Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:
- FCC Fines Colorado Wireless Operators for Use of Unauthorized Equipment and Unauthorized Operations
- VoIP Provider Enters Into Consent Decree With $180,000 Penalty Over Failure to Meet FCC Filing Requirements
- FCC Investigates Colorado Manufacturer’s Unauthorized Signal Booster
Two Colorado Wireless Operators Fined for Unauthorized Equipment and Unauthorized Operations
The FCC fined two Colorado-based wireless operators for intentionally altering settings on equipment so as to operate it in a manner not authorized by the FCC’s rules. The operators, licensed to provide radiolocation services (such as radar services), instead operated a GPS vehicle tracking service using the unauthorized equipment on unauthorized frequencies.
Under Section 301 of the Communications Act of 1934 and Section 1.903(a) of the FCC’s Rules, the operation of any device that transmits radio signals, communications, or energy without an FCC authorization is prohibited. Additionally, Section 302(b) of the Communications Act requires that radio frequency devices operate in accordance with their associated FCC authorization. While a radiolocation service licensed under subpart F of Part 90 of the FCC’s Rules permits operations that “determine distance, direction, speed or position by means of radiolocation services, for purposes other than navigation,” GPS services rely on satellite communications to determine the location of an object, typically to allow the owner of a GPS receiver to navigate based upon triangulation of the satellite GPS signals.
The FCC began investigating the two operators in April 2017 after receiving a complaint alleging that the companies were providing non-radiolocation wireless data transmission services rather than the radiolocation services for which they were licensed. The Enforcement Bureau issued Letters of Inquiry (LOI) to both operators, and FCC agents followed up with an investigation of the companies’ shared facilities in Denver, Colorado. This investigation led the FCC to issue a second set of LOIs seeking additional information from the companies regarding the equipment used.
In October 2017, the companies filed requests for Special Temporary Authority (STA) acknowledging their unauthorized use of the equipment and seeking authority to migrate their radiolocation services to an affiliated non-radiolocation licensee authorized to operate on a different frequency. The FCC denied the STA requests, as well as a subsequent Petition for Rulemaking filed jointly by the companies, noting that the services proposed would still be prohibited on the newly-requested frequencies, and that the transmission of GPS coordinates is not a radiolocation service as defined by the FCC’s rules.
In September 2018, the FCC issued a Notice of Apparent Liability (NAL) proposing $534,580 in total fines against the two companies for the use of unauthorized equipment and conducting unauthorized operations. The companies responded to the notice, presenting several arguments as to why the NAL should be cancelled, but according to the FCC, still failing to explain how the non-radiolocation GPS service could legally operate using noncompliant equipment on a frequency band designated for other services.
The FCC considered and dismissed the companies’ various arguments, upholding the fines it had originally proposed. Among other arguments, the companies asserted that they had held a reasonable belief that the GPS service was authorized due to prior conversations and assurances from FCC staff. The FCC rejected that argument and reiterated that “parties who rely on staff advice or interpretations do so at their own risk.” Critically, the FCC noted that the licenses themselves did not authorize non-radiolocation services, and a license grant is not a blanket authorization to operate any equipment of a party’s choosing. The FCC also rejected the companies’ request that the fines be cancelled, instead choosing to adjust the fines upward due to both companies’ history of repeated and continuous violations of the FCC’s rules, along with the deliberate nature of these particular violations.
The companies have 30 days from release of the Orders to pay the fines in full. If the fines are not paid within that time, the FCC noted that it may refer the matter to the Department of Justice to commence collection proceedings.
VoIP Provider Hit With $180,000 Penalty Over Failure to Comply with FCC Filing Requirements
The FCC entered into a Consent Decree with a Voice over IP (VoIP) provider, resolving an investigation into whether the provider violated several of the FCC’s filing requirements. For purposes of settling the matter, the provider admitted that it failed to timely file its Telecommunications Reporting Worksheets, CPNI Certifications, Advanced Telecommunications Capability Data, and a response to an LOI from the Enforcement Bureau.
Under Section 254(d) of the Communications Act, “[e]very telecommunications carrier [providing] interstate telecommunications services . . . [must] contribute, on an equitable and nondiscriminatory basis, to the specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service.” In implementing this directive, the FCC requires interstate telecommunications service providers, including VoIP providers, to contribute a portion of their interstate and international end-user telecommunications revenue to the Universal Service Fund (USF). To accomplish this, providers must file annual, and in most cases quarterly, Telecommunications Reporting Worksheets (Worksheets) reporting their interstate and international revenue. Failure to timely file and accurately report this information prevents the FCC from ensuring the provider is contributing its required share to the USF.