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Federal Communications Commission
Washington, D.C. 20554
) File No. EB-08-TC-2581
In the Matter of
) NAL/Acct. No. 200832170071
) FRN: 0003746757
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: September 12, 2008 Released: September 12, 2008
By the Chief, Enforcement Bureau:
1. In this Notice of Apparent Liability For Forfeiture ("NAL"), we find
that Qwest Corporation ("Qwest"), as an eligible telecommunications
carrier ("ETC"), apparently violated Section 54.418 of the
Commission's rules. Specifically, we find that Qwest apparently
willfully and repeatedly failed to provide certain Lifeline customers
with notices about the transition of over-the-air full power
broadcasting from analog to digital service (the "DTV transition") in
the monthly bills or bill notices received by these customers. Based
upon our review of the facts and circumstances surrounding this
apparent violation, we find that Qwest is apparently liable for a
monetary forfeiture in the amount of fifty-one thousand dollars
2. On February 19, 2008, the Commission adopted DTV consumer education
outreach requirements intended to promote consumer awareness of the
upcoming DTV transition. Under these requirements, ETCs that receive
federal universal service funds must provide their Lifeline or Link-Up
customers with notices about the DTV transition in the monthly bills
or bill notices received by such customers. The notices must be in
clear and conspicuous print and must contain at least the following
information about the DTV transition:
* After February 17, 2009, a television receiver with only an analog
broadcast tuner will require a converter box to receive full power
over-the-air broadcasts with an antenna because of the Nation's
transition to digital broadcasting. Analog-only TVs should continue to
work as before to receive low power, Class A, or translator television
stations and with cable and satellite TV services, gaming consoles,
VCRs, DVD players, and similar products.
* Information about the DTV transition is available at www.DTV.gov, and
information about subsidized coupons for digital-to-analog converter
boxes is available at www.dtv2009.gov or 1-888-DTV-2009.
If an ETC's Lifeline or Link-Up customers do not receive paper versions of
either a bill or a notice of billing, then those customers must receive
equivalent monthly notices in whatever medium in which they receive
information about their monthly bill. As an alternative to the billing
notices, ETCs may send separate monthly mailers with the required
information about the DTV transition. ETCs should have begun to send the
required DTV consumer education notices on April 30, 2008, and may cease
doing so in March 2009.
3. Qwest provides local telephone service to customers in numerous states
and is an ETC that receives federal universal service funds. On July
2, 2008, the Commission issued a Letter of Inquiry ("LOI") to Qwest to
determine whether Qwest had complied with Section 54.418 of the rules.
In its response to the LOI, Qwest states that "in the process of
preparing its response to this inquiry, [Qwest] discovered that
Lifeline and Link-Up customers receiving on-line bills in [Qwest's]
central and western regions had not been receiving the DTV transition
notice. This was an oversight." The company offers no further
explanation for the error. According to the company, approximately
8,500 of its Lifeline and Link-Up customers in nine western states
failed to receive DTV transition notices in the months of May, June,
and July 2008. Qwest states that it has fixed this problem and that
its Lifeline and Link-Up customers who receive on-line bills in the
central and western region would begin receiving the monthly notice in
their August bills.
4. Under Section 503(b)(1) of the Act, any person who is determined by
the Commission to have willfully or repeatedly failed to comply with
any provision of the Act or any rule, regulation, or order issued by
the Commission shall be liable to the United States for a forfeiture
penalty. Section 312(f)(1) of the Act defines willful as "the
conscious and deliberate commission or omission of [any] act,
irrespective of any intent to violate" the law. The legislative
history to Section 312(f)(1) of the Act clarifies that this definition
of willful applies to both Sections 312 and 503(b) of the Act, and the
Commission has so interpreted the term in the Section 503(b) context.
The Commission may also assess a forfeiture for violations that are
merely repeated, and not willful. "Repeated" means that the act was
committed or omitted more than once, or lasts more than one day. To
impose such a forfeiture penalty, the Commission must issue a notice
of apparent liability and the person against whom the notice has been
issued must have an opportunity to show, in writing, why no such
forfeiture penalty should be imposed. The Commission will then issue a
forfeiture if it finds by a preponderance of the evidence that the
person has violated the Act or a Commission rule.
A. Qwest Apparently Violated the Commission's Rules Requiring DTV
Transition Notices To Lifeline and Link-Up Customers
5. Qwest concedes that it failed to send DTV transition notices to
approximately 8,500 Lifeline and Link-Up customers in the months of
May, June, and July 2008. Accordingly, we find that Qwest apparently
willfully and repeatedly violated Section 54.418(a) of the
Commission's rules by failing to provide the required DTV transition
notice to numerous Lifeline and Link-Up subscribers either as a
separate mailer or with their May, June, and July 2008 bills.
B. Proposed Forfeiture
6. Section 503(b)(2)(B) of the Act authorizes the Commission to assess a
forfeiture of up to $130,000 for each violation or each day of a
continuing violation, up to a statutory maximum of $1,325,000 for a
single act or failure to act. In exercising such authority, we are to
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 require."
7. The Commission's Forfeiture Policy Statement and Section 1.80 of the
Rules do not establish a specific base forfeiture for violation of
Section 54.418(a)'s notice requirements. The Commission has warned,
however, that "any omission of a specific rule violation from the ...
[forfeiture guidelines] ... should not signal that the Commission
considers any unlisted violation as nonexistent or unimportant."
Indeed, the Commission emphasized the importance of the ETC
requirements in the DTV Consumer Education Initiative:
In a survey on the DTV transition, the GAO found that over-the-air
households are more likely to have lower incomes than cable or satellite
households and that approximately 48 percent of exclusive over-the-air
viewers have household incomes less than $30,000.... Because the DTV
transition will greatly affect lower income households and the
Lifeline/Link-Up programs already serve this same demographic, we have an
already established communication path that can be used to further the
success of the DTV transition. By communicating with these lower income
households, we ensure that all Americans will have the knowledge they need
in order to prepare for the DTV broadcast transition.
The Commission further noted that Americans rely heavily on their
televisions to receive emergency information through the Emergency Alert
System, and tragedy might result if people lost the ability to receive
such alerts because they were unaware of the DTV transition. "Therefore,
ensuring that all Americans receive notice of the upcoming DTV transition,
including those that have been identified as at risk of not receiving the
necessary information, is a critical step to achieving our mandate to
promote public safety."
8. Because of the significance of the Commission's DTV transition notice
requirements and the potential scale of violations in this area, we
find instructive the forfeiture calculation methodologies adopted by
the Commission in other DTV-related enforcement areas. For example, in
cases involving the interstate shipment or importation of television
receivers incapable of receiving digital broadcast signals, the
Commission based its forfeiture calculations on each unit shipped or
imported. To reflect the increasing seriousness of the violations as
the number of non-compliant units shipped or imported rises, the
Commission established tiers of violations with increasing per-unit
forfeitures for each successive tier. The Commission adopted a similar
approach for cases involving the interstate shipment or U.S.
manufacture of television receivers that do not comply with the
Commission's program blocking rules. In the Funai NAL, the Commission
again proposed a forfeiture for each television receiver shipped
interstate that did not comply with FCC rules, calculating the
forfeiture based on tiers of units with increasing penalty amounts as
the tiers progressed.
9. We find that a similar approach should apply to violations of the DTV
Consumer Education requirements, and will appropriately take into
account the specific facts of each individual case. Therefore, in
cases involving an ETC's failure to send monthly DTV transition
notices to its Lifeline/Link-Up customers in apparent violation of 47
C.F.R. S: 54.118, we will base our forfeiture calculations on the
number of customers each month that failed to receive proper notice of
the DTV transition, with increasing per customer forfeitures imposed
for each successive month in which the ETC failed to comply with the
Commission's rules. Such an approach should encourage prompt
compliance and adequately punish the most egregious violators. Thus,
for a single month of violations, an ETC will face a forfeiture of one
dollar ($1.00) for each customer that did not receive proper notice of
the DTV transition. We will increase the per-customer penalty for each
additional month by an additional dollar. Thus, a second month of
violations will result in a forfeiture of two dollars ($2.00) per
customer, a third month would result in a forfeiture of three dollars
($3.00) per customer, and so on. We caution that if this forfeiture
calculation approach does not adequately deter future violations by
Qwest or other ETCs, we will consider other penalties within the scope
of our authority, including substantially higher forfeitures.
10. In this case, Qwest failed to send proper DTV transition notices to
8,500 customers each month during May, June, and July 2008. Therefore,
the forfeiture for Qwest 's apparent violations is $51,000.
Accordingly, we propose a total forfeiture of $51,000 against Qwest
for its apparent willful and repeated violations of Section 54.418(a).
11. Because of the number of Lifeline/Link-Up customers served by ETCs,
the failure to provide DTV consumer education notices as required by
the Commission's rules is crucial, especially since consumers
participating in the Lifeline and Link-Up programs are particularly
likely to be over-the-air viewers and billing notices are a critical
means of reaching them. The imminent nature of the DTV transition and
its potential impact on unaware consumers further increases the
importance of each and every educational opportunity.
IV. ordering clauses
12. ACCORDINGLY, IT IS ORDERED THAT, pursuant to Section 503(b) of the
Communications Act of 1934, as amended, Section 1.80(f)(4) of the
Commission's rules, and authority delegated by Sections 0.111 and
0.311 of the Commission's rules, Qwest IS LIABLE FOR A MONETARY
FORFEITURE in the amount of fifty-one thousand dollars ($51,000) for
willfully and repeatedly violating Section 54.418(a) of the
13. IT IS FURTHER ORDERED THAT, pursuant to Section 1.80 of the
Commission's rules, within thirty (30) days of the release date of
this Notice of Apparent Liability for Forfeiture, Qwest SHALL PAY the
full amount of the proposed forfeiture or SHALL FILE a written
statement seeking reduction or cancellation of the proposed
14. Payment of the forfeiture must be made by check or similar instrument,
payable to the order of the Federal Communications Commission. The
payment(s) must include the NAL/Account Numbers and FRN Numbers
referenced above. Payment by check or money order may be mailed to
Federal Communications Commission, P.O. Box 979088, St. Louis, MO
63197-9000. Payment by overnight mail may be sent to U.S. Bank -
Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St.
Louis, MO 63101. Payment by wire transfer may be made to ABA Number
021030004, receiving bank TREAS/NYC, and account number 27000001. For
payment by credit card, an FCC Form 159 (Remittance Advice) must be
submitted. When completing the FCC Form 159, enter the NAL/Account
number in block number 23A (call sign/other ID), and enter the letters
"FORF" in block number 24A (payment type code). Qwest will also send
electronic notification on the date said payment is made to
Johnny.Drake@fcc.gov. Requests for full payment under an installment
plan should be sent to: Chief Financial Officer -- Financial
Operations, 445 12th Street, S.W., Room 1-A625, Washington, D.C.
20554. Please contact the Financial Operations Group Help Desk at
1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions
regarding payment procedures.
15. The response, if any, must be mailed both to the Office of the
Secretary, Federal Communications Commission, 445 12th Street, SW,
Washington, DC 20554, ATTN: Enforcement Bureau - Telecommunications
Consumers Division, and to Marcy Greene, Deputy Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, SW, Washington, DC 20554,
and must include the NAL/Acct. Nos. referenced in the caption.
16. 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 practices; 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
17. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture shall be sent by Certified Mail Return Receipt
Requested and First Class Mail to Tiffany West Smink, Senior Attorney,
Qwest, 1801 California Street, 10th Floor, Denver, CO 80202.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
47 C.F.R. S:54.418.
See DTV Consumer Education Initiative, Report and Order, 23 FCC Rcd 4134
(2008) ("DTV Consumer Education Initiative Report and Order").
The Lifeline/Link-Up programs provide discounts off the initial
installation and monthly costs of telephone service to millions of
low-income consumers. Id. at 4162.
47 C.F.R. S:54.418(a).
Id. at S:54.418(b).
Id. at S:54.418(c).
The DTV transition notice requirements for ETCs went into effect 30 days
after the effective date of Section 54.418. That date was March 31, 2008.
See Media Bureau Announces Effective Date for the Rules in the DTV
Consumer Education Initiative, Public Notice, DA 08-757 (Media Bur. rel.
March 28, 2008).
Letter from Colleen Heitkamp, Chief, Telecommunications Consumers
Division, Enforcement Bureau, Federal Communications Commission to Melissa
Newman, Vice President Federal Regulatory Affairs,, Qwest Corporation
dated July 2, 2008 ("LOI").
Letter from Tiffany West Smink, Senior Attorney, Qwest Corporation., to
Robert Somers, Senior Attorney, and Colleen Heitkamp, Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, dated August 1, 2008 at 3 ("LOI Response").
Id. The states involved were Arizona, Colorado, Idaho, Montana, New
Mexico, Oregon, Utah, Washington, and Wyoming.
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1); see also 47 U.S.C. S:
503(b)(1)(D) (forfeitures for violation of 14 U.S.C. S: 1464).
47 U.S.C. S: 312(f)(1).
H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982) ("This provision
[inserted in Section 312] defines the terms 'willful' and repeated' for
purposes of section 312, and for any other relevant section of the act
(e.g., section 503).... As defined ... 'willful' means that the licensee
knew that he was doing the act in question, regardless of whether there
was an intent to violate the law. "Repeated" means more than once, or
where the act is continuous, for more than one day. Whether an act is
considered to be 'continuous' would depend upon the circumstances in each
case. The definitions are intended primarily to clarify the language in
sections 312 and 503, and are consistent with the Commission's application
of those terms ...").
See, e.g., Application for Review of Southern California Broadcasting Co.,
Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (1991) ("Southern
California Broadcasting Co.").
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362, para.
10 (2001) ("Callais Cablevision, Inc.") (issuing a Notice of Apparent
Liability for, inter alia, a cable television operator's repeated signal
Southern California Broadcasting Co., 6 FCC Rcd at 4388, para. 5; Callais
Cablevision, Inc., 16 FCC Rcd at 1362, para. 9.
47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
7591, para. 4 (2002).
LOI Response at 3.
47 U.S.C. S: 503(b)(2)(B). See also 47 C.F.R. S: 1.80(b)(2); Amendment of
Section 1.80(b) of the Commission's Rules, Order, 19 FCC Rcd 10945 (2004).
We note that effective September 2, 2008, the maximum forfeiture amount
allowed increased to $150,000 for each violation or each day of a
continuing violation, up to a maximum of $1.5 million for a single act or
failure to act. Inflation Adjustment of Maximum Forfeiture Penalties,
Final Rule, 73 Fed. Reg. 44663, 44664 (2008). Because the apparent
violations here occurred prior to the effective date of the inflationary
adjustment, the increased forfeiture amounts do not apply.
47 U.S.C. S: 503(b)(2)(D); The Commission's Forfeiture Policy Statement
and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture
Guidelines, Report and Order, 12 FCC Rcd 17087, 17100-01 para. 27 (1997)
(Forfeiture Policy Statement), recon. denied, 15 FCC Rcd 303 (1999).
See Forfeiture Policy Statement, 12 FCC Rcd at 17115.
Forfeiture Policy Statement, 12 FCC Rcd at 17099.
DTV Education Initiative Report and Order, 23 FCC Rcd at 4162.
Id. at 4162.
Id. at 4163.
See, e.g., Invision Industries, Inc., Notice of Apparent Liability for
Forfeiture, FCC 08-187 (rel. Aug. 18, 2008) (proposing a $324,000
forfeiture for the unlawful importation of 4,115 analog-only television
Id. at P:P: 19-20.
See Funai Corporation, Inc., Notice of Apparent Liability for Forfeiture,
22 FCC Rcd 19663 (2007) ("Funai NAL") (subsequent history omitted).
Using the formula described above, Qwest's proposed forfeiture liability
is derived as follows: (8,500 * $1.00) + (8,500 * $2.00) + (8,500 * $3.00)
47 U.S.C. S: 503(b).
47 U.S.C. S: 1.80(f)(4).
47 C.F.R. S:S: 0.111, 0.311.
47 C.F.R. S: 1.80.
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Federal Communications Commission DA 08-2093
Federal Communications Commission DA 08-2093