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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-08-SE-1071
In the Matter of
) NAL/Acct. No. 200932100015
Comcast Corporation
) FRN 0015401581
)
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 Comcast Corporation ("Comcast") 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 Comcast is
apparently liable for a forfeiture in the amount of twenty-five
thousand dollars ($25,000). We also order Comcast to respond fully to
the LOI within ten (10) days of release of this NAL. If Comcast again
fails to submit a complete response, it will be subject to further
enforcement action.
II. background
2. In response to consumer complaints against Comcast, 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 Comcast 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 Comcast's charges for digital
set-top boxes as well as information regarding Comcast's subscriber
rates and the rates it pays to video programmers.
3. Comcast's LOI Response fails to answer any of the questions posed by
the Bureau, other than to make broad assertions that the company has
complied with all relevant Commission Rules. Rather than answering the
Bureau's inquiries, or even indicating that it is preparing a
response, Comcast claims that the time permitted to prepare an LOI
response was insufficient. Without explicitly asserting that the
Bureau's inquiry is unlawful, Comcast expresses a desire to meet with
the Bureau to discuss "whether and how this LOI complies with the
Bureau's established procedures and guidelines for investigations, as
well as whether and how the LOI complies with the requirements and
policies of the Paperwork Reduction Act [`PRA']." Comcast also states
that it "would like to understand better the bases for the questions
raised in the LOI" because "the LOI appears to be premised on the view
that the migration of cable systems from analog to digital is
problematic" under the Act and Commission Rules. According to Comcast,
however, the statutory and regulatory provisions referenced in the LOI
do not support that view.
III. discussion
A. Failure to Respond Fully to the LOI
4. We find that Comcast'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 Comcast 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
Comcast violated Commission rules. Comcast received the LOI but has
failed to provide anything approaching a full and complete response.
5. The Commission has broad investigatory authority under Sections 4(i),
4(j), and 403 of the Act, FCC 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. As noted above, Comcast 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 regarding the migration of analog programming to a digital
tier, however, allege that the 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, the Bureau determined
that two weeks was an appropriate deadline and we conclude that two
weeks was a reasonable deadline. Comcast does not dispute that this
decision was within our discretion. Thus, Comcast was obligated to
provide the requested information by our deadline. Moreover, we note
that since it submitted its LOI response and while this matter remains
under investigation by the Bureau, Comcast has neither contacted the
Bureau about its response nor provided any supplemental information.
7. We reject Comcast's implication that it was not obligated to respond
fully and completely to the Bureau's inquiry because the LOI allegedly
violates the PRA and is therefore unenforceable. According to a letter
submitted by the National Cable & Telecommunications Association, the
Commission has violated the PRA 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. We find therefore that Comcast'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 under applicable standards set forth in the Act, that
Comcast 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 Comcast is 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 four thousand dollars
($4,000) for failure to respond to Commission communications. We find
that Comcast's failure to even attempt to respond 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 agency'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, Comcast'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 Comcast failed to provide a substantive response to
the LOI 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 Comcast for failing to respond
fully to Commission communications. This forfeiture amount is
consistent with 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 Comcast 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 Comcast 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, Comcast Corporation
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, Comcast 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, Comcast 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. Comcast will also send electronic
notification on the date said payment is made to JoAnn.Lucanik@fcc.gov
and Holly.Berland@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 Holly Berland, Esq., Spectrum Enforcement
Division, FCC, at Holly.Berland@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 Kathryn A. Zachem, Vice
President, Regulatory and State Legislative Affairs, Comcast
Corporation, 2001 Pennsylvania Avenue, N.W., Suite 500, Washington,
D.C. 20006 and James L. Casserly, Counsel for Comcast Corporation,
Wilkie Farr & Gallagher LLP, 1875 K Street, N.W., Washington, DC
20006-1238.
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 Mary McManus,
Comcast Corporation (Oct. 30, 2008) ("LOI").
Letter from Kathryn A. Zachem, Vice President, Regulatory and State
Legislative Affairs, Comcast Corporation, to Holly Berland, Spectrum
Enforcement Division, Enforcement Bureau, Federal Communications
Commission (Nov. 13, 2008) ("LOI Response"). For example, the LOI asks for
details about Comcast's compliance with the Commission's requirements for
notice of service changes to customers and Local Franchising Authorities.
Rather than providing such details, Comcast broadly asserts that "in all
markets where analog channels are migrated to a digital format, Comcast's
policy is to provide advance notice to its customers as well as the
relevant local franchising authorities." Id. at 3.
Id. at 4 (emphasis in original).
Id.
Id. at 5.
Id.
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"); 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 4.
Id.
Id. (attaching 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....").
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 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. Comcast'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 Berry Letter at 2.
See supra note 14.
We do not decide in this NAL whether the failure to respond to an LOI
constitutes a continuing violation.
(Continued from previous page)
(continued ...)
Federal Communications Commission DA 09-83
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Federal Communications Commission DA 09-83