FCC Enforcement Bureau Proposes $163,912 Fine Against Internet Service Provider for Failure to File Form 477 and Inaccurate Data

On Wednesday, the Federal Communications Commission (“Commission” or “FCC”) issued a Notice of Apparent Liability and proposed that Barrier Communications Corporation (“BarrierFree”) pay a $163,912 fine for its failure to file the agency’s Form 477 data on broadband deployment, and for submitting incorrect data.

The proposed fine in the Notice of Apparent Liability (“NAL”) is one of the largest-ever fines for non-compliance with Form 477 requirements. Additionally, the agency’s Enforcement Bureau said that the $163,912 it was seeking in the NAL was the maximum penalty it could obtain under the Statute of Limitations. Of the 27 times that BarrierFree failed to file Form 477, the Commission said, 26 of those times fell outside the Statute.

However, in a partial dissent, Commissioner Jessica Rosenworcel differed with the Commission’s interpretation that the penalty was the maximum available. She said the Commission could treat the failure to file Form 477 as an ongoing violation until it is cured. “Why wouldn’t we do so here?” Rosenworcel asked. “Nothing in the law prevents us from adjusting our approach now to align it with how the agency addresses other filing failures.”

Still, the extent of the proposed penalty appears to be motivated by “the repeated willful, and egregious” errors of BarrierFree’s. “The company vastly overstated its broadband deployment, its broadband subscribership or both, making it appear to the commission and the public that broadband service was readily available in communities where BarrierFree did not offer service,” the Commission wrote in paragraph 2 of the NAL.

Although in business since 2004, BarrierFree did not file Form 477 until March 2018.

But in that Form 477 filing, BarrierFree made major mistakes. At one point, the company claimed that it offered service to 61 million Americans, including every census block within seven states. The company is in fact a small wireless provider on Fire Island, in Suffolk County, New York.

The Commission’s move against the company also highlights the increasing importance that the FCC is placing upon submitting broadband data, and compliance with its rules for submitting that broadband information correctly.

These semi-annual Form 477 submissions form the backbone of the Commission’s data-collection efforts. Prompt and correct submission of information on Form 477 is one of the key offerings of The Commpliance Group. Additionally, the FCC is undergoing a process that will require the submission of a new and increasingly detailed set of broadband data called the Digital Opportunity Data Collection.

BarrierFree’s errors on its Form 477 came to public light in early 2019, when the FCC publicized the agency’s progress in closing the digital divide. In retrospect, this was based upon clearly erroneous data, including that of BarrierFree.

“Considering that BarrierFree has an extensive history of prior offenses, including dozens of violations that exceed the statute of limitations, is particularly culpable, and shows a consistent disregard for the Commission’s rules, an upward adjustment is justified,” the Commission wrote in paragraph 42 of the NAL. “If such inaccurate deployment or subscription data were included in final versions of Commission reports and analysis, the results would be a significant distortion of actual deployment and subscription figures for the United States. In fact, BarrierFree’s incorrect deployment data had real and detrimental effect on preliminary Commission analysis in a draft broadband data report. Although ultimately, the draft was revised to remove BarrierFree’s incorrect data.”

Rosenworcel said that BarrierFree’s early errors “should have set off alarm bells,” adding that “when an outside party pointed out this was based on fraudulent information, the FCC was forced to revise” the claims it had made by using the incorrect data from BarrierFree in the draft report.

Of the proposed penalty, half stems from either its failure to making filings, or for erroneous filings. The other half stems from incomplete or incorrect information in response to an Enforcement Bureau investigation.

“[W]e propose the statutory maximum amount of $20,489 for BarrierFree’s apparently missed March 2019 filing, and apparently inaccurate revised March 2018, September 2019, and March 2020 filings for a total of $81,956,” writes the Commission in paragraph 42.

The other 26 missed filings, including up to September 2018, are the filings apparently outside the Statute of Limitations, the FCC concluded.

The other half of the BarrierFree’s proposed penalty amount stems from what the Commission called willful and egregious violations of the company’s duty to submit complete and correct information in a response to a Letter of Inquiry. BarrierFree apparently did this twice, on June 3, 2019, and on November 18, 2019.

If you are seeking to outsource your communications company’s regulatory (and other) compliance needs, we invite you to visit www.TheComplianceSquare.com, where The Commpliance Group unveils its proprietary AccuCompliance SaaS-based compliance platform, and highlights all the ways its “Compliance Square” brand is “Where Compliance Comes Together” and why The Commpliance Group was recently named a Top 10 Most Promising Telecom Consulting Service Providers of 2020 by CIO Review.

Marashlian & Donahue stands by, ready to help your business face these complex issues. If you have questions or would like more information, please contact Andrew (“Drew”) Clark, Esq., at (703) 714-1323 or apc@commlawgroup.com. Mr. Clark has been one of country’s leading voices advocating for improved broadband mapping efforts and a rational geo-spatial system for collecting broadband data.

Because he is intimately familiar with the headaches caused by the Federal Communications Commission’s Form 477 data collection system, he knows how to minimize the burden of the FCC’s soon-to-be-implemented Digital Opportunity Data Collection.

ATTORNEY ADVERTISING DISCLAIMER: This information may be considered advertising in some jurisdictions under the applicable law and ethical rules. The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers