Click here for Adobe Acrobat version
Click here for Microsoft Word version
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
Federal Communications Commission
Washington, D.C. 20554
File No.: EB-10-SE-075
In the Matter of )
NAL/Acct. No.: 201132100030
SmartLabs, Inc. )
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: June 1, 2011 Released: June 1, 2011
By the Acting Chief, Spectrum Enforcement Division, Enforcement Bureau:
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
SmartLabs, Inc. ("SmartLabs") apparently liable for a forfeiture in
the amount of ten thousand dollars ($10,000) for willful and repeated
violations of section 302(b) of the Communications Act of 1934, as
amended ("Act"), and section 2.803(a)(1) of the Commission's rules
("Rules"). The apparent violations involve SmartLabs' marketing of an
unauthorized radio frequency device.
2. By letter of inquiry ("LOI") dated May 21, 2010, the Enforcement
Bureau's Spectrum Enforcement Division ("Division") initiated an
investigation into whether SmartLabs had marketed the INSTEON(R)
RemoteLinc(TM) Wireless Remote Control Model #2440 ("RemoteLinc")
prior to authorization of this device in accordance with the
Commission's equipment authorization requirements. Information before
the Division indicated that the RemoteLinc was labeled with FCC
Identification number ("FCC ID") SBP2440, an FCC ID that was not found
in the FCC's equipment authorization database.
3. SmartLabs responded to the LOI on June 17, 2010. In its LOI Response,
SmartLabs indicated that it began manufacturing and marketing the
RemoteLinc in the United States with a label specifying the FCC ID as
SBP2440 in May 2007. SmartLabs also indicated that, within the past
year, it sold units of its RemoteLinc in the United States. SmartLabs
stated that after receiving the LOI, it determined that the RemoteLinc
was not listed in the FCC's equipment authorization database and that
it did not have a grant of certification when it began marketing the
device. According to SmartLabs, around the time the RemoteLinc was
nearing completion of testing and ready for sale, several key
technical, project management, and executive leadership employees
directly involved with the project left the company. SmartLabs
asserted that the new team did not adequately understand the testing
process and erroneously believed that once the device passed the lab
testing, the company could start shipping the product and that the
grant of certification would come later. SmartLabs also asserted that
its testing lab informed it that the certification process stalled
"due to administrative issues." SmartLabs stated that its testing lab
has subsequently supplied the original test report (dated June 6,
2007) and confirmed that the RemoteLinc met all applicable technical
requirements. Finally, SmartLabs indicated that it received a grant of
equipment certification for the RemoteLinc under FCC ID SBP2440 on
June 3, 2010.
A. Marketing of Unauthorized Equipment
4. Section 302(b) of the Act provides that "[n]o 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:
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 that is 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 S:
2.925 and other relevant sections in this chapter [emphasis added].
As an intentional radiator, the RemoteLinc is required by section
15.201(b) of the Rules to be approved prior to marketing through the
equipment certification procedures described in sections 2.1031 - 2.1060
of the Rules.
5. SmartLabs admits that it manufactured and marketed units of its
RemoteLinc device in the United States within the past year. It
appears that these violations were repeated since SmartLabs indicates
that the marketing of these devices has continued since May 2007.
SmartLabs further admits that the device was not certified prior to
marketing in the United States. Accordingly, we find that SmartLabs
apparently marketed an uncertified radio frequency device in willful
and repeated violation of section 302(b) of the Act and section
2.803(a)(1) of the Rules.
B. Proposed Forfeiture
6. Section 503(b) of the Act authorizes the Commission to assess a
forfeiture for each willful or repeated violation of the Act or of any
Rule, regulation, or order issued by the Commission under the Act. In
exercising such authority, we are required 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
7. Pursuant to the Commission's Forfeiture Policy Statement and section
1.80 of the Rules, the base forfeiture amount for the marketing of
unauthorized equipment is $7,000. The Commission has found that the
marketing of each separate unauthorized or non-compliant model
constitutes a separate violation subject to the $7,000 base forfeiture
amount. Section 503(b)(2)(D) of the Act authorizes the Commission to
assess a maximum forfeiture of $16,000 for each violation, or each day
of a continuing violation, up to a statutory maximum forfeiture of
$112,500 for any single continuing violation.
8. The record establishes that within the past year, SmartLabs marketed
one model of an uncertified radio frequency device within the United
States. Consequently, we begin with a base forfeiture of $7,000 for
SmartLabs' marketing of one model of an authorized radio frequency
device. That base forfeiture amount is, however, subject to an upward
9. Having considered the statutory factors enumerated above, we conclude
that an upward adjustment of the base forfeiture amount is warranted.
We find that the violations in this case are particularly troubling
given their nature and extended duration. We note that by failing to
exercise appropriate diligence and marketing the RemoteLinc device
with a label specifying an FCC ID that was not found in the FCC's
equipment authorization database, SmartLabs incorrectly led consumers
to believe that its device had received the necessary FCC
certification. Thus, SmartLabs' marketing of its RemoteLinc device
affirmatively misled consumers. Moreover, we take into account the
fact that SmartLabs' violations have continued for more than three
10. Accordingly, we propose a forfeiture of $10,000 for SmartLabs'
apparent willful and repeated violation of section 302(b) of the Act
and section 2.803(a)(1) of the Rules. We conclude that no mitigating
factors have been presented warranting a downward adjustment of the
proposed forfeiture. SmartLabs explained that it lacked understanding
of the Commission's equipment authorization procedures and failed to
follow up with its testing lab when the certification process for the
RemoteLinc stopped. We do not believe that these circumstances warrant
any downward adjustment of the proposed forfeiture amount. It is well
established that a violator's lack of knowledge or erroneous beliefs
are not a mitigating factor warranting a forfeiture reduction.
Accordingly, we conclude that SmartLabs is apparently liable for a
$10,000 forfeiture for marketing an uncertified radio frequency device
in willful and repeated violation of section 302(b) of the Act and
section 2.803(a)(1) of the Rules.
IV. ORDERING CLAUSES
11. Accordingly, IT IS ORDERED that, pursuant to section 503(b) of the Act
and sections 0.111, 0.311, and 1.80 of the Commission's Rules,
SmartLabs, Inc., is hereby NOTIFIED of this APPARENT LIABILITY FOR A
FORFEITURE in the amount of ten thousand dollars ($10,000) for
marketing an uncertified radio frequency device in willful and
repeated violation of section 302(a) of the Act and section
2.803(a)(1) of the Rules.
12. IT IS FURTHER ORDERED that, pursuant to section 1.80 of the
Commission's rules within thirty (30) days after the release date of
this Notice of Apparent Liability for Forfeiture, SmartLabs, Inc.,
SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a
written statement seeking reduction or cancellation of the proposed
13. 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/Account Number and FRN 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). 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. SmartLabs, Inc. will also send
electronic notification on the date said payment is made to Kathy
Harvey at Kathy.Harvey@fcc.gov and to Neal McNeil at
14. The written statement seeking reduction or cancellation of the
proposed forfeiture, if any, must include a detailed factual statement
supported by appropriate documentation and affidavits pursuant to
sections 1.80(f)(3) and 1.16 of the Rules. The written statement 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. The statement should also
be emailed to Kathy Harvey at Kathy.Harvey@fcc.gov and Neal McNeil at
15. 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 ("GAAP"); 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.
16. 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 regular mail, to Dan Cregg, Vice President Engineering,
SmartLabs, Inc., 16542 Millikan Avenue, Irvine, CA 92606.
FEDERAL COMMUNICATIONS COMMISSION
John D. Poutasse
Acting Chief, Spectrum Enforcement Division
47 U.S.C. S: 302a(b).
47 C.F.R. S: 2.803(a)(1).
See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission, to Dan Cregg, Vice
President Engineering, SmartLabs, Inc. (May 21, 2010).
See Letter from John Lockyer, Senior Product Development Manager,
SmartLabs, Inc. to Kathryn S. Berthot, Chief, Spectrum Enforcement
Division, Enforcement Bureau, Federal Communications Commission (June 17,
2010) ("LOI Response").
LOI Response at 3-4.
Id. at 3. SmartLabs requested confidential treatment of the number of
units of the RemoteLinc sold in the United States, the dates SmartLabs
received shipments of these devices in the United States, and information
regarding the devices returned to SmartLabs pursuant to section 0.459 of
the Rules, 47 C.F.R. S: 0.459. See Letter from John Lockyer, Senior
Product Development Manager, SmartLabs, Inc., to Kathryn S. Berthot,
Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal
Communications Commission (June 17, 2010) ("Request for Confidentiality").
We need not disclose this information in the context of this particular
NAL, and consequently will defer action on the Request for
Confidentiality. See 47 C.F.R. S: 0.459(d)(3).
LOI Response at 1, 6.
Id. at 6.
Id. at 2.
Id. at 2. We note that this grant applies to devices manufactured and
marketed by SmartLabs beginning June 3, 2010 and does not negate any
equipment marketing violations by SmartLabs prior to that date.
47 C.F.R. S: 2.801 defines a radiofrequency device as "any device which in
it its operation is capable of emitting radiofrequency energy by
radiation, conduction, or other means."
An intentional radiator is "[a] device that intentionally generates and
emits radio frequency energy by radiation or induction." 47 C.F.R. S:
47 C.F.R. S: 15.201(b).
A certification is an equipment authorization issued by the Commission,
based on representations and test data submitted by the applicant. See 47
C.F.R. S: 2.907(a).
47 C.F.R. S:S: 2.1031 - 2.1060.
Marketing, as defined in 47 C.F.R. S: 2.803(e)(4), "includes sale or
lease, or offering for sale or lease, including advertising for sale or
lease, or importation, shipment, or distribution for the purpose of
selling or leasing or offering for sale or lease."
Section 312(f)(1) of the Act, 47 U.S.C. S: 312(f)(1), which applies to
violations for which forfeitures are assessed under section 503(b) of the
Act, 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., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388
(1991) ("Southern California"); see also Telrite Corporation, Notice of
Apparent Liability for Forfeiture, 23 FCC Rcd 7231, 7237 (2008); Regent
USA, Notice of Apparent Liability for Forfeiture, 22 FCC Rcd 10520, 10523
(2007); San Jose Navigation, Inc., Forfeiture Order 22 FCC Rcd 1040, 1042
Section 312(f)(2) of the Act provides that "[t]he term `repeated', ...
means the commission or omission of such act more than once or, if such
commission or omission is continuous, for more than one day." 47 U.S.C. S:
312(f)(2). See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana,
Notice of Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359,
1362 (2001) ("Callais Cablevision") (issuing a Notice of Apparent
Liability for, inter alia, a cable television operator's repeated signal
47 U.S.C. S: 503(b).
47 U.S.C. S: 503(b)(2)(E). See also 47 C.F.R. S: 1.80(b)(4), Note to
paragraph (b)(4): Section II. Adjustment Criteria for Section 503
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 (1997), recon. denied 15 FCC Rcd 303 (1999).
47 C.F.R. S: 1.80.
See, e.g., Behringer, 21 FCC Rcd at 1827; ACR Electronics, Inc., Notice of
Apparent Liability for Forfeiture, 19 FCC Rcd 22293, 22302 (2004),
forfeiture ordered, 21 FCC Rcd 3698 (2006); Samson Technologies, Inc.,
Notice of Apparent Liability for Forfeiture, 19 FCC Rcd 4221, 4225 (2004),
consent decree ordered, 19 FCC Rcd 24509 (2004).
Consistent with section 503(b)(6) of the Act, 47 U.S.C. S: 503(b)(6), we
may consider the fact that SmartLabs' misconduct occurred over an extended
period to place "the violations in context, thus establishing the
[company's] degree of culpability and the continuing nature of the
violations. See e.g., Roadrunner, 15 FCC Rcd at 9671-72 (considering the
fact the violations began in 1996 to establish the context for determining
an appropriate forfeiture amount for the violations that were subject to a
forfeiture from June 1, 1998 forward). Thus, while we may consider the
fact that SmartLabs' conduct commenced more than one year ago, the
forfeiture amount we propose herein relates only to SmartLabs' apparent
violations that have occurred within the past year.
See, e.g., Profit Enterprises, Inc., 8 FCC Rcd 2846, 2846 (1993) (denying
the mitigation claim of a manufacturer/distributor who thought that the
equipment certification and marketing requirements were inapplicable,
stating that its "prior knowledge or understanding of the law is
unnecessary to a determination of whether a violation existed ...
ignorance of the law is [not] a mitigating factor"); Lakewood Broadcasting
Service, Inc., 37 FCC 2d 437, 438 (1972) (denying the mitigation claim of
a broadcast licensee who asserted an unfamiliarity with the station
identification requirements, stating that licensees are expected "to know
and conform their conduct to the requirements of our rules"); Kenneth Paul
Harris, Sr., 15 FCC Rcd 12933, 12935 (Enf. Bur. 2000) (denying a
mitigation claim of a broadcast licensee, stating that its ignorance of
the law did not excuse the unauthorized transfer of the station); Maxwell
Broadcasting Group, Inc., 8 FCC Rcd 784, 784 (MMB 1993) (denying a
mitigation claim of a noncommercial broadcast licensee, stating that the
excuse of "inadverten[ce], due to inexperience and ignorance of the rules
... are not reasons to mitigate a forfeiture" for violation of the
47 U.S.C. S: 503(b), 47 C.F.R. S:S: 0.111, 0.311, 1.80.
(Continued from previous page)
Federal Communications Commission DA 11-976
Federal Communications Commission DA 11-976