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Suddenlink Communications, Inc

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Released: December 31, 1969

Federal Communications Commission

DA 09-84

Before the

Federal Communications Commission

Washington, D.C. 20554

)
In the Matter of
)
File No. EB-08-SE-1077
)
NAL/Acct. No. 200932100014
Suddenlink Communications, Inc.
)
FRN 0018147504
)

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
Suddenlink Communications, Inc. ("Suddenlink") 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 Suddenlink is apparently liable for a forfeiture in the amount of twenty-five thousand
dollars ($25,000). We also order Suddenlink to respond fully to the LOI within ten (10) days of release of
this NAL. If Suddenlink again fails to submit a complete response, it will be subject to further
enforcement action.

II.

BACKGROUND

2.
In response to consumer complaints against Suddenlink, 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
Suddenlink 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 Suddenlink's charges for digital set-top
boxes as well as information regarding Suddenlink's subscriber rates and the rates it pays to video
programmers.
3.
In its response to the LOI, Suddenlink fails to answer most of the inquiries set forth in the
LOI except in the most general terms.4 For example, Suddenlink provides a table containing information
responsive to our inquiry in Question 1 regarding the dates and nature of its analog-to-digital channel


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 Michael J. Zarrilli, Vice President, Government Relations and Senior Counsel,
Suddenlink Communications, Inc. (Oct. 30, 2008) ("LOI").
4 Letter from Michael J. Zarrilli, Vice President, Government Relations and Senior Counsel, Suddenlink
Communications, Inc. to Deborah Broderson, Esq., Spectrum Enforcement Division, Enforcement Bureau, Federal
Communications Commission (Nov. 13, 2008) ("LOI Response").

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DA 09-84

changes; however, it claims that it lacked the ability to respond directly to questions regarding related
changes in rates to consumers, because it evaluates service rate changes on an annual basis.5 Similarly,
Suddenlink represents that it has a policy to provide thirty (30) days written notice to subscribers before a
channel is removed from a service tier, and that this policy was followed for each of the re-tierings at
issue, but did not respond to the related inquiry in Question 1 regarding the ability of subscribers to
change their service at no charge. In response to Question 2, Suddenlink acknowledges that subscribers
might require additional equipment as a result of channel changes, but does not respond to the remainder
of the inquiries included in this question, including the model numbers of equipment that subscribers
could use to continue to access newly-digitized channels, and whether equipment of a different
manufacture could also be used by subscribers. In addition, Suddenlink fails to provide copies of any
notices or other documents that were sent to subscribers to inform them of analog-to-digital changes
(Questions 3 and 5) or copies of any explanation that Suddenlink sent to Local Franchising Authorities
(Question 4) regarding such changes.6 Suddenlink also declines to provide any information in response to
Question 8, which seeks information regarding fees for each affected channel collected from subscribers,
and the per-subscriber fee related to each affected channel paid by Suddenlink to the video programming
distributor responsible for that channel.
4.
Suddenlink admits that it did not respond fully to the LOI. Although Suddenlink states
that it "has no desire to violate Commission regulations," it claims that the two week time period allowed
in which to respond to these questions was inadequate.7 Suddenlink also contends that the LOI is
unenforceable because it does not comply with the Paperwork Reduction Act ("PRA").8 Suddenlink asks
the Commission to "reconsider the current LOI procedure and ... engage in a cooperative dialog with the
cable industry regarding the conversion practices now at issue."9 Finally, Suddenlink requests copies of
any complaints that have been submitted to the Commission, "to understand the basis for the LOI,
facilitate our response, and enable us to more meaningfully address potential Bureau concerns."10

III.

DISCUSSION

A.

Failure to Respond Fully to the LOI

5.
We find that Suddenlink's failure to fully respond to the Bureau's inquiry constitutes an
apparent willful11 violation of a Commission Order and Section 76.939 of the Rules. The Bureau directed
Suddenlink 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


5 Id. at 3.
6 Suddenlink does affirmatively state that "[n]one of the service tiers involved in Suddenlink's analog to digital
conversions are rate regulated," and "relatively few of Suddenlink's cable systems are subject to active rate
regulation by local franchising authorities." Id.
7 Id. at 2.
8 Id.
9 Id., citing to Letter from Kyle McSlarrow, National Cable & Telecommunications Assn., to Chairman Kevin J.
Martin and Commissioners Michael J. Copps, Jonathan S. Adelstein, Deborah Taylor Tate and Robert M. McDowell
(Nov. 12, 2008) ("NCTA Letter").
10 Id.
11 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").
2

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DA 09-84

evaluate whether Suddenlink violated Commission rules. Suddenlink received the LOI but has failed to
provide a full and complete response.
6.
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."12 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."13 Section 403 grants the Commission "full authority and
power to institute an inquiry, on its own motion ... relating to the enforcement of any of the provisions of
this Act."14 Pursuant to Section 76.939 of the Rules, a cable operator must comply with FCC requests for
information, orders, and decisions.15 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.16 Lastly, numerous FCC decisions have reaffirmed the
Commission's authority to investigate potential misconduct and punish those that disregard FCC
inquiries. 17 The Commission delegated this authority to the Enforcement Bureau in Section 0.111(a)(16)
of the Rules.18
7.
We reject Suddenlink's contentions that it was not obligated to respond fully and
completely to the Bureau's inquiry because it believes the LOI violates the PRA and is therefore
unenforceable.19 According to Suddenlink and a letter submitted by NCTA, the Commission has violated
the PRA by sending similar inquiries to 10 or more persons without first seeking notice and comment and
approval by the Office of Management and Budget.20 We disagree. The LOI complies with the PRA


12 47 U.S.C. 154(i).
13 47 U.S.C. 154(j).
14 47 U.S.C. 403.
15 47 C.F.R. 76.939 ("Cable operators shall comply with ... the Commission's requests for information, orders,
and decisions.").
16 See 47 C.F.R. 1.17.
17 See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589, 7599-7600 23-28 (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 respond 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).
18 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).
19 LOI Response at 2. Prior to the due date for Suddenlink's LOI Response, the Commission's General Counsel
advised the company that the LOI complied with the Paperwork Reduction Act, warned of enforcement action if the
company failed to comply with the LOI, and offered Suddenlink the opportunity to submit any highly confidential
information pursuant to a protective order. See Letter from Matthew Berry, General Counsel, Federal
Communications Commission, to Michael J. Zarrilli, Vice President, Government Relations and Senior Counsel,
Suddenlink Communications, Inc. (Nov. 12, 2008) ("Berry Letter").
20 Id.; NCTA Letter at 5-7.
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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.21
8.
Suddenlink 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.22 Certain complaints
received by the Commission regarding the migration of analog programming to a digital tier, however,
alleged that cable operators were 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. Suddenlink does not dispute that this decision was
within our discretion. Thus, Suddenlink was obligated to provide the requested information by our
deadline. Moreover, we note that since it submitted its LOI response and while this matter remains under
investigation by the Bureau, Suddenlink has neither contacted the Bureau about its response nor provided
any supplemental information. We find therefore that Suddenlink's failure to fully respond to the
Bureau's inquiry constitutes an apparent willful23 violation of a Commission Order and Section 76.939 of
the Rules.

B.

Proposed Forfeiture

9.
We conclude under applicable standards set forth in the Act, that Suddenlink 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.24 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.25 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.26 We
conclude under this standard that Suddenlink is apparently liable for forfeiture for its apparent willful
violation of a Commission Order and Section 76.939 of the Rules.


21 See 44 U.S.C. 3518(c)(1)(B)(ii); 5 C.F.R. 1320(a)(2) (cited in Berry Letter at 1). 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...").
22 LOI Response at 2.
23 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").
24 47 U.S.C. 503(b)(1)(B); 47 C.F.R. 1.80(a)(1).
25 47 U.S.C. 503(b); 47 C.F.R. 1.80(f).
26 See, e.g., SBC Forfeiture Order, 17 FCC Rcd at 7591.
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10.
Under Section 503(b)(2)(A) of the Act,27 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
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."28
11.
Section 1.80 of the Rules and the Commission's Forfeiture Policy Statement establish a
base forfeiture amount of $4,000 for failure to respond to Commission communications.29 We find that
Suddenlink'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, Suddenlink'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 note that Suddenlink 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.30
12.
Based on these facts, we therefore propose a twenty-five thousand dollar ($25,000)
forfeiture against Suddenlink for failing to respond fully to Commission communications. This forfeiture
amount is consistent with precedent in similar cases, where companies failed to provide responses to
Bureau inquiries concerning compliance with the Commission's Rules despite evidence that the LOIs had
been received.31
13.
We also direct Suddenlink 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 Suddenlink to further penalties, including potentially higher
monetary forfeitures.32


27 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. Suddenlink's apparent violations occurred after September 2, 2008 and are
therefore subject to the higher forfeiture limits.
28 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.
29 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).
30 Berry Letter at 2.
31 See supra note 17.
32 We do not decide in this NAL whether the failure to respond to an LOI constitutes a continuing violation.
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IV.

ORDERING CLAUSES

14.
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,
Suddenlink 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.
15.

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, Suddenlink

SHALL PAY

the full amount of the proposed forfeiture or

SHALL FILE

a written statement seeking
reduction or cancellation of the proposed forfeiture.
16.

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, Suddenlink shall fully
respond to the October 30, 2008 Letter of Inquiry sent by the Enforcement Bureau in the manner
described by that Letter of Inquiry within ten (10) days of the release of this Notice of Apparent Liability
and Order.
17.
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. Suddenlink will
also send electronic notification on the date said payment is made to JoAnn Lucanik at
JoAnn.Lucanik@fcc.gov and to Deborah Broderson at Deborah.Broderson@fcc.gov.
18.
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 to Deborah Broderson, Esq., Spectrum
Enforcement Division, FCC, at Deborah.Broderson@fcc.gov.
19.
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.
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20.

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 Michael
J. Zarrilli, Vice President, Government Relations and Senior Counsel, Suddenlink Communications, Inc.,
12444 Powerscourt Drive, Suite 140, St. Louis, MO 63131.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
7

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