How does a communications provider (wireless, prepaid, wireline facilities-based or reseller, local exchange provider, or any other type of provider) avoid trouble with the FCC, namely the FCC’s Enforcement Bureau?
The key, of course, to avoiding potentially damaging FCC investigations and enforcement actions is, from the outset, to ensure total compliance with all applicable FCC rules, obligations and policies. However, this is often easier said than done.
Failure to comply with FCC rules, policies, and obligations can lead to financially crippling enforcement actions. In the past five years alone, the Enforcement Bureau has found service providers liable (through the issuance of notices of apparent liability) for nearly $20 million in aggregate fines for various Universal Service-related violations (e.g., failure to register as a provider with the Commission, failure to timely file FCC Forms 499-A, failure to make USF payments, etc.).
For example, in 2008, the FCC penalized Global Crossing North America Inc. in the amount of $10.5 million for repeatedly failing to make timely and/or complete payments of owed Universal Service Fund and Telecommunications Relay Service assessments. The FCC has also recently assessed a $100,000 penalty against a provider which commenced operations without a required Section 214 authorization, and levied $20,000 penalties against more than 600 providers which failed to submit compliant Customer Proprietary Network Information (CPNI) certifications. Each year the agency assesses hundreds of millions of dollars in penalties for a wide range of rule and policy violations.
Financial penalties or monetary forfeitures, however, are not the only concern. Other devastating consequences can include public censure, loss of suppliers and/or customers, restrictions imposed on controlling shareholders and/or officers, and even bankruptcy. Being penalized or sanctioned by the FCC’s Enforcement Bureau typically is a matter of public record, and will weigh against a company in setting possible future penalties in subsequent enforcement proceedings. Moreover, state public utilities commissions and other regulatory agencies work closely with the FCC and will sometimes begin their own enforcement investigations in response to FCC investigations or sanctions.
Know the Law
The first step in complying with FCC requirements is knowing and understanding them. The communications sector is one of the most heavily regulated industry sectors in the U.S., often characterized by arcane filing and fee assessment obligations; regulations stemming from both the Communications Act of 1934 and the Telecommunications Act of 1996; and case law precedent and policies not readily apparent and not necessarily reflected in FCC regulations (i.e., the Code of Federal Regulations). Consulting with a specialized communications attorney may be useful to determine which FCC rules, obligations, policies, assessments and/or filings are applicable to your company. In more complex circumstances, it will be necessary to do this.
