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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Skywave Electronics, Inc. ) File
No. EB-00-AT-289
Rockford, Illinois ) NAL/Acct.
No. X3248003
FORFEITURE ORDER
Adopted: December 12, 2000 Released: December 14,
2000
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Forfeiture Order (``Order''), we issue a
monetary forfeiture in the amount of seven thousand dollars
($7,000) against Skywave Electronics, Inc. (``Skywave'') for
violating Section 302 of the Communications Act of 1934, as
amended (``Act'')1 and Section 2.907 of the Commission's Rules
(``Rules''),2 by marketing a non-compliant device for use in the
FM broadcast band. The noted violations involve the sale and
distribution of at least 11 FM transmitters that exceeded the
power limitations of Skywave's FCC authorization.
2. On May 9, 2000, the District Director of the Atlanta,
Georgia Field Office issued a Notice of Apparent Liability for
Forfeiture (``NAL'') in the amount of seven thousand dollars
($7,000).3 Skywave filed a response on May 18, 2000.
II. BACKGROUND
3. Skywave holds a Grant of Equipment Authorization
(``Authorization'') for the manufacture and distribution of a
low-power transmitter device, the SKY-2000 Digital FM
Transmitter.4 On August 6, 1999, an agent in the Commission's
Denver Field Office investigated a complaint of an illegal FM
broadcast station. In the course of that investigation, the
agent found that the station was using Skywave's SKY-2000 digital
FM transmitter. Field strength measurements taken during the
investigation showed that the SKY-2000 was operating at 29 times
the permitted level authorized by Section 15.239 of the Rules5
for a non-licensed low-powered transmitter. Subsequently, the
Commission's Office of Engineering and Technology (``OET'')
requested and obtained two sample transmitters from Skywave to be
evaluated for compliance with its Authorization, and found that
one of the units failed to conform to the emission requirements
of the Authorization. OET issued a citation to Skywave on
October 5, 1999 for marketing a non-compliant device.
4. On September 28, 1999, agents from the Commission's
Atlanta Field Office began an investigation into the marketing of
Skywave low power FM transmitters, following local news reports
featuring the transmitters. Agents found several non-compliant
SKY-2000 FM transmitters distributed by Skywave in operation
throughout the Atlanta metropolitan area. During a telephone
conversation that same day, the president of Skywave advised an
agent of the Atlanta Field Office that all units shipped from
Skywave after July 13, 1999 were in compliance with the revised
Authorization issued July 13, 1999. However, FCC agents obtained
evidence that several non-compliant units were shipped after July
13, 1999.
5. In its response to the NAL, Skywave acknowledges its
non-compliance. It asserts that the company sought to rectify
the problems promptly after receiving notification that certain
units were non-compliant by notifying dealers and recalling old
units for testing and retrofitting to bring them into compliance.
Skywave contends that it did not understand all that was expected
of it as the certification holder for the product, but that it
has acquired greater knowledge of the Commission's rules as a
result of this incident. Skywave asserts that it is the
international distributor for, and not the manufacturer of, the
SKY-2000 transmitter, and that it did not willfully and
repeatedly distribute the product knowing that it was over
powered. It concedes that it may have erred by informing the
Atlanta Field Office that only compliant SKY-2000 units were
shipped after July 13, 1999, but notes that the sale date for a
transmitter does not always reflect the date the merchandise was
shipped from Skywave, as the products are sold through dealers.
Skywave also seeks a waiver or dramatic reduction of the
forfeiture due to its assertions regarding its financial
circumstances, its understanding of the rules, and its efforts to
correct the problem. In support of its inability to pay claim,
Skywave has submitted copies of its income tax returns for 1997,
1998 and 1999, as well as an income statement and balance sheet
for 1998 and profit and loss statement for 1999.
III. DISCUSSION
6. Both the Act and the Rules prohibit the sale or offer
for sale of radio frequency devices, as well as the shipment or
distribution for the purpose of selling such devices, unless the
device has first been properly authorized, identified and labeled
in accordance with the Commission's Rules.6 The Authorization
was an equipment certification, which is based on representations
and test data submitted by the company, and attaches to all units
subsequently marketed by the grantee which are identical to the
sample tested.7 Although Skywave had obtained an authorization
for and labeled its transmitters as required under the Rules, at
least 11 of the transmitters actually distributed by the company
in the greater Atlanta area did not conform to the terms of the
Authorization. Skywave's assertion that it did not fully
understand its obligations as the holder of the Authorization
will not excuse this violation. As the holder of the
Authorization, it is responsible for the compliance of its radio
frequency devices with the applicable standards. See 47 C.F.R.
§ 2.909. Further, although Skywave may have taken prompt action
to rectify the problems, remedial action to correct a violation,
while commendable, will generally not nullify a forfeiture
penalty. See Station KGVL, Inc., 42 FCC 2d 258, 259 (1993).
7. Skywave's contention that it merely distributes the
device does not excuse the offense. The violation at issue is
the sale and distribution of FM transmitters that did not comply
with the terms of Skywave's Authorization, despite proper FCC
identification and labeling. As noted in the NAL, these
violations were willful and repeated under the Act because they
were not caused by accident or mistake, and because more than one
non-compliant unit was sold and distributed by Skywave.8
8. The Commission has previously held that a licensee's
gross income is generally the best indicator of its ability to
pay a forfeiture. Although net losses may be relevant in some
cases, if gross revenues are sufficiently great, the fact that a
business is operating at a loss does not by itself mean that it
cannot afford to pay a forfeiture.9 In support of its claim of
inability to pay, Skywave has submitted financial data for 1997
through 1999, and has requested that we keep its financial
information confidential. After reviewing the financial data
submitted, we find no evidence in Skywave's response that would
support a reduction of the forfeiture amount.
IV. ORDERING CLAUSES
9. Accordingly, IT IS ORDERED THAT, pursuant to Section
503(b) of the Act,10 and Sections 0.111, 0.311 and 1.80(f)(4) of
the Rules,11 Skywave Electronics, Inc., IS LIABLE FOR A MONETARY
FORFEITURE in the amount $7,000 for violating the provisions of
Section 302 of the Act and Section 2.907 of the Rules, which
require radio frequency devices to be properly authorized,
identified, and labeled in accordance with the Commission's Rules
prior to their sale, offer for sale, shipment, or distribution
for sale, and provide that all products distributed pursuant to
Commission certification be identical to the sample upon which
the grant of certification was based.
10. Payment of the forfeiture shall be made in the manner
provided for in Section 1.80 of the Commission's Rules12 within
30 days of the release of this Order. If the forfeiture is not
paid within the period specified, the case may be referred to the
Department of Justice for collection pursuant to Section 504(a)
of the Act.13 Payment shall be made by mailing a check or
similar instrument, payable to the order of the Federal
Communications Commission, to the Federal Communications
Commission, P.O. Box 73482, Chicago, Illinois 60673-7482. The
payment should note the NAL/Acct. No. referenced above. Requests
for full payment under an installment plan should be sent to:
Chief, Credit and Debt Management Center, 445 12th Street, S.W.,
Washington, D.C. 20554.14
11. IT IS FURTHER ORDERED that a copy of this Order
shall be sent by Certified Mail Return Receipt Requested to
Skywave Electronics, Inc. at 1205 N. Horace Avenue, Rockford,
Illinois 61101.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 47 U.S.C. § 302.
2 47 C.F.R. § 2.907.
3 Notice of Apparent Liability for Forfeiture, NAL/No.
X3248003 (Enf. Bur., Atlanta Office, released May 9, 2000).
4 FCC Identifier NX3SKY2000. The grant was originally
issued on August 18, 1998, and was updated to reflect a
modification of the device on July 13, 1999.
5 47 C.F.R. § 15.239.
6 47 U.S.C. § 302(b) and 47 C.F.R. § 2.803(a)(1).
7 See 47 C.F.R. § 2.907.
8 Section 312(f)(1) of the Act, 47 U.S.C. § 312(f)(1), which
also applies to Section 503(b) of the Act, provides: ``the term
`willful,' when used with reference to the commission or omission
of any act, means the conscious and deliberate commission or
omission of such act, irrespective of any intent to violate any
provision of this Act or any rule or regulation of the Commission
authorized by this Act or by a treaty ratified by the United
States.'' See Southern California Broadcasting Co., 6 FCC Rcd
4387 (1991). Section 312(f)(1) of the Act further provides that
``[t]he term `repeated,' when used with reference to the
commission or omission of any act, means the commission or
omission of such act more than once ....''
9 See PJB Communications of Virginia, Inc., 7 FCC Rcd 2088,
2088-89 (1992) ($8,000 forfeiture not excessive where gross
income was $395,469; and net loss information submitted reflected
only expected losses). See also The Hinton Telephone Co. of
Hinton, Oklahoma, 8 FCC Rcd 5176, 5177 (1993) ($5,000 forfeiture
not excessive where gross revenues were over $2 million, despite
negative net income of $46,000).
10 47 U.S.C. § 503(b).
11 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).
12 47 C.F.R. § 1.80.
13 47 U.S.C. § 504(a).
14 See 47 C.F.R. § 1.1914.