There’s a New Sheriff in Town
Well, maybe not a new sheriff, but the FCC’s Enforcement Bureau (“EB”) has assumed a prominence under Chairman Tom Wheeler that the industry has not seen for some time. With a mandate to prevent unlawful conduct and thereby ensure “(1) consumer protection in an era of complex communications; (2) a level playing field to promote robust competition; (3) efficient and responsible use of the public airwaves; and (4) strict compliance with public safety-related rules,” there is no shortage of matters that the EB could be investigating. They’ve even tightened up their Consent Decree language by requiring an admission of wrongdoing and deleting the word “voluntary” when describing the financial contributions made pursuant to those negotiated settlements. Together, these changes likely make it impossible for parties to claim the payments as deductible business expenses for tax purposes, a key inducement for entering into Consent Decrees under previous administrations.
Not that anyone should feel sorry for most companies whose activities have caused the EB to swing a pretty heavy hammer. Who could argue with assessed fines of $34.9M against a foreign company that sold illegal signal jammers to U.S. consumers for more than 2 years, $7.62M against a company for allegedly “slamming,” “cramming,” and submitting falsified evidence to the government as “proof" of consumers' authorizations for these charges, or $400K against Sony for not offering the required number of hearing aid-compatible handsets. These are entities actively engaged in telecommunications that should know the rules. To be effective, fines need to be large enough to make it more economically rational to comply with than to violate FCC regulations.
For legitimate PLMR operators who have to contend with unfair competition from companies that don’t follow the rules or who suffer interference from unlicensed or incorrectly licensed systems, the prospect of beefed-up enforcement should be welcome news. Of course, this assumes the EB has resources to devote to this much lower profile work, particularly when it does not involve a public safety entity (see EB mandate (4) above). That has not always been the case in the past, to the frustration of EWA members. A few high-dollar forfeitures against licensees that deliberately ignore FCC rules because it is faster or cheaper to do so, or because the proposed operation cannot comply with those rules at all, might cause others to think twice if the fines were given publicity within the PLMR community, where facts travel almost as fast as rumors.
But what is the purpose of a $294K fine for a business that discovered and voluntarily disclosed continued operation on a handful of shared frequencies after license expiration and an unauthorized transfer of control? Yes, it is an FCC licensee just like Verizon or Comcast and perhaps has revenues equal to theirs. But like most non-commercial PLMR licensees, it uses wireless communications as a tool to run its “real” business more efficiently and safely. Shouldn’t that be taken into consideration in the FCC’s forfeiture analysis, as well as the fact that its activities really were a “no harm; no foul” situation? No consumer or other licensee was affected by what clearly were inadvertent violations that gained the company nothing but a whopping fine. So, while more active FCC enforcement may be good, sensible FCC enforcement would be even better.