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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Vitec Group Communications Limited ) File No. EB-05-SE-172
Cambridge, United Kingdom ) NAL/Acct. No. 200632100009
) FRN 0012947594
)
MEMORANDUM OPINION AND ORDER
Adopted: April 18, 2007 Released: April 20, 2007
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Memorandum Opinion and Order, we deny the petition for
reconsideration filed by Vitec Group Communications Limited ("Vitec").
Vitec seeks reconsideration of a Forfeiture Order issued by the
Spectrum Enforcement Division ("Division") of the Enforcement Bureau
("Bureau") to Vitec on October 31, 2006, which assessed a forfeiture
of eleven thousand two hundred dollars ($11,200) for willful and
repeated violation 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 noted violations involve Vitec's marketing of
unauthorized radio frequency devices in the United States.
II. BACKGROUND
2. In May 2005, the Bureau received a complaint alleging that Clear-Com
Communication Systems was marketing unapproved radiofrequency devices
in the United States in violation of Section 302(b) of the Act and
Section 2.803(a) of the Rules. Specifically, the complaint indicated
that Vitec advertised an unapproved digital wireless intercom system
called the "CellCom Digital Wireless Intercom" ("CellCom 10") in the
April 2005 issue of Broadcast Engineering and also displayed it at the
2005 National Association of Broadcasters ("NAB") trade show in Las
Vegas, NV. Digital wireless intercom systems, such as the CellCom 10,
are classified as intentional radiators and are required by Section
15.201 of the Rules to be approved prior to marketing through the
equipment certification procedures described in Sections 2.1031 -
2.1060 of the Rules.
3. The Division subsequently began an investigation of Vitec's marketing
activities. As part of the investigation, the Division obtained a copy
of the April 2005 issue of Broadcast Engineering and confirmed that it
contains an advertisement for the CellCom 10. The advertisement
describes the CellCom 10 as "revolutionary" and exhorts readers to
"join the revolution." Section 2.803(c) of the Rules allows the
advertising or display of radio frequency devices prior to equipment
authorization only if the following disclaimer notice is provided:
This device has not been authorized as required by the rules of the
Federal Communications Commission. This device is not, and may not be,
offered for sale or lease, or sold or leased, until authorization is
obtained.
The Broadcast Engineering advertisement did not contain this notice.
4. The Division determined through internet research that the website
www.clearcom.com contained photographs of Vitec's display of the
CellCom 10 at the 2005 National Association of Broadcasters ("NAB")
trade show, which took place April 16-21, 2005. The disclaimer notice
specified by Section 2.803(c) of the Rules was not visible in those
photographs.
5. The Division sent Vitec a letter of inquiry ("LOI") on October 24,
2005. Vitec submitted responses both directly and through its counsel.
In its direct response, Vitec stated that it obtained equipment
certifications covering its digital wireless intercom system on
November 2, 2005, and that it did not sell or distribute the product
in the United States prior to the grant of the certifications. Vitec
acknowledged, however, that "the advertising in Broadcast Engineering
and display at NAB did take place as you note during April 2005, the
object being to market this product prior to launch." In the
subsequent response submitted through its counsel, Vitec denied any
violation of the Act or the Rules. The Division directed a second LOI
to Vitec on February 13, 2006. In its response to that letter, Vitec
stated that it manufactures its CellCom 10 digital wireless intercom
system in England and imports it into the United States. Vitec
asserted that it did not "market or sell" the system in the United
States prior to its receipt of the equipment certifications on
November 2, 2005.
6. On April 14, 2006, the Division issued a Notice of Apparent Liability
for Forfeiture ("NAL") to Vitec in the amount of fourteen thousand
dollars ($14,000) for apparent willful and repeated violation of
Section 302(b) of the Act and Sections 2.803(a)(1) of the Rules. In
its NAL response, Vitec argued that the proposed forfeiture should be
cancelled because its pre-certification advertising and display of the
Cellcom 10 digital wireless intercom system did not violate Section
302(b) of the Act or Section 2.803(a)(1) of the Rules, and that, if
there was a basis for a monetary forfeiture, the amount proposed by
the NAL was excessive. Vitec provided a "Statement Under Penalty of
Perjury" indicating that it included the disclaimer notice set forth
in Section 2.803(c) when it displayed the CellCom 10 at the 2005 NAB
convention. Based on this statement, the Division found that the
display of the CellCom 10 at the NAB convention did not violate
Section 302(b) of the Act and Section 2.803(a)(1) of the Rules. The
Division, however, concluded that the advertisement of the Cellcom 10
in Broadcast Engineering magazine without a disclaimer notice did
violate Section 302(b) of the Act and Section 2.803(a)(1) of the
Rules. The Division also concluded that Vitec had a history of overall
compliance which warranted reduction of the forfeiture amount from
$14,000 to $11,200, but rejected Vitec's other arguments for reduction
of forfeiture amount.
7. In its petition for reconsideration, Vitec again argues that its
pre-certification advertising of the Cellcom 10 did not violate the
Section 302(b) of the Act or Section 2.803(a)(2) of the Rules. Vitec
also contends that, if there is a basis for a monetary forfeiture, the
$11,200 forfeiture amount assessed in the Forfeiture Order is
excessive.
III. DISCUSSION
8. The forfeiture amount proposed in this case was assessed in accordance
with Section 503(b) of the Communications Act of 1934, as amended
("Act"), Section 1.80 of the Rules, and the Commission's Forfeiture
Policy Statement. In assessing forfeitures, Section 503(b)(2)(E) of
the Act requires that we 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.
9. 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].
10. Vitec has admitted that it advertised its digital wireless intercom
system in the April 2005 issue of Broadcast Engineering before the
grant of an equipment authorization and has furnished a copy of the
advertisement, which does not include the disclaimer notice specified
by Section 2.803(c) of the Rules. Vitec, however, reiterates the
argument made in its response to the NAL that it was not required to
include the disclaimer notice because the Broadcast Engineering
advertisement did not offer or advertise the CellCom 10 for "sale or
lease." Specifically, Vitec argues that the CellCom 10 was not
available for sale and that its advertisement "did not exhort the
reader to buy anything or do anything other than visit the Clear Com
booth at the NAB convention." First, the lack of availability of the
CellCom 10 at the time of the pre-certification advertising is not
material. We disagree, however, with the claim that the advertisement
did not exhort the reader to buy anything. To the contrary, the
advertisement described the CellCom 10 as "revolutionary" and exhorted
readers to "join the revolution." Its clear intent was to generate
future sales of the CellCom 10. Furthermore, Vitec's construction of
the Commission's marketing regulations to permit "pre-marketing a
product that is anticipated to be available in the future" would
largely eviscerate the prohibition against pre-certification
advertising without a disclaimer and likely lead to widespread abuse
of the marketing regulations. We will not construe the rules to allow
such "pre-marketing" of unauthorized devices without the disclaimer
required by Section 2.803(c).
11. Accordingly, we reject Vitec's argument and find that Vitec marketed
the CellCom 10 prior to certification without any disclaimer notice.
We therefore affirm the Division's determination that Vitec willfully
and repeatedly violated Section 302(b) of the Act and Section
2.803(a)(1) of the Rules.
12. Vitec also argues that the one year statute of limitations of Section
503(b)(6)(B) of the Act bars imposition of a forfeiture on the basis
of Vitec's Broadcast Engineering advertisement. In its response to the
NAL, Vitec claimed that the statute of limitations expired before the
issuance of the NAL because the Broadcast Engineering issue in which
Vitec's advertisement appeared, April 2005, was distributed to
subscribers during March 2005, which is more than one year before the
April 14, 2006, issuance of the NAL. The Division rejected that
argument. Vitec now contends that the violation, if any, occurred only
"on the first day of publication of that issue of Broadcast
Engineering magazine" during March 2005. We disagree. As stated in the
Forfeiture Order, the April issue of Broadcast Engineering was current
until the end of that month and, therefore, Vitec's violation
continued through the end of April 2005, which is within the one year
statute of limitations period.
13. Vitec further argues that, if there is a basis for a monetary
forfeiture, the $11,200 forfeiture amount determined by the Forfeiture
Order is excessive. First, Vitec contends that the $14,000 base
forfeiture amount calculated by the Division is excessive. The base
forfeiture amount for marketing unauthorized equipment is $7,000. The
Division found that the CellCom 10 included two types of uncertified
devices with separate equipment authorizations - base stations and
mobile transmitters - whose marketing constituted separate offenses
and, thus, found that the aggregate base forfeiture amount is $14,000.
Vitec now argues that the CellCom 10 is a single device because it is
sold as a single model "consisting of two components, neither of which
has any function independent of the other component." Vitec's
designation and marketing of the base station and mobile transmitters
constituting the CellCom 10 as a single model is not dispositive.
While it is true that the CellCom 10 can function only if its users
have both the base station and mobile transmitters, it does not follow
that the base station and mobile transmitters must be sold only as a
package. For example, the base station and mobile transmitters could
be sold separately as replacements and mobile transmitters could be
sold separately to expand the number of mobile transmitters. We find
that Vitec's marketing strategy does not change the essential nature
of the CellCom 10 base station and mobile transmitters as separate and
distinct devices. We, accordingly, find that the CellCom 10 included
two distinct kinds of devices and that $14,000 is the correct base
forfeiture amount.
14. In addition, Vitec contends that four cases cited in the Forfeiture
Order "validate" its contention that the $11,200 forfeiture amount is
excessive. Specifically, Vitec argues that, in contrast to this
proceeding, those cases involved "actual importation, actual marketing
and actual sale of uncertified equipment to the public, with a
potential for harmful interference." Vitec is apparently suggesting
that, because of the absence of "actual sales," its pre-certification
marketing was, at most, a minor violation. As stated in the Forfeiture
Order, a violation of a provision of the Communications Act cannot be
classified as a "minor" violation. Moreover, we note that the
Commission has previously found that a $75,000 forfeiture proposed for
advertising an uncertified device that was not yet available for sale
was not excessive. Further, we find nothing in the cases cited by
Vitec that supports further reducing the forfeiture amount in this
case. We find, accordingly, that the $11,200 imposed by Forfeiture
Order is not excessive and is the proper forfeiture amount.
15. We have examined Vitec's petition for reconsideration pursuant to the
statutory factors prescribed by Section 503(b)(2)(E) of the Act and
Section 1.80 of the Rules, and in conjunction with the Forfeiture
Policy Statement as well. As a result of our reconsideration, we find
that neither cancellation nor reduction of the forfeiture is warranted
and that the Forfeiture Order should be affirmed.
IV. ORDERING CLAUSES
16. Accordingly, IT IS ORDERED that, pursuant to Section 405 of the Act
and Section 1.106 of the Rules, Vitec's petition for reconsideration
of the Forfeiture Order IS DENIED.
17. Payment of the forfeiture shall be made in the manner provided for in
Section 1.80 of the Rules within 30 days of the release of this
Memorandum Opinion and 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. Payment
of the forfeiture must be made by check, money order or similar
instrument, payable to the order of the Federal Communications
Commission. The payment must include the NAL/Acct. No. and FRN No.
referenced above. Payment by check or money order may be mailed to the
Federal Communications Commission, P.O. Box 358340, Pittsburgh, PA
15251-8340. Payment by overnight mail may be sent to Mellon Bank /LB
358340, 500 Ross Street, Room 1540670, Pittsburgh, PA 15251. Payment
by wire transfer may be made to ABA Number 043000261, receiving bank
Mellon Bank, and account number 911-6106. Requests for full payment
under an installment plan should be sent to: Associate Managing
Director - Financial Operations, 445 12th Street, S.W., Room 1A625,
Washington, D.C. 20554.
18. IT IS FURTHER ORDERED that a copy of this Memorandum Opinion and Order
shall be sent by first class mail and certified mail return receipt
requested to Vitec Group Communications Limited, 4065 Hollis Street,
Emeryville, CA 94608, and to its attorney, Christopher D. Imlay, Esq.,
Booth, Freret, Imlay & Tepper, P.C., 14356 Cape May Road, Silver
Spring, MD 20904-6011.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
Vitec Group Communications Limited, Forfeiture Order, 21 FCC Rcd 12871
(Enf. Bur., Spectrum Enf. Div. 2006) ("Forfeiture Order").
47 U.S.C. S 302a(b).
47 C.F.R. S 2.803(a)(1).
Clear-Com Communications Systems is a trade name that Vitec, a British
company, uses in the United States. In this Memorandum Opinion and Order,
we refer to the company as Vitec throughout.
Vitec subsequently identified this device as the "CellCom 10" digital
wireless intercom system. Letter from Christopher D. Imlay, Esq. to
Kathryn S. Berthot and Thomas D. Fitz-Gibbon, Spectrum Enforcement
Division, Enforcement Bureau (December 6, 2005) at 2.
An intentional radiator is "[a] device that intentionally generates and
emits radio frequency energy by radiation or induction." 47 C.F.R. S 15.3
(o).
47 C.F.R. S 15.201.
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. SS 2.1031 - 2.1060
47 C.F.R. S 2.803(c).
Letter from Kathryn S. Berthot, Deputy Chief, Spectrum Enforcement
Division, Enforcement Bureau, to Clear-Com Communications Systems (October
24, 2005).
Letter from Chris Exelby, Managing Director, Vitec Group Communications,
to Thomas D. Fitz-Gibbon, Spectrum Enforcement Division, Enforcement
Bureau (November 25, 2005) ("November 25, 2005, LOI Response").
Letter from Christopher D. Imlay, Esq., to Kathryn S. Berthot and Thomas
D. Fitz-Gibbon, Spectrum Enforcement Division, Enforcement Bureau
(December 6, 2005) ("December 6, 2005, LOI Response").
The Commission's equipment authorization data base indicates that, on
November 2, 2005, Vitec was granted equipment certifications under FCC ID
# S3O-CEL-BP (portable two-way radios) and FCC ID # S3O-CEL-TA (base
station) for the Vitec CellCom 10 Digital Wireless Intercom.
November 25, 2005, LOI Response at 1.
Id.
December 6, 2005, LOI Response at 2.
Letter from Kathryn S. Berthot, Deputy Chief, Spectrum Enforcement
Division, Enforcement Bureau, to Christopher D. Imlay, Esq. (February 13,
2006).
Letter from Christopher D. Imlay, Esq., to Kathryn S. Berthot and Thomas
D. Fitz-Gibbon, Spectrum Enforcement Division, Enforcement Bureau (March
2, 2006) at 3.
Id. at 3.
Vitec Group Communications, Ltd., Notice of Apparent Liability for
Forfeiture, 21 FCC Rcd 4025 (Enf. Bur., Spectrum Enf. Div., 2006).
Letter from Christopher D. Imlay, Esq. to Chief, Spectrum Enforcement
Division, Enforcement Bureau (May 18, 2006) ("NAL response") at 5-12.
21 FCC Rcd at 12890.
Id. at 12891-92.
Petition for Reconsideration at 6-12.
47 U.S.C. S 503(b).
47 C.F.R. S 1.80.
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) ("Forfeiture
Policy Statement").
47 U.S.C. S 503(b)(2)(E).
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."
NAL response at 6-7, Exhibit A.
NAL response at 6-7; Petition for Reconsideration at 6-8.
NAL response at 7; Petition for Reconsideration at 7.
Petition for Reconsideration at 8.
See ACR Electronics, Inc., Notice of Apparent Liability for Forfeiture, 19
FCC Rcd 22293 (2004) (proposing a $75,000 forfeiture for pre-certification
advertising of a device that was not yet available for sale without the
requisite disclaimer), forfeiture ordered, 21 FCC Rcd 3698 (2006) ("ACR
Electronics").
Petition for Reconsideration at 8.
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., Meomorandum Opinion and Order, 6 FCC Rcd 4387 (1991).
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).
Section 503(b)(6)(B) of the Act provides that
No forfeiture penalty shall be determined or imposed against any person
under this subsection if such person does not hold a broadcast station
license issued under subchapter III of this chapter and if the violation
charged occurred more than 1 year prior to the date of issuance of the
required notice or notice of apparent liability.
47 U.S.C. S 503(b)(6)(B).
Petition for Reconsideration at 12.
NAL response at 6.
21 FCC Rcd at 12890.
Id. at 12890.
Petition for Reconsideration at 9-11.
Forfeiture Policy Statement and 47 C.F.R. S 1.80(b)(4).
21 FCC Rcd at 12891.
Petition for Reconsideration at 9.
Because the devices have separate equipment authorizations, FCC ID
S3O-CEL-BP and FCC ID S3O-CEL-TA, they are authorized to be marketed
separately.
Samson Technologies, Inc., Notice of Apparent Liability for Forfeiture, 19
FCC Rcd 4221 (2004) ($35,000 forfeiture amount proposed), consent decree
issued, 19 FCC Rcd 24542 (2004); Pilot Travel Centers, LLC, Notice of
Apparent Liability for Forfeiture, 19 FCC Rcd 23113, 23117 (2004)
($125,000 forfeiture amount proposed), consent decree issued, 21 FCC Rcd
5308 (2006); Behringer USA, Inc., Notice of Apparent Liability for
Forfeiture, 21 FCC Rcd. 1820, 1827 (2006) ($1,000,000 forfeiture amount
proposed), response pending; San Jose Navigation, Inc., Notice of Apparent
Liability for Forfeiture, 21 FCC Rcd 2873, 2877 (2006) ($75,000 forfeiture
amount proposed), forfeiture ordered, 22 FCC Rcd 1040 (2007).
Petition for Reconsideration at 11.
21 FCC Rcd at 12892; see also Catherine R. Waddill, Memorandum Opinion
and Order, 13 FCC Rcd 23861, 23866 (1998); Paging Network of Los Angeles,
Inc., Notice of Apparent Liability for Forfeiture, 8 FCC Rcd 1702, 1703
(1993).
ACR Electronics, 21 FCC Rcd at 3706.
Notably, all of those cases involved forfeiture amounts much larger than
$11,200. See supra n. 48.
47 U.S.C. S 405.
47 C.F.R. S 1.106.
47 U.S.C. S 504(a).
See 47 C.F.R. S 1.1914.
Federal Communications Commission DA 07-1760
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Federal Communications Commission DA 07-1760