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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-09-SE-181
In the Matter of
) NAL/Acct. No. 201032100014
Locus Telecommunications, Inc.
) FRN 0010729515
)
Notice of apparent Liability for forfeiture
Adopted: January 14, 2010 Released: January 14, 2010
By the Chief, Spectrum Enforcement Division, Enforcement Bureau:
I. introduction
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Locus Telecommunications, Inc. ("Locus"), a reseller of digital
wireless services, apparently willfully violated the wireless handset
hearing aid compatibility status report filing requirements set forth
in Section 20.19(i)(1) of the Commission's Rules ("Rules") and
apparently willfully and repeatedly violated the public web site
posting requirements set forth in Section 20.19(h) of the Rules. For
these apparent violations, we propose a total forfeiture in the amount
of twelve thousand dollars ($12,000).
II. BACKGROUND
2. In the 2003 Hearing Aid Compatibility Order, the Commission adopted
several measures to enhance the ability of individuals with hearing
disabilities to access digital wireless telecommunications. The
Commission established technical standards that digital wireless
handsets must meet to be considered compatible with hearing aids
operating in acoustic coupling and inductive coupling (telecoil)
modes. The Commission further established, for each standard,
deadlines by which manufacturers and service providers were required
to offer specified numbers or percentages of digital wireless handsets
per air interface that are compliant with the relevant standard if
they did not come under the de minimis exception. In February 2008, as
part of a comprehensive reconsideration of the effectiveness of the
hearing aid compatibility rules, the Commission released an order
that, among other things, adopted new compatible handset deployment
benchmarks beginning in 2008.
3. Of primary relevance, the Commission also adopted reporting
requirements to ensure that it could monitor the availability of these
handsets and to provide valuable information to the public concerning
the technical testing and commercial availability of hearing
aid-compatible handsets, including on the Internet. The Commission
initially required manufacturers and digital wireless service
providers to report every six months on efforts toward compliance with
the hearing aid compatibility requirements for the first three years
of implementation (May 17, 2004, November 17, 2004, May 17, 2005,
November 17, 2005, May 17, 2006 and November 17, 2006), and then
annually thereafter through the fifth year of implementation (November
19, 2007 and November 17, 2008). In its 2008 Hearing Aid Compatibility
First Report and Order, the Commission extended these reporting
requirements with certain modifications on an open ended basis,
beginning January 15, 2009. The Commission also made clear that these
reporting requirements apply to service providers that fit within the
de minimis exception. In addition, the Commission instituted a
requirement that manufacturers and service providers with
publicly-accessible web sites maintain a list of hearing
aid-compatible handset models and certain information regarding those
models on their web sites. The web site postings, which must be
updated within 30 days of a change in a manufacturer's or service
provider's offerings, will enable consumers to obtain up-to-date
hearing aid compatibility information from their service providers.
4. Locus failed to file the required hearing aid compatibility status
report for the period July 1, 2008 through December 31, 2008 (due
January 15, 2009). Locus also failed to post on its web site required
information concerning the ratings and level of functionality of its
hearing aid-compatible handset models. The Wireless Telecommunications
Bureau ("WTB") referred Locus's apparent violation of the reporting
requirement to the Enforcement Bureau for possible enforcement action.
5. On November 20, 2009, the Enforcement Bureau's Spectrum Enforcement
Division ("Division") issued Locus a Letter of Inquiry ("LOI"), to
which Locus responded on December 11, 2009. In its LOI Response, Locus
admitted that it failed to submit the status report on January 15,
2009. Locus explained that it was unaware of the filing requirements
until it received the LOI. Locus further admitted that while it lists
on its web site the handsets the company currently offers, it failed
to "highlight" those handsets that are hearing aid-compatible, provide
information on the ratings of those models and explain the rating
system. Locus stated that it would take necessary steps to come into
compliance with the requirements of Sections 20.19(h) and (i)(1) of
the Rules.
III. DISCUSSION
A. Failure to File Timely Hearing Aid Compatibility Status Report
6. Section 20.19(i)(1) of the Rules requires service providers to submit
hearing aid compatibility status reports under the current rules
initially on January 15, 2009 (covering the six month period ending
December 31, 2008) and then annually thereafter. These reports are
necessary to enable the Commission to perform its enforcement function
and evaluate whether Locus is in compliance with Commission mandates
that were adopted to facilitate the accessibility of hearing
aid-compatible wireless handsets. These reports also provide valuable
information to the public concerning the technical testing and
commercial availability of hearing aid-compatible handsets. Locus
admitted that it did not file the required hearing aid compatibility
status report on January 15, 2009. Accordingly, we find that Locus
failed to timely file the hearing aid compatibility status reports due
on January 15, 2009 in apparent willful violation of the requirements
set forth in Section 20.19(i)(1) of the Rules.
A. Failure to Post Required Information Concerning Hearing
Aid-Compatible Handset Models on its Public Web Site
7. Section 20.19(h) of the Rules requires that, beginning January 15,
2009, each manufacturer and service provider that operates a
publicly-accessible web site make available on its web site a list of
all hearing aid-compatible handset models currently offered, the
ratings of those models, and an explanation of the rating system.
Section 20.19(h) also requires service providers to post on their web
sites the level of functionality of each model and an explanation of
the service provider's methodology for designating levels of
functionality. In addition, the Commission has stated that any changes
to a manufacturer's or service provider's offerings must be reflected
on its public web site listing within 30 days of the change. These web
site postings provide consumers up-to-date hearing aid compatibility
information.
8. Locus offers a number of wireless phones and plans which are
advertised on its publicly accessible website. Locus admitted,
however, that it did not distinguish the handsets that are hearing
aid-compatible, which would make it impossible for consumers to
determine which handsets had this functionality. In addition, Locus
failed to provide information on the ratings of those models and an
explanation of the rating system. Locus also did not specify the level
of functionality for each model and provide an explanation of its
methodology for designating levels of functionality on its web site.
Accordingly, we find that Locus failed to meet the web site
information posting requirements in apparent willful and repeated
violation of Section 20.19(h) of the Rules.
A. Proposed Forfeiture
9. 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. Under this
standard, we conclude that Locus is apparently liable for forfeiture
for its failure to timely file the required hearing aid compatibility
status report in apparent willful violation of Section 20.19(i)(1) of
the Rules, and for its failure to post the required information
regarding its hearing aid-compatible handsets on its web site in
apparent willful and repeated violation of Section 20.19(h) of the
Rules.
10. The Commission's Forfeiture Policy Statement and Section 1.80(b) of
the Rules set a base forfeiture amount of $3,000 for the failure to
file required forms or information. While the base forfeiture
requirements are guidelines lending some predictability to the
forfeiture process, the Commission retains the discretion to depart
from these guidelines and issue forfeitures on a case-by-case basis,
under its general forfeiture authority contained in Section 503 of the
Act. In exercising such discretion, 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. We have exercised our discretion to set a higher base forfeiture
amount for violations of the wireless hearing aid compatibility
reporting requirements. In the American Samoa Telecommunications
Authority NAL, we found that the status reports are essential to the
implementation and enforcement of the hearing aid compatibility rules.
The Commission relies on these reports to provide consumers with
information regarding the technical specifications and commercial
availability of hearing aid-compatible digital wireless handsets and
to hold the digital wireless industry accountable to the increasing
number of hearing-impaired individuals. We noted that when setting an
$8,000 base forfeiture for violations of the hearing aid-compatible
handset labeling requirements, the Commission emphasized that
individuals with hearing impairments could only take advantage of
critically important public safety benefits of digital wireless
services if they had access to accurate information regarding hearing
aid compatibility features of handsets. We also noted that the
Commission has upwardly adjusted the base forfeiture when
noncompliance with filing requirements interferes with the accurate
administration and enforcement of Commission rules. Because the
failure to file hearing aid compatibility status reports implicates
similar public safety and enforcement concerns, we exercised our
discretionary authority and established a base forfeiture amount of
$6,000 for failure to file a hearing aid compatibility report.
Consistent with ASTCA, we believe the established $6,000 base
forfeiture for violation of the hearing aid compatibility reporting
requirement should apply here, for a proposed forfeiture of $6,000.
12. Failure to file these reports, as is the case here, can have an
adverse impact on the Commission's ability to ensure the commercial
availability of hearing aid-compatible digital wireless handsets, to
the detriment of consumers. Locus's failure to file the report on time
had an adverse impact on the Commission's ability to ensure the
commercial availability of hearing aid-compatible digital wireless
handsets. We do not believe that the circumstances presented warrant
any downward adjustment of the proposed forfeiture amount. It is well
established that a violator's lack of knowledge or erroneous beliefs
are not a mitigating factor warranting a forfeiture reduction.
Accordingly, we propose a forfeiture of $6,000 against Locus for
apparently willfully failing to timely file its January 15, 2009
hearing aid compatibility status report in violation of Section
20.19(i)(1) of the Rules.
13. Turning to the violation of the website posting requirements, no base
forfeiture amount has previously been established for violation of
Section 20.19(h) of the Rules. However, the fact that the Forfeiture
Policy Statement does not specify a base amount does not indicate that
no forfeiture should be imposed. The Forfeiture Policy Statement
states that "any omission of a specific rule violation" from the
forfeiture guidelines "should not signal that the Commission considers
any unlisted violation as nonexistent or unimportant." The Commission
retains the discretion, moreover, to depart from the Forfeiture Policy
Statement and issue forfeitures on a case-by-case basis, under its
general forfeiture authority contained in Section 503 of the Act. As
noted above, the base forfeiture amount for "failure to file required
forms or information" is $3,000. In determining the appropriate
forfeiture amount for violation of the web site information posting
requirements, we take into account that these requirements are
"essential to the proper functioning of our hearing aid compatibility
rules" and serve to increase the availability of up-to-date hearing
aid compatibility information to consumers and service providers.
Thus, we view a manufacturer's or service provider's failure to list
the required hearing aid-compatible handset information on its web
site as similar to its failure to submit the required hearing aid
compatibility status report.
14. In particular, we find that the web site may be the primary means
through which consumers obtain information, and that the updated
information between status reports is likely to be critical to both
consumers and service providers. As the Commission noted in the 2008
Hearing Aid Compatibility First Report and Order, information provided
in the status reports will inevitably become dated over the course of
a year. The web site postings, which must be updated within 30 days of
a change in a manufacturer's or service provider's offerings, will
enable consumers to obtain up-to-date hearing aid compatibility
information from their service providers and will also enable service
providers to readily obtain up-to-date information from their
manufacturer suppliers. Accordingly, the same considerations that led
us to increase the base forfeiture for hearing aid compatibility
status reporting violations also apply to the requirement for web
posting. We therefore establish $6,000 as the base forfeiture amount
for violation of Section 20.19(h).
15. As noted above, Locus acknowledged that in addition to its failure to
identify which of its handset offerings were hearing aid-compatible,
it also failed to provide information about the ratings of its hearing
aid-compatible handset models or an explanation of the rating system
on its web site, and did not specify the level of functionality for
each model and provide an explanation of its methodology for
designating levels of functionality on its web site. Locus presents no
mitigating factors in its LOI Response justifying a downward
adjustment to the $6,000 base forfeiture. Accordingly, we propose a
forfeiture of $6,000 against Locus for apparently willfully and
repeatedly failing to provide required information concerning its
hearing aid-compatible handset models on its public web site in
violation of Section 20.19(h) of the Rules.
16. Thus, we propose an aggregate forfeiture of $12,000 against Locus for
its apparent willful violation of Section 20.19(i)(1) of the Rules and
its apparent willful and repeated violation of Section 20.19(h) of the
Rules.
IV. ORDERING clauses
17. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the
Act, and Section 1.80 of the Rules, Locus IS NOTIFIED of its APPARENT
LIABILITY FOR A FORFEITURE in the amount of twelve thousand dollars
($12,000) for failing to file its hearing aid compatibility status
report in apparent willful violation of Section 20.19(i)(1) of the
Rules, and for failing to post required information concerning its
hearing aid-compatible handset models on its public web site in
apparent willful and repeated violation of Section 20.19(h) of the
Rules.
18. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules,
within thirty days of the release date of this Notice of Apparent
Liability for Forfeiture, Locus SHALL PAY the full amount of the
proposed forfeiture or SHALL FILE a written statement seeking
reduction or cancellation of the proposed forfeiture.
19. 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. Locus will also send electronic
notification on the date said payment is made to Karen.Mercer@fcc.gov
and JoAnn.Lucanik@fcc.gov.
20. The written statement seeking reduction or cancellation of the
proposed forfeiture, if any, must include a detailed factual statement
supported by appropriate documentation and affidavits pursuant to
Sections 1.80(f)(3) and 1.16 of the Rules. The written statement 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 statement should also
be emailed to JoAnn Lucanik at JoAnn.Lucanik@fcc.gov and
Karen.Mercer@fcc.gov.
21. 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.
22. 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 Mr. Nelson J. Gomez, VP-Risk Management,
Locus Telecommunications, Inc., 111 Sylvan Avenue, Englewood, New
Jersey 07632.
FEDERAL COMMUNICATIONS COMMISSION
Kathryn S. Berthot
Chief, Spectrum Enforcement Division
Enforcement Bureau
Locus Telecommunications, Inc. also holds both domestic and international
Section 214 authorizations.
47 C.F.R. S: 20.19(i)(1).
47 C.F.R. S: 20.19(h).
The Commission adopted these requirements for digital wireless telephones
under the authority of the Hearing Aid Compatibility Act of 1988, codified
at Section 710(b)(2)(C) of the Communications Act of 1934, as amended, 47
U.S.C. S: 610(b)(2)(C). See Section 68.4(a) of the Commission's Rules
Governing Hearing Aid-Compatible Telephones, Report and Order, 18 FCC Rcd
16753, 16787 P: 89 (2003); Erratum, 18 FCC Rcd 18047 (2003) ("Hearing Aid
Compatibility Order"); Order on Reconsideration and Further Notice of
Proposed Rulemaking, 20 FCC Rcd 11221 (2005) ("Hearing Aid Compatibility
Reconsideration Order").
See Hearing Aid Compatibility Order, 18 FCC Rcd at 16777 P: 56; 47 C.F.R.
S:S: 20.19(b)(1) and (2).
The term "air interface" refers to the technical protocol that ensures
compatibility between mobile radio service equipment, such as handsets,
and the service provider's base stations. Currently, the leading air
interfaces include Code Division Multiple Access (CDMA), Global System for
Mobile Communications (GSM), Integrated Dispatch Enhanced Network (iDEN)
and Wideband Code Division Multiple Access (WCDMA) a/k/a Universal Mobile
Telecommunications System (UMTS).
See Hearing Aid Compatibility Order, 18 FCC Rcd at 16780 P: 65; 47 C.F.R.
S:S: 20.19(c), (d). The de minimis exception provides that manufacturers
or mobile service providers that offer two or fewer digital wireless
handset models per air interface are exempt from the hearing aid
compatibility deployment requirements, and manufacturers or mobile service
providers that offer three digital wireless handset models per air
interface must offer at least one compliant model. 47 C.F.R. S: 20.19(e).
See Amendment of the Commission's Rules Governing Hearing Aid-Compatible
Mobile Handsets, First Report and Order, 23 FCC Rcd 3406 (2008) ("Hearing
Aid Compatibility First Report and Order"), Order on Reconsideration and
Erratum, 23 FCC Rcd 7249 (2008).
See Hearing Compatibility First Report and Order, 23 FCC Rcd at 3443 P:
91.
Hearing Aid Compatibility Order, 18 FCC Rcd at 16787 P: 89; see also
Wireless Telecommunications Bureau Announces Hearing Aid Compatibility
Reporting Dates for Wireless Carriers and Handset Manufacturers, Public
Notice, 19 FCC Rcd 4097 (Wireless Tel. Bur. 2004).
See Hearing Compatibility First Report and Order, 23 FCC Rcd at 3445-46
P:P: 97-99.
Id. at P: 99.
Id. at 3450 P: 112.
Id.
See Letter from Kathy S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission to Jason Chon,
President and CEO, Locus Telecommunications, Inc. (November 20, 2009)
("LOI").
See Letter from Nelson J. Gomez, VP-Risk Management, Locus
Telecommunications, Inc. to Karen Mercer, Spectrum Enforcement Division,
Enforcement Bureau. Federal Communications Commission (December 11, 2009)
("LOI Response").
Id. at 1.
Id.
Id. at 2.
Id. at 1 and 2. Locus did not take steps to comply with the rules until
after it received the Division's LOI. Apparently, Locus then posted the
required information for its hearing aid-compatible handset models on its
web site at www.shoplocus.com. To date, however, it does not appear that
Locus has submitted its January 15, 2009 report.
47 C.F.R. S: 20.19(i)(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 Southern California Broadcasting
Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 P: 5 (1991),
recon. denied, 7 FCC Rcd 3454 (1992) ("Southern California"); see also
Telrite Corporation, Notice of Apparent Liability for Forfeiture, 23 FCC
Rcd 7231, 7237 P: 12 (2008); Regent USA, Notice of Apparent Liability for
Forfeiture, 22 FCC Rcd 10520, 10523 P: 9 (2007); San Jose Navigation,
Inc., Forfeiture Order 22 FCC Rcd 1040, 1042 P: 9 (2007).
47 C.F.R. S: 20.19(i)(1).
See Hearing Compatibility First Report and Order, 23 FCC Rcd at 3450 P:
112.
See 47 C.F.R. S: 20.19(h).
Section 312(f)(2) defines "repeated" as "the commission or omission of
such act more than once or, if such commission or omission is continuous,
for more than one day." 47 U.S.C. S: 312(f)(2). As with the definition of
"willful," the Commission has interpreted the term to apply to forfeiture
proceedings. See Southern California, supra.
47 C.F.R. S: 20.19(h).
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 Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
7591 P: 4 (2002).
47 C.F.R. S: 1.80(b).
See Forfeiture Policy Statement, 12 FCC Rcd at 17099 P: 22, 17101 P: 29.
See also 47 C.F.R. S:1.80(b)(4) ("The Commission and its staff may use
these guidelines in particular cases [and] retain the discretion to issue
a higher or lower forfeiture than provided in the guidelines, to issue no
forfeiture at all, or to apply alternative or additional sanctions as
permitted by the statute.") (emphasis added).
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 American Samoa Telecommunications Authority, Notice of Apparent
Liability for Forfeiture, 23 FCC Rcd 16432 (Enf. Bur., Spectrum Enf. Div.
2008), response pending ("ASTCA").
See ASTCA, 23 FCC Rcd at 16436-7 P: 10.
Id.
Id.
Id.
See, e.g., Profit Enterprises, Inc., 8 FCC Rcd 2846, 2846 P: 5 (1993)
(denying the mitigation claim of a manufacturer/distributor who thought
that the equipment certification and marketing requirements were
inapplicable, stating that its "prior knowledge or understanding of the
law is unnecessary to a determination of whether a violation existed ...
ignorance of the law is [not] a mitigating factor"); Lakewood Broadcasting
Service, Inc., 37 FCC 2d 437, 438 P: 6 (1972) (denying a mitigation claim
of a broadcast licensee who asserted an unfamiliarity with the station
identification requirements, stating that licensees are expected "to know
and conform their conduct to the requirements of our rules"); Kenneth Paul
Harris, Sr., 15 FCC Rcd 12933, 12935 P: 7 (Enf. Bur. 2000) (denying a
mitigation claim of a broadcast licensee, stating that its ignorance of
the law did not excuse the unauthorized transfer of the station); Maxwell
Broadcasting Group, Inc., 8 FCC Rcd 784, 784 P: 2 (MMB 1993) (denying a
mitigation claim of a noncommercial broadcast licensee, stating that the
excuse of "inadverten[ce], due to inexperience and ignorance of the rules
... are not reasons to mitigate a forfeiture" for violation of the
advertisement restrictions).
47 C.F.R. S: 20.19(i)(1).
See Forfeiture Policy Statement, 12 FCC Rcd at 17099.
Id.
47 C.F.R. S: 1.80(b).
See Hearing Compatibility First Report and Order, 23 FCC Rcd at 3450 P:
112.
Id.
Id.
In this regard, we note that each manufacturer and service provider is
required to continuously maintain the required information concerning its
hearing aid-compatible handset models on its web site and to update the
web sites within 30 days of a change in its handset offerings.
47 C.F.R. S: 20.19(h).
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Federal Communications Commission DA 10-83
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Federal Communications Commission DA 10-83