**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | File No. EB-01-TS-040        |
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| ACR Electronics, Inc.            | ) | NAL/Acct. No. 200532100004   |
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| Fort Lauderdale, Florida         | * | FRN No. 0008044232           |
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**NOTICE OF APPARENT LIABILITY FOR FORFEITURE**

**Adopted:** October 27, 2004 **Released:** November 1, 2004

By the Commission:

# introduction

1.  In this *Notice of Apparent Liability for Forfeiture* ("*NAL*"), we
    find ACR Electronics, Inc. ("ACR") apparently liable for a
    forfeiture in the amount of seventy five thousand dollars (\$75,000)
    for marketing unauthorized equipment in willful and repeated
    violation of Section 302(b) of the Communications Act of 1934 as
    amended ("Act"),[^1] and Section 2.803(a) of the Commission's Rules
    ("Rules").[^2]

#  background

2.  In February 2004, the Enforcement Bureau ("Bureau") received a
    complaint alleging that ACR was marketing through outdoor and
    sporting publications and websites a new personal location beacon
    ("PLB"), 406 GPS PLB-200 ("PLB-200"), under the names "TerraFix" for
    land use, "AquaFix" for marine use, and "AeroFix" for aviation use,
    which had not been authorized by the Commission. In support, the
    complainant provided evidence that the PLB-200 was explicitly being
    described as "FCC approved," and marketed to consumers.
    Specifically, the complainant submitted a TerraFix brochure, which
    stated that the PLB-200 was "APPROVED for sale in the U.S," and
    further provided evidence that at least one retailer was accepting
    orders for the PLB-200. In the latter regard, the complainant
    submitted an e-mail order confirmation, dated February 25, 2004,
    from Boat U.S. for the purchase of one "AquaFix 406 GPS I/O Plb,"
    "Item 5321153," priced at "\$749.99."[^3]

3.  In response to the complaint, the Bureau issued a letter of inquiry
    ("LOI") to ACR on March 29, 2004.[^4] ACR filed a response to the
    LOI on April 28, 2004,[^5] and supplemented its response on May 4,
    2004.[^6]

4.  In its response, ACR described the PLB-200 TerraFix, AquaFix, and
    AeroFix as "essentially the same" model marketed to different
    outdoor segments that is the "next generation" of PLB and is based
    on the technological design of its current certified PLB-100 model
    with "the single important difference that the PLB-200 has a
    built-in global positioning technology (GPS) incorporated into each
    unit."[^7] ACR did not dispute that the PLB-200 model has not been
    certified under the Commission's equipment authorization procedures,
    but maintained that the units "have never been activated and exist
    only as photographic or mock-up prototypes intended to educate ACR
    representatives and customers (equipment retailers) of products that
    are under development and for which authorization will be sought in
    the future."[^8] In this connection, ACR explained that it does not
    sell its products, including PLBs, directly to end users, but rather
    sells "through distribution to retailers," who are "approved by the
    ACR sales representative for the particular territory" and "are
    professional buyers, and unlike many end users, familiar with the
    process of launching a new telecommunications product and fully
    cognizant that FCC approval is required of many products."[^9] ACR
    claimed that its "PLB-200 was not promoted to the general public,
    but rather to industry-specific representatives and retailers who
    clearly aware that the equipment was not for sale."[^10]

5.  As detailed below, ACR acknowledged, and provided documentation to
    show, that it displayed PLB-200 mock-ups at trade shows, made
    industry presentations, and provided related brochures, price lists
    and other information to the press and to retailers, and that such
    displays, presentations and distributed materials were not
    accompanied by the requisite disclaimer notice set forth in Section
    2.803(c).[^11] And, contrary to ACR's representations, its
    documentation showed that it, in fact, promoted the PLB-200 to the
    general public by advertising in outdoor and sporting publications,
    and that such advertisements also were not accompanied by the
    requisite Section 2.803(c) disclaimer notice, indicating that the
    device has not been approved by the Commission and that it may not
    be offered for sale or lease, or sold or leased, until such approval
    is obtained.

## Industry marketing.

### Distributed promotional materials. 

6.  With respect to its distributed promotional materials, ACR submitted
    a TerraFix "press kit" or "packet," which consisted of a folder
    containing two inserted brochures ("brochures") and two press
    releases.[^12] ACR acknowledged that 25 complete press kits and
    approximately 700 brochures[^13] were distributed to the media and
    to retailers at the Shooting Hunting Outdoor Trade Show ("SHOT") in
    Las Vegas, Nevada.[^14] ACR further acknowledged that that an
    unspecified number of the press kits[^15] were mailed to the media
    prior to, and distributed to media and retailers at, the Outdoor
    Retailer Winter Market Show ("OR") in Salt Lake City, Utah.[^16] On
    the front cover of the TerraFix folder, it captioned ACR's logo,
    depicted the TerraFix model, and stated in bold print "Personal
    Locator Beacons, New and Improved, For Sale in the U.S.;" in
    contrast, on the bottom of back cover of the folder, in small print,
    it stated "New Integral GPS PLB Available April \-- pending FCC
    approval."[^17]

7.  One of the brochures included in the press kit was an outdoor
    product brochure that included, among descriptions of its line of
    outdoor products, the TerraFix PLB-200. The outdoor brochure
    described the TerraFix PLB-200 as "the next generation PLB," because
    it uses "GEOSAR satellites that are in geostationary high-earth
    orbit and can instantly relay emergency transmissions" in a "matter
    of seconds."[^18] This brochure did not include any disclaimer; to
    the contrary, on the "PLB Specifications" page of the brochure,
    under "Certification," it stated that the PLB-200 was "FCC
    approved."[^19] The second brochure included in the TerraFix press
    kit, which featured the TerraFix PLB-200 exclusively, stated
    prominently on the front cover "Personal Locator Beacon APPROVED for
    sale in the U.S." Like the outdoor product brochure, this brochure
    did not include any notice that the PLB-200 had not been approved by
    the Commission. The TerraFix press releases, captioned "ACR
    Introduces Next Generation of Personal Locator Beacons," included in
    the press kit, stated that ACR is unveiling the TerraFix 406, which
    utilizes GPS components and is "targeted to provide outdoor
    enthusiasts with the smallest and most functional PLB available in
    the world \... (pending FCC approval)," enabling such enthusiasts
    "to broadcast critical GPS coordinates, providing Search and Rescue
    crews with exact latitude and longitude thereby increasing emergency
    response speed by pinpointing positioning within 100 yards."[^20]

8.  ACR also submitted a copy of an AquaFix brochure.[^21] The front
    cover of the front jacket of the AquaFix brochure stated prominently
    "Personal EPIRB APPROVED for sale in the U.S." ACR claimed that the
    AquaFix brochure "had only the most minimal exposure,"[^22] but did
    not specify how many and to whom the brochures were issued.[^23]

9.  In addition, ACR submitted an "Internal Use ONLY \-- Not for
    Distribution" 2004 price list (printed January 7, 2004),[^24] and a
    distributed "Outdoor Dealer Price List and Order Form, Effective
    through 31 December 2004" price list (printed January 26,
    2004).[^25] The internal price list set the TerraFix's net price at
    \$515.00 and stated "FCC Approval \[is\] Pending April 1, 2004." In
    contrast, the distributed price list set the price for and
    identified the TerraFix as "FCC PLB-200" and contained no disclaimer
    whatsoever regarding FCC approval.[^26] ACR indicated that 200 price
    lists were prepared for distribution, but claimed that a
    "significantly less," unspecified number of lists were actually
    distributed at the SHOT and OR trade shows.

### Trade show and other presentations.

10. With respect to presentations, ACR acknowledged that it displayed a
    TerraFix mock-up, and distributed related TerraFix press kits, price
    lists and press releases prior to, and at, the SHOT and OR trade
    shows. ACR further acknowledged that the requisite Section 2.803(c)
    trade show disclaimer was not displayed in its booth, or as
    previously stated, in its distributed promotional materials.
    According to ACR, the display of a "mock-up dummy . . . with a
    plastic shell" and the distribution of informational materials did
    not manifest an intent or attempt to sell TerraFix PLB-200
    units.[^27]

11. ACR also acknowledged that it made PowerPoint presentations to
    select accounts, such as Yamaha on October 2, 2003, Dick's Sporting
    Goods on April 6, 2004, and Parts Unlimited on April 13, 2004.[^28]
    The representative PowerPoint material[^29] featured the "'NEW' PLB
    models early 2004," explained and contrasted the "state of the art"
    and more precise GPS technology incorporated in the 2004 PLB-200
    models with the Doppler Shift technology incorporated in the
    preceding PLB-100 models, and finally, under the caption
    "Regulations, Federal Communications Commission" indicated that PLBs
    must pass a variety of tests.[^30] According to ACR, a "Not for Sale
    Pending FCC approval" sticker was placed on some, but not all, of
    the presented material;[^31] however, the PowerPoint material
    submitted with its LOI response did not include any such stickers.

## Public marketing. 

12. Finally, although ACR represented "that the PLB-200 units were never
    directed at the general public,"[^32] its documentation establishes
    otherwise. Specifically, ACR's documentation establishes that it, in
    fact, launched a substantial media campaign by advertising the
    PLB-200 in multiple outdoor and sporting magazines and catalogues
    that were clearly directed at and targeted to the consuming general
    public.[^33] According to ACR's media schedule,[^34] it advertised
    the PLB-200 in:

-   Outside Magazine's 2004 April Buying Guide (circulation: 650,000);

-   Backpacker Magazine's 2004 March Buyer's Guide, April and Summer
    issues and Camper Magazine (circulation: 295,000);

-   Alaska Magazine's 2004 May issue (circulation: 185,000);

-   Rock 'N Ice Magazine's 2004 June issue (circulation: 34,000);

-   Safari Club Magazine's 2004 May/June issue (circulation: 39,500);

-   Safari Times' 2004 June issue (circulation: 39,500);

-   Rocky Mountain Sports Magazine's 2004 April and May issues
    (circulation: 60,000);

-   Paddler Magazine's 2004 May/June issue (circulation: 59,000);

-   Kayak Magazine's 2004 Spring issue (circulation: 59,000);

-   Couloir Magazine's 2004 Winter issue (circulation: 41,000);

-   Backcountry Magazine's 2004 January and February issues
    (circulation: 14,000);

-   Adventure Sports Magazine's 2004 April and May issues (circulation:
    25,000); and

-   Outdoor Retailer/Outdoor Business' 2004 Winter and Summer Market
    guides (circulation: n/a).[^35]

    In this connection, ACR submitted a representative full-page ad that
    appeared in one of the publications, which described the
    "***[NEW]{.underline}*** TerraFix 406 Personal Locator Beacon, the
    best way to be found fast," depicted the model in terms of actual
    size, and stated at the bottom of the page in black border "New
    Integral GPS PLB Available April \-- Pending FCC Approval."[^36]

#  Discussion 

13. Section 302(b) of the Act provides that "\[n\]o person shall
    manufacture, import, sell, offer for sale, or ship devices of home
    electronic equipment and systems, or use devices, which fail to
    comply with regulations promulgated pursuant to this section."
    Section 2.803(a)(2) of the Commission's implementing regulations
    provides that:

    Except as provided elsewhere in this section, no person shall sell
    or lease, or offer for sale or lease (including *advertising* for
    sale or lease), or import, ship, or distribute for the purpose of
    selling or leasing or offering for sale or lease, any radio
    frequency device unless ... \[i\]n the case of a device subject to
    certification, such device has been authorized by the Commission in
    accordance with the rules in this chapter and is properly identified
    and labeled as required by § 2.925 and other relevant sections in
    this chapter \[emphasis added\].

It is undisputed that the PLB-200 model is an intentional radiating
device,[^37] and as discussed below, is subject to the Commission's
certification procedures and related marketing restrictions.

14. Under Section 15.201(b) of the Rules,[^38] manufacturers are
    required to submit documentation test results to, and be
    "certificated" by, the Commission "prior to marketing" intentional
    radiating devices.[^39] However, in limited circumstances,
    manufacturers are allowed to market devices prior to certification.
    Specifically, Section 2.803(c) of the Rules allows manufacturers to
    advertise or display:

    \[A\]t a trade show or exhibition, prior to equipment authorization
    ... *provided* that the advertising contains, and the display is
    accompanied by, a conspicuous \[disclaimer\] notice worded as
    follows: This device has not been authorized as required by the
    rules of the Federal Communications Commission. This device is not,
    and may not be, offered for sale or lease, or sold or leased, until
    authorization is obtained.

In 1976, the Commission expanded the "trade show" exception of Section
2.803(c) and allowed manufacturers to advertise devices to the general
public, prior to certification, provided such advertisements include the
above disclaimer.[^40] Thus, ACR was allowed to display and distribute
promotional materials about the PLB-200 at the OR, SHOT trade shows and
like industry forums, and advertise the PLB-200 in sporting and outdoor
publications and related websites, prior to certification, *provided*
that its display, promotional materials and advertisements conspicuously
displayed the requisite disclaimer notice.

## Industry marketing.

15. ACR conceded, and its documentation demonstrated, that the specific
    disclaimer notice required by Section 2.803(c) was not displayed in
    *any* of the promotional materials distributed to the media and the
    retailers. Significantly, the two TerraFix brochures, which were
    included in the TerraFix press kit and also widely distributed
    separately at the two trade shows, not only failed to include the
    requisite disclaimer notice, they also falsely represented that the
    device was approved by the Commission. In this regard, one of the
    brochures prominently stated on the front cover that the device was
    "APPROVED for sale in the U.S," while the other brochure stated on
    the "PLB Specifications" page that the device was "FCC approved."
    Similarly, the AquaFix brochure prominently stated on the front
    cover that the device was "APPROVED for sale in the U.S." While the
    TerraFix press kit folder stated "pending FCC approval," this is not
    the disclaimer language explicitly required by Section 2.803(c) and,
    in any event, this statement was placed in small print in a
    non-conspicuous location on the back cover of the folder. As such,
    this statement clearly did not comport with the requirements of
    Section 2.803(c). The press releases included in the TerraFix folder
    likewise failed to include the disclaimer language explicitly
    required by Section 2.803(c); and, the "pending FCC approval"
    statement that was included was placed in a non-conspicuous place
    within the text of the press releases. The 2004 TerraFix price lists
    distributed at the trade shows also failed to include a disclaimer
    notice. Additionally, ACR admitted that no disclaimer notice was
    included within some of the PowerPoint presentations with select
    industry accounts, and the "Not for Sale Pending FCC Approval"
    sticker that was allegedly placed on other PowerPoint presentations
    did not comport with the requirements of Section 2.803(c).

16. The requisite disclaimer notice also was not displayed in ACR's OR
    and SHOT trade show booths. In this regard, ACR claimed that it only
    displayed a "mock-up dummy" of the TerraFix model.[^41] ACR's claims
    notwithstanding, exhibited non-working mock-ups of non-authorized
    devices are not exempt from the disclaimer notice requirement of
    Section 2.803(c). The disclaimer requirement applies to all radio
    frequency devices that are in the "development, design or
    preproduction stages" and that are subject to the Commission's
    equipment authorization procedures.[^42] ACR claimed that because
    the PLB-200 model is based on "technology incorporated into the
    PLB-100, it could be considered a prototype of a product properly
    authorized,"[^43] subject to Section 2.803(c)(1)'s "Prototype Not
    for Sale" disclaimer.[^44] ACR's claim is disingenuous at best,
    given that it did not display the prototype disclaimer, and that its
    promotional materials referenced the new and improved next
    generation PLB that incorporates the more precise GPS (over the
    prior Doppler Shift) technology.[^45]

17. Also, contrary to ACR's claim that its retailers are professional
    buyers who are familiar with, and would not offer new
    telecommunications products without, the Commission's equipment
    authorization, the complaint submitted evidence that at least one
    retailer was accepting purchase orders for the PLB-200.[^46]
    Moreover, the Bureau staff found several retail websites that were
    offering the TerraFix and AquaFix PLB-200s for sale. Specifically,
    the Bureau staff observed that the PLB-200s were advertised on the
    Boat U.S., West Marine, Mountain Gear and The Sportsman's Guide
    retail websites, and that such advertisements listed prices,
    specified delivery dates,[^47] and enabled consumers to place
    orders. Notably, the Mountain Gear and The Sportsman's Guide retail
    websites, respectively, stated that the PLB was "FCC approved" and
    represented that the PLB "\[e\]xceeds rigorous testing standards of
    ... \[the\] FCC." Indeed, the TerraFix PLB-200 was offered for sale,
    without the requisite disclaimer notice, in the Recreational
    Equipment, Inc. ("REI") mail order catalogue sent to consumers
    during the week of September 7, 2004.[^48] The fact that PLB-200s
    were being and continued to be offered for sale on retail websites
    and in retail catalogues is hardly surprising, given that ACR's
    displays, presentations and distributed materials did not contain
    the requisite disclaimer notice, and indeed some contained
    misleading information, regarding Commission authorization.

18. In the instant case, we thus find that ACR displayed a PLB-200
    model, made industry presentations, and distributed related
    promotional materials, prior to certification of the device without
    the disclaimer notice set forth in Section 2.803(c), in apparent
    willful and repeated violation of Section 302(b) of the Act and
    Section 2.803(a) of the Rules.

## Public marketing. 

19. As stated previously, in 1976, the Commission authorized
    manufacturers to advertise to the general public radio frequency
    devices that have not been certified or otherwise approved, provided
    such advertisements display the requisite disclaimer notice in a
    conspicuous manner. The Commission explained that the "prime or
    essential purpose" of Section 2.803 is "to keep unapproved and
    offending devices out of the stream of commerce," and that the
    disclaimer notice serves to alert the public "to the fact that many
    if not most of the multitude of RF devices proliferating in the
    marketplace require scrutiny by this Commission before marketing
    ...."[^49] Absent the conspicuously placed disclaimer notice
    requirement, it would be "unrealistic to permit consumer devices to
    be offered for sale to potentially millions of people and expect the
    delivery of the devices to be delayed while awaiting the Commission
    authorizations."[^50]

20. ACR's claim that the PLB-200 was only marketed to industry
    representatives and retailers to "educate ... \[them\] of products
    under development and for which authorization will be sought in the
    future"[^51] \-- and was never promoted to or directed at the
    general public[^52] \-- is simply belied by the record. Indeed, the
    record establishes that ACR knowingly and intentionally advertised
    in, and thus promoted and directed the unauthorized PLB-200 to the
    general public through, multiple outdoor and sporting magazines and
    catalogues. Such advertisements did not include the disclaimer
    notice required by Section 2.803(c). ACR's claim that "virtually all
    the \... promotional information shows that the equipment is
    'pending FCC approval'" is unavailing.[^53] The record establishes
    that the wording and placement of ACR's "pending FCC approval"
    statement did not comport with the requirements of Section 2.803(c),
    and thus did not alert the general public that FCC approval must be
    obtained prior to any sales, leases, or offers to sell and/or lease
    of such equipment.[^54]

21. In the instant case, we find that ACR apparently willfully and
    repeatedly violated Section 302(b) of the Act and Section 2.803(a)
    of the Rules, by advertising the PLB-200 to the general public,
    *prior* to certification without the disclaimer notice required by
    Section 2.803(c).

## Proposed Forfeiture. 

22. Section 503(b) of the Act,[^55] and Section 1.80(a) of the
    Rules,[^56] provide that any person who willfully or repeatedly
    fails to comply with the provisions of the Act or the Rules shall be
    liable for a forfeiture penalty. For purposes of Section 503(b) of
    the Act, the term "willful" means that the violator knew that it was
    taking the action in question, irrespective of any intent to violate
    the Commission's rules, and "repeatedly" means more than once.[^57]
    Based upon the record before us, it appears that ACR willfully and
    repeatedly violated Section 302(b) of the Act and Section 2.803(a)
    of the Rules by exhibiting and marketing the PLB-200s, which had not
    been certified in accordance with the Commission's equipment
    authorization procedures.

23. Section 503(b) of the Act authorizes the Commission to assess a
    maximum forfeiture of \$11,000 for each violation, or each day of a
    continuing violation, by a non-common carrier or other entity not
    specifically designated in Section 503(b), up to a statutory maximum
    forfeiture of \$87,500 for any single continuing violation;[^58] and
    Section 1.80(b)(4) specifically establishes a base forfeiture amount
    of \$7,000 for each violation involving the marketing of
    unauthorized equipment.[^59] In the present case, we find that each
    of ACR's displays and advertisements of, and presentations,
    distributions of informational and promotional materials regarding,
    the uncertified PLB-200 constitutes a separate violation.

24. In determining the appropriate forfeiture amount, Section
    503(b)(2)(D) of the Act[^60] requires the Commission to consider
    factors, such as "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."[^61] Having weighed the
    factors, we find that a \$75,000 forfeiture is appropriate in light
    of ACR's relative ability to pay a forfeiture,[^62] and the fact
    that ACR knowingly launched a substantial media campaign promoting
    its unauthorized equipment to the general public. Given the
    substantial degree of apparently unlawful equipment marketing, we
    recognize that straightforward application of the base forfeiture
    amount for each separate apparent violation would result in a
    significantly higher proposed forfeiture. Nevertheless, we believe
    that, in the instant case, the \$75,000 proposed forfeiture is
    sufficient to deter future violations of the Act and Rules and to
    ensure that uncertified equipment is not marketed in industry or
    public forums without the requisite disclaimer notices.

25. We note that the company has committed "to make certain that ACR is
    in complete compliance with the rules" and "intends to add to its
    promotional materials involving the referenced PLB\[-200s\] the
    exact wording of the disclaimers set forth in the Rules."[^63] We
    further note that ACR recently received Commission equipment
    authorization for the PLB-200.[^64] The Commission expects that
    corrective action will be implemented to bring past violations into
    compliance.[^65] However, such corrective action does not nullify or
    mitigate ACR's past marketing violations, and thus does not warrant
    any reduction in the proposed forfeiture.[^66]

#  ORDERING CLAUSES

26. Accordingly, **IT IS ORDERED** that, pursuant to pursuant to Section
    503(b) of the Act[^67] and Sections 0.111, 0.311 and 1.80 of the
    Rules,[^68] ACR Electronics, Inc. **IS** hereby **NOTIFIED** of its
    **APPARENT LIABILITY FOR A FORFEITURE** in the amount of seventy
    five thousand dollars (\$75,000) for willfully and repeatedly
    violating Section 302(b) of the Act and Section 2.803(a) of the
    Rules.

27. **IT IS FURTHER ORDERED** that, pursuant to Section 1.80 of the
    Rules, within thirty days of the release date of this Notice of
    Apparent Liability for Forfeiture, ACR Electronics, Inc. **SHALL
    PAY** the full amount of the proposed forfeiture or **SHALL FILE** a
    written statement seeking reduction or cancellation of the proposed
    forfeiture.

28. 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/Acct. No. and FRN No.
    referenced above. Payment by check or money order may be mailed to
    Forfeiture Collection Section, Finance Branch, Federal
    Communications Commission, P.O. Box 73482, Chicago, Illinois
    60673-7482. Payment by overnight mail may be sent to Bank One/LB
    73482, 525 West Monroe, 8th Floor Mailroom, Chicago, IL 60661.
    Payment by wire transfer may be made to ABA Number 071000013,
    receiving bank Bank One, and account number 1165259.

29. 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.

30. 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; 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.

31. Requests for payment of the full amount of this NAL under an
    installment plan should be sent to: Chief, Revenue and Receivable
    Operations Group, 445 12th Street, S.W., Washington, D.C.
    20554.[^69]

32. **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 Paul Frank, President,
    ACR Electronics, Inc., 5757 Ravenswood Road, Ft. Lauderdale, Florida
    33312, and Bruce A. Eisen, Esq., Kaye Scholer LLP, 901 15^th^
    Street, N.W., Suite 1100, Washington, D.C. 20005.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

[^1]: 47 U.S.C. § 302a(b).

[^2]: 47 C.F.R. § 2.803(a).

[^3]: Under "Status," the submitted confirmation order noted "051504,"
    which appears to represent the delivery date.

[^4]: *See* Letter from Joseph P. Casey, Chief, Spectrum Enforcement
    Division, Enforcement Bureau, Federal Communications Commission to
    Paul Frank, President, ACR Electronics, Inc. (March 29, 2004).

[^5]: *See* Letter from Bruce Eisen, Esq., Kaye Scholer LLP, to Brian
    Butler, Spectrum Enforcement Division, Enforcement Bureau, Federal
    Communications Commission (April 28, 2004) ("LOI Response").

[^6]: *See* Letter from Bruce Eisen, Esq., Kaye Scholer LLP, to Brian
    Butler, Spectrum Enforcement Division, Enforcement Bureau, Federal
    Communications Commission (May 4, 2004) ("LOI Supplement").

[^7]: LOI Response at 1-2.

[^8]: *Id.* at 1.

[^9]: *Id.* at 2.

[^10]: *Id.* at 6.

[^11]: 47 C.F.R. § 2.803(c).

[^12]: *Id.* at Exhibit 2. *See also* LOI Supplement, Exhibit 2. ACR's
    LOI Response included a photocopy of the TerraFix press kit, and its
    LOI Supplement included an original TerraFix press kit.

[^13]: LOI Response at 3.

[^14]: SHOT was held from February 12 through 15, 2004.

[^15]: LOI Response at 3.

[^16]: OR was held from January 30 through February 2, 2004.

[^17]: LOI Supplement at Exhibit 2.

[^18]: *Id.*

[^19]: *Id.*

[^20]: LOI Response at Exhibit 2; LOI Supplement at Exhibit 2.

[^21]: LOI Response at Exhibit 10.

[^22]: *Id.* at 4.

[^23]: In contrast to the TerraFix and AquaFix models, it should be
    noted that ACR stated that it had "not marketed the 'AeroFix' in any
    way other than to allow its sales representatives to use its name in
    conversation with retailers." LOI Response at 4.

[^24]: *Id.* at Exhibit 4.

[^25]: *Id.* at Exhibit 3.

[^26]: *Id.*

[^27]: *Id.* at 3.

[^28]: *Id.* at 4.

[^29]: *Id.* at Exhibits 11-12.

[^30]: *Id.*

[^31]: LOI Response at 4.

[^32]: *Id.* at 6.

[^33]: *Id.* at 4, Exhibits 8-9. ACR spent approximately one third
    (\$100,00) of its advertising budget (\$300,000) from January
    through March 2004, promoting the unauthorized PLB-200 in outdoor
    and sporting magazines and catalogues. *Id.* at Exhibit 9.

[^34]: *Id.*

[^35]: *Id.* With the exception of Outdoor Retailer/Outdoor Business
    Market Guides, it appears that all the publications that ran ACR's
    PLB-200 advertisements were clearly directed toward the ultimate
    end-users, *i.e.,* consumers. For instance, Outside Magazine
    "\[b\]ack in 1978 ... stated that \[it\] was 'dedicated to covering
    the people, sports and activities, politics, art, literature, and
    hardware if the outdoors,' an editorial goal that that has stuck
    ever since ... \[it\] has done an amazing job of bringing *people*
    in contact with the outside world." Http://www.outside.away.com.
    (emphasis added). Outside Magazine has a circulation of 650,000 and
    its Buyer Guide is distributed to "news racks" throughout the
    country and "gets passed around beyond subscribers. It gets read by
    a lot of other readers."
    Http://www.redoxx.com/articles/news-outside-gazette.html.

    Similarly, Backpacker's Magazine (circulation: 295,000) and Couloir
    Magazine (circulation: 41,000), both geared toward consumers,
    respectively describe their "mission" in terms of "encourage\[ing\]
    and enable\[ing\] *people* to experience wilderness," and
    "inform\[ing\] and inspir\[ing\[ *skiers* and *snowboarders* who
    'earn their turn in the backcounty.'"
    Http://www.backpacker.com/masthead/0,3131,,00.html;
    Http://www.couloirmag.com/about_us.

[^36]: *Id.* at Exhibit 8.

[^37]: Section 15.3(o) of the Rules, 47 C.F.R. § 15.3(o), defines an
    intentional radiator as a "device that intentionally generates and
    emits radio frequency energy by radiation or induction."

[^38]: 47 C.F.R. § 15.201(b).

[^39]: Sections 2.907(a) and (b), 47 C.F.R. §§ 2.907(a) and (b),
    provides, in pertinent part, that certification "is an equipment
    authorization issued by the Commission, based on representations and
    test data submitted by the applicant" and that it "attaches to all
    units subsequently marketed by the grantee which are identical ...
    to the sample tested ...."

[^40]: *See Interpretation and Amendment of Part 2, Section 2.803 of the
    Commission's Rules Relating to the Marketing (Advertising) of
    RadioFrequency Devices*, 62 FCC 2d 728, 729 ¶ 8 (1976) (interpreting
    the "trade show" exception of Section 2.803 to allow manufacturers
    to advertise "non-approved equipments -- providing such advertising
    contains notice that the equipments have not been authorized and may
    not be offered for sale or lease or sold or leased") ("*1976
    Order*"); *see also Interpretation and Amendment of Part 2, Section
    2.803 of the Commission's Rules Relating to the Marketing of
    RadioFrequency Devices*, RM Dockets 2573 and 2601, 58 FCC 2d 784
    (1976) (adopting the trade show exception of Section 2.803).

[^41]: LOI Response at 3.

[^42]: *Matter of Revision of Part 2 of the Commission's Rules Relating
    to the Marketing and Authorization of Radio Frequency Devices,* 12
    FCC Rcd 4533, 4533 ¶ 1 (1996) ("*1996 Order*"), *recon. granted,* 13
    FCC Rcd 12928 (1998). Manufacturers who exhibited and/or distributed
    promotional materials regarding non-working mock-ups or prototypes
    of radio frequency devices at trade shows, without the conspicuous
    disclaimer notice, have been found in violation of Section 2.803(a).
    *See Palmcom International Ltd.,* 8 FCC Rcd 332 (FOB 1993); *see
    also GVC Technologies, Inc.*, 8 FCC Rcd 6667 (FOB 1993). Regarding
    the display of non-authorized equipment, the *Palmcom* decision
    stated:

    > Although the device itself may have been a non-functioning
    > prototype, the displaying of a device that represents a radio
    > frequency device that had not been authorized by the FCC violates
    > Section 2.803 of the FCC's rules. The displaying of the device,
    > moreover, was a form of advertising which is also prohibited by
    > Section 2.803. The apparent purpose in displaying the device was
    > to market it, namely, to generate either immediate or future
    > orders to buy the device. Often at a trade show or even in a
    > store, there is no intent to sell actual device on display, but
    > the device is used to generate orders. The actual device that is
    > sold may not have been constructed or assembled at the time a
    > purchase order is placed.

    8 FCC Rcd at 332.

[^43]: LOI Response at 5.

[^44]: Section 2.803(c)(1) of the Rules, 47 C.F.R. § 2.803(c)(1)
    provides:

    > If the product being displayed \[at an industry trade show\] is a
    > prototype of a product that has been properly authorized and the
    > prototype, itself, is not authorized due to differences between
    > the prototype and the authorized product, the following disclaimer
    > notice may be used in lieu of the notice stated in paragraph (c)
    > ... of this section:
    >
    > Prototype. Not for Sale.

[^45]: *See, e.g.,* LOI Response at Exhibits 11-12.

[^46]: *See* note 3 and accompanying text, *supra.*

[^47]: For example, the Mountain Gear website indicated that the PLB-200
    would be "available to ship May 15, 2004."

[^48]: REI's website indicates that it has over 70 retail stores in the
    U.S. and also serves the needs of "outdoors people" through direct
    sales via the internet, telephone and mail. REI further indicates
    that it is the nation's largest consumer cooperative with over 2
    million members. *See http://www.rei.com.* Thus, it appears likely
    that REI's marketing of the unauthorized PLB-200 is reaching
    substantial numbers of consumers.

[^49]: *1976 Order,* 62 FCC 2d at 729 ¶ 5.

[^50]: *1997 Order*, 12 FCC Rcd at 4537 ¶ 7.

[^51]: LOI Response at 1.

[^52]: *See* notes 10 and 32 and accompanying text, *supra.*

[^53]: *See, e.g., ASLAN Computer Corp.*, 9 FCC Rcd 2030, 2030 ¶ 5 (FOB
    1994) (finding a disclaimer notice "DEMO NOT FOR SALE" for an
    uncertified computer model insufficient and a violation of Section
    2.803, which sets forth "very specific" disclaimer language which is
    "intended to convey to the general public or prospective purchasers
    the fact that a particular device needs FCC authorization, does not
    have it, and cannot be sold or offered for sale until such
    authorization has been granted"); *California Komputer Test, Inc.*,
    9 FCC Rcd 1046, 1046 ¶ 6 (FOB 1994) (finding that an advertisement
    in a newspaper, and a display in a retail outlet, of an uncertified
    computer "\[un\]accompanied by a conspicuous notice as specified in
    Section 2.803" violated the Commission's equipment marketing
    requirements).

[^54]: *See* notes 3 and 47 and accompanying text, *supra*.

[^55]: 47 U.S.C. § 503(b).

[^56]: 47 C.F.R. § 1.80(a).

[^57]: *See Southern California Broadcasting Co*., 6 FCC Rcd 4387
    (1991).

[^58]: 47 U.S.C. § 503(b). Section 503(b)(2)(C) provides for forfeitures
    up to \$10,000 for each violation in cases not covered by
    subparagraph (A) or (B), which address forfeitures for violations by
    broadcast licensees and common carriers, among others. In accordance
    with the inflation adjustment requirements contained in the Debt
    Collection Improvement Act of 1996, Pub. L. 104-134, Sec. 31001, 110
    Stat. 1321, the Commission has increased the maximum statutory
    forfeiture under Section 503(b)(2)(C) for each violation to
    \$11,000. *See* 47 C.F.R. § 1.80(b)(3); *Amendment of Section 1.80
    of the Commission\'s Rules and Adjustment of Forfeiture Maxima to
    Reflect Inflation*, 15 FCC Rcd 18221 (2000). Subsequent increases of
    the maximum statutory forfeiture amount had not taken effect at the
    time of the behavior in issue. *See Amendment of Section 1.80 of the
    Commission\'s Rules and Adjustment of Forfeiture Maxima to Reflect
    Inflation*, 19 FCC Rcd 10945 (2004).

[^59]: 47 C.F.R. § 1.80(b)(4).

[^60]: 47 U.S.C. § 503(b)(2)(D).

[^61]: *The Commission's Forfeiture Policy Statement and Amendment of
    Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines*,
    12 FCC Rcd 17087, 17110 (1997), *recon. denied* 15 FCC Rcd 303
    (1999).

[^62]: In this connection, we note that ACR is listed as a subsidiary of
    the global Cobham PLC. *See* LOI Response, Exhibits 11-12;
    Http://www.chelton.com/ltd/ltd. Cobham PLC operates "in three
    sectors -- aerospace systems, avionics and flight operations &
    services" and had reported 2002 annual revenues of \$1,178 billion).
    Http://www.biz.yahoo.com/ic/57/57756.html. *See Forfeiture Policy
    Statement,* 12 FCC Rcd at 17098 ¶ 20 (noting that the identity of a
    violator may be relevant in assessing and adjusting forfeitures,
    because, for example, a "\$10,000 forfeiture for a particular
    offense will \[not\] have the same deterrent effect on a small
    computer vendor, a moderately-sized radio common carrier, and a \$10
    billion per year local telephone company or interexchange carrier");
    *see also KASA Radio Hogar, Inc.,* 17 FCC Rcd 6256, 6258-59 ¶¶ 4-5
    (2002) (stating that it is appropriate to consider the income
    derived from its consolidated operations to determine whether a
    violator "can sustain a forfeiture").

[^63]: LOI Response at 6.

[^64]: On October 5, 2004, the Commission's Office of Engineering and
    Technology granted ACR's PLB-200 equipment authorization (FCC
    Identifier B66ACR-PLB-200).

[^65]: *See AT&T Wireless Services, Inc.*, 17 FCC Rcd 7891 (2002),
    *forfeiture ordered,* 17 FCC RCd 21866, 21875-76 ¶¶ 26-28 (2002);
    *Seawest Yacht Brokers,* 9 FCC Rcd 6099, 6099 ¶ 7 (1994); *see also
    TCI Cablevision of Maryland, Inc.,* 7 FCC Rcd 6013, 6014 ¶ 8 (1992)
    (considering subsequent corrective actions as a mitigation of past
    violations "would tend to encourage remedial rather preventative
    action").

[^66]: *Id.*

[^67]: 47 U.S.C. § 503(b).

[^68]: 7 C.F.R. § 0.111, 0.311 and 1.80.

[^69]: *See* 47 C.F.R. § 1.1914.