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FCC Criticized For Not Collecting Announced Fines

November 24, 2015 - Written By David Steele

Earlier in the year, the Federal Communications Commission, or FCC, hit the headlines for giving American carrier, AT&T Wireless, a $100 million fine for how the company throttled customers unlimited data plans. It has also fined over ten companies $100 million for the Lifeline fracas, but has not collected any of this money for what were high profile cases. And now the FCC has fallen under the gaze of members of Congress for not collecting these debts; it seems that the FCC’s Enforcement Bureau is not quick about collecting fines (technically known as “notices of apparent liability, or NAL, rather than a fine). In the words of House telecom subcommittee Chairman Rep. Greg Walden (R-Ore.): “If an enormous fine is announced and it’s never prosecuted, it makes you wonder what’s the purpose? The question is, are they just after headlines or some sort of performance metric? I don’t know.” The AT&T case is particularly interesting because at the time, the carrier’s formal response stated that the fine was “unprecedented and indefensible” and it would be rejected by a court should the FCC decide to levy the fine. The North American carrier sees the FCC has having exceeded its statutory authority in this case – but has increased the throttling threshold for some unlimited data plans from 5 GB to 22 GB of monthly data allowance.

It transpires that when a fine is issued, the business in question typically has a month to pay or challenge the fine. However, the fine is not formally issued until an investigation is complete – and this can take years after the initial announcement, which is on a technicality a proposed fine rather than a notice of apparent liability. The FCC may then rely on the Justice Department to collect the fine should the underlying business refuse to pay. One obvious here is that the industry reports on the proposed fine as though it were complete, when it may be some months or years from being complete. Indeed, a FCC spokesperson explained to the source website that by issuing a proposed fine, this may be about protecting as it may make a company change their behavior during the FCC investigation.

The 2013 Lifeline case brought with it the following statement from the FCC: “Today’s actions constitute the most recent step in the Commission’s significant efforts to root out waste, fraud, and abuse in the Lifeline program and preserve the overall integrity of the Universal Service Fund (USF).” However, none of the NALs have been imposed on the companies found to have abused the Lifeline service and several are still receiving FCC reimbursements for ‘phone subsidies. One of the Lifeline providers under fire from the FCC, TracFone, said after the hearing that no fine had yet been imposed by the FCC.

Whilst the FCC has a convoluted way of collecting fines from businesses, the way stories are reported does not help matters: some of the blame is simply that websites report the FCC has levied a fine on a particular business when the reality is that the fine is not finalized. Nevertheless, with headline stories of multi-million dollar proposed fines being leveled at businesses seen as falling foul of the FCC’s rules, the disparity between quoted fines and monies received is sure to be investigated.