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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
AT&T Wireless Services, Inc. ) File No. EB-02-TS-018
Washington, DC ) NAL/Acct. No. 200232100002
) FRN 0006-1660-29
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: May 9, 2002 Released: May 20, 2002
By the Commission:
I. INTRODUCTION
1. This Notice of Apparent Liability for Forfeiture
(``NAL'') follows an investigation into whether AT&T Wireless
Services, Inc. (``AT&T Wireless'') violated the Enhanced 911
(``E911'') Phase II rules1 with respect to its Global System
for Mobile Communications/General Packet Radio Service network
(``GSM network'') and whether AT&T Wireless made inaccurate
statements in its request for a waiver of the E911 Phase II
rules for its GSM network. Based on this investigation, we
find that AT&T Wireless apparently (1) failed to begin selling
and activating location-capable handsets by October 1, 2001,
in willful and repeated violation of Section 20.18(g)(1)(i) of
the Commission's Rules (``Rules''), without even requesting a
waiver;2 (2) failed to implement any network or infrastructure
upgrades necessary to provide E911 Phase II service and begin
providing service within six months of a valid request by a
Public Safety Answering Point (``PSAP'') or by October 1,
2001, whichever is later, in willful and repeated violation of
Section 20.18(g)(2) of the Rules, again without even
requesting a waiver;3 (3) failed to notify the Commission
within 30 days that information contained in its E911 waiver
request was no longer substantially accurate or complete in
all respects, in willful and repeated violation of Section
1.65 of the Rules;4 and (4) failed to make a supplementary
filing notifying the Commission that it was not going to
comply with the deployment schedule requirements set forth in
the E911 rules in willful and repeated violation of the
Commission order granting it a waiver of the E911 rules for
its GSM network. For the reasons discussed below, we find
AT&T Wireless apparently liable for a forfeiture in the amount
of two million, two hundred thousand dollars ($2,200,000).
II. BACKGROUND
2. Under Phase II of the FCC's wireless E911 rules,
wireless carriers are required to provide to the designated
PSAP the location of wireless 911 callers, a capability known
as Automatic Location Identification (``ALI''), using handset-
based or network-based location technologies.5 The rules
provide that handset-based location technologies must provide
the location of wireless 911 calls with an accuracy of 50
meters for 67 percent of calls and 150 meters for 95 percent
of calls.6 Carriers using a handset-based solution must begin
to offer one entry-level model with location capability no
later than October 1, 2001, and must ensure that 95 percent of
their customers have location-capable handsets no later than
December 31, 2005.7 In addition, within six months of a valid
PSAP request or by October 1, 2001, whichever is later, a
carrier using a handset-based solution must implement the
network and infrastructure upgrades necessary to provide E911
Phase II service and begin delivering ALI to the PSAP.8
3. For carriers choosing a network-based solution, the
rules provide that the technology must report the location of
wireless 911 calls with an accuracy of 100 meters for 67
percent of calls and 300 meters for 95 percent of calls.9 A
carrier using a network-based solution must provide ALI to 50
percent of its coverage area, or 50 percent of its population,
beginning on October 1, 2001 or within six months of a PSAP
request, whichever is later, and to 100 percent of callers
within 18 months of that request or by October 1, 2002,
whichever is later.10 Wireless carriers subject to the rules
were directed to report their Phase II plans, including the
technologies they plan to use, by November 9, 2000.11
4. On November 9, 2000, AT&T Wireless filed an E911 Phase
II report in which it stated that it was not in a position to
choose between a handset and network overlay solution and that
it would file an amended report.12 In its Amended E911 Phase
II Report, filed December 9, 2000, AT&T Wireless stated that
it planned to overlay a GSM platform to its existing Time
Division Multiple Access network.13 AT&T Wireless also stated
that it intended to implement a hybrid network- and handset-
based technology called Enhanced Observed Time Difference of
Arrival (``E-OTD'') across its GSM network and that it would
make E-OTD available immediately upon deployment of its GSM
network.14
5. On April 4, 2001, AT&T Wireless filed an E911 Phase II
implementation plan and request for waiver of the E911 Phase
II rules to permit it to deploy E-OTD throughout its GSM
network.15 In its waiver request, AT&T Wireless asserted that
E-OTD would be implemented simultaneously with the market-by-
market rollout of the GSM network and that it would provide E-
OTD-capable handsets to GSM subscribers when the GSM network
comes online so that the GSM network is Phase II capable from
day one.16 However, AT&T Wireless stated that while E-OTD
ultimately will meet and even exceed the Commission's accuracy
requirements for handset-based location technologies, E-OTD
technology will not initially meet the accuracy
requirements.17 Accordingly, AT&T Wireless requested relief
from the location accuracy requirements for handset-based
solutions set forth in Section 20.18(h) of the Rules to permit
the deployment of E-OTD technology for its GSM network.
6. Subsequently, in several related pleadings, AT&T
Wireless reaffirmed that its GSM network would be E-OTD
capable from the date of deployment. In its May 21, 2001
reply comments on the waiver request, AT&T Wireless stated
that ``in contrast to VoiceStream, AT&T has the unique
opportunity to make E-OTD available in its GSM network as that
network is deployed so that AT&T will not need to use an
interim solution (such as VoiceStream's NSS) in order to
accommodate legacy handsets'' and that it ``is working with
its vendors to ensure that the GSM handsets sold to AT&T's
subscribers will be E-OTD location capable from day one.''18
On May 10, 2001, the Wireless Telecommunications Bureau issued
an order which, among other things, directed AT&T Wireless to
provide further information on its GSM rollout, including
``any information establishing that AT&T's GSM network will be
100% compliant with the Commission's E911 Phase II Location
Technology Implementation Rules from the date of deployment of
the GSM network.''19 In its May 31, 2001 partial response to
this order, AT&T Wireless stated that it ``plans to implement
E-OTD simultaneously with the market-by-market rollout of the
GSM network so that E-OTD will be available to all GSM
subscribers from day one.''20 On August 6, 2001, AT&T
Wireless submitted a letter to the Wireless Telecommunications
Bureau to provide specific milestones for achieving compliance
with the E911 Phase II accuracy requirements in connection
with its waiver request and in this letter reiterated that
``E-OTD will be implemented along with the market-by-market
roll-out of AWS's GSM network.''21
7. On October 2, 2001, the Commission adopted an order
approving AT&T Wireless's plan to deploy E-OTD throughout its
GSM network and granting AT&T Wireless a temporary,
conditional waiver of the accuracy requirements for handset-
based location technologies to permit implementation of this
plan (``GSM Waiver Order'').22 The GSM Waiver Order relied
heavily on AT&T Wireless's representations that its GSM
network would be E-OTD capable from the date of deployment.
Specifically, the Commission found that AT&T Wireless's
implementation plan for its GSM network was justified by the
overall benefits to public safety of AT&T Wireless's proposed
location solution, ``particularly its ability to deploy E-OTD
concurrently with the deployment of its new GSM network.''23
Moreover, the Commission found that AT&T Wireless's
``inability to meet the handset-based accuracy standards is
offset by the fact that ALI-capable handsets will be rapidly
deployed in the GSM network and that all GSM handsets will be
E-OTD-capable,'' thus ensuring that there will be no legacy
handset problem.24 The Commission granted AT&T Wireless's
waiver request subject to the following four specific
conditions: (1) that, effective October 1, 2001, all E-OTD-
capable handsets provide ALI with an accuracy of 100 meters/67
percent of calls and 300 meters/95 percent of calls; (2) that
all E-OTD-capable handsets sold and activated on or after
October 1, 2003 comply with an accuracy of 50 meters/67
percent of calls and 150 meters/95 percent of calls; (3) that
AT&T Wireless file Quarterly Reports on its progress and
compliance with the terms and conditions of its implementation
plan and the E911 rules beginning February 1, 2002 and
continuing through November 1, 2003; and (4) that, in the
event that its E-OTD solution fails to comply with the
accuracy requirements by October 1, 2003, AT&T Wireless
propose a solution that does comply with those requirements
and the other applicable Phase II rules.25 The Commission
also stated that AT&T Wireless remains subject to all other
requirements of the E911 rules apart from those specifically
modified in the GSM Waiver Order.26
8. In December 2001, after receiving reports from various
sources that AT&T Wireless had begun deploying its GSM network
but was not offering E-OTD-capable handsets, Commission staff
requested a meeting with AT&T Wireless. On December 21, 2001,
Commission staff met with AT&T Wireless. At this meeting,
AT&T Wireless acknowledged that it was selling and
distributing handsets that are not E-OTD-capable for use on
its GSM network and stated that it had been unable to deploy
E-OTD-capable handsets due to vendor delays.
9. On January 15, 2002, the Enforcement Bureau sent a
letter of inquiry (``LOI'') to AT&T Wireless, requesting
additional information concerning AT&T Wireless's deployment
of its GSM network and its sale and distribution of GSM
handsets that are not E-OTD-capable.27 AT&T Wireless
submitted a response to the LOI on February 4, 2002,28 and
supplemented this response on February 19, 2002.29 In its
response to the LOI, AT&T Wireless stated that it began
providing GSM service and selling and distributing non-E-OTD-
capable handsets for use on its GSM network in Seattle on July
17, 2001.30 AT&T Wireless stated that its July 2001 launch of
GSM service in Seattle was limited to ``enterprise'' customers
(i.e., customers who are part of a larger enterprise or
business with a designated sales agent) and that non-E-OTD-
capable handsets were not available in retail centers until
the commercial launch of its GSM network in four markets on
October 2, 2001. AT&T Wireless also indicated that it was
currently providing GSM service with non-E-OTD-capable
handsets in 11 markets: Seattle, Portland, Las Vegas,
Phoenix, Detroit, South Florida, Lansing, Grand Rapids,
Chicago, Indianapolis, and Kansas City.31
10. AT&T Wireless asserted in its LOI response that it is
selling handsets that are not E-OTD-capable for use on its GSM
network because its vendors were not ready to deliver E-OTD-
capable handsets and other E-OTD network equipment when it
launched its GSM service.32 It asserted that some handset
vendors did not have E-OTD-capable handsets available, while
others had E-OTD-capable handsets available, but delays in the
availability of network equipment prevented it from testing
those handsets on an operational E-OTD-equipped network. AT&T
Wireless acknowledged that concerns were raised within the
company in Spring 2001 about the availability of E-OTD-capable
handsets, but it maintained that ``key decision-makers'' did
not have the same concerns. AT&T Wireless indicated in its
LOI response that non-E-OTD-capable handsets intended for use
on its GSM network were first delivered to its warehouses on
June 24, 2001.33 Nevertheless, AT&T Wireless stated that it
was during a July 2001 review of its E911 Phase II plan that
senior AT&T Wireless personnel learned that E-OTD-capable
handsets would not be available before its initial launch of
GSM service in Seattle on July 17, 2001.34 AT&T Wireless
asserted that it believed at that time that testing would be
complete and handsets would be commercially available from at
least certain vendors by December 2001. AT&T Wireless
identified six senior-level employees who knew on or around
July 16, 2001 that all handsets sold and/or distributed by
AT&T Wireless for use on its GSM network would not be E-OTD-
capable.35 AT&T Wireless also indicated that two of these
employees were involved in the preparation and review of the
waiver request and subsequent related pleadings.36 Finally,
documents provided by AT&T Wireless with its LOI response
indicate that AT&T Wireless projected in late July/early
August 2001 that it would have a significant number of legacy
(i.e., non-E-OTD-capable) handsets on its GSM network. We
understand that AT&T Wireless continues to sell non-E-OTD-
capable handsets today.
11. On February 1, 2002, AT&T Wireless filed its first
Quarterly Report on its progress and compliance with the terms
and condition of its E911 Phase II implementation plan set
forth in the GSM Waiver Order and the E911 rules.37 Among
other things, the Quarterly Report indicates that, as of
February 1, 2002, there were at least 12 valid requests from
PSAPs for Phase II service on AT&T Wireless's GSM network
which have been pending for six months or longer.38
12. On February 1, 2002, after receipt of the Enforcement
Bureau's LOI, AT&T Wireless also filed a request for limited
modification of the implementation plan approved by the
Commission in the GSM Waiver Order.39 In the waiver
modification request, AT&T Wireless requests that its GSM
waiver be modified as follows: (1) In order to address the
legacy base of non-E-OTD-capable handsets, AT&T Wireless must
deploy a network software solution (``NSS'') by December 31,
2002, without regard to PSAP request; (2) AT&T Wireless must
deploy E-OTD technology in its GSM network by December 31,
2002 for all valid PSAP requests pending as of June 30, 2002,
and must implement all valid PSAP requests received after June
30, 2002 within six months, as required under the Phase II
E911 rules; and (3) AT&T Wireless must offer at least one E-
OTD-capable GSM handset for sale by September 1, 2002; 50
percent of new GSM handsets sold and activated must be E-OTD-
capable by February 28, 2003; and 100 percent of new GSM
handsets sold and activated must be E-OTD-capable by June 30,
2003.40 This waiver modification request is pending.
III. DISCUSSION
A. Violations of E911 Rules
13. Section 20.18(g)(1)(i) of the Rules requires wireless
carriers using a handset-based Phase II solution to begin
selling and activating one entry-level handset model with
location capability no later than October 1, 2001. The record
before us indicates that, as of February 19, 2002, AT&T
Wireless had not yet begun selling and activating any handsets
with location capability for its GSM network. Furthermore,
while the mere filing of a waiver request obviously does not
excuse a company from non-compliance, here it is significant
that AT&T Wireless did not even seek a waiver of this
requirement until February 1, 2002 (after the Enforcement
Bureau's LOI regarding AT&T Wireless's potential non-
compliance), notwithstanding the fact that it apparently knew
at least as early as July 2001 that it would not have E-OTD-
capable handsets for use with its GSM network by October 1,
2001. As the Commission stated in the GSM Waiver Order, AT&T
Wireless remains subject to all requirements of the E911 rules
apart from those specifically modified in that order.41
Accordingly, we conclude that AT&T Wireless has apparently
willfully and repeatedly violated Section 20.18(g)(1)(i).42
14. Section 20.18(g)(2) of the Rules requires wireless
carriers to implement any network or infrastructure upgrades
necessary to provide E911 Phase II service and begin providing
Phase II service within six months of a valid PSAP request for
Phase II service or by October 1, 2001, whichever is later.
The record in this proceeding indicates that, as of February
1, 2002, AT&T Wireless had at least 12 valid PSAP requests for
Phase II service on its GSM network which have been pending
for six months or longer.43 Again, AT&T Wireless did not seek
a waiver of Section 20.18(g)(2) until February 1, 2002, even
though it clearly knew sometime prior to October 1, 2001 that
it would not comply with this requirement. Accordingly, we
conclude that AT&T Wireless has apparently willfully and
repeatedly violated Section 20.18(g)(2).44
B. Failure to Timely Disclose Inaccurate Statements in its
Waiver Request
15. The Commission staff initiated this investigation in
part to determine whether AT&T Wireless intentionally
misrepresented facts in its request for a waiver of the E911
Phase II rules for its GSM network. The record before us
raises potentially serious concerns. In its August 6, 2001
letter to the Wireless Telecommunications Bureau, AT&T
Wireless reaffirmed that ``E-OTD will be implemented along
with the market-by-market roll-out of AWS's GSM network.''45
Given that E-OTD was not in fact implemented with AT&T
Wireless's initial launch of GSM service in Seattle on July
17, 2001,46 it is apparent that this statement is inaccurate.
Moreover, AT&T Wireless admits that at least two senior
employees who were involved in the preparation and review of
the August 6, 2001 letter knew on or around July 16, 2001 that
E-OTD-capable handsets would not be available before the
initial launch of GSM service in Seattle.
16. The Enforcement Bureau continues to investigate this
matter to determine whether AT&T Wireless may have engaged in
misrepresentation in violation of Section 1.17 of the Rules.47
The base amount for any forfeiture for a violation of Section
1.17 is $120,000, the statutory maximum.48 In order to
expedite any enforcement action that may be appropriate at the
conclusion of the Bureau's investigation of this matter, for
the limited purposes of this matter, we delegate authority to
the Chief, Enforcement Bureau, to issue a Notice of Apparent
Liability and Forfeiture Order, if appropriate, up to the
statutory maximum of $120,000 rather than the $100,000 limit
in our delegation rules.
17. We conclude at this juncture, however, that AT&T
Wireless apparently willfully and repeatedly violated Section
1.65 of the Rules. Under Section 1.65(a), applicants must
disclose inaccuracies in a pending application ``as promptly
as possible and in any event within 30 days'' whenever: (1)
information furnished in the pending application ``is no
longer substantially accurate or complete in all significant
respects''; or (2) ``there has been a substantial change as to
any other matter which may be of decisional significance in a
Commission proceeding involving the pending application.''49
The purpose of Section 1.65 is to inform the Commission, the
public, and concerned parties of material changes in the
application.50 Furthermore, Section 1.65 imposes an
affirmative obligation on regulated entities to inform the
Commission of the facts needed to fulfill its duties. Our
decisions rely heavily on the completeness and accuracy of
applicants' submissions because we do not have the resources
to verify independently each and every representation made in
the thousands of pages submitted to us each day.
18. The record indicates that non-E-OTD-capable handsets
intended for use on AT&T Wireless's GSM network were first
delivered to its warehouses on June 24, 2001. Thus, AT&T
Wireless apparently ordered these handsets sometime prior to
that date. Nevertheless, AT&T Wireless stated that it was on
or around July 16, 2001 that senior-level employees became
aware that all handsets sold and distributed for use on its
GSM network would not be E-OTD-capable. Two of these
employees were directly involved in the preparation and review
of AT&T Wireless's waiver request and subsequent related
pleadings and therefore knew that AT&T Wireless had
represented to the Commission that the GSM network would be E-
OTD capable from day one and that there would be no legacy
handsets. Thus, even giving AT&T Wireless every benefit of
the doubt regarding when it incurred obligations under Section
1.65, it is apparent that AT&T Wireless had a clear obligation
beginning no later than 30 days from July 16, 2001, to report
to the Commission that its waiver request was substantially
inaccurate.
19. We also conclude that AT&T Wireless's waiver request
was ``pending,'' as that term is defined in Section 1.65,
during the relevant time period. Under Section 1.65, an
application is ``pending'' from the time that the Commission
accepts it for filing until a Commission grant or denial of
the application is no longer subject to reconsideration by the
Commission or to review by any court.51 AT&T Wireless's
waiver request was pending from April 4, 2001, the date it was
filed, until November 13, 2001, the date that the GSM Waiver
Order was no longer subject to reconsideration by the
Commission.52
20. As noted above, Section 1.65 requires applicants to
furnish additional or corrected information whenever prior
filings are ``no longer substantially accurate or complete in
all significant respects'' or ``there has been a substantial
change as to any other matter which may be of decisional
significance ....''53 We conclude that AT&T Wireless's
representations in the waiver request that the GSM network
would be E-OTD capable from the date of deployment and that
there would be no legacy handsets were of such significance
that it apparently should have notified the Commission when it
learned otherwise. The apparent significance of these
representations is clear from the record and should have been
quite evident to AT&T Wireless. The Wireless
Telecommunications Bureau issued an order on May 10, 2001
which, among other things, specifically directed AT&T Wireless
to provide information establishing that its GSM network will
be 100% compliant with the E911 Phase II rules from the date
of deployment.54 In addition, the Commission relied heavily
on the representations in AT&T Wireless's waiver request in
the GSM Waiver Order.55 Due to its reliance on these
representations, the Commission did not include in the GSM
Waiver Order any benchmarks for the sale and activation of E-
OTD-capable handsets or the provision of Phase II service to
PSAPs, nor did it require AT&T Wireless to implement a
``safety net'' location technology solution, like the NSS
solution which other wireless carriers using E-OTD technology
are required to implement, for the legacy handsets.
21. We find it particularly troubling that AT&T Wireless
did not promptly bring the inaccuracies in its waiver request
to the Commission's attention once the Commission issued the
GSM Waiver Order. There can be no doubt that AT&T Wireless
knew when the GSM Waiver Order was issued that the Commission
had relied substantially on its representations that the GSM
network would be E-OTD capable from the date of deployment and
that there would be no legacy handsets. As discussed above,
AT&T Wireless's waiver request was pending under Section 1.65,
and therefore it remained obligated to inform the Commission
of inaccuracies in the waiver request, until the GSM Waiver
Order was no longer subject to reconsideration on November 13,
2001. Additionally, we note that the GSM Waiver Order
explicitly stated that while AT&T Wireless's Quarterly Reports
should be the principal vehicle for providing the Commission
with notice of anticipated problems, AT&T Wireless should
notify the Commission through a supplemental filing to the
extent that unexpected problems affecting its ability to
perform arise in the period between reports.56 AT&T Wireless,
however, did not make such a supplemental filing. Indeed, the
Commission staff first learned in December 2001 from other
sources that AT&T Wireless had begun deploying its GSM network
but was not offering E-OTD-capable handsets. AT&T Wireless
did not make a filing notifying the Commission that its
deployment of E-OTD technology in its GSM network and its
deployment of E-OTD-capable handsets would be delayed until it
filed its waiver modification request on February 1, 2002, the
same date that it filed its first Quarterly Report, and after
its receipt of the Enforcement Bureau LOI. Thus, in addition
to apparently violating Section 1.65, AT&T Wireless also
apparently willfully and repeatedly violated the terms of the
GSM Waiver Order.
C. AT&T Wireless's Apparent Liability for a Forfeiture
22. In light of AT&T Wireless's apparent willful and
repeated violations of Sections 1.65, 20.18(g)(1)(i) and
20.18(g)(2) of the Rules, we find that a forfeiture is
warranted. Section 503(b)(1)(B) of the Communications Act of
1934, as amended, (``Act'') states that any person who
willfully or repeatedly fails to comply with any provision of
the Act or any rule, regulation, or order issued by the
Commission, shall be liable for a forfeiture penalty.57
Section 503(b)(2)(B) of the Act authorizes the Commission to
assess a forfeiture of up to $120,000 for each violation by a
common carrier, or each day of a continuing violation, up to a
statutory maximum of $1,200,000 for a single act or failure to
act.58 In determining the appropriate forfeiture amount, we
must consider the factors enumerated in Section 503(b)(2)(D)
of the Act, including ``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.''59
23. Considering all of the enumerated factors and the
particular circumstances of this case, we find that AT&T
Wireless is apparently liable for an aggregate forfeiture in
the amount of $2.2 million for its apparent violations of
Sections 1.65, 20.18(g)(1)(i) and 20.18(g)(2) of the Rules.
Section 1.80 of the Rules and the Commission's Forfeiture
Policy Statement establish a base forfeiture of $3,000 for
violations of Section 1.65.60 The circumstances of this case,
however, appear to justify a substantial increase in the base
amount for a Section 1.65 violation under the upward
adjustment criteria contained in Section 1.80 and the
Forfeiture Policy Statement.61 First, AT&T Wireless's conduct
here appears to be egregious. In this regard, the violation
of Section 1.65 occurred on a material issue in a significant
Commission proceeding. For AT&T Wireless to keep the
Commission and other interested parties uninformed of material
inaccuracies relating to its E911 waiver request is extremely
serious. Further, the Section 1.65 violation continued for
approximately three months, from August 16, 2001 (30 days
after its obligation under Section 1.65 arose) until November
13, 2001. For a full three months before the GSM Waiver Order
was issued, AT&T Wireless knew that its waiver request was no
longer substantially accurate and complete. Even after the
Commission issued the GSM Waiver Order, which relied
substantially on the representations in its waiver request,
AT&T Wireless did not come forward and bring the matter to the
Commission's attention. Moreover, AT&T Wireless apparently
violated the terms of the GSM Waiver Order by failing to make
a supplemental filing informing the Commission that it was not
going to comply with the deployment schedule requirements set
forth in the E911 rules.
24. In addition, in the Forfeiture Policy Statement, the
Commission made clear that companies with higher revenues,
such as AT&T Wireless,62 could expect forfeitures higher than
those reflected in the base amounts:
[O]n the other end of the spectrum of potential
violations, we recognize that for large or highly
profitable communication entities, the base forfeiture
amounts ... are generally low. In this regard, we are
mindful that, as Congress has stated, for a forfeiture
to be an effective deterrent against these entities,
the forfeiture must be issued at a high level.... For
this reason, we caution all entities and individuals
that, independent from the uniform base forfeiture
amounts ..., we intend to take into account the
subsequent violator's ability to pay in determining the
amount of a forfeiture to guarantee that forfeitures
issued against large or highly profitable entities are
not considered merely an affordable cost of doing
business. Such large or highly profitable entities
should expect in this regard that the forfeiture amount
set out in a Notice of Apparent Liability against them
may in many cases be above, or even well above, the
relevant base amount.63
The statutory maximum for a continuing violation of Section
1.65 is $1.2 million. While it is unclear whether such a
forfeiture will act as a sufficient deterrent to AT&T Wireless
against future violations of Section 1.65, we believe that
anything less is unlikely to do so. Therefore, in consideration
of the facts of this case and in accordance with Section
503(b)(2)(B) of the Act, we find that AT&T Wireless is apparently
liable for the statutory maximum $1.2 million forfeiture for its
apparent violation of Section 1.65.
25. Section 1.80 of the Rules and the Forfeiture Policy
Statement do not establish base forfeiture amounts for
violations of Section 20.18(g)(1)(i) and 20.18(g)(2) of the
Rules.64 However, we think that substantial proposed
forfeitures for these violations are warranted. Violation of
the E911 rules is extremely serious because these rules are
intended to promote safety of life. Furthermore, AT&T
Wireless clearly knew prior to October 1, 2001 that it was not
going to comply with these requirements, but it did not seek
waivers of these requirements until February 1, 2002, after
the Enforcement Bureau began its investigation into AT&T
Wireless's potential non-compliance. We also note that the
violations of Section 20.18(g)(1)(i) and 20.18(g)(2) are
continuing violations and that each unsatisfied PSAP request
is a separate violation of Section 20.18(g)(2). Finally, as
discussed above, AT&T Wireless's ability to pay must be
considered in setting a proposed forfeiture amount.
Therefore, taking these facts into account and in accordance
with Section 503(b)(2)(B) of the Act, we find that AT&T
Wireless is apparently liable for a forfeiture in the amount
of $500,000 for its apparent violation of Section
20.18(g)(1)(i) and a forfeiture in the amount of $500,000 for
its apparent violation of Section 20.18(g)(2).
IV. CONCLUSION
26. We find AT&T Wireless apparently liable for a total
forfeiture of $2.2 million. AT&T Wireless apparently
willfully and repeatedly violated Section 1.65 of the Rules
concerning the disclosure of information that is of
``decisional significance'' or that renders prior filings ``no
longer substantially accurate and complete in all significant
respects.'' AT&T Wireless also apparently willfully and
repeatedly violated the terms of the GSM Waiver Order by
failing to make a supplementary filing notifying the
Commission that it was not going to comply with the deployment
schedule requirements set forth in the E911 rules.
Additionally, we conclude that AT&T Wireless failed to begin
selling and activating location-capable handsets by October 1,
2001 in apparent willful and repeated violation of Section
20.18(g)(1)(i) of the Rules and failed to implement any
network or infrastructure upgrades necessary to provide E911
Phase II service and begin providing service within six months
of a valid PSAP request or by October 1, 2001, whichever is
later, in apparent willful and repeated violation of Section
20.18(g)(2) of the Rules, and without even filing a waiver
request.
V. ORDERING CLAUSES
27. Accordingly, IT IS ORDERED that, pursuant to Section
503(b) of the Act, and Section 1.80 of the Rules, AT&T
Wireless Services, Inc. is hereby NOTIFIED of this APPARENT
LIABILITY FOR A FORFEITURE in the amount of two million, two
hundred thousand dollars ($2,200,000) for willful and repeated
violations of Sections 1.65, 20.18(g)(1)(i) and 20.18(g)(2) of
the Rules.
28. 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, AT&T Wireless Services, Inc.
SHALL PAY the full amount of the proposed forfeiture or SHALL
FILE a written statement seeking reduction or cancellation of
the proposed forfeiture.
29. Payment of the forfeiture may be made by mailing a
check or similar instrument, payable to the order of the
Federal Communications Commission, to the Forfeiture
Collection Section, Finance Branch, Federal Communications
Commission, P.O. Box 73482, Chicago, Illinois 60673-7482. The
payment should note NAL/Acct. No. 200232100002 and FRN # 0006-
1660-29. Requests for payment of the full amount of this
Notice of Apparent Liability under an installment plan should
be sent to: Chief, Revenue and Receivables Operation Group,
445 12th Street, S.W., Washington, DC 20554.65
30. The response if any must be mailed to Office of the
Secretary, Federal Communications Commission, 445 12th Street,
S.W., Washington, DC 20554, ATTN: Enforcement Bureau -
Technical and Public Safety Division, and must include
NAL/Acct. No. 200232100002.
31. 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
documentation submitted.
32. IT IS FURTHER ORDERED that a copy of this Notice of
Apparent Liability shall be sent by Certified Mail Return
Receipt Requested to Douglas I. Brandon, Vice President,
External Affairs and Law, AT&T Wireless Services, Inc., Fourth
Floor, 1150 Connecticut Avenue, N.W., Washington, DC 20036,
and to Michelle M. Mundt, Esq., Mintz, Levin, Cohn, Ferris,
Glovsky, and Popeo, P.C., 701 Pennsylvania Avenue, N.W., Suite
900, Washington, D.C. 20004.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
_________________________
1 47 C.F.R. § 20.18.
2 47 C.F.R. § 20.18(g)(1)(i).
3 47 C.F.R. § 20.18(g)(2).
4 47 C.F.R. § 1.65.
5 See Revision of the Commission's Rules to Ensure
Compatibility with Enhanced 911 Emergency Calling Systems, CC
Docket No. 94-102, Report and Order and Further Notice of
Proposed Rulemaking, 11 FCC Rcd 18676 (1996).
6 47 C.F.R. § 20.18(h)(2).
7 47 C.F.R. § 20.18(g)(1).
8 47 C.F.R. § 20.18(g)(2).
9 47 C.F.R. § 20.18(h)(1).
10 47 C.F.R. § 20.18(f).
11 47 C.F.R. § 20.18(i).
12 AT&T Wireless Services, Inc. E911 Phase II Report, CC
Docket No. 94-102 (November 9, 2000).
13 AT&T Wireless Services, Inc. Amended E911 Phase II Report,
CC Docket No. 94-102 (December 9, 2000).
14 Id. at 3.
15 AT&T Wireless Services, Inc., Request for Waiver of the
E911 Phase II Location Technology Implementation Rules, filed
April 4, 2001 (``AT&T Wireless Waiver Request''). AT&T also
requested a waiver of the E911 Phase II rules to permit it to
deploy a network-based technology called Mobile-Assisted Network
Location System (``MNLS'') for its TDMA network. After numerous
parties including public safety organizations and location
technology vendors challenged AT&T Wireless's proposal to use
MNLS for its TDMA network, AT&T Wireless filed a letter on
September 17, 2001 amending its request for relief with respect
to its TDMA network. Letter from Douglas I. Brandon, Vice
President - External Affairs & Law, AT&T Wireless Services, Inc.,
to Thomas Sugrue, Chief, Wireless Telecommunications Bureau,
Federal Communications Commission, CC Docket No. 94-102
(September 17, 2001). In lieu of implementing MNLS as its
network-based solution for its TDMA network, AT&T Wireless sought
permission to deploy either TruePosition's or Grayson Wireless's
network overlay technologies. The amended waiver request
regarding AT&T Wireless's TDMA network is pending.
16 AT&T Wireless Waiver Request, at 5.
17 Id.
18 Reply Comments of AT&T Wireless Services, Inc., CC Docket
No. 94-102, at 3 (May 21, 2001)
19 Revision of the Commission's Rules to Ensure Compatibility
with Enhanced 911 Emergency Calling Systems, CC Docket 94-102,
Order, 16 FCC Rcd 9561, 9563 (Wireless Tel. Bur. 2001).
20 Partial Response of AT&T Wireless Services, Inc. to Order
of the Wireless Telecommunications Bureau, CC Docket No. 94-102,
at 5 (May 30, 2001).
21 Letter from Douglas I. Brandon, Vice President - External
Affairs & Law, AT&T Wireless Services, Inc., to Thomas Sugrue,
Chief, Wireless Telecommunications Bureau, Federal Communications
Commission, CC Docket No. 94-102, at 2 (August 6, 2001).
22 Revision of the Commission's Rules to Ensure Compatibility
with Enhanced 911 Emergency Calling Systems, (Request for Waiver
by AT&T Wireless Services, Inc.), CC Docket No. 94-102, 16 FCC
Rcd 18253 (2001) (``GSM Waiver Order'').
23 Id.
24 Id. at 18258.
25 Id. at 18262.
26 Id. at 18261.
27 Letter from Joseph P. Casey, Chief, Technical and Public
Safety Division, Enforcement Bureau, to Douglas I. Brandon, Vice
President - External Affairs & Law, AT&T Wireless Services, Inc.
(January 15, 2002).
28 Letter from Douglas I. Brandon, Vice President - External
Affairs & Law, AT&T Wireless Services, Inc., to Joseph P. Casey,
Chief, Technical and Public Safety Division, Enforcement Bureau
(February 4, 2002).
29 Letter from Douglas I. Brandon, Vice President - External
Affairs & Law, AT&T Wireless Services, Inc., to Joseph P. Casey,
Chief, Technical and Public Safety Division, Enforcement Bureau
(February 19, 2002) (``LOI Response'').
30 Id. at 1.
31 Id. at 2. In its request for limited modification of the
GSM Waiver Order, filed three days before its response to the
Enforcement Bureau LOI, AT&T Wireless indicated that it began
offering commercial GSM service in Seattle, Portland, Las Vegas
and Phoenix on October 2, 2001, in Detroit on October 23, 2001,
and in South Florida, Lansing, Grand Rapids, Chicago,
Indianapolis, and Kansas City in November and December 2001.
AT&T Wireless Services, Inc. Request for Limited Modification of
E911 Phase II Waiver, CC Docket 94-102, at 2 (filed February 1,
2002).
32 LOI Response at 4.
33 Id. at 3.
34 Id. at 4-5.
35 Id. at 11.
36 Id. at 10. AT&T Wireless also identified two in-house
attorneys who participated in the preparation and review of the
waiver request and related pleadings, but claimed attorney-client
and work product privilege with respect to the date on which they
became aware that all handsets sold and/or distributed by AT&T
Wireless for use on its GSM network would not be E-OTD-capable.
Id. at 7-11.
37 AT&T Wireless Services, Inc. Quarterly Report, CC Docket
No. 94-102 (filed February 1, 2002).
38 The Quarterly Report indicates that the following PSAPs'
requests for Phase II service are valid and have been pending for
at least six months: in Florida, Marion County (filed 6/22/01);
in Illinois, St Clair County ETSB (filed 9/13/00), Village of
Barrington Hills (filed 4/9/01), and Village of Vernon Hills
Police Department (filed 6/19/01); in Indiana, Ripley County
(filed 4/18/01), and Lake County Sheriff's Department (filed
4/26/01); in Oregon, North Marion County Communications,
Clackamas County Communications, Portland Bureau of Emergency
Communications, Central Lane Communications Center, and
Washington County Consolidated Communications (all filed
4/17/01); and in Washington, Clallam County Sheriff's Department
(filed 7/26/01). In addition, the Quarterly Report indicates
that the following two PSAP requests for Phase II service have
been pending for at least six months, but does not indicate
whether AT&T Wireless believes the requests to be valid: in
Florida, Volusia County Sheriff's Office (filed 6/27/01) and
Nassau County Sheriff Department (filed 4/12/01). Id. at
Appendix I and II.
39 AT&T Wireless Services, Inc. Request for Limited
Modification of E911 Phase II Waiver, CC Docket 94-102 (filed
February 1, 2002).
40 Id. at 13.
41 GSM Waiver Order, 16 FCC Rcd at 18261.
42 Section 312(f)(1) of the Communications Act of 1934, as
amended, (``Act'') provides that ``the term `willful,' when used
with reference to the commission or omission of any act, means
the conscious or 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 ....'' 47 U.S.C. §
312(f)(1). This definition applies to the term ``willful'' as
used in Section 503(b) of the Act. See Southern California
Broadcasting Co., 6 FCC Rcd 4387 (1991). A violation is repeated
if, among other things, it continues over more than one day. Id.
at 4388.
43 See paragraph 11, supra.
44 We note that the findings in this NAL relate solely to AT&T
Wireless's GSM network. The Commission previously referred to
the Enforcement Bureau a matter concerning AT&T Wireless's TDMA
network.
45 Letter from Douglas I. Brandon, Vice President - External
Affairs & Law, AT&T Wireless Services, Inc., to Thomas Sugrue,
Chief, Wireless Telecommunications Bureau, Federal Communications
Commission, CC Docket No. 94-102, at 2 (August 6, 2001).
46 We find it immaterial for purposes of this NAL that the
initial launch of GSM service in Seattle was limited to AT&T
Wireless's ``enterprise'' customers.
47 Section 1.17 of the Rules states in relevant part that
``[n]o applicant, permittee or licensee shall in any response to
Commission correspondence or inquiry or in any application,
pleading, report or any other written statement to the
Commission, make any misrepresentation or willful material
omission bearing on any matter within the jurisdiction of the
Commission.'' 47 C.F.R. § 1.17.
48 See 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) (``Forfeiture
Policy Statement''), recon. denied, 15 FCC Rcd 303 (1999); 47
C.F.R. § 1.80(b)(4).
49 47 C.F.R. § 1.65(a).
50 See Pinelands, Inc. and BHC Communications, Inc., 7 FCC Rcd
6058, 6064 n. 25 (1992); WPIX, Inc., 33 FCC 2d 782, 783-84
(1972).
51 47 C.F.R. § 1.65(a).
52 Under Section 1.106(f) of the Rules, a petition for
reconsideration must be filed within 30 days of the date of
public notice of the final Commission action. 47 C.F.R. § 1.106.
The GSM Waiver Order was released on October 12, 2001. AT&T
Wireless did not seek reconsideration of that order. Thus,
November 13, 2001 is the date that the GSM Waiver Order was no
longer subject to reconsideration by the Commission.
53 47 C.F.R. § 1.65(a).
54 Revision of the Commission's Rules to Ensure Compatibility
with Enhanced 911 Emergency Calling Systems, CC Docket 94-102,
Order, 16 FCC Rcd 9561, 9563 (Wireless Tel. Bur. 2001).
55 See paragraph 7, supra.
56 GSM Waiver Order, 16 FCC Rcd at 18261.
57 47 U.S.C. § 503(b)(1)(B); see also 47 C.F.R. § 1.80(a)(2).
58 47 U.S.C. § 503(b)(2)(B); see also 47 C.F.R. § 1.80(b)(2).
59 47 U.S.C. § 503(b)(2)(D); see also Forfeiture Policy
Statement, 12 FCC Rcd at 17100 (1997); 47 C.F.R. § 1.80(b)(4).
60 47 C.F.R. § 1.80(b)(4), Note to paragraph (b)(4): Section
I. Base Amounts for Section 503 Forfeitures; Forfeiture Policy
Statement, 12 FCC Rcd at 17114, Appendix A, Section I.
61 47 C.F.R. § 1.80(b)(4), Note to paragraph (b)(4): Section
II. Adjustment Criteria for Section 503 Forfeitures; Forfeiture
Policy Statement, 12 FCC Rcd at 17117, Appendix A, Section II.
62 In 2001, AT&T Wireless had total revenues of $13.6 billion
with operating income of $598 million. See AT&T Wireless Annual
Report 2001 at 2 (2002).
63 Forfeiture Policy Statement, 12 FCC Rcd at 17099-100. See
also 47 U.S.C. § 503(b)(2)(D); 47 C.F.R. § 1.80(b)(4), Note to
paragraph (b)(4): Section II. Adjustment Criteria for Section
503 Forfeitures.
64 The fact that there are no established base forfeiture
amounts for these violations does not indicate that no forfeiture
should be imposed. The Forfeiture Policy Statement states 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.
Forfeiture Policy Statement, 12 FCC Rcd at 17099. The Commission
retains the discretion, moreover, to depart from the Forfeiture
Policy Statement and issue forfeitures on a case?by?case basis,
under its general forfeiture authority contained in Section 503
of the Act. Id.
65 See 47 C.F.R. § 1.1914.