Enforcement Fines: The Collection Process

The Enforcement Bureau has four guiding mandates: protect consumers, safeguard competition, secure communications networks, and police the integrity of Commission funds, programs and services. To better protect the public and strengthen accountability, the Bureau has made it a priority to streamline its processes, reduce its backlogs and provide more transparency into its enforcement activities. Recently, some questions were raised about the rate at which enforcement fines are collected, so we thought it would be helpful to offer a primer on the enforcement process.

Statutory Authority

While the Bureau always strives to conclude enforcement cases efficiently—and has made significant progress in doing so over the last two years— the Bureau follows a mandated process for taking and finalizing enforcement actions in order to protect the integrity of the investigations and ensure fairness to the companies involved. This process, while lengthy in nature, is required by law and ensures due process by providing notice of possible violations and an opportunity for companies to respond.

In setting the amount of the proposed fine, the Communications Act requires the Commission to consider specific criteria: "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." In addition, the Commission follows forfeiture guidelines—established in 1997— that set base penalties for certain violations and identify criteria that the Commission considers when determining the appropriate penalty in any given case. Under these guidelines, the Commission may adjust a forfeiture upward for violations that are egregious, intentional, or repeated, or that cause substantial harm or generate substantial economic gain for the violator.

Notice: Issuing an NAL

A proposed fine (technically called a "Notice of Apparent Liability for Forfeiture") is the first formal step toward a potential enforcement action. It informs the company of the alleged unlawful activity, establishes the maximum penalty that could be assessed for that violation, and provides the company with an opportunity to contest the allegations. At this stage of the process, the Commission has notified the company of its proposed fine. The proposed fine is not owed or due to the Commission.

Review: Due Process

Due process and the fair enforcement of the law demand that companies have an opportunity to make their case and fully respond to the NAL. The Bureau takes its responsibility seriously to thoroughly review all responses, conduct any additional investigation necessary, and make any adjustments to the case as appropriate – including reducing or even cancelling a fine if warranted.

Complete: Settlement, Collection, Compliance

In some cases, the Enforcement Bureau reaches a mutually acceptable settlement with the company, which may include consumer redress and compliance requirements. If a settlement is not achieved, however, the Commission, after considering the full legal and factual record, may vote to assess a fine (formally known as a "Forfeiture Order").

Even after the Forfeiture Order, a company may continue to challenge an enforcement action before the Commission. Once it has exhausted its right to challenge an enforcement action before the Commission, however, a company is required to pay the fine imposed in the Forfeiture Order. If the company does not do so within the required time, the fine is considered a debt to the United States and is referred to the U.S. Department of Justice for a collection action.

Increasing efficiency, Decreasing the backlog

Since 2013, the Commission has steadily improved its efficiency in bringing proposed fines to conclusion, usually through settlement or a Commission-level decision to issue a final fine. In fact, the Bureau has collected 86 percent of the actual fines it has imposed over the last two years, a substantial increase over previous years. During each of the last three years, the Commission has collected more than 80 percent of the money owed in imposed fines. By comparison, in 2011, just 54.9 percent of the money owed in issued fines was collected. In 2015 alone, the Bureau has collected nearly $100 million in fines to the U.S. Treasury.

In addition, the Bureau has made great strides in providing timely conclusions to cases. For example, NALs issued in 2011 took an average of 19 months to be resolved via forfeiture order, whereas NALs issued in 2014 took an average of eight months to be resolved via forfeiture order— a near 60 percent improvement in speed.

There are, of course, special cases that take more time because they require coordination with other government entities. Recently, the Commission has received questions about the status of a couple of enforcement actions involving proposed fines. For example, certain proposed fines related to the Lifeline program have been referred to the Commission's Inspector General (IG) for review. The IG is also tasked with reviewing potential misuse of Universal Service Funds and works with the Department of Justice on these matters to ensure similar cases are handled consistently.

Another example is a proposed fine against a Chinese company for selling illegal jammers. As an international case, the Commission must comply with international treaties governing legal process between the countries. The Commission is actively working with the Chinese and U.S. governments to resolve this matter as expeditiously as possible.

American consumers rely on the Enforcement Bureau to protect them and our country's networks. Companies rely on the Enforcement Bureau to enforce the rules of the road and maintain a consistent and fair system. Whether it's protecting consumer data, stopping Wi-Fi blocking, enforcing robocall rules or preventing cramming and slamming, the Enforcement Bureau will not hesitate to protect consumers' interests and the networks we all rely on.