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Client Alerts

FCC Enforcement Update—2014 Year in Review

January 13, 2015

Client Alerts

FCC Enforcement Update—2014 Year in Review

January 13, 2015

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There have been significant changes in enforcement in 2014, including the ushering in of a new Bureau Chief. We negotiated several enforcement matters and saw interesting developments take place. First, the penalties are becoming steep. In June, the FCC levied a historic $36.9 Million forfeiture against a Chinese signal jammer manufacturer. Forfeitures and consent decree payments are generally higher too, with several manufacturers and equipment retailers paying six-figure amounts. The FCC is exercising its discretion to increase base fines and tally up multiple violations related to an offense.

Consent decrees, which have long been used as a tool to settle FCC investigations, have changed too. Companies no longer pay a “voluntary contribution to the United States Treasury”; they now pay a “civil penalty.” More importantly, companies must now admit to liability in the consent decree. One of the major benefits of consent decrees in the past was that it expressly stated that the targeted company had not been found guilty. Not only is that statement gone, the company must actually admit it violated the rules. We’ve analyzed this issue extensively, and recommend that companies consider the potential long-term ramifications of such admissions.

The FCC is branching into new areas to enforce. The FCC recently proposed a $10 Million forfeiture against two telecommunications providers that stored customer information on unprotected servers. The two Republican Commissioners objected to that decision, essentially saying that the FCC is making up new rules no one knows about it and then fining companies for violating those rules. Marriott paid $600,000 for deactivating “rogue” wireless access points at a hotel, an action it claims (and later filed a petition asking the FCC to declare) was a perfectly lawful practice to manage its network.

These changes indicate that this FCC wants companies to be held publicly accountable for rule violations and pay fines that won’t just be another cost of business. It’s a good time to make sure your house is in order. Companies subject to the FCC’s jurisdiction should have internal FCC compliance plans that are up-to-date and implemented across the company.

To view our 2014 FCC Enforcement Matrix of equipment violations, click here.

To learn more about FCC enforcement and Fish’s Communications and Spectrum Regulation practice, visit our website,
http://www.fr.com/fcc-enforcement-update, or contact:

Terry Mahn
Principal
mahn@fr.com
Donna Balaguer
Principal
balaguer@fr.com

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