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                           Before the
                Federal Communications Commission
                     Washington, D.C. 20554

In the Matter of                   )
Skywave Electronics, Inc.               )                    File 

No.  EB-00-AT-289
Rockford, Illinois                 )                    NAL/Acct. 

No.  X3248003

                         FORFEITURE ORDER

Adopted:  December 12, 2000             Released:   December  14, 


By the Chief, Enforcement Bureau:

                        I.  INTRODUCTION

     1.   In  this  Forfeiture  Order  (``Order''),  we  issue  a 
monetary forfeiture  in  the  amount of  seven  thousand  dollars 
($7,000) against  Skywave  Electronics,  Inc.  (``Skywave'')  for 
violating Section  302  of the  Communications  Act of  1934,  as 
amended (``Act'')1 and  Section 2.907 of  the Commission's  Rules 
(``Rules''),2 by marketing a non-compliant device for use in  the 
FM broadcast band.    The noted violations  involve the sale  and 
distribution of at  least 11  FM transmitters  that exceeded  the 
power limitations of Skywave's FCC authorization. 

     2.   On May 9, 2000, the  District Director of the  Atlanta, 
Georgia Field Office  issued a Notice  of Apparent Liability  for 
Forfeiture (``NAL'')  in the  amount  of seven  thousand  dollars 
($7,000).3  Skywave filed a response on May 18, 2000. 

                         II.  BACKGROUND

     3.   Skywave  holds  a  Grant  of  Equipment   Authorization 
(``Authorization'') for  the manufacture  and distribution  of  a 
low-power   transmitter   device,   the   SKY-2000   Digital   FM 
Transmitter.4  On August  6, 1999, an  agent in the  Commission's 
Denver Field Office  investigated a  complaint of  an illegal  FM 
broadcast station.   In the  course  of that  investigation,  the 
agent found that the station was using Skywave's SKY-2000 digital 
FM transmitter.   Field strength  measurements taken  during  the 
investigation showed that the SKY-2000 was operating at 29  times 
the permitted level  authorized by Section  15.239 of the  Rules5 
for a  non-licensed low-powered  transmitter.  Subsequently,  the 
Commission's  Office  of  Engineering  and  Technology  (``OET'') 
requested and obtained two sample transmitters from Skywave to be 
evaluated for compliance with  its Authorization, and found  that 
one of the units failed  to conform to the emission  requirements 
of the  Authorization.   OET  issued a  citation  to  Skywave  on 
October 5, 1999 for marketing a non-compliant device.
     4.   On September  28, 1999,  agents from  the  Commission's 
Atlanta Field Office began an investigation into the marketing of 
Skywave low power FM  transmitters, following local news  reports 
featuring the transmitters.   Agents found several  non-compliant 
SKY-2000 FM  transmitters  distributed by  Skywave  in  operation 
throughout the  Atlanta metropolitan  area.  During  a  telephone 
conversation that same day, the  president of Skywave advised  an 
agent of the  Atlanta Field  Office that all  units shipped  from 
Skywave after July 13, 1999  were in compliance with the  revised 
Authorization issued July 13, 1999.  However, FCC agents obtained 
evidence that several non-compliant units were shipped after July 
13, 1999.

     5.   In its response  to the NAL,  Skywave acknowledges  its 
non-compliance.  It asserts  that the company  sought to  rectify 
the problems promptly after  receiving notification that  certain 
units were non-compliant by  notifying dealers and recalling  old 
units for testing and retrofitting to bring them into compliance.  
Skywave contends that it did not understand all that was expected 
of it as the  certification holder for the  product, but that  it 
has acquired greater  knowledge of  the Commission's  rules as  a 
result  of  this  incident.   Skywave  asserts  that  it  is  the 
international distributor for, and  not the manufacturer of,  the 
SKY-2000  transmitter,  and  that   it  did  not  willfully   and 
repeatedly distribute  the  product  knowing  that  it  was  over 
powered.  It concedes  that it  may have erred  by informing  the 
Atlanta Field  Office that  only  compliant SKY-2000  units  were 
shipped after July 13, 1999, but  notes that the sale date for  a 
transmitter does not always reflect the date the merchandise  was 
shipped from Skywave, as the  products are sold through  dealers.  
Skywave  also  seeks  a  waiver  or  dramatic  reduction  of  the 
forfeiture  due  to  its   assertions  regarding  its   financial 
circumstances, its understanding of the rules, and its efforts to 
correct the problem.  In support  of its inability to pay  claim, 
Skywave has submitted copies of its income tax returns for  1997, 
1998 and 1999, as well as  an income statement and balance  sheet 
for 1998 and profit and loss statement for 1999.  

                        III.  DISCUSSION

     6.   Both the Act and the  Rules prohibit the sale or  offer 
for sale of radio frequency devices,  as well as the shipment  or 
distribution for the purpose of selling such devices, unless  the 
device has first been properly authorized, identified and labeled 
in accordance with  the Commission's  Rules.6  The  Authorization 
was an equipment certification, which is based on representations 
and test data submitted by the company, and attaches to all units 
subsequently marketed by the grantee  which are identical to  the 
sample tested.7 Although  Skywave had  obtained an  authorization 
for and labeled its transmitters as required under the Rules,  at 
least 11 of the transmitters actually distributed by the  company 
in the greater Atlanta area did  not conform to the terms of  the 
Authorization.   Skywave's  assertion  that  it  did  not   fully 
understand its  obligations as  the holder  of the  Authorization 
will  not  excuse   this  violation.   As   the  holder  of   the 
Authorization, it is responsible for the compliance of its  radio 
frequency devices with the  applicable standards.  See 47  C.F.R. 
2.909.  Further, although Skywave may have taken prompt  action 
to rectify the problems, remedial action to correct a  violation, 
while  commendable,  will  generally  not  nullify  a  forfeiture 
penalty.  See Station KGVL, Inc., 42 FCC 2d 258, 259 (1993).  

     7.   Skywave's contention  that  it merely  distributes  the 
device does not excuse  the offense.  The  violation at issue  is 
the sale and distribution of FM transmitters that did not  comply 
with the  terms of  Skywave's Authorization,  despite proper  FCC 
identification  and  labeling.   As  noted  in  the  NAL,   these 
violations were willful and repeated  under the Act because  they 
were not caused by accident or mistake, and because more than one 
non-compliant unit was sold and distributed by Skywave.8

     8.   The Commission has  previously held  that a  licensee's 
gross income is generally  the best indicator  of its ability  to 
pay a forfeiture.  Although  net losses may  be relevant in  some 
cases, if gross revenues are sufficiently great, the fact that  a 
business is operating at a loss  does not by itself mean that  it 
cannot afford to pay a forfeiture.9   In support of its claim  of 
inability to pay, Skywave has  submitted financial data for  1997 
through 1999,  and   has requested  that  we keep  its  financial 
information confidential.   After  reviewing the  financial  data 
submitted, we find no evidence  in Skywave's response that  would 
support a reduction of the forfeiture amount.   

                      IV.  ORDERING CLAUSES

     9.   Accordingly, IT IS  ORDERED THAT,  pursuant to  Section 
503(b) of the Act,10 and Sections 0.111, 0.311 and 1.80(f)(4)  of 
the Rules,11 Skywave Electronics, Inc., IS LIABLE FOR A  MONETARY 
FORFEITURE in the amount $7,000  for violating the provisions  of 
Section 302 of  the Act  and Section  2.907 of  the Rules,  which 
require  radio  frequency  devices  to  be  properly  authorized, 
identified, and labeled in accordance with the Commission's Rules 
prior to their  sale, offer for  sale, shipment, or  distribution 
for sale, and provide that  all products distributed pursuant  to 
Commission certification be  identical to the  sample upon  which 
the grant of certification was based.

     10.  Payment of the forfeiture shall  be made in the  manner 
provided for in Section 1.80  of the Commission's Rules12  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.13  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 the NAL/Acct. No. referenced above.  Requests 
for full payment  under an  installment plan should  be sent  to: 
Chief, Credit and Debt Management Center, 445 12th Street,  S.W., 
Washington, D.C. 20554.14

     11.       IT IS FURTHER  ORDERED that a  copy of this  Order 
shall be  sent  by Certified  Mail  Return Receipt  Requested  to 
Skywave Electronics,  Inc. at  1205 N.  Horace Avenue,  Rockford, 
Illinois 61101.


                         David H. Solomon
                         Chief, Enforcement Bureau


     1 47 U.S.C.  302.

     2 47 C.F.R.  2.907.

     3 Notice  of  Apparent  Liability  for  Forfeiture,  NAL/No. 
X3248003 (Enf. Bur., Atlanta Office, released May 9, 2000).

     4 FCC  Identifier  NX3SKY2000.   The  grant  was  originally 
issued  on  August  18,  1998,  and  was  updated  to  reflect  a 
modification of the device on July 13, 1999.

     5 47 C.F.R. 15.239.

6     47 U.S.C.  302(b) and 47 C.F.R. 2.803(a)(1).

     7 See 47 C.F.R.  2.907.

     8 Section 312(f)(1) of the Act, 47 U.S.C.  312(f)(1), which 
also applies to Section 503(b) of the Act, provides:  ``the  term 
`willful,' when used with reference to the commission or omission 
of any  act, 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 or  by a  treaty ratified  by the  United 
States.''  See Southern  California Broadcasting Co.,  6 FCC  Rcd 
4387 (1991).  Section 312(f)(1) of the Act further provides  that 
``[t]he  term  `repeated,'  when  used  with  reference  to   the 
commission or  omission  of  any act,  means  the  commission  or 
omission of such act more than once ....''

     9 See PJB Communications of Virginia, Inc., 7 FCC Rcd  2088, 
2088-89 (1992)  ($8,000  forfeiture  not  excessive  where  gross 
income was $395,469; and net loss information submitted reflected 
only expected  losses).  See  also The  Hinton Telephone  Co.  of 
Hinton, Oklahoma, 8 FCC Rcd 5176, 5177 (1993) ($5,000  forfeiture 
not excessive where gross revenues were over $2 million,  despite 
negative net income of $46,000).  

     10 47 U.S.C.  503(b).

     11 47 C.F.R.  0.111, 0.311, 1.80(f)(4).

     12 47 C.F.R.  1.80.

     13 47 U.S.C.  504(a).

     14 See 47 C.F.R.  1.1914.