Click here for Adobe Acrobat version
Click here for Microsoft Word version

******************************************************** 
                      NOTICE
********************************************************

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.

*****************************************************************



   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

   1

   7

   Federal Communications Commission DA 07-1760