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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of
)
Cricket Communications, Inc.
) File No.: EB-10-SE-051
Licensee of Station WQJE535
) NAL/Acct. No.: 201132100023
Midway, Kentucky
) FRN: 0010202521
Licensee of Station WQJF544
)
Frankfort, Kentucky
)
)
Order and NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: February 1, 2011 Released: February 1, 2011
By the Acting Chief, Spectrum Enforcement Division, Enforcement Bureau:
I. INTRODUCTION
1. In this Order and Notice of Apparent Liability for Forfeiture ("NAL"),
we find Cricket Communications, Inc. ("Cricket"), licensee of common
carrier fixed point-to-point microwave stations, call signs WQJE535,
Midway, Kentucky, and WQJF544, Frankfort, Kentucky, apparently liable
for a forfeiture in the amount of twenty thousand dollars ($20,000)
for willful violation of section 1.17(a)(2) of the Commission's rules
("Rules"). The noted violation involves Cricket's provision of
incorrect material factual information to the Commission regarding the
construction of station WQJE535 without a reasonable basis for
believing that the information was correct and accurate. We also
admonish Cricket for operating stations WQJE535 and WQJF544 for seven
months prior to obtaining Commission authority in violation of section
301 of the Communications Act of 1934, as amended, ("Act") and section
1.903(a) of the Rules, and we direct Cricket to take all necessary and
appropriate steps to ensure future compliance.
II. BACKGROUND
2. On August 11, 2008, and August 20, 2008, the Wireless
Telecommunications Bureau ("WTB") issued to Cricket licenses for two
common carrier fixed point-to-point microwave radio service stations,
call signs WQJE535, Midway, Kentucky, and WQJF544, Frankfort,
Kentucky, respectively. The deadline for constructing station WQJE535
was February 11, 2010, and the deadline for constructing station
WQJF544 was February 20, 2010. Section 1.946 of the Rules requires
licensees commencing service or operations within the construction
period to notify the Commission by filing FCC Form 601 within 15 days
of the expiration of the construction period. On February 2, 2010,
Cricket filed a construction notification stating that station WQJE535
was constructed on October 15, 2008. On March 5, 2010, Cricket filed a
modification application for station WQJE535 "to correct the
construction date provided in its buildout notification and to seek a
limited waiver of 47 C.F.R. S:1.903 for its inadvertent failure to
file an application prior to the construction and operation of the
microwave station." In the modification application, Cricket reported
that since filing the buildout notice, it determined that the facility
was constructed and placed into operation more than two years earlier,
on January 23, 2008. Similarly, on March 5, 2010, Cricket filed a
construction notification for station WQJF544 stating that this
station was constructed and placed into operation on January 23, 2008.
In its construction notification for station WQJF544, Cricket also
requested a waiver of section 1.903 of the Rules for failure to file
an application before its construction and operation of station
WQJF544. On May 5, 2010, WTB denied Cricket's requests for waiver of
section 1.903 of the Commission's rules, granted its modification
application to correct the inaccurate construction date provided for
station WQJE535, and accepted the construction notification for
station WQJF544.
3. Because Cricket reported an inaccurate construction date and because
it appeared that Cricket operated its microwave stations prior to
obtaining authority, the WTB referred this case to the Enforcement
Bureau for investigation and possible enforcement action. On June 1,
2010, the Enforcement Bureau's Spectrum Enforcement Division
("Division") issued a letter of inquiry ("LOI") to Cricket.
4. In its July 6, 2010 response to the LOI, Cricket maintained that in
the past, it has relied upon outside contractors to build its
microwave sites, obtain the required Commission authorizations to
operate the sites, and file the associated construction notices.
Cricket stated that after a receiving a notification from the
Commission regarding the upcoming deadlines for constructing stations
WQJE535 and WQJF544 in November of 2009, it discovered that its
engineering consultant retained in connection with the installation of
both facilities had not filed construction notifications for these
sites. Cricket asserted that in collecting information in connection
with the preparation of the construction notifications for these two
stations, Cricket's personnel were also gathering information on all
of its microwave sites to confirm that notifications had been filed
for the other sites. According to Cricket, it believes that the
construction date for station WQJE535 was misidentified as a result of
a clerical error or miscommunications between the employees who were
responsible for gathering information for submission in the
construction notification. In preparing the construction notification
for station WQJF544, Cricket asserted, it discovered that its
engineering consultant failed to obtain the required authorization
prior to commencing operations, and that an incorrect construction
date had been provided for station WQJE535. Cricket averred that
immediately upon this discovery, it filed a modification application
for station WQJE535 notifying the Commission of the error, and
identifying the correct construction and commencement of operation
dates as January 23, 2008.
III. DISCUSSION
A. Cricket Apparently Provided Incorrect Material Factual
Information to the Commission
5. Section 1.17 of the Rules states that no person may provide, in any
written statement of fact, "material factual information that is
incorrect or omit material information that is necessary to prevent
any material factual statement that is made from being incorrect or
misleading without a reasonable basis for believing that any such
material factual statement is correct and not misleading." Any holder
of any Commission authorization is subject to the Rule. In expanding
the scope of section 1.17 of the Rules in 2003 to include written
statements that are made without a reasonable basis for believing the
statement is correct and not misleading, the Commission explained that
this requirement was intended to more clearly articulate the
obligations of persons dealing with the Commission, ensure that they
exercise due diligence in preparing written submissions, and enhance
the effectiveness of the Commission's enforcement efforts. Thus, even
in the absence of an intent to deceive, a false statement provided
without a reasonable basis for believing that the statement is correct
and not misleading constitutes an actionable violation of section 1.17
of the Rules.
6. As the Commission has stated, parties must "use due diligence in
providing information that is correct and not misleading to the
Commission, including taking appropriate affirmative steps to
determine the truthfulness of what is being submitted. A failure to
exercise such reasonable diligence would mean that the party did not
have a reasonable basis for believing in the truthfulness of the
information." In the construction notification that Cricket filed on
February 2, 2010, it stated that station WQJE535 was constructed on
October 15, 2008. As noted above, however, Cricket subsequently filed
a modification application correcting the construction date that it
had previously provided, and identified the actual construction date
as January 23, 2008. Had Cricket exercised even minimal diligence
prior to the submission of its construction notification, it would not
have submitted incorrect and misleading material factual information
in its construction notification. Although there is insufficient
information to conclude that Cricket's provision of incorrect material
factual information was intentional in violation of section 1.17(a)(1)
of the Rules, we find that Cricket apparently willfully violated
section 1.17(a)(2) of the Rules by providing material factual
information that was incorrect without a reasonable basis for
believing that the information was correct and not misleading.
A. Operation of Stations without Authorization
7. Section 301 of the Act and section 1.903(a) of the Rules prohibit the
use or operation of any apparatus for the transmission of energy or
communications or signals by a wireless radio station except under and
in accordance with a Commission granted authorization. Cricket was
issued two licenses for stations WQJE535 and WQJF544 on August 11,
2008, and August 20, 2008, respectively. As Cricket has acknowledged,
however, both of these stations were constructed and placed into
operation on January 23, 2008, approximately seven months prior to
issuance of the licenses. Therefore, we find that Cricket violated
section 301 of the Act and section 1.903(a) of the Rules by operating
stations WQJE535 and WQJF544 without authorization.
A. Proposed Forfeiture
8. Section 503(b) of the Act authorizes the Commission to assess a
forfeiture for each willful or repeated violation of the Act or of any
rule, regulation, or order issued by the Commission under the 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."
9. Under the Forfeiture Policy Statement and section 1.80 of the Rules,
the base forfeiture amount for misrepresentation or lack of candor is
the statutory maximum. Therefore, for common carriers such as Cricket,
the base forfeiture is $150,000 for each violation or each day of a
continuing violation. Given the totality of the circumstances, we find
a significant forfeiture appropriate. The Commission has stated that
"[we rely] heavily on the truthfulness and accuracy of the information
provided to us. If information submitted to us is incorrect, we cannot
properly carry out our statutory responsibilities." Cricket's failure
to exercise due diligence to ensure that the information provided in
its notification of construction was correct and not misleading
hampered the Commission's ability to properly carry out its statutory
responsibilities and unnecessarily consumed Commission resources.
10. Cricket asserted that its inaccurate reporting of the construction
date for station WQJE535 was the result of a clerical error or
miscommunication on the part of its employees. However, it is well
established that licensees are responsible for the acts and omissions
of their employees or contractors. We also note that Cricket failed to
disclose the accurate construction and operation dates for stations
WQJE535 and WQJF544 in the initial license applications filed in June
of 2008 and at the time of the grants in August of 2008. Cricket only
revealed the correct date of construction and operation a full two
years after the stations first began operating. Accordingly,
considering all of the enumerated factors and the particular
circumstances of this case, we find that a forfeiture of $25,000 is
warranted here for Cricket's apparent willful violation of section
1.17(a)(2). We find, however, that a downward adjustment of the
proposed forfeiture from $25,000 to $20,000 is warranted because
Cricket made voluntary disclosures to Commission staff, albeit
belatedly, and undertook corrective measures after learning of its
violations, but prior to any Commission inquiry or initiation of
enforcement action.
11. We also admonish Cricket for its operation of stations WQJE535 and
WQJF544 for seven months in violation of section 301 of the Act and
section 1.903(a) of the Rules, and direct Cricket to take all
necessary and appropriate steps to ensure compliance going forward. We
caution Cricket to exercise greater diligence in the future, and we
emphasize the importance of accuracy and completeness in the
application process.
IV. ORDERING CLAUSES
12. Accordingly, IT IS ORDERED that, pursuant to section 503(b) of the
Communications Act of 1934, as amended, and sections 0.111, 0.311, and
1.80 of the Commission's Rules, Cricket Communications, Inc. IS
hereby NOTIFIED of this APPARENT LIABILITY FOR A FORFEITURE in the
amount of twenty thousand dollars ($20,000) for providing incorrect
material factual information to the Commission without a reasonable
basis for believing that the information was correct and accurate in
apparent willful violation of section 1.17(a)(2) of the Rules.
13. IT IS FURTHER ORDERED that Cricket Communications, Inc. IS ADMONISHED
for its violation of section 301 of the Act and section 1.903(a) of
the Rules.
14. IT IS FURTHER ORDERED that, pursuant to section 1.80 of the
Commission's Rules within thirty days of the release date of this
Notice of Apparent Liability for Forfeiture, Cricket Communications,
Inc., SHALL PAY the full amount of the proposed forfeiture or SHALL
FILE a written statement seeking reduction or cancellation of the
proposed forfeiture.
15. 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 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. Cricket Communications, Inc. must also
send electronic notification on the date said payment is made to Kathy
Harvey at Kathy.Harvey@fcc.gov and to Ricardo Durham at
Ricardo.Durham@fcc.gov.
16. 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 must also
be emailed to Kathy Harvey at Kathy.Harvey@fcc.gov and Ricardo Durham
at Ricardo.Durham@fcc.gov.
17. 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 ("GAAP"); 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.
18. IT IS FURTHER ORDERED that, pursuant to sections 4(i) and 4(j) of the
Act and section 1.17 of the Rules, Cricket Communications SHALL TAKE
ALL NECESSARY AND APPROPRIATE STEPS to ensure future compliance with
section 1.17(a)(2) of the Rules, and with section 301 of the Act and
section 1.903(a) of the Rules.
19. IT IS FURTHER ORDERED that a copy of this Order and Notice of Apparent
Liability for Forfeiture shall be sent by Certified Mail, Return
Receipt Requested, and regular mail, to Robert J. Irving, Jr., Senior
Vice President, Cricket Communications, Inc., 5887 Copley Drive, San
Diego, CA 92111, and to James H. Barker, Esq., Latham & Watkins, LLP,
555 Eleventh Street, N.W., Suite 1000, Washington, D.C. 20004-1304.
FEDERAL COMMUNICATIONS COMMISSION
Ricardo M. Durham
Acting Chief, Spectrum Enforcement Division
Enforcement Bureau
47. C.F.R. S: 1.17(a)(2).
47 U.S.C. S: 301.
47 C.F.R. S: 1.903.
File Nos. 0003483193 (WQJE535, granted August 11, 2008) and 0003483929
(WQJF544, granted August 20, 2008). Cricket filed its initial applications
for these licenses on June 23, 2008, and on June 24, 2008, respectively.
See 47 C.F.R. S: 101.63 (stating that "[c]onstruction of any authorized
facility or frequency must be completed by the date specified in the
license as pursuant to section 1.946").
See 47 C.F.R. S: 1.946.
File No. 0004113568 (February 3, 2010).
File No. 0004149031 (March 5, 2010) (Ex.A: Description of Modification and
Request for Waiver).
Id.
File No. 0004149018 (March 5, 2010) (Ex.A: Description of Notification and
Request for Waiver).
File No. 0004149031 (granted May 5, 2010); File No. 0004149018 (accepted
May 5, 2010). Actions on Cricket's applications were without prejudice to
enforcement action for Cricket's unauthorized operation of stations
WQJE535 and WQJF544 and the inaccurate reporting of the construction date
for station WQJE535.
Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission, to Robert J.
Irving, Jr., Senior Vice President, Cricket Communications, Inc. (June 1,
2010).
Letter from James H. Barker, Esq., Counsel for Cricket Communications,
Inc., to Kathy Harvey, Spectrum Enforcement Division, Enforcement Bureau,
Federal Communications (July 6, 2010) ("LOI Response"). Cricket requested
an extension until July 6, 2010 to file its LOI Response. Cricket's
extension request was granted on June 30, 2010.
LOI Response at 3.
Id.
Id.
Id. at 3-4.
47 C.F.R. S: 1.17(a)(2).
47 C.F.R. S: 1.17(b)(2).
See Amendment of Section 1.17 of the Commission's Rules Concerning
Truthful Statements to the Commission, Report and Order, 18 FCC Rcd 4016,
4021 (2003), recon. denied, Memorandum Opinion and Order, 19 FCC Rcd 5790,
further recon. denied, Memorandum Opinion and Order, 20 FCC Rcd 1250
(2004) ("Amendment of Section 1.17").
See id. at 4017 (stating that the revision to section 1.17 of the Rules is
intended to "prohibit incorrect statements of omissions that are the
results of negligence, as well as an intent to deceive").
Amendment of Section 1.17, 18 FCC Rcd at 4021.
See Invision Industries, Inc., Notice of Apparent Liability for
Forfeiture, 23 FCC Rcd 13095, 13103-04 (2008) (finding that a television
importer's failure to exercise due diligence to ensure that the
information provided in its LOI Response was correct and not misleading
constituted a violation of section 1.17(a)(2) of the Rules) ("Invision");
Syntax-Brillian Corporation, Forfeiture Order and Notice of Apparent
Liability for Forfeiture, 23 FCC Rcd 6323, 6342 (2008) (finding that a
television manufacturer apparently provided incorrect material information
concerning its importation and interstate shipment of non-DTV-compliant
televisions without a reasonable basis for believing that the information
was correct and not misleading, in violation of section 1.17(a)(2) of the
Rules); Citicasters License, L.P., et al., Memorandum Opinion and Order
and Notice of Apparent Liability, 22 FCC Rcd 19324, 19338 (2007)
(forfeiture paid) (finding that a licensee's false certification that it
had not violated the Act or any Commission Rules during the preceding
license term had no reasonable basis and was not made with the intent to
deceive the Commission but nonetheless, violated section 1.17(a)(2) of the
Rules) ("Citicasters"). See also Cardinal Broadband LLC, aka Sovereign
Telecommunications, Notice of Apparent Liability for Forfeiture, 23 FCC
Rcd 12233, 12237 (Enf. Bur. 2008) ("Cardinal Broadband LLC"), response
pending (finding that an interconnected VoIP provider provided without a
reasonable basis for believing that the information was correct and
accurate incorrect material factual information in violation of section
1.17(a)(2) of the Rules).
47 C.F.R. 1.17(a)(1).
See, e.g., Cardinal Broadband LLC, 23 FCC Rcd at 12237.
47 U.S.C. S: 301; 47 C.F.R. S: 1.903(a).
47 U.S.C. S: 503(b).
47 U.S.C. S: 503(b)(2)(E).
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, 17113 (1997) ("Forfeiture Policy Statement"), recon.
denied, 15 FCC Rcd 303 (1999).
47 C.F.R. S: 1.80(b)(4), Note to Paragraph (b)(4): Section I. Base Amounts
for Section 503 Forfeitures.
See, e.g., SBC Communications, Inc., Notice of Apparent Liability, 16 FCC
Rcd 19091, 19120 (2001) (statutory maximum forfeiture amount proposed for
intentional violation of section 1.17 of the Rules) (subsequent history
omitted).
See, e.g., Access.1 New York License Company, LLC, Notice of Apparent
Liability, 22 FCC Rcd 15205, 15209 P: 11 (Media Bur. 2007) (forfeiture
amount proposed for provision of incorrect material factual information
adjusted downward from statutory maximum amount of $32,500 to $10,000 on
basis that violation was unintentional). Compare Syntax-Brillian Further
NAL, 23 FCC Rcd at 6343 P: 46 (proposing statutory maximum forfeiture
($11,000) for apparent negligent misrepresentation based on totality of
the circumstances; company corrected the erroneous information only after
the Commission had relied on it in an earlier enforcement action);
Intelsat North America, Notice of Apparent Liability, 21 FCC Rcd 9246,
9250 P: 12 (Enf. Bur., Inv. & Hearings Div. 2006) (proposing statutory
maximum forfeiture ($11,000) for apparent negligent misrepresentation
based on the totality of the circumstances, including ability to pay and
the Commission's reliance on the incorrect information). We note that in
the Syntax-Brillian and Intelsat cases, our statutory maximum forfeiture
was significantly less than that applicable to broadcast licensees and
common carriers.
In the Matter of Amendment of Section 1.17 of the Commission's Rules
Concerning Truthful Statements to the Commission, Notice of Proposed
Rulemaking, 17 FCC Rcd 3296, 3297 P: 3 (2002).
Construction notifications serve the important purpose of maintaining the
integrity of information in the Commission's licensing databases by
correctly reflecting the actual record. See Amendment of the Commission's
Rules Regarding Dedicated Short-Range Communication Services in the
5.850-5.925 GHz Band (5.9 GHz Band), Report and Order, 19 FCC Rcd 2458,
2495 P: 83 (2004). The construction notification requirement also ensures
that licensees have met their responsibility. See Paging Systems, Inc.,
Order, 21 FCC Rcd 7225 (WTB PSCID 2006).
See, e.g., Wagenvoord Broadcasting Co., 35 FCC 2d 361, 361-62 P: 3 (1972)
(finding that it is the broadcast licensee's responsibility to comply with
the pre-sunrise restrictions, and denying the claim that the forfeiture
should be cancelled or mitigated because it relied upon its consulting
engineer's erroneous advice); Charter Communications VI, LLC, 17 FCC Rcd
16516, 16518-19 P:P: 8-9 (Enf. Bur. 2002) (finding that it is the cable
operator's responsibility to comply with signal leakage standards and a
prior cease operation order, and denying the claim that the forfeiture
should be reduced because the violations were due to its employees' lapses
and misunderstandings).
We note that all applicants for common carrier fixed point-to-point
microwave station licenses must certify that "all statements made in th[e]
applications and in the exhibits, attachments, or documents incorporated
by reference...are true, complete, correct, and made in good faith." See
Form 601; General Certification Statements. Furthermore, pursuant to
section 1.65 of the Rules, applicants for Commission licenses are
"responsible for the continuing accuracy and completeness of information
furnished in a pending application." 47 C.F.R. S: 1.65(a). Rather than
providing complete and accurate information, the dates provided by Cricket
in its filings led the Commission to believe that the company did not
construct or operate until two months after WTB granted the application,
when, in fact, Cricket began operating the stations five months prior to
seeking authorization and seven months prior to the grants.
See Cardinal Broadband LLC, 23 FCC Rcd at 12237 (proposing a $25,000
forfeiture against an interconnected VoIP provider and common carrier for
its violation of section 1.17(a)(2) of the Rules).
See, e.g., Radio One Licenses, Inc., 18 FCC Rcd 15964, 15965 P: 4 (2003),
recon. denied, 18 FCC Rcd 25481 (2003); Emery Telephone, 13 FCC Rcd 23854,
23858 (1998), recon. denied , 15 FCC Rcd 7181 (1999); Petracom of
Texarkana, LLC, 19 FCC Rcd 8096, 8097-98 P:P: 5-6 (Enf. Bur. 2004);
American Family Association, 17 FCC Rcd 181135, 18137 (Enf. Bur. 2002),
recon. denied, 18 FCC Rcd 2413 (Enf. Bur. 2003); but see American Paging,
Inc., 12 FCC Rcd 10417, 10420 (WTB, Enf. and Consumer Info. Div., 1997)
(finding that the mitigating effect of voluntary disclosure was abrogated
by the licensee's delay).
See 47 U.S.C. S: 503(b)(6); see also note 4 supra.
Willful false statements made to the Commission in the context of a
license application are punishable by fine and/or imprisonment (18 U.S.C.
S: 1001), and/or revocation of any station license or construction permit
(47 U.S.C. S: 312(a)(1)), and/or forfeiture (47 U.S.C. S: 503).
47 U.S.C. S: 503(b), 47 C.F.R. S:S: 0.111, 0.311, and 1.80.
47 U.S.C. S: 154(i),(j).
47 C.F.R. S: 1.17.
(Continued from previous page)
(continued....)
Federal Communications Commission DA 11-184
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Federal Communications Commission DA 11-184