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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-08-SE-1068
In the Matter of
) NAL/Acct. No. 2008321000009
Bright House Networks, LLC
) FRN 0018103622
)
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 Bright House Networks, LLC ("Bright House") 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
Bright House is apparently liable for a forfeiture in the amount of
twenty-five thousand dollars ($25,000). We also order Bright House to
respond fully to the LOI within ten (10) days of release of this NAL.
If Bright House again fails to submit a complete response, it will be
subject to further enforcement action.
II. background
2. In response to consumer complaints against Bright House, 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 Bright House 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 Bright House's charges for digital
set-top boxes as well as information regarding Bright House's
subscriber rates and the rates it pays to video programmers.
3. Although Bright House filed a response to the LOI, many of Bright
House's answers to questions in the LOI are non-responsive or
incomplete. For example, Bright House's response to Question 1.g.
(whether Bright House implemented a rate reduction in connection with
any analog-to-digital channel changes) simply states that "all rates
have been set in accordance with applicable rate regulations..."
without addressing the specific question of whether any rate
reductions were implemented to reflect the reduction in the number of
channels accessible to analog-only subscribers. In response to
Question 3.a. (whether Bright House provided written notice to
subscribers of the analog-to-digital channel change), Bright House
provides copies of the notices but not the date on which each notice
was provided to subscribers. In response to Question 4 (regarding
notices to Local Franchising Authorities of the analog-to-digital
migration), Bright House provides only a sampling of the documents
requested, and in response to Question 5.b. (documents furnished to
customer service personnel in responding to subscriber questions about
the analog-to-digital channel change(s)), Bright House fails to
provide any of the requested documents. In response to Questions 6
(complaints regarding analog-to-digital channel change(s)), Bright
House identifies two complaints but fails to provide copies of these
complaints. In response to Question 7 (oral complaints regarding
analog-to-digital channel changes), Bright House admits to receiving
oral complaints but fails to identify the number of such complaints or
the existence of any records relating to these complaints. Bright
House claims that the 14-day time period allowed in which to respond
to these questions and the failure of the LOI to cite specific rule
sections interfered with its ability to respond fully to these
questions.
4. In addition and more troubling, Bright House simply evades Questions
8.b (the per-subscriber fees it pays to video programming distributors
for those channels subject of the inquiry) by responding that there
are no channels to which this question would apply because channels
are not provided to its customers on a fee-per-channel basis. While
Bright House may not price specific channels on a per-subscriber
basis, the question asks for the fees it pays to video programming
distributors on a per-subscriber fee basis. Bright House's response is
non-responsive and misleading to the extent it does pay such fees to
video programming distributors.
III. discussion
A. Failure to Respond Fully to the LOI
5. We find that Bright House'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 Bright
House 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 Bright House violated Commission rules. There is no question
that Bright House received the LOI. To date, however, Bright House has
failed to provide a full and complete response.
6. 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.
7. Bright House alleges that it could not have responded fully to the
LOI because the amount of time allowed for the preparation of the
company's LOI response was too brief. Certain complaints received by
the Commission regarding the migration of analog programming to a
digital tier, however, allege that cable operators were 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, the Bureau determined that two weeks was an appropriate deadline
and we conclude that two weeks was a reasonable deadline. Bright House
does not dispute that this decision was within our discretion. Thus,
Bright House was obligated to respond by our deadline. Moreover, we
note that since it submitted its LOI response and while this matter
remains under investigation by the Bureau, Bright House has neither
contacted the Bureau about its response nor provided any supplemental
information. We find therefore that Bright House'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
8. We conclude that Bright House 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 Bright
House is apparently liable for forfeiture for its apparent willful
violation of a Commission Order and Section 76.939 of the Rules.
9. 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."
10. Section 1.80 of the Rules and the Commission's Forfeiture Policy
Statement establish a base forfeiture amount of $4,000 for failure to
respond to Commission communications. We find that Bright House'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, Bright House's apparent violations have
delayed our investigation and inhibited our ability to examine
allegations raised in consumer complaints and potentially touching on
an area of critical importance -- the DTV transition. We further note
that Bright House 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.
11. Based on these facts, we therefore propose a twenty-five thousand
dollar ($25,000) forfeiture against Bright House for failing to
respond fully to Commission communications. This forfeiture amount is
consistent with precedent in similar cases, where companies failed to
provide complete responses to Bureau inquiries concerning compliance
with the Commission's Rules despite evidence that the LOIs had been
received.
12. We also direct Bright House 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 Bright House 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, Bright House
Networks, LLC 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 thirty (30) days of the release date of this Notice of Apparent
Liability for Forfeiture and Order, Bright House 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, Bright House 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. Bright House will also send electronic
notification on the date said payment is made to JoAnn.Lucanik@fcc.gov
and nissa.laughner@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 Nissa Laughner, Esq., Spectrum Enforcement
Division, FCC, at nissa.laughner@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 Kristi S. Kramersmeier,
Vice President, New Product Development, Bright House Networks, LLC,
5000 Campuswood Drive, East Syracuse, New York, 13057-1254, and to
counsel for Bright House Networks, LLC, Paul Hudson, Esq., Davis
Wright Tremaine LLP, 1919 Pennsylvania Avenue NW, Suite 200,
Washington D.C. 20006.
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 Micah M.
Caldwell, Esq., Counsel for Bright House Networks, LLC (Oct. 30, 2008)
("LOI").
Letter from Kristi S. Kramersmeier, Vice President, New Product
Development, Bright House Networks, LLC to Marlene H. Dortch, Secretary,
Federal Communications Commission (Nov. 13, 2008) ("LOI Response"). We
note that Bright House seeks confidential treatment of the entirety of its
LOI Response. See Letter from Paul B. Hudson, Counsel for Bright House
Networks, LLC, Davis, Wright, Tremaine LLP to Marlene H. Dortch,
Secretary, Federal Communications Commission (Nov. 13, 2008). We do not
rule on Bright House's request for confidentiality at this time.
LOI Response at 4.
The notification dates generally are not discernible from the notices
themselves. See LOI at 3 (requiring Bright House to provide the notice
dates to the extent that information is not available on each notice
itself).
LOI Response at 6.
Id. at 7.
Id. at 7-8.
Id. at 8.
Id. at 3.
Id. at 8.
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 (ordering $100,000 forfeiture for egregious and
intentional failure to certify the response to a Bureau inquiry) ("SBC
Forfeiture Order"); Globcom, Inc., Notice of Apparent Liability for
Forfeiture and Order, 18 FCC Rcd 19893, 19898 n. 36 (2003) (noting delayed
response to an LOI is considered dilatory behavior which may result in
future sanctions) (subsequent history omitted); 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 respond 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); World Communications
Satellite Systems, Inc., Forfeiture Order, 19 FCC Rcd 2718 (Enf. Bur.
2004) (ordering a $10,000 forfeiture for non-responsive reply to an LOI);
Donald W. Kaminski, Jr., Forfeiture Order, 18 FCC Rcd 26065 (Enf. Bur.
2003) (ordering $4,000 forfeiture for individual's 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).
See LOI response at 3, 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: 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. Bright House'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).
See Letter from Matthew Berry, General Counsel, Federal Communications
Commission, to Micah Caldwell, Esq., Counsel for Bright House Networks,
LLC, Fleishman and Harding, LLP at 2 (Nov. 12, 2008).
See supra note 17.
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 09-79
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Federal Communications Commission DA 09-79