**Before the**

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | *  | File No. EB-08-SE-1070       |
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| Charter Communications, Inc.     | ** | NAL/Acct. No. 200932100013   |
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|                                  | *  | FRN 0017179383               |
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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 Charter Communications, Inc. ("Charter")
    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 Charter is apparently liable for a forfeiture in
    the amount of twenty-five thousand dollars (\$25,000). We also order
    Charter to respond fully to the LOI within ten (10) days of release
    of this *NAL.* If Charter again fails to submit a complete response,
    it will be subject to further enforcement action.

# background

2.  In response to consumer complaints against Charter, 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 Charter 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 Charter's
    charges for digital set-top boxes as well as information regarding
    Charter's subscriber rates and the rates it pays to video
    programmers.

3.  Charter failed to respond fully to many of the inquiries in the LOI,
    providing non-responsive or incomplete answers.[^4] For example,
    Charter's response to Question 1.g. (whether Charter implemented a
    rate reduction in connection with any analog-to-digital channel
    changes) simply states that "all rates have been set in accordance
    with applicable rate regulations\..." without addressing the
    specific question of whether any rate reductions were implemented to
    reflect the reduction in the number of channels accessible to
    analog-only subscribers.[^5] Charter's response to Question 1.j.
    (whether the cable system has been found subject to effective
    competition) provides an incomplete chart of state and local
    franchise areas where the Commission has found Charter was subject
    to effective competition, and fails to identify those cable systems
    where analog-to-digital channel changes took place as requested by
    the question. Charter also fails to respond to Question 2.c.
    (whether the company offered equipment discounts, and if so, the
    period such discount was offered and the price offered during that
    period), and simply provides sample templates and/or sample copies
    of notices/lists in response to Questions 3 and 4 in lieu of the
    requested information "due to the unusually short time frame in
    which to respond."[^6] In response to Questions 5, 6, and 7, which
    seek communications with consumers about any analog-to-digital
    channel migrations, Charter states that it was unable to compile the
    documents because of the "burdensome" nature of the request and the
    time frame to respond.[^7] Finally, Charter simply evades Question
    8.b. (the per-subscriber fees it pays to video programming
    distributors for those channels subject of the inquiry) by
    responding that there are no channels to which this question would
    apply because channels are not provided to its customers on a
    fee-per-channel basis. While Charter may not price specific channels
    on a per-subscriber basis, however, the question asks for the price
    it pays to video programming distributors on a per-subscriber fee
    basis.[^8] Charter's response is non-responsive and misleading to
    the extent it does pay such fees to video programming distributors.

# discussion

## Failure to Respond Fully to the LOI

4.  We find that Charter's failure to fully respond to the Bureau's
    inquiry constitutes an apparent willful[^9] violation of a
    Commission order and Section 76.939 of the Rules. The Bureau
    directed Charter 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 Charter violated Commission rules.
    Charter received the LOI but has failed to provide a full and
    complete response.

5.  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."[^10] 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."[^11]
    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."[^12] Pursuant to
    Section 76.939 of the Rules, a cable operator must comply with FCC
    requests for information, orders, and decisions.[^13] 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.[^14] Lastly, numerous FCC decisions have reaffirmed
    the Commission's authority to investigate potential misconduct and
    punish those that disregard FCC inquiries. [^15] The Commission
    delegated this authority to the Enforcement Bureau in Section
    0.111(a)(16) of the Rules.[^16]

6.  We reject Charter's argument that the LOI raises "serious procedural
    and due process concerns."[^17] Charter "associates itself" with a
    letter submitted by the National Cable & Telecommunications
    Association ("NCTA").[^18] According to that letter, the Commission
    has violated the Paperwork Reduction Act by sending similar
    inquiries to 10 or more persons without first seeking notice and
    comment and approval by the Office of Management and Budget. We
    disagree. The LOI complies with the Paperwork Reduction Act 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.[^19]

7.  Charter 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.[^20] Certain complaints
    received by the Commission regarding the migration of analog
    programming to a digital tier, however, allege that cable operators
    are 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. Charter does not dispute that this decision was within our
    discretion. Charter was obligated to provide the requested
    information by our deadline. Moreover, we note that since it
    submitted its LOI response and while this matters remains under
    investigation by the Bureau, Charter has neither contacted the
    Bureau about its response nor provided any supplemental information.
    We find therefore that Charter's failure to fully respond to the
    Bureau's inquiry constitutes an apparent willful[^21] violation of a
    Commission order and Section 76.939 of the Rules.

## Proposed Forfeiture

8.  We conclude under applicable standards set forth in the Act, that
    Charter 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.[^22] 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.[^23] 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.[^24] We conclude under this
    standard that Charter is apparently liable for forfeiture for its
    apparent willful violation of a Commission Order and Section 76.939
    of the Rules.

9.  Under Section 503(b)(2)(A) of the Act,[^25] 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."[^26]

10. Section 1.80 of the Rules and the Commission's *Forfeiture Policy
    Statement* establish a base forfeiture amount of four thousand
    dollars (\$4,000) for failure to respond to Commission
    communications.[^27] We find that Charter'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, Charter'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 further note
    that Charter 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.[^28]

11. Based on these facts, we therefore propose a twenty-five thousand
    dollar (\$25,000) forfeiture against Charter for failing to respond
    fully to Commission communications. This forfeiture amount is
    consistent with recent precedent in similar cases, where companies
    failed to provide complete responses to Bureau inquiries concerning
    compliance with the Commission's Rules despite evidence that the
    LOIs had been received.[^29]

12. We also direct Charter 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 Charter to further penalties,
    including potentially higher monetary forfeitures.[^30]

# ordering clauses

13. 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, Charter
    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.

14. **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, Charter **SHALL PAY**
    the full amount of the proposed forfeiture or **SHALL FILE** a
    written statement seeking reduction or cancellation of the proposed
    forfeiture.

15. **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, Charter 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.

16. 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. Charter will also send electronic
    notification on the date said payment is made to
    JoAnn.Lucanik@fcc.gov and Thomas.Fitz-Gibbon@fcc.gov.

17. 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 Thomas Fitz-Gibbon, Esq.,
    Spectrum Enforcement Division, FCC, at Thomas.Fitz-Gibbon@fcc.gov.

18. 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.

19. **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 Megan M. Delany, Vice
    President and Senior Counsel, Federal Government Relations, Charter
    Communications, Inc., 1919 Pennsylvania Avenue, N.W., Washington,
    D.C., 20006.

    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
    Megan M. Delany, Vice President and Senior Counsel, Charter
    Communications, Inc. (Oct. 30, 2008) ("LOI").

[^4]: Letter from Megan M. Delany, Vice President and Senior Counsel,
    Charter Communications, Inc. to Marlene H. Dortch, Secretary,
    Federal Communications Commission (Nov. 13, 2008) ("LOI Response").
    We note that Charter seeks confidential treatment of certain
    portions of its LOI response. *See* Letter from Megan M. Delany,
    Vice President and Senior Counsel, Charter Communications, Inc. to
    Marlene H. Dortch, Secretary, Federal Communications Commission
    (Nov. 13, 2008) ("Confidentiality Request"). We do not rule on
    Charter's request for confidentiality at this time.

[^5]: LOI Response at 4.

[^6]: *Id*. at 6, 7.

[^7]: *Id*. at 7, 8.

[^8]: *Id*. at 8.

[^9]: 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*").

[^10]: 47 U.S.C. § 154(i).

[^11]: 47 U.S.C. § 154(j).

[^12]: 47 U.S.C. § 403.

[^13]: 47 C.F.R. § 76.939 ("Cable operators shall comply with ... the
    Commission's requests for information, orders, and decisions.").

[^14]: *See* 47 C.F.R. § 1.17.

[^15]: *See, e.g.,* *SBC Communications, Inc.*, Forfeiture Order, 17 FCC
    Rcd 7589, 7599-7600 ¶¶ 23-28 (2002) (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 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).

[^16]: 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).

[^17]: LOI Response at 3.

[^18]: *Id.* at 3; Letter from Kyle McSlarrow, President and CEO,
    National Cable & Telecommunications Association, to Chairman Kevin
    J. Martin and Commissioners Michael J. Copps, Jonathan S. Adelstein,
    Deborah Taylor Tate, and Robert M. McDowell, Federal Communications
    Commission at 5-7 (Nov. 12, 2008).

[^19]: *See* 44 U.S.C. §3518(c)(1)(B)(ii); 5 C.F.R. §1320.4(a)(2) (cited
    in Letter from Matthew Berry, General Counsel, Federal
    Communications Commission, to Matthew A. Brill, Counsel for Time
    Warner Cable, Inc. at 1 (Nov. 12, 2008) ("Berry Letter")). 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....").

[^20]: LOI Response at 3, 6--8.

[^21]: 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*").

[^22]: 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1).

[^23]: 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).

[^24]: *See* *SBC Forfeiture Order*, 17 FCC Rcd at 7591.

[^25]: 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. Charter's
    apparent violations occurred after September 2, 2008 and are
    therefore subject to the higher forfeiture limits.

[^26]: 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.

[^27]: *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).

[^28]: Berry Letter at 2.

[^29]: *See supra* note 14.

[^30]: We do not decide in this *NAL* whether the failure to respond to
    an LOI constitutes a continuing violation.