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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. EB-01-TS-040
ACR Electronics, Inc. ) NAL/Acct. No. 200532100004
Fort Lauderdale, Florida ) FRN No. 0008044232
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: October 27, 2004 Released: November
By the Commission:
1. In this Notice of Apparent
Liability for Forfeiture (``NAL''), we find
ACR Electronics, Inc. (``ACR'') apparently
liable for a forfeiture in the amount of
seventy five thousand dollars ($75,000) for
marketing unauthorized equipment in willful
and repeated violation of Section 302(b) of
the Communications Act of 1934 as amended
(``Act''),1 and Section 2.803(a) of the
Commission's Rules (``Rules'').2
2. In February 2004, the Enforcement
Bureau (``Bureau'') received a complaint
alleging that ACR was marketing through
outdoor and sporting publications and
websites a new personal location beacon
(``PLB''), 406 GPS PLB-200 (``PLB-200''),
under the names ``TerraFix'' for land use,
``AquaFix'' for marine use, and ``AeroFix''
for aviation use, which had not been
authorized by the Commission. In support, the
complainant provided evidence that the PLB-
200 was explicitly being described as ``FCC
approved,'' and marketed to consumers.
Specifically, the complainant submitted a
TerraFix brochure, which stated that the PLB-
200 was ``APPROVED for sale in the U.S,'' and
further provided evidence that at least one
retailer was accepting orders for the PLB-
200. In the latter regard, the complainant
submitted an e-mail order confirmation, dated
February 25, 2004, from Boat U.S. for the
purchase of one ``AquaFix 406 GPS I/O Plb,''
``Item 5321153,'' priced at ``$749.99.''3
3. In response to the complaint, the
Bureau issued a letter of inquiry (``LOI'')
to ACR on March 29, 2004.4 ACR filed a
response to the LOI on April 28, 2004,5 and
supplemented its response on May 4, 2004.6
4. In its response, ACR described the
PLB-200 TerraFix, AquaFix, and AeroFix as
``essentially the same'' model marketed to
different outdoor segments that is the ``next
generation'' of PLB and is based on the
technological design of its current certified
PLB-100 model with ``the single important
difference that the PLB-200 has a built-in
global positioning technology (GPS)
incorporated into each unit.''7 ACR did not
dispute that the PLB-200 model has not been
certified under the Commission's equipment
authorization procedures, but maintained that
the units ``have never been activated and
exist only as photographic or mock-up
prototypes intended to educate ACR
representatives and customers (equipment
retailers) of products that are under
development and for which authorization will
be sought in the future.''8 In this
connection, ACR explained that it does not
sell its products, including PLBs, directly
to end users, but rather sells ``through
distribution to retailers,'' who are
``approved by the ACR sales representative
for the particular territory'' and ``are
professional buyers, and unlike many end
users, familiar with the process of launching
a new telecommunications product and fully
cognizant that FCC approval is required of
many products.''9 ACR claimed that its
``PLB-200 was not promoted to the general
public, but rather to industry-specific
representatives and retailers who clearly
aware that the equipment was not for
5. As detailed below, ACR
acknowledged, and provided documentation to
show, that it displayed PLB-200 mock-ups at
trade shows, made industry presentations, and
provided related brochures, price lists and
other information to the press and to
retailers, and that such displays,
presentations and distributed materials were
not accompanied by the requisite disclaimer
notice set forth in Section 2.803(c).11 And,
contrary to ACR's representations, its
documentation showed that it, in fact,
promoted the PLB-200 to the general public by
advertising in outdoor and sporting
publications, and that such advertisements
also were not accompanied by the requisite
Section 2.803(c) disclaimer notice,
indicating that the device has not been
approved by the Commission and that it may
not be offered for sale or lease, or sold or
leased, until such approval is obtained.
6. With respect to its distributed
promotional materials, ACR submitted a
TerraFix ``press kit'' or ``packet,'' which
consisted of a folder containing two inserted
brochures (``brochures'') and two press
releases.12 ACR acknowledged that 25
complete press kits and approximately 700
brochures13 were distributed to the media and
to retailers at the Shooting Hunting Outdoor
Trade Show (``SHOT'') in Las Vegas, Nevada.14
ACR further acknowledged that that an
unspecified number of the press kits15 were
mailed to the media prior to, and distributed
to media and retailers at, the Outdoor
Retailer Winter Market Show (``OR'') in Salt
Lake City, Utah.16 On the front cover of the
TerraFix folder, it captioned ACR's logo,
depicted the TerraFix model, and stated in
bold print ``Personal Locator Beacons, New
and Improved, For Sale in the U.S.;'' in
contrast, on the bottom of back cover of the
folder, in small print, it stated ``New
Integral GPS PLB Available April -- pending
7. One of the brochures included in
the press kit was an outdoor product brochure
that included, among descriptions of its line
of outdoor products, the TerraFix PLB-200.
The outdoor brochure described the TerraFix
PLB-200 as ``the next generation PLB,''
because it uses ``GEOSAR satellites that are
in geostationary high-earth orbit and can
instantly relay emergency transmissions'' in
a ``matter of seconds.''18 This brochure did
not include any disclaimer; to the contrary,
on the ``PLB Specifications'' page of the
brochure, under ``Certification,'' it stated
that the PLB-200 was ``FCC approved.''19 The
second brochure included in the TerraFix
press kit, which featured the TerraFix PLB-
200 exclusively, stated prominently on the
front cover ``Personal Locator Beacon
APPROVED for sale in the U.S.'' Like the
outdoor product brochure, this brochure did
not include any notice that the PLB-200 had
not been approved by the Commission. The
TerraFix press releases, captioned ``ACR
Introduces Next Generation of Personal
Locator Beacons,'' included in the press kit,
stated that ACR is unveiling the TerraFix
406, which utilizes GPS components and is
``targeted to provide outdoor enthusiasts
with the smallest and most functional PLB
available in the world ... (pending FCC
approval),'' enabling such enthusiasts ``to
broadcast critical GPS coordinates, providing
Search and Rescue crews with exact latitude
and longitude thereby increasing emergency
response speed by pinpointing positioning
within 100 yards.''20
8. ACR also submitted a copy of an
AquaFix brochure.21 The front cover of the
front jacket of the AquaFix brochure stated
prominently ``Personal EPIRB APPROVED for
sale in the U.S.'' ACR claimed that the
AquaFix brochure ``had only the most minimal
exposure,''22 but did not specify how many
and to whom the brochures were issued.23
9. In addition, ACR submitted an
``Internal Use ONLY -- Not for Distribution''
2004 price list (printed January 7, 2004),24
and a distributed ``Outdoor Dealer Price List
and Order Form, Effective through 31 December
2004'' price list (printed January 26,
2004).25 The internal price list set the
TerraFix's net price at $515.00 and stated
``FCC Approval [is] Pending April 1, 2004.''
In contrast, the distributed price list set
the price for and identified the TerraFix as
``FCC PLB-200'' and contained no disclaimer
whatsoever regarding FCC approval.26 ACR
indicated that 200 price lists were prepared
for distribution, but claimed that a
``significantly less,'' unspecified number of
lists were actually distributed at the SHOT
and OR trade shows.
10. With respect to presentations, ACR
acknowledged that it displayed a TerraFix
mock-up, and distributed related TerraFix
press kits, price lists and press releases
prior to, and at, the SHOT and OR trade
shows. ACR further acknowledged that the
requisite Section 2.803(c) trade show
disclaimer was not displayed in its booth, or
as previously stated, in its distributed
promotional materials. According to ACR, the
display of a ``mock-up dummy . . . with a
plastic shell'' and the distribution of
informational materials did not manifest an
intent or attempt to sell TerraFix PLB-200
11. ACR also acknowledged that it made
PowerPoint presentations to select accounts,
such as Yamaha on October 2, 2003, Dick's
Sporting Goods on April 6, 2004, and Parts
Unlimited on April 13, 2004.28 The
representative PowerPoint material29 featured
the ```NEW' PLB models early 2004,''
explained and contrasted the ``state of the
art'' and more precise GPS technology
incorporated in the 2004 PLB-200 models with
the Doppler Shift technology incorporated in
the preceding PLB-100 models, and finally,
under the caption ``Regulations, Federal
Communications Commission'' indicated that
PLBs must pass a variety of tests.30
According to ACR, a ``Not for Sale Pending
FCC approval'' sticker was placed on some,
but not all, of the presented material;31
however, the PowerPoint material submitted
with its LOI response did not include any
12. Finally, although ACR represented
``that the PLB-200 units were never directed
at the general public,''32 its documentation
establishes otherwise. Specifically, ACR's
documentation establishes that it, in fact,
launched a substantial media campaign by
advertising the PLB-200 in multiple outdoor
and sporting magazines and catalogues that
were clearly directed at and targeted to the
consuming general public.33 According to
ACR's media schedule,34 it advertised the
· Outside Magazine's 2004 April Buying Guide
· Backpacker Magazine's 2004 March Buyer's Guide, April
and Summer issues and Camper Magazine
· Alaska Magazine's 2004 May issue (circulation:
· Rock `N Ice Magazine's 2004 June issue (circulation:
· Safari Club Magazine's 2004 May/June issue
· Safari Times' 2004 June issue (circulation: 39,500);
· Rocky Mountain Sports Magazine's 2004 April and May
issues (circulation: 60,000);
· Paddler Magazine's 2004 May/June issue (circulation:
· Kayak Magazine's 2004 Spring issue (circulation:
· Couloir Magazine's 2004 Winter issue (circulation:
· Backcountry Magazine's 2004 January and February issues
· Adventure Sports Magazine's 2004 April and May issues
(circulation: 25,000); and
· Outdoor Retailer/Outdoor Business' 2004 Winter and
Summer Market guides (circulation:
In this connection, ACR submitted a representative full-page
ad that appeared in one of the publications, which described
the ``NEW TerraFix 406 Personal Locator Beacon, the best
way to be found fast,'' depicted the model in terms of
actual size, and stated at the bottom of the page in black
border ``New Integral GPS PLB Available April -- Pending FCC
13. Section 302(b) of the Act provides
that ``[n]o person shall manufacture, import,
sell, offer for sale, or ship devices of home
electronic equipment and systems, or use
devices, which fail to comply with
regulations promulgated pursuant to this
section.'' Section 2.803(a)(2) of the
Commission's implementing regulations
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 ... [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
It is undisputed that the PLB-200 model is an intentional
radiating device,37 and as discussed below, is subject to
the Commission's certification procedures and related
14. Under Section 15.201(b) of the
Rules,38 manufacturers are required to submit
documentation test results to, and be
``certificated'' by, the Commission ``prior
to marketing'' intentional radiating
devices.39 However, in limited circumstances,
manufacturers are allowed to market devices
prior to certification. Specifically,
Section 2.803(c) of the Rules allows
manufacturers to advertise or display:
[A]t a trade show or exhibition, prior to
equipment authorization ... provided that the
advertising contains, and the display is
accompanied by, a conspicuous [disclaimer] notice
worded as follows: This device has not been
authorized as required by the rules of the Federal
Communications Commission. This device is not, and
may not be, offered for sale or lease, or sold or
leased, until authorization is obtained.
In 1976, the Commission expanded the ``trade show''
exception of Section 2.803(c) and allowed manufacturers to
advertise devices to the general public, prior to
certification, provided such advertisements include the
above disclaimer.40 Thus, ACR was allowed to display and
distribute promotional materials about the PLB-200 at the
OR, SHOT trade shows and like industry forums, and advertise
the PLB-200 in sporting and outdoor publications and related
websites, prior to certification, provided that its display,
promotional materials and advertisements conspicuously
displayed the requisite disclaimer notice.
15. ACR conceded, and its documentation
demonstrated, that the specific disclaimer
notice required by Section 2.803(c) was not
displayed in any of the promotional materials
distributed to the media and the retailers.
Significantly, the two TerraFix brochures,
which were included in the TerraFix press kit
and also widely distributed separately at the
two trade shows, not only failed to include
the requisite disclaimer notice, they also
falsely represented that the device was
approved by the Commission. In this regard,
one of the brochures prominently stated on
the front cover that the device was
``APPROVED for sale in the U.S,'' while the
other brochure stated on the ``PLB
Specifications'' page that the device was
``FCC approved.'' Similarly, the AquaFix
brochure prominently stated on the front
cover that the device was ``APPROVED for sale
in the U.S.'' While the TerraFix press kit
folder stated ``pending FCC approval,'' this
is not the disclaimer language explicitly
required by Section 2.803(c) and, in any
event, this statement was placed in small
print in a non-conspicuous location on the
back cover of the folder. As such, this
statement clearly did not comport with the
requirements of Section 2.803(c). The press
releases included in the TerraFix folder
likewise failed to include the disclaimer
language explicitly required by Section
2.803(c); and, the ``pending FCC approval''
statement that was included was placed in a
non-conspicuous place within the text of the
press releases. The 2004 TerraFix price
lists distributed at the trade shows also
failed to include a disclaimer notice.
Additionally, ACR admitted that no disclaimer
notice was included within some of the
PowerPoint presentations with select industry
accounts, and the ``Not for Sale Pending FCC
Approval'' sticker that was allegedly placed
on other PowerPoint presentations did not
comport with the requirements of Section
16. The requisite disclaimer notice
also was not displayed in ACR's OR and SHOT
trade show booths. In this regard, ACR
claimed that it only displayed a ``mock-up
dummy'' of the TerraFix model.41 ACR's claims
notwithstanding, exhibited non-working mock-
ups of non-authorized devices are not exempt
from the disclaimer notice requirement of
Section 2.803(c). The disclaimer requirement
applies to all radio frequency devices that
are in the ``development, design or
preproduction stages'' and that are subject
to the Commission's equipment authorization
procedures.42 ACR claimed that because the
PLB-200 model is based on ``technology
incorporated into the PLB-100, it could be
considered a prototype of a product properly
authorized,''43 subject to Section
2.803(c)(1)'s ``Prototype Not for Sale''
disclaimer.44 ACR's claim is disingenuous at
best, given that it did not display the
prototype disclaimer, and that its
promotional materials referenced the new and
improved next generation PLB that
incorporates the more precise GPS (over the
prior Doppler Shift) technology.45
17. Also, contrary to ACR's claim that
its retailers are professional buyers who are
familiar with, and would not offer new
telecommunications products without, the
Commission's equipment authorization, the
complaint submitted evidence that at least
one retailer was accepting purchase orders
for the PLB-200.46 Moreover, the Bureau
staff found several retail websites that were
offering the TerraFix and AquaFix PLB-200s
for sale. Specifically, the Bureau staff
observed that the PLB-200s were advertised on
the Boat U.S., West Marine, Mountain Gear and
The Sportsman's Guide retail websites, and
that such advertisements listed prices,
specified delivery dates,47 and enabled
consumers to place orders. Notably, the
Mountain Gear and The Sportsman's Guide
retail websites, respectively, stated that
the PLB was ``FCC approved'' and represented
that the PLB ``[e]xceeds rigorous testing
standards of ... [the] FCC.'' Indeed, the
TerraFix PLB-200 was offered for sale,
without the requisite disclaimer notice, in
the Recreational Equipment, Inc. (``REI'')
mail order catalogue sent to consumers during
the week of September 7, 2004.48 The fact
that PLB-200s were being and continued to be
offered for sale on retail websites and in
retail catalogues is hardly surprising, given
that ACR's displays, presentations and
distributed materials did not contain the
requisite disclaimer notice, and indeed some
contained misleading information, regarding
18. In the instant case, we thus find
that ACR displayed a PLB-200 model, made
industry presentations, and distributed
related promotional materials, prior to
certification of the device without the
disclaimer notice set forth in Section
2.803(c), in apparent willful and repeated
violation of Section 302(b) of the Act and
Section 2.803(a) of the Rules.
19. As stated previously, in 1976, the
Commission authorized manufacturers to
advertise to the general public radio
frequency devices that have not been
certified or otherwise approved, provided
such advertisements display the requisite
disclaimer notice in a conspicuous manner.
The Commission explained that the ``prime or
essential purpose'' of Section 2.803 is ``to
keep unapproved and offending devices out of
the stream of commerce,'' and that the
disclaimer notice serves to alert the public
``to the fact that many if not most of the
multitude of RF devices proliferating in the
marketplace require scrutiny by this
Commission before marketing ....''49 Absent
the conspicuously placed disclaimer notice
requirement, it would be ``unrealistic to
permit consumer devices to be offered for
sale to potentially millions of people and
expect the delivery of the devices to be
delayed while awaiting the Commission
20. ACR's claim that the PLB-200 was
only marketed to industry representatives and
retailers to ``educate ... [them] of products
under development and for which authorization
will be sought in the future''51 -- and was
never promoted to or directed at the general
public52 -- is simply belied by the record.
Indeed, the record establishes that ACR
knowingly and intentionally advertised in,
and thus promoted and directed the
unauthorized PLB-200 to the general public
through, multiple outdoor and sporting
magazines and catalogues. Such
advertisements did not include the disclaimer
notice required by Section 2.803(c). ACR's
claim that ``virtually all the ...
promotional information shows that the
equipment is `pending FCC approval''' is
unavailing.53 The record establishes that
the wording and placement of ACR's ``pending
FCC approval'' statement did not comport with
the requirements of Section 2.803(c), and
thus did not alert the general public that
FCC approval must be obtained prior to any
sales, leases, or offers to sell and/or lease
of such equipment.54
21. In the instant case, we find that
ACR apparently willfully and repeatedly
violated Section 302(b) of the Act and
Section 2.803(a) of the Rules, by advertising
the PLB-200 to the general public, prior to
certification without the disclaimer notice
required by Section 2.803(c).
22. Section 503(b) of the Act,55 and
Section 1.80(a) of the Rules,56 provide that
any person who willfully or repeatedly fails
to comply with the provisions of the Act or
the Rules shall be liable for a forfeiture
penalty. For purposes of Section 503(b) of
the Act, the term ``willful'' means that the
violator knew that it was taking the action
in question, irrespective of any intent to
violate the Commission's rules, and
``repeatedly'' means more than once.57 Based
upon the record before us, it appears that
ACR willfully and repeatedly violated Section
302(b) of the Act and Section 2.803(a) of the
Rules by exhibiting and marketing the PLB-
200s, which had not been certified in
accordance with the Commission's equipment
23. Section 503(b) of the Act
authorizes the Commission to assess a maximum
forfeiture of $11,000 for each violation, or
each day of a continuing violation, by a non-
common carrier or other entity not
specifically designated in Section 503(b), up
to a statutory maximum forfeiture of $87,500
for any single continuing violation;58 and
Section 1.80(b)(4) specifically establishes a
base forfeiture amount of $7,000 for each
violation involving the marketing of
unauthorized equipment.59 In the present
case, we find that each of ACR's displays and
advertisements of, and presentations,
distributions of informational and
promotional materials regarding, the
uncertified PLB-200 constitutes a separate
24. In determining the appropriate
forfeiture amount, Section 503(b)(2)(D) of
the Act60 requires the Commission to consider
factors, such as ``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 require.''61 Having weighed the
factors, we find that a $75,000 forfeiture is
appropriate in light of ACR's relative
ability to pay a forfeiture,62 and the fact
that ACR knowingly launched a substantial
media campaign promoting its unauthorized
equipment to the general public. Given the
substantial degree of apparently unlawful
equipment marketing, we recognize that
straightforward application of the base
forfeiture amount for each separate apparent
violation would result in a significantly
higher proposed forfeiture. Nevertheless,
we believe that, in the instant case, the
$75,000 proposed forfeiture is sufficient to
deter future violations of the Act and Rules
and to ensure that uncertified equipment is
not marketed in industry or public forums
without the requisite disclaimer notices.
25. We note that the company has
committed ``to make certain that ACR is in
complete compliance with the rules'' and
``intends to add to its promotional materials
involving the referenced PLB[-200s] the exact
wording of the disclaimers set forth in the
Rules.''63 We further note that ACR recently
received Commission equipment authorization
for the PLB-200.64 The Commission expects
that corrective action will be implemented to
bring past violations into compliance.65
However, such corrective action does not
nullify or mitigate ACR's past marketing
violations, and thus does not warrant any
reduction in the proposed forfeiture.66
IV. ORDERING CLAUSES
26. Accordingly, IT IS ORDERED that,
pursuant to pursuant to Section 503(b) of the
Act67 and Sections 0.111, 0.311 and 1.80 of
the Rules,68 ACR Electronics, Inc. IS hereby
NOTIFIED of its APPARENT LIABILITY FOR A
FORFEITURE in the amount of seventy five
thousand dollars ($75,000) for willfully and
repeatedly violating Section 302(b) of the
Act and Section 2.803(a) of the Rules.
27. IT IS FURTHER ORDERED that,
pursuant to Section 1.80 of the Rules, within
thirty days of the release date of this
Notice of Apparent Liability for Forfeiture,
ACR Electronics, Inc. SHALL PAY the full
amount of the proposed forfeiture or SHALL
FILE a written statement seeking reduction or
cancellation of the proposed forfeiture.
28. Payment of the forfeiture must be
made by check or similar instrument, payable
to the order of the Federal Communications
Commission. The payment must include the
NAL/Acct. No. and FRN No. referenced above.
Payment by check or money order may be mailed
to Forfeiture Collection Section, Finance
Branch, Federal Communications Commission,
P.O. Box 73482, Chicago, Illinois 60673-7482.
Payment by overnight mail may be sent to Bank
One/LB 73482, 525 West Monroe, 8th Floor
Mailroom, Chicago, IL 60661. Payment by wire
transfer may be made to ABA Number 071000013,
receiving bank Bank One, and account number
29. The response, if any, must be
mailed to the Office of the Secretary,
Federal Communications Commission, 445 12th
Street, S.W., Washington, D.C. 20554, ATTN:
Enforcement Bureau - Spectrum Enforcement
Division, and must include the NAL/Acct. No.
referenced in the caption.
30. The Commission will not consider
reducing or canceling a forfeiture in
response to a claim of inability to pay
unless the petitioner submits: (1) federal
tax returns for the most recent three-year
period; (2) financial statements prepared
according to generally accepted accounting;
or (3) some other reliable and objective
documentation that accurately reflects the
petitioner's current financial status. Any
claim of inability to pay must specifically
identify the basis for the claim by reference
to the financial documentation submitted.
31. Requests for payment of the full
amount of this NAL under an installment plan
should be sent to: Chief, Revenue and
Receivable Operations Group, 445 12th Street,
S.W., Washington, D.C. 20554.69
32. IT IS FURTHER ORDERED that a copy
of this Notice of Apparent Liability for
Forfeiture shall be sent by first class mail
and certified mail return receipt requested
to Paul Frank, President, ACR Electronics,
Inc., 5757 Ravenswood Road, Ft. Lauderdale,
Florida 33312, and Bruce A. Eisen, Esq., Kaye
Scholer LLP, 901 15th Street, N.W., Suite
1100, Washington, D.C. 20005.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
147 U.S.C. § 302a(b).
247 C.F.R. § 2.803(a).
3Under ``Status,'' the submitted confirmation order noted
``051504,'' which appears to represent the delivery date.
4See Letter from Joseph P. Casey, Chief, Spectrum
Enforcement Division, Enforcement Bureau, Federal
Communications Commission to Paul Frank, President, ACR
Electronics, Inc. (March 29, 2004).
5See Letter from Bruce Eisen, Esq., Kaye Scholer LLP, to
Brian Butler, Spectrum Enforcement Division, Enforcement
Bureau, Federal Communications Commission (April 28, 2004)
6See Letter from Bruce Eisen, Esq., Kaye Scholer LLP, to
Brian Butler, Spectrum Enforcement Division, Enforcement
Bureau, Federal Communications Commission (May 4, 2004)
7LOI Response at 1-2.
8Id. at 1.
9Id. at 2.
10Id. at 6.
1147 C.F.R. § 2.803(c).
12Id. at Exhibit 2. See also LOI Supplement, Exhibit 2.
ACR's LOI Response included a photocopy of the TerraFix
press kit, and its LOI Supplement included an original
TerraFix press kit.
13LOI Response at 3.
14SHOT was held from February 12 through 15, 2004.
15LOI Response at 3.
16OR was held from January 30 through February 2, 2004.
17LOI Supplement at Exhibit 2.
20LOI Response at Exhibit 2; LOI Supplement at Exhibit 2.
21LOI Response at Exhibit 10.
22Id. at 4.
23In contrast to the TerraFix and AquaFix models, it should
be noted that ACR stated that it had ``not marketed the
`AeroFix' in any way other than to allow its sales
representatives to use its name in conversation with
retailers.'' LOI Response at 4.
24Id. at Exhibit 4.
25Id. at Exhibit 3.
27Id. at 3.
28Id. at 4.
29Id. at Exhibits 11-12.
31LOI Response at 4.
32Id. at 6.
33Id. at 4, Exhibits 8-9. ACR spent approximately one
third ($100,00) of its advertising budget ($300,000) from
January through March 2004, promoting the unauthorized PLB-
200 in outdoor and sporting magazines and catalogues. Id.
at Exhibit 9.
35Id. With the exception of Outdoor Retailer/Outdoor
Business Market Guides, it appears that all the
publications that ran ACR's PLB-200 advertisements were
clearly directed toward the ultimate end-users, i.e.,
consumers. For instance, Outside Magazine ``[b]ack in 1978
... stated that [it] was 'dedicated to covering the people,
sports and activities, politics, art, literature, and
hardware if the outdoors,' an editorial goal that that has
stuck ever since ... [it] has done an amazing job of
bringing people in contact with the outside world.''
Http://www.outside.away.com. (emphasis added). Outside
Magazine has a circulation of 650,000 and its Buyer Guide
is distributed to ``news racks'' throughout the country and
``gets passed around beyond subscribers. It gets read by a
lot of other readers.''
Similarly, Backpacker's Magazine (circulation: 295,000) and
Couloir Magazine (circulation: 41,000), both geared toward
consumers, respectively describe their ``mission'' in terms
of ``encourage[ing] and enable[ing] people to experience
wilderness,'' and ``inform[ing] and inspir[ing[ skiers and
snowboarders who `earn their turn in the backcounty.'''
36Id. at Exhibit 8.
37Section 15.3(o) of the Rules, 47 C.F.R. § 15.3(o),
defines an intentional radiator as a ``device that
intentionally generates and emits radio frequency energy by
radiation or induction.''
3847 C.F.R. § 15.201(b).
39Sections 2.907(a) and (b), 47 C.F.R. §§ 2.907(a) and (b),
provides, in pertinent part, that certification ``is an
equipment authorization issued by the Commission, based on
representations and test data submitted by the applicant''
and that it ``attaches to all units subsequently marketed by
the grantee which are identical ... to the sample tested
40See Interpretation and Amendment of Part 2, Section 2.803
of the Commission's Rules Relating to the Marketing
(Advertising) of RadioFrequency Devices, 62 FCC 2d 728, 729
¶ 8 (1976) (interpreting the ``trade show'' exception of
Section 2.803 to allow manufacturers to advertise ``non-
approved equipments - providing such advertising contains
notice that the equipments have not been authorized and may
not be offered for sale or lease or sold or leased'')
(``1976 Order''); see also Interpretation and Amendment of
Part 2, Section 2.803 of the Commission's Rules Relating to
the Marketing of RadioFrequency Devices, RM Dockets 2573
and 2601, 58 FCC 2d 784 (1976) (adopting the trade show
exception of Section 2.803).
41LOI Response at 3.
42Matter of Revision of Part 2 of the Commission's Rules
Relating to the Marketing and Authorization of Radio
Frequency Devices, 12 FCC Rcd 4533, 4533 ¶ 1 (1996) (``1996
Order''), recon. granted, 13 FCC Rcd 12928 (1998).
Manufacturers who exhibited and/or distributed promotional
materials regarding non-working mock-ups or prototypes of
radio frequency devices at trade shows, without the
conspicuous disclaimer notice, have been found in violation
of Section 2.803(a). See Palmcom International Ltd., 8 FCC
Rcd 332 (FOB 1993); see also GVC Technologies, Inc., 8 FCC
Rcd 6667 (FOB 1993). Regarding the display of non-
authorized equipment, the Palmcom decision stated:
Although the device itself may have been a non-
functioning prototype, the displaying of a device
that represents a radio frequency device that had
not been authorized by the FCC violates Section
2.803 of the FCC's rules. The displaying of the
device, moreover, was a form of advertising which
is also prohibited by Section 2.803. The apparent
purpose in displaying the device was to market it,
namely, to generate either immediate or future
orders to buy the device. Often at a trade show
or even in a store, there is no intent to sell
actual device on display, but the device is used
to generate orders. The actual device that is
sold may not have been constructed or assembled at
the time a purchase order is placed.
8 FCC Rcd at 332.
43LOI Response at 5.
44Section 2.803(c)(1) of the Rules, 47 C.F.R. § 2.803(c)(1)
If the product being displayed [at an industry
trade show] is a prototype of a product that has
been properly authorized and the prototype,
itself, is not authorized due to differences
between the prototype and the authorized product,
the following disclaimer notice may be used in
lieu of the notice stated in paragraph (c) ... of
Prototype. Not for Sale.
45See, e.g., LOI Response at Exhibits 11-12.
46See note 3 and accompanying text, supra.
47For example, the Mountain Gear website indicated that the
PLB-200 would be ``available to ship May 15, 2004.''
48REI's website indicates that it has over 70 retail stores
in the U.S. and also serves the needs of ``outdoors
people'' through direct sales via the internet, telephone
and mail. REI further indicates that it is the nation's
largest consumer cooperative with over 2 million members.
See http://www.rei.com. Thus, it appears likely that REI's
marketing of the unauthorized PLB-200 is reaching
substantial numbers of consumers.
491976 Order, 62 FCC 2d at 729 ¶ 5.
501997 Order, 12 FCC Rcd at 4537 ¶ 7.
51LOI Response at 1.
52See notes 10 and 32 and accompanying text, supra.
53See, e.g., ASLAN Computer Corp., 9 FCC Rcd 2030, 2030 ¶ 5
(FOB 1994) (finding a disclaimer notice ``DEMO NOT FOR
SALE'' for an uncertified computer model insufficient and a
violation of Section 2.803, which sets forth ``very
specific'' disclaimer language which is ``intended to
convey to the general public or prospective purchasers the
fact that a particular device needs FCC authorization, does
not have it, and cannot be sold or offered for sale until
such authorization has been granted''); California Komputer
Test, Inc., 9 FCC Rcd 1046, 1046 ¶ 6 (FOB 1994) (finding
that an advertisement in a newspaper, and a display in a
retail outlet, of an uncertified computer ``[un]accompanied
by a conspicuous notice as specified in Section 2.803''
violated the Commission's equipment marketing
54See notes 3 and 47 and accompanying text, supra.
5547 U.S.C. § 503(b).
5647 C.F.R. § 1.80(a).
57See Southern California Broadcasting Co., 6 FCC Rcd 4387
5847 U.S.C. § 503(b). Section 503(b)(2)(C) provides for
forfeitures up to $10,000 for each violation in cases not
covered by subparagraph (A) or (B), which address
forfeitures for violations by broadcast licensees and
common carriers, among others. In accordance with the
inflation adjustment requirements contained in the Debt
Collection Improvement Act of 1996, Pub. L. 104-134, Sec.
31001, 110 Stat. 1321, the Commission has increased the
maximum statutory forfeiture under Section 503(b)(2)(C) for
each violation to $11,000. See 47 C.F.R. § 1.80(b)(3);
Amendment of Section 1.80 of the Commission's Rules and
Adjustment of Forfeiture Maxima to Reflect Inflation, 15
FCC Rcd 18221 (2000). Subsequent increases of the maximum
statutory forfeiture amount had not taken effect at the
time of the behavior in issue. See Amendment of Section
1.80 of the Commission's Rules and Adjustment of Forfeiture
Maxima to Reflect Inflation, 19 FCC Rcd 10945 (2004).
5947 C.F.R. § 1.80(b)(4).
6047 U.S.C. § 503(b)(2)(D).
61The Commission's Forfeiture Policy Statement and
Amendment of Section 1.80 of the Rules to Incorporate the
Forfeiture Guidelines, 12 FCC Rcd 17087, 17110 (1997),
recon. denied 15 FCC Rcd 303 (1999).
62In this connection, we note that ACR is listed as a
subsidiary of the global Cobham PLC. See LOI Response,
Exhibits 11-12; Http://www.chelton.com/ltd/ltd. Cobham PLC
operates ``in three sectors - aerospace systems, avionics
and flight operations & services'' and had reported 2002
annual revenues of $1,178 billion).
Http://www.biz.yahoo.com/ic/57/57756.html. See Forfeiture
Policy Statement, 12 FCC Rcd at 17098 ¶ 20 (noting that the
identity of a violator may be relevant in assessing and
adjusting forfeitures, because, for example, a ``$10,000
forfeiture for a particular offense will [not] have the
same deterrent effect on a small computer vendor, a
moderately-sized radio common carrier, and a $10 billion
per year local telephone company or interexchange
carrier''); see also KASA Radio Hogar, Inc., 17 FCC Rcd
6256, 6258-59 ¶¶ 4-5 (2002) (stating that it is appropriate
to consider the income derived from its consolidated
operations to determine whether a violator ``can sustain a
63LOI Response at 6.
64On October 5, 2004, the Commission's Office of
Engineering and Technology granted ACR's PLB-200 equipment
authorization (FCC Identifier B66ACR-PLB-200).
65See AT&T Wireless Services, Inc., 17 FCC Rcd 7891 (2002),
forfeiture ordered, 17 FCC RCd 21866, 21875-76 ¶¶ 26-28
(2002); Seawest Yacht Brokers, 9 FCC Rcd 6099, 6099 ¶ 7
(1994); see also TCI Cablevision of Maryland, Inc., 7 FCC
Rcd 6013, 6014 ¶ 8 (1992) (considering subsequent
corrective actions as a mitigation of past violations
``would tend to encourage remedial rather preventative
6747 U.S.C. § 503(b).
687 C.F.R. § 0.111, 0.311 and 1.80.
69See 47 C.F.R. § 1.1914.