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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                             )                               
     In the Matter of            File No. EB-07-SE-166       
                             )                               
     XLNT Idea, Inc.             NAL/Acct. No. 200932100004  
                             )                               
     San Diego, California       FRN # 0018234369            
                             )                               


                                FORFEITURE ORDER

   Adopted: December 7, 2009 Released: December 9, 2009

   By the Chief, Spectrum Enforcement Division, Enforcement Bureau:

   I. introduction

    1. In this Forfeiture Order ("Order"), we issue a monetary forfeiture in
       the amount of fourteen thousand dollars ($14,000) against XLNT Idea,
       Inc. ("XLNT Idea") for willful and repeated violations of Section
       302(b) of the Communications Act of 1934, as amended ("Act"), and
       Section 2.803(a) of the Commission's Rules ("Rules"). The noted
       violations involve the marketing of unauthorized digital devices in
       the United States.

    2. On November 4, 2008, the Chief, Spectrum Enforcement Division,
       Enforcement Bureau ("Division") issued a Notice of Apparent Liability
       ("NAL") for Forfeiture to XLNT Idea in the amount of fourteen thousand
       dollars ($14,000). XLNT Idea filed a response to the NAL on December
       5, 2008.

   II. background

    3. On February 11, 2008, the Division issued a letter of inquiry ("LOI")
       to XLNT Idea regarding a complaint received alleging that XLNT Idea
       was marketing the Nexis 100AP AutoPrinter, the Nexis 100AP Publisher,
       and the Xi440 CD/DVD Printer in the United States without the
       appropriate labels as required in Section 15.19 of the Rules, and
       prior to testing for compliance with Sections 15.107 and 15.109 of the
       Rules. XLNT Idea filed its response to the LOI on March 12, 2008, and
       stated that it manufactures the Nexis 100AP AutoPrinter, the Nexis
       100AP Publisher, and the Xi440 CD/DVD Printer at its facility in San
       Diego, California and markets all three devices for both residential
       and commercial use, and that until receipt of the LOI it was unaware
       of the applicable FCC technical and labeling requirements. XLNT Idea
       stated further that subsequent to receipt of the LOI, it had completed
       testing of the devices, and asserted that the testing demonstrates
       that it has satisfied the Declaration of Conformity requirements for
       these devices.

    4. On November 4, 2008, the Division released a NAL finding that XLNT
       Idea marketed the Nexis 100AP AutoPrinter, the Nexis 100AP Publisher,
       and the Xi440 CD/DVD Printer in the United States prior to
       authorization. We noted that the Nexis 100AP AutoPrinter and the Nexis
       100AP Publisher are identical except that the Nexis 100AP Publisher
       can burn cds and dvds; therefore, testing and authorization of the
       Nexis 100AP Publisher is sufficient to demonstrate compliance of the
       Nexis 100AP AutoPrinter. Thus, the NAL found that XLNT Idea marketed
       two distinct unauthorized devices prior to authorization. XLNT Idea's
       marketing of each of these devices was found to be a separate
       continuing violation. Accordingly, the Division proposed a forfeiture
       in the amount of $14,000 for the apparent willful and repeated
       violations of Section 302(b) of the Act and Section 2.803(a) of the
       Rules.

    5. In its NAL Response, XLNT Idea does not dispute that it marketed and
       manufactured two distinct unauthorized devices prior to authorization.
       Instead, it only seeks a reduction or cancellation of the proposed
       forfeiture due to an inability to pay. In support of this claim, XLNT
       Idea asserts that its business is funded by debt and operates with
       limited resources. XLNT explains that even after three years and a few
       successful products, it is not financially able to control its
       manufacturing process. XLNT Idea also asserts that it could not afford
       expensive consultants to guide it through regulatory and other legal
       issues. XLNT Idea states that the proposed forfeiture is a heavy
       burden. To substantiate these claims, XLNT Idea submits federal tax
       returns for 2006, 2007, and a financial statement for 2008.

   III. DISCUSSION

    6. The forfeiture amount proposed in this case was assessed in accordance
       with Section 503(b) of the 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.

    7. XLNT Idea, in responding to the NAL, does not dispute that it marketed
       and manufactured two distinct unauthorized devices prior to
       authorization, and it only seeks a reduction or cancellation of the
       proposed forfeiture due to an inability to pay. We have considered
       XLNT Idea's response to the NAL in light of the above statutory
       factors, our Rules, and the Forfeiture Policy Statement. We conclude
       that XLNT Idea willfully and repeatedly violated Section 302(b) of the
       Act and Section 2.803(a) of the Rules and that no mitigating
       circumstances warrant cancellation or further reduction of the
       proposed forfeiture amount.

    8. In analyzing financial hardship claims, the Commission generally looks
       to a company's gross revenues as a reasonable and appropriate
       yardstick to determine their ability to pay assessed forfeitures.
       Indeed, the Commission has stated that if a company's gross revenues
       are sufficiently large, the fact that net losses are reported, alone,
       does not necessarily signify inability to pay.

    9. Based on the documentation provided, we find that XLNT Idea has not
       demonstrated that a reduction or cancellation of the proposed
       forfeiture is warranted. XLNT Idea's financial documents for the most
       recent three-year period reflect gross revenues that effectively
       negate the financial hardship claim as it relates to the forfeiture
       amount before us. Specifically, the proposed forfeiture of $14,000
       expressed as a percentage of XLNT Idea's gross revenues is
       significantly less than the threshold used to determine an inability
       to pay reduction. In this case, the forfeiture represents a percentage
       of XLNT Idea's gross revenues that falls well within the percentage
       range generally considered payable. As the Commission has recognized,
       if a violator could escape meaningful sanctions for violations of the
       Rules by seeking an inability to pay reduction that is unsupported by
       its gross revenues, it would be in a position to undermine the
       remedial purposes of Section 503 of the Act.

   10. As a result of our review, we conclude that that no reduction or
       cancellation is warranted for an inability to pay. Accordingly, we
       find that XLNT Idea willfully and repeatedly violated Section 302(b)
       of the Act and Section 2.803(a) of the Rules and that a forfeiture in
       the amount of $14,000 is appropriate.

   IV. ORDERING Clauses

   11. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the
       Act, and Sections 0.111, 0.311 and 1.80(f)(4) of the Rules, XLNT Idea,
       Inc. IS LIABLE FOR A MONETARY FORFEITURE in the amount of fourteen 
       thousand dollars ($14,000) for willful and repeated violation of
       Section 302(b) of the Act and Section 2.803(a) of the Rules.

   12. 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. XLNT Idea, Inc. will also send
       electronic notification on the date said payment is made to Celia
       Lewis at Celia.Lewis@fcc.gov and to Ricardo Durham at
       Ricardo.Durham@fcc.gov.

   13. IT IS FURTHER ORDERED that a copy of this Order shall be sent by first
       class mail and certified mail return receipt requested to Chalapathi
       Rao Atluri, Chief Executive Officer, XLNT Idea, Inc., 6262 Ferris Sq.,
       San Diego, CA 92121.

   FEDERAL COMMUNICATIONS COMMISSION

   Kathryn S. Berthot

   Chief, Spectrum Enforcement Division

   Enforcement Bureau

   47 U.S.C. S: 302a(b).

   47 C.F.R. S: 2.803(a).

   XLNT Idea, Inc., Notice of Apparent Liability for Forfeiture, 23 FCC Rcd
   16417 (Enf. Bur., Spectrum Enf. Div. 2008) ("NAL").

   See Letter from Chalapathi R. Atluri, CEO, XLNT Idea, Inc., to the
   Spectrum Enforcement Division, Enforcement Bureau, Federal Communications
   Commission (December 3, 2008) ("NAL Response").

   See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
   Enforcement Bureau, Federal Communications Commission to XLNT Idea, Inc.
   (February 11, 2008).

   47 C.F.R. S: 15.19.

   47 C.F.R. S:S: 15.107, 15.109.

   See Letter from Michael J. Schrier, Esquire, counsel for XLNT Idea, Inc.,
   to Gabriel Collazo, Spectrum Enforcement Division, Enforcement Bureau,
   Federal Communications Commission (March 12, 2008) ("LOI Response").

   Id. at 2-3, 7-8, 12.

   See LOI Response at 4-6, 8-10, 13-14. XLNT Idea noted that because the
   Nexis 100AP AutoPrinter and Nexis 100AP Publisher are identical except
   that the Nexis 100AP AutoPrinter cannot burn cds or dvds, it was only
   necessary to test the Nexis 100AP Publisher and the tests results for the
   Nexis 100AP Publisher also demonstrate compliance of the Nexis 100AP
   AutoPrinter. Id. at 4. The test report covering the Nexis 100AP
   AutoPrinter and Nexis 100AP Publisher was dated February 28, 2008. The
   test report for the Xi440 CD/DVD Printer was dated March 8, 2008.

   NAL, 23 FCC Rcd at 16420.

   Id., citing San Jose Navigation, Inc., Notice of Apparent Liability for
   Forfeiture,  21 FCC Rcd 2873 (2006), forfeiture ordered, 22 FCC Rcd 1040
   (2007), response pending; 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
   violation).

   NAL Response at 1.

   Id.

   Id.

   Id.

   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).

   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 Sections 312 and 503(b) of the Act, H.R. REP. No. 97-765, 51
   (Conf. Rep.), and the Commission has so interpreted the terms in the
   Section 503(b) context. See Southern California Broadcasting Co.,
   Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387-88 (1991), recon.
   denied, 7 FCC Rcd 3454 (1992) ("Southern California").

   Section 312(f)(1) of the Act defines "repeated" as "the commission or
   omission of [any] act more than once or, if such commission or omission is
   continuous, for more than one day." 47 U.S.C. S: 312(f)(1). See also
   Southern California, 6 FCC Rcd at 4388 (applying this definition of
   repeated to Sections 312 and 503(b) of the Act).

   See PJB Communications of Virginia, Inc., Memorandum Opinion and Order, 7
   FCC Rcd 2088, 2089 (1992) ("PJB Communications"); see also Forfeiture
   Policy Statement, 12 FCC Rcd at 17106-07.

   See PJB Communications, 7 FCC Rcd at 2089 (noting that information about
   net losses may be relevant in assessing an inability to pay claim, but
   where "gross revenues are sufficiently great ... the mere fact that a
   business is operating at a loss does not itself mean that it cannot afford
   to pay a forfeiture.") See also Local Long Distance, Inc., Forfeiture
   Order, 15 FCC Rcd 24385, 24389 (2000), recon. denied, 16 FCC Rcd 10023,
   10025 (2001); Independent Communications, Inc., Memorandum Opinion and
   Order, 14 FCC Rcd 9605 (1999), recon. denied, 15 FCC Rcd 16060 (2000);
   Frank Neely, Forfeiture Order, 19 FCC Rcd 16135, 16135-16136 (Enf. Bur.
   2007), recon. denied, 22 FCC Rcd 1434, 1436 (Enf. Bur. 2007) ("Frank
   Neely"); Hoosier Broadcasting Corporation, Forfeiture Order, 14 FCC Rcd
   3356 (Consumer Info. Bur. 1999), recon. denied, 15 FCC Rcd 8640, 8641
   (Enf. Bur. 2002) ("Hoosier Broadcasting"); Side by Side, Inc., Forfeiture
   Order, 23 FCC Rcd 7393, 7395 (Enf. Bur., Spectrum Enf. Div. 2008), review
   pending.

   See, e.g., PJB Communications, 7 FCC Rcd at 2089 (forfeiture not deemed
   excessive where it represented approximately 2.02 percent of the
   violator's gross revenues); Hoosier Broadcasting, 15 FCC Rcd at 8641
   (forfeiture not deemed excessive where it represented approximately 7.6
   percent of the violator's gross revenues).

   See, e.g., Frank Neely, 22 FCC Rcd at 1435.

   47 C.F.R. S:S: 0.111, 0.311, 1.80(f)(4).

   (Continued from previous page ...)

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   Federal Communications Commission DA 09-2545

   2

   Federal Communications Commission DA 09-2545