Click here for Adobe Acrobat version
Click here for Microsoft Word version
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-05-SE-362
Austin Hughes Solutions, Inc. ) NAL/Acct. No. 200832100008
Union City, CA ) FRN: 0017194465
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: November 30, 2007 Released: December 3, 2007
By the Commission:
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
Austin Hughes Solutions, Inc. ("Austin Hughes") apparently liable for
a forfeiture for marketing nine models of non-verified Class A digital
devices in apparent willful and repeated violation of Section 302(b)
of the Communications Act of 1934, as amended ("Act"), and Section
2.803(a)(2) of the Commission's Rules ("Rules"). Based on the facts
and circumstances before us, we conclude that Austin Hughes is
apparently liable for a forfeiture in the amount of sixty-three
thousand dollars ($63,000).
2. Section 302 of the Act authorizes the Commission to make reasonable
regulations, consistent with the public interest, governing the
interference potential of equipment that emits radio frequency energy,
and prohibits, among other things, the offering for sale of radio
frequency devices to the extent that such activity does not comply
with these regulations. The purpose of this section is to ensure that
radio transmitters and other electronic devices meet certain standards
to control interference before they reach the market. Specifically,
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)(2) of the Commission's implementing regulations provides
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 not required to have a grant of
equipment authorization issued by the Commission, but which must comply
with the specified technical standards prior to use, such device also
complies with all applicable administrative (including verification of the
equipment or authorization under a Declaration of Conformity, where
required), technical, labeling and identification requirements specified
in this chapter.
3. Class A digital devices are digital devices such as computers and
computer peripherals that are marketed for use in a commercial,
industrial, or business setting. Section 15.101 of the Rules requires
that Class A digital devices be authorized through the verification
process prior to marketing. "Marketing" includes the sale or lease,
offer for sale or lease (including advertising for sale or lease),
importing, shipping, and/or distribution for the purpose of selling or
leasing or offering for sale or lease.
4. Austin Hughes is the U.S. subsidiary of Austin Hughes Electronics,
Inc., a Hong Kong-based design and manufacturing company that offers a
broad range of electro-mechanical products based on 19-inch rackmount
technology. The Spectrum Enforcement Division ("Division") of the
Enforcement Bureau received a complaint alleging that Austin Hughes
was marketing in the United States digital devices, such as rackmount
keyboards, monitors, and keyboard-video-mouse switches and extenders
("KVMs"), without the proper testing and documentation to confirm
compliance with the Commission's requirements. On June 9, 2006, the
Division sent Austin Hughes a letter of inquiry ("LOI") seeking
further information with regard to its devices.
5. The Division received Austin Hughes' response to the LOI on September
7, 2006. In its response, Austin Hughes indicated that the devices
that were the subject of the LOI were manufactured in Hong Kong by its
parent corporation, Austin Hughes Electronics Ltd.; that Austin Hughes
began marketing the devices in the United States in November 2005; and
that Austin Hughes began importing the devices into the United States
in December 2005 and that it "will continue to import these devices
into the United States." Austin Hughes provided test reports
demonstrating that certain of its devices had been verified as
compliant with the Commission's rules. Austin Hughes acknowledged,
however, that certain other devices had not been verified as
compliant. Specifically, Austin Hughes stated that it had not verified
the following nine devices: the RP920 rackmount LCD monitor; the
HRP615 rackmount LCD monitor; the HRP717 rackmount LCD monitor; the
HRP819 rackmount LCD monitor; the HRKP115 LCD display-keyboard drawer;
the HRKP117 LCD display-keyboard drawer; the IP-101 KVM extender; the
CV-101 KVM extender; and the CV0S101 KVM extender. Austin Hughes
asserted that these nine devices were not tested for compliance
because they are "[i]mported in limited quantities for demonstration,
testing and evaluation for compliance with technical requirements or
marketing suitability." Notably, however, these nine device are
advertised in the November 2005 product catalog that Austin Hughes
provided with its LOI response and that is found on Austin Hughes'
website, www.austin-hughes.com. Moreover, Austin Hughes' LOI response
indicated that it sold units of the following five devices: the RP920
rackmount LCD monitor; the HRP615 rackmount LCD monitor; the HRP717
rackmount LCD monitor; the HRKP117 LCD display-keyboard drawer; and
the CV-101 KVM extender.
6. Under Section 503(b)(1)(B) of the Act, any person who is determined by
the Commission to have willfully or repeatedly failed to comply with
any provision of the Act or any rule, regulation, or order issued by
the Commission shall be liable to the United States for a forfeiture
penalty. To impose such a forfeiture penalty, the Commission must
issue a notice of apparent liability and the person against whom such
notice has been issued must have an opportunity to show, in writing,
why no such forfeiture penalty should be imposed. The Commission will
then issue a forfeiture if it finds by a preponderance of the evidence
that the person has violated the Act or rule.
A. Marketing of Unauthorized Class A Digital Devices
7. We conclude that Austin Hughes is apparently liable for forfeiture for
its apparent willful and repeated violations of Section 302(b) of the
Act and Section 2.803(a)(2) of the Rules by marketing nine
unauthorized Class A digital devices prior to performing the required
verification testing. Specifically, we find that Austin Hughes
marketed the following nine devices in violation of the Act and the
Commission's Rules: the RP920 rackmount LCD monitor; the HRP615
rackmount LCD monitor; the HRP717 rackmount LCD monitor; the HRP819
rackmount LCD monitor; the HRKP115 LCD display-keyboard drawer; the
HRKP117 LCD display-keyboard drawer; the IP-101 KVM extender; the
CV-101 KVM extender; and the CV0S101 KVM extender. Austin Hughes
conceded in its LOI response that these nine devices were not verified
for compliance with the FCC's rules. As the importer, Austin Hughes is
the party responsible for ensuring that the devices were verified for
compliance prior to marketing in the United States. In addition,
Austin Hughes advertised each of these nine devices through its
product catalog on its website between November 2005 and at least
December 2006. Austin Hughes also admitted that it sold units of five
of these devices.
8. Austin Hughes claimed in its LOI response that these nine devices are
"[i]mported in limited quantities for demonstration, testing and
evaluation for compliance with technical requirements or marketing
suitability." Section 2.803(e)(1) of the Rules provides that radio
frequency devices "may be operated, but not marketed," prior to
equipment authorization or a determination of compliance with
applicable technical standards for the purpose of compliance testing,
demonstration and evaluation, provided that certain conditions are
met. As noted above, however, Austin Hughes clearly marketed the nine
devices. The nine devices were advertised in its product catalog
between November 2005 and at least December 2006. These advertisements
did not contain the disclaimer notice set forth in Section 2.803(c) of
the Rules, indicating that the devices had not been authorized and
that they could not be offered for sale or lease, or sold or leased,
until authorization was obtained. Indeed, we note that an FCC logo was
included on the pages containing the advertisements for some of the
nine devices, which is, at best, misleading. Moreover, Austin Hughes
sold units of five of the devices.
9. Accordingly, based on the preponderance of the evidence, we find that
Austin Hughes apparently willfully and repeatedly violated Section
302(b) of the Act and Section 2.803(a)(2) of the Rules by marketing
nine unauthorized Class A digital devices without proper verification.
A. Proposed Forfeiture Amount
10. Section 503(b) of the Act and Section 1.80(a) of the Rules provide
that any person who willfully or repeatedly fails to comply with the
provisions of the Act or the rules shall be liable for a forfeiture
penalty. Based upon the record before us, it appears that Austin
Hughes' violations of Section 302(b) of the Act and Section
2.803(a)(2) of the Rules were willful and repeated.
11. Section 1.80(b)(4) of the Rules establishes a base forfeiture amount
of $7,000 for each violation involving the marketing of unauthorized
equipment. In determining the appropriate forfeiture amount, Section
503(b)(2)(E) of the Act directs the Commission to consider factors,
such as "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." In the present case, we find
that each instance of marketing of an unauthorized model constitutes a
separate and continuing violation warranting a separate proposed
12. The record establishes that, within the past year, Austin Hughes has
marketed in the United States nine models of Class A digital devices
prior to completing verification testing. Consequently, we find that
Austin Hughes is apparently liable for a base forfeiture of $7,000 for
each of the nine models of devices, for an aggregate proposed
forfeiture of $63,000. Consistent with precedent, we have considered
the statutory factors set forth above and conclude that no adjustment
of the proposed forfeiture from the aggregate base amount is
IV. Ordering CLauses
13. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the Act
and Sections 0.111, 0.311 and 1.80 of the Rules, Austin Hughes
Solutions, Inc., IS NOTIFIED of its APPARENT LIABILITY FOR A
FORFEITURE in the amount of sixty-three thousand dollars ($63,000) for
willfully and repeatedly violating Section 302(b) of the Act and
Section 2.803(a)(2) of the Rules.
14. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules,
within thirty (30) days of the release date of this Notice of Apparent
Liability for Forfeiture, Austin Hughes Solutions, Inc. SHALL PAY the
full amount of the proposed forfeiture or SHALL FILE a written
statement seeking reduction or cancellation of the proposed
15. 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 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 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 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
payment of the full amount of the NAL under an installment plan should
be sent to: Associate Managing Director - Financial Operations, 445
12th Street, S.W., Room 1-A625, Washington, D.C. 20554.
16. The response, if any, must be mailed to the Office of the Secretary,
Federal Communications Commission, 445 12th Street, S.W., Washington,
D.C. 20554, ATTN: Enforcement Bureau - Spectrum Enforcement Division,
and must include the NAL/Acct. No. referenced in the caption.
17. 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
18. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture shall be sent by first class mail and certified mail
return receipt requested to Austin Hughes Solutions Inc., 1636 Pacific
Street, Union City, CA 94587.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
47 U.S.C. S: 302a(b) and 47 C.F.R. S: 2.803(a)(2).
47 U.S.C. S: 302a.
47 C.F.R. S: 2.801 defines a radio frequency device as "any device which
in it its operation is capable of emitting radio frequency energy by
radiation, conduction, or other means."
See 47 C.F.R. S:S: 15.3(h) and 15.3(k).
47 C.F.R. S: 15.101(a). Verification is a procedure where the manufacturer
makes measurements or takes the necessary steps to insure that the
equipment complies with the appropriate technical standards. See 47 C.F.R.
47 C.F.R. S: 2.803(e)(4).
Letter from Austin Hughes Solutions, Inc. to Mr. Brian Butler, Assistant
Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal
Communications Commission (September 1, 2006) ("Response") at Document
See Letter from Kathryn S. Berthot, Deputy Chief, Spectrum Enforcement
Division, Enforcement Bureau to Austin Hughes Electronics, Ltd. (June 9,
2006). The LOI was inadvertently addressed to Austin Hughes' parent
corporation, Austin Hughes Electronics, Ltd., which is based in Hong Kong.
Austin Hughes responded to the LOI.
Austin Hughes is 100 percent owned by Austin Hughes Electronics Ltd,
Response at Document No.: REF-6001.
Specifically, the response indicates that, "AHS began marketing the
devices listed in (a) through (g) of inquiry (1) from November, 2006."
Response at Document No.: REF-6003. However, because Austin Hughes'
response was submitted in September 2006, prior to November 2006, and
several of the items in question were contained in Austin Hughes' November
2005 product catalog, it is apparent that Austin Hughes began marketing
the devices in November 2005.
Response at Document No.: REF-6002.
Id. at Document No.: REF-6001.
Id. at Document No.: REF-EXH-03.
In December 2006, the Division observed that Austin Hughes continued to
advertise the nine devices in the 2005 product catalog on its website.
Response at Document No.: REF-EXH-20.
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1). Section 312(f)(1) of
the Act defines "willful" as "the conscious and deliberate commission or
omission of [any] act, irrespective of any intent to violate" the law. 47
U.S.C. S: 312(f)(1). The legislative history of Section 312(f)(1) of the
Act clarifies that this definition of willful applies to both Sections 312
and 503(b) of the Act, H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51
(1982), and the Commission has so interpreted the term in the Section
503(b) context. See, e.g., Southern California Broadcasting Co.,
Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (1991), recon. denied,
Memorandum Opinion and Order, 7 FCC Rcd 3454 (1992) ("Southern
California"). The term "repeated" means that the act was committed or
omitted more than once, or lasts more than one day. Callais Cablevision,
Inc., Notice of Apparent Liability for Forfeiture, 16 FCC Rcd 1359, 1362
(2001); Southern California, 6 FCC Rcd at 4388.
47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
The information provided by Austin Hughes indicates that the devices are
marketed for use in a commercial or business environment and therefore are
properly classified as Class A digital devices. See supra n. 4 and
See supra n. 13 and accompanying text.
47 C.F.R. S: 2.909(b).
See supra n. 16 and accompanying text.
See supra n. 17 and accompanying text.
Response at Document No.: REF-6001.
47 C.F.R. S: 2.803(e)(1).
See 47 C.F.R. S: 2.803(c).
Response at Document No.: REF-EXH-03, at pages 25, 35 and 36.
See id. at Documents No.: REF-EXH-16 and REF-EXH-20.
47 C.F.R. S: 1.80(b)(4).
47 U.S.C. S: 503(b)(2)(E). See also 47 C.F.R. S: 1.80(b)(4), Note to
paragraph (b)(4): Section II. Adjustment Criteria for Section 503
See, e.g., San Jose Navigation, Inc., Notice of Apparent Liability for
Forfeiture, 21 FCC Rcd 2873 (2006), forfeiture ordered, Forfeiture Order,
FCC 07-3 (released January 16, 2007); Samson Technologies, Inc., Notice of
Apparent Liability for Forfeiture, 19 FCC Rcd 4221, 4225 (2004), consent
decree ordered, 19 FCC Rcd 24509 (2004) (both finding that the marketing
of each separate model of unauthorized equipment constitutes a separate
47 U.S.C. S: 503(b).
47 C.F.R. S:S: 0.111, 0.311 and 1.80.
47 U.S.C. S: 504(a).
See 47 C.F.R. S: 1.1914.
(...continued from previous page)
Federal Communications Commission FCC 07-209
Federal Communications Commission FCC 07-209