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Federal Communications Commission DA 16-1463
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of
Amendment of Section 1.80(b) of the
Commissions Rules
Adjustment of Civil Monetary Penalties to Reflect
Inflation
)
)
)
)
)
)
)
ORDER
Adopted: December 30, 2016 Released: December 30, 2016
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. This Order amends Section 1.80(b) of the Commissions rules (the Rules)
1
to adjust the
forfeiture penalties for inflation, in accordance with the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015 (the 2015 Inflation Adjustment Act).
2
That Act requires agencies, starting in
2017, to adjust annually the civil monetary penalties covered thereunder, and to publish each such annual
adjustment by January 15.
3
The 2015 Inflation Adjustment Act provides that the new penalty levels shall
apply to penalties assessed after the effective date of the increase, including [penalties] whose associated
violation predated such increase.
4
II. DISCUSSION
2. On November 2, 2015, President Obama signed into law the Bipartisan Budget Act of
2015, which included, as Section 701 thereto, the 2015 Inflation Adjustment Act, which amended the
Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410), to improve the effectiveness
of civil monetary penalties and maintain their deterrent effect. That statute requires annual inflation
adjustments for any penalty, fine, or other sanction that . . . is for a specific monetary amount as
provided by Federal law . . . or . . . has a maximum amount provided for by Federal law; and . . . is
assessed or enforced by any agency pursuant to Federal law; and . . . is assessed or enforced pursuant to
an administrative proceeding or a civil action in the Federal courts..
5
This adjustment thus applies only
1
47 CFR 1.80(b).
2
Sec. 701, Pub. L. No. 114-74, 129 Stat. 584, 599. All citations herein to the 2015 Inflation Adjustment Act are to
the provisions of the Federal Civil Penalties Inflation Adjustment Act of 1990, codified as further amended by the
2015 Inflation Adjustment Act at 28 U.S.C. § 2461 note (2015 Inflation Adjustment Act).
3
2015 Inflation Adjustment Act. See also Memorandum for the Heads of Executive Departments and Agencies re
Implementation of the 2017 annual adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, M-17-11, Dec. 16, 2016 (OMB Dec. 2016 Guidance) at 1.
4
2015 Inflation Adjustment Act. See also, OMB Dec. 2016 Guidance at 4.
5
2015 Inflation Adjustment Act, § 3(2), quoted in OMB Dec. 2016 Guidance at 2.
Federal Communications Commission DA 16-1463
2
to penalties with a dollar amount.
6
The adjustments are calculated pursuant to Office of Management and
Budget (OMB) guidance.
7
3. The 2015 Inflation Adjustment Act required agencies to issue an interim final
rulemaking and publish interim final rules with initial catch-up adjustments by July 1, 2016, which
were to take effect by August 1, 2016.
8
On June 9, 2016, the Enforcement Bureau released an interim
final rulemaking order to publish interim final rules with the initial catch-up adjustments.
9
The new
penalty levels took effect on August 1, 2016.
10
4. On December 16, 2016, the Director of OMB issued guidance on the implementation of
the 2017 annual adjustment rate pursuant to the 2015 Inflation Adjustment Act,
11
and this Order follows
that guidance. OMB instructs that, in order to complete the 2017 annual adjustment, the Commission
must first identify the applicable civil monetary penalties.
12
Then the Commission must apply the OMB
supplied 2017 adjustment multiplier, which is 1.01636, to the most recently established or adjusted
penalty amount.
13
Then the Commission must round each penalty amount to the nearest dollar.
14
5. In the interim final rulemaking, we individually evaluated and adjusted each penalty to
reflect the catch up provisions of the 2015 Inflation Adjustment Act. For 2017, the multiplier is applied
to the most recent penalty amount, which includes the catch-up adjustment. As such, the penalties do
not require individualized adjustments. Rather, the 2017 adjusted penalty or penalty range for each
applicable penalty is calculated by multiplying the most recent catch up penalty amount effective on
August 1, 2016 by the 2017 annual adjustment (1.01636), then rounding the result to the nearest dollar.
15
Attachment A provides a summary comparison of the 2016 adjustments with the 2017 adjustments. Any
adjustments in civil monetary penalties that we adopt in this Order will apply only to such penalties
assessed on and after the effective date of the amendments to Section 1.80(b).
III. PROCEDURAL MATTERS
6. The Enforcement Bureau is responsible for, among other things, rulemaking proceedings
regarding general enforcement policies and procedures.
16
Further, the Commission delegated to the
Chief, Enforcement Bureau authority to perform such rulemaking functions that do not involve [n]otices
of proposed rulemaking and of inquiry and final orders in such proceedings.
17
In the 2015 Inflation
6
See OMB Dec. 2016 Guidance at 2.
7
2015 Inflation Adjustment Act, § 7.
8
Id. §§ 4(b)(1), 5(b)(2).
9
See Amendment of Section 1.80(b) of the Commissions Rules, Adjustment of Civil Monetary Penalties to Reflect
Inflation, Order, 31 FCC Rcd 6793 (EB 2016) (2016 Forfeiture Adjustment Order).
10
See Adjustment of Civil Monetary Penalties to Reflect Inflation, 81 Fed. Reg. 42554 (June 30, 2016).
11
OMB Dec. 2016 Guidance.
12
OMB Dec. 2016 Guidance at 2.
13
Id. The adjustment is the percentage (if any) by which the (A) Consumer Price Index for the month of October
preceding the date of the adjustment, exceeds (B) the Consumer Price Index for the month of October 1 year before
the month of October referred to in subparagraph (A). Id. at 1, n.4 (Oct. 2016 CPI-U (241.729) / Oct. 2015 CPI-U
(237.8838) = 1.01636). See also Federal Civil Penalties 2015 Inflation Adjustment Act of 1990, § 5(b)(1) (amended
2015).
14
OMB Dec. 2016 Guidance at 2.
15
Id. at 2-3.
16
See 47 CFR § 0.111(a)(22).
17
47 CFR § 0.311(a)(1).
Federal Communications Commission DA 16-1463
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Adjustment Act, Congress has mandated the periodic adjustment of the Commissions civil monetary
penalties to reflect inflation and specified the formula for calculating such adjustment, and the
Commission has no discretion to set alternative levels of adjusted civil monetary penalties. Moreover,
that Act expressly provided that the annual adjustments shall be made notwithstanding the notice and
comment rulemaking procedures that might otherwise apply under Section 553 of the Administrative
Procedure Act.
18
Therefore, action on delegated authority is properly taken in this Order amending the
Commissions maximum civil monetary penalties, which are a part of the Commissions general
enforcement policies and procedures. In addition, because a notice of proposed rulemaking is not
required for these rule changes, the regulatory flexibility analyses otherwise required by the Regulatory
Flexibility Act do not apply.
19
7. We have analyzed the actions taken herein with respect to the Paperwork Reduction Act
of 1995 (PRA),
20
and we find them to impose no new or modified information collection(s) subject to the
PRA. In addition, therefore, pursuant to the Small Business Paperwork Relief Act of 2002,
21
our actions
do not impose any new or modified information collection burden for small business concerns with
fewer than 25 employees.
22
IV. ORDERING CLAUSES
8. Accordingly, pursuant to the Bipartisan Budget Act of 2015, 28 U.S.C. § 2461 note, and
Sections 0.111(a)(22) and 0.311 of the Commissions rules, 47 CFR §§ 0.111(a)(22), 0.311, IT IS
ORDERED that this Order IS ADOPTED.
9. IT IS FURTHER ORDERED that Section 1.80(b) of the Commissions rules, 47 CFR §
1.80(b), is AMENDED as set forth in the Appendix.
10. IT IS FURTHER ORDERED that this Order and the foregoing amendments to the
Commissions rules SHALL BE EFFECTIVE upon publication in the Federal Register.
11. IT IS FURTHER ORDERED that the Enforcement Bureau shall coordinate with the
Commissions Consumer & Governmental Affairs Bureau, Reference Information Center, TO SEND a
copy of this Order to Congress and the Government Accountability Office pursuant to the Congressional
Review Act, 5 U.S.C. § 801(a)(1)(A).
FEDERAL COMMUNICATIONS COMMISSION
Travis LeBlanc
Chief
Enforcement Bureau
18
2015 Inflation Adjustment Act, § 4(b)(2). See also OMB Dec. 2016 Guidance at 3 (noting that the notice, . . .
opportunity for comment, and . . . delay in effective date generally required by the Administrative Procedure Act
are not required for agencies to issue regulations implementing the annual adjustment).
19
Pub. L. No. 96-354, 94 Stat. 1164 (codified at 5 U.S.C. §§ 601-612); see 5 U.S.C. §§ 603-604.
20
Pub. L. No. 104-13, 109 Stat. 163 (codified at 13 U.S.C. § 91, 44 U.S.C. §§ 101 note, and 44 U.S.C. §§ 3501-
3520).
21
Pub. L. No. 107-198, 116 Stat. 729 (codified at 5 U.S.C. § 601 note, 44 U.S.C. §§ 101 note, 3504, 3506, 3520,
3521).
22
See 44 U.S.C. § 3506(c)(4).
Federal Communications Commission DA 16-1463
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APPENDIX
Part 1 of Chapter 1 of Title 47 of the Code of Federal Regulations is amended as follows:
PART 1---PRACTICE AND PROCEDURE
Subpart A---General Rules of Practice and Procedure
Miscellaneous Proceedings
1. The authority citation for part 1 continues to read as follows:
Authority: 15 U.S.C. 79 et seq., 47 U.S.C. 151, 154(i) and (j), 155, 157, 225, 227, 303(r), and 309.
2. Section 1.80 is amended by revising the table following paragraph (b)(8) Section III. Non-
Section 503 Forfeitures That Are Affected by the Downward Adjustment Factors and revising paragraph
(b)(9) to read as follows:
§1.80 Forfeiture proceedings.
* * * * *
Section III. Non-Section 503 Forfeitures That Are Affected by the Downward Adjustment Factors
*****
-------------------------------------------------------------
Violation
Statutory
Amount
($)
Sec. 202(c) Common Carrier Discrimination
Sec. 203(e) Common Carrier Tariffs
.
Sec. 205(b) Common Carrier Prescriptions
...
Sec. 214(d) Common Carrier Line Extensions
..
Sec. 219(b) Common Carrier Reports
Sec. 220(d) Common Carrier Records & Accounts
Sec. 223(b) Dial-a-Porn
.
Sec. 227(e) Caller Identification
....
Sec. 364(a) Forfeitures (Ships)
..
Sec. 364(b) Forfeitures (Ships)
.
$11,548, $577/day
$11,548, $577/day
$23,095
$2,309/day
$2,309/day
$11,548/day
$119,668/day
$11,052/violation
$33,156/day for each day of continuing violation,
up to $1,105,241 for any single act or failure to
act
$9,623/day (owner)
$1,925 (vessel master)
Federal Communications Commission DA 16-1463
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Sec. 386(a) Forfeitures (Ships)
.
Sec. 386(b) Forfeitures (Ships)
.
Sec. 634 Cable EEO
.
.
$9,623/day (owner)
$1,925 (vessel master)
$853/day
(9) Inflation adjustments to the maximum forfeiture amount.
(i) Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Public
Law 114-74 (129 Stat. 599-600), which amends the Federal Civil Monetary Penalty Inflation Adjustment
Act of 1990, Public Law 101-410 (104 Stat. 890; 28 U.S.C. 2461 note), the statutory maximum amount of
a forfeiture penalty assessed under this section shall be adjusted annually for inflation by order published
no later than January 15 each year Annual inflation adjustments will be based on the percentage (if any)
by which the CPI-U for October preceding the date of the adjustment exceeds the prior years CPI-U for
October. The Office of Management and Budget (OMB) will issue adjustment rate guidance no later than
December 15 each year to adjust for inflation in the CPI-U as of the most recent October.
(ii) The application of the annual inflation adjustment required by the foregoing Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015 results in the following adjusted statutory maximum
forfeitures authorized by the Communications Act:
U.S. Code citation Maximum Penalty after
2017 Annual Inflation Adjustment
47 U.S.C. 202(c)
47 U.S.C. 203(e)
47 U.S.C. 205(b)
............................................
47 U.S.C. 214(d)
..
.
47 U.S.C. 219(b)
47 U.S.C. 220(d)
47 U.S.C. 223(b)
47 U.S.C. 227(e)
47 U.S.C. 362(a)
47 U.S.C. 362(b)
47 U.S.C. 386(a)
.
..
47 U.S.C. 386(b)
.
..
47 U.S.C. 503(b)(2)(A)
..
$11,548
$577
$11,548
$577
$23,095
$2,309
$2,309
$11,548
$119,668
$11,052
$33,156
$1,105,241
$9,623
$1,925
$9,623
$1,925
$48,114
$481,147
Federal Communications Commission DA 16-1463
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47 U.S.C. 503(b)(2)(B)
...
... $192,459
$1,924,589
47 U.S.C. 503(b)(2)(C)
.. $389,305
47 U.S.C. 503(b)(2)(D)
..
$3,593,585
$19,246
47 U.S.C. 503(b)(2)(F)
47 U.S.C. 507(a)
...
.
$144,344
$110,524
$1,105,241
$1,906
47 U.S.C. 507(b)
.... $279
47 U.S.C. 554
. $853
* * * * *
Federal Communications Commission DA 16-1463
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ATTACHMENT A
Section 1.80 Maximum Forfeiture Penalties
U.S. Code Citation Maximum Forfeiture Penalty as
of August 1, 2016
Maximum Forfeiture as of
January 15, 2017
47 U.S.C. 202(c) $11,362
$568/day
$11,548
$577/day
47 U.S.C. 203(e) $11,362
$568/day
$11,548
$577/day
47 U.S.C. 205(b) $22,723 $23,095
47 U.S.C. 214(d) $2,272 $2,309
47 U.S.C. 219(b) $2,272 $2,309
47 U.S.C. 220(d) $11,362 $11,548
47 U.S.C. 223(b) $117,742 $119,668
47 U.S.C. 227(e) $10,874/violation
$32,622/day for each day of
continuing violation up to
$1,087,450 for any single act or
failure to act
$11,052/violation
$33,156/day for each day of
continuing violation up to
$1,105,241 for any single act or
failure to act
47 U.S.C. 364(a) $9,468 $9,623
47 U.S.C. 364(b) $1,894 $1,925
47 U.S.C. 386(a) $9,468 $9,623
47 U.S.C. 386(b) $1,894 $1,925
47 U.S.C. 503(b)(2)(A) $47,340/violation or each day of
a continuing violation
up to
$473,402 for any single act or
failure to act
$48,114/violation or each day of
a continuing violation
up to
$481,147 for any single act or
failure to act
47 U.S.C. 503(b)(2)(B) $189,361/violation or each day
of a continuing violation up to
$1,893,610 for any single act or
failure to act
$192,459/violation or each day
of a continuing violation up to
$1,924,589 for any single act or
failure to act
47 U.S.C. 503(b)(2)(C) $383,038/violation or each day
of a continuing violation up to
$3,535,740 for any single act or
failure to act
$389,305/violation or each day
of a continuing violation up to
$3,593,585 for any single act or
failure to act
47 U.S.C. 503(b)(2)(D) $18,936/violation or each day of
a continuing violation
up to $142,021 for any single
act or failure to act
$19,246/violation or each day of
a continuing violation
up to $144,344 for any single
act or failure to act
47 U.S.C. 503(b)(2)(F) $108,745/violation or each day
of a continuing violation up to
$1,087,450 for any single act or
failure to act
$110,524/violation or each day
of a continuing violation up to
$1,105,241 for any single act or
failure to act
47 U.S.C. 507(a) $1,875 $1,906
47 U.S.C. 507(b) $275 $279
47 U.S.C. 554 $839 $853