**Before the**

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | *  | File No. EB-08-SE-1069       |
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| Cablevision Systems Corp.        | ** | NAL/Acct. No. 200932100024   |
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|                                  | *  | FRN 0009725276               |
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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 Cablevision Systems Corp. ("Cablevision")
    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 Cablevision is apparently liable for a forfeiture
    in the amount of twenty-five thousand dollars (\$25,000). We also
    order Cablevision to respond fully to the LOI within ten (10) days
    of release of this *NAL.* If Cablevision again fails to submit a
    complete response, it will be subject to further enforcement action.

# background

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

3.  Cablevision failed to respond fully to many of the inquiries in the
    LOI, providing non-responsive or incomplete answers.[^4] For
    instance, Cablevision fails to respond to questions 5.d, 6 and 7
    (which inquire about communications between the company and its
    customers regarding analog-to-digital channel migrations), stating
    that its records are not maintained in a manner that allows the
    Company, in the limited time available, to gather or produce the
    responsive documents or records.[^5] Cablevision's response to
    question 3.a. (which requests the dates that written notice was
    provided to affected customers) provides only "a partial list of
    relevant dates."[^6] In addition, in its response to question 8.b.
    (which requests the per-subscriber fees it pays to video programming
    distributors for those channels subject of the inquiry) simply
    evades the question by stating it is prohibited by contract from
    disclosing this information; further claiming that the "information
    is highly confidential and production of the specific information
    sought, in the manner sought, would be costly and burdensome."[^7]

# discussion

## Failure to Respond Fully to the LOI

4.  We find therefore that Cablevision's failure to fully respond to the
    Bureau's inquiry constitutes an apparent willful[^8] violation of a
    Commission order and Section 76.939 of the Rules. The Bureau
    directed Cablevision 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 Cablevision violated Commission rules.
    Cablevision received the LOI but 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."[^9] 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."[^10]
    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."[^11] Pursuant to
    Section 76.939 of the Rules, a cable operator must comply with FCC
    requests for information, orders, and decisions.[^12] 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.[^13] Lastly, numerous FCC decisions have reaffirmed
    the Commission's authority to investigate potential misconduct and
    punish those that disregard FCC inquiries.[^14] The Commission
    delegated this authority to the Enforcement Bureau in Section
    0.111(a)(16) of the Rules.[^15]

6.  To the extent Cablevision associates itself with the arguments
    presented in a letter submitted by the National Cable
    Telecommunications Association[^16] that 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.[^17]

7.  Cablevision alleges that because of the time allowed, it could not
    provide the requested documents and that to do so would likely prove
    costly and burdensome.[^18] 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, it was essential that the Bureau receive the
    requested information as soon as reasonably possible. Based on these
    considerations, we determined that two weeks was an appropriate
    deadline. Cablevision does not dispute that this decision was within
    our discretion. Thus, Cablevision 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, Cablevision has not provided any
    supplemental information.

8.  Finally, we reject Cablevision's contention that the confidential
    nature of some of the information responsive to the Bureau's LOI
    absolved Cablevision of its obligation to respond. In addition to
    requesting confidential treatment of such material pursuant to the
    Commission's well-established, long-standing rules regarding the
    treatment of material routinely considered confidential,[^19] the
    Commission issued a Protective Order in this investigation
    specifically to address any concerns regarding the potentially
    confidential nature of certain information. Thus, Cablevision had
    the option, as set forth by the Commission's General Counsel in his
    letter directed to Cablevision,[^20] of providing the information
    under that Protective Order.[^21] We find therefore that
    Cablevision's failure to fully respond to the Bureau's inquiry
    constitutes an apparent willful[^22] 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
    Cablevision 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.[^23] 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.[^24] 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.[^25] We conclude under this
    standard that Cablevision 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,[^26] 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."[^27]

11. 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.[^28] We find that Cablevision'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, Cablevision'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 Cablevision 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.[^29] Based on these facts, we therefore propose a
    twenty-five thousand dollar (\$25,000) forfeiture against
    Cablevision for failing to respond fully to Commission
    communications. This forfeiture amount is consistent with recent
    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.[^30]

12. We also direct Cablevision 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 Cablevision to further penalties,
    including potentially higher monetary forfeitures.[^31]

# 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, Cablevision
    Systems Corp. 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 30 days of the release date of this Notice of Apparent
    Liability for Forfeiture and Order, Cablevision **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, Cablevision 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. Cablevision will also send electronic
    notification on the date said payment is made to
    JoAnn.Lucanik@fcc.gov and Linda.Nagel@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 Linda M. Nagel, Esq.,
    Spectrum Enforcement Division, FCC, at Linda.Nagel@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 counsel for
    Cablevision Systems Corp., Howard J. Symons, Mintz, Levin, Cohn,
    Ferris, Glovsky and Popeo, P.C., 701 Pennsylvania Avenue, N.W.,
    Washington, D.C. 20004.

    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
    Howard Symons, Esq., Counsel for Cablevision Systems Corp. (Oct. 30,
    2008) ("LOI").

[^4]: Letter from Howard Symons, Esq., Counsel for Cablevision Systems
    Corp. to Linda M. Nagel, Esq., Spectrum Enforcement Division,
    Enforcement Bureau, Federal Communications Commission (Nov. 13,
    2008) ("LOI Response"). We note that Cablevision seeks confidential
    treatment of the entirety of its LOI Response. *See* LOI Response at
    7. We do not rule on Cablevision's request for confidentiality at
    this time.

[^5]: LOI Response at 6.

[^6]: LOI Response at 4.

[^7]: LOI Response at 6.

[^8]: 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*").

[^9]: 47 U.S.C. § 154(i).

[^10]: 47 U.S.C. § 154(j).

[^11]: 47 U.S.C. § 403.

[^12]: 47 C.F.R. § 76.939 ("Cable operators shall comply with ... the
    Commission's requests for information, orders, and decisions.").

[^13]: *See* 47 C.F.R. § 1.17.

[^14]: *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).

[^15]: 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).

[^16]: LOI Response at 2, citing 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).

[^17]: *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....").

[^18]: LOI Response at 4, 6-7.

[^19]: *See* LOI Attachment, *Request for Confidential Treatment*,
    referencing the Commission's Rules at 47 C.F.R. § 0.459.

[^20]: *See* Berry Letter.

[^21]: *See Cablevision Systems Corp.*, Protective Order, (DA 08-2490,
    Enf. Bur. 2008) (Released Nov. 13, 2008).

[^22]: 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*").

[^23]: 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1).

[^24]: 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).

[^25]: *See, e.g.,* *SBC Forfeiture Order*, 17 FCC Rcd at 7591.

[^26]: 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.
    Cablevision's apparent violations occurred after September 2, 2008
    and are therefore subject to the higher forfeiture limits.

[^27]: 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.

[^28]: *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).

[^29]: Berry Letter at 2.

[^30]: *See supra* note 13.

[^31]: We do not decide in this *NAL* whether the failure to respond to
    an LOI constitutes a continuing violation.