43474 Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Rules and Regulations

1United States Telephone Association v. FCC, 28

F.3d 1232 (1994).

2 In the Matter of the Commission’s Forfeiture

Policy Statement and Amendment of Section 1.80

of the Rules to Incorporate the Forfeiture

Guidelines, 10 FCC Rcd 2945 (1995), 60 FR 10056

(February 23, 1995).

‘‘Purchasers are warned that the parts

purchased herewith may not be in

compliance with applicable Federal Aviation

Administration requirements. Purchasers are

not exempted from and must comply with

applicable Federal Aviation Administration

requirements. Purchasers are solely

responsible for all FAA inspections and/or

modifications necessary to bring the

purchased items into compliance with 14

CFR (Code of Federal Regulations).’’

(c) The Federal agency must ensure

that the following certification is

executed by the purchaser and received

by the Government prior to releasing

such parts to the purchaser:

‘‘The purchaser agrees that the Government

shall not be liable for personal injuries to,

disabilities of, or death of the purchaser, the

purchaser’s employees, or to any other

persons arising from or incident to the

purchase of this item, its use, or disposition.

The purchaser shall hold the Government

harmless from any or all debts, liabilities,

judgments, costs, demands, suits, actions, or

claims of any nature arising from or incident

to purchase or resale of this item.’’

§ 101–37.609 What are the procedures for

mutilating unsalvageable aircraft parts?

(a) Identify unsalvageable aircraft

parts which require mutilation.

(b) Mutilate unsalvageable aircraft

parts so they can no longer be utilized

for aviation purposes. Mutilation

includes destruction of the data plate,

removing the serial/lot/part number,

and cutting, crushing, grinding, melting,

burning, or other means which will

prevent the parts from being

misidentified or used as serviceable

aircraft parts. Obtain additional

guidance on the mutilation of

unsalvageable aircraft parts in FAA AC

No. 21–38, Disposition of Unsalvageable

Aircraft Parts and Materials.

(c) Ensure an authorized agency

official witnesses and documents the

mutilation, retain a signed certification

and statement of mutilation.

(d) If unable to perform the

mutilation, turn in the parts to a Federal

or Federally-approved facility for

mutilation and proper disposition.

Ensure that contractor performance is in

accordance with the provisions of this

part.

(e) Ensure that mutilated aircraft parts

are sold only as scrap.

§ 101–37.610 Are there special procedures

for the exchange/sale of Government

aircraft parts?

Yes. Executive agencies may exchange

or sell aircraft parts as part of a

transaction to acquire similar

replacement parts in accordance with

FPMR part 101–46. In addition to the

requirements of this subpart, agencies

must ensure that the exchange/sale

transaction is accomplished in

accordance with the methods and

procedures contained in part 101–46 of

this chapter, and comply with the

restrictions and limitations under § 101–

46.202 of this chapter.

(a) Prior to the proposed exchange/

sale, agencies should determine whether

the parts identified for disposition are

airworthy parts. For additional guidance

refer to the applicable FAA Advisory

Circular(s), or contact the local FAA

FSDO.

(b) At the time of exchange or sale,

agencies must ensure that applicable

labels and tags, historical data and

modification records accompany the

aircraft parts prior to release. The

records must contain the information

and content as required by current DOD

and FAA requirements for maintenance

and inspections.

(c) Life limited parts that have

reached or exceeded their life limits, or

which have missing or incomplete

documentation, must either be returned

to the FAA production approval holder

as part of an exchange transaction, or

mutilated in accordance with § 101–

37.609.

(d) Unsalvageable aircraft parts, other

than parts in paragraph (c) of this

section, must not be used for exchange/

sale purposes; they must be mutilated in

accordance with § 101–37.609.

Dated: July 7, 1997.

David J. Barram,

Administrator of General Services.

[FR Doc. 97–21388 Filed 8–13–97; 8:45 am]

BILLING CODE 6820–24–U

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 1

[FCC 97–218]

Forfeiture Proceedings

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: This order amends the

Commission’s rules to incorporate, as a

note to the rule, the Commission’s

policy statement regarding forfeitures

and a suggested schedule of base

forfeiture amounts. The policy

statement and schedule of base

forfeiture amounts is intended to

provide a measure of predictability and

uniformity to the process of assessing

forfeitures.

EFFECTIVE DATES: Effective October 14,

1997.

FOR FURTHER INFORMATION CONTACT:

Pamera D. Hairston, Compliance and

Information Bureau, (202) 418–1160.

SUPPLEMENTARY INFORMATION:

Adopted: June 19, 1997.

Released: July 28, 1997.

1. This rule making responds to the

concerns expressed by the U.S. Court of

Appeals for the District of Columbia

Circuit when it vacated the

Commission’s previous policy statement

in the decision, United States

Telephone Association v. FCC. 1 In that

decision, the Court stated that the

forfeiture guidelines used by the

Commission constituted a rule that was

adopted without notice and comment

proceedings as required by the

Administrative Procedure Act. In light

of the court’s decision, the Commission

initiated a Notice of Proposed Rule

making proceeding, 2 proposing that the

prior policy statement be adopted, but

requesting comments on all aspects of

the proposal. In addition, the

Commission requested specific

comment on: (a) Whether the

Commission should use guidelines to

assess forfeitures instead of the

traditional case-by-case approach; (b)

whether the guidelines proposed in the

notice of proposed rule making should

be modified; and (c) whether adjustment

factor ranges should be adopted.

2. After evaluation of the record, the

Commission adopted a Forfeiture Policy

Statement on June 19, 1997. The

majority of the commenters agreed that

a guideline based approach was

preferable to the traditional case-by-case

approach. One commenter disagreed

with the guideline approach and argued

that too much Commission discretion or

flexibility in the guidelines would invite

litigation. The Commission agreed with

the majority that guidelines would add

a measure of predictability and

uniformity to the forfeiture process.

Regardless of which approach is used,

Section 503 of the Act provides the

violators an opportunity to litigate the

facts underlying the violation in an

administrative law hearing or a trial de

novo. We do not believe, therefore, that

the potential for litigation should

preclude us from providing necessary

guidance in the forfeiture process. Thus,

the Commission expressly retains its

discretion to depart from the guidelines

where warranted by the facts of the case.
Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Rules and Regulations 43475

3Streamlining Broadcast EEO Rules and Policies,

Vacating the EEO Forfeiture Policy Statement and

Amending Section 1.80 of the Commission’s Rules

to Include EEO Forfeiture Guidelines, Order and

Notice of Proposed Rule Making, 11 FCC Rcd 5154

(1996), 61 FR 9964 (March 12, 1996).

4 Public Law. 104–121, section 110 Stat. 847

(1996).

3. Some commenters suggested that

the Commission revise its forfeiture

guidelines in view of the changes in the

telecommunications industry since the

Commission developed its original

Forfeiture Policy Statement.

Commenters argued that the base

amounts were too high, and

discriminatory because they were

established according to the nature of

the service or identity of the violator

rather than the nature of the violation.

They suggested that the base forfeiture

amounts for identical violations should

be uniform for all services. We agreed

and have made revisions to the base

forfeiture structure. We also agreed with

the commenters that the adjustment

factor percentage ranges were difficult

to apply, and we are therefore

eliminating the percentage ranges. The

Commission will continue to use the

adjustment factors to increase or

decrease a forfeiture based on the

unique facts of the case.

4. In sum, unless a violation is unique

to a particular service, the base

forfeiture amount for a violation will be

the same for all services, regardless of

the identity of the violator. We believe

this is a more fair approach than our

prior guidelines. There are two

exceptions, however, to this

methodology. The base amount for

misrepresentation is set at the statutory

maximum for each service. Moreover,

base forfeiture amounts for violations

that are unique to each service are

established relative to the statutory

maximum for that service. The schedule

of forfeitures adopted with this

Forfeiture Policy Statement does not

constitute a comprehensive listing of all

potential violations and concomitant

base amounts. Omission from the

forfeiture schedule does not mean that

a violation is unimportant or that a

forfeiture for an omitted violation would

be less than those outlined in the

schedule. We also note that assessing

forfeitures for violations of the

Commission’s Broadcast Equal

Employment Opportunities (EEO) rules

will be addressed in a separate

proceeding. 3

5. To create base amounts that could

be applied uniformly to all services, we

used the statutory maximum for services

other than those in the broadcasting,

cable, and common carrier categories as

the common denominator for

developing base forfeiture amounts.

Base forfeiture amounts may be

increased or decreased upon evaluation

of the unique facts of the case in light

of the adjustment factors. These factors

mirror the concerns outlined in Section

503 of the Act regarding the violation as

well as the violator. Thus, a highly

profitable entity can expect that its

forfeiture may ultimately be assessed

higher than the base amount in light of

its ability to pay whereas a less

profitable entity may be assessed a

lesser amount. Factors such as degree of

harm of the violation as well as the

nature and circumstances surrounding

the violation may mitigate or increase a

forfeiture. We also believe that the

guidelines established in this Forfeiture

Policy Statement comport with the

requirements of the Small Business

Regulatory Fairness Enforcement Act

(SBREFA) of the Contract with America

Advancement Act of 1996. 4

6. The Forfeiture Policy Statement

also addresses several other issues

raised in the proceeding. In response to

the recommendation that warnings be

issued for all first time violations, the

Commission will continue to use its

discretion in deciding whether to issue

warnings, rather than assessing

forfeitures, on a case-by-case basis. The

commenters also contended, with

respect to the issue of ability to pay a

forfeiture, that the Commission focused

solely on gross revenues in its

evaluation and that the documentation

required by the Commission to

demonstrate inability to pay a forfeiture

proved burdensome. The Commission

noted, however, that it would look to

the totality of the violator’s

circumstances and that it would

consider objective documented

evidence in evaluating a violator’s

ability, or lack thereof, to pay a

forfeiture. With respect to use of prior

forfeitures in subsequent proceedings,

the Commission reiterated that the

legislative history of Section 504

supports its use of the underlying facts

of a prior violation in its evaluation of

subsequent violations.

7. With respect to administrative

matters, several commenters suggested

that the Commission rescind all pending

forfeitures imposed under the prior

Forfeiture Policy Statements. The

Commission explicitly stated that the

pending forfeitures would not be

cancelled because the forfeitures were

assessed in full accord with Section 503

of the Act. Thus, the Commission will

use the case-by-case approach in

evaluating pending cases. This approach

will also be used in cases where the

violation occurred prior to the release of

the Forfeiture Policy Statement but

where the Commission commences

forfeiture action after the effective date

of the instant rule making.

8. Accordingly, pursuant to sections 4

(i) and 303 (r) of the Communications

Act of 1934, as amended, 47 U.S.C.

154(i), 303(r), it is ordered that 47 CFR

§ 1.80 is amended as set forth below,

effective October 14, 1997. For copies of

the Final Regulatory Flexibility

Statement, contact International

Transcription Services, Inc., (202) 857–

3800.

List of Subjects in 47 CFR Part 1

Penalties.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Title 47 of the Code of Federal

Regulations, Part 1, is amended as

follows:

1. The authority citation for Part 1

continues to read as follows:

PART 1—PRACTICE AND

PROCEDURE

Authority: 47 U.S.C. 151, 154, 303, and

309(j); unless otherwise noted.

2. Section 1.80 is amended by adding

a note following paragraph (b)(4) to read

as follows:

§ 1.80 Forfeiture proceedings.

* * * * *

(b) * * *

(4) * * *

Note to paragraph (b)(4):

Guidelines for Assessing Forfeitures

The Commission and its staff may use

these guidelines in particular cases. The

Commission and its staff 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. The forfeiture ceiling per violation or

per day for a continuing violation stated in

Section 503 of the Communications Act and

the Commission’s Rules are $25,000 for

broadcasters and cable operators or

applicants, $100,000 for common carriers or

applicants, and $10,000 for all others. These

base amounts listed are for a single violation

or single day of a continuing violation. 47

U.S.C. 503(b)(2); 47 CFR 1.80. For continuing

violations involving a single act or failure to

act, the statute limits the forfeiture to

$250,000 for broadcasters and cable operators

or applicants, $1,000,000 for common

carriers or applicants, and $75,000 for all

others. Id. Pursuant to the Debt Collection

Improvement Act of 1996 (DCIA), Public Law

104–134, section 31001, 110 Stat. 1321

(1996), civil monetary penalties assessed by

the federal government, whether set by

statutory maxima or specific dollar amounts
43476 Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Rules and Regulations

as provided by federal law, must be adjusted

for inflation at least every four years based

on the formula outlined in the DCIA. Thus,

the statutory maxima increased to $27,500 for

broadcasters and cable operators or

applicants; $110,000 for common carriers or

applicants, and $11,000 for others. For

continuing violations, the statutory maxima

increased to $27,500 for broadcasters, cable

operators, or applicants; $1,100,000 for

common carriers or applicants; and $82,500

for others. The increased statutory maxima

became effective March 5, 1997. There is an

upward adjustment factor for repeated or

continuous violations, see Section II, infra.

That upward adjustment is not necessarily

applied on a per violation or per day basis.

Id. Unless Commission authorization is

required for the behavior involved, a Section

503 forfeiture proceeding against a nonlicensee or non-applicant who is not a cable

operator or common carrier can only be

initiated for a second violation, after issuance

of a citation in connection with a first

violation. 47 U.S.C. 503(b)(5). A prior citation

is not required, however, for non-licensee

tower owners who have previously received

notice of the obligations imposed by Section

303(q) and part 17 of the Commission’s rules

from the Commission. Forfeitures issued

under other sections of the Act are dealt with

separately in Section III of this note.

SECTION I.—BASE AMOUNTS FOR SECTION 503 FORFEITURES

Violation Amount

Misrepresentation/lack of candor ............................................................................................................................................................. (1)

Construction and/or operation without an instrument of authorization for the service ........................................................................... $10,000

Failure to comply with prescribed lighting and/or marking ...................................................................................................................... 10,000

Violation of public file rules ...................................................................................................................................................................... 10,000

Violation of political rules: reasonable access, lowest unit charge, equal opportunity, and discrimination ............................................ 9,000

Unauthorized substantial transfer of control ............................................................................................................................................ 8,000

Violation of children’s television commercialization or programming requirements ................................................................................ 8,000

Violations of rules relating to distress and safety frequencies ................................................................................................................ 8,000

False distress communications ................................................................................................................................................................ 8,000

EAS equipment not installed or operational ............................................................................................................................................ 8,000

Alien ownership violation ......................................................................................................................................................................... 8,000

Failure to permit inspection ..................................................................................................................................................................... 7,000

Transmission of indecent/obscene materials .......................................................................................................................................... 7,000

Interference .............................................................................................................................................................................................. 7,000

Importation or marketing of unauthorized equipment .............................................................................................................................. 7,000

Exceeding of authorized antenna height ................................................................................................................................................. 5,000

Fraud by wire, radio or television ............................................................................................................................................................ 5,000

Unauthorized discontinuance of service .................................................................................................................................................. 5,000

Use of unauthorized equipment ............................................................................................................................................................... 5,000

Exceeding power limits ............................................................................................................................................................................ 4,000

Failure to respond to Commission communications ............................................................................................................................... 4,000

Violation of sponsorship ID requirements ................................................................................................................................................ 4,000

Unauthorized emissions ........................................................................................................................................................................... 4,000

Using unauthorized frequency ................................................................................................................................................................. 4,000

Failure to engage in required frequency coordination ............................................................................................................................. 4,000

Construction or operation at unauthorized location ................................................................................................................................. 4,000

Violation of requirements pertaining to broadcasting of lotteries or contests ......................................................................................... 4,000

Violation of transmitter control and metering requirements .................................................................................................................... 3,000

Failure to file required forms or information ............................................................................................................................................ 3,000

Failure to make required measurements or conduct required monitoring .............................................................................................. 2,000

Failure to provide station ID .................................................................................................................................................................... 1,000

Unauthorized pro forma transfer of control ............................................................................................................................................. 1,000

Failure to maintain required records ........................................................................................................................................................ 1,000

1Statutory Maximum for each Service.

VIOLATIONS UNIQUE TO THE SERVICE

Violation Services affected Amount

Unauthorized conversion of long distance telephone service ....................................................................... Common Carrier .......... $40,000

Violation of operator services requirements .................................................................................................. Common Carrier .......... 7,000

Violation of pay-per-call requirements ........................................................................................................... Common Carrier .......... 7,000

Failure to implement rate reduction or refund order ..................................................................................... Cable ........................... 7,500

Violation of cable program access rules ....................................................................................................... Cable ........................... 7,500

Violation of cable leased access rules .......................................................................................................... Cable ........................... 7,500

Violation of cable cross-ownership rules ....................................................................................................... Cable ........................... 7,500

Violation of cable broadcast carriage rules ................................................................................................... Cable ........................... 7,500

Violation of pole attachment rules ................................................................................................................. Cable ........................... 7,500

Failure to maintain directional pattern within prescribed parameters ........................................................... Broadcast .................... 7,000

Violation of main studio rule .......................................................................................................................... Broadcast .................... 7,000

Violation of broadcast hoax rule .................................................................................................................... Broadcast .................... 7,000

AM tower fencing ........................................................................................................................................... Broadcast .................... 7,000

Broadcasting telephone conversations without authorization ....................................................................... Broadcast .................... 4,000

Violation of enhanced underwriting requirements ......................................................................................... Broadcast .................... 2,000
Federal Register / Vol. 62, No. 157 / Thursday, August 14, 1997 / Rules and Regulations 43477

Section II. Adjustment Criteria for

Section 503 Forfeitures

Upward Adjustment Criteria

(1) Egregious misconduct.

(2) Ability to pay/relative

disincentive.

(3) Intentional violation.

(4) Substantial harm.

(5) Prior violations of any FCC

requirements.

(6) Substantial economic gain.

(7) Repeated or continuous violation.

Downward Adjustment Criteria

(1) Minor violation.

(2) Good faith or voluntary disclosure.

(3) History of overall compliance.

(4) Inability to pay.

Section III. Non-Section 503 Forfeitures

That Are Affected by the Downward

Adjustment Factors

Unlike Section 503 of the Act, which

establishes maximum forfeiture

amounts, other sections of the Act, with

one exception, state prescribed amounts

of forfeitures for violations of the

relevant section. These amounts are

then subject to mitigation or remission

under Section 504 of the Act. The one

exception is Section 223 of the Act,

which provides a maximum of $50,000

per day. For convenience, the

Commission will treat the $50,000 set

forth in Section 223 as if it were a

prescribed base amount, subject to

downward adjustments. The following

amounts were adjusted for inflation

pursuant to the Debt Collection

Improvement Act of 1996 (DCIA) Public

Law 104–134, section 31001, 110 Stat

1321 (1996). The new amounts became

effective on March 5, 1997. These nonSection 503 forfeitures may be adjusted

downward using the ‘‘Downward

Adjustment Criteria’’ shown for Section

503 forfeitures in Section II of this note.

Violation Statutory amount

($)

Sec. 202(c) Common Carrier Discrimination ...................................................................................................................... 6,600 330/day.

Sec. 203(e) Common Carrier Tariffs ................................................................................................................................... 6,600 330/day.

Sec. 205(b) Common Carrier Prescriptions ........................................................................................................................ 13,200.

Sec. 214(d) Common Carrier Line Extensions ................................................................................................................... 1,200/day.

Sec. 219(b) Common Carrier Reports ................................................................................................................................ 1,200.

Sec. 220(d) Common Carrier Records & Accounts ............................................................................................................ 6,600/day.

Sec. 223(b) Dial-a-Porn ...................................................................................................................................................... 55,000 maximum/day.

Sec. 364(a) Ship Station Inspection ................................................................................................................................... 5,500 (owner).

Sec. 364(b) Ship Station Inspection ................................................................................................................................... 1,100 (vessel master).

Sec. 386(a) Forfeitures ....................................................................................................................................................... 5,500/day (owner).

Sec. 386(b) Forfeitures ....................................................................................................................................................... 1,100 (vessel master).

Sec. 634 Cable EEO ........................................................................................................................................................... 500/day.

* * * * *

[FR Doc. 97–21115 Filed 8–13–97; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 64

[CC Docket 94–129; FCC 97–248]

Unauthorized Changes of Consumer’s

Long Distance Carriers

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: The Commission adopted a

combined Further Notice of Proposed

Rule Making and Memorandum

Opinion and Order on Reconsideration

which amends the Commission’s rules

and policies governing the unauthorized

switching of subscribers’ primary

interexchange carriers (PICs), an activity

more commonly known as ‘‘slamming.’’

In the Order on Reconsideration, the

Commission disposes of six petitions for

reconsideration of its 1995 Report and

Order, and amends its rules regarding

changes in subscribers’ long distance

carriers in three respects. The

Commission’s decision is intended to

deter and ultimately eliminate

unauthorized changes in subscribers’

long distance carriers.

EFFECTIVE DATE: January 12, 1998 except

for § 64.1150 which will become

effective upon approval by the Office of

Management and Budget. The

Commission will publish a document at

a later date announcing the effective

date.

FOR FURTHER INFORMATION CONTACT:

Cathy Seidel, Enforcement Division,

Common Carrier Bureau (202) 418–

0960.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s

Memorandum Opinion and Order on

Reconsideration in CC Docket No. 94–

129 [FCC 97–248], adopted on July 14,

1997 and released on July 15, 1997. The

full text of the Order on Reconsideration

is available for inspection and copying

during normal business hours in the

FCC Reference Center, Room 239, 1919

M Street, N.W., Washington, D.C. The

complete text of this decision may also

be purchased from the Commission’s

duplicating contractor, International

Transcription Services, 1231 20th

Street, N.W., Washington, D.C.

Summary of Memorandum Opinion

and Order on Reconsideration

I. Background

1. The Commission first established

safeguards to deter slamming when

equal access was implemented in 1985.

By 1992, because the interexchange

market had become more competitive,

the need for additional safeguards to

deter slamming increased. Therefore,

the Commission adopted rules requiring

that all IXCS institute one of four

verification procedures before

submitting a carrier change request

generated through telemarketing on

behalf of a customer. 7 FCC Rcd 1038

(1992), recon. denied, 8 FCC Rcd 3215

(1993). In 1994, the Commission on its

own motion and in response to

continuing complaints from subscribers

regarding slamming, instituted a rule

making and adopted rules in its 1995

Report and Order 10 FCC Rcd 9560, 60

FR 35846 (July 12, 1995), establishing

further anti-slamming safeguards to

deter misleading letters of agency

(LOAs). A LOA is a document signed by

a subscriber which states that a