act. Section 312(f)(1) provides that
``[t]he term `willful,' ... means the conscious and deliberate
commission or omission of such act, irrespective of any intent to
violate any provision of this Act or any rule or regulation of
the Commission authorized by this Act ....'' See Southern
California Broadcasting Co., 6 FCC Rcd 4387 (1991).
10 Eure Family Limited Partnership, 17 FCC Rcd 21861, 21863-64
(2002) (internal quotation marks omitted) and cases cited
11 See Southern Media Communications, Inc., 18 FCC Rcd 24008,
24010 (Enf. Bur. 2003).
12 KOKE, Inc., 23 FCC 2d 191 (1970).
13 Note to Section 1.80(b)(4) of the Rules, 47 C.F.R. §
1.80(b)(4), Guidelines for Assessing Forfeitures, Section II
žAdjustment Criteria for Section 503 Forfeitures.
14 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).
15 47 U.S.C. § 504(a).
16 See 47 C.F.R. § 1.1914.