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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No.: EB-10-SE-139
In the Matter of
) Acct. No.: 201232100019
American Music and Sound
) FRN: 0021524640
)
ORDER
Adopted: March 2, 2012 Released: March 2, 2012
By the Chief, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau (Bureau) of the Federal Communications
Commission and American Music and Sound (AMS). The Consent Decree
resolves and terminates the Bureau's investigation into AMS's
compliance with Section 302(b) of the Communications Act of 1934, as
amended (Act), and Sections 2.803, 2.1203, 15.19, 15.21, and 15.105 of
the Commission's rules (Rules) pertaining to the marketing of
unauthorized Class A digital audio radio frequency devices.
2. The Bureau and AMS have negotiated the Consent Decree that resolves
this matter. A copy of the Consent Decree is attached hereto and
incorporated herein by reference.
3. After reviewing the terms of the Consent Decree and evaluating the
facts before us, we find that the public interest would be served by
adopting the Consent Decree and terminating the investigation.
4. In the absence of material new evidence relating to this matter, we
conclude that our investigation raises no substantial or material
questions of fact as to whether AMS possesses the basic
qualifications, including those related to character, to hold or
obtain any Commission license or authorization.
5. Accordingly, IT IS ORDERED that, pursuant to Sections 4(i) and 503(b)
of the Act, and Sections 0.111 and 0.311 of the Rules, the Consent
Decree attached to this Order IS ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
7. IT IS FURTHER ORDERED that a copy of this Order and Consent Decree
shall be sent by first class mail and certified mail, return receipt
requested, to Lynn P. Martin, President, American Music and Sound,
22020 Clarendon Street, Suite # 305, Woodland Hills, CA 91367, and to
Marianne Roach Casserly, Esq., Counsel to American Music and Sound,
Alston & Bird LLP, The Atlantic Building, 950 F Street, N.W.,
Washington D.C. 20004-1404.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No.: EB-10-SE-139
In the Matter of
) Acct. No.: 201232100019
American Music and Sound
) FRN: 0021524640
)
CONSENT DECREE
The Enforcement Bureau of the Federal Communications Commission and
American Music and Sound, by their authorized representatives, hereby
enter into this Consent Decree for the purpose of terminating the
Enforcement Bureau's investigation into possible violations of Section
302(b) of the Communications Act of 1934, as amended, and Sections 2.803,
2.1203, 15.19, 15.21, and 15.105 of the Commission's rules pertaining to
the marketing of digital audio radio frequency devices, including digital
multitrack recorders, live recording mixers, and stereo rack monitors.
I. DEFINITIONS
1. For the purposes of this Consent Decree, the following definitions
shall apply:
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C. S:
151 et seq.
b. "Adopting Order" means an order of the Bureau adopting the terms of
this Consent Decree without change, addition, deletion, or
modification.
c. "AMS" means American Music and Sound and its predecessors-in-interest
and successors-in-interest.
d. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
e. "Communications Laws" means collectively, the Act, the Rules, and the
published and promulgated orders and decisions of the Commission to
which AMS is subject by virtue of its business activities, including
but not limited to, the Equipment Marketing Rules.
f. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
g. "Compliance Plan" means the compliance obligations and compliance
program described in this Consent Decree at paragraph 8.
h. "Covered Employees" means all employees and agents of AMS who perform
or supervise, oversee, or manage the performance of, duties that
relate to AMS's responsibilities under the Equipment Marketing Rules.
i. "Digital Device" means an unintentional radiator device or system as
defined in Section 15.3(k) of the Rules.
j. "Effective Date" means the date on which the Bureau releases the
Adopting Order.
k. "Equipment Marketing Rules" means Section 302(b) of the Act and
Sections 2.803, 2.1203, 15.19, 15.21, and 15.105 of the Rules and
other Communications Laws governing the Marketing of radio frequency
devices within the United States and its territories.
l. "Investigation" means the investigation commenced by the Bureau's
August 25, 2010 letter of inquiry regarding whether the Marketing of
certain Digital Devices by AMS complies with the Equipment Marketing
Rules.
m. "Marketing" or "Marketed" means the activities defined in 47 C.F.R. S:
2.803(e)(4) and "includes sale or lease, or offering for sale or
lease, including advertising for sale or lease, or importation,
shipment, or distribution for the purpose of selling or leasing or
offering for sale or lease."
n. "Operating Procedures" means the standard, internal operating
procedures and compliance policies established by AMS to implement the
Compliance Plan.
o. "Parties" means AMS and the Bureau, each of which is a "Party".
p. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
II. Background
2. Pursuant to Section 302(b) of the Act and Sections 2.803, 2.1203,
15.19, 15.21, and 15.105 of the Rules, certain Digital Devices may not
be Marketed in the United States unless the devices comply with the
applicable technical standards and administrative requirements
relating to equipment labeling and consumer disclosure. AMS is a
distributor of professional audio, music creation, and musical
instrument products, such as digital multitrack recorders, live
recording mixers and stereo rack monitors. Certain products
distributed by AMS are Digital Devices, and as such are unintentional
radiators that require prior Commission authorization via the
Commission's equipment verification procedures.
3. On August 25, 2010, the Bureau's Spectrum Enforcement Division
(Division) issued the letter of inquiry (LOI) to AMS directing AMS to
submit a sworn written response to a series of questions relating to
whether the company was Marketing certain Digital Devices without
Commission authorization. AMS responded to the LOI on September 24,
2010 (LOI Response). In its LOI Response, AMS submitted information
and documentation related to the Digital Devices at issue, noting that
it had imported these devices from a foreign manufacturer. AMS also
stated that the Digital Devices complied with the European EN55011
standard and that AMS was not aware that these devices were not fully
compliant with FCC requirements. On March 21, 2011, the Division
issued AMS a second letter of inquiry, to which the company responded
on April 20, 2011 (Supplemental LOI Response). In the Supplemental LOI
Response, AMS further represented that it ceased Marketing the
majority of non-compliant devices as of September 2010 and the
remainder of such non-compliant devices as of October 2010. The Bureau
and AMS executed tolling agreements to toll the statute of
limitations.
III. TERMS OF AGREEMENT
4. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau by
incorporation of such provisions by reference in the Adopting Order.
5. Jurisdiction. AMS agrees that the Bureau has jurisdiction over it and
the matters contained in this Consent Decree and that the Bureau has
the authority to enter into and adopt this Consent Decree.
6. Effective Date; Violations. The Parties agree that this Consent
Decree shall become effective on the Effective Date as defined herein.
As of the Effective Date, the Adopting Order and this Consent Decree
shall have the same force and effect as any other order of the
Commission. Any violation of the Adopting Order or of the terms of
this Consent Decree shall constitute a separate violation of a
Commission order, entitling the Commission to exercise any rights and
remedies attendant to the enforcement of a Commission order.
7. Termination of Investigation. In express reliance on the covenants
and representations in this Consent Decree and to avoid further
expenditure of public resources, the Bureau agrees to terminate the
Investigation. In consideration for the termination of the
Investigation, AMS agrees to the terms, conditions, and procedures
contained herein. The Bureau further agrees that in the absence of new
material evidence, the Bureau will not use the facts developed in the
Investigation through the Effective Date, or the existence of this
Consent Decree, to institute on its own motion any new proceeding,
formal or informal, or take any action on its own motion against AMS
concerning the matters that were the subject of the Investigation. The
Bureau also agrees that in the absence of new material evidence it
will not use the facts developed in the Investigation through the
Effective Date, or the existence of this Consent Decree, to institute
on its own motion any proceeding, formal or informal, or take any
action on its own motion against AMS with respect to AMS's basic
qualifications, including its character qualifications, to be a
Commission licensee or to hold Commission licenses or authorizations.
8. Compliance Plan. For purposes of settling the matters set forth
herein, AMS agrees that it shall within sixty (60) calendar days after
the Effective Date, develop and implement a Compliance Plan to help
ensure future compliance with the Communications Laws, including the
Equipment Marketing Rules, and with the terms and conditions of this
Consent Decree. The Compliance Plan shall include, without limitation,
the following components:
a. Compliance Officer. Within thirty (30) calendar days after the
Effective Date, AMS shall designate a senior corporate manager with
the requisite corporate and organizational authority to serve as
Compliance Officer and to discharge the duties set forth below. The
person designated as the Compliance Officer shall be responsible for
developing, implementing, and administering the Compliance Plan and
ensuring that AMS complies with the terms and conditions of the
Compliance Plan and this Consent Decree. In addition to the general
knowledge of the Communications Laws necessary to discharge his/her
duties under this Consent Decree, the Compliance Officer shall have
specific knowledge of the Equipment Marketing Rules prior to assuming
his/her duties.
b. Operating Procedures on Equipment Marketing. Within sixty (60)
calendar days after the Effective Date, AMS shall establish Operating
Procedures that all Covered Employees must follow to help ensure
AMS's compliance with the Equipment Marketing Rules. AMS's Operating
Procedures shall include internal procedures and policies
specifically designed to ensure that (i) all Digital Devices and
other radio frequency devices Marketed by AMS comply with applicable
technical standards, have been properly authorized (via the
certification, verification, or declaration of conformity procedures,
as applicable), and comply with the applicable administrative
requirements relating to equipment labeling and consumer disclosure;
and (ii) any Digital Devices that do not comply with the Equipment
Marketing Rules are not Marketed to U.S. consumers.
c. Compliance Manual. Within sixty (60) calendar days after the
Effective Date, the Compliance Officer shall develop and distribute a
Compliance Manual to all Covered Employees. The Compliance Manual
shall explain the Equipment Marketing Rules and set forth the
Operating Procedures that Covered Employees shall follow to help
ensure AMS's compliance with the Equipment Marketing Rules. AMS shall
periodically review and revise the Compliance Manual as necessary to
ensure that the information set forth therein remains current and
complete. AMS shall distribute any revisions to the Compliance Manual
promptly to all Covered Employees.
d. Compliance Training Program. AMS shall establish and implement a
Compliance Training Program on compliance with the Equipment
Marketing Rules and the Operating Procedures. As part of the
Compliance Training Program, Covered Employees shall be advised of
AMS's obligation to report any non-compliance with the Equipment
Marketing Rules under paragraph 9 of this Consent Decree and shall be
instructed on how to disclose non-compliance to the Compliance
Officer. All Covered Employees shall be trained pursuant to the
Compliance Training Program within sixty (60) calendar days after the
Effective Date, except that any person who becomes a Covered
Employee at any time after the Effective Date shall be trained within
thirty (30) calendar days after the date such person becomes a
Covered Employee. AMS shall repeat the compliance training on an
annual basis and shall periodically review and revise the Compliance
Training Program as necessary to ensure that it remains current and
complete and to enhance its effectiveness.
e. Termination Date. Unless stated otherwise, the requirements of this
paragraph 8 of the Consent Decree shall expire twenty-four (24)
months after the Effective Date.
9. Reporting Non-Compliance. AMS shall report any non-compliance with the
Equipment Marketing Rules and with the terms and conditions of this
Consent Decree within fifteen (15) calendar days after discovery of
such non-compliance. Such reports shall include a detailed explanation
of (i) each instance of non-compliance; (ii) the steps that AMS has
taken or will take to remedy such non-compliance; (iii) the schedule
on which such remedial actions will be taken; and (iv) the steps that
AMS has taken or will take to prevent the recurrence of any such
non-compliance. All reports of non-compliance shall be submitted to
the Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal
Communications Commission, Room 3-C366, 445 12th Street, S.W.
Washington, D.C. 20554, with a copy submitted electronically to Kathy
Harvey at Kathy.Harvey@fcc.gov and to JoAnn Lucanik at
JoAnn.Lucanik@fcc.gov. The reporting obligations set forth in this
paragraph 9 shall expire twenty-four (24) months after the Effective
Date.
10. Compliance Reports. AMS shall file Compliance Reports with the
Commission ninety (90) calendar days after the Effective Date, twelve
(12) months after the Effective Date, and twenty-four (24) months
after the Effective Date.
a. Each compliance report shall include a detailed description of AMS's
efforts during the relevant period to comply with the terms and
conditions of this Consent Decree and the Equipment Marketing Rules.
In addition, each Compliance Report shall include a certification by
the Compliance Officer, as an agent of and on behalf of AMS, stating
that the Compliance Officer has personal knowledge that AMS (i) has
established and implemented the Compliance Plan; (ii) has utilized the
Operating Procedures since the implementation of the Compliance Plan;
and (iii) is not aware of any instances of non-compliance with the
terms and conditions of this Consent Decree, including the reporting
obligations set forth in paragraph 9 hereof.
b. The Compliance Officer's certification shall be accompanied by a
statement explaining the basis for such certification and must comply
with Section 1.16 of the Rules and be subscribed to as true under
penalty of perjury in substantially the form set forth therein.
c. If the Compliance Officer cannot provide the requisite certification,
the Compliance Officer, as an agent of and on behalf of AMS, shall
provide the Commission with a detailed explanation of the reason(s)
why and describe fully (i) each instance of non-compliance; (ii) the
steps that AMS has taken or will take to remedy such non-compliance,
including the schedule on which proposed remedial actions will be
taken; and (iii) the steps that AMS has taken or will take to prevent
the recurrence of any such non-compliance, including the schedule on
which such preventive action will be taken.
d. All Compliance Reports shall be submitted to the Chief, Spectrum
Enforcement Division, Enforcement Bureau, Federal Communications
Commission, 445 12th Street, S.W., Washington, D.C. 20554, with a copy
submitted electronically to Kathy Harvey at Kathy.Harvey@fcc.gov and
to JoAnn Lucanik at JoAnn Lucanik@fcc.gov.
11. Voluntary Contribution. AMS agrees that it will make a voluntary
contribution to the United States Treasury in the amount of
seventy-two thousand dollars ($72,000). The payment must be made
within thirty (30) calendar days after the Effective Date. The payment
must be made by check or similar instrument, payable to the order of
the Federal Communications Commission. The payment must include the
Account Number and FRN referenced in the caption to the Adopting
Order. 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 Account Number in block
number 23A (call sign/other ID), and enter the letters "FORF" in block
number 24A (payment type code). AMS shall also send electronic
notification to Kathy Harvey at Kathy.Harvey@fcc.gov, JoAnn Lucanik at
JoAnn Lucanik@fcc.gov, and Samantha Peoples at Sam.Peoples@fcc.gov on
the date said payment is made.
12. Waivers. AMS waives any and all rights it may have to seek
administrative or judicial reconsideration, review, appeal, or stay,
or to otherwise challenge or contest the validity of this Consent
Decree and the Adopting Order, provided the Bureau issues an Adopting
Order as defined herein. AMS shall retain the right to challenge
Commission interpretation of the Consent Decree or any terms contained
herein. If either Party (or the United States on behalf of the
Commission) brings a judicial action to enforce the terms of the
Adopting Order, neither AMS nor the Commission shall contest the
validity of the Consent Decree or of the Adopting Order, and AMS shall
waive any statutory right to a trial de novo. AMS hereby agrees to
waive any claims it may have under the Equal Access to Justice Act, 5
U.S.C. S: 504 and 47 C.F.R. S: 1.1501 et seq., relating to the matters
addressed in this Consent Decree.
13. Invalidity. In the event that this Consent Decree in its entirety is
rendered invalid by any court of competent jurisdiction, it shall
become null and void and may not be used in any manner in any legal
proceeding.
14. Subsequent Rule or Order. The Parties agree that if any provision of
the Consent Decree conflicts with any subsequent Rule or order adopted
by the Commission (except an order specifically intended to revise the
terms of this Consent Decree to which AMS does not expressly consent)
that provision will be superseded by such Rule or Commission order.
15. Successors and Assigns. AMS agrees that the provisions of this Consent
Decree shall be binding on its successors, assigns, and transferees.
16. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties with
respect to the Investigation. The Parties further agree that this
Consent Decree does not constitute either an adjudication on the
merits or a factual or legal finding or determination regarding any
compliance or noncompliance with the Communications Laws.
17. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
18. Paragraph Headings. The headings of the paragraphs in this Consent
Decree are inserted for convenience only and are not intended to
affect the meaning or interpretation of this Consent Decree.
19. Authorized Representative. The individual signing this Consent Decree
on behalf of AMS represents and warrants that he/she is authorized by
AMS to execute this Consent Decree and to bind AMS to the obligations
set forth herein. The FCC signatory represents that she is signing
this Consent Decree in her official capacity and that she is
authorized to execute this Consent Decree.
20. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when executed
and delivered, shall be an original, and all of which counterparts
together shall constitute one and the same fully executed instrument.
___________________________
P. Michele Ellison
Chief
Enforcement Bureau
___________________________
Date
_____________________________
Lynn P. Martin
President
American Music and Sound
_____________________________
Date
47 U.S.C. S: 302a(b).
47 C.F.R. S:S: 2.803, 2.1203, 15.19, 15.21, 15.105.
47 U.S.C. S:S: 154(i), 503(b).
47 C.F.R. S:S: 0.111, 0.311.
47 U.S.C. S: 302a(b).
47 C.F.R. S:S: 2.803, 2.1203, 15.19, 15.21, 15.105.
47 C.F.R. S: 15.3(k).
47 U.S.C. S: 302a(b).
See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission, to Lynn Martin,
President, American Music and Sound (Aug. 25, 2010).
47 U.S.C. S: 302a(b).
47 C.F.R. S:S: 2.803(a), 2.1203, 15.19, 15.21, 15.105.
47 C.F.R. S: 15.101.
See supra note 5.
See Letter from Dean Downey, Business Manager, American Music and Sound,
to Federal Communications Commission, Enforcement Bureau, Spectrum
Enforcement Division (Sept. 24, 2010).
LOI Response at 1.
See Letter from Ricardo M. Durham, Acting Chief, Spectrum Enforcement
Division, Enforcement Bureau, Federal Communications Commission, to Lynn
Martin, President, American Music and Sound (Mar. 21, 2011).
See Letter from Lynn Martin, President, American Music and Sound, to
Ricardo M. Durham, Acting Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission (Apr. 20, 2011).
Supplemental LOI Response at 16.
See, e.g., Tolling Agreement Extension, File No. EB-10-SE-139, executed by
and between John D. Poutasse, Acting Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications, and Marianne Casserly, Esq.,
Alston & Bird LLP, Counsel to American Music and Sound (Nov. 16, 2011).
47 C.F.R. S: 1.16.
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