[Federal Register Volume 68, Number 60 (Friday, March 28, 2003)]
[Rules and Regulations]
[Pages 15096-15098]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7462]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 73 and 76

[GC Docket No. 02-37; FCC 03-45]


Truthful Statements

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission amends its regulations relating to the 
submission of truthful information to the Commission. Under the former 
rule, Commission regulatees were prohibited, in any written statement 
submitted to the Commission, from making any misrepresentation or 
willful material omission bearing on any matter within the jurisdiction 
of the Commission. The new rule provides that specified persons covered 
by the rule may not, in proceedings covered by the rule, make written 
or oral statements of fact that are, in material respects, 
intentionally incorrect or misleading or make written statements of 
fact without a reasonable basis for believing that the statement is 
correct and not misleading.

[[Page 15097]]


DATES: Effective March 28, 2003.

FOR FURTHER INFORMATION CONTACT: David S. Senzel, Office of General 
Counsel (202) 418-1720.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order (R&O), GC Docket No. 02-37, adopted on March 4, 2003, and 
released March 10, 2003. The full text of the R&O is available for 
inspection and copying during normal business hours in the FCC 
Reference Information Center, Portals II, 445 12th Street, SW., Room 
CY-A257, Washington, DC 20554. Copies of filings may be purchased from 
the Commission's copy contractor, Qualex International, Portals II. 445 
12th Street, SW., Room CY-B402, Washington, DC 20554, telephone (202) 
863-2893, facsimile (202) 863-2898. Filings may also be viewed on the 
Commission's Internet Web site using the Electronic Document Filing 
System (ECFS) at http://gullfoss2.fcc.gov/prod/ecfs/comsrch_v2.cgi.

Summary of Report and Order

    1. In our Notice of Proposed Rulemaking, 67 FR 10658, March 8, 2002 
we proposed to amend Sec.  1.17 of our rules, 47 CFR 1.17, which 
relates to the submission of truthful statements to the Commission. The 
comments that we received were helpful in clarifying the appropriate 
scope of the rule, and by this Report and Order we amend the rule 
accordingly. We also make conforming amendments to 47 CFR 73.1015 and 
47 CFR 76.939. The new rule is a clearer, more comprehensive, and more 
focused articulation of the standards for truthful statements than the 
old rule. The new rule will also enhance the effectiveness of our 
enforcement efforts.
    2. The new rule broadens the category of persons subject to the 
rule by applying the requirement to: (1) Any holder of any Commission 
authorization, whether by application or by blanket authorization or 
other rule; (2) any person performing without Commission authorization 
an activity that requires Commission authorization; (3) any person that 
has received a citation or a letter of inquiry from the Commission or 
its staff, or is otherwise the subject of a Commission or staff 
investigation, including an informal investigation; (4) in a proceeding 
to amend the FM or Television Table of Allotments, any person filing an 
expression of interest, and (5) to the extent not already covered 
above, any cable operator or common carrier. The rule does not apply to 
attorneys or engineers who file statements in a representational 
capacity on behalf of the entities specified. Attorneys and engineers 
are covered only to the extent that they are themselves the regulated 
entity.
    3. The amended rule applies to investigatory proceedings and 
adjudicatory proceedings other than declaratory ruling proceedings. It 
does not apply to rulemakings generally but does apply to expressions 
of interest in proceedings to amend the FM or Television Table of 
Allotments and to tariff proceedings. The primary focus of the new rule 
is to enhance the effectiveness of adjudicatory and investigatory 
proceedings by providing for an expanded range of sanctions that can be 
imposed in those contexts. We do not see rulemakings of general 
applicability and declaratory rulings as raising enforcement issues of 
the same urgency. Additionally, while we expect parties to be truthful 
in rulemakings and declaratory ruling proceedings, we are mindful that 
such proceedings typically involve wide-ranging discussions of general 
policy rather than specific facts to be weighed in an adjudicatory 
manner. We do not wish to hinder full and robust public participation 
in such policymaking proceedings by encouraging collateral wrangling 
over the truthfulness of the parties' statements. Expressions of 
interest in proceedings to amend the FM or Television Table of 
Allotments, and tariff proceedings raise concerns that are 
distinguishable from those in rulemakings generally and will be subject 
to the rule.
    4. The new rule prohibits written and oral statements of fact that 
are intentionally incorrect or misleading and written statements that 
are made without a reasonable basis for believing that the statement is 
correct and not misleading. With respect to both oral and written 
statements of fact, we follow our historical definition of 
misrepresentation and lack of candor, which defined as misconduct 
incorrect and misleading statements where there was an actual intent to 
deceive the Commission. We continue to believe that the rule barring 
such intentional deceptions, whether by affirmative misstatements or by 
omissions of material facts, should apply, in appropriate contexts, to 
both oral and written material statements of fact. We believe that in 
preparing written statements in fact-based adjudications and 
investigations, regulatees are on heightened notice that they must have 
a reasonable basis to believe that what they say is correct and not 
misleading. In these circumstances, we consider it justified to require 
that parties use due diligence in providing information that is correct 
and not misleading to the Commission, including taking appropriate 
affirmative steps to determine the truthfulness of what is being 
submitted. A failure to exercise such reasonable diligence would mean 
that the party did not have a reasonable basis for believing in the 
truthfulness of the information.
    5. Additionally, we wish to clarify that our reference to 
``materiality'' and ``Commission jurisdiction'' in the rule is intended 
only to indicate that the representations and omissions we are 
concerned about are those material \1\ to the issues before the 
Commission and that we do not intend the rule to apply to 
representations or omissions that are insignificant or extraneous to 
the issues.
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    \1\ ``Material'' has been defined as ``important,'' ``more or 
less necessary,'' ``having influence or effect.'' See McDonald v. 
Murray, 515 P.2d 151, 152 (Wash. 1973). Additionally, a ``material 
representation'' has been defined as one ``relating to matter which 
is so substantial or important as to influence the party to whom it 
is made.'' See In the Matter of Mark E. Wagner, 744 N.E.2d 418, 421 
(Ind. 2001).
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    6. We also take three subsidiary actions. First, our amendment of 
Sec.  1.17 warrants making conforming amendments to 47 CFR 73.1015 and 
47 CFR 76.939. Section 73.1015 is the counterpart of Sec.  1.17 
applicable specifically to the broadcast service. Section 76.939 
applies specifically to cable operators. We see no purpose in having 
multiple sections contain redundant provisions. Accordingly, we amend 
Sec. Sec.  73.1015 and 76.939 to cross reference Sec.  1.17. Second, 
our revision of the rule makes unnecessary the language contained in 
the first paragraph of the former rule. The authority of the Commission 
to obtain information is set forth in various statutory provisions, for 
example, 47 U.S.C. 218, 308(b), 403, and does not need to be reiterated 
in the rule. Third, commenter James A. Kay, Jr. (Kay) attaches to his 
comments a copy of a petition for rulemaking filed March 5, 2002. In 
his petition, Kay proposes several modifications to the Commission's 
investigatory and hearing procedures. We have examined Kay's proposals 
and find them without merit. Several of Kay's proposals would unduly 
burden the Commission's investigatory and hearing functions. Other 
matters are already adequately addressed by existing law and policy. We 
will therefore deny the petition.

Final Regulatory Flexibility Certification

    7. The Regulatory Flexibility Act of 1980, as amended (see 5 U.S.C. 
601 et

[[Page 15098]]

seq.)\2\ requires a final regulatory flexibility analysis in a notice 
and comment rulemaking proceeding unless we certify that ``the rule 
will not, if promulgated, have a significant economic impact on a 
substantial number of small entities.'' 5 U.S.C. 605(b). We believe 
that the rule we adopt today will not have a significant economic 
impact on a substantial number of small entities.
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    \2\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et. seq., has 
been amended by the Contract With America Advancement Act of 1996, 
Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the 
CWAAA is the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA).
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    8. In expanding the scope of 47 CFR 1.17, we are merely requiring 
persons subject to the Commission's regulatory jurisdiction to submit 
information that is correct and not misleading. The revised rule thus 
does not impose any significant compliance burden on persons dealing 
with the Commission, including small entities, or otherwise affect the 
rights of persons participating in Commission proceedings. The revised 
rule simply enables the Commission to impose sanctions more effectively 
in those instances where people intentionally or negligently submit 
incorrect or misleading information. There is thus no reason to believe 
that operation of the revised rule would impose significant costs on 
parties to Commission proceedings.
    9. Accordingly, we certify that the rule will not have a 
significant economic impact on a substantial number of small entities. 
5 U.S.C. 605(b). The Commission shall send a copy of this Report and 
Order, including this certification, to the Chief Counsel for Advocacy 
of the SBA. 5 U.S.C. 605(b).
    10. 47 CFR. 1.17, 73.1015, and 76.939 are amended as set forth in 
the rule changes.
    11. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this Report and Order, 
including the Regulatory Flexibility Certification, to the Chief 
Counsel for Advocacy of the Small Business Administration.
    12. The Petition for Rulemaking, filed March 5, 2002, by James A. 
Kay. Jr. is denied.

List of Subjects in 47 CFR Parts 1, 73, and 76

    Administrative practice and procedure, Radio, Telecommunications, 
Television.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR parts 1, 73 and 76 as follows:

PART 1--PRACTICE AND PROCEDURE

0
1. The authority citation for part 1 continues to read as follows:

    Authority: 47 U.S.C. 151, 154, 303, and 309(j) unless otherwise 
noted.

0
2. Section 1.17 is revised to read as follows:

Sec.  1.17  Truthful and accurate statements to the Commission.

    (a) In any investigatory or adjudicatory matter within the 
Commission's jurisdiction (including, but not limited to, any informal 
adjudication or informal investigation but excluding any declaratory 
ruling proceeding) and in any proceeding to amend the FM or Television 
Table of Allotments (with respect to expressions of interest) or any 
tariff proceeding, no person subject to this rule shall;
    (1) In any written or oral statement of fact, intentionally provide 
material factual information that is incorrect or intentionally omit 
material information that is necessary to prevent any material factual 
statement that is made from being incorrect or misleading; and
    (2) In any written statement of fact, provide material factual 
information that is incorrect or omit material information that is 
necessary to prevent any material factual statement that is made from 
being incorrect or misleading without a reasonable basis for believing 
that any such material factual statement is correct and not misleading.
    (b) For purpose of paragraph (a) of this section, ``persons subject 
to this rule'' shall mean the following:
    (1) Any applicant for any Commission authorization;
    (2) Any holder of any Commission authorization, whether by 
application or by blanket authorization or other rule;
    (3) Any person performing without Commission authorization an 
activity that requires Commission authorization;
    (4) Any person that has received a citation or a letter of inquiry 
from the Commission or its staff, or is otherwise the subject of a 
Commission or staff investigation, including an informal investigation;
    (5) In a proceeding to amend the FM or Television Table of 
Allotments, any person filing an expression of interest; and
    (6) To the extent not already covered in this paragraph (b), any 
cable operator or common carrier.

PART 73--RADIO BROADCAST SERVICES

0
3. The authority citation for part 73 continues to read as follows:

    Authority: 47 U.S.C. 154, 303, 334, and 336 unless otherwise 
noted.


0
4. Section 73.1015 is revised to read as follows:


Sec.  73.1015  Truthful written statements and responses to Commission 
inquiries and correspondence.

    The Commission or its representatives may, in writing, require from 
any applicant, permittee, or licensee written statements of fact 
relevant to a determination whether an application should be granted or 
denied, or to a determination whether a license should be revoked, or 
to any other matter within the jurisdiction of the Commission, or, in 
the case of a proceeding to amend the FM or Television Table of 
Allotments, require from any person filing an expression of interest, 
written statements of fact relevant to that allotment proceeding. Any 
such statements of fact are subject to the provisions of Sec.  1.17 of 
this chapter.

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

0
5. The authority citation for part 76 continues to read as follows:

    Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303A, 
307, 308, 309, 312, 315, 317, 325, 338, 339, 503, 522, 531, 532, 
533, 534, 535, 536, 537, 543, 544, 544A, 545, 548, 549, 552, 554, 
556, 558, 560, 561, 571, 572, AND 573 unless otherwise noted.


0
6. Section 76.939 is revised to read as follows:


Sec.  76.939  Truthful written statements and responses to requests of 
franchising authority.

    Cable operators shall comply with franchising authorities' and the 
Commission's requests for information, orders, and decisions. Any 
information submitted to a franchising authority or the Commission in 
making a rate determination pursuant to an FCC Form 393 (and/or FCC 
Forms 1200/1205) filing or a cost-of-service showing is subject to the 
provisions of Sec.  1.17 of this chapter.

[FR Doc. 03-7462 Filed 3-27-03; 8:45 am]
BILLING CODE 6712-01-P