$14.4 Million in Fines Proposed by FCC for Alleged Internal Duplicates
On the evening of September 30 – only hours before the federal shutdown – the FCC Enforcement Bureau issued five notices proposing to impose more than $14.4 million in fines against five eligible telecommunications carriers ("ETCs") for alleged duplicate support to the same subscriber by the same ETC:
The notices do not specify whether the alleged duplicates involve precisely matching subscriber information, or whether the data is more nuanced, such as similar names or differing apartment numbers at the same street address. The level of proposed monetary assessments are much larger than previous FCC fines imposed for Lifeline program violations. By comparison, the most recent Lifeline enforcement case resulted in a total of just over $1 million in refunded Lifeline subsidies and “voluntary contributions” to the U.S. Treasury for two companies.
The fines proposed for the five companies in the present cases appear to be the result of various political pressures, such as the recent letter from Sen. Claire McCaskill to Acting Chairwoman Mignon Clyburn. Perhaps in response to such pressures, the statement of FCC Commissioner Ajit Pai accompanying the notices states that he requested a “fifty fold” increase in fines. The largest component of the proposed fines is $5,000 for each alleged duplicate subscriber. Commissioner Pai’s statement also seems to recognize to some extent, however, that many such duplicates are due to the “brazen” acts of subscribers willing to break the rules. The statement of Acting Chairwoman Clyburn notes that ETCs have a responsibility to prevent intra-company duplicates, although she also indicates that she has instructed the Enforcement Bureau to “carefully consider” the ETCs’ responses.
The companies have 30 days to either respond to the notices or pay the proposed fines, although a prolonged shutdown of the federal government could potentially extend that deadline.