Federal Communications Commission DA 10-2435 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Champaign Telephone Company d/b/a CT Communications, Inc. ) ) ) ) ) File No. EB-09-SE-191 NAL/Acct. No. 201132100016 FRN No. 0002926582 ORDER AND NOTICE OF APPARENT LIABILITY FOR FORFEITURE Adopted: December 30, 2010 Released: December 30, 2010 By the Acting Chief, Spectrum Enforcement Division, Enforcement Bureau: I. INTRODUCTION 1. In this Notice of Apparent Liability for Forfeiture (“NAL”), we find that the Champaign Telephone Company d/b/a CT Communications, Inc., a reseller of mobile wireless services through its operating division, CT Wireless (collectively, “CT Communications”),1 apparently willfully violated the wireless handset hearing aid compatibility status report filing requirements set forth in section 20.19(i)(1) of the Commission’s Rules (“Rules”).2 For this apparent violation, we propose a forfeiture in the amount of six thousand dollars ($6,000). We also direct CT Communications to file the required wireless handset hearing aid compatibility status report within thirty (30) days after the release of this NAL. II. BACKGROUND 2. In the 2003 Hearing Aid Compatibility Order, the Commission adopted several measures to enhance the ability of consumers with hearing loss to access digital wireless telecommunications.3 The Commission established technical standards that digital wireless handsets must meet to be considered compatible with hearing aids operating in acoustic coupling and inductive coupling (telecoil) modes.4 The Commission further established, for each standard, deadlines by which manufacturers and service providers were required to offer specified numbers or percentages of digital wireless handsets per air interface5 that are compliant with the relevant standard if they did not come under the de minimis 1 CT Communications also holds domestic section 214 authorizations. 2 47 C.F.R. § 20.19(i)(1). 3 The Commission adopted these requirements for digital wireless telephones under the authority of the Hearing Aid Compatibility Act of 1988, codified at section 710(b)(2)(C) of the Communications Act of 1934, as amended (“Act”), 47 U.S.C. § 610(b)(2)(C). See Section 68.4(a) of the Commission’s Rules Governing Hearing Aid- Compatible Telephones, Report and Order, 18 FCC Rcd 16753, 16787 ¶ 89 (2003); Erratum, 18 FCC Rcd 18047 (2003) (“Hearing Aid Compatibility Order”); Order on Reconsideration and Further Notice of Proposed Rulemaking, 20 FCC Rcd 11221 (2005) (“Hearing Aid Compatibility Reconsideration Order”). 4 See Hearing Aid Compatibility Order, 18 FCC Rcd at 16777 ¶ 56; 47 C.F.R. § 20.19(b)(1), (2). 5 The term “air interface” refers to the technical protocol that ensures compatibility between mobile radio service equipment, such as handsets, and the service provider’s base stations. Currently, the leading air interfaces include Code Division Multiple Access (CDMA), Global System for Mobile Communications (GSM), Integrated Digital Enhanced Network (iDEN) and Wideband Code Division Multiple Access (WCDMA) a/k/a Universal Mobile Telecommunications System (UMTS). Federal Communications Commission DA 10-2435 2 exception.6 In February 2008, as part of a comprehensive reconsideration of the effectiveness of the hearing aid compatibility rules, the Commission released an order that, among other things, adopted new compatible handset deployment benchmarks beginning in 2008.7 3. Of primary relevance here, the Commission also adopted reporting requirements to ensure that it could monitor the availability of these handsets and to provide valuable information to the public concerning the technical testing and commercial availability of hearing aid-compatible handsets, including on the Internet.8 The Commission initially required manufacturers and digital wireless service providers to report every six months on efforts toward compliance with the hearing aid compatibility requirements for the first three years of implementation (May 17, 2004, November 17, 2004, May 17, 2005, November 17, 2005, May 17, 2006 and November 17, 2006), and then annually thereafter through the fifth year of implementation (November 19, 2007 and November 17, 2008).9 In its 2008 Hearing Aid Compatibility First Report and Order, the Commission extended these reporting requirements with certain modifications on an open ended basis, beginning January 15, 2009.10 The Commission also made clear that these reporting requirements apply to manufacturers and service providers that fit within the de minimis exception.11 4. CT Communications, a reseller of wireless service through its subdivision CT Wireless, failed to file the required hearing aid compatibility status report for the period from July 1, 2008 through December 31, 2008 (due January 15, 2009). The Wireless Telecommunications Bureau referred CT Communications’s apparent violation of the reporting requirements to the Enforcement Bureau for possible enforcement action. On November 24, 2009, the Enforcement Bureau’s Spectrum Enforcement Division (“Division”) issued a Letter of Inquiry (“LOI”) to CT Communications, via its subdivision, CT Wireless.12 CT Communications responded on December 3, 2009.13 In its LOI Response,14 CT 6 See Hearing Aid Compatibility Order, 18 FCC Rcd at 16780 ¶ 65; 47 C.F.R. § 20.19(c), (d). The de minimis exception originally provided that manufacturers or mobile service providers that offer two or fewer digital wireless handset models per air interface are exempt from the hearing aid compatibility deployment requirements, and manufacturers or mobile service providers that offer three digital wireless handset models per air interface must offer at least one compliant model. 47 C.F.R. § 20.19(e). We note that the Commission recently limited the de minimis exception to an initial two-year period for manufacturers and service providers that do not qualify as “small entities.” See Amendment of the Commission’s Rules Governing Hearing Aid-Compatible Mobile Handsets, Policy Statement and Second Report and Order and Further Notice of Proposed Rulemaking, 25 FCC Rcd 11167, 11180- 11189 ¶¶ 35-59 (2010) (“Hearing Aid Compatibility Second Report and Order”). 7 See Amendment of the Commission’s Rules Governing Hearing Aid-Compatible Mobile Handsets, First Report and Order, 23 FCC Rcd 3406 (2008) (“Hearing Aid Compatibility First Report and Order”), Order on Reconsideration and Erratum, 23 FCC Rcd 7249 (2008). 8 See id. at 3443 ¶ 91. 9 Hearing Aid Compatibility Order, 18 FCC Rcd at 16787 ¶ 89; see also Wireless Telecommunications Bureau Announces Hearing Aid Compatibility Reporting Dates for Wireless Carriers and Handset Manufacturers, Public Notice, 19 FCC Rcd 4097 (Wireless Tel. Bur. 2004). 10 See Hearing Aid Compatibility First Report and Order 23 FCC Rcd at 3445-46 ¶¶ 97-99. 11 Id. at 3446 ¶ 99; see also Hearing Aid Compatibility Second Report and Order, 18 FCC Rcd at 11180-11189 ¶¶ 35-59 (2010). 12 See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal Communications Commission, to Michael Conrad, Chief Executive Officer, CT Wireless (November 24, 2009). 13 See Letter from Michael Conrad, President and General Manager, CT Communications, Inc., to Samantha Peoples, Program Analyst, Spectrum Enforcement Division, Enforcement Bureau, Federal Communications Commission (December 3, 2009) (“LOI Response”). 14 Id. at 1. Federal Communications Commission DA 10-2435 3 Communications states that it has partnered with Zefcom LLC d/b/a Telispire PCS (“Telispire”) to provide wireless service to customers, and claims that, as such, Telispire filed its January 15, 2009 hearing aid compatibility status report15 on behalf of both CT Communications and Telispire.16 III. DISCUSSION A. Failure to File Timely Hearing Aid Compatibility Status Report 5. Section 20.19(i)(1) of the Rules requires service providers to submit hearing aid compatibility status reports on January 15, 2009 (covering the six-month period ending December 31, 2008) and then annually thereafter.17 These reports are necessary to enable the Commission to perform its enforcement function and evaluate whether CT Communications is in compliance with Commission mandates that were adopted to facilitate the accessibility of hearing aid-compatible wireless handsets. These reports also provide valuable information to the public concerning the technical testing and commercial availability of hearing aid-compatible handsets.18 To date, Commission records show no January 15, 2009 status report on file for CT Communications. While Commission records do confirm that Telispire filed a hearing aid compatibility status report on January 15, 2009, Telispire’s report fails to satisfy CT Communications’s filing requirements. The report makes no reference to CT Communications and therefore does not provide a discernible way for the Commission or consumers to determine the number, model, or technical standards of the wireless hearing aid-compatible handsets that CT Communications offered – thus frustrating the main objectives of the filing requirement.19 Regardless of any contractual arrangement between Telispire and CT Communications resulting from their joint efforts to provide wireless service, the relevant Commission rules and orders make it clear that the filing obligation ultimately rests with CT Communications.20 Moreover, even if there was a contractual arrangement for Telispire to also file a 2009 Report that included CT Communications, CT Communications would be responsible for the acts or omissions of its employees or third party contractors. 21 Accordingly, we find that CT Communications failed to timely file the hearing aid 15 See Telispire’s Hearing Aid Compatibility Status Report (filed January 15, 2009) (“2009 Report”) at http://fjallfoss.fcc.gov/ecfs/document/view?id=6520193653. 16 Id. 17 47 C.F.R. § 20.19(i)(1). 18 See Hearing Compatibility First Report and Order, 23 FCC Rcd at 3441 ¶ 91 (stating that the hearing aid compatibility status reports will assist the Commission in monitoring the progress of implementation of the hearing aid-compatible digital wireless handset deployment requirements in section 20.19 of the Rules, and that the reports will provide valuable information to the public concerning hearing aid-compatible handsets); Hearing Aid Compatibility Reconsideration Order, 20 FCC Rcd at 11240 ¶ 41 (same); Hearing Aid Compatibility Order, 18 FCC Rcd at 16787 ¶ 89 (same). 19 The 2009 Report filed by Telispire via ECFS lists only Zefcom LLC d/b/a Telispire under the Section I. Company Information. See 2009 Report. The report lists handset models and the months in which the models were offered, but provides no information or indicia that any company other than Telispire offered the listed handsets during the months reported. Furthermore, the cover letter accompanying the 2009 report states that Zefcom LLC d/b/a/ Telispire PCS submits “its” Hearing Aid Compatibility Status report for Hearing Aid Compatibility Status Report. See Letter from Kenneth C. Johnson, Esquire, to Marlene H. Dortch, Secretary, Federal Communications Commission (January 15, 2009). 20 See 47 C.F.R. § 20.19(i)(1) (stating that “[s]ervice providers shall submit reports on efforts toward compliance with the [hearing aid compatibility requirements]”); see e.g., Lightyear Network Solutions, LLC, Order and Notice of Apparent Liability for Forfeiture, DA 10-2226 ¶ 6 (Enf. Bur., Spectrum Enf. Div. rel. Nov. 22, 2010). 21 See, e.g., Eure Family Limited Partnership, Memorandum Opinion and Order, 17 FCC Rcd 21861, 21863-64 (2002); MTD, Inc., Memorandum Opinion and Order, 6 FCC Rcd 34, 35 (1991); Wagenvoord Broadcasting Co., Memorandum Opinion and Order, 35 FCC 2d 361 (1972). Federal Communications Commission DA 10-2435 4 compatibility status report due on January 15, 2009 in apparent willful22 violation of the requirements set forth in section 20.19(i)(1) of the Rules.23 B. Proposed Forfeiture 6. Under section 503(b)(1)(B) of the Act, any person who is determined by the Commission to have willfully or repeatedly failed to comply with any provision of the Act or any rule, regulation, or order issued by the Commission shall be liable to the United States for a forfeiture penalty.24 To impose such a forfeiture penalty, the Commission must issue a notice of apparent liability and the person against whom such notice has been issued must have an opportunity to show, in writing, why no such forfeiture penalty should be imposed.25 The Commission will then issue a forfeiture if it finds by a preponderance of the evidence that the person has violated the Act or a Commission rule.26 Under this standard, we conclude that CT Communications is apparently liable for forfeiture for its failure to timely file the required hearing aid compatibility status report in apparent willful violation of section 20.19(i)(1) of the Rules.27 7. The Commission’s Forfeiture Policy Statement and section 1.80(b) of the Rules set a base forfeiture amount of $3,000 for the failure to file required forms or information.28 While the base forfeiture guidelines lend some predictability to the forfeiture process, the Commission retains the discretion to depart from these guidelines and issue forfeitures on a case-by-case basis, under its general forfeiture authority contained in section 503 of the Act.29 In exercising such discretion, we are required to take into account “the nature, circumstances, extent, and gravity of the violation and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require.”30 22 Section 312(f)(1) of the Act defines “willful” as “the conscious and deliberate commission or omission of [any] act, irrespective of any intent to violate” the law. 47 U.S.C. § 312(f)(1). The legislative history of section 312(f)(1) of the Act clarifies that this definition of willful applies to both sections 312 and 503(b) of the Act, H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the term in the section 503(b) context. See Southern California Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 ¶ 5 (1991), recon. denied, 7 FCC Rcd 3454 (1992) (“Southern California”); see also Telrite Corporation, Notice of Apparent Liability for Forfeiture, 23 FCC Rcd 7231, 7237 ¶ 12 (2008) (“Telrite”); Regent USA, Notice of Apparent Liability for Forfeiture, 22 FCC Rcd 10520, 10523 ¶ 9 (2007); San Jose Navigation, Inc., Forfeiture Order, 22 FCC Rcd 1040, 1042 ¶ 9 (2007), consent decree ordered, Order and Consent Decree, 25 FCC Rcd 1494 (2010). 23 47 C.F.R. § 20.19(i)(1). 24 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1). 25 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f). 26 See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589, 7591 ¶ 4 (2002). 27 47 C.F.R. § 20.19(i)(1). 28 The Commission’s Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines, Report and Order, 12 FCC Rcd 17087, 17114, recon. denied, 15 FCC Rcd 303 (1999) (“Forfeiture Policy Statement”); 47 C.F.R. § 1.80(b), Note to paragraph (b)(4): Section I. Base Amounts for Section 503 Forfeitures. 29 See Forfeiture Policy Statement, 12 FCC Rcd at 17099 ¶ 22, 17101 ¶ 29. See also 47 C.F.R. §1.80(b)(4) (“The Commission and its staff may use these guidelines in particular cases [and] retain the discretion to issue a higher or lower forfeiture than provided in the guidelines, to issue no forfeiture at all, or to apply alternative or additional sanctions as permitted by the statute.”) (emphasis added). 30 47 U.S.C. § 503(b)(2)(E). See also 47 C.F.R. § 1.80(b)(4), Note to paragraph (b)(4): Section II. Adjustment Criteria for Section 503 Forfeitures. Federal Communications Commission DA 10-2435 5 8. We have exercised our discretion to set a higher base forfeiture amount for violations of the wireless hearing aid compatibility reporting requirements. In the American Samoa Telecommunications Authority NAL, we found that status reports are essential to the implementation and enforcement of the hearing aid compatibility rules.31 The Commission relies on these reports to provide consumers with information regarding the technical specifications and commercial availability of hearing aid-compatible digital wireless handsets and to hold the digital wireless industry accountable to the increasing number of consumers with hearing loss.32 We noted that when setting an $8,000 base forfeiture for violations of the hearing aid-compatible handset labeling requirements, the Commission emphasized that individuals with hearing loss could only take advantage of critically important public safety benefits of digital wireless services if they had access to accurate information regarding hearing aid compatibility features of handsets.33 We also noted that the Commission has adjusted the base forfeiture upward when noncompliance with filing requirements interferes with the accurate administration and enforcement of Commission rules.34 Because the failure to file hearing aid compatibility status reports implicates similar public safety and enforcement concerns, we exercised our discretionary authority and established a base forfeiture amount of $6,000 for failure to file hearing aid compatibility reports.35 Consistent with ASTCA, we believe the established $6,000 base forfeiture for each hearing aid compatibility reporting violation should apply here. 9. Failure to file these reports, as is the case here, can have an adverse impact on the Commission’s ability to ensure the commercial availability of hearing aid-compatible digital wireless handsets, to the detriment of consumers. Furthermore, in ASTCA, we made clear that failure to file a hearing aid compatibility status report constitutes a continuing violation that continues until the violation is cured.36 CT Communications’s failure to file the 2009 report on time had an adverse impact on the Commission’s ability to monitor and ensure the commercial availability of hearing aid-compatible digital wireless handsets. We do not believe that the circumstances presented warrant any downward adjustment of the proposed forfeiture amount. It is well established that a violator’s lack of knowledge or erroneous beliefs are not a mitigating factor warranting a forfeiture reduction.37 Accordingly, we propose a 31 See American Samoa Telecommunications Authority, Notice of Apparent Liability for Forfeiture, 23 FCC Rcd 16432 (Enf. Bur., Spectrum Enf. Div. 2008), response pending (“ASTCA NAL”). 32 Id. at 16436-47 ¶ 10. 33 Id. 34 Id. 35 Id. 36 Id. at 16437 ¶ 11. See also Telrite, 23 FCC Rcd at 7244-45 ¶ 30 (determining that the failure to file Telecommunications Reporting Worksheets is a continuing violation); Compass Global, Inc., Notice of Apparent Liability for Forfeiture and Order, 23 FCC Rcd 6125, 6138 ¶ 29 (2008) (same); VCI Company, Notice of Apparent Liability for Forfeiture and Order, 22 FCC Rcd 15933, 15940 ¶ 20 (2007) (determining that the failure to file Lifeline and Linkup Worksheets is a continuing violation). 37 See, e.g., Profit Enterprises, Inc., Notice of Apparent Liability for Forfeiture, 8 FCC Rcd 2846, 2846 ¶ 5 (1993) (denying the mitigation claim of a manufacturer/distributor who thought that the equipment certification and marketing requirements were inapplicable, stating that its “prior knowledge or understanding of the law is unnecessary to a determination of whether a violation existed … ignorance of the law is [not] a mitigating factor”); Lakewood Broadcasting Service, Inc., Memorandum Opinion and Order, 37 FCC 2d 437, 438 ¶ 6 (1972) (denying a mitigation claim of a broadcast licensee who asserted an unfamiliarity with the station identification requirements, stating that licensees are expected “to know and conform their conduct to the requirements of our rules”); Kenneth Paul Harris, Sr., Notice of Apparent Liability for Forfeiture, 15 FCC Rcd 12933, 12935 ¶ 7 (Enf. Bur. 2000) (denying a mitigation claim of a broadcast licensee, stating that its ignorance of the law did not excuse the unauthorized transfer of the station); Maxwell Broadcasting Group, Inc., Memorandum Opinion and Order, 8 FCC Rcd 784, 784 ¶ 2 (Mass Med. Bur. 1993) (denying a mitigation claim of a noncommercial broadcast licensee, stating (continued …) Federal Communications Commission DA 10-2435 6 forfeiture of $6,000 against CT Communications for apparently willfully failing to timely file its January 15, 2009 hearing aid compatibility status report in violation of section 20.19(i)(1) of the Rules.38 10. Finally, it appears that CT Communications still has not filed its hearing aid compatibility status report for the six-month period ending December 31, 2008, which was due on January 15, 2009. This report is necessary to enable the Commission to monitor the commercial availability of hearing aid- compatible handsets and to assess CT Communications’s compliance with the hearing aid compatibility handset requirements during that period. We accordingly direct CT Communications to submit the report within thirty (30) days after the release of this NAL. IV. ORDERING CLAUSES 11. Accordingly, IT IS ORDERED that, pursuant to section 503(b) of the Act,39 and sections 0.111, 0.311, and 1.80 of the Rules,40 Champaign Telephone Company d/b/a CT Communications, Inc. is NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the amount of six thousand dollars ($6,000) for its failure to file the required hearing aid compatibility status report in apparent willful violation of the requirements set forth in section 20.19(i)(1) of the Rules. 12. IT IS FURTHER ORDERED that, pursuant to section 1.80 of the Rules, within thirty (30) days of the release date of this Notice of Apparent Liability for Forfeiture, Champaign Telephone Company d/b/a CT Communications, Inc. SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a written statement seeking reduction or cancellation of the proposed forfeiture. 13. Payment of the forfeiture must be made by check or similar instrument, payable to the order of the Federal Communications Commission. The payment must include the NAL/Account Number and FRN Number referenced above. Payment by check or money order may be mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000. Payment by overnight mail may be sent to U.S. Bank – Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101. Payment by wire transfer may be made to ABA Number 021030004, receiving bank TREAS/NYC, and account number 27000001. For payment by credit card, an FCC Form 159 (Remittance Advice) must be submitted. When completing the FCC Form 159, enter the NAL/Account number in block number 23A (call sign/other ID), and enter the letters “FORF” in block number 24A (payment type code). Requests for full payment under an installment plan should be sent to: Chief Financial Officer – Financial Operations, 445 12th Street, S.W., Room 1-A625, Washington, D.C. 20554. Please contact the Financial Operations Group Help Desk at 1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions regarding payment procedures. Champaign Telephone Company d/b/a CT Communications, Inc. also shall send electronic notification to Pamera Hairston at Pamera.Hairston@fcc.gov and to Nissa Laughner at Nissa.Laughner@fcc.gov on the date said payment is made. 14. The written statement seeking reduction or cancellation of the proposed forfeiture, if any, must include a detailed factual statement supported by appropriate documentation and affidavits pursuant to sections 1.80(f)(3) and 1.16 of the Rules. The written statement must be mailed to the Office of the Continued from previous page that the excuse of “inadverten[ce], due to inexperience and ignorance of the rules … are not reasons to mitigate a forfeiture” for violation of the advertisement restrictions). 38 47 C.F.R. § 20.19(i)(1). 39 47 U.S.C. § 503(b). 40 47 C.F.R. §§ 0.111, 0.311, 1.80. Federal Communications Commission DA 10-2435 7 Secretary, Federal Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554, ATTN: Enforcement Bureau – Spectrum Enforcement Division, and must include the NAL/Acct. No. referenced in the caption. The statement should also be e-mailed to Pamera Hairston at Pamera.Hairston@fcc.gov and to Nissa Laughner at Nissa.Laughner@fcc.gov. 15. The Commission will not consider reducing or canceling a forfeiture in response to a claim of inability to pay unless the petitioner submits: (1) federal tax returns for the most recent three- year period; (2) financial statements prepared according to generally accepted accounting practices; or (3) some other reliable and objective documentation that accurately reflects the petitioner’s current financial status. Any claim of inability to pay must specifically identify the basis for the claim by reference to the financial documentation submitted. 16. IT IS FURTHER ORDERED that, pursuant to sections 4(i) and 4(j) of the Act and section 20.19(i) of the Rules, Champaign Telephone Company d/b/a CT Communications, Inc. SHALL SUBMIT the report described in paragraph 10 within thirty (30) days of the release of this NAL. The report must be mailed to the Office of the Secretary, Federal Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554, ATTN: Enforcement Bureau – Spectrum Enforcement Division, and must include the NAL/Acct. No. referenced in the caption. A copy of the report must also be emailed to Pamera Hairston at Pamera.Hairston@fcc.gov, Nissa Laughner at Nissa.Laughner@fcc.gov, Winsel Black at Winsel.Black@fcc.gov, and James Swartz at James.Swartz@fcc.gov. 17. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for Forfeiture shall be sent by first class mail and certified mail return receipt requested to Michael Conrad, President and General Manager, Champaign Telephone Company d/b/a CT Communications, Inc., 126 Scioto Street, Urbana, Ohio 43078. FEDERAL COMMUNICATIONS COMMISSION Ricardo M. Durham Acting Chief Spectrum Enforcement Division Enforcement Bureau