[Federal Register Volume 69, Number 151 (Friday, August 6, 2004)]
[Rules and Regulations]
[Pages 47788-47790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16973]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[FCC 04-139]


Inflation Adjustment of Maximum Forfeiture Penalties

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document increases the maximum monetary forfeiture 
penalties available to the Commission under its rules governing 
monetary forfeiture proceedings to account for inflation. The 
inflationary adjustment is necessary to implement the Debt Collection 
Improvement Act of 1996, which requires Federal agencies to adjust 
``civil monetary penalties provided by

[[Page 47789]]

law'' at least once every four years. The increase covers the period 
between June of the year the particular forfeiture amount was last set 
or adjusted and June 2003. The increase in the Consumer Price Index for 
the relevant period was applied to each maximum penalty, and then 
rounded using the statutorily defined rules to adjust each maximum 
monetary forfeiture penalty accordingly. The base forfeiture amounts in 
the Commission's rules remain unchanged by this rule revision.

DATES: Effective September 7, 2004.

FOR FURTHER INFORMATION CONTACT: Kathryn Berthot, Enforcement Bureau, 
Spectrum Enforcement Division, (202) 418-7454.

SUPPLEMENTARY INFORMATION: This is a summary of the Order by the 
Commission, FCC 04-139, adopted on June 14, 2004, and released on June 
18, 2004. The complete text of this Order is available for inspection 
and copying during normal business hours in the FCC Reference 
Information Center, Courtyard Level, 445 12th Street, SW., Washington, 
DC 20554 and also may be purchased from the Commission's copy 
contractor, Best Copy and Printing, Inc., at 1-800-378-3160, CY-B402, 
445 12th Street, SW., Washington, DC 20554.
    This Order amends Sec.  1.80(b) of the Commission's rules, 47 CFR 
1.80(b), to increase the maximum penalties established in that section 
to account for inflation since the last adjustment to these penalties. 
The adjustment procedure is set forth in detail in Sec.  1.80(b)(5) of 
the Commission's rules. That section implements the Debt Collection 
Improvement Act of 1996, 28 U.S.C. 2461, which requires Federal 
agencies to adjust maximum statutory civil monetary penalties at least 
once every four years.
    This Order adjusts the maximum penalties to account for the 
increase in the Consumer Price Index (CPI) between June of the year the 
forfeiture amount was last set or adjusted,\1\ and June 2003. The 
increases were then rounded using the statutorily prescribed rules to 
produce the adjusted penalties. The Order also makes editorial 
amendments and corrections to Sec.  1.80(b) of the Commission's rules.
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    \1\ Under the rounding rules set forth in section 
1.80(b)(5)(ii), the inflation adjustment for a statutory forfeiture 
amount must reach a specific threshold before the forfeiture amount 
may be increased. Thus, different CPIs may be used to calculate the 
inflation factors for different statutory forfeitures, depending on 
when a particular forfeiture was last increased. The June 1999 CPI 
is used to calculate the inflation factors for the statutory 
forfeiture amounts in sections 202(c) (the amount for each 
violation, not the per day amount for continuing violations), 203(e) 
(the amount for each violation, not the per day amount for 
continuing violations), 220(d), 503(b)(2)(A) (the maximum amount for 
continuing violations, not the amount for a single violation or 
single day of a violation), 503(b)(2)(B), and 503(b)(2)(C) (the 
maximum amount for continuing violations, not the amount for a 
single violation or single day of a violation). The June 1995 CPI is 
used to calculate the inflation factors for the statutory forfeiture 
amounts in sections 202(d) (the per day amount for continuing 
violations), 203(e) (the per day amount for continuing violations), 
205(b), 364(a), 364(b), 386(a), 386(b), 503(b)(2)(A) (the amount for 
a single violation or single day of a violation), 503(b)(2)(C) (the 
amount for a single violation or single day of a violation), 507(a), 
and 507(b). The June 1992 CPI is used to calculate the inflation 
factor for the section 634 forfeiture amount, and the June 1989 CPI 
is used to calculate the inflation factors for the statutory 
forfeiture amounts in sections 214(d) and 219(b). Finally, the first 
inflation adjustment for each statutory forfeiture may not exceed 10 
percent of the statutory maximum amount. See 47 CFR 1.80(b)(5), Note 
to paragraph (b)(5). This is the first inflation adjustment for the 
statutory forfeiture amounts in sections 364(b), 386(b) and 634 
because this is the first time that the inflation adjustment for 
these forfeitures reached the specific threshold set forth in the 
rounding rules. Accordingly, the inflation adjustment for the 
forfeiture amounts in sections 364(b), 386(b) and 634 is limited to 
10 percent.
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    The amendment of Sec.  1.80(b) simply implements the requirements 
of the Debt Collection Improvement Act of 1986, 28 U.S.C. 2461, as 
incorporated in Sec.  1.80(b)(5) of the Commission's rules, as well as 
updates and clarifies the rule to reflect the statute more precisely 
without substantively changing it. Moreover, since Congress has 
mandated these periodic rule changes and the Commission has no 
discretion but to make them, we find that, for good cause, compliance 
with the notice and comment provisions of the Administrative Procedure 
Act is unnecessary. See 5 U.S.C. 553(b)(B).
    Since a notice of proposed rulemaking is not required, the 
Regulatory Flexibility Act, 5 U.S.C. 601 et seq., does not apply.
    The actions taken in this Order have been analyzed with respect to 
the Paperwork Reduction Act of 1995 and found to impose no new or 
modified reporting and recordkeeping requirements or burdens on the 
public.

List of Subjects in 47 CFR Part 1

    Administrative practice and procedure, Penalties.

    Federal Comunications Commission.
William F. Caton,
Deputy Secretary.

Rule Changes

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR part 1 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(i) and (j), 155, 225, 303(r), and 
309.


0
2. Section 1.80 is amended by:
0
a. Revising paragraphs (b)(1) through (b)(4);
0
b. Revising the introductory text of the note to paragraph (b)(4);
0
c. Revising section III of the note to paragraph (b)(4);
0
d. Revising paragraphs (b)(5) introductory text and (b)(5)(iii).
    The revisions read as follows:


Sec.  1.80  Forfeiture proceedings.

* * * * *
    (b) Limits on the amount of forfeiture assessed. (1) If the 
violator is a broadcast station licensee or permittee, a cable 
television operator, or an applicant for any broadcast or cable 
television operator license, permit, certificate, or other instrument 
of authorization issued by the Commission, except as otherwise noted in 
this paragraph, the forfeiture penalty under this section shall not 
exceed $32,500 for each violation or each day of a continuing 
violation, except that the amount assessed for any continuing violation 
shall not exceed a total of $325,000 for any single act or failure to 
act described in paragraph (a) of this section. There is no limit on 
forfeiture assessments for EEO violations by cable operators that occur 
after notification by the Commission of a potential violation. See 
section 634(f)(2) of the Communications Act.
    (2) If the violator is a common carrier subject to the provisions 
of the Communications Act or an applicant for any common carrier 
license, permit, certificate, or other instrument of authorization 
issued by the Commission, the amount of any forfeiture penalty 
determined under this section shall not exceed $130,000 for each 
violation or each day of a continuing violation, except that the amount 
assessed for any continuing violation shall not exceed a total of 
$1,325,000 for any single act or failure to act described in paragraph 
(a) of this section.
    (3) In any case not covered in paragraphs (b)(1) or (b)(2) of this 
section, the amount of any forfeiture penalty determined under this 
section shall not exceed $11,000 for each violation or each day of a 
continuing violation, except that the amount assessed for any 
continuing violation shall not exceed a total of $97,500 for

[[Page 47790]]

any single act or failure to act described in paragraph (a) of this 
section.
    (4) Factors considered in determining the amount of the forfeiture 
penalty. In determining the amount of the forfeiture penalty, the 
Commission or its designee will take into account the nature, 
circumstances, extent and gravity of the violations 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.

    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 described in Sec.  1.80(b)(5)(iii). These statutory maxima 
became effective September 7, 2004. Forfeitures issued under other 
sections of the Act are dealt with separately in section III of this 
note.
* * * * *

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 forfeiture per day. For convenience, the 
Commission will treat this amount as if it were a prescribed base 
amount, subject to downward adjustments. The following amounts are 
adjusted for inflation pursuant to the Debt Collection Improvement Act 
of 1996 (DCIA), 28 U.S.C. 2461. These non-section 503 forfeitures may 
be adjusted downward using the ``Downward Adjustment Criteria'' shown 
for section 503 forfeitures in section II of this note.

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            Violation                       Statutory amount ($)
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Sec. 202(c) Common Carrier         $8,600 430/day.
 Discrimination.
Sec. 203(e) Common Carrier         8,600 430/day.
 Tariffs.
Sec. 205(b) Common Carrier         18,200.
 Prescriptions.
Sec. 214(d) Common Carrier Line    1,320/day.
 Extensions.
Sec. 219(b) Common Carrier         1,320.
 Reports.
Sec. 220(d) Common Carrier         8,600/day.
 Records & Accounts.
Sec. 364(a) Forfeitures (Ships)..  6,500 (owner).
Sec. 364(b) Forfeitures (Ships)..  1,100 (vessel master).
Sec. 386(a) Forfeitures (Ships)..  6,500/day (owner).
Sec. 386(b) Forfeitures (Ships)..  1,100 (vessel master).
Sec. 634 Cable EEO...............  550/day.
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    (5) Inflation adjustments to the maximum forfeiture amount. (i) 
Pursuant to the Debt Collection Improvement Act of 1996, Public Law 
104-134 (110 Stat. 1321-358), which amends the Federal Civil Monetary 
Penalty Inflation Adjustment Act of 1990, Public Law 101-410 (104 Stat. 
890; 28 U.S.C. 2461 note), the statutory maximum amount of a forfeiture 
penalty assessed under this section shall be adjusted for inflation at 
least once every four years using the method specified in the statute. 
This is to be done by determining the `cost-of-living adjustment', 
which is the percentage (if any) by which the CPI for June of the 
preceding year exceeds the CPI for June of the year the forfeiture 
amount was last set or adjusted. The inflation adjustment is determined 
by multiplying the cost-of-living adjustment by the statutory maximum 
amount. Round off this result using the rules in paragraph (b)(5)(ii) 
of this section. Add the rounded result to the statutory maximum 
forfeiture penalty amount. The sum is the statutory maximum amount, 
adjusted for inflation.
* * * * *
    (iii) The application of the inflation adjustments required by the 
DCIA, 28 U.S.C. 2461, results in the following adjusted statutory 
maximum forfeitures authorized by the Communications Act:

------------------------------------------------------------------------
                                                               Maximum
                                                               penalty
                     U.S. Code citation                       after DCIA
                                                              adjustment
                                                                 ($)
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47 U.S.C. 202(c)...........................................       $8,600
                                                                     430
47 U.S.C. 203(e)...........................................        8,600
                                                                     430
47 U.S.C. 205(b)...........................................       18,200
47 U.S.C. 214(d)...........................................        1,320
47 U.S.C 219(b)............................................        1,320
47 U.S.C. 220(d)...........................................        8,600
47 U.S.C. 362(a)...........................................        6,500
47 U.S.C. 362(b)...........................................        1,100
47 U.S.C. 386(a)...........................................        6,500
47 U.S.C. 386(b)...........................................        1,100
47 U.S.C. 503(b)(2)(A).....................................       32,500
                                                                 325,000
47 U.S.C. 503(b)(2)(B).....................................      130,000
                                                               1,325,000
47 U.S.C. 503(b)(2)(C).....................................       11,000
                                                                  97,500
47 U.S.C. 507(a)...........................................          650
47 U.S.C. 507(b)...........................................           10
47 U.S.C. 554..............................................          550
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[FR Doc. 04-16973 Filed 8-5-04; 8:45 am]
BILLING CODE 6712-01-P