**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+---------------------------------+
| In the Matter of                 | ) | File Number EB-09-SE-014        |
|                                  |   |                                 |
| Cablevision Systems Corp.        | ) | NAL/Acct. No. 200932100036      |
|                                  |   |                                 |
|                                  | ) | FRN 0097225276                  |
|                                  |   |                                 |
|                                  | ) |                                 |
|                                  |   |                                 |
|                                  | ) |                                 |
|                                  |   |                                 |
|                                  | ) |                                 |
+----------------------------------+---+---------------------------------+

##  {#section .unnumbered}

## NOTICE OF APPARENT LIABILITY FOR FORFEITURE AND ORDER {#notice-of-apparent-liability-for-forfeiture-and-order .unnumbered}

**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 and Order*"), we find that Cablevision Systems Corp.'s cable
    systems serving Oakville, Connecticut ("Cablevision" or
    "Cablevision") apparently willfully violated Section 76.1603(b) of
    the Commission\'s Rules ("Rules").[^1] Specifically, Cablevision
    failed to provide the requisite thirty (30) days advance written
    notice to its customers, before implementing a change in rates,
    programming services or channel positions as required under the
    Rules. We conclude, pursuant to Section 503(b) of the Communications
    Act of 1934, as amended ("Act"),[^2] that Cablevision is apparently
    liable for a forfeiture in the amount of seven thousand five hundred
    dollars (\$7,500). We also order Cablevision, within ninety (90)
    days of this *NAL and Order*, to issue refunds to the customers
    affected by the change in rates, programming services or channel
    position as explained more fully below.

# BACKGROUND

2.  The Commission received a complaint alleging that the customer in
    Oakville, Connecticut had lost "at least five channels" from their
    Cablevision service package.[^3] According to the Complainant, this
    change was made without prior notice.

# DISCUSSION

> **A. Cablevision Apparently Violated Section 76.1603(b) By Failing To
> Provide Proper Notice to its Customers.**

3.  Based on the record before us, we find that Cablevision apparently
    willfully violated Section 76.1603(b) by failing to notify its
    customers before implementing a change in rates, programming
    services or channel positions as required under the Rules.

4.  Section 76.1603(b) of the Rules provides, in relevant part, as
    follows:

> Customers will be notified of any changes in rates, programming
> services or channel positions as soon as possible in writing. Notice
> must be given to subscribers a minimum of thirty (30) days in advance
> of such changes if the change is within the control of the cable
> operator. In addition, the cable operator shall notify subscribers 30
> days in advance of any significant changes in the other information
> required by § 76.1602.[^4]

5.  We find that the migration of each channel constitutes a change in
    rates, programming services or channel positions under the Rules. We
    also find that the migration was a change within the control of the
    Cablevision because we are unaware of external forces that would
    have required the Cablevision to make such a change, particularly
    without giving 30 days notice. In our Letter of Inquiry issued to
    Cablevision on October 30, 2008,[^5] we asked for a range of
    information related to the migration of channels, including evidence
    that consumers were provided with the notice required under our
    rules. Unfortunately, Cablevision failed to produce any evidence on
    this point in response to our request, including any evidence that
    the requisite notice was provided of the migration that is the
    subject of this *NAL and Order*.

6.  Therefore, for the reasons stated above, we find that Cablevision
    apparently violated Section 76.1603(b) by failing to provide its
    customers at least thirty (30) days notice of a change in rates,
    programming services or channel positions.

> **B. Forfeiture Calculation**

7.  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.[^6] 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.[^7] 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.[^8] Based on the analysis set forth below,
    we conclude that Cablevision is apparently liable for a forfeiture
    in the amount of seven thousand five hundred dollars (\$7,500) for
    its willful violations of Section 76.1603(b) of the Rules.

8.  Under Section 503(b)(2)(A) and Section 1.80(b)(1) of the
    Commission's Rules,[^9] we may assess a cable television operator a
    forfeiture of up to \$32,000 for each violation or each day of a
    continuing violation, up to a statutory maximum forfeiture of
    \$325,000 for any single continuing violation. 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."[^10]

9.  The Commission's *Forfeiture Policy Statement*[^11] and Section 1.80
    of the Rules do not establish a specific base forfeiture for
    violation of Section 76.1603's notice requirements.[^12] Based on
    the totality of circumstances here and the Commission's past
    precedent, we find that \$7,500 is an appropriate base forfeiture
    for the failure to notify its customers of Cablevision's change in
    service.[^13] Accordingly, we conclude that Cablevision is
    apparently liable for a total forfeiture of \$7,500 for its willful
    violation of Section 76.1603(c) of the Rules.

> **C. Cablevision Must Issue Refunds To Customers Harmed By Its Failure
> To Provide Notice.**

10. Cablevision's change in rates, programming services or channel
    positions without the required notice has harmed its customers who
    purchased services based on the reasonable assumption that
    Cablevision would not be moving significant portions of programming
    from standard service tiers to digital cable tiers without providing
    the notice required under our Rules. In effect, Cablevision\'s
    movement of programming to a digital tier without any reduction in
    subscriber fees has substantially diminished the value of the
    programming Complainant receives. The Complainant must now pay the
    same monthly rate for cable service even though Complainant can view
    fewer channels.

11. Thus, we order Cablevision, within ninety (90) days of this *NAL and
    Order*, to issue refunds to affected customers who did not receive
    the required notice of the date of the programming change.
    Specifically, Cablevision must provide refunds as follows:

> Cablevision must refund the customer's subscriber fees of all affected
> customers who did not receive the required notice based on the
> diminished value of their service following the movement of
> programming without proper notice by \$0.10 per channel moved per
> month and reduce complainant's rates on a going-forward basis
> accordingly until the notice required under our rules has been
> provided.[^14]

12. In addition, we order Cablevision to submit to the Bureau within 30
    days of the issuance of refunds a report in the form of a letter
    advising the Bureau that such refunds have been paid and that
    affected subscribers' fees have been reduced as directed.

# ordering clauses

13. **Accordingly, IT IS ORDERED**, pursuant to section 503(b) of the
    Communications Act of 1934, as amended, 47 U.S.C. S: 503(b)(5), and
    section 1.80 of the Commission\'s rules, 47 C.F.R. S: 1.80, and
    under the authority delegated by sections 0.111 and 0.311 of the
    Commission\'s rules,47 C.F.R. S: 0.111, 0.311, Cablevision is
    NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the amount of
    seven thousand five hundred (\$7,500) for willful violation of
    Section 76.1603(b) of the Rules.

14. **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 and Order, Cablevision Systems
    Corp. **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),
    601, and 629 of the Communications Act of 1934, as amended 47 U.S.C.
    §§ 151, 154(i), 154(j), 521, 549, Cablevision must take the steps
    set forth in paragraphs 10, 11, and 12 of this *NAL 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. Oceanic will also send electronic
    notification on the date said payment is made to
    Kathy.Berthot@fcc.gov and to JoAnnLucanik@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.

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 Howard Symons, Esq.,
    Counsel for Cablevision Systems Corp., Mintz, Levin, Cohn, Ferris,
    Glovsky, and Popeo, P.C., 701 Pennsylvania Ave., N.W., Suite 900,
    Washington, D.C., 20004-2608.

    FEDERAL COMMUNICATIONS COMMISSION

Kris Anne Monteith

Chief, Enforcement Bureau

[^1]: 47 C.F.R. § 76.1603(b).

[^2]: 47 U.S.C. § 503(b).

[^3]: FCC Complaint 08-C00040651-1

[^4]: 47 C.F.R. § 76.1603(b).

[^5]: Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement
    Division, Enforcement Bureau, Federal Communications Commission to
    Howard Symons, Esq., Counsel for Cablevision Systems Corp. (Oct. 30,
    2008) ("LOI").

[^6]: 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1).

[^7]: 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).

[^8]: *See, e.g.,* *SBC Communications*, *Inc.,* Forfeiture Order, 17
    FCC Rcd 7589, 7591 (2002).

[^9]: 47 U.S.C. § 503(b)(2)(A), 47 C.F.R. § 1.80(b)(1). The Commission
    has repeatedly amended Section 1.80(b)(1) of the Rules 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. Most recently, the Commission raised
    the maximum forfeitures applicable to cable operators, broadcast
    licensees, and applicants for such authority from \$32,500 to
    \$37,500 for a single violation, and from \$325,000 to \$375,000 for
    a continuing violation. *See* Inflation Adjustment of Maximum
    Forfeiture Penalties, 73 Fed. Reg. 44663, 44664 (July 31, 2008). The
    new forfeiture limits will take effect September 2, 2008 and do not
    apply to this case.

[^10]: 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.

[^11]: *See The Commission's Forfeiture Policy Statement and Amendment
    of Section 1.80 of the Rules to Incorporate the Forfeiture
    Guidelines,* Report and Order, 12 FCC Rcd 17087, 17115 (1997),
    *recon. denied*, 15 FCC Rcd 303 (1999) ("*Forfeiture Policy
    Statement*").

[^12]: The Commission has substantial discretion, however, in proposing
    forfeitures. *See, e.g., InPhonic, Inc.,* Order of Forfeiture and
    Further Notice of Apparent Liability, 22 FCC Rcd 8689, 8699 (2007);
    *Globcom, Inc. d/b/a Globcom Global Commun.,* Order of Forfeiture,
    21 FCC Rcd 4710, 4723-24 (2006). We may apply the base forfeiture
    amounts described in the *Forfeiture Policy Statement* and the
    Commission's rules, or we may depart from them altogether as the
    circumstances demand *See* 47 C.F.R. §1.80(b)(4) ("The Commission
    and its staff *may* use these guidelines in particular cases \[,
    and\] *retain the discretion* to issue a higher or lower forfeiture
    than provided in the guidelines, to issue no forfeiture at all, or
    to apply alternative or additional sanctions as permitted by the
    statute.") (emphasis added).

[^13]: *See also Northland Cable Television, Inc.*, Memorandum Opinion
    and Order and Notice of Apparent Liability for Forfeiture, 23 FCC
    Rcd 7865 (Media Bur. 2008) (proposing \$20,000 forfeiture for
    apparent violations of Section 76.1603 and other rules); *Northland
    Cable Television, Inc.,* Memorandum Opinion and Order and Notice of
    Apparent Liability for Forfeiture, 23 FCC Rcd 7872 (Media Bur. 2008)
    (same).

[^14]: Thus, for example, if Cablevision migrated a channel and did not
    provide proper notice for nine months, it must refund \$0.90 to each
    affected customer. \$0.10 is our best estimate of the relevant
    license fee per channel. We note that Cablevision did not provide
    actual per channel license fees as required by the LOI. The Bureau
    will reconsider the appropriate license fee per channel should
    Cablevision submit a petition for reconsideration that includes
    evidence that the license fees of the affected channels are lower
    than \$0.10 per month.