**Before the**

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | *  | File No. EB-08-SE-1077       |
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| Suddenlink Communications, Inc.  | ** | NAL/Acct. No. 200932100014   |
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|                                  | *  | FRN 0018147504               |
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Notice OF apparent liability for forfeiture AND ORDER

**Adopted: January 19, 2009 Released: January 19, 2009**

By the Chief, Enforcement Bureau:

# introduction

1.  In this *Notice of Apparent Liability for Forfeiture and Order*
    ("*NAL*"), we find that Suddenlink Communications, Inc.
    ("Suddenlink") apparently willfully violated a Commission Order and
    Section 76.939 of the Commission's Rules ("Rules") in failing to
    respond fully to an Enforcement Bureau Letter of Inquiry.[^1] We
    conclude, pursuant to Section 503(b) of the Communications Act of
    1934, as amended ("Act"),[^2] that Suddenlink is apparently liable
    for a forfeiture in the amount of twenty-five thousand dollars
    (\$25,000). We also order Suddenlink to respond fully to the LOI
    within ten (10) days of release of this *NAL.* If Suddenlink again
    fails to submit a complete response, it will be subject to further
    enforcement action.

# background

2.  In response to consumer complaints against Suddenlink, on October
    30, 2008, the Enforcement Bureau ("Bureau") issued a Letter of
    Inquiry ("LOI") regarding the company's migration of analog
    programming to digital tiers.[^3] The LOI sought information
    concerning instances in which Suddenlink had migrated analog
    channels to a digital tier, including the channels affected, whether
    and how the company notified customers of the change, whether, in
    light of the change in service, the company permitted customers to
    change their service tier without charge, and the rates charged
    customers before and after the channel migration. The LOI also asked
    about Suddenlink's charges for digital set-top boxes as well as
    information regarding Suddenlink's subscriber rates and the rates it
    pays to video programmers.

3.  In its response to the LOI, Suddenlink fails to answer most of the
    inquiries set forth in the LOI except in the most general terms.[^4]
    For example, Suddenlink provides a table containing information
    responsive to our inquiry in Question 1 regarding the dates and
    nature of its analog-to-digital channel changes; however, it claims
    that it lacked the ability to respond directly to questions
    regarding related changes in rates to consumers, because it
    evaluates service rate changes on an annual basis.[^5] Similarly,
    Suddenlink represents that it has a policy to provide thirty (30)
    days written notice to subscribers before a channel is removed from
    a service tier, and that this policy was followed for each of the
    re-tierings at issue, but did not respond to the related inquiry in
    Question 1 regarding the ability of subscribers to change their
    service at no charge. In response to Question 2, Suddenlink
    acknowledges that subscribers might require additional equipment as
    a result of channel changes, but does not respond to the remainder
    of the inquiries included in this question, including the model
    numbers of equipment that subscribers could use to continue to
    access newly-digitized channels, and whether equipment of a
    different manufacture could also be used by subscribers. In
    addition, Suddenlink fails to provide copies of any notices or other
    documents that were sent to subscribers to inform them of
    analog-to-digital changes (Questions 3 and 5) or copies of any
    explanation that Suddenlink sent to Local Franchising Authorities
    (Question 4) regarding such changes.[^6] Suddenlink also declines to
    provide any information in response to Question 8, which seeks
    information regarding fees for each affected channel collected from
    subscribers, and the per-subscriber fee related to each affected
    channel paid by Suddenlink to the video programming distributor
    responsible for that channel.

4.  Suddenlink admits that it did not respond fully to the LOI. Although
    Suddenlink states that it "has no desire to violate Commission
    regulations," it claims that the two week time period allowed in
    which to respond to these questions was inadequate.[^7] Suddenlink
    also contends that the LOI is unenforceable because it does not
    comply with the Paperwork Reduction Act ("PRA").[^8] Suddenlink asks
    the Commission to "reconsider the current LOI procedure and ...
    engage in a cooperative dialog with the cable industry regarding the
    conversion practices now at issue."[^9] Finally, Suddenlink requests
    copies of any complaints that have been submitted to the Commission,
    "to understand the basis for the LOI, facilitate our response, and
    enable us to more meaningfully address potential Bureau
    concerns."[^10]

# discussion

## Failure to Respond Fully to the LOI

5.  We find that Suddenlink's failure to fully respond to the Bureau's
    inquiry constitutes an apparent willful[^11] violation of a
    Commission Order and Section 76.939 of the Rules. The Bureau
    directed Suddenlink to provide certain information related to the
    movement of analog channels to digital tiers. This information was
    necessary to enable the Commission to perform its enforcement
    function and evaluate whether Suddenlink violated Commission rules.
    Suddenlink received the LOI but has failed to provide a full and
    complete response.

6.  The Commission has broad investigatory authority under Sections
    4(i), 4(j), and 403 of the Act, its Rules, and relevant precedent.
    Section 4(i) authorizes the Commission to "issue such orders, not
    inconsistent with this Act, as may be necessary in the execution of
    its functions."[^12] Section 4(j) states that "the Commission may
    conduct its proceedings in such manner as will best conduce to the
    proper dispatch of business and to the ends of justice."[^13]
    Section 403 grants the Commission "full authority and power to
    institute an inquiry, on its own motion \... relating to the
    enforcement of any of the provisions of this Act."[^14] Pursuant to
    Section 76.939 of the Rules, a cable operator must comply with FCC
    requests for information, orders, and decisions.[^15] In carrying
    out this obligation, a cable operator also must provide truthful and
    accurate statements to the Commission or its staff in any
    investigatory or adjudicatory matter within the Commission's
    jurisdiction.[^16] Lastly, numerous FCC decisions have reaffirmed
    the Commission's authority to investigate potential misconduct and
    punish those that disregard FCC inquiries. [^17] The Commission
    delegated this authority to the Enforcement Bureau in Section
    0.111(a)(16) of the Rules.[^18]

7.  We reject Suddenlink's contentions that it was not obligated to
    respond fully and completely to the Bureau's inquiry because it
    believes the LOI violates the PRA and is therefore
    unenforceable.[^19] According to Suddenlink and a letter submitted
    by NCTA, the Commission has violated the PRA by sending similar
    inquiries to 10 or more persons without first seeking notice and
    comment and approval by the Office of Management and Budget.[^20] We
    disagree. The LOI complies with the PRA because it is part of a
    targeted investigation of "specific individuals or entities," namely
    those companies that have been the subject of consumer complaints
    filed with the Commission.[^21]

8.  Suddenlink alleges that it could not have responded fully to the LOI
    because the amount of time allowed for the preparation of the
    company's LOI response was too brief.[^22] Certain complaints
    received by the Commission regarding the migration of analog
    programming to a digital tier, however, alleged that cable operators
    were falsely linking the programming changes with the digital
    television transition. Because of the strong public interest in
    avoiding confusion about the transition and the rapidly approaching
    transition date, the Bureau determined that two weeks was an
    appropriate deadline and we conclude that two weeks was a reasonable
    deadline. Suddenlink does not dispute that this decision was within
    our discretion. Thus, Suddenlink was obligated to provide the
    requested information by our deadline. Moreover, we note that since
    it submitted its LOI response and while this matter remains under
    investigation by the Bureau, Suddenlink has neither contacted the
    Bureau about its response nor provided any supplemental information.
    We find therefore that Suddenlink's failure to fully respond to the
    Bureau's inquiry constitutes an apparent willful[^23] violation of a
    Commission Order and Section 76.939 of the Rules.

## Proposed Forfeiture

9.  We conclude under applicable standards set forth in the Act, that
    Suddenlink is apparently liable for forfeiture for its apparent
    willful violation of a Commission Order and Section 76.939 of the
    Rules. 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] We conclude under this
    standard that Suddenlink is apparently liable for forfeiture for its
    apparent willful violation of a Commission Order and Section 76.939
    of the Rules.

10. Under Section 503(b)(2)(A) of the Act,[^27] we may assess a cable
    operator a forfeiture of up to \$37,500 for each violation, or for
    each day of a continuing violation up to a maximum of \$375,000 for
    a single act or failure to act. In exercising such authority, 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."[^28]

11. Section 1.80 of the Rules and the Commission's *Forfeiture Policy
    Statement* establish a base forfeiture amount of \$4,000 for failure
    to respond to Commission communications.[^29] We find that
    Suddenlink's failure to respond fully to the LOI in the
    circumstances presented here warrants a significant increase to this
    base amount. Misconduct of this type exhibits contempt for the
    Commission's authority and threatens to compromise the Commission's
    ability to adequately investigate violations of its rules. Prompt
    and full responses to Bureau inquiry letters are essential to the
    Commission's enforcement function. In this case, Suddenlink's
    apparent violations have delayed our investigation and inhibited our
    ability to examine allegations raised in consumer complaints and
    also potentially touching on an area of critical importance \-- the
    DTV transition. We note that Suddenlink failed to provide a full and
    complete LOI response even after receiving a specific warning from
    the Commission's General Counsel that such actions could be subject
    to enforcement penalties.[^30]

12. Based on these facts, we therefore propose a twenty-five thousand
    dollar (\$25,000) forfeiture against Suddenlink for failing to
    respond fully to Commission communications. This forfeiture amount
    is consistent with precedent in similar cases, where companies
    failed to provide responses to Bureau inquiries concerning
    compliance with the Commission's Rules despite evidence that the
    LOIs had been received.[^31]

13. We also direct Suddenlink to respond fully to the October 30, 2008
    LOI within ten (10) days of the release of this Notice of Apparent
    Liability for Forfeiture and Order. Failure to do so may constitute
    an additional violation subjecting Suddenlink to further penalties,
    including potentially higher monetary forfeitures.[^32]

# ordering clauses

14. Accordingly, **IT IS ORDERED** that, pursuant to Section 503(b) of
    the Act, and Section 1.80 of the Rules, and the authority delegated
    by Sections 0.111 and 0.311 of the Commissions Rules, Suddenlink
    Communications, Inc. is **NOTIFIED** of its **APPARENT LIABILITY FOR
    A FORFEITURE** in the amount of twenty-five thousand dollars
    (\$25,000) for its willful violation of a Commission Order and
    Section 76.939 of the Rules.

15. **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 and Order, Suddenlink **SHALL
    PAY** the full amount of the proposed forfeiture or **SHALL FILE** a
    written statement seeking reduction or cancellation of the proposed
    forfeiture.

16. **IT IS FURTHER ORDERED** that, pursuant to sections 1, 4(i), 4(j),
    403 of the Communications Act of 1934, as amended, 47 U.S.C. §151,
    154(i), 154(j), 403, Suddenlink shall fully respond to the October
    30, 2008 Letter of Inquiry sent by the Enforcement Bureau in the
    manner described by that Letter of Inquiry within ten (10) days of
    the release of this Notice of Apparent Liability and Order.

17. 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. Suddenlink will also send electronic
    notification on the date said payment is made to JoAnn Lucanik at
    JoAnn.Lucanik@fcc.gov and to Deborah Broderson at
    Deborah.Broderson@fcc.gov.

18. The response, if any, 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. The response should also be e-mailed to JoAnn
    Lucanik, Deputy Chief, Spectrum Enforcement Division, Enforcement
    Bureau, FCC, at JoAnn.Lucanik@fcc.gov and to Deborah Broderson,
    Esq., Spectrum Enforcement Division, FCC, at
    Deborah.Broderson@fcc.gov.

19. 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.

20. **IT IS FURTHER ORDERED** that a copy of this Notice of Apparent
    Liability for Forfeiture and Order shall be sent by first class mail
    and certified mail return receipt requested to Michael J. Zarrilli,
    Vice President, Government Relations and Senior Counsel, Suddenlink
    Communications, Inc., 12444 Powerscourt Drive, Suite 140, St. Louis,
    MO 63131.

    FEDERAL COMMUNICATIONS COMMISSION

Kris Anne Monteith

Chief, Enforcement Bureau

[^1]: 47 C.F.R. § 76.939.

[^2]: 47 U.S.C. § 503(b).

[^3]: Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement
    Division, Enforcement Bureau, Federal Communications Commission to
    Michael J. Zarrilli, Vice President, Government Relations and Senior
    Counsel, Suddenlink Communications, Inc. (Oct. 30, 2008) ("LOI").

[^4]: Letter from Michael J. Zarrilli, Vice President, Government
    Relations and Senior Counsel, Suddenlink Communications, Inc. to
    Deborah Broderson, Esq., Spectrum Enforcement Division, Enforcement
    Bureau, Federal Communications Commission (Nov. 13, 2008) ("LOI
    Response").

[^5]: *Id.* at 3.

[^6]: Suddenlink does affirmatively state that "\[n\]one of the service
    tiers involved in Suddenlink's analog to digital conversions are
    rate regulated," and "relatively few of Suddenlink's cable systems
    are subject to active rate regulation by local franchising
    authorities." *Id*.

[^7]: *Id.* at 2.

[^8]: *Id*.

[^9]: *Id*., citing to Letter from Kyle McSlarrow, National Cable &
    Telecommunications Assn., to Chairman Kevin J. Martin and
    Commissioners Michael J. Copps, Jonathan S. Adelstein, Deborah
    Taylor Tate and Robert M. McDowell (Nov. 12, 2008) ("NCTA Letter").

[^10]: *Id.*

[^11]: 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 indicates 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, e.g., Southern California Broadcasting Co.*,
    Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387-88 ¶ 5 (1991)
    ("*Southern California Broadcasting*").

[^12]: 47 U.S.C. § 154(i).

[^13]: 47 U.S.C. § 154(j).

[^14]: 47 U.S.C. § 403.

[^15]: 47 C.F.R. § 76.939 ("Cable operators shall comply with ... the
    Commission's requests for information, orders, and decisions.").

[^16]: *See* 47 C.F.R. § 1.17.

[^17]: *See, e.g.,* *SBC Communications, Inc.*, Forfeiture Order, 17 FCC
    Rcd 7589, 7599-7600 ¶¶ 23-28 (ordering \$100,000 forfeiture for
    egregious and intentional failure to certify the response to a
    Bureau inquiry) ("*SBC Forfeiture Order*"); *Digital Antenna, Inc.,*
    Notice of Apparent Liability for Forfeiture and Order, 23 FCC Rcd
    7600, 7602 (Spectr. Enf. Div., Enf. Bur. 2008) (proposing \$11,000
    forfeiture for failure to respond to provide a complete response to
    an LOI); *BigZoo.Com Corporation*, Forfeiture Order, 20 FCC Rcd 3954
    (Enf. Bur. 2005) (ordering \$20,000 forfeiture for failure to
    respond to an LOI).

[^18]: 47 C.F.R. §0.111(a)(16) (granting the Enforcement Bureau
    authority to "\[i\]dentify and analyze complaint information,
    conduct investigations, conduct external audits and collect
    information, including pursuant to sections 218, 220, 308(b), 403
    and 409(e) through (k) of the Communications Act, in connection with
    complaints, on its own initiative or upon request of another Bureau
    or Office."). *See also* 47 C.F.R. §§0.111(a)(13) (Enforcement
    Bureau has authority to "\[r\]esolve complaints regarding
    multichannel video and cable television service under part 76 of the
    Commission's rules"); 0.311 (general delegated authority for
    Enforcement Bureau).

[^19]: LOI Response at 2. Prior to the due date for Suddenlink's LOI
    Response, the Commission's General Counsel advised the company that
    the LOI complied with the Paperwork Reduction Act, warned of
    enforcement action if the company failed to comply with the LOI, and
    offered Suddenlink the opportunity to submit any highly confidential
    information pursuant to a protective order. *See* Letter from
    Matthew Berry, General Counsel, Federal Communications Commission,
    to Michael J. Zarrilli, Vice President, Government Relations and
    Senior Counsel, Suddenlink Communications, Inc. (Nov. 12, 2008)
    ("Berry Letter").

[^20]: *Id.*; NCTA Letter at 5-7.

[^21]: *See* 44 U.S.C. §3518(c)(1)(B)(ii); 5 C.F.R. §1320(a)(2) (cited
    in Berry Letter at 1). We do not intend to suggest that the
    Commission may only commence an investigation in response to
    consumer complaints. As Section 403 of the Act makes clear, the
    Commission also may institute an investigation on its own motion.
    *See* 47 U.S.C. § 403 ("The Commission shall have full authority and
    power at any time to institute an inquiry, on its own motion, in any
    case and as to any matter or thing concerning which complaint is
    authorized to be made...").

[^22]: LOI Response at 2.

[^23]: 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 indicates 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, e.g., Southern California Broadcasting Co.*,
    Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387-88 ¶ 5 (1991)
    ("*Southern California Broadcasting*").

[^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 Forfeiture Order*, 17 FCC Rcd at 7591.

[^27]: 47 U.S.C. § 503(b)(2)(A). The Commission has amended Section
    1.80(b)(3) of the Rules, 47 C.F.R. § 1.80(b)(3), three times to
    increase the maximum forfeiture amounts, in accordance with the
    inflation adjustment requirements contained in the Debt Collection
    Improvement Act of 1996, 28 U.S.C. § 2461. *See Amendment of Section
    1.80 of the Commission's Rules and Adjustment of Forfeiture Maxima
    to Reflect Inflation*, 23 FCC Rcd 9845 (2008) (adjusting the maximum
    statutory amounts for broadcasters and cable operators from
    \$32,500/\$325,000 to \$37,500/\$375,000); *Amendment of Section
    1.80 of the Commission's Rules and Adjustment of Forfeiture Maxima
    to Reflect Inflation,* Order, 19 FCC Rcd 10945 (2004) (adjusting the
    maximum statutory amounts for broadcasters and cable operators from
    \$27,500/\$300,000 to \$32,500/\$325,000); *Amendment of Section
    1.80 of the Commission's Rules and Adjustment of Forfeiture Maxima
    to Reflect Inflation,* Order, 15 FCC Rcd 18221 (2000) (adjusting the
    maximum statutory amounts for broadcasters and cable operators from
    \$25,000/\$250,000 to \$27,500/\$300,000). The most recent inflation
    adjustment took effect September 2, 2008 and applies to violations
    that occur after that date. *See* 73 Fed. Reg. 44663-5. Suddenlink's
    apparent violations occurred after September 2, 2008 and are
    therefore subject to the higher forfeiture limits.

[^28]: 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.

[^29]: *See* 47 C.F.R. § 1.80(b)(4); *The Commission's Forfeiture Policy
    Statement and Amendment of Section 1.80 of the Rules to Incorporate
    the Forfeiture Guideline*s*,* Report and Order, 12 FCC Rcd. 17087
    (1997), *recon. denied,* 15 FCC Rcd. 303 (1999).

[^30]: Berry Letter at 2.

[^31]: *See supra* note 17.

[^32]: We do not decide in this *NAL* whether the failure to respond to
    an LOI constitutes a continuing violation.