Sometimes a communications provider (i.e., wireless, prepaid, wireline facilities-based or reseller, local exchange provider, or any other type of provider) fails to realize that it is not in compliance with applicable FCC rules, obligations, and policies until such violations rise to the surface. In such circumstances, the “damage has been done,” so to speak, and it may not be possible to avoid an FCC fine or penalty. How the matter is handled, however, often determines whether an FCC sanction or penalty a) can be avoided; b) is a forgiving one which permits the company to continue operating; or c) ultimately amounts to a devastating financial penalty, setting off a sequence of events that can jeopardize a company’s existence.
Fines and penalties levied by the FCC’s Enforcement Bureau for violations of the FCC’s rules, obligations, and policies can be crippling. A brief discussion of potential consequences is contained in a companion article entitled “Avoiding Trouble with the FCC.”
Violations of FCC rules, obligations and policies can be discovered by a communications provider in one of two ways. They can be discovered when the Enforcement Bureau contacts the company, often in the form of a letter of inquiry, or other official communication. They can also be discovered internally before the FCC itself is aware of the violation. While it is always preferable to internally discover violations before the Enforcement Bureau does, both circumstances call for careful, strategic handling.
FCC-Initiated Investigations
If a company becomes the subject of an Enforcement Bureau inquiry or investigation (or, worse yet, a notice of apparent liability), how it is handled is extremely important. Several basic principles can help guide a company in how it conducts itself. First, take the investigation seriously. Enforcement inquiries, investigations and/or actions are serious matters concerning potential violations of federal law, and should be given the highest priority. Often, indications of such investigations and/or actions can come in the form of concise or seemingly harmless correspondence or e-mails. Second, be truthful. Intentional misstatements or concealing information from the FCC can drastically increase penalties. Third, be sure to meet all deadlines set by the FCC or Enforcement Bureau staff. Failure to meet deadlines will only exacerbate the situation, as this often indicates to the FCC or Enforcement Bureau staff that the company does not feel compliance to be an important issue. Finally, and perhaps most importantly, initiate immediate remedial measures to cure instances of non-compliance. Time is generally of the essence here and, since retroactive submissions may be required, specialized communications counsel should be consulted.
