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Cox Communications

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Released: December 31, 1969

Federal Communications Commission

DA 09-131

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
) File Number EB-09-SE-010
)
Cox Communications, Inc.
) NAL/Acct. No.200932100032
)
) FRN 0016034050
)

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 and Order"),
we find that Cox Communications, Inc.'s cable system serving Phoenix, Arizona ("Cox" or
"Company") apparently willfully violated Section 76.1603(b) of the Commission's Rules
("Rules").1 Specifically, Cox failed to provide the requisite thirty (30) days advance written
notice to its customers, before implementing a change in rates, programming services or channel
positions as required under the Rules. We conclude, pursuant to Section 503(b) of the
Communications Act of 1934, as amended ("Act"),2 that Cox is apparently liable for a forfeiture in
the amount of seven thousand, five hundred dollars ($7,500). We also order Cox, within ninety
(90) days of this NAL and Order, to issue refunds to the complainant affected by the change in
rates, programming services or channel position as explained more fully below.

II.

BACKGROUND

2.
On March 20, 2008, the Commission received a complaint from Phoenix,
Arizona, asserting that "TCM was no longer a station that Cox provided ... in Arizona unless we
had digital cable."3 According to the Complainant, this change was made without prior notice.


1 47 C.F.R. 76.1603(b).
2 47 U.S.C. 503(b).
3 FCC Complaint CIMS00000836454.

Federal Communications Commission

DA 09-131

III.

DISCUSSION

A.

Cox Apparently Violated Section 76.1603(b) By Failing To Provide Proper
Notice to its Customers.

3.
Based on the record before us, we find that Cox apparently willfully violated
Section 76.1603(b) by failing to notify its customers before implementing a change in rates,
programming services or channel positions as required under the Rules.
4.
Section 76.1603(b) of the Rules provides, in relevant part, as follows:
Customers will be notified of any changes in rates, programming services or channel
positions as soon as possible in writing. Notice must be given to subscribers a minimum
of thirty (30) days in advance of such changes if the change is within the control of the
cable operator. In addition, the cable operator shall notify subscribers 30 days in advance
of any significant changes in the other information required by 76.1602.4
5.
We find that the migration of each channel constitutes a change in rates,
programming services or channel positions under the Rules. We also find that the migration was
a change within the control of the Cox because we are unaware of external forces that would
have required the Cox to make such a change, particularly without giving 30 days notice. In our
Letter of Inquiry issued to Cox on October 30, 2008,5 we asked for a range of information related
to the migration of channels, including evidence that consumers were provided with the notice
required under our rules. Unfortunately, Cox failed to produce any evidence on this point in
response to our request, including any evidence that the requisite notice was provided of the
migration that is the subject of this NAL and Order.
6.
Therefore, for the reasons stated above, we find that Cox apparently violated
Section 76.1603(b) by failing to provide the Complainant at least thirty (30) days notice of a
change in rates, programming services or channel positions.

B.

Forfeiture Calculation

7.
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.6 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.7 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.8 Based on the analysis set forth below, we


4 47 C.F.R. 76.1603(b).
5
Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal
Communications Commission to Gary S. Lutzker, Counsel for Cox Communications, Inc. (Oct. 30, 2008) ("LOI").
6 47 U.S.C. 503(b)(1)(B); 47 C.F.R. 1.80(a)(1).
7 47 U.S.C. 503(b); 47 C.F.R. 1.80(f).
8 See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589, 7591 (2002).
2

Federal Communications Commission

DA 09-131

conclude that Cox is apparently liable for a forfeiture in the amount of seven thousand, five
hundred dollars ($7,500) for its willful violations of Section 76.1603(b) of the Rules.
8.
Under Section 503(b)(2)(A) and Section 1.80(b)(1) of the Commission's Rules,9
we may assess a cable television operator a forfeiture of up to $32,000 for each violation or each
day of a continuing violation, up to a statutory maximum forfeiture of $325,000 for any single
continuing violation. In exercising such authority, we are required to take into account "the
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."10
9.
The Commission's Forfeiture Policy Statement11 and Section 1.80 of the Rules do
not establish a specific base forfeiture for violation of Section 76.1603's notice requirements.12
Based on the totality of circumstances here and the Commission's past precedent, we find that
$7,500 is an appropriate base forfeiture for the failure to notify its customers of Cox's change in
service.13 Accordingly, we conclude that Cox is apparently liable for a $7,500 forfeiture for its
willful violation of Section 76.1603(c) of the Rules.

C.

Cox Must Issue Refund To Customer Harmed By Its Failure To Provide
Notice.

10.
Cox's change in rates, programming services or channel positions without the
required notice has harmed its customers who purchased services based on the reasonable
assumption that Cox would not be moving significant portions of programming from standard
service tiers to digital cable tiers. In effect, Cox's movement of programming to a digital tier


9 47 U.S.C. 503(b)(2)(A), 47 C.F.R. 1.80(b)(1). The Commission has repeatedly amended Section 1.80(b)(1) of
the Rules 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. Most recently, the Commission
raised the maximum forfeitures applicable to cable operators, broadcast licensees, and applicants for such authority
from $32,500 to $37,500 for a single violation, and from $325,000 to $375,000 for a continuing violation. See
Inflation Adjustment of Maximum Forfeiture Penalties, 73 Fed. Reg. 44663, 44664 (July 31, 2008). The new
forfeiture limits will take effect September 2, 2008 and do not apply to this case.
10 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.
11 See The Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the
Forfeiture Guidelines,
Report and Order, 12 FCC Rcd 17087, 17115 (1997), recon. denied, 15 FCC Rcd 303 (1999)
("Forfeiture Policy Statement").
12 The Commission has substantial discretion, however, in proposing forfeitures. See, e.g., InPhonic, Inc., Order of
Forfeiture and Further Notice of Apparent Liability, 22 FCC Rcd 8689, 8699 (2007); Globcom, Inc. d/b/a Globcom
Global Commun.,
Order of Forfeiture, 21 FCC Rcd 4710, 4723-24 (2006). We may apply the base forfeiture
amounts described in the Forfeiture Policy Statement and the Commission's rules, or we may depart from them
altogether as the circumstances demand See 47 C.F.R. 1.80(b)(4) ("The Commission and its staff may use these
guidelines in particular cases [, and] 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.")
(emphasis added).
13 See also Northland Cable Television, Inc., Memorandum Opinion and Order and Notice of Apparent Liability for
Forfeiture, 23 FCC Rcd 7865 (Media Bur. 2008) (proposing $20,000 forfeiture for apparent violations of Section
76.1603 and other rules); Northland Cable Television, Inc., Memorandum Opinion and Order and Notice of
Apparent Liability for Forfeiture, 23 FCC Rcd 7872 (Media Bur. 2008) (same).
3

Federal Communications Commission

DA 09-131

without any reduction in subscriber fees has substantially diminished the value of the
programming Complainant receives. The Complainant must now pay the same monthly rate for
cable service even though Complainant can view significantly fewer channels.
11.
Thus, we order Cox, within ninety (90) days of this NAL and Order, to issue
refunds to affected subscribers who did not receive the required notice as of the date of the
programming change. Specifically, Cox must provide refunds as follows:
Cox must refund the customer's subscriber fees of all affected customers who did
not receive the required notice based on the diminished value of their service
following the movement of programming without proper notice by $0.10 per
channel moved per month and reduce complainant's rates on a going-forward basis
accordingly until the notice required under our rules has been provided.14
12.
In addition, we order Cox to submit to the Bureau within 30 days of the issuance
of refunds a report in the form of a letter advising the Bureau that such refunds have been paid
and that affected subscribers' fees have been reduced as directed.

IV.

ORDERING CLAUSES

13.

Accordingly, IT IS ORDERED

, pursuant to section 503(b) of the
Communications Act of 1934, as amended, 47 U.S.C. S: 503(b)(5), and section 1.80 of the
Commission's rules, 47 C.F.R. S: 1.80, and under the authority delegated by sections 0.111 and
0.311 of the Commission's rules,47 C.F.R. S: 0.111, 0.311, Cox is NOTIFIED of its APPARENT
LIABILITY FOR A FORFEITURE in the amount of seven thousand five hundred dollars
($7,500) for willful violation of Section 76.1603(b) of the Rules.
14.

IT IS FURTHER ORDERED

that, pursuant to Section 1.80 of the Rules, within
thirty days of the release date of this Notice of Apparent Liability for Forfeiture and Order, Cox
Communications, Inc.

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), 601, and
629 of the Communications Act of 1934, as amended 47 U.S.C. 151, 154(i), 154(j), 521, 549,
Cox must take the steps set forth in paragraphs 10, 11, and 12 of this NAL 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


14 Thus, for example, if Cox migrated a channel and did not provide proper notice for nine months, it must refund
$0.90 to each affected customer. $0.10 is our best estimate of the relevant license fee per channel. We note that
Cox did not provide actual per channel license fees as required by the LOI. The Bureau will reconsider the
appropriate license fee per channel should Cox submit a petition for reconsideration that includes evidence that the
license fees of the affected channels are lower than $0.10 per month.
4

Federal Communications Commission

DA 09-131

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. Oceanic
will also send electronic notification on the date said payment is made to Kathy.Berthot@fcc.gov
and to JoAnnLucanik@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.
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 Kathleen Q. Abernathy, Esq., Counsel for Cox Communications, Inc., Wilkinson
Barker Knauer LLP, 2300 N Street, NW, Suite 700, Washington, D.C. 20037.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
5

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