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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-08-SE-1069
In the Matter of
) NAL/Acct. No. 200932100024
Cablevision Systems Corp.
) FRN 0009725276
)
Notice OF apparent liability for forfeiture AND ORDER
Adopted: January 19, 2009 Released: January 19, 2009
By the Chief, Enforcement Bureau:
I. introduction
1. In this Notice of Apparent Liability for Forfeiture and Order ("NAL"),
we find that Cablevision Systems Corp. ("Cablevision") apparently
willfully violated a Commission Order and Section 76.939 of the
Commission's Rules ("Rules") in failing to respond fully to an
Enforcement Bureau Letter of Inquiry. We conclude, pursuant to Section
503(b) of the Communications Act of 1934, as amended ("Act"), that
Cablevision is apparently liable for a forfeiture in the amount of
twenty-five thousand dollars ($25,000). We also order Cablevision to
respond fully to the LOI within ten (10) days of release of this NAL.
If Cablevision again fails to submit a complete response, it will be
subject to further enforcement action.
II. background
2. In response to consumer complaints against Cablevision, on October 30,
2008, the Enforcement Bureau ("Bureau") issued a Letter of Inquiry
("LOI") regarding the company's migration of analog programming to
digital tiers. The LOI sought information concerning instances in
which Cablevision had migrated analog channels to a digital tier,
including the channels affected, whether and how the company notified
customers of the change, whether, in light of the change in service,
the company permitted customers to change their service tier without
charge, and the rates charged customers before and after the channel
migration. The LOI also asked about Cablevision's charges for digital
set-top boxes as well as information regarding Cablevision's
subscriber rates and the rates it pays to video programmers.
3. Cablevision failed to respond fully to many of the inquiries in the
LOI, providing non-responsive or incomplete answers. For instance,
Cablevision fails to respond to questions 5.d, 6 and 7 (which inquire
about communications between the company and its customers regarding
analog-to-digital channel migrations), stating that its records are
not maintained in a manner that allows the Company, in the limited
time available, to gather or produce the responsive documents or
records. Cablevision's response to question 3.a. (which requests the
dates that written notice was provided to affected customers) provides
only "a partial list of relevant dates." In addition, in its response
to question 8.b. (which requests the per-subscriber fees it pays to
video programming distributors for those channels subject of the
inquiry) simply evades the question by stating it is prohibited by
contract from disclosing this information; further claiming that the
"information is highly confidential and production of the specific
information sought, in the manner sought, would be costly and
burdensome."
III. discussion
A. Failure to Respond Fully to the LOI
4. We find therefore that Cablevision's failure to fully respond to the
Bureau's inquiry constitutes an apparent willful violation of a
Commission order and Section 76.939 of the Rules. The Bureau directed
Cablevision to provide certain information related to the movement of
analog channels to digital tiers. This information was necessary to
enable the Commission to perform its enforcement function and evaluate
whether Cablevision violated Commission rules. Cablevision received
the LOI but failed to provide a full and complete response.
5. The Commission has broad investigatory authority under Sections 4(i),
4(j), and 403 of the Act, its Rules, and relevant precedent. Section
4(i) authorizes the Commission to "issue such orders, not inconsistent
with this Act, as may be necessary in the execution of its functions."
Section 4(j) states that "the Commission may conduct its proceedings
in such manner as will best conduce to the proper dispatch of business
and to the ends of justice." Section 403 grants the Commission "full
authority and power to institute an inquiry, on its own motion ...
relating to the enforcement of any of the provisions of this Act."
Pursuant to Section 76.939 of the Rules, a cable operator must comply
with FCC requests for information, orders, and decisions. In carrying
out this obligation, a cable operator also must provide truthful and
accurate statements to the Commission or its staff in any
investigatory or adjudicatory matter within the Commission's
jurisdiction. Lastly, numerous FCC decisions have reaffirmed the
Commission's authority to investigate potential misconduct and punish
those that disregard FCC inquiries. The Commission delegated this
authority to the Enforcement Bureau in Section 0.111(a)(16) of the
Rules.
6. To the extent Cablevision associates itself with the arguments
presented in a letter submitted by the National Cable
Telecommunications Association that the Commission has violated the
Paperwork Reduction Act by sending similar inquiries to 10 or more
persons without first seeking notice and comment and approval by the
Office of Management and Budget, we disagree The LOI complies with the
Paperwork Reduction Act because it is part of a targeted investigation
of "specific individuals or entities," namely those companies that
have been the subject of consumer complaints filed with the
Commission.
7. Cablevision alleges that because of the time allowed, it could not
provide the requested documents and that to do so would likely prove
costly and burdensome. Certain complaints received by the Commission
regarding the migration of analog programming to a digital tier,
however, allege that cable operators are falsely linking the
programming changes with the digital television transition. Because of
the strong public interest in avoiding confusion about the transition
and the rapidly approaching transition date, it was essential that the
Bureau receive the requested information as soon as reasonably
possible. Based on these considerations, we determined that two weeks
was an appropriate deadline. Cablevision does not dispute that this
decision was within our discretion. Thus, Cablevision was obligated to
provide the requested information by our deadline. Moreover, we note
that since it submitted its LOI response and while this matters
remains under investigation by the Bureau, Cablevision has not
provided any supplemental information.
8. Finally, we reject Cablevision's contention that the confidential
nature of some of the information responsive to the Bureau's LOI
absolved Cablevision of its obligation to respond. In addition to
requesting confidential treatment of such material pursuant to the
Commission's well-established, long-standing rules regarding the
treatment of material routinely considered confidential, the
Commission issued a Protective Order in this investigation
specifically to address any concerns regarding the potentially
confidential nature of certain information. Thus, Cablevision had the
option, as set forth by the Commission's General Counsel in his letter
directed to Cablevision, of providing the information under that
Protective Order. We find therefore that Cablevision's failure to
fully respond to the Bureau's inquiry constitutes an apparent willful
violation of a Commission order and Section 76.939 of the Rules.
A. Proposed Forfeiture
9. We conclude under applicable standards set forth in the Act, that
Cablevision is apparently liable for forfeiture for its apparent
willful violation of a Commission Order and Section 76.939 of the
Rules. 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
a Commission rule. We conclude under this standard that Cablevision
is apparently liable for forfeiture for its apparent willful violation
of a Commission Order and Section 76.939 of the Rules.
10. Under Section 503(b)(2)(A) of the Act, we may assess a cable operator
a forfeiture of up to $37,500 for each violation, or for each day of a
continuing violation up to a maximum of $375,000 for a single act or
failure to act. In exercising such authority, we are required to 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."
11. Section 1.80 of the Rules and the Commission's Forfeiture Policy
Statement establish a base forfeiture amount of four thousand dollars
($4,000) for failure to respond to Commission communications. We find
that Cablevision's failure to respond fully to the LOI in the
circumstances presented here warrants a significant increase to this
base amount. Misconduct of this type exhibits contempt for the
Commission's authority and threatens to compromise the Commission's
ability to adequately investigate violations of its rules. Prompt and
full responses to Bureau inquiry letters are essential to the
Commission's enforcement function. In this case, Cablevision's
apparent violations have delayed our investigation and inhibited our
ability to examine allegations raised in consumer complaints and also
potentially touching on an area of critical importance -- the DTV
transition. We further note that Cablevision failed to provide a full
and complete LOI response even after receiving a specific warning from
the Commission's General Counsel that such actions could be subject to
enforcement penalties. Based on these facts, we therefore propose a
twenty-five thousand dollar ($25,000) forfeiture against Cablevision
for failing to respond fully to Commission communications. This
forfeiture amount is consistent with recent precedent in similar
cases, where companies failed to provide responses to Bureau inquiries
concerning compliance with the Commission's rules despite evidence
that the LOIs had been received.
12. We also direct Cablevision to respond fully to the October 30, 2008
LOI within ten (10) days of the release of this Notice of Apparent
Liability for Forfeiture and Order. Failure to do so may constitute an
additional violation subjecting Cablevision to further penalties,
including potentially higher monetary forfeitures.
IV. ordering clauses
13. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the
Act, and Section 1.80 of the Rules, and the authority delegated by
Sections 0.111 and 0.311 of the Commissions Rules, Cablevision Systems
Corp. is NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
amount of twenty-five thousand dollars ($25,000) for its willful
violation of a Commission Order and Section 76.939 of the Rules.
14. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules,
within 30 days of the release date of this Notice of Apparent
Liability for Forfeiture and Order, Cablevision SHALL PAY the full
amount of the proposed forfeiture or SHALL FILE a written statement
seeking reduction or cancellation of the proposed forfeiture.
15. IT IS FURTHER ORDERED that, pursuant to sections 1, 4(i), 4(j), 403 of
the Communications Act of 1934, as amended, 47 U.S.C. S:151, 154(i),
154(j), 403, Cablevision shall fully respond to the October 30, 2008
Letter of Inquiry sent by the Enforcement Bureau in the manner
described by that Letter of Inquiry within ten (10) days of the
release of this Notice of Apparent Liability and Order.
16. 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/Account Number and FRN Number referenced
above. Payment by check or money order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payment by overnight mail may be sent to U.S. Bank - Government
Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payment by wire transfer may be made to ABA Number 021030004,
receiving bank TREAS/NYC, and account number 27000001. For payment by
credit card, an FCC Form 159 (Remittance Advice) must be submitted.
When completing the FCC Form 159, enter the NAL/Account number in
block number 23A (call sign/other ID), and enter the letters "FORF" in
block number 24A (payment type code). Requests for full payment under
an installment plan should be sent to: Chief Financial Officer --
Financial Operations, 445 12th Street, S.W., Room 1-A625, Washington,
D.C. 20554. Please contact the Financial Operations Group Help Desk at
1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions
regarding payment procedures. Cablevision will also send electronic
notification on the date said payment is made to JoAnn.Lucanik@fcc.gov
and Linda.Nagel@fcc.gov.
17. 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. The
response should also be e-mailed to JoAnn Lucanik, Deputy Chief,
Spectrum Enforcement Division, Enforcement Bureau, FCC, at
JoAnn.Lucanik@fcc.gov and Linda M. Nagel, Esq., Spectrum Enforcement
Division, FCC, at Linda.Nagel@fcc.gov.
18. 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.
19. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture and Order shall be sent by first class mail and
certified mail return receipt requested to counsel for Cablevision
Systems Corp., Howard J. Symons, Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C., 701 Pennsylvania Avenue, N.W., Washington, D.C.
20004.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
47 C.F.R. S: 76.939.
47 U.S.C. S: 503(b).
Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission to Howard Symons,
Esq., Counsel for Cablevision Systems Corp. (Oct. 30, 2008) ("LOI").
Letter from Howard Symons, Esq., Counsel for Cablevision Systems Corp. to
Linda M. Nagel, Esq., Spectrum Enforcement Division, Enforcement Bureau,
Federal Communications Commission (Nov. 13, 2008) ("LOI Response"). We
note that Cablevision seeks confidential treatment of the entirety of its
LOI Response. See LOI Response at 7. We do not rule on Cablevision's
request for confidentiality at this time.
LOI Response at 6.
LOI Response at 4.
LOI Response at 6.
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 indicates 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, 4387-88 P:
5 (1991) ("Southern California Broadcasting").
47 U.S.C. S: 154(i).
47 U.S.C. S: 154(j).
47 U.S.C. S: 403.
47 C.F.R. S: 76.939 ("Cable operators shall comply with ... the
Commission's requests for information, orders, and decisions.").
See 47 C.F.R. S: 1.17.
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
7599-7600 P:P: 23-28 (2002) (ordering $100,000 forfeiture for egregious
and intentional failure to certify the response to a Bureau inquiry) ("SBC
Forfeiture Order"); Digital Antenna, Inc., Notice of Apparent Liability
for Forfeiture and Order, 23 FCC Rcd 7600, 7602 (Spectr. Enf. Div., Enf.
Bur. 2008) (proposing $11,000 forfeiture for failure to provide a complete
response to an LOI); BigZoo.Com Corporation, Forfeiture Order, 20 FCC Rcd
3954 (Enf. Bur. 2005) (ordering $20,000 forfeiture for failure to respond
to an LOI).
47 C.F.R. S:0.111(a)(16) (granting the Enforcement Bureau authority to
"[i]dentify and analyze complaint information, conduct investigations,
conduct external audits and collect information, including pursuant to
sections 218, 220, 308(b), 403 and 409(e) through (k) of the
Communications Act, in connection with complaints, on its own initiative
or upon request of another Bureau or Office."). See also 47 C.F.R.
S:S:0.111(a)(13) (Enforcement Bureau has authority to "[r]esolve
complaints regarding multichannel video and cable television service under
part 76 of the Commission's rules"); 0.311 (general delegated authority
for Enforcement Bureau).
LOI Response at 2, citing Letter from Kyle McSlarrow, President and CEO,
National Cable Telecommunications Association, to Chairman Kevin J. Martin
and Commissioners Michael J. Copps, Jonathan S. Adelstein, Deborah Taylor
Tate, and Robert M. McDowell, Federal Communications Commission at 5-7
(Nov. 12, 2008).
See 44 U.S.C. S:3518(c)(1)(B)(ii); 5 C.F.R. S:1320.4(a)(2) (cited in
Letter from Matthew Berry, General Counsel, Federal Communications
Commission, to Matthew A. Brill, Counsel for Time Warner Cable, Inc. at 1
(Nov. 12, 2008) ("Berry Letter")). We do not intend to suggest that the
Commission may only commence an investigation in response to consumer
complaints. As Section 403 of the Act makes clear, the Commission also may
institute an investigation on its own motion. See 47 U.S.C. S:403 ("The
Commission shall have full authority and power at any time to institute an
inquiry, on its own motion, in any case and as to any matter or thing
concerning which complaint is authorized to be made....").
LOI Response at 4, 6-7.
See LOI Attachment, Request for Confidential Treatment, referencing the
Commission's Rules at 47 C.F.R. S: 0.459.
See Berry Letter.
See Cablevision Systems Corp., Protective Order, (DA 08-2490, Enf. Bur.
2008) (Released Nov. 13, 2008).
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 indicates 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, 4387-88 P:
5 (1991) ("Southern California Broadcasting").
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).
47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).
See, e.g., SBC Forfeiture Order, 17 FCC Rcd at 7591.
47 U.S.C. S: 503(b)(2)(A). The Commission has amended Section 1.80(b)(3)
of the Rules, 47 C.F.R. S: 1.80(b)(3), three times to increase the maximum
forfeiture amounts, in accordance with the inflation adjustment
requirements contained in the Debt Collection Improvement Act of 1996, 28
U.S.C. S: 2461. See Amendment of Section 1.80 of the Commission's Rules
and Adjustment of Forfeiture Maxima to Reflect Inflation, 23 FCC Rcd 9845
(2008) (adjusting the maximum statutory amounts for broadcasters and cable
operators from $32,500/$325,000 to $37,500/$375,000); Amendment of Section
1.80 of the Commission's Rules and Adjustment of Forfeiture Maxima to
Reflect Inflation, Order, 19 FCC Rcd 10945 (2004) (adjusting the maximum
statutory amounts for broadcasters and cable operators from
$27,500/$300,000 to $32,500/$325,000); Amendment of Section 1.80 of the
Commission's Rules and Adjustment of Forfeiture Maxima to Reflect
Inflation, Order, 15 FCC Rcd 18221 (2000) (adjusting the maximum statutory
amounts for broadcasters and cable operators from $25,000/$250,000 to
$27,500/$300,000). The most recent inflation adjustment took effect
September 2, 2008 and applies to violations that occur after that date.
See 73 Fed. Reg. 44663-5. Cablevision's apparent violations occurred after
September 2, 2008 and are therefore subject to the higher forfeiture
limits.
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
Forfeitures.
See 47 C.F.R. S: 1.80(b)(4); 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).
Berry Letter at 2.
See supra note 13.
We do not decide in this NAL whether the failure to respond to an LOI
constitutes a continuing violation.
(Continued from previous page)
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Federal Communications Commission DA 09-119
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Federal Communications Commission DA 09-119