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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
) File No.: EB-10-SE-052
In the Matter of
) Acct. No.: 201232100021
ETI Sound Systems, Inc.
) FRN: 0021561014
)
)
ORDER
Adopted: May 11, 2012 Released: May 11, 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 (Commission) and ETI Sound Systems, Inc. (ETI). The Consent
Decree resolves and terminates the Bureau's investigation into ETI's
compliance with Section 302(b) of the Communications Act of 1934, as
amended (the 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 digital radio frequency devices, including guitar amplifiers,
CD/MP3 players, and active speaker systems.
2. The Bureau and ETI 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. In the
absence of new material evidence relating to this matter, we conclude
that our investigation raises no substantial or material questions of
fact as to whether ETI possesses the basic qualifications, including
those related to character, to hold or obtain any Commission license
or authorization.
4. 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 Commission's Rules,
the Consent Decree attached to this Order IS ADOPTED.
5. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
6. 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 Avi El-Kiss, Vice President, ETI Sound Systems, Inc.,
3383 Gage Avenue, Huntington Park, CA 90255, and to Martin L. Stern,
Counsel to ETI Sound Systems, Inc., K&L Gates LLP, 1601 K Street,
N.W., Washington, D.C. 20006.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No.: EB-10-SE-052
In the Matter of
) Acct. No.: 201232100021
ETI Sound Systems, Inc.
) FRN: 0021561014
)
CONSENT DECREE
The Enforcement Bureau of the Federal Communications Commission and ETI
Sound Systems, Inc., 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 radio frequency devices, including guitar amplifiers, CD/MP3
players, and active speaker systems.
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. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
d. "Communications Laws" means collectively, the Act, the Rules, and the
published and promulgated orders and decisions of the Commission to
which ETI is subject by virtue of its business activities, including
but not limited to, the Equipment Marketing Rules.
e. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
f. "Compliance Plan" means the compliance obligations, program, and
procedures described in this Consent Decree at paragraph 9.
g. "Covered Employees" means all employees and agents of ETI who perform,
or supervise, oversee, or manage the performance of, duties that
relate to ETI's responsibilities under the Equipment Marketing Rules.
h. "Digital Device" means an unintentional radiator device or system as
defined in Section 15.3(k) of the Rules.
i. "Effective Date" means the date on which the Bureau releases the
Adopting Order.
j. "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.
k. "ETI" means ETI Sound Systems, Inc., d/b/a B-52 Professional, d/b/a
Boutique Amps Distribution, and its predecessors-in-interest and
successors-in-interest.
l. "Investigation" means the investigation commenced by the Bureau's July
9, 2010 letter of inquiry regarding whether the marketing of certain
Digital Devices by ETI complies with the Equipment Marketing Rules.
m. "Operating Procedures" means the standard, internal operating
procedures and compliance policies established by ETI to implement the
Compliance Plan.
n. "Parties" means ETI and the Bureau, each of which is a "Party."
o. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
II. BACKGROUND
1. 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 as well as the administrative
requirements relating to equipment labeling and consumer disclosure.
ETI markets Digital Devices such as guitar amplifiers with built-in
digital signal processors, CD/MP3 players, and active speaker
systems. These Digital Devices are unintentional radiators subject to
authorization via the Commission's equipment verification procedures.
2. On July 9, 2011, the Bureau's Spectrum Enforcement Division issued a
letter of inquiry (LOI) to ETI, directing ETI to submit a sworn
written response to a series of questions relating to ETI's
manufacture, importation, and marketing of its Prodigy CD/MP3
players, its Matrix active speaker system, and its Rebel and Renegade
guitar amplifiers. ETI responded to the LOI on September 8, 2010 (LOI
Response). In its LOI Response, ETI provided detailed information
about the product lines that require testing and authorization,
noting however that it primarily markets non-digital sound system
devices that are not subject to the Commission's equipment
authorization procedures. ETI also stated that it had undertaken a
top-to-bottom review of its equipment authorization compliance. The
Bureau and ETI 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. ETI 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, ETI 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 this 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 ETI 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 this 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 ETI with respect to ETI's basic qualifications,
including its character qualifications, to be a Commission licensee or to
hold Commission licenses or authorizations.
8. Compliance Officer. Within thirty (30) calendar days after the
Effective Date, ETI 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 Compliance
Officer shall be responsible for developing, implementing, and
administering the Compliance Plan and ensuring that ETI 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. The initial Compliance Officer as of the
Effective Date will be Avi El-Kiss, Vice President, ETI. ETI represents
and warrants that, as of the Effective Date, Mr. El-Kiss is ETI's only
Covered Employee, as such term is defined herein.
9. Compliance Plan. For purposes of settling the matters set forth herein,
ETI agrees that it shall within sixty (60) calendar days after the
Effective Date, develop and implement a Compliance Plan designed to ensure
future compliance with the Communications Laws and with the terms and
conditions of this Consent Decree. With respect to the Equipment Marketing
Rules, ETI shall implement the following procedures:
a. Operating Procedures on Equipment Marketing. Within sixty (60)
calendar days after the Effective Date, ETI shall establish Operating
Procedures that the Compliance Officer and any person who becomes a
Covered Employee after the Effective Date must follow to help ensure
ETI's compliance with the Equipment Marketing Rules. ETI's Operating
Procedures shall include internal procedures and policies
specifically designed to ensure that all Digital Devices and other
radio frequency devices marketed by ETI 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.
b. Compliance Manual. Within sixty (60) calendar days after the
Effective Date, the Compliance Officer shall develop a Compliance
Manual and distribute the Compliance Manual to any person who becomes
a Covered Employee after the Effective Date, within thirty (30)
calendar days after the date such person becomes a Covered Employee.
The Compliance Manual shall explain the Equipment Marketing Rules and
set forth the Operating Procedures that Covered Employees shall
follow to help ensure ETI's compliance with the Equipment Marketing
Rules. ETI shall periodically review and revise the Compliance Manual
as necessary to ensure that the information set forth therein remains
current and complete. ETI shall distribute any revisions to the
Compliance Manual promptly to any Covered Employees.
c. Compliance Training Program. Recognizing that the Compliance Officer
is required to have specific knowledge of the Equipment Marketing
Rules under the terms of paragraph 8 above, and given ETI's
representation that the Compliance Officer is ETI's only Covered
Employee as of the Effective Date, the following training obligations
shall apply in the event that any person, in addition to the
Compliance Officer, becomes a Covered Employee at any time after the
Effective Date: (i) ETI shall establish and implement a Compliance
Training Program on compliance with the Equipment Marketing Rules and
the Operating Procedures; (ii) as part of the Compliance Training
Program, Covered Employees shall be advised of ETI's obligation to
report any noncompliance with the Equipment Marketing Rules under
paragraph 10 of this Consent Decree and shall be instructed on how to
disclose noncompliance to the Compliance Officer; (iii) any person
who becomes a Covered Employee at any time after the Effective Date
shall be trained pursuant to the Compliance Training Program within
thirty (30) calendar days after the date such person becomes a
Covered Employee; and (iv) ETI 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.
10. Reporting Noncompliance. ETI shall report any noncompliance with the
Equipment Marketing Rules and with the terms and conditions of this
Consent Decree within fifteen (15) calendar days after discovery of
such noncompliance. Such reports shall include a detailed explanation
of (i) each instance of noncompliance; (ii) the steps that ETI has
taken or will take to remedy such noncompliance; (iii) the schedule on
which such remedial actions will be taken; and (iv) the steps that ETI
has taken or will take to prevent the recurrence of any such
noncompliance. All reports of noncompliance 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 Neal
McNeil at Neal.McNeil@fcc.gov and to Ricardo Durham at
Ricardo.Durham@fcc.gov.
11. Compliance Reports. ETI 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 ETI'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 ETI, stating
that the Compliance Officer has personal knowledge that ETI (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 noncompliance with the
terms and conditions of this Consent Decree, including the reporting
obligations set forth in paragraph 10 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 ETI, shall
provide the Commission with a detailed explanation of the reason(s)
why and describe fully (i) each instance of noncompliance; (ii) the
steps that ETI has taken or will take to remedy such noncompliance,
including the schedule on which proposed remedial actions will be
taken; and (iii) the steps that ETI has taken or will take to prevent
the recurrence of any such noncompliance, 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 Neal McNeil at Neal.McNeil@fcc.gov and to
Ricardo Durham at Ricardo.Durham@fcc.gov.
12. Termination Date. Unless stated otherwise, the obligations set forth
in paragraphs 8 through 11 of this Consent Decree shall expire twenty-four
(24) months after the Effective Date.
13. Voluntary Contribution. ETI agrees that it will make a voluntary
contribution to the United States Treasury in the amount of thirty-four
thousand dollars ($34,000) (Voluntary Contribution), such Voluntary
Contribution to be made in four (4) quarterly payments (each an
Installment Payment) of Eight Thousand Five Hundred Dollars ($8,500). The
first payment is to be made within thirty (30) calendar day after the
Effective Date, with remaining payments due on or before September 3,
2012, December 3, 2012, and March 1, 2013. ETI acknowledges and agrees
that upon execution of this Consent Decree the Voluntary Contribution and
each Installment Payment shall become a "Claim" or "Debt" as defined in 31
U.S.C. S:3701(b)(1). Upon an Event of Default, all procedures for
collection as permitted by law may, at the Commission's discretion, be
initiated. In addition, ETI agrees that it will make the first and all
subsequent Installment Payments in United States Dollars without further
demand or notice by the dates specified above. Installment Payments must
be made by check or similar instrument, payable in United States Dollars
to the order of the Federal Communications Commission. The payments 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. Payments
by wire transfer may be made to ABA Number 021030004, receiving bank
TREAS/NYC, and Account Number 27000001. For payments 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). ETI shall also send electronic notification to Neal McNeil at
Neal.McNeil@fcc.gov, Ricardo Durham at Ricardo.Durham@fcc.gov, and
Samantha Peoples at Sam.Peoples@fcc.gov on the date each payment is made.
14. Event of Default. ETI agrees that an Event of Default shall occur upon
the failure by ETI to pay the full amount of any Installment Payment
on or before the due date specified in this Consent Decree.
15. Interest, Charges for Collection, and Acceleration of Maturity Date.
Upon an Event of Default under this Consent Decree, the then unpaid
amount of the Voluntary Contribution shall accrue interest, computed
using the rate of the U.S. Prime Rate in effect on the date of the
Event of Default, plus 4.75 percent, from the date of the Event of
Default until payment in full. Upon an Event of Default, the then
unpaid amount of the Voluntary Contribution, together with interest,
as aforesaid, any penalties permitted and/or required by the law,
including but not limited to 31 U.S.C. S: 3717 and administrative
charge(s), plus the costs of collection, litigation, and attorneys'
fees, shall become immediately due and payable, without notice,
presentment, demand, protest, or notice of protest of any kind, all of
which are waived by ETI.
16. Waivers. ETI 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. ETI 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 ETI nor the Commission shall contest the
validity of the Consent Decree or of the Adopting Order, and ETI shall
waive any statutory right to a trial de novo. ETI 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.
17. 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.
18. 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 ETI does not expressly consent)
that provision will be superseded by such Rule or Commission order.
19. Successors and Assigns. ETI agrees that the provisions of this Consent
Decree shall be binding on its successors, assigns, and transferees.
20. 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, and that by
entering into this Consent Decree, ETI does not admit to or deny any
violation of the Communications Laws.
21. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
22. 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.
23. Authorized Representative. The individual signing this Consent Decree
on behalf of ETI represents and warrants that he is authorized by ETI
to execute this Consent Decree and to bind ETI 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.
24. 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
_______________________________
Avi El-Kiss
Vice President
ETI Sound Systems, Inc.
______________________________
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.
Id. S: 15.3(k).
47 U.S.C. S: 302a(b).
47 C.F.R. S:S: 2.803, 2.1203, 15.19, 15.21, 15.105.
See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission, to Avi El-Kiss,
Vice President, ETI Sound Systems, Inc. (File No. EB-10-SE-052; July 9,
2010).
47 U.S.C. S: 302a(b).
47 C.F.R. S:S: 2.803, 2.1203, 15.19, 15.21, 15.105.
Id. S: 15.101.
See supra note 6.
See Letter from Avi El-Kiss, Vice President, ETI Sound Systems, Inc., to
Marlene H. Dortch, Secretary, Federal Communications Commission (Sept. 8,
2010).
LOI Response at 2.
Id. at 2-3.
See, e.g., Tolling Agreement Extension, File No. EB-10-SE-052, executed by
and between John D. Poutasse, Acting Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission, and Martin Stern,
K&L Gates LLP, Counsel to ETI Sound Systems, Inc. (Jan. 4, 2012).
47 C.F.R. S: 1.16.
Debt Collection Improvement Act of 1996, Pub. L. 104-134, 110 Stat. 1321,
1358 (Apr. 26, 1996).
Federal Communications Commission DA 12-360
2
Federal Communications Commission DA 12-360