(But Doesn’t Offer Much Explanation as to Details or Guidance for Future Acceptable Action)
On April 10, the FCC released Orders and associated Consent Decrees resolving investigations into alleged violations of the site registration and/or pre-construction environmental review procedures by Sprint and Mobilitie. In the past, the Commission has made it clear that it means business when it comes to enforcing compliance with the often rigorous, expensive, and time-consuming procedures necessary to meet the environmental rules, which include the rules requiring evaluation and avoidance of adverse effects on historical and tribal sites.
The sheer size of the amounts required to settle the investigations, however, was enough to catch our attention: $10 million for Sprint and $1.6 million for Mobilitie. While the Consent Decrees referenced multiple violations of the rules, the number of sites and violations involved was not stated. In the past the FCC has used $7,000 as a base forfeiture amount for violations of this sort; therefore, one might conclude from the size of the settlement amount that there were either 1,400 sites implicated in the Sprint investigation (and over 200 in the Mobilitie one) or that there were egregious circumstances justifying multiplication of the base fine. The Consent Decree is frustratingly silent on this point, which unfortunately leaves the industry – those who might be expected to be warned and alarmed by this action – without a clear sense of how bad the alleged offenses were. We say “alleged offenses” because, while the Commission appeared to find non-compliance, termination of the investigation by settlement does not result in a finding of a violation of the law.
Apart from the size of the settlement amounts, we note two interesting features of these orders. First, the FCC has made it clear that amounts paid pursuant to consent decrees are not tax deductible. This is made explicit on page four in both consent decrees. In years past, parties could argue that these payments were “voluntary payments” (deductible) rather than fines (non-deductible). That ambiguity has been resolved. Second, in the case of Sprint, the decree indicates that compliance with the rules was the responsibility of a third party provider who undertook to build the sites and handle the environmental compliance. Yet, Sprint, one of multiple carriers who were to use the subject sites, was charged with the violation. Mobilitie, on the other hand, was itself the third party provider who constructed the sites and should have handled the environmental reviews; yet Mobilitie, rather than the ultimate carriers, was socked with the violation.
Why the FCC treated the carrier as the responsible party in one case and the site constructor in the other is not made clear by the FCC’s orders or the consent decrees. So, while the FCC certainly intends to signal its seriousness about compliance with the rules, it does not clearly explain which parties are responsible for that compliance.