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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Constellium Rolled Products Ravenswood, LLC, an indirect, wholly-owned subsidiary of Constellium N.V.
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File No.: EB-SED-13-00012123
NAL/Acct. No. 201432100020
FRN: 0005812789
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: May 29, 2014 Released: May 29, 2014
By the Commission:
INTRODUCTION
We propose a penalty of $294,400 against Constellium Rolled Products Ravenswood, LLC (Constellium). Constellium apparently operated eight wireless radio stations without Commission authority for periods ranging from ten months to more than two years. In addition, Constellium apparently failed to obtain Commission consent prior to transferring ultimate ownership and control of its 12 wireless radio authorizations. We take this action as part of our duty to prevent unlicensed radio operations from potentially interfering with authorized radio communications in the United States, to facilitate the efficient administration of wireless radio authorizations, and to prevent the unauthorized transfer of radio authorizations to a potentially unqualified party or in a manner that might otherwise be inconsistent with the public interest.
As discussed below, Constellium -- the former licensee of eight expired Private Land Mobile Radio Service (PLMRS) stations and the licensee of four additional PLMRS stations at issue in this proceeding -- apparently willfully and repeatedly violated Sections 301 and 310(d) of the Communications Act of 1934, as amended (Act); Sections 1.903(a) and 1.948(a) of the Commission's rules (Rules); and the associated Commission orders requiring licensees to seek authority for any continued operation that occurs after a license expires. Specifically, the apparent violations involve Constellium's operation of eight PLMRS stations for approximately ten months to more than two years without the necessary Commission authority, Constellium's associated failure to file timely applications for authority to continue operating the stations, and its failure to obtain Commission consent prior to the transfer of control of 12 PLMRS station authorizations.
BACKGROUND
Operation of Eight PLMRS Stations Without Authority
The eight PLMRS stations that Constellium apparently operated without authority -- call signs KA35814, KD39541, WNVG467, WNVG468, WNVG469, WNYG694, WPKP839, and WPKT215 -- were originally granted in 2001 to Pechiney Rolled Products LLC (Pechiney) for terms of approximately ten years. In 2005, Pechiney changed its name to Alcan Rolled Products LLC; and in 2009, the name of the licensee was further changed to Alcan Rolled Products - Ravenswood, LLC (Alcan). Before any of the renewal applications for the eight licenses were due, Alcan was acquired by Omega US Holdings I LLC on January 4, 2011. Following that transaction, the name of the licensee was changed to Constellium Rolled Products Ravenswood, LLC.
The licenses for stations KA35814, WNVG467, WNVG468, and WNVG469 expired on January 22, 2011; the license for station KD39541 expired on January 23, 2012; the license for station WNYG694 expired on January 27, 2012; the license for station WPKP839 expired on June 11, 2012; and the license for station WPKT215 expired on June 27, 2012. Nearly three months before each license expired, the Commission's Wireless Telecommunications Bureau (Wireless Bureau) sent courtesy "renewal reminder" notices to the license's address of record. Each notice reminded the licensee that it had to file a renewal application before its license's expiration date if it planned to continue operating the station. Despite these reminders, Constellium apparently failed to file a renewal application for each of the eight PLMRS station licenses. These eight licenses therefore automatically terminated on their respective expiration dates, thus prohibiting the stations' continued operation.
More than two years after the first four of the stations had continued operating without authority past their license expiration dates, Constellium, on April 26, 2013, filed with the Wireless Bureau requests for Special Temporary Authority (STA) to continue operating the eight PLMRS stations (STA Requests). In its STA Requests, Constellium stated that it had not been aware that the licenses for the stations had expired, and it acknowledged that it had continued to operate the stations past their licenses' expiration. Constellium also stated that the facilities previously authorized by the expired PLMRS licenses were critical to Constellium's internal management and security operations, as well as to the safety of its employees. On April 30, 2013, the Wireless Bureau granted the STA Requests for a term expiring on October 27, 2013.
Because Constellium continued to operate the stations after their licenses had expired, the Wireless Bureau referred this matter to the Enforcement Bureau (Bureau). On August 2, 2013, the Bureau's Spectrum Enforcement Division issued a Letter of Inquiry (LOI) to Constellium and directed the company to submit a sworn written response to questions about its failure to file renewal applications for its eight PLMRS station licenses and its apparent unauthorized operation of the stations. Constellium responded on September 3, 2013. In its LOI Response, Constellium does not deny that it failed to file renewal applications for the eight PLMRS station licenses and that it continued operating the stations after their respective license expiration dates until it filed the STA Requests. Constellium asserts that its failure to file timely license renewal applications was due to a variety of factors, including the company's purported unfamiliarity with the Commission's licensing requirements, procedural and personnel changes that took place in connection with the Alcan acquisition, and a seven-week strike by certain of Constellium's Ravenswood plant employees. Constellium states that it "regrets the lapse of FCC oversight that occurred," but asserts that the lapse in oversight was not intentional, and that such lapse "will not reoccur in the future given the many steps and precautions it has taken to remedy the situation."
Unauthorized Transfer of Control of 12 PLMRS Authorizations
On April 4, 2014, Constellium informed Bureau staff that it recently discovered that it had transferred control of its 12 PLMRS authorizations without obtaining prior Commission consent following an Initial Public Offering (IPO) by Constellium N.V. in May 2013. Subsequently, on April 7, 2014, Constellium filed a request for an STA seeking Commission authority to continue operating its licensed PLMRS stations until such time as the Commission acts on its application seeking Commission consent to the transfer of control of those licenses (Transfer STA Request). In its Transfer STA Request, Constellium states that, prior to May 29, 2013, Apollo Omega (Lux) S.a.r.l. (Apollo), a Luxembourg private limited liability company, owned 51 percent of the voting stock of Constellium's parent, Constellium N.V., and thereby exercised ultimate control over Constellium. Following Constellium N.V.'s IPO on May 29, 2013, Apollo's ownership interest in Constellium N.V. dropped to 37 percent. As a result, control over Constellium shifted from Apollo to Constellium N.V. The Wireless Bureau granted the Transfer STA Request on April 10, 2014 for a term expiring on October 7, 2014.
DISCUSSION
Operation of Eight PLMRS Stations Without Authority
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 radio except in accordance with a Commission-granted authorization. Licensees that want to operate after their licenses' expiration must affirmatively request continued operating authority from the Commission. The Universal Licensing System Orders mandate the filing of certain applications to obtain such authority.
As a Commission licensee, Constellium was required to maintain its authorizations in order to continue to operate its PLMRS stations. In its LOI Response, Constellium acknowledges that it had failed to renew its licenses for stations WNVG467, WNVG468, WNVG469, and KA35814, and admits that it had continued to operate these stations without Commission authority for more than two years: from January 2011, when the licenses expired, until April 26, 2013, when Constellium filed its STA Requests. Constellium also acknowledges that it had failed to renew its licenses for stations KD39541 and WNYG694, and admits that it had continued to operate these stations without authorization for more than one year: from late January 2012, when the licenses expired, until April 26, 2013, when Constellium filed its STA Requests. Finally, Constellium acknowledges that it had failed to renew its licenses for stations WPKP839 and WPKT215, and admits that it had continued to operate these stations without authorization for more than ten months: from June 2012, when the licenses expired, until April 26, 2013, when Constellium filed its STA Requests. In addition, prior to seeking its STAs, Constellium failed to file any other applications for authority to continue operation of the stations. By operating the stations after the licenses had expired, Constellium apparently violated Section 301 of the Act and Section 1.903(a) of the Rules; and by failing to seek Commission authority for its continued station operations, Constellium apparently violated the Universal Licensing System Orders and associated rules.
Unauthorized Transfer of Control of 12 PLMRS Authorizations
Under Section 310(d) of the Act, a Commission license may not be "transferred, assigned, or disposed of in any manner, voluntarily or involuntarily, directly or indirectly, or by transfer of control of any corporation holding such . . . license" until the licensee has sought and obtained Commission approval. Similarly, Section 1.948(a) of the Rules states that "authorizations in the Wireless Radio Services may be assigned by the licensee to another party, voluntarily or involuntarily, directly or indirectly, or the control of a licensee holding such authorizations may be transferred, only upon application to and approval by the Commission." In the instant case, the company admits that control of Constellium was transferred from Apollo to Constellium N.V. on May 29, 2013, and the record shows that this unauthorized transfer continued with respect to its licensed stations for nearly one year, until the Wireless Bureau granted Constellium's Transfer STA Request on April 10, 2014. By transferring control of its PLMRS authorizations without prior Commission consent, Constellium apparently violated Section 310(d) of the Act and Section 1.948(a) of the Rules.
Proposed Forfeiture
Section 503(b) of the Act provides that any person who willfully or repeatedly fails to comply substantially with the terms and conditions of any license, or willfully or repeatedly fails to comply with any of the provisions of the Act or of any rule, regulation, or order issued by the Commission thereunder, shall be liable for a forfeiture penalty. 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. The legislative history to Section 312(f)(1) of the Act clarifies that this definition of willful applies to both Sections 312 and 503(b) of the Act, and the Commission has so interpreted the term in the Section 503(b) context. The Commission may also assess a forfeiture for violations that are merely repeated, and not willful. The term "repeated" means the commission or omission of an act more than once or for more than one day. Based on the record before us, Constellium's apparent violations of Sections 301 and 310(d) of the Act, Sections 1.903(a) and 1.948(a) of the Rules, and the Universal Licensing System Orders and associated rules are both willful and repeated.
Operation of Eight PLMRS Stations Without Authority
In determining the appropriate forfeiture amount, Section 503(b)(2)(E) of the Act directs us to consider factors such as "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." Section 1.80(b) of the Rules sets a base forfeiture amount of $10,000 for operation of a station without Commission authority and a base forfeiture amount of $3,000 for failure to file required forms or information. The Commission has held that a licensee's continued operation without authorization and its failure to timely seek Commission authority for such operations constitute separate violations and warrant the assessment of separate forfeitures. We note that Constellium failed to file either a timely renewal or any other application seeking authority to operate the stations. Accordingly, we propose separate base forfeiture amounts for each of Constellium's apparent violations: $10,000 for each of the eight stations that continued to operate without Commission authority, and $3,000 for each failure to seek Commission authority for the stations, for a total base forfeiture of $104,000.
Given the totality of the circumstances, and consistent with the Forfeiture Policy Statement, however, we conclude that a significant upward adjustment is warranted. We are particularly concerned that Constellium's apparent unlawful operation continued for an extended period of time. Constellium operated four PLMRS stations without authority for more than two years, two stations without authority for more than one year, and two others without authority for more than ten months. Significantly, Constellium continued to operate all eight stations for approximately ten months after it had confirmed that the station licenses had expired, reflecting a deliberate intent to violate the Act and the Rules. As explained above, consistent with Section 301 of the Act, licensees who find themselves out of compliance with the licensing requirements should immediately cease unauthorized operation (which Constellium chose not to do) and seek temporary authority before continuing to operate. Finally, we also recognize that Constellium's parent company, Constellium N.V., is a multi-billion dollar global enterprise. In this respect, the Commission has determined that large or highly profitable companies should expect the assessment of higher forfeitures for violations of the Act and the Rules. Thus, to ensure that the forfeiture liability serves as an effective deterrent and not simply a cost of doing business for Constellium, a significant upward adjustment of the base forfeiture amount is further justified.
In applying the applicable statutory factors, we also consider whether there is any basis for a downward adjustment of the proposed forfeiture. Here, we find none. We decline to downwardly adjust the forfeiture on the grounds that the violations allegedly resulted from Constellium's lack of knowledge of the expired licenses, changes in company procedures and personnel, and other circumstances asserted by Constellium. The Commission has consistently held that lack of knowledge or erroneous belief does not warrant a downward adjustment of the forfeiture. As the Commission has emphasized, "[a]ll licensees are responsible for knowing the terms of their licenses and for filing a timely renewal application if they seek to operate beyond that term." In the absence of a timely renewal application, the Commission has clarified that some request for operating authority must be filed, noting that its "treatment of late-filed renewal applications should take into consideration the complete facts and circumstances involved." It is also well established that administrative oversight, inadvertence, or changes in personnel are not mitigating factors. Further, even though Constellium disclosed the violations prior to our investigation, Constellium acknowledged in its LOI Response that it became aware of the expiration of its eight PLMRS licenses in June or July of 2012, approximately ten months prior to the filing of its STA Requests. The company's delayed disclosure of the violations causes us to decline (consistent with precedent) to downwardly adjust the proposed forfeiture. Moreover, Constellium's assertion that it has developed comprehensive policies and procedures to prevent any future lapse in compliance concerning its FCC licenses, while laudable, does not negate its liability for the instant violations, nor do post-investigation remedial efforts warrant reduction of the proposed forfeiture. Finally, Constellium asserts that the severity of its violations is mitigated by the fact that the company was able to consolidate eight of its PLMRS authorizations into only four permanent authorizations at some time after the expiration and continued unauthorized operation of the eight PLMRS station licenses. We disagree. Section 90.35 of the Rules does not limit the number of locations and frequencies that can be combined into a single authorization. As a convenience to licensees, the Commission's Universal Licensing System permits, but does not require, licensees to consolidate PLMRS call signs. Thus, while Constellium at a time prior to expiration of the PLMRS authorizations could have consolidated its PLMRS authorizations into fewer licenses, it did not do so. As such, the fact that Constellium later consolidated certain of the locations and frequencies into only four licenses (after significant violations had already been committed with respect to the original eight PLMRS stations) does not serve to mitigate the violations.
Therefore, after applying the Forfeiture Policy Statement, Section 1.80 of the Rules, and the statutory factors, we conclude that Constellium is apparently liable for an aggregate forfeiture in the amount of $256,000 for the unauthorized operation of the eight PLMRS stations and its failure to seek Commission authority for its continued station operations.
Unauthorized Transfer of Control of 12 PLMRS Authorizations
We also consider the aforementioned Section 503(b)(2)(E) factors in determining the appropriate forfeiture to propose for Constellium's violations of Section 310(d) of the Act and Section 1.948 of the Rules. As a general matter, the base forfeiture for engaging in an unauthorized transfer of substantial control of a Commission license is $8,000. In the instant case, there were apparently 12 unauthorized transfers of control of PLMRS authorizations resulting from a single transaction. In prior unauthorized transfer of control cases concerning the same types of licenses, the Commission determined that a strict mathematical exercise of multiplying a base forfeiture amount for a violation times the number of licenses involved could result in an excessive forfeiture amount. As a result, for purposes of calculating the forfeiture penalty, the Commission has, in its discretion, decided to multiply the base amount of $8,000 times the number of transactions at issue (as opposed to the number of licenses transferred without authorization). We elect to apply the same approach here. As such, the base forfeiture amount for the violations here is $8,000 because all of the licenses were transferred in a single transaction. Further, consistent with prior precedent, we will upwardly adjust the base amount after consideration of a number of factors, including the number of licenses involved (here, there are 12 at issue), ability to pay, duration of the violation, and other Section 503(b)(2)(E) factors.
The unauthorized transfer of control involved a substantial number of authorizations (eight temporary authorizations to operate PLMRS stations and four PLMRS licenses), and continued for certain of those authorizations for nearly one year. In addition, as noted above, Constellium's parent company, Constellium N.V., is a multi-billion dollar global enterprise. The severity of Constellium's apparent violation, however, is mitigated by its prompt voluntary disclosure to Commission staff of the transfer of control of Constellium's PLMRS authorizations, which preceded the Bureau's investigation of that violation and the initiation of enforcement action. As such, we find that, based on the particular circumstances of this case, some reduction of the forfeiture is appropriate. Given the totality of the circumstances, and applying the factors set forth in Section 503(b)(2)(E) of the Act, Section 1.80 of the Rules, and the Forfeiture Policy Statement, we conclude that Constellium is apparently liable for an aggregate forfeiture of $38,400 for its unauthorized transfer of control of 12 PLMRS authorizations. We therefore find Constellium apparently liable for a total aggregate forfeiture of $294,400.
ORDERING CLAUSES
Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the Communications Act of 1934, as amended, and Sections 1.80 of the Commission's rules, Constellium Rolled Products Ravenswood, LLC, an indirect, wholly-owned subsidiary of Constellium N.V., is hereby NOTIFIED of this APPARENT LIABILITY FOR A FORFEITURE in the amount of two hundred ninety-four thousand four hundred dollars ($294,400) for willful and repeated violations of Sections 301 and 310(d) of the Communications Act of 1934, as amended; Sections 1.903(a) and 1.948(a) of the Commission's Rules; and the Universal Licensing System Orders and associated rules.
IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Commission's rules, within thirty (30) calendar days of the release date of this Notice of Apparent Liability for Forfeiture, Constellium Rolled Products Ravenswood, LLC SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a written statement seeking reduction or cancellation of the proposed forfeiture consistent with paragraph 22 below.
Payment of the forfeiture must be made by check or similar instrument, wire transfer, or credit card, and must include the NAL/Account Number and FRN referenced above. Constellium Rolled Products Ravenswood, LLC shall send electronic notification of payment to Paul Noone at Paul.Noone@fcc.gov, Pamera Hairston at Pamera.Hairston@fcc.gov, and Samantha Peoples at Sam.Peoples@fcc.gov on the date said payment is made. Regardless of the form of payment, a completed 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). Below are additional instructions that Constellium Rolled Products Ravenswood, LLC should follow based on the form of payment it selects:
* Payment by check or money order must be made payable to the order of the Federal Communications Commission. Such payments (along with the completed Form 159) must be mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101.
* Payment by wire transfer must be made to ABA Number 021030004, receiving bank TREAS/NYC, and Account Number 27000001. To complete the wire transfer and ensure appropriate crediting of the wired funds, a completed Form 159 must be faxed to U.S. Bank at (314) 418-4232 on the same business day the wire transfer is initiated.
* Payment by credit card must be made by providing the required credit card information on FCC Form 159 and signing and dating the Form 159 to authorize the credit card payment. The completed Form 159 must then be mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101.
Any request for making full payment over time under an installment plan should be sent to: Chief Financial Officer -- Financial Operations, Federal Communications Commission, 445 12th Street, S.W., Room 1-A625, Washington, DC 20554. If Constellium Rolled Products Ravenswood, LLC has questions regarding payment procedures, it should contact the Financial Operations Group Help Desk by phone, 1-877-480-3201, or by e-mail, ARINQUIRIES@fcc.gov.
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 1.16 and 1.80(f)(3) of the Commission's rules. The written statement must be mailed to the Office of the Secretary, Federal Communications Commission, 445 12th Street, S.W., Washington, DC 20554, ATTN: Enforcement Bureau - Spectrum Enforcement Division, and must include the NAL/Account Number referenced in the caption. The statement must also be e-mailed to Paul Noone at Paul.Noone@fcc.gov and to Pamera Hairston at Pamera.Hairston@fcc.gov.
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.
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 Buddy Stemple, Chief Executive Officer, Constellium Rolled Products Ravenswood, LLC, 859 Century Road, Ravenswood, West Virginia 26164; to Georgina L.O. Feigen, Esq., Butcher Feigen, LLC, 9116 Cranford Drive, Potomac, Maryland 20854; and to David H. Solomon, Esq., Wilkinson Barker Knauer LLP, 2300 N Street, N.W., Suite 700, Washington, DC 20037.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary