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Charter Communications, Inc

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Released: December 31, 1969

Federal Communications Commission

DA 09-81

Before the

Federal Communications Commission

Washington, D.C. 20554

)
In the Matter of
)
File No. EB-08-SE-1070
)
NAL/Acct. No. 200932100013
Charter Communications, Inc.
)
FRN 0017179383
)

NOTICE OF APPARENT LIABILITY FOR FORFEITURE AND ORDER

Adopted: January 19, 2009

Released: January 19, 2009

By the Chief, Enforcement Bureau:

I.

INTRODUCTION

1.
In this Notice of Apparent Liability for Forfeiture and Order ("NAL"), we find that Charter
Communications, Inc. ("Charter") apparently willfully violated a Commission Order and Section 76.939 of
the Commission's Rules ("Rules") in failing to respond fully to an Enforcement Bureau Letter of Inquiry.1
We conclude, pursuant to Section 503(b) of the Communications Act of 1934, as amended ("Act"),2 that
Charter is apparently liable for a forfeiture in the amount of twenty-five thousand dollars ($25,000). We
also order Charter to respond fully to the LOI within ten (10) days of release of this NAL. If Charter again
fails to submit a complete response, it will be subject to further enforcement action.

II.

BACKGROUND

2.
In response to consumer complaints against Charter, on October 30, 2008, the
Enforcement Bureau ("Bureau") issued a Letter of Inquiry ("LOI") regarding the company's migration of
analog programming to digital tiers.3 The LOI sought information concerning instances in which Charter
had migrated analog channels to a digital tier, including the channels affected, whether and how the
company notified customers of the change, whether, in light of the change in service, the company
permitted customers to change their service tier without charge, and the rates charged customers before
and after the channel migration. The LOI also asked about Charter's charges for digital set-top boxes as
well as information regarding Charter's subscriber rates and the rates it pays to video programmers.
3.
Charter failed to respond fully to many of the inquiries in the LOI, providing non-
responsive or incomplete answers.4 For example, Charter's response to Question 1.g. (whether Charter


1 47 C.F.R. 76.939.
2 47 U.S.C. 503(b).
3 Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal
Communications Commission to Megan M. Delany, Vice President and Senior Counsel, Charter Communications,
Inc. (Oct. 30, 2008) ("LOI").
4 Letter from Megan M. Delany, Vice President and Senior Counsel, Charter Communications, Inc. to Marlene H.
Dortch, Secretary, Federal Communications Commission (Nov. 13, 2008) ("LOI Response"). We note that Charter
seeks confidential treatment of certain portions of its LOI response. See Letter from Megan M. Delany, Vice
President and Senior Counsel, Charter Communications, Inc. to Marlene H. Dortch, Secretary, Federal
Communications Commission (Nov. 13, 2008) ("Confidentiality Request"). We do not rule on Charter's request for
confidentiality at this time.

Federal Communications Commission

DA 09-81

implemented a rate reduction in connection with any analog-to-digital channel changes) simply states that
"all rates have been set in accordance with applicable rate regulations..." without addressing the specific
question of whether any rate reductions were implemented to reflect the reduction in the number of
channels accessible to analog-only subscribers.5 Charter's response to Question 1.j. (whether the cable
system has been found subject to effective competition) provides an incomplete chart of state and local
franchise areas where the Commission has found Charter was subject to effective competition, and fails to
identify those cable systems where analog-to-digital channel changes took place as requested by the
question. Charter also fails to respond to Question 2.c. (whether the company offered equipment
discounts, and if so, the period such discount was offered and the price offered during that period), and
simply provides sample templates and/or sample copies of notices/lists in response to Questions 3 and 4
in lieu of the requested information "due to the unusually short time frame in which to respond."6 In
response to Questions 5, 6, and 7, which seek communications with consumers about any analog-to-
digital channel migrations, Charter states that it was unable to compile the documents because of the
"burdensome" nature of the request and the time frame to respond.7 Finally, Charter simply evades
Question 8.b. (the per-subscriber fees it pays to video programming distributors for those channels subject
of the inquiry) by responding that there are no channels to which this question would apply because
channels are not provided to its customers on a fee-per-channel basis. While Charter may not price
specific channels on a per-subscriber basis, however, the question asks for the price it pays to video
programming distributors on a per-subscriber fee basis.8 Charter's response is non-responsive and
misleading to the extent it does pay such fees to video programming distributors.

III.

DISCUSSION

A.

Failure to Respond Fully to the LOI

4.
We find that Charter's failure to fully respond to the Bureau's inquiry constitutes an
apparent willful9 violation of a Commission order and Section 76.939 of the Rules. The Bureau directed
Charter to provide certain information related to the movement of analog channels to digital tiers. This
information was necessary to enable the Commission to perform its enforcement function and evaluate
whether Charter violated Commission rules. Charter received the LOI but has failed to provide a full and
complete response.
5.
The Commission has broad investigatory authority under Sections 4(i), 4(j), and 403 of
the Act, its Rules, and relevant precedent. Section 4(i) authorizes the Commission to "issue such orders,
not inconsistent with this Act, as may be necessary in the execution of its functions."10 Section 4(j) states
that "the Commission may conduct its proceedings in such manner as will best conduce to the proper
dispatch of business and to the ends of justice."11 Section 403 grants the Commission "full authority and


5 LOI Response at 4.
6 Id. at 6, 7.
7 Id. at 7, 8.
8 Id. at 8.
9 Section 312(f)(1) of the Act defines willful as "the conscious and deliberate commission or omission of [any] act,
irrespective of any intent to violate" the law. 47 U.S.C. 312(f)(1). The legislative history of Section 312(f)(1) of
the Act indicates that this definition of willful applies to both Sections 312 and 503(b) of the Act, H.R. Rep. No. 97-
765, 97th Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the term in the Section 503(b) context.
See, e.g., Southern California Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387-88 5
(1991) ("Southern California Broadcasting").
10 47 U.S.C. 154(i).
11 47 U.S.C. 154(j).
2

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power to institute an inquiry, on its own motion ... relating to the enforcement of any of the provisions of
this Act."12 Pursuant to Section 76.939 of the Rules, a cable operator must comply with FCC requests for
information, orders, and decisions.13 In carrying out this obligation, a cable operator also must provide
truthful and accurate statements to the Commission or its staff in any investigatory or adjudicatory matter
within the Commission's jurisdiction.14 Lastly, numerous FCC decisions have reaffirmed the
Commission's authority to investigate potential misconduct and punish those that disregard FCC
inquiries. 15 The Commission delegated this authority to the Enforcement Bureau in Section 0.111(a)(16)
of the Rules.16
6.
We reject Charter's argument that the LOI raises "serious procedural and due process
concerns."17 Charter "associates itself" with a letter submitted by the National Cable &
Telecommunications Association ("NCTA").18 According to that letter, the Commission has violated the
Paperwork Reduction Act by sending similar inquiries to 10 or more persons without first seeking notice
and comment and approval by the Office of Management and Budget. We disagree. The LOI complies
with the Paperwork Reduction Act because it is part of a targeted investigation of "specific individuals or
entities," namely those companies that have been the subject of consumer complaints filed with the
Commission.19
7.
Charter alleges that it could not have responded fully to the LOI because the amount of
time allowed for the preparation of the company's LOI response was too brief.20 Certain complaints


12 47 U.S.C. 403.
13 47 C.F.R. 76.939 ("Cable operators shall comply with ... the Commission's requests for information, orders,
and decisions.").
14 See 47 C.F.R. 1.17.
15 See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589, 7599-7600 23-28 (2002) (ordering
$100,000 forfeiture for egregious and intentional failure to certify the response to a Bureau inquiry) ("SBC
Forfeiture Order
"); Digital Antenna, Inc., Notice of Apparent Liability for Forfeiture and Order, 23 FCC Rcd 7600,
7602 (Spectr. Enf. Div., Enf. Bur. 2008) (proposing $11,000 forfeiture for failure to provide a complete response to
an LOI); BigZoo.Com Corporation, Forfeiture Order, 20 FCC Rcd 3954 (Enf. Bur. 2005) (ordering $20,000
forfeiture for failure to respond to an LOI).
16 47 C.F.R. 0.111(a)(16) (granting the Enforcement Bureau authority to "[i]dentify and analyze complaint
information, conduct investigations, conduct external audits and collect information, including pursuant to sections
218, 220, 308(b), 403 and 409(e) through (k) of the Communications Act, in connection with complaints, on its own
initiative or upon request of another Bureau or Office."). See also 47 C.F.R. 0.111(a)(13) (Enforcement Bureau
has authority to "[r]esolve complaints regarding multichannel video and cable television service under part 76 of the
Commission's rules"); 0.311 (general delegated authority for Enforcement Bureau).
17 LOI Response at 3.
18 Id. at 3; Letter from Kyle McSlarrow, President and CEO, National Cable & Telecommunications Association, to
Chairman Kevin J. Martin and Commissioners Michael J. Copps, Jonathan S. Adelstein, Deborah Taylor Tate, and
Robert M. McDowell, Federal Communications Commission at 5-7 (Nov. 12, 2008).
19 See 44 U.S.C. 3518(c)(1)(B)(ii); 5 C.F.R. 1320.4(a)(2) (cited in Letter from Matthew Berry, General Counsel,
Federal Communications Commission, to Matthew A. Brill, Counsel for Time Warner Cable, Inc. at 1 (Nov. 12,
2008) ("Berry Letter")). We do not intend to suggest that the Commission may only commence an investigation in
response to consumer complaints. As Section 403 of the Act makes clear, the Commission also may institute an
investigation on its own motion. See 47 U.S.C. 403 ("The Commission shall have full authority and power at any
time to institute an inquiry, on its own motion, in any case and as to any matter or thing concerning which complaint
is authorized to be made....").
20 LOI Response at 3, 68.
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received by the Commission regarding the migration of analog programming to a digital tier, however,
allege that cable operators are falsely linking the programming changes with the digital television
transition. Because of the strong public interest in avoiding confusion about the transition and the rapidly
approaching transition date, the Bureau determined that two weeks was an appropriate deadline and we
conclude that two weeks was a reasonable deadline. Charter does not dispute that this decision was
within our discretion. Charter was obligated to provide the requested information by our deadline.
Moreover, we note that since it submitted its LOI response and while this matters remains under
investigation by the Bureau, Charter has neither contacted the Bureau about its response nor provided any
supplemental information. We find therefore that Charter's failure to fully respond to the Bureau's
inquiry constitutes an apparent willful21 violation of a Commission order and Section 76.939 of the Rules.

B.

Proposed Forfeiture

8.
We conclude under applicable standards set forth in the Act, that Charter is apparently
liable for forfeiture for its apparent willful violation of a Commission Order and Section 76.939 of the
Rules. Under Section 503(b)(1)(B) of the Act, any person who is determined by the Commission to have
willfully or repeatedly failed to comply with any provision of the Act or any rule, regulation, or order
issued by the Commission shall be liable to the United States for a forfeiture penalty.22 To impose such a
forfeiture penalty, the Commission must issue a notice of apparent liability and the person against whom
such notice has been issued must have an opportunity to show, in writing, why no such forfeiture penalty
should be imposed.23 The Commission will then issue a forfeiture if it finds by a preponderance of the
evidence that the person has violated the Act or a Commission rule.24 We conclude under this standard
that Charter is apparently liable for forfeiture for its apparent willful violation of a Commission Order and
Section 76.939 of the Rules.
9.
Under Section 503(b)(2)(A) of the Act,25 we may assess a cable operator a forfeiture of
up to $37,500 for each violation, or for each day of a continuing violation up to a maximum of $375,000
for a single act or failure to act. In exercising such authority, we are required to take into account "the


21 Section 312(f)(1) of the Act defines willful as "the conscious and deliberate commission or omission of [any] act,
irrespective of any intent to violate" the law. 47 U.S.C. 312(f)(1). The legislative history of Section 312(f)(1) of
the Act indicates that this definition of willful applies to both Sections 312 and 503(b) of the Act, H.R. Rep. No. 97-
765, 97th Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the term in the Section 503(b) context.
See, e.g., Southern California Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387-88 5
(1991) ("Southern California Broadcasting").
22 47 U.S.C. 503(b)(1)(B); 47 C.F.R. 1.80(a)(1).
23 47 U.S.C. 503(b); 47 C.F.R. 1.80(f).
24 See SBC Forfeiture Order, 17 FCC Rcd at 7591.
25 47 U.S.C. 503(b)(2)(A). The Commission has amended Section 1.80(b)(3) of the Rules, 47 C.F.R. 1.80(b)(3),
three times to increase the maximum forfeiture amounts, in accordance with the inflation adjustment requirements
contained in the Debt Collection Improvement Act of 1996, 28 U.S.C. 2461. See Amendment of Section 1.80 of
the Commission's Rules and Adjustment of Forfeiture Maxima to Reflect Inflation
, 23 FCC Rcd 9845 (2008)
(adjusting the maximum statutory amounts for broadcasters and cable operators from $32,500/$325,000 to
$37,500/$375,000); Amendment of Section 1.80 of the Commission's Rules and Adjustment of Forfeiture Maxima to
Reflect Inflation,
Order, 19 FCC Rcd 10945 (2004) (adjusting the maximum statutory amounts for broadcasters and
cable operators from $27,500/$300,000 to $32,500/$325,000); Amendment of Section 1.80 of the Commission's
Rules and Adjustment of Forfeiture Maxima to Reflect Inflation,
Order, 15 FCC Rcd 18221 (2000) (adjusting the
maximum statutory amounts for broadcasters and cable operators from $25,000/$250,000 to $27,500/$300,000).
The most recent inflation adjustment took effect September 2, 2008 and applies to violations that occur after that
date. See 73 Fed. Reg. 44663-5. Charter's apparent violations occurred after September 2, 2008 and are therefore
subject to the higher forfeiture limits.
4

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nature, circumstances, extent, and gravity of the violation 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."26
10.
Section 1.80 of the Rules and the Commission's Forfeiture Policy Statement establish a
base forfeiture amount of four thousand dollars ($4,000) for failure to respond to Commission
communications.27 We find that Charter's failure to respond fully to the LOI in the circumstances
presented here warrants a significant increase to this base amount. Misconduct of this type exhibits
contempt for the Commission's authority and threatens to compromise the Commission's ability to
adequately investigate violations of its rules. Prompt and full responses to Bureau inquiry letters are
essential to the Commission's enforcement function. In this case, Charter's apparent violations have
delayed our investigation and inhibited our ability to examine allegations raised in consumer complaints
and also potentially touching on an area of critical importance -- the DTV transition. We further note that
Charter failed to provide a full and complete LOI response even after receiving a specific warning from
the Commission's General Counsel that such actions could be subject to enforcement penalties.28
11.
Based on these facts, we therefore propose a twenty-five thousand dollar ($25,000)
forfeiture against Charter for failing to respond fully to Commission communications. This forfeiture
amount is consistent with recent precedent in similar cases, where companies failed to provide complete
responses to Bureau inquiries concerning compliance with the Commission's Rules despite evidence that
the LOIs had been received.29
12.
We also direct Charter to respond fully to the October 30, 2008 LOI within ten (10) days
of the release of this Notice of Apparent Liability for Forfeiture and Order. Failure to do so may
constitute an additional violation subjecting Charter to further penalties, including potentially higher
monetary forfeitures.30

IV.

ORDERING CLAUSES

13.
Accordingly,

IT IS ORDERED

that, pursuant to Section 503(b) of the Act, and Section
1.80 of the Rules, and the authority delegated by Sections 0.111 and 0.311 of the Commissions Rules,
Charter Communications, Inc. is

NOTIFIED

of its

APPARENT LIABILITY FOR A FORFEITURE

in the amount of twenty-five thousand dollars ($25,000) for its willful violation of a Commission Order
and Section 76.939 of the Rules.
14.

IT IS FURTHER ORDERED

that, pursuant to Section 1.80 of the Rules, within thirty
(30) days of the release date of this Notice of Apparent Liability for Forfeiture and Order, Charter

SHALL PAY

the full amount of the proposed forfeiture or

SHALL FILE

a written statement seeking
reduction or cancellation of the proposed forfeiture.
15.

IT IS FURTHER ORDERED

that, pursuant to sections 1, 4(i), 4(j), 403 of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 403, Charter shall fully
respond to the October 30, 2008 Letter of Inquiry sent by the Enforcement Bureau in the manner


26 47 U.S.C. 503(b)(2)(E). See also 47 C.F.R. 1.80(b)(4), Note to paragraph (b)(4): Section II. Adjustment
Criteria for Section 503 Forfeitures.
27 See 47 C.F.R. 1.80(b)(4); The Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the
Rules to Incorporate the Forfeiture Guideline
s, Report and Order, 12 FCC Rcd. 17087 (1997), recon. denied, 15
FCC Rcd. 303 (1999).
28 Berry Letter at 2.
29 See supra note 14.
30 We do not decide in this NAL whether the failure to respond to an LOI constitutes a continuing violation.
5

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described by that Letter of Inquiry within ten (10) days of the release of this Notice of Apparent Liability
and Order.
16.
Payment of the forfeiture must be made by check or similar instrument, payable to the
order of the Federal Communications Commission. The payment must include the NAL/Account
Number and FRN Number referenced above. Payment by check or money order may be mailed to
Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000. Payment by
overnight mail may be sent to U.S. Bank Government Lockbox #979088, SL-MO-C2-GL, 1005
Convention Plaza, St. Louis, MO 63101. Payment by wire transfer may be made to ABA Number
021030004, receiving bank TREAS/NYC, and account number 27000001. For payment by credit card,
an FCC Form 159 (Remittance Advice) must be submitted. When completing the FCC Form 159, enter
the NAL/Account number in block number 23A (call sign/other ID), and enter the letters "FORF" in
block number 24A (payment type code). Requests for full payment under an installment plan should be
sent to: Chief Financial Officer -- Financial Operations, 445 12th Street, S.W., Room 1-A625,
Washington, D.C. 20554. Please contact the Financial Operations Group Help Desk at 1-877-480-3201
or Email: ARINQUIRIES@fcc.gov with any questions regarding payment procedures. Charter will also
send electronic notification on the date said payment is made to JoAnn.Lucanik@fcc.gov and
Thomas.Fitz-Gibbon@fcc.gov.
17.
The response, if any, must be mailed to the Office of the Secretary, Federal
Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554, ATTN: Enforcement
Bureau Spectrum Enforcement Division, and must include the NAL/Acct. No. referenced in the caption.
The response should also be e-mailed to JoAnn Lucanik, Deputy Chief, Spectrum Enforcement Division,
Enforcement Bureau, FCC, at JoAnn.Lucanik@fcc.gov and Thomas Fitz-Gibbon, Esq., Spectrum
Enforcement Division, FCC, at Thomas.Fitz-Gibbon@fcc.gov.
18.
The Commission will not consider reducing or canceling a forfeiture in response to a
claim of inability to pay unless the petitioner submits: (1) federal tax returns for the most recent three-
year period; (2) financial statements prepared according to generally accepted accounting practices; or (3)
some other reliable and objective documentation that accurately reflects the petitioner's current financial
status. Any claim of inability to pay must specifically identify the basis for the claim by reference to the
financial documentation submitted.
19.

IT IS FURTHER ORDERED

that a copy of this Notice of Apparent Liability for
Forfeiture and Order shall be sent by first class mail and certified mail return receipt requested to Megan
M. Delany, Vice President and Senior Counsel, Federal Government Relations, Charter Communications,
Inc., 1919 Pennsylvania Avenue, N.W., Washington, D.C., 20006.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
6

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